new 11 november 2003 - wesfarmers · 2020. 8. 28. · andrew henshaw (bunnings) wendy linton...

11 November 2003

2003 Report and Earthwatch Fellowships Wesfarmers today released its sixth comprehensive annual report detailing the group’s environmental, health and safety performance and aspects of its community involvement. The company today also announced the names of employees awarded Earthwatch Institute Fellowships enabling them to take part in environmental research projects in Australia and overseas. Managing Director Michael Chaney said the production of the externally-verified report was a response to increased interest from shareholders, employees, interest groups and the public generally in issues other than those covered in the normal financially-focused reporting process. “More attention is also being paid to these areas by investors, particularly by superannuation managers and their advisers,” he said. “A good reputation is an immensely valuable asset and we believe that people are entitled to information which enables them to come to a view about how a company operates in the broadest context possible.” The report is available electronically at www.wesfarmers.com.au or by contacting the company on (61 8) 9327 4251. Mr Chaney said Wesfarmers was in the eighth year of its partnership with Earthwatch. “We think these Fellowships are a great opportunity for employees to enhance their own understanding of environmental issues and to develop other skills in working with teams in an interesting variety of locations.” The 2004 Earthwatch Fellows, and the businesses in which they work, are: Amanda Dawson-Evenhuis (Curragh Queensland Mining) Samara Dequen (Wesfarmers Energy) Lyn Gower (Bunnings) Andrew Henshaw (Bunnings) Wendy Linton (Wesfarmers Industrial and Safety) Nathan Maddigan (Wesfarmers Limited) Jennifer Sanders (Wesfarmers Federation Insurance) Laurinda Shaw (CSBP) For further information contact: Keith Kessell, General Manager, Public Affairs (61 8) 9327 4281

03 ENVIRONMENT, HEALTH, SAFETY AND THE COMMUNITY

2003 Report

We are one of Australia’s largest publiccompanies with operating revenue of$7.8 billion in 2002/2003, a net profitof $538 million and a market value at 30 June 2003 of $9.5 billion.

We employ about 27,000 people on afull, part-time or casual basis and haveinterests in home and garden improvementproducts and building materials; coalmining; gas processing and distribution;insurance; chemicals and fertilisersmanufacture; industrial and safetyproduct distribution; rail transport andforest products.

More details on the business units coveredin this report are included at the startof each section.

Our business units have a high degreeof operational independence but group-wide policies and standards apply insome areas. Those most relevant to thisreport include:

• a target of reducing the Lost TimeInjury Frequency Rate by at least 50per cent each year on the way to zero;

• a requirement for a programme tomanage environmental, health andsafety risk exposure and the developmentof systems to ensure compliance withlicence conditions, notices, regulationsor other statutory requirements;

• development of a Crisis ManagementPlan;

• annual compliance reporting tosubsidiary boards and, through them,to the Audit Committee of the Boardof Wesfarmers Limited on issuesincluding environment, safety andhealth and crisis management; and

• preference for company-supplied vehiclesto run on liquefied petroleum gas.

While almost all of our employees workin the business units, we have a headoffice in Perth which employs about100 people. They provide a range ofservices including:

• administration• accounting and treasury• legal• human resources• business development• risk management• information technology• public affairs

About us

Business management

Environmental

Safety and health

Community

Areascovered

About this report 2Bunnings 4Curragh 14Premier Coal 24Kleenheat Gas 36Wesfarmers LPG 44Wesfarmers Industrial and Safety 50CSBP 56Sotico 68Other Businesses 74Verification statement 76Glossary and feedback 77

C O N T E N T S

Wesfarmers is a member of the DowJones Sustainability World Indexes.

Cover photo: Trevor Turvey (left) and Damian Turvey at the Ngalang Boodjanursery in Collie, Western Australia. The nursery provides and plants seedlings formine rehabilitation. Its involvement with Premier Coal is described on page 28.

Wesfarmers Limited 2 0 0 3 R E P O R T 1

The publication of this report provides us with the opportunity to review our environmental and safety performanceand the way in which we’ve reported on these issues since our first effort in 1998.

There is no doubt that there now exists across our very diverse group a much better understanding of the importanceof this process of public accountability. As well as meeting the public demand for more information on non-financialperformance, there is growing interest from investors on how companies address the issues covered by this report.

Last year I made reference to a disappointing safety outcome in many of the businesses. It is pleasing to note that,led by outstanding results from Premier Coal and Kleenheat Gas, there was improvement across almost all of theoperations. At Bunnings, a major campaign is underway to tackle its unacceptably high accident rate.

Progress was made by CSBP and Sotico in addressing land contamination issues and Bunnings adopted a policyaimed at ensuring, over time, that supplies of wood and wood products can be traced back to legally-operating andsustainably-managed forest areas. The group-wide greenhouse emissions assessment referred to last year has beencompleted and will form the basis of our ongoing approach to this issue.

Our efforts to improve stakeholder consultation continued with the formation of a reference group at Collie byPremier Coal and a forum convened by CSBP at Kwinana.

We are pleased to be included in the Dow Jones Sustainability World Indexes for 2004. This ranks Wesfarmers inthe top 10 per cent of the biggest 2,500 companies in the Dow Jones World Index in terms of economic,environmental and social criteria - one of only 16 Australian corporations so recognised.

I hope you find the contents of this report informative and interesting. It would greatly help us continue to improvethis publication, and our performance, if you were able to take the time to fill in and return the feedback form orto register comments through our website.

Michael ChaneyManaging Director

Welcome from the Managing Director

Michael Chaney at the Two RiversLookout in Perth’s Kings Park.Wesfarmers sponsored the lookout,part of the new LotterywestFederation Walkway which wasopened in August 2003.

About this reportTIMING

Welcome to our sixth report onenvironmental, safety, health andcommunity issues. It covers the financialyear ended 30 June 2003. In a few cases,where there have been developments afterthe end of the reporting period, but priorto the printing deadline, we have includedthis information to make the reportmore time relevant.

COVERAGE

The report this year includes for thefirst time our Industrial and Safetybusinesses acquired in the takeover ofHoward Smith Limited in August 2001.All other wholly-owned business units asat 30 June 2003 are covered, with theexception of the rural services and insurancedivision. The rural services business(Wesfarmers Landmark) was sold at theend of August 2003 to AWB Limitedand we have decided not to report on itsactivities as they have no ongoingrelevance to our group.

The insurance arm of the business unit(Wesfarmers Federation Insurance) joinedin October 2003 with the acquiredAustralian and New Zealand operationsof Lumley Insurance in a new businessunit. The nature and availability of datawill determine what can be reported onour insurance activities next year.

SAFETY PERFORMANCE DATA

Readers will notice on the safetyperformance graphs at the start of eachbusiness unit section, a reference tostatistics being for the year to 30 Junebut “as at 30 September 2003”. This isbecause we adjust the numbers to takeaccount of workers compensation claimslodged, or lost time that has been reported,up to 30 September relating to injuriessustained in the financial year underreview, thus allowing for delayed impacts.It can mean that the numbers reportedfor a particular year have to be changedin subsequent reports.

The basis for calculating our main safetyperformance indicator – the Lost TimeInjury Frequency Rate (LTIFR) – isoutlined in the Glossary on the insideback cover.

Most LTIFR numbers in this reportinclude contractors. Where it is possible tocalculate an LTIFR for contractors – thatis, where there is regular engagement andhours worked are available – the businessis required to report a contractor LTIFR.

REPORT PREPARATION

Data collection and report draftingis the responsibility of business unitenvironmental and safety representativeswho are part of a Working Groupconvened by the Corporate Office whichprovides legal, risk management and publicaffairs assistance. Drafts are reviewed bythe Corporate Office prior to detaileddiscussions with the contributing authors.This process ensures that ultimateownership of the report lies with thebusiness units.

VERIF ICATION

The report’s accuracy and completenessis critically important and every effort ismade to ensure that all statements canbe properly authenticated.

After the discussions referred to aboveare complete and a final draft agreed on,the business unit representatives arerequired to compile detailed checklistslinking report content to documentedsource material or employee sign off.

Representatives from our CorporateSolicitors Office and Group RiskManagement department then conductsample verification checks through sitevisits and desktop audits. They laterprepare reports for senior management.

The internally-verified reports are providedto independent assessors from the SnowyMountains Engineering Corporation(SMEC). SMEC was engaged in 2000to conduct the external verificationprocess and to prepare a detailed reportto business unit and Wesfarmers Limitedmanagement. A five-year plan preparedby SMEC in 2000/2001 was adoptedand forms the basis of our commitmentto the ongoing improvement of thispublication. SMEC’s findings on thisreport are published on page 76.

FORMAT

Again this year we have used a formatsuggested by SMEC which aims to increasethe transparency of the document byrequiring businesses to report understandardised headings. Occasionally itemsmay not fit entirely logically in theseclassifications, but we have continued withthe layout because we believe it enablesreaders to more easily make cross-businesscomparisons. Not all of the categoriesappear in all of the reports. This meanseither that the heading is simply notapplicable to a specific operation or that abusiness is unable to supply the necessarydata. Gaps are thus identified and thebusinesses concerned need to considerwhether these can be closed.

An alternative to this approach, for theenvironmental sections, would be to groupall information under subject headingsrelating to the issue – such as wastedisposal or water use. That could besuitable for a single-focus business (suchas a mining enterprise) but less so for acompany such as ours which operates ina number of quite different business andindustry sectors. We believe greateraccountability is achieved by dealing withthe issues on a business-to-business basisusing the format referred to above.

NEW FEATURES

This year for the first time each wholly-owned business unit nominates its threemain environmental and two main safetyissues. The intention is to identify someof the challenges facing our businesseson an ongoing basis. Reference to theseissues does not necessarily mean that, inthe year under review, they were the focusof most attention. But these are areaswhich have underlying significance totheir operations.

Reference is also made by each of thesebusinesses to their major stakeholders.Stakeholder identification is a step in theongoing development of this publicationtowards broader sustainability or triplebottom line reporting.

Another change this year is theintroduction of brief reports on twopartly-owned businesses for whichwe have management responsibility –Air Liquide WA and StateWest Power.We also mention other businesses withwhich we are associated – the AustralianRailroad Group, Bengalla coal mine,Wespine plantation softwood sawmilland the Queensland Nitrates ammoniumnitrate plant. As we do not directlymanage these operations we do notattempt to report on them. Links towebsites are provided for readers wishingto learn more about their activities.

COMPLETENESS

We do not claim that this report provides100 per cent coverage of our safety,environmental and community relationsperformance. There are gaps in ourknowledge which will be reduced as oursystems improve, particularly with respectto newly-acquired or merged businesses.This document is a best endeavoursattempt to report openly and honestlybased on our current state of knowledge.

GLOSSARY

Within each separate report we aim toeliminate as much jargon and technicalterminology as possible and to spell out


the names of organisations when they arefirst mentioned. We have used currentnames of government departments andother regulators even though theirdesignations may have been differentduring the reporting period. A generalglossary can be found on the insideback cover.

WEBSITE

The full report is available on our website atwww.wesfarmers.com.au. Additional hardcopies can be obtained from the PublicAffairs department on (61 8) 9327 4251.

FEEDBACK

Please help us improve the report bysending us your comments on the formon the inside back cover or by registeringthem on our website.

Wesfarmers andthe communityThe main contribution we make thatbenefits our society is the operation ofsuccessful businesses which generateemployment, provide high levels ofcustomer service, create markets forsuppliers and enable us to meet ourprimary objective of providingsatisfactory returns to shareholders.

But we believe there is an addedobligation on companies to respond tothe attitudes and expectations of thecommunities with which they engage andon whose support they depend.

The first such "community" are thepeople who work for us. Much of thisreport deals with the safety management,training and other systems designed toprovide a safe and rewarding workingenvironment for our employees.

Part of our broader community responseinvolves the setting of high standardswith respect to corporate governance andmarket disclosure, details of which arecontained in our Annual Report. Thatresponse includes also a willingness tomake direct contributions to community-benefitting organisations and causes.

DONATIONS

Many of our businesses provideinformation in this report about theircommunity involvement by directfinancial assistance and the way in whichtheir employees work constructively witha wide range of organisations.

Apart from this significant contribution,the Board of Wesfarmers Limited eachyear provides major financial support –up to 0.25 per cent of pre-tax profits -based on criteria designed to maximisethe benefit of these funds. The criteriainclude a preference for defined-termcommitments; directing support toorganisations rather than individuals;community-wide, rather than localisedbenefits; and contributions which areusually not part of broadly-based publicfund raising appeals. The Board thenconsiders requests for assistance withincertain categories.

A major focus of our contribution hasbeen the advancement of medicalresearch. During the year, we made thefinal payment in a five year, $1 million ayear commitment to the WesternAustralian Institute for Medical Research.Other areas to receive support includeremote area medical services provided bythe Royal Flying Doctor Service, childhealth research, tertiary education andindigenous advancement.

SPONSORSHIP

Our major corporate-level sponsorshipinvolvement is the award-winningWesfarmers Arts programme whichprovides $450,000 to support leadingvisual and performing arts companies andorganisations. In late 2002, an exhibitiondrawn from our extensive collection ofAustralian art began a national tour, withassistance from the federal and WesternAustralian governments’ touringexhibition agencies, Visions of Australiaand Art on the Move. After opening inPerth at the Art Gallery of Western

Australia, the exhibition went toGeraldton (Western Australia), Cairns(Queensland) and two venues in Victoria.It is to be seen also in Mount Gambier(South Australia); Canberra; Armidaleand Wagga Wagga in New South Wales;Hobart; and Bunbury (Western Australia).

In October 2003 we announced a majornew arts initiative involving thecommissioning of a series of works incollaboration with the Perth InternationalArts Festival to be presented from 2005to 2007.

EARTHWATCH

Both the broader community andemployees benefit from our long partnershipwith the internationally-respectedEarthwatch Institute. Each year we provideemployee fellowships for participationin environmental research projects inAustralia and overseas which help increaseawareness of environmental issues andcontribute to personal enrichment.


Simon Brady from Curragh onthe Koala Ecology Earthwatchproject at St Bee's Island,Queensland, in July 2003.

The Royal Flying DoctorService is one of manycommunity organisationssupported by Wesfarmers.


Bunnings

BunningsWe are Australia’s leading retailer of home and garden improvement

products and a major supplier of building materials. Sales during

the year reached about 3.4 billion dollars. At 30 June 2003 we had 116

warehouse stores and 95 smaller traditional stores in Australia and New

Zealand, as well as 18 WA Salvage discount variety stores in Western

Australia. We employ about 19,000 people.

Our three main environmental issues are packaging waste, chemical storageand handling and resource use.

We implemented an action plan aimed at minimising the impact ofpackaging waste on the environment.

We continue to review our chemical storage and handling practices.

At our national support centre in Western Australia we introduced an‘eco-office’ project to identify opportunities to reduce resource usage.

Our two main safety issues are manual handling by team members andtraffic management for movement of vehicles and pedestrians around sites.

The number of injuries arising from manual handling practices has reinforcedour commitment to focus on safe working procedures. Behaviour-based safetystrategies have been commenced to entrench safety in our daily activities.

Traffic management between trucks, forklifts and pedestrians in our yardareas is closely monitored and a “spotter” is used where required. Strictforklift curfews exist where no access is permitted to the retail floorduring peak customer periods.

It has been a disappointing year in our overall safety performance with acontinued rise in our Lost Time Injury Frequency Rate (LTIFR). We haveembarked on a re-engineering of our Safety Management System (SMS)with the creation of the BSAFE (Bunnings Safety Awareness For Everyone)programme designed to sustainably improve our safety performance to bestpractice standards. As part of this approach we are looking at our safetyculture from the top down and using external consultants to assist withtraining and risk assessment.

This report covers the Australian and New Zealand activities of Bunningsand WA Salvage, including former Hardwarehouse, BBC Hardware andBenchmark Building Supplies stores. To assist in data collection andimproving our knowledge of environmental, health and safety issues weconduct an annual survey of all locations.

This is the first time that safety statistics have been included for ourNew Zealand operations.

1 July 98 - 30 June 03 (as at 30 September 03)

LOST T IME INJURYFREQUENCY RATE

NUMBER OF WORKERSCOMPENSATION CLAIMS

99 00 01 02 03

11.8 9.5 5.9 8.4 18.3

99 00 01 02 03

361 448 503 860 1,061

Team member Nick Papandreouusing a circular saw at the Bunningswarehouse in Keysborough, Victoria.

02

Businessmanagement

TRAINING

Training and development programmescovering safety, health and the environmentcontinued across many areas.

To provide better access to training forour entire store network we are currentlyevaluating on-line learning systems thatcan be delivered through our Intranet.

Environmental

Environmental awareness training isdelivered through a comprehensive internalprogramme covering dangerous goods,hazardous substance storage and use andwaste disposal. This is part of the inductionprocess for new team members and ispresented to store management teams,safety committees and those involved inmerchandising and fit-outs.

