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Indonesia Business Council for Sustainable Development
Why Sustainability Resides at the Very Heart of Holcim in Indonesia By Eamon Ginley, CEO Holcim Indonesia Sustainability is generally defined as economic activity that meets the needs of the present generation without compromising the ability of future generations to meet their needs – or words of a similar nature. At Holcim sustainability means a great deal more. It is a concept that defines everything we do and the way we manage our business. Sustainability is central to every vision. New recruits joining Holcim must be familiar with and understand our vision ‘Building sustainable solutions for society’s future’ and our mission ‘to grow by creating value for stakeholders, through delivery of sustainable building solutions, by caring for safety and the environment and through the development of people, innovative leadership and integrated networks.’ That’s a lot of words and worthy intentions. But how do we turn them into daily life, as a workplace ethic and a better way of doing business? Sustainability is all about responsibility. To answer the question - we always start with a responsible approach to health and safety: the very best place to start, since health and safety incorporates everything that is best about sustainability. You can’t have a livelihood if you don’t protect a life! Safety awareness is behavioral – being alert for yourself and those who work with you – to become proactive in ensuring every job you do involves the proper clothing and equipment, follows the right routines and safety procedures. It is a simple but vital message and drives the best of outcomes – for a safe workplace is productive and efficient and therefore good for the company and the people involved. It means employees are working intelligently as a team and it ensures everyone goes home safely to their families – those future generations who depend upon the fathers and mothers of today. Every meeting at Holcim starts with a safety ‘pause’ – and every facility has regular safety tours – it is part of our DNA. We choose to be measured sustainably. As a successful business we realized long ago that results can actually be enhanced if we measure our performance not only in terms of profits, but against three clear goals – economic success encompassing innovative solutions, customer satisfaction and operational economies; success for society in terms of safety mindedness for the benefit of everyone, working for the greater good in terms of education, health, independent livelihood creation and infrastructure for local communities; and, not least, environmental success primarily in managing natural resources, emissions and power consumption. All three go together right across
what we call our value chain backed by our values of care, delivery and partnership – whether in the mining of limestone or the delivery of materials for new home, a healthy place for families to grow and prosper. W e ar e transparent. Just as the saying goes ‘you can’t make an omelette without breaking eggs’ it is impossible to manufacture cement without adding to the level of carbon dioxide in the atmosphere. Globally the cement sector contributes about five per cent of the world CO2 emissions, however we are able to mitigate and minimize our emissions and in fact our waste management business helps to eradicate far more harmful methane and ozone depleting gases. In our commitment to be sustainable we are transparent and report annually on how we are managing our impacts. We have been recognized for our efforts in keeping the highest environmental standards – with a Gold award from the Ministry of the Environment for four years in succession for our work in environmental and CSR management. Sustainable businesses are creative and innovative businesses. It may come as a surprise, but we do not see ourselves just as producers and sellers of cement – we are in the business of creating value and providing building solutions for a sustainable future. Our processes incorporate sustainability, for example we blend alternative materials to conserve natural resources and we recover energy from waste and thus preserve fossil fuel. We have developed services that remove solid, liquid and gaseous waste from society, protecting the earth’s ozone layer and reducing the risk of ground water contamination from waste dumps. Our products are the answer to a huge demand for homes, offices and shopping malls. We create buildings that use less electricity, harvest rainwater and recycle wastewater. We are an essential supplier for constructing vital roads, bridges, runways and ports enabling trade and commerce. We can even repair roads overnight to keep the traffic moving. Every year we hold internal awards to promote innovative ideas from our employees and every three years we participate in the global Holcim Awards to celebrate new ideas in sustainable design and construction.
From Editor in Chief Dear readers, We are pleased to bring you the 10th IBCSD Newsletter, July 2014 edition. This edition chose the topic on Leadership and O r g a ni z a t i ona l Be ha vi our . Sustainability program will be effectively meet its objective with the support of the organization culture itself. In this edition, Holcim Indonesia shares its vision on how the spirit of sustainability be part at the heart of Holcim in Indonesia. Some news on IBCSD programs and activities will be presented such as that IBCSD held its Member Council and Liaison Delegate Meeting on the beginning of the month. These companies join IBCSD for several reasons as described on Opinion column. How leadership and company behaviour can improve the company performance can be viewed in our case study from PT. Garuda Indonesia (Persero), Tbk. Happy Reading!
