PEOPLE, PRACTICE & PURPOSE QUARTER 3 2015
JAMAICA PUBLIC SERVICE:
FUELLING JAMAICA’S FUTURE
BP TRINIDAD AND TOBAGO:
COMMUNITY ENERGY AT WORK
OMANTEL
PROVES THAT SUSTAINABILITY AIDS PRODUCTIVITY
Pantaleón
Sweetens Life in Central America
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TEAM Editorial: Brian Jackson Susette Horspool Mark Mackay Production Karen Hue Jason Olayinka Arantxa Salas Cifuentes Arabella Sansegundo Mulero
Editor’s Note Brian Jackson
Research John Mills Joseph Philips
Editor
Welcome to this quarter’s edition of The Sustainable Business Review! Once again we have a magazine packed full of interesting content, featuring companies who are at the very peak of their game and demonstrating a clear desire to push the boundaries in terms of innovation, commitment, new product development, sustainability initiatives and corporate social responsibility, to name but a few. Our lead story is Pantaleon, based in Guatemala-Central America, who are making great strides in the sugar cane industry. We are also proud to continue our series of articles about key companies in the Caribbean who are making substantial contributions to the region’s economy and quality of life for its citizens. This quarter’s edition focuses on BP Trinidad and Tobago, The Water and Sewerage Authority (WASA) of Jamaica and Jamaica Public Service Company (JPSCO). These organisations are making significant investments, not only in terms of generating additional revenues but also in terms of sustainability and CSR. The Sustainable Business Review specialises in featuring diverse companies from around the globe, so you will also find in this quarter’s publication, MSM Holding Malaysia and its sustainable initiatives,
Shanta Gold with their impressive mining credentials, Omantel, trailblazing in the telecoms industry in the Middle East, and Spain’s Ferro Atlantica Group , a worldleading producer of Silicon Metal and Manganese, which goes from strength to strength. There are many other companies also featured in this exciting edition. Our articles are primarily based on interviews with senior executives. This allows us to get to the very heart of the company’s value system. Their approach and belief in generating incremental revenues and profits alongside environmentally friendly and CSR principles is plainly clear from the interviewees’ enthusiasm , drive and absolute belief in what they are striving to achieve with each of their business portfolios. We hope you enjoy this quarter’s travels around the globe, discovering industry insights, trials and tribulations, success stories, astounding Initiatives and more! See you next quarter!
CONTENTS QUARTER 3 2015 SPECIAL REPORT:
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BP TRINIDAD AND TABAGO
pROFILE:
18 28 36 44 52 62 7o 78 84 92 98 106
PANTALEÓN JAMAICA PUBLIC SERVICE FERROATLANTICA GROUP AQUABLANCA’S EXPANSION WATER AND SEWERAGE AUTHORITY OMAN TELECOMMUNICATIONS SHANTA GOLD JORGE CHAVEZ INTERNATIONAL AIRPORT HOUSING AGENCY OF JAMAICA MSM MALAYSIA HOLDINGS BERHAD MEC PANAMA BERHAD BESALCO ENERGIA
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CATEGORY
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INDUSTRY NEWS: ACCIONA ENERGÍA TO BUILD $343M SOLAR FARM IN CHILE farm when completed. The facility will be able to power around 250,000homes in chile with the production of 505GWh of clean energy annually. It is also projected to reduce carbon dioxide emission of about 485,000 metric tons per year. Construction work will start soon, completion expected by mid-2017.
ACCIONA Energía will invest $343m in the construction of El Romero 247MW Solar farm in the Atacama deserts of Chile. This plant spreads out on over 280 hectares in the Atacama Desert and will be Latin America’s largest solar
with
ACCIONA Energía CEO Rafael Mateo commented: “the start of construction work on El Romero Solar is a very significant milestone, one that will enable us to respond to our commitment to supply renewables-based power in Chile and strengthen our role in the country’s energy sector. “We are very pleased to contribute to the availability of clean, quality energy in Chile through what will be our biggest photovoltaic plant in the world”.
£416M THAMES TIDEWAY TUNNEL CONTRACT WON BY BAM NUTTALL JOINT VENTURE. A joint venture of BAM Nuttall, the UK civil engineering unit of Royal BAM Group, has won a £416m contract to deliver the western section of the Thames Tideway Tunnel. The joint venture also includes Morgan Sindall and Balfour Beatty Group. The Thames Tideway Tunnel or super sewer project, valued at £4.2bn, is touted to be the largest infrastructure project undertaken by the UK water industry. The project is aimed at managing sewage pollution in the River Thames, reducing the 39 million tonnes of untreated sewage flowing the River Thames in a typical year, and upgrading London’s sewerage system to cope with new demands.
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The project is slated to begin in the next year, and is expected to have a span of seven years. BAM Nuttall chief executive Stephen Fox CBE said: “BAM Nuttall Ltd has a rich heritage of delivering complex civil engineering projects and as a business we are renowned for our expertise in the delivery of tunnels.
“We are delighted to have been awarded this prestigious contract during our 150th anniversary year. We look forward to delivering a successful project for Bazelgette Tunnel Ltd, which will benefit Londoners as it will bring life to the River Thames for many years to come.”
NEWS
CROSSRAIL SHIPS 3M TONNES TO CREATE WILDLIFE The owners of the 16bn Crossrail Project , Europe’s largest infrastructure Project are working hand in hand with RSPB to create a wildlife reserve in the Thame’s estuary. The Wallasea Island Wild Coast Project will be much bigger than the city of London. Crossrail has achieved this mainly through transporting via train , lorry and boat 3m tonnes of dirt , dug during the project. Andrew Wolstenholme , CEO of Crossrail , neatly sums up the initiative: “This trailblazing partnership with the RSPB is a key part of Crossrail’s sustainability strategy and demonstrates the benefits that can be achieved when the construction industry and environment groups work together Mike Clarke, chief executive, of the RSPB, said: “We hope this way of working together will become a model for similar initiatives to recreate threatened habitats and protect threatened species elsewhere in the UK and across Europe.” Andrew Wolstenholme, chief executive of Crossrail, said: “This trailblazing partnership with the RSPB is a key part of Crossrail’s sustainability strategy and demonstrates the benefits that can be achieved when the construction industry and environment groups work together.
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EVENTS: 21-23 Sep 2015
KUALA LUMPUR CONVENTION CENTRE, KUALA LUMPUR, MALAYSIA
LIVESTOCK ASIA Expo & Forum is a 3 day event being held from 21st September to the 23rd September 2015 at the Kuala Lumpur Convention Centre in Kuala Lumpur, Malaysia. This event showcases products like As Asia’s leading exhibition organiser and the biggest commercial organiser in the fastest growing markets in Asia : China, India and South East Asia, we stage the leading events of their kinds across Asia. They include market leading industry shows such as Renewable Energy etc. in the Agriculture & Forestry industry.
ZERO WASTE CONFERENCE
BUILDING THE CIRCULAR ECONOMY October 29, 2015 @ Vancouver Convention Centre East 999 Canada Place, Vancouver, BC V6C 3E1REDEFINING VALUE A GLOBAL SHIFT IS UNDERWAY : As the global marketplace shifts away from a linear take-make-dispose model, businesses, policymakers and others are taking bold steps to mainstream and scale disruptive ideas, new business models, enabling technologies and more.
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THE 10TH ANNUAL SUSTAINABLE SUPPLY CHAIN SUMMIT EUROPE 10-11th November 2015 • Tower Bridge Hilton Europe’s leading meeting place for corporate leaders delivering supply chain sustainability and business resilience. Back now for its 10th year, it’s the go to event for professionals working in supply chain, procurement, sourcing, sustainability or CSR.
EVENTS
EUROPEAN ENERGY AND INFRASTRUCTURE FINANCE FORUM 16-17 December 2015 @ London, The Kensington Close Hotel Organised by: FAR, a part of GWC Meet industry leaders and discover new investment avenues for renewable energy and infrastructure in the UK and Europe. See how climate change impacts investments in energy and infrastructure, what the largest risks for the future business are and how to mitigate them. Discover how energy utilities and infrastructure giants address growing renewable energy market, find out how to best to secure finance for your projects and what approaches other players take. Investors at the conference belong to the strongest in the market, representing over €10 trillion in assets.
THE LATIN AMERICAN AND CARIBBEAN CARBON FORUM (LACCF) 9-11 2015 @ Chile- Santiago, Región Metropolitana The Latin American and Caribbean Carbon Forum (LACCF) is a unique, free of charge regional conference and exhibition platform established in 2006 to promote knowledge and information sharing while facilitating business opportunities among main climate finance and emission market stakeholders The core objective of the LACCF is to bring together main stakeholders, global and regional, climate finance and emission markets, such as: • Designated National Authorities (DNAs), national climate change focal points, investment promotion agencies; • Climate change project owners, project developers and potential CDM sectoral institutions; • Financial institutions, national and regional development banks, stock exchanges, service providers and intermediary companies.
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BP
BP is a company that needs little introduction. A “supermajors”of the global energy industry, it i the world over. The company has a presenc countries and has over 80,000 employees. In 201 total revenues of $358.7 billion, making it one companies in the world. Its daily output of oil alon average 3.2 million barrels per day.
Trinidad AND TOBAGO COMMUNITY ENERGY AT WORK
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BP TRINIDAD AND TABAGO
As one of the is well-known e in over 80 14, it recorded of the largest ne reached an
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As with any supermajor, perception of them and show at BP Trinidad and Tobago Trinidad and Tobago, the the 1960s. Its output now acres currently in operation installations, two as-yet new production-sharing
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BP does its utmost for CSR that they’re improving aspec is indicative of the changes small Caribbean archipelago represents about 17% of BP off Trinidad and Tobago’s ea unchartered deepwater bloc agreement signed in 2012.
