IFC’s appraisal considered the environmental and social management planning process and documentation for the Project and gaps, if any, between these and IFC’s requirements. Where necessary, corrective measures, intended to close these gaps within a reasonable period of time, are summarized in the paragraphs that follow and (if applicable) in an agreed Environmental and Social Action Plan (ESAP). Through implementation of these measures, the Project is expected to be designed and operated in accordance with Performance Standards objectives.
PS1: Assessment and Management of Environmental and Social Risks and Impacts
Environment and Social Management Systems: The Company has established and maintains an integrated management system that includes an environment and social management systems (ESMS) since 2019 and is aligned to IFC PS1 requirements.
Policy: As part of its Integrated Management System (IMS), Linknet has published its policy commitments that covers E&S risk aspects. Key E&S related commitments include preserve the environment and prevent environmental damage or pollution; provide a safe, healthy, mutually respectful and responsible workplace; reduce occupational health & safety risks; comply with E&S laws; and carry out performance monitoring and continual improvement measures. The IMS policy commitments have been published on the company website - https://www.linknet.co.id/en/about/corporate-governance/ims.
Identification of E&S Risks and Impacts: As discussed above, Company's cable network operations are limited to intra city and last mile broadband connection network. Company's broadband services are also limited to Tier 1 (Metropolitan/Capital Cities), Tier 2 and limited Tier 3 cities in Indonesia that have a viable number of homes or population to serve.
Regulatory permitting process: Company adopts a regulatory compliance approach to manage and mitigate E&S risks by straightforward application of local environmental siting, pollution standards, design criteria, or construction standards. As per prevailing Indonesian regulations, cable network expansion projects require local community/government level permits and approvals before construction phase is initiated. Company undertakes preconstruction consultations, obtains permits and pays annual lease amount or one time right of way/land user right. Local government clearances and community permits are monitored by project construction team and the entire preconstruction permitting process is managed by construction contractors.
Planning, Design and Contract Award Process: As part of the Planning and Design process, the Company requires a minimum number of Home Passes to propose a new network expansion project. Once the technical and financial viability is established, Company’s Planning team undertakes desk based spatial planning & analysis and preliminary field surveys and assessment. As part of the field surveys, right of way availability, land space and permit requirements are discussed with local community and local government Heads as described above. After the planning and design process is completed, the construction or installation work is awarded to 4-5 pre-selected vendors on a turnkey basis with contract specifications including environment, health and safety manuals, generic hazard identification & risk assessment (HIRA) guidelines, standard operating procedures and guidelines. Contractors are required to prepare site-specific HIRA if the site situation warrants and is approved by Linknet’s Project construction team for implementation. Installation vendors take about 2 weeks for construction and 3-4 weeks for technical commissioning of the cable network to individual customer homes.
Management Programs: Linknet has established documented management programs consisting of documented manuals, standard operational procedures including generic hazard identification and risk assessment (HIRA) procedures, training management systems, reporting templates, internal audits, monitoring, and reporting mechanisms integrated to its ESMS. Linknet has formulated and contractually requires each of its vendors to adhere to its Management Program including Occupational health & safety and environment guidelines; E&S related standard operating procedures; vendor code of conduct and contractor HSE requirements that are made part of contract agreements.
Currently, the Company's training management systems (TMS) focusses on its on-roll and directly contracted workers. On an average, Linknet employees undergo a training effort of about 12.5 manhours per staff per year. As part of the IFC investment conditions under the Project and as per agreed environmental and social action plan (ESAP), Linknet agrees to strengthen its existing contractor oversight management systems specifically in extending its training and capacity building program covering contractor workers (ESAP #1).
Organizational Capacity and Competency: Linknet has established and maintains a 2-tier E&S organizational structure with clearly defined roles, responsibilities, and authority to implement the ESMS in line with PS1 requirements. The 2-tier E&S organization comprises of a small corporate E&S team and contractor’s E&S supervision team. The corporate E&S function is managed between two different departments viz. Sustainability and Regulatory Department and Health, Safety and Environment (HSE) team under Human Resources/Industrial Relation Department. The Corporate E&S team is supported by contractor HSE team at every project site that is mandatory as per contractual terms and local regulations. Company has also instituted and maintains a Corporate Health & Safety Committee as per local Country regulations and the committee is reconstituted after every 3 years and approved by Government authorities. The Company E&S personnel and contractors HSE personnel have the knowledge, skills, and experience necessary to perform their work, including current knowledge of the host country's regulatory requirements and to implement the specific measures and actions required under the ESMS.
