REA Review copy No 2 English Draft 281214. REA Review... · mastering our backhoe loaders. Elsewhere, Ibu Rosa Eka ... HIRADC (Hazard Identiﬁcation, Risk Assessment, and Determinate

REA KALTIM REVIEW Edition 2 19/01/2015

2014 - Best Crop Year Ever After disappointing production in 2013, the efforts of Pak Peter Bayliss, Pak Cahyo Suseno and the whole estates team have produced the best year for crop REAK Group has ever seen, driven by increasing production in our young estates, continued diligence in our mature estates, and the massive initiative to bring abandoned areas back into production during the year. The whole team deserves congratulations."

REAK Group - Historic CPO Production, Tonnes"

Strong crop volumes have driven better production of CPO and CPKO, our two primary sale products. Congratulations to Pak Helmiyanto and Pak Surya Budi’s for their efforts in reading oil stocks and maximising sales prior to year end."

Much work was done to refurbish POM and COM in 2014 but there is more to do and the message to Pak Arbidysah at SOM, Pak Eddy Clement and Pak Antony Ginting at POM, and Pak Sabtianus and at COM - is to continue the good work started last year and to keep pushing - but we have to deliver average CPO extraction rates above 23% and minimum daily throughput of 1,600 tonnes in each mill (SOM 800 tonnes)."

REAK - Why not be the best? We can be if you can be! � 1

Editor Selamat Tahun Baru!

Following the issue of REA REVIEW Edition 1, we had some excellent feedback and suggestions which were extremely constructive and helpful and which we have taken on board and so hope that Edition 2 is even better.

Please keep your feedback coming as this is much appreciated. Terima kasih!

Please also keep sending us your own contributions and suggestions and please continue to send these to [email protected].

This Edition 2 is coming out roughly 6 months after the publication of Edition 1. A lot happened in the second half of 2014 and so it seems appropriate to issue this now. However, we can only include some of the many highlights that have occurred since Edition 1 and so, if you feel as though you would like to receive this more frequently, then please let us know.

!Thank You. ED

REA REVIEW News | Reviews | Information

0"

20,000"

40,000"

60,000"

80,000"

100,000"

120,000"

140,000"

160,000"

180,000"

2008" 2009" 2010" 2011" 2012" 2013" 2014(e)"


The field and mills cannot deliver without support from every department in the company and everyone is to be congratulated on their contribution to the 2014 result. "

However, with better extraction rates, transport efficiency and new crop volumes from KMS, CDM and PBJ, this year can be even better. 2015 - Let’s go for it!

We’re Connecting! REAK will become the first company in Indonesia to deliver electricity to it’s masyarakat neighbours using Biogas. This month REAK will sign an agreement with Kabupaten Kutai Kartenegara power company, Perusda, and a sale and purchase agreement with PLN for the supply of electricity to our neighbouring villages. Two weeks after this, the electricity will be turned on marking the commencement of the delivery of 24/7 electricity to 21 villages from Ritan all the way to Kahala. In all, the network will supply 21 villages and approximately 80,000 villagers. "

Despite this success, there is still more to do and REAK remains committed to ensuring PLN and Perusda fulfil their promise to also provide electricity to Desa Buluq Sen in 2015. The opportunity exists to scale up the initial 3MW of installed capacity to 8MW subject to future demand and acceptable commercial arrangements with Perusda and PLN."

Congratulations to Pak Pung Andita and the Biogas Team, Pak Maharlika Wiedhayaka and the Legal Team and all involved in making this massive project such a great success for REAK and our village partners."


Plasma news After a long permitting process, REAK has now received the IUP for PBJ2-Kaltim that will allow REAK to fulfil the majority of its plamsa obligations to our neighbouring villages in Kecamatan Kembang Janggut.

As an RSPO accredited member, REAK is obliged to complete an HCV assessment, RSPO Audit and then post the results of this process on the RSPO website for a full month. It is envisaged that this process will be completed by the end of July.

The Land Compensation process is already underway as is the formation of the various village Koperasi and formation of the membership lists that are an essential part of finalising the plasma scheme.

Contractor negotiations are due to start in July and, once complete, should see land clearing commence in September with first plantings shortly thereafter.


REAK Anniversary 2014 What a fantastic day! The 19th Anniversary Day was organised by Ibu Adriana and her panitia who put together probably the best organised event so far, involving not just REAK but many teams from our neighbouring villages and which really sets the bar high for the 2015 panitia. "

Many thanks to Ibu Adriana Kila and the extensive team that came together to make this happen. A special thanks from Pak John Oakley, Group MD, who made the trip from London especially and was extremely impressed. Thank you also to Matius Raharjo for the fantastic commemorative poster above."

