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INTP:IJ Rp. 12,225 altimage -0.81%
28-Oct-2020 18:40
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INTP:IJ Rp. 12225 altimage -0.81%
28-Oct-2020 18:40

Employment and OHS

Employment
Indocement policy regarding labor aspects refers to the prevailing laws and regulations, including: 2003 Manpower Law No. 13. In addition, the Company also has rules in the form of Company Regulations and Management Decisions to ensure that the Company has implemented the right employment rules.

Target and Activity Plans
To achieve its organizational goals the appropriate Human Resources ("HR")is needed. Therefore, the Company is well aware that HR is a valuable strategic element and asset to the Company.

In line with the business challenges and in order to achieve the Company’s target in 2017, the Corporate HR Division has taken strategic steps in relation to efficiency, such as:
  • grouping existing functions within the Company’s organization;
  • implementing automation in several operational processes;
  • empowering existing employees to assist in the duties of their colleagues who are reaching retirement; and
  • transfering tasks between divisions and between factories.

These strategic steps were undertaken to create a lean and efficient organization so that can compete with our competitors. Through such efforts, as of December 31, 2017, the Company and subsidiaries’ employees had decreased by 7.3% compared to end of December 2016 as shown in the following graphic:

The Company also recognizes the importance of improving and developing its employees to compete and contribute better. To improve the expertise and skills of its employees, during 2017 the Company introduced several employee development strategies, both hard skills, soft skills and managerial skills. These employee development strategies included launching and socializing the Company's New Leadership Style, implementing the SETARA program, increasing the number of K3 certified employees, implementing the Junior Engineer Training (JET) program, running and developing the Cement Academy, and continuing to develop I-SHELTER as an employee education and training center in Safety, Health and Environment.

Industrial Relations
Indocement is very aware that Human Resources hold a very important role in the effort to realize the company’s vision and mission. Therefore, the Company seeks to create harmonious industrial relations between employees and Management.

In order to create harmonious industrial relations, the Company endeavors to comply with the prevailing employment laws and regulations. The Company fulfills normative labor rights while continuing to improve the welfare of its workers.

Freedom of Association
ILO Convention No. 87 of 1948 provides protection for worker/labor to organize, where worker/labor without the need for anxiety, do not need to fear interference from public institutions, either from the government, security apparatus or other organizations. In Indonesia, freedom of association has been in affect since the government ratified the ILO Convention No. 87 of 1948 and ratified the Law No. 21 of 2000 on Trade Union/Labor Union.

As a prudent company, Indocement obeys and complies with the regulations. Therefore, Indocement does not prohibit employees from joining together and establishing unions.

Indocement considers the existence of unions as a means of bridging the problems between employees and Management to be of utmost importance to them, so that employees can easily address problems in the field, and management can provide good feed back to employees. With the creation of good relationships between employees and management it is hoped that employees can help achieve management targets so that the company can provide the welfare the employees expect.

In 2017, there were three trade union organizations
in Indocement, namely Citeureup Indocement Trade Union registered through the Bogor Regency Social and Manpower Department No. 161/OP.SP.ITP/03.35.161/03/X/ II/02 dated February 4, 2002, Cirebon Indocement Trade Union registered through the Cirebon Regency Manpower and Transmigration Department No. 560/03/ XI/KAB. CRB/SP - CRB/2006 dated November 6, 2006, and Tarjun Indocement Trade Union Workers Union registered through the Kotabaru Social Manpower and Transmigration Deparment No. 560.568/16/Naker dated April 6, 2002.

Collective Labor Agreement
In order to create harmonious industrial relationships with employees, the Company has formulated the Joint Working Agreement (PKB) with the Trade Unions. The PKB was originally created at every operational location of the Company, and since 2003, the Company and the Workers Unions have reached agreements to formulate the applicable PKB at each of the Company's operational locations.

The Company and the Trade Unions periodically review and update the KKB in accordance with the working environment and prevailing laws and regulations.

