pgn sustainability report 2012
TRANSCRIPT
Sus
taina
bility Report
energy for sustainability
delivering
what matters most
sustainability
for stakeholders
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Welcome to PGN’s 2012 Sustainability Report. This is the fourth annual sustainability report since the Company’s first sustainability report was published in 2009.Through this report which refers to reporting standard of GRI, we present information related to the Company’s economic, environmental and social performances throughout 2012 for the benefit of all our stakeholders.
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Outli
ne o
f
Sust
ainab
le Perf
ormance
‘11 ‘12OBTAINED ECONOMY VALUE(USD)
2,24
7,94
4,57
62,
683,
170,
085
‘11 ‘12DISTRIBUTED ECONOMY VALUE(USD)
2,06
6,71
4,20
12,
143,
177,
455
‘11 ‘12REWARD FOR WORKERS(USD)
59,5
38,3
6959
,785
,653
‘11 ‘12PAYMENT TO SUPPLIERS(USD)
878,
854,
180
957,
261,
487
*)exchange rates 2012 = 9670, exchange rates 2011 = 9068
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Sust
ainab
le Perf
ormance
‘11 ‘12PAYMENT TO FINANCIERS(USD)
477,
767,
884
349,
306,
788
‘11 ‘12DIVIDEND FOR STATE(USD)
176,
718,
567
236,
206,
468
‘11 ‘12VARIOUS TAXES FOR STATE(USD)
246,
339,
310
220,
537,
636
‘11 ‘12CRS FUND AND ENVIRONMENT FOSTERING(USD)
18,2
41,5
87
9,96
6,96
6
‘11 ‘12TOTAL AMOUNT OF PARTNERSHIP FUND CHANNELING(USD)
20,7
63,0
0729
,961
,557
Outline of Sustainability Performance Economic Performance2
Years 2011
The
effe
ctive
ness
ratio of ch
anneling the number of assisted partners
Customer S
atisf c
at
ion
Inde
x (C
SI)
Customer Importance Index (CII)
96.5
7 %
96.10 % 45,181
32,321
NO
NE
Economic Performance
The infraction of marketing cases
85.3
3 %
83.33 %
86.67 %88.50 % Years 2012
fund
par
tner
ship
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Environment conservation with community
• Garbage cleaning and reforestation in PGN’s operational areas
• Planting palms and grass at former dump site in off-take area in Sukadanau Rawamaju, Bekasi
• Waste management to produce manures, conducted in 5 cities: Batam, Palembang, Lampung,
Bogor, and Surabaya
• Sea water management to produce safe drinking water in Panggang Island, Kepulauan Seribu
Environment Performance
Outline of Sustainability Performance Environment Performance3
CO2(Ton)
770.381,194.30
(Gigajoule)
GAS
656,173
673,454
(Liter)
320,733497,225 934,638
570,858
(Gigajoule)
19,714
18,367
Years 2012 Years 2011
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Number of Female Workers
369359
Number of Male Workers
1,1951,157
Total Number of Workers
1,5641,516
Outline of Sustainability Performance Social Performance4
Social Performance
Wor
kers
rota
tion
Workers received
annual KPIWorkers inCorporated
in Workers Federation
Workers w
alked out
Cases of infrin
gemen
ts
Cases of infringements of workers regulations
3.45
%
3.23%
100%
100%
NO
NE
Wor
kers
retir
ed fu
nd
SUFF
ICIE
NTL
Y
NONE
NONE
Years 2012 Years 2011
of human rights
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Occupational accidents; Fatality0
Minor Occupational accidents
30
Awards in occupational safety
34
Social Performance
Occupational accidents; LTIF0
Outline of Sustainability Performance Social Performance5
Hours
Workers training
221,776
178,160
Tahun 2012 Tahun 2011
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Education Sector
• Publishing ‘Legends of the Archipelago’ comic series in 33 titles that represent 33 provinces
• Sending out young teachers to 25 elementary schools in remote areas
• Competency education for 100 teachers from 55 preschool education institutions
• Establishing several units of community library
• Developing and renovating schools and education facilities
• Granting scholarship for 1050 college students in 14 state universities in Indonesia
• Granting education funds for 2400 elementary, junior high school and senior high school students
Health Sector (EC8)
• PGN’s ‘Healthcare Car’ covers health services for 36,212 people
• Developing ‘House of Health’ in Sidoarjo
• Providing ‘PGN Healthy Homecoming Command Post’
• Procuring health facilities, such as community ambulances
• Developing and renovating community health centers
Public Infrastructure Programs (EC8)
• Providing 2 units of generator set in Pengadaan Pemping island
• Establishing ‘Limar’ self-sustaining electricity program in Way Kanan and Pacitan
• Giving aid of 3 Arm Roll Truck for Bandar Lampung city
• Developing community hall in Marga Tiga district, East Lampung
• Renovating hanging bridges and roads in Pagar Dewa village, South Sumatera
• Developing and renovating village administration office, village hall, school, gateway, mosque and
community health center in Sriminosari village, East Lampung
Religious Facilities Programs
• Giving aids for development and renovation of religious facilities and other supporting facilities
• Donating charity funds for oIDRhans
Natural Disaster Aids
• Emergency aid for flood victims in Banten areas (Tangerang and Cilegon) and Greater Jakarta areas
• Aid for flood and whirlwind victims in Garut, West Java
• 500 aid packages of basic foodstuffs for victims of landslide in Bali
• Aid for overcoming drought disaster in East Java
• 9 tons of rice for victims of fire in Karet Tengsin and Bendungan Hilir, Greater Jakarta
• Command posts and soup kitchens for victims of earthquake in Sukabumi, West Java
Support Programs for Society
Outline of Sustainability Performance Support Programs for Society6
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Gas SourcePelanggan Rumah Tangga
Pelanggan Komersial
Pelanggan IndustriPower Plants
LNG Transportation Vessel
Compressor Station
1
2
3
4 5
6
7Sumber Gas
Household Customers
Commercial Customers
Industrial CustomersPembangkit Listrik
Kapal Pengangkut LNG
Stasiun Kompresor
1
2
3
4 5
6
7
Gas for the Nation
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Gas SourcePelanggan Rumah Tangga
Pelanggan Komersial
Pelanggan IndustriPower Plants
LNG Transportation Vessel
Compressor Station
1
2
3
4 5
6
7Sumber Gas
Household Customers
Commercial Customers
Industrial CustomersPembangkit Listrik
Kapal Pengangkut LNG
Stasiun Kompresor
1
2
3
4 5
6
7
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
5 PGN’s Response to Climate Change
6 Improving the Climate Together with PGN
Prioritizing the Interests of Stakeholders 7
Good Corporate Governance8
Freedom to Participate in Unions 72 Workplace Environment 72
Employee Turnover 73 Elimination of Forced Labor 74
Fair Remuneration 74 Entitlement Package of Non-Organic Workers 76
Respect for Human Rights 77 Human Rights Training and Awareness Raising 77
Preventing Corruption 78 Contributions to Political Parties 80
Labor Force Profil 80 Equal Opportunity in Workplace 81
Career Management 83 Training and Competency Development 85
Pension and Insurance Programs 85
Information regarding Products 89Product Quality and Compliance with Regulations and Standards 90
Customer Service 91Customer Gatherings 91
Measuring Customer Satisfaction 92
Policies and Organization of OSH 97 Internalization and Road Map of OSH Culture 100
Programs to Improve OSH Implementation in 2012 102 SBU’s Activities and Projects 106
Statistics of OSH Performance in 2012 108 Health Counselling Programs 112
Appreciations on OSH Implementation in 2012 113
Realization of Activities 118Environment Preservation 118
Education Sector 119Health Sector 120
Public Infrastructure Programs 121Natural Disaster Relieve 121
Distribution of Economy Values 127Contribution to the State 128
Contribution to Regional Economy Growth 129Relationships with Partners 129
Partnership Programs 129The Company’s Products and Services 135
Visi, Misi dan Nilai Perusahaan 141 Sosialisasi dan Upaya Pencapaian Visi dan Misi Perusahaan 143
PGN in a Flashback 145The Company’s Milestones 147
The Company’s Shares 149Economy Scale 149
PGN’s Operational Structure 150PGN’s Groups 151
Subsidiaries and Affiliations 152Scheme of Business Structure 153
PGN’s Operational Map 155A Succession of Important Events 157
Achieved Appreciations and Certifications in 2012 159
19 Reporting Period19 Selection of the Contents of This Report
20 Boundary Report and Data Measurement Methodology 20 Changes in the Report from the Previous Year
21 GRI Application Level and Index21 Assurance
21 Contact Details
25 The Impact of Climate Change on PGN25 Business Opportunities Resulting from Climate Change
26 Carbon and Other Gas Emissions from PGN’s Business Activities 26 Carbon Footprint
27 Energy Consumption28 Controlling Carbon Dioxide Gas Emissions
32 Environmental Transformation33 Energy Audit34 PGN’s Roadmap for Environmental Transformation 2013 to 2017
34 Implementation of AMDAL or UKL-UPL (Environmental Impact Analysis)35 Changes in Environment Management Policies35 Sustainable Environmental Management and Monitoring 36 Biodiversity36 Rehabilitation and Revegetation37 Use of Materials39 Waste Management40 The Conservation of Water Resources41 Preserving the Environment through Our Environment Management Program41 Compliance with Environmental Regulations 41 Water Consumption
46 The Management of Stakeholder Interests49 Stakeholder Engagement51 Membership in Industrial Associations and Other Organizations
54 Management Resistance57 Management Structure57 General Shareholders’ Meeting
59 Structure of Board of Commissioners and Directors59 Board of Commissioners
59 Directors59 The Mechanism of Selection and Appointment of Commissioners and Directors
60 Remuneration for Commissioners and Directors61 Fundamental Policies of Management
61 Internal Monitoring and Controlling61 Prevention Against Corruption
62 Policies on Information and Transparency Disclosure 62 Preventing Conflict of Interests
62 Integrity Pact62 Avoiding Politics Involvement
63 Procurement of Products and Services63 The Mechanism of Expressing Opinions to Directors
63 Implementation of International Standards65 Precautionary Approach
67 Internalization of Company’s Culture and Code of Ethics
71 Relationships with Employees72 Compliance with Labor Regulation and Laws
1 Outline of Sustainable Performance
2 Remark from the Board of Commissioners
3 Remark from the Directors
4 About This Report
9 Improving the Well-Being of Employees
Contents
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Community Member’s Life12
Improving Economy13
PGN’s Profile 14
Freedom to Participate in Unions 72 Workplace Environment 72
Employee Turnover 73 Elimination of Forced Labor 74
Fair Remuneration 74 Entitlement Package of Non-Organic Workers 76
Respect for Human Rights 77 Human Rights Training and Awareness Raising 77
Preventing Corruption 78 Contributions to Political Parties 80
Labor Force Profil 80 Equal Opportunity in Workplace 81
Career Management 83 Training and Competency Development 85
Pension and Insurance Programs 85
Information regarding Products 89Product Quality and Compliance with Regulations and Standards 90
Customer Service 91Customer Gatherings 91
Measuring Customer Satisfaction 92
Policies and Organization of OSH 97 Internalization and Road Map of OSH Culture 100
Programs to Improve OSH Implementation in 2012 102 SBU’s Activities and Projects 106
Statistics of OSH Performance in 2012 108 Health Counselling Programs 112
Appreciations on OSH Implementation in 2012 113
Realization of Activities 118Environment Preservation 118
Education Sector 119Health Sector 120
Public Infrastructure Programs 121Natural Disaster Relieve 121
Distribution of Economy Values 127Contribution to the State 128
Contribution to Regional Economy Growth 129Relationships with Partners 129
Partnership Programs 129The Company’s Products and Services 135
Visi, Misi dan Nilai Perusahaan 141 Sosialisasi dan Upaya Pencapaian Visi dan Misi Perusahaan 143
PGN in a Flashback 145The Company’s Milestones 147
The Company’s Shares 149Economy Scale 149
PGN’s Operational Structure 150PGN’s Groups 151
Subsidiaries and Affiliations 152Scheme of Business Structure 153
PGN’s Operational Map 155A Succession of Important Events 157
Achieved Appreciations and Certifications in 2012 159
19 Reporting Period19 Selection of the Contents of This Report
20 Boundary Report and Data Measurement Methodology 20 Changes in the Report from the Previous Year
21 GRI Application Level and Index21 Assurance
21 Contact Details
25 The Impact of Climate Change on PGN25 Business Opportunities Resulting from Climate Change
26 Carbon and Other Gas Emissions from PGN’s Business Activities 26 Carbon Footprint
27 Energy Consumption28 Controlling Carbon Dioxide Gas Emissions
32 Environmental Transformation33 Energy Audit34 PGN’s Roadmap for Environmental Transformation 2013 to 2017
34 Implementation of AMDAL or UKL-UPL (Environmental Impact Analysis)35 Changes in Environment Management Policies35 Sustainable Environmental Management and Monitoring 36 Biodiversity36 Rehabilitation and Revegetation37 Use of Materials39 Waste Management40 The Conservation of Water Resources41 Preserving the Environment through Our Environment Management Program41 Compliance with Environmental Regulations 41 Water Consumption
46 The Management of Stakeholder Interests49 Stakeholder Engagement51 Membership in Industrial Associations and Other Organizations
54 Management Resistance57 Management Structure57 General Shareholders’ Meeting
59 Structure of Board of Commissioners and Directors59 Board of Commissioners
59 Directors59 The Mechanism of Selection and Appointment of Commissioners and Directors
60 Remuneration for Commissioners and Directors61 Fundamental Policies of Management
61 Internal Monitoring and Controlling61 Prevention Against Corruption
62 Policies on Information and Transparency Disclosure 62 Preventing Conflict of Interests
62 Integrity Pact62 Avoiding Politics Involvement
63 Procurement of Products and Services63 The Mechanism of Expressing Opinions to Directors
63 Implementation of International Standards65 Precautionary Approach
67 Internalization of Company’s Culture and Code of Ethics
71 Relationships with Employees72 Compliance with Labor Regulation and Laws
Increasing Customer Satisfaction10
Prioritizing Health and Occupational Safety (OSH)
11
Assurance Statement by Mazars
Application Level Check by NCSR
15
16
GRI G3.1 Content Index17
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Remark from the Board of Commissioners (1.1)
“PGN has its own carbon footprint measurement system, as
a first step towards formulating the effective policies to mitigate greenhouse gas emission resulted from its operational activities”
Dear respected stakeholders,
As we all know, climate change has become a global issue which we must overcome together. Climate change will cause dreadful impacts, not only to the society, but also to business regardless the kind of industry in which it operates, including PGN’s business.
The government has expressed a commitment to cut greenhouse gas emission by 26% in 2020 by carrying out domestic efforts, and an additional 15% by gaining international supports and other potentials through market mechanism. Responding to the government’s commitment, Board of Commissioners appreciates the efforts of PGN’s Management in the initiatives to reduce greenhouse gas emission, which is the cause of climate change. PGN has its own carbon footprint measurement system, as a first step towards formulating the effective policies to mitigate greenhouse gas emission resulted from its operational activities. The voluntary initiative shows the concern of PGN’s Management in the efforts of preserving the earth.
PGN has been gradually carrying out various steps to reduce greenhouse gas emission resulted from its operational activities. PGN has also realized a range of reforestation programs as important steps to decrease greenhouse gas emission and to maintain natural sustainability. All of the efforts are real examples of PGN’s implementations of its commitment in preserving the nature.
Aside from that, Board of Commissioners hails business development programs aimed to increase PGN’s capability in fulfilling the escalating demand on natural gas. This initiative is in accordance with the government’s programs in order to reduce greenhouse gas emission. An increasing usage of natural gas leads to a decrease of greenhouse gas emission. Board of Commissioners has given mandate to the Directors to work hard in catering the demand on natural gas, which has been estimated to increase in the future.
We also appreciate the Directors’ efforts in improving the prosperity of society who live around PGN’s operational areas through the implementation of Partnership and Environment Preservation (PKBL) programs in the year 2012, with the increasing number of programs compared to the previous years. Board of Commisiioners supports all efforts initiated by the Directors in establishing clusters of small enterprises, which have enabled more effective and efficient fostering and controlling activities on the distribution of Partnership Program funds. These programs are expected to accelerate economy growth in the society. Similarly, the initiative to set up fostered villages through the distribution of Environment Preservation program funds is in accordance with the government’s attempts to improve the health of society. The funds have been used to mend education facilities, infrastructures, and to help increase the health of society.
Sustainability Report Remark from the Board of Commissioners11
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Board of Commissioners sees that the implementation of those programs is PGN’s real act in responding to sustainability issues in the economy, environment and social dimensions. Being a company with responsibilities and ethics, Board of Commissioners confides the Directors to continue carrying out strategic measures in sustainability context, including programs related to improvement of professionalism and maintaining the safety and health of the workers and their families.
With the more increasing economy growth, Board of Commissioners has a vision that in the future PGN will face tougher challenges, considering the raising expectation of stakeholders, specifically from the industrial, commercial and household customers, regarding PGN’s capability in providing sufficient gas supply with a good quality and affordable price. However, Board of Commissioners believes, with hard working, professionalism and tough team work, PGN will be capable of suIDRassing all the challenges.
Lastly, Board of Commissioners expresses gratitude and gives the highest appreciation to the Directors and all the staff who have worked hard to achieve sustainable performance in the economy, environment and social aspects.
Jakarta, March 2013
Bayu Krisnamurthi
President of Commissioner
Sustainability Report Remark from the Board of Commissioners12
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
“PGN consistently supports the government’s reforestation program of A Billion Trees Program. In 2012, we have planted 570,858 trees”
Remark from the Directors (1.1,1.2)
Sustainability Report Remark from the Directors13
Distinguished Stakeholders,
We ended 2012 by achieving satisfactory sustainability performance. It has been our contribution for supporting the global efforts towards achieving the Sustainability Development goals. Sustainability is the ability to survive within three interrelated pillars, namely the economic, environmental, and social pillars. In order to enhance the stakeholders’ economic conditions, we have been making continuous endeavors towards improving our environmental and social performance.
In line with the Sustainability Development goals, PGN’s goal is to fulfill the present generation’s needs for natural gas energy without disrupting the ability of the future generations to fulfill their needs. Therefore, We are implementing sustainability programs on an on-going basis which are aimed at improving the economy of the community, maintaining the preservation of the environment, maintaining workers’ comfort and improving concern for the social conditions of the community.
Overcoming Climate Change
In addressing Climate Change in the context of sustainability, the global community is facing the issue of climate change which requires the attention of all economic actors, including PGN. For that puIDRose, we have also assumed a significant role and have joined the global community in addressing climate change by implementing a set of strategic measures for dealing with the aforementioned issue.
In 2012, we have successfully applied the carbon footprint system, which we refer to as “Karbon Kalkulator PGN” (PGN’s Carbon Calculator). Through this system, we are able to track the footprint and calculate the amount of carbon emission from PGN’s operational activities, as well as to determine the appropriate policies and measures in order to mitigate PGN’s carbon emission.
There are several carbon emission mitigation programs which have been and will continue to be implemented, including reducing electricity consumption, increasing the consumption of natural gas energy for power plants, limiting official trips, minimizing the use of paper through the implementation of the paperless concept, and encouraging the implementation of the 3 R (reduce, reuse, recyle) principles. In addition to the above, PGN consistently supports the reforestation movement formally declared by the Government through the One Billion Trees Program. In 2012, we planted as many as 570,858 trees.
Improvement of the Quality of Life of Marginal Community
As a State-Owned Enterprise, PGN continuously supports the Government’s programs aimed at achieving the Millenium Development Goals (MDG’s) through the implementation of the Partnership and Environment Development Program (Program Kemitraan dan Bina Lingkungan/PKBL)the funds of which are
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Sustainability Report Remark from the Directors14
allocated annually from the Company’s profits. Compared to the previous year, PKBL funds for this year indicated an increase of 59%, namely from USD30,101,227 in 2011 to USD47,711,187 in 2012. In addition to that, we also allocate funds on an annual basis for the Corporate Social Responsibility (CSR) Program, which is included in the company’s budget as operational costs. In 2012, CSR funds reached USD491,957 or 78% compared to the previous year’s figure. Until the end of 2012, we have distributed soft loans, which are part of the Partnership Program, in the amount of USD29,961,557 to 45,181 Trained Partners. This program has had significant impacts on the efforts to alleviate poverty, decrease the rate of unemployment and improve the social conditions of the community. As part of its concern for the social condition of the community, PGN has been continuously implementing various philanthropic programs, which include education, health, infrastructure, and humanitarian aid.
Improving the Employees’ Comfort
As the Company’s important assets, we have been making continuous efforts to improve our employees’ professionalism and skills through education and training programs. In 2012, 1,564 employees participated in trainings, with an average of 932.41 training hours per person per year. The education and training costs in 2012 reached USD23,955,161,083. Employees’ performance assessment is conducted regularly and is used as a basis for the granting of rewards and career advancement. All employees are free to join workers’ union and equal opportunities are granted to both genders. They are treated without any discrimination on the basis of race, ethnic group, religion, and gender. During 2012, there were no strikes or boycott by employees.
Challenges and Opportunities PGN supports the Government’s efforts in the context of stepping up the use of natural gas as a substitute for oil fuel. Within the upcoming period of 5 years, the need for natural gas will continue to increase. This is a challenge and at the same time an opportunity for PGN to maintain the availability of adequate supply. PGN is currently in the process of constructing LNG Receiving Terminal (LNG RT) and Floating Storage Regasification Units (FSRU), as part of the aforementioned expansion plan.
Through this expansion, within the next 5 years, PGN will be playing an increasingly important role in the efforts for the mitigation of greenhouse gases, in support of the greenhouse gases mitigation program initiated by the Government. We realize that the successful achievement of sustainability performance is closely related to the directives from the Board of Commissioners and Shareholders, as well as the involvement of other stakeholders. Similarly, the spirit and hard work of all parties at PGN have greatly contributed to the improved achievement of PGN’s sustainability performance. Finally, on behalf of the Company’s Board of Directors, I would like to express our gratitude to all stakeholders for their support and participation in the achievement of the sustainability performance in 2012.
Jakarta, March 2013
Hendi Prio SantosoPresident Director
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Sustainability Report Sustainability Report15
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
About This Report4
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
About This Report
About This Report About This Report18
2012 Welcome to PGN’s 2012 Sustainability Report, Which is the fourth annual report of
this kind.Through this report, we present information related to the Company’s economic, environmental and social achievements throughout 2012 for the benefit of all our stakeholders.
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Amongst otherpurposes, this report is a fulfillment of our obligation to report on the implementation of
PGN’s Social and Environmental Responsibility (SER), as defined by section 66, paragraph 2C, Law Number
No. 40, 2007 concerning Limited Liability Companies. This report has been prepared in accordance with
international reporting standards, the Sustainability Reporting Guidelines version 3.1, published by the Global
Reporting Initiative (GRI), which is based in Amsterdam, the Netherlands. In order to enable readers of this
report to determine which GRI indicators have been applied in this report, we have included a reference to the
appropriate GRI indicator in brackets in red text in each relevant section. A complete list of these GRI indicators
is presented on page 164 of this report. (3.12)
Reporting Period (3.1, 3.2, 3.3)
This report is the sustainability report for the period from January 1, 2012 to December 31, 2012. The last
report prior to this one, which covered 2011, was published in May 2012.
Selection of the Contents of This Report (3.5)
The selection of the topics and the determination of the contents of this report are based on consideration of
material issues, particularly issues which may have a significant impact on stakeholders in the decision-making
process. This is intended to meet the expectations of investors regarding the contents of the report. A number
of GRI Indicators G3.1 are not addressed in this report because they are considered not to be of material
significance and not relevant to the conduct of PGN’s operations. In addition, some GRI Indicators G3.1 are
not addressed because the relevant data was not available. Management will endeavour to ensure that future
reports address these areas.
On the basis of input from investors and other stakeholders, in the selection of material for this Report, priority
has been given to issues related to sustainability, which relates, amongst other matters, to PGN’s endeavours
to deal with climate change, to foster community economic empowerment, to facilitate improvements to the
quality of life of the communities amongst which it operates, to facilitate improvements to community health
and educational facilities, and to provide material assistance to the victims of natural disasters. In addition,
we also include material related to the Company’s day-to-day internal operations, with these topics being
addressed as a manifestation of PGN’s commitment to the fulfillment of its commitment to transparency in
issues related to environmental, health, workplace safety, human resources management and sustainable
management.
The Implementation of the principle of Stakeholders inclusiveness has conducted through Stakeholder
Forum Interests. From these discussions obtained input and view about the importance of issues in report to
Stakeholders and to what extent these issues could affect PGN business.The Results of Discussion Forum can
be described in graph besides.
About This Report Reporting Period19
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
About This Report Boundary Report and Data Measurement Methodology
20
Boundary Report and Data Measurement Methodology (3.6, 3.7, 3.8, 3.9)
The data and information contained presented in this report relate solely to the performance in terms of
sustainability of PGN as a holding company, and does not cover the performance of its subsidiary companies in
these terms.
Financial data and information contained in this report, such as that related to received and distributed
economic value (see diagram and table EC1), includes material related to subsidiary companies prepared on the
basis of the equity method. Quantitative data presented in this report has been prepared on the principle of
comparability, covering a period of at least two consecutive years, enabling readers of the report to conduct an
analysis of year-to-year trends. Non-financial data and data related to sustainability have been measured on the
basis of international standards. Thus, terms such as gigajoule are used to measure energy usage, and so on.
Changes in the Report from the Previous Year (3.10, 3.11)
There were no changes in the standards used for the preparation of the report this year and no reclassifications
of sustainability date. As in the previous year, we utilize the GRI G3 .1 standard. In the period of this report, no
fundamental changes have been made to PGN’s business structure. Similarly, no fundamental changes have
occurred since the period of the last report in matters related to boundaries, scope or technical measurements.
