APP Sustainability Report 2008-2009 - Asia Pulp and Paper

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Stakeholder Engagement Stakeholder Engagement Graphic 12 - Workforce by Age and Type* 13,529 0.1% 25,320 3.7% 96.3% 13,429 25,110 3.8% 96.2% APP Absentee and Sickness Rate Both absentee rates (employees absent without prior notice) and sickness rates averaged less than 1 percent of the workforce across all of APP’s operations, reflecting our disciplined workforce and clear channels of communication between staff and managers. Management Non Management 99.9% *These numbers do not include Ekamas Fortuna’s temporary employees (2008:300, 2009:376) About 84 percent of APP employees are male, which was consistent in both 2008 and 2009. This is largely a function of job specifications requiring the operation of heavy machinery. Most female workers who applied at the mills do not have the necessary qualifications to operate heavy machineries and instead applied for administrative and office related jobs, hence the significant amount of male compared to female employees. 559 50 25.6% 74.4% APP employees are predominantly 30 to 50 years old, representing approximately 64 percent of the workforce in both 2008 and 2009, and reflecting the company’s need for experienced, trained staff. There were 34.4 percent of employees below 30 years of age. Age seniority was more pronounced at the management level, where almost 13 percent of managers were over 50 years old during the reporting period. 50 2008 2009 Graphic 13 - Number of Locally Hired Management & Senior Management Staff, by Mill, Number and Percentage (%) 2008 2009 92.3 92.5 Headquarters Lontar Papyrus 78.9 77.5 57.3 59.4 Pindo Deli 92.4 93.9 61.9 60.4 Indah Kiat Perawang Indah Kiat Serang 100% In both 2008 and 2009, 99.5 percent of the staff employed across APP’s operations were Indonesian. At management and senior management levels, approximately 84 percent (in both 2008 and 2009) were locally hired. 86.7 81.3 Indah Kiat Tangerang 576 25.3% 74.7% 100 100 95.5 Tjiwi Kimia 75 Ekamas Fortuna Table 62 - Absentee and Sickness Rate Employee Benefits In Indonesia, minimum wage standards are set by provincial governments. All APP employee remuneration levels exceed statutory requirements set by provincial governments. The gap narrowed slightly in 2009, a reflection of the increase in statutory regional minimum wages during this period. APP mean entry level salaries in 2008 and 2009 were around 127 percent and 118 percent, respectively, of the minimum wage standards of localities where mills operate APP companies exhibit consistently low employee turnover. We believe this is a direct result of the high degree of job security, skills development and the health and welfare benefits provided to all employees. The company provides annual holiday entitlements, sick leave and maternity leave in line with Indonesian employment regulations, as well as social security and medical insurance in line with the Indonesian state social security fund (Jamsostek). In 2009, 2,173 employees across APP’s operations retired or resigned from their positions, a turnover rate of 5.5 percent, Absentee Rate Sickness Rate 2008 2009 2008 2009 Lontar Papyrus 0.00088 0.00082 0.01077 0.00870 Indah Kiat Perawang 0.00054 0.00107 0.00014 0.00016 Indah Kiat Serang 0.00014 0.00011 0.00003 0.00008 Indah Kiat Tangerang 0.00028 0.00020 0.01231 0.01399 Pindo Deli 0.00047 0.00041 0.01113 0.01108 Tjiwi Kimia 0.00101 0.00062 0.00166 0.00122 Ekamas Fortuna 0.00017 0.00020 0.00595 0.00907 Table 63 - Employee Turnover (based on Full Time Employees) compared with 1,605 employees, or 4 percent in 2008. 2008 2009 By Gender Male 1,363 1,834 Female 242 339 By Age 50 125 367 By Mill (Region) Headquarters 178 167 Lontar Papyrus 128 285 Indah Kiat Perawang 285 507 Indah Kiat Serang 369 452 Indah Kiat Tangerang 58 87 Pindo Deli 306 288 Tjiwi Kimia 254 333 Ekamas Fortuna 27 54 Total 1,605 2,173 [EC 7, LA 13] [EC 3, EC 5, LA 2, LA 7] 64 APP 08/09 Sustainability Report APP 08/09 Sustainability Report 65
