This paper was presented in front of Conference of ASEAN Federation of Engineering Organization (CAFEO25) at Cebu City, Philipppines, 26 - 29 November 2007

1. Managing Environmental Project at PT Inco; Actualization of Professional
Ethics as a Professional Engineer of Indonesia
(Nursery Project)
Habibie, Ir., IP, Ridwan Setiawan, Ir
PT Inco Central Engineering DP.08, Sorowako, South Sulawesi 92984, Indonesia
Andi Erwin Syarif, Ir, IP., MT
PT Inco Government Relation, DP.23, Sorowako, South Sulawesi 92984, Indonesia
1. PT Inco Profile; One of the World’s
Premier Nickel Producers
1.2. Vision
1.1. General Overview
PT Inco intends to remain a leader among
PT Inco for more than three decades, since multinational businesses based in Indonesia
the signing of its Contract of Work with the by consistently producing high returns on
Indonesian Government in 1968, the investment while adhering to strong
Company has provided skilled jobs, shown corporate values.
concern for the needs of the communities in
which it operates, benefited shareholders We will realize our vision by enabling
and contributed positively to the Indonesian employees to reach their full career
economy. potential and achieve outstanding results
for our Company.
PT Inco produces nickel in matte, an
intermediate product, from lateritic ores at We will strive to provide a safe, healthy
its integrated mining and processing and stimulating work environment that
facilities near Sorowako on the island of maximizes opportunities to enhance PT
Sulawesi. Its entire production is sold in US Inco’s success as a high quality nickel
Dollars under long-term contracts for producer.
refining in Japan. PT Inco’s competitive
strengths include abundant ore reserves, a We take pride in promoting environmental
skilled, well-trained workforce, low-cost responsibility and advancing community
hydroelectric power, modern production development.
facilities and an assured market for its
product. 1.3. Mission
The Company is owned 60,80 percent We will meet our commitment to:
owned by CVRD Inco, 20,1 percent owned
by Sumitomo Metal Mining Co. Ltd, 17,9  Investors through sustainable and
percent owned by publics and The others consistent long-term earnings
are owned by consortium of 4 Japanese growth.
Company.
 Employees by ensuring safe,
Through the strength of our people and healthy and rewarding work.
resources, we strive to be a safe, reliable,
and profitable growth-oriented primary  Customers by meeting our
nickel producer. obligations with respect to the
quality and timely delivery of our
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2. products. form of Post Mining Areas Rehabilitation,
Sediment Control, Liquid Waste Control as
 Indonesia through responsible well as Dust Emission Control.
corporate citizenship, fulfilling our
Contract of Work commitments and
community and environmental
responsibilities.
PT Inco is committed to ensuring that it
will operate in a clean, healthy and safe
work environment; will take necessary
steps and invest approximately to meet its
environmental obligation
Figure 2 - Plantation of Work in Post Mining Land
2. PT Inco’s Commitment in
Environmental around Contract of
Work Since the post mining area reclamation was
started on 1980, PT Inco has conducted
continual improvement on their
2.1. Environmental Management in
performance with sustainable development
Mining Land Operation
principle. When the post mining area
reclamation was started, they focused on
The commitment is spelled out in the
erosion control. Since then many efforts has
Company policy relating to environment,
been done to improve the performance.
health and safety stating that PT Inco is
committed to sustainable development
In 2003, PT Inco created standardization of
concept, taking into account the equitable
post mining area reclamation which has
balance between economic growth and
been certified by Directorate General of
sound handling of human health and
Mining to meet the demand for an optimum
environmental protection
result entirely. It consists of best practice of
post mining area reclamation activities.
Since then, the activities became an un-
separated part of mining plan until
execution level.
Up to the end of 2005 PT Inco Tbk has re-
vegetated 2.844 hectares of post mining
areas. PT Inco Tbk has cooperated with
PSl-UNHAS and The Biotechnological
Forest Laboratorium IPB in doing repeated
Figure 1 - Nursery Activities for Mining surveys and studying the reproduction of
Rehabilitation many local endemic plants to support the
local endemic revegetation program.
