SUSTAINABILITY REPORT

PT ADARO INDONESIA PT ADARO INDONESIA

2009
Table of Contents

Cover: Children
cheerfully playing
around the Rubber
Fumigation House,
Outstanding Rubber
Plantation Group,
Tamiang Village,
Tabalong, South Borneo

Table of Contents 00

Report Overview 01

Greetings from the President Director 02

What & Who Adaro Indonesia Is 04

Our Strategy 12

Our Performance 14

Supporting State and Community Development

Economic Performance 16

Product Benefits 17

Local Development

Local Suppliers 18

Local Employees 18

Community Development 19

Public Facilities 42

Indirect Economic Impact 43

Prioritizing Safety and Environmental Conservation

Protecting Occupational Health and Safety 46

Conserving the Environment 48

Employee Development 62

How the Stakeholders See Us 68

How We Made This Report 72

00
 Report Overview

Message to The Readers Feedback from the Readers

This is the second Sustainability Report This report was published to be read by
published by PT Adaro Indonesia (from all of our stakeholders, both internal and
here onward called “Adaro Indonesia”), external, such that they will give
but this would be the first report using comments, critiques and suggestions,
the Global Reporting Initiative (GRI) which may contribute to the performance
Guidelines as reference. The report development of Adaro Indonesia. Your
describes Adaro Indonesia’s efforts in comments, critiques, and suggestions may
balancing its economic, social and be sent to [3.4]:
environmental performance.
1. Head Office:
PT. Adaro Indonesia
Scope of the Report
Menara Karya 22nd-23rd floor,
The data presented in this report describes
Jl. HR. Rasuna Said, Blok X-5 Kav 1-2
the economic, social and environmental
Jakarta, 12950, Indonesia
performance of Adaro Indonesia in 2009
Ph: (62-21)2553-3000
and in the two preceding years (for several
Fax: (62-21)5211-266
data). The scope of the report is not only
Email: general@ptadaro.com
the activities of Adaro Indonesia in the
operational sites and head quarter but
2. Operating Office:
also the community outreach programs
PT. Adaro Indonesia
of Adaro Indonesia. Several contractor
Mine office,
data is also presented in this report. [3.6]
Hauling Road KM73,
Due to limited documentation and
Wara, Tabalong
recording, not all of the organization’s
PO BOX TTB 110 Tanjung 71500
activities and performance can be
South Kalimantan
presented in this report.
Ph: (62-526) 2021-997 / 98
Fax: (62-526) 2021-996
Guidance
Email: csr@ptadaro.com
We have used the sustainability reporting
framework published by the GRI version
Other Information
3.0 (Sustainable Reporting Guidelines –
For further information about Adaro
G3).
Indonesia, please visit our websites
www.adaro.com and
www.comdev-adaro.com

“
Describing Adaro Indonesia’s
efforts in balancing its
economic, social and natural
environment performance.

”
01
Greetings from Dear honorable stakeholders,
the President Director Indonesia has a large quantity of natural
resources that can benefit the people at
[1.1] large. Coal, as one of the abundant natural
resources in Indonesia, is beneficial for
generating energy. The market indicates
that global demand for coal is increasing.
In addition to its lower price compared to
those of other energy resources,
Indonesian coal also has a variety of
qualities that is adjustable regarding
needs, usage and expected benefits.
Seeing this as an opportunity, Adaro
Indonesia is encouraged to explore and
mine coal that can be processed by other
particular parties into an energy resource,
which is beneficial to all.
Corporate Social Responsibility (CSR) has
become a significant embedded aspect in
every activity we do. The essence of CSR
for us is the existence of mutual goodwill.
We realize that our activities may change
not only the natural environment, but also
the social and economic order in the area
in which we operate. It has been the
mutual goodwill of the shareholders that
there is a responsibility to give back what
we already have and to develop the
potential for creating a better life in the
surrounding areas of our operation.
However, goodwill is not enough, we also
realize and are responsible to fulfill other
stakeholders’ interests. We see our
stakeholders’ interests wholly as the
foundation for the development of our
corporate strategy in order to sustain our
business.
02
The presence of Adaro Indonesia in South
Kalimantan, more or less, has influenced
the current economy, social and natural
environment. The economic development,
expansion of social and public facilities,
community development, reclamation
and natural environment conservation are
the impacts of our existence. Nevertheless,
we recognize that what we have done
must not only bring temporary benefits
to the surroundings, but there should be
continuous and sustainable benefits that
contribute to the creation of an
independent society based on a harmonic
relationship with the natural environment,
especially when the time has come to stop
operating in the future. We avoid indulging
the community with programs that the
community wants. In contrast, we consider
the programs regarding the needs of the
community by greater exploring the
community’s potentials. This is our
challenge: that we should not give up
initiating programs in order to not only
develop the economy but also to expand
the community’s potentials toward an
independent and environmentally sound
society. Hence, when it is time for us to
step out from business, the community
that we would leave will be sustainable.
In order to realize the above mentioned
goals, we have been improving ourselves
by developing our organizational
management capability including
addressing the health and safety of our
employees. In relation to this, we use the
internationally accepted Standard and
Operational Procedure for mining because
“
We see our stakeholders’
interests holistically as the
foundation for the
development of our corporate
strategy... we recognize that
what we have done must not
only bring temporary benefits
to surroundings, but that there
should be continuous and
sustainable benefits that
contribute to the creation of
independent society based on
harmonic relationship with the
natural environment,
especially when the future
time has come for us to stop
operating.

”
Garibaldi Thohir,
President Director
PT Adaro Indonesia

we realize that our employees are in a
high-risk workplace. Moreover, we also
use the Millenium Development Goals
(MDGs) as guidance in carrying out our
community development programs.
We have received national and
international rewards and
acknowledgements for the activities we
initiated and the high-quality coal we
provide. Yet, we do not want to stop
there. We realize that we still have to
develop and improve ourselves to be more
capable and to bring more benefits to our
stakeholders.
What is presented in this report is not
only pride in what we have achieved but
also self assesment on what we have
done. For this reason, we are pleased to
welcome comments, critiques and
suggestions from the readers.
Enjoy your reading!

Garibaldi Thohir
President Director
Adaro Indonesia

03
What & Who Adaro Indonesia is one of the
government’s first generation of
ADARO INDONESIA is contractors for coal mining and
exploration in Balangan and Tabalong
Regency, South Kalimantan Province, as
well as for coal sales, based on the Coal
Contract of Work (PKP2B) number
J2/J.i.DU/52/82 dated November 16, 1982.
Adaro Indonesia started production in
1991, but the company began to sell coal
one year later in 1992. Adaro Indonesia
is a corporation designated to be under
National Vital Objects (OBVITNAS) in the
Energy and Mineral Resources Sector
based on the ministerial decree KepMen
ESDM No.1762 K/07/MEM/2007 in regards
to the Protection of National Vital Objects
in the Energy and Mineral Resources
Sector.

The Mining Site N

Balikpapan
Adaro Indonesia’s mining sites are located East Borneo
in Balangan and Tabalong Regency in Central Borneo
South Kalimantan Province. Both crushing
plant and loading port are located in
Kelanis Village, South Barito Regency in
Central Kalimantan Province [2.5]. Kelanis Barge
Loading Facility
Tanjung PT ADARO INDONESIA
There are three mining sites of Adaro Tutupan Mine
Indonesia: Dahai Office
1. Paringin mining site Coal Haul Road Paringin Mine
2. Tutupan mining site
3. Wara mining site
Kandangan

South Borneo
Rantau

Binuang
Banjarmasin

Martapura

Pulau Sebaku

Pulau Laut

Offshore Transhipment Site

Pulau Laut Airstrip
Pulau Laut Coal Terminal

BORNEO

04
 “
Adaro Indonesia is a
corporation designated as one
of the National Vital Objects
(OBVITNAS) in the Energy and
Mineral Resources Sector.

”
Our Coal Supply Chain
[2.2]

1. Tutupan Mine

2. Exploration Driling 3. Overburden stripping 4. Overburden dumping 5. Coal Mining

6. Hauling coal to the pit 7. Loading coal into coal 8. Trucking coal on the haul 9. Dumping coal at Kelanis
stockpiles haulers road

10. Coal crushing at 11. Coal stockpiling at 12. Barge loading at 13. Barging coal on the
Kelanis Kelanis Kelanis Barito River

14. Barging coal at the 15. Bulk carrier self loading 16. Bulk carrier being loaded 17. Bulk carrier loading at
Taboneo anchorage with its own cranes by floating cranes the IBT terminal

05
 Adaro Indonesia is a well known envirocoal
[2.2] producer that has marketed its
product to more than 18 countries around
the world, including India, Japan, China,
the United Kingdom, Spain, and the United
States of America where envirocoal is used
as an energy source by coal-fired steam
power plants (PLTU) [2.7].
As 25-30% of its total sales meet domestic
coal needs, Adaro Indonesia is the largest
supplier for the domestic coal market,
especially for coal-fired steam power
plants (PLTU) in Java and Bali Province
(PLTU PEC, PLTU Paiton 1-2, PLTU Jawa
Power, PLTU Cilacap, and PLTU Suralaya),
the cement industry, and the pulp and
paper industry.

North Europe
Finland
Denmark
Germany
Netherlands
France
England
USA
Chile

South East
Asia
Philippines
Malaysia
Thailand

South Europe
Spain
Italy
Slovenia

South Asia
India

Envirocoal Market Segment in Indonesia Envirocoal Market Segment in the World

Cement INDONESIA
Others EUROPE
Industry 27%
Industries 11%
26% 5%

Power Plant
69% AMERICA ASIA
3% 59%

06
Total Assets in 2009

Land
Road
(US$)

13,862,578.22
1,426,858.52
“ With its product marketed
to more than 18 countries
Building-Silos/Workshop/Storage Facility
Crushing & Stockpiling System #1
349,972.63
6,284,173.8
around the world, Adaro
Weigh Bridge & Handling System 145,449 Indonesia is also the
Vehicles 59,780.41
Building-Mess/Canteen 8,220.75 largest supplier for the
Bridge 38,771.12 domestic coal market.

”
Settling Pond 713,970.8
Survey Equipment 1,416,689.51

TOTAL 24,306,464.76

Overview of Adaro
North Asia
Indonesia’s Market
Japan
South Korea According to the coal contract, Adaro Indonesia has the right to explore, mine and
China sell coal until 2022 (the extension of contract is allowed for twice with 10 years for
Taiwan
each extension based on the mutual agreement principle). The contract covers an
Hong Kong
exploration location of 35,800.80 ha (reductions occurred several times, with total
reduction of 1,480 km2 from the initial exploration location size).

Name of company [2.1] : PT Adaro Indonesia

Operating Office [2.4] : Mine Office Wara KM 73, Hauling Road
PO BOX 110 TTB 110 Tanjung 71500
South Kalimantan
Head Office [2.4] : Menara Karya Lt 22-23, Jl. HR. Rasuna Said, Blok X-5
Kav1-2 Jakarta
Ownership and : Private, limited liability corporation.
legal form[2.6] Adaro Indonesia is a subsidiary of PT Adaro Energy
Scale of the Organization [2.8] : Number of Employees: 513
Indonesia Net sales in 2009 : US $ 2,406,903,867

TOTAL CAPITAL

459
2009 1,209
1,849
256
2008 502
1,029
107
2007 550
1,007

0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000

Total Equity Loan with interest Total Liability

In million US$

Oceania
New Zealand
PRODUCTION and SALES VOLUME
42,000
41,000 41,080
40,000 40,590
39,000 39,798
38,000 38,524
37,000
36,000 36,076 36,078
35,000
34,000
33,000
2007 2008 2009
Sales Volume (’000 ton) Production Volume (’000 ton)

07
Recognitions a. Received the Indonesian CSR Award from the Minister for Social Affairs for the
evaluation period of 2008
in 2009 1. Awarded the Gold Winner in the Social and Environmental category for the
Integrated Agriculture Program.
[2.10]
2. Awarded First Place in the Social category for the Formal Education Quality
Improvement Program through LP3AP.
3. Awarded Second Place in the Environmental category for the Program of Clean
Water Production by Using Mining Wastewater.
4. Awarded Third Place in the Economy and Environmental category for the
Integrated Agriculture Program.

b. The largest tax payer in 2009 to the Taxation Office for Foreign Capital Investment

c. The largest tax payer in 2009 to the Tanjung Branch Pratama Taxation Office

d. The KSN Award 2009 from the Minister for Social Affairs
1. Awarded the Platinum Winner in the Economy/Partnership category, the Micro
Finance Institution Program. The winning program was the Banua Bauntung
Micro Finance, Paringin Branch.
2. Awarded the Gold Winner in the Social/ Environmental category, the 9-Year
Basic Education Program. The winning program was the Education Quality
Improvement Program through LP3AP adjoining with Adaro Indonesia.
3. Awarded the Silver Winner in the Community Health Program category for the
Mothers, Newborn Babies and Children Health Program.
4. Awarded the Silver Winner in the Economy/Partnership category, the Program
for Farm Community Business Unit. The winning program was the Farm
Group ‘Sahabat’.

e. The PROPER, Green Level, for performances in the periods of 2007-2008 and
2008-2009 from the State Minister for Environment.

f. Recognition from the Directorate General of Mineral, Coal and Geothermal, the
Department of Energy and Mineral Resources
1. The Prominent/Primary Rank, in the category of Mining Environment Monitoring
2. The Prominent/Primary Rank, in the category of Reclamation Management on
Used Mining Site
3. The Prominent/Primary Rank, in the category of Overburden Management
4. The Prominent/Primary Rank, in the category of Supporting Facilities Activity
Management
5. The Prominent/Primary Rank, in the category of Seeding Management
6. The Pratama/Initial Rank, in the category of Mining Safety Management

Right: Several
recognitions were
achieved by Adaro
Indonesia in 2009.

08
“
Received various awards
in social, economic and
environmental aspect

PROPER
Peringkat HIJAU,
Kinerja 2008-2009
Kementrian Negara
Lingkungan Hidup

09
The Organization’s Presiden Director

Structure Director of Operations

[2.3]

Chief Operating Officer

General Manager Operation

Secretary

Deputy GM Strategic Planning Deputy GM Production

Coal Hauling Strategic Geotechnical Geology & Business Paringin Project HSE Manager Production Production Mine
Manager Planning Manager Exploration Improvement Manager Manager Planning Infrastructure
Manager Manager Manager Manager Manager

Coal Hauling Long Term Geotechnical Geology & QC Bussiness Administration Reclamation Central Prod. Short Term PIT Infrastructure Operati
Supt. Planning Supt. Supt. Supt. Improvement Supt. Supt. Supt. Planning Supt. Supt.
Supt.

Haul Road Statutory Mine Supt. Environmental North. Prod. Survey Supt.
Maintenance Planning & Mgt Supt. Supt.
Supt. Statistic Supt.

Road Safety Technical Supt. Compliance, Wara Prod. Supt.

Supt. R & D Supt.

Mine Health & South Prod.

