CITIZEN A CORPORATE - SUSTAINABILITY REPORT 2012 - Halcyon Agri
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
SUSTAINABILITY REPORT 2012
A CORPORATE
CITIZEN
Contents Corporate Profile
2. Chairman’s Message At Halcyon Agri, we operate
4. Our Business in Brief in the midstream of the Our headquarters, risk management,
Natural Rubber supply chain, merchandising and marketing
- Our Products operations are located in Singapore.
specialising in the processing
- Our Customers and merchandising/marketing
- Awards of processed Natural Rubber. We own and operate two long
established Natural Rubber
6. About This Report processing facilities located in
The Group produces
8. Stakeholders and Materiality Technically Specified Rubber Palembang, South Sumatra,
9. Customers (“TSR”) of Indonesian origin to Indonesia, which is the largest
a range of specifications (e.g. Natural Rubber exporting province in
- Engagement Process
SIR20, SIR20-VK, SIR20- Indonesia.
- Product Quality and Security Compound and SIR10), which
10. Environment is used as an essential input Our products are sold to a global
to the manufacture of vehicle customer base, including many of the
- Our Production
tyres. top 20 global tyre manufacturers.
- Energy Consumption
- Water Consumption
- Environmental Compliance
- Effluents
- Emissions Industry Background
- Waste
- Upstream Environmental Impacts The Natural Rubber industry is a US$33 billion per annum business,
making it the second largest tropical crop after oil palm.
14. Employees
- Background The global tyre manufacturing industry, for which Natural Rubber is an
- Staff Engagement essential input, is the largest consumer, accounting for approximately
- Health and Safety 70% of the global consumption of Natural Rubber.
16. Partnerships Demand for tyres and therefore the demand for Natural Rubber is mostly
- Contributions driven by the global vehicle population, which currently exceeds 1 billion
- Memberships units. Emerging markets such as China are driving the growth in the
vehicle population.
18. Global Reporting Initiative (G3.1)
Content Index Despite decades of research, no synthetic substitute has been
22. GRI Application Level Check found which fully mimics the properties of Natural Rubber and higher
Statement proportions of Natural Rubber in tyres is linked to premium high
performance finished products.
Rubber trees, Hevea Brasiliensis, from which Natural Rubber is sourced,
grow well only within 10 to 15 degrees of the equator. Indonesia is the
second largest rubber producing country in the world, accounting for
27% of global production. Palembang is the largest Natural Rubber
exporting port in Indonesia, accounting for approximately one-third of
total Indonesian Natural Rubber exports.
The Company was listed on Catalist of the Singapore Exchange Securities Trading Limited (the “SGX-ST") on 1 February 2013. The initial public offering of the
Company was sponsored by PrimePartners Corporate Finance Pte. Ltd. (the “Sponsor").
This sustainability report has been prepared by the Company and its contents have been reviewed by the Sponsor for compliance with the relevant rules of the SGX-
ST. The Sponsor has not independently verified the contents of this sustainability report.
This sustainability report has not been examined or approved by the SGX-ST and the SGX-ST assumes no responsibility for the contents of this sustainability report,
including the correctness of any of the statements or opinions made or reports contained in this sustainability report.
The contact person for the Sponsor is Mr Mark Liew, Managing Director, Corporate Finance, at 20 Cecil Street, #21-02 Equity Plaza, Singapore 049705, telephone
(65) 6229 8088.
MANAGING FOR THE LONG RUN
Chairman’s Message
Sustainability Makes Business Initiative’s 3.1 Reporting Guidelines as
Sense well as the SGX Guide to Sustainability
Reporting for Listed Companies.
Vision: To be a leading natural rubber
producer in terms of quality of product, In our Group Annual Report for 2012, I
sustainability, and profitability. made it clear that we believe a sustainable
business makes for sustainable profits.
It is wonderful to have a vision but it’s Developing and implementing the
even better to put into practice what we best practices in corporate social
believe in; to measure and to manage our responsibility and sustainability make
progress, and to show we are making perfectly good business sense.
significant improvements in the way we
conduct our business as we travel on the Of course, we have a commitment to
very important sustainability journey. wider environmental and societal issues,
like working to prevent pollution and
This is our first sustainability report, conserve natural resources, as well as to
and I’m pleased to say that it not only ensure we are reducing our own impact
spells out how far we have come, but on the environment.
it demonstrates our commitment to
change and progress, benchmarked We also believe our people and our
against internationally accepted stakeholders are essential partners in
sustainability guidelines. Our reporting our sustainability progression.
is aligned with the principles and
framework of the Global Reporting
02 Halcyon Agri Corporation Limited Sustainability Report 2012
Sustainability goes beyond environmental Our processing facilities are already and working closely with organisations
factors to the way we look after our own ISO9001 certified, but we want to, we like the Rubber Association of Indonesia
people and our involvement in the local need to, raise our operating standards (GAPKINDO), the International Rubber
and wider community. I am pleased to see even more by aiming to achieve Study Group and the Singapore Chinese
that we have adopted some very positive ISO14001, the international benchmark Chamber Rubber Association to explore
measures in terms of staff welfare, health for environmental management. and initiate collective action on ensuring
and safety. We continue to contribute to that sustainability has an important place
community development initiatives and We also need to be conscious of, and in the natural rubber business as it does
local infrastructure improvements. committed to, improving our upstream for us.