Sentekan Soccer Cup A great initiative to come out of the many fantastic competitions from the 2014 Anniversary Day was the Sentekan Soccer Cup which, coincidentally, just happened to be won by Sentekan, beating Central by 3 - 0 in a high quality final after a series of knock-out stages involving 26 teams. This was a big undertaking and credit must go the Pak Abdul Gafar Hadi and his team of organisers, and we all hope this will be a regular part of the Anniversary going forwards - who knows, perhaps also a full league competition Pak Gafar?"


People REAK continued to strengthen the team in the second half of 2014. Whilst some old faces have gone, high quality new talent has joined.

REA REVIEW says a very warm welcome to:

Pak Wikarno Agus, HSO, Pak Purwantoro, Sustainability Manager, Pak Asep Setiawan, Survey Manager, Geoff Logan, Head of Mill Operations, Pak Engersaal Subramanian, Systems Advisor, Pak Raschanol Colik, Estate Manager Satria, Pak Sahrizal, Senior Estate Manager, Perdana and a welcome back to Eddy Clement Samuel, Manager POM, and Pak Okta Fitrajaya Toer, Legal Manager DVA.

Markets After a period of relatively good prices during the first half of 2014 - where CPO prices, FOB Sungai Mariam, averaged Rp 8,350 / kg - prices in the second half of 2014 averaged just Rp 7,400 / kg, a drop of about 11%. International market prices over the same period dropped more than 25% but local prices benefitted by dropping out of the export duty price bracket and from the significant depreciation of the Rupiah against the US dollar. !In late December 2014, CPO CIF Rotterdam, was trading at US$ 655 / Mt from a high of US$ 992 in May 2014 and a 5 year high of US$ 1,325 in February 2011. No significant increase in prices is expected in the near term.


Driving Success REAK’s key initiative to develop a pool of female drivers is gathering pace with Ibu Leni (pictured), Riring and Maya all passing their SIM A license this year. Ibu Leni has also obtained her SIM B for heavy vehicles with Ibu Maya mastering our backhoe loaders. Elsewhere, Ibu Rosa Eka Delima is also doing a great job operating our grapple crane on the empty bunch station at POM."

This sets a great example which we hope will help in attracting many more women to take up the opportunity to train to be REAK drivers. If there are any wives, partners or other ladies that are interested in training as a driver, please feel free to contact Ibu Waryanti in HRD."

New Loading Ramp POM The huge new loading ramp at POM was completed and fully commissioned by the end of November and is now running at full capacity. We can now return to receiving and grading all masyarakat fruit from south of the river. Many thanks to Pak Pung Andita, Pak Erik Kosasi, our contractor, PT SAI, and their teams. Work has now started on the refurbishment of the old loading ramp which should be finished by the end of March, giving POM enough ramp capacity for many years to


Health & Safety News The following initiatives were implemented in 2014:

Driving Tests - all REA drivers are to meet the minimum standards in operating the company vehicles.

Accident Investigation Training - for safety committees for readiness and required procedures.

Emergency Training - for all relevant employees, including fire, B3 waste spills, personal injury and others.

FireFighting Training - to alert emergency response team on fire management.

First Aid Training - for emergency response team and relevant employees in the event of injury to employees.

HIRADC (Hazard Identification, Risk Assessment, and Determinate Control) Training - calculating risks and controls necessary to comply with regulations.

Emergency Response Preparedness (STD) - to ensure facilities are available and in good condition.

Standard Operating Procedures (SOP) - improving SOP for all aspects of safety.

Safety Induction Video - For new employees and visitors to provide an understanding of procedures when at REAK.


come."

Tap Open on Water Projects REAK’s Community Development Team completed two ground-breaking milestone projects in late 2014 with completion of the clean water projects for both Desa Perdana and Desa Long Lalang. Both occasions were marked by village ceremonies again arranged by Ibu Adriana Kila and the the ComDev team. REAK actively supports village development and these are just two further examples of the many ways in

which the local community has benefitted from REAK’s ComDev programme. Well done to all involved."

REAK New Estates Pak Murali Tharan’s Immature Estates team has had a busy


What El Nino? The widely expected El Nino weather event did not ultimately materialise as predicted.

2014 was still a very dry year with roughly 70% of the rainfall that we experienced in 2013. Also, the period from mid-August to mid-October was exceptionally dry, leading to very dusty conditions and a number of fires on the edges of our kebun.

