2014 health, safety, environment & security

i

2014 HEALTH, SAFETY, ENVIRONMENT & SECURITYANNUAL REPORT

12014 HSES ANNUAL REPORTii

CONTENTForeword .................................................. 2Introduction ............................................... 6HSES Departement Profile ........................... 102014 Achievement & Awards ...................... 122014 HSES Performance ............................ 14- Safety ..................................................... 14- Occupational Health & Industrial Hygiene ... 24

- Environment .........................................30- Emergency Response ............................36- Security ...............................................38- HSEMS & Performance .........................422014 Training & Socialization .................48HSES Key Performance Indicator ..............50

32014 HSES ANNUAL REPORT2

FOREWORD

Boyke PardedePresident/ General Manager

production. Since the WMO block was taken over by PHE WMO in May 2011, PHE WMO has increased its work program and budget very significantly. This can be seen from the increase in the budget of around USD 200M in 2011 to around USD 900M in 2014 to support the intensification of the work program, especially in connection with drilling operations and the construction of production facilities and subsea pipelines, as well as improvements to existing facilities. In 2013-2014, PHE WMO operated 2 to 3 drilling rigs, constructed 4 wellhead platforms and subsea pipelines, and installed jack-up production facilities. Most of this work was carried out by third party contractors. These projects involved approximately 2.5 million manhours in one year. In addition, PHE WMO’s workforce increased from around 250 employees in 2011 to some 520 in 2014. This presents a challenge for PHE WMO as most of the new employees come companies and contractors that have different HSES backgrounds and cultures.

Therefore, we believe it necessary to make all necessary efforts and engage in continuous communication regarding the importance of HSES, as well as to educate people through formal training, induction programs and on-the-job training, so as to heighten people’s awareness of the importance of all HSES programs. We also require all contractors working for PHE WMO to be aware of and fulfill HSES requirements before performing work, and ensure compliance with the CSMS procedures, CoW and other HSES procedures while work is being performed.

To be able to maintain and improve our HSES performance in 2015 and the coming years, we will push forward with our Continuous Improvement program, learning from what has already been done well and correcting those things that need to be corrected. We note that there are three things that need to be improved on in the future. First, supervisors must be active and responsible for ensuring compliance with workplace procedures and safe work practices; Second, risk assessments must be carried out to ensure

the mitigation of existing risks, including the conducting of repeat risk assessments where changes take place in the scope of work; and Third, good communication to ensure that the scope of work and working procedures are understood by the employees involved before the work is commenced, including identifying the risks and the mitigation efforts that need to be undertaken in every aspect of fieldwork.

In addition, to determine the level of awareness and knowledge of all employees as regards the importance of safety in the workplace and on-the-job, we are currently conducting a Safety Culture Survey. The results of this survey will serve as useful input for all of us in formulating strategies for improving our HSES performance going ahead.

Finally, I would like to invite all employees and contractors working in for PHE WMO to maintain our continuous improvement process in various fields. Let’s put our shoulders together to create PHE WMO as a safe and convenient place to work.

Regards,

Boyke PardedeWe are grateful to God Almighty for His protection for PHE WMO so that we were able to successfully and safely complete our work program in 2014, while at the same time significantly improving our HSES performance. This can be seen from the fact that we achieved a TRIR score of 0.641, better than the target of 0.7 that was set by PHE. In addition, we successfully retained our PROPER Green award for environmental management.

These achievements are thanks to the prayers and hard work of all our employees at all levels in PHE WMO, as well as proper planning, work performance in the field, and the conducting of continuous performance reviews.

The improvement in PHE WMO’s HSES performance is not just a coincidence, but rather is the result of the commitment of management and all employees, an awareness of the importance of HSES and participation in the implementation of HSES programs, such as STOP Card, CSMS, Control of Work, incident investigations and follow-up, and the provision of HSES training so as to heighten concern for the safety and security of employees and workplaces.

PHE WMO can be likened to a ship whose passengers are all crew members who have to look after and maintain the safety of the ship until it arrives at its destination. When one of us does something that is unsafe or fails to notify or correct an unsafe condition, this will not only endanger the individual himself/herself but also everyone on the vessel. Such is the importance of safety to our company.

One of PHE WMO’s strategic objective or key of goal as subsidiary of PHE, is ensuring safe and reliable operations. This is a reflection of the company’s commitment to providing workplaces and production facilities that are reliable and safe for both people and the environment. This commitment can also be seen from the annual increase in the budget and number of work programs aimed at ensuring safe operations and asset integrity management (AIM), with the overall aim being to improve personnel and process safety, and the reliability of facilities. The company is fully aware that the effort to improve HSES is not just cost, but rather is an investment that is essential for the continuity of the company’s production operations and for its reputation. The occurrence of an incident would lead to the interruption of operations and could cause large losses in terms of life and limb, the environment and the cost of repairing the facility. We can all learn from the blowout and explosion incident that occurred on the Deepwater Horizon Rig in the Gulf of Mexico, U.S., in 2010.

The endeavor to improve our HSES performance is a challenge that must be faced, in tandem with increasing


T. Parningotan Pasaribu Sr. Manager HSES

The year 2014 was a challenging one for PHE WMO in implementing its operations program and achieve the production targets we have been set. We all should be grateful as we came through the year safely, while our various achievements in the HSES field are a source of pride to us all.

Besides our success in retaining our PROPER Green award and in reducing the incident rate (TRIR), various other HSES programs were conducted so as to help improve PHE WMO’s performance.

Regular MCU programs, health risk assessments and follow-up monitoring of employee health issues are carried out to minimize the potential occurrence of occupational illnesses. And more importantly, we ensure that all employees and contractors working for PHE WMO are in a fit condition to work.

In 2014, PHE WMO managed to maintain its ISO 14001 Environmental Management System certification and OHSAS 18001 Safety Management and Occupational Health System certification, which were obtained by PHE WMO in the previous period. The success of the PHE WMO CIP team in taking two (2) Golds at the CIP PHE Forum reveals that a good culture of innovation is taking root. In addition, a HSES Mandatory Training program has also been initiated to ensure the fulfillment of basic HSES

competencies by all workers, in accordance with the risk levels they face.

The Security Management System has also been strengthened to ensure that all security-related risks affecting the company’s operations are identified and mitigated. Audits conducted by SKK Migas reveal that PHE WMO already has the foundations of a good security management system, but needs to continue making improvements so as to close the existing gaps.

Preparedness for emergencies, both in the field and in the office environment, has also been increased through improvement procedures, drills and tabletop exercises. The readiness of the Incident Management Team (IMT) has been amply demonstrated by its success in dealing with two (2) cases that required the team’s activation.

One thing that we all must realize is that this success is thanks to the cooperation of all employees and contractors in making continuous improvements so as to ensure the sustainability of the company and the environment in and around our work area. The support of stakeholders has also played an important role in helping PHE WMO achieve the set targets.

However, we will face even tougher challenges in the future. The various HSES initiatives that have been instituted will be sustained and strengthened so as to further improve awareness levels among our employees. We will learn from the various cases that have occurred so as to plug existing gaps.

Once again, thank you for your cooperation and support from the entire management team, our employees and contractors, and all involved. Let’s continue to pray and strive to make 2015 successful in the face of the various safety challenges and opportunities that lie ahead.

Regards,

T. Parningotan Pasaribu


INTRODUCTIONBUSINESS & PRODUCTION OVERVIEW

Engaged in the exploration and production of oil and gas, PT Pertamina Hulu Energi West Madura Offshore (PHE WMO) was appointed as the operator of the West Madura Production Sharing Contract (PSC) on 7 May 2011, with its management agreement due to run until 2031.

The long journey of PHE WMO began in 1967 after City Service was signed an exploration agreement, which resulted in the drilling of new wells until 1983 in what became known as the West Madura field. After continuous expansion, PHE WMO successfully produced its first oil and gas from the field in 1993.

Currently, the company’s oil and gas production stands at approximately 20,000 bopd and approximately 114 MMSCFD of gas from offshore facilities located to the west of the island of Madura. The company’s production operations are supported by onshore facilities located in Gresik, East Java.

PHE WMO’s commitment to HSES provides the basis for our success in carrying on our business. PHE WMO will continue to hold true to its commitment to increase production while at the same time playing an active role in improving the quality of life of local communities.


