Committed to Our Employees

One of the most important ways PT Inco contributes to our communities is by providing employment. Over the years, we have trained thousands of Indonesian employees and provided them with skilled, well-paying jobs. Today, our company employs 3,000 people and only 40 are expatriates. We are proud of our record, one of the best among foreign mining companies operating in Indonesia, and of the fact that the vast majority of our executive team members, including our Chief Executive Officer, are Indonesian nationals. Similarly, Indonesian nationals make up the majority of PT Inco's Board of Directors.

To support our desire to provide employment to Indonesians, we have long pursued a local hiring policy. We endeavour always to find local qualified people to fill positions. If there are no suitable local candidates, we expand our search to the provincial and then national levels. Only as a last resort do we hire outside of Indonesia.

Dating back to our first negotiation in 1980, compensation levels for our hourly workforce, as well as other benefits, are outlined in the collective agreements with the Union. We conduct annual compensation surveys, benchmarking against other large mining companies operating in Indonesia, to ensure that wages at PT Inco are competitive.

Safety First

As part of our commitment to employees, safety is our first priority. In 2002, the frequency of disabling injuries remained unchanged from the prior year at 0.3 per 200,000 person-hours worked. We targeted a reduction in the frequency of disabling injuries to not more than 0.2 per 200,000 person-hours worked in 2003 and are pleased to report that we exceeded this goal, as disabling injuries fell to 0.15 per 200,000 person-hours worked. While our safety record is among the best in the world for mining companies, we will not be satisfied until we reach zero disabling injuries.

A number of new programs were introduced in 2002 and 2003 to expand employee involvement in safety awareness and initiatives. As one example, safety charters, which engage all employees in the review of each safety procedure and practice, are now in place in all departments. The quality and quantity of safety audits were also improved. We also increased employee awareness of dust and noise exposure risks and emphasized the importance of ensuring that personal protective equipment be worn and maintained in compliance with all applicable safety standards.

Promoting Good Employee Relations

While the political and social situation in Indonesia remains unsettled, there were no significant work interruptions at PT Inco over the last two years. A new two-year Collective Labour Agreement was reached with the company's labour union in October 2002 and signed on January 22, 2003. It underscores the high quality of our employee relations.

Employee Development

At PT Inco, we believe that investing in our workforce is investing in our future. We initiated a pilot program to diversify and upgrade the skill sets of our operators. To date, some 30 employees have participated. Additionally, we have launched an international exchange program that involves exchanging high-potential personnel with Inco Limited. Five employees from Sorowako have participated in the program to date. Says Eddie Arsyad, Manager, Human Resources and External Relations at PT Inco, "The experience is proving to be invaluable not just for the employees involved but also for our entire organization. It's making us stronger."

For more information on our international exchange program, see Responsibility to Employees in this report.