Sustainability Report 2019 PT Perusahaan Gas Negara Tbk 1 Remarks

PT Perusahaan Gas Negara Tbk Maintain Sustainability Open to a Sustainable World

sustainability report 2019 Economy Maintaining the National Environment Maintain Sustainable the Country Maintaining Prosperity of

Employees Quality of Pg n Maintaining the and Safety Maintaining Occupational Health Safety Maintaining the Customer Health and G overnance Sustainability Report About the 2 PT Perusahaan Gas Negara Tbk Sustainability Report 2019

Open to a Sustainable World

After 55 years of experience in delivering clean and affordable energy, PGN continues to build a strong reputation as a company that embraces and works toward sustainability. In addition, we pursue growth by building on infrastructure, especially after we received the trust to serve as Pertamina’s Gas Subholding in 2019.

For the purpose of sustainability, we invest time and effort in building successful partnership with customer, suppliers, as well as communities in Indonesia and abroad. We are dedicated to open to a sustainable world, record business-scale growth, and support improved environmental quality through development of the natural gas and energy business for all stakeholders. Sustainability Report 2019 PT Perusahaan Gas Negara Tbk 1

Table of Contents Remarks

2 SUSTAINABILITY OVERVIEW 104 MAINTAINING OCCUPATIONAL HEALTH AND 2 GCG Skor 07 SAFETY 2 Ekonomc 107 Occupational Health and Safety Policy and 3 Social Program 4 Environment 108 OHS In Collective Labour Agreement Maintain

108 OHS In PGN Management System Sustainability 6 REMARKS 112 Occupational Safety Road Map Implementation 01 8 Remarks from the President Commisioner 113 Occupational Health Road Map Implementation 12 Remarks from the President Director 113 OHS Program 115 OHS Performance 2019 18 MAINTAIN SUSTAINABILITY 121 OHS Awards

02 21 About PGN Economy Maintaining 22 Location of Operations 122 MAINTAINING THE CUSTOMER SAFETY AND the National 24 Scale of The Organisation 08 HEALTH 24 Business Line 125 Quality Assurance 26 Main Business Unit 125 Product Information 28 Customer 125 Priority for Customer Safety 29 Market Share 126 Delivering Quality According to Regulation and 30 Vission Mission Standards

32 Corporate Culture 126 Providing Service at Its Best Environment 34 5 Cultural Values and 10 Main Behaviours of 127 Customer Interaction PGN Group Personnel 128 Assuring Customer Satisfaction 38 Information of Subsidiaries and Affiliated 128 Customer Card Maintain Sustainable Companies 128 Latest Technology 40 The Company’s Brief History 128 Network Expansion 42 The Company’s Milestone 130 SUSTAINABILITY GOVERNANCE 44 MAINTAINING THE NATIONAL ECONOMY 09 133 Basic Implementation of GGC the Country Maintaining 03 47 PGN’s Contribution to The National Economy 134 Objectives of Gcg Implementation Prosperity of 48 Contribution to The State 134 Governance Structure 48 Contributions to Regions 142 Identifying and Managing Economic, 50 Supply Chain Environmental, And Social Impacts 52 Key Impacts, Risks, and Opportunities 142 Review of Economic, Environmental, And Social 53 Risk Management Topics Employees 55 Financial Implications and Other Risks and 142 Risk Management Quality of Pg n

Opportunities Due to Climate Change 148 Precautionary Principle or Approach Maintaining the 150 Ethics and Integrity 04 56 Maintain Sustainable Environment 152 International Initiatives and Membership of 59 Environmental Program Policy Associations 60 Environmental Management System 153 Stakeholders Involvement 60 Environmental Management and Monitoring 154 Critical Concerns and Safety

61 Capacity Building in The Environmental Field 156 Remuneration Policies Maintaining 61 Material 162 Important Events 63 Water 168 Awards and Certifications 64 Energyy Occupational Health 66 Emission 176 abOUT THE REPORT 69 Waste 10 179 Period, Scope, And Report Cycle 71 Environmental Program 179 External Assurance

179 Defining Report Content and Topic Boundaries Safety 74 MAINTAINING PROSPERITY OF THE 180 Determining Materiality Level 05 COUNTRY 181 Material Topics List

77 CSR Policy and Support in Achieving Sdgs 181 Personal Contact Maintaining the 81 PGN Share

82 Partnership Program 182 aSSURANCE STATEMENT Customer Health and 82 Community Development Program 184 STATEMENT GRI IN ACCORDANCE CHECK 87 Cost Are Expended for Activities 185 linKING THE SDGS AND GRI STANDARDS 197 GRI STANDARDS COMPREHENSIVE OPTION 88 MAINTAINING THE QUALITY OF PGN 06 EMPLOYEES

91 Strategy and Policy Development Of PGN’s G overnance Employees Sustainability 91 Profile of Pgn’s Employees 95 Welfare of PGN’s People 96 Developing Diversity and Equality

98 Fulfilling Human Rights of Employees Report

99 Development of PGN’s Employees About the 103 Retirement Welfare Program 2 PT Perusahaan Gas Negara Tbk Sustainability Report 2019

SUSTAINABILITY OVERVIEW

GCG score

2018 2019

94.68 95.09

ECONOMY

ECONOMIC VALUE ECONOMIC VALUE REWARD for GENERATED DISTRIBUTED Workers (USD million) (USD million) (USD million)

5.000 5.000 200

4.000 4.000 150

3.000 3.000 100 4,010.19 3,945.96 3,993.65 2.000 2.000 145.02 3,858.75 139.93 50 1.000 1.000

0 0 0

2018 2019 2018 2019 2018 2019

Expenditures to Tax Government Payment (USD million) (USD Million)

500 500

400 400

300 300 417.62 410.80 403.73

200 200 395.39

100 100

0 0

2018 2019 2018 2019 SOCIAL $ s number ofwokes (USD million) Development CSR andCommunity 6.28 2019 6.89 2018 nds Funds 1,375 2019 1,290 2018

Sustainability Report2019PTPerusahaanGasNegaraTbk S CUST INDEX afe MANHours OMER SA 5.44 2019 5.43 2018 104,672,458 2019 94,407,387 2018 TISFA CTION 3

About the Governance Maintaining the Maintaining Maintaining the Maintaining Maintain Sustainable Maintaining Maintain Remarks Report Sustainability Customer Health and Occupational Health Quality of Pgn Prosperity of Environment the National Sustainability Safety and Safety Employees the Country Economy 4 PT Perusahaan Gas Negara Tbk Sustainability Report 2019

ENVIRONMENT

Accumulation of Water consumption (m3) Transmission and Distribution Pipe Length (Km) 2018 111,844 2018 9,915.87 2019 125,160 2019 10,168.97

Energy Consumption Energy intensity (GigajouleS) (GJ/MMscfd)

2018 2018 693,943 479.94 2019 2019 831,999 564.30 SC GHG emissons Planting ofTrees SC GHG emissons CO OPE 1(t OPE 3(t CO 2 2 on C on C 62,766.36 2019 68,593.06 2018 O O 2 70,035 2019 30,000 2018 2 eq) 672.26 2019 699.64 2018 eq) Sustainability Report2019PTPerusahaanGasNegaraTbk CO CO (t GHG EmissonIntensity SC GHG emissons 2 2 on C OPE 2(t O 2 eq/mmscfd) on C 51.90 2019 57.14 2018 13,086.05 2019 13,319.93 2018 O 2 eq)

5

About the Governance Maintaining the Maintaining Maintaining the Maintaining Maintain Sustainable Maintaining Maintain Remarks Report Sustainability Customer Health and Occupational Health Quality of Pgn Prosperity of Environment the National Sustainability Safety and Safety Employees the Country Economy 6 PT Perusahaan Gas Negara Tbk Sustainability Report 2019 01

REMARKS

Despite the fact of confronting numerous hindrances, PGN’s developmen, however, shows a consistent progress in the last five years. Not only does PGN create economic value, but also creates good value for the environment and community development. Sustainability Report2019PTPerusahaanGasNegaraTbk 7

About the Governance Maintaining the Maintaining Maintaining the Maintaining Maintain Sustainable Maintaining Maintain Remarks Report Sustainability Customer Health and Occupational Health Quality of Pgn Prosperity of Environment the National Sustainability Safety and Safety Employees the Country Economy 8 PT Perusahaan Gas Negara Tbk Sustainability Report 2019

Remarks from the

President Commissioner [GRI 102-14]

PGN will take the lead position in the acceleration and transformation of energy from oil to natural gas, to provide affordable, safe, and clean energy. Indonesia. The series of Subholding Gas businesses starts across gas natural of field the in player end-to-end major the became PGN Gas, Subholding a become having After PGN, which we will carry out with sincerity and dedication. on responsibility greater placing as well as opportunities new up opens appointment This Company. gas national by Gas Subholding a as role PGN’s retaining besides (Persero), a Pertamina PT as appointed PGN as business PGN’s journey in year crucial a was 2019, year, This economy. national the to value added great delivering tool, production valuable as is it today but commodity, vital a as serve longer no will gas natural moment, this At the transparencyofcorporategovernanceprocesses. the commitment of PGN towards sustainability issues and consistently presented a sustainability report. This attests 11years for have We and sustainability of sustainability. significance the acknowledged of who Directors principles of Board the the appreciate with tune in Company the build to endeavours best very our exert we account, that On Indonesia. in elements social and is environmental, Company economic, thriving the the from inseparable of growth the that recognizes PGN your for sustainable supportforPGN. you thank we may all Therefore, of stakeholders. support full the with employees, & of directors work all hard the of result the was performance and achievements the that believe We 2019. during PGN of It is an honour for us to be able to deliver the performance Dear ValuedStakeholders, Sustainability Report2019PTPerusahaanGasNegaraTbk social responsibilityprograms. other various and through victims, disaster helping we scholarships, education advancing in Furthermore, involved directly Indonesia. get across development sustainable support to effort an in villages, independent and developed become to areas operational our around villages the certain embracing by of manifested is welfare community the improving to commitment PGN’s planted 70,035treesjustthisyear. by planting trees along the pipelines that we lay by having environment the to commitment our showcase also We achieved. be can Indonesia in cities major in quality air of improvement and pursued maximally be can reductions emission Thus, transportation. for energy clean of needs the meeting to commitment our by expressed mainly is concern Our environment. the about cares also PGN but growth, profitability with concerned PGN is only Not domestic fulfilling energy needs. efficiently of capable energy world-class company, a become to hopes PGN push, centres. With the support of this on-going infrastructure economic new emerge to and access regional open to infrastructure building on focuses PGN end, that To gas tocustomers. natural distributing and activities, regasification storage, from managing the gas supply, carrying out transmission, 9

About the Governance Maintaining the Maintaining Maintaining the Maintaining Maintain Sustainable Maintaining Maintain Remarks Report Sustainability Customer Health and Occupational Health Quality of Pgn Prosperity of Environment the National Sustainability Safety and Safety Employees the Country Economy 10 PT Perusahaan Gas Negara Tbk Sustainability Report 2019

Arcandra Tahar Paiman Raharjo Kiswodarmawan President Commissioner Independent Commissioner Independent Commissioner

Through this report, we would like to declare our gratitude to the Board of Directors for the good corporate governance that has brought PGN to receive, one more time, an award from the Corruption Eradication Commission as a State-Owned Enterprise with the Best Reporting of State Assets (LHKPN) 2019. As such, PGN is acknowledged as a state organiser which transparently reports the wealth of its officials, as part of a continuing enforeable commitment to create a clean and a transparent work environment.

PGN will continue to innovate in the economic, environmental, and social fields in order to meet the immediate needs of the nation, without compromising the ability of future generations in terms of meeting their necessities. We believe that by building a sustainable Company, PGN will continue to grow and to gain the trust of stakeholders. President Commissioner Arcandra Tahar On behalfoftheBoardCommissioners Jakarta, April22,2020 through oursupportforPGN. country beloved our for energy splendid develop together us Let advancement. PGN’s for like to convey our appreciation for the support of stakeholders who have become partners have given their dedication to PGN’s progress for the sake of national prosperity. We would who employees all and Directors of Board the of work hard the appreciate we closing, In Independent Commissioner Christian HamonanganSiboro President Commissioner Arcandra Tahar On behalfoftheBoardCommissioners Jakarta, 30Maret2020 through oursupportforPGN. for PGN’s advancement. Let us together develop splendid energy for our beloved country like toconveyourappreciationforthesupportofstakeholders who havebecomepartners have giventheirdedicationtoPGN’sprogressforthesakeofnational prosperity. Wewould In closing,weappreciatetheBoardofDirectors’hardworkandthatallemployees who Independent Commissioner Christian HamonanganSiboro Commissioner Luky Alfirman Commissioner Luky Alfirman Sustainability Report2019PTPerusahaanGasNegaraTbk 2019 SustainabilityReportPTPerusahaanGasNegaraTbk Commissioner Mas’ud Khamid Commissioner Mas’ud Khamid 11 11

About the Governance Maintaining the Maintaining Maintaining the Maintaining Maintain Sustainable Maintaining Maintain Remarks About theReport GovernanceSustainability CustomerKeeping Health the and OccupationalOccupational HealthMaintaining Quality ofMaintaining Pgn Prosperity Preservingof EnvironmentMaintainaing the NationalClean SustainabilityRemarks Sustainability Report Sustainability Customer’sSafety Health and and Safetythe Quality of Employeesthe Nation’sthe Countrythe Earth the National EconomyEnergy for Overview Health and Safety Safety People at PGN Prosperity Economy Sustainability 12 PT Perusahaan Gas Negara Tbk Sustainability Report 2019

Remarks from the

President Director [GRI 102-14]

Our commitment is to support government programs in actualising energy independence through optimising the utilisation of natural gas across the country, while paying attention to matters of profitability, environmental sustainability, and social welfare. continue to expand the infrastructure network to meet to network infrastructure the expand to continue o ny at o te et 5 years 15 next the for last only to reserves at current levels of oil consumption is estimated petroleum while years, 60 next the for harnessed be to the in energy of future. Natural gas reserves source are estimated to be main sufficient a become to set is gas natural that considering potential, great has gas Natural MANAGING THECONMY and customers other stakeholdersalike. to benefits provide to and as so collaboration, synergy coordination, through Group the internally reform to continuing customers, serving to committed remain and responsibility full with trust this accept We refinery. and fertiliser segments: new of needs the serving in opportunities created has role heightened This business. our of development the in Pertamina, we recognize the momentous year it having has been for Gas and Subholding a as role new PGN’s direction acknowledged aforementioned the on Based independence energy through optimisingtheuseofnaturalgas national establishing of terms in programs government’s support Our to ASEAN. is in commitment companies gas natural one biggest currently the is of PGN subsidiaries, its and (Pertagas) Gas Pertamina PT with Collaborating activity. economic increased and growth population by driven also is gas elevating natural gas as an are energy choice, while energy the need for natural green towards changes Lifestyle impelled ustokeeplearning,trying,andinnovating. hindrances and challenges hand, other the on advances, various of full year productive a was 2019 hand, one On 2019. year reporting the through positively PGN carried Firstly, do allow me to thank you for your support that has Dear ValuedStakeholders, 1 Fr hs esn we reason, this For . Sustainability Report2019PTPerusahaanGasNegaraTbk contributions tothegrowthofIndonesianeconomy. on-going making is PGN years, 54 over gained expertise with and (SPBG) Stations Filling Fuel Gas 12 and (MRU), 1Land- Units Refuelling Mobile 4 2 Terminal, Regasification Based (FSRU), operates Units PGN Regasification Storage Indonesia. Floating in cities/districts 51 in households 247,308 reached has customers household PGN’s customers. household and transportation MSME, Our customers consist of electricity, industry, commercial, gas the also and network ownedbytheGovernment. km 10,200 than more of pipelines gas ofmanaging is that Indonesia, in infrastructure gas natural downstream all of 96% represents currently Gas Subholding the by managed infrastructure The gas. MMSCFD of 2,000 than more distributed PGN pipelines, transmission through whereas BBTUD, 990 to 960 from distribution through pipeline increased gas by around 3% from the preceding year of volume total the 2019, In utilisation ofnaturalgas. continues to experience growth in line with the increasing and positive been has performance operational whole the years, (five) 5 last the in Nevertheless, Production. of Cost PLN’s in reduction the support to order in PLN to price selling gas special a of implementation an was there Further, customers. to on passed gas natural of price selling the in adjustment an by accompanied not was which year, per 3% roughly by purchased goods of gas. cost upstream the in increase the was challenge Another natural on spending reducing thereby recession, reducing import tariffs on goods of and the global economic policy the to due as conditions industrial such declining the challenges assorted confronted we 2019, In by 2025. 22% least at of mix energy an with gas natural of target the increasing demand for natural gas and to achieve the bersih-murah-dan-aman-itu-bernama-gas-bumi 1 https://www.esdm.go.id/id/media-center/arsip-berita/bahan-bakar- 13

About the Governance Maintaining the Maintaining Maintaining the Maintaining Maintain Sustainable Maintaining Maintain Remarks Report Sustainability Customer Health and Occupational Health Quality of Pgn Prosperity of Environment the National Sustainability Safety and Safety Employees the Country Economy 14 PT Perusahaan Gas Negara Tbk Sustainability Report 2019

Gigih Prakoso Soewarto Dilo Seno Widagdo Desima E. Siahaan President Director Director of Commerce Director of Human Resource and General Affair

Natural gas further lightens the country’s finances, as it In relation to providing more environmentally friendly is cleaner and cheaper than Liquefied Petroleum Gas energy, PGN continues to support the government’s plan (LPG). Thus, foreign exchange savings occur, for LNG to convert the use of fuel oil into gas fuel, by providing gas is sourced from natural resources in the country, MRU (Mobile Refuelling Units) or mobile stations for not imported. In addition, PGN contributed directly refuelling gas for motor vehicles. We also carry out to State Revenues in 2019 amounting to USD410.80 monitoring of several environmental management million, including tax payments of USD395.39 million and programs so that all environmental quality parameters in business activity fees of USD15.41 million. all of PGN’s main operational areas are always in line with the quality standards. MANAGING THE PLANET We realise that our operational activities deriving from PGN also implements strategies to preserve the the utilisation of natural resources are in direct contact environment in daily operational activities, such as with nature. Therefore, we are committed to preserving reducing paper use and replacing paper with digital, the environment, one means of which is by planting reducing business travel by teleconferencing, and trees along our pipelines. We are willing to leave a green reducing the use of plastic bottles. We have also instigated and sustainable world to the next generation. We also an Energy Usage Monitoring System at Pagardewa Station endeavour to reduce CO2 emissions, which have the to improve energy efficiency. potential to cause global warming. In the reporting year, we managed to reduce emissions by 78,847 tons of

CO2 eq, and reduce energy use by 24,785 GJ. rga i PN prtn aes PN lo assisted also PGN areas. operating PGN in Program Car Healthy the through sector health the in assistance Mengenal Nusantara program. In some places, we render Siswa the through diversity Indonesian love to students inviting and students, for training leadership conducting establishing as a library, providing scholarships for students, such training, and education develop to assistance that welfare of the wider community; therefore, PGN provides believe the We improving and advancing for basis areas. the is education operational around at those aimed especially communities, activities many of welfare CSR the improving for budgets and programs increase formulates PGN year, Every to trust. stakeholder and public like would that companies for standard a become now has (CSR) Responsibility Social Corporate WELFARE MAINTAININGS THECOMMUNITY’ programs concerningtheenvironment. audits environmentally-sound training various through performed also have operations routine socialize to to efforts addition year, every In Company. the culture within work the of part as Roadmap Transformation PGN’s business management refers to the Environmental Director ofS S yahrial Mukhtar trategy andBusinessDevelopment Director ofFinance Arie Nobelta Kaban Sustainability Report2019PTPerusahaanGasNegaraTbk Assets (LHKPN). the third time, as a Company with Best Reporting of State an for Commission, Eradication Corruption received the from award governance of field the in achievements Our supervision. unequivocal and rules internal of form inthe Company the in efforts prevention corruption to has approach comprehensive a implemented PGN and accountability, designed fairness. and transparency, independency, responsibility, namely Governance, Corporate Good of principles the forward puts always PGN reason, this the For performance. as improving for basis governance corporate good be without cannot reached achievements sustainability aforesaid The CORPATE GO u cmimn t poie l-u cnrbtos to contributions all-out community development. provide to commitment our amount of Rp89 billion, and in the the future, we will continue in CSR out carried has PGN 2019, In environment. their in develop and grow we as impact, also positive a will get Company the prosperous, is when community that the believe We Indonesia. in disasters natural other of and Maluku North in earthquake the of victims Director ofInfrastructureT and Redy Ferryanto VERNANCE echnology 15

About the Governance Maintaining the Maintaining Maintaining the Maintaining Maintain Sustainable Maintaining Maintain Remarks Report Sustainability Customer Health and Occupational Health Quality of Pgn Prosperity of Environment the National Sustainability Safety and Safety Employees the Country Economy 16 PT Perusahaan Gas Negara Tbk Sustainability Report 2019

UPCOMING ENHANCEMENT Moreover, we plan to develop a gasification program PGN will focus on developing natural gas infrastructure, for several Pertamina refineries with a volume of up to in addition to the development of the Mandiri City ±47 BBTUD, with construction of an LNG terminal and Gas Network of more than 630 thousand household a 30 MMSCFD regasification facility as well. Further connections with a volume target of 25 BBTUD. In 2020, infrastructure development includes the LNG Retail we plan to have installed 50,000 household connections business development (LNG filling in Teluk Lamong) with the rest developed in 2021. PGN also plans to with a capacity of 10 MMSCFD in East Java and the plan construct Household Jargas (10 BBTUD) with state to build a natural gas distribution network with a total budget funds for more than 260,000 connections in 49 of ±452 km in Java and Sumatra. Another target is the districts and cities. The construction of Jargas is targeted gasification of PLN power plants in 52 locations with to be able to provide efficiency for household customers, a total short-term natural gas volume of 149 BBTUD, reduce the burden of subsidies, and reduce LPG imports equivalent to 26.24 thousand BOEPD. This development by around 0.24 million tons. In the industrial sector, we will provide potential savings to PLN of Rp1.92 trillion aim to add 650 new industrial customers. per year.

PGN will face complex challenges, especially in meeting high customer expectations and in synchronising strategies Direktur Utama Gigih Prakoso Atas NamaDireksi Jakarta, 30Maret2020 bagi negeritercinta. baik energi menyediakan yang berkelanjutan perusahaan sebagai PGN membangun untuk upaya-upaya teruskan kita Mari Anda. bagi setinggi-tingginya yang penghargaan memberikan ingin saya hati, kerendahan penuh Dengan kepentingan. pemangku para atas kerja keras dan dedikasi para insan PGN, serta dukungan yang sangat berharga dari kami memampukan pertama-tama yang tentunya Esa, melaksanakan Maha tugas raih, dengan sebaik-baiknya. Tidak lupa kami mengucapkan terima Yang kasih kami Tuhan pada dapat syukur yang mengucapkan kami kinerja dan prestasi semua Atas penyempurnaan untukmendukungpenyalurangasbumikeparapelanggankami. dan perbaikan melakukan untuk berkomitmen terus akan Kami pemerintah. regulasi President Director Gigih Prakoso On behalfoftheBoardDirectors Jakarta, April22,2020 sustainable companythatprovidesgoodenergyforourbeloved country. a as PGN build to efforts our continue us Let appreciation. highest the you give to want I humility, great with and stakeholders other many so from support invaluable the well as as PGN, of people the of all dedication and work hard the for thank to continue We possible. as well as duties our out carry to us enabling Almighty God to gratitude fervent our praise we achieve, can we that performance and achievements the all For enhancements tosupportthedistributionofnaturalgasourcustomers. and improvements make to commit to continue will We regulations. government with Laporan Keberlanjutan 2019PTPerusahaanGasNegaraTbk Sustainability Report2019PTPerusahaanGasNegaraTbk 17 17

AboutTentang the GovernanceTata Kelola MenjagaMaintaining Keselamatan the MenjagaMaintaining Keselamatan MaintainingMenjaga the MaintainingMenjaga MaintainMenjaga Sustainable Kelestarian MaintainingMenjaga MaintainMenjaga RemarksSambutan ReportLaporan SustainabilityKeberlanjutan Customerdan Health Kesehatan and Occupationaldan Kesehatan Health QualityKualitas of InsanPgn ProsperityKemakmuran of EnvironmentLingkungan Perekonomianthe National SustainabilityKeberlanjutan PelangganSafety andKerja Safety (K3) EmployeesPGN the CountryNegeri Hidup EconomyNasional 18 PT Perusahaan Gas Negara Tbk Sustainability Report 2019 02

MAINTAIN SUSTAINABILITY

By embracing the entire parts of the society, we are committed to maintaining the sustainability of the earth for the lives of future generations. Sustainability Report2019PTPerusahaanGasNegaraTbk 19

About the Governance Maintaining the Maintaining Maintaining the Maintaining Maintain Sustainable Maintaining Maintain Remarks Report Sustainability Customer Health and Occupational Health Quality of Pgn Prosperity of Environment the National Sustainability Safety and Safety Employees the Country Economy 20 PT Perusahaan Gas Negara Tbk Sustainability Report 2019

PGN supports the future of sustainability in Indonesia by providing good energy for the nation.

Since 1965, PGN has been building the nation by way of layers, such as industrial, transportation, commercial, the purveying of clean, economical, and safe fuels. We small business, and residential customers. As Indonesia’s are here as a solution for numerous businesses and largest national entity in the field of transportation and companies to support the national economy as well as distribution of natural gas, PGN supplies energy, that is to facilitate the needs of households. PGN has become energy for life. an ideal solution for the needs of customers from diverse 2003, withtheStockCode:PGAS. Exchange and Surabaya Stock Exchange on December 15, Stock Jakarta the on listed were shares Company’s The about PGN [GRI 102-1] PT PerusahaanGasNegaraTbk Name oftheorganisa [GRI 102-3] Jakarta 11140,Indonesia Jl. K.H.ZainulArifinNo.20 L oca tion ofheadqu www.pgn.co.id [email protected] +6221 6333080 +6221 6334838 arters tion Sustainability Report2019PTPerusahaanGasNegaraTbk Regulation No.19/1965. Date of establishment: May 13, 1965, through Government [GRI 102-2] Natural gastransmissionanddistribution Business Activities - - - [GRI 102-5] form Ownership andle shares 43.04% ofSeriesBCommunity Series Bshares 56.96% ofPTPertamina(Persero) Republic ofIndonesia 1 SeriesADwiwarnashareofthe gal 21

About the Governance Maintaining the Maintaining Maintaining the Maintaining Maintain Sustainable Maintaining Maintain Remarks Report Sustainability Customer Health and Occupational Health Quality of Pgn Prosperity of Environment the National Sustainability Safety and Safety Employees the Country Economy 22 PT Perusahaan Gas Negara Tbk Sustainability Report 2019

Location of operations [GRI 102-4]

PT Pertagas Niaga PT Perta Arun Gas

350 Km Transmission Pipeline 156.5 Km Arun - Belawan Transmission Pipeline Belawan - Sei Mangkei Singapore Panaran Station, Batam

MEDAN

SEI MANGKEI

DUMAI

470 Km Transmission 70 Km DURI Pipeline Transmission Grissik - Pipeline Duri - Singapore Dumai

536 Km Transmission Pipeline Grissik - Duri Grissik Station

165 Km Transmission Pipeline 196 Km Labuhan Maringgai Transmission - Muara Bekasi Pipeline Grissik - Pagardewa PRABUMULIH Pagardewa FSRU LAMPUNG Station

105 Km Transmission Pipeline Labuhan Maringgai - Bojonegara Labuhan Maringgai Station Muara BekasiStation Stasiun Bojonegara FSRU JAWABARAT Pipeline Transmission West Java 525 Km Lorok Kepodang -Tambak Pipeline Kalija 201 Km Gas Station Distribution Pipeline Transmission Pipeline SAMARINDA Sustainability Report2019PTPerusahaanGasNegaraTbk East Java Pipeline Transmission 494.21 Km Kalimantan Transmission Pipeline 65.7 Km Station (SPBG) Gas Refueling 23

About the Governance Maintaining the Maintaining Maintaining the Maintaining Maintain Sustainable Maintaining Maintain Remarks Report Sustainability Customer Health and Occupational Health Quality of Pgn Prosperity of Environment the National Sustainability Safety and Safety Employees the Country Economy 24 PT Perusahaan Gas Negara Tbk Sustainability Report 2019

SCALE OF THE ORGANISATION [GRI 102-7]

total number of EMPLOYEES Number of operations Products produced The number of employees is 19 sales area offices 1,474.38 MMscfd 1,375 people 1,024 males and 351 females 448 in the head office and 927 in the operational areas

$ $

Net income Authorised capital Issued and paid-up USD3,848,717,684 Rp7,000,000,000,000 capital Rp2,424,150,819,600

BUSINESS LINE business activities in accordance with applicable laws and regulations.

Business Activities In accordance with Article 3 of PGN’s Articles of Association For management purposes, the PGN Group is classified as last amended by Deed Number 34 dated September into several business units based on products and 10, 2018 made by Notary Fathiah Helmi, S.H., Notary in services and has three operating segments as follows: Jakarta, PGN’s business activities are as follows: 1. Distribution and transmission business segment 1. Planning, construction, managing and developing The natural gas distribution and transmission segment downstream businesses in the natural gas sector carries out natural gas distribution and transmission which include processing, transportation, storage and activities for industrial, commercial and household commercial activities; customers and liquefied natural gas re gasification. 2. Planning, construction, development of production, 2. The oil and gas exploration and production business supply, distribution and distribution of artificial gas segment (hydrocarbon gas); The oil and gas exploration and production segment 3. In addition the main business activities, PGN can carries out business activities in the exploration, carry out other supporting business activities that exploitation and development of businesses in the oil are directly related and / or that support the main and gas sector. of naturalgasthroughthetransmissionpipelinemode. user end the of location the with sources gas natural of Java, East Central Java and East Java, Kalimantan to connect West the location Islands, Riau Sumatra, South Jambi, Riau, Sumatra, North NAD, of provinces the in pipelines transmission have Affiliates / Subsidiaries its and transmission, PGN gas natural of sector commercial the In gas transmission anddistribution. natural of field the in activities business conducts PGN gas, natural downstream in engaged company a As Products orServicesroduced 3. and equipmentleasing. repair services for service providers as well as building optic fiber to services for networksupplyandconstruction and related is segment operational The Other business segments Sustainability Report2019PTPerusahaanGasNegaraTbk international standards. to according handling) interference contact, (customer services with customers provide and natural temperature) gas pressure, (composition, quality product an meet in out carried integrated way to are guarantee the distribution to end users, which infrastructure operates PGN various sector, trading gas natural support To pipe, CNG,andLNG. distribution through sector transportation the to plans small power customers, industrial and commercial customers, customers, household from ranging segments, users end to sold then is which producers various from gas natural buys PGN sector, trading gas natural the In 25

About the Governance Maintaining the Maintaining Maintaining the Maintaining Maintain Sustainable Maintaining Maintain Remarks Report Sustainability Customer Health and Occupational Health Quality of Pgn Prosperity of Environment the National Sustainability Safety and Safety Employees the Country Economy 26 PT Perusahaan Gas Negara Tbk Sustainability Report 2019

main business unit

GTA (Gas Transportation Agreement)

In the area of natural gas transportation business, PGN provides the facilities/infrastructure that can be utilized by gas shipper to ensure natural gas can be distributed in a safe and reliable manner.

Transmission pipeline 4,751 km shipper

Conventional gas supply sources

Compressor Station LNG Supply Sources

GSA (Gas Sales Agreement)

In the area of natural gas trade, PGN purchases natural gas from various Producers which then resell the natural gas to various end-user segments, namely Household Customer, Commercial and Industry Customer, Power Plant Customer, to the Transportation Sector either through distribution pipeline, CNG, or LNG.

Distribution pipeline 5,418 km

Power plant, industrial, commercial, household & SPBG. business, 9.73%oftheoilandgasrestis contributedbyotherbusinesses. PGN has3businesssegments,where83.65%ofPGN’srevenue comesfromthenaturalgastradingandtransportation n ptem uies PN hog P Sk Eeg Idnsa aae 1 (e) domestic (ten) 10 manages Indonesia Energi Saka PT operational areas,and1(one)internationalarea. through PGN business, upstream In Engineering &ConstructionOilGas O OIL ANDGASPRODUCTION THER BUSINESS Industry eibe eeomncto srie, n poiin f xet a rqie ae aae by managed are required as Subsidiaries/ Affiliates. experts of provision and services, telecommunication reliable In other business area, such as engineering, procurement, construction, property management, Property Management (Domestic andInternational) Buyer Sustainability Report2019PTPerusahaanGasNegaraTbk Information technology and communication services Expert &Specialiston Office Support 27

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CUSTOMER Customer management is carried out by PGN based on a. Synergy customer segmentation that divided into: Synergy is a reliable energy utilization integrated 1. Household Customers (RT), solution and focused to customer through excellent 2. Small Customers (PK), customer experience for commercial and industrial 3. Transportation sector customers (SPBG), customer segments. 4. Commercial and Industrial Customers (KI). b. GasKita GasKita is a easy energy utilization solution, economical PGN offers different products to each customer and environmentally friendly for the segment of segmentation. The products are include: household customers and small customers. c. GasKu GasKu is a clean gas supply solutions, environmentally friendly and efficient with CNG mode for the transportation customer segment.

d. natural gastradingthroughdistribution pipesmarketshareinIndonesia. the of 92% around control facilities with entities business trading gas natural the of one as PGN 2019, of end the Until MARKET SHARE Commercial Industry Small Customer Household without distribution networks through Gas Transport Gas through networks distribution without GasLink is a solution supplying natural gas for location GasLink Det ail ofPGN’sCUST User/Consumer Category OMERS C OMPOSITION [GRI102-6] Sustainability Report2019PTPerusahaanGasNegaraTbk gas withoutCNG. natural carry that vehicle is itself GTM (GTM). Module 2019 98.44% 0.94% 0.62% 2018 98.31% 1.03% 0.66% 2017 98.10% 1.14% 0.76% 29

About the Governance Maintaining the Maintaining Maintaining the Maintaining Maintain Sustainable Maintaining Maintain Remarks Report Sustainability Customer Health and Occupational Health Quality of Pgn Prosperity of Environment the National Sustainability Safety and Safety Employees the Country Economy 30 PT Perusahaan Gas Negara Tbk Sustainability Report 2019

VisiON To be World Leading National Gas Company for a Sustainable Future and National Energy Sovereignty

MISSION Conducting gas business in midstream, downstream, and other supporting enterprises committed to increase value for all stakeholders by:

1. Provide gas and develop the infrastructure for the utilization of gas as energy and raw materials to create optimum value for the interests of customers and society.

2. Creating value-added for shareholders and employees, environmentally sound, has the superiority and safety priority.

3. To carry out the company’s management principles of professional, responsible and sustainable.

4. Organizing other businesses to support gas utilization and sustainable business management.

The Company vision and mission is determined by the decision of Board of Directors 014600.K/OT/ PDO/2019 on the Vision and Mission of PT. Perusahaan Gas Negara Tbk. dated April 25, 2019. Sustainability Report2019PTPerusahaanGasNegaraTbk 31

About the Governance Maintaining the Maintaining Maintaining the Maintaining Maintain Sustainable Maintaining Maintain Remarks Report Sustainability Customer Health and Occupational Health Quality of Pgn Prosperity of Environment the National Sustainability Safety and Safety Employees the Country Economy 32 PT Perusahaan Gas Negara Tbk Sustainability Report 2019

Professionalism, Continuous Improvement, Integrity, CORPORATE CULTURE [GRI 102-16] In supporting the role of PGN as Subholding Gas and the Safety, Excellent Service (ProCISE) has become a culture main entity of natural gas business in Indonesia, PGN for the behaviour of every PGN employee. PGN’s implements the corporate culture, namely “ProCISE” Corporate Culture Guidelines are established based on (Professionalism, Continuous Improvement, Integrity, Board of Directors Decision No. 010705.K/SM.02.02/ Safety & Excellent Service) as one of the vital factors UT/2009 dated on May 12, 2009, concerning Corporate to support the preparation process towards the Gas Culture Guidelines. Subholding. ProCISE was built to nurture a corporate identity as a National Gas Company. Moreover, ProCISE With this implementation roadmap for corporate culture, has become a tools of the transformational process to the focus in 2019 was to make perpetual improvements promote a spirit of togetherness required to create that can be achieved with the involvement of all parties synergies in rendering better services to customers. in providing their best efforts accompanied by directed term interests of the organization as an effort to shape to effort an as organization the of interests term culture of to the people internalisation of PGN Group The is adjusted to values. the long- relevant by vision-driven Company’s the achieve to necessity a is vision Company’s Reviewing and refining continuous cultural values with the the consistencyofCompany’sgrowth. ofthe encourages the value it thus, competitors; to compared Company increase can beneficial, that mutually collaboration community, is the The and organisations challenges. external facing with in organisation solid the make more will that activities succession Sustainability Report2019PTPerusahaanGasNegaraTbk role in building the Corporate Culture across PGN Group. pivotal a takes Group PGN of individual every fields, all in manner consistent and disciplined a in ProCISE of value cultural the reflecting Behavior Main the of practice the and actions, outlook, Through situations. of variety same a with dealing in behaviour the have to expected Group is PGN the in individual every ProCISE, of culture the with aligned culture a of implementation the With and forbenefitofthepeopleIndonesia. the Company’s future leaders in line with Company’needs 33

About the Governance Maintaining the Maintaining Maintaining the Maintaining Maintain Sustainable Maintaining Maintain Remarks Report Sustainability Customer Health and Occupational Health Quality of Pgn Prosperity of Environment the National Sustainability Safety and Safety Employees the Country Economy 34 PT Perusahaan Gas Negara Tbk Sustainability Report 2019

5 Cultural Values and 10 Main Behaviours of PGN Group Personnel

PGN Cultural Values ProCISE contains cultural values as a minimum behaviour that must be I implemented in daily life by all PGN Professionalism Group Personnel, consistently.

II Continuous Improvement

III Integrity

IV Safety

V Excellent Service 9 7 5 3 1 Satisfaction Customers’ External Internal and Prioritizing Safety andHealth Occupational Prioritize the Thinking and Positive Honest, Open Implementative Innovative and Creative, its Fields Competent in Sustainability Report2019PTPerusahaanGasNegaraTbk 10 8 6 4 2 and Responsive Proactive, Agile Environment Social andNatural Care forthe Consistent Discipline and Changes Adaptive to Responsible 35

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PGN’s Main Behaviour Guidelines Based on the values ​​of the company culture and the principles of good corporate governance, PGN has compiled Guidelines for Business Ethics and Work Ethics (Code of Conduct) of the PGN People. The Guidelines for Business Ethics and Work Ethics outline contain guidelines for the behavior of PGN People in their daily work activities and procedures for dealing with stakeholders. The guidelines also provide practical guidance governing conflicts of interests, corruption, bribery, gratuities, information management and others. Guidelines for Business Ethics and Work Ethics have been published and must be obeyed by all PGN People.

The explanations of corporate culture contained in ProCISE are as follows:

1. Professionalism Always delivering the best results by increasing competence in their fields and being responsible for every action and decision taken.

2. Continuous Improvement Committing to undertake refinement at all times.

3. Integrity Being true to oneself and others, being consistent on thoughts, words, and actions based on high ethical standards.

4. Safety Always prioritising occupational safety and health, both for oneself and the surrounding area.

5. excellent Service Prioritising the satisfaction of both internal and external customers by providing services at their best.

