Sustainability Report
SYNERGY for Sustainability
PT Pupuk Indonesia (Persero) Kantor Pusat | Head Office Jalan Taman Anggrek, Kemanggisan Jaya, Jakarta 11480, Indonesia Phone (hunting): +62 21 536 54900 Facsimile: +62 21 80647955 Email: [email protected] Website: http://www.pupuk-indonesia.com Layanan Informasi | For further information 0800-1-008001 (Toll Free) Sustainability Report SYNERGY for Sustainability Sustainability Report Sustainability Report
SYNERGY for Sustainability
PT Pupuk Indonesia (Persero) www.pupuk-indonesia.com
SYNERGY for Sustainability
ustainable development is the The implementation of Sustainability biggest challenge to human Principles requires a synergy in the beings today. Would we be business chain of the Company and able to meet the current needs the stakeholders. We optimize the withoutS diminishing the next generation’s resources, create productive cooperation capability to do the same for their needs? with the communities and partner with This is a fundamental question to us in the government, as well as involving growing the company based on three the stakeholders for the purpose of aspects in Sustainability Principles Profit, sustainability. People, Planet.
PT Pupuk Indonesia (Persero) Sustainability Report 1 About the Report PUPUK INDONESIA LAPORAN DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING PROFILE KEPADA PEMANGKU SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH KEPENTINGAN GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
TABEL OF CONTENTS
2 TABEL OF CONTENTS 40 DEVELOPING SUSTAINABLE GOVERNANCE
4 PERFORMANCE OVERVIEW 42 General Meeting of Shareholders
6 SIGNIFICANT EVENT 2017 42 Governance Structure
10 award and certification 43 Structure of the Board of Commissioners and Directors
44 Directors
44 Board of Commissioners
44 Anti-Corruption
14 About the Report 45 Anti-Corruption Communications and Trainings 15 GRI Standard 45 Political Contributions 16 Reporting Period and Boundaries 46 Adoption and Support for International 16 Determining Report Content Initiatives 17 Principles of Determination 46 Membership in Indus trial Associations and of The Content of The Report Other Organizations
17 List of Material Topics and Boundary 46 Stakeholder Involvement
18 Materiality Level 47 Implementation of Sustainable Conception 19 Independent Assurance Suppliers
50 DEVELOPING STAKEHOLDERS’ economies 20 PUPUK INDONESIA PROFILE 52 Revenues
22 Company Profile 53 Profitability
24 Milestone 53 Consumers
26 List of Subsidiaries and Operational Area 53 Production
28 Scale of Organization 54 Employee Awards
29 Vision, Mission and Values 54 Contribution to the Government Income
55 Contributions to the Public
56 Investment in Infrastructure and Services
54 Contributions to Local Suppliers
32 REPORT TO STAKEHOLDER 54 Production use in Country
35 Report of The Board of Commissioners 56 Financial Assistance from the Government
37 Report of Board of Directors 59 Challenges from Climate Change and Loss of Land 60 Corporate Synergies
2 PT Pupuk Indonesia (Persero) Sustainability Report About the Report PUPUK INDONESIA LAPORAN DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING PROFILE KEPADA PEMANGKU SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH KEPENTINGAN GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
64 DEVELOPING COMPETENT HUMAN 98 DEVELOPING EXCELLENT RESOURCES OF PUPUK INDONESIA ENVIRONMENTAL PERFORMANCE
65 Employee Demography 102 Optimization of Production Resources
66 Employee by Employment Status 102 Challenges Ahead
68 Recruitment 105 Energy Consumption
69 Employee by Age Group 108 Management of Water Utilization
70 Permanent Employees By Education Level 109 Standards and Methodologies
72 Freedom to Unionize 110 Water Recycling
72 Skills Development 110 Maintaining Biodiversity
74 Workplace Equality, Diversity, and 111 Emission Control
Opportunity 116 Waste Management 76 Employee Benefit 123 Policy Supervision 77 Retirement Preparations 123 Environmental Related Complaints
124 Environmental Investment 2017
124 Compliance with Environmental Regulation
78 DEVELOPING COMMUNITY WELFARE
80 Social Responsibility Program of Pupuk Indonesia 126 DEVELOPING Top-Notch PRODUCTS 82 Partnership Program 127 Prioritizing Customer Health and Safety 84 Community Development Program 129 Responsibility of Product Information and 88 Testimony of Pkbl Pupuk Indonesia Communication Beneficiaries 130 Product Packaging Information 90 Awards 134 Commitment to Complying with Regulations
136 ASSURANCE STATEMENT 138 Statement GRI Standards Core in 92 Attaining A Healthy Work Accordance Check Atmosphere 139 Index standard gri 93 Occupational Health and Safety 146 sdg’s link in gri standard 94 Safe Working Hours
97 OHS Targets
97 Employee Representation in Ohs Issue
98 Contractors and Occupational Safety
98 Ohs Training and Meetings
98 Healthcare for Employees
PT Pupuk Indonesia (Persero) Sustainability Report 3 About the Report PUPUK INDONESIA LAPORAN DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING PROFILE KEPADA PEMANGKU SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH KEPENTINGAN GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
PERFORMANCE OVERVIEW 2017
ECONOMIC PERFORMANCE
2015 2016 2017 Consolidated Revenue
Rp66.23 trillion Rp64.16 trillion Rp58.94 trillion
Profit for The Year
Rp trillion Rp3.39 trillion Rp3.53 trillion 3.08
Contribution to the State (Tax)
Rp4.61 trillion Rp5.50 trillion Rp4.94 trillion
PSO Fertilizer Sales
8,881 ribu ton 9,181 thousand ton 9,298 thousand ton
Non-PSO Fertilizer Sales
2,882 thousand ton 2,913 thousand ton 3,207thousand ton
Gas Consumption Ratio
Natural Gas Consumption Ratio
The factory revitalization program, 37.43 37.46 36.10 30.20 29.86 28.69 which is aimed to boost efficiency and competitive power amid the plummeting prices of ammonia and urea, has brought success for the Company in reducing urea gas consumption rate: at 2.5% (CAGR mbtu/ton 2015-2017) and 1.79% (CAGR 2015-2017) respectively.
2015 2016 2017 2015 2016 2017
4 PT Pupuk Indonesia (Persero) Sustainability Report About the Report PUPUK INDONESIA LAPORAN DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING PROFILE KEPADA PEMANGKU SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH KEPENTINGAN GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
ENVIRONMENT PERFORMANCE
Pupuk Indonesia gained Proper “Gold” award for the first time in 2017 through its subsidiary, PT Pupuk Kalimantan Timur, who has successfully demonstrated excellence in sustainable environmental management. Meanwhile, the other subsidiaries managed to maintain the Proper “Green” awards.
PROPER PROPER PROPER GOLD BLUE “GREEN” PT Pupuk PT Pupuk Pt Pupuk Sriwidjaja Palembang Kalimantan Iskandar Muda Pt Pupuk Kujang Cikampek Timur Pt Petrokimia Gresik
SOCIAL PERFORMANCE
Rp184.12 billion Rp66.58 billion Realization of Partnership Realization of CSR Financing and Community 2017. Development Program Financing 2017.
OCCUPATIONAL HEALTH PERFORMANCE
Corporate Safe Working Hours
5,460,859 4,923,428 6,774,477 safe working hours safe working hours safe working hours PT Petrokimia Gresik PT Pupuk Kujang Cikampek PT Pupuk Kalimantan Timur
3,569,493 6,319,427 safe working hours safe working hours PT Pupuk Iskandar Muda PT Pupuk Sriwijaya Palembang
PT Pupuk Indonesia (Persero) Sustainability Report 5 About the Report PUPUK INDONESIA LAPORAN DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING PROFILE KEPADA PEMANGKU SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH KEPENTINGAN GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
SIGNIFICANT EVENTS 2017
4 January 2017 General Meeting of Shareholders (GMS) to discuss the 2017 Budget & Business Plan, held in Jakarta.
9 March 2017 On March 9, 2017, Pupuk Indonesia Group held Coordination Meeting in Bogor to discuss Corporate Performance In 2016 and its plans for 2017.
26 April 2017 Inauguration of the Pusri IIB urea and ammonia plant on April 26, 2017. The plant is able to produce 907,500 tons of urea and 660,000 tons of ammonia per year.
6 PT Pupuk Indonesia (Persero) Sustainability Report About the Report PUPUK INDONESIA LAPORAN DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING PROFILE KEPADA PEMANGKU SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH KEPENTINGAN GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
12 June 2017 Pupuk Indonesia issued the Shelf Registration Bond I (PUB I) Tranche I 2017 valued at Rp3.57 trillion on June 12, 2017. The unsecured securities are rated AAA by FitchRatings.
15 May 2017 Pupuk Indonesia held the General Meeting of Shareholders for FY 2016 on May 15, 2017 in Jakarta.
19 June 2017 Pupuk Indonesia took part in the Mudik Bersama BUMN organized by the Ministry of State-owned 26 Mey 2017 Enterprises on June 19, 2017. Pupuk Indonesia and the National Audit and Development Supervisory Body (BPKP) signed a Memorandum of Understanding on Development, Implementation, and Strengthening Good Corporate Governance in PT Pupuk Indonesia on May 26, 2017.
PT Pupuk Indonesia (Persero) Sustainability Report 7 About the Report PUPUK INDONESIA LAPORAN DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING PROFILE KEPADA PEMANGKU SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH KEPENTINGAN GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
15 May At the summit of the “BUMN Hadir Untuk Negeri” (SOE for the Nation) event, Pupuk Indonesia along with SOEs namely PT Kawasan Berikat Nusantara (Persero), PT Sarinah (Persero), PT Jakarta Industrial Estate Pulogadung (Persero), and PT Perusahaan Pengelola Aset (Persero) gave a community assistance through the “Bedah Rumah Veteran” (Veteran House Renovation) and “Siswa Mengenal Nusantara” programs.
14 September 2017 Pupuk Indonesia held the Extraordinary General Meeting of Shareholders (RUPS-LB) on September 14, 2017 in Jakarta. The General Meeting appointed former President Director of PT Inalum (Persero) Winardi as Director of Human Resources and Governance of PT Pupuk Indonesia (Persero). The former incumbent of the post, Achmad Tossin Sutawikara, was appointed as Director of Marketing in the same occasion.
8 PT Pupuk Indonesia (Persero) Sustainability Report About the Report PUPUK INDONESIA LAPORAN DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING PROFILE KEPADA PEMANGKU SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH KEPENTINGAN GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
14 September 2017 Pupuk Indonesia issued the Shelf Registration Bond I (PUB I) Tranche II 2017 valued at Rp4.38 trillion on November 9, 2017. The unsecured securities are rated AAA by FitchRatings.
8 Desember 2017 On December 8, 2017, Pupuk Indonesia, PT Bukit Asam (Persero), PT Pertamina (Persero), and PT Chandra Asri Petrochemical signed the Head of Agreement on Cooperation in Gasification of Coal to Syngas for Raw Material of Urea, Polypropylene, and Dimethyl Ether Products
PT Pupuk Indonesia (Persero) Sustainability Report 9 About the Report PUPUK INDONESIA LAPORAN DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING PROFILE KEPADA PEMANGKU SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH KEPENTINGAN GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
AWARD AND CERTIFICATION
AWARD
1 SOLO, 24 FEBRUARY 2 JAKARTA, 22 MARCH 3a BALI, 24 MARCH Best Sustainability Report 2016 – Indonesia Corporate Secretary Public Relation Indonesia Awards Category Manufacture Communication Award II-2017 – 1ST 2017 – Gold Winner Category of Video Place – Category of SOE Profile– Subcategory of SOE
3b BALI, 24 MARET 4 JAKARTA, 5 APRIL 5 JAKARTA, 31 OcTOBER Public Relation Indonesia Awards Top CSR Award 2017 TOP IT & TOP TELCO Award 2017 2017 – Silver Winner Category of Website – Subcategory of SOE
10 PT Pupuk Indonesia (Persero) Sustainability Report About the Report PUPUK INDONESIA LAPORAN DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING PROFILE KEPADA PEMANGKU SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH KEPENTINGAN GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
6 JAKARTA, 6 NOVEMBER 7 JAKARTA, 12 DECEMBER 8 JAKARTA, 21 DECEMBER BUMN Performance Excellent Award LHKPN Award – Institution with The Best CFO 2017 (D4) Best E-LHKPN Implementation Year 2017(D1)
9 7 December 2017 Runner Up Asean Risk Awards 2017 – Category of Asean GRC Awards
PT Pupuk Indonesia (Persero) Sustainability Report 11 About the Report PUPUK INDONESIA LAPORAN DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING PROFILE KEPADA PEMANGKU SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH KEPENTINGAN GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
CERTIFICATION
Company Name of Certification Validity Issued By Pupuk Iskandar ISO 9001 – 2008 Quality 4 June 2018 Sucofindo ICS Muda Management System ISO 14001- 2004 Environment 4 June 2018 Sucofindo ICS Management System Pusri ISO 9001 – 2008 Quality 10 April 2018 SGS Management System ISO 14001 – 2004 Environment 28 Maret 2018 SGS Management System ISO 7025 28 Juli 2019 Komite Akreditasi Nasional
General requirements for the competence of testing and calibration laboratories Pupuk Kujang ISO 9001 – 2015 Quality 4 Januari 2019 Sucofindo ICS Management System ISO 14001 – 2015 Environment 4 Januari 2019 Sucofindo ICS Management System ISO 17025:2008 General 22 Juli 2018 Komite Akreditasi Nasional requirements for the competence of testing and calibration laboratories Petrokimia Gresik ISO 9001 - 2008 Quality 23 April 2018 Sucofindo ICS Management System ISO 14001 – 2004 Environment 23 April 2018 Sucofindo ICS Management System ISO 17025 General requirements 17 November 2019 Komite Akreditasi Nasional for the competence of testing and calibration laboratories Pupuk Kaltim ISO 9001 - 2015 Quality 25 Mei 2019 TUV Rheinland Management System ISO 14001 – 2015 Environment 25 Mei 2019 TUV Rheinland Management System ISO 17025:2008 General 19 September 2021 Komite Akreditasi Nasional requirements for the competence of testing and calibration laboratories Certificate of Environment 19 September 2024 Kementerian Lingkungan Hidup Laboratory Competence Registration Rekind OSHAS 18001: 2007 29 November 2019 DNV ISO 9001: 2015 20 Desember2019 DNV ISO 14001 : 2015 Environmental 31 Juli 2019 DNV Management System
12 PT Pupuk Indonesia (Persero) Sustainability Report About the Report PUPUK INDONESIA LAPORAN DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING PROFILE KEPADA PEMANGKU SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH KEPENTINGAN GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
PT Pupuk Indonesia (Persero) Sustainability Report 13 About PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING the Report PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
About the Report
14 PT Pupuk Indonesia (Persero) Sustainability Report 2017 About PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING the Report PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
• Reporting Period and Boundaries • List of Material Topics and Boundary • Determining Report Content • Materiality Level • Principles of Determination of The • Independent Assurance Content of The Report
Pupuk Indonesia presents this sustainability report as a realization of our responsibility to the stakeholders. This report elucidates Pupuk Indonesia’s and Subsidiaries’ activities throughout 2017. It is compiled based on transparency and accountability in order to meet sustainability goals.
Welcome to the 2017 Sustainability Report of PT Pupuk GRI Standards Indonesia (Persero), (hereafter referred to as “Pupuk This report has been prepared in accordance with GRI Indonesia “ or “We” or “the Company”). Standards: Core Options. [GRI 102-54]
This report is our communication media to stakeholders; To assist the readers in finding the GRI disclosures it contains Pupuk Indonesia’s performance in that are applied in this report, we the specific numbers sustainability sector comprising three aspects -- of the relevant GRI disclosures have been provided on economic, environmental, and social. Through this the content pages with red font and in brackets. The report, our stakeholders can know further about Pupuk complete of the GRI Standards disclosures is presented Indonesia’s contribution to the realization of Sustainable on page 139. [GRI 102-55] Development Goals (Sustainable Development Goals/ SDGs).
Pupuk Indonesia publishes a sustainability report annually since 2013. Sustainability Report of 2016 was published in July 2017. [GRI, 102-51 GRI 102-52]
PT Pupuk Indonesia (Persero) Sustainability Report 2017 15 About PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING the Report PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
REPORTING PERIOD AND took place at Mega Anggrek Hotel, Arjuna Selatan no BOUNDARIES 4A Tanjung Duren Selatan, Jakarta Barat on 15 Jakarta March 2018. This report concerns the activities of the Head offices and 10 subsidiaries for the period from 1 January to 31 Second Step; Priority, namely determining the priority of December 2017. [GRI 102-50, GRI 102-45] sustainability topics or issues identified in the previous step in order to the know the materiality level of these There has not been any fundamental change in the important issues that will be reported. This process is organization or the supply chain in 2017. Neither has performed using the same worksheet as in the first step there significant change in the scope nor the boundary by posing the questions regarding the impacts and the of report compared to the previous year. As a result, how aspect impact the stakeholders and the company. there is no restatement of last year’s information. Then the important topics are grouped into several [GRI 102-48, GRI 102-49, GRI 102-10] issues and then a survey is carried out to determine the level of materiality through sending questionnaires to DETERMINING REPORT CONTENT stakeholders including internal party of the company. This process is carried out based on the principles of [GRI 102-46] materiality and stakeholder inclusiveness. We determine the content of this report in four steps as follows. The survey results are presented in the graphic on page 19. First Step; Identification, namely identifying the material topics in the context of sustainability. In Third Step; Validation, namely validating the material addition, the location or boundary of the aspect must topics based on the principles of completeness and also be identified. stakeholder inclusiveness. Through this process we can also identify the specific disclosures topics of GRI This identification process is carried out in Focus Standards to be reported, as well as the Management Group Discussion (FGD) where the Pupuk Indonesia Approach (see page 139). Sustainability Report team was present. The FGD is then followed up by representatives of stakeholder groups Fourth Step; Review, namely considering the feedback and result of review on the previous report so as to In the forum, went on materiality test into all the ameliorate this report (see Flowchart of Report Content important topics as per the GRI Standards, where all the Determination Process). attending participants fill the worksheet to determine the material topics along with the boundary. The FGD
“This report is our communication media to stakeholders; it contains Pupuk Indonesia’s performance in sustainability sector comprising three aspects economic, environmental, and social.
16 PT Pupuk Indonesia (Persero) Sustainability Report 2017 About PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING the Report PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
Flowchart of Report Content Determination Process
step 1 step 2 step 3 Identification Prioritization Validation
Sustainability Context Materiality Completeness
Stakeholder Inclusiveness
step 4 REVIEW
Stakeholder Sustainability Context Inclusiveness
Principles of DETERMINATION 3. Sustainability Context; this principle requires that the of the CONTENT of the REPORT report contains issues in the context of sustainability that are relevant to the Pupuk Indonesia. [GRI 102-46] 4. Completeness; this principle requires that the report In accordance with GRI Standards, we apply 4 (four) key be made with a clear scope for a particular reporting principles in determining the report content: period and is supported by comprehensive data for 1. Stakeholders Inclusiveness; this principle requires the the scope and period of such reporting. stakeholders being involved in the report compilation process, starting from determining the report content to giving input/feedback on the published report. LIST OF MATERIAL TOPICS AND 2. Materiality; this principle requires that the report BOUNDARY contain the issues or topics that are important or The process of determining the content of the report as material, that are necessary to stakeholders in making discussed above results in the important topics, boundary decisions. and disclosure of GRI Standards as follows:
PT Pupuk Indonesia (Persero) Sustainability Report 2017 17 About PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING the Report PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
List of Material Topics and Boundary Material Topic Why Material GRI Standar Boundary [GRI 102-47] [GRI 103-1] Number GRI Standards Within Pupuk Indonesia Outside Disclosure Pupuk PI PKG PKC PKT PIM PSP REKIND ME PILOG PIE PIP Indonesia
Economic
Economic Performance Poses significant affects 201-1, 201-2, √ towards stakeholders 201-4
Indirect Economic Poses significant affects 203-1, 203-2 √ √ √ √ √ √ √ √ √ √ √ Impacts towards stakeholders
Procurement Practice Poses significant affects 204-1 √ √ √ √ √ √ √ √ √ √ √ towards economic growth
Anti-Corruption Poses significant affects 205-1, 205-2 √ √ √ √ √ √ √ √ √ √ √ towards development
Environmental
Material Poses significant affects 301-1 √ √ √ √ √ towards sustainability
Energy Poses significant affects 302-1, 302-3, √ √ √ √ √ √ √ towards 302-4 sustainability
Water Poses significant affects 303-1, 303-3 √ √ √ √ √ towards sustainability
Emissions Poses significant affects 305-1, 305-2, √ √ √ √ √ √ towards 305-4, 305-5, sustainability 305-7
Effluents and Waste Poses significant affects 306-1, 306-2, √ √ √ √ √ towards 306-4 sustainability
Environmental Poses significant affects 307-1 √ √ √ √ √ √ Compliance towards sustainability
Social
Employment Compliance towards law 401-1, 401-2 √ √ √ √ √ √ √ √ √ √ √ and regulations
Occupational Health Poses significant affects 403-1, 403-2, √ √ √ √ √ √ √ √ √ √ √ and Safety towards employees 403-3, 403-4
Training and Poses significant affects 404-1, 404-2, √ √ √ √ √ √ √ √ √ √ √ Education towards employees 404-3
Diversity and Equal Poses significant affects 405-1, 405-2 √ √ √ √ √ √ √ √ √ √ √ Opportunity towards employees and local communities
Local Communities Poses significant affects 413-1 √ √ √ √ √ √ √ √ √ √ √ towards stakeholders
Public Policy Poses significant affects 415-1 √ √ √ √ √ √ √ √ √ √ √ √ towards communities
Customers Health and Poses significant affects 416-2 √ √ √ √ √ √ √ √ √ √ √ Safety towards consumers
Marketing and Poses significant affects 417-2, 417-3 √ √ √ √ √ √ √ √ √ √ √ Labeling towards consumers
Socio Economic Poses significant affects 419-1 √ √ √ √ √ √ √ √ √ √ √ √ Compliance towards economic growth
MATERIALITY LEVEL Below is an overview of materiality level of the topics contained in this report. Materiality level is concluded in the workshop and the Focus Group Discussion (FGD) with the stakeholders.
18 PT Pupuk Indonesia (Persero) Sustainability Report 2017 About PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING the Report PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
The Level of Materiality Topics Economic Performance High Employee Welfare Energy Efficiency and Conservation
Occupational Health and Safety Solid and Toxic Waste
Water Usage Anti-Corruption and Bribery
Greenhouse Gas Emissions Respect for Human Rights Product Responsibility Medium Procurement /Purchasing Infrastructure Development for Communities
Outsourcing
Donation for the Community Biodiversity Low Stakeholder Low Medium High
Company
Independent Assurance [GRI 102-56] We hereby state that we do not have any other professional ties with Moores Rowland Indonesia aside from the We have assigned Moores Rowland Indonesia, aforementioned assurance service. Independent Assurer, to conduct limited assurance into this report. The appointment the assurer was preceded To ensure that this report has been prepared in accordance by assurance provider selection and has been approved with the GRI Standards, we have requested the National by the Board of Directors, represented by the corporate Center for Sustainability Reporting (NCSR) to provide secretary. Considerations in determining the assurer are GRI Standards In Accordance Check. The NCSR’s Report professional experience and capability of assurer. The is presented on page 138. independent assurer’s report is presented on page 136.
For the purpose of improving the quality of future reports, we hope that the readers would provide input, idea and criticism about this Sustainability Report to:
[GRI 102-53]
PT Pupuk Indonesia (Persero) Facsimile: +62 21 548 2455, 548 0607 Head Office Email: [email protected] Jalan Taman Anggrek, Kemanggisan Jaya, Website: http://www.pupuk-indonesia.com Jakarta 11480, Indonesia Layanan Informasi | For further information Phone (hunting): +62 21 536 54900 0800-1-008001 (Toll Free)
PT Pupuk Indonesia (Persero) Sustainability Report 2017 19 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
PROFILE OF PUPUK INDONESIA
20 PT Pupuk Indonesia (Persero) Sustainability Report 2017 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
• Company Profile • Scale of Organization • Milestone • Vision, Mission and Values • List of Subsidiaries and Operational Area
Pupuk Indonesia Group is the largest fertilizer producer in Southeast Asia and operates throughout Indonesia. Our commitment is to the support of Indonesia’s food security for the prosperity of the nation.
PT Pupuk Indonesia (Persero) Sustainability Report 2017 21 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
COMPANY PROFILE
COMPANY NAME [GRI 102-1] HEAD OFFICE [GRI 102-3] Perusahaan Perseroan Jl. Taman Anggrek, Kemanggisan Jaya Jakarta 11480, Indonesia PT Pupuk Indonesia (Persero) founded Telephone: +62 21 53654900 on January 3, 1970. Facsimile: +62 21 80647955 Email: [email protected] Website: www.pupuk-indonesia.com @pupuk_indonesia Pupuk Indonesia @pt.pupukindonesia
LEGAL FORM AND OWNERSHIP OPERATIONAL LOCATION [GRI 102-4, GRI 102-6] [GRI 102-5] PT Pupuk Indonesia (Persero) operates in Indonesia. Legal form: State-Owned Enterprise in the form of Plant Location: Gresik (East Java), Cikampek (West Limited Liability Company (PT) Java), Bontang (East Kalimantan), Lhokseumawe
Articles of Association: (Nanggroe Aceh Darussalam), Palembang (South Deed No. 4 dated 3 January 1970, drawn before Sumatra). Marketing location: Throughout Indonesia Soeleman Adjasasmita, Notary in Jakarta, as amended a number of times with the latest one amended based on Deed No. 14 dated 26 April 2013 drawn before Nanda Fauz Iwan, SH, Notary in South Jakarta.
Ownership 100% Government of Indonesia
22 PT Pupuk Indonesia (Persero) Sustainability Report 2017 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
BUSINESS LINE & PRODUCTS [GRI 102-2] Implement corporate management services, trading and services in fertilizer, petrochemicals, agrochemicals, and other chemicals, agro industries and other services. The products offered include: • Fertilizers, including Urea, NPK, SP-36, ZA, ZK, and Organic. • By-products, including cement retarder, aluminum fluoride, gypsum, liquid CO2, and hydrochloric acid. • Basic chemicals, including ammonia, sulphuric acid, and phosphoric acid. • Innovative products such as bio-fertilizer, seeds, decomposers, pesticides, etc.
1 Subsidized Urea 2 Subsidized NPK Phonska
3 Subsidized SP-36 4 Subsidized ZA 5 Subsidized Organic
PT Pupuk Indonesia (Persero) Sustainability Report 2017 23 Ikhtisar 2017 Laporan Kepada Pemangku Kepentingan Profil Perusahaan Sumber Daya Manusia ABOUT 2017 Highlights PUPUK INDONESIA Report to StakeholdersREPORT TO CompanyDEVELOPING Profile DEVELOPINGHuman Resources DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE Jejak Langkah Perusahaan Corporate Milestones milestone
1979-1980 2010 For the purpose of cooperation with PT Pupuk Sriwidjaja (Persero) was ASEAN countries, the following joint transformed into Strategic and ventures have been established: Investment Holding and • PT Asean Aceh Fertilizer (AAF), PT Pupuk Sriwidjaja Palembang was where Pupuk Indonesia owns established based on Deed No. 56 60% shares. dated 24 December 2010. • Asean Bintulu1997-1998 Fertilizer (ABF), 2010 where PupukDiterbitkan Indonesia PP No.28 owns Tahun 1997 dan PP No PT Pupuk Sriwidjaja (Persero) 34 Tahun 1998, PT Pupuk Sriwidjaja (Persero) berubah menjadi Strategic and 13% shares.menjadi Perusahaan Induk (Operating Holding) Investment Holding dan didirikan yang membawahi 5 (lima) perusahaan (PT Pupuk PT Pupuk Sriwidjaja Palembang Kalimantan Timur, PT Petrokimia Gresik, PT Pupuk berdasarkan Akta No. 56 tanggal Kujang, PT Pupuk Iskandar Muda, PT Mega Eltra) 24 Desember 2010 Diterbitkan PP No.28 Tahun 1997 dan PP No PT Pupuk Sriwidjaja (Persero) 34 Tahun 1998, PT Pupuk Sriwidjaja (Persero) berubah menjadi Strategic and menjadi Perusahaan Induk (Operating Holding) Investment Holding dan didirikan yang membawahi 5 (lima) perusahaan (PT Pupuk PT Pupuk Sriwidjaja Palembang Kalimantan Timur, PT Petrokimia Gresik, PT Pupuk berdasarkan Akta No. 56 tanggal Kujang, PT Pupuk Iskandar Muda, PT Mega Eltra) 24 Desember 2010
1959 PT Pupuk Sriwidjaja 1959was established based PT Pupuk Sriwidjaja didirikan berdasarkanon Deed Akta No. No. 177 177 dated tanggal24 December 24 Desember 1959. 1959 PT Pupuk Sriwidjaja didirikan berdasarkan Akta No. 177 tanggal 24 Desember 1959
1979-1980 2012 Dalam rangka kerjasama dengan negara-negara PT Pupuk Sriwidjaja (Persero) ASEAN dibentuk perusahaan patungan: berganti nama menjadi PT Pupuk 1997-1998 2012 Indonesia (Persero) berdasarkan y PT Asean Aceh Fertilizer (AAF), Pupuk Akta No. 3 tanggal 3 April 2012 The issuance ofIndonesia Government menguasai 60% saham PT Pupuk Sriwidjaja (Persero) PT Pupuk Sriwidjaja (Persero) Regulation y(PP) Asean Number Bintulu 28 Fertilizer of (ABF) Sdn.Bhd., Pupuk changed its name to berganti nama menjadi PT Pupuk Indonesia menguasai 13% saham 1997 and PP Number 34 of 1998 PT Pupuk IndonesiaIndonesia (Persero)(Persero) berdasarkan transformed PT Pupuk Sriwidjaja based on DeedAkta No. No. 3 tanggaldated 33 April 2012 (Persero) intoDalam the rangka Operating kerjasama dengan negara-negara April 2012. Holding whichASEAN oversees dibentuk five perusahaan patungan: companies y(PT PT Pupuk Asean AcehKalimantan Fertilizer (AAF), Pupuk Indonesia menguasai 60% saham Timur, PT Petrokimia Gresik, PT y Asean Bintulu Fertilizer (ABF) Sdn.Bhd., Pupuk Pupuk Kujang,Indonesia PT Pupuk menguasai Iskandar 13% saham Muda and PT Mega Eltra).
