Corporate Social Responsibility

Through its corporate social responsibility programme, Matahari practices good social and environmental stewardship to make a positive impact on people’s lives.

Matahari is engaged in a range of social and community development programmes across the country in partnership with UNICEF, Yayasan Obor Berkat Indonesia, Yayasan Dompet Dhuafa, Sekolah Lentera Harapan, Yayasan Denyut Jantung and the Matahari employees’ association, IKM. Matahari also supports a wide variety of deserving organisations and initiatives at national and local level, frequently through its own stores. Matahari prioritises good stewardship in the programmes it supports to ensure that the interventions change the lives of the people they reach for the better.

The emphasis on good stewardship is an integral part of Matahari’s commitment to maintaining sustainable, fair and transparent relationships with all its stakeholders, including suppliers and other business partners. This principle is enshrined in Matahari’s corporate values and Code of Conduct. Although Matahari does not have formal mechanisms to ensure suppliers’ and contractors’ compliance with workplace and environmental standards, they are required by law to comply with minimum wage regulations and other legal provisions on contracts and work practices.

Matahari’s longstanding, cooperative relationships with its supplier partners, as well as regular third party factory inspections, provide reasonable assurance that the Company’s suppliers are meeting their obligations with regard to employment practices, employee health and safety and managing environmental impact. If the Company has reason to believe that any supplier or partner is not compliant, the relationship is discontinued.

ENVIRONMENTAL CONCERN

As a department store retailer, providing plastic shopping bags for the convenience of the customers is a must. If no properly disposed of, however, plastic bags can contribute to various forms of environmental pollution that accelerate global warming. Since 2011, Matahari has been using only biodegradable plastic bags, which break down biologically within two to four years. This policy is applied in all Matahari’s stores.

One of Matahari’s energy-saving initiatives is the use of energy-efficient LED lighting. Matahari first introduced LED lighting in new and some existing stores in 2013. As evaluations indicated reduced energy use in the stores concerned, we have continued to roll it out in all new stores while converting additional existing stores. LED lighting was installed in a total of 67 stores by the end of 2015 and Matahari is in the process of retrofitting the remaining stores and the distribution centre by the end of this year to further reduce its energy consumption. On average, each store will reduce about 80% of its lighting energy consumption, which is equivalent of saving 280 tonnes of carbon emission per year.

APPRECIATING OUR EMPLOYEES

Matahari’s human resource policies are designed to improve employees’ welfare and productivity, and improve employee retention, by establishing a motivating and rewarding working environment. A key element in this is maintaining a harmonious and constructive relationship between Management and employees. To this end, the Company supports three important forums: the Matahari Employees Association (Ikatan Karyawan Matahari, or IKM), the Bipartite Forum (Lembaga Kerjasama, or LKS) and employee cooperatives, which are established at each store and at the head office and distribution centres.

Both the IKM and the LK S have contributed to establishing a relationship based on mutual respect and have played a vital role in handling employee grievances effectively and sensitively. Management believes that this has had a positive influence on job satisfaction and productivity, and has helped to promote a real sense of community among employees.

Suara Matahari, the Company’s whistleblower mechanism, provides a strictly confidential channel for employees, suppliers and other contractors to report any actions that they suspect are unethical, illegal or in violation of the Company’s code of conduct. Reports can be made through Suara Matahari’s toll-free phone lines, fax numbers, website, email or mailbox, through which stakeholders can report actions that are suspected of being illegal. Suara Matahari is managed by an independent administrator, Deloitte, to ensure full protection for informants.

Matahari has a strict zero discrimination policy and is committed to providing equality of opportunity in all recruitment, career development and other employment practices. The Company prioritises local hiring and internal promotion wherever this is feasible. Management believes that Matahari’s human resource policies and practices have contributed to the Company’s consistently low employee turnover, high levels of job satisfaction and absence of significant labour disruptions in recent years.

CONSUMER PROTECTION

As a customer-oriented business, Matahari has a responsibility to acknowledge and protect the rights of our customers, including their right to a safe shopping environment. We ensure customers’ safety by making sure that all our stores comply with relevant building codes and standards, and equipping every store with safety features such as fire alarms, sprinkler systems and clearly signed access to emergency exits and stairs. Store layouts and amenities are designed with customers’ comfort and safety in mind.