Safety Supt. Supt.

Maintenance
Health & Safety
Supt.

10
 PT ADARO INDONESIA

Legal Compliance Officer

Legal Representative Officer

Deputy GM Coal Processing Deputy GM Coal Admin &

& Barge Loading External Affairs

Sr. Operation & HRGA-IT CSR Manager Land Acquisition External Bjrn. Rep. Office Fin. & Acc. Shipping
Maintenance Manager Manager Relations Manager Manager Manager
Manager Manager

ions Supt. Maintenance HSE Supt. Administration HR Supt. CSR Project Land Acquisition Gov. Rel. Supt. Shipping Supt.
Manager Supt. Supt. Supt.

General Affair CSR Bina Public Media Rel.

Supt. Program Supt. Supt.
Maintenance
Supt.
IT Supt.

Maintenance
Planning Supt.

Purchasing &
Warehouse Supt.

11
Our Strategy
“Adaro Indonesia realizes that coal is an unrenewable natural
resource. Therefore, it needs reasonable and efficient
management and utilization that are beneficial to all
stakeholders, including the surrounding communities of the
mining sites.

Vision Statement
To be the leading Indonesian mining and
energy corporate group
”
Mission Statement [4.8] Adaro Indonesia’s
Values [4.8]
Operating in the mining and energy
sector to:
Adaro Indonesia’s Values:
Satisfy the consumers’ needs.
Improve the employees. 1. Focusing on the Consumers
Create a partnership with the
suppliers. 2. QCDS (Quality, Cost, Delivery, Safety)
Support the state and community
development. 3. Possesing the characteristics of:
Improve safety and environment
conservation. A ttitude
Maximize values for the
D etermined
shareholders.
A daptive

R esponsive

O pen minded

I ntegrity

B alance

T eam spirit

4. PDCA (Plan Do Check Action)

5. KISS (Keep It simple Spirit)

6. MbL (Management by Love)

12
Since its early establishment, Adaro Indonesia has been committed to being a good
citizen. For this reason, Adaro Indonesia always carries out its activities based on a
caring partnership with all stakeholders, such that all, including local community, can
experience growth together.
Understanding
the Impact
In order to investigate the impacts of the
company’s operations on local
communities, we have performed a
number of examinations, which were: [1.2,
SO1]:
Before entering the community:
feasibility study, Environmental Impact
Assessment (EIA)
The study was initiated by a forming team
whose members were from Adaro
Indonesia as the resource persons and
external consultants as the executors.
While Operating: social mapping
Social mapping was conducted by a
research team that is expert in social and
community aspects. The respondents of
the study were the society within the Ring
1 area or the local community that was
directly affected by the company’s
operations.
When deciding to leave the community
or the post-mining plan: the post-mining
document
A specific examination was also performed
in order to capture the community’s
perception and to figure out the impact
of the 15-year community development
program of Adaro Indonesia. Results of
the study were used as a reference to
design future strategies for community
empowerment.
Understanding the
Challenge [1.2]
· The area of operation covers more
than 50 villages in 6 regencies and 2
provinces.
· In line with the increasing production
target from one year to another, the
coverage area and operational impacts
are also expanding.
· Limited availability of supporting
facilities for coordinations and program
monitoring and evaluation.
· Different goverment policies in
different regions.
· The time and target of the corporate
team should be adjusted to those of
the local government (Pemda),
because both have agendas and
programs to be accomplished.
Refering to the
Regulation and the
International Standard
and Initiative [4.12]:
The Decree of the Minister for Energy
and Mineral Resources about the
Occupational Health and Safety in
General Mining (1995), KEPMEN
555.K/26/M.PE/1995
Occupational health and safety
management systems-requirements
18991:2007,
Auditing Technical Guidance for the
Occupational Health and Safety
Management System based on the
Decree of the Minister for Manpower
(Permenaker) No.05/MEN/96
SNI14001 (2005):the Indonesian
National Standard (SNI) on the
environmental management system
ISO 9001 : 2000 on the quality
management system
ISO 14001: ISO 14001: 2004 on the
environmental management system
OHSAS18001: 2007 on the
occupational health and safety
management system
The Millenium Development Goals
(MDGs) as guidance for the
implementation of community
development.
Increasing Performance
To manage the impacts and to address
the previously mentioned challenges,
Adaro Indonesia’s efforts to increase its
performance focus on the following
mission statements:
1. SUPPORTING STATE AND
COMMUNITY DEVELOPMENT
2. PRIORITIZING SAFETY AND
ENVIRONMENTAL CONSERVATION
3. IMPROVING THE EMPLOYEES
13
 Supporting State and
Community
Development

This section describes the impacts of Adaro

Indonesia’s operations on the economic
condition of stakeholders and the economic
system at local and national levels.

Community empowerment programs are

evidence of the company’s commitment to
preserving the natural environment and
elevating the state of social economy of the
community in the exploration and post-
mining period.

14
15
 Economic Performance 37.31%
of the total budget for community empowerment programs
in 2009 was allocated to the economic sector

Direct Economic Value [EC1]

Sales Net Sales (US$)
3.000
2.500 2.407
2.000
1.500 1.618
1.000 1.003 1.146
500 697

2005 2006 2007 2008 2009

in million (US$)

Distributed Direct Economic Value (US$) [EC1]

Operational Technical Services Dept 3.780.217,77
Cost Geology Dept 8.250.650,03
Mining Dept 10.956.430,27
Road & Infrastructure Dept 12.349.748,96
Safety Dept 603.944,43
Enviro Dept 8.394.765,83
Land Acquisition Dept 1.102.987,65
Crushing Dept 30.989.238,69
Shipping Dept 41.462.768,54
Accounting/Finance Dept 187.720,15
Adm Dept 7.386.911,75
External Relation Dept 7.637.048,96
Community Development Dept 3.354.656,53
Banjarmasin Office Representative Dept 232.288,57
TOTAL 136.689.378,13

Community Adaro Indonesia’s Community Empowerment Budget 2009

Investment
[EC1]
332
6.045 Economic
Education
11.437 Health
3.575
Social Culture
Operation Cost
9.263 (rate: 1 US$ = Rp 9.300,-)

16
Product Benefits [EC9] 1-2.5%
Lowest content of dust among other types of
coal produced for the global export market

“
Coal extracted from the mining sites of Adaro Indonesia is
very clean with very low content of sulfur, dust and nitrogen.
Because of its environmentally sound characteristic, this coal
type is globally known as “envirocoal”. Being the most
environment friendly solid waste fuel, envirocoal is also called
“the solid natural gas”.

”
Having the lowest dust
content (only 1-2.5%) compared to
other types of coal extracted and sold in
the global export market, the use of
envirocoal:
• Saves the consumers’ expense due to
the low cost of dust disposal.
• Reduces the deposit inside the furnace
and, hence, increases thermal
efficiency and lessens maintenance
costs.

Coal with a low content

of nitrogen (0.9%) enables:
• Consumers to lower the cost of
reducing the content of nitrogen oxide
in the chimney.
• Consumers to produce more salable
energy and to lower the cost of
electricity production. Low content of
nitrogen (0.9%) and

With the low content

sulfur (0.1%)

of sulfur (0.1% only), envirocoal

enables consumers to:
• Fulfill environmental standards.
• Postpone capital expenditure for the
installment of gas desulfurization
equipment in the chimney such that Lowest content
the operating factory costs can be of dust (1-2.5%)
reduced (the total cost of installing a among other
types of coal
set of desulfurization equipment is up produced for the
to 20% of the total capital expenditure global export
of putting up a new power plant). market

17
 Local Development

Local Suppliers [EC6]

During 2009, Adaro Indonesia initiated

partnerships with 504 local suppliers
domiciled in Kalimantan. Total expenditure
for the local suppliers was up to US$
54,891,814.33.

Local Employment [EC7]

In the employee recruitment system,

Adaro Indonesia gives equal employment
opportunities and prioritizes the local
workforce to fulfill the vacant positions.
Nevertheless, the company recruits non-
locals based on the needs of the
organization.

“
Comparison between the Number of Local Comparison between Local & non-Local
and Non-local Employees Employees by Employment Levels
The number of local Employee of December 31, 2009 Employee of December 31, 2009

employees (with a 700*

composition of 76.22%), which 600
100.00% 100*
refers to the number of 90
58.5% 38.8% 11.1%
500
Kalimantan native-born 513
88.9%
80
people working in Adaro 400 76.22%

Indonesia, is far above the 300

391 70

number of non-locals. 60

”
200
61.2%
23.78% 50
100
122
0 40
Each employee candidate has an equal LOCAL NON LOCAL TOTAL
41.5%
right and opportunity to get the job and 30
*EMPLOYEE (people)
to be a part of the company by considering
20
the abilities and skills that he or she has

“
and also by results of recruitment testing 10
conducted by the company.
0
Local employees also fulfill MANAGEMENT STAFF NONSTAFF
managerial positions with a *EMPLOYEE (people)
composition of 40% of the LOCAL % NON LOCAL%

total number of managerial

employees.

”
18
Community Development [S01]

Managerial Approach Carrying out intensive communication by considering regulations, social

with the community and government aspects and the normative local culture
or customs.

“
The community development
program inidicates the
Adaro Indonesia’s Community Empowerment
Objectives Increasing the quality of social life and
economy
company’s commitment to Minimizing the negative impacts of
operations on the community in the
natural environment surrounding mining locations.
conservation and
Moto String up love, create partnership, and grow
development of the together with the community.
community’s state of social-
The Principles of Development 1. Independent
economy in the exploration Program 2. Continuity
and post-mining periods. 3. Carefulness
4. Trusteeship
Hence, the community 5. Mutual benefit
development program
The Location of Community In line with the coverage areas of mining
includes the community Empowerment operation [2.5], the locations are:
development plan that South Kalimantan Province:
considers the local culture and 1. Tabalong Regency
2. Balangan Regency
potentials and the overall 3. Hulu Sungai Utara Regency
development goals as well. 4. Barito Kuala Regency

”
Central Kalimantan Province:
1. East Barito Regency
2. South Barito Regency

In line with the company’s mission, the The Four Pillars of Community 1. Development of the Economic Sector
strategies of Adaro Indonesia in carrying Empowerment 2. Development of the Education Sector
out the community development program 3. Development of the Health Sector
are: 4. Development of Socio-Cultural Sector
Internally:
Setting up the CSR Department
Increasing internal coordination
regarding the mining expansion plan
such that potential conflicts can be
predicted and anticipated.
Increasing communication skills in
order to be able to respond to
complaints immediately and to
prioritize a dialogue for a consensus
in decision-making and problem-
solving processes.

Externally: Training on sewing

Periodically monitoring the skills, a community
community’s social condition and its empowerment
development. program, is specially
designed for local
housewives

19
“
THE DEVELOPMENTAL STAGES of the COMMUNITY DEVELOPMENT PROGRAM

On arriving at the current

state, Adaro Indonesia has
been carrying out CSR since Yayasan
1994. Initially, the company’s Forming Team
Local Govt,
Adaro
Bangun
Negeri (YABN)
Adaro
activities largely included Local CD
Team YYSKSI
Forming
Team Local

giving donations without Local Team

YYSKSI LPB
Adaro Pama
LPB Adaro
Pama
Govt, Adaro

Local CD

systematic planning. Over Local Team Team YYS KSI

YYSKSI LP3 Adaro
Pama LPB Adaro

time, Adaro Indonesia has

Pama
Involved
local CD LP3 Adaro
team Pama
been developing systematic Program
Kayuh
Forming
team

and well-planned programs

baimbay
Program
implemented
that put into account
Charity by company

stakeholder interest and 1996 1999 2000 2002 2004 2006 2009 2010

participation in order to PIONEERING ESTABLISHMENT IMPROVEMENT

empower the community.

”
Adaro Indonesia’s community development programs are managed by the CSR
Department, which is led by a Department Head.

PERFORMANCE INDICATOR

PROGRAM INTERMEDIATE OBJECTIVES FINAL DESTINATION

Adaro Indonesia has set-
up clear Intermediate
Objectives and Final
Destination in order to
measure the THE CRITERIA of INDEPENDENT SOCIETY:
successfulness of its
community
empowerment programs
EKONOMY
Business unit develops
EDUCATION Education services quality increases
Health service quality increases INDEPENDENT SOCIETY
Well-implemented socio-cultural program
HEALTH
Program sustainability
Harmonic relationship with the
SOCIO-CULTURE community
Posses income resources that can sustain the family life with no depency to corporations or government
Posses adequate intellectual capacity to complete with otjer community groups
Posses the ability of sell and community management so as to avaoid dependency to other parties

FRAMEWORK for IMPLEMENTATION

INDEPENDENT SOCIETY
Community empowerment
programs in economic,
education, health, and ECONOMY EDUCATION HEALTH SOCIO-CULTURE
socio-cultural sectors are
developed by considering
local potential and CORPORATE POLICIES
regulations as well as LOCAL REGULATIONS & POTENTIAL
corporate course of action

20
Target Groups:

1. Falling under Priority 1 are the

villages/community groups that are
already or will be directly connected
to and/or affected by the operation
of Adaro Indonesia.

2. Falling under Priority 2 are the

villages/community groups that are
vulnerable to various needs connected
to the operation of Adaro Indonesia.

3. Falling under Priority 3 are the

villages/community groups that have
interests within the related regency
area.

Management System of Community

Development Program

The CSR programs are designed by taking

into account the community participation
in various activities, starting from planning
and implementation up to monitoring and
evaluation. Usually, a village conference
is conducted in the planning stage and
the plan is implemented through a
participative scheme.

