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able to give Rp. 5 million rupiahHa. The company has planed to make solution for time bound
plan on the land in 2012. The team will see the case progress on the next surveillance. Compliance status: Minor Non-conformity
6.4 Any negotiations concerning compensation for loss of legal or customary
rights are dealt with through a documented system that enables indigenous peoples, local communities and other stake holders to express their views
through their own representative institutions
During preliminary audit, there was no data and procedurework instruction related to identification process for the lost of community’s right to ensure appropriate compensation so
that major non conformity was published. The company has made improvement by socializing
and ensuring IK-3.09-0302 to have documented. The corrective action done by the company by1. Identifying entire community around the plantation particularly concerning dispute resolution
plan with compensation process; 2. Socializing the resolution conflict to the community. The corrective action has been found adequately so the non conformity can be closed.
Compliance status: Compliance 6.5
Pay and conditions for employees and for employees of contractors always meet at least legal or industry minimum standards and are sufficient to provide
decent living wages
The Company has payroll documentation for the entire grade from 1A up to 4D. The basis for the pay refers to the Decree of the Board of Directors of PT. Perkebunan Nusantara III No.
3.08SKPTS462011 on Employee Salary Increase of PT. Perkebunan Nusantara III Persero issued on 28 February 2011. The wage basis is in accordance with the Decree of the Governor
of North Sumatra No.: 188.44674KPTS2010 dated 24 November 2010 which stipulates that
the minimum wages for plantation workers is Rp. 1.035.500 per month. This provision applies
only for permanent employee category, both management’s employee and operating employees.
The company also hired temporary workers or non-permanent labor BHL. They were recruited by contractor companies. Thus, the employment agreement was signed between the Company
and the contractors. A contractor called the Pemborong is responsible for the recruitment of non- permanent workers. Their wages are decided by the Contractor management. There is no
monitoring of whether the wage standard is already in accordance with the Provincial Minimum
SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES
Sucofindo ICS FRM 3.04
Issue 04 Rev. 6 59of 117
Wage UMP. However, the Company already requires the Contractor those as specified in the contract.
Payroll documents are made per month for staff personnel and other employees and available at the District Office, Estate office, and Mill office. Salary component consists of: basic salary,
allowances fixed, electricity, rice, water, school, vacation, special, overtime, if any. Additionally, they receive a bonus according to the companys profits. On the feast day, they also receive a
feast day allowance. Article 21 income tax is borne by the Company. As for the payroll of the
Contractor’s employees, the Company does not regulate the amount. Provisions regarding the amount of salary are regulated or determined by the head of the
contractor company itself. But from the interviews, for half a day work is roughly IDR 20,000, depending upon the type of worker. This wage is already appropriate.
2. CLA The company has a Collective Labor Agreement with the Plantation Trade Union SP-Bun that
has been registered in the Office of Manpower of North Sumatra based on the Decree of the Head of Office of the Ministry of Manpower of North Sumatra Province No. KEP.218-5W21998
dated 2 September 1998. The CLA document has been revised with respect to the Company’s
differences in the implementation. Revisions were made on the results of meetings and discussions between the Trade Union officials. Revisions were made every two years, and
signed by their respective representatives on 1 February 2010, and valid for the 2010-2011 periods.
3. The facility of employees The company provides housing facility for each employee along with its supporting facilities. This
is as stated in Article 37 of the CLA, and those who do not get housing are to be compensated in
the form of rent assistance amounting to 50 of basic salary for employees of the Office of the
Board of Directors, and 35 for employees of estateunit. Here is an example of housing and supporting facilities in the Aek Nabara Utara Estate unit.
List of Facilities at Aek Nabara Utara Estate Reported Per October 2011. No.
Name of Facility Total
1. Housing 286 561 doors
SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES
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2. Elementary schoolIbtidaiyah teachers are paid by the Company
5 units 9 people
3. Mosques and churches 7 units
4. Employee hall 1 unit
5. Polyclinic 4 units
6. Cooperative shop 5 units
The entire estates and mills under PT. Perkebunan Nusantara III can be reached from the population settlement. So, the housing facility is just an option to take or not to take by
employees. Those who do not want to occupy the housing facility will receive house rent allowance.
2. Agreements with contractors:
The Company has documented contracts with the Contractor. From the sample contract, there is a special clause requiring that the contractor meets the requirements of employment law. The
Company has designed a standard format of contract documents. Other obligations are covered in the article of General Obligations for contractors. However, there is no evidence that their
compliance is monitored by the Company as sa performance evaluation of supplierscontractors.
This is issued as an Observation. Compliance status: Observation
6.6 The employer respects the right of all personnel to form and join trade unions