WILAYAH KERJAWORKING AREA

Pipeline to Kangean

ORF GRESIK

SURABAYA

PAMEKASAN

LEGEND

PHE WMO BLOCK

POLENG BLOCK (TAC)

SUMENEPSAMPANG

JOMBANG

LAMONGAN

BOJONEGORO

TUBAN

MOJOKERTO

TUBAN

WHP-A

BANGKALAN

AROSBAYA

AROSBAYA

SAPULUTANJUNGBUMI

PERTAMINA PIPELINE O 28° 380 KM

PPP

POLE

NG

FIE

LD

PERTAMINA ABHERKA

GRESIK

GAS PIPELINE

WELLS

3 PHASE PIPELINE

OIL PIPELINE

KE-2 OIL FIELD

KE-5

CPP

KE-6KE-40

KE24

JAVA SEA

PHE KE-39

PHE KE-38B

PHE KE-54PHE KE38

KE-32

KE-23

PHE KE 30LAMONGAN

SHOREBASE (LSB)

PASURUAN

P. MADURAMadura Island

JAWA TIMUREast Java


HSES PROFILE

The following are description of some functions or department in PHE WMO:

HSES Departement

• Setting HSE MS• Setting KPI & HSE Performance• HSES Advisory Role• HSES Compliance Assurance Role• HSES Performance Review & Monitoring

HSEMS

Responsible for ensuring that the HSE management system is implemented properly through the PDCA cycle.

Safety

Responsible for ensuring that safety standards are properly maintained and applied.

Environment

Responsible for ensuring that the environmental management system is properly implemented in accordance with environmental standards and regulations.

OH IH

Responsible for ensuring occupational health and industrial hygiene standards are implemented properly so as to ensure that all personnel are fit to work.

Security

Responsible for ensuring that the security management system is properly implemented in all PHE WMO operational areas.

Emergency Response & Preparedness

Responsible for ensuring the company’s readiness in emergency response situations.

Senior Manager Health, Safety, Environment &

Security

T.P. PASARIBU

SHAKINAH

Team Assistant

Coordinator Emergency Response &

Preparedness

AGUNG NUGROHO

Lead HSEMS & Performance

DODI SURYADI

Manager Security (WMO & ONWJ)

SATRIO WYARDIONO

Lead Environmental

AGUS SUCAHYO

Field Environmental Officer

SUNU PRIAMBODO

Environmental Engineer

WIDIA KADARSIH

Lead Safety

ERMAN H

Safety Engineer

M. ALI LUKMAN

Safety Officer

FIRMAN SUSILO HIAN AFRIAN

LERRY WENUR

Lead Occ. Health & Industrial Hygene

SAPTA WIBOWO

HSE Gresik Reps

GATOT SETIABUDHI

Occopational Health Officer

ERWIN TAMPUBOLON

Field Health Analyst

HARRY EKAWAN

Industrial Hygiene Officer

FARRAH

Security Supervisor WMO Jakarta

JOHANNES ARITONANG

Non Permanent

Specialist HSEMS & Performance

HANA DIANA

Field Security Supervisor

AGUNG WIBOWO

Cordinator Field Security

PURWOTO


2014 ACHIVEMENT & AWARDS

Throughout 2014, PHE WMO received a number of awards, including:

Tata Birawa award from the Regent of Gresik Award for Environmental DocumentsThe award was presented by the Regent of Gresik on 12 June 2014 as an expression of appreciation for PHE WMO compliance with the environmental regulations.

Award from the Governor of East Java for Environmental Management ReportingThe award was presented directly by the Governor of East Java to the President / General Manager of PHE WMO, Mr. Boyke Pardede, during a ceremony to mark World Environment Day in East Java Province on 25 June 2014.

Corporate Environmental Management Performance Award (PROPER), Green category, from the Ministry of the Environment and ForestryThe award, which was presented on 2 December 2014, signifies that PHE WMO has done more

than is required in the fields of environmental management, has an environmental management system, cares for the community, undertakes efforts to minimize and recycle waste, and undertakes energy and natural resources conservation and efficiency efforts.

Port and Ship Safety Standards Verification (ISPS CODE)On 5 September 2014 the Directorate of Sea Transportation stated that the Poleng Special Port and Terminal had fulfilled the requirements of SOLAS 74, Chapter XI-2 part A, of the International Ship and Port Safety Regulations (ISPS Code).

Award from the PHE CIP Presentation ForumPHE WMO participated in the PHE CIP (Continuous Improvement Program) Forum held on 1 to 3 September 2014. During the event, which was organized by PHE Corporate, two teams from PHE WMO received Gold ratings, while 5 received Silver ratings, and 2 received bronze ratings.

ISO 14001 : 2004 dan OHSAS 18001 : 2007 certification

In 2014, PHE WMO successfully retained its ISO 14001: 2004 and OHSAS 18001: 2007 certifications.


2014 HSES PERFORMANCESAFETY PERFORMANCE

Recordable Incident Rate (RIR) Desember, 2014 = 0.641

2014 Target = 0.7

Fatality : 0

LTI : 0

Medical Treatment Case : 3

Unsafe Observation : 25763

Non Recordable : 3

Near Miss : 5

Property Damage/ Fire/ Prod Loss/ Env case : 14

Based on the rules applied by Pertamina, incidents are classified into a number of categories, such as Fatality, Lost Time Incident, Medical Treatment Case, First Aid and Property Damage / Fire / Production Lost / Environmental Case.

When compared to 2013, PHE WMO’s safety performance in 2014 was quite good, as indicated by the achievement of a TRIR score of 0.641, against

a target figure of 0.7. Throughout 2014, zero Fatality and Lost Time Incidents (LTI) were recorded. Overall, PHE WMO recorded 412 safe man days and 5,321,727 safe man hours, based on the latest LTI calculations.

The incident statistics also record five cases of near misses. This is a cause for concern and the reporting of near misses will need to be improved in the future.

NLTA (SINCE THE LAST LTI November 14th, 2013 at COSL Seeker Rig) : 412 days

TOTAL EMPLOYEE HOURS WORKED TO DATE SINCE THE LAST LTI : 5.312.727

2014 TOTAL EMPLOYEE HOURS WORKED YTD : 4.680.677 (365 days)

Recordable Incident Rate (RIR)

2009 2010 2011 2012 2013 2014

0.640.74

1.59

1.38

1.24

0.97

0.5

0.7

0.9

1.1

1.3

1.5

1.7

Incident Highlight

Although zero fatalities and LTIs were recorded, a number of incidents involving Medical Treatment and Fire were experienced by PHE WMO during the operative period.

All of these incidents were investigated and their causes identified. Thus, it is hoped that they will not recur in the future.

Incident Category By Activity

Use of Energized Equipment

Hazardous Material Handling

Marine Operation

Lifting Operation

15%

20%

10%

10%

15%

30%Process Operation

Manual Handling

Of the incidents that occurred in 2014, 30% related to the operational processes, while 20% occurred when using work equipment. Other causes related to Manual Handling (15%), Marine Operation (15%),

Hazardous Materials Handling (10%), and Lifting Operations (10%).

The findings of incident investigations revealed that the most common causitive factor was a lack of compliance with the standard procedures. This was related to the availability of the procedures in the field, the understanding of employees as regards the importance of working in accordance with the procedures and violations of the procedures, and incomplete or outdated procedures.

Supervisory factors accounted for 13% of incident causes. Supervisors play a key role in controlling and supervising work, and ensuring that employees carry it out safely. Meanwhile, 12% related to Risk Assessment, that is, how a job is assessed for risk and whether the risk assessment that is carried out is comprehensive in nature, or whether some hazards have been missed.


Eye Possessed by Debris Incident during grinding job at PHE-38A (Project) – Feb 20th 2014 – First Aid Case

Minor Lacerated Finger Incident during runing casing job at Seeker Rig (Drilling) – Dec 24th 2014 – First Aid Case

Hand Exposed by Hot Water Incident during coiled tubing job at TC-9 PHE-39 (Well Services) – Mar 16th 2014 – First Aid Case

Pinched Finger Incident during pre-commissioning preparation job at Kalinda Barge (Project) – Nov 24th 2014 – Medical Treatment Case

Pinched Finger Incident during construction preparation

job at PHE-38A Cellar Deck (Project) – Feb 25th 2014 –

Medical Treatment Case

Pinched Fingers Incident during housekeeping job at

TC-6 Aft Side Top Deck (Well Services) – Dec 15th 2014 –

Medical Treatment Case

Incident Category By Injured Body Part

Head & Face

83%

17%Hand & Arm

The following diagram gives a breakdown of incidents by injured body part. A total of 83% of incidents affected the hands while performing work, such as being pinched or scratched by equipment, while 17% of incidents affected the head and face.