Content : CEO Vision: Why Sustainability Reside at the Very Heart of Holcim in Indonesia Events : Holcim Launch its Eco Office, Forest Asia Summit, Open Government Forum, and IBCSD Member Council and Liaison Delegate Meeting Programs: Ecolabel Desk WBCSD Column: What is Leadership for Sustainability? Opinion: Why companies join IBCSD Case Study: Garuda Indonesia
Why sustainability ….. Sustainability is about people. Of course by their very involvement in all these activities, Holcim employees should understand sustainable construction, sustainable building materials and sustainable development - it’s part of their job. But sustainability goes much further in that we expect and encourage open and fair attitudes at work, care for each other, our stakeholders, our world and above all, honesty. As a company we respect the right of the individual and in turn, we ask all employees to understand and respect ethics, our code of governance and uphold our reputation with customers, regulators, communities, the public at large and not least our shareholders. Luckily
we are fortunate indeed to have a great team of people at Holcim, who work extremely hard, and give of their time and expertise to those often less fortunate in communities around us. What better way to enjoy the rewards of sustainability? ============= The writer is the CEO of Holcim Indonesia.
Events
Holcim Indonesia Launch its Eco Office to Remark Earth Day 2014
“The objective of the Eco Office project is mainly to increase staff awareness on environmental concerns and how each employee can contribute to address the issues through behavioral changes.”
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Align with Holcim Indonesia’s vision “Building Sustainability Solutions for Society’s future”, to remark the Earth Day 22 April , an Eco Office project was launched start with Holcim’s head office in Talavera Suite- South Jakarta. The Eco Office project in Holcim Indonesia’s head office will be rolled out till October 2014 and expected to be certified as Eco Office by Singapore Environment Council. The objective of the Eco Office project is mainly to increase staff awareness on environmental concerns and how each employee can contribute to address the issues through behavioral changes. In 6 months, Holcim has put its commitment to improve its environmental performance from its office activities by reducing our consumption on energy, paper and water, reducing and managing waste, and improving air quality in the working area. Activities that will be conducted are : Implement an environmental management system for Holcim Head Office employees consist around 320 employees. Motivate staff to everyday better practices, good for business, people as well as
nature Promote sustainable practices by increasing environmental awareness of employees Promote climate change mitigation by requiring energy-saving. In a bigger picture, this project is part of the Holcim Indonesia’s initiatives to put a stronger commitment in sustainable development align with its vision. This Eco Office project is conducted as an extension of Holcim Singapore’s cooperation with Singapore Environment Council. *For further clarifications you can contact our Holcim Indonesia Sustainability Team Leader : Devina Raditya at devina.raditya@holcim.com.
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Events
Forest Asia Summit , 5-6 May 2014 In promoting sustainable development, IBCSD supported CIFOR in organizing The Forests Asia Summit on last May in Jakarta, The event invited ministers from across Southeast Asia, CEOs, civil society leaders, development experts and the world’s top scientists, to share knowledge on how the region can accelerate the shift toward a green economy by better managing its forests and landscapes. Southeast Asia is one of the world’s most dynamic regions. Its economy is growing rapidly led by a rising middle class but it faces major policy challenges: inequality, uncertain land tenure, unsustainable land use, a loss of biodiversity, food insecurity and climate change. Against this backdrop, some Southeast Asian economies are adopting a g r een - g r o wt h approach, voluntarily establishing targets to r e d u c e greenhouse gas emissions a n d t o sustainably manage their forests and landscapes. Similarly, l e a d i n g
“There is not yet single definition of open government can be fully accepted globally. However, by all means, everybody eventually understands that better government may bring prosperity to its people”’
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businesses are committing themselves to sustainable land use and investment practices. Still, more needs to be done. Agricultural expansion in Southeast Asia threatens the world’s third-largest tropical forest and the many ecosystem services they provide. And unsustainable land-use change has made the region one of the world’s largest sources of greenhouse gas emissions. Informed by the latest research and best practices, the Forests Asia Summit allowed participants to share knowledge with policy makers and each other in the pursuit of new green-growth pathways for development. The Summit – organized by the Center for International Forestry Research and co-hosted by the Indonesian Ministry of Forestry – was the largest in Asia in recent years and attracted more than 1,000 leading stakeholders from Southeast Asia and across the world. Thousands more participated online or through nationwide broadcasts. There were special learning events with leading global experts on the Green Economy, the Southeast Asian haze crisis, climate change negotiations and the Sustainable Development Goals.