The policy necessitates PT Inco not only to
meet, but whenever possible, to surpass PT. Inco always tries to integrate the post
environmental national standard established mining area reclamation program with the
by existing regulation. community development program so
people can take advantages from the
PT Inco is committed to ensuring that it company. The company invited Mr. Zukri
will operate in a healthy environment, by Saad (consultant, former Executive
conducting continual improvement on the Director of WALHI), to evaluate the
living environment performance, in the reclamation program and to give
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3. recommendation over reclamation program sedimentation in during Mining
which is integrated with community and exploration, operation and post mining
local government development program. operation.
PT Inco also had been doing the installation
of new high technology called Off Gas
Cleaning System throughout all the
Processing Plant System starting from
Furnace System since year of 2004. The
objective of this project is to reduce the
amount of gas emission produced by the
process plant operation.
The other program is Hydrocarbon
Management which is ensuring that all the
hydrocarbon use must comply with
Figure 3 - Areas Rehabilitation Status at the End of environmental regulation by Indonesian
2004 PT International Nickel Indonesia
Performance Monitoring Post Mining Areas Law. The scopes of the program covered in
Re-vegetation Status Q4 - 2004 Environmental Management Standard –
EMS 01 produced by PT Inco with the
purposes are:
a. To ensure all Hydrocarbon facilities at
PT Inco recorded in a Central PTI
Hydrocarbon Management Register
that will be accessible and kept up to
date.
b. To ensure all Hydrocarbon facilities are
subject to a formal environmental risk
assessment and that appropriate control
are implemented.
3. Support and Engineering Services
Department of PT Inco; Place for
Managing the Capital Projects
3.1. General Overview
Support and Engineering Services (SES)
Figure 4 – ADITAMA Reward Gold Achievement provides support to the entire PTI
from Energy and Mineral Resources Department, organization in the form of Capital Project
Republic of Indonesia. Management, Engineering services,
Construction Services, Fabrication,
Maintenance System support and Shutdown
2.2. Environmental Management in Planning. There are approximately 500 PTI
Processing Plant Area employees in the department, while
approximately another 500 people are
In the year of 2006, PT Inco also Achieve managed through contractors.
the Gold of Aditama Reward from Energy
and Mineral Resources Department, 3.2. Vision
Republic of Indonesia due to the successful
in controlling the erosion and managing the
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4. Excellence in selection, installation and
maintenance of Assets required by PTI to 1. To provide facilities that will be able to
meet is vision. A team of highly skilled, cover the nursery process in one
energized professionals delivering this complete facility. The new Nursery was
Support Safely, reliably and predictably. intended to get 1 Million of trees per
year.
3.3. Mission 2. To provide the international class of
nursery which also a laboratory for
Provide Asset Management Support to the students and to learn how to understand
entire PTI organization in the form of the reproduction of endemic population
Capital Project Management, Engineering in Sorowako area.
services, Construction Services, 3. A recreation place for various of
Fabrication, Maintenance System support plantation in Sorowako which also can
and Shutdown Planning. be a training facility for community
around Luwu Timur area.
3.4. Goals and Objective
a. Capital Projects delivered safely, on 4.2. Project Life Cycle
time, on budget and meeting the
owner’s expectations. The life cycle of the project was started
b. Safe, cost effective, timely and high from project initiation until close out
quality delivery of construction process as follows:
projects.
c. Installation of the Asset Management 4.2.1. Project Initiation
Framework.
