Sustainability Report Sustainability Through the Global Financial Crisis
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2009 Sustainability Report Sustainability Report 2009 Sustainability Through the Global Financial Crisis External Affairs & Sustainable Development PT.Kaltim Prima Coal M2 Building, Mine Site Sangatta, Kutai Timur, Kalimantan Timur Indonesia Phone. 62 549 52 1451 Facs. 62 549 52 1701 SUSTAINABILITY REPORT 2009 PT.KALTIM PRIMA COAL PUBLISHED BY : PT.Kaltim Prima Coal PATRON : Endang Ruchijat, Chief Executive Officer ADVISORS : KPC EXECUTIVES, R. Utoro (Chief Operating Officer); Ashok Mitra (Chief Financial Officer); Frank Sinatra (Mining Operation); Shane Bennett (Mining Development); M. Sumali (Processing & Infrastructure); Richard Schloss (Mining Support); Pratikto (Supply Chain); Herlan Siagian (Marketing); Yulianti Subian (Finance); Khudori (Human Resources); Imanuel Manege (Health, Safety & Environment); M. Rudy (Contract Mining); Dasril (Business & Performance Improvement); Bartley Hopkins (Expansion Project) EDITORIAL ACCOUNTABILITY : Huseinsyah Akma, GM External Affairs & Sustainable Development EDITORS : Louise G. Pessireron, Manager Project Management & Evaluation Ricky Santana, Specialist Reporting and Data Management DESIGN/LAYOUT : Subur Jaringan Cetak Terpadu, Jakarta CONTRIBUTORS : Wijayono Sarosa (Mgr. Community Empowerment), Satya Putra (Mgr. Business Analyst), Rio Supin (Mgr. Accounting and Tax), Danny K. Wardhana (Supt. Project Monitoring and Control), Wawan Setiawan (Supt. Community Support), Nurul Karim (Supt. Agribusiness and Conservation), Pramono Triwahyudi (Supt. Local Business Development), Yuliana Datu Bua (Supt. Community Health and Education), Nadira Defy (Supv. Project Admin), Denny Riezki Pratama (GDP Community Empowerment), Beryanti Aritya Putri (Specialist External Liaison), Kusuma Sari (Supt. HSE Technical Affair), Rusdiansyah (Field officer), Andriyanto Soehadji (Supv. Project Admin), Silvester Pantur (Officer Media Publication), Muhammad Yusuf (Consultant PME), Hendy Ferdian (Senior Business Analyst), Djoko Soelistiono (Supt. Export Marketing), Jamik Yulianto (Specialist Marketing Administration), Joshua Ratadhi (Purchasing Supt. Mining, Coal Convey & Support), Sumarno Hadi (Supv. Purchasing), Haryadi Wardhono (Mgr. Occupational Health and Safety), Ricky Manurung (Spec. Safety Training and Statistic), Elistyandari (Senior Engineer Environment), Posman Sirait (Mgr. Learning and Development Service), Makin Perdana Kusuma (Mgr. Human Resources), Suriadi (Supt. Employee Communication), Bangun Nuswanto (Supt. HR Strategic Plan), Sylvianti (Spec. Employee Development), Shauman Shalladin (Supt. Mine Conrol and Dispatch, Tanzilullah (Supt. Coordination and Cost Control), Welen (Supt. Reporting & Analysis), Anton Suprajogi (Mgr. Procurement Expansion Project). INTERNAL AUDITOR : KPC Internal Auditor Team TRANSLATOR : Peter Markey, PT PMI (Penulis Maju Indonesia) EXTERNAL AUDITOR : SGS Indonesia EDITORIAL ADDRESS : External Affairs & Sustainable Development PT.Kaltim Prima Coal M2 Building, Mine Site Sangatta, Kutai Timur, Kalimantan Timur Indonesia Telp. 62 549 52 1451 Fax. 62 549 52 1701 PRINTED BY : Subur Jaringan Cetak Terpadu, Jakarta 2009 Sustainability Report Sustainability Report 2009 i TABLE OF CONTENTS TABLE OF CONTENT 1 From the Editors 3 Chief Executive Officer’s Statement 5 About This Report 6 Reporting Objective 6 Approach to Reporting System 6 Reporting Assessment 8 Basic Guideline 8 Reporting Scope 8 Independent Verification 8 Awards 2009 13 About KPC 13 Board of Directors and Board of Commissioners Selection and Evaluation 13 Management of KPC 16 Sustainable Development Strategy and Approach 18 Stakeholders’ Role 21 Our Mining Process 22 Our Mining Operation 23 Our Coal Production 30 Coal Market 31 Occupational Health and Safety 35 Employees’ Benefits 36 Land Preparation and Monitoring 36 Post-mining Plan 39 Our Product Quality 39 Responsibility for the Product 39 Customer Satisfaction 40 Marketing Communication Program 40 Customer Privacy Infringement 41 Code of Conduct 42 Sustainable Development Accountability 43 Monthly Board Meeting 43 Executive Committee ii Sustainability Report 2009 TABLE OF CONTENTS 43 HSE Forum 43 HRCR Forum & HR Network 43 Health, Safety and Environment Management System 43 MSH-CSR (Multi Stakeholder for Corporate Social Responsibility) Forum 45 Economic Performance 45 Our Contribution to National Economic Development 45 Influence of Rainfall on Production 46 Supplier Involvement 48 Impact of KPC on the Economy Around the Mine 49 Social Performance 50 Improvement of Community Economy 54 Creating Social Harmony 58 Nature and Culture Conservation 61 Environmental Performance 62 Environment Policy 62 Environment Management Responsibility 62 Training 62 Monitoring and Follow Up 63 