Corporate Social Responsibility
As a leading public company, we are mindful of our responsibilities not only to our shareholders but also to the broader group of stakeholders who are impacted in some way by our operations. In making business decisions, we therefore endeavour to take into account the potential social and environmental implications as well as their impact on the business itself. We also understand that the investments we make in stakeholder engagement and environmental responsibility are investments in the long-term sustainability of our business in terms of their impact on local economic development, livelihoods and environmental quality, as well as enhancing the Company’s reputational value. We therefore initiate, implement and/or support a wide range of programs and initiatives that create value for our stakeholders.
The Company's key stakeholders, namely those who are principally impacted by our operations, are our employees, our customers, our suppliers, and the communities living in and around the areas where we operate.
The principal social and economic impacts of our operations relate to product safety, consumer safety and comfort, the health and well-being of our employees, employment practices and human rights, and responsible sourcing. As the Company is not directly involved in manufacturing, the main environmental impacts of our operations are related to packaging waste and energy use in our stores and distribution centres.
Matahari’s CSR programs are designed to strengthen our engagement with our stakeholders and involve them in creating sustainable added value, which may be related to community livelihoods, environmental quality, value for customers, working conditions, etc.
The activities below are basically financed by the Company, with a portion of the funds for community empowerment programs being raised through voluntary charitable donations from Matahari’s customers.
SOCIAL RESPONSIBILITY FOR THE ENVIRONMENT
Although Matahari’s business is not directly related to the utilization of natural resources, we are committed to contributing to the conservation of our natural environment and reducing our environmental footprint as far as we can, through, for example, responsible waste management, reducing energy consumption and promoting the use of environment-friendly materials
Reducing Energy Use
Energy-efficient LED lighting is used in all our outlets. Starting in 2013, LED lighting was installed in all new stores, and all existing stores have now been retrofitted. Our investment in LED lighting yielded a 50% reduction in electricity consumption in our large format stores as well as annual savings of approximately 35,000,000 kWh per year, or the equivalent of 24,000 tonnes of carbon emissions every year*). An additional benefit of LED lighting is that it creates a more comfortable store ambience for our customers.
*)note: Faktor emisi karbon 0,6857 kg CO2/kWh/Carbon emission factor of 0.6857 kg CO2/kWh
The damaging impact of plastic waste on the environment is an increasingly critical global problem, and it is particularly acute in Indonesia. In recognition of this challenge, Matahari switched to biodegradable plastic bags as long ago as 2011. However, given that these bags can still take years to break down, in 2018 Matahari took the initiative of introducing a plastic-free bag made from cassava starch. These bags, which still bear the distinctive Matahari logo, are 100% biodegradable and safe for animals if accidentally ingested. We continued to roll out the cassava-based bags to stores across the country in 2019.
Waste management at our stores and distribution centres is handled in collaboration with third parties. We strive to ensure that such partners comply with the prevailing regulations by, for example, requesting information about their waste management methods, in particular regarding recycling, composting, incineration, disposal to landfill, special storage, and so on.
SOCIAL RESPONSIBILITY FOR SOCIAL AND COMMUNITY DEVELOPMENT
Use of the Local Workforce
Matahari contributes to driving local economic growth by providing decent, fairly compensated work opportunities for local people across Indonesia. We have a policy of hiring locally as far as possible, and the majority of staff at each of our stores are from the local area. The existence of a large format Matahari store has a significant, positive impact on the local economy, particularly in second and third tier cities around the country, from the absorption of local labour, products and services to the payment of local taxes.
We are committed to making a positive impact on the communities we serve and to minimizing any negative impacts on the environment and society arising from our operations. We therefore seek to initiate, implement or support programs and initiatives that create value for our stakeholders, who include not just employees, customers and business partners but also the broader communities where we operate.
In addition to the beneficial impact of Matahari stores described above, we also seek to empower communities by investing in a wide range of health, education and livelihood initiatives in partnership with various non-profit organizations, including Yayasan Dompet Dhuafa, LAZISNU, Pendidikan Harapan Papua, UNICEF and the Matahari employees’ association (IKM).