Impo
rtan
t to
Sta
keho
lder
s
1
5
4
3
2
1
02 3 4 5 6 7 8 9 10
8
7
6
X
Y
Gas supply assured
Gas distribution safetyKemudahan Pembuatan Kontrak
Workers rights
The diversity and respectful of Human
Training and development
Wellness and safety work
Empowermentcommunity economic
Donation for life’s community
Environment impact analysis
Electricity consumption
Carbon Footprint Management and Carbon Emission Mitigation
Important for the Company
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Head Office (2.4)PT Perusahaan Gas Negara (Persero) Tbk
Jl. K.H. Zainul Arifin No. 20 Jakarta 11140, Indonesia.
T +633 4838 F +633-3080
www.pgn.co.id
Contact CenterT 0800 1500 645
T +6221-633 3000E [email protected]. K.H. Zainul Arifin No. 20 Jakarta 11140, Indonesia.
www.pgn.co.id
Company SecretaryPT Perusahaan Gas Negara (Persero) Tbk
Jl. K.H. Zainul Arifin No. 20 Jakarta 11140, Indonesia.
T +622-633 3080, +6221-633 4838, +6221-633 4861F +6221-633 3080
E [email protected] www.pgn.co.id
About This Report GRI Application Level and Index21
GRI Application Level and Index (3.12)In terms of the GRI Application Level System, we can state that this report has fulfilled the criteria for a “Level
A+” report as defined by the application level systems promulgated by GRI. According to the GRI Application
Level System, sustainability reports can be classified according to 3 (three) levels, these being Levels C, B, and
A.This statement has been checked and confirmed by the National Centre of the Sustainability Reporting
(NCSR), as can be seen in the Statement GRI Application Level Checked section on page 163 of this report.
Assurance (3.13)In 2012, we appointed an external independent assurer to assure PGN’s 2012 Sustainability Report. We
present the report from the external independent assurer on page 161-162.
Contact Details (3.4)To submit inputs or questions regarding this report, please contact:
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
PGN’s Response to Climate Change5
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
PGN’s Response to Climate Change
PGN’s Response to Climate Change PGN’s Response to Climate Change24
There are six key components of climate change which caused
extreme weather conditions, such as atmosphere (air),
lithosphere (land), hydrosphere (water), cryosphere (ice
coverage), biosphere (animal life) and humanosphere
(human)
Photo by: Iwhan Agung Wibowo, SBU Transmission Sumatera-Jawa
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
PGN’s Response to Climate Change The Impact of Climate Change in PGN
Extreme weather conditions resulting from climate
change on a global scale today are increasingly
frequent occurred. In Indonesia, the main
characteristics of this extreme weather are indicated
from the longer dry seasons and intense rainy seasons
accompanied by strong winds. These conditions have
caused major floods in a number of regions across
Indonesia, including in Jakarta. Climatologists state
that there are six key components of climate change
which caused extreme weather conditions, such as
atmosphere (air), lithosphere (land), hydrosphere
(water), cryosphere (ice coverage), biosphere (animal
life) and humanosphere (humanity). Damage to one
or more of these six components will cause extreme
weather conditions.
These conditions have created concern around the
world, with a global movement to involve everyone
working together to ensure the sustainability of
the Earth and its inhabitants for the benefit of
future generations. Sustainability is achieved if
environmental conditions are maintained in the
appropriate manner. To achieve it, the involvement of
all entities is required, including PGN.
The Impact of Climate Change in PGN (EC2)
Climate change has had a significant influence
on PGN’s business, in some cases disrupting the
Company’s operations. For example, when Jakarta
was recently afflicted by floods, administrative
activities and routine maintenance of offtake stations
in areas around Jakarta ceased temporarily.
In the long term, extreme weather conditions
resulting from climate change have the potential
to directly affect our main facilities in a number of
ways, such as landslides in areas which caused gas
production facilities close or disruptions of operations
as a result of high waves which threated offshore oil
and gas production facilities.
The potential disruptions are even greater at present,
as we are currently constructing gas storage and
distribution facilities, the offshore Floating Storage
and Redistribution Unit (FSRU), which is located
between Lampung and Jakarta. Thus, climate change
has a number of significant potential financial
implications for PGN.
This condition, makes PGN shall have a strong
commitment to conduct operations in an
environmentally friendly. PGN must strive to minimize
the environmental impacts of our operations
through the implementation of environmentally
friendly policies while at the same time encouraging
business partners and the community to engage in
environmental protection programs.
Business Opportunities Resulting from Climate Change
On the other hand, there is a growing awareness
amongst the community regarding the importance
of reducing carbon emissions through the utilization
of more environmentally friendly fuels. This creates
a significant business opportunity for PGN. The
use of natural gas as fuel results in lower levels
of carbon emissions than any other fossil fuel.
Conversion programs through which natural gas
is used to replace other fossil fuels will naturally
result in increased demand for gas. This creates an
opportunity for PGN to increase its capacities, range
and extent of its distribution and
transmission facilities.
This increased demand also creates opportunities for
us to increase the supply of gas through participation
in both upstream and downstream industries related
to the natural gas industry.
25
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
PGN’s Response to Climate Change Carbon Footprint26
Carbon and Other Gas Emissions of PGN’s Business Activities
Our primary operational activities involve the
management of distribution and transmission
pipeline network which connects production sources
to our main clients, including industrial, commercial,
and household clients. We are aware that PGN’s
activities have a potential impact on the environment.
The Company’s operations make significant use of
electricity at the Company’s office and other facilities,
the use of fossil fuels for transportation, work-related
travel, and for a number of otherpurposes. All of
these activities have a potential environmental impact
through the omission of carbon dioxide into the
atmosphere. In addition, the use of chemicals that
may damage the ozone layer, such as freon used in
air-conditioning, also has the potential to contribute
to global warming.
Carbon Footprint
As stated in this report, PGN is currently in the
process of entrenching a more environmentally aware
Corporate culture throughout its operations. This
transformation involves a thorough calculation of the
Company’s carbon footprint as a basic preliminary
measure to mitigate against the environmental
impact resulting from PGN’s operations. The
calculation of PGN’s carbon footprint was conducted
in 2012 through the implementation of a carbon
accounting system, which is also referred as the
PGN Carbon Calculator system. In the initial stages,
the PGN Carbon Calculator system only covered
carbon emissions resulting from the use of electricity
supplied by PLN or derived from the Company’s own
generators, as well as carbon emissions resulting from
the use of operational vehicles.
In principle, the PGN Carbon Calculator system
is easy to implement. Operators of the Carbon
Calculator can enter data related to the consumption
of electricity in terms of kilowatt-hours, the
consumption of fuel used by operational vehicles,
and the volume of gas utilized in various locations
and in various timeframes. Through mathematical
calculations based on internationally accepted
formulas, the total volume of the Company’s carbon
emissions can be derived and presented in a table or
as a graph. Data required for these calculations can
be presented and managed through applications such
as Excel and can also be presented through
Web-based applications.
In addition to the use of the PGN Carbon Calculator,
we are also preparing a number of environmental
management programs and initiatives which will
implement as an ongoing manifestation of our
commitment to the conservation of the environment.
At each stage of the implementation of these
programs, we will conduct a measurement of carbon
emissions in order to determine means for improving
and adjusting systems so that PGN’s carbon footprint
remains tightly controlled.
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
PGN’s Response to Climate Change Energy Consumption
PGN’s operational activities require both the direct
and indirect use of energy. Energy is used directly
to operate the turbine compressors propel gas
through the distribution pipeline network so that
it reaches end users, including electricity generation
facilities, industrial users, commercial users,
and household consumers.
The total volume of energy consumption to operate
the Company’s turbine compressors in 2012 was
673,454 gigajoules, compared to 656,173 gigajoules
in 2011. The primary source of energy consumption
for this puIDRose was natural gas, which is an
environmentally friendly fuel. The Company’s energy
consumption has tended to increase with the
expansion of its transmission and distribution pipeline
network, as can be seen by the following table. (EN3)
Energy Consumption
27
Energy Consumption (G)
Gas Quantity (MMBTU)
Convertion2008
1.000.000
800.000
600.000
400.000
200.000
02009 2010 2011 2012
1.055
401.831
860.884
771.498
813.930
908.232
423.931
1.055 1.0551.055 1.055
621.965
656.173
638.345
673.454
(gigajoule)
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
PGN’s Response to Climate Change Controlling Carbon Dioxide Gas Emissions28
Indirectly, the Company consumes energy to operate
office facilities in the Company’s Head Office,
the offices of its SBU, and for lighting in areas
surrounding the Company’s operations. Electrical
energy is provided by PLN or is produced through
the Company’s own electrical generators, which are
fuelled by natural gas, as shown in the table above.
The total volume of electrical energy supplied by PLN
in 2012 was 5,101.94 MWh or 18,367 GJ, compared
to the figures for 2011, when the total stood at
5,476.13 MWh or 19,714 GJ. (EN4)
We have implemented a number of efficiency
measures to reduce the indirect use of energy,
including the following: (EN7)
1. The use of energy-efficient lighting;
2. The turning off lights in rooms that are not
being utilized;
3. The setting of air-conditioners to temperatures
enabling a reduction in energy use;
4. The organizing of office space to achieve a higher
level of proficiency.
We convinced all these efforts had given positive
impact in the form of reduced energy consumption
as shown by the reduced energy cost payment
obligations. However, in this report we have not
been able to deliver the amount of energy reduction
quantitatively, due to limitations of the system.
(EN5, EN6)
Controlling Carbon Dioxide Gas Emissions
The emission of carbon dioxide gas from PGN’s
operations mainly results from the use of generators
deployed at compressor stations and from the use of
PGN’s operational vehicles, which consume
fossil fuels. The total consumption of fossil fuels for
suchpurposes throughout 2011 was 497,225 litres,
compared to the figure of 320,733 litres in 2012.
This figure is derived from the recalculation of energy
audits of fuel used for generators and operational
vehicles rented from Corporate partners or vendors.
On the basis of calculations utilizing the Carbon
Calculator system that we have developed, the total
consumption of fossil fuels in 2011 is equivalent to
carbon dioxide emissions into the atmosphere of
1,194.30 tons, compared to the figure for 2012,
when this consumption was equivalent to carbon
dioxide emissions of 770.38 tons. (EN16)
To reduce these emissions of carbon dioxide, PGN
is in the process of preparing a carbon footprint
program based on the calculation of carbon
emissions from PGN’s operational activities. The
implementation of a program to reduce carbon
emissions is a manifestation of the Company’s
commitment for transforming systems of
environmental management, as explained previously.
Besides calculating the total volume of emissions of
carbon dioxide, we are simultaneously implementing
a number of measures to reduce carbon dioxide
emissions into the atmosphere. In 2012, these
measures included the following: (EN18)
• The testing of operational vehicles to ensure that
their emission levels do not exceed limits
established by the government;
• Tree planting and revegetation programs to
increase the rate of absoIDRtion of carbon
dioxide in the field;
• Limitations on the use of electronic equipment,
including computers and similar equipment, by
limiting office hours.
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
PGN’s Response to Climate Change The Replacement of Chiller Fuel for Cooling Office Space
29
In addition, the consumption of fossil fuels in
generators at compressor stations results in the
emission of a number of other pollutants, including
nitrogen oxide and sulphur oxide, with the level of
emissions being highly dependent on the condition
of the machinery used. Thus, PGN is committed to
periodic maintenance of these generators and other
machinery. We also conduct periodic measurements
of ambient air quality in a number of locations in
order to ensure that the air quality remains within
defined limits. An example of such measurements
can be seen in the “Environmental Monitoring”
diagram. (EN20)
PGN does not utilize vehicles to transport and
distribute natural gas except under specific
conditions, in which case the use of such vehicles is
tightly monitored. The primary use of vehicles is to
support operational activities both at headquarters,
in other regions where the Company operates, and
in supporting operational units. The use of such
operational vehicles may have an environmental
impact, particularly through the emission of exhaust
gas, which consists in part of carbon dioxide. A
diagram presenting further information related to
carbon dioxide emissions may be seen in another
section of this report. (EN29)
The Replacement of Chiller Fuel for Cooling Office Space (EN18)
One of chemical gas that has a damaging impact
on the ozone layer and which contributes to global
warming is freon. This substance is used as a chiller
or as a heat exchange media in cooling equipment,
such as air conditioning, refrigerators, cooling towers
and other similar devices. At various periods, such as
when this machinery is serviced, the chiller substance
must be released into the atmosphere, thereby
contributing to the pollution of the
Earth’s atmosphere.
We have initiated the use of natural gas from our
internal network to replace chiller substances that are
not environmentally friendly. This program is achieved
good results. Natural gas which is used as chiller can
be recycled for use as fuel.
PGN is currently planning to extend the use of
natural gas of the chiller on the basis of the following
considerations:
1. To achieve compliance with the government’s blue
sky program;
2. To demonstrate that natural gas can be utilized
for coolingpurposes as a chiller;
3. To expand on the demonstrated success of the use
of natural gas as a chiller in PGN SBU II Surabaya’s
building facilities.
With the use of natural gas as a chiller since 2011
throughout Gedung Graha PGAS, we no longer
utilize materials that result in the emissions of
ozone-depleting gases from this type of freon.
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6 Improving The Climate Together with PGN
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PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Improving The Climate Together with PGN Improving The Climate Together with PGN
Improving The Climate Together with PGN
32
Now PGN is in the process of conducting an environmental
transformation, which is puIDRose to ensure that PGN
acts as an environmentally friendly company promoting
green and clean energy for life.
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Improving The Climate Together with PGN Environmental Transformation33
Environmental Transformation
In order to ensure that the environmental transformation which is being implemented by PGN becomes a part
of a new working culture, we need to make changes in the implementation of environmental management
and energy. The scope of the environmental transformation covers the following: energy audits, the
formulation of an environmental transformation roadmap and carbon footprint reduction. Activities related to
the last of these points were described in the previous section of this report.
Energy Audits
Energy audits covering the Company’s Head Office, SBU Distribution 2 and SBU TSJ were conducted to achieve
the following goals:
• Reductions in expenditure on energy;
• The implementation of a energy management system which is eventually intended to facilitate the
achievement of a green energy system;
• The identification of facilities which consume a disproportionate volume of energy;
• Increased awareness and attention to energy expenditures;
• The identification of low efficiency facilities;
• Increased awareness and concern of employees about conservation of energy and a related change in
workplace practices;
• The implementation of an Environmental Management System; and a reduction in the carbon footprint.
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
PGN’s Roadmap for Environmental Transformation 2013 to 2017
PGN’s Roadmap for Environmental Transformation 2013 to 2017 represents a further development and
clarification of the goals, targets and programs previously implemented by PGN. In the initial stages of the
environmental management program in 2012, we have prepared systems, facilities and infrastructure, human
resources and other resources to ensure that PGN achieved full compliance with all regulations related to
environmental management. In the following stages, we will formulate follow-up programs to ensure that
PGN does not merely achieved full compliance, but implements standards that comply with international best
practice, beyond the standards mandated within Indonesia (beyond compliance).
The Implementation of AMDAL (Environmental Impact Analysis)
PGN’s commitment to the implementation of environmental management can be seen from its
implementation of AMDAL, which is confirmed by an RKL-IDRL and UKL-UPL implementation report. In
addition, PGN’s compliance with government regulations can be determined from a number of documents
formulated throughout 2012, including the following:
1. AMDAL LNG FSRU Lampung
2. UKL-UPL Gas Compressor Station Terbanggi Besar Lampung
3. UKL-UPL Distribution Pipes Tandes Gresik, East Java
4. UKL-UPL Distribution Pipes Jalur Sampurna, East Java
5. UKL-UPL Distribution Pipes Muara Karang, Jakarta - Muara Bekasi, West Java.
Improving The Climate Together with PGN PGN’s Roadmap for Environmental Transformation 2013 to 2017
34
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Changes in Environment Management Policies (EN26)
In 2012, we renewed our vision, policies and commitment in the area of Workplace Health and Safety and
Environmental Management (K3PL). PGN also strives to implement the principles of sustainability, not only
in the safety, health and environmental management, but also in the optimization of the use of energy as
an integral element of our vision. Policies regarding the use of energy and environmental management have
been fully integrated into our K3PL vision. The integrated policy has been named the Policy for a Management
System for Workplace Health and Safety and the Management of the Environment and Energy (SMK3PL-E).
This policy represents a further elaboration of our previous K3PL policy.
Here follows PGN’s Environmental Management Policy statement:
As part of our endeavors to improve the quality of the environment, we have implemented a number of
policies and work programs, including the following: (SO9, SO10)
• The formulation of an AMDAL (Environmental Impact Analysis) for each new project, with the involvement
of independent external analysts;
• The implementation of an Environmental Management Plan and an Environmental Monitoring Plan, with
routine reports delivered to the appropriate institutions each semester;
• Encouraging employees to reduce their use of electricity;
• Replacing machinery with new, more energy efficient technology;
• Encouraging employees to conduct paperless work practices.
Sustainable Environmental Management and Monitoring (EN16, EN17, EN19, EN20)
We are continuing to implement an Environmental Management and Monitoring program as a manifestation
of our commitment to preserve the environment. All aspects of this program are implemented within all
developmental projects which require significant funding, with each of these projects being required to
prepare an AMDAL analysis before development of the project commences. After the construction of
transmission and distribution pipeline network or other large scale projects as part of the Company’s business
activities, we conduct environmental monitoring programs to determine the impact of the operations of the
transmission and distribution pipeline networks or other projects on the surrounding environment.
In general, the environmental impact during the construction of transmission and distribution pipeline
networks is not significant. The quality standard parameters used based on Kepmen KLH, Bapedalda
regulations, and other related government regulations. Reporting submitted each semester to the relevant
agencies, including KLH, Bapedalda, Migas, etc.
Improving The Climate Together with PGN Changes in Environment Management Policies35
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Improving The Climate Together with PGN Biodiversity36
Biodiversity (EN14, EN11)
For the development of its natural gas facilities and its transmission pipeline network, the Company
implements policies to avoid protected forests and other areas with a high biodiversity value. However,
despite these policies, under certain conditions if it is not possible for PGN to entirely avoid crossing such
protected forests or other areas with a high biodiversity value, PGN will prefer to choose the shortest route to
minimize any negative impacts on the biodiversity. In addition, in consideration for ease of supply utilities and
maintenance, the facility was built adjacent to the road infrastructure available.
Throughout the period of this report, PGN did not engage in the construction of transmission facilities passing
through or located in protected forests zones. PGN also strove to avoid all areas with a high biodiversity value.
Rehabilitation and Revegetation
We have conducted a process of rehabilitation of the area where in the past digging was conducted in the
construction of the transmission and distribution pipeline network. Earth displaced as part of this process
MEASUREMENT OF AIR QUALITY WORK ENVIRONMENT IN PAGAR DEWA
No Parameter Mount Quality Standards *) Result Method
NAB KTD
1 Dust mg/m3 10 - 0,068 SNI 19-7119.3-2005
2 Hydrocarbons (HC) **) mg/m3 - - 0,144 18-6/IK/ULK-HC
3 Carbon Monoxide (CO) **) mg/m3 29 - 4,136 18-7/IK/ULK-CO
4 Nitrogen Dioxide (NO2) **) BDS 3 5 0,0184 18-2/IK/ULK-NO
2
5 Sulfur Dioxide (SO2) **) mg/m3 - 0,25 0,030 18-1/IK/ULK-SO
2
*) The Regulation of Minister of Manpower and Transmigration No. PER.13/MEN/X/2011 Years of 2011 attachment IL NAB chemical factor in air quality work**) Parameter accreditation by KAN No. LP-195-IDN
PGN operational activities do not result in the production of liquid wastes, solid wastes, or the direct
emmission of fumes which is damaging to the environment. In accordance with the stipulations of the AMDAL
document, we monitor the following:
• Water quality
• Air quality and level of emissions
• Noise levels
• Soil quality
The results of this monitoring process show that throughout the Company’s operations, all aspects achieve full
compliance with established standards and regulations. The results of monitoring of the emissions in the areas
surrounding the Pagar Dewa compressor facilities are as follows:
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Improving The Climate Together with PGN Use of Materials37
has been used to cover the piped network under the ground. Other displaced earth, which is not usually of
significant quantity, has been used to level the distribution pipeline network. It should be noted that we do
not engage in extraction processes.
We have also established a number of areas for reforestation if the area used for the transmission pipeline
network cannot be reforested. The rehabilitation of the environment is included as an integral part of the cost
of rehabilitating and revegetation areas surrounding the transmission. (EN30)
In the period covered by this report, we have planted trees in areas on or around land dug up to develop the
transmission and distribution pipeline network. The total number of trees planted amounts to 570,858, with
these trees being planted in a number of areas, including Serang, Bogor, Pasuruan, Bekasi, Jakarta, Lampung
Pagardewa, Palembang and Banyu Asin. The majority of the trees planted were Jabon, Sengon, and Mangrove
species, in addition to fruit trees.
We conduct periodical inspections and maintenance activities of the revegetated areas surrounding the
distribution and transmission pipeline network. (EN11, EN13)
Use of Materials
We also participated in environmental conservation and preservation of the environment through the efficient
use of natural resources and energy, and other program in order to care for environmental sustainability.
We also utilize pipes made from steel or PE plastic of optimal thickness. These pipes are covered with PE and
other protective agents to prevent rust and to ensure that they remain usable when buried underground
for long periods (up to 30 years). The goal of this is to minimize the impact on the environment in the
construction of our transmission and distribution pipeline network.
To build the pipe transmission and distribution pipeline network, we have also had to install an increasing
amount of new pipelines of the past few years. By the end of 2012, the aggregated total length of the
transmission and distribution pipeline network under our management amounts to 5,912 kilometers. This
represents an increase of 0,49% over the previous year. The cumulative length of the piped network over the
past two years can be seen in the following table. (EN1)
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Improving The Climate Together with PGN Use of Materials38
THE ACCUMULATION TABLE OF LENGHT TRANSMISSION AND DISTRIBUTION PIPELINE (KM)
Variety of pipe 2012 2011
TRANSMISSION
Steel pipe 2047 2047
BE pipe - -
Others 2047 2047
DISTRIBUTION
Steel pipe 1935 1921
PE pipe 1930 1915
Others 3865 3836
TOTAL LENGHT
Steel pipe 3982 3968
PE piipe 1930 1915
GRAND TOTAL 5912 5883
Other materials used in our primary activities is filter which placed inside the pipes at the point of intake. The
function of these filters is to clean contaminants in the form of water vapors and other matter in order to
maintain the quality of the natural gas.
At periodic periods, these filters are replaced. Discarded filters are treated as solid waste in accordance with
the regulations and in order to prevent environmental pollution. (EN22, EN24)
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Improving The Climate Together with PGN Waste Management39
We also use a significant volume of paper to support
our operational and administrative activities. We
implement a policy mandating the recycling and
efficient use of paper. In a month, total approximately
85% of the paper used to support PGN’s activities
is recycled. PGN cooperates with third parties
to manage the recycling of a portion of this
paper waste. (EN2)
We also implement technology-based solutions to
reduce the total volume of paper waste, such as
email and other web-based applications. Since these
technology-based measures have been implemented,
the overall use of paper by PGN has been reduced
significantly, from approximately 19,228 rim in 2011
to 17,292 rim in 2012. (EN1)
We have also implemented tight monitoring
procedures to govern the storage and use of fossil
fuels, lubricants, and other potentially dangerous
liquids, including dangerous and poisonous liquid
wastes. These procedures are implemented in order
to prevent spillages that may have a detrimental
impact on the environment. During the period of this
report, there were no reported incidences of spillages
of fossil fuels, lubricants and other dangerous liquids
throughout the Company’s area of operations. (EN23)
Our operations do not result in the production of
significant amounts of poisonous and dangerous
liquid waste includes B3. However, to manage
and recycle such B3 wastes as are produced, the
Company deploys the services of a competent
third-party service licensed by the Ministry of the
Environment. We are directly responsible for the
temporary storage of such waste within our own
facilities. All such wastes are accompanied by a
manifest and stored in sealed and specially marked
containers. The process of the transportation of these
wastes to the places where they are managed, being
the responsibility of third parties whose activities are
constantly monitored by the Company.
We have also issued policies that allows waste
materials which can be recycled, will managed
by competent third parties. The management of
such materials involves either its sale, donation, or
disposal. For the recycling of specific material such as
pipes and paper waste, the process is managed by
competent third parties. (EN27)
Waste Management
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Improving The Climate Together with PGN The Conservation of Water Resources40
The primary use of water within our operations is for
the cooling of compressor pump installations and
sanitarypurposes within our offices. In general, water
used for suchpurposes is supplied by regional water
companies (PDAM). In addition, we maintain our
own pumped water facilities as a backup, in cases
where there are disruptions from the supply of water
from these companies.
The use of groundwater at our Head Office is always
within limits defined by current regulations. The total
volume of water supplied by PDAM during 2012
amounted 47,398 M3 . Whereas in 2011 as big as
48,088 M3 . (EN8)
PGN maintains significant areas of open space
surrounding its Head Office for the catchment
and absoIDRtion of water. In areas set aside for
thesepurposes PGN has created boreholes to
facilitate the absoIDRtion of rain and wastewater
into the ground. As a result, groundwater levels have
remained stable and there have been no complaints
from members of community in surrounding areas or
from other institutions regarding the management of
such water. (EN9)
In the Company’s offices in remote areas, the
need for water is often met through the use of
groundwater. In general, such water is only used for
the cooling of compressors and sanitarypurposes.
When such water is used for coolingpurposes,
we implement a closed loop system, so that water
is not wasted.