BP TRINIDAD AND TABAGO
R. These firms have been keen to improve the publics’ cts of their firms outside of the P&L sheet. The evolution s occurring under new CEO Bob Dudley’s stewardship. o, has hosted BP operations in one form or another since P’s global oil and gas production, with just over 900,000 ast coast. BP Trinidad and Tobago comprises 13 offshore cks and 899,000 acres yet to be accessed as part of a
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BP TRINIDAD AND TABAGO
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A Commitment to
CSR
The headline figures for BP Trinidad and Tobago are impressive in life of Trinidad and Tobago with its CSR initiatives. The company has and manpower development and the environment – all with one binding Tobago. At the core of BP’s CSR initiatives in the country have been what they’ve local community are trained so that they can partake in the employment with several NGOs to deliver on these goals. BP Trinidad and Tobago’s scholarships and incentives and technical and vocational training. It also Further up the educational ladder, BP has established a partnership BP founded an accredited Petroleum Geosciences undergraduate of these courses by providing staff to lecture full semester courses,
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BP TRINIDAD AND TABAGO
themselves but the company has also made a stellar contribution to the established relationships in areas of education, arts and culture, enterprise theme: a focus on the long-term empowerment of the people of Trinidad and
termed ‘capacity building.’ This has entailed ensuring that members of the and development opportunities offered on the dual island nation. BP works education initiatives have included remedial education programs, academic includes awards such as the top Secondary Entrance Assessment in Mayaro. with the University of the West Indies. There, along with otherstakeholders, programme at the beginning of the last decade. It commits to the quality provides prestigious guest lecturers and mentors students during summer
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THE SUSTAINABLE BUSINESS REVIEW internships and final-year project. BP also sponsors MSc programmes in Petroleum and Resevoir Engineering, contributing just under $1 million a year towards the program. All in all, this has meant that, of 935 BP employees on the island, over 95% of them are from the local community. Outside of Trinidad and Tobago, BP hires a further 58 of its nationals, showing the lasting impact of their training and development practices. The company’s impact is not limited to career development. BP Trinidad and Tobago also contributes to humanitarian efforts in the country. It has an ongoing partnership with Habitat for Humanity on the islands, first developed in 1998. Together they have built houses in the poor Mayaro/Guayaguayare area as well as more homes as part of the Women Build Project.
Operating Locally An extension of BP’s commitment to the socioeconomic development of Trinidad and Tobago is its promise to use local partners wherever possible. The oil and gas industry has become the country’s largest with a noteworthy knockon effect of this being that many quality service channels have emerged to cater to giants like BP. As such, there are a range of smaller local companies which BP works with on the islands to carry out its functions. Earth Trinidad is a small multi-services company that helps BP with its waste management and other services. Digi-data is an IT solutions firm that BP turns to for managing its technology. The oil and gas industry, like every other, is
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BP TRINIDAD AND TABAGO CATEGORY
churning out increasing amounts of data in its operations and having an on-call data solutions firm is therefore paramount. When BP requires testing on some of its sites, it can turn to NDT (Non-Destructive Testers) which provides it with ultrasonic and radiographic testing on its underwater sites. BP Trinidad and Tobago’s operations regularly require scaffolding and for this, it can count on its partnership with local firm, Safeway Access and Support Systems. Finally, several of its engineering functions on the islands – particularly dredging - are carried out in tandem with Capital Signal, a local engineering firm in operation since 1990.
Cleaning up its game BP has received huge amounts of criticism at media and government level over the past few years – and deservedly so in some cases. However, it’s important to provide a balanced picture and its operations in Trinidad give scope to do that. In over forty years on the island nation, BP Trinidad and Tobago has put in place world class CSR initiatives and continues to develop them. The vast majority of its staff are local, having been locally educated partially through BP’s resources and it maintains a strong network of partners in the country. When it wants to improve its reputation on a worldwide level, BP should look no further than its operations in Trinidad and Tobago for how it should be done.
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Pantale贸n
Pantale贸n
Sweetens Life in Central America
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In reaction to a painful, nine day worker strike in the 1970’s, Pantaleón started a course of
improvement that led it to become a
world leader in
sustainable sugar production
and an ethical leader for Central American businesses. The company’s changes improved its operations, its reputation, and its bottom line.
Pantaleón’s early history was primarily family focused. In 1849 Manuel Maria Herrera bought the Pantaleón farm and converted most of its cattle fields to sugar cane fields. In 1870 he built a mill on the property and started exporting sugar. In 1883 he passed away and his children took over. In 1973 they took on the name, Pantaleón. Three years later the company owned the largest mill in Central America and had become the leader of the Guatemalan sugar industry. Now the 165 year-old company, with new acquisitions
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and modern technology, Pantaleon is a leading producer in the Central American region. In addition to its two mills in Guatemala, the Pantaleón Group owns, co-owns, or administers mills in Nicaragua, Brazil, Honduras, and Mexico. The group produces an average of 1.2 million metric tonnes of sugar (refined, white, brown, and crude), 39% of which is sold locally and the rest shipped overseas. And it produces molasses, alcohol, and biofuels.
Pantaleón “We understand that the world faces significant challenges: climate change, water stewardship, supply of raw materials and food, combined with the growing need for more goods and services that will meet the demands of a growing population,” says Claudia Asensio, Head of Sustainability Following the company’s acquisition of the Panuco Mill in Mexico, management contracted with multinational consultants, WSP Group, to develop an environmental sustainability plan. The plan included genetic diversity of sugar cane, effective irrigation methods, and wastewater treatment at the mills. Implementation is ongoing and long term, but the company is already more resilient, is saving costs, and is reaching higher margin customers.
During the last several years Pantaleón focused on improving efficiency even more, acquiring international certifications like ISO90001 for quality control systems, ISO22000 for food safety management, and OHSAS 18001 for health & safety at whichever plant/s the certification best fits. All of these certifications require more efficient management of processes, most of which have been implemented as follows.
basis. It has implemented biological pest control in the fields and built greywater systems to irrigate crops. It grows its own wood for biofuel production (using fields that grow sugar cane poorly) and uses sugar cane leavings (bagasse) and wood chips to produce its own energy. Utilising the cogeneration process, Pantaleón’s two Guatemalan plants produce 99% of their own energy from bagasse and wood chips (2%), sending the surplus to Guatemala’s power grid.
In all of its mills, plants, and plantations Pantaleón works to operate sustainably on a consistent
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Pantaleón’s carbon output is low. Utilising the 2006 IPCC Guidelines for National Greenhouse Gas Inventories, Pantaleón calculated its emissions at less than 0.03 tonnes of CO2 equivalent per ton of cane crushed. The calculation includes the amount of energy consumed from each energy source the company uses (bagasse, wood chips, husk, coal, diesel and bunker oil) as well as direct and indirect N2O emissions from managed solids in wastewater.
An added benefit to producing its own energy was the realisation that
molasses could be used to produce ethanol for export.
The United States and the European Union have mandated use of biofuels as a component of vehicle fuel supplies, and they offer incentives to biofuels suppliers. Pantaleón built an ethanol plant and started exporting.
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Pantale贸n
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Other Pantaleón waste management programs include the installation of wet cyclical traps in their boilers to trap ash and soot particles, and organic fertiliser produced from cane waste and mud sediments. The company’s remaining waste products are sold for recycling or stored in safe containers. The company also ensures that its operations do not threaten critical habitat or endangered species. To alleviate its 1970’s labour problems, Pantaleón implemented a number of worker sustainability projects, giving workers better working conditions and compensation plans, and integrating them into the company’s decision making process. For permanent employees the company provides protective equipment and clothing, has built living quarters, medical and orthodontic clinics, healthcare programs, and offers a full scale education program on its premises, available to full time employees and their families.
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Pantale贸n
For seasonal harvesters the company provides temporary housing, food and water, paying special attention to the hydration needs of its workers (cutting cane is sweat-breaking work).
Pantale贸n has developed
health promotion programs
for all of its workers in all facilities. It also provides efficient transportation to and from the fields, educational programs, and
large recreational areas.
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THE SUSTAINABLE BUSINESS REVIEW An additional on-going objective of the company is to drive each employee towards the best safety standards. Pantaleón significantly reduced its accident severity rates by 52% and its accident frequency rates by 32% for the 2013/14 milling season compared to the 2012/2013 milling season. Pantaleón benefits the communities in which it operates as well. In 1993 it formed the Pantaleón Foundation (Fundación Pantaleón) financing it with a significant percentage per metric ton of sugar produced. The foundation sponsors programs in Guatemala, Nicaragua, Honduras and Mexico in the areas of health, education, community development, and the environment. Pantaleón is also involved with CentraRSE (Center for Socially Responsible Action) in Guatemala. CentraRSE is a private, non-political,
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and non-profit organisation that aims to change business attitudes and trigger implementation of socially responsible practices. In 2007, Pantaleón received an award from CentraRSE for its outstanding working conditions. Also in 2007 the Organisation of American States (OAS) awarded Pantaleón its Best Corporate Citizen of the Americas Award for the company’s project “Visionary Schools: Building Citizenship.”
Pantaleón
The project’s goal is to promote the values of democracy and tolerance in public schools. “We believe that the role of business in society has changed and that part of our long-term success is engaging with the different types of stakeholders,” stated Asensio. Accordingly,
in
2013
Pantaleón
developed
developing a proactive approach to seeking joint solutions with stakeholders. This year Pantaleón hired an outside consultant to help them do just that. There are several emerging issues the company could take on, if it chooses to: 1.Maintaining the company’s vision and values, especially socially responsible ones, as it continues to expand in the global market. It will be vital (and more difficult) for Pantaleón to continue acting ethically as it grows. 2.Pressure suppliers and customers to develop socially responsible practices, so Pantaleón’s values are reflected throughout the production and consumption chain.
a “Responsible Development Strategy” that requires identification of emerging issues important to the company’s success and important to its stakeholders. It aims to look for issues related to the company’s team and products, the community, and the environment,
3.Pressure local authorities to develop industry regulations that support local community development and healthy environmental practices. This could prevent agribusinesses from acquiring land needed by peasants to grow food - an increasing problem in Guatemala, where 50% of the nation’s children are chronically malnourished (New York Times, 01/06/13).
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J
AMAICA Public Service Company FUELLING JAMAICA’S FUTURE
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JAMAICA PUBLIC SERVICE The Jamaica Public Service Company Ltd. (JPS), has been Jamaica’s primary energy company for over 90 years. In that time, it has expanded from a modest energy network with just a few thousand customers, to one capable of serving the country’s roughly 2.8 million residents. With a current customer base of just over 650,000 accounts, the company is the sole distributor of electricity in Jamaica and has a generating capacity of about 620 Megawatts (MW), provided by a combination of steam, gas turbines, combined cycle, diesel, windfarm and hydroelectric technologies. The Company also purchases electricity from four Independent Power Producers (IPPs). Expanding and improving JPS’ generation, as well as its transmission and distribution capabilities, has not been without challenges. An island’s electricity system, such as that of Jamaica, is inherently more complicated than that of a mainland system of comparable size. Certainly one of the major considerations at this point is the focus on increasing fuel diversity and the proper integration of renewables.
