🤝 ESG Implementation in Procurement Process

Pupuk Kaltim integrates ESG principles from the upstream procurement process, ensuring that sustainability values flow to downstream operations and are felt by customers. Every supplier selection and management decision balances quality, cost, and timeliness with business ethics, respect for human rights and fair labor practices, occupational health and safety, and environmental protection.

Through the Supplier Code of Ethics Guidelines, due diligence and risk-based assessments, Pupuk Kaltim builds accountable partnerships and drives continuous improvement. We accompany these efforts with supplier and SME capacity development as well as provision of safe reporting channels. With this approach, Pupuk Kaltim minimizes risks, improves service quality, and contributes to Scope 3 emissions management—creating long-term value for all stakeholders.

🤝 Vendor Gathering 2024

PKT organized Vendor Gathering 2024 with the theme "Grow Together Towards a Synergistic Partnership" on August 29, 2024 in Balikpapan in a hybrid format, attended by 134 offline participants and 233 online participants (total 367 participants). One of the main sessions discussed "How to Implement CSMS (Contractor Safety Management System) at Pupuk Kaltim?" which guided participants to understand the introduction of CSMS, the importance of compliance with OHS regulations, the role of Standard Operating Procedures (SOPs) as implementation guidelines, the design of OHS programs that must be prepared within the CSMS framework, and the urgency of OHS coordination meetings to ensure consistency of implementation in the field.

This session also explained the framework and assessment weights in CSMS documents, so that supplier partners obtain clarity on fulfillment stages, expected evidence, and evaluation standards. Through this forum, PKT aligns workplace safety expectations with suppliers while strengthening the integration of ESG aspects in the procurement process, particularly the S dimension (safety & fair labor practices) and G (compliance & accountability), to encourage synergistic, transparent, and sustainable partnerships.

🌱 Vendor Gathering 2025

As a form of PKT's continued commitment to ESG implementation in third-party scope, PKT again organized Vendor Gathering 2025 with the theme "Together for Sustainability, Equity, and Integrity" on September 30, 2025 in Balikpapan in a hybrid format (attended by 175 offline company participants and 100 online participants). This forum is aimed at aligning sustainability expectations between PKT and supplier partners while emphasizing the implementation of Sustainable Procurement, where environmental, social (including OHS & human rights), and governance aspects become equal considerations with quality, cost, and timeliness in the procurement process.

The core material of the activity discussed supplier sustainability criteria, supplier code of ethics (business integrity, anti-bribery/corruption, regulatory compliance), and the assessment-monitoring-improvement flow: starting from risk assessment and due diligence, integration of ESG clauses in tender/contract documents, to periodic audit mechanisms and corrective action plans (CAPA). Participants also received practical guidance related to strengthening traceability, incident reporting, and measuring supplier contributions to ESG targets (including aspects relevant to Scope 3 emissions).

Through this alignment, PKT and suppliers build more accountable, transparent partnerships that are ready to make continuous improvements, so that daily procurement decisions become increasingly aligned with the company's ESG goals and create long-term value for all stakeholders.

🔍 ESG-based Supplier Screening

Pupuk Kaltim screens significant suppliers through PKT's Supplier Code of Ethics which integrates Environmental, Social, and Governance (ESG) aspects as prerequisites for cooperation. Suppliers are required to comply with company regulations and policies and maintain business integrity (G); respect human rights—including prohibition of forced labor and child labor, anti-discrimination, fulfillment of wages and fair labor practices—and implement effective OHS (S); and demonstrate adequate environmental management, complete permits, pollution prevention, and documented hazardous substance management (E).

As a strengthening of ESG pillars, PKT also requires suppliers to sign an Integrity Pact which includes: commitment to anti-corruption, anti-fraud, and conflict of interest management; employment compliance that prohibits forced/illegal labor and underage workers and ensures fair working hours, wages, workload, and benefits; proactive actions to control OHS risks according to regulations; prohibition of discrimination and support for workers' rights; environmental compliance including waste minimization and resource efficiency; and operational efficiency efforts to reduce greenhouse gas emissions and energy consumption.

With the combination of Supplier Code of Ethics + Integrity Pact and risk-based due diligence mechanisms, PKT ensures suppliers operate ethically, legally compliant, safely, and socially-environmentally responsible.

📋 Related Documents

Download official documents related to PKT supplier code of ethics and integrity pact for reference and guidance for sustainable partnerships.

📊 Supplier Performance Review

In the Supplier Screening & Performance Review process, PKT implements a Corrective Action Plan (CAPA) as a quality tool to close compliance and supplier performance gaps. In line with partner performance assessments, PKT provides coaching opportunities for suppliers from Good, Fairly Good, and Poor value categories. Coaching is conducted through filling out structured forms that guide suppliers: describe findings, analyze root causes, set improvement targets (OHS/environment/compliance/operational), develop phased action plans, and attach implementation evidence.

The PKT team assesses the feasibility of plans, agrees on deadlines, and conducts regular monitoring until closure is achieved. Every business partner not only meets operational needs, but also contributes to the ESG targets of the Pupuk Indonesia Group, including the reduction of Scope 3 emissions and the improvement of ethical business practices.