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Making the Impossible Possible, Making the Possible Real ™

p. 1 of 5, v. May2015

Client: JGC Corporation (JGC)Industry: Oil and Gas Major Capital Project: DownstreamJMJ Service: Implementing Incident and Injury-Free™ (IIF™) Safety on a Major Capital ProjectProject: Capital Project PT Donggi-Senoro LNG Project (DSLNG)Project Phase: Phase 4, Engineering Procurement Construction (EPC)Location: Banggai Regency, Central Sulawesi, Indonesia

$2.8 Billion LNG Major Capital Project Completed Safely, On Schedule, with Outstanding Quality.Project Information:The Donggi-Senoro LNG Project (DSLNG), located in the Banggai Regency in the Province of Central Sulawesi and situated about 50 km south-east of Luwuk, is the largest LNG construction project and operations plant in central Sulawesi. Construction of the plant began on February 28th, 2011 and was targeted to be ready for operation by the end of 2014. The plant site comprises about 100 hectares of land along the coast facing the Peling Strait, which provides a deep-sea route from Surabaya and Makassar to Luwuk and Manado. DSLNG was established as a foreign investment company on 28 December 2007, with shares owned by Pertamina Energy Services Pte. Ltd. (29%), PT Medco LNG Indonesia (20%), and Mitsubishi Corporation (51%). Since February 2011, however, the ownership structure has changed to PT Pertamina Hulu Energi (29%), PT Medco LNG Indonesia (11.1%) and Sulawesi LNG Development Ltd. (59.9%). The $2.8

Results:• Projectfinishedontimewith

quality marks met

• 34Millionworker-hourswithoutaLostTimeIncident(LTI)

• LostTimeIncidentRate0.227

• TotalRecordableIncidentRate(TRIR)droppedby61%

• Adiverseworkforceof3000workerscommittedtoanIncident and Injury-Free Project

• Over50%oftheworkforcewerelocalandnewtothiskindofproject

• Surroundingcommunitiesexperiencedtransformedeconomic,socialandinfrastructuredevelopment

Making the Impossible Possible, Making the Possible Real TM

p. 2 of 5, v. May2015

billion Donggi-Senoro LNG project is one of several major gas infrastructure projects that the country hopes will meet mushrooming energy demands at home and around the region. DSLNG is the first Indonesian LNG project developed as a “downstream business activity” based on Law No. 22 of 2001, which enables separate development of upstream (feedstock gas supply) and downstream (LNG manufacturing) businesses. JGC won the contract to provide engineering, procurement, construction and commissioning services for the Donggi-Senoro LNG

AboutJGC:JGC, the contractor who originally brought JMJ onboard, won the contract to provide engineering, procurement, construction and commissioning services for the Donggi-Senoro LNG project. JGC has constructed LNG plants comprising around 30% of the world’s total production capacity, and is currently involved in numerous ongoing LNG projects in Indonesia, Australia, Russia, Malaysia, and Canada. Moving forward, JGC will continue to be active in promoting LNG business, as a top global LNG contractor.

BusinessChallenges:The DSLNG project represents a major investment that will generate great economic growth for Central Sulawesi through social, economic, and infrastructure development. However, this is the first project of its kind in an area where this kind of work was new to the overall population. Initially, there were conflicts and demonstrations among the local communities, who had demands for inclusion in the project. In order to staff the project and allay community tensions, the green field construction began with a significantly local workforce. Over 50% of the workforce were local workers. Many of these workers were former fishermen and farmers with little to no construction skill or construction safety experience. Add to this, inter-village tribal conflicts were set off among the workforce on-site by minor inter-personal conflicts. The non-local workforce was also quite diverse with language and cultural differences among the Japanese, Indonesian, Singaporean, Filipino, Malaysian, American and Europeans workers. Oil and gas development and production was a new endeavour for the client owner PT Donggi-Senoro LNG, and so there were some initial concerns about the stability of the project.

Shoichi Oku, JGC Site Manager DSLNG: “One of the biggest challenges we had was there was very limited number of skilled workers in the project, and what’s even more challenging was the lack of understanding about safety in general.”