Access to training information is availableon our Intranet and ease of accessimproved through an upgrade of ourcomputer network and monitors in stores.

Health and Safety

The new team member inductionprogramme continues to focus on safebehaviours and hazard identification.

A refresher course has been completedby 746 New Zealand team members aspart of the adoption of our Occupational

Health Safety and Environment(OHSE) standards.

The induction booklet “Bunnings andYou” is provided to all team members astheir personal reference guide to OHSEpolicy and procedures.

A new safety video featuring our ManagingDirector is currently being reproduced forevery store. An accompanying twenty-minute discussion guide will be shownto every team member to reinforce thesafety message.

Manual handling training is continuingin the form of hands-on training in liftingtechniques and practical risk assessments.Store management are being trained inspecific risk assessment techniques withemphasis on manual handling hazards.In-store trainers are selected to pass onthe information within their stores.

Training for new safety and healthrepresentatives is undertaken by accreditedtraining providers.

A review of existing training for operationof hazardous plant and equipment hascommenced. Updated training for forkliftsand elevated work platforms has beendeveloped and we have commenced thistraining for operators.

Emergency

Emergency plans have been reviewed.Changes to Emergency ControlOrganisation members have beenidentified during audits with updates andtraining provided where required.

Increased focus has been given toconducting emergency evacuation drills.

First aid training is kept current so thatqualified assistance is available at all stores.

COMPLIANCE

Environmental

To assist ongoing compliance we keepup-to-date with any changes in regulationsby subscribing to a numbe of professionaljournals and Australian Standards.We also monitor websites of state andfederal authorities.

Our involvement as a signatory to theNational Packaging Covenant has greatlyassisted us in developing relationshipswith government environmental agencies.Our first year action plan was approvedand published on the Packaging Council ofAustralia website at www.packcoun.com.au.

Our action plan has been a mechanismfor us to bring together a number ofvarying environmental and eco-efficientstrategies. Through our cross-functionalworking group we are better able tofocus our efforts on projects that deliverenvironmental benefits and businessefficiencies. As a result of this process weare working collaboratively to reduce waste.

Having joined the Covenant prior tothe National Environment ProtectionMeasure being introduced in WesternAustralia, we have worked closely withthe Western Australian Environment

Bunnings


Improve safety performance by halving our LTIFR each year withzero lost time injuries our ultimate aim.

Improve the safety culture by promoting safe behaviours and use ofrisk assessment and hazard identification in daily routines.

Adopt a formal environmental policy and commence implementation ofan Environmental Management System based on AS/NZS ISO 14001.

Identify opportunities to improve the social and environmentalwellbeing of the communities in which we operate.

2002 REPORT PRIORIT IES

LTIFR for Australian operations up from 8.4 last year to 18.3.Workers compensation claims up from 860 last year to 1,061.(Note that last year’s figures did not include NZ data but this is included this year.)

National occupational health and safety manager appointed to driveprogramme. Dupont safety culture review. Creation of seniorexecutive safety leadership team.

Progress made with environmental policy development in the areasof wood product sourcing and waste disposal. Implementation of anEMS delayed due to attention to these issues.

Increase in sponsorship from $1.5 million to $2.65 millionnationally. Running kids’ workshops with environmental themes inschools and during World Environment Day.

03OUTCOMES

Protection Authority (EPA) to provideinformation that may assist others indeveloping action plans.

Case studies on our action plan havebeen published in the EPA NationalPackaging Covenant (NPC) newsletterand presentations have been made to theWestern Australian jurisdictional kerbsiderecycling group to provide insight intohow businesses are approaching theircommitments.

We were invited to the NPC forum ona sustainable packaging alliance in April2003 where we presented our sustainablewood product policy as part of the casefor sustainability of supply chains.

Other key environmental achievementsduring the year included:

• Paint waste recovery: We joined oursuppliers Dulux and Victoria EcoRecyclein an Australian recycling first to recoverwaste paint from householders. Over aweekend in March 2003 at our SouthOakleigh store in Victoria, a car parkpaint recovery site was set up with1,800 litres of waste paint and hundredsof empty cans recovered for recycling.This former landfill waste wasreprocessed into low-grade fence paintand new steel cans. This can be madeavailable for sale through our stores,completely closing the recycling loop.We are working on the challenge offurther developing the trial concept toprovide permanent waste paint recovery

stations at stores as part of ourenvironmental commitment.

• Plastic bag reduction: We have madea commitment to reduce plastic bagusage by actively offering customersalternatives. Our policy includes:

• always having boxes and clothbags available as an alternative toplastic bags;

• educating our cashiers on our aimto reduce landfill and impact onthe environment by using less plasticbags; and

• encouraging our cashiers to askeach customer “Do you need a bag?”instead of “Would you like a bag?” andencouraging other available options.

In August 2003, we announced a feeof 10 cents per bag up to a total of50 cents per customer for those optingto use plastic bags. All of the funds willbe donated to the Keep AustraliaBeautiful Council.

• “Eco-office: We have embarked on aneco-office programme at our nationalsupport centre in Perth. This hasreceived an enthusiastic response withthe creation of an office green team todrive various strategies, includingswitching to recycled content formsand stock items and examining waysto reduce our energy and waterconsumption.

This eco-office concept is to be furtherdeveloped and implemented at all storesupport facilities.

• Dangerous goods: Our stores containdangerous goods in small consumer-sized packages of 20 litres or kilogramsor less. These include flammableliquids, flammable gas, pool chemicals,acids and garden chemicals.

We have an internal risk managementprogramme modelled on:

• National Occupational Health andSafety Commission (NOHSC)Standard for control of workplacehazardous substances [NOHSC:3018(1994)];

• NOHSC Standard for Storage andHandling of Workplace DangerousGoods [NOHSC: 2017(2001)]; and

• AS/NZS 3833:1998 for the storageand handling of mixed classes ofdangerous goods in packages andintermediate bulk containers.

Controls are in place to manage quantitylimits of certain volatile and flammabledangerous goods and to ensure strictseparation of reactive substances.

We take care in our merchandising layoutfor high-level Schedule 6 poisons byadopting a minimum storage height of1,200mm to restrict access by children.

Liquefied Petroleum Gas (LPG) decantingequipment and 9kg exchange cylindersare also stored on sites with appropriatesafe operating procedures and licensingas required.

Health and Safety

We operate under health and safetylegislation that varies between states.

Initiatives such as externally-conductedrisk assessments, safety committees, hazardinspections and internal audits assist usto identify and address any areas of riskor non-compliance.

During the year there were three incidentsthat resulted in commencement ofprosecutions by the Queensland WorkHealth Department. These issues relate totraffic management hazards in the deliveryand unloading of goods at our Caloundraframe and truss site and our Mackay storeand provision of guards to a woodworkingmachine at the Bundaberg frame andtruss site. The results of these ongoinglegal proceedings will be reported nextyear. The hazards associated with theseincidents have all been addressed.

An infringement penalty notice wasreceived at our Everton Park store inQueensland for obstructing the six metreclearance lane around a building andomitting to service one fire hydrant.The obstruction was cleared and ourmaintenance contractors acceptedresponsibility for the fire hydrantservice oversight.

Bunnings


New traffic management markings guidegoods deliveries at the Bunnings Warehousein Balcatta, Western Australia.

A waste paint recoverysite at the South Oakleighstore in Victoria whichcollected paint fromhouseholders for recycling.

A penalty notice was received from a localcouncil by our Belrose store in New SouthWales for allowing rinsing water from apaint spillage cleanup to enter storm waterdrains. The issue was rectified and therewas no adverse impact on water quality.

A coroner’s inquest into a fatal forkliftaccident at our East Maitland store in2002 concluded in August 2003 withrecommendations that:

• a risk assessment be conducted for theoperation of forklifts on gradients;

• regular maintenance records bemaintained; and

• safe work procedures be reinforcedwith operators.

These areas are being continually addressedand have been a particular point of focussince this accident. Traffic managementand forklift operation forms an importantpart of our safety strategy.

We received 28 official notices or finesfrom relevant authorities covering safetyand environmental issues, such as forkliftoperations and traffic control, storage ofdangerous goods, machinery guarding,fire safety and chemical spillage.

All notices were resolved by thespecified date.

A ruptured fuel tank on a delivery truckspilled 500 litres of diesel into a stormwater drain at our New South Walesdistribution centre in Smithfield. TheNSW hazmat team managed the incidentto avert any environmental damage.

Licensing and approvals

Individual local government authority

environmental requirements are addressedat the development application stage ofeach new site.

Dangerous goods storage licences orstorage notifications are in place whererequired. Where we are able to maintainstorage limits below licensing levels wemaintain compliance with our internalrisk management programme based onNOHSC: 2017(2001) and AS/NZS 3833.

MANAGEMENT SYSTEMS

Integrated Management System

Through the re-engineering process ofour health and safety management systemcurrently under way we will be able toimprove integration of OHSE systems.The need to further develop recording,incident tracking and reporting systemsthat are appropriate for our business hasalso been identified.

Environmental ManagementSystem (EMS)

It remains our intention to implement anEMS based on AS/NZS ISO 14001 assoon as practicable.

Safety Management System (SMS)

A new SMS titled BSAFE (BunningsSafety Awareness For Everyone) has beenformulated and will be implemented.

Standards are continually monitoredthrough a multi-layered system of self-assessments and ongoing audit programmes,ensuring standards are maintained andexceptions remedied. Each month,minutes of safety committee meetings,

injury registers and hazard inspectionchecklists are reviewed and actioned bythe complex manager, area manager andhealth and safety coordinators.

The internal safety audit standard wasreviewed and improved to include a morecomprehensive list of high hazard areas.

Audit results are receiving increasedscrutiny from area and regional managersin an effort to quickly resolve issues andprevent recurrence of hazards. These resultsremain closely linked to managementperformance assessments and storebonus payments.

A number of new network storesreceived their first audit in the precedingperiod, identifying opportunities forimprovement in the storage of poisonsand pool chemicals.

The audit programme demonstrated lowerlevels of compliance: dangerous goods76 per cent compliance (compared to91 per cent last year); and occupationalhealth and safety 80 per cent compliance(compared with 90 per cent last year).It is envisaged that with initial audits nowcomplete at all new network locations, afirm base is in place to improve results.

Testing and maintenance levels on allessential fire and life safety systems wereextensively reviewed. Many serviceagreements have been upgraded to increasethe level of servicing and investmentmade in upgrading older equipmentwhere recommended.

An external auditor is engaged to providequarterly essential service checks atlocations to ensure scheduled maintenanceis taking place according to standards andany faults actioned for repair or upgrade.

POLICY

We have an occupational health and safetypolicy titled “Success through Safety”.

Our company credo, which is thestatement of ethics that underpins ouroperation, refers to our duty to protectthe environment and natural resources.

We have adopted policy statements inrelation to our resource usage and wastereduction and recycling as part of ourNational Packaging Covenantcommitment. We also have adopted apolicy aimed at ensuring that timberproducts in our stores are derived fromsustainably-managed forests. Furtherdetails can be found in our Case Studyon page eight.

Our delivery of an EMS based on ISO14001 has been delayed because of ourspecific focus on these issues.

Bunnings


Team members at the Keysboroughwarehouse with customer protection barriersin place during forklift loading operations.

The source of timber and other wood-containing products sold in hardware storeshas become an important issue for environmentalists and for the general public.

Concerns have been raised with retailers in Europe and the United States about theorigins of these products – whether the raw material has been derived from legally-operating and sustainably-managed forest operations and what the retailers knowof the processing of that material into the finished products on their shelves.

In early 2002 we decided to begin developing a policy to address this issue.We commissioned consultants to advise us on the nature and scope of schemesaround the world covering certification of forestry operations and we had discussionswith interested parties, including our suppliers.

Our Managing Director wrote to suppliers in September 2002 advising them ofour intention to develop a policy covering wood products sold in our stores and inFebruary 2003 we posted the “Timber and Wood Products Purchasing” policy onour website – www.bunnings.com.au (click on suppliers).

In February 2003 we told suppliers they would need to supply details of the sourcesof all products sold to us and progress being made towards independent certificationof those sources. We will set an annual improvement benchmark and progress willbe reviewed every year.

Team member training sessions have been held and we look forward to theimplementation of this policy over coming years to give us and our customersconfidence that wood products are being obtained from well-managed and legally-operating forests.

CASE STUDY

Environmental

AIR (ATMOSPHERIC EMISSIONS)

Dust

Wood dust is produced at most stores as aresult of sawing for customers who requestcut-to-length timber. Power saws are fittedwith dust extractors and team membersare required to wear supplied protectiveequipment during their operation.

Odour

Odorous products such as manure,garden mixes and chemicals are in smallconsumer-sized sealed packages. Odourfrom these storage areas is managedthrough ventilation systems and closeattention to housekeeping by removingor fixing broken or damaged packaging.

Greenhouse emissions

Our emissions estimate is based on ourelectricity and fossil fuel usage.

Out of our total emissions of 118,052tonnes of carbon dioxide equivalent,electricity consumption contributed96 per cent. This estimate now

includes electricity usage for our NewZealand operations.

Ninety-eight per cent of our forkliftsare now powered by LPG or batteries.As reported last year, we intend to replacethe remaining diesel-powered forkliftswith more environmentally-friendly unitsas existing plant is decommissioned.

Noise

Environmental impact studies aresubmitted to local authorities as requiredwhen a warehouse development isundertaken.

In five locations, traffic managementand public address system usage hasbeen modified at individual stores toresolve concerns from neighbouringresidential areas.

Lighting

Car park and outdoor lighting is designedto all relevant Australian standards andto local authority requirements aimedat restricting “light spill” outside siteboundaries.

Programmed lighting timers ensurethat lighting levels are minimised out ofstore hours with only essential securitylighting used.

Bunnings


Makinga difference...

Louise Thexeira, Risk AnalysisCo-ordinator, Mark Gomm,Risk Analysis Manager, andTimber Buyer Jaimie Thurlowdiscuss Bunnings’ timber policy.

WATER

Consumption

Each of our warehouse stores incorporatesa nursery reticulation system from themain water supply that is controlled byan automated pre-set timer system.Reticulation cycles are programmed toreduce waste from evaporation.

We estimate that average annual waterconsumption for a warehouse store isapproximately 12,000 kilolitres. Workcontinues to establish an accurate recordingand reporting system to enable us tobenchmark and improve our consumptionof this precious resource. As part of this,we are in the process of investigatingimprovements to our accounts payablesystem to allow data entry from invoicesof total litres as well as account value.

Discharges to surface and ground water

We conform to all local councilrequirements for car park, nursery andstorm water drainage.

We have procedures in place at stores tominimise the risk of accidental release ofnutrient run-off or leaking chemicals intothe storm water system.

Reuse

Five sites (Mile End in South Australia,Cannington and Morley in WesternAustralia, Minchinbury in New SouthWales and Mackay in Queensland) reusestorm water run-off from the nursery towater landscape gardens or recycle backthrough the irrigation system.

WASTE

Solid Waste

We estimate that an average warehouseproduces approximately 1,400 cubic metresof landfill waste per year and recycles625 cubic metres of cardboard packaging.Estimates of waste generated by non-warehouse stores have not been made.

Hazardous waste from spillage cleanupsor returns of faulty products not suitablefor landfill disposal are collected bysuppliers or disposed of by contractors.Waste disposal procedures and trainingare provided to locations.

Liquid waste

Liquid waste is produced from foodpreparation in cafes, drainage from binstorage areas, infrequent wash downs ofsmall hire equipment and rinsing of water-based paint stirrers. Our waste disposalguidelines do not permit any liquid wasteto be discharged to storm water.

Where required by local authorities:

• wash down sumps or separation unitsare installed to capture hydrocarbonrun-off from machinery wash downs;

• bin wash down areas are connected tosewerage systems instead of drainingdirect to storm water; and

• locations with a cafe have a grease trapinstalled to filter contaminants beforedrainage to sewer.

Mechanical paint mixing machines arein place at all locations, replacing the useof manual stirrers and rinsing water.A minimal amount of rinsing water isstill produced by cleaning paint brushesfrom children’s workshop activities. Ananalysis of this liquid shows that it isnon-hazardous and it is reused in gardenbeds with the suspended solids filteredout and disposed of in general waste.

Recycling

We recycle our cardboard packaging wasteand we are well advanced with a rolloutof plastic shrink-wrap recycling in majorsites, which has a further positive effecton reducing landfill waste.

RESOURCE USAGE

Energy

Our main source of energy is electricity.

Electricity

We estimate our total annual electricityuse is 110 million kilowatt-hours. As thiscontinues to be the main contributor toour greenhouse gas emissions, ongoingattention will be given to eco-efficienciesin this area.

High efficiency lamps and computer-controlled light switching systems areinstalled at warehouse stores to provideoptimum performance with the use ofambient light via translucent roofsheeting to minimise electricityconsumption.

