ekspansi untuk expanding for keberlanjutan...

PT BUKIT ASAM (PERSERO) Tbk

Ekspansi untuk

2012Sustainability Report

KeberlanjutanExpanding for

Sustainability

Performance Area Programs Carried Out Achievements

Environment 1. Paperless office application on the entire administrative activities.2. Energy-saving campaign, fuel-saving campaign and periodic equipment and

operational vehicle examination. 3. Fulfillment of Environmental Impact Analysis (AMDAL) provisions in mining

area clearing.4. Regular maintenance of supporting equipments (diesel, incinerator).5. Reclamation & Revegetation on the former mining areas. 6. Development of City Forest, Educational Forest, People’s Forest Park and

active participation on Musi Watershed Revegetation 7. Periodic maintenance and examination of GRK and ODS gas emission from the

entire supporting equipments

1. Reduced paper usage.2. Reduced energy and fuel usage.3. Conserved biodiversity.4. Conserved environment around mining areas, buffer zone, environment outside mining areas and post-mining

areas.5. Reduced carbon dioxide gas emission.6. Controlled ODS gas emission under environmental quality standard (BML) provisions.7. Received National Green PROPER rating for Tanjung Enim mining area.

Economy 1. Development of coal-based integrated business.2. Close collaboration with business partners and local partners.3. Establishment of fostered partners’ clusters and distribution partnership.4. Coaching and training of fostered partners.

1. Maintained economic performance and capability to harness business opportunities in the future.2. Increased contribution to the state.3. Increased contribution to the regional economy.4. Increased rate of return and increased fostered partners’ turnover.5. Increased number of fostered partners and increased business activities of fostered partners.6. Increased surrounding community’s welfare.7. Increased stakeholders’ welfare.

Community Development 1. Program arrangement by involving stakeholders.2. Programs to include educational, facilities, health, cultural, and environmental

aspects.3. Provision of sufficient fund.

1. Community empowerment execution went well.2. Increased community welfare due to improved potential of regional economy.3. Program execution went according to the plan.4. Harmonious relationship, preserved environment.

Human Resources Development

1. Quality and balanced recruitment.2. Increased basic, certified, and managerial competence.3. Continuous human resourced training, remuneration according to

performance, 4. Employee and family health examination.5. Training and monitoring of work safety and health (WSH).

1. Competent, dedicated human resources with more balanced composition.2. Increased competence, motivation, and performance of human resources.3. Increased productivity per employee.4. Increased human resources’ basic competence.5. Number of work lost due to sick leave is getting lower. 6. Work accident award.

Customer Service 1. Quality control and responsible marketing communication.2. Ease of access for customers.3. Services to customers.4. Complaint resolution.5. Periodic customer satisfaction survey.

1. Quality, loyal, and long-term customers.2. No violation of customer privacy.3. Increased customer satisfaction index.4. No penalties related to customer complaints.

Governance 1. Increase in Governance implementation quality.2. Soft structure review and improvement.3. Periodic assessment.4. Whistle-blowing system implementation.5. Code of conduct enforcement.6. E-procurement and e-auction enactment.7. Affirmation and firm sanction towards work ethics violation.

1. Increased operational performance.2. Increased PTBA perception/image.3. Efficiency of goods and services procurement costs.4. No ethics violation such as corruption and authority abuse.5. Increased employee’s integrity.

Sustainability Performance Overview

Performance Area Programs Carried Out Achievements

Environment 1. Paperless office application on the entire administrative activities.2. Energy-saving campaign, fuel-saving campaign and periodic equipment and

operational vehicle examination. 3. Fulfillment of Environmental Impact Analysis (AMDAL) provisions in mining

area clearing.4. Regular maintenance of supporting equipments (diesel, incinerator).5. Reclamation & Revegetation on the former mining areas. 6. Development of City Forest, Educational Forest, People’s Forest Park and

active participation on Musi Watershed Revegetation 7. Periodic maintenance and examination of GRK and ODS gas emission from the

entire supporting equipments

1. Reduced paper usage.2. Reduced energy and fuel usage.3. Conserved biodiversity.4. Conserved environment around mining areas, buffer zone, environment outside mining areas and post-mining

areas.5. Reduced carbon dioxide gas emission.6. Controlled ODS gas emission under environmental quality standard (BML) provisions.7. Received National Green PROPER rating for Tanjung Enim mining area.

Economy 1. Development of coal-based integrated business.2. Close collaboration with business partners and local partners.3. Establishment of fostered partners’ clusters and distribution partnership.4. Coaching and training of fostered partners.

1. Maintained economic performance and capability to harness business opportunities in the future.2. Increased contribution to the state.3. Increased contribution to the regional economy.4. Increased rate of return and increased fostered partners’ turnover.5. Increased number of fostered partners and increased business activities of fostered partners.6. Increased surrounding community’s welfare.7. Increased stakeholders’ welfare.

Community Development 1. Program arrangement by involving stakeholders.2. Programs to include educational, facilities, health, cultural, and environmental

aspects.3. Provision of sufficient fund.

1. Community empowerment execution went well.2. Increased community welfare due to improved potential of regional economy.3. Program execution went according to the plan.4. Harmonious relationship, preserved environment.

Human Resources Development

1. Quality and balanced recruitment.2. Increased basic, certified, and managerial competence.3. Continuous human resourced training, remuneration according to

performance, 4. Employee and family health examination.5. Training and monitoring of work safety and health (WSH).

1. Competent, dedicated human resources with more balanced composition.2. Increased competence, motivation, and performance of human resources.3. Increased productivity per employee.4. Increased human resources’ basic competence.5. Number of work lost due to sick leave is getting lower. 6. Work accident award.

Customer Service 1. Quality control and responsible marketing communication.2. Ease of access for customers.3. Services to customers.4. Complaint resolution.5. Periodic customer satisfaction survey.

1. Quality, loyal, and long-term customers.2. No violation of customer privacy.3. Increased customer satisfaction index.4. No penalties related to customer complaints.

Governance 1. Increase in Governance implementation quality.2. Soft structure review and improvement.3. Periodic assessment.4. Whistle-blowing system implementation.5. Code of conduct enforcement.6. E-procurement and e-auction enactment.7. Affirmation and firm sanction towards work ethics violation.

1. Increased operational performance.2. Increased PTBA perception/image.3. Efficiency of goods and services procurement costs.4. No ethics violation such as corruption and authority abuse.5. Increased employee’s integrity.

1PT Bukit Asam (Persero) Tbk - 2012 Sustainability Report

Table of Contents

4 Expansion for Sustainability

5 About This Report

5 Reporting Purpose

5 Reporting Scope and Limitation

6 Reporting Approach and Content

6 Data Measurement Technique

6 Periods and Reporting Guidelines

6 Significant Changes

6 GRI Index

7 Assurance

7 Contact Person

8 Message from the President Director

16 PT Bukit Asam (Persero) Tbk Profile

18 Brief History

19 Coal Resources and Reserves

20 Company Shares

21 Company Vision, Mission, and Values

21 Socialization Vision and Mission

22 Structure of Subsidiary Entities, Associated Entities and Joint Control Entities

23 PTBA Business Group

24 Company Operational Location

25 Organization Structure

26 Line of Business

27 Awards

27 Certification

28 Milestones

30 Stakeholders Management

38 Sustainable Governance

41 Governance Structure

45 Main Governance Policies

49 Code of Conduct

50 Corporate Culture

51 Legal Cases Involving the Company

52 Environmental Conservation for Sustainability

54 Commitment, Policy, and Objectives

56 Accredited Environmental Management

56 Environmental Organization Structure

57 Environmental Training

57 Land Provision and Monitoring

Hal.67

58 Realization of Land Clearance and Reclamation

59 Text Box: Relocation and Resettlement of Above-Kitchen Area, Tanjung Enim

60 Environmental Management

62 Material Consumption

63 Energy Consumption

64 Water Consumption Conservation

66 Mine Water Treatment with Wetland Method68 Emission Control

70 Waste Management and Processing

72 Environmental Monitoring

76 Costs for Environmental Management and Conservation

77 Mine Planning and Post-Mining Implementation

78 Text Box: Plant Nursery Center81 Responsible Mine Closure

83 Awards

84 Boosting National Growth

87 Contributions to the State

88 Partnership Program, Promoting Regional Economic Growth

92 Relationship with Business Partners

92 Products and Services

94 Product Management

95 Quality Control

Bukit Asam Care

Page 102

Message from the President Director

Page 8

Environmental Management

Page 60

2

128 Maintaining Work Safety and Health (WSH)

130 WSH Executive Organization

131 WSH Program Realization in 2012

132 WSH Performance Statistics in 2012

133 Vigilance Towards Emergency / Accident

133 Work Health

134 WSH Audit and Certification

135 Fire Control and Victim Rescue Drill in Confined Areas

138 Independent Assurance Statement

140 GRI Application Level Check Report

141 Cross References with GRI-3.1 & Mining Metal Sectors Supplement

Page 128

Maintaining Work Safety and Health

(WSH)

95 Customer Service

96 Marketing and Promotion

97 Business Development

98 Financial Implication of Climate Change

99 Public Perception

102 Bukit Asam Care

104 Improvement of Community Welfare

105 Partnership and Community Development Program (PKBL)

106 Community Development Program

110 Area Development Program

111 Text Box: “Teranglah Desaku”

112 Managing Sustainable Human Resources

114 Fostering Industrial Relationship with Employees

115 Compliance with Manpower Laws and Regulations

119 Demographics and Number of Employees

120 Competence and Career Development

121 Recruitment

121 Competence Training and Development

122 Performance Appraisal

124 Equal Opportunity in Career Development

124 Remuneration Package

125 Gender Equality in Remuneration

125 Pension Plan

126 Employee Awards

127 Organization Alignment and Human Resources Management System Improvement

127 Excellent Culture Improvement

hal. 23

Cross References with GRI-

3.1 & Mining Metal Sectors Supplement

Page 141


In 2012, PTBA started to realize various expansion programs that have been designed since several years ago. One unit of mine-mouth thermal power plant (TPP) was successfully completed, and another one was still in the development completion. PTBA plans to build a few other mine-mouth TPPs in the next few years.

The expansion is believed to benefit all stakeholders. Power generated from the TPP will be able to fulfill electricity needs of the Company and surrounding community. TPP operation will also benefit environmental conservation effort, through substantial reduction of CO2 emission resulting from coal transportation to TPP stations outside mining area.

Asides from TPP construction, PTBA also increases environmental conservation activities through reclamation, rehabilitation and revegetation of areas surrounding mines as well as outside mines, with support from self-managed Nursery Center.

Expansion for Sustainability

4 PT Bukit Asam (Persero) Tbk - 2012 Sustainability Report

5

Reporting PurposeThe purpose of making this report is to communicate our economic, environmental, and social commitment and performance to the stakeholders and public in a transparent manner. Through this report, we hope that the stakeholders will be able to gain a clear and transparent picture about our sustainable business development activities.

Reporting Scope and Limitation (3.7)

This report discloses all operational performance aspects in the Company’s mining areas and any changes experienced in 2012, including sustainable development, financial condition, and production output. For financial information data such as economic value generated and distributed (refer to Table EC1), the presentation of this report includes subsidiaries’ data that was measured by equity method. Likewise for production output which also includes entire PTBA operation and its subsidiaries.

Whereas for operational data, such as fuel, electricity, and water consumption, this report has not included subsidiaries that are located outside the Company’s main activity area. The limitation of information technology application and physical transaction recording system which has not been fully integrated made the operational data report unable to be fully presented on this reporting period. However if the aforementioned integration effort has been well implemented and carried out, we will present the complete operational data in the subsequent reports, similar to what we did with financial data. Environmental performance aspect of the Company’s contractor has not been covered in this report either. dalam laporan ini.

About

This

Report

PT Bukit Asam (Persero) Tbk - 2012 Sustainability Report

6

About This Report Stakeholders Management

Sustainable GovernanceMessage from the President Director


PT Bukit Asam (Persero) Tbk Profile

Reporting Approach and Content (3.11, 3.5)

The reporting process was done in stages, from the data provision, writing process, editing, and accuracy checking of audit data, until we obtained final draft to be subsequently presented in the final report. Unlike our previous sustainability reports, on this 2012 Sustainability Report we applied a more comprehensive approach in fulfilling Global Reporting Initiatives 3.1 index (GRI 3.1) with the needs of report delivery to external party, namely the stakeholders. This Sustainability Report still emphasizes the reporting of program performance in achieving sustainable development as well as efforts to increase stakeholders’ participation in realizing the development.

Meanwhile the content of this report covers the following: (3.11, 3.6)• Company’soperationalareasofTanjungEnim,Ombilin,Tarahan,KertapatiandJakarta.• Economic,social,andenvironmentalperformanceasrequiredbyGRI3.1 indicators.This

year’s report attempts to present all indicators within GRI 3.1 standard. • Changesthatoccurredfrom1stJanuarythrough31stDecember2012.• OperationalactivitiesrequiredbyGRI3.1indicators.• Operationalactivitiesincompliancewiththelawsorotherregulations.• AdditionalindicatorscontainedinGRI3.1.

Data Measurement Technique (3.9)

We used data measurement technique that is relevant to the sectors being reported and according to the general rules. The information presented is based on materiality principle, that is disclosing information that may influence the stakeholders’ decision making, and may have significant impact towards Company’s economic, social, and environmental performance.

Reporting Period and Guideline This report is an annual sustainability report and the seventh report produced by the Company since 2005. The last Sustainability Report was published by the Company in June 2012. The period of this Sustanability report includes 1st January to 31st December 2012 and was made in reference to Sustainability Reporting Guidelines & Mining and Metal Sector Supplement RG Version 3.1 (GRI 3.1) &/Mining and Metal Final Version (MMSS Final Version) (3.1, 3.2, 3.3).

Significant Changes (3.10, 3.11)

There are no significant changes related to the structure, accounting principle, or data measurement technique from the previous year’s report. Nor are there significant changes related to business structure, shareholding, and organization structure during the reporting period. (2.9) Therefore, the reporting basis does not contain any changes and does not affect comparability principle. (3.8)

GRI Index (3.12)

We appointed Mazars to carry out moderate level of assurance towards this report. The independent assurance report is presented on page xx. This report has fulfilled the requirement of Application Level A+ as contained in the GRI Application Level Checking Report released by National Center for Sustainability Reporting (NCSR) on page 141.

7

Boosting National Growth

Bukit Asam Care Managing Sustainable Human Resources

Maintaining Work Safety and Health (WSH)

Cross References with GRI-3.1 & Mining Metal

Sectors Supplement


Environmental Conservation for

Sustainability

Assurance (3.13)

We appointed Mazars to carry out moderate level of assurance towards this report. The independent assurance report is presented on page xx. This report has fulfilled the requirement of Application Level A+ as contained in the GRI Application Level Checking Report released by National Center for Sustainability Reporting (NCSR) on page xx.

Contact Person (3.4)

Any request, feedback or comment on this report may be submitted to:

Corporate Secretary DivisionPT. Bukit Asam (Persero) TbkJakarta Representative Office Menara Kadin Indonesia 15th floorJln H.R. Rasuna Said Blok X-5 Kav 2-3Jakarta – 12950 IndonesiaTelp. (62 21) 525.4014Fax. (62 21) 525-4002

PTBA Head Office (2.4)PT Bukit Asam (Persero) TbkJln. Parigi No. 1Tanjung Enim – 31716Sumatera SelatanTelp: (62-734) 451-096, 452-352Fax : (62-734) 451-095, 452-993

Website: www.ptba.co.id





Message from

President Director Ir. Milawarma, M.Eng

(1.1)






Sectors Supplement


Sustainability

Developing business that brings positive impact to environment, integrating community development activities with fulfillment of business operational requirements and managing environment before and after mining with responsibility are the Company’s commitment in maintaining sustainability of the earth and its contents as well as balancing economic, social and environmental performances

Dear Our Distinguished Stakeholders,

In order to report PTBA’s performance in supporting the effort of sustaining the earth and its contents in 2012, once again we present Sustainability Report separately from Annual Report for the seventh time. Same as the previous year, we prepared Sustainability Report in reference to the international standard reporting system, i.e. Sustainability Reporting Guidelines & Mining and Metal Sector Supplement RG Version 3.1/MMSS Final Version.

We pay great attention to environmental management, pre- and postmining, to minimize the

impact of our operations

We adopt green mining program by preparing and executing environmental-friendly mining pattern and we implement ISO 9001:2008 accredited quality control system to honor our customers’ trust

In post-mining land management, our principles are “Mining is A Part

of Mine Closure Plan” and “Reclamation is an Investment for

Utilization of Former Mines”

Through the integration of PKBL fund disbursement with fulfillment of the Company’s operational auxiliary needs, we truly show the meaning of growing together





In order to enhance the quality of best governance implementation, during the reporting year we have taken several important steps to ascertain that the principles of accountability, fairness, transparency, independency, and responsibility fulfillment towards stakeholders are continually observed. We conducted several programs to enhance the quality of governance implementation, including:• Enacting all Whistle-blowing System provisions together with the formation of task force in

charge of the system, i.e. Internal Supervision System Work Unit, to enforce accountability and transparency principles.

• Fulfilling compliance principle through environmental audit performed periodically by the central as well as local government.

• Refining Board Manual that gives firm and clear guidelines for Commissioners and Directors’ duty to uphold independency principle.

• Signing the Statement of Compliance towards Code of Conduct by all employees to improve accountability, independency, and equality.

• Setting up definitive Work Unit who monitors the quality of governance implementation and reviews the completeness of internal regulation and policies.

• Issuing quarterly management report, annual report, PKBL annual report and sustainability report to enforce transparency principle.

• Assessing quality of best governance implementation every year.

Moving forward In managing Company’s operations which are environmental friendly and synergized with surrounding community, in early 2012, the Company launched green mining operation strategy and integration of PKBL disbursement with Company’s operation. Green mining implementation shows Company’s commitment to conduct quality mining activities followed by reclamation, rehabilitation and revegetation to conserve environment and involve surrounding community. Integration of PKBL with operational activities shows Company’s commitment to grow with community through establishment of small industrial centers which can help to fulfill supporting materials of daily operational activities.

In 2013, along with the less-favorable coal market condition, PTBA will still continue the strategy by setting business growth and development target according to our annual business plan.

PTBA’s long-term growth strategy is developing business by optimizing potential resources from our operational areas in an integrated manner, i.e. increasing volume and value of coal production as well as starting coal-based business development such as TPP construction, coal gasification and CBM development.






Sectors Supplement


Sustainability

We are optimistic that with this strategy we will be able to achieve our long-term goal, which is increasing stakeholders’ welfare, as well as conserving environment for a better life in the future.

ClosingFinally, allow me, on behalf of the Board of Directors, to thank all the stakeholders for supporting the Company’s efforts to sustain business operations and to balance economic, social, and environmental performance.

We look forward to any constructive suggestion, input, or criticism for the improvement of the next Sustainability Report.

Jakarta, March 2013

Ir. Milawarma, M.EngPresident Director





PT Bukit Asam

(Persero) Tbk

Profile






Sectors Supplement


Sustainability

• BriefHistory• CoalResourcesandReserves• CompanyShares• CompanyVision,Mission,andValues• StructureofSubsidiaryEntities,AssociatedEntities

and Joint Control Entities • PTBABusinessGroup• CompanyOperationalLocation• OrganizationStructure• LineofBusiness• Awards• Certification• Milestones

Page

18-29





Brief HistoryPT Bukit Asam (Persero), Tbk (2.1), currently known as PTBA, further referred to as We or the Company, was established on 2nd March 1981 by virtue of Republic of Indonesia Government

Regulation No. 42/1980. On 23rd December 2002 the Company was listed at the Indonesia Stock Exchange (BEI) under “PTBA” symbol. The

Company is a member of Indonesian Coal Producers Association (APBI) and Indonesian Mining Association (IMA) and classified

as a state-owned enterprise (SOE). (4.13)

Initially the Company operated its coal mining business in two mines, i.e. Tanjung Enim Mining Unit (UPTE) located 200 km southwest of Palembang, and Ombilin Mining Unit (UPO) in Sawah Lunto, 90 km southeast of Padang. Today the Company also operates in the vicinity of Samarinda (East Kalimantan).

In line with the national energy security development program, the Company was assigned by the Government

to develop coal briquette business in Tanjung Enim – South Sumatera, Natar – Lampung, and Gresik - East Java, and

several subsidiaries engaged in coal-related business.

Hence, the Company is now running two business units, i.e. coal mining operation and briquette production. Coal is shipped to

consumers from main ports in Lampung and Palembang (Sumatra) as well as Palaran, Samarinda (Kalimantan). While briquette is directly delivered to nearby consumers. The Company, since end of 2012, has started to operate its own thermal power plant (TPP) to fulfill electricity needs independently, and will also sell the excess power to PLN as new income source. The Company is also trying to exploit Coal Bed Methane (CBM) in its operational areas to be integrated with coal mining operation as a new line of business. (2.2)

As circumstances evolve, the Company’s business pursuant to Article 3 of the Articles of Association has developed with the following activities:- Mining operation covering general research, exploration, exploitation, processing, purifying,

transporting, and trading of mining products particularly coal.- Further processing of mining products particularly coal.- Trading its own production or other’s production result, at home and abroad.- Managing and operating ports and piers specifically designated for coal.- Managing and operating TPP.- Providing consultancy and engineering services in coal-mining related fields and processed

mining output.

At the time of this report, other business units were still in developmental stage.

We operate in Tanjung Enim, South

Sumatra and in Samarinda, South

Kalimantan, managing an area of

over 90,832 hectares, producing

coal with total resources of over

7.3 billion tons, sold to domestic

and overseas markets, and we

arestarting

torealize

economic

potential from the construction and

operation of mine-mouth TPP in

our operational areas.






Sectors Supplement


Sustainability

The Company owns seven mine-mouth TPP development projects which are included in IPP scheme with total power of 5,936 MW

Coal Resources and ReservesThe Company holds and operates Mining Business Permit (IUP) of Production Operation for Tanjung Enim coal mine of 66,414 hectares covering Muara Enim Regency and Lahat Regency in South Sumatera, including:• Air Laya (751/KPTS/Dispertamben/2010, 29th Oct 2010): 7,621 hectares• MuaraTigaBesar(304/KPTS/Distamben/2010,30thApr2010):3,300hectares• BankoBarat(390/KPTS/Tamben/2010,13thApr2010):4,500hectares• Banko-TengahBlokBarat(391/KPTS/Tamben/2010,13thApr2010):2,423hectares• Banko-TengahBlokTimur(389/KPTS/Tamben/1010,13thApr2010):22,937hectares• Banjarsari,Kungkilan,Bunian,ArahanUtara,ArahanSelatan (461/KPTS/HK-KS/Pertamben/2003): 24,751 hectares• BukitKendi(305/KPTS/Distamben/2010,30thApr2010):882hectares

Ombilin coal mine of 2,950 hectares, covering:• LembahSegarandTalawi(05.87.Perindagkop,30thApr2010):2,950hectares

In addition to those Production Operation IUPs, the Company also holds Production Operation IUPs in Peranap, Indragiri Hulu Riau (09/IUP/545-02/IV/2010, 27th Apr 2010) measuring 17,100 hectares and in Palaran, Samarinda (through subsidiary PT Internasional Prima Coal or IPC) with decree no. 454/375/HK-KS/VII/2010, 19th Jul 2010 measuring 3,238 hectares.

Out of total operational areas, only IPC (4.8% of total area) is located close to small-scale mines, resulting in rescheduling of road infrastructure usage. (MM8) While in Tanjung Enim, the Company uses railroad infrastructure (managed by PT KAI) in transporting coal products to the ports. However in overall the Company has never had any agreement or partnership with small-scale mines.





With reference to the resources assessment by an independent consultant, “International Mining Consultant (IMC)” on December 2008, the Company has total coal resources of 7.3 billion tons throughout this Company’s Mining Concession (KP) area. While total mineable reserves reached 1.8 billion tons, excluding mineable reserves in the KP located at Lahat Regency which is still in dispute.

If the mineable reserves at Lahat Regency were included, the Company would have total mineable reserves of over 2,0 billion tons.

Company Shares The Company shares have been traded at the Indonesia Stock Exchange since 23rd December 2002, under the trading name PTBA. On 31st December 2012, PTBA shares closed at Rp15,100,- per share. At that price, PTBA market capitalization amounted to Rp 34.8 trillion. Shareholders of the Company as of 31st Desember 2012, were the Government of Republic of Indonesia (65.02%) and public (34.98%). (2.4-2.7)

Table of Economic Scale of PT. Bukit Asam (Persero), Tbk (2.8)

Period2012 2011 2010

Number of employees 2,953 3,100 3,201

Total net sales (Rp million) 11,594,057 10,581,570 7,909,154

Total capitalization (Rp million):

- Debt 4,223,812 3,342,102 2,281,451

- Equity 8,505,169 8,165,002 6,441,248

Products sold (tons) 15,334,773 13,466,232 12,950,565

Total assets (Rp million) 12,728,981 11,507,104 8,722,699






Sectors Supplement


Sustainability

CompanyVision,Mission,andValues

VisionTo be a world-class environmentally-friendly energy company.

MissionManaging energy sources by developing corporate competence and human excellence to provide maximum added value to the stakeholders and environment.

Values•Visionary : Being able to look forward and develop long-term projection in

business development.•Integrity : Putting forward trustworthy, open, positive, honest, committed and

responsible behaviours.•Innovative : Always working wholeheartedly to obtain a new breakthrough to

produce better products and services than ever before.•Professional : Carrying out all tasks based on competence with creativity, courage,

commitment, and collaboration to improve skills continuously.•Cost-and environment- conscious

: Having high awareness in every operational activity by conducting business based on principles of maximum benefit and environmental concern.

SocializationofCompanyVisionandMissionThe vision and mission statements above are improvement of old statements, formulated at the end of 2012. The statements are the manifestation of Company’s determination to become more active and more involved in sustaining the earth and its contents. The change of vision to become energy company implies the Company’s strong determination to reduce greenhouse emission through transformation of a coal mining company to a coal-based energy company.

To ensure the achievement of vision and mission, the Company periodically socializes the new vision and mission to all employees. Socialization process is conducted in tiers. Vision and mission are explained with top-down approach by top management to all agents who will further explain to their subordinates.

At that stage, various ideas and suggestions from the bottom level are simultaneously screened and further integrated as strategies to achieve vision and mission. As a result, all general strategies compiled are easier to be understood and adopted by all functions as essentially the strategies are based on input from the bottom. Through the tiered and reciprocal approach, the vision and mission are attainable in the near future, considering that all accompanying programs and the efforts to achieve them basically come from all employees. (4.8)





Structure of Subsidiary Entities, Associated Entities and Joint Control Entities

PT Bukit Asam (Persero) Tbk

COAL MININGLINE OF BUSINESS

PT BukitPembangkitInnovative

59,75%

PT Bukit AsamPrima

99,99%

PT Bukit AsamTranspacific Railway

10%

PT Bukit AsamMetana Peranap

99,99%

PT Bukit AsamMetana Enim

99,99%

PT Bukit AsamMetana Ombilin

99,99%

PT Bukit AsamBanko

65%

COALTRADING TRANSPORTATION

COAL BEDMETHANE

POWERPLANT

PT Batubara BukitKendi

75%

PT Huadian Bukit Asam

Power

45%

PT InternasionalPrima Coal

51%






Sectors Supplement


Sustainability

PTBA Business Group (2.3)As business develops, the Company currently owns ten subsidiaries with majority shareholding. The subsidiaries’ operations are synergically related to the Company’s business, such as coal mining, briquette processing, coal transportation, thermal power plant (TPP), coal trading, and methane gas (CBM) mining. PTBA Business Group currently consists of:

Company Name Year Established

Line of Business Status Ownership

PT Batubara Bukit Kendi 1996 Coal mining Operating** 75%

PT Bukit Pembangkit Innovative 2005 Thermal power plant In development 59.75%

PT Bukit Asam Prima 2007 Coal trading Operating 99.99%

PT Bukit Asam Metana Ombilin 2007 Methane gas mining Not operating yet 99.99%

PT Bukit Asam Metana Enim 2007 Methane gas mining In development 99.99%

PT Bukit Asam Metana Peranap 2007 Methane gas mining Not operating yet 99.99%

PT Bukit Asam Banko 2008 Coal mining Not operating yet 65%

PT Bukit Asam Transpacific Railway 2008 Coal transportation Not operating yet 10%

PT Internasional Prima Coal 2008* Coal mining Operating 51%

PT Huadian Bukit Asam Power 2012 Thermal power plant In development 45%

* PT Internasional Prima Coal was acquired by the Company in 2008 ** Mining Operation was suspended temporarily

PTBA has ten subsidiaries with

majority ownership





24 PT Bukit Asam (Persero) Tbk - Laporan Keberlanjutan 2012

Company Operating Location

IndonesIa

Laut Cina SelatanLaut Cina Selatan

Indian Ocean

JAVA

KALIMANTANSUMATERA

Pekanbaru

Padang

JakartaLampung

Palembang

Samarinda

Gresik

PERANAPMining ConcessionResources : 0.80 billion tonsMineable reserves : 0.27 billion tons

OMBILINMining ConcessionResources : 0.10 billion tonsMineable reserves : 0.02 billion tons

TANJUNG ENIMMining ConcessionResources : 6.35 billion tons Mineable reserves : 1.59 billion tons

SAMARINDA - IPCMining ConcessionResources : 0.045 billion tonsMineable reserves : 0.01 billion tonsCompany Ownership : 51%

JAKARTARepresentative Office

TELUK BAYUR PortStockpile : 90,000 tonsCapacity : 2.5 million tons/yearShip : Max. 40,000 DWT

KERTAPATI PierStockpile : 50,000 tonsCapacity : 2.7 million tons/yearShip : Max. 8,000 DWT

TARAHAN PortStockpile : 560,000 tonsCapacity : 12 million tons/yearShip : Max 80,000 DWT

TANJUNG ENIM Briquette FactoryCap. 12,000 tons/year

LAMPUNG Briquette FactoryCap. 8,000 tons/year

GRESIK Briquette FactoryCap. 95,000 tons/year

12

2

3

1

4

3

1

23

Company Operational Location (2.3, 2.7)










Sectors Supplement


Sustainability

25

OrganizationStructureThe Company establishes a dynamic, efficient, and effective organization structure that is aligned with industry development and able to support optimum performance growth. PTBA

MUHAMMAD HATTAHR SM.

