PRESIDENTE DA REPUBLICA January 28, 2009 Mr. Rui Pinto Dili, Timor-Leste Dear Mr. Pinto, koe 7 gra lous le ke, I thank you very much for your letter, dated November 12, 2008, which outlined your concerns about the proposed ethanol and sugarcane production project. I sincerely believe that by writing to me you have set an example for other Timorese to follow suit in exercising your democratic rights to express your opinion and concerns. Additionally, your writing of the letter has as well demonstrated your taking seriously of your civic duty to participate in the interlocution over public interests. Hence, being the President of the Republic and the addressee of your letter, I assure you that I do not take your letter lightly. concerning your query regarding the proposed ethanol and sugar productions project, it is important to note that what was signed on January 15, 2008 in Jakarta between Ministry of Agriculture and Fisheries and GTLestebiotech was a Memorandumof Understanding. Hence the ethanol and sugarcane project is yet to be executed subject to a detailed project implementation mechanism. AS President of the Republic, my position on the matter is clear and remains true to the principle of balanced development. This implies that while I welcome schemes for job creations, I wish to assure you that environmental concerns shall remain an absolute priority. Probable short- term gains through job opportunities should not be at the expense of long term sustainable development. It is in this context that any perceived scheme attempting to create jobs must not compromise the concerns for a sustainable development and protection of our environment. Accordingly, I reiterate that it is not the intention of the Timorese State to advocate job opportunities by substituting public rights to arable lands, food, clean water and healthy environment. Thus, in line with the above mentioned unequivocal principle that I have advised the government, particularly Ministry of Agriculture, to seriously conduct the following: a) To carry out a study to evaluate possible detrimental , tepercussions to the ecosystem and food sources. This is, as you know, a legal requirement for a project of this scale. b) To conduct a thorough analysis on land ownership, as it remains unclear about the ownership of the lands that will be leased, and to ensure that any future compensations to the land owners be conducted justly in a manner that will not disadvantage local communities and safeguard poverty.c) To analyze economic viability of a massive scale sugarcane project. It remains unclear whether market prospects for ethanol and sugar outputs have been assessed, and whether the future production of sugar and etHanol in Timor-Leste will be sufficient to compete in the regional and international markets ‘And much to my delight, the government has pledged to further scrutinize the project proposal in order to avoid possible detrimental repercussions. Lastly, 1 would like to reaffirm my appreciation to the way through which you express your concerns, and reassure our fellow Timorese citizens that the protection of their land, environment and food remains an issue that will continue to receive my unwavering attention José Ramos-Horta esident of the Republic