24 PT Pupuk20 Indonesia (Persero) Sustainability Report 2017 Laporan Tahunan 2017 PT Pupuk Indonesia (Persero) Ikhtisar 2017 Laporan Kepada Pemangku Kepentingan Profil Perusahaan Sumber Daya Manusia Analisa & Pembahasan Manajemen Tata Kelola Perusahaan Tanggung Jawab Sosial Perusahaan Laporan Keuangan Audit ABOUT 2017 Highlights PUPUK INDONESIA Report to StakeholdersREPORT TO CompanyDEVELOPING Profile DEVELOPINGHuman Resources Management DiscussionDEVELOPING & Analysis DEVELOPINGGood Corporate Governance AttainingCorporate a Social ResponsibilityDEVELOPING Audited FinancialDEVELOPING Statement THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE Jejak Langkah Perusahaan Jejak Langkah Perusahaan Corporate Milestones Corporate Milestones
2013 2015 On 23 December 2013, 1. On 30 April 2015, PT Pupuk PT Pupuk Indonesia Indonesia (Persero) established (Persero) established a a subsidiary, PT Pupuk subsidiary, PT Pupuk Indonesia Pangan. Indonesia Logistik. 2. Revitalization of Plant PKT 5 3. Construction of Plant NPK of PT 1997-1998 2010 2013 2015 Pupuk Kujang Diterbitkan PP No.28 Tahun 1997 dan PP No PT Pupuk Sriwidjaja (Persero) Pada tanggal 23 Desember 2013, 1. Pada tanggal 30 April 2015, PT Pupuk Indonesia 34 Tahun 1998, PT Pupuk Sriwidjaja (Persero) berubah menjadi Strategic and PT Pupuk Indonesia (Persero) (Persero) mendirikan anak perusahaan bernama menjadi Perusahaan Induk (Operating Holding) Investment Holding dan didirikan mendirikan anak perusahaan PT Pupuk Indonesia Pangan yang membawahi 5 (lima) perusahaan (PT Pupuk PT Pupuk Sriwidjaja Palembang bernama PT Pupuk Indonesia 2. Revitalisasi Pabrik PKT 5 Kalimantan Timur, PT Petrokimia Gresik, PT Pupuk berdasarkan Akta No. 56 tanggal Logistik. Kujang, PT Pupuk Iskandar Muda, PT Mega Eltra) 24 Desember 2010 3. Pembangunan Pabrik NPK II PT Pupuk Kujang Pada tanggal 23 Desember 2013, Diterbitkan PP No.28 Tahun 1997 dan PP No PT Pupuk Sriwidjaja (Persero) PT Pupuk Indonesia (Persero) 34 Tahun 1998, PT Pupuk Sriwidjaja (Persero) berubah menjadi Strategic and mendirikan anak perusahaan 1. Pada tanggal 30 April 2015, PT Pupuk Indonesia menjadi Perusahaan Induk (Operating Holding) Investment Holding dan didirikan bernama PT Pupuk Indonesia (Persero) mendirikan anak perusahaan bernama yang membawahi 5 (lima) perusahaan (PT Pupuk PT Pupuk Sriwidjaja Palembang Logistik. PT Pupuk Indonesia Pangan Kalimantan Timur, PT Petrokimia Gresik, PT Pupuk berdasarkan Akta No. 56 tanggal Kujang, PT Pupuk Iskandar Muda, PT Mega Eltra) 24 Desember 2010 2. Revitalisasi Pabrik PKT 5 3. Pembangunan Pabrik NPK II PT Pupuk Kujang
2017 20171. Revitalisasi Pabrik Pusri 2B 1959 1. 2.Revitalization Mulainya Pembangunan of Plant Pusri 2B Pabrik NPK Fusion II dalam PT Pupuk Sriwidjaja didirikan 2. The commencement of Plant rangka program pencanangan berdasarkan Akta No. 177 NPKproyek Fusion NPK 2,4 IIJuta construction, TPY tanggal 24 Desember 1959 part of the declared “NPK of 2.4 PT Pupuk Sriwidjaja didirikan berdasarkan Akta No. 177 1.Million Revitalisasi Tons Pabrik a Year” Pusri program. 2B tanggal 24 Desember 1959 2. Mulainya Pembangunan Pabrik NPK Fusion II dalam rangka program pencanangan proyek NPK 2,4 Juta TPY
1979-1980 2012 2014 2016 Dalam rangka kerjasama dengan negara-negara PT Pupuk Sriwidjaja (Persero) Pada2014 tanggal 18 Agustus 2014, Pembangunan2016 Pabrik NPK Fusion I PT Pupuk ASEAN dibentuk perusahaan patungan: berganti nama menjadi PT Pupuk PT Pupuk Indonesia (Persero) Sriwidjaja Palembang Indonesia (Persero) berdasarkan mendirikanOn 18 August anak perusahaan 2014, Construction of Plant y PT Asean Aceh Fertilizer (AAF), Pupuk Pembangunan Pabrik NPK Fusion I PT Pupuk Akta No. 3 tanggal 3 April 2012 bernama PT Pupuk Indonesia Indonesia menguasai 60% saham PT Pupuk Indonesia Sriwidjaja PalembangNPK Fusion I of PT Pupuk Energi. PT Pupuk Sriwidjaja (Persero) (Persero) established a Sriwidjaja Palembang. y Asean Bintulu Fertilizer (ABF) Sdn.Bhd., Pupuk berganti nama menjadi PT Pupuk Pada tanggal 18 Agustus 2014, Indonesia menguasai 13% saham subsidiary, PT Pupuk Indonesia (Persero) berdasarkan PT Pupuk Indonesia (Persero) Akta No. 3 tanggal 3 April 2012 mendirikanIndonesia anak Energi. perusahaan bernama PT Pupuk Indonesia Dalam rangka kerjasama dengan negara-negara Energi. ASEAN dibentuk perusahaan patungan: y PT Asean Aceh Fertilizer (AAF), Pupuk Indonesia menguasai 60% saham y Asean Bintulu Fertilizer (ABF) Sdn.Bhd., Pupuk Indonesia menguasai 13% saham
20 Laporan Tahunan 2017 PT Pupuk Indonesia (Persero) PT Pupuk Indonesia (Persero) 2017 Annual Report PT Pupuk Indonesia (Persero) Sustainability Report21 2017 25 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
LIST OF SUBSIDIARIES AND OPERATIONAL AREA
PT PUPUK ISKANDAR MUDA PT PUPUK SRIWIDJAJA PALEMBANG Lhokseumawe PALEMBANG Jalan Raya Medan - Banda Aceh, Krueng Geukeuh, Jalan Mayor Zen, Palembang 30118 Lhokseumawe 24310 Nanggroe Aceh Darussalam Phone : (62-711) 712111, 712222 Phone : (62-645) 56222 Fax : (62-711) 712100, 712020 Fax : (62-645) 56096 E-mail : [email protected]/[email protected] E-mail : [email protected] Website : http://www.pusri.co.id Website : http://www.pim.co.id 4(four) Urea Prill Plants – 2,617,500 tons 1 (one) Urea Prill Plant – 570,000 tons 1 (one)NPK Fusion Plant – 100,000 tons 1 (one) Urea Granule Plant – 57,000 tons
PT PUPUK KUJANG Cikampek Jalan Jenderal A. Yani No. 39 Cikampek, Karawang 41373, Jawa Barat Phone : (62-264) 314336-340, 313451-452, 316123, 316141 Fax : (62-264) 314235, 314335, E-mail : [email protected] Website : http://www.pupuk-kujang.co.id
2 (two) Urea Prill Plants – 1,140,000 tons 1 (one) NPK Blending Plant – 100,000 tons 1 (one) NPK Fusion Plant – 200,000 tons.
PT REKAYASA INDUSTRI PT MEGA ELTRA PT PUPUK INDONESIA LOGISTIK JAKARTA JAKARTA JAKARTA Jalan KalibataTimur I No. 36 Jalan Menteng Raya No. 27 Gedung Pusri 101, lantai 2 & 3 Kalibata, Jakarta Selatan 12740 Jakarta Pusat 10340 Jl. Letjend S. Parman Kav. 101 Phone : (62-21) 7988700, 7988707 Phone : (62-21) 3909018 (Hunting), 3909437 Jakarta Barat 11440 Fax : (62-21) 7988701, 7988702 Fax : (62-21) 3909326, 3102937 Phone : (62-21) 2263 1881 - 83 E-mail : [email protected] E-mail : [email protected] Fax : (62-21) 2256 1904 Website : http://www.rekayasa.co.id Website : http://www.megaeltra.com E-mail : [email protected] Website : www.pi-logistik.com
26 PT Pupuk Indonesia (Persero) Sustainability Report 2017 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
PT PUPUK KALIMANTAN TIMUR BONTANG Jalan James Simandjuntak No. 1 Bontang 75313, Kalimantan Timur Phone : (62-548) 41204, 41202, 41203, Fax : (62-548) 41616, 41626 E-mail : [email protected], Website : http://www.pupukkaltim.com 2 (two) Urea Prill Plants - 1,140,000 3 (three) Urea Granule Plants - 2,290,000 tons 1 (one) NPK Blending Plants 150,000 1 (one) NPK Fusion Plant – 200,000 tons
PT PETROKIMIA GRESIK GRESIK Jalan Jend. A. Yani, Gresik 61119, JawaTimur Phone : (62-31) 3981811, 3981814, 3982100, 3982200 Fax : (62-31) 3981722, 3892272 E-mail : [email protected] Website : http://www.petrokimia-gresik.com PT PUPUK INDONESIA ENERGI PT PUPUK INDONESIA PANGAN 1 (one)Urea Prill Plant – 460,000 tons JAKARTA JAKARTA 3 (three)ZA Plants – 750,000 tons Gedung Petrokimia Gresik Gedung Petrokimia Gresik 1 (one) SP-36 Plant – 500,000 tons Jl. Tanah Abang III No.16 Jakarta 10160 Jl. Tanah Abang III No.16 Jakarta 10160 9 (nine)NPK Plants – 286,000 tons 1 (one) Phosphate Plant – 500,000 tons Phone : (62-21) 3446678 Phone : (62-21) 3446460 1 (one) ZK Plant – 10,000 tons E-mail : [email protected] E-mail : [email protected] Website : http://www.pi-energi.com Website : http://www.pi-pangan.com
PT Pupuk Indonesia (Persero) Sustainability Report 2017 27 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
SCALE OF ORGANIZATION
10,179 employee 10 Subsidiaries
NUMBER OF EMPLOYEES IN OWNING 10 SUBSIDIARIES 2017
Rp58.94 Rp62.60 trillion trillion
TOTAL NET REVENUE TOTAL CAPITAL AS AT 31 DECEMBER 2017
Rp40 Rp12.90 trillion trillion
AUTHORIZED CAPITAL ISSUED AND FULLY PAID CAPITAL
11.42 million ton
TOTAL FERTILIZER PRODUCTION IN 2017
28 PT Pupuk Indonesia (Persero) Sustainability Report 2017 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
VISION, MISSION AND VALUES
VISION
To become an integrated, sustainable, and world-class agrochemical and foodstuff company.
MISSION
• Developing main businesses in the fields of fertilizer, chemical, and energy, along with associated infrastructure • Developing businesses that support food security • Developing investment portfolio to enhance the Company’s added value • Providing high quality and competitive products and services
VALUES
1. Stakeholder Satisfaction 2. Innovation and Total Value Added 3. Integrity and Ethics 4. Teamwork and Synergy 5. Environmentally Friendly
The dissemination of the Company’s Vision, Mission, and Values in 2016 took place through the following activities: 1. dissemination through internal publication media, i.e. TV Media, e-mail, in-house magazine and other media. 2. dissemination through Company website. 3. dissemination to new hires through Employee Onboarding activity.
PT Pupuk Indonesia (Persero) Sustainability Report 2017 29 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
FURTHER INFORMATION ON THE SUPPLY CHAIN [GRI 102-9] VISION, MISSION AND VALUES What is meant by suppliers is partners that produce [GRI 102-16] organic fertilizers. These partners produce organic fertilizers in accordance with the Company’s The Vision, Mission, and Values are stated in the requirements as set forth in cooperation contract. In Company’s Blue Print for 2011–2030, which hasobtained 2017, there were 182 organic fertilizer partners with total approval from the Minister of State-Owned Enterprises production of 686,871 tons and total sales of Rp199.29 with the Letter No. S-265/MBU/05/2015 dated 7 May billion. A total of 1,570 workers were employed in these 2015. organic fertilizer partners.
MARKET SHARE [GRI 102-6] VALUE CHAIN
Our customers make up the most important part in Production process consists of liquid, solid, and gas our entire business. PT Pupuk Indonesia (Persero) is phase in high temperature and very high pressure committed to maintaining and improving its strong using high tech process. relationships with all customers and to living up to its social responsibility towards all stakeholders. Our The Company’s products are distributed in 4 levels customers are divided into two segments: farmers (Provinces, District, and Other Groups) to various and farmers’ collectives, and farming and plantation regions and provinces in Indonesia to support the companies. production of food crops and Pupuk Indonesia Group’s participates in supporting food security.
The Company has been involved in various efforts and strategies to ensure the continuity of supply of fertilizers with competitive price schemes, among others by: 1. Revitalizing or replacing energy-intensive old plants with new plants that are more energy efficient, 2. Substituting the use of natural gas with coal, as the main energy supply, 3. Revamping old plants, 4. Conducting joint procurement involving all subsidiaries for the raw materials for compound fertilizers, 5. Engaging in cooperations with owners of phosphate mines.
30 PT Pupuk Indonesia (Persero) Sustainability Report 2017 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
DISTRIBUTION MECHANISM Procurement and Distribution Flow: : 1. In accordance with the Regulation of the Minister of Commerce No.15/2013 Pupuk Indonesia regulates the procurement and distribution of subsidized fertilizers at the local scale, from Line 6 to Line IV based on six principles, which are the Right Type, Right Amount, Right Price, Right Location, Right Time and Right Quality. 2. The produces are obliged to assure smooth distribution of subsidized fertilizers based on the six principles above and to have/control warehouse at Line III in respective area they are in charge of. 3. Distributors are to execute subsidized fertilizer distribution from Line III to Line IV. 4. Retailers distribute subsidized fertilizers based on the six principles to farmers and/or farmers groups in line with the Farmer Group Needs (RDKK). 5. Distribution of fertilizers to farmers/farmers’ groups starts from the gradual proposal from Retailer through to Producer.
LINE I Regulation of the Ministry of Agriculture (Allocation per Province) LINE II Regent Regulation (Allocation per sub-district) LINE III Regent Regulation (Allocation per Sub- LINE IV District)
Plant
Definitive Plan of Farmer Group Needs (RDKK)
Lini II/UPP
Line III warehouse Distributor Retailer warehouse
PT Pupuk Indonesia (Persero) Sustainability Report 2017 31 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
REPORT TO SHAREHOLDER
32 PT Pupuk Indonesia (Persero) Sustainability Report 2017 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
• Report of Board of Commissioner • Report of Board of Directors
For tens of years has Pupuk Indonesia dedicated itself to the nation, to bring prosperity through food security. We continue making improvements and innovations to develop Pupuk Indonesia into an enterprise that prioritizes “profit, people, planet”. This sustainability report embodies our commitment and responsibility to the stakeholders, to report on economic, social and environmental performance.
PT Pupuk Indonesia (Persero) Sustainability Report 2017 33 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
BOARD OF COMMISSIONER Bungaran Saragih
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REPORT OF THE BOARD
OF COMMISSIONERS [GRI 102-14] The Board of Commissioners gives its utmost appreciation to the management for their unremitting efforts to improve sustainable performance in the pursuit of advancing the public’s wellbeing for a prosperous nation.
The Government has successfully improved the The Board of Commissioners is highly grateful for the sustainability of production and productivity of strategic management’s efforts to create conducive working staple crops such as rice, corn, soy, and sugarcane, environments for our employees. The same goes to their among others. That success in with staple crops is no attention to raise the quality of life of the poor through the less attributable to the availability and affordability of Partnership and Environmental Sustainability Programs. production means – including fertilizers – and a host We believe that such programs enable the company to of other factors. Still, we must endeavor to increase grow with the support from the surrounding population. Pupuk Indonesia’ role and contribution towards further improvements in the production and productivity of We are also highly appreciative of the management’s commodity crops – a prerequisite of national food self- priority on environmental conservation. Several sufficiency. Subsidiaries succeeded in reaching Gold Rating (PT Pupuk Kalimantan Timur), Blue Rating (PT Pupuk Iskandar In 2017, Indonesia is successfully rice self-sufficient for the Muda) and Green Rating (PT Petrokimia Gresik, PT Pupuk first time in 32 years. Moreover, production of other food Sriwidjaja Palembang and PT Pupuk Kujang Cikampek) crops such as corn is also on the rise. We are right to be Rating in the PROPER Awards organized by the Ministry proud for achieving this milestone and highly grateful of Environment and Forestry of Indonesia. The Board of that Pupuk Indonesia, along with farmers and other food Commissioners encourages all subsidiary companies crop producers, is successful in meeting the Government’s to participate in the PROPER Awards. In relation to this, mandate of advancing public wellbeing for a prosperous the Board of Commissioners mandates that corporate nation. activities ought to be carried out in an environmentally- friendly manner. Environmental impacts must be detected The year 2017 is a year of challenges and opportunities. as early as possible so that their symptoms can be tackled The Board of Commissioners gives its utmost appreciation using strategic policies to ensure its conservation. to the management’s performance in 2017 for giving their level best, tackling challenges, and advancing to The Board of Commissioners would like to express its take advantage of opportunities. Indeed, the strategy of utmost gratitude to the directors, management, and every upstream and downstream synergy to secure fertilizer Pupuk Indonesia individuals across Indonesia for their supply for national food self-sufficiency is a masterstroke. hard work and dedication for a successful and sustainable performance. Furthermore, the management has executed another equally important strategy: promoting the principle of We would also like to extend our mark of gratitude to our sustainability to grow the company, “recording profits stakeholders for their support and contribution throughout while building its people and preserving the planet.” 2017. Last but not least, we are thankful to the Government The strategy is aligned with the principle of Sustainable for entrusting us with the noble duty of preserving and Development, an idea that is front and center in the global building this country of ours through food self-sufficiency. public to ensure the wellbeing of the people of today and the future.
Jakarta, April 2018
BOARD OF COMMISSIONER Bungaran Saragih
PT Pupuk Indonesia (Persero) Sustainability Report 2017 35 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
BOARD OF DIRECTORS Aas Asikin Idat
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REPORT OF BOARD
OF DIRECTORS [GRI 102-14]
The availability of fertiliser one of the driving factors of food security realisation a significant condition for Indonesia’s economic stability.
Development in agriculture sector can no longer CHALLENGES AND OPPORTUNITIES undermined, bearing in mind that it is the spearhead for One of the largest challenges in 2017 was the plummeting attaining prosperity of the nation and reducing poverty. prices of fertilizer in the international marketing; this Pupuk Indonesia holds the honor to be one of the main scaled down competitive power as the gas price went up. partners of the Government and supporters in improving The price of gas, a raw material, accounts for 70% of the agricultural production in Indonesia. To that end, Pupuk cost of goods sold. Gas price in Indonesia was US$6 per Indonesia continues giving its commitment to the MMBTU, while in other countries gas price for industry success of the national food security program through the cost between US$1 to US$3 per MMBTU. assurance of supply of fertilizer in Indonesia. This report embodies our commitment to such effort, apart from To tackle this issue, Pupuk Indonesia took efficiency steps reporting our significant involvement in sustainability as a strategy to stay in the market. Also we will replace efforts. We believe that a world-class organisation would steam unit, change fuel energy from gas to coal, as well as not be detached from the care and concern over three key developing less-gas-consuming fertilizer products, such elements of sustainability, namely profit, people, planet. as the type NPK. We also revitalise our factories. There are three factories to revitalise, one of which is our oldest and historical factory that has supported Indonesia’s food SUSTAINABILITY PERFORMANCE security for 50 years, i.e. Pupuk Sriwijaya (Pusri). We built The year 2017 is a milestone, for Pupuk Indonesia has the Pusri 2B factory to replace the old and inefficient booked profits totalling Rp3.08 trillion. The Company factory. This new factory applies the latest technology has recorded the highest fertizer production in its history, that allows gas fuel saving up to 14 MMBTU per ton of with a total production of 11.42 million tons. In addition Urea, thus reduces the cost of goods sold and eventually to the highest production record throughout the history bring us in the competition. of the Company, the total sales in 2017 reached 12.51 million tons. In the context of sustainability, performance is measured not only from financial aspect, but also achievement in environmental aspects, social aspects, and th corporate governance application. The award is conferred to excellent and innovative companies and business players.
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Another challenge is world’s over supply fertilizer. The We are also constantly developing efforts to improve world’s fertilizer supply is currently 240 million tons, occupational health and safety (OHS). However, with while the usage is only 180 million tons. Therefore, deep regret, we reported that there was a fatal accident Pupuk Indonesia actively performs changes to address occurred in one of our subsidiaries. However, a thorough this, by producing a derivative fertilizer products so evaluation has taken place, and improvements have been that dependence on Urea can be suppressed. We are applied to prevent this from reoccurring. This is evidenced also exploring the possibilities of developing other by the decrease in Total Recordable Injury Rate (TRIR) petrochemical products as an effort to increase corporate in 2017, that decreased at 26% from the previous year. In productivity. terms of environment responsibility, in 2017 PT Pupuk Iskandar Muda received an administrative penalty from In spite of these challenges we face, we remain being the Ministry of Environment and Forestry. This issue has optimistic, believing that fertilizer and petrochemical been settled as the Letter Number S.1093/PHLHK/PPSA/ industry has a bright future, because domestic fertilizer GKM.O/11/2017 on Administrative Penalty Settlement in needs--especially for NPK--are ever increasing. NPK Environment and Forestry has been issued. fertilizer has been proven having brought optimum results in increasing plant productivity, be it food plants or plantation ENVIRONMENT CONSERVATION EFFORTS Looking ahead, we aware that research development Environment conservation efforts that we have taken are, is a key to the growth of fertilizer industry and related among others, the program of planting 1000 bamboo industries in the efforts to support national food security. seedlings and training of bamboo processing technology To that end, Pupuk Indonesia cooperates in research transfer. Bamboo cultivation contains high economic with Sepuluh Nopember Institute of Technology (ITS). value, when the bamboo is processed into different types Research and development department as an important of products and consecutively being sold at national and investment for the future. This cooperation demonstrates even international markets. Furthermore we perform our serious efforts to develop the company into an activity of planting 1,500 trees in the complex area of PT advanced company with high profitability. Pusri Palembang. Other members of our holding also carried out environmental conservation efforts, such as PT Pupuk Kalimantan Timur who conducted the NOURISHING SUSTAINABILITY rehabilitation of coral reefs with the laying of 500 units of ACHIEVEMENTS artificial reef in Bontang, and PT Petrokimia Gresik who Pupuk Indonesia does not only focus on the Company planted 5,000 seeds trembesi seedlings. performance that is related to profit gaining, but we also care about the community and environment around These ongoing programs are in line with our commitment our operational locations. Social responsibility and to the protection of the environment and reduction of environmental conservation efforts are important aspects global warning impacts. These efforts is a part of the our to us, as these directly or indirectly support the continuity striving to maintain the earth for the next generations. of our business.
We continue increasing employee competence through quality education and training programs. Not only focusing on professional performance, we also provide motivation training and mentoring/coaching support. The mandays of training in 2017 totalled 233.871 work days.
38 PT Pupuk Indonesia (Persero) Sustainability Report 2017 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
We are highly committed to the compliance of regulations We are aware that the success in 2017 would not have concerning the environment and to the environment been realised without the support and participation of the management that is even beyond compliance. One of the Board of Commissioners, Board of Directors, the staff and members of our holding managed to obtain Proper “Gold” all stakeholders of Pupuk Indonesia. Therefore, I would rating and other members obtained Proper “Blue” and like express my deepest gratitude to you all. Let us work “Green” from the Ministry of Environment and Forestry of harder in the coming years to book a better achievement Indonesia. The achievement of Proper “Gold”, the highest in growing Pupuk Indonesia Group. rating, indicates that our company has environmental excellence, thanks to the innovations in the use of natural resources and community development. Proper “Gold” achieved by PT Pupuk Kaltim becomes a pride and, at the same time, a challenge for all our subsidiaries to achieve equivalent level.
Jakarta, April 2018
BOARD OF DIRECTORS Aas Asikin Idat
PT Pupuk Indonesia (Persero) Sustainability Report 2017 39 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
DEVELOPING SUSTAINABLE GOVERNANCE
40 PT Pupuk Indonesia (Persero) Sustainability Report 2017 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
• General Meeting of Shareholders • Political Contributions • Governance Structure • Adoption and Support for International Initiatives • Structure of the Board of Commissioners and Directors • Membership in Industrial Associations and Other Organizations • Directors • Stakeholder Involvement • Board of Commissioners • Implementation of sustainable • Anti-Corruption conception Suppliers • Anti-Corruption Communications and Trainings
Good governance has not only built the public trust, but also developed Pupuk Indonesia into a world-class company. Optimum sustainability performance could not have either been realized without strong support of the internal system and good corporate governance practice.
Sustainable governance is the main foundation in Under the guidelines of Sustainable Governance, we running an environmentally and socially- responsible are highly committed to give due respect to integrity Company. Under this governance umbrella, decisions are and embed the principles of 3P in its business activities. made in accordance to the principles of 3P: Profit, Planet, The main organs responsible to implement governance and People. Each of the tenets of the principles are equally are shareholders/General Meeting of Shareholders significant; not one deserves precedence over the other. (RUPS), Board of Commissioners and Directors, and supporting organs such as the Audit Committee, GCG We expect that due consideration to the principles will &Risk Management Committee, Secretary of the Board of result in: Commissioners, Corporate Secretary, Internal Oversight, • a company that is able to create optimum economic and Corporate Governance Compartment. value in the long-run; • stakeholders that reap maximum benefits from the The Board of Commissioners are supported by Board Company’s operations; Committees, consisting of the Audit Committee and • positive corporate image and reputation in the long- GCG &Risk Management Committee. As an organ term; and, that supports the Board of Commissioners, the GCG & • first-class employee competence and professionalism.
PT Pupuk Indonesia (Persero) Sustainability Report 2017 41 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
Risk Oversight Management Committee oversees the Governance Structure [GRI 102-18] Corporate Governance Compartment and advises it on In accordance with Law No. 40 Year 2007 on Limited matters in good corporate governance. In addition, the Liability Companies, corporate governance bodies Committee identifies items that require attention from primarily consist of the General Meeting of Shareholders, the Board of Commissioners, particularly in general the Board of Commissioners, and Directors. The governance and regulatory compliance. governance structure of PT Pupuk Indonesia (Persero) involves both primary and supporting organs and designed to ensure the independence of each corporate organ in carrying out its duties.
The GCG structure in place in PT Pupuk Indonesia (Persero) is as follows:
General Meeting of Shareholders (RUPS)
Board of Directors Commissioners
Internal Oversight Audit Committee Unit
Corporate GCG & Risk Governance Management Compartment
Secretary of the Board of Corporate Secretary Commissioners
General Meeting of The General Meeting allows shareholders to exercise their Shareholders (RUPS) rights: raise opinions and vote on important and strategic decisions in an independent and balanced manner. In this RUPS, both Annual General Meeting of Shareholders case, balanced refers to impartial decisions that takes due (RUPST) and Extraordinary General Meeting of consideration the interests of other shareholders and the Shareholders (RUPSLB), is the highest corporate organ Company. and the formal forum in which shareholders resolve strategic decisions. Both RUPST and RUPSLB are held in The General Meeting allows shareholders to formally accordance with the Company’s Articles of Associations exercise their rights and raise their opinions, give (AD), various corporate policies, and prevailing suggestions, and offer recommendations to the Directors. legislation. Decisions resolved in the General Meeting are binding
42 PT Pupuk Indonesia (Persero) Sustainability Report 2017 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
to both the Commissioners and Directors. The interests Structure of the Board of of minority shareholders are represented by the Commissioners and Directors Independent Commissioner. Pursuant to Indonesian legislation, PT Pupuk Indonesia (Persero) adopts a two-tiered board system consisting The General Meeting is also a forum to assess the of the Board of Commissioners and Directors whose performance of two other major corporate organs, i.e. duties are clearly outlined in the Company’s Articles the Board of Commissioners and Directors, in attaining of Association and prevailing legislation. The Board of operational targets set at the start of the year. Director’s Commissioners and Directors are mutually responsible performance is measured by the number of Key to maintain the going concern of PT Pupuk Indonesia Performance Indicators (KPI) it has achieved before being (Persero). evaluated and accounted for in the General Meeting. TheKPI is determined every year and adjusted with the To prevent conflicts of interest, a Commissioner is not risks and opportunities faced by the Company. Aspects permitted to concurrently hold office as a Director. of performance that must be achieved and accounted for Likewise, a Director is not permitted to assume an office consist of, among others, economic, environmental, and one level below except in emergencies. Responsible to social. elect, appoint, and dismiss Commissioners and Directors In addition to evaluating the performance of is the General Meeting of Shareholders. The controlling Commissioners and Directors, the General Meeting shareholder reserves the right to initiate a proposal to resolves important decisions concerning various appoint and dismiss a Commissioner and Director in proposed corporate actions, such as: the General Meeting of Shareholders. As a State-owned a. appointment and dismissal of Commissioners and Enterprise, the holder of the controlling Series A share is Directors; the Government of Indonesia and exercises such rights b. establishment of a subsidiary and/or joint venture; by proxy of the Minister of State-owned Enterprises. c. merger, consolidation, acquisition, spin-off, and The current structure and constituent organs of PT dissolving of subsidiaries and/or joint ventures; Pupuk Indonesia (Persero) are outlined in the Decree of d. release and write-off of the Company’s fixed assets, Directors No. SK/DIR/011/2016 dated April 1, 2016. except fixed mobile assets whose industrial economic life is conventionally 5 (five) years; and e. issue bonds and other debt instruments.
PT Pupuk Indonesia (Persero) Sustainability Report 2017 43 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
The primary functions of the Directors and Board of We are committed to prevent corruption by implementing Commissioners of PT Pupuk Indonesia (Persero) are as various Company-wide systems and policies, such follows: as establishment of a Fraud Risk System, signing of the Integrity Pact, Guidelines on Control of Grafts, Directors Guidelines on Reporting of Assets of Officials, Guidelines PT Pupuk Indonesia (Persero) is managed by one on Conflicts of Interest, and Guidelines on the Whistle- President Director and 5 (five) Directors. The directors blowing System (WBS). are authorized and assume full responsibility in managing the Company. They also represent PT Pupuk We have implemented various corruption/fraud Indonesia (Persero) both inside and outside of a court prevention systems, such as by annual signing of of law pursuant to the Articles of Association and the Integrity Pact, signing of the Integrity Pact when prevailing legislation. The Directors perform their duties executing corporate actions, and signing of the Integrity and assume collective responsibilities. Nonetheless they Pact in every procurement process. may act and take decisions in accordance to each of their duties and authorities, including on environmental and Internal corporate policies underline that Pupuk social matters.. Indonesia individuals are prohibited from receiving self- serving grafts for himself and his family, either presented from an offshore or domestic entity, sent through either Board of Commissioners electronic or non-electronic means. The commitment to prevent grafts is shown in our implementing of the The main duty of the Board of Commissioners is to Guidelines on Control of Grafts set out by the Decree of oversee corporate policies executed by the Directors that Directors No. SK/DIR/023A/2015 and renewed by the concerns both the Company and its business activities. Guidelines on Control of Grafts No. PI-TKK-PD-002 Rev. The Board also advises the Directors in the Company’s 0 enacted on September 8, 2017. interests. In its daily duties, the Board of Commissioners forms supporting committees to enhance its oversight Raising awareness on the forms of corruption/fraud, we functions in accordance with GCG principles. These have implemented a mandatory reporting of assets for committees are Audit Committee and GCG &Risk Commissioner, Director, and Grade I and II officials. The Management Committee. If so necessary, the Board mandatory reporting of assets was first enacted in 2014 may establish additional committees depending the by the Decree of Directors No. SK/DIR/020/2014 signed Company’s circumstances and needs. Each committee is on May 20, 2014. The decree was then renewed by the chaired by a Commissioner and may have at most 2 (two) Guidelines on Reporting of Assets of Officials No. PI-PD- non-Company members that are deemed competent to TKK-003 Rev. 0 enacted on August 2, 2017. handle for the Committee’s tasks..
