INFORMATION PACKAGE

OF

PT FREEPORT INDONESIA
MANYAR SMELTER PROJECT
A SOCIO ISSUE GUIDE FOR SUBCONTRACTORS
This Information Package is developed to provide information and explanations related to
Socio Issue and engagement with community socially around the field project during the
construction period.

The information contained in this document is a guide for the subcontractors involved in
this MSP to maximize their role to utilize local potential so that there is engagement with
the social community. The target goal is to complete the project peacefully and punctually.

This Information Package begins with a Background in which outlining the approach and
process of the field office engagement with Government of Gresik Regency. Section I
reviews the Law and Regulation. Section II presents Local Hiring at Manyar Smelter Project
on the local, regional and national context. Section III considers Grievances Management
Plan both engage the Community and Employee. Section IV presents options for MSP to
maintain business practices with local services company. Section V draws the reporting
procedure.

BACKGROUND
PT. Freeport Indonesia (PTFI) has decided to build new copper smelter plant and has
entered into the engineering, procurement and construction agreement with PT. Chiyoda
International Indonesia (Chiyoda). As the main contractor of the MSP, Chiyoda understands
importance of keeping good alignment with local community during construction and also
PTFI’s intention to maximize local development opportunity by hiring for socialization point
of view.

Chiyoda’s highest priority is to achieve on time Mechanical Completion of Smelter project

with safety and high quality and within the budget and in a peaceful environment.

As the project scope is very huge, Chiyoda and its Subcontractors must plan carefully the
local hiring and local services in compliance with applicable rules and regulations to the
extent which will not affect construction schedule and budget avoiding complaints from
local community that recruiting process and business engagement is unfair and unclear.

Although the PTFI’s engagement with Gresik Government has been tied years before, the
formal project introduction to Gresik Government have taken place officially on October 25,
2021 after the ground breaking ceremony was held with the presence of President of
Indonesia on October 12, 2021 Considering that the project will utilize a massive manpower
during the construction works, a centralized system to manage the local hiring is required
and the Government of Gresik agreed to use an established central point access managed
by Gresik Manpower Office.

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To ensure the possibility of using the application, the follow up discussion with the Head of
Gresik Manpower took place on October 27, 2021 to conform for methodology to encourage
the involvement of local community. The one portal one access namely “Gresikpedia” has
been available currently and will be improved in accordance with the large workforce needs
from the surrounding community.

The other local involvement with community and people is the local services. The possible
outsourcing works are already in JIIPE’s scope, however the other supporting services can
also be developed such as small outsourcing works, catering service, housekeeping and
other related services.

LAW AND REGULATIONS

The legal standing for the local context are described as follows:

1. Law no. 3 Year 2020, Article 106 – IUP and IUPK Holder is mandatory to prioritize local
labor, product and services in accordance to the provision regulation

2. MEMR Decree No. 1953/2018, Chapter One – Business Entity in Energy and Mining
Sector is mandatory to utilize operating goods, capital goods, equipment, raw material,
and supporting material that produces domestically

3. Local Regulation (East Java Regulation No. 8/2011 and Gresik Regulation 18/2011), -
Company to prioritize the local labor which has been registered in the regional work
unit, - company may cooperate with regional educational institutions on hiring local
labor, - company can hire from other regional in the case no qualified labor available
in the project area.

LOCAL HIRING
The local hiring mechanism is agreed that Gresikpedia will be used as the only one access
for job seekers and subcontractors to meet their expectation interchange.

The client, PT. Freeport Indonesia intend for Chiyoda and its Subcontractors to prioritize
local hiring, not limited from Manyar area. Chiyoda and its subcontractors are able to
expand their recruitment beyond Manyar subdistrict area if they judge suitable candidates
are also available in Gresik surrounding.

The system of “Gresikpedia” is developed as friendly user as it can and provided certain
local ID number for those selected villages. The tutorial of the application is below:

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The tutorial of the “Gresikpedia” will be noticed very soon, however the simple access is as
follows:

1. The subcontractor must first register its company entity to Gresik Manpower Office
and the access data code will be provided.

2. The access data code is used to open the gateway and input any job vacancy. Once
the job vacancy is posted, the company will receive in return application which
prioritized for villages surrounding the project.
On the other hand, the job seekers are also treated the same way. They must first register
in the webpage, complete with ID number and curriculum vitae information.

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GRIEVANCES MANAGEMENT
Any grievance in relation to local hiring and local services will be managed in accordance
with Subcontractor’s grievance procedures. Grievances from employees and the community
can be about any topic related to the Manyar Smelter Project, including Local Hiring
practices.

Community. Subcontractor Project Manager shall ensure all his personnel are aware of the
grievance mechanism process and are able to assist any affected person or community if
approached directly.

Subcontractors shall not manage Community Grievance process directly but assist PTFI and
Chiyoda’s Social Manager as required.

Subcontractors shall make a coordination with Chiyoda’s Social Manager to ensure a

preventive alignment before the grievances happened.

Employee. Subcontractor Project Manager shall acknowledge and agree that it has read
Company’s Human Rights Policy (attached) and that the Human Rights Policy requires that
it respect International Human Rights.

Subcontractor Project Manager shall build a practical mechanism for collecting and
accepting grievances from Affected Person(s) within his organization such as using
suggestion box and Grievance Form or utilizing the grievance website system.

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Subcontractor Project Manager shall ensure all his Employees are aware of the grievance
mechanism process

Subcontractor Project Manager shall manage all his Employees’ grievance issues with
internal causes within his organization.

Upon receipt of grievances with causes outside his organization and/or relating to
Chiyoda’s EPC’s activities or human rights violation, Subcontractor Project Manager shall
promptly report to Chiyoda’s Social Manager.

Subcontractor Project Manager shall submit reports of his Employees’ grievance issues with
causes outside his organization

Subcontractors shall not manage Community Grievance process which Company may
provide directly but shall assist PTFI and Chiyoda’s Social Manager as required.

LOCAL SERVICES
Apart from the government regulations above, that the project shall encourage the use of
local resources. As mentioned in Article 50 Terms and Conditions of Subcontract
Agreement, the Subcontractor shall comply with all applicable laws in Indonesia regarding
the use of Indonesian contractors, vendors, and suppliers in order to fulfill the prevailing
minimum local content requirements.

To make it easier to find local service companies and vendors, together with PTFI and
Gresik Government, it is developed the easiest way to find potential local vendors and
suppliers using the “Gresikpedia”. The next business engagement is made, the
responsibility is within the subcontractors themselves.

The “Gresikpedia” is also used for meeting the local suppliers and vendors to seek any
relevant business offered by subcontractors. The system will be soon developed and to be
informed once it is confirmed.

REPORTING
Subcontractor Business Team will submit a report of local hiring activities and local service
activities, including hiring activities of Subcontractors and any social and business
engagement, to Chiyoda on a monthly basis. Subcontractor’s report includes the information
as stated below;

a. The number of applications by village

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 b. The number hired by village
c. Turnover by village, and
d. Types of positions by village
e. Grievances related to hiring practices
f. Number of business activities are open
g. Number of business activities, description and type of business are given

Attachment: FCX Human Rights Policy

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