Based on the brief description above, it will be seen that there are a number of factors that are the principal causes of incidents, including:

Supervision

Lack of supervision increases the tendency to violate the procedures and opt for shortcuts that are not safe.

Risk Assessment

There is still a misguided mindset that a risk assessment is only needed for the purpose of obtaining a work permit, despite the fact that a risk assessment is something that must be done in order to support the smooth completion of a job based on the identification of risks and how they can be mitigated.

Communication

Communication, in particular, the communication of occupational hazards and control measures, needs to be consistently performed by supervisors to ensure that all risks are identified and mitigated.

Training & Competency

Employees who have received training may not necessarily be competent in their respective fields. A performance in the field of a person who has received training needs to be monitored on a regular basis so as to ensure they possess the necessary competencies.

New employees should be given induction and orientation training that is specific to their respective fields so that they understand the hazards that may be encountered in the field. Induction is essential in order to equip employees with the capacity to stop unsafe work.

Incident Analysis

12%

12%

6%

6%

8%

13%

19%

11%

13%

Communication

Equipment Maintenance

Engineering Design

Work Planning

Procedure

Training & Competency

Risk Assessment

Supervision

Other*


PHE WMO is committed to close whatever gaps there are so that the potential for incidents can be reduced. Through continuous improvement efforts, PHE WMO has developed its Incident Prevention Strategy in order to improve its safety performance in the future.

As a measure to prevent incidents, PHE WMO has formulated 6 strategies, namely, Control of Work (CoW) Program, Safety Supervision Program, HSE Induction Program, Hand Injury Prevention Program, Near Miss Reporting Encouragement Program and Safety Culture Assessment Program.

• Defining roles and responsibilities are both instrumental in determining the progress of a company. PHE WMO is committed to continuous improvement in all areas of the company and ensuring that every individual understands what his or her duties and responsibilities are. This is achieved by, among other things, conducting Training and Competency Assurance, Work Planning, Risk Assessment, and Communication.

• A good understanding of the safety aspects on the part of the AA (Area Authority) and SC (Site Controller) plays an important role in

improving safety performance. Therefore, a Safety Supervision Program needs to be implemented so that they can gain a better understanding as to how to manage safety.

• PHE WMO must develop specific induction programs for each work area so as to accommodate the need for specific information regarding the HSE requirements in the field. Personnel also need to know their obligations to stop unsafe work. A Site New Personnel Orientation Program needs to be developed and implemented in each field so as to ensure that all new personnel gain a proper understanding of the hazards related to their work places.

• As reported previously, 83% of the incidents that occurred in 2014 affected the hands. Consequently, the Hand Injury Prevention Program will continue to be implemented by PHE WMO.

• Incidents can be minimized if all Near Misses are fully reported. Unfortunately, an awareness of the need to report has yet to take root. Consequently, the awareness and courage needed for effective reporting must be cultivated

Occupational Safety Program

Safety Observaton Program

Unsafe Cond

Unsafe Act

Safe Cond

Safe Act

50%33%

8%

9%

STOP Analysis 2014

The Safety Observation Program is conducted by personnel by observing whether a particular situation is safe or unsafe so that as to prevent the occurrence of incidents at work.

The program is conducted using the STOP Card approach. Through this program, personnel are trained to observe, improve and report on safe and unsafe working environments.

To monitor and expedite implementation on the ground, champions are appointed in each department. These champions verify the data reported on the STOP Cards so that all incoming data satisfies the requisite criteria.

The safety observation program requires passion and an awareness of safe working practices. It not only requires the completion of observation cards, but also requires the application of an intervention cycle consisting of: Deciding> Observing> Stopping> Acting> Reporting. One of the most important things is the process of communication with personnel during safety observation interventions. This is necessary so that personnel can be encouraged to do apply good practices or habits in performing their work and identifying and subsequently discussing unsafe behavior / conditions and the hazards posed.

The safety observation program does not focus solely on the number of cards collected, but also

so as to reduce the number of incidents that result in injury or loss. This is why the Near Miss Reporting Encouragement Program will continue to be implemented by PHE WMO as a preventive strategy.

PHE WMO conducts Safety Culture Assessments to determine the actual state of safety culture in

on the quality of the observations made and the hazards that would result if action is not taken.

The findings of the Safety Observation Program in 2014 reveal that the percentage of observations that involved safe actions amounted to 50%, and 33% in case of safe conditions, whereas observations involving unsafe acts amounted to 8% and unsafe condition 9%.

the company. Improvements in the company’s safety culture will have a positive effect on safety performance and help keep incidents to a minimum.

Our progress in reducing incidents in 2014 was the result of the various safety programs that we have implemented to date.


Analysis of Safety Observation Program findings by PHE WMO Office Area in 2014

The highest percentages in the unsafe act category were individual behavior (33%), procedures (25%), and a person’s position (23%). The lowest percentage in the unsafe act category was for personal protective equipment (7%).

Analysis of Safety Observation Program Findings by Field Area 2014

Performance in the PHE WMO work fields reveals that one observation per person per day was collected. As shown in the diagram above, the percentage of observations involving unsafe acts

and unsafe conditions amounted to 50% of the observations involving safe act and conditions.

The unsafe act that was most frequently observed was non-compliance with working procedures.

Non-compliance as regards the use of personal protective equipment most commonly involved hand and arm protectors. This finding indicates that the hands and arms are the body parts most vulnerable to injury.

In the equipment and supplies category, the dominant observation concerned the use of non-standard equipment.

Procedure & Orderlines

Position of people

Reaction of people

Tools & Equipment

PPE

Safety Observation Program for Office Area

Safe

Unsafe

Reject

Safety Observation Program for Site Area

50%

50%

As part of the effort to ensure that contractors working in the PHE WMO area also have HSES management systems in place, we apply the Contractor Health Safety Environment Management System (CHSEMS). The application of CHSEMS by PHE WMO refers to CHSEMS Guideline No. PHEWMO-HSE-G-06. To accelerate the implementation of CHSEMS, especially in the case of contracts that are high risk, designated representatives from each department were appointed as CHSEMS Champions in 2014 to oversee and monitor the implementation of CHSEMS in their respective departments.

Pre-qualification is the first stage in the PHE WMO CHSEMS and involves the selection of contractors that it is believed will be able to manage the HSE aspects of high-risk jobs.

Since 2010, all vendors / bidders participating in tenders for high-risk job have been assessed at the pre-qualification stage.

Starting in 2014, PHE WMO has been providing CHSEMS coaching to 5 local vendors in Gresik. For 2015, such coaching of local vendors will also be provided in Jakarta and its surrounding areas.

The field implementation stage in the CHSEMS cycle is aimed at ensure that the risk assessment and Occupational Health, Safety and Environmental Protection aspects relevant to the

work are communicated and understood by all parties prior to the start of contract performance until the end of the contract.

In 2014, there was an increase in compliance during the field implementation stage (PJA, WIP & FE) from 38.50% in 2013 to 48.28% in 2014. Other programs that have been carried out include:

1. CHSEMS familiarization program for CHSEMS Champions, covering a total of four (4) batches of participants.

2. CHSEMS Internal and External Audits3. Conducting of assessments and development of

CHSEMS procedures, HSE plan sand HSE criteria for inclusion in contractual documents.

CHSEMS Implementation Status

New PQ

Refreshment

Failed PQ

25%

33%

7%

23%

12%

27%

73%

31%14%

22%

11%22%

150

100

50

0

20112012

20132014

2011 - 2014 PQ MONITORING


Control of Work includes clear definitions of roles, planning responsibilities, risk assessment, authorization, work performance, performance assurance, and follow-up corrective action.

Objectives:

• To ensure that work is carried out safely.• To prevent accidents.• To improve work efficiency and productivity

through structured planning.• To establish a culture that supports continual

improvement.

Control of Work Implementation

The implementation of CoW is carried out intensively by the Task Force Team. Training and workshops are held to ensure that all key personnel have a sufficient understanding of CoW. In 2014, 33 batches of employees attended CoW training and workshops in the field and at the Jakarta Office. Overall, more than 880 personnel have received CoW training to date.

To ensure that the training and workshops comply with the relevant standards, CoW facilitators attend Training of Trainers courses. Currently, PHE WMO has 22 CoW facilitators.