Anti-Corruption [GRI 205-2] Pupuk Indonesia have taken strategic measures to prevent corruption or fraud and has communicated those measures to our employees, Directors, and Board of Commissioners and its committees. The communication channels we used include, among others, meetings between the Directors and Board of Commissioners, GCG awareness activities, trainings, workshops, and coordinating meetings.
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Furthermore, we raise awareness on all forms of corruption/ The series of activities, organized by our Corporate fraud by implementing an online whistleblowing system Governance Compartment, featured speakers from that can be accessed by every employee. Reports sent the Corruption Eradication Commission (KPK) of the through the system are made anonymously. Other efforts Republic of Indonesia. The training was held on June to increase anti-corruption awareness is by implementing 15, 2017 and attended by some 35 functionaries of the policies on managing conflicts of interest and developing Governance Departments in the Pupuk Indonesia Group, the Fraud Control System. One of the aims of the latter who were then tasked with transferring knowledge from system is to detect risks and mitigate corruption/fraud. the training to the Board of Commissioners, Directors, and employees of each company group. Following this As part of the efforts to anticipate corruption, we have training, we expect that the importance of transparent identified areas of operations that are susceptible to practices and anti-graft measures are highlighted corruption.[GRI 205-1] effectively to establish a corruption-free corporate governance within Pupuk Indonesia Group.. An audit by SPI found no evidence to indicate acts of corruption within Pupuk Indonesia. This finding is further reinforced by zero complaints or investigations of Political Contributions corruption cases within Pupuk Indonesia Group in 2017. [GRI 415-1] Pursuant to the provisions on contributions to political In 2017, there were zero cases of fraud carried out by work parties set out in Law No. 2 Year 2008 on Political Parties units or employees, zero reports of corruption recorded to and Law No. 10 Year 2009 on General Elections, the Board the WBS, zero termination of employment or disciplinary of Commissioners, Directors, and officials of State-owned sanctions due to corruption, zero termination or non- Enterprises are prohibited from contributing to political extension of contracts with business partners due to parties. We are compliant to such legislative provisions corruption, and zero legal complaints. and have established a Code of Conduct that prohibits contributions made using Company-owned funds, goods, and facilities to support any political party and Anti-Corruption its candidates, except otherwise permitted by prevailing Communications and legislation. Trainings Pupuk Indonesia has, in the spirit to align perception, Throughout the reporting period, Pupuk Indonesia intent, and effectiveness of corruption prevention, held has never handed over any sums of funds as political special trainings and workshops on anti-corruption/anti- contributions, financial or otherwise, and has never fraud practices. In addition, we held awareness campaigns offered such contribution, either directly or indirectly, on transparent practices and anti-graft measures by to any organization in any country and to any recipient/ implementing the Reporting of Assets of Officials and beneficiary to any organization. Control of Grafts for the Board of Commissioners, Directors, and employees of Pupuk Indonesia.
PT Pupuk Indonesia (Persero) Sustainability Report 2017 45 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
Adoption and Support for At the end of 2016, Pupuk Indonesia actively participated International Initiatives in the following organizations: 1. International Fertilizer Association (member) [GRI 102-12] 2. Indonesia Fertilizer Producer Association (Presidium Pupuk Indonesia recognizes the importance of Council) minimizing environmental impacts due to our operations. 3. Institute of Certified Professionals of the Indonesian We participate in improving the quality of life of local Fertilizer Industry (Management Board) residents in accordance with the goals of sustainable development. We recognize that the main challenges in achieving sustainable development are climate change Stakeholder Involvement and global warming. [GRI 102-40, GRI 102-42, GRI 102-43, GRI 102-44]
We participate in the global effort to mitigate global Stakeholders are those who are affected or affects warming by adopting several international initiatives on corporate policies, decision making, and operations. We global warming, such as ISO 9001, ISO 14001, SDG, and believe that stakeholders plays a strategic role in our the UN Global Compact.. growth and that our performance are on our stakeholders. As such, we strive to maintain and cultivate a harmonious relationship with our stakeholders. Membership in Industrial Associations and Other The following table describes stakeholder relationship Organizations [GRI 102-13] and interactions in 2017. Pupuk Indonesia Group has initiated a number of activities that are aimed to support Indonesia’s economic growth through the fertilizer, petrochemicals and agri chemicals, steam and electricity, transport and distribution, trade, and EPC (Engineering, Procurement, and Construction) industries. In addition, we are active in a number of associations to expand our business network and enhance stakeholder involvement in resolving operational issues.
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Stakeholder Basis for Engagement Frequency of Topics/Issues Addressed [GRI 102-40] Determining Approach Engagement [GRI 102-44] Inclusion [GRI 102-43] [GRI 102-43] [GRI 102-42]
Shareholders - Influence General Meeting of Twice a year • Supervision and evaluation of the Company’s - Rresponsibility Shareholders performance • Determination and payment of dividends • Accuracy and ratification of financial statements of The Company • Payment of taxes and non-tax state revenue
Customers of Subsidized Influence Meeting and Throughout the • Guaranteed supply and prices Fertilizers: Farmers and Farmers’ Mentoring planting season • Guaranteed fertilizer quality Collectives • Customer satisfaction survey
Customers of Non-Subsidized Influence Customer Service 56 times • Guaranteed supply and prices Fertilizers • Guaranteed fertilizer quality • Customer satisfaction survey
Employees Presentation • Establishment of At least twice a • Guaranteed freedom of association and Labor Unions year expression • Meeting with the • Health and work safety insurance Management • Equality, welfare, and certainty of career paths
Suppliers/Distributors Dependency • Meeting • Information on opportunities for cooperation • Work Contract • Equality of opportunity for cooperation • CSMS • Contract Implementation • Fulfillment of rights and obligations • Compliance with regulations
Public Proximity CSR programs At least twice • Social assistance and PKBL a year • Mentoring of business partners
Media Presentation • Press release At least twice • Corporate policies and actions • Press conference a year • The Company’s performance
Implementation of Goods/services suppliers also affect our reputation and Sustainable Conception image. For those reasons, we conduct a rigorous selection Suppliers process for our suppliers that is benchmarked to the sustainability criteria set out in the General Guidelines Pupuk Indonesia recognizes that the lifecycle of our on the Procurement of Goods and Services in PT Pupuk products may impact and contribute to the environment, Indonesia (Persero) Group No. PI-PD-ADA-002 Rev. 0 starting from our goods/services suppliers, production, enacted on May 29, 2017. and usage.
Only suppliers that fulfill the sustainability criteria may Suppliers are part of our supply chain and operate on partner with us. The criteria assessed, among others, our behalf. Pupuk Indonesia’s image may be damaged compliance to employment regulations such as minimum by negative actions conducted by our suppliers as they regional wages, occupational health and safety, and their operations are conducted to our specifications respect for human rights. In addition, suppliers have to and requirements. Examples of suppliers are Organic comply with environmental regulations. Fertilizer Producers and Fertilizer Distributors.
PT Pupuk Indonesia (Persero) Sustainability Report 2017 47 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
PRESIDENT DIRECTOR
Finance Investment Director Director
SVP Finance & SVP Corporate SVP Corporate SVP Corporate Corporate Head of Internal SVP Accounting SVP Corporate Treasury Performance Research Planning Secretary Audit Unit Development Head of Corporate Communication
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Human Capital Marketing Technology & Government Director Director Director
SVP Human SVP Corporate SVP Commerce SVP Distribution General SVP SVP Information SVP Manufacture SVP Procurement Capital Governance Head of Training Technology Technology Center
PT Pupuk Indonesia (Persero) Sustainability Report 2017 49 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
DEVELOPING STAKEHOLDERS’ ECONOMIES
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• Revenues • Investment in Infrastructure and • Profitability Services • Consumers • Contributions to Local Suppliers • Production • Financial Assistance from the Government • Employee Awards • Challenges from Climate Change and • Contribution to the Government Loss of Land Income • Corporate Synergies • Contributions to the Public
As a producer and supplier of the national fertilizer needs, Pupuk Indonesia is a leader in national economic entities in supporting food security programs. In addition to supporting food security, the economic impacts arising from the company’s operations are also a direct economic value that are channeled to the state and stakeholders.
As a State-owned Enterprise (BUMN), we support and wages and rewards to our employees, dividends, and taxes implement the Government’s policies and programs to the Government, interests to lenders, and investments designed to meet self-sufficiency in food, including to the public through various community development fertilizer subsidies for farmers that in turn increases their programs, such as the Partnership and Environmental farm’s production. Sustainability Program and CSR campaigns.
We strive to deliver well-rounded benefits in our operations, Thus, Pupuk Indonesia plays a vital role in developing among which is by creating economic benefits for our the economic interests of both our internal and external stakeholders. As a company, we generate an economic stakeholders. Our net income is always given back to our value that is then channeled to our stakeholders, such as stakeholders.
PT Pupuk Indonesia (Persero) Sustainability Report 2017 51 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
Direct Economic Value Generated and Distributed [GRI 201-1]
Description 2014 2015 2016 2017
1. Direct Economic Value Generated
a. Sales 64,617,200 66,230,955 64,164,003 58,942,682 b. Interest Receivables 568,604 289,725 169,092 204,313 c. Dividends 14,412 9,089 6,034 4,585 d. Royalties - - - - e. Property Leases - - - - f. Asset Sales 9,460 3,098 29,253 3,168
Total Economic Value Generated 65,209,676 66,532,867 64,368,382 59,154,748
2. Economic Value Distributed
a. Operational Costs Revenue Costs 49,419,254 52,250,240 49,929,129 43,696,679 Sales Costs 1,111,318 751,614 849,666 737,489 Administrative and Sales Costs 1,976,744 2,108,740 1,828,578 1,813,664
Subtotal Operational Costs 52,507,316 55,110,594 52,607,373 46,247,832
b. Employee Salaries and Allowances Revenue Costs 1,963,271 1,906,543 2,043,078 2,754,582 Sales Costs 444,346 383,352 491,431 598,480 Administrative and Sales Costs 1,318,960 1,448,455 1,501,557 1,556,946
Subtotal Employee Salaries and 3,726,577 3,738,350 4,036,066 4,910,008 Allowances
c. Payment to Lenders Interests 1,829,036 1,823,840 2,186,846 3,784,879 Dividends 1,869,016 2,100,000 1,527,550 1,070,874
Subtotal Payment to Lenders 3,698,052 3,923,840 3,714,396 4,855,753
d. Payment to the Government 1,590,614 1,559,210 1,318,703 1,483,483
e. Investments to Community Partnership Programs 114,204 107,182 133,274 128,568 Environmental Sustainability Programs 30,153 31,563 34,700 54,293 CSR - 30,930 96,304 66,575
Subtotal Investments to Community 144,357 169,675 264,278 249,436
Total Economic Value Distributed 61,646,893 64,502,881 61,948,163 57,747,767
3. Economic Value Retained (1-2) 3,562,783 2,029,986 2,420,219 1,406,981
Revenues In 2017, the Company recorded revenue in amount 2. Reduction in subsidy revenues due to reduction of Rp58.94 trillion or 89% of the Budget and Business in production costs, In that the costs of producing Plan (RKAP). The achievement was 8% less compared fertilizer and ammonia are reduced in line with the with Rp64.16 trillion recorded in 2016. The reduction in Company’s cost-efficiency programs and reduction in revenues was due to: prices of raw materials. 1. Reduction in commodity prices in 2017, particularly ammonia, compared with previous years.
52 PT Pupuk Indonesia (Persero) Sustainability Report 2017 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
3. Reduction in Revenues from Services and Trade, Production particularly due to delays in Engineering, Procurement, As the largest fertilizer producer in Asia, our main product and Construction (EPC) projects caused by slow is fertilizer – used to improve fertility and enrich nutrients recovery of investments in the petroleum industry. in agricultural land. The total fertilizer production in 2017 was 11.42 million Profitability tons or 8% higher than 10.46 million tons produced in 2016. The increase in fertilizer production is due to The Company has successfully recorded a profit of operations of a number of new plants and improvements Rp3.08 trillion or 150% higher than the target set by its to the reliability of existing plants to ensure that every Shareholders. The achievement was 13% less compared plant operates at optimum levels. with Rp3.53 trillion recorded in 2016. One of the Company’s efforts to increase profitability is by implementing a Cost Reduction Program (CRP) and building synergies among its subsidiaries. By assets, the Company increased its assets by 1% with a value of Rp128.49 trillion in 2017. In 2016, the Company’ assets was 127.09 trillion.
Operational Highlights, 2014-2017 (in millions of tons)
Description 2014 2015 2016 2017
Fertilizer Production 10,684 10,902 10,459 11,417
Non-fertilizer Production
Ammonia 5,058 5,524 5,239 5,422
Sulfuric Acid 572 922 1,160 1,198
Phosphoric Acid 205 224 313 288
Aluminium Fluoride 9 10 11 11
Others 26 26 33 34
Total Non-fertilizer Production 6,543 7,669 6,756 6,954
Fertilizer Sales 12,229 11,763 12,095 12,505
Non-Fertilizer Sales 1,907 2,121 1,443 1,323
CONSUMERS higher than the production capacity of 3.1 million tons per year. Demand for fertilizer in the agriculture sector The primary consumers of Pupuk Indonesia are: is currently very high. Indeed, based on data from the 1. Farmers and farmer groups; Ministry of Agriculture, demand for fertilizer in the food 2. Industrial agriculture and plantations. crop sector exceeded 14 million tons per year whereas current supply can meet only 9.5 million tons per year. Domestic demand for NPK in the commercial market is sufficiently at a higher ratio compared with current NPK production capacity. The national demand for NPK is projected to reach 7.2 million tons per year, significantly
PT Pupuk Indonesia (Persero) Sustainability Report 2017 53 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
In the domestic non-subsidized market, the addition, the subpar sales achievements were as result competitiveness of our products decreased somewhat. of limited fertilizer inventory due to a reduction in urea The sales of non-PSO fertilizers in 2017 was 2,198,088 tons production. or 98% of the target set in the Budget and Business Plan (RKAP) of 2,244,935 tons. The slight competitive decline is primarily caused by uncompetitive prices due to a rise in Employee Rewards natural gas prices, which in turn affects production costs. In 2017, the total economic value distributed to Furthermore, an increase in assigning NPK products for employees increased to Rp6,641,486 per employee, an PSO resulted in the Company to prioritize demands by 8% rise compared with 2016, due to merit and promotion the food crop sector. This decision impacted NPK sales in increases. the non-PSO sector.
In terms of market potential, Asia has the capacity and Contributions to the demand for urea, not to mention it being its largest Government Income importer. The urea export market in 2017 suffered a Pupuk Indonesia contributed to the state income by decline in demand from overseas consumers. The sales of paying taxes, consisting of Income Tax (from Pupuk export urea in 2017 were 756,215 tons or 56% of the target Indonesia Group and its employees), Value-added Tax, set in the Budget and Business Plan of 1,360,000 tons. and other taxes. The reduction in export orders was due to earmarking of fertilizer inventory in Quarter I for the subsidized market in preparation for the growing season. However, due to a decline in urea prices in Quarters II and III, we prioritized the non-PSO market for its higher selling prices. In
Taxes Payable by Pupuk Indonesia Group, 2014-2017 (in millions of Rupiah) Tax 2014 2015 2016 2017 Corporate Income Tax 348,569 234,387 231,179 221,783 Employee Income Tax 691,910 733,901 707,094 615,339 Value-added Tax 1,029,566 1,771,583 2,008,167 2,620,589 Other Taxes 2,332,635 1,874,053 2,557,695 1,486,055 Total 4,402,680 4,613,924 5,504,135 4,943,766
54 PT Pupuk Indonesia (Persero) Sustainability Report 2017 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
In our areas of operations, we contribute to Regional Contributions to the Public Governments and the Central Government by paying We believe that a good company contributes positively to our Regional Taxes and Central Taxes. In 2017, Pupuk its surroundings and they benefitted from the company’s Indonesia and its subsidiaries paid a total of Rp4.94 operations. We demonstrate our intent by channeling trillion in taxes, a 10% decline compared with Rp5.50 funds for the public through social investments that we trillion paid in 2016.
Regional Taxes and Central Taxes Paid, (in millions of Rupiah) Regional Business Units Regional Taxes Central Taxes Total Taxes Paid PT Pupuk Indonesia (Persero) 8,376 69,621 77,997 PT Petrokimia Gresik 26,469 1,252,201 1,278,670 PT Pupuk Kujang 6,936 331,394 338,329 PT Pupuk Kalimantan Timur 80,673 1,707,776 1,788,449 PT Pupuk Iskandar Muda 3,105 303,621 306,726 PT Pupuk Sriwidjadja Palembang 27,144 767,227 794,371 PT Rekayasa Industri 1,342 234,515 235,857 PT Mega Eltra 275 42,008 42,282 PT Pupuk Indonesia Logistik 0 51,177 51,177 PT Pupuk Indonesia Energi 14,407 14,210 28,616 PT Pupuk Indonesia Pangan 0 1,290 1,290 Total 168,726 4,775,039 4,943,766
In addition to taxes, Pupuk Indonesia Group contributed hope can provide positive and far-reaching benefits for dividend payments to State Income. As a State-owned locals in our areas of operation. In 2017, the direct economic Enterprise, shares of PT Pupuk Indonesia (Persero) is value distributed by Pupuk Indonesia Group for the public wholly-owned by the Government of the Republic of was Rp250.691 billion. The social investments consisted Indonesia with a paid-up capital of Rp12.90 trillion and an of Partnership Programs, Environmental Sustainability authorized capital of Rp40 trillion. Thus, we pay dividends Programs, and CSR. Our flagship programs were aimed at to the Ministry of State-owned Enterprises on behalf of developing coastal residents, maintaining urban forests, the Government of Indonesia every year. funding small businesses, and assisting youths through education funding and scholarship awards. In 2017, Pupuk Indonesia Group paid Rp1.07 trillion in dividends to its shareholders in accordance with the Directorate General of Budgets of the Ministry of Finance Letter No. S-63/MK.2/2017 dated June 7, 2017 for its performance in the 2016 fiscal year. The profits are paid to the Government as dividends as resolved by the Annual General Meeting of Shareholders. The Government sets the sum of dividends by means of the Ministry of State- owned Enterprises as its Proxy in the General Meeting of Shareholders.
PT Pupuk Indonesia (Persero) Sustainability Report 2017 55 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
Social Investments by Pupuk Indonesia Group, 2014-2017 (in millions of Rupiah) Type of Investments 2014 2015 2016 2017 Partnership Programs (PK) 119,474 111,955 133,570 128,968 Environmental Sustainability Programs (BL) 4,860 14,644 41,751 55,148 CSR - 44,288 96,304 66,575 Total 124,334 170,887 271,625 250,691
Investments in Production use IN Country Infrastructure and Services [GRI 204-1] [GRI 203-1] From a corporate perspective, local suppliers are defined Pupuk Indonesia is focused on expanding benefits to all as companies that are based in or carry out production in of its stakeholders. As such, economic contributions may the country. On the other hand, subsidiaries define local be expanded to have an even greater reach by touching suppliers as companies that are based in or carry out on the benefits of each business activity. production in the local city/regency/province in which the subsidiary operates. In 2017, Pupuk Indonesia Group has invested in development projects such as the Amurea II Project In 2017, Pupuk Indonesia Group procured 53.78% of its in Gresik and in the Gresik Gas Cogeneration Plant needs from local suppliers at a total value of Rp11 trillion. independent power producer (IPP Gresik/GGCP). In Maximum involvement of local suppliers is proof of our 2017, the total investments made in development projects effort to stimulate popular economic growth for mutual were Rp3.29 trillion. wellbeing.
We have made certain that there are no projects that To improve the quality of our suppliers, we have a set of violated any one person’s human rights. Our commitment requirements when selecting the most suitable suppliers. is backed by zero legal claims or complaints concerning These are based on criteria such as labor, public, and human rights violations from employees. environmental aspects. For example, suppliers have to be and comply with Occupational Health, Safety, and Environment regulations set out by each of our subsidiary. Contributions to Local In addition, prospective suppliers have to comply with Suppliers each subsidiary’s guidance policies on local labor, We strive to benefit our supply chain through a series regional wages, and ban on child labor, among others. of programs designed to improve the quality of our distribution chain in terms of human rights, environment, Fertilizers produced by Pupuk Indonesia Group are labor, and public as outlined in our goods and services distributed to consumers through two supply chains: procurement policy. • Non-subsidized Fertilizer The transaction is stipulated in the Sales Contract We are committed to assist the development of local (SPJB) with buyers of non-subsidized fertilizer. The residents by preferring to partner with local suppliers contract stipulates, among others, sales volume, in our value chain through auctions/tenders. Our selling price, mutual agreements, contract duration, commitment is outlined in the General Guidelines on mechanisms of payment, and product delivery/ the Procurement of Goods and Services in PT Pupuk collection. Indonesia (Persero) Group No. PI-PD-ADA-002, Item 6.8 on the Utilization of Domestic Products. [GRI 204-1]
56 PT Pupuk Indonesia (Persero) Sustainability Report 2017 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
• Subsidized Fertilizer The PSO is grounded in Article 66 paragraph 1 of Law Consumers of subsidized fertilizers are farmers who No. 19 Year 2003 on State-owned Enterprises, in that are members of a farmers’ group. These are farmers the Government may designate SOEs to carry out who engage in food plant sub-sector, plantation sub- public welfare functions that align with their purposes sector, and horticulture sub-sector as well as farmers and objectives. If such designations are deemed to be in aquaculture sector.. We cooperate with appointed financially infeasible, the Government must compensate distributors and retailers to distribute fertilizers to the cost spent by the SOE plus a reasonable margin on farmers/farmer groups. Both distributors and retailers that cost. are responsible for purchase, storage, sales, and marketing of subsidized fertilizers. Both are bound by The current model for subsidized fertilizer is price the fertilizer SPJB. subsidies, where farmers purchase fertilizers for less than commercial market prices. We have conducted a supplier satisfaction survey to improve the quality of service to suppliers and, at the same Subsidized fertilizers for farmers must meet 6 (six) time, enhance sustainable development processes in our principles of “Right” (type, amount, price, place, time, and internal and external supply chains. The satisfaction quality). Fertilizers that are subsidized are urea and non- survey, conducted in December 2017, produced 3 urea fertilizer (NPK, ZA, SP-36, and organic). (three) assessment results: supplier satisfaction index of 1.51 (“satisfied”); supplier dissatisfaction index of 2.31 Legislation concerning subsidized fertilizer in 2017 is as (“satisfied”); and supplier loyalty of 4.23 (“loyal”). follows: a. Law Number 8 Year 2017 on the Amendment to Law At the end of the reporting period, we are partnered Number 18 Year 2016 on the National Budget for the with 1,542 distributors and 45,005 retailers. Since these 2017 Fiscal Year (State Gazette of the Republic of businesses create employment opportunities, our Indonesia Year 2017 Number 186, Supplement to the business impacted the community’s economy indirectly. State Gazette of the Republic of Indonesia Number [GRI 203-2] 6111); b Regulation of the Minister of Agriculture Number 69/Permentan/SR.310/12/2016 on the Allocation Financial Assistance from and Maximum Retail Price of Subsidized Fertilizer the Government [GRI 201-4] for the Agriculture Sector for the 2017 Fiscal Year According to the Road Map designed by the Ministry of in conjunction with Regulation of the Minister of Agriculture, domestic demand for urea is predicted to Agriculture Number 04/Permentan/SR.310/3/2017 increase at an average of 6.3% annually. This projection on the Amendment of the Regulation of the Minister gave us the opportunity to strengthen our market of Agriculture Number Regulation of the Minister of share. The fertilizer industry is predicted to enjoy Agriculture Number 69/Permentan/SR.310/12/2016 excellent prospects in the future, partly in relation to the on the Allocation and Maximum Retail Price of government-subsidized public service obligation (PSO) Subsidized Fertilizer for the Agriculture Sector for the that we participate in. The PSO is a cost borne by the 2017 Fiscal Year and state for disparities in selling prices set by state-owned enterprises and private producers for certain goods/ services that the Government wishes to remain affordable to the better part of the public.
PT Pupuk Indonesia (Persero) Sustainability Report 2017 57 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
c. Decree of the Minister of Agriculture Number 17/ In the table above, our revenues and payments of KPTS/SR.310/B/11/2017 on Amendment to the subsidized fertilizer increase consistently at an average Allocation of Subsidized Fertilizer for the Agriculture rate of 12% every year (CAGR 2013 – 2017). Some 73% of Sector for the 2017 Fiscal Year. our Group’s total fertilizer sales volume is dedicated to d. Supply Agreement between the Ministry of meet demands from the PSO sector. In other words, Agriculture cq. DG of Infrastructure and Agricultural profit from 73% of our sales volume is guaranteed by law. Facility with PT Pupuk Indonesia (Persero) Number: The remaining 27% of our sales volume is allocated for 001/SR.320/B.5/01 2017 and 001/SP/DIR-C10/2017 the non-PSO sector (commercial segment) where our which was amended with Addendum I Supply margins are greater than 8%. Agreement No. 03/MoU/SR.320/B/05/2017 and 051/ SP/DIR-C10/2017 and subsequently reopened with Distribution of subsidized fertilizer is carried out pursuant Addendum II Supply Agreement with No.604/MoU/ to the Regulation of the Ministry of Trade Number SR.320/B/12/2017 and 123/SP/DIR- C10/2017. No.15/M-DAG/PER/4/2013. The technical mechanism to manage subsidized fertilizer is set out in the Circular of the President Director of PT Pupuk Indonesia (Persero) Revenue from Government Subsidies, 2013-2017 No. SE-07/IV/2013 and supply agreements between (in millions of Rupiah) PT Pupuk Indonesia (Persero) and its subsidiaries on Year Total PSO management in subsidiaries. The regulation is 2017 26,218,561 the basis of managing subsidized fertilizer as goods 2016 24,412,054 whose procurement and distribution is controlled by the 2015 29,140,459 Government to meet demands from farmers and farmer 2014 19,281,402 groups. 2013 16,899,027
58 PT Pupuk Indonesia (Persero) Sustainability Report 2017 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
To ensure that urea fertilizers are distributed as intended Climate change may affect our operations and financial without any irregularities, the Regulation of the Minister position in the past few years, in that it shifted the of Agriculture No. 69/Permentan/SR.310/12/2016 on growing season, which accordingly affects the timeliness Allocation and Maximum Retail Price of Subsidized of fertilizer demand from farmers and its distribution. Fertilizer for the Agriculture Sector for the 2017 Fiscal Year Consequently, farmer demand for fertilizer shifted was passed to enforce a closed-loop distribution system compared with previous years. We have to consider for subsidized fertilizers. Farmers or farmer groups can the fertilizer accumulation in inventory since timely only have access to subsidized fertilizer after submitting distribution is not possible. For now, we have to construct a Definitive Plans for Group Activities (RDKK), with additional warehouses to store excess inventory. To assistance from field workers, to appointed kiosks.. anticipate overstocking that could lead to overflow in retail warehouses, we have constructed concrete-walled warehouses that are able to withstand overstock. Challenges from Climate Change and Loss of Land Another challenge that could financially affect Pupuk [GRI 201-2] Indonesia the loss of agricultural land. Some 100 thousand hectares of agricultural rate is converted each One of the challenges that we face is global climate year. The Government’s production of 40 thousand change, a phenomenon that affects global and national hectares of new agricultural land per year could not keep food resilience. Climate change changes pattern and up with the current conversion rate. The majority (80%) of intensity of rain, raises temperatures of air and sea, and agricultural land conversion took place in Java, the center increases frequency and intensity of natural disasters. of national food production. The conversion is bound to Especially in the agricultural sector, such changes cause affect the issue food resilience, unless supported by the the pattern and calendar of the growing season to change, availability of productive land. On the other hand, as the not to mention the widespread of pests and plant diseases largest consumer of fertilizer, farmers suffers the brunt that reduce agricultural production. of loss of agricultural land – reducing farming efficiency and affecting their wellbeing. In 2012, the arable land in In Indonesia, climate change causes no less than 50% hectares per person is 0.22 hectares. It is predicted that of farmable land to suffer from later rainy seasons and by 2050, the arable land per farmer decreases to 0.18 advanced dry seasons, resulting in a shorter growing hectares. season. Furthermore, rising the temperature by 1°C is predicted to increase rainfall by 2-3% annually. Data from We respond to loss of agricultural land by increasing the Ministry of Agriculture’s Strategic Plan (RENSTRA) productivity to achieve the goal of national food resilience. 2015-2019 showed that in the last 5 years, 29,743 hectares For our part, we strive to ensure supply of fertilizer and of farmland suffered from floods and 82,472 hectares from improve fertilizer technology. drought.
PT Pupuk Indonesia (Persero) Sustainability Report 2017 59 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
Corporate Synergies
2%1%1% 2% SYNERGY 2017 20 SERVICE RP4,7 Trillion
3% 4% Ammonia Coal
5% Urea Steam and Water Group Transportation Plastic bag 10% Synergy PI 40% 2017 Synergy NPK NPK Raw Material Achievement Others Other fertilizer (Percentage) 10% Electricity and Electrical Integration
22%
We maintain the continuity of our operations by As for synergies with other SOEs, we synergize in synergizing our group’s subsidiaries and other SOEs. matters such as procurement, services, distribution, These in-group synergies include matters in common finance, construction, and others. The synergies are procurement practices, common insurance policies, expected to give added value to Pupuk Indonesia and our common management of materials, transport, and stakeholders. finance. For 2017, we have carried out 20 synergies worth Rp4.7 trillion.