All water within the system is reused for
coolingpurposes. We have not yet conducted the
specific audit of the volume of water released into
bodies of water either at our Head Office or at
supporting offices. (EN21)
We have not yet applied optimal facilities for the
recycling of water resources, with water recycling
facilities at our Head Office utilizing a carbon filter
based filtration system. Water recycled from the
system is utilized for a number of limitedpurposes,
such as washing operational vehicles and for
watering gardens. Water used for the cooling of
compressors is returned to the closest water disposal
units, without further recycling. (EN10, EN21)
The Conservation of Water Resources
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Our Environmental Management Program is an
integral part of our Environmental Management and
Partnership Program in 2012, PGN implemented
a number of activities intended to foster the
preservation of the environment, at a total
expenditure of IDR 9.49 billion, amongst others,
these activities included the following:
• The planting of mangrove trees, fruit trees, and
other plants in a number of regions throughout
Indonesia, including Belawan-Medan, DKI
Jakarta, Cirebon, and Surabaya. The total number
of mangrove trees planted under this program
was 41,374 and the total number of fruit trees
planted was 69,484. We conducted this activity
in cooperation with tertiary education institutes
in the respective areas, including IPB, USU and
ITS also the Mangrove House Consortium;
• The revegetation of areas surrounding our
operations and the planting of palm trees and
grass on land formerly used as a rubbish dump
in the offtake area surrounding Desa Sukadanau
Rawamaju-Bekasi;
• The implementation of an integrated rubbish
disposal system, through which waste is
transformed into compost in accordance
with regulations stipulated by the Ministry of
the Environment. This program begun in
2011 and has been implemented in 5 cities in
cooperation with regional and district
governments, in Batam, Palembang, Lampung,
Bogor, and Surabaya;
• These activities form a part of PGN’s contribution
to preserve the environment. These activities
can also be regarded as measures intended
to reduce global warming and climate change.
We hope that these programs will encourage a
higher level of awareness amongst members
of the community, including our own employees,
regarding the importance of maintaining clean
and healthy environment conditions.
Compliance with Environmental
Regulations
PGN constantly strives to demonstrate a high level of
commitment to the preservation of the environment.
This is achieved through a number of programs
and activities that are intended to meet against
environmental damage, as explained in the sections
above. In the period covered by this report, PGN
was not subject to fines or other legal sanctions as a
result of non-compliance with regulations governing
environmental management. (EN28)
Water Consumption
The use of water in office and other facilities
throughout PGN’s operations may have a detrimental
effect on the environment if not appropriately
managed. Water is a vital substance for human
and animal life. Thus, water resources must be used
responsibly in order to ensure that future generations
will have access to the water resources that
they require.
We are aware of the potential impact of PGN’s
business on the environment and committed to
formulating and implementing a number of programs
as an effort to mitigate against this impact and to
ensure the sustainability of the Earth we live on,
as described in these previous sections.
Preserving The Environment Through Our Environment Management Program (EN13, EN30)
Improving The Climate Together with PGN Preserving The Environment Through Our Environment management Program
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Prioritizing the Interests of Stakeholders
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PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Prioritizing the Interests of Stakeholders Prioritizing the Interests of Stakeholders
Prioritizing the Interests of Stakeholders
44
PGN regards the maintenance of harmonious relationships
with all stakeholders as a vital element in the achievement of
the sustainability of its business.
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
PGN regards the maintenance of harmonious relationships with all stakeholders as a vital element in
the achievement of the sustainability of its business. Our awareness of the importance of this element
compels PGN to consistently strive to improve the quality of communications as a means to determine the
aspirations of all of our stakeholders and to communicate matters related to programs and endeavors that
we have implemented or that we plan to implement as a means of ensuring the fulfillment of
these aspirations.
The mechanisms used to improve the intensity and quality of communications include all community
relations activities, as well as annual general shareholders meetings, bipartite and tripartite forums and our
Environmental Management and Partnership Program, through these meetings and forums, PGN strives to
describe its programs in a transparent, fair and clear manner in order to facilitate planning and to ensure
ongoing community development, including improvements to the material welfare of members of the
community and the preservation of the environment in accordance with their aspirations. At the same
time, stakeholders are enabled to provide input, comments, and evaluations to improve the quality of our
Corporate social responsibility programs.
PGN is committed to the belief that intensive communications with stakeholders and their appropriate
involvement are vital to ensuring the sustainability of the Company’s business. This commitment pushes us
to improve the quality of communications and relations with stakeholders and underlines our endeavors
to determine their aspirations, and to formulate working programs to ensure their achievement, and to
communicate fully regarding the development of these programs. The diagram below describes these
endeavors graphically.
Prioritizing the Interests of Stakeholders Prioritizing the Interests of Stakeholders45
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
1. Shareholders
Shareholders are Stakeholders who have a direct
interest in the operations of the Company through
their investment of capital in the Company. As a
result, shareholders will pay a high level of attention
to the operational and financial performance of the
Company, both of which have a direct influence on
share prices. Shareholders have a right to expect to
enjoy the results of their investment at any point
within a given period through increased share prices
and the payment of dividends.
In order to facilitate effective communications and
harmonious relationships with Shareholders, PGN
conducts routine General Shareholders Meetings
(GSM). These meetings are conducted at least once a
year as a medium to provide a comprehensive report
of the Company’s financial performance, including
a social accountability report. Through an analysis
of the main points of the agenda at this meeting,
Shareholders may direct the formulation and
development of the Company’s strategic direction,
including matters related to investment and the size
of dividends to be paid.
In addition to the GSM, PGN also facilitates
transparent and intensive communication with
shareholders through its website, through biannual
and quarterly performance reports, reports issued
through the mass media, the routine publication of
the Annual Report and Sustainability Report, and
through other media.
2. Employees
PGN’s human resources are its most significant
asset in the conduct of its business. All of PGN’s
achievements are the result of the dedication and
hard work of all employees at PGN. The aspirations
of employees include the following: a conducive
workplace, a clearly defined career path and
system of rewards, appropriate remuneration, and
guaranteed welfare.
In order to facilitate the fulfillment of these
aspirations within the boundaries established by the
Company’s financial capabilities, we conduct routine
meetings between the Company and SPPGN (the
PGN Trade Union) and representatives of the SPSI
(All Indonesia Employees Union), as the recognized
representatives of our employees. Through these
bipartite forums, all issues related to workplace
relations and issues may be addressed. The frequency
of such meetings is determined by the urgency of
issues that emerge and are conducted in order to
ensure the ongoing efficiency and effectiveness of
the forum.
The Management of Stakeholder Interests
Prioritizing the Interests of Stakeholders The Management of Stakeholder Interests
In broad outline, PGN has seven main stakeholder groups that influence the Company’s operations. PGN
strives to adopt specific approaches suitable for each of these stakeholder groups, in accordance with each of
their respective aspirations and hopes. This approach is intended to ensure effective communication and to
manage the involvement of each of the respective stakeholder groups.
PGN’s measures to communicate with each of the seven Stakeholder groups can be described as follows:
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PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
3. Business Partners
In order to ensure harmonious relationships with
business partners, PGN has established ethical
guidelines to guide cooperative endeavors with
business partners for the mutual benefit of all parties.
Issues affecting the relationship between PGN and its
business partners are addressed through discussions
and consultations based on these ethical guidelines,
with the results of the discussions and consultations
being formulated through a contract that must be
respected and implemented by all parties in order to
ensure good operational relations.
PGN strives to ensure the fulfillment of the aspirations
of its business partners through the implementation
of fair and transparent procurement processes, the
timely payment for services, and evaluations based on
factual and accurate data.
4. Government Agencies and Regulators
The government holds a significant stake in PGN. As
such, the government has a legitimate interest in the
Company’s financial performance and in the smooth
operations of the Company.
The Company’s operational performance in terms
of the distribution and transmission of gas in the
required volumes, pressure levels and quality to its
end users has a direct impact on the activities of
industrial, commercial and household users of gas,
thereby providing benefits to the government by
creating employment opportunities, tax revenues and
dividends, and macroeconomic benefits.
In the period of this report, PGN remains involved
in the distribution and transmission of gas. The
production of gas is managed by other privately and
state-owned enterprises on the basis of production
contracts that are monitored by the government.
In order to fulfill the aspirations of both the
government and PGN, particularly with regards to
the distribution of gas through the transmission and
distribution network, PGN conducts routine meetings
with representatives of the government through
bipartite and tripartite forums. These meetings are
intended to facilitate the development of plans
related to the expansion of PGN’s operations, the
allocation of gas, and gas sales prices.
PGN also engages in routine discussions to
understand the position of regulators with reference
to the management, exploration and exploitation
of natural gas resources in Indonesia in order to
facilitate the optimal operation of the Company.
5. The Community
In addition to facilitating economic growth amongst
the industrial and commercial sectors and amongst
the broader community, particularly amongst
communities in close proximity to areas of the
Company’s operations, PGN strives to achieve the
growth of its own operations in accordance with the
growth and development of these communities. In
order to achieve this, PGN has implemented its PKBL
program and a number of other social responsibility
and community development programs.
PGN implements its partnership program in
accordance with the specific potentials and
situation of each area in which it operates. The
implementation of partnership programs is based
on considerations related to the growth and
development of the communities in the areas
surrounding the Company’s operations.
The partnership program is subject to annual
planning and review. The scope and nature of
the program is adjusted in accordance with the
Company’s and the communities’ capabilities. In the
implementation of these programs, PGN works with
Prioritizing the Interests of Stakeholders Business Partners47
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Prioritizing the Interests of Stakeholders Consumers48
respected community leaders, representatives of local
government agencies, other state owned enterprises,
academic institutions, and private organizations
with the capacities to develop Corporate and social
responsibility and environmental management
programs that facilitate the achievement of the
community’s aspirations.
PGN also strives to maintain harmonious relationships
with Civil Society Organizations (CSO) who play a
positive role in facilitating relationships between the
Company, government and community institutions,
with the direct involvement of these CSO’s at all
stages of the planning and implementation of the
Company’s Corporate responsibility programs. In
addition, PGN also works with academic institutions
and expert consultants who provide input to optimize
the implementation of these programs.
6. Consumers
The trust of consumers is a vital pillar that supports
the sustainability of the Company’s operations over
the long term. In order to maintain and develop
the trust of consumers, PGN strives to fulfill the
aspirations of these consumers, with these aspirations
relating to the following: the reliability of supplies,
the quality and pressure levels of supply gas, and
reasonable and consistent pricing policies.
In addition, PGN conducts a number of activities,
including the following: routine maintenance and
expansion of the pipe distribution and transmission
network, the expansion of upstream and downstream
business activities, measures to maintain the quality
of supplied gas, intensive communications with
consumers through special meetings, and the
implementation of an integrated complaints
handling unit.
PGN also conducts routine evaluations and surveys
to determine the level of customer satisfaction with
the quality of the product and service provided by
the Company, with these evaluations and surveys
involving independent third parties, in order to gather
feedback as a basis for improvements to the level of
service provided.
7. Media
PGN conducts a media gathering program to
maintain and develop trust and good relations with
representatives of the media and to facilitate the
communication of matters related to the Company’s
performance to all stakeholders.
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Prioritizing the Interests of Stakeholders Stakeholders Engagement
Stakeholders Engagement (4.14 - 4.17)
49
Stakeholder group Method of involvement/communication
Frequency of Meetings Aspirations of stakeholder group
Shareholders and investors Company VisitConference CallSite VisitAnalyst MeetingNon-deal RoadshowInvestor SummitRUPSPublic Expose
Minimal 12 times/quarterMinimal 3 times/yearMinimal 1 times/yearMinimal 1 times/yearMinimal 4 times/year1 times/yearMinimal 1 times/yearMinimal 1 times/year
• Maintain and increase the value of investments through the improved performance of the Company.• Regular annual dividends.• The accountability and accuracy of financial reports.• The accountability and accuracy of operational reports.• Respect for the rights of shareholders as stipulated in various acts and regulations.
Employees Through SP-PGNManagement and Employee Forums
In accordance with need
• Equality.• Welfare.• Defined career path.• Non-discriminatory workplace practices • conducive work conditions.
Business partners (vendors, suppliers, agents, resellers, and installers)
Contracts for the supply ofservices and goodsEvaluations of the performance of supplies andbusiness partners.
In accordance with need, at least once per year
• Fair and transparent procurement processes • objective evaluation and selection processes • mutually beneficial growth
GovernmentAuthorities andRegulators
Bipartite meetings Meetings with Parliament Tripartite meetings
In accordance with need, at least once per year
• Optimal implementation of operations • Harmonious and constructive relationships with regulators.• Full compliance with laws and regulations
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Prioritizing the Interests of Stakeholders Stakeholders Engagement50
A more comprehensive description regarding the measures implemented by the Company to ensure the fulfillment of the aspirations of stakeholders is contained in other sections of this Sustainability Report.By ensuring harmonious and mutually respectful relations with all stakeholder groups, PGN will fulfill its vision of becoming a leading company in its field.
Stakeholder group Method of involvement/communication
Frequency of Meetings Aspirations of stakeholder group
Community Implementation of Corpo-rate social responsibility and environmental management programs.Philanthropic activities that benefit members of the community
In accordance with need to ensure optimal operations
• Harmonious relations in the provision of benefits to members of communities in areas surrounding the Company’s operations.• Minimization of the negative effects of the Company’s operations on the environment • growth and improvement in the economy and economic activities of the community
Consumers Meetings with consumer representative groups customer service complaints handling service (call center)customer satisfaction surveys
In accordance with need
• Reliable supply of gas• Reliable gas pressure and quality• Appropriate pricing • Service that meets and exceeds expectations
Media Press ReleaseMedia GatheringCorrespondence
In accordance with need
• Reliable and accountable news reports
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Mengutamakan Pemangku Kepentingan Membership in Industrial Associations and Other Organizations
PGN is an active participant in a number of associations and organizations. The goal of this participation is to
expand the Company’s business networks and to facilitate effective communication with stakeholder groups
and to facilitate the resolution of problems that may affect the Company’s operational activities.
Through its membership in such associations, PGN plays an active role in forums intended to foster economic
growth within Indonesia through the development of the natural gas industry. In addition, PGN benefits by
receiving input, advice, and constructive criticism as a basis for the improvement of the services it provides.
In 2012, PGN was a member of the following organizations:
1. Indonesia Gas Association (Pres)
2. Emitent Association of Indonesia (Member)
3. International Gas Union (Member)
4. Indonesian Stock Exchange (Member)
5. Kustodian Sentral Efek Indonesia (Member)
6. SPI Communication Forum (Organizer and Member)
7. IT BUMN Forum (Member)
8. BUMN Human Resources Forum (Member)
9. BUMN Public Relations Forum (Member)
10. BUMN Corporate Responsibility and Environmental Management Forum (Member)
PGN pays annual membership fees for its participation in all of these organizations, except the BUMN forums,
for which no membership fees are levied. PGN also played an active role as sponsor of the Gas Information
Exchange 2012 (GASEX 2012) conference, held at the Bali International Convention Centre, Nusa Dua, Bali.
PGN plays an active role in all BUMN forums, which are facilitated by the Ministry for State-Owned Enterprises,
with meetings held on a monthly or annual basis.
Membership in Industrial Associations and Other Organizations (4.13)
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8 Sustainability Governance
Membership in Industrial Associations and Other Organizations (4.13)
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PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Sustainability Governance Sustainability Governance
Sustainability Governance
54
For the year 2012assessments GCG is a “Very
Good” with a score of 90.72.
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
We believe that the implementation of Good
Corporate Governance (GCG) best practices is
fundamental in the achievement of PGN Vision
2020 as a world class energy company. With the
implementation of GCG best practices, Corruption,
Collusion and Nepotism (KKN) practices can be
prevented, and it can result in the enhancement of
the supervision function in company management,
thus keeping the company away from the risk
of losing the stakeholders’ confidence. The loss
of stakeholders’ confidence is bound to put the
company out of existence.
Therefore, we have been conducting periodic GCG
assessment, carried out by competent independent
consultants, followed by a process for the
improvement of all institutions and infrastructure
of the organization. For 2012, the result of the
assessment has been “Excellent” with a score of
90.72. The objective is to ensure that the company
is managed under a sound governance system by
implementing GCG best practices at all times, thus
enabling PGN to achieve first rate performance as
well as to maintain the stakeholders’ confidence,
increase the company’s value, and ensure long-term
business sustainability.
Sustainability Governance Sustainability Governance55
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
PGN, as a State-Owned Enterprise (SOE), views GCG
resilience not only as a realization of the Company’s
compliance with Decree of the Minister for State-
Owned Enterprises number Kep-117/M-MBU/2002
concerning the Implementation of GCG Practices in
State-Owned Enterprises, but rather, also as a means
for materializing PGN’s resilience in overcoming any
challenge and in taking advantage of every business
opportunity.
Sustainability Governance Sustainability Governance56
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Sustainability Governance Structure of Governance
The structure of PGN’s Governance involves the
interaction among the key Organs of the Company,
which consist of the General Meeting of Shareholders
(GMS), the Board of Commissioners, the Board
of Directors, as well as the Supporting Organs,
consisting of the Committees under the Board of
Commissioners. The structure has been designed
to ensure independence of each of the company’s
organs in performing their respective functions. (4.1)
General Meeting of Shareholders (4.7)
GMS is a forum for shareholders in which strategic
decisions are made, aimed at the Company’s growth
and development. The GMS consists of the Annual
GMS and the Extraordinary GMS. Through the GMS,
shareholders can exercise their right, express their
opinion and vote in making important and strategic
decisions independently and proportionally between
the interest of the shareholders and the interest of
the company. (4.4)
Through the GMS, shareholders are able to formally
exercise their right and express opinion, make
suggestions and recommendations to the Board
of Directors.
The Board of Commissioners as well as the Board
of Directors are bound by and must implement every
resolution of the GMS. The interests of minority
shareholders are represented by the Independent
Commissioners. In addition to the GMS, shareholders
can make suggestions and provide an opinion to
the Board of Directors through meetings with the
majority shareholder, in this case, the Ministry for
State-Owned Enterprises.
The shareholders can also give their opinions and
suggestions through Meet the Investors Forum
(Forum Temu Investor), or during visits by investors
to PGN.
The GMS is also a means for assessing the
performance of the other two organs of the
company, namely the Board of Commissioners and
the Board of Directors, with regard to achieving
the operational targets set at the beginning of the
year. The performance of the Board of Directors
is measured based on the fulfillment of the Key
Performance Indicator (KPI), and it is subsequently
evaluated and accounted for in the GMS.
The stipulation of KPI is reviewed annually and
adjusted to reflect the risks and opportunities
encountered by PGN. The performance measurement
required and accounted for shall include performance
in the economic, environmental and social
aspects. (4.10)
In addition to assessing the performance of the
Board of Commissioners and the Board of Directors,
the GMS/Extraordinary GMS forum can also adopt
various important decisions concerning the Corporate
action plan, including the following:
1. Appointment and dismissal of members of the
Board of Commissioners and the Board of
Directors;
2. Increasing the Company’s capital;
3. Merger, consolidation, acquisition and separation
of business units of the Company with other
companies or to become another business unit;
4. Collateralization of the company’s assets;
5. Ratification of material transactions, and even
changes in the core business activities of the
Company, etc.
Structure of Governance
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Sustainability Governance Governance Structure58
Internal Auditor (SPI)
Corporate SocialResponsibility
Corporate Governance
Board of Directors
Board of Commisioners
Corporate Secretary
Risk Management
General Meeting of Shareholders
Audit Committee
Risk Management and Business DevelopmentMonitoring CommitteeInvestor Relations
Corporate Bodies
SupportingBodies
PGN’S Corporate GOVERNANCE
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Sustainability Governance Structure of the Board of Commissioners and the Board of Directors
Pursuant to Law No. 40 year 2007 concerning
Limited Liability Companies, PGN has adopted
the two-tier board system, namely the Board of
Commissioners and the Board of Directors, with each
of the boards having their clear duties and authorities
according to their respective functions as mandated
in the Articles of Association and the applicable
laws and regulations (fiduciary responsibility). They
both have the responsibility to maintain PGN’s
sustainability. The Board of Commissioners may not
hold concurrent positions as the Board of Directors,
similarly, members of the Board of Directors may not
hold concurrent positions at one level below them,
except in emergency situations.
Board of Commissioners
The main duty of the Board of Commissioners is to
conduct supervision of the policies implemented by
the Board of Directors, concerning the Company and
its business activities, as well as to provide advice to
the Board of Directors for the interest of PGN.
There are currently five members of the Board of
Commissioners of PGN, chaired by a President
Commissioner, two of them are Independent
Commissioners. Therefore, the percentage of the
composition of Independent Commissioners in the
Board of Commissioners is 40%, which means that
the composition of the Board of Commissioners
meets the minimum requirements stipulated in the
Limited Liability Companies Law. (4.3)
The Board of Commissioners presents the
accountability report to the Shareholders at least
once a year, namely in the GMS. In performing its
duties, the Board of Commissioners is assisted by
several Committees which have been established,
and are responsible to the Board of Commissioners.
The committees include; the Audit Committee
and the Risk Management Business Development
Monitoring Committee. A detailed description of the
functions and duties of each committee can be found
in the 2012 PGN Annual Report.
Board of Directors
The Board of Directors of PGN consists of five
Directors and it is chaired by a President Director who
has the duty as the primus inteIDRares, coordinating
the activities of the Board of Directors. The Board
of Directors has full authority and responsibility for
the management of the Company and to represent
PGN both inside and outside the court of law in
accordance with the provisions of the Articles of
Association. The duties and responsibilities of the
Board of Directors are shared collegially, although
they may act and make decisions according to the
distribution of duties and authorities, including in the
environmental and social aspects.
In order to support the effectiveness of the company’s
management, the Board of Directors has established
functional committees, namely: Knowledge
Management Committee, Risk Committee, and
Occupational Health, Safety and Environmental
Management Committee. A detailed description of
the composition of the committees as well as their
functions and responsibilities can be found in the
2012 PGN Annual Report.
Structure of the Board of Commissioners and the Board of Directors (4.1,4.2)
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Sustainability Governance Mechanism for Selection and Appointment of Members of the Board of Commissioners and the Board of Directors
Mechanism for the Nomination and Appointment of Commissioners and Directors (4.7)
Members of the Board of Commissioners and the
Board of Directors are nominated, appointed and
dismissed through the GMS. As a SOE, the initiative
right to propose the appointment and dismissal
of members of the Board of Commissioners and
the Board of Directors in the GMS is held by the
majority shareholder, also referred to as the A series
shareholder, namely the Government of the Republic
of Indonesia, which is exercised by the State Minister
for State-Owned Enterprises. Prior to proposing
the appointment of Members of the Board of
Commissioners and the Board of Directors in a GMS,
the State Minister for State-Owned Enterprises first
conducts selection through the fit and proper test
process of the prospective members of the Board of
Commissioners and the Board of Directors.
The candidates’ qualifications and views concerning
the resolution of environmental and social issues are
also highlighted in this process. The selection results
are subsequently brought to and decided upon
in the GMS.
Commissioners’ and Directors’ Remuneration (4.5)
Each member of the Board of Commissioners receives
a monthly honorarium and certain allowances,
and receives a bonus for the performance and
achievement of PGN the amount of which is
stipulated in the GMS. Each Member of the Board
of Directors receives a monthly salary and other
allowances, and receives a bonus for the performance
and achievement of PGN. Taxes on the bonuses
received by the Commissioners and the Directors are
borne by the receiving party concerned.
Members of the Board of Commissioners and the
Board of Directors also receive functional facilities and
allowances such as vehicles/transportation allowance,
communication allowance, club/professional
membership, legal protection services, health
security, insurance, religious holiday allowance and
representation allowance.
The total honorarium of the Commissioners, the
salaries of the Directors, the bonuses and the
allowances are evaluated and decided upon in the
GMS, based on the achievement of the Company’s
performance, including the performance in the
context of supporting sustainability, which includes
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Sustainability Governance Key Principles of Governance
Internal Supervision and Control
In order to ensure the improvement of accountability
of the recording of all financial transactions and
the reporting thereof, PGN implements a risk-based
internal supervision and control system based on
Internal Audit Operating Procedures. The report is
prepared with reference to the Statement of Financial
Accounting Standards (Pernyataan Standar Akuntansi
Keuangan/PSAK) and the Internal Audit Guidelines
(Audit Charter). This provision has been stipulated in
the Decision of the Board of Directors, by referring
to the Decision of the ChaiIDRerson of the Capital
Market and Financial Institutions Supervisory Board
No: KEP-496/BL/2008.
The organizational instrumentality which has the
responsibility to ensure quality of the recording of
transactions and the reporting of financial position
are the Internal Supervisory Unit (Satuan Pengawasan
Intern/SPI) and the External Auditor. Those two
working units perform the Internal Supervision and
Control function using the Audit Management
Information System (Sistem Informasi Manajemen
Audit/SIMA) and the Audit Command Language
(ACL) as reference. As part of the effort of improving
accountability, PGN engages competent auditors,
who possess internal auditor profession certificates,
such as “Qualified Internal Auditor” (QIA) and
“Professional Internal Auditor” (PIA). The total SPI
staff who hold profession qualification certificate in
the field of audit as at the end of 2012 was 9 persons
or 40.9% of the total staff in the SPI unit consisting
of a total of 22 persons.
As part of the intensification of the movement for the
prevention of acts of corruption and in connection
with the implementation of supervision, we require
all SPI staff to participate in sufficient education and
training on audit procedures and detection of the
risk of deviation such as fraud auditing, investigative
audit and advanced internal auditing. (SO3)
In order to ensure the efficiency of the supervision
process, the audits to be conducted are prioritized
on the units which are prone to corruption and
deviation, such as the procurement, project
construction, finance and sales units. In the year
2012, SPI conducted audits of 100% of the total
programs and no fraud cases have been
discovered. (SO2)
Preventing Corruption (SO3, SO4)
We are strongly committed to preventing other
fraudulent acts by implementing strict rules and
taking firm action when a deviation is discovered. It
is affirmed in the company’s internal policy that All
Parties at PGN are prohibited from commiting acts
of corruption or acts which lead to corruption, and
they are also not allowed to give or receive bribes.