One of the ways in which the monitoring and improvement of CoW implementation in the field is carried out is through the conducting of daily and weekly audits. Improvements are also continuously made to CoW procedures and training materials.

To assess the level of company compliance with the Control of Work (CoW) standards, the company conducted an internal audit in July-November 2014 covering several areas, such as the Lamongan Shore Base, Poleng, PHE-5, ORF, MOPU BOSS 1, Marine and Terminal, Java Star Rig, Rig Seeker, TC-6, and the Pipeline Relocation Project.

The first year CoW implementation has shown significant improvements, with a reduction in recordable incidents from 9 cases to 3. PHE WMO will continue to make continual improvement in order to increase the company’s level of compliance in the years to come.

Program Improvement CoW

There are a number of key recommendations that will be acted upon by PHE WMO in 2015, namely:

• Improving the consistency and commitment of AA (Area Authorities) and SC (Site Controllers) as they are responsible for safety management and accordingly constitute the entry points for success in all areas of CoW application.

• Conducting Competency Assurance on all key personnel without exception (through training, assessment, and authorization).

• Holding compulsory planning meetings that comply with the standards, bridging gaps by requesting contractors to comply with the requirements in accordance with company standards, and conducting regular audits.

Control of Work (CoW)

Application of CoW in the field

Safety Culture

HSES Inspection and Management Walk Through

PHE WMO is committed to continuously improving our overall safety performance. The company has made significant efforts and investments in continuous safety improvements. PHE WMO conducts Safety Culture Assessments to determine the actual state of safety culture in the company. Improvements in the company’s safety culture will have a positive effect on its performance and in the form of reduced incident levels.

The Safety Culture Assessment process is divided into a number of stages, namely:

• Conducting Safety Perception Surveys to identify employee perceptions of the safety aspect.

• Conducting field assessments in the form of individual interviews and field visits so as to identify the effectiveness of safety program implementation on the ground.

To ensure that PHE WMO’s operations are conducted in accordance with the established standards, the HSES Department will carry out HSES inspections in all PHE WMO areas. Management commitment in the HSES field is clearly demonstrated by the conducting of HSES management walk-throughs. In 2014, a total of 15 management visits / management walk-throughs were conducted throughout PHE WMO’s operations areas.

• Developed the Safety Culture Survey Program and ensured it was implemented

• Safety Culture Index: Actual 2014

• Conducting follow up on the findings of the Safety Culture Survey 2014• Continuing implementation of the Safety Culture Survey Program• Safety Culture Index: Actual 2014 + 10%



2014

2015

2016

2017

SAFETY CULTURE ROADMAP

• Holding leadership workshops to determine improvement and enhancement strategies based on the findings of Safety Culture Assessments.

The findings of Safety Culture Assessments are communicated to all PHE WMO personnel and each recommendation is acted upon, as appropriate.

Partisipasi GM PHE WMO pada safety perception survey


OHIH PERFORMANCESite Clinic Activity

Hygiene Inspection

Employee Health Inspections

Without us being aware, unhealthy lifestyles can give rise to a variety of health complaints and diseases. If left unchecked, this can have an impact on company productivity.

As a both a preventative measure and compliance with the provisions of Law No. 13/2003 (on Manpower), Article No. 36/2009 (on Health and Law), and Ministry of Manpower and Transmigration Regulation No. Per.02/MEN/1980 (on Employee Health Screening in the Workplace so as to ensure the Health and Safety of Employees), PHE WMO provides medical check-ups for its employees. These check-ups, which are conducted once a year on all employees, are also aimed at improving the protection of employees from health problems that can occur in the workplace and surrounding areas.

During 2014, PHE WMO provided annual medical check-ups to 469 employees, consisting of 240 employees in Jakarta and 229 in Gresik. The results were generally quite good and no major health

problems were discovered during the check-ups. In Jakarta, one individual was certified as Fit and 239 as Fit with Medical Notes, while in Gresik 8 were certified Fit and 219 Fit with Medical Notes. Another 2 individuals were certified as being Temporarily Unfit.

Occupational Health & Industrial Hygiene

Its employees are the main assets of an active operational company. For that reason, the Occupational Health (OH) and Industrial Hygiene (IH) function is committed to continuously developing its OH & IH program for implementation in all areas of the company’s operations, both in the office and in the field (onshore and offshore).

The program was consistently implemented in 2014. It consists of Site Clinic Activity, Epidemiology, Food & Sanitation Inspections, Health Talks & Campaigns, Medical Emergency Response Preparedness (MERP), and the Entry Permits System (Field Entry Permits and HSE Passports).

PHE WMO provides first-aid posts (FAP) as facilities where first aid is provided in emergencies that result in injuries or illnesses in the workplace. Field medical personnel work on a daily, weekly and monthly shift

basis. Based on the data for 2014, overall it will be seen that clinic visits by offshore employees (PHE-5, TC-6, and MOPU BOSS 1) were more frequent than clinic visits by onshore employees.

Cleanliness in the workplace is also a focus of PHE WMO, which conducts weekly hygiene inspections in each facility, particularly those related to food and sanitation in the workplace. These inspections found a number of hygiene-related problems, such as the persistence of pests in sleeping areas, as well as cockroaches. These problems are being addressed in a coordinated manner by related functions, such as Onshore Facility Management (OFM), so that the necessary corrective measures and steps can be taken.

ORF

PHE-5

FSOA

TC-6

KS-JAVA Star Rig

COSL Seeker Rig

MOPU BOSS-1

AWB Paradigma

SITES

50

42

55

49

48

32

36

8

Hygiene Inspection

983

0

Compared Total Visit

ORFPH

E-5 TC-6

KS-JV

COSL-S

MOPU-B1

AWB PARA

DIGMA

FSO-A

BHER

KA

200

400

600

800

1000

1200

719

1052

759673

122264

137

137

59

11478

95 100

45

228

0

Average POB

ORFPH

E-5 TC-6

KS-JV

COSL-S

MOPU-B1

AWB PARA

DIGMA

FSO-A

BHER

KA

50

100

1500

200

250


Epidemiology

Health Promotion

MERP

Based on a breakdown of sickness episodes by area, respiratory and ENT problems tend to predominate, with around 573 cases of respiratory and 357 ENT sickness episodes being recorded.

To improve knowledge about health and the dangers of occupational illnesses, counseling and health education (health talks) are provided by the company, and a health bulletin is produced and distributed as part of the Health Promotion Program.

Given that the operations of PHE WMO are quite intensive, including production, marine operations, drilling services, projects, engineering, logistics, etc., most of which operate 24 hours a day in high-risk environments, a high level of Medical Emergency Response Preparedness (MERP) is required. This program includes the conducting of emergency response exercises on a regular basis. The Emergency Response Team (ERT) once again received training from doctors who work in the field so that they can respond effectively to occupational accidents.

0

200

500

100

400

300

600

Respiratory

Musculoskeletal

Ear, Nose & Throat

Gastro-intestinal

Special Symptoms

Dermatology

Dental Problems

Opthalmology

Infections

Cardiovascular

Miscellaneous

Metabolic & Endocrine

Injury/Trauma

Poisoning

Genito-urinary

Mental Health

Hepato-biliary

ORF

PHE-5

FSOA

TC-6

KS-JAVA Star Rig

COSL Seeker Rig

MOPU BOSS-1

AWB Paradigma

SITES

37

20

34

49

21

17

41

4

Health Talk

21

35

16

19

27

18

6

4

Health Bulletin

Drill / Exercise

Exercises are scheduled for once a month, in coordination with HSE personnel in their respective workplaces. A total of 36 medical drills were carried out in 2014, with all PHE WMO first-aid posts participating.

Medevac

PHE WMO provides a number of types of emergency transportation by land, sea, and air to facilitate the evacuation of victims in cases of medical emergencies (medevac) where such evacuation is required. The emergency medical transportation that is available includes one ambulance (24-hour operation) stationed at the Onshore Receiving Facility (ORF) and another at the Lamongan Gresik Shore Base / Logistic. Another ambulance has been provided by a contractor (Eastern Logistics) to handle any cases requiring immediate medical treatment in the workplace and subsequent transfer to hospital. Medevac operations at sea are carried out by boat, while medevac operations by air are carried out by helicopter.

Entry Permit

PHE WMO is also committed to ensure the health and safety of all personel who are required to enter workplaces that entail high-risk levels, both on land (onshore plant) and offshore (offshore plant). Every worker will only be given permission to enter the work area if he or she fulfills the conditions specified in the HSE Passport & Field Entry Permit Procedure (PHEWMO-HSE-PH-OH-01).

