Environmental and Social Monitoring Report

Project Number: 38919 April – October 2012

INDONESIA: Tangguh Liquefied Natural Gas Project Operator’s Environmental, Health and Safety Report

Prepared by BP Berau Limited Tangguh LNG Project Operator

This report has been submitted to ADB by BP Berau Limited and is made publicly available in accordance with ADB’s public communications policy (2005). It does not necessarily reflect the views of ADB.

Operator’s Environmental, Health and Safety Report Tangguh LNG

April– October 2012

TABLE OF CONTENTS ENVIRONMENTAL AND HEALTH SAFETY REPORT TANGGUH LNG PROJECT

TABLE OF CONTENTS ...... 1 Table List ...... 2 EXECUTIVE SUMMARY ...... 3 1. Regulatory Compliance ...... 4 1.1. Summary Description ...... 4 1.2. Implications for Tangguh ...... 4 2. Environmental Management Plan ...... 5 2.1. LNG Plant and its Supporting Facilities including Marine Facilities ...... 5 2.1.1. Wastewater Management ...... 5 2.1.2. Solid Waste Management ...... 8 2.1.3. Revegetation ...... 12 2.1.4. Air Emission ...... 12 2.1.5. Water Management ...... 12 2.1.6. Hydrocarbon and Chemical Storage and Handling ...... 12 2.2. Gas Production Facilities and Gas Transmission (GPF) ...... 13 2.3. Drilling Activities ...... 13 2.4. Environmental Management System ...... 13 3. Environmental Monitoring Plan ...... 14 3.1. LNG Plant and its Supporting Facilities including Marine Facilities ...... 14 3.1.1. Wastewater Monitoring ...... 14 3.1.2. Solid Waste Monitoring ...... 19 3.1.3. Revegetation ...... 21 3.1.4. Air Emission ...... 22 3.1.5. Hydrocarbon and Chemical Storage and Handling ...... 23 3.2. Gas Production Facilities and Gas Transmission (GPF) ...... 24 3.3. Drilling Activities ...... 24 4. Environmental Studies ...... 24 5. Health and Safety ...... 25 6. External Panel Annual Review and Status of Non Compliances ...... 28 7. Additional Information ...... 29 8. Evaluation Results ...... 29

Environmental Health and Safety Report 1 Tangguh LNG Project April– October 2012

FIGURE LIST

Figure 1 LNG PLANT ...... 5 Figure 2 PUMP AT LEACHATE POND ...... 6 Figure 3 PRODUCED WATER TREATMENT PLANT ...... 7 Figure 4 INERT LANDFILL ...... 8 Figure 5 NEW LANDFILL CONSTRUCTION (STATUS OF 15 OCTOBER 2012) ...... 9 Figure 6 PLASTIC GRANULATOR AND CAN COMPACTOR ...... 9 Figure 7 WOOD CHIPPER ...... 10 Figure 8 ORGANIC WASTE LANDFILL ...... 10 Figure 9 WASTEWATER QUALITY FROM STP STEP 3 CAMP ZONE A ...... 14 Figure 10 WASTEWATER QUALITY FROM STP STEP 3 CAMP ZONE C ...... 15 Figure 11 WASTEWATER QUALITY FROM STP UTILITY ...... 15 Figure 12 PRODUCED WATER QUALITY ...... 17 Figure 13 DESALINATION UNIT BRINE WATER QUALITY ...... 18 Figure 14 NEUTRALISING PIT WASTEWATER QUALITY ...... 19 Figure 15 Calophyllum inophyllum l (TREE), Paradisaea minor (BIRD OF PARADISE), Litotia genimaculata (FROG), Pitta sordida (BIRD), Nephentes ampularia jack (SEMAR BAG), Lygisaurus macfarlani (LIZARD), Chelonodon patoca (PUFFERS) and Dobsonia minor (BAT) ...... 24

TABLE LIST

Table 1 WASTEWATER TYPE AND FLOW RATE (APRIL 2012 – OCTOBER 2012) ...... 6 Table 2 RESULT OF EMISSION SAMPLING ON AGI IN JULY 2012 ...... 22 Table 3 RESULT OF EMISSION SAMPLING ON BOILER IN JULY 2012 ...... 22 Table 4 RESULT OF REGENERATION GAS HEATER EMISSION SAMPLING IN JULY 2012 ...... 22 Table 5 RESULT OF GAS TURBINE TRAIN 1 EMISSION SAMPLING IN JULY 2012 ...... 23 Table 6 RESULT OF GAS TURBINE TRAIN 2 EMISSION SAMPLING IN JULY 2012 ...... 23 Table 7 RESULT OF FLARING SAMPLING IN JUNE 2012 ...... 23 Table 8 KEY INDICATORS ON SAFETY PERFORMANCE...... 25 Table 9 TANGGUH HEALTH KPI ...... 27

Environmental Health and Safety Report 2 Tangguh LNG Project April– October 2012

EXECUTIVE SUMMARY

Tangguh is in steady operation at the design capacity. Tangguh conducted scheduled major turnaround activity (TAR) for Train 1 from 28 September 2012 for 36 days.

The environmental management and monitoring programmes continue to be implemented in line with the approved AMDAL and relevant permits granted for Tangguh as well as the Environmental Management System ISO 14001:2004 to maintain the certification that was obtained in December 2010. The latest external audit by accreditation body was done in October 2011 with no major/minor finding and some recommendations for continuous improvement. The next external audit is planned in January 2013.

The Tangguh Lenders’ External Panel (EP) visited Jakarta and Tangguh site in November 2011 with the objective of performing a compliance review of environmental and social performance. During their visit, the EP found no Level-2 non-compliance related to the environment or social section. There were four Level-1 non-compliances related to environment and also some recommendations proposed by EP on the environmental program. All Level-1 non-compliances have been closed.

Tangguh issued the AMDAL Implementation report for the period of April– October 2012 on 29 October 2012 to the Minister of Environment (MOE) and related government institutions including the local government, Ditjen MIGAS and BPMIGAS. This report is developed mainly based on the AMDAL Implementation report.

Tangguh maintains strong focus on all aspects of health and safety. Following the 2 HIPO cases and 1 DAFW case in Q1 2012, BP has conducted significant efforts to improve overall 2012 HSE performance. The 4-point safety intervention was introduced, covering simplify CoW at Non Production Facilities (NPF), management of contractors, behaviour conditioning, and significantly increase time at front line. Obvious improvement in HSE performance is noticeable compared to Q1 2012. A number of campaigns were run in the period of April to October 2012, including Driving Safety Campaign, Stop Unsafe Job Campaign, and Near Miss Reporting Awareness Sessions. The BP Control of Work (CoW) implementation is continuously improving, where a detailed CoW Roadmap has been developed to identify improvement areas and to date this approach is beginning to show benefits. Revision of Contractor Safety Management System (CSMS) Procedure has been completed in August 2012.

Health management system self-verification was conducted using the Health Management Assessment Tool (HMAT). The self-verification result indicated that Tangguh Operations has a good foundation of health management system. Industrial hygiene team supported the turnaround project (TAR) by providing health hazards awareness, technical advice on the task risk assessment and performing both area and personal monitoring. Occupational health programs were continuously delivered and improved during April until October 2012, including Fit for Task, Health Surveillance, Drug & Alcohol Screening Test, Communicable Diseases Control, Medical Emergency Preparedness, Medical Services, and Health promotion.