Excellent Performance

Achievement Engagement (Results) (Support)

Vision & Evaluation & Leveraging Work/Life Action Improvement Diversity Awareness special internalization process with specific objectives specific with process internalization special The performance. Company’s the affect will culture the managing in Consistency them. reaching in way a and will a are there as long as room always is there Group; the best behavior is an obligation for everyone in the PGN that so environment his/her for model role a and agent change a is Everyone better. getting is performance and identity Company’s the thus, ideas; and activities through Company the of history the transform they for company, the of history the transform to pivotal is Agent Change of role the Group, PGN the within culture managing In all levels. at internalization cultural of process the in acceleration requires era current the that, of top On era. dynamic a in capabilities Company’s the developing in hand in hand in accordance with given values, behaving and a commitment to work in consistent being best, the delivering in modesty is performance Company’s the to contribute to culture corporate the implement effectively to ethos The epoch ofsustainableenergysovereignty. with management; and SYNERGY is essential to create an swiftly developed and its values need to be synchronising organisation in achieving the objectives. The Company has the support they together hence, Group; PGN of people Corporate organisation’s the and Culture as the the “spirit” of goals the organisation in motivating the its leads pursue to performance strategy Company’s The and opportunities. in competencies ability existing with the accordance in enhance contributing to and synergise believed to bases the together of one is future” better a for PGN “One through Group PGN of togetherness of spirit the and ProCISE of culture corporate The economy. the people’s fortify to expected is it so, doing and By Company. colleagues, the oneself, of good the for energy good a is uniting spirit of “One PGN for a better future” in providing there thus, Group; of PGN the in diversity strengthening organisation every and a other has each Group supporting characters PGN of individual Every Group Corporate CultureImplementationwithinPGN Sustainability Report2019PTPerusahaanGasNegaraTbk n agt Lyly Usopbe mrvmn, Team Work, Integrity,Optimist,NoCompromisetoSafety). Improvement, Unstoppable Loyalty, Target, On Service, (Excellent SOLUTION is culture Solution PGAS PT PT PGASSolution Respectful, Accountable,Visionary,andExcellent). PT Gagas Energi Indonesia’s culture is BRAVE (Borderless, PT GagasEnergiIndonesia Implementation ofSubsidiary/AffiliateCulture PGN Personnel. all by followed be must and published been have Ethics and so forth. The Guidelines for Business Ethics and Work management, information gratuities, bribery, corruption, interest, of conflicts governing guidance practical provide and activities work daily guidelines The stakeholders. with dealing for procedures their in Personnel PGN of behavior the for guidelines contain outline Ethics Work and Ethics Business for Guidelines The Conduct. of Code socialized the PGN People Code of Business Conduct and and compiled has PGN governance. corporate good of principles the on based management company healthy encouraging culture a builds the also PGN culture. corporate of implementation the encouraging in Champion” As a form of appreciation, PGN selected the best “Culture best intheimplementationofProCISE. there are three selected work units earning the title of the since the program was announced. At the end of the year, through carried been have stages and forms various in evaluation and monitoring Regular management. from Group PGN support all with Subsidiaries/Affiliates, in in including entities, the undertaken for is Indicators Culture Leading Corporate & Lagging month. monitored every indicators 12 are ProCISE There the culture. of corporate implementation the of indicator an is Culture Corporate the for Indicators Leading & Lagging Leading andaggingIndicatorCorporateCulture process ofqualifiedPGNGroupPeople. acceleration and formation the of part be to expected is this and groups/levels several by performed be can 37

About the Governance Maintaining the Maintaining Maintaining the Maintaining Maintain Sustainable Maintaining Maintain Remarks Report Sustainability Customer Health and Occupational Health Quality of Pgn Prosperity of Environment the National Sustainability Safety and Safety Employees the Country Economy 38 PT Perusahaan Gas Negara Tbk Sustainability Report 2019

PT PGAS Telekomunikasi Nusantara PT Permata Graha Nusantara The culture of PT PGAS Telekomunikasi Nusantara PT Permata Graha Nusantara’s culture is CHARMING is CONNECTIVITY (Customer Oriented, Networking, (Commitment, Humble, Align, Responsibility, Morale, Collaborated, Technology Enable, Integrity, Visionary, Initiative, and Goal-Oriented). and Safety). PT Kalimantan Jawa Gas PT Saka Energi Indonesia The culture of PT Kalimantan Jawa Gas is VIRTUE (Value, The PT Saka Energi Indonesia culture is DEEPS (Driver Innovation, Reliability, Teamwork, and Uniqueness). for Results, Service Excellence, Ethics, Professionalism, and Safety). PT Nusantara Regas The culture of PT Nusantara Regas is REGAS (Reliability, PT PGN LNG Indonesia Excellence, Green, Accountable, Sustainable). PT PGN LNG Indonesia’s culture is LIQUIDS (Leadership Integrity, Quality, Unity, Intelligence, Development and Safety).

INFORMATION OF SUBSIDIARIES AND AFFILIATED COMPANIES

INFORMATION OF SUBSIDIARIES AND AFFILIATED COMPANIES

Subsidiary/ Company Name Share Ownership Line of Business Status Affiliation PT Pertamina Gas Subsidiary • PGN - 51% Natural gas ad its Operated • PT Pertamina (Persero) – 48.99% derivatives trade, • PT Pertamina Pedeve transportation/ Indonesia – 0.01% transmission, natural gas processing and storage and other business PT Saka Energi Indonesia Subsidiary • PGN - 99.997% Upstream Business Operated • PT PGAS Solution - 0.003% PT Gagas Energi Indonesia Subsidiary • PGN - 99.88% Downstream Business Operated • PT PGAS Solution - 0.12% PT PGN LNG Indonesia Subsidiary • PGN - 99.999% Liquified Natural Gas Operated • PT Gagas Energi Indonesia - Business 0.001% PT PGAS Telekomunikasi Subsidiary • PGN – 99.93% Telecommunication Operated Nusantara • Yayasan Kesejahteraan Pegawai dan Pensiunan Gas Negara - 0.07%

PT PGAS Solution Subsidiary • PGN – 99.91% Engineering Operated • Yayasan Kesejahteraan Pegawai dan Pensiunan Gas Negara - 0.09% PT Permata Graha Nusantara Subsidiary • PGN - 99.989% Property management, Operated • PT PGAS Solution - 0.011% Provision of manpower services & Facility Management, Profitization of Resources and Company’s assets PT TransportasiGasIndonesia PT NusantaraRegas PT KalimantanJawaGas PT PermataKaryaJasa PT SolusiEnergiNusantara PT WidarMandripaNusantara PT TelemediaDinamikaSarana PT PertagasNiaga PT PertaArunGas PT Perta-SamtanGas PT PertaDayaGas PT PertaKalimantanGas PT GasEnergiJambi PT BantenGasSynergi Company Name INFORMA TION OFSUBSIDARIES ANDAFFL Affiliation Affiliation Affiliation Affiliation Affiliation Affiliation Affiliation Affiliation Affiliation Affiliation Affiliation Affiliation Affiliation Affiliation Subsidiary/ Affiliation • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 0.13% dan PensiunanGasNegara- Yayasan KesejahteraanPegawai Ltd. -40% Transasia PipelineCompanyPvt. PGN -59.87% PT Pertamina(Persero)-60% PGN -40% PT Bakrie&BrothersTbk-20% - 80% PT PermataGrahaNusantara -25% dan PensiunanGasNegara Yayasan KesejahteraanPegawai - 75% PT PermataGrahaNusantara - 0.1% PT PermataGrahaNusantara PT PGASSolution–99.9% PT PermataKaryaJasa-0.004% 99.996% PT GagasEnergiIndonesia- Koperasi JasaPGASCOM-10% Nusantara -90% PT PGASTelekomunikasi PT PertaminaHuluEnergi-1% PT PertaminaGas-99% PT PertagasNiaga-10% PT PertaminaGas-90% Samtan Co.Ltd-34% PT PertaminaGas-66% PT IndonesiaPower-35% PT PertaminaGas-65% PT MedcoGasIndonesia-30% PT PertaminaGas-70% PT BukakaCorporindo-10% - 10% PT JambiIndogunaInternasional PT WahanaCaturMas-40% PGN -40% PGN -0.14% Izma AgyanoBursman-8.71% - 8.57% PT BantenGlobalDevelopment 14.14% PT BantenGlobalSynergi- 68.43% PT AndiracitraGrahawira- Share Ownership Sustainability Report2019PTPerusahaanGasNegaraTbk TED C OMPANIES Gas Transportation Terminal (FSRT) Regasification Storage and Facility ofFloating Gas Transportation Supporting services Oil &Gassector Engineering Power plantandTrade Telecommunication Gas Trade Regasification Gas Processing processing distribution andgas regasification, Transportation, facilities Commercial gas Development Trade and Mining Services, Trade,and Transportation Line ofBusiness Operated Operated Operated Operated Operated Operated Operated Operated Operated Operated Operated Suspension Not yetopening Operated Status 39

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THE COMPANY’S BRIEF HISTORY

1859

L.J.N. EINDHOVEN CO GRAVENHAGE FIRM The Company was firstly founded by 1950 the Eindhoven family.

NV OVERZEESE GAS EN ELECTRICITEIT MAATSCHAPPIJ (NV OGEM) 1863 The Dutch government operated 11 gas plants and 33 power plants, NV NETHERLAND INDISCHE GAS thereby combined NIGM and Dutch Government power companies and MAATSCHAPPIJ (NIGM) changed the company’s name to be The Dutch government took over NV OGEM. Endhoven family’s business and changed the company name. In 1879, NIGM operated two gas plants in Jakarta and Surabaya.

1958

BADAN PENGAMBIL ALIH PERUSAHAAN-PERUSAHAAN LISTRIK DAN GAS (BP3LG) The Indonesian government 1961 nationalized foreign companies. BADAN PIMPINAN UMUM PERUSAHAAN LISTRIK NEGARA (BPU-PLN) Consolidation of State gas companies electric companies. Sustainability Report 2019 PT Perusahaan Gas Negara Tbk 41 Remarks Maintain Sustainability

1984

1994 Economy Maintaining the National PERUSAHAAN UMUM GAS NEGARA PT PERUSAHAAN GAS NEGARA The form of business is changed (PERSERO) into Public Company (Perum). The change in the status of the company was accompanied by the addition of a broader scope

of business. In addition to the Environment distribution of natural gas, PGN

also took part in the transmission Maintain Sustainable field. the Country Maintaining 1965 Prosperity of

PERUSAHAAN GAS NEGARA 2003 On May 13, 1965, pursuant to

Government Regulation No. 19 PT PERUSAHAAN GAS Employees

of 1965, PGN was designated as Quality of Pg n

NEGARA (PERSERO) TBK Maintaining the a State Enterprise. The shares of PGN have been listed in the Jakarta Stock Exchanges and the Surabaya Stock Exchange on December and Safety 2018 15, 2003 with the trading Maintaining transaction code ”PGAS”.

PT PERUSAHAAN GAS Occupational Health NEGARA TBK In line with the initiative of SOE Oil and

Gas Holding formation, at 11 April 2018 Safety Government transferred 56.96% of the shares series B at PGN to PT Pertamina

(Persero) based on the Government Maintaining the Regulation Number 6 Year 2018. Customer Health and

Next as a series of the SOE Oil and Gas Holding formation process, PGN acquired 51% of shares owned by PT Pertamina (Persero) at PT Pertamina G overnance Gas on December 28, 2018 and PGN Sustainability officially carry out the role as Subholding Gas. Report About the 42 PT Perusahaan Gas Negara Tbk Sustainability Report 2019

THE COMPANY’S MILESTONE

1998 2003

PGN succeeded In completing the Completion of Grissik – Batam - Singapore Transmission pipeline of Grissik-Duri transmission pipeline network, which followed by the establishment of a is the first downstream natural gas Subsidiary in the field of transmission, pipeline that crosses national borders. namely PT Transportasi Gas Indonesia This transmission pipeline is operated by (TGI). PT Transportasi Gas Indonesia.

2007 2009

To optimize the power and competence On October 25, 2007, the gas pipeline that have been built over the years by of SSWJ II Grissik – Pagardewa segment utilizing the future business development was inaugurated by the Minister of opportunities, PGN re established a State-Owned Enterprises (SOE) for subsidiary company with a name of PT. Krakatau Daya Listrik from Pertamina PT PGAS Solution that relates with field in Pagardewa. In the same year, engineering, operation, and maintenance, PGN established a subsidiary company EPC contractor, as well as trading that engages in the telecommunication businesses. industry, namely PT PGAS Telekomunikasi Nusantara (PGASCOM). PGASCOM manages the operation and maintenance of fiber optic cable networks.

2010 Gas infrastructure maintenance and operation operations by PGAS Solution. PGN established a Subsidiary engaged in

Transmission Pipeline Grissik-Pakardewa. LNG, namely PT Nusantara Regas as a new milestone for LNG domestic business.

2011 2012

PGN formed subsidiary companies that PGN established a Subsidiary Company respectively engage in the natural gas PT PGN LNG Indonesia (PGN LNG). The upstream and downstream businesses. PGN LNG scope of business among others The subsidiary company in the upstream engaging in the supply of LNG and trading, business is PT Saka Energi Indonesia storage activities including regasification (SEI) while the subsidiary company in the to buyers, as well as in other LNG business downstream business is PT Gagas Energi activities. LNG regasification process in FSRU Lampung by PGN LNG. Indonesia (GEI). Sustainability Report 2019 PT Perusahaan Gas Negara Tbk 43

2017

Muara Bakau Block where PGN through Remarks Most of the operating taxi in Batam uses gas fuel from PGN its subsidiary Saka Energi Indonesia has a participating interest of 11.7% started its production in May 2017. This project is very significant to increase domestic gas 2014 supply and meet the target of natural gas Maintain

lifting in 2017. At the end of 2017 Muara Sustainability PGN established a subsidiary of Bakau block production through Jangkrik PT Permata Graha Nusantara field reached 580MM scfd. (PERMATA). Permata business scope includes property management,

workforce provider, management Economy Maintaining facilities, corporate resources and the National assets profitability. 2018

Commercial operations of the FSRU In line with the government’s initiative to Lampung began to support the reliability establish an Oil and Gas Holding, at the of gas supply in Java, using LNG. beginning of the year, on April 11, 2018 Environment PGN became part of Pertamina with the transfer of series B shares of Government ownership to Pertamina. Furthermore, Maintain Sustainable 2015 on December 28, 2018, PGN officially became the Gas Subholding by acquiring

At the end of August 2015, PGN through its affiliated company PT Pertamina Gas (Pertagas). PT Kalimantan Jawa Gas (KJG) succeeded in completing the the Country Maintaining construction of the Kalija I Transmission pipelines from Kepodang Prosperity of

gas field to Tambak Lorok Gas Power Plant in Semarang for 201 km and continued with the commercialization of the pipelines. With the operation of that infrastructure, then PGN becomes the

only natural gas downstream Company that serves to all Customer Employees sectors (Household, Commercial, Industry, and Power Plant) in Quality of Pg n Central Java. Maintaining the

In the same year, Pertagas completed construction 350 km long Arun Belawan Transmission Pipeline to support the reliability of

natural gas distribution in the north Sumatra region. and Safety

Gas network for households are available in 16 provinces in Indonesia. Maintaining

PT Perta Arun Gas has successfully completed the revitalization of the

Arun LNG refinery to be the LNG receiving terminal and regasification Occupational Health facility. This adds to the receiving terminal and regasification facilities already exists namely in the Bay of Jakarta and Lampung. 2019 Safety In July 2015, the government assigned PGN to operate a natural gas distribution network for households (Jargas) that had been built PGN was authorised by the Government to produce

by the government for 11 regions in December 2015. PGN received Maintaining the one million natural gas network connections for additional assignments to build and operate Jargas for 3 regions,

households to be built as of 2020. In this year, PGN Customer Health and namely Surabaya, Tarakan and Batam. further received a responsibility from the Government for the supply and distribution of natural gas networks for households using the 2019 budget year state budget. PGN, through its Subsidiary that is PT PGN

LNG Indonesia in collaboration with PT Pelindo Energi G overnance Sustainability Logistik, initiated the construction of an LNG receiving 2016 terminal in Lamong bay with a capacity of 40 BBTUD.

Development of gas distribution pipeline in Musi Banyuasin, Bandar Report Lampung, DKI Jakarta and Mojokerto. About the 44 PT Perusahaan Gas Negara Tbk Sustainability Report 2019 03

MAINTAINING THE NATIONAL ECONOMY

PGN supports the national economic development by affording energy for industry and public, leaving out paying taxes to the state. Market expansion, strategic business priorities, and operational excellence are our fervent endeavours to provide benefits at its best towards stakeholders. Sustainability Report2019PTPerusahaanGasNegaraTbk 45

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Natural gas contributes significantly to the national economy as it is used in a variety of large-scale industries, electricity generation, and households. National and global energy development trends have shifted to more environmentally friendly energy to decrease the effects of greenhouse gases. PGN contributes to providing natural gas energy needs that are relatively more environmentally friendly compared to other fossil fuels, such as petroleum and coal. ae. G cnrbts o rvdn ntrl a energy gas natural providing to contributes PGN greenhouse gases. of effects the decrease to energy friendly development trends have shifted to more environmentally energy global and National households. and generation, electricity industries, large-scale of variety a in used is it as economy national the to significantly contributes gas Natural Indonesia. for source energy vital a is gas Natural NATIONAL ECNMY PGN’S CONTRIBUTINT Economic valueretainedafterdividends Economic valuebeforedividends Economic valuedistributed Expenditure forthecommunity Expenditure forthegovernment Total payments Interest payments Dividends Payment Total salariesandotherservices Administration departments Operations department Operating costs Economic ValueDistributed(US) Economic valuegenerated Other revenues Revenue fromforeigncurrencyinvestments Interest receipts Net revenues Economic ValueGenerated(USD) O THE Sustainability Report2019PTPerusahaanGasNegaraTbk generated anddistributedin2019: are values economic following The year. previous the to compared 3.50% up 3,993,649,611, USD was value distributed economic total the While year. preceding the to compared 1.60% down 3,945,962,410, USD was PGN by business PGN’s for development. This year, the opportunity total economic value obtained environmentally an is more energy for friendly need the Increasing coal. and petroleum as such fuels, fossil other to compared friendly environmentally more relatively are that needs 3,993,649,611 3,160,946,988 3,945,962,410 3,848,717,684 410,801,072 172,545,631 145,022,014 (47,687,200) (27,999,996) 95,169,427 49,685,478 97,372,678 93,631,621 51,390,394 30,075,295 2019 2019 6,961,228 3,858,746,739 3,085,852,774 4,010,190,673 3,870,266,738 206,452,841 151,443,934 417,623,247 153,429,529 139,935,795 124,194,731 (18,833,597) 2018 2018 55,008,907 98,018,481 41,917,315 34,562,801 6,896,487 [GRI201-1] 3,770,319,149 2,954,086,334 3,673,618,324 3,570,597,761 390,593,933 169,340,745 136,719,924 112,340,681 (96,700,825) 2017 2017 40,019,099 90,081,570 86,221,256 26,119,425 22,284,831 (9,345,838) 7,237,532 47

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CONTRIBUTION TO THE STATE PGN has changed its ownership from the government to Pertamina as of April 11, 2018. Thus, the majority shareholder of PGN is Pertamina with shares of 56.96% and the remaining 43.04% is owned by the public. In 2019, PGN will still provide dividends to the state of January-December 2018 earnings for the ownership of 1 Series A Dwiwarna share amounting to Rp56.99. PGN contributes to the state in the form of payment of dividends, taxes, and dues to BPH Migas.

In 2019, the total contribution to the state was USD 410.80 million, down 8.5% compared to the previous year which was USD 448.96 million. The following details PGN’s contribution to the state:

Contribution to the state 2019 2018 2017 2016 (in million USD) Dividends - 31.34 77.89 95.77 Taxes 395.39 403.73 375.15 282.72 Dues to BPH Migas 15.41 13.89 15.44 9.68 Total contribution to the state 410.80 448.96 468.48 388.17

Assistance from the Government [GRI 201-4] CONTRIBUTIONS TO REGIONS During 2019, PGN did not receive assistance in any form PGN’s contribution to the regions, especially regions from the government. in PGN’s operational areas, supporting offices, and PGN’s distribution areas, encourages direct and indirect investment in these regions. The economic impacts of PGN’s operations include the following: employment, employment openings, the emergence of new economic activities for the surrounding community, as well as an increase in Regional Original Revenue (PAD) from user charges, regional taxes, and others. Sustainability Report2019PTPerusahaanGasNegaraTbk 49

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SUPPLY CHAIN [GRI 102-9]

UP STREAM

NATURAL OIL AND GAS PRODUCTION Indonesia possesses natural gas reserves of 100 Trillion Cubic Standards Feet (TCF)* which can be utilised as a domestic energy source towards the realisation of economic independence. SEI is a subsidiary owned by PGN that aims to develop business in upstream oil and gas. *(www.migas.esdm.go.id).

MID STREAM

Through PLI, NR, TGI, KJG, Pertagas, and PAG, PGN operates the transmission pipeline and LNG regasification facility with an extreme reliability and efficiency. Through Floating Storage Regasification Unit (FSRU) and Land Based Regasification Facility, LNG is converted into high quality natural gas. PGN has 2 (two) FSRUs, those are Lampung FSRU and FSRU West Java and 1 (one) land Regasification facility in Arun.

DOWN STREAM

POWER PLANTS Power Plant made from gas fuel is more environmentally friendly compared to oil fuel or coal.

COMMERCIAL CUSTOMER Efficiency and reliability are important factors in distributing energy to commercial customer. PGN, in this case, can fulfill these needs.

HOUSEHOLD CUSTOMER PGN is the largest Company distributing natural gas through pipes in Indonesia. PGN’s household customers has reached 247,308 households in 51 cities/ districts and are combined with Subsidiaries/Affiliates that are almost reached 400,000 household customers at 59 Cities/ Regencies around Indonesia.

INDUSTRIAL SECTOR Indonesia’s growth is driven by the development of the industrial sector. Energy solutions for industries that are outside the gas pipeline, can be channeled using Gas Link. STATION OF FUEL GAS AND MOBILE FUEL REFUELING UNIT (MRU) GEI, the Subsidiary of PGN, operates 12 stations filling CNG in 9 cities around Java, Sumatra, and Riau Islands.

INDUSTRIAL SECTOR COMMERCIAL SECTOR CUSTOMERS, HOTELS AND The industrial sector accounts RESTAURANT for 40% of the national economic GasLink is a solution for the natural gas distribution towards structure. PGN continues to an unconnected location with a gas pipe. Having offered the support competitiveness through flexibility, GasLink is also available for customers in sectors of efficiency in the use of fuel by commercial, hotel, and restaurant. distributing natural gas to various countries industrial area. suppliers and others. Our policy regarding the suppliers the regarding policy Our others. and suppliers 1,863 gas natural are suppliers significant of number A USD million. approximately of expenditure total a with suppliers 105 about are There suppliers. services and In terms of production, PGN integrates with multiple goods SUPPORTING Indonesia. in business gas natural downstream the strengthen PGN’s position in managing Integration of Pertagas into PGN will network reliabilityof99.86%. maintenance of PGN with the level of out carry operational activitiesand infrastructure to capable is Solution PGAS technology, and workforce experienced an of support the With Trading. namely: and EPC Engineering, fields, Maintenance, main Operation, 4 on activities focusing business has Solution PGAS products, properties inVidaBekasiarea. property BerandaMAS are one of the iconic its developer. Nowadays, property a being expertise and buildings of warehouses, PERMATAhasdeveloped his form the in PGN by Growing frommanagingassetsowned by PGN’sgaspipeline. business especially for markets that are not passed CNG developed sector, for industrialandcommercial also GEI fuel gas for transportationsector.Inaddition, station filling a operates GEI PSC, PekawaiPSCandWestYamdena. are PSCs Pangkah PSC, South Sesulu five PSC, Wokam II The ownership. shares 100% with SEI by entirely operated are which of five US, in block shale gas one and Indonesia in PSCs ten manages SEI commitment toservice MAS Sustainability Report2019PTPerusahaanGasNegaraTbk implementing the by Contractor Safety Management System. PGN for work suppliers the when health and safety occupational the and Pact Integrity the of enactment the incorporates which implementation anti-corruption the is to supportthenationalelectricitysector. growing alongwithnaturalgasdemand Nusantara Regasis developing and as many256Bbtud. regasification of products gas distributed has LNG PGN 2018 In distribution. gas of reliability supports that infrastructure PGN LNGtransformedintoimportant Singapore. as well as international markets in domestic marketin Sumatra and Batam company Indonesian first focusing on naturalgastransportationfor the is TGI and international commercial. solutions information technology his completes integrated of creation the with expertise it because in potential, business lots ofopportunities andhigh growing a telecommunications sectorwhich has does PGASCOM 51

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Proportion of Spending on Local Suppliers [GRI 204-1] • Company Economic Risk Local suppliers of PGN are suppliers originating from The risk faced by the Company in the economy is Indonesia. In 2019, 99.9% of the procurement budget the existence of a trade war in the United States was paid to local suppliers. (US) and the People’s Republic of China which has an impact on slowing global and national economic KEY IMPACTS, RISKS, AND growth. In addition, the presence of imported goods OPPORTUNITIES [GRI 102-15] from China depress demand for domestic industrial PGN has assessed the impact, risks and opportunities of products, thereby limiting the amount of production. the Company in the following environmental, economic The impact of the global recession which affected the and social aspects: decline in world crude oil prices is also a threat to the • Company Environmental Impact commodity of natural gas as an energy substitute. Providing energy sources that are more environmentally friendly than other fossil fuels such • Company Social Risk as petroleum and coal. Thus, PGN contributes to The risk in the social area is any community rejection reducing the production of greenhouse gases which at several points of natural gas infrastructure is a trigger for global warming. development. This is triggered by the fact that the benefits of the development of natural gas pipeline • Company Economic Impact infrastructure and the priority given to safety are PGN is the largest gas distribution and transmission not well socialized. Going forward, PGN will continue company in Indonesia playing a role in meeting to approach and improve safety socialization to the domestic natural gas needs. On top of that, PGN’s communities around infrastructure development and contribution to the economy is to contribute to the to work together through the distribution of CSR to state through dividend payments and tax payments. surrounding communities.

• Company Social Impact • Company Environmental Opportunities The existence of PGN in social life, especially The signing of the Paris Agreement, which is an throughout operational areas, is well received agreement on mitigating GHG emissions, provides because PGN is always concerned about the needs an opportunity for the Company to increase the of the community. This is imperative so that it can supply and utilization of natural gas as a more nurture a sense of belonging to the pipelines that lie environmentally friendly energy source (lower GHG in its area and increase the security of PGN assets emissions) compared to other fossil fuels such as along the pipeline. petroleum and coal.

• Company Environmental Risk • Company Economic Opportunities The Company’s operations pose risks, such as energy PGN is very well-prepared to meet the increasing use and emissions. demand for domestic natural gas for power, industrial, commercial and household needs. In addition to supporting industrial growth, PGN plays a role in maintaining Indonesia’s trade balance by reducing CAD (Current Account Deficit) by reducing fuel and LPG imports. As a Subholding Gas, PGN is also ready to distribute natural gas throughout Indonesia with various modes of transportation, both piped gas and LNG to answer the challenges of increasing the use of national natural gas. RISK MANAGEMNT development intheinternationalmarket. operations. Company’s business is run, long the in target, Company’s the While the throughout Environment) excellence Security, Safety, (Health, culture HSSE of (3)Implementation and provision, service efficient through competitiveness Company’s the development, Increasing (2) business Gas (1) viz.: things, 3 Company include the of opportunities and risks main the to related years) (3-5 goals and targets medium-term The • 31000: 2018Frameworkhasthefollowingprinciples: ISO The framework. 2018 31000: ISO the with updated later was which framework management risk COSO the with framework (ERM) Management Risk Enterprise the adopted Company the 4360: 2009, in AS/NZS Then, standards. on 1999 based System implementing Management by Risk a Division (ABMR) Management Risk and Analysis Business the formed has PGN 2003, Since acorporate has PGN identified, governance mechanism. been have that In terms of managing the impacts, risks, and opportunities and sporadicactivitiesinotherareas. villages target the community in both programs, various empowerment having by maintained still are These areas. operational Company’s the throughout to empower the social life of the community, especially The commitment of PGN’s management is to continue Company Social Opportunities [GRI 102-15] Sustainability Report2019PTPerusahaanGasNegaraTbk d. c. b. a. level oftheCompany. every at awareness Management Risk increase will This Management. Risk concerning perceptions and be involved in accordance with their knowledge, views to need external, and internal both stakeholders, All Inclusive/Involving AllRelevant Parties in contexts external accordance withtheCompany’sobjectives. and internal with must aligned environment be Company the processes in and implemented framework Management Risk The Customised to theCompany. contribute can it thus, manner; comprehensive and structured a in implemented is Management Risk Structured andComprehensive activities. Risk Management is an integrated part of all Company Integrated Information Available Culture Factors Humas Best Improvement Continual Dynamic Valued Creation and Protection Integrated Inclusive Comprehenvise Customized Structured and 53

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e. Dynamic In addition, the Risk Management process applicable Risks can arise, change, or evaporate in accordance in the Company refers to a framework that includes with changes in the Company’s internal and external integrating, designing, implementing, evaluating and context. Risk Management is applied to be able to improving Risk Management for all Work Units in the anticipate, to detect, to receive, and to respond to Company. The entire process performed based on this changes and events in a timely manner. framework is recursive, starting from the beginning of planning to integration including internal and external f. Best Available Information factors of the Company. Information related to Risk Management can refer to historical data, actual conditions and expectations or targets of the Company in the future. Risk Management explicitly considers the limitations and Integrity uncertainties of the information and expectations made. The information provided must be timely, clear

and relevant to the Stakeholders. Improvement Design g. Considering Human and Cultural Factors Leadership and Human behaviour and culture significantly influence Commitment all aspects of Risk Management at every level of the Company. Evaluation h. Continual Improvement Implementation Risk Management requires us to make continuous improvements through learning and experience.

As a form of commitment to the implementation of the principles and framework of Risk Management, the Top Management of the PGN Group signed a Risk Management Charter in October 2019.

1. opportunities areasfollows: or risks change climate manage to used methods The continuous rain,floodsandlandslides. the gas pipeline construction process will be disrupted by example, For activities. PGN’s in disruptions operational cause cause to potential which the has cyclones This rainfall. high tropical extremely Indonesia of in emergence change the climate is of impacts the of One CHANGE OPPOR AND O FINANCIAL IMPLICATIONS cooler, the use of energy-efficient AC after with low wattage the on starter soft the installing Compressor, Turbine Gas the to of capacity distribution the increase refurbishment rotor Compressor, Turbine Gas the of pattern operation the setting others: among programs, efficiency energy of implementation the through emissions reduce to efforts best the Putting THER RISKAND TUNITIES DUET [GRI 201-2] O CLIMATE Sustainability Report2019PTPerusahaanGasNegaraTbk the Company’soperationalcosts. in included are they because manage to taken steps the before mitigation actions are taken as well as the costs of implications financial the determine cannot we us, for As 3. 2.

surface water flow when it rains and reducing the potential forflooding. andreducing it rains when flow water surface reducing thereby ground, the into rainwater channel thatcan holes biopore and wells infiltration Making planted Company the 70,035 trees. 2019 In GHGs. reducing CO absorb to aiming also but ecosystems preserving at Conducting afforestation programs that not only aim increase and conditioning, workers’ awarenessofenergyefficiency. air of to use film the window reduce of installation durable, more and energy-efficient more are that lights LED with lamps of replacement technology, inverter with AC or AC 2 gas concentrations in the atmosphere thereby atmosphere the in concentrations gas 55

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MAINTAIN SUSTAINABLE ENVIRONMENT

In association with a global community, PGN holds a pivotal part in terms of fighting climate change. We are determined to put our very best attempts to cut down the environmental ramifications, including decreasing carbon emissions from the Company’s operational works for the sake of the sustainability of the earth. Sustainability Report2019PTPerusahaanGasNegaraTbk 57

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We do understand that we must dynamically participate in a sustainable development that is responsible for meeting the needs of the present and future generations. Therefore, every risk to the external environment has been joined with a mitigation plan or risk management plan; thus, environmental sustainability can be well-maintained. of Carbon dioxide (CO dioxide Carbon of production The coal. and petroleum as such fuels other fossil to compared friendly environmentally more are the role of PGN in providing natural gas energy needs that where is This gases. greenhouse of effects the minimize to energy friendly environmentally to shifted now have new energy. Current trends in global energy development and gas natural of development use the optimizing energy include priorities National 2015. in consumption energy final the to compared double approximately will growth per year, that energy demand in Indonesia by 2025 GDP growth during the 2015-2050 period and population moderate of assumption the Council on based estimates, Energy (DEN) National The pursued. be to must continue availability supply and need basic a become has it rather, commodity; a longer no is energy Nowadays, ln o rs mngmn pa, o ht environmental sustainability canbewell-maintained. that so plan, management risk or plan, mitigation a with together joined been has environment external the to risk every Therefore, generations. future and present the of needs the meeting for responsible is that development sustainable we in participate actively must that well very understand We risks. environmental mitigating in guide a for as Roadmap Transformation Environmental a compiled have we Therefore, environmental impact. an has the activity distribution that gas aware natural are We consumers. scale or household commercial to industrial, wells whether production consumers various from gas and natural transmission the of in distribution experience long a has PGN energy is an friendly opportunity for PGN’s business development. environmentally more for need the Increasing and coal. petroleum of combustion the from than lower is gas of 2 ) emissions from the combustion the from emissions ) Sustainability Report2019PTPerusahaanGasNegaraTbk • • • • • • from implementingthepolicyinclude: and continuous improvement. Various programs resulting protection, environmental participation, regulations, with management throughout the entire life cycle, compliance risk prevention, of: principles the emphasises policy This development. business PGN’s with line in is and policy similar a of revision a is 2018, 15, October on adopted Environmental and Energy Management Policy. This policy, environment, and Security Health, and the Safety Occupational the that called and policy security a health, of safety, part covers is policy environmental PGN’s POLICY ENVIRONMENTAL P ROGRAM

through the Corporate Social Responsibility programs. preservation communities surrounding the environmental involve that programs of Implementation System andISO14001:2015Certification. Management Environmental the of Implementation consumption, savingwater,andreducingwaste. energy saving as such environment, the preserve to media campaigns among employees, contractors, and visitors environmental through awareness Building that aremoreenvironmentallyfriendly. technologies new with equipment of Replacement plastic reduce waste, watersavingsandcompostingprograms. (paperless), paper reduce to work Use of sustainable resources such as energy efficiency, as wellregularreportingtorelevantagencies. statutory UKL-UPL, and (RPL) Plans Monitoring Environmental with accordance (RKL), Plans Management Environmental regulations, in management monitoring environmental and of Implementation 59

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The aforementioned programs are performed under field of environmental management, setting targets the coordination of the Health, Safety, Security and and programs, evaluating all environmental programs, Environment (HSSE) Division with reference to the ISO and performing internal and external audits for the 14001: 2015 Environmental Management System, whose implementation of the Environmental Management certification has been in force since 2016. System.

ENVIRONMENTAL MANAGEMENT The entire Environmental Management System refers to SYSTEM the PGN Environmental Transformation Road Map as a PGN’s Environmental Management System consists basic reference in achieving business goals. Through this of a process of identifying environmental aspects and Road Map, PGN has managed to achieve several targets impacts, fulfilling compliance with regulations in the in the environmental sector, such as:

TABLE OF TARGET in the Field of Environment

Target 2019 2018 2017 2016 2015 2014 PROPER Green Standard (beyond compliance) √ PROPER Blue Standard (compliance) √ √ √ √ √ √ Development of carbon footprint calculation √ √ √ √ √ √ Implementation of Environmental Impact Analysis √ √ √ √ √ √ (AMDAL), Environmental Management and Monitoring Plans (UKL & UPL), and full set of environmental permits 100% compliance with environmental regulations √ √ √ √ √ Completion of baseline data in environmental √ √ √ √ √ management ISO 14001 Certification √ √ √ √ Zero pollution √ √ √ √ √ √ Completion of ISO 14001 Surveillance Audit √ √ √

ENVIRONMENTAL MANAGEMENT AND MONITORING Environmental management and monitoring is part of the Environmental Management System that refers to PGN’s Environmental Transformation Road Map. Management and monitoring activities are performed to measure the effectiveness of the implementation of environmental management whose purpose is to mitigate or minimize negative impacts and augment positive impacts on the environment. We always try our best to comply with laws and regulations regarding the environment.

In the environmental planning process, we abide by AMDAL, UKL-UPL, as well as other relevant laws and regulations. In the process of environmental management, we maintain the environmental and other quality standards set by government. In the environmental monitoring process, we comply with the environmental monitoring reporting mechanisms. The results of environmental monitoring consists of water quality, air quality and noise level readings. We report the results of environmental monitoring to relevant agencies, namely the Ministry of Environment and Forestry (KLHK), the local government’s Environmental Service and the Directorate General of Oil and Gas at the Ministry of Energy and Mineral Resources (KESDM) on a regular basis.

During the reporting period, there were no violations of environmental legislation. [GRI 307-1] • • • • • • • • • • • • • programs were heldin2019including: training various needs, competency these meet To Company. the of levels various at management field, environmental of field environmental the in involved those the especially technological in have competence must and adequate employees PGN problems Therefore, adaptation. environmental of System moves dynamically according to the development Management Environmental the that acknowledge We ENVIRONMENTAL FI ELD CAPACITY BUILDINGINTHE Cause AnalysisTechnique). (Systematic SCAT Technique Investigation on Training (ISRS) System International Workshop Rating Sustainability Management International Safety Sustainability RatingSystem(ISRS)Training Modern Environmental OHS Auditor Management System(ISO45001:2018) and 2015) 14001: Internal (ISO System Management for Training Management System (ISO45001:2018) OHS and 2015) 14001: (ISO System Management Environmental on Training Awareness Life CycleAssessment Training Certification ofEnergyAuditor Certification ofDomesticWaste Management Certification ofManagement ofHazardousWaste Certification ofWastewater Treatment Operator Certification ofWaterPollution ControlManager Installation Control Pollution Operator Air of Certification Certification ofAirPollution Control Manager Sustainability Report2019PTPerusahaanGasNegaraTbk and doesnotusepackaging. MATERIAL natural gas (CH gas natural are products PGN km. 9,915.87 was which year, previous the from 3% by increased length This km. 10,168.97 was and distribution pipeline managed by PGN at the end of 2019 transmission not the of length, length of The volume. units or weight in measured gas, delivering for pipeline the is process business our in material main The carry highriskflammablegas. pipelines the because this prohibit codes and standards to due material recycled use not can material Pipeline so asnottopollutetheenvironment. solid waste, processed according to applicable regulations as treated then are filters used and replaced periodically is absorbent This pipes. to addition in operations, PGN in well- is gas maintained. This natural filter material is of also a main quality dissolved material used the other that so and substances, vapor water as absorb such to filters impurities with equipped also are pipes These period oftime,around30years. long a quite for ground the in buried be can and durable become pipes the so rust, prevent to protectors other with coated are pipes steel The material. non-renewable a is which (PE) polyethylene or galvanized, steel, of made is pipe The network. existing the to pipelines new added PGN reason, this For demand. increasing with and increases commercial industrial, gas of distribution the year, Every to consumers. household gas distributes PGN 4 ) which is distributed through PGN pipes PGN through distributed is which ) [GRI 301-1] [GRI 301-3] [GRI301-2] 61

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The following is a report on renewable and non-renewable materials in the pipeline and the length of the pipeline network.

Table of Material Used [GRI 301-1]

Type Length (km) Non-renewable material 10,168.97 Renewable material -

Table of Pipelines Length (Km)

Distribution Pipes 2019 2018 Growth Jakarta 750.81 750.07 0.74 Bogor 638.57 621.81 16.76 Tangerang 469.90 463.98 5.92 Cilegon 117.12 116.44 0.68 Bekasi 445.03 443.34 1.69 Karawang 202.87 190.61 12.26 Cirebon 402.02 401.99 0.03 Palembang 183.95 183.73 0.22 Lampung 97.87 97.83 0.04 Sidoarjo 410.06 414.56 -4.50 Pasuruan 216.21 204.77 11.43 Surabaya 591.25 584.08 7.17 Semarang 17.40 17.40 0.00 Medan 643.91 625.31 18.61 Pekanbaru 15.31 15.31 0.00 Batam 161.76 158.25 3.52 Dumai 45.76 45.76 0.00 Pertagas* 8.38 7.38 1.00 Total Distribution 5,418.20 5,342.62 75.58

Transmission Pipes 2019 2018 Growth Medan 36.90 36.90 0.00 Grissik-Duri 536.36 536.36 0.00 Grissik-Batam-Singapore 469.48 469.48 0.00 SSWJ 1,005.60 1,003.98 1.62** Dumai 66.54 66.54 0.00 Kepodang-Tambak Lorok* 200.77 200.77 0.00 LNG Lampung* 21.32 21.32 0.00 LNG Jakarta* 15.12 15.12 0.00 Pertagas* 2,398.68 2,222.78 175.90 Total Transmission 4,750.77 4,573.25 177.52 Total 10,168.97 9,915.87 253.10

*) This pipe length includes Subsidiaries and Affiliates **) Renewal of measurement data to theapplicableusagelimits. Companies (PDAM) and well water, whose use is adjusted domestic support Water Drinking Regional from comes water The activities. to is operations offices and PGN’s office supporting head the at water of use main The not disturbcommunitywaterorprotectedspecies. Water sources at PGN’s head office come from PDAM, and not from protected areas. The water flow from the PDAM does Water SourcesAffected WATER 2. 1. Savings inothermaterialfieldsare: Well Total PDAM third partiesintherecyclingsector. competent of services the using by is parties other by used be still can but PGN by used be longer no The implementation of recycling for materials that can • • • • paper usageasfollows: reducing of application the through savings Paper Table ofWa Recycling paperwaste. Use ofdouble-sided paper. Centralization oftheprinting system. employee informationsystem,andothers. Online System and Indicator Performance Center), Online Paperless HSSE - (HOLISTIC system K3PL - System), Payment (POPAY system), system management (e-sms- payment secretariat system electronic correspondence including: systems based technology information Various [GRI 303-1] Water Source ter Consumption [GRI303-1] [GRI 303-2] 125,160m 2019 - 125,160m Sustainability Report2019PTPerusahaanGasNegaraTbk previous year of 97,279 m 97,279 of year previous surrounding residents. of life of quality the on impact positive further a have availability of good reserves and ground water levels will The maintained. are levels water ground and reserves groundwater thus, ground; the into rainwater channel that can holes biopore Wemake building. office head bycreating PGN the around areas open in areas catchment groundwater water making preserve is to PGN efforts groundwater, active saving to addition In a flow-ratewatermeter. usage, PGN utilizes the direct measurement method from done to protect ground water and soil. To measure water use water from wells. Saving the utilization of well water is has decreased by 100% because during 2019 PGN did not was 125,160 m 125,160 was Total water use at PGN’s head office in Jakarta in in Jakarta m office 111,844 from 11.9% head by increased PGN’s 2019 at use water Total not significant. is activities maintenance for used water of amount The on. so and machinery, of pipes, cleaning for amount used is water small a activities, maintenance For water. use not do distribution gas of activities operational The 125,160 m 125,160 3 3

3 in 2019. Water consumption from the PDAM the from consumption Water 2019. in 3 , an increase of 28.7% compared to the to compared 28.7% of increase an , 2018 111,844 m 14,565 m 97,279 m 3 . While the use of well water well of use the While . 3 3 3

2017 3 112,794 m n 08 to 2018 in 68,285 m 44,509 m 63 3 3 3

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Water reused [GRI 303-1] [GRI 303-3] ENERGy PGN does not yet have a water recycling mechanism. There are two types of energy used in PGN’s operational The priority of conserving water resources is activities as follows: done by making efficient use of water, such as: • Direct energy used for self-owned power plants and • Use of environmentally friendly technologies, for gas turbine compressors which serve to increase the example the use of automatic water taps and water- pressure of the gas so that it can flow to the customer saving closets. installations. Campaigns to increase employee awareness in order • • Indirect energy in the form of electricity from to have efficient behavior in using water. Perusahaan Listrik Negara (PLN) to meet energy needs at the head office, area offices and gas stations. The increase in water volume in 2019 is due to the increasing number of people in the PGN office along with PGN’s total energy consumption in 2019 was 831,998,822 the development of the Company’s business activities. GJ. The following is the total PGN energy consumption during 2019:

Energy consumption within the ENERGY

ENERGY CONSUMPTION INSIDE OF THE ORGANIZATION (GJ) [GRI 302-1]

Renewable Energy Sources 2019 2018 2017 Sun 34.374 26.806 14.191 Total 34.374 26.806 14.191 Non-renewable Energy Sources PLN Electricity 52,349.919 53,487.077 48,123.938 Gas fuel 779,648.903 640,456.000 638,131.062 Total 831,998.822 693,943.077 686,255.000

This energy consumption calculates gas fuel for self-owned power plants, gas fuel for Gas Turbine Compressors, electricity consumption from PLN, electricity consumption using solar cells used in head office, area offices, and gas stations.

