Water Use Efficiency

Considering that the Company’s business activities are in the agri-industry sector, water is a critical resource for PT Perkebunan Nusantara III (Persero). Water is also an important demand for the local communities that surround the Company’s areas of operations. Water scarcity has a major impact on the production of agribusiness operations. Without water, companies have no means to irrigate crops, plantations, and factory usage.

In order to address this rising issue, the Company acknowledges that water scarcity is an issue of concern and a risk to business operations. In this instance, the Company should aim to develop a more effective water management system in order to use water wisely and minimize water scarcity. The Company refers to the PROPER assessment category, which assesses performance in compliance with Indonesian laws and regulations including Water Source Maintenance and Water Pollution Control Management, to identify appropriate measures to mitigate the risk of water scarcity as a collaborative effort of the Company and its relevant stakeholders.

Stakeholders such as the Company, government, suppliers, and customers have a significant role in supporting the Company’s measures in preserving water. As the responsible body for overseeing all aspects of the Company’s Environmental, Social, and Governance (“ESG”) performance, including the topic of water scarcity risk identified by the Company as one of the most critical topics being faced, PTPN’s Board of Directors has assigned the Heads of Plants Operations Division (DOSK and DOAT) to be responsible for supervising the implementation of water use reduction and addressing the risks posed by water scarcity, in addition to reporting to the Board of Directors on a regular basis, with coordination from the Director of ESG Program, who oversees the entire implementation of the ESG program at PTPN Group.

In evaluating the risk of water scarcity in PTPN’s business operations, the Company has utilized the Aqueduct tool from the World Resource Institute (WRI). Through the tool, the Company identified several PTPN business areas that have been operating in water stress areas or areas with high water scarcity risk (20-40%), mainly in the East Java area.

The Company utilizes various water sources to meet its water needs, including groundwater and river water. As a form of responsibility in water usage, the Company monitors water usage on a regular basis to identify operations in water-scarce areas and evaluate natural ecosystems and local communities that rely on water sources for life. Along with that, PTPN participates in efforts to conserve water, improve water quality, and support access to clean water. Thus, the Company has taken several steps to manage water resources efficiently in accordance with Government Regulation No. 20 of 1990 concerning Water Pollution Control.

In line with the water usage efficiency policy, the Company has developed many initiatives, particularly to reduce the use of fresh water, which are consistently implemented. As a result, significant benefits are realized in terms of cost savings, work system improvements, and environmental friendliness. Among these policies are:

Build rainwater reservoirs that can be used for operational activities, to maintain existing water sources around the work area.
Reuse of water from the processing of palm oil, rubber, and sugar after being processed in the Waste Water Installation (WWTP), either for the plantation area (land application/ processing of palm oil) or returned in the production process (processing of rubber and sugar).
Conduct water usage efficiency measures by socializing savings on the use of water resources in the office environment, as well as conducting regular checks on water installations to detect leaks sooner.

As of December 31, 2022, PT Perkebunan Nusantara III’s water usage volume was recorded at 60,900,000 cubic meters (m3), an increase compared to 2021, which amounted to 58,600,000 m3. The increase was caused by an increase in raw material production. If normalized by revenue or annual production, the water usage intensity amounted to 2.3 m3/ton of raw material, an increase compared to 2021, which amounted to 2.6m3/ton.

Going forward, the Company is committed to maintaining a water usage intensity of 1.5-2 m3/ton FFB in accordance with industry best practices while implementing water management efficiency.

The commitment was made by PT Perkebunan Nusantara III as we recognize that one of the major concerns posed by climate change is the risk of world water scarcity.

Along with that, PT Perkebunan Nusantara III is developing and implementing several initiatives to achieve the commitment targets and reduce the risk of water scarcity, among others:

Improving the water management system by updating the water management plan for plantations and manufacturing that covers the use in cultivation, chemical and natural treatments to utilize water in processing, and water storage based on applicable government regulatory standards
Minimizing the risk of pollution to surface water and groundwater by not using herbicides or chemicals near riparian areas
Planting conservation plants for watershed areas, as an environmental conservation effort based on the role and function of each area in the watershed and includes aspects of protection, maintenance and sustainable use of the ecosystem