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CORPORATE RESPONSIBILITY TO ENVIRONMENT

CSR programs in the environmental sector prioritize the maintenance, development and management of the environment to minimize the possibility of negative impacts from the Company’s business activities and to make a positive contribution to environmental preservation. The fulfillment of the Company’s CSR related to the environment emphasizes the management of environmental impacts generated through environmentally friendly energy efficiency, water conservation, air monitoring and management, as well as a waste management system.

Using Raw and Auxiliary Materials for Production

In the production process, the Company uses raw materials that are eco-friendly or not harmful to the surrounding environment.

The Company also enforces a policy to ensure that auxiliary materials of production process are not included in the category of CMR (Carsinogenic, Mutagenic, and Reprotoxic) materials in order to prevent negative impacts on employee health, especially employees who are directly related to production activities.

The main raw materials and auxiliary raw materials used in the Company’s production processes are as follows:

Utilizing Cleaner Energy with Greater Efficiency

The Company’s commitment to address energy efficiency and conservation is carried out through established energy consumption policies. The Company disseminates all employees that every operational activity always considers environmental safety and the efficient and effective use of energy. This is implemented by replacing diesel fuel with natural gas as the main source of energy for all production facilities and its Power House. Further, the Company promotes an ongoing program, which was first initiated in 2005, to replace the existing Air Conditioner (AC) refrigerant with more environmentally friendly alternative that do not deplete the ozone layer.

In 2020, the Company strived to maintain this achievement. To that end, all parties shall be aware of and calculate the energy use in each activity that will be carried out.

kWh

Pembangkit Listrik /

Power Plants Produksi /

Production Kendaraan / Vehicle

Diesel

Grafik Alokasi Penggunaan Energi Primer / Chart of Primary Energy Use Allocation

-20,000,000

2004 2006 2008 2010 2012 2014 2016 2018 2020

2005 2007 2009 2011 2013 2015 2017 2019

-40,000,000 -60,000,000 -80,000,000 -100,000,000 -120,000,000

Konsumsi dan Konservasi Air

Perseroan menggunakan air dalam kegiatan operasional, khususnya proses produksi Perseroan. air digunakan dalam proses penyemprotan pipa yang baru keluar dari furnace (quenching &

descaling), proses NDT dan hydrotest, proses surface treatment pipa dan coupling, dan pembersihan pipa. Pada tahun 2020, Perseroan melakukan beberapa upaya konservasi air yaitu

• Pemanfaatan air hujan untuk penyemprotan pipa yang keluar dari furnace (quenching & descalling);

• Penggunaan air dengan sistem tertutup (closed loop) pada proses quenching di Heat Treatment proses.;

• Daur ulang air pada process NDT dan hydrotest.

Pemantauan dan Pengelolaan Udara

Perseroan menaruh perhatian pada pemantauan dan pengelolaan udara yang baik sebagai bentuk kepedulian terhadap kelangsungan kehidupa dan kesehatan makhluk hidup. Kendati Perseroan secara khusus belum melakukan perhitungan potensi jumlah gas pemicu penipisan lapisan ozon yang diakibatkan aktivitas produksi, Perseroan telah menerapkan sejumlah upaya pengelolaan kualitas udara yang diorientasikan pada pengurangan emisi gas.Upaya- upaya yang dilakukan Perseroan pada tahun 2020 adalah :

• Meningkatkan efisiensi produksi melalui perawatan panas pipa dengan melakukan refractory ceramic pada furnace hardening dan tempering;

• Konversi dari bahan bakar solar/diesel menjadi natural gas sejak tahun 2005;

• Pemasangan scrubber di cerobong electroplating untuk mengurangi pencemaran udara;

• Monitoring emisi sumber tidak bergerak di 29 titik lokasi produksi setiap 6 bulan dan sumber emisi bergerak setiap tahun;

• Tidak melakukan pembakaran sampah secara terbuka;

Water Consumption and Conservation

The Company uses water in the production process in its daily operational activities, particularly for spraying pipes coming out from the furnace in quenching and descaling processes; NDT and Hydrotest processes; surface treatment of pipes and couplings;

and pipes cleaning. In 2020, the Company conducted several water conservations, namely:

• Utilizing rainwater for quenching and descaling of pipe from the furnace;

• Using the closed loop system for quenching in the Heat Treatment process;

• Recycling water in the NDT and hydrotest processes.