Industrial Relations Dispute Resolution Mechanism

Based on the applicable policies and procedures in Indocement, any grievences and/or complaints by one employee or more will be mutually settled, fairly, and as soon as possible. In resolving industrial relations disputes, the Company uses two methods: internally in the Plant and Division through grivence procedure mechanisms and bipartite cooperation, with the following settlement:
  1. Any grievence or complaint must first be discussed and resolved by a direct supervisor.
  2. If settlement is felt unsatisfactory then it can proceed to higher boss.
  3. In the event that the settlement is still felt to be unsatisfactory then the problem may be submitted to the Corporate HR Division to be resolved in accordance with the applicable provisions in the Company.
  4. In certain cases of the Company through the Corporate HR Division will discuss the issues that exist together through bipartite cooperation institutions.
  5. Furthermore, if still can not be resolved by bipartite, then the problem will be resolved according to the applicable laws and regulations.

Employee Benefits
The Company is always concerned with its employees welfare, one way is through the remuneration and benefits strategy that are regularly reviewed, in accordance with the needs of the company, and to maintain its competitiveness with the industry, which further supports superior performance in the achievement of the Company's targets.

The Company's compensation to employees is in the form of a basic wage (basic salary, achievement allowance, service allowance, and tuition allowance) plus fixed allowances (housing allowances and transportation allowances). In addition to the wages received, the Company also provides the following benefits:
  1. Shift allowance (special shift II and shift III);
  2. Overtime allowance;
  3. Official travel allowance, temporary transfer, and study assignment;
  4. Benefits for Bulk Loading & Coal Hauler Operators;
  5. Hari Raya allowance;
  6. Bonuses;
  7. Workplace risk benefits.

In addition, the Company also provides benefits and facilities to all employees consisting of:
  1. Health
All employees and their families are required to use the facilities available at the Company's clinic, or the Company's appointed policlinic for off-site employees. Polyclinic health facilities provided include examinations, treatment, care, childbirth, dental, emergency, observations, x-ray, family planning clinic, general check ups, vaccinations and pharmacies. Where facilities are not provided by the Company's polyclinics, the Company will refer employees and their families to public and private hospitals that work with the Company to meet all employee needs in accordance with applicable regulations.
  2. Facilities
The facilities provided by the Company to employees consist of employees 'cooperatives, employees' cafetaria, annual recreation for employees, libraries, art clubs, sports facilities, and building facilities for trade unions.
  3. Social Security Pension Fund Program
The Company maintains a defined contribution retirement plan (Pension Plan) for all its permanent employees who have fulfilled the worker benefit and liabilities criteria determined under the applicable PKB. The employee benefits liabilities are calculated by computing the benefits to be received by employees at the normal retirement age of the Pension Plan with payments in accordance with the PKB, net of accumulated employee contributions and development results. If the employer's portion of the Retirement Benefits program is less than the amount required by the PKB, the Company will make up the deficiency.

The Subsidiaries do not have retirement programs. However, the Subsidiary's retirement benefit expense has been reserved in accordance with Labor Law No. 13/2003 dated March 25, 2003.

The Company has a defined contribution pension plan for its permanent employees. Pension fund contributions are borne by the Company and its employees at 10.0% with 5.0% from the employees' basic pensionable income.

The pension fund is managed by the Indocement Tunggal Prakarsa Pension Fund, whose establishment was approved by the Republic of Indonesia Minister of Finance on November 12, 1991, which was later amended by Decree No. Kep-332/KM.17/1994 dated December 1, 1994. On December 31, 2016 the total pension fund assets reached Rp1,279,5 billion.

Indocement has appointed PT Mercer Indonesia, an independent actuary, to assess the estimated liability for post-employment benefits and liability for severance pay, gratuity and compensation benefits for its permanent employees.

4. Post-Employment Health Benefits
The Company started a post-employment hospitalization care reimbursement program for all eligible permanent employees in March 2005. The program is not funded. Indocement has appointed PT Mercer Indonesia, an independent actuary, to assess the estimated liability for post-employment healthcare benefits.

