The second island, refers to Flood Town and Gas Works.
If you haven't noticed, every time you’ve completed a side mission. These missions will become unlocked as you complete story missions and by completing previous side missions. Areas with a gray border are areas you’ve gained control; red areas are ones that are still under enemy influence.
You may have noticed certain parts of an island with gray and red borders with no side mission icon appearing. In order to get them to appear, defeat enemies within these areas until a yellow icon appears on a defeated soldier. These side missions will either have you finding a hidden package, or destroying a convoy.