Shoichi Oku JGC Site Manager

DSLNG

One of the biggest challenges we had was there was very limited number of skilled workers in the project, and what’s even more challenging was the lack of understanding about safety in general.

“

”

Making the Impossible Possible, Making the Possible Real TM

p. 3 of 5, v. May2015

Atho Budi, PT Guna Teguh Abadi (GTA) Construction Project Manager: “In the beginning, I felt it was a challenge to get close with the local community. The competency of the local workforce was low. At that time I made a policy to hire them first and we gave them orientations in one month. Then we coached them to learn all of the activities that we do in GTA. After that we asked them to choose which division/department they wanted to work on (rigger, scaffold, etc.) then we gave them the training as per their desired choice.”

DSLNGGoals:• A target of zero worker hours without a Lost Time Incident (LTI)

• Complete the project with no one hurt and everyone home happily to their families every single day

• To meet the project schedule

• Address the significant cultural issues and tensions

• Create harmony with the local communities and understand their perspectives

• Build trust and relationships

DSLNGandtheJMJApproach:At the beginning of JMJ’s partnership with the DSLNG project, two launch meetings were conducted—one in the client office in Jakarta and another in the project site in Banggai, Central Sulawesi. These meetings were immediately followed by an Integral Assessment process to gain an honest look at the beliefs, engagement and workability of the current project culture. The results of these assessments was fed into Commitment and Alignment workshops for senior leaders, designed to invoke a project wide commitment to safety and an aligned path among the varying companies involved for how to achieve maximum results. IIF Orientation, Supervisor Skills, and Train the Trainer workshops were held with staff across the project at all levels. Over 4500 project personnel attended the IIF Orientation sessions, and 429 attended supervisor skills training. Over the last 6 months of the project, trained staff conducted ongoing field coaching and skills training to ensure the commitment to safety became a reality throughout the workforce. As the project moved toward completion, the Leadership Team, including the Commissioning Manager, participated in a ‘Finishing Strong’ workshop as part of a ‘Finishing Strong’ campaign. The leadership team came up with its definition of ‘Finishing Strong’ and specific outcomes that would make this real for the project.

In the beginning, I felt it was a challenge to get close with the local community. The competency of the local workforce was low. At that time I made a policy to hire them first and we gave them orientations in one month. Then we coached them to learn all of the activities that we do in GTA. After that we asked them to choose which division/department they wanted to work on (rigger, scaffold, etc.) then we gave them the training as per their desired choice.

“

” Atho BudiPT Guna Teguh Abadi (GTA)

Construction Project Manager

Making the Impossible Possible, Making the Possible Real TM

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In order to connect with workers from local cultures, project leaders reached out and connected with local community, religious and youth leaders with an ongoing, open communications outreach effort. The project provided on the job training for local hires, and embedded the IIF safety approach within the culture by tying this in with fundamental values shared in common—care and concern for the family as well as being one with the community. The IIF Team created bilingual posters in English and Bahasa that included IIF reminders that reinforced the values of going home to their families safe every day, following safety procedures, wearing PPE and applying supervisory skills daily. This effort even extended into an organized sports tournament tied in with the theme of building teamwork and camaraderie. Toward the completion of the project, a number of companies also organized their own Supervisor Safety Training black-belt competition which promoted 2-way communication in planning each day’s work safely and with quality.