Conversion factors used to calculate energy consumption: 1. Gas fuel: calculated based on the measurement of the volume of gas fuel with a flow meter (M3); the M3 data is converted to GJ with a Gross Heating Value conversion factor obtained from measurements using a Gas Chromatography tool. 2. PLN Electricity: calculated based on the bill from PLN (KWh); KWh data is converted to GJ. 3. Sun: calculated based on the power of electrical equipment that uses solar cells (KW) multiplied by the length of operating (hours) and then converted to GJ.

Energy consumption outside of the organization (GJ) [GRI 302-2]

Energy Source 2019 2018 2017 Fuel Oil 28,162.806 26,813.732 29,497.317 Total 28,162.806 26,813.732 29,497.317

Energy consumption outside of the organization is calculated from the amount of fuel given to officials for travel from home to office and vice versa (Employee commuting). four objectives: four following the achieve to audits energy conducts PGN management, energy better of context the in addition, In 7. 6. 5. 4. 3. 2. 1. the following: and implemented various energy saving efforts, including arranged have we Therefore, earth. the of temperature the for raising impacts sources environmental significant energy have non-renewable that understand We and Compressors, Turbine Gas for fuel gas plants, electricity consumptionfromPLNthatareusedatheadoffice,areaoffices,andgasstations. power self-owned for fuel gas ratio; intensity the in included energy of types The Energy intensitymeasurestheamountofenergyconsumedtoproducenaturalgasproductsduring2019. Total reduction Gas fuel Energy Intensity(GJ/ Energy Consumption(GJ) Production (MMscfd) Increasing employees’ awareness of energy efficiency. air conditioning of use the reduce to film window room of Installation more energy efficientandmoredurable are that lights LED with lamps Replacement wattage ACorwithinvertertechnology low with conditioners air energy-efficient of use The Installation of asoftstarteron theaftercooler distribution the capacity oftheGasTurbineCompressor increase to refurbishment Rotor pattern operating Compressor Turbine Gas the Regulating Table ofReductionEnergyCsumpti(GJ) T ABLE OFENERGYINTENSITY[GRI302-3] [GRI 302-4] MMscfd) Energy Intensity Energy Source Sustainability Report2019PTPerusahaanGasNegaraTbk in thetablebelow: seen be can More Gigajoules. 24,785.144 to amounting amount of reduction in energy consumption during 2019 the from seen be can This efficiently. running been have by PGN undertaken efforts saving energy all Inclusively, Regulation Number 13of2012concerningSavingElectricityUsage. Resources Mineral and Energy of Minister on based Enough Efficient category the in included or Energy Consumption Index (IKE) of 17.9 KWh/m 17.9 of (IKE) Index Consumption Energy the of a record produced which Office Area Palembang the at audit energy an conduct to (Persero) Indonesia Management Energi PT with collaborated PGN 2019, In • • • • [GRI 302-4] and concerninsavingenergy. understanding employee increase to ways for Look PGN cangraduallymakefulluseofgreenenergy that so management energy improve to ways Identify Understand the potentialfor energysavings Determine the levelofenergy consumption 24,785.144 24,785.144 2019 2019 1,474.38 831,999 564.30 19,608.822 19,608.822 2018 2018 1,445.89 693,943 479.94 20,491.796 20,491.796 2017 2017 1,265.06 686,255 2 /month, 542.47 65

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Calculation of energy consumption reduction is done by Transformation Roadmap. Among significant air comparing energy consumption before the program and emissions, for example are greenhouse gas (GHG) after the program. The base year used is the year when emissions, Nitrogen oxides (NOx) and Sulfur oxides (SOx). the modifications were made. Since 2012, PGN has implemented carbon footprint Energy consumption needed to distribute natural gas calculations using a Carbon Calculator to calculate: is 564.3 GJ/MMSCFD. In 2019 there was an increase in • Greenhouse gas emissions from electricity energy consumption to produce products. This is caused consumption in buildings and stations by the gas sent from the upstream pressure is small so it • Greenhouse gas emissions from fuel use for requires more gas compression processes that require generators gas fuel consumption. [GRI 302-5] • Greenhouse gas emissions from fuel use for motor vehicles EMISSIONS • Greenhouse gas emissions from gas usage for chillers Air emissions are one important aspect we always report and compressor turbines the management regularly to the Ministry of Environment • Greenhouse gas emissions from natural gas and Forestry (KLHK), and other agencies. Emissions into distribution activities the air are a vital factor in global warming. For this reason, • Greenhouse gas emissions from business trip by we actively limit emissions which contribute to the rise plane. in surface temperature of the earth. We are committed to carrying out more efficient business operations and Following are reports on PGN’s Carbon Emissions for reducing carbon emissions in each of our business Scope 1 (direct scope), Scope 2 (indirect scope), and activities, in accordance with PGN’s Environmental Scope 3 (other indirect scope).

TABLE OF GREENHOUSE GAS EMISSION SCOPE 1 (TON CO2EQ) [GRI 305-1]

Type of 2019 2018 2017 Calculation Method Activities Venting 4,417.57 5,413.46 2,505.56 The calculated m3 gas data is multiplied by emission factors based on the 2006 IPCC Guideline Instrumentation 4,116.95 3,459.32 3,204.98 The calculated m3 gas data is multiplied by emission factors based on the 2006 IPCC Guideline Blowdown 1,068.80 823.85 631.03 The calculated m3 gas data is multiplied by emission factors based on the 2006 IPCC Guideline Gas leak 6,633.65 20,259.01 31,673.15 The calculated m3 gas data is multiplied by emission factors based on the 2006 IPCC Guideline Fuel gas 43,548.58 34,623.80 36,208.25 The m3 gas data from measurements is multiplied with emission factors based on the 2006 IPCC Guideline Genset Oil Fuel 329.98 318.04 95.24 The m3 gas data from measurements is multiplied with emission factors based on the 2006 IPCC Guideline Vehicle Oil Fuel 1,407.16 1,469.67 1,949.09 Fuel liter data is calculated from distance data then multiplied by emission factors based on the 2006 IPCC Guideline Vehicle Gas Fuel 25.06 1,057.84 0,00 The m3 data from recordings is multiplied by emission factors based on the 2006 IPCC Guideline Chiller Gas Fuel 1,218.61 1,168.07 1,247.50 The m3 gas data from PGN billing is multiplied by emission factors based on the 2006 IPCC Guideline TOTAL 62,766.36 68,593.06 77,514.80

Emissions calculated are CO2, CH4, N2O air intheproductionprocesseveryyearthroughvariouseffortstoreduceemissions. the into discharged emissions of amount the reduce to try We parameters. performance environmental Company’s the MMscfd of natural gas during 2019, how much emission is discharged into the air. The emission intensity ratio is one of The intensity of GHG emissions reveals the amount of GHG emissions per production volume. That is, to produce 1,474.38 Emission Intensity Emissions calculatedareCO Emissions calculatedareCO Total GreenhouseGasEmissions(tonCO (Flights) Business trips Electricity Production Volume( GHG EmissionIntensity(tonCO Type ofActivities Activities Type of T T Table ofGHGEmissonIntensity[GRI305-4] ABLE OFGREENHOUSEGASEMISSONSC ABLE OFGREENHOUSEGASEMISSONSC MMscfd) 2 2 , CH , CH 13,086.05 2019 2019 4 672.26 4 , N , N 2 2 O O 2 eq/MMscfd) 13,319.93 2018 2018 699.64 2 eq) OPE 3(T OPE 2(T 2017 9,072.98 2017 511.46 ON C ON C Sustainability Report2019PTPerusahaanGasNegaraTbk multiplied bytotalpassengersCO Every businesstripbyplaneisrecordedthen ICAO EMR Electricity factors basedondatafromtheDirectorateGeneral KWh datafromPLNbillingismultipliedbyemission O2EQ) [GRI305-3] O2EQ) [GRI305-2] 76,524.67 2019 1,474.38 Calculation Method Calculation Method 51.90 82,612.63 2018 1,445.89 2 57.14 /journey basedon 87,099.24 2017 1,265.06 68.85 67

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Emission Reduction [GRI 305-5] The efforts to reduce emissions undertaken by PGN refer to the Occupational Safety and Health, Safety and Environmental Management and Energy Policies which were passed on October 15, 2018, which is aimed to protect the environment through the management of GHG emissions.

Table of Emission Reduction

2019 2018 2017

Emission reduction (ton CO2eq) 78,847.44 61,774.15 67,077.20

The scope included in the calculation of emission reductions is Scope 1. The source of emission factors and the value of the potential for global warming (GWP) used is the IPCC Guideline 2006. Calculation of emission reductions is done by comparing emissions before the program is conducted and after the program. The base year used is the year when the modifications were made.

Air Quality Monitoring PGN also monitors air quality in chimneys from sources of combustion emissions, namely gas turbines, gas engine generators, and diesel engine generators. The monitoring is carried out periodically in accordance with Minister of Environment Regulation No. 13/2009 concerning Emission Quality Standards for Immovable Sources for Oil and Gas Businesses and/or Activities. Monitoring results in 2019 show that emissions from chimneys meet applicable quality standards.

NOX, SOX, and Other Significant Air Emissions [GRI 305-7]

2019

Parameter Denomination Quality Test Result Quality Test Result Quality Test Result standards standards standards Gas Gas Turbine A Gas Turbine B Gas Turbine C GEG *) GEG A GEG B DEG *) DEG Turbine *) Mar-19 Aug-19 Mar-19 Aug-19 Mar-19 Aug-19 Mar-19 Aug-19 Mar-19 Aug-19 Mar-19 Aug-19

Carbon mg/Nm3 - **) **) **) **) **) **) 500 462 37 455 75 600 475 178 Monoxide (CO) Sulphur mg/Nm3 150 <1 15 <1 13 4 1 150 2 18 2 10 - **) **)

Dioxide (SO2) Nitrogen mg/Nm3 320 30 <1 29 <1 34 31 400 204 356 208 169 1000 639 326

Dioxide (NO2) Total mg/Nm3 50 10 10 5 12 35 28 50 2 10 10 5 - **) **) Particulates

*) Minister of Environment Regulation No. 13/2009 concerning Emission Quality Standards for Immovable Sources for Oil and Gas Businesses and/ or Activities and the Governor of South Sumatra Regulation No. 6/2012 concerning Quality Standards for Emissions from Immovable Sources and Thresholds for Motor Vehicle Exhaust Emissions **) Not required to be measured

Emissions of Ozone-Depleting Substances (ODS) [GRI 305-6] In our operations, we use ODS as an AC refrigerant. In the production process, there are ODS emissions of 0 (in metric tons equivalent to FCF-11). aadu wse aaeet emt, hte fr rnprain cleto, tlzto, rcsig ad landfilling and permits inaccordancewithapplicableregulations. processing, utilization, collection, transportation, for whether permits, management waste hazardous have that parties third are which contractors, management waste hazardous of services the uses PGN treatment unit. disposal or own its have not does PGN waste, hazardous the of disposal final and treatment of mechanism the for As Hazardous WasteDisposalandTransportMethod 3. 2. 1. report, namely: this in report will we that waste of types three are There of hazardouswaste. accumulation the reducing thereby lamps, (LED) Diode Light-Emitting with mercury use that lamps replaced gradually we example, For disposal. waste impacts by caused the minimize to planning through waste of is been putting our best endeavors to reduce the amount management waste to reducing waste from source. That imparts that we have related strategy PGN’s WASTE Total Office space Gas DistributionManagementRegionalIII(GDMRIII) Gas DistributionManagementRegionalII(GDMRII) Gas DistributionManagementRegionalI(GDMRI) Gas TransmissionManagement(GTM) Total Other (stabilization) Landfill Recycle Wastewater. Non-Hazardous Waste Hazardous Waste Table ofHazardousWas te b Table ofHazardousWaste PrWokUnit(Ton) Disposal Method Work Unit y Disposal TypeandMethod(Ton) [GRI306-2] Sustainability Report2019PTPerusahaanGasNegaraTbk per workunit: 2019 during generated waste hazardous the the of amount is following The 9.892260. of year previous the to compared 39% of increase an tons, 13.760261 was PGN In 2019, the amount of the hazardous waste generated by • • • • • several • produces PGN activities, Hazardous wastesincluding: operational its In Hazardous Waste Used packaging ofhazardous material. TL lights Used batteries Used filters Used rags Used lubricatingoil 13.760261 1.856143 5.936172 5.967946 2019 13.760261 10.991745 0.608800 0.847340 0.503585 0.808791 2019 2018 9.892260 0.296090 5.179250 4.416920 9.892260 0.324200 1.275440 0.431860 0.475670 7.385090 2018 12.062950 12.062950 2017 0.381850 0.346400 0.407915 0.953480 9.973305 0.230394 4.030088 7.802468 2017 69

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All of the aforesaid methods are carried out by third parties who have hazardous waste management permits. The hazardous waste is temporarily stored in PGN’s Temporary Storage (TPS) according to the permitted shelf life, to be transported and processed outside PGN’s operational area by a third party, PT Prasadha Pamunah Limbah Industri. When entering the Temporary Storage, the hazardous waste is weighed and recorded. Following are the hazardous and transported according to our records in 2019:

Table of Hazardous Waste Transportation [GRI 306-4]

Category Weight (Ton) The hazardous waste transported 13.760261 The hazardous waste imported 0 The hazardous waste exported 0 The hazardous waste processed 0

Non-Hazardous Waste The non-hazardous waste generated by PGN includes paper, plastic, scrap, food scraps, and leaves.

Non-Hazardous Waste Disposal Method

Table of Non-Hazardous Waste by Disposal Type and Method (Ton) [GRI 306-2]

Disposal Method 2019 2018 2017 Reused 5.1 5.3 3.2 Managed by third party 221.5 297.0 233.7 Total 226.6 302.3 236.9

The method of management and disposal of non- Wastewater hazardous waste is first sorted and collected based on Production process activities do not use water so the the type of waste. For paper waste, newly used on one production processes do not produce wastewater. For side can be used again on the reverse side. Furthermore, maintenance activities, a small amount of water for cleaning paper waste that can no longer be used and other Non- pipes, machinery, and so on is used. Wastewater from Hazardous waste that has been sorted and collected by this maintenance activity is treated in the API Separator type of waste is transported to the Temporary Disposal unit before being released to a water body. To ensure Site and then to the Final Disposal Site in cooperation wastewater quality, an accredited laboratory samples with the Regional Sanitation Office. The non-hazardous and analyzes wastewater every month. Monitoring results waste contractor is the local Regional Sanitation Office or show that the quality of wastewater meets the quality a partner appointed by the Regional Government. standards based on South Sumatra Governor Regulation No. 8/2012 concerning Wastewater Quality Standards for Industrial, Hotels, Hospitals, Domestic and Coal Mining Activities. The measurement methodology refers to SNI (Indonesian National Standard). During 2019,werecordednosignificantspills The followingaredataontreeplantingforthepastfouryears: habitat andthesurroundingenvironment. trees absorbs the concentration of CO of concentration the absorbs trees PGN planted 70,035 trees in 2019. The trees planted are mangrove, rubber tree, and local plants. The presence of these Related to nature conservation efforts, PGN has a greening program that aims to reduce GHGs and preserve ecosystems. as discussedmorefullyintheCSRsectionthisReport. programs (CSR) Responsibility Social Corporate excellent undertaken have we sustainability, environmental maintaining while generations future and present of needs the meeting for responsible be to commitment our with accordance In ENVIRONMENTAL PROGRAM released tothewaterbody: being before unit Separator API the in treated been have that activities maintenance from wastewater is following The Unmeasurable River Pematang Kemiri The Destinationof Size ofWaterBodies&Related Water Released Wa Wa 85,329 ter BodiesAffe ter Dischargb trees 2016 Habitats Undetermined cted b Volume y Qu ality andDestina y Wa 2 gas in the atmosphere and replaces it with O with it replaces and atmosphere the in gas 96,314 No Is theWaterBodyDesignatedasa trees ter Dischargesand/oRunoff[GRI306-5] 2017 oil usestheAPISeparatorunit The methodofseparatingwaterfrom quality standards Water qualityisinaccordancewith Water Quality&TreatmentMethod [GRI306-3] National ProtectedArea? tion [GRI306-1] . Sustainability Report2019PTPerusahaanGasNegaraTbk 30,000 trees 2018 There arenoprotectedspecies The otalNumberofProtected No 2 Is WaterReusedByOther gas which is beneficial for the for beneficial is which gas Organizations? Species 70,035 trees 2019 71

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In implementing environmental conservation programs, PGN has issued a budget of Rp17,505,307,854 with the following details:

Activities 2019 2018 2017 Preparation of AMDAL/UKL-UPL documents and the 1,369,600,000 1,475,209,411 1,357,150,089 management of environmental permits

Environmental monitoring 6,883,000,000 6,148,093,800 5,437,588,290

Environmental campaign 69,383,356 15,000,000 39,906,400

Hazardous waste management 2,616,453,000 2,154,599,000 2,390,782,205

Environmental management related to PROPER 3,783,520,000 1,329,900,000 1,595,442,248

Environmental training 790,802,223 138,606,741 37,451,295

Energy monitoring system and carbon calculator 166,650,000 1,572,451,067 1,353,279,840

Energy efficiency program 1,205,600,000 552,000,000 1,318,962,500

Facilities for hazardous waste Temporary Disposal sites 292,000,000 450,000,000 626,561,805

Environmental reporting 7,248,800 10,982,500 18,407,475

Environmental management system 321,050,474 129,866,950 166,990,439

Construction of Hazardous Waste Temporary Disposal - 420,596,000 1,959,836,208 Areas

Making secondary containment - 214,946,306 -

Construction of domestic wastewater treatment - 2,398,409,000 -

Total 17,505,307,854 17,010,660,784 16,302,358,794

Sustainability Report2019PTPerusahaanGasNegaraTbk 73

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MAINTAINING PROSPERITY OF THE COUNTRY

PGN consistently invests in community empowerment and development. We strive to improve the living standard of the community and the skills of the fostered partners through the CSR program. Sustainability Report2019PTPerusahaanGasNegaraTbk 75

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Our commitment is to build PGN as a company that concerns about the sustainable development principles while still continuing to generate company profitability in the midst of dynamic business conditions as a tangible embodiment in maintaining country’s prosperity. 7. 6. 5. 4. 3. 2. 1. obtained from the PGN Fostered Village Program include: benefits to the community and the company. The impacts give to able are that programs create to continues PGN sustainable the support fully development inIndonesia. to able are they later that villages developed independently become to area operational the around villages developing in involved is PGN Division. CSR by conducted programs and policies (CSR) Responsibility Social Corporate to is: efforts SDGs to achieve related work real PGN’s of form of One our to realization commitment forthecountry. a as development Indonesia’s to contribute to evidence an became has years 55 almost for PGN of existence The 2030. until or years 10 to up of period a with indicators, 169 230 of include details with targets that goals development sustainable 17 achieve to commitment global a by bound are countries other 192 with Indonesia the Sustainable (SDGs). Goals Development achieve to to role efforts Government’s active the an supports fully have PGN programs, that government contribute entity business a As ACHIEVING SDG CSR POLICYANDSUPPOR to othersectorinplaces, the towards company existence, so that dependence the funds can be allocated community Reducing companies for caused bysocialaspects, disruptions operational Reducing PGN, between community, andlocalgovernment, relationship harmonic Enhancing local Increase localincome, of quality and community, awareness health Increase reducing unemployment inthearea, and opportunities employment Creating community, local the of welfare and independence the Improve T IN Sustainability Report2019PTPerusahaanGasNegaraTbk [GRI 103-1] by creating an inclusive and sustainable economic growth. station offtake the around community the in inequalities operational the realize reliability of the company in accelerating efforts to to reduce able be to expected is role the people where the offtake station is located. This active conditions. This strategic function of PGN is distributed to polluting and inefficient in cooking of problem the with world the of people billion three around is to answer in Indonesia the station offtake PGN’s of existence The of availability clean andefficientcookingfuel. the ensuring namely sector, energy the in development sustainable of challenges the of one to supplies in Indonesia. In this context, PGN has contributed energy affordable and clean of stability the maintaining Station, Batam. These gas stations have a strategic role in South Palembang, Panaran Lampung; Station, Labuhan Maruhani Sumatra; Enim, Muara Station, Pagardewa Banten; Serang, Station, Bojonegara namely objects, vital in 4 offtake stations (PGN gas stations) which are national is Program Villages Fostered the of Implementation The kind, andprobono. in commercial, of form the in community investment) (community the for investments corporate are CSR of Various programs carried out in coverage the seven pillars 7. 6. 5. 4. 3. 2. 1. The sevenpillarsofPGN’sCSRare: 9. 8. and communityeconomicempowerment alleviation poverty of context the in assistance Social Assistance for natureconservation Assistance in worshipfacilities and /orfacilitiespublic infrastructure of development the with Assistance Health improvement assistance Educational and /ortraining assistance Assistancefor victimsofnatural disasters community welfare. supporting in PGN and SOE of role the socialize To corporate socialactivities. in involve to employee PGN for platform a Become [GRI 203-1] 77

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The Fostered Village Program is carried out through needed by the beneficiaries. In addition, PGN also several stages, namely: stakeholder and social mapping. optimizes the management and distribution of PKBL Program Planning, Program Implementation, Program program funds so distribution and equity of development Monitoring and Evaluation, and program submission welfare can be realized. to community groups (Exit Strategy). The whole phase involves the community and local government, so the The Social and Environmental Responsibility policy refers programs so the program created is a mutual agreement to ISO 26000 on Social Responsibility; it is a guide issued between PGN and Society. In order to achieve village by the International Standardisation Organisation (ISO) independence, every village was encouraged to establish and covers 7 aspects, namely: [GRI 103-2] development community in the form of Village-Owned Enterprises (BUMDes) and other institutions, with various 1. Organizational Governance business units the people under it. 2. Human Rights [GRI 103-2], [GRI 103-2] 3. Employment (Labor Practices) 4. Environment PGN also continues to strive to involve various parties, 5. Fair Operating Procedures such as the local community, community leaders, 6. Consumer Issues local governments, academics and non governmental 7. Community Involvement and Development. organizations in planning, implementing and evaluate various activities in which the program created is truly

grated ic Inte Appr list oac Ho h

Community Involvement and Development Human Rights Organizational

Customer Organization2016 Labour Issues Practices

Governance Fair The Operating Environment Practices

Interdependence

ISO 26000 2. 1. Governance Human Rights officially licensedsoftware. of use the through first integrity of principle the puts PGS Moreover, interests. political any to contribute not does and detached is PGN politics, Concerning the beneficiaries,especiallycommunity“. for sustainable are that programs running with CSR by the formation of a special department that handles manifested CSR handles that department particular a of establishment the by realised is sustainability environmental GCG and CSR for concern encourages Our principles. environment operating our of the that areas the in CSR ensure of promotion and implementation further We management. CSR including Company, the managing in Governance PGN is immersed in the principles of Good Corporate and partnership. five pivotal aspects: people, planet, prosperity, peace, the principles and practices of sustainability, elevating all integrating in engages PGN In decisions, and planning application. and dissemination targeted by followed then are which regulations, and laws under Company the in apply that manuals and procedures, operating guidelines, of variety a upgrading keep We the improving Company’s image. and economy the to contribution PGN’s asincreasing as well efficient manner, professional, effective and a in PGN the of 29, on management spurring October include objectives on whose 2019, dated P-003/0.20 Guidelines Governance Corporate Good on based guidelines provisions andpreparescorporategovernance statutory under organs Company’s the of function every employs PGN 26000. ISO in outlooks other six the with integration its and CSR of implementation successful the for impetus an been has Governance rights to get proper remuneration and to have an have to and remuneration proper get to rights employee of terms employees’ the over watch to manage we relations, In stakeholder. relations each its with operations Company’s the around Rights Human the for vouches and respects PGN Sustainability Report2019PTPerusahaanGasNegaraTbk 4. Environment 3. Employment environmental mitigation efforts, and building and employee awareness of environmental preservation. efforts, mitigation environmental system, environmental monitoring, resource savings, management environmental an of application the includes which policy environmental comprehensive a prepares PGN habitats. natural of restoration and biodiversity environment, change; the of protection climate (d) and of mitigation and (c) pollution to resources; adaptation of (a) use continuous (b) namely prevention; aspects, four to environmental attention pay We generation. next world the sustainable to and are green on we hand for to striving environment, the be about to PGN concerned of commitment serious a been has It strategic policiesinhumanresourcemanagement. multiple ameliorate and adjust to used are workers the from coming Suggestions conditions. regarding working judgment their express to opportunity the have workers the survey, satisfaction Employee the Through workers. our of voices the for care and of competency assessments. results We also promote dialogue the to according workers of quality the in improvement the and hours, working safe of level is environment attested by the work low turnover rate of workers, the high conducive This employee. every of potential the explore will that opportunities providing while environment work comfortable and safe dialogue, a create to strives always PGN development. social occupational health and safety, and human conditions, resource namely of employment, environmental aspects five are There enhance theirindependenceandwelfare. are assistance to subjects as community the involving by afforded and implementation Program program. CSR its implements and operates it which cares about the human rights of the communities in PGN community, the Concerning very well-maintained. is rights human of to ensure implementation the that officers security and workers among socialisation rights human holds On PGN that, year. of top reporting the during discrimination of incidents zero to leads that equality of principle the uphold We association. an into join to opportunity 79

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These policies and programs refer to the ISO 14001: 7. Community Involvement and Development 2015 Environmental Management System. Also, The community is a vital element for the progress PGN involves an independent external party in of PGN, as the community’s existence and support environmental monitoring related to PGN. helps us evolve. In this manner, PGN is investing in the community in the form of CSR programs, 5. Fair Operational Practices such as: assistance for victims of natural disasters, PGN implements fair operational practices in educational assistance, health improvement every aspect of PGN’s operations along with assistance, development of infrastructure and / each PGN stakeholder. We nurture compatible or public facilities, assistance for Worship Facility, cooperations based on a code of conduct and Nature Conservation and poverty alleviation. Every fairness with suppliers, governments, consumers, planning program for community development and other organisations. PGN applies a competitive involving various elements of the community and remuneration and promotion system at every level local government officials, so that the resulting of office, regardless of background or gender, and is programs were an agreement between PGN and rather based on the performance of each employee. the community. We open up opportunities for every credible supplier, support fair competition, and promote anti- The implementation of ISO 26000 in organising corporate corruption principles. social responsibility activities provides various merits, such as: 6. Customer Issue 1. Knowing how the programs will be implemented PGN is committed to providing customer services at favorably predisposes the ecosystems, in turn their best, not only by various customer satisfaction contributing towards sustainable development. programs but by our prominent products. We tend 2. Being able to identify, to feel involved, and to respect to make sure that every customer has a positive the expectations of relevant stakeholders. experience with PGN from the very beginning. To 3. Being able to elucidate relevant and significant issues that end, PGN prioritises the health and safety of our to enable the preparation of programs based on customers through our compliance with applicable priorities. regulations, unequivocal quality checks, and 4. Enabling the fulfilment of internal and domestic maintaining quality in accordance with regulations regulations in the preparation and implementation and standards. For the convenience of customers, of programs; at the same time, however, following PGN provides a complaint and information centre as universal norms. well as a “contact centre” that operates 24 hours a 5. Integrating program accountability and proportional day and 7 days a week. interrelations with the surrounding community. Lampung, West Java, Partnership Program South umatra, CSR ORGANISA Jakarta and around Operational CSR Community Development Motto TIONAL STRUCTURE &CSRProgram East Java > > > Director ofHumanCapitalsand administrator ofCSR; Being atrustworthy stakeholders; relationships with Creating HARMONY community PROSPERITY; improvement of Contributing to 5LeadingCommitmentswithinImplementation: President Director Division Head,CSR General Affairs Development Sumatera Sustainability Report2019PTPerusahaanGasNegaraTbk North CSR CSR PlanningandControlling > > environmental issues. EMPATHY onsocialand environmental issues; for socialand Being RESPONSIVE Corporate Secretary & A & CSRProgram Development Partnership Community Budgeting dministration Program 81

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In its implementation, PGN seeks to have a promising COMMUNITY DEVELOPMENT impact in the communities around PGN’s operational PROGRAM [GRI 203-2] areas. Our CSR Programs not only into donations, but also 1. Victims of Natural Disaster PGN prepares a CSR Roadmap that guides the Company Victims of natural disasters are still and will continue in performing CSR that is effective, efficient, and lucrative be the focus and attention of PKBL activities PGN. to the community. This is a form of PGN’s concern for the problems that potentially affect economic condition of the The implementation of our CSR programs consists of: area and citizens affected by the disaster. Report in 1. Supporting the existing business interests of the 2019 The United Nations (UN) records the value of Company, direct economic disadvantage disasters nature in 2. Supporting the Company’s business development various parts of the world throughout 1998 - 2017. activities, It is estimated to reach nearly USD 3 trillion and 1.3 3. Maintaining the security of the Company’s assets, million lives. This figure shows increase trends caused 4. Providing benefits to stakeholders, and by climate change and weather. 5. Supporting government programs.

In the domestic context, the National Disaster PARTNERSHIP PROGRAM Management Agency (BNPB) reports the number The Partnership Program is a program organised by of natural disasters caused by hydrometeorological PGN to enhance the SMME abilities to be strong and and geological factors in Indonesia at 3,721 natural independent. In 2015, PGN temporarily suspended the disasters. The types of disasters that occur are distribution of Partnership Program funds until 2019. forest and land fires, floods, landslides, droughts, In 2019, accordance with directives from the Ministry of earthquakes, tidal waves, volcanic eruptions, and by SOEs, PGN distributed its Partnership Program funds destructive whirlwinds. Based on the diversity of these through an appointed SOE that had been determined types of disasters, PGN performs policy to provide to distribute SOE Partnership Program funds, namely assistance to victims of natural disasters not only to PT Permodalan Nasional Madani (Persero). PGN has one but several types of natural disasters, including: been consistent in maintaining the process of returning a. Repair of whirlwind victims’ houses in Kampung receivables running by monitoring the operation of SOE Lebak Sari, Bogor synergies and intensively returning the fostered partners. b. Assistance North Maluku Earthquake victims c. Ambon Earthquake Disaster Response. On the other hand, PGN monitors the sustainability of fostered partner businesses. PGN seeks to encourage the economy of the community in all operational areas and its surroundings through the Community Development program to reduce economic disparities in economic development. This program is a process in which community members take joint actions and find solutions to solve common problems. assistancefor Education 2. a. The assistances include: innovative programsforstudents. of distribution educational facilities andinfrastructure as well the through activities CSR its focus to PGN propels This teachers. for support capacity- building of dearth the and environment, effective learning an provide to facilities and of paucity infrastructure the people, illiterate of number the are hindrances These it. handle to parties all from help and attention particular requires that development sustainable for challenge a is education of quality The assistance that would be used by BKSDA officers given that they were the frontline in the handling of the fires. the for grateful very was group his that said Suharyono, Center, Riau BKSDA Riau the the of Head The and Center. KSDA Center Health Jayamukti Center, Health Village Barat Sebatang the namely representatives, beneficiary the to area Pekanbaru PGN the of representatives by directly over handed was assistance The District, andtheNaturalResourcesConservationCenter(BKSDA)ofRiauProvince. Dumai East City, Perawang namely disaster, the by affected were that Riau in areas three in provided was size) 30 sets, MTM particulate filter 7093 P100 60 EA/case 37 sets, and temple drops of 150 bottle. Assistance (medium 6,200 masks, respirator reusable facepiece half 3M masks, dust N95 1,800 masks, room 4,500 of form the in assistance provided PGN disaster, fire land and forest the for care and responsibility of form a As 49,266 hectaresoralmost15%occurredinRiau. 2019, August to January during Indonesia throughout land burned and forest of hectares 328,724 of total a from data, (BNPB) Agency Management Disaster National the of basis the On levels. regional and national the at both parties multifarious of attention deserving disasters natural the of one are fires land and Forest h rnvto i epce t b ueu a it as useful the in contentment develop to tends It be. should be to expected is renovation The of Institute Technology language laboratory Del in North Sumatra. the of renovation the is sector One of PGN’s assistance programs in the education Institute ofTechnology DEL the of Laboratory Language the Renovating PGN ASSIST S INTHEFOREST ANDLAND FIRESINRIA Sustainability Report2019PTPerusahaanGasNegaraTbk c. b. U o hg sho/oainlhg sho students. school school/vocational/high high for on early country the a for love have and pride of to sense aims which program Negeri) Untuk Hadir (BUMN Nation the for SOEs the of series a is (SMN) Program Nusantara Mengenal Siswa The Siswa MengenalNusantara(SMN) the learningprocessofITBMBAstudents. of quality the improve can that network internet and wireles facilities strong a by supported is It campus atmosphere. modern with to interact students MBA for place a is which building canteen the of improvement or renovation the is sectors education other in assistance PGN’s ITB SBM at Building MBA Canteen the of Renovation Del instituteoftechnology. the at students of activities learning and teaching 83

About the Governance Maintaining the Maintaining Maintaining the Maintaining Maintain Sustainable Maintaining Maintain Remarks Report Sustainability Customer Health and Occupational Health Quality of Pgn Prosperity of Environment the National Sustainability Safety and Safety Employees the Country Economy 84 PT Perusahaan Gas Negara Tbk Sustainability Report 2019

Siswa Mengenal Nusantara Program (SMN)

The purpose of the Siswa Mengenal Nusantara Program (SMN) is to have a sense of pride and love for the motherland from an early age to high school/vocational/special high school students. The diversity of the Archipelago’s wealth and regional potential is introduced through direct interaction of students with the Government and community components in the provinces visited. Participants in Student Activities are grade XI high school/vocational/special high school students in a number of regencies and cities in these provinces. This year, SMN participants were 851 students in all provinces and sent to other regions for one week in the second or third week of August 2019.

PGN runs the program in the Province of Bali with 3, which is to ensure a healthy life and to prioritise 25 students from 9 districts. The participants from health at all ages. Among the challenges that require a Bali visited the Province of West Kalimantan. helping hand from all parties, PGN deems that health d. Leadership and Innovation Camp Program facilities and infrastructure assistance are the ones e. SOEs Goes to Campus: UNIKA Santo Thomas that need the focus of CSR assistance. Based on the f. PGN Teaches SMAN 6 Yogyakarta. United Nations data for 2013 - 2018, there are at least 40% of countries in the world that have not been able 3. Health Development to afford 10 doctors per 10,000 population and more Health is one of the focuses of attention in the than 55% of countries in the world have less than 40 Sustainable Development Goals, particularly in Goal sisters and midwives per 10,000 population. Facilities andPublic infrastructure 4. a. addition toseveralotherfacilities,suchas: in aid CSR PGN’s of focuses the of one become facilities has water clean of provision For the 100%. reason, at this set is target SDG’s the reach while 72.6% to estimated is sanitation achievement good This facilities. to access lacked 99.7 people and million water clean of shortage a Indonesia experienced in people million 33.4 that noted (BPS) AgencyStatistics National The water. clean to access augmented by accompanied been necessarily not has decades two past the over economy increasing public Indonesia’s life. of quality and minimum a and economy infrastructure of facilities is a precondition for creating a conducive availability The d. c. b. a. Thus, PGNprovideshealthassistance intheformof: and inGunungkidul,SpecialRegionofYogyakarta. Banten Tangerang, in villages several in example for or areas, provision several in the water clean in of distribution helps also PGN people for need, water in clean of needs the meet To Clean Water Facilities Assistance procurement ofambulancesinseveralareas. the for assistance its distributing in participates in handling emergency conditions. Therefore, PGN activities support and enhance can ambulance an by institutions, legal entities, or foundations where An ambulance is a basic need that must be owned Ambulance Procurement PGN GuidedVillages the in centre health village the from Assistance in workers PGN Jakarta, Medan,Pekanbaru by Program Donation Blood poor people. for examinations medical and treatment medical free counselling, These health include areas. services health operational PGN’s in especially cars, healthy through services by health providing participates PGN health, public improve To PGN’s operational areas in Cars Healthy through services Health Development Sustainability Report2019PTPerusahaanGasNegaraTbk placeofWorship 5. c. b. distribution ofassistancesincluding: the through community the of health mental the on impact an have to expected is This health. spiritual to to activities several improve worship facilities and held other assistance related PGN achievement, this support To others”. and themselves towards attitude positive a have and should they as others accept to able be and challenges life’s face to able blithe, and defines mental health as (WHO) “when a person feels healthy Organization Health World The welfare ages. support all to for and life healthy a ensure to is health, which 3 mental Goal of target good achievement the in of revealed part are needs Spiritual ioo te i hpfly a b dvlpd for areas outsideCibogo. developed be can hopefully it then Cibogo, in community for benefits and results promising a gives factory this If District. Lembang in (SNO) Orientation Needs Societal meet to program work a also is program This kg/hour. 400 of capacity a with facility pelletization by manure cow community a building village Cibogo the assists PGN Assistance, Bandung Machine Pellet Cibogo and Development Factory the MetroJayaRegionalPolice Provision of Mobile SKCK Service Car Assistance to 85

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a. Renovation of Facilities for Worship in Mosques, the land becomes productive land to support the Churches, and Temples main tasks of the unit and help the surrounding As a form of PGN’s concern in community environment. religious activities, PGN has assisted in the b. Biodiversity Assistance in Bedegung, Estuary Enim, construction or improvement of religious South Sumatra facilities to support community worship activities c. Making Arboretum in Pagardewa, Estuary Enim, including renovation of mosques, churches and South Sumatra temples in several areas. d. Revitalising the Mangrove Forest Canal of b. Providing donations for orphans on the Sriminosari Village, Lampung commemoration of Nuzulul Qur’an e. Development of Family Medicinal Plants in Tembesi PGN also helped orphans and their operational Village, Panaran. assistance. c. Religious Holidays 7. poverty Alleviation PGN’s assistance in the worship facilities sector Poverty is a major global challenge that includes includes the celebration of religious holidays, ensuring social protection, increasing access to for examples the assistance of sacrificial animals basic services, and building resilience to the effects around PGN operational areas, Christmas of natural disasters that can cause severe damage celebrations for several churches, and Saraswati to people’s resources and livelihoods. The broad celebrations in Bali. dimensions of realisation include not only the economy but also health, education, livelihood access, 6. nature Conservation and so forth. In Indonesia, poverty alleviation is still The environment is one of the four pillars supporting a challenge considering the number of poor people the achievement of the Sustainable Development as of September 2019 reached 24.79 million people. Goals in Indonesia. Included in this pillar are Goal Although it has decreased by 0.88 million compared 6 (Clean Water and Appropriate Sanitation), Goal to September 2019, this achievement is not a basis 11 (Sustainable Cities and Settlements), Goal 12 for PGN to continue to carry out various poverty (Responsible Consumption and Production), Goal reduction assistance programs. This is reflected in the 13 (Handling Climate Change), Goal 14 (Ocean following activities: Ecosystems ) and Objective 15 (Mainland Ecosystems). a. Low Cost Food Program The following are some forms of PGN’s assistance PGN’s contribution to poverty alleviation in the encapsulating efforts to achieve these six goals of community is through the Low Cost Food program sustainable development in the Environmental pillar: implemented in several areas, including; Meulaboh a. The utilisation of vacant land on the banks of the (2,500 Beneficiaries), Pangandaran (3,000 Ciliwung river Beneficiaries), Jombang (1,000 Beneficiaries), This assistance is aimed at helping the utilisation of Bekasi (2,000 Beneficiaries), Bangli, Gianyar and vacant land along the Ciliwung River along with the Denpasar (2,000 Beneficiaries). This low cost Battalion Commander 811 Kopassus Unit; thus, food was accessed by approximately 10,500 beneficiaries. 2. 1. the appreciationwereceivedthroughout2019,suchas: organizing in performance by evidenced is programs environmental and community and commitment PGN’s Natural Disasters Total Social CommunityinthePovertyAlleviation Nature Conservation Worship Facility facilities Development infrastructureand/orpublic Health Improvement Education Facilities b. ltnm ak Ain ee) sa Sustainability Asia Level) Reporting Rating, (Asian Rank Platinum Best ofthe BalkondesAwards 2019, fostered villagesinEastLampung. Maringgai Bojonegara Labuan and Enim, Serang villages, fostered Muara in villages fostered Pagardewa and Batam, in Panaran villages fostered include Tambesi Village Fostered PGN’s economy. their improve can and competitive be can village the in communities the that hoped is it Program, Village Fostered the with communities area so that it can create superior and competitive Station Offstake PGN the around community the of harmony the maintaining to committed is PGN Fostered VillageProgram Sector 37,100,372,267 22,588,783,127 8,592,262,489 2,718,930,196 2,158,069,557 108,283,786 539,879,421 394,163,691 CSR Sustainability Report2019PTPerusahaanGasNegaraTbk five hundredsixty-fiverupiah)thedetailsasfollows: thousand thirty-five hundred nine million thirty hundred three billion nine (eighty Rp89,330,935,565 to amounting were obtained from the company’s budget with a total aid Funds for the Community Development Program and CSR benefits fortherecipientsofassistance. optimal andprovide efficiently, effectively, run can out PGN its of quality regulations. the management and distribution, so that all activities carried improve to applicable strive to continues with also accordance in funding adequate providing by activities of PKBL realization various the supporting to committed fully PGN SDG’s, the in goals development achieve to effort an In ACTIVITIES COST AREEXPNDDFOR 5. 4. 3. Green PROPER award at the Offtake station Pagardewa Sustainability Performance, Overall on Based and Sustainability, Business & CSR Project-Based Guidance), (CSR 26000 CECT Sustainability Award 2019 Category Based on ISO ESDM Disaster Preparedness Award, Community Development Realization 1,727,372,906 7,703,967,446 9,916,471,968 779,887,720 12,265,971,940 16,354,505,684 52,230,563,298 3,482,565,634 1,174,051,411 1,835,656,692 20,858,054,429 10,422,897,642 26,071,348,761 18,512,575,241 10,456,351,389 89,330,935,565 Total 87

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MAINTAINING THE QUALITY OF PGN EMPLOYEES

Having acknowledged that every individual of PGN has been a prominent thrust of the Company, PGN has a concern with the convenience, the safety of the work environment, as well as the advancement of professionalism and the potential of each employee. Sustainability Report2019PTPerusahaanGasNegaraTbk 89

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In realizing the vision of PGN 2020 to become a world-class energy company in the gas sector, PGN strives to create a competitive, safe, and comfortable work environment that is able to encourage every PGN employee to continue working and innovating under all conditions. A conducive work environment is characterised by low employee turnover rates, high levels of safe working hours and improved quality of workmanship according to the results of the competency assessment. h epoes nml te potnt t dvlp a develop career, fairremuneration,andguaranteedwelfare. to opportunity the namely employees, the Employee from obtained were views main three year, this and year, The a once management. regularly, conducted is (EES) Survey Engagement Resource Human in policies strategic various in improvement continuous triggers for as criticisms and suggestions workers’ utilizes Company The situations. work regarding assessments their submit to and opinions their express to right the have they (EES), Survey Engagement Employee the With and competitiveness determination toovercomechallengesandhindrances. keen have who individuals with opportunities employment equal or cooperation through activities operational extending continue strong to commitment a has PGN perspective, aforementioned basis the the of On thoroughly. and systematically planned, been have that concepts realize to and deliberation, and revitalisation, transformation, and about capacity bring the to have capability productivity beings Human and company. a stability, in progress, the of of one is benchmarks innovator and activator an as Working EMPL DEVL STRATEGY ANDPOLICY Total Temporary Employees Permanent Employees b To y gender O t al numberofemplo OPMENT FPGN’S YEES yees b Male 1,024 1,024 y emplo 1,375 2019 0 Female yment c 351 351 0 Sustainability Report2019PTPerusahaanGasNegaraTbk ontra Human CapitalManagementdivisiondataareasfollows: from compiled profiles employee general, In retirement. 2019. In addition, in 2019, a number of employees entered increase was due to the implementation of recruitment in an increase of 6.18% compared to the preceding year. This In 2019, PGN had 1,375 employees throughout Indonesia, [GRI102-8] PROFILE OFPGN’SMPL applicable lawsandregulations. with accordance in Agreement, Labour Collective the in to promotion, gain listed rights other acquire to and careers, their develop to education, their continue to employees PGN all increase for opportunity the provides to PGN expected Company. the to loyalty and is with, satisfaction employee program improvement employee increasing motivation. On top of that, thus the existence of a competency certification, and training professional organizes regularly PGN Consequently, the Company. of progress the benefit ultimately which will employees of quality the improving in policies PGN deems that education and training are the strategic Male ct 974 974 s (permanentandempoary), 1,290 2018 0 Female 316 316 0 Male 1,012 1,012 1,339 2017 0 O YEES Female 327 327 0 91

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Total Number of Employees By Employment Contracts (Permanent and Temporary), By Region Data for the number of employees by region in 2019, 2018, and 2017 are not separated by region. This is in line with the implementation of the transformation of the Company which revamped several systems and mechanisms for recording employee data. All employees are currently registered and reported as being at Head Office, Jakarta.

