Principles
Community Development (CD), as we understand it, means all efforts to improve communities’ living conditions, by mobilizing their own initiatives insofar as possible. Based on this understanding, CD is conducted with the communities participating fully as both the subject and the focus of all activities. We provide counseling and technical services to encourage communities to be self-reliant by making full use of all available local potential.

In implementing its CD, PT Astra Agro Lestari Tbk. upholds the following principles:

1. BASED ON NEEDS
CD is based on communities’ actual needs, not their wants.
2. SPECIFIC
CD is carried out with attention to the specific problems, aspirations, and potential of each local community
3. ORIENTED TOWARD SELF-RELIANCE
CD is aimed at guiding the community toward an attitude of selfreliance, with everything done in line with the capabilities of both parties (the Company and the community).
4. PARTICIPATORY
Community participation is the key to the success of CD. Communities’ willingness to participate is determined by the relevance of the initiatives / programs undertaken to their actual needs. Therefore, a clear understanding of the community’s actual needs is essential. To gain an understanding of their needs and problems, their aspirations, and the potential available, and to provide service consistently, we place personnel as Community Development Officers (CDO) to provide direct assistance to communities near the plantations and to foster intensive communication, solidarity, and good relations with these communities. In this way, we can expect that every program conducted involves the community through active participation and can accurately reach the jointly agreed targets.

PARTNERSHIP
The Company always involves local communities as its trusted business partners. This policy helps the Company’s presence bring greater benefits to the communities and areas where it operates, by mobilizing local economies, stimulating business growth, and creating new jobs. As a result, many new businesses have started and prospered in the areas of the oil palm plantations managed by the Company. This is just one of the many forms of non-taxation responsibility carried out by the Company.

During 2010, the Company’s partnership transactions with local communities consisted of the following

During 2010 the Company paid Rp 2.1 trillion to plasma farmers, independent farmers, and farmers participating in the Income Generating Activity (IGA) program for purchases of raw material in the form of oil palm fresh fruit bunches (FFB). The Company paid Rp 490 billion to local suppliers for various types of goods, and Rp 403 billion for purchases of various services from local partners.

Overall, the value of partnership transactions with local communities grew by around 25%, from 2.4 trillion rupiah in 2009 to 3.0 trillion rupiah in 2010. One reason for this increase in transaction value was the improvement in the price of CPO on the international market with the easing of the global financial crisis of 2008, which led to higher purchase prices of FFB from farmers.

PLASMA FARMERS
PT Astra Agro Lestari Tbk. participates in the Smallholder/Nucleus Plantation (PIR) program and the Primary Cooperative Credit for Members (KKPA) program, with the total area of smallholder land totaling 57,239 hectares, of which 55,274 hectares is producing plants and 1,965 hectares are not yet producing.

The total value of transactions for purchases of oil palm fresh fruit bunch raw material from plasma, KKPA and IGA farmers during 2010 came to 1,426,997 tons, up from the previous year’s 1,413,911 tons.

The Smallholder/Nucleus Plantation (Perkebunan Inti Rakyat, PIR) Program has brought genuine benefits by improving the quality of life of the program’s participants, both transmigrants and indigenous residents. This improvement in the quality of life is reflected in their greater prosperity now compared with before joining the PIR program.

Generally, the housing of plasma farmers is now much better than when they started their new lives as transmigrants. Likewise, in the area of education, plasma farmers can now educate their children at some of the best universities in Indonesia, and even abroad something they never imagined when they first started developing the plantations.

We measured communities’ support for the partnership program through a CD Index survey in 2009 and 2010. The survey results show that a majority of respondents in the villages surveyed stated their support for the partnership programs carried out by
the Company.