Safety, Health and Environment Performance

Nuplex Industries is committed to managing its activities in a manner in which no harm is caused to employees, customers, suppliers, property, the environment or the community at large.

Safety and Health

It was disappointing not to achieve the ambitious improvements targeted for key injury and incident statistics. However, results demonstrate that investment made in new processes, procedures and safety initiatives continue to provide materially better outcomes than those of a few years ago. The positive trend in all regions reported last year has not been maintained and Group statistics have moved away from targets as a result. Asia and Europe exhibited steady performances but these were insufficient to provide an overall improvement. Initiatives in Australia served to stabilise but not improve, while New Zealand and USA operations had poor performances. A very visible level of intervention has been established to raise performance to the required level.

Targets for coming years for each KPI shown below have been revised to ensure they are both realistic and, with hard work, achievable.

Safety Initiatives

The campaign to encourage greater levels of awareness of safety amongst Australasian staff is being enhanced by increasing the level of senior management involvement. This visible commitment and intervention is essential to achieving the step-change in performance that is sought.

Training, promotion and information exchange through newsletters and staff meetings, root cause analysis and extending the 5S housekeeping programme, as described in last year’s report, remain in place as the essential bases for improvement. More senior management involvement in meetings and regular workplace inspections will ensure that these measures are used effectively.

Similar initiatives are to be introduced in the USA sites. The spate of minor injuries experienced there in more recent times must be stopped and the performance returned to the traditionally excellent levels for this region.

		Manufacturing Sites		LTI-free
Region		Total	LTI-Free	Best Site	Years
Americas		2	0
Asia		5	4	Surabaya	8
Australasia		6	2	Wangarata	1
Europe		2	0

Injury–free sites

An unfortunate accident at the Louisville site ended the proud record of 11 years free of any lost time accidents. Four of the sites in the Asia region remain LTI-free and Surabaya continues to be the benchmark. Only six sites were LTI-free this year, down from seven last year.

Environmental

Site Contamination Issues

The programme of managing the legacy ground and aquifer contamination on four Australian sites (North Clayton and Cheltenham in Victoria, and Botany and Seven Hills in NSW) and the Avondale site in Auckland, New Zealand, has remained an important activity over the past year.

In each case, the relevant environmental authorities continue to be involved and independent auditors, approved by the authorities, have been appointed. The auditors provide assurance to the authorities that work conducted at each site is consistent with agreed objectives, standards and outcomes.

Consultants have been appointed to provide specialist knowledge and advice on dealing with specific contamination issues at each site. All known remediation costs have been fully provided.

North Clayton The Environment Protection Authority (EPA), Victoria issued a Clean Up Notice in November 2006 under the Environment Protection Act 1970. The environmental auditor has reviewed all the available data on hydrocarbon contamination in groundwater beneath the site. He has subsequently requested further testing at locations in the vicinity of the site and for health risk assessments within the site. The additional work has been conducted by consultants and results will be presented to the auditor in September. This will then enable the report to be submitted to the EPA in accordance with the agreed timetable. Provision has been made to cover ongoing costs of developing and implementing a control plan for contamination at this site.

Cheltenham A similar Clean Up Notice was issued by the EPA in June 2007 in connection with hydrocarbon contamination of soil and groundwater at the Cheltenham site. An environmental auditor was appointed and provided with all available background data. At the auditor’s request, additional on and off-site sampling locations have been established. These are being tested and a health risk assessment is under way to provide data for the auditor to submit in their report, a key requirement of the Clean Up Notice. The timetable for this work has been agreed with the auditor and EPA.

Botany In March 2008, the Botany site submitted a Voluntary Remediation Proposal to the NSW Department of Environment and Climate Change (DECC) in connection with hydrocarbon contamination of groundwater at the site. The Proposal was prepared in consultation with the auditor and was accepted by DECC. In accordance with the proposal, consultants have conducted offsite testing of groundwater, a health risk assessment and a pilot scale evaluation of the proposed remediation technique. Results will be reviewed with DECC in September 2008. This data will be used to establish a practical forward strategy for managing contaminated groundwater at the site.

Seven Hills Demolition and remediation started in May 2007 whilst APS administration and technical functions were still operating on the site. The timetable was delayed by some late manufacturing transfers to the Botany site. Consultants have been engaged to manage the environmental investigations, reporting and management of the remediation process to render the site suitable for sale for continued industrial use in terms of DECC guidelines as specified in the Remedial Action Plan.

