Touching the lives Touching The Lives of every Indonesian...

Laporan Tahunan 2012 Annual Report

Touching the lives of every Indonesian every daySustainability Report 2011-2012

Touching The Lives of Every Indonesian Every Day

CONTENT

2 SUSTAINABILITY SCORE CARD

4 OUR APPROACH TO SUSTAINABILITY REPORTING

8 PRESIDENT DIRECTOR STATEMENT

12 ABOUT US

24 SUSTAINABILITY GOVERNANCE

34 THE BUSINESS CASE FOR ACTION

38 IMPROVING HEALTH AND WELL-BEING

46 REDUCING ENVIRONMENT IMPACT

58 ENHANCING LIVELIHOODS

68 OUR CONTRIBUTION TO ECONOMIC DEVELOPMENT

72 PRODUCT RESPONSIBILITY

76 PEOPLE: THE HEART OF OUR BUSINESS

86 MOST SIGNIFICANT AWARDS RECEIVED DURING 2011-2012

88 ASSURANCE STATEMENT

90 GLOSSARY

91 GRI CONTENT INDEX

UNILEVER SUSTAINABLE LIVING PLAN (USLP) AREA

TARGET 2011 RESULTS (INDONESIA) 2012 RESULTS (INDONESIA)

Improving Health and Well Being Reduce diarrheal & respiratory disease. Change the hygiene behaviour of 1 billion consumers globally by promoting the benefits of hand washing at key times by 2015

Improve Oral Health. Encourage day and night brushing. Change the tooth brushing behaviour of 50 million people globally by 2020

Reducing Environmental Impact Reduce water use in the laundry process by making easier rinsing products more widely available. Provide 50 million households in water-scarce countries with home care products that use less water by 2020

Enhancing Livelihoods Helping Smallholder farmers. Link 500,000 smallholder farmers globally into our supply network by 2020

SUSTAINABILITY SCORECARDTargets and Achievements in Brief

2 SUSTAINABILITy REPORT 2012PT UNILEVER INDONESIA TBK

UNILEVER SUSTAINABLE LIVING PLAN (USLP) AREA

TARGET 2011 RESULTS (INDONESIA) 2012 RESULTS (INDONESIA)

Improving Health and Well Being Reduce diarrheal & respiratory disease. Change the hygiene behaviour of 1 billion consumers globally by promoting the benefits of hand washing at key times by 2015

Improve Oral Health. Encourage day and night brushing. Change the tooth brushing behaviour of 50 million people globally by 2020

Reducing Environmental Impact Reduce water use in the laundry process by making easier rinsing products more widely available. Provide 50 million households in water-scarce countries with home care products that use less water by 2020

Enhancing Livelihoods Helping Smallholder farmers. Link 500,000 smallholder farmers globally into our supply network by 2020

SUSTAINABILITy REPORT 2012PT UNILEVER INDONESIA TBK

1,404,000 persons

4,957,000 persons

1,910,000 persons

1,110,000 persons

22,000 small holders

24,000 small holders

17,571 million m3

(saved water)

19,429 million m3

(saved water)

3

4 SUSTAINABILITy REPORT 2011-2012PT UNILEVER INDONESIA TBK

This is the third Sustainability Report produced by PT Unilever Indonesia Tbk (Unilever Indonesia). It covers our responsibilities to our stakeholders and the contributions we have made to sustainable development.

ABOUT ThIS REpORTUnilever Indonesia commissioned a comprehensive stakeholder analysis and materiality tests in order to identify and highlight major issues of interest to our stakeholders and develop an approach to reporting on these issues.

This Report is consistent with our Annual Report and our previous Sustainability Report. It continues to feature the Disclosures on Management Approach (DMA), which provides information on the nature of our business in each area of the Global Reporting Initiative (GRI-G3) Guidelines. Our strategies, achievements and future plans for sustainability management are all aligned with these guidelines, particularly in the areas of sustainable environmental management, community, social contributions, ethics and corporate culture. Where company wide information is not fully available, we have provided performance data and case studies which are representative of our general approach.(3.7)

We remain committed to providing detailed disclosures with appropriate indicators and clear performance trends. In this Report we have also tracked data on our performance to date and evaluated our progress towards achieving our targets.

Our transparency efforts are not limited to this Report. Other material issues, such as Corporate Governance and detailed data on our internal operations and business activities, have been reported elsewhere, such as in our Annual Report, and this information is not repeated here. The Unilever Indonesia Sustainability Report covers our entire organization in Indonesia which also includes the Yayasan Unilever Indonesia (YUI) and other significant

OUR AppROACh TO SUSTAINABILITY REpORTINg

OUR AppROACh TO SUSTAINABILITY REpORTINg

subsidiaries which includes quantitative and qualitative data from January 1, 2011 to December 31, 2012. Some indicators are partial and only relate to certain divisions or activities; this is indicated in the text. However any restatements of information which was also present in our previous report is only for updating reasons. Compared to the previous reporting period, there are no significant changes in the scope, boundary or measurement methods applied (3.1,3.6,3.7,3.8,3.10, 3.11)

Our Sustainability Reports, which are produced biennially, refer to the GRI-G3.1 Guidelines and the Unilever Sustainable Living Plan and provides continuity from our previous report published in May 2011. The reliability of the information disclosed in this Report has been assessed by Mazars. Their conclusions are presented in their Independent Assurance Statement, which can be found on page 88. A GRI Index table has also been placed on page 91 for quick reference on our sustainability performance. In our opinion this report complies with B+ of GRI Application Level System as stated in the Independent Assurance Statement above. However, we also have requested a third party application check conducted by Mazars to verify our declaration. (3.2, 3.3, 3.9, 3.12, 3.13)

The report is published in English and Indonesian and is available to all stakeholders in hard copy on request. It can also be downloaded from our website. For further information and comments please contact (3.4):

Sinta KaniawatiGeneral Manager Unilever Indonesia FoundationPT Unilever Indonesia Tbk / Yayasan Unilever IndonesiaGraha Unilever, Jl. Jend Gatot Subroto Kav. 15 Jakarta 12930 Indonesia Tel: +62 21 526 2112 E. [email protected]

Or visit:www.unilever.co.id (3.12)

5SUSTAINABILITy REPORT 2011-2012PT UNILEVER INDONESIA TBK

Impo

rtan

t for

the

Stak

ehol

ders

Important for the Company

Low

Low

Medium

High

Medium High

MATERIALITY ISSUES

1

3

4

510 7

8

61115

18 12

13

19

23

16

17

20

21

22

14

9

Product Information/Labeling

Responsible Marketing

Customer Satisfaction

Occupational Health and Safety

Training and Development

Employee rights

Community Empowerment

Waste Management

Customer Care

Improvement in Living Condition

Microbead Reduction

Contribution and Donation

Supplier Development

Sustainability Criteria in Supplier Selection

Remuneration and rewards

Carbon Emission Mitigation

Outsourcing

Nutritional Improvement

Recycled Packaging

Equal Opportunity

Carbon Footprint Management

Diversity and Human Rights

Electricity energy consumption and fuel oil

Animal Testing

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

2

24


MATERIALITy AND DETERMINING OUR CONTENT More than an instrument for determining the themes that the organization should prioritize in the reporting process, the materiality matrix helps to integrate the sustainability strategy with the demands of internal and external stakeholders. We have recently developed this matrix which has been based on stakeholder forum discussions, actions, consultations and studies. In order to develop this matrix we have used the following sources: • Facetofaceencounterswithsuppliers,specialists

from the marketing, consumer, environmental management and fair trade areas), NGOs, and Consumers

• Facetofacemeetingswithemployeesandrepresentatives from the Trade Union (SPSI)

• YayasanUnileverIndonesiaReports• UnileverSustainableLivingPlan (3.5)

STAKEhOLDER ENgAgEMENT Listening to others and learning from our stakeholders informs our decision-making, strengthens our relationships and helps us deliver our commitments and succeed as a business.

OUR APPROACHMany of the issues the Unilever Sustainable Living Plan seeks to address fall outside our direct control, so we need to engage governments and many others to create an environment that is supportive of meeting the big health and sustainability challenges the world faces. Reaching our Plan’s targets depends on good relationships with a range of people and organisations that have a stake in our business.

With some, such as our customers, employees, suppliers and investors, the relationship is based on direct contact or financial involvement with the business. Others, such as governments and regulators, local communities, civil society organisations, academics and individual concerned citizens, have a wider interest in what we do and in our impacts on society as a whole.

Across all our activities we seek to engage with stakeholders to help us reach our Sustainable Living Plan targets, identify issues of concern, guide our strategy and reporting and provide feedback on specific areas of activity. Working in partnership is crucial in developing and delivering some of our major commitments.

HOW DO WE ADDRESS ISSUES?Engaging with our stakeholders is a critical part of the way we manage issues across our business. We have put in place a governance model to manage issues and a crisis prevention and response model.

Our issues management system has three building blocks:•monitoringandlistening;•planningforpotentialimpacts;•andactingfastbutthoroughlyandinacoordinatedway.

We assess issues on the basis of their potential impact on our brands; our business and reputation; and the probability of occurrence. Our assessment will increasingly be guided by the commitments in our Sustainable Living Plan.


HOW DO WE ENGAGE WITH OUR STAKEHOLDERS?The variety of our relationships means we engage with our stakeholders in different ways, depending on the nature of the interest, the relevance to the business and the most practical way to meet stakeholders’ specific needs and expectations.

Inspiring people to change their behavior is central to the success of our Sustainable Living Plan. For example we need to encourage people to wash their hands with soap at the right times or wash their clothes at lower temperatures. Our brand teams are in continuous conversation with our consumers to understand their diverse tastes, needs and trends. We operate consumer care lines, provide information about our business, brands and their campaigns through many websites, and conduct detailed consumer research to understand people’s habits and attitudes.

With other stakeholders, for example local governments and civil society organizations, our operating companies and specialists in areas such as nutrition, have regular meetings, participate in research projects, surveys and symposia, and contribute to public policy and special interest group debates.

Decisions to engage are made at local, regional and global levels, and the results provide information for our business decision-making. We focus on issues in which we can make a meaningful contribution.

Generally, we find that constructive dialogue, including with those who may hold critical views, helps our understanding of the dilemmas we face in running a business that is seeking to always be responsible and sustainable.


pRESIDENT DIRECTOR STATEMENT

PRESIDENT DIRECTOR STATEMENT


Unilever firmly believes in the need to invest in sustainability in order to achieve its growth objectives. The Unilever Sustainable Living Plan (USLP) published in October 2010 is the company’s public global commitment to achieving a wide range of specific sustainability targets. With the USLP, Unilever aims to help more than a billion people take action to improve their health and well-being, halve the greenhouse gas emissions, water consumption and waste of the making and use of its products and enhance the livelihoods of more than 500.000 farmers and distributors in its supply chains around the world. We aim to obtain our most important raw materials from 100% sustainable sources within the next two to seven years.

Unilever’s vision is that companies must be part of the solution for the sustainability challenges that our earth faces. Unilever as a good corporate citizen has to play a role in addressing these challenges. At the same time, our company is convinced that these challenges provide many new opportunities that can and must benefit the environment, society and the company. Consumers increasingly prefer products that have been produced responsibly. Product and packaging innovations help us make more valuable products at the same price level. Savings in energy and raw materials reduce our cost, and a growing number of talented people choose to work for responsible companies.

Unilever Indonesia faces challenges in the sustainability environment in Indonesia in the coming three to five years. The availability of clean water, especially in large cities like Jakarta, is one of them. We have been actively campaigning for water conservation on at least two fronts: by product innovation, and by demonstrating how to save water when using our products. To reduce the use of water for bathing, cleaning and washing with our products, we are developing products that help consumers change their habits in a convenient way. One example is the launching of our new innovative product “Molto One Rinse”. This product reduces the amount of water needed for laundry by two thirds.

Another challenge is ensuring the availability and the sustainability of our agricultural raw materials as we grow our business. We aim, for instance, to source all tea from Indonesia to be Rainforest Alliance certified by 2015. Farmer income and community development are important elements of sustainability in agriculture. We are strengthening farmer co-operatives and we partner with banks institutions to facilitate credit for seeds procurement. We are also providing trainings and carrying out pilot projects to help farmers increase the yield of coconut sugar production by 20%. (SO1)

At Unilever Indonesia, we made good progress towards our sustainability goals in 2011 and 2012 as part of our share of Unilever’s global targets. In 2012, three years ahead of schedule, we managed to achieve our target or using only palm oil certified by the Roundtable on Sustainable Palm Oil (RSPO). With several energy efficiency initiatives in place in our operations, we managed to largely achieve our energy and greenhouse gas emission reduction targets.

Our policy is to maximize local sourcing. We have stepped up efforts to source more of our raw materials locally, for example by fostering new coconut sugar suppliers in Sulawesi, and we continue to promote and support sustainable agricultural practices among our local suppliers. We have started to encourage suppliers from outside Indonesia to set up production facilities in Indonesia, in order to reduce the need for transportation of our supplies. In the coming years, we also seek to source more fresh fruits in Indonesia.

With a number of initiatives we conducted in the past two years, converting to gas fuel, we have reduced our SOx emissions per tonne of production by one third. We are also replacing all ice cream cabinets that use ozone depleting CFCs with ice cream cabinets that use environmentally friendly hydrocarbons.


One of the most significant achievements in 2012 was the award of the Gold ‘PROPER’ rating for our Rungkut factory. The PROPER rating system is used by the Ministry of the Environment to assess companies’ environmental compliance and social responsibility performance; the Gold rating means that we have consistently demonstrated all-round environmental excellence, ethical business practices and social responsibility. Our Cikarang factory is currently rated ‘Green’; this is the second-highest grade, indicating that it has gone beyond compliance in terms of environmental performance, efficient resource use and social responsibility.

Among the many awards we received, was the award for “Best Corporate Social Responsibility” from Finance Asia in 2011 and the 2011 Indonesian Millennium Development Goal Award by the Indonesian government for our women empowerment program which we received in 2012.

We aim to reach 100 million people in Indonesia with our programs in the area of health and well-being. We expect to reach this target by 2015, five years ahead of our original target. In 2012, we exceeded our targets in promoting good hygiene through a much expanded Global Hand washing Day campaign and by leveraging the 21 Days Programme. This programme aims to embed hand washing as a lifelong habit by encouraging children to wash their hands at five key moments for 21 consecutive days.

In 2012, we started to provide health and waste collection facilities to traditional markets, and we aim to expand this program to all our sales areas in Indonesia in the coming years. Healthy and hygienic markets are a clear example of a mutual benefit we share with our traders, who account for half of our sales.

We are also taking responsibility for our part of the waste problem in Indonesia and anticipate new regulations in this area. We are expanding our work in reducing, reusing and recycling waste from packaging. With trainings in our Trashion project and our support to the Waste Banks, we have a high and easily replicable positive impact on waste collection. A challenge we will address in the coming years is the reduction of waste from small sachets, which we aim to convert into recycled plastic or energy.

To ensure the sustainability of our business we must also run the business itself responsibly and with a high degree of integrity. In 2012 we gave more rigorous attention to improving the application of good corporate governance principles throughout the company. We are embedding best practices and stronger controls in all our business processes and at every point in the supply chain.

PRESIDENT DIRECTOR STATEMENT


Our labour relations continue to be stable and our co-operation with the labour union in our company is constructive. Since the end of 2012, we comply with the new outsourcing regulations by having all people in our company either work as permanent employees or on a direct contract. We will also continue to invest in the productivity of all our employees to ensure that we remain competitive as wages in Indonesia rise and the markets in Asia open up further to international competition.

Most of our brands, such as Lifebuoy, Pepsodent and Bango have a strong social mission and a brand purpose, which include one or more of what we see as our key sustainability issues in the coming years. Our customers are recognizing this and are rewarding us with very good growth in stable segments.

Unilever Indonesia will continue to be a leader in sustainability in Indonesia that demonstrates how people, planet and profit can prosper together. Our suppliers and distributors, NGOs, governments, and our other stakeholders acknowledge and appreciate our leading role and we want to continue and where possible expand our partnership with them.

This will ensure a continued profitable growth for our company that meets our objectives, and above all, helps us all to live more sustainability. (1.1)

MAURITS DANIEL RUDOLF LALISANGPresident Director

For and on behalf of the Board of Directors

Jakarta, 22 May 2013

SUSTAINABILITy REPORT 2011-201212PT UNILEVER INDONESIA TBK

ABOUT US

ABOUT US

Established on 5th December 1933, Unilever Indonesia has grown to be a leading company of Home and Personal Care as well as Foods and Ice Cream products in Indonesia. Unilever Indonesia’s portfolio includes many of the world’s best known and well loved brands, such as Pepsodent, Pond’s, Lux, Lifebuoy, Dove, Sunsilk, Clear, Rexona, Vaseline, Rinso, Molto, Sunlight, Wall’s, Blue Band, Royco, Bango (2.2)


The Company offered its shares to the public in 1981 and has been listed on the Indonesia Stock Exchange since 11 January 1982.

The Company owns six factories in Jababeka Industrial Estate, Cikarang, Bekasi and two factories in Rungkut Industrial Estate, Surabaya, East Java. Its products consist of about 43 key brands and more than 1,000 Stock Keeping Units (SKUs) which are sold through a network of about 644 independent distributors (429 in 2011) covering hundreds of thousands of outlets throughout Indonesia. Products are distributed through its own central distribution centers, satellite warehouses, depots and other facilities.