stakeholder engagement. Even if contact
We have set six strategic priorities in to date with rubber farmers has been But with greater growth and increased
terms of social and environmental factors limited, we need to recognise our ability size comes added responsibility. The
impacting our industry and our business. to play an influential role in advocating overall vision and strategy for our
They compromise: Staff welfare, Staff sustainability issues. company over the short, medium and
health and safety, Adherence to customer long term is to effectively manage key
requirements and quality standards, We have made some efforts, such as challenges in the industry and to address
Production efficiency, Environmental providing rest areas and refreshments all social and environmental impacts
compliance, and Good housekeeping. for our rubber raw material suppliers. I while sustaining economic growth.
am pleased to see that, moving forward,
A critical component of these strategic we plan to expand these areas and use We are as committed to sustainability
priorities is stakeholder engagement and them as venues for communication and as we are to being an industry leader
how we treat and factor in our partners. obtaining feedback. We also intend to in productivity and profitability. We look
engage our upstream stakeholders to forward to continuing on the sustainability
We need to take into account that identify social and environmental issues journey in partnership with our people
our international customers are and understand how best to address and all our stakeholders.
increasingly demanding responsibly- them. This is best done through a
managed supply chains. That provides combination of individual and collective Reporting on sustainability is one
additional pressure on us as a supplier, effort through industry memberships. important step. We are ready to take
but it also reinforces our commitment the next step to implement actions
to do things right by the environment We can also be a power for good in to show that we mean business and
and society, to be more productive and the wider rubber industry as well as the to demonstrate that sustainability is a
sustainable in our operations. community at large. We are engaged business imperative.
Robert Meyer
Executive Chairman and CEO
Halcyon Agri
Halcyon Agri Corporation Limited Sustainability Report 2012 03
Our Business in Brief
Figure 1. Halcyon Agri Corporation Limited group structure and business units.
(as of 31 December 2012)
Halcyon Agri
Corporation
100% 100% 100%
Hevea Global Halcyon Plantations Hevea Processing
95%
PT Hevea MK
Halcyon Agri Corporation Limited (‘HAC’ or ‘Group’) is an integrated producer and
merchandiser of Standard Indonesian Rubber (SIR), a grade of technically specified
natural rubber essential in the manufacture of vehicle tyres. Headquartered in
Singapore, we are amongst the largest exporters of natural rubber in South Sumatra,
Indonesia. Together with a network of other processors, our rubber processing
facilities support the single largest rubber exporting port in Indonesia – Boom Baru
Port in Palembang.
Our business model operates in the midstream of the natural rubber supply chain
where we supply rubber raw material for tyre companies through sourcing and
processing rubber slabs from a range of local suppliers mainly from South Sumatra,
Indonesia.
HAC is structured into three main business units covering Singapore and Indonesia.
In Singapore, we have Hevea Global Pte Ltd, Hevea Processing Pte Ltd and Halcyon
Plantations Pte Ltd (See Figure 1). Hevea Global Pte Ltd purchases rubber raw
material from suppliers, handles risk management for the Group, and undertakes
sales and marketing activities with customers. Hevea Processing Pte Ltd, through its
subsidiary PT Hevea MK in Indonesia, is responsible for processing purchased raw
material into various rubber specifications and exporting services for and on behalf
of Hevea Global Pte Ltd. PT Hevea MK operates two natural rubber processing
facilities, which are located along the banks of Musi River in Palembang, Indonesia.
These facilities, called HMK1 and HMK2 have been in operation for 50 years and 30
years respectively. Halcyon Plantations Pte Ltd will seek opportunities to invest in
upstream opportunities, with the purpose of supporting our factories with high-quality
raw material.
Our Products
Our natural rubber products consist of five main SIR specifications: SIR20, SIR20—
Compound, SIR10-VK, SIR20-VK and SIR10. We have particular expertise in the
production of SIR20-VK.
04 Halcyon Agri Corporation Limited Sustainability Report 2012
SIR20 rubber is a medium grade rubber To be a supplier to international tyre
used mainly in the manufacture of car manufacturers and international trading
and truck tyres and, to a lesser extent, in houses, we are subjected to strict
certain engineering applications. SIR20- qualification assessments that can take
Compound rubber is a versatile grade of up to 12 months depending on the range
rubber with the ability to be processed of tests and on site inspections required
into various specifications based on by individual tyre manufacturers.
customer requirements. This grade is
mostly sought after by various industries We are proud to be approved suppliers
in China. to the following international tyre
manufacturers:
SIR20-VK rubber is best suited to
engineering or tyre applications involving
more complex designs or processes. 1. Bridgestone,
SIR20-VK is particularly sought after in 2. Ceat India,
tyre manufacturing because its technical 3. Continental,
properties allow our customers to 4. Cooper Tire,
achieve energy savings as a result of 5. Goodyear,
reduced mastication in their production 6. JK Tyre India,
process, as well as greater throughput 7. Kumho,
compared to normal grade rubber. As a 8. Sumitomo Tyre, and
result, a significantly greater number of 9. Toyo Tires.
tyres can be produced at our customers’ Awards
facilities compared to the same volume
of normal grade rubber. The Singapore Commodity Exchange In 2012, Halcyon Agri Corporation
(SICOM) also approves our products for Limited was conferred as a Singapore
Our Customers delivery. 1000 Company by DP Information
Group, a veteran ranking body and
Our Group generally aims to sell our publisher in Singapore. To achieve such
products to the tyre manufacturing status, companies must demonstrate
industry, particularly those with a specific strong financial performance and
requirement for SIR20-VK rubber. good corporate governance through
transparency and accountability. We are
honoured to have received this award.