An initial review of electricity usage andcharges has been completed and thishighlighted opportunities to further reduceconsumption by better understandingand managing the daily peak usage.

Working with our service providers weare progressing an evaluation of electricityusage to identify discrepancies betweensimilar sized stores.

Bunnings


Team member Ronié D-Fleur using theplastics bailing machine at the Balcattawarehouse, Western Australia.

Safetyand health

LOST T IME

Our Lost Time Injury Frequency Rate(LTIFR) for the Australian operationswas 18.3 (compared with 8.4 last year).LTIFR for WA Salvage was 15.3 comparedto 7.8 last year and for the New Zealandoperations was 18.3 compared to 18.6last year (not reported).

Safety statistics are reported to seniormanagement every month and to ourboard every two months.

Our safety performance continues to beof great concern and during the year anational Occupational Health and Safetymanager was appointed with responsibilityfor conducting a strategic review ofsafety and driving change in this area.

Our LTIFR may not fall significantly untilthe effects of behavioural change andre-engineering of our SMS are obtainedthrough the new BSAFE programme.

As part of the BSAFE programme asenior safety leadership team has beenestablished consisting of senior executivesfrom across the business. This forum isthe driver for implementing major safetyimprovement projects in areas includingmobile plant, high rise storage safety andtraffic management.

WORKERS COMPENSATION

There were 1,061 workers compensationclaims reported, relating to occurrencesduring the year, compared with 860last year.

Ongoing coaching with site managers isbeing undertaken to ensure our injurymanagement policy is understood andfollowed. We have been able to manageinjured team members back into theworkplace and improve their rehabilitationby having managers take a more directpersonal involvement in each case.

This early intervention and return to workstrategy encourages direct communicationbetween store management, the injuredteam member and doctors.

HAZARD AND RISK

Programmes

Workplace hazard identification and riskassessment methods are the mechanismsused to identify and control hazardsthroughout our business.

We simplified our risk assessment model toone based on a “stop, think, act” mentalitythat is readily understood and can beeasily applied to daily work situations.

High-risk tasks such as operating forkliftsand power saws each have a standardoperating procedure developed and acoaching logbook system for operators.

Other specific hazard controls include:

• dexion racking inspections to reducethe risk of collapse through damage,overloading or falling high-rise stock;

• pallet inspections to ensure soundnessof pallets used by forklifts;

• monthly hazard inspection checklistsof entire store carried out by safetycommittees; and

• high housekeeping standards to reducecustomer accidents on the premises.

An external environmental consultant hasbeen engaged to conduct preliminaryassessments at four of our sites in NewSouth Wales that have asbestos present.This includes cataloguing of asbestoscontent and laboratory analysis of asbestosmaterial in three sites as a prelude toa wider assessment of remaining sites.We will negotiate with owners in respectof assessments at other sites.

Emergency response

We have a Crisis Management Plan inplace to address a range of potentialemergency situations. Contingency plansare provided to address major accidentsor security breaches.

Emergency response guides for a rangeof chemical spillages are in place and areaccessible at every location.

Post-incident debriefing is offered to thoseinvolved in a critical incident with traumacounselling made available on site.

Materials handling and storage

Materials handling involves theunloading of deliveries and the stackingof merchandise onto shelves or high-risestorage areas at our stores anddistribution centres.

A variety of material handling devicesare provided to ensure this takes placesafely and efficiently. The step-throughdesign of our check-out counters andcordless hand-held scanners at all pointsof sale, allow cashiers to scan heavy itemsin the trolley and avoid the risk ofmanual handling.

Ongoing reviews of the workingenvironment are also introducing changesto systems of work, reducing the amountof manual handling involved through theuse of new equipment. An example ofthis is a pilot project being conducted witha cement supplier where 40 kilogram bagsare being replaced with 20 kilogram bags.

Opportunities for improvement to thehandling of heavy carpets and sheds havealso been identified. Changes in these areaswill be progressed during the next year.

Bunnings


Team member Rick DaCunha at theKeysborough warehouse with a smallersize cement bag introduced to reducethe risk of manual handling injuries.

Traffic management between trucks,forklifts and pedestrians in our yard areasis closely monitored and a “spotter” isused where required. Allocated safeunloading areas are in place for deliverytrucks. Strict forklift curfews exist whereno access is permitted to the retail floorduring peak customer periods.

Material Safety Data Sheets (MSDS)registers for hazardous substances used inthe workplace are maintained at each store.An online database of MSDS is accessibleby stores and can be printed out forcustomers on request.

Risk assessment

Seven further sites have been subjectedto detailed site risk assessments byexternal consultants. They providedrecommendations to form the basis ofaction plans that are being progressedunder the guidance of seniormanagement.

EMPLOYEE WELLBEING

The wellbeing and personal fitness of ourteam members is integral to their healthand safety in the workplace.

Forty-six team members attended a lifeskills workshop called “Investment inExcellence” where they were encouragedto bring their partners along to share inthe experience.

Stress management workshops areconducted for management teams toencourage a healthy, balanced life style.Annual influenza injections are offered toevery team member and we rigorouslypromote a non-smoking workplace.

The pilot employee wellbeing programmereferred to last year was discontinued toallow us to focus on safe work practices.

We also provide a subsidised yogaprogramme at our national support centrein Perth where 30 minute relaxationclasses are held twice per week.

We are committed to providing a positivework environment by ensuring that it isfree from all forms of inappropriatediscrimination.

Community

STAKEHOLDERS

Our stakeholders include team members,customers, suppliers, transport and othercontractors, communities in which weoperate, government agencies, non-government environmental organisations,and the shareholders of our parentcompany, Wesfarmers Limited.

Our philosophy is to, where possible,proactively seek to establish opendialogue with our stakeholder group andencourage feedback and comment as toour performance.

With the size of our store network it is achallenge for us to ensure we closelyengage with all the stakeholders who takean interest in our business. We do thisthrough a local community focus withinstores and at a state and national levelwith major stakeholders.

Collaboration with local residents andenvironmental groups resulted in asuccessful effort to relocate a nest site of

two endangered white-bellied sea eaglesfrom a new warehouse development sitein Townsville, Queensland.

FEEDBACK/COMPLAINTS

We provide a feedback tool at everylocation through ‘How did we do’cards promoted at the front of the store.A recording and reporting system ensuresthat every comment is forwarded toour executive operations team for replyif requested.

The frequent positive letters fromcustomers, communities, governmentagencies and non-government organisationsencourage us to keep striving to makea difference in the communities wherewe operate.

Store management reported dealing with23 informal complaints from neighbouringproperties on minor issues related toaesthetics, lighting, traffic, noise, dust andodour. Our survey shows that these wereresolved locally by managers workingwith neighbours and making changes toreduce impacts to acceptable levels.

Bunnings


Team member Henry Kangascarries out a safety check ona forklift at Keysborough.

LIAISON WITH AUTHORITIES

We remain proactive in engaging andestablishing open working relationshipswith authorities that regulate our businessand the non-government organisationswho take interest in our operations.

Good working relationships havecontinued during the year with stateenvironmental protection and wastemanagement agencies.

Our health and safety management teamhave held seven roundtable discussionswith WorkCover Victoria to create abetter understanding of issues that arise.

We have received letters of appreciationfrom the Western Australian, Victorianand Queensland environmentalprotection agencies for our involvementin joint waste reduction initiatives andsupporting the National PackagingCovenant. Greenpeace has also madepublic comment in support of ourleadership role in developing oursustainable wood purchasing policy.

opportunity to share their ideas with anincentive reward offered.

On our website (www.bunnings.com.au)information on our sustainable woodprocurement policy can be viewed togetherwith an information pack to guide oursuppliers towards achieving certificationfor their timber and wood products.

COMMUNITY SUPPORT

We demonstrate our strong commitmentto the communities in which weoperate through a National CommunityInvolvement Strategy focusing on local,state and national organisations.

We support many community groupsactive in health, youth development,the environment, education andcommunity welfare.

During the year, we helped raise fundsand contributed almost $2.65 million tovarious charities and community groupsthroughout Australia.

National programmes of which we aremajor sponsors include the JuvenileDiabetes Research Foundation “Walkfor a Cure”, Bluey Day (Head Shavefor Childhood Cancer Research)and Anglicare.

At a state level we also take on majorsponsorships such as the Clean BeachChallenge in Queensland, BunningsFathers’ Day Appeal for the Alfred Hospitalin Victoria, the Red Shield Appeal inWestern Australia and various children’shospital appeals.

Bunnings


We have been invited to take part inan industry advisory group for thedevelopment of a code of practice forthe recently released Western AustralianDangerous Goods Safety Act andRegulations 2002.

We are also taking part in the AustralianStandards development committee forthe creation of a chain of custodystandard to support the new AustralianForestry Standard.

COMMUNICATION

A wide variety of internal communicationtools are used to ensure that safety andthe environment remain front-of-mindworkplace issues.

Safety and community support featuresin comments by our general managers in“Bunnings Banter”.

To support our environmental awareness,a regular newsletter is sent to stores to briefthem on the initiatives being undertaken.

Our Intranet has been further developedand improvement in the network access atstores has made it more readily available.

Updated and more comprehensiveinformation on the environment anddangerous goods storage and handling isposted on the Intranet.

The “Bunnings and the Environment”page displays a statement on ourcommitment to the environment togetherwith store environmental guidelines toreduce impact. An innovation feedbackmailbox provides team members the

Lisa Towell (left) and Meredith Bowd from theNorth Paramatta warehouse in News South Waleswith year eight art students from Muirfield HighSchool. Team members provided their time andBunnings donated materials to brighten up anarea at the school.

Improve safety performance by at least halving our LTIFR each year withzero LTIs our ultimate aim.

Further develop safety leadership culture and safety education within seniorexecutive and management teams.

Deliver re-engineered SMS based on AS/NZS 4801 across the business.

Continue developing EMS based on ISO 14001.

Progress sustainable timber and wood policy with our suppliers.

Continue to improve the eco-efficiency of our operations.

Prioritiesfor the future

The team at every warehouse storesupports their local community in manyways, including:

• providing expert advice or hands-onsupport to assist community groupswith Do-It-Yourself (DIY) projects;

• acting as collection points for variouscharities;

• conducting fundraising events forcharities and community groups;

• personally taking part in charitableevents; and

• participating in coordinated blooddonations for the Red Cross.

We receive hundreds of letters fromcommunity groups asking for oursupport with various community andenvironmental projects. Some of theprojects where our team membersdonated their time and skills included:

• running workshops for childrenduring Environment Week;

• painting wards and treatment roomsat children’s hospitals;

• building flower beds and vegetablegardens at primary schools;

• doing “makeovers” of communityfacilities; and

• performing “back-yard blitzes” forcharity homes for auction.

At warehouse stores free “how to” weekendworkshops are offered to adults andchildren. In addition, specially coordinated“Ladies Nights” are conducted tointroduce women to the world of DIY.

Children’s workshops are also conductedat schools, community centres and majorcommunity events.

We will continue to devote our energy andexpertise to identifying ways of addingvalue to the communities in which weoperate and reducing our impact onthe environment.


Bunnings

Janice Murray, Activity Organiserfrom the Joondalup Warehousein Western Australia, showsKate Johns of Currambine PrimarySchool how to build a tool box aspart of the Bunnings programmeof school workshops.


CurraghWe operate the Curragh open cut mine near Blackwater, 200 kilometres

west of Rockhampton in Queensland’s Bowen Basin which produces high

quality coking coal exported to steelmakers and steaming coal supplied

for domestic power generation. Sales of 6.2 million tonnes were in line

with the previous year. The acquisition of the Curragh North deposit was

announced during the year and this will extend the life of our operations

to 2025. We employ about 240 people.

Our three main environmental issues are mine site rehabilitation, dustcontrol and water management.

We rehabilitated 60 hectares during the year as required by ourEnvironmental Authority conditions.

Despite severe drought conditions, monitoring showed we did not exceedour prescribed limits for airborne dust. An additional five monitoringsites were established.

Our purchased water volumes increased on last year due to greateramounts of coal being processed and the continuing drought. All availablewater was reused.

Our two main safety issues are workplace injuries and managing thehazards inherent in the operations of a major mining site.

We recorded only one Lost Time Injury during the year (the same aslast year). We believe that healthy employees suffer fewer injuries and wecommenced a “Healthy Bodies” programme designed to encouragehealthy lifestyle choices.

During the year we focused on our Crisis Management Plan andconducted a successful desktop exercise and a full mock emergency.

1 July 98 - 30 June 03 (as at 30 September 03)* Permanent contractors included

LOST T IME INJURYFREQUENCY RATE*


99 00 01 02 03

4.8 4.9 1.3 1.0 1.0

99 00 01 02 03

18 15 8 5 4

Curragh

Curragh’s Senior EnvironmentalEngineer, Kevin Smith, checksthe growth of trees at one ofthe mine’s rehabilitation areas.

02 03

Businessmanagement

TRAINING

Environmental

The environmental awareness training isintegrated in our site induction programmefor contractors and permanent employees.

Health

A requirement of our Safety ManagementSystem (SMS) is that managers andsupervisors are trained in the recognitionand management of fatigue. Fatigue andpsychological impairment training formanagers and supervisors was conducted

in November 2002. The 74 attendeeswere instructed on the critical role theyplay in the effective management offatigue-related risk on site.

Our SMS requires employees toattend annual fitness for duty training.The training this year focused on personalfatigue management. It was conducted inDecember 2002 and 365 people attended.Because of the timing of the training,special mention was also made of driverfatigue on the open road during theholiday season.

Safety

A requirement of our hazard managementplan is that employees are trained in theprincipal hazards on site as identifiedby our SMS.

The training programme includes anassessment to ensure comprehension.Since July 2002, 115 of our employeesand permanent contractors haveparticipated in this training. Follow uptraining of mine personnel will beconducted during a five-year refreshertraining programme which is due forimplementation before November 2003.

Courses covering risk management,accident investigation and communicationswere conducted for new supervisorypersonnel. Fifty-one of our employeesattended this training during the year.

Personnel who are required to work inconfined spaces must have a currentqualification. Confined space trainingcourses and re-certification courses are

Curragh


Re-powering of all haulers with more energy efficient motors(reduction of 10 per cent fuel use by these units).

Further reductions in use of coolant inhibitors.

Ensure compliance with our obligations under our EnvironmentalAuthority to meet the high standards expected by the community.

Complete a Cultural Heritage Management Plan for the wholeof the mining lease areas.

Incorporate new resource areas into our existing EnvironmentalAuthority using our mine site expertise and followingcommunity consultations.

Community consultation and participation to involve stakeholdersin our activities.

Implement Crisis Management Programme.

Continue the consultation process with our employees tocontinually review and monitor the effectiveness of our SafetyManagement System.

Benchmark our Safety Management System with other industryleaders with the view to continually improving our system.

Promote further education of health and fitness amongst employeesand their families.

Promote health and safety awareness within the community.

Four of our five units have been re-powered and are consumingten per cent less fuel per hour.

Not achieved due to increased equipment use by contractors.

One unauthorised discharge of water off our mining lease.

A Cultural Heritage Investigation and Management Agreement forour proposed northern development area was signed with thetraditional owners and a Cultural Heritage Management Plan willnow be developed.

We have revised our plan and a full Environmental Impact Statementis being prepared for the development of the northern area.

During the year 40 formal meetings were held with numerousstakeholders and 211 visitors toured the mine site in organised tours.Records of these are documented in the mine site communityconsultation database.

A successful desktop exercise and a full mock emergency wereconducted to test our Crisis Management Plan.

The General Manager addressed employees on matters includingsafety on a regular basis. Review groups discussed work proceduresand made recommendations for change.

Ongoing participation in Minerals Council of Australia MINEX awardevaluation process of various mining operations assisted inbenchmarking our Safety Management System.

Healthy Bodies programme implemented and monthly “Healthwise”magazine sent to employees’ homes.

Feasibility study underway for a joint venture with another miningcompany for the establishment of a gym and physiotherapist facilityfor mine workers and the general community.

2002 REPORT PRIORIT IES OUTCOMES

conducted during the year as required.Re-certification is required every18 months.

Training was conducted for managers,senior supervisors and health and safetycommittee representatives in root causeanalysis designed to help efficientlyand successfully analyse incidents andaccidents by identifying causal factors anddeveloping effective improvements toprevent recurrence. Twenty-four of ouremployees attended this training duringthe year.

An occupational first aid course wasconducted in December 2002 for sevenmine rescue members.

Twenty-five employees completed asenior first aid course during the year.