We are also committed to building community resilience in times of urgent need, such as providing financial and in-kind support to communities affected by natural disasters, using a portion of the funds raised from our customers through our in-store charitable giving scheme as well as funds from the Company. In 2019 we contributed to the ongoing rebuilding efforts in Palu, Central Sulawesi, which suffered a devastating earthquake and tsunami in 2018, as well support for the victims of flooding in Tegalluar, West Java.
We seek to ensure that our charitable donations program is fully accountable and transparent by verifying that the funds we donate, whether from the Company or from our customers, are directed to programs and initiatives that deliver maximum impact and sustainable outcomes for the beneficiaries. We therefore conduct thorough due diligence on any prospective implementing partners to ensure that they have a strong track record on supporting and implementing projects that empower communities and people, and that they have a solid reputation for integrity.
Employee-Led Community Outreach
Many of our employees are regularly involved, on a voluntary basis, in community outreach initiatives addressing specific local needs. The Company has lent its support to many of these employee-led projects through the Matahari employee association, IKM, offering funding and organizational support. We believe that such initiatives play a valuable role in strengthening Matahari’s brand equity by creating added value for the communities and reinforcing the deep connection between our stores and the communities they serve.
Prioritizing Local Suppliers
We seek, as far as possible, to make use of domestic products. We believe that this contributes to the improvement of local partners, which, in turn, contributes to building national economic resilience. In addition, prioritizing domestic partners reduces the Company’s exposure to supply chain risks and foreign currency risks while offering advantages in terms of more competitive pricing.
Ensuring Supplier Responsibility
We work with more than 1,000 suppliers throughout the country and we value them as an essential part of our business. However, we seek to work only with partners who share our high standards on responsible, sustainable and ethical business conduct. All our suppliers and contractors are required by law to comply with the labour laws, including regulations on the minimum wage, time off and child labour; environmental laws and regulations; and any other applicable business laws.
While the Company does not yet have a formal Supplier Code, we believe that we have reasonable assurance on their compliance due to the fact that 1) they are subject to regular external factory inspections by the local authorities; 2) we make regular visits to the suppliers ourselves; and 3) we have longstanding working relationships with the majority of our suppliers and are very familiar with their working practices. If it is found that any of our suppliers or partners are not complying with their legal obligations on employee health and safety, employment practices and managing environmental impact, the relationship with the Company is terminated.
Communication of Anti-Corruption Policy
The Matahari Code of Conduct sets out our strict policies on preventing and eliminating corrupt practices as well as our guidance on dealing with gifts, bribery and conflicts of interest. All of these apply not only to everyone in the Company but also to our third party suppliers, contractors and vendors. Employees, management and suppliers receive regular reminders and refreshment on the Code of Conduct through campaigns, training, gatherings and awareness-raising about our whistleblower mechanism, Suara Matahari.
SOCIAL RESPONSIBILITY FOR EMPLOYMENT, OCCUPATIONAL HEALTH AND SAFETY
We are committed to ensuring that all our employees are provided with healthy, safe and comfortable working conditions; an inclusive environment where everyone enjoys equal protection and treatment, and access to training and development opportunities. In delivering this commitment, Matahari complies with local and national laws and regulations on employment and working conditions, including the provisions on statutory minimum wages, holidays and holiday allowance, overtime, social security and health insurance. The Company’s policies and practices on employment are discussed in more detail in the Human Resources section of Annual Report 2019.
Workplace Health and Safety
To ensure a safe, healthy and secure workplace for our employees, we have installed safety devices such as sprinkler systems, fire alarms and fire extinguishers in every store and distribution centre, and provided clear signage for emergency exits and stairs. In every store and distribution centre, there is a designated area where staff or customers who feel unwell can rest. We also ensure that staff are well-prepared to take care of their own and colleagues or customers’ safety in case of emergencies. Store-based staff participate in regular safety briefings and fire drills organized by the management of the mall or shopping centre where the store is located, while employees at our distribution centres and in the logistics operation receive regular safety briefings. Every year, several distribution centre staff undergo First Aid training provided by SOS International.