5. Awards
   a. Additional Leave
The Company provides additional employee leave based on length of service under the following conditions:
      • 6 to 11 years work: additional leave of 25 working days + 0.5 month basic wages minus leave allowance for employees who have been in work for eight years.
      • 11 to under 16 years work: additional leave of 25 working days + 0.5 month basic wages minus leave allowances.
      • 16 to under 21 years work: additional leave of 25 working days + one month basic wages minus leave allowances.
      • 21 to under 26 years work: additional leave of 25 working days + one month basic wages minus leave allowances.
      • 26 years and over work with a multiple of 5 years: additional 25 day workdays + two months basic wage minus leave allowances.
   b. Employment Appreciation
The Company will reward employees who have worked for a certain period with the following conditions:
      • Has worked for eight years: receives an award certificate
      • Has worked for 16 years: receives gold ring / necklace / gold bracelet weighing 10gr with 20 carat content.
      • Has worked for 24 years: receives gold ring / necklace / gold bracelet weighing weighing 15gr with 20 carat content.
      • Has worked for 32 years: receives gold ring / necklace / gold bracelet weighing 20gr with 20 carat content.
   c. Exemplary Employees
This award is given to employees in echelons VI to V who have been nominated by the Division or Plant Superintendents, and through a series of tests, to receive a sum of money in accordance with Company policy.
   d. Excellence Award
This award is given to employees who, among other things:
      • develop new working methods that are very efficient and beneficial to the Company:
      • have been instrumental in avoiding disaster for the Company;
      • have been meritorious and have carried the good name of the Company;
      • has assisted the Company in providing the necessary information regarding actions that are very harmful to the Company, whether committed by employees or outside parties; and
      • made other achievements in the same level with the abovementioned.
   e. Retirement Appreciatiion
The Company gives appreciation in the form of release ceremonies to employees who are entering their retirement.

Employee Turn Over
In 2017, the Company did not terminate any employees even though the condition of the cement market in Indonesia was experiencing an oversupply, which resulted in the decrease in the factory utilization rate. The number of Indocement employees did decrease by 322 with the following details: 10 employees died, 166 employees entered retirement, and 146 employees resigned for various reasons, and in addition, Indocement also added 17 new employees. Thus, the employee turnover rate in 2017 was 7.24%, higher than the employee turnover rate of 6.37% the previous year, due to the comparative number of outgoing employees not being comparable with the new employees entering in 2017.

Occupational Health and Safety
To Indocement, their employees are valuable assets in ensuring business continuity. Therefore, employees’ health and safety is a major concern. The Company has created a working environment that is safe and convenient, to support a positive atmosphere for the health and safety of employees to assist improved performance.

In order to develop a culture of health and safety and a positive environment within Indocement and its subsidiaries, the Company will:
  1. Commit to compliance with all applicable local, regional, national and international rules and guidelines on health and safety;
  2. Manage health and safety problems through the use of an appropriate working health and safety management system;
  3. Prepare reports and data analysis on health and safety on a regular basis;

Target and Activity Plans

For the sake of creating a good working environment for safety and health, the company endeavors to build and develop a work safety culture in order to achieve Zero Harm through its World Class Safety Culture, ensuring compliance with safety requirements, in accordance with Indonesian regulations and relevant standards. Occupational safety and health are core and inseparable values in all corporate activities, and accident prevention efforts are undertaken through the management of potential hazards, and minimizing of risks to create a safe and secure working environment, and the continuously prioritizing of safety through continuous improvement activities.

In addition, the company is always improving health and safety aspects through OHS training for Company employees as well as contractor employees, revising its work procedures and promoting an OHS culture through K3 Month. The Company has also undertaken strategic and significant steps by conducting a Gap Analysis for Mining Safety Management System and OHS Implementation Mapping across the Indocement's warehouses and terminals, and most of the batching plants owned by the Company's subsidiaries.