Product safety is a priority, particularly for items designed for children and infants. All baby products sold by Matahari have the SNI (Indonesian National Standard) certificate for quality. We strive to avoid complaints about product quality by assessing all products before they are shelved. However, in the event of any defect, Matahari’s products are covered by warranty and guarantee policies, and our exchange policy allows customers to exchange certain goods for similar products within 7 days of purchase. All customer complaints are monitored and directed to the appropriate department for follow-up where necessary.

Matahari’s customers can access a variety of channels to make complaints, give feedback or request information about the Company’s products and services. During store opening hours, customers can go to our in-store customer service desks, or contact the Halo Matahari customer call centre by phone. The call centre, which is open from 08.00 to 22.00, seven days a week, is staffed by trained customer service operators. Customers can also contact Matahari directly by mail, phone, or through the website. All feedback from customers is collated and sent to head office for use in decision making.

Matahari has consistently been recognised for the quality of its customer service, with numerous awards and the second-place ranking, for the third consecutive year, out of all companies in Indonesia in the 2015 National Customer Service Championships organised by Carre-CCSL. Management believes that these achievements reflect Matahari’s commitment to building a customer-oriented culture throughout the organisation.

EMPLOYEE HEALTH AND SAFETY

The Company is committed to maintaining a safe, secure work environment in all our stores, distribution centres and the head office. Employees involved in logistics and distribution are made aware of job-specific safety guidelines. Staff in stores participate in regular fire drills and other safety procedures organised by the management of the mall or shopping centre where the store is located. The Company also provides space for health unit in each stores. Matahari has a clean safety record, with no employees ever being involved in an accident in their workplace.

COMMUNITY DEVELOPMENT PROGRAMME

Matahari channels its community support through partner organisations that have a proven track record of empowering communities to improve health, education and livelihoods.

Some of the funds for these initiatives are raised directly from customers, who can opt to contribute the coins they receive as change at the checkout to a specified organisation or cause. This scheme is completely voluntary, transparent and popular with customers, who have contributed directly to making life better for several thousand deserving people over the years.

Matahari’s community development programme benefited the following in 2015:

Education

The Company disbursed Rp 4,104,460,208 to support various educational charities and events:
• Donations through UNICEF to develop a programme to prevent violence against children in several cities in Indonesia.
• Donations to provide books and uniforms for students at Lentera Harapan School.
• Donations for the Nursing School at Pelita Harapan University.
• Donations for the renovation of Madany Islamic School, Parung Panjang
• Donations for Papua Harapan School, Mamit, Papua.

Health

A total of Rp 1,420,439,728 was disbursed as follows:
• Donations to Yayasan Denyut Jantung.
• Customers’ donations were used to provide hernia operations free of charge for people in need. This was a collaboration between Matahari and Yayasan Obor Berkat Indonesia.
• Free masks for customers and employees affected by the haze in Sumatra in October 2015. The masks were distributed in Palembang, Riau, Pekanbaru, Padang and the surrounding areas.

Charitable Donations

The Company donated a total of Rp 1,684,125,681, raised from customer change and corporate donations, to a number of different charities, as follows:
• Donation of KAFFAH for employees’ spiritual activities in July 2015.
• Donation through Yayasan Bintang Firdaus for people in need in Flores.
• Donation to Yayasan Dompet Dhuafa Republika for educational, health and environmental programmes.
• Donation for religious institutions in West Lombok, West Nusa Tenggara; and Ende, East Nusa Tenggara.
• Donation for the Christmas event of Persekutuan Doa Menara Matahari in December 2015.

Corporate donations of Rp 100 million were made to several orphanages in connection with the opening of new Matahari Department Stores in the following cities:
• Singkawang, West Kalimantan
• Bau-Bau, Southeast Sulawesi
• Karawang, West Java
• Sleman, Special Region of Yogyakarta

EMPLOYEE-DIRECTED COMMUNITY SERVICE

Matahari supports a range of outreach initiatives organised by its employee association, IKM, which has a branch in each store. These activities are initiated and implemented by Matahari’s employees, who invest their own time and skills to benefit local causes and address local needs. This helps to strengthen the bonds between Matahari stores and the communities they serve, and enhances the perception of the Company.

Management believes that Matahari’s direct and indirect engagement with communities all over Indonesia through its CSR programme has created significant, sustainable value for both the communities concerned and the Company.