d. Support for the operating departments Project initiation, was started in January
to maintain PTI’s assets to fulfill the 2005, there were several part in this phase:
stakeholders’ sustainability a. Business case submission to strengthen
expectations. the justification was submitted by
INCO CAPITAL PROJECT DEVELOPMENT PROCESS
e. Effective and efficient maintenance Manager Mining and the Project
Sponsor. It was consisting of the
INCEPTION
shutdowns every time. IDEA / OPPORTUNITY Q /A
MANAGEMENT GATE 1
f. Effective People meeting personal background why the request should be
- OPPORTUNITY REVIEW
- RISK RANKING 1
NO
and organizational goals. approved, the safety and environment
- BUSINESS PLAN FIT
( CAPITAL REVIEW TEAM / MANAGEMENT APPROVAL )
YES
risk ranking process, defining the
PRELIMINARY NO
MANAGEMENT GATE 2 FEASIBILITY STUDY Q /A
PRELIMINARY REVIEW
alternatives of what we’re going to do
- EVALUATION OF ALTERNATIVES
- RISK ASSESSMENT 2
NO
to solve the issue, and providing
- BUSINESS PLAN FIT
4. Nursery Facility Project - STRATEGIC PLAN FIT
( CAPITAL REVIEW TEAM / MANAGEMENT APPROVAL )
YES
sensitivity analysis of return on
VIABILITY
TECHNICAL FEASIBILITY STUDY
investment and payback period.
MANAGEMENT GATE 3 Q /A
4.1. The Background and Key Objectives FEASIBILITY REVIEW
- PROJECT VIABILITY
YES NO
b. Capital review committee was doing
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- BUSINESS PLAN FIT
- STRATEGIC PLAN FIT
( CAPITAL REVIEW TEAM ) YES
The background of this project was the the risk ranking and approved to be CAR PREPARATION
capitalized as unplanned capital project
Q /A
previous nursery facility could not provide MANAGEMENT GATE 4
4
NO
more contribution to rehabilitation need in early of 2005.
CAR APPROVAL
YES
since the land of post mining required more c. Engineering work request (EWR) was ORGANIZE PROJECT
Reject & File
raised by the Mining Department as the
EXECUTION
seeding and variety of trees to be re- PROJECT KICK-OFF
vegetated. The existing facility also was not Owner to Central Engineering to ENGINEERING / PROCUREMENT Q/A PEER REVIEWS
continue the project to the process.
/ PROJECT QUALITY PLAN
presenting the face of commitment of PT
Inco to provide international quality of re- d. Superintendent of Engineering to assign CONSTRUCTION
vegetation result in post mining process. the Project Manager and Team. COMMISSIONING Q /A
In this phase, the sponsor also provided the
MANAGEMENT GATE 5
OWNER ACCEPTANCE
( CARE, CUSTODY & CONTROL )
5
In 2005, PT Inco decided to start to build presentation called “Preliminary Study YES
START-UP / RAMP-UP
Stage” as the part of business case
COMPLETION
the world class of Nursery (total area is 2.5
Ha) with the objectives are: submission consist the background of the POST PROJECT REVIEW
Q /A
NO
TURN-OVER
YES
CLOSE-OUT
MANAGEMENT GATE 6
4 QUALITY
ASSURANCE
OWNER FINAL ACCEPTANCE 6 Q /A PEER
YES REVIEWS
ARCHIVE PROJECT Q /A
MARCH 31, 2004

5. request, the benefit for the company, was it
opportunity or stay in business and how
significant the product will impact the
production and long term company
business.
The flowchart below (Figure 5) is showing
the management of capital project
development process at PT Inco.
4.2.2. Project Planning Figure 5 - Inco Capital Project Development
Process (Project Initiation Process Group)
Project planning, was started the in March
2005 under PT Inco Project Manager. This
phase comprise of: d. Risk Planning, the Project Manager,
a.Project Engineer will be assigned to help Project Engineer and Team to review
ger related to Technical Issue during pro life cycle.
ject the documentation of related
b.Established project scope definition information, gathering the information
sponsor to get information deeper about “why are we doing such as the location of the project in
tives, the generic project scope requirements, the location term of physical condition, community
on, the major material and equipment required for this and social condition, the topographical
ment, health and safety requirement, what the product will assessment, the security and safety
dget, project constraints and risk planning, and other related aspects to be considered during the
project life cycles so the risk can be
c.Scope planning and project planned, solved, monitored and
development, to seek more input about the requirement of responded as it should be. Also the
phase was really important to ensure the operation people, analysis of assumptions and constraints
tative and the owner were in the same perception of the end should be collected to ensure we had
The project manager required to understand what the the quick and proper response risk
pen in this nursery (Hazop study), what kind of facility and planning.