The El Nino Risk Review higlighted many potential impacts of an extended drought including the need for additional fire fighting equipment. The purchase of this extra equipment meant that our estate teams were able to handle the fires that did occur very well

Following the signing of an agreement with the villagers of Desa Tuana Tuha, facilitated by Ibu Wardiana from ComDev, we have opened our new demarga at Pendamaran which means that, whilst road transport is always our second option, we are able to keep operations running even when Belayan river levels are very low.

!!!!


2014 and is about to have an even busier 2015 as land development really takes off."

CDM is making good progress with Pak Tarsan Sinabutar’s team pushing ahead and finalising land clearing in the Transmigration Area, with 237 hectares cleared this year. The next challenges are the much larger areas of the HGU that

have been defined following extensive work carried out in 2014 to better understand issues such as flood risk. Next year should be very exciting as CDM as this momentum continues."

PBJ now has strong momentum with over 850 hectares cleared in 2014 despite many village issues that took some considerable time to resolve. In addition, extensive due diligence was required to understand the risks surrounding potential flooding, and PBJ has decided to control these risks by bunding the northern half of the estate which overlaps with


Sustainability The Indonesian Sustainable Palm Oil (ISPO) Audit, Phase I to REAK and SYB was held on 16 to 19 December 2014. The ISPO is a commitment by the government to the development of sustainable palm oil in Indonesia. ISPO is mandatory for all oil palm plantation companies operating in Indonesia. The 7 Principles & Criteria of ISPO are:

1. A Licensing and Plantation Management System

2. Implementation of the Technical Guidelines for Aquaculture and Palm Oil Processing

3. Environmental Management and Monitoring

4. Responsibilities of Workers

5. Social Responsibility and Community

6. Empowerment of the Community Economic Activity

7. Sustainable Business Improvement,

The Phase 2 audit will be in February / March 2015. Non-conformities from Phase 1 must be immediately followed up and completed by this deadline.

It takes hard work and solid team work to address these matters.


Desa Muara Kedang. Bunding will start imminently and take approximately 6 months, after which land clearing and planting can take place with minimal risk of flooding going forward. "

New office and barrack accommodation has been constructed and VSAT communications installed to allow Pak Harjono and his team to move onto the estate and to really ramp up the hectares cleared in 2015."

REAK acquired a number of strategic land areas during 2014 that will add about 7,600 hectares to the existing development areas in CDM, PBJ and KMS. In addition, REAK remains confident of completing the acquisition of PT Prasetia Utama from PT Fajir Bumi Sakti, an area of over 9,000 hectares adjacent, but on the opposite side of the Balayan River, to Satria estate."

Going forwards, all of this additional new land gives REAK the ability to expand its planted area to some 65,000 hectares from around 36,000 hectares today."

SOM goes for 80 tonnes/hr SOM is to expand from 40 tonnes/hour to 80 tonnes/hour in 2015 with commissioning targeted for December. The contract for the second boiler was awarded to PT Atmindo following a competitive tender process. Invitations to tender have also already been issued to prospective contractors. Construction works are expected to commence in March 2015 with the casting of the foundations for the new boiler. "

Samarinda under siege The Samarinda office was disrupted on several occasions in the second half of 2014 as NGO activists again blockaded the office. The whole REAK team at Samarinda is to be congratulated on their calmness and professionalism in the way they dealt with this disturbing situation. Thanks also to Ibu Ester Adjang who happened to be in Samarinda at the time of the first protest and was able to use her ComDev skills and experience of the local community to calm the situation after the office was evacuated."


REAKon In 2014, Independent experts conducted vegetation surveys to determine the type of plants and trees in the conservation areas and edges of Kedaron Estate, PT KMS. The data obtained identified an interesting plant of note, the Durio acutifolius.

Durio acutifolius is shaped like durian but smaller and red. This plant only exists in Borneo (endemic) and is often referred to as durian haha because when ripe the fruit will open and expel its contents. Durian is also an orangutan food and can be a further indication of their presence in the area.

REAKon’s other activities include the provision of seedlings to staff / employees and communities around REA Keltic for the enrichment of public facilities and conservation areas. The remaining 816 olive seedlings, jackfruit, durian, laic, mango and ironwood will be distributed by March 2015 on a first come first serve basis.

Happy New Year 2015; New Year - A New Hope


Tax Team Triumph Pak Firman Kartasasmita’s Tax Team has worked hard over the last couple of years pulling together all of the data necessary to appeal some large historical tax charges. A number of these have been defended successfully this year, the most notable resulting in a Rp102Bn refund in relation to the 2008 tax charge. A fantastic achievement, well done to the whole team."