The CSR programs are also developed by

regarding the local policies and potentials
that are in line with corporate policies.
Through a dialogue mechanism with the
forming team, the harmonization between
the CSR programs and local government’s
development programs is ensured, such
that there is no overlapping in the
implementation of the programs.
In carrying out such activities, the needs
of the community are also investigated
by performing a need assessment
mechanism in cooperation with top state
universities in Indonesia and by carrying
out a direct constructive dialogue
mechanism between Adaro Indonesia and
the local community. Through the
dialogues, it is expected that the
community’s initiatives can be stimulated
by considering local potentials in the areas
[EC8].
Community that is
or will be directly
connected with
company
operations is our
primary target of
the CSR programs
Results of the assessment and dialogues mechanism ensures the avoidance of
are usually used as the basis for designing overlapping between the corporation’s
the company’s medium-term plan, whose and government’s programs, which is
implementation can be adjusted by published in writing as the annual regent
concerning the development progress of decree. [EC8].
the local community.
In addition, Adaro Indonesia always
Moreover, based on the previously participates actively in the Discussion on
mentioned assessment mechanism, Adaro the Local Development Planning
Indonesia coordinates with the local (Musrenbang) in the six partner regencies.
regency government for the program
implementation. The coordination

21
 MANAGEMENT SYSTEM of COMMUNITY DEVELOPMENT PROGRAM

POLICY/ VISION/ PLANNING IMPLEMENTATION MONITORING &

MISSION & STRATEGY EVALUATION

>
SUBDISTRICT
VISION/MISSION VILLAGE HEAD The Aspects of Implementa Monitoring Team
ADARO/CD DIALOGUE Synchronization CD Program tion Team
with Local
CD LOCAL Development
POLICY CD LOCAL TEAM ECONOMY LPB, Related Subdistrict
POTENTIAL Head
LOCAL GOVT., EDUCATION LP3AP COMPANY
BUDGET
INDIVIDUAL/ PROPOSAL RELATED (CD Central Team)
ALLOCATION
CD COMMUNITY DEPARTMENT HEALTH YKI
(CATARACT) BPD
PROPOSAL
CD FORMATURE
CONCEPT CD SOCIO-
STUDY CENTRAL TEAM CD Contractor/ Technical
STRATEGIC CULTURE
RESULTS, TEAM Consultant Corporate Team
PLANNING APPROVAL
THE EXPERT ADARO
PROGRAM Special
CD ADARO- Local Special Team/
LIST of Program Community AUDITOR
PEMDA
CONTINUE PROPOSED
THE PROGRAM IMPLEMENT RESULT of
PROGRAM Program, ATION PROGRAM
Budget, STRATEGY IMPLEMENTATION
Objective,
Target

Determine Budget & CD Program

for the Next Year REGENT

MANAGEMENT REVIEW REPORT EVALUATION

Top management of Adaro reviews the Quality, Objective, Quality,

report properness & program Target, Budget, Problem, Objective, Target,
successfulness, quality, objective, target, Suggestion for Budget, Problem
budget realization & planning accordance Improvement

MANAGEMENT REVIEW EVALUATION & REPORTING

22
 CSR IMPLEMENTATION [EC8]
ORGANIZER TYPE NATURE EXAMPLE
COMPANY Charity, as the Grant Scholarship
community service Seed
and community Donation
relations

COMMUNITY Simple projects, which Empowerment Footbridge construction

can be executed by the Grant Village road
community River cleanup
Empowerment
INSTITUTION Long-term and Empowerment Micro Finance Insitution
FORMED by continuous projects Sustainability (LKM)
ADARO Independent Development of Micro,
INDONESIA
Small and Medium-sized
Enterprises (UMKM)
School quality

THIRD PARTY/ Big projects, which Work Contract Building

CONTRACTOR need special knowledge Hospital
and skills Sport center (GOR)

Monitoring and evaluation of the community empowerment program are performed

by:
• The Subdistrict Head
• The Village Representative Body
• The Company Staff
• The External Party

DIRECTION TOWARDS SUSTAINABILITY

CD FUNDS POST MINING

>

Economic Sector Micro Financing > Half of Profits of the

Institution (LKM) Micro Financing
Institution (LKM)

Micro Financing
Institution (LKM)
• Executing
• Channeling

Micro, Small, and Education Sector Micro, Small, and Education Sector
Medium-sized Health Sector Medium-sized Health Sector
Enterprises Social-Cultural Sector Enterprises Social-Cultural Sector
(MSMEs) (MSMEs)
Productive Productive
Business Target Community Business Target Community

23
 Social and Economic Performance
villages in Balangan Regency, since 1997, have become
62
Economy the beneficiaries of the development program of the
outstanding rubber plantation.

Social and Economic Performance Development of the advantaged

rubber tree plantation
I. ECONOMY
Rubber tree plantations are one of the
local potentials. The development of
rubber tree plantations may contribute
Economic development is initated by to the economy of the community through
considering the sectors in which the the absorption of productive workforce
regencies can develop their and, consequently, this may be a reliable
competitiveness and specialIties. The additional or primary household income.
empowerment is also carried out wholly
from up to down stream regarding the
independency aspect.

The economic sectors developed by Adaro

Indonesia are:
1. Development of the outstanding
rubber tree plantation
2. Development of the Micro, Small and
Medium-sized Enterprises (SMEs)
3. Development of the Micro Finance
Institution (MFI)
4. Integrated agriculture
5. Other economic development Objective Expanding landmass
programs: fishery, husbandry, farming, Increasing quality
and development of potential local Product diversification that
products can add values
6. Village Community Economic
Movement (Gema) Activity Donate seeds, disinfectants,
and production equipments;
7. Independent Adaro Development
carry out counseling, group
Movement (Gerbang AMAN) dynamics, cultural training,
post-harvest training, and
quality development through
the rubber fumigation house
management
Rubber plantation is
one of Adaro Location 62 villages in Balangan
Indonesia’s Regency (since 1997), 31
outstanding villages in Tabalong Regency,
programs in order to and 16 villages in East Barito
realize the
Regency
independent
community

Accumulated Number of Participants and Rubber Plantation area

6,000
5,000
4,000
3,000
2,000
1,000
8

99

3
99

01

04

07

08

09
02
99

00

00

20
20
19

20

20

20

20
19

/2
/1

/2
8/
97

02
99
9
19

19

20
19

Number of participants Area Number og Groups

24
 Development of the Micro, Small and “Honey” Small and Medium-sized
Medium-sized Enterprises (SMEs) Enterprises (SME)

Micro, Small and Medium-sized Kabupaten Tabalong adalah salah satu

Enterprises (SMEs) are the economic sentra pemasaran Madu yang sudah cukup
generators that are proven to be terkenal di Propinsi Kalimantan Selatan.
outstandingly durable and adaptable to
the economic crisis. For this reason Micro,
Initial Honey has a high water
Small and Medium-sized Enterprises have Condition content
become the mainstays of local Some honey producers did
development and employment creation. not fulfill legal requirements
(i.e. SIUP, HO, BPOM/Dinkes)
for the product
Objective To be highly competitive
appropriateness standard.
economic actors through
Temporary marketing place,
enterpreneurship
inability to fulfill demand due
empowerment, productivity
to the lack of capital,
improvement, technology
insufficient quality due to the
facilitation, financing and
use of simple production
marketing
process
Activity Human resources
Funding Grant and revolving fund
development, training,
business coach,
Result Fulfilling business legal
management mentoring,
requirements
capital acquisition
Meeting the demand of the
mentoring, marketing
honey market
assistance and technology
Business unit is legal and
assistance
protected by law
Income increases
Partner Business Development
Becoming the role model of
Institute Adaro-Pama
the honey industry that
(Lembaga Pengembangan
produces premium quality
Bisnis Adaro-Pama)
products and has
competitive values
Location Tabalong Regency
Several results of Improving the image of
community Tabalong Regency as the
empowerment through center of the original and
the development of high quality honey bee
Micro, Small and producers
Medium-sized
Enterprises carried out Plan Establishment of marketing
by Adaro Indonesia
and processing building
Honey processing
technology and business
management training

25
 Rp 7.965.427.594,-
was the total amount of funds distributed through
Micro Finance Institution (LKM) in 2009

“Soy Milk” Small and Medium-sized Development of Micro Finance

Enterprises (SME) Institution (MFI)

Initial Lack of legal permit The A Micro Finance Insititution (LKM) is

Condition Inability to meet the market designed to address the financial needs
demand because of of the Micro, Small and Medium-sized
insufficient capital Enterprises (UMKM). Through the
involvement of the Business Development
Funding Revolving fund through the Institute and the Micro Finance Insititution
Micro Finance Institution (LKM), Adaro Indonesia would like to
(LKM) develop potential industries, whose raw
materials are provided and owned by the
Result Number of production
community.
increases, able to meet the
market demand
Goal To be supporting financing
Income of the business
owner increases institutions that can sustain
Business unit is legal and the economy of local
protected by law community in the
Quality of the produced soy surrounding area of
milk increases operation of Adaro Indonesia

Objective Providing capital access to

Plan Monitoring the business
progress and evaluate the the Micro, Small and
continuity of payment to the Medium-sized Enterprises
Micro Finance Institution (UMKM), whose businesses
(LKM) are viable but not yet
Business management banking-feasible
training Facilitating soft loan access
by channeling program to
local community/the Micro,
Small and Medium-sized
Micro Finance Institution
(LKM) Banua Bauntung Enterprises (UMKM), which
has opened capital access have pioneering and feasible
for Micro, Small and businesses, in the
Medium-sized Enterprises’ surrounding area of
operations operation of Adaro Indonesia

Type of Providing loans, teaching the

Total Funds Disbursed by the Micro Finance Institution (MFI) [EC1]
Program community to save, business
coaching and book keeping
Rp. 8.522.206.496 for clients , consultation and
5.406 customers
field mentoring

Rp. 5.220.827.436 Rp. 7.965.427.594 Commen The Micro Finance

5.398 customers 4.217 customers
Rp. 6.415.446.689 cement Institution (LKM)
5.833 customers
development for the
economic development of
local community began in
Rp. 1.402.710.057
1.951 customers June 2005 and was initiated
through the establishment
2005 2006 2007 2008 2009
of the Micro Finance
Funds Disbursed Insitution (LKM) Banua
Bauntung, Tanjung Branch.

Partner PT PNM, the Business

Development Institute (LPB),
Micro, Small and Medium-
sized Enterprises (UMKM)

26

Location Tabalong Regency, Balangan
Regency, East Barito Regency,
South Barito Regency, Hulu
Sungai UtaraRegency
Beneficiary Micro, Small and Medium-
sized Enterprises operating
“
Adaro Indonesia pays attention to the integration of livestock
and plantation resources in order to generate maximum
biomass output in particular ecological environment and
socio-economy.

”
in rubber, rattan, palm sugar,
and repair shop businesses

Integrated Agriculture
As a mining company that cares for the
social and natural environment, Adaro
Indonesia always tries to harmonize the
needs for the capacity of natural
environment and the available potentials.
An appropriate interaction among the
above mentioned elements may generate
complementary and synergetic responses,
which can stimulate production efficiency
and strengthen the economy of the
integrated agriculture.
Objective Giving good examples to the local community in managing
integrated agriculture
Creating employment and business opportunity
Initiating cooperation with the related parties as the first phase towards
community partnership
Learning vehicle for the local community in the surrounding operating
area
Activity Development of cattle breeding, community internship of potential
chicken farmers, development of compost, biourine and biogas,
development of green plant and development of horticulture
Commencement The integrated agriculture program was commenced in 2006 and
initiated through the procurement of 100-head of Bali cattle
Partner PT Japfa, PT Fajar Indo Mandiri, PT Bank BRI

Progress Bali Cattle : from 100 up to 190

Premium/Excellent Cow : 325 cows
Broiler : 18.000 broilers/cycle
Fertilizer : 70 sack/day
Bio Gas : 1 Unit
Green Plant : 38,8 Ha
Worker (cattle & cow) : 34 persons
Worker (broiler) : 6 persons

INTEGRATED AGRICULTURE SCHEME

ADARO INDONESIA

Micro Financing
JAFPA PT FAJAR INDO MANDIRI FARMER GROUP
Institution (LKM)

INTI
Horticulture
INTI INTI Livestock
Plantations
Poultry Cattle Forage
Breeeding
COMPOST Bio Gas
BIO URINE

Community Community Benefits to Natural Environment

Training & Internship
Facilitation with JAPFA
Facilitation with BRI
Compost
Receive the steer
Surrender the first calf
Utilization of compost & bio gas
Energy Saving
Reduction of Global Warming
Reduction of the Destruction of
Ozone
Reduction of livestock waste
Reduction of chemical fertilizer

27
 Other Economic Development Programs
Other potential businesses in the
surrounding area of the mining operation
of Adaro Indonesia are fishery, husbandry,
farming, and the development of
outstanding local products. The activities
carried out by Adaro Indonesia are:
Fishery:
Considering the characteristics and
potential of rivers and wetlands in South
Kalimantan, the main development areas
of fishery are the fish cage, net and pool.
The activities are:
Providing a grant and loan for the fish
cage fishery business in Suput Village,
which resulted in the increasing
productivity and income
Cultivation of nile tilapia and patin fish
(freshwater catfish) in Tabalong
Regency
Cultivation of patin fish and the
procurement of fishery equipment in
South Barito Regency
Development of fish cage fishery in
Barito Kuala Regency
28
Husbandry:
Development of the cross-breeding
goat farm, Etawa in Islamic boarding
school, Al-Islam in Kambitin Village
Development of the duck farm, Alabio
in Banua Lawas Village, Tabalong
Regency
Development of a cattle farm of the
husbandry groups in Lampihong,
Balangan
Develoment of broiler farms in Dahai
Village and Padang Panjang
Development of a free-range chicken
and broiler farm in Barito Kuala
Regency, in cooperation with the
Husbandry Government Agency in
Barito Kuala. Under this program, a
cow-dung processing community
group has also been established.
Farming:
Development of the “Sumber Rejeki” Farm
Group in Manduin Village, through a series
of grant donations for the HT repairment,
the establishment of the equipment
warehouse, hand tractor and power tracer,
the paddy field formation, and the
demonstration plot (demplot) of the
making of a paddy dike. The results are:
an increase in the harvest quantity, a
reduction in time and costs for land
management and harvesting
 “
Other potential businesses in the surrounding area of the
mining operation of Adaro Indonesia are fishery, husbandry,
farming, and development of outstanding local products.

Development of the outstanding
local products:
Some of the outstanding local products
developed by Adaro Indonesia are natural
honey in Tabalong Regency, palm sugar
in Balangan Regency and rattan craft in
South Barito Regency. A show room is
currently being built, in cooperation with
the National Craft Board of Balangan
Regency (Dekranasda Balangan), to create
access and to support marketing.
”
Development of electricity in the
villages:
Electricity in the villages has been
developed in order to stimulate economic
activities of the villagers. Solar cells were
donated to 18 houses in the neighborhood
group (RT) 7 in Wonorejo Village, Juai Sub-
district, Balangan Regency. Eighteen units
of solar cells were given to Gudang Seng
Village, Banua Sub-district, East Barito
Regency.
SID (Survey identification design)
and DED (detailed engineering
design) to handle the flood and to
maximize the paddy field:
The land potential in Lajar, Mundar and
Papuyuan Village is underused because
of flooding. To solve this issue, Adaro
Indonesia, in cooperation with the
Department of Public Works in Balangan
Regency and consultants, is working on a
land utilization assessment.