CHAIRUNNI BARKATIBUKIT ASAM HOSPITAL HEAD

MULIATOLEGAL AND LICENSING SM.

DANANG SUDIRA RAHARJACORPORATE SOCIAL RESPONSIBILITy SM.

UDJANG MULYANASECURITy MGR.

BAMBANG SULISTYANTOFACILITIES AND INFRASTRUCTURE SM.

SUHEDILAND & BUILDING ASSET MANAGEMENT SM.

nOViAnSuRiLOGISTICS SM.

ISKANDAR SURYA ALAMSM. PEMASARAN

MARKETING

ISKANDAR SURYA ALAMMARKETING SM.

SYAIfUL ISLAMCORPORATE PLANNING SM.

SURYO EKO HADIANTOCORPORATE DEVELOPMENT SM.

SUHERMANACCOUNTING AND BUDGETING SM.

ADIB UBAIDILLAHTREASURy AND FUNDING SM.

ENDANG PURNOMOCORPORATE DEVELOPMENT SM.

ERDAWATIHEALTH PROGRAM MGR.

JOKO PRAMONOCORPORATE SECRETARy

BAMBANG SUTRISNOINTERNAL AUDIT UNIT SM.

ERfAN SAYUTHICORPORATE MANAGEMENT SySTEM SM.

fLIDELIN KATILIANALySIS, EVALUATION AND PRODUCTION

OPTIMIzATION SM.

WIBISONOTANJUNG ENIM MINING

UNIT GM

ANSYORI AKHMADTARAHAN PORT UNIT GM

AHMAD SAICHUKERTAPATI PIER UNIT GM

MOCHAMAD JAzULIOMBILIN MINING UNIT GM

HERI SUPRIYANTOOPERATIONS/PRODUCTION

DIRECTOR

ANUNG DRI PRASETYABUSINESS DEVELOPMENT

DIRECTOR

M. JAMILCOMMERCE DIRECTOR

MAIzAL GAzALIHR & GENERAL AFFAIRS

DIRECTOR

MILAWARMAPRESIDENT DIRECTOR

ACHMAD SUDARTOFINANCE DIRECTOR

DJOKO BUDI SANTOSOBRIQUETTE BUSINESS

UNIT MGR.

CorporateOperational Unit





Sectors Supplement





Line of BusinessThe Company is currently running two main business operations, i.e. mining and distributing coal to industrial customers, and producing coal briquette for industrial and residential customers. All of coal customers are industrial customers, while for briquette product, 80% of customers are from farm industry, and the rest is residential and small-business customers. All of the Company’s business operation is conducted in Indonesia. (2.5, 2.7)

The Company’s coal products come in various types depending on the calorie caloric content and other specifications, as detailed below:

Coal Brand CV TM IM ASH VM fC TS

MAx. HGI

Kcal/kg,adb Kcal/kg,ar (%,ar) (%,adb) (%,adb) (%,adb) (%,adb) (%,adb)

BA 55 5,500 4,550 30 15 8 39 38 0.8 50

BA 59 5,900 5,000 28 14 7 39 40 0.8 50

BA 61 6,100 5,000 28 12 7 41 40 0.8 50

BA 63 6,300 5,550 21 10 6 41 43 0.8 55

BA 67 6,700 6,100 16 8 6 42 44 0.8 55

BA 70 LS 7,000 6,450 14 7 4 42 47 0.7 55

BA 70 HS 7,000 6,450 14 7 4 42 47 1.2 55

BA 76 7,600 7,400 5 2 8 14 76 1.2 -

The Company produces two types of briquette products, which are carbonized briquette (super) in Tanjung Enim Business Unit, South Sumatera, and non-carbonized briquette (NK) in Lampung Business Unit and Gresik Business Unit. Until this reporting year, the Company’s other product segments have not operated commercially.






Sectors Supplement


Sustainability

Awards (2.10)

3rd March 2012 : Business Entity Who Cares About Sport in Indonesian Sport Conferment 2012, awarded by Minister of youth and Sports.

25th April 2012 : Best Fraud Prevention and Perfomance Management, in Mining Company category in Asia Anti Fraud 2012.

10th Juli 2012 : Indonesia Green Awards 2012 in selection of Company Who Cares About Environment from Bisnis dan CSR magazine in cooperation with Ministry of Forestry and Ministry of Industry.

31st Juli 2012 : Green CEO for PTBA President Director from Warta Ekonomi Magazine.

28th September 2012 : GKPM Awards (Community Empowerment Trophy), PTBA received:

Gold Award for :• “AyoSekolah=Let’sGotoSchool”Scholarship

Program, Education category.• Supplemental Food Program for Nursing

Mother, Social category.• Supplemental Food Program for Infant, Social

category.Silver Award for PTBA Employees Cooperative.

04th October 2012 : National Social Solidarity Awards 2012 from Coordinating Minister of People’s Welfare.

In the event: GKPM Awards (Community Empowerment Trophy)

21st November 2012 : 4th Rank for Good Corporate Governance in Anugerah Bisnis Review, selection of 250 best companies in Indonesia.

22nd November 2012 : Best State-Owned Enterprise in Corporate Governance Implementation and Obligation Fulfillment Towards Stakeholders from Indonesian Institute for Corporate Directorship (IICD).

3rd Desember 2012 : “GREEN RATING” of PROPER Environment for the 4th time from Ministry of Environment.

“Runner Up of Best Sustainability Report in 2012” which showed appreciation of independent parties (NCSR) on CSR program, environment, and Human Rights exercise in the Company scope

CERTIfICATION: (4.12)

ISO 9001: 2008 Quality Control Management

ISO 14001: 2004 Environmental Conservation Management

OHSAS 18001: 2007 Work Safety Management

ISO / TEC 17025.2007 Laboratory Quality Management





Milestones

29th february

2012

5th March 2012

July2012

Ratification of Whistle-blowing System (SPP) Guideline.

Signing Collective Labor Agreement 2012-2014 by President Director of PTBA, Milawarma, and Chairman of SPBA, Rakhmatullah, witnessed by Minister of Workforce and Transmigration, Muhaimin Iskandar.

Became the Main Sponsor of Indonesia Open Grand Prix Gold 2012 in Badminton Championship.






Sectors Supplement


Sustainability

3rd October

2012

October – December

2012

8thNovember

2012

Signing of Management Commitment towards SPP Implementation.

Minister of Forestry’s visit in conjunction with inauguration of Trees Planting Program in Watershed (DAS), Sungai Musi.

Signing of Statement of Compliance towards Code of Conduct by all PTBA employees.





Stakeholders

Management






Sectors Supplement


Sustainability

Page

32-37





PTBA regards the business sustainability in the long term is very closely related with the capability of management and their staffs in interacting and building positive and mutually beneficial relationship with the stakeholders. The interaction, for the stakeholders, implies the understanding and fulfillment of all expectations. While for the Company it implies the understanding and attempt to fulfill the stakeholders’ expectation using existing resources, as efficiently as possible and in an accountable manner.

Therefore, the Company strives to meet both interests through stakeholders management. In the operational business activities, PTBA has carefully identified main stakeholders groups with dominant influence towards business continuity. The stakeholders consist of shareholders/investors, employees, Government / Regulator (as shareholder or as regulator – through Bapepam-LK), business partners/suppliers (vendors), customers, creditors, surrounding community, and mass media.

The Company believes that limited involvement of the stakeholders in discussing various problems faced by PTBA in its work plan realization will provide important contribution to fulfill the expectation. The limited involvement takes in the form of providing constructive suggestion through the provided forums, such as General Meeting of Shareholders etc. but it shall not violate the provisions as set forth in Articles of Association and the prevailing laws and regulation.

Essentially the involvement is emphasized more on the effort to build intensive, structured, and constructive communication, so that the Company may understand the stakeholders’ expectation clearly. On the other hand, the stakeholders may understand how far the efforts made by the Company to fulfill the expectation and even anticipate how far the expectation is fulfilled. Therefore, in order to give overview of the Company’s ability to fulfill the stakeholders’ expectation, PTBA regularly communicates operational outputs through various media to receive feedback, in the form of expectation and goal targeted by the stakeholders.

Stakeholders EngagementIn order to maintain and improve the benefits of positive and constructive communication as mentioned above, and according to all provisions contained in Articles of Association and the prevailing laws and regulation, the Company conducts intensive communication and manages stakeholders’ involvement in accordance with the characteristic of expectation of each stakeholder group. Brief description of interaction and engagement of stakeholders in maintaining the Company’s business sustainability is as following. (4.14, 4.15)

a. ShareholdersPTBA manages interaction with shareholders/investors through Investor Relations Manager. The Company applies transparency principle in providing information to the investors. This interaction is maintained by Investor Relations Manager. As a form of commitment in applying transparency principle, the Company organizes various events for shareholders/investors, either through direct or indirect interaction.

Direct interaction takes in the form of dialog forum that is conducted in various formats, including: • Plant Visit, shareholders/investors visit the main operation site directly.• Non-deal road show, the Company’s management visits the prospective or existing

shareholders/investors’ forum.






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Sustainability

• Conference-call, dialog or communication via phone/multimedia with shareholders/investors, with intensity as required by the investors.

• Investor gathering, meeting with shareholders in specific moments, such as during Company’s anniversary, ceremony of project completion, etc. Organized as required.

• OrganizesAGMSonceayearandEGMSasrequired.• One on One Meeting

During 2012 and 2011, the Company has organized the following activities with the Investors:

Activity name 2012 2011

Non-deal road show 8 5

One on One Meeting 164 125

Conference-call 8 7

Site visit 6 5

RUPSLB - 1

RUPST 1 1

Analyst Meeting 11 3

One on One MeetingIndirect interaction is conducted through delivery of various news or reports and services to shareholders/investors indirectly. Whereas services to investors and shareholders are provided through: • providingperiodicorspecialreports,suchasFinancialStatements,MonthlyExploration

Reports, Coal Sales and Purchase Reports.• newspublishing/pressreleaseforsignificanteventsrelatedtoCompany’soperation.• managingandreportingshareadministration.• executingsharesdecisionwell.

The Company has also launched www.ptba.co.id website to maintain this interaction for 24 hours a day. The purpose of all interactions above is to promote the Company’s image and to provide the latest operational information accurately as well as to understand the shareholders’/investors’ expectation.

b. Government/RegulatorAs a state-owned enterprise (SOE), the Company fosters a positive interaction with the Government, central as well as local government, particularly those related to its line of business with the aim of “Becoming a valuable asset to the nation”. The Company builds reciprocal communication in making mining business rules, carrying out Partnership and Community Development (PKBL) / Corporate Social Responsibility (CSR) program, paying taxes, royalty, and dividend, conserving the environment, and participating in the construction of public facilities and infrastructure. The Company also facilitates direct work visit by the Government/Regulator to the mining location with the frequency as needed. For example, in 2012, the Company welcomed Minister of Forestry’s visit in inaugurating “Watershed Greening in South Sumatera” program.





Considering that the Government is the main PTBA shareholder, the Company also provides all services and conducts direct and indirect interaction properly, either through the shareholder’s representative (i.e. Board of Commissioners) or the relevant Minister.

In addition, since the Government is also a regulator (through Bapepam-LK), the Company manages constructive relationship by complying with all prevailing provisions in capital market, considering that the Company’s share is already listed in Indonesian capital market, Indonesia Stock Exchange (BEI).

c. Employees Reciprocal interaction with employees, as one of the stakeholders, is evidenced by the Company honoring its commitment to maintain and keep conducive work environment. The Company seeks to create the conducive environment through human resources management that is able to maintain the balance between fulfillment of employees’ expectation on good remuneration system, clear and fair career development, and enhancement of employee competence, with the Company’s needs to efficiently and effectively run all operations to ensure sustainable business growth. The commitment is realized through a series of strategic measures in managing human resources as follows: • Developing and realizing personnel competence and grooming professional candidates

for management/leadership level.• Aligningorganizationandimprovinghumanresourcemanagementsystem.• EnactingincentivesystemtoencourageemployeestodotheirbestfortheCompany’s

growth and development.• ConductingdialogswithLaborUnion(representativeofallemployees)indeveloping

Collective Labor Agreement, as a guideline of the Company’s relationship with the employees.

• ConductingregularmeetingsbetweentheemployeesandtheCompany’sManagementas a direct dialog forum to receive input or as an announcement medium for any program/plan that needs everyone’s attention.

e. Business Partner / Supplier(Vendor)For the Company, business partners/suppliers (currently there are approximately 2,500 suppliers) are stakeholders with the strategic role as part of business chain. Therefore the Company fosters interactions with the suppliers based on professionalism.

With professionalism, the Company adopts long-term reciprocal relationship which supports each other. In order to maintain the relationship, the Company also sets several requirements such as quality standard, management and work safety system (SMK3), and environmental management system (SML).






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Sustainability

As a commitment to develop long-term relationships with the suppliers, the Company organizes a number of programs such as: (1) specific joint program and (2) training program for local suppliers with certain scale.

During 2012 and 2011, the Company has organized the following activities with the suppliers.


Task force 12 12

Coordination meeting 6 5

e. Customers Customer satisfaction is a benchmark of successful business sustainability. Being a customer-oriented company, the Company is committed to providing the best service according to the established standards and customers’ expectation. Therefore, besides product reliability, other measures aimed at maintaining customers’ trust are taken by the Company, including:• providinginformationandeducationtocustomers,asrequired• visitingminingsitesasrequired,and• openingcustomerservicecenter.

f. Creditors In the reporting period, the Company did not have substantial loan yet. However,

along with the realization of various development projects that are underway and will be carried out, the Company will need creditor’s role substantially. To maintain and anticipate the future relationship, the Company organizes various events with potential creditors, such as:• Non-dealroadshow,asrequired.• Clubdeal,asrequired.• Conference-call,asrequired.• Plant/Projectvisit,asrequired.





g. Surrounding Community As stakeholders living around the site, the community received the Company’s serious attention. To interact with the community, the Company fulfills its corporate social responsibility through Partnership and Community Development Program (PKBL) and Area Development Program to enhance community economic potentials and to improve their living standard.

h. Mass MediaThe Company is engaged in intense communication with the mass media, as partner in informing operational progress to other stakeholders. The relationship developed is a constructive one that benefits each other. The media needs the news to be broadcasted to the readers / public, while the Company needs media to deliver information about its operational success or its business plan. PTBA fosters relationship with the media with transparency principle. Therefore the Company conducts specific events related with the mass media, namely:• Pressrelease,deliveringnewsaboutthesuccessorrealizationofbusinessplantothe

mass media without face-to-face event.• Pressconference,deliveringnewsdirectly,alongwithQ&Asession.

Both events are conducted as required. During 2012 and 2011, the Company has organized the following activities with the media.


Press release issued by the Company 18 13

Press release published in the mass media 8 10

Press conference 5 4

Media Visit 1 1






Sectors Supplement


Sustainability

All of the Company’s efforts in stakeholders engagement can be referred to in the relevant topics, and shown in the summary table as follows.

Stakeholders Engagement (4.4, 4.14 - 4.17)

Stakeholder Type

Method of Engagement frequency of Meeting

Stakeholders’ Expectation

Customers • Customercomplaintmanagement

• Customerservicecenter

- Adjusted- Adjusted

1. Guaranteed quality.2. Safety in delivery and usage 3. On-time delivery.4. Services beyond expectation.

Shareholders and Investors

•GeneralMeetingofShareholders (GMS)

•Investorroadshows•Investorgathering•Plantvisit

Minimum •onceAdjusted •

1. Menjaga dan meningkatkan nilai investasi melalui peningkatan kinerja Perseroan.

2. Terpenuhinya hak-hak pemegang saham, mayoritas maupun minoritas.

3. Keterbukaan informasi terhadap hal-hal yang substantial dan kejelasan arah pengembangan usaha

4. Menghormati hak-hak pemegang saham sesuai UU, Peraturan, AD/ART.

Employees • ThroughPTBALaborUnion

• HRorganizationalignment

• Routinetraining/hearing

Min. once a year or as required

1. Clarity of rights and obligations.2. Clarity of competence assessment, career

development, and fair remuneration with performance.

3. Equality in career development and remuneration.4. No discriminatory practice.5. Guaranteed work safety, health, and security.6. Good work environment.

Government / Regulators

Bipartite Meeting•Hearing with •ParliamentWork Visit to Field•

- Adjusted

- Adjusted

- Adjusted

1. Harmonious, constructive, and honest relationship with regulators.

2. PTBA and all employees observe and obey the law

3. PTBA brings positive contribution to surrounding community.

Business partners (vendor,supplier, agent, reseller,installer)

• Specifictrainingforoperational partners

• Contractbiddingandprocurement

• Management• Supplierassessment

and management

Min. once a year 1. Fair and transparent procurement process.2. Objective selection and evaluation of business

partners.3. Accurate and simple procurement administration. 4. On-time product and services payment.5. Mutually beneficial relationship

Creditors • Plantvisit• Conferencecall• Clubdeal• CorporateAction

Plan Presentation

- Adjusted- Adjusted- Adjusted- Adjusted

1. Clarity of development plan.2. On-time loan payment.3. Transparency on operational situation.4. Update on the latest operational situation.

Mass media • Pressrelease• Mediagathering• Pressconference

- Adjusted- Adjusted- Adjusted

1. Accurate news.2. Latest information.3. On-time news delivery.4. Transparency on operational situation.

Community • Discussiononplanning

• Jointsupervisionofprogram realization

• Philanthropicactivities

- Adjusted- Adjusted- Adjusted

1. Harmonious and beneficial relationship.2. Minimizing operational impacts on the

environment.3. Participation in environmental conservation

activities.4. Revegetation and reforestation program.5. Positive contribution towards economic and

social life as well as environment in surrounding community.





Sustainable

Governance

(4.1, 4.4)






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Sustainability

• GovernanceStructure• MainGovernancePolicies• CodeofConduct• CorporateCulture• LegalCasesinvolvingtheCompany

Page

40-51





PTBA believes that good and consistent implementation of Good Corporate Governance (GCG) along with the improvement of integrity will support the Company’s operations as it allows better decision making, improved operating efficiency and services to the stakeholders, and eventually increased corporate value. Likewise, stakeholders’ satisfaction will be enhanced by maximizing financial achievement and minimizing investment risk, preventing conflict of interest,

and boosting investors’ trust.

For PTBA, the implementation of GCG best practice is the key of all accredited operational system that is currently being

referred to in daily activities. Therefore, the Company considers periodic evaluation as an important process to enhance the quality

of best governance implementation and continuously reflect the latest Company’s condition.

The goals of implementing GCG throughout the Company are as follow:• Directing and managing the relationship among shareholders, Board of Commissioners,

Board of Directors, employees, customers, business partners, community, and environment.• Managingresourcesmoreefficientlyandresponsibly.• Managingrisksbetter.• Increasingaccountabilitytostakeholders.• PreventingirregularityinthemanagementoftheCompany.• Promotingworkethos.• EnhancingtheCompany’sgoodimage.

The Company’s consistency and success in implementing good governance have earned the Company several awards from independent institutions, which are: • Best Fraud Prevention and Perfomance Management, from Asia Anti Fraud 2012.• Indonesia Enterprise Risk Management Award 2012, for State-Owned Enterprise (SOE) in

Coal Mining Industry from Business Review Magazine.• The Best in Building and Managing Corporate Image, from Bloomberg Business Week

Indonesia magazine & Frontier Consulting Group.• 1st Rank Indonesia Best Public Companies 2012 in Category energy based on WAI (Wealth

Added Index) Method from SWA magazine• Indonesia Green Awards 2012 from Bisnis dan CSR magazine in cooperation with Ministry

of Forestry and Ministry of Industry.• Best SOE, from Indonesian Institute for Corporate Directorship (IICD) in Corporate

Governance implementation and Obligation Fulfillment towards Stakeholders, according to Public Companies standard in Five Asean Countries.

We always strive to improve

the quality of governance

implementation as an integrated

operation by maintaining

positive interaction with all

stakeholders based on five basic

principles on governance and at

the same time ensuring business

sustainability in the long term.






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Sustainability

Board of Commissioners

Shareholders

Customers Employees Community

General Manager / Senior Manager

GOVERnAnCESTRuCTuREOf (4.1)PT BUKIT ASAM (PERSERO) Tbk

Committee of Business Risk, Nomination,

Remuneration & HRD Audit Committee

Corporate Secretary

Corporate Management

SystemInternal Audit

Unit

Board of Directors

President Director

functional Directors

Governance Structure PTBA as one the SOEs that operates under Limited Liability Company Law No. 40/2007 (UU PT), new SOE law No. 19/2003 has two-board system, i.e. Board of Commissioners and Board of Directors whose duties are clearly stated in the law and the Articles of Association. Within the framework of law, the function of Independent Director in a company with one-board system is delegated and performed by Board of Commissioners in two-board system. Under the law and the two-board system, the Company’s governance structure requires interaction among the main corporate organs, i.e. General Meeting of Shareholders (GMS), Board of Commissioners, Board of Directors, and Supporting Committees under the Board of Commissioners. (4.1)





General Meeting of Shareholders (4.4, 4.7, 4.10)General Meeting of Shareholders (GMS) is the highest organ in the Company’s governance structure. GMS is a forum where shareholders can act on an equal footing to adopt important resolutions associated with their investment in the Company. GMS is also a shareholders’ forum to make important decisions related to and based on the business interest of the Company. At Annual GMS or Extraordinary GMS, shareholders may exercise their rights, voice their opinion and cast their votes on an equal footing. (4.4)

GMS is also a forum to evaluate the accomplishment of Board of Directors and Board of Commissioners by assessing the Key Performance Indicators (KPI) achievement. The KPI clearly sets the targets of Company’s performance in economic, social, environmental, and work safety and health aspects, as well as other aspects such as service to customers,

perception towards Company, compliance with laws and regulation, and many more. (4.10)

Whereas employees submit their recommendation or opinion to Board of Commissioners and Board of Directors through their representatives in labor union or any other organization acting on their behalf.

Board of Commissioners and Board of DirectorsIn two-board system, Board of Commissioners and Board of Directors have differing duty and authority (fiduciary responsibility) in accordance with the law and the Company’s Articles of Association. However, since each function should be independent, no Commissioner has a dual function of concurrently being a Director, either in the parent company or the subsidiaries. (4.3)

Additionally, in the reporting year, no Commissioner in the entire group of the Company functioned as executive officer. Likewise, member of Board of Directors was not allowed to serve concurrently as one level below his/hers. (4.2)

The Company holds monthly meetings of Board of Directors and Board of Commissioners to evaluate the Company’s performance as set forth in KPI. The KPI asserts the minimum threshold of economic, social, and environmental performance, compared to the plan. These meetings also discuss any other proposal that is unrelated to business plans. (4.10)

To ensure oversight independency, at least 20% of total Commissioners are Independent Commissioners, one of whom is

appointed Head of Audit Committee. Likewise, at least 20% of total Directors shall come from outside the Company. (4.3)

Dual function restriction for Commissioners either as Directors or Executives, and minimum number requirement of Independent Commissioners are to minimize and prevent conflict of interest in decision making. (4.6)

At GMS, all shareholders have equal rights to resolve important

matters related to and aimed at business sustainability

To ensure independency in decision making, dual function between

Commissioners and Directors is not warranted






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Sustainability

Commissioners and Directors are elected, nominated, and terminated by GMS. Election is made through fit and proper test, which covers basic knowledge on social, economy, and environment. (4.7)

Remuneration of Commissioners and Directors (4.5)The sum of remuneration is determined annually at GMS by the recommendation of Remuneration Committee. Amount of remuneration is based on their duty and responsibility and it commensurates with their performance.

Commissioners and Directors receive fixed and incidental remuneration consisting of annual gross base salary (honorarium for Commissioners), total cash, total earnings, and total remuneration as well as other facilities and allowances as recommended by Nomination and Remuneration Committee. Remuneration paid to Commissioners and Directors may differ among them depending on their respective duty and responsibility. Total remuneration paid to Commissioners and Directors is reported in GMS.

Basically, pursuant to Regulation No. Kep-100/ MBU/2002 on evaluation of SOEs’ business soundness, the Company’s performance is evaluated in three aspects, which are financial (weight 67.5%), administrative (weight 14%), and operational. Board of Directors’ tantiem is also determined by social and environmental accomplishments as part of administrative performance evaluation, i.e. effective partnership fund disbursement with 2% weight (maximum 3%) and turnover rate of loan repayment with 3% weight (maximum).

Measurements of economic, environmental, and social performance, including in managing risks and tapping business opportunity, are part of KPI applied to Board of Directors and Board of Commissioners. KPI is reviewed periodically and reported to GMS, and used as the basis for determining the Management’s tantiem. (4.9)

Board of Commissioners The primary duty of Board of Commissioners is overseeing in a general and specific manner in accordance with the Articles of Association and giving counsel to the Board of Directors in managing the Company, including overseeing compliance with all prevailing regulations in all operational activities. This mechanism will prevent the Company from monetary penalties or other sanctions for violation of provisions of existing regulations. (SO8)

The Company’s Board of Commissioners currently consists of six people. One of them is the President Commissioner who leads the Board and two of them are Independent Commissioners making up 33 percent of the Board as required in the LLC Law. (4.3)

The current composition of Board of Commissioners is as follows: President Commissioner Dr.Patrialis Akbar, SH, MHCommissioner Ir. Robert HeriCommissioner DR. Ir. Thamrin Sihite, MECommissioner Drs. Imam Apriyanto Putro, SE. MM.Independent Commissioner Suranto Soemarsono, SE. MA.Independent Commissioner Ir. Abdul Latief Baky, SH. MHum. MSc. FIQ

We propose the remuneration through Committee of Business Risk, Nomination, Remuneration & HRD to Series A Shareholders in differing amounts depending on the Commissioners and Directors’ respective duty and responsibility.





The Board submits its accountability report at least once a year during GMS. In performing its duties, The Board is assisted by several Committees that are established by and responsible to the Board. The Committees include: Audit Committee, Remuneration, Nomination and HRD Committee, and Insurance and Mining Risk Committee. The result of Commissioners’ performance evaluation will be used by GMS as indicators in remunerating, re-appointing and terminating them. (More description on the duties of Commissioners and Board of Commissioners can be referred to in PTBA 2012 Annual Report).

Board of DirectorsBoard of Directors is collectively in charge of and responsible for managing the Company for the benefit of the Company in accordance with corporate purpose and objective to ensure that all resources are highly utilized. Directors perform and make decisions according to their respective duty and authority but the performance of each Director remains the Board’s collective responsibility. Directors are nominated and terminated by GMS resolution.

The current Board of Directors is composed of President Director and five Directors as follows:President Director: Ir. Milawarma, M.EngFinance Director: Achmad Sudarto, SE, Ak, MMOperations/Production Director: Ir. Heri SupriyantoBusiness Development Director: Ir. Anung Dri Prasetya, M.EngCommerce Director: M. Jamil, SE, Ak, MMHR & General Affairs Director: Ir. Maizal Gazali, MM

Variousactivitiesof Board of

Commissioners and Board of Directors as

form of the Company’s concern towards Environment and

Community






Sectors Supplement


Sustainability

Main Governance PoliciesThe Company has compiled and formulated a series of operating policies with respect to good corporate governance practice to complement GCG Code, which cover the following:

• Internal Audit and Control The Company develops an effective internal control to protect the Company’s investment

and asset from irregularities. The function of Internal Audit and Control is performed by Internal Audit Unit (SPI) and External Auditor.

To perform the task of monitoring and prevention of violations and fraud, every SPI staff has received adequate education and training of audit procedures and the detection of irregularities such as fraud auditing, investigative audit, and advanced internal auditing. In the reporting year, the Company also conducted training on Fraud Detection, Prevention and Investigation for all personnel from SMP, SPI, Legal, and HRD. Therefore the number of employees who have participated in the corruption prevention training is currently 39 people, or approximately 0.01% of total employees. (SO3)

SPI conducts periodic audit to detect irregularities, test the reliability of internal control system, give quality assurance, and enhance the accountability and transparency of business process. Priority is given to units vulnerable to corruption and irregularity, such as procurement, project development, finance, and sales. In 2012, audited units accounted for 40% of the Company’s total business units. The figure represented all business units vulnerable to corruption and no fraud was detected. (SO2)





• Corruption Prevention Policy (SO3, SO4) The company prevention policy is set in the GCG Code and its derivative policy, which is

the restriction to give and receive gifts, bribery, and the like. Policy concerning business and work ethics are explained in more details in Code of Conduct.