Employees by Employment Contracts and Gender

2019 2018 2017 Male Female Male Female Male Female Full-Time Worker 1,024 351 974 316 1,012 327 Part-Time Worker 0 0 0 0 0 0 Total 1,375 1,290 1,339

New Hires and Employee Turnover [GRI 401-1]

Selection and Appointment Policy for New PGN also participates in the Joint Recruitment of the Employees Ministry of SOEs conducted simultaneously to recruit the In order to support the achievement of corporate best workers in Indonesia. PGN welcomes enthusiastic targets, PGN recruits and appoints new employees. persons with disabilities to participate in the recruitment PGN’s Got Talent 2019 is a process for the recruitment process. Providing employment opportunities for persons of new employees at entry level, undertaken centrally, with disabilities is PGN’s commitment to providing to fill positions in PGN Holding and Subsidiaries (PGN opportunities for all people throughout the country. Group) in 2019.

SELECTION STAGES

32,461 Applicants

Administration Selection Test Management Medical Selection (Elimination selection) Interview Check Up

Top 40 per Top 3 per Top 1 or 2 per 158 formation formation formation trainees (Total (Total (Total participant= participant= participant= 5,200) 390) 260)

GPA, Acreditation Aptitude Test, Behavioral (University English Test, Interview and Major), Psychological (User and HC) Qualification Test, LGD Matched Recruitment Program. Joint SOE the and Program Talent Got PGN’s 2019 the through employees 120 of total a recruited PGN 2019, In retirement. employee work to due PGN largely is the environment within occurs that Turnover turnover. During 2019, PGN did not experience significant employee are packagedintoablendedprogram. This program includes in- class training, on- the- job training, and Project Assignment and Business Presentation which Employees. PGN as appointed On- be to candidates the best the in select to program part structured a is take which Program, to boarding invited are candidates employee PGN new process, selection rigorous a completing After Total Female 30-50 yearsofage Under 30yearsofage Male Above 50yearsofage Total Re Re cruitment ofEmplo cruitment ofEmplo . yee b yees b 2019 2019 y Age y Gender 120 114 120 38 82 6 0 % % 100% 100% 32% 95% 68% 5% 0% Sustainability Report2019PTPerusahaanGasNegaraTbk opn’ sneiy n uprig h independence, prosperity, andadvancementofthelocalcommunity. the supporting in sincerity Company’s the demonstrate to areas operational its around from workers recruits PGN out. carried activities recruitment the support to parties competent independent also national involves PGN website. Company’s in the on and announcements media print through recruits PGN 2018 2018 0 0 0 0 0 0 0 % % 0% 0% 0% 0% 0% 0% 0% 2017 2017 10 10 10 2 8 0 0 % % 100% 100% 100% 20% 80% 0% 0% 93

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Recruitment of Employees by Region

2019 % 2018 % 2017 % Jakarta and surrounding areas 83 69% 0 0% 10 100% Yogyakarta and surrounding areas 14 12% 0 0% 0 0% Surabaya and surrounding areas 18 15% 0 0% 0 0% Medan and surrounding areas 5 4% 0 0% 0 0% Total 120 100% 0 0% 10 100%

Employee turnover provides an opportunity for potential employees to join PGN. In 2019, employee turnover was 0.44%, with 6 employees resigning out of a total of 1,375. The main reason for the resignation of female employees was to abide by the wishes of their husbands. PGN maintains a good working relationship, creating a healthy, safe, and pleasant work atmosphere so that the employee turnover rate is very low. The following table shows employee turnover rates:

Employee Turnover Rates by Gender

2019 % 2018 % 2017 % Male 43 83% 38 77% 64 65% Female 9 17% 11 23% 34 35% Total 52 100% 49 100% 98 100%

Employee Turnover Rates by Age

2019 % 2018 % 2017 % Under 30 years of age 2 4% 3 6% 4 4% 30-50 years of age 3 6% 10 20% 24 25% Above 50 years of age 47 90% 36 74% 70 71% Total 52 100% 49 100% 98 100%

Employee Turnover Rates by Region

2019 % 2018 % 2017 % Jakarta and surrounding areas 50 96% 43 88% 73 75% Yogyakarta and surrounding areas 1 2% 3 6% 8 8% Surabaya and surrounding areas 1 2% 3 6% 17 17% Medan and surrounding areas 52 100% 49 100% 98 100%

EMPLOYEE TERMINATION

2019 2018 2017 Male Female Male Female Male Female Personal request 3 3 2 3 4 7 Disciplinary punishment 0 0 2 0 0 0 Deceased 0 2 4 1 1 0 Retirement 40 4 26 7 30 14 Early retirement 0 0 4 0 29 13 Other 0 0 0 0 0 0 Total 52 49 98 between maleandfemaleemployees. following is the ratio of PGN’s basic wage compared to the minimum wage in operating areas. PGN makes no distinction 3,940,973 (in DKI Jakarta). The Rp lowest entry level wage of PGN employees is above minimum wage in Indonesia. The to Sumatra) North (in 2,969,824 Rp from ranges areas operational PGN’s in wage minimum The level. entry including position, of level every at rates remuneration competitive implementing to committed is Company the Consequently, people. PGN’s of life of quality the determines that matters pivotal most the of one is remuneration that realises PGN WELFARE OFPGN’SPEOPLE * PGNnotengage workerstemporaryorparttime opnain o ter eiain o h Company. the to dedication their for compensation best the receive workers that ensure to aims fund This holidays, pensions. and religious allowance, age old leave, overtime, medication, covering allowances, and salaries employee for allocated Rp556,835,681,713 was 2019 in fund welfare employee the of amount total The Allowances [GRI401-2] Severance pay Pension fund Holiday allowance Leave forreligiouspilgrimage Menstruation leave Maternity leave Health InsuranceforEmployees’Children Health InsuranceforEmployees’Spouses Health InsuranceforEmployees Death Insuranceoutofwork Disability andAccidentInsuranceOutsideWorkAccidents Death insuranceduetowork Disability &WorkAccidentInsurance Allowance Salary Subsidiaries Program ManagementOffice Medan andSurroundingAreas Surabaya andSurroundingAreas Jakarta andSurroundingAreas Head Office/Holding RA ALLOW Operational Areas TIOS OFST ANCES GIVENT ANDARD ENTRY LEVELW O PERMANENTANDEMPOARY EMPLO Province/Regency Minimum Wage Amount. (Rp) A 3,940,973 3,940,973 2,969,824 3,871,052 3,940,973 3,940,973 GE [GRI202-1] Sustainability Report2019PTPerusahaanGasNegaraTbk Basic Salaryofthelowest operating locations,asfollows: PGN all at workers to given is allowance This talents. best the attract to able is PGN that ensure to implemented the is to package welfare competitive a commitment addition, In Company. and responsibilities work their demonstrate to eager are employees all Consequently, paid employee(new employee) (Rp) YEES Permanent Employees √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ 4,840,000 4,840,000 4,840,000 4,840,000 4,840,000 4,840,000 Wage RatioCompared to BasicSalary(Rp) Regional Minimum Non-Permanent Employees* N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 1.23 1.23 1.63 1.25 1.23 1.23 95

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Maternity Leave [GRI 401-3]

Employees Employees Employees Employees Rate of Employees Entitled to Taking Returning to Proceeding to Taking Maternity Maternity Maternity Work After Work 1 Year Leave and Returning Leave Leave Maternity Leave After Finishing to Work (%) Maternity Leave Male 0 0 0 0 0 Female 25 25 25 25 100% Total 25 25 25 25 100%

On the basis of PGN’s Collective Labour Agreement for DEVELOPING DIVERSITY AND 2017-2019, Article 33 regulates the provisions of the EQUALITY Leave Permit in paragraph 2, where the employee obtains PGN upholds the principles of diversity, equality, and a permit to not work while still receiving the Basic Wage non-discrimination. The Company does not distinguish for Childbirth as follows: between gender, race, religion, ethnicity and class, at all - Female workers are given maternity leave of 1.5 levels and positions of employees and management, in months before giving birth and 1.5 months after recruitment, remuneration, and placement of employees. giving birth. However, the nature of the work, the geographical location and character of PGN’s business make male employees In accordance with PGN’s Collective Labour Agreement more dominant. In operational areas, the majority of for 2019-2021, Article 33 regulates similar provisions female employees work at Head Office, Business Unit Gas as follows: Products, and Program Management Office. During 2019, - Female employees are given maternity leave of 1.5 there were no incidents of discrimination in PGN. months prior to giving birth, according to the doctor’s [GRI 202-2, GRI 406-1] or midwife’s childbirth calculations and 2.5 months

after giving birth. The majority of PGN employees are at the productive age of 30-50 years of age, namely 961 people or 69.9% of all employees. Employees with undergraduate and postgraduate education levels constitute the largest number with 837 people or 60.87% of all employees. The following data refer to the diversity of governance bodies and employees.

DIVERSITY OF GOVERNANCE BODIES AND EMPLOYEES [GRI 405-1]

Position 2019 2018 2017 Male Female Total Male Female Total Male Female Total Top Management 79 15 94 76 16 92 72 16 88 (84.04%) (15.96%) (6.8%) (82.61%) (17.39%) (7.13%) (81.82%) (18.18%) (6.57%) Middle 152 50 202 159 47 206 128 40 168 Management (75.25%) (24.75%) (14.7%) (77.18%) (22.82%) (15.97%) (76.19%) (23.81%) (12.55%) Basic Management 537 180 717 549 184 733 531 178 709 (74.90%) (25.10%) (52.1%) (74.90%) (25.10%) (56.82%) (74.89%) (25.11%) (52.95%) Staff 256 106 362 190 69 259 281 93 374 (70.72%) (29.28%) (26.3%) (73.36%) (26.64%) (20.08%) (75.13%) (24.87%) (27.93%) Total 1,024 351 1,375 974 316 1,290 1,012 327 1,339 (74.47%) (25.53%) (75.50%) (24.50%) (75.57%) (24.42%) n ee, optny ad efrac assessment, performance based and is competency, PGN level, in on system remuneration The equal gender. giving by applied differentiating without employee is PGN every to treatment equality of principle The to MaleEmployees Compared Salary andRemunerationatioofFemale Staff Basic Management Staff Middle Management Total Top Management Management Basic Management Top Doctorate Masters Management Middle Total High School/Equivalent Diploma Bachelors Position EMPLO REMUNEA DIVERSITY OFGO Position YEE DA (13.09%) (16.00%) (2.91%) (0.00%) (0.00%) <30th TION RA 180 220 40 0 0 T Level ofEducation A B 30-50th (43.56%) (69.89%) (12.22%) (8.51%) (5.60%) Y EDUCA VERNANC BODIESANDEMPLO TIO 117 599 961 168 77 2019 (14.11%) >50th (5.67%) (4.73%) (2.47%) (1.24%) [GRI 405-2] TION LEVEL 194 78 65 34 17 Male 1.04 1.00 1.00 1.01 Total 1,375 2019 717 362 202 94 (11.20%) (0.00%) (0.00%) <30th (6.11%) (5.09%) Female 154 84 70 1.00 1.12 1.03 1.00 0 0 30-50th (41.82%) (67.71%) (12.80%) (8.44%) (4.65%) Sustainability Report2019PTPerusahaanGasNegaraTbk YEES [GRI405-1] in PGN. The table below shows the average ratio of remuneration as thoseofmaleemployees. same the treated are employees female of dependents the where way, same the in treated is insurance Health positions. all for women and men disparity for no remuneration in is There gender. by determined not and 575 116 931 176 64 2018 (14.91%) 197 (14.33%) 161 (11.71%) 377 (27.42%) 639 (46.47%) Male >50th (5.38%) (5.31%) (2.18%) (2.04%) 1.08 1.00 1.00 1.02 2019 205 1 (0.07%) 74 73 30 28 2018 1,375 Total 1,290 Female 733 259 206 92 1.00 1.13 1.02 1.00 (10.91%) (0.00%) (0.00%) <30th (3.42%) (7.49%) 169 (13.10%) 175 (13.57%) 368 (28.53%) 577 (44.73%) 103 150 2018 47 1 (0.08%) 0 0 30-50th (43.05%) (14.25%) (71.27%) 1,290 (9.89%) (4.07%) Male 592 136 196 980 56 1.15 1.00 1.00 1.00 2017 2017 (15.20%) >50th (5.09%) (5.45%) (2.33%) (2.33%) 188 (14.04%) 398 (29.72%) 621 (46.38%) 131 (9.78%) 209 2017 70 75 32 32 Female 1 (0.07%) 1,339 Total 1.00 1.15 1.06 1.02 1,339 709 374 168 88 97

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FULFILLING HUMAN RIGHTS OF 2. Human Rights Socialization Among Employees EMPLOYEES and Security Officers [GRI 410-1] Being a part of a global citizen, PGN aims to ensure It has been the Company’s commitment that every that the Company considers every basic right of its PGN employee is capable of respecting the rights of employees. Human Rights are basic rights and freedoms others and of treating everyone fairly and respectfully. that are possessed by every human being in this world. For this reason, the Company trains not only security These rights are based on the principles of equality, personnel, but also the employees. For the security justice and respect. On July 16, 2019, PGN received an officers, the Company conducts training under the Award as a Public Company in Indonesia with the Best guidance of the police. In 2019, all security officers, Human Rights Honor Performance from the Foundation both from PGN and outsourcing providers, have been For International Human Rights Reporting Standard given information and training on human rights. (FIHRRST), an award given for implementation of respect for human rights in the company’s business activities, 3. Freedom To Join Union especially worker’s rights, workers of the company’s The Workers Union of PT Perusahaan Gas Negara business partners, customers and other stakeholders. (Persero) Tbk., abbreviated as SP – PGN, was PGN upholds the application of human rights in the officially registered at the West Jakarta Manpower company, in the form of: Agency with Registration Number: 387/II/P/IX/2009, on September 19, 2009. The PGN Workers Union supports three principles of work partnership, 1. no Underage Employees or Forced Employment PGN pays attention to the minimum age limit for namely: partner in profit, partner in responsibility, employees to ensure that there are no underage and partner in production. employees in the Company. In addition, the Company applies a policy prohibiting forced labour, i.e. all work or services that are forced on any one with threat of punishment due to the person being unwilling to do the work. employees to meet their potential for the safeguarding the for potential their meet to employees human of resources and to providing opportunities for PGN quality the improving to committed is PGN EMPL DEVL employeeSocial SecuritySystem 5. 4. 2. Staff Basic Management Middle Management Top Management Female Male register itsemployees. to obliged is welfare PGN entity, business a social As everyone. for and protection provide to aim that the in programs employees Health and Employment BPJS government all included has Company The the 2019-2021period. new a has Collective Labour Agreement, valid for PGN 2 years, namely Consequently, Unions. the Workers and Management the namely parties, both by 2019 9, December on Agreement Labour Collective the of signing the by marked of was negotiations outcome the The negotiations. Collective Agreement the Labour completed Representatives Workers PGN Union and Representatives Management PGN of consisting 2019-2021 period the for Team Negotiation Agreement Labor Collective the 2019 In Collective LaborAgreement the tablebelow: results oftheperformance assessment, in 2019, 220 workers were promotedtonewpositionlevels, with detailsin the with accordance In experience. work and assessment, competency Company, the of needs the to tailored are for promotion of program a designed has PGN reason, employees who meet the this criteria, after first conducting an objective For assessment. Succession and promotion planning growth. Company with line in are that careers have to and themselves develop to continue to potential the have who employees for opportunities provides PGN Planning and Promotion Succession Caree Development Reviews[GRI404-3] Percent O OPMENT FPGN’S YEES a ge ofEmplo yees Re ceiving Re gular Peformance and Sustainability Report2019PTPerusahaanGasNegaraTbk Assessment performance 1. PGN’s long-termbusinessdevelopment. to contributes and resources human PGN’s of quality the management positions demonstrates an improvement in top in employees 19 or 25% and positions management middle in employees 15 or 8% of increase An Affiliates. and Subsidiaries at and PGN at positions management top and management middle taken have career requirements, fulfilling as well as scholarship, postgraduate a participated in development programs, and have received have who employees, level management basic 2019, In of PGNemployeesthroughout2018and2019. supporting factor a in increasing the capacity and credibility been has programs development management and executive through advancement employee and systematic focused, Planned, Company. the of progress and conducted onceayear. control is assessment Performance and performance. monitor Company to as well as employees of development career for planning strategic in used is assessment evaluations This levels. all at performance employee every for annual conducts PGN performance, good of culture a create to effort an In 2019 2019 1,024 (74%) 362 (26.3%) 717 (52.1%) 202 (14.7%) 351 (26%) 94 (6.8%) 2018 2018 259 (20.1%) 733 (56.8%) 206 (16.0%) 316 (24%) 974 (76%) 92 (7.1%) 99

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Job promotion percentage

Position Level Male Female Total Top Management 18 (94.74%) 1 (5.26%) 19 Middle Management 10 (76.92%) 3 (23.08%) 13 Basic Management 135 (81.82%) 30 (18.18%) 165 Staff 9 (39.13%) 14 (60.87%) 23 Total 172 (78.18%) 48 (21.82%) 220

3. Programs for Upgrading Employee Skills and where 7 employees continued their education to Transition Assistance Programs [GRI 404-2] Bachelor degree on a regular self-managed basis, In accordance with the stages of the Company’s Long- and 11 employees continued their education to Term Plan and the SOE’s Gas & Oil Holding initiative, Bachelor degree as self-managed talent SOE’s. PGN continues to improve employee development This scholarship program aims to add global programs, comprehensively and consistently, along insight and expand networks to support the with in-house education and training programs, as well achievement of the Company’s vision. as public training, certification, knowledge sharing, and courses. These programs are designed in accordance B. STAR Program (Talent Development with the Company’s business development so that Program) each PGN employee shows competence and is able to With well-integrated and comprehensive planning, work professionally according to his field and position. PGN designed the STAR program to prepare the Company’s team of future leaders. The talent PGN allocates an average of six days of training management program consists of three programs, to each employee in order to support employee namely the Executive Development Program development to fill the competency gap of employees. (EDP), Management Development Program (MDP) PGN also provides online management learning and First Line Development Program (FLDP). system facilities to improve services in implementing education, training and knowledge sharing programs. PGN provides various training programs as an expansive step by the Company in developing A. Domestic Undergraduate and Postgraduate employees’ competencies and skills. Not only are Scholarship and Self-Management Program the training programs useful for the progress During 2019, PGN provided full tuition scholarships of the Company, but are also beneficial to the for 28 employees who were the 26 best employees should they resign before retirement participants of the 2019 MDP program and for or stop working at PGN. The programs include: the 2 best participants of the 2018 EDP program 1. Executive Development Program (EDP) to attend “Masters of Management” education The Executive Development Program program at leading business education institutions (EDP) is a leadership program for Middle and universities in Indonesia. PGN also provides Management level employees that focuses opportunities for all PGN Group employees on preparing future PGN leaders, enhancing who show initiative in improving competence competencies in the form of interpersonal by continuing education to undergraduate and skills, leadership abilities and business graduate levels in the form of self-managed abilities. The development method is carried education programs. out through a structured integrated learning process with three modules namely Navigating In 2019, PGN assisted 18 employees to continue Uncertainty, Managing Stakeholders and their education to masters level in Indonesia, 3. 2. optne o h nx cre pt with path career next the to managerial competence provide to their and toimprove skills leadership employees level staff for PGN has also designed a development program (FLDP) Program Development Leadership Line First participants business educationinstitutionsinIndonesia. leading the of one in program management 11 self- talent in assistance and education received program Management (MM) in Masters Postgraduate join the to scholarships receiving currently are program the from participants best the of 40 the requirements to join the MDP program and Management. In 2019, 87 workers who fulfilled Managing Business, and Leading with Strategic Innovation, and Making Decision Leadership, Business of four Fundamentals into namely: modules, organized is program The CEOs. foreign and domestic related from sessions sharing from leadership and (SME) mentoring Experts Matter Subject and coaching assignments, project camps, leader training, English online programs, in-class mixed with (MDP) Program Development leadership Management sustainable integrated an developed has PGN for succession, preparing In Management DevelopmentProgram ( the Global BusinessSchool. at program employees courses short a in 3 enrolled and institutions education business leading the of one in (MM) program postgraduate Management of Master the with program, namely 2 employees were rewarded retention a received 2018 in participants EDP and completed the EDP program, 5 of the best 2019, out of 21 employees who participated in In participants. EDP by undertaken projects in program mentor a as Management This Top PGN’s involves business. Company’s the of development the of improvement for useful is that assignment project a get participants Creating the Future. At the end of the program, Mdp) Sustainability Report2019PTPerusahaanGasNegaraTbk C. forums. international and regional domestic, a at speaker being or training, attending sharing after articles, knowledge writing by knowledge sharing in participate who employees for points features reward Program Point Credit Knowledge The Guide Book. Knowledge PGN the into PGN within knowledge developing and maintaining of capturing, with of aim the documents of form activity the in individual each the in inherent still is that is knowledge documenting Harvesting Knowledge the in position development ofitsindustrialbusiness. Company’s the of knowledge so comprehensive more a have employees PGN that business Company’s various the to into related insight matters add can employees PGN PGN involving program, by this With persons. resource out as workers carried is knowledge that of sharing form a is program Talk Gas The processes withinPGN. functions of operating procedures and work the of understanding and improve knowledge to employee order in quiz knowledge a of form the in program learning a is program i-Know The Innovation Award. and e-Library, Point, Credit Knowledge KMOnline, Harvesting, Knowledge Talk, Gas program, i-Know the developed has PGN gained, knowledge disseminate the and expound, a create, identify, With management. series of activities designed and developedto undertaken knowledge is through management capital Human Knowledge Management those whomeetSTARcriteria. are program this in part take who Participants (FLDP). Program Development Line First the 101

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The KM Online (KMOn) program is a PGN internal programs to take on business opportunities that knowledge portal that includes important can improve the quality of service and performance knowledge for PGN employees. of the Company. During 2019, PGN employees participated in 34 technical certification programs, E-Library is an online library that provides an participated in by 107 employees and 13 non- extensive collection of books and literature to technical certification programs participated in support employees learning’s through library by 53 employees. Thus, more and more PGN collections. The application of knowledge employees are certified as professionals in their management, directly or indirectly, has a positive respective fields. influence on the Company by building a culture of learning so as to make it easier for every In 2019 a new program was conducted to support employee to take advantage of the existing commercial performance, namely “Achieving The knowledge in the company environment. In this Challenging Sales Target - Changing Your Mindset & way, employees are able to increase competence, Way of Working”. This in-house training program is creativity and innovation. structured with a comprehensive module for PGN frontliners (Sales Area, Customer Management and The Innovation Award Program is one of the Sales Administration) which consists of 3 learning recognition programs for employees who have modules. In the last module, participants presented displayed extraordinary effort in the way they work their performance achievements in 2019 and that enhances the Company’s capabilities through the planned 2020 target achievement based creative ideas and innovations. The aim of the on material obtained during Module 1 (Market Innovation Award Program is to increase creativity Analysis), Module 2 (Managing Customers), Module and innovative thinking, create an environment 3 (final presentation - Performance Review of 2019 for employees to explore business opportunities and Tactic Plan for 2020). for the sustainability of the Company, and to increase their involvement through recognition of E. learning Management System their innovations. PGN has developed an online application, namely Learning Management System. With this system, D. in-House and Public Training employees are able to access training information, PGN has a technical and managerial competency such as annual corporate education and training development program, conducted through program plans, syllabuses and training modules, in-house and public training and certification and learning schedules, so that they can swiftly programs. With an average allocation of six adjust training plans.. man-days, PGN has conducted 27 managerial competency training programs attended by 526 F. english Program participants, 1 leadership management training In terms of enhancing the ability of employees to program in a Business School in Australia attended communicate in English, the Company provides by 3 participants, and 351 technical competency independent English language training facilities training programs, attended by 3,575 participants. for them. In this program, the employees can choose from several predetermined providers With the need to increase the expertise and with training schedules that are tailored to the professionalism of employees in the core and schedules of the employees. supporting fields, PGN has escalated certification [G RI 404-2] retirementPlanningrogram 1. RETIMENT WLFARE PROGRAM the Company. language in program internship English Ministry training, supporting and training, systems, and management education e-learning management, knowledge programs, (STAR) talent programs, scholarship graduate at a total cost of Rp53 billion including: undergraduate employee and of variety a development and management programs organised and internships PGN 2019, During Cost Incurred 4. Staff Basic Management Middle Management Top Management Female Male f g. h porms ups i t hl retiring help to is purpose program’s The age. of years 56 is PGN in age retirement The years. three within retire will training who employees those for hold programs we Accordingly, PGN. to themselves dedicated have who employees appreciate highly We the EAPcounselingandseminarheldbyPGN. attended have participants 334 of total A need. they motivation, gain fields the to in knowledge practical and encouragement employees for program helpful this very 2013, is in Beginning Assistance (EAP). Employee Program the or counselors external with seminars short and counseling of form the in employees for programs assistance provides PGN and Seminar Counseling per emplo Avera ge hoursoftrainperyea yee [GRI404-1] 24 hours 70 hours 60 hours 44 hours 53 hours 53 hours 2019 2019 Sustainability Report2019PTPerusahaanGasNegaraTbk 3. retirementFundandInsurancePrograms 2. • • • • them afterretirement,especiallythefollowing: help will that matters various understand employees throughout Indonesia. services health get can they the card, Through treatment medical spouses. their and 1,498 employees for former insurance care health provides Program, Health SP- Age Old the with through management, PGN collaboration PGN, In contributions. and employee Company both from obtained are program this for funds Health needs. care health their meet them PGN’s concern for retired workers is reflected by helping Old AgeHealth Program • • • • • fund and investment portfolio. In addition, we provide: retirement desired their choose to able is employee every plan, this Under plan. contribution defined a of way by 2009 since fund pension a prepared have we employees, retired of welfare the assure to order In [GRI 201-3] Motivation and encouragement as mindset shiftbeforeretirement well as preparation behavioural and Mental Business opportunities after retirement Financial management after retirement Death benefitandfuneralfund Occupational accidentprotection Personal accidentinsurance the for allowance employees andtheirdependents out-patient and In-patient and BPJSKesehatan Social Security Program from BPJS Ketenagakerjaan 103

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MAINTAINING OCCUPATIONAL HEALTH AND SAFETY

An earnest appreciation over the achievement of having zero lost time injury has become a real indication of PGN’s concern towards Occupational Safety and Health. A safe work environment boosts enthusiasm and productivity. Sustainability Report2019PTPerusahaanGasNegaraTbk 105

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Along with the Company’s Vision, To be World Leading National Gas Company for a Sustainable Future and National Energy Sovereignty, the Company has a special focus on implementing Occupational Health and Safety throughout the Company’s business processes. The Company has implemented the Occupational Health and Safety, Security, Environmental and Energy Management System (SMK3P2L-E) in order to diminish or eliminate all possibilities that can cause work accidents, work-related diseases, security disturbances to assets, and environmental pollution. hud cuainl elh n sft b well- be safety and maintained, theresultswouldbeasfollows: health occupational Should decreased. or evaded be can diseases occupational and accidents work of risk the that so units work PGN all to applied is policy management This standards. optimal (OHS) with systems safety and actualising health and occupational policies developing to PGN committed distribution, is and processing gas the natural reducing of and risk handling in PGN to follow-up a As avoided orminimised. be can diseases occupational and accidents work of risk the and target, the achieving in concern shared a has unit each thus, management; the of commitment joint a as made is target HSSE The achieve. to Company the forobjectives and guidelines as targets and policies sets To ensure successful implementation of SMK3P2L-E, PGN OCCUPATIONAL HEALTH AND SAFETY POLICYANDROGRAM Sustainability Report2019PTPerusahaanGasNegaraTbk • • • to thefollowingapplicableregulations: adhere we safety, and health occupational to relation In • • • • • • in CommerceandOffices International Hygiene on 120 of No. Convention Organisation Labour Agreement on 1969 of 3 No. Law Law No.13of 2003 onManpower Law No.1of 1970on Occupational Safety PGN’s postiveimageismaintained. Reduced recoverycost Reduced compensationcost foraccidentandillness Effectiveness andefficiency inoperationalcosts activity Increased comfort and self-confidence in professional Increased welfare ofemployees andtheirfamilies 107

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• Law No. 22 of 2001 on Petroleum and Natural Gas CHAPTER V. WORKING DAYS, DAY OFF, and • Law No. 40 of 2004 on National Social Security System WORKING OVERTIME • Law No. 36 of 2009 on Health Article 26. Regular Working Days • Law No. 24 of 2011 on Social Security Provider Body Article 27. Rotating Working Days • Government Regulation No. 50 of 2012 on Article 30. Working Overtime Implementation of Occupational Health and Safety Article 31. Working Overtime Facilities Management System • ISO 45001: 2018 is an international standard for the CHAPTER IX. HEALTHCARE INSURANCE implementation of occupational health and safety Article 46. Outpatient and Treatment management systems Article 47. Inpatient • Their derivatives. Article 50. Medic Rehabilitation Article 51. Periodic Medical Checks PGN always maintains stability and consistency in the Article 52. Special Medical Checks implementation of OHS management in all work and Article 53. Refuse Medical Checks/ Treatment operational activities by practicing the principles of Plan, Do, Check, and Action. PGN cares about the safety and CHAPTER X. OCCUPATIONAL HEALTH AND SAFETY health of every employee since only with safe and healthy Article 58. General employees can PGN achieve its goals. Article 59. Occupational Safety Article 60. Employees Social Security System Body OHS in Collective Labour Article 61. Work Accident Agreement Article 62. Grief Assistance A vital linkage between PGN management and employees, the Collective Labour Agreement is an agreement in which CHAPTER XI. INSURANCE the rights and obligations of management and employee Article 63 Work Accident Insurance are explained for the sake of maintaining harmonious industrial relations within the Company. Articles related CHAPTER XIII. DISCIPLINE AND SANCTIONS OF to OHS are seen as having a vital role so their presence DISCIPLINE VIOLATIONS is needed. The rules regarding OHS are specifically Article 69. Types of Actions and Sanctions of Violations contained in the Collective Labour Agreement, which is drafted jointly between the employee’s representatives CHAPTER XIV. TEMPORARY EXEMPATION FROM THE who are members of the PGN Workers Union (SP-PGN) DUTY and PGN management representatives. Around 80,4% Article 70. General of PGN’S employee became a member of PGN Workers Article 71. Implementation of Temporary Exemption from Union. [GRI 403-1] the Duty

Of the 96 articles written in the Collective Labour Besides being included in the CLA, OHS aspects are also agreement, there are 19 articles that cover the topics applied as part of the Key Performance Indicators (KPI), of health and safety, or around 20%. The topics are as which are part of the performance evaluation of each follows: [GRI 403-4] employee. It is expected that through this evaluation, OHS practices can be entrenched in every employee.