29
 Gerakan Ekonomi Masyarakat Desa (Gema Desa)
Village Community Economic
Movement (Gema)
Adaro Indonesia initiated Village
Community Economic Movement (Gema)
in order to stimulate the economic
development of the village community.
To make the programs effective, Adaro
Indonesia cooperates with the local Islamic
boarding school, non-governmental
organizations (NGOs), youth organizations
and the Military District Command
(KODIM). The programs are classified into:
Gema of the Village of the Islamic
Pupils (Gema Desa Santri)
Gema of the Village of the Islamic Pupils
(Gema Desa Santri), which is carried out
in cooperation with:
The Islamic boarding school, Darul
Mustafa in Masingai I Village, Upau
Sub-district. The activities aim for the
development of horticulture and
husbandry.
The Islamic boarding school, Al Islam
in Kambitin Village. The acitivites focus
on integrated husbandry development.
Gema of the Pioneering Village
(Gema Desa Pelopor)
Gema of the Pioneering Village (Gema
Desa Pelopor), aims to give or expand
business opportunities to young pioneers
and cadres in the village.
The revolving soft loan to the fishery
Business Unit ”Makmur Jaya”, which
resulted in an increase in production
quantities and income and the
establishment of a family recreation
area.
The formation of a pre-cooperative in
Bilas Village, which has become the
embryo of a multi-type commerce
cooperative. This program became a
30
“
collective business unit in Bilas Village
and the medium for learning and
performing organizational exercises, Stimulating economic
which strengthens the cooperation
and the spirit of mutual cooperation,
development of small
communities in cooperation
and lessens the growth of unfavorable
moneylenders and middlemen. with the Islamic boarding
school, non-governmental
Gema of the Village of the NGOs
(Desa LSM)
organizations (NGOs), youth
organizations and the Military
Gema of the Village of the NGOs (Desa District Command (KODIM).
”
LSM), is a form of CSR concept competition
and, especially for the first place winner,
the competition includes CSR
implementation. The NGO Langsat is the
most recent first place winner, which is
currently developing the indigenous craft
industry in Tabalong. It is expected that
the craft development program can
employ a greater number of young local
workforce.
Gema of the Patriotic Village
(Gema Desa Patriot)
Gema of the Patriotic Village, is a food
security program that is designed in
cooperation with the Military District
Command (KODIM) in Tabalong.
Establishment of pre-
cooperative provides
the medium for
learning and
organizational
training, enhances
teamwork and spirit
of mutual
cooperation
 Independent Adaro Development
Movement (Gerbang Aman)

Adaro Indonesia’s commitment to social

“
... developing a successful role
model of an independent
and environmental responsibility includes village that can be replicated
efforts to create an independent society
during the post-mining period. In order in other villages

”
to boost the establishment of an
independent society and by considering
the wide operational area covering 61
villages in Ring 1 (top priority) and located
in 6 regencies in 2 provinces, a succesful
role model of independent village that
can be replicated to other villages is
needed.

Criteria for Independent
Village
The leadership of village head takes into account public
aspirations and interests
A harmonic relationship exists among the institutions in
supporting the village developmental processes
The village administration is well-managed and can support
the establishment of outstanding public services
The village has short, medium, and long-term development
schemes
The community groups possess economic business units that
sustain the economic development of an independent society.
Basic needs for the community are available and accessible

Objective Community development in the surrounding area of the

company towards the development of an independent village.
Harmonic relationship between the company and the
surrounding local community.

Initial condition
The community received donations and this practice generated
a dependency, created demanding characteristics and
consumptive behavior (less or unproductive).
The community was very suspicious of Team Care of the Bogor
Agricultural Institute (Tim Care IPB) as a group that merely
protected Adaro Indonesia’s interests
Initial negative perspective of the community towards Adaro
Indonesia
The community was easily provocated and often scapegoating
other parties, having unrealistic and inproportional attitudes
The mutual assistance as local wisdom was diminishing
Low participation of the community in village development
Low quality and performance of village officers
Low cooperation between community members and
stakeholders
Land resources were not fully and productively utilized

Progress 1. The trust, in which Team Care of the Bogor Agriculture

Institute (Tim Care IPB) and Adaro Indonesia empowers
the community towards the independency already exists.
2. The community has started to realize the needs for future
development and independency.

31
 3. The perception and attitude towards the productivity and
independency have been developing.
4. The synergetic cooperation and partnership among related
parties have been growing.
5. The community has begun to consider participating in village
development.
6. The village heads and officers have realized the need to
increase the quality and service performance.
7. The community has begun to join the productive economic
development program that is potentially sustainable (as
the institutionalization concerned)
8. Productive economic groups have been established and
institutionalized
9. The village asset management team was created

Partner Team Care of the Bogor Agricultural Institute (Tim Care IPB)

Location Dahai Village and Padang Panjang Village

Communities have
started to realize the
need for future
development and
independency.

32
Social and Economic Performance
Education

Social Sosial
Kinerja and Economic Performance
dan Ekonomi A program on the improvement of
teachers’ quality and school
management
II. EDUCATION

Teacher Training
The education program was initiated to This is initiated through a series of training
improve the human resource quality and workshops for the teachers, school
through educational, moral and religious principals and observers in Tabalong
values development by considering the Regency (142 schools), Balangan Regency
local potential. Adaro Indonesia was called (22 schools), and East Barito Regency (13
to get involved in developing education schools).
because the company realizes that
education is the key factor for local Up to 2009, the number of teachers and
development. school principals joining the training
Before formulating the program, an program has been:
assessment of educational aspects in the
area is usually conducted as the basis for
the program design. Number of School Training Participants
(person)
5500
The educational program consists of: 4500 4359
1. A program on the improvement of 4000 3871
teachers’ quality and school 3500

management towards an equal quality 3000

2500 2729
of local education to that of the
2000
developed regions. 1500
2. Bookmobiles, to fulfill the increasing 1000 1142
527
reading interest of the pupils. 500 615 488
3. A scholarship program, which can 0

stimulate educational achievement, 2006 2007 2008 2009

for students from low-income families accumulated number of participants

and outstanding students. teacher, school head, supervisor

4. An improvement and procurement of

educational facilities.
Partner The Institute of Education’s Potential Development Adaro – Pama (LP3AP)

Result The improvement of:

Insights into educational development (35%)
Teaching skills (25%)
Motivation to be an outstanding teacher (34%)
Responsibility for the accomplishment of a lecturer’s duties (16%)
Belief to guide the pupils successfully (42%)
The spirit to develop teaching ability (24%)
Ability to use the presentation media and teaching presentation tools
appropriately (32%)
Self-confidence (26%)
Teaching spirit (30%)
Creativity and innovation (30%)
The needs for the quality development training (29%)

33
Pilot Schools
• Objective: to become benchmark
schools in the development of
educational quality in the surrounding
areas of operation of Adaro Indonesia.
• Target: to become high quality schools
in terms of educational quality,
teaching-learning process and school
management by the year 2012.
Development of Islamic School
(Madrasah)
• The purpose of the development’s
program is to empower the Islamic
schools towards independent
institutions that can generate and
manage funds on their own.
• Partner: The State Institute of Islamic
Religion in Banjarmasin
The Archipelago Teacher Conference
For the last three years Adaro Indonesia
has been supporting 25 teachers in joining
the Archipelago Teacher Conference in
order to give insights and opportunities
to acquire new knowledge for the teachers
in the surrounding area of the company’s
operation.

• Number of pilot schools: 3 elementary

schools, 3 junior high schools and 2
senior high schools are developed in
Tabalong Regency (South Kalimantan)
and East Barito (Central Kalimantan)

• The activities conducted in 2009 were:

Trainings and workshops for all
teachers in the schools, which aimed
at the development of knowledge and
learning-teaching process.

Formulation of the educational quality

standard through the involvement of
teachers and school principals and by
considering the culture of the schools

Providing schools with the

Management Information System for
Educational Institution as a parameter
of a pilot school.

Empowering school principals towards

high competencies, including in
designing and implementing the
quality management system for
schools such that the schools would
appropriately possess the vision,
mission, strategy, program, standard
and procedure, and a quality control
to ensure a high quality of graduates.

Empowering pupils towards high

learning skills, such as memorizing,
mind mapping, fast reading and
resume writing.
“
...to improve the human
resource quality through
Partner: The Institute of Educational
educational, moral and
Potential Development Adaro – Pama religious values development
(LP3AP) ...

34
”
 Mobile Library Scholarship Program

• In order to stimulate the learning and • Scholarships have been given to

reading spirit of the pupils and the
community at large, Adaro Indonesia
through LP3AP launched a mobile
library on National Education Day,
May 2, 2006.
elementary, junior high school, senior
high school pupils and undergraduate
students since 2000 in the 5 regencies
of Tabalong, Balangan, East Barito,
South Barito, and Barito Kuala

• Three vehicles were designed as • Objective: to support the

mobile libraries to serve Balangan,
Tabalong and East Barito Regency
• Over the years, the size of the book
collection has increased up to 15,698
copies and about 5,000 titles, including
textbooks, scientific books, fairy tale
books, and life skill books, such as
books on rubber tree plantation,
farming and fishery.
government’s program in developing
human resources’ quality and to
increase the motivation of pupils to
be achievers.
The number of scholarships based on the
school level and area:
Number of Grantees of Adaro Indonesia’s Scholarship Program

2500
• The average number of books
borrowed from the mobile libraries is S1, 167
201 copies per day or 1,207 per week. 2000
SLTA, 264
S1, 91
• Partner: The Institute of Educational
SLTA, 180
Potential Development Adaro – Pama 1500
SLTP, 430
(LP3AP).
S1, 53 SLTP, 466
1000 S1, 44 S1, 38
SLTA, 100 SLTA, 118 SLTA, 135
SLTP, 197 SLTP, 188 SLTP, 183

500

0 SD, 729 SD, 689 SD, 701 SD, 1037 SD, 1436
2005 2006 2007 2008 2009

S1 SD SMP SMA

Adaro Indonesia, in cooperation with the Top: Scholarships have

local government of Balangan Sub- been provided for
elementary, junior high
district, the local branch of the National
school, senior high school
Education Office and the local and undergraduate
educational institution, empowers pupils students since 2000 in 5
in preparation for the National Final regencies: Tabalong,
Examinations (UAN). Balangan, East Barito,
South Barito, and Barito
Kuala Regency.

35
 “
TAHUN TABALONG BALANGAN BARSEL BARTIM BATOLA JUMLAH
SD SLTP SLTA S1 SD SLTP SLTA S1 SD SLTP SLTA S1 SD SLTP SLTA S1 SD SLTP SLTA S1 SD SLTP SLTA S1

2000 80 12 6 220 18 12 60 12 6 360 42 24 0 We additionally award the

2001 132 36 6 186 30 18 68 16 4 386 82 28 0
2002 182 40 15 204 30 18 138 30 18 524 100 51 0 second and first place
2003
2004
216
214
33
36
6
4 15
170
170
42
42
18
28 13
48
48
30
30
6
12
100
114
15
15
12
15 5
534
546
120
123
42
59
0
33
among senior and junior
2005 234 78 40 25 222 42 35 19 121 59 13 152 18 18 9 729 197 106 53 high school students in
South Borneo Province .
2006 195 65 40 25 228 49 35 19 119 50 19 147 24 24 669 188 118 44

”
2007 277 107 60 23 228 42 36 15 20 7 3 176 27 36 701 183 135 38
2008 350 182 70 23 384 80 48 19 0 159 45 18 235 45 17 21 68 32 90 5 1037 456 180 91
2009 376 194 70 50 384 77 40 45 120 60 124 33 456 99 30 33 120 60 122 6 1436 430 264 167
2010
JUMLAH 2.256 783 317 166 2.376 452 288 130 742 453 250 - 1.380 243 152 14 - - - - 4.469 1.931 1.007 426

Bukti nyata keberhasilan program Number of Participants of the Study Tutoring

bimbingan belajar: Program

2500
2.230
Dari hasil ujian akhir nasional Tahun
2000
ajaran 2007/2008, Kabupaten Balangan 1500
berhasil mendapat peringkat 3 Tingkat 1000 2.002
SLTA dan peringkat 2 untuk tingkat 500
1.877
SLTP se-Kalimantan Selatan. 0
2007/2008 2008/2009 2009/2010
Pada tahun ajaran 2008/2009, prestasi
siswa meningkat. Kabupaten Balangan Accumulated Number of Participants

meraih Peringkat ke II untuk SLTA dan

Peringkat I untuk SLTP se-Kalimantan Passing Percentage of Pupils in
Selatan. the Try Out 2009
84%
Try Out 4
85%

68%
Try Out 3
68%
36%
Try Out 2
27%

Try Out 1
1%
Adaro Indonesia also 4%
organizes an exam 0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
simulation (the try out), SLTA SLTP Source: Primagama in Balangan
for students in Balangan
Regency, which has
proven effective in
improving students’
capacity to pass the
exam

36
 Improvement and Procurement Adaro Indonesia’s commitment to
of Educational Facilities educational development resulted in the
following achievements:
1. In 2009, Adaro Indonesia was
Infrastructure [EC8]:
awarded the Gold Winner of KSN
• Putting up a clean water treatment in
Awards in the Social/Natural
the Elementary and Junior High
Environment category, the Program
Schools Banua Lima in East Barito.
for 9 Years of Basic Education. The
• Building a gate and rest rooms in the
winning program was the Quality
Elementary School Plus Murung
Development on Education through
Pudak.
LP3AP adjoining with Adaro
• Building a physics and chemistry
Indonesia.
laboratory in the Junior High School
Plus Murung Mudak.
2. In the CSR Awards 2009, the Quality
• Fixing the building and facilities of
Development Program on Formal
the Elementary School Laburan.
Education through LP3AP was
recognized First Place in the Social
National Movement of Foster Parents
category.
(GN-OTA)
In cooperation with the taskgroup of GN-
OTA in each regency, Adaro Indonesia
donates clothes and school equipment to
School bag donation
pupils from low-income families. are very valuable and
beneficial for
School Bag Donation elementary students.
Every year, about 3000 school bags are
distributed to new elementary school
pupils in the neighboring area of operation
of Adaro Indonesia.

Development of Higher Educational

Institutions
A college or university is a stimulating
institution and a change agent for
development. For this reason, Adaro
Indonesia gives a contribution to local
colleges, one of which is the College of
Administration Tabalong. The contribution
is given in the form of the improvement
of facilities and assistance to new students.

Middle: School bags

are distributed in the
Walangkir State-
owned Elementary
School, Tanta –
Tabalong
Bottom: Students of
Banyu Tanjun State-
owned Elementary
School, Tanjung –
Tabalong, show their
joy and happiness

37
 Social and Economic Performance 3.608
patients from cataract through cataract surgeries
Health fully recovered.

Social and Economic Performance Accumulated number of cataract patients

Kinerja Sosial dan Ekonomi
4000*
III. HEALTH 3500 3420 3608
The objectve of the 3000
program is to reduce the 2500 2534 3067
number of cataract
The health program of Adaro Indonesia patients in the
2000
aims to increase the health level of society. 1500 1439 1933
neighboring area of the
operational location of 1000
Adaro Indonesia and the 500
Cataract Screening and Surgery patients’ dependency
623
ratio. Until 2009, Adaro 0
Indonesia has provided 2003 2004 2005 2006 2007 2008 2009
Recognizing that many local people suffer medical treatment for
*person
from cataract, Adaro Indonesia in 3,608 cataract patients Accumulated Patient

cooperation with the Indonesian

Humanitarian Foundation (Yayasan
Kemanusian Indonesia) has been
organizing cataract surgeries for the
community since May 2003 in 6 regencies
in the surrounding area of Adaro
Indonesia. The regencies are Tabalong,
Balangan, Hulu Sungai Utara, East Barito,
South Barito, and Barito Kuala.