In addition to the strict policy regulation, through
the improvement of the quality of supervision as
described above, we are also going to apply the
whistleblowing system to ensure the effectiveness
of the movement for the prevention of acts of
corruption and other fraudulent acts which harm
all parties.
Through the whistleblowing system, we encourage
All Parties at PGN to make a report if they become
aware of any acts of corruption or any acts which
may potentially lead to corruption. We will protect
the identity of All Parties at PGN who report the act
or the potential act of Corruption. We will formulate
and apply the whistleblower policy as one of the
methods used by the Company for preventing the
occurrence of acts of corruption or abuse of power.
Those who commit the criminal act of corruption
will be processed in accordance with the applicable
legal provisions. In order to create a common
Key Principles of Governance
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PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Sustainability Governance Policies Related to Transparency and the Publication of Information
perception, determination and effectiveness of the
movement for the prevention of acts of corruption,
we will also organize education and training on anti
corruption. The education will be conducted in the
form of seminars and workshops, participated by all
employees in the Internal Supervision Unit (Satuan
Pengawasan Intern/SPI), the Procurement working
unit and other units which are prone to the acts of
corruption, fraud, bribery and the like (SO2).
Policy on Disclosure of Information and Transparency
In the context of implementing the transparency
principle as one of the pillars in the implementation
of GCG best practices, we try to disclose information
in a complete, accurate, and timely manner to our
stakeholders, particularly to the shareholders.
We conduct the disclosure of information in
a reasonable manner by taking into account
the interest of the company, the interest of the
stakeholders as a whole, as well as applicable
laws and regulations. We provide for the policy on
confidentiality and disclosure of information of
the Company in the Decision of the Board of
Directors Number 01100.K/132/UT/2006 Concerning
Information Management Policy of the Company.
We conduct disclosure of information using
various media, such as the Company’s website:
www.pgn.co.id, the mass media, Annual Report,
Sustainability Report, meetings with customers,
public presentations, meetings with analysts,
conference calls, analyst visits, site visits, participation
in conferences and non-deal roadshows.
Avoiding Conflict of Interest (4.6)
We apply the policy on the prevention of conflict
of interest which may hamper the performance of
the functions, duties and authorities of the Board
of Commissioners, the Board of Directors and other
Officers at PGN. The objective is to improve the
quality of decision making and implementation of
the independence principle. We have set forth this
policy in the code of conduct for All Parties at PGN
in the form of “Employees’ Code of Ethics” and
“Executives’ Code of Ethics”.
The Employees’ Code of Ethics in general contains
the code of conduct of All Parties at PGN in the
daily work activities and the procedures related to
stakeholders. The Employees’ Code of Ethics also
provides for the practical guidelines on conflict of
interest, corruption, bribery, gratification, information
management, etc. The Executives’ Code of Ethics in
general provides for the code of conduct for PGN
executives in carrying out their responsibilities. The
Employees’ Code of Ethics and the Executives’ Code
of Ethics have been published and compliance with
the same is mandatory for all parties at PGN.
Integrity Pact
As one of the manifestations of the implementation
of business ethics, PGN requires all parties involved
in the procurement of goods and services to sign
an integrity pact. The objective is to prevent the
occurrence of fraud and collusion in the goods and
services procurement process.
Avoiding Political Involvement (SO5, SO6)PGN prohibits the utilization of the Company’s
funds or assets for the interest of political parties or
candidates from political parties, either directly or
indirectly. This is in accordance with the regulation of
the State Minister for State-Owned Enterprises which
prohibits all SOEs from making financial contributions
and other forms of contributions to political
parties, politicians and related institutions. PGN’s
involvement in the formulation of public policies is
limited to the expression of views before the House
of Representatives (DPR) at the invitation of the
62
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Sustainability Governance Goods and Services Procurement63
relevant parties in the context of formulating policies
related to the business field of gas distribution and
transmission.
Goods and Services Procurement
In order to ensure transparency in procurement
process, we have been applying Goods or Services
Procurement Guidelines P-001/0.57 year 2008
pursuant to Decision of the Board of Directors
Number: 020500.K/LG.01/UT/2008 dated November
17, 2008, with the following principles:
a) Efficient; b) Effective; c) Open and Competitive;
d) Transparent; e) Fair/Non-Discriminatory; and
f) Accountable.
The objectives are as follows:
• To improve efficiency;
• To support the creation of the Company’s added
value;
• To simplify and accelerate the decision-making
process in goods/services procurement;
• To increase independence, responsibility and
professionalism of all elements involved in goods
or services procurement;
• To enhance synergy among SOEs and/or
Subsidiary Entities.
For the procurement of certain other goods and
services, we have been applying a quotation
process using the e-auction system for ensuring a
procurement process which is more transparent and
efficient as well as able to result in the lowest price.
However, this does not mean reducing the quality of
the work.
Mechanism for Expressing Opinion to the Board of Directors (4.4)
As an important element of the company’s
management, PGN employees have the right to
express opinions and make suggestions to the
Board of Directors through formal mechanisms,
such as meetings of the Workers’ Union with the
Management and the Company’s work meetings.
Suggestions and opinions can also be conveyed
to the Board of Directors through the events of
employees’ meetings with the Board of Directors
and during Working visits of the Board of Directors.
Employees can also convey opinions or suggestions
to the Board of Directors through correspondence
media such as letters or electronic mails.
All mechanisms for conveying opinions, suggestions
and recommendations have been implemented
properly in 2012. In addition to gaining various
thoughts related to the enhancement of various
policies of the company, the mechanisms
implemented have resulted in a more conducive
relationship with the internal stakeholders,
particularly employees in the context of promoting
the growth of PGN’s business.
Implementation of International Standards (4.12, SO2)
In order to achieve the vision of becoming a world
class company, PGN has been implementing
operational standards which are generally recognized
and accepted by the international community. We
have been implementing various key operational
standards in accordance with the international
standards including: risk management, quality
assurance, implementation of reporting standards
and implementation of MDG’S program.
• Risk Management
We manage risks as important part of the
implementation of governance best practices with
the main objective of preventing the disruption of
PGN’s operational and business activities. The method
that we use is by implementing an ERM-COSO-based
risk management system. This system includes the
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Sustainability Governance Implementation of International Standards 64
Prediagnostic risk mapping conducted by the Risk
Management Division. The result of the mapping is
followed up in phases by conducting remediation
activities or joint monitoring with the owners of the
relevant risks.
In order to increase all parties’ awareness of
the importance of Risk management, upon the
initiation of the Risk Management Division, PGN has
established a Risk Champion Team which constitutes
risk management representatives acting as change
agents in their respective working units. In addition
to that, we have also been conducting dissemination
activities, namely in the form of workshops,
refreshment, and group discussions.
Through risk management, which involves all levels of
the management, we have subsequently formulated
the blue print and roadmap of risk management
which serve as reference in the implementation of
the risk management function development. This is
in line with one of the focuses of the management
development in the Company’s 2011-2015
Long-Term Plan.
In addition to the above, we have also identified and
conducted the mitigation of seven main risks which
can affect operations and business sustainability,
which include: country risk, regulation risk,
operational risk, supply risk, currency risk, business
competition risk, and demand risk.
• Quality Assurance
In managing the quality of PGN’s services and
products, we have been applying ISO 9001 : 2008
international standards, which have been accredited
by LQRA (Lloyd’s Resister Quality Assurance) and valid
until January 2015.
• Reporting Standards of Global Reporting
Initiative (GRI)
PGN has been implementing a sustainability reporting
system by using the reporting standards issued by
Global Reporting Initiative (GRI). The objective is
to further increase accountability and transparency
in the company’s management related to the
environmental, manpower, human rights, community,
and product responsibility aspects.
• Millennium Development Goals (MDG’s)
Program
The government has formulated various policies
related to the MDG’s program as a sign of the
government’s seriousness in improving the welfare
and social condition of the community. PGN has
implemented the government policies through the
implementation of the Partnership and Environment
Development Program (Program Kemitraan dan Bina
Lingkungan/PKBL) which is in line with the
MDG’s Program.
We have been continuously improving the
sustainability governance system by implementing
other international standards, such as ISO 26000 and
UN Global Compact. In addition to that, we have also
been implementing several international initiatives to
deal with global warming and climate change, such
as, carbon footprint.
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Sustainability Governance Precautionary Approaches65
The adoption of international standards and principles as mentioned above and PGN’s participation in
various professional associations (see the description on “Prioritizing the Stakeholders”) constitute one of the
precautionary approaches in the Company’s risk management and business development.
We have issued the various policies in order to support the implementation of international standards by PGN.
We use facilitation and or evaluation services of competent external parties whenever necessary.
Precautionary Approaches (4.9,4.11)
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Sustainability Governance Precautionary Approaches66
The direction, control and supervision of the implementation and compliance with the international
standards which have been adopted are conducted by PGN’s Board of Directors through internal meetings
and the application of periodic reporting system by the relevant working units. We have also assigned
competent external parties to conduct evaluation and to provide inputs as well as recommendations for
further improvement. The assessment of the sustainability performance, particularly with regard to the
implementation of Social and Environmental Responsibility is conducted through meetings between the
company’s leadership and the relevant working units.
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Corporate Culture constitutes the values and philosophy, which have been agreed upon and believed by All
Parties at PGN as the basis and reference for PGN for achieving the objectives. PGN defines Corporate Culture
in the form of five values briefly abbreviated as ProCISE and elaborated in 10 Key Conducts of the Company.
(See the description on “About PGN”). The implementation of the 10 Key Conducts of the Company is
elaborated in the provisions of the Executives’ Code of Ethics and the Employees’ Code of Ethics as
mentioned previously.
The internalization of the culture and key conducts, which also include the economic, environmental and
social aspects, is conducted routinely through various approaches, such as dissemination by the Board of
Directors in the events of face-to-face meeting with the employees, counseling through in-house training and
the issuance of booklet which contains the rules of conduct. The internalization of the culture and principles
adopted by PGN has been implemented properly and continuous improvement will be made in order to ensure
that the conduct of All Parties at PGN is in line with PGN’s vision and mission at all times.
Internalization of PGN Culture and the Corporate Code of Conduct (4.8)
Sustainability Governance Internalization of PGN Culture and the Corporate Code of Conduct
67
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9 Improving the Well-Being of Employees
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Improving the Well-Being of Employees Improving the Well-Being of Employees
Improving the Well-Being of Employees
70
Human resources also play a vital role in ensuring the sustainability
of business, not only in terms of generating profits, but also in terms of improving mutual
welfare (people) and ensuring the preservation of the environment
(planet).
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Employees constitute a significant stakeholder
group for the Company, playing a vital strategic
role in the achievement of PGN’s long-term
goals. Human resources also play a vital role in
ensuring the sustainability of business, not only in
terms of generating profits, but also in terms of
improving mutual welfare (people) and ensuring the
preservation of the environment (planet). Thus, in the
management of human resources, we are committed
to paying full attention to the aspirations and needs
of all stakeholder groups, including our employees.
We have identified a number of the chief aspirations
of our employees, which include: a conducive
working environment, a defined career path and
clear systems of performance evaluation, appropriate
remuneration and guaranteed welfare. Based on
this conception of our human resources, we have
formulated and implemented a number of programs
and mechanisms to manage human resources in
order to achieve a balance between the interests
of the Company, which strives to achieve optimal
performance from its human resources, with the
interests of our employees, including an improvement
of their capabilities and competencies.
Programs and mechanisms to manage human
resources include the following:
Relationships with Employees
We manage our relationships with employees,
whom we regard as partners in the achievement of
PGN’s Vision 2020: “To become a world-class energy
company in the supply of natural gas”. Thus, we
strive to develop healthy labor relations through the
formulation of a Collective Work Agreement (CWA).
This CWA was formulated in cooperation with
representatives of our employees’ trade union, which
will monitor its implementation every twice months
basis. The CWA was agreed and implemented on
1 July 2011.
The successful formulation of the CWA by PGN
together with the SP-PGN is a clear manifestation
of the Company’s commitment to developing
harmonious industrial relations. The CWA defines the
rights and obligations of both the Company and its
employees in a balanced fashion. The CWA is
intended to:
• Provide legal certainty regarding the rights
and obligations of the Company and employees,
including working relations, working conditions,
and the implementation of the Company’s Code
of Conduct;
• To reinforce and strengthen cooperation between
the Company and Employees;
• To regulate the fair settlement of differences
of opinion by ensuring that differences are settled
through deliberation and consensus and do not
result in disputes.
Thus, the rights of all permanent employees of PGAS
(100%) are protected by Corporate Regulations.
(LA4)
Refinements to the CWA will be conducted the
future in order to provide further assurance that
the rights of employees are respected. One revision
under immediate consideration involves the need to
include a clause in the CWA that guarantees that
the Company will provide employees with at least
one month’s notice before making any fundamental
changes to the structure of the Company,
including such changes as acquisitions, mergers or
organizational restructuring. (LA5)
Improving the Well-Being of Employees Relationships with Employees71
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Improving the Well-Being of Employees Compliance with Labor Regulations and Laws
As a company that is managed in accordance with
the principles of good Corporate governance, in the
management of its system of employee relations,
the management of PGN strives to achieve full
compliance with all laws and regulations governing
labor. By achieving full compliance with these laws
and regulations, the Company minimizes its risk
of breaching human rights in the workplace. The
foundation of the system of management of labor
relations is the CWA, which is discussed in the
previous section. A list of the points covered in this
CWA demonstrates our full compliance with laws and
regulations governing labor and labor relations,
as follows:
Freedom to Participate in Unions (HR5)
As a public company, we strive to guarantee the
rights of employees to engage in collective action
through participation in trade unions. We provide
this guarantee because management is committed
to a paradigm in which the relationship between
employees and business should be cooperative
and mutually beneficial. The right of employees to
establish and participate in trade unions is enshrined
in Act Number 21, 2000 concerning Trade Unions.
Membership in trade unions is not mandatory. We
believe that the relationship between the Company
with the employees union, SP-PGN, is working well.
The trade union which represents PGN’s employees
is the PT Perusahaan Gas Negara (Persero) Tbk
Employees Trade Union, commonly known as
SP-PGN. SP-PGN is an autonomous organization,
without affiliations. SP-PGN is registered with the
Ministry of Labor, under the registration number
387/II/P/IX/2009, with the date of registration being
19 September 2009 at the West Jakarta office
of the Ministry of Labor. SP-PGN is organized by
representatives within the respective organizational
units of the Company, with overall guidance and
coordination provided by the central administrative
unit based at PGN’s Head Office. With the
establishment of SP-PGN, it is hoped that the three
fundamental principles of partnership governing
industrial relations (partner in profit, partner in
responsibility, and partner in production) can be
manifested through employees’ daily activities.
In order to ensure the implementation of this
partnership, we engage in routine surveys to
determine the level of satisfaction of employees and
to collect direct feedback from employees to assess
their concerns and opinions regarding employment
at PGN.
Workplace Environment
As a company committed to the implementation of
the principles We are aware that in the conduct
of our day-to-day activities, the Company must
always strive to ensure harmonious relationships
with employees.
To facilitate their ability to contribute to the
Company’s success and to foster relationships based
on sound family values and equality for employees
at all levels. In this fashion, we will achieve full
compliance with laws and regulations governing
labor and labor relations in Indonesia.
To achieve this, a high level of cooperation and
mutual respect and trust is required, together with
a commitment on the part of all parties to engage
in good communication.
Compliance with Labor Regulations and Laws
72
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Improving the Well-Being of Employees Employee Turnover73
To achieve good communication between employees
and management, we have implemented a Corporate
portal which can be used to support communication
on a day-to-day basis. The features of this Corporate
portal are as follows:
• Corporate email application;
• e-SMS applications to provide information about
incoming or outgoing correspondence;
• e-attendance applications in order to determine
employees attendance online;
• Online knowledge management applications
in order to socialize best practices and to provide
information related to daily duties.
PGN has established its ability to foster a conducive
workplace and to develop a system in which
employees feel that they are part of team, thereby
promoting good teamwork. Throughout PGN’s
operations, there have been no incidences of mass
demonstrations or strikes reflecting employees’
dissatisfaction with policies and practices
implemented by management.
Employee Turnover
With a conducive working environment, the level
of employee turnover is relatively low. Throughout
2012 still have 54 employees ceased employment
at PGN. The main reasons that employees left PGN’s
employment were that they reached retirement age
or deceased. Only a small number of employees
voluntarily resigned from employment for
personal reasons. (LA2)
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Improving the Well-Being of Employees Elimination of Forced Labor
Elimination of Forced Labor
PGN strives to avoid all practices that might be suggestive of forced labor or of undue compulsion by
establishing clear limits to working hours in accordance with the specific nature of the area of operations and
of the specific work force in question. Staff may work during normal working hours or on shift work, or during
other specified hours in specific operations in certain areas. When employees are required to work for periods
in excess of the defined working hours, they are entitled to be paid overtime payments calculated at a rate
defined by internal regulations.
Fair Remuneration
PGN ensures that the basic salaries of entry-level staff are set at least at the level of the Regional Minimum
Wage (RMW). In particular, the Company provides allowances in excess of normative requirements, leave al-
74
Clasification 2012 2011
Men Women Total Men Women Total
New employee by age group
<30 63 18 81 10 2 12
30 - 40 12 1 13 - - -
>40 3 - 3 1 - 1
Total 78 19 97 11 2 13
New employee by work region
Head Office 30 7 37 2 1 3
SBU Distribution Region I 22 5 27 4 - 4
SBU Distribution Region II 10 1 11 2 1 3
SBU Distribution Region III 3 3 6 3 - 3
SBU Transmission Sumatera - Jawa
11 3 14 - - -
Project 2 - 2 - - -
Total 78 19 97 11 2 13
Employee out
Voluntary resigned 8 5 13 2 6 8
Disciplinary Sanction - - - 1 - 1
Death 5 2 7 4 1 5
Retired 29 3 32 23 - 23
Early retired - - - 6 3 9
Others 2 0 2 3 - 3
Total 44 10 54 39 10 49
EMPLOYEE TURNOVER TABLE
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Improving the Well-Being of Employees Fair Remuneration75
TABLE OF AVERAGE RATIO OF GENDER REMUNERATION (LA14)
Men Women
Senior Management 1,01 1,00
Middle Management 1,00 1,01
Junior Management 1,00 1,06
Staff 1,01 1,00
No Operation Region Amount of Basic Salary in Region/Province (IDR)
New Worker Amount Basic Salary (IDR)
Ratio
1 Head Office 2,200,000 2,400,000 109%
2 SBU Distribution Region I 2,200,000 2,400,000 109%
3 SBU Distribution Region II 1,740,000 2,400,000 138%
4 SBU Distribution Region III - 2,400,000 -
5 SBU Transmission Sumatera - Jawa 2,200,000 2,400,000 109%
6 Gas Pipeline Construction Project 2,200,000 2,400,000 109%
7 Subsidiary 2,200,000 2,400,000 109%
RASIO BASIC SALARY
PGN has established its own mechanisms for determining the entitlements of staff, with these mechanisms
being based on the principle of equality between male and female workers. PGN also strives to ensure equal
opportunities through the provision of health facilities that meet the specific needs of female employees,
ensuring that female employees have the same level of security and opportunity as male employees. Similarly,
the principle of equal opportunity is implemented through the provision of equal wages for similar work
conducted by male and female workers.
The table below demonstrates that differences in entitlement packages between employees of different
genders are less than 10 percent. On average, the female employees in operational and lower to mid-level
managerial positions receive higher entitlement packages than male employees. The only level at which
male employees receive higher entitlement packages on average than female employees is at the senior
management level.
lowances that exceed the minimum levels required by regulation, annual bonuses and other incentives
for employees.
The minimum wages received by PGN employees of the lowest ranks are determined with reference to the
RMW, or Provincial Minimum Wage (PMW) in each region where PGN operates. This can be demonstrated
through the following table, which clearly shows that the wages of newly recruited staff at the lowest levels
are always in excess of the defined minimum wages (EC5).
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Improving the Well-Being of Employees Entitlement Package of Non-Organic Workers76
For outsourcing workers, Company to continue to ensure that these rights should be normative in the
existing provisions, although the coaching responsibilities in the hands of providers Company workers.
No Return Type Services Organic Workers Non-Organic Workers
A Wages
B Support Facilities:
Workplace Accident and Disability Insurance
Work-Related Death Benefits
Non-Workplace Accident and Disability Insurance
Non-Work-Related Death Benefit
Health Benefits for Employees
Health Benefits for Employees’ Spouses
Health Benefits for Employees’ Children
Leave Entitlements
Maternity Leave
Menstrual Leave
Pilgrimage Leave and Leave for Spiritualpurposes
Facilities for the Celebration of Religious Holidays
Pension Fund
Severance Payments
Special Needs Facilities and Support
BENEFITS PROVIDED TO ORGANIC WORKERS THAT ARE NOT PROVIDED TO NON-ORGANIC
Entitlement Package of Non-Organic Workers (LA3)In general, the Company’s employees fall into two main categories, organic employees, and non-organic
employees. Currently, all Company’s employees are organic workers.
While all employees receive appropriate remuneration for their contributions to PGN, the entitlement packages
of organic workers may vary from those of non-organic workers. The variance between these packages is
related to a number of factors, including differences in the facilities and support provided to workers in the
different classes, as the following table shows: (LA3)
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We are strongly committed to respecting the
human rights of employees in the workplace. We
fully support the establishment of a trade union for
our employees, SP-PGN, and respect the rights of
employees to express their opinions and to strive
to fulfill their aspirations freely, both individually
and collectively through the SP-PGN, in accordance
with the ILO Convention 87 of 1948 concerning the
rights of workers to protect their interests through
the establishment of an organization. Our respect
for human rights is also reflected in our recruitment
practices and through the establishment of a
conducive working environment. We are strongly
committed to equal rights without regard for gender,
ethnic background, religion, race, or group affiliation
and prohibit discriminative practices in the treatment
of employees. Thus, in the period of this report,
PGN has not received complaints or claims related to
discriminatory practices involving its employees. (HR4)
In addition, as part of our commitment to the
avoidance of practices that violate human rights, we
have implemented a strict policy of not employing
underage workers. At the time of the publication of
this report, the youngest employee at PGN was 20
years old. The minimum age at which an individual
can apply for employment at the Company is
18 years old. (HR6)
This policy is strictly enforced and monitored.
Throughout the period of this report, there were
no cases of underage individuals employed at PGN.
In this regard, we have achieved full compliance
with policies established by the government, which
has ratified a number of international conventions
regarding human resources, including the
International Labour Organisation Convention (ILO).
Human Rights Training and Awareness
Raising
In order to prevent infringements of human
rights resulting from a lack of knowledge and
understanding of the basic principles of these rights,
we conduct specific training to raise awareness of
issues related to these. Training and information
materials concerning human rights are specifically
provided for employees involved in the enforcement
of security within the Company’s operations.
Training in matters related to human rights is
provided in cooperation with the police force. By the
end of 2012, approximately 85% of the Company’s
security officers had received refresher training
courses involving instruction in issues related to
human rights. (HR3, HR8)
In the conduct of all projects and activities to
develop the pipeline network distribution system, the
Company completely refrains at all times from forcing
affected communities to comply with the wishes
of the Company. Rather, it conducts socialization
activities to raise awareness of the importance of the
pipeline distribution network to the development
of the affected area, so that members of affected
communities support the Company’s programs
to utilize natural gas. Throughout the period of
this report, no reports were received related to
infringements of human rights by the Company
in the areas in which it conducts its
operational activities. (HR9)
Preventing Corruption (SO3, SO4)
We are strongly committed to playing a full part
in the movement to eradicate corruption. This
commitment is driven by our conviction that
corrupt practices peIDRetrated by employees have
a significant potential to cause both financial and
non-financial damage to the Company in particular
Improving the Well-Being of Employees Respect for Human Rights77
Respect for Human Rights
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
and to the nation in general. In many cases, the non-
financial damage takes the form of damage to the
Company’s reputation and limitations on its ability to
expand. In addition, damage may take the form of a
degradation of morals within the workplace.
Thus, we have established and implemented strict
regulations to mitigate against the risk of corrupt
practices. We emphasize that no employee of PGN
may engage in corrupt practices or in practices that
enable corruption. We also urge employees to report
any knowledge of corrupt actions or actions that
are potentially corrupt. We protect the identity of
employees who report actual or potential acts of
corruption.
We have implemented these policies regarding the
reporting of corrupt or potentially corrupt acts to
minimize such practices and to prevent the abuse of
authority. Any employee found engaging in corrupt
practices will be processed in full accordance with the
prevailing laws and regulations and their employment
at PGN will be terminated. To ensure that all work
units are free of corrupt practices or the abuse of
authority that may lead to fraud and corruption,
we conduct an ongoing process of auditing and
inspection, particularly for units where the potential
for corruption is high. These units include work
units involved in procurements, finance, project
maintenance and other units whose work involves
frequent interactions with third parties.
In the implementation of GCG (Good Corporate Governance) and to support the government in the state apparatus is clean and free of corruption, collusion and nepotism, PGN requires all officers of the level of the supervisor to make the report of public officials wealth (LHKPN) as an education on the prevention of corruption to all PGN officers. The Company also has been working with the Commission to conduct education and
outreach, and prevention of corruption charge LHKPN technical guidance.
The Company’s Internal Audit unit is responsible
for conducting periodic assessments and audits,
which may be based on inputs from the whistle
blowing system. Thus, we provide special training
and education for personnel attached to the
internal audit unit in order to ensure that the quality
of the audits that they conduct is in accordance
with current auditing standards. In addition, the
Company provides special training and education
related to the prevention of corruption in the form
of workshops and seminars which are followed by all
employees within the Internal Monitoring Unit and in
procurement units.