Environmental Health and Safety Report 3 Tangguh LNG Project April– October 2012

1. REGULATORY COMPLIANCE

1.1. SUMMARY DESCRIPTION

The Government of Indonesia (GoI) has issued several regulations that reflect the implementation of requirements in Law Number 32 year 2009 regarding Environmental Protection and Management:  Government Regulation No. 27 of 2012 on 23 February 2012 regarding Environmental Permit, which replaced Government Regulation No. 27 of 1999 regarding Environmental Impact Assessment.  Ministry of Environment (MoE) Regulation No.5 of 2012 on 5 April 2012 regarding Type of Business and/or Activity Plan that Shall Have Environmental Impact Assessment (ESIA), which replaced the MoE Regulation No. 11 of 2006 for the same subject.  MoE Regulation No. 16 of 2012 on 5 October 2012 regarding Guidelines for the Development of Environmental Document, replacing MoE Regulation No. 08 of 2006 regarding Guidelines for the Development of ESIA Document and the MoE Regulation No. 13 of 2010 regarding Environmental Management and Monitoring Effort and Statement Letter on the Commitment to Conduct Environmental Management and Monitoring  MoE Regulation No. 17 of 2012 on 5 October 2012 regarding Guidelines for Community Involvement in ESIA Process and Environmental Permit, replacing the Head of BAPEDAL Decree No. 08 of 2000 regarding Community Involvement and Information Transparency in ESIA Process.

1.2. IMPLICATIONS FOR TANGGUH

 Government Regulation No. 27 of 2012 provides new concept for the development of Environmental and Social Impact Assessment (ESIA), and requirement to hold Environmental Permit for new activities/projects, which have implications whenever Tangguh plans for new projects and expand the current operations.  The Ministry of Environmental Regulation no. 5 of 2012 provide updates on the list of business and/or activities that requires ESIA, which shall be used for future project to decide whether the project will require ESIA or Environmental Management or Monitoring Effort (UKL/UPL) or just a Statement Letter expressing project commitment to manage the environment (SPPL).  The requirements in MoE Regulation No. 16 of 2012 and MoE Regulation No. 17 of 2012 shall be applied for future projects that require ESIA or UKL/UPL or SPPL.

Environmental Health and Safety Report 4 Tangguh LNG Project April– October 2012

2. ENVIRONMENTAL MANAGEMENT PLAN

This six-monthly report covers the period of April - October 2012 which is consistent with Tangguh AMDAL reporting period to the Indonesian Ministry of Environment.

This report has been prepared to fulfil the Borrowers’ obligations under: Section 1.12 (Certain Environmental, Involuntary Resettlement and Indigenous Peoples Matters), Paragraph (B) (Regular Reports), sub-paragraph (a)(Environmental and Health and Safety Report) of the ADB Tranche PSC Parties Agreement dated as of 31 July 2006 and Section 1.18 (Certain Environmental, Involuntary Resettlement and Indigenous Peoples Matters), Paragraph (B) (Regular Reports), sub-paragraph (a) (Environmental and Health and Safety Report) of the Japanese Tranche PSC Parties Agreement" dated as of 31July 2006.

Tangguh LNG environmental, health and safety management and monitoring activities during the 6 month period from April - October 2012 is described in below sections.

2.1. LNG PLANT AND ITS SUPPORTING FACILITIES INCLUDING MARINE FACILITIES

During the reporting period of April-October 2012, Train 2 is in steady operation while train 1 was shutdown for planned maintenance from 28 September 2012 for 36 days. Step 3 camp refurbishment project has been completed. The construction of the new sanitary landfill has been started in Q1 2012 and expected to be completed in Q1 2013.

In October 2012, approximately 2,100 personnel on board (POB) accommodated at the dormitory A and B, Shorebase camp and Step 3 camp. The number of POB is increasing from about 1,700 personnel in April 2012 due to mobilisation of Turn Around (TAR) personnel. During the period of April-October 2012, the average POB number was 1873 personnel.

FIGURE 1 LNG PLANT

2.1.1. WASTEWATER MANAGEMENT

Wastewater generated from the site activities consists of sewage from camps and dormitories, brine water reject from the Reverse Osmosis (RO-desalination) and desalination units, and waste water from plant operation (chemically contaminated

Environmental Health and Safety Report 5 Tangguh LNG Project April– October 2012

water, oily water and produced water), in line with the approved AMDAL and the Minister of Environment Permit No 222 of 2008. The treated wastewater from the five streams is discharged through -13 m LAT discharge point.

TABLE 1 WASTEWATER TYPE AND FLOW RATE (APRIL 2012 – OCTOBER 2012)

Actual Debit Wastewater Maximum Debit Average (m3/day) (m3/day) Sewage – Utility 504* 130 Brine Water – Desalination Unit 11544* 1008 Produced Water 1992* 670 Oily Contaminated Water 2400* *** Chemically Contaminated Water 3600* 641 Sewage – Step 3 Camp 2000** 325 Brine Water – RO Unit 5904** 2135 * MoE Wastewater Discharge Permit No. 222/2008 ** MoE Wastewater Discharge Permit No. 562/2007 *** CPI effluent is routed to produced water system due to COD content, so there is no discharge for oily contaminated water

Sewage Sewage from dormitory A and B as well as from Admin building, Main Control Building and other permanent facilities is processed in the permanent STP, while two STPs in Step 3 (Zone A and Zone C) treat sewage from Step 3 Camps including its meshalls, kitchens and laundry; as well as portable toilets transferred by vacuum trucks.

Piping work and its pump to flow leachate directly to STP zone C have been completed and already started to transfer leachate with the amount of about 30 m3/day in average from organic waste landfill leachate collection pond to STP zone C for further treatment prior to discharge to -13 m LAT outfall.

WWTP Zone B is on idle and has been decommissioned to treat produced water from plant since 26 December 2011; produced water is treated in the new produced water treatment plant. The treated waste water from all STPs are discharged to -13m LAT outfall line at the LNG jetty.

FIGURE 2 PUMP AT LEACHATE POND

Environmental Health and Safety Report 6 Tangguh LNG Project April– October 2012

Brine water Permanent desalination facility processes sea water as raw water into desalinated water. This desalinated water then is processed into demineralised water and remineralised water. Demineralised water is utilised for process plant supply and remineralised water is utilised for domestic supply at dormitory and offices complex (administration building, central building, warehouse, fire station and workshop). Reverse Osmosis (RO) unit product is utilised for the consumption of step 3 camp. Average volume of brine water generated from desalination unit is 1008 m3/day and 2135 m3/day for RO unit. The brine reject is discharged to the common outfall at -13m LAT.

Produced water The new produced water treatment plant has been in full operation since 26 December 2011. Average volume of treated produced water generated is approximately 670 m3/day, compared to the total volume approved in the MOE permit No 222/2008 of 1992 m3/day.