The objectve of the program is to reduce

the number of cataract patients in the
neighboring area of the operational
location of Adaro Indonesia and the
patients’ dependency ratio. Until 2009,
Adaro Indonesia has provided medical
treatment for 3,608 cataract patients

The cataract surgeries are performed in a

modified eye-clinic and surgeon mobile
in order to make it reachable for patients
in remote areas.

38

KIBLLA (Health of Mother,
Newborn Infant and Child) Village
In 2004, the infant mortality and maternal
mortality rate in South Kalimantan were
60 per one thousand and 126 per one
hundred thousand, respectively. The
primary causes of the high mortality rates
were asphyxia and hypothermia.
Partner The Alliance of White
Ribbon Indonesia (APPI)
Objective To increase public awareness
for the efforts needed to
protect and save mothers,
newborn infants and
children below 5 years old
from fatalities.
To create a wide network of
organizations, institutions or
individuals who care for the
health of women in
pregnancy, prenatal and
childbirth, as well as the
wellbeing of newborn infants
and children below 5 years
old.
To facilitate the development
of health services, to
campaign for clean and
healthy living.
To support the government’s
programs on health and
humanity.
Types of Community counseling for
activities clean and healthy living
behavior, especially during
pregnancy and prenatal, until
childbirth such that babies
and children below 5 years
old can maintain good
health.
To carry out the economic
development for women
and to increase their role in
village development. For
example, mothers are
encouraged to possess the
Improvement of health service
quality, promote clean and healthy
lifestyles.
“
ability to increase their
economy by growing and
producing vegetables or ...to protect and save
cultivating oyster mothers, newborn infants
mushrooms and celery. It is
expected that the output of and children below 5 years
the planting can fulfill the old from fatalities.
”
daily needs of nutrition and
can be sold to provide
additional income for the
families. In the future, the
output of the vegetable farm
may contribute to the
valuable nutritious food in
the Center for Pre and
Postnatal Health Care for
Women and Children
(Posyandu).
Providing scholarships for
midwife training for local
teenagers; it is expected that
they would want to return to
their villages and develop the
local health. This idea is
supported by the Health
Department in both Tabalong
and Balangan Regency. Health Community
Developing health Center (Poskedes),
infrastructure, which is the developed health
Community Health Center
infrastructure and
health services to
(Poskedes), and health improve the health of
services in Dahai, South
mothers, newborn
Kalimantan. Another role infants and children
model village under the below 5 years old
KIBBLA program is Warukin
Village. In 2009, the number
of KIBBLA villages increased
in Balangan Regency.
The villages chosen for
KIBBLA villages are those in
isolated areas with very
limited availability of health
facilities.
Moreover, Adaro Indonesia
provides a Maternity Social
Fund (Dasolin). Initially,
this was a loan program for
pregnant mothers who
needed money to pay for
birthing expenses. Currently,
low-income families are
welcome to apply for the
loan.
39
 20
The Water Treatment Plant produces 20 litres of
clean water per second.

Clean Water Provision

Starting from the concept of 3R (Reduce,

Reuse, & Recycle), Adaro Indonesia uses
and processes the water resource from
the mining operation into clean water that
is valuable for the community.

Adaro Indonesia installed a Water

Treatment Plant (WTP) T300. It is a water
processing system, which alters waste
water from the mining operation into
consumable clean water that meets the
quality standard. [EC8]

WTP T-300 can produce and supply clean

water at 20 liters per second or 72 m3 per
hour by using two clean water tanks with
the capacities of 450 m3 and 72 m3.
Currently, the output of WTP T-300 is used
by the employees of Adaro Indonesia, the
partners and several villages in Dahai and
Padang Panjang by using water tank trucks
for distribution.

In the near future, Adaro Indonesia will

set up a clean water distribution system
by using pipes to Dahai and Padang
Panjang Village. The piping system is now
under construction.

“
...a water processing system,
which alters waste water from
the mining operation into
consumable clean water that Adaro Indonesia put up
the Water Treatment
meets the quality standard.

”
Plant (WTP) T300, which
is a water processing
system that alters the
waste water from
mining operation into
consumable clean water
that meets the quality
standard

40
Social and Economic Performance 109
religious and public facilities were
Socio-Culture funded in 2009.

KinerjaSosial
Kinerja Sosialdan
danEkonomi
Ekonomi Number of Facilities for Socio Culture
Development

IV. BIDANG SOSIAL BUDAYA 140*

120
57
Socio-cultural activities aim to enable local 100 74
people to actualize themselves in religious,
80
sportmanship, art and cultural aspects.
60 3
In the context of community development, 58
40
the social capital and local wisdom are
the keys of sustainable empowerment. 7
20 28
Since the Indonesian people possess the 2
mutual assistance principle as their social 0 11
capital, community participation is one 2007 2008 2009
thing that should be considered. *unit
mosque chruch public facility

In order to realize the purpose of creating

an independent society through
sustainable community development,
Adaro Indonesia carries out socio-cultural
programs through the exploration of local
wisdom and the generation of social
capital by implementing the CSR programs. Realizing the purpose
of creating an
independent society
through sustainable
Types of activities: community
1. Religious development: assistance for development
renovating and developing houses of
worship [EC8], and the donation for
holy days and religious activities. Locations where In-kind Contributions for Socio-cultural Sector were distributed
2. Sports development: providing sports
140*
facilities and funds for sport
competitions, such as Adaro Volleyball 120
Cup, Adaro Tennis Cup, and Adaro 100
Football Cup. 80
3. Art and cultural development:
expanding and promoting the potential 60
local arts and culture to larger 40
exposure at the regional, provincial, 20
national and international levels. Some
0
of them are the local arts of Upau,
Warukin and Halong, Islamic arts, and Tabalong Balangan Bartim Barsel HSU Batola Total
marching bands from Tanjung, *unit
Balangan and Batola. 2007 2008 2009

41
 Public Facilities [EC8] Rp 4.110.600.000,-
total budget for putting up clean water
piping system

The following is the list of public facilities constructed by Adaro Indonesia as a

Kinerja
part Sosial
of the dan Ekonomi
community empowerment program:

THE LIST of DEVELOPED ENFRASTRUCTURES in THE CSR PROGRAM of ADARO INDONESIA in 2009 [EC8]

No. Name of Program Location Explanation

1. Establishment of Balangan Stadium, Phase I Balangan Establishment of running track and drainage system are accomplished. The program
is carried out gradually.
2. Establishment of Sumber Rejeki Sport Facilities Balangan Bandminton and volley ball court.
3. Laboratorium of Murung Pudak Junior High School Plus Tabalong Physics and Biology Laboratorium.
(SMP Plus)
4. Toilet and Fences of Murung Pudak Junior High School Plus Tabalong -
(SMP Plus)
5. Establishment of Kindergarten and Reading Center and Tabalong -
Toilet Rehabilitation of Laburan Elementary School (SD)
6. Kindergarten Pirsus Balangan -
7. Clean Water Piping System Dahai-Padang Panjang The program is carried out gradually with the target of completion in the year 2010.
The total budget is Rp.4.110.600.000,-
8. Padang Panjang Village’s Community Hall Tabalong Development is ongoing.
9. Dahai Siraturrahman Mosque Tabalong In-kind Contribution.
10. Poly Clinic for Medical Specialists and Emergency Unit East Barito Development is ongoing.
(UGD) of Tamiyang Layang Provincial General Hospital
11. Emergency Unit (UGD) of Hospital Dorys Sylvanus Central Borneo Building and equipment. Physical development is ongoing.
Plangkaraya and its Facilities
12. Establishment of Library and Student’s Health Unit (UKS) Ambahai, HSU -
of Harapan Mulia Kindergarten
13. Establishment of Toilet of Al-Madina Kindergarten Paringin, HSU -
14. Showroom for Outstanding Local Products Balangan Development is ongoing.

Several public
facilities founded
by Adaro
Indonesia

42
Indirect Economic Impacts [EC9]

“
The existence and growth of new businesses in the surrounding area of operation of
Adaro Indonesia indicate indirect economic impacts of the presence of the company.
A research on this issue was conducted, especially in Tanjung, the capital of Tabalong Existence and growth
Regency.
of new businesses in
The study showed that each new business establishment could create new employment surrounding areas of
for two local people and the types of businesses that could create high employment operation of Adaro
were capital intensive businesses, such as motorcycle dealerships, electronic shops
and auto-electronic shops.
Indonesia creates role
models in the economic
The study on the types of businesses, sales turnover and profits of the non-mining sector towards an
industry sectors, which were economically related to the existence of Adaro Indonesia,
independent society.

”
was conducted in 2007 and showed the following results:

Non-mining Type of Business Weekly Sales Weekly Profits

Sector (Rupiah) (Rupiah)

Service Sector Hotel, Motel, Boarding Room 43.165.000 22.605.000

Hairdresser 3.350.000 1.400.000
Parking Lot for Motorcycles 700.000 700.000
Small Restaurant 12.000.000 3.600.000
Car Wash 896.000 436.000
Dynamo Repair 2.500.000 875.000
Car Accessories & Variation 73.800.000 5.200.000
Car Garage 2.100.000 700.000
Games Center for Children 3.500.000 200.000
Water Tank Truck Supplier 1.215.000 60.000.000
Trading Sector Electronic Shop 162.500.000 36.800.000
Mining Safety Equipment Shop 3.750.000 3.750.000
Drug Store 300.000 280.000
Technical Tools Store 7.000.000 210.000
Groceries Small shop 27.100.000 13.340.000
Construction Material Store 60.000.000 3.000.000
Home Appliances 29.375.000 3.825.000
Office Supply 10.000.000 2.000.000
Optic/ Eye Clinic 2.500.000 800.000
Tailor 350.000 35.000
Pastry 1.700.000 100.000
Motorcycle Dealer 400.000.000 67.500.000
Furniture Store 12.500.000 3.125.000
Shoe Shop 1.750.000 210.000
cellphone Load & Accessories 200.000 125.000
Fishery Sector Fish Cultivation 200.000 200.000

Other impacts on the community: the creation of role models in various aspects of economy,
education, health and socio-culture toward an independent society.

Impacts on the company: the creation of a harmonic relationship between the company,
community and government, the improvement of the corporate image, and the assurance
of operational continuity.

Impacts on the government: the local development programs can be realized, especially in
the economic, educational, health and socio-cultural aspects.

43
 Prioritizing Safety
and
Environmental
Conservation

Adaro Indonesia develops and implements an

integrated management system called the
Adaro Safety, Environmental, Production (ASEP)
Management System.

Hydroseeding revegetation
as a rehabilitation effort
on the former mining site.

44
45
 Protecting Occupational Health and Safety

Adaro Indonesia
provides personal
protective equipment,
uniforms and safety
equipment to all
employees for free

Environmental, Production (ASEP) The company is responsible for any

Protecting Occupational Health
Management System. The ASEP incidents related to the occupational
and Safety
Management System is an essential health and safety, which is indicated and
element for the employees in increasing written in the Collective Labor Agreement
By referring to the regulations and their productivity and company’s (PKB), [LA9], as the following:
standards, especially ISO 14001 and production and in managing the natural • Health issues: Adaro Indonesia
OHSAS 18000, Adaro Indonesia develops environment regarding the applied provides and takes care of the medical
and implements an integrated Occupational Health and Safety (K3) and facilities, routine health check-up,
management system called Adaro Safety, Natural Environment regulations. outpatient, hospitalization, surgery,
birth, hearing aid, and the Worker’s
Social Security Program (Jamsostek)
SHE covering a fatality, accident in the
DIVISION
workplace and retirement.
• Safety issues: Adaro Indonesia
provides personal protective
Management Involvement, Recruitment, Selection, equipment to all employees, uniforms,
Planning & Leadership Placement & training
BARGE & safety equipment to employees at
MINE & HAUL
DIVISION
LOADING particular high-risk workplaces, and
DIVISION
safe transportation according to the
safety standard.
Risk Management,
Emergency Crisis Preparedness & Inspection, Audits, review,
Contigency Planning Evaluation & Remedial Actions Counseling to the employees and their
families is continuously conducted as an
effort to prevent and control the risk of
dangerous diseases [LA8]:
• Health counseling is carried out by the
Communication &
Behaviour Management
Incident Reporting, company’s medical doctor regularly.
Investigation & Analysis
• Medication for employees suffering
from dangerous diseases is carried out
HRGA EXT REL continuously by the company’s
DIVISION DIVISION medical doctor.
CSR & Operational &
Off The Job SHE Process Safety

CONTRACTOR

46
Regarding its achievement in protecting the occupational health and safety, Adaro
Indonesia received an appreciation on the safety from the Ministry of Mining and
mineral Resources in 2001 up to 2005 and in 2009.

Below is the number of accident cases of Adaro Indonesia and its contractors in 2009
[LA7].

Number of Accidents in Workplace

25* 80
75
70
20 22
60
One of the
50 occupational safety
15
12 40 40 signs
10 30
7
29 20
5 5
6 20 10
5
0 0
ADARO PAMA BUMA SIS RA ADARO-Sub*))

*) Amount *)) Corporate

Minor Injury Fatal Property damage,

Lost Time Injury Serious Environmental
Source: SHE
Contaminated
Report 2009

In order to mitigate potential risks, Adaro
Indonesia employs basic values for
addressing potential risks:
• The potential risks mitigation has to
become a liability
• The potential risks mitigation has to
become a need
• The potential risks mitigation has to
become a culture
Adaro Indonesia applies a high level of
discipline to all employees, especially
those who directly work in the mining
sites (those whose work is closely related
to the occupational safety issues). In order
to ensure high discipline behavior, Adaro
Indonesia carries out the following efforts:
• Inviting a psychologist to carry out
counseling for employees,
• Reminding the importance of work
discipline, especially in connection to
occupational safety through various
ways, one of which is the socialization
of the President Message.
• Induction of all parties (guests and
employees) when entering the mining
sites.
• Socialization and evaluation of the
accidents occurred in the mining sites.
• Setting up and managing the Discipline
Committee, in which its members are
Personal
the General Operation Manager,
protective
Division Heads, Department Heads, equipment for
Human Resources Section, and the employees in
OPA Labor Union. the workplace

47
 Conserving the Environment

Initiative to Reduce the Impact on 6. Reduction in the use of paper by

the Environment [EN26]
Adaro Indonesia has initiated to reduce
impacts on the natural environment from
the process of operations. Some of the
activities are:
1. Reduction of greenhouse gases by
lessening the use of diesel fuel,
through:
a. The use of solar panels for running
several supporting equipment for
the operation
b. The use of used oil as the mixture
material of explosives
2. Reduction of air blast noise by using
the stone material split and plug
system that can produce a noise level
at 90 dB (A). This noise level is below
the quality standard/normal limit of
110 dB (A) (refer to the Indonesian
National Standard SNI.7570-2010)
reusing scrap papers for printing and
using the internal network for
communication. Even though there
are no documentations on the
reduction of paper quantity used and
reused, this effort has given benefits
to the company.
7. Fixing the design of the waste dump
by changing the slope from 20° to 26°
in order to prevent errosion. The
change was conducted after a study
on the errosion in the dump site was
carried out by the geotech section.
8. Minimizing the impact of
transportation activities through
appropriate maintenance of vehicles,
Routine check on reduction of dust and coal spills, and
the solar panel is
controlling the noise level.
carried out by field
staff of Adaro
Indonesia.

