PT. Bumi Resources Tbk. - Corporate Social Responsibility

Investor Relations

Corporate Social Responsibility

BUMI takes a strong interest in ensuring that all stakeholders are involved in and benefit from its operational activities. In seeking to balance the extensive and necessarily invasive character of its mining operations, BUMI, through its subsidiaries, PT Kaltim Prima Coal (KPC) and PT Arutmin Indonesia (ARUTMIN) has put into place comprehensive and wide-ranging programs to assist surrounding communities with their development projects.

These community development programs operate alongside and form part of the larger issue of corporate social responsibility (CSR). In all its actions, both operational and managerial, BUMI focuses energy on ensuring that it uses and promotes the best information and support mechanisms for its workers, the local governments, involved NGO’s and surrounding communities.

In maintaining excellence in its operations, BUMI is contributing to the betterment of all stakeholders. By monitoring and reducing waste products, by creating multiuse infrastructure, by providing employment to local people and by just being a part of the local and national communities, BUMI is demonstrating that social responsibility can be integrated within all business decisions.

While sudden emergencies demand rapid responses, the thrust of BUMI’s community development efforts are long-term programs in the areas of health, business development, community infrastructure development, natural conservation and capacity building. By remaining in close communication with the people of the surrounding communities, not only is goodwill generated, but a sense of empowerment is developed, leading to long-term sustainable community development.

KPC
Since its mining operations began, KPC has created a wide network both to determine community needs and to deliver appropriate assistance. Within this network are checks and balances to ensure that any assistance given achieves the goals originally set. In such monitoring, KPC aims at maximizing the effectiveness of the money that it invests on a yearly basis.

In 2008, KPC was able to allocate US$5 million in its seven areas of involvement: agribusiness development, health service and sanitation improvement, education assistance, public infrastructure provision, local business and Small to Medium Business development, natural and cultural preservation and capacity building for communities and their local governments.

Agribusiness Development
In cooperation with the Regional Agribusiness Development of the regional government of East Kutai, KPC’s Community Development developed the following initiatives to help grow and develop the agribusiness in East Kutai:

Guidance and assistance to develop Orange cultivation in Rantau Pulung.
Guidance and assistance to develop Patchouli (Pogostemon cablin Benth – used for an essential oil) cultivation through the Bukit Subur Mandiri Cooperative.
Cooperation with The Indonesian Coffee and Cacao Research Institution (ICCRI) in Jember to guide cacao farmers in Sengata, Bengalon, and Rantau Pulung in combating attacks of helopelthis and VSD pests.
Empowering local farmers’ capacity through training, seeds supply, and assistance with associated agribusiness activities.
Empowering fishermen and fish breeder capacity in the form of training, hatchery fish, fishery equipment and related infrastructure.
Cooperating with the Bogor Agriculture Institute in cow cultivation in mining reclamation areas.
Managing the BUMI Training and Business Development of Conservation
Building infrastructure and renovations related to agribusiness.

Community Health Service and Sanitation Improvement
A major initiative is underway to develop a new Sangatta Hospital to provide more extensive treatment options for the whole district. The time frame for construction, staffing, equipping and starting operations is measured in years, and in this planning phase large contributions to a sinking fund were made. However, KPC continues and will continue to provide a wide range of health services to the community including, harelip, cataract and burn surgeries, TB, HIV/AIDS and other contagious, disease treatments, and information campaigns.

As part of its CSR programs and in support of Millennium Development Goals, KPC has continued its community health programs in East Kutai as follows:

Tuberculosis control program supported by the Tuberculosis Combating Club (PPTI), Indonesian Doctor Association (IDI) of East Kutai, and the Indonesian Red Cross (PMI). The activities carried out during this program are coaching, empowering Tuberculosis cadets, and conducting a Diabetes Symposium, describing its relation to Tuberculosis.
Medical Instrument Supply, Medicine, and health facilities and supporting facilities.
HIV/AIDS Prevention Program through monitoring, elucidation, and medical check-ups and conducting a Talk Show with theme of Fight against AIDS.
Health Elucidation to the public through a program called Hallo Dokter on GWP radio.
The Nutrition Education and Rehabilitation Program aims at improving mother and child health through sponsoring Mother-Child Health Clinics (Posyandu) and direct health monitoring in the community.

Education Assistance
In recognition of both the demand and the need, KPC is investing in the creation of an Agricultural College in the Sangatta area. Combining its commitment to agribusiness development with nurturing talent through education, this Agricultural College will produce graduates who can help a vast number of new and established farmers with understanding and accessing the best techniques, new technologies and local and international markets for their produce.