FIGURE 3 PRODUCED WATER TREATMENT PLANT Oily contaminated wastewater The oily contaminated wastewater is treated in the CPI (Corrugated Plate Interceptor) to remove hydrocarbon content. However, oily contaminated sewer also receives wastewater from production system such as from Amine unit, causing high level of COD, hence wastewater from CPI effluent cannot be discharged directly to the sea. All oily contaminated wastewater is routed into the produced water tank to be treated with the produced water. No discharge of treated oily water from CPI directly to the common outfall.

Chemically contaminated wastewater The chemically contaminated wastewater is treated in the neutralization pit to normalize the pH level between 6 – 9 as per MoE permit no 222/2008 and then discharge through the -13m LAT discharge point. The average discharge from this source is 641 m3/day. Wastewater from new carbon bed wash in amine carbon filter unit is now directed to neutralization pit prior to discharge to -13 LAT. Permanent HDPE line was installed to route washing wastewater to neutralizing pit.

Environmental Health and Safety Report 7 Tangguh LNG Project April– October 2012

2.1.2. SOLID WASTE MANAGEMENT

Tangguh implemented the principle of reduce, reuse and recycle in the waste management. Strict segregation of waste is socialized to all Tangguh personnel, to enable proper management of each type of waste.

Non Hazardous Solid Waste The type of solid waste management generated from Tangguh operations includes organic waste i.e. food waste; recyclable waste i.e. cans, bottles, and glass; inert waste i.e. insulation, rockwool, and Styrofoam; reusable waste i.e. used tyre, and timber waste; and burnable waste i.e. paper, cardbox and thin plastic sheet. The waste management programs at Tangguh includes the operation of the non-hazardous waste incinerator, wood chipper machine and composter, plastic shredder and can compactor, as well as the operation of ex-construction inert landfill and organic waste landfill. The waste profile generated during this reporting period is presented in the Monitoring Section.

Inert waste is disposed off to dedicated inert landfill. This landfill is lined with HDPE sheets and provided leachate collection pit. Waste to be disposed off to inert landfill shall be completed with waste transfer note containing type, volume and generator of waste. The recapitulation of the inert waste is updated in monthly basis.

FIGURE 4 INERT LANDFILL Tangguh is currently constructing a new long-term landfill starting Q1 2012 and expected to be completed in Q1 2013. The landfill will be used for both inert and organic waste to replace the current organic and inert landfills that are estimated to be full in 2013-2014. The area used is ex-construction area that was revegetated at the end of construction phase.

Environmental Health and Safety Report 8 Tangguh LNG Project April– October 2012

FIGURE 5 NEW LANDFILL CONSTRUCTION (STATUS OF 15 OCTOBER 2012)

The reusable waste such as tyre, and timber waste are stockpiled at CWAA 2 located near non hazardous waste container. This waste is available for other contractors wanting to reuse it.

Recyclable waste such as beverage cans, plastic bottles and glass bottles is managed at CWAA 2. Beverage cans are compacted in a can compactor and plastic bottles are shredded in a plastic granulator. These two machines have reduced the volume of the waste significantly and extensively save space in the container and reducing transportation cost. This waste is sent to waste facility at Sorong, where some recycling effort is done.

FIGURE 6 PLASTIC GRANULATOR AND CAN COMPACTOR

Under the PSC Scheme, scrap metals are categorised as national asset and needs to undergo write off process approval prior to disposal. This waste is currently contained in wooden boxes and stockpiled at Shorebase area. Record of the waste is kept by Logistics department.

The wood chipper machine is operating on continuous basis to chip the timber waste. The wood chip is utilized for covering the organic landfill, as well as for composting and revegetation program. Tangguh through the logistic contractor provides a dedicated team to operate and segregate the timber waste for chipping.

Environmental Health and Safety Report 9 Tangguh LNG Project April– October 2012

FIGURE 7 WOOD CHIPPER

The operation of organic waste landfill continues to improve. Dedicated personnel is assigned to manage and monitor the day to day operation of the landfill. This landfill is lined with HDPE sheet and provided with leachate collection pond. Piping and pump installation work to transfer leachate to STP zone C have been completed by early June 2012 and continue transferring leachate to STP zone C for further treatment prior to discharge to -13m LAT outfall.

FIGURE 8 ORGANIC WASTE LANDFILL

Food waste is treated by composting unit. Woodchip feeding to the composter is reduced with a volume-based composition of 1 food waste : 2 woodchip, producing about 21,000 kg of compost per month. Procuring food dewatering unit will also be an alternative pursued to reduce the water content in the food waste hence increasing the amount food waste to be composted. This equipment is being purchased and will be available by the first quarter in 2013. On regular basis, wood chips and Effective Microorganism (EM4) are applied to reduce odor and accelerate decomposition.

This compost product is utilized for revegetation program and landscaping activity as planting media and fertilizer to increase soil nutrient. The compost is also available for community gardening program. The remaining organic waste that cannot be composted is sent to organic waste landfill.

Composter unit is not operating since end of July 2012 due to technical problem hence Environmental Health and Safety Report 10 Tangguh LNG Project April– October 2012

all of the food waste is disposed to organic waste landfill. Procurement process for spare part is ongoing. There was difficulty in finding local agent in Indonesia which has been solved, and the spare part will be delivered to site in Q1 2013.

Burnable waste such as paper, cardbox and thin plastic sheet is sent off to non- hazardous waste incinerator at Centralized Waste Accumulation Area (CWAA). The burnable waste to be sent off to the incinerator shall be completed with transfer note containing the type, volume and generator of waste. Recapitulation of the record is maintained and updated in monthly basis.

Hazardous Waste Hazardous waste such as used oil, used oil filters, paint cans, spent catalyst, contaminated soil, etc generated from Tangguh operations activities are temporarily stored in 2 (two) licensed temporary hazardous waste storage prior to the shipment to licensed hazardous waste facility in West Java. Tangguh has a contract in place with licensed hazardous waste facility for hazardous waste disposal, including onsite assistance for packaging and labelling of the hazardous waste. Regular shipment to licensed hazardous waste facility has been carried out to meet the maximum 90 days of storage period per permit requirement. Vessels (LCT JNW, LCT Cita XX, LCT Mandiri Sejahtera and LCT Alfa Trans Dua) to transport the hazardous waste have hazardous waste transport permits issued from Directorate General Sea Comminication with a recommendation letter from MoE. There were 9 hazardous waste shipments to licensed hazardous waste facility from April 2012 to October 2012.

TAR 1 and 2 activities completed in 2011 generated 768 drums of mercury contaminated catalyst. Concentration of mercury in 2 drums was more than 260 mg/kg. 766 drums with mercury contamination less than 260mg/kg had been sent to certified treatment facilities in West Java. Strict protocol following the applicable regulations were applied in the mercury sampling, sample handling, the waste handling and temporary storage on site and the transportation to licensed hazardous waste facility. The 2 drums with mercury concentration greater than 260 mg/kg currently stored at new temporary hazardous waste storage. Spent catalyst with mercury content greater than 260 mg/kg are to be sent to permitted retorting facility which currently not available in Indonesia. The permitting process for the waste transfer is still ongoing. Permit to store this hazardous waste for more than 90 days has been approved by Teluk Bintuni Government on 26 August 2011. The two drums from TAR activity are still kept in new hazardous waste temporary storage. Inspection is conducted on a routine basis.