Moving forward, we shall maintain our
focus in becoming the leader in natural
rubber production through financial
excellence, production quality and
responsible practices.
Halcyon Agri Corporation Limited Sustainability Report 2012 05
About this Report HAC commenced operations in April 2010 and completed acquisitions of two key rubber processing facilities in Indonesia (HMK1 and HMK2) and related assets in February 2011. Despite a relatively short history, our HMK1 and HMK2 processing facilities are well established having been operating since the 1960s and 1980s respectively. Moreover, we have successfully retained senior executives responsible for operating the facilities in Indonesia. This provided the necessary continuity in delivering products to our international customers. We have prepared this sustainability report to present key material issues faced by our business. As Halcyon Agri Corporation Limited’s first sustainability report, we report on our performance for the period 1 January 2012 to 31 December 2012 and provide historical data where available from 2011 when we formally took over operations in HMK1 and HMK2. This 2012 Sustainability Report covers our entire operations in Singapore and Indonesia. These include Hevea Global Pte Ltd, Halcyon Plantations Pte Ltd, and Hevea Processing Pte Ltd and its subsidiary, PT Hevea MK that runs and operates HMK1 and HMK2 in Indonesia. As of 31 December 2012, there have been no acquisitions made by Halcyon Plantations Pte Ltd. For any acquisitions in future, we will endeavour to include key material issues arising from the ownership and management of rubber plantations in its sustainability performance. We have prepared our report using the Global Reporting Initiative (‘GRI’) version 3.1 reporting guidelines at Application Level C. Moving forward, we intend to report on our sustainability performance annually through various forms of media. This approach provides us confidence in reaching out to our stakeholders through their preferred means of communication. Your feedback is most welcome. We invite you to read this report and provide your insights at enquiry@halcyonagri.com. 06 Halcyon Agri Corporation Limited Sustainability Report 2012
ENSURING SUSTAINABILITY
Stakeholders and Materiality
the Rubber Association of Indonesia For regulators both in Singapore and
known as GAPKINDO. GAPKINDO aims Indonesia, we aim to comply with all
to develop and improve production, applicable legal requirements involving
processing and marketing of Indonesian our business operations.
natural rubber as one of the most
important export commodities of Local suppliers are primarily those
the country. In practice, GAPKINDO entities/persons delivering rubber slabs
supports activities to improve to our processing facilities. These can
environmental performance and raise either be smallholder farmers themselves
labour standards for the rubber industry. or agents who act as aggregators of
Our Head of Production, Mr Alex Edy rubber slabs sourced from various
has served on the GAPKINDO board for rubber plantations across South
many years. Since 1996, he has been the Sumatra, Indonesia. Our dealings with
Chairman of the South Sumatra Office this group have historically been based
of GAPKINDO and a Vice Chairman for on purchasing rubber slabs based
Organization of GAPKINDO’s central at prevailing market prices. Moving
office based in Jakarta, Indonesia. We forward, we aim to work closely with
value our membership in GAPKINDO our local suppliers to build long-term
and will continue to support its aims partnerships beyond transactions at our
moving forward. processing facilities.
Our employees are our most important Table 1 provides a summary of various
An important starting point in our asset. We aim to attract and maintain top engagement activities conducted with
sustainability journey is to identify talent through provision of competitive our stakeholders.
our stakeholders and material issues remuneration and benefits as well as
relevant to our business. To address protection of their health and safety.
this, we conducted a sustainability
assessment in mid-2011 with the help of Table 1. Stakeholder groups and engagement activities.
an external consultant (Paia Consulting).
With guidance from AA1000APS (2008) Stakeholder Engagement Activities
principles and engagement framework Group
from AA1000SES (2011), we have Customers • Sales presentations (On-going)
defined our key stakeholders into six • Pre-contract on site inspections (On-going)
main groups: • Shipment delivery meetings (On-going)
• Customers, Competitors • Networking events (On-going)
• Competitors, • Visits to our factories for benchmarking (On-going)
• Industry Associations, Industry • GAPKINDO Board Meetings
• Employees, Associations • Annual attendance to address country-level
• Regulators, and agendas such as national environmental legislation
• Local Suppliers • Quarterly attendance to address local agendas (i.e.
Palembang-specific)
Our customers include tyre • Ad hoc meetings to address specific issues from
manufacturing companies and trading stakeholder feedback
houses. Our aim is to ensure consistent Employees • Board - Senior Management meetings (Quarterly)
compliance and responsiveness to • Senior Management – Line Management meetings
industry requirements. (Monthly)
• Line management – Staff meetings
Our competitors include local and • Production planning (Daily)
international players also offering various • Production performance reviews (Monthly)
SIR rubber grades including SIR20-VK.
Regulators • Regulations briefing (as needed)
Occasionally, we conduct benchmarking
• Environmental compliance reporting (monthly reporting
activities to enhance operating standards
and visits by public officials for random checks)
and production efficiency.
Local Suppliers • Rubber raw material quality checks and sales transactions
The industry association that has been at our factories (Daily)
most influential to our operations is • Provision of rest area and light refreshments for delivery
drivers at our factories (Daily)
08 Halcyon Agri Corporation Limited Sustainability Report 2012Following the identification of
stakeholders, we also identified key
material issues that are strategic to our
business success. These six strategic
priorities are identified below as follows:
• Staff welfare
• Staff health and safety
• Adherence to customer
requirements and quality standards
• Production efficiency
• Environmental compliance
• Good housekeeping
In early 2013, we conducted a
management workshop to review our
stakeholder and materiality assessment.