Emergency Preparedness and Response: Linknet has established and maintains an emergency preparedness and response management system in the form of a documented on-site emergency response plan (ERP) covering its operations. Linknet as part of annual HSE program undertakes mock and fire drills to train the corporate staff and direct contract workers and take account of any shortcomings during corporate/office operational environment.
Monitoring and Review: Linknet has established E&S performance monitoring and senior management review systems and procedures in line with PS 1 requirements as part of its ESMS. Company ESMS provides for senior management reviews, pollution and other compliance monitoring, internal and external surveillance auditing programs, half yearly reporting and periodic HSE campaign programs as part of its monitoring and reporting element. As for contractor performance monitoring, construction contractors provide daily report on project physical progress. Linknet has been publishing its sustainability report since last 4 years and the reports are published on its website (https://www.linknet.co.id/en/report/sustainability-report).
As part of the IFC investment conditions under the Project and as per agreed ESAP#1, Linknet agrees to strengthen its existing contractor oversight management systems specifically in daily or weekly reporting aspects and extend its ERP related training and capacity building program to its construction and O&M contractor workers. Contractors shall report on number of workers employed, safe manhours spent, accident and incident statistics, community complaints and grievances received & addressed, and labor law compliance aspects.
PS2: Labor and Working Conditions
Company has business operations in 5 regions of Indonesia (Jabodetabek & Banten; East Java & Bali; Central Java; West Java; and Sumatra) and has its main offices limited to three locations in the Country. Besides the offices, Company operates 2 data centres (co-located within Jakarta Corporate office and another one at Surabaya); 1 NOC co-located within its Jakarta Corporate office and central warehouse at Jakarta. Across its offices, data centres, NOC and warehouses, Linknet has employed 492 on-roll staff and 37 contract staff with about 29% women in the workforce. Besides, Linknet engages contractors for: new project construction/installation (4-5 vendors), O&M services (4-5 vendors), housekeeping, and security services. Construction and O&M contractors deploy workers depending on the size of the project and maintenance requirements and have not deployed women in their workforce.
Human Resources Policies and Procedures: Linknet has formulated and published its documented human resource (HR) policies and procedures; company human resource regulations and collective agreements approved by the Indonesian Ministry of Manpower; Employee and Supplier code of conducts; Whistle blower policy and grievance mechanism that are applied appropriately to all its employees, contract workers, vendors and suppliers, service providers, and business partners. HR policies and procedures are consistent with the national labor regulations and requirements of IFC PS 2 on aspects such as hours of work, wages, overtime, compensation, social security benefits, non-discrimination, equal opportunity, protecting the workforce, retrenchment. The HR policies and procedures are made available to all staff and workers in the HR information systems (HRIS) and smartphone application besides other forms of communication and trainings.
At the construction sites, no worker accommodation is provided as the construction period is only 2 weeks in a cable segment. Hence, construction vendors do not provide temporary housing but rent houses from local community neighborhoods in the region, if required.
Workers Organization: There are no workers organization operational in the Company. However, as per local labor regulations, representatives from Company human resources management and Worker representatives negotiate and agree on a “Collective agreement” covering all aspects of HR policies and procedures which are codified, documented and approved by Indonesian Ministry of Manpower. The collective agreements are renewed and approved every 2 years and the current one is valid for 2023-2025 period.
Retrenchment: Linknet has published policies on retrenchment that are in line with local regulations. After Axiata acquisition in 2022, Linknet undertook organizational and business restructuring in its business transformation process into a fiber infrastructure business, under which some functions were moved to XL Axiata – a sister concern of Axiata Group in relation to the retail business transfer transaction in 2024. Restructuring process was undertaken as per the retrenchment policy and the functions to be moved were mapped and concerned staff were consulted and engaged during the restructuring process.
Grievance Mechanism: Linknet has established grievance redressal mechanism (GRM) to address concerns from its employees including contract workers. This mechanism covers a range of issues including sexual harassment among others. Company has also instituted a whistleblowing channel to swiftly address any violations. Upon Linknet’s acquisition by the Axiata Group, the company adopted the Groupwide Speak Up channel (https://axiatagroup.integrityline.com) that is operated by a 3rd party service provider appointed by Axiata. This web-based confidential channel is accessible 24/7 to employees, suppliers, business partners, contractors, and other stakeholders.