Unilever Indonesia Holding B.V., The Netherlands holds 6,484,877,500 shares with a nominal value of Rp 64,848,775,000, or 85%, of the shares of Unilever Indonesia. The public holds 1,145,122,500 with a nominal value of Rp 11,451,225,000 or 15% of the shares of PT Unilever Indonesia Tbk. (2.6)

The PT Unilever Indonesia Tbk. (2.1) has one subsidiary: PT Anugrah Lever (in liquidation). Up to August 2012 we owned 51% of PT Technopia Lever. (2.3)


ORgANISATION STRUCTURE

ABOUT US

President Director

DirectorHome Care

DirectorIce Cream & Marketing Service

DirectorPersonal Care

Director Foods

MAURITS DANIEL RUDOLf LALISANg

Chief Financial Officer

fRANKLIN ChAN gOMEZ

DEBORA hERAWATI SADRACh

- FINANCE AND ACCOUNTING

- CORPORATE MANAGEMENT ACCOUNTING

- BUSINESS SySTEM, IT & ERP

- LEGAL SERVICES

- COMMERCIAL HOME CARE

- MARKETING HOME CARE

- COMMERCIAL ICE CREAM

- MARKETING ICE CREAM

- MARKETING SERVICES

•CMI•CCM•CAS

vIShAL gUpTA AINUL YAQIN IRA NOvIARTI

- COMMERCIAL FOODS

- FOOD SOLUTIONS BUSINESS UNIT

- MARKETING FOODS

- COMMERCIAL PERSONAL CARE

- MARKETING PERSONAL CARE


DirectorCustomer Development

DirectorSupply Chain

DirectorHuman Resources

RAMAKRIShNAN RAghURAMAN

ENNY hARTATI SAMpURNO

hADRIANUS SETIAWAN

Director External Relations &Corporate Secretary

SANCOYO ANTARIKSO

- COMMERCIAL SUPPLy CHAIN

- CUSTOMER SERVICES

- SUPPLy MANAGEMENT

- QUALITy ASSURANCES & ENVIRONMENT- SUPPLy & DEMAND PLANNING- ENGINEERING &

SAFETy- MANUFACTURING- LOGISTICS

- ACTIVATION IMPLEMENTATION MANAGEMENT

- SALES OPERATIONS

- CUSTOMER MARKETING & TRADE CATEGORy MANAGEMENT

- COMMERCIAL CUSTOMER DEVELOPMENT

- CUSTOMER DEVELOPMENT MANAGEMENT

- CORPORATE GENERAL

AFFAIRS- HR BUSINESS PARTNERS- INDUSTRIAL

RELATIONS- ExPERTIES TEAM

•TAlenT•leArnIng

- REMUNERATION- SERVICE DELIVERy

CENTRE- MEDICAL SERVICES

- CORPORATE COMMUNICATION•InTernAl COMMUNICATION•MedIArelATIonS•exTernAlAffAIrS

- UNILEVER INDONESIA FOUNDATION

• ENHANCING LIVELIHOOD • PUBLIC HEALTH & EDUCATION• ENVIRONMENT

- INVESTOR RELATIONS

Internal Audit

AKhMAD SAEfUL


Unilever Indonesia’s headquarters are in Jakarta, where we have three offices that house our corporate departments, our consumer advisory services, customer services and key account management.

Unilever Indonesia employs just over 6000 people in the company’s offices, factories, distribution centres and points of sale (supermarkets, drugstore chains, convenience stores etc) (2.3, 2.4, 2.8)

All of Unilever Indonesia’s Operations are in Indonesia (2.5)

SIZE Of ThE ORgANIZATION (2.8)

pERIOD

2012 2011 2010

No of employees 6,447 6,027 4,796

Net Sales (Rp billion) 27,303 23,469 19,690

Total Capitalization (Rp billion) :

11,984 10,482 8,701

- Liabilities 8,016 6,801 4,652

- Equity 3,968 3,680 4,048

Total assets (Rp billion) 11,984 10,482 8,701

ABOUT US

SIgNIfICANT ChANgES IN COMpANY STRUCTURE, SIZE, OWNERShIp AND MANAgEMENT IN 2011 AND 2012

In 2011, we opened a new Dove soap factory in Surabaya and the Wall’s ice cream and Skin Care factories in Cikarang were expanded. Following PT Sara Lee Body Care Indonesia Tbk’s acquisition by Unilever Indonesia Holding B.V., the Company is appointed to market its brands in Indonesia. No changes in capital structure or other capital formation, maintenance of alteration operations took place in 2011 and 2012. (2.9)

CATEgORIES AND BRANDS IN INDONESIAUnilever Indonesia has three product categories, Foods and Beverages, Home Care and Personal Care, and a number of brands in each category: (2.2)


Bango is one of Indonesia’s leading soya sauces, made of selected high quality black soy beans, coconut sugar,

salt and water without any preservatives or additional chemical ingredients. With Festival Jajanan Bango we help hawkers selling

traditional delicacies to promote their dishes and with the TV program Bango Cita Rasa Nusantara, we explore and make

famous traditional heritage dishes across Indonesia.

Blue Band is a legacy brand that adds nutrients to our daily food, containing 6 vitamins. Blue Band Gold contains twice the essential

fatty acid (omega 3 & 6)* and 9 vitamins to help children’s growth and improve cardiovascular health.

Royco is our brand name for a range of seasoning products and soups that make home cooking easier.

Sari Wangi is Indonesia’s leader in the tea bag segment, reinforcing the important social function of tea drinking and

helping to revive leaf tea production in Indonesia.

Wall’s is a range of ice cream products that add moments of fun to everyday life, as well as portions of calcium.

Buavita is our range of juices made from fresh fruits, rich in vitamin C and without preservatives.

Unilever Food Solutions provides ingredients and services as well as insights and inspiration for healthy ideas menus and

kitchen operations.

fOODS AND BEvERAgES


CIF is a multipurpose cleaning liquid consisting of detergent and micro-particles, to clean up stains in the kitchen, bathroom and

other parts of the house.

Domestos Nomos Protector is mosquito repellent incense.

Pureit is a home installation that purifies water into germ-free and safe drinking water, without electricity or gas, and at a lower

cost per liter than bottled water, refilling or boiling.

Rinso is leader in Indonesia’s detergent market, making laundry effective and easy and unleashing people’s freedom to get dirty

clothing.

For 20 years, Sunlight liquid has been the biggest dishwashing liquid brand in Indonesia

Vixal is a porcelain cleanser liquid that helps remove stains on the toilet, porcelain, ceramic, mosaic, or other surfaces.

Wipol is a fragrance carbolic floor cleaning product containing active pine essential oil, effectively killing germs and removing

any odor.

hOME CARE

ABOUT US


pERSONAL CARE

Axe is the number one male fragrance brand in Europe and Latin America, with increasing presence in the US and Asia. In Indonesia, Axe is

the leader in the male fragrance deodorant body spray segment.

Citra is a brand that embodies the natural Asian beauty. It covers a range of hand and body body lotions and face moisturizing creams, and

has extended to a range of skin cleansing bar soaps, liquid soaps and body scrubs.

Clear provides shampoos, conditioners, stylings and tonics that actively help keep scalp healthy and free of dandruff.

Dove is a range of body care products, comprised of shampoo, body cleansing, body lotion and deodorant containing the unique ¼

moisturizing cream. Dove Lightening Deodorant, cares for underarm skin irritation due to frequent hair removal, and lightens the colour of

underarm skin.

Lifebuoy is one of Unilever’s oldest brands, providing affordable and accessible hygiene and health solutions with bar soaps, hand wash

liquids and liquid shower gels.

LUX is our range of beauty soaps and shower gels with high-quality fragrance created by world class experts.

The face care range of Pond’s provides oil control, lightening and anti-ageing care for the female skin.

Under our brand name Vaseline, we market a number of moisturizing, nourishing and protective skin care liquids, as well as face and body care

for men.


The Zwitsal Baby product range has been tested Hypo-Allergenic, and is therefore safe for the sensitive baby skin. The products contain mild

formulation and are enriched with natural ingredients, which help keeps the baby’s skin and hair moisturized and well-cared for.

Rexona is the world leader for deodorants for women and men. It is available in various formats: roll-on, sticks, aerosol, lotion, and soft

solid. It gives the users all-day confidence by keeping underarms dry and odour-free

Pepsodent is the oldest and most well-known toothpaste in Indonesia and the only paste in Indonesia that actively educates and promotes

proper habit of brushing through school program and free dental check up service.

She consists of three categories of scents for teen girls: Spray Cologne, Splash Cologne, and Talcum Powder

Sunsilk is our range of shampoos, conditioners, and styling products for women which is co-created with world hair care experts.

Tresemmé, the youngest brand in our hair care portfolio, offers a professional hair care range of shampoos, conditioners, stylings and

treatment products, to give salon beautiful hair every day.

pERSONAL CARE

ABOUT US


I N D O N E S I A

Unilever produces these products in its own factories and those of local partners, and markets them through distributors and retailers. (2.2)

With our brands, we serve markets in two main segments: Home & Personal Care (around 73% of our sales) and Foods and Beverages (around 27% of our sales) in 2011 and 2012. (2.7)

Unilever Indonesia’s focus is on the Indonesian market, and 99% of our product range is produced in Indonesia. A small portion of our products is exported, mainly to countries in Asia and Africa. We source products from Asia, Africa and Latin America. (2.5)

In 2011, the company booked Rp23.5 trillion in net sales, a growth of 19.2% compared to 2010. In 2012 net sales amounted to Rp27.3 trillion.

In 2011, the company had Rp10,482 billion in assets, with Rp6,801 billion in liabilities and Rp3,677 billion in equity. In 2012, the company had Rp11,984 billion in assets, with Rp 8,016 billion in liabilities and Rp3,968 billion in equity. (2.8)

SUBANg

JAKARTAHead Office

RUNgKUT fACTORIES

Indonesia consists of 18,000 islands

CIKARANg fACTORIES

Locations of Our Factories

JAVA

KALIMANTAN

SUMATERA


ThE MISSION Of OUR BRANDSAll of our brands play an important role in the daily life of people and in their health and well-being. They also use considerable natural resources. All of our brands therefore have a mission aimed at maximizing positive impacts on people’s lives and communities, whilst minimizing any negative impacts on our environment. The missions of our brands are an integral part of our sustainability policy.

With a strong presence in the market and our close relationship with consumers across the country, Unilever Indonesia is ideally positioned to deliver messages and promote actions that contribute to a healthier, more fulfilling lifestyle. Using our best-known brands as a banner for such initiatives allows them to be more readily embraced by consumers and customers, and enables us to make an impact on issues that affect society as a whole. Our brands’ social missions can be divided into two broad groups: Health, hygiene & beauty, and Nutrition.

Promoting good hygiene is an overriding priority for the country. The simple measure of proper hand washing with soap at key times could help to prevent diarrhea and other infectious diseases that cause thousands of

ABOUT US

preventable deaths, particularly among children, every year. This is why, through our Lifebuoy and Pepsodent social missions, we are working with primary schools, early childhood programmes and maternal and child health clinics to educate communities and embed good hygiene habits at an early age.

Nutrition is one of the most important factors in ensuring the healthy mental and physical development of young children. As millions of people nationwide enjoy our foods and drinks, we have an excellent opportunity, through our brands, to help people understand the nutritional benefits of our products and how to ensure they and their families have a balanced diet with all the nutrients they need.

Pureit is a brand that has an environmental mission as well as health and nutritional benefits. Pureit is an affordable household water purification system that effectively removes all harmful bacteria, pesticides and parasites from tap water, leaving it safe to drink without the need to boil it. Using a simple carbon filtration system, Pureit needs neither gas nor electricity.


BRAND MISSION

Bango Preserving the culinary heritage of the Archipelago and enhancing the livelihood of black soy bean farmers

Blue Band Every child has the right to good nutrition

SariWangi Inviting Indonesian women to communicate openly and equally with their partners through quality tea moments

Sunsilk Inspiring Indonesian women to discover their natures and strengths to give the best for themselves and to benefi t the people around them, and inspiring drop-out teenage girls to unleash their potential to be independent and enjoy the same opportunity as their fortunate peers who continue schooling

Dove Making women feel beautiful every day

Lifebuoy Making 220 million Indonesians feel safe and secure by improving their health and hygiene needs

Citra Empowering Indonesian women

Molto Ultra Sekali Bilas

Encouraging Indonesian families to shift their paradigm of water use, to conserve energy and save the environment

Pepsodent Improving people’s oral health so that they can better enjoy their life

Rinso Helping Indonesian children learn and develop by encouraging them the freedom to experience life without fear of getting dirty

Sunlight Empowering Indonesian women to contribute more to their family and community, by equipping them with a series of useful trainings and workshops that enrich their knowledge and skills


SUSTAINABILITY gOvERNANCE

Sustainability Strategy and governance

PT Unilever Indonesia, Tbk as a subsidiary of Unilever group, is a private company in Indonesia and is listed on the Indonesian Stock Exchange. It is our responsibility as the company’s second largest operation worldwide to develop


structures that ensure transparent management, accountability and best governance practices in all the bodies that are responsible for local management of the business. (2.1, 2.6)


vISION, vALUES AND pRINCIpLES (4.8)Because Unilever’s products touch the lives of around 2 billion people world wide, the company has set a vision and values to sustain its existence. Unilever has paved a clear direction for where it wants to go and how it can be achieved it by following the four pillars of its vision which are: 1. Work to create a better future every day2. Help people to feel good, look good and get more out

of life with brands and services that are good for them and good for others

3. Inspire people to take small everyday actions that can add up to a big difference for the world.

4. Develop new ways of doing business with the aim of doubling the size of the company while reducing its environmental impact.

Unilever has formulated the Unilever Sustainable Living Plan, which includes specific sustainability commitments and targets for its global operations. At Unilever Indonesia, we aim to contribute our share to achieving these targets.


In order to succeed with the vision of Unilever we have also set our Purpose and Principles which can be looked at as our values. Our corporate purpose states that to succeed requires “the highest standards of corporate behaviour towards everyone we work with, the communities we interact with, and the environment on which we have an impact.”

OUR vALUES IntegrityWe are committed to integrity because it creates our reputation, so we never compromise on it. It defines how we behave, wherever we are. It guides us to do the right thing for the long-term success of Unilever.

RespectWe are committed to respect because people should be treated with dignity, honesty and fairness. We celebrate the diversity of people, and we respect people for who they are and what they bring.


ResponsibilityWe are committed to responsibility because we want to take care of our consumers, customers and employees, as well as the environment and the communities in which we operate. We take this personally and always do what we say we will do.

pioneeringWe are committed to the pioneering spirit because it created us and still drives us as a business. It gives us the passion for winning and for creating a better future. It means that we are always willing to take intelligent risks.


CODE Of BUSINESS pRINCIpLES The main document for the orientation of both the personal and business conduct of our employees is the Code of Business Principles. The code sets forth principles of corporate behavior, incorporating values such as honesty, integrity, ethics, legal compliance and respect for human rights. It seeks to guarantee transparent communication and compliance in our operations and negotiations throughout the business chain. See the full text of our Code of Business Principles at http://www.unilever.co.id/aboutus/goodcorporategovernance/corporateethics/Index.aspx

WhISTLEBLOWER MEChANISMUnilever Indonesia has put in place a whistleblower mechanism for reporting any breach or suspected breach of the Code of Business Practice or any other ethics violations. Employees can report violations either directly to their line managers or to the Blue Umbrella team, which comprises of the Human Resources, Legal, Internal Audit and Communication departments and is headed by the Human Resources Director. Upon receiving a report, the Blue Umbrella team appoints and assigns a team to investigate the issue. Appropriate action will be taken in respect of any proven ethics violation. All such reports are recorded in a system that can be accessed by Unilever Regional and Global offices.


Unilever Indonesia is also a Indonesia Global Compact Network Signatory since 2009 and most of our Code of Business Principles are consistent with the UN Global Compact Principles. We report on these principles through our annual report and sustainability report. (4.12)

UNILEvER INDONESIA’ gOvERNANCE STRUCTUREUnilever Indonesia is governed by three principal organs – the General Meeting of Shareholders, the Board of Commissioners and the Board of Directors. They work together with various supporting bodies to implement good corporate governance in the company.

Our Board of Commissioners acts as an independent supervisory and monitoring body which oversees and supervises the Board of Directors in its management to ensure the long-term interests of the company. As prescribed in the Articles of Association, the Board of Commissioners exercises oversight through regular communication with the Board of Directors and the committees under its supervision in the form of reports and meetings, and advises the Board of Directors on management issues. The Board of Commissioners is accountable to the Annual General Meetings of Shareholders, which also has the authority to entrust the Board of Commissioners with other duties from time. The Board of Commissioners also considers the interests of our major stakeholders. Four of the five members of the Board of Commissioners are independent. There are no women in the Board of Commissioners at the moment. The Board of Commissioners receives regular reports from the Board of Directors and advises also on relevant matters as stipulated in the Articles of Association.

The Board of Directors consisting of ten directors, of which three are women, is responsible for the management of the company and for setting the strategic direction of the company, and for managing the company in line with the objectives of the company. The Board of Directors is also authorized to represent the company on any matter, including in a Court of Justice, to bind


the company to other parties and other parties to the company; and to perform any and all actions, pertaining both to management as well as other affairs, within the boundaries set by the Articles of Association.