red to ensure the operation is running, the type of materials e. Provided preliminary Layout and Work
re interruption after the product completed. There were so Breakdown Structure (WBS) to ensure
must be addressed prior to procurement and design phase. there were no work packages were
missed as agreed scope with the
sponsor of the project.
f. Arranged CAR and budget book
comprises of:
- Statement of objectives and
deliverables of the project,
- Budget Estimate,
- Scope of Work.
- Schedule Development and
Network Diagram,
- Hazard and Operability (Hazop)
study result, technical feasibility
study (including environment and
safety evaluation).
- Human resources planning and
organization chart. The type of the
organization is Composite type
where all the project Manager’s
team were taken from different
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6. Functional Manager and some of
the team also were doing other
projects and daily activities and
report to their Manager which was
outside this project activities.
Figure 7 - Simple Project Organization Chart of
Nursery Project
4.2.3. Project Execution
Project Execution, was started on June 2005
and finish on April 2006. There were several
phases to be included as the part of execution
phase, these could continue after the
CAR/Budget Book have been approved by
PTI Senior Management Level.
a. Continued the Approved Preliminary
Lay Out into the detail design phase.
The process of the design consist
drafting of the drawing and bill of
material calculation, scope of work,
specification detail. These whole works
Figure 6 - Failure to Communicate Scope were collected into the product called
“Engineering Work Package – EWP”.
In this phase, the Project Manager worked b. Tendering and Contract Process. This
with the Project Engineer to ensure all the process was involving contract services
related aspects of the project requirements department to assign Contract Engineer
were fulfilled. The organization chart of the to help the Project Manager in
project was shown in CAR/Budget Book arranging the tender (pretender meeting
submission as shown below. The budget of and site visit with the contractor) and
the project was US$150,000 at the first contract submission with the awarded
stage, due to scope creep the project value contractor afterward.
became US$ 350,000 by the end of the c. Procurement Process. The required
project. materials as per Bill of Material could
Owner: Harry Asmar be directly ordered as warehouse stock
Manager of Mining and/or direct purchase. The phase of the
purchase could be divided by three
major processes are: provided MR,
Sponsor: Dwayne Kroll select the best vendor and produce the
Mine Engineering Department contract to liaise with the selected
vendors.
d. Construction Process. The construction
Project Manager of the Nursery Project was undertaken
Glenn Schrum, P.Eng
by 2 main contractors as the project was
divided by two major works:
Project Engineer Construction Manager i. Landscaping work by PT Mitra
Habibie, Ir., IP Terry Cavender Ateda using Turnkey project type.
The contractor was responsible to
Design Engineer: Contractor:
PT. Mitra Ateda, Jakarta PT. Capra Karya 6
Habibie, Oesman Reza, PT. Mitra Ateda Selaras
Alamsyah Syamsuddin

7. design, procure, construct and c. Scope Control and Verification, to
provide 3 months warranty after the ensure the scope of the project still
product of the project was meet the updated project scope
completed. The landscaping work definition as the Project Sponsor
product will be detailed in requested and ensuring the product of
deliverables of the project. the project to be accepted in every
ii. Main access road, drainage, phase or process of the project.
electrical power supply and lighting d. Risk Monitoring and Controlling, this
facilities. process was intended to identify,
e. Commissioning Process. The analyze, and planning for new risk and
commissioning of the facilities to be keeping on track the current risk that
divided in four major disciplines, the has been identified in Risk
building itself, the electrical and Identification/Risk Planning. In this
instrumentation system and mechanical particular case, the risk of the project
commissioning consists of pump, tank was only concern on schedule
and sprinkler commissioning. achievement due to the new facilities
During Project Execution Process Group will be inaugurated by the Minister of
the Project Manager will give more Forestry on April 2007. Other related
responsibility to Project Engineer to set up risk such as material and equipment
and implement the Quality Assurance; is delivery from manufacturer to project
the application of planned, systematic site was very low.
quality activities to ensure that the project
will employ all process needed to meet the 4.2.5. Project Close Out
requirements.
