Social Responsibility

The Company has implemented its Corporate Social Responsibility (CSR) a long time before the term becomes popular in Indonesia. The Company’s history recorded its involvement in the Nucleus Estate-Smallhoders (PIR/NES) program promoted by the government to support the transmigration program in an effort to materialize the equally distributed development in Indonesia in the 1980s to 1990s. PT Sari Lembah Subur, PT Sari Aditya Loka and PT Suryaraya Lestari are subsidiaries as the government’s partners in implementing the PIR program. This program was the initial milestone of the Company’s development to become one of Indonesia’s major palm oil producers at present. Starting the plantation establishment, the Company always involves local communities in its business process, being as strategic partners, as suppliers of various items of goods and services needed by the plantation. This policy offers business opportunities and job opportunities for communities in the Company’s areas of operations, and becomes a local economic driver and, at the same time, builds a positive emotional bond with the communities based on a mutual interest, a mutual need.


A motivation is an important factor in implementing CSR and determines dimensions and orientation of the CSR programs. Motivations of an organisation in implementing CSR are shown in the form of programs implemented, the organization’s size and the competence of personnel implementing the programs, budgets available for the program implementation, the communities’ support and articipation, outcomes and impacts of the implemented programs based on assessments of stakeholders or assessment agencies. There are various motivations driving Indonesian companies to implement CSR such as: security, image, appreciation/compliments, compliance with regulations, etc. The Company implemented CSR by upholding the ASTRA’s goal: “prosperous together with the nation”, based on the Catur Dharma Astra philosophy: (1) To be a beneficial asset to the nation and the country; (2) To give est services to customers; (3) To respect individuals and build teamwork; (4) To continually strive for excellence. The CSR implementation has been integrated with the Company’s operations under a mission: “To be a role model and contribute to the nation’s development and prosperity” in order to materialize a vision: “To be the most productive and innovative agribased Company in the world”.


The Company implemented CSR by referring to the Astra group’s policy prioritizing four sectors, namely: Education, Health, Economy, and Environment. CSR programs are directed and designed to assist communities in meeting their needs or solving their existing problems by encouraging their own initiatives as possible as they can and by making use of available resources. The objective is to achieve self-reliance in order the communities to be self-help and not relying on other parties. [G4-EC7,EC8]


EDUCATION

Education is chosen as one of areas in CSR activities as it is a key factor to materialize a prosperous nation and state as the ASTRA’s goal. This option is realistic given the low educational quality in plantation areas which are mostly in remote areas requiring a lot of attention and support from all parties. It is the Company’s interest to provide the quality education to children of employees and local communities. [G4-EC7]


The Company founded the Astra Agro Lestari Foundation (YAAL) to manage all schools in its plantations with a mission to improve the educational quality in order to become excellent schools in the regions. YAAL is supported by professionals in education working fulltime and fully dedicated to improve the quality of education and teaching at schools in the Company’s plantations. The Company fully supports the YAAL’s mission by providing adequate teachers, infrastructure facilities, stationaries and supplies, and operational budgets. [G4-EC7]


Improving the Educational Quality at Schools in the Company’s Plantations

Until 2015, the Company has constructed and managed 67 formal schools in the plantations which are earmarked for children of employees and the surrounding communities. All these schools are widespread in Sumatera, Kalimantan, and Sulawesi Islands, with the following details:


The Company constructed and managed schools in the plantations accommodating students from families of employees and the surrounding communities. Until 2015, the Company managed 67 formal schools comprising Kindergartens (TK), Elementary Schools (SD), and Junior High Schools (SMP), namely: 36 TK, 23 SD (10 out of them are public schools), and 8 SMP. Learning activities in these schools are supported by 526 teachers, comprising: 146 TK teachers, 275 SD teachers, and 105 SMP teachers, for 12,480 students, comprising 3,417 TK students, 7,538 SD students, and 1,525 SMP students.