The aim was to ensure inclusivity in
mapping stakeholders and to ensure
completeness and continued relevance
of our identified key material issues.
teams per processing facility, and (ii) Product Quality and Security
Results of this workshop have influenced
Distribution of personal protective
future plans and commitments.
equipment (PPE) for staff use on the A key strength our processing facilities
production floor. have is ensuring that the quality of our
Customers
rubber raw materials meets customer
A year-end review with our on site specifications. To achieve this, we
We engage our customers regularly to
management teams revealed these maintain ISO9001 management system
obtain essential feedback on how we
initiatives to be a considerable certification at each facility since 2008.
can best meet their supply requirements.
improvement compared to previous The system enables us to identify and
years. However, our review also revealed address any quality gaps that would
Engagement Process further areas for improvement. For otherwise prevent us from delivering the
example, levels of cleanliness and order required specifications to our customers
Contract arrangements mainly begin
have been subjective due to differing on time. To date, we have not had any
from supply discussions with the
standards from person to person. To significant incidents reported by our
respective procurement directors or top
address this, we have set ourselves customers involving rejected finished
management. As talks progress, our
a benchmark for good housekeeping goods.
customers ask to visit our processing
for implementation starting 2013. Our
facilities with their technical teams for
benchmark is largely based on best
the purpose of verifying our quality,
practice observed from peers and On a related note, our Group embarked
health and safety and other operating
industry. on complying with the Customs-Trade
standards. For each engagement,
Partnership Against Terrorism (C-TPAT)
customers provide us feedback to help
On health and safety, we recognise that requirement for our customers operating
us conform to their standards and at the
distribution of PPE is not enough in in the United States of America. We
same time, improve our practices. We
mitigating or eliminating risks to our staff consider compliance to the U.S.
conduct this cycle of engagement per
especially on the production floor. We Customs and Border Protection (CBP)
customer. We have at least one such
believe a management system approach as critical to continuing our business
engagement every quarter.
is necessary to progressively address with North American customers. Our
risks. As a result, we have set ourselves aim is to comply with this requirement
One consistent observation we received
a goal of achieving OHSAS18001 by 2013 by addressing security risks in
from customers is to improve our
certification by 2013. our supply chain. We have successfully
housekeeping activities and health and
conducted a supply chain security risk
safety controls. As an ongoing process
Our customers have welcomed these assessment in January 2013 and are
since 2011, we have addressed these
initiatives to date. Since 2011, we have currently addressing observations and
concerns by implementing the following
not had a customer remove us from their recommendations to comply with the
activities: (i) Setting up of housekeeping
approved supplier list. C-TPAT requirement.
Halcyon Agri Corporation Limited Sustainability Report 2012 09Environment
Wet process
Raw materials Rubber slabs Rubber pieces Rubber pieces Shredder Cleaned rubber Wet blankets
in form of are broken into are moved shredded rubber processed into folded,
rubber slabs smaller pieces through 3 in the passed into “wet blankets” weighed and
(made from using a rubber blending tanks hammermill blending tanks through tested for dirt,
cup lumps) breaker and cleaned machine into 5 for further creeper ash and initial
with water cm cubes cleaning machines plasticity
Dry process
Visual quality Crumb rubber Crumb rubber Crumb rubber Dry Shredded Dried blankets Wet blankets
check and passed passed passed rubber passed are shredded in hung to dry in
weight check through through a through a into blending the hammermill a drying room
performed palletiser/dry series of dryers vacuum pump tanks for machine for 10-14 days
pre-breaker to remove cleaning (making“crumb
and cooled excess water rubber”)
Figure 2. Illustration of wet and
dry process in the production of
SIR grade rubber slabs.
Sample Metal detector Final weigh Each pallet Sealed packets
taken and a test of each test to confirm of rubber are packed
range of tests rubber bale the weight per individually according
performed to rubber bale is sealed to customer
verify quality 35 kg specifications
for export
Halcyon Agri Corporation Limited is Table 2. Utilisation rates in 2011 and 2012. daily basis. Thus, we are reliant on our
committed to preventing pollution diesel-powered generators to power our
Reporting Production Utilisation
and conserving Indonesia’s natural lighting requirements and production
Year Volume Rate (%)
resources. lines. Diesel is also used as a secondary
(tonnes)
fuel source for producing heat at the dry
Our Production 2011 45,286 55% process.
2012 67,317 73%
We process rubber slabs into various The increase in our rubber production in
Standard Indonesian Rubber (SIR) Energy Consumption 2012 has contributed to an increase in
grades through a two-step wet and our total energy consumption from 2011.
dry process. One process cycle takes Our processing facilities use coal and To decouple this trend, we recognise the
approximately two weeks. diesel as direct energy sources. We use need to take action on increasing our
coal to fuel our boilers. Boilers produce energy efficiency and reducing reliance
Our total gazetted production capacity heat to remove moisture from rubber on fossil fuel-based energy sources.
is over 100,000 tonnes per annum. during the dry process. Diesel is used
Factors influencing this capacity include to generate electricity during times when On energy efficiency, our production
the number of wet and dry production there are power outages. facilities upgraded its boilers in 2009
lines installed, the number of shifts, and for HMK1 and 2007 for HMK2 to
necessary downtime for equipment Palembang electricity utilities are unable take advantage of higher combustion
maintenance. We operate three eight- to provide uninterrupted electricity on a efficiencies from more modern boiler
hour shifts per day with our two
Figure 3. Group energy consumption and production for 2011 and 2012.
production facilities operating six days in
a week.