“Understanding the value of a foundation of talking heart-to-heart, our workers accepted the IIF message easily. I announced that I can be approached and spoken with 24 hours a day because we are one team, one family. I asked my other managers to be more proactive in making themselves closer to their crews, as well.” – Budi Suprapto / Site Manager/ PT Guna Teguh Abadi / DSLNG project Central Sulawesi

“The biggest impact for me was when I realized that I was going to the project site not because I have to as the site manager but because I want to.” – Shoichi Oku, JGC Site Manager, DSLNG

“JMJ is very different from other consultancies that I know. JMJ has more of an approach of real action. They taught us how to develop and maintain good relationships with each other, resulting in a greater understanding in our own team. I see that JMJ is different in the way they approach two-way communications while encouraging a respect of people’s differences. Theirs is a coaching approach, not punishment.” – Budi Suprapto / Site Manager/ PT Guna Teguh Abadi / DSLNG project Central Sulawesi

“The emphasis on relationships worked very well. JMJ repeatedly referenced the importance of relationships, often saying a relationship could be anything you wanted it to be. This made a huge difference; the ambience in meetings was very different to previous meetings. Subcontractors and owners spoke more freely, there was laughter and jokes. Challenges and issues were raised and we addressed them collectively.” – Nakanishi Kazuo, DS EPC Oversight Manager

Results:Project finished on time with quality marks met. At project’s end, the DSLNG project worked 34 Million worker hours without Lost Time Incident (LTI)—the LTI rate was 0.227. The project’s Total Recordable Injury Rate (TRIR) as of March 2014 was 0.10, which was a steady progression over two years, dropping from .34 in 2012. The project also saw a significant reduction in the severity of recordable injuries.

The emphasis on relationships worked very well. JMJ repeatedly referenced the importance of relationships, often saying a relationship could be anything you wanted it to be. This made a huge difference; the ambience in meetings was very different to previous meetings. Subcontractors and owners spoke more freely, there were laughter and jokes. Challenges and issues were raised and we addressed them collectively.

“

”Nakanishi KazuoDS EPC Oversight Manager

Making the Impossible Possible, Making the Possible Real TM

p. 5 of 5, v. May2015

All of these results were achieved by a Construction Project Team which had a widely diverse culture of people (including Indonesia, Japan, Philippines, Singapore, Malaysia, UK, Middle East, South Africa). 3000 local workers who were formerly fishermen and farmers developed the skills, knowledge and commitment to conduct high quality, safe construction work. As a result of project efforts, surrounding communities experienced transformed economic, social and infrastructure development.

“Our client is very happy and proud of our overall success with the DSLNG project, our on time schedule, quality and safety. We have seen incredible value emerge from the difficulty that we faced in the early stage…I saw and heard our local workforces comments that they are proud to work with us and be part of our company [GTA].”—Budi Suprapto / Site Manager / PT Guna Teguh Abadi / DSLNG project Central Sulawesi

“The local culture has changed. They feel GTA is a part of their family. We completed the project as targeted, safely, with good quality and we went home to our family with pride and prayers to our local community.” – Budi Suprapto / Site Manager/ PT Guna Teguh Abadi/DSLNG project Central Sulawesi)

“Biggest learning for me has been that the successful execution of a project safely has to become a core value. Unless we take care of the workers from the bottom of our hearts we will not be able to produce the results we want. If we want to win the hearts and minds of the workers, we should care. To me, it’s about leadership and it’s about partnership. It all starts from me.” – Shoichi Oku, JGC Site Manager, DSLNG

“Honestly, I have been more than 20 years in the project world and I have never found such a great approach as IIF safety. It is so different. I want to implement this in our company.” – Budi Suprapto / Site Manager/ PT Guna Teguh Abadi / DSLNG project Central Sulawesi

Man hours Statistics

2011 2012 2013 2011 2012 2013 JGCTarget

MH 2,749,900 13,333,372 26,660,134

TRI 3 13 10 TRIR 0.22 0.34 0.16 0.15

LTI 0 0 0 LTIR 0.00 0.00 0.00 0.03

JGC produced a video for a STARRT (Safety Task Analysis Risk Reduction Talk) competition. This is an intiative inside the IIF approach to ensure crafts people go home safely everyday.

Our client is very happy and proud of our overall success with the DSLNG project, our on time schedule, quality and safety. We have seen incredible value emerge from the difficulty that we faced in the early stage…I saw and heard our local workforces comments that they are proud to work with us and be part of our company [GTA].

“

”Budi SupraptoSite Manager

PT Guna Teguh Abadi DSLNG project Central Sulawesi