OHS in PGN Management System [GRI 403-1] With reference to Law No. 1 of 1970 concerning Occupational Safety and Law No. 13 of 2003 concerning Manpower, Article 86 paragraph 2, which confirms the Company’s obligation to carry out occupational health and safety efforts for its employee, PGN builds an OHS unit, to corporate from starting multilevel in employees and management representing that committee OHS formed PGN performance, OHS improving of discussion the in region PGN the throughout employees of 100% involving in addition, In employees. PGN all of 1% or people, 13 comprises Division HSSE The Director. President the to the under Division (HSSE is Division), which structurally reports directly program Environment and Security Safety, OHS Health, of supervision the of Management to grassrootsemployees. management system structured from senior management [GRI 403-1] and Technology Infrastructure Exe PRESIDENT DIRE CORPORATE Director of SECRETARY cutive CentralS namely:

Executiv Office CT Director of Commerce ORA DIVISON HEADHSSE afety Committee (E SECRETARY TE CENTRALSAFETY C CSC Management Stakeholder Strategic Director Capitals and PRESIDENT PRESIDENT DIRECTOR DIRECTOR General Affairs of Human Sustainability Report2019PTPerusahaanGasNegaraTbk on-going basis. and policies an on conducted be to strategic continue OHS to related activities Various people. PGN’s of each in developed culture OHS having in success PGN’s for significant is activities OHS of javelin a as CSC of role The • • • • Internal CSC) Audit Projects aswell asthesubsidiaries. Business units directorate level the at (CSC) Committee Safety Central the Board ofDirectorslevel at (ECSC) Committee Safety Central Executive OMMITTEE development and business Director of Strategy Management and GCG Risk Health, Safety Enviroment Security and Director of Finance 109

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STRATEGY AND BUSINESS DEVELOPMENT DIRECTORATE CSC

Director of strategy and business development

SECRETARY CSC

Strategic Business BUSINESS UNIT Planning and Subsidiary Development LNG Portfolio

INFRASTRUCTURE AND TECHNOLOGY DIRECTORATE CSC

Director of Infrastructure and Technology

SECRETARY CSC

CENTER OF PROJECT BUSINESS UNIT UNIT LAYANAN TECHNICAL MANAGEMENT INFRASTRUCTURE JARINGAN GAS SUBSIDIARY EXCELLENCE OFFICE RUMAH TANGGA HUMAN Resourc MANAGEENT C HUMAN ResourceANDGENERALAFFA IRS DE OMMERCE DIR BUSINESS UNIT GAS PRODUCT COMMUNICATION INFORMATION & TECHNOLOGY CT ORA C TE CS SECRETARY SECRETARY GAS UPPLY CSC CSC MANAGEENT & FACILITY LOGISTIC Director ofHuman General Affairs Resourc and Director of Commerce Sustainability Report2019PTPerusahaanGasNegaraTbk CORPORATE SUPPORT & SERVICE MARKETING CT ORA TE CS RESPONIBILITY CORPORATE SOCIAL SUBIDIARY SUBIDIARY 111

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FINANCE DIRECTORATE CSC

Director of Finance

SECRETARY CSC

Financial Treasury Accounting Corporate Revenue Control Finance Assurance and Group Management

OCCUPATIONAL SAFETY ROAD MAP IMPLEMENTATION Strategically, PGN has designed a road map for OHS as a guide to bring PGN to achieve its OHS target. The “Safety Excellence Program” road map was designed in 2009 with the aim to bring every PGN employee to understand OHS issues and realize the importance of risk mitigation. Audit results show that the Safety Excellence Program has brought excellent results, namely the reduction in workplace incidents and accidents, as well as the development of a culture of OHS awareness as measured by the transformation of PGN employees from “reactive” to “generative” as illustrated in the chart below:

PGN OCCUPATIONAL SAFETY ROAD MAP

Continual Improvement Work A ccident R ate

Pathological Reactive Calculative Proactive Generative • The value of the • The value of the OHS • The value of the OHS • The value of the • The value of the OHS OHS cultural per- cultural performance cultural performance OHS cultural cultural performance formance survey is survey is 1.6-2.5 survey is 2.5-3.5 performance survey is 4.5-5-0 0-1.5 • Safety does matter • We have had a survey is 3.6-4.5 • OHS has been a • Being ignorant • We conduct a system to control the - We keep ourselves mindset/a part of our towards the rules number of actions hazard focused on every business undertaking • The important thing every time an issue of OHS is no accidents accident appears

Before 2009 2013 2019 2022 2. 1. In 2019,weconductedtheOHSprogramsasfollows: OHS PROGRAM health. ThefollowingisthePGNHealthRoadMap: In addition, the Work Reference Document compiled by PGN serves as the legal basis of the rules for managing employees’ tailored tothelevelofriskemployeesintheirrespectivefields. good performance for the Company. PGN organises various programs to improve employee health. These programs are provide can employees healthy only for Company, the to concern particular of is health employee that recognizes PGN OCCUPATIONAL HEALTH RO otnosy I M, rpr o te SMK3P2L-E the on performance was submitted and discussion regarding report a MR, In continuously. SMK3P2L-E of system management the improving of process the in cycle peak the is which SMK3P2L-E, of PGN continuously holds the Management Review (MR) Management Review(M and promotetheimplementationofOHSinPGN. field. This feedback is very useful in efforts to improve feedback related to the implementation of OHS in the obtain to interaction direct conducting to addition in example, an provides also management visits, these In possible. as well as program OHS the out carry to will which visits encourage and motivate employees in each work unit regular conducts Management Management Visit Rate of Occupational Disease • • • PGN HEAL illness occupational disease/general of occupationalaccident/ Only orientedtotreatment function Executed bynursesorOHS Health System Absence ofOccupational Starting Level 2013 TH ROAD MAP ) • • • • • programs Creation ofpromotive Accomplished worktargets is arisen Management’s commitment nurses health-certified doctorsand Executed byoccupational regulations Compliant togovernmental Basic Service 2015 AD MAPIMPLEMNTATION Continuous Improvement • • • • • Standard Service Sustainability Report2019PTPerusahaanGasNegaraTbk International rehabilitation program preventive programaswell Creation ofpromotiveand Accomplished worktargets arisen Management’s commitmentis certified doctorsandnurses Executed byoccupationalhealth- regulations Compliant togovernmental • • • • • • • • OHS various issues asbelow: discuss the MR 2019, improve In continuously system. management to order in carried out was implementation SMK3P2L-E in issues 2019 Evaluation of resources and Consultation Participation Communication, of the Evaluation Incident 2019 the from Learned Lessons of Submission corrective andpreventiveactions investigations, incident of status the Monitoring Evaluation of HSSE Performance Security, Evaluation of HSSE Targets Safety, the of and Environmental andEnergyManagementSystem implementation Health the Occupational of Evaluation The statusof actionsfromMR 2018 Comprehensive Service • • • healthcare standards Follows the highest occupational with theCompany’sbusiness healthcare thatisintegrated Provides comprehensive team Executed bymultidisciplinary 2020 113

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• Evaluation of changes that occured (Management 5. OHS Campaign of Change) PGN considers that it is imperative that OHS must be • Evaluation of recommendations for continuous routinely promoted to increase employees awareness improvement and commitment to OHS, so that OHS issues are • Evaluation of laws and regulations always main concerns in carrying out each employees activities, so that work can be done safely and 3. HSSE Award for Employees and Work Partners employees remain in a healthy and safe condition until 2019 As a Reference of HSSE Implementation they reach home every day. The variously designed Evaluation campaigns carried out consisted ergonomic video The HSEE Award is a fun event but still educates and OHS education, installation of posters, banners and inspires all PGN employees to apply HSSE in and desktop wallpapers of computer equipment as each activity of their respective work units. This well as routine OHS education programs conducted competition is held regularly every year, and in 2019 at each company office location each semester. the HSSE Award was held 2 (two) times during the National Occupational Health and Safety Month 6. HSSE Online System and Indicator Performance (January 12 - February 12 2019) and during the 54th Center PGN Anniversary. The competition was responded Along with the change of the industrial revolution with high enthusiasm by the employees including 4.0, PGN is challenged to be able to follow the the company’s business partners. This competition development of information technology, including also serves as a benchmark for the knowledge and its application in HSSE. It is required that HSSE application of HSSE for PGN employees and work information is presented in a precise, fast, accurate partners, as well as a form of appreciation for their and easily accessible manner to all stakeholders. dedication in implementing HSSE in their respective Since 2016, PGN has continued to develop web-based work environments. applications under the name of HSSE Online System and Indicator Performance Centre (HOLISTIC) which 4. Certification of SMK3 and Upgrading of OHSAS can be used by PGN and PGN Group employees. 18001:2007 to ISO 45001:2018 The Holistic application is believed to increase the PGN considers it imperative to comply with effectiveness of getting accurate data/information regulations and laws and the implementation of in a fast time, making it easier for management to internationally recognized standards in the field compile strategic and tactical steps in order to achieve of OHS management. Efforts were carried out in operational excellence. addition to increasing the credibility of PGN, also to ensure the safety and health of every PGN employee. 7. OHS Training Therefore, PGN certifies the required fields, such In accordance with the Occupational Health and Safety, as SMK3 certification referring to Government Security, Environmental and Energy Management Regulation No. 50 of 2012 and OHSAS 18001: 2007, System Policy, in order to create a healthy, safe, and then upgraded to ISO 45001: 2018 in 2019. environmentally friendly work environment, PGN is committed to providing guidance to employees in order to increase employee awareness and competence, so that employees can take proactive and preventive actions to prevent occupational diseases and work accidents. The following table is the OHS training given in 2019. and effectiveness of OHS implementation. Such implementation. efficiency OHS the of measurements provide feedback on how evaluating the OHSMS has effectiveness in and useful are resulting parameters the as management, OHS Company of part important an is performance OHS of measurement The OHS PERFORMANCE2019 8. No 10 11 12 14 13 1 2 3 4 5 6 7 8 9 f h Mnsr o Eeg ad iea Resources Mineral every month. and Energy of Ministry the of the Directorate General of Oil and Gas (Dirjen Migas) the Ministry of Manpower every three months and to to Reports Safety and Health routine submits PGN Health andSafetyReporting OHS TRAING ISRS ModernSafetyManagementBatch1 ISRS ModernSafetyManagementBatch2 (ISRS) AssessorWorkshop International SustainabilityRatingSystem Infrastructure andTechnologyDirectorate) ISRS LeadershipforSeniorManagers(CSC Commerce Directorate) ISRS LeadershipforSeniorManagers(CSC President Directorate) ISRS LeadershipforSeniorManagers(CSC Directorate) (CSC StrategyandBusinessDevelopment ISRS LeadershipforSeniorManagers Systematic CauseAnalysisTechnique(SCAT) System (ISO14001:2015)Batch1 45001:2018) andEnvironmentManagement Awareness OHSManagementSystem(ISO Response Plant Manager/IncidentCommander-Initial System (ISO14001:2015)Batch2 45001:2018) andEnvironmentManagement Awareness OHSManagementSystem(ISO Management System(ISO14001:2015) (ISO 45001:2018)andEnvironment Internal AuditorOHSManagementSystem Emergency Tropical BasicOffshoreSafetyInduction& Basic SeaSurvival Name ofTraining 2019 18 Feb2019to22 2019 11 Mar2019to15 2019 22 Jul2019to26 7 August2019 7 August2019 7 August2019 7 August2019 Sept 2019 16 Sept2019to18 2019 25 Mar2019to26 2019 25 Feb2019to27 2019 04 Apr2019to05 2019 10 Apr2019to12 26 August2019 2019 16 Jul2019to18 Sustainability Report2019PTPerusahaanGasNegaraTbk Period follows. as are regulations OHS government applicable following reports incident to OHS performance. OHS steps PGN’s improve determine as well as assess, and monitor to aims Metric Safety the basis, monthly a On subsidiaries. indicator for the Head Office, business units, projects and The Safety Metric is an OHS implementation performance Safety Metric improvement. continuous PGN’s OHSperformancereportingisdetailedasfollows: for basis a delivering also further motivate field employees in OHS implementation, been implemented, areas that require repair, and how to [GRI 403-2] Participants Number of 24 24 22 28 12 14 25 17 28 21 6 4 1 3 Number of Days 5 5 5 1 1 1 1 3 3 2 2 1 3 3 Mandays 120 120 110 115 28 12 14 12 75 34 56 63 6 1 9

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Safe Working Hours

2019 2018 2017 2016 2015 Safe Working Hours 104,672,458 94,407,387 83,009,070 89,263,642 71,501,132

Types of Work INCIDENTS by Gender

Nearmiss FAC MTC RWDC LWDC Fatality Total Male 49 14 1 0 0 0 64 Female 3 0 0 0 0 0 3 Total 52 14 1 0 0 0 67

Types of Work INCIDENTS by Region

Nearmiss FAC MTC RWDC LWDC Fatality Total Head Office 7 2 0 0 0 0 9 GDM 1 20 1 1 0 0 0 22 GDM 2 3 1 0 0 0 0 4 GDM 3 4 2 0 0 0 0 6 GTM 14 2 0 0 0 0 16 PMO 4 6 0 0 0 0 10 UL Jargas 0 0 0 0 0 0 0 Total 52 14 1 0 0 0 67

Description: • Nearmiss is an event that could have caused, but did not cause, injury and/or damage (loss) to assets, environment or third parties. • First Aid Case (FAC) is an injury that does not require further treatment (limited to first aid) and does not result in Lost Work Days or days with restricted work. • Medical Treatment Case (MTC) is an injury that requires further treatment under the supervision of a medical person but does not cause a Lost Work Day or a day with restricted work. • Restricted Work Day Case (RWDC) is an Occupational Accident which results in the employee being able to work the day after the incident, but can not perform all routine work tasks or obligations, effectively. • Lost Work Day Case (LWDC) is a Work Accident that results in employees temporarily being unable to work again on the next day or shift according to the work schedule. • Fatality is a work accident that results in death without taking into account the deadline between the occurrence of an accident and the death of the victim.

Injury Rate (IR) by Gender

2019 2018 2017 Male 0.10 0 0.62 Female 0 0 0.09 Total 0.10 0 0.71

TRIR (Total Recordable Injury Rate) by Gender = Total Recordable Injury Male/Female/ Total Safe Working Hours x 1,000,000

TRIR (TotalRecordableInjuryRate)Overall=TotalInjury/TotalSafeWorkHoursx1,000,000 TRIR (Total Recordable Injury Rate) by Region = Region Recordable Injury/Region Safe Work Hours x 1,000,000 Total UL Jargas PMO GTM GDM 3 Total GDM 2 Female GDM 1 Total TRIR Overall UL Jargas PMO GTM GDM 3 GDM 2 GDM 1 Head Office Male Head Office Female Male Occupa L L Injury Ra ost D ost D a a tional DiseaseRa y Ra y Ra te (IR)b te (LDR)b te (LDR)b y Re y Re y Gender gion te (ODR)b gion y Gender Sustainability Report2019PTPerusahaanGasNegaraTbk 2019 2019 2019 2019 0.10 0.00 0.00 0.00 0.00 0.00 0.33 0.00 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2018 2018 2018 2018 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2017 2017 2017 2017 0.35 0.35 0.35 0.35 0.71 0.00 1.56 0.81 1.08 1.43 0.00 0.00 117 0 0 0 0 0 0 0 0 0 0

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Occupational Disease Rate (ODR) by Region

2019 2018 2017 Head Office 0 0 0 GDM 1 0 0 0 GDM 2 0 0 0 GDM 3 0 0 0 GTM 0 0 0 PMO 0 0 0 UL Jargas 0 - - Total 0 0 0

Total Sickness Absence Frequency (TSAF) by Region

2019 2018 2017 Head Office 0.31 0.34 0.42 GDM 1 0.09 0.13 0.11 GDM 2 0.06 0.09 0.09 GDM 3 0.10 0.07 0.10 GTM 0.16 0.11 0.12 PMO 0.04 0.02 0.04 UL Jargas 0 - - TSAF Overall 0.14 0.14 0.17

Work-related Fatalities by Gender

2019 2018 2017 Male 0 0 4 Female 0 0 0 Total 0 0 4

Work-related Fatalities by Region

2019 2018 2017 Head Office 0 0 0 GDM 1 0 0 0 GDM 2 0 0 0 GDM 3 0 0 0 GTM 0 0 0 PMO 0 0 4 UL Jargas 0 - - Total 0 0 4 Sustainability Report2019PTPerusahaanGasNegaraTbk 119

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Employees with Occupational Accidents or Diseases • Physics: Control of noise hazards in the metering Risks [GRI 403-3] areas of stations and compressors, beginning with PGN is aware that every business process has the comprehensive noise monitoring, which is followed risk of occupational accidents and/or occupational by the installation of noise silencer, safety signs and diseases. Therefore, PGN monitors and calculates work the use of Personal Protective Equipment (PPE) in the risks through a Health Risk Assessment and Hazard form of ear plugs or ear muffs. Identification and Risk Assessment of all aspects of work. • Chemical: Risks of Nitrogen gas poisoning can be Some of the risks identified are as follows: controlled by monitoring work through a Work Permit, • Ergonomics: Risk of work accidents or illness due to where work can only be done if it has obtained a incorrect body position in doing work such as: working permit in advance. Control is also carried out through

at the computer, lifting equipment, opening the valve routine gas testing with a gas detector during the N2 box cover and so on purging work. • Physics: Risk of work accidents or occupational diseases due to physical causes include the potential In undertaking a monitoring and management program for hearing loss for employees who work in the for employees health, PGN prioritizes preventive and metering station or compressor area promotive health services, but does not ignore curative • Chemical: The risk of work accidents or occupational and rehabilitative services. Promotive activities are diseases that can arise due to chemical aspects carried out routinely by conducting health education

include Nitrogen gas poisoning during N2 purging and workplace inspections by health experts every work. semester. Health education is also carried out through health bulletins every month. Other services, in the form Based on the risks identified, PGN carries out hazard of monitoring the health of employees through medical control by referring to the hazard control hierarchy, check-up starting from pre-employee, periodically once a namely elimination, substitution, engineering, year, special health checks and before retirement. PGN administrative control and the use of personal protective also provides clinics that are equipped with medical equipment. Some of the hazards controls that have been personnel in the Ketapang Office and Manhattan performed are as follows: Offices, while in every other location there are employee • Ergonomics: The use of a pulley to lift the valve box representatives who are appointed and equipped with cover as a substitution to lifting the valve box cover first aid competencies. manually, the ergonomic video playback embedded in the employees computer is an administrative control process for employees who often work in front of the computer to stretch and refresh the body position. The awardsinOHSarelistedbelow: For our OHS performance in 2019, PGN received forms of appreciation and awards from independent parties. accident asreferredtotheMinisterofMiningandEnergyRegulation No.516.K/38/M.PE/1989. Award fromtheMinistryofEnergyandMineralResourcesforreaching safeworkhourswithoutlostdaydueto Regulation No.516.K/38/M.PE/1989. oil andgasbasedonMinisterof Mining andEnergy Resources fortheachievementof fosteringsafetyin An awardfromtheMinisterofEnergy andMineral OHS A W ARDS Sustainability Report2019PTPerusahaanGasNegaraTbk Indonesia. from theMinisterofManpower theRepublicof Program intheworkplace Platinum category An awardforHIV&AIDSPrevention andManagement No. PER-01/MEN/I/2007. Transmigration Regulation to MinisterofManpowerand accidents achievement,asreferred Safety (OHS)foritszerowork PGN inOccupationalHealthand The MinistryofManpowerawarded 121

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Maintaining THE CUSTOMER SAFETY AND HEALTH

Our focal objectives are to provide affordable, effective, and safe energy. PGN sets standards and accuracy at its very best to ensure the quality and safety of the products. Sustainability Report2019PTPerusahaanGasNegaraTbk 123

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The provision of excellent quality products is the foremost requirement that we employ in sustaining the health and safety of customers. oto te ult o te rdc fr h customers the for product the of quality aimto the control inspections precise These file. bill distribution gas the with results pressure recorded frequently the PGN distributes requirements, the meet To products. aspects. This assessment is undertaken on all (100%) PGN safety with and agreements with comply to in pipeline the pressure gas natural the checks PGN Furthermore, equipment remainswell-maintained. gas customers’ the and managed be can distribution gas of safety the Consequently, sulphide. hydrogen or gas, mercury nitrogen, dioxide, carbon as such impurities, of levels standard above reveal not do points these ensure to network transmission the entering before point the and production of point the i.e., point, operational every verifies PGN conditions, and terms relevant the meet To distribution activities. of standardisation the of part as gases other and butane, main component, the as well as as the gas, quality of methane ethane, propane, of quality the ensure to proceeds Company The supplied. gas the of quality the check to points input channel customer and pipelines, commingle point, production the at samples takes PGN procedures. operating standard on is based out process carried systematically distribution gas PGN’s for mechanism The QUALITY ASSURANCE the chemical contentandsafetyissuesoftheproduct. of understanding an have they that so customers (MSDS) and to provide MSDS to customers and prospective safety the Sheet Data Safety Material the under covered regulations with comply to Company the is for It necessary products. the within materials all testing includes that examination thorough a having after public the to Our policy declares that all of PGN products are delivered Sustainability Report2019PTPerusahaanGasNegaraTbk PRODUCT INFORMATION achievements below can be seen: the that so 2019, year the in system work the improve to continued PGN this, all above and Over Indicator/KPI). the Company’s performance evaluation (Key Performance policy andenforces service qualitystipulations as partof standard service minimum a applies PGN development, competency such support the To division. service customer increased the in has functioning resources human PGN its of competency respects, other In (SOPs). Procedures Operating Standard relevant the under out carried been has activity operational each that monitors constantly PGN quality, service promoting of matter a As PRIORITY FCUST 10. 9. 8. 7. 6. 5. 4. 3. 2. 1. The CompanyprovidesaMSDScontaining: products. gas purchase who customers for information standard, allproducts(100%)have Based ontheproduct [GRI 416-1,G416-2] affecting thehealthfromproductsandservices. reporting year, the there were In no incidents of customers. non-compliance the open to give information to accountable and beneficial are well as records the while Storage. First aid. Health impacts. Chemical properties. Physical properties. Flammable properties. Material reactivity. Hazardous component information. including product composition. material, the about information General telephone numberofthemanufacturer. manufacturer, name, product of: information Product OMER SAFETY [GRI 417-2, G RI 417-3] [GRI417-1]

125

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• There was no infringement within the terms of gas To maintain the quality and pressure of gas flowing sales contracts; through the transmission and/or distribution pipes, PGN • There was no violation in the form of breach of installed filters and scrubbers at the Offtake Station customer identity according to any contract; and filters at the Metering and Regulating Station at • There was no deficiency of customer data registered the customer’s location. These devices serve to reduce in the PGN customer identification system; impurities by filtering out dust particles, condensates, • There was no violation in the advertising media, and other non-gas particles that can cause corrosion promotion programs, or sponsoring ; to the customer’s gas equipment. This process makes • There was no incident of non-compliance with it easier for the PGN team to greatly reduce the chance information and labelling of products and services; of customer complaints regarding the gas quality and • There was no incident of non-compliance with pressure. marketing communications leading to claims or payment of fines. PROVIDING SERVICE AT ITS BEST In addition to PGN providing information, the Company DELIVERING QUALITY has a Contact Center to handle complaints and comments ACCORDING TO REGULATION as a means to demonstrate the Company’s exposure to AND STANDARDS criticism and suggestions from all stakeholders. The PGN PGN demonstrates its consistency in terms of keeping Contact Center can be reached at 1500645, with further up quality and standards by implementing the certified access for customers via e-mail at contact.center@pgn. quality management standard ISO 9001:2015. PGN takes co.id. All inquiries, complaints, or input from customers various strategic measures to sustain quality, particularly and other stakeholders relating to PGN’s products and before entering into contracts with suppliers, such as: services will be served by these channels at short notice. • Inspecting the gas availability The PGN Contact Center operates 24 hours a day and 7 • Ensuring the propriety of production equipment days a week to make it easy for customers. All questions • Ensuring gas quality from suppliers and complaints will be responded within 24 hours after • Checking gas samples from the transmission pipeline the statements have been received by the Contact entry point Center agent. • Conducting sample tests by involving competent independent institutions In order to improve the quality of Contact Center services, • Checking the volume of gas supplied. PGN has centralised the Contact Center at the Head Office and has had walk-in agent to follow up on every As an optimal form of service and of PGN’s contribution to customer complaint and question in each Sales Area since customers, the Company keeps providing customers with 2015. The walk-in agent can provide consulting services reliable information in a prompt effect should there be directly to customers, prospective customers, and other any significant changes in the amount and quality of gas stakeholders. Moreover, each walk-in agent can promptly supplied as well as delivering information and notification follow up on customer complaints by coordinating with about circumstances that might interfere with gas delivery related functions in the Sales Area. to customers. Hence, the customers have an option to use other fuels to maintain their operations, steadily. multiple cities. in industries commercial or customers, small customers, household with either gatherings, customer out carried capabilities can be narrowed. Throughout 2019, PGN has PGN’s and desires customers’ between gap the that so to bridge the understanding between PGN and customers and services, and products PGN of use the of promotion the organise to market, the educate to PGN for success significant a been has and customers from suggestions gatherings has become a means of delivering criticism and Customer communication. two-way open relationships maintain and cooperative establish helps activity This to directly listen to complaints and input from customers. Customer gatherings are an opportunity for PGN to be able CUST OMER INTACTION Sustainability Report2019PTPerusahaanGasNegaraTbk use of natural gas. This visit also provides an opportunity an provides also visit This gas. natural of use customers/prospective efficient the improve to to ways the input regarding customers provide Sales and Management Customer visits, their In customers. new for process subscription the up racing while sales total and quality service enhanced have acts The customers. new finding on focuses Sales serving while customers of existing charge in and is Management Management Customer Customer Sales. namely parties, two by handled now are Executives Account by held previously activities Sales customers. prospective and customers with activities, relationships establishing and dialogue in Sales engaging and Management Customer through customers prospective and customers visits further PGN 127

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for PGN to better understand the business situation of One of the customer complaints that PGN mostly receives its customers and prospective customers so that PGN is related to the PGN pipeline network and customer receives input in order to help formulate strategic policies installation pipes. For this reason, PGN, along with its for the development of PGN’s products and services. Subsidiaries, PGASOL (PT PGAS Solution), is engaged in handling the operation and maintenance of PGN’s ASSURING CUSTOMER infrastructure network as well as helping customers with SATISFACTION their installation pipe maintenance. PGN makes periodic improvements and revitalisations, if necessary, within its quality of services. To that end, CUSTOMER CARD PGN conducts regular customer satisfaction surveys to PGN appreciates household customers by giving them obtain input for improving service quality towards Service a customer card. This customer card, which is renewed Excellence. In 2019, PGN measured the level of customer every two years, functions as a customer’s identity card satisfaction in all Sales Areas involving multiple customer and contains information about the PGN area code, segments, namely the household, small customer, and customer identification number, PGN Contact Center industrial commercial segments. number, and the nearest PGN office address. With this card, customers will find it easy to interact with PGN. Measurement results are colated in the form of a Customer Satisfaction Index (CSI) matrix, Customer LATEST TECHNOLOGY Loyalty Index (CLI), Customer Referral Index (CRI), and PGN also harnesses the latest technology to facilitate Net Promoter Score (NPS). From the results, in 2019, service to customers by launching the PGN Mobile the total CSI score = 5.44 (from the Likert scale 1-6), CLI application. The application provides broad information = 5.54 (from the Likert scale 1-6), and the NPS 41.44%. about PGN, PGN’s products and services, ways to become The figures all approach the upper limit, and thus it a PGN customer, the privileges of using natural gas, can be said that PGN’s customers are satisfied with the and how to detect and to mitigate gas leaks. Also, the services provided. application easily accesses information about gas usage bills. Through this application, customers can find out the To maintain customer satisfaction, PGN ensures locations of Natural Gas Refuelling Stations (SPBG). PGN the reliability of gas distribution and maintains Mobile can be downloaded on the Google Play Store by supply availability by employing the Floating Storage Android users as well as on the App Store by iOS users. Regasification Unit (FSRU) facility in Lampung. FSRU is an offshore installation that is used as a place for storing NETWORK EXPANSION natural gas. Moreover, the Lampung FSRU functions as For some areas that do not have pipelines, PGN has supporting infrastructure for PGN natural gas sales. launched 125 GasLink units managed by a subsidiary, named PT Gagas Energi Indonesia (GEI) performed in PGN has plans to build storage facilities in areas close 2019. The launch of GasLink, which is also fueled by gas, is to major customers, namely industrial and commercial a form of PGN’s earnestness in meeting customer needs customers. Should the gas supply from producers drop, and enhancing their satisfaction. PGN can substitute the shortfall with gas supply from its wells, other suppliers, FSRU, Compressed Natural Gas (CNG) facilities, and LNG Receiving Terminals. Sustainability Report2019PTPerusahaanGasNegaraTbk 129

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SUSTAINABILITY GOVERNANCE

PGN employs good governance and uprightness to achieve the Company’s purposes and to maintain the trust of the entire stakeholders. Sustainability Report2019PTPerusahaanGasNegaraTbk 131

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PGN makes the Corporate Governance and the principles of transparency, accountability, responsibility, independency and fairness as a basis for improving performance. We are also fully committed to continuing to provide compliance with all applicable laws and regulations. 1. in public companiesisbasedupon: governance corporate good of implementation The 7. 6. 5. 4. 3. 2. 1. 7 objectives: P-003/0.20 which was validated on October 22, 2018 with No. under Guidelines Governance Corporate Good had has PGN GCG, of manifestation a As companies’ activities. business every for foundation the as strong fundamentals builds and requirements the regulatory the of meets one it as but company, a serve of success the GCG in factors determining basic the does only Not BASIC IMPLEMNTATION FGCG

came intoforceonNovember16,2015. which of Governance, Company Implementation Public for 21/ Guidelines the No. regarding Regulation POJK.04/2015 Authority Services Financial Improving the Company’simage. national investment; of development the to climate conducive a Improving Increasing accountability tostakeholders; environmental Increasing PGN’s contribution to the national economy; of awareness sustainability aroundPGN; and stakeholders towards responsibility social PGN’s of well awareness as as regulations, and laws with compliance and values moral high on based actions out carrying and Encouraging the Company’s organs in making decisions empowering Company’s organs; manner, the of independence the effective increasing and functions, and efficient, professional, a in managed be to PGN Encouraging Company goalsandobjectives; achieve and presence its maintain to able is it thus, internationally; strong and nationally has both it competitiveness, that so PGN of value the Optimizing GCG SC 95.09 2019 ORE 94.68 2018 Sustainability Report2019PTPerusahaanGasNegaraTbk previous year, which was 94.68, with a VERY GOOD rating. GCG evaluation in 2019 was 95.094, an increase from the the of result The implementation. appropriate ensure to Good corporategovernance in PGNisregularlyevaluated planet, andprofit. people, aspects: imperative three account into taking integrate the principles and practices of sustainability, every planning and decision made, PGN also strives to In application. and socialization targeted by followed thenare which regulations, and laws with accordance in Company the within apply that operating manuals procedures, guidelines, various update Company to the continues end, that of To field governance. the corporate in regulations and with laws compliance applicable upholding all to committed is PGN 5. 4. 3. 2. 1. of Corporate Governance are: aspects five The GCG. aspects of GCG principles and applying for recommendations 25 and governance, corporate good of principles 8 aspects, 5 cover Governance Company Public for Guidelines The 2. Information disclosure. Stakeholder participation; The function androleofthe Board ofDirectors; The function and role of the Board of Commissioners; in shareholders with guaranteeing therightsofshareholders; relations Company Public on effect took November 17, 2015. which Public Governance, for Company Guidelines regarding SEOJK.04/2015 34/ No. Letter Circular Authority Services Financial 94.61 2017 93.94 2016 133

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OBJECTIVES OF GCG GOVERNANCE STRUCTURE [GRI 102-18] IMPLEMENTATION In accordance with Law No. 40 of 2007 concerning PGN has been committed to applying GCG principles in Limited Liability Companies, the PGN’s Organ consists of each of its business activities. PGN considers that GCG three parts: will be the impetus in achieving sustainable performance 1. General Meeting of Shareholders (GMS) which is the of the Company. The following are the objectives of GCG highest authority in a Limited Liability Company and implementation within PGN: holders of all authorities that are not submitted to 1. Encouraging the creation of a proper and prudence the Boards of Commissioners and Directors within management decision mechanism through a check the limits determined by the Law and/or Articles of and balance mechanism in accordance with the Association. functions of each Company’s Organ; 2. Board of Commissioners, which is a board that has 2. Maximizing the value of the Company in the form of the duty to conduct supervision in general and/ high performance and a good corporate image. or specifically in accordance with the Articles of 3. Encouraging the management of the Company in Association, and provide advice to the Board of a professional, transparent, and efficient manner, Directors. empowering functions, and enhancing the 3. The Board of Directors is the Company’s organ that independence of the Company’s Organs. carries out management actions to achieve the 4. Encouraging Company Organs in making decisions Company’s vision and mission in the best interests and taking actions based on high ethical/moral values of the Company. The Board of Directors are also and compliance with applicable laws and regulations responsible for representing the Company both as well as awareness of the Company’s social inside and outside the court in accordance with the responsibility towards stakeholders. provisions of the Company’s Articles of Association. 5. Encouraging the management of Company resources and risks to be more efficient and effective. The people of the Company conduct their functions 6. Reducing the potential for conflicts of interests of in accordance with statutory provisions, the Articles of Company’s Organs and employees in performing the Association and other provisions based on the principle Company’s business. that each division carries out its duties, functions, and 7. Creating a business environment that is conducive to responsibilities independently for the benefit of the achieving the Company’s goals. Company.

GOVERNANCE STRUCTURE

CORPORATE BODIES GMS

BOD BOC

SUPPORTING Corporate Secretary Corporate Secretary of BOC BODIES

Audit Internal Audit Committee

Risk Management Risk Management and Investor Relation Business Development Monitoring Committee

Corporate Social Responsibility Nomination and Remuneration Committee

Corporate Governance Board of Directors. In conducting the duties, the Board the duties, the conducting In Directors. of Board the to advice provide to and Association of Articles the with in accordance supervision specific and/or general The duties of the Board of Commissioners are to conduct Board ofCommisisoners 5. 4. 3. 2. GMS 1. vital several event, decisions weretaken,including: corporate grand these In b. a. and 1(one)ExtraordinaryGMS,at: GMS Annual (one) 1 of consisting GMS, (two) 2 held PGN 2019, In Organs. Company’s the of one of request the at and an Extraordinary GMS, which can be held at any time GMS consists of an Annual GMS which is held once a year a of holding the Companies, Liability Limited concerning of Board 2007 of the 40 No. Law with and accordance In Commissioners. Directors of Board the from Company, both the about information acquire to authority the have shareholders where forum a is GMS the form, concrete its In Association. of Articles of and/or Law the by Boards the to left not Commissioners and Directors are within the limits that determined authorities all of holder the and Company Liability Limited a in authority highest the is (GMS) Shareholders of Meeting General General MeetingOfShareholders for FiscalYear2018amountingtoUSD304,991,574. Approval of the determination of the Company’s Profit facilities andbenefitsforFiscalYear2019. with along salary/honorarium and 2018 Year Fiscal of Stipulation of tantiem for Directors and Commissioners Series Ashareholder. Dwiwarna the from approval written received has it 2019 to the Board of Commissioners on condition that and Community Development Program for Fiscal Year Partnerships Company’s the of Implementation the of Statements Financial the and Statements Financial Company’s the of audit the complete not can it for Firm Accounting Public substitute a of establishment the regarding approval authority GMS of Delegation Development Community Program FinancialStatements. and Partnerships and Statements Financial Consolidated the of Ratification Changes inManagement ofthe Company. August 30,2019. on Shareholders of Meeting General Extraordinary 2019 26, April on Shareholders of Meeting General Annual Sustainability Report2019PTPerusahaanGasNegaraTbk 2. 1. in RiskManagementasfollows: Directors of Board the of responsibilities and duties the PER-09/MBU/2012. Article 25 of the regulation describes No. Regulation Enterprises Owned State of Minister by amended is Enterprises Owned State Corporate in Good Governance of Implementation the concerning PER-01/MBU/2011 No. Regulation Enterprises Owned State- of Minister to Risk refers that of PGN in Implementation Management the with accordance in the Directors are of Board management, the of risk responsibilities and duties Company‘s the Regarding positions or concurrent between CommissionersandDirectors. relations financial relations, family disallows PGN aspects. social and environmental, economic, in authority, including tasks and of division the to according responsibilities, decisions make and act and can they although duties collegial has Directors of Board The Association. of Articles in the with court accordance the outside and inside both PGN represents and Company the of management the for responsibility and authority full has Directors of Board The of Directors. Board the of activities the coordinate to is President Director the of duty The Director. President a by led Directors (six) 6 of consists Directors of Board PGN The Board ofDirectors members oftheBoardDirectors. and Commissioners of positions Board the of or concurrent members between relations, financial relations, family forbids PGN Report. Annual PGN 2019 the in seen be can committee each of duties and functions the of exegesis An Committee. Remuneration and Nomination and Committee Monitoring Development Business and 3 Management Risk and Committee, Audit Committees: Commissioners (three) of Board the of Secretary a by assisted is Board the and Commissioners Independent (three) 3 are there Commissioner, President a by led is Commissioners was 6 people. The Board of Commissioners of Board the of membership the period, reporting this In sustainability, fields. environmental of and social, economic, the aspects namely deems Commissioners of that is part of the implementation of the program GCG program. management risk corporate integrated an The Board of Directors must establish and implement consider businessrisks. The BoardofDirectors,ineverydecision/action, must 135

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3. Implementation of a risk management program can At this moment, there is no specific executive position be performed in two ways: responsible for economic, environmental, and social a. Forming a separate work unit under the Board topics. [GRI 102-20] of Directors. b. Giving assignments to existing and relevant work Consultation on economic, environmental, and social units to carry out risk management functions. topics is conveyed by means of the relevant divisions with 4. The Board of Directors must submit a risk the results given to the Board of Commissioners through management profile report and its handling together various reports. [GRI 102-21] with the Company’s regular reports. Composition of the Boards Of Commissioners Delegating Authority Of Directors [GRI 102-19] and Directors, and Committees of the Board of In relation to sustainability policies and strategies, the Commisisoners [GRI 102-22] Board of Directors delegates the authority to design The membership characteristics of the Board of policies and strategies in each division related to Commissioners and Board of Directors have been well- economic, environmental and social matters. designed in order to ensure that the implementation of the duties of the two Company’s organs can run, effectively and efficiently. Thus, the Company can actualize its performance targets. In 2019, the composition of the Boards of Commissioners and Directors is as follows:

Name Year of Position Terms of Office Gender Appointment BOARD OF DIRECTORS Gigih Prakoso 10 September 2018 President Director 1 Year and 4 Months Male Dilo Seno Widagdo 8 April 2016 Director 3 Years and 8 Male Months Desima E. Siahaan 24 May 2017 Director of Human Resource and 2 Years and 7 Female General Affairs Months Syahrial Mukhtar 26 April 2019 Director of Strategy and Business 8 Months Male Development Redy Ferryanto 30 August 2019 Director of Infrastructure and 4 Months Male Technology Arie Nobelta Kaban 30 August 2019 Director of Finance 4 Months Male BOARD OF COMMISSIONERS IGN Wiratmaja Pura 26 April 2018 President Commissioner 1 Year and 8 Months Male Paiman Raharjo 6 April 2015 Independent Commissioner 4 Years and 8 Male Months Kiswodarmawan 8 April 2016 Independent Commissioner 3 Years and 8 Male Months Christian H. Siboro 30 August 2019 Independent Commissioner 4 Months Male Luky Alfirman 26 April 2019 Commissioner 8 Months Male Mas’ud Khamid 26 April 2019 Commissioner 8 Months Male

President Commissioner [GRI 102-23] The Chairman of the highest governance body in the ranks of PGN, that is the President Commissioner, does not have concurrent positions as executive officer in the organization. Other positions held by the Chairman of the Boardof Commissioners do not conflict with SOE Ministerial Regulation No. PER-02/MBU/02/2015. Thus, there is no potential for this conflict of interest with multiple positions. 1. of Commissionersconsistof: Board the of requirements the Enterprises, State-Owned concerning of Boards Supervisory and and Commissioners of Appointment Dismissal PER-02/MBU/02/2015 for Procedures and Requirements to Referring the Nomination CommitteeoftheBoardCommissioners. of Chair or Commissioner President the involving SOEs of Minister the by formed team a by evaluated are GMS the to recommended other be will who candidates The PER-02/MBU/02/2015. and within stipulated requirements, requirements formal material the meet requirements, must Commissioners of for Board nominees the as determined be will who Candidates 4. 3. 2. 1. candidates fortheBoardofCommissionerscomesfrom: prospective of source the Enterprises, State-Owned of of the Board of Commissioners and the Supervisory Board Members of Dismissal and and Appointment for Procedures Requirements concerning PER-02/MBU/02/2015 Board OfCommissioners shareholder. A Series Dwiwarna by nominated candidates from taken is GMS the by Directors and Commissioners of Boards the of members the of appointment A The Series shareholder. Dwiwarna the by approved decision the and attended be must of GMS the Meeting where (GMS), Shareholders General are the by Directors dismissed and and Commissioners appointed of Boards the members 2015), of 6, of April on Articles 23 the No. (Deed of Association provisions the with accordance In Commissioners andBoardofDirectors Nominating and Selecting The d. c. b. a. Formal Requirements of Other Sources. Officers Functional Government; and Officers Structural Board ofCommissioners/Supervisory BoardofSOEs; Former DirectorsofSOEs; opn/ulc oprto t b declared be to a Corporation causing Company/Public of guilty Commissioners/ found of Board Board Supervisory a Board or the Directors of of member a been not has S/he (five) yearspriortonomination; 5 within bankrupt declared been not has S/he Being capableofperforminglegalactions; An independentindividual; [GRI 102-24] Board of Sustainability Report2019PTPerusahaanGasNegaraTbk 2. 1. prospective of candidates forDirectorscome from: sources Enterprises, State-Owned Requirements, of Directors of Dismissal and Appointment concerning for Procedures PER-03/MBU/02/2015 Directors 3. 2. Boards of Commissioners/Supervisory Board of SOEs; Directors ofSOEs; e. d. c. b. a. Other Requirements e. d. c. b. a. Material Requirements e. agency. relevant the from letter proposal a on based be must it Agencies, Government other or Ministry Technical the from candidates prospective For evidenced byahealthcertificatefromDoctor; as Board), Commissioners/Supervisory of Board the of member a as duties of implementation hamper the (not can that health an illness spiritual from suffering and physical has S/he the relevant SOEfor2(two)consecutiveperiods; of Board Commissioners/Supervisory of Board the of member a as serve not does S/he Head and/orHead/DeputyRegionalHead; S/he is not a candidate for Head/Deputy Regional DPRD, andLevelIIDPRD; I Level DPD, of DPR, the of consist candidates/members members legislative or members legislative for Candidates member. legislative and/or member legislative for candidate a or and/ Party Political a of manager a not is S/he the duties. out carry to time adequate render to able Being nominated; and is concerned person the where Company the of field business the in cognizant sufficient Having management issues relatedtoonemanagementfunction; Company’s the Understanding Dedication; Integrity; prior tonomination. related to the financial sector within 5 (five) years and/or finances state’s the to detrimental is that S/he has not been convicted of a criminal offense and bankrupt within 5 (five) years prior to nomination; 137

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3. The SOEs talent proposed through the Board of f. Good behavior; and Commissioners, consists of: g. High dedication to advance and develop the a. Officials who are one level below the Board Company. of Directors or officials who have particular achievements; 3. Other Requirements b. Directors of SOEs subsidiaries/SOEs joint ventures; a. S/he is not a manager of a Political Party and/ 4. Ministry of SOE talent; or a candidate for legislative member and/or 5. Other sources consisting of: legislative member. Candidates for legislative a. Other SOEs officials; and members or legislative members consist of b. Other Sources. candidates/members of the DPR, DPD, Level I DPRD, and Level II DPRD; Candidates who will be determined as nominees for the b. S/he is not a candidate for Head/Deputy Regional Board of Directors must meet the formal requirements Head and/or Head/Deputy Regional Head; and other requirements set forth in PER-03/MBU/02/2015 c. S/he does not serve as a member of the Board and have passed the Feasibility and Compliance Test of Commissioners/Supervisory Board of the conducted by professional institutions. Candidates who relevant SOE for 2 (two) consecutive periods; will be submitted at the GMS are evaluated by a team d. S/he has dedication and provides full time to do formed by the Minister of SOEs involving the President the work; and Commissioner or Chair of the Nomination Committee of e. S/he is physical and spiritual health (not the Board of Commissioners. suffering from an illness that can hamper the implementation of duties as a member of the Referring to PER-03/MBU/02/2015 concerning Board of Commissioners/Supervisory Board), as Requirements, Procedures for Appointment, and evidenced by a health certificate from a Doctor; Dismissal of Directors of State-Owned Enterprises, the requirements of Directors of SOEs include: Criteria for Determining Independent 1. Formal Requirement Commissioners a. An independent individual; An Independent Commissioner is member of the b. Being capable of performing legal actions; Board of Commissioners who comes from outside the c. S/he has not been declared bankrupt within 5 Company and fulfills the requirements as Independent (five) years prior to nomination; Commissioners in accordance with Financial Services d. S/he has not been a member of the Board Authority Regulation No. 33/POJK.04/2014 concerning of Directors or a Board of Commissioners/ Directors and Commissioners of Issuers or Public Supervisory Board found guilty of causing a Companies, namely: Company/Public Corporation to be declared a. S/he is not a person who works or has the authority bankrupt within 5 (five) years prior to nomination; and responsibility to plan, lead, control, or supervise and the activities of the Company within the last 6 (six) e. S/he has not been convicted of a criminal offense months; that is detrimental to the state’s finances and/or b. S/he does not have shares in the Company; related to the financial sector within 5 (five) years c. S/he has no affiliation with the Company, prior to nomination. Commissioners, Directors, or major shareholder of the Company; 2. Material Requirements d. S/he does not have a business relationship related to a. Expertise; the Company’s business activities. b. Integrity; c. Leadership; In the period of January 1-April 26, 2019, there were 5 (five) d. Experience; members of the Company’s Board of Commissioners, e. Candor; of which 2 (two) were Independent Commissioners. In and the strategy states how to achieve goals. To that end, Company the of individual every of behavior the for basis the provide values the future, company’s the of picture a provides vision the for issue imperative an is Company a of strategies and values, vision, the of stipulation The Values, AndStrategy InSettingPurpose, Role OfBoardDirectors Board ofCommissioners. Commissioner of at least 30% of the total members of the Companies, Independent an have must company Public public each where or Issuers of Commissioners and Directors concerning 33/POJK.04/2014 Authority has No. Services Regulation ofFinancial Commissioners provisions Independent the fulfilled of number The Independent Commissioners. were (three) 3 which of Commissioners, of of Board members the (six) 6 were there 2019, December 31 - August 30 period the In Commissioners. Independent were (two) 2 which of Company, the of Commissioners (six) 6 were there 2019, August 30 - April 26 period the Company’s KeyManagementCompetenceDevelopmentProgram Christian HSiboro Kiswodarmawan Paiman Raharjo IGN WiratmajaPuja BOARD OFC Name OMMISSONERS Commissioner Commissioner Commissioner Commissioner President [GRI102-26] Position October 22—23,2019 September 17—19,2019 March 26—27,2019 December 8—13,2019 Date Sustainability Report2019PTPerusahaanGasNegaraTbk and socialtopicsasfollows: environmental and economic, concerning seminars various development company sustainability issues is expressed through participation and in regarding Commissioners of Directors Boards the of concern The Training and NaturalEnvironment.” Social the for Care and Health and Safety Occupational “Prioritizing namely system, value SAFETY the as such issues, sustainability emphasizes Company the values, PGN’s in addition, In Sovereignty.” Energy National and World Leading National Gas Company for a Sustainable Future be “To namely: vision, that Company’s the Company through a stated clearly been has become issues sustainability prioritizes to commitment PGN’s economic, environmental,andsocialtopics. to related both matters, three these of formation the in involved are Directors and Commissioners of Boards the Revolution of Workforce The Epicenter Exhibition 2019 Conference & Gas Technology Strategy Risk andAuditing Auditing Conduct Leadership High Impact And Development Of Directors[GRI102-27] Training Paris Houston Kingdom United New York City France USA Kingdom United USA Country 139