In the Board of Directors, the Corporate Secretary plays a key role in communicating information and promoting transparent business activities and in ensuring compliance with the Company Law, the Articles of Association, capital market regulations and other statutory obligations. He also maintains communications with regulatory institutions on all governance matters, corporate actions and relevant material transactions. He provides up to date information about the company to shareholders, media, investors and the general public and attends alls Board meetings and records the minutes of the proceedings of the meetings. The Board of Directors reports directly to the Board of Commissioners.

ThE BOARD Of DIRECTORS AND BOARD Of COMMISSIONERS ARE SUppORTED BY vARIOUS OThER BODIESThis includes the Audit Committee, which works to control risk, maintain supervision and preserve accountability within the Company. It supports the oversight function of the Board of Commissioners by reviewing and providing assurance on the integrity of Unilever Indonesia’s financial statements, risk management and internal control, compliance with legal and regulatory requirements, the external auditor’s performance, qualifications and independence, and the implementation of the internal audit function. The Audit Committee consists of three members and is chaired by one of the Independent Commissioners. Members of the Audit Committee are appointed and dismissed by the Board of Commissioners and report to the General Meeting of Shareholders.

The procedure for the appointment of new directors and senior management personnel is formal and transparent. The Nomination and Remuneration Committee is responsible for succession planning


and for proposing candidates for membership of the Board of Commissioners, the Board of Directors, and/or various other Committees. The Committee evaluates candidates and makes recommendations to the Board. The Committee is also responsible for reviewing and formulating recommendations on the remuneration package for the BoC and BoD as appropriate to their rights and responsibilities. The Committee provides recommendations to the Shareholders for approval at the Annual Meeting of Shareholders. The Nomination and Remuneration Committee consists of the Chairman and one other member of the Board of Directors, and the Chairman of the Board of Commissioners.

The Annual General Meeting of Shareholders is the company’s highest governance body. It has the authority to appoint and terminate the Commissioners and Directors, and decides on other critical matters pertaining to the company’s business and operations including the amount of the Directors’ and Commissioners’ remuneration, the payment of dividends and distribution of profits, the approval of the Annual Report, the appointment of the independent auditor, amendments to the Articles of Association, and the delegation of authority to the Boards to follow up matters discussed and agreed at the Annual General Meeting of Shareholders.

Another key body is the Internal Audit Unit which is led by the Head of Internal Audit assisted by a number of internal auditors, and governed by the Internal Audit Charter. This charter specifies the structure of the Internal Audit Unit and outlines the duties and responsibilities of the internal auditors. The Internal Audit Unit is responsible for preparing an annual audit plan in consultation with the President Director and the Audit Committee, and is required to communicate frequently with the Board of Commissioners, Board of Directors and the Audit Committee on its execution. Upon the conclusion of each audit, the Internal Audit Unit produces a written report on the findings, conclusions and recommendations and presents a summary of the same to the President Director and the Board of

Commissioners. The Internal Audit Unit is responsible for following up the audits to ensure that management actions have been effectively implemented or that senior management has accepted the risk of not taking action. It also assists management to comply with the Sarbanes-Oxley Act, particularly section 404 for the purpose of the parent company’s reporting. Full responsibility for compliance remains with the management. The Internal Audit Unit also coordinates with the External Auditor on its audit of our financial statements. All members of the Internal Audit Unit agree to comply with Unilever’s Code of Business Principles. The External Auditor, which provides an independent audit of the Company’s financial statements, is appointed by the Board of Directors and Board of Commissioners at the recommendation of the Audit Committee. (4.1)

Upon election, the directors receive a comprehensive Manual and are briefed thoroughly on their responsibilities. Directors are expected to develop themselves and their skills in service of the company. (2.3) (4.1,4.2,4.3)

RISK MANAgEMENTThe Corporate Risk Management Committee assists the Board in ensuring that effective, up-to-date systems for risk management are in place. We have identified and assessed the risks relevant to our business. The most important of these are outlined below, together with the associated mitigation measures.

Operation Risk addresses our capability to secure timely and cost-effective supplies of production materials. With forward buying of traded commodities, we mitigate future price volatility of traded commodities. Contingency plans have been prepared to enable us to secure alternative key material supplies at short notice and to use substitute materials in ourproduct formulations and recipes.

Market Risk management monitors market trends and insights from consumers to anticipate the position of local and international competitors to capture a larger


share of the growing market in Indonesia. The company focuses on categories and products where the company or its parent have, or can build, a competitive advantage, and where sales and margins can be grown consistently.

People and talent management ensures that our company continues to attract, develop and retain talented employees. Resource Committees have been established in each of the divisions and functions. These Committees are responsible for identifying future skill and capability needs, defining career paths and professional training programmes, ensuring competitive pay in comparison to the market, as well as identifying key talent and future leaders. Surveys are conducted regularly to obtain feedback from the employees.

The risks reviewed by the Corporate Risk Management Committee include risks related to sustainability.

Our Board of Directors regularly meets with the representatives of our labour union to inform them about major decisions and developments that may have an important effect on our employees.


pUBLIC pOLICIESOur relations with government occur in two ways: through sector associations representing our personal care, home care and foods business or directly, in dialogues between the Unilever Indonesia management and public authorities. Our actions vary in accordance with the theme and its importance, but the majority of our participation is through sector associations such as the Association for Food and Beverage Products (Gabungan Pengusaha Makanan dan Minuman Indonesia - GAPMMI), Association of Priority Lane Companies (Asosiasi Perusahaan Jalur Prioritas - APJP), and the Association of Indonesian Cosmetic Industries (Persatuan Perusahaan Kosmetik Indonesia – PERKOSMI). (SO5, 4.13)

We also work in close relationship with the Indonesian Ministry of Trade and the Ministry of Industry in promoting local products by taking part in various exhibitions in the country. We have not received any financial support from any governmental agencies, nor do we offer any financial support to the Government or any political organizations. (SO6)


UNILEvER SUSTAINABLE LIvINg pLAN Over the last three years there has been a definitive change in Unilever’s approach to its business model and growth strategy. With the announcement of Unilever’s Sustainable Living Plan in 2010, we consolidated the vision that we can- and should grow business and our operations while reducing environmental impact. The Unilever Sustainable Living Plan encompasses action and projects with partners, employees and stakeholders in three areas: Improving Health and Well-Being, Reducing Environmental Impact and Enhancing Livelihoods. (see chart). Our ambition is to double the size of our business globally, whilst reducing our negative impacts and increasing our positive impacts in accordance with specific targets. More details on the USLP are provided on www.sustainable-living.unilever.com

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SUSTAINABILITY gOvERNANCEWith the introduction of the Unilever Sustainable Living Plan (USLP) in 2010 and the evolution of the company’s governance in sustainability, Unilever Indonesia needed to develop a team that would be responsible for the governance of sustainability and disseminating the Global Sustainable Living Plan throughout the company with the scale and complexity of the goals and targets, Unilever Indonesia established a special committee in 2011, the USLP Leadership Steering Team.

This is a cross functional committee comprising of eight leaders the Executive Board. The committee also develops local sustainability policies, oversees the Sustainability Compass, serves as a two way communication channel for sustainability related questions and develops a communication engagement plan aimed at the company’s stakeholders.


The implementation of the USLP and the achievement of the targets set for Indonesia, is managed by the USLP Leadership Steering Team, which is led directly by our CEO.

The governance of the USLP, including the management of the scorecard and the reporting on the progress towards achieving the objectives, will take place under the supervision of member of the Board of Directors, supported by the General Manager of the YUI. As head of sustainability for Indonesia, the General Manager supports the CEO in tracking and monitoring the USLP progress against the set targets.

The USLP objective of helping one billion people worldwide take action to improve their health and hygiene has been translated into the objective for Indonesia to reach 100 million people through our Lifebuoy-programme. This target is owned by the brands, supported by other divisions, including Health pillar under Unilever Indonesia Foundation.

Consumer mobilization in management of post-use packaging waste will be supervised by Board of Director-member, supported by YUI Environment Program Manager. The objective for Indonesia is to recycle 1000 tons per year through the Waste Banks linked to our home care brands.

The reduction targets for water, waste, energy and greenhouse gases in our manufacturing operations as well as finding solutions to flexible waste and recovering energy from post consumption waste, will be supervised by the member of the Board of Directors referred to above.

Sustainable sourcing of palm oil and soy beans will take place under the supervision of the member of the Board of Directors, supported by all relevant divisions, including Unilever’s Supply Management Team.

Creating a better work place, with health care and reductions of energy consumption and waste in offices and travel will take place under the responsibility of the member of the Board of Directors, and translated into campaigns and programs that is managed by relevant divisions, such as communications and HRD.


The programs aimed at Enhancing Livelihoods, such as the partnership with the black soybean farmers managed by the collaboration of Enhancing Livelihood Pillar and Supply Management Division that report to the member of the Board of Directors. More details on our activities that are related to the Unilever Sustainable Living Plan are given elsewhere in this Sustainability Report.

hEALTh SAfETY AND ENvIRONMENTSustainability is one of the pillars of the CSHEC (Central Safety, Health and Environment Committee) that consists of members of the Board of Directors. Every Director will supervise a DSHEC (Divisional SHE Committee) that has General Managers as member. The General Manager of every factory will supervise the USHEC (Unit SHE Committee) that coordinates safety health and environment (SHE) activities in factory.The SHE committee monitors:•PRPS(Policy,Rules,ProceduresandStandards)•EmergencyPreparednessandResponses•EnvironmentandSustainability•Travel/RoadSafety•HealthandOfficeSafety•BusinessPartnerandContractorSafety•SafetyBeyondWorkplace.

SUSTAINABILITY pRACTICESOur sustainability strategy touches all aspects of our operations and every stage in the lifecycle of our products, with innovation and technology playing a central role. It also shapes the way we engage with our stakeholders through community development programmes and brand social missions, which are our vehicles for promoting economic empowerment and motivating consumers to adopt more sustainable ways of living and consuming. Using the power of our brands, Unilever Indonesia is empowering people to take small actions that, together, have a big impact and take us closer to the Unilever Sustainability Living Plan targets.

To disseminate and execute our sustainable practices throughout the value chain, Unilever seeks to develop responsible commercial partnerships, promote health


and well being of communities and encourage conscious consumption among its consumers . We implement various actions focused on our strategic stakeholders, such as the Sustainable Sourcing Programme , which improves our monitoring of good practices throughout our supply chain. With our customers we further develop the agenda of reducing our environmental impacts, such as waste management and greenhouse gas emissions, as directed by the Unilever Sustainable Living Plan. Although we have room to improve in engaging our value chain, the importance of the Unilever Sustainable Living Plan’s directions has increased as our business expands.

pROCUREMENTOur procurement practices are guided by the Unilever Business Partner Code and the Sustainable Agriculture Code (SAC). The Business Partner Code is designed to ensure fair working conditions throughout the supply chain, including respect for human rights, freedom of association, avoidance of child labour and force labour and wage systems and working hours that are compliant with Indonesian law. We also seek assurance that our suppliers meet our health, safety, and environmental protection standards. The SAC is aimed at encouraging our suppliers and farmers to adopt farming sustainable practices. Our policy on sourcing raw materials prioritizes local sources where feasible. All prospective suppliers undergo an audit of their reliability and quality management, and their performance on environment, human rights, and other social issues is screened according to the Codes above. (HR2, HR5, HR6)

COMpLIANCE, ANTI TRUST, AND CORRUpTIONUnilever Indonesia applies the highest possible standards with regard to corruption, ethical business, anti-competitive behavior and compliance with the law and international business principles, such as the OECD Guidelines for Multinational Enterprises. These standards are included in our Code of Business Principles (CoBP), which is actively and rigorously applied throughout our organization under the direct supervision of our Board of Directors. (4.12)

In the reporting period, no significant fines or non-monetary sanctions were imposed upon our company for any non-compliance with laws and regulations. (SO8)

Our company was not involved in any legal cases in relation to anti-competitive behavior, anti-trust and monopoly practices or any other issues covered in our Code of Business Principles or compliance with the law in 2011 and 2012, and no cases are pending. (SO7)In the reporting period, we analyzed a number of our business units for the risks related to corruption. These business units were procurement, marketing,external affairs, community development.No instances of corruption were found. (SO2) No employees were dismissed and no contracts with business partners were discontinued due to violations related to corruption. (SO4) In the reporting period, we trained 2,750 of our employees, both management and non-management staff, in our company’s anti-corruption policies and procedures. This represents 41% of our management and non-management staff. (SO3)


ThE BUSINESS CASE fOR ACTION

The Sustainability Challenges and how We Deal With ThemThe world faces a number of sustainability challenges that require immediate and decisive action. A growing population is putting increasing pressure on the earth’s resources, leading to higher food prices, local shortages, loss of biodiversity and climate change. Millions of children in developing countries die


of waterborne diseases and the percentage of the world’s population suffering from lifestyle diseases such as diabetes and obesity is also on the rise. Growing income inequality poses a threat to social coherence.


All companies are affected by these developments and companies need to be part of the solution for the sustainability issues.

As is the case for any company, sustainability issues present both a challenge and an opportunity for Unilever Indonesia. Our company is among Indonesia’s largest companies, Indonesia’s largest buyers of agricultural products, Indonesia’s largest advertisers and Indonesia’s largest providers of daily used packaged food and personal and home care products. This means that our most important sustainability impacts are in the following areas:

1) Sourcing of our agricultural products. We procure large amounts of palm oil, black soybeans, and tea and smaller amounts of coconut sugar, fruit and other agricultural commodities. We seek to minimize the impact of the production of these communities on the use of water, land, natural environments, and related

greenhouse gas emissions, as well as to improve the livelihood of farming communities. The loss of natural rainforest cover in Indonesia and other forms of land degradation, and the related increase in greenhouse gas emissions pose a threat to both Indonesia’s and the world’s environment. Unsustainable use of agricultural land will also have negative effects on agricultural production, as land degrades and farmers seek other means of subsistence.


Unilever has set worldwide targets to ensure that all the important agricultural products its uses comply with international sustainability standards, and we are well on track to achieving these targets ahead of schedule in Indonesia. We are also working closely with a growing number of farmer groups to increase the quality, yield, prices and income. This is helping us to strengthen our bonds with our agricultural suppliers, and with consumers;

2) The use of water and energy in our eight factories and the use of fossil fuels in the transportation of our inputs and finished products is another area of sustainability issues that we actively manage. The availability of water is under serious threat in major urban and industrial areas in Indonesia. If not all users of water take their responsibility to minimize the use of water and to maximize the treatment of water after use, this may cause shortages of water in cities and industrial parks, which could also affect Unilever’s production facilities in coming years.

Unilever Indonesia applies water saving and water treatment equipment in all its plants.


3) The use of water and energy related to the consumption of our products

Much of the ecological footprint of our product cycles consists of the water and energy used by our consumers when they use our products. Our company therefore invests substantially in product innovations that reduce the need for water and energy use when consuming our products.

4) The post-consumption packaging waste is a major problem in Indonesia, for which we are taking our share of responsibility. The amount of plastic and other non-degradable waste from consumer goods that pollutes the environment in Indonesia is still growing with the fast growing consumption. Non-degradable waste in the environment contributes to the poisoning of soil and to flooding problems, which also carries reputational risks for companies like Unilever.

Unilever has carried our programs to clean up cities in its green and clean programs, and has provided intensive assistance to waste recycling programs such as Trashion and waste banks. Unilever is also actively searching bio-degradable and affordable alternatives for small sachets.

Possible future sustainability issues for Indonesia in our market segments that are anticipating include plastic micro bead pollution and lifestyle diseases. (1.2)


ThE BUSINESS CASE fOR ACTIONAt Unilever we believe that sustainability and business development can and must reinforce each other. As a Company, we will be affected by the sustainability issues set out above if we do not address them adequately. At the same time the issues provide us with opportunities. Savings in energy, raw materials and packaging reduce our cost. Our product and packaging innovations create more valuable products at competitive levels. Our stronger bonds with more prosperous farming communities help us ensure a stable and high quality supply of agricultural inputs.

Consumers, also in Indonesia, increasingly prefer products that have been produced responsibly and retailers have incorporated sustainability standards into their supplier selection. A growing number of talented people choose to work for responsible companies.

YAYASAN UNILEvER INDONESIAThe Unilever Indonesian Foundation (Yayasan Unilever Indonesia, YUI) bridges business expertise and the community potential to create mutual benefit amongst the stakeholders involved. The YUI is now active in important areas, such as on Java, Sumatra, Kalimantan, Sulawesi, Bali and Nusa Tenggara Timur. The YUI plays an important role in meeting our sustainability targets, which are geared towards reducing our environmental footprint whilst doubling the size of our business worldwide. Much of the work of the YUI helps farmers and our other business partners cope with the volatilities in commodity markets and with natural disasters. All this contributes significantly to our global aim of bringing a better life more than a billion people on the planet by 2020.


IMpROvINg hEALTh AND WELL-BEINg

At least one Unilever is used in all of Indonesian households. This highlights the importance of our business for the dissemination of products and consumption habits that favour the growth, development and well-being of communities. Improving health and well-being is one of the pillars of our USLP.



