Social Responsibility Policy

For the company, social responsibility is not just about contributing to the society, but it is emphasized more on how we operate in a responsible, accountable, and transparent manner as well uphold ethics in every stage of business process, from the process of land clearing, land management, water and waste, pest and crop disease control, to the production process in our processing mills.

The Company strives to continually maximizing our contribution to all stakeholders, both internal and external. Internally, we build a safe and convenient working environment for all employees, we treat them fairly in terms of career development while delivering competitive compensation for them, and we also support a balance life between professional and personal interest of our employees.

Meanwhile from external perspective we manage a constructive long-term based relationship with all stakeholders, including and not limited to government institutions (both central and local), employees, business partners, independent community organizations, social organizations, press, industrial associations and others public sectors. The entire process is intended to build a convenient business environment to support business growth and sustainability of the Company.

 

VISION AND MISSION OF CORPORATE SOCIAL RESPONSIBILITY

Vision and mission of corporate social responsibility are integrated with the Company’s vision and mission, which is to become one of the leading agribusiness companies that is accountable in Indonesia. This vision is strengthened with one of the Company’s mission, which is “To participate in enhancing life quality of local communities surrounding our plantation estates”.

For us, the social responsibility vision is to actualize a long term and harmonious relationship with all stakeholders, in which the Company can contribute further to regional development, as well as socio-economic development of the society, through business partnership and sustainable social investment in order to create an independent and prosperous society.

 

ENVIRONMENTAL MANAGEMENT

The Company strives to implementing the best agricultural practices, investing in research dan development consistently, managing environmental impacts, contributing to environment conservation, and proactively welcoming community participation to work together and contributing to sustainable development.

 

ENVIRONMENTAL MANAGEMENT STRATEGY

Continuously, the Company supports systematic efforts in integrated environmental management practices, while also adapts to climate change, land conservation, and biodiversity. In Tunas Baru Lampung, up until today, the Company is obligated to promote environment related operations which comply with the laws and regulators, as well as to respect applicable international laws and regulations, as well as to respect applicable international laws, through continuous effort in delivering environment-related operational performance that exceeds the standard of applicable regulations. Our business units in South Sumatra, Lampung, West Kalimantan, and east Java are gradually transforming into a good, ethical, and responsible corporate citizen.

The Company also monitors the implementation of good environment management, complies with the laws and based on standards and criteria mentioned within the Roundtable on Sustainable Palm Oil (RSPO), particularly the 5th Principle, which is Responsibility to Environment as well as Conservation of Biodiversity and Natural Recourses. In addition to strengthen the implementation of compliance commitment to RSPO, the Company reinforces aspects of social and environmental management through area management with High Conversation Value (HCV) in all business units. This is an implementation of commitment to corporate social responsibility, particularly for environment related subjects, as required under ISO 26000:2010 Guidance on Social Responsibility.

 

IMPLEMENTATIONS OF GOOD AGRICULTURAL PRACTICES

Implementation of good agricultural practices is a manifestation of The Company’s contribution in applying sustainable development principles. It is also a submission in order to obtain RSPO and ISPO certificates to all subsidiaries of the Company. This commitment is implemented through land management, water management, the zero burning technique for land clearing and replanting, integrated pest control management, as well as biodiversity conversation.

Land Management
Commitment to environment sustainability by implementing sustainable plantation practices, has led to application of some basic criteria of Tunas Baru Lampung’s plantation land management, as follows:

  • To maintain riparian reserve to minimize erosion. The riparian reserve also serves as filtration system to maintain the water quality that flows to the river.
  • The gradually implement land development by planting legume cover crops to reduce soil erosion as well as improving soil chemical properties by binding of N in the air. For areas with gradients of 6-12%, we also built terraces and hooves in addition to ground cover.
  • The anticipate erosion rate during land clearing, we enforce a policy for cover crop planting. Meanwhile , the prevent forest fire, the Company prohibits land clearing by combustion in accordance with the Decree of the Director General of Plantation No.38/KB-110/SK/DJ.BUN/05.95 regarding technical guidance for land clearing without combustion for plantation development.

Water Management
This problem is the most critical in plantation business. Oil palm requires adequate water supply. Therefore, unstable supply of water resources reserves would endanger the crop productivity and business sustainability. The Company is fully committed to preserving the water resources reserves, both underground water supply and rivers.