Emergency

To refine our Crisis Management Plan,a development plan was implemented toinvolve our stakeholders. A communicationmanagement firm was contracted tocomplete the project which involvedoperations familiarisation, review ofexisting plans and identification ofpotential crisis situations, updating ourCrisis Management Manual and trainingof the crisis management team in aspectsof the manual and dealing with the media.The next step was to conduct a desktopscenario to test the crisis managementteam’s ability to communicate and dealwith media interviews. A full debrief washeld and opportunities for improvementwere identified. A full mock emergency

exercise was then conducted to test ouron-site emergency response and crisismanagement procedures. It also includeda full response from external agencies,for example, the Queensland Police andAmbulance Service, local hospital andthe Department of Natural Resourcesand Mines. The exercise also tested thecommunication process between ourBlackwater site, our Brisbane office andWesfarmers Energy and WesfarmersLimited in Perth. A debrief and fullreport was received. A joint discussionpaper was presented by our consultantsand us to the Coal Mining Conference inTownsville in August 2003 detailing ourcrisis management development process.

The members of the fire rescue teamtrained during the year to ensurecompetency in fire and rescue skills.

A six member team competed in theAustralian National Road Accident RescueChallenge at Toowoomba, Queensland, inMay 2003 with the team placing first inthe rapid extrication event and winningthe best technical team award. Our teamplaced second overall.

A seven member mines rescue competitionteam competed in the QueenslandOpen Cut Mines Rescue Competition inOctober 2002. The competition wasattended by the major coal mines inQueensland and a representative team fromNew South Wales. Our team receivedthe runners-up trophy and won the roadaccident rescue and height rescue exercises.

COMPLIANCE

Environmental

We maintained our QueenslandEnvironmental Protection Agency (EPA)performance category two status. Lastyear we incorrectly reported that we hada category one status.

Our Environmental ManagementOverview Strategy (EMOS) and Plan ofOperations (PoO) were rewritten tocomply with amended legislation. Fromthese new documents, the EnvironmentalAuthority conditions were negotiatedwith the EPA.

In July 2002, we submitted a newEMOS prepared in accordance with theEPA guidelines. The acceptance of theEMOS by the EPA was followed by arewrite of our PoO. The PoO was acceptedby the EPA in April 2003. Based on theEMOS and the PoO, our EnvironmentalAuthority conditions were negotiated.There was one breach of these conditionsduring the year when a pipeline burstallowing one megalitre of water todischarge from the mining lease into adry gully.

National Pollutant Inventory (NPI)

Our NPI return was completed andfiled with the EPA in August 2002.There was an increase in our exhaustemissions to air due to increased hoursof operation and further expansion ofour contractor pre-strip fleet.

Detailed information is available at:www.npi.gov.au.

Health

Although the statutory requirement is fortests at least every five years, our employeesand permanent contractors are requiredto have a Coal Board Medical (CBM) atleast every three years.

Each new employee or permanentcontractor who does not have a currentCBM is required to undertake theassessment. An annual health review isalso a requirement for our employees andpermanent contractors.

Non-permanent contractors are requiredto have a health assessment as part of theinduction process.

Safety

An internal audit of the SafetyManagement System (SMS) wasconducted in December 2002. The 31elements of our SMS are audited againstperformance criteria. The SMS internalaudits are required to be conducted everytwo years. A total of 97 corrective action

Curragh


Auto Electrician Wayne Coleman andDiesel Fitter Rob Shanks discuss Curragh’sSafety Management System manual.

requests were raised as a result of theaudit and are being actioned.

External audits of the SMS and the 84Standard Operating Procedures (SOPs)are conducted every five years with anaudit due in 2006.

We measure compliance with our alcoholpolicy through testing of all peopleentering the mine site on a particularshift. This shift is randomly nominatedby the General Manager. Personnelattending site induction are also breath-tested. A total of 21,468 tests wereconducted with 97 positive tests.

Everyone attending site induction and allthose completing CBMs are drug-tested.Random drug testing is carried out via acomputer-generated list. Ten tests pernominated shift are conducted with theshifts being selected by the GeneralManager. The total number of tests carriedout during the year at site inductions was1,020, with eight positive tests recorded.A total of 56 random drug tests wereconducted and three were positive.

Those people returning positive resultsto either alcohol or drugs screeningwere subject to disciplinary procedureswhich range from counselling to,ultimately, dismissal as per our SMS.

Special projects, such as shutdowns, mayhave additional alcohol and drug screening.


All environmental approvals that arerequired to operate the mine are held andare current. These are administered by theEnvironmental Protection Agency andthe Department of Natural Resourcesand Mines.

MANAGEMENT SYSTEMS


Approval of our EMS submitted to theEPA in November 2000 has been delayeddue to changes in relevant legislation.


The SMS and SOPs have had somechanges made as a result of the internalaudit conducted in December 2002.The SMS and SOPs are “living”documents – that is, changes are made asissues are identified by audit proceduresand employee consultative and riskassessment processes.

Other/internal management systems

The SiteSafe database allows immediaterecording of incident and injury data.

The database is accessed through theIntranet where standard forms arecompleted on-line by the person recordingthe incident or, in the case of an injury, bythe site paramedic. Relevant informationfor each incident and accident is recordedand immediately stored in the database.

Statistical information can be retrievedfrom the database to indicate trends andproblem areas.

We entered the Mineral Council ofAustralia’s 2002 MINEX awards butunfortunately did not achieve award status.The MINEX awards process providedexcellent feedback which will allow us tomake improvements. Our senior healthand safety coordinator is a member of the2003 MINEX awards evaluation team.Our experience in this evaluation processwill assist us in our ongoing improvementand benchmarking process.

Our WorkCover-accredited injury andillness rehabilitation policy andrehabilitation programme arecommunicated to new employees atinduction. Assistance is provided toemployees who have either work or non-work related injuries or illnesses.

POLICY

Our Environmental Policy (set out onpage 21) is displayed prominently inrelevant places. The policy is reviewedeach year.

Our Health and Safety Policy is distributedto personnel, including contractors, atinduction and is displayed in prominentplaces. The policy is reviewed in Juneeach year.

Curragh

17

Fitter Operator Peter Skillingtonworking in a confined space at themine’s Coal Processing Plant.

Site Management AccountantKathleen O’Dowd being breath testedbefore entering the mine site as part ofCurragh’s random test programme toensure compliance with its alcohol policy.

Environmental


Dust

Our dust monitoring results show thatwe did not exceed the levels prescribed inthe Environmental Protection Policy (Air).The region experienced severe droughtconditions and severe dust storms duringthe year. We did receive a request from theEPA to supply all dust data for the pastfive years as they had a complaint froma person concerned with dust migratingfrom our mining lease. The EPA did notpursue the matter after they reviewed ourdata. Around this time, severe windconditions and a dust storm blanketedthe whole of the central Queenslandregion. An extra five dust monitoringsites along our boundaries down-wind ofour operations were established duringthe year to record atmospheric dust levelsin those areas and results were below theprescribed levels.


A total of 488,439 tonnes of greenhousegases were emitted from the mine siteoperations including 235,047 tonnes offugitive emissions. Diesel-poweredequipment on site contributed 23.92 percent of the emissions, electricity 74.74per cent and blasting 1.34 per cent(see Figure 1).

Four of our five coal hauler units have beenre-powered and are consuming ten per centless fuel per hour, resulting in a greenhousegas emission reduction of approximately677 tonnes this year. The remaining coalhauler will be re-powered next year andwe expect to further reduce ourgreenhouse gas emissions.

Curragh


Last year we incorrectly calculated andreported our greenhouse gas emissions as52,785 tonnes. The actual number,including an estimated 172,200 tonnes offugitive emissions from mining operations,was about 384,000 tonnes of carbondioxide equivalent.

Noise

Blast noise levels and ground vibrationcaused by overburden blasting did notexceed EPA limits or our EnvironmentalAuthority conditions. All monitoringrecords are retained in the environmentaldatabase.

WATER

Water consumption

The Blackwater area is currentlyexperiencing a severe drought. Using databased on 80 years of recordings from theBureau of Meteorology, we have had only45 per cent of the average annual rainfallin each of the past two calendar years.

Our purchased water volume increasedon last year’s figure due to the increasedamount of coal being put through thecoal preparation plant and continuingdrought conditions (see Figure 2).

Surface and groundwater

We monitor water flows in BlackwaterCreek both upstream and downstreamof our operations whenever there is a flow in the creek.

No water is drawn from groundwater bores.

FIGURE 2: WATER USAGE (MEGALITRES)

00/01 01/02 02/03

● Purchased

1,637 2,408 3,026

● Recycled

2,193 3,263 3,313

● Allocation

1,500 2,200 3,200

FIGURE 1: CO2-e EMISSIONS (TONNES)

02/03

● Diesel 60,624

● Electricity 189,377

● Explosives 3,390

● Fugitive 235,047

Kevin Smith monitoring water qualityat the Mackenzie River, which bordersthe new Curragh North deposit.

Discharges to surface and groundwater

There were no discharges to groundwater.We experienced an unauthorised waterdischarge from the mine site ofapproximately one megalitre of salinewater to a dry creek during the monthof June 2003.

Reuse

Drought conditions have impacted onour mine site storage dams with themajority of dams being dry for the wholeyear. Notwithstanding this, recycling ofwater was a priority and all availablewater in any of the mine site retentiondams was pumped back to the coalpreparation plant for reuse.

WASTE

Solid waste

We continued to recycle our hydrocarbonsolid waste from the draglines to aregistered facility. Recycled solid wastetotalled 91 per cent.

Liquid waste

All liquid waste is reused or recycled.

Recycling

Engine coolant continues to be re-filteredand reused in the mobile equipmentworkshop when components are changedon major equipment. Recovery of scrapsteel from the mine site totalled 777 tonnes.We continue to reuse hydrocarbon wasteas a lubricant at the coal preparation plantand on dragline dump ropes (see Figures6 and 7). Reuse of waste oil as a lubricantat the coal preparation plant decreased37 per cent on last year (see Figure 5).In addition to this, a further 202,000litres was taken off-site for recycling(see Figure 4).

The general mine site waste continuesto be recycled at a registered facility.General waste recycling figures indicatethat we are recycling around 50 per centof our waste. This percentage is similarto last year’s (see Figure 3). All regulatedwaste (as defined by the QueenslandEnvironmental Protection Act) is takenoff-site to licensed facilities.

Curragh


FIGURE 6: RECOVERED HYDROCARBONSFROM DRAGLINES (KILOGRAMS)

00/01 01/02 02/03

● Total grease and open gear lube used

102,058 101,028 93,085

● Total grease and open gear lube recovered

87,120 118,965 84,930

FIGURE 3: GENERAL WASTE VOLUMES(CUBIC METRES)

00/01 01/02 02/03

● Recycled

878.5 1,118 1,139.2

● General

772 1,167 1,078.9

FIGURE 4: WASTE OILEXPORTED OFF-SITE (L ITRES)

00/01 01/02 02/03

Waste oil

0 28,000 202,000

FIGURE 5: VOLUMES OFWASTE OIL REUSED ONSITE (L ITRES)

00/01 01/02 02/03

Waste oil

426,259 483,806 304,421

FIGURE 7: REWORKED DUMP ROPELUBE VOLUMES (KILOGRAMS)

00/01 01/02 02/03

Series 1

11,480 7,995 4,100

ENVIRONMENTAL POLICY

Curragh Queensland Mining Pty Ltd will manage its operation so that theenvironmental impact on the Curragh mining leases and surrounding areas isminimised. In order to achieve this goal we will:

• Comply with relevant Environmental Acts, Regulations and Standards;

• Ensure that best practice technology is used to develop systems withinour Environmental Management Overview Strategy (EMOS) and Plan ofOperations (PoO);

• Provide the necessary resources to allow us to meet our EMOS andPoO commitments;

• Educate our workforce in all relevant environmental matters to achieveour commitments;

• Select contractors who have demonstrated capability in working to ourstandards;

• Identify areas with potential for non-compliance and minimise the riskthrough sound management practices;

• Maintain an ‘open book’ approach in our documentation of environmentalmatters and self-report any instances of non-compliance to therelevant authority;

• Regularly communicate with our neighbours to inform them about themine’s operation; and

• Continually improve our environmental management performance inorder to reach a Category 1 compliance rating.

I require all employees, contractors and visitors to comply with the relevantprocedures and practices set out under this policy.

Murray BaileyGeneral Manager

April 2002


Environmental management plans are inplace for each of our notifiable activitiesso that further possible contaminationis minimised.

Rehabilitation

Sixty hectares of rehabilitation wascompleted during the year as required byour Environmental Authority conditions.Seeding of last year’s rehabilitated areawas completed after a significant rainevent that put enough moisture into theground, but no follow up rain occurredand seed germination was minimal.Rehabilitation of disturbed areascommenced in 1988 and to date 800hectares have been rehabilitated to acare and maintenance level.

RESOURCE USE

Energy

Our total energy consumption was668 gigajoules.

Fuel

The re-powering of our coal haulage unitscontinued with only one of our five unitsstill to be re-powered. Fuel use has beenrecorded and shows a reduction of ten percent for the re-powered units. Diesel fueluse increased from 17,135 kilolitres to20,962 kilolitres due to higher levels ofproduction. Our contractor truck andshovel overburden fleet increasedproduction by removing an extra fivemillion cubic metres of overburden thanthe previous year.

Electricity

Total electricity consumption was185,664 MwH, up from 166,956 MwHlast year.

Safetyand health

LOST T IME

Our Lost Time Injury Frequency Rate(LTIFR) was 1.0 (the same as last year)and, during the year, there was one LTI.Our Average Time Lost Rate, whichprovides a measure of the severity of suchinjuries, was 21 (compared with 29 lastyear). These statistics include permanentcontractor hours and injuries.

Safety statistics are reported to seniormanagement monthly and to our boardevery two months.

LAND

Flora and fauna

Flora studies have been undertaken onselected sections of the rehabilitated areasfor the study of species emergence. Thisstudy was initiated by us and undertakenby the University of Queensland’s Centrefor Mined Land Rehabilitation. It willcontinue over a period of four years.

Contamination

Contaminated sites continue to bemanaged in accordance with theEnvironmental Protection Act and thisincludes regular monitoring. Our borehole monitoring results indicate that thereis no increase of environmental harmfrom the sites. Our contaminated sitesinclude old waste dumps covered by spoil.The monitoring included ground waterquality down stream of these sites andresults are compared against previous resultsand the baseline ground water quality.

Curragh

One of the coal haulers which hasbeen re-powered to reduce fueluse and lower exhaust emissions.

Curragh


and crisis management procedures.The debrief and subsequent reportoutlined areas for improvement whichwill be incorporated into both theEmergency Response Procedure andCrisis Management Plan.


The LTI resulted in a workerscompensation claim and there were otherclaims relating to medical treatmentinjuries. There were a total of four workerscompensation claims reported, relating tooccurrences during the year, comparedwith five last year. We are pleased thatour claim numbers continue to reduce.

HAZARD AND RISK

Programmes

We have a method by which hazardsare identified and assessed for risk andappropriate control mechanisms are putin place to ensure the health and safety ofpersons at the mine. Appropriate trainingis provided so that employees have thenecessary skills and knowledge to identifyhazards and conduct risk assessments.

Emergency response

As outlined earlier in this report, a fullmock emergency exercise was conductedto test our on-site emergency response

One of our Priorities for the Future last year was to promote further education ofhealth and fitness amongst our employees and their families.

In March 2003 we introduced the “Healthy Bodies” programme. This health and fitnessmanagement programme provides employees with the knowledge, support andencouragement to commit to improving their health through improved eating, exerciseand positive lifestyle changes.

After an introduction session, employees were asked to nominate to attend theprogramme, which was conducted during working hours.

The programme consisted of six one-hour weekly sessions covering best food choices,exercise strategies, fat, fibre and alcohol, stress and fatigue management.

On average, 69 people attended over the six-week period of the “Healthy Bodies” initiative.

Assessments using the most up-to-date technology to assess weight, body fatand muscle mass were performed in the first and sixth weeks, as were waistmeasurement and blood pressure checks.

At the conclusion of the six weeks, positive results had been achieved by manyof the participants. Medical checks were also encouraged with several medicalconditions being highlighted.

Follow up sessions will be conducted at week 12 and week 18 and a fortnightlynewsletter is being compiled to assist in maintaining focus.

Participants were presented with a pedometer and logbook as motivational tools.

We will be holding additional sessions over the next 12 months to check the results ofthe programme and to assess any other health and fitness benefits. The assessment will bedone jointly with our consultant and our health and safety committee.

CASE STUDYMaking

a difference...

Ken Holdaway, an industrialparamedic with the QueenslandAmbulance Service, doing ahealth assessment onStephanie Symonds from themine’s maintenance area.

Members of the Curragh mine rescueteam competing at the AustralianNational Road Accident RescueChallenge at Toowoomba, Queensland.

Curragh



The computer database used to registerchemicals is Chem Alert. Our employeesand contractors are advised about thesystem at induction. The database isaccessible via our Intranet and is updatedwhen chemicals are either approved foruse on site or removed from site.

A dangerous goods handling course wasconducted for warehouse personnel toreinforce their knowledge of obligationsfor the handling, storage and transportof such items.

Risk assessment

A new risk assessment form has beendeveloped and is available across themine site. The form is designed for easeof use and is used where necessary to doa risk assessment on a task, or to performrisk assessments on SOPs. It accordswith AS 4360.

