WEATHERING THE STORM 2020 SUSTAINABILITY REPORT 2 ThisSustainability photo was taken Report before 2020 the pandemic. • PT Medco Energi Internasional Tbk We support the Sustainable Development Goals MedcoEnergi is a co-founder of the Indonesia Business Council for Sustainable Development, the Indonesian chapter of the World Business Council for Sustainability Development (WBCSD) As of 2019, PT Medco Energi Internasional, Tbk received an MSCI ESG Rating of BB. PT Medco Energi Internasional Tbk ESG Risk Rating MSCI ESG Research provides MSCI places it 52nd in the Oil & Gas Producer industry and ESG Ratings on global public and a few private companies on a scale of AAA 37th in the Oil & Gas Exploration and Production sub (leader) to CCC (laggard), according to industry assessed by Sustainalytics. exposure to industry-specific ESG risks and the ability to manage those risks Copyright ©2021 Sustainalytics. All rights reserved. This Sustainability relative to peers. Learn more about Report contains information developed by Sustainalytics (www. MSCI ESG ratings here. sustainalytics.com). Such information and data are proprietary of Sustainalytics and/or its third party suppliers (Third Party Data) and are provided for informational purposes only. They do not constitute an endorsement of any product or project, nor an investment advice and are not warranted to be complete, timely, accurate or suitable for a particular purpose. Their use is subject to conditions available at https://www.sustainalytics.com/legal-disclaimers. PT Medco Energi Internasional Tbk • Sustainability Report 2020 3 ABOUT THIS REPORT MedcoEnergi publishes an annual Sustainability Report to communicate the Company’s policies and approach to sustainable development and to disclose its economic, social, environmental and governance performance. This report covers MedcoEnergi’s activities and performance per material topic between the period of 1st January and 31st December 2020 and provides progress updates on the action plans established to achieve our short, medium and long term sustainability objectives. A summary of the achievements and challenges for 2020 can be found on page 13. There are no significant changes in our materiality assessment since the previous report issued in 2020. This report was prepared in accordance with the 2016 Global Reporting Initiative (GRI) Standards and its subsequent updates (Core option) and demonstrates the linkage between MedcoEnergi’s sustainability performance and the United Nations’ Sustainable Development Goals. Unless otherwise stated we use definitions as set out in the GRI Standards. The GRI Performance Data and GRI Content Index are accessible through this link: www.medcoenergi.com/en/ subpagelist/view/36 or through MedcoEnergi’s website: www.medcoenergi.com. Please contact [email protected] for queries related to the report. Restatement of GRI 305 Emissions Indicators for the Years 2018 and 2019 We have improved our emissions calculation methodology by implementing the Air and GHG Emissions Calculation tool in 2020. The improvement includes addition of some references in the methodology and inclusion of some more accurate quantification methods in several emissions sources as guided in the references. In order to have a more thorough and comparative year on year emissions figure, we have recalculated and restated the GRI 305 Emissions disclosures for the years 2018 and 2019 in this report. For a more detail information, please refer to page 64. Reporting Assurance The number of data indicators disclosed and assured by KAP Purwantono, Sungkoro & Surja (A member firm of Ernst & Young Global Limited, or “EY”) has increased from 63 in 2019 to 75 in this 2020 report. The Company will continue to enhance disclosure and increase the number of assured indicators once reliable and consistent data collection can be maintained across reporting units. EY Limited Assurance Statement Scope and Limited Assurance of Sustainability Report EY was engaged by MedcoEnergi to undertake limited assurance over selected disclosures in the sustainability report. The Subject Matter for EY’s limited assurance engagement for the year 2018, 2019 and 2020 was limited to: • A selection of 75 non-financial performance indicators (‘Selected Performance Information’) contained in the sustainability report (www.medcoenergi.com/en/subpagelist/view/36). • The consolidated performance metrics relating to the Selected Performance Information, presented in the sustainability report. EY’s Conclusion Statement EY was engaged by MedcoEnergi to undertake limited assurance as defined by Standards on Assurance Engagement (SAE) 3000 (Assurance Engagements Other than Audits or Reviews of Historical Financial Information) established by the Indonesian