MANAGEMENT FOR SUSTAINABILITY IN MUSIM MAS

Presentation at the RSPO Indonesia Liaison Office (RILO) Meeting on Update of P&C Trial Implementation
By Tan Tian Sang, Director of Estates 26 March 2007, Jakarta

Our Vision

MUSIM MAS PLANTATIONS
SUMUT – R.PRAPAT PT. SIRINGO2 PT. SIRINGO2 PT. MUSIM MAS PT. MUSIM MAS PT. AGROWIRATAMA PT. AGROWIRATAMA PT. SUKAJADI SAWIT MEKAR PT. SUKAJADI SAWIT MEKAR PT. MAJU ANEKA SAWIT PT. MAJU ANEKA SAWIT PT. GLOBALINDO ALAM PERKASA PT. GLOBALINDO ALAM PERKASA PT. UNGGUL LESTARI PT. UNGGUL LESTARI SUMSEL – PALEMBANG PT. BERKAT SAWIT SEJATI PT. BERKAT SAWIT SEJATI :: 1.490 HA 1.490 HA

2006 2006 LAND BANK LAND BANK

RIAU - SOREK PADANG - PASAMAN KALTENG - SAMPIT

:: 28.337 HA 28.337 HA :: 10.990 HA 10.990 HA :: 19.802 HA 19.802 HA :: 19.906 HA 19.906 HA :: 16.063 HA 16.063 HA :: 14.445 HA 14.445 HA :: 11.539 HA 11.539 HA

TOTAL TOTAL KKPA RIAU RIAU SUMATERA BARAT SUMATERA BARAT

:: 122.572 HA 122.572 HA :: :: 1.624 HA 1.624 HA 1.526 HA 1.526 HA

1988 :: 162 HA 1988 162 HA
TOTAL KKPA TOTAL KKPA GRAND TOTAL GRAND TOTAL :: 3.150 HA 3.150 HA :: 125.722 HA 125.722 HA

MUSIM MAS PALM OIL MILLS
Musim Mas has 8 operational Palm Oil Mills : PT. Siringo-ringo – Sumut 1990 PT. Musim Mas – Riau 1997 PT. Agrowiratama – Sumbar 2000 PT. Bahana Nusa Interindo – Riau 2002 PT. Indomakmur Sawit Berjaya – Riau 2003 PT. Sinar Agro Raya – Riau 2004 PT. Musim Mas – Riau 2005 PT. Sukajadi Sawit Mekar – Kalteng 2006 Total Capacity 425 T FFB/hr = 234,000 T FFB/mth = 55,000 T CPO/mth = 33,000 T PK/mth = 14,400 T PKO/mth

IMPLEMENTATION OF P&C: BMPs …examples

Legume cover plants

Zero burning

Musim Mas fire brigade

Mulching with EFB

IPM – Beneficial plants

Safe use of pesticides

EFFLUENT TREATMENT & APPLICATION
BIOLOGICAL DIGESTION IN LAGOONS LAND APPLICATION

Effluent Lagoons before commissioning PKS Balam

Land Application area PKS Balam

Effluent Lagoons after commissioning PKS Balam

Land Application beds PKS Balam

Effluent Lagoon PKS Agro

Land Application area PKS Agro

SOCIAL ASPECTS
Suraus & Polyclinics

Kindergarten, Schools & School Buses

WORKER AMENITIES

Housing Area PKS Balam

Musholla PKS Agro

Housing Pasir Pangarayan

Housing Area & Musholla PKS Sorek

HR DEVELOPMENT

CORPORATE SOCIAL RESPONSIBILITY (1)

Scholarships

Assisting Poor in Desas

Assistance to Orphanages

Wells & Gensets

Financing Desa Projects

KKPA Projects

CORPORATE SOCIAL RESPONSIBILITY (2)

MANAGEMENT FOR SUSTAINABILITY IN MUSIM MAS
• Musim Mas believes that a holistic and integrated approach needs to be taken to achieve sustainability by the whole company. • RSPO P&C should be the basis for managing the enterprise and not just a means to certification. • Management of sustainability at Musim Mas involves Management system based on RSPO P&C Management structure Phased implementation activities

SUSTAINABLE PALM OIL PRODUCTION
…” is comprised of legal, economically viable, environmentally appropriate and socially beneficial management and operations.”
LEGAL