There are two types of Entry Permit, namely, field entry permits (FEP) and HSE Passports. The major difference between these two types of permit is their respective periods of validity. The details related to each type of permit are set out in the Field Entry Permit & HSE Passport Standing Order.

During 2014, the HSES Department issued a total of 4,306 FEPs and 1,588 HSE Passports.

The highest number of FEPs was issued in December 2014 (545), while highest number of HSE Passports was issued in September 2014 (257). The increase in the issuance of FEPs in December 2014 was due to an increase in the number of personnel working on pipeline relocation under the supervision of the Projects Department. As for HSE Passports, the demand was greatest from the Drilling and Completion Department.

2014 HSE Passport & Field Entry Permit

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

107 104143 117

76125 102 115

257201

122 119187

474 449

336

415

545

320267

364 357314 296

HSE Paspor FEP

HSE Paspor FEP

0

400

200

600

800

1000

1200

1400

1600

1800

1370

287

59120

29

846

1560

437 2 2 1 13 13 1 1 1 3 37 30 9 6 1

Dril

ling

Expl

oita

tion

Expl

orat

ion

FE&

I

HSE

S

OBS

Ope

ratio

n

Proj

ect

Acc

ount

ing

Fina

nce

HRS

SR

Inte

rnal

Aud

it

Man

agem

ent

ISBP

SCM


Indoor Air Quality & Fresh Water Assessment

One of the ways to monitor hazards in the workplace is to measure indoor air quality and conduct fresh water assessments. Monitoring is carried out in accordance with the prevailing regulations, namely:

1. Decree of the Minister of Health of the Republic of Indonesia No.1405/Menkes/SK/XI/2002, on Health Requirements in Office and Industrial Workplaces.

2. Regulation of the Minister of Manpower and Transmigration of the Republic of Indonesia No. 13 of 2011 on Upper Limits for Physical and Chemical Elements in Workplace Air.

3. Regulation of the Minister of Health of the Republic of Indonesia No. 416/Menkes/Per/IX/1990 (Annex II) on Water Quality Requirements.

4. Threshold Limit Values (TLVs), American Conference of Governmental Industrial Hygienists, 2014.

Broadly speaking, the identification of factors that pose potential hazards in the working environment covers:

1. Quality of Working Environment (working environment ambient air), consisting of chemical elements (CO, CO2, SO2, NO2, NH3, H2S, formaldehyde and particulate), microbiology (bacteria in the air) and physical factors (flow rate, temperature, humidity , floor vibration, lighting and noise).

2. Water Quality (Chemistry, Physics and Microbiology Parameters), the laboratory analysis of which is conducted based on the Indonesian National Standards (SNI) and the standards issued by the National Institute of Safety and Health (NIOSH).

Control over the humidity and temperature parameters is effected by regulating the room ventilation system. As regards the noise parameters, these are controlled through the application of the hearing conservation program in the workplace.

Industrial Hygiene

PHE WMO conducts Chemical Risk Analysis that involve the identification and evaluation of prevailing processes. Data and facts are ascertained by direct observation on the ground and the conducting of MSDS reviews.

Based on the findings of identification and evaluation, Similar Exposure Groups (SEGs) are identified based on work unit and the level of chemical hazard affecting it, as shown in the table below:

Based on the chemical risk analysis that have been conducted, it has been found that the drilling department for cementing activities faces a high level of risk that needs to be managed properly. Other operations were ranked as medium to low risk, such as irritation to the eyes and respiratory tract, and dermatitis.

Chemical Health Analysis

TBD : to be determined. Based on available data from MSDS, no R-phrases identified to determine degree of hazard.

No

1

2

3

4

5

6

7

Departement

Production

Drilling

Well Services (TC-6)

Facility & Maintenance

Facility & Maintenance

Location

Offshore platform; PPP, PHE-5

Offshore; KS-Javastar

Offshore

Lamongan Warehouse

ORF Gresik; PHE-5 Chemical Injection Laboratory

All location

All location

Degree of Hazard Remark(s)

Depending on the chemical product being use in a process

Inhalation

Low to Medium

Medium to High

Low to Medium

Low

Low

Low

Medium

Skin

Low to Medium

TBD

Low to Medium

Low

Low

Low

Low

Similar Exposure Groups (SEGs) as Work Unit

Chemical Injection

Cementing

Well Stimulation

Storing chemical

Laboratory Practice

Cleaning accomodation & facilities

Pest Control


ENVIRONMENT PERFORMANCE

In line with its commitment to support environmental sustainability, PHE WMO has adopted and evaluated an Environmental Management Strategic Plan for the period 2014-2017, which covers compliance with the applicable regulations, energy conservation, water conservation, air quality management and emissions reduction, the treatment of hazardous and non-hazardous waste, conservation of biodiversity in the company’s operating areas, and ensuring the prevention of environmental pollution.

To ensure the success and sustainability of the environmental management program in accordance with the Environmental Management Strategic Plan for 2014-2017, an Environmental Management Task Force has been established to regularly conduct comprehensive evaluations and to identify opportunities to improve environmental performance, develop practical programs that are capable of being implemented, and ensure that environmental performance evaluation criteria are met.

To support the sustainability of effective environmental management and permit continuous improvement, PHE WMO applies the ISO 14001 Environmental Management System. The company has also received a second certification from an independent certification body (PT. SGS Indonesia), which is valid until 2017.

Energy Efficiency

The energy needs of the oil and gas sector are significant, both as regards production and support facilities. With the availability of nonrenewable energy sources becoming more limited and greenhouse gases potentially causing global warming, PHE WMO is committed to consistently applying energy efficiency initiatives.

To support these initiatives, PHE WMO conducts energy audits to analyze energy management and identify potential savings. In 2014, PHE WMO succeeded

in reducing total energy consumption by 167,328 MMBTU from the previous year. The initiatives that have been introduced to date include: • Converting forklifts from diesel to battery power.• Insulating fuel gas piping so as to maintain

the temperature of the fuel, thus maintaining its quality and combustibility.

• Re-designing the heat exchangers that cool the gases produced by compression so as to simultaneously use them to increase the temperature of crude oil.

• Installation of solar panels as DC power sources for SCADA, navigation lights and lighting so as to significantly reduce diesel use.

• Replacing TL, sodium vapor gas and hallogen lamps with energy efficient lighting - LED.

• Retrofitting and replacing refrigerant with non CFC refrigerant that is more environmentally friendly and more energy efficient.

• The Integrated Logistic Support Program, which manages deliveries from the warehouse to the offshore field and vice versa based on the application of ISO 9001: 2008.

Reducing Emissions

The company’s efforts to manage and reduce emissions have been underway since 2014, when PHE WMO successfully effected a reduction of 1202,43 CO2e from its operations support activities. This decrease was obtained through the following initiatives: Conversion of forklifts from diesel to battery power; provision of a shuttle transportation service for employees; Re-designing the heat exchangers that cool the gases produced by compression so as to simultaneously use them to increase the temperature of crude oil; Installation of solar panels as DC power sources for SCADA, navigation lights and lighting so as to significantly reduce diesel

2009

0.10

0.300.30

0.35

0.53 0.53

0.610.65

0.60

-

0.20

0.50

0.40

0.70

Intensitas energi (GJ/TOE)

2010 2011 2012 2013 2014

use; and Retrofitting and replacing refrigerant with non CFC refrigerant that is more environmentally friendly and more energy efficient.

Comprehensive and integrated calculation of emissions generated from operating activities is conducted using an online application known as the Emission Monitoring and Reporting System (EMRES). To ensure the accuracy and consistency of emission load calculations, in 2014 PHE WMO underwent an external verification in connection with the ISO 14064 certification process (Green House Gas Calculation and Reporting).

Reduction in Liquid Waste

Through the Produced Water Injection re-design program to maintain pressure in the PHE WMO reservoar, the company has successfully reduced liquid waste discharges into the sea.

Water Conservation

In 2014, PHE WMO was able to conserve some 950 m3 / year of water through the program for the utilization of HVAC condensation water on platforms for domestic needs (ablutions, washing the deck). Other programs include the processing of sea water into fresh water for domestic needs on the platform (reverse Osmosis unit), excavating bio-pores to accommodate water condensation in ORF, and rain-fed reservoirs to collect rain water for washing vehicles.

