Labor Practices and Decent Work

Plantation is a labor-intensive business utilizing more manpower than engine power. Plantation has become highly relevant to Indonesia which today is the fourth most populous country in the world with a population of more than 258 millions. Plantation can absorb part of a work force that is abundant and as such can reduce the unemployment rate which is one of main problems in developing countries such as Indonesia. Its presence in remote areas outside of Java Island allows it to play an important role in ensuring an equally distributed development which has become a strategic political issue since the independence of Indonesia.


Managing a labor-intensive business is not easier than managing a capital-intensive business. Low skills and low productivity, remuneration, health and safety are some labor issues faced by numerous plantation companies that endure pressures from the market behavior presently and low prices of commodities.


In any situation, the Company managed its human resources by applying the Astra Management System (AMS) and the Astra Human Capital Management System (AHCM) which are built on the foundation of philosophy: Catur Dharma Astra. Applying AMS and AHCM not only allows the Company along with subsidiaries in the Astra group to be able to continuously face new challenges but also to make Astra as one of cutting-edge business groups in Indonesia and as one of the prominent companies in the palm oil industry sector.


RESPECTING HUMAN RIGHTS

The Company is committed to respect human rights for the sake of humanity itself. The Company’s philosophy, Catur Dharma Astra, underlies its treatments to human resources, namely: First Dharma: To be a beneficial asset to the nation and the country; and the Third Dharma: To respect individuals and build teamwork.


The Company refers to the definition of human rights pursuant to Law No. 39 of 1999 on Human Rights, Article 1 stating that: “Human rights are a set of rights inherent in the human nature and existence as the creation of God Almighty and as His gift to be respected, upheld, and protected by the state, law, government and everyone for the sake of honor and preservation of human dignity”.


Human rights as stipulated in Law No. 39 of 1999 include: Right to Live (Article 9); Right to Have a Family and Descendants (Article 10): Right to Self-development (Articles 11-16); Right to Justice (Articles 17-19); Right to Privacy (Articles 20-27); Right to Security (Articles 28-35); Right to Welfare (Articles 36-42); Right to Participate in Governance (Articles 43-44); Women’s Right (Articles 45-51); and Child’s Right (Articles 52-66).


The Company appreciates and protects human rights as referred to in the Collective Labor Agreement to be one of means to materialize a harmonious industrial relation which its objectives are to: (1) Clarify rights and duties of employers, labor unions, and employees; (2) Regulate work requirements and work conditions; (3) Create and strengthen a harmonious Industrial Relation in the Working Environment; (4) Regulate methods of dispute settlements; (5) Enhance employees’ productivity. The Company has not held a special training for employees on human rights policies or procedures which are relevant to the Company’s operations but instead accommodated them as part of the training held by the Company. [G4-HR1,HR2]


Throughout 2015, no incidence of discrimination occurred within the Company. The Company and all of its business chains upheld the equality without discriminating humans with regard to their ethnics, religions, races, groups or genders. This equality is in fact one of characters making the Company well accepted in various regions of Indonesia with its diverse background. [G4-HR3]


The Company and its operational chains, including its suppliers, do not violate employees’ right to exercise their freedom of association and the Collective Labor Agreement. The Company supports these rights by preserving values of the corporate culture “Sapta Budaya Planter” and organizing  a bipartite forum on a regular basis. The Company supports farmers as suppliers to always comply with the law and ethics as well as values of the corporate culture. This could be achieved by holding intensive meetings with suppliers through extension services, training or special gatherings organized by the Company in the plantation area having a friendly rural atmosphere. [G4-HR4]


The Company opposes exploitation of child labor. The Company ensures that all employees are in their productive age pursuant to applicable regulations, namely a minimum age of 18 years. [G4-HR5,HR6]


The Company opposes any form of forced labor and has never been involved in cases of forced-labor practices. Forced labor is labor performed involuntarily. In forced-labor practices, people work under threats of sanctions or punishments where workers do not have the freedom to agree with the performance of work. A punishment may be as a threat of violence or the delay of pay. Confiscating or withholding any personal document of the worker such as birth certificate, school diploma or residential ID card may also be categorized as a threat of forced labor as it leads to a situation where the worker is not free to leave his/her work or to find other jobs elsewhere. [G4-HR6]


In Indonesia, the state recognizes and respects indigenous community units along with their traditional rights as long as they still exist and are in accordance with the community developments and principles of the Unitary State of the Republic of Indonesia, as stipulated in Law No. 32 of 2004 on Local Governments, Article 2, paragraph 9. The Company respects rights of indigenous communities in each area of its operations. No incidence of violation of rights of indigenous communities occurred throughout 2015. The Company maintains a good relationship with indigenous communities, including by involving them in its business as workers and raw material suppliers through PIR-Trans, PIR KKPA, PIR-BUN Plasma, PIR-BUN IGA, and PIR BUN Swadaya programs. [G4-HR8]


Review and assessments of impacts to human rights are carried out by subsidiaries in order to meet various standards followed by the Company such as PROPER (Performance Rate Assessment Program of Companies in Environmental Management) which was attended by 26 subsidiaries and the Indonesian Sustainable Palm Oil Certification System which was attended by 35 subsidiaries. [G4-HR9]


No complaint was made against suppliers regarding violation of human rights and no significant negative impact on human rights was found along the supply chains throughout 2015. [G4-HR10,HR11]