Source: http://www.cifor.org/forestsasia/about/ summit/
Open Government Partnership Indonesia Open Government Partnership or called OGP was launched in 2011 as the sign of required reformation to openness in the government system. Transparent, responsive, accountable and effective government are qualities that expected would perform. It is timely that good corporate governance also practices in every single component of the government authority, ensuring a better future. There is not yet single definition of open government can be fully accepted globally. However, by all means, everybody eventually understands that better government may bring prosperity to its people. The OGP now has 64 participating countries including Indonesia through its own domestic platform making Indonesia Government more open, accountable and responsive to its citizen, especially with our upcoming presidential administration that bring new hope of better government. In all participating countries, government and civil society are working closely to bring this ambitious reform change. There are topics that arise surrounding this initiative representing the intricacy of government public services such as access to information, aid transparency, anti-corruption, public services delivery, etc. The participating countries required to design an action plan
with their own priorities due to its existing system applies that require improvement with measurable commitment. However, civil society must be involved in building coalition through a multi-stakeholder dialogue process. Indonesia Business Council for Sustainable Development (IBCSD) get involved in the Asia Pacific Regional Meeting of OGP held in Nusa Dua Bali last 6-7 May 2014. The meeting was arranging the discussion of ‘Unlocking Innovative Openness: Impetus to Greater Citizen Engagement." Through this forum, IBCSD willing to also get involved in the Open Government Indonesia (OGI) that organized through UKP4 office. OGI is an Indonesia domestic movement of OGP established since 20 September 2011. There are three major stages of OGI started with the implementation, execution in 2011 and monitoring and evaluation. IBCSD is encouraging open government in Indonesia as it is crucial to ensuring better and healthy environment for business. The rapid growth in Indonesia has brought sustainability challenges while lack of transparency may weaken the protection to many resources of Indonesia, both social and environment. In short, if transparency can implement in Indonesia, the growing ability of people to defend them self into injustice conduct. Volume x, July 2014
IBCSD Member Council and Liaison Delegate Meeting on June 2014 The Indonesia Business Council for Sustainable Development (IBCSD) was held its Council and Liaison Delegate Meeting on Thursday, 5 June. This yearly event brings together the Council Members (CEOs and equivalent), their Liaison Delegates and the IBCSD Steering Council to receive the annual report from the Executive Committee. IBCSD Secretariat used this opportunity to present the progress of IBCSD’s programs, initiatives and focus area working group. Several organizations whom IBCSD has collaborated with were also invited on the event. Beside some presentation on best practices given on the plenary, there were 3 parallel discussions with the topics of First Timer Briefing for those who wants to know more about IBCSD, and Working Groups on Water, Energy, and Ecosystem. In the afternoon, the 3 parallel discussion was with the topic of Business for Community who gave example of community programs that can be chosen for companies, and the New Business Paradigm that presented some business ideas and innovation. The meeting for IBCSD member was held separately
where it reviewed IBCSD programs and made decision for future program development. Some updated on SE Asia region program given by BCSD Singapore, initiation on the Future Leaders Team Program, and opportunity on funding mechanism were also furnish the CEO level meeting. The meeting aimed to give knowledge to all participants on sustainability issue and was expected to could be a platform in initiating future engagement in promoting sustainability.