Stakeholder Engagement Stakeholder Engagement Training Each of our mills has a particular set of standard operating procedures and training programmes for employees, which are designed to meet its specific skills requirements. In 2008 and 2009 we conducted a total of 818,620 man-hours of training, which included job-specific skills development and health-and-safety awareness. Training participants numbered 70,403 and 51,794 in 2008 and 2009, respectively, representing 177.3 percent and 131.2 percent of our total employee numbers each year. Programmes included management training and motivation, quality control analysis, international trade policy and practice, as well as specialised technical skills training related to standard operating Graphic 14 - Training hours by Region 2009 2008 Headquarters Graphic 15 - Training hours By Employee Category* Management Non Management 327,257 * Not included Indah Kiat Perawang 280 208 5.8% 94.2% Lontar Papyrus 207,078 2008 2009 4.4% 10,009 11,068 95.6% procedures, and the in-house maintenance of complex mill equipment, such as turbines and pulp and paper production machinery. Introduction to and massive dissemination of anti-corruption policies to employees were executed via trainings and “Ayo Menjadi Karyawan Teladan” (Becoming a Good Employee) booklets. An outstanding effort was done by Indah Kiat Serang by translating the constructive ways of living into three discs of New Life Activity instructional movies. To enforce the anti-corruption program, APP launched a “Whistle Blowing” system in December 2008. As of end 2009, there 4,960 employees (12.6 percent of total workforce) Pindo Deli 90,562 136,458 Indah Kiat Perawang 118,838 165,447 Table 64 - Human Rights Training Indah Kiat Serang 50,639 70,266 had been introduced and trained about the anti-corruption policies and procedures and the whistle blowing system. Training on human rights procedures was conducted for 6,948 and 10,863 employees in 2008 and 2009, respectively, representing 17.5 and 27.5 percent of the workforce. Total training hours on human rights topics amounted to 59,497 hours over both years. Total Number of Hours of Training In mills where separate records were kept, there was the following split of management and employee level training. Separate data was not recorded for Indah Kiat Perawang mill. 775 116 Indah Kiat Tangerang Tjiwi Kimia 45,175 102,852 Total hours People trained Ekamas Fortuna 9,549 6,290 2008 2009 2008 2009 Head office 0 60 0 20 Lontar Papyrus 583 563 82 25 Indah Kiat Perawang 1,368 1,812 132 120 Indah Kiat Serang 6,728 7,119 5,294 4,113 Indah Kiat Tangerang 69 748 51 601 Pindo Deli 99 6,549 33 2,183 Tjiwi Kimia 10,055 16,921 1,177 3,475 Ekamas Fortuna 880 5,944 179 326 Severance pay is provided at all APP operations in compliance with Indonesian employment law. This is calculated according to the years an employee has worked (Indonesian employment law does not require employers to take into account the age of an employee when calculating severance pay, only the time of service). In addition, Indah Kiat Tangerang provides employees with a paid sabbatical prior to, and in preparation for, retirement. Indah Kiat Tangerang and Lontar Papyrus also provide job placement assistance for employees planning to continue working after retiring from the company. Lontar Papyrus offers preretirement counselling for employees, and Pindo Deli provides a retraining programme for retirees. Notice periods are stipulated within individual employment contracts as required by Indonesian law. They are not a part of collective union contracts. Notice periods for resignation are typically 30 days for all mills, with for internal job transfers arranged between 3-30 days. As part of career development, 98 percent of employees received performance reviews in both 2008 and 2009. Freedom to Associate APP employees may freely join unions. As of 2009, a total of 94.3 percent of APP employees were members of unions. In every mill, the company and the unions negotiate a collective labour agreement and both parties monitor its implementation. If a union meeting is held during company time, APP employees must seek a supervisor’s consent to leave their posts in accordance with standard operating procedures and normal health-and-safety requirements. Unions are part of the decision-making process at APP and union representatives are notified a minimum of one week in advance if major changes are to be