Sustainability

We have been dedicated to conservation, human rights, and economic development for more than 50 years. These high standards apply to all our companies including timber and wind tower production. We are always exploring new ways in which we can advance our environmental and social contribution standards to uphold our commitment to accountability that guides us today.

KORINDO ESG Charter of Commitments

Through this ESG Charter, we highlight Korindo’s commitments to ESG management and good corporate governance.

Scope

This Charter applies to all of Korindo’s current and future holdings, including subsidiary companies, joint ventures, companies over which we have management control, and third-party suppliers. To work with us, all third-party suppliers must agree that they will abide by this Charter.

Implementation, enforcement, monitoring and reporting procedures in cooperation with third- party verifiers will ensure compliance for all aspects of the policy and commitments.

Environmental Responsibility

We commit ourselves to protecting the environment by working towards ‘Sustainable Development’.

We understand the term ‘Sustainable Development’ (SD) as defined by the Brundtland Commission Report published in 1987.

“Sustainable development (SD) is the kind of development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”

To achieve ‘Sustainable Development’, we will:

Minimize Greenhouse Gas emissions, especially carbon dioxide (CO2).
Remaining natural vegetation cover (forest cover) and it biodiversity will consistently be maintained and further researched.
Cease the development on High Conservation Value (HCV) or High Carbon Stock (HCS) areas. All natural forest clearance has been suspended since February 2017.
Strengthen conservation measures, especially those related to forests and their biodiversity. These measures are not limited to combat threats caused by humans but also threats posed by natural disasters such as flooding and wild fire.
Maintain our commitment to the PEFC Standards and Guides with regard to our timber and plywood operations.
Continue with our belief and practice of not developing peat lands under any circumstances.
Continue with our zero-burning policy. Korindo has never used and will never use fire to clear land in any of its operations.
Support the national government’s agenda on climate change, particularly relates to Indonesia’s FOLU Net Sink 2030.

These commitments reinforce, and by no means hinder, Korindo’s pledge to the development of land assigned by the Indonesian Government for the purpose of producing timber and plywood.

Social Contribution

We are committed to the development of Indonesia and its people. In that sense, our actions are not limited to just following the law but also to creating a meaningful impact in the communities that we work with.

To further achieve this goal, we will:

Continue to provide health resources for people in the communities.
Keep supporting education facilities.
Continue creating business opportunities within the communities to help reducing poverty.
Maintain and enhance our efforts to support communities fight climate change and global warming as well as to increase local awareness concerning biodiversity conservation and its habitat.
Improve our procedures with regards to respecting the customary and cultural land rights of communities.
Establish and practice Free, Prior and Informed Consent (FPIC) principle and process.
Improve our conflict resolution frameworks as well as communicate these better to stakeholders and community members.
Establish participatory mapping prior to any new development to determine stakeholder boundaries and land uses.
Actively create new programs to help improve the lives of people in the communities.

Labor Rights

We conduct our business in a manner that respects and guarantees human rights. Labor rights are not an exception.

Consequently, we will:

Ensure that the rights of all people working in any operation in our supply chain are respected according to local, national and international laws. This includes international standards like the ones set by the International Labour Organization (ILO).
Ensure that the people employed in our operations understand their rights and work responsibilities.
Establish fair working conditions, not only in terms of wages but also in terms of security inside the workplace.
Guarantee fair and equal employment opportunities for all employees regardless of race, nationality, religion, linguistic background, or gender.

Stakeholder Engagement

We commit to resolving complaints and conflicts through an open, transparent and effective process. We seek to engage and collaborate with the local, regional and national governments, certification bodies, regional projects, and NGOs to help better manage our operations.

Consequently, we will:

Work with key stakeholders and independent verification bodies to implement sustainable growth and promote industry transformation.
Maintain a monitoring and assessment program to communicate information, progress toward policy compliance, complaints resolution, and supplier engagement and verification.
Publish Sustainability Reports on implementation of sustainable growth.
Resolve grievances promptly, responsibly, responsively, and proactively.