In implementing Code of Conduct and preventing corruption and other violations of Code of Conduct, PTBA has developed Whistle-blowing System whose operation started since the signing of Management Commitment towards Whistle-blowing System on 8th November 2012. Board of Directors and Labor Union signed their commitment towards the System on 12th December 2012, as witnessed by Deputy of State Minister of SOE and Deputy of Corruption Eradication Commission (KPK) as well as national and local media in South Sumatera.

• Rules and Procedures of Whistle-blowing System In the reporting year, the Company officially enacted the rules and procedures of Whistle-blowing System (SPP), with the Joint Decree of Board of Commissioners and Board of Directors of PT Bukit Asam (Persero) Tbk No. 03/SK/PTBA-KOM/II/2012 and No. 049/KEP/Int-0100/PW.01/2012 on 29th February 2012, concerning the system. The Company sets the SPP for various purposes, including: • Creating a favorable climate to encourage people to report any misconduct that may

result in financial or non-financial losses (that may tarnish the Company’s image); • Minimizinglossesasaresultofmisconductthroughearlywarningsystem;and• Designingearlywarningsystemmechanismtoanticipateanyproblemarising from

misconduct.

Further actions related to the enactment include: • EstablishmentandAppointmentofSPPManagementTeam,throughBoardofDirectors

Decree No. 277/KEP/Int-0100/PW.01/2012 dated 10th October 2012.• SigningofManagementCommitmenttowardsSPPimplementation.• SigningofDeclarationofCompliancewithCodeofConductbyallPTBAemployees.• Internalsocialization,and• Public statementofCompany’s commitment towards the implementationofGCG

best practices.

To ensure the effectiveness of misconduct control and early warning system, the Company takes necessary measures including: providing misconduct reporting media (hot line, email, special mailbox), setting reporting procedures, and defining types of misconduct that may be reported. To encourage people to report, the Company establishes procedures that will protect the identity of the witnesses and the investigating officers. (HR3, SO3)

Stern sanctions on corruptive acts are also enforced, involving termination of employment followed by appropriate legal action. This policy is a reflection of the Company’s contribution to corruption eradication. (SO4)

We established the Rules and Procedures of Whistle-blowing

System as part of our contribution to eradicate corruption.






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Further actions related to this policy are:• Commissioners and Directors set up SPP Unit.• Establish SPP Unit organization, personnel job description and specification; select

candidates and appoint personnel consisting of:o Protectors of witnesses o Investigating officers o Administrative staff

• Equip SPP staff with training and comparative study, and prepare facilities and instruments, such as:o Office space, office equipment, communication instrument o Reporting media (hot line, email, special mailbox)

• Write up system documents:o SPP manual o Reporting procedure o Reporting manual (type and gravity of misconduct to be reported to and processed

by SPP unit) o Separate document for sanction for false accusation and slander, protection of

confidentiality, and witness protection policy to be endorsed by Directors or Commissioners

o Witness rights in case of abusive action and the right to appeal and to report to the authorities

o Declaration of compliance with SPP to be signed by Directors, Commissioners, and Bukit Asam Labor Union (SPBA)

• Prevention of Political Involvement (SO5, SO6)The Company is firm about separating business interest from political interest. It strictly forbids the use of assets or the gift of donation to any political party outside the prevailing law. No donation has ever been given by the Company to any political party or politician.

It is the Company’s policy for any employee who holds an executive position in a political party to resign or release that position which should be proven in written statement. Coercing any employee into expressing political aspiration is prohibited. Decision to have political involvement and to use personal resources is entirely at employee’s personal risk.

• Risk Management (EC9, 4.9, 4.11)The Company establishes an integrated risk management at the corporate level involving every work unit. Development of Risk Management System is part of the Company’s long term strategy by forming special work unit to handle this matter systematically in accordance with the referred risk management standard.

Implementation of the integrated, systematical, and comprehensive Risk Management System began on 1 July 2006. It is a structured, systematical, and recurring process for a continuous improvement of risk management.

Through international risk management, we ensure that all major risks are identified and mitigated.





Risk management is focused on improving the intensity and quality of risk mitigation to facilitate the Company’s growth. The following actions have been taken by the Company:o Mitigating risk potentials o Minimizing risk exposure o Optimizing corporate objective

• Conflict of Interest Transactions (4.6)In an effort to prevent conflict of interest, the Company adopts the following policies:o Members of Board of Commissioners and Board of Directors must disclose their

shareholding in the Company or other companies in a special register as required by the law.

o Every member of the Company must not take advantage of their position for personal gain or others’ benefit that may harm the interest of the Company.

o Every member of the Company must not use material and confidential information for personal gain or others’ benefit that may harm the interest of the Company.

o Every member of the Company should avoid economic interest in the Company that may cause financial conflict of interest.

This way, all elements of the Company may be free from domination by others, free from any influence and pressure by others to allow objective decision making in transactions with conflict of interest.

• Insider TradingThe Company has set the rules on insider trading as stipulated in Code of Conduct. Business ethics and work ethics laid down in Code of Conduct stipulate that the Company abides by the prevailing laws and regulations regarding insider information particularly with respect to access to sensitive and confidential information. However, Commissioners, Directors, and employees are free to have a long-term investment in the Company’s shares.

In certain cases such as share buy-back program, the Company prohibits Commissioners, Directors, and employees from making transactions when the program is in progress.

• Restriction to Give and Receive Gifts (SO2)Gift is defined as any form of present given by the Company and its personnel to certain parties with a purpose of influencing such parties to benefit the Company unfairly. Receiving gift is defined as any form of receipt by the Company and its personnel from certain parties to influence the decision of the Company to favor the present giver.

In principle, giving or receiving presents are prohibited by the Company, except when done in accordance with specific rules set by the Company or with the prevailing laws and regulations.Giving and receiving gifts for any

intention or purpose in dealing with business partners is

prohibited by the Company






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Sustainability

• Goods/Services ProcurementGoods and services procurement is carried out by fair competition as governed by the law and in a manner that is effective, efficient, transparent, competitive, fair/indiscriminative, and accountable. E-procurement and e-auction system has been installed to support procurement in the spirit of good corporate governance. The system should be:o Implemented consistently;o Assessed periodically with respect to system adequacy to ensure compliance

with effective, efficient, transparent, competitive, fair/indiscriminative, and accountable principles;

o Able to prevent conflict of interest and affiliated transactions by the personnel in procuring goods and services.

• Disclosure, Confidentiality, and Insider Information The Company promptly disseminates information to shareholders and other stakeholders in order to make quick decision. Sensitive and confidential information is regulated further in Letters and Files Handling Procedures. One of the media for exercising disclosure is the Company’s official website. These policy guidelines are the basic rule for the Corporate Secretary’s activities.

• Mechanism to Voice Opinion to Board of Directors (4.4)As one of the stakeholders with important role in the Company’s success, the employees have the rights to voice their opinion and give suggestion to the Board of Directors through formal mechanism such as meeting of Labor Union with Management and the Company’s work meetings. The employees can also give their suggestion and opinion through face-to-face event with the Board of Directors, and Board of Directors work visit. Correspondence media such as mail and e-mail can be used as well.

Besides receiving various constructive suggestions to improve Company’s policies, this mechanism has created a more conducive relationship with internal stakeholders, particularly the shareholders and employees, in order to support the Company’s growth.

Code of Conduct (4.6, 4.11, HR1)

• Code of ConductThe Company has finalized reviewing and revising the Code of Conduct, readjusting its provisions with GCG Code and the most current common practices. The revised Code of Conduct has been disseminated and enforced since early 2010.

Main Points of Code of Conduct Essentially, the Company’s Code of Conduct regulates all matters under the responsibility of the Company, individuals of the organization, and other parties doing business with the Company, covering:

OnewayofsocializingCoCisthesigning of declaration of compliance by all employees





• BusinessCodeofConduct.The Company’s Business Code of Conduct gives directives as to how the Company should conduct its business with good ethics the way a business entity should, to balance the interest of the Company and that of the stakeholders in accordance with GCG principles and sound corporate values.

• IndividualCodeofConduct.Individual Code of Conduct is an explanation as to how individuals in the Company should act in communicating with others and behave in accordance with good ethics and common moral values.

• DisseminatingCodeofConductandReportingViolation.Disseminating Code of Conduct and procedures of reporting misconduct, and violation of Code of Conduct, Company Regulations, other laws and regulations, and imposition of penalty should be done effectively to all levels of the organization and stakeholders of the Company.

• DeclarationofCompliancewithCodeofConduct.The declaration is a statement of understanding and readiness of all personnel to observe the Code of Conduct and respect any party assigned by the Company to be in charge of the implementation. The Company sets periodic signing of compliance statement.

• Socialization of Code of Conduct The Company is committed to effectively disseminate Code of Conduct (CoC) by taking the following steps:• DisseminatingCodeofConducttoallpersonnel,customers,andpartners,andgiving

periodic refresher course. • Evaluating the accomplishment or understanding of the personnel, either during

orientation or operating hours.• PeriodicallyreviewingtheprovisionsofCodeofConductforfurtherimprovement.If

required, findings from the review will be further embodied in rules and regulations of the Company.

Socialization is conducted by Corporate Management System Work Unit, the unit responsible for GCG implementation, in coordination with Human Resource Work Unit.

Corporate Culture (4.6, 4.11)

The Company has a value system that is adopted and implemented to cultivate corporate culture. The corporate values are reviewed and revised periodically to ensure their relevance with the latest condition and in accordance with the Company’s vision and mission.

Along with the redefinition of Company’s vision and mission, the corporate values have undergone several changes as well and now become:






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Sustainability

PTBAValues

Visionary : Being able to look forward and develop long-term projection in business development.

Integrity : Putting forward trustworthy, open, positive, honest, committed and responsible behaviours.

Innovative : Always working wholeheartedly to obtain a new breakthrough to produce better products and services than ever before.

Professional : Carrying out all tasks based on competence with creativity, courage, commitment, and collaboration to improve skills continuously.

Cost- and environment-conscious

: Having high awareness in every operational activity by conducting business based on principles of maximum benefit and environmental concern.

Meaning of PTBA’s Presence Offering Energy Source for A Better Living and A Better Earth.

Legal Cases Involving The Company (SO4)

During the reporting period, the Company faced one lawsuit in regards to its operation, which was related to overlapping concession area in Lahat Regency. This case has been reported to the authorities.





Environmental

Conservation

for

Sustainability






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Sustainability

• Commitment,Policy,andObjectives• AccreditedEnvironmentalManagement• EnvironmentalOrganizationStructure• EnvironmentalTraining• LandProvisionandMonitoring• RealizationofLandClearanceandReclamation• EnvironmentalManagement• ResearchandDevelopmentforEnvironment• EnvironmentalMonitoring• CostsforEnvironmentalManagementand

Conservation • RevegetationandRehabilitation• DevelopmentofEnimforestPark• ResponsibleMineClosure• Awards

Page

54-83

Environmental

Conservation

for

Sustainability





Environmental sustainability is an effort carried out by every business entity to protect the earth and its contents for future generation. The growing worldwide concern on climate change makes mining sector the most highlighted sectors. The open mining activity which involves landscape change and starts with land clearance, is accused as one of the contributors for global warming which causes frequent extreme weather.

The Company, as one of the coal mining company in Indonesia with large reserves, shares the worldwide concern

by always running environmentally-friendly operation. The Company is determined to become a mining company with real

positive contribution towards environment by conducting various environmental conservation programs and running mining business

with minimum effects to the environment.

The Company adheres to the provisions of Environment Law No. 32/2009 regarding environment protection and management which include community management, protection, and conservation. For that reason, every move the Company takes in its field operations is guided by the provisions of AMDAL, UKL, and UPL drawn up and disseminated to all stakeholders. The whole process of planning, mining, closing, and rehabilitating, with the accompanying impacts, is incorporated in those documents and used as reference by the Company in running its business. To ensure the realization of all commitments in the documents, 8 divisions and operational units (or 36%) out of 22 are involved in the whole process related to the interests of local community, environmental impact analysis and business development. (SO1)

This initiative is a pre-requisite and parameter of regulation compliance in order to improve economic performance that can keep pace with the efforts to restore the environment to its original condition and gain the local community’s support for its operation. (1.2)

Commitment, Policy and ObjectivesThe Company’s commitment towards environment protection is set in the Environmental Policy: ”In running its business, the Company always cares about the physical and social environment hence it becomes an integrated part of global environment in preventing, recovering, conserving, and protecting the environment, being active in complying with environment law and other requirements, and applying consistent, integrated, documented, and maintained environment management system, and continuously improving to achieve optimum result”.

The Company has 5 (five) main objectives in the environmental conservation as follow:• TheCompany’sactivitiesdonotcauseanynegativeimpacttothelocationsurrounding

the mining activity • Minimizinglong-termlandqualitydegradation

Green Mining

implementation

encompasses managing,

monitoring, reclaiming,

and rehabilitating the

environment continuously

as part of our commitment

to conserve environmental

by involving

stakeholders.






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Sustainability

• Minimizingnegativeimpactandmaximizingpositiveimpactforthesurroundingcommunityduring and after mining activity

• Transformingpost-mininglandintoaprofitableareawitheconomicvalue• Notburdeningthefuturegeneration

The complete Environmental Policy which shows the Company’s commitment in conserving the environment is as follow:

BUKIT ASAM MANAGEMENT SYSTEM (SMBA)

POLICY GUIDELINE

BUKIT ASAM MANAGEMENT SYSTEM (SMBA) POLICY

In line with the Company Vision and Mission, PTBA Management is committed to achieve the highest performance as possible in Quality, Environment and WSH management, and makes it one of the foremost priorities in every mining operation by emphasizing the following:1. In competition, the Company is responding to needs and prioritizing Customer Satisfaction

as a result from Product Quality, always paying attention to “Quality Culture, Quality Awareness, Quality Care and Quality Commitment” and complying with all related laws and regulations.

2. Creating example and discipline through safe behavior and development of effective competence.

3. Preventing incident through continuous hazard identification, analysis, and elimination.4. Performing environmentally-friendly “Green Coal Mining and Coal Industrial Process”.

In carrying out mining, the Company is always adopting “Good Mining Practice” principles, i.e. environmental management activity is conducted inherently with mining operation.

5. Environmental & Safety Communication; communicating all activities related to the environment and WSH so that all employees and relevant parties care about safety and environmental impact.

6. Conducting Performance Measurement (including Goal and Program setting) and Continuous Improvement in Quality, Environment, and Work Safety and Health that are monitored in Management Review Meeting to ensure its constant suitability.

7. Being Available to Relevant Parties; this Policy must be available to relevant parties.

In summary:1. Customer Satisfaction, Product Quality and Process Quality2. Exemplary, Discipline and Safe Behavior3. Incident Prevention, Risk Management4. Green Coal Mining & Coal Industrial Process5. Environmental & Safety Communication6. Continuous Improvement7. Available to Relevant Parties

Motto: NO QUALITY, NO BUSINESS

Doc. No. : BAMSM.IRevision No. : 3Page : 1 of 1

President Director





Accredited Environmental Management System The Company runs ISO 14001: 2004 accredited system to enhance the effectiveness of environmental management that includes environmental management, environmental audit, environmental performance evaluation, and basic living cycle study. In its implementation, the Company has integrated the accredited environmental management system with other accredited system in Bukit Asam Management System, which also includes Quality Management System (SMM) ISO 9001:2008 and Work Safety and Health Management System OHSAS 18001:2007. (4.12)

Under the accredited environmental management system, the Company designs and launches various environment-related programs that are divided into two major programs, i.e. Environmental Management and Environmental Monitoring. The success of these programs is measured by independent parties using a series of environmental quality standard (BML) parameters determined according to the central or local government regulations or accredited standards.

To follow up the completion of the Annual Technical and Environmental Work Plan 2012, in accordance with AMDAL document, the Company implements various environmental protection programs. The Company has finalized Mine Closure Plan (RPT) document and Five year Reclamation Plan (Jamrek) as the principal reclamation documents that will be elaborated in annual action plans. The completion of these documents is in compliance with Energy and Mineral Resources Minister Regulation No. 18/2008 and Goverment Regulation No. 10/2010. The overview of the Company’s environmental protection program is as follows.

EnvironmentalOrganizationStructureStructurally, the environmental work unit is under the General Manager of the Company, consisting of three units according to their respective function. They are Environmental Planning under Planning Unit, Environmental Management under Environmental Management & Mining Support Unit, and Environmental Monitoring under Work Safety and Health and Environment Unit. This division of function makes management efforts more effective and manageable, from planning, execution, to mine closure.

Fungsi Perencanaan Fungsi PelaksanaFungsi Inspeksi

Manager PenunjangTambang

Senior Manager Penambangan

Senior ManagerPerencanaan

Manager Perencanaan Lingkungan

Manager K3 & Lingkungan

General Manager UP Tanjung Enim

Asisten Manager Pengelolaan






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Environmental Training To enhance the knowledge and skill of employees in environmental management, the Company develops several in-house training programs and sends several employees to join external training. For internal training, the types of training and number of participants are as follow: Environmental Management System (SML) ISO 14001, hydrocarbon & waste treatment, and Rehabilitation Specification. 197 employees have participated in those trainings during 2012, of which 14 of them joined SML ISO 14001 training, 24 of them joined hydrocarbon & waste treatment training and 4 of them joined Rehabilitation Specification training. Whereas for external training, the Company sends 197 employees to participate on the environmental training.

Land Provision and Monitoring (MM7)

Providing land for mining operation is a crucial aspect. In formulating a mining plan, land provision is pre-requisite of all economic calculation of the plan. If the land is not available on time, the entire mining activity will be delayed. Mine operational expansion is begun with land provision by clearing land from owners and/or cultivating community’s land in operational area. Considering that mining process has potential negative impact towards surrounding community, if there are residents nearby, the Company will conduct land clearing and relocation prior to mining. (SO9)

To meet this land provision, the Company always begins with identifying documents owned, followed by plotting the area into the mining plan map, to ensure that all areas are under the Company’s control. If there are areas which have not been under control, the Company will clear the land from the control and/or cultivation of community’s land in the concession area, as mandated in Law No. 11/1967 on subjects of mining, as well as provisions in issuing operational business license (IUP) for the area.

The Company always acquires land by discussion and consensus according to Standard Operating Procedure (SOP) of land clearance in agreeing upon compensation rate, settling land dispute, or by due process of law if the discussion or government mediation does not reach mutual consent. Through those processes, in 2012 the Company has cleared 1,456 hectares of land.

The land clearing process adopts the principle of discussion and consensus of both parties. The Company sets appropriate compensation rate which includes values of land, building, and stands, and considers the validity of land ownership document. With this acceptable and well-documented mechanism, during the reporting year there was no land dispute with the local residents related to the land clearing process.(MM6) Land clearing and safeguarding of all (100%) operational areas in field are prone towards human rights violation, therefore the Company engages independent party and supervises randomly and periodically, so that there were no human rights violation regarding this case. (HR10, HR11)

In land clearing process, sometimes the Company conducts resettlement or relocation of all residents from one area to another, in order to realize the mining program in the occupied area or to fulfill the condition of sterilizing the operational area from residential area nearby.





In the last few years, the Company has conducted the relocation program. Residents in above-kitchen area, due to its close distance with mining site, has been relocated to a new area which has been prepared and free from mining activities. The relocation is in accordance with AMDAL requirement to manage the impact of mining activity to above-kitchen community hence the indigenous people have to be relocated to new residential area. During the reporting year, no land dispute has occurred. (HR9) (See description “Relocation and Resettlement of Above-Kitchen Residents”)

In accordance with business expansion plan, in 2012 the Company embarked on a series of land clearance and subsequently built infrastructure to make way for its mining operation. Prioritized locations to be cleared and prepared since 2011 were Peranap and Banko Barat areas, which mostly belonged to and cultivated by the local farmers.

The Company had for long made persuasive approaches to the farmers who cultivated the targeted land and thus, during the year, there was no land dispute arising from land clearance by the Company. (MM6)

The Company also monitors the cleared land. The monitoring is conducted by competent parties, including with polices’ and other security officers’ assistance as well as the Company’s internal security officers. The purpose of this regular monitoring is to prevent conflict and claim on land by the community in the future, as well as to detect any unlicensed mining (PETI).

RealizationofLandClearanceandReclamation(EN11, MM1, MM3)

In 2012, the Company has realized land clearance, soil stockpile, and mud-sedimentation pool in MTB, TAL, and Banko with an area of 240 hectares. The Company clears the land in stages. Initially the top soil was stripped by bulldozer and excavator, and then transported to reclamation area or piled momentarily in soil stockpile area. Volume of top soil moved for the purpose of reclamation in Tanjung Enim mining area was 947,664 bcm, and it was spread over an area of 103 hectares.

The Company stockpiled cover soil inside mine hole (backfilling method) and outside mine hole. This stockpiling amounted to 1,089,813 bcm. To prevent negative impact from Mine Acid Water, the Company also conducted calcification process. Following that, on the stockpiling areas with cover soil layer, the Company made land re-arrangement and reclamation to preserve soil fertility. The Company also treated the plants on the reclamation area. This reclamation is realization of regular revegetation program to maintain the fertility of soil in stockpiling areas and greening for mining areas with long-term potential. Throughout 2012, the main mining areas that became revegetation areas were TAL, MTB, and Banko Barat, with total area of 102.74 hectares. Number of plants was 64,215. The summary of land clearance and reclamation done in 2012 is as follow.






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Relocation and Resettlement of Above-Kitchen Residents (MM5, MM9)

The Company begins relocation process by forming discussion committee with local community who lives in Above Kitchen area. This committee consists of residents’ representatives, elders, local government’s representatives, and the Company’s representatives. The task of this committee is to mediate agreement which binds both parties by discussion and consensus principle.

After going through several meetings, agreement was reached, including the location and compensation. The Company has built residential area, complete with adequate facilities in Baralestari Housing, Keban Agung Village with total area of 10.8 hectares and composed of 591 houses. 591 households in Above Kitchen area will be relocated.

Location prior to resettlement

Resettlement location under development






Summary of Land Clearance and Reclamation Activities

Description Unit 2011 2012 % Change

Land Clearance Ha 116 137 18.1

Land re-arrangement Ha 109 103 (5.5)

Revegetation Ha 109 103 (5.5)

Plant Treatment

- Embroidery Btg 21,950 18,267 (16.8)

- Fertilization Ha 121 197 62.8

Mud Sedimentation Pool (KPL) Unit 2 4 100

Top Soil Extraction BCM 965,878 947,664 (1.8)

Calcification Top Soil Spread BCM 946,857 886,892 (6.3)

Recapitulation of Reclamation Area

Description Unit IUP Air Laya

IUP MTB IUP Banko Barat

Total

Areas of IUP Ha 7,621 3,300 4,500 15,421

Areas Cleared Ha 3,110 567 1,064 4,740

Areas Revegetated Ha 1,415 246 571 2,232

Areas of Permit to Use Production Forest

Ha 3,436 17 - 3,453

Environmental Management The Company continuously manages the environment to reduce mining impacts on the environment and community in accordance with its corporate mission, that is “World-class Environmentally-friendly Energy Company” and its mission who emphasizes that the Company is “Managing energy sources by developing corporate competence and human excellence to provide maximum added value to the stakeholders and environment”.

In order to achieve the vision and mission, the Company develops and executes various environmental management efforts, including the following ten programs: (EN26)• Preparingdefinitivereclamationplan,includingAnnualandFiveYearlyEnvironmentalPlan

Document, Reclamation Assurance Document, Mine Closure Document Plan • Constructingandmaintainingerosioncontrolfacilitiesinallminingsites,eitherfinishedor

existing sites.• Designingandconstructingnon-erosivepost-miningtopography.• Arrangingslopeandgreeningallareasfreedfrommining.• Cultivatingandutilizinglocalplantspeciesandotherproductiveplants.• Optimizingavailablestockpilingareas.• Minimizingopenlandareasforminingoperation.• Controllingnegativeimpactsonwater,air,andsoilqualityandtreatingsolid, liquid,and

hazardous waste.






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• Reclaimingpost-mininglandwitheconomicvalue(People’sForestParkEnimTahura,CityForest and Educational Forest).

• Conducting environmental R&D to find efficient and effective environmentalmanagement.

• PreparingproportionalenvironmentalmanagementfunduntilendofminingintheformofReclamation Assurance and Environmental Provision (Rp4,400/ton).

Every environmental management program carried out is then monitored and evaluated with parameters which have considered the main impact of mining. This evaluation against the environmental target indicator is then discussed annually in environmental management forum, in accordance with accredited system ISO 14001: 2004, as part of continuous improvement to control and minimize environmental impacts from mining.

To assess the effectiveness of environmental management, every year the Company lays down parameters of environmental target indicator as ruled by the law. The indicator refers to the local government regulation, South Sumatra Governor Regulation No. 8/2012 regarding Liquid Waste Quality Standard for Industrial, Hotel, Hospital, Domestic, and Coal Mining Activities & South Sumatra Governor Regulation No. 17/2005 regarding Ambient Air Quality Standard and Noise Level Standard. The Company also uses standard parameter set forth in South Sumatra Governor Regulation No. 15 dated 15th May 2005 regarding Emission Quality Standard of Non-moving Sources to manage emission, effluent, and waste.

In order to manage the environment, the Company measures and monitors major indicators in Air Laya, Muara Tiga Besar, and Banko Barat mines. The following table shows the monitoring results in 2012. (EN20)

The monitoring results of main environmental indicators according to environmental standard quality (BML) for 2012.

No. Parameter Unit Max BML Actual 2012

I Ensuring released water from the mines fulfills BML*

1. pH - 6-9 6-7.22. Suspended residue mg/l <300 4-243. Total Iron (Fe) mg/l <7 0.25-2.44. Total Manganese (Mn) mg/l <4 0.45-1.6II Ensuring the quality of ambient air & air emission within the mining area and its

surrounding fulfills BML** SO2 Ug < 900 70-310

CO Ug < 30,000 124-3,500

NO2 Ug < 400 99-265

O3 Ug < 235 0.10–122

Debu Ug < 230 0.25–140

III Fulfillment of environmental provision Rp/tons Plan Actual

Rp4,150/ton Rp5,431 /ton

* In compliance with the South Sumatera Governor Regulation No.18/2005. ** In compliance with the South Sumatera Governor Regulation No.17/2005.





In order to fulfill the requirements of environmental quality in accordance with BML, the Company carries out environmental management programs through monitoring disturbed areas, clearing land and reclaiming used mines in accordance with the law, nurturing plants, draining mud from sedimentation pool, making sedimentation pool, seedling and planting, managing top soil, managing mine acid water (AAT), handling erosion, conducting

research and development, managing hazardous waste, emission and effluent, as well as implementing partnership and community development program.

The Company uses the standard parameter given in the South Sumatra Governor Regulation No. 6/2012 regarding Non-moving Source Emission Quality Standard and Motor Vehicles Exhaust Gas Threshold. In accordance with monitoring result which showed all indicators were below the required BML, during the period under review there was no monetary penalty imposed on the Company in regards to environmental violation. (EN28)

In accordance with the environmental impacts caused by the Company’s operations, the realization of environmental management program is elaborated in the following sub-topics of discussion.

Material ConsumptionThe Company excavates coal from its mining operations but does not process the coal extracted. The mining activity entails drilling layers of cover soil and coal, and directly transporting suitable and usable coal in appropriate size for sale to the consumers. The volume of coal excavated is relatively equal to the total volume excavated minus volume of cover soil (overburden).

Other materials used in the excavating process are insignificant, mostly explosives to break the normally hard cover soil. Materials used indirectly are fuel, grease, and lubricant for operational vehicles. Total grease consumption was 32,056 kg (Nov 2012), and total oil/lubricant consumption was 5,110 L (Nov 2012). (EN22)

Other materials indirectly related to production were paper (1,024 ream, Nov), used plastic, used printer ink and the like, all (100%) of which were collected to be recycled by competent parties. The Company also utilized various used or recycled materials to support operation, including: (EN2, EN22)• Used lubricant, as explosives mixing material (ANFO), 2012 usage reached 19.8 tons, or

contributed 10% of total waste.• Conveyorbelt,asconveyorsystemprotector,covermatte,andcraftmaterials,withtotal

usage of 20.3% of total waste.• Reconditionedspareparts,totaling68.1%ofironwaste.Ironscrapresiduewasrecycledby

third party.• CoalwasteforTPPfuel.• Usedpumphousepontoonforsewer.

In 2012, the Company’s total coal production reached 13,966,834 tons. Tanjung Enim mine produced 13,064,168 tons of coal, moved 69,316,488 bcm materials, and impacted a surface area of 137 hectares. (EN1, MM3)

Our commitment to environmental conservation is demonstrated

by the measured water and air quality rates which are below

environmental quality standard






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Energy Consumption The Company’s energy consumption is solely for mining machinery, coal transportation, and support activities, such as lighting and office usage. Energy for mining machinery is obtained from oil-based fuel (BBM), diesel oil, and electricity, while energy for support activities is derived from PLN electricity supply.

