EVALUATION OF INTERNAL AUDIT UNDERSTANDING IN ENERGY TRANSITIONS IN PT PLN (PERSERO)

• Main Author: Anastassia Hasibuan, Hertalina
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/75919
• Institution: Institut Teknologi Bandung

Carbon emissions are one of Indonesia's significant difficulties. The contribution from the energy sector is 56% of total Emissions. In response to these challenges, the Indonesian government has pledged, under the Paris Agreement, to reduce its emissions from 2020 to 2030 by 29% through its efforts and by 41% with the assistance of the international community by submitting a Nationally Determined Contribution (NDC) in 2015. Indonesia has committed to reaching Net Zero Emissions in 2060 or sooner through this NDC. Furthermore, the government of Indonesia reaffirms its commitment to the Enhanced Nationally Determined Contribution (ENDC) in 2022 to reduce greenhouse gas emissions by 31,89% compared to business as usual in 2030 and by 43.2% with international collaboration. PT PLN (Persero) is an energy sector company that produces electricity in Indonesia. As one of the companies in the energy sector, PLN also emitted carbon emissions in Indonesia. Because of this, PLN announced its intention to attain Net Zero Emissions by 2060. PLN will prioritize expanding its power capacity by utilizing clean energy to support Indonesia's economic and power demand growth under Net Zero Emissions scenarios. This scenario includes strategies and initiatives called the eight Lighthouse Initiatives on Energy Transition. In making strategic or critical decisions, at PLN, the four-eyes principle mechanism must be implemented. This mechanism ensures decision-making at PLN in planning and implementing activities/design decisions, considering complying with regulation principles. This mechanism is aligned and embedded in the three lines of the Defense model. The first line is the risk owner, the second is the risk management function, and the third is the Internal Audit. As the third line, Internal Audit is responsible for performing audits and consulting on implementing internal control, risk management, and governance in PLN. Based on the International Professional Practices Framework (IPPF), there are four competencies framework that Internal Audit needs to have. They are professionalism, performance, environment, leadership and communication. This research is carried out on the understanding and role of Internal Audit on the energy transition in achieving the net zero emission target. This research is conducted in qualitative and quantitative methods. The qualitative is done through a questionnaire survey given to the member of the internal audit in PLN, and the quantitative is carried out through interviews with the respondent from Internal Audit in PLN. The research results show that, in general, the Internal Audit at PLN understands what the energy transition is and the Internal Audit's position in the energy transition at PLN. However, in some aspects, the Internal Audit members still need more understanding regarding energy transition in PLN. It also shows that the realization of the roles of Internal Audit in energy transition still needs to be improved to ensure the program to ensure and give assurance that the process that has been carried out complies with the rules. Moreover, their understanding needs to be deeper regarding the energy transition. It is because of the need for more information regarding the energy transition that gets by Internal Audit. Therefore, this research recommends maximizing the information about energy transition in Internal Audits through training, knowledge sharing, and direct contribution to energy transition through collaboration.