Transparency & Accountability

Develop a Sustainable Time Bound Plan in order to be able to set targets for continuous improvement.
Provide regular updates on the development of external complaints along with the chronology of efforts to resolve them through Grievance System.
Open communication with relevant parties in order to build an adequate and responsible understanding.
Submit Sustainability Report annually regarding the sustainability progress that has been made.

For a more detailed explanation of the ESG Charter or ESG program, please contact Korindo PR Team at pr@korindo.co.id

Dashboard

(Last Update: July 2022)

Conservation

Forestry

Kalimantan: 16,375 ha
Papua: 99,750 ha

Kalimantan: 199,265 ha
Papua: 314,600 ha

Plywood

Governance

Good management is foundational to a company’s sustainability and to support that, Korindo Group through the Environment, Social, and Governance (ESG) Division has made a policy and management system starting from the central level to technical implementation level in all of the Group’s operational activities.

We have also adopted the principles of Corporate Social Contribution and embedded them into our business management processes. Corporate policies and a commitment to continuous improvement underpin our sustainability goals. Through our group’s sustainability, we defined our own vision and direction to manage our impacts and opportunities with increasing efficiency.

Above all, KORINDO Group is committed to continuous improvement as the means to achieve our vision.

KORINDO is committed to following a strict Code of Conduct:

Support and respect the protection of human rights.
Ensure that we are not complicit in human rights abuse.
Uphold the freedom of association and of the right to collective bargaining.
Eliminate all forms of forced and compulsory labor, child labor, and discrimination in respect of employment and occupation.
Support a precautionary approach to environmental challenges.
Participate in initiatives to promote greater environmental responsibility.
Encourage the development and diffusion of environmentally friendly technologies.
Realizing the spirit of building the company’s “good governance” in an ethical/fair manner, committing, and taking a proactive role in corruption prevention and eradication.

Korindo is committed to sustainable palm oil and timber production and sourcing. We have dedicated ourselves to the conservation of nature, the absolute and unconditional respect of human rights, and to sustainable economic development for 50 years in Indonesia. We are always exploring new ways in which we can advance our environmental and social responsibility standards to uphold our commitments.

We are committed to implementing practical solutions that will be beneficial to the environment and to the communities in which we live and work. These solutions will require innovation, dedication, determination, and creativity.

ESG 2020

Preamble

As part of Korindo Group’s sustainability policy, the Environmental, Social and Governance (ESG) Division developed a Grievance Mechanism for stakeholders called ESG 2020. Grievance is an allegation of a violation or problem raised by individuals or groups who want Korindo to seek and find solutions to a problem.

Submission

Grievance Submission Procedure: Please click here to fill out the form then submit it via one of the options below.

Phone

021 797 5959 Ext 352

Mail

• Wisma Korindo 13th Floor
MT Haryono Kav 62, Pancoran, Jakarta Selatan, Indonesia 12780
Attention: Divisi Environment, Social and Governance (ESG)

• Korindo Operational Office in the Regional Area

Email

esg@korindo.co.id

Procedure

Grievance List

As the management of PT. Tunas Sawa Erma, PT. Berkat Cipta Abadi and PT. Dongin Prabhawa is separated into the TSE Group, the existing cases of these three companies have been transferred to https://tsegroup.co.id/sustainability/grievance/

Environment

As a developer and harvester of local resources and consistent with KORINDO Group’s values, we understand our responsibility to operate these businesses with the highest level of integrity. As such, our resources division operates under the following principles:

Only utilizing land that has been zoned for development by the Indonesian government to produce timber or plywood.
Continuing a zero burning policy and not utilizing burning to clear land in all of the company’s operations.
Committing to not develop on peatland regardless of depth.
Conducting ongoing dialogue with companies throughout supply chain, local communities, and non-governmental organizations.

In accordance with Korindo’s aim to develop productive multi-purpose timber plantations, improve people’s livelihood, and ensure effective plantation management, we support sustainable timber production through PHPL. At the moment, Korindo is managing four natural forest management concessions of 524,515 ha located in Kalimantan and Papua, and a timber plantation concession of 16,475 ha in Kalimantan in compliance with PHPL.

In regard to the timber plantation, we have completed tree planting in the designated area and there are no further plans for development in the undeveloped area.

