1. Better Work Indonesia Pilot Environmental Cluster Assessment Crowne Plaza Hotel, Jakarta, 10 June 2014

2. Assessment Scope BWI Environmental Cluster Compliance Points PROPER Assessment Scope Environmental management system Environmental training Air emissions Ozone Depleting Substances Noise emissions Water conservation Water resources Soil and groundwater Wastewater Waste management (including hazardous waste) Energy Management (including GHG emissions) Compliance level (up to Blue Rating): Environmental documents and permitting Wastewater Air emissions Hazardous wastes Environmental damage control. Beyond compliance level (Green and Gold Rating), similar scope as above with the following additions: Environmental management system Hazardous wastes reduction and use Non-hazardous wastes reuse, reduce and recycle Water conservation Biodiversity conservation Community development No confusion with the BWI OHS Cluster – hazmat management is not repeated here

3. Questionnaire Example S/NCompliance PointsQuestionsGuidance Note 14Environmental Management System Has the factory conducted any internal and external EMS audit in the last one year? It is part of the requirement of the “beyond compliance” PROPER rating (i.e. Green and Gold) that the factory undertake internal and external audit of its EMS regularly and provide the result of the audit from the last one year. Green and Gold PROPER rating also recommends factory to obtain independent third party certification of the EMS. IFC also recommends the factory to use dynamic mechanisms such as internal inspections and audits, where relevant, to verify compliance and progress of the factory’s environmental performance. 37WastewaterHas the factory obtained all required permits, registrations or other regulatory approval for treating and discharging wastewater? Factories are required to obtain written permit from the head of region or mayor for any activities that discharge wastewater to water or water resources. Permit to discharge is also a requirement for obtaining PROPER Blue ranking. In line with PROPER requirement In line with IFC Performance Standard In line with Indonesian environmental law

4. Pilot Programme – Key Findings NoCompliance PointsKey Findings 1Environmental Management System No EMS established yet No HIRA for environmental hazards No regulatory update system in place No comprehensive internal EMS audit 2Environmental TrainingNo comprehensive training programme 3Air Emissions No air emission policy No monitoring and management of air pollution from factories (e.g. boiler exhaust) 4Noise EmissionsNo noise monitoring programme 5Water ConservationNo water conservation policy 6Water Resources Permitting issues No groundwater abstraction record 7Soil and GroundwaterNo activities based soil and groundwater hazard identification and assessment in place. 8Wastewater Lack of permitting No regular wastewater discharge monitoring 9Waste Management No environmental policy in waste management Selection of hazardous wastes collector companies Permitting for hazardous wastes storage

5. Comparison with Higg Index 2.0 Higg IndexPROPERBWI Environmental Cluster Assessment What is it? A sustainability self assessment tool for apparel and footwear industries to gauge environmental and social sustainability performance. Voluntary rating programme to assess performance of businesses in controlling pollution and environmental damage. Tailored to Indonesian environmental regulations. Environmental compliance assessment for garment industries to assess compliance against Indonesian environmental regulations and IFC Performance Standard. Extension to the existing BWI labour and OHS assessment clusters. Industr ial Scope Apparel and footwearEnvironmentally sensitive industries, involving export goods and listed in stock market Garment Audit or Validat ion Not required unless the companies choose to conduct additional verification on their own. PROPER technical advisory team will conduct inspection and review of the assessment Third party environmental consultant conducts site visit and assessment.

6. Comparison with Higg Index 2.0 Higg IndexPROPERBWI Environmental Cluster Assessment Assessme nt Scope Environmental Modules: EMS Energy use and greenhouse gas emission Water use Wastewater / effluent Air emissions Waste management Chemical management Social / Labour modules: Recruitment and hiring Compensation Work hours Worker involvement & communication Worker treatment Health and Safety Termination and retrenchment Environmental aspects: (Compliance Level – Blue, Red and Black): Environmental documents and permitting Wastewater Air emissions Hazardous wastes Environmental damage control Beyond compliance environmental aspects (Green and Gold Rating): EMS Energy efficiency Reduction and use of hazardous wastes Non-hazardous wastes Environmental Compliance Points: EMS Environmental Training Air Emissions Ozone Depleting Substances Noise Emissions Water Conservation Water Resources Soil and Groundwater Wastewater Waste Management (including hazardous wastes) Energy Efficiency (including GHG emissions) *Chemical management is covered under existing BWI OHS Assessment Cluster

7. Comparison with Higg Index 2.0 Higg IndexPROPERBWI Environmental Cluster Assessment External engagement, community impact and transparency & public disclosure Value chain labour and workplace performance management Water conservation Biodiversity conservation Community development Result Publication Only shared internally between factories, brand, products companies and their business partners on a one-on-one basis. No external party dissemination without permission from Sustainable Apparel Coallition. Public disclosure of the final rating. Results only shared to the factories and brands.

8. Thank You