Sungai Mariam Jetty Underway The piling for the refurbishment of the Sungai Mariam jetty began on 1 January 2015. The start date was put back to allow Pak Helmiyanto’s Sales and Marketing Team to reduce our estate stock of CPO and CPKO prior to year-end 2014. The project’s steel walkways and supporting steelwork have been under fabrication since October in order to speed up the overall construction timetable and it is hoped that the project will now be completed and ready for use by Pak Surya Budi’s team by June. "

Back to School REAK’s increasing commitment to the education of our employee’s children was marked by the completion of the extension to the Sentekan School, comprising two new classrooms. "

The very impressive new extension to Sentekan School was opened by some very special guests. Main REA Board Directors David Killick and Irene Chia were joined by


Grapevine! There is a lot going on close to REAK’s operations:

PT TPS, to the south of Tepian estate, is commissioning its first 30 tonne/hr mill;

PT SSS, near KMS, commissioned its first 60 tonne/hr mill in mid-2014;

PT Kalpataro, to the north of Satria, has recommenced development after an extended period of inactivity;

BW Plantations, owner of PT SSS has recently been acquired by Greeneagle;

Further afield, New Britain Palm Oil has been bought by Sime Darby.

Winning Ideas? REAK will be offering prizes to any employee coming up with a winning idea that either improves company performance, reduces company costs or enhances health & safety.

Prizes will be determined by a management panel and reflect the size and nature of the benefit to the company of the winning idea.

Please send your winning idea to [email protected].

!!


Commissioner Mike Jefferies and REAK’s long standing Insurance Broker Uttam Kripalani. Pak Sjah Djaffar, the longest serving REAK member of staff, also made a long overdue return visit after many years away from the kebun. Please don’t leave it so long next time Pak!"

Pak Abd. Gafar Hadi, Ibu Adriana Kila, Ibu Magdalena, Pak Pung Andita, Pak Jul Tampun’s Building Team, and contractor John Kosumohardjo’s PT ABM all deserve thanks - a great job well done!"

The construction of a new school in Tepian is now also underway and REA REVIEW hopes to bring you news of another grand opening in Edition 3."

School Buses In recognition of the need to provide appropriate transport to and from our schools for all of our employee’s children, REAK has purchased a new school bus."

Following the receipt of feedback on the new bus from users

and management, REAK has placed an order for 6 further buses, with a slightly different design. "

The new design of bus will be a single cabin layout with air conditioning and a better seating arrangement. The new buses should start arriving during next month."


Coming Up? Forthcoming events include:

Where’s the 2014 Family Day

Don’t worry, it’s coming. Huge apologies for the delay in getting the 2014 Family Day organised but it IS GOING TO HAPPEN and is scheduled for 25 January 2015….. which probably means we will be having two Family Days in 2015!

Expect a fantastic day and some really good prizes for mum, dad and the kids. ED looks forward to getting some good photo’s for REA REVIEW Edition 3. The panitia for the Family Day is being headed by Pak Wikarno Agus so please give him and the team as much support as you can.

REAK 20th Anniversary Day

REAK’s celebrates its 20th Anniversary in 2015 and so this is a very special year. No news on the panitia yet but REA REVIEW will provide a full update and details on timing in due course….. watch this space!.

2015 Best House and Best Emplacement Awards

The 2014 Awards have been a great success. ED has heard that the awards for 2015 are going to be even better and that the competition is likely to be extremely fierce.

!!


New Central on the way The land ownership rights for the New Central area have now been successfully mapped and negotiations have already begun with the relevant villagers to determine land compensation."

The initial design of the new offices and village layout is being undertaken by Pak Pung Andita and the Building Department and REAK will also be establishing a committee to allow staff to become involved in the ongoing design, layout and choice of recreational facilities that we include in New Central."

New Central is intended to provide state-of-the-art offices, modern Batako housing and a full range of recreation and sports facilities aimed at meeting the needs of our Staff. See the next edition of REA REVIEW for an update on progress. "

Land Application Update Extensive work has taken place in 2014 to refurbish our land application pits to ensure that we can continue to safely manage any residual effluent that is not currently consumed by our Biogas plants. "


PPMD Training In an effort to improve the agricultural prac3ces and management of the PPMD co-‐opera3ves, REA is collabora3ng with an NGO called SNV (www.snvworld.org) to implement a ‘train the trainer’ programme for 5 PPMD co-‐opera3ves.

The aim of this programme is to provide each co-‐opera3ve with the materials and skills necessary to train other members of the co-‐opera3ve in good agricultural prac3ces.

The first training session was held at the beginning of December and was aPended by 5 members of REA’s plasma team, as well as 20 representa3ves from the Belayan Sejahtera, Karya Penoon, Karya Makmur, Pinang Berjaya and Benua Etam Jaya PPMD co-‐opera3ves.