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BOARD OF DIRECTORS

Name Position Date Training City Country Gigih Prakoso President Director November 27, Speaker: Petromindo - Kartika Expo Indonesia 2019 Indonesia Oil& Gas 2020 Center, Balai Outlook Conference 2019 Kartini Gigih Prakoso President Director November 20, Speaker: Speaker in Floor 21 Main Indonesia 2019 Pertamina Bazma National Pertamina Scholarship Gathering, Tower theme " Our Steps " Gigih Prakoso President Director October 22, Workshop: Business Hotel Padma - Indonesia 2019 Development LNG PGN Bandung Group 2019-2026 Gigih Prakoso President Director October 14, Speaker: The 11th CG Thamrin Indonesia 2019 Conference & Award Ballroom, 2019 with the theme Pullman Hotel - "Empowering BOC and Jakarta Its Committees to Ensure GCG Implementation” Gigih Prakoso President Director October 10, Speaker: The 6th The Patra Bali Indonesia 2019 Indonesia-Japan Energy Resort and Forum (IJEF 6) Villas - Bali Gigih Prakoso President Director October 4, 2019 Panelists: PwC Leadership PwC Indonesia. Indonesia Series - SOE Travels in the Gd. WTC 3, Country with the Theme Floor 42 - "Holding SOE - Unleashing Sudirman Value Through Parent and Avenue Kav. Subsidiary Synergy" 29-31 Gigih Prakoso President Director September 27, Speaker: Oil and Gas Assembly Hall - Indonesia 2019 Downstream Seminar JCC Senayan Expo 2019 (Development of National Natural Gas Infrastructure) Gigih Prakoso President Director September 26, Speaker: the 8th LNG International Japan 2019 Producer Consumer Convention Conference Center “Pamir”, Grand Prince Hotel New, Takanawa 3 13 1Takanawa, Minato ku, Tokyo Gigih Prakoso President Director August 8, 2019 Speaker: The PR program Pelataran Indonesia titled "Coffee SOE" Sinergi Building (Morning Talk Around 8, KBUMN SOEs) Complex Gigih Prakoso President Director August 7, 2019 Workshop: Leadership Board of Indonesia Workshop with DNV Directors Meeting Room - PGN Ketapang Gigih Prakoso President Director July 31, 2019 Speaker: Gas Indonesia JCC - Senayan Indonesia Summit Conference 2019 Gigih Prakoso President Director July 8—9, 2019 Speaker: Indonesia-China Beijing China Energy Forum (ICEF) 6 Gigih Prakoso President Director June 16, 2019 Speaker: G20 Ministerial Karuizawa Japan Meeting on Energy Gigih Prakoso President Director March 14, 2019 Speaker: Seminar Keramika Indonesia Nasional with the topic Conference " Gas Supply to Support Room, JCC the Sustainability of the Ceramic Industry " f omsinr ad ietr i spriin and supervision in management oftheCompany. Directors and Commissioners Boards the of certain by achieved be as to targets are Indicators) that performance criteria Performance key (Key expound indicators which Manual), of (Board Boards Guidelines Work Directors the of Board and Commissioners of evaluation Commissioners and Directors is regulated in the Board of performance The Commissioners AndDirectors Evaluating Danny Praditya Siahaan Desima E. Siahaan Desima E. Siahaan Desima E. Siahaan Desima E. Siahaan Desima E. Siahaan Desima E. Siahaan Desima E. Siahaan Desima E. Siahaan Desima E. Siahaan Desima E. Gigih Prakoso Gigih Prakoso Name The PerfromanceOfBoardsof Commerce Former Directorof General Affairs Resource and Director ofHuman General Affairs Resource and Director ofHuman General Affairs Resource and Director ofHuman General Affairs Resource and Director ofHuman General Affairs Resource and Director ofHuman General Affairs Resource and Director ofHuman General Affairs Resource and Director ofHuman General Affairs Resource and Director ofHuman General Affairs Resource and Director ofHuman General Affairs Capital and Director ofHuman President Director President Director Position [GRI 102-28] July 25-26,2019 6-7,2019 December 2019 November 3-7, 2019 October, 22-23, 19, 2019 September 18- August 28,2019 July 12-14,2019 May 20-24, 2019 2019 March 26-27, March 4-8,2019 2019 February 21-23, January 31,2019 2019 February 25-26, Date Invitation SalesForce (Conference) AttendAn Nusantara PT PgasTelekomunikasi BoC WorkthroughBOC (Workshop) Gartner ITSymposium/Xpo HR Tech(Workshop) HR Summit Protection) CyberSecurity on CriticalInfrastructure Activity CIIP-ID(Symposium Pacific Exposition2019 Exposition 2019 International Conference& II Great LeaderCampBatch 2019 Attend RSAConference Holding MigasWorkshop PT Pertamina (Persero) 2019 Conference: INDOGAS Asia Pacific Conference: CGS-CIMB Sustainability Report2019PTPerusahaanGasNegaraTbk laws andregulations. applicable of corridor the in GMS the of resolution the on based and/or Association of Articles the to according him to given specifically are that tasks of implementation the as well as Company, the of objectives and interests the the for Directors of of Board the management by through carried the tasks and policies supervising in duties and responsibilities of the Board of Commissioners of Commissioners is the successful implementation of the Board the of performance the evaluating for criteria The Commissioners Criteria Training Procedure ForAssessmentOfTheBoard San Francisco Yogyakarta Barcelona Paris Bali Bali Selandia Baru Washington DC Megamendung San Francisco Hong Kong JCC -Senayan New York,USA City USA Indonesia Spain France Indonesia Indonesia Zealand New USA Indonesia USA China Indonesia USA Country 141

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Procedure for Assessing the Performance of the KPI Determination Guidelines and Excellent Performance Board of Commissioners Assessment Criteria to SOEs that were adapted from The performance evaluation of the Board of Commissioners Malcolm Baldridge system. through the Key Performance Indicator (KPI) using the Excellent Performance Assessment Criteria/Kriteria The Directors and the Company’s KPI in 2019 Penilaian Kinerja Unggul (KPKU) system is determined were approved by the Directors together with the by the Ministry of SOEs. The procedure for conducting Commissioners to be carried out by the Directors and performance assessment is as follows: evaluated regularly for the achievement of targets by 1. The Board of Commissioners submits the KPI of the the Commissioners. Board of Commissioners to the Ministry of SOEs; 2. The Board of Commissioners implements and evaluates Evaluation and assessment of the overall performance the KPI achievements of the Board of Commissioners; of the Directors and the Company are carried out 3. The Board of Commissioners reports the realization by Commissioners and the Ministry of SOEs c.q. PT of the KPI of the Board of Commissioners to the Pertamina (Persero). Ministry of SOEs. IDENTIFYING AND MANAGING Criteria for Assessment Directors’ Performance ECONOMIC, ENVIRONMENTAL, Performance criteria and indicators used to measure AND SOCIAL IMPACTS [GRI 102-29] the performance of the Directors and the Company in The Board of Commissioners has the obligation to 2019 include: monitor and provide advice to the Board of Directors 1. Implementation of the duties and responsibilities of on a regular basis regarding the effectiveness of the each member of the Board of Directors in accordance application of risk management. To get an accurate with the Company’s Articles of Association; picture on economic, environmental and social issues, 2. Implementation of the results of the Annual General the Boards of Commissioners and Directors get Meeting of Shareholders in 2019; input and feedback from stakeholders in the form of 3. Realization of Directors and Company KPI achievements periodic reports. in 2019 based on KPKU which includes 5 KPKU Perspectives and additional perspective of Development REVIEW OF ECONOMIC, Agencies to strengthen the role of companies as ENVIRONMENTAL, AND SOCIAL development agents in encouraging the realization of TOPICS national strategic programs, which include performance Evaluation of PGN‘s sustainability performance is reported indicators: by each division to the Boards of Commissioners and a. Financial and Market Perspectives; Directors in the form of periodic reports every year b. Customer Perspective; related to the Company’s development. [GRI 102-31] c. Product and Process Perspectives; d. Labor Perspective; In preparing this Sustainability Report, the Board of e. Leadership and Governance Perspectives; Directors delegates the responsibility of preparing a report f. Development Agency. to the Corporate Secretary to ensure that all material topics are covered in the report. In turn, the Board of Directors Procedure for Implementing the Assessment examines the report carefully and gives approval before towards the Directors’ Performance the report is published. [GRI 102-32] The performance assessment of the Directors and the Company is performed under a Key Performance Indicator RISK MANAGEMENT (KPI) system based on the State-Owned Enterprises In particular, PGN has a division that runs a risk (SOE) Excellent Performance Assessment Criteria (KPKU) management process, namely the Risk Management & referring to the Ministry of SOE Letter Number S-08/S. GCG (RMG) Division. In 2003, PGN implemented a risk MBU/2013 on January 16, 2013, concerning Submission of eeomn o te opn‘ bsns poess is processes business Company‘s the of development the to relating matters critical or strategic on Discussion Communicating CriticalConcerns Stock CompanyofPTPertamina. Government the in Investment Capital State Indonesia’s of Republic of the of Addition concerning 2018 enactment of 6 No. Regulation the after Pertamina parent, PGN’s to adjusts 2018 31000: ISO to 2018 in framework management risk PGN the in change The 024000.K/SM.02/UT/2009. No. Decision Directors of Board on based Guidelines Management Risk PGN’s in framework (ERM) Management Risk Enterprise-wide the overall Company’s goals; therefore, PGN applies the Risk of achievement the for applied is PGN in management 1999. 4360: (NZS) Standard Zealand (US)/New management system based on the Australian Standard CORPORATE SECRETARY INTERNAL AUDIT [GRI 102-33] HEALTH, SAFETY, ENVIRONMENT SECURITY AND presidnt dirctor Sustainability Report2019PTPerusahaanGasNegaraTbk ietrt Ognztoa Srcue te tutr of PGN’s riskmanagementgovernanceisasfollows: structure the Structure, Main Organizational the Directorate Concerning 2019, 20, August on PDO/2019 033700.K/OT.00/ No. Tbk., Negara Gas Perusahaan PT of In accordance with the Decision of the Board of Directors Governance StructureofRiskManagement regularly todiscussthedevelopmentofCompany Boards of Commissioners and The Directors continue to meet Commissioners. of Board the to letter response through a Directors of Board the are by to which responded Directors, then of Board the to Commissioners of Board the from guidance suggestions, response, of letters submitting for mechanism a through handled be Should there be matters that month. need following up, these will every Directors and Commissioners of Boards the of mechanism meeting joint a through performed MANAGEMENT AND GCG RISK MANAGEMENT STAKEHOLDER STRATEGIC Executive Office 143

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In 2019, PGN has identified risks in all work units, business units, subsidiaries, and affiliates; the identification found 450 active risks. The results of this identification process are reported to management in the form of a Corporate Risk Profile, to be followed up. This report is the basis for management to act proactively in reducing potential risks, and is useful in developing strategies and continuously improving risk management processes.

Vision, Mission, Of The Company’s Risk Management Based on the Board of Directors Decision on PGN‘s Risk Management Guidelines, Vision and Mission of Risk Management are established as:

Vision of Risk Management Mission of Risk Management

Being a Company that sustainable in risk • Providing optimal contribution to the management implementation; thus, each achievement of the Company’s goals; management process can be performed, • Steering the Company clear from unexpected effectively, efficiently, and accountably. and unexpected events; • Providing adequate confidence that the Company’s risks have been well-anticipated and calculated.

Duties of Risk Management 7. Aligning policies for implementing risk management The duties of the Risk Management & GCG Division (RMG with Oil and Gas Holding; Division) related to the Company’s risk management 8. Monitoring and evaluating investment risk function as outlined in Board of Directors Decision management studies as a condition for the issuance No. 034101.K/OT.00/PDO/2019 concerning the Main of Final Investment Decision (FID). Directorate Work Procedures are: 1. Managing the preparation and evaluation of Function of RCT policies, corporate risk management strategy, risk The risk owner is assisted by the Risk Management management tools, and investment risk management Champion Team (RCT) in carrying out the risk management in the PGN Group; process. RCTs are personnel who work based on PGN’s 2. Managing Corporate risk assessments and formulate management decision to undertake the risk management the top risks of the PGN Group; process in each work unit and subsidiary/affiliate. 3. Monitoring the implementation of risk treatment in accordance with the acceptable residual risk level of Duties of RCT the PGN Group; The duties of the RCT include the following: 4. Managing investment risk management in the PGN 1. Performing the risk management function by Group; coordinating and facilitating risk management activities 5. Managing the implementation of calculations, (identification, analysis, evaluation, evaluation, compilation, and cascading and proposing a Risk Limit handling, control activities, communication, and for Work Units and Subsidiaries/Affiliates; monitoring) undertaken by the risk owner; 6. Managing the level of risk management maturity 2. Monitoring the amount of risk control costs (cost of including the PGN Group’s risk awareness culture risk) required by the work unit or subsidiaries/affiliates program; and establishing methods for measuring the efficiency and cost effectiveness of risk control compared to the results achieved; a. as follows: is model the of explanation The faced. risks the against resilience Company increase strongly to expected also is Thisapplication effectively. and efficiently managed, can be units work amongst that overlap to authorities potential the and have tasks specific that so functions, various coordinate to Company the by implemented is The implementation of the Three Lines of Defense Model Three Lines0fDefenseModel 4. 3. maintaining effectiveinternalcontrol. while risk mitigate and control assess, to obligations and risk responsibilities the the that so is owner), (risk level owner operational the at Management First LineofDefense and ‘High’monitoringisdoneonceeverymonth. High’ to ‘Moderate ‘Moderate’, category the for while Moderate’, to ‘Low procedures routine through out carried is monitoring and ‘Low’ category the under management risk of implementation the monitoring For regularly. subsidiaries/affiliates, and units work in Reporting on the implementation of risk management to theRMGDivisionperiodicallyandatanytime; application (SIMR) System Information Management work Risk the utilizing by the subsidiaries/affiliates its and unit in the management report risk owner, of risk implementation the of approval the With MANAGEMENT CONTROL FIRST LINEDEFENS INTERNAL CONTROL MEASUREMENT SENIOR MANAGEMENT

SUPERVISORY AGNCY/BARDOFDIRCTR/ SECOND LINDEFENS Risk Management Financial Control Compliance Inspection Security Quality AUDIT COMMITTEE Sustainability Report2019PTPerusahaanGasNegaraTbk d. c. b. governance andstructureoftheCompany. overall the in role a have and structure organizational the of scope the outside are regulations and Rules External audit andregulatory body management frameworksownedbytheCompany. risk all The covers assurance providing implemented. for responsibility are defenses first-line second-line the and how for responsible is organization. Management the in functions management the to of governance, risk management, and internal control risk-based effectiveness the for a guarantees provides approach, through function, audit internal The Third Lineof Defense Company. related to the risk both to the level above or information below the all report adequately to owner risk the by management at theoperationallevelwhilehelping implemented management risk of implementation the of effectiveness the monitoring and facilitating risk the by management, compliance, and performed other similar functions is function controller The Second Line of Defense THIRD LINEDEFENS INTERNAL

AUDIT

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About the Governance Maintaining the Maintaining Maintaining the Maintaining Maintain Sustainable Maintaining Maintain Remarks Report Sustainability Customer Health and Occupational Health Quality of Pgn Prosperity of Environment the National Sustainability Safety and Safety Employees the Country Economy 146 PT Perusahaan Gas Negara Tbk Sustainability Report 2019

Revision on Risk Management Guidelines c. Principles of Risk Management Work Unit. On October 19, 2019, the RMG Division updated and d. Related to matters that need implementing within revised PGN‘s Risk Management Guidelines under Enterprise Risk Management. No. P-005/0.20, by generally making adjustments and changes as follows: Roadmap a. The framework from COSO becomes ISO 31000: Integration and implementation of risk management 2018. policies in the Company are expected to reach optimal b. Risk assessment criteria which include: levels. This cannot be done in the short-term, but requires • Risk impact criteria a fairly long period of time, especially with Pertamina as • Risk probability criteria the Oil and Gas Holding. The RMG Division has established • Risk level criteria a roadmap to ensure that the goals and work programs • Priority level of risk treatment can be achieved as fully as possible.

INDUSTRY BENCHMARK Making PGN Group an entity with leading risk management and being acknowledged as a benchmark for similar industries

CULTURE STRENGTHENING Strengthening and internalising the risk management culture for 2025 HR and stakeholders within the PGN Group

CULTURE 2024 BUILDING Development of risk management 2023 culture for HR and stakeholders in the PGN Group 2022

2021 SYSTEM INTEGRATION Escalating the integration CAPABILITY 2020 of PGN’s risk management DEVELOPMET process with the business The improvement processes and risk of the capability of management of subsidiaries/ implementing risk affiliates within the METHODOLOGY management for PGN Group ENHANCEMENT HR and stakeholders The improvement of risk within the PGN Group management methodology applied to maintain the relevance of risk management towards the PGN Group context.

Personnel Certification a. RMG Division provides debriefing to the risk management team of subsidiaries/affiliates to improve competence in managing risk; b. Developing periodic monitoring activities on the application of risk management processes to ensure that the risk management processes are being effectively carried out in accordance with management’s requirements in accordance with the direction of the RMG Division; and c. RMG Division develops SIMR which can provide integrated information on risks in a timely manner. are riskswiththefollowingdetailsandelaborations: During 2019, the RMG Division has identified several risks with low to extreme levels of impact. At the end of 2019, there Risk FacedbytheCompanyandItsTreatments comprehend the process of risk management commencing from the identification stage to optimally managing risks. At this this At moment, theCompanyhasseveralpersonnelwhohaveriskmanagementcertifications,including: risks. managing optimally to stage identification the from commencing management risk of process the comprehend who resources human of availability the have to necessary is it activities, monitoring and preparation profile risk performing In M Alfiannor Romario Drajad Puji Arman Heru Setiawan Armynas Handyas Nanny Atika Rezki Anindhito Ivanna LaksminiDevi Subsidiaries Directorate ofStrategyandBusiness Directorate ofCommerce Directorate ofInfrastructureandTechnology Directorate ofFinance Directorate ofHumanResource&GeneralAffairs President Directorate High Moderate toHigh Moderate Low toModerate Low Name Sr. Analyst,RiskManagement Analyst, RiskManagement Analyst, RiskManagement Jr. Analyst,RiskManagement Analyst, RiskManagement Sr. Analyst,RiskManagement Advisor, RiskManagement Division Head,RiskManagement&GCG Based ontheDirectorate/Subsidiary Based ontheHeatMap Position Sustainability Report2019PTPerusahaanGasNegaraTbk Institute Certified RiskAnalyst Certified RiskProfessional®byLSP-PPM Certification TM byAsiaRiskManagement Total Total 158 183 230 15 40 54 147 16 36 33 51 76 8

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Based on Risk Category Total Operations 206 Strategy & Planning 73 Finance 69 Compliance 42 Governance 37 Reporting 23

Effectiveness of Risk Management [GRI 102-30] An Oversight Implementation Report is submitted to the In every business, there are risks that can be predicted President Director and Audit Committee for follow up. in advance and risks that are not known. To that end, the Company establishes risk management for the PRECAUTIONARY PRINCIPLE OR process of identifying, analyzing, evaluating, controlling, APPROACH [GRI 102-11] and attempting to avoid, to minimize, or even to The 1992 Rio Declaration mentions a precautionary eliminate unacceptable risks. Within the PGN structure, approach to protecting the environment. Through risk management is carried out from the highest level this principle of prevention, the Company is expected of the corporate governance body, namely the Risk to pay attention to and to avoid negative impacts on Management and Business Development Monitoring the environment when carrying out their operational Committee (PMRPU) the organ supporting the Board activities. PGN always considers environmental factors in of Commissioners. every planning, project implementation and operational activities. By prioritizing compliance with the law, PGN The task of the Risk Management and Business ensures that each new project can be undertaken after Development Monitoring Committee (PMRPU) is to having acquired an environmental permit from the provide oversight, input, and recommendations on the competent authority by first conducting an environmental application of corporate governance, and identify matters impact assessment, such as an Analisis Mengenai Dampak that require the attention of the Board of Commissioners, Lingkungan (AMDAL). particularly in terms of general supervision and adherence to applicable laws and regulations. In the environmental Corruption Prevention and social sector, the Risk Management and Business Corruption, bribery, graft, and fraud have a negative Development Monitoring Committee (PMRPU) provides impact on the Company for damaging healthy business input in the form of review results to the Board of practices. Internally, corruption prevention socialization Commissioners. This input is useful for determining the for the downstream oil and gas business sector has been company‘s strategy, especially in the area of sustainability. socialized on May 22-23, 2019, to representatives of work units and Subsidiaries/Affiliates. Other input was obtained from the Internal Supervisory Unit which is located under the President Director, Besides this, PGN has designed and implemented a whose task is to provide suggestions for improvements comprehensive approach to corruption prevention and objective information about the activities examined in the form of internal rules and strict supervision. at all levels of management for the conditions, causes PGN established a Conflict of Interest Policy and and consequences arising from weaknesses in internal Gratuity Control in accordance with Directors Decision control and risk management. rtiis n h PN niomn t b i accordance in be to environment PGN the in gratuities of Interest, acceptance, rejection, granting, and requesting including Commissioners and Directors regarding Conflict provide direction and reference for all PGN Personnel to is and policy this of Interest purpose the of where Control Conflict Gratuity governing policy a has PGN Interest compiledbytheCompany. of Conflicts regarding provisions the with comply must detrimental to the Company. The people of the Company be can which decision the of results the of performance the as well as decision-making, of quality the affect can it intentionally or unintentionally, for other interests so that or position, has the authority asasituation that can potentially be misused, their to ofinterest due who personnel Company by faced condition a conflict defines PGN Conflicts OfInterest and otherbusinesspartners. suppliers by signed be to statements Pact Integrity with also contract or labor agreements the company are equipped are All partners. procedures business and suppliers all to disseminated and policies Anti-corruption Partners [GRI205-2] for Communication Anti-Corruption unit work to 2019 22-23, representatives andAP/Affiliates. May on in training, downstream activities the anti-corruption prevention corruption conducted disseminated but not has PGN [GRI 205-2] Communication and Communication prevent corruption,bribery,gratuityandfraudare: to efforts PGN‘s Company. Policy Control Gratuity and Control Policy tasks as contained in the Conflict of Interest Gratuity and Interest of Conflict perform to 2018, 2, April on 0030000.ST/PW/IAU/2018 No. Assignment of the Letter under established (UPG) Gratifikasi Pengendalian Internal on Audit, where there is a team of Gratuity Control Unit/Unit currently centers Management fraud. Gratuity and preventing interest of conflicts preventing ethics, work and ethics business of implementation the encourage to controls gratuity implementing for basis a as 2014, 1, October on 018401.K/OT.03/UT/2014 No. Training Aboutnti-Corruption [GRI 102-25] Business

Sustainability Report2019PTPerusahaanGasNegaraTbk • • to severalprovisions: refers system reporting violation this of Implementation effectively. runs, system the thus, of identity; reporter‘s the confidentiality and protection the guarantees PGN corruption. to potential/lead the have corruption that activities of or acts report can stakeholder PGN Every the improves system. whistleblowing a and through supervision of quality settings policy implements PGN Whistleblowing System of theworkemployeeconcerned. or completion the of timeliness and decisions effectiveness the affect making in objectivity and reduce not independence may activities other in Involvement them. to mandated been have that activities PGN‘s and/or with interests interest of conflict a have not do activities outside the stipulated working hours, activities provided that these other conduct to allowed be may employees and Directors, of Board Commissioners, of Board The with CorruptionEradicationCommission. coordination in Team Unit Control Gratuity PGN the to of conflict a this report can anyone of acceptance/gratuity, and interest event reporting the In its PGN. and within gratuity mechanism for request and granting, rejection, theacceptance, in ethics Interest, of Conflict to relating principle precautionary the regulates policy Control Gratuity and Interest of Conflict the of scope The corruption, andotherdeviationsofbehavior. prevention of Conflict of Interest, prevention of fraud and ethics, work and ethics business of implementation the encourage can reference this that hopes Company The with the principles of Good Corporate Governance (GCG).

PW.04/PDO/2019 dateJune25 approved Guidelines 024700.k/ : No letter decision Directors’ the through System Whistleblowing 117/M-MBU/2002 Kep concerning theImplementationofGCGPractices; No. Decision Ministerial th 2019; 149

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Conflict of Interest Policy and Gratuity Control • ETHICS AND INTEGRITY [GRI 102-16] as outlined in Board of Directors Decision No. Every PGN employee is expected to adopt ethics and 0184001.K/OT/03/UT/2014 on October 1, 2014. a culture of integrity for the realization of dignified workers. Not only comply with applicable law, every PGN Whistleblowing is facilitated through e-mail and postal employee is required to follow international business letters that are followed up in a professional and norms. This ethics and culture of integrity play a vital proportional manner. Should it be attested, the person role in developing the Company for the long term. committing corruption will be processed in accordance PGN develops five values called the “ProCISE” culture with the applicable laws and regulations. In the context (Professionalism, Continuous Improvement, Integrity, of evaluating corruption risks, to execute an evaluation Safety, & Excellent Service). This culture is socialized process of compliance, efficiency, and effectiveness in by Directors at face-to-face meetings with employees, the implementation of the internal control system, PGN counseling in in-house training and the publication of a has a dedicated Internal Audit Division (IAD). The IAD pocket book that contains rules of behavior. personnel are competent in their field and have gained a professional certificate in the field of internal audit and ProCISE is elaborated in the Business Ethics and risk management both from national and international Work Ethics Guidelines which also cover economic, institutions, among them: environmental and social aspects. ProCISE, which is the • Certified Internal Auditor (CIA) and Certification in 10 Main Behaviors of the Company, is also spelled out Risk Management Assurance (CRMA) issued by The in the Code of Business Ethics and Work Ethics that Institute of Internal Auditors apply to every PGN Personnel including the Board of • Certified Fraud Examiner (CFE) from the Association of Commissioners, Board of Directors and workers. The Certified Fraud Examiners Code of Work Ethics outlines contains: Qualified Internal Auditor (QIA) issued by the Internal • • Code of conduct of PGN Personnel in their daily work Audit Education Foundation activities Certified Risk Management Professional (CRMP) issued • • Procedures regarding relations with stakeholders by the Institute of Risk Management Professional • Practical guidelines governing conflicts of interest, Certification (LSPMR). corruption, bribery, and gratuities • Information management. In addition, PGN applies Internal Audit Guidelines and Internal Audit Operating Procedures that refer The Business Ethics Code and Work Ethics Codes have to the audit standards of the Institute of Internal Audit been published and must be obeyed by all PGN personnel. compiled in order to comply with OJK Regulation No. 56/ POJK.04/2015 on December 23, 2015. Integrity Pact Further, PGN implements an Integrity Pact that must be The investigation of the internal audit carried out by the signed by every party involved in the procurement of risk-based audit approach, with emphasis on units and goods and services. The purpose of this Integrity Pact activities prone to fraud and corruption. The Internal is to prevent fraud and discrepancies in the process of Audit Division also actively provides consultation to other procuring goods and services. work units where needed.

PGN‘s commitment in promoting integrity is also proven During the reporting period, we have not conducted an by the Company‘s involvement in providing views before assessment related to corruption in each work unit. the Indonesian House of Representatives and making [GRI 205-1] public policies regarding policies to meet the demand for natural gas for domestic consumption needs. During the reporting period, there were no incidents of corruption or legal cases related to corruption. [GRI 205-3] normal companyprocedures. occurs within a company that cannot be resolved through submit information regarding violations that are indicated to witnesses reporting for medium a as used be can that 024700.K/PW.04/PDO/2019 on June 25, 2019, is a system No. Decision Directors of Board through approved was which Guideline System Whistleblowing Company’s The [GRI 102-17] for AdviceandConcerns Mechanisms • • • • following practices: Integrity an Pact containing commitments in the sign form of the to required are procurement goods/services of function service the all the and to governance, providers goods/services commitment corporate good Company‘s of the implementation of form a As efficiently, andeffectively. the quickly, support procurement, goods/services of can implementation they that so cooperation, SOEs and procurement in products domestic increasing to related of Goods/Services to accommodate changes in legislation Procurement for Guidelines concerning 2016, 1, August on 010300.K/LG.01/PDO/2016 No. Decision Directors of Board replaces which 2018, 12, February on P-001/0.37 by the Guidelines for Procurement of Goods/Services No. The procurement of goods and services in PGN is regulated the laws). abiding (duty process procurement this in critical and important, necessary, deemed are that practices best considering including legislation, and provisions the all fulfilling and to related obligations normative other an with adequate understanding of various regulations and process procurement the through Carry interest (conflictofrule); parties’ interests and as such does not have conflict of S/he does not make decisions for personal or affiliated Take decisions withcare(duty ofcareandloyalty); influence fromotherparties(independence); or pressure under not or independent free, a accuracy in and high with faith, good of principles the on based goods/services of procurement the Undertake About Ethics

Sustainability Report2019PTPerusahaanGasNegaraTbk the InvestigationTeam. Division which consists of the Report Recipient Team and Audit Internal Head Group by determined Division, Audit Internal the in currently is team Committee The Ethics Ethics CommitteeandtheBoard. the of consist organs WBS The mechanism. operant the for responsible is that department a has Company The the teaminInternalAuditDivision. email: [email protected], through the website or coming directly to via submitted be can team WBS the to Reports (WBS). System Whistleblowing Company’s the through resolved through the be Company’s normal channels cannot can be that submitted violations However, integrity. suggestions of regarding ethical behavior and internal organizational submission the specific regarding a mechanism external have and yet not does Company The 6. 5. 4. 3. 2. 1. the of Company‘s WhistleblowingSystemareasfollows: objectives The so. do to intend who those and also violators for effect deterrent a provide can it that so penalties appropriate of imposition the including up, follow- and attention requires (whistleblowing) Violations Reporting of mechanism the from obtained Reporting standards thatapplyintheCompany. ethical the with accordance in not are that Company the within tribulations various disclose to effort an As as businessactorsandpartnersoftheCompany; stakeholders and Company the between relationship the in (fairness) equality of principle the Supporting Evading destructive publicityfortheCompany; effective an period oftimebystakeholders; adequate an of in violations reporting for implementation mechanism the Ensuring be resolved throughnormalorganizationalprocedures; cannot that matters reporting for channel a As reporting violationsfromstakeholders; handling in guidelines implementation or basis a As 151

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Ethics Board: company’s structure, such as when there is an acquisition, • The Ethics Board I, consisting of 3 (three) Directors merger or restructuring. Notifications are given at least whose duties are to decide the termination of an one month before changes are made. investigation or order to conduct an investigation, recommending the status of reporting violations, INTERNATIONAL INITIATIVES AND providing sanctions and monitoring the follow-up MEMBERSHIP OF ASSOCIATIONS of reporting violations involving employees and [GRI 102-12, GRI 102-13] Directors. PGN‘s concern for environmental issues and its • The Ethics Board II consists of the President commitment to sustainable development is expressed by Commissioner, the President Director and 1 (one) PGN‘s participation in international initiatives, such as: Director, whose duties are to decide the termination of • ISO 26000 for guidelines for Corporate Social the investigation or order to conduct an investigation, Responsibility activities, recommending the status of reporting violations, • OHSAS 18001: 2007 for the OHS Management providing sanctions and monitoring the follow-up to System, reporting violations involving the President Director • ISO 14001: 2015 for Environmental Management and the Commissioners. Systems, • ISO 9001: 2015 for Quality Management Systems, In contexts where violation reporting exists, it will be • ISO 27001: 2013 for Information Security Management processed through the Report Recipient Team. The Systems. Report Receiver Team will verify the initial evidence and report the results to the Ethics Board. Should from the In addition, PGN is registered as a member in various initial evidence of the report it be stated that there are national and international organizations that are useful indications of violations, then the process will proceed to for broadening horizons, increasing knowledge, and the investigation. expanding networks. These organizations include:

As a note, anonymity is maintained and the report will 1. legal Forum for State-Owned Enterprises still be processed even if the reporter does not complete This State-Owned Enterprises Legal Forum was identification. formed on August 31, 2012, with the aim of enriching and strengthening SOEs in legal matters. This Collective Labour Agreements (CLA) [GRI 102-41] Communication Forum of SOE is open to the Legal In daily work activities sometimes issues arise between Heads of the SOEs Legal Bureau in Indonesia. The workers and company leaders that need to be resolved. For Communication Forum is expected to be able to this reason, CLA was formed as a guideline for cooperation contribute to making suggestions so that the rules of between workers and companies in helping both parties the game in SOE businesses are getting better from to solve problems / disputes at work. PGN has formed a a legal perspective. In addition, the SOE Legal Forum Collective Labour Agreements which has been agreed conducts education or holds/informs seminars both and appointed with workers and company leaders as at domestically and abroad that are related to SOE 31 December 2017, valid until 30 December 2019. Various activities, especially in the legal field. items of agreement and obligations are balanced outlined in it, among others: certainty of the rights and obligations 2. indonesian Gas Association (IGA) of PGN and workers, terms of employment, company rules, IGA was formed in 1980 and became a member cooperation between PGN and workers, fair resolution of of the Indonesian Chamber of Commerce (KADIN) dissent through deliberation to reach an agreement CLA in 2006. The mission of the IGA is to promote the provides protection for all permanent employees of PGN. natural gas industry for economic development The CLA also regulates notifications and grace periods and prosperity. More than 46 companies are now when there are changes important and fundamental in the members of the IGA. of Internal Auditorsndonesia theInstitute 5. HumanCapitalForum(FHCI) indonesian 4. 3. audit standards. audit standards and also provide inputrelatedto latest the out find can auditors internal organization, this joining By Indonesia. Auditors Internal of Institute The of members are personnel Audit Internal PGN All and eachSOE. Enterprises State of Ministry the to of Capital Human development the to related recommendations and opinions, input, studies, suggestions, of form the in policy and thinking strategic provide to aims that field HR the of observers and Director Resources Human Managing of the for a forum is communication (FHCI) Forum Capital Human Indonesian The gas companiesintheAsiaPacific. for market a build to and safety, and technology high with industry gas natural a build to determined also is ANGVA growth. sustainable towards transportation for fuel as natural gas use of the promote and lead to vision a with 2002 since established been has ANGVA Association (ANGVA) Vehicles Gas Natural Pacific Asia Sustainability Report2019PTPerusahaanGasNegaraTbk ih tkhles Te olwn tbe lcdts the elucidates relationships andinteractionswithstakeholders: table following The stakeholders. with relationships congruent build to try always we Therefore, performance. PGN‘s influence and Company the helped develop have stakeholders Strategically, Company. the by affected are or operations Company‘s the of course the affect they for attention pivotal receive Stakeholders STAKEHOLDERS’ INV nternal 6. I ESDM sector. the in SOEs of composed is FKSPI ESDM Indonesia, the while in SOEs The of composed is experiences. FKSPI Central exchange latest and the about developments learn can organizations where forum a is Forum Communication Audit Internal The and MineralResources(ESDM) both CentralFKSPI and FKSPI Ministry ofEnergy udit Communication Forum (FKSPI) Audit Communication OLVEMNT 153

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Stakeholders Basis of Involvement/ Meeting Topics [GRI 102-40] Determination Communication Frequency [GRI 102-44] [GRI 102-42] Method [GRI 102-43] [GRI 102-43] Shareholders • Representative • Company Visit • At least 12 times/ • Maintaining and increasing the and investors • Influence quarter value of investment through • Conference call • Minimum 3 improving the Company’s times/year performance • Field trip • At least 1 time/ • Obtaining dividends every year operational year • Analyst Meeting • At least 1 time/ • Accountability and accuracy of year financial statements • Roadshow Non- • At least 4 times/ • Transparency and accuracy of deal year operational condition reports • Investor Summit • At least 1 time/ • Respect for the rights of year shareholders in accordance • GMS • At least 1 time/ with Laws, Regulations and year Articles of Association (AD)/ • Public Expose • At least 1 time/ Household (RT) year Worker • Dependency • Through SP-PGN: Meeting • Equality • Influence Workers Union PT accordingly needs • Well-being Perusahaan Gas • A clear career path Negara Tbk., • There is no discriminatory • Management practice and employee • A conducive and safe working communication atmosphere forum Government • Representative • Bipartite meetings As needed at least • Implementation of operational and • Influence • Hearing with 2 times per year activities well and optimally Regulator the House of • Efforts to establish harmonious Representatives and constructive relations with regulators • PGN and all its employees are subject to and obey the laws and regulations Business Dependency • Implementation of As needed at least • The procurement process is Partner service contracts 1 time a year fair and transparent (vendor, and procurement • Objective selection and supplier, agent, of goods evaluation in partner selection reseller, • Performance • Mutually beneficial installer) evaluation of relationships suppliers and partners

CRITICAL CONCERNS [GRI 102-34] As of December 31, 2019, there were 2 (two) cases been decided and/or has not permanent legal force in or material value lawsuits against PT Perusahaan Gas the previous year. As for the case, namely: Negara Tbk., The case is a further situation or has not Declaration ofForceMajeureintheKepodangTambakLorokGasransportAgreementbyPCM Correction ofTheaxBase(DPP)IncomefromransferParticipatingnterest Impact onCompanyConditions Case SettlementStatus Principal Case Types ofCase The parties Institution Conditions Impact onCompany Case SettlementStatus Principal Case Types ofCase The parties Institution PT KALIMAN BUT SAKA INDONESAPANGKAH LIMITED(BUTSPL) AN JA W A GAS(KJG) Ship-or-pay paymentsfromPCMLwillaffecttheCompany’sconsolidatedincome. to besubmittedinFebruary2020. In 2019,KJGisintheprocessofpreparingstatementsclaimswhichareplanned suit totheICC. or mediationbyBPHMigas,finallyon29August2018KJGsubmittedanarbitration notice ofArbitrationSettlement.Afteritcouldnotberesolvedthroughdeliberation shown goodfaith.OnMay11,2018,KJGsubmittedalettertoPCMLregardingthe deliberations withPCMLandmediationinvolvingBPHMigas,buthasnot for PCML.InaccordancewithGTA,sincethebeginningof2017,KJGhasundertaken Power PlantinTambakLorok,resultingtheemergenceofship-or-payobligations (Persero) forthetransportationofgasfromKepodangFieldtoPTPLN Kalija IGasTransportationAgreement(GTA)betweenKJGandPCMLPTPLN The inabilityofPCMLtofulfillthegasvolumecommitmentsagreeduponin Civil Petronas CarigaliMuriahLimited(PCML)(asDefendant) KJG (asPlaintiff) International ChamberofCommerce(ICC)HongKong 2. 1. No.4003/B/PK/Pjk/2019 whichdecided: Supreme CourtgrantedtheDirectorateGeneralofTax’srequest initsdecision through theIndonesianSupremeCourt.ForLegalEfforts, theIndonesian of theappeallevel,DirectorateGeneralTaxesfiled a legalreview the taxthatmustbepaidbyBUTSIPLis0(zero).However,onverdict and theTaxCourtgrantedallappealrequestssubmittedbyBUTSIPL,sothat With regardtothestipulationofDPP,BUTSIPLhassubmittedanappeal USD537,333,333.33 sothatthetotalDPPownershipisUSD562,843,149.41. and thetransferofreceivablesownedbyHOGHItoSEIinamount of shareownershipSIPLBUTtoSEIintheamountUSD25,509,816.08 Income fromtheTransferofParticipatingInterest(PI)indirectlyfortransfer The DirectorateGeneralofTaxeshasdeterminedtheTaxBase(DPP) Tax BUT SIPL(asRespondentforReview) Directorate GeneralofTax(asPetitionerforReconsideration) Supreme CourtoftheRepublicIndonesia affect theCompany'sconsolidatedincome. On theverdictofSupremeCourt, legal remediesthatcanbeundertaken. Based onthisdecision,BUTSIPLiscurrentlyconductingan assessmentof November 28,2018. Cancelling thetaxcourtrulingNo.PUT-112654.35/2014/PP/M.IB on Granting therequestforreconsiderationfrom request Sustainability Report2019PTPerusahaanGasNegaraTbk but SIPLisrequiredtopay,whichmay 155

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REMUNERATION POLICIES [GRI 102-35] 2. Board of Commissioners Allowances The Remuneration Policy of the Board of Commissioners a. Religious holiday allowance and Directors refers to the Regulation of the Minister Religious holiday allowance is given for 1 (one) of State-Owned Enterprises No: PER-04 / MBU / 2014 time Honorarium. concerning Guidelines for Determining the Income b. Transportation Allowance of Directors, the Board of Commissioners and the Transportation allowance is given at 20% of the Supervisory Board of State-Owned Enterprises as last Honorarium of each Commissioner. amended in the Minister of State-Owned Enterprises c. Post-Service Insurance Regulation Number: PER-01 / MBU / 05/2019 concerning • Post-Service Insurance is given during his the Fourth Amendment to the Regulation of the Minister tenure (from being appointed to ceasing). of State-Owned Enterprises concerning Guidelines for • Premiums borne by the Company are at most Determining the Income of the Directors, the Board of 25% of the Honorarium in one year. Commissioners, and the Supervisory Board of the State- 3. Facilities Owned Enterprises on May 31, 2019 (SOE Ministerial a. Medical facility Regulation concerning the Guidelines for Determining • Health facilities are provided in the form of the Income of Directors). health insurance or reimbursement of medical expenses.