OUR AppROAChIn the implementation of health and well-being improvement programs, Unilever through its brands conducts an integrative approach which includes:

• Creatingacampaignaroundpositivebehaviourchange,made popular through awareness-raising press conferences, press photo competitions, TV commercials, and printed advertisement;

• On-ground engagement utilising community institutions, such as schools and women’s informal groups, and deploying the “Train the Trainers”-program and establishment of support from multi stakeholders at local level, to achieve a multiplier effect;

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• Establishing,utilisingandrecognisingpeereducators;• Partneringwithlocalgovernmentinsupportinga

mutually beneficial agenda;• Gettingdeeperintocommunityinvolvementand

identifying community-level opportunities to support the health and well-being initiative.

National Oral Health Month


The elaboration of the programs conducted in this area is as follows:

Hand washing campaign through the Power of 5 and Lifebuoy Berbagi SehatEvery year, diarrhoea and pneumonia claim the lives of over two million children under five worldwide. Yet studies show that washing hands with soap can significantly reduce the incidence of these diseases. In making this a lasting impact we need to encourage people to change their everyday habits, like washing hands with soap before eating and after going to the toilet. These are simple matters which are usually neglected but do have significant impacts. Many Unilever brands offer hygiene benefits.

Indonesian families are aware of the importance of hand washing with soap. It is being practiced in general, but has not yet transformed into real lasting healthy habits. In 2010, the percentage of households that has fully adopted a healthy way of living (Pola Hidup Bersih dan Sehat or PHBS) was only 35.8%, and the national average percentage of proper hand washing with soap was only 24.5%. In 2011 and 2012, the Lifebuoy hand washing program was continued in collaboration with a local NGO and the government.


The focus of the campaigns has been on children at primary school age (6-12 years old) to ensure that these habits will last a lifetime. The methodology used to determine the change of habits is by developing a 21-day movement which includes keeping an actual track of each day, when a person washes his hands and brushes his teeth. According to studies, doing something for 21 straight days can develop a habit. To make the program cost effective and scalable, Unilever Indonesia partners with the Indonesian government and NGOs. By having close relationship with national and local governments in Indonesia, we are able to create a multiplier effect. With this, the success of the program can be replicated in other regions.

Unilever through its Lifebuoy brand trains teachers to deliver the hand washing behaviour change programme and provides materials and toolkits that they need. Each teacher can cascade the programme to an additional three schools, through a “Train the Trainer”-model to create a multiplier effect.

The cooperation between NGO-partners provides coaching, monitoring and evaluation.

Lifebuoy Berbagi Sehat


The partnership approach, involving government, schools, teachers and NGOs, has enabled Lifebuoy to reduce the overall costs of the programme, thereby increasing the ability to take it to scale.

Our Cuci Tangan Pakai Sabun (hand washing with soap) program now has more than 50,000 Little Doctors in more than 4,000 schools. It has reached more than 4 million people by the end of 2012, involving 4,418 primary schools with 951,685 students of which 18,565 Little Doctors. On average, there is an improved practice of hand washing with soap by 20% in assisted primary schools. In total, the program has been able to reach 1,404,000 and 4,958,000 in 2011 and 2012 respectively.

The Little Doctors have been playing a major role in peer to peer education amongst school children. A national competition to award the Little Doctor with the most outstanding performance was conducted under the partnership of Lifebuoy and Indonesian Doctor Association on an annual basis.

Brushing Day and NightOur toothpastes play an important role in preventing tooth decay which is one of the world’s most common diseases and can lead to more serious health conditions. A simple practice of brushing twice a day can make a big difference to oral health.

The brand social mission of Pepsodent in Indonesia is to improve the quality of oral health and to reduce the occurrence of cavity, caries and bleeding gums. It has been triggered by the fact that despite the high penetration of toothpaste and high occurrence of tooth brushing, there is still a big lack of awareness and practise of, both in awareness and practice of oral hygiene and health among Indonesian consumers.The basic health research (Riskesdas 2007) reveals that 72.1% of Indonesian population suffer from caries. In 2012, 23.4% of the population experienced oral health problems, however only 29.6% of them seek help from a dentist for further examination. Besides, while 91.1% of the Indonesian population brush their teeth every

day, only 7.3% brush their teeth at proper times, which are after breakfast and before going to bed. In other words, oral health awareness and people’s willingness to prioritise oral health is still low. It creates a good ground for Pepsodent to make a positive contribution. Pepsodent’s national movement umbrella of “Gosok Gigi Pagi dan Malam”” continues to reach growing a number of beneficiaries. Through this national movement, Pepsodent, in collaboration with the Indonesian Dentists Association (PDGI) and the Association of Dentistry Faculties (AFDOKGI), pioneered National Oral Health Month in July 2010. Through an integrated preventive-curative approach, the program aims to continuously promote the importance of oral health through an education program, and free dental check-ups in the universities. During 2011 and 2012, not less than 1.8 million students in 8,418 primary schools were educated.

Safe Drinking WaterPoor hygiene and sanitation remain the cause of millions of preventable deaths. In developing countries around 80% of the diseases are waterborne. According to UN estimates, over 2 billion people have limited access to safe drinking water. Of these, nearly 800 million lack even the most basic supply of clean water. This is a major public issue.

One main target of the USLP is related to the quality of water consumed by the world’s population. Unilever’s global target is to make drinking water available to 500 million people by 2020. In order to achieve this, Unilever Indonesia will intensify the promotion of the water purifier Pureit, which was initiated in 2008 (FP4). Pureit, which is our in-home water purifier, provides water ‘as safe as boiled’ without the need for electricity and at a price that is more affordable than boiling water. Launched first in India where the issue of water quality is critical, the main advantage of the product is that it purifies water completely, eliminating 99.9% of viruses, bacteria and parasites as well as hormones and heavy metals by means of filtration and chlorination.


We launched Pureit in Indonesia in 2010, underscoring the multiple benefits offered and emphasizing the fact that there is no use of gas or electricity to have safe drinking water. As with Lifebuoy, we seek to associate Pureit sales with initiatives driving improved living standards for underprivileged sections of the society.

Integrated Health Promotion Programme (IHPP)The hygiene education programme did not stop at promoting washing hands, brushing teeth and providing solutions for safe drinking water, but developed into an Integrated Health Promotion Programme (IHPP) with its first initiation in 2005 in Yogyakarta.

The IHPP creates awareness of healthy lifestyles by channelling similar approaches and partnerships through the following activities and goes deeper into the community in the local areas:

a. School Health & Hygiene Program This program targets the school-going children with

the hygiene education through hand washing with soap and brushing at proper times.

b. Kid’s Program The program was implemented in four districts in the

province of East Java. It involved 640 trained mothers and cadres with the objective to improve the growth and development of 17.000 children under the age of five. Mothers and cadres are educated to understand better the importance of applying a healthy life style and providing a balanced nutritious diet to their children.

c. Healthy Market Program In 2012, the Unilever Indonesia Foundation together with

local partners in DI Yogyakarta and East Java started to focus their efforts and resources on strengthening traditional markets to become Healthy Markets.


Two traditional markets in Yogyakarta and two in East Java were transformed into Healthy Markets through intensive facilitated interaction. Around 1,430 agents of change are recruited among the 7,405 vendors who are volunteers themselves to support the socialization of healthy life style knowledge and supervise their peers to practice more frequently the simple habit of hand washing with soap and tooth brushing after breakfast and before night sleep. Altogether 11,882 sellers in the Yogyakarta area and East Java were educated in the past three years. Public sanitation facilities in the markets are improved and function better to offer a comprehensive comfort and cleanliness. Vendors were also trained by our sales teams in marketing strategy, simple financial management and product knowledge.

Other than that, vendors were also trained on safety

and security, so visitors will have a comfortable and safe shopping experience at the traditional markets.

d. Healthy Village Program In 2012 the program was implemented in 49 villages

in DI Yogyakarta, East Java and on Sumba. The program has involved 148,685 community members to take active action in making themselves healthier through the creation of a better living environment and regular practices of basic health hand washing with soap and tooth brushing at proper times. This program has empowered 848 community members to become health cadres and play an important role as agents of change.

e. youth Health Program In 2012, the program educated around 69,275 junior

and high school students in 9 districts in North Sumatra, East Java and Bali with support from 15,948 Youth Health Ambassadors. The Health Ambassadors were selected from selected students that were empowered through a series of trainings on public speaking, reproductive health, HIV/AIDS prevention and personal hygiene. The ambassadors then were


challenged to approach as many peers as possible and facilitated them to get better understanding of youth health and practice healthy habits. During the celebration of International AIDS Day on 1 December, the ambassadors with best performance were granted with awards. Other than that, Unilever Indonesia Foundation supported by local partners conducted competitions on photo making, poster development and article writing. The support came from national and local commissions of AIDS, Paramadina University and the Ministry of Women Empowerment.

NUTRITION ENhANCEMENT pROgRAMME (NEp)In our Nutrition Enhancement Programme (NEP) we are undertaking a range of initiatives aimed at improving nutrition in different target groups.

Unilever engaged with the United Nations World Food Programme (UNWFP) through a USD 50 million commitment together with other partners such as Kraft Foods, DSM, and GAIN (Global Alliance for Improved Nutrition) to deliver the first Millennium Development Goal of “Eradicating poverty and hunger” by rolling out Project Laser Beam, a holistic approach to combat malnutrition.

Project Laser Beam breaks the ground in three ways, by:• Embracingamulti-stakeholdermodeltoensure

activities are the most appropriate for the local situation• Encompassingaholisticapproachtonutritionwith

focus on food, health and hygiene• Creatinganewmodelforpublic-privatepartnerships

that is scalable, replicable and sustainable for use in other countries around the world.

Project Laser Beam is truly unique in its holistic approach aiming to eradicate child hunger. As the name suggests, the project is about a ‘laser beam’ sharp focus on one geographic area at a time to maximize the impact where it is needed most. Bangladesh and Indonesia are the chosen focus areas. Both countries together account for almost a quarter (24%) of the world‘s malnourished children under five years of age. The main aim of Project Laser Beam is to reach out to more than 2 million people in both countries to eradicate hunger with the following steps:

• Improvethenutritionofupto500,000children• Provideaccesstocleandrinkingwater,sanitationand

basic healthcare to communities • Reachmorethan1millionpeoplewithlifechanging

hygiene trainings in schools and amongst communities• Enhancethelivelihoodsof3,000womeninultra-

poor households.

For Indonesia, Unilever Indonesia has targeted to reach at least 20.000 students with nutritious school meals in East Nusa Tenggara (NTT). At the end of the period of this report, we have reached around 10,250 students in 41 primary schools. This program has been conducted between Unilever Indonesia and the UNWFP. (FP6)

We want our business to be part of the solution to the issue of nutrition that Indonesia and the world are facing; and with that in mind, Unilever has been developing a Nutritional Enhancement Programme to improve the nutritional profile of our foods products.

In 2012, YUI continued supporting the Project Laser Beam. In April 2012, YUI participated in partners’ workshops and in the production of a film on the UNWFP School Meal Programme in the Timor Tengah Selatan District of NTT. The film supported fund raising activity


conducted by a Netherlands-based food manufacturer from which funding was channelled to the UNWFP school meal program. Another workshop was held on behavioural change communication and the importance of micro nutrition to improve the quality of food intake among primary school students.

YUI in collaboration with its local partner conducted health, hygiene and nutrition education in 30 primary schools in the Kupang District in collaboration with the PKK, reaching around 5,266 primary school students. Targeted to the mothers, similar education was also conducted through 30 community health centres or Posyandu in the district.


OUR gLOBAL NUTRITION TARgETS (FP4)

Besides the program with UNWFP we also seek to offer our consumers practical, nutritive products that meet their needs and address critical nutrition issues in Indonesia. The company’s Research and Development is in constant dialogue with the Nutrition area with the objective of aligning new and old products in the portfolio with consumer goods industry best practices.

Our global nutrition targets are:

• Removingtransfat:by2012,allourproductswillbe free of trans fat from partially hydrogenated vegetable oils

• Reducedsugar:wehavealreadyreducedthelevelsof sugar in our ready to drink teas. By 2020, we will reduce them by a further 25%

• Reducedcalories:by2014,100%ofouricecreamwill have 110 Kcal or less per serving. 60% of our production will achieve this target by 2012.

• Starting2013,wewilldoatleast5%reductionacrossthe whole renovation cycle, aiming for the WHO recommendation of 5g salt per day by 2020

To meet this global target, we continually work to improve the taste and nutritional quality of our products through innovation and reformulation guided by the highest internationally recognized dietary guidelines. With our product, we aim to make a difference to the quality of people’s diets, addressing both over and under nutrition.

100%of our children’s ice cream will have 110 Kcal or less per serving

in all of our product by 2012

0 trans fat


Remove trans fatWe have eliminated trans fat originating from partially hydrogenated vegetable oil from all Blue Bland variants and some of Knorr products aligned with our global target to remove any remaining trans fat from our products by 2012.

Reduce sugarWe have already reduced sugar level in our Buavita fruit juices and are committed to meet the highest nutritional standards, based on globally recommended dietary guidelines, with the introduction of our improved Buavita pack.

Reduce caloriesThe saturated fat, sugar and calories in children’s ice cream (Wall’s Paddle Pop) in Indonesia have been reduced and they contain 110 kilocalories or less portion as part of our work to meet a global target of 100% of our children’s ice cream containing 110 kilocalories or less by 2014.

Provide healthy eating informationIn 2012, we have implemented the information of 8 key nutrients and% Guideline Daily Amounts on the back pack on Buavita Royale and Grape, Blue Band Cake & Cookie, Food Solution with Bango 1.2 L, Bestfood Real Mayonnaise, Bestfood Mayo Magic, and Pfanni puree. Work in progress for the information of 8 key nutrients is currently being done in stages for other categories like beverages, spreads, savoury, ice cream and Unilever Food Solution product ranges to be in line with global target of providing healthy eating information by 2015.

Contributing to micronutrient intakesSome of our brands can play a role in tackling under nutrition, particularly micronutrient deficiencies, through food fortification. For example, Blue Band margarine is fortified with vitamins A, B1, B2, B3, D and E, a single portion provides more than 10% of the recommended daily allowance. (FP6)


REDUCINg ENvIRONMENTAL IMpACT



Due to the nature of our business, we leave environmental impacts throughout the value chain. Therefore we believe that a Sustainability Based Management system should be at the centre of our

strategies and operations. Our aim is to halve our environmental footprint while doubling our business. Reducing environmental impact is one of the pillars of our USLP.


MATERIALS UNIT 2011 2012

Agricultural commodities (000) ton 257 270

Chemical Products (000) ton 371 395

Packaging Materials - outer carton, tube, bottle, label (million) pcs 12,25 12,97

Packaging Materials - reel, pouch, sachets, tape (million) meter 2,39 2,74

Packaging Materials - shrink, wrapper, adhesive (000) kg 2,29 2,35

Others -Food Ingredients (000) ton 218 214

ENvIRONMENTAL MANAgEMENT IN OUR OpERATIONSWe have developed a management model of which the main reference is the priorities of the USLP, and other questions related to the environmental impact of our operations in Indonesia. Since the inception of the USLP, we have adapted priorities and strategies in Indonesia to meet the targets. At Unilever Indonesia we seek to reduce our environmental impact by monitoring and improving the efficiency of manufacturing and non-manufacturing operations and by developing projects and actions with business partners such as suppliers, customers and others.

One of our main challenges is reducing greenhouse gas emissions. While we have eco-efficiency measures in place, the monitoring of emissions throughout the supply chain – in particular at the product distribution stage- indicates that in addition to internal actions in the

Our most important materials in our production process are (EN1):

production area, we need to constantly engage with our suppliers and customers to develop viable solutions that will enable us to achieve our environmental targets.

The reported data on environment are audited by an independent auditor to certify the validity of the reported data. With regular (or constant) monitoring within every site in Unilever, performance of every parameter and every site in the world is monitored for benchmarking.

We are investing in a variety of technologies that advance environmental sustainability and will help us reduce the current environmental footprint of our operations. These specific investments have improved the efficiency of our facilities and reduced our need for electricity, fuels and water. We strive to comply with environmental laws and regulations while reducing our impact on the environment in our local communities by employing multiple resources, including water treatment systems, wastewater treatment systems and air emission controls. Each year, we invest significant capital in maintaining and improving these operations. In 2011 and 2012, we spent Rp 224 million for waste disposal, emission treatment, as well as prevention, protection and environmental management expenditures. (EN30)



Unilever Indonesia conducts continuous life-cycle risk assessment, internal auditing and detailed recording of environmental performance. This commitment goes beyond local and international regulations. During 2012, Unilever Indonesia did not incur any penalties for violations of environment-related laws and regulations. The Company complies with all significant environmental requirements under the Department of Environment’s regulatory framework. No significant fines or penalties were incurred for environmental non-compliance during the course of operations. (EN28) No significant spills took place in the reporting period. (EN23)

One of the most significant achievements in 2012 was the award of the Gold ‘PROPER’ rating for our Rungkut factory. The PROPER rating system is used by the Ministry of the Environment to assess companies’ environmental compliance and social responsibility performance; the Gold rating means that we have consistently demonstrated all-round environmental excellence, ethical business practices and social responsibility. Our Cikarang factory is currently rated ‘Green’; this is the second-highest grade, indicating that it has gone beyond compliance in terms of environmental performance, efficient resource use and social responsibility.