Program
Soft Launch of Ecolabel Desk K a d i n (the Indonesia Chambers of Commerce) had just established Sustainable Recognition and launched its Scheme Logo new program namely the Ecolabel Desk Kadin, during the IBCSD LD Meeting at BNI 46 Building on 5th June, 2014. The purpose of this launch is to announce the establishment of this support desk to the general public in order to promote Ecolabel and SCP programs together with Indonesia Business Council for Sustainable Development (IBCSD) member companies as the champions of SCP. Ecolabel is one of the programs developed by the Indonesia Ministry of Environment (MoE) as part of the 10 Year Framework Program on Sustainable Consumption Production (10 YFP SCP) both in national and international level, in collaboration with the UNEP, which is the criteria for certification of environmentally friendly and sustainable Green Public Procurement. The key words of SCP itself are standardization and certification in order for the achievement of fulfilling the SCP criteria efforts are measured and recognized both nationally and internationally. KADIN as the organizational body of private sectors of Indonesia also shares the responsibility in reaching and encouraging its members to take a role in the achievement of fulfilling the SCP Categories, as a partner for the government for advancing sustainable consumption and production. This partnership is ratified with the signing of the Memorandum of Understanding (MoU) between KADIN and MoE, and as the real initial step of implementation of this MoU is the establishment of Ecolabel Desk Kadin program. The Permanent Committee of SCP Kadin has carried out the initiative by realizing SCP Recognition Scheme (SRS) in order to encourage other Kadin members to be able to have standardized products so that they can claim themselves as agents of SCP Indonesia. Ecolabel Desk is also appreciated as the first institution to recognize
Sustainable Label for Small Medium scale businesses, with the Ministry of Environment as in accordance to Minister's Decree no. 2/2014 is able to appreciate and recognize businesses that implement sustainable practices even if they are still in the early or intermediate stages. Kadin Ecolabel Desk is designed to facilitate SRS activities, including reaching SMEs who are under the wings of big corporations. The vision of Ecolabel Desk is to make sustainable practices as the real Indonesian business culture, and has the mission on the role and activities in Kadin i.e. (1) Information center as well as data library on ecolabel, (2) Ecolabel promotion center for business that has achieved green recognition and standardization, (3) Ecolabel coaching clinic, and (4) Coordinating desk on National Verification and Certification bodies. Ecolabel Desk has taken the lead in implementing quick wins 10 Y SCP target in particular for Indonesian business community with the purpose of promoting sustainable production and consumption which has been a part of a g lo bal p rog ram a nd commitment. Businesses will receive sustainable recognition label after being verified by Ecolabel Desk Kadin together with the Indonesian Ministry of Environment.
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WBCSD Column
What is Leadership for Sustainability ?
“Leadership in the 21st century is going to be more lateral and more connected. We are going to need to find people who are more persistent and more adaptable, who are more transparent in terms of what they are doing … Businesses will have to be networked with governments and society, and we need people who know how to do that.” -Jeff Immelt, CEO, General Electric
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The WBCSD was set up by a group of forwardthinking CEOs, before the Rio Earth Summit in 1992, when the idea that business had a role to play in sustainable development was barely understood. Over the past twenty years, WBCSD members, represented by their CEOs and senior managers in charge of sustainability, have worked together at a global level, and through the Council’s Regional Network in developing and emerging countries, to define solutions and practices for sustainable development in different sectors.6 WBCSD member companies see an opportunity for business not simply to reduce negative impacts or manage risks, but to create opportunities by tackling the world’s major issues. In 2006, a group of WBCSD companies mapped out the ‘Tomorrow’s Leaders’ model for how companies can do this in practice. While the Tomorrow’s Leaders model takes an organizational approach, the group recognized success depends on individuals being able to drive the change. They identified long-term strategic assessment and stakeholder engagement as two key skills. The case for business to draw opportunities by solving global societal problems is now widely recognized.7 While we have gained a better understanding of the leadership and management skills needed to address these challenges, there is no single leadership model. Our approach has been to examine the practical experiences of WBCSD members and highlight the critical leadership features. We have identified six key requirements for leaders: 1. Understand the context in which your business operates. Material issues go beyond immediate commercial and regulatory risks and opportunities faced by the business. This requires intellectual and cultural breadth and tactical depth. 2. Manage complexity and cope with uncertainty. Sustainability issues have no easy answers. They are complex and require actions from many stakeholders. Leaders therefore need to be comfortable with ambiguity, and be able to make decisions in the face of uncertainty, while continually testing and learning. The role of leadership is to set the conditions in which new strategies can emerge and evolve. 3. Take a systems thinking. Addressing sustainability issues means thinking big and understanding the interactions between issues at a city, ecosystem, national or global level. Energy and water, poverty and poor governance, environmental damage and lack of trust in business are all tied together and require to be addressed taking a systems solution approach. 4. Work beyond boundaries. The answers to sustainability challenges are unlikely to be found within the boundaries of existing business