As part of the TAR 3 activity in October-November 2012, the molecular sieve from Dehydration units from Train 1 was changed. This activity generated 1155 drums of spent molecular sieve. All drums were sampled for mercury content by certified external laboratory and all samples (1271 samples) shown the results that mercury content is less than 260 mg/kg. These drums will be sent to licensed hazardous waste facility in West Java in stages.

As per PP 18/1999 j.o. 85/1999 regarding Hazardous Waste, sludge from wastewater treatment plant is categorised as hazardous waste. This category also applies for biosludge from PWT. On 5 January 2012, Tangguh submitted LD50 and TCLP test results to MoE requesting bio-sludge to be treated as non-hazardous waste and can be disposed off to in-situ landfill, followed by updated test results on 13 March 2012. Tangguh has re-submitted the application letter to MoE regarding bio-sludge treatment with reference number 0025/MNLH/Berau/7/2012. Meanwhile, bio-sludge will still be

Environmental Health and Safety Report 11 Tangguh LNG Project April– October 2012

treated as hazardous waste and sent to permitted treatment facility offsite until confirmation from MoE is received.

2.1.3. REVEGETATION

The revegetation program during LNG construction activity within Tangguh site has been observed to be sustained well. The maintenance of the revegetated area has been significantly reduced. The only effort to ensure the sustainability of the trees is now by visual monitoring. Any areas which required particular attention or treatment, is to be reported to logistics department for further treatment.

Erosion and sedimentation control of the new sanitary organic landfill project has been performed in a manner to minimize impact on erosion by soil compaction and reduce the introduction of additional sediment due to surface runoff by installing brush barrier. Topsoil is salvaged and retained for future revegetation use. No significant impact on erosion and sedimentation are observed in this reporting period.

2.1.4. AIR EMISSION

The effort to minimize flaring in 2012 is continued by improving plant performance and day to day monitoring of the flaring. As of 31 October 2012, the actual flaring is 4,499 mmscf (average about 15 mmscf per day, compared with about 25 mmscf per day in 2011).

2.1.5. WATER MANAGEMENT

Fresh water supplies required for operations activities is secured from several sources including temporary RO facility, the permanent desalination facility and bottled mineral water. The average water production of the RO is 531 m3/day while the permanent desalination facility is 1,320 m3/day which gives the total production of 1,851 m3/day.

2.1.6. HYDROCARBON AND CHEMICAL STORAGE AND HANDLING

The Tangguh LNG’s policy is to confine all fuel and liquid chemical storage in retention berms/secondary containment to prevent against the risk of spill contamination to the soil. Tank identity, content, volume and warning sign shall be labeled on the tank. Any chemicals shall be accompanied with MSDS (Material Safety Data Sheet). Emergency equipments are put in place in each chemical and fuel storage such as fire extinguisher, first aid kit, spill kit and eye/body wash unit. The standards for the containment are being monitored periodically for compliance through internal audits and inspections. Risk analysis on any to-be –purchased chemicals by company is carried out to ensure the chemicals having low impact to the environment, health and safety. Inspection to all fuel storage and chemical storage is conducted regularly. Any findings from the inspection recorded in the inspection checklist and followed up accordingly. As part of the continuous improvement program, the secondary containments of all fixed tanks have been remodified to meet the 110% capacity. Secondary containment remodification is monitored in regular basis to track the progress. All tanks have also been completed with labels, warning signs, oily water separator and oil spill kit. All works for secondary containment have been completed.

Drip pan trays are used during maintenance and refueling and personnel involved in these activities have been properly trained. Posters are strategically placed to maintain awareness on proper re-fueling and maintenance procedures. Oil and chemical spill kit have been distributed within needed area for immediate response in case of spill. Full Environmental Health and Safety Report 12 Tangguh LNG Project April– October 2012

and detailed records are maintained of any spills, however minor. Any spill is recorded and reported every 6 months to Ditjen Migas for spill less than 15 bbls. Immediate notification to Ditjen Migas will be prepared for spill more than 15 bbls. No spill more than 15 bbls occurred during the reporting period. Any deficiency found within operation activities is directed to relevant department within Tangguh.

There were 6 minor LOPC incidents reported in April 2012 – October 2012 less than 15 bbls. Immediate actions were taken to response to these spills and investigations were conducted for improvement. List of minor spill is provided in the attachment.

2.2. GAS PRODUCTION FACILITIES AND GAS TRANSMISSION (GPF)

The two VR-A and VR-B platforms and the two subsea pipelines are fully operational. The platforms are normally unattended platform, however, monitoring and maintenance visit are conducted on regular basis. Pipeline inspection program has been done to check the integrity of the pipeline.

2.3. DRILLING ACTIVITIES

There is no drilling activity in this reporting period. Drilling program as part of the Tangguh Exploration and Appraisal Plan (TEAP) is scheduled for 1Q 2013. Three firm plus one optional exploration and appraisal wells are planned to be drilled as part of this TEAP. This activity is not covered under Integrated Tangguh AMDAL. Separate UKL/UPL has been developed and submitted to local government of Teluk Bintuni District and West Papua Province. The UKL/UPL for three wells has been approved by Teluk Bintuni District, while the UKL/UPL for O2 well has been approved by Bapedalda Manokwari. Environmental permit from O2 well has also been approved by the Papua Barat government, following the issuance of the UKL/UPL recommendation.

2.4. ENVIRONMENTAL MANAGEMENT SYSTEM

An enhancement program on employees’ awareness relating to environmental management through environmental day campaign was held in June 2012. Champions and Document Controls from each department are responsible to ensure ISO 14001 requirements in their respective areas are fully followed with the supervision of ISO 14001 coach. Daily implementation programs are Environmental Management Program update, routine inspection, ISO 14001 awareness training, and coaching program. Joint inspection schedule is continued to improve Tangguh Environmental Management System with ISO 14001:2004 standard.

Rigorous in-house trainings were conducted to improve individual awareness, skill and competency and this will be continued on a regular basis. There were 2 batches of champions’ trainings, 3 batches of train of trainer trainings, and 3 batches of internal auditor trainings conducted in 2012. Internal audit has been implemented in June 2012, with 45 non-conformities and 23 observations findings. These non-conformities and observations were mostly closed, the remainings are tracked to ensure closure as per schedule.

The latest external audit by accreditation body was done in October 2011 with no major/minor finding and some recommendations for continuous improvement, such as on waste segregation, hazardous material and waste labelling, and document/record control. The next external audit is planned in January 2013.

Environmental Health and Safety Report 13 Tangguh LNG Project April– October 2012

3. ENVIRONMENTAL MONITORING PLAN

The objective of environmental monitoring program is to ensure that environmental management has been performed effectively and to ensure compliance with AMDAL’s requirements and applicable environmental regulations.

Tangguh has secured environmental monitoring contract with a certified external Indonesian laboratory to perform regular monthly and quarterly sampling and laboratory analysis in line with AMDAL and permitting requirements. In addition, Tangguh has also internal site laboratory to conduct regular day-to-day internal sampling and monitoring programs onsite.