At present, Jamaica ranks favourably among countries with high levels of renewable penetration - a testament to the investments that have been made by the Company and the Ministry of Energy over the years. One of those available renewable resources is wind - which constantly blows over Jamaica, sometimes affectionately referred to by residents as the ‘Undertaker Breeze’ and the ‘Doctor Breeze’. This wind resource will be among the key components necessary, to move Jamaica away from the market risk that comes with importing heavy fuel oil and diesel, towards a future of increased energy security. This is all part of the Caribbean Community’s (CARICOM) energy policy, which factors in energy security, mitigating the effects of ongoing climate volatility, as well as improving environmental standards across the board. Achieving increased fuel diversity involves continuing evolution of all the energy companies in Jamaica, and not least of them - JPS.
CEO Kelly Tomblin explains that one of the Company’s key priorities is to find a solution for every Jamaican “through expanding the options available to our customers. That requires an ability to integrate renewables in an effective way and to partner with diverse and innovative providers.” She further adds that “One of the facilitators of renewable integration is the procurement of gas”.
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Finding the right balance is a DELICATE ACT for
JPS.
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While their earlier projects depended on heavy fuel, they’re constantly seeking more environmentally-friendly alternatives, while looking to balance this with the economic imperative. So, for example, the country has a small but growing amount of distributionconnected solar. Present estimates indicate that they’ll have a total of about 110MW of
JAMAICA PUBLIC SERVICE renewables by 2016, with about 80MW of that currently under construction. And then there’s the heat-rate workhorse, which runs on distillate. As more renewable units are integrated into the system, however, it has become clear to management at JPS, that the Company alone cannot provide the full
capacity of electricity required, due to its intermittency rates. JPS will therefore introduce gas to its combined cycle plant at the Bogue Facility in Montego Bay, Jamaica. This particular project is driven by two motives: to enable the long
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JAMAICA PUBLIC SERVICE
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term reduction in the cost of electricity and pass those reductions on to JPS customers; but also to provide the flexibility that comes with gas, to the system, in order to integrate the 80MW of new renewable units. An IRP (Integrated Resource Plan) is to get underway soon. This IRP is looking at the dynamics of system stability with those intermittent resources and what the business will require to integrate them. What’s evident from looking at JPS is an ongoing effort on their part to improve on their energy resources and feed that back to its customers. In 2018, the company expects to have some additional gas plants operating, and the government is looking to pursue additional resources through a 37MW solicitation for renewables. When all of the planned resources come online in 2018, management will have a better overview of the dynamics and flexibility of the JPS system and where it stands in relation to the Jamaican Energy Policy, which is aiming The Sustainable Business Review - 1Quarter GEAD191-03_ImproveProtectSave_Quater Size_R2.indd
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THE SUSTAINABLE BUSINESS REVIEW for 20% renewables by 2030, but given the inroads that JPS is making in this evolution, some are speculating that the target could be reset to 30%. For example, in 2016 alone, the countrys’ renewable energy capacity is set to double. The evolution to renewables at JPS is already having an effect on the culture at the company: the oil-is-the-only-possibility mentality that once existed at energy firms, has been replaced with a philosophy which is more open to change. This is having an effect on the bottom line already: in 2014, profits at JPS were up to $23 from $9 million the previous year. This result was achieved through improvements in operations and is doubly impressive given the continuous slide of the Jamaican dollar against its US counterpart: the currency has experienced a slide of over 30% against the green back since 2011. Naturally, JPS cannot achieve all of this without a sophisticated support network of local and international partners. This network has been established over its 90 year history and it continues to be fostered. The list includes both local and international companies. Its local partners have been crucial to optimizing the company’s value chain in Jamaica. The scale of the JPS operation means that services such as haulage, professional services and chemical sales can all be outsourced to local companies, in turn contributing to stable employment on the island. There’s also a sizeable list of international partners on the JPS books, which not only provides the firm with access to economies of scale, but also exposure to the best equipment, know how and advances in the industry as
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they occur. Energy companies need to keep abreast of changes arguably more than companies of other industries. Its international partners provide it with gas turbines, pumps and controls, consulting services, as well as parts and maintenance. These partners include Quantex International Limited, GE International Parts, Corrosion Control Limited and Wood Group/Ethos Energy.
JPS has instilled a set of values in its 1,600 workforce and work practices using the acronym ASPIRE (Accountability, Service, Passion, Integrity, Respect and Excellence). One of its strategic objectives is to ‘attract, develop and retain the best talent in Jamaica.’ It has enhanced its employee engagement program and now records over 80% total satisfaction among its employees, a number which is on an upward trend. Likewise, the firm continues to invest substantially in communities across Jamaica in education, and youth development through the JPS Foundation. In 2013, the Foundation included an Early Childhood Nutritional Support Program which benefitted
JAMAICA PUBLIC SERVICE more than 26,000 children and opened a partnership with the United Way.
It’s encouraging to see that in the midst of such fast-paced change that attention to
CSR
Indeed, it is part of the change that continues to drive the firm forward. Satisfying customers continues to be the most important part of our business. Our commitment to Corporate Social Responsibility supports our customer, our community, and Jamaica. It is well established that the utility rises and falls with the fortunes of its market. We are committed to supporting Jamaica at all levels.
clearly hasn’t diminished at JPS.
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FerroAtlรกntica GROUP
A BEHEMOTH OF THE SILICON INDUSTRY
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FERROATLANTICA GROUP
T
he history of industrial conglomerates in Spain is a long one. Through a series of bolt-on mergers and acquisitions, many family firms became national and even international leaders. Looking through the constituent firms of some of these conglomerates can reveal gems.
FerroAtlántica, part of the Grupo Vila Mar industrial conglomerate, is one such firm. It has businesses in electrometallurgy, energy, mining and photovoltaic solar power.
The FerroAtlántica Group made major headlines earlier this year when it agreed to merge in an all-stock deal with Globe Speciality Metals to form a company worth
$3.1 billion.
The merger gives the FerroAtlántica Group a commanding market share of the market for silicon for solar panels. The combined company – still going by the name FerroAtlántica Group – a much larger combined footprint in Europe and North America. The merger is just the latest in a series of mergers for the FerroAtlántica Group, which was founded in 1992, itself the conglomeration of several smaller Spanish and international firms. The transaction means that the group now has operations in North America, Spain, Quarter 3 2015 - The Sustainable Business Review
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Corporate
Currently, the combined firm has 26 production facilities and five mining sites. Globally, it employs 4,700 people. Its current structure allows for joint CEO’s: Globe’s chief executive, Jeff Bradly and FerroAtlántica CEO Pedro Paguaga. The company seems well-placed to take advantage of the world’s growing demand for silicon-based products, which range from everything from lipstick, to computer hard-drives to car parts. The newly-formed FerroAtlántica Group will have pro-forma revenues of approximately €2.3 billion and EBITA of €330 million. Instead of being two large firms, they have now become a behemoth of the silicon industry.
Social
Responsibility
40
We can hope that one of the most valuable synergies that will come with the territory for the newlyexpanded FerroAtlántica Group is an increased focus across the group in corporate social responsibility. The CSR agenda hasn’t been visibly high on the Globe Speciality Metals list of priorities until now but there’s every
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indication that the merger will bring a welcome change in that direction. FerroAtlántica has established a comprehensive CSR program across its companies. This program includes constantly updated safety regulations, a code of ethics as well as a new set of CSR regulations in 2013.
FERROATLANTICA GROUP
F
erroAtlántica’s CSR program caters for its employees’ personal development and careers, their safety, health, training, equality and social integration. In 2013, the group provided just under 45,000 hours of training to 4,815 employees – a substantial investment which outlines the firm’s commitment to their development in the areas discussed. Tangible improvements can be seen in improvements for the group’s employees in social benefits, wage supplements for those with temporary disabilities and maternity leave,
life and accident insurance, regular health checks, flexible renumeration plans and others.
FerroAtlántica’s
areas of operation also demand that it pays particular attention to
the environment.
It continues to make investments in this area, achieving ISO 9001, ISO 14001 and OSHAS 188801 for the quality systems implemented by the group. In addition, it provides funds to Quarter 3 2015 - The Sustainable Business Review
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THE SUSTAINABLE BUSINESS REVIEW several worthy social projects and activities, which totalled €700k in 2013. Among the beneficiaries were the Prodis Foundation in Spain for the mentally-handicapped, various schools in South Africa and the Guyana and San Félix regions of Venezuela, where the firm undertook a social integration program in conjunction with FundaBancoex (a Venezuelan charitable foundation).
ACleaner
future
Although it faces intense competition from cheaper plastics and even a depressed market for world steel, the FerroAtlántica Group stands to gain from the seemingly insatiable demand among technology products for silicon. In such an environment, being the producer of the market’s purest silicon will do it no harm. Group chairman Juan-Miguel Villar Mir points out that the group has proprietary technology in place to manufacture cheaper and cleaner photovoltaic silicon metal. Called FerroSolar, this technology allows it to produce enough silicon while dramatically reducing the cost, energy consumption and environmental impact of the production, which has traditionally been an expensive chemical process that yielded small quantities. Nevertheless, faced with an adverse economic situation in the industry and electrometallurgy in particular, a fall in global demand, the
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FERROATLANTICA GROUP pressure of competition or the high cost of electricity, FerroAtlántica Group has done its homework, says Pedro Larrea. “We have diversified our production, we have invested in our own technology and we continue to invest in international expansion whilst maintaining a 100 percent Spanish identity. We are confident we can continue along our path of growth, diversification and development, we aim to consolidate our global leadership position and continue improving the service we provide to our customers. We are also committed to the professional and personal development of all our employees – and with the rooting of our activities in the social, economic and
industrial environment in which they work.” This ensures that the company’s sustainability in the electrometallurgical industry – hitherto highly energy intensive, often environmentally unfriendly and dependent on high energy prices. FerroAtlántica has significantly diversified its production to shield itself to the headwinds of low energy prices and innovated extremely well in an industry not renowned for innovation. It has set itself up well to achieve its goal of producing silicon which generates more energy than the amount of energy required to produce it in the first place.
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Sustainable Operations Paves the Way for
Aquabla Expansion
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AQUABLANCA
s
anca’s While the Spanish populace fumes over toxic spills by local mining companies, Aquablanca moves its plans forward unscathed. Sustainable mining practices help keep it that way.
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THE SUSTAINABLE BUSINESS REVIEW it transitions from open pit to underground mining. The company expects the new underground mine to be productive at least until 2018, while it explores a 1,864 sq. km. (720 sq. mi.) area north and west of the current mine (in the Ossa Morena Zone) for which it has acquired mineral exploration rights. The mine currently sells all of its metals to one paying customer - mainly nickel and copper, but also small amounts of platinum, palladium, cobalt, and gold.