Linknet’s employee code of conduct specifically addresses the policy provisions on prevention of sexual harassment (POSH) at workplace. Linknet’s GRM provides a framework or process for handling sexual harassment related complaints as well. There were no POSH cases reported in the last financial year nor any complaint remains outstanding for redressal as of May 2025. As part of the IFC investment conditions under the Project and as per agreed ESAP#2, Linknet agrees to strengthen its existing POSH and gender based violence & harassment (GBVH) related management policies and procedures to meet good international industry practices (GIIP). Such policies and procedures will cover both internal stakeholders (such as on-roll employees, contract employees) and external stakeholders (such as contractor employees and local communities). As part of the strengthening, Linknet agrees to strengthen its existing policies on POSH and GBVH risk aspects, formulate grievance management procedures in line with global best practices and introduce related training and capacity building programs for both internal and external community stakeholders.
Occupational Health and Safety (OHS): As described under IFC PS 1 Management Program element, Linknet has implemented a documented occupational health and safety (OHS) management systems certified to international OHS management system standard, ISO 45001:2018, and instituted appropriate safety organization within the employee and industrial relations team. The safety team carries out regular internal safety audits, safety observations and monitors & reports on various safety performance aspects on a sample basis covering the construction and O&M vendor operations. Based on the safety monitoring documents available for the on-roll and direct contract staff and also for 3rd party contractor workers, Linknet reports that its operations in last three years had zero first aid cases, lost time injuries, fatalities, medical treatment cases, restricted work cases and road traffic collision cases and have reported about 8 million safe manhours by on-roll company staff since FY22.
Workers Engaged by Third Parties: Linknet engages third party contractors essentially for construction work; operation and maintenance (O&M) services; housekeeping and security services in its offices and warehouse facility. In Indonesia, as per local labor regulations, the contractors are primarily responsible & liable for their operations and labor law compliance. Linknet ascertains and evaluates 3rd party contractors to be reputable and legitimate enterprises having valid labor licenses and enforces its supplier code of conduct provisions through legal agreements/contractual provisions. Additionally, as discussed under ESAP#1 and ESAP#2 above, Linknet agrees to strengthen its contractor oversight management systems.
Supply Chain: Linknet’s supply chain includes procurement of construction materials (FTTH cables, box panels & fittings and metal poles etc) and technologically high-end broadband service equipment’s (such as aggregators, optical line terminals (OLT), routers, modem and high end data center/NOC equipment’s). Contextual risk analysis including US Department of Labor Reports (USDOL) on Indonesia indicates that Linknet’s supply chain has low risk profile.
Currently, Linknet has about 200+ suppliers onboarded on its e-procurement system. The company’s supplier profile is highly localized with more than 97% of its procurement sourced from local Indonesian suppliers/ vendors and only 3% comes from international suppliers. Linknet’s Supplier Code of Conduct governs the supply chain management system and is compliant to PS 2 requirements on child and forced labor aspects and occupational health & safety aspects in supply chain. The supply chain vendor management procedures include screening & evaluation, legally enforceable contractual provisions, self- certification and declaration of compliance to code and sample auditing of code requirements.
PS3: Resource Efficiency and Pollution Prevention
Resource Efficiency: Linknet operations require electricity as the only major resource to sustain its round the clock broadband internet service operations and uses limited amount of diesel fuel for its back-up electricity generators and heavy lifting equipment operations in its warehouse. Linknet sources 100% of its electricity from the state utility company. Linknet has identified energy efficiency as a key performance indicator (KPI) to contribute to climate protection and reduce carbon emissions.
As part of the energy efficiency initiatives, Linknet is replacing all conventional lighting with energy- efficient LED lights; raising energy conservation related awareness among company staff; replacing old batteries with new Li-Ion batteries; and transitioning from Hybrid-Fiber-Coaxial (HFC) technology to Fiber-To-The-Home (FTTH) as FTTH cables consume only about half the energy required by HFC cables. Currently, 62% of the 4.31 million homes in our last mile network rely on FTTH, while the remaining 35% use HFC. Company has been investing in FTTH cable network ever since year 2020 onwards. As a result, in 2024, Linknet has reported that its energy usage decreased by 10.09%, from 165.43 million GJ in 2023 to 143.74 million GJ in 2024.