This phase was intended to close out the
4.2.4. Project Monitoring and project that was started on May 2006 and
Controlling completed on August 2007. The closing out
process divided into two major activities;
This phase consisted of several Process administrative closure and contract close
Group: out. Arrangement of Care, Custody and
a. Managed Project Team, during this Control was taking place formalizing the
phase the Project Manager was strongly final acceptance of the Sponsor to the final
recommended to keep the team product.
consistent to the completion of the
project. Building the team spirit and The final product from this project
resolving the conflict during the comprised of several facilities as follows:
execution of the project. The Project  Office building, Senior Supervisor of
Manager should be able to ensure the Re-vegetation of PT Inco and his crews
project was finished on time, on budget, getting the office for daily activities to
on schedule without Disabling Injuries. plan, execute, monitor and control the
b. Quality Control Program, the inspection nursery activities.
of quality control should be the part of  Parking area access road along the area.
the Project Manager’s responsibility to  Water tank with capacity 50,000 liters
ensure the satisfaction of the client after for watering the plantation.
the project was handed over to the  Electric pump to operate the
Operation (project Sponsor). The sprinkler/spray system.
quality control program such as
 Open area for watering area/hardening
concrete compressive strength test,
(sprinkling area). Place for seed to
galvanized film and painting thickness
adapt before planted on the field,
of the structure, electrical grounding
automatic spray system. The capacity is
test, pressure test, and other related
600,000 plants per cycle.
inspection and testing plan (ITP).
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8.  Media handling, the open building to determine the actual results of the
prepare the seed. project with respect to Savings, Profits,
 Germination house, the facility to for etc.
seed reproduction using generative  To recognize subsequent actions which
method and place for sprinkling the may be necessary that was not taken in
seed. The capacity is around 300,000 the project from beginning till the end.
seeds per cycle. We called it work breakdown structure
 Propagation house, facility for local lessons learned.
plant reproduction using vegetative
method. The capacity is 400,000 per
cycles. The use of sprinkling for
adequate watering, the light intensity is
75% and the roof type of the facility is
using UV plastic.
 Mycorrhiza house, the facility to
produce the fertilizer with the capacity
2 tons/year.
Areal pembibitan berdiri di atas lahan seluas 2,5 hektar.
 Hydroponik training facility. Fasilitas pembibitan terbesar industri tambang di Indonesia.
 Seed storage container.
 Wooden house for recreation and Germinationn House
refreshing. Seed Container
Propagation House
Media
handling
Shaded House
Hardening
Hydroponik Training
Facility
Pump
Mycorrhiza House Office
Water Tank
Figure 8 - Final Product of Nursery Facility Project
Other things should be the part of close out 5. Code of Ethics as Professional
process group is to complete the post audit Engineer of Indonesia
contains lessons learned with the purposes
as follows: 5.1. The Ethical Professional Engineers
 To provide valuable source of The Institution of Engineers, Indonesia
information for improving the project (PII) declared the professional ethics that
and any lesson shared. should be practiced by all the Engineers of
 To provide opportunity to create Indonesia as per Anggaran Dasar and
accountability within the process for Anggaran Rumah Tangga of PII.
estimates given and any decision made
during the project execution phase. We know exactly that the Engineering is an
 To provide an important financial important and learned profession. As
control mechanism, to look back and members of PII, engineers are expected to
8

9. exhibit the highest standards of honesty and  Develops and implements the planning,
integrity. Engineering has a direct and vital scheduling and estimating of the
impact on the quality of life for all people. Engineering function.