In the wake of the massive 1998 tailings dam spill by copper mining giant Grupo Mexico near Seville, Spain (and the mine’s subsequent shutdown), Lundin Mining’s Aguablanca copper mine continues to operate peacefully nearby. Located just 80 kilometres (50 miles) north of Seville, this open pit nickel/ copper mine is digging deeper this year to start mining underground. This, while Grupo Mexico struggles to reopen its Seville mine, as it recovers from yet another spill in the Sonora region, and conservationists and the local populace fume. The Aguablanca mine is one of eight mines (five open, three closed) that Lundin Mining owns. The company acquired Aquablanca when it purchased Rio Narcea Gold Mines Ltd. in July, 2007. Aquablanca is an open pit, drill and blast, truck and shovel type of operation that produces mainly nickel and copper. In 2014 the mine yielded 8,631 tonnes of nickel and 7,390 tonnes of copper. Estimates for 2015 production are 7,000-7,500 tonnes of nickel and 5,500-6,000 tonnes of copper, as
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The most publicly noticeable impact a mine has on its environment is what it does with waste rock and toxic tailings - semi-liquid leftovers from chemical treatment of ore. When mining
companies get into trouble with the public, it’s usually because these waste waters have leaked and poisoned the local water supply, as happened with Grupo Mexico.
AQUABLANCA
CORPORATE REPUTATION AND
SUSTAINABILITY Sustainability is one of the core values of Lundin Mining, which may be why it has not been targeted by local activists. The company’s reputation as a good corporate citizen is important to its success, so it maintains a corporate responsibility webpage, conducts periodic environmental assessments, and regularly tracks progress on environmental projects via its annual Sustainability Report. To prevent the kind of leakage Grupo Mexico experienced, Aquablanca transports its wet
tailings to a dam near the mining site - a common practice. However, the mine’s workers took extra care to make sure the dam was well dug, well lined (using a HDPE liner), and the walls were stable. Workers surrounded the dam with waste rock, strategically piled high for stability,
and planted it with native flora. The company inspects the dam monthly for stability and has an independent party inspect it quarterly. It also has an emergency plan, in case the dam fails in spite of these precautions. To minimise water use and maximise water recycling, Aguablanca follows several conservation practices. It collects rainwater in the industrial area, pit area, and tailings dam (which has a 20 million tonne capacity) and cleans it up for use. And it recycles the water it uses in the mining process - over 87% in 2013. Between rainwater capture and water recycling, most of the company’s water needs are met. Any additional water needed comes from the local Aguablanca Stream
or from groundwater. In 2014 Aguablanca was the only Lundin mine that achieved zero water discharge. Aguablanca also checks energy use and greenhouse gas emissions, another essential of mining. It has developed medium and long
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AQUABLANCA
TO MINIMISE WATER USE AND MAXIMISE WATER RECYCLING,
Aguablanca
follows several conservation practices. It collects rainwater in the industrial area, pit area, and tailings dam (which has a 20 million tonne capacity) and cleans it up for use.
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THE SUSTAINABLE BUSINESS REVIEW term projects that reduce the use of electricity and diesel, while increasing efficiency. Currently all energy comes from fossil fuels products, which the company anticipates will be further reduced with closure of the open pit mine this year.
native species of plants. During its periodic inspections, Lundin Mining discovered that three critically endangered species of wildlife and eight endangered species were living on three of their sites, including Aguablanca.
To the land itself, the company also has an ongoing commitment. It studies the local biodiversity and attempts to minimise its impacts during the process of mining.
CORPORATE RESPONSIBILITY
Whenever it closes a mine the company restores the environment as soon as it can, making its plans with biodiversity objectives in mind. It also supports local organisations and stakeholders with carrying out biodiversity initiatives related to the mine. Currently Aguablanca is experimenting with how to reproduce local flora species. In 2014, the mine contoured, covered and re-vegetated 26 hectares of waste rock stockpiles with
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GOALS
Lundin Mining has three main corporate goals, according to its website, backed by a Responsible Mining Framework and a Responsible Mining Policy. It’s goals are: 1. Developing a high performance, motivated culture. 2. Achieving a safe, productive, healthy work environment.
AQUABLANCA 3. Conducting business ethically and transparently. The Framework and Policy documents outline the action components, especially towards sustainability. They cover relationships with the environment, the social network, health and safety, corporate government, and support of stakeholders. In the workplace, the company emphasises health and safety, while treating all of its 169 full time-equivalent employees with respect and fairness, including freedom from discrimination. This is true of all of its mines, not just those in countries that already have fair treatment legislation. Its operations are fully compatible with ISO and OHSAS 18001 requirements. Every mine tests its employees regularly for exposure to hazardous substances. In 2014 Aguablanca established on-site emergency response and mine rescue team capabilities, and set up desktop drills and field emergency response exercises. To help the community, Lundin Mining has a nonprofit foundation that supports basic energy infrastructure and agricultural development in rural areas. It especially contributes support to small businesses developing innovative energy supply products for rural communities. It also donates to Unicef’s “Zinc Saves Kids” program to increase the health of undernourished children. And it purchases many of its supplies locally ($US77,525),
The community has had three ongoing complaints so far, which Aguablanca is addressing: Vibrations from blasting, employment opportunities, and the company’s approach to long-term mine closure. In 2014 the company looked more closely at its approach to landscape rehabilitation and updated its mine closure plan. Management also continues to work with local administrators to monitor and reduce the blasting noise. As for employment opportunities, that will change as the mine switches from surface to underground mining, but may not necessarily improve until exploration results in additional mining projects. Meanwhile, the company is staying out of trouble and is redoing its website in 2015 to make it easier for locals to register whatever additional grievances might come up. As Lundin Mining’s President and CEO says, “To us, sustainability is about achieving a safe, productive and healthy work environment;
exhibiting sensitivity towards the communities and natural environments in which we operate; upholding the values of human rights; and fostering the creation of sustainable economic value for employees, business partners and host communities.” Quarter 3 2015 - The Sustainable Business Review
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Trinidad wasa
support
UNITED NATIONS WATER MANDAT Trinidad & Tobago is the third largest economy in the Americas. With its Water & Sewerage Authority, created in 1965, the country is catching up on providing water supplies for the entire population, rich and poor.
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d’s
WATER AND SEWERAGE AUTHORITY OF TRINIDAD AND TOBAGO
In the land of the steel drum lives a population of 1,224,000 people that need water and sewer services, just like everyone else in the world, even as they celebrate carnival in the streets. Yes, the country of Trinidad and Tobago (TT) was the first to develop and play the steel drum, and it pioneered the limbo (dance), soca and calypso (musical styles) as well. Its old time sugarcane fields and the oil fields that replaced them needed water, and so do the natural gas facilities that replaced those.
rts
ATE Trinidad is a small island in the West Indies just north of Venezuela, and just south of Barbados and Grenada. With its sister island of Tobago, it occupies the bottom of a chain of islands from Florida down to Venezuela, called the Caribbean Archipelago. West of the chain is the Caribbean Ocean, within which lie Jamaica and Cuba. In addition to being the birthplace of calypsostyle carnival (as practised in Miami, New York and London), TT is considered the third richest country per capita in the Americas and one of the top 40 in the world. Tiny as it is, it hosts major fossil fuels production facilities for export which, combined with tourism, dominate the economy. While domestic demand in TT is expected to double within the next 25 years, industrial demand is expected to triple.
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TT is a signator to the United Nations’ Millenium Development Goals, which targets the reduction of poverty worldwide. Goal number seven reads, in part, “to halve by 2015, the proportion of people without sustainable access to safe water and basic sanitation.” This is the goal of the country’s Water and Sewerage Authority (WASA), created in 1965. The country’s dams and water cleansing facilities, along with miles of water and sewer pipelines provide water that keep the singing and dancing going, and all of them are managed by WASA.
Water
& Sewer Services The Water and Sewerage Authority is an amalgam of several pre-existing water agencies that operated primarily for the benefit of the agriculture and petrochemical industries. The 1965 act that created it set up WASA as a corporate entity with government oversight, focused on a customer-centred business model. One of its mandates - “water security for every sector” - and one of its goals - “the best performing utility in this hemisphere” - ensure that the agency operates sustainably.
Immediately upon its creation WASA undertook responsibility for all existing infrastructure, from the first underground sewer system built in 1861 (Port o’ Spain) and the first dam built in 1936 (Hollis Reservoir) to its most recent pipeline projects enabling over 45,000 people to access water on a 24/7 basis for the first time. September, 2015 marks the 50th year of WASA’s existence.
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WATER AND SEWERAGE AUTHORITY OF TRINIDAD AND TOBAGO
Water Availability vs.
Climate Change Even though TT is located in the tropics it, too, has seen changes in weather patterns. Over 58% of the country’s potable water supply comes from surface water and the relatively dry weather last year, extending well into the normal rainy season, resulted in a 50% loss of water supply in several locations. In addition to setting up desalination plants, WASA had to adjust the schedules of water treatment plants to compensate for the decreased water supply. Plans are now afoot to tap into groundwater sources to cover for the dry spells. According to agency CEO, Gerard York, “The weather phenomena, for which we have no control, points to the importance of having water redundancy in our water delivery systems.”
In addition to providing daily access to fresh water supplies for the majority of its population, the agency committed to upgrading the country’s wastewater system. With recent funding from the International Development Bank the agency will facilitate construction of new wastewater treatment plants and associated collection systems in three currently under-served regions: San Fernando, Malabar, and Maloney catchments. The projects increase treatment coverage from 39% to 45% nationwide and will help safeguard the health of the public and the environment.
Further reducing supply, the government noticed over time that the nation’s waters were being seriously polluted - mainly from improper sewage treatment, oil pollution, domestic effluent, agricultural runoff, quarrying, and other industrial effluents. More than 64% of the sites sampled across the country indicated poor quality water health. This, combined with siltation from extensive deforestation, increased the cost of potable water production, threatening its sustainability.
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WATER AND SEWERAGE AUTHORITY OF TRINIDAD AND TOBAGO
Adopt-A-River
Programme
To combat the pollution WASA created an Adopt-A-River program in July, 2013. The program is charged with developing guidelines for the protection, preservation, and management of the country’s rivers and watersheds. According to its website, it aims to “bring awareness to local water pollution issues, and to facilitate the participation of stakeholders towards reducing many of the challenges negatively impacting the country’s watershed and water resources.” The program coordinates the efforts of existing community and industrial projects to clean up the nation’s waters and protect its 69 watersheds from further contamination. Coordination of efforts reduces redundancy and creates more effective action, and the protection of watersheds helps reduce the expense of making water potable. Both increase sustainability.