Energy Consumption (GJ)
190,000
Production (metric tonnes)
75,000
181,077
In 2012, we have successfully increased 180,000
70,000
utilisation rates compared to 2011. 170,000
Apart from increased rubber demand, 67,317 75,000
the increase was also a result of 160,000
process optimisation initiatives led 150,000 65,000
by our engineers and supervisors.
140,000 60,000
Their initiatives helped reduce critical
equipment downtime such as hammer 130,000
mills by improving maintenance 55,000
120,000
schedules. As a result, we not only 111,061 50,000
optimised our production lines but also 110,000
avoided spending significant capital on 45,286
100,000 45,000
upgrading activities. 2011 2012
Year
Total Energy Consumption Total Rubber Production
10 Halcyon Agri Corporation Limited Sustainability Report 2012designs. Also, both our boilers and diesel Figure 4. Relative contributions of energy sources to annual energy consumption.
generators are maintained periodically
by our engineers to ensure optimum
operating efficiencies.
36,102 74,499
48,580 29%
On energy consumption, the majority of 32%
44% 126,839
our energy requirements were sourced
50%
from coal in 2011 and 2012. This is
consistent with our rubber processing
energy requirements where coal is the
main fuel for producing heat at our dry
process. 2011 2012
We welcome the use of alternative non-
fossil fuel sources. One option explored
is the use of biomass to substitute for
coal. However, in terms of market price 53,910
and abundance, locally sourced coal 26,379 21%
outperforms alternatives. Nevertheless, 24%
we remain committed to finding ways to
reduce our dependence on fossil-based
fuels over the long term.
Electricity (GJ) Diesel (GJ) Coal (GJ)
Water Consumption We are committed to using water Environmental Compliance
efficiently as possible. To reduce water
Operating both along the banks of consumption, asking our suppliers to Effluents
Musi River, both HMK1 and HMK2 use reduce impurities can be helpful. However,
the river as its primary source of water this proves to be an unfavourable solution HMK1 and HMK2 are governed by strict
for production. Through pumps, water as competition can drive our suppliers local effluent standards governing the
is directed from the river to our wet to sell to other processing facilities Musi River. In compliance to local water
processing lines to remove impurities without such requirements. As a result, regulations, we report our water quality
from rubber slabs. These impurities are we may lose the required raw material results to authorities on a monthly basis.
mainly inert such as soil particles and for our production. More importantly, Results of our water discharges are
bits of plastic waste and organics such the environmental burden of cleaning is expressed using four key parameters:
as wood chips. simply shifted from our operations to our Biological Oxygen Demand (BOD),
upstream stakeholders. Chemical Oxygen Demand (COD),
Our water consumption increased in Total Suspended Solids (TSS) and Total
2012 in line with the increased rubber Moving forward, we shall focus water Nitrogen (N-Total). To date, we have
production at both processing facilities. conservation efforts through water successfully maintained compliance to
reuse and efficient use for housekeeping local water regulations with discharge
activities. levels performing within set limits. Our
performance per processing facility since
2011 is reported in the figures following.
Figure 5. Total annual water withdrawals from Musi River.
Figure 6. Biological Oxygen Demand (BOD)
Production (metric tonnes)
1,300,000 75,000 performance of HAC.
1,250,000 1,262,109
Water Withdrawals
70,000
67,317 60.0
(cubic meters)
1,200,000
65,000
1,150,000 50.0
1,100,000 60,000
BOD (mg/L)
40.0
1,050,000 55,000 30.0 21.6
1,000,000 50,000 20.0 14.7
1,014,784
950,000 10.0 18.7 19.6
23.7
45,286 45,000 10.8
900,000
-
2011 2012 2011 2012
Total Water Withdrawals Total Rubber Production HMK 1 HMK 2
from Musi River HAC Average BOD Limit: 60 mg/L
Halcyon Agri Corporation Limited Sustainability Report 2012 11Environment
Figure 7. Chemical Oxygen Demand (COD) Figure 8. Total Suspended Solids (TSS) Figure 9. Total Nitrogen (N-Total) performance
performance of HAC. performance of HAC. of HAC.
5.0
100.0
200.0
4.0
800.0
N-Total (mg/L)
150.0
COD (mg/L)
TSS (mg/L)
60.0 3.0
100.0 49.7 1.6
40.0 2.0 1.5
43.3 19.0 21.7
50.0 20.0 .0 1.6
25.2 1.5 1.7
67.2 1.4
48.0 38.6 32.3 18.4 19.7 18.2
- - -
2011 2012 2011 2012 2011 2012
HMK 1 HMK 2 HMK 1 HMK 2 HMK 1 HMK 2
HAC Average COD Limit: 200 mg/L HAC Average TSS Limit: 100 mg/L HAC Average N-Limit: 5 mg/L
Emissions we will ensure our boilers and generating Our Group considers this as a great
units are properly maintained for optimal opportunity for economic growth but
Our boilers, diesel generators levels of operation. we also realize the potential associated
and scrubbers are tested by local environmental impacts upstream of our
government representatives every Waste operations.