WATER Unilever considers the reduction of water consumption during the product lifecycle to be a priority in its global operations. Worldwide, we want to provide 50 million households in water-scarce countries, which includes Indonesia, with home care products that deliver excellent laundry cleaning but use less water by 2020. By 2015 we also want to reach 200 million consumers with products and tolls that will help them to use less water while washing and showering, and we want to double that amount in 2020 to 400 million. We will also develop comprehensive plans with our suppliers and partners to reduce the water used to grow our crops.

To achieve this, Unilever Indonesia has developed a strategy that combines eco-efficiency in our manufacturing and non-manufacturing activities (research and development, distribution, sales and offices) with innovation processes and incentives to drive the responsible use of water in the consumption phase of our products.

In our internal processes, both the manufacturing and non-manufacturing departments are engaged in initiatives aimed at reducing the volume of water used. The factories accounting for the largest part of the water consumption are the food plants, due to the significant volume of water in the products themselves and in the production processes which require constant cleaning to guarantee quality.


At Unilever Indonesia’s factories we do not source water from lakes, rivers or any other water bodies. All our water comes directly from the Industrial Park Water Supply companies in which we operate. (EN8)

We measure our usage for each factory and we are taking various measures to reduce our water consumption in our factories. The Home & Personal Care Liquid Factory saves 17,000 m3 of water every year through tap on valve, implementation of pigging system and rainwater harvesting. Between 25 and 30 m3 of effluents are recycled in the production process of our floor-cleaning product Superpell, and 100% of the effluents in the production process of our dish wash liquid Sunlight are recycled by pre-treatment in a neutralization tank. With pasteurization, 40% of the residues in the production

0 0

20000 1

10000 0.5

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60000 3

70000 3.5

80000 4

02 03 04 0605 07 08 09 1110 YTD

‘12W

ater

Con

sum

ptio

n (m

3)

water (m3)

water (m3/ton)

Wat

er C

ons

Load

(m3/

ton)

68.752 73.997 55.625 42.189 37.644 34.747 35.706 30.736 26.000 26.972 28.131

3.42 3.58 2.84 2.26 1.96 1.73 1.86 1.58 1.537 1.635 1.47

WATER CONSUMPTION AND WATER EFFICIENCY IN THE RUNGKUT FACTORY


process of our fabric softener Molto are being re-used. Water effluents from the waste water treatment plant (WWTP) in the ice cream factory are reused in the production process of the detergent factory and as cooling water in the cooling tower and condenser. Water that has been used in the pasteurization process in the ice cream factory is also re-used to rinse machineries, thus lowering fresh water consumption. With rain water harvesting for all factories, we managed to save 3434 m3 of water per year.

The total water consumption and the water use in m3 per tonne of production in our Rungkut factory developed as follows, since 2008.


Because our water comes from the Industrial Park Water Supply Company no waters are significantly affected by our withdrawal of water. (EN9)

All our waste water is discharged to the waste water treatment facilities in the industrial parks in which we are located. (EN21)

Among the different product categories, the greater proportion of our water footprint is related to home care products and fabric softeners used in washing clothes (38%), followed by the use of soap, bath gel and skin care products (37%). A significant part of the clothes washing impact is associated with manual washing, common in developing countries and higher than the impact from machine washing. To reduce the use of water for bathing, cleaning and washing with our products, we are developing products that help consumers change their habits in an easy and pleasant way. One example is the launching of our new innovative product “Molto One Rinse”. This product reduces the amount of water needed for laundry by two thirds.

Molto One RinseWater consumption is crucial in sustainability. Scarcity of clean water is considered a high risk for society. With this in mind Unilever has developed Molto One Rinse, our fabric softener product which reduces the amount of water used for rinsing after washing clothes to one bucket instead of three.

Water consumption is around 39 liters per day per household for bathing/toilet or 49.75% of water consumption, followed by laundry which uses an average of 20 liters per day per household or 23.82% of water consumption. Every family washes on average 1.9 kg of dirty clothes daily, with the majority of them rinsing the laundry up to three times. The total amount of water

used for rinsing is on average 10.75 liter water per kg of clothes. Assuming that the total number of families in Indonesia is 52,575,000, the total amount of water used can reach up to 1.17 billion cubic meters of water per day.

Since we launched this new product in 2010 we have been continuously educating consumers on water saving in their daily washing activity.

Molto One Rinse reduces the amount of water needed for laundry by two thirds. We are aiming to make an assessment of this effort in 2013 to determine whether we have developed an impact towards efficient use of water and water consumption. (EN26)

ENERgYAt our factories we use direct energy, which is Light Fuel Oil and Natural Gas, and indirect energy, which is electricity, for our production process. We are only using natural gas and light fuel oil in our direct energy consumption, and no other sources of direct energy.

We strive to reduce the use of light fuel oil, which emits a high volume of CO2, and to replace it with natural gas. (EN6)

Increases in direct and indirect energy consumption in 2011 and 2012 are due to increased production. We aim to increase our energy efficiency and have been able to reduce our direct energy use per tonne of production significantly since 2008. In 2011 we reduced the direct energy use per tonne of product by 10%. In 2012, we further reduce another 1% of 2011.


We have developed a comprehensive energy efficiency programme throughout our offices and factories in order to achieve more efficient levels of indirect energy consumption.

By making re-arrangements to the chiller in our skincare factory, we have managed to reduce the energy use by 38,800 GJ per year.

In our foods factory, we were able to reduce our energy use by 13% and our CO2-emissions by 10%, by using a boiler economizer and by having our energy use audited frequently.

A range of energy efficiency policies have been introduced, including (EN6, EN7):

• Maximisingnaturallightabsorptionandairflowwithceiling ventilators

• Reducingofficepaperconsumption• Encouragingtheuseofteleconferencingratherthan

travelling• Switchingoffunusedelectronicappliances• Usinglowenergylightbulbs• Applyingmotionsensorsintoiletsandfunctionrooms

to ensure lights are switched off• Pick-upservicesforemployeestoreduceCO2

emissions • EmissionschecksforvehiclesbelongingtoUnilever

Indonesia and our suppliers• Ensuringallsuppliers’vehiclesareincompliancewith

emission standards. • Encouragingforeign-basedsupplierstosetup

production in Indonesia to reduce the need for transportation

• Changesinairconditioningsystemsandelevatorsinoffices and substitutions of conventional light bulbs with LED models in offices and distribution centres

A set of targets have been developed against these initiatives, which are closely monitored to enable us to measure the impacts we make towards energy reduction.

With respect to energy from sources belonging to or controlled by Unilever, we also have been looking at increasing the proportion of renewable energy compared to non-renewable energy. In order to increase that proportion we are studying fuel substitution projects in the factories that use higher volumes of non-renewable energy. One example of the use of renewable energy is the use of a Solar Heater at our Personal Care factory which is aimed at heating water used for production. With this initiative we were able to save around 6.7 GJ of energy per day.

gREENhOUSE gAS EMISSIONS One of the targets of the Unilever Sustainable Living Plan is a reduction in worldwide greenhouse gas emissions from our factories by 2020 compared to the 2008 level. This represents a reduction of 63% per tonne production from a 1995 baseline. We also aim to double our use of renewable energy worldwide to 40% of our total energy requirement by 2020. All newly built factories are to have less than half the impact of current ones. In our global logistics network, we aim for a 40% improvement in CO2 efficiency by 2020.

Achieving these targets is a challenge and reducing these emissions throughout the cycle of our products is a strategic objective. A major source of greenhouse gas emissions is our energy consumption.



With the energy saving initiatives set out above, Unilever Indonesia has also been keeping track of the CO2 emissions of its factories. We have achieved a number of reductions of CO2 emissions in 2012 due to the implementation of the initiatives we have made. The CO2-emissions from our factories in kg per tonne of production in 2011 and 2012 is summarized below. Our CO2-emissions increased 110 mln kg in 2011 and 114 mln kg in 2012, due to our higher volume of production. Our CO2 emissions per tonne production increased was 2011 to 132 kg, but were reduced to 121 kg in 2012. (EN16)

Benchmarking with our global factories we have achieved a significant number of reductions. As can be seen in the chart below, compared to other sites, the Rungkut and Cikarang factories have low emissions of CO2.

Other than reducing emissions from direct energy use, we have also taken initiatives in reducing emissions by maximizing pack size of our products. This initiative has saved us around 500 tonnes of plastic per year which is equal to 3,000 tonnes saving of CO2 emissions per year. Another initiative we took at our production sites is the use of full recycled board for our toothpaste cartons which can save around 165 tonnes virgin pulp or around 4,400 trees a year. (EN18)

We are also replacing all ice cream cabinets that use ozone depleting CFCs with ice cream cabinets that use environmentally friendly hydrocarbons. (EN19)

WASTEGlobally, we want to reduce the weight of packaging that we use by a third by 2020. In partnership with governments and NGOs, we aim to increase recycling and recovery rates on average to 5% by 2015 and to 15% by 2020. We continue to make it easier for consumers to recycle our packaging by using materials that best fit the end-of-life treatment

facilities available. By 2020 we will increase the recycled material content in our packaging to the optimum level. We want to develop and implement a sustainable business model for handling our sachet waste streams by 2015. All PVC should be eliminated from our packaging by 2012, where technical solutions exist.

In accordance with the USLP, Unilever Indonesia takes a comprehensive life-cycle approach to waste management, applying the principle of Re-use, Reduce, Recycle and Eliminate. This approach covers waste generation throughout the value chain, ranging from products and packaging to our operations in the country and the management of waste after the consumption of our products.

We focus on reducing the waste generated in the factories and in packaging production processes as well as on improving the disposal of packaging and containers through re-using and recycling. We seek to reduce the impact caused by the business by increasing the volume of material recycled and minimizing disposal in landfills or by incineration.

We continue our efforts to decrease the volume of waste generated per tonne of production and have managed to cut it by 50% since 2009. In 2011 we reduced the amount of waste to 26.2 kg per tonne, of which 78.7% was recycled. In 2012 we reduced the amount of waste further to 23.5 kg per tonne, of which 77.6% was recycled. (EN2) Our non-recycled non-hazardous waste is sent to a certified processing company to be used as landfill or incineration. (EN22)


In our foods factory, we apply general waste segregation. Plastic and paper are recycled, tea is recycled for composting, disposable oil rags have been replaced by reusable oil rags. All of these project measures combined reduced the total waste in our food factory by 41.86%. (EN22)

At the Rungkut plant, the spirit of 3R (Reduce, Reuse and Recycle) has been implemented in the factory waste management.

ReduceThe Packaging Development Team continuously works on finding environmentally friendly materials. One of the initiatives taken is the Bristol Project, in which it reduced the size of the toothpaste packaging. This initiative resulted in a saving of 1000 tonnes of paper per year and is more sustainable in terms of transport and storage. It has so far saved around 17000 trees.

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Non-hazardous waste (kg/tonne)

Recycled waste (kg/tonne)

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NON HAZARDOUS (NON-RECYCLED) AND RECYCLED WASTE AT ALL SITES TOTAL AND PER TONNE PRODUCTION

ReuseWe also reuse the packaging. The return rate of the packaging is around 80%.

RecycleWe recycle factory waste and we use recycled packaging.


Our generation of non-hazardous (non-recycled) and recycled waste in total and in kg per tonne of production is summarized below:


hAZARDOUS WASTE Hazardous Waste is defined in accordance with the standard of the Ministry of Environment, and for our company includes waste such as laboratory chemicals, medical waste and asbestos. We have been able to reduce our total generation of hazardous waste from 821,000 kg in 2011 to 550,000 kg in 2012, and the average generation of hazardous waste per tonne production from 0.979 kg to 0.582 kg.

The volume of hazardous waste and hazardous waste per kg production in our factories is shown in the following chart.

Our hazardous waste is sent to a certified hazardous waste processing company for incineration. Laboratorium waste is segregated and undergoes bacterial treatment in the WWTP. (EN24)

pOST CONSUMER pACKAgINg WASTE In realizing the USLP’s target to halve our waste by 2020, Unilever is pursuing some groundbreaking and innovative solutions on waste recycling and waste conversion. Based on the study by the University of Indonesia in 2012, the total amount of post-consumer packaging waste contributed by Unilever in Indonesia reaches up to 180,000 ton per year, consisting of primary and secondary packaging. Only 28% of our primary packaging is being recycled though recycling plants and waste collectors. To increase this recycling rate, we need an effective solution that will efficiently process waste in a large-scale. (EN7)

In addition to the USLP target, Unilever is also aware of its Extended Producer’s Responsibility (EPR), which has also been discussed within the Government of Indonesia

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Total Hazardous waste (kg) Total Hazardous waste (kg/tonne)

HAZARDOUS WASTE GENERATION IN 2011 AND 2012, TOTAL AND PER TONNE OF PRODUCTION

10

2345

678

09 10 11 1209 10 11 12

as a possible government policy. The concept of EPR is defined as “an environmental protection strategy to reach the objective of decreasing the total environmental impact of a product, by making the manufacturer of the product responsible for the entire life-cycle of the product and especially for the take-back, recycling and final disposal.” (Thomas Lindhqvist in a 1990 report to the Swedish Ministry of the Environment)

To comply with EPR, particularly on the take-back, recycling and disposal of products, and to meet our USLP objective, we have been exploring two groundbreaking technologies. The first is a plastic recycling technology for the flexible packaging waste. Currently, flexible packaging waste such as laminated pouches and metalized sachets, cannot be recycled effectively and also have little value in the waste collection market, hence they are not being collected by waste collectors and scavengers. With many of Unilever’s products being packaged in flexible packaging, our EPR includes this flexible waste. To solve this, Unilever is conducting


various studies on plastic recycling technology which aims to break down flexible waste and turn it into factory-grade plastic pellets. This preliminary study will determine the feasibility of the technology to be implemented in Indonesia. We will further examine the results to pursue this technology.

As one of our multiple strategies to reduce our environmental impact through reducing post-consumer packaging waste in the environment, Unilever has started the first non-profit coalition for sustainable packaging with five other multinational and national Fast Moving Consumer Goods companies in Indonesia. Started in 2011, this collaboration, which has been named “Coalition for Sustainable Packaging (CSP)”, aims to leverage the efforts of each individual company to better achieve the common vision of reducing post-consumer packaging waste in Indonesia. Modeled after success stories in Thailand and Brazil, CSP harmonizes the common vision of the member companies while multiplying the impact by collaboration on resources, expertise and funding.

The vision of the CSP is to become the Best Practice in post-consumer packaging waste management that is integrated and sustainably implemented by CSP members. The missions of CSP are: (i) improve management of post-consumer packaging waste, (ii) increase awareness of stakeholders on the importance of managing post-consumer packaging waste and methods to manage waste, (iii) promote the collaboration of CSP, and (iv) perform collective advocacy for policies regarding post-consumer waste.

Since 2011, members of the CSP have conducted a series of workshops and meetings to discuss not only the working agreement of the coalition, but also on topics relating to post consumer packaging waste. These meetings were highly resourceful as members share

The second technology that we are exploring is the conversion of municipal solid waste through waste-to-energy approach. We are planning to conduct further studies on the technical and commercial feasibility of this technology. Best practices of similar technology in other countries have shown the possibility of effectively taking in hundreds of tons of waste per day. We believe further study on the technology is required to confirm the potential for success.

inside knowledge on their respective waste management and Corporate Social Responsibility programmes. Members shared their experiences in managing their own waste, from calculating Recycling Rate Index to establishing community programmes such as waste banks and creative waste-based economy. Government policies on Corporate Social Responsibility and Extended Producers Responsibility were also discussed, taking into account critical inputs from each member. Experts on environment and waste from the private and public sector were also invited to share their knowledge.

Currently, Unilever with the other five companies are in the process of finalizing the MoU which will provide the legal foundation and working framework ahead. A series of workshops and meetings have been conducted throughout 2011 and 2012 to finalize the agreements. Upon signing of the agreement, CSP aims to start planning and implementing the waste collection and waste reduction programmes by 2013. As one of the drivers of CSP, Unilever is committed to take CSP forward and demonstrate a successful method to reduce its environmental impact by collaborating with likeminded companies.

COALITION fOR SUSTAINABLE pACKAgINg (CSp)



EffLUENTSWe are aware that the use of water and wastewater generation in our food production processes is significant. It is a main challenge to drive continuous improvement, particularly in the treatment of liquid effluents. We do not discharge our effluents directly into water bodies but distribute them to water reservoir facilities such as the Jababeka Water Treatment Facility and the Rungkut Industrial Park Water treatment facility. By utilizing effluents from the boilers and cooling tower our Waste Water Treatment Plant in Rungkut has reached an absolute zero-level effluent discharge. We are monitoring the quality of our wastewater by measuring the chemical oxygen demand (COD). The COD-emissions has been decreased over the period of 2009 to 2011, from 0.9 kg per tonne to 0.4 kg per tonne.a.However there is a spike in COD-emissions in 2012 to 0.65 kg per tonne due to increase of production in the home and personal care factory, with the same capacity of the WWTP. The WWTP improvement just finished in the end of the third quarter of 2012 and is now already giving significant reductions of COD. (EN21)

SOx EMISSIONS The initiatives we have conducted since 2010, converting from light fuel oil to natural gas, have reduced our SOx emissions per tonne of product significantly, to 0.014 kg per tonne in 2011 and 0.0068 in 2012. For instance, by converting from fuel to gas for the boiler in our foods factory, we managed to reduce the SOx –emissions in kg per ton finished product by 59.5%. Our target is to reduce our SOx emissions further to 0.0023 kg per tonne production in 2017. We do not emit NOx.