3. Reduction of vibration: by creating a

line drill and air deck in the explosion
area. The level of vibration can be
reduced from 3 mm/s down to 2,5
mm/s. This vibration level is below the
quality standard/normal limit of 3
mm/s (refer to the Indonesia National
Standard SIN.7571-2010).

4. Reducing leftover food waste by

converting it into compost, in
cooperation with Hokkaido and
Lambung Mangkurat University since
2007.

5. Since the end of 2009, the mud slayer

has been used to reduce the number Adaro Indonesia is
responsible to
of consumable drilling materials for
reduce the impact
the drilling process. Some of the of operation on the
materials are the drill mud, benthonic, natural
and stargel. environment, such
as dust from
vehicles and organic
waste.

48
The initiatives to reduce the impacts on the natural environment are
explained below.

Energy [EN3]

Adaro Indonesia’s operations use the direct

energy from:

Non-renewable Energy: Diesel Fuel

Diesel fuel is provided by Adaro Indonesia

to be used by the contractors for the Renewable energy: Solar Energy
production process, including blasting. In
2009, the use of this non-renewable direct Solar energy is used to replace diesel fuel
energy source increased by 49% due to for generating electricity to be used for
the rise in production volume. running supporting equipment in the
The use of non-renewable direct energy operation. The next figure describes the
source (diesel fuel) amount of solar energy production, which
is equal to the amount of diesel fuel
Amount of solar energy production, which is energy reduction:
equal to the amount of diesel fuel energy along
2008-2009
The Use of Solar Energy Source that is Equal to
(x 1.000 L) (x 1.000 GJ) the Reduction of Diesel Fuel Energy in 2008-2009
450.000 16.000 (x1000 L) (x100 GJ)
40 14
Total Direct Energy
400.000 14.460 14.000
35 12 12 Total direct energy (the sum of non-
350.000 12.000 30
300.000 396.644 34 10 renewable and renewable energy)
10.000 25
250.000 9.696 20 7
8 consumed by Adaro Indonesia is:
265.968 8.000 6
200.000 15 20
6.000 10 4
150.000 Total Direct Energy Consumed
5 2
100.000 4.000
50.000 2.000 2008 2009 (x 1.000 L) (x 1.000 GJ)
0 450.000 16.000
Liter Gigajoule (GJ) 400.000
2008 2009 14.461 14.000
350.000 12.000
Liter Gigajoule (GJ) 300.000 9.697 396.664 10.000
250.000
8.000
200.000 266.001
150.000 6.000
100.000 4.000
50.000 2.000

2008 2009

Liter Gigajoule (GJ)

49
 Energy Efficiency and the Use of
Renewable Energy [EN5]

The product of Adaro Indonesia is an

energy-efficient coal due to its high
burning efficiency level (about 99.7%)
Adaro Indonesia has been performing
various efforts to reduce its energy
consumption, which are:
1. Using solar energy by installing solar
cell panels that produce electricity to
be used for running equipment which
support:
a. Survey activities: the solar energy
source is used by the AWS
(Automatic Weather Station) in two
different locations, the RTK GPS
Radio repeater in four locations
and the field office in one location.
There are no documentations yet
regarding the use of energy for the
equipment in all these locations.
b. Mining operations: some of the
equipment using solar energy are
the slope stability monitoring
equipment, Pama repeater T300,
UT view point communication
equipment, SIS repeater and
transmitter.
The energy conversion from diesel fuel
to solar cell energy is carried out
gradually. The daily savings of diesel
fuel as an energy source in 2008-2009
due to the energy conversion is shown
as follows:
Diesel fuel daily savings due to solar cell energy
subsitution
100
80
92
60
40
55
20
The yearly diesel fuel savings due to the 2. Reduction in diesel fuel consumption
solar energy substitution (assuming that by replacing it with used oil.
the equipment is used 365 days in a year)
is explained below: Adaro Indonesia is also able to reduce
its diesel fuel consumption for
detonation activities by using used oil.
Diesel fuel energy savings as the source of
electricity Initally, diesel fuel was used as the
mixture of Ammonium Nitrate (AN) of
(x100 GJ)
40 14 the ANFO explosive material. With the
35 12 12 agreement of the State Ministry of
30 10 Natural Environment of the Republic
34
25 8 of Indonesia, the diesel fuel can be
20 7
6 replaced by used oil at 25%
15 20
4 substitution level (2008-2009), and
10
5 2 with the Ministerial Decree of the State
Minister for Natural Environment
2008 2009 No.20 in 2010, the use of diesel fuel
was reduced to 50% quantity. The
Liter Gigajoule (GJ)
utilization of used oil can save the use
of diesel fuel up to 50% quantity
without lessening the explosion
quality.
3. Fuel savings by turning off the engines
when idling for a long time. There is
no data for the savings because there
is no measurement yet.

2008 2009

Liter/day

50
 Restored Biodiversity and Habitat
There is no conservation area, or, location
that has a high biodiversity and is classified
as a protected habitat or area in the
35,800.80 Ha area covered in the Coal
Contract of Work (PKP2B) of Adaro
Indonesia [EN11].
However, Adaro Indonesia gives
contributions through reforestation and
progressively manages and monitors the
natural environment. The natural
environmental management and
monitoring is conducted based on the
Environmental Impact Assessment (EIA),
which is approved by the government
[EN14].
The existence and development of the
flora and fauna, as an indicator of the
impact on natural environment, would
always be monitored. The impact could
be resulted fom the land clearing activities
and exist up to the end of exploration.
Then, a rehabilition would be
implemented at the former mining sites
[EN12].
Monitoring the flora and fauna in the
natural and affected areas is conducted
once a year. The results of previous
monitoring showed that there is no
endangered species affected by the mining
operations.
The condition of biodiversity of each
mining site is [EN11]:
1. Tutupan Mining Site
Ecological value in this location is good
enough and is indicated by the formation
of vegetation in the secondary forest and
mixed gardens, and also by the diversity
of mammals, birds and reptiles found in
the location. The vegetation analysis and
the species matrix in the beginning of 2010
in Tutupan area, the natural vegetation
formation and mixed gardens:
1) The secondary forest in the
observation area at various
vegetation levels, especially at the
under-canopy level and shrub layer,
is classified as having low and very-
low biodiversity.
2) The fauna diversity relatively
follows the diversity of the plants,
except in special cases such as the
shrub layer which is the habitat of
mammals and birds. In case with
a poor diversity of shrub
vegetation; and a very low diversity
of mature trees, sapling and
seedling levels have shown that
the diversity of birds and mammals
species is sufficient.
51
2. Wara Mining Site
The ecological value of this location is
good enough and is indicated by the
formation of vegetation from the
secondary forest and mixed gardens, and
also by the diversity of mammals, birds
and reptiles found in the location. Results
of the vegetation analysis and species
matrix in the beginning 2010 show:
1) A monoculture vegetation, such as
the wholesome rubber tree
plantation, palm oil stand and re-
vegetation with low variety (<3
types), indicates a low level of plant
diversity and a very low level of
several vegetation layers;
2) The fauna diversity relatively
follows the diversity of the plants,
except in special cases such as the
shrub layer which is the habitat of
mammals and birds. In case with
a poor diversity of shrub
vegetation; and a very low diversity
of mature trees, sapling and
seedling levels have shown that
the diversity of bird and mammal
species is sufficient;
52
3. Paringin Mining Site
The formation of natural vegetation and
mixed gardens, which consists of fruits
and natural plants, has high ecological
values compared to those of other
formations, such as the bushes or empty
area, the vegetation area, the wholesome
rubber tree plantation and the palm tree
plantation. The results of vegetation
analysis and the species matrix in the
beginning of 2010 in Paringin area are:
1) The secondary forest in the
observation area at various
vegetation levels, especially at the
under-canopy level and shrub layer,
is classified as having a low and
very-low biodiversity.
2) The fauna diversity relatively
follows the diversity of the plants,
except in special cases such as the
bushes vegetation which is the
habitat of mammals and birds. In
case with a poor diversity of shrub
vegetation; and a very low diversity
of mature trees, sapling and
seedling levels have shown that the
diversity of bird and mammal
species is sufficient.
In line with the Environmental Impact
Assessment (EIA) document, Adaro
Indonesia carries out reclamation and re-
vegetation in former mining sites in order
to manage the biodiversity and make the
areas useful and beneficial, through:
[EN14]:
• The development of local plants in
Kalimantan, in cooperaton with
Lambung Mangkurat University
and the Banjarbaru Office of
Forestry Research [EN13].
• The implementation of reclamation
in several stages, which are: land
structuring, erosion control,
hydroseeding, and fast-grow and
perennials planting.
• The cultivation of various plants,
including the original forest plants
of Kalimantan, annual plants, and
fruit plants in the reclamation area.
Some of the plants are Chinese
Albizia (Albizia chinensis), Acacia,
Leucaena/the leadtree, Samanea
saman (the rain tree), Gliricidia
sepium (Gliricidia), eucalyptus, and
Sesbania grandiflora (the
hummingbird tree).
Some rehabilitated areas are inside the
former mining site in Paringin [EN13].
 Greenhouse Gas Emission [EN16] Air Emission [EN20]

Total greenhouse gas emission of Adaro
Indonesia has been computed by using
the data of total fuel consumption in 2009,
which is 396,664,379 liters or equal to
104,787,662 gallons. The total includes
only the fuel consumption of the
contractors in the mining sites and does
not include fuel consumption for other
activities.
The methodology to compute the
greenhouse gas or CO2 equivalent follows
that of the USEPA (2005): Emission Facts:
Average Carbon Dioxide Emissions
Resulting from Gasoline and Diesel Fuel.
EPA420-F-05-001 and IPCC (2006): The
formula for the computation is [3.9]:
The air emission measurement is carried
out on the ambience air quality. The
parameters for measurement are dust,
PM10 dan PM2,5, fallen dust, NH3, Cl2, HF,
H2S, HCl, SO2, NO2, Opacity, Pb Cd, Zn, Sb,
As and Hg.
The air emission measurement is carried
out bi-annually on the main sources of
emission, which are the 21 units of
generator used daily for the operation.
The measurement shows that the
emission is still under the allowed
maximum emission standard issued by
the government (KEP.13/MEN LH/3/1995).

2,425 grams C/gallon * 100% oxidation

The results of measurement of the 21 generators
factor * 44 g CO2/12 g C *
1 metric ton/1,000,000 g Emission Unit Range of Measurement Maximum
Results Standard
= NH3 mg/m3 0,0242 - 0,4904 0,5
8.89*10-3 metric tons CO2/gallon of C12 mg/m3 0,5 - 9,5 10
gaspelumasne HF mg/m3 0-9 10
Sumber: www.epa.gov/cleanenergy/energy- H2S mg/m3 0,0111 - 0,8685 35
resources/calculator.html HCL mg/m3 0 - 2,4498 5
SO2 mg/m3 3,163 - 36,3559 800
Berdasarkan perhitungan diatas maka NO2 mg/m3 18,403 - 537,9563 1000
emisi gas rumah kaca di Adaro Indonesia Debu mg/m3 1,9239 - 325,0872 350
adalah sekitar 931.562 metric tons CO2. Opasitas % 0 - 30 35
Pb mg/m3 0 - 9,6768 12
Cd mg/m3 0 - 0,0877 8
ZN mg/m3 0 - 5,4318 35
Sb mg/m3 0 - 0,0423 12
As mg/m3 0 - 0,0549 8 Operational air
Hg mg/m3 0 - 0,0005 5 emissions are always
Source: Primary Data, Department of Manpower and Transmigration, monitored and
Secretariat General Center for Occupational Health and Safety, 2009 minimized.

Routine
monitoring on
emissions is
carried out.

53
 Water and Waste Water
In the loading facility in Kelanis, the
company draws water from the river to
be consumed for domestic needs, such as
to drink and to clean up the coal (in order
to ensure the quality of the coal). Total
volume of water drawn from the river in
2009 was 656,355 m3 [EN8].
Total amount of Water Drawn and Used
from the River in Kelanis
33.739
622.616
3
water treatment total volume (m )
3 Water Drawn
water spray (m )
In the mining process, a large amount of
ground water floods the mining area. The
water then would be pumped out from
the mining wall aquafier, in order to ensure
the mining wall stability, such that the
mining activities would be safer.
This ground and surface run-off water,
with a total volume of 153,000,000 m3 in
2009 [EN8], , was managed by Adaro
Indonesia. The water is usually collected
in a pond. Half of the water is reused while
the other half is usually flown to the
recipient water body after being
processed.
54
About 2,600,000 m3 or 2% of the total
volume of the water (in 2009) was used
to hose the mining road and several
locations at the hauling road, especially
from Km 73 up to ROM 1 (High Wall), from
Km 68,5 up to 73 and the Panas Market
in Kelanis. This activity is usually conducted
by using the water tank trucks with
capacities of 20,000, 50,000, and 80,000
liters.
Water recycling was also conducted to
about 150,000 m3 or 2% of the water (in
2009) by converting the previously
mentioned water through the Water
Treatment Plant (WTP) T.300 into clean
water. WTP 300 was set up in 2008 on the
west side of the Tutupan mining site. The
recycling capacity is 20 liters per second
and the storage capacity of the clean water
is 450 m3 and 75 m3. [EN10].
Ground water and surface run-off water
drawn and used in 2009
No Item Amount (m3)
1 In pit sum (from the 153.000.000
ground water) and
surface runoff water in
Tutupan
The road in the mining
site is hosed every day Water Drawn
to reduce dust
2 Water Treatment Plan 153.000
(WTP T300)
3 Water Used to Hose 2.600.000
the Road
The concepts in managing the in-pit sump Flow Chart of the Waste Water Treatment System
and surface run-off water are [EN21]:
• Preventing the surface water from
the undisturbed area coming into
the settling pound.
• Designing the settling pond by
considering the catchment area
and rainfall.
• The standard design of the settling RUN OFF & IN PIT SUMP IN PIT POND
pond uses three compartments
with different functions.
• The use of physical and chemical
processing.
• The maintenance of settling pond
is carried out to avoid
sedimentation.
• The monitoring of result at the
structuring spot uses pH, TSS, Fe, WATER TREATMENT PLANT SETTLING POND WATER BODY
Mn, and daily debit as the
parameters.

Adaro Indonesia’s
effort to use and
alter waste water
from mining
operations into
consumable clean
water resulted
recognition from the
Minister of Social
Affairs in the CSR
Awards.

Based on the regent regulations (SK Bupati)

of Tabalong No 274 in 2008, Balangan No
188.45/021/Kum in 2008, Balangan No
188.45/126/Kum in 2009, and South Barito
No 389 in 2006, Adaro Indonesia is allowed
to dispose processed waste wáter into the
main river bodies, including the Balangan
and Tabalong River.