This remuneration policy is determined by considering • Health facilities are given to Commissioners the performance of the Board of Commissioners and along with a wife/husband and a maximum Board of Directors in achieving the Company’s goals, of 3 (three) children who have not reached including objectives related to economic, environmental, the age of 25 years. If the child who is not yet and social topics. 25 years old has been married or has worked then the person concerned is not entitled to

Remuneration Structure of the Board of health facilities. Commissioners • Health facilities provided in the form of: Based on SOE Ministerial Regulation No. PER-04/ >> Outpatient and medication; MBU/2014 concerning Guidelines for Determination of >> Inpatient and medication; and Income of Directors, Commissioners and Supervisory >> Medical check-up. Board of State-Owned The Board of Commissioners • In the case of a treating doctor providing and the Supervisory Board of SOE Enterprises as last referrals for treatment abroad, the provision amended by SOE Ministerial Regulation Number: PER-01 of health facilities can be given in full or in part / MBU / 05/2019 concerning the Fourth Amendment to by taking into account the Company’s financial the ministerial Regulation SOE’s Enterprises regarding capabilities. Guidelines for Determining the Income of Directors, • Medical check-ups are provided with the Board of Commissioners, and Board of Trustees of State- following conditions: Owned Enterprises on May 31, 2019 (Ministerial of SOE >> Medical check-ups are given 1 (one) time Regulation on Guidelines for Determining the Income of each year; Directors), components of the Board of Commissioners’ >> Medical check-ups are carried out income consist of: domestically. 1. Honorarium • In the case of a person serving as a Honorarium for members of the Board of Commissioner of more than one SOEs and/ Commissioners is determined by the composition of or a subsidiary/joint venture, only one health Position Factors as follows: facility is given to the person concerned. b. Legal Assistance Facility • President Commissioner at 45% of the salary of the President Director. The Legal Assistance Facility is provided in the event of an action/ deed occurring for and • Commissioners’ are 90% of the President Commissioners’. on behalf its position related to the aims and objectives and the Company’s business activity. 4. Tantiem Facilities: -ReligiousHolidayAllowance Allowance: Honorarium - LegalAssistanceFacility - HealthcareFacility - TransportationAllowance - Post-ServiceInsurance c. b. a. Performance bonus/incentives Board ofCommissoners Remunea dvlpet gn t b dtrie b the by determined be to agent development a as tasks of implementation the of achievement the for criteria the consider must and concerned year the in KPI the of achievements the on based proportionally given is Tantiem/IK of granting The and Budget. Plan Work the in stipulated budget Tantiem/IK the exceed not must Tantiem/IK of granting the that so year, that of Budget and Plan Work the in specifically budgeted be must therefore and year fiscal related the of cost the is Tantiem/IK • • • • ratification oftheAnnualReportif: the in GMS/Minister the of determination the on (Tantiem/IK) to the Board of Commissioners based incentives bonuses/performance of granting The Component of Directors’control. Board the outside factors account into take not the previous condition at a profit. The loss does from loss a at not is Company the or loss, a at company the for year previous the than worse getting not is Company the of condition The Achievement ofKPIsaslow80%; a with value of70; level health lowest the of Realization with Exceptions; Fair least at are auditors by issued Opinions 45% of the President Director’s Tantiem 45% ofthePresidentDirector’s Tantiem relating totheintentandpurpose andbusinessactivitiesoftheCompany. Granted intheeventofdeeds/actions occurringforandonbehalfofhisposition 20% ofHonorariumeachmembertheBoardCommissioners The premiumpaidbytheCompanyisatmost25%ofHonorarium within1year Honorarium 45% ofthePresident Director’s - - or hasworkedthentheperson concernedisnotentitledtohealthfacilities. with theprovisionofifchild whoisnotyet25yearsoldhasbeenmarried husband andamaximumof3(three)childrenwhohavenot reached25years Provided tomembersoftheBoardCommissionersalong withawife/ Provided intheformofhealthinsuranceormedicationreimbursement President Commissioner tion Structurein2019 Sustainability Report2019PTPerusahaanGasNegaraTbk on May31,2019. R-120/C00000/2019-S0 No. (Persero) Pertamina PT of and PT Perusahaan Gas Negara Tbk., in 2019, and Letter the of Directors and Commissioners of PT Pertamina (Persero) Determination Remuneration of Submission concerning No. 2019 31, SOE May on of SR-466/MBU/D3/05/2019 Minister the to reference with 2019, 31, May on 32/D-KOM/2019 No. Company the of Director President the to Letter Commissioner’s and President 2019 the 26, April 2018 Year Fiscal for GMS Annual the of Resolution the on based out carried been has Commissioner each to remuneration of granting The d. of LongTermIncentives(LTI). In Tantiem, additional terms can be given in the form 1xHonorarium • • determined asfollows: is Tantiem/IK of amount the of composition The • • • • • elements: following the containing by separately, Minister Provision omsinr ae 0 o Tnim of Tantiem of President Commissioner. 90% are Commissioners President Director; of Tantiem of 45% at Commissioner President Government assignments. Financial independence and value creation; Integrated regional economic development; Downstream andlocalcontent; Synergy amongst SOEs; 90% of the President Commissioner’s Tantiem Honorarium 90% ofthePresidentCommissioner’s

Commissioner 157

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Actual Remuneration for the Board of Commissioners in 2019 (Rp)

Description President Commissioner Commissioner Honorarium 1,431,000,000 6,006,622,500 Allowance (nett): - Religious Holiday Allowance 119,250,000 536,625,000 - Post-Service Insurance 357,750,000 1,372,199,879 - Transportation Allowance 286,200,000 1,204,786,597 TOTAL 2,194,200,000 9,120,233,976 Tantiem for 2018 Fiscal Year 9,033,708,270 25,288,224,684 Other Facilities at cost as PER-04/MBU/2014 jo. PER-01/MBU/06/2017 jo. PER-06/MBU/06/2018 jo PER-01/MBU/05/2019

Remuneration Structure of Directors received in the previous financial year, then the [GRI 102-38] [GRI 102-39] salary of the existing Directors uses the salary Based on the Regulation of the Minister of State-Owned received in the previous financial year. Enterprises No: PER-04 / MBU / 2014 concerning d. GMS/Minister of State-Owned Enterprises can Guidelines for Determining the Income of Directors, the determine the amount of Position Factor that is Board of Commissioners and the Supervisory Board different from the provisions referred to in letter of State-Owned Enterprises as last amended in the b, if it can better reflect the appropriateness Regulation of the Minister of State-Owned Enterprises and fairness in carrying out the duties and No: PER 01 / MBU / 05 / 2019 concerning the Fourth responsibilities of each Director and the ability of Amendment to the Regulation of the Minister of the Company. State-Owned Enterprises concerning Guidelines for 2. Directors’ Allowances Determining the Income of the Directors, the Board a. Religious Holiday Allowance of Commissioners, and the Supervisory Board of the Religious holiday allowance is given for 1 (one) State-Owned Enterprises dated May 31, 2019 (the salary. Minister of SOE Regulation concerning the Guidelines for b. Housing Allowances Determining the Income of the Directors), the principle of Housing allowances, including utility costs, are determining the income of the Directors is determined given monthly at a rate of 40% of Salary, with the by the GMS. Components of Directors’ income consist of: maximum provisions of: 1. Salary • Rp27,500,000 (twenty-seven million five a. Salary of the President Director is determined hundred thousand rupiah) for the State Capital using internal guidelines established by the region. Minister of State-Owned Enterprises. • Rp25,000,000 (twenty-five million rupiah) for b. The salaries of other members of the Board of the Provincial Capital Region. Directors are determined by the composition • Rp22,500,000 (twenty-two million five hundred position factor as follow: thousand rupiah) for the Regency and City • Director in charge of human resources: 90% of areas. the salary of the President Director ; c. Post-Service Insurance • Other members of the Board of Directors : • Post-Service Insurance is given during his 85% of the salary of President Directors tenure (from being appointed to stopping). c. For existing Directors, in case based on the • Premiums borne by the Company are at most Position Factor composition as referred to in letter 25% of salary in one year. b, the salary received will be less than the salary 3. b. a. Facilities • • • • • • Medical facility • • • • • Vehicle Facilities insurance. death and accident for insurance, premiums including post-service for terms relevant other or contributions premiums, Providing determined byeachDirector. Program selection for post-service insurance is >> >> conditions: Medical check-up is provided with the following well asmedicalcheck-ups. as medication and inpatient medication, and outpatient of form the in provided Facilities regulations. applicable with accordance in the years 25 of age reached not have who 3 children of (three) maximum a and wife/husband a with along Directors to given are facilities Health costs (atcost). health of insurance or reimbursement of medical form the in provided are facilities Health are notprovidedfromtheSOEconcerned. allowances and vehicle relevant the then any), (if venture subsidiary/joint the of Facilities/Transportation Allowances Vehicle the use to chooses concerned person the and venture, concurrently Director subsidiary/joint a a of commissioner a as serves that event the In relevant SOE. the to vehicle the return must he serving, not after days in (thirty) 30 than longer later no then office, no is Director a that event the In regulated bytheBoardofCommissioners. are ofvehicles types and specifications The to theCompany’sfinancialcondition. operational costs are provided with due and regard maintenance including facilities Vehicle Facility fromtheCompany. Vehicle (one) 1 to entitled only are Directors eia cekus r crid out, carried are domestically. check-ups Medical time (one) every year; 1 given is check-up Medical Sustainability Report2019PTPerusahaanGasNegaraTbk d. c. • • • • of / Minister in the ratification of the Annual Board Report if: the of GMS the of determination members the on based Directors to IK) / (bonuses incentives performance / bonuses of granting The Tantiem /Performance Incentives • • Legal Assistance Facility • no con fcos usd te or of Directors’ control. Board the outside factors account into not take does loss The profit. previous the fromloss a at not is company the or loss, a at worse than the previous year for the company getting not is company the of condition the control; Directors of Board factors external account into take not does achievement This percent). (eighty 80% of lowest the is achievement KPI to theactionsofpreviousDirectors; due profit / burden the account into take not does achievement This (seventy). 70 of value a with health of level lowest the of realization With Exceptions(WDP); Fair least at are auditor the by issued opinions sufficiently stampedpaper. on statement a make to required are Assistance Facility, Legal the use will who Directors activities. business Company’s the and objectives and aims the to related position his and of behalf for on occurring action/deed an of event the in provided are Facilities Assistance Legal Health Facility. of one Board given only is concerned person the the then of venture, subsidiary/joint a member of Commissioners a as concurrently serves Director the that event the In 159

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Directors Remuneration Structure in 2019

Component Provision President Director Director of HC & General Affairs Other Directors Salary Rp 265,000,000 90% of the President Director’s 85% of the President Salary Director’s Salary Allowance: - Religious Holiday Allowance 1x Salary - Post-Service Insurance The premium paid by the Company is at most 25% of salary within 1 year - Transportation Allowance Rp27,500,000 Facilities: - Transportation Facility - 1 (one) vehicle unit along with maintenance costs and operational costs, by considering the Company‘s financial condition - Healthcare Facility - Provided in the form of health insurance or medication reimbursement - Provided to members of the Board of Directors along with a wife/husband and a maximum of 3 (three) children who have not reached 25 years with the provision of if the child who is not yet 25 years old has been married or has worked then the person concerned is not entitled to health facilities. - Legal Assistance Granted in the event of deeds/actions occurring for and on behalf of his position relating Facility to the intent and purpose and business activities of the Company. Tantiem 100% 90% of the President Director’s 85% of the President Tantiem Director’s Tantiem

Actual Remuneration for Directors in 2019 (Rp)

Description President Director Directors Salary 3,180,000,000 12,765,491,667 Allowance (nett): - Religious Holiday Allowance 265,000,000 1,139,500,000 - Post-Service Insurance 795,000,000 2,993,802,756 - Transportation Allowance 330,000,000 1,539,083,333 TOTAL 4,570,000,000 18,437,877,756 Tantiem for 2018 Fiscal Year 15,610,015,238 53,074,051,808 Other Facilities at cost as PER-04 jo. PER-01/MBU/06/2017 jo. PER-06/MBU/06/2018 jo PER-01/MBU/05/2019 d. c. b. a. Board ofCommissionersisasfollows: the of remuneration the determining for procedure The Boards. Supervisory SOE and Commissioners, of Directors, Income the Determining for PER-04/MBU/2014 Guidelines No. concerning Regulation Ministerial SOE to Amendment Fourth the concerning PER- No. 01/MBU/05/2019 Regulation Ministerial SOE by amended last as Enterprises, State-Owned of Board for Supervisory Commissioners and Directors, of Guidelines Income the concerning Determining PER-04/MBU/2014 Regulation of Ministerial Board No. SOE the to refers for Commissioners remuneration of Determination [GRI 102-36] Process forDeterminingRemuneration of theNominationandRemunerationCommittee. The Board of Commissioners discussed the proposal remuneration forDirectorsandCommissioners. Committee Remuneration submits to the Board of and Commissioners the proposed Nomination The for recommendations Directors andCommissioners. remuneration Committee and Remuneration prepares and Directors Nomination The for review Commissioners. remuneration a Committee Remuneration requests an independent consultant to conduct and Nomination The Sustainability Report2019PTPerusahaanGasNegaraTbk GMS toobtainshareholderapproval.. and Commissioners of Directors. The remuneration proposal is submitted at Board the the the of determined and remuneration approval gave also GMS) the at (represented stakeholders the remuneration, setting In Stakeholder InvolvementinRemuneration dated May31,2019. 2019-S0 / C00000 / 120 R- Number: (Persero) Pertamina PT of Letter and 2019, PT in Tbk and Negara Gas (Persero) Perusahaan Board Pertamina and PT of Directors Commissioners of of Determination Earnings of Submission concerning 2019 31, May date 05/2019 / D3 / MBU / SR-466 Number: Letter SOE of Minister the to reference with 2019, 31, May date 2019 / D-KOM / 32 Letter to the President Director of the Company Number: Commissioner‘s President the and 2019 26, April 2018 based on the Resolution of the Annual GMS for Fiscal Year implemented been has Directors and Commissioners of Board the of member each to given remuneration The f. e. eemns eueain o Drcos and Directors for Commissioners. remuneration determines shareholder A Series Dwiwarna as Minister SOE The SOE astheDwiwarnaSeriesAshareholder. of Minister the to Commissioners and Directors for The Board of Commissioners proposes remuneration [GRI 102-38] [GRI 102-37] 161

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Important Events

17 January 25 Januari Batam Government and PGN PGN has Reactivates the Cepu Oil Inaugurated Taman Tuah Melayu Batam and Gas Hospital

The inauguration in Taman Tuah Melayu Batam The groundbreaking which marked the is a form of PGN’s social responsibility pillar. In construction of the Hospital was witnessed by addition, the making of this park is included in the local government, and was attended by the PGN’s efforts to support the development of Deputy Minister of Energy and Mineral Resources Batam City. and the Board of Directors of PGN and Pertamina.

The reactivation of the Cepu Oil and Gas Hospital was initiated by a collaboration between Pertamedika IHC and one of PGN’s subsidiaries, namely PT Permata Graha Nusantara (PGN MAS). The presence of PGN MAS and Pertamedika through the Cepu Oil and Gas Hospital is expected to be of great benefit to the Cepu community and its surroundings.

16 February 27 February Strengthening SubHolding Gas, PGN- Completion of Gas Network Bogor, Pertagas Launches The Gas Brand PGN Is Ready to Distribute Gas to Association The Community

Strengthening SubHolding Gas, PGN-Pertagas PT Perusahaan Gas Negara Tbk. (PGN) adding gas launches The Gas Brand Association The Gas is a networks for households and small customers representation of the synergy of PGN and Pertagas (Jargas) for the Bogor, Serang and Cirebon in Sub Holding Gas, which is the sole manager of operational areas, which began in May 2018. The natural gas in the country. As for the continuation addition of Jargas targeting household users is of government policies that are still in the series of expected to increase the use of both safer and BUMN Oil and Gas Holding, on December 28, 2018 cheaper energy. the official process of integration of Pertagas to PGN has officially made PGN as a Sub Holding Gas. Rp. 97.08billion. project reaching investment project total with Resources, a is which Probolinggo, commanded by the Ministry in of Energy and Mineral is which to of one Resources Network, Gas Mineral of construction the the and complete with Energy forces of joining Ministry again once Tbk. has Negara Gas (PGN) Perusahaan PT 2019, early In aoaoy ot ams R 11 ilo and billion Santo ThomasstudentstotalingRp 50million. 1.1 Unika 10 for Rp assistance Scholarship Educational almost Computer worth Thomas Laboratory Santo PGN Unika for activity, assistance this renovation of: form the in In assistance distributed atmosphere. and festive millennial a with participants 3,000 around attended by was activity This Anniversary. SOE’s of Thomas”) is a series of celebrations of the Ministry Santo (“Unika Medan Thomas Santo of University Catholic the of campus the on PGN by organized 2019 23, April on activity Campus to Goes BUMN Unika SantoThomasMedan PGN takes SOE’sGoestoCampusin 23 April Good Energy for theCommunity Network, PGNrepares to Serve Completion ofProbolinggo Gas 5 March Sustainability Report2019PTPerusahaanGasNegaraTbk and gasSOE’s. a as oil PGN holding a as Pertamina PT with of gas subholding steps the harmonize to able be to the appointment of the two officials, it is expected With year. fiscal 2018 for RUPS PGN’s annual the Bapak in PGN of commissioner as ) (Persero Retail Pertamina and PT Directors Marketing PGN Secretary Khamid Strategy development Mas’ud Directors Corporate Business as that and (Persero) as Pertamina Mukhtar PT served Syahrial previously Bapak Appointment ee prtn fr 973 oshls R) in (RT) households 19,753 for operating were services gas household 2016, to 1987 From PGN. or Tbk services Negara Gas Perusahaan gas PT by natural conducted for one locations initial as the listed of is Medan Sumatra. North region, strengthens Medan PGN in services gas of scope the and expands and Resources Mineral and Energy of Ministry the through government The Unika SantoThomasMedan PGN gelarBUMNGoestoCampusdi 23 April Network DistributioninMedan Resources S The MinistryofEnergy andMineral 26 March (GMS) General Meeting ofShareholders 26 April trengthens Gas 163

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28 Mei 31 Mei PGN Poured Rp 250 million for PGN departs 4.070 Homecomers to the Development of Tiara Nirwana Hometown Library School

PGN dispatched 100 bus fleets from nine departure points on 29-31 May 2019. On the PGN gives assistance amount Rp 250 million for first day, departed as much five buses from the interest of library development Tiara Nirwana Cijantung Kopassus Complex. The next day, School that intended for building development, May 30, 2019, the departure of homecoming and providing some equipment such as participants took place at the Bung Karno Stadium tables, chairs, and computers. These efforts as which coincided with the Joint Homecoming investment in civilization and social catalyst for a Program of the Ministry of SOEs. While on the last better life in the future. day, the rest of the buses departed simultaneously from the Cilandak Marine Corps (78 buses), Jakarta Proclamation Park (1 bus), PT Torabika Office (1 bus), Bekasi Area PGN Office (3 buses), and Jakarta MEMR Office Bandung as well as Bandung.

20 June PGN and Krakatau Steel Join Forces in Energy Development 26 June PGN and DPP REI Sign MoU

Both companies are committed to build long-term strategic partnerships, by utilizing their respective competencies. Moreover, this cooperation is in accordance with the vision of developing a country PGN and DPP REI to build a long-term strategic carried by the government through a State-Owned partnership, by utilizing their respective Enterprise (BUMN). competencies. Moreover, this cooperation will create more value for the community in the In short, the MoU contains a mutually beneficial long run. The scope of the cooperation includes business development with scope, especially cooperation in the implementation of the use cooperation in the development and management and construction of the gas network in property of natural gas within the KS Group. Both are also projects belonging to the Indonesian Real willing to cooperate in managing the electricity Estate Company Association (REI). In addition, business through subsidiaries, as well as other the agreement points also contain cooperation potential collaborations. opportunities that utilize the resources owned by each of the respective parties. of supportingthe langitbiru(cleanair)program. goal government’s the with line in are that sports racing bicycle national for especially athletes, treat of and development the towards alignments PGN’s of manifestation tangible a also is support were registered at UCI, one of which was PRCT. This Indonesia from teams three only for achievement entered the Division 3 level. This was a prestigious Continental UCI the Team, an International Bike Race Competition with that registered racing was bicycle professional PRCT national the 2019, In the touring. international and to championship following advance by to level founding the PRCT and 2016 leads of founding beginning done the has from PGN 2019. in (PRCT) Cycling racing Road Team PGN the bicycle of existence for the of through particularly development sports, the support national to remains PGN development. downstream industry in carrying out upstream infrastructure the between the with development field conducting in industry synergy is of form collaboration a also This friendly. environmentally and efficient is that gas natural of utilization the expand the to continue to PGN and to industry upstream Migas the SKK and represent Resources Mineral also and MoU this support and commitment of of the Ministry of Energy signing The of NationalBicycle Racing PGN SupportsRCTandDevelopment 2 A Talisman Sakakemang PGN SignsGasalesMoUwith 12 July gustus Sustainability Report2019PTPerusahaanGasNegaraTbk o et h eeg nes f PIs aua gas natural selling TPPI’s located inTuban,EastJava. of and needs energy buying the the meet gas includes to natural cooperation of sector. HOA distribution of industry scope Perrochemical The the including Indonesia, throughout infrastructure the of manages majority that entity business transmission and distribution gas natural a is subholding, gas a as role its plays currently which PGN, needs. gas of one natural use that segments industrial large five top is industry petrochemical the Currently, natural gas. to serve the community with good energy from toIndonesia in development of agent country an become the of backbone the is which Gas Subholding as PGN of role the symbolizes that diversityof message a has parade cultural This parade. cultural a held PGN anniversary, 54th Energi Baik untuk Indonesia”. In this celebration Menyalurkan theme dan Menyatukan the Henti “Tiada has of title and the PGN Semarak takes Gemilang celebration anniversary This Industry NaturalGasUtilization TPPI Increase GasP etrochemical Collaboration between PGNand 9 A Celebrating the54 18 July Sub-holding inGas PGN F ugust ocuses ontherole of th Anniversary, 165

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23 September 30 September The PGN Journalistic Competition PGN and PTPP Work Together to (KJPGN) 2019 was held to Strengthen Build 500 thousand Household Gas the National Media Industry Networks

Journalistic Competition of PT Perusahaan Gas Negara Tbk 2019 (KJPGN 2019), which is an annual PGN as a subholding gas continues to expand activity of PGN to improve the quality of journalistic the utilization of natural gas, one of which is by products in Indonesia, was held for the sixth time. building household jargas. Through the BUMN PGN’s consistency in holding KJPGN 2019 is part synergy program to develop the country, PGN of the company’s commitment to encourage the and PTPP will build household Jargas in two quality of journalistic products and the press phases. The first phase was 50,000 household industry in Indonesia. connections (SR) and continued by the second phase of 450,000 SR. This year, there are five categories contested which include; Print Hard News Categories, Online Hard News Categories, Feature News Categories, Print Photo Categories, and Online Photo Categories.

9 October 15 October Supporting the Development of Startups PGN establishes a Rubber in the Energy Sector, PGN is Holding the Cooperative in Pagardewa Village 2019 PGN Energy Startup Competition

The cooperatives of PT Perusahaan Gas Negara Through this activity PGN as a gas subholding Tbk (PGN) collaborate with PT Kirana Megatara Tbk seeks to encourage the emergence of startups to absorb the results of rubber plantations in the and technology innovators in the energy sector, Pagardewa Village area, Lubai Ulu District, Muara particularly those related to natural gas and green Enim Regency, South Sumatra. This program energy. The activity that was first held in Indonesia is the first collaboration program in Indonesia took the theme “Renewable Gas and Energy between forested cooperatives CSR companies Innovation”. and producers directly. At the beginning of this collaboration, PGN fostered cooperative called Koperasi Padetra Arto Mulyo sold rubber plantation products directly with a target of 1 ton per month. uies ates wee oaa i a loyal a been is have Kobagas Indonesia customer ofGasku. where Energi partners, Gagas business PT and Kobagas (PGN). Tbk Negara Gas Perusahaan PT of auspices the under Jakarta over all drivers bajaj of collection a is Community Gas Bajaj or Kobagas Region, Jakarta DKI the represented byKobagas. in Drivers to Bajaj given 1,000 was which the Program for BPJS Program Employment Protection a as intended was Employment BPJS for event socialization joint This all stakeholders. to value optimal most the achieve to downstream gas the and LNG business integrate in Indonesia from midstream to and manage and also to government shareholders PGN the from LNG. development mandate to a received related and businesses initiative new of the business. with LNG end-to-end Starting Pertamina the manage by fully assigned to was PGN mid-2019, in Where gas. sub-holding a as role its playing PGN in milestone important an marks agreement This A PGN andSinopecignedLNales 12 November Community (Kobagas) Program for theGas-Powered Bajaj PGN SupportstheBPJS Employment 17 December greement Sustainability Report2019PTPerusahaanGasNegaraTbk Bentu Ltd. (EMP) Persada Mega Energi PT from utilizes source gas contractor, (Persero) Karya Hutama PT the by 2019 May in built was which network, gas with community the electricity consumption of 1300 of watts. The Dumai level the to equivalent or category 2 RT the being customer of type the with Mukti, Jaya Kelurahan in houses 3,460 and 4743 serve Binjai Teluk Kelurahan in houses 1283 consisting will villages, two 2019 covering (SR) Connections in Housing network gas Dumai od nry w wloe vrbd, including the disabledtojoinandgrowwith PGN. everybody, welcome we energy, good of spirit the With PGN. with future their and building ability in opportunity equal the to entitled has is competencies who employee commitment. PGN all this Every out invites carry PGN to employees Therefore, PGN sectors. various energy good to Subholding, our channel Gas to committed as is PGN operation its Throughout Households CanHave NaturalGas Completed, 4,743 Connections Dumai CityGasNetwork hasbeen 20 November PGN withHRPeopleDisabilities 20 Desember 167

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Awards and Certifications

Awards

In 2019, PGN and Subsidiaries, as well as Affiliate, managed to obtain several awards from national and international with the following details:

4 February 2019 (PGN) 27 March 2019 (PGN) Pertamina EP Consumer Awards Top IT & TOP Telco Award 2019

Top IT & TOP Telco is the highest award in Indonesia given PT Perusahaan Gas Negara Tbk obtain award from to companies, government agencies, and IT Telco vendors, PT Pertamina EP as The Best Gas Customer 2018 Platinum who are considered successful in terms of utilizing IT & Award in the evening’s event appreciation achievement telco to improve performance, business competitiveness, of lifting oil and gas 2018. The award is received directly and services in Indonesia by the Commercial Director PGN’S, Danny Parditya in Intercontinental Hotel, Bandung , West Java. PGN successfully won the title of Top Digital Innovation Gas Distribution Services from 100 finalists who were good participants from the business community including BUMN, BUMD, central / regional government agencies, and others.

11 April 2019 (PGN) 22 April 2019 (PGN Group) HR Excellence Award 2019 2013 National K3 Award

PGN received the HR Excellence Award Charter from In the 2019 National K3 award event organized by the the Management Institute of the Faculty of Economics, Ministry of Manpower, PGN successfully received a University of Indonesia, SWA magazine and Bank Mandiri P2HIV award in the Platinum category. In addition, PGN as the best company for creative HR management in also received Zero Incident Award for PGN Head Office, several categories on April 10, 2019. PGN won awards in GDMR III, GTM, and PMO. Several PGN Group companies the categories of Learning & Development Strategy, HR also received Zero Incident Award obtained by PT PGAS Transformation and HR Technology. Solution, PT PGAS Telekomunikasi Nusantara, PT Gagas Energi Indonesia, PT Nusantara Regas, and PT Permata Graha Nusantara.

11 June 2019 (PGN) Business News Awards

From around 400 BUMN, BUMD , private company national and governances / institutions assessed in Business News Award in 2019, PGN success obtained two awards namely The Best Growth Strategy in Energy Industry and The Best Human Capital Management in Energy Industry. o e be o ec mr mres n cmuiis in communities Indonesia throughvariousinitiativesand innovations. and markets more infrastructures reach to gas able be natural to various build to continues PGN environment. corporate the in always innovations prioritize commitment to century PGN’s a half than of more for embodiment consistency and an is award This from the2019IDXChannelInnovation Awards. award Sector in Transportation and Company Utilities, Infrastructure, Innovative Most the won PGN role, its carrying out in Indonesia, in gas natural of subholding a As IDX A 14 A Reporting S A 16 July 2019(PGN) LA 24 Juli2019(PGN) ward for thePerformance oftheBestHumanRights(HAM)F CP A ugust 2019(PGN) ward ward tandards (FIHRRST) Sustainability Report2019PTPerusahaanGasNegaraTbk capitalization aspects. market and liquidity large had that selected were companies public period February to July 2018. Out of the total of 615 companies, 100 on listed the during Exchange companies Stock Indonesia the on 100 Indes Kompas the public 615 by attended was itself study The for Foundation the onlyState-OwnedEnterprisetoentertopfivepositions. the from is PGN performance (FIHRRST). Standards Reporting Rights Human International rights human best with companies award-winning the five top was the of PGN list 2019, the in In included achievement. brilliant seized again once PGN Morgan Chaseandothers. JP Motor, Ford Chevron, Mobil, Exxon Walmart, as such companies international other various by attended also was competition The Top 50ReportsAsia. 10 and Region, Top Pacific Asia Worldwide, Report Improved Most Report Indonesia, Reports Improved Most as, awards won PGN not thefirsttimeandisarepeatofachievementforPGN. is award This world. the around from advantages have that reports of international recognition and appreciation for quality and annual form a are Awards Vision 2018 Competition, Report Annual LACP’s Risk &ComplianceSummit. PGN’s Governance Top 2019 Stars. the at 2019 Leaders GRC Committed 4 # 2019 GRC Most the named also an was Prakoso TOP Gigih Director, Managing as award by an won out PGN carried is assessment The independent teamwhichrunsfromFebruary toJuly2019. Indonesia. in Through Integrated GRC. This event involved 500 companies Sustaining of theme the carries Award 2019 GRC TOP The oundation for InternationalHumanRights Top Governance Risk&ComplianceSummit2019 22 A ugust 2019(PGN) 169

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11 September 2019 (PGN) 14 October 2019 (PGN) The Best Contact Center IICD Award

The Best Contact Center Indonesia is an annual event PGN successfully won the title of Top 50 Big Capitalization held by the Indonesia Contact Center Association (ICCA). Public Listed Company in IICD Award 2019. The IICD The competition, which was held this year, was attended Corporate Governance Conference & Award 2019 held by approximately 400 participants consisting of 50 by the Indonesian Institute for Corporate Directorship organizations that are state institutions, state-owned (IICD) was held with the theme Empowering BOC and Its enterprises (BUMN), banks, insurance and financial Committees to Ensure GCG Implementation. services, e-commerce, and retail companies. Assessments are based, inter alia, on Annual Reports, The four categories achieved by PGN in the event included the company’s website, press releases/company The Best Operation Contact Center, The Best IT Support announcements, shareholder meeting notices, shareholder Team Work, The Best Agent Back Office, and The Best of meeting decisions, minutes of shareholder meetings, the Best Agent Back Office. In the event held once a year, Guidelines / Charter of the Board of Commissioners and PGN won 1 platinum, 2 silver and 2 bronze awards. Directors, Code of Conduct / Ethics, CSR / Sustainability Report , English language media coverage, as well as from other public information that is easily accessible.

17 October 2019 (PGN Group) ARC Awards International XXXIII

PGN through its subsidiary, PT PGN LNG Indonesia and PT PGAS Solution won 4 ARC Awards International XXXIII awards. In this event PGN LNG Indonesia won 3 awards for the Non Traditional Annual Report, Illustration and Printing categories and production for the Energy Infrastructure class, and successfully won the Grand Winner as Best of Indonesia. While PGAS Solution won 1 Gold Winner award for the category of Traditional Annual Report, in the field of energy construction.

The ARC Awards International XXXIII is an award organized by Mercomm, Inc., United States, to honor overall excellence in annual reports and to foster important and vital writing, as well as imaginative design. PGN was selected for a number of categories from 2,100 participants from 34 countries with various business backgrounds who participated in this event.

19 October 2019 (PGN) Stevie Awards

The Stevie Awards are a series of hundreds of business awards given annually by the American Business Awards organization aimed at recognizing and contributing world companies, particularly in the Asia Pacific region.

In 2008 PGN won two categories from Human Resources (HR) or Human Capital Management (HCM) and Annual Report. This year, PGN won a Bronze Stevie Winner in the category of Best Annual Report - Publicly-Held Corporations. Indonesia willbeexpanded. in cities various in network gas the of presence the that the hoped and is it response, positive this With community. wider customers with interaction communication of form new a become has Synergy, PGN of pack starter the customers. The approach taken through social media and to services improved providing in to PGN, by made changes response positive and appreciation an is award This this for PGN,whichhasnowbecomeSub-HoldingGas. get pride of matter to a is achievement this managed award, prestigious who Indonesia from participant only the category As category. Packaging - Campaign Design the in Gold Branding and in Social Platinum - Media category, Social Marketing the Digital - Promotion / Marketing the in Platinum namely Award, MarCom the in awards 3 won Tbk Negara Gas Perusahaan PT. 2019, In hc apeit fr noain n te company’s the company’sbusinessprocesses. the and running in aspects environmental innovation and social for concern Award for Friendly appreciate Environmental Top which the won has PGN their interactionswithconsumers. in technology of use the in intense increasingly are and transformations and adaptations make to able are that BUMNs to appreciation of form a is 2019 AWARD BUMN Marcom A 11 November 2019(PGN) BUMN A 28 October2019(PGN) ward wards Sustainability Report2019PTPerusahaanGasNegaraTbk in integratedpoliciesandprograms. real positive impact on society, and this goal is manifested 26000 and points on SGD’s. PGN is committed to having a application is in accordance with the 7 Core Subject of ISO event the where this nature sustainable a of in are that programs are PGN by displayed are that programs The Business Utilities & CSR Sustainability: StrategicSustainability. Project-Based Infrastructure, and Transportation & Performance: Sustainability Overall on Based Governance, Organizational Guidance): (CSR 26000 ISO on Based namely, award, this in PGN by obtained awards The Awards. Sustainability CECT the 2019 from award an received PGN of programs CSR The and marketing. branding of field the in innovation through market global the in competing and company top-performing a becoming in succeeded has PGN that proves award This (Corporate Dilo SenoWidagdo,CommercialDirectorofPGN. Strategy Competition Marketing) of Creative a Subsidiary. and The Best CMO Subsidiary - Best Tbk, BUMN, of Company Subsidiary a of Indicator Best Global The namely, once, at awards three won successfully PGN with thetheme“BeyondInnovation”. was Award Marketing organized And by BUMN Track supported Branding by Arrbey Consulting BUMN 2019 The BUMN randingandMarketing A 6 November 2019(PGN) CECT SustainabilityAwards 2019 13 November 2019(PGN) ward 171

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18 November 2019 (PGN) Anugerah Perusahaan Tbk

PGN once again won an award for its performance as a Tbk company in Indonesia in the 2019 Corporate Award event.

This award covers 555 public companies in 9 industry sectors which are listed on the Indonesia Stock Exchange as public companies, in which 18 best companies have been selected with assessment criteria based on 10 categories covering the Financial sector, Risk Management, Corporate Governance, Human Resources, Marketing, Technology Information, Corporate Social Responsibility, Operations, Corporate Communications, and CEO.

27 November 2019 (PGN Group) Penganugerahan Penghargaan Keselamatan Migas

For their achievements in implementing a healthy, safe, safe and environmentally friendly work environment, PGN received an appreciation from the Director General of Oil and Gas at the Ministry of Energy and Mineral Resources in the form of the 2019 Oil and Gas Safety Award. “Management of Oil and Gas Safety”.

PGN received these following awards:

1. Regional Gas Distribution Management I won a Patra Karya and Adinugraha Award 2. Gas Transportation Management, Regional II & III Gas Distribution Management won the Main Works Award 3. The Project Management Office received an Intermediate Award 4. The Jargas Service Unit received the Primary Work Award

While PGN’s Subsidiaries received these following awards:

1. PT Pertagas won the Patra Karya Award for Pertagas in the Eastern Region, the Adinugraha Award for Pertagas in the Eastern Region, the Main Works Award for the Pertagas in the West Region, and the Main Work Award for Pertamina Gas Project Management. 2. PT Transportasi Gas Indonesia (TGI) won the Adinugraha Award 3. PT Kalimantan Jawa Gas (KJG) won the Main Works Award 4. PT Perta Arun Gas, PT Perta Samtan Gas & Saka Indonesia Pangkah Ltd. won an Intermediate Award 5. PT Gagas Energi Indonesia won the Pratama Karya Award

29 November 2019 (PGN) Top Digital Award

The TOP DIGITAL Awards 2019 is an award held in collaboration with a number of associations in the field of information technology and independent IT consultants and involving more than 500 companies and government agencies.

