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 Estates26 March 2007, Jakarta

Our Vision

MUSIM MAS PLANTATIONS

PT. SIRINGO2 : 1.490 HA

2006 PT. MUSIM MAS : 28.337 HA

LAND BANK PT. AGROWIRATAMA : 10.990 HA

PT. SUKAJADI SAWIT MEKAR : 19.802 HA

PT. MAJU ANEKA SAWIT : 19.906 HA

PT. GLOBALINDO ALAM PERKASA : 16.063 HA

PT. UNGGUL LESTARI : 14.445 HA

PT. BERKAT SAWIT SEJATI : 11.539 HA

TOTAL : 122.572 HA

RIAU : 1.624 HA

SUMATERA BARAT : 1.526 HA

1988 : 162 HATOTAL KKPA : 3.150 HA

GRAND TOTAL : 125.722 HA

PT. SIRINGO2 : 1.490 HA

2006 PT. MUSIM MAS : 28.337 HA

LAND BANK PT. AGROWIRATAMA : 10.990 HA

PT. SUKAJADI SAWIT MEKAR : 19.802 HA

PT. MAJU ANEKA SAWIT : 19.906 HA

PT. GLOBALINDO ALAM PERKASA : 16.063 HA

PT. UNGGUL LESTARI : 14.445 HA

PT. BERKAT SAWIT SEJATI : 11.539 HA

TOTAL : 122.572 HA

RIAU : 1.624 HA

SUMATERA BARAT : 1.526 HA

1988 : 162 HATOTAL KKPA : 3.150 HA

GRAND TOTAL : 125.722 HA

SUMUT – R.PRAPAT

RIAU - SOREK

PADANG - PASAMAN

KALTENG - SAMPIT

SUMSEL – PALEMBANG

KKPA

MUSIM MAS PALM OIL MILLS

Musim Mas has 8 operational Palm Oil Mills :

PT. Siringo-ringo – Sumut 1990PT. Musim Mas – Riau 1997PT. Agrowiratama – Sumbar 2000PT. Bahana Nusa Interindo – Riau 2002PT. Indomakmur Sawit Berjaya – Riau 2003PT. Sinar Agro Raya – Riau 2004PT. Musim Mas – Riau 2005PT. 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

Safe use of pesticides

Musim Mas fire brigade

IPM – Beneficial plantsMulching with EFB

Zero burning

EFFLUENT TREATMENT & APPLICATION

Effluent Lagoons before commissioning PKS Balam

Effluent Lagoon PKS Agro

Effluent Lagoons after commissioning PKS Balam

Land Application area PKS Balam

Land Application beds PKS Balam

Land Application area PKS Agro

BIOLOGICAL DIGESTION IN LAGOONS LAND APPLICATION

SOCIAL ASPECTSSuraus & Polyclinics

Kindergarten, Schools & School Buses

WORKER AMENITIES

Housing Area PKS Balam Musholla PKS Agro

Housing Area & Musholla PKS SorekHousing Pasir Pangarayan

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 involvesManagement system based on RSPO P&CManagement structure Phased implementation activities

SUSTAINABLE PALM OIL PRODUCTION

SocialEnvironmental

Economic

…” is comprised of legal, economically viable, environmentally appropriate and socially beneficial management and operations.”

LEGAL

BUILDING BLOCKS OF MANAGEMENT SYSTEM FOR SPO

Drivers Enablers Processes Results

Principles 3 & 8 PDCA approaches (GP, ISO 14000 etc)

People, PlanetProfits (KPIs)

Principles 2, 4, 5, 6 & 7

Principle 1: Commitment to Transparency

MANAGEMENT SYSTEM FOR SUSTAINABLE PALM OIL PRODUCTION

GREEN PRODUCTIVITY

(GP)

Mon

itorin

g an

d Ev

alua

tion

Internal:SWOT analysisSelf-assessments

ASSESSMENTS

External:Supply chain assessmentsMarket share

Principle 3:Commitment to long term economic and financial viability

Principle 1: Commitment to transparency (Communication)

PROCESSES

RESULTS

DRIVER (1) DRIVER (2) ENABLER

Principle 8:Commitment to continuous improvement in key areas

Principle 7:Responsible development of new plantations

Principle 2:Compliance of applicable laws and regulations

Principle 6:Responsible consideration of employees and affected people

Principle 5:Environmental responsibility & conservation of nat. resources

Principle 4:Use of appropriate best practice by growers &mills

Legal compliance

Economic KPIs

Environ-mental KPIs

Social KPIs

WHAT IS GREEN PRODUCTIVITY?

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.

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.

Ensures profitability

Enhances Quality of Life

Reduces environmental impact

SENIOR MANAGEMENT STRUCTURE

PresidentDirector

DirectorEstates

DirectorProduction

Estates Dept

Chief Engineer

1 2 3 4 5 6 7 8 4321

HeadSustainability

Sustainability Dept

General Managers Controllers

Musim MasSteering Committee

on Sustainability

Prod Dept

Regional GM Regional GM

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)

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

Mission of MMSCS

ROLES & RESPONSIBILITIES

• 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)

Steering Committee - MMSCS

ROLES & RESPONSIBILITIES

• 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

Steering Committee - MMSCS (contd)

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 MasStrategic Plan

• Monitoring and evaluation– Group level– Operations level

• Development and implementation of communications strategy

WORK PLANFOR YEAR 1

PHASED IMPLEMENTATION

Time

Improvement Projects

New Projects

BM AuditTrain

Do Projects

Certify

Implement ImprovementsDo & Implement New Projects

1st PT

BM AuditTrain

Do Projects

Certify

Implement ImprovementsDo & Implement New Projects

3rd PT

BM AuditTrain

Do Projects

Certify

Implement ImprovementsDo & Implement New Projects

2nd PT

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