six months to check for compliance
against emissions regulations. These Our processing facilities generate both We are aware that smallholder farmers
include tests detecting particulate hazardous and non-hazardous types of generally own rubber plantations where
concentrations, opacity and dioxides of waste based on Indonesian regulatory we source rubber slabs. These farmers
sulphur and nitrogen levels. For 2011 definitions. Our hazardous wastes are design their rubber plantations based on
and 2012, we are pleased to report full generated primarily from used oil and mono crops of rubber trees at the centre
compliance to emissions standards at lubricants from equipment maintenance of the agricultural land followed by a mix
both HMK1 and HMK2. activities. We send these to licensed of forest vegetation and rubber trees
waste treatment collectors. For our (known as “jungle rubber”) and in some
Figure 10. Direct and indirect greenhouse gas non-hazardous waste, these mainly cases, other agricultural crops at the
emissions of HAC.
come from waste rubber residue from fringes of the plantation. As demand for
20,000.0
16,965.3
processing. We ensure approved waste Natural Rubber increases, we perceive
Greenhouse Gas Emissions
collectors dispose of these properly. We a threat to biodiversity arising from the
(tonnes of C02 equivalent)
16,000.0
are pleased to report full compliance to expansion of these rubber plantations to
12,818.8
local waste management regulations for meet global demand.
12,000.0
10,820.2 2011 and 2012.
8,000.0
7,478.1 To address this threat, we recognise
Environmental compliance is a key the need to build relationships with
4,000.0 operational requirement for our our upstream stakeholders beyond
6,145.1
5,340.7 processing facilities. To strengthen transactions at our facilities. To date,
- governance in this area, we aim to be our interactions have focused mainly on
2011 2012 certified ISO 14001:2004 in 2013. We price of rubber raw material and quality
Indirect Emissions Direct Emissions believe achieving this recognition will based on dry rubber content. If the
not only help us manage our facilities rubber material is offered at acceptable
In terms of greenhouse gas emissions, systematically but will also result in our market rates and within acceptable
we experienced an increase in total customers’ greater confidence in our quality limits, we accept the supply.
greenhouse gas emissions from environmental management practices.
12,818.8 tonnes CO2e in 2011 to As our next step, we aim to learn more
16,965.3 tonnes CO2e in 2012. Both Upstream Environmental about the issues faced by our upstream
direct and indirect emissions contributed Impacts stakeholders as a way to build trust and
to this result. This is attributed to the long term relationships with them. To
increase in rubber production in 2012 According to the International Rubber start, we aim to capitalise on the use of
along with our fuel mix mainly comprised Study Group’s World Rubber Industry our facility rest areas provided to local
of fossil fuels. We shall endeavour to Outlook (June 2012), world production of suppliers as a venue for engagement
reduce our carbon emissions over Natural Rubber is projected to increase and feedback.
the long term by exploring alternative from 11.0 million tonnes in 2011 to 16.8
sources. In the short and medium term, million tonnes by 2021.
12 Halcyon Agri Corporation Limited Sustainability Report 2012DEVELOPING LIVES
Employees
Background
Our Group is committed to hire staff
based on merit without discrimination
to race, gender, religion or ethnicity. We
strictly prohibit hiring underage staff in
all our offices and processing facilities.
We give preference to local talent in
hiring our employees in Indonesia
and Singapore. We are committed to
providing competitive remuneration
and benefits to our employees. We are
also committed to safeguarding our
employees’ health and safety against
workplace hazards.
In terms of staff demographic,
approximately 98% of HAC staff are
based in Indonesia with all staff members
offered full time employment contracts.
Figure 11. HAC total staff headcount . Table 3. Gender distribution across Singapore and Indonesia
(as of 31 December 2011/2012 )
2011 2012
7 Location Male Female Male Female
Singapore 4 3 3 3
Indonesia 572 23 567 24
2011 All our staff members in Singapore legislated minimum for Palembang,
and Indonesia are employed under Indonesia. Moreover, we provide 100%
permanent terms with none employed medical insurance coverage for our
on fixed term basis. employees while their dependents are
given 50% coverage. The company also
595 In terms of gender distribution, males provides all employees life insurance,
were mainly observed to hold positions pension and gratuity benefits based on
6 in maintenance and operations that form years of service in line with local labour
the most labour-intensive component of regulations, for all employees.
our production. Females, on the other
hand, were observed to take office or On retirement, we provide retirement
laboratory positions. plans to our staff that are at least 60
years of age with 10 years of service or
2012 Since 2011, staff turnover has been a more in line with our labour agreement.
non-issue with a rate of less than 1% Retirement plans are discussed and
of total headcount per annum. Our staff agreed in collaboration with our labour
members in Indonesia have an average unions.
of ten years of service across both
591 processing facilities. We attribute this In terms of housing benefits,
stability to remuneration and benefits approximately half of our employee
package maintained on our takeover headcount in Indonesia are provided
Singapore (Halcyon Agri and subsequently enhanced for our staff. housing for their families. Housing
and Hevea Global) facilities are located within a 5-minute
We follow Indonesian wage regulations walk from the processing facilities. These
in remunerating our staff in Indonesia. housing facilities are provided with both
Indonesia (PT Hevea MK) We provide wages that are at least the electricity and non-potable water use
14 Halcyon Agri Corporation Limited Sustainability Report 2012Figure 12. Lost Time Incident Rate (LTIR) at
coming from generator units and water a performance and operations review production sites (HMK1 and HMK2)
treatment plants in HMK1 and HMK2 with senior staff in HMK1 and HMK2. Our
respectively. For staff members who do monthly interactions helped us recognise 0.50
not make use of our housing facility, they the need for greater face-to-face
are provided with a housing allowance. interactions with our staff on the ground.
