Employee relations

The development and wellbeing of our people is important to ensure we develop the capacity we need to meet our business goals and play a key role in the local communities where we have operations.

At the end of 2013, the Group had more than 1,300 employees and approximately 12,000 contractor and sub-contractor personnel. Contractor organisations work across coal hauling and processing, maintenance, shipping and logistics as well as catering and wider service support. Through 2013, PT Berau maintained its established employment policies recognising local legal requirements.

The Company’s Code of Conduct continues to form the foundation for management of our workforce as well as setting the expectation of individual responsibility. PT Berau has adopted this through a local “Code of Ethics” and a whistleblowing helpline (the “Berau Ethics Alert Line”) and policy which have been rolled out to enable employees to anonymously raiseany issues.

Skill shortages and loss of staff to competitors in the mining industry is a key issue for all mining companies in Indonesia.

Total participants of the first batch of GIP participants are 13, and at the end of the programme eight participants are to be hired as permanent employees. GIP batch two is still ongoing and will end in July 2014.

The Group recognises the right of its employees to freely associate and join labour unions and maintains active relationships with these organisations. In PT Berau there is a single union of which 69% of employees are members.

There have been no cases of labour strikes or employee disruption occurring in 2013 in the Group.

Human rights

The Group recognises the importance of human rights and is committed to respecting human rights throughout its operations.

We do not currently have an overarching policy commitment in respect of human rights, however a number of existing policies and practices demonstrate our approach:

• Communities – strong relations and ongoing engagement with local communities are at the core of PT Berau’s operating model. We continue to provide support, both financial and non-financial, to our local communities. Particular focus is given to ensuring that our resettlement practices are compliant with local legislative requirements.
• Employees – the Company’s Code of Conduct is adopted through the PT Berau Code of Ethics and a local whistleblowing policy is in place. The whistleblowing line, known as the “Berau Coal Ethics Alert Line”, is run by an independent external provider in the US, and reports to the Audit Committee through Internal Audit. Employees are free to join the labour union. Safety at work is a key focus of the HSEC programme, as are developing our training programmes and occupational health management processes.
• Contractors – since contractors are responsible for conducting all mining activities, we recognise that ensuring fair employment practices within our selected contractor and sub-contractor partners is essential.

Employee diversity

The mining sector faces an issue with respect to very low female participation at all levels of business, especially at senior management and board level within companies.

We are fully aware of these issues and are committed to recruitment and selection processes that consider all candidates on the basis of merit and skills, without discrimination or bias.

The Nomination Committee considers the diversity of the Board on behalf of the Directors. During 2013, diversity matters have also been discussed by the HSEC Committee.

As at 31 December 2013 all eight Directors of the Company were male, and 15 members (94%) of senior management were male and one female (6%). Senior management has been defined as key management personnel of Asia Resource Minerals plc, the Directors of Vallar Investments UK Limited and the Board of Commissioners and Board of Directors of PT Berau Coal Energy TbK. Across the total employee workforce, excluding contractors, 1,259 (93%) were male and 93 (7%) were female.

Health and wellbeing

The Group recognises a responsibility for the health of its employees, and the health of the communities which are affected by our activities.

During 2013, a number of procedures in relation to health were approved and adopted, including:

• Occupational health performance reporting.
• Health risk assessment.
• Fit to work.
• Medical check-up.
• HIV/Aids.
• Alcohol and drugs.
• Occupational hygiene.

The requirement is for all staff and contractors to receive a medical check-up at least annually, and for the clinics to provide the results of such assessments to PT Berau for monitoring. No occupational health cases have been identified during 2013. Further work is needed going forward to socialise the new policies with contractors, and to ensure consistent and useful reporting from all contractors and health clinics.