Initial reports indicated a low likelihood of significant contamination on the site, however the demolition of major plants, utility buildings and paving revealed some unexpected chemical “hotspots”, very large foundations and anomalous underfloor piling. Significant amounts of asbestos cement sheeting fragments were also found scattered throughout the site in subsurface soils. The task of removal and disposal became much larger and more expensive as a result. Expected physical completion is tracked for October 2008.

Avondale Removal of process plant and equipment is in progress and is due for completion by the end of August. The decision to demolish all site buildings is still pending as potential buyers may see value in retaining them for their own use.

An initial investigation has been undertaken to determine the remediation required. During removal of underground bulk tanks, concurrent with the site investigation, more extensive contamination was revealed than previously anticipated. This contamination occurred during the tenure of previous owners. Management is working with local and regional authorities and an accredited consultant to ensure the environmental impact is minimised and an acceptable remediation plan is agreed.

Key Performance Indicators

A number of KPIs are monitored within the continuous improvement programme and group and site targets have been revised for the next three years. The revised targets are based on 2008 as base year and ignore the effects of expected growth in output.

Carbon Footprint

Measurement of Greenhouse Gas Emissions
The Carbon Footprint consists of a number of components. Sites have been tracking some of these for several years and others have had to be estimated. This latter group will be refined as reporting methodology of these components matures.

The Greenhouse Gas (GHG) Protocol is used in calculations and allows for harmonised global reporting while facilitating benchmarking opportunities.

The following is extracted from the AGO Factors and Methods Workbook (2006 edition) published by Australian Greenhouse Office.

The GHG Protocol defines three scopes of emission categories.

• Scope 1 covers direct emissions from sources within the boundary of an organisation such as fuel combustion and manufacturing processes.
• Scope 2 covers indirect emissions from the consumption of purchased electricity, steam or heat produced by another organisation. Scope 2 emissions result from the combustion of fuel to generate electricity, steam or heat and do not include emissions associated with the production of fuel.
• Scope 3 includes all other indirect emissions that are a consequence of an organisation’s activities but are not from sources owned or controlled by the organisation.

The following activities fall into this scope:

• disposal off-site of waste generated
• disposal of over-age products
• employee business travel – air and car
• employee commuting to work
• transportation of products, materials and waste.

The procedure takes the values recorded for these activities (generally in the form of energy usage) and applies a factor to them to give a GHG emission value. The factor accounts for all the various GHGs arising from the combustion of fuel and converts these to a value in tonnes of CO2 equivalents.

Factors for electricity vary from country to country because of the means used to derive the electrical energy. Hydroelectric and wind-power schemes have virtually no GHG value, but the value increases for the burning of gas through oil to coal. Consequently New Zealand electricity has a very low factor compared with Australia which uses a high proportion of coal. Nuclear power also has a very low value and impacts the factor in Europe.

Factors applying to product freight vary with fuel type, as does that applying to transport of staff to work. The factor rises from gas through petrol to diesel.

In the charts below, future targets have been revised, based on 2008 performance and output tonnages and have been kept constant at 2008 levels. It should be noted that these figures are under regular review and refinement of data collection and published factors may result in some changes.

Harvesting Rainwater

Management of water usage is an important performance parameter for limiting impact both on the environment and on the local community. This is especially so in Australia where water is scarce. The capital expenditure budget includes installation of tanks to collect rainwater which will substitute for town supply water in operations. Certain product lines will be converted away from town’s water and onto harvested water. Introduction to the Australian sites has been delayed pending other related projects and is scheduled for the coming year.

Contribution from Information Technology

The Nuplex Information Technology and Communication division has an active programme to reduce Nuplex’s carbon footprint.

Data Centre and PC initiatives are the primary focus. The implementation of Virtual Server technology has been completed in Sydney and will be rolled out to the USA and The Netherlands in due course. The Sydney project has reduced the number of servers by 30 per cent with a similar reduction in server energy consumption. In addition, a significant reduction in energy for air conditioning the centre will arise. When complete, this programme will reduce emissions by more than 200 tonnes of CO2e per year.

PC policy changes being introduced include the use of low energy consuming LCD screens instead of CRT screens and pre-set auto-hibernation when idle. In addition, “Wake on Lan” technology will allow workstations to be automatically switched on and off during predetermined periods, saving energy.

Compliance and Business Continuity

All sites remain in compliance with regulatory requirements. Regulations impacting on all sites are constantly changing, reflecting the higher expectations of the general public.

Europe

REACH This new European regulation (Registration, Evaluation and Authorisation of Chemicals) came into force in 2007. It requires the registration of substances produced in or imported into the European Union (EU), evaluation of their hazards and the assessment of risk to humans and the environment.