Air Monitoring and Management

The Company strives to monitor and manage air quality to realize its concern for the continuity of life and health of living things.

ozone layer depletion. While no particular efforts have been made to measure potential emission of ozone-depleting substances from production activities, the Company carried out efforts to reduce the production of gases. The efforts made by the Company in 2020 are:

• Increasing production efficiency through heat treatment of pipes, in which refractory ceramic is used for the hardening and tempering furnace;

• Converting the main source of energy from diesel fuel to natural gas since 2005;

• Installing scrubber in the electroplating chimney to reduce air pollution;

• Monitoring the source of gas emission at 28 production locations every 6 months and mobile gas emission every year;

• Stop burning waste in open air;

• Melakukan program Pengurangan Green House Gas, melalui : o Penanaman pohon oliana, mangga dan angsana yang

terbukti mampu mengurangi polusi udara dan menyerap CO;

o Penggunaan refigerant yang ramah lingkungan.

Sistem Pengelolaan Limbah B3

Perseroan memiliki konsekuensi menghasilkan limbah bahan berbahaya dan beracun (B3) dari hasil produksi sebagai Perseroan yang bergerak di industri minyak, gas bumi dan pertambangan.

Dalam hal penanggulangan pengelolaan B3, Perseroan mengacu pada sistem pengelolaan khusus sebagaimana diatur dalam ketentuan dan regulasi yang berlaku di Indonesia. Pada praktiknya, Perseroan telah membuat Instalasi Pengolahan Air Limbah (IPAL) sebagai wadah pengelolaan limbah B3 dan untuk mengurangi dampak negatif limbah B3 bagi lingkungan. Selain itu, IPAL bertujuan untuk mengurangi dampak limbah cair yang dihasilkan oleh proses pelapisan logam (phosphating dan electroplating) serta kegiatan domestik lainnya.

Perseroan memiliki 2 (dua) instalasi IPAL, di mana IPAL 1 (Surface Treatment) berfungsi untuk mengolah air buangan dari proses pelapisan logam dan IPAL 2 (Aeration Ponds) digunakan untuk mengolah air buangan kegiatan domestik. Air hasil olahan IPAL akan diperiksa tingkat kelayakannya oleh Perseroan sebelum dibuang ke saluran umum guna memastikan bahwa kadar kelayakan air telah memenuhi kriteria yang ditetapkan peraturan kepatuhan lingkungan yang berlaku. Pemeriksaan kelayakan kadar air olahan limbah dilakukan secara berkala setiap bulan, di mana pengukurannya dilakukan oleh pihak ketiga di lokasi titik sampling yang telah ditentukan.

Dampak Tanggung Jawab Perseroan terkait Lingkungan Hidup

Wujud nyata penerapan CSR terkait lingkungan hidup yang direalisasikan melalui sejumlah kebijakan dan program efisiensi energi, konservasi air, pengelolaan udara, dan pengelolaan limbah telah memberikan dampak positif terhadap efektivitas dan efisiensi kinerja keberlanjutan lingkungan kerja Perseroan.

Hal tersebut salah satunya tercermin dari penurunan tingkat emisi yang dihasilkan dari perubahan energi primer dari sebelumnya menggunakan bahan bakar solar/diesel menjadi bahan bakar natural gas. Penurunan emisi CO2 terlihat dari aspek sistem pembangkit maupun produksi, sebagai berikut:

• Carrying out the Green House Gas Reduction program by:

o Planting oliana, mango and angsana trees, which have been proven to minimize air pollution and absorb CO;

o Using environment-friendly refrigerant.

Hazardous Waste Treatment System

In its operation, the Company has the consequence of producing hazardous and hazardous waste from its production as a company engaged in the oil, natural gas and mining industries. In terms of overcoming the management of hazardous waste, the Company refers to a special management system as stipulated in the provisions and regulations applicable in Indonesia. The Company installed the Waste Water Treatment Plant (WWTP) to manage and reduce the impacts of hazardous waste to the environment.

Moreover, the WWTP program is designed to reduce the impacts of liquid waste resulting from the surface treatment process (phosphating and electroplating) and other domestic activities.

There are 2 WWTP facilities operating within the Company. WWTP 1 (Surface Treatment) for wastewater treatment from surface treatment process and WWTP 2 (Aeration Ponds) for domestic wastewater treatment. Before discharging to the drains, water produced from the WWTP process is measured by an internal team within the Company to ensure that the water meets the requirements of existing environmental specifications. The test result is verified on a monthly basis, with measurement performed by a third party in predetermined sampling locations.

Impact of Corporate Responsibility to Environment

The concrete implementation of CSR related to the environment is realized through several policies and programs for energy efficiency, water conservation, air management, and waste management which have a positive impact on the effectiveness and efficiency of environmental sustainability performance. This is reflected, among others, on the reduction of emission due to conversion of primary energy from diesel fuel to natural gas. The reduction of CO2 emission is visible in the generator system and production as illustrated below:

CORPORATE RESPONSIBILITY TO MANPOWER,