YAAL enriched the education at 36 TK by adding their curriculum with a specific subject, Environment-based Character Building (PKBL). These are developed from the national educational curriculum emphasizing a character-building aspect and introducing the environment in the children’s vicinity, namely the palm oil plantations. Character building is basic for early childhood education as it is easier to build character at an early age.


alt A kindergarten in PT Perkebunan Lembah Bhakti


YAAL also enables all TK to prepare children to SD level by adopting a learning-by-playing method, “calistung” (read, write, and count), in an enjoyable, brain-based way. YAAL prepares each TK teacher to be competent as a trainer. This competence allows TK teachers to provide training to nurses in Day Care Centers (TPA) in the plantations and TK teachers outside the plantations. TPA is a sort of non-formal education established by the Company to take care of approx. 4,039 pre-school aged children, particularly of employees, during their parents working. Until 2015, the Company has established and managed 299 TPA with 528 trained nurses.


The Company seeks to upgrade teachers’ competence continually through various training programs such as: training on curriculum, learning method and media, learning evaluation techniques. The training succeeded in encouraging teachers’ creativity and resulted in various innovations in learning. Learning at schools takes place actively, innovatively, creatively, effectively, and enjoyably. The Company also encouraged teachers to create, innovate, and participate in provincial and national events.


The learning method is proved to be effective in boosting students’ interests and achievements. In 2015, various achievements of students, teachers, and principals succeeded were as the followings:



These schools’ achievements are attributed to facilities provided by the Company in accordance with National Standard Schools (SSN) as presented in the following table:



Assisting with Improvement of the Educational Quality at Schools around the Plantations

The Company also assisted schools around the plantations with the training on upgrading the teachers’ competence and the community-based partnership program (School Committees) involving companies, schools, the government (Educational Offices), and the surrounding communities. This assistance was received by 179 public schools with 19,921 students, comprising 2 units of Non-formal Education (PLS), 6 TK, 111 SD, 43 SMP, and 17 Senior High Schools (SMA) and Vocational High Schools (SMK). [G4-EC7]


The Company also paid attention to honorary teachers by subsidizing honorarium to 454 highly-dedicated teachers at schools around the plantations. [G4-EC8]


In 2015, training courses held by the Company were attended by 1,000 teachers from 142 public and private schools around the plantations in Sumatera, Kalimantan, and Sulawesi, as shown in the following table: [G4-EC7]



Common programs, such as the provision of scholarships, are still conducted as needed by some students. The provision of scholarships is considered relevant as it can motivate the recipient students in their studies to perform well. As many as 676 students received scholarships in 2015. [G4-EC8]


The Company also implemented the Astra Berbagi Ilmu (ABI; Astra’s Knowledge-Sharing) Program which provides opportunities to the Company’s executives and staff to share knowledge with students from SD to universities. Subjects presented by instructors in the ABI program included their respective areas of work, environmental-friendly oil palm plantation, conservation, the hygienic, healthy life style, the danger of cigarettes and drugs, religions, mechanization equipment in plantation, and motivation.


The ABI program also involved YAAL’s teachers in sharing knowledge with students and teachers in public and private schools within the Company’s ring 1 area, by teaching students about Environmental-friendly Oil Palm Plantation (SSL), Environmental-based Character Building (PKBL), Mathematics in a quick, enjoyable way, ICT (Information & Communication Technology), learning media, and Cooperative Learning method to teachers at public schools within the Company’s ring 1 area. Throughout 2015, the Astra Knowledge Sharing Program provided 421 teaching hours, exceeding those in 2014 of 205 teaching hours. This program is expected to draw of all parties’ attention in education and contribute in upgrading the educational quality in Indonesia.


HEALTH

In the health sector, the Company supported Posyandu (Integrated Service Posts) as a community-based health endeavor and as a social movement. As a community-based health endeavor, Posyandu empowers the community and facilitates the community to obtain basic healthcare so that the Maternal Mortality Rate and the Infant Mortality Rate decreased. As a social movement, Posyandu empowers women and encourages them to be self-reliant in the health sector. The Company, in cooperation with the local Puskesmas (Community Health Centers) and Health Agencies, supported Posyandu activities such as training of cadres, extension on Hygienic, Healthy Life Style (PHBS), Additional Food Provision (PMT), and healthcare in 433 external Posyandu managed by 2,241 cadres. [G4-EC7]