Compared to Unilever manufacturing sites in other countries, our Rungkut and Cikarang factories have among the lowest SOx emissions. (EN20)

58 ENhANCINg LIvELIhOODSSUSTAINABILITy REPORT 2011-2012

PT UNILEVER INDONESIA TBK

ENhANCINg LIvELIhOODS

Enhancing livelihoods is one of the pillars of our USLP. Our programmes aim at stabilizing and increasing the income of our small-scale suppliers and distributors while working towards the betterment of the communities and protecting the environment.


gROWINg TOgEThER WITh ThE COMMUNITY

Green and Clean ProgramThe Green and Clean programme was initially launched in Surabaya in 2001 and has now been extended to nine major cities in Indonesia, namely Jakarta, Yogyakarta, Bandung, Makassar, Medan, Manado, Banjarmasin, Denpasar, and Balikpapan. Empowering women, particularly housewives, as the agents of change, the

programme educates people to protect the environment by household waste segregation, recycling and greening. Now run in 10 cities, it has created 370 community waste banks, involving approximately 28,000 households.

Around 250 tons of inorganic waste has been collected with a value reaching almost 270 million rupiahs and involving around 28,000 members as customers of the waste banks.

Women farmers presents their home made products to Vice Minister of Agriculture and Unilever



ITEMS TARgET AChIEvEMENT

Number of cities 10 10

Number of Areas 589 1,137

Number of Households 20,000 28,000

Number of Waste Banks 350 370

Volume of Waste Recycling (ton) 198 250

Waste Bank ProgramWe are providing comprehensive technical and administrative support to the Waste Banks, as part of the Green and Clean Programme. Through the Waste Bank Programme, the community is encouraged to collect their household waste, which are subsequently segregated and sold to waste collectors.. Each household receives its part of the revenues in a savings account. We are providing comprehensive technical and administrative support to the waste bank of Bank Sampah (Waste Banks). These waste banks enable all households in a community to turn in all their household waste in return for cash. Under the Programme, 20 waste banks were established in Jakarta and Surabaya in 2011.

In 2012, the Program gas aimed at collecting 198 tons of household waste and at supporting the establishment of 350 waste banks. As the volume of waste collected reached 250 tons in 2012 with the establishment of 370 waste banks, it was decided not to expand the number of waste banks.

In 2013 however, we aim to expand the number of waste banks that we support to 700, reaching 30.000 households in the 10 cities of our Green and Clean programme intervention cities and collecting a total of 300 tons of waste.

Studies on the Green and Clean programme have shown that this initiative has brought positive impact on environmental management, particularly in intervention areas. At least 2,407 neighbourhoods have been transformed into cleaner, greener area with volume of waste reduced by up to 80%. Incidence of dengue fever and diarrhea in those areas has also decreased significantly. It has also helped increase the average income of the community, increase the number of productive housewives and raise the number of female leaders in organizations.

The results of the Green and Clean Programme in waste recycling are summarized below.

SUMMARY DATA pOST CONSUMpTION pACKAgINg WASTE RECYCLINg gREEN AND CLEAN pROgRAMME 2012

This program not only helps to make communities and neighbourhoods clean, it also helps thousands of households with a modest but steady additional income.(EC 9)

Unilever Trendy TrashionThe Trashion (Trash Fashion) programme aims to answer the need of tackling post consumer plastic waste while empowering women to become waste entrepreneurs by educating them to turn plastic packaging waste into useful and attractive items with economic value.

The programme has been implemented in 6 cities and involves 750 entrepreneurs in 73 SME centres.

Waste absorption from Trashion programme reached almost 4,000 kg with a turnover of around IDR 18 million in 2012.

ENhANCINg LIvELIhOODS AND SUSTAINABLE AgRICULTUREIn a global context, Unilever’s goal by 2020 is to have 100% of our agriculture raw materials sourced from sustainable sources, starting with 30% at 2012, and 50% at 2015.

In Indonesia, we undertook a number of activities in 2011 and 2012 to achieve this target.


An important milestone in 2011 was the broadening of our networking and relationship with critical partners in the production chain. We started to apply a sustainable sourcing programme which is in line with the principles of our Sustainable Living Plan. The programme is aimed at mapping, identifying and enabling greater control over more critical members of the supply chain in the social, environmental and labour aspects.

Many of our raw materials come from farms and forests. We need to verify that materials are sourced from verifiable sustainable renewable sources or made from recycled materials.

1. Sekolah Petani (SP) – Farmers School SP is an educational activity with the purpose of

empowering Unilever Indonesia’s partner farmers. In every SP unit, 14 participatory meetings are held to discuss topic related to cultivation, management, and research.

In 2011, we target to establish 15 units of SP in 8 districts where our black soybean farmer development programme is located. Farmers were expected to actively participate in the SP. We closed the year with 14 units established in those 8 districts. 1 unit could not be implemented due to changes in the growing season.

Our 2012 target was another 14 units in 8 intervention districts, of which 13 units were implemented, and 1 unit established in the coconut sugar farmers’ area.

In 2013, we are preparing the closure of the black soybean farmers schools and will focus on a Farmers’ School Alumni development programme to ensure the sustainability of the programme in the field. We also plan to expand the SP program by 3 units in “penderes” (coconut sugar sapper) communities.

2. Training on Sustainable Agriculture Code to farmers In 2011, trainings in 2 areas of black soybean farmers,

Nganjuk and Pacitan, were conducted. In 2012, training was conducted involving eight cooperatives. The training was facilitated by Gadjah Mada University and involved the cooperative management of eight regions: Nganjuk, Madiun, Ponorogo, Ngawi, Trenggalek, Pacitan, Bantul, and Kulon Progo.

In 2013, we aim for the establishment of an ICS (internal control system) at farmers’ level for the implementation of our Sustainable Agricultural Code (SAC).

Unilever Sustainable Agriculture Code (SAC)The Unilever Sustainable Agriculture Code (SAC) covers 11 parameters that should be followed by Unilever’s suppliers and comprise of parameters for agrochemicals, consumption of fuel, water, biodiversity, energy, waste, social and human capital, animal welfare (or animal wellness), value chain and local economy. (4.8)

Farmers School



3. TUTUR (Pembinaan Petani Perempuan) – Women farmers coaching on communication and self expression.

The purpose of this activity is to improve farmers’ lives through women empowerment. The women empowerment program reaches our black soybean and tea women farmers. In 2011, a total of 55 women support groups were established, with members amounting to 1,923. The increase in assets was 91%. Communications skill training was conducted by inviting representatives of all groups in Yogyakarta.

Targets in 2012 were to increase the number of participants to 1,800 people, to increase the assets of the groups by 20% compared to 2011, and to conduct advanced communication skills trainings for women farmers. In 2012, 3,324 women participated in the programme, and the increase of group assets was 155%. Representatives of groups participated in communication trainings in Yogyakarta. Women farmers were also trained in audio visual media skills.

Targets in 2013 are to replicate the programme in one new region, Ponorogo, while in existing areas emphasis will be on increasing the assets of the group and on making TUTUR a meeting place and communication forum for all women farmers.

Tutur was appreciated by the Indonesian government as one of the best women empowerment programme and awarded with the 2011 Indonesian Millennium Development Goal Award.

Ibu Indarsih is a female farmer and member of one of the women groups. She was trying to find a job when the period for harvesting, sorting and grading ended, while her husband was a labourer in Surabaya. She decided to build a business and took a loan of Rp 100,000 from the group to make ‘puli crackers’. The crackers were sold at the small shop of Ibu Suyati, another member of the group. After just two weeks, her business grew and other small shops owned by other members of the group started ordering the ‘puli crackers’. After two months, as her business was growing, she took out a bigger loan of Rp 200,000 from the group, to make not only baked crackers, but also raw crackers (krecek). The group provided financing and marketing for Ibu Indarsih’s products.

Ketawang Village was a challenging area for group creation; and the female villagers were not involved in development activities. After a key figure in the village

was approached, an overview of the programme and its objectives was explained to 30 women. 24 of them agreed to join the group, but the rest refused since there was no funding aid. In the first year, the activity was running well, many people especially women wanted to know the group’s activities. Members of the group explained that there would be health information materials, entrepreneurship games with prizes, and savings and loans. In the second year, the group got more unified and it successfully registered as a women farmer - KWT (Kelompok Wanita Tani). Eventually village officials started to see the group’s potential. In every woman’s event in sub-district or regency, the village head now always appoints a women empowerment group’s member as the village’s ambassador. The village officials are now also facilitating in requesting funding to the local government, for instance for the donation of soybean processing machinery.

Women’s Groups – Two Success Stories


SUppLY ChAIN MANAgEMENT (EC6)Unilever Indonesia’s Supply Chain and Procurement Policy promotes sustainability within the supply chain to achieve greater transparency and accountability amongst internal and external stakeholders. We see our suppliers, vendors, contractors and customers as our important stakeholders. We continuously seek to understand customers’ needs and deliver quality and value-added products in our business operations.

We divide our suppliers into three categories: production items (used in manufacturing our products, such as packaging, ingredients, chemicals and commodities), logistics (product warehousing and distribution) and non-production items (such as machinery and equipment).

The main criteria for selecting suppliers are alignment with the best sustainability practices, competitive costs, quality and service levels.

In order to manage our supply chain risks, we have implemented a Business Partner Code and Sustainable Agriculture Code. The codes set out the guidelines on the minimum standards required for procurement policies, procedures and systems. Suppliers must accept and sign our Business Partner Code and Code of Business Principles prior to working with us and must comply with national labour laws. The code prioritises local sourcing. However imported materials will be used if we cannot obtain these materials locally.

Palm OilIn 2008 we stated our commitment to procuring all our palm oil from sustainable sources by 2015. We have always sourced our palm oil from Indonesia as the largest palm oil producing country. With this in mind we support the Roundtable on Sustainable Palm Oil (RSPO) in Indonesia. The majority of our palm oil are used in margarine, ice cream, soaps and home care products. In 2012, three years ahead of schedule, we managed to achieve our target or using only palm oil certified by the RSPO.

Black Soy BeansImproving productivity of black soybean for our Bango brand was the aim of the programme. To improve the sustainability of our agricultural supplies and promote better living for farmers and our other business partners, we conducted field schools in black soybean farmer groups, and extensive trainings to farmers’ cooperatives, in 8 regencies. We established 150 hectares of black soybean seed area and we work with 1.000 farmers as seed growers. To date, the Black Soybean Farmer Empowerment programme has improved and promoted the welfare of more than 9,000 farmers and over 12,700 women farmers.

One of the key factors in the black soybean empowerment program is livelihood improvement among the women farmers, hence their family livelihood. The approach we use is strengthening the groups. Each group, consisting of women living in close proximity, was encouraged to start income generating activities, based on the available local resources and potential. An important income generating activity is sorting and grading of soybean, which increases the prices. Unilever also supports women farmer groups to obtain food safety approvals from the local authorities for the packaged food products of their home industry.

In 2012 we created a partnership with one of Indonesia’s largest banks to provide advance financing for cooperatives to buy seeds.

There has been a significant increase of supply from 570 tonnes in 2011 to over 1,584 tonnes in 2012 which is an increase of 178%. The demand of Bango however still exceeds the supply.



TeaWe have been in partnership with the Rainforest Alliance since 2007 to pursue sustainably sourced tea by 2015. Our tea suppliers are in Indonesia, Kenya, Malawi, India, Sri Lanka, Vietnam, China and Argentine. Several of these tea suppliers have been audited and certified by Rainforest Alliance. The Rainforest Alliance certification is based on the Sustainable Agriculture Network (SAN) standards, which covers farmers welfare, environment, economy and ethics. One criteria is that tea estates must pay at least the minimum wage to their employees. At the moment the tea estates pay about 5% above the local minimum wage for plantation. (EC5) Unilever Indonesia is also in progress for qualifiying all tea suppliers, in our USQS (Unilever Supplier Qualification System) Program, to be compliant not only in our Unilever Quality standard, but also in Responsible Sourcing aspect. Unilever’s Responsible Sourcing Program is designed to ensure that suppliers have the capability to meet the requirements of Unilever’s Supplier Code. Unilever ’s Supplier Code requires compliance with a set of standards aligned with national

laws and internationally accepted norms in the four key areas of: Labor standards, Health and safety, Environmental compliance and Business integrity. One aspect of responsible sourcing is adhering to the Good Agricultural Practice Guidelines which has ten criteria to judge the sustainability of tea, which include the preservation of soil fertility and nutrients and of biodiversity, the development of social and human capital and the local economy, the minimization of soil loss, pest management and the use of water and energy. We also follow a number of other internal guidelines which cover pesticide requirements, aflatoxin limits, allergen standards, benzoa limits, heavy metal limits and microbiological specifications for leaf tea. Regarding sustainable sourcing in agriculture we have been cooperating with one of our suppliers, PT Pagilaran, and with Universitas Gajah Mada and NGO-Persada on a number of projects in Farmer Field Schools to provide training on seedling regeneration, fertilising, technical assistance and women’s empowerment through business development among women groups.

Tea Farmers


Supporting Tea Planting in Central JavaTea plantations in Central Java province play an important role in ensuring the sustainability of black tea supply to PT Unilever Indonesia. The implementation of CSR activities began in 2009, and is a collaboration between PT. Unilever Indonesia (via the Unilever Indonesia Foundation), PT. Pagilaran, and the Faculty of Agriculture of the University Gajah Mada. As initial results were modest, in 2011 the CSR activity used a new approach in the form of “Sekolah Lapangan” (Field School or SL). SL activities were run for three months and at the end of the activities, the results of the trainings in tea cultivation, pest management, and cooperatives building as well as the quality of the farmers plantation were evaluated.

Tea production in the region increased by 48%, tea supply to PT Pagilaran increased by 67%, and the commitment of the society to maintain the tea plantation and partner with the tea processing industry is now high. Local government officials (village heads, district, and related agencies in the District of Pekalongan and Banjarnegara) were also enthused.

In 2012, SL activities that have been successful in the Kaliboja region will be replicated by tea farmers in the district of Batang (District Bwang and Reban), which is a development area under the PT. Pagilaran Production Unit, Sidoharjo. The plantations in the region have a large area of about 700 ha, so the overall improvement will have a significant impact on the supply of raw materials of black tea. Besides being aimed at increasing the production of tea plantations, this program also motivates the farmers to continue tea planting, increases their income, builds cooperation, and helps preserve local arts and culture. (EC9)



We have created 80 champion farmers, whom we expect to spread good agro practices in tea growing to thousands of farmers. Currently 25 of the 48 plantations in Indonesia which supply tea to Unilever have received the Rainforest Alliance certification.

Coconut Sugar Coconut sugar is a main ingredient of our soy sauce product, Kecap Bango. We have maintained a high quality sourcing while coping with the increase of demand for coconut sugar. Since mid-2009, Unilever Indonesia introduced an initiative to safeguard the economic development of coconut sugar farmers. This initiative began in Pangandaran and has been extended to Sukabumi and Lampung. At the moment we have around 15,500 farmers under this programme and we continue to educate our farmers through meetings, multimedia and booklets on how to maintain the quality of their products. Our suppliers have also been involved in various programmes for their farmers, including rewards and benefits, accident insurance and training and we have made a road map for compliance with our sustainable agricultural code (SAC).

Coconut sugar farmer

The objectives of this initiative are: • Toimprovethequalityandquantityofcoconutsugarin

line with consumer demand and Unilever Indonesia’s stringent standards

• Tocreatemechanismstosecurethefinancialindependence of coconut sugar farmers to protect their well being

• Toincreasefarmers’capacitytoproducesustainablecoconut sugar of higher quality

• Todevelopknowledgeaboutcoconutsugarculture.

We carried out a pilot project in coconut sugar and planted 6,000 seedlings in 2012. In total we have planted over 39,000 coconut tree seedlings since 2009. We are also carrying out a programme for fertilizing 200,000 coconut trees starting in late 2012.

Our aim is to increase the yield, and with it the income for farmers, of coconut sugar by 20% in the coming years. We are also strengthening farmer groups and helping make the climbing of the trees safer.


hUMANITARIAN AIDAs part of our community development, Unilever constantly participates in social activities such as disaster prevention, rehabilitation activities and emergency relief. We are actively involved as partners in the National Platform for Disaster Risk Reduction (Planas PRB), BNPB (National Agency for Disaster Management) as well as other social organizations. Planas PRB is a national coordinating mechanism for Disaster Risk Reduction (PRB) by accommodating interests of multi-stakeholders and serving as advocate at different levels. This participation is part of our drive to increase social awareness of the importance of planning and implementation of effective disaster risk reduction. In the execution of this programme, Unilever works closely with NGOs, government agencies, and business partners in various regions. In 2011 and 2012 we conducted the following activities:

2011• SupportingSafetySchoolCampaigneventswith

Yayasan Skala and Yayasan Kerlip• SupportingJakartaFloodvictimsviaACTAksiCepat

Tanggap – an NGO)• Providing1,000unitsofPureitfordisastervictims

through partner NGOs

2012 • SupportingthepublicationofbooksfortheSafe

School Campaign, with Yayasan Skala• SupportingTrainingondisasterriskreduction

for traders at the Pasar Pakem, Yogyakarta, and renovation of the Pasar Pakem (after the Merapi volcano eruption)

• DonationforPadangFloodVictims• DonationforPaluearthquakevictims• DonationforFloodReliefpreparationprogramwithACT.