Total PLN electricity consumption for production in 2012 reached 43,231,954 kwh (2011 consumption was 41,680,000 kwh) and for non-production reached 5,643,362 kwh (2011 consumption was 5,584,437 kwh). (EN3, EN4) The Company also relies on diesel fuel and gasoline for its production and support activities with the following breakdown.

fuel Consumption in 2011-2012 (EN 4)

No Type Fuel Consumption (L)

2012 2011

1. Solar 45.148.251 48.546.507

2. Gasoline 130.892 136.346

The Company makes use of non-renewable energy sources in coal production process for reason of economics and practicality. The mining areas are currently not suitable for planting one of the renewable energy sources, namely Jatropha Curcas. However, the Company has used renewable energy such as biogas and water-powered electricity in order to reach energy self-sufficiency of the surrounding community within the Company’s CSR program. (EN6)

In order to reduce PLN electricity consumption, the Company enforces a set of policies to save electricity. The policies are adopted by the following measures: (EN7)- Using capacitor bank in Air Laya and Banko Barat mines.- Encouraging employees to: i. Set air conditioner temperature at 25oC ii. Reduce the total number of air conditioners in rooms which use air conditioner over

capacity iii. Make use of natural lighting - Phasing out TL light bulbs with energy-saving SL bulbs. - Replacing spotlight in mine with LED light which only requires 25% power of spotlight.- Using solar cell light on areas far from electric network. - Replacing regular window-unit air conditioner to split air conditioner (Inverter dan Bio).- Improving electrical installation quality. - Maintaining conveyor roof cover. - Reducing frequency of start-stop switching.

To reduce oil-based fuel consumption, a few initiatives are taken: (EN5)- Optimizing Shovel & Truck mining operations - Sampling heavy machinery per unit - Scheduling fuel filling to heavy machinery - Monitoring and managing non-mining vehicle service





The Company has counted the level of Carbon Dioxide produced by converting diesel oil consumption, and evaluated the level of CO2 absorption by the vegetation of reclaimed former mine areas. The result showed the effect of Anthropogenic CO2 Emission reduction in Air Laya Mine (TAL) where the 1,000-hectare area planted with 1,100,000 trees was able to absorb CO2 emission with capturing capacity of 176,801,428 Ton/hectares/year. (EN18)

Besides natural conservation by revegetation to reduce CO2 emission, the Company develops renewable energy sources as follows: (EN6)• Producing water-powered electricity for the people of Semendo (Semendo Islamic

boarding house) in the form of micro hydro electricity.• Contributingbiogasgeneratingfacilityforthesurroundingcommunity(cowbreeders)

Water Consumption ConservationAs a mining product, coal is not processed as manufacturing products are. However, water is still needed for other purposes, i.e., as “washer” in spraying coal to clean it from sticking mud, spraying operation area to settle dust, and for toilet purposes on the site and in the office.

Calculation made by the Company shows that the mining efficiency measure has an effect on water consumption. Clean water consumption for coal production in 2011 was 0.011 m3/ton. As coal production increased, water consumption for production process also escalated in 2012. Source of water used is surface water/river water. (EN8, EN9)

In addition to water consumption efficiency measure, the Company makes other efforts to improve water quality in the surrounding area. The efforts include treating mine acid water (AAT) in mud sedimentation pool by active method (limestone) as well as passive method (wetland). The wetland method was performed by utilizing metal-absorbing plant species proved to be very successful in reducing the metal content, especially Fe and Mn, so that all effluent water quality meet the BML standards before returning to the public water supply. (EN21)

For surface water preservation and environmental conservation, particularly water sources, the Company conducted the following activities: (EN10, EN21)- Using mine water for spraying roads and production facilities.- Using rainwater for washing heavy machineries.- Using water with closed loop system.- Making rainwater reservoirs and Biopori holes (office and residence).

All these efforts are made so that all (100%) of the water used for the Company’s activities, which was approximately 143,952 kilo liters in 2012 (142,400 kilo liters in 2011) can be recycled and returned to public water supply in suitable-for-use condition in accordance with the law. (EN10)

Wetland system using borashi plants has successfuly absorbed heavy metal

such as fe and Mn from mine water to meet the required environmental

quality standards.






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Sustainability

To meet the needs of clean water, the Company also processes mine water. The water treatment installation has capacity of 350 M3 per day. The purposes of this treatment are to reduce volume of river water taken for clean water needs and to reuse and recycle mine water as clean water. (EN8)

Through these efforts, the Company takes part in preserving and conserving surface water in accordance with environmental conservation norm that the Company strictly adheres to. Therefore, during the reporting period there was no report or complaint to the Company in relation to water sources problem due to lower water level caused by water extraction. (EN9)

The Company regularly monitors the effect of water flown back to public water supply on biodiversity. The monitoring discloses that there is no adverse effect of waste water discharge on biodiversity. Water Biota monitoring by a third party (PPLH UNSRI) reveals that the water around PT Bukit Asam (Persero) Tbk operating area in Tanjung Enim was not significantly disturbed, as shown in 2012 monitoring result, where biodiversity rate is good and in general supportive of water biota life.. (MM11, EN25)

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Clean water processing chart in WTP Limoa

Coagulant Tank

Clarifier 1,2

Alum waterFlowmeter

River water

Suction pump Alum stirrer tub

Pump

Chlorine stirrer tub

Backwash PumpWater filter 2Water filter 1

Compressor 2Flowmeter

Outlet to KTT

Sump

Clean water receptacle

Outlet to mine, workshop, etc

Flowmeter

Compressor 1

Mud disposal

Pump





Water from mine location (main sump) is pumped to mud sedimentation pool to precipitate particles and heavy metals from mine by using 10 units of Sulzer pump with Serial installation and the following capacities:• 4 units of 385 Kw Sulzer pump, 12

m3/minute capacity on 100 M head.• 4 units of 355 Kw Sulzer pump, 10

m3/minute capacity on 100 M head.• 2unitsof315KwSulzerpump,10m3/

minute capacity on 85 M head.

5 units of pump are installed in main sump with floating design by using pontoon at -70 m dpl. elevation; 5 units are installed at 0 m dpl elevation as Booster, and pump outlet is located at +78 m dpl. elevation.

Type of pipe used is HDPE pipe with the following diameters:• Diameter¢160 =96m• Diameter¢200 =756m• Diameter¢400=4092m

TotalHDPEpipeusage=4944m

AAT is treated by giving calcium oxide on drainage duct and mud sedimentation pool (KPL) inlet.

This treatment is more focused on KPL locations with small area. This method can increase pH and has not reduced metal elements concentration in AAT, such as Fe and Mn to the required environmental quality standard.

The Company implements two methods of Acid Mine Water (AAT) treatment, i.e. active and passive treatment.

PUMP PIPE

HDPE OD 400 PIPE

MAIN SUMP

HDPE PIPE

OUTLET FROM PUMP

1.ACTiVETREATMEnT

LAyER C

LAyER B1

LAyER A1

LAyER A2

LAyER B2

Mine Water

Treatment with

Wetland Method in

PT Bukit Asam

(Persero) Tbk






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Sustainability

In duct outlet, flow meter is installed to measure water output capacity from the wetland.

Other than flow measurement, water quality is also monitored to fulfill Liquid Waste Quality Standard (BMLC) in compliance with South Sumatera Governor Regulation No. 18/2005, i.e.:• Ph =6–9• ZPTS=50mg/l• Fe =7mg/l• Mn =4mg/l

After fulfilling BMLC, water from mine area can be flown to public water (Enim river) for community use.

Gives several advantages:

1. Biological AAT treatment that is environmental

friendly.

2. Propagation of kiambang as phytoremediation

plant in heavy metal treatment is cheaper and

easier.

3. Heavy metal absorbed by kiambang will

accumulate in plant tissue so that heavy metal

will be moved from AAT (mobile) into plant

(immobile) without risking of being dissolved

again.

4. Kiambang may reduce contamination of Fe up

to 91.76% and Mn up to 39.96%.

5. Kiambang may save cost.

6. Wetland method with kiambang has been proven

effective in removing sediment and pollutants in

form of heavy metal, e.g. Fe and Mn.

WATER FLOW & pH METER IN ARRANGEMENT POINT

EXAMPLE OF PLANTS GROWN IN BUKIT ASAM WETLAND

Phragmites Sedges (Charex) Typha latifolia Kiambang

RIVER (PUBLIC WATER)

MUD SEDIMENTATION POOL

CALCIFICATION LOCATION

RIVER (PUBLIC WATER)

WATER FLOW METER

WETLAND AREA

2.PASSiVETREATMEnT(WETLAnD)uSinGKiAMBAnG(SALVAniANATANS)





Emission ControlGlobal warming and climate change are a threat to the Company’s business sustainability, in view of the fact that mining activities in the open air entail cutting down trees and removing cover soil. These activities are blamed for contributing to the high concentration of ozone-depleting gases resulting from diminishing green zones that absorb carbon dioxide. Moreover, land clearing is done by heavy equipments that emit CO2.

To address the situation, the Company exercises a well-planned and structured emission control. In Company activities, the main source of emissions is the use of mining equipments fueled by non renewable fossil, namely, diesel and gasoline. Along with increased activity and production of coal produced, the total emissions also increased. (EN16, EN17)

Based on fuel consumption and combustion effectiveness of production and operation machinery, estimated CO2 emission from the Company’s mining operation in 2012 is shown in the following table.

Company’s CO2 emission calculation, 2012Fuel Type Unit Total Fuel Conversion CO2 Emission

(ton eq)

Solar Kilo liter 48,546,51 2,6681 129,526,9

Gasoline Kilo liter 136,35 2,3247 317,0

Total Emission 129,843,9

To control emission sources, the Company makes regular emission tests on production facilities and operational vehicles on sites as well as in head office and branches. Test on emission from moving sources is made in accordance with Minister of Environment Regulation No. 05/2006 and non-moving sources under South Sumatra Governor Regulation No. 6 dated 15th February 2012 regarding Non-moving Source Emission Quality Standard and Motor Vehicles Exhaust Gas Threshold, and Minister of Environment Regulation No. 533/2009 for RSBA (Bukit Asam Hospital) Incinerators and No. 44/2012 for Mine incinerators.

The tests are run by third parties and the authorities with an aim to ensure that the Company’s main and auxiliary machineries discharge the least emission as ruled by the law. Monitoring results show that the emissions discharged are within the range of BML. (EN18, EN19)

The air quality results of incinerator emission as monitored by the third party are as follow.






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Sustainability

No Measurement Parameter Unit Measurement Result (Location)

Minister of Environment Regulation No. 533/2009

for RSBA (Bukit Asam Hospital) Incinerators

and No. 44/2012 for Mine incinerators

RSBAIncinerator

Mine Incinerator

Incinerator Non-Moving Source Emission Quality

Standard

1 Particles mg/Nm3 23.5 36.5 502 Sulphur Dioxide (SO2) mg/Nm3 172 183 2503 Nitrogen Dioxide (NO2) mg/Nm3 189 126 3004 Hydrogen Fluoride (HF) mg/Nm3 1.53 1.62 105 Hydrogen Chloride (HCl) mg/Nm3 0.46 0.77 706 Carbon Monoxide (CO) mg/Nm3 15 18 1007 Total Hydrocarbon (as CH4) mg/Nm3 <1 <1 358 Arsenic (As) mg/Nm3 <0.01 <0.01 19 Cadmium (Cd) mg/Nm3 0.035 0.042 0.210 Chromium (Cr) mg/Nm3 <0.02 <0.02 111 Lead (Pb) mg/Nm3 <0.1 <0.033 512 Mercury (Hg) mg/Nm3 <0.01 <0.01 0.213 Thallium (TI) mg/Nm3 none none 0.214 Opacity % <10 <10 1015 Temperature of Wasted Gas 0C 145 155 -

The Company is also heedful of the international community’s efforts to slow down ozone layer depletion. Although no calculation has been made of total ozone-depleting gas emission from its mining operations, the Company has participated in the reduction effort by replacing ozone-depleting chemicals or retrofitting refrigerant freon (CFC) with environmental-friendly hydrocarbon. The Company is also serious about developing the usage of CBM which has so far been discarded into the atmosphere during coal mining. This effort will minimize or even eliminate CFC or methane gas (CBM) emissions to the atmosphere. (EN19)

To reduce greenhouse effects or global warming the Company took the following actions: (EN18)- Controlling Fugitive Emission:

a. Monitoring emissions from moving and non-moving sources,b. Avoiding open waste burning

- Reducing greenhouse gas emission by:a. Greening with trees that are able to reduce air pollution and absorb CO (narra, saman,

mango, bullet wood, and mahogany).b. Minimizing land clearancec. Preserving original vegetation

- Eliminating ozone-depleting chemicals by replacing retrofitting refrigerant freon (CFC) with Musicool-type hydrocarbon that is domestically produced.





- Conducting Clean Development Mechanism program:a. Calculating carbon dioxide level b. Coordinating Green Friday program (greening activities outside the mines)c. Calculating biomass to count CO2 absorption by vegetation in reclaimed former

mine sites.

Quarterly, emissions from moving sources (operational vehicles) and non-moving sources (incinerators and generators) are measured. Parameters measured are sulphur-oxide (SOX), nitrogen-oxide (NOX), particulate, and others. It is important to monitor these emissions to ensure that they are always below environmental quality standard (BML), because directly or indirectly they are potentially hazardous to human as well as animal health. The measurement results indicate that all parameters are constantly below BML requirement. (EN20)

Besides curbing gas emission, the Company also makes an effort to suppress dust pollution (particularly in the closest residential area) which is caused by mining activities or product transporting activities. Monitoring air quality (one of the parameters being dust) around the mining site is conducted monthly. Measures taken to suppress dust pollution are: (EN26, EN29)- Regularly spraying front mine during excavating and loading operation - Regularly spraying the production roads - Revegetating and constructing buffer zone- Regularly spraying dust using dust suppression system in stockpile location and monitoring

emission from incinerators and generators- Limiting truck load and speed - Regularly maintaining heavy equipments and trucks to reduce pollutant gas - Compelling employees to wear masks and earplugs

Waste Management and Processing In reality, coal mining does not involve any process that requires water. However, drilling, cover soil removal, and coal seam extraction always result in water puddles, either from falling rainwater or accumulating surface water in the pit. Water accumulated in open pit mining is acidic and known as mine acid water (AAT).

Besides using mud sedimentation pool, the Company takes other measures to process mine liquid waste, i.e.: (EN21, EN22)• Preventive measures with encapsuling method in the stockpiling sites.• Making use of the liquid waste for spraying roads and production facilities, and consuming

water by closed loop system. • Waste water that has been processed in sedimentation pool is mostly used for spraying

roads and thus reducing river water consumption for that purpose.

Besides waste from falling rainwater, the Company’s mining activities produces waste from auxiliary facilities and activities surrounding the mine and from the community’s and employees’ activities nearby. The types of waste, which consist of solid, liquid, and hazardous waste, as well as their origin and treatment method are summarized as follow.

Besides evaluation emission, the Company continuously manages

hazardoustoxicwasteasdictatedby the law.






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Sustainability

• SolidWasteo Materials which still have economic value are sold, and those with no economic value

are piled in special dumpsites.o Types of waste: Old/used iron and scrap, used belt conveyor, used accu, and used

tires.• LiquidWaste

o Draining oil spill on workshop floor to oil trap.o RSBA liquid waste is processed in Liquid Waste Treatment Installation (IPAL). o Liquid waste from mining operation is processed actively by calcification and wetland

methods so that the water quality meets BML before being flowed to public water.• HazardousWaste.

o Draining oil spill on workshop floor to oil trap.o Hazardous waste (used oil/lubricant, used battery, used oil filter, cotton waste/

sawdust contaminated with hazardous waste, neon lamp) is stored in temporary waste dumpsite (TPS).

o Used oil/lubricant, used battery, neon light, grease, incinerator residue, fixer & developer and cartridge/toner are collected by hazardous waste processing company that is licensed by the Ministry of Environment to collect, transport, and process such waste, in accordance with Government Regulation No. 18 jo No.85/1999 regarding hazardous waste treatment.

o RSBA clinical waste, used filter & cotton waste/sawdust contaminated with hazardous waste are burned in incinerator. Hydrocarbon-contaminated material is handled with bioremediation process.

o Hazardous waste balance is continuously reported to relevant agency. o Hazardous waste to be burnt in incinerator in 2013 is 28,800 kg.o In 2012 there was no hazardous waste spill that may have contaminated the

environment. (EN23)o The Company never exports or imports hazardous and toxic wastes classified under

Basel Convention Annex I, II, III, and VII. The Company’s wastes do not fall into the Convention categories. (EN24)

• GeneralWaste.o General waste from residential area and the Company’s mine is discarded into a final

waste dumpsite at Darmo Village. Organic waste is processed with the local community involvement to become Bokashi fertilizer which is subsequently sold to the Company for revegetation.

Research and Development for EnvironmentTo preserve the surrounding environment, the Company conducts a series of studies and researches to evaluate the condition and develop the potentials of the surrounding areas. Towards this end, in 2012 the Company conducted the following activities: • To support former mine revegetation, the Company developed and mass-produced

Mikoriza Arbuskula. Mikoriza helps plants to thrive better and increase their resistance to water stress and root diseases.

• TheCompany isalsodevelopingtissuecultureformultiplyingplants(particularlythosethat are not generatively easy to multiply), and producing identical plants in a large quantity in a relatively short time.





• Usedoil ishazardousand toxicwastewith loweconomicvalue.Awareof the fact thatbeing the same carbon compound, used oil can replace diesel oil in ANFO mixture (EN2, EN22) the Company processes used oil in ANFO mixture to be used as explosives. This activity is licensed by Minister of Environment Decree No. 92/2010 on Permit to Process Used Lubricant as Fuel for Explosives (ANFO) in PT Bukit Asam (Persero) Tbk Tanjung Enim Mine.The benefits of this activity are:a. The energy resulted is similar to that of use of diesel oil.b. The fume produced is similar to that of use of diesel oil. c. The ANFO produced is of black and white color, making it very easy to determine

whether or not the composition is right.d. Storing process is short, reducing the risk of environmental contamination. e. Saving fuel (diesel oil).f. Implementing 3R program: Reduce, Reuse, Recycle (3R).

• TheCompanycarriesoutrevegetationwithoilpalmanddirectrevegetationtestandtrial.The obstacles in former mining sites are the inadequate nutrient content of the soil and the abundance of wild animals in the location.

• Priortolandclearing, localecosystemisconservedbyidentifyinganddocumentingtheflora and fauna, retrieving local and rare plant species by rotating system to be collected in the nursery or replanted during revegetation activity.

Environmental MonitoringThe surrounding environmental condition is regularly monitored in order to minimize any probable damage to the environment and to mitigate environmental risks. Environmental monitoring entails water quality, air quality, soil quality, soil contamination, erosion, wildlife, and water biota living in the vicinity of the mines.

In 2012, the Company conducted the following routine monitoring activities:

Environmental Monitoring Activity Table 2012 Type of Monitoring Monitoring

PointsMonitoring Frequency by Independent Parties

1 Water Quality 40 o Dua kali sebulan (oleh Pihak 3 dan Lab PTBA),o Daily for water pH and discharge*

2 Ambient Air Quality 11 Monthly3 Air Emission (non-moving sources) 7 Quarterly4 Vehicle emission 40 Quarterly5 Soil Quality 7 Semi-annually6 Revegetation 6 Semi-annually *)7 Working Environment

(Housekeeping)15 Monthly*)

8 Top Soil 6 Monthly *)9 Spontaneous Combustion 10 Continuously *)10 Erosion 6 Quarterly*)11 Upper Respiratory Tract Infection

(ISPA)3 Semi-annually *)

12 Wildlife 6 Semi-annually *)13 Water Biota 11 Quarterly *)14 Social, Economy, and Culture 10 Annually

*) Monitored by PTBA






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Sustainability

From the routine monitoring result, it showed that all pollutant indicators met BML requirements and the Company achieved various improvement in environmental quality surrounding and inside operational areas as follows: • Biodiversity monitoring (Plankton, Benthos dan Necton) in water bodies surrounding

operational location of PT Bukit Asam (Persero) Tbk Tanjung Enim Sumatra Selatan by PPLH UNSRI indicated that the general condition was good and conducive to water biota life.

• Wildlifemonitoringshowedthatrehabilitatedandrevegetatedformerminingareasweresuitable for wild animals to live in. At several sites some birds of rare species that are protected by the law were found, such as besra, bat hawk, blue-eared kingfisher, and halcyon. Some mammals were found as well, such as mitred-leaf monkey/lutung, white mitred leaf monkey/simpai, deer, and protected reptile, cobra.

• Revegetationmonitoringdisclosedthatrevegetationproceededwell,withgrowthrateofrevegetation plants at above 80%, but maintenance should be intensified.

• Social, economic, and cultural monitoring showed that the overall environmentalmanagement and monitoring were according to the plan in AMDAL. Distribution of Company’s assistance to surrounding communities, particularly in South Sumatera was generally in accordance with RKL and RPL documents. The monitoring also showed that the community’s perception towards Company’s activities was very good and fully supportive of the mining activities.

Results of monitoring and evaluation conducted according to the established standards showed that all parameters are within the range of BML. Therefore, in the reporting year under there was no fine imposed on the Company in relation to violation of environmental management regulations. (EN28 )

Biodiversity ManagementThe Company regards biodiversity preservation as an effort to maintain the sustainability of the earth. Success in conserving biodiversity of mining area also means success in conserving the mining area itself, both during and post-mining. In effort to preserve biodiversity, the government has designated certain forest areas as conservation areas or protected-forest areas, where endemic wildlife and fauna can live and grow well, free from the influence of human activities, including mining. Within the conservation areas, wildlife is protected and its capture and hunting are prohibited. Some areas outside the protected forest have been designated as production forest, which allows mining and plantation activities with the Permit to Use Production Forest (IPPKH).

The Company currently operates outside the protected-forest areas, where some of its operations are located in production forest areas under the Permit to Use Production Forest issued by the Minister of Forestry. (EN11) The Company’s entire area is self-managed without the involvement of indigenous people or any management contract of such involvement. (MM5)





One of the Company’s mining sites managed by its subsidiary, Batubara Bukit Kendi (BBK), has ceased its operation since early 2010 due to pending settlement of the Permit to Use Production Forest. In the reporting period, this permit issue has been settled and BBK is expected to resume operation in the near future. There was no incident of strikes reported during the reporting year. (MM4) Additionally, there was no land dispute with the indigenous people, thus no dispute-related action was taken. (MM6, MM7)

On its licensed areas, the Company applies green mining concept for its mining operations. This concept means that the Company seeks to restore the used mining areas to their original condition. In addition, the Company also attempts to minimize direct impact of mining activities that may take form in alteration of landscapes and subsequent loss of vegetation on the land, along with its accompanying ecosystem. (EN12)

To minimize those impacts and accelerate the restoration process, the Company executes rehabilitation program, which includes the designation of buffer zone. The buffer zone is immediately adjacent to residential and watershed areas as well as revegetated land that have been completely restored into forest area with its natural beauty, flora, and fauna. (MM2)

The Company carries out several programs to preserve biodiversity of its operational areas, including:- Conservation of local plants (retrieval is performed by rotation system).- Plant enrichment with rare and economically-valued plants.- Cultivation of endemic plants in the nursery facility managed by the Company, including

merbau, local durian, etc.

Through these programs the Company has recorded various habitats in its licensed areas with the purpose of biodiversity mapping as well as identification of protected flora and fauna species. The mapping data is subsequently used to support reclamation and rehabilitation of Post-mining areas in order to fully restore their habitats and ecosystems.

Upon the discovery of protected flora and fauna, the Company takes the following actions: (EN14)- For protected flora, the Company performs conservation of local plants prior to land

clearing using the rotation system. The plants are then cultivated in the nursery center and re-planted in the final former-mining areas.

- For protected fauna, the Company conducts routine wildlife observation in the reclaimed former-mining areas. Success indicator for this program is the growing number of wildlife creatures (birds, reptiles, and mammals) compared to pre-conservation.

In regards to the possible existence of protected flora and fauna as stated in the International Union for The Conservation of Nature and Natural Resources (IUCN) and the Indonesian Government’s list of endangered species in its licensed areas, the Company, with the assistance of PPLH UNSRI, routinely conducts wildlife observation. The benchmark used is changes in wildlife parameters, namely, total number, type, and diversity, as well as wildlife conservation status according to IUCN and Appendix of Law No. 7/1999 concerning the type of animals and plants protected in Indonesia. The Company constantly observes the listed wildlife species present in its operational areas. (EN15)






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Sustainability

In 2012, the Company observed six wild mammalian species, 79 avian species (Aves), and four reptilian species (Herpetofauna) in three mining sites, i.e., Tanjung Air Laya (TAL), Muara Tiga Besar (MTB), and Batubara Bukit Kendi (BBK). Results of the wildlife observation that includes animals protected under the IUCN convention are summarized in the following table: (EN15)

Species of Protected Wildlife Period of Dec 2011 to Dec 2012 No Species Name Local Name 2012 Conservation

StatusJune Dec MAMMAL 1 Presbytis melalophos Mitred Leaf Monkey /

Lutungv v P

2 Presbytis melalophos alba White Mitred Leaf Monkey / ‘Simpai’

v v P

3 Cervus unicolor Deer v - P TOTAL 3 2

AVES1 Falco subbuteo Eurasian Hobby v v P2 Halcyon smyrnensis White-throated

Kingfisherv v P

3 Halcyon pileata Black-capped Kingfisher

v v P

4 Todirhamphus chloris Collared Kingfisher v v P5 Accipiter virgatus Besra Sparrow Hawk - v P6 Macheiramphus alcinus Bat Hawk - v P7 Ictinaetus malayensis Black Eagle - - P8 Butastur indicus Gray-faced Buzzard - - P9 Butastus liventer Rufous-winged

Buzzard- - P

10 Alcedo coerulescens Small Blue Kingfisher v - P11 Alcedo meninting Blue-eared Kingfisher v v P

TOTAL 7 7 HERPETOFAUNA 1 Elaphe radiata Cobra v - P TOTAL 1 0

Remarks:v=observed,-=notobserved,P=Protected,NP=NotProtected(GovernmentRegulation7/1999)Source : 2012 wasling observation data

These various efforts demonstrate the Company’s commitment in implementing the green mining concept through efficient mining practices, constant damage minimization, and continuous environment preservation. Other measures taken to show its commitment in environmental conservation are in land clearance and post-mining rehabilitation.





Cost for Environmental Management and ConservationAs a commitment from the management towards the environment and post-mining, as well as in accordance with financial accounting standard (PSAK 33), the Company prepared a provisional environmental document. The Company has allocated funds for environmental management and monitoring program whose amount is fixed as provision on each weight unit of coal produced. In keeping with the increased production and the Company’s commitment to environmental conservation, the allocated amount of provision for this program in 2012 was Rp4,400/ton, or a total of Rp263.75 billion. This amount was an increase of 13.2% from Rp232.00 billion last year.

The total amount disbursed for environmental management and monitoring in 2012 amounted to Rp36.35 billion. This cost rose 21.9% from previous year, which totaled Rp29.81 billion. (EN30)

Provision Tariff (Rupiah/Ton)

0

2005 2006 2007 2008 2009 2010 2011

1,500

3,000

4,500

6,000

2,200

2,469

2,477

3,969 4,082 4,100 4,150

Environmental Cost 2011-2012

29,41

2011

EnvironmentalManagementCost

EnvironmentalMonitoringCost

Total EnvironmentalCost

36,35

2012

0,40

2011

0,40

2012

29,81

2011

36,75

2012






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Sustainability

Mine Planning and Post-mining ImplementationLand clearance and mining-area reclamation have been conducted in accordance with the provisions of Law No. 4/2009 and Minister Regulation No. 18/2008 concerning Reclamation and Mine Closure, which impose:• Graduallandclearance.• Slope&BackSlopeformation.• Canal,checkdam,andRipRapconstruction.• CoverCropplantation.• UsageofIncineratorforwaste.• Bioremediation,calcification,andwetlandforliquidwaste.• Sedimentationpoolconstruction.

The Company has complied with the entire provision, as described in “Environmental Management” section. The Company has designed and realized various reclamation/rehabilitation programs for fully mined lands. The Company is committed to realize these reclamation/rehabilitation programs, under the principles of “Mining is a Part of Mine Closure Plan” and “Reclamation is an Investment for Utilization of Former Mines”.

Based on these principles, the Company implemented revegetation program for the entire operational areas, both permanent and temporary. In areas with long-term prospects, i.e. stockpiling area from backfilling mining and stockpiling top soil area, the Company performed routine revegetation. As for the final areas, i.e. areas that will not be turned into permanent mining lands, the Company executed revegetation, rehabilitation, and mine-closure programs.

Revegetation and RehabilitationThe Company performs routine revegetation to preserve soil fertility in stockpiling areas and greening for mining areas with long-term prospects. The Company conducts revegetation phasing in managing biodiversity by:o Planting cover crops to reduce erosion.o Planting fast-growing (pioneer) crops to form canopies.o Planting tropical rain forest species.

In the reporting year, the revegetation and rehabilitation programs carried out by the Company in implementing green mining are: (EN13)- Revegetating finalized and ready-to-plant Post-mining sites in TAL, MTB, and Banko Barat

Mining License. Revegetation was performed using a variety of seedlings from pioneer trees, perennials, exotic plants, oil-producing plants, and fruit plants. The revegetation area covered 102.74 ha and the number of plants grown reached 93,567.