With this, KORINDO commits to fulfilling its role to work on sustainable forest management. Our sustainable timber production process is based on three core ideas: production of lasting and balanced profit (Profit), environmental sustainability (Planet), and social welfare (People). We commit to continuous improvement and transparency in the activities of sustainable forest management:

All of the operational activities that will be held by Korindo have been through an analysis study on environmental and social impacts (AMDAL) including the making of management plan and environmental monitoring (RKL-RPL).
Implementing Reduce impact logging (RIL) in forest management, which is a systematic approach to planning, implementing, monitoring, and evaluating wood harvest. This is a refinement practice of road construction, logging, and skidding. We adhere to the standard of road construction by paying attention to the contour and drainage which minimizes the erosion.
Supporting the government’s program for the development of low emissions and the reduction of greenhouse gas through peatland management.
Implementing an integrated fire management strategy in the form of prevention, preparation, early detection, and fast response.
Implementing integrated pest management, forest encroachment control, wild grazing, and illegal logging.
Establishing, maintaining, and securing 145,514 ha of protected areas that are effective and proportional.
Management and monitoring of endemic species or endangered flora and fauna, including no hunting of those species in order to maintain biodiversity.

Forestry Certification and Standards:

We commit to achieving internationally recognized third-party standards and certifications for our assets.
For forestry assets, we commit to maintaining our forest management certification with the PEFC, the Programme for the Endorsement of Forest Certification, for all eligible assets.
In cases where an asset is not eligible for PEFC certification, an alternate standard will be selected such as the Indonesian Timber Legality Verification System (Sistem Verifikasi Legalitas Kayu, SVLK) or Sustainable Production Forest Management (Pengelolaan Hutan Produksi Lestari, PHPL).

KORINDO’s commitment to responsible timber production by complying with policies of no peat, no exploitation, no burning, and no deforestation are already in effect. Monitoring on deforestation is done using satellite imagery updated monthly. In addition to that, we have performed ± 629.000 hectares of monitoring for timber plantation deforestation and hotspots. Reports on timber plantation deforestation and hotspot monitoring will be regularly updated and can be seen here.

We will monitor the implementation process and constantly improve operations related to timber plantation and production.

KORINDO will adjust and follow policies in ways that are consistent with Indonesian government’s regulations to protect forests, peat lands, local communities, and human rights as well as appropriate global standards.

Korindo Timber Sourcing Policy

Korindo Group is committed to the responsible sourcing of timber. Our long term objective is that all timber used in production that we purchase is sourced from sustainably managed forests that have been certified to credible certification standards and/or from post-consumer recycled materials.

This commitment will be realized through a stepwise approach to responsible timber sourcing that uses the best available techniques and information.

Towards these ends, Korindo Group hereby establishes the following policy commitments:

We endorse the Timber Legality Assurance System of Indonesia (SVLK) as the primary standard for sustainable timber sourcing. We will ensure to avoid the use of timber from controversial sources based on Programme for the Endorsement of Forest Certification (PEFC)’s Chain of Custody standard.
We will reduce and eliminate its purchase of timber from the conversion of natural forest to other land uses by September 30, 2020, unless the conversion is justified on grounds of net social and environmental gain in the surrounding landscape.
We will acquire PEFC FM certification for our natural forest concessions and industrial forest concessions in Indonesia by 31st December 2024.
We will not purchase timber from controversial sources, including illegally harvested wood, destruction of high conservation values, entities accused of human, civil and traditional rights violations and genetically modified trees.
We will follow the Core Conventions of the International Labour Organization as defined in the 1998 “Declaration on Fundamental Principles and Rights at Work”.
We will work with all vendors and associated suppliers to trace the origin of our current products.
We will require that all vendors and associated suppliers demonstrate compliance with all legal requirements for forest management, timber harvesting and related trade.
We will communicate with stakeholders for open and constructive dialogue to help us continuously improve our business and our performance in regard to responsible forest trade.

In the process of developing business, KORINDO Group has been actively following the provisions of the Indonesian government — such as the zero burning policy and the moratorium on peatland — to create a healthy and balanced ecosystem.