Employee wellbeing

A “Healthy Bodies” programme has beenintroduced to promote a healthy lifestyle.This programme is discussed further inour Case Study on page 21.

An influenza inoculation programmewas again offered to employees with atotal of 91 employees having the injections.This programme was carried out by ournominated medical adviser who alsovisited our site during the year to consultwith our employees and management.

Occupational therapy services to the minehave increased from twice a month to anaverage of four times. The occupationaltherapist reviews both work and non-workrelated sprains and strains as well asassessing workstations and tasks.

Community

STAKEHOLDERS

Our stakeholders include our employees,contractors, visitors, the local Blackwatercommunity, various government agenciesand the shareholders of our parentcompany, Wesfarmers Limited.

We successfully negotiated with theindigenous traditional owners a CulturalHeritage Investigation ManagementAgreement (CHIMA). This CHIMA wasdeveloped to cover all of our northerndevelopment areas. A full Cultural HeritageManagement Plan will be developedunder the CHIMA.

A community consultation plan wasdeveloped for the site and this forms partof our EMOS. Numerous consultationmeetings with stakeholders wereundertaken.

Our continuation of site tours forinterested school groups and universitiesresulted in 211 visitors being escortedthrough our mine during the year.We met with all adjoining landholders tokeep them informed of site operationsand future expansion plans.

FEEDBACK/COMPLAINTS

No complaints were received at the minesite. The EPA received a complaint whichis outlined under the “Dust” heading onpage 18.


Our site management personnel continueto liaise with the relevant authorities whichinclude the EPA and the Department ofNatural Resources and Mines for minesite operations. Presentations of our minesite operations were made to industryrepresentatives at EPA workshops.

COMMUNICATION

Our Intranet site can be used by employeesto access the SMS and SOPs. Job safetyanalysis, work instructions and workprocedures will be added upon completion.Safety forms taken from the SMS have

Cultural Heritage MonitorsTrevor Blair and SeanMaloney at Curragh North.

Store Clerk Ray Steinhardtselecting a product in thedangerous goods storage area.


Implementation of an Environmental Management System.

Achieve zero LTIs.

Upgrade our induction training process for new employees, contractors and visitors.

Continue consulting with our employees to continually review and monitor theeffectiveness of our Safety Management System.

Benchmark our Safety Management System with other industry leaders withthe view to continually improving our system.

Review our contractor management procedures and develop partnerships.

Promote health and safety awareness to our employees and the community.

Further development of our Cultural Heritage Management Plan for all our operations.

Further development of our plans to integrate the northern resources into ourexisting operations.

Upgrade our environmental database.


also been added to the Intranet for easeof access.

Information for the “Healthy Bodies”programme is accessible on our Intranetsite to assist in maintaining employeefocus. Employees can also access the“Healthy Bodies” website to requestinformation directly from the consultants.

Newsletters and reports

Monthly health and lifestyle brochuresare sent to employees’ homes.

Our milestones, statistics and relevantinformation are passed on to employeesby the General Manager at safetymeetings and on notice boards.

Participants in the “Healthy Bodies”programme now receive a newsletter toreinforce the virtues of a healthy lifestyle

LIAISON GROUPS

We continue to be a corporate memberof the Fitzroy Basin Association and theCentral Queensland Mine RehabilitationGroup.

COMMUNITY SUPPORT

During the year we continued to supportover 45 community organisations andevents. These included health, sporting,education, community and cultural events.

RESEARCH

We continue to support several industryresearches through the Australian CoalAssociation Research Program. We haveparticipated in the erosion rehabilitationproject for the past 10 years and we arecommitted to continuing this project withongoing financial and in-kind support.

Curragh


Premier CoalWe mine coal at the Premier open cut in Collie, about 200 kilometres south

of Perth in Western Australia. During the year we sold about 3.3 million tonnes

of low sulphur, low ash steaming coal, primarily to major power generating

stations. We also supply coal to a variety of industrial and agricultural

applications. We employ about 280 people engaged in overburden removal,

coal production, plant maintenance and site rehabilitation. (This report does

not cover the activities of the Cardinal Contractors earthmoving business

which was sold in November 2003).

Our three main environmental issues are rehabilitation of disturbed land,greenhouse gas emissions and ensuring compliance with our legal obligations.

We rehabilitated 186.8 hectares of land this year and only 21.3 hectareswas cleared.

Overall net greenhouse gas emissions are down 14.2 per cent this year,but they are up on a per unit of production basis.

We continued implementing our EMS with additional training andauditing of procedures leading to ISO14001 certification this year.

Our two main safety issues are workplace accidents and Fitness for Work.

A very big improvement in our safety performance was a highlight with noLost Time Injuries (LTI) this year, contributing to a record 419 days withoutan LTI to the end of the year. This has bettered our previous record of177 LTI-free days. The number of lost time injuries dropped from four lastyear to zero and our Lost Time Injury Frequency Rate (LTIFR) fell from6.4 last year to zero.

Our safety systems were highly rated in Department of Industry andResources audits.

1 July 98 - 30 June 03 (as at 30 September 03)* Contractors included



99 00 01 02 03

29.5 17.1 20.8 6.4 0

99 00 01 02 03

64 71 60 45 46

Premier Coal

Apprentice Plant MechanicMatt Naysmith isolating atruck with a danger tag.

Businessmanagement

TRAINING

Environmental

Our employees have undergone a five-hour environmental awareness trainingprogramme and have done otherjob-specific environmental training.

Other environmental training is conductedat induction of new employees, visitorsand contractors.

Further training in procedures wasconducted during the year and a scheduleestablished to continue this process.

Health

Managing employee health issues is donethrough health promotion and injurymanagement programmes. Due to ouraged workforce profile, we target straininjury prevention by providing educationand support in the prevention of musco-skeletal conditions.

Training on strain injury preventionwas conducted for apprentices in themaintenance department including varioustopics such as spine physiology, care ofthe musco-skeletal system and correctmanual handling techniques. This trainingincluded assessment of manual handlingrisks and implementing controls.

We continued to run a monthlyphysiotherapy clinic as part of our injurymanagement programme. This programmeis aimed at musco-skeletal injuries incurredat work and off-site, ensuring these injuriesare not aggravated by current activity.Assistance such as task modification andstrengthening exercises are advised.

First aid training is available to all ouremployees, aimed at ensuring coverage ofpersonnel with first aid knowledge whocan apply first-response techniques in anemergency. St John Ambulance workplacefirst aid training courses are conducted asneeded. Twenty-one employees (sevenper cent of the total workforce) havecompleted these courses.

We participated in “Healthy Heart Week”with 35 employees (11.6 per cent of the

total workforce) volunteering for healthyheart lifestyle assessment. The weekincluded fitness and nutrition promotionand a lunch break quiz that raised moneyfor National Heart Foundation researchinto heart disease.

Free influenza shots were offered toemployees. Fifty-three people (18 per centof the workforce) had the injections withbenefits for both the individuals involvedand our operations.

Safety

In May 2003 we achieved a record of oneyear without a Lost Time Injury. This isa significant milestone and has continuedto the end of the year. The success hasbeen shared and communicated amongstour employees and the local community.Our performance is significant also whencompared to industry standards. The coalindustry has a Lost Time Injury FrequencyRate in Western Australia of 17.4 and anational rate of 16 (based on figurespublished for the 2002 year).

We commenced a change towardsstandardisation of our clothing to include

Premier Coal


We fully complied with licence conditions and management planscovering blasting, water, dust, forest management, clearing andrehabilitation except for one blast (in 547) outside of compliance.Compliance with noise requirements remains difficult to quantify.

We rehabilitated 186.8 hectares and cleared 21.3 hectares.

We continued to work with the community and government onthe establishment of Western 5B and Western 2 areas asrecreation complexes.

We established a Community Consultation Group to focus oncommunity issues and improve communication.

We achieved ISO 14001 certification of our EnvironmentalManagement System (EMS).

Net greenhouse gas emissions were down 14.2 per cent, but on aper unit production basis were up 5.8 per cent to 2.74kg of carbondioxide equivalent per bank cubic metre equivalent of production.

We had zero Lost Time Injuries (LTIs), 35 medical treatment injuriesand 62 first aid cases.

A partial review of our safety standards and auditing was conducted.

Implementation of the proposed Fitness for Work policy isprogressing through a consultative group comprising management,employee and union representatives.

Full environmental compliance.

Annual rehabilitation of at least the equivalent area of land weclear for mining.

To provide value-added rehabilitation and mine closure outcomes.

Ensure focus on any community issues or concerns with our operations.

To complete ISO14001 certification of our EMS.

Further reduction in greenhouse gas emissions.

A target of zero accidents.

Review our safety standards and auditing.

Implement a Fitness for Work policy.

02 032002 REPORT PRIORIT IES OUTCOMES

reflective panels for safety at night andlong sleeves and trousers to reduce theincidence of skin damage from excessivesun exposure. All employees will berequired to wear the new clothing whichis being phased in for completion in theforthcoming year.

Our safety and health representativesattended a Department of Industry andResources (DoIR) “Worksafe 2003”conference on the future directions thegovernment is taking regardingoccupational safety and health, particularlyrationalisation to one overarching pieceof legislation to include mining andgeneral industry.

We submitted an application for our safetymanagement systems to be peer reviewedunder the Minerals Council of Australia’sMining Safety Excellence AwardsMINEX 2002. A report was received inOctober 2002 and has been communicatedback to the workforce. We did not receivean award from our submission, but manypositive aspects were noted, includingcommunication with employees and thetraining/health programmes implemented.Some opportunities for improvementwere suggested in the areas of systemdevelopment and visible leadership.

Our safety and health representativesattended a workshop at Bunbury inWestern Australia conducted by theChamber of Minerals and Energyspecifically aimed at improving the skillsand networking of the south-west region’ssafety and health representatives. Feedbackfrom the workshop was excellent andanother is planned next year.

Our Fitness for Work implementation iscontinuing in consultation with ouremployees and union representatives.We have commenced education on fatigue,lifestyle and shiftwork, as well as alcoholand other drugs. An agreed policy andprogramme commencement is expectedtowards the end of calendar 2003. Fatigueand our ageing workforce has promptedan increase in health promotion activities.

Emergency

Mine rescue training was conductedon 10 occasions involving rescue fromheight and depth, fire fighting, hazardouschemical response, first aid, vehicleextrication and confined space rescue.

A monthly mine rescue training regime wasconducted to ensure skills were maintained.A training template was developed whichincluded audits of all our emergencyequipment and our readiness.

A programme of emergency skills trainingwith other local companies continued.The purpose of this training was to trainnew industrial emergency team volunteersto a basic set of competencies aimed atreducing time and costs and developingcommon basic skills useful for mutual aid.

A crisis management scenario wasconducted involving a collision betweena light vehicle and a large haulage water

truck with three people “injured”. On-siteand local emergency preparedness andresponse were tested. Overall the practicewent to plan with a few minor items forimprovement raised in thepost-incident briefings.

We have improved our procedures forcalling an ambulance with a clearinstruction being issued to err on the sideof caution and call for one if it may beneeded, particularly for any medicalcondition that could worsen if the patientwere transported to medical aid byother means.

COMPLIANCE

Environmental

We again fully complied with licenceconditions and management plans coveringwater, dust, forest management, clearingand rehabilitation except for one blast, outof a total of 547, going beyond the limit.

The management of noise remained a keyfocus area with compliance still difficultto quantify due to the nature of noise andthe numerous other sources within thecoal-mining basin. The application tomodify the existing noise allowanceprogressed significantly with theDepartment of Environment (DoE) goingout to public consultation. We expect theissue to be resolved in the near future.


We submitted our fourth NPI report foryear ending 30 June 2002. Levels ofpollutants decreased in line with reducedproduction levels and the consequentreduction in energy use. Most emissions

Premier Coal


Shot firer Mark Pagetclosing off a blast pattern.

were either from the use of diesel or dustgenerated from wind, vehicle andoverburden movement, coal processingand blasting.

Detailed information is available at:www.npi.gov.au.

Health

In accordance with regulatoryrequirements, we continued our MineWorkers Health Surveillance programmeand renewed certification of hearingtesting equipment.

All existing and new mine rescue teammembers were medically and physicallyassessed and considered fit to continueas team members to the requirements ofthe DoIR.

An inspector from the Western AustralianHealth Department attended the site toverify our compliance with the conditionsof our poisons licence which is required toissue medications. No issues were raised,as we hold only minor medications forfirst aid treatment and all dispensaryprotocols were found to be in order.

Safety

We maintain communication andconsultation through 10 elected safetyand health representatives and theoccupational health and safety committee.

We operate under the Mines Safety andInspection Act 1994, and the MinesSafety and Inspection Regulations 1995.

We were audited on three occasions byinspectors from the DoIR MiningOperations Divisions. The audit resultswere “Electrical safety management” (84 per cent); “Emergency managementplan” (85 per cent); “Explosives storage”(90 per cent); and “Explosives usage” (95 per cent). We commisioned anengineering consultant to review ourconformance to AS 3007.5-1987“Electrical installations - Surface minesand associated processing plant -Operating requirements”. Our emergencymanagement plan has been reviewedand improved to incorporate our crisismanagement procedures. Explosives storageand usage issues have been improvedwith revised safe working procedures andrecent training of employees by ourexplosives supplier.


Under the Explosives and DangerousGoods Act 1961 we maintain a singlelicence for our storage of hazardousmaterials and dangerous goods. We havea comprehensive emergency managementplan as required by this licence.

We maintain a compliance register ofstatutory approvals, appointments andlicences for specific functions undervarious legislation covering our operations.

MANAGEMENT SYSTEMS


We have a certified ISO14001-standardEMS which is designed to identify andmanage any potential risks throughprocedures for key work activities andmonitoring requirements.

The EMS covers our government-approvedenvironmental management programmeand extensive legislative and licenceconditions. During the year, trainingwas conducted on key procedures and aschedule for ongoing training was devised.In addition, auditing of environmentalprocedures was undertaken and an auditschedule was devised for procedures thatare only used seasonally.

We are committed to continued integrationof environmental management with allbusiness and operating managementsystems. With this, and also simplificationin mind, the EMS will undergo a detailedupgrade in the coming year.

As part of our ongoing commitment, weare a signatory to the Australian MineralsIndustry Code for EnvironmentalManagement, the Australian GreenhouseChallenge and the Western AustralianCleaner Production Statement.

The independent triennial complianceaudit for the Minerals Industry Code wasconducted this year. Figure 1 showsthat we performed at the highest averagelevel for all signatories to the Code.


Our SMS is the RiskMap SafetyManagement System made up of 67standards.

Inspection systems have been developedand form part of the weekly routines ofour operations departments.

POLICY

Our Safety and Health Policy was reviewedand updated. Environmental managementis one of our highest priorities. We promotethe development of policies, programmesand procedures for conducting operationsin an environmentally-sound manner.Our environmental policy (see page 31)sets our management agenda through abroad statement of commitments andprinciples. It is reviewed regularly toensure currency.

Our guiding policy principle is to takeresponsibility for minimising the impactof our operations on the environment.We acknowledge our accountability toemployees, shareholders, governmentand the public. Performance informationis made available to government andthe public.

Premier Coal


FIGURE 1: AUSTRALIAN MINERALS INDUSTRY CODE PRINCIPLES IMPLEMENTATIONSURVEY 2002 BENCHMAKING WESFARMERS PREMIER COAL VERSUS ALL SIGNATORIES

Implementation as a %0 10 20 30 40 50 60 70 80 90 100

Principle 1 - Accepting environmental responsibility

Principle 2 - Strengthening community relationships

Principle 3 - Integrating environmental management

Principle 4 - Minimising environmental impacts

Principle 5 - Encouraging responsible production/uses

Principle 6 - Continuous environmental improvement

Principle 7 - Communicating environmental performance

Overall

● Wesfarmers Premier Coal ● Low 2002 ● Median 2002 ● High 2002

The local Aboriginal nursery, Ngalang Boodja, is the first such accredited nurseryin Western Australia. We are proud to have helped development of the venture byunderwriting a works programme at the Western 5 rehabilitation site. We are usingthe nursery to propagate seedlings and conduct in-fill planting. The Ngalang Boodjaemployees are now undertaking horticultural studies, and the group’s leader isundertaking a horticultural management traineeship. We plan for the group to collectlocal provenance seeds from our rehabilitation areas to help meet our future needsand also provide weed control services.

Recent rehabilitation work for the Water Corporation, in the new Harvey Dam region,included the planting of nearly 240,000 seedlings, some of which were propagatedby the nursery.

The nursery has been operating since 2001 and has six permanent and twotemporary employees.

