Corporate Governance

Lonsum upholds the highest standards of corporate governance and has demonstrated this commitment over recent years through its compliance with internal and external regulatory frameworks aimed at strengthening transparency, accountability, responsibility, fairness and independence.

 

Lonsum’s starting point is to be compliant with all applicable laws and regulations in Indonesia. However, the Company has set the bar considerably higher in certain areas to attain the internal standards to which the Company aspires. An example is its adoption of the RSPO’s Principles and Criteria (P&C) which encompass many aspects of our operations directly related to good governance, including transparency, legal compliance, environmental responsibility, and responsibility to employees and communities.

 

Alongside the RSPO’s P&C are a series of comprehensive policy manuals, Standard Operating Procedures (SOP) and work instructions, developed by the Company to cover the scope of its operations. The manuals contain detailed procedures relating to internal auditing, risk management, human resources, finance and accounting, sales, procurement, security and environmental management.

 

In January 2006 the Company adopted a new Code of Conduct which provides all employees and directors with guidance on ethics and behaviour in the workplace. 

 

This Code is supplemented by a requirement for employees and directors to submit an annual confidential conflict of interest disclosure statement to the Company. In January 2009, the Board of Directors promulgated a set of detailed Conflict of Interest Rules to provide guidance on what constitutes a conflict of interest. The rules establish disclosure principles for conflicts and perceived conflicts of interest and regulate activities such as: dealings with customers and suppliers; holding of management positions or economic interests in related businesses; recruitment; and securities trading.

 

The Code of Conduct and Conflict of Interest Rules are aimed at ensuring the Company and its employees behave in accordance with Lonsum’s declared values.  

 

In early 2007, Lonsum established an internal hotline (whistleblower) system consistent with the Company’s commitment to maintain ethical standards in the conduct of its business. The hotline provides a mechanism for all employees, as well as outside parties (such as vendors), to report any activities that are perceived to be illegal or breaches of ethics. The internal audit unit investigates as necessary and reports to the Board of Directors, Audit Committee and Risk Management Committee to determine the appropriate action.