Posyandu’s activities are once a month in providing services known as the five-table system comprising: the first table is for registration of pregnant mothers and below 5-year children, the second table is for weighing the children, the third table is for recording, the fourth table is for counseling, and the fifth table is for healthcare, family planning services, immunization, and providing Oral Rehydration Salts (oralit). This five-table system allows Posyandu cadres to monitor the health of mothers and below 5-year children and take measures as necessary. [G4-SO1]


The Company also facilitated Posyandu that is willing to do economic activities in order to motivate cadres’ activities and at the same time enhance the self-reliance of Posyandu. Some units of Posyandu choose horticultural farming and freshwater aquaculture as their economic activities in order to achieve self-reliance. Posyandu as a movement from, by, and for the community enables the community to self-help with a spirit of mutual help and self-sufficiency.

alt

Posyandu empowers women and encourages them to self-reliance in the health sector


ECONOMY

No other industrial sector is able to involve the community as a working partner in its business process – massively and in such a wide scale – as what the palm oil industry sector is able to do. [G4-EC7]


In 2015, the Company made a partnership with 53,930 oil palm farmers in 2,464 farmers’ groups in cultivating the palm plantation of 157,036 hectares. This partnership produced 3,844,683 tons of raw material supply to the Company’s palm oil mills with a transaction value paid to farmers of Rp 5.13 trillion. This partnership is established through several cooperative models known as: PIR-TRANS, PIR-KKPA, and PIR-BUN (PIR-BUN Plasma, PIR-BUN IGA, and PIR-BUN Swadaya). This partnership is a strategic partnership of mutual benefit, mutual respect, mutual responsibility, and mutual reinforcement based on principles of utility and sustainability. [G4-EC1,EC8,EC9,SO1]


Coaching was carried out through extension services and training aimed at building partner farmers’ capacitiy and crop yields. There were held 28 training courses during 2015 which was attended by 1,018 oil palm farmers in subjects of: oil palm upkeeping, environmental-friendly integrated pest control, harvesting, health and safety at work, and financial management. The Company also involved the government to deliver training subjects related to farmers’ interest such as: the government regulation on agrarian affairs by involving the National Land Agency; the government regulation on palm plantation by involving the Estate Crops Offices.


The Company gave extension services to oil palm farmers by providing 60 extension workers. Through the extension, the Company disseminated useful information and knowledge to farmers, in particular on oil palm cultivation, including the Company’s innovations which can be implemented by farmers to increase their crop production. Moreover, the extension is intended to enable farmers to make use of the knowledge in improving their skills and developing their business. The goal of extension is to encourage farmers’ will to adopt better and sustainable plantation practices. [G4-SO1]


The strategic partnership scheme with between the Company and the community is as follows:

PIR-TRANS

A scheme of Perusahaan Inti Rakyat – Transmigrasi (Nucleus Estate-Smallholders for Transmigration), hereinafter referred to as PIR-TRANS, is a plantation development scheme implemented by using a large plantation company as the nucleus to help and guide smallholders’ plantations in the surroundings as the plasm in a cooperation system of mutual benefits, intact, and sustainable and related to the transmigration program. Through a PIR-TRANS scheme, the Company made a partnership with 17,222 farmers in 1,023 farmers’ groups in a plantation area of 35,054 hectares. [G4-EC8,SO1]


PIR-KKPA

A scheme of Perusahaan Inti Rakyat – Kredit Koperasi Primer untuk Anggota (Nucleus Estate-Smallholders by using Primary Cooperative’s Credit for its Members), hereinafter referred to as PIR-KKPA, is a PIR scheme receiving credit from the primary cooperative for its members. Through the PIR-KKPA scheme, the Company made a partnership with 9,221 farmers in 462 farmers’ groups in a plantation area of 20,034 hectares. [G4-EC8,SO1]


A scheme of Perusahaan Inti Rakyat – Perkebunan (Nucleus Estate-Smallholders for Plantation), hereinafter referred to as PIR-BUN, is a plantation development scheme implemented by using a large plantation company as the nucleus to help and guide smallholders’ plantations in the surroundings as the plasma in a cooperation system of mutual benefits, intact, and sustainable. PIR-BUN comprises:


1.
PIR-BUN Plasma

A scheme of Perusahaan Inti Rakyat – Perkebunan Plasma (Nucleus Estate-Smallholders for Plasma Plantation), hereinafter referred to as PIR-BUN Plasma, is a plantation development scheme implemented by using a large plantation company as the nucleus to help and guide smallholders’ plantations in the surroundings as the plasm in a cooperation system of mutual benefits, intact, and sustainable, and not related with the transmigration program and not receiving KKPA credit. Through the PIR-BUN Plasma scheme, the Company made a partnership with 2,717 farmers in 51 farmers’ groups in a plantation area of 6,689 hectares. [G4-EC8,SO1]


2.
PIR-BUN Program IGA

A scheme of Perusahaan Inti Rakyat – Perkebunan Program IGA (Nucleus Estate-Smallholders for Plantation under IGA program), hereinafter referred to as PIR-BUN IGA, is a plantation development scheme implemented by using a large plantation company as the nucleus to help and guide smallholders’ plantations in the surroundings as the plasma in a cooperation system of mutual benefits, intact, and sustainable, and implemented through the community’s Income Generating Activity (IGA) program. Through the IGA program, the Company provided extension services and technical assistance and credit for oil palm seedlings, agricultural inputs, and working capital.

In the PIR-BUN IGA scheme, the community participates as managers of their own plantations until producing and they pay off their credit to the Company. Through the PIR-BUN IGA scheme, the Company made a partnership with 9,072 farmers in 451 farmers’ groups in a plantation area of 17,590 hectares. [G4-EC8,SO1]



3.
PIR-BUN Swadaya

A scheme of Perusahaan Inti Rakyat – Perkebunan Swadaya (Nucleus Estate-Smallholders for Self-supporting Plantation), hereinafter referred to as PIR-BUN Swadaya, is a plantation development scheme implemented by using a large plantation company as the nucleus to help and guide smallholders’ plantations in the surroundings as the plasm in a cooperation system of mutual benefits, intact, and sustainable, and implemented through a partnership scheme. In the PIR-BUN Swadaya scheme, the communities in a self-supporting manner develop their own plantation until producing and then they become FFB suppliers to the Company’s mills. The Company provided extension services and technical assistance. Through the PIR-BUN Swadaya scheme, the Company made a partnership with 15,698 farmers in 477 farmers’ groups in a plantation area of 77,669 hectares. This scheme is implemented in compliance with government regulations on land status. [G4-EC7,EC8,SO1]


THE IGA PROGRAM FOR OUTSIDE OIL PALM BUSINESSES

The Company also paid attention to and assisted community groups whose jobs or businesses were not related to the palm oil industry.


The Company through its subsidiary, PT Bhadra Cemerlang, provided high-yielding rubber seedlings, extension services, and training to 105 rubber farmer families in Bintang Ara Village, Bintang Ara District, Tabalong Regency, South Kalimantan Province, and 45 rubber farmer families in Bentot Village, Petangkep Tutui District, Barito Timur Regency, Central Kalimantan Province. With this assistance, it is expected that in the next four years, farmers will start harvesting higher yields from their new rubber plantations with high-yielding seedlings provided by the Company.


The Company through its subsidiary, PT Suksestani Nusasubur, assisted with capital to some horticultural farmers’ groups in Babulu Village, Babulu Darat District, Penajam Paser Utara Regency, East Kalimantan Province.


A subsidiary, PT Letawa, supported fishers in Muara Jono Subvillage, Tikke Village, Tikke Raya District, Mamuju Utara Regency, West Sulawesi Province. The Company supported the organizing of fishers in a fishers’ group, provided credit of capital for purchasing outboard motors and fishing gears.


Another subsidiary, PT Suryaraya Lestari, in Mamuju Utara Regency, West Sulawesi Province supported blacksmiths and caterers, two types of business outside oil palm assisted by the subsidiary.


The assistance to businesses outside oil palm was provided selectively, considering that each provision of assistance requires the competence in coaching/facilitation and oversight. [G4-SO1]