The focus of the training was good agricultural prac3ces, using training materials developed by SNV. The par3cipants were taught a variety of different training methods, including the use of case studies, flash cards and games. Unfortunately, the weather was not good enough to carry out the prac3cal field sessions as intended.

The next training session will take place in early 2015.


In addition to the refurbishment exercise, REAK and SYB are also in the process of establishing pits in remote areas of our estates to ensure we have enough capacity, even in an exceptionally wet season, and to enhance the organic fertiliser

regime that we are increasingly using. All existing pits are fully permitted and our new pits are undergoing the formal government monitoring process to obtain full accreditation and licensing. "

New Look Speed Boats REAK’s speed boat fleet has been undergoing a well earned refurbishment, both inside and out, and now looks very smart again."

In case you did not know, all our speedboats are NO-SMOKING areas and any one seen or reported smoking on the boats may face disciplinary action. This is an important safety matter and is in the interest of everyone’s safety and well-being. Life jackets should also be worn whilst on the speedboat and Pak Wikarno Agus will be undertaking a socialisation exercise and implementing procedures to ensure strict adherence going forward."

Fingerprint Check-Clock The fingerprint check-clock started running on a trial basis in October and has been very successful. The information is downloaded automatically onto a spreadsheet and so makes the controlling of working hours much easier for our mill and


Cadet Blog Cadet Force XIV impressions:

Br. Iban, Philip, ex-‐Mandor, Cakra since May 5, 2004: "Life is a play. Anything that happens to me, I will accept with sincerity. Ini3ally, I refused Cadet training because I believed it to be a charade which, without allowances and premi’s, would not provide material benefits above a Mandor. But aber Cadet Training, I am sorry I did not do the programme before. The results are amazing. I am lucky because I have acquired so much knowledge and am ready to prove it on the field.”

Ms. Yuni Fitriany, University of Agriculture S1 Diamond Yogyakarta: "It's a rewarding experience to join 45 other Cadets. Experiences and lessons learned include discipline, responsibility, 3me-‐management, adap3ng to situa3ons to appreciate firsthand how to be a planter. One of the most memorable experiences in my life is knowing 45 very remarkable people. The Cadets are a new family to me who I'm proud of. We reinforce, mo3vate, enjoy each other. I hope the program remains this amazing in the future, thanks to the instruc3on of the leaders, managers and mentors ”

Wri$en prior to 6 months “on the job” training. More from the Cadets in Edi;on 3.


estate admin teams. "

As a result the decision was taken in December 2014 to move to using the fingerprint machines permanently and to remove the old paper card system. "

Importantly, the paper cards can always be used in the event that, for whatever reason, the fingerprint machine does not function."

Best House & Emplacement The judging panel had a very hard job choosing from a long list of entrants who obviously really take pride in the homes that

REAK provides for them and demonstrate their respect for this privilege by working hard to keep their house in the best condition possible. "

After long deliberation, it was impossible to separate the two best houses and so a prize of Rp10 juta for REAK’s Best House 2014 has been awarded to both Ibu Amira, Sentekan Sub LH84A (below top) and Pak

Djairul Pijau Hanggi, Berkat Main FA001B (below bottom). Very well done to you both! the best house in each emplacement also received a prize of Rp2.5 juta."

The Best Emplacement was also fiercely contested and, in the end, the judges also could not separate the two best and so the prize of Rp30 juta for REAK’s Best Emplacement 2014 goes to both Berkat-Main and Sentekan-Main. Excellent, well done! "

There are some emplacements where the whole village pulls


Keep REAK Tidy! Remember the golden rules:

• Do not drop litter on the floor

• Do not throw litter out of your car window

• Always put litter in a rubbish bin

• If there is no bin close by, take it with you until you see a bin

• If you see someone dropping litter, ask them to pick it up and dispose of it correctly

Make REAK a clean, hygienic place for everyone to live

Keep REAK Tidy!

!!!


together in an atmosphere of mutual respect to make their emplacement a pleasant and clean place to live. Hopefully, this sets an example for those emplacements where there appears to be a “don’t care” attitude and where the standard of housing has been allowed to drop due a lack of care and maintenance."

2015 looks set to be a very fiercely contested year and REA REVIEW hopes that all emplacements will join in and make the effort.


Documents

REA Review copy No 2 English Draft 281214. REA Review... · mastering our backhoe loaders. Elsewhere, Ibu Rosa Eka ... HIRADC (Hazard Identiﬁcation, Risk Assessment, and Determinate