Berau Coal Energy

Our Approach

Throughout 2013 we continued to work on the core elements of our HSEC programme that were established in 2011 and 2012, recognising the need to understand and meet stakeholder expectations of a UK listed and international mining company, whilst building internal HSEC capability at the local level.

Our overall approach and governance model for HSEC is outlined through the Group Statement of Intent. The four principles of operation are as follows:

  • Enable our operating companies to build the capacity and understanding that is necessary for local decisions and practices to deliver international standards on a consistent basis.
  • Work in collaboration and partnership with government, contractors and communities to achieve common governance that reflects their common responsibilities and dependency on each other.
  • Exercise a “stewardship-based” decision model recognising that our activity at any asset is temporary and that the social and natural environments have to be sustained after mining has stopped.
  • Apply global governance that has, at its centre, adoption of local solutions that understand local needs and priorities. The following pages provide further detail on our progress and achievements during 2013. Following a summary of the governance structure and areas of focus, we have presented these under the headings of Safety, Community, Environment and Employees (including health). These are the key elements of our HSEC programme based on discussions with our internal and external stakeholders.

The Board supervises the HSEC programme through the HSEC Committee, which met three times during 2013. The CEO has executive responsibility for HSEC together with the Company’s Chief Mining Officer and the President Director of PT Berau. The Group General Counsel and Company Secretary is secretary to the HSEC Committee and assists the Committee in the discharge of its duties.

The Committee believes that it has an appropriate level of technical knowledge and expertise to exercise effective governance over HSEC matters. Tony Redman, an experienced mining professional, was the Company’s technical advisor until 31 December 2013 (“HSEC Advisor”) and attended HSEC Committee meetings throughout 2013. In addition, the members of the Committee have experience of working in Indonesia and managing relationships with local community stakeholders over a number of years. The appointment of Keith Downham as Chief Mining Officer in October 2013 also brings further experience of managing HSEC in international mining companies.

Stakeholder engagement

We recognise that stakeholder engagement is an essential part of responsible business conduct, and are committed to managing our business in a way that considers the perceptions of all stakeholders and seeks to build consensus between them. We engage with stakeholders through a number of means including, but not limited to:

  • The community development team responsible for maintaining scheduled engagement with 38 local villages, tribes and representatives of the local government.
  • Regular dialogue with the workers union, of whic approximately 69% of PT Berau employees are members.
  • Meeting with contractors to cover both operational and HSE matters, including monthly Safety Committee meetings.
  • The environmental and community impacts of the Annual
  • Work Plan (“RKTTL”) and the Budget and Work Cost Plan (“RKAB”) with the Directorate General of Mineral and Coal, district and provincial governments.
  • Publication and distribution of the information on plans for increased production at Binungan, involving NGOs, local government, communities representatives, local universities and other relevant stakeholders.

We will continue this engagement programme in 2014. This approach demonstrates our commitment to transparency and engaging with key people and organisations who are important to the Group.

Priorities for 2013

In 2013, the HSEC Committee determined the following priority areas which were considered as essential, in addition to ongoing HSEC management processes:

  • The delivery of basic safety training to all supervisors and section heads. A safety review performed in 2012 identified this population as most at risk.
  • The development and implementation of a commissioning policy to address risks of unsafe tools and equipment being used in operations.
  • The commencement of an external energy audit, and collection of data to meet new UK legislation with respect to greenhouse gas emissions reporting.
  • Continuing the work started in 2012 to move HSEC data reporting definitions and processes towards international standards.
  • Developing further the model for the Company’s oversight and monitoring of local operating company HSEC activities.

In addition, we have continued to focus on community development including monitoring of resettlement activities, reviewing the governance structure of the Berau Foundations and the allocation of community development funds to projects.

The Committee has received and reviewed reports on HSEC progress and performance from PT Berau management, and challenged these as appropriate.

2014 Focus

We have continued to embed the HSEC governance model at both a Group and operating company level during 2014, whilst ensuring progress in the core HSEC areas, including:

  • Maintaining the focus on safety through a safety audit conducted by an independent third party;
  • Continuing stakeholder engagement activities; and
  • Implementing recommendations from an energy audit which reported in February 2014.