Economic

Environmental

Social

BUILDING BLOCKS OF MANAGEMENT SYSTEM FOR SPO

Drivers

Enablers

Processes

Results

Principles 3 & 8

PDCA approaches (GP, ISO 14000 etc)

Principles 2, 4, 5, 6 & 7

People, Planet Profits (KPIs)

Principle 1: Commitment to Transparency

MANAGEMENT SYSTEM FOR SUSTAINABLE PALM OIL PRODUCTION
PROCESSES
Principle 2: Compliance of applicable laws and regulations

RESULTS

ASSESSMENTS
Internal: SWOT analysis Selfassessments

Legal compliance Monitoring and Evaluation
Principle 4: Use of appropriate best practice by growers &mills

DRIVER (1)
Principle 3: Commitment to long term economic and financial viability

DRIVER (2)
Principle 8: Commitment to continuous improvement in key areas

ENABLER
GREEN PRODUCTIVITY (GP)

Principle 5: Environmental responsibility & conservation of nat. resources

Economic KPIs

External: Supply chain assessments Market share

Principle 6: Responsible consideration of employees and affected people

Environmental KPIs

Principle 7: Responsible development of new plantations

Social KPIs

Principle 1: Commitment to transparency (Communication)

WHAT IS GREEN PRODUCTIVITY?

Ensures profitability

Green Productivity (GP) is a strategy for enhancing productivity and environmental performance for overall socio-economic development. It is the application of appropriate productivity and environmental management tools, techniques, technologies to reduce the environmental impact of organization’s activities, goods and services.

Enhances Quality of Life

Reduces environmental impact

SENIOR MANAGEMENT STRUCTURE
President Director Musim Mas Steering Committee on Sustainability

Director Estates Estates Dept

Head Sustainability Sustainability Dept

Director Production Prod Dept

Regional GM

Regional GM

Chief Engineer

1

2

3

4

5

6

7

8

1

2

3

4

General Managers

Controllers

MUSIM MAS STEERING COMMITTEE ON SUSTAINABILITY (MMSCS)
• • • • • President Director (Chairman of MMSCS) Director, Estates Director, Production Head, Sustainability Dept (Secretary) Advisor on Sustainability

MUSIM MAS STEERING COMMITTEE ON SUSTAINABILITY (MMSCS)
Mission of MMSCS

To drive and support Musim Mas commitment to the production of sustainable palm oil

ROLES & RESPONSIBILITIES
Steering Committee - MMSCS

• Formulate policies to meet RSPO P&C (environmental, social and economic) • Establish processes for identifying opportunities for improvement • Provide support and resources (people, time, funds) • Establish measures (KPIs)

ROLES & RESPONSIBILITIES
Steering Committee - MMSCS (contd)

• Monitor and review progress of performance against KPIs • Provide Reward and Recognition system • Establish processes for effective engagement of stakeholders (NGOs etc) • Communicate Musim Mas commitment and progress on sustainability

MAJOR ACTIVITIES
• • • • Establishment of Sustainability Dept Senior Management Workshop Self assessment of Musim Mas Group against P&C Phased Implementation
– PT by PT – Project by Project – Certification to RSPO P&C

• Development & Implementation of Musim Mas Strategic Plan • Monitoring and evaluation
– Group level – Operations level

• Development and implementation of communications strategy

WORK PLAN FOR YEAR 1

PHASED IMPLEMENTATION
1st PT BM Audit Train Do Projects Implement Improvements
Do & Implement New Projects Certify

BM Audit 2nd PT Train Do Projects Implement Improvements Do & Implement New Projects Certify

Improvement Projects New Projects

BM Audit 3rd PT Train Do Projects Implement Improvements Do & Implement New Projects Certify Time

SENIOR MANAGEMENT WORKSHOP ON SUSTAINABILITY

27 Feb to 01 March, 2007

MUSIM MAS POLICY ON SUSTAINABILITY

Participatory Approach

MUSIM MAS POLICY ON SUSTAINABILITY
We at Musim Mas, are committed to conduct our businesses in a environmentally friendly, socially acceptable & economically viable manner while meeting the highest quality expectations of our customers :

In our pursuit of corporate excellence, we shall: • Abide by RSPO Code Of Conduct • Comply with all applicable laws and legal requirements • Ensure occupational safety and health in the work place • Contribute and actively involve in community development • Develop, implement and improve environmentally responsible practices • Involve our employees in the implementation of this policy • Communicate our effort on sustainability to our internal and external stakeholders

Thank You