functions or organizations. In companies, sustainability issues often reach from one end of the supply chain to the other. For instance, to deal with waste, you need to start at the design phase and consider sourcing and materials. To improve labor standards in supply chains, you need to think beyond factory audits to partnership with governments and communities, as well as change to sourcing and inventory management. Partnerships among government, business and civil society have emerged as a key mechanism for solving intractable problems that are beyond the influence, skills, investment capacity and technology of any one organization. Engaging and partnering with non-traditional stakeholders requires skills beyond the wellestablished negotiation skills needed for regulatory and market relationships. 5. Lead change. Shifting to radically less energy – and resource-intensive products and processes, and new business models requires massive transformation and change. The role of leadership is to inspire people to invest their capital, talents, motivation and trust at the level needed to foster long-term change. 6. Enable innovation. The search for innovative solutions means that the new leadership must develop a shared-value network, aligned around common values. The leader’s role is to energize and enlarge the community rather manage a restricted hierarchy. The findings above are also supported by research carried out as part of this project by WBCSD member company Korn/Ferry. The recruitment firm analyzed the leadership characteristics of over 1.3 million executives across sectors and geographies and found a very similar set of skills and attributes associated with excellence in sustainability (Figure 2) Leadership competencies that drive sustainability Korn/Ferry refers to leadership competencies as the “DNA” of leadership. There is no perfect combination, but different leadership styles and skillsets are better adapted to different missions. Korn/Ferry’s Peter Everaert says: “It would be too simplistic to promote a single ideal leadership profile to drive sustainability. One has to recognize that the best leadership style is always function of the challenge, the specificity of the organization and the environment in which it operates”. We have taught modern building skills for thousands of masons, and business skills for hundreds of small retailer businesses – empowering them to understand of the value of proper standards in building, in doing business ethically and in giving a service.
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WBCSD What is ..
The importance of critical leadership competencies to drive sustainability
1= not important and 7= mission critical Korn/Ferry uses the Lominger competency framework for leadership benchmarking. We refer to the book FYI For Your Improvement as a reference guide and suggested reading for executives.
New skills or new mindsets? Many of the leadership skills for sustainability are variations of the classic leadership and management skills i.e analysis, priority-setting and relationship building. However, to navigate the transformation toward sustainability, leadership skills have to be directed at a broader and more complex set of issues and networks. Figure 3 illustrates how these classic leadership skills have evolved over time. Time horizons extend beyond those which are usually considered in business and networks of influence are much wider. And analysis must expand to understand complex systems that operate at the community, ecosystem, and global level. In many ways, new mindsets that recognize the potential for business action on social and environmental issues, beyond incremental change and reputation-enhancing benefit to systemic change, are needed.
“’However, to navigate the transformation toward sustainability, leadership skills have to be directed at a broader and more complex set of issues and networks. “
Source: People Matter Lead: Enabling Leadership for Sustainability, WBCSD Publication, 2012
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Opinion
Why Companies Join IBCSD ? The business association has been growing with the business itself. The emergent issues and interest of business activities tend to direct companies in joining even more than one associations or business groups. Enter the industrial chapter of economic development, business nowadays translate money into different figure and value. Companies must face their own competition world without ignoring the necessary of stronger and unified presence by combining their common interest and voices under one notable group. The next subject matter would be the kind of business association that company need to join. Sectoral association might be a favorable place to compile segmented business goal for an industrial improvement. However, as the company grows into better value, they start looking for streamlined group that able to reflect company’s specific priorities by definite needs. Taking into account, the assertion of proven responsible business practices, sustainability should find its genuineness into business performance. The emerging change of how business operates them self may also force companies to seek its resemblance to a business group that brings together sustainability concept and its application in business. Beside of network opportunities that IBCSD may provided to its members just like any other business association, there is one major
line of reasoning that give different with another association. It is all of that matter with sustainability itself. Talking about sustainability in Indonesia, this is a thriving perspective on how the business should translate them self into this new ‘genre’ of development. Nobody can claim them self as an expert in this area. Sustainability is a developing proficiency that proven by experiencing it. Having said that, joining IBCSD would be one of the best opportunities in increasing the company performance with an ‘eye-opening’ experience of responsible business, and be part of the growing ‘know-how’ practices of sustainability within Indonesian circumstances. Thus, company must invest the necessary time and energy to make its membership in IBCSD worthwhile through strong involvement of company personnel. Company cannot expect any change may happen by assign just any personnel of the company to involve in the 'systemic way' of sustainability thinking. Investing the right people become important to take optimum benefit of joining IBCSD. It is people within the company that makes such change, and not the concept and strategy itself. In the longer run, company may able to monetize the benefit of joining as IBCSD members and that the company will enjoy by maintain its existence in the future.