60 PT Pupuk Indonesia (Persero) Sustainability Report 2017 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
No SOE Synergies Parties Involved
1 Procurement of natural gas PI - Subsidiary of Pertamina
2 Procurement/sale of excess electricity PI – PLN
3 Cooperation in surveys PI - PT Sucofindo & PT Surveyor Indonesia
4 Professional certification in radiography PI – BATAN
5 Procurement of Virtual Private Network (VPN) PI – PT Telekomunikasi Indonesia Tbk.
6 Procurement of fertilizer transport PI – PT BGR
7 Lease of laptops and computers PI – PT Sinergi Informatika Semen Indonesia
8 Procurement of Urea and NPK Fertilizer packaging PI – PT Rajawali Citramass & PT Dasaplast Nusantara
9 Consulting Service for Construction Management of PI PI – PT Virama Karya (Persero) Tower
10 Supply of Gypsum and ALF3 PI – SOE in concrete and aluminium production
11 Appointment of fertilizer distributors PI – PT PPI, PT BGR & PT Pertani
12 Procurement/supply of fertilizer PI – SOE specializing in plantations
13 Procurement of call center systems and farming PI – PT Telkom digitalization trials
14 Trials of Kartu Tani PI – BRI, BNI, Mandiri, BTN
15 Appointment of Financing Distributors PI – BRI, BNI dan Mandiri
16 Storage and management of regional fertilizer inventory PI – PT BGR & PT Varuna Tirta Prakasya
17 Use of port and warehousing facilities PI – SOE in port management & its subsidiaries
18 Distribution of fertilizer PI – SOEs in rail and logistics
19 Financing of investments and working capital PI – BRI, BNI dan Mandiri
20 Underwriting for PT Sang Hyang Seri PI –BRI
21 Capital market financing to issue 2017 Bonds PI – Mandiri Sekuritas, Danareksa, Bahana Sekuritas, and BNI Sekuritas
22 Development of Kartu Tani PI – SOE Banks
23 Application of fertilizer for palm oil & cocoa PI –Riset Perkebunan Nusantara SOE
24 Research and development among fertilizer manufacturers PI –UGM, Unpad, and ITB Research Centers
25 Procurement of Internet connection PI – PT Telkom
PT Pupuk Indonesia (Persero) Sustainability Report 2017 61 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
No SOE Synergies Parties Involved
26 Purchase of EPC materials PI – Krakatau Steel & Wika Beton
27 Purchase of electricity in Mamuju PI – PLN
28 Provision of transmission construction services PI – PLN
29 Lubricant agent PI – PT Pertamina Lubricant
30 Construction of PKG urea plant, jetty, and PSP urea bulk PI – PT Adhi Karya storage
31 Construction of PIE power plant PI – PT PP
32 Construction of USB PKT PI – PT Krakatau Engineering
33 Construction of coal gasification project PI – PTBA
34 Management of Employee Health Insurance PI – BPJS Kesehatan
35 Management of JHT, Work Accidents, and Death programs PI – BPJS Ketenagakerjaan
36 Post-retirement programs for Directors and Commissioners PI – SOE in insurance
37 Bank at work (payroll, ID Card) PI – SOE Banks
38 Provision of pledged deposit as collateral PI – PT Sang Hyang Seri & BRI
62 PT Pupuk Indonesia (Persero) Sustainability Report 2017 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
PT Pupuk Indonesia (Persero) Sustainability Report 2017 63 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
DEVELOPING COMPETENT HUMAN RESOURCES OF PUPUK INDONESIA
64 PT Pupuk Indonesia (Persero) Sustainability Report 2017 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
• Employee Composition • Freedom to Unionize • Employee by Employment Status • Skills Development • Recruitment • Workplace Equality, Diversity, and Opportunity • Employee by Age Group • Employee Benefit • Permanent Employees By Education Level • Retirement Preparations
Pupuk Indonesia’s most valuable asset is its employees. We strive to retain the best talents by offering competitive remuneration packages, listening to their aspirations, and providing avenues to develop their talents further. Pupuk Indonesia expresses its heartfelt thank you to our individuals for their hard work and utmost dedication.
It goes that well-cared employees lead to a well-cared In 2017, Pupuk Indonesia employs a total of 10,179 people. company. Pupuk Indonesia is highly committed towards In addition to permanent employees, Pupuk Indonesia care and development of its employees alongside employs 3,107 contract employees. development of the company. The number of permanent employee declined slightly compared with 2016, where we employed 10,439 people. EMPLOYEE COMPOSITION The decline, caused mostly by retirement, was felt in Pupuk Indonesia strives to employ the ideal number of Pupuk Indonesia’s subsidiaries, such as PT Pupuk individuals, thus ensuring that every project is completed Kalimantan Timur’s loss of 149 people, PT Pupuk efficiently by competent individuals. We recognize Sriwidjaja Palembang’s 110 people, and PT Mega Eltra’s employees who have dedicated their best to Pupuk loss of 98 people. Indonesia. Our commitment is to provide a conducive working environment to allow our employees conduct Employee diversity in terms of gender, age, and education their duties in good spirits and grow together with the are expressed in the tables on the following pages. company.
PT Pupuk Indonesia (Persero) Sustainability Report 2017 65 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
EMPLOYEE BY EMPLOYMENT STATUS [GRI 102-8] The majority of our employees are full-time permanent employees with the Petrokimia Gresik employing the most at 3,226 people. Appointing employees to permanent status creates a retention effect as they can feel secure and enjoy benefits and facilities offered by the company.
Composition of Employees by Employment Status, 2016-2017
Company Permanent Contract Total
2016 2017 2016 2017 2016 2017
PT Pupuk Indonesia 186 219 30 30 216 249
PT Petrokimia Gresik 3,129 3226 637 635 3,001 3661
PT Pupuk Kujang 1,154 1135 168 164 2,318 1299
PT Pupuk Kalimantan Timur 2,150 2001 862 966 3,991 2967
PT Pupuk Iskandar Muda 656 627 403 403 1,557 1030
PT Pupuk Sriwidjaja Palembang 2,364 2254 649 649 1,305 2903
PT Rekayasa Industri 538 526 182 182 720 708
PT Mega Eltra 199 101 61 61 260 162
PT Pupuk Indonesia Logistik 24 26 9 8 33 34
PT Pupuk Indonesia Energi 24 49 5 5 29 54
PT Pupuk Indonesia Pangan 15 15 4 4 19 19
Total 10,439 10,179 3,010 3,107 13,449 13,286
Number of Employee by Employment Status, 2016-2017
10,439 10,179 3,010 3,107
Permanent Contract Employees 2016 2017
66 PT Pupuk Indonesia (Persero) Sustainability Report 2017 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
Number of Permanent Employees, 2013-2017 [GRI 102-8]
Company 2014 2015 2016 2017
PT Pupuk Indonesia 89 104 186 219
PT Petrokimia Gresik 3,251 3,198 3,129 3,226
PT Pupuk Kujang 1,183 1,175 1,154 1,135
PT Pupuk Kalimantan Timur 2,447 2,375 2,150 2001
PT Pupuk Iskandar Muda 972 675 656 627
PT Pupuk Sriwidjaja Palembang 2,435 2,434 2,364 2254
PT Rekayasa Industri 526 546 538 526
PT Mega Eltra 195 192 199 101
PT Pupuk Indonesia Logistik - 22 24 26
PT Pupuk Indonesia Energi - 18 24 49
PT Pupuk Indonesia Pangan - - 15 15
Total 11,098 10,739 10,439 10,179
Permanent Employees 2013-2017
11,256 11,098 10,739 10,439 10,179
2013 2014 2015 2016 2017
PT Pupuk Indonesia (Persero) Sustainability Report 2017 67 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
Permanent Employees by Gender, 2016-2017
Company 2015 2016 2017
Male Female Total Male Female Total Male Female Total
PT Pupuk Indonesia 75 29 104 134 52 186 158 61 219
PT Petrokimia Gresik 3092 106 3198 3.025 104 3129 3119 107 3226
PT Pupuk Kujang 1074 101 1175 1.055 99 1154 1038 97 1135
PT Pupuk Kalimantan 2214 161 2375 2.004 146 2150 1865 136 2001 Timur
PT Pupuk Iskandar 630 45 675 612 44 656 585 42 627 Muda
PT Pupuk Sriwidjaja 2210 224 2434 2.146 218 2364 2046 208 2254 Palembang
PT Rekayasa Industri 382 164 546 376 162 538 368 158 526
PT Mega Eltra 149 43 192 154 45 199 78 23 101
PT Pupuk Indonesia 4 18 22 4 20 24 4 22 26 Logistik
PT Pupuk Indonesia 13 5 18 17 7 24 35 14 49 Energi
PT Pupuk Indonesia 0 0 0 10 5 15 10 5 15 Pangan
RECRUITMENT [GRI 401-1] We understand that recruiting the right person for the right position the key to our success. To fill vacancies and meet demand for fresh talent, Pupuk Indonesia recruited 246 people in 2017. The figure was less by 18% compared with 2017, where we recruited 291 people.
New Recruits in Pupuk Indonesia Group, 2017
Location Jumlah Recruitment Grade
Head Office 32 Bachelor
Subsidiaries 214 Graduate, Diploma, and High School
Total 246
Recruitment in Pupuk Indonesia Group 2014-2017
Description 2014 2015 2016 2017
Pension 681 849 527 626
Death 42 24 19 21
Violation 6 0 0 0
Resign 72 51 16 31
Total 801 924 562 678
Turnover rate 7.22% 8.60% 5.23% 6.66%
68 PT Pupuk Indonesia (Persero) Sustainability Report 2017 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
EMPLOYEE BY AGE GROUP [GRI 405-1] To build a cohesive dynamic in our performance, Pupuk Indonesia recruited employees from various backgrounds and age groups. We combine the experienced, seasoned employees with youthful, young employees in accordance with their competence and skills. In 2017, a total of 7,001 employees, or 69%, is in the productive age group (under 50 years old). The number of employees in the above 50 age group in 2017 decreased compared with the previous year, mainly due to retirement. Indeed, the regeneration is warmly welcomed as it paved the way for new leaders and enabled the transfer of technology and skills to the younger age group.
Employees by Age Group, 2016-2017
Grade I Grade II Grade III Grade IV Grade V-VII Total Company 2016 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016 2017
PT Pupuk Indonesia 28 33 47 55 22 26 41 48 48 57 186 219
PT Petrokimia Gresik 30 32 77 65 205 226 792 806 2,025 2,097 3,129 3,226
PT Pupuk Kujang 17 11 54 57 147 148 303 295 633 624 1154 1135
PT Pupuk Kalimantan 39 40 120 120 285 260 646 600 1,060 980 2,150 2,001 Timur
PT Pupuk Iskandar 13 13 30 31 67 63 275 263 271 257 656 627 Muda
PT Pupuk Sriwidjaja 24 23 95 90 210 203 583 564 1,452 1,375 2,364 2,254 Palembang
PT Rekayasa Industri 13 11 32 32 22 21 162 158 309 304 538 526
PT Mega Eltra 7 4 33 17 17 9 46 23 96 48 199 101
PT Pupuk Indonesia 0 0 7 8 5 5 8 9 4 4 24 26 Logistik
PT Pupuk Indonesia 2 4 5 10 3 6 6 12 8 17 24 49 Energi
PT Pupuk Indonesia 4 4 1 1 3 3 6 6 1 1 15 15 Pangan
Jumlah 177 175 501 486 986 970 2,868 2,785 5,907 5,764 10,439 10,179
PT Pupuk Indonesia (Persero) Sustainability Report 2017 69 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
Permanent Employees by Age Group 2016 - 2017
4.000
3.500
3.000
2.500
2.000
1.500
1.000
500
0 >50 >45-50 >40-45 >35-40 >30-35 >25-30 s/d 25
2016 2017
PERMANENT EMPLOYEES BY EDUCATION LEVEL [GRI 405-1] Pupuk Indonesia employs various experts in its ranks to support its growth. We employ 434 individuals holding master’s (S2) and doctorate (S3) degrees. Nonetheless, we are also readily welcoming to employees at other education levels who are keen to contribute to the company.
Permanent Employees by Education Level 2016-2017
Graduate/ Bachelor Diploma High School Total Company Postgraduate 2016 2017 2016 2017 2016 2017 2016 2017 2016 2017
PT Pupuk Indonesia 54 57 119 148 10 11 3 3 186 219
PT Petrokimia Gresik 87 91 541 574 69 122 2,432 2,439 3,129 3,226
PT Pupuk Kujang 25 18 286 279 130 129 713 709 1,154 1,135
PT Pupuk Kalimantan Timur 76 75 424 419 208 209 1,442 1298 2,150 2,001
PT Pupuk Iskandar Muda 23 21 169 163 112 111 352 332 656 627
PT Pupuk Sriwidjaja Palembang 87 95 700 724 380 345 1,197 1,090 2,364 2254
PT Rekayasa Industri 56 55 413 403 69 68 0 0 538 528
PT Mega Eltra 10 9 101 71 19 9 69 12 199 101
PT Pupuk Indonesia Logistik 3 2 18 21 2 2 1 1 24 26
PT Pupuk Indonesia Energi 8 9 14 23 1 3 1 14 24 49
PT Pupuk Indonesia Pangan 2 2 12 12 0 0 1 1 15 15
Total 431 434 2,797 2,837 1,000 1,009 6,211 5899 10,439 10,179
70 PT Pupuk Indonesia (Persero) Sustainability Report 2017 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
Employees by Education Level, 2016-2017
3,211 2,899 100 109 2,797 2,837 431 434
SLTA D3 S1 S2/S3
2016 2017
Employee Composition by Grade, 2016-2017
Company Grade I Grade II Grade III Grade IV Grade V-VII Total
2016 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016 2017
PT Pupuk Indonesia 28 33 47 55 22 26 41 48 48 57 186 219
PT Petrokimia Gresik 30 32 77 65 205 226 792 807 2,025 2,098 3,129 3,227
PT Pupuk Kujang 17 11 54 57 147 148 303 295 633 625 1154 1136
PT Pupuk Kalimantan 39 40 120 120 285 260 646 600 1,060 981 2,150 2,002 Timur
PT Pupuk Iskandar 13 13 30 31 67 63 275 263 271 258 656 628 Muda
PT Pupuk Sriwidjaja 24 23 95 90 210 203 583 564 1,452 1376 2,364 2,255 Palembang
PT Rekayasa Industri 13 11 32 32 22 21 162 158 309 300 538 521
PT Mega Eltra 7 4 33 17 17 9 46 23 96 48 199 102
PT Pupuk Indonesia 0 0 7 8 5 5 8 9 4 4 24 26 Logistik
PT Pupuk Indonesia 2 4 5 10 3 6 6 12 8 16 24 49 Energi
PT Pupuk Indonesia 4 4 1 1 3 3 6 6 1 1 15 15 Pangan
Total 177 174 501 485 986 970 2,868 2785 5,907 5,765 10,439 10179
PT Pupuk Indonesia (Persero) Sustainability Report 2017 71 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
Employee Composition by Grade, 2016-2017
149 177 480 501 1,140 986 2,490 2,868 6,480 5,907
Grade I Grade II Grade III Grade IV Grade V
2016 2017
FREEDOM TO UNIONIZE One of the ways we foster work satisfaction is by building excellent and open communication channels for employees to voice their aspirations. To that end, Pupuk Indonesia established the Federation of Pupuk Indonesia Workers’ Union to allow our employees to have their voices heard.
SKILLS DEVELOPMENT [GRI 404-1, GRI 404-2] The most important asset for a company is not technology, equipment, or information, but the very individuals who wield that technology, operate that equipment, and process that information. As such, Pupuk Indonesia are always improving the skills and competence of our employees and encouraging them to take part in trainings held continuously throughout 2017. To develop this competence-based human capital, Pupuk Indonesia and its subsidiaries have held trainings and courses for every level of employees. In 2017, the total mandays training was 227,368 work days. The following table is overall training days held in Pupuk Indonesia’s subsidiaries.
Achievements of Training Mandays
Mandays Target 2017 Realization up to December 2017 Percentage from Target
PT Pupuk Indonesia (Persero) 2,590 4,240 163.71%
(Persero) & Subsidiaries 233,871 233,128 95.41%
72 PT Pupuk Indonesia (Persero) Sustainability Report 2017 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
Mandays Trainings Company 2017 Target Realization up to December 2017 Percentage from Target PT Pupuk Indonesia 2,590 4,240 163.71% PT Petrokimia Gresik 155,412 144,511 92.99% PT Pupuk Kujang 9,389 10,769 114.70% PT Pupuk Kalimantan Timur 40,150 40,373 100.56% PT Pupuk Iskandar Muda 9,632 10,492 108.93% PT Pupuk Sriwidjaja Palembang 12,951 10,151 78.38% PT Rekayasa Industri 5,180 4,917 94.92% PT Mega Eltra 830 435 52.41% PT Pupuk Indonesia Logistik 159 209 131.45% PT Pupuk Indonesia Energi 84 1,209 1438.10% PT Pupuk Indonesia Pangan 84 63 75.00% Total 236,461 227,368 96.15%
IN-HOUSE TRAINING. In-house trainings are highly COACHING AND COUNSELLING. Coaching beneficial as it tackles everyday challenges and issues. and counselling are effective strategies to improve Participants can interact and share specific information productivity by analyzing the challenges faced by our regarding their duties. Topics that have been discussed employees and offering on-point solutions for their during in-house trainings were, among others: Energy problems. The two-pronged strategy was proven effective Planning Training, KPKU Assessor Training, SNI in improving employee morale and motivation. ISO31000:2011 Training & Certification, Process Safety Management Training, Anti-fraud Training, Leadership SOFT SKILLS TRAINING. Soft skills are skills that relate Development Program, Training Of Trainers, Turnaround to how a person carries herself towards others, such as Master Class Workshop, Problem Solving & Decision social and communication, character, optimism, and Making, and PKBL Accounting Guideline Training. initiative. The skills are indeed important, but often overlooked by employers. Recognizing its importance, CERTIFICATIONS. Pupuk Indonesia is committed to Pupuk Indonesia held training sessions to develop such ensure that its employees have professionally-recognized skills through sessions such as Leadership Development skills. To that end, we have held certification trainings, Program, Leader as Coach, Problem Solving, and especially for employees who work with urea, ammonia, Communication Skills. utility, and maintenance. Furthermore, the certifications are aimed to foster a culture of occupational health LEARNING ASSIGNMENT. As part of our looking- and safety. Our commitment is reflected through forward vision and the desire to improve the quality and establishment of the Professional Certification Institute professionalism of our employees, Pupuk Indonesia offers (LSP) under Pupuk Indonesia’s umbrella. its employees temporary leave to study either domestic or abroad. Learning assignments is offered for disciplines in OUTPLANT TRAINING. We often send our employees oil & gas management, marketing, soil science, chemical and management to participate in external trainings in engineering, business administration, instrumentation, specialist areas such as gasification, leadership, marketing, and agriculture. In 2017, a total of 33 employees went fertilizer, research, ISO 31000:2011 Certification, law, SAP, on study leave; 24 of whom studied in Indonesia and 11 and human resources. The external trainings enable our abroad. The following table is a breakdown of learning individuals to observe current trends and updates, in assignments in Pupuk Indonesia: addition to building professional, collegial networks.
PT Pupuk Indonesia (Persero) Sustainability Report 2017 73 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
Number of Recipient Task Force Workers 2017 Learning Assignment Company Total domestic overseas PT Pupuk Indonesia 5 1 6 PT Petrokimia Gresik 1 3 4 PT Pupuk Kujang 9 2 11 PT Pupuk Kalimantan Timur 4 2 6 PT Pupuk Iskandar Muda 0 0 0 PT Pupuk Sriwidjaja Palembang 4 1 5 PT Rekayasa Industri 1 0 1 Total 24 9 33
In 2017, Pupuk Indonesia has invested a total of Rp101,226,899,126 in the studies and trainings of its employees. The figure was a 13.9% increase compared with Rp88,849,125,023 invested in 2016.
Human Resources Development Costs 2014-2017 (in million rupiah)
Description 2014 2015 2016 2017
Realization of Employee Development 42.77 85.40 88.80 101.23
Pupuk Indoonesia do a performance management on all employees of Pupuk Indonesia and its subsidiaries using Performance Management System (SMK) which is objective and comprehensive. The results of this assessment are discussed with the workers as a further basis for personal development and employee career improvement. The results of this assessment are also used to determine the advanced training required by the employee, in addition to determining the rotation, transfer or promotion (RMP). Each Pupuk Indonesia worker is assessed by: [GRI 404-3]
a. Soft Competency Assessment 360o. Each worker is judged by their boss, two co-workers, and self-assessment. The results of this assessment are discussed with the boss, as feedback that is beneficial to the employee. b. Performance assessment using KPI (Key Performance Indicator), ie targets that have been established and agreed by employees within a period of one year. Further assessments are made within three years, as a follow-up evaluation for employees to obtain promotion or position movement.
WORKPLACE EQUALITY, DIVERSITY, AND OPPORTUNITY [GRI 405-1] Pupuk Indonesia is committed to provide equal opportunities for qualified applicants without regard for sex, ethnicity, religion, and race. Diversity offers a unique sense of strength which Pupuk Indonesia protects closely. The non- discrimination policy is enforced in every aspect, such as is in matters of salaries and remuneration. Pupuk Indonesia does not discriminate basic salaries and allowances offered to its male and female employees. We calculate an employee’s basic salary and remuneration against her performance and position. Thus, the ratio of basic wages and remuneration for our female and male employees is 1:1. [GRI 405-2]
74 PT Pupuk Indonesia (Persero) Sustainability Report 2017 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
The non-discrimination policy is enforced at every We promote religious diversity by facilitating our step of employment, from initial recruitment to employees to observe their religious beliefs. At various training, remuneration, and promotion. We offer equal Pupuk Indonesia sites, we have prepared facilities for opportunities to male and female employees to grow worship and celebrate religious festivities as a team. with and contribute to the company. Nonetheless, due to the inherent nature of the manufacturing sector, male In 2017, there has been no incidents or complaints of employees outnumber female employees. discrimination against Pupuk Indonesia. [GRI 406-1]
In terms of employment opportunity, Pupuk Indonesia extends its welcome to employees working in our subsidiaries. We show our token of appreciation for locals by offering higher salaries than the statutory minimum, wherever we operate. [GRI 202-1]
Employee Profile by Gender in Pupuk Indonesia Group 2014-2017
Description 2014 2015 2016 2017
Female 879 867 902 916
Male 10,219 9,872 9,537 9,263
Total 11,098 10,739 10,439 10,179
PT Pupuk Indonesia (Persero) Sustainability Report 2017 75 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
EMPLOYEE BENEFIT [GRI 401-2] • Working facilities allowance are facilities provided to enhance an employee’s work, such as uniforms, shoes, Pupuk Indonesia shows concern for its employees’ well- computers being by offering a competitive benefit package. Good • Religious Holiday Allowance (THR) is provided to remuneration and benefit packages have been proven assist employees celebrate religious holidays. to attract potential high-talents and retain employees • Leave allowance is given to employees who have with proven track-records. Pupuk Indonesia fringe worked at least 1 (one) year in the company. benefits are prepared not only with due consideration • Long-service Leave is provided to employees who to our employees, but also to their families. The well- have worked for a certain period at the company. being program is founded on the principles of fairness, • BPJS Ketenagakerjaan is protection provided appropriateness, and compliance to prevailing legislation, to employees, consisting of Occupational Injury in particular Law No. 13 Year 2013 on Employment. Insurance (JKK), Old-age Savings (JHT), Life Insurance (JKM), and Pension Funds (JP). We offer the following in our well-being program: • Bereavement assistance is provided to employees and • Pupuk Indonesia’s basic salary is highly competitive. their employees in case of accidents. The minimum salaries provided by Pupuk Indonesia’s • Pension fund program is prepared by the company subsidiaries exceed the statutory minimum pay set by for employees nearing retirement age. This program regional governments. is described further in the “Retirement Preparations” • Position allowances are provided for employees section below. who undertake certain duties or responsibilities in accordance with their functional or structural positions.
Benefit Packages by Employment Status [GRI 401-2]
Benefits Form Permanent Employee Contract Worker
Basic Salary √ √
Position Allowance √ -
Working Facilities Allowance √ √
Holiday Allowance √ √
Health Program √ √
Leave Allowance √ √
Long Leave Allowance √ -
* For contract workers who work more than one year. All permanent employees and contracts are covered by health care.
76 PT Pupuk Indonesia (Persero) Sustainability Report 2017 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
Pupuk Indonesia does not discriminate benefits that Pupuk Indonesia policy mandates a retirement age of it offers to permanent and non-permanent employees. 56 years old. Prior to retirement, Pupuk Indonesia holds Both receive remuneration, wages, and allowances in a pre-retirement seminar for our employees and their accordance with their position and competence. spouses. The seminar discusses issues that are faced by retirees, such as: For expecting mothers, Pupuk Indonesia offers maternity • Mental preparation prior to retirement leave for both childbirth and miscarriage, in accordance • Financial management after retirement with the provisions of Law No 13 Year 2013, Corporate • Entrepreneurship training Policy, and Collective Bargaining Agreement. Pupuk • Life views and challenges after retirement Indonesia also offers a three month maternity leave for The seminars are led by experts in their respective fields. childbirth whereas miscarriages are offered the right to Thus far, participants of the retirement preparation paid leave for 45 calendar days. program have expressed positive feedback. Pupuk Indonesia prepares the following financial package for its retiring employees: RETIREMENT PREPARATIONS • Defined-contribution Pension Program (PPIP), a [GRI 404-2] retirement savings contributed and the remainder contributed by the company. As a token of gratitude for the contributions of employees • BPJS Ketenagakerjaan’s program consisting of Old nearing retirement, Pupuk Indonesia has prepared a Age Guarantee and Pension Guarantee. comprehensive retirement package. Furthermore, Pupuk
Indonesia provides a competitive retirement allowance in the hopes that retirees can enjoy their later years in comfort following their productive years with Pupuk Indonesia. The retirement package consists of a pre- retirement mental preparation training and a financial package.
PT Pupuk Indonesia (Persero) Sustainability Report 2017 77 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
DEVELOPING COMMUNITY WELFARE
78 PT Pupuk Indonesia (Persero) Sustainability Report 2017 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
• Social Responsibility Program of • Testimony of Pupuk Indonesia Pupuk Indonesia Beneficiaries • Partnership Program • Awards • Community Development Program
Community welfare and environment conservation are two fields of concern for Pupuk Indonesia. This is because we aware that this company grows in parallel with the growth and support of the community as well as a well- preserved environment. We commit to the development of Pupuk Indonesia as a company that cares about and prioritizes sustainability principles while remaining profit oriented.
“People, planet, profit” are our focus as a company which decided by each Pupuk Indonesia subsidiary, bearing in accepts and bears its responsibility. Not only directed mind that community conditions and needs are different to gaining profits, Puuk Indonesia has also formulated from one location to another. strategic policies to increase the welfare of marginal communities. We believe that if the Company does not Pupuk Indonesia CSR is aiming to meet four strategic take these issues seriously, it will not survice in the long goals as follows: run. That is why we orient well-designed programs in the 1. Nature-related. Pupuk Indonesia strives to conduct fields of social and community affairs. greening and environmental conservation activities. 2. Welfare-related. Pupuk Indonesia strives to conduct Pupuk Indonesia’s social responsibility policies and activities that can improve both internal and external programs are mainly stipulated in the Code of Conduct welfare. on Society and Environment. The Company also refers 3. Community-related. Pupuk Indonesia strives to to Minister of State-Owned Enterprises (SOE) Regulation engage in activities that have impacts that improve No. PER-09/MBU/07/2015 dated 3 July 2015 on the the community surrounding its operation locations. Partnership and Community Development Program of 4. Economy-related. Pupuk Indonesia always strives to SOEs, and its amendments No. PER-03/MBU/12/2016 generate profits to support the state economy dated 16 December 2016 and PER-02/MBU/7/2017 dated 5 July 2017. Meanwhile, the application procedures are to be
PT Pupuk Indonesia (Persero) Sustainability Report 2017 79 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
SOCIAL RESPONSIBILITY To demonstrate its commitment social responsibility, PROGRAM OF PUPUK INDONESIA Pupuk Indonesia established a Partnership and Community Development Program (PKBL) Division, [GRI 413-1] assigned to execute, supervise and evaluate PKBL and We aware that the communities surrounding the CSR program application. Pupuk Indonesia’s entities also Company’s operational areas are not an external party, have their respective special unit for effective application but rather a part of a our large family that have also played of PKBL and CSR, as detailed below: a role in Pupuk Indonesia’s operational success. For that 1. CSR Unit of PT Petrokimia Gresik (Gresik, East Java) reason, we seriously dedicate our attention to our social 2. PKBL Unit of PT Pupuk Sriwidjaja Palembang responsibility programs. (Palembang, South Sumatera) 3. PKBL Unit of PT Pupuk Kujang (Kujang Cikampek, The objective of Pupuk Indonesia’s corporate social West Java) responsibility (CSR) program is to improve the 4. PKBL Unit of PT Pupuk Iskandar Muda (Lhokseumawe, surrounding communities’ welfare, either through North Aceh, Aceh) providing employment or developing the local economy. 5. CSR Unit of PT Pupuk Kalimantan Timur (Bontang, It is expected that through this approach, the surrounding East Kalimantan) communities will receive positive impact from Pupuk 6. PKBL & Comdev Unit of PT Rekayasa Industri (East Indonesia’s business activities. Kalibata, South Jakarta).
Pupuk Indonesia Group PKBL Fund Distribution 2014-2017 (in million rupiah)
Company 2014 2015 2016 2017
PT Pupuk Sriwijaya Palembang 6,867 12,962 44,307 38,542
PT Petrokimia Gresik 65,478 67,275 64,206 74,635
PT Pupuk Kujang 31,022 31,667 31,645 29,698
PT Pupuk Kalimantan Timur 29,661 20,074 21,873 32,826
PT Pupuk Iskandar Muda 3,766 1,597 925 1,569
PT Rekayasa Industri 7,563 5,141 5,319 5,590
The objective of Pupuk Indonesia’s social responsibility program is to improve the welfare of surrounding communities, both through employment and local economic development.
80 PT Pupuk Indonesia (Persero) Sustainability Report 2017 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
Pupuk Indonesia PKBL funds realized in 2017 amounted to Rp182.86 billion, up 9% from that in 2017 of Rp167.97million. A large portion of PKBL funds were allocated for Partnership Programs, amounting to Rp128.57 million, aimed at increasing the well-being of the community through employment and revenue increases. The remaining Rp54.29 million was realized to finance community development programs.
Pupuk Indonesia Group PKBL Fund Distribution 2013-2017 (in million Rupiah)
2014 2015 2016 2017
PKBL 144.36 138.75 167.97 182.86
PKBL Funding by Entity (in million Rupiah)
2014 2015 2016 2017
Partnership Program 114,204 107,182 133,274 128,568
Community Development 30,153 31,563 34,700 54,293
Total 144,357 138,745 167,974 182,861
Social Performance (in billion Rupiah)
2015 2016 2017
Partnership and Community 138.75 167.97 182.86 Development Program Financing
CSR Financing Realization 30.93 96.30 66.58
Customer Satisfaction Index 2016 Customer Satisfaction Index 2016 4.24 4.19 4.43 (commerce)
Social Investment Fund Distribution of Pupuk Indonesia Group 2014-2017 (in million Rupiah)
Investment Activity Type 2014 2015 2016 2017
Partnership Program (PK) 114,204 107,182 133,274 128,568
Community Development (BL) 30,153 31,563 34,700 54,293 Program
CSR Program - 30,930 96,304 66,575
Total 144,357 169,675 264,278 249,436
PT Pupuk Indonesia (Persero) Sustainability Report 2017 81 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work EXCELLENT TOP -NOTCH GOVERNANCE economies RESOURCES OF WELFARE Atmosphere ENVIRONMENTAL PRODUCTS PUPUK INDONESIA PERFORMANCE
PARTNERSHIP PROGRAM The loans are channeled to partners in the partnership programs as it is deemed that they can not access bank- One objective of the partnership programs is to develop sourced capital, as under the un-bankable status. These small-scalled entrepreneurs in expanding employment loans had a very low interest rate, i.e. 6% flat per year. and business opportunities, building and encouraging However, since the government regulation number entrepreneurs in various sectors. PER-02/MBU/7/2017 has been put into effect on July 5, The strategies and partnership programs of Pupuk 2017 the interest became 3% per year of the initial loan Indonesia include: balance for partners with new loans. Furthermore, Pupuk 1. Developing Micro-, Small- and Medium-Scalled Indonesia provides capacity building programs free of Enterprises to become independent and solid charge in the forms of training, promotion of business businesses. output and provision of tools or equipment for business 2. Providing soft loans to create employment start ups. opportunity and social independence. 3. Providing skills training to locals so that they can The partnership program loan funds are sourced from earn more revenue and consequently improve their loan repayment funds which are recycled back into use. In livelihoods. 2017, the partnership program funds disbursed amounted to Rp 128,568 million, comprising small-scaled business loans amounting to Rp122,000 million and partnership development funds of Rp6,562 million.