Some of the concrete steps that have been made include carrying on mechanical land clearance and without burning, and having reliable firefighters to monitor and prevent forest fires with the aim of bringing a sense of security and comfort to the surrounding area.

Fire Rescue Team

Furthermore, KORINDO Group also cooperates with the local relevant technical agencies to carry on joint monitoring and evaluation to ensure there is no land burning. Please see the fire fighting simulation video that we conduct every year.

Certification	Product
Timber Legality Information System (SVLK) Timber Legality Assurance System (SVLK) is a tracking system whose development was made by involving multi-stakeholders to ensure the legality of sources from which timber being traded in Indonesia originates. SVLK is also meant to encourage the implementation of the existing government’s regulations related to trade. Timber Legality Assurance System (SVLK) serves to ensure the origins and management of timber products and raw materials obtained or derived from sources meet the legal requirements. Timber is considered legal when its origin, logging permit, logging systems and procedures, transport, processing, and trade can be proven to meet all applicable legal requirements.	Timber, Plywood, Wood Products
Sustainable Production Forest Management (PHPL) In June 2009, the Minister of Forestry of Indonesia issued Ministerial Regulation No. P.38/2009 on Standards and Guidelines for Evaluating the Sustainability Performance of Production Forest Management (PHPL) and Timber Legality Verification. This regulation obliged timber utilization permit holders and timber industries to implement sustainable forest management and timber legality standards. Our entire forest area (100%) is PHPL certified.	Timber
Forest Law Enforcement, Governance and Trade (FLEGT) FLEGT stands for Forest Law Enforcement, Governance and Trade. The EU published the EU FLEGT Action Plan in 2003. The Action Plan aims to reduce illegal logging by strengthening the sustainability and legality of forest management, improving forest governance and promoting trade in legally produced timber. FLEGT takes a multidimensional, coherent approach to overcoming the complex drivers and enablers of illegal logging. Indonesia was one of the first countries to start negotiating FLEGT with the EU. It was the first Asian country to implement FLEGT with EU.	Plywood
The Programme for the Endorsement of Forest Certification (PEFC) PEFC is a leading global alliance of national forest certification systems. As an international non-profit, non-governmental organization, PEFC is dedicated to promoting sustainable forest management through independent third-party certification.	Plywood and Wood Products

Labor

Safety and Human Rights
Procedures

KORINDO has been dedicated to conservation, human rights, and economic development for more than 40 years. These high standards apply to all our companies including forestry, timber, and wind tower production. We are always exploring new ways in which we can advance our environmental and social responsibility standards to uphold our commitment to accountability that guides us today. Each company of KORINDO has stated its sustainability policy, in compliance with the FPIC principles, to improve the quality of life for indigenous people as follows.

Protecting Human Rights and Respecting Local Culture

We prohibit illegal, abusive, forced or child labor within our operations anywhere in our plantations and mills.
We commit to the protection and respect of human rights (the rights of all workers, including contractual, temporary, and migrant workers), the elimination of discrimination in employment and the promotion of equal rights, and lastly the freedom of association and the right to collectively bargain.
We respect the rights of indigenous and local communities to give or withhold their Free, Prior and Informed Consent (FPIC) to the utilization of lands to which they hold legal, communal, or customary rights.
We are strongly against the use of forced labor, and will work with parties to resolve complaints and conflicts based on Indonesian government regulations.

Contribution to Local Community and Local Economy

We commit to contribute to the local economic development through Corporate Social Contribution activities and programs, which include infrastructure, healthcare, education, and other suitable social empowerment programs that can help boost the welfare and livelihood of local communities.

We always ensure that our employees have the freedom to form an independent labor union in the company. This is proven by the existence of an independent labor union in KORINDO Group.

We also appreciate the contribution from our employees who continue to grow together with the company. For their dedications, KORINDO Group has promoted 65% of all employees to be permanent employees in 2021. The advancement of women is also part of our concern. So far in 2021, 10% of our employees are women we support to reach their best potential. We are always committed without gender-based pay discrimination to following more than government regulated Provincial Minimum Wage (UMP) determined based on economic and employment conditions, variables of purchasing power parity, labor absorption rate and median wage to promote the welfare of our employees.