Nuplex Resins produces mainly polymers which at this stage are exempt from registration in the EU, provided relevant raw material constituents are themselves registered. The system is complicated and far reaching and will significantly increase costs within the broader chemical industry.

Silvertown The site now produces only non-hazardous powder resins and complies with relevant regulations. Improvement programmes, forming part of the environmental permit, aim primarily at upgrading monitoring, developing protection procedures and reviewing environmental impact. The new powder reactor and associated increase in plant capacity has impacted, requiring focus on controlling discharge of additional quantities of waste water.

Bergen op Zoom The environmental permit applied to this site under the EU SEVESO 2 legislation has been adjusted to include a safety zone around the site which prohibits the building of houses and other vulnerable objects within this zone after January 2010. Risk mitigation options are being explored with local regulators, with measures to be implemented next year.

A programme has been developed with the local Water Board to improve quality of waste water discharged from the site. The discharge application submitted includes installation of a treatment plant to meet higher quality requirements.

Asia

Melaka The plant continues to trial different configurations for bacterial treatment of waste water discharges. System performance has been improved by separating waste streams but the required standards are not yet able to be met regularly. Consultation with the Melaka Department of the Environment continues as further improvements are considered.

China The two sites in China have experienced a significant increase in frequency of regulatory audits as China prepared to host the Olympic Games.

The Foshan site Safe Production Certificate expires in May 09 and an application has been made to renew this certificate. Corrective actions to complete the recent Safety Assessment conducted by approved consultants are well advanced. A new scrubber system is being installed and completion of this project will complete the requirements for the site to attain its Environmental Permit.

The Suzhou site is in discussion with local authorities regarding possible expansion plans. These plans would see the site meet the Investment Bureau criteria for the site. The Suzhou site is also advanced in preparations for the reissuing of its Safe Production Certificate.

Surabaya The site is currently being expanded to include a capability to produce Unsaturated Polyester Resins. New equipment installed during the year has significantly reduced waste water treatment pollutant loads and VOC losses. A new fire system is nearing completion and meets best practice standards.

Vietnam The construction of the Hazardous Waste Store has been completed and passed regulatory review. The design of a fire system for the site is under way, with engineering designs under consideration. The installation is expected to be done during the next financial year.

Americas

Air emissions remain a key environmental focus, with regulatory initiatives concentrating on reductions of toxic air contaminants. Success in reclassifying both sites to synthetic minor status provided an exemption from pending new air regulations, thereby avoiding what would have been significant capital investment. Progress in identifying and addressing sources of nuisance odor was made at the Louisville site. The commercial sale of a spent solvent waste stream will provide further reductions in waste volumes in the coming fiscal year.

Australasia

WSMP This is the New Zealand Accident Compensation Corporation’s [ACC] Workplace Safety Management Practices audit system which measures a workplace’s compliance against health and safety legislation and good practice. There are three levels of accreditation; primary, secondary and tertiary, with tertiary being the highest. This results in discounts of 10 per cent, 15 per cent and 20 per cent respectively of the ACC levy if the business achieves accreditation. A re-audit is required every two years to maintain accreditation. The Resins, NCP and Speciality Chemicals sites were audited in 2006 and gained secondary accreditation. A re-audit was done in June 2008 and these businesses have now achieved tertiary accreditation which is a very good effort indeed.

The remaining business unit, Plaster Systems Ltd, has separate registration with ACC and is working towards an audit to gain WSMP accreditation later this year.

Penrose Penrose is working through renewal consents for trades waste and stormwater discharge in the face of increasingly stringent requirements by the local regulators. Higher levels of control are needed in each case. A Stormwater Environmental Management Plan is being developed and protection systems will need to be in place within the three-year deadline.

Botany The design of additional essential warehousing for this site has been completed. Current practice is to hire storage space but this is both costly and inefficient.

Product compliance All products manufactured in or imported into Australia and New Zealand have been notified as required and are in compliance with registration under NICNAS and HSNO legislative requirements. All new products are assessed for such compliance prior to release.

A new programme for the generation of compliant product labels was introduced for manufactured products in Australia this year. It will be extended to include New Zealand next year. Compliance implies consistency with MSDS and regulatory requirements and the programme allows for prompt updating as regulations change.

Corporate Governance

The Managing Director receives a full Safety, Health and Environment report every month. This report is presented to the Board at each meeting and SHE is a standard agenda item. The SHE report forms part of the Group Operations Report and advises on all injuries, incidents and near misses and the appropriate corrective action that has been taken. It also includes a commentary on general regulatory issues and licence conditions, emergency preparedness, health monitoring and SHE-related promotional activities as well as the results of internal and external audits.