Improving the Well-Being of Employees Preventing Corruption78
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Improving the Well-Being of Employees Contribution to Political Parties79
COMPOSITION BASED EMPLOYEES LEVEL POSITIONS (LA1)
Level 2012 2011
Men Women Total Men Women Total
Vice President 55 12 67 54 12 66
Assistant Vice President 115 28 143 107 26 133
Manager 144 60 204 96 60 156
Assistant Manager 130 52 182 132 39 171
Supervisor 100 45 145 122 40 162
Senior Staff 88 40 128 77 46 123
Staff 563 132 694 569 136 705
Jumlah 1.195 369 1.564 1.157 359 1.516
Contributions to Political Parties (SO5, SO6)
We fully respect the rights of all employees to fulfill their political aspirations, in accordance with their rights.
However, we prohibit employees from forcing their opinions and wishes through their participation in political
activities. In addition, in accordance with regulations promulgated by the State Minister for State-Owned
Enterprises that forbid SOE’s from making contributions, financial or otherwise political parties, politicians
and related institutions, PGN forbids the use of company funds or assets to promote the interests of political
parties or political candidates, either directly or indirectly.
The Company’s involvement in public policy-making is limited to presenting its views before parliament (the
DPR) or at the invitation of the parties concerned in relation to the formulation of policy related to meeting the
demand for natural gas for domestic consumption, whether for the needs of the fertilizer industry or for other
uses as an environmentally friendly fuel.
Labor Force Profile (LA1)
The total number of the Company’s employees in 2012 was 1564 individuals, an increase of 3.17% over the
total number of 1516 in 2011. The increase in the number of employees is in accordance with plans for the
development of the Company. In the future, we will continue to increase the number of employees while at
the same time increasing the minimum standards of expertise as part of the ongoing process to expand PGN’s
business and to fulfill its vision of becoming a world-class energy company in the utilization of natural gas.
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Education 2012 2011
permanent permanent
S - 3 1 1
S - 2 114 94
S - 1 633 547
Diploma 494 514
High School 322 360
Total 1,564 1,516
NUMBER OF EMPLOYEES BY EDUCATION LEVEL
Improving the Well-Being of Employees Labor Force Profile80
NUMBER OF EMPLOYEES WORKING AREAS IN 2012
Region 2012 2011
Men Women Total Men Women Total
Head Office 301 140 440 260 133 393
SBU Region I West Java 377 89 466 389 87 476
SBU Region II East Java 172 41 213 164 39 203
SBU Region III North Sumatera 113 40 153 117 38 155
SBU TSJ 156 33 189 149 32 181
Gas Pipeline Construction Project 64 24 88 47 19 66
Subsidiary 12 2 14 31 11 42
Total 1,195 369 1,564 1,157 359 1,516
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
With the growth of our organization and the expansion of our activities, our human resources requirements
are becoming increasingly stringent and varied. We require employees who have a high level of competence in
their field and whose qualifications meet the standards of the Company. In order to fulfill our needs for these
human resources, we provide equal opportunities to all individuals working or serving as employees within the
Company’s sphere of operations.
In the process of recruitment, we involve independent, competent third parties and announce employment
opportunities openly, both through the media and through our Corporate website, in order to provide equal
opportunities to all candidates with the appropriate qualifications. We conduct our recruitment selection
processes through three main programs, as follows:
1. Regular Recruitment from External Sources
This recruitment and selection program was intended to facilitate the hiring of new, highly qualified
employees who have graduated from tertiary educational institutions. To assure independence and
transparency, PGN conducted the selection process with the assistance of a number of independent
third parties.
2. Recruitment from non-permanent staff (internal sources)
This recruitment and selection program was intended to facilitate the hiring of new workers from amongst
third-party contract workers (outsourcing) or from amongst workers on fixed term contracts. This program
was intended to recognize the loyalty and contribution made by many of these workers.
3. Recruitment from amongst National Athletes
This program was established to express the PGN support for government programs to facilitate the
personal development of national athletes and to express appreciation for athletes who have served to
increase Indonesia’s national prestige.
In the recruitment process, in cases of selection of candidates with equal qualifications and experience, we
prioritize the employment of candidates from the area in which our operations are based. Before being
appointed as a permanent employee, candidates must participate in an orientation program and pass
through a probation period. After being appointed as a permanent employee, new employees participate in
professional development programs related to their individual areas of expertise. (EC7)
We also conduct a Bonded Scholarship Program for the specific benefit of graduates of the Taruna Nusantara
Senior High School, whose students come from throughout Indonesia. This program is a manifestation of our
commitment to assist high achieving students from disadvantaged socio-economic backgrounds. Recipients
of this scholarship will receive support to continue their education at the Energy and Mineral Institute (STEM)
until their completion of the Diploma 3 Program. Following their graduation, recipients of this program will be
appointed as employees of PGN. This program has been implemented since 2006, with the cumulative number
of recipients of scholarships who have been appointed as employees of PGN with total of 41 individuals.
Equal Opportunity in the Workplace (LA13)
Improving the Well-Being of Employees Equal Opportunity in the Workplace81
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Improving the Well-Being of Employees Equal Opportunity in the Workplace82
Demonstrating our commitment to diversity and equal opportunity in the recruitment and deployment of
employees, the following table presents information related to the number of employees of different genders
in various structural positions.
Clasification Number of Employees in 2012 Employees based on Age (Men)
Employees based on Age (Women)
Men Women Total <30 30-50 >50 <30 30-50 >50
Senior Management 55 12 67 - 22 37 - 3 9
Middle Management 115 28 143 - 90 30 - 27 5
Junior Management 374 157 531 14 329 35 13 133 13
Staff 651 172 822 317 237 83 108 52 7
Grand Total 1,195 369 1,564 331 678 185 121 215 34
TABLE OF EMPLOYEES PROFILE
During the year 2012 we have conducted 21,886 training mandays for workers with a total cost of
IDR23,955,161,083,-
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In order to assess the level of performance of each
employee and to establish a career path, we have
developed the Individual Performance Management
System (SMKI). This system was first implemented in
2012 to develop synergies between the capacities
and performance of employees as a means of
developing our business capabilities.
In the implementation of this system, the targets
of each employee are set with reference to the
Company’s Strategic Business Priorities. The
Company’s targets are integrally related to the
individual targets of each member of the Board of
Directors, and to each particular level of staff. This
reflects the integration of endeavors to achieve
the Corporate vision and mission in terms of the
capacities of individual members of staff.
The SMKI is supported by web-based applications
that are used by a portion of our staff to record
information related to the management of their
performance. Merely by connecting to the Internet,
from any location and at any point in time, an
individual member of staff can conduct all matters
related to the management of their productivity
throughout the year.
At the end of the period covered by this report,
we conducted an evaluation of individual levels of
achievement and classed these in terms of five basic
ratings, as follows: Outstanding, Exceed Expectation,
Meet Expectation, Reasonable and Unsatisfactory.
All of these rankings are based on quantitative and
qualitative data expressed through Key Performance
Indicators (KPI). The rating system is used to guide
adjustments to salary packages and the career
paths of individual employees. Matters related to
promotion, change of position and rotation are also
based on the findings of the assessments conducted
on a biannual basis.
By the end of 2012, all employees (100%) have
received KPI for the 2011 assessment period.
In addition to being based on an evaluation of
performance, decisions related to promotion are
based on three primary considerations, these being
the needs of the Company, an assessment of the
level of performance of the employee, and his or her
level of work experience. In no cases are such matters
influenced by considerations related to gender, age,
ethnic background, religion, race, group affiliation
or any other consideration that may be considered
discriminatory.
Career Management (LA12)
Improving the Well-Being of Employees Career Management83
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Improving the Well-Being of Employees Career Management84
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In order to ensure ongoing access to high-quality
human resources, we have implemented a program
to develop competencies of employees in a planned,
systematic and focused fashion that meets the
business needs of the Company. One of the primary
programs through which this has been achieved is
the Education and Training Program (Diklat), which
has been designed to maintain and improve the
quality of our human resources.
In order to ensure that the implementation of this
program is conducted systematically and in a focused
fashion to meet the Company’s needs for professional
competencies, we have developed a system,
syllabus and modules, together with comprehensive
guidelines for the program in specific areas, including
technical, operational and commercial areas, which
are integrally related with the Company’s ability to
increase its revenue, distribute gas reliably and ensure
the satisfaction of PGN’s external clients.
In 2012, these aspects of the training program were
based on the distinctive competencies required
by PGN. Following this model, it is hoped that the
training program will fulfill the needs of the Company
for competencies in a number of areas.
In 2012, we provided 21,886 days of training for our
employees at a total cost of IDR23,955,161,083.
In addition to training intended to develop the
competencies and professional skills of our
employees, we also conduct specific training for
employees reaching their retirement age. This training
involves the provision of equipment to prepare these
employees for their retirement period and to enable
them to engage in productive activities to meet their
basic needs. The preretirement training program is
available for employees who are within three years of
reaching their retirement age. (LA11)
Pension and Insurance Programs
Pension and Insurance Programs
In order to ensure the welfare of all employees,
since 2009, the Company has required employees to
participate in a fixed contribution pension scheme,
which will provide a pension to guarantee their
welfare in their retirement. With the participation of
employees in this fixed contribution pension scheme,
all employees have the right to choose to participate
in a range of pension funds with different investment
portfolios, in accordance with their personal wishes.
In order to guarantee the welfare of employees,
PGN also involves all employees in the government’s
social insurance scheme, Jamsostek. In addition
to complying with government regulations, the
Company also provides hospital benefits and
medical benefits for all employees and members of
their family. In addition, PGN enrolls its employees
in a personal accident insurance program which
provides coverage in cases of workplace accidents for
hospitalization and funeral benefits. (LA3)
Training and Competency Development (LA10)
Improving the Well-Being of Employees Training and Competency Development85
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10 Increased Customer Satisfication
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Increased Customer Satisfaction
Increased Customer Satisfication Increased Customer Satisfication88
One of PGN’s Corporate values states that the Company and all levels of staff and management must be committed to “Placing
top priority on the satisfaction of clients, including both internal
and external clients, through the provision of excellent service”.
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
The Company’s clients and consumers are a
vitally important stakeholder group, ensuring the
sustainability of the Company’s business activities
through the purchase of services and their payment
for these services. Clients have the right to expect
that PGN will provide them with the products and
services they require in a timely fashion and in the
quantities and of the quality they require.
To meet its obligations to its clients and to fulfil their
expectations, PGN has implemented a number of
programs to ensure the achievement of full client
satisfaction. These programs are described in the
following sections:
Information regarding Products (PR3)
PGN derives its revenues from margins on the
distribution of natural gas to end users and from
toll fees from the transmission of natural gas from
its producers to its end users through the pipeline
transmission network under the Company’s
management. In order to ensure that the quality
of gas provided meets the standards established
through the sales contract entered into with end
users, PGN conducts a number of procedures to
test standards.
PGN distributes natural gas through a pipe
distribution network which is clearly marked with
marker posts along the length of the network as a
control and security measure. The pressure levels of
the natural gas in the pipes is controlled according to
contracts that emphasise safety aspects.
The chemical composition of the natural gas is
examined periodically in order to ensure compliance
with current regulations and to determine that
Increased Customer Satisfication Information Regarding Products89
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
it meets the parameters established in contracts
with end users. The results of the examinations to
determine the chemical composition of the natural
gas, from its point of production to its delivery to the
client, as well as periodic examinations of pressure
levels, are attached to the manifest presented to the
client. The goal of this measure is to ensure that all
information related to the supply of the natural gas
received by the end-user is clear and
delivered accountably.
Product Quality and Compliance with
Regulations and Standards (PR1, PR4)
In order to ensure the quality of the product passing
through the Company’s transmission networks
and other distribution networks, PGN adheres to
ISO 9001:2008 Quality Management Standards.
According to these standards, before entering into
a contract with a supplier of gas, PGN conducts an
inspection of reserves of gas, of the equipment used
to produce the gas, and of the quality of gas coming
from the supplier.
Gas samples are examined at a number of points,
at the intake point and a number of random points
along the transmission pipes. Examinations of these
samples are conducted by competent independent
inspection agencies. These examinations are also
intended to determine available quantities of gas.
Reports related to these quality gas examination are
attached to gas sales contract to end users in order
to enable consumers to accurately determine the
quality of the gas that they use. After entering into
a contract with its suppliers, PGN conducts ongoing
examinations to determine the quality and quantity
of gas provided by these suppliers, with its findings
Increased Customer Satisfication Product Quality and Compliance with Regulations and Standards
90
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
made available for end users as soon as possible,
particularly in cases where the findings indicate that
supply to end users may be disrupted.
In order to ensure the quality of gas to its clients,
amongst other measures, PGN may mix gas provided
by a number of different suppliers. This has the
potential to alter the quality of gas supplied. In order
to ensure that the quality of gas supplied and the
pressure of gas transmitted through the distribution
network is maintained, PGN has implemented a
system of filters and scrubbers in offtake stations
and filters in clients’ meters. Through means such as
these, complaints and claims related to the quality of
gas distributed through PGN’s pipeline transmission
network or other distribution networks can be kept
to a minimum.
In 2012, no cases of transgressions against relevant
regulations and standards covering the transmission
and distribution of gas were recorded. In addition,
there were no recorded complaints or claims by
clients related to the quality of gas transmitted
through PGN’s pipeline network system or distributed
through other means. (SO8, PR2, PR7)
Customer Service (PR9)
As a manifestation of its commitment to improving
customer service and to implementing the Corporate
values explicated in PGN ProCise, the Company has
established a customer complaints and information
center known as the Gas Contact Center, which can
be reached by phone on 0800 1 500 645 (toll free)
or 021 633 3000, or by email at [email protected].
The Gas Contact Center deals with inquiries and
complaints from customers and the public alike, and
operates 24 hours a day, 7 days a week. The Contact
Center is a centralized unit in the Head Office and
is integrated with the Company’s three Strategic
Business Units in Jakarta, Surabaya, and Medan.
Any general inquiries about PGN are dealt with
directly by a Contact Center Agent, while complaints
are forwarded to the person or department
authorized to handle them, and are dealt with within
no more than 24 hours of receipt. All complaints
and inquiries are recorded in the Contact Center
database. In order to facilitate customer service, in
2012 PGN settled a number of customer complaints
that were received verbally or in writing. There were
no recorded cases of violations of the stipulations of
contracts regarding products or services provided by
the Company.
Customer Gatherings (PR2, EN26)
PGN implements a Customer Gathering program.
The goal of this program is to make customer service
more proactive and to foster better relationships
between the Company and its clients, who are a
strategically important stakeholder group.
The nature of the customer-gathering program
conducted in 2012 varied for each of the different
SBU. However, all of these activities were conducted
with the same basic goal, which was to narrow
the gap between customers’ expectations and the
Company’s capacity to provide such services.
Another goal of customer gatherings is to promote
the use of natural gas and of the pipeline distribution
network operated by the Company. Activities
conducted by PGN to promote its products include,
amongst activities, sponsorship of events to
socialize the use of environmentally friendly energy,
participation in trade shows for the same puIDRose,
gatherings for existing and potential customers,
exhibitions for the public and for representatives
of local governments, and family events involving
clients.
Increased Customer Satisfication Customer Service91
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All these activities are intended to improve the public
standing of the Company and to foster customer
loyalty. Through various events of this kind, the
Company gathers mutually beneficial feedback and
input regarding its ability to meet the needs of its
customers and their expectations. In addition, these
events provide the Company with the opportunity
to generate a greater awareness and to provide
explanations related to the safe use of gas as a fuel,
including explanations related to the security of the
pipeline gas network located in both industrial and
residential zones. In addition to formal gatherings,
the Company facilitates routine visits to potential
clients to foster a mutually beneficial awareness
of issues related to the safe installation and use of
gas. In addition, the Company facilitates visits to
existing clients to check meters and installed pipes,
to conduct routine maintenance, and to follow up on
complaints made by these clients.
These activities are conducted in order to minimize
any possible negative effects resulting from the
distribution of gas on the environment and in order
to ensure full compliance with safety regulations.
Measuring Customer Satisfaction (PR5, PR8)
One means through which PGN strives to improve
its levels of customer service is through measuring
customer satisfaction. The results of customer service
satisfaction surveys are used as a reference for
updating Service Excellence Standards.
In 2012, PGN again conducted internal customer
satisfaction surveys in each sales and service area.
The results of these surveys were formulated into a
number of matrices, including Customer Satisfaction
Index (CSI) and Customer Importance Index (CII)
Through these surveys, a number of issues and
expectations that have emerged during the period of
this report were uncovered. The findings will provide
input for the Company to improve its customer
service and its overall performance.
In 2012, the customer satisfaction survey emphasized
on the performance of Account Executives and online
payments for residential customers. The following
scores were derived from the surveys:
CSI 85,33% and CII 88,5%.
PGN consistently strives to update its Service
Excellence Standards in order that these standards
continue to meet the expectations of clients and
facilitate the provision of excellent service.
PGN has continued to work in cooperation with an
independent service provider to improve its level of
service. The puIDRose of the cooperation is to map
client expectations against the Company’s current
management policies and practices. Based on this
mapping, the Company has published a Service
Excellence Pocket Book, which has been socialized
throughout its operations.
PGN has also realized a significant investments in
a upstream due to frequent complaints by clients.
These client complaints relate to inadequate gas
pressure in the parts distribution network in areas
close to the end user’s outlets, because from
inadequate supplies by producers.
Thus, in the future, when supplies of gas from
producers are inadequate, PGN will be able to
compensate for this deficiency with the supply of gas
from its own sources or from FSRU (Floating Storage
Regasification Unit) facilities, CNG (Compressed
Natural Gas) facilities or from the LNG Receiving
Terminal that is currently being developed in areas
located in proximity to the Company’s primary clients,
Increased Customer Satisfication Measuring Customer Satisfication92
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Increased Customer Satisfication Measuring Customer Satisfication93
these being areas of industrial and commercial
operations. The measures described above are a
manifestation of the Company’s commitment to
customer satisfaction, which requires management
and staff at all levels to prepare themselves to meet
both the business challenges and the competitive
challenges in the future.
Photo by: Mas Agung Hamzari, Marketing Division
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Prioritizing Occupational, Safety and Health (OSH)11
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PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Prioritizing Occupational, Safety and Health (OSH)
Prioritizing OSH Prioritizing OSH96
“Always give priority to occupational health and safety,
both for themselves and the environment surrounding “
Photo by: Achmad Ismawan, KSU Division
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
For PGN, implementing best practices in occupational, safety, and health (OSH) is one of the primary
importance in the strategic planning for the development of the Company. The commitment of management
and all employees of PGN to implement best practices in this area is also reflected in the Company’s Cultural
Values. One of these values is emphasizing the importance of “continuously prioritizing occupational, safety,
and health, both with regards to oneself and to the surroundings.”
To emphasize the Company’s commitment of occupational, safety, and health for its workers, PGN has
formulated a number of regulations through the Collective Work Agreement (CWA), which has been signed
by the PGN Employees Trade Union and management. (LA9)
The main considerations underlying our commitment to this issue due to the characteristics of natural gas
which is distributed through distribution and transmission pipeline network. One of the characteristics of
natural gas is highly inflammable. Thus, OSH must be a top priority in the implementation of all operational
activities.
The high priority placed by the Company on OSH issues is also in accord with the spirit of Article 86 (2) of Law
Number 13, 2003 regarding Labor, which states that “To protect the safety of employees or laborers in order
to ensure optimal productivity, measures shall be taken to ensure occupational, safety, and health”.
OSH Organization and Policies
In accordance with our commitment to occupational, safety, and health, since 2009, PGN has formulated and
implemented a comprehensive OSH program. This program, which is called the Safety Excellence Journey, is
subject to ongoing evaluation at each stage of its implementation. The OSH program has been formulated and
explicated in a specific document, the OSH Culture Roadmap.
To realize the culture that prioritizes safety, the Board of Directors has formulated the PGN Vision to aachieve
Safety Excellence, which are consists of the fundamental principles as follows:
1. Zero incidents
2. Inherently Safe and Environmental Friendly Performance in all activities
In 2012, PGN has formulated a new vision and policies as part of its Occupational, Safety, Health and
Environmental Management Program (K3PL). PGN is not only committed to ensure high levels of occupational,
safety, health and environmental management, but also actively strives to optimize the use of natural gas as
an energy sources, which are more environmentally friendly than coal. With this renewal, policies and the
organizational structure for the management of OSH have been adjusted.
Now, PGN’s OSH policies have been comprehensively defined as stated in the Decision of the Board of
Directors as follows:
Prioritizing OSH OSH Organization and Policies97
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Prioritizing OSH OSH Organization and Policies98
POLICY SAFETY, HEALTH AND ENVIRONMENTAL AND ENERGY (OSH)
State Gas Company (Limited) Tbk. Energy is a company that has a vision of zero incident in the areas of safety, health, environment and energy. In the implementation, the Company has a target to zero in: death, disease and environmental pollution caused by the management of the company’s business. For that company establishes the following policy:
1. Implementing a Safety Management System, Occupational Health, Environmental Management and Energy (SMK3PL-E) and comply with provisions of Law and other applicable requirements.
2. Perform proactive and preventive actions in order to achieve a safe working environment, hygienic, no environmental contamination and efficient in energy utilization.
3. Energy conservation efforts to achieve efficiency and optimization energy utilization.
4. Implement coaching to each worker through education and training activities K3PL-E on an ongoing basis and develop provision rewards and sanctions.
5. Conduct investigations on any incidents, accidents at work and occupational diseases as well as environmental pollution and ensure follow-up the findings as a precaution.
6. Evaluating the performance of system-E K3PL regularly for improvement sustainable.
Jakarta, 31 October 2012
Hendi Prio SantosoPresident Director
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With the promulgation of this new policy, the Occupational, Safety, Health and Environmental Management
Committee has been transformed to become the Occupational, Safety, Health, Environmental Management
and Energy Committee (K3PL-E). This committee has a dual structure, Central Safety Committee (CSC) and
Executive Central Safety Committee (ECSC).
Central Safety Committee (CSC) is operating for each directorate. CSC is the responsibility of a Director, whose
function is to formulate policies and to monitor the implementation of measures to ensure occupational,
safety, and environmental management throughout all areas of the Company’s operations.
Executive Central Safety Committee (ECSC), is under the direct management of the President Director, who
coordinates and monitors the implementation of the OSH policies formulated by the CSC, and the Company’s
overall OSH program. The ECSC was formerly established on 5 October 2012. (LA6)
Prioritizing OSH OSH Organization and Policies99
ECSC STRUCTURAL GRAPHIC
President Director(Head of ECSC)
Head of ECSC Division (ECSC Secretary)
Corporate Secretary
Finance Director
Director of Concessions
Director of Human Resources and
General
Director of Technology and Development
Director of Investment Planning
and Risk Management
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
As part of its endeavors to facilitate the achievement of a higher level of awareness concerning OSH and to
formulate a working system involving operational procedures and working instructions related to OSH, both
the committees (CSC and ECSC) meet the Central Committee on a regular basis. These meetings are held
to comprehensively discuss, evaluate and renew operational procedures and working instructions with the
involvement of all members of K3PL-E from Head Office, all SBU, and all company projects.
These regular meetings are also conducted with the involvement of representatives from all sections, including
employee representatives, to foster a high level of understanding and to improve the implementation of the
Company’s OSH program. This is an integral part of the program to internalize OSH culture amongst all levels
of staff and to ensure that they maintain a high level of commitment to conduct their duties in accordance
with OSH principles.
In 2009, PGN has formulated and implemented a roadmap to internalize OSH culture. The roadmap is
described in the diagram below:
Roadmap and Internalization of OSH Culture
Prioritizing OSH Roadmap and Internalization of OSH Culture100
Foundation and Systems Building
Skills and Countinuous Improvement
Achieving and Sustaining Safety Excellence
Safety Behaviour Improvement & Reinforcement Program
Process Safety Improvement and Reinforcement Program
Safety Behav-iour Improve-ment & Reinforce-ment Program
Safety Behaviour Improvement
Process Safety Improvement
Safety Behaviour Reinforcement Program
Process Safety Reinforcement Program
Process Safety Improvement
Safety Behaviour Improvement
Driving all employee throughout PGN strive to improve safety all the time
Integrating all safety program across organiza-tion within safety strategic committee
Jour
ney
Imp
lem
enta
tion
Sta
ges
Reactive Dependent Independent Interdependent
2009 2011 2013 2014
SB
U I
SB
U II
, III
& S
BU
Tra
ns
CULTURAL ROADMAP CHART OSH
The
Rest
of
Org
aniz
atio
n
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The implementation of programs outlined in the OSH roadmap is driven by the shared awareness of all levels
of staff at PGN regarding the recognition of safety and health risks. Divergence of perceptions concerning
these risks create the conditions in which serious accidents may occur. If perceptions regarding these risks are
shared by all employees, the risk of frequent accidents is significantly reduced. This can be demonstrated by
the following diagram:
To foster a shared deception regarding these risks, all employees of PGN should understand the ‘risk pyramid’
defined by the following diagram:
Prioritizing OSH Roadmap and Internalization of OSH Culture101
Accident
Leading Indicator
Lagging Indicator
AccIncident
gBe
emec
BASIC APPROACH TO SAFETYTo Reduce The Variation in Perceptions of Risk
Throughout the Organization
serious accidents
safety sustainability to be achieved tominimize the risk:
- Risk Containment Audit- Observation- Training- implementation of the PO and IK consistent- reward and punishment- continuous internalization
times
uncertainty in the application of safety with the high variation in perceptions of safety risk
Perc
epti
on
of
Ris
k
RISK PYRAMIDS
Fatal Incidents
Majors Incidents
MinorIncidents
First Aid Near-Miss
96% Unsafe Action, 4% Unsafe Condition
Minimize risk
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
The Company has conducted a number of activities
intended to socialize a deeper understanding of OSH
related risks in 2012. The puIDRose of these activities
was to accelerate the institutionalization of safety
excellence among all employees in accordance with
the formulated roadmap. These activities included the
following:
• Management Visits
Senior management visits to strategic business units
have been conducted to motivate and intensify the
implementation of OSH regulations and policies.