Partnership Program Funding Distribution 2017 (in million Rupiah) Small-scaled business loans 122,005
Partnership development funds 6,562
Total 128,568
There are 1,422 development partners throughout the operation locations of subsidiaries, where the agriculture sector accounts for the largest loan disbursement area.
Partnership Funds Distribution of Pupuk Indonesia Sector-Wise (in million Rupiah)
No Company Development Partner Loan Amount
1 Industry 63 3,393
2 Trading 442 20,208
3 Agriculture 477 64,662
4 Plantation 75 2,804
5 Fishery 29 2,579
6 Farming 134 17,609
7 Services 202 10,751
Total 1,422 122,005
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Total of Pupuk Indonesia Group Development Partners Sector-Wise
No Company 2015 2016 2017
1 Industry 98 109 63
2 Trade 410 395 442
3 Agriculture 485 594 477
4 Plantation 26 42 75
5 Fishery 31 56 29
6 Farming 180 268 134
7 Service 148 248 202
Total 1,379 1,712 1,422
Total of Pupuk Indonesia Group Development Partners
No Company 2015 2016 2017
1 PT Petrokimia Gresik 635 544 529
2 PT Pupuk Kujang 164 152 144
3 PT Pupuk Kalimantan Timur 352 369 331
4 PT Pupuk Iskandar Muda 23 28 25
PT Pupuk Sriwidjaja 5 Palembang 128 547 335
6 PT Rekayasa Industri 77 72 58
Total 1,379 1,712 1,422
As of the commencement of development partnership program in each entity, by year end 2017 total development partners over the years number 58,197, distributed in subsidiary operational locations with details as follows:
Accumulated Number of Pupuk Indonesia Group’s Development Partners as of 2017
No Company s.d. 2016 2017 Total s.d. 2017
1 PT Petrokimia Gresik 7,335 529 7,864
2 PT Pupuk Kujang 4,537 144 4,681
3 PT Pupuk Kalimantan Timur 27,639 331 27,700
4 PT Pupuk Iskandar Muda 4,128 25 4,153
PT Pupuk Sriwidjaja 5 Palembang 11,476 335 11,811
6 PT Rekayasa Industri 1,930 58 1,988
Total 56,775 1,422 58,197
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Community Development education quality for the surrounding communities. This Program is based on the view that education is one of the essential issues in the improvement of the community welfare. The Community Development Program embodies the That is why from 2007 to 2016, Pupuk Kalimantan Timur Company’s social responsibility of improving the social conducted the PKTPP scholarship program addressed to condition of communities living in Pupuk Indonesia the communities in East Kalimantan. Group’s surrounding areas. Funds distributed include grants in eight sectors as follows: The beneficiaries of this program are basically senior high school students of Bontang and East Kalimantan 1. Assistance for natural disaster victims; with good academic records, yet not able to afford the 2. Education and training assistance; tuition. The scholarships fully cover the enrollment 3. Health improvement assistance; fee of university up to graduation; this is aimed so that 4. Assistance for infrastructure and public facilities the students can obtain undergraduate degrees and development eventually, find a job to improve the family’s livelihood. 5. Religious facility assistance; 6. Environmental conservation assistance; The objectives of PKTPP implementation are: 7. Social assistance in the form of poverty eradication; 1. Improving human resources quality of young people in East Kalimantan, particularly Bontang (education Community development funding distribution in 2017 sector) amounted to Rp54,293 million, of which the largest 2. Providing opportunity for students with good portion was allocated to education and training as well as academic records to be able to continue their poverty eradication. education to university.
Community Development Fund Distribution 2016-2017 (in million Rupiah) No Usage of funds 2016 2017 Percentage 1 Natural Disaster Victims 2,329 0.533 (77%) 2 Education/Training 9,611 11,210 17% 3 Health Improvement 2,678 3,773 41% 4 Infrastructure/Public Facilities 5,122 9,994 95% 5 Religious Facilities 5,810 7,789 34% 6 Environmental Conservation 1,220 0,925 (24%) 7 Poverty Eradication 4,106 20,069 389% 8 Partnership Development 3,823 - 0% Total 34,700 54,293 56%
Social Community Responsibility Program 3. Fostering moral ties between Pupuk Kaltim and the In 2017, PI Group conducted a number of activities related communities surrounding the Company’s operational to economic and social community empowerment in areas. accordance with the CSR program pillars of PI Group, 4. As a concrete approach of Pupuk Kaltim’s support, to including: create positive image in the eyes of the communities.
Pupuk Kalimantan Timur Peduli Pendidikan Program Pupuk Kaltim Peduli Pendidikan (PKTPP) is a manifestation of the Company’s concern with improving
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Total Scholarship Program Assistance of PKTPP No Total Students University Total Assistance 1 14 Universitas Gadjah Mada Rp85,525,148 2 1 Institut Teknologi Bandung Rp14,602,768 3 4 Institut Pertanian Bogor Rp83,570,291 4 8 Institut Teknologi Sepuluh Nopember Rp105,058,126 5 14 Universitas Airlangga Rp165,049,044 6 4 Universitas Padjajaran Rp78,502,777 7 4 STEI Tazkia Bogor Rp80,745,000 8 3 Institut Teknologi Kalimantan Rp26,510,000 9 1 Universitas Mulawarman Rp8,000,000 Total Rp647,563,154
Petro Scholarship (Bestro) - Cost for 8 students selected in 2016 totaled Rp191 Since 2012, Petrokimia Gresik has played an active role million in distributing scholarships for senior high school and - Cost and university enrollment fee of 12 students undergraduate students. The scholarships are given to selected in 2017 totaled Rp161.7 million [ed. Living the local people of Gresik and have assisted minimum cost is only food and apartment money. The title is 200 promising students who resided in the Ring 1 area to “Full Scholarship”. This needs addressing.] pursue their education at higher levels. 2. Full Cover Senior High School (SMA) Scholarship The senior high school scholarship distribution In the first year of the Bestro program, the Company amounting to Rp 1.08 billion is detailed as follows: provided full coverage scholarships to graduated senior - Cost for 47 students selected in 2014 amounting high school students to continue education to the tertiary to Rp211.5 million. level. The financing covers fees of public university - Cost for 50 students selected in 2015 amounting selection (SNMPTN), registration fee, education to Rp487.5 million. contribution fee, pocket money, accomodation cost, - Cost for 25 students selected in 2016 amounting tuition, school operational costs and cost to return to to Rp225 million. home. - Cost for 25 students selected in 2017 amounting to Rp162.5 million. The scholarship is provided in stages every year. The cost is directly transferred to Bestro recipient’s bank accounts, Kampung Sehat (“Healthy Kampong”) Petrokimia Gresik with clear details. The Company has set clear criteria for reference of the selection team in reviewing documents. “Kampung Sehat” is one of the regular programs that The selected scholarship recipients are those deemed demonstrate the Company’s concern for the surrounding having above-average academic achievement and having communities. In the provision of health assistance, PT the targeted economic condition. Petrokimia Gresik cooperates with Petrokimia Gresik 1. Full Cover Undergraduate (S1) Scholarship Hospital. Free medicines are provided monthly to the The undergraduate scholarship distribution residents of eight villages in Ring 1 are the Company, amounting to Rp1.92 billion is detailed as follows: - Cost for 29 students selected in 2014 totaled Rp816.3 million - Cost for 29 students selected in 2015 totaled Rp758.3 million
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namely Ngipik, Sukorame, Karangturi, Karangpoh, their limitations. In addition to salary to participants Tlogopojok, Kroman, Lumpur, Roomo, Trate, Kebungson in the productive phase, it is expected that business and Sukomulyo, as well as for nine villages in Ring 2.. activities in Inkubator Bisnis Permata Bunda will be able to become additional financing sources for the The Kampung Sehat 2017 activity distributed Rp679 operational of the Permata Bunda SLB (Special School), million for health assistance for communities in the Ring the majority students of which are qualified as coming 1 area. from “pre-prosperous families”.
Patient Visit Data Month Number of Villages Number of Patients January 201717 11 807 Feb 2017 11 745 March 2017 11 828 April 2017 11 732 May 2017 11 695 June 2017 11 846 July 2017 13 871 August 2017 11 683 September 2017 11 690 October 2017 11 783 November 2017 11 650 Decembe 2017 11 836
Number of Patients 9,166
Inkubator Bisnis Permata Bunda Malahing Village Program Inkubator Bisnis Permata Bunda (Women’s Business A village situated over-looking the sea nearby Bontang Incubator Program) facilitates children with special City did not have any special attraction; now it possesses needs to prepare them for independent life in the future. a unique charm that leads to a better hope. Malahing The program implemented under Inkubator Bisnis village is home to 52 families, whose livelihood had been Permata Bunda is based on Sustainable Entrepreneurship far from the government’s or the Company concern. Program for Those with Disabilities, namely continuous In those days, the children had difficulties to access training of entrepreneurship skills. Inkubator Bisnis surrounding schools as the facilities and infrastructure Permata Bunda does not only enable children with were insufficient, and the locals’ knowledge and work special needs to earn livelihoods by working, it also, skills were limited. with an integrated approach, empowers them to be able to maximize their potentials to be able to be creative by PT Pupuk Kaltim (PKT) came in with its Partnership doing entrepreneurship. The goals of Inkubator Bisnis Program and Environmental Development (PKBL) Permata Bunda program are that these children become Division and is striving to bring changes to Malahing independent and to make the children more acceptable Village, to become a place where the locals would have a in community’s social life. These are realized through a better social and economic life. productivity and creativity-based approach, so that the communities no longer see children with special needs remaining in a marginal position, or focusing only on
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From 2014 until present, PT Pupuk Kaltim, coordinated Apart from that, Kampung Hortikultura Kebumen with the local government and has been actively involved Palembang, located at the heart of Palembang City, the community to understand the challenges and needs preserves the natural resources and contributes to a they face. healthy environment. Activities in Kampung Hortikultura Kebumen Palembangmay are regarded as a form of A variety of infrastructure development assistance projects Urban Farming that balances the availability of healthy were delivered by Pupuk Kalimantan Timur. Starting from food. Besides, the activities have helped the Palembang assistance for SD (primary school) YPPI Malahing building habitants’ economy, with the 3E-based concept: ecology, renovation, school equipment, drying of seaweed, village education and economy. gateway, garbage drum and seedling provision, floating deck, and public toilet, to name just a few. Bumn Hadir untuk Negeri For the “SOE Success For the Country” 2017 program Activities of community empowerment such as training in Jakarta Province, PT Pupuk Indonesia was trusted for capacity building have been organized. These include to hold the position as Chief State-owned enterprise training in seaweed cultivation, repair of vessel machinery, (PIC); the four Co-PICs are PT Jakarta Industrial Estate culinary skills to process and package seaweed, sewing, Pulogadung, PT Kawasan Berikat Nusantara (Persero), entrepreneurship, online-based marketing and training PT Perusahaan Pengelola Aset (Persero) and PT Sarinah for obtaining a household food industry certificate (Persero). The funds realized totaled Rp4,766 million, with number. Out of these programs, the locals stopped seeing implementation in four activities as follows: their life individually, but rather as communal living. • Republic of Indonesia Independence Day Commemoration sponsoring the flag ceremony In 2017, the Better Living in Malahing program achieved • Healthy Walk of 5 Km the first place in national-level CSR Awards category of • Veteran House Renovation for 48 homes social initiative organized by CSR Indonesia Magazine • Student exchange for 20 senior high schools and and Meprindo Communications. Better Living in special schools from East Kalimantan to Jakarta. Malahing is also one of the programs that brought PT Pupuk Kaltim to achieve “Proper Emas” awards in Bumn Hadir di Kampus the Proper Awards Conferring 2017 by the Ministry of PT Pupuk Indonesia collaborated in synergy with other Forestry and the Environment. state-owned enterprises (SOEs) in organising the “SOE Success on Campus” activity on October 28, 2017 at Kampung Hortikultura of Pusri Palembang Sepuluh Nopember Technology Institute (ITS) Surabaya. “Kampung Hortikultura”, or Holticultural Village, covers This activity was aimed at providing an overview to the two sub-districts, nine local districts and 26 neighborhood academic circles regarding national economic condition associations, with 377 beneficiaries, leading to the and SOEs’ strategic roles in the development of the formation of five farming groups comprising 208 people. national economy; and to bridge the SOEs and public This program contributes to food security as the locals universities who have professional human resources. The can produce their own food and even sell it to other number of participants was 1,732 people. In the event, communities. Pupuk Indonesia provided CSR assistance for Training Center of ITS Campus Surabaya amounting to Rp500 Fresh vegetables and fruits produced in Kampung million and scholarship assistance amounting[ed. If this Hortikultura have twice the vitamin and micro-nutrition amount is part of the above scholarship detailed money, compared to the products sold at supermarkets at the same this should be stated here.] to Rp1,878 million from Pupuk prices. The food resulted from Kampung Hortikultura Kaltim and Rp417 million from PT Petrokimia Gresik. Kebumen Palembang is also proven safer, compared to industrial agriculture products, which undergo long travel to reach the market in the cities.
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TESTIMONY OF PKBL PUPUK INDONESIA BENEFICIARIES
Partnership Program
Mrs. Napsiyah, Amplang Aiko, Development Partner of Pupuk Kaltim I can live from this amplang business, thanks to the PKBL assistance of Pupuk Kalimantan Timur. The company has paid attention to me as a Development Partner situated in its buffer zone. Thank you Pupuk Kalimantan Timur.
Mrs. Sri Rahayu, from “Tondo Roso” chips becoming goat farmer, development partner of Pupuk Kaltim At first I didn’t have any idea of developing a business; but by becoming a Development Partner of PT Pupuk Kaltim I can finally have the capacity. Thanks to PT Pupuk Kaltim who has supported by providing work capital loans, training and production equipment assistance.
Mrs. Painah, batik Sari Kenongo, development partner of Petrokimia Gresik Due to work capital loans from PT Petrokimia Gresik, with relatively longer period of repayment and affordable administration fee, I gain more profits. In addition, I received support in the training of financial management, production, intellectual property rights and e-commerce for Development Partner, also invited to participate in exhibitions both local and national level.
Intan Sari, Intan Songket Mitra Binaan Pusri Palembang The assistance funds helped us a lot in increasing the number of fabric produced and marketing areas
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Nasir Laka’da, Chief of RT 30 Malahing We the villagers of Kampung Malahing, living directly on top of the sea, used to only think of how we can feed ourselves to survive. But with the presence of PT Pupuk Kalimantan Timur’s PKBL program, we have been substantially assisted. We have received significant public facilities and broadening of knowledge so that we may develop ourselves with it.
Siti Muzayah, Ketua Kelompok Kampung Holtikultura Kebumen From the aspect of CSR, the assistance distribution program of PT Pupuk Sriwidjaja Palembang for the residents of Kelurahan 2 Ilir Palembang for building Kampung Hortikultura is beneficial. CSR is a part of corporate responsibility which consists of social, economic and environmental aspects. As a form of community empowerment, this activity increases revenues for our households.
Ngipik Headman, Kampung Sehat Kampung Sehat (Healthy Village) is very much needed by the communities living near the company, particularly in terms of medical treatment. Some examples of diseases that the habitants suffer from are acute upper respiratory tract infections and itches. Yet, these health problems can be addressed by Petrokimia Gresik. With the existence of free medical treatment on a routine basis, the locals can get to know the condition of their health and treat the disease suffered. It is expected that this activity will continue and be improved.
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AWARDS Not only the communities that benefit from CSR programs convey their appreciation to Pupuk Indonesia, but also the government, the media and the general public. We could not have achieved these awards without a good cooperation between Pupuk Indonesia People and the many groups within the community. Therefore, Pupuk Indonesia would like to express a thank you for their recognition of Pupuk Indonesia.
No Company Awards Date Organization Location Keterangan
1 PT Pupuk Sriwidjaja UNS Small 14-Jul-17 UNS Research SEBELAS PKBL Implementing Agency Palembang Medium and Community MARET The Best MSME Developer Enterprise’s Service Institution UNIVERSITY, (SME’S) Award and Ministry of Solo 2017 Cooperative & MSMEs
2 PT Pupuk Indonesia TOP CSR 05-Apr-17 Majalah Business Balai Kartini, TOP CSR Improvement (Persero) News Indonesia Jakarta 2017 and TOP Leader CSR Commitment Awards
PT Petrokimia TOP CSR on Nawacita 7: Gresik Regeneration Award
PT Pupuk Sriwidjaja TOP CSR 2017 on Fertilizer Palembang Sector Award
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No Company Awards Date Organization Location Keterangan
3 PT Pupuk Kaltim CSR Award 23-Feb-17 MEPRINDO (Media Ballroom Golf 2nd place for Cipta Guna Pribumi Indonesia) Pondok Indah, Sehati Category, 3rd place Jakarta for Cipta Karsa Mandiri Category, 1st place for Reka Karsa Sosial Category, 1st place for Didaktika Pratama Unggul Category, 1st place for Daya Karsa Pratama Category, 1st place for Karsa Budaya Prima Category
4 PT Pupuk Kaltim Proper Daerah 13-Jun-17 Pemprov. Kalimantan Gedung Proper Daerah Tingkat Emas Timur Olah Bebaya, Samarinda
5 PT Pupuk Kaltim ANRI Award 17-Agt-17 ANRI Hotel Mercure, 1st and 3rd place of Arsiparis Ancol - Jakarta Teladan Nasional Non-PNS
6 PT Pupuk Kaltim Anugerah Proper 18-Dec-17 Ministry of Forestry Vice President “Gold” Proper Title 2017 Award and the Environment Palace
7 PT Petrokimia Nusantara CSR 06-Sep-17 The La Tofi School of Hotel Awards in 3 Categories: Gresik CSR Indonesia Community Economy Kempinski, Elevation, Community Jakarta Education Level Improvement, Community Health Quality Improvement
8 PT Petrokimia Indonesia’s Best 23-Aug-17 Indonesian Organised by: Economic Gresik SOE Subsidiary Embassy in Review Magazine, Perbanas 2017 Singapore Institute, IPMI International Business School, Daya Makara UI, Indonesia-Asia Institute, Ideku Group
9 PT Petrokimia Anugerah Proper 18-Dec-17 Ministry of Forestry Vice President “Green” Proper Title Gresik 2017 Award and the Environment Palace
10 PT Petrokimia Green Industry 21-Dec-17 Ministry of Industry Gedung Level-5 Green Industry Gresik Award Kemenperin
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ATTAINING A HEALTHY WORK ATMOSPHERE
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• Occupational Health and Safety • Contractors and Occupational Safety • Safe Working Hours • Ohs Training and Meetings • OHS Targets • Healthcare for Employees • Employee Representation in Ohs Issue
Our objective is creating a healthy, safe and conducive work atmosphere. The highest standards of occupational health and safety are necessary to support company performance, reduce unnecessary loses and protect the Company’s most valuable asset - its workers.
Every type of business is exposed to risks. Manufacturing OCCUPATIONAL HEALTH AND companies, including Pupuk Indonesia, are particularly SAFETY exposed to risks, as the business involves chemical Most of accidents during work are due to a human processing and machinery. We are committed to factor. For this reason, Pupuk Indonesia upholds high maintaining a healthy and safe work environment for standards of Occupational Health and Safety (OHS). each of our workers. “Prioritize safety,” is our slogan. We set strict procedures and apply management of That is the reason why we provide full-fledged health OHS in all subsidiaries of Pupuk Indonesia. These equipment and maintain this in good condition, to ensure procedures meet the standards set by the Indonesian good functioning upon needed usage Apart from that, government, alongside the best practices that we apply through a variety of training practices, we build a culture such as “Behavioral Based Safety” and “Process Safety of health and safety among the workers, emphasizing the Management”. importance of all workers taking good care of each other, so that they come home safe every day. Behavioral Based Safety (BBS) is a proactive accident prevention effort that focuses on preventing dangerous behavior that may trigger an accident. BBS uses
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psychological approach to promote occupational safety SAFE WORKING HOURS [GRI 403-2] culture by involving all employees. This includes In 2017, Pupuk Indonesia recorded one fatal occupational encouraging employees to make a list and collect data accident, occurring at subsidiary PT Petrokimia Gresik. on safe and non-safe practices that are on-going in the Pupuk Indonesia deeply regrets this accident and Company. Based on the results of such observations, the OHS team addressed the situation immediately, a team comprising employees performs analysis and evaluated thoroughly the causes of the accident, and builds an action plan, all aimed to continue increasing provided recommendations of improvements to prevent occupational health and safety practices towards zero similar accident from occurring in the future. accidents.
In order to overcome this, Pupuk Indonesia has taken Process Safety Management (PSM) refers to management improvement efforts, namely more intensive briefs to principles and systems which identify and control the employees, to ensure that BBS and PSM, as well as all danger due to production processes, as part of the OHS procedures, are internalized and well-observed by protection efforts in work areas. While Bila Behavioral the employees. Based Safety (BBS) focuses on human factors of the employees, PSM is directed more to work processes. PSM Hazard Operability Studies (HAZOP) are applied to contains guidelines on work processes such as the process identify and map potential dangers arising from any of hazardous substance handling, proper equipment changes that take place in the factory or in modified maintenance and operations, and work procedure change or improved processes. A Job Safety Analysis (JSA) management. lists the tasks, the dangers and the measures to control them reemphasizes the need for vigilance. Not only Every subsidiary of Pupuk Indonesia also undertakes does JSA help prevent occupational accidents, but periodic measurement, evaluation and reporting on OHS it also protects work equipment from damage, and performance. We run leading indicator measurements, consequently improves work productivity. Pupuk i.e. periodic proactive measurement and reporting on Indonesia also ensures the availability of all required specific actions taken to prevent occupational accidents. APD, or Personal Protective Equipment, and that every We furthermore measure the lagging indicator, that is employee works with the proper work permit. In addition, a measurement on assessing past safety performance. the Company also rigorously and consistently holds [ed. the definition of lagging indicator does not match, training and communicates regarding dangers in the if lagging indicator is the English term.] Such effective work environment. measurement and evaluation is beneficial in the efforts to improve OHS system and management and ensure In terms of occupational accidents, the Company meets compliance with OHS regulation. It is expected that, all obligations to the workers and families. being in a safe and comfortable work environment, the 1. Compensation for 60% x 80 months of wages employees will perform their work without undo worry 2. Compensation of Rp200,000/month for 24 months [ed. It is required that employees have some worry, as no 3. Funeral cost of Rp2,000,000 concern itself leads to accidents.] and in turn will perform 4. Additional work accident-related severance pay in their tasks well. accordance with the Collective Bargaining Agreement in the pertinent business unit.
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All coverage are in accordance with PP No. 84/2010, paid through BPJS Ketenagakerjaan. On top of the compliance to the government regulations, the Company provides additional severance pay to alleviate the burden of the affected family.
Information on safe working hours is as follows.
Safe Working Hours 2015-2017 Unit Bisnis 2015 2016 2017 PT Petrokimia Gresik 13,257,604 17,335,631 5,460,859 PT Pupuk Kujang 20,086,145 1,071,082 4,923,428 PT Pupuk Kalimantan Timur 16,216,380 7,925,132 6,774,477 PT Pupuk Iskandar Muda 17,804,920 3,066,262 3,569,493 PT Pupuk Sriwidjaja Palembang 43,960,974 8,365,597 6,319,427
Key Performance Indicators K3 Pupuk Indonesia Group in 2017 Unit Bisnis LTI LTIFR Medical RWDC TRIR Treatment PT Petrokimia Gresik 1 0.183 0 0 0.183 PT Pupuk Kujang 0 0 6 0 1.218 PT Pupuk Kalimantan Timur 0 0 2 0 0.30 PT Pupuk Iskandar Muda 0 0 0 0 0 PT Pupuk Sriwidjaja Palembang 2 0.158 4 0 0.5468
Number of Accident Events in Subsidiaries of PT Pupuk Indonesia (Persero) 2015-2017 Unit Bisnis Low Middle Heavy Fatality Total 2017 Head Office 0 0 0 0 0 PT Petrokimia Gresik 0 0 0 1 1 PT Pupuk Kujang 3 6 0 0 9 PT Pupuk Kalimantan Timur 2 1 0 0 3 PT Pupuk Iskandar Muda 0 0 0 0 0 PT Pupuk Sriwidjaja Palembang 3 4 2 0 9 2016 Kantor Pusat 0 0 0 0 0 PT Petrokimia Gresik 2 2 0 0 4 PT Pupuk Kujang 1 2 0 1 4 PT Pupuk Kalimantan Timur 8 9 0 1 18 PT Pupuk Iskandar Muda 8 3 0 0 11 PT Pupuk Sriwidjaja Palembang 0 12 0 0 12 2015 Kantor Pusat 0 0 0 0 0 PT Petrokimia Gresik 3 4 1 2 10 PT Pupuk Kujang 4 5 0 0 9 PT Pupuk Kalimantan Timur 2 0 3 0 5 PT Pupuk Iskandar Muda 3 2 0 0 5 PT Pupuk Sriwidjaja Palembang 8 2 0 0 10
PT Pupuk Indonesia (Persero) Sustainability Report 2017 95 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING PUPUK DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work INDONESIA COMMUNITY GOVERNANCE economies RESOURCES OF WELFARE Atmosphere INDIVIDUALS WELFARE PUPUK INDONESIA
Injury Rate in PT Pupuk Indonesia (Persero) Subsidiaries 2015-2017 [GRI 403-2]
0 0.23 0.183 0.01 3.73 1.21 0.59 2.27 0.30 0.11 3.59 0 2.05 1.43 0.5468
2015 2016 2017 2015 2016 2017 2015 2016 2017 2015 2016 2017 2015 2016 2017 PT Petrokimia PT Pupuk Kujang PT Pupuk PT Pupuk PT Pupuk Gresik Kalimantan Timur Iskandar Muda Sriwidjaja Palembang
Note: Injury rate: Number of hours lost per 1 million working hours
Compared to last year, generally speaking, the level first aid, and does not cause lost day. Middle injury is an of low, middle and heavy injury at Pupuk Indonesia’s accident that causes lost days not more than 21 calendar subsidiaries in 2017 went up at 50%. As per its definition, work days and does not inflict the lost of body function. low injury is an accident that only requires minor aid, or While heavy injury is accident that causes lost days more than 21 calendar work days, or that causes the lost of body parts of function.
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OHS TARGETS Employee Representation in P2K3 Not setting clear targets would make a company unable Company Representation to create an appropriate and effective strategy. Pupuk PT Pupuk Iskandar Muda 12% Indonesia is committed to the establishment of clear PT Pupuk Sriwidjaja Palembang 12% OHS targets every year. For 2017, our main OHS targets is achieving zero accidents. PT Pupuk Kujang 12% PT Petrokimia Gresik 12%
PT Pupuk Kalimantan Timur 12% EMPLOYEE REPRESENTATION IN OHS ISSUE PT Rekayasa Industri 12% In relation to the monitoring of OHS application, the Company along with its employees joined in the earing in mind the importance of OHS to the employees, formation of Committees for the Development of HSE the Company ensures the inclusion of OHS articles in (P2K3), working together to ensure compliance with the Collective Bargaining Agreement. Therefore both OHS systems, procedures and strategies. A P2K3 team the Company and the employees fully participate in OHS is formed in every subsidiary of Pupuk Indonesia and is application and monitoring. This active participation comprehensively coordinated by Pupuk Indonesia head will expectedly bring about good OHS application and office. monitoring.
Pupuk Indonesia and its employees also agree to enter Of all the 72 articles of the PKB, six, or about 8%, concern into a Collective Bargaining Agreement (PKB) to ensure OHS issues. The subjects discussed are core subjects the representation and protection of all employees of the regarding occupational safety related to employees, Company. The percentage of employees represented by including: [GRI 102-41, GRI 403-4] P2K3 may vary from time to time in every subsidiary. The representation percentages for 2017 are as follows: [GRI 403-1]
Aspects of OHS Collective Bargaining Agreement
Article in PKB OHS Aspects
Chapter XII Article 52 General HSE Aspects
Chapter XII Article 53 Working Attire
Chapter XII Article 54 Working Equipment
Chapter XII Article 55 Health and Safety Protective Equipment
Chapter XII Article 56 Inspection of Safety Equipment
Chapter XII Article 57 Work Health
PT Pupuk Indonesia (Persero) Sustainability Report 2017 97 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING PUPUK DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work INDONESIA COMMUNITY GOVERNANCE economies RESOURCES OF WELFARE Atmosphere INDIVIDUALS WELFARE PUPUK INDONESIA
CONTRACTORS AND Pupuk Indonesia regularly holds OHS campaigns for OCCUPATIONAL SAFETY all workers, including those from the contractors. We organize training with the aim to raise contractor awareness of and commitment to OHS. In carrying out its operations, Pupuk Indonesia involves workers coming from labor suppliers. However, we ensure that each contractor has the same Occupational Health and Safety standards as those of Pupuk Indonesia. Every OHS TRAINING AND MEETINGS contractor must meet the requirements stated in the In order to ensure OHS application, in 2017, Pupuk Contractor Safety Management System (CSMS), which Indonesia held training and meetings to discuss OHS comprises health, safety and environment issues. Some application and evaluation. Training sessions are held of the issues we focus on are: at every subsidiary of Pupuk Indonesia at management 1. Contractors have official permits as a valid company level and worker level. Meanwhile, meetings on OHS are and have skills in the relevant fields. held at every subsidiary, with presence of the Committee 2. Contractors meet the occupational health and safety for the Development of HSE (P2K3), and ideally once a requirements and are compliant with the applicable month. The P2K3 meeting frequency at each subsidiary OHS rules and regulations. of Pupuk Indonesia is as follows: 3. Contractors meet the required technical requirements and all workers have certifications in their jobs.
Frequency of P2K3 Centralized Meetings in 2015-2017
Company 2015 2016 2017
PT Pupuk Iskandar Muda 12 12 12
PT Pupuk Sriwidjaja Palembang 12 12 12
PT Pupuk Kujang 12 12 12
PT Petrokimia Gresik 12 12 12
PT Pupuk Kalimantan Timur 12 12 12
PT Rekayasa Industri 4 4 4
Notes: P2K3 meetings discuss Health, Safety and Environment where the workers’ and the management’s representatives are present and is chaired by a P2K3 chief. It is conducted once every three months at a minimum.
In addition, to coordinate all OHS activities, Pupuk HEALTHCARE FOR EMPLOYEES Indonesia holds joint meetings at its Head Office in [GRI 403-3] Jakarta, where representatives of every subsidiary are The work environment of Pupuk Indonesia’s subsidiaries present. One meeting was held in 2017, and issues like is related to intensive contact with chemicals that may occupational accident rate, OHS application programs provoke health problems. That is why Pupuk Indonesia and accident prevention programs were discussed. provides full-fledged health facilities for all Pupuk
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Indonesia’s employees. One of the facilities is annual clinic standards such as examination bed, first aid, medical check-up for all employees. In addition, for ambulance and certified medical professionals. These employees working under condition of being exposed clinics are for handling minor injury and for first aid to loud noise and chemical substance, audiometry and in emergency situation. In case of necessity of further spirometry examinations are taken. treatment and more advanced equipment, the clinics will refer the patients to hospitals nearby, with which they Pupuk Indonesia Group provides a clinic in every Pupuk cooperate. Indonesia factory, which contain facilities at general-
Frequency of Medical Check-Up at PT Pupuk Indonesia
High Risk Jobs Frequency of Medical Check-Up Coverage of Medical Check-Up
Employee health examination Once a year Medical check up
Employees exposed to loud noise Once a year Audiometry
Employees exposed to air pollution Once a year Spirometry
Pupuk Indonesia provides health security to all employees 3. “BPJS Kesehatan”, or Workers Social Security Agency, and their families in accordance with applicable company service in accordance with governmental regulations. rules, including: 1. Corporate health insurance for emergency, in-patient Employees are valuable assets to Pupuk Indonesia Group. and out-patient treatment Thus, their health is an important element that optimally 2. Vaccination and Immunisation supports the Company’s performance.