GHG Emissions: Linknet monitors and reports GHG emissions (Scope 1 and 2) as part of annual sustainability report. In CY24, Linknet has reported the GHG emissions (Scope 1,2 and 3) as 32,400 tCO2e in which grid electricity (Scope 2) consumption alone contributed 98% of the emissions. Due to the ongoing energy efficiency initiatives, Company reports that its GHG emissions decreased by 7.21% between 2023 and 2024. The GHG reduction is the result of several efforts undertaken and the adoption of energy efficient FTTH cables compared to traditional copper cables. As part of its decarbonization strategy, Linknet plans to join SBTi (https://sciencebasedtargets.org/) program by CY27.
Wastes: Linknet operations generate solid waste and more particularly electronic wastes (e-wastes) such as used and old cables, modems, routers, used batteries, aggregators, OLT and discarded high-end technology equipment's during construction and O&M phases which have limited, temporary, and localised impacts. All the e-wastes from its 5 geographical business divisions are collected, transported and stored in its central warehouse at Jakarta from where it is disposed through licensed vendors. As part of its ESMS, Linknet has a policy of repairing the old, customer premise equipment’s (CPEs such as modems and routers) before discarding it as waste. Linknet reports that in 2024, about 70% of unused customer premises equipment (CPE) was repaired minimizing waste generation. Wastes generated is also monitored as a KPI and in 2024, Company reports that the volume of both hazardous (343 tons) and domestic waste (5 tons) generated has declined when compared to previous years.
PS4: Community Health, Safety and Security
Infrastructure and Equipment Design and Safety: About 80-90% of the company’s intra city and last mile cable network is laid above ground on overhead lines running between metallic poles of 2-3 inch diameter that are installed at every 40 to 50m distance or depending on site exigencies ensuring community safety. Company installs its own poles treated with anti-corrosive paints. Above ground cables are laid along the pedestrian footpaths and road edges without obstructing both vehicular and pedestrian traffic and as per local permit conditions.
As per local permit conditions, the pole heights are fixed at 6m above ground along the pedestrian footpath and 7m above ground for road crossings to ensure unhindered traffic flow below the overhead cable crossings. For setting up aggregators, corner spaces in public land parcels (such as parks and open spaces) or telecom tower locations are selected to avoid community health and safety risks and is located within fenced space with double locking system to control/restrict public access. For setting up OLTs and other smaller panels on the poles, Company specifications include standard galvanized fittings (clamps, bolts, panel boards) that can withstand external harsh environmental conditions. The OLTs are installed on the poles at sufficient height to avoid safety risks to local community and these are periodically inspected by O&M vendors for safety risks. Company reports zero accidents or incidents to local community neighborhoods due to its above ground or on the ground cable network infrastructure components.
Traffic Impacts and Transportation Safety: Construction vendors use work site barricades to control public and traffic access to construction sites. As the construction is completed within 2 weeks in a segment, specific and active work areas are barricaded to ensure pedestrian and traffic safety without obstructing the flow.
Security Personnel: Unarmed security personnel have been deployed in the office and warehouse locations through third party security vendors authorized by government. Linknet briefs security personnel about policies on child labor and provides training on basic safety, first-aid, fire safety and emergency response. The security team is supervised led by company chief security officers who are on-roll staff. Security team members are made part of the emergency response team with recurrent training on emergency situations as per on-site emergency management plan. Company reports no security incident in the past involving security guards and local community members.
PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources
The Company undertook an analysis to identify if its existing and proposed cable network overlaps with Alliance for Zero Extinction (AZE) sites or World Heritage Sites (WHS) as part of IFC appraisal. At three AZE sites (Batam Island, Gunung Gede-Pangrango, Gunung Unggaran), cable network overlaps with several cables. The location of the cables within these AZE sites corresponds with urban modified habitats which are not suitable habitat requirements of the AZE trigger species (being two species of frog and one crab).Ongoing impacts from the existing cables are considered to be low.
As part of its network planning, the Company avoids setting up cable networks in protected areas and complies with local permit rules and conditions. As part of IFC investment and as per ESAP#3, the Company agrees to update its standard operating procedure (SOP) on Environmental Protection to include a risk screening and management procedure for existing cable network operations and future cable expansion projects that commits to avoid placing cables within AZE and WHS sites. and implement appropriate management measures within protected areas and Key Biodiversity Areas and in the vicinity of cultural heritage or cultural property resources. A Biodiversity Management Plan will be prepared and incorporated into the ESMS for existing cable network operations and future cable expansion projects located within sensitive habitats (AZE and WHS sites, other KBAs and Protected Areas.