KPC continued to support its long term programs, which in 2008 continued:

To provide scholarships to students of East Kutai from Secondary School to Doctoral Degree. In this program KPC works together with IPB and STMD Yogyakarta and helped 240 students,
To develop teacher capacity through several trainings such as Quantum Teaching Dissemination and Media Creativity and Learning Methods,
To improve the education infrastructure facilities in East Kutai,
To establish Education Talk in GWP radio that discusses education issues,
To support and aid Indonesia Junior Achievers by providing a new MoU signed by PJI Headquarters, represented by Sarwono Kusumaatmadja, and KPC, represented by Harry Miarsono, and witnessed by the Regional Secretary and by representatives from the Education Department of East Kutai.
To encourage Story Telling by the establishment of a road show around Sangata and Bengalon mingling Story Telling with improving children’s interest and knowledge through Story Telling.

Community Infrastructure Enhancement
Appropriate infrastructure development in East Kutai will improve people’s lives. Towards this end, KPC has done considerable infrastructure development and renovation in East Kutai based both on demand level and recommendations received. Some of the programs that have been done or are still in process in 2008 are:

Constructing and renovating education facilities such as schools, libraries and classrooms,
Providing clean water facilities in several areas in East Kutai, Sangatta, Bengalon, and Pantai Pulung
Construction, renovation, and maintenance of streets in several areas in East Kutai,
Facility improvement in the city of Swarga Bara,
Construction of ADM street that connects Rantau Pulung and Sengata, dramatically shortening travel time
Assistance in construction of houses of worship.

Local Business and Small to Medium Business Development
The success of small and middle size entrepreneurship is a sign of people taking control over their economy. KPC supports enhancement and opportunity of entrepreneurship through the following programs:

Empowering local contractors by involving 78 contractors in KPC projects,
Empowering cooperatives in East Kutai, by, for example, KPC working hand in hand with Koperasi Mitra Tani Bengalon providing seed supply for reclamation purposes,
Helping develop the natural coloring business and bag production process from plastic waste in Sengata, in association with the Environment Care Community Forum,
Packaging process training followed by small entrepreneurs from Sengata, Bengalon and Rantau Pulung.

Natural and Cultural Preservation
KPC awareness of natural and cultural conservation are shown in the following programs:

KPC is again committed to and agreed to partnership with TNK (Kutai National Conservation) and is continuously involved in TNK activities,
The signing of MoU between KPC and Wehea National Conservation that declares KPC’s commitment to the steps necessary for national conservation,
Aid to the Environment Care Community Forum for the purpose of community-based waste management,
Aid to the art world in Jakarta for example to the Sculpture Art Club, Ngundi Laras Club, and the Lekan Maren Carving Art Club,
The making of Lamin Adat as a form of cultural empowerment for remote communities,
Aid to tourism spots of Gua Kongbeng in Miau Baru.

Institutional, Governmental and Communal Capacity Enhancement Program
Support and aid from KPC aiming at improving institutional, governmental and communal capacity include the following programs:

Facility supply for flooding precaution to Kesbanglinmas Agency (National Unity and Community Protection),
Operational aid to TV Kaltim, a local TV station, with its purpose to improve facilities for the dissemination of local, regional and global news and information around East Kutai Regency,
Information transfer on Law of Home Violence (KDRT) and support of mass wedding,
Bus supply to Regency Government of East Kutai as means to support the regional government is providing adequate transportation,
Donation to national and religious holidays and other public holidays,
Employee and family sport and social programs formulated by BAPOR (KPC Employee Sport League Association).

ARUTMIN
With the strong support of local leaders and people, Arutmin continues to assist community development by supporting worthy projects. Its 2008 budget of US$2 million was 89% allocated and went to support projects in the areas of local economic development (16.9% of total), education (28.5%), public health (4.9%), socio-cultural development (15.6%), public infrastructure (18.1%) and direct donations (16%).

Though its collaborative approach, Arutmin has effectively created strong community ties and a cooperative environment in which the mine finds support both for its continued operations and for expansion plans.

Local Economic Development

BMT Al-Falah Binaan PTAI received Padma Award from Ministry of Human Resources,
Farming Coaching center opened in Senakin,
Fishery breeding opened in Asam-Asam,
Training on natural fertilizers in Batulicin.

Educational Development
Arutmin has been continuing its long term commitment to help students gain access to education. Each year over one hundred students are provided with scholarships to attend college and nearly one thousand are given scholarships for grade 12.

Public Health Development

Scholarship program to Kintap students,
Distribution of educational assistance in Kotabaru, attended by Kotabaru regency leader,
Cataract surgery program,
Blood donor program.

Socio-cultural Development
Arutmin provides emergency relief due to natural disasters, and when flooding did occur in the area in 2008 Arutmin was able to deliver help. Also, Arutmin is interested in supporting local arts and crafts and helping local communities in promoting and sustaining traditional arts.

Public Infrastructure Development

The building of permanent bridge in Lokpadi.
The building of mosque at Babussalam, Kelumpang Utara.
The coaching of Mamanda Art Clunbat Satui.
Supporting the implementation of PORSAIN, a weather disaster center, in Kotabaru.