CASE STUDY

Premier Coal


FIGURE 2: DUST MONITORING (MICROGM/M3)

94-95 95-96 96-97 97-98 98-99 99-00 00-01 01-02 02-03

● Daily average (allowable 90microgm/m3 ● )

42.9 52.8 34.3 48 28.7 27.6 39.6 29.9 33.2

● Daily max (allowable 260microgm/m3 ● )

93.7 97.1 58.4 112.2 69.3 47.9 162.3 63 59

Environmental


Dust

There were no dust complaints this year.

Dust at our mine is mainly generated onroads, dumps and cleared areas and isonly a potential problem during the driermonths of the year. Monitoring is onlynecessary at these times and annualisedresults are thus exaggerated, especially sincethey also include dust from all sources.

Dust levels were well within licenceconditions with the daily average level atnearby Buckingham up slightly on last yearand the daily maximum down slightly(see Figure 2). Management strategiesincluded minimised clearing and rapidrehabilitation when possible, tar sealingmajor road arteries and application ofwater to suppress dust on roads andoperational areas.

Odour

Spontaneous combustion of coal occursperiodically in the mine and can cause

an unpleasant odour but there were nocomplaints this year. An improvedmonitoring and reporting system ofspontaneous combustion is underdevelopment as a result of the study intothis issue referred to last year.


We are a participant in the CommonwealthGreenhouse Challenge Programme andhave a signed Cooperative Agreementthrough to 2005.

Our greenhouse emissions are largely dueto use of diesel fuel and electricity with asmaller contribution from spontaneouscombustion of coal. Collie coal has noassociated methane emissions. During theyear we conducted a detailed greenhouseemissions testing programme using borecore analyses. This work again confirmedthat there are no methane emissions fromour coal. The sources of emissions can beseen in Figure 3.

Net carbon dioxide (CO2) emissions perbank cubic metre equivalent (bcmeq)were down 49 per cent from 1994 levels,an increase of 5.8 per cent on 2002.Net emissions were 62,736 tonnes ofCO2, down 14.2 per cent on last yeardue to lower production levels. This year,emissions increased from 2.59 kilogramsper bcmeq to 2.74 kilograms per bcmeq(up 5.8 per cent) due to efficiency lossesassociated with the lower production level.

The diesel fuel additive system, introducedin November 2001, has continued tosupport improved fuel consumption(in litres/hour) with a reduction of6.7 per cent this year building on a nine


Ngalang Boodja nurserymentree planting near the Western5B Collie lakes project.

per cent reduction last year. This equatesto a reduction in emissions of 1,290tonnes of CO2 this year.

Noise

As mentioned earlier in this report themanagement of noise remained a key focusarea. Consultation continues with theDoE and the community. A communityplan to progress our application to modifythe existing noise allowance has resultedin a consultation bulletin being publishedby the department. A variation to ourexisting noise conditions will enable usto clearly operate within requirements.

Our equipment noise levels have notincreased, even though the operationshave moved closer to our neighboursat Buckingham.

Blasting improvement strategies arecontinuing to deliver a strong performanceas we have been able to maintain a lowtriggered blasting level average of104dB(L), with only one blast exceedingthe legal limit of 125dB(L) (see Figures 4and 5).

The highest recorded blast was 126.2dB(L)while 98.9 per cent of the blasts werebelow 115dB(L). There was an eightper cent decrease in the total number ofblasts to 547 and the number of blastsnot triggering the monitor, set to triggerat 115dB(L), decreased by 10 per cent.The blasts triggering the monitor werelargely due to the concentration of

Premier Coal


FIGURE 5: PREMIER MINE BLASTING2002 - 2003

Buckingham Griggs

<125dBL 99.8% 100%

<120dBL 99.6% 100%

<115dBL 98.9% 99.6%

Ave dBL when triggered 104 97

Total blasts 547 547

Not triggered 353 534

FIGURE 3: TOTAL CO 2 EMISSIONSBY SOURCE (TONNES)

02/03

● Electricity 23,220.3

● LPG 222.8

● Petrol 159.1

● Diesel 42,333.5

● Spontaneous combustion 2,124.0

● Explosives 312.9

FIGURE 4: PREMIER MINE BLASTING BUCKINGHAM MONITOR

95 96 97 98 99 00 01 02 03

Total Numer 70 165 262 271 261 349 477 596 547

Not triggered 27 49 149 191 197 297 299 443 353

Number <115 64 149 242 261 254 343 455 586 541

% <115dBL 91.4 90.3 92.4 96.3 97.3 98.3 95.4 98.3 98.9

Average dBL 110 106 106 106 101 102 102 101 104

operations, in the early part of the year,at the eastern end of Pit 1 which is closerto residents and the monitor.

There were five complaints for blastingon our site for blast levels ranging from107dB(L) to 117.5dB(L).

Independent building condition surveysare on offer to all nearby neighbours,but to date no survey has attributedstructural defects to our blasting.

Plant Operator Graham Harmsuses high-pressure water toremove road dirt prior to servicing.

WATER

Dewatering is required for safe andefficient mining in the Collie Basin.All groundwater abstraction, a part ofthe dewatering process, is licensed andmonitored. During the year, 10.5 ML/daywere pumped with a total abstraction of3,821ML (see Figure 6), down 16 per centdue to bores being retired as the mineadvanced.

We are committed to making good anyloss of water suffered by our neighbours.To date, dewatering at the mine has notaffected groundwater levels near privateland or dwellings in the area.

Consumption

Part of the dewatering stream is utilisedfor dust suppression (14 per cent) andprocess water (two per cent). Processwater is used for vehicle wash down,domestic and workshop requirements.Total consumption this year was down19ML to 594ML representing 16 percent of abstraction.

We are licensed to discharge water off-siteto the environment, but again we havenot done so this year (see Figure 7).Despite the zero discharge, we continuedto monitor adjacent river systems andmaintained a computer database andmanagement system for water quality,

abstraction, discharge and regionalwaterway monitoring.

Overflow from Sump A was up 344MLto 1,089ML, due to higher rainfall andthis flow was captured in the WO-5Hvoid as part of the rapid fill programme.During the year we constructed alimestone ‘rip rap’ system which, afterinitial assessment, has successfullyreduced water acidity and iron contentof in-pit water discharge (see Figure 8).

Reuse

Apart from the water used by the miningoperation, 3,227ML was sent to localpower stations – the major users in thearea – thus helping to reduce overallabstraction in the Collie Basin.

In the maintenance and fuel bay area wehave a Dissolved Air Flotation (DAF)plant available to treat run-off and vehiclewash down waters if required. The flotationsystem was taken off-line this year as usingonly the plant’s silt traps and oil skimmersresults in a higher quality water outputthan using chemicals in the DAF plantitself. Hydrocarbons are still recoveredfrom the water and recycled with theother waste oils. The main infrastructurearea is serviced for sewage by a treatmentplant with treated water available forgarden reticulation during drier periods.

WASTE

Solid waste

Around 54 per cent of the solid generalwaste stream is disposed of as landfill,amounting to 716 cubic metres priorto compaction.

Liquid waste

Hydrocarbons are our main liquid wastesand these are captured by evacuationsystems or the DAF plant. This wasteis transported to a local recycling plantwhere it is used mainly in the productionof low-grade oils or fuel oil. A total of195,200 litres was recycled. Oil filtersare also taken for recycling.

Recycling

Our main waste streams - including usedoils, metal scraps, cardboard, paper, tyresand batteries - are recycled. Of the solidgeneral waste (not including scrap metalsand tyres) over 46 per cent was recycled,a decrease of three per cent. Recyclingefficiency for general waste improved byone per cent to 88 per cent, just short ofour target of 90 per cent.

Recycling is promoted through theprovision of bins at work for employees’domestic requirements. We alsocontinue to help drive the Collie TidyTowns Programme.

Premier Coal


FIGURE 6: WATER ABSTRACTION

94 95 96 97 98 99 00 01 02 03

Megalitres 14,876 6,513 4,737 3,265 2,384 3,085 2,681 4,411 4,547 3,821

FIGURE 7: WATER DISCHARGE

94 95 96 97 98 99 00 01 02 03

Megalitres 5,456 3,351 2,274 556 98 612 0 0 0 0

FIGURE 8: WATER QUALITY

98 99 00 01 02 03

pH 3.5 3.9 4.06 3.75 3.7 3.4

Fe 0.6 1.8 1.93 3.65 10.6 16.96

Total BCM equivalent 21.10 23.45 32.2 32.26 28.26 22.88

Environmental EngineerPeter Riley checking the oilskimmer that removes oiland grease from wash downwater prior to discharge.

LAND

Flora and fauna

Protection of surrounding forests is apriority and clearing operations areminimised as much as possible. Prior toclearing, operational areas are mappedto determine dieback boundaries.Our procedures for clearing, topsoilremoval/replacement and landrehabilitation minimise the risk ofspreading jarrah dieback. Infected soilsare kept separate for application only inareas with minimal risk of disease spread.

Disturbed land is returned to stable,compatible bushland by using localnative seeds and trees. Habitat logs areplaced in rehabilitation areas to promoterecolonisation of native fauna. Regularinspection and permanent monitoringplots identify improvement opportunitiesand ensure successful uptake.

Successful rehabilitation work requiresthe careful planning and interaction ofnumerous processes. A key to our successis correct waste rock management withmaterials likely to generate acidicconditions buried deep in the dump orbackfill profile. Final dump surfaces arecovered with a one-to-two metre blanketof inert material and spread with topsoilready for revegetation.

Rehabilitation at the closed Western5 mining area in the Cardiff Sub Basinprogressed significantly with 127 hectaresseeded, requiring shaping to slopes ofaround 10 degrees, capping, topsoilingand then installation of contour drainage.A further 30 hectares was completedat the Premier Mine site. Overallrehabilitation completed for the yearwas 187 hectares.

In-fill planting at Western 5B commencedwith seedlings being raised by the localAboriginal Ngalang Boodja Nursery.Work was delayed by the late winterrains. This project is covered in moredetail in the Case Study on page 28.

Rapid fill of the WO-5B voidrecommenced with the programmedesigned to increase safety and enhancethe final rehabilitation outcome. A further6,541ML of water were diverted raisingthe lake level by 7.35 metres. It is expectedthat an average flow in the winter of 2003will see the lake rise 4.8 metres to full– an inflow of 4,680ML. Diversion hasassisted acidity control considerably and itis expected that, when full, the void willstabilise at above 5pH – an acceptable levelfor active water sports. This programmehas reduced the natural fill time of 100

Premier Coal


FIGURE 9: REHABILITATION

90 91 92 93 94 95 96 97 98 99 00 01 02 03

● Clearing

22 44 2 36 41 211 269 129 104 156 87 99 44 21

● Rehabilitation

42 33 14 34 41 104 0 50 38 116 0 0 192 187

Faunal surveys of our rehabilitation sitesare designed to assess small to medium-sized mammals, frogs, reptiles and birds.The rehabilitation is showing goodrecolonisation providing habitat for arange of representative vertebrate species.

Research is underway to assess thesuitability of birds as bio-indicators ofrehabilitation success as well as research intosuccess factors for the rehabilitation process.

Contamination

No significant site contamination hasbeen identified.

Rehabilitation

Major open cut mining commenced in1970 and since then 2,618 hectares ofbushland have been disturbed by miningand associated activities. Revegetationcommenced in 1975 and 1,210 hectares(or 45.2 per cent of the disturbed land)have now been rehabilitated (see Figure 9).

Human Resources ClerkDenise Aitken using oneof the bins provided aspart of the HomeRecycling Programme.

ENVIRONMENTAL POLICY

Wesfarmers Premier Coal Limited is a mining company currently operating in theCollie Coal Basin of Western Australia. The Company seeks “best practice” inenvironmental management and is a signatory to the Australian Minerals IndustryCode for Environmental Management. Premier Coal accepts and respects communityand regulatory concern for the environment and shall make its Environmental Policyavailable to all interested parties, including the general public. To support itscommitment, the Company:

1. Acknowledges responsibility to minimise and manage the environmentalchanges caused by its operations as a critical business function.

2. Shall, with the encouragement, participation and support of all employees andcontractors, and through our Environmental Management System, maintainsound environmental practices, responding quickly and effectively to anyenvironmental incidents arising from Premier Coal operations.

3. Shall include environmental management and rehabilitation considerations inall stages and aspects of our mining activities.

4. Shall strive to prevent pollution, minimise waste and conserve resources as wemanage our environment. Major considerations include noise, water, dieback,clearing and burning, blasting, dust, energy, waste materials and land rehabilitation.

5. Shall set and strive to maintain standards to comply with all applicablelegal requirements, government policies and agreements for the protection ofthe environment.

6. Shall promote environmental awareness and clear definition of individualresponsibility, and further develop environmental expertise through relevanttraining of all employees.

7. Shall review, develop and strive to improve our practices through research aswell as through consultation with employees, the community, governmentagencies and industry groups.

8. Will measure and audit our performance, reporting results to employees,government and the public. We shall also discuss openly and constructivelyissues of community concern.

S. ButelManaging Director

July 2002

years down to five years, expediting theavailability of the area which has a highpotential for other valuable purposes suchas tourism, recreation and aquaculture.The lake will have a surface area of 103hectares and should be well suited towater sports such as skiing and rowing.The economic development is currentlysubject to a detailed study and design.

Any recreational development in this areawill complement the Collie Motorplexwhich is now an established driver-trainingand club motor sports centre. Based atthe former Western 2 underground minesite, the motorplex has successfully builtupon existing mine infrastructure includingworkshops, other buildings and anextensive road network suitable for racingand training. Rapid fill of the WO-5Hvoid also continued with the level raised afurther 3.2 metres (compared with a rise of

1.9 metres last year) due to higher rainfall.Research at this site into aquaculture as arelinquishment option was completed withencouraging results showing that economicdevelopment could be achievable.

RESOURCE USE

Energy

Total energy consumption for this year was651,867 gigajoules, down 11.4 per centfrom the 736,021 gigajoules used duringlast year. Production decreased 18.7 percent with 22.94 million bank cubic metreequivalent (Mbcmeq) mined this yearcompared with 28.21 Mbcmeq last year.

Fuel

Our energy consumption is dominated bya diesel-powered fleet that accounts for

86.7 per cent of all fuel use by gigajoule.Other fuels used include liquefiedpetroleum gas and petrol.

Electricity

The use of electric shovels, coalprocessing/handling, dewatering andmaintenance workshops dominateelectricity demand, with electricity 12.4per cent of total energy requirements.

Raw materials

Explosives are a major consumablerequirement with 1,806 tonnes usedduring the year, a reduction of 31 per centfrom last year. This reflects reducedproduction but, more importantly,improved efficiencies in blasting.The overall powder factor has beenreduced from 0.23 kilograms per bankcubic metre (bcm) last year to 0.15kilograms per bcm this year, a 35 per centreduction. Powder factor is the ratio ofthe weight of explosives used to blast aunit of material.

Safetyand health

A Mines Occupational Safety and HealthAdvisory Board survey group conducteda safe behaviour survey of our workforcein December 2002, as part of a statewideassessment covering up to 60 mines. Theresults were made available to the miningindustry in March 2003 and feedbackwas given to our workforce. The surveyindicates an improvement in safetybehaviour across the mining industry.

LOST T IME

Our Lost Time Injury Frequency Ratewas zero (compared with 6.4 last year)and, during the year, there were no LTIs.We believe this is a first for the coalindustry in Western Australia. Our AverageTime Lost Rate, which provides a measureof the severity of such injuries, was zero(compared with 11.5 last year).

Safety statistics are reported to seniormanagement every month and to ourboard every two months.

A very big improvement in our safetyperformance was a highlight with no LTIsthis year, contributing to a record 419days without an LTI to the end of theyear. This has bettered our previousrecord of 177 LTI-free days. Our LTI-freedays records for each department are setout in Figure 10.

Premier Coal


We did, however, have three high potentialincidents involving heavy machinery - acollision between a truck and grader dueto operator fatigue; a lubrication trucktipped on its side caused by operatorerror; and an incident involving arcingfrom a high voltage aerial conductor toan excavator radio aerial during transporton a low loader.


There were 46 workers compensationclaims reported, relating to occurrencesduring the year, compared with 45last year.

A regular review of all injury claims isconducted with our insurers to assessprogress on outstanding claims and anyinjury rehabilitation plans. On-site injurymanagement clinics are held to assessongoing musco-skeletal injuries.

Our occupational health nurse achievedWorkCover certification as an injury andworkers compensation coordinator.

We continued to use the services ofrehabilitation and vocational serviceproviders.

HAZARD AND RISK

Programmes

Hazards and incidents are captured withinour Hazard and Incident Reporting system.All hazards and incidents are reviewedwith investigation outcomes and actionsrecorded in our Human ResourcesInformation System. Any current reportsand outstanding actions are reviewedtwice weekly to monitor progress.

The RiskMap standards specify theminimum requirements of our safetysystems. A risk register has been developedusing a rating system that identifies extremeand high-rated risks and for control andreduction of each identified hazard.

Departmental safety audits are conductedon a regular basis.

Our fire detection and suppressionsystems and equipment are regularlyserviced, checked and maintained.