- Greening through Green Friday and Clean Friday programs inside and outside the mining sites, distributing 172,319 seeds to schools and government agencies.





Plant Nursery Center

PTBA owns and develops plant nursery facility on its •operational areas. On this 3 hectare of nursery area, the Company provides a variety of seedlings, from both the original and the enriched products. The total seedling production capacity reaches 500,000 plants per year.

In accordance with their allotments, the cultured plants •range from pioneer plants, cover crops, to greening crops. Whereas according to the type, the cultured plants include: forestry crops: merbau, mahogany, medang, African wood, tropical almond, saman, seru, meranti, rimau, tenam, eucalyptus, forest oak; Multi Purposes Tree species (MPTS): durian, cempedak, mango, rambutan, duku, candlenut; and mangroves: Avicennia, Rhizophora, and mangrove apple. Several of the cultured plants are endemic plants that can only be grown in Sumatera, namely, merbau.

The nursery center is also equipped with Tissue Culture •Laboratory for developing superior crop seeds and enriched seedlings, as well as for developing organic fertilizer (micoriza) and cultivation techniques in greening areas.

500thousand

plants per year

78

Capacity of










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Sustainability

The Company implemented Green Mining scheme by planting trees outside the mining sites and releasing fish into river bodies with the community. The Company also conducted environmental socialization through trainings, banners, billboards, bench markings, books and magazines, posters, and presentations.

To demonstrate its commitment in preserving the environment, the Company initiated a variety of environmental conservation programs in areas around and outside the mining sites. To support the entire revegetation, rehabilitation, and reclamation activities, the Company owns and develops plant nursery center (seeding farm) with a capacity of 500,000 seeds per year. In the reporting year, the Company inaugurated three environmental conservation programs, namely:• WatershedRehabilitationProgram. This program covers an area of 3,660 ha. The Watershed Rehabilitation Program was

inaugurated by the Minister of Forestry in October through the planting of Sumateran endemic plants, merbau. This program will be carried out for the next several years and intensified from 2013 to 2022. Type of crops to be planted include three categories, namely: forestry plantations (merbau, mahogany, medang, etc.), fruit plants/MPTS (durian, cempedak, mango, rambutan, etc.), and mangroves (Avicennia, Rhizophora, mangrove apple, etc.).

• CityForest. City Forest is a greening program aimed to increase green open space in the areas around

Tanjung Enim city. The coverage area is 50 hectares. For this program, the Company refers to Space Program that accommodates two types of city forest, i.e. Recreation and Germplasm Preservation. Based on these two types, the Space Program for the development of City Forest was implemented into four zones, namely, zone 1: Receiving Space, zone 2: Service Space, zone 3: Recreational Forest, and zone 4: Natural Forest. Development of Water Park (zone 1) and Recreational Forest (zone 3) is a manifestation of Recreational City Forest. Natural Forest (zone 4) is a space used to cater Germplasm preservation, whereas Receiving and Service Space (zone 1 and 2) are used to build supporting facilities for City Forest.

• EducationalForest. Educational Forest was initiated by the Company with a coverage area of 100 hectares.

The Company has specified two areas as implementation sites, including 60 hectares in Endikat stockpile and 40 hectares of backfilling MTS, both of which are parts of Air Laya Mining License, which has been freed from mining operations. The Educational Forest was designed to multifunction as:o Observation and research forest for education and research purposes;o Land for experimentation or review and application for research purposes and

identification of major problems in critical land rehabilitation;o Education and training center for students, community, and field practitioners;o Provider of seeds and seedlings of various superior plant commodity;o Ecological function to sustain climate stabilization and genetic resources

(germplasms); ando Part of the REDD (Reducing Emission from Deforestation and Degradation) program.

Development of Enim forest ParkThe Company took a step further and became a pioneer in environmental conservation and post-mining rehabilitation by designating and designing a 5,640-hectare post-mining area into a Forest Park (Taman Hutan Raya or Tahura). The reclamation and rehabilitation programs for post-mining area are in accordance with Mining Area Master Plan (RIWP) devised since 1994

Plant Nursery Center

PTBA owns and develops plant nursery facility on its •operational areas. On this 3 hectare of nursery area, the Company provides a variety of seedlings, from both the original and the enriched products. The total seedling production capacity reaches 500,000 plants per year.

In accordance with their allotments, the cultured plants •range from pioneer plants, cover crops, to greening crops. Whereas according to the type, the cultured plants include: forestry crops: merbau, mahogany, medang, African wood, tropical almond, saman, seru, meranti, rimau, tenam, eucalyptus, forest oak; Multi Purposes Tree species (MPTS): durian, cempedak, mango, rambutan, duku, candlenut; and mangroves: Avicennia, Rhizophora, and mangrove apple. Several of the cultured plants are endemic plants that can only be grown in Sumatera, namely, merbau.

The nursery center is also equipped with Tissue Culture •Laboratory for developing superior crop seeds and enriched seedlings, as well as for developing organic fertilizer (micoriza) and cultivation techniques in greening areas.

500thousand

plants per year

We implement an integrated Green Mining scheme in mining operations





as well as Utilization of Former Coal Mine Master Plan as Tahura Enim. This plan was later ratified as a long term, gradual, and continuous program, in the form of Regional Government Regulation. (MM1, MM2 and MM10)

The company then conducted Tahura Enim construction in compliance with Muara Enim Local Government Regulation No. 4/2004 concerning Utilization of Former Coal Mine of PT Tambang Batubara Bukit Asam (Persero) Tbk in Muara Enim Regency, by dividing the post-mining area into three blocks, namely:1. Protection Block (696 hectares)2. Plant Collection Block (2,508 hectares)3. Utilization Block (2,436 hectares)

These development blocks were further divided into twelve zones, namely:1. Receiving/Recreational zone2. Facilities and Infrastructure zone3. Plantation Forest zone4. Collection Garden zone5. Fruit Garden zone6. Livestock zone7. Water Recreation zone8. Productive Research zone9. Agriculture/Agroforestry zone10. Fishery zone11. Campground zone12. Animal zone

The post-mining reclamation program for Tahura Enim carried out in 2012 included the construction of facilities and the planting of revegetation crops in Utilization Block with activity area covering 15.5 hectares. The various activities conducted included:

Inaugural Planting of Watershed Rehabilitation by Minister of forestry (Tanjung

Enim, 3rd October 2012)






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• In Receiving zone:− Setting up of Tissue Culture Laboratory to develop superior seedlings such as rubber,

oil palm, etc.− Relocating residents and public cemetery, converting the area for Tahura buffer zone

(green belt), and preparing a new site for the public cemetery.− Completing the construction of sport hall, bowling alley, jogging track, and futsal court.

• In Facilities and Infrastructure zone:− Proceeding with the construction of an integrated office for Work Safety, Health, and

Environment (WSHE) Work Unit and BWE System.− Building a 1.7-hectare welcome park.− Building a 2.43-hectare car park.− Building a 10.05-hectare PTBA park.

• In Productive Research zone:− Conducting collaborative field research with University of Bengkulu.− Conducting collaborative research on types of castor oil plant with Sriwijaya University

in Banko Barat Mining License.− Constructing a 1.32 ha plant nursery.

• In Plantation Forest zone: conducting plant enrichment with local plants with high economical value, both in Air Laya and Banko Barat. Substituting pioneer crop (Akasia) with teak, silk tree, puspa, durian, etc.

• Reviewing Tahura Enim Master Plan:− Synchronizing the location of Tahura plan with productive forest area under Permit to

Use Production Forest.

Responsible Mine ClosureKandi and Tanah Hitam in Sawah Lunto, Ombilin, are open-mining areas that were managed by the Company. The total coverage of the open-mining areas was 529.65 hectares, located in Tanah Hitam, Kandi, Sapan Dalam, and Kumanis, while the affected area was ±386.91 hectares or 73% of total area. Open-mining operations in these areas have long been completed and the Company has realized various reclamation, rehabilitation, and revegetation programs in the region. In accordance with the request of local government, the former mines were subsequently rehabilitated and developed as natural tourism area under the name of Kandi & Tanah Hitam Recreational Area.

The mine closure process was preceded by the formulation of Mine Closure Plan (MCP). This document was drafted by a team led by the manager of Ombilin Mining Unit with members from the Company, community, local government, and informants. Through various assessments and intensive discussions with the local government, the team formulated and defined the allotment of former mines in accordance with agreement with the local government. In addition, the designation of former mines allotment also considered all pertinent regulations and applicable Sawah Lunto Regional Spatial Plan. This provision was subsequently manifested into MCP, which contains several key points in regards to:• Legalaspectsofmineclosure• Managementoflabor• Managementofasset• Managementandmonitoringofenvironment• Communitydevelopment• Auditofmine-closureexecution,and• Estimationofmine-closurecosts.





Considering the length of time required for mine closure execution and to ensure the legal certainty for the realization of various activities listed, the plan was formulated into Local Government Regulation No. 07 concerning Sawah Lunto Regional Spatial Plan and Mayor Decree No. INPERKOP.02.16.2004 concerning Utilization of PTBA (Persero) Former Open Mining Unit of Ombilin. The MCP subsequently served as part of both regulations. The area covered by the MCP totaled 395.45 hectares, comprising 192.11 hectares in Kandi and 201.45 hectares in Tanah Hitam.

The land allotment, in accordance to the MCP, is water absorption forest and recreational forest (reclamation and revegetation) with formerly mined lake to function as water reservoir and fishing pond for the community.

Through the post-mining rehabilitation and revegetation activities that have taken place since 1980 to 2003 on the 393-hectares area, now there are various facilities of integrated natural tourisms, including a variety of nature-based economic activities, comprising: Kandi Wildlife Park, Kandi Lake and Tanah Hitam Lake Tourism, horse-racing course, motor-racing course, horse stable, and cow ranch. The entire facility occupies an area of 92 hectares and is equipped with adequate road networks. The remaining area is reclaimed and revegetated with pioneer crops that have grown tall with trunk diameter reaching 80-120 cm.

The rehabilitation, revegetation, and development programs of these natural tourism areas have been completed and handed over to the Sawah Lunto Regional Government in 2008 This realization and transformation of former mining areas into green areas with nature-based economic activities can serve as an example for the closure and transformation of other mines.

former Mines in Bukit Kandi and Tanah Hitam that have been converted into tourist attractions such as horse-racing course and Kandi

wildlife park






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In former mining areas that are part of Ombilin Mining Unit, the Company is currently still managing limited areas in deep mines. Part of the mining network, which has been freed from mining operations, has also been converted into tourist attractions.

AwardsFor its efforts in protecting the environment, the Company received several environmental management awards, namely:

July 2012

Indonesian Green Awards 2012, from the Bisnis dan CSR Magazine in collaboration with the Ministry of Forestry and the Ministry of Industry.

20 Green CEO Award from Warta Ekonomi for the CEO of PTBA.

December 2012

Fourth PROPER GREEN RATING from the Ministry of Environment.

Runner Up of Best Web Site 2012” presented by Mr. Sarwono Kusumaatmaja (Former Minister of Environment).

Runner Up of Best Sustainability Report 2012” from NCSR for CSR, Environmental, and Implementation of Human Rights Programs in the Company, presented by Mr. Sarwono Kusumaatmaja (Former Minister of Environment).





Boosting

National

Growth






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Sustainability

• ContributiontotheState• PartnershipProgram,Promoting

Regional Economic Growth• RelationshipswithBusinessPartners• ProductsandServices• ProductManagement• QualityControl• CustomerService• MarketingandPromotion• BusinessDevelopment• financialimplicationofClimate

ChangePage

86-101





In the reporting year of 2012, the Company faced less-than-favorable condition, namely the decline in average coal selling price due to

weakening global demand. Therefore, to maintain profit margin, the Company adopted operational efficiency measures, so

even though the average selling price of primary product fell as much as 20% in the global market, the Company’s income value could be maintained with a decline of only about 10%. The net profit was also sustained to a decrease of only 5%.

The Company even succeeded in realizing the construction of its own Thermal Power Plant (TPP), so that it will be able to meet operational electricity

needs with simultaneous potential of gaining additional income from the sale of excess power. The TPP operation

is believed to bring about positive impact in reducing electricity costs, thereby increasing sales margin.

In addition, to boost competitiveness, the Company implemented an integrated fund disbursement program, the Partnership and

Community Development Program (PKBL), with operational supporting activities. This was conducted by forming specific industrial clusters around the Company’s operational areas, as well as using Partnership Program fund in producing supporting supplies for Company’s operation according to the competence of local community. The Community Development fund was subsequently used to build supporting facilities and infrastructures for the mentioned industrial clusters, such as roads, community halls, training centers, school upgrades, etc.

The Company was also more serious in utilizing personnel’s competencies in repairing several operational supporting instruments. Additionally, the Company has increasingly been using domestic production components, if the quality and quantity are on the same level as imported products, along with the guaranteed continuity.

This way, the Company was able to maintain profit margin per ton of coal sold. This is crucial as the ability to maintain profit growth under any operational condition is a prerequisite for a company striving to grow in a sustainable manner. Sustainable economic performance record is also valuable for the Company since with good performance, every plan to improve community development as well as to assist environmental revegetation and rehabilitation can be continued.

Therefore, the determination to achieve sustainable development that is based on three basic values, namely, economic viability, environmental accountability, and social responsibility can be accomplished.

The result of the Company’s economic performance which describes the economic value and its distribution to the stakeholders during the reporting period can be seen in the following Economic Performance Overview table. The Economic Performance Overview was constructed in reference to economic performance indicators based on sustainability reporting guidelines, i.e. Global Reporting Initiative/MMSS Final Version 3.0. (EC1)

We demonstrate our

commitment to improve domestic

economic growth and local community

through the execution of a planned

expansion, compliance in tax payment,

close collaboration with local suppliers,

andrealiza

tionofpart

nershippro

gram

fund disbursement that is targeted to

maximizepo

sitivecont

ributionto

the

country, community, and stakeholders

in a sustainable manner






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Table of Economic Value Distribution Summary (Rp million) (EC1)

Description2012 2011 Perubahan

(dlm Rp juta) (dlm Rp juta) %Economic Value Gain Revenue 11,594,057 10,581,570 10Interest income from banks and deposits 323,991 324,890 -80 Net profit from subsidiaries -5,914 -2,791 112 Gain from fixed asset 0 0 0Gain/(loss) from forex differential 149,882 51,415 192 Other incomes 44,483 24,615 81 Total Economic Value Generated 12,106,499 11,057,673 9

Economic Value Distributed Operating costs 4,278,774 3,413,561 25

Employee salary dan benefit - Operational employees 601,045 684,482 -88 - Marketing employees 163,197 179,157 -91 - Administration employees 516,771 547,406 -94 Total employee salary and other benefits 1,281,012 1,411,045 -91 Payment for fund providers - Shareholder (Dividend) 1,613,116 1,281,751 26 - Bank (Loan interest) 3,646 3,249 12 Total payment for funds provider 1,616,762 1,285,000 26

Expenses for government obligations (tax, royalty, etc) 2,491,950 1,963,574 27 Expenses for community development 83,254 74,086 12

Expenses for reclamation/environment 59,922 54,274 10 Total Economic Value Distributed 9,811,674 8,201,541 20 Economic Value Retained 2,294,825 2,856,132 -80

Operationally, in 2012 PTBA recorded net sale value of Rp11.594 trillion, up 10% from the previous year. The total economic gain amounted to Rp12.11 trillion, up 9% from the previous year, as a result of 192% increase in other revenues (net) and 81% increase in forex differential.

The Company successfully redistributed economic value gain of up to Rp9.81 trillion to the stakeholders. The majority of the value gain (44%), an amount of Rp4.3 trillion, was distributed to the partners (mining contractors, PT KAI, etc.), followed by expenses to the government (25%) equivalent to Rp2.5 trillion (for taxes, royalties, etc.), expenses to the employees (13%) equivalent to Rp1.3 trillion, and expenses to the fund providers (16%) equivalent to Rp 1.6 trillion. Only Rp2.3 was retained by the Company to finance its various activities in the following year.

The economic value distribution table shows that PTBA not only increased the wealth of its shareholders, but also positively influenced other stakeholders. Further details on the Company’s financial performance can be seen in PTBA 2012 Annual Report, which is an integral part of this 2012 Sustainability Report.

Contributions to the State (EC9)

As a state-owned enterprise, the company annually provides six contributions to the state, namely, tax, dividend, royalty (production provision fee), retribution, fixed premium, and import duty. Total taxes paid in 2012 amounted to Rp1.741 trillion, up from Rp1.32 trillion in 2011. Royalties (production provision fees) in 2012 reached a total of Rp667 billion, up 14% from Rp585.6 billion in 2011, due to increase in production volume.





Another significant contribution to the state is the dividend. As one of the well-performing state-owned enterprises, almost yearly PTBA pays dividend in an amount set out by General Meeting of Shareholders (GMS). The rate of dividend pay-out in the last five years was 50%. In the reporting year of 2012, the amount of dividend contributed to the state was Rp1.05 trillion.

Therefore, the total contribution paid to the state in this reporting year amounted to Rp3.54 trillion, up 26% from Rp2.80 trillion in 2011. The following graph depicts PTBA’s contributions to the state.

Table of PTBA’s contributions to the state (in billion Rupiah)

20112012

Dividend

Royalties etc.

Taxes

585.7

854.51,049.4

744.2

1,741.9 1,317.9

In addition to financial contributions, the Company provided material contributions including the constructions of several infrastructures and facilities, among others: (EC8)

Asphalt-pavement of • public roads and construction/improvement of foot paths in six districts within Ring 1 zone in Muara Enim and Lahat Regencies.Construction and repair of • community ditch/drainage within Ring 1 zone in Muara Enim, Lahat, Lampung, and Ombilin Regencies.Construction of • public shower facilities within Ring 1 zone in Muara Enim, Lahat, and Tarahan Regencies.Assistance in the construction/improvement of community bridge within Ring 1 zone in •

Muara Enim, Lahat, and Ombilin Regencies.Construction of town hall and community hall• in Ring 1 zone.

The Company also contributed in the formulation of public policies by serving as informant in drafting Regional Regulations pertinent to mining and other production provision fees. (SO5)

Despite its significant contributions to the state, the Company has never received any financial aid for its operational activities from the Government, who is the main shareholder. The only assistance received by the Company was import duty waiver on several key equipments for the construction of Tanjung Enim TPP as ruled by the law. (EC4)

Partnership Program, Promoting Regional Economic GrowthIn addition to direct contribution to the state, the Company contributes indirectly in the form of local employment in its operational areas. This local employment is carried out either directly by the Company or through its partners, the suppliers and the mining contractors. The increase in local employment translates to more active local economic activities and better living standard of the community. (EC9)






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Given the importance of this local employment, the Company considers local employment potential in selecting its suppliers and mining contractors. In addition to the employment, the Company also promotes regional economic growth through the tax payment of its entire fleet of vehicles operating in the area, thus augmenting regional revenues.

Besides through partnership, the Company intensified the promotion of regional economic growth by setting up small industrial clusters with the capacity to synergize with its operational activities. As mentioned above, these clusters were formed and developed to supply supporting material for the operations. These supporting supplies, while were not the main materials, were targeted to be able to create synergy with the Company. Several groups that were formed in 2012 included: Spare-part Manufacturer, Catering Service, Textile Business, Oyster Mushroom Group, Bokashi Fertilizer Group, Breeding Group, Limoa Fishery Group, and Dumpling Snack Industry. Almost all of the products of these business groups were supplied to meet the needs of supporting and operational activities of the Company.

With the supply of these supporting materials, the Company was able to reduce its costs, creating a more efficient operation that is able to compete and maintain good profit margin. Another benefit obtained was in the form of Company’s ability to provide job opportunities, which improve the community’s livelihood without the need to work directly in the Company. (EC9)

On top of direct distribution of Partnership Program fund, the Company also carried out a collaborative disbursement with several strategic partners competent in their fields. This disbursement scheme was generally implemented for agricultural and plantation activities to enhance national food security, particularly for sugar and the breeding of horticultural crops.

As a typical Partnership Program, in addition to distributing low-interest loans, the Company conducts various activities to assist in promoting fostered partners’ product sales in nine provinces. Partnership Program activities carried out in 2012 included:• Distributing partnership fund to Small and Medium Enterprises (SME) and cooperatives in

nine provinces.• Developingsmallbusinessesandcooperativesthroughtrainings.• Conductingentrepreneurshiptrainingprogram.• Involvingfosteredpartnersinnationalexhibitionstopromoteandmarkettheirproducts.

In regards to the distribution policies, the Company has implemented new criteria for new commodities to be subjected to the promotion programs, complementing the existing criteria. These include:• Commodities with quality local raw materials.• Commodities with development potential, both regional products and products of

innovation.• Commodities with the capacity to synergize and/or support the Company’s operations.• Commodities that are labor intensive.





In addition to loan distribution, the Company conducts development programs for fostered partners located in various areas. Summary of the Company’s Partnership Program in 2012 is as follows:• Distribution of partnership fund in the form of soft loans to small businesses and

cooperatives in South Sumatera in the amount of Rp4.1 billion or 71.93% of total fund distributed to 174 fostered partners. The remaining 28.07% was distributed to other provinces, namely, Lampung in the amount of Rp1.5 billion to 102 fostered partners, DKI Jakarta in the amount of Rp0.05 billion to 1 fostered partner, and West Java in the amount of Rp0.05 to 1 fostered partner.

• EntrepreneurialManagementTrainingforprospectivefosteredpartnersin:• CultivationtrainingforfarmersinLampungandSouthSumateraProvincesbyPT

Sang Hyang Seri, June 2012• EntrepreneurialtrainingforsmallbusinessesandcooperativesinMuaraEnimand

Lahat, 20th to 23rd June 2012• PTBA-PTPN10partnershiptraininginEastJava,12thto14thSeptember2012• TrainingforprospectivemembersofSpare-partandManufactureIndustrialCenter,

September 2012• TrainingforBungaMayangSugarCaneFarmersinCirebon,3rdDecember2012• CohortIofESQTraining,17thto18thJuly2012• CohortIIofESQTraining,2ndto3rdAugust2012• CohortIIIofESQTraining,12thto13thSeptember2012

• Assistance in promoting and marketing of fostered partners’ products in variousexhibitions, among others:• JambiEmasExhibition,9thto14thFebruary2012• 2012AdiswaraNusantaraVExhibitioninJCCJakarta• 2012PadangFair• CommemorationofEntrepreneurshipMovementExhibition inJakarta,8th to

11th March 2012• PTBAandPeriskaExhibitioninPTBA31stAnniversary,2012• SouthSumateraExpoinSPCPalembang,15thto20thMay2012• PKBL ICCBazaar Exhibition in SarinahBuilding Jakarta, 11thAugust to 10th

September 2012• Grand Prix Badminton Championship Exhibition in Palembang, 25th to 30th

September 2012• Sriwijaya Festival Exhibition in Lahat, South Sumatera, 15th to 21st October

2012• MuaraEnimExpoinMuaraEnim,SouthSumatera,10thto19thNovember2012

In 2012, the Company aimed to improve fostered partners’ independence while assisted in marketing their products in eight provinces including South Sumatera, Lampung, West Sumatera, DKI Jakarta, Banten, West Java, Central Java, and East Java. Collaborative disbursement of Partnership Program fund with competent partners was done to improve the quality of fostered partners and the rate of successful programs.






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Total fund disbursed for Partnership Program amounted to Rp125.79 billion, of the Rp125.13 billion planned, which was sourced from last year’s balance as well as principal installments and loan administration services from previous years’ distributed fund. The disbursed fund included Rp122.16 billion in soft loans and Rp3.63 billion in training fund.

The soft-loans were distributed to 278 small businesses and cooperatives located in nine areas and covering a wide range of businesses. Disbursed Partnership Program fund in 2012 increased by 27.13% from Rp98.95 in 2011, along with increase in economic enthusiasm created by the growth of new community businesses in the Company’s operational areas. The effectiveness of Partnership Program fund disbursement in 2012 was 86% and the loan repayment rate was 82%.

Collaborative Partnership Program fund distribution was conducted by two disbursing agents, namely, SOE and non-SOE. Collaborative distribution was done with the coordinating SOEs (SOE Distributors) such as PT Perkebunan Nusantara X East Java in the amount of Rp10.00 billion, PT Pertani in the amount of Rp46.88 billion, PT Sang Hyang Sri in the amount of Rp59.52 billion. Thus, a total of Rp116.40 billion was distributed by SOE Distributors in 2012.

A total of Rp65 million was distributed by the non-SOE disbursing agent, PT Bank Perkreditan Rakyat Sriwijaya Prima.

Further information on Partnership Program activities and fund is presented in 2012 Financial Statement of PKBL. The total Partnership Program fund distributed in 2012 is recapitulated in the following table:

Table of Realized Partnership Programs, 2012

No. DescriptionRealization

Unit Rp Million

I Business Sector

1 Industry 28 567

2 Trading 114 2,838

3 Agricultural 117 1,780

4 Plantation 1 30

5 Service 18 485

Total 278 5,700

II Partnerships 14,947 116,462

Total of I and II - 122,161

Training Fund - 3,627

Grand Total 15,225 125,789





Relationship with Business Partners (EC6)

The Company understands the importance of the suppliers in its operational sustainability. Positive interactions between the Company and the suppliers will positively impact the Company’s performance, creation of job opportunities and eventually the local as well as national economic growth. Therefore, suppliers are vital business partners that are part of the business operation chain.

A total of approximately 2,500 business partners are currently involved in the Company’s operations. In its relationships with all of the business partners, the Company applies the principles of professionalism by taking into account various criteria, such as quality standard, work safety and health management system, and environmental management system. The principle of professionalism also includes compliance with regulations concerning competitive price, credibility, accountability, and punctuality of material and service supplies from the partners as well as the fulfillment of human rights of their workers. The fulfillment of human rights is also implemented in several major projects with significant investment that are carried out by the Company, before and since the reporting year. (HR1)

For that reason, the Company periodically evaluates its business partners, both during and at the end of the work contract to establish the basis for the next selection. This process is conducted in a transparent and accountable manner with the allotment of “rebuttal period” at each important stage. To ensure the quality and continuity of the selection process, the Company has introduced “Procedures of Goods and Services Procurement” that includes monitoring mechanism by Internal Audit Unit. (4.6) This policy was implemented to avoid conflict of interest with the partners. In 2012, all business partners have undergone this screening process. In 2012, 567 partners, or 21% of the total 2,710 business partners of the Company, passed the screening process. (HR2)

As part of local economic empowerment, the Company provides the opportunities to competent small businesses and cooperatives from the surrounding area to manage certain service jobs. To fulfill its commitment in improving business partners, the Company launched a number of programs, i.e. (1) specific collaboration program and (2) training program to nurture and develop local business partners in certain scale. Generally, work contracts of maximum Rp100 million are prioritized for local business partners in the operational areas. (HR2)

Products and ServicesThe Company’s main products are coal and briquette. To control the quality of coal product in accordance with the contractual clauses, quality analysis is conducted in stages, starting from exploration, production, and handling up to pre-shipment. Analysis document specifying type and quality of coal is issued and verified by accredited third party, and is enclosed during shipping until the products reach the consumers. (PR3)

Considering the nature of its products that requires spacious area and heavy machineries in its transportation, the Company implements accredited health and safety standard to ensure that the loading and transportation processes which use heavy machineries and specific trucks, do not pose health hazards to the operators and the local community. The Company does not perform any special coal packaging system. The distance between loading area and the nearest residence is standardized; the coal grains is arranged by size during transportation to reduce the amount of fine dust blown by the wind, even though the dust is not health threatening. In stockpile areas and along the transportation path in the mining area, water is sprayed regularly to reduce the effect of airborne dust. (PR1).






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Spare-parts Industrial ClusterA form of synergy between Partnership Program fund disbursement and our operational activities to demonstrate the meaning of sustainable joint growth and development.





Delivery of all briquette products (100% of production) to the consumers is done in packages with specific weights, maximum of 20 kg and 12 kg, thus preventing back injury when consumers lift or move them. The 20-kg packages are for egg type while the 12-kg packages are for cube type. Such paper/plastic packaging is specifically designed for briquette products and labeled with Company’s logo with clear description of type, weight, usage suggestion, and other relevant information. Considering that coal and briquette are not highly biodegradable, evaluation on health impacts to improve briquette packaging and coal handling is not performed in accordance with their life cycle but within a certain period of time according to the referred ISO regulations as well as WSH management system. (PR1, PR3)

With well-controlled production, transportation, and delivery that are monitored at every coal-transfer point, as well as high quality production and packaging of briquette, in the reporting year there was no consumer complaint in regards to violation of health regulations and standards of the Company’s products. (PR2, EN27)

Product Management PTBA implements the Coal Handling Procedure to maintain product quality. This procedure includes recording of quality, stockpiling, blending, and loading of coal in Tanjung Enim, Tarahan Port, and Kertapati Pier.

Coal is handled by the Company according to the Quality Management System standard ISO 9001:2008 to guarantee coal quality and supply, which includes:• Stockpile Management The arrangement of the produced and blended coals is classified according to its caloric

quality and consumers needs. The Company has installed the Hopper Blender facility to support the blending process, thus ensuring coal quality that matches consumers’ requirements. This is followed by general overhaul of stacker reclaimer in stockpile areas to accelerate storing and loading processes.