In accordance with operational standards, we also provide training on pesticide use in collaboration with the pesticide commission.

To implement these policies, KORINDO has set up a dedicated department of indigenous people support to conduct dialogue and assistance programs for indigenous people. In addition, we have prepared detailed procedures for receiving and processing complaints and requests of indigenous people by integrating the expertise we have accumulated over 20 years of communication with the indigenous population in Papua Province.

Korindo Respect Policy Statement

Korindo Human Rights Policy

Korindo Health Safety and Environmental Policy Statement

Korindo Community Policy

Assistance & grievance procedures

Other procedures

We have mechanism for any conflicts.

CSC

KORINDO Group has been operating in Indonesia for 50 years. During this period, KORINDO Group has made efforts to build sustainable societies in various fields through its Corporate Social Contribution (CSC) programs. This is carried out in accordance with the company’s philosophy to build a harmonious, beneficial, and sustainable relationship with the community and stakeholders for the sake of improvement and prosperity. Our CSC activities focus on strategic, systematic, and sustained programs throughout the five pillars of the main program:

We are aware that the quality of human resource development is one of the keys to success in sustainable development. KORINDO Group provides development assistance in the field of education in the form of funding, learning facilities, and school buses.

Health problems have been one of several concerns for KORINDO Group to address through CSC programs such as free healthcare services and clinics established in each plantation block. To reach secluded citizens and build a healthy lifestyle, KORINDO Group also provides health education through itinerant doctors along with the ambulances and free health services every two weeks. Through these activities, people can receive health checks and immunizations as well as free medicine to boost health and prevent disease.

To improve the economic independence and welfare of society, KORINDO Group provides productive business assistance such as business support for fish, poultry, cattle, and pig farms; rubber and palm oil plantations; and the ownership to units of shop houses and stalls. With productive and direct business assistance, it is expected to increase family income, economic development, and social welfare in a sustainable manner.

KORINDO Group always seeks to preserve the environment. Our concern for the environment has been proven by concrete actions through tree planting and routine environmental cleaning. We always engage and cooperate with various elements of society such as local authorities, military, police, as well as religious and customary leaders, so the entire community can participate in environment conservation.

Since certain regions may be hard to reach, infrastructure support certainly becomes a major need for people. KORINDO Group actively participates in the development of infrastructure by repairing bridges, constructing sport facilities, and mending roads; as well as by establishing public facilities such as schools, clinics, churches and mosques, markets, shops, sport fields, village halls, the clan chief’s house, etc. This proves the commitment of KORINDO Group management to building a harmonious and prosperous life together with all stakeholders in all locations.

Education

KORINDO has given scholarships for 8,792 students from primary to secondary schools and universities. We have also provided learning and sport tools to 109 preschools and secondary schools, supported the building and operation of 28 schools with 208 teachers in remote areas in Indonesia, and provided 36 school buses.

8792

Scholarships

109

schools

208

Teachers

School Buses

Health and

Social Activities

We have provided health supplements and childrens scales for 4,680 children under five years old in 72 child medical centers. We also built 19 clinics and 1 polyclinic, provided 1,000 medicine packages for flood victims in Jakarta, supported the building of the Dharmais Hospital National Cancer Center in Jakarta, and provided 200,000 meal packages for the victims of the Aceh Tsunami, Padang earthquake, and Jakarta floods.

4680

Children

Clinics

1000

Medicine

200000

Meal

Environment

We have supported the building of an agricultural research center and nursery center for 100,000 original Indonesian trees in Bogor; planted 221,600 productive trees in Bogor (West Java), Wonogiri (Central Java), Boven Digoel (Papua), and Timor Leste; provided 200 waste sorting bins for schools in Pancoran, Jakarta; and provided lessons on environmental conservation to 2,660 people living around river banks and villages. We also removed 12 tons of garbage from rivers and cleaned the surrounding areas.

