Messages from Management

The ability to adapt with the upcoming challenges in the coal industry and to continuously innovate and improve becomes essential for the Company’s sustainability.

In 2018, the Company was for the second time recognized as obedient Large Corporate Taxpayer. A similar award was also received by KPC from the Government of East Kalimantan as Obedient Corporate Taxpayer and from the Bontang Tax Primary Office as the Largest Corporate Taxpayer 2018. In addition, KPC was given an award from Bank Indonesia as Best Export Foreign Exchange Contributor Corporation and an award as Corporation with Biggest Contribution for PNBP (Non Tax Revenue) in Indonesia from the Indonesian Mining Award 2018. Meanwhile, in the Asia Sustainability Reporting Rating 2018, KPC’s Sustainability Report 2017 received Gold Rank.

In the environmental aspect, KPC received Green PROPER rating from the Ministry of the Environment and Forestry and Green PROPER rating in the Environmental Management 2017-2018 from the Governor of East Kalimantan. From the Minister of Energy and Mineral Resources, KPC received a total of 3 awards, including 2017 Aditama Award for Coal Mining Environmental Management, 2017 Best Coal Mining Environmental Management, and Subroto Award 2018 in the category: Mineral and Coal Mining Safety Management. In addition, Corporation with Best Environmental Management in the Coal Company category in the Indonesian Mining Award 2018.

In community empowerment, KPC continues strengthening its roles in the economic development and the improvement of the quality of life of the community. KPC’s commitment and contributions are set in line with the local culture preservation and our purpose to always bring sustainable benefits. Through collaborative approaches, KPC works with the local communities especially during the process of identification of social needs and available resources in relation with the actualization of our social investments. We also partner with relevant organizations in conducting community social initiatives and activities, through consistent and reliable process that is also capable for monitoring of the development and performance of each initiative and activity.

In the International Open Forum (IOF) on ISO 26000 – Towards Sustainability in Excellence on October 29 – November 1, 2018 in Bali, KPC signed the Declaration Charter of ISO 26000, relevant to the score of 87.7% KPC received beforehand in the self-assessment for its implementation of ISO 26000. The event was also participated by the Post Publication Organization-Strategic Advisory Group (PPO-SAG) from the Netherlands, Austria, India, China, Japan, Germany, USA and Indonesia, in addition to various Non-Governmental Organizations and companies.

In 2018, KPC’s social performances received recognitions from the external parties, such as Palu Humanitarian Care Award from the Indonesian Red Cross, Adhitya Karya Mahatva Yodha 2017 – CSR Business Partner in the category of Best Partner of Karang Taruna from the Ministry of Social Affairs of the Republic of Indonesia, Award for HIV & AIDS Prevention and Management Program in the PLATINUM category from the Governor of East Kalimantan, Award for HIV & AIDS Prevention and Management Program in the PLATINUM category from the Ministry of Manpower of the Republic of Indonesia, Siaga Bencana (Disaster Alert) ESDM Award for participation in the Emergency Response Team in West Nusa Tenggara Earthquake Disaster from the Minister of Energy and Mineral Resource, and Award for Active Participation in the ESDM Disaster Alert Team for the Earthquake, Tsunami, and Liquefaction in Central Sulawesi Province 2018 from the Minister of Energy and Mineral Resource.

These awards were results of cooperation built between KPC and all stakeholders that have enabled the Company to give its best for the country. To that end, we would like to thank all stakeholders for the support that have been given to KPC’s operations. We believe that only through good communication and cooperation, we will be able to maintain and improve the Company’s performance even during difficult time.

Amidst the complex dynamics of coal industry, the Company continues facing various challenges. Change in laws and regulations and price of coal and supporting materials that tend to be fluctuating become some of the current challenges of the Company. Even though the Company is recognized as the largest taxpayer and best foreign exchange contributor, in addition to also contributing to the fulfillment of the Government’s Domestic Market Obligation (DMO), KPC still has homework, which is to achieve a production capacity of 60 million tons per year. Extension of contracts after year 2021 also becomes an important focus of KPC people and all stakeholders.

In addition to various challenges faced by the Company nowadays, KPC is aware of the potential future challenges in the coal industry. The Paris Agreement that has been signed by 195 countries will be in effect starting in 2020. In this matter, the countries will start to look for eco-friendly alternative energy sources and reduce the consumption of coal-based energy. Coal-based energy companies would also start to have difficulties in getting funding from the bank in the future. This will result in the drastic decrease of coal demand after year 2030.

Sooner or later KPC must adapt to the changes by becoming a cleaner energy producer company. To that end, KPC must prepare its long-term plans and ensure that the mid-term and short-term plans will be aligned with the long-term strategies. This of course is done in compliance with the Government’s regulations and with attention to requirements from the customers.

Besides, industry 4.0 is also another aspect to consider by all KPC people. We need to think the changes that need to be prepared and how they will be carried out. This requires participation from all stakeholders, especially KPC employees from all divisions. All employees need to implement EXCEL (Energetic, Express, Courageous, Ethical, and Lead) values in their daily work.

To maintain the Company’s sustainability, KPC is also aware that focus should not only be on the operations in achieving the Company’s vision, but also in paying attention to impacts that result from the Company’s operations on its stakeholders. To that end, as a major coal mining company, we are committed to continuously implement Good Mining Practice to achieve sustainable performance, comply with the applicable regional regulations on mining and sustainable development (Sustainable Development Goals/SDGs).

We believe that through KPC’s performance and its contributions to the Government in the form of tax and royalty payments and sincerely strive to be in compliance with the laws and regulations throughout its operations, KPC’s contract extensions can be secured in time.