LEGAL FOUNDATION

The implementation of Good Corporate Governance (GCG) is the Company’s utmost commitment to achieve not only in short-term business growth, but also in long-term business continuity. Therefore, the Company strives to enhance the GCG implementation by doing some improving effort in theimplementation. In addition to the rules enhacement, the Company conducts socialization and internalization of GCG to all individuals in PTBA and ensures compliance on the GCG practices. The GCG implementation is not only enough by complying the applicable rules, but also shows in daily practices. The Company believes that by becoming Good Corporate Citizen through the best GCG practice implementation, thus the thrust from Stakeholders remains continuously.

As the foundation for all business activities, the Company upholds the integrity values and apllies GCG principes, namely: Transparency, Accountability, Responsibility, Fairness and Indepence. Moreover, as State-Owned Enterpries, the GCG implementation in the Company is based on these following regulations :

The Legal Basis of GCG Implementation

  1. Law No. 19 Year 2003 dated June 19, 2003 concerning State-Owned Enterprises.
  2. Law No. 40 of 2007 concerning Limited Liability Companies.
  3. Minister of SOEs Regulation No.PER-01/MBU/2011 dated August 1, 2011 concerning GCG Implementation in SOEs as amended with the Minister of SOEs Regulation No. PER-09/MBU/2012 concerning Amendments to the Minister of SOEs Regulation No. PER-01/MBU/2011 concerning GCG Implementation in SOEs
  4. The Secretary to the Ministry of SOEs Letter No. SK-16/S.MBU/2012 concerning Indicators/Parameters of the Assessment and Evaluation of Good Corporate Governance Implementation.
  5. Indonesia’s Code of Good Corporate Governance issued by the National Committee of Governance Policies.
  6. Indonesian Corporate Governance Roadmap issued by the Financial Services Authority (FSA).

OBJECTIVES OF GCG IMPLEMENTATION

Directing & managing relationship to all stakeholders.

Promoting and supporting the Company’s growth.

Managing human resource discreetly.

Managing risk more responsibly.



Enhancing the Company’s good image.

Treating stakeholders more responsibly.

Preventing irregularity in the management of the Company.

Promoting work ethos.



To achieve those objectives, Company strives to apply basic GCG principles of transparency, accountability, responsibility, independence, and fairness consistently in each operational activity. The form of Company’s real commitment to the implementation of GCG principles is as follows:

IMPLEMENTATION OF TRANSPARENCY

The Company assures that all material and relevant information regarding its performance, financial condition and other issues will be disclosed in a clear, adequate, accurate, comparable and timely manner, and accessible by the stakeholders according to their respective rights.

IMPLEMENTATION OF ACCOUNTABILITY

The Company assures the clarity of function, implementation and accountability of each level in the Company’s organization to enable an effective management of the Company.

IMPLEMENTATION OF RESPONSIBILITY

The responsibility principle is implemented by always adhering to the prevailing laws and regulations, good management of ex mining hotspots, performing reciprocal obligations to business partners as well as designing and implementing corporate social responsibility programs.

IMPLEMENTATION OF INDEPENDENCY

Independency principle is implemented by preparing and ensuring the adherence to the codes of conduct and regulating all transactions and investment plans with potential conflicts of interests.

IMPLEMENTATION OF FAIRNESS

The Company implements fairness principle by giving equal treatment to the rights and obligations of its stakeholders. The Company makes available the access to information on the progress of the Company to all stakeholders.

GCG Structure

The Company’s GCG Structure refers to Law No. 40 of 2007 concerning Limited Liability Companies, which stipulates that corporate organs consist of three elements, namely the Shareholders through the General Meeting of Shareholders (AGM) as the highest decision making forum for the Shareholders; the Board of Commissioners as the supervisor of the company management; and the Board of Directors as the company manager. The Company’s organs perform their functions based on the principle that each organ has its own independence and performs its duties, functions and responsibilities solely for the best interest of the Company.

In operational activities, the Board of Commissioners and Board of Directors have established sub-organs of the Company to support the smooth operation of the Company and provide necessary input in assuring the smooth operation of the Company. Formation of sub-organs is conducted as part of clear division of authorities in implementing GCG principles effectively. The Board of Commissioners has established Audit Committee and Business Risk, Nomination, Remuneration and Human Resources Development Committee (KRU & NRSDM) to enhance the Board of Commissioners’ supervisory function and assist the Board of Commissioners in performing their duties and obligations as well as in formulating Board of Commissioners policies in accordance with the scope of duties.

Meanwhile, the Board of Directors has formed supporting organs as the working units to control, oversee and be responsible for GCG implementation as well as partners of the Committees under the Board of Commissioners. The working units directly responsible to the President Director are as follows:

  1. Corporate Secretary
  2. Corporate Management System
  3. Internal Audit Unit (SPI)

CORPORATE SECRETARY

In order to improve the services to the public and investors, the Issuers or Public Companies should establish Corporate Secretary function in accordance with OJK Regulation No. 35/ POJK.04/2014 on the establishment of Issues Corporate Secretary and Public Companies. The Corporate Secretary is assisted by other functions under his coordination, namely: Investor Relations, Corporate Communications, Corporate Action, Corporate Administration, and Public Relations and Jakarta Representative Office.