Life Saving Rules
On January 13, 2016, Indocememt officially launched the Life Saving Rules (LSR) as a new K3 regulation replacing the previous Safety Golden Rules. Indocement seeks to safeguard employees' safety by applying the Life Safety Rules (LSR) which includes:
  1. Standard self-protective equipment;
  2. Working at altitude;
  3. Entering limited spaces;
  4. Working in hot areas and on hot jobs;
  5. Energy isolation: LOTOTO (Lock Out, Tag Out, Try Out); and
  6. Driving safety.

LSR is applied to all Company employees, contractor employees and all guests present in the Company's work area as a safeguard for everyone in the Company's working area so that in any activity in the Company's work areas present no potential dangers resulting in accidental death and serious injury .

I-SHELTER
Indocement’s Safety Health Environment Learning Center (I-SHELTER) is a training center, which focuses on safety and the environment. As a member of the Cement Sustainability Initiative (CSI), Indocement always ensures safe and healthy working conditions for employees and contractors.

I-SHELTER is an effort to realize and ensure that all employees and contractors working in Indocement have the same understanding of safety (Indocement Safety Culture). This includes the principles, guidelines, safety procedures, occupational health and the environment. In this way, they can recognize potential dangers, risks and controls, and utimately can create a working environment that is secure, healthy and safe at all times.

I-Shelter is also expected to build a culture and character, as well as being a social monument in the areas of safety, health and environment in line with Indocement’s motto, “Better Shelter for a Better Life”. Now, Indocement has I-SHELTERs at its Citeureup Factory, Palimanan Factory and Tarjun Factory.

I-SHELTER has a number of facilities and training, including:
  1. Personal protection simulation;
  2. Kiln simulation;
  3. Driving simulator;
  4. Confined space working training;
  5. Working at height training;
  6. Scaffolding working training;
  7. Hot-work area working training
  8. Lock-out, Tag-out, Try-out (LOTOTO) training;
  9. Emergency training;
  10. Refactory working training;
  11. E-learning.

K3 Training
To ensure and protect the safety of the entire workforce, the Company regularly conducts OHS training for every employee at the Company's operational location. The K3 training in Indocement is carried out by using e-learning method and in-class.

The material given in the OHS training is tailored to the needs of each unit and the position level of the employee.

The OHS training held by the Company in 2017 included, but not limited to:
E-Learning
  1. Healthy Living Movement;
  2. Ergonomics;
  3. Counseling regarding Dust;
  4. Counseling regarding Noise;
  5. Prevention and Control of HIV / AIDS;
  6. Healthy Heart Counseling;
  7. Toxic and Hazardous Waste Counseling.

Class
  1. Basic Scaffolding Certification;
  2.Top Officers Confined Space Certification;
  3.Mining Safety Management System;
  4. Certification Occupational Health and Safety Firefighter;
  5. HIMU (Primary Hygiene Industrial) Training;
  6. Scaffolding Supervision Training;
  7. Technical Guidance on Toxic and Hazardous Waste Contaminated Land and Emergency Response; and
  8. Others training.

Certification Held in Relationship to Labor, Health and Safety
To ensure that the Company's business activities are in line with OHS standards, the Company complements its operations with a range of internationally-accredited certified health and safety audits that are regularly carried out.

OHS Statistics
Indocement seeks to improve the prevention of occupational accidents, through the frequency and quality of its OHS risk awareness with the goal to build a culture about the negative impact of such risks. With a growing OHS risk awareness culture, the target of zero accidents will be achievable.

In 2017 there were some incidents and accidents in the workplace, as described in the following table:

In 2017 there were two work accidents that resulted in the death of a contractor and a third-party transport worker. The investigation results showed that the accidents were caused by dangerous actions by the victims that were not in compliance with the prevailing regulations and the application of unsafe working methods. As a result of the accidents, the Company has taken corrective measures to prevent similar incidents from recurring in the Company's work areas.

Indocement, a producer of Semen Tiga Roda Cement and Semen Rajawali