implemented in factory operations. APP provides unions with the use of company premises to organise and allows unions to collect dues from staff and disseminate union-related literature. Table 65 - Human Rights Clauses in All APP Contracts 2008 2009 Lontar Papyrus 12 – 15 20 – 25% 12 – 15 20 – 25% Indah Kiat Perawang 387 100% 272 100% Indah Kiat Serang 525 100% 479 100% Indah Kiat Tangerang 35 47% 35 47% Pindo Deli 2 100% 2 100% Tjiwi Kimia 43 100% 43 100% Note: no data for HQ as since there are no contractors in HQ Ekamas did not provide data as this level of detail were not available during the reporting period Human rights provisions are included in a range of agreements at APP with employees, contractors and suppliers. Generally all selected companies met APP’s human rights requirements in 2008 and 2009 and no prospective companies were refused business by APP under human rights screening procedures carried out in those years. The company received no reports of discrimination or violations of indigenous people’s rights in either 2008 or 2009. The company did not record whether it had employed groups from minority groups in 2008 and 2009. APP does not employ children under the minimum age for employment, does not support forced or compulsory labour, and does not tolerate racial, gender, sexual orientation, disability, age or religious discrimination. No instances of alleged discriminatory behaviour by APP or any of its individual mills were recorded in 2008 or 2009. In 2009, 76.6 percent of 1,351 security personnel employed in our mills received training in human rights policies, while in 2008 this proportion was 76.7 percent of 1,299 staff. Towards a Culture of Safety The risk of injury and loss of life among our workforce is ever present and something we continue to work hard to eradicate, yet for the period of this report it was unacceptably high. Much of the increase was traffic-related, primarily due to the increased affordability of motorcycles in Indonesia. Local enforcement of licensing, proper training on road safety and proper vehicle control has not kept pace with vehicle ownership. We are addressing this by working with the police on practical safety training sessions for employees who own motorcycles. Through ongoing training programmes, hazard identification, and risk management we are working steadily towards creating a culture of safety across our operations. Our challenge is to make safety a habit for every employee. Safety is important at home too, and we are encouraging greater safety awareness and health habits for our employee’s families as well as for members of the wider communities adjacent to our operations. Safety Training Each of our mills has a particular set of standard operating procedures and healthand-safety activities developed for their needs, covering safe work practices, hazard identification and accident response. In 2008 and 2009, we conducted programmes on more than 104 separate health-and-safety topics. Training participants numbered 16,880 and 13,570 in 2008 and 2009, respectively, representing 42.5 percent and 34.4 percent of our total employees each year, respectively. [LA 10, S0 2, SO 3, HR 3] [EC 3, LA 4, LA 5, LA 11, LA 12, LA 13, HR 1, HR 2, HR 4, HR 5, HR 6, HR 7, HR 8, HR 9] 66 APP 08/09 Sustainability Report APP 08/09 Sustainability Report 67
Page 2 and 3: Contents Report Scope 02 Corporate
Page 4 and 5: Introduction to APP Indah Kiat Pulp
Page 6 and 7: Chairman’s Statement Chairman’s
Page 8 and 9: Corporate Governance Corporate Gove
Page 10 and 11: Sustainable Products Sustainable Pr
Page 32 and 33: Stakeholder Engagement Care for the
Page 36 and 37: Stakeholder Engagement Stakeholder
Page 38 and 39: Stakeholder Engagement Stakeholder
Page 40 and 41: Social Initiatives and Poverty Alle
Page 46 and 47: Climate Change Climate Change APP h
Page 48 and 49: Responsible Plantation Management W
Page 50 and 51: Responsible Plantation Management R
Page 52 and 53: Responsible Plantation Management R
Page 54 and 55: Ecosystem Protection Ecosystem Prot
Page 56 and 57: GRI Index Economic Page Page Societ
Page 58 and 59: 112 APP 08/09 Sustainability Report
Page 60: Notes 116 APP 08/09 Sustainability

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