Corporate Secretary plays a major role in facilitating interorgan relations in the Company, the Company’s relations with its stakeholders as well as the compliance with the prevailing laws and regulations.


Corporate Secretary is directly responsible to the President Director. The Corporate Secretary has three main functions: as a liaison officer, compliance officer and investor relations. In general, the duties of Corporate Secretary are as follows:

  1. To act as a representative of the Company (Board of Directors) to the extent of the granted authorities.
  2. To handle investor relations, monitor the trend in the capital market, ensure the compliance of the Company’s operational activities with the applicable regulations in capital market.
  3. To prepare policies and recommendations in accordance with capital market regulations.
  4. To provide information on the matters to be shared with the public, shareholders and other stakeholders, on the Issuer or the Company.
  5. To manage Jakarta Representative Office.
  6. To review the latest reports of capital market analysts, make qualitative and quantitative analysis on the Company’s performance, particularly in financial sector, monitor the economic situation and projections (international, regional and local as well as capital markets in various countries).
  7. To publish the Company’s non material activities, manage Company documents and information, and publish Company’s reports.
  8. To provide input to the Board of Directors on the compliance with capital markets regulations.
  9. To act as a liaison officer between the Company and the Financial Services Authority, (OJK) and the public, and foster good relationship with all other stakeholders besides shareholders including the government, media, business partners and the public.

THE AUDIT COMMITTEE

The Audit Committee is formed to assist the implementation of Board of Commissioners duties in promoting GCG practice, making available an adequate structure of internal control, enhancing the quality of transparency and financial reporting, as well as reviewing the scope, accuracy, independency and objectivity of public accountants. The Company’s Audit Committee is formed based on:

  1. The Minister of SOE Regulation No. PER-12/MBU/2012 on the Supporting Organs of the BoC/Supervisory Board of SOEs
  2. The Minister of SOE Regulation No. PER-01/MBU/2011 on Good Corporate Governance Practice in SOEs as amended by the Minister of SOE Regulation No. PER-09/MBU/2012.
  3. The Chairman of the Capital Market Supervisory Agency and Financial Institution Decision No. KEP 643/BL/2012 on the Formation and Working Guidelines of Audit Committee.

The Audit Committee is formed for the following objectives:

  1. To ensure that the Company’s financial statements are presented in accordance with generally applied accounting principles.
  2. To ensure that the Company’s internal control structure is functioned in a proper manner.
  3. To ensure that internal and external audits are performed in accordance with the established auditing standards.
  4. To ensure the follow-up of audit findings by management

RISK MANAGEMENT

Overall, the Company’s risk management aims to supportand strengthen the achievement of the GCG objectives as follows:

  1. Increase the possibility for success in achieving corporate goals.
  2. Provide a better foundation for the preparation of strategic orientation.
  3. Focus on the best standards of business practice.
  4. Improve relations with stakeholders.
  5. Help achieve competitive advantages.
  6. Provide an integrated response to various risks.
  7. Minimize risk potential.
  8. Minimize risk exposure.
  9. Optimize the achievement of the Company goals.

In accordance with business growth and high levels of competition, the risks faced by the Company are also increasingly complex, therefore the Company paid great attention to the aspects of the risks to be faced. Along with the increasing number of strategic plans and in accordance with the PTBA Board Manual, each Board's decision that needs to get the approval of BOC should be attached to the risk assessment document. The risk assessment has been carried out for some strategic plans such as power plant construction plans and acquisitions. Risk assessment is done based on a review of relevant documents, observation, and brainstorming with experts. Based on identification of risk contained some crucial risk events that may happen to do analysis and risk mitigation proposals.

INTERNAL CONTROL SYSTEM

The Company’s Internal Audit and Control System has conducted in accordance with the Minister of SOEs Regulation No. PER- 01/MBU/2011 on Implementation of Good Corporate Governance, Article 26 and Article 28. Internal Control system is a series of systematic activities ranging from the preparation; process and reporting in order to effectively function to secure investments and assets of the Company. To determine the adequacy of internal control system implemented, the Company has developed an internal control system including:

  1. Improving disciplined and structured internal control environment.
  2. Performing risks analysis and management, including the process to identify, analyze, and manage relevant business risk continuously.
  3. Performing internal control activities at every level and unit in the Company’s organization on, among others, authorities, verification, reconciliation, performance assessment, allocation of duties and security of the Company’s assets.
  4. Improving and developing information and communication system covering reporting process of operational and financial activities and compliance with the applicable laws and regulations.
  5. Monitoring the quality of internal control system including the involvement of internal audit function at all levels and units in the Company’s organization.