Conversation implementation surround the water catchment area, as well as implementation of High Conservation Value (HCV) area maintenance , are integral part of water quality, particularly as an impact of liquid waste disposal from IPAL (Wastewater Processing Installation) to the rivers. The Company continues to assess the implementation of land application as an alternative for liquid waste treatment.

Application of Zero Burning Technique for Land Clearing and Replanting
Tunas Baru Lampung strictly prohibits clearing and replanting by combustion. Zero burning replanting technique is not just about maintaining our commitment to sustainable environment. It also aims to implement a good agricultural practice that is environmentally friendly. The application of zero burning replanting technique is intended to preserve, restore as well as improve the soil fertility, physical character, and nutrient.

Integrated Pest Control Management
Since the first inception, the Company has been applying integrated pest control management. The system is designed to reduce the use of chemical pesticides and insecticides by promoting biological and organic methods. Some examples of pest control practices are as follows:

  • Pest control by using natural predator, such as promoting the Tytoalba (a certain type of owl) and other predators to control rats.
  • Planting of beneficial weeds that intends to a create a favorable enviorement for natural predators.
  • Planting of cover crop, such as Mucunabracteata that intends to reduce gulma (weeds) and improve the soil fertility.

Biodiversity Conversation
We apply principles of sustainable plantation business, among others through limitation of clearing land in areas marked as High Conversation Value (HCV). Such areas include all natural habitats with some conversation value attached. This includes the presence of rare or endemic species, sacred sites, or resources harvested by the local residents. HCV area is defined as a natural habitat with conversation vales that are considered important or extremely significant by the local communities.

In 2013 we continue to monitor natural vegetation within HCV area by analyzing samples of vegetations, protecting the conversation area through preventive actions, and monitoring the natural flora in HCV areas. Similarly, the zero burning replanting techniques and integrated pest control management are also contributing to the efforts of biodiversity preservation.

Waste Management and Environment Sustainability
For waste management, The Company applies the 3R principles: Reduce, Reuse, and Recycle. Palm Oil production process at Palm Oil Mill (POM) produces solid and liquid waste. Solid waste consists of empty palm fruit bunch, mesocarp fiber, and kernel shell. In our management process, kernel shell and mesocarp fiber are utilized as fuel source for electricity generator, while liquid waste and empty palm fruit bunch are utilized as additional organic fertilizer for soil nutrient and to minimize groundwater loss as well as to prevent soil erosion.

The company also improved its facility producing organic fertilizer per day. The fertilizer is used for surrounding plantation as an alternative for inorganic fertilizer. Other than containing certain nutrients, it also affects the availability of nutrients through water oxygen, and dissolved organic acids that serve as processing agent for hydrolysis and nutrient dissolution. Nutrients contained in the fertilizer can neutralize toxic nature of some micro elements by reducing its absorption. The fertilizer also produces adhesive material to stabilize particular aggregates.

Other than being produced as fertilizer, empty palm fruit bunches also being applied directly to the soil as a mulch in order to maintain soil moisture and reduce groundwater loss that are caused by evaporation. In addition, application of empty palm fruit bunches to the soil can serve as food resources or growing medium for Trichodermaspp serves as biologic control agent against fungal infections from Ganoderma, while Metharhiziumanisopliae controls the pest attack from Oryctes.

Community Roles and Environment
Restoration, maintenance, and habitat conservation are shared responsibilities. The two main things that remain difficult to implement together with the community, in terms of environmental impact management, are the zero burning technique implementation for land clearing as well as replanting, and HCV area conservation. Therefore, the Company has been working very hard in our approaches through culture and two way communication, in order to work together with all stakeholders in maintaining and protecting the habitat conservation by developing policies and participatory approaches.

The palm oil plantations are the people high intensive industry and the people are the main aset for the Company. The continuous upgrading of the people’s skill and compentence is a must and is not only for the employee but also for the small farmer surround the plantation. Along with the Company expansion program , the additional of worker’s compentence and number also done by the company.

 

LABOR PRACTICE

Palm plantation is a labor intensive industry , in which human resources ( HR) make up the key assets of the Company. Improving skills and competencies of HR must be conducted in a comprehensive way, which involve participation not only from the employee, but also from the smallholders and communities in surrounding estates. In line with the Company’s expansion efforts, it is a continuous effort to keep increasing the number and competencies of HR.