Through direct interactions between senior managers
and staff at lower levels, hopefully senior managers
will gather feedback and gain a better understanding
of the position of junior members of staff in matters
related to the implementation of OSH.
• Safety management evaluation audit and
diagnostic assessment (SMK3 and OHSAS
18001:2007)
This activity was conducted by independent third
parties who assessed the implementation of OSH
and endeavors to entrench best practices throughout
PGN’s operations. The specific goals of the activity
were as follows:
• To facilitate the formulation of safety goals
and objectives;
• To identify strengths and concerns, or areas
that need to be improved by the organization or
by individual SBU;
• To identify good practices for sharing among
other elements of the organization or other SBU.
Quick wins (easy to implement practices) and
recommendations for long-term improvements as
an action plan on the basis of the assessment of
OSH practices.
Intensified OSH Socialization in 2012
Prioritizing OSH Intensified OSH Socialization in 2012102
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The results of the audit conducted of a number of working units show that the Safety Excellence Journey can
build PGN’s culture and the transformation from a reactive culture become a dependent culture. However, in a
number of areas, the audit found that responses were still reactive, as shown in the following diagram:
PGN also implemented a Diagnostic Assessment, which was conducted by the National Certification Agency.
This was conducted in order to determine variations in the implementation of OSH in PGN, in order to
eliminate these variations and achieved the SMK3 certification target and OHSAS 18001:2007 in 2013.
• OSH Campaigns
Safety campaigns are conducted on a routine, ongoing basis in order to raise the level of awareness of
all member staff. It is expected that these campaigns will reduce risks related to OSH. These campaigns
take a number of forms, including seminars and informational campaigns involving posters, banners and
other media.
Prioritizing OSH Intensified OSH Socialization in 2012103
Natural instincts
Supervision
Self
Teams
Toward Safety Excellence
Inju
ry R
ates
• Safety by natural istinct• Compliance is the goal• Delegated to Safety Manager• Lack of management involvement
• Management commitment Training• Rute/Procedurs Supervisor control, emphasis, and goals• Condition of employment• Fear/discipline Expectations• Value all people
• Personal knowledge commitment and standards• Internalization Personal value• Care for self Practice, habits• Increased communication• Individual recognition
• Help other conform• Other’s keeper• Networking contributor• Care for others• Organizational pride• Open communication
Reactive Dependent Independent Interdependent
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Prioritizing OSH Intensified OSH Socialization in 2012104
No Name of Training Numbers of Attendance Numbers of Session
1 Safety Management for Manager & Observasi 185 12
2 Risk Containment Audit 184 13
3 Contractor Safety Management 17 1
4 Incident Investigation 22 1
5 Process Safety Management 21 1
6 Process Hazard Analysis 13 1
7 Office Safety 18 1
8 Manual Audit OSH 16 1
9 Internal Audit OSH ( Certification ) 24 1
10 Health Risk Assessment 25 1
11 Basic Fire and Safety Training 81 3
RECAPITULATION OF SAFETY TRAINING IN 2012
Besides conducted at the central Corporate level, training was also provided through individual units and
individual projects.
• OSH Training (LA10)
The Company has facilitated the provision of training intended to raise the competencies of employees
regarding procedures, risks and knowledge audits related to OSH. It is hoped that these activities will support
and accelerate the achievement of established targets in this area. Details of the OSH training provided in
2012 can be seen from the following table:
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Prioritizing OSH Intensified OSH Socialization in 2012105
• K3PL Workshops
These workshops were held throughout 2012 to evaluate the level of achievement of each operational unit
and project towards the achievement of targets set for 2013. Through these workshops, it was expected to
achieve the following targets:
1. The 100% achievement of targets defined in the safety metric;
2. The achievement of OHSAS 18001, SMK3 and PROPER Biru certification in 2013;
3. Improvements level of efficiency in the use of electricity, fossil fuels, gas, water, and paper, with the target
set of a 10% increase in cost efficiency in these areas by 2013.
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Prioritizing OSH Activities within SBU and Projects106
SBU I SBU II SBU III SBU TSJ Project
Safety Journey Safety ProcessManagement Stage 2 (advance)
Safety Journey (PSM I)
Safety Journey Safety Journey Safety Journey Project
Procedure - Socialitation of PO & IK OSH- Protocol arrangement and Coaching MIQA
Socialitation PO & IK OSH
Socialitation PO & IK OSH
Socialitation PO & IK OSH
Socialitation PO & IK OSH
Health Occupational Health and IndustrialHygiene
- HO SBU Office Clinic- Medical Check Up- Catering for workers Offtake Station
Occupational Health and IndustrialHygiene
Monitoring & Socialization field of Occupational Health
- Health Talk - Giving Hepatitis Vaccine- Medical Check Up - Site Health Review
Training Training & coaching for all workers
- Safety Management- RCA & Observasi - Incident Investigation- R & P- EIDR- CSM- PSM (PHA, PSSR, MOC)- AECT & Office Safety- Fire Fighting- First Aid- Difensive Driving Exercise- Safety Training PGAS Solution Outsourching, OB, & Driver- Safety
- First Aid- Defensive Driving Course- Refresment RCA & Observasi
- TOT Observasi & RCA- HUET & SEA SURVIVAL- FIRST AID TRAINING (Sertifikasi Kemenake trans RI)
- Safety Inspektor Migas- OSH Gas Experts- First Aid- Sea Survival - RCA and Observation
Exercise & Ceremony
- Table Top & MERE- SHE Day (Safety @ Home)
- EIDR Drill Sidoarjo Office - EIDR Drill Hosbu Office- MERE MR/S Ngagel and Ngagel Office- SHE Day (Safety @ Home)
- MERE- SHE Day (Safety@ Home)
- Table Top & MERE- SHE Day (Safety @Home)
Table Top & MERE
Activities within SBU and Projects
In addition to the activities and programs initiated and implemented at the initiative of Head Office, 4 SBU
and Project Unit, the Company is also carrying out various activities with the aim of improving the quality of
implementation of OSH.
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SBU I SBU II SBU III SBU TSJ Project
Determination of Membership
Formation of Committee ofOccupational Health and Safety(P2K3)
Establishment and Validation CSC P2K3 By Manpower Surabaya
Formation of Committee ofOccupational Health and Safety(P2K3)
Award - OSH and Zero Accident Award from Labor Agency Jakarta- Appreciation of Zero Accident of Ministry of Labor
Zero Accident Award from Labor Agency Surabaya, November 2012
Awarded granted for 4,451,616 Hours with Zero AccidentIn 2011 fromManpowerprovinceNorth Sumatra.
Prioritizing OSH Activities within SBU and Projects107
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Prioritizing OSH OSH Performance in 2012108
As a result of the high commitment of senior management and the efforts of all member staff to socialize
an increasing awareness of OSH risks, there were significant improvements in a number of indicators related
to OSH in 2012. In 2012, there were no reported incidences of workplace accidents resulting in lost working
time. This is a significant improvement over the situation in 2011.
2012 Safety Metric
The safety metric contains indicators for Head Office and for each SBU in terms of their management
and implementation of OSH. Through this metric, PGN has monitored, evaluated and identified areas for
improvement in the achievement of OSH goals on a monthly basis:
OSH Performance in 2012 (LA7)
Item Head Office SBU Distribution I
SBUDistribution
II
SBUDistribu-
tion III
SBU TSJ Project Information Target
Fatality 0 0 0 0 0 0 0
LTIF 0 0 0 0 0 0 0
Minor accidents 0 3 0 0 0 0 3
First Aid 2 3 8 0 18 4
Near Missed 13 13 14 3 15 0
Vehicle Accident 29 10 5 8 8 1
TSAF 0,97 0,27 0,29 0,42 0,23 0,09 < 0,45
Safe working hours (Hours)
3,618,039 10,067,099 6,266,626 5,724,407 5,440,574 2,523,910 cumulative to Dec’12
Risk containment Audit
% Partisipation 100% 100% 100% 100% 100% 100% Division K3PL perform in the RCA headquarters
100%
% Severity 4/5 - 8.81% 0,00% 1,70% 0,96% 3%
% Fixed Severity 4/5
- 100% 100% 88.89% 100% 0% 100%
Observation
% Partisipation 100% 100% 100% 100% 100% 100% Division K3PL observed in the central office
100%
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Safe Working Hours
Amongst all units and projects, there were no incidences of working time lost as a result of injury in 2012. This
achievement represents the results of extraordinary efforts and cooperation by and between all member staff.
The level of achievement can be seen from the following diagram:
Prioritizing OSH Safe Working Hours109
SBU Distribution I
10.000.000
6.000.000
2.000.000
0
10.067.009
4.000.000
8.000.000
SBU Distribution II
SBU Distribution III
SBU TSJ
6.266.626
5.724.4075.440.574
3.618.039
Head Office Project
2.523.910
SAFE WORKING HOURS 2012
(in hours)
SBU Distribution I
8.000.000
7.000.000
5.000.000
3.000.000
2.000.000
0
6.768.643
4.000.000
6.000.000
SBU Distribution II
SBU Distribution III
SBU TSJ
4.612.734 4.352.499 4.107.097
2.281.601
Head Office Project
182.722
SAFE WORKING HOURS 2011
(in hours)
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Safe Driving Distance
In 2012, no accidents involving operational vehicles occurred at either Head Office or any of SBU. Thus, the
aggregate total of safe driving hours in 2012 can be seen from the following diagram:
Prioritizing OSH Safe Driving Distance110
SAFE DRIVING DISTANCE 2012
SBU Distribution I
5.000.000
3.000.000
1.000.000
0
6.230.808
2.000.000
4.000.000
SBU Distribution II
SBU Distribution III
SBU TSJ
2.890.922
11.209.281
5.989.324
Head Office Project
3.192.140
6.000.000
11.000.000
4.645.232
(in Km)
SAFE DRIVING DISTANCE 2011
SBU Distribution I
5.000.000
3.000.000
1.000.000
0
2.656.215
2.000.000
4.000.000
SBU Distribution II
SBU Distribution III
SBU TSJ
1.395.858
5.701.437
4.497.833
Head Office Project
643.143
6.000.000
2.459.317
(in Km)
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Total Sickness Absence Frequency (TSAF)
This parameter is used to measure the level of workplace health and the total time lost due to employees’
illnesses. PGN has a vested interest in improving workplace health in order to reduce the time lost to sickness
and to increase the overall productivity of employees. The compiled data shows that the total working time
lost as a result of employee sickness was still within the established target of 0.45. In 2012, the total time lost
due to sickness in the Company’s Head Office was significantly lower than in 2011, although still above the
targeted number. The compiled TSAF for 2011 and 2012 can be seen from the following diagrams:
Prioritizing OSH TSAF111
SBU Distribution I
1
0,6
0,2
0
0,52
0,4
0,8
SBU Distribution II
SBU Distribution III
SBU TSJ Head Office Project
1,2
0,5 0,5 0,5 0,5 0,5
0,43
0,20,18
1,23
0,17
0,52
TSAF 2011
Target 2011
TSAF 2011
SBU Distribution I
1
0,6
0,2
0
0,4
0,8
SBU Distribution II
SBU Distribution III
SBU TSJ Head Office Project
1,2
0,45
0,42
0,23
0,97
0,09
0,45 0,45 0,45 0,45 0,45
0,270,29
TSAF 2012
Target 2012
TSAF 2012
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Prioritizing OSH Health Information Programs112
PGN has established and implemented a number of programs to improve the level of occupational health
within its operations. These programs are a manifestation of the Company’s commitment for ensuring
occupational health and the health of its employees. By ensuring occupational health and health in the
workplace, the productivity of PGN’s employees will improve and the volume of working hours lost due to
ill health will be reduced. One measuring which is implemented by PGN to achieve it is create a program to
raise awareness related to coronary illness, cholesterol levels, and similar matters. These program such as
conducting training and informational campaigns to raise awareness of preventative measures that can be
implemented by individual employees and members of the community.
In order to raise the level of awareness of the employees related to health risks and their impact on the
Company’s operations, PGN has also formulated a number of programs through the Occupational Health
Roadmap, as presented in the following diagram:
Health Information Programs (LA8)
HEALTH CHART ROADMAP
Occupational Health Setting Program
Sertifi kasi SMK3 & OHSAS
Hazard Identifi cation & Risk Asessment (Health)
Meningkatnya status kesehatan pekerja, medical
cost reduction,
penurunan absenteeism, data base kesehatan update
2012 2013 2014
Awarness
Job related medical exam
Pelatihan, sanitasi & higienis,
ergonomik, MERP, health
surveillance, mobil serba guna,hearing conservation program,respiratory protection program
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Prioritizing OSH OSH Awards and Recognition in 2012113
For its achievements in the area of OSH, PGN has received numerous awards and other tokens of recognition
by independent third parties. These awards and tokens of recognition have been granted for its successful
implementation of measures to ensure a zero accident workplace and for other achievements related to
occupational health. The awards included the following:
Agency for Labor and Transmigration,
North Sumatra, granted in May 2012.
(SBU III)
Award for OSH
Compliance granted by
the Jakarta provincial
government in March
2012. (SBU I)
Award for 5,869,687 accident free hours
until 31 October 2012 by the Agency of
Labor, Surabaya, granted in November
2012. (SBU II)
Award for 6,839,951
accident free hours granted
by the Jakarta provincial
government in March
2012. (SBU I)
OSH Awards and Recognition in 2012
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Community Members Life’s12
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Improving the Quality of Life of Community
Community Member’s Life Improving Community Member’s Life Quality116
PGN is fully committed to the efforts for improving the quality
of community life and it is materialized through various
programs in the social community field which is commonly
referred to as “Corporate Social Responsibility” (CSR).
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
PGN is fully committed to the efforts for improving the quality of life of community, particularly the community
who live around the operational areas. The commitment is materialized through the implementation of
various programs in the social community field in the form of what commonly referred to as “Corporate Social
Responsibility” (CSR), consisting of the Environment Development (Bina Lingkungan/BL) and the Social and
Environmental Responsibility (Tanggung Jawab Sosial dan Lingkungan/TJSL) programs.
PGN has been implementing CSR programs in order to materialize the Company’s mission of “developing
with the community”, through balanced and harmonious development of the economic (profit), community
(people) and environmental (planet) performance. PGN has designed the implementation of CSR programs so
as to reach various aspects of the stakeholders’ main interests, so that they are able to provide various benefits
in line with the company’s development. The various benefits of the CSR programs implemented by PGN
among other things are as follows: (SO1)
• Providing positive contributions for the empowerment of the surrounding community and environment,
particularly in PGN’s operational areas.
• Improving the public’s understanding of PGN through information in social community activities.
• Supporting the uninterrupted implementation of PGN’s operations with the support from the Units/Areas
Rayon in assisting the implementation of CSR programs.
• Developing the community’s empathy for PGN.
• Creating the PGN’s positive image in the public eye.
• Increasing the company’s value through the establishment of reputation.
In the implementation process of its CSR programs,
PGN adheres to the 5 Principal of Commitments that
have been formulated through the “PGN Share”
statement, as follows:
Contributing to community WELFARE improvements;
Creating HARMONIOUS relationships with
stakeholders;
The program contribution meant for CHARITY;
RESPONSIVE to the community needs;
EMPATHIC to the issues faced by the community.
Community Member’s Life Improving Community Member’s Life Quality117
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The CSR activities implemented by PGN in 2012
include environmental conservation programs,
particularly those related to carbon (CO2) emission
mitigation initiative. Aid programs related to
education, health, worship facilities, development of
public facilities and infrastructure as well as natural
disaster relief have also been implemented.
Environmental Conservation
Through CSR Programs, PGN has implemented
several activities in 2012 aimed at environmental
conservation, the funds of which were in the amount
of IDR 9.49 billion. The activities implemented include
the following:
• Planting of Mangroves in the Forest Area of
Sedyatmo Toll Road, Muara Angke Kapuk,
Special Capital Region of Jakarta, Karawang,
Cirebon, Coast of Medan City, Surabaya,
Sidoarjo, Pasuruan and other cities, with a total
of approximately 41 thousand mangrove trees,
and fruit trees as well as other plants with a total
of 69 thousand trees.
The activities were implemented in cooperation
with local universities such as IPB, USU, UNBRAW
and ITS, and also the Mangrove House
Consortium (Konsorsium Rumah Mangrove).
• IPB’s Reforestation Program for the Villages
Surrounding the Campus (Program Penghijauan
Desa Lingkar Kampus IPB). In cooperation with
LPPM IPB, by engaging the communities around
the campus to increase the awareness of
protecting and preserving the nature as well as
biodiversity, through the cultivation of
Indonesian endemic fruit plants.
• Tree Planting Program in the Sentul Forest Area
of ECO-EDU Tourism Forest of approximately
460,000 trees. PT. Perusahaan Gas Negara
(Persero) Tbk. This program constitutes a
form of synergy cooperation between PGN and
Perum Perhutani in the context of replantation
and reforestation Program to accelerate the
effort of improving the quality and productivity
of forest and environmental resources, as a
buffer zone and an education and ecology-based
tourism area.
• The continuation of integrated waste
management, namely by processing waste
into compost, in accordance with the policy
of the Ministry of Environment. This program
has commenced since 2011 in 5 cities (Batam,
Palembang, Lampung, Bogor, and Surabaya)
which has been giving positive impact in general
on the stakeholders. For the community, this
program has opened job opportunities. For the
Environment, it has reduced the flow of waste
to the final disposal site (tempat pembuangan
akhir/TPA). For the State, it helps in achieving the
targeted national waste reduction of
7% annually.
The construction of Waste Disposal Site and
Reforestation Activity in Offtake Rawamaju, Bekasi.
The aforementioned various activities constitute
the actual manifestation of PGN’s contribution to
the efforts for preserving nature which will result in
positive impacts on the environment, dealing with
global warming and climate change. It is expected
that the activities will inspire the community and
particularly the employees to become more aware of
the importance of clean and sustainable environment.
Realization of Activities
Community Member’s Life Realization of Activities118
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Education Sector
In the education sector, PGN has been contributing
to the increase in the reading interest, motivation and
nationalism of the children, through the publication
of the Comic Book, Archipelago Legend Series (Seri
Legenda Nusantara) of 33 titles (representing 33
provinces), in cooperation with Balai Pustaka. The
Comic Books were printed in a total of 3,000 copies
and distributed to schools, particularly those located
around the operational areas. This program has been
recorded as a world record by MURI as the Initiator
of Seri Legenda Nusantara Comic Books with the
Highest Number of Copies.
In addition to the above, PGN has also made
contributions to the education sector, namely:
• Sending Young Teachers to 25 Elementary
Schools in remote areas (among other things,
Musi Banyuasin, Muara Enim, Tulang Bawang
Barat and Gresik), as well as giving assistance to
the recruitment partner program, in cooperation
with Yayasan Indonesia Mengajar.
• Competence education for 110 teachers from
55 Early Childhood Education (PAUD) in PGN’s
operational areas in cooperation with Ancora
Foundation.
• Building several units of Community Library
(Taman Baca Masyarakat) in various areas, in
cooperation with WIKA and Balai Pustaka.
• Building and renovating schools as well as other
educational facilities around PGN’s operational
areas in cooperation with WIKA and PP.
• Granting scholarships to 1,050 university students
in 14 State Universities in Indonesia.
Granting educational funds assistance for
2,400 students of the Elementary Schools, Junior
High Schools, and Senior High Schools around
the operational areas
Health Sector (EC8)
During 2012, the activities which have been
implemented in the health sector assistance program
include the following:
• Improvement of health services for the
community, particularly those located around
the operational areas by using PGN’s health cars
(mobil sehat), in cooperation with Rumah
Zakat. In the period of 2012, Mobil Sehat PGN
have provided health services for 36,212
beneficiaries within PGN’s operational area.
The services are given in the forms of pregnancy
examination during pregnancy and the provision
of supplements for pregnant women,
contraceptives services, general health and basic
dental services, toddlers growth and
Community Member’s Life Education Sector119
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Community Member’s Life Health Sector120
development examination and the provision of
supplementary food for children and toddlers.
• Provision of health services through the
establishment of Healthy House (Rumah
Sehat) in Sidoarjo. This program is targeted
on the people who need it, particularly in
Sidoarjo and the surrounding areas, in order
to ensure that they obtain health services
properly without any charges, and therefore, the
poor people can maintain and improve the
quality of their health physically, mentally, and
environmentally in order that they become more
productive economically and socially. The Rumah
Sehat was built with two floors in an area of
863 m2 complete with a Polyclinic, Blood
Laboratory, Doctor and Emergency Rooms,
Medical Record Room, Laundry Room, Praying
Room (Musholla), Toilet, Meeting Room,
Management Room, Waiting Room, Nurse
Room, Equipment Room, Physiotherapy Room,
and Inpatient Room. 30 medical and supporting
personnel, by empowering the local people, have
been prepared to provide services for
the community.
• The establishment of PGN Healthy Holiday
Travel Coordination Post (Posko Mudik Sehat
PGN), providing services for the community
during the 2012 Iebaran holiday travel. The
coordination post’s services include the
following: Health Services, health examination
by general practitioners and the provision of
medicines as well as first aid in traffic accidents
for minor injuries which can be conducted in the
coordination post, as well as the distribution
of health supplements; Provision of
entertainment facilities such as LCD television,
internet facilities and music, electronic games
and giving away door prizes, as well as free
massage service for the holiday travelers.
• Provision of other health facilities, such as the
donation of one ambulance unit for the
community in Tambak Village, Lekok District,
Pasuruan; the aid in the form of one ambulance
unit for the Indonesian Red Cross (PMI) of
Palembang; the aid for the construction of
Inpatient Community Health Centers (Puskesma
Rawat Inap) in Way Mili and Marga Tiga, as well
as the renovation of the community health
center in Sukadana, East Lampung.
Jakarta 7,441 people
Medan 7,659 people
Tangerang 6,181 people
Surabaya 5,001 people
Lampung 5,029 people
Palembang 4,901 people
Total 36,212 people
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Public Infrastructure Program (EC8)
In the field of Public Infrastructure in 2012, PGN has
implemented the following activities:
• Donation of 2 units of genset (gas engine) for
supporting electricity generation in Pemping
Island in order to help fulfilling the need of
electricity of the community in Belakang Padang
District, Batam City.
• Provision of assistance for the fulfillment of the
need for electricity to the community in the form
of people’s independent electricity (listrik mandiri
rakyat/limar) program in Way Kanan and Pacitan
in the form of switch panel consisting of LED
light, terminal connector, low battery indicator,
power cable and accumulator, as well as training
and assistance.
• Donation of 3 Arm Roll Trucks in order to
support the sanitation facility in Bandar
Lampung city.
• Construction of community hall in Marga Tiga
District, East Lampung.
• Renovation of suspension bridge and road in
Pagardewa Village, South Sumatra.
• Construction and renovation of the village office
and hall, school, gate, mosque, as well as
Community Health Center in Sriminosari Village,
East Lampung.
• The delivery of installation for processing
sea water into clean water and drinking water
in Panggang Island of Kepulauan Seribu to the
local community, to be subsequently managed
by the community through the sub-district PKK.
Worship Facilities Program
This program is aiming at improving the
implementation of religious activities. In 2012, PGN
has granted aid for the renovation and construction
of worship facilities and other supporting facilities
as well as the aid for religious activities. In addition
to that, PGN has also given donations to oIDRhans,
mass wedding activity and other religious activities.
Natural Disaster Relief
In 2012, PGN provided assistance for natural
disaster victims, as a manifestation of PGN’s care
and empathy for those affected by natural disasters,
namely:
• Emergency response relief for flood in Banten
area (Tangerang and Cilegon) and the Special
Capital Region of Jakarta.
• Disaster relief for the flood and tornado in Garut,
West Java.
• Disaster relief for the flood and tornado in Garut,
West Java.
• Assistance in the form of 500 packages of nine
essential commodities (sembako) for the
landslide victims in Bali.
• Assistance for dealing with the drought in
East Java.
• Assistance in the form of 9 tons of rice for the
victims of fire in Karet Tengsin and
Bendungan Hilir, the Special Capital Region of
Jakarta. Aid in the form of coordination post and
public kitchen for earthquake victims in
Sukabumi, West Java.
Community Member’s Life Public Infrastructure Program121
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Community Member’s Life Testimonials Governor of Lampung122
THE GOVERNOR OF LAMPUNG TESTIMONIAL
PGN as State-owned Company, which one of it’s business areas located in Lampung has proven it’s presence as a company that actively engaged in our region’s development.
The realizations manifested by PGN are increaasing the society welfare, reforming environment and improving the society’s life qualty in health, environment, education as well as facility and public infrasturcture sectors.
On behalf of the Governmnet of Lampung Province, we would like to thank you profusely to PGN in supporting the society welfare of Lampung.
Governor of Lampung,
Sjachroedin Z.P
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Community Member’s Life Testimonials Anies Baswedan123
Since December 2011, PGN has been present to be the partner of ‘Indonesia Mengajar’. Support from PGN develops the confidence that social movement in Indonesia is able to stand out independently and move along with local companies. PGN presence as the first State-owned Company who beliefs with ‘Indonesia Mengajar’ approach also spreads the spirit to other business institutions to participate and drive the social and economy progress through education.