Accordingly, the services are provided by  Responsible for the quality, technical
the engineers require honesty, impartiality, competence and professionalism of the
fairness and equity, and must be dedicated Engineering effort.
to the protection of the public health, safety  Complete engineering design
and welfare. calculations to meet accepted design
standards, project scope and PTI
In fulfilling our professional duties, we standard specifications.
shall:  Prepare and collate Engineering Work
 Hold paramount the public’s health, Package documentation, to ensure all
safety and welfare. aspects of construction, safety and
 Perform services only in areas of our quality are clearly defined.
competences.  Provides Engineering direction and
 Avoids conflict of interests. support for Procurement and
 Act as a faithful agents or trustees of Construction groups in the formulation
our client’s interest. of the Procurement and Construction
Plans.
 Avoid improper conduct in the
 Resolve technical issues during project
solicitations for assignments.
execution and commissioning, to ensure
 Act to uphold honor, integrity and the the project meets the planned objectives
dignity of our professions. and quality.
 Maintain competence in our professions  Informing the project manager
through continuing education and regarding progress on tasks and report
training. immediately when a judgment is made
 Respect our community and that the output targets cannot be met, or
environment in all of our endeavors. more can be achieved.
 Asking the project manager for
clarification, when needed, on what is
5.2. Project Engineer’s Role as an expected of the role.
Actor who Implemented  Taking the initiative to improve your
Professional Ethics work, the overall business, and promote
the goals of the organization.
In PT Inco, Project Engineer has more  Working effectively and collaterally
responsibility rather than other project team with immediate colleagues and others
to run the project to meet the deliverables in cross-functional relationships, on
of the final product, safety, cost and related tasks within the context of corporate
Key Performance Indicator (KPI) factors. policy, values, and culture.
In this case, the purpose of Project There are a lot of accountabilities should be
Engineer’s role is to provide Civil performed by Project Engineer of PT Inco
Engineering Technical Expertise to support and should be relevant to actualization of
all civil work related to Engineering Professional Ethics as Professional
Department’s Accountability. Managing Engineers.
Engineering projects related to civil
engineering and implementation program. During working in Nursery Project, there
Generic Accountabilities (all employees will were several engineering activities
be accountable for the following): decisions made up by the project engineer
such as:
 Determined the best location of new
Nursery Facility as per Feasibility
9

10. 1
Study conducted together with project Project Management Body of Knowledge,
team. This means, the decision was 3rd Edition. Project Management Institute,
made based technical judgment as the Four Campus Boulevard, Newton Square,
way should be (no conflict of interest). USA, 2004
 Managed the scope limitation between
2
the two contractors who did the works. Capital Project Owner’s and Sponsor’s
The scope of works had been performed Handbook. PT International Nickel
in the contract and tender arrangement Indonesia, 2005
before then. No works shall proceed
3
without contract agreement and so the Engineering Procedures Manual. PT
contract must be detailed on what and International Nickel Indonesia, 2006
who’s doing the related works.
4
 Managed the construction works on the AD/ART & Susunan Pengurus Masa Bakti
field, fair in making the decision if 2006 - 2009 Persatuan Insinyur Indonesia.
there was a deviation to quality or Persatuan Insinyur Indonesia (PII), 2006
scope of works performed by the
5
contractors. They should rework and/or Sid Dewberry GMU Graduation Speech,
repair the defects if it was not meeting 2005.
the quality satisfaction.
6
 Conducted the safety layer audit (SLA) PT Inco website: http://www.pt-
to ensure all the workers were working inco.co.id/new/profil.php, 2006.
safely and returns at home safely. The
professional engineers should hold the
responsibility to protect and help the
project team (from PTI project team or
contractor) with ensuring the done the
right, safe and proper actions.
 Improved the designs that were raised
by the consultant to meet the standard
and specification of PT Inco such as the
installation of vertical and horizontal
bar inside the concrete block walls to
ensure the building is strong enough
from seismic design since Sorowako
area is very closed to central of earth
work (zone#4).
 Approved all the design changes done
by the contractor which were expected
to change the quality of required
designs and specifications. Professional
Engineers should always rely on
technical judgment during project
execution.
 Decided to install the disconnect switch
outside the office building for electric
pump to ensure the power could be
switch off if the failure occur to the
existing system.
Reference:
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