 

EMPLOYEE PROFILE

In 2015, We employed close to 3.800 employees . The figure increased from 2014, where we employed close to 3.700 employees and approximately 6.000 smallholders.

 

WAGE AND REMUNERATION

All employees who work in the Company earn the right in a accordance with the provision of regulations and laws applicable. Similarly, the Company also provides fair and competitive compensation for employees contribution by reviewing our payment standards in accordance with the government regulations, including the local government and representation of labor union. Each employee within the business unit have joined labor unions as a form to conduct dialog and discussion with the management in formulating employees rights and obligations. The agreements between labor unions and the management are then outlined in the Collective Labor Agreement (CLA), which binds the entire employees as well as the Company. The CLA is reviewed once every two years to adjust with payment components in accordance with the Company’s internal and external dynamic.

The Company seeks to ensure that the standard wage has met the limit of Provincial/ Regency Minimum Wage (UMP/UMK), particularly in terms of wage standard for plantation sector. Beyond the normative wage given, periodically the Company also provides the annual bonus (based on individual performance and the ability of the Company) as well as other benefits.

 

CHILD LABOR AND FORCED LABOR POLICIES

The Company realizes that plantation industry is prone to face accusation of using child labor and forced labor. Therefore, we have declared in our internal policy that the Company does not employ child labor of forced labor. The Company’s employee must be an adult or at least 18 years old, in line with prevailing regulations in Indonesia.

All employees are also hired based on distinct employment contract, in which their rights and obligations are stipulated in the work agreement as well as the Company’s regulations. They also personally signed an agreement with the Company, whether its employment agreement specified time (PKWT) on employment agreement o unspecified time (PWKTT).

 

OCCUPATIONAL HEALT, SAFETY, AND ENVIRONMENT (HSE)

In terms of business sustainability, employee is an asset as well as a valuable partner. Therefore, the Company has had and will continue on making efforts to ensure that our employees feel comfortable with their working environment, especially related to occupational health, safety, and security through operation of occupational health and safety management system (SMK3) for the entire operational areas, whether its palm oil, rubber, or sago business unit.

SMK3 is sated in the policy, procedure, and a range of actions that consistently monitors and reported to related parties, particularly to internal management and the government as regulators. SMK3 implementation in business units is something that is highly concerned, stars from the level of management down to the level of non-staff employees. Each business unit has zero accident targets to achieve in their operations.

As a manifestation of this commitment, the company encourages business to implement on the field, which is in accordance with regulation from the Minister of Manpower No 05/MEN/1996 regarding Management System for Occupational Health and Safety.

 

EQUAL JOB OPPORTUNITY

Through Human Resources Division (HRD), the Company has created an HRD management system that ensures the consistency of sustainable HRD Development. We treat our employee fairly, starts from process of recruitment, remuneration and benefits, career development and management, to termination of employment with the Company, regardless of tribe, religion, race and gender.

 

THE DIVERSITY THAT MAKES US STRONGER

As a company that focuses on plantation industry, Tunas Baru Lampung has highly diverse employees in terms of educational level and background, origins, and gender.

The Company hires human resources from elementary school graduates to master degree graduates, so we need a specific strategy to be able to managing this diversity, so that all employees can contribute their best talent to support the Company’s growth as well as to support each other as a work team.

In our employment structure, especially on the staff level, we recorded Bachelor’s Degree graduates amounted to 14.8%, high school graduates (50.9%), junior high school 25.5 %, master’s degree graduates (0.2%), diploma graduates (7.5%), elementary school graduates (1.1%).

 

HR COMPETENCY DEVELOPMENT

Employee empowerment and development potential in the short to long term are supported by training programs that promote career development.

The training program is also conducted for all levels of staff, with aims to develop their work potential and performance. All employees will be judged on their competencies, not only based on their year of service. This will be the basis position and able to switch to business units other than palm oil, such as sago and rubber.

Throughout 2015 the Company has shown its commitment to continuously increase the quality of HR in a sustainable and structured manner, through staff trainings and developments.

All HR programs are geared to build potential or talents of every employee, thereby ensuring the availability of reliable HR and able to support business growth of Tunas Baru Lampung, both for short and long term. One of the most important processes in talent management is the process of Talent Review Meeting (TRM). The process is designed to assess the performance and potential of employees, as well as to discuss the risks that may arise in the event of any vacant position within the organization.

