Governance

Overview of GCG Implementation, Core Values, Committees, Supporting Documents, and Speak Up System

Governance

Overview

BUMI recognizes the importance of implementing Good Corporate Governance (GCG) within the Company to gain investor confidence to increase the long-term value of shareholders and other stakeholders. BUMI is required to implement GCG principles in its business activities that are transparency, accountability, responsibility, independence, and fairness. Therefore, BUMI's Board of Commissioners and Board of Directors have ensured the adequacy of GCG practice in the Company and all applicable laws and regulations regarding GCG have been met. BUMI adheres strictly to Indonesian regulation in the design and implementation of its governance processes while recognizing the importance of meeting international governance standards for the benefit of international investors and shareholders.

The following list comprises the main regulatory framework for governance followed by BUMI and its subsidiaries:

POJK No. 21 / POJK.04 / 201 5 tanggal 17 November 2015 regarding the Implementation of Corporate Governance Guidelines for Public Company.
OJK’s Circular Letter no. 32 / SEOJK.04 / 2015 dated 16 November 2015 regarding Corporate Governance Guidelines for Public Company.
Indonesian Best Practices – The Code for Good Corporate Governance composed by the National Committee for Corporate Governance.
ASEAN Corporate Governance Scorecard.
OECD (Organization for Economic Co-operation and Development) Principles of Corporate Governance

Governance

Objectives of GCG Implementation

Good Corporate Governance sets the relationship between shareholders, Board of Commissioners and Board of Directors, and all the stakeholders. The purposes of Good Corporate Governance for the Company are to:

To maximize corporate and shareholder value by enhancing transparency, accountability, responsibility, independence and fairness in order to strengthen BUMI’s competitive position both domestically and internationally and to create a sound environment to
support investment.
To encourage the management of BUMI to behave in a professional, transparent and efficient manner as well as optimizing the use of and enhancing the indepence of the Board of Commisioner, the Board of Directors, and the general meeting of shareholders.
To encourage shareholders, members of the Board of Commisioner and the Board of Directors to make decisions and to act with strict sense of morality in compliance with their social responsibility towards the various stakeholders and the protection of the environment.

BUMI adhering to the five principles of Good Corporate Governance: Transparency, Accountability, Responsibility, Independence and Fairness are essential in each of these objectives.

Governance

Stages of GCG Implementation in BUMI

Implementation of GCG in BUMI is a top down approach. The Board of Commissioners, the Board of Directors and shareholders are committed to implementing the best corporate governance practices (GCG). Therefore, through the Decree of the Board of Commissioners and Board of Directors No. 739 / BRBOD/ IX / 06 dated September 20, 2006, the Board of Commissioners and Board of Directors introduced the GCG BUMI policy through a document entitled “They Way We Are Expected To Work” and other GCG related policies such as the issuance of the Board Manual, Code of Conduct, the establishment of supporting organs of GCG implementation such as Corporate Secretary, Audit Committee, Remuneration and Nomination Committee, Risk Management Committee, Internal Audit, CSR.

The organizational structure of BUMI clearly lays out the duties and responsibilities of each personnel and the system of accountability of each function. GCG policies and other policies and procedures are communicated to all levels of the Board, management, and employees and serve as guidance for Commissioners, Directors, Managers, employees at all levels in BUMI as well as in business units. The commitment to implement GCG requires not only policy making, but also resources, both human and material resources. Therefore, BUMI hired people to fill the required positions.

The implementation of GCG is an interactive process in BUMI where all the organs and elements in BUMI must participate in it including the implementation of the concept of reward and punishment through the Speak Up System (whistleblower system).

Periodically, Internal Audit as well as independent parties including potential investors and creditors review the implementation of GCG in BUMI and provide recommendations for improvement.

Governance

BUMI Core Values

BUMI’s core values are:

Integrity
Excellence
Profesionalism
Safety and environment

BUMI’s mission is to secure and operate sustainable energy and mining businesses and compete aggressively but fairly in response to global competition to increase return on investment to shareholders, improve welfare of employees, enhance public prosperity in the surrounding areas of the operating sites and promote environmental sustainability at all surrounding areas of the operating sites. To accomplish our mission, our core values that are integrity, excellence, professionalism and safety and environment are critical to the success of our business as described in the following chart.

Governance