With the theme of Digital Transformation for National Economic Competitiveness, PGN received 3 titles at once namely, Top Digital Implementation on Energy and Mining Sector 2019, Top Leader on Digital Implementation 2019 (Mr. Gigih Prakoso - President Director), IT Manager on Digital Implementation 2019 (Bp M. Irwan Santoso - Group Head of ICT). eotn (CR i claoain ih h Isiue of Institute the Certified SustainabilityPractitioners(ICSP). with Sustainability collaboration for in Center (NCSR) National Reporting the by held Awards PGN won Platinum award in the 2018 Sustainability Report PROPE (Environment ManagementPerformance AssessmentandRatingProgram) Year 2018-2019 16 Desember2019(PGNGroup) Sustainability ReportAwards 2018 8 Desember2019(PGN) Sustainability Report2019PTPerusahaanGasNegaraTbk Eastern JavaArea. Pertagas namely PROPER), other of rating highest (the 3 PROPER Gold the for won PGN of PROPER subsidiary a addition, Blue In locations. and of Station Pagardewa Minister for the PROPER Green a of received PGN 12/2019, / PKL.4 / SETJEN Decree / MENLHK / 1049 SK the Number Forestry and Environment with accordance In rm h Cruto Eaiain Commission received thesameawardin2018. SOE also 2019 PGN Eradication Previously, the Award. LHKPN awarded Implementation was PGN Corruption time, This (KPK). the again from was (LHKPN) Report (PGN) Asset Organizers State Tbk the awarded Negara Gas Perusahaan PT LHKPN from KPKA 10 December2019(PGN) wards 173

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certification

ISO 27001: 2013 Information Security ISO 9001:2015 Quality Management System Management System Lloyd’s Register BSI

ISO 14001: 2015 Environmental Management OHSAS 18001: 2007 OHS Management System System Lloyd’s Register Lloyd’s Register of Indonesia Minister ofManpowertheRepublic Management S Occupational Safety andHealth Chief ofPoliceForce oftheRepublicIndonesia Security Management ystem ystem Sustainability Report2019PTPerusahaanGasNegaraTbk 175

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About this Report

The commitment of PGN to implementing the principles of sustainability is represented by our consistency in launching the sustainability reports for 11 consecutive years. Sustainability Report2019PTPerusahaanGasNegaraTbk 177

About the Governance Maintaining the Maintaining Maintaining the Maintaining Maintain Sustainable Maintaining Maintain Remarks Report Sustainability Customer Health and Occupational Health Quality of Pgn Prosperity of Environment the National Sustainability Safety and Safety Employees the Country Economy 178 PT Perusahaan Gas Negara Tbk Sustainability Report 2019

Our Sustainability Report is part of the responsibilities of PGN to stakeholders and has been a medium to put our performance on display regarding economic, environmental, and social matters. restatement of the information or the data given in the the previous report. [GRI 102-10] in given data the or information the of restatement significant any no are There changes. significant other or chain, supply the structure, the Company: the in changes the material topics within and topic boundaries from the preceding report nor changes significant no were There on April2019. published was report previous The 39. to 38 page the on The entity. parent contains business units of subsidiariesandaffiliates arepresented is chapter other in data while subsidiaries, with data consolidated a is Economy National the Maintainaing chapter in contained that data Financial 20. page on presented that subsidiaries its and 31 1 January period and for data information of contains report sustainability annual This CYCLE PERIOD, SCOPE,ANDREOR the publicinbuildingPGNupasasustainableenterprise. from support some get to wish we Thus, transparently. to the environment and society is showcased to the public, stakeholders and for the Company itself. Our commitment for imperative but addition, decorative a not is report this public attention to sustainability reporting. We believe that brought has PGN since years consecutive 11 been has It th 09 icuig utiaiiy efrac o PGN of performance sustainability including 2019, [GRI 102-50]102-51]102-52] Sustainability Identification Context STEP 1 Sustainability Context RI 102-48][G102-49] st 09 ni December until 2019 S takeholder Inclusiveness Prioritization T Materiality STEP 4 Review STEP 2 Sustainability Report2019PTPerusahaanGasNegaraTbk on page197. written with index complete and section relevant each in option disclosures with Comprehensive compliance in Standards: prepared GRI been has report This T DEFINING REPOR statement onpage184. a providing account into (NCSR) Reporting Sustainability for Center National the take we standards, GRI meeting to As Secretary. Corporate the by represented Directors of Board the of approval the through chosen was who Rowland, Moores assurer, independent an of the services harness we report, the of credibility the up set To [GRI 102-45]102-56] EXTERNAL ASSURANC 4. 3. 2. 1. the Reportbyapplyingfollowing4(four)grades: of contents the determining of process the perform We S OPIC BOUNDARIES takeholder Inclusiveness the nextyear’sReport. of quality the upgrade to order in publication Report after the of review a Conducting Phase: Review Validation Stage:Validatingmaterialaspects. identified intheaforesaidstep. been have that details the Prioritising Stage: Priority aspects along withtheirlimitations. material Identifying Stage: Identification Completeness Validation [GRI 102-54] STEP 3 T CONTEAND [GRI 102-46] 179

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In organising the report, we conform to four principles of VALIDATION. We set the seal on the manner of us having sustainability reporting, that is: scrutinised the scope, boundary, and time aspects of (1) Stakeholder Inclusiveness; the sustainability topics by implementing the principle (2) Sustainability Context; of completeness. (3) Materiality; and (4) Completeness. REVIEW. By involving the stakeholders, we ensure that the contents of the report are suited to the expectations IDENTIFICATION. In this stage, we choose issues related and equitable interests of the stakeholders. We use a to the context of sustainability, that is economics, questionnaire to get input from stakeholders. environment, and social-affairs. DETERMINING MATERIALITY PRIORITY. By means of a materiality test, we initiate LEVEL significant sustainability issues and topics which In arranging the report, we have looked over the topics predispose stakeholder assessments and decisions. relevant to our stakeholders, specifically those who influence or are significantly affected by PGN’s operational activities. To obtain input, we surveyed our various stakeholders and the results were then developed in a materiality distribution chart as follows:

Economic Performance

Employee’s Welfare

High Waste Occupational Management Health and Safety

Pipe Use Anti- Energy Corruption Consumption Indirect Economic Impacts

Customer Anti Business Convenience Competition

Assistance to the Greenhouse Gas Community Emission Medium Reduction Water Consumption

Basic Human Local Rights Procurement Practices Low

Low Medium High Important for stakeholders for Important

Important for Company PERSONAL CONTACT pivotal topics,theboundaries,anddisclosuresinGRIStandardsasfollows: the on focussed content report the determining of process whole the approach, aforementioned the of basis the On MATERIAL T ih die oiin, rtcss o iqiis vr the over sustainability reportto: inquiries or criticisms, opinions, advice, with to year up come from to stakeholders all and reports readers invite we year, our of quality the enhance To Marketing andLabelling Safety Customer Healthand Security Practices Non-Discrimination Diversity andEquality Training andEducation and Safety Occupational Health Employment SOCIAL Environmental Compliance Waste Emission Water Energy Material ENVIRONMENT Anti-Corruption Procurement Practices Indirect EconomicImpacts Market Presence Economic Performance ECONOMY Material Topics [GRI 102-47] OPICS LIT Customer Customer and regulations Compliance withlaws Employee andsociety Employee andsociety Employee Employee and regulations Compliance withlaws Sustainability Sustainability Sustainability Sustainability Sustainability Sustainability Development Development Stakeholders Stakeholders Stakeholders Significantly affectto: Reasons theTopicis [GRI 102-53] [GRI 103-1] Material 417-1, 417-2,417-3 416-1, 416-2 410-1 406-1 405-1, 405-2 404-1, 404-2,404-3 403-4 403-1, 403-2,403-3, 401-1, 401-2,401-3 307-1 306-1, 306-2 305-7 305-4, 305-5,305-6, 305-1, 305-2,305-3, 303-1, 303-2,303-3 302-4, 302-5 302-1, 302-2,302-3, 301-1, 301-2,301-3 205-1, 205-2,205-3 204-1 203-1, 203-2 202-1, 202-2 201-4 201-1, 201-2,201-3, Sustainability Report2019PTPerusahaanGasNegaraTbk www.pgn.co.id E. [email protected] T. 1500645 Contact Center T +62216334838,F638 54917 Jakarta, 11140,Indonesia Jl. K.H.ZainulArifinNo.20 PT PerusahaanGasNegaraTbk Corporate Secretary Disclosure Number PGN √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ Boundaries Outside PGN √ √ √ √ √ 181

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Independent Assurance Statement Report No. 0320/BD/0008/JK

To the management of PT Perusahaan Gas Negara, Tbk 2) assessment of the accuracy and quality of the specified sustainability performance information We were engaged by PT Perusahaan Gas Negara, Tbk contained within the Report, in relation to the (‘PGN’) to provide assurance in respect to its agreed scope, which consisted of: Sustainability Report 2019 (‘the Report’). The assurance  Partnership and community stewardship program engagement was carried out by our highly experienced  Occupational health and safety assurance team whose diverse and complementary skills  Environmental management ensure a high level of competence in carrying out their  Human resources development. duties. Responsibility Independence PGN is responsible for the preparation of the Report We carried out all assurance undertakings with and all information and claims therein, which include independence and autonomy having not been involved established sustainability management targets, in the preparation of any key part of the Report. Nor did performance management, data collection, etc. In we provide any services to PGN during 2019 that could performing this engagement, meanwhile, our conflict with the independence of the assurance responsibility to the management of PGN is solely for engagement. the purpose of verifying the statements it has made in relation to its sustainability performance, specifically as Assurance Standards described in the agreed scope, and expressing our opinion on the conclusions reached. Our work was carried out in accordance with ISAE3000 ‘Assurance Engagements other than Audits or Reviews Methodology of Historical Financial Information’ issued by the International Auditing and Accounting Standards Board. In order to assess the veracity of certain assertions and In addition, the work was also planned and carried out specified data sets included within the report, as well as to conform to AA1000AS (2008) ‘AA1000 Assurance the systems and processes used to manage and report Standards (2008)’, issued by AccountAbility. them, the following methods were employed during the engagement process: Level of assurance and criteria used  Review of report, internal policies, documentation, management and information systems By designing our evidence-gathering procedures to  Interview of relevant staff involved in obtain a limited level of assurance based on ISAE3000 sustainability-related management and reporting and a moderate level of assurance engagement as set out  Following data trails to the initial aggregated in AA1000AS (2008) readers of the report can be source, to check samples of data to a greater depth. confident that all risks or errors have been reduced to a very low level, although not necessarily to zero. Limitations Moreover, the Report was also evaluated in accordance with the criteria of AA1000 AccountAbility Principles Our scope of work was limited to a review of the (2018) of Inclusivity, Materiality, Responsiveness and accuracy and reliability of specified data and interviews Impact. with data providers, persons in charge of data collection and processing, as well as persons in charge Scope of Assurance of sustainability performance-related information.

We provided a Type 2 assurance engagement under AA1000AS (2008) This involved: 1) assessment of PGN’s adherence to the AA1000 AccountAbility Principles (2018); and

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

Sustainability Report 2019 PT Perusahaan Gas Negara Tbk 183

  Remarks Conclusions PGN's allocation of resources to stakeholder engagement, the timeliness and accessibility of Conclusions in regard to adherence to the AA1000 reported information, and the types of AccountAbility Principles of Inclusivity, Materiality, communication mechanisms regularly employed Responsiveness and Impact include the following were all indicative of its responsiveness to key Maintain findings: stakeholder concerns and expectations. As in other Sustainability areas, however, vigilance is a key and we . Inclusivity recommend that PGN conducts regular monitoring An assessment was made on whether PGN has and improves stakeholder engagement procedures included all key stakeholders in developing and where necessary in future reports. achieving an accountable and strategic response to Economy Maintaining sustainability issues. . Impact the National An assessment was made on whether PGN has Demonstration of PGN’s strong commitment to monitored, measured and is accountable for how its stakeholder inclusivity included the conduct of actions affect their broader ecosystems. needs assessment surveys and materiality level survey of the key stakeholder groups. Thus our PGN has integrated identified impacts into key overall assessment was that PGN has set in place an management processes, for example, the materiality Environment effective system that enables key stakeholders to assessment process and organisational strategy,

participate in the development of the organization's governance, goal-setting and operations. Maintain Sustainable response in the context of sustainability. In order to strengthen the effectiveness of assessment In order to maintain and strengthen the effectiveness and disclosure of impacts, however, we recommend of this inclusivity, however, we recommend that that PGN provides the necessary competencies and the Country Maintaining

PGN carries out regular monitoring of its systems resources to measure, evaluate and manage the Prosperity of and procedures, plus implements improvements impacts and conducts regular monitoring of its where necessary. systems and procedures, plus implements improvements where necessary. . Materiality

With stakeholders requiring material information on Based on our limited assurance engagement, nothing Employees

which to base their informed judgments, decisions has come to our attention that causes us to believe the Quality of Pg n Maintaining the and actions, an assessment was carried out to data of the Report has been materially misstated. determine the extent to which PGN has included such information in the Report. All key assurance findings are included herein, while detailed observations and follow-up recommendations and Safety

PGN’s strong commitment to meet stakeholder have been submitted to PGN management in a separate Maintaining needs in this field was evidenced by the provision of report. adequately reported and balanced information on key material issues. Nevertheless, as demands for Jakarta, March 30, 2020 Occupational Health information continue to increase, we recommend that PGN conducts materiality tests on a regular

basis for inclusion in future reports. Safety James Kallman . Responsiveness Chief Executive Officer

It is increasingly important to respond in meeting Maintaining the stakeholder expectations and an assessment was Moores Rowland is an international organization specializing in audit, accounting, tax, legal and advisory Customer Health and carried out to determine the degree to which PGN services. Moores Rowland is a member of Praxity AISBL, demonstrates its accountability in this area. the world's largest Alliance of independent and unaffiliated audit and consultancy companies. Praxity is served by Moores Rowland in Indonesia, one of the

leading sustainability assurance providers. G overnance Sustainability

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

Report

About the 184 PT Perusahaan Gas Negara Tbk Sustainability Report 2019

Statement GRI Standards in Accordance Check

The National Center for Sustainability Reporting (NCSR) has conducted a GRI Standards in Accordance Check on PT Perusahaan Gas Negara Tbk Sustainability Report 2019 (“Report”). The check communicates the extent to which the GRI Standards 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 - Comprehensive option.

Jakarta, 22 April 2020

National Center for Sustainability Reporting

Dewi Fitriasari, Ph.D., CSRA, CMA Director Sustainability Report 2019 PT Perusahaan Gas Negara Tbk 185

SDG’S LINK IN THE GRI STANDARD Remarks Maintain SDG’s Business Theme Relevance of Disclosure Title Indicator Pages GRI Standard Sustainability 1. NO POVERTY Income, salary, and GRI 201: 201-3 Defined Benefit Plan 103 benefits Economic Obligations and Other Performance Retirement Plans GRI 202: 202-1 Ratios of standard 95 Market Presence entry level wage by Economy Maintaining Statement GRI Standards in Accordance Check gender compared to the National local minimum wage 202-2 Proportion of senior 96 management hired The National Center for Sustainability Reporting (NCSR) from the local End poverty in all its community has conducted a GRI Standards in Accordance Check on forms everywhere. Environment GRI 401: 401-2 Benefits provided to 95 PT Perusahaan Gas Negara Tbk Sustainability Report 2019 Employment full-time employees

(“Report”). The check communicates the extent to which the that are not provided Maintain Sustainable to temporary or part- GRI Standards has been applied in the Report. The check does time employees not provide an opinion on the sustainability performance of the Economic GRI 203: Indirect 203-1 Infrastructure 77 reporter or the quality of the information provided in the report. development in areas Economic investments and of high poverty Impacts services supported the Country Maintaining Prosperity of 203-2 Significant indirect 82

economic impacts We conclude that this report has been prepared in accordance 2. ZERO HUNGER Economic GRI 203: Indirect 203-1 Infrastructure 77 development in areas Economic investments and with GRI Standards - Comprehensive option. of high poverty Impacts services supported Employees Quality of Pg n

203-2 Significant indirect 82 Maintaining the economic impacts Jakarta, 22 April 2020 Economic GRI 201: 201-1 Direct economic 47 Performance Economic value generated and Performance distributed and Safety Maintaining

National Center for Sustainability Reporting End hunger, achieve

food security and Occupational Health improved nutrition and promote sustainable agriculture. Safety

Dewi Fitriasari, Ph.D., CSRA, CMA Maintaining the Director Customer Health and G overnance Sustainability Report About the 186 PT Perusahaan Gas Negara Tbk Sustainability Report 2019

SDG’s Business Theme Relevance of Disclosure Title Indicator Pages GRI Standard 3 GOOD HEALTH AND Water quality GRI 303: Water 303-1 Water withdrawal by 63-64 WELL BEING source 303-2 Water sources 63 significantly affected by withdrawal of water 303-3 Water recycled and 64 reused Air quality GRI 305: 305-1 Direct (Scope 1) GHG 66 Emissions emissions 305-2 Energy indirect (Scope 67 Ensure healthy 2) GHG emissions lives and promote wellbeing 305-3 Other indirect (Scope 67 for all at all ages. 3) GHG emissions 305-4 GHG emissions 67 intensity 305-5 Reduction of GHG 68 emissions 305-6 Emissions of ozone- 68 depleting substances (ODS) 305-7 Nitrogen oxides (NOX), 68 sulfur oxides (SOX), and other significant air emissions Occupational GRI 403: 403-1 Workers 108- Health and Safety Occupational representation 109 Health and in formal joint Safety management–worker health and safety committees 403-2 Types of injury 115 and rates of injury, occupational diseases, lost days, and absenteeism, and number of work- related fatalities 403-3 Workers with high 120 incidence or high risk of diseases related to their occupation 403-4 Health and safety 108 topics covered in formal agreements with trade unions Customer Safety GRI 416: 416-1 Assessment of the 125 Customer Health health and safety and Safety impacts of product and service categories Sustainability Report 2019 PT Perusahaan Gas Negara Tbk 187 Remarks SDG’s Business Theme Relevance of Disclosure Title Indicator Pages GRI Standard 416-2 Incidents of non- 125 compliance concerning the health and safety Maintain

impacts of products Sustainability and services GRI 417: 417-1 Requirements for 125 Marketing and product and service Labeling information and labeling Economy Maintaining 417- 2 Incidents of non- 125 the National compliance concerning product and service information and labeling 417-3 Incidents of 125

non-compliance Environment concerning marketing communications Maintain Sustainable Waste GRI 306: Air 306-1 Water discharge by 71 Effluents and quality and destination Waste 306-2 Waste by type and 69 disposal method 306-3 Significant spills 71 the Country Maintaining Prosperity of 306-4 Transport of 70

hazardous waste 306-5 Water bodies affected 71 by water discharges

and/or runoff Employees Quality of Pg n

Compliance to GRI 307: 307-1 Non-compliance with 60 Maintaining the regulations Environmental environmental laws Compliance and regulations 4 QUALITY Training and GRI 404: 404-1 Average hours of 103 EDUCATION Education Training and training per year per and Safety

Education employee Maintaining Occupational Health Safety

Ensure inclusive and quality education Maintaining the for all and promote Customer Health and lifelong learning G overnance Sustainability Report About the 188 PT Perusahaan Gas Negara Tbk Sustainability Report 2019

SDG’s Business Theme Relevance of Disclosure Title Indicator Pages GRI Standard 404-2 Programs for 100, upgrading employee 103 skills and transition assistance programs 404-3 Percentage of 99 employees receiving regular performance and career development reviews 5 GENDER EQUALITY Equal remuneration GRI 202: Market 202-1 Ratios of standard 95 for women and men Presence entry level wage by gender compared to local minimum wage GRI 401: 401-3 Parental leave 96 Employment GRI 405: 405-1 Diversity of 96-97 Diversity governance bodies and Equal and employees Opportunity Achieve gender 405-2 Ratio of basic salary 97 equality and empower and remuneration of all women and girls. women to men GRI 406: Non- 406-1 Incidents of 96 discrimination discrimination and corrective actions taken 6 CLEAN WATER AND Water GRI 303: Water 303-1 Water withdrawal by 63-64 SANITATION Waste source 303-2 Water sources 63 significantly affected by withdrawal of water 303-3 Water recycled and 64 reused GRI 306: Air 306-1 Water discharge by 71 Effluents and quality and destination Waste Ensure access to 306-3 Significant spills 71 water and sanitation 306-5 Water bodies affected 71 sustainable for all. by water discharges and/or runoff Sustainability Report 2019 PT Perusahaan Gas Negara Tbk 189 Remarks SDG’s Business Theme Relevance of Disclosure Title Indicator Pages GRI Standard 7 AFFORDABLE AND Energy Efficiency GRI 302: Energy 302-1 Energy consumption 64 CLEAN ENERGY within the organization Maintain 302-2 Energy consumption 64 outside of the Sustainability organization 302-3 Energy intensity 65 302-4 Reduction of energy 65 consumption Economy Maintaining 302-5 Reductions in energy 66 the National requirements of Ensure access to products and services affordable, reliable, sustainable and modern energy for all.

8 DECENT WORK AND Freedom of GRI 102: General 102-41 Collective bargaining 152 Environment ECONOMIC GROWTH association Disclosure agreements Income, salary and GRI 202: Market 202-1 Ratios of standard 95 Maintain Sustainable benefits Presence entry level wage by gender compared to local minimum wage 202-2 Proportion of senior 96 management hired the Country Maintaining from the local Prosperity of community

GRI 201: 201-3 Defined benefit plan 103 Support sustainable Economic obligations and other economic Performance retirement plans

development, Employees productive Equality GRI 202: Market 202-2 Proportion of senior 96 Quality of Pg n employment and Presence management hired Maintaining the decent work for from the local everyone. community GRI 405: 405-2 Ratio of basic salary 97 Diversity and remuneration of and Safety

and Equal women to men Maintaining Opportunity GRI 406: Non- 406-1 Incidents of 96 Occupational Health Discrimination discrimination and corrective actions taken

Employment GRI 401: 401-1 92 Safety Employment 401-2 Benefits Provided to 95 Full-Time Employees That are Not Provided Maintaining the to Temporary or Part- Time Employees Customer Health and 401-3 Parental Leave 96 G overnance Sustainability Report About the 190 PT Perusahaan Gas Negara Tbk Sustainability Report 2019

SDG’s Business Theme Relevance of Disclosure Title Indicator Pages GRI Standard Occupational Health GRI 403: 403-1 Workers 108- and Safety Occupational representation 109 Health and in formal joint Safety management–worker health and safety committees 403-2 Types of injury 115 and rates of injury, occupational diseases, lost days, and absenteeism, and number of work- related fatalities 403-3 Workers with high 120 incidence or high risk of diseases related to their occupation 403-4 Health and safety 108 topics covered in formal agreements with trade unions Training and GRI 404: Training 404-1 Average hours of 103 Education and Education training per year per employee 404-2 Programs for 100, upgrading employee 103 skills and transition assistance programs 404-3 Percentage of 99 employees receiving regular performance and career development reviews GRI 410: Security 410-1 Security personnel 98 Practices trained in human rights policies or procedures Sustainability GRI 205: Anti- 205-1 Operations assessed 150 Governance Corruption for risks related to corruption 205-2 Communication and 149 training about anti- corruption policies and procedures 205-3 Confirmed incidents of 150 corruption and actions taken Sustainability Report 2019 PT Perusahaan Gas Negara Tbk 191 Remarks

SDG’s Business Theme Relevance of Disclosure Title Indicator Pages GRI Standard 9 INDUSTRY, Economic GRI 203: Indirect 203-1 Infrastructure 77

INNOVATION AND development in areas Economic Impact investments and Maintain INFRASTRUCTURE of high poverty services supported Sustainability

203-2 Significant indirect 82 economic impacts Economy Maintaining the National

Build resilient infrastructure, promote sustainable industrialization and Environment foster innovation. 10. REDUCED Economic GRI 203: Indirect 203-1 Infrastructure 77 INEQUALITIES development in Economic Impact investments and Maintain Sustainable areas of high poverty services supported 203-2 Significant indirect 82 economic impacts Equality GRI 202: Market 202-2 Proportion of senior 96 the Country Maintaining Presence management hired Prosperity of from the local community GRI 405: 405-2 Ratio of basic salary 97 Diversity and remuneration of

Reduce inequality Employees and Equal women to men within and among Quality of Pg n

Opportunity Maintaining the countries. GRI 406: Non- 406-1 Incidents of 96 Discrimination discrimination and corrective actions taken and Safety

11 SUSTAINABLE Infrastructure GRI 203: Indirect 203-1 Infrastructure 77 Maintaining CITIES AND investments Economic Impact investments and COMMUNITIES services supported Occupational Health 203-2 Significant indirect 82 economic impacts Safety Maintaining the Customer Health and Make cities inclusive, safe, resilient and sustainable. G overnance Sustainability Report About the 192 PT Perusahaan Gas Negara Tbk Sustainability Report 2019

SDG’s Business Theme Relevance of Disclosure Title Indicator Pages GRI Standard 12 RESPONSIBLE Procurement Pratices GRI 204: 204-1 Proportion of spending 52 CONSUMPTION AND Procurement on local suppliers PRODUCTION Practices Material GRI 301: Material 301-1 Materials used by 61-62 weight or volume 301-2 Recycled input 61 materials used 301-3 Reclaimed products 61 and their packaging materials Energy Efficiency GRI 302: Energy 302-1 Energy consumption 64 Ensure sustainable within the organization consumption and 302-2 Energy consumption 64 production patterns. outside of the organization 302-3 Energy intensity 65 302-4 Reduction of energy 65 consumption 302-5 Reductions in energy 66 requirements of products and services Water Efficiency GRI 303: Water 303-1 Water withdrawal by 63-64 source 303-2 Water sources 63 significantly affected by withdrawal of water 303-3 Water recycled and 64 reused Air Quality GRI 305: 305-1 Direct (Scope 1) GHG 66 Emmisions emissions 305-2 Energy indirect (Scope 67 2) GHG emissions 305-3 Other indirect (Scope 67 3) GHG emissions 305-4 GHG emissions 67 intensity 305-5 Reduction of GHG 68 emissions 305-6 Emissions of ozone- 68 depleting substances (ODS) 305-7 Nitrogen oxides (NOX), 68 sulfur oxides (SOX), and other significant air emissions Waste GRI 306: 306-1 Water discharge by 71 Effluents and quality and destination Waste Sustainability Report 2019 PT Perusahaan Gas Negara Tbk 193 Remarks

SDG’s Business Theme Relevance of Disclosure Title Indicator Pages GRI Standard 306-2 Waste by type and 69

disposal method Maintain

306-3 Significant spills 71 Sustainability 306-4 Transport of 70 hazardous waste 306-5 Water bodies affected 71 by water discharges

and/or runoff Economy Maintaining Information and GRI 417: 417-1 Requirements for 125 the National Labeling Product and Marketing and product and service service Labeling information and labeling 417- 2 Incidents of non- 125 compliance concerning product and service Environment information and labeling Maintain Sustainable 417-3 Incidents of 125 non-compliance concerning marketing communications

13 CLIMATE ACTION Energy Efficiency GRI 302: Energy 302-1 Energy consumption 64 the Country Maintaining within the organization Prosperity of

302-2 Energy consumption 64 outside of the organization

302-3 Energy intensity 65 Employees Quality of Pg n

302-4 Reduction of energy 65 Maintaining the consumption 302-5 Reductions in energy 66 Take urgent action requirements of to combat climate products and services and Safety change and its Air quality GRI 305: 305-1 Direct (Scope 1) GHG 66 Maintaining impacts. Emmisions emissions

305-2 Energy indirect (Scope 67 Occupational Health 2) GHG emissions 305-3 Other indirect (Scope 67 3) GHG emissions 305-4 GHG emissions 67 Safety intensity

305-5 Reduction of GHG 68 Maintaining the emissions 305-6 Emissions of ozone- 68 Customer Health and depleting substances (ODS) 305-7 Nitrogen oxides (NOX), 68 sulfur oxides (SOX),

and other significant G overnance Sustainability air emissions Report About the 194 PT Perusahaan Gas Negara Tbk Sustainability Report 2019

SDG’s Business Theme Relevance of Disclosure Title Indicator Pages GRI Standard Implications of GRI 201: 201-2 Financial implications 55 Climate change Economic and other risks and Performance opportunities due to climate change Compliance GRI 307: 307-1 Non-compliance with 60 Environmental environmental laws Compliance and regulations 14. LIVE ON WATER Water GRI 303: Water 303-1 Water withdrawal by 63-64 source 303-2 Water sources 63 significantly affected by withdrawal of water 303-3 Water recycled and 64 reused Waste GRI 306: 306-1 Water discharge by 71 Effluents and quality and destination Waste Conserve and using 306-2 Waste by type and 69 ocean, oceans and disposal method resources the sea 306-3 Significant spills 71 in a sustainable way for development 306-4 Transport of 70 sustainable. hazardous waste 306-5 Water bodies affected 71 by water discharges and/or runoff 15. LIFE ON LAND Waste GRI 306: 306-1 Water discharge by 71 Effluents and quality and destination Waste 306-2 Waste by type and 69 disposal method 306-3 Significant spills 71 306-4 Transport of 70 hazardous waste 306-5 Water bodies affected 71 Protect, restore and by water discharges promote sustainable and/or runoff use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss. Sustainability Report 2019 PT Perusahaan Gas Negara Tbk 195 Remarks

SDG’s Business Theme Relevance of Disclosure Title Indicator Pages GRI Standard 16. PEACE, JUSTICE Anti-Corruption GRI 205: 205-2 Communication and 149

AND STRONG Anti-Corruption training about anti- Maintain INSTITUTIONS corruption policies and procedures Sustainability 205-3 Confirmed incidents of 150 corruption and actions taken Equality GRI 405: 405-1 Average hours of 96-97 Diversity training per year per Economy Maintaining and Equal employee the National Opportunity 405-2 Programs for 97 Promote peaceful and upgrading employee inclusive communities skills and transition for sustainable assistance programs

development, Environment provide access to GRI 406: 406-1 Incidents of 96 justice for all, and Non- discrimination and build effective, Discrimination corrective actions Maintain Sustainable accountable 2016 taken and inclusive Security Practices GRI 410: 410-1 New Employee 98 institutions Security Hires and Employee at all levels. Practices Turnover the Country Maintaining

Ethical and Legal GRI 102: 102-16 Values, principles, 32, 150 Prosperity of Behavior General standards, and norms

Disclosure of behavior 102-17 Mechanisms for advice 151 and concerns about

ethics Employees Quality of Pg n

102-25 Conflicts of interest 149 Maintaining the 102-35 Remuneration policies 156 102-36 Process for 161 determining remuneration and Safety 102-37 Stakeholders’ 161 Maintaining involvement in

remuneration Occupational Health Inclusive Decision GRI 102: 102-18 Governance structure 134 Making General 102-40 List of stakeholder 154 Disclosure groups Safety 102-41 Collective bargaining 152 agreements Maintaining the Customer Health and G overnance Sustainability Report About the 196 PT Perusahaan Gas Negara Tbk Sustainability Report 2019

SDG’s Business Theme Relevance of Disclosure Title Indicator Pages GRI Standard 102-42 Identifying and 154 selecting stakeholders 102-43 Approach to 154 stakeholder engagement 102-44 Key topics and 154 concerns raised 17. PARTNERSHIP FOR External Initiative GRI 102: General 102-12 External initiatives 152 THE GOALS Disclosure

Strengthen the means of implementation and revitalize the global partnership for sustainable development. Sustainability Report 2019 PT Perusahaan Gas Negara Tbk 197

GRI STANDARD INDEX -

Comprehensive Option [GRI 102-55] Remarks Maintain

Disclosure Sustainability GRI Standard No Pages Title general DISCLOSURE Organizational profile Economy GRI 102: 102-1 Organization name 21 Maintaining General Disclosure the National 2016 102-2 Activities, brands, products, and services 21 102-3 Location of headquarters 21 102-4 Location of operations 22 102-5 Ownership and legal form 21 Environment 102-6 Markets served 29

102-7 Scale of the organization 24 Maintain Sustainable 102-8 Information on employees and other workers 91 102-9 Supply chain 50 102-10 Significant changes to the organization and its supply chain 179 the Country Maintaining 102-11 Precautionary Principle or approach 148 Prosperity of

102-12 External initiatives 152 102-13 Membership of associations 152 STRATEGY Employees

102-14 Statement from senior decision-make 8, 12 Quality of Pg n Maintaining the 102-15 Key impacts, risks, and opportunities 52-53 ETHICS AND INTEGRITY 102-16 Values, principles, standards, and norms of behavior 32, 150 and Safety 102-17 Mechanisms for advice and concerns about ethics 151 Maintaining GOVERNANCE Occupational Health 102-18 Governance structure 134

102-19 Delegating authority 136

102-20 Executive-level responsibility for economic, environmental, and 136 Safety social topics 102-21 Consulting stakeholders on economic, environmental, and social 136 topics Maintaining the

102-22 Composition of the highest governance body and its committees 136 Customer Health and 102-23 Chair of the highest governance body 136 102-24 Nominating and selecting the highest governance body 137 102-25 Conflicts of interest 149 G overnance 102-26 Role of highest governance body in setting purpose, values, and 139 Sustainability strategy 102-27 Collective knowledge of highest governance body 139

102-28 Evaluating the highest governance body’s performance 141 Report About the 198 PT Perusahaan Gas Negara Tbk Sustainability Report 2019

Disclosure GRI Standard No Pages Title 102-29 Identifying and managing economic, environmental, and social 142 impacts 102-30 Effectiveness of risk management processes 148 102-31 Review of economic, environmental, and social topics 142 102-32 Highest governance body’s role in sustainability reporting 142 102-33 Communicating critical concerns 143 102-34 Nature and total number of critical concerns 154

102-35 Remuneration policies 156 102-36 Process for determining remuneration 161 102-37 Stakeholders’ involvement in remuneration 161 102-38 Annual total compensation ratio 158, 161 102-39 Percentage increase in annual total compensation ratio 158 STAKEHOLDER ENGAGEMENT 102-40 List of stakeholder groups 154 102-41 Collective bargaining agreements 152 102-42 Identifying and selecting stakeholders 154 102-43 Approach to stakeholder engagement 154 102-44 Key topics and concerns raised 154 REPORTING PRACTICE 102-45 Entities included in the consolidated financial statements 179 102-46 Defining report content and topic Boundaries 179 102-47 List of material topics 181 102-48 Restatements of information 179 102-49 Changes in reporting 179 102-50 Reporting period 179 102-51 Date of most recent report 179 102-52 Reporting cycle 179 102-53 Contact point for questions regarding the report 181 102-54 Claims of reporting in accordance with the GRI Standards 179 102-55 GRI content index 197 102-56 External assurance 179, 182 SPECIFIC TOPIC DISCLOSURE Economic Performance GRI 103: 103-1 Explanation of the material topic and its Boundary 181 Management Approach 2016 103-2 The management approach and its components 47, 48, 55, 103 103-3 Evaluation of the management approach 47, 48, 55, 103 Sustainability Report 2019 PT Perusahaan Gas Negara Tbk 199 Remarks Disclosure GRI Standard No Pages Title GRI 201: 201-1 Direct economic value generated and distributed 47 Economic Performance Maintain 2016 201-2 Financial implications and other risks and opportunities due to 55 climate change Sustainability 201-3 Defined benefit plan obligations and other retirement plans 103 201-4 Financial assistance received from government 48 MARKET PRESENCE

GRI 103: 103-1 Explanation of the material topic and its Boundary 181 Economy Maintaining Management the National Approach 103-2 The management approach and its components 95-96 2016 103-3 Evaluation of the management approach 95-96 GRI 202: 202-1 Ratios of standard entry level wage by gender compared to local 95 Market Presence 2016 minimum wage

202-2 Proportion of senior management hired from the local community 96 Environment INDIRECT ECONOMIC IMPACTS Maintain Sustainable GRI 103: 103-1 Explanation of the material topic and its Boundary 181 Management Approach 103-2 The management approach and its components 77, 82 2016 103-3 Evaluation of the management approach 77,82 GRI 203: 203-1 Infrastructure investments and services supported 77 the Country Maintaining Indirect Economic Prosperity of Impacts 2016 203-2 Significant indirect economic impacts 82

PROCUREMENT PRACTICES GRI 103: 103-1 Explanation of the material topic and its Boundary 181 Management Employees 103-2 The management approach and its components 52 Approach Quality of Pg n Maintaining the 2016 103-3 Evaluation of the management approach 52 GRI 204: Procurement 204-1 Proportion of spending on local suppliers 52 Practices 2016

ANTI-CORRUPTION and Safety Maintaining GRI 103: 103-1 Explanation of the material topic and its Boundary 181 Management Approach 103-2 The management approach and its components 149-150 Occupational Health 2016 103-3 Evaluation of the management approach 149-150 GRI 205: 205-1 Operations assessed for risks related to corruption 150

Anti-Corruption Safety 2016 205-2 Communication and training about anti-corruption policies and 149 procedures

205-3 Confirmed incidents of corruption and actions taken 150 Maintaining the

MATERIAL Customer Health and GRI 103: 103-1 Explanation of the material topic and its Boundary 181 Management Approach 103-2 The management approach and its components 61-62 2016 103-3 Evaluation of the management approach 61-62 G overnance Sustainability Report About the 200 PT Perusahaan Gas Negara Tbk Sustainability Report 2019

Disclosure GRI Standard No Pages Title GRI 301: 301-1 Materials used by weight or volume 61-62 Material 2016 301-2 Recycled input materials used 61 301-3 Reclaimed products and their packaging materials 61 ENERGY GRI 103: 103-1 Explanation of the material topic and its Boundary 181 Management Approach 103-2 The management approach and its components 64-66 2016 103-3 Evaluation of the management approach 64-66 GRI 302: 302-1 Energy consumption within the organization 64 Energy 2016 302-2 Energy consumption outside of the organization 64 302-3 Energy intensity 65 302-4 Reduction of energy consumption 65 302-5 Reductions in energy requirements of products and services 66 WATER GRI 103: 103-1 Explanation of the material topic and its Boundary 181 Management Approach 2016 103-2 The management approach and its components 63-64 103-3 Evaluation of the management approach 63-64 GRI 303: 303-1 Water withdrawal by source 63-64 Water 2016 303-2 Water sources significantly affected by withdrawal of water 63 303-3 Water recycled and reused 64 EMMISIONS GRI 103: 103-1 Explanation of the material topic and its Boundary 181 Management Approach 2016 103-2 The management approach and its components 66-68 103-3 Evaluation of the management approach 66-68 GRI 305: 305-1 Direct (Scope 1) GRK emissions 66 Emissions 2016 305-2 Indirect (Scope 2) GRK emissions 67 305-3 Other indirect (Scope 3) GHG emissions 67 305-4 GRK Emissions Intensity 67 305-5 Reduction of GRK emissions 68 305-6 Nitrogen oxides (NOX), sulfur oxides (SOX), and other significant air 68 emissions 305-7 Direct (Scope 1) GRK emissions 68 EFFLUENTS AND WASTE GRI 103: 103-1 Explanation of the material topic and its Boundary 181 Management Approach 2016 103-2 The management approach and its components 69-71 103-3 Evaluation of the management approach 69-71 Sustainability Report 2019 PT Perusahaan Gas Negara Tbk 201 Remarks Disclosure GRI Standard No Pages Title GRI 306: Effluents and 306-1 Water discharge by quality and destination 71 Waste 2016 306-2 Waste by type and disposal method 69 Maintain

306-3 Significant spills 71 Sustainability 306-4 Transport of hazardous waste 70 306-5 Water bodies affected by water discharges and/or runoff 71 ENVIRONMENTAL COMPLIENCE Economy Maintaining GRI 103: 103-1 Explanation of the material topic and its Boundary 181 the National Management Approach 2016 103-2 The management approach and its components 60 103-3 Evaluation of the management approach 60 GRI 307: Environmental 307-1 Non-compliance with environmental laws and regulations 60 Compliance 2016 Environment EMPLOYMENT

GRI 103: 103-1 Explanation of the material topic and its Boundary 181 Maintain Sustainable Management Approach 103-2 The management approach and its components 92-96 2016 103-3 Evaluation of the management approach 92-96 GRI 401: 401-1 New employee hires and employee turnover 92

Employment the Country Maintaining 2016 401-2 Benefits provided to full-time employees that are not provided to 95 Prosperity of temporary or part-time employees

401-3 Parental leave 96 OCCUPATIONAL HEALTH AND SAFETY Employees GRI 103: 103-1 Explanation of the material topic and its Boundary 181 Quality of Pg n

Management Maintaining the Approach 103-2 The management approach and its components 108-120 2016 103-3 Evaluation of the management approach 108-120 GRI 403: 403-1 Workers Representation in Formal Joint Management–Worker 108-109 Occupational Health Health and Safety Committees and Safety and Safety 2016 Maintaining 403-2 Types of injury and rates of injury, occupational diseases, lost days, 115 and absenteeism, and number of work-related fatalities Occupational Health 403-3 Workers with high incidence or high risk of diseases related to 120 their occupation 403-4 Health and safety topics covered in formal agreements with trade 108

unions Safety TRAINING AND EDUCATION

GRI 103: 103-1 Explanation of the material topic and its Boundary 181 Maintaining the Management Approach 103-2 The management approach and its components 99-103 Customer Health and 2016 103-3 Evaluation of the management approach 99-103 GRI 404: 404-1 Average hours of training per year per employee 103 Training and Education 404-2 Programs for upgrading employee skills and transition assistance 100, 103 programs G overnance 2016 Sustainability 404-3 Percentage of Employees Receiving Regular Performance and 99 Career Development Reviews Report About the 202 PT Perusahaan Gas Negara Tbk Sustainability Report 2019

Disclosure GRI Standard No Pages Title DIVERSITY AND EQUAL OPPORTUNITY GRI 103: 103-1 Explanation of the material topic and its Boundary 181 Management Approach 103-2 The management approach and its components 96-97 2016 103-3 Evaluation of the management approach 96-97 GRI 405: 405-1 Diversity of governance bodies and employees 96-97 Diversity and Equal Opportunity 405-2 Ratio of basic salary and remuneration of women to men 97 2016 NON-DISCRIMINATION GRI 103: 103-1 Explanation of the material topic and its Boundary 181 Management Approach 103-2 The management approach and its components 96 2016 103-3 Evaluation of the management approach 96 GRI 406: Non- 406-1 Incidents of discrimination and corrective actions taken 96 discrimination 2016 SECURITY PRACTICES GRI 103: 103-1 Explanation of the material topic and its Boundary 181 Management Approach 2016 103-2 The management approach and its components 98 103-3 Evaluation of the management approach 98 GRI 410: 410-1 Security personnel trained in human rights policies or procedures 98 Security Practices 2016 CUSTOMER HEALTH AND SAFETY GRI 103: 103-1 Explanation of the material topic and its Boundary 181 Management Approach 2016 103-2 The management approach and its components 125 103-3 Evaluation of the management approach 125 GRI 416: 416-1 Assessment of the health and safety impacts of product and 125 Customer Health service categories and Safety 2016 416-2 Incidents of non-compliance concerning the health and safety 125 impacts of products and services MARKETING AND LABELING GRI 103: 103-1 Explanation of the material topic and its Boundary 181 Management Approach 2016 103-2 The management approach and its components 125 103-3 Evaluation of the management approach 125 GRI 417: 417-1 Requirements for product and service information and labeling 125 Marketing and Labeling 2016 417- 2 Incidents of non-compliance concerning product and service 125 information and labeling 417-3 Incidents of non-compliance concerning marketing 125 communications Sustainability Report 2019 PT Perusahaan Gas Negara Tbk 203 Remarks Maintain Sustainability Economy Maintaining the National Environment Maintain Sustainable the Country Maintaining Prosperity of

Employees Quality of Pg n Maintaining the and Safety Maintaining Occupational Health Safety Maintaining the Customer Health and G overnance Sustainability Report About the 204 PT Perusahaan Gas Negara Tbk Sustainability Report 2019

PT Perusahaan Gas Negara Tbk Jl. K.H. Zainul Arifin No. 20 Jakarta 11140, Indonesia T +6221 633 4838 F +6221 633 3080 www.pgn.co.id

Contact Center T 1500 645 E [email protected] Jl. K.H. Zainul Arifin No. 20 Jakarta 11140, Indonesia