Environmental Programs


• MIO (Mangrove in Office)Currently, the PT. PHE WMO team is in the process of finalizing its research on mangrove plants that can live in fresh water. Thanks to this program, mangrove seedlings can be placed in vases as table decorations while simultaneously absorbing pollutants. When the seedlings get bigger, they can be transplanted to their natural habitat.

• OTAP (Foster A Tree Program)The Foster a Tree Program (OTAP), which is based on a “one man one tree” approach, involves the voluntary planting and maintenance of trees by employees.

The program commenced in 2013 and to date some 100 trees of various species have been planted in the open yard of the Onshore Receiving Facility (ORF). The trees help settle dust and absorb greenhouse gas emissions.

Operation Ant (Garbage Picking Spirit) was launched to mark National Waste Day, and represents a manifestation of PHE WMO’s concern for good environmental management in the company’s operations areas and commitment to waste management. As part of Operation Ant, the company invites local people to display their awareness of the importance of a clean environment by collecting trash for further processing.

Waste Management

Non-hazardous solid waste generated from domestic activities and supporting facilities is managed based on the 3Rs (Reduce, Reuse, Recycle). In 2014, the company successfully reduced the amount of waste it produces by 5.94 tonnes/year, through the following programs: reduction in document printouts by introducing an Access Control Card system for multi function printers (MFP), reduction in the use of paper paychecks through the introduction of e-pay slips, replacement of wooden pallets with plastic pallets (reusable), replacement of a cardboard meal boxes with reusable containers, and a reduction in the use of plastic drinking water bottles and their replacement water canteens and glass bottles. In addition, in 2014 the company also successfully recycled 3.92 tonnes / year of solid waste through the garden waste composting program, paper recycling program (in collaboration with local communities), and the allocation of recyclable waste (paper, wooden pallets, plastic bottles) to the local garbage bank, which has been fostered directly by PHE WMO.

Hazardous Waste Management

With the objective of protecting the environment from hazardous waste, PHE WMO conducts a variety of efforts to reduce the amount of hazardous waste that it generates. In 2014, the quantity of hazardous waste

produced by PHE WMO fell to 1,761 tons / year thanks to the following programs: reduction in battery waste through replacement of VRLA (valve-regulated lead acid) batteries, reduction in mixture solid waste through the application of Lean Warehousing, the 5S and ISO 9001: 2008, reduction in hazardous waste through the performance-based system for the procurement of chemicals, and reduction in cartridge waste by returning packaging to vendors, reduction in waste oil through the application of the RCM (reliability center maintenance) method.

Biodiversity Program

Environmental Campaign Program

238.54 249.01

Avicennia marina Rhizaphora stylosa

25.555.35 42.75

250.9 258.2 255.6

200

Avicennia marina

Comparison of Mangrove Importance Value Index, Slip Category

Rhizaphora stylosa

143.72

11.75

182.55

85.25

27.6950.99

129.55

• Planting of 20,000 mangrove trees in mangrove conservation zone in the company’s operations are to mark World Environment Day on 5 June 2014. It is hoped that this will boost the sustainability of mangrove forests, protect coastal areas and provide benefits to local communities.

Tahun 2012 Tahun 2013 Tahun 2014 (SMT 1) Tahun 2014 (SMT 2)

200

Avicennia marina Rhizaphora stylosa

200

143.75

62.594.44

124.2990

0

Roadmap CSR PHE WMO PHE WMO

443.3 68.2

511.5 511.5 246.4

0 246.4 246.4

0 0 0

7,750.00

32,569.87

59,168.45

91,738.32 91,738.32

-‐

10,000.00

20,000.00

30,000.00

40,000.00

50,000.00

60,000.00

70,000.00

80,000.00

90,000.00

100,000.00

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

Tahap 1 (Juli 2013)

Tahap 2 (Oktober 2013)

Total Th. 2013 Total Th.2014

µg/g

(NO

2)

dan

g/m

3 (d

ebu)

kg/pohon/ tahun (CO

2)

Grafik Serapan Emisi Program OTAP

Serapan debu

Serapan NO2

Serapan CO

Reduksi CO2

Comparison of Mangrove Importance Value Index, Tree Category

Comparison of Mangrove Importance Value Index, Nursery Category


Environmental Sensitivity Index

An ESI provides important baseline data and guidelines in prioritizing what needs to be done as part of mitigation efforts under the oil spill contingency plan, as well as pollution prevention and environmental protection in coastal areas and on offshore. However, apart from that, an ESI is an important tool that can be used to provide further input for good environmental management in coastal and offshore areas.

An ESI map provides a description of a sensitive area that is based on a study of its biological, socio-economic and socio-cultural value in a particular coastal and maritime area and is is used to prioritize the response to an oil spill (NOAA, 1992). An ESI is presented in the form of integrated spatial display using Geographical Information System (GIS) techniques.

An ESI study is composed of three main components, namely:

1. Classification of coastline types based on their level of sensitivity, ability to respond to oil and ease of cleaning.

2. Biological resources, including biota and habitats that are sensitive to oil spills / leaks, such as fish-farming infrastructure, mangrove forests, coral reefs, spawning grounds, maritime areas that include migration routes, etc.

3. Resources used by human beings, for example, tourist, residential, industrial and port areas, plantations and a variety of other resources that are vital for human economic activities.

The third components described above are then analyzed by IPIECA and NOAA into 3 (three) separate indices: Vulnerability Index (CI), Ecological Index (IE) and Social Index (IS), from which the EIS is subsequently derived.

ESI maps categorize the response to an oil spill into five levels.

Oil Spill Response

MoTuM and ESI

With increasing PHE WMO offshore exploration and production operations, the potential risk of an oil-spill incident at sea has also increased. Oil spills negatively impact the environment, from marine life to coastal communities.

As part of the Company’s efforts to ensure occupation health and safety, and environmental protection, and in compliance with SKKMigas

Regulation No. PTK-005/BP00000/2011 (on the response to oil spills), and Regulation of the Minister of Transportation PM No. 58 of 2013 (on the Prevention of Pollution in Water Bodies and Ports), PHE WMO has formulated a comprehensive oil-spill emergency response plan. In applying this plan, PHE WMO uses Oil Spill Trajectory (MoTuM) and Environmental Sensitivity Index Mapping.

Oil Spill Trajectory

Oil Spill trajectory, which uses the MoTuM application (Oil Spill Model), provides predicted trajectory models for oil spills in maritime waters by using data on ocean currents, wind direction, and the characteristics and the actual amount of oil spilled. Rapid and accurate predictions of the movement and phases of oil spills are needed as a basis for deciding on fast and precise oil-spill response measures so as avoid pollution, or at least minimize its impacts, especially in sensitive areas (estuaries, beaches, coral reefs, mangrove forests, and maritime areas that local communities depend on).

Sumber:Buku Keanekaragaman Hayati PHE WMO “Harmony in Biodiversity”


EMERGENCY RESPONSE

* : Roles wit (*) are considered as Supporting and/or Optional roles to the Incident Management Team (IMT)** : Typically the On-Scene Commander (OSC) comprises of the Production Superintendent (offshore Incidents)/ Marine & Terminal Superintendent (FSO & Marine

Incidents)/ Field Operations Manager (ORF)/ Company Site Representative (CSR)

IMT Organizational Structure

BST Leader

Duty Incident Commander

Safety/ Security Officer

Legal Officer*

Operations Section Chief

On Scene Commander

(OSC)**

Technical Specialist(s)*

Situation Unit Leader

Documentation Unit Leader

Procurement/ Supply Unit*

Accounting Unit*

IT Officer*

Medical Unit*

Insurance & Claims Unit*

Facilities Unit*

Planning Section Chief

Logistic Section Chief

Finance & Admin Section Chief

External Relations Officer

Human Resources Officer

In order to improve preparedness in responding to emergencies (both in the field and at head office) that affect workers, the environment, company assets, and surrounding communities, PHE WMO has had a crisis management procedure in place through the IMP (Incident Management Plan) since 2012.

With reference to the ICS (Incident Command System), PHE WMO has allocated personnel to a BST (Business Support Team) to make plans to ensure the continuity of our business in the long term, and an IMT (Incident Management Team), who are responsible for ensuring the provision of support for all operational aspects during an emergency in the field.

Preparedness is ensured through the application of an IMT weekly duty roster. Thus coordination in PHE WMO between head office in Jakarta and the field is maintained. Coordination and communication with external parties is also maintained, including with stakeholders such as BASARNAS, so as to ensure that an emergency does not spiral out of control.