55
 Solid Waste [EN22] The amount of leftover waste food and • Hazardous waste: is delivered to
the compost produced is shown as the third party to be processed
follows: according to the permit and
Amount of processed waste and produced
regulation of the Ministry of
Every day, Adaro Indonesia produces waste
compost Environment and the Directorate
in the form of:
General of Transportation. Adaro
160* 154,76 Indonesia does not transport
• Non B-3 waste: 140 hazardous waste outside the
120 115,73
country. [EN24].
The waste from activities in the 100
office area is disposed to the dump 80 86,56
site (TPA) of the local regency 60
government. 40 38,89 36,25 42,15
20
The leftover waste food of the 0
contractor members in the 2007 2008 2009
working area is processed into
compost in cooperation by *Hundreds (Kg)
Hokkaido and Lambung Mangkurat
University.

Processing leftover
food from the
workplace and
converting it into
usable compost

56
 1-2.5%
Kandungan Abu Envirocal terendah dipasaran
batubara global

Amount of Hazardous Waste in 2009

Unit of
No Waste Type Measurement Sumber Adaro Buma Puma RA SIS KELANIS

1 Used Oil Liter Workshop 49,700 583,540 1,534,600 382,360 909,682 18,000

2 Used Battery Pcs Workshop 6 590 1,337 6 427 *

3 Used Filter Pcs Workshop 100 22,425 37,095 20,588 130,378 *

4 Grease Waste Kg Workshop 2,980 0 3,417 0 0 1,255

5 Paint, Thinner, and Drum Workshop 0 0 0 0 1,241 *

Solvent Cans

6 Utility Rag Waste Karung Workshop 330 395 23,096 0 2,318 4,700

7 Sawdust Karung Workshop 0 0 0 0 103 *

8 Empty Printer Pcs Office 0 92 0 10 310 *

Cartridges

Used Flourescent
9 Pcs Office 0 0 0 1,021 0 *
Lightbulbs
10 Empty/Used Fuel Pcs Workshop 0 0 0 215 1,482 0
Drums

11 Diesel Fuel Waste Liter Workshop 0 0 147 0 0 *

12 Grease Waste Liter Workshop 0 0 0 0 66 *

13 Used Hoses Pcs Workshop 0 1,028 1,139 10 10,512 *

14 Welding Wire Kg Workshop 0 0 0 20 6,325 *

Waste

15 Used Gloves Pcs Workshop 0 45,558 0 0 369,456 *

Source: Hazardous Waste Balance Sheet of Adaro Indonesia
Note: *) unit of measurement of waste of the loading facility in Kelanis is in “drum”, which contains various (B3) Dangerous & Poisonous Waste such as used battery, hose, tube
lamp waste, used filter, welding wire, and glasses. Total number of the drum was 149 in 2009.

Reuse of Used Oil in 2009 for the Mixture of Explosive

Half of the used oil from the mining
operations is usually reused for the 30.000
material mixture of explosives (ANFO- 27.500 26.360
25.000
emulsion). About 178,521 liters of used
20.000 20.874
oil was reused in 2009. The allowed 20.000
16.627
composition is 50% used oil and 50% 15.000 14.500
14.020
diesel fuel. The proportion rose from the 12.500 12.150
10.000 10.000
previous composition of 25%.
5.000 4.000
0
0
ry

r
ril

ne

oc er
au y

ve r
de ber
fe ary

ch

em t
ay

se gus

be
no be
l
ua

ju

b
ap
m
ar

ju
nu

m
m
to
br

ce
ja

pt

Waste Oil (liter)

57
 Kesehatan dan Keselamatan Kerja

Activities of Reusing Used Oil as the Additional Material for Blasting in Adaro Indonesia.

Service Unit Pretreatment with Filtering Storing in TPS

Mixing Solar Fuel and Used Mixture is carried out by the The Flow In and Out of Used Oil is
Oil in the Mixing Plant special unit (the Blasting Unit) recorded in the logbook

Mixing Ammonium Nitrate with Diesel Explosion Produces Zero Balance Explosion results no boulder-shape
Fuel + Used Oil (ANFO) for the Oxygen (White Smoke) fragmentation
Explosive

58
 Spills [EN23]
Hydrocarbon (oil and diesel fuel) spills
occured in 2009 and, to handle this, Adaro
Indonesia has implemented the System
and Procedure on Hydrocarbon
Management and has set up a particular
team that manages hydrocarbon spills.
The spills were successfully isolated in the
mining sites to prevent negative impacts
on the external environment.
Frequency of spills in 2009
14
12
10
8
Impact of Transportation Activities this are measuring the dust content
[EN29] of the air in the area and carrying
out a coal treatment procedure.
· Coal spill from coal loading,
The impact of transporting products and
transporting and dumping
services on the natural environment is
activities. To handle this, a
described as follows:
procedure on coal spill treatment
· Gas emission that pollutes the air has been implemented.
from vehicles. To minimize this, the · Noise due to the coal dumping
vehicles are routinely maintained activities. The efforts to minimize
and emissions are measured. the impact are monitoring the
· Fuel consumption of the vehicles. noise and managing the dumping
The efforts to improve this are procedure.
maintaining the vehicles regularly
and carrying out an energy
efficency program.
· The dust in the air due to coal
loading, transporting and dumping
activities. The efforts to address

6
4

2
0
PAMA BUMA SIS RA ADARO

Cost for the Environmental Cost for Managing the Environment

Management [EN30] (jutaan rupiah)
18.000
16.305 15.654
16.000
Adaro Indonesia has committed to
14.000
managing and monitoring the natural 12.000
environment. In 2009, the spending for 10.000
7.982
managing the natural environment was 8.000
Rp. 47.901.200.679. 6.000
3.914
4.000 2.849
2.000
637 353 206
0
t SP en
t on nd nt rch tc.
t m en
e of m etati ing a rol n me on sea nt ng, e
a c ge g r t o i e e i
tre an na -ve ctu on vir vat al R pm ort
ter inten l Ma Re Stru ion C al En bser ent velo Rep
a i d s ur O nm De
w Ma pS
o
Lan Ero Nat o
ste To vir and
Wa En

59
 Improving the
employees

This Section Describes the

Impact and Performance of
Adaro Indonesia’s Operation
on Employees.

Adaro Indonesia gurantees and subscribes

employees to the Worker’s Social Security
Program (Jamsostek)

60
61
 Improving the Employees

Improving the Employees

There are 513 employees working for

Adaro Indonesia. They are classified into
Management, Staff and Non-staff [LA1]:
Based on employment status, more than
half of the employees are permanent
employees.

Composition of the Employee Group by

Status

600*

500 101

400 25
412
388
300

200 Based on the age of employees, more Based on the origin of employees, more
than half of the employees are at a than half of the employees are local
100
productive age between 31 and 40 years people because Adaro Indonesia gives fair
0 old. employment opportunities and prioritizes
2008 2009 local workforce. Fourty percent of the
*KARYAWAN (orang) individuals at the management level are
Non-permanent Permanent also local people.

Composition of the Employee Group by Age Workforce as of December 31, 2009

600* 600*

500 19 500 100,00%

16 123 513
400 400 76,22%
110
300 205 300 391

200 175 200

23,78%
100 162 100
112 122
0 4 0
2008 2009 LOCAL NON LOCAL TOTAL
*EMPLOYEE (people) *EMPLOYEE (people)
>50th 41-50th 31-40th 21-30th <20th source: HR Report, 2009

62
Comparison between Local & non-Local Based on the gender, the number of The data presented above shows the
Employees by Employment Levels female employees has increased and number of employees of Adaro Indonesia
women already fulfill managerial positions. only. If employees of the sub-contractors
100% are also counted, the total number of
58,5% 38,8% 11,1% workforce is 1,117 people. The number
90% Composition of the Employee Group by
Gender and Employment Level of people working in the area of operation
80% 88,9 of Adaro Indonesia would be 12,623
100% people if employees of the four main
70% 1 1
39 40 contractors, namely PT Pamapersada
90%
60%
10 10 Nusantara (Pama), PT. Bukit Makmur
297
61,2 80%
288 Mandiri (Buma), PT. Sapta Indra Sejati
50% (SIS), and PT. Rahman Abdi Jaya (RA), are
70% also included.
40%
41,5 60%
30% 20 Comparison of the Number of Local and
50% Non-local Employees Between Companies
14
20% as of December 31, 2009
40%
10% 4500
30%
0% 121 145 4000 1181
MANAGEMENT STAFF NONSTAFF 20%
3500
NON LOKAL % LOKAL %
10%
3000
0% 3044
2008 2009 2008 2009 2500 1026
MAN WOMAN
2000
MANAGEMENT NON STAFF STAFF 1197
1500 1693
339
1000 180 1207
937 316
500 833
668
0
ADARO PAMA BUMA RA SIS OTHER

NON LOCAL % LOCAL %

The increase in the number of employees

in 2009, compared to that in the previous
year, followed the increasing volume of
production in 2009.

63
Possessing a Mutual Work Agreement
The rights and liabilities of the employees
and the company are written in the
Collective Work Agreement (PKB). The
agreement is usually reviewed every two
years in a meeting with the (OPA) Adaro
Labor Union.
The content of the Collective Work
Agreement in general is about the
employment regulations concerning the
rights and liabilities of the employees, the
professional relationships and the
industrial/employment dispute resolution.
Aspects included in the Collective Work
Agreement (PKB) are:
1. Status and facilities,
2. Professional relationships, working
days and hours,
3. Annual Leaves,
4. Permission to leave,
5. Salaries, wages and benefits, and
medical benefits including the
occupational health and safety
[LA9],
6. Skill development,
7. Order and disobedience,
8. Complaint mechanism,
9. Redundancies.
One hundred percent of the employees
of Adaro Indonesia are protected by the
Collective Work Agreement [LA4].
64
Remuneration and Allowance
Remuneration for the employees is set up
and given according to the employment
laws and regulations, by considering and
is not less than the Provincial Minimum
Wage (UMP) and the Provincial Sectoral
Minimum Wage (UMSP) regulated by the
provincial/local government [EC5].
The salary increase is given based on an
employee promotion scheme for
outstanding employees through
examinantion led by the corporate leaders.
This is also applied to determine the
incentives for the employees.
In addition to salary and wages, the
employees of Adaro Indonesia receive
[LA3]:
1. Overtime wages for non-staff
employees
Freedom of Association 2. Annual, maternity and
menstruation leaves
To ensure its existence in the company, 3. Religious holiday allowance
the employee group has a formal 4. Medical allowance
organization, namely the Adaro Labor 5. Field allowance (especially for
Organization (OPA) that represents the employees in Kelanis and Permata
employees and brings forward Barito),
considerations to the company. 6. Housing allowance (especially for
on-site employees in Kalimantan),
Each employee is a member of OPA 7. Worker’s Social Security Program
through a voluntary membership 8. Medical Services
mechanism. 9. Transportation facilities to
workplace, worship facilities,
entertainment, mobilization costs,
and 3 sets of uniform each year.
Providing Work Protection [LA3] Developing Lifelong and Career-long includes mental (post power syndrome)
Learning [LA11] preparation training, financial
In the aspect of work protection, the management training and other training
company subscribes the employees to the Since 2009, Adaro Indonesia has been according their interests in businesses that
Worker’s Social Security Program implementing the Standard Operating they want to manage after retirement.
(Jamsostek). This is the government’s Procedure on training management to These types of training are also given to
program that should be followed by all ensure that every employee and manager the spouse of the participating employees.
employers and their employees. This receives training programs in order to
program includes: the Occupational develop their knowledge and skills and to If needed, Adaro Indonesia also gives re-
Accident Security Program (JKK), Fatality improve their behavior. employment opportunities to retirees.
Security Program (JK), and Post- Usually, the re-employment is carried out
employment Security Program (JHT). The The training program is designed based in order to develop, guide and grow the
company does not subscribe the on the Performance Development System corporate values of the new employees.
employees to the Health Security Program and the training need analysis. Based on
(JPK) because the company has and the results of the training need In 2009: the average training hours per
implements its own health insurance identification, the annual training schedule employee was 20.6
program that is relatively better than the is developed into three categories, which
Health Security Program (JPK). are: General, Technical and Leadership Number of training hour & participant
Training. Employees who receive training
Employees who should take a bedrest for should present the new knowledge they
(people) (hour)
reasons of non-occupational accidents still acquire and be evaluated by the Division
600 12.000
receive salaries from the company based Head/Section Head.
9.936 10.000
on the following 4-phase mechanism: 500 10.000
Types of trainings: 400 496 488 8.000
For the first four months of absence: At the Managerial Level, emphasizing
100% x salary 300 6.000
soft skill training such as mental
4.400
For the second four months of development, ESQ and an External 200 2.752 4.000
2.952
absence: 75% x salary Leader Camp. 2.176 212
100 2.000
For the third four months of absence: At the Technical Level, training is 110 128 145
50% x salary usually carried out based on the needs
2008 2009 2008 2009 2008 2009
For the next four months of absence: of each department.
MANAGEMENT STAFF NON STAFF
25% x salary (up to termination) Safety is the training about the G R A D E
occupational safety and the Participant Total Hour
certification program concerning the
safety need.
Average training hours per employee

Adaro Indonesia also provides a cross-

(people)
level training for non-staffs, staffs (officers,
70.00
foremen, and supervisors), and employees
from middle-up managerial level. For 60.00
example, the company organizes a Mental 20.75 20.36
50.00
and Physical Training (BINTALSIK) with
40.00
militaristic methodology and led by
20.03 20.49
military instructures. 30.00

20.00
The employees that enter the end-of- 19.78 21.50
career phase also receive training, ”Pra 10.00
Purna Bakti”. One year before the age of 0.00
55, the employees participate in 2008 2009
entrepreneurship training. This training
non-staff staff management

65
 There was a decreasing number of
participants of training and an increasing
number of training days per employee in
2009 compared to 2008 because of the
improvement that we made. Since 2009,
the Training Need Analysis (TNA) was
implemented prior to designing the
training in order to make the training in
line with the needs of the company and
to be able to focus on work issues.
However, it took a long time to develop
the TNA, which resulted in a delay in the
TNA implementation in 2009.