Environmental Indicators 66 Water Requirements for Production and Drinking 66 Land Opening and Ex-Mining Area Rehabilitation 67 Biodiversity Project for Rehabilitation Area 69 Orangutan Relocation 69 Water Quality Management 69 Acid Rock Water Management 71 Air Quality Management and Air Emission Observation 71 Management of Greenhouse Gases 71 Management of Waste 74 Total Cost of Environment Management 75 Labor Performance 75 Human Resources 78 Industrial Relationship 80 Training and Development 81 Retirement Preparation Period Training 81 Career Opportunities 81 Employee Performance Assessment 81 Employees Retention Program 82 Attract Potential Employees 82 Scholarship Program for Employee’s Children Sustainability Report 2009 iii TABLE OF CONTENTS 83 Human Rights Performance 83 Discriminative Attitude 83 Child Workers 83 Forced Labor 83 Security Practice 83 Local Inhabitants 83 Occupational Health and Safety 85 GRI Cross Reference 91 Abbreviation Glossary iv Sustainability Report 2009 FROM THE EDITORS FROM THE EDITORS Social and Environmental Responsibility has become maintain the level of accuracy, accountability and a part of a company’s responsibility nowadays. As transparency of this report. Input from SGS on the stated in the Republic of Indonesia Law No.40/2007, report from the previous year is implemented to the government strictly regulates that companies improve the quality of this year’s report. running their business in a certain field and/or related to natural resources are obligated to implement Social In brief, it can be said that the Sustainability Development and Environmental Responsibility. Report 2009 is a summary of the company’s operation, supervision, and evaluation activities throughout the As a world-class coal mining company, KPC has taken on whole year. We realize that this report is still not perfect this responsibility and periodically reports its economic, in its presentation, therefore any productive criticisms environmental, and social performance in an annual and suggestions that will help improve this report in report, namely the Sustainable Development Report. the future is highly appreciated. In 2010, KPC issued the Sustainability Development Report 2009 which is its 7th report. For any criticism, suggestions and questions about the data and information we present, please convey this to: Drawing up a Sustainability Development Report is not as easy as turning the palm of your hands. Consistently, External Affairs & Sustainable Development Division the report comprising team continues to make PT. Kaltim Prima Coal improvements whether in terms of the quality of the M2 Building – Mine Site contents or the presentation of the report itself. The Sangatta, Kutai Timur, team was equipped with knowledge on Sustainable Kalimantan Timer 75611 Development and Standard of Global Report Initiatives INDONESIA (G3) which is one of the advantages that KPC has. Telp. +62 549 521451 Fax. +62 549 521701 During the last three years, KC’s Sustainable Website: www.kaltimprimacoal.co.id (3,4) Development Report has won awards in the ISRA (Indonesian Sustainability Reporting Award) event. This Enjoy your reading, form of reward not only reflects the quality of the report drawn up by KPC but it also becomes a motivation for KPC to consistently report its social responsibility. Editors We still consistently conduct external audits administered by an independent verification and certification institution, namely SGS Indonesia to Sustainability Report 2009 1 2 Sustainability Report 2009 Chief EXecUtiVE Officer’S Statement Chief EXecUtiVE Officer’S Statement (1.1; 1.2) of the community towards the company is still high. This can be observed from the performance of East Dear respected stakeholders, Kutai District’s Gross Regional Domestic Product (PDRB) that shows a dominant amount coming from Right now, our world is faced with the huge challenge the mining sector which is around 80% of the PDRB. of climate change due to global warming. One of the To reduce the degree of dependency and create an factors that contribute to global warming is the use of independent community after mining has finished fossil fuel such as coal, oil, natural gas and many others. (post mining), KPC formulated a sustainable community development oriented to the increase of community On the one hand, the living standards of people capacity, encouraging the growth of a non-mine around the world continue to change and they economy and create a better human resource for the demand a better quality of life each day. This condition future of East Kutai. is not followed by an innovation in technology that can replace fossil fuel as an energy source, so the high As a coal mining company, KPC continues to operate demand of fossil fuel keeps rising every year. its business in supplying world class thermal