One of the preventive measures undertaken during 2014 was the provision of training to develop our competencies during the ERP. These endeavors included:

1. “Burung Akrehba” IMT Exercise and Simulation (March 13, 2014). The PHE WMO IMT simulated an emergency response so as to familiarize itself with the notification procedure, and activation and mobilization of the IMP to the ICP (Incident Command Post).

2. PHE Tower Earth Quake Drill (March 13, 2014)Post-earthquake evacuation drill.

3. Arkadia Tower Earth Quake Drill (June 4, 2014)Earthquake evacuation drills.

4. “Laut Biru” Oil Spill Exercise/ Marpolex (21-22 October 2014). The Laut Biru oil spill response exercise included classroom sessions, dry dills, and practice with the deployment of equipment (wet drills).


SECURITY

As part of the endeavor to improve and develop the Security Management System, PHE WMO published its Security Management System Manual in June 2014. This step received the full support of Top Level Management, as evidenced by the issuance of a memorandum on the appointment of a Security Management Representative and an Implementation Team.

For security in the area of Field Operations (Offshore, ORF and LSB) in 2014, a number of activities were carried out based on our three security strategies, namely:

I. Pre-emptive: activities aimed at identifying the signs of a security problem at an early stage (as part of the early warning system) before they become a potential security disruption. This involved the following activities: • Familiarizing fishing communities and

stakeholders with the law, and empowering local communities to participate in securing the Company’s assets and activities in Poleng, Gunung Kampek, PHE 23 PHE 30 and PHE 40 (Community Based Security)

• Collaboration with the local security authorities, such as police, military and KPLP for the purpose of obtaining information on security matters.

II. Preventive: The endeavors made to prevent and mitigate potential security threats include:• Strengthening sea patrols, checking crew members

during crew changes at the jetties, and access control at ORF and LSB.

• Securing bunker operations, lifting in Aberkha, security patrols along the pipeline with the KPLP and providing security during the transportation / use of explosives.

• Implementation of the International Standard Port Security Code (ISPS Code) by appointing a Field Security Lead as Port Facility Security Officer (PFSO) responsible for security at the ABHERKA Special Port (Floating Storage and Offloading)

• External audits by SKK Migas and Pertamina Upstream Directorate on the security management system.

III. Law Enforcement: Law enforcement by following the legal process in respect of crimes and entrusting the handling of security problems to the police. In this respect, Security:• Engages in routine coordination with the East

Java Police Police, Gresik Police, Bangkalan Police, Porong Naval Base and and the Gresik District Military Command.

Security Field Operations

Starting 1 October 2014, all employees had their ID / access cards renewed. A total of 932 new cards have been issued to 539 permanent employees and 393 contract employees / TPC, both at the Jakarta office and the Gresik ORF Office.

Renewal of ID / Access Cards

Renewal ID Card/Access Card Process

ADMINISTRATION

PRINTINGDISTRIBUTION

FAMILIARIZATION DATA COLLECTION

PHE WMO received the highest score of 8 K3S during a Security Management System Audit carried out by SKK Migas on 28-30 October 2014, as well as in connection with our implementation of the Regulation No. 24/2007 on the Security Management System.

To ensure the effectiveness of the Security Management System, internal audits are conducted on a regular basis.

External audits are also conducted by the SKK Migas audit team and the PT. Pertamina Persero Upstream Directorate’s audit team. In the audit conducted by SKK Migas, PHE WMO received a score of 60, which was the highest score achieved by the 8 PSC that were audited by SKK Migas in 2014.

Security Management System Audit

Check list Audit Security PHE WMO

No

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

Requirements

Building and sustaining commitment

Legal requirements

Security risk management

Objective and Target

Planning and Program

Training awareness and competency

COnsultancy, communication & Participation

Document & data control

Emergency response

Operational control

Monitoring & measurement performance

Reporting, correcting deficiencies & Preventive Action

Collecting and Data Analysis

Auditing of management system

Management review

Continual Improvement

N/A 1

√

√

√

√

√

√

√

√

√

√

√

√

√

√

2

√

√


Security Disturbances

2014 SECURITY INCIDENTIAL AREA

Demonstrations continued to be the dominant security disturbances in 2014.

To deal with such disturbances, the PHE WMO security team works closely with the police to provide security in the ORF Gresik area so that the demonstrations passed off peaceful and without any losses.

AREA INCIDENTS

Jakarta Office

Offshore/Field Ops

Total

0

0

0

0

2

2

0

0

0

0

0

0

0

0

0

0

0

0

0

2

2

OthersInformationSabotageDemonstrasiPencurian Penelpon gelap

TOTAL


In the HSES management system, we maintain a total of 105 documents that consist of 8 Manuals, 70 TKO / Procedures, and 27 TKI / Work Instructions that are related to compliance with the HSES requirements. In 2014, we prepared three new procedures and

conducted a review / updates of 16 procedures. All of these procedures went through a comprehensive process of discussion and approval in the relevant departments. To facilitate access to the documents, they are all posted on the PHE WMO intranet.

HSEMS & PERFORMANCE

As part of our commitment to ensuring that the HSES management system is implemented properly in accordance with the PDCA cycle (plan, do, check, action), PHE WMO conducted several programs related to HSES management system, including the conducting of a review on Environmental Aspect Impacts and HIRADC , a review of the HSES

Legislation, the use of the HSES handbook, a review of HSES Mandatory Training, Management Review Meetings, Internal and External Audits and monitoring of HSES gaps. In terms of quality management, we participated in the Continuous Improvement Program (CIP) as one of the four pillars of quality management that are focused on by Pertamina.

Environmental Aspect Impact and HIRADC

HSES Legislation

HSES Procedures Development & Review

HSES Mandatory Training

HSES Management ReviewThe increased level of activity by PHE WMO, as evidenced by the operation of three rigs, the fabrication & installation of platforms and new living quarters, and the laying of subsea pipelines, also means a corresponding increase in the types and level of risks that must be mitigated. The HSES Dept. regularly updates and evaluates PHE WMO’s HIRADC (Hazard Identification, Risk Assessment and Determining Control). Through the updating process, PHE WMO has demonstrated its commitment to fully complying with the PDCA cycle (Plan-Do-Check-Action) in respect of all of its operations.

As part of our commitment to meeting regulatory and HSES requirements, a review and analysis of the applicable legislation has been conducted.

PHE WMO operations entail high HSES risk levels so that in practice the necessary HSES competence and commitment is essential. For that reason, all employees are expected to have basic HSES competencies so as to be able to identify and manage the HSES risks associated with their work. Such basic HSES competencies are provided to personnel through the HSES Mandatory Training program, which is compulsory for all staff, having regard to the scope of their duties.

To ensure that the PT PHE WMO Health, Safety Environment and Security management system is applied in accordance with the plan-do-check-action cycle, and the HSES management system requirements (both OHSAS 18001 and ISO 14001) PHE WMO conducts HSES Management Reviews every 6 months to check the effectiveness and sustainability of HSEMS application.

This involved identifying the applicability of the legislation and reviewing its implementation in our business processes.DOPLAN

CHECKACT


Internal and External Auditing, and Action Tracking

As part of the PDCA cycle in the HSESMS, PHE WMO has a HSES audit program that consists of both internal and external audits.

The audit program is necessary to ensure that the HSES management system is effective and in accordance with the set procedures. Internal audits were conducted in June and November 2014, which an external audit was conducted in March. The external audit program is in accordance with the requirements of ISO 14001 and OHSAS 18001.

The audit findings were discussed by Management Review Meetings that were attended by PHE WMO management and the managements of related departments. Audit Findings that were not yet acted upon were incorporated in CPAR (Corrective and Preventive Action Request). CPAR is an online system that tracks incidences of HSES non-compliance. This system was introduced for the first time in 2013.

Based on the CPAR Close Out Status, during 2014 PHE WMO managed to successfully respond to 91% of the total HSES gaps that were found.

The fact that some gaps were not dealt with in 2014 year was a result of the fact that audit was conducted in November. It is expected that all these gaps will be covered in the first quarter of 2015.

CPAR CLOSED91%

2014 CPAR CLOSE OUT STATUS

CPAR OPEN9%

CIP Forum PHE

Continuous Improvement Program (CIP)

The Continuous Improvement Program (CIP) concept is one of the four pillars of quality management focused on by Pertamina. The four pillars are: System Management Standard, Knowledge Management, Quality Management Assessment (QMA), and Continuous Improvement Program (CIP). By definition, the CIP is a method of applying creative ideas and solving problems using quality control techniques and appropriate measures in a consistent and continuous manner.