Books for the Safe School Campaign

Safe School Campaign


OUR CONTRIBUTION TO ECONOMIC DEvELOpMENT

Economic performance Indicators

In general, the creation and distribution of economic value is based on the revenue and expenditure of the operational activities of Unilever. The increasing national economic growth has expanded the range of consumer goods offered to the market.



In 2012, Unilever presented an outstanding performance improvement. The revenue increased by 16% from Rp 23,469 billion in 2011 to Rp 27,303 billion in 2012, despite intense competition. This growth is supported by an increase in the volume growth from two principal product divisions, Home and Personal Care with total sales of Rp 17,200 billion (2011) and Rp 19,900 billion (2012) and Foods & Beverages with total net sales of Rp 6,300 billion (2011) and Rp 7,400 billion (2012). This growth was driven by capacity expansion in manufacturing plants and product innovation.

Total net profits before income tax moved up by 16.2 percent to Rp 4,839 billion in 2012 from Rp 4,164 billion in 2011.

During 2012 and 2011, Unilever successfully increased its economic value to Rp 27,384 billion in 2012, up from Rp 23,615 billion in 2011. The company then distributed an amount of Rp 22,545 billion in 2012, up from and Rp 19,451 billion in 2011, while the economic value increased to Rp 4,839 billion in 2012, up from Rp 4,164 billion in 2011.


DIRECT ECONOMIC vALUE gENERATED AND DISTRIBUTED (EC1)(IN BILLIONS OF RP)

2012 2011

Direct Economic value generated

Revenues 27,303 23,469

Finance Income 38 33

Other income 43 113

Total Direct Economic value generated 27,384 23,615

Economic value Distributed:

Operating costs 19,551 16,981

Employee wages and benefits 1,261 996

Payment to government 1,628 1,410

Payment to providers of capital 69 27

Community investments 36 37

Total Economic value Distributed 22,545 19,451

Economic value Retained 4,839 4,164

Under the Unilever Indonesia Employee Benefits Scheme, the pension benefits have been divided into two programs: a defined benefit pension plan and a defined contribution pension plan. A defined benefit plan is a pension that defines an amount of pension benefit that an employee will receive on retirement. For all permanent employees who were hired before 1 January 2008, Unilever has a defined benefit pension plan covering all of those employees who have the right to pension benefits.

All permanent employees who were hired from 1 January 2008 onwards are covered by a defined contribution managed by a Defined Contribution Pension Fund. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. The company is also required to provide a minimum amount of pension benefits in accordance with Labour Law No. 13/2003 which represent an underlying defined benefit obligation. The company provides other long-term employee benefits such as jubilee and long leave benefits.


The total long-term employee benefits obligations in 2012 and 2011 were Rp 391 billion and Rp 256 billion, respectively. (EC3)

During 2012 and 2011 Unilever did not receive any incentive including financial assistance from the government for any operations or business activities. (EC4)

It is Unilever policy to maintain fair and competitive remuneration compensation packages for its employees. For non-managerial staff, based on the market factors and a job grading system, the company pays one minimum salary for all factories which is based on the Collective Labour Agreement as signed with the Trade Union representing all employees. All third party workers are being ensured that their salary complies with minimum wage as stipulated by the government (UMR). There is no difference in salary levels between male and female employees. (EC5)


One of the Unilever core values is to support the sustainable local businesses, which is reflected in a Business Partner Code and a Sustainable Agriculture Code), and in the practice and transactions with local suppliers. Through the CoBP, Unilever plays an active role in the expansion of the local economy by encouraging local skills development and providing business opportunities and a platform for technology improvement. In 2011, Unilever sourced raw materials and packaging material from 532 suppliers, and in 2012 from 572 suppliers.

Our spending on local suppliers increased from 7.5 trillion in 2011 to almost 8.5 trillion in 2012.

It is our policy that our suppliers must:• providecompetitiveadvantagetoUnilevertomeetits

goal of serving consumers at cost effective price and payment terms

• meettheResponsibleSourcingAuditrequirements,set by Unilever;

• beabletopartnertoforgrowth;• beabletobringinnovativeideasandproductsto

Unilever to help serve the consumers;• becommittedonSustainabilitygoalsofUnilever;• bringoutstandingservicemindset.

More product specific supplier requirements are described elsewhere in this report. (EC6)

Unilever’s business is subject to risk implicated by climate change. Extreme weather changes and natural disasters have been affecting the production of the commodities that are the main materials for our products, such as the black soybean. The physical impact of climate change may result in increased financial costs such as higher distribution costs for operations in areas that are prone to floods or other natural events. Unilever has continuously improved its assessment on how to minimize the risks of extreme weather events and the potential financial impact on the operations. (EC2)

In 2012 and 2011, Unilever through YUI invested a total of Rp 37 billion and Rp 36 billion respectively for significant investments and support on communities and local economies (EC8) of which more details and impact analysis are described in this report, which include the paragraphs in the chapter Enhancing Livelihoods, Sustainable Agriculture and Health & Well being.


pRODUCT RESpONSIBILITY



pRODUCT SAfETYBecause we produce goods which are directly consumed (for foods products), we must assess each life cycle stage of the product in accordance to safety and health matters. At the moment our portfolio has been assessed for compliance with the procedures as outlined below (PR1)

YES NO

Product Design and Concept v

Research and Development v

Certification v

Production and Manufacturing v

Marketing and Promotion v

Supply and Storage Distribution v

Service and Use v

Dispose, Reuse or Recycle v



RESpONSIBLE MARKETINg AND COMMUNICATIONUnilever Indonesia is dedicated to offering safe, quality products and to marketing them responsibly. We add vitality to life. We translate this mission into products that address consumer needs, insights, interest and social triggers in society. Due to the impact our communications have on daily life and consumption habits of Indonesian people, we observe a series of internal and external policies and regulations that define and restrict the content and targets of our product advertising.

As a reference, we adopt the Unilever’s Global Food and Beverage Marketing Principles which provide guidance on the communication of our major portfolios. This documents mandates the communication on our products to be in accordance with their nutritional profile, the description of product qualities to be based exclusively on scientific data, and the advertising of our food and beverages to be in accordance with their positioning and relevance to consumer diets. (PR6)

On pack informationAll of our product packaging undergoes an internalcross-functional team evaluation on various aspects ofcompliance. The Local Product Compliance Approval(LPCA) procedures involves various departments andaims to ensure regulatory compliance. The information on the packaging of products being launched and marketed must be accurate, well supported and includes a correct ingredient list, instructions for use and precautionary notes. (PR6)

Responsible CommunicationWe aim to promote positive behavioural changes through our brands’ social missions because we believe that products with good hygienic benefits may not deliver the maximum benefits if consumers do not use them in a correct way. Our Pepsodent and Lifebuoy brands are amongst the brands that strive to encourage our consumers to brush their teeth and wash their hands from an early age for the sake of their own health and well being in the future. Highlights of these two brand social missions can be read in more detail in the Improving Health and Well Being Section.


Marketing to ChildrenWe apply a standardized provision for marketing to children. For example, when marketing Wall’s ice cream products to children we only target children aged 6-12. None of our marketing communications target children below the age of six. To support a healthy diet for children, we ensure that our Wall’s products comply with the allowed limits of saturated fat, trans fat, sodium and sugar.

Suara Konsumen (Consumer Line) The Company handles customer complaints and inquiries through a dedicated consumer care service, ‘”Suara Konsumen”. Through Suara Konsumen, we seek to strengthen the relationship between our company and our consumers and customers by responding to their concerns and expectations regarding our products, and by increasing their satisfaction with our products. In 2011, of a total 48,726 instances of feedback, by far more than 90% were inquiries. All complaints and inquiries have been dealt with satisfactorily.

During the reporting period we received one incident on non-compliance with our regulations and voluntary codes which concerns product and service information and labelling. However no fine was issued and we have not been taken to court regarding this matter. Another incident involved non-compliance with our marketing communications for one of our beverage products. Two non-compliances occurred but we only received a warning which we have resolved accordingly. (PR2, PR4, PR7)

Unilever factory


pEOpLE: ThE hEART Of OUR BUSINESS



People management at Unilever Indonesia aims to ensure the attraction and retention of the best professionals in the country, investing in a healthy, accident free working environment that favours the development of our employees.

OUR pEOpLEWe understand that our employees are the foundation and drivers of our success. Accordingly, ‘people’ is one of our strategic focus areas. Creating value through - and for - employees by attracting, developing and retaining the globally competitive people necessary to implement our strategy and meet our growth targets remains one of the group’s most vital attributes. Based on the USLP, we have committed ourselves to many initiatives to improve our working environment, such as our diversity policy – focused on encouraging more women in leadership roles – the creation of new benefits, the reduction in accident rates and actions to retain professionals with career potential. At this moment the Board of Directors itself consists of seven male and three female directors. The appointment of these members is based on their capability and is free from any unfair judgement or bias. Likewise in recruiting new staff members we base our

decisions on their capability. We do not have a special policy on local hiring and consider our area of operations to be Indonesia. The majority of our employees are Indonesian.

We have a strong performance culture. This is embedded in our operations and the stringent targets we set each year. The Performance Development Plan (PDP) is an annual performance assessment that is applied to all employees. This helps employees understand where their management competencies lie and identify areas for improvement. A Key Performance Indicator (KPI) matrix is used to quantify our financial and non-financial targets. This matrix measures each employee’s success in reaching these targets.


EMpLOYEE pROfILE Our workforce encompasses employees in diverse areas, such as factory, sales, and administration, spread throughout the country.


CLASSIfICATIONS 2012 2011

MEN WOMEN TOTAL MEN WOMEN TOTAL

Number of Employee 5,379 1,068 6,447 5,090 937 6,027

Total 6,447 6,027

By Employment Level

Management 869 429 1,298 785 342 1,127

Non Management 4,510 639 5,149 4,305 595 4,900

Total 6,447 6,027

By Employment Region

Headoffice 230 387 617 228 345 573

Unilever Food Solutions 60 26 86 57 24 81

Customer Services and Key Account Mgt

624 236 860 510 173 683

Cikarang Factory 3,464 378 3,842 3,295 357 3,652

Rungkut Factory 1,001 41 1,042 1,000 38 1,038

Total 6,447 6,027

NUMBER Of EMpLOYEES BY EMpLOYMENT LEvEL AND REgION BROKEN DOWN (LA1)


DIvERSITY IN fOCUS Unilever Indonesia has been seeking to improve its social and gender diversity indicators. We started to map diversity within the company and to fix future goals and targets. The main advances have been in the inclusion and development of women in leadership roles (LA13). We believe that equality is crucial in our company, so there are no disparities in pay between women and men. The ratio of basic salary and remuneration of men to women is 1:1. (LA14)

pERfORMANCE CULTUREAs part of Unilever’s strong pillar of Great People, the company has a performance culture that has evolved to include annual target setting, performance ratings, leadership differentiation tools, standards of leadership and reward management.

Unilever develops five assessments to measure employees’ individual and team performance by establishing annual target setting, performance ratings, a leadership differentiation tool, and standard leadership and reward management. Unilever conducted regular performance reviews for 6,027 employees in 2011 and and 6,447 employees in 2012, , accounting for 100% of the total workforce in management and non-management level. (LA12)

Unilever established diversity age targets of workers especially for females in management and co-worker positions. In 2011 and 2012, the workforce consists of average 17% female employees, while 32% of management positions are held by women. Three women are members of the board. In the diversity of age, in 2011, 57% of our staff is below 30 years old, 26% % is between 30 and 40 years old and 17 % is over 40 years old. In 2012, 57% of our staff is below 30 years old, 26% is between 30 and 40 years old and 16% is over 40 years old. Our efforts to increase the diversity in every level of the organization will continue and we expect the progress we’ve made to be sustainable. The table below shows the Composition of Governance Bodies and Employees in our company in 2011 and 2012. (LA13)



CLASSIfICATION NUMBER Of

EMpLOYEE 2012

AgE gROUp (MALE) AgE gROUp (fEMALE)

MEN WOMAN TOTAL <30 30-40 >40 <30 30-40 >40

Management 869 429 1,298 314 351 204 229 131 69

Non-management 4,510 639 5,149 2,828 1,104 578 334 182 123

Total 5,379 1,068 6,447 3,142 1,455 782 563 313 192

CLASSIfICATION NUMBER Of

EMpLOYEE 2012

AgE gROUp (MALE) AgE gROUp (fEMALE)

Pria Wanita Jumlah <30 30-40 >40 <30 30-40 >40

Management 785 342 1,127 274 296 215 160 107 75

Non-management 4,305 595 4,900 2,572 974 659 308 160 127

Total 5,090 937 6,027 2,846 1,270 874 468 267 202

COMpOSITION Of gOvERNANCE BODIES AND EMpLOYEE BY gENDER AND AgE gROUpS (LA13)


NEW hIRES AND EMpLOYEE TURNOvER We have a low turnover compared to previous years and believe this is a result of providing a good working environment, a competitive reward system and challenging employment opportunities.

CLASSIfICATION 2012 2011


Total New Employee Hires 1,003 189 1,192 1,360 244 1,604

New Employee by Age

< 30 938 167 1,105 1,223 213 1,436

30 - 40 62 22 84 126 29 155

>40 3 - 3 11 2 13

Total 1,003 189 1,192 1,360 244 1,604

New Employee by Region

Headoffice 33 68 101 24 65 89

Unilever Food Solutions / Mendut 13 3 16 19 7 26

Customer Services and Key Account Mgt 152 71 223 137 43 180

Cikarang Factory 718 44 762 1062 117 1179

Rungkut Factory 87 3 90 118 12 130

Total 1,003 189 1,192 1,360 244 1,604

Employee Turnover

Voluntary 183 49 232 159 55 214

Retirement 70 3 73 92 14 106

Other (incl dismissal, death) 221 28 249 196 27 223

Total 474 80 554 447 96 543

NEW hIRES AND EMpLOYEE TURNOvER (LA2)


LOCAL hIRINgUnilever provides equal opportunity to everyone to work and become a part of Unilever. There is no policy specifying that Unilever on the first hand must employ locally. However, Unilever tries to ensure that employees are hired from the local community. With regard to the recruitment of senior management, there are no specific policies taking account of the place of residence of the person concerned. However the recruitments is based on the personal capability and qualifications of these members. The table below shows the diversity in Unilever’s workplace during 2012 and 2011. (EC7)


hEALTh AND SAfETYUnilever is committed to conducting business activities in a manner that protects the health and safety of its employees, contractors, customers and communities. Risk and accident prevention and respect for human life are incorporated into work routines. Occupational health and safety in all our operations are based on the Framework Standards System used globally by Unilever. This is on par with the internationally recognized ISO14001 and OHSAS18001. In order to make sure the Health and Safety of our employees are being watched over carefully, Unilever Indonesia has a Central Safety, Health and Environment Committee (CSHEC) which is led by Unilever Indonesia’s President Director and consists of seven sub-committees (USHEC). Each sub-committee is led by a director. The Committee comprises of 194 employee representatives, which is equivalent to 4 percent of the total employees. (EC7, LA6)

2012 2011

LOCAL EXpAT LOCAL EXpAT

Head Office 605 12 561 12

Unilever Food Solutions 84 2 78 3


860 0 683 0

Cikarang Factory 3841 1 3652 0

Rungkut Factory 1042 0 1038 0

Total 6447 0 6012 15

DIvERSITY Of EMpLOYMENT


Unilever has implemented its Health and Safety systems in its manufacturing sites, called Medical Occupational Health. These systems are aligned with the OHSAS (Occupational Health and Safety Assessment System) 18001. Together with the representative of employees, we established the Unit Safety Health and Environment Committee (USHEC). Unilever is responsible for protecting its people from work-related hazards to their health and to promote, maintain and enhance the health of its people so as to maximize their fitness to work safely and effectively. The sustained safety results reflect a culture shift within the company towards an injury-free workplace. In 2011 and 2012, total injury cases were 22 and no fatalities occurred. (LA7)

Unilever is also aware of the health and safety of its employees, their families and communities. Regularly the company organizes a number of education, training, prevention/risk control and treatment programs. These issues include diabetes, cholesterol, cancer, HIV and other serious illnesses. Unilever also distributes reliable information on managing health and offers prevention programmes such as a vaccination programme, and a day care and nursery programme (for female employees who are breast feeding). (LA8)

Unilever provides its employees with comprehensive and competitive benefits programme to meet the needs of employees and their families. The benefits including health insurance, parental leave, retirement provision, religious holiday allowance, and other benefits for

RATES Of INJURY, OCCUpATIONAL DISEASES, LOST DAYS AND ABSENTEEISM AND TOTAL NUMBER Of WORK RELATED fATALITIES, BY REgION AND BY gENDER) (LA7)No Location Men Women Men and Women

Total Employee

Injuries Occupational diseases

Absentee rates

Total Employee


Absentee rates

Total Employee


Absentee rates

Medical Aid

Lost Tim

Disabling Injury

Medical Aid

Lost Tim

Disabling Injury

Medical Aid

Lost Time

Disabling Injury

Year 2012

Headoffice 230 0 0 0 0 0 387 0 0 0 0 0 617 0 0 0 0 0

Unilever Food Solutions

60 0 0 0 0 0 26 0 0 0 0 0 86 0 0 0 0 0


624 0 0 0 0 0 236 0 0 0 0 0 860 0 0 0 0 0

Cikarang Factory 3464 15 1 0 0 0 378 0 0 0 0 0 3842 15 1 0 0 0

Rungkut Factory 1001 5 1 0 0 0 41 0 0 0 0 0 1042 5 1 0 0 0

Year 2011

Headoffice 228 0 0 0 0 0 345 0 0 0 0 0 573 0 0 0 0 0

Unilever Food Solutions

57 0 0 0 0 0 24 0 0 0 0 0 81 0 0 0 0 0

Customer Services and Key Account Mgt (also in AREA)

510 0 0 0 0 0 173 0 0 0 0 0 683 0 0 0 0 0

Cikarang Factory 3295 10 7 0 0 0 357 0 0 0 0 0 3652 10 7 0 0 0

Rungkut Factory 1000 1 4 0 0 0 38 0 0 0 0 0 1038 1 4 0 0 0


employees and members of their immediate families. The benefits are categorized based on the employment status of the employees. (LA3)

The parental leave is organized by the company regulations. The maternity leave should commence one month before the expected date of birth of the child, and that the employee may not return to work for two months after the birth of the child. In 2012 and 2011, the total number of employees who were entitled to parental leave were 1058 and 937 respectively. The total number of employees who returned to work after parental leave ended was 20 in 2012 and 7 in 2011. All of them were still employed twelve months after their return to work. (LA 15)

As of the end of 2012, 100 % of employees are covered by the Eleventh Collective Working Agreement (PKB XIX), which was signed on June 1, 2011. PKB has received registration determination with the Directorate General of Industrial Relations and Worker Social Security, Ministry of Manpower and Transmigration through Decree No. B.78/PHIJSK-PKKAD/PP&PKB/VI/2011. This agreement clarifies the rights and responsibilities of the employer, employees and the union. (LA4)

For significant operational changes that may impact employees, such as facility consolidations or closings, Unilever complies at a minimum with local mandates and applicable collective bargaining agreements. A minimum of 30 days’ notice is provided. (LA5)

The opportunity to develop and advance employee’s career is at least as important as the well-regarded compensation, benefits and employee programs at Unilever. The company offers internal and external extensive and globally accessible training and development training at the individual, team, organizational and leadership levels. In 2011 and 2012, the Mega Mendung Residential Learning Center has been hosted more than 50 training sessions with more than 2000 employees every year. The Learning Management System (LMS) is available online to all employees and provides world class courses and resources. In addition, Unilever tracks employee training and education specifically by employee category and gender.