We have evacuation signalling systemsin our main buildings and switch rooms.Procedures for raising the alarm are partof our induction and safety meetingsfeedback. We have an EmergencyManagement Plan. During the year wereviewed our site and particularly ourexplosives compound security in reponseto heightened awareness of potentialterrorist threats.

Emergency response

We have an Emergency Management Planwhich includes the Crisis ManagementPlan. This plan was updated in November2002 as a result of a requirement byWesfarmers Energy (of which we are part)that all energy businesses would conformto a standard template. The emergencyplan and crisis management aspects weresuccessfully tested in a simulated scenarioon 18 December 2002 involving acollision between a light vehicle anda truck.


A register of hazardous substances anddangerous goods is maintained and auditedannually. Any new chemicals are reviewedand assessed prior to being allowed on-site.Material Safety Data Sheets for each ofour hazardous substances and dangerousgoods items are maintained and availablethrough our ChemAlert MaterialSafety database.

Risk assessment

A hazard register is maintained of risksidentified in each operational area.The production department conductsstart-of-shift briefings to ensure astructured method of relaying informationincluding hazards and safety alerts to theoncoming crews.

An insurance risk survey was conductedto examine our fire emergency responsesystems. The survey included the testingof hydrant systems for pressure andflow rates.

An annual service and inspection ofall our fixed fire systems was conductedincluding alarms, detectors and firesuppression systems. All switch roomsand computer/communications roomswere tested to ensure gas suppressionintegrity.

Task observations are conductedmonthly in production areas. Pit permitaccess rules are maintained ensuringonly authorised trained personnel arepermitted access to enter haulage andmining areas.

EMPLOYEE WELLBEING

We have health monitoring and promotionprogrammes in place to ensure ourworkforce is assessed and educated abouthealth issues.

Our health promotion during the yearcontinued focusing on strain injuryprevention, Fitness for Work, weight lossand a smoke-free environment. Bloodpressure, cholesterol and diabetes checkswere also offered as part of the federalgovernment’s awareness campaign onadult diabetes.

The HealthMap medical and fitnessassessment programme continued to beoffered to employees involving localmedical practitioners and a physiotherapistproviding free confidential “snapshot”reports of health status. Employees caneither attend the HealthMap sessions onsite or visit their own doctor.

ACCESS Counselling conducts ourEmployee Assistance Programme which isavailable to employees or their immediatefamily. This is a confidential service aimedat resolving or assisting with personalissues that may have an impact on work.

We also participated in the QUITanti-smoking campaign in May 2003.

Diabetic risk assessments were conductedfor operators. Employees assessed as beingoverweight can participate in weight-lossgroup meetings at the OccupationalHealth Centre. We run both Gutbustersand Weight Watchers programmes withemployees’ partners and spouses welcometo participate.

Community

STAKEHOLDERS

Our stakeholders include employees,the Collie community, local schools,local government, customers, suppliers,relevant government agencies, variousnon-government organisations and theshareholders of our parent company,Wesfarmers Limited.

Recognising a need for liaison with abroader group of our stakeholders, we haveestablished a Stakeholder ConsultationGroup. By providing a strong communityinterface, the stakeholder group will assistus in improving community awarenessand involvement. This group’s first taskwas to provide an assessment of last year’sreport – in particular the scope, clarity,design and ease of information access.

Premier Coal


FIGURE 10: DAYS SINCE LAST LTI

02-03

Production 522

Maintenance 419

Commercial 2705

Technical services 3300

In addition, we provided to the groupdetails of this year’s performance.

Regular meetings are also held withlocal residents at which we providegeneral information as well as detailedenvironmental performance data.The Buckingham community meetingsprovide a valuable opportunity to discusstheir concerns and suggestions.

FEEDBACK/COMPLAINTS

We received five complaints concerningblasting, three regarding general minenoise, two for shovel hazard horn noise(a regulatory requirement) and onerelated to dipper door banging noise.We responded to each of the complainantsin writing and with respect to the moreserious issues raised we conducted aninternal investigation.


We have an appointed senior managerto liaise with all authorities to ensure thatrelevant government agencies are keptinformed of progress on existing issuesand any new issues which arise.

ACTION GROUPS

We are a member of the Local EmergencyManagement Action Committee(LEMAC), which is part of the Police andState Emergency Services plans. Each yearLEMAC reviews the emergency servicesplan for the Collie region.

This year the group conducted a desktopemergency crisis scenario involving a busand truck collision. Some communicationsand logistics issues were identified andthe plan has now been updated.

We are represented on various committeesof the Chamber of Minerals and Energyallowing us to participate in discussion ofissues concerning the mining industry inWestern Australia. An important aspect isparticipation in the Chamber’s South

West Regional Occupational Health andSafety Committee. This committee hostseducational conferences as well asemergency skills competitions betweenlocal and regional mining companies.We are also represented on the Chamber’sConservation and Land ManagementCommittee, the South-West EnvironmentalForum and the Environment and NaturalResource Management Committee.

COMMUNICATION


We report annually to a consortium ofgovernment departments through theCollie Coal Mines EnvironmentalCommittee.

Information on issues and achievementsis distributed in our quarterly publication“Premier Post” which is sent to allemployees and contractors and is widelydistributed throughout the community.

We also distribute to all employees asummary of operations via e-mail ormail-out called “Fortnightly Focus”.This aims to keep employees andcontractors up to date with key

performance areas such as safety andthe environment.

During the year, we hosted a CommunityOpen Day as part of a statewide initiativeby the Chamber of Minerals and Energy.

Our Intranet site continues to makeavailable information, includingenvironmental and safety standardsand procedures.

Website

Development of a website was advancedduring this year and will be on-line byDecember 2003.

COMMUNITY SUPPORT

We continued to assist drought-strickenfarmers by providing free agistment forcattle on pastured properties on ourmining leases.

We again hosted a visit to site of firstyear medical and dental students fromthe University of Western Australia.The initiative aims to familiarise futuremedical practitioners with theenvironment, facilities and benefits ofcountry towns and locations.

Premier Coal


Technical Systems AnalystDavid McLaughlin inspectsPremier’s new on-line watermonitoring equipment.

Full environmental compliance.

Annual rehabilitation of at least the equivalent area of land we clear for mining.

Value-added rehabilitation and mine closure outcomes.

Ensure focus on any community issues or concerns with our operations.

Review our EMS for improved integration with other business systems andto achieve simplification where possible.

Further reduction in greenhouse gas emissions.

A target of zero accidents.

Assess compliance with AS NZS 4801-2001 Occupational Health and SafetyManagement Systems and improve Riskmap safety system where appropriate.

Review our safety standards and auditing.

Complete the Fitness for Work regime implementation.


The Premier Coal Safety Voucher fund, aproportion of safety financial incentiveawards managed by employees, contributedto community projects. Beneficiaries thisyear included youth support, heritage andtourism projects, local welfare and essentialservice groups and schools. Because ofour excellent safety performance, a record$42,547 was contributed by the fund tothe Collie community. This was in additionto $32,332 community contributionsdirectly from us.

We have developed a Schools Compactfor Education Excellence for all the localschools. The aim is to deliver improvededucation opportunities for childrenthrough identification of areas of specialneed, projects that can support theschool curriculum, business and schoolinteraction, programmes to inspire andencourage gifted students and to supportand assist disadvantaged students toachieve their full potential andmeaningful work experience.

We have been instrumental in progressingthe assessment of a future industrialpark near Collie that has the potential toencourage business development as wellas a far more efficient utilisation of theenergy produced by local power stationsand our coal products. The project hasattracted $100,000 funding fromgovernment through the South WestDevelopment Corporation and LandCorp and we have provided the necessaryland for future development.

RESEARCH

Work was completed on the $420,000Australian Coal Association ResearchProgramme at our WO-5H mine site.The research aquafarm evaluated aciditytreatments for abandoned mine waterbodies with a view to value-added closureoptions such as aquaculture and recreation.The research developed new watertreatment technology and showed thataquaculture is a viable mining end use.The aquafarm will now provide a long-term teaching and research centre forthe local TAFE and the Centre forSustainable Mine Lakes researchprogramme. Monitoring of the Western5B lake is an important component ofthe Centre’s research into developing apredictive model for water quality andecological development of mine lakes.This programme is essential for definingbeneficial end uses and attractingcapital developments.

We have a seven-year, $100,000 ayear commitment to the CooperativeResearch Centre for “Coal in Sustainable

Development”. Work being done underthis project by Curtin University ofTechnology involves achieving betterenvironmental and greenhouseperformance through efficiency and waste management improvements.

We continued to help run the CollieCentre of Excellence in SustainableMine Lakes through funding andmanagement support.

Scholarships

Each year we provide tertiary scholarshipssuch as the J A Ellis Scholarship andspecific university scholarships.

The Wesfarmers Premier CoalScholarship at Curtin University issupporting postgraduate research intobirds as bio-indicators in the jarrah forestin south-west Western Australia. The studyhas already covered a range of forest typesincluding pristine, logged, burnt anddieback-infested as well as rehabilitationareas on our mine site. Further work onour rehabilitation areas is planned.

Our Universtiy of Western AustraliaScholarship is still supporting researchinto soil and plant factors which impacton rehabilitation success. We also sponsorthe Joe Lord Memorial Scholarship being

applied currently to research into minesite rehabilitation.

We provided work experience to highschool and TAFE students from thesouth-west region and paid vacationemployment to 13 tertiary students.

We also provide a student award for thelocal high school.

During the year we employed 15apprentices ranging from those in thefirst year to those in the fourth year oftheir indentures.

Awards

We were successful in the WesternAustralian State Environmental Awards,coming second (to the overall statewinner) in our category Business andIndustry Leadership and Responsibility,with our entry titled “Leading SustainableMining Practices”.

We were awarded a Certificate of Meritin the 2003 Golden Gecko Awards whichrecognise environmental excellence andleadership in the Western Australianmining and petroleum industry.


Premier Coal


Kleenheat GasWe are a major distributor of liquefied petroleum gas (LPG) to a broad

range of domestic, commercial, forklift, autogas and industrial customers.

We operate in all mainland states through a network of depots, company-

operated branches, commissioned agents, dealers and franchisees

servicing more than 9,500 bulk, 191,000 domestic, 8,500 forklift and 1,500

Kwikgas customer installations. Other activities include a liquefied natural

gas (LNG) plant at Kwinana in Western Australia and an LPG distribution

facility in Bangladesh. We employ more than 600 people.

Our three main environmental issues are asbestos, waste management andmonitoring of compliance with environmental legislation.

We implemented recommendations from consultants’ asbestos assessmentreports undertaken for Pinkenba in Queensland and our sites at Myareeand Kwinana in Western Australia.

We have developed an environmental management database to storeinformation relating to our sites which will improve our ability to tracklegislative compliance and to monitor waste management practices.

During the year we focused on promoting the benefits of LPG as a cleanerfossil fuel.

Our two main safety issues are workplace injuries and compliance withrelevant health and safety legislation.

We achieved a significant improvement in our safety performance with areduction in our overall employee/contractor Lost Time Injury FrequencyRate (LTIFR) to 1.4. This is the first year that a combined employee andcontractor LTIFR has been reported. A strong focus on early interventionhas contributed to this improvement. There was also a reduction in thenumber of employee workers compensation claims.

We have prepared a Fitness for Work policy which will be introducednext year.

1 July 98 - 30 June 03 (as at 30 September 03)* 2002/2003 year is the first to combine employees andcontractors. Data for all other years were employees only.



99 00 01 02 03

7.4 2.3 3.8 6.2 1.4*

99 00 01 02 03

64 49 39 59 49

Kleenheat Gas

Bulk tanker driverBrian Chisholm wearingnewly-introduced highvisibility safety clothing.

Businessmanagement

TRAINING

Environmental

Environmental awareness training isdelivered to new employees as part of theinduction process. The training includesstatutory obligations, key environmentalmanagement practices and environmentalincident reporting requirements. A furthermodule “Environmental Benefits ofLPG” was developed to provide detailedexplanations of environmental advantagesof LPG in comparison with other fuels.

Health

The primary focus of training foremployees has been on Fitness for Work,with 163 employees having received thistraining in the year. We piloted a morein-depth manual handling training course,which focused on general anatomy,common injuries, preventative exercisesand self-treatment. Thirty-six employeesparticipated in this training.

Safety

Our operational elements of thecompetency training programmeunderwent a review. Training for ourdealers and commissioned agents wasalso undertaken during the year.

In addition, we commenced a roll-out offire safety training to employees with83 employees attending.

Emergency

An environmental emergency evacuationdrill was held in March 2003 at ourKwinana terminal. The scenario was asuspected ethyl mercaptan spill.

In addition, a night-time emergencyresponse exercise was held at our Wandinterminal in Victoria to test the level ofemergency response.

A trial of the National EmergencyResponse Communications System wasconducted in May 2003. This involved adesktop exercise involving all states andterritories to test the level of effectiveness.

COMPLIANCE

Environmental

Any changes to environmental legislationin the states in which we operate aremonitored through a company thatspecialises in environmental law. Thecompany notifies us of any changes andhas a website containing currentenvironmental legislation. The annualenvironmental survey was completed foreach of our sites. The results of thesurvey were compiled and analysed inthe environmental management databasewhich will allow us to set priorities andtrack future performance.

Kleenheat Gas


Improve our safety performance by further educating our employees.Zero Lost Time Injuries (LTIs) continues to be our target, with an annual reduction of 50 per cent in our LTIFR.

To make progress with our Health, Safety and Environmentalimprovement plan.

To introduce our Fitness for Work policy to Kleenheat employeesthrough awareness training and implementation.

To further develop our Liquefied Natural Gas (LNG) market.

Develop an environmental management database.

Improve monitoring and measurement of environmental performance.

One employee LTI, one contractor LTI and an overall LTIFR of 1.4,compared with an overall LTIFR of 6.2* in the previous year.

The plan is approximately 90 per cent complete.

The final draft of the Fitness for Work policy has been distributedto employees for comment.

The LNG market growth has been slow, however, the ongoingdevelopment of existing LNG customers has been encouragingwith four additional fleet vehicles in operation.

Completed.

Measurement of remnant gas recovery was extended to our operationsat Camellia in New South Wales, Pinkenba in Queensland, Myareein Western Australia and Deer Park in Victoria.

* Please note – the 2002/2003 LTIFR refers to both employees and contractors. Previous data were for employees only.


One of the increasing numberof LPG-powered passengervehicles in our fleet.

Investigation into the malfunctioningof the Pinkenba sewerage systemdetermined that the current structureand operation of the system was notcompliant with Brisbane City Councilregulations. Options for upgrading thissystem are being investigated.


LPG is a volatile organic compound whichis one group of substances reportable underthe NPI. The presence and use of all90 substances listed under the NPI wasreviewed for our operations. However, wedid not trigger any thresholds and thereforeare not required to report.

Health

No non-compliance issues were raisedwith us by occupational health regulators.

Safety

We had one prohibition notice and onefield report notice issued this year, bothin relation to our Swan Hill facility inVictoria. The prohibition notice was issuedfor a 190kg cylinder trailer which hadnon-tagged and inspected lifting equipmenton board. The trailer was moved fromSwan Hill and the lifting equipment wasdestroyed. The notice was cancelled.

The field report notice was issued inrelation to a number of issues at the site,

including the noise level of the fire pumpand the recommendation for a riskassessment to be completed for manualhandling of 45kg cylinders. A noisesurvey and risk assessment werecompleted to address the field report.

We complied with the outstandingnotices referred to in last year’s reportrelating to:

• emergency training at Swan Hill; and

• traffic/pedestrian safety, forkliftinspections and spare parts storage atour Deer Park terminal in Victoria.

We finalised and submitted the revisedsafety report for the Kwinana gas terminalto the Western Australian Departmentof Industry and Resources.


We hold four site-specific environmentallicences. These are required by the relevantstatutory authorities for our Pinkenbaterminal, our Mongla terminal inBangladesh, our LNG plant at Kwinanaand our Myaree workshop in WesternAustralia. No additional environmentalapprovals were sought this year.

The safety case and operating licence forour major hazard facility at Swan Hill wasaccepted and granted by the VictorianWorkCover Authority in April 2003.

As part of the safety report for our majorhazard facility at Kwinana, a quantitativerisk assessment was completed inMay 2003.

A safety case for our major hazard facilityat Pinkenba is currently being writtenand is expected to be complete by theend of the financial year.

MANAGEMENT SYSTEMS


The Operations Management System(OMS) is an Intranet-based systemcovering safety, quality and environmentalmanagement requirements. The systemis regularly updated to give users accessto current information. The OMSincludes links to codes of practice andregulators’ home pages and health, safetyand environment reference documents.The OMS is available to employeesthrough our Intranet system.