PT Pupuk Indonesia (Persero) Sustainability Report 2017 99 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING PUPUK DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work INDONESIA COMMUNITY GOVERNANCE economies RESOURCES OF WELFARE Atmosphere INDIVIDUALS WELFARE PUPUK INDONESIA
DEVELOPING EXCELLENT ENVIRONMENTAL PERFORMANCE
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• Optimization of Production Resources • Emission Control • Challenges Ahead • Waste Management • Energy Consumption • Policy Supervision • Management of Water Utilization • Environmental Related Complaints • Standards and Methodologies • Environmental Investment 2017 • Water Recycling • Compliance with Environmental Regulation • Maintaining Biodiversity
Pupuk Indonesia Group has always been committed to the minimizing of external impacts of its activities by complying with all the applicable requirements and standards in the environment sector. Pupuk Indonesia is also committed to taking a part to protect Indonesia’s biodiversity richness; this is one of the important aspects in the Company’s production chain. All the commitment in environment sector is realized through a number of programs -- a concrete contribution to the Sustainable Development Goals.
We recognize the impacts on the environment that are We have made various efforts to improve the environment caused by the company. Therefore, we always strive to quality, among others through the implementation of the comply with the provisions and standards, norms and best following policies: practices that apply in the environment field. In addition, • Implementing Environmental Management System we also use “beyond compliance approach” primarily (ISO 14001); related to resource use efficiency, waste minimization, • Applying the principle of reuse, reduce, recycle (3R) biodiversity protection, and community development. in operational activities; The development of each project is carried out by • Prioritizing the choice of environmental friendly and first fulfilling an environmental permit that requires energy-efficient process technology; an Environmental Impact Assessment (AMDAL) or Environmental Monitoring and Management (UKL – UPL) documents. [GRI 102-11]
PT Pupuk Indonesia (Persero) Sustainability Report 2017 101 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING PUPUK DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work INDONESIA COMMUNITY GOVERNANCE economies RESOURCES OF WELFARE Atmosphere INDIVIDUALS WELFARE PUPUK INDONESIA
• Protection of Biodiversity; petrochemical products. Meanwhile, the construction of • Following the Proper Program of the Ministry of new urea plants is prioritized in increasing the efficiency Environment and Forestry as a means of evaluating of raw material consumption, rather than the addition of the achievement of environmental performance. production capacity.
Consistent efforts to implement these policies have been implemented so that several Subsidiary Companies of Challenges Ahead Pupuk Indonesia successfully obtained “GREEN” rating The main challenge we face especially in the energy in the PROPER held by the Ministry of Environment field is the condition of the old plants which causes the and Forestry of the Republic of Indonesia. Pupuk Kaltim high demand of gas consumption. This has an impact successfully achieved PROPER“Gold”rating. While Pupuk on higher production costs, resulting in less competitive Sriwidjaja, Pupuk Kujang and Petrokimia Gresik scored product prices. To overcome this, the Company operates PROPER“Green”. an efficiency program in factory operations and factory revitalization programs. The eco-efficiency program is, among other things, Optimization of Production done by ensuring that each plant is operating well and Resources getting regular maintenance so there is no unscheduled Policies of Pupuk Indonesia Group related to shutdown that can lead to energy wastage. sustainability, particularly related to materials and energy, are implemented through eco-efficiency and Raw Materials - Natural Gas [GRI 301-1] plant revitalization. Business development is focused Raw materials used in the production of fertilizers include on improving efficiency and development to non-urea natural gas (non renewable), air, and water (renewable). products, whether in the form of NPK fertilizers or other Total volume of gas used in the reporting period was 137,405 mmscf.
Use of Gas Raw Materials
No Company 2014 2015 2016 2017
1 Pupuk Iskandar Muda 15,925.94 18,853.62 14,616.21 12,944.32
2 Pupuk Sriwidjaja 33,502.21 32,915.92 29,130.25 39,304.78
3 Kujang 14,799.73 14,738.01 15,252.34 15,570.44
4 Petrokimia Gresik 9,681.70 9,942.45 9,638.87 9,617.05
Pupuk Kalimantan 5 Timur 53,686.65 67,400.60 62,530.84 59,968.62
Total 127,596.23 143,850.59 131,168.52 137,405.22
102 PT Pupuk Indonesia (Persero) Sustainability Report 2017 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING PUPUK DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work INDONESIA COMMUNITY GOVERNANCE economies RESOURCES OF WELFARE Atmosphere INDIVIDUALS WELFARE PUPUK INDONESIA
NPK product raw materials Pupuk Indonesia Group produces Nitrogen-based raw materials Urea (Carbonic diamide)and ZA (Amonium Sulfate) while P and K-based (Potassium) raw materials such as DAP, Phospate rock and KCL must be imported,asthey are not available domestically. Pupuk Indonesia has an NPK Plant which covers two processes:the NPK steam granulation process and NPK chemical process. NPK steam granulation is operated by PSP, PKC, PKG and Pupuk Kalimantan Timur; while the NPK Chemical process is operated by PKG.
NPK Steam Granulation
I. Petrokimia Gresik Use of NPK Raw Materials No Number of NPK Raw Material (Ton) Type of raw materials 2014 2015 2016 2017 1 Urea 85,298.97 67,644.2 68,694.37 68,158.33 2 ZA 60,659.76 132,933.50 67,894.53 132,363.99 3 DAP 100,854.71 192,632.35 117,508.60 173,582.61 4 Rock Phos 20,185.87 3,472.74 13,536.17 4,063.88 5 KCl 143,453.65 150,079.58 122,333.07 144,897.80 6 Clay 11,350.09 42,019.80 46,712.52 57,999.67
II. Pupuk Kalimantan Timur Use of NPK Raw Materials No Number of NPK Raw Material (Ton) Type of raw materials 2014 2015 2016 2017 1 Urea 36,483 32,759 20,107 24,569 2 ZA - 21,717 29,638 29,450 3 DAP 30,837 55,507 52,394 57,111 Rock Phospate (steam 4 15,555 6,390 659 1,739 Granul) 6 KCl 37,723 50,913 48,102 49,985 7 Clay 21,095 30,833 25,321 22,306
III. Kujang Use of NPK Raw Materials No Number of NPK Raw Material (Ton) Type of raw materials 2014 2015 2016 2017 1 Urea 12,085 25,737 21,551 35,924 2 ZA 1,348 861 7,678 3 DAP 13,146 30,992 30,806 58,355 Rock Phospate (steam 4 2,431 639 294 378 Granul) 6 KCl 13,971 28,288 22,782 44,200 7 Clay 7,508 21,235 18,094 30,203
PT Pupuk Indonesia (Persero) Sustainability Report 2017 103 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING PUPUK DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work INDONESIA COMMUNITY GOVERNANCE economies RESOURCES OF WELFARE Atmosphere INDIVIDUALS WELFARE PUPUK INDONESIA
IV. Pupuk Sriwidjaja Use of NPK Raw Materials
No Type of raw materials Number of NPK Raw Material (Ton)
2014* 2015* 2016 2017
1 Urea - - 15,656 16,292
2 ZA - - 332 903
3 DAP - - 25,331 29,225
4 KCl - - 19,513 22,614
5 Clay - - 19,432 22,713
* belum beroperasi
NPK Chemical
I. Petrokimia Gresik Use of NPK Raw Materials
No Type of raw materials Number of NPK Raw Material (Ton)
2014 2015 2016 2017
1 Asam Fosfat 559,868.46 594,802.26 564,843.85 643,521.11
2 NH3 263,323.97 283,753.32 263,590.54 301,087.14
3 Asam Sulfat 397,959.18 445,108.02 420,449.50 478,631.74
4 ZA 314,732.06 326,333.18 293,246.67 364,359.52
5 Urea 44,609.39 39,379.23 37,649.54 33,400.32
6 KCl 523,194.60 534,882.65 477,063.84 482,504.39
Plant Revitalization Program The Company utilizes natural gas as raw material and The revitalization of old plants is done as a saving of the energy source in fertilizer production process. Other raw material of natural gas. Pupuk Indonesia Group is energy sources used by Pupuk Indonesia are coal, building thePusri 2B plant in Palembang and theAmurea electricity and fuel oil for transportation. 2 plant in Gresik,as well as planning to expand capacity of the NPK plant in East Kalimantan. In addition, we also This report separates the calculation of the volume of gas undertook a study for the development of a petrochemical and other energy sources as product raw materials and the project in Bintuni. utilization of gas as an energy source. Calculation of gas consumption includes subsidiaries which are producing To maintain the plant performance, we have implemented fertilizers. Plant Integrity Management System (PIMS) and Production Management System (Sistem Manajemen Produksi/SIMPRO). In addition, preventive, predictive and corrective maintenance measures are also taken to maintain the reliability and efficiency of the plant.
104 PT Pupuk Indonesia (Persero) Sustainability Report 2017 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING PUPUK DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work INDONESIA COMMUNITY GOVERNANCE economies RESOURCES OF WELFARE Atmosphere INDIVIDUALS WELFARE PUPUK INDONESIA
Energy Consumption [GRI 302-1]
Gas Consumption for Heating and Steam
Business Unit Unit 2014 2015 2016 2017
PT Petrokimia Gresik MMSCF 11,593 12,352 12,496 13,138
PT Pupuk Kujang MMSCF 7,119 7,645 6,420 7,161
PT Pupuk Kalimantan Timur MMSCF 6,862 8,254 7,414 7,085
PT Pupuk Iskandar Muda MMSCF 3,302,93 3,572,36 4,014,15 3,835,01
PT Pupuk Sriwidjaja Palembang MMSCF 14,213 13,599 13,763 11,333
Total 43,090 45,422 44,107 42,551
Gas consumption for steam and heating needs in Pupuk Indonesia Group in 2017 decreased by 2,156 MMBTU or 4.8% 44,107 mmscf in 2016 to 42,551 mmscf in 2017.
As one of the production energy resources, natural gas is one of the main obstacles of the Company in 2017 which leads to a decrease in competitiveness. Natural gas prices for fertilizer producers in Indonesia are much higher when compared to natural gas prices in other countries. The average natural gas price of the Fertilizer Industry in Indonesia is USD5.2 per MMBTU, while the average natural gas price in competing countries is around USD 0.8 – 3.1 per MMBTU. To overcome the obstacles of high gas prices, the Company implements a comprehensive efficiency and cost reduction program on non-gas costs.
Coal Consumption
Business Unit Unit 2014 2015 2016 2017
Ton 286,989 209,954 259,663 214,967 PT Petrokimia Gresik GJ 7,039,840 5,150,171 6,369,531 5,273,141
Ton 609,105 622,037 522,259 446,226 PT Pupuk Kalimantan Timur GJ 11,155,049 11,856,306 11,372,915 9,496,483
Ton 896,094 831,991 781,922 661,193 Total GJ 18,194,889 17,006,477 17,742,445 14,769,624
Coal is used for energy sources and gradually to replace natural gas energy use for steam and heat. Coal is chosen because it is cheaper than natural gas. The calculation of coal use is based on the coal volume used by the subsidiaries producing fertilizer. The volume of coal being used is then converted into energy unit Giga Joule (GJ). In 2017, coal consumption in Pupuk Indonesia Group in general decreases by 2,972,822 GJ or 17% from 17,742,445 GJ in 2016 to 14,769,624 GJ in 2017.
PT Pupuk Indonesia (Persero) Sustainability Report 2017 105 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING PUPUK DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work INDONESIA COMMUNITY GOVERNANCE economies RESOURCES OF WELFARE Atmosphere INDIVIDUALS WELFARE PUPUK INDONESIA
Efforts to Save Electricity Usage Business Unit Unit 2014 2015 2016 2017 PT Pupuk Indonesia (Persero) kWh 125,889 177,372 186,068 258,826 GJ 453 638 669 931 PT Petrokimia Gresik kWh 629,937,699 690,353,224 705,376,178 721,986,095 GJ 2,267,776 2,485,272 2,539,354 2,599,150 PT Pupuk Kujang kWh 19,957,000 19,030,000 29,606,000 41,018,000 GJ 71,865 68,527 106,611 147,706 PT Pupuk Kalimantan Timur kWh 622,425,516 747,081,208 677,977,715 644,762,126 GJ 2,240,732 2,689,492 2,440,720 2,321,144 PT Pupuk Iskandar Muda kWh 46,993,500 54,752,140 110,190,560 70,088,680 GJ 169,176 197,107 396,686 252,319 PT Pupuk Sriwidjaja Palembang kWh 240,424,552 250,117,273 231,965,613 283,173,717 GJ 865,521 900,415 835,070 1,019,417 kWh 1,559,864,156 1,761,511,217 1,755,302,134 1,761,287,444 Total GJ 5,615,523 6,341,452 6,319,110 6,340,667
The electricityusage calculation includes the Company’s Head Office in Jakarta and its subsidiaries. The calculation method is based on the meter number shown and then converted using gigajoule energy unit (GJ). Electrical energy used is sourced from PT PLN (Persero) and self-generating operations.
Efforts to Save Electricity Usage The Company through its subsidiaries perform various ways to save electricity usage, including: 1. Performing the usual lamps replacements with LED light bulbs for street lighting 2. Using a solar cell 3. Modify / replace the air conditioning equipment 4. Turning off power tools while not in use, and 5. Interconnecting of power plant network.
Fuel Consumption Fuel consumption Business Unit Unit 2014 2015 2016 2017 PT Petrokimia Gresik Liter 529,103 466,389 420,005 272,707 GJ 20,032 17,657 15,901 10,325 PT Pupuk Kujang Liter 398,329 375,024 236,228 230,371 GJ 15,399,40 14,498,40 9,132,56 8,860 PT Pupuk Kalimantan Timur Liter 913,058 1,137,447 920,225 1,154,307 GJ 35,609 44,360 35,889 45,018 PT Pupuk Iskandar Muda Liter 100,330 108,320 109,943 72,454 GJ 4,033 4,354 4,419 2,912 PT Pupuk Sriwidjaja Palembang Liter 362,863.00 416,379,00 328,308,00 251,513.00 GJ 14,151.66 16,238.78 12,804.01 9,809.01 Liter 2,303,683.13 2,503,558.84 2,014,709.24 1,981,351.76 Total GJ 89,225.35 97,108.81 78,145.80 76,924.45
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The calculation of fuel consumption forvehicles includes production and support activities throughout the subsidiaries. The calculation is based on the recording of fuel purchases and is converted using gigajoule energy unit (GJ). The Company also undertakes efforts to reduce fuel usage, among other means, the application of an official vehicle fuel quota system, the replacement of old service cars with more fuel efficiency, and the use of bicycles in some work areas.
Reduction of Energy Consumption [GRI 302-4]
Energy Efficiency Results (GJ)
Company 2014 2015 2016 2017
Pusri 6,543,282 7,041,098 7,212,538 4,645,471
Kujang 815,847 1,992,606 4,668,177 4,153,186
Petrokimia Gresik 865,445 1,470,993 1,359,351 2,284,076
Pupuk Kalimantan Timur 182,069 308,917 367,809 443,661
Total Absolute Energy Efficiency 8,406,643 10,813,614 13,607,875 11,526,394
Pupuk Indonesia Group has made various efforts to save energy through modification program and interconnection between plants in the production process so that they can save energy consumption. Replacement of light bulbs with solar cell, modification and cooling arrangements and use of energy saving lamps to reduce electricity consumption and modification of means of transportation to reduce fuel consumption. Standard calculation performed by comparing between before and after modification or compared with business as usual conditions.
In the field of energy consumption, in 2017, Pupuk Indonesia implemented a number of strategic policies to maintain the Company’s performance and competitiveness. One of these efforts is to increase efficiency, especially the efficient use of gas raw materials, through a number of steps, among others by increasing the reliability of plants[ed. If mentioned in another section, mention should just generally be made of reduced downtime, or some other type of efficiency measure – also pointing the reader to that other section.] in order to reduce gas consumption, shut down old factories reduction of wasteful consumption of gas, and continuation of the fertilizer plant revitalization program. Another efficiency program that has a significant impact is the Cost Reduction Program for non-gas costs.
Energy Intensity Ratio [GRI 302-3]
Intensity of Gas Usage (Ammonia) MMCTU/Ton NH3
2014 2015 2016 2017 Business Unit MMBTU/Ton NH3
PT Petrokimia Gresik 37.64 38.09 37.64 37.68
PT Pupuk Kujang 38.8 39.6 38.5 38.4
PT Pupuk Kalimantan Timur 36.57 34.30 34.76 34.79
PT Pupuk Iskandar Muda 41.53 39.76 40.75 43.41
PT Pupuk Sriwidjaja Palembang 41.34 42.55 42.29 36.15
Total 38.30 37.4 37.47 36.15
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Intensity of Gas Usage (Urea) 2014 2015 2016 2017 Business Unit MMBTU/Ton Urea PT Petrokimia Gresik 25,21 25,33 24,88 25,11 PT Pupuk Kujang 30,8 30,3 30,0 29,7 PT Pupuk Kalimantan Timur 28,49 26,63 26,78 26,72 PT Pupuk Iskandar Muda 31,55 32,55 34,16 34,96 PT Pupuk Sriwidjaja Palembang 31,87 35,85 35,04 30,00 Total 28,02 30,19 29,88 28,67
The average intensity of gas consumption for the production of each ton of ammonia in 2017 reached 36.15 MMBTU/Tton. The amount is decreased by 1.32 mmbtu / ton or 4% compared to 2016 which reached 37.47 MMBTU / Tton. The decrease was caused by the energy efficiency program implemented that is the increase of asset utilization and the reduction of unscheduled shutdown frequency.
Meanwhile, the average intensity of gas consumption for the production of each ton of urea in 2017 reached 28.76 mmbtu / ton. The amount is decreased by 1.22 mmbtu /ton or 4% compared to the year 2016 reaching 29.88 mmbtu /ton.
The calculation of the energy intensity ratio above is done by calculating all energy consumption used as raw materials and used to generate steam and generate electricity for production purposes.
The type of energy included in the calculation is the use of coal, electricity and natural gas used as energy. All data reported here is the ratio of energy intensity including the boundary within the company only. We do not report energy intensity outside the company.
Management of Water Utilization [GRI 303-1] The fertilizer industry consumes significant amounts of water in its production processes, both for process and for cooling. The use of desalinated seawater for cooling is only carried out in PT Pupuk Kalimantan Timur. We measure water use efficiency by evaluating processes that require high water consumption, using flow meters and compared with targets.
Water utilization is used for production process and domestic need of office and plant. Required water is obtained from surface water sources including seawater through the desalination process, ground water, rainwater, and wastewater preparations from recycled products. Water Resources Utilization (m3) Water Resources 2014 2015 2016 2017 Groundwater - - - - Surface water (river) 6,389,477 6,286,000 6,085,010 5,871,679 Pupuk Rainwater - - - - Iskandar Muda Utilization of processed 19,030 19,320 77,615 57,027 wastewater Seawater (desalinated) - - - - Groundwater - - - - Surface water (river) 12,563,296 11,831,716 10,892,509 12,758,581 Pupuk Rainwater - - - - Sriwidjaja Utilization of processed 872,956 888,499 1,208,116 1,228,710 wastewater Seawater (desalinated) - - - -
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Water Resources 2014 2015 2016 2017 Groundwater 4,688,170 3,881,856 3,741,504 3,890,652 Surface water (river) - - - - Pupuk Rainwater 4,050 3,155 3,600 3,750 Kalimantan Utilization of processed Timur 8,401,687 12,385,320 10,021,455 10,760,500 wastewater Seawater (desalinated) 1,171,107,665 1,179,224,908 1,369,092,009 1,160,473,835 Groundwater - - - - Surface water (river) 9,196,811 9,427,381 8,417,150 9,509,220 Rainwater 1,790,474 1,797,821 1,912,027 1,051,069 PKC Utilization of processed 1,055,580 1,299,984 1,035,428 1,209,397 wastewater Seawater (desalinated) - - - - Groundwater - - - - Surface water (river) 21,111,971 24,901,470 25,829,286 29,675,300 Petrokimia Rainwater - - - - Gresik Utilization of processed 6,298,301 6,581,520 8,941,680 9,701,723 wastewater Seawater (desalinated) - - - - Groundwater 4,688,170 3,881,856 3,741,504 3,890,652 Surface water (river) 49,261,555 52,446,567 51,223,955 57,814,780 Rainwater 1,794,524 1,800,976 1,915,627 1,054,819 Total Utilization of processed 16,647,554 21,174,643 21,284,294 22,957,357 wastewater Seawater (desalinated) 1,171,107,665 1,179,224,908 1,369,092,009 1,160,473,835
Standards and methodologies In general, the volume of water from various sources used to the year 2016 a decrease was caused by the Water by the subsidiaries of PT Pupuk Indonesia (Persero) in Efficiency Program by Pupuk Indonesia Group, especially 2017 or decreased by 202,739,009 m3 or 14% compared the use of seawater for the process at PT Pupuk Kaltim.
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Increased river surface water intake was experienced by Indonesia periodically monitors and evaluates the status all but one Pupuk Indonesia subsidiaries in 2017. PKG and of biodiversity in accordance with the programs set by PSP have increased because in 2017 is being done Pusri each subsidiary. IIB project in PSP and Amurea II in PKG. However, this is offset by increased utilization of processed wastewater by Planting Mangroves and Coral Reefs PKG and PSP over the past four years. Since 2010, PT Pupuk Kalimantan Timur (Pupuk Kalimantan Timur) has been planting mangrove in The process of taking and utilizing water from surface Kedindingan Island, Bontang. Mangrove planting is a water sources is carried out under strict supervision manifestation of the Company’s commitment in synergy including the use of seawater through the desalination with the Government of Bontang City in rehabilitating process at PT Pupuk Kalimantan Timur. Pupuk Indonesia the marine area around Kedindingan Island. Group meets the water harvesting threshold requirements, as well as avoids the utilization of water from sources that Until the end of 2017, PT Pupuk Kalimantan Timur has have high biodiversity. planted 100,000 mangroves, with an area of six hectares. Now Kedindingan Island has become the location for breeding marine biota similar starfish, klomang and Water recycling [GRI 303-3] shellfish. Some of the water that has been used is then processed in a wastewater treatment plant (IPAL) facility. Some of the Mangrove conditions also grow well, while replanting wastewater processed water is reused for the production has been done for dead mangroves so that they remain process, while the rest is flowed into water bodies. In 2017 sustainable. the volume of recycled water reaches 22,957,357 m3 or about 1.9% of total water use is recycled water calculated Other environmental conservation efforts in the marine based on total recycled water usage of the Company field are transplantation or building of artificial reefs compared to total surface water, groundwater and in the waters of Tobok Batang, Bontang. Until 2017 it rainwater used for the process production. was recorded that there were XXX of artificial reefs which were transplanted to the seabed. Now the waters Periodic monitoring is carried out to ensure waste water in TobokBatangare growing soft coral, hard corals and quality meets the quality standards set by the authorities various types of reef fish. before being discharged. This is part of the implementation of Water Conservation Policy and Wastewater Pollution PT Pupuk Kujang Biodiversity Park Reduction to maintain the healthof water sources. Thus, PT Pupuk Kujang is one of the subsidiaries that also wastewater treated and then discharged into water bodies participated in deer breeding. One type of deers that will not cause pollution or disrupt the biodiversity present became the inhabitants of PT Pupuk Kujang are Chital in water bodies. (Axis axis). The deer were gifts from President Soeharto when he visited PT Pupuk Kujang in 1982. Chital came all the way from Bogor Palace. Initially, there were three Maintaining Biodiversity imported deer. Today, there are tens deer and have Pupuk Indonesia is committed to taking the role become part of the fauna collection. of protecting Indonesia’s biodiversity as one of the important aspects in its production chain. Pupuk Indonesia manages biodiversity by identifying biodiversity potentials and then creating programs aimed at maintaining and enhancing biodiversity status. Pupuk
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PT PupukKujang has been developing thePupukKujang Biodiversity Park since 2013, in an area of47.7 ha, or 39.75% of the total green area of PT PupukKujang. In managing this Bio-Park, the Company cooperates with the West Java Environmental Management Agency. Taman KeanekaragamanHayati is an area outside the conservation area built into a reserve of local biological resources and has a conservation function in accordance with applicable standards and regulations.
Establishment of TKHPK as biodiversity park of West Java is based on West Java Provincial Environmental Agency (BLH Jabar) inventory. The survey conducted by BLH Jabar found 20 species of rare trees in TKHPK. The scarcity status is based on the BPLHD Jabar Expert Team Review. The number includes 22.5% of the total 89 species of rare trees that exist in West Java province.
In the TKHPK area, there are several springs and small lakes or ponds, which are natural sources of water. The existence of springs and lakes shows that this area still has a good water regulatory function. The existing springs and lakes are utilized by the community for daily household needs. Thus PT Pupuk Kujang directly plays a role in providing water for the surrounding community.
Emission Control As a fertilizer and petrochemical industry, the existence of Pupuk Indonesia Group--directly or indirectly-- contributes to emissions, both green house gas (GHG) and other emissions. GHG emissions, among others, result from fertilizer production activities. In addition, the use of fertilizer also contributes to GHG emissions. We are aware of this and therefore we strive to continually control the emissions resulting from our operations.
Pupuk Indonesia Group GRK Emission Group [GRI 305-1] Business Unit Source 2014 2015 2016 2017 IPPU 411,861 412,180 391,787 396,157 PT Petrokimia Gresik Energi 1,171,808 1,062,990 1,111,963 1,152,864 IPPU 252,167 219,208 239,147 222,135 PT Pupuk Kujang Energi 1,035,778 1,080,575 970,788 1,073,836 IPPU 1,065,668,30 1,734,400,28 1,580,965,09 1,397,131,54 PT Pupuk Kalimantan Timur Energi 3,963,793,85 4,218,136,38 3,218,595,93 3,071,707,50 IPPU 103,072,91 107,791,30 88,976,86 69,341,53 PT Pupuk Iskandar Muda Energi 164,259,35 197,585,51 151,300,80 123,786,22
PT Pupuk Sriwidjaja IPPU 484,147 554,897 544,419 512,562 Palembang Energi 2,543,693 2,438,146 2,397,573 2,041,492 Total 11,196,248 12,025,909 10,695,516 10,061,013
In 2015, the Company continues its GHG emission control program by standardizing GHG emission calculation. In addition, GHG emission calculation are done computerized and no longer manual. This makes GHG emission calculation more accurate.
The Tier 1 emissions calculation method is based on the IPCC method to calculate the emissions generated from production activities. The calculation is done by internal company. GHG emission calculation performed includes direct GHG emissions (Scope 1), derived from production activities in producing fertilizer subsidiaries. Total GHG emissions
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(Scope 1) in 2017 reached or decreased a total of 634,503 tonnes of CO2eq or 5.9% from 2016 which reached 10.695.516 ton
CO2eq. The decrease is due to a decrease in total energy intensity in both the ammonia plant and the urea plant.
Indirect GHG Emissions [GRI 305-2]
2014 2015 2016 2017
Business PLN Ton CO2 Eq PLN Ton CO2 Eq PLN Ton CO2 Eq PLN Ton CO2 Eq Unit Electricity Electricity Electricity Electricity Consumption Consumption Consumption Consumption kWh kWh kWh kWh
PT 97,057,611 71,920 67,722,334 50,182 95,762,921 70,960 97,768,000 72,446 Petrokimia Gresik
PT Pupuk 19,957,000 14,469 19,030,000 13,797 29,606,000 21,464 41,018,000 29,738 Kujang
PT Pupuk 3,435,690 1,590 3,817,994 2,173 3,168,000 2,619 3,435,690 2,356 Iskandar Muda
Total 117,014,611 86,389 86,752,334 63,979 125,368,921 92,425 138,786,000 102,184
Only three of Pupuk Indonesia Subsidiaries use electricity from PT PLN, namely Petrokimia Gresik, Pupuk Kujang and Pupuk Iskandar Muda. The electricity needs of Pupuk Kaltim and Pupuk Sriwidjaja Palembang can be fulfilled by the generators themselves.
The calculation of indirect GHG emission loads in Pupuk Indonesia and a number of subsidiaries is based on the use of electricity sourced from the supplier, PT PLN and measured by grid in each location. The base year used is 2010, in accordance with the agreement with the Ministry of Industry as leading emissions sector. The sources of GHG emission
and emission factors used are IPCC and monitoring guidance, evaluation and reporting of BAPPENAS with GWP CO2 =
1, CH4 = 21, and N2O = 310.
Emissions Intensity [GRI 305-4] GHG emission intensity is calculated as GHG emission generated for every ton of urea fertilizer production. GHG emission intensity in 2017 is 1.47 tons CO2eq / ton of urea fertilizers derived from the production process and energy use..
GHG Emission Reduction Program
GRK Emission Reduction Program 2014-2017 [GRI 305-5]
Reduction Result (in tons CO2eq)
2014 2015 2016 2017
Uses for urea raw materials 309,404 321,888 309,879 331,939
Raw Material Reduction ZA II 73,851 62,962 57,619 67,989
Liquid CO2 production 23,831 26,231 23,588 5,092,614
Total 407,086 411,082 391,086 405,020
As a follow-up to the identification of GHG emission sources and GHG emission accounting, Pupuk Indonesia Group
has made various efforts to reduce GHG emissions, among others by saving energy and reusing CO2 as a product raw material.
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Based on the emissions reduction program results, in 2017 the company was able to reduce direct emissions generated by 13,934 ton CO2eq. The gases included in this calculation are CO2, CH4, and N2O, with the base year of calculation being 2010 as agreed with the Ministry of Industry as a leading sector of greenhouse gas emissions. The calculation is performed by taking direct measurements of raw materials with measuring instruments, as well as using the average carbon uptake assumption of each tree for calculating the yield of the greening program.
Other Emission Controls [GRI 305-7] In addition to GHG emissions, Pupuk Indonesia Group also manages and controls other emissions. The emission types that are managed and controlled in accordance with Minister of Environment Decision No. 133 of 2004 on Emission Quality Standard for Fertilizer Industry Activities. Calculations based on concentration of compound with flow rate and operating time.During 2017, PI and its subsidiaries did not receive a sanction for violating limits for emissions release.