There are three end products of TRM. Fist is an identification of employee who have the highest potential (high potential employees). Second is the establishment of action plan or employee development plan, as to prepare employee for higher and greater responsibilities going forward. And the thirdis the formation of succession plan for the future of the Company.

Employee performance is evaluated using Performance Appraisal System based on individual Key Performance (KPI) and personal conduct indicators (corporate values). This mechanism aims to motivate employees and to improve their productivity. The assessment is being used as the basis for performance incentive system as well as the percentage of annual salary raise.

Related to employee productivity, our 2015 performance appraisal result generally showed that most of our employees have reached expected level of performance.

 

CORPORATE SOCIAL INVESTMENT

The existence of plantation industry amidst our agricultural society unavoidably will create social impact, both intended and unintended. The economic growth, as well as well as the increase of prosperity and life quality, is the intended impact. Meanwhile, issues such as inequality, envy, as well as social pathology, are unintended. The Company seeks to minimize this negative impact as much as possible through some efforts as follows :

  • Contributing and encouraging the growth of the local economy.
    This is started from setting priorities to absorb local resources, including local workers and suppliers, into social investment program such as empowerment and technical assistance to smallholder farmers and others community groups. The Company expects to evenly balance the application of people, planet, profit and product principles among all members of smallholders farmers. Through this knowledge and technical skills, the growth of local economy is expected to follow.
  • Developing partnership with the local community.
    Implementation of partnership is expected to be maintained professionally through Plasma’s Cooperation of Village Unit (KUD). The partnership is of course not fully focused on business to business purpose, as the Company strives to strengthen KUD organization. This is an effort to manifest the value is promoted together with all stakeholders.
  • Contributing through Social Investment Program.
    Tunas Baru Lampung believes that the Company’s existence in a region should deliver long term positive impact.  Therefore, the Company has implemented a number of initiatives to grow and develop the community’s independency. This social investment was conducted with aim to create convenient social situation to support our target achievements for the long term.
  • Mantaining accountability and transparency to the stakeholders.
    The Company’s business is based on the achievement of balance values between economy, social, and environment. As a long term collaborative relationship, treatment of strategic business issue such as achievements and constraints becomes a subject concerned by the stakeholders, which is expressed through stakeholders management practices that focuses on a accountability and transparency principles.

 

FOCUS AND STRATEGY OF CORPORATE SOCIAL INVESTMENT PROGRAM

For the Company, social investment is a part of the scheme to create a sustainable long term growth through process of empowerment and capacity development. Tunas BaruLampung has set a social investment strategy which directed to the stakeholders, both internally and externally, as the receivers.

The social investment is currently focuses on the field of education, economy empowerment, improvement of community’s health quality, and improvement of community’s infrastructure quality. Those are in accordance with the Company’s commitment to contribute to Millennium Development Goals (MDGs) promoted by the government. The Company realizes the the implementation of social investment becomes additional and complementary contribution to local and national development.

 

PRODUCT RESPONSIBILITY

Since 2006, Tunas Baru Lampung has joined a sustainability organization in order to produce high quality products that meet principles and criteria for sustainable palm oil development. The Company has also set forth the standards by which oil palm estates should operate as follows :

  • Commitment to transparency,
  • Compliance with prevailing laws and regulations,
  • Commitment to long term economic and financial viability,
  • Use of appropriate best practices by growers and millers,
  • Environmental responsibility and conservation implementation of natural resources and biodiversity, responsible for the employees ,individuals  and communities that affected by Company’s operation.
  • Responsible development of new plantings, and
  • Commitment to continuous improvement in key areas of activities.

In 2011, according to the decree issued by the Minister of Agriculture, stated that all oil palm plantation companies are obliged to implement the ISPO P&C. Indonesia Sustainable Palm Oil or ISP is a mandatory Government’s Policy in reference to Permentan No. 19 in 2011.

 

ISPO Principles and Criteria

  1. Plantation management and licensing system
  2. Implementation guideline on cultivation techniques and palm oil processing
  3. Environment management and monitoring
  4. Responsibility towards employees
  5. Social and community responsibility
  6. Community’s economic empowerment
  7. Sustainable business enhancement