Generally, this system refers to international framework issued by Committee of Sponsoring Organizations (COSO) of the Treadway Commission. The activities under the above point b and c are performed by Corporate Management System Work Unit (SMP) elaborated through the development of each system including Risk Management System, Quality Management System, Environmental Management System and Work Safety Management System; while the activities under point c, d and e are performed with the involvement of Internal Audit Unit (SPI).

CODE OF CONDUCT

In principal, the Company’s Code of Conduct Guideline provides the issues that become the responsibility of the Company, members of the Company’s management, and other parties having in business with the Company. This guideline covers:
  • Corporate Business Ethics

    Corporate Business Ethics details how the Company should behave and act as an entity in the attempt to balance its interests and those of stakeholders based on the principles of GCG and sound corporate values

  • Code of Individual Conduct

    Code of Individual Conduct outlines how individuals in the Company’s organization should interact, behave, uphold the ethics, and act in accordance with the prevailing standards and regulations.

  • Dissemination of the Code of Conduct and Reporting of Violations

    The Code of Conduct and the procedure for the reporting of inconsistent behaviors, violations of the Code of Conduct, Corporate Regulations, and other prevailing regulations as well as the sanctions for such misconduct will be disseminated effectively and comprehensively to all levels in the Company’s organization and its stakeholders.

  • Statement of Compliance with the Code of Conduct.

    This is a statement on the understanding and commitment of all levels of the Company’s organization to adhere to the Company’s Code of Conduct and the party liable for its implementation.

Main points of the Company’s Business Ethics contain critical aspects to the smooth operation of the Company, namely:

  1. The target to be achieved by the Company’s management and employees;
  2. The Company’s internal control;
  3. Compliance with prevailing laws;
  4. Donations;
  5. Giving and receiving of gifts;
  6. Environment;
  7. Manpower;
  8. The Ethics of Stakeholder Relations;
  9. The Ethics of Working Relations.

Meanwhile, the Work Ethics that should be applied by all levels of the Company’s organization consist of the following:

  1. Integrity and commitment;
  2. Compliance with laws and prevailing regulations;
  3. Information Confidentiality;
  4. Conflict of interest;
  5. Insider Trading;
  6. Occupational health and safety and environment;
  7. Corporate image;
  8. Involvement in political activities, and
  9. Giving and receiving of gifts.

ANTI GRATIFICATION POLICIES

Giving gifts is defined as any kind of giving present by the Company’s personnel to certain parties to influence the parties for the benefit of the Company unfairly. Receiving gift is defined as any kind of receiving by the Company’s personnel from certain parties to influence the decision of the Company‘s personnel for the interest of the party giving the present.

Based on the Joint Decision Letter of Board of Commissioners and Board of Directors Number: 018A/SK/PTBA-KOM/V/2009 and No. 306B/KEP/ Int-0100/PW.01/2009 dated December 14, 2009 concerning implementation of GCG principles and practices on the prohibition of giving and receiving gifts, bribes and the like, giving to the other party as token of gratitude, religious holiday gifts, souvenirs and momentos can be given in the form of goods or services, with a maximum amount of 1,000,000 (one million Rupiah) per person/company per year except for promotional and sponshorsip activities. Each employee receiving gift regardless of its value and in whatever form, must report to his/ her immediate supervisor by using the provided form.

Excluded from the above provisions is a receipt of gifts from any party related to the Company’s promotion, tokens of gratitude, religious holiday gifts, souvenirs and mementos, which are not intended as bribes and/or worth less than Rp1,000,000 (one million Rupiah) per person company per year, which is deemed as appropriate attitude in daily life with the following conditions:

  1. By attaching logo/name of the giving company as part of its promotional activities.
  2. Such giving is not conducted continuously by the same giver to the Company’s personnel, at the maximum of 3 (three) times in a year.
  3. Each member of the Company’s organization shall never mention or provide the Company’s internal information that may cause conflict of interest or negative image of the Company.

As an effort to gratification prevention, Corporate referred to the Policies of Giving and Receiving Gift which pointed on GCG Guidelines. In the implementation, Corporate guarantee that these policies are known by whole levels and other parties which related by Corporate. Specifically, Corporate’s effort on fulfilling anti gratification policies are as follows:

  1. In every goods and services procurement must need to include the policies of giving and receiving gift prohibition, bribery, and likewise.
  2. The implementation of policies to the all staffs and Business Partners is conducted through policy distribution, socialization, so there will be same comprehension between superiors and subordinates, fellow employees and Corporate along with Business Partners and other related parties.
  3. To assign Corporate Management System for monitoring policies implementation by give report periodical report annualy to the President Director.

As an indication of the potential violations of anti gratification policies should be immediately reported in writing to SMR and SMP Work Unit. SMR and SMP Work Unit then verified the report and in case of violation indication occurred, the report will be followed up by SPI.

PANDUAN BERPERILAKU (CODE OF CONDUCT) PTBA

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PANDUAN TATA KELOLA PERUSAHAAN YANG BAIK PTBA

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KEBIJAKAN LARANGAN PEMBERIAN DAN PENERIMAAN HADIAH

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