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36-52 Chan Ramlal Street, Chaguanas, Trinidad W.I. (500449) Website: www.drampersad.com Phone No.: 868-671-7267 Fax No.: 868-665-3593 (E-mail: engineering@drampersad.com)
BS EN ISO 9001:2008
General Services/Products include:
Servicing of General Rotating Equipment. Machine Shop / Water Jet / HVOF Coatings. Valve Refurbishment. Fabrication (Structural/Piping). Field Services/Turnarounds. Construction/Contract Services. WTP / WWTP Upgrades / Refurbishments Leak Detection. Distributors for numerous international pumps, blowers & valve manufacturers. Cathodic Protection / Corrosion Management.
D. RAMPERSAD has over 20 years’ experience in providing a diverse range of specialized products and services to all the major industries situated within the Caribbean. Supported by a modern, well equipped service centre, highly competent resources, proven KPI driven processes and strategic OEM partnerships with reputable international companies, we consistently deliver safe, on-time and quality services.
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WATER AND SEWERAGE AUTHORITY OF TRINIDAD AND TOBAGO
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ANSA TECHNOLOGIES LIMITED is the largest supplier of Pipes, Valves and Fittings in Trinidad and serves both the local and regional markets. We stock a large inventory of items and our capabilities include the supply of Pipes in all sizes and schedules, Valves (Gate, Check, Butterfly or Air Valves), Curb Boxes, Curb Valves, Ford Meter Boxes and Viking Johnson and Maxifit Couplings. We have supported the Water and Sewerage Authority (WASA) and remain fully committed to partner and work closely on all their upcoming developmental programs.
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WATER AND SEWERAGE AUTHORITY OF TRINIDAD AND TOBAGO
Sustainable Operations
WASA was established to provide the country with coordinated water and sewerage services, while functioning as efficiently and sustainably as possible. One of its mission statements is “to sustain a commercialised business while remaining sensitive to our stakeholders and the environment.” In acting out its mission statement towards sustainable operations, the agency set up an internal audit function that keeps an eye on its performance. These auditors review current business practices and provide information that help mitigate the agency’s organizational risks, e.g. strategies, operations, finances, compliance, and reputation. The auditing committee has direct access to the board and through them to every aspect of the business. It checks on operational ethics to make sure nothing is done for personal gain, reviews business processes to ensure the achievement of goals, monitors compliance with laws, regulations, and contracts, assures that legal safeguards are in place, and investigates fraud. This internal monitoring system ensures that WASA operates with full integrity and efficiency in the process of developing sustainable water supplies for the country. With the country’s projected increase in tourism, along with the expected doubling of domestic demand and the tripling of industrial demand, WASA should be able to weather the effects of climate change and still provide adequate water supplies for its people.
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S
OMANTEL Proves That
USTAINABIL Aids PRODUCTIVITY
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LITY
OMAN TELECOMMUNICATIONS
“Together, we build a totally connected community through innovation.” This is the vision of the Middle East’s leading Internet provider, Oman Telecommunications (Omantel). It emphasises the company’s intentions to provide reliable, fast, and comprehensive Internet connections in Oman, to connect Middle Eastern countries into a network, and to link the Middle East with the rest of the world, using innovative methods to do so. Sustainability is a priority in the company’s operating strategy, and they also promote it for the rest of the nation.
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Oman, located southeast of Sau Arabian Sea, has a reputation fo
It’s the favoured country in the Middle East in which to hold sensitive peace ta Iran. It was the first stop in the inaugural flight of the first solar-powered plane There’s a certain kind of trust accompanying neutrality that makes Oman uniquely services to a majority of Middle Eastern nations and the Western world.
In 2013 Omantel, which is 70% government-owned, provided 61.6% of Oman’s 58.5% for mobile networking, and 85.8% for fixed lines and Internet access. RO1.3 million (US$3.38 million) in sponsorships to help strengthen its commu marketing, good equipment, and fair treatment of employees, Omantel has b impact to a leadership level.
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udi Arabia on the or neutrality.
alks and negotiations, especially with e to fly around the world without fuel. y able to provide telecommunications
market for fixed broadband services, . That year the company gave away unities. With a combination of good built its market share and community
OMAN TELECOMMUNICATIONS
Contrary to many corporations in this “modern” world, Omantel’s main focus is on serving its customers - combining a great communication network with great services and innovation believing that a top level communication network helps local, regional, and international clients of all types to streamline and enhance their operations. Through this means, Omantel has the potential to: • Enable Omani citizens to access online news, services, social media, education, and employment opportunities. • Increase the effectiveness of Oman’s government & legal systems, medical & emergency procedures, and local trade negotiations & deliveries. • Enhance regional trade, help neighbouring countries get online, and strengthen the identity of a cohesive Middle East. • Connect internationally, facilitating the exchange of medical/ emergency information, improving logistics of international trade, and speeding access to news worldwide. Better planning, enhanced by more efficient communication methods at all levels, leads to less confusion and better project coordination. Public access to media worldwide leads to more accountable media reporting. More open communication between governments and the people they serve leads eventually to greater domestic and international peace. Omantel is well aware of the potential effects of its operations and that, through good communication, it is helping to “unlock the full economic potential of the country,” according to its Sustainability Report. It is also well aware of its responsibility to act sustainably for the continuance of its services for future generations. In developing and carrying out its sustainability plans, the company has discovered how much those actions have enhanced its own productivity.
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OMAN TELECOMMUNICATIONS
Here are some of the SUSTAINABILITY measures Omantel has or is carrying out: • Keeping expenses under control. Omantel has earned Moody’s A3 rating. • Caring about the well-being of its more than 2,700 employees (90% Omani, 22% female): Paying good wages & benefits, educating their families, providing high quality on the job training, distributing work loads efficiently, providing good equipment and services that help employees focus (gym, child care), and finding ways to prevent illness and accidents. • Designing facilities that have natural lighting, clean air and water, walking spaces, greenery, onsite exercise facilities and child care. • Making the company’s operations transparent to the public. • Supporting the government of Oman in training and providing Internet access to more than 70,000 low income beneficiaries through their ITA PC initiative for low income groups.
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To make sure its customers are being served well, the company conducts several types of customer satisfaction surveys: Quarterly third-party surveys, mystery shopping and caller surveys and, starting in 2013, an online customer satisfaction survey. The company’s customer experience management team also conducts internal surveys throughout the year on key aspects of service. The company also exchanges information with customers via social media outlets. The results have shown a far higher rate of customer satisfaction than what their competitors have.
Omantel has committed to building 100 kiosks for non-commercial access of 150 villages to make sure that villages are not left out of the digital age. They have over 270 villages already connected to the Internet so far. By expanding its reach, Omantel is providing employment opportunities for some of the 24% of Omani workers unemployed (Al Jazeera, 08/17/2013). It’s also subtly counteracting worries that might be emerging with Oman’s recent weapons build-up. A high priority with Omantel is providing a reliable network. Accordingly, the company tested its network in 2013 to make sure it could survive natural disasters - a time when communication lines especially need to be open. Its workers improved critical stations that couldn’t hold up, including installing backup systems where needed, and the company made sure its emergency response team could be deployed efficiently. Separate from development of its telecommunications network and its internal sustainable operations, Omantel has a three-pronged community social responsibility program. This includes investing in community initiatives and programs that provide opportunities for sustainable incomes and jobs, raising public awareness about healthy lifestyles and environmental issues, and helping more people to enjoy the benefits of a digital society. Omantel also supports community by sourcing 87% of its purchases from local suppliers. This includes multinational vendors who have registered their businesses in Oman.
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Omantel staff are motivated by kno increases the well-being of Omani soc take part in community projects. In 2 of food, money, clothing, and other families, charities, and orphanages d campaign. They coached business University to help them develop innov and they helped lead Outward Bound
In addition, the company sponsored a programs for students, women, and u also with disabled people and child company spent RO1.3 million (US programs in 2013, according to that y
Compared to other industries, Oma negligible. Even so, the company is ev developing a plan to become as environ Most of its network is supported by company recently started installing so kiosks are solar-powered. It’s new o extensive natural lighting and meets G
Probably the biggest impact Omant environment is in the overall effect of The telecommunications network, subscribers of all sizes to lower th paper use (saving trees) by conducti and replacing vehicular travel (and th conferencing and email communica benefits of telecommunications, has a Oman and, by extension, the Middle
OMAN TELECOMMUNICATIONS
owing that the company’s work ciety and they are encouraged to 2013 they handed out donations r necessities to underprivileged during the company’s Ramadan students at the Sultan Qaboos vative ideas for new businesses, d activities for youth.
a variety of community leadership underprivileged families, working dren with dyslexia. All told, the S$3.37 million) on community year’s sustainability report.
antel’s environmental impact is valuating its carbon footprint and nmentally sustainable as possible. gas-powered electricity, but the olar panels and all of its outlying office headquarters incorporates Gold LEED standards.
tel has on supporting a healthy its telecommunications services. itself, helps Middle Eastern heir carbon footprint - reducing ing transactions via the Internet, he fuel it uses) with online video ations. This, plus the economic already made Omantel a leader in East.
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SHANTA GOLD
GOLD MINER
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- IN A GOLD-LADEN
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SHANTA GOLD
In Tanzania, the country of the origin of man, gold and other precious metals abound. Although the country is still relatively unexplored, it already produces nearly as much gold as Ghana and South Africa, the two largest gold producing countries in Africa. Germans built the first gold mine near Lake Victoria in 1909. Nearly one hundred years later Canada, the United Kingdom, Australia, and South Africa all have well-developed gold mines in Tanzania, and commercial banks in Tanzania buy the country’s gold at world prices.
Central banks all over the world are grabbing gold like it’s going out of style and this year the price rebounded to a historic rate of $1400 per ounce. This is good news for companies like Shanta Gold, which had to struggle hard through its first formative years when prices were low.
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Shanta Gold Ltd. was started in 2005 when a British investor took over a locally run gold mining company and renamed it. Primarily an exploration and development company, Shanta Gold has four main projects and 40 prospecting licenses in different parts of the country, covering a total area of nearly 1,400 square kilometres (540 miles). It has already become one of Tanzania’s most noteworthy mining companies and a boon to its local communities. Already actively mining its Luika Gold Mine in the Lupa Goldfields District of south western Tanzania, Shanta Gold plans to start working the Singida mining project in central Tanzania in the near future. In addition, the company applied for three more mining licenses this year.