• QualityControl The Company maintains product quality using strict quality control mechanism at every

production stage. This quality control process adheres to Quality Management System ISO 9001:2008. With this system, the Company runs sampling test to ensure the quality of coal to be mined. Quality test is subsequently performed in the mine stockpile prior to loading onto train or delivery to consumers, followed by testing in port’s stockpile before loading onto ship.

Coal quality is analyzed by the Company’s Laboratory Unit that has been certified with Laboratory Quality Management System ISO/IEC 17025:2005 from the National Accreditation Committee. This laboratory is also responsible in testing mine liquid waste to meet the Environmental Quality Standards.






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• Transportation The Company collaborates intensively with PT Kereta Api Indonesia (PT KA) in transporting

coal from Tanjung Enim to Tarahan Port (Lampung) and Kertapati Pier (Palembang). Coal is unloaded from the train carriages by Rotary Car Dumper (RCP) at the port and Apron Feeder (AF) at the pier. The entire process is now supported by the application of information technology, the Supply Chain Management System (SCMS), specifically designed and developed to support the Company’s operations.

Quality ControlThe Company sets a quality control policy called Bukit Asam Management System Policy and prioritizes customer satisfaction by maintaining high quality products. Therefore, the Company consistently observes “Quality Culture, Quality Awareness, Quality Concern, and Quality Commitment” and complies with all pertinent laws and regulations in fulfilling customers’ demands.

Every product delivered is always in reference to the specifications of consumers’ demand (Tarahan Port, Kertapati Pier, Bukit Asam TPP, PT Semen Baturaja, and retail sales), and, if necessary, blending process is conducted to meet quality specifications required by the consumers. Quality test results are also sent to the consumers. With this transparent procedure, consumers are aware of the quality and quantity of products that they will receive, and in any case of discrepancy, they will be able to file their complaint clearly and accurately. (PR4)

Customer ServiceA Customer Service Center has been set up to receive inquiries and complaints from the customers as well as the general public. This is a manifestation of the Company’s awareness of the importance and benefits of compliance with quality standards and consumers’ protection of all its products. Both aspects significantly impact the Company’s sustainable business growth.

The Company coordinates various efforts to ensure product quality that meets consumers’ demands, in accordance with the terms of purchase and product specifications listed on marketing brochures (marketing kit) and presentations. The Company’s business processes are conducted according to the accredited procedures which cover planning, mining, handling and transporting, marketing, and loading at Tarahan Port and Kertapati Pier. To ensure that all processes are run as planned, coordination and planning meetings are held monthly to discuss supply chain performances such as sales, production, transportation, and quality targets. These efforts are made to guarantee consumer satisfaction, as reflected in zero violation of product specifications and contracts reported in 2012. (PR7)

The Company sets up the customer complaint center by providing phone lines, emails, and regular correspondences for the customers. The Company prioritizes the principles of transparency and responsibility in delivering the best customer service, responding quickly to requests and complaints as part of the service commitment, and honoring customer privacy. As a result, in the reporting period, there was no financial penalty or other sanctions in regard to violation of customer privacy. (PR8)

We apply Quality Management System ISO 9001:2008 to guarantee our coal quality





The following standard procedures are implemented for customer complaint filing:• Customer submits complaint to the Marketing Work Unit.• The Marketing Work Unit forwards the complaint using Irregularity Control Form to loading

stations (Tarahan Port/Kerapati Pier) for further investigation.• Investigation findings by the stations are filed into Prevention and Correction Form to be

verified by the Corporate Management System Work Unit and subsequently returned to the Marketing Work Unit as response material to the customer.

In the reporting year of 2012, the Company settled ten customer complaints concerning product and delivery. The majority of the complaints were pertained to product quality, namely, presence of foreign substance and discrepancy in coal quality. As a consequence of the quality and late-delivery complaints, the Company was obliged to pay a demurrage penalty of US$743,965.55. The Company has conducted evaluation and follow-up by applying corrective steps to avoid recurrence of similar problems in future years. (PR9) Nevertheless, in 2012, the Company was not subjected to any sanction or financial penalty related to misleading product promotion and advertisement. (PR7)

The Company has a Customer Satisfaction Procedure in place to assess the customer satisfaction level. The assessment result is used as a part of evaluation and to ensure continuous improvement towards customer satisfaction.

Through the Coal Technology Department, the Company also provides technical assistance in coal handling and combustion to the end consumers and actively communicates with the consumers to ensure the quality of coal. (MM11)

Marketing and Promotion (2.7)

To increase market access and ensure sales of coal products, the Company launched several marketing programs. As the Company’s consumers are in principle corporate institutions, direct marketing and promotion efforts were made. The Company’s marketing approach is to build common perception of the advantage of long term and mutually beneficial relationships. The Company attempts to provide thorough description of its potentials including efforts to manage Mining License areas by continuously observing environmental conservation aspects and efforts to create positive synergy with the community to build sustainable business growth.

Customer trust is gained not only through presentations and gatherings; the Company also invites consumers and potential consumers to visit the mining areas as well as the supporting facilities such as loading port, jetty, and pier. (PR6) On the other hand, the Company directly approaches potential buyers by conducting work visits to their TPPs to ensure the merit and environmental conservation aspects of their operations.

With these intensive approaches, the Company’s total coal sales volume in 2012 increased to 15.3 million ton, up 14% from last year’s sales of 13.47 million ton. The sales comprised domestic sales of 8.4 million ton and exported sales of 6.9 million ton. The main exporting countries in 2012 were Taiwan, Vietnam, and Malaysia, while the majority of domestic sales were directed to PLN Group for TPP fuel. (2.7)






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Sustainability

To support and improve marketing effectiveness, the Company regularly holds Coordination Meetings involving the entire production and supply chain. The meetings discuss coal market conditions, consumers’ demands, and production constraints in the field as well as transport issues that may affect sales volume. Discussion result is then used to determine the most suitable production and sales strategy.

Additionally, the Company conducts biannual surveys on customer satisfaction. The last survey was rated 3.34 on a scale of 1 to 4, which implies that customers are satisfied with the Company’s products. The customers made several suggestions in regards to caloric-rate based quality control and timely delivery and ship-docking schedule at the pier. (PR4, PR5)

The Company’s product sales are driven by the market, thus eliminating monopoly or anti-competitive business practices that may result in financial sanctions. (SO7)

Honoring Consumer Privacy (PR8, PR9)To date, the Company has never received any complaint from the consumers in regards to violation of privacy. Systems to protect consumer privacy have been put in place; among others is the implementation of Confidentiality Agreement clause in master sales contract with the consumers. No breach of the agreement has been reported thus far.

Business DevelopmentThe Company has formulated a Strategic Plan as guide and reference for operational executions and future business developments in order to realize PTBA’s vision and mission. Broadly, the Company’s business development can be categorized into several basic steps, namely, diversification of revenues, improvement of production facilities and infrastructures, and operational efficiencies.

Diversification of RevenuesThe Company plans to diversify its revenue sources through three main products, namely, utilization of low-caloric coal of less than 5,000 kcal/kg, utilization of Coal Bed Methane (CBM), and construction of mine-mouth TPP fueled by low-caloric coal. The Company has realized various large-scale investment projects to increase its revenues by establishing new coal-based business units. Following the completion of one unit of its own TPP, the Company is currently building two units of small and medium-scale TPP to meet its needs and generate new income. In all these investment activities, the Company demands the fulfillment of human rights aspects by the managing contractors under the Engineering, Procurement, and Construction (EPC) contract. (HR1)

Improvement of Production Facilities and InfrastructuresThe Company conducted improvement of Coal Handling Facility (CHF) in mining locations, transportation facilities, and port facilities, with the ultimate goal of increasing sales volume that so far has been constrained by limited coal transportation from mining locations to the consumers.

Operational EfficienciesOperational Efficiencies were achieved through three major means, namely, improvement of operational production system, development and utilization of communication/information technology (implementation of Supply Chain Management System/SCMS), and fulfillment of power needs from the Company’s own TPP. (Further details on business





development is available in PTBA 2012 Annual Report, which is an integrated part of this 2012 Sustainability Report).

financial Implication of Climate Change (EC2, EN18)As a mining company that excavates coal reserves from the bowels of the earth, the Company is aware of the financial implications brought about by climate change on its business operations. The implication may include losses as well as opportunities to invest in carbon (CO2) emission reduction projects to lessen the effects of global warming.

Extreme weather conditions during this reporting year resulted in financial loss in several mining sites, in the form of increased operational costs due to reduced heavy machineries performance efficiency caused by water excess. To mitigate the risks, the Company has made a detailed mining plan equipped with drainage and pumping systems that are continuously monitored. At the main mining site, Tanjung Enim, South Sumatera, the Company appoints a special manager to monitor weather change. The vast and relatively sloping design of the mining area tones down the effects of extreme weather conditions, such as heavy rainfall, on the Company’s operations.

At the subsidiary’s mining site in South Kalimantan, raining seasons contribute to increased operational costs caused by high water discharge covering the mining area. As a consequence, the roads surrounding the mine are not passable, leading to an increase in transportation costs. Nevertheless, as a whole, the impact of weather change on the Company’s performance has not been significant. (EC2)

Climate change greatly impacts revegetation program by affecting rate of plant growth. Efforts made by the Company to reduce this impact are as follow:• Applyingtherightminingtechniquesbyoptimizinglandclearance.• Greening with plants capable of reducing air pollution and CO absorption (narra,

saman, mango, bullet wood, and mahogany) both in former mining areas as well as areas outside of the mine (Green mining).

• Managing fugitiveemissionbymonitoringmovingandnon-movingemission sourcesand eliminating open waste-burning.

• Graduallyreplacingozone-depletingchemicals,i.e.retrofittingrefrigerantfreon(CFC)with eco-friendly hydrocarbon.

To date the Company has made phased investments to address environmental impacts brought about by climate change, namely, construction of plant nursery in 2009, development of tissue culture in 2010, and investment in additional ambient air measurement instruments to monitor air quality to match Environment Quality Standard (BML) in 2012. (MM11)

The Company also responded to the public concern on climate change by developing mine-mouth TPP. With this development, the amount of CO2 attributable to coal transportation from mining areas to the buyers can be substantially reduced.






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Sustainability

In addition to the development of mine-mouth TPP, increasing awareness of the negative impacts of global warming caused by greenhouse gas emission creates another opportunity for the Company. Its mining areas contain abundant reserves of methane gas in the form of coal bed methane (CBM). The gas has so far been discarded to the atmosphere during mining process.

Using the latest technology, the gas trapped in coal seams can be utilized as eco-friendly fuel for power plants, and for other purposes. The Company has initiated business development for this economic potential, while simultaneously assisted in lowering the emission of carbon dioxide and methane gas, one of ozone depleting substances (ODS). (Please refer to “Business Development” section). (EN18)

Public Perception To obtain feedbacks on the impacts and responses of various mining and operational activites towards community and environment, the Company periodically organizes Community Cultural and Socio-economic Monitoring Program. This program is part of the fulfillment of the Republic of Indonesia Provision of Law No. 32/2009 regarding Evironmental Protection and Management.

Following the monitoring process conducted in 2011, the Company once again monitored 10 villages in areas surrounding the mine. The process was performed in December 2012 by an independent party, Research Institute of Bengkulu Univeristy, and covered socio-economic conditions and community culture, as well as public perception of the Company’s presence.

In the period of 2011-2012, the Company has realized a range of programs that directly relate to the interest of the community. These programs include:• InEconomy:PartnershipProgram• InSocialandCommunity:CommunityandAreaDevelopmentProgram• InEnvironment:Variousgreeningactivities(reclamation,revegetation,andrehabilitation)

Results of the monitoring program demonstrated that public perception of the Company’s presence as well as its entire operational activities, has improved. Monitoring conducted in 2011 indicated varied public perception, including good, moderate, and bad. However, in 2012 all monitored villages scored the Company as either good or moderate. These monitoring results are described in the following two tables:






Public perception of activities of PT Bukit Asam (Persero) Tbk in 2011

No. Village

Indicator

AverageCurrent Activities


Company’s Assistance Future Activities

1 Sirah PulauModerate (48%)Good (36%)

Moderate (53%)Good (40%)




2 Karang RajaBad (40%)Moderate (37%)

Bad (48%)Moderate (38%)

Moderate (40%)Bad (37%)



3 LinggaModerate (70%)Bad (20%)





4 Tegal RejoModerate (65%)Good (22%)





5 BTN MandalaModerate (50%)Good (30%)





6 BTN Air PakuModerate (72%)Good (24%)





7 Talang JawaModerate (50%)Good (40%)





8 Karang AsamModerate (59%)Bad (22%)





9 Keban AgungModerate (65%)Good (35%)

Good (61%)Moderate (39%)




10 DarmoModerate (45%)Bad (31%)





Note:

≥80% of respondents have an average perception of “good” and “moderate”; ≥40% “good”

≥80% of respondents have an average perception of “good” and “moderate”; <40% “good”

≥80% of respondents have an average perception of “moderate” and “bad”; <40% “bad”

≥80% of respondents have an average perception of “moderate” and “bad”; ≥40% “bad”






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Sustainability

Public perception of activities of PT Bukit Asam (Persero) Tbk in 2012

No. Village

Indicator

AverageCurrent Activities


Company’s Assistance Future Activities

1 Sirah PulauGood (48%)Moderate (48%)





2 Karang RajaGood (52%)Moderate (37%)





3 LinggaGood (75%)Moderate (23%)





4 Tegal RejoGood (83%)Moderate (8%)





5 BTN MandalaGood (87%)Moderate (12%)





6 BTN Air PakuGood (82%)Moderate (16%)





7 Talang JawaGood (79%)Moderate (19%)





8 Karang AsamGood (81%)Moderate (12%)





9 Keban AgungGood (58%)Moderate (42%)





10 DarmoGood (59%)Moderate (27%)





Public

Perception

in 2012





Bukit Asam

Care






Sectors Supplement


Sustainability

• PolicyonSocialandEnvironmentalResponsibilities

• PKBLOrganizationalStructure• CommunityDevelopmentProgram• AreaDevelopmentProgram

Page

104-111





Distributing Community

Development fund by

focusing on Education,

Public facilities, and

Health, and considering

integration factors

with the distribution of

Partnership Program

fund and the Company’s

operations

In 2012, PTBA, as an energy-producing company, began a new milestone by operating mine-mouth TPP with a capacity of 3 x 10MW in Tanjung

Enim, South Sumatera. In the coming years, it will also operate several additional mine-mouth TPPs around Tanjung Enim and in Tarahan, the Company’s main loading port. These developments will be followed by the realization of other significant business development programs.

Along with the implementation of these business developments, the Company has redefined its vision, strategy, and corporate value. The current mission of the Company is defined as “Managing energy

sources by developing corporate competencies and individual excellence to provide maximum added value to the stakeholders

and the environment”. Along with the business development and the changes in vision and mission statements, the Company has also

redefined its corporate responsibility implementation program.

In an effort to realize its mission towards achieving its vision and creating quality growth, the Company is now formulating and realizing its social responsibility program

with a new approach. The approach referred to is the fulfillment of the Company’s social responsibility, which means meeting the expectations of stakeholders, namely, customers, business partners, government, shareholders, employees, and local community by conserving the environment.

To that end, the Company runs a Partnership and Community Development Program (PKBL) guided by the Minister of State-owned Enterprise Regulation RI No. PER-05/MBU/2007 pertinent to SOE Partnership Program with Small Enterprises and Community Development Program in accordance with Circular No. SE-07/MBU/2008 regarding the implementation of PKBL. In addition to PKBL, the Company also carries out Area Development Program as an embodiment of Article 74 of Corporate Law No. 40/2007.

The Company has also designed and realized various activities with the aim of fulfilling stakeholders’ expectations by setting parameter of success for every activity. The focus of these activities is in line with the international standards regarding the successful implementation of corporate social responsibility as set by the Global Reporting Initiatives (GRI) 3.1, and formulated in implementation strategy based on the applicable business ethics/norms, including:• Sustainable economic development and community empowerment to improve the welfare

of local community and society at large.• Concernforenvironmentalconservation,includingrestorationofpost-miningareas.• Assuranceinnon-discriminationandrespectforhumanrights.• Assuranceinworkhealthandsafetyinsuranceandimprovementofemployeewelfare.• Implementationofproductsafetyandcustomersatisfaction.• Formationofharmoniousrelationshipswiththecommunitybyapplyinggoodgovernance

principles.

The Company forms a partnership with the Local Government and other competent parties to plan and execute its programs, and directly involves the community in program planning, execution, and monitoring, as well as in implementation of programs that directly affect the social and economic empowerment of the mining community.

Improvement of Community WelfareLocal community is a stakeholder to whom the Company pays great attention in implementing its corporate social responsibilities. The community’s primary expectation is the improvement of welfare and living standard, both economically and socially, along with the Company’s growth and development, so that the local community does not only act as spectators, but also as contributors who, together with the Company, supports the development.






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Sustainability

To achieve this goal, the Company has designed and implemented various social, economic, and environmental activities, as a manifestation of its social responsibility to the community, in particular to those in Ring 1 zone of the mining area. Essentially, the community welfare development program is executed through two main programs, the PKBL and the Area Development Program.

Partnership and Community Development ProgramThe objective of PTBA’s Partnership Program is to boost the resilience and independence of small businesses and cooperatives in the surrounding operational areas through financial aid from the Company’s profit. As for the Area Development Program, it aims to achieve prosperous community by assisting them in realizing the importance of education, social interaction, and living in harmony with environmental conservation.

The Company is confident that these two programs will improve socio-economic welfare of the locals to create a more capable and independent community, and preserve harmonious and sustainable relationship between the Company and the communit

PKBLOrganizationalStructure

HR & General A�airsDirector

Senior ManagerCorporate Social

Responsibility

Finance & Accounting

Manager

Partnership & Area

DevelopmentManager

GM UnitKertapatiPier Unit

Asst. Manager

CommunityDevelopment

Asst. Manager

PartnershipDevelopment

Asst. ManagerLocal

Development

Asst. ManagerFinance

Asst. Manager

Accounting

Asst. Manager CSRPlanning and

Documentation

AsstManager

Partnership

PCD -Tarahan

Port Unit

GM -TarahanPort Unit

PCD -KertapatiPier Unit

GM -Ombilin

Mine Unit

PCD -Ombilin

Mine Unit

Manager - CSR & BW

Planning

Asst. ManagerEvaluation and

Report





To ensure that the PKBL is implemented effectively, the Company has appointed a special task force to manage its execution, led by a Senior Manager who directly answers to the Human Resource and General Affairs Director. The organizational structure of the parties responsible in the execution of PKBL is as follows.

The Company’s vision in carrying out PKBL is “To build a prosperous, independent, and environment-conscious community”.

The Company’s missions in PKBL implementation are:• Supportinggovernmentprogramstoimprovetheeconomic,social,andeducationallevel

of the community, as well as environmental conservation.• Empoweringlocalpotentialandexpandingmarkettoincreasejobopportunitiesforlocal

community.• Increasingcommunity’sparticipation in supporting theCompany’s long-termplans and

post-mining development.

In 2012 the Company has realized the distribution of PKBL fund that amounted to Rp201.16 billion (including operational costs), an increase of 39% from the previous year’s total fund of Rp144.73 billion. Meanwhile, Rp83.25 billion has been disbursed for Area Development Program in 2012.

Details on the Community Development fund disbursement are as follow:

Community Development ProgramPTBA Community Development Program is focused on six main activities, namely, Natural Disaster Relief, Education and Training, Community Health Improvement, Public Facilities Construction, Religious Facilities Development, and Nature Conservation. This program is designed to improve living standard and welfare of the community.

The program is implemented in various schemes, including:• Fund distribution for trainings.• Provisionofworkingcapital,facilities,andinfrastructureforcollectivebusinessgroups.• Funddistributionforinfantnutritionimprovement.• Provisionofseedlingandfishfry.• Fosteringofcollectivebusinessgroups.

The Company uses a series of parameters as success indicators of the program, including:• Improvementofsocialconditionofthelocalcommunity.• Decrease in the number of community’s complaints in regards to the fulfillment of the

Company’s social responsibilities.• TheCompany’sabilitytosmoothlyrunitsbusinessoperationswhilemaintainingharmonious

relationships with the community who is one of its stakeholders.

Along with the Company’s growing operations, total fund disbursed through the Community Development Program implementation, including operational costs, increased significantly by 88% from Rp47.82 billion in 2011 to Rp90.09 billion in 2012. The fund was distributed to finance various activities, as shown in the following table.






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Sustainability

Community Development Program Funds (In million Rp)

Program 2011 2012 % Change

(b) (a) (a : b) Natural Disaster Relief 106 422 298%Education and Training 14,596 19,216 32%Community Health Improvement 3,864 11,494 197%Public Facilities Construction 20,083 23,905 19%Religious Facilities Assistance 4,177 8,141 95%Natural Conservation 431 1,536 256%Operational Costs 1,559 3,378 117%BUMN Peduli 3,000 22,000 633%Total 47,816 90,091 88%

In distributing Community Development fund, the Company is now emphasizing new approaches, namely, synergy with Partnership Program fund distribution and benefits that support the Company’s operations. Therefore, as shown in the previous table, Community Development fund were prioritized for three programs, i.e. Education and Training, Public Facilities Construction, and Community Health Improvement.

Increased fund for education and construction of public facilities were expected to accelerate local community’s independence and stimulate local economic activities. Meanwhile, the increase in community health fund was aimed to improve social quality of the community, thereby leading to increased productivity.

In distributing Community Development fund, the Company is now more active in inviting and involving direct participation of the community in planning, executing, and monitoring the social economic empowerment program of the local community. The engagement of local community, as one of the stakeholders, is intended to develop a sense of ownership of the program and emotional ties with the Company. With this engagement, the community is anticipated to feel not as an object but as a subject, an owner of the program who is responsible for its smooth execution and its results.

One form of community involvements in realizing the distribution of Community Development Program fund is the “Musrenbang” program, specifically implemented to disburse the facilities and infrastructures constructions fund. This program allows the community to participate in all stages of fund distribution, from the establishment of development program, the execution, to the maintenance of jointly-built facilities and infrastructures. Through the “Musrenbang” program, there now exist fostered sub-districts as realization of facilities and infrastructures constructions fund disbursement.

ForEducationandTraining,since2011theCompanyhasinitiated“AyoSekolah=Let’sGotoSchool” program, which provides educational scholarships to the less fortunate students of elementary and junior high schools in Ring 1 zone to enable them to further their studies up to senior high schools. Through this program, grant is provided to each student: Rp1,200,000 per year for elementary level, Rp1,500,000 per year for junior high school level, and Rp1,800,000 per year for senior high school level. The grants are given in the form of saving accounts with the purpose of supporting Bank Indonesia’s program in raising public funds and educating students to save money. (More details can be seen in Text Box “Ayo Sekolah”).

With the fund distribution being focused on the three main programs and also well executed and supported by the community in its design and realization, the synergy between Partnership





Program and Community Development Program funds disbursement as well as the Company’s needs is expected to accelerate. The Company also remains active in distributing fund for Community Health Improvement, Natural Conservation, Religious Facilities Assistance, and Natural Disaster Relief, with operational details as follow.

Public Facilities ConstructionIn disbursing infrastructure construction fund, the Company takes into account any direct and indirect impact on the local economic activities. This can be seen from a series of executed programs in developing public facilities and infrastructures, including: (EC8)• Asphalting public roads.• Paving footpaths.• Constructing town hall and community hall.• Constructing and improving community ditch/drainage.• Constructing public shower facilities.• Constructing and repairing community bridge.• Assisting in the construction or provision other public facilities such as city gate, cleaning

appliances, and office furniture.In 2012, the Company distributed an amount of Rp23.91 billion for facilities and infrastructures development program.

Education and TrainingThe following educational and training programs have been executed by the Company:• Donatingoperationalfundforthemanagementofseniorhighschools,vocationalschools,

and kindergartens in Tanjung Enim.• Distributingfundforcompulsory12-yeareducationprogram.• Organizingmechanicalskillandcraftsmanshipcourses.• Formingandfosteringnewcollectivebusinesses.• Providinglocalandoverseasscholarshipsforwell-performingcollegestudents.• Implementing“AyoSekolah”programbygivingsubsidiestounderprivilegedstudentsfrom

elementary up to senior high schools throughout Ring 1 zone.• Renovatingelementary,junior,andseniorhighschoolbuildingsinMuaraEnim,Lahat,and

Ombilin Regencies.• Constructingschoolfacilitiesandinfrastructures.Total fund disbursed for education and training program in 2012 amounted to Rp19.22 billion.

Community Health ImprovementContinuing previous health improvement program, the Company conducted several activities, including:• Organizing free mass circumcision for children of underprivileged families.• Organizing cataract surgeries for underprivileged patients in Muara Enim and Lahat

Regencies.• Distributingnutritionalpackages.• Buildinghealthpostsandprovidinghealthequipments.• Providingtreatmentsandsurgeriesfortheunderprivileged.• Providingevaluationandtreatmentsforthementally-illpatients.The Company distributed Rp11.49 billion in 2012 to finance community health improvement activities.

Religious Facilities Development, Various activities were performed by the Company, among others: (EC8)• Assisting in the renovation of mosques/mushollas within Ring 1 and Ring 2 zones in Muara

Enim, Lahat, Lampung and Ombilin Regencies.• Donating praying equipments such as speakers, prayer rugs, furniture, and Islamic art

supplies.• Distributingsacrificialanimals.






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Sustainability

“Ayo Sekolah” ProgramTo help easing parents’ burden of the ever-increasing educational expenses, the Company executes “Ayo Sekolah” Program. This program is based on Minister Regulation No. PER-05/MBU/2007 regarding “SOE Partnership Program” and aimed to contribute to the success of Millennium Development Goals Indonesia (MDGI) program. The current Ayo Sekolah Program consists of “Ayo Sekolah SD” and “Ayo Sekolah SMP”.

In “Ayo Sekolah SD”, participating students are given the opportunities to benefit from the program since elementary until senior high school. Meanwhile, “Ayo Sekolah SMP” provides the students with the opportunities to attend junior and senior high schools. At the moment, the program is prioritized for underprivileged families living in Ring 1 zone to help them complete the compulsory nine-year education program.

Partakers of this program include all public and private schools located in nine districts within the Ring 1 zone (six districts in South Sumatera, one district in Lampung, and one district in West Sumatera).

The goals of “Ayo Sekolah” Program are:• TooptimizetheexecutionoftheCompany’sCSReducationprogram.• To reduce the number of drop-outs from the compulsory nine-year education program in the

surrounding operational area.• Toeasefinancialburdenofunderprivilegedfamilies.

The Company imposes lenient basic requirements on program participants, namely, they come from underprivileged families (with parents’ combined income of less than Rp1,500,000/month), they live in Ring 1 zone, they are registered as students or prospective students of elementary school or its equivalent (for Ayo Sekolah SD program) or junior high school or its equivalent (for Ayo Sekolah SMP program), they are committed and willing to complete their study as indicated by filling in the duly-stamped written statements of readiness to finish education.

In 2012, a total of 4,429 students received subsidies from the “Ayo Sekolah” program.

Through “Ayo Sekolah” program, it is targeted that by 2015, within the Ring 1 zone there will be no drop out due to financial reason.






• Donating fund for various religious activities such as MTQ competition, Islamic artcompetition, Islamic preaching, and Tabliq Akbar.

• DonatingfundtotheRing1zonecommunityforcelebrationofIslamicpublicholidayssuchas Maulid Nabi, Israq Mi’raj, and Islamic New year.

Total fund disbursed for religious facilities development in 2012 amounted to Rp8.14 billion.

Natural Conservation, In the execution of Community Development program, the Company was involved in a series of natural conservation activities, namely:• Distributingseedsandproductiveplants(fruits)toRing1zone.• Constructing sanitary facilities and infrastructures such as organic/inorganic waste

disposals and garbage carts/trucks for schools and public places in Ring 1 zone.Total Community Development fund disbursed for natural conservation in 2012 amounted to Rp1.54 billion.

Natural Disaster ReliefThe Natural Disaster Relief program was executed by taking into consideration the urgency of the disaster and its geographical proximity to the Company’s operational areas. In 2012 relief was extended to the following:- Fire victims in OKI Regency, South Sumatera- Fire victims in Muara Enim Regency, South SumateraAn amount of Rp421 million was donated for natural disaster relief in 2012.

Area Development ProgramIn addition to PKBL implemented in reference to the SOE Minister regulations, the Company has been proactively executing Area Development Program as a form of compliance with Article 74 of Corporate Law No. 40/2007. The program is aimed at empowering the community’s economic potentials and fulfilling the Company’s commitment to work together in creating better living standards. In this program, the Company intensifies its direct and indirect participation in facilities and infrastructures constructions as well as in community activities.

In 2012, Area Development Program was mainly directed at the community’s needs, such as supporting improvement of education quality, sport achievements, and direct participations in local development through the Local Government.

The participation in local development was manifested in the form of Regional Development Participation fund in a specified amount. In 2011, the Company distributed Participation fund of Rp38.6 billion, an increase of 125.4% from last year, to the Lampung and South Sumatera Provinces as well as Muara Enim and Lahat Regencies.

The Company also contributed in sport by completing the construction of sport facility, i.e. a tennis hall that is a part of SEA Games arena in Palembang. In addition, the Company distributed fund for local and national football tournaments.