No Matahari employees in any of our stores, distribution centres or support centres were involved in any work-related accidents in 2019, thus ensuring another clean safety record for the Company.
Other Employment Practices
Information related to other employment practices, including gender equality and employment opportunities, employee turnover rates, remuneration, labour issues and grievance mechanisms are discussed in the Human Resources section of Annual Report 2019.
SOCIAL RESPONSIBILITY TO CONSUMERS
Consumer Health and Safety
We apply strict standards to all our stores to ensure the safety and comfort of our customers. Every outlet meets local safety standards and regulations and is equipped with fire alarms, fire extinguishers and sprinkler systems. Access to emergency exits and stairs is clearly displayed, and we undertake regular inspections to ensure that there are no potential safety hazards. Store layouts are designed with customer comfort and safety in mind, and in all stores we ensure that customer bathrooms, fitting rooms and prayer rooms are always clean and properly maintained.
Product safety is another high priority. We take strict measures to verify that the merchandise we sell, particularly products intended for children and infants, is safe to use. We undertake a quality assurance check on all products before placing them in stores. Moreover, all the baby products sold in Matahari stores have been certified by the national quality standards authority, SNI. However, in spite of these efforts, customers may on occasion find a defect in a product purchased from Matahari. We have therefore covered all our products with warranty and guarantee policies.
In the interests of the safety of our customers and employees, we closed a number of stores at various times during the campaign period ahead of the 2019 presidential and parliamentary elections, if there were large demonstrations in the vicinity of the store.
All of our products, particularly baby products and cosmetics, are clearly labelled with information (where relevant) about components, ingredients, method of use, expiry dates and impacts. Where needed, safety information is displayed clearly on the product packaging (if any) and/or on the product itself. Products sold through MATAHARI.com are accompanied by a complete product description. If required, further information can be obtained via our customer service channels. We also disseminate general information about new products, promotions and offers through our online platforms, on television and radio, on banners, and in brochures and booklets.
Customer Complaint Mechanisms
Ensuring that our customers are satisfied with our products and services is a high priority for Matahari. Our exchange policy allows customers to exchange certain goods for similar products within 7 days of purchase, or within 14 days for products purchased online.
We welcome feedback, complaints, constructive suggestions and requests for information about Matahari’s products and services, our stores, MATAHARI.com, Matahari Rewards or any of our promotions. These can be conveyed through any of our customer service channels below:
› In store customer service desks in all Matahari stores during store opening hours;
› Halo Matahari customer call centre, which can be reached at (021) 1500038 from 08.00 to 22.00, Monday-Sunday. All calls are received by trained customer service operators;
› Email to firstname.lastname@example.org
› Directly through the Matahari website, www.matahari.co.id
› Through our social media accounts:
Facebook : Matahari
Twitter : @gayamatahari
Instagram : @matahari
YouTube : MATAHARI
Line : Matahari Dept. Store
Customer queries and complaints are addressed initially by the customer service operator. If they cannot be resolved immediately, they are forwarded to the relevant department for follow-up. All customer feedback is logged and used to guide improvements in the quality of our products and service
SOCIAL RESPONSIBILITY FOR HUMAN RIGHTS
The Company is committed to upholding human rights and, through its compliance with Indonesian labour laws, has guaranteed not to use forced labour, trafficked labour or child labour anywhere in our operations
SOCIAL RESPONSIBILITY FOR FAIR OPERATIONS
The Company’s Code of Conduct underlines our commitment to fair and ethical working practices by providing specific guidance on, among other matters, countering corruption, financial and professional misconduct. In addition, employees have the right and are explicitly encouraged to report misconduct or unethical behaviour through a secure confidential whistleblower channel, which protects them against retaliation. More details about the Code of Conduct and the whistleblower mechanism can be found in the Corporate Governance section of Annual Report 2019.