3.1. LNG PLANT AND ITS SUPPORTING FACILITIES INCLUDING MARINE FACILITIES

3.1.1. WASTEWATER MONITORING

Sewage The treated effluent from Sewage Treatment Plants is sampled and analysed at the discharge points prior to discharge into the seawater at the common outfall -13 meter LAT. The effluent discharge is monitored weekly and measured against the prevailing Indonesian regulations KEP-112/MENLH/2003 and KEP 51/2004 respectively as stipulated in AMDAL and applicable Indonesian regulation and permit no.562/2007, permit no. 222/2008. In this reporting period, all parameters for STP zone A, Zone C, and Permanent STP effluent are in compliance with the standards.

pH STP Zone A BOD5 STP Zone A 10 120 9 8 100 7 80 6 5 60

pH 4

BOD 3 40

2 20 1 0 0 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 pH BakuBulan Mutu Baku Mutu BulanBOD5

O & G STP Zone A TSS STP Zone A 11 140 10 120 9 8 100 7 6 80

5 TSS

O &G 60 4 3 40 2 20 1 0 0 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Apr-12 May- Jun-12 Jul-12 Aug-12Sep-12 Oct-12 12 BulanO & G BulanTSS FIGURE 9 WASTEWATER QUALITY FROM STP STEP 3 CAMP ZONE A

Environmental Health and Safety Report 14 Tangguh LNG Project April– October 2012

pH STP Zone C BOD5 STP Zone C

10 120 9 8 100 7 80 6

pH 5 60 BOD 4 40 3 2 20 1 0 0 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 pH BakuBulan Mutu Baku Mutu BOD5 Bulan Baku Mutu

O & G STP Zone C TSS STP Zone C

12 120 10 100 8 80 6 60 TSS O & G 4 40 2 20 0 0 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 O & G BulanBaku Mutu TSS BulanBaku Mutu FIGURE 10 WASTEWATER QUALITY FROM STP STEP 3 CAMP ZONE C

pH STP Utility BOD STP Utility 5 10 120 9 8 100 7 80 6

pH 5 60 4 BOD 40 3 2 20 1 0 0 Apr-12 May- Jun-12 Jul-12 Aug-12Sep-12 Oct-12 Apr-12 May-12Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 12 pH BulanBaku Mutu BulanBOD5

O & G STP Utility TSS STP Utility

12 100 90 10 80 70 8 60 6 50 TSS 40 O & G 4 30 20 2 10 0 0 Apr-12 May-12Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 TSS OBulan & G Bulan

FIGURE 11 WASTEWATER QUALITY FROM STP UTILITY

Environmental Health and Safety Report 15 Tangguh LNG Project April– October 2012

Produced Water As of 26 December 2011, new produced water treatment plant is in fully operational and effectively treats the produced water. All of the parameters are in compliance since the new PWT first operated until 14 August 2012. In mid-August 2012 the ammonia value was above the regulation limit value as a result of wireline activity at VRB wells. During this activity the application of TEG (Triethylene Glycol) was performed and causing shock loading in biological treatment unit which affect the bacteria condition. Produced water flow rate also reduced due to train 2 shutdown on 14 August 2012 hence the COD and NH3-N value at the treatment unit was increasing especially for NH3-N parameter that reached above the threshold limit (5 mg/l). Since the increase of NH3-N value, the wastewater discharge to the sea was stopped and the treated water is flowed to the off-spec tank. This circulation causes NH3-N accumulation in the system and harming the biological treatment process. To prevent the increase of NH3- N and other significant disturbance to the biological treatment, since 25 August 2012 the treated produced water has been discharged to the sea. Prior notification to MoE has been sent before the discharge, which include proposed action plans to remedy the situation, focusing on recovery and increase the amount of healthy bacteria in the biological treatment unit. After rigorous efforts from Tangguh team, since 22 September 2012 onwards, the ammonia concentration in the effluent has been back to normal and complies with the regulation limit. Recurrence of this event is prevented by controlling the COD load at wastewater treatment feed especially during one or two trains shutdown and also controlling the source of nitrogen (total-N) incoming to wastewater treatment plant.

Brine Water Monitoring result of brine water from RO and Desalination unit is in compliance with MoE wastewater discharge permit except TSS of desalination brine water in April 2012, June 2012, July 2012, August 2012, and October 2012. This event is often occurring due to seawater at Bintuni Bay naturally containing high Total Suspended Solids (TSS). During the baseline survey back in 2000-2001, TSS was found between a minimum of 32 mg/L (S-230, wet season) and a maximum of 173 mg/L (S-130L, dry season), with an overall average of 71 mg/L. The threshold value standard for TSS is 100 mg/L (based on Permit No. 222/2008). These naturally high TSS values reflect the large amount of sediment transport within the local ecosystems, caused by high rainfall, runoff, and tidal action. Tangguh internal laboratory also conducted monitoring on the inlet of the desalination unit, and the results showed similar trend, e.g. the inlet result was 446 mg/l when the brine water result was 560 mg/l in February 2012.

The condition was also discussed with representative from MoE during site visit in mid April 2012, to be considered in the process of permit approval.

Environmental Health and Safety Report 16 Tangguh LNG Project April– October 2012

COD Produced Water O & G Produced Water 250 30 200 25 20 150 15 100 O & G COD 10 50 5 0 0 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Bulan Bulan COD O & G

Methanol Produced Water TDS Produced Water

120 4500 4000 100 3500 80 3000 2500 60 TDS

Methanol 2000 40 1500 20 1000 500 0 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 0 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Bulan Bulan Methanol TDS Baku Mutu Baku Mutu

FIGURE 12 PRODUCED WATER QUALITY

Environmental Health and Safety Report 17 Tangguh LNG Project April– October 2012

pH Desalination Unit TSS Desalination Unit

10 350 9 300 8 7 250 6 200 5 pH 4 TSS 150 3 100 2 1 50 0 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 0 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 pH BakuBulan Mutu Baku Mutu TSS Bulan Baku Mutu

Salinity Desalination Unit

31 30 30 29 29 28 28

Salinity 27 27 26 26 25 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Salinitas pada 30 m titik pembuangan Salinitas Exclusion Zone FIGURE 13 DESALINATION UNIT BRINE WATER QUALITY

Oily Contaminated Wastewater The oily contaminated wastewater is treated in the CPI (Corrugated Plate Interceptor) to remove hydrocarbon content. However, the oily contaminated sewer also receives wastewater from production system such as from Amine unit, causing high level of COD, hence wastewater from CPI effluent can not be discharged directly to the sea. All oily contaminated wastewater is routed into the produced water tank to be treated with the produced water. No discharge of treated oily water from CPI to the common outfall.

Chemically contaminated wastewater The chemically contaminated wastewater is treated in the neutralization pit to normalize the pH level between 6-9 as per MoE permit no 222/2008 which then discharge to the -13m LAT discharge point.