In total, the amount of fund disbursed through Area Development Program in 2012 was Rp83.25 billion, up 12.37% from Rp74.09 billion in 2011.






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Sustainability

Teranglah Desaku Construction of Micro Hydro Power Plant)Aware of the lack of electricity in several villages surrounding its operational area, the Company constructed a micro hydro power plant (MHPP) in Pelakat Village, Semende Darat Ulu Sub-district, Muara Enim Regency, South Sumatera. This village comprises 124 households with a population of 906 residents.

The village is located at the border with Bengkulu Province and far from the reach of commercial power provided by PLN. The village’s surrounding is beautiful plantations and forests. Taking into account its natural setting that is hilly with abundant water springs and beautiful wet forests, the Company initiated the construction MHPP of to meet the electricity needs of all residents.

Through PTBA CSR Musrenbang program in fiscal year 2012, the Company cooperated with Al Azhar Peduli Umat foundation and worked together with the residents to build a MHPP with a capacity of 35 KW, complete with its ditribution network. The electrical power was subsequently channeled to residential housings, mosques, and other public facilities. Construction of the MHPP began in September 2012.

Completion of the MHPP construction provides at least two major benefits to the community, namely, free-of-charge night-time lighthing and common awareness to preserve the surrounding forests, as a source of water supply for the power plant’s micro turbine engine that is owned and self-managed by the community.

Thanks to PT BUKIT ASAM, a village that was once dark at nights, is now shining brightly.






Managing

Sustainable

Human

Resources






Sectors Supplement


Sustainability

• RelationshipwithEmployees• CompliancewithRegulations• DemographicsandnumberofEmployees• CompetenceandCareerDevelopment• RemunerationPackage• OrganizationAlignmentandHuman

Resource Management System Improvement

Page

114-127





We regard human

resources as one of the

our stakeholders with a

central role in supporting

business development

and maintaining corporate

sustainability.

For the Company, human resources are the most important driver of its entire business operations and the key to successful future business developments, either in gaining revenue

(profit), creating public welfare (people), as well as conserving environment (planet). Human resources are one of the stakeholders with central

position as a driver and a spearhead of the Company’s success in manifesting its vision and executing its mission.

Therefore, the Company’s employee management is focused on competence improvement to create reliable human resources in accordance with the vision of “Making human resources of PT. Bukit Asam (Persero), Tbk as the Company’s competitive advantage”. At the same time, the Company strives to meet all of the employees’ expectations of a pleasant work atmosphere, attractive incentives and remuneration packages that correspond to the Company’s financial ability, and fair and transparent rewards according to individual as well as

team’s hard work and competence by providing a clear and fair career development.

The mission of human resource management was established and implemented with the goal of providing the best human

resources and its management system to support the Company’s development. To realize the mission and vision, the Company executed

a series of strategic measures in human resource management, namely:

• Developing and fulfilling personnel competencies as well as grooming professional candidates for management/leadership.

• Performingorganizationalalignmentandimprovementofhumanresourcemanagementsystem.

• Establishing fair, transparent, and accountable assessmentprocedures andemployees’performance managements.

• Facilitating the establishment of culture of excellence to improve human resources’integrity.

The entire strategic measures were designed and implemented with the Company’s serious commitment and investment interest in human resource management with the sole purpose of supporting the realization of PTBA’s vision of “Becoming a World-class Environmentally-friendly Energy Company”.

In 2012, several plans and programs have been realized, primarily in human resources organizational harmonization, IT role enhancement in employment administration, personnel competence improvement, and preparation and implementation of new employee recruitment as part of regeneration program and preparation of human resources in facing business development into a reliable coal-based power provider.

fostering Industrial Relationship with EmployeesThe Company regards the employees as one of the stakeholders with great responsibility in supporting its success and corporate sustainability. Consequently, the Company seeks to establish a relationship of mutual respect with the capacity to create balance between the fulfillment of rights and obligations. This balanced relationship is created through the involvement of two mutually supportive parties, namely, the employees represented by the labor union and the Company. Due to the significance of such cooperation, PTBA strongly supports the establishment of Labor Union.






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Sustainability

Through Collective Labor Agreement, the rights of employees are protected

To ensure its direction and assured implementation of balanced responsibilities and rights, this mutually supportive relationship is manifested in provisions of agreement and regulation as contained in the Collective Labor Agreement (CLA) which is periodically reviewed and revised as well as signed by the Labor Union and the Company. Hence, the rights of all (100%) PTBA employees are protected by the CLA. (LA4).

The employees’ rights in relation to the Company are guaranteed by the agreement, which covers:• Certainty of rights and obligations of the Company and the

employees, including employment scheme, terms and conditions of employment, and the Company’s rules and regulations.

• Regulationofdisagreementresolution,opiniondelivery,anddiscussionprocedures.• Regulationofemploymentterminationandretirement.

Compliance with Manpower Laws and Regulations As a manifestation of the Company’s commitment to regard the employees as the main stakeholder in ensuring its operational success, the Management and the employees (through Labor Union), on 5th March 2012, signed the latest CLA No. Kep 34/PHIJSK-PKKAD/PKB/III/2012, with effect from 5th March 2012 to 4th March 2014. The agreement is biennially reviewed and revised with the possibility of changes during its validity period on the agreement of the Labor Union and the Company in accordance with applicable laws. The signing of CLA demonstrates the Company’s consistent compliance with the manpower laws and regulations.

Several policies that indicate the Company’s compliance with the manpower laws and regulations concerning employee management include:

1. Freedom of Assembly (LA4, HR5)The Company guarantees employees’ rights to assemble and form an in-house employee organization or labor union and to serve in its executive board. This guarantee of employees’ freedom is contained in Labor Union Law No.21/2000 and Article 6-10, Chapter II of the CLA regarding “Position of Labor Union”.

To avoid conflict of interests, the CLA contains a specific provision stipulating that employees from certain work units, namely, Human Resources, Corporate Secretary, Accounting and Budget, Treasury and Finance, and the Internal Audit are prohibited to serve in the executive board of the labor union. The Company’s support for the union and its executive board is regulated and guaranteed by the CLA signed by representatives from the labor union and the Company. (HR5)

The current PTBA’s labor union is Serikat Pegawai PT Bukit Asam (Persero) Tbk, or SPBA. The union is independent, with no affiliation with members of PTBA business groups, and is registered with the Department of Manpower under Proof of Registration No. 560/04/Naketran/6.3/ dated 22nd October 2009.

As a stakeholder with leading responsibility in maintaining business and corporate sustainability, employees can propose suggestions for improvement, opinions, as well as constructive criticisms to enhance operational and welfare schemes to the Top Management through SPBA. The suggestions can be submitted to General Meeting of Shareholders (GMS) or other interaction forums. (4.4)





2. Work Environment (LA2)One factor that can directly influence employee performance is a healthy, safe, and comfortable work environment. The physical and psychological aspects of work environment are managed by the Company to create a pleasant work atmosphere. In remote mining areas, the Company provides sport facilities, fitness centers, and entertainment spots.

With these efforts, the Company has been able to maintain a conducive work environment that creates a pleasant work atmosphere for the employees, as demonstrated by a relatively low employee turnover rate.

In the reporting year, 149 employees resigned from PTBA, or a turnover rate of 5%. Common reasons for employee resignation are natural causes, i.e. retirement or death. Only seven employees voluntarily resigned for personal reasons. (LA2)

Employee Turnover due to Retirement/Resignation/Early Retirement.

Program 2012 2011

Normal retirement 125 116

Resignation 7 5

Others (death or early retirement) 17 16

Total 149 137

We support the Labor Union and its executive board as stipulated

in the CLA Articles signed by the parties

The Company’s Sport facilities in

Tanjung Enim






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Sustainability

Program 2011 2012

Area Male Female Male Female

Death JKT - 1 - 1TE 4 - 10 1

KPT - - 2 -TRH 1 - 3 -SWL - - 1 -

Retirement JKT 4 - 6 -TE 81 4 97 1

KPT 2 - 6 -TRH 5 - 6 -SWL - - 6 -GRSK - - 1 -

Redundancy – Early Retirement TE 10 1 - -Honorable Dismissal TE 1 - - -Dishonorable Dismissal TE - - 1 -Total 101 4 135 7

3. Working Hours and Significant Operational ChangesWorking hours are adapted to the local work area as well as the nature of work, and are limited to prevent over-exploitation of labor. With its nature of business that demands timely delivery, the Company imposes three schemes, i.e. regular working hours, shifts, and specific working hours for special operations in certain areas. If employees are required to finish their work beyond the pre-determined working time, they are given compensation in the form of overtime pay as regulated by the laws.

The Company, as indicated in the CLA, also regulates procedures and notifications of corporate operational changes, through an article that states that any significant operational change will be preceded with notification to all employees at least three months in advance. In practice, the Company issues notifications even one year prior to the occurrence of certain operational changes. This had happened in the realization of mine closure plan in certain areas that are no longer economically viable. (LA5)

As for employment termination, the Company sets a discussion and agreement on severance pay six months in advance (CLA Article 75-80). (LA5)

4. Salary Standard The Company compensates permanent and contractual employees for their performances. The compensations include fixed salary, leave allowance, gratuity and award for outstanding employees, performance incentive, bonus, and other allowances. The amount of remuneration is periodically reviewed.

Minimum wage received by a new employee of the lowest level is ensured to be higher than regional or provincial minimum wage standard of the Company’s main location. In Tanjung Enim, a new recruit of the lowest level receive salary and benefits of Rp1,870,000 per month, 50% higher than South Sumatera minimum wage standard of Rp1,246,667 per month. In addition, the employee is given meal allowance of Rp17,500 per day of attendance. (EC5)

The Company does not impose gender distinction in financially compensating its male and female employees. (EC5)





5. Respect for Human RightsAt the moment, one of the main prerequisites of corporate sustainability is the presence of loyal and competent employees, along with the community’s willingness to accept the corporate, as elements of the most instrumental stakeholders.

The Company is fully aware of the condition and is committed to consistently recognize and uphold human rights in every operational activity. Employees’ freedom to assemble, engage in politics, and voice their opinions for the advancement of the Company (through Labor Union and other designated forums) is a reflection of respect for human rights. (HR 5)

In regards to mining contractor partners, the Company respects the freedom of assembly and politic that they adapt. The Company also opens its communication door for the partners by giving suggestions and negotiations. (HR5)

6. Training and Socialization of Human RightsHuman rights trainings and workshops are specifically provided for employees serving as the security guards both in the mining areas and other operational areas. However, the Company, on its own, has never conducted specific training in human rights for the employees. (HR3, HR8)

The Company works together with the police agency to disseminate human rights knowledge to members of the security guards. By the end of reporting year, all members of the Company’s security forces have received human rights briefing in security refresher courses. This number increased from 78% in 2010. (HR8)

The Company has implemented human rights socialization to its new employees during the code of conduct orientation and to its existing employees during promotion and corporate cultures training sessions.

7. Prevention of Child Labor and Prohibition of Forced LaborThe Company pays great attention to the prevention of child labor. The minimum age requirement of prospective employees is 18 years old. This requirement also applies to mining contractor partners working together with the Company.

The requirement is strictly adhered to and carefully monitored by the Company, thus during the reporting year no under-aged child was reported to work in the Company or its mining contractor partners. This practice is in line with the government policy to ratify manpower laws and regulations, especially International Labor Organization (ILO) Convention. (HR6)

The Company implements shift work system in several operational areas. The system is adapted to the site conditions with a usual of 2 or 3 shifts per day. This shift work system is intended to prevent and eliminate actions deemed as forced labor. (HR7)

During working hours, every employee is given the opportunity to rest at scheduled time. Works performed beyond shift hours are compensated in accordance with the established and agreed remuneration package.

Reasonable working hours that are not deemed as forced labor are also enforced by the Company’s mining contractor partners. (HR7)

The Company is committed to uphold human rights by giving its employees

the freedom of political union and the freedom to voice constructive opinions






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Sustainability

8. Respect for Rights of Indigenous People (HR9)The Company continues to respect the rights of indigenous people, so that during the reporting year there was no incident or violence by PTBA against the local people. The Company always nurtures good relationships by executing a variety of community programs in the form of PKBL and Area Development Program to improve public welfare.

Demographics and Number of EmployeesAt the end of the reporting year, a total of 2,980 personnel were employed by the Company in various posting locations in Tanjung Enim Mining Unit, Ombilin Mining Unit, and Briquette Exploitation Unit, which include 47 personnel assigned to the Company’s subsidiaries and Pension Fund. Of all the employees, only 27 were non-permanent under specified contract, the rest were permanent. (LA1)

1,441

207

317

12

976

2012 20111,503

212

338

16

1,031Up to Junior High School

Bachelor

Senior High School

Master

Diploma

Under the age classification, employee demographics consist of 57 persons (1.93%) aged 25<30, 54 persons (1.83%) aged 30<35, 103 persons (3.49%) aged 35<40, 249 persons (8.43%) aged 40<45, 1,101 persons (37.28%) aged 45<50, and 1,389 persons (47.04%) aged >50. (LA13)

Employee Demographics by Age

2012 2011

25 - 30 57 77

31 - 35 54 42

36 - 40 103 159

41 - 45 249 297

46 - 50 1,101 1,319

>50 1,389 1,206

Employee demographics by education





47%

3.5%1.9% 1.8%8.4%

37.3%

Demografi pegawai menurut usia

2012

201138.9%

2.5%1.4%

9.6%5.1%

42.6%

< 25

35 < 40

25 < 30

40 < 45

30 < 35

< 25

35 < 40

25 < 30

40 < 45 45 < 50

45 < 50

30 < 35

47%

3.5%1.9% 1.8%8.4%

37.3%


2012

201138.9%

2.5%1.4%

9.6%5.1%

42.6%

< 25

35 < 40

25 < 30

40 < 45

30 < 35

< 25

35 < 40

25 < 30

40 < 45 45 < 50

45 < 50

30 < 35

47%

3.5%1.9% 1.8%8.4%

37.3%


2012

201138.9%

2.5%1.4%

9.6%5.1%

42.6%

< 25

35 < 40

25 < 30

40 < 45

30 < 35

< 25

35 < 40

25 < 30

40 < 45 45 < 50

45 < 50

30 < 35

Corresponding with the Company’s operational areas located in three main Indonesian islands, the employees live in the location of their works, as shown below:

Employee demographics by location (LA2)

2012 2011

Operational area Male Female Total Male Female Total

Sumatera 2,649 173 2,822 2,785 183 2,968

Java 96 13 109 97 10 107

Kalimantan 22 22 25 0 25

Total Employees 2,767 186 2,953 2,907 193 3,100

The Company does not limit employment by gender. However, due to the nature of the work in mining areas, the number of female employees is less than their male counterparts. Most of the female employees work in administration and field activity support.

Employee demographics by position and gender (LA1, LA13)

Position2012 2011

Male Female Male Female

Senior Manager 41 2 39 2Mid-level Manager 144 5 112 4Junior Manager 277 28 266 24Senior Supervisor 1760 114 1,696 111Skilled Operator 544 37 790 52Operator 1 0 4 4Sub-total of Employees 2767 186 2907 193Total of Employees 2,953 3,100

Competence and Career DevelopmentConsidering the human resources profile with 80% of employees aged above 45, the increasing competition in mining industries, and the business development and corporate sustainability program, in the recent years the Company has set up various programs to increase the number and competence of the employees. To prepare for highly competent employees, the Company has designed recruitment and competence development processes through trainings, established attractive career paths, and distributed competitive remuneration packages.

Employee Demographics by Age






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Sustainability

The Company has a personnel requirement mapping of each unit, supported by the Prokes program that relies on Information Technology in managing employees’ health issues.

The entire program requires a significant amount of funds; however, the Company is persistent in its execution as human resource development is a worthy investment for the future.

RecruitmentPTBA’s recruitment process is essentially open to anyone. However, to acquire qualified candidates, the Company sets up several basic criteria in its selection, namely, the prospective employee’s capability to pass thinking test (analysis, problem solving, and decision making), ability to work in a team (communication and leadership), and spirit (motivation, adaptability, and willingness to learn). The recruitment process is always preceded with notifications on various media and the Company’s website.

Most applicants who have gone through the recruitment process and subsequently accepted as prospective employees are local residents with the best talent, who come from the surrounding cities or areas where the Company operates. If more than one prospective employee have the same qualifications and test results, priority is given to the locals. (EC7)

Prior to permanent employment, the prospective employees are required to attend a management trainee program called Graduate Development Program. This is then followed by one of the various development programs respective to the line of work of the newly hired employees.

To fill vacant positions, candidates are recruited through competence assessment (technical) for position level IV and below, and through assessment center method for position level III and above.

In 2012, the Company recruited 372 new employees to fill position level I to IV, most of whom were high-school educated.

Competence Training and DevelopmentEvery year the Company organizes various educational and training courses attended by employees of all levels and functions. (LA10)

In general, trainings provided by the Company and attended by all employees include compulsory training, certification training, on-the-job training, and competence training.

In 2012, the Company completed several major programs in human resource management, including:• Establishing career path and succession plan.• MappingtheneedsofemployeesinlinewiththeCompany’sdevelopmentplans.• Realizingearlystagesofrecruitmentprocess.• Conductingtrainingstoimproveemployees’competenceinordertofulfilltheCompany’s

needs.





The purpose of training and development is to cultivate employees’ attitude, mentality, and competence, both in soft skills and hard skills, to face the future challenges and development of the Company. On average, every employee receives 20 hours of training per year. (LA10)

Educational and training programs conducted by the Company in 2012 include: (LA11)• Management competence development, through management development program,

attended by 385 employees. Three participants received the opportunity to earn Master’s degrees abroad and the rest attended local trainings.

• Technical competence development, through Technical Trainings, attended by 2,003 employees.

• Technical competence test, using behavioral event interview and practical method, taken by 756 employees of level IV through VI.

• Non-technical competence test, using assessment center method, taken by 216 employees of level I through IV.

A series of assessments disclosed that the number of level I employees who come from the main operational area (South Sumatera) in the reporting year was 13 or 57% of a total of 23. (EC7)

The recapitulation table of the 2012 educational and training program implementation is as follows. (LA10)

Type of training Internal External Grand Total Total Hours

Managerial 241 141 382 6,592

Technical 1,348 655 2,003 52,408

Grand Total 1,589 796 2,385 59,000

Total training hours 59,000

Average training for each employee 20

Overseas study 3 3

Performance AppraisalThe Company currently applies tools balanced scorecard to evaluate employee performance in a transparent and accountable manner. Employees are appraised periodically by their direct and indirect superiors. Appraisal scores are then used to determine career progression and placement. Appraisal is performed throughout the period of employment as part of competence-based career development scheme. (LA11)

Follow-ups of the performance appraisal are rotation, transfer, and promotion of the employees, implemented for the following goals:

Trainings are provided to cultivate employees’ attitude, mentality, and competence, both in soft skills and

hard skills, to face the challenges and development of the Company.






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Sustainability

• fulfillmentoftheCompany’sneeds,• trainingandenrichmentofemployees’experience,• developmentandappreciationofworkperformance,• careerdevelopment,and• regeneration.

Upon the completion of performance appraisal, employees considered for promotion will go through competence test. The number of technical and non-technical test participants in 2012 was 972. The non-technical test was based on assessment center method and the technical test was based on interview panel and practical method, with the following details:

Technical and Non-technical Competence Tests in 2012

Position Level Technical Test Non-technical Test Total

III 76 76IV 361 140 501V 394 394VI 1 1Jumlah 756 216 972

The next step is promotion and rotation assessment performed on 1,637 employees (or 53% of total) from various position levels, comprising the promotion of 336 employees and the rotation of 1,301 employees. (LA12)

Total Employees Assesed for Career Development in 2012. (LA12)

Program 2012 2011

Rotation 1,301 520Promotion 336 110Demotion 0 0Total 1,615 630

Program 2012 2011 Persentase

Male Female Male Female Male Female

Rotation 1,149 52 1,001 71 95% 5%

Promotion 319 17 139 18 92% 8%

Demotion - - - -

Total 1,568 1,140 1,140 89 94% 6%





Equal Opportunity in Career DevelopmentThe Company guarantees equal opportunity for all employees to develop their careers in line with corporate development. With strict adherence to the equality principle, in the reporting year, there was no discriminatory case based on ethnicity, race, religion, gender, and political affiliation at all organizational levels of the Company. All employees were agreeable with their supervisors’ decision in personnel placement in certain job or position. (HR4)

Remuneration PackageThe Company applies competitive remuneration standard in accordance with its financial ability and results of remuneration survey for similar industries. The process is part of an effort to standardize the Company’s compensation and benefit system that is targeted to motivate the employees to improve their competence and performance.

The Company provides monthly compensation for the employees’ works according to their position ranks. The Company does not discriminate compensation value based on operational area. There is, however, a difference of reward component that is based on employment status, i.e. permanent and contractual employment. Contractual employees do not receive several benefits, such as outside working-hours accident insurance, pension rights, and housing allowance. (LA3)

Remuneration comparison between permanent and contractual employees is as follows:

No Remuneration TypeEmployment Status

Permanent Contractual

A Salary V VB Fixed Allowance

Positional/functional/responsibility allowance V VC Incidental Allowance

Performance allowance/Target achievement incentive V VMeal allowance V VWork risk allowance V VShift allowance V VOther incentives V V

D Other allowancesSocial security V VHealth insurance V VOutside working-hours death benefit VWork accident V VHoliday allowance V VPaid leave V V

E Welfare allowanceFirst marriage allowance VHousing allowance VPension rights V






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Sustainability

Gender Equality in RemunerationThe Company does not discriminate based on gender in its remuneration system. Similar to the equality in career development, the Company applies the same remuneration standard for male and female employees without any discrimination. (HR4) Changes in salary occur solely on the basis of changes in employee level, position rank, and length of service, as well as individual performance. (LA 14)

Salary and remuneration ratio 2012

Ratio of the highest employee’s salary and remuneration to the lowest 1 : 10.44

Ratio of the highest Director’s salary and remuneration to the lowest 1: 1.11

Ratio of the highest Commisioner’s salary and remuneration to the lowest 1 : 1.25

Ratio of the highest Director’s salary and remuneration to the highest employee’s

1 : 2.47

Salary and remuneration ratio by gender 2012

Ratio of the highest male’s salary to the highest female’s 1 : 1.63Ratio of the lowest male’s salary to the lowest female’s 1 : 0.8

Pension PlanPension age in PTBA is 56 years old. The Company has established two pension plans, namely, defined benefit pension plan and defined contribution pension plan. (EC3)

• Definedbenefitpensionplan.(EC3)The amount of pension benefit for this plan is based on the length of service and the amount of salary on retirement date, and is transferable to dependants in the case of employees’ death. Main sources of the pension fund are the employees’ and the Company’s contributions. Employees participating in this pension plan contribute 4.5% of their basic salary, and the remaining amount required is covered by the Company.

Under the defined benefit pension plan, the minimum pension benefit received by the retiree averages 18% of monthly salary. The average PTBA’s contribution for this plan is 16%.

• Definedcontributionpensionplan.(EC3)The defined contribution pension plan is applicable to employees recruited and promoted on July 2009 onwards. Under this plan, the employees have the options to participate in several pension fund companies recognized and acknowledged by the plan. The Company’s annual contribution for this plan is determined based on a certain percentage of employees’ salary totaling 21.2% of basic pension salary each with an increase of 10% yearly.





To prepare employees in approaching retirement, the Company also organizes entrepreneurship training sessions, inviting former employees who have successfully set up their own businesses as resource persons. (LA11)

Employee AwardsIn addition to the previously mentioned programs, the Company implements an award program for the employees as a form of employee development. These employee awards include:• AchievementAward

Award given to an employee or a group of employees considered to have made excellent achievements such as creating new and significant work efficiency method, promoting corporate image, etc.

• ExemplaryAwardAward given to an employee who proves to be a good role model both in the workplace and the community.

• DedicationAwardAward given to an employee with continuous length of service of 15, 20, 25, 30, and 35 years.

• RetirementAwardAward given to an employee who has entered normal retirement age.

Name of Award Recipient of Award Date of Presentation

Achievement Award 27 people 27th February 2012

Exemplary Award 16 people 17th August 2012

Dedication Award 1,098 people August – October 2012

Employee development,

selection, nomination, and promotion based

on individual competence, interest,

and performance






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Sustainability

OrganizationAlignmentandHumanResourceManagementSystem Improvement The Company consistently enhances employee development system through the application of Talent Management to obtain a detailed depiction of the suitability between employees’ competence and requirements of organizational development. Thus development, selection, nomination, and promotion of an employee are fully based on their competence, interest, and performance.

The Company reviews the referred competency model and enhances the role of Assessment Center. In 2012, the Company performed assessments on 972 employees. Based on the various programs carried out, the Company has managed to develop a competence evaluation model suitable for its field of business, including the completion of assessment guide.

Cultivating Culture of Excellence Program pembentukan dan peningkatan budaya unggul yang dilakukan pada tahun 2012, mencakup diantaranya:• Enhancement of the role of assessment center, development and improvement of

competency model, and formulation of assessment guide.• Implementation of BalancedScoreCard in allwork units of theCompany, through the

standardization of performance management system that is expected to expedite the establishment of performance-based culture.

• Implementation of Employee Work Performance Appraisal in every semester, usinga pre-defined Key Performance Indicator (KPI) as the basis for reward and employee development.

• FormulationandsocializationoftheCompany’snewvision,missionandvaluesthroughasocialization program organized in stages. (For further details, please refer to “Sustainable Governance”).

To prepare employees in approaching retirement, the Company set up pension plans in collaboration with competent pension fund companies.





Maintaining

Work Safety

and Health






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Sustainability

• WSHCommittee• WSHMajorActivitiesin2012• WorkAccidents• WorkHealth• WSHAuditandCertification• fireControlDrill Page

130-135





We demonstrate our

commitment in work safety and

health by improving the quality

of the accredited work safety

and health operational standard

through the strengthening of

organizatio

n,improvem

ent

of employees’ competence,

monitoring of operation, and its

periodic assessment to achieve

operational efficiency with a safe

and healthy work environment.

Work safety and health is one of the factors contributing to the successful operation of mining companies. To

demonstrate its commitment in the implementation of safe mining operation, the Company has established Work Safety and Health (WSH) policy, namely, “Work Safety and Health is the responsibilty of all parties, therefore the Company, together with related parties, is committed to create a healthy and accident-free work environment and to execute operational activities in accordance with

applicable rules”.

To ensure that the Company has implemented maximum WSH standard and to prove its commitment

in safe mining operation, since July 2010, the Company has integrated all operational systems involved in the management

of WSH into the Bukit Asam Management System (BAMS). The application of WSH Management System has been accredited by an

independent body in compliance with Minister of Manpower Regulation 05/men/1996 since 2007 and OHSAS standard 18001:2007 since 2008. (4.12)

Contractory safety management system (CSMS) is applied to improve the performance of the Company and its partners or third party contractors in achieving effective WSH management system that includes aspects of human rights.

WSH Executive OrganizationTo ensure the implementation of WSH policy, besides establishing Work Safety, Health, and Environment (WSHE) department, the Company has set up WSH committee / Safety Committee / Work Safety and Health Trustee Committee (P2K3) that consists of Central Safety Committee / P2K3 for Tanjung Enim Mining Unit (UPTE) with members from management and employee representatives from every work unit of UPTE.

Provisions concerning the function, position, and duty of P2K3 are affirmed in Article 82 of Collective Labor Agreement between the Company and the employees. (LA9)

With employee representatives’ presence in P2K3, the committee consists of 25 people, including: 1 chairman concurrently serving as the Company’s management representative, 1 secretary, and 23 members comprising 11 management representatives and 12 employee representatives. 0.4% of 2,953 total PTBA employees are involved in the P2K3. Structure of P2K3 is as follows: (LA6)

WSHTC Structure Chart – Safety Committee PTBA-UPTE

Members

SM. Mining SM Maintenance SM. Planning SM. FacilitySM. SMP SM. Logistic SM. HR Head RSBASM. PAB Mgr. Security Mgr. BWE System

Rep. Mining Rep. Maintenance Rep. WSHE Rep. PABRep. Mining Rep. Maintenance Rep. SMP Rep. HRRep. Planning Rep. Facilities Rep. Logistic Rep. RSBA

Management Representatives

Employee Representatives

ChairmanGM-UPTE/KTT

Secretary

WSHE Manager






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Sustainability

The main duty of P2K3 is to provide advice and opinion, whether requested or not, to the relevant business partners or work unit management in regards to work safety and health issues.

The Company regularly conducts safety committee meetings with relevant work units as well as business partners or mining contractors to remind every party involved to consistently adhere to WSH policy. Within the safety committee level, the meeting is held every 3 months, thus totaling to four meetings in 2012.

To anticipate and address Work Accident risks, the Company established Fire Control and Accident Rescue Team (TPKK) under the coordination of WSHE Work Force of UPTE, with the main task of organizing and managing fire control and accident rescue. The team is also permitted to perform emergency response outside of the Company as a manifestation of the Company’s social concern and responsibility.

The team is currently armed with 96 members, consisting of 20 personnel in Mine Rescue Team and 76 personnel in Emergency Response Team. Of the total, 70 personnel are certified in Search and Rescue (SAR) by the National SAR Board.