The QM program began in 2014 with the establishment of the PHE WMO Quality Management Board by virtue of Memorandum No. PHE WMO/GM/JKT/M/III-2014/004 on the Establishment of the PHE WMO Quality and Productivity Board.

In 2014, the CIP was incorporated in PHE WMO’s Key Performance Indicators (KPI), with the target being to send 5 official reports to PHE Corporate.

To ensure the success of the quality management program, PHE WMO has provided CIP training for two batches of employees, CIP socialization for one batch, and CIP Clinic and Audit Training for 2 batches. During the CIP Presentation Forum event, PHE WMO sent a total of 9 teams, with 2 teams receiving gold awards, 5 teams silvers, and 2 teams bronzes.

PHE WMO will continue to develop the CIP program in order to encourage employees to come up with innovative ideas that benefit the company.


As a manifestation of PHE WMO’s commitment to the implementation of the Health, Safety, Environment & Security (HSES) policy, HSES has published a HSES Handbook that contains brief guidelines on how to perform work and activities safely in PHE WMO.

The Handbook explained that every person who performs activities or work in PHE WMO locations (production facilities, offices, warehouses, and other sites owned or leased by PHE WMO) must adhere to the provisions contained in the relevant procedure or SOP, as set out in the Control of Work.

It also applies to all contractors working with PHE WMO as their support is needed to achieve our goal of no accidents, no environmental pollution no occupational illnesses occur. This involves the planning, communicating, and managing of activities in order to protect workers, facilities and the environment. Accordingly, all contractors are expected to comprehensively implement

HSES programs having regard to to the PHE WMO Contractor Health Safety Environmental Management System (CHSEMS).

The HSES covers a total of 12 topics, namely the HSES Management System, HSES Responsibilities, Minimum Requirements for Working in PHE WMO Facilities, Instructions for Use of Special Equipment Safety, Control of Work, Permit to Work and Safe Operating Standards, Hazard and Accident Reporting, Industrial Hygiene, Environmental Protection, Transportation Safety, Emergency Preparedness, and Security.

The dissemination of the HSES Handbook is also done by sending emails to all employees containing summaries of the material in the HSES Handbook.

PHE WMO hopes that the Handbook will not only serve as a source of reference material for the conducting of work in a safe manner by both employees and contractors, but can also help create a comfortable and convenient working environment for everyone.

HSES Handbook

Broadcast HSES Handbook

Launching HSES Handbook


2014 TRAINING & SOCIALIZATION

3. CHSEMS Socialization WorkshopTo improve the understanding of employees as regards the CHSEMS procedures, a total of 4 batches of Champions held CHSEMS workshops in 2014, with the total number of participants being 100.

4. Continuous Improvement Program (CIP) TrainingAs part of a series of Quality Management activities, PHE WMO provided CIP training to two batches of employees, with the first batch receiving training on 18 to 20 June and the second on 25 to 27 June in Bandung.

5. HSES Onboard TrainingThis is induction training that is provided to new PHE WMO employees, covering introductory material on HSES Basic. In 2014, such training was provided to one batch of trainees on 30 September 2014 at PHE Tower in Jakarta, with the total number of participants being 23.

6. GHG TrainingGHG training is training that is provided so as to improve the understanding of GHG Inventory as part of ISO 14064. Such training was provided over the course of 2 days from 27-28 November 2014 in Bogor. It covered documentation material, and an understanding, and verification of GHG inventory under ISO 14064.

7. Environmental Sensitivity Index (ESI) TrainingGIS application training for environmental sensitivity index mapping. Training was provided in Surabaya on 11-12 December 2014.

In 2014, the PHE WMO HSES Dept organized several training and familiarization events to improve employee competencies and awareness in the health, safety, environmental protection and security fields. These training and familiarization events consisted of the following:

1. Control of Work Training This training consisted of 2 separate training courses, i.e., 25 batches of Control of Work Training PA Level 1, and 8 batches of Control of Work Awareness Training. Control of Work Training

8. Training Incident Management Team (IMT) training.This training was provided to the incident management team based on the following scenario: “IMT Major Simulation Exercise Burung Akrehba”. The scenario involved fire drill, abandon ship drill, and tank overflow drill. The training, which was held on 13 March 2014, involving PHEWMO IMT 1 and 2 (EST in Gresik and BST in Jakarta).

9. Bomb Threat Security & ERT TrainingThis training was conducted by Security Jakarta based on the theme “Terrorist Threats and Bomb Threat Management.” Training was attended by 20 person from the security team and emergency response team.

In addition to the training programs and workshops, promotion and familiarization to increase HSES awareness was also carried out through Safety Flashes and Safety Broadcasts aimed at all employees.

During 2014, 14 HSES publications were broadcast, with the themes being Safety Supervision, pre-use inspection checklist, and hand injury prevention. Meanwhile, 8 HSES flashes were released to provide HSES tips.

PHE WMO also held quarterly HSES “Townhall Meetings” hosted alternately by each department in PHE WMO. The meetings were attended by management and all PHE WMO employees, with the agendas covering HSES performance over the preceeding three months and HSES issues associated with the relevant departments.

will continue to be provided and will be one of the programs delivered by the HSES Department.

2. Train the Trainer Training This training is intended to meet the needs of Control of Work trainers / facilitators and internal trainers / facilitators of other topics. In 2014, Training of Trainers was delivered to 2 batches, with the first training course held in Bandung on 28 April to 1 May 2014 and the second on 12 to 15 May 2014, with the total number of participants being 22.

HSES Town hall meeting


HSES KEY PERFORMANCE INDICATOR

HEALTH SAFETY ENVIRONMENT & SECURITY DEPARTMENT

2014 SCORE CARD

STRATEGIC OBJECTIVE

STAKEHOLDERS

S1. Excellent HSES Implementation

S2. High Compliance

FINANCIAL

INTERNAL BUSINESS PROCESS

LEARNING & GROWTH

F1. Optimized Cost Management

L1. Enhance Human Capital

P1. Implementation HSE Monitoring

KPI

S1.1. Number of Accident

S1.2. TRIR

S1.3. Pertamina Quality Assessment (PQA)

S1.4. Audit SMHSSE

S1.5.Audit CSMS

S1.6. Sosialisasi Sistem Manajemen Pengamanan

S1.7. Security Cases causing Unplanned Shutdown

S2.1. Number of minor finding on ISO 14001 &

OHSAS 18001 Certification

S2.2. PROPER Category

S2.3. Risk Management & Mitigation

S2.4. Environmental Regulation Compliance

(Emmision Reduction)

S2.5 GCG Compliance

S2.6 Number of audit finding > US$250k

% Operating Realization

L1.1. Learning Index

P1.1. % of COW Implementation

P1.2 % of significant medical case close out based

on medical assessment result

P1.3 CIP & Knowledge Sharing

P1.4 STOP Card Monitoring

P2.1. Emergency Drill & Simulation

P2.2. MWT , HSE Inspection & Audit

P2.3. HSES Training, Campaign & Socialization

P3.1. Invoice Verification

UoM

ea

index

score

%

%

ea

ea

ea

Rating

%

Case

%

ea

%

%

%

%

ea

ea

ea

ea

ea

day

TARGET ACTUAL

0

0.70

0

-

-

0

n/a

n/a

98.6

-

-

-

100

-

50

0

0

6

2

4

10

10

Mid Year

0

0.514

±420

91.7

81.60

-

0

3

-

88.64

1

-

-

18

-

43.74

71.4

-

6

1

5

24

16

Mid Year

0

0.70

376

60

80

1.00

0

5

GREEN

98.6

1

87

0

100

90

100

100

4

12

4

8

20

10

End Year

0

0.641

422

91.7

81.60

1

0

3

GREEN

99.09

1

91

0

55

90

100

100

9

12

4

9

29

14

End Year


Thank you for your contribution :

Control of Work Facilitator

PROPER Team

ISO 14001 & OHSAS 18001 Internal Audit Team

Incident Management Team

CHSEMS Champion

Quality Management Team

HIRADC Team

Emergency Response Team


Pertamina Hulu Energi WMOPHE Tower Lantai 16-20Jalan Letjen T.B. Simatupang Kav. 99Jakarta 12520 - IndonesiaTelp. 62-21-2954 7500, Fax. 62-21-2954-7986