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Tangguh Liquefied Natural Gas Project Integrated Social Programme Tangguh LNG – Operations Phase

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Tangguh Liquefied Natural Gas Project Integrated Social Programme Tangguh LNG – Operations Phase Environmental and Social Monitoring Report Project Number: 38919 April – October 2012 INDONESIA: Tangguh Liquefied Natural Gas Project Integrated Social Programme Tangguh LNG – Operations Phase Prepared by BP Berau Limited Tangguh LNG Project Operator This report has been submitted to ADB by BP Berau Limited and is made publicly available in accordance with ADB’s public communications policy (2005). It does not necessarily reflect the views of ADB. Operator’s 6 Monthly Social Report Integrated Social Programme Tangguh LNG – Operations Phase April – October 2012 Contents 1. OBJECTIVE AND SCOPE ............................................................................................ 4 2. REPORT METHODOLOGY.......................................................................................... 4 3. TANGGUH SOCIAL PERFORMANCE – EXECUTIVE SUMMARY ............................... 5 4. TANGGUH LNG UPDATE ........................................................................................... 6 5. INTEGRATED SOCIAL PROGRAM............................................................................. 7 5.1. The Social Management Plan ................................................................................... 7 5.1.1. Livelihood........................................................................................................... 7 5.1.2. Education ............................................................................................................ 8 5.1.3. Health ................................................................................................................. 9 5.1.4. Governance....................................................................................................... 10 5.1.5. Community Relation ......................................................................................... 12 5.2. The Social Monitoring Plan ..................................................................................... 13 5.2.1. Livelihood......................................................................................................... 13 5.2.2. Education ......................................................................................................... 15 5.2.3. Health .............................................................................................................. 17 5.2.4. Governance...................................................................................................... 19 5.2.4. Communication and External Relation............................................................. 21 6. EXTERNAL PANEL ANNUAL REVIEW AND NON-COMPLIANCE STATUS UPDATE22 7. EVALUATION RESULT ............................................................................................. 23 April – October 2012 Page| 2 List of Figures and Tables Figure 1. Vegetable, Fruit and Fish delivery from Stocking Points to Tangguh LNG Catering........................................................................................................... 24 Figure 2. A changing trend of main employment in DAVs and Non DAVs .................... 25 Figure 3. Trend of contract awarded by the mentees (in USD million).......................... 26 Figure 4. Trend of income per capita in DAVs and IDAVs ............................................. 27 Figure 5. Student Graduation in National Exams in Teluk Bintuni Regency................... 28 Figure 6. Gross Enrollment Ratio in Teluk Bintuni Regency .......................................... 28 Figure 7. Student Participation Ratio in Teluk Bintuni Regency..................................... 29 Figure 8.Malaria Prevalence in DAVs............................................................................. 29 Figure 9. Case Fatality Rate due to Diarrhea in DAVs.................................................... 30 Figure 11. Community perception on Welfare (Welfare Index) ..................................... 31 Table 1.Number of Operation Workforce at Tangguh LNG Site .................................... 15 Table 2. AMDAL Workforce Commitment vs. Actual during Operation Phase ............. 25 Table 3. The Growth of Households Income by Villages ............................................... 26 April – October 2012 Page| 3 1. OBJECTIVE AND SCOPE The progress of social program implementation captured in this report is provided for the Asian Development bank (ADB) and Japanese Bank for International Cooperation (JBIC) Lenders Group per the requirement under Section 1.12 of the ADB Tranche PSC Parties Agreement (or Section 1.18 of the JBIC Tranche). Scope of report includes monitoring of ISP Program Implementation for the period of April – October 2012 and program evaluation. 2. REPORT METHODOLOGY This report has been prepared with reference to the ISP monthly reports, site visits, discussions with various program coordinators, and reports from ISP implementing partners, including British Council, Yayasan Sosial Agustinus (YSA), Mediatama Cipta Citra (MCC), Bina Swadaya, Andalan Unggul and the University of Gajah Mada (UGM). April – October 2012 Page| 4 3. TANGGUH SOCIAL PERFORMANCE – EXECUTIVE SUMMARY As part of the company commitment to mitigate the social and environmental impact of the Tangguh operation, BP has continued to support the community investment program with a greater involvement of the local government. Since 2010, the ISP strategy was changed from Development “for” community to Working “with” community approach to ensure sustainability of the programs. The ISP program focuses in five priorities areas such as Livelihood, Education, Health, Governance and Community Relation. In this second five-year period, the government and community are expected to increase their involvement and role in ensuring the socio-economic development of the areas, with Tangguh acting as a partner in these efforts. The overall Tangguh social program has shown a significant contribution to the local development. The program during this reporting period also recognized an increase of community and local government participation in planning and implementation of the programs. Several outputs and outcomes have been delivered to the targeted beneficiaries particularly in DAVs and Teluk Bintuni region. Livelihood program has created opportunities and access for the locals to the enterprise and small businesses and helped increase household income. The various trainings on micro enterprise have provided options for people to find jobs that match their skills and aspiration. The decline of Malaria prevalence and the Diarhea Case Fatality Rates has contributed to community health, while improvement in the learning process contributed to increased quality of education and potential of human resources. In the future, Tangguh LNG will continue to keep its commitments to both the communities and the local government to accelerate the social economic development in Teluk Bintuni as well West Papua Province. During this reporting period, TIAP and ADB have conducted their regular to review Tangguh non-commercial aspects including the social and environment programs. The Tangguh Independent Advisory Panel completed their visit to Papua and Jakarta in July 2012. The panel received feedback on the non-commercial aspects of Tangguh LNG from local government, NGOs, community as well as key central government. Final report that summarizes the result and recommendation has been issued in October 2012 and posted on BP website along sith BP responses to TIAP recommendations. A series of meetings were also held by TIAP in Washington, London and Jakarta during November-December 2012 for the NGOs and other stakeholders to discuss TIAP report and respond to questions and inputs. April – October 2012 Page| 5 ADB visited BP Jakarta office, the LNG site and some of the Directly Affected Villages in August 27-31, 2012 to perform an Extended Annual Review. The review is done after the completion of Tangguh construction and it covers a broad aspects of Tangguh LNG including the project and production/operations performance, financial performance, environment and social compliance as well as Tangguh's overall impact to the oil and gas sector in Indonesia and globally. The report will be posted on ADB website. 4. TANGGUH LNG UPDATE Tangguh LNG has been operating at nameplate capacity and is now focusing on the existing operation shifts to continuous improvement in the safety and efficiency of all aspects of the business, maintaining production reliability, and on strengthening the succession-planning for Nationalisation of key leadership roles through robust people- development. Tangguh delivered 62 LNG Cargoes and 14 Condensate Cargoes between April – October 2012. By end of October 2012, 287 LNG cargoes and 68 condensate cargoes have been delivered since its start up in 2009. Tangguh maintains strong focus on all aspects of health and safety. Several campaigns were run in the period of April to October 2012, i.e. Driving Safety Campaign, Stop Unsafe Job Campaign, and Near Miss Reporting Awareness Sessions. Obvious improvement in HSE performance is noticeable compared to Q1 2012. As part of the Tangguh 4 Point Intervention Plan, a detailed CoW Roadmap was developed to identify improvement areas and to date this approach is beginning to show benefits. Tangguh has established a PS KPI (Process Safety Key Performance Indicator) as a tool to monitor the healthiness of Tangguh operation in term of process safety performance. Contractor safety management is one of the main focuses for this year, particularly
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