50training sessions with more than 2000 employees every year

employees are covered by the Eleventh Collective Working Agreement(PKB XIX)

100%


REMUNERATIONIn terms of pay between males and females, the company’s pay policies are designed to promote equal pay for equal contribution, capability and experience. There is no difference between pay ratios by virtue of gender. In its realization, the differences are due to rank of employment, performance assessment, position/title and time of services. (LA 14)

TRAININg AND TRAININg hOURS, BY gENDER AND EMpLOYEE CATEgORY (LA10)

YEAR 2012

EMpLOYEE CATEgORY TOTAL TRAININg hOURS pER YEAR TOTAL TRAININg hOURS pER EMpLOYEE pER YEAR


Management 39,383 29,582 68,965 83 91 175

Non Management 158,677 3,922 162,599 35 30 65

YEAR 2011

EMpLOYEE CATEgORY TOTAL TRAININg hOURS pER YEAR TOTAL TRAININg hOURS pER EMpLOYEE pER YEAR


Management 39,383 29,582 68,965 83 52 175

Non Management 138,639 3,358 141,997 35 31 66

Learning and capability development is one of the main ways of helping employees to boost their own employability. The three most effective methods of learning for Unilever employees are developed through experiences, relationships and formal programs. Most of the learning experience is gained through their daily responsibilities at Unilever with business projects, coaching from the Line Manager and training programs. During 2011 and 2012, the training activities that have been held by Unilever consist of various forms. Training time for management and non-management was 20 hours per employee per year on average, while the number of trainees reached 6,027 and 6,447 employees respectively. (LA10)


MOST SIgNIfICANT AWARDS RECEIvED DURINg 2011-2012

Unilever Indonesia’s policies, programs and other activities in areas related to sustainability were recognized in a long list of awards, of which the most significant are set out below.

AWARDS 2011INTERNATIONAL• Asia’s Best Managed Companies 2011 from Finance

Asia, “Best corporate Social Responsibility (1st rank), • International Business Award 2011 – Stevie Award,

Distinguished Honoree for Jakarta STOP AIDS “Care for Your Life” in category: CSR Program of the Year (Asia, Australia and New Zealand)

• International Business Award 2011 - Stevie Award, Distinguished Honoree for Unilever Indonesia Foundation (UIF)’s Community Relations Campaign: UIF’s 10thAnniversary: “Small Actions, Big Difference”in category: Communications or PR Campaign of the Year –Community Relations

MOST SIgNIfICANT AWARDS RECEIvED DURINg 2011-2012

• Charta peduli Indonesia 2011 ( Top Disaster Risk Reduction Program via Unilever Green and Clean)

• MDg Award Best CSR program for Promoting Maternal Health (Women Farmers Program on Black Soya Bean), Runner Up for Program Care for your life: HIV/AIDS Prevention Program.

• Ranking Companies in ASIA: 1st Rank Asia Sustainability Rating (ASR)

• Best Managed Company 2011 in the Category: Overall Best Managed Company in Indonesia - Large Cap, ASIAMONEY

INDONESIA

Distinguished honoree for Jakarta Stop AIDS• - Care for Your Life for CSR Program of the YearDistinguished honoree for Community Relations •UIf, 10th anniversary “Small Actions Big Difference” category Communications and PR Campaign of The Year

Capital Market Awards Best Corporate governance


AWARDS 2012INTERNATIONAL• Asia’sBestCompanies2012by Finance Asia Best Managed Company, Best Corporate Governance,

Best Corporate Responsibility (1st runner-up), Most Committed to a Strong Dividend Policy (ranked 1st)

• 3rdAsia’sBestEmployerBrandAwardsby Universum

Award for Talent Management, Award for Innovation in Recruitment, Award for Excellence in Training and Award for Managing health at work, Won the overall Award of Asia’s Best Employer Brand 2nd Most Attractive Employer in FMCG (for both Business and Engineering Students)

• 2nd Asia Best CSR practices Awards 2012 by CMO Asia Category Community Development, Concern for

Health and Poverty Alleviation• StevieAward2012by The Stevie Awards Category 1st : Communications or PR Campaign/

Program of the Year - Reputation/Brand Management; Credibility Through Jakarta Food Editors Community (SILVER STEVIE WINNERS)

Category 2nd : Corporate Social Responsibility Program of the Year in Asia, Australia and New Zealand; Healthy Market - a representation of Indonesia wet market in preserved traditional value (BRONZE STEVIE WINNERS)

INDONESIA• penghargaan peduli gizi 2012 (Nutrition Care

Awards), Persagi Pangan dan GAPMMI; Inovasi produk margarin Blue Band Gold (Product innovation Blue Band Gold)

• Indonesia MDg Awards 2011, Office of Special Envoy of The President of The Republic of Indonesia on MDGs (Utusan Khusus Presiden Republik Indonesia untuk MDGs); 1. Winner: Women Farmer Development Program (BSB), UIF Program at Jogja; 2. Runner up: Care for Your Life - HIV/AIDS Prevention Program

• WQA-gCSS (Worldclass Quality Achievement - global Customer Satisfaction Standard) 2012; SWA & MARS - 1. Pepsodent (Pasta Gigi), 2. Pond’s (Pembersih Wajah)

• SRI-Kehati Appreciation: One of 25 Listed Company in SRI_Kehati Index 2012 - SWA & BEI – Kehati, SRI = Sustainable Responsible Investment, KEHATI = Keragaman Hayati (Indonesian Biodiversity Foundation)

• Indonesian Customer Satisfaction Award (ICSA) 2012 by Majalah SWA dan Frontier Consulting Group

• Anugerah peduli pendidikan 2012 by Kementerian Pendidikan dan Kebudayaan ICD

• Best Corporate governance 2012 by BCD, Category: Role of Stakeholders

• pROpER Award 2012 by Kementerian Lingkungan Hidup: Peringkat Gold for Rungkut Factory, Peringkat Green for Cikarang Factory

• Indonesia Sustainability Reporting Award (ISRA) 2012 by NCSR (National Center for Sustainability Reporting): 1. Best Sustainability Report 2010 in Group B – Category Industries, 2. Best Website 2012 (Runner Up 2)

• AIDS Award 2012 – Gold Winner by Menteri Tenaga Kerja dan Transmigrasi RI for Surabaya Rungkut: HIV/AIDS at workplace (2.10)

pROpER Award Indonesia Sustainability Reporting Award Asia’s Best Employer Brand Awards SRI-Kehati Appreciation


gLOSSARY

AfDOKgI Association of Dentistry Faculty

ApJp Asosiasi Perusahaan Jalur Prioritas (Association of Priority Lane Companies)

BpNB National Agency for Disaster Management

COBp Code of Business Principles

COD Chemical Oxygen Demand

gRI Global Reporting Initiative (GRI-G3) Guidelines

gAIN Global Alliance for Improved Nutrition

gApMMI Gabungan Pengusaha Makanan dan Minuman Indonesia (Association for Food and Beverage Products)

LMS Learning Management System

pDgI Indonesian Dentist Association

pLANAS pRB National Platform for Disaster Risk Reduction

pERKOSMI Persatuan Perusahaan Kosmetik Indonesia (Association of Indonesian Cosmetic Industries)

UNWfp United Nations World Food Programme

USLp Unilever Sustainability Living Plan

SAC Unilever Sustainable Agriculture Code

WWTp Waste Water Treatment Plant


gRI CONTENT INDEX (3.12)

1. STRATEGy AND ANALySISReport from the Board of Commissioners Page

1.1 Report from the Board of Commissionersand Board of Directors

11

1.2 Description of key impacts, risks, andopportunities

36

2. ORGANIZATIONAL PROFILE2.1 Name of the organization 13, 24

2.2 Primary brands, products, and/or servic 12, 16, 21

2.3 Operational structure of the organization 13, 16, 29

2.4 Location of organization’s headquarters. 16

2.5 Number of countries where theorganization

16, 21

2.6 Nature of ownership and legal form. 13, 24

2.7 Markets served 21

2.8 Scale of the reporting organization 16, 21

2.9 Significant changes during the reportingperiod

16

2.10 Awards received in the reporting period 87

3. REPORT PARAMETERS

Report Profile3.1 Reporting period 4

3.2 Date of most recent previous report 4

3.3 Reporting cycle 4

3.4 Contact point 4

Report Scope and Boundary

3.5 Process for defining report content 6

3.6 Boundary of the report 4

3.7 Limitations on the scope or boundary of the report

4

3.8 Basis for reporting on joint ventures, subsidiaries, etc.

4

3.9 Data measurement techniques 4

3.10 Effect of any restatements of information 4

3.11 Significant changes from previous reporting periods

4

GRI Content Index3.12 Table identifying the Standard

Disclosures in the report4

Assurance

3.13 Policy and current practice on external assurance

88

4. GOVERNANCE, COMMITMENTS, AND ENGAGEMENTGovernance4.1 Governance structure of the organization 29 4.2 Status of the Chair of the Board 294.3 Independent and/or non-executive Board

members29

4.8 Mission, values, codes of conduct, andprinciples

25, 61

Commitments to External Initiatives 4.12 Externally developed economic,

environmental, and social charters,principles, or other initiatives

28, 33

4.13 Memberships in associations 30ECONOMIC PERFORMANCEAspect: Economic PerformanceEC1. Direct economic value generated and

distributed70

EC2. Financial implications due to climatechange

71

EC3. Defined benefit plan obligations 70EC4. Financial assistance received from

government70

92 gRI CONTENT INDEXSUSTAINABILITy REPORT 2011-2012


Aspect: Market PresenceEC5. Standard entry level wage compared to

local minimum wage 64, 70

EC6. Spending on locally-based suppliers 63, 71EC7. Senior management hired from the local

community82

Aspect: Indirect Economic ImpactEC8. Infrastructure investments and services

provided for public benefit 71

EC9. Indirect economic impact 65ENVIRONMENT PERFORMANCEAspect: MaterialsEN1. Materials used 48EN2. Recycled materials used 53Aspect: EnergyEN3. Direct energy consumption 51EN4. Indirect energy consumption -EN5. Energy saved due to conservation and

efficiency improvements-

EN6. Initiatives to provide energy-efficient orrenewable energy

51, 52

EN7. Initiatives to reduce indirect energyconsumption and reductions achieved

52

Aspect: WaterEN8. Total water withdrawal 50EN9. Water sources significantly affected by

withdrawal of water51

Aspect: Emission, Effluents, and WasteEN16. Total direct and indirect greenhouse gas

emissions 53

EN18. Initiatives to reduce greenhouse gasemissions and reductions achieved

53

EN19. Emissions of ozone-depleting substances 53EN20. NOx, SOx, and other significant air

emissions57

EN21. Total water discharge by quality anddestination

51, 57

EN22. Waste and disposal method 53, 54EN23. Total number and volume of significant

spills49

EN24 Hazardous waste 55EN25. Biodiversity value of water bodies Aspect: Products and servicesEN26. Initiatives to mitigate environmental

impacts 51

EN27. Percentage of products sold and theirpackaging materials that are reclaimed

55

Aspect: ComplianceEN28. Fines and non-monetary sanctions 49

Aspect: OverallEN30. Total environmental protection

expenditures48

SOCIAL PERFORMANCELABOR PRACTICES AND DECENT WORK PERFORMANCE INDICATORS Aspect: EmploymentLA1. Profil of workforce 78LA2. Recruitment and Employee turnover 81LA3. Benefits provided to part-time employees 84Aspect: Labor/Management RelationsLA4. Collective bargaining agreements. 84LA5. Notice period for operational changes 84Aspect: Occupational Health and SafetyLA6. Health and safety committees. 82LA7. Rates of injury and fatalities. 83LA8. Education, training, counseling,

prevention, and risk-control programsin place

83

Aspect: Training and EducationLA10. Average hours of training per year 85LA11. Training Programs to support the

continued employability of employees.-

LA12. Employees’ performance and careerdevelopment reviews.

79

Aspect: Diversity and Equal OpportunityLA13. Employees’ diversity. 79-80Aspect: Equal Remuneration for Women and MenLA14. Ratio of basic salary of men to women. 85, 79LA15. Return to work and retention rates after

parental leave by gender84

HUMAN RIGHTS PERFORMANCE INDICATORSAspect : Investment and Procurement PracticesHR2. Human right screening of suppliers and

contractors33

Aspect: Freedom of Association and CollectiveBargainingHR5. Rights of freedom of association 33Aspect: Child LaborHR6. Child labor 33SOCIETy PERFORMANCE INDICATORS

Aspect: Local CommunitiesSO1. Impacts assessment and development

program9

Aspect: CorruptionSO2. Business units analyzed for risks related

to corruption33


SO3. Employees trained on anti-corruptionpolicies and procedures.

33

SO4. Actions taken in response to incidents ofcorruption.

33

Aspect: Public PolicySO5. Participation in public policy development

.30

SO6. Contribution to political parties,politicians, and related institutions.

30

Aspect: Anti-Competitive BehaviorSO7. Legal actions for anti-competitive

behavior, anti-trust, and monopolypractices

33

Aspect: CompliancePRODUCT RESPONSIBILITy PERFORMANCEINDICATORSAspect: Customer Health and SafetyPR1. Life cycle stages; health and safety

impacts 73

PR2. Incidents of non-compliance withregulations and voluntary codesconcerning health and safety impacts ofproducts and services

75

Aspect: Product and Service LabelingPR4. Incidents of non-compliance with

regulations and voluntary codes concerning product and serviceinformation and labeling

75

Aspect: Marketing CommunicationFP6 . Percentage of total sales volume of

consumer products, by product category,that are lowered in saturated fat, transfats, sodium and added sugars.

43, 45

94 ThE SR WINNINg TEAM

PT UNILEVER INDONESIA TBKSUSTAINABILITy REPORT 2011-2012

ThE SR WINNINg TEAM

Daniel gunawanCustomer Development

Maria DewantiniCommunications

Sinta KaniawatiYayasan Unilever Indonesia

Eka SugiartoYayasan Unilever Indonesia

Nimanda SalehCustomer Development

David RimanSupply Chain

Maya TamimiYayasan Unilever Indonesia

Leo IndarwahonoYayasan Unilever Indonesia

Silvi TirawatiYayasan Unilever Indonesia

CatherineHuman Resources Development

ThomasCustomer Development

IlvanHuman Resources Development

Tyagita WisnuyadiSupply Chain

Mario A.AmrillahCorp Affair Legal Council

Andre SetiawanYayasan Unilever Indonesia

pangki MigunoSupply Chain

Alexander Ricky TjahjonoYayasan Unilever Indonesia

95PT UNILEVER INDONESIA TBK

SUSTAINABILITy REPORT 2011-2012

SUSTAINABILITy REPORT 2011-2012 97PT UNILEVER INDONESIA TBK

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pT Unilever Indonesia TbkGraha UnileverJl. Jend. Gatot Subroto Kav 15Jakarta 12930Indonesia

T. +62 21 526 2112F. +62 21 526 4020E. [email protected]

www.unilever.co.id

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