PGN’s contribution through the movement of ‘Indonesi Mengajar’ by presenting Young teacher to assist elementary schools and society in local area shows significant impact. A real contribution for the improvement of education in Indonesia. As matter of fact, every welfare and education of the nation written on the Constitution 1945 Preamble is a promise that must be paid to every citizen of Indonesia, even to the remote areas of the Country.
Anies Baswedan
ANIES BASWEDAN TESTIMONIAL
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13 Increased Economic Value
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PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Increased Economic Value
Increased Economic Value Increased Economic Value126
The sustained growth of the national economy has resulted in overall increases in market
demand. At the macroeconomic level, this has also resulted in
increases of supply to meet this increased demand. As a result, all industrial sectors are increasing
their volume of production, which in turn is increasing their need for
energy fuel sources.
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Distribution of Economic Value
With the increase demand for fuel for energy, particularly natural gas, there is an urgent need to ensure
that there is no gap between supply and demand for this commodity (gas balance). PGN plays a vital role in
ensuring that gas supplies are sufficient to meet demand. These conditions result in increases in the volume
of gas that the Company sells, which in turn results in increased revenues and net profits for the Company.
Increases in the Company’s net profits will have significant benefits for the nation, with increased contributions
to state revenues through taxes and the payment of dividends, and to members of the community through
the Company’s Corporate Social Responsibility and Environmental Management Programs (PKBL). Thus, these
conditions will result in increases in the economic value generated for all stakeholders.
The following table contains an overview of the Company’s economic performance, including details of the
economic value generated for stakeholders, including business partners, employees, shareholders, creditors,
the government, and members of the community. The table also depicts the added value created by PGN for
the national economy through a synergistic snowball effect involving stakeholder groups:
Increased Economic Value Distribution of Economic Value127
DIRECT ECONOMIC VALUE GENERATED AND DISTRIBUTED (EC1)
(USD) 2012 2011
DIRECT ECONOMIC VALUE GENERATED
Revenues: 2,576,493,037 2,230,397,076
Interest Income 27,824,136 35,107,116
Gain (Loss) on foreign exchange 49,757,553 (26,249,402)
Other income 29,095,359 8,689,785
Total 2,683,170,085 2,247,944,576
ECONOMIC VALUE DISTRIBUTED
Operating Costs 1,448,115,834 1,213,513,320
Employee wages and benefits:
- Operation department 41,392,899 45,314,282
- Administration department 83,087,327 82,926,763
Total employee wages and benefits 124,480,226 128,241,045
Payment to providers of capital:
- Dividend payment 327,730,116 450,058,318
- Interest payment 21,576,672 27,709,566
Total payment to providers of capital: 349,306,788 477,767,884
Payment to government 220,537,637 246,339,311
Community investments 736,970 852,641
Total economic value distributed 2,143,177,455 2,066,714,201
Economic value retained 539,992,630 181,230,375
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
From table besides, it can be seen that the higher the total value of revenues received by PGN, the greater is
the economic value generated for stakeholder groups. Similarly, the higher the total value of profits generated
by PGN, the greater is the total value of funds available for community empowerment programs. Thus,
stakeholder groups have a vested interest in involvement in positive relationships with the management of
PGN as they benefit from the sustainable growth achieved by the Company.
Contributions to the State
Each year, PGN contributes the state revenues through its payment of tax and dividends, the value of which is
determined by shareholders at the AGSM.
The dividend payout ratio for dividends paid to shareholders ranges from approximately 50%-60% of the total
value of net profits in the current year. In 2012, the total value of dividends paid to the state amounted to
IDR1,709 billion, an increase from the figure of IDR2,142 billion paid out in 2011. In addition to the payment
of dividends, PGN also contributes to state revenues through its payment of taxes. In 2012, the total value of
taxes paid by PGN to the state amounted to IDR2,133 billion. In addition to dividends, PGN contribute to the
state through taxes and dues payment BPH Migas. Contribution to the state in the form of tax payments in
2012 amounted to USD2133 billion, while in 2011 amounted to IDR2,234 billion. Dues BPH Migas in 2012
amounted to IDR62 billion and in 2011 amounted to IDR32 billion. Thus, the total contribution to the state
PGN during the year 2012 amounted to USD3,903 billion, while in 2011 amounted to USD4,407 billion.
At this point, PGN does not receive direct financial assistance from the government. The only form of
assistance provided is in the form of tax relief for import duties for specific capital goods required to facilitate
the development of the Company’s business. (EC4)
Increased Economic Value Contributions to the State128
Dividend
Tax
OVERVIEW CONTRIBUTION TO THE STATE PGN (IDR BILLION)
2012 2011
0.00
500.00
1.000.00
1.500.00
2.000.00
2.500.00
1.708,87
2.233,802.132,60
2.141,92
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Contributions to Regional Economic Growth
PGN’s activities also make a significant contribution
to the promotion of regional economic growth,
particularly through the availability of gas from the
pipeline gas distribution and transmission network
under the Company’s management.
The ready availability of natural gas in a particular
region may result in increased investor interest in
the establishment of new industrial zones in that
region. As a result, this will stimulate growth in a
number of sectors in that region, including through
the development of housing facilities, shopping
facilities, hotels, and other facilities that support
the development of the new economic zone. New
economic zones will have a significantly positive
effect on the economy of the region in which they
are located, providing employment opportunities,
facilitating the exploitation of natural resources as
inputs for industrial activities, increasing regional tax
revenues, and providing other benefits. All of these
activities will generate direct and indirect benefits for
the region in question. (EC9)
Relations with Business Partners (EC6)
PGN has established both long and short-term
relationships with suppliers of goods and services
in order to support its operational activities. The
supply of these goods and services involves PGN’s
business partners, who are required to fulfill their
roles efficiently, effectively, openly, competitively,
transparently, accountably, and in a timely,
non-discriminatory, responsible manner. PGN requires
its business partners to provide goods and services
of the appropriate quality, with high levels of service,
and in compliance with open, mutually beneficial
business ethics.
The procurement process implemented in
cooperation with business partners involves four
specific stages, as follows: Procurement Specification,
Procurement Method, Contract Agreement, and
Contract Management.
PGN also conducts regular periodic evaluations
in order to ensure the contractual quality of the
partnership it has entered into with these business
partners for the supply of goods and services.
One aspect of these relationships that is evaluated
includes the level of compliance of business partners
with the terms of contracts involving substantial
sums (to a value in excess of IDR 100 billion) and of
compliance with labor regulations and human rights.
In cases of contracts of a lower value, (less than IDR
500 million), in order to achieve a higher level of cost
efficiency, PGN prioritizes the selection of
local partners.
In 2012, PGN conducted a periodic evaluation
of all business partners included in its vendor
database. This evaluation was facilitated through the
Company’s e-procurement system.
In the period covered by this report, PGN entered into
a significant investment contract for the development
of a Floating Storage Regasification Unit/FSRU, which
is intended to facilitate the expansion of the Com-
pany’s business. All stipulations and requirements
related to procurement contracts of significant value,
such as compliance with human rights and other
issues, have been addressed through the contract
between the Company and its business partner.
Partnership Program
PGN implements its Partnership Program in order to
facilitate the growth of small to medium enterprises
and to enable them to achieve independence
and autonomy. This program is implemented as a
manifestation of the Company’s commitment to
distributing the economic value derived from the
Company’s net profits and to achieve compliance
Increased Economic Value Contributions to Regional Economic Growth129
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
with government regulation. This program is an
integral component of the Company’s Partnership
and Environmental Management Program (PKBL),
the goal of which is to facilitate economic growth
amongst the community, particularly amongst
communities in areas surrounding PGN’s operations,
in order to facilitate the achievement of autonomy.
This program is also in accordance with government
programs to reduce poverty and to fulfill its
commitment to the achievement of millennium
development goals (MDG’s), with one of these goals
mandating the global eradication of poverty.
PGN utilizes its Partnership Program Funds for the
followingpurposes:
• The provision of soft loans for business
development;
• The provision of grants to develop business skills
through the provision of training and education
and to facilitate participation in marketing
and promotion endeavors by small and
medium enterprises.
These funds are channeled through three main
means, as follows:
• Direct channeling implemented by PGN;
• Channeling in cooperation with other state
owned enterprises;
• Channeling in cooperation with other competent
third parties of proven integrity.
In the implementation of the Partnership Program in
2012, PGN established a number of small to medium
enterprise clusters to facilitate guidance, coordination
and communication with its community partners, and
to enable better monitoring of the program. These
clusters include the following:
• Animal husbandry cluster in Caringin, Bogor,
West Java;
• Weaving cluster in Garut, West Java. Through
this cluster, PGN’s Guided Weaving Village
was established in cooperation with the Cita
Tenun Indonesia organization as a means to
preserve handicraft traditions, to develop business
opportunities, and to increase the sales value
of output;
• Embroidery cluster in Bukittinggi, West
Sumatra, which was established to develop
business opportunities and to increase the sales
value of output.
In order to increase levels of production, and to
improve the quality of output and of technical,
administrative and marketing capacities, PGN has
provided specific guidance to its community partners,
including technical facilitation, financial management
training, English language training, marketing
training, as well as support for participation in local,
national and international trade fairs.
In addition, PGN has also implemented a number of
other programs to support the development of its
community partners, with these programs involving
the development of management and financial skills,
marketing and motivation, animal husbandry skills
for the breeding of cattle and goats, rice planting
techniques, cane growing techniques, and design
and coloring skills for weaving.
PGN has also conducted a number of activities
to facilitate the marketing of the outputs of its
community partners. These activities include support
for participation in the following trade events: Gelar
Karya PKBL BUMN, Inacraft, Indonesia Fashion &
Craft 2012, Indonesian Product Expo in Jordan, Trade
Expo Indonesia, Pameran Spring Cultural Event Tokyo
& Trade Tourism, New York Gift Show, a Fashion
Show as part of the United Nations ladies program in
New York, and a number of others.
Increased Economic Value Partnership Program130
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Increased Economic Value Partnership Program131
In addition to the above, PGN has also actively
strived to ensure stability in the supply and price of
agricultural inputs through cooperation between
the Company’s Partnership Program and a number
of other state owned enterprises operating in the
field of food production and supply, including the
following:
• Support for the Corporate Based Increased Food
Productivity Movement Program (GP3K)
conducted in cooperation with PT Pertani
(Persero) and PT Sang Hyang Seri (Persero) to
improve rice production productivity;
• The provision of funds for cane farmers in East
Java to ensure the stability of production and the
stability of sugar prices through cooperation with
PTPN X (Persero) and PTPN XI (Persero);
• Increases in the national production of salt
through the provision of loans to salt producers,
in cooperation with PT Garam (Persero).
The total value of Partnership Program funds
channeled by PGN in 2012 was IDR 289.73 billion.
This is an increase of 53.89% over the value of funds
disbursed in 2011, when the total value stood at
IDR 188.27 billion. The level of effectiveness in the
disbursement of funds was 96.58%, compared to the
figure of 96% achieved in 2011.
In 2012, funds were disbursed to a total of 45,181
business partners, representing an increase of
39.79% over the figure of 32,321 business partners
in 2011. The nature of the businesses operated
by community partners varied, with major groups
including animal husbandry, farming, market
gardening and handicrafts.
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Increased Economic Value Partnership Program132
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
PGN-Fostered Garut Weaving Village
Increased Economic Value PGN-Fostered Garut Weaving Village133
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Initially, Garut was known as a center for the
manufacturing of sarongs, produced by Pabrik Tenun
Garut. As time went by, Garut’s woven sarongs could
not compete with batik sarongs from other regions
due to the changes in technology and fashion. The
inability to compete in the market had led to the
continuous decline in Garut’s weaving business, as a
result, weavers could only fulfill the demand for white
basic woven fabrics.
As a manifestation of the concern for the
empowerment of the community’s economy and the
nation’s cultural heritage, PGN has been cooperating
with Cita Tenun Indonesia (CTI), through the
partnership and environment development program
since December 2010 up to the present day, to
conduct community development by organizing
Training and Development Program for Garut
Weavers located in Panawuan Village.
With this training, the weavers can produce silk
woven fabrics a la Garut which is now famous for
its weaving technique, varied motif and texture. In
addition to improving the weaving quality through
the training program, PGN has also provided
assistance in the form of weaving equipment,
improvement of the workshop and construction of
a gallery for the weavers, renovation of a praying
room (musholla) and village gate. The development
and training have helped the weavers to continue
innovating in creating fashion products according to
the development of time.
With the various forms of assistance, Panawuan
Village has become a PGN-fostered Weaving Village.
Inaugurated by the Minister of Tourism and Creative
Economy, Mari Elka Pangestu, who designated it as a
Creative Zone on June 27, 2012.
In the marketing of its products, the trained
craftsmen have participated in various exhibitions,
aimed at introducing Garut’s unique woven fabrics,
both domestically, such as the ASEAN Fair 2011
in Bali, InaCraft 2012 in JCC Senayan and MOIE
Summer Party 2012 in Kemang, Jakarta, and in
several countries, such as the Ladies Luncheon F4D in
New York, Unites States of America, Spring Cultural
Event in Tokyo, Japan, and Trade, Tourism, and
Investment in Beijing, China.
Increased Economic Value PGN-Fostered Garut Weaving Village134
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
The Company’s Products and Services
As a company, PGN operates in the field of the transmission and distribution of natural gas
Increased Economic Value The Company’s Products and Services135
Distribution of Natural Gas
PGN implement sales to end users through its
pipeline distribution network, receiving a margin from
sales. In order to improve the level of effectiveness
and efficiency of the distribution of natural gas, PGN
has established a number of SBU, including SBU
DW (Distribution Region) I Western Java, SBU DW II
Eastern Java and SBU DW III North Sumatra.
The level of pressure of the gas in the pipeline
distribution network is determined through the
stipulations of contracts regarding the distribution
of gas. The primary components of the natural gas
are evaluated periodically in order to ensure that
the composition of the natural gas accords with
regulatory requirements and with the stipulations of
the contracts entered into regarding the distribution
of this gas. PGN’s primary product is natural gas,
which is distributed to end users through the
pipeline transmission and distribution network. The
distribution of this gas does not involve packaging.
(EN27)
PGN’s customers fall into three main categories,
these being residential users, commercial users,
and industrial uses. Approximately 96.8% of the
Company’s customers consist of residential end users,
with the remaining 3.2% consisting of commercial
and industrial end-users. At present, PGN controls
approximately 90% of the market for the distribution
and transmission of gas within Indonesia. (2.7)
More comprehensive information regarding the
Company’s products and services can be found in the
Company’s Annual Report.
Transmission of Natural Gas
The transmission of natural gas involves the
transportation of this gas from the field operated
by the producer of gas through the high-pressure
pipeline transmission network to the point where it
is delivered to the end users. In the conduct of this
business, PGN operates as transporter, collecting
a toll-fee for the provision of its services. The legal
basis for transactions related to the transmission of
gas includes PGN’s Gas Transportation Agreement
(GTA) with shippers for periods of 10 to 20 years.
To implement this business, PGN has established
a Strategic Business Unit (SBU), the Sumatra-Java
Transmission SBU.
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Business Development
PGN strives to develop its business in a planned,
structured sustainable manner in order to facilitate
the maximum possible level of national and
regional economic growth. With this commitment,
PGN continuously strives to implement sound
plans of a number of years duration to expand
its pipeline distribution network and other modes
of transportation in order to improve the level of
reliability of gas supplies to end users through
technical improvements and other measures to
improve the supply of natural gas.
Primary measures to expand the Company’s business
include the development of the FSRU in Lampung,
the development of a new distribution area in
Lampung, and the expansion of distribution networks
in current areas of distribution. The development
of pipes in current areas of distribution include
the construction of the Panaran-Tanjung Uncang
pipeline in Batam, the construction of Ringline 1 and
Ringline 2 in West Java, and the revitalization of the
pipeline distribution network in Medan. All project
units are also implementing a restructuring program
to improve the level of effectiveness of investment
programs, with the establishment of Projects I, II and
III to facilitate construction activities.
The FSRU located in Lampung will be integrated with
the existing network in South Sumatra - West Java
(SSWJ) (SSWJ I: Pagardewa-Bojonegara and SSWJ II:
Grisik-Muara Bekasi) and the distribution network in
West Java.
These development projects will ensure the supply
of gas through the piped distribution network.
The expansion of the pipeline distribution network
is being implemented in anticipation of market
developments, both in new distribution areas
in Lampung and in existing areas in West Java
(customer attachments). The significant expansion
in the market following the development of the
SSWJ pipeline in 2007 provides a basis for further
developments in the distribution networks.
The capacities and qualities of the network in West
Java have been significantly improved with the
development of primary pipelines, as follows:
• Bojonegara to Bitung, to optimize the allocation
of gas from the Bojonegara Station.
• Ring Line 1 (Muara Karang-Muara Bekasi), to
support the distribution of gas to the east of the
West Java Pipeline.
• Ring Line 2 (Bitung-Cimanggis), to optimize the
supply of gas from the Bojonegara Station to
end-users in Bogor and surrounding areas.
The development of a highly reliable pipe distribution
network is vital to achieve the integration of the
piped network in West Java, which represents PGN’s
largest market.
The development of the primary pipeline is also
being conducted in a number of other existing areas,
including the following:
• Eastern Java: The development of new customer
attachments is intended to facilitate increases in
the sales of gas on the basis of increased supply
from a number of new traders;
• Batam: The development of the Panaran-Tanjung
Uncang pipeline is intended to facilitate increases
in the sale of gas and the development of new
markets in the Tanjung Uncang area;
• Medan: The revitalization of the network is
required to strengthen the existing network,
which is showing signs of age. This is intended to
improve the reliability of the network in
the context of planned new supplies with the
development of the Arun-Belawan pipeline.
Increased Economic Value Business Development136
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Increased Economic Value Business Development137
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About Perusahaan Gas Negara14
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
About PGN Cultutral Values140
Cultural Values
PGN’S Corporate Values (ProCISE–5)
ProfessionalismAlways giving the best results by improving relevant
competencies and being responsible for all
decisions taken.
Continuous ImprovementCommitted to do better through innovation and
adaptable to change.
IntegritySincere, open mind and positive thinking toward
oneself; discipline and consistent in mind, word
and deed.
SafetyAlways prioritizing health and safety at work, as well
as caring for natural environment and social
community.
Excellent ServicePrioritizing satisfaction for both to internal and
external customers by giving excellent service.
Corporate Culture constitutes the values and philosophy which have been agreed upon and believed by All Parties at PGN as the basis and reference for PGN for achieving the objectives. PGN defines Corporate Culture in five values which are abbreviated as ProCISE and elaborated in 10 Key Conducts of the Company.
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
To be a world class energy company in natural gas
utilization
PGN’s Vision is stipulated based on the Decree of the Board of PT Perusahaan Gas Negara (Persero) Tbk No: 015700.K/HM.03/UT/2011 issued on 20 September 2011
Vision
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
To enhance the value of the organization for
stakeholders:
• Strengthening the core business in natural gas
transportation and trading
• Developing a gas manufacturing business
• Developing an operational, maintenance and
engineering business associated with oil and gas
industries
• Profiting from the Company’s resources and assests
by developing other business
Mission
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Dissemination of and Efforts to Achieve the Company’s Vision and Mission
About PGN Dissemination of and Efforts to Achieve the Company’s Vision and Mission
143
In order to ensure the realization of the Company’s vision and mission, we periodicly engage in a socialization
process involving employees and staffs at all levels. This process of socialization involves regular socialization of
the Company’s vision, mission and values to ensure PGN’s vision achievement for 2020.
The internalization of PGN vision, mission and values is implemented through a top-down approached in
which senior management provides direct input to agents of change, who are then responsible for cascading
the information down through all levels of staff. During this process, we simultaneously conduct a process to
gather and assess the ideas and proposal from junior levels staffs input for the development of strategies to
achieve PGN vision and mission.
Just as importantly, the vision, mission and culture of PGN is inculcated at a number of point during the
staff’s career, starting from the new staff are recruited from the Company, during work evaluation and
preceding promotion or transfer to a new position. These steps are intended to facilitate the internalization
and implementation of PGN’s business strategy and policies by all staff. A full comprehension of these matters
by all staff members is vital to the achievement of PGN’s vision for 2020 and for ensuring the on going
sustaiability of the company. (4.8)
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
About PGN Dissemination of and Efforts to Achieve the Company’s Vision and Mission
144
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
About PGN About PGN145
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
About PGN
PGN originated from Firm L.J.N. Eindhoven & Co., a privately-owned Dutch gas company established in 1859.
It was the first introduced the use of town gas produced from coal to Indonesian. In 1958, the firma was
nationalized and in 1965 it became the Perusahaan Negara Gas or PN Gas (Gas National Company).
Currently, PT Perusahaan Gas Negara (Persero) Tbk., abbreviated as PGN or PGAS, is a State-Owned Enterprises
(BUMN) that operates in the field of gas transmission and distribution from the area of gas producer (gas
well located in oil and gas area) to the area of commercial, industrial and households customers. To facilitate
the gas distribution, the Company manages a distribution pipeline from the areas in which the gas is
produced either to the area of commercial and end-user customer or to storage stations to be transported
to other market locations by gas freighter. At the end of the period covered in this report, PGN controlled
by 90% of gas transmission and distribution market share in Indonesia, with industrial clients accounting for
approximately by 97% of the Company’s revenues, with the reminder being accounted for commercial and
household customers. (2.2, 2.7)
About PGN About PGN146
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
1859
2008 2009
2007
1965
2011 2012
1994
PGAS
19982003
PT Perusahaan Gas Negara (Persero) Tbk, more usually referred to as PGN, or by its stock code at the Indonesia Stock Exchange of ‘PGAS’, is a state-owned company that has been leading the way in Indonesia’s gas industry since 1859, when it went by the name of Firma L.I. Enthoven & Co.
On 13 May 1965, pursuant to Government Regulation No. 19/1965 the Company was designated a state company known as Perusahaan Gas Negara (PGN). The subsequent issuance of Government Regulation No. 2 year 1984 changed the Company’s legal status from State Company(PN) to Public Corporation (”Perum”).
Company’s change of status was accompanied by a broadening of the scope of its business to incorporate not just natural gas distribution but transmission as well, for which PGN functionedas a transporter.
On 11 March 2007, the Company succesfully conducted a Gas-In (�rst gas chanelling),which was followed by the commercialization of gas from Pertamina’s Pagardewa gas�eld through the South Sumatera-West Java pipeline to the Company’s cusomer in Cilegon (PT Krakatau Daya Listrik).
The Company’s shares were listed on the JakartaStock Exchange and the Surabaya Stock Exchangeon 15 December 2003, with the stock code PGAS.
In 1998 PGN successfully �nishedTransmission Pipeline Grissik- Dorsal followed by the establishment of a subsidiary in the transmission line, PT Transportasi Gas Indonesia.
Brief History
Pursuant to the provisions of Law No. 40year 2007 regarding Limited LiabilityCompanies, and in connection with a stock split, the Company’s Articles of Associationunderwent their most recent amendment by Deed No. 50 dated 13 June 2008 jo. Deed No. 8 dated 2 Jully 2008.
To optimize the Company’s accumulated strengths and competencies by taking advantage of oppurtunities to develop the business and realize PGN’s vision, the Company established another subsidiary, PT PGAS Solution.
In 2011 PGN established two subsidiaries thateach engaged in the upstream and downstreamnatural gas business. The Subsidiary in the upstream is PT Saka Energy Indonesia (SAKA) while the subsidiary in the downstream is Gagas Energy PT Indonesia (GAGAS). PGN’s Ownership in both subsidiary is 99% and 1% ownership by PT PGAS Solution.
PGN established subsidiariesPT PGN LNG Indonesia (PGN LNG).The scope of PGN LNG business includesprocuring LNG supply, LNG and natural gas transportation activity,inventory activities includesregasi�cation to the buyer, as well asperforming other business activities.
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
1859
2008 2009
2007
1965
2011 2012
1994
PGAS
19982003
PT Perusahaan Gas Negara (Persero) Tbk, more usually referred to as PGN, or by its stock code at the Indonesia Stock Exchange of ‘PGAS’, is a state-owned company that has been leading the way in Indonesia’s gas industry since 1859, when it went by the name of Firma L.I. Enthoven & Co.
On 13 May 1965, pursuant to Government Regulation No. 19/1965 the Company was designated a state company known as Perusahaan Gas Negara (PGN). The subsequent issuance of Government Regulation No. 2 year 1984 changed the Company’s legal status from State Company(PN) to Public Corporation (”Perum”).
Company’s change of status was accompanied by a broadening of the scope of its business to incorporate not just natural gas distribution but transmission as well, for which PGN functionedas a transporter.
On 11 March 2007, the Company succesfully conducted a Gas-In (�rst gas chanelling),which was followed by the commercialization of gas from Pertamina’s Pagardewa gas�eld through the South Sumatera-West Java pipeline to the Company’s cusomer in Cilegon (PT Krakatau Daya Listrik).
The Company’s shares were listed on the JakartaStock Exchange and the Surabaya Stock Exchangeon 15 December 2003, with the stock code PGAS.
In 1998 PGN successfully �nishedTransmission Pipeline Grissik- Dorsal followed by the establishment of a subsidiary in the transmission line, PT Transportasi Gas Indonesia.
Brief History
Pursuant to the provisions of Law No. 40year 2007 regarding Limited LiabilityCompanies, and in connection with a stock split, the Company’s Articles of Associationunderwent their most recent amendment by Deed No. 50 dated 13 June 2008 jo. Deed No. 8 dated 2 Jully 2008.
To optimize the Company’s accumulated strengths and competencies by taking advantage of oppurtunities to develop the business and realize PGN’s vision, the Company established another subsidiary, PT PGAS Solution.