SHANTA’S LUIKA PROJECT HAS BEEN VALUED AT OVER $150 MILLION. To process its gold, the company purchased a new refining plant with a 90% heat recovery rate that increased the gold processed by two percentage points. In 2014 the company produced just over 84,000 ounces of gold at all-in sustain costs of less than US$1,000. This was all fuelled by a combination of heavy oil and diesel. 72
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SHANTA GOLD
Dr. Toby Bradbury, Shanta Gold’s new CEO, stated in the company’s March 2015 production update that, “The focus remains on growing the business by capitalising on the upside potential of our exploration opportunities at New Luika as well as at Singida.” Hopefully there will be some focus left over for sustainability activities.
Although financial markets see the use of renewable energy as a sign that mining companies are more flexible and forward-looking, most mining companies still have not embraced renewables to relieve their problems with transporting electricity. Shanta Gold, a possible exception, is currently experimenting with a small solar project.
MINING COMPANIES, LOCATED MOSTLY IN REMOTE AREAS, are perfect candidates for renewable energy projects.
Shanta Gold is also helping to build Tanzanian infrastructure - mainly with water. The Luika mining area is surrounded by forest, with around 10,000 Tanzanians living within 15 square kilometres (nearly 6 miles) of the mine. The company plans to construct a big dam for the mine and is working with local NGOs to extend the dam into waterways that feed local communities. It has also built boreholes in neighbouring villages to provide water.
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SHANTA GOLD While establishing itself as a leading gold mining company in Tanzania, Shanta Gold set up a strong CSR program, as soon as higher prices started bringing relief. The water project is a part of it. The program also includes training and employing local residents. Over 90% of the organisation’s employees and the employees of all major contractors are Tanzanian nationals. At least half are permanent residents of local villages.
To further ensure the health of its employees, the company uses non-toxic cleaning materials in all of its facilities and restricts the use of hazardous chemicals. The company collects and recycles
For its local employees the company has developed a strong training and consultation program that increases their level of skill and safety awareness. It aims to hold each employee responsible, not just for their own safety, but for the safety of others. Employees have health insurance and are given annual health examinations, and the Luika Gold Mine has a health clinic that is run by an internationally trained local physician.
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THE SUSTAINABLE BUSINESS REVIEW hazardous wastes and services its chemical toilets regularly. It purchases equipment with low emissions and less noise. Since the inception of the company, there have been no deaths, disabilities, or serious injuries recorded.
Shanta Gold imports specialists from other countries to train local people in a variety of skills, including how to start their own businesses with money earned from working in the mines. In choosing what projects to implement, Shanta Gold
Shanta Gold also recognises the need for a certain level of education prior to hiring, so has revamped or built new classrooms in local schools and, in some locations, new schools themselves. They just built a new science lab in the local senior school, for example. Construction includes pit latrines to help students stay healthy.
listened carefully to villager preferences and looked at national policy. The four or five programs they developed were all pre-approved by the villagers.
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SHANTA GOLD There are many different aspects of sustainability that a company could focus on. Financial sustainability is one area, which Shanta Gold successfully tackled from the beginning and continues to address with its new solar pilot project. The health and welfare of its employees is another, which Shanta Gold paid attention to from the beginning, and which also affects the financial bottom line. And the well being of surrounding communities is a third. This Shanta Gold had to wait on until the purchase price of gold rose enough to afford the finances to take it on, but the intent was there and the company took action as soon as it could. The fourth sustainability arm is how a company deals with the environment. Shanta Gold’s website states that it has set up an “Environmental Management Program to ensure the company operates in line with local legislation and internationally recognised standards.” It purchases fresh food and meats from local villages to avoid importing, and strives to minimise the company’s waste stream. The company routinely monitors water, air, and soil quality around its mines, and has developed mine closure procedures that include reforestation, including establishing a small tree nursery onsite. Shanta Gold aims to comply with local environmental regulations, while exceeding the standards of the gold mining industry. It has already developed a reputation in Tanzania for its financial and occupational acumen, and it appears that the company’s sustainability activities are quickly following suit.
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JORGE CHAVEZ INTER Jorge Chavez International Airport keeps earning
SKYTRAX'S
"BEST AIRPORT OF SOUTH AMERICA" AWARD FOR A REASON. That reason is related to sustainable development.
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Is Fly
Forw
JORGE CHAVEZ INTERNATIONAL AIRPORT
RNATIONAL AIRPORT-
lying
ward
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Following
THE INITIAL STAGE OF PLANNING AND PREPARATION, THE EXPANSION OF JORGE CHAVEZ INTERNATIONAL AIRPORT, ALSO KNOWN AS THE LIMA INTERNATIONAL AIRPORT, COVERS THREE STAGES. In the first stage, 2001-2005, the airport expanded its passenger terminal, installed seven passenger loading bridges, constructed new domestic
and international concourses and a new commercial area, built a new cargo building, added an electric substation with a 12 megavolt output, installed four water cisterns for
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JORGE CHAVEZ INTERNATIONAL AIRPORT
a total capacity of 2,500 cubic meters of water, and built new and expanded offices for government entities in the airport. During the second stage, inaugurated in 2009, the LAP expanded all three of the airport’s concourses and the south platform, adding new departure lounges, passenger bridges, immigration areas, and commercial outlets and franchises. They reinforced the terminal’s earthquake resistance and improved traffic flow in the cargo aircraft taxi area. All of these changes increased the capacity and efficiency of airport operations, another sustainability principle.
THE AIRPORT
IS NOW AT ITS THIRD STAGE OF EXPANSION. With other Latin American airports growing fast to accommodate the region’s growth of the mining and energy industries, Jorge Chavez International Airport can expect increased competition. The Peruvian government has promised 7,000,000 square metres (2.7 square miles) of land to the airport and LAP
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THE SUSTAINABLE BUSINESS REVIEW is developing conceptual designs for its use. LAP plans to develop a new terminal, runway, and parking lots, supported by new airport and travel-related operations like hotels, restaurants, parking lots, and a convention centre. As with the last two stages, this one is expected to create many more jobs for Peruvians. Throughout the airport’s expansion and planning, LAP has kept its focus on sustainability. In the transportation sector, this means a focus on security and safety, the reduction of costs, and responsibility for the environment, according to Latin America’s President of IATA.
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In 2014 the company redefined its vision, mission statement, and business principles. They added social and environmental responsibilities as priorities next to service quality, security, innovative efficiency, and financial sustainability, all core principles of LAP’s business. They used these principles to prepare an action plan for 2015/16. In 2014 also, LAP calculated and certified its carbon footprint for the first time, utilising an independent entity, in accordance with ISO 14064-1. This made LAP one of the first certified airport operators in South America. They formed an interdisciplinary team called
JORGE CHAVEZ INTERNATIONAL AIRPORT “ECOMISION” to identify and implement measures to reduce LAP’s footprint in the upcoming years. So far the airport’s growth has resulted in a doubling of staff. Although the operations manager and a few other development managers are supplied by Fraport, most of the airport’s staff are Peruvian. LAP is constantly improving their training and creating a good environment for them to work. This includes identification of hazard risks in the workplace to reduce accident rates. Participation in company health safety training sessions is mandatory for all employees.
One of the major challenges for the airport has to do with space vs. crowding. Cities grow faster than airports, hence there needs to be coordination between the growth of cities and airports, if cities are not to inadvertently reduce the capacity of the airport. The government also needs to be involved for optimal growth of both, if sustainable development is to be maintained, and the airport is to continue receiving its awards of excellence.
The airport’s vendors and suppliers are mostly Peruvian also. As the airport grows, so do they. “We are very picky in selecting our concessions providers,” Mr. Salmón noted. LAP has already audited 63 companies based at the airport for compliance with statutory regulations. Because the company aims to provide quality services, technical capability, safety, and security to passengers, it insists that all providers operate using the same standards as LAP.
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N
o new program is perfect from the first. There’s always a warmup period where procedures are tried and changed, contractors tested, and the depth of the problem tackled is gradually discovered. Usually, once enough information has been gathered, the program requires reorganisation and a kind of “starting over.” That time for the Housing Agency of Jamaica (HAJ) was fiscal year 2013-14. The HAJ is a government department within Jamaica’s Ministry of Transport, Works & Housing. It’s headquarters are located in Kingston, and it has two other branches in Montego Bay and Savanna-la-Mar. The program exists to provide property development and housing construction for low and lower middle income earners - to relieve the immense problems Jamaica’s “squatter” or “informal settler” communities are having with poverty, drugs, and violence - to give settlers a chance at home ownership for the first time in their lives.
THE HOUSING
Jama
Agency of
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HOUSING AGENCY OF JAMAICA
Jamaica is not the only Caribbean country experiencing squatter problems. Nearly all former and current British territories in the Caribbean have had them. As a pattern, expatriates purchase the best rural lands to live on (or build tourist attractions), while locals move into the cities where the work is, and built houses out of scrounged materials on unused urban land. Some live under bridges or on private beaches owned by others. Seldom do workers have land of their own. In Jamaica 35% of the citizens currently live at the poverty level. Of those, 56% are employed at some kind of job. 49% of the poor are children, which means some of them are working too. While most of Jamaica’s existing infrastructure was developed to accommodate tourism, it has provided access to reasonably clean drinking water for 98% of the population and sanitation facilities for 99%. On the other hand, only 24% of the population has electricity.
aica
Jamaica is not the only Caribbean country experiencing squatter problems. Nearly all former and current British territories in the Caribbean have had them. As a pattern, expatriates purchase the best rural lands to live on (or build tourist attractions), while locals move into the cities where the work is, and built houses out of scrounged materials on unused urban land. Some live under bridges or on private beaches owned by others. Seldom do workers have land of their own.
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In Jamaica
35%
of the citizens currently live at the
poverty level.
Of those, 56% are employed at some kind of job. 49% of the poor are children, which means some of them are working too. While most of Jamaica’s existing infrastructure was developed to accommodate tourism, it has provided access to reasonably clean drinking water for 98% of the population and sanitation facilities for 99%. On the other hand, only 24% of the population has electricity. According to the publication “Housing & Urban Management in the Caribbean,” published by the University of the West Indies in Trinidad, a dysfunctional land allocation system is mainly to blame. Jamaica has attempted to counteract that problem by developing a land titling program that reallocates government-owned land, giving titles and ownership to those informal settlers currently living on the land. If the land is not viable for healthy housing, the settlers are moved to other public lands and given title to land there.