“.. . joining IBCSD would be one of the best opportunities in increasing the company performance with an ‘eye-opening’ experience of responsible business”
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Leadership and Behaviour Change to Increase Star Rating Case Study— PT. Garuda Indonesia (Persero), Tbk
About IBCSD The Indonesia Business Council for Sustainable Development (IBCSD) is a CEO-led associations of companies operating in Indonesia, who share a commitment to promoting sustainable economic growth, ecological balance and social progress. To learn more about IBCSD membership, please contact: info@ibcsd.or.id Follow us on Twitter: @IBCSD2011 Facebook: IBCSD Indonesia Business Council for Sustainable Development (IBCSD) Menara Duta Building, 6th Floor Wing B Jl. HR. Rasuna Said Kav. B-9 Jakarta 12910 T: +62 21 5290 1941-42 F: +62 21 5290 1949 www.ibcsd.or.id
PT. Garuda Indonesia (Persero) Tbk. is a State-owned Corporation (BUMN) that has successfully received four star rating from an independent institution for world airline and airport star ratings, SKYTRAX. Through its “quantum leap strategy”, Garuda expects to receive five-star rating in 2014, making its service comparable to other five star world class airlines including Singapore Airlines, Cathay Pacific, and Qatar Airways.
actively forging cooperation with SkyTeam member airlines with this objective in mind. By joining SkyTeam, the global airline alliance with 20 members, Garuda is able to provide its passenger access to an extensive global network with over 15,700 daily flights to 1,064 destinations in 178 countries. Garuda also expands its network to Eastern Indonesia by using “explore” and “explore jet” (ATR72-600 and Bombardier CRJ1000) to increase connectivity in the region and to support MP3EI to promote new tourist destinations and new economy growth in the region. • Product Development and Diversification
The improvement that has been made covers the area below: • GCG improvement Leadership in cost by using balance score card, improving the cost structure, including the Differentiation operational, marketing, human resource Conducting integrated-service solution by introducing management, information system management and internet media and internet banking, maximizing the corporate financial costs, and efficiency. First, reduce utilization of GFF member card to provide more the cost of capital component as a result of customized services – CRM utilization alternative fund source usage (short-term loan, bond, • Emission Reduction convertible bond and stock). Second, accurate Garuda Indonesia is committed and actively investment. The leadership pattern also require the participates in suppressing the growth rate of gas leadership at all level, and built work value that is emissions resulting from operational activities “FLY HI” (loyalty, customer centricity, honestly, and through various programs that have been openness and integrity) as the basic of all activities implemented in line with Garuda Indonesia’s intra company and services delivering process to the ‘Quantum Leap Program’ and IATA’s Four Pillar passenger. Strategy (Improved Technology, Effective Operations, • Market Penetration and Development Efficient Infrastructure, and Positive Economic Garuda become the 20th SkyTeam’s member Measures). since 5th March this year and the second member from Southeast Asia. Garuda Indonesia’s President & CEO, Emirsyah Satar, expressed his gratitude to From several sources: 1) Garuda Indonesia Annual SkyTeam and all of the member airlines for all the Report and website , 2) Note by Aries Heru Prasetyo, support given to the airline thus far. Joining SkyTeam MM., Dr. Ningky Sasanti Munir, and Dr. Pepey Riawati is a long-term development strategy for Garuda Kurnia for PPM School of Management , 3)news Indonesia, as planned in the airline’s strategic expansion program “Quantum Leap 2011 – 2015”, and Garuda has been upgrading its service and
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