In 2011 PGN established two subsidiaries thateach engaged in the upstream and downstreamnatural gas business. The Subsidiary in the upstream is PT Saka Energy Indonesia (SAKA) while the subsidiary in the downstream is Gagas Energy PT Indonesia (GAGAS). PGN’s Ownership in both subsidiary is 99% and 1% ownership by PT PGAS Solution.
PGN established subsidiariesPT PGN LNG Indonesia (PGN LNG).The scope of PGN LNG business includesprocuring LNG supply, LNG and natural gas transportation activity,inventory activities includesregasi�cation to the buyer, as well asperforming other business activities.
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
The Company Shares
PGN shares have been traded in the Indonesia Stock Exchange (Bursa Efek Indonesia/BEI) since the
5th December 2003 under the trading code PGAS. The price of PGN shares in BEI as at December 31, 2012 is
at the position of IDR4,600.- per share. The composition in the Company as at December 31, 2012 consisting
of the Indonesian Government in the amount of 56.97% and the public in the amount of 43.03%. (2.4 - 2.7)
Economic Scale (2.8)
PGN is operating in almost all regions in Indonesia, with the support of approximately 1,564 employees. In
order to finance the distribution pipeline construction investment activity, PGN’s assets as at the end of 2012
are in the amount of USD3,908 million with the sales value amounting to USD 2,576 million. The complete
economic scale of PGN is as follows:
About PGN The Company Shares149
2012 2011
Number of employees 1,564 1,516
Total net sales (USD million) 2,576 2,230
Total capitalization (USD million) :
- Liability 1,553 1,521
- Equity 2,355 1,879
Quantity of product provided (MMscfd) 807 795
Total assets (USD million) 3,908 3,400
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
PGN operates in two business segments:
• The distribution of natural gas to industrial, commercial and household customers;
• The transmission of natural gas.
In addition to the two main business segments, PGN owns Subsidiary Entities engaging in other operational
segments, namely establishing cooperation in the fields of natural gas/oil and gas upstream exploration and
exploitation, gas products downstream processing/utilization, provision of fiber optic rental services for the
provision of network, as well as construction and repair services for the customers.
About PGN PGN’s Operational Structure150
PGN’s Operational Structure
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About PGN PGN Group
In order to provide maximum services for customers, PGN has divided its business areas into four operational
units in the form of Strategic Business Units (SBU), namely:
1. Region I Distribution SBU, which covers the Regions of Western Java and Palembang. Consisting of the
Sales and Services for the Banten, Jakarta-Bogor, Bekasi-Karawang, Cirebon and Palembang Areas.
2. Region II Distribution SBU, which covers the Regions of Eastern Java. Consisting of the Sales and for the
Surabaya, Sidoarjo-Mojokerto and Pasuruan-Probolinggo Areas.
3. Region III Distribution SBU, which covers the Regions of Northern Sumatra. Consisting of the Sales and
Services for the Medan, Batam and Pekanbaru Areas.
4. Sumatra-Java Transmission SBU, which covers the regions of South Sumatra, Lampung, Banten,
to West Java.
PGN Group (2.3)
151
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
About PGN SBU, Subsidiaries and Affiliates152
SBU, Subsidiaries and Affiliates
Percentage of Share Ownership
Subsidiaries
Strategic Business Unit (SBU)
PGN has three sales areas in the distribution business (SBU I, II and III) and one area in the transmission business (SBU Transmission Sumatera-Java) as well as seven subsidiaries in several businesses.
SBU III
SBU Transmission Sumatera -
Jawa
PT TransportasiGas Indonesia
60%
PT NusantaraRegas
40%
PT PGAS Telekomunikasi
Nusantara
100%
PT PGAS Solution
100%
PT Gagas Energi
100%
PT PGN LNG Indonesia
100%
PT Saka EnergiIndonesia
100%
SBU II
SBU I
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Business Model
GTA Gas Transportation Agreement between PGN/Transgasindo as gas transporter and suppliers in transferring gas to suppliers from off taker point.
GSA Gas Sales Agreement
Sales Agreement between PGN as gas distributor and costumers.
PGN has two business models: transmission and distribution business.80% of PGN revenue is generated from distribution and 20% from transmission
PGN, as a integrater, purchases gas from various gas suppliers and distributes to costumers through PGN distribution pipeline.
GTAGas Transportation Agreement
GSAGas Sales Agreement
Industry, Commercial & Households
Customers
Transporter
Distributor
Supplier
StationCompressor
PGN & Transgasindo serve as gas transporters through transmission pipeline by charging toll fee, Transfered gas belongs to third party.
Gas produsers
Off-Taker*
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
R
espons
ible
Disciplin
ed a
nd C
onsi
sten
t
Creative and Innovative
Ho
nest, O
pen and Positive Thinking
Prioritize Safety and Healthy W
ork Environment
Prioritize Internal and External Customers’ Satisfaction
Co
mpetent
3
4
5
6
7
8
9
10
ProfessionalismContinuous imProvement
integrity
safety
exCellent serviCe
Adaptiv
e to
Cha
nge
Proactive
an
d Qui
ck R
espo
nse
2
1
I M PA C T
“Practice of Good Corporate Governance”
Concern
for S
ocia
l and
Nat
ural
En
viro
nm
ent
PGN’s 10 Major Behaviors
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Pertamina EPRegion Sumatera1.006,05 BSCF
427 MMScfdPipa Transmisi Grissik - Duri
970 MMScfdPipa Transmisi Sumatera Selatan - Jawa Barat
970 MMScfd Pipa Transmisi Sumatera Selatan - Jawa Barat
K A L I M A N T A N
SU
MA
TE
RA
Medan
Singapore
Labuhan MaringgaiStation
Pertamina EPField P.Susu48,91 BSCF
ConocoPhillipsCorridor PSC2.488,75 BSCF
PagardewaStation
BojonegaraStation
Muara BekasiStation
Pertamina TAC EllipseJatirarangon PSC40,15 BSCF
Lapindo BrantasBrantas PSC1113,15 BSCF
Pertiwi Nusantara Resources (gas ex-Salamander Energy)12,86 BSCF
Medco E&P IndonesiaSouth & Central Sumatera PSC27,86 BSCF
Medco E&P LematangLematang PSC53,26 BSCF
Inti Daya Latu Prima(gas ex-Jambi Merang)12,06 BSCF
Gresik Migas(gas ex-PHE WMO)8,76 BSCF
PHE WMOMadura Barat Offshore PSC55,43 BSCF
Husky CNOOCMadura Strait PSC1146,00 BSCF
SantosMadura Offshore PSC242,90 BSCF
BBG & WNE, IKD SNR(gas ex-TSB)17,11 BSCF
Pertamina EPRegion Jawa376,06 BSCF
SULAWESI
J a v a
GrissikStation
Duri
Panaran Station,Batam
Infrastruktur dan Pipa BertekananTinggi Milik PGN
Sumber Gas Bumi Milik Lainnya
Stasiun
Wilayah Strategic Busines Unit (SBU)
SBU IIarea
SBU Iarea
SBU Iarea
SBU IIIarea
SBU IIIarea
SBU IIarea
Infrastructure and High-pressure pipeline owned by PGN
Sources of natural gas and other proprietary
Station
Strategic Business Unit (SBU) Region
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
PGN Operational Map (2.3, 2.7)
Pertamina EPRegion Sumatera1.006,05 BSCF
427 MMScfdPipa Transmisi Grissik - Duri
970 MMScfdPipa Transmisi Sumatera Selatan - Jawa Barat
970 MMScfd Pipa Transmisi Sumatera Selatan - Jawa Barat
K A L I M A N T A N
SU
MA
TE
RA
Medan
Singapore
Labuhan MaringgaiStation
Pertamina EPField P.Susu48,91 BSCF
ConocoPhillipsCorridor PSC2.488,75 BSCF
PagardewaStation
BojonegaraStation
Muara BekasiStation
Pertamina TAC EllipseJatirarangon PSC40,15 BSCF
Lapindo BrantasBrantas PSC1113,15 BSCF
Pertiwi Nusantara Resources (gas ex-Salamander Energy)12,86 BSCF
Medco E&P IndonesiaSouth & Central Sumatera PSC27,86 BSCF
Medco E&P LematangLematang PSC53,26 BSCF
Inti Daya Latu Prima(gas ex-Jambi Merang)12,06 BSCF
Gresik Migas(gas ex-PHE WMO)8,76 BSCF
PHE WMOMadura Barat Offshore PSC55,43 BSCF
Husky CNOOCMadura Strait PSC1146,00 BSCF
SantosMadura Offshore PSC242,90 BSCF
BBG & WNE, IKD SNR(gas ex-TSB)17,11 BSCF
Pertamina EPRegion Jawa376,06 BSCF
SULAWESI
J a v a
GrissikStation
Duri
Panaran Station,Batam
Infrastruktur dan Pipa BertekananTinggi Milik PGN
Sumber Gas Bumi Milik Lainnya
Stasiun
Wilayah Strategic Busines Unit (SBU)
SBU IIarea
SBU Iarea
SBU Iarea
SBU IIIarea
SBU IIIarea
SBU IIarea
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Important Events in 2012
01
02
03
0405
06
07
08
09
10
01 22.02.12The 2012 Banten Flood PGN’s care for flood victims.
22.02.12Fire in Kampung BandanJakarta in 2012PGN’s care for the victims of fire inKampung Bandan.
04.04.12PGN’s Affordable Market (Pasar Murah).
21.03.12Rice Grand Harvesting in the GP3K program,A synergy between SOEs, namely PGNand PT SHS(Persero).
14.04.12Inspiration Class Volunteers Gathering,Sharing Inspirationthrough professions.
02 03 04 05
05.06.12Appreciation for Volunteers in 2012P2K-DKI at tower 165 ESQ 2012.
05.12Toddlers and Ederly People Nutrition Alert by PT PGN SBU III (Pekanbaru 24/5/12, Medan 30/5/12 dan Batam 30/5/12)
13.06.12Indonesia Mengajar at the Office of the Vice President in 2012.
14.06.12Synergy between PGN-Perum Perhutani in supporting the 1 billions trees planting.
27.06.12Inauguration of PGN’s Garut weaving villageand creative zone launching in 2012
06 07 08 09 10
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
1415
13
16
19
18
20
12
11
17
08.11 - 07.12Photos and documents reports of public health services through PGN’s healthy car in Medan and Jakarta.
31.07.12The acceptance ofgreen CEO Award in Gas Distribution Services Sector.
11 12 13 14 05.09.12A visit to Small and Medium Enterprises (UKM) in Palembangby the Deputy of the Ministry for State-Owned Enterprises to UKM MB of PGN in 2012.
1517.07.12Partnership synergy signing and opening nationwide launch of the comic series legend.
05.07.12Inauguration of Binaan Sriminosari village.
26.10.12Celebration of Idul Adha at the Head Office in Jakarta.
21.11.12Handover and first groundbreaking in the environtment development aid from PT PGN (Persero) Tbk. in the east of Lampung.
29.11.12Inauguration of the assistance for the drinking water installation program in Panggang Island.
14.12.12Planting of 16000Mangrove Trees,Green and CleanEnergy for life,Jadimulya Beach Area, Cirebon.
16 17 18 19 21.12.12SOE Care for Education-Appreciation for Teachers and Students with Outstanding Achievement in remote areas, outermost isles and Indonesia’s frontiers.
20
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Tentang PGN Award and Certificate159
2nd Winner of Indonesia Sustainability Reporting Awards 2011 Organized by the National Center forSustainability Reporting(NCSR), in Group-A under the category of ‘Service’.
Award and Certicate
Participate Karya Salemba Empat 2012 Scholarship Programme.
Certificate of Appreciation from Indonesian Red CrossAppreciation from Indonesia Red Cross for the donation of 1 unit or Disaster Response Car in Palembang.
Certificate of Appreciation from the “Ministry of SOE”
Appreciation for participation in the Poverty Alleviation Program in DKI
Jakarta (P2K-DKI).
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Tentang PGN Award and Certificate160
“Sound of Nusantara” AwardAward for participation in the Ramadhan Bazaar of “Sound of Nusantara” from Dharma Wanita of the Ministry of Finance.
“Indonesia Expo III” AwardAward for participation in Indonesian Expo III from Indonesian Embassy in Amman.
Award from the World Record MuseumAward as initiator of the Most Published Nusantara Legends Comic Books.
Award for Excellence from Rumah Zakat for the best
support of “Senyum Sehat” Program.
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
To the management of PT Perusahaan Gas Negara (Persero) Tbk.
We were engaged by PT Perusahaan Gas Negara (Persero) Tbk. (‘PGN’) to provide assurance in respect to it’s Sustainability Report 2012 (‘the Report’). The assurance has been car-ried 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 PGN during 2012 that could conflict with the indepen-dence 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 Audit-ing and Accounting Standards Board. In addition, we have also planned and carried out our work in accordance with AA1000AS (2008) ‘AA1000 As-surance Standards (2008)’, issued by AccountAbility.
Level of assurance and criteria used
Our evidence-gathering procedures have been de-signed to obtain a limited level of assurance based on ISAE3000 an 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 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 assesment of PGN’s adherence to the AA1000 AccountAbility Principles Standard (2008) and 2) an assesment on the accuracy and quality of specified sustainability performance information contained within the Report, in relation to the agree scope. The scope of work consists of: • partnership program • community stewardship program • occupational health and safety
Responsibility
PGN is responsible for all information and claims contained in the Report, including established sustainability management targets, performance management, data collection and report prepara-tion, etc. Our responsibility in performing this engagement is to management of PGN only for the puIDRose of veryfying its statements relating to its sustainability performance, 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 system and processes used to managed and report these using the following methods:
• Reviewed report, internal policies, documentation, management and information systems.• Carried out interview, 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.
Independent Assurance StatementReport No. 0019/BD/PGN
Jl. Sisingamangaraja no.26-Jakarta Selatan 12120-INDONESIATel: +62 21 720 2605 . Fax: +62 21 720 2606-www.mazars.co.idPT Mazars
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Limitations
Our scope of work was limited to a review of the accuracy and reliability of specified data and interviews with data providers, person in charge of data collection and processing, as well as person in charge of sustainability performance-related infor-mation, and did not include any on-site validation of the mining site.
Conclusions
AA1000 AccountAbility Priciples Standard (2008)
Findings and conclusions concerning adherence to the AA1000 AccountAbility Principles of Inclusiv-ity, Materiality and Responsiveness include:
• Inclusivity An assesment has been made to determine wheter PGN has included all key stakeholders in developing and achieving an accountable and strategic response to sustainability issues.
We found PGN demonstrates a strong commitment to stakeholder inclusivity. PGN has an effective system in 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 assesment surveys in relayion to the community development program, and by conducting Stakeholder Forum Discussion in order to determine the report content.
However, we recommend that PGN’s countinues to improve stakeholders inclusivity systems and procedures on a regular basis to maintain it’s effectiveness.
• Materiality An assesment has been made as to wheter PGN has included in the Report the material information required by its stakeholders in order for them to be able to make inform judgements, decisions, and actions. We found PGN has a strong process in place to determine material issues. Key material issues were adequately reported and were found to provide balanced information about PGN sustainability performanced. A range of internal stakeholders are involved in PGN’s
materiality determination process. However, we recommend that PGN countinues to conduct materiality test on a regular basis in future reports.
• Responsiveness An assesment has been made as to wheter PGN demonstrates that its responds to its stakeholders and is accountable to them.
PGN was found to be responsive to key stakeholder concern and expectations. This was achieved trough the organization’s allocation of resources to stakeholder engagement, the timeliness and accesibility of reported information, and the types of communication mechanism regularly employed. However, we recommend that PGN countinues to improve stakeholder engagement procedurs on a regular basis in future reports.
Reliability of Sustainability Performance Infor-mation
Based on our limited assurance engagement, noth-ing has come to our attention that causes us to believe that the data of the Report has been materi-ally misstated.All key assurance findings are included herein, and detailed observations and follow-up recommenda-tions have been submitted to PGN management in a separate report.
Jakarta, March 11, 2013
James KallmanPresident Director
Mazars is an international, integrated and inde-pendent organization, specialing in audit and assurance, accountancy, tax, legal and advisory services. Mazars can rely on the skills of 13,000 proffesionals in the 61 countries that make up its integrated partnership in Europe, Africa, the Middle East, Asia pacific, North America, LatinA-merica and Carribean, whilst in Indonesia is served by PT Mazars, one of the leading sustain-ability assurance providers.
Jl. Sisingamangaraja no.26-Jakarta Selatan 12120-INDONESIATel: +62 21 720 2605 . Fax: +62 21 720 2606-www.mazars.co.idPT Mazars
07
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
The National Center for Sustainability Reporting (NCSR) hereby states that PT Perusahaan Gas Negara 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 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, 11 March 2013
Drs. Elmar Bouma, CSRA Director
National Center for Sustainability Reporting (NCSR) dengan ini menyatakan bahwa PT. Perusahaan Gas Negara 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 telah diterapkan dalam laporan yang disampaikan. Kami menyatakan bahwa laporan tersebut telah memuat seperangkat pengungka-pan 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.
Statement GRI Application Level CheckedLaporan Pengecekan Tingkat Aplikasi GRI
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Tentang PGN GRI G3.1 Content Index164
Pages/Notes
3.11 Significant changes form previous in the report
20
3.12 GRI content index 164
3.13 Assurance 161
4. Governance, Commitments, and Engagement
4.1 Governance structure of the organization 57,59
4.2 Status of the Chair of the Board 59
4.3 Independent Commissioners 59
4.4 Mechanisms to provide advice to the Board
57,63
4.5 Compensation Commisioners and/or Directors
60
4.6 Avoiding conflicts of interest 62
4.7 Mechanism for selection and appointment of Members of the Board of Commisioners and the Board of Directors
57,59
4.8 Socialization and realization of the Corporate Vision and Mission
67,141
4.9 Precautionary Approaches 65
4.10 Processes for evaluating the Board’s performance
57
Commitments to External Initiatives and International Standard
4.11 Precautionary approaches 65
4.12 International Standard Adoption 63
4.13 Members of industry assotiation Organization
51
Stakeholder Engagement
4.14 List of stakeholder groups 49,50
4.15 Basis for identification and selection of stakeholders
49,50
4.16 Approaches to stakeholder engagement 49,50
4.17 Key topics and concerns that have been raised through stakeholder engagement
49,50
GRI G3.1 Content Index
Pages/Notes
1. Strategy and Analysis
1.1 Remark from the Board of Commissioners and Board of Directors
11,13
1.2 Description of key impacts, risks, and opportunities
13
2. Organizational Profile
2.1 Name of the organization Sampul
2.2 Primary brands, products, and or services 146
2.3 Operational structure of the organization 155
2.4 Location of organization’s headquarters 21
2.5 Number of countries where the organization
149
2.6 Nature of ownership and legal form 149
2.7 Markets served 136,149,155
2.8 Scale of the reporting organization 149
2.9 Significant changes during the reporting period
20
2.10 Awards received in the reporting period. 159
3. Report Parameters
Report Profile
3.1 Reporting period 19
3.2 Date of most recent previous report 19
3.3 Reporting cycle 19
3.4 Contact point 21
Report Scope and Boundary
3.5 Process for defining report content of the report
19
3.6 Boundry of the report of the report
20
3.7 Limitations on the scope or boundary of the report
20
3.8 Basis for reporting on joint ventures, subsidiaries, etc
20
3.9 Data measurement techniques 20
3.10 Effect of any restatements of information 20
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Tentang PGN GRI G3.1 Content Index165
Pages/Notes
Economic Performance
Aspect: Economic Performance
EC1 Direct economic value generated and distributed
127
EC2 Financial implications due to climate change
25
EC3 Employee pension fund 85
EC4 Financial assitance received from goverment
128
Aspect: Local Aspect
EC5 Standard entry level salary 75
EC6 Locally-based suppliers 129
EC7 Local workers 81
Aspect: Indirect Economic Impact
EC8 Infrastructure investments and services provided for public benefit
119,121
EC9 Indirect economic impact 129
Environment Performance
Aspect: Materials
EN1 Materials used 37,39
EN2 Recycle materials used 39
Aspect: Energy
EN3 Direct energy Consumption 27
EN4 Indirect energy consumption 28
EN5 Energy saved 28
EN6 Initiative to provide renewable energy
28
EN7 Initiative to reduce indirect energy consumption
28
Aspect: Water
EN8 Total water withdrawal 40
Pages/Notes
EN9 Water sources significantly affected by withdrawal of water
40
EN10 Power of mining in protected forests
40
Aspect: Biodiversity
EN11 Location of biodiversity 36,37
EN12 Impacts on biodiversity NR
EN13 Habitats restored 37,41
EN14 Managing impact on biodiversity 36
EN15 Red list species. NR
Aspect: Emission, Effluents, and Waste
EN16 Greenhouse gas emissions 28,35
EN17 Other greenhouse gas emissions 35
EN18 Initiative to reduce greenhouse gas emissions
28,29
EN19 Emission of ozone-depleting substances
35
EN20 NOx, SOx, and other significant air emissions
35,29
EN21 Waste water discharge 40
EN22 Waste and disposal method 38
EN23 Total number and volume of significant spills
39
EN24 Hazardous waste 38
EN25 Biodiversity of water sources NR
EN26 Initiatives to mitigate environmental impacts
35,91
EN27 Products reclaimed 39,135
Aspect: Compliance
EN28 Fines and non-monetary sanctions 41
Aspect: Transportation
EN29 Environmental impacts of transportation products
29
NR= Not Relevan
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Tentang PGN GRI G3.1 Content Index166
Pages/Notes
Aspect: Over all
EN30 Total environmental protection expenditures
37,41
Labor PracticesPerformance Indicators
Aspect: Employment
LA1 Profil of workforce 79,80
LA2 Recruitment and employee turnover 73
LA3 Benefits provided to part-time employess
76,85
LA15 Parental leave -
Aspect: Labor/Management Relations
LA4 Collective bargaining agreements 71
LA5 Notice period for operational changes
71
Aspect: Occupational Health and Safety
LA6 Health and safety committees 99
LA7 Rates of injury and fatalities 108
LA8 Health education, training, counseling, and prevention programs
112
LA9 Clause health and safety topics 97
Aspect: Training and Education
LA10 Average hours of training 104
LA11 Retirement preparation programs 85
LA12 Employees performance and career development
83,85
Aspect: Diversity and Equal Opportunity
LA13 Employees diversity 81
Aspect: Equal Remuneration for Gender
LA14 Ratio of basic salary of gender 75
Pages/Notes
Human RightsPerformance Indicators
Aspect: Investment and Procurement Practices
HR1 Training workers about human rights
129
HR2 Human rights screening of suppliers and contractors
129
HR3 Employee training concerning aspects of human rights
77
Aspect: Non-Discrimination
HR4 Incidents of discrimination 77
Aspect: Freedom to Participate in Union
HR5 Rights of freedom of union 72
Aspect: Child Labor
HR6 Child labor 77
Aspect: Forced and Compulsory Labor
HR7 Forced or compulsory labor 74
Aspect: Security Practices
HR8 Security personnel trained human rights issues
77
Aspect: Indigenous Rights
HR9 Violations involving rights of indigenous people
77
Aspect: Assesment
HR10 Assessment of human rights practices or impact
NR
Aspect: Completion of Human Right’s Case
HR11 Case completion of human right’s mechanism
NR
Society Performance Indicators
Aspect: local Communities
NR= Not Relevan
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Tentang PGN GRI G3.1 Content Index167
Pages/Notes
SO1 Relations with local communities 117
SO9 Negative impact on local communities
35
SO10 Prevention of negative impacts 35
Aspect: Corruption
SO2 Business units analyzed for risks related to corruption
61,62,63
SO3 Employees trained on anti-corruption
61,77
SO4 Action taken in response to incidents of corruption
61,77
Aspect: Public Policy
SO5 Participant in public policy development
62,78
SO6 Contribution to political parties 62,78,90
Aspect: Anti-Competitive Behavior
SO7 Anti-Competitive Behavior -
Aspect: Aderenche
SO8 Fines and non-monetary sanctions for non-compliance with laws and regulations
91
Product ReponsibilityPerformance Indicators
Aspect: Customers Health and Safety
PR1 Life cycle stages; health and safety impacts
90
PR2 Incidents of non-compliance with regulations and voluntary codes concerning health and safety impacts of products and services
91
Aspect: Labeling
PR3 Information of product ingredients 89
PR4 Violation of rules related to the provision of information products
90
PR5 Measurment the level of customer satisfaction
92
Pages/Notes
Aspect: Marketing Communication
PR6 Programs for adherence to laws, standards, and voluntary codes related to marketing communications
90
PR7 Incidents of non-compliance with regulations and voluntary codes concerning marketing communications
90
Aspect: Customer Privacy
PR8 Substantiated complaints breaches of customer
92
Aspect: Compliance
PR9 Significant fines for non-compliance with laws and regulations concerning the provision and use of products
91
PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
Paper and Ink Specification
This report is printed on FCS Certified Coated paper, and printer using alcohol free ink
Cover Page Paper Specification: Tusche
FSC CO20981Colors: allCalipers: 13 pt - 24 ptRecycled Content: White and Cream are 40% Other Recycled Fiber only; Cool Grey has 5% PCW and 35% Other recycled Fiber; Burgundy, state Blue and Black have 20% PCW and 40% Other Recycled Fiber.Recyclable: No
When it comes to taking care of the environment, FiberMark focuses on finding ‘naturally creative’ ways to make it opertaing facilities and products more environmentally friendly. From the efforts of the environmental ‘Heroes” at our Brattleboro manufacturing facility, to the achievement of ISO 14001 registration in the Red Bridge, UK facility, FiberMark employees are striving every day to develop and implement creative, innovative approaches to limit the company’s environmental footprint and honor its commitment to the environment.
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PT Perusahaan Gas Negara (Persero) Tbk Sustainability Report energy for sustainability
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Sustainability Report
2012