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INDOFOOD AGRI RESOURCES LTD
SUSTAINABILITY REPORT 2014
SUSTAINABILITY
GOVERNANCE
Over the years, IndoAgri has implemented various initiatives to
strengthen its governance practices and educate its operational
units on the importance of good corporate governance.
BOARD AND SENIOR MANAGEMENT
The Board and senior management of IndoAgri are
responsible for enforcing the Group’s high standards of
corporate governance. This is achieved by enhancing business
management and processes in order to drive organisational
performance, accountability and transparency.
As of 31 December 2014, the Board comprises an independent
non
-
executive director who serves as the Chairman, three
independent directors, three executive directors, and two non
-
executive directors, represented by five Indonesians, three
Singaporeans and one British. The Board is assisted in its duties by
the Executive Committee, Audit and Risk Management Committee,
Nominating Committee and Remuneration Committee.
The detailed terms of reference of each committee, disclosures
on directors’ remuneration and significant policies can be
found in the Corporate Governance section of our Annual
Report available at
ENTERPRISE RISK MANAGEMENT UNIT
IndoAgri has a comprehensive Enterprise Risk Management
(ERM) framework that enables the Group to maintain vigilance
and oversight of all its operating and functional units. The
ERM framework comprises a set of systematic, integrated
and coordinated risk management strategies. The framework
is executed by the ERM Unit, which reports to the Executive
Committee and an independent Audit Committee. Supported by
the Board and senior management of IndoAgri, the ERM Unit
ensures the timely and accurate identification, assessment,
mitigation, reporting and monitoring of risks that can adversely
impact IndoAgri’s ability to achieve its business objectives.
Additionally, we have implemented a Code of Conduct along
with policies and mechanisms for whistle blowing.
As there are various risk issues common to ERM and
sustainability management, the Head of the ERM Unit also
reports on the effectiveness of sustainability strategies and
risk compliance. The respective risk owners and business
unit managers conduct quarterly assessment of current and
emerging risks and prepare the risk assessment reports. All
key material issues are integrated under the ERM framework.
The ERM Unit analyses the risk assessment reports, reviews
the ERM strategy, and proposes an action plan to address
specific issues. The risk assessment reports are then shared
with the internal audit team, who validates the findings and
actions taken. Mitigating environmental pollution through
measures for fire and haze prevention is a new area being
championed by the ERM Unit in 2014. Details on our policies
and monitoring mechanisms can be found on page 47.
SUSTAINABILITY TEAM STRUCTURE
IndoAgri’s sustainability initiatives are championed by the
Sustainability Team. The Sustainability Team works with the
R&D team to improve agronomic practices and HCV area
development. The ERM Unit supports the team in matters
relating to policy development, strategy formulation and
issues resolution.
The Sustainability Team reports to the CEO and Sustainability
Think Tank, comprising the Board members of the Group and
its principal subsidiaries. The Sustainability Think Tank meets
regularly to review the progress and direction of the Group’s
sustainability management efforts.
Operational managers of the estates and mills are expected to
achieve the KPIs set out by the Board and senior management
based on the Group’s sustainability commitments. They are
guided by the Sustainability Team on the implementation of
activities to gain and maintain the Group’s certification status
by RSPO, ISPO, ISO and PROPER.
To lend greater focus to the different geographic areas, the
Sustainability Team is sub
-
divided into regional teams, who
report directly to the Group’s Sustainability Coordinator in
Jakarta. The regional teams consist of people with expertise
in HCV, environment, and health and safety. Community and
smallholder programmes are implemented by Solidarity and
Community Development Officers in close coordination with
operational teams.
In the refineries, a Sustainability Coordinator works closely
with the factory managers to support and monitor the
implementation of sustainability, environment and OHS
compliance, policies and systems.
MONITORING AND EVALUATION
In 2014, IndoAgri invested in an SMIS, which utilises real
-
time
data primarily from our SAP system. The SMIS allows us to
track the Group’s progress against its sustainability targets.
The data coordinator is responsible for the management of the
system and the generation of reports. Through a dashboard
application on the SMIS, the Group’s sustainability progress
and performance can now be viewed online. Complementing
this effort, the Group has introduced a scorecard to measure
the level of RSPO, ISPO, and PROPER readiness at our
operations. Monthly results and process refinements are tabled
for discussion during the operational meetings in Jakarta, and
solutions are approved by the Board members of the Group
and its main subsidiaries.
