Environmental and Social Assessment of Suppliers and Business Partners
Suppliers are one of our stakeholders and play a crucial role in our business chain. Therefore, we build good relationships with suppliers to support our sustainable practices while adhering to fair competition under applicable laws and regulations and upholding principles of efficiency, effectiveness, competitiveness, transparency, fairness, reasonableness, openness, and accountability. The Company’s procurement mechanisms for goods and services comply with the Minister of State-Owned Enterprises Regulation No. PER-2/MBU/03/2023 on Guidelines for Governance and Significant Corporate Activities of State-Owned Enterprises and the Director’s Regulation No. 0010/Tbk/PER-0000/23-S11.1 on Guidelines for Procurement of Goods/Services of PT TIMAH Tbk. We manage smooth operational processes of procurement of goods and services by establishing sustainable cooperation with suppliers, seeking new suppliers to boost production efficiency and effectiveness, and conducting a Vendor Management System. All (100%) new suppliers have been screened against the environmental criteria stated in the Cooperation Agreement. [308-1, 414-1]
We require new suppliers to sign Integrity Pacts; the requirement complies with Occupational Health and Safety (OHS) policies and Environmental Concerns. As of 2023, there were 1,604 suppliers registered with the Company. The Company has also identified potential negative environmental impacts that may occur within the supply chain, resulting in potential environmental pollution. The Company selects new suppliers based on environmental and social criteria, and we under PT TIMAH Tbk’s procurement guidelines involve local parties and hire local labor in operational areas to create socio-economic impacts. Throughout 2023, there were no negative environmental and social impacts from suppliers, so no working relationships with suppliers were terminated for this reason. [308-2, 414-2]
Local Stakeholder Engagement
In executing supply chain management, the Company endeavors to provide economic impacts to local stakeholders in the operational areas. Local categories include suppliers from the Bangka, Belitung, Riau, and Riau Islands regions. If local business partners are incapable of supplying the Company’s needs, we consider other domestic suppliers. In 2023, there were 77 local suppliers, contributing approximately 28.41% of the total suppliers, with the value of local supplier procurement contracts of Rp372 billion.