Environmental Health and Safety Report 18 Tangguh LNG Project April– October 2012

COD Neutralization Pit pH Neutralization Pit 10 250 9

8 200 7 6 150 5 COD

pH 4 100 3 2 50 1 0 0 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12

Bulan pH Baku Mutu Baku Mutu COD Bulan Baku Mutu

Toxic Neutralization Pit TSS Neutralization Pit 60 8 50 6 40 5

3 30 TSS Toxic Metal 2 20 0 10 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Antimony Baku Mutu Arsenic Berylium 0 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Cadmium Chromium Copper Lead Mercury Nickel Bulan Selenium Thalium TSS Bulan Baku Mutu Vanadium Zinc Silver

FIGURE 14 NEUTRALISING PIT WASTEWATER QUALITY

3.1.2. SOLID WASTE MONITORING

Monitoring continues on Tangguh Operation waste management also including on subcontractor’s temporary waste storage facilities to ascertain regular collection of waste, collection place and disposal at the organic waste pits or inorganic waste collection place to be later sent to waste collector to offsite recycling facility. Documentation for waste transportation, including waste manifests, are assessed as part of monitoring process. Routine monitoring is also carried out in Central Waste Accumulation Area (CWAA) area, landfill, STP and incinerator. Solid waste profile is shown in the following figure.

Environmental Health and Safety Report 19 Tangguh LNG Project April– October 2012

Environmental Health and Safety Report 20 Tangguh LNG Project April– October 2012

3.1.3. REVEGETATION

No significant impact on the erosion and sedimentation management as revegetation program at site has been observed sustained well. The only effort to ensure the sustainability of the trees is by visual monitoring. Any areas which required particular attention or treatment, is to be reported to logistics department for further treatment.

Erosion and sedimentation control of the new sanitary organic landfill project has been performed in a manner to minimize erosion by soil compaction and reduce the Environmental Health and Safety Report 21 Tangguh LNG Project April– October 2012

introduction of additional sediment due to surface runoff by installing brush barrier. Topsoil is salvaged and retained for future revegetation use.

No significant impact on erosion and sedimentation are observed in this reporting period.

3.1.4. AIR EMISSION

The result of emission air monitoring activities conducted in June 2012 and July 2012 shows that all parameters are in compliance with relevant Indonesian regulation (Kep- 13 of 2009 for emission air) as well as Tangguh LNG project standard as stipulated in the AMDAL. In this reporting period, ambient air monitoring is conducted in October 2012 due to equipments issue and the result will be reported in the next reporting period. Tangguh contracted external laboratory has conducted isokinetic sampling on boilers, acid gas incinerator stack, gas turbine, gensets, and several points within the site as outlined in the Table 1 - 6.

TABLE 2 RESULT OF EMISSION SAMPLING ON AGI IN JULY 2012

Standard Acid Gas Acid Gas Parameter Unit (KepMen LH Incinerator I Incinerator II 13/2009) Sulphur Dioxide SO2 Mg/m3 <1 <1 2600

TABLE 3 RESULT OF EMISSION SAMPLING ON BOILER IN JULY 2012

Standard Boiler Boiler Boiler Parameter Unit (KepMen LH Stack A Stack B Stack C 13/2009) Total Particulate mg/m3 6 3 18 50 Opacity * % <5 <5 <5 20 3 Nitrogen Dioxide NOX mg/m <1 <1 <1 400 3 Sulphur Dioxide SO2 mg/m <1 <1 <1 150

TABLE 4 RESULT OF REGENERATION GAS HEATER EMISSION SAMPLING IN JULY 2012

Standard Regent Gas Regent Gas Parameter Unit (KepMen LH Heater I Heater II 13/2009) Total Particulate mg/m3 N.A. N.A. 50 3 Nitrogen Dioxide NOX mg/m <1 <1 400 3 Sulphur Dioxide SO2 mg/m <1 <1 150

Environmental Health and Safety Report 22 Tangguh LNG Project April– October 2012

TABLE 5 RESULT OF GAS TURBINE TRAIN 1 EMISSION SAMPLING IN JULY 2012

Standard Gas Turbine Gas Turbine Parameter Unit (KepMen KLH Train 1 - PR Train 1 - MR 13/2009) Total Particulate mg/m3 15 N.A 50 3 Nitrogen Dioxide NOX mg/m <1 <1 320 3 Sulphur Dioxide SO2 mg/m <1 <1 150

TABLE 6 RESULT OF GAS TURBINE TRAIN 2 EMISSION SAMPLING IN JULY 2012

Standard Gas Turbine Gas Turbine Parameter Unit (KepMen KLH Train 2 - PR Train 2 - MR 13/2009) Total Particulate mg/m3 18 N.A 50 3 Nitrogen Dioxide NOX mg/m <1 <1 320 3 Sulphur Dioxide SO2 mg/m <1 <1 150

TABLE 7 RESULT OF FLARING SAMPLING IN JUNE 2012

Standard Flare Stack - Flare Stack - Parameter Unit (KepMen KLH ORF BOG 13/2009) Opasitas % 20 * 40 Note : *Flare Stack at BOG only used intermittent (not continuous)

Tangguh LNG has installed online monitoring equipment on four stacks, which are from two Acid Gas Incinerators and two turbines. New analyzer for Acid Gas Incinerator 1 and 2 have been installed and now the CEMS performs well. CEMS result is reported to MoE on a 3-monthly basis.

3.1.5. HYDROCARBON AND CHEMICAL STORAGE AND HANDLING

The management of fuel and chemical used onsite is robust and in compliance with AMDAL and the Indonesian regulations. During this reporting period, there were 8 minor LOPC (Loss of Primary Containment) reported. Actions were immediately taken to clean up all spills and lesson learned to mitigate recurrence. The waste from the spill, including the contaminated soil/gravel is handled as hazardous waste, to be later disposed to offsite hazardous waste treatment facility. Regular spill drill and training were performed to ensure the readiness of response team in handling oil/chemical spill. Regular inspection and socialization was conducted on the storage area with particular focus on the storage for chemicals and oil. Comprehensive inspection was conducted to identify all storage tanks within the site and recommendations for improvement have been provided for further follow up. Actions have been taken in steps to close all gaps. The actions include secondary containment remodification to meet 110% capacity, improvement of secondary containment liner, labelling, warning sign, oily water separator and oil spill kit availability.

Environmental Health and Safety Report 23 Tangguh LNG Project April– October 2012

3.2. GAS PRODUCTION FACILITIES AND GAS TRANSMISSION (GPF)

The monitoring of the GPF area is part of the whole Tangguh Operation activities as outlined in the previous section of LNG and its supporting facilities.

3.3. DRILLING ACTIVITIES

No drilling activity in this reporting period.

4. ENVIRONMENTAL STUDIES

Tangguh had conducted Flora-Fauna survey in November-December 2011. The survey was supported by national university (IPB) and local university (UNIPA). The objective is to monitor the changes and dynamic of the biodiversity of Tangguh area and to update previous Flora-Fauna Studies that were done in 2004 and 2007. Final report is already completed on November 2011.