Career development of the employees of

Adaro Indonesia is known as the
Performance Development System
Program. It is a one-year development
program that covers the processes of:
a. Determining the workload in the
beginning of the year
b. Determining the agreement
between the leaders and
subordinates
c. coaching-counseling
d. Performance Review at the end of
the year is carried out together
with the process of identifying the
best employee.
e. Fit and proper test

The number of employees that received

career promotion in 2009 [LA12]:

The number of employees that received

career promotion in 2009

4.5

4
4
3.5

3
3 3
2.5

2
2
1.5

0.5

0
supervisor manajemen

non-staff staff/ foreman

66
Motivating the Employees and
Appreciating the Employees’
Performance [LA12]
To appreciate the employees’
performance, the Reward for the Best
Employee was granted in the period of
2008 up to 2009. Those who received the
appreciation as the best employees are:
Adaro Indonesia’s employees (Staff,
Non Staff)
Sub-contractor employees (labor
supply’s employees, drivers and
contractors’ employees currently
working in Adaro Indonesia)
The announcement of the best employees
was carried out in the event of “General
Morning Talk” at the beginning of the
year. The winners of the Adaro Indonesia’s
Best Employees 2009 were:
Karyawan Teladan Adaro Indonesia tahun
2009 adalah
Level Winner
Staff 1. Kadarisman (External)
2. Syamsul Bahri (Geology)
3. Diki Wandani (Production)
Non Staff 1. Ageng Prasongko (TDS)
2. Supian Syarif (Geology)
3. Rahmat (CPBL)
Labor Supply 1. Supriadi (Production)
2. Emanuel (HRGA)
3. Bijuri (TSD)
Driver 1. Amrullah (Environmental)
2. Gazali Rahmat (TSD)
3. Supriatin (Production)
To motivate the learning spirit of the
employees’ children, the company also
provides Special Educational Assistance
for the employees’ children, who have
good performance in their studies (criteria
for elementary school up to senior high
school pupils: ranked 1st -5th in the class;
for college students: a minimum GPA of
2.75 for those in engineering programs
and a minimum GPA of 3.00 for those in
non-engineering programs).
Turn Over [LA2]
The employee turn over rate was 4% (25
persons) in 2009 because of various
reasons. The main reason was the end of
the work contract and the second primary
reason was the willingness to lift up career
level. Three persons were discharged due
to indisciplinary behavior and sanctions.
Turn Over Karyawan
12
8
2 3
0 0
MANAJEMEN STAFF NON STAFF
Non Voluntary Voluntary
67
How The Stakeholders of Adaro Indonesia
[4.14]
the Stakeholders The stakeholders of Adaro Indonesia are
See Us classified into:
Shareholders
Employees
Contractors
PT Pamapersada Nusantara
PT. Bukit Makmur Mandiri
PT. Sapta Indra Sejati (SIS)
PT. Rahman Abdi Jaya
The Community at Large
Non-Governmental Organizations and
Community Groups
YABN
Islamic Boarding School Darut
Tauhid
Islamic Boarding School
Hidayatullah
Islamic Boarding School Al-Islam
Islamic Boarding School Darul
Musthafa
Daniel Foundation, East Barito
Islamic Boarding School Ilhya
Ulumudin
CRDS
The universities and research
institutions
Hokkaido University, Japan
The Indonesian Institute of
Sciences, Limnology
The Indonesian Institute of
Sciences, Limnology
Bogor Agricultural Institute
Gajah Mada University
Bandung Institute of Technology
Lambung Mangkurat University,
Banjarbaru
The Office of Forestry Studies,
Banjarbaru
The National Institute of Islamic
Religion, Banjarbaru
Amuntai College of Nursing, Hulu
Sungai Utara
68
Local Government
The Provincial Local Development
Body and the Local Development
Body of Kabutan
The Local Government of Tabalong,
Balangan, Hulu Sungai Utara, Barito
Kuala, East Barito, and South Barito
Regency
The Local Government Body on
Natural Environment
The Village Community
Empowerment Body
The Department of Mining and
Energy
The Department of Forestry
The Department of Immigration
The Department of Education
The Department of Health
The Department of Plantation
The Department of Agriculture
The Department of Husbandry
The Department of Fishery
The Department of Cooperatives
and SMEs
The Department of Manpower
The Department of Industrial and
Trading
The Department of Social Affairs
The Statistic Office
The Security
The National Land Agency
The Local Lower House of
Representatives
Mass Media
Kompas Newspaper, Banjarmasin
Post, Bebas Baru Tabloid
Identifying the Stakeholders
[3.5]
The stakeholders are identified regarding
particular criteria, which are the location
proximity, influence on the company,
interests, experience, and professionality.
Based on these, the stakeholders can be
classified based on:
Work partnership
Work location
Organizational relevance and the
insitutional authority on particular
issues
Personage and influence.
In increasing the stakeholder engagement,
the approach used is to make good
planning and to ensure the participation
of stakeholders from the beginning. This
should be conducted through dialogues
with relevant stakeholders regarding their
needs and by asking them to actively get
involved in program implementation
[4.16].
CSR Community Group
Recently, those who hold the Coal
Contract of Work (PKP2P) and Production
Contract (KK) have set up the CSR
Community Group in South Kalimantan
and Adaro Indonesia has been appointed
as the Chair. Through the community
group, it is expected that the mining
corporations can develop and maintain
good relationship with their stakeholders
and that the group can generate new ideas
or regulations to improve the social
performance of the company. [4.13].
“
...make good planning and to
ensure the participation of
stakeholders from the
beginning...
”
The Stakeholders’ Perception [1.2]
Employee
(Teguh Budirianto, Geotech Support,
Electrical)
Teguh has been working in Adaro
Indonesia for three years. He, who is the
President of the Adaro Labor Union (OPA),
is proud of being a part of Adaro
Indonesia. For him, the existence of the
bi-annual training on skills, the employees’
engagement in the efficiency program at
any aspect, the EDUTAMBANG program
and the CSR programs indicates that “the
company, especially the management,
cares very much about the quality of the
employees”.
He was impressed when he and his co-
workers won the Gold Prize in the fire and
rescue competition held by the
Department of Mining. To appreciate his
achievement, Adaro Indonesia gave him
a bonus and allowed him to take a
vacation.
Realizing that the community members
have big interest to work at Adaro
Indonesia, he hopes that the company
may increase the promotion of
recruitment process for the candidates,
such that people can easily receive
recruitment information.
Government
(Mr. Ansharudin, the Vice Regent of
Balangan)
Mr. Ansharudin can not deny that the
development in Balangan Regency is highly
stimulated because of the support from
Adaro Indonesia through its social
responsibility programs. He values that
the programs of Adaro Indonesia
straightforwardly address the needs of the
community, such that the beneficiaries
directly experience the benefits from the
programs.
”Adaro Indonesia is responsible enough
through the development of road
dedicated particularly for the mining
activities and the reclamation of former
mining site appropriately” he said. Besides,
he has seen that the good relationships
with the local government and the
involvement of the local government and
other stakeholders in CSR planning are the
positive efforts of Adaro indonesia.
Mr. Ansharudin expects that Adaro
Indonesia can keep prioritizing local people
in the employee recruitment process and
expanding the programs that are directly
related to the community.
69

Cleric
(KH. Ahmad Rasyidi Amin, the President
of MUI in Tabalong Regency, South
Kalimantan)
KH. Ahmad Rasyidi Amin sees that the
presence of and assistance from Adaro
Indonesia gives positive impacts, including
the impacts on religious aspects, in the
operational area. Nevertheless, he
emphasizes the need to increase
cooperation between Adaro Indonesia
and the ulama. The role of ulama is very
significant in bridging the gaps between
Adaro Indonesia and the community, mass
media and non-governmental
organizations. The ulama has carried out
a multi-stakeholder meeting and would
like to hold the meeting regularly in order
to generate solutions to the problems
occured, without sacrificing particular
parties.
He also expects that Adaro Indonesia can
be more transparent in giving information
to the community.
70
dari budget Pemberdayaan masyarakat 2009
untuk bidang ekonomi
Contractor
(Mr. Agung Hadi Widiyono, CDI Section
Head PT. BUMA)
Since joining one of Adaro Indonesia’s
contractors in 1993, Mr. Agung sees many
positive impacts from the presence of
Adaro Indonesia. One of which is the
economic growth and the development
of life quality of the community.
He saw several incidents, such as water
pollution, land disputes and also
community’s demand for employment in
Adaro Indonesia and its contractors as
well. All of these have taught Adaro
Indonesia to search for the win-win
solutions.
Mr. Agung was very impresed by his
experience of being involved by Adaro
Indonesia in the CSR program on health,
which was the cataract surgery, and on
education, which was the bookmobile
program. ”The contractors usually
participate in every program planning,
including budgeting. The togetherness and
cohesiveness that occurs, creates a
condusive working environment” he said,
whilst expecting that the existing
cooperation could be improved by
maintaining the agreed aspects.
 In 2009, Adaro Indonesia cooperated with
a team from the Center of Demographic
Research of the Lambung Mangkurat
University to carry out a study about the
community’s perception regarding the
CSR programs of Adaro Indonesia in 10
villages around the mining sites. Results
indicate that [SO1]:
Overall, there is a good perception on
the community empowerment
program, except for the area where
its inhabitants only receive restricted
funds and limited programs, or, where
the programs, or, where the programs
are not suitable for the condition in
the area.

Suggestions for improvement are:

To flow funds and carry out the
programs more evenly in ring 1,
especially in the economic
Community developmental aspect.
(Ms. Nordinah S. Ag (50 th) – The parent To engage the community and
of a grantee of the Adaro Indonesia’s village officers in the program
scholarships) planning.
To further study the impact of
. Ms. Nordiah is very delighted because community empowerment
her son, Habibi, has been nominated as program on the level of
one of the ten grantees of Adaro community wealth.
Indonesia’s scholarships for college
education. Habibi is accepted to study at
Bogor Agricultural Institute.

For Ms. Nordiah, as a single parent and

teacher, the Adaro Indonesia’s care is a
blessing that she is grateful for. She
expects that Adaro Indonesia keeps its
commitment to develop education and
the quality of local youths through this
scholarship program. It is expected that
the options of universities and faculties
offered in the program can be expanded,
such that local youths can develop various
other skills. At the end, the students are
expected to implement the knowledge
they have learned, to develop their
homelands. Thank you Adaro!

“
...the Adaro Indonesia’s care
is a blessing that she is
A study on the
community’s perception
grateful for. She expects that of the CSR programs of
Adaro Indonesia in 10
Adaro Indonesia keeps its villages around the
mining sites
commitment to develop
education and the quality of
local youths through this
scholarship program.

” 71
How We This is the second Sustainability Report of
Adaro Indonesia but the first report that
Wrote This was written according to the GRI version
3.0 sustainability reporting standard. The
Report report covers a period of one year, from
January to December 2009 [3.1]. In the
future, the reporting will be carried out
annually [3.3].
The report includes the economic, natural
environmental and social performance,
especially in the area of the company’s
operation and its surroundings in Dahai,
Tutupan, Klanis, and Banjarmasin.
The contents of the report were decided
through a series of cross-division and
cross-management level discussions. In
the discussions, the participants used the
latest guidance from the GRI, which was
the GRI version 3.0, in order to understand
the principles and guidelines to verify the
report content and to ensure the report
quality, and also to guide the participants
in disclosing performance. The participants
in the discussions were from the
Departments of Environmental, Safety,
CSR, HRGA, ERD, Accounting, Geologi,
Geotech, Land Acquisition, PSSP, PNSP,
Hauling and Infrastructure, and from the
two projects located in Paringin and
Kelanis [3.5].
The materiality and priority of the topics
in this report were defined regarding the
observation and experience of the
management and staffs, who were
involved in the reporting development,
and also the availability of data from the
reporting period. The facts written in this
report consequently became the
foundation for the management to
continuously improve the reporting and
the economic, natural environmental and
social performance comprehensively for
the coming periods.
The summary of items and indicators of
GRI version 3.0 fulfilled in this
Sustainability Report are:

Aspect Pg.
Strategy and Analysis 1.1 Statement of the President Director 2
1.2 Description of Key Impacts, Risks, and 13,
Opportunities 69
Organizational Profile 2.1 Name of the Company 7
2.2 Primary Brands, Products and/or Services 5,6
2.3 Operational Structure of the Company 10-11
2.4 Location of Organization’s Headquarter 7
2.5 Locations, where the Company Operates, that 4,19
are Related with Sustainability Issues
2.6 Nature of Ownership and Legal Form 7
2.7 Market Served 6
2.8 Scale of the Organization 7
2.10 Awards Received 8,9
Report Parameters Profile of the Report 3.1 Reporting Period 72
3.3 Reporting Cycle 72
3.4 Contact Point for Further Information 1
Regarding the Report or Its Content
Scope of the Report 3.5 Process for Defining Report Content 69,72
3.6 Boundary of the Report 1
3.9 Data Measurement Techniques and Bases of 53
Calculations of Indicators
GRI List of Content 3.12 Table Showing Reporting Content 72,73
Governance, Corporate 4.8 Mission, Values, Code of Ethics, and Principles 12
Commitments Governance Relevant to Sustainability and Status of
and
Engagements Implementation
Commitment to Any 4.12 Charters, Principles or Other External Initiatives 13
Kind of External to Which the Company Subscribes or Endorsed
Affairs Relevant to
Sustainability
Stakeholder 4.13 Membership in Associations 68
Engagement 4.14 List of Stakeholder Groups Engaged by the 69
Company
4.16 Approaches to Stakeholder engagement 69

72
 Aspek Pg.
Economic Economic EC1 Direct Economic Value 16,26
Indicators Performance
Market EC5 Range Ratios of Standard Entry Level Salary 64
Compared to Local Minimum Wage.
EC6 Locally-based Supplier 18
EC7 Local Manpower 18
Indirect Economic EC8 Development and Impacts of Infrastructure 20,23,
Value Investments for Public Interests 37,40,
41,42
EC9 Indirect Economic Impacts 17,43
Environment Material EN3 Direct Energy Consumption 49
Indicators Energy 50
EN5 Energy Saving
Water EN8 Water Withdrawal 54
EN10 Water Recycled and Reused 54
Biodiversity EN11 Protected/High Biodiversity Value Areas 51
Dampak signifikan terhadap
EN12 Significant Impacts on Biodiversity 51
EN13 Habitats Protected or Restored 52
EN14 Strategy, Current Actions, and Future Plans for 51,52
Managing Impacts on Biodiversity
Emission, Effluent EN16 Greenhouse Gas Emissions 53
and Waste 53
EN20 Other Significant Air Emissions
EN21 Waste Water Discharged 55
EN22 Solid and Liquid Waste 56
EN23 Spills 59
EN24 Transported Waste Under the Basel Convention 56
Products and EN26 Inititatives to Mitigate Environmental Impacts 48
Services
Transportation EN29 Environmental Impacts of Transportation 59
Overall EN30 Natural Environment Protection Expenditures 59
and Investments
Labor Practices and Employment LA1 Total Workforce 62
Decent Work LA2 Total Employee Turn Over 67
Performance
Indicators LA3 Benefits to Employees 64,65
Management and LA4 Collective Work Agreement 64
Industrial Relationship
Occupational Health LA7 Occupational Accidents and Diseases 47
and Safety 46
LA8 Prevention of Serious Diseases
LA9 Occupational Health and Safety Topics Covered 46,64
in the Collective Work Agreement
Training and LA10 Employee Training 65
Education LA11 Skills Development and Lifelong Learning 65
LA12 Performance and Career Development Reviews 66,67
Society Community SO1 Practices to Assess and Manage the Impacts 13,19
Performance of Operations on Communities
Indicator

73
PT Adaro Indonesia
copyright 2010