The EMS is an integrated part of theOMS and is consistent with the principlesof the international standard ISO 14001.We have maintained our third partycertification to AS/NZS ISO 14001(Environmental Management Systems)

Kleenheat Gas


Repair and fabrication workshopemployees undertaking fire fightingtraining at the Industrial Foundationfor Accident Prevention facility inLeeming, Western Australia.

at our Myaree and Kwinana sites since1998. Third party certification has notbeen sought at any other sites.

Quality system

Our national quality management systemwas upgraded to meet the requirements ofAS/NZS ISO 9001 at Deer Park, Camellia,Wingfield, Pinkenba, Kwinana and Myaree.Only the Darwin site is outstanding andwe are on schedule to meet our targetdate of having the entire system AS/NZSISO 9001 compliant by December 2003.


We have maintained our certification toAS/NZS 4801 (Occupational Health andSafety Management systems) for ourMyaree and Kwinana sites.


An environmental management databasehas been developed to manageenvironmental data related to each ofour sites.

Work is progressing on the implementationof our business information system projectwhich will incorporate health, safety andenvironmental aspects.

POLICY

We have formal policies for quality,safety and the environment. Each policyhas been developed in accordancewith the relevant Australian Standard.Our policies are displayed on our Intranetsite. The environmental policy wasrevised during the year to incorporatethe LNG operations and to note thatwe are committed to implementing amanagement system consistent with theprinciples of sustainability.

Environmental


Dust

Dust is an issue at some of our sites.The natural dust suppressant applied tothe Wingfield yard in South Australiahas resulted in the successful reductionof dust generated at this site and a saferand cleaner environment for all employeesworking in the yard. A dust concern wasraised at Deer Park but given our plansto relocate from this site no long-termmanagement was required.

Odour

In its natural state, LPG is odourless.For safety reasons it is necessary to add asmall amount of ethyl mercaptan to givethe gas a distinctive smell and to allowits presence to be easily detected shoulda leak occur. An odour release isassociated with the venting of LPG tothe atmosphere. LPG emissions areminimised through the cylinder exchangeprogramme and remnant gas recovery.The recording of remnant gas recoveryhas been extended during the yearbeyond our Kwinana terminal to includeCamellia, Pinkenba, Deer Park andMyaree (see Figure 1). The remnant gasrecovery was highest at Deer Park where alarge proportion of the 190 kg cylinders,holding the most remnant gas, are tested.Nationally, approximately 129 tonneswas recovered.


LPG produces up to 15 per cent lessgreenhouse gas emissions than petrol.This will be promoted through ourEnvironmental Benefits of LPG trainingand also through education of our lightvehicle fleet drivers in an effort to increaseLPG usage and decrease greenhouse gasemissions. An autogas calculator has beendeveloped to calculate the greenhouse gassavings generated by driving a particularvehicle on autogas rather than petrol overa specified number of kilometres.

As vehicles are changed over in thepassenger fleet, LPG-powered vehiclesare purchased wherever practicable, tominimise the fleet’s greenhouse gasemissions. In the last year the number ofpetrol vehicles reduced from 11 to twoand the number of gas vehicles increasedfrom 46 to 58. The number of dual fuelvehicles has remained constant at 117(see Figure 2).

The majority of our greenhouse gasemissions are a result of fuel use. For the

Kleenheat Gas


FIGURE 1: REMNANT GAS RECOVERY

Kwinana Deer Park Myaree Camellia Pinkenba

● Remnant gas recovered Jul02 - Jul03 (Tonnes) 31 48 9 25 16

● 1000’s cylinder tested 29 26 0 12 5

FIGURE 2: PASSENGER FLEETFUEL USE TREND

Petrol LPG Dual Fuel Diesel

● 2001 - 2002

11 46 117 0

● 2002 - 2003

2 58 117 1

FIGURE 3: TRANSPORT EFFICIENCY

02/03

Km travelled per bulk tonne

LPG delivered 40

Litres diesel consumed per

bulk tonne LPG delivered 7.9

Assessments have been undertaken at all sites where asbestos materials have beenidentified through the environmental surveys. Our Kwinana terminal in WesternAustralia was one of the sites where asbestos issues were managed during the year.

The cylinder filling shed, where more than 600,000 cylinders were filled, has anasbestos roof. Inspection by an independent consultant in 2002 recommended treatingthe external surface of the roof to provide long term control of the asbestos.

In February 2003 all the gutters were cleaned out and rubbish was bagged inaccordance with health regulations covering potential sources of asbestos fibres.Patches of moss were removed and all cracks and holes sealed to make the roofready for the application of the sealant. A water-based primer was applied first topenetrate through and bind any lichen and degraded asbestos to the sound basematerial. A polymer membrane was then applied to protect the encapsulated layersover the long term from heat, lichen growth and weather. The underside of the roofwas also sealed to provide total encapsulation of the asbestos material.

CASE STUDY

first time this year, the kilometres travelledper tonne of bulk gas delivered has beendetermined and litres of diesel consumedper tonne of bulk gas delivered have beendetermined (see Figure 3). In future years,a comparison against this value will beused as an indicator of our efficiency indelivery of bulk gas and success inminimising emissions.

Our greenhouse gas emissions wereestimated to be approximately 20,720tonnes CO2 equivalent using available data.

Noise

We received no noise complaints andnoise monitoring was not required orundertaken at any of our sites.

Other emissions

Asbestos air fibre monitoring wasconducted at our Pinkenba terminalduring the asbestos abatement project.All results were below the detectable limitof 0.01 fibres/ml. A report on asbestosmanagement at our Kwinana site iscontained in the Case Study above.

WATER

Consumption

As many of our sites are leased propertieswithout a site-specific water meter, waterconsumption data is not recorded foreach site. Twelve per cent of our sites usewater for cylinder washing and 31 per centuse water for truck washing. Water mayalso be used for deluge systems, toilets,bathrooms and kitchens.


At sites other than Kwinana andChannel Island (Northern Territory) thedeluge water discharges to the naturalground surface.

Reuse

Fire deluge systems are erected aboveour bulk storage tanks where required. At Kwinana and Channel Island thereleased deluge water flows back into awater storage dam for reuse.

WASTE

Solid waste

We manage 51 sites. The type of wastegenerated depends on the nature and sizeof the operation. Unmanned depots donot produce any waste. Solid waste mayinclude paper, cardboard, cylinders, valves,plastics, aluminium, glass and wood.

Liquid waste

Waste oil is generated at our Myareeworkshop and the Wandin terminal, whereit is collected for recycling. Waste thinnersare produced at our operations wherecylinders are repainted and the wasteproduct is collected by licensed contractorsfor treatment and disposal.

Recycling

The percentage of sites recycling theirwaste paper, plastic, valves and glass hasincreased over the past year. Approximately31 tonnes of brass and 164 tonnes ofsteel have been recycled from our teststations across Australia (see Figure 4).

Kleenheat Gas



Spraying fibroseal toencapsulate asbestos roofsheeting at the LPG terminal,Kwinana, Western Australia.

LAND

Contamination

Contamination is unlikely to result fromour LPG operations as LPG vaporises atatmospheric pressure preventing it fromentering soil or water resources. As someof our trucks run on diesel or petrol, oilabsorbent spill kits have been issued tosome bulk delivery trucks in WesternAustralia. Plans are underway to completethe issue in Western Australia and toissue similar kits to bulk delivery trucksoperating elsewhere in Australia.

Some of the sites we lease in New SouthWales are contaminated from previoususes. The Kiama lease was discontinued.No remediation was undertaken by thecouncil at Nowra so our operations havecontinued as before. Our site at Camelliais concreted which assists in preventingincident rainwater from spreadingcontamination. The new facility beingconstructed at Armidale will enable therelocation of our terminal from itscurrent site and the remediation of thatsite by other parties.

Hydrocarbon-contaminated sedimentwas found in the storm water system atPinkenba. The management of thiscontamination is being discussed withthe landowner.

RESOURCE USE

Fuel

Most of the fuel we consume is used intransporting LPG. The total fuel usage,excluding contractors, is shown in Figure 5in comparison to the previous two years.

Electricity

Electricity usage was monitored for thelargest electricity consumers reported last

year. The office and workshop at Myareecontinued to be the biggest consumerof electricity, increasing to an averagedaily usage of approximately 2,700kilowatt hours (kwh). The site with thenext highest electricity consumption wasDeer Park with an average daily use ofapproximately 670 kwh, down from730 kwh in the previous year.

Safetyand health

LOST T IME

Our Lost Time Injury Frequency Rate was1.4 (compared with 6.2 last year) and,during the year, there was one employeeand one contractor LTI. Our AverageTime Lost Rate, which provides ameasure of the severity of such injuries,was zero (compared with zero last year).

Safety statistics are reported to executivemanagement each month and to ourboard every two months.


There were 49 workers compensationclaims reported, relating to occurrencesduring the year, compared with 59 last year.

HAZARD AND RISK

Programmes

After reviewing our work permit systemand conducting an initial round of trainingin the previous year, we commenced asecond round in June 2003.

During the year, our heavy haulage vehicleswere involved in 10 on-road accidents,with no personal injury or major damage.During the same period, our passengervehicle fleet was involved in 11 roadaccidents. Again, there were no personalinjuries and no major damage to vehicles.

Risk management forms one part of ourHealth Safety and Environment (HSE)improvement plan. The risk managementstrategies in the improvement plan werereviewed at a conference for our HSEteam held in March 2003.

Emergency response

We developed a Crisis ManagementPlan along with other Wesfarmers Energycompanies. This plan is still in a draftphase and is expected to be complete bythe end of next year.

Kleenheat Gas


FIGURE 5: KLEENHEAT FUEL USE(L ITRES)

01 02 03

● LPG

677,763 867,515 723,317

● Petrol

232,097 203,752 167,919

● Diesel

1,308,972 1,412,174 1,341,797

FIGURE 4: BRASS AND STEEL RECYCLED (TONNES)

VIC NSW SA QLD WA NT National

● Brass 11.8 7.9 3.0 2.2 4.9 1.0 30.8

● Steel 34.4 31.3 9.0 27.7 59.7 2.3 164.4

HSE Advisor Alan Meager explaining paperrecycling arrangements to LogisticsCo-ordinator Michael Likoravec at Niddrie.

We plan to create an emergency responseresource package based on results fromthe national desktop exercise held inMay 2003.

We are currently in the process ofrevising emergency plans for all otherapplicable locations.


In response to the Victorian manualhandling Code of Practice we conducteda risk assessment of 45kg cylinder handlingand storage in that state.

Risk assessment

In light of major hazards legislation inVictoria and Queensland, we have createdtwo more risk registers to address thoserequirements at our sites at Swan Hilland Pinkenba.

All sites identified as containing asbestosmaterials have been surveyed byindependent consultants. The consultants’reports contain recommendations onasbestos management which are beingactioned as required. This year the asbestos-clad filling shed at Pinkenba and theworkshop at Myaree were vacuumed toremove any fibres potentially present in thedust. The asbestos roofs of the cylinderfilling shed at Kwinana and the retailstore at Rockingham in Western Australiawere sealed to prevent further weatheringand release of fibres. A more detailedaccount of the Kwinana treatment processis contained in the Case Study on page 40.

EMPLOYEE WELLBEING

We conducted another round ofemployee health assessments with 185employees participating.

Employees were also offered theopportunity to have an influenzavaccination with 158 employees takingup the offer.

To encourage employee wellbeing atwork and at home a Kids at Work daywas held in May 2003. Employees wereable to bring their children to work inthe afternoon for a tour of the workplaceand some activities.

We also produced a calendar in whichwe ran a competition for the children ofemployees to submit a drawing based on

health, safety or environmental themes.The competition winners had theirdrawings published in the calendar.

Our employees are also involved incharitable fundraising at work for eventssuch as Red Nose Day and Daffodil Day.

Community

STAKEHOLDERS

Our stakeholders include our employees,customers, suppliers, the local communitiesin which we operate and the shareholders ofour parent company, Wesfarmers Limited.

We conducted a cultural and feedbacksurvey with our employees in September2002 to gauge their thoughts and feelingson our company and views on their ownand other departments. The results of thesurvey were progressively fed back to them.

As part of improving our commitmentto customer relationships and service, wecommenced Key Account RelationshipManagement training in October 2002.To date, 71 staff have undertakenthe training.

A number of our appliance and assetsuppliers were invited to attend theKleenheat Convention, held on the GoldCoast in Queensland during October2002. As part of the convention, oursuppliers held an expo to showcase newappliances and gas-related products.

We conducted the Community of theYear awards in association with localgovernment and communities atGeraldton and Kalgoorlie in WesternAustralia and at Geelong, Hamilton,Wangaratta, Bendigo and Taralgon in

Victoria. These awards recognise thesignificant contributions that communitiesmake to their local region.

As part of our commitment to raisingcommunity awareness of LPG safety, weprovide LPG safety training to anyinterested party or public group.

FEEDBACK/COMPLAINTS

Most customer issues are handled by firstpoint of contact with our CustomerService Centre (CSC) officers. If an issuerequires further attention, the matter isrecorded and dealt with by the CSCmanager, supervisor or other seniorpersonnel. We handled 175 such issuesduring the year.


Kleenheat continues to maintain aworking relationship with governmentauthorities nationally to ensure we dealwith compliance issues outlined in earliersections of this report.

COMMUNICATION


We maintained a high level of employeefeedback through both our “Gas-Bagging”and “Safeside” newsletters. We alsodistribute “Well-at-Work” newsletters toemployees providing a range of informationrelating to general health and wellbeing.

Website

Our website (www.kleenheat.com.au)continues to provide an area dedicated tothe environment and safety where thepublic can contact us in relation tothese issues.

Kleenheat Gas


Compliance Coordinator KerryDeCoster and her daughters Taylaand Krysten at the Kids at WorkDay, Myaree, Western Australia.

Liaison groups

We remain a member of the AustralianLiquefied Petroleum Gas Association.

Community support

We sponsored a number of communityorganisations during the year.

The Kleenheat Gas Community of theYear awards were originally launchedduring April 2002 in regional areas ofWestern Australia and Victoria, with thewinners being announced in November2002. Each state winner received acommunity plaque and a perpetual trophyto recognise the significant contributionthey made to their community.

Sponsorship of the Clontarf FootballAcademy continued through the year andincluded provisions for football uniformsto the college, support of country toursand a barbecue facility.

The local State Emergency Services at bothShoalhaven City in New South Walesand Rockingham/Kwinana in WesternAustralia were donated computers,enabling volunteers the use of this vitalequipment needed in emergency situations.

In addition to this, in May 2003, wesponsored the Sea Rescue Service atAlbany in Western Australia by providingthem with life jackets, heaters, a barbecueand fuel.

Sponsorship has also been given toorganisations such as the Oz BaliConcert, a fundraiser for the victims ofthe Bali tragedy, and the Amanda YoungFoundation which raises awareness ofmeningococcal disease.

Other sponsorships include theWesfarmers Kleenheat Gas Prize for theUniversity of Western Australia Centrefor Oil and Gas, Chef of the Year andsupport for various art, sporting andcommunity sponsorships.


Train our employees in the environmental benefits of LPG.

Continue the asbestos management programme.

Further progress the Health, Safety and Environmental improvement plan.

Zero Lost Time Injuries continues to be our target with an annual reduction ofat least 50 per cent in our LTIFR.

Implement Fitness for Work policy.


Kleenheat Gas

A contribution by Therese Agrestafor the Kleenheat 2003 Health,Safety and Environment calendar.


Wesfarmers LPGWe own and operate a plant at Kwinana in Western Australia which extracts

LPG from the natural gas stream in the Dampier to Bunbury pipeline. Our

product supplies the domestic market with the balance exported to Japan.

Production reached record levels during the year with plant capacity now

at about 350,000 tonnes per annum. We employ about 40 people.

Our three main environmental issues are noise emanating from the plant,smoke emissions from the flare and fugitive odours.

During the year we focused on noise reduction projects, development andimplementation of a formal environmental policy and establishment of anenvironmental complaints register in relation to environmental performance.

We continued to manage the operation of our flare by monitoring inthe plant control room and our odourant injection facilities are regularlyinspected to ensure that any leaks are quickly repaired and spillagecontained and neutralised.

We progressed the environmental site assessment by approving a proposal toconduct a stage 2, 3 and 4 environmental site assessment and undertakingsite work associated with stage 2 of this project.

Work on a project to redirect minor LPG emissions from tanker loadingto flare rather than to atmosphere continued during the year.

Our two main safety issues are the protection of employees and visitors toour plant and compliance with the national standard for the control ofmajor hazard facilities.

The continuation of our zero Lost Time Injury Frequency Rate (LTIFR)for employees was a highlight of this year’s safety performance with theachievement of 508,261 workforce exposure hours free of Lost TimeInjuries (LTIs). Unfortunately we incurred one LTI for a contractor whosustained an injury during welding activities, which resulted in two dayslost time.

We developed a draft Fitness for Work (alcohol and drugs) policy withregard to safety and health. Voluntary health and fitness assessments andfollow up sessions by an independent consultant were carried out foremployees and long-term contractors.

1 July