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MAKING IT WORK The Housing Agency of Jamaica was established in 1998 by merging three housing corporations into one agency. Formerly called the National Housing Development Corporation, it changed its name in 2008 to the Housing Agency of Jamaica. The year 2013 proved to be an exceptionally challenging one for HAJ, in both positive and negative ways. Under its “Operation Pride” program, the agency registered 1,500 land titles for 45 communities in 11 parishes island-wide, and it resettled residents from two additional settlements to locations of future development. It also struggled with lenders reluctant to provide low-cost loans, low income earners who could not afford mortgages, unreliable construction companies, and suspected “leakages” that added to the financial drain. The cost of the program was negatively affecting the rest of the economy. Unfortunately, because of the nature of the work, the daily life of HAJ employees had become pretty depressing, further affecting the department’s overall efficiency and relationships with the public. This all came to a head during the 2013-14 fiscal year and caused a crisis that the agency faced head-on in 2014.
DEPARTMENT
REORGANISATION In 2014 the Cabinet reorganised HAJ’s eight member Board of Directors - three men and two
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women meeting at least once a month. After fielding internal and external complaints about housing program progress, the HAJ called in an outside consultant to help reorganise and revitalise the program. They set up an internal evaluation committee and started holding focus groups out in the communities, which resulted in a new mission statement and business strategy, public relations plans, and realistic annual goals.
HOUSING AGENCY OF JAMAICA that, “We must and will step up to the greater demands and expectations of the Jamaican people.” HAJ regularly experiences environmental setbacks, as well as misunderstandings by potential homeowners about what the program entails. This year there were repeated floods in the Hills of the Boscobel development area, where half the homes were inhabited, while the other half were still being built. The floods created problems with infrastructure that needed to be addressed. In addition, many potential homeowners misunderstand the program, thinking that these are giveaway homes that need no commitment from them. HAJ seeks to better inform the public on what their own commitments to homeownership must be, including mortgage repayments tof however much the homeowner can afford. There is a remaining issue to be addressed - that of the lowest income people without jobs, who cannot afford to buy anything. In the words of Housing Minister, Dr. Omar Davies, “If we don’t seek to address the housing needs of those at the bottom of the HAJ determined that the department’s focus for the 2014-15 fiscal year would be on financial sustainability and the completion of outstanding projects. Those projects resulted in the issuance of 3,000 new titles. Now they’re training staff to increase customer service skills and morale via monthly team-building exercises. In the agency’s 2014-15 Annual Report, Managing Director H. Karl Bennett declared
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income ladder, they will address these needs themselves. You don’t have to theorise about it — you see it.”
COMMUNITY
SUPPORT The lack of housing in Jamaica presents a danger to the environment, lowering the quality of life for all Jamaicans living near squatter settlements. It’s also a danger to the economy, especially when it negatively impacts the tourist trade, which is a major income earner for Jamaica. While the HAJ organises projects, it’s the private companies that actually build them. The government tells its prospective settlers and developers that they must build in compliance with government regulations and not degrade the environment further. Each development includes paved roadways, a potable water supply system, drainage, sewage collection and electricity for individual lots. Those companies currently building housing projects for HAJ are: Alcar Construction & Haulage, NF Barnes Construction & Equipment, Seal Construction, & Buildrite Construction Company. Infrastructure that supports a housing community includes water and sewer lines, roads, and other types of construction like electric lines. Here are some of the companies that build infrastructure for the HAJ: J&H Construction Solutions (roads), COMPLANT (water and sewer systems), FSC Construction (drainage and sewer works), DR Foote Construction (infrastructure
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HOUSING AGENCY OF JAMAICA
and sanitary facilities), and Ashtrom Building Systems. Whenever a settlement is complete enough for people to move in, the housing department holds a group title ceremony. There HAJ representatives hand out ownership titles and enjoin the newly entitled to fulfil their own responsibilities to the public in return - to pay property taxes, form and maintain a good citizens association, and take care of the community to prevent crime and violence. The HAJ assigns a staff member to work alongside emerging community leaders to help them become the community they have envisioned. In this way each new community can contribute to the development of the country and help pull it out of poverty.
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How
MSM Su
OF MALAYSIA BE
Flavour OF THE DAY
ugar
ECAME THE
MSM MALAYSIA HOLDINGS BERHAD
THE SUSTAINABLE BUSINESS REVIEW
To increase its competetiveness, MSM continues to retain raw sugar supplies from countries such as Brazil, Australia and Thailand too name a few. After undegoing a strict refining process, these sugar products are marketed in a variety of grain sizes and packaging options. Its vast customer include major companies ranging from food and beverages, confectionaries, hotels and restaurants and the loyal household consumers. Today, MSM stands proud of its 50 year-old home-grown flagship product - “Gula Prai”. Being a common household name, it certainly lives up to its slogan as; “The No.1 Best Selling Brand in Malaysia”.
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MSM MALAYSIA HOLDINGS BERHAD CATEGORY
MSM Malaysia Holdings Berhad (MSM), incorporated on 10 March 2011, is Malaysia’s leading sugar producer. Principally, MSM operates the sugar business of Felda Global Ventures Holdings Berhad (FGV). It produces, markets and sells refined sugar products. The company conducts its business through two operating subsidiaries, MSM Prai Berhad and MSM Perlis Sdn. Bhd. which were established in 1959 and 1971, respectively. Additionally, MSM also operates its own logistics company – MSM Logistics Sdn. Bhd. MSM has an impressive combined annual production capacity of 1.1 million tonnes of refined sugar. Being an undisputed market leader in refined sugar, MSM accounts for approximately 64% of the domestic market share. On top of that, 20% are produced to cater for the export market. Being one of only four sugar companies currently operating in Malaysia, it maintains a strong workforce of over 1,100 people. Skilled and experienced at their respective areas, is the reason why MSM marks its solid presence in 20 countries worldwide – a number which is set to grow considerably in the coming years.
Output Quality MSM’s clients include major corporations, industrial users, small businesses and retail. The products are sold under the MSM brand which guarantees premium quality sugar. Generally, retail outlet distribution is carried out via traditional 1kg and 2kg bags, although business-to-business (B2B) distribution is usually delivered in larger trucks straight to the customers doorstep. Even then, quality and timeliness is a priority. Indeed, what becomes apparent from reading the company’s 2014 Annual
Report is a strong emphasis on the output quality. As a member of the MSM management team recently told us, ‘you name the certification, and the chances are, we’ve got it!’ Among the certifications in place are ISO:9001, Food Safety 22000, HACCP, HALAL, and Kosher compliance, just too name a few. MSM believes that their quality management system is easily the best in Malaysia and quite probably the best in all of Asia. In order to maintain and build on this, it demands similarly high standards of partners and suppliers. These include the Malaysia Trade and Trasnsport Company and Persha Shipping Agencies.
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Socially Responsible MSM’s work in the CSR arena merits special attention – in fact, the company is something of a stalwart in this area. Over 40 years ago, in 1973, MSM established an endowment fund known as the MSM Research Fund, to support scientific research at one of the local universities. In 2014, the endowment fund, which had reached an outstanding RM5 million, was re-allocated from scientific research to the direct financial support of students studying science at the university. Many of its thoughtful and significant contribution, strategically focuses on priority areas and aims to carry a long-term measurable impact, for the community and natural environment where it serves. A fine example is the aftermath of the devastating East Coast flood. Without delays, MSM rallied in setting up a donation drive to assist the victims and Felda settler areas which were affected by the floods. Cash were collected and used towards rebuilding basic infrastructure, utilities and schools. Finally, in a country where the female workforce particpation rate has been challenging in the past, MSM has raised the bar for Malaysian companies. It has developed an equal opportunities charter which sets out to treat all employees equally, regardless of ethnicity, religion, gender or disability. In 2014, it has successfully passed the Intertek Audit on meeting the International Labor Organization (ILO)’s Foreign Workers Rights and Employment Laws Requirements.
Nothing is more fundamental than
food.
For nearly 200 years, Bunge has worked to improve the sustainability of agribusiness and food production chains: driving economic development by connecting farmers to markets, enhancing environmental efficiency by facilitating global trade, and improving diets with food products that contribute to basic nutrition.
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MSM MALAYSIA HOLDINGS BERHAD
Growth and Diversification
The Future
Four years later since its listing on the Kuala Lumpur stock exchange, MSM is looking for attractive investment opportunities, particularly abroad. Financially strong with negative-gearing and sound cash balance coupled with a record breaking financial performance in 2014, the company has favorable financing conditions to fund its ambition.
MSM has always focused on high-end segment, big multinationals, pharmaceuticals and premium retail market such as New Zealand and Australia. With USD strengthening, export return is bigger despite weakening sugar price but MSM has taken proactive measures on procuring raw sugar at the right time and hedging strategically by 25% higher on mark to market basis.
Its management is identifying opportunities within the Asean region, which could mark an exciting period in the company’s history. In achieving this
On the other hand, the industrial segment have increased their demand by 2% and this is considered a healthy growth domestically.
target, the next plan is to setup a trading outfit in Dubai and begin construction for the Johor refinery. Under its long-term growth strategy, it hopes to achieve a high rate of operational efficiency, drive down production costs and provide a strong competitive edge to penetrate sugar-hungry regional markets.
Whereas, retail sector demand faces volatility as smuggling activities remains the biggest threat and the abuse of “transhipment license” still actively operates at major ports. These activities needs to end with imperative enforcement by the relevant and cooperating authorities.
Diversification is a further priority now. Potential avenues for this include investment that incorporates synergy, particularly in countries such as Myanmar, Indonesia and Brazil where part of the strategy is to source for upstream business with excellent yields and returns. This will allow MSM to provide better value to our shareholders.
However so, MSM is confident of winning more market share once our new third refinery in Tanjung Langsat, Johor is ready. The investment will see an integrated logistics complex coupled with a vessel terminal which serves as a continuing catalyst for profit growth. For Malaysians and Malaysia’s MSM, the future indeed looks sweet.
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THE EXTRAODI EVOLUTION OF
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INARY MEC Panama began as a small marine pollution, prevention and consulting services firm back in 1999 and has grown into an international firm serving clients with an extended range of shipyard solutions. These services include shipyards, afloat ship repairs, underwater services, marine contractors and chandlering. Its operations include three dry docks, as well as one slip-way with up to seven positions, at their shipyards in Balboa and Veracruz in Panama.
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T
Skytrax Research has again granted its “Best Airport of South America” award to Peru’s Jorge Chavez International Airport for the seventh consecutive year. Also known as the “Passengers Choice Award,” annual Internet surveys provided by Skytrax allow passengers to choose the awardees themselves - in this case, more than 12 million passengers from 108 countries. In 2014 also, the airport won the award for “Best Airport Staff in South America” for the fourth time in a row.