The Flora and Fauna survey was implemented at 3 different ecosystem i.e. Low Land forest, Swampy forest and Mangrove forest around Tangguh buffer zone area, for the following data: a) Species diversity b) Population density c) Habitat condition d) Spatial distribution e) Endemic flora and Fauna species

Field observation of Flora and Fauna were divided into eight different taxon of each ecosystem, which are: 1) Plant (consist of trees, lianas, herbs, livestock and pastures) 2) Fungus 3) Insect (consist of bug, beetles, dragonflies butterflies and moths) 4) Soil organism 5) Fish including types of fish found in estuarine water, river and creek 6) Herpetofauna (reptile and amphibian) 7) Birds including migratory species 8) Mammals

FIGURE 15 Calophyllum inophyllum l (TREE), Paradisaea minor (BIRD OF PARADISE), Litotia genimaculata (FROG), Pitta sordida (BIRD), Nephentes ampularia jack (SEMAR BAG), Lygisaurus macfarlani (LIZARD), Chelonodon patoca (PUFFERS) and Dobsonia minor (BAT)

Environmental Health and Safety Report 24 Tangguh LNG Project April– October 2012

Species that was identified during Flora and Fauna survey in Tangguh buffer zone are the followings: 182 plant species, 11 mammals, 146 birds, 12 amphibians, 19 reptiles, 22 fish, 5 crustacean, 87 butterflies, 104 moths, 272 insects and 74 fungus. This result shows that Low land forest, swampy forest and mangrove forest in Tangguh is rich in biodiversity.

5. HEALTH AND SAFETY

Safety Following the 2 HIPO cases and 1 DAFW case in Q1 2012, BP has conducted significant efforts to improve overall 2012 HSE performance. The 4-point safety intervention was introduced and is continuously emphasized in the Operations. The intervention covers simplify CoW at Non Production Facilities (NPF), management of contractors, behaviour conditioning, and significantly increase time at front line.

4 points safety intervention cover: 1. Simplify CoW process to improve understanding, then implement consistent discipline across all areas. 2. Speak-up about current weakness in our management of contractors, and reach a set of simple principles which we will all follow, always 3. Put every on-site contractor through a 4-hr behaviour conditioning process to ensure that our requirements are so clear that anyone not complying can legitimately be exited from our site. 4. Re-focus the organization to significantly-increased time-at-front-line, directly verifying and supporting performance, and ensuring that every leader truly knows what is going on in his/her area and is responsible for the physical reality of activity in their areas. Site Manager has mandated 1 site-visit per day and other distractions will be reduced

A number of campaigns were run in the period of April to October 2012, i.e. Driving Safety Campaign, Stop Unsafe Job Campaign, and Near Miss Reporting Awareness Sessions.

As the results of 4 points safety intervention and several campaigns implementations, the HSE Lagging Indicators in the period of April to October 2012 has been improved as shown in the following table.

TABLE 8 KEY INDICATORS ON SAFETY PERFORMANCE

2012 2011 Q1 Q2 Q3 YTD-Oct Fatality 0 0 0 0 0 HiPo 0 2 0 0 2 1 0 0 1 DAFWC 0 (0.08) (0.04) (0.03) (0.02) RIF 0.11 0.08 0.08 0.05 0.05

Tangguh has established a PS KPI (Process Safety Key Performance Indicator) as a tool to monitor the healthiness of Tangguh operation in term of process safety performance. The KPI is measured through some process safety audits and data collection and analysis. The audit result is utilised to consistently improve the process safety performance and continually reduce the risk.

Environmental Health and Safety Report 25 Tangguh LNG Project April– October 2012

The BP Control of Work (CoW) implementation is continuously improving with the learning processes from the CoW audit cycles where the compliance against the Integrated Safe System of Work (ISSOW) procedures continuously scrutinizes. The improvement expressed from the reduction of important findings that directly related to the safe execution of the job at field, and focus increase on how Performing Authority delivering the quality tool box to the workers. The CoW Audit processes provides learning and opportunity for improvement. Critical learning are shared across site. Regular Performing Authority meetings are still being held to communicate and discuss our audit findings as well as lessons learned with relevant Performing Authorities, Area Authorities & Site Controllers. The work that was completed to update procedures incorporating the BP and industry best practices for process safety and the ISSOW practices are now in place and known as the Tangguh Operating Standards. The next step is now developing and updating our training material based on the Tangguh Operating Standards. As part of the Tangguh 4 Point Intervention Plan a detailed CoW Roadmap was developed to identify improvement areas and to date this approach is beginning to show benefits.

Contractor safety management is one of the main focuses for this year. Series of workshop involving contract owners as well as one on one sessions with contractors were conducted to identify on the gaps of the contract and implementations and further agree on the action plan for commitment implementation. “How We Operate” now includes “Contract” as an element to set Operating Behaviour Standard of Tangguh LNG.

Revision of Contractor Safety Management System (CSMS) Procedure has been completed in August 2012. Subsequently, socialization sessions were conducted for BP personnel involved in contract management as part of the efforts to assure its compliance of the procedure implementations. Authorization to Operate (ATO) process introduced with this procedure revision, this additional process had increase the assurance on the contractor’s readiness for mobilization of personnel and equipments to worksite. The implementation of During Job Audit (DJA) with clearer HSSE expectation on the contract had also improved the overall HSE performance.

Industrial Hygiene Health management system self-verification was conducted using the Health Management Assessment Tool (HMAT) from BP Group. This new tool has been developed to support sites in self-assessing where they are with respect to managing health risks and check strengths and weaknesses to conform to OMS requirements. The tool covers industrial hygiene, occupational health and public health aspects. The self-verification result indicated that Tangguh Operations has a good foundation of health management system. Valuable discussions obtained during the process among the health team on determining next steps for improvements.

Asbestos management self-verification was conducted to ensure appropriate management programs and controls are in-place in accordance to the Tangguh Operation Asbestos Management Procedure. The process include assurance of free asbestos policy implementation in the procurement system both for goods and service contracts, alternative materials for substitution, safe working practices, asbestos register, labelling, and hazard awareness among relevant parties. The actions are registered into Traction for proper closure.

A periodic review of Similar Exposure Group (SEG) profiles is established by involving occupational health team. The objectives of the review are to ensure the SEG being Environmental Health and Safety Report 26 Tangguh LNG Project April– October 2012

updated based on the most current exposure assessment data and to develop appropriate health surveillance programs. Any changes on the exposure profiles will be translated into the health surveillance programs.

Industrial hygiene team supported the turnaround project (TAR) by providing health hazards awareness, technical advice on the task risk assessment and performing both area and personal monitoring such as benzene, mercury, particulate, welding fumes and heat stress. The industrial hygiene program can be implemented well as the result of good planning and anticipation since the industrial hygiene team is integrated into the TAR project team.