WSH Program Realization in 2012 In 2012, to improve the performance of WSH practice in its operational areas, the Company conducted three strategic programs, namely:

Type of Certification 2009 2010 2011 2012 Total

Chief Operational Supervisor 5 1 0 0 6

Associate Operational Supervisor 33 33 0 0 66

First Operational Supervisor 68 74 0 0 142

WSH Expert - General 1 1 4 0 6

WSH Expert - Electricity 0 0 0 4 4

Industrial Hygiene 0 0 2 0 2

Mine Maintenance Management 0 4 0 0 4

Open Mine Planning 0 2 0 0 2

Mining Operation 0 2 0 0 2

WSH Inspection 0 2 0 0 2

Crane Operator 19 14 0 0 33

Class II Explosion Expert 0 4 0 0 4

Radiation Protection 0 1 0 0 1

Total 126 138 6 4 274

• ImprovementofWSH-basedhumanresourcescompetencethroughthestandardizationorcertification of mining employees with the goal of motivating employees of all managerial levels (starting from the line management) to cultivate the awareness of attitude that prioritizes work safety and health.

In 2012, four employees have been certified as WSH Expert – Electricity Specialist. Cumulatively, from 2009 to 2012, a total of 274 employees have been certified with the following details: (LA8)

In addition to the certification program, to improve WSH-based human resources competence, the Company has also organized WSH internal training in PTBA-UPTE attended by 467 employees from the line management. (LA8)





Up to date, the Company has not organized WSH training for families of the employees or local community. However, it is expected that with the trainings provided, the employees themselves would be able to disseminate knowledge and skills concerning WSH to their families and the surrounding community.

• Improvement in the reliability of mining production and support equipments throughequipment/unit certification with the aim of ensuring equipment use in line with WSH policy. A total of 27 units have been certified, i.e. 20 units of crane, 4 units of pressure vessel, 3 units of electrical installation, and ±1,166 units of dump trucks and other heavy machineries that have been given operational permit by KTT.

WSH Performance Statistics in 2012The participation of employees and management in managing WSH risks resulted in the decrease of number of accidents, despite increase in operational activities. Mining accidents that occurred in 2012 involved seven persons, consisting of accidents that resulted in loss of workdays or injuries to four persons (two major accidents and two minor accidents) and accidents that did not result in loss of workdays or injuries to three persons. All of the accident victims were male field workers.

Work Accident Table 2008-2012

Category 2008 2009 2010 2011 2012

Minor 3 3 2 2 2

Major 3 4 2 2 2

Fatal 0 0 1 2 0

Total 6 7 5 6 4

Work Accident Graph

0

2

4

6

2005 2005 2005

Minor

Major

Fatal

2005 2005

To show its commitment in the execution of WSH policy, the

Company quarterly conducts internal audit of WSH management system implementation in accordance with

OHSAS standard 18001:2007 and Minister of Manpower Regulation

05/Men/1996.






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Sustainability

Cumulative working hours in 2012 amounted to 19,395,035 hours, 56 days of which were lost in work accidents. In 2011, total working hours were 16,701,033 hours and 12,065 days were lost due to work accidents. (LA7)

Thus, work accident statistics indicated by Frequency Severity Indicator (FSI) value in 2012 was 0.0006, down from 0.259 in 2011. FSI is an accident rate that combines Frequency Rate (FR) and Severity Rate (SR).

Comparison of FSI indicator in 2012 to the previous years (starting from 1998) is depicted in the following FSI trend graph: (LA7)

Graph of Frequency Severity Indicator (FSI) Trend Year 1998 to 2012

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

F51 1.852 0.013 1.095 0.004 0.264 0.000 0.156 0.003 0.031 0.000 0.000 0.000 0.002 0.177 0.035 1.700 0.001 0.002 0.418 0.001 0.053 0.004 0.134 0.259 0.000

0.000

0.200

0.400

0.600

0.800

1.000

1.200

1.400

1.600

1.800

2.000

FS

I V

AL

UE

The graph above shows declining FSI trend (represented by green line). The smaller the FSI value (towards 0.000 or zero accident), the better.

Vigilance towards Emergency / AccidentTo minimize loss in the event of an emergency, the Company increases role of TPKK under the coordination of WSHE Work Unit of UPTE, through trainings and completion of emergency equipments. The Company’s TPKK actively participates in the 15th Indonesian Fire and Rescue Challenge (IFRC), a training and competition in fire, accident, and disaster rescue. The program was hosted by PT Indominco Mandiri, Bontang, East Kalimantan, and attended by 20 Mine Rescue teams.

In 2012, as a manifestation of social concern towards the local community, TPKK participated in disaster responses in residential housings around the mining areas, including:* Evacuation of drowning victims.* Residential fire control.

Work HealthTo maintain and improve the health of employees and their families, the Company conducts various activities that are catagorized into two major groups, namely: (SO10)• Medical-basedworkhealth.• Work-environment-basedworkhealth.





Cares in medical-based work health are provided by Bukit Asam Hospital, which include: (LA8)• Employeemedicalcheck-ups:

o Pre-employment medical check-up performed during recruitment process to select prospective employees with excellent health, determine employees’ placement in line with their physical conditions, and gather necessary medical information.

o Regular medical check-up performed at least once a year to monitor and maintain employees’ health during their service in PTBA. In 2012, the Company has provided regular check-ups to 1,383 employees.

o Special medical check-ups performed on employees who are assigned in high-risk operational areas, suffering from chronic diseases, or approaching retirement.

• Promoting employees’ health by increasingwork health awareness through: education,training, and counseling to prevent health problems including work-related and other diseases.

• Monitoring hygiene of food service and its personnel (nutritional value, foodcondition, etc.)

• Providingpreventivehealthcareservicessuchasfogging,immunization,etc.

In addition, Bukit Asam Hospital also provides evaluation, treatment, and other healthcare services to employees and their families at Company’s expense. (LA8, SO10)

Work-environment-based work health is managed by WSHE work unit of UPTE by conducting the following activities:• Measuringwork environment parameter. In 2012, theCompanymeasured severalwork

environment parameters, including 40 points in work climate, 40 points in body vibration, 25 points in UV radiation, 40 points in personal dust, 23 points in asbestos level, 24 points in quartz level, and 111 points in noise intensity.

• Monitoringthesanitaryofeveryfoodservice’scookingspace.• Promotingemployees’healthincollaborationwithBukitAsamHospital.

WSH Audit and CertificationTo measure the effectiveness of WSH Management System application, the Company has conducted four internal audits and two external audits. External audits were performed by an independent certification body, AFAQ AFNOR International Indonesia (PT. AAI). In 2012, the Company has maintained its OHSAS 18001:2007 certification.

In 2012, the Company spent a total of Rp4,025 billion.

The Company is committed to implement WSH to the best of its ability in accordance with OHSAS

standard 18001:2007 and Minister of Manpower Regulation 05/Men/1996.






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Sustainability fireControlandVictimRescueDrillin Confined Areas

Preparation of fire control and personnel rescue equipments to enter

burning building and search for trapped victims.

Medical treatment for victims outside the

building and gathering of information regarding the condition and location of

other victims inside.

Trapped victims are found and brought out of the building to receive medical

treatment.

All victims are carried to or placed

in safe medical points to receive

medical treatment.

How to open doors of a burning building.

How to enter a burning building.

Recue Team equipped with self-contained breathing apparatus

(SCBA) and other fire fighting gadgets approaching entry

points and searching for trapped victims.






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Jl. Sisingamangaraja No. 26 – Jakarta Selatan 12120 - Indonesia Tel: +62 21 720 2605 - Fax: +62 21 720 2606 - www.mazars.co.id

PT. Mazars

Independent Assurance StatementReport No. 0413/BD/0023/JK

To the management of PT Bukit Asam (Persero), Tbk

We were engaged by PT Bukit Asam (Persero), Tbk(‘PTBA’) to provide assurance in respect to itsSustainability Report 2012 (‘the Report’). The assurance has been carried out by a multi-disciplined assurance team with a broad range of skills and depth of experience, thus providing a high level of competency for the assurance engagement.

Independence

We were not involved in the preparation of any key part of the Report and carried out all assurance undertakings with independence and autonomy. We did not provide any services to PTBA during 2012 that could conflict with the independence of assurance engagement.

Assurance Standards

We conducted our work in accordance with ISAE3000 ‘Assurance Engagements other than Audits or Reviews of Historical Financial Information’ issued by the International Auditing and Accounting Standards Board. In addition, we have also planned and carried out our work in accordance with AA1000AS (2008) ‘AA1000 Assurance Standards (2008)’, issued by AccountAbility.

Level of assurance and criteria used.

Our evidence-gathering procedures have been designed to obtain a limited level of assurance based on ISAE3000 and a moderate level of assurance engagement as set out in AA1000AS (2008) in order to provide confidence to readers by reducing risks or errors to a very low level but not to zero. The AA1000 AccountAbility Principles Standard (2008) of Inclusivity, Materiality and Responsiveness has also been used as criteria to evaluate the Report.

Scope of Assurance

We provided Type 2 assurance engagement under AA1000AS (2008). This involved:1) an assessment of PTBA’s adherence to the AA1000

AccountAbility Principles Standard (2008) and 2) an assessment on the accuracy and quality of

specified sustainability performance information contained within the Report, in relation to the agreed scope. The scope of work consisted of:

Partnership and community development programOccupational health and safetyPlanning and Implementation of post mining.

Responsibility

PTBA is responsible for all information and claims contained in the Report, including established sustainability management targets, performance management, data collection and report preparation, etc. Our responsibility in performing this engagement is to the management of PTBA only for the purposes of verifying its statements relating to its sustainabilityperformance, more particularly as described in the agreed scope. Our responsibility is to express our conclusions in relation to the agreed scope.

Methodology

We have assessed several assertions and specified data sets included in the report and the systems and processes used to manage and report these using the following methods:

Reviewed report, internal policies, documentation, management and information systemsCarried out interviews with staff involved in sustainability-related management and reporting.Followed data trails to initial aggregated source and checked sample data to a greater depth during the engagement process.




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Jl. Sisingamangaraja No. 26 – Jakarta Selatan 12120 - Indonesia Tel: +62 21 720 2605 - Fax: +62 21 720 2606 - www.mazars.co.id

PT. Mazars

Limitations

Our scope of work was limited to a review of the accuracy and reliability of specified data and interviews with data providers, persons in charge of data collection and processing, as well as persons in charge of sustainability performance-related information, and did not include any on-site validation at the mining site.

Conclusions

AA1000 AccountAbility Principles Standard (2008)

Findings and conclusions concerning adherence to the AA1000 AccountAbility Principles of Inclusivity, Materiality and Responsiveness include:

InclusivityAn assessment has been made to determine whetherPTBA has included all key stakeholders in developingand achieving an accountable and strategic response to sustainability issues.

We found PTBA demonstrates a strong commitment to stakeholder inclusivity. PTBA has an effective systemin place for key stakeholders to participate in the development of the organization's response in the context of sustainability. This is demonstrated for instance, by conducting needs assessment surveys in relation to the community development program.However, we recommend that PTBA continues to improve stakeholders inclusivity systems and procedures on a regular basis to maintain theireffectiveness.

MaterialityAn assessment has been made as to whether PTBA has included in the Report the material informationrequired by its stakeholders in order for them to beable to make informed judgments, decisions andactions.We found PTBA has a strong process in place todetermine material issues. Key material issues wereadequately reported and were found to providebalanced information about PTBA's sustainabilityperformance. A range of internal stakeholders areinvolved in PTBA's materiality determination process. However, we recommend that PTBA continues to conduct materiality test on a regular basis in future reports.

ResponsivenessAn assessment has been made as to whether PTBAdemonstrates that it responds to its stakeholders and is accountable to them.

PTBA was found to be responsive to key stakeholder concerns and expectations. This was achieved through the organization's allocation of resources to stakeholder engagement, the timeliness and accessibility of reported information, and the types of communication mechanisms regularly employed. However, we recommend that PTBA continues to improve stakeholder engagement procedures on a regular basis in future reports.

Reliability of Sustainability Performance Information

Based on our limited assurance engagement, nothing has come to our attention that causes us to believe that the data of the Report has been materially misstated.

All key assurance findings are included herein, and detailed observations and follow-up recommendations have been submitted to PTBA management in a separate report.

Jakarta, April 5, 2013

James Kallman President Director

Mazars is an international, integrated and independent organization, specializing in audit and assurance, accountancy, tax, legal and advisory services. Mazars can rely on the skills of 13,000 professionals in the 61 countries that make up its integrated partnership in Europe, Africa, the Middle East, Asia Pacific, North America, Latin America and the Caribbean, whilst in Indonesia it is served by PT Mazars, one of the leading sustainability assurance providers.






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Statement GRI Application Level Checked Laporan Pengecekan Tingkat Aplikasi GRI

The National Center for Sustainability Reporting (NCSR) hereby states that PT Bukit Asam (Persero) Tbk has presented it’s Sustainability Report to NCSR Application Level Check Services, which have concluded that the report fulfills the requirement of Application Level A+. Application Levels communicate the extent to which the content of the GRI G3.1 guidelines and Metals and Mining Sector Supplement has been used in the submitted sustainability reporting. The Check confirms that the required set and number of disclosures for that Application Level have been addressed in the reporting and that the GRI Content Index demonstrates a valid representation of the required disclosures, as described in the GRI G3 Guidelines. Application Levels do not provide an opinion on the sustainability performance of the reporter nor the quality of the information in the report. Jakarta, 05 April 2013 Drs. Elmar Bouma, CSRA Director

National Center for Sustainability Reporting (NCSR) dengan ini menyatakan bahwa PT Bukit Asam (Persero) Tbk telah kepada NCSR Application Level Check Services, dan menyimpulkan bahwa laporan telah memenuhi persyaratan Level Aplikasi A+ . Tingkat Aplikasi memberi gambaran tentang sejauh mana pedoman GRI G3.1 serta Metals and Mining Sector Supplement telah diterapkan dalam laporan yang disampaikan. Kami menyatakan bahwa laporan tersebut telah memuat seperangkat pengungkapan yang disyaratkan dalam Level Aplikasi tersebut, dan indeks GRI telah disajikan dalam laporan tersebut secara memadai, sesuai dengan Pedoman GRI G3. Tingkat Aplikasi ini bukan merupakan opini atas kinerja keberlanjutan maupun kualitas informasi yang dimuat dalam laporan tersebut. ------------------------------------------------------------- The National Center for Sustainability Reporting (NCSR) is an independent and non-for profit organization, established in 2005 to promote sustainability reporting in Indonesia, Malaysia and Thailand. NCSR is registered as an organizational stakeholder member of the Global Reporting Initiative (GRI) since 2006.



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GRI Index Indicator Page Remarks

Profile1 STRATEGY AND ANALYSIS1.1 Statement from the most-senior policy maker in the

organization (e.g., CEO, chairman, or equivalent senior position) on the relevance of sustainability to the organization and its strategy.

8

1.2 Description of key impacts, risks, and opportunities. 10, 542 ORGANIZATIONAL PROFILE2.1 Name of organization. 182.2 Primary brands, products, and/or services. 182.3 Operational structure of the organization, including main

divisions, operating companies, subsidiaries, and joint ventures.

23, 26

2.4 Location of organization’s headquarter. 7, 202.5 Number of countries where the organization operates, and

names of countries where the main operation is carried out or with relevance to the sustainability issues covered in the report.

26

2.6 Nature of ownership and legal form. 202.7 Markets served (including geographic breakdowns, served

sectors, and types of consumers/beneficiaries)20, 24, 26,

962.8 Scale of the organization. 202.9 Significant changes during the reporting period in regards to

size, structure, and ownership. 6

2.10 Awards received during the reporting period. 273 REPORT PARAMETER

Report Profile3.1 Reporting period. 63.2 Date of latest report (if any). 63.3 Reporting cycle (annual, biennial, etc.). 63.4 Contact address for questions regarding the report or its

content.7

3.5 Proccess in determining content of the report. 63.6 Report limitation. 63.7 State any limitation on the scope or limitation of the report. 53.8 Basis for reporting joint ventures, subsidiaries, leased

facilities, outsourced operations, and other entities with significant effects for temporal or inter-organizational comparisons.

6

3.9 Data measurement technique and the basisfor its calculation. 63.10 Explanation of the effects of re-statement of information

provided in previous report.6

3.11 Significant changes from the previous report. 6

3.12 Table identifying the location of the Disclosure Standard in the report. 141

Assurance

3.13 Current policies and practices in seeking external assurance for the report. 7

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Fully applied

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4 GOVERNANCE, COMMITMENT, AND ENGAGEMENT

Governance

4.1 Governance structure of the organization, including committees under the highest management body responsible for specific tasks such as developing strategy or organization monitoring mechanism.

38, 41, 43

4.2 Indicate whether the Chairman of the highest management body concurrently serves as executive officer. 42

4.3 For organization with unitary board structure, state the number of the highest management body members from independent groups and/or non-executive members.

42, 43

4.4 Mechanism for shareholders and employees to convey recommendations or directives to the highest management body.

37, 38, 42, 49, 116

4.5 Association between compensation for members of the highest management body, senior managers, and executives (including travel arrangement) with the organization’s performance (including social and environmental performance)

43

4.6 Process implemented in the highest management body to ensure the avoidance of conflict of interest.

42, 48, 49, 50, 92

4.7 Process in determining the qualification and expertise of members of the highest management body in driving organizational strategy in regards to economy, environment, and social.

42, 43

4.8 Internal development of statements of vision or value, code of conduct, and principle relevant to economic, environmental, and social performances as well as their implementation status.

21

4.9 Procedure of the highest management body to oversee organization’s management and identification of economic, environmental, and social performance including relevant risks and opportunities.

43, 47

4.10 Performance evaluation process of the highest management body, specifically in relation to economic, environmental, and social performance.

42

Commitment to External Initiatives

4.11 Explanation on how preventive principle or approach is applied by the organization. 47, 49, 50

4.12 Externally developed charters, principles, or other initiatives in relation to economy, environment, and social, to which the organization subscribes or endorses.

13, 26, 56, 132

4.13 Membership in associations (such as industrial association) and/or national/international advocacy organization. 18

Engagement of Stakeholders

4.14 List of stakeholders engaged by the organization. 32, 37

4.15 Basis for identification and selection of stakeholders with whom to engage. 32

4.16 Approaches to engage the stakeholders, including frequency of engagement based on type and group of the stakeholders.

37

4.17 Key topics and concerns raised through the engagement of stakeholders and how the organization responds to the topics and concerns, including its reporting.

37



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ECONOMIC PERFORMANCE INDICATORS

Aspect: Economic Performance

EC1 Acquisition and distribution of direct economic values, including revenues, operational costs, employee compensations, donations and other community investments, retained profits, and payments to the fund providers and the government.

87

EC2 Financial implications and other risks and opportunities for the organization as consequences of climate change. 10, 11, 98

EC3 Coverage of the organization’s defined benefit plan obligations. 125

EC4 Significant financial assistance from the government. 88

Aspect: Market Presence

EC5 Range of ratio of the lowest wage to the local minimum wage standard at significant operational locations. 117

EC6 Policies, practices, and proportion of spending on local suppliers at significant operational locations. 92

EC7 Procedure for local employee recruitment and local senior management proportion employed at significant operational locations.

121, 122

Aspect: Indirect Economic Impacts

EC8 Development and impacts of infrastructure investments and services provided for public benefit in a commercial, in-kind, or pro-bono manner.

88, 108

EC9 Comprehension and explanation of significant indirect economic impacts, including the extent of the impacts. 47, 87, 89

INDIKATOR KINERJA LINGKUNGAN

Aspect: Material

EN1 Use of Materials; itemized by weight or volume. 62

EN2 Percentage of Use of Recycled Materials. 62

Aspect: Energy

EN3 Direct Energy Consumption from Primary Energy Source. 63

EN4 Indirect Energy Consumption by Primary Source. 63

EN5 Energy Savings through Conservation and Efficiency Improvements. 63

EN6 Initiatives in procuring energy-efficient or renewable-energy based products and services, and reduction in energy requirements as a result of these initiatives.

63, 64

EN7 Initiatives to reduce indirect energy consumption and the resulting reduction. 63

Aspect: Water

EN8 Total water collection by source. 64, 65

EN9 Water sources significantly affected by water collection. 65, 64

EN10 Percentage and total volume of reused and recycled water. 64






Aspect: Biodiversity

EN11 Location and size of land owned, leased, or managed by the reporting organization located within or adjacent to protected areas or areas with high biodiversity value outside the protected areas.

58, 73

EN12 Description of various significant impacts of the reporting organization’s activities, products, and services on biodiversity in protected areas and areas with high biodiversity value outside the protected areas.

74

EN13 Habitat protection and restoration. 77

EN14 Strategies, actions, and future plans in managing impacts on biodiversity. 74

EN15 Number of IUCN Red List species and national conservation list species with habitat in areas affected by operations, by level of extinction risk.

75

Aspect: Emission, Effluent, and Waste

EN16 Total of direct and indirect greenhouse gas emissions, itemized by weight. 68

EN17 Other indirect greenhouse gas emissions, itemized by weight. 68

EN18 Initiatives to reduce greenhouse gas emissions and their results. 64, 68, 98, 99

EN19 Emissions of ozone-depleting substances (ODS), itemized by weight. 68, 69

EN20 Emissions of NOx, SOx, and other significant gases, itemized by weight and type. 61, 70

EN21 Total water discharge by quality and destination. 70, 64

EN22 Total weight of wastes by type and disposal method. 70, 62, 72

EN23 Number and volume of significant spills. 71

EN24 Weight of transported, imported, exported, or treated wastes deemed hazardous under the Basel Convention Annex I, II, III, and IV, and percentage of internationally transported wastes.

71

EN25 Identity, size, protection status, and biodiversity value of water body and related habitat significantly affected by the reporting organization’s water disposal and runoff.

65

Aspect: Products and Services

EN26 Initiatives in reducing environmental impacts of products and services and the extent of the reduction. 60, 70

EN27 Percentage of products sold and their packaging materials that are revoked by category. 94

Aspect: Compliance

EN28 Monetary value of significant fines and number of non-monetary sanctions for violations of environmental laws and regulations.

62, 73



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Aspect: Transportation

EN29 Significant environmental impacts of transportation of products and other goods as well as materials used in organization’s operations, and transporting labor.

70

Aspect: Overall

EN30 Total expenditure for environmental protection and investments by type.

PROPER PRACTICES OF LABOR AND WORK

Aspect: Employment

LA1 Total workforce by employment type, employment contract, and area. 119

LA2 Number and rate of employee turnovers by age group, gender, and area. 116, 120

LA3 Benefits provided for permanent employees (full-time) that are not applicable for non-permanent employees (part-time) by main activity.

124

Aspect: Labor / Management Relations

LA4 Percentage of employees protected by the collective bargain agreement. 115

LA5 Minimum notice period of changes in significant activities, including whether it is specified in the collective agreement. 117

Aspect: Work Safety and Health

LA6 Percentage of workforce officially represented in the joint Safety and Health committee between the management and the employee that assists in monitoring and providing advice in regards to work safety and health program.

130

LA7 Rate of work-related accidents, diseases, lost workdays and absences, and deaths by area. 133

LA8 Local education, training, counseling/guidance on risk and its prevention and control to educate employees, their families, and community members about serious/dangerous diseases.

131, 134

LA9 Health and safety issues covered in the formal agreement with labor union. 130

Aspect: Training and Education

LA10 Average training hours per year per employee by employee category/group. 121, 122

LA11 Program for lifelong skill management and development that supports employees’ continuous employability and assists them in managing their final career.

122, 126

LA12 Percentage of employees receiving regular performance evaluation and career development. 123

Aspect: Diversity and Equal Opportunity

LA13 Composition of management/governance bodies and breakdown of employees per category/group by gender, age group, minority association, and other indicators of diversity.

119, 120

LA14 Ratio of male to female basic salary by employee group/category. 125






HUMAN RIGHTS PERFORMANCE INDICATOR

Aspect: Investment and Procurement Practices

HR1 Percentage and number of significant investment agreements that contain human rights clauses or have undergone screening/filtration process in regards to human rights aspects.

49, 92, 97

HR2 Percentage of significant suppliers and contractors that have undergone screening/filtration process in regards to human rights aspects.

92

HR3 Total hours of employee trainings in human rights policies and procedures relevant to the organization’s operations, including percentage of employees that have attended the trainings.

118, 46

Aspect: Non-discrimination

HR4 Number of discrimination cases and corrective actions taken/made. 124, 125

Aspect: Freedom of Assembly and Union

HR5 Assembly and union activities identified with the capacity to pose significant risks and actions taken to support these rights.

115, 118

Aspect: Child Labor

HR6 Activities identified with significant risks in incurring child labor and measures taken to support the abolition of child labor.

118

Aspect: Forced and Compulsory Labor

HR7 Activities identified with significant risks in incurring forced or compulsory labor and measures taken to support the abolition of forced or compulsory labor.

118, 119

Aspect: Security Practices/Actions

HR8 Percentage of security personnel trained in human rights policies and procedures relevant to the organization’s operations.

118

Aspect: Rights of Indigenous People

HR9 Number of violations in regards to the rights of indigenous people and corrective measures taken. 119, 58

HR10 Percentage and total number of operations that have been subject to human rights reviews and/or impact assessments. 57

HR11 Number of grievances related to human rights filed, addressed and resolved through formal grievance mechanisms.

57

COMMUNITY PERFORMANCE INDICATOR

Aspect: Community

SO1 Nature, scope, and effectiveness of each program and practice implemented to assess and manage impacts of operations on the community at the start, during, and at the end of operations.

54

SO9 Operations with significant potential or actual negative impacts on local communities. 57



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SO10 Prevention and mitigation measures implemented in operations with significant potential or actual negative impacts on local communities.

133, 134

Aspect: Corruption

SO2 Percentage and number of work units with corruption risks. 45, 48

SO3 Percentage of employees trained in anti-corruption policies and procedures. 45, 46

SO4 Measures taken in response to corruption incidents. 46, 51

Aspect: Public Policies

SO5 Public policy position and participation in lobbying and formulating public policies. 47, 88

SO6 Value of financial and in-kind contributions to political parties, politicians, and related institutions by country where the organization operates.

47

Aspect: Anti-competitive Practice

SO7 Number of legal actions against the violations of anti-competitive, anti-trust, and monopoly practices, and their sanctions.

97

Aspect: Compliance

SO8 Monetary value of significant fines and number of non-monetary sanctions for violations of applicable laws and regulations.

43

PRODUCT RESPONSIBILITY PERFORMANCE INDICATOR

Aspect: Customer Health and Safety

PR1 Life cycle stages in which health and safety impacts of products and services are assessed for improvement, and percentage of significant products and services category subjected to the procedures.

94

PR2 Number of violations against rules and ethics of health and safety impacts of products and services during their life cycle, per product.

94

Aspect: Product and Service Labeling

PR3 Type of product and service information required by the procedures and percentage of significant products and services subjected to the requirements.

94, 92

PR4 Number of violations against rules and voluntary codes of product and service information and labeling, per product. 95, 97

PR5 Practices related to customer satisfaction, including results of customer satisfaction survey. 97

Aspect: Marketing Communication

PR6 Programs for adherence to the laws, standards, and voluntary codes related to marketing communications, including advertising, promotion, and sponsorship.

96






PR7 Number of violations against rules and voluntary codes of marketing communications, including advertising, promotion, and sponsorship, by product.

95, 96

Aspect: Customer Privacy

PR8 Total number of complaints related to violations of customer privacy and losses of customer data. 95, 97

Aspect: Compliance

PR9 Monetary value of fines for violations of laws and regulations concerning the procurement and use of products and services.

96, 97

11. MINING AND METAL SECTORS

ADDITIONAL INDICATORS FOR MINING AND METAL SECTORS

Aspect: Biodiversity

MM1 Area of land (owned, leased, or managed for production activities or extractive use) disturbed or rehabilitated. 58, 62, 80

MM2 Number and percentage of total areas in need of biodiversity management plans in compliance with specific criteria, and number and percentage of areas with plans in place.

74, 80

Aspect: Emission, Effluent, and Waste

MM3 Amount of overburdens, rocks, tailings, and sediments as well as their associated risks. 58, 62

Aspect: Manpower/Management Relations

MM4 Number of strikes and lock-outs with duration of more than one week. 74

Aspect: Right of Indigenous People

MM5 Number of operations within or adjacent to indigenous territories and number and percentage of operations or sites where there are formal agreements with indigenous community.

59, 73

Aspect: Community

MM6 Number and description of disputes concerning land use and rights of local community and indigenous people. 57, 58, 74

MM7 Description of mechanism used in resolving disputes concerning land use and rights of local community and indigenous people, and its outcome.

57, 74

Aspect: Artisanal and Small-scale Mining

MM8 The organization’s involvement in ASM (Artisanal and Small-scale Mining). 19

Aspect: Resettlement

MM9 Resettlement location, number of families subjected to resettlement and how their lives are affected by the process.

59

Aspect: Closure Plan

MM10 Number and percentage of operational areas with closure plans. 80

Aspect: Product Responsibility

MM11 Program and development concerning product responsibilities. 96, 98, 65



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PT Bukit Asam (Persero) Tbk

Jl. Parigi No. 1 Tanjung Enim 31716

Sumatera Selatan, Indonesia

T. +62-734-451 096, 452 352

f. +62-734-451 095, 452 993

www.ptba.co.id

PT BUKIT ASAM (PERSERO) Tbk

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