100000

Indonesian Trees

221600

Productive Trees

200

Garbage Bins

Garbage from Rivers

Infrastructure

We have built and maintained 551 Km road and 80 bridges, supported the construction of 66 religious buildings (mosques, churches, etc.), provided 8 MW of electricity to local people, and provided clean water to 13,350 people.

551

Road

Bridges

Religious Buildings

Electricity

13350

Clean Water to people

Job Creation and

Economic Impact

There have been 12,300 direct employments and 21,000 consequential jobs, increasing employment of the local indigenous people up to 31%. We have contributed up to 40% of the GDP of Boven Digoel Regency and Merauke Regency in Papua. We also supported 450 entrepreneurs in Central Kalimantan, Papua, Bogor, and Jakarta.

12300

Employment

21000

Consequential Jobs

GDP of Boven Digoel & Merauke

450

Supported Entrepreneurs

Income Generation

Activities

We have developed and supported the operation of a 350 ha rubber plantation for the local community. We have also built and supported the operation of breeding farms with capacities of 7,000 chickens, 100 cows, 50 pigs and 10,000 fish. We have built and supported the operation of a greenhouse for urban farming for the local community with a capacity of 2,000 organic vegetables per week. Lastly, we have supported 300 farmer’s families in fruit farming in Wonogiri, Central Java.

350

Rubber Plantation

17150

Livestock Animals

2000

Organic Vegetables / week

300

Farmer Families

Awards & Collaboration

Institution	Activities
Boven Digoel Multi Stakeholder Forum (USAID LESTARI) USAID LESTARI supports the government of Indonesia to reduce greenhouse gas (GHG) emissions and conserve biodiversity in carbon rich and biologically significant forest and mangrove ecosystems. USAID LESTARI activities are targeted in six strategic landscapes across Aceh, Central Kalimantan, and Papua. Multi-stakeholder forum was established in Boven Digoel, Papua in 2016.	Sustainable Development in Landscape Level
Global Agribusiness Alliance The Global Agribusiness Alliance (GAA) is an international, CEO-led, private sector alliance committed to harnessing the collective strengths of the global agribusiness sector to tackle environmental, social, and sustainability challenges to improve the resilience of farmers across the world. Particularly, GAA wants to help achieve UN Sustainable Development Goal 2: “End hunger, achieve food security and improved nutrition, and promote sustainable agriculture.”	Sustainable Development in Agriculture
Korea Overseas International Cooperation Agency’s “Medical Service Improvement for the Local Communities in Indonesia“ Project The first general hospital in Asiki, Papua province was established by the cooperation between Korea Overseas International Cooperation Agency and KORINDO. Papua is the region with the poorest regional health indicators such as infant mortality rate, AIDS and HIV prevalence, maternal and child health, and various diseases. The hospital’s establishment is expected to play a major part in the improvement of these indicators. It is anticipated that medical access for local residents can be greatly improved.	Healthcare
Kampar REDD+ project It is a joint project between Indonesia and the Korean government to protect peat swamp forest and reduce greenhouse gas emission in Kampar peninsula, Sumatra, Indonesia. KORINDO Group contributed to this project by spearheading research and project development together with research institutions from various sectors.	Peat Swamp Forest Protection

Publication

Korindo Group Sustainability Report 2021

FAQ

How does KORINDO support local communities?

KORINDO works closely with the local communities where we operate. We prohibit illegal, abusive, forced, or child labor within our operations anywhere in our plantations and mills. We are committed to respecting the human rights of all our workers, whether they are full time or temporary. This includes promoting equal rights, the freedom of association, and the right to collectively bargain.

We also work hard to bring additional benefits to the community. KORINDO employs more than 10,000 Indonesian workers, has provided scholarships for over 2,500 students and supported the building of local schools and hiring of teachers. We provide free medical service and treatment to local residents near our developments and have even begun building a local hospital.

What are KORINDO’s policies for development in peatland, High Conservation Value (HCV) or High Carbon Stock (HCS) areas?

KORINDO has not applied for developed any concession in peatland, HCV or HCS areas. Therefore, KORINDO doesn’t have any peatland over our all operation area to date. We work closely with Indonesian government bodies and third-party experts to conduct HCV and HCS studies prior to any development.