Institute of Certified Public Accountants (IICPA) over selected sustainability disclosures in the sustainability report as disclosed in the Appendix 1 of EY’s independent limited assurance statement. Based on the limited assurance procedures performed and evidence obtained, nothing has come to EY’s attention that causes EY to believe that the Subject Matter set out in MedcoEnergi’s Sustainability Report for the year 2020, has not been reported and presented fairly, in all material respects, in accordance with the Criteria. • EY’s independent limited assurance statement to the Management of MedcoEnergi is available in the company’s website (www.medcoenergi.com/en/ subpagelist/view/36). Illustrative cover photo: MedcoEnergi supported a series of Teacher and Parent Remote Education Skills Training in Tarakan and Sumatra and donated gadgets to ensure learning continuity during the pandemic. PT Medco Energi Internasional Tbk 2020 Sustainability Report is available at: www.medcoenergi.com WEATHERING THE STORM For further information, please visit 2020 i SUSTAINABILITY REPORT MedcoEnergi assets in Tarakan and Sumatra delivered a series of Teacher and Parent Remote Education Skills Training to ensure learning continuity during the pandemic. www.medcoenergi.com 4 Sustainability Report 2020 • PT Medco Energi Internasional Tbk TABLE OF CONTENTS MedcoEnergi COVID-19 Response Embracing Challenges, Creating 07 Opportunities for Our People 01 Message from the Chairwoman Approach and Commitment 54 Strategic Goals 55 02 Letter from the Board People at a Glance 57 Alignment with the UN SDGs 59 03 About MedcoEnergi Action Plan 60 2020 Sustainability Performance at a Glance 13 Strengthening Our Environmental Vision, Mission and Corporate Values 16 08 Safeguards Business Portfolio 17 Approach and Commitment 61 Supply Chain Management 18 Management System 61 Business at a Glance 19 Sustainability Assessment 63 2020 Economic Performance 20 Environmental Management at a Glance 64 Sustainability Journey at MedcoEnergi GHG Emission and Energy Performance 64 04 Case Study 66 MedcoEnergi Three Pillars of Sustainability 21 Renewables 67 Journey to Sustainability 22 Water and Wastewater 67 Engaging Our Stakeholders 23 Waste Management 68 Company’s Membership and Initiatives 26 Biodiversity Conservation 69 Renewing Our Code to Strengthen Alignment with the UN SDGs 71 05 Our Governance Action Plan 72 Approach and Commitment 27 Protecting the Health and Good Governance Structure and Principles 27 09 Safety of Our People Risk Management 30 Approach and Commitment 73 Ethics and Compliance Programs 30 Operational Excellence 73 Operational Technology-Information 33 HSE Management System 73 Technology (OT-IT) Audit Safety Culture 75 Sanction Compliance Program 34 Hazard Identification and Implementation of 78 Whistleblowing Channels 34 Associated Controls Internal Audits 35 Contractor HSE Management System 78 Public Policy 36 (CHSEMS) Alignment with the UN SDGs 36 Process Safety 79 Action Plan 37 Health and Safety Performance 80 Alignment with the UN SDGs 81 06 Creating Opportunities for Communities Action Plan 81 Approach and Commitment 39 Appendix Supporting Community Livelihoods 40 Community Development Highlights 43 2020 Awards 82 Measuring Our Impact 48 Acronym and Abbreviations 84 Emergency Disaster Relief 49 Feedback Form Alignment with the UN SDGs 50 Action Plan 51 PT Medco Energi Internasional Tbk • Sustainability Report 2020 5 MEDCOENERGI COVID-19 RESPONSE Due to the pandemic, my son Hasbi is unable to attend school. Now with “ his mobile device from MedcoEnergi, he is able to participate and learn from online classes. Lahama, a landless farmer from Tarakan, after his child received a mobile device from “the MedcoEnergi 1,200 mobile devices program. MedcoEnergi’s response to the COVID-19 pandemic focused MedcoEnergi also worked closely with our stakeholders to support upon supporting the health and safety of our workforce and the communities surrounding our operations areas, especially the communities surrounding our operations. In April 2020, the those in remote areas. MedcoEnergi made donations to hospitals, Company established three multi-functional task forces each community health centers and clinics, including COVID-19 testing reporting to the Board of Directors. The COVID-19 Task Force was and personal protective equipment to health workers. In total tasked with developing health protocols for employees, monitoring, during 2020, the Company disbursed aid totaling US$1 million. reporting and ensuring compliance throughout our operations The Company also conducted educational campaigns to raise in Indonesia and Internationally. The Social Impact Task Force community awareness on personal hygiene and health protocols, focused