I. PT Pupuk Iskandar Muda Other Air Emission
No Emission Source Parameter Ton 2014 2015 2016 2017
1 Primary Reformer NOx Ton 73.34 87.52 80.55 100.43
SO2 Ton 1.43 85.82 7.32 5.36
2 WHB / GTG NOx Ton 51.74 132.78 60.80 55.91
3 Priling Tower/ Total Partikulat Ton 0.10 2.48 7.50 6.89 Granulasi NH3 Ton 9.86 26.04 12.92 24.94
4 Boiler Total Particulate Ton 0,00 0,00 0,76 3,23
SO2 Ton 1,04 6,44 1,77 1,37
NO2 Ton 38,75 70,89 89,71 55,11
II. PT Pupuk Kujang Other Air Emission
No Emission Source Parameter Unit 2014 2015 2016 2017
1 Primary Reformer NOx Ton 1319.83 967.97 546.28 878.99
SO2 Ton 0 0 0 0
2 WHB / GTG NOx Ton 364.23 265.59 160.31 77.45
3 Priling Tower/ Granulasi Total Ton 30.23 67.14 35.92 62.67 Particulate
NH3 Ton 92.91 49.91 304.78 307.96
4 Boiler Total Ton 9.02 10.84 12.13 13.9 Particulate
SO2 Ton 31.83 36.37 35.37 72.8
NO2 Ton 375.01 347.94 506.11 742.2
5 Scrubber NPK Total Ton 8.50 28.10 11.10 78.00 Particulate
Fluor Ton 0.00 0.00 0.00 0.06
Amoniak Ton 3.20 5.80 20.40 16.75
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III. PT Petrokimia Gresik Other Air Emission No Emission Source Parameter Unit 2014 2015 2016 2017 1 Primary Reformer NOx Ton 113.21 4.19 38.20 37.4 2 WHB / GTG NOx Ton 280.65 149.57 317.46 26.7 3 Priling Tower/ Granulasi Total Particulate Ton 21.42 103.41 78.85 5.99 NH3 Ton 26.34 180.73 107.00 1.87 4 Boiler Total Particulate Ton 60.96 81.88 16.34 13.7 SO2 Ton 31.29 11.30 15.33 7.1 NO2 Ton 226.01 323.31 278.23 24.2 5 Chimney BB Total Particulate Ton 1869.90 1613.43 1869.90 171.6 SO2 Ton 5217.50 1599.42 5217.50 75.8 NO2 Ton 1584.49 562.15 1584.49 108.8 6 Scrubber NPK Phonska I Total Particulate Ton 154.39 133.32 134.99 282.4 Amoniak Ton 614.39 264.15 405.15 24.5 Fluor Ton 11.46 27.01 19.61 6.4 7 Scrubber NPK Phonska II Total Particulate Ton 499.88 677.16 334.87 270.0 Amoniak Ton 257.01 53.51 535.74 109.8 Fluor Ton 48.93 10.10 14.26 4.0 8 Scrubber NPK Phonska III Total Particulate Ton 468.05 661.03 1089.37 213.5 Amoniak Ton 105.92 991.10 435.79 186.6 Fluor Ton 1.23 13.81 32.20 3.1 9 Scrubber NPK Phonska IV Total Particulate Ton 333.58 60.83 235.66 181.3 Amoniak Ton 184.93 167.23 163.14 104.6 Fluor Ton 10.45 0.15 5.73 5.0 10 Scrubber NPK Granulasi I Total Particulate Ton 153.38 10.73 2.41 43.1 Amoniak Ton 271.28 44.74 101.52 38.6 Fluor Ton 13.49 4.31 2.02 2.1 11 Scrubber NPK Granulasi II Total Particulate Ton 307.11 95.89 18.44 34.1 Amoniak Ton 547.23 152.00 40.69 36.7 Fluor Ton 9.76 5.63 1.52 0.7 12 Scrubber NPK Granulasi Total Particulate Ton 293.37 284.75 70.19 177.0 III Amoniak Ton 697.36 548.93 372.92 148.9 Fluor Ton 1.72 16.23 6.21 10.3 13 Scrubber NPK Granulasi Total Particulate Ton 592.68 323.90 66.76 112.3 IV Amoniak Ton 1457.61 650.43 266.63 97.0 Fluor Ton 43.59 12.32 7.86 7.4 Pupuk Fosfat 14 Ball mill Total Particulate ton 22.55 14.83 21.91 40.9 15 Unit reaksi Total Particulate ton 840.53 415.18 710.81 264.0 Fluor ton 0.75 5.71 80.39 6.3 16 Unit Granulasi Total Particulate ton 742.03 57.79 153.36 46.0 Fluor ton 25.34 0.89 34.63 1.1 Asam Fosfat 17 Ball Mill Total Particulate ton 63.55 27.20 37.49 21.5 18 Fume Scrubber Fluor ton 58.17 1.24 2.54 0.5 19 Gas Scrubber (Pabrik Total Particulate ton 21.41 14.95 18.06 11.7 AlF3) 20 Asam Sulfat Fluor ton 2.24 0.64 0.90 0.5 SO2 ton 476.29 597.10 641.41 407.5 21 Dust scrubber (cement Total Particulate ton 55.84 42.24 19.68 20.9 retarder) Fluor ton 3.15 0.06 0.88 0.7
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IV. PT Pupuk Kalimantan Timur Other Air Emission
Emission Source Parameter Unit 2014 2015 2016 2017
Primary Reformer NOx Ton 397,34 1148,78 537,29 75,47
SO2 Ton - - - -
WHB / GTG NOx Ton 61,54 146,38 531,31 70,31
Priling Tower/ Granulasi Total Ton 136,17 295,54 556,09 666,43 Particulate
NH3 Ton 462,24 707,35 1210,48 1559,11
Boiler SO2 Ton 37,49 18,17 28,20 12,97
NO2 Ton 36,90 93,67 44,35 18,09
Chimney BB Total Ton 54,35 37,92 15,39 47,30 Particulate
SO2 Ton 820,62 1203,41 918,83 898,07
NO2 Ton 411,78 203,56 68,91 20,70
Scrubber NPK Total Ton 9,35 12,56 12,43 8,62 Particulate
Fluor Ton 0,00 0,00 0,01 0,02
Amoniak Ton 32,03 46,94 65,94 31,19
V. PT Pupuk Sriwijaya Palembang Other Air Emission
No Emission Source Parameter Unit 2014 2015 2016 2017
1 Primary Reformer NOx Ton 154,998 198.4 167.07 153.76 WHB / GTG SO2 Ton 431.02 176.31 135.48 129.38
2 NOx Ton 187.65 222.58 141.63 117.44
3 Priling Tower/ Granulasi Total Ton 187.56 82.68 26.39 20.9 Particulate
NH3 Ton 613.91 281.88 1.587 126.4
4 Boiler Total Ton 63.32 83.18 52.53 50.24 Particulate
SO2 Ton 246.61 99.36 283.76 273.18
NO2 Ton 90.15 219.93 118.95 104.51
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Waste Management [GRI 306-4] Pupuk Indonesia regularly monitors the quality and quantity of liquid and solid waste to ensure liquid waste The Company is very concerned about environmental and solid waste generated in accordance with the quality factors in running the company’s operations. standards stipulated by the Government. Environmental management and industrial wastes are very much appreciated, and it was proven in 2017 that one The production process of Pupuk Indonesia generates B3 of our subsidiaries had achieved Proper emas rating and and Non-B3 waste. The generating waste is then managed our three subsidiaries have achieved the Proper “Green” in accordance with the provisions applicable by a third rating from the Ministry of Environment. party except the following generated B3 wastes produced by PT Pupuk Kalimantan Timur: laboratory waste, Both liquid waste and solid waste are inevitable waste laboratory packaging waste and cotton waste which are products in the production of fertilizers, insignificant incinerated by PT Pupuk Kalimantan Timur. amounts and withsignificant impacts if not well- Waste management and processing in this report includes managed.Strict supervision from the government makes the producing fertilizer subsidiaries. Each subsidiary is this aspect especially important to the Company. Pupuk equipped with a waste management installation. Indonesia ensures the management of liquid waste and solid waste generated remains in accordance with the Data of Liquid Waste of PT Pupuk Indonesia quality standards and regulations set by the Government. (Persero) Subsidiaries [GRI 306-1] During 2017, PI and its subsidiaries received no sanction Liquid waste from each subsidiary are monitored and from the government due to waste releases exceeding measured monthly. Measurements are carried out by regulation. Pupuk Indonesia regularly monitors the KAN-accredited laboratories using the SNI-compliant quality and quantity of liquid and solid waste to ensure method of sampling liquid waste and liquid waste analysis liquid waste and solid waste generated in accordance methods or other standards. with the quality standards stipulated by the government.
I. PT Petrokimia Gresik – chanelled to Java Sea
Pollution Load Data (Kg / Ton)
No Parameter 2014 2015 2016 2017
1 pH 7,108 7,512 7,462 6,903
2 COD 0,086 0,088 0,027 0,015
3 TSS 0,068 0,088 0,028 0,057
4 Minyak Lemak 0,000 0,000 0,000 0,000
5 Amoniak Total 0,303 0,306 0,135 0,307
6 TKN 0,400 0,355 0,178 0,404
7 Flour 0,001 0,000 0,001 0,001
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II. PT Pupuk Iskandar Muda - chanelled to Malacca Strait
Pollution Load Data (Kg / Ton)
No Parameter 2014 2015 2016 2017
1 pH 9,134 8,908 9,508 9,308
2 COD 0,236 0,254 0,329 0,363
3 TSS 0,029 0,009 0,090 0,023
4 Minyak Lemak 0,000 0,000 0,002 0,000
5 Amoniak Total 0,285 0,105 0,287 0,336
6 TKN 0,546 0,228 0,528 0,599
III. PT Pupuk Sriwidjaja Palembang - chanelled to Musi River
Pollution Load Data (Kg / Ton)
No Parameter 2014 2015 2016 2017
1 pH 8,696 8,872 8,958 9,408
2 COD 0,108 0,096 0,117 0,144
3 TSS 0,067 0,077 0,063 0,076
4 Minyak Lemak 0,009 0,010 0,017 0,027
5 Amoniak Total 0,213 0,217 0,148 0,087
6 TKN 0,393 0,507 0,368 0,426
IV. PT Pupuk Kalimantan Timur - chanelled to Makassar Strait
Pollution Load Data (Kg / Ton)
No Parameter 2014 2015 2016 2017
1 pH 8,483 8,628 8,628 8,582
2 COD 0,141 0,128 0,137 0,149
3 TSS 0,005 0,007 0,007 0,004
4 Minyak Lemak 0,001 0,002 0,001 0,001
5 Amoniak Total 0,136 0,333 0,193 0,243
6 TKN 0,144 0,367 0,262 0,328
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PT Pupuk Kujang - chanelled to Cikaranggelam River
Pollution Load Data Kg / Ton (except pH)
Pollution Load Data of kg / ton (except pH) No Parameter 2014 2015 2016 2017
1 pH 8,729 8,329 8,683 8,225
2 COD 0,091 0.085 0.088 0.102
3 TSS 0,062 0.036 0.085 0.052
4 Minyak Lemak 0,000 0.000 0.001 0.002
5 Amoniak Total 0,145 0.063 0.066 0.144
6 TKN 0,300 0.073 0.144 0.112
Toxic and Hazardous (B3) waste Pupuk Indonesia Group strives to reduce B3 waste generated and uses B3 waste that can still have economic value. The program of reducing and utilizing B3 waste is undertaken by, among others: reducing primary reformer catalysts, replacing B3 with Non-B3 materials, utilizing gypsum and coal ash and working with B3 waste users that hold license from the Ministry of Environment and Forestry.
The B3 waste management is carried out in accordance with the processing permit standards of the Ministry of Environment and Forestry, including air emission standard and combustion of at least 99.99%. Initially, B3 waste generated by the company will be transported by land and sea transportation modes with a transport that already has a transport permit from the Ministry of Environment and Forestry with the assistance of the Ministry of Transportation. Then, B3 waste is processed by means of thermal / kiln using licensed B3 waste beneficiaries. In the scope of Pupuk Indonesia Group, only PT Pupuk Kalimantan Timur has thermal B3 waste processing license for certain B3 wastes, including used cotton waste, laboratory liquid waste, and chemical packaging waste.
Data of B3 waste of PT Pupuk Indonesia (Persero) Subsidiaries
I. PT Pupuk Sriwidjaja Palembang
Total Waste B3
No. Type of B3 Waste Unit 2014 2015 2016 2017
1 Engine lubricant waste Ton 174.32 138.44 169.26 168.6
2 Laboratory waste Ton 2.26 1.2 2.06 4.905
3 Laboratory waste Ton 247.2 272.724 151.22 276.555
4 Used cartridges Ton - - 0.0635 0.2115
5 Used cells Ton 5.95 6.125 0.728 5.18
6 Used TL bulbs Ton 0.16 - 0.5949 0.1846
7 Rags Ton 0.133 0.17 0.02 0.09
9 Used resin Ton - 48.45 33.22 3.68
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No. Type of B3 Waste Unit 2014 2015 2016 2017
10 Used active carbon Ton - - 3.03 -
12 Used packaging Ton 1.24 1 12.008 23.322
13 Electronic waste Ton - 0.05 0.0178 0.024
14 Expired chemical substances Ton - 7.546 - 15.6593
15 Used lubricant filters Ton 0.673 4.204 0.06 0.512
16 B3-contaminated soil Ton - 24.36 - -
18 Used catalyst tubes Ton - - 4.48 -
19 Used air filters - 1.2 - -
Total Ton 431.94 505.47 376.76 498.9234
II. PT Pupuk Iskandar Muda
Total Waste B3
No. Type of B3 Waste Unit 2014 2015 2016 2017
1 Engine lubricant waste Ton 36.36 2.1 12 35.6
2 Laboratory waste Ton - - 0.13 -
3 Laboratory waste Ton 32.16 - 50 -
4 Used cells Ton 1.7 - - 0.45
5 Used TL bulbs Ton 0.05 0.04 - -
6 Rags Ton 0.05 0.04 0.01 -
7 Used resin Ton - - 27 -
Total Ton 70.32 2.18 89.14 36.05
III. PT Pupuk Kujang
Total Waste B3
No. Type of B3 Waste Unit 2014 2015 2016 2017
1 Engine lubricant waste Ton 34.92 23.22 12.96 12.6
2 Used catalysts Ton 77.4 - 145.24 -
3 Used cells Ton 2.706 1.295 1.1246 0.512
5 Used TL bulbs Ton 16.8 0.18 0.067 -
6 Rags Ton 1 0.84 0.197 -
7 Used resin Ton 33.04 1.66 12.46 11.7
8 Used active carbon Ton 1 40.99 - 30.52
9 Used air filters Ton - - 0.59 -
10 Expired chemical substances Ton - 22.188 1.573 -
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No. Type of B3 Waste Unit 2014 2015 2016 2017
11 Solvents Ton 3.96 14.448 - 18.74
12 Used raw materials Ton 20.98 - - -
13 CuAlCl4 slag Ton 15.35 16.17 - -
14 Glass woll Ton - 1 2.42 -
15 Gas mask filters Ton - 0.014 - -
16 Molsieve Ton 2.5 - - -
17 Used Battery Ton - 0.11 - -
18 AMDEA waste Ton - 0.975 - -
Total Ton 209.66 123.09 176.63 74.07
IV. PT Pupuk Kalimantan Timur Total Waste B3
No. Type of B3 Waste Unit 2014 2015 2016 2017
1 Used cells Ton 0.35 0.71 17.07 4.85
2 Laboratory waste Ton 2.82 2.50 1.10 2.8
3 Incinerator ash *) Ton 0.96 - - -
4 B3-contaminated waste Ton - - 9.20 38.5
B3 packaging/laboratory packaging 5 waste Ton 2.28 5.89 3.26 2.55
6 Used lubricants Ton 43.92 38.16 57.60 101.5
7 Resin/ion exchanger waste Ton - 24.82 47.45 32.5
8 Used cartridges and toners Ton 0.03 0.23 0.25 0.01
9 Used TL bulbs and mercury bulbs Ton 0.43 0.39 1.63 0.95
10 Printed circuit boards Ton - - - -
Used air contamination control 11 filters Ton - - 12.00 51.3
12 B3-contaminated rags Ton 0.51 0.84 1.84 1.87
13 Active carbon Ton - - 3.70 5.00
14 Used catalysts Ton 95.6 300.48 221.06 278.2
Used batteries from electronic 15 appliances Ton - - - -
Isolation material containing 16 asbestos Ton - - 31.20 140.1
17 Steel slag Ton - - - -
18 Used refractories Ton - - 32.50 58.5
19 Fly ash & bottom ash Ton 25.109 38.312.00 29.375.00 39.358.00
Total Ton 25.255.90 38.686.02 29.814.86 40.076.63
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V. PT Petrokimia Gresik Total Waste B3
No Type of B3 Waste Unit 2014 2015 2016 2017
1 Engine lubricant waste Ton 128.16 97.30 48.78 52.02
2 Laboratory waste Ton - - - 0.26
3 Used catalysts Ton 170.73 150.00 313.86 157.81
4 Used cartridges Ton 0.50 0.30 0.28 0.55
5 Used cells Ton 0.57 1.53 2.23 4.02
6 Used TL bulbs Ton 0.10 0.06 0.06 0.11
7 Rags Ton 0.25 0.27 0.25 0.69
8 Fly ash & bottom ash Ton 11,531 8,049 9,675 8,281
9 Expired chemical substances Ton - - - 22
10 Contaminated sawdust Ton 4 4 3 4
11 Gypsum Ton 561,450 1,040,338 1,720,941 1,727,491
12 Chalk Ton 154,585 305,084 511,218 146,055
13 Alumina ball Ton - - 53 -
Total Ton 727,870 1,353,725 2,242,257 1,882,069
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Non-B3 Waste Non-B3 waste in the form of organic waste made compost, paper waste, and non-organic waste partly recycled and sent to landfill. [GRI 306-2]
Generated non-B3 waste Business Unit Type of Waste Unit 2014 2015 2016 2017 PT Petrokimia Gresik Organic waste Ton 5,271 4,508 4,020 3,464 Non-organic waste Ton 5,471 4,736 4,068 3,501 Paper waste Ton 91 81 72 58 PT Pupuk Kujang Organic waste Ton 971 1,319 967 746 Non-organic waste Ton 603 454 402 436 Paper waste Ton 45 40 38 65 PT Pupuk Kalimantan Organic waste Ton 444 385 393 330 Timur Non-organic waste Ton 3,679 599 2,914 4,200 Paper waste Ton 29 237 288 239 PT Pupuk Iskandar Organic waste Ton 1,524 1,777 897 941 Muda Non-organic waste Ton 860 691 674 589
Paper waste Ton 5 4 4 4 PT Pupuk Sriwidjaja Organic waste Ton 1,795 473 421 509 Palembang Non-organic waste Ton 1,991 1,243 680 615 Paper waste Ton 15 12 9 11
Managed non-B3 waste Type of Business Unit Unit 2014 2015 2016 2017 Descriptions Waste PT Petrokimia Gresik Organic Ton 2,022 3,173 3,343 2,841 Composting waste Non-organic Ton 1,540 1,474 1,525 1,400 Recycle waste Paper waste 91.4 80.5 72 58 Recycle PT Pupuk Kujang Organic Ton 970.91 1.318.98 773.63 686.18 Composting waste Non-organic Ton 4.80 0.92 1.18 1.10 Recycle waste Paper waste Ton 0.09 0.09 0.06 - Recycle PT Pupuk Organic Ton 181.96 154.64 153.40 137.26 Composting Kalimantan Timur waste Non-organic Ton 734.65 138.74 2.035.27 3.767.47 Recycle waste Paper waste Ton - - - - Recycle PT Pupuk Iskandar Organic Ton 278.45 353.12 484.43 451.44 Composting Muda waste Non-organic Ton - - - - Recycle waste Paper waste Ton - - - - Recycle PT Pupuk Sriwidjaja Organic Ton 1795 473.25 420.5 508.7 Composting Palembang waste Non-organic Ton 1450.5 486.3 435.5 510 Recycle waste Paper waste Ton 14.97 12.21 8.8 11.02 Recycle *) A table with blank numbers means directly in the landfill to a third party
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Policy Supervision [GRI 307-1]
Survey of Environmental Satisfaction To see the public response to the role and contribution and corporate social responsibility, the assessment of environmental satisfaction, especially to the surrounding community, is conducted. The Environmental Performance Indicator or Key Performance Indicator (KPI) of Pupuk Indonesia Group management in 2017 showed the following results:
Result of Environmental Satisfaction Survey
2016
Company Number of respondents Score Level of Satisfaction
PT Pupuk Iskandar Muda 170 88,30 Highly satisfied
PT Pupuk Kalimantan Timur 193 86,53 Highly satisfied
PT Pupuk Sriwidjaja Palembang 183 83,50 Highly satisfied
PT Petrokimia Gresik 180 83,10 Highly satisfied
PT Pupuk Kujang Cikampek 185 92,51 Highly satisfied
PT Rekayasa Industri 180 93,92 Highly satisfied
Nilai Kepuasan PT Pupuk Indonesia (Persero) 87,98 Highly satisfied
2017
Company Number of respondents Score Level of Satisfaction
PT Pupuk Kujang 200 92,60 Highly satisfied
PT Pupuk Sriwidjaja Palembang 192 83,75 Highly satisfied
PT Petrokimia Gresik 180 85,04 Highly satisfied
PT Pupuk Kalimantan Timur 180 87,65 Highly satisfied
PT Pupuk Iskandar Muda 170 86,33 Highly satisfied
PT Rekayasan Industri 165 93,94 Highly satisfied
Nilai Kepuasan PT Pupuk Indonesia (Persero) 88,22 Highly satisfied
Referring to the above results exposure, the Key Performance Indicator (KPI) value of Environmental Satisfaction in Pupuk Indonesia Grop in 2017 is 88.22. This value is recorded to increase compared to the value of Environmental Satisfaction Survey in 2016 amounted to 87.98. With this increase, the survey results occupy a highly satisfying level.
Environmental Related Complaints Pupuk Indonesia Group’s commitment to and compliance with the rules and standards is also demonstrated by its receiving and managing any complaints from the public related to possible environmental disturbances. Pupuk Indonesia Group has a series of environmental related complaint management mechanisms involving at least 3 (three) functions in Pupuk Indonesia Group, i.e. Health, Safety, and Environment Department, Production Department, and Public Relations Department.
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The progress of complaints filed at the Pupuk Indonesia Group during 2017 is shown in the following table: Number of Complaints and Follow-Up Company Complaint Problem Number of Complaints Number of Complaints Number of Complaints Followed Completed PT Pupuk Kujang Water pollution 1 1 1 Other complaints 1 1 1 PT Pupuk Iskandar Ammonia odor 1 1 1 Muda Waste 1 1 1 PT Pupuk Sriwidjaja Other complaints 2 2 2 Palembang PT Petrokimia Gresik Ammonia odor 2 2 2 PT Pupuk Kalimantan Ammonia odor 8 8 8 Timur Other complaints 1 1 1
Most of the environmental complaints sent by communities living around the factory are complaints about ammonia smell. If rapid action is needed in terms of the smell of ammonia, operational control is carried out responsively. Similarly, regarding the settlement of waste pollution complaints about water bodies, Pupuk Indonesia continues to accommodate and resolve every complaint from the community in deliberation with the principle of win- win solution.
During the reporting period, every problems or complaints regarding environmental issues are resolved nicely and impartial to all parties fairly.
Environmental Investment 2017
Amount Rupiah No Description (2017) in million
1 Environmental Preservation 12,600
2 Consulting and Licensing Services 2,811
3 B3 Waste Management 44,075
4 Awareness 291
Total 59,777
The environmental investment for environmental management in 2017 totaled Rp59.78 billion. This fund is used for environmental maintenance activities, consultancy and licensing services, waste management, and environmental awareness campaigns.
Compliance with environmental regulations [GRI 307-1] PT Pupuk Indonesia Group has operated its operations by complying all laws and regulations. In 2017 we never againts the applicable laws and regulations in the environment field. In 2017 PT Pupuk Iskandar Muda get administrative sanction from the Ministry of Environment and Forestry and has been declared done by the issuance of the letter No. S.1093 / PHLHK / PPSA / GKM.0 / 11/2017 on the Fulfillment of Administrative Sanctions from the Ministry Environmental and forestry.
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DEVELOPING TOP-NOTCH PRODUCTS
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• Prioritizing Customer Health and • Product Packaging Information Safety • Commitment to Complying with • Responsibility of Product Information Regulations and Communication
Customer satisfaction is determinant factor for the success of the company. We care about our customers and are committed to delivering the best products and services to them.
Prioritizing Customer Health Customers’ suggestions and feedback are important and Safety [GRI 416-2] to us to improve our products’ quality. Therefore, Pupuk Indonesia runs a survey to know about customer Customers are the focus of Pupuk Indonesia, as they are satisfaction. In addition, the survey--containing current the one who support the success of this company. Our information from the field--also serves as the basis for mission is to efficiently produce and market prime- us to make the best decisions. The survey is undertaken quality fertilizer and agribusiness products for customer by independent party, with sampling method covering satisfaction. Customer satisfaction and fulfillment of their Indonesian territory. Our efforts of making customer needs are our focus, and we effectuate this through: satisfaction the first priority have borne fruits, reflected in • Producing quality fertilizer through quality customer survey result of “highly satisfied” and “satisfied” improvement efforts and emphasis on innovation. as shown in the table below. Furthermore, during the • Addressing customer responses and complaints. reporting period, there has not been any incident of • Being on alert to provide solution and anticipate violation related to health and safety of Pupuk Indonesia potential problems. Group’s product and service. • Nurturing good relations with customers and other stakeholders. • Ensuring that fertilizer is duly distributed, with the most efficient cost.
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Customer Survey Respondent Category of Pupuk Indonesia Group year 2017 Subsidized Fertilizer Customers of Non-Subsidized Fertiliser Customers of Non-Fertilizer Distributor Distributor Distributor Kiosk Exporter/Trader Exporter/Trader Farmer Plantation company Industry Industry
Survey Results of Customer Satisfaction Index of Pupuk Indonesia Group Year 2013-2017 2014 2015 2016 2017 Customer Satisfaction Index 4.22 4.24 4.19 4.26 Customer Dissatisfaction Index 1.68 1.60 1.70 1.51 Customer Loyalty Index 4.87 4.70 4.38 4.23
Customer Satisfaction Index of Non-Subsidized Fertilizer Year 2013-2017 Description Urea NPK Ammonia Customer Loyalty Index Value 4.32 4.08 4.24 Very satisfied Very satisfied Very satisfied Customer Satisfaction Index Value 4.82 4.00 4.41 Very satisfied Very satisfied Very satisfied Customer Dissatisfaction Index Value 1.48 1.55 1.44 Very satisfied Very satisfied Very satisfied
Even though our customers are mostly under “very • Implementation of solution satisfied” category, we welcome suggestions, complaints • Communicating the solution to customers. and queries of customers in relation to Pupuk Indonesia’s • Documenting and evaluating all incoming products and services. Looking into customer complaints for follow-up, including making necessary complaints, we have the opportunity to identify what improvements, to ensure that the same complaints do needs to be improved, which is essential for the progress not recur and to increase customer satisfaction. of our business. Therefore, we address each and every complaint thoroughly, in the following stages: Various communication channels are used to support a smooth communication between Pupuk Indonesia • Analysis of problems/complaints conveyed by the and its customers through official websites, emails, call customers, for subsequent follow up of the complaints centers, and social media such as: Twitter, and Instagram. by related units. • Identification of alternative solutions; • Determination of the solution
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Recapitulation of Customer Complaints of Pt Pupuk Indonesia Group 2017 Type Of Complaint Number Of Complaint Number Of Complaint Resolved Percentage Scarcity of Fertilizers 29 29 100 Fertilizer Non-Compliance 1 1 100 Complaint on Product 49 49 100 Disruption of Distribution 5 5 100 Issue of Service 9 9 100 Total 93 93 100
Responsibility of Product we ensure that every product is packaged in a special Information and material that is not easily broken, in order to prevent the Communication fertilizer from being spilled out. Therefore, the consumers would be protected from possibility of experiencing [GRI 417-2, GRI 417-3] health issues when storing or using the fertilizers. The general public needs to have clear information on every product packaged by Pupuk Indonesia. We believe Pupuk Indonesia formulated several programs to satisfy a good labeling increases efficiency and effectiveness of and to foster strong relationships with its customers, as the use of fertilizers as well as protect the public and the follows: environment from harmful effect as a result of excessive a. Subsidized Fertilizer Sales Territory Division. use. Therefore, on every packaging of fertilizer, we state In the distribution process of subsidized fertilizer, clear information on the content, time of circulation, Pupuk Indonesia refers to the Regulation of the usage instruction and all other important information Minister of Commerce No. 15/M-DAG/PER/4/2013 on related to the product. We enclose this information in Subsidized Fertilizers Procurement and Distribution such a way to make it clear and comprehensible. for the Agriculture Sector. We have also mapped Taking into account that fertilizer is a categorized as the regions so as to accelerate subsidized fertilizer hazardous and toxic substances if consumed by humans, distribution. It is expected that with this rayonization-
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-which allows shorter and less costly distribution of Subsidized Urea for the Agriculture Sector in Jambi route, farmers and farmers’ groups would be able to Province. obtain the required fertilizer at the right time and • Letter of the President Director of PT Pupuk Indonesia the right price. This fertilizer rayonization applies (Persero) No. U-1331/A00.UM/2016 dated 30 July to distribution of subsidized fertilizers, i.e. Urea and 2016 on the Accountability for the Procurement and organic fertilizer, in accordance with the following Distribution of Subsidized Organic Fertilizers for the regulations: Agriculture Sector. • Letter of the President Director of PT Pupuk • Letter of the President Director of PT Pupuk Indonesia Indonesia (Persero) No. U-1797/A00000.UM/2015 (Persero) rayon letter NPK No. U-1925/A00.UM/2016 dated 3 December 2015 on the Accountability for the dated 8 November 2016 on the Accountability for the Procurement and Provision of Subsidized Fertilizers Procurement and Distribution of Fertilizer. for the Agriculture Sector. • Letter of the President Director of PT Pupuk Indonesia b. integrated Fertilizer Outlet (Persero) No. U-1298/A00.UM/2016 dated 27 July To increase service for farmers, Pupuk Indonesia 2016 on the Changes to the Zoning of Accountability had engaged in fertilizer trading agreement contract for the Procurement and Distribution of Subsidized (SPJB) with various distributors and retailers. The Urea for the Agriculture Sector in West Kalimantan number of subsidized fertilizer distributors now Province. stands at 1,542 companies, consisting of 59 State • Letter of the President Director of PT Pupuk Owned Enterprises/ Regional Government Owned Indonesia (Persero) No. U-1674/A00.UM/2016 dated Enterprises, 149 cooperatives, and 1,344 private 26 September 2016 on the Changes to the Zoning of parties. It is expected that such sales system would Accountability for the Procurement and Distribution increase efficiency and effectiveness in fertilizer distribution to farmers.
PRODUCT PACKAGING INFORMATION
Call Centre
Content of Type of Fertilizer Fertilizer
Manufacturers SNI Logo and SNI Number
Net Weight
Manufacturers Address The Time of Circulation Registration Number
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c. Subsidized Fertilizer Coloring d. one-Brand Bag Uniformity In order to prevent abuse by unauthorized parties in There are times when farmers prefer certain brands the distribution of subsidized fertilizers, specific color as they are already familiar with them. This is despite indications are given. The color for urea fertilizer is the fact that similar products can be use when now pink, whereas the color for ZA fertilizer is orange. certain products are not available. The Company has This is intended to distinguish between subsidized implemented a one-brand bag uniformity in order to fertilizer (white colored) and commercial ones. The optimize service to farmers. When demand rises, we change in color does not affect the compositions would recommend farmers to be flexible in choosing and contents. Both fertilizers remain safe for usage, similar products. Thus the supply of fertilizer of have eco-friendly characteristics, and will not poison guaranteed excellence quality can be made. This also the crops as they are produced from nonhazardous facilitates supervision. The one-brand bag uniformity materials and are soluble in water. methodology has been applied to subsidized urea and organic fertilizers.