Occupational Health TABLE 9 TANGGUH HEALTH KPI

TANGGUH HEALTH KPI Measur Q2 Q3 Q4 Code PROGRAM / ACTIVITIES Target ement April May June July Aug Sep Oct 1 Occupational Health Program 1.1 FFT compliance % 100 99.28% 100.00% 99.53% 100.00% 99.77% 100.00% 99.77% 1.2 Health Surveillance % 100 95.56% 100% 100% 81.11% 98.89% 100.00% 100.00% 1.3 Temporary Unfit Case Cases NA 33 24 31 22 27 19 21 1.4 Return to Work Case Cases NA 15 8 15 7 13 9 5 1.5 Case Management Cases NA 18 16 16 15 14 10 16 1.5 Health Talk No 32 33 38 51 30 44 58 37 1.6 Weekly Health Flyer times 45455 5 5 7 Malaria screening compliance (blood % 100 100% 100% 100% 100% 100% 100% 100% 1.7 smear check) 1.8 Site M alaria Transmission Cases 0 0000 0 0 0 1.9 First Aider level 2 (average) % 100 100.5% 95.6% 99.9% 103.1% 115.24% 117.83% 112.26% 1.10 Drills (first aid and mass casualty) 100% 8/mo 10 12 17 11 61119 1.11 Drug&Alcohol Screening times 100 138 158 118 187 99 87 128 As shown in above table, where all indicators mostly achieved 100% target, Occupational health programs were continuously delivered and improved during April until October 2012, including Fit for Task, Health Surveillance, Drug & Alcohol Screening Test, Communicable Diseases Control, Medical Emergency Preparedness, Medical Services, and Health promotion.

Fit for tasks assessment, which is one of the most advanced all health programs (strong commitment from site senior management as shown in above table, where it was constantly > 99% every month) in Tangguh, has been performed consistently, including during TAR 3, where it was also carried out massively to ensure that all employees involved in TAR 3 are fit to do their tasks.

However, for employees who are identified as Temporary Unfit (both in project and daily operation activities), occupational health team through Rehabilitation (Return to Work) program provided support and performed monitoring to ensure that they get adequate treatment, so they might as soon as possible back to normal work tasks.

Health surveillance program in TAR 3 has been conducted to ensure that all employees in this project are well protected and monitored to any potential health hazards in the project, such as noise, heat stress, benzene, etc. The results of this program confirmed that none of the employees experienced significant health hazards exposures during the project.

Environmental Health and Safety Report 27 Tangguh LNG Project April– October 2012

Monthly random screening of Drug and Alcohol program at Tangguh site was also improved significantly. Consistent follow up involving line manager were conducted by HR Workforce team to ensure no one escape from the test without valid justification. During TAR 3, additional alcohol random test program was also applied to TAR project workers and it revealed no Non-negative result found from the screening activities so far.

Medical emergency response capability, which is one of the critical controls at site has been also maintained and ensured having adequate capacity in responding any medical emergency case, including mass casualty. Regular inspection for its equipment and facilities, as well as drills on various areas and levels of medical emergency response procedures are continuously carried out, reviewed and improved as part of this continuous capacity improvement.

A remarkable performance (100% target from April - October 2012) was also achieved in our Malaria control program, in which the screening test is performed to all employees and visitors who are identified from endemic areas or have potential as a malaria carrier. With this rigorous screening test implementation and also vector control at site, we might consistently ensure there is no local transmission at site.

Health promotion on occupational health and also general health issues is part of a regular health program which carried out through some methods, including face-to-face health talks, flyers, posters and also some health events, where the biggest one, Health Fair, is planned to be conducted in December 2012.

6. EXTERNAL PANEL ANNUAL REVIEW AND STATUS OF NON COMPLIANCES

The Tangguh Lenders’ External Panel visited Jakarta and Papua in November 2011. This is the first visit of the new External Panel (EP-2) with the objective of performing a compliance review of environmental and social performance. During their visit, the External Panel found no Level-2 non-compliance related to the environment or social section. There were four Level-1 non-compliances and also some recommendations proposed by EP on the environmental program. All Level-1 non-compliances have been closed and included in the previous report (October 2011 – April 2012).

As per the Tangguh ADB Loan Tranche Agreement non-compliance is defined as follows: Level 1 E&S Non Compliance: “means any failure to comply with, or any action or omission which is inconsistent with, any Environmental and Social Requirement, but which failure, action, or omission does not constitute a Level 2 E&S Non Compliance.”

Level 2 E&S Non Compliance: “means any failure to comply with, or any action or omission which is inconsistent with, any Environmental and Social Requirement, but which failure, action, or omission (considered either on its own or in conjunction with any other one or more such failure(s), action(s) or omission(s)):  Has resulted in or is reasonably likely to result in material damage or harm to, or a material and adverse impact on, the environment;  Constitutes or is reasonably likely to constitute a “significant impact” for the purposes of and as defined in the Indonesian Decree Concerning Guidelines for the Determination of Significant Impacts (BAPEDAL Decree No. KEP056/1994);

Environmental Health and Safety Report 28 Tangguh LNG Project April– October 2012

 Has resulted in or is reasonably likely to result in material damage or harm to, or a material and adverse impact on, the lives, livelihood, quality of life, health, safety, security, property or cultural heritage of affected people; or  Has resulted in or is reasonably likely to result in the revocation of, or the refusal to grant, any approval, consent, permit or other authorization required for the implementation of the Tangguh E&S Project (but only to the extent that such approval, consent, permit or other authorization is required for implementation o the Tangguh E&S Project at that time.”

7. ADDITIONAL INFORMATION NA

8. EVALUATION RESULTS

Management of non-hazardous and hazardous waste is improving. The compliance toward waste management procedure has been implemented well by each department although minor deviations still found. The deviations are recorded in a non- conformance form which then be followed up and rectified.

The effluent quality of wastewater is in compliance with standards except TSS at Desalination Unit and NH3-N at Produced Water Treatment. Rectification efforts and regular maintenance is continuously carried out to recover the quality meeting the standard. In mid-August 2012 the ammonia value was above the regulation limit value as a result of wireline activity at VRB wells. Prior notification to MoE has been sent before the discharge, which include proposed action plans to remedy the situation, with focus to recover and increase the amount of healthy bacteria in the biological treatment unit. After rigorous efforts from Tangguh team, since 22 September 2012 onwards, the ammonia concentration in the effluent has been back to normal and complies with the regulation limit.

Implementation of Environmental Management System – ISO14001 has been carried out by Tangguh since 2008. An enhancement program on employees’ awareness relating to environmental management through environmental day campaign was held in June 2012. Champions and Document Controls from each department are responsible to ensure ISO 14001 requirements in their respective areas are fully followed with the supervision of ISO14001 coach.

Rigorous in-house trainings were conducted to improve individual awareness, skill and competency and this will be continued on a regular basis. There were 2 batches of champions’ trainings, 3 batches of train of trainer trainings, and 3 batches of internal auditor trainings conducted in 2012. Internal audit has been implemented in June 2012, with 45 non-conformities and 23 observations findings. These non-conformities and observations are all closed by end October 2012.

On 30 – 31 May 2012, the Ministry of Environment conducted visit to Tangguh site as part of the PROPER audit program. The final Proper Ranking result has been announced on 28 November 2012 and Tangguh LNG managed to achieve BLUE Ranking.

The implementation of the environmental management and monitoring has improved over the time to comply with the requirements as stated in the Environmental

Environmental Health and Safety Report 29 Tangguh LNG Project April– October 2012

Management and Monitoring Plan (RKL/RPL). Continuous efforts will be required to ensure effective implementation of RKL and RPL to achieve the AMDAL compliance commitment.

Environmental Health and Safety Report 30 Tangguh LNG Project April– October 2012