The Company gives equal treatments to employees having diverse genders, ethnics, races, religions, and political affiliations. Although working in the plantation is still dominated by men, the Company always gives job opportunities to women. The Company ensures that each employee receives a fair reward based on his/her work experience, competence, workload, responsibility, and performance. So far, no complaint has been made regarding impacts of the Company’s operations on human rights. [G4-HR12]


PROFILE AND DISTRIBUTION OF EMPLOYEES

As of December 31, 2015, the Company was supported by 36.214 employees; 35.689 out of them worked in plantations scattered in Sumatera, Kalimantan, Sulawesi, and Java; 525 in Jakarta head office. [G4-LA1]


REMUNERATIONS AND BENEFITS OF EMPLOYEES

The Company ensures that wages are paid pursuant to the government regulations. In Indonesia, minimum wages are decided by the respective provincial governments whom then stipulate requirements of minimum wages by province and industry sector. Minimum wages per month may vary. According to applicable laws and regulations, the work hours in Indonesia are 40 per week or seven hours per day for six workdays in a week and eight hours per day for five workdays in a week.


The Company upholds human rights and the principle of equality in determining remunerations for employees. The Company ensures that any male and female employee receives equal, fair reward based on their work experience, workload, responsibility, competence, and ability. [G4-LA13]


The Company complies with laws and government regulations on manpower by paying competitive wages to employees. In addition to salary, there are other benefits offered such as life insurance, BPJS of Health, BPJS of Manpower, pension fund for permanent employees, maternity leave and childbirth benefits, and bereavement pays for employees and their families, including those due to natural disaster, death or fire. Employees deployed in plantations receive benefits in the form of free housing and education until a junior high school level, where there are also places for worship, day-care centers, clinics and permanent physicians as well as recreational facilities. The Company also provides posthumous scholarships for deceased-employees’ children until a senior high school level. [G4-LA2]


The Company guarantees that each employee gets a leave entitlement pursuant to government regulations. Any employee is entitled to an annual leave of 12 days and a leave entitlement of 25 days for every five years. Any female employee is entitled to a maternity leave of 3 months and thereafter returns to work as usual. [G4-LA3]


There were significant changes in operations due to the introduction of mechanization and automation as an attempt to retain the Company’s competitiveness at present and in the future. Introducing mechanization and automation gave impacts to some types of activities in the plantation. The Company communicated this change to employees and representatives of employees 1 (one) month prior to its introduction. There was no rationalization of employees due to the introduction of mechanization and automation; only transferring some employees to other departments. [G4-LA4]


FREEDOM OF ASSOCIATION AND COLLECTIVE LABOR AGREEMENT

Freedom of association is guaranteed by the Company and any employee is free to join as a member of labor union in the Company where he/she works. The Company has 43 subsidiaries where each of them has its own labor union. Each subsidiary has a Collective Labor Agreement (PKB) that was made and agreed upon by its labor union. This PKB regulates the work relation between employees and the Company. Any significant change on the Company’s organizational and operational structure is communicated to all employees by any means, among others: emails, letters, and on bulletin boards. [G4-HR4]


TRAINING AND EDUCATION

The Company organized training programs aimed at providing employees with important skills to achieve their career goals which are in line with the Company’s goals. Training and educational programs conducted throughout 2015 included managerial skills, non-technical skills, and technical, functional skills which are co-organized with the related units. [G4-LA10]


The non-technical training and development organized extensively in 2015 was training with a theme “Solidity and Team Work” attended by employees at levels of supervisors and assistants. In addition, there was also training with a theme “Supervisory for Foremen” attended by employees at the level of Harvesting, Infield, and Transportation Foremen. The technical training and development on mechanization process in the plantation was held extensively for all operators, harvesters, and supervisors. The extensive training held was intended to support the mechanization program. The total training hours organized by the Company in 2015 was 113,352 attended by 4,968 employees. [G4-LA9]


The company consistently encouraged employees to innovate and make sustainable improvements in order to leverage the quality in the Company’s innovation event, the INNOVAGRO program, with themes: Value Chain Improvement (VCI), Business Process Improvement (BPI), Quality Control Project (QCP), Quality Control Circle (QCC), and Suggestion Systems (SS). This program is held annually and has succeeded in developing new ideas and improving the performance. Through INNOVAGRO, the Company also succeeds in increasing overall effectiveness, efficiency, and productivity by further exploring the best practices in various fields of operations and implementing them in all subsidiaries through a mass promotion of innovative products (PROSALINA). [G4-LA10]


PERFORMANCE ASSSESSMENT

The Company conducted employees’ performance assessments regularly and consistently, aiming to evaluate employees’ performance, to give feedback for improvements or self-development and to decide steps or targets to be achieved in the future, and to identify relevant training in order to improve the employees’ performance. Every employee has goals and performance indicators to be reviewed periodically every year. [G4-LA11]


PRE-RETIREMENT PROGRAM

The company provides a pre-retirement program and training to employees entering their retirement age. The company ensures that after their retirement, employees are able to pass through the transition period well to be entrepreneurs. The pre-retirement program includes, among others, entrepreneurship seminar, financial planning sessions, and pre-retirement counseling implemented in cooperation with Dana Pensiun Astra (Astra’s Pension Fund; DPA). [G4-LA13]