1 Subsidized Urea 2 Subsidized NPK Phonska
3 Subsidized SP-36 4 Subsidized ZA 5 Subsidized Organic
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e. Joint Promotion/Sponsorship and Counselling • Undertaking distribution service contract, for For enhancing overall effectiveness and efficiency a period of 3 years, with the Subsidiaries, as an in promotion, Pupuk Indonesia strives to achieve implementation of the Cost Reduction Program synergy in joint promotion/sponsorship and national- (CRP). scaled counseling activities. These counselling • Putting synergy in distribution, between PT activities are also beneficial to farmers as we are Pupuk Indonesia Logistik and fertilizer-producing backed with advance technology to improve farmers’ subsidiaries. business. On several occasions, the counselling was h. Fertilizer Inventory Management organized in collaboration with related institutions in We apply rules to increase efficiency and effectiveness the agriculture sector. in fertilizer distribution, which include: f. Direct Selling to End Users for Commercial Sector • Implementation of the Subsidized Fertilizer By direct selling to end users, Pupuk Indonesia and its Inventory Control Guidelines subsidiaries are expected to offer the best price and • Implementation of Optimum Fertilizer Inventory provide optimum service to the end users, which in Control Guidelines turn will foster customer loyalty. To facilitate customers and other stakeholders in g. Distribution Improvements obtaining information on product and company Distribution route is a significant factor in the profile, Pupuk Indonesia provides various facilities distribution of our fertilizers. Smooth distribution and channels made accessible. process benefits the customers and supports the Company’ efficiency. For this objective, we apply the During the reporting period there was no incidence of following strategies: non-compliance with regulations relating to labeling and product and service information. And there are no incidents of non-compliance related to marketing communications.
Information Support Requirements Effectiveness Measurement Company profile, Info Product, Website: www.pupuk-indonesia.com Easy access Number of visit Distributor Products and services Telepon: 0800-100-800-1 Toll free Response Time Product and Activity Advertisement Informative Brochure, Informative Information content Information Print Media, Electronic Media Facsimile: 201-80647955 Email: pemasaran@pupuk-indonesia. com Instagram: @pt.pupukindonesia Twitter: @pupuk_indonesia
Pupuk Indonesia also opens a communication channel to accommodate the customers to provide input for advancing our business: Segment Customer Media Customer Group Survey e-mail Fax Call Center AE Service Facebook Subsidy Farmers √ √ √ Non subsidy Plantation √ √ √ √ √ √ Industry √ √ √ √ √ √ Export Trader √ √ √ √ √ √
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The customer input management process is in the mechanisms as follows: Customer Care Mechanism Based on Market Segmentation Segment Customer Group Requirements Products Mechanism and Expectations Availability Urea Sales representative NPK Forum Group Discussion (FGD) Subsidy Farmers SP-36 Product Quality ZA Organic Product Quality Urea Sales representative Forum Group Discussion (FGD) Toll Free Phone Service, SMS, Customer Survey, Plantation Website Product Type NPK Non subsidy Price
Product Quality urea Toll Free Phone Service, SMS, Customer Survey, Industry Website Price ammoniac Product Quality Urea Sales representative Forum Group Discussion (FGD) Export Trader Phone Service, SMS, Customer Survey, Website Price npk
Customer communication channel of product quality, customer support and transactions Type Feedback Customer Survey Letter/e-mail Call center SR/AE Product quality √ √ √ √ Customer support √ √ √ √ Transaction √ √ √ √
Customer Support Channel Requirement Account Executive (AE) Service Always ready for 1 x 24 hours to handle issues on site, based on scope of responsibility Group Discussion Forum At the latest within 2 x 24 hours has been submitted to related parties to be followed up Call Center - Toll free - 3x incoming call must be answered - Answering machine SMS Centre - Toll free - At the latest within 2 x 24 hours has been answered Letter/Email - At the latest within 2 x 24 hours has been answered
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Commitment to Complying 2. Providing and distributing production and with Regulations [GRI 419-1] distribution facilities of unhulled rice/rice, and 3. Providing and managing the Government’s unhulled It is our commitment to the compliance with all applicable rice/rice supply. rules and regulations, as we aim to maintain Pupuk Indonesia Group’s business growth and soundness. Pupuk Indonesia has been appointed being one of the During the reporting period of 2017, no legal breach GP3K operators, with total assigned area as follows: occurred in relation to anti-competition, anti-trust, as • Year 2011 - 100,000 hectares well as monopoly practices, that may harm the industry • Year 2013 - 1,000,000 hectares in general. • Year 2014 - 1,200,000 hectares • Year 2016 - 1,380,000 hectares, or 75.2% of the target, We demonstrate our commitment to regulation with average rice productivity of 1.13 tons/ha, or 20% compliance by implementing the Corporation-Based higher than the preceding planting season’s figure. Food Production Enhancement Movement (GP3K). The • Year 2017 - crop realization reached 844,444 hectares, GP3K is an embodiment of the Presidential Instruction or 64,1% of the target and 5.7% higher than the No. 5/2011 on National Rice Production Security realization in 2016. The average rice production in to Overcome Extreme Climate. In this Presidential 2017 was 6.6 million tons per year. Instruction, the SOE Ministry has the following duties: 1. Providing land in forest area with production intercropping scheme for rice crops.
134 PT Pupuk Indonesia (Persero) Sustainability Report 2017 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING PUPUK DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work INDONESIA COMMUNITY GOVERNANCE economies RESOURCES OF WELFARE Atmosphere INDIVIDUALS WELFARE PUPUK INDONESIA
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Limitations Independent Assurance Statement . Responsiveness Report No.0418/BD/0010/JK Our scope of work was limited to a review of the Responding to meeting stakeholder expectations is
accuracy and reliability of specified data and interviews increasingly important and an assessment was To the management of PT Pupuk Indonesia Scope of Assurance with data providers, persons in charge of data carried out to determine whether PTPI demonstrates (Persero) collection and processing, as well as persons in charge its accountability in responding to them. We provided Type 2 assurance engagement under of sustainability performance-related information. Our engagement by PT Pupuk Indonesia (Persero) AA1000AS (2008). This involved: PTPI's allocation of resources to stakeholder (‘PTPI’) was to provide assurance in respect to its 1) assessment of PTPI’s adherence to the AA1000 Conclusions engagement, the timeliness and accessibility of Sustainability Report 2017 (‘the Report’). This AccountAbility Principles Standard (2008); and reported information, and the types of engagement was carried out by our multi-disciplined 2) assessment of the accuracy and quality of specified Conclusions in regard to adherence to the AA1000 communication mechanisms regularly employed assurance team who bring a wealth of experience to sustainability performance information contained AccountAbility Principles of Inclusivity, Materiality were all indicative of its responsiveness to key complement their diverse skills, and thus bring a high within the Report, in relation to the agreed scope, and Responsiveness include the following findings: stakeholder concerns and expectations. level of competence to conducting the assurance which consisted of:
engagement. Partnership and community stewardship program . Inclusivity As in other areas, however, vigilance is key and we An assessment was made on whether PTPI has Occupational health and safety recommend that PTPI continues to monitor and Independence included all key stakeholders in developing and Environmental management. improve stakeholder engagement procedures on a achieving an accountable and strategic response to regular basis in future reports. We were not involved in the preparation of any key part sustainability issues. Responsibility of the Report and carried out all assurance undertakings with independence and autonomy. We did not provide PTPI is responsible for all information and claims Our assessment determined that PTPI has an any services to PTPI during 2017 that could conflict contained in the Report. These include established effective system in place for key stakeholders to Based on our limited assurance engagement, nothing with the independence of the assurance engagement. sustainability management targets, performance participate in the development of the organization's has come to our attention that causes us to believe that management, data collection, etc. as well as report response in the context of sustainability, thus the data of the Report has been materially misstated. Assurance Standards preparation. Our responsibility to the management of demonstrating a strong commitment to stakeholder PTPI in performing this engagement, meanwhile, is inclusivity. The conduct of needs assessment All key assurance findings are included herein, while We conducted our work in accordance with ISAE3000 solely for the purposes of verifying its statements surveys and materiality level survey of the key detailed observations and follow-up recommendations ‘Assurance Engagements other than Audits or Reviews relating to its sustainability performance, specifically as stakeholder groups were prime examples of PTPI’s have been submitted to PTPI management in a separate of Historical Financial Information’ issued by the described in the agreed scope, on which we are concern. report. International Auditing and Accounting Standards Board. responsible to express our conclusions. In addition, we have also planned and carried out our Nevertheless, we recommend that PTPI continues to Jakarta, April 20, 2018 work in accordance with AA1000AS (2008) ‘AA1000 Methodology monitor its stakeholder inclusivity systems and Assurance Standards (2008)’, issued by AccountAbility. procedures on a regular basis, plus implement In assessing the veracity of certain assertions and improvements where these will strengthen the specified data sets included within the report, as well as Level of assurance and criteria used effectiveness of inclusivity. the systems and processes used to manage and report Our evidence-gathering procedures were designed to these, we employed the following methods during the . Materiality engagement process: With stakeholders requiring material information on obtain a limited level of assurance based on ISAE3000 James Kallman Reviewed report, internal policies, documentation, and a moderate level of assurance engagement as set out which to base their informed judgments, decisions Chief Executive Officer management and information systems and actions, an assessment was carried out to in AA1000AS (2008), thus providing confidence to Interviewed staff involved in sustainability-related readers by reducing risks or errors to a very low level, determine the extent to which PTPI has included Moores Rowland is an international organization management and reporting such information in the Report. but not necessarily to zero. Moreover, the AA1000 specializing in audit, accounting, tax, legal and AccountAbility Principles Standard (2008) of Followed data trails to the initial aggregated advisory services. Moores Rowland is a member of Key material issues were adequately reported and Inclusivity, Materiality and Responsiveness was also source, checking samples of data to a greater depth. Praxity AISBL, the world's largest Alliance of balanced information provided about PTPI's used as criteria in evaluating the Report. independent and unaffiliated audit and consultancy sustainability performance, indicative of its strong companies. commitment in this field. With the breadth of
information required continuing to widen, however, With more than 33,400 professionals operating in 97 we recommend that PTPI continues to play close countries across the globe, each sharing the same attention to conducting materiality tests on a regular values and sense of responsibility, Praxity is served by basis in future reports. Moores Rowland in Indonesia, one of the leading sustainability assurance providers. PT. Moores Rowland Indonesia PT. Moores Rowland Indonesia Jl. Sisingamangaraja No. 26 – Jakarta Selatan 12120 - Indonesia Jl. Sisingamangaraja No. 26 – Jakarta Selatan 12120 - Indonesia Tel: +62 21 720 2605 - Fax: +62 21 720 2606 - www.moores-rowland.com Tel: +62 21 720 2605 - Fax: +62 21 720 2606 - www.moores-rowland.com
136 PT Pupuk Indonesia (Persero) Sustainability Report 2017 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING PUPUK DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work INDONESIA COMMUNITY GOVERNANCE economies RESOURCES OF WELFARE Atmosphere INDIVIDUALS WELFARE PUPUK INDONESIA
Limitations . Responsiveness Our scope of work was limited to a review of the Responding to meeting stakeholder expectations is accuracy and reliability of specified data and interviews increasingly important and an assessment was with data providers, persons in charge of data carried out to determine whether PTPI demonstrates collection and processing, as well as persons in charge its accountability in responding to them. of sustainability performance-related information. PTPI's allocation of resources to stakeholder Conclusions engagement, the timeliness and accessibility of reported information, and the types of Conclusions in regard to adherence to the AA1000 communication mechanisms regularly employed AccountAbility Principles of Inclusivity, Materiality were all indicative of its responsiveness to key and Responsiveness include the following findings: stakeholder concerns and expectations.
. Inclusivity As in other areas, however, vigilance is key and we An assessment was made on whether PTPI has recommend that PTPI continues to monitor and included all key stakeholders in developing and improve stakeholder engagement procedures on a achieving an accountable and strategic response to regular basis in future reports. sustainability issues.
Our assessment determined that PTPI has an effective system in place for key stakeholders to Based on our limited assurance engagement, nothing participate in the development of the organization's has come to our attention that causes us to believe that response in the context of sustainability, thus the data of the Report has been materially misstated. demonstrating a strong commitment to stakeholder inclusivity. The conduct of needs assessment All key assurance findings are included herein, while surveys and materiality level survey of the key detailed observations and follow-up recommendations stakeholder groups were prime examples of PTPI’s have been submitted to PTPI management in a separate concern. report.
Nevertheless, we recommend that PTPI continues to Jakarta, April 20, 2018 monitor its stakeholder inclusivity systems and procedures on a regular basis, plus implement improvements where these will strengthen the effectiveness of inclusivity.
. Materiality With stakeholders requiring material information on James Kallman which to base their informed judgments, decisions Chief Executive Officer and actions, an assessment was carried out to
determine the extent to which PTPI has included Moores Rowland is an international organization such information in the Report. specializing in audit, accounting, tax, legal and
advisory services. Moores Rowland is a member of Key material issues were adequately reported and Praxity AISBL, the world's largest Alliance of balanced information provided about PTPI's independent and unaffiliated audit and consultancy sustainability performance, indicative of its strong companies. commitment in this field. With the breadth of
information required continuing to widen, however, With more than 33,400 professionals operating in 97 we recommend that PTPI continues to play close countries across the globe, each sharing the same attention to conducting materiality tests on a regular values and sense of responsibility, Praxity is served by basis in future reports. Moores Rowland in Indonesia, one of the leading sustainability assurance providers. PT. Moores Rowland Indonesia Jl. Sisingamangaraja No. 26 – Jakarta Selatan 12120 - Indonesia Tel: +62 21 720 2605 - Fax: +62 21 720 2606 - www.moores-rowland.com
PT Pupuk Indonesia (Persero) Sustainability Report 2017 137 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING PUPUK DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work INDONESIA COMMUNITY GOVERNANCE economies RESOURCES OF WELFARE Atmosphere INDIVIDUALS WELFARE PUPUK INDONESIA
Statement GRI Standards Core in Accordance Check
Statement GRI Standards Core in Accordance Check
The National Center for Sustainability Reporting (NCSR) has conducted a GRI Standards Core in Accordance Check on the PT Pupuk Indonesia (Persero) Sustainability Report 2017 (“Report”). The check communicates the extent to which the GRI Standards Core criteria has been applied in the Report. The check does not provide an opinion on the sustainability performance of the reporter or the quality of the information provided in the report.
We conclude that this Report has been prepared in accordance with GRI Standards: Core option.
Jakarta, 18 April 2018
National Center for Sustainability Reporting
Dewi Fitriasari, Ph.D., CSRA, CMA Director
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Index standard gri [GRI 102-55]
Disclosure GRI Standard Page No Title
General Disclosure
GRI 102 General Organization Profile Disclosure 2016
102-1 Name of the organization 22
102-2 Activities, brands, products, and services 23
102-3 Location of headquarters 22
102-4 Location of operations 22
102-5 Ownership and legal form 22
102-6 Markets served 22
102-7 Scale of the organization 28
102-8 Information on employees and other workers 66
102-9 Supply chain 30
102-10 Significant changes to the organization and its supply chain 16
102-11 Precautionary Principle or approach 101
102-12 External initiatives 46
102-13 Membership of associations 46
Strategy
102-14 Statement from senior decision-maker 35, 37
Ethics and Integrity
102-16 Values, principles, standards, and norms of behavior 30
Governance
102-18 Governance structure 42
Stakeholder Engagement
102-40 List of stakeholder groups 46
102-41 Collective bargaining agreements 97
102-42 Identifying and selecting stakeholders 46
102-43 Approach to stakeholder engagement 46
102-44 Key topics and concerns raised 46
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Disclosure GRI Standard Page No Title
Reporting practice
102-45 Entities included in the consolidated financial statements 16
102-46 Defining report content and topic Boundaries 16, 17
102-47 List of material topics 18
102-48 Restatements of information 16
102-49 Changes in reporting 16
102-50 Reporting period 16
102-51 Date of most recent report 15
102-52 Reporting cycle 15
102-53 Contact point for questions regarding the report 19
102-54 Claims of reporting in accordance with the GRI Standards 15
102-55 GRI content index 15
102-56 External Assurance 19
SPECIFIC TOPIC DISCLOSURE
ECONOMY IMPACT
Economic Performance
GRI 103 Management 103-1 Explanation of the material topic and its Boundary 18 Approach 2016 103-2 The management approach and its components 52-59
103-3 Evaluation of the management approach 52-59
GRI 201 Economic 201-1 Direct economic value generated and distributed 52 Performance 201-2 Financial Implications and Other Risks and Opportunities due 59 to Climate Change
201-4 Financial Assistance Received from Government 57
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Disclosure GRI Standard Page No Title
Indirect Economic Impacts
GRI 103 Management 103-1 Explanation of the material topic and its Boundary 18 Approach 2016 103-2 The management approach and its components 56-57
103-3 Evaluation of the management approach 56-57
GRI 103 Significant 203-1 Infrastructure Investments and Services Supported 56 indirect economic impacts 203-2 Significant indirect economic impacts 57
Procurement Practice
GRI 204 Management 103-1 Explanation of the material topic and its Boundary 18 Approach 2016 103-2 The management approach and its components 56
103-3 Evaluation of the management approach 56
GRI 204 Procurement 204-1 Proportion of Spending on Local Suppliers 56 Practice
Anti-Corruption
GRI 103 Management 103-1 Explanation of the material topic and its Boundary 18 Approach 2016 103-2 The management approach and its components 44-45
103-3 Evaluation of the management approach 44-45
GRI 205 Anti- 205-1 Operations assessed for risks related to corruption 45 Corruption 205-2 Communication and training about anticorruption policies 44 and procedures
ENVIRONMENTAL IMPACT
Materials
GRI 103 Management 103-1 Explanation of the material topic and its Boundary 18 Approach 2016 103-2 The management approach and its components 102
103-3 Evaluation of the management approach 102
GRI 301 Materials 301-1 Materials used by weight or volume 102
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Disclosure GRI Standard Page No Title
Energy
GRI 103 Management 103-1 Explanation of the material topic and its Boundary 18 Approach 2016 103-2 The management approach and its components 105-107
103-3 Evaluation of the management approach 105-107
GRI 102 Energy 302-1 Energy consumption within the organization 105
302-3 Energy intensity 107
302-4 Reduction of energy consumption 107
Water
GRI 103 Management 103-1 Explanation of the material topic and its Boundary 18 Approach 2016 103-2 The management approach and its components 108-110
103-3 Evaluation of the management approach 108-110
GRI 303 Water 303-1 Water withdrawal by source 108
303-3 Water Recycled and Reused 110
Emissions
GRI 103 Management 103-1 Explanation of the material topic and its Boundary 18 Approach 2016 103-2 The management approach and its components 111-113
103-3 Evaluation of the management approach 111-113
GRI 305 Emissions 305-1 Direct (Scope 1) GHG emissions 111
305-2 Energy indirect (Scope 2) GHG emissions 112
305-4 Greenhouse Gas Emission Intensity 112
305-5 Reduction of GHG emissions 112
305-7 Nitrogen oxides (NOX), sulfur oxides (SOX), and other 113 significant air emissions
Effluents and Waste
GRI 103 Management 103-1 Explanation of the material topic and its Boundary 18 Approach 2016 103-2 The management approach and its components 116-112
103-3 Evaluation of the management approach 116-112
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Disclosure GRI Standard Page No Title
GRI 306 Effluents And 306-1 Water discharge by quality and destination 116 Waste 306-2 Waste by type and disposal method 112
306-4 Transport of Hazardous Waste 116
Environmental Compliance
GRI 103 Management 103-1 Explanation of the material topic and its Boundary 18 Approach 2016 103-2 The management approach and its components 123-124
103-3 Evaluation of the management approach 123-124
GRI 307 Environmental 307-1 Non-compliance with environmental laws and regulations 123-124 Compliance
SOCIAL IMPACT
Employment
GRI 103 Management 103-1 Explanation of the material topic and its Boundary 18 Approach 2016 103-2 The management approach and its components 68, 76
103-3 Evaluation of the management approach 68, 76
GRI 401 Employment 401-1 New employee hires and employee turnover 68
401-2 Benefits provided to full-time employees that are not provided 76 to temporary or part-time employees
Occupational Health and Safety
GRI 103 Management 103-1 Explanation of the material topic and its Boundary 18 Approach 2016 103-2 The management approach and its components 94-98
103-3 Evaluation of the management approach 94-98
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Disclosure GRI Standard Page No Title
GRI 403 Occupational 403-1 Workers representation in formal joint management worker 97 Health and Safety health and safety committees
403-2 Types of injury and rates of injury, occupational diseases, lost 94, 97 days, and absenteeism, and number of work-related fatalities
403-3 Workers with High Incidence or High Risk Diseases related to 98 Their Occupation
403-4 Health and safety topics covered in formal agreements with 97 trade unions
Training and Education
GRI 103 Management 103-1 Explanation of the material topic and its Boundary 18 Approach 2016 103-2 The management approach and its components 72-77
103-3 Evaluation of the management approach 72-77
GRI 404 Training And 404-1 Average hours of training per year per employee 72 Education 404-2 Programs for upgrading employee skills and transition 72, 77 assistance programs
404-3 Percentage of Employees Receiving Regular 74 Performance and Career Development Reviews
Diversity and Equal Opportunity
GRI 404 Management 103-1 Explanation of the material topic and its Boundary 18 Approach 2016 103-2 The management approach and its components 69-74
103-3 Evaluation of the management approach 69-74
GRI 103 Diversity And 405-1 Diversity of governance bodies and employees 69, 70, 74 Equal Opportunity 405-2 Ratio of basic salary and remuneration of women to men 74
Local Communities
GRI 405 Management 103-1 Explanation of the material topic and its Boundary 18 Approach 2016 103-2 The management approach and its components 80
103-3 Evaluation of the management approach 80
GRI 413 Local 413-1 Operations with Local Community Engagement, Impact 80 Communities Assessments and Development Programs
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Disclosure GRI Standard Page No Title
Public Policy
GRI 103 Management 103-1 Explanation of the material topic and its Boundary 18 Approach 2016 103-2 The management approach and its components 45
103-3 Evaluation of the management approach 45
GRI 415 Public Policy 415-1 Political Contributions 45
Customers Health and Safety
GRI 103 Management 103-1 Explanation of the material topic and its Boundary 18 Approach 2016 103-2 The management approach and its components 127
103-3 Evaluation of the management approach 127
GRI 416 Customers 416-2 Incidents of non-compliance concerning the health and safety 127 Health and Safety impacts of products and services
Marketing and Labeling
GRI 103 Management 103-1 Explanation of the material topic and its Boundary 18 Approach 2016 103-2 The management approach and its components 129
103-3 Evaluation of the management approach 129
GRI 417 Marketing and 417-2 Incidents of non-compliance concerning product and service 129 Labeling information and labeling
417-3 Incidents of non-compliance concerning marketing 129 communications
Socio Economic Compliance
GRI 103 Management 103-1 Explanation of the material topic and its Boundary 18 Approach 2016 103-2 The management approach and its components 134
103-3 Evaluation of the management approach 134
GRI 419 Socio 419-1 Non-compliance with Laws and Regulations in the Social and 134 economic Compliance Economic Area
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sdg’s link in gri standard
Materiality Link in the Report Link to SDGs
Topic specific standard:[GR I 200] ECONOMIC
Topic specific disclosure [GRI 201] Fostering the Prosperity of the Country Economic Performance
Disclosure [GRI 201-2] Financial implications and other risks Fostering the Prosperity of the Country and opportunities due to climate change
Disclosure [GRI 201-4] Financial assistance received from Fostering the Prosperity of the Country government
Topic specific disclosure: [GRI 203] INDIRECT ECONOMIC IMPACTS
Disclosure [GRI 203-1] Infrastructure investments and services Cultivating Employees’ Performance Reliability supported
Disclosure [GRI 203-2] Cultivating Employees’ Performance Reliability Significant indirect economic impacts
146 PT Pupuk Indonesia (Persero) Sustainability Report 2017 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING PUPUK DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work INDONESIA COMMUNITY GOVERNANCE economies RESOURCES OF WELFARE Atmosphere INDIVIDUALS WELFARE PUPUK INDONESIA
Materiality Link in the Report Link to SDGs
Topic specific disclosure: [GRI 204] PROCUREMENT PRACTICES
Disclosure [GRI 204-1] Proportion of spending on local suppliers Fostering the Prosperity of the Country
Topic specific disclosure: [GRI 205] ANTI-CORRUPTION
Disclosure [GRI 205-1] Cultivating Employees’ Performance Reliability Operations assessed for risks related to corruption
Disclosure [GRI 205-2] Communication and training about anti- corruption policies and procedures Topic specific standard: [GRI 300] ENVIRONMENTAL
Topic specific disclosure: [GRI 301] MATERIALS
Disclosure [GRI 301-1] Cultivating Sustainability for the Future Materials used by weight or volume
Topic specific disclosure:[GR I 302] ENERGY
Disclosure [GRI 302-1] Cultivating Sustainability for the Future Energy consumption within the organization
Disclosure [GRI 302-3] Energy intensity
Disclosure [GRI 302-4] Reduction of energy consumption
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Materiality Link in the Report Link to SDGs
Topic specific disclosure:[GR I 303] WATER
Disclosure [GRI 303-1] Cultivating Sustainability for the Future Water withdrawal by source
Disclosure [GRI 303-3] Water recycled and reused
Topic specific disclosure:[GR I 303] Cultivating Sustainability for the Future BIODIVERSITY Habitats Protected or Restored
Topic specific disclosure:[GR I 305] EMISSIONS
Disclosure [GRI 305-1] Cultivating Sustainability for the Future Direct (Scope 1) GHG emissions
Disclosure [GRI 305-2] Energy indirect (Scope 2) GHG emissions
Disclosure [GRI 305-4] GHG emissions intensity
Disclosure [GRI 305-5] Reduction of GHG emissions
Disclosure [GRI 305-7] Nitrogen oxides (NOX), sulfur oxides (SOX), and other significant air emissions
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Materiality Link in the Report Link to SDGs
Topic specific disclosure:[GR I 306] EFFLUENTS AND WASTE
Disclosure [GRI 306-1] Cultivating Sustainability for the Future Water discharge by quality and destination
Disclosure [GRI 306-2] Waste by type and disposal method
Disclosure [GRI 306-4] Transport of hazardous waste Topic specific disclosure:[GR I 307] ENVIRONMENTAL COMPLIANCE
Disclosure: [GRI 307-1] Non-compliance with environmental laws Cultivating Sustainability for the Future and regulations
Topic specific disclosure:[GR I 400] SOCIAL
Topic specific disclosure:[GR I 401] EMPLOYMENT
Disclosure: [GRI 401-1] Cultivating Employees’ Performance Reliability New employee hires and employee turnover
Disclosure: [GRI 401-2] Cultivating Employees’ Performance Reliability Benefits provided to full-time employees that are not provided to temporary or part-time employees
Topic specific disclosure:[GR I 403] OCCUPATIONAL HEALTH AND SAFETY
Disclosure: [GRI 403-1] Cultivating Employees’ Performance Reliability Workers representation in formal joint management–worker health and safety committees
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Materiality Link in the Report Link to SDGs
Disclosure: [GRI 403-2] Cultivating Employees’ Performance Reliability Types of injury and rates of injury, occupational diseases, lost days, and absenteeism, and number of work-related fatalities
Disclosure: [GRI 403-3] Cultivating Employees’ Performance Reliability Workers with high incidence or high risk of diseases related to their occupation
Disclosure: [GRI 403-4] Cultivating Employees’ Performance Reliability Health and safety topics covered in formal agreements with trade unions Topic specific disclosure:[GR I 404] TRAINING AND EDUCATION
Disclosure: [GRI 404-1] Average hours of training per year per Cultivating Employees’ Performance Reliability employee
Disclosure: [GRI 404-2] Programs for upgrading employee skills and transition assistance programs Cultivating Employees’ Performance Reliability
Disclosure: [GRI 404-3] Percentage of employees receiving regular performance and career development reviews Cultivating Employees’ Performance Reliability
Topic specific disclosure:[GR I 405] DIVERISTY AND EQUAL OPPORTUNITY
Disclosure: [GRI 405-1] Cultivating Employees’ Performance Reliability Diversity of governance bodies and employees
Disclosure: [GRI 405-2] Ratio of basic salary and remuneration of Cultivating Employees’ Performance Reliability women to men
150 PT Pupuk Indonesia (Persero) Sustainability Report 2017 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING PUPUK DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work INDONESIA COMMUNITY GOVERNANCE economies RESOURCES OF WELFARE Atmosphere INDIVIDUALS WELFARE PUPUK INDONESIA
Materiality Link in the Report Link to SDGs
Topic specific disclosure:[GR I 413] LOCAL COMMUNITIES
Disclosure: [GRI 413-1] Operations with local community Cultivating Welfare in Togetherness engagement, impact assessments, and development programs
Topic specific disclosure:[GR I 415] PUBLIC POLICY
Disclosure: [GRI 415-1] Cultivating Sustainable Governance Political contributions
Topic specific disclosure:[GR I 416] CUSTOMER HEALTH AND SAFETY
Disclosure: [GRI 416-2] Incidents of non-compliance concerning the health and safety impacts of products Cultivating Pride in Our Products and services
PT Pupuk Indonesia (Persero) Sustainability Report 2017 151 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING PUPUK DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work INDONESIA COMMUNITY GOVERNANCE economies RESOURCES OF WELFARE Atmosphere INDIVIDUALS WELFARE PUPUK INDONESIA
Materiality Link in the Report Link to SDGs
Topic specific disclosure:[GR I 417] MARKETING AND LABELING
Disclosure: [GRI 417-2] Incidents of non-compliance concerning Cultivating Pride in Our Products product and service information and labeling
Disclosure: [GRI 417-3] Incidents of non-compliance concerning Cultivating Pride in Our Products marketing communications Topic specific disclosure:[GR I 419] SOCIOECONOMIC COMPLIANCE
Disclosure: [GRI 419-1] Cultivating Pride in Our Products Non-compliance with laws and regulations in the social and economic area
152 PT Pupuk Indonesia (Persero) Sustainability Report 2017 ABOUT PUPUK INDONESIA REPORT TO DEVELOPING DEVELOPING DEVELOPING DEVELOPING Attaining a DEVELOPING PUPUK DEVELOPING THE REPORT PROFILE STAKEHOLDER SUSTAINABLE STAKEHOLDERS’ COMPETENT HUMAN COMMUNITY Healthy Work INDONESIA COMMUNITY GOVERNANCE economies RESOURCES OF WELFARE Atmosphere INDIVIDUALS WELFARE PUPUK INDONESIA
PT Pupuk Indonesia (Persero) Sustainability Report 2017 153 Sustainability Report
SYNERGY for Sustainability
PT Pupuk Indonesia (Persero) Kantor Pusat | Head Office Jalan Taman Anggrek, Kemanggisan Jaya, Jakarta 11480, Indonesia Telepon | Phone (hunting): +62 21 536 54900 Faksimile | Facsimile: +62 21 80647955 Email: [email protected] Website: http://www.pupuk-indonesia.com Layanan Informasi | For further information 0800-1-008001 (Toll Free)