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Both of these awards speak to the excellence with which the airport carries out its services and the quality treatment its staff gives travellers moving through. After 40 years of neglect by former operators, the Lima Airport Partners (LAP) reconstructed and expanded the airport and its services, starting in 2001 with a 30 year concession, incorporating sustainability principles into the expansion. These principles are what helped the airport garner the two awards.
MEC PANAMA
Voting passengers noted that the airport had good access and passenger transit, was comfortable and clean with clear signage, had reasonable waiting times, handled baggage safely, and flight connections were easy to make. The airport handled overflows well, transferring passengers within 45 minutes, in spite of double digit growth.
The airport’s growth and daily operations are managed by Fraport AG, which also
holds 70% of shares in Lima Airport Partners (LAP) - the company authorised by the Peruvian government to run the airport. Fraport ranks among the world’s leading companies in the global airport business, offering a full range of integrated airport management services with subsidiaries and investments on five continents. Standards are high and management is constantly reviewing procedures for additional ways to enhance services.
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MEC PANAMA The government contract establishes that LAP is responsible for the construction, improvement, and efficient utilisation of the airport, including a requirement that LAP invest $110 million to modernise facilities and services in its first several years. The company actually invested $135 million and expects to invest much more during its 30 year contract. “We’re 14 years into it,” stated CEO Juan José Salmón, “and it really has been a great success . . .” Although the concession anticipated 18 million passengers by 2030, by 2014 the airport was already passing through 15 million passengers. LAP now projects a capacity of 30
million passengers by the end of the contract in 2030. The airport is in a key location, enabling it to be an interconnection point for regional travel. By offering improved infrastructure and service, the airport has attracted two major foreign airlines - LAN and TACA - to use it as their regional hub. LAN is the largest Latin American airline, based in Santiago, Chile. Avianca (TACA) is the main Central American airline, based in El Salvador. This keeps control of major airline transport within Latin America, fulfilling the sustainability principle of local (or regional) production.
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MEC PANAMA o date, MEC has invested $12 million in its dry dock to make it a top class facility. Much of this investment has been ploughed back into the local Panamanian economy using partners such as Pesqueros, S.A., for marine industrial equipment and Eko Clean for Marpol services. MEC has also established partnerships with international firms such as Hines Brothes for services like ultrasonic testing, and Wilhelmsen for ship servicing. Despite the considerable investments so far, still more is planned. This investment includes the purchase of at least six new cranes for the shipyard (three of which have already been purchased and installed), and the complete reconstruction of the existing three on-site cranes, a purchase of Miller Dimension 652 multi-process welding machines, which will allow MEC to move from Manual Arc to Semi-Automatic when they are in place – simultaneously reducing overheads and work timeframes for the firm. When implementd, the firm will have a total capacity of 26 tonnes a day steel renewal rate. Management plans that these investments, combined with others such as more efficient pumps and electric system components and painting, mechnical and compressor equipment, will allow MEC to move up the value chain. Having consolidated its operations over the past five years, the plan is now to build a brand around its service offering: a model previously created by the World Class Shipyard Group.
Aside from brand building, many of MEC’s investments have also kept sustainability in mind – low energy consumption has been at the forefont of the company’s thinking. Mr. Borrero points out that the the company also has a younger workforce profile, which is pushing the sustainable agenda. The young workforce will be an asset to MEC as it looks to execute its plans for the future. These include gaining ISO 9001 certification for its quality system – which would be another huge landmark in the company’s short history to develop its strategic partnerships and to continue to overdeliver for its customers.
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ENERGY
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BESALCO ENERGIA
BESALCO ENERGIA RENOVABLE S.A. (BSER)
Showcasing Chile’s Renewable
YPotential Besalco Energia Renovable S.A. (BSER) is one of Chile’s pioneers in its shift from importing fossil fuels to producing its own sustainable, renewable energy. During the last three years the company has built two “run-of-river” plants with a total capacity of 31 megawatts (MW) of power. Run-of-river plants rely on the movement of rivers or fast moving streams to produce power, including canals used for irrigation, rather than the construction of dams. They are generally decentralized, small-scale projects that are more sustainable than dams, and have a much lower impact on the environment and local communities. In development of the two projects, Los Hierros and Los Hierros II, Besalco Energia Renovable blended economic, social, and environmental concerns to support the company, the community, and the country. Seven years ago Chile was behind the rest of the world in renewable energy production. At that time, they had only 347 MW of installed renewables capacity, the largest share of which came from biomass (55%). Hydropower generated 39% of that 347 MW or just over 135 MW capacity for the entire country. Compare this with the United States’ Bonneville Dam, which alone generates 1,092 MW capacity.
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TO REDUCE DEPENDENCE ON
IMPORTED FOSSIL FUELS, in March 2008 Chile’s President, Michelle Bachelet, signed into law a bill that required every new energy contract to include at least 5% renewable sources
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BESALCO ENERGIA
By 2025, energy generators must be securing 10% of power through renewable sources or face heavy fines, including small hydropower projects of under 40 MW. To help with the transition Corfo, the government’s investment promotion agency, committed to finance more than 50 feasibility studies with a potential collective yield of over 300 MW and costing up to US$400 million. Corfo’s studies determined that Chile’s vast network of lakes and rivers in the central and southern regions made mini-hydropower projects a promising renewable energy source, with a minimum potential of 850 MW of power from more than 290 channels (small dams owned by agricultural channel management associations). Corfo now supports more than 120 such projects. The change in water regulations, coupled with government financial support, led to an immediate increase in the number of mini-hydropower and run-of-river projects. By 2009, run-of-river hydro projects, such as those of Besalco Energia, were already generating 1377.3 MW of power capacity for the country.
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Besalco Energía was created in 2007 as a division of the Besalco group - a 75 year old construction company known for completing some of Chile’s most challenging projects. In 2012, Besalco Energia Renovable was formalized as a company in itself, although still part of the Besalco family of companies. This move allowed it to operate independently, while retaining the advantages of having sister companies that specialized in different types of projects. Besalco Energia’s two run-of-river power plants,
IN OTHER PARTS OF THE COUNTRY,
the company has seven more run-of-river projects in the works, with installed capacities of between 5 and 30 MW. In addition, Besalco is conducting an environmental assessment for its first wind power project.
Los Hierros and los Hierros II, have respective capacities of 25 and 6 MW of power. Total project investment came to nearly US$130 million, which included the transmission line and substation that connects the Melado-Ancoa complex to the grid. The two plants utilize the hydropower of an old irrigation canal built in the 1900’s called “Canal Melado,” fed primarily by the Melado River - a tributary of the well-known Maule River. For nearly one hundred years, this canal has served
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to irrigate thousands of fields during the summer. When not needed for irrigation (primarily during winter) the project diverts these waters into its facilities to generate electricity. Overall the canal affects, directly or indirectly, the lives of more than 60,000 people. Besides the Los Hierros and Los Hierros II projects in the basin of the Melado River, BSER plans other projects in the Ancoa river that use the same irrigation waters. These projects are currently at different development stages. The construction of the first one, Túnel Melado, is scheduled for the third quarter of 2015. In other parts of the country, the company has seven more run-of-river projects in the works, with installed capacities of between 5 and 30 MW. In addition, Besalco is conducting an environmental assessment for its first wind power project. Its first Los Hierros project was awarded the Gold Standard for effective carbon reduction. The company’s business manager, José Ignacio Lois, said in an email interview in March, 2015, “This great accomplishment fills us with pride. Not only because of the everyday contribution of clean energy to our matrix, but for the strong alliances and praiseworthy relationships that we hold with the community and the different stakeholders of these projects.” Nevertheless, improvement is the company mantra - looking for new ways to optimize projects and move in the direction of sustainable growth. Hiring local workers is one way of optimizing. In the case of Los Hierros and Los Hierros II, Besalco hired local construction workers and plant operation teams almost exclusively. The company sees this policy as helping to maintain excellent local relations, and intends to continue
THE SUSTAINABLE BUSINESS REVIEW it with all of its next projects. It also works hard to establish trust and open communication with local communities. Understanding the needs and troubles of the community and the stakeholders of the project, beyond an economic scope, is of crucial importance. Thus, our strategy has always been to involve them in the project development from the very beginning,” declares Business Manager Lois.
FOR
BESALCO ENERGIA,
sustainable growth has been a key corporate value from the beginning. It also works to develop programs that develop and engage the community in a sustainable culture, including an educational initiative involving around 40 schools of the Maule Region. For them the company developed a course exploring relationships between the environment, energy production, and sustainability. It included a contribution of more than 5,000 trees, some of which the children planted themselves. The agriculturalists whose fields are irrigated by the canals the company uses to produce energy are served by a partnership between the company and the Asociación Canal Melado (ACM). This association represents around 2,000 farmers from the Province of Linares.
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Besalco’s business manager told us, “it is a critical relationship that we carefully nurture and we take pride to say that it’s still just as strong as the first time they trusted us with their canal.” Sometimes Lois worries about potential local challenges, noting that, “We are currently working in localities with very strong and organized communities. Still, we’ve managed to rise to the challenge and learned how to turn this into a positive situation.” He believes that an organized community is stronger when it has clear convictions, effective communication channels, and a solid structure. Such a community encourages the company to initiate information exchange, deepen its understanding, refine its dialog, and maintain a fluent and efficient communication process. In addition to local community relations, the company builds good relationships with their suppliers and consultants, some of whom are
BESALCO ENERGIA
local or, at least, regional. Andritz Chile, Siemens Colombia, and Rhona have all supplied the company with essential, high quality equipment. Lois appreciates not just the quality of their
products, but also the reduced delivery times and after-sale support they provide. He also appreciates the great relationships the company has with its consultants and other service providers.
The company combines open communication with stakeholders with
Moving forward, BSER is looking forward to the construction of its first wind power project and the new contacts it will make in that process. The company aims to continue to diversify its energy matrix, as the country’s renewable resources and development support diversify.
HIGH QUALITY ENGINEERING AND ENVIRONMENTAL STUDIES
to make sure that the information it transmits is accurate, trustworthy, and environmentally responsible.
It also looks forward to the new technologies in solar and geothermal power being developed, which will help renewable energy companies become increasingly more competitive. Not only will this growth be good for the companies, but also for Chile, boosting the country’s global competitiveness and advancing it toward respectable sustainable growth in conjunction with the rest of the world. www.besalcoenergia.cl
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THE SUSTAINABLE BUSINESS REVIEW
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The Sustainable Business Review - Quarter 3 2015