0.40
These interactions are intended to build
In addition to these benefits, we have trust and facilitate potential change
full respect for the religious practices of management initiatives necessary to 0.30
our staff. As such, we maintain places of maintain our competitiveness. Moving
worship near our processing facilities to forward, we aim to implement structured 0.20
cater to our Muslim and Christian staff. communication programs between 0.40
management and staff for more effective 0.10 0.32
Moving forward, we will continue to two-way engagement.
support the families of our employees by
0
building community recreation facilities Health and Safety 2011 2012
and maintaining the upkeep of their
Lost Time Incident Rate
homes and places of worship. In Indonesia, our Lost Time Incident Rate (per 200,000 working hours)
(LTIR) was 0.40 per 200,000 working
In Singapore, the Ministry of Manpower hours in 2011. The rate lowered to 0.32
and other supporting agencies set the in 2012. Thankfully, all reported work possible long-term health effects from
framework, policies and rules governing incidents have been minor and non-fatal hazards such as noise.
our workforce, which we abide by. There resulting in zero man days lost to serious
are no regulations on minimum wage accidents. Absentee rates across To strengthen our governance over
in the country. The National Wages our total workforce have remained health and safety issues at our
Council, comprising representatives insignificant with an average of 0.003% processing facilities, we aim to achieve
from trade unions, government and absences in 2011 and 2012. OHSAS 18001:2007 in 2013.
employers formulate wage guidelines to
ensure the country’s stability and long- To date, we engage the services of a In Singapore, all workplaces are covered
term economic growth. medical practitioner to cater to staff under the Workplace Safety and
requiring consultation or medical advice. Health Act (WSHA). WSHA requires all
Staff Engagement Although we promote this through their employers to report incidents dutifully
medical coverage, we currently do not to the Ministry of Manpower as part of
We conduct monthly face-to-face have mandatory health screening to their obligations. Fortunately, we have no
meetings between representatives from monitor staff health and detect potential health and safety incidents reportable to
our top management and the processing occupational disease. We will endeavour the Ministry of Manpower in 2011 and
facility staff. The monthly agenda covers to implement this in future recognising 2012.
Halcyon Agri Corporation Limited Sustainability Report 2012 15Partnerships
Contributions In 2012, as part of a community Indonesia. Since 2011, he has promoted
enrichment activity, our top management housekeeping and hygienic processing
Indonesian law requires all public were actively involved in training up a good practice among association
corporations to contribute a percentage youth soccer team comprising children members.
of their revenue to corporate social of our employees in Palembang. The
responsibility (CSR) initiatives. Private team visited Singapore in June 2012 Moving forward, we aim to establish
corporations are not required but to participate in the 4th Singapore networks and memberships in 2013
are encouraged by the Indonesian Cricket Club Soccer 6s Charity Youth with industry associations such as the
government. We have contributed Tournament, in which they finished International Rubber Study Group and
monetarily to the local government, in third place and clinched the best the Singapore Chinese Chamber of
for CSR initiatives, since assuming newcomer award. We are pleased that Commerce Rubber Association. Working
ownership of the processing facilities the young HMK team have gone on to closely with these organisations provides
in February 2011. Amounting to participate and excel in further match avenues to discuss and seek collective
approximately 3 to 5 million Indonesian engagements in Indonesia. action on ensuring sustainability in the
Rupiah per month, the local government natural rubber industry.
channels these funds to various Memberships
community development initiatives and
infrastructure improvements. Our Group plays an active role in
the Rubber Association of Indonesia
The Indonesian regulation also provides (GAPKINDO). As an industry body, we
the flexibility to corporations to spend the support GAPKINDO’s aims of making
contributed amount themselves as long Natural Rubber processing a premier
as these are for CSR purposes. Moving industry in Indonesia. Our membership
forward, we aim to play a more active began in 2011 with our Head of
role in allocating these funds directly to Production serving a leadership role as
social causes in partnership with relevant coordinator between GAPKINDO South
Indonesian government agencies. Sumatra and its national office in Jakarta,
16 Halcyon Agri Corporation Limited Sustainability Report 2012Global Reporting Initiative (G3.1) Index
Halcyon Agri Corporation Limited Sustainability Report 2012 17Global Reporting Initiative (G3.1) Index
PROFILE DISCLOSURES
1. Strategy and Analysis
Profile Description Reported Page
Disclosure
1.1 Statement from the most senior decision-maker of the Fully 2-3
organisation
2. Organisational Profile
Profile Description Reported Page
Disclosure
2.1 Name of the organisation. Fully Halcyon Agri Corporation Ltd.
2.2 Primary brands, products, and/or services. Fully 4-5
2.3 Operational structure of the organisation, including main Fully 4
divisions, operating companies, subsidiaries, and joint
ventures.
2.4 Location of organisation's headquarters. Fully 250 North Bridge Road #12-01
Raffles City Tower Singapore
179101
2.5 Number of countries where the organisation operates, and Fully 4-5
names of countries with either major operations or that are
specifically relevant to the sustainability issues covered in the
report.
2.6 Nature of ownership and legal form. Fully Annual Report 2012*:
• Nature of ownership: 88-89
• Legal form: 26
2.7 Markets served (including geographic breakdown, sectors Fully Annual Report 2012: 18
served, and types of customers/beneficiaries).
2.8 Scale of the reporting organisation. Fully • Number of employees: 14
• Net Sales: Annual Report
2012: 6-8
• Number of Operations: 4, An-
nual Report 2012: 76
• Products: 4-5
2.9 Significant changes during the reporting period regarding Fully Annual Report 2012: 16-17
size, structure, or ownership.
2.10 Awards received in the reporting period. Fully 5
3. Report Parameters
Profile Description Reported Page
Disclosure
3.1 Reporting period for information provided. Fully 6
3.2 Date of most recent previous report (if any). Fully **
3.3 Reporting cycle Fully 6
3.4 Contact point for questions regarding the report or its Fully enquiry@halcyonagri.com
contents.
3.5 Process for defining report content. Fully 8-9
3.6 Boundary of the report. Fully 6
(*) Halcyon Agri Corporation Ltd Annual Report 2012. Visit: www.halcyonagri.com
(**) Not Applicable. This is Halcyon Agri Corporation’s first sustainability report.
18 Halcyon Agri Corporation Limited Sustainability Report 2012Global Reporting Initiative (G3.1) Index
PROFILE DISCLOSURES (CONTINUED)
3. Report Parameters
Profile Description Reported Cross-reference/Direct answer
Disclosure
3.7 State any specific limitations on the scope or boundary of Fully 6, 8-9
the report.
3.8 Basis for reporting on joint ventures, subsidiaries, leased Fully 6
facilities, outsourced operations, and other entities that can
significantly affect comparability from period to period and/or
between organisations.
3.10 Explanation of the effect of any re-statements of information Fully **
provided in earlier reports, and the reasons for such re-
statement.
3.11 Significant changes from previous reporting periods in the Fully **
scope, boundary, or measurement methods applied in the
report.
3.12 Table identifying the location of the Standard Disclosures in Fully 18-21
the report.
4. Governance, Commitments, and Engagement
Profile Description Reported Cross-reference/Direct answer
Disclosure
4.1 Governance structure of the organisation, including Fully Annual Report 2012:
committees under the highest governance body responsible • Governance body: 10-11
for specific tasks, such as setting strategy or organisational • Composition and committees:
oversight. 28-38
4.2 Indicate whether the Chair of the highest governance body is Fully Annual Report 2012: 29
also an executive officer.
4.3 For organisations that have a unitary board structure, Fully Annual Report 2012: 29-31
state the number and gender of members of the highest
governance body that are independent and/or non-executive
members.
4.4 Mechanisms for shareholders and employees to provide Fully • Shareholders: Annual Report
recommendations or direction to the highest governance 2012: 39
body. • Employees: 15
4.14 List of stakeholder groups engaged by the organisation. Fully 8
4.15 Basis for identification and selection of stakeholders with Fully 8
whom to engage.
(**) Not Applicable. This is Halcyon Agri Corporation’s first sustainability report.
Halcyon Agri Corporation Limited Sustainability Report 2012 19Global Reporting Initiative (G3.1) Index
PERFORMANCE INDICATORS
Performance Description Reported Page
Economic
Economic performance
EC1 Direct economic value generated and distributed, including revenues, Fully • Revenue,
operating costs, employee compensation, donations and other community Costs, Wag-
investments, retained earnings, and payments to capital providers and es, Payments
governments. and Tax: An-
nual Report
2012: 6-7
and 49
• Community
Investment:
16
EC3 Coverage of the organisation's defined benefit plan obligations. Partially Annual Report
2012: 82
Market presence
EC7 Procedures for local hiring and proportion of senior management hired Fully 6, 14
from the local community at significant locations of operation.
Indirect economic impacts
EC8 Development and impact of infrastructure investments and services Fully 15
provided primarily for public benefit through commercial, in-kind, or pro
bono engagement.
ENVIRONMENTAL
Energy
EN3 Direct energy consumption by primary energy source. Fully 10-11
EN4 Indirect energy consumption by primary source. Fully 10-11
Water
EN8 Total water withdrawal by source. Fully 11
Emissions, effluents and waste
EN16 Total direct and indirect greenhouse gas emissions by weight. Fully 12
EN21 Total water discharge by quality and destination. Fully 11-12
Compliance
EN28 Monetary value of significant fines and total number of non-monetary Fully 11-12
sanctions for non-compliance with environmental laws and regulations.
LABOUR PRACTICES AND DECENT WORK
Employment
LA1 Total workforce by employment type, employment contract, and region, Fully 14
broken down by gender.
Occupational health and safety
LA7 Rates of injury, occupational diseases, lost days and absenteeism, and Fully 15
number of work-related fatalities by region and by gender.
20 Halcyon Agri Corporation Limited Sustainability Report 2012PERFORMANCE INDICATORS (CONTINUED)
HUMAN RIGHTS
Child labour
HR6 Operations and significant suppliers identified as having significant risk for Fully 14
incidents of child labour, and measures taken to contribute to the effective
abolition of child labour.
SOCIETY
Compliance
SO8 Monetary value of significant fines and total number of non-monetary Fully HAC reports zero
sanctions for non-compliance with laws and regulations. cases of sig-
nificant fines and
sanctions for the
reporting period.
PRODUCT RESPONSIBILITY
Product and service labelling
PR5 Practices related to customer satisfaction, including results of surveys Fully 9
measuring customer satisfaction.
Compliance
PR9 Monetary value of significant fines for non-compliance with laws and Fully 9
regulations concerning the provision and use of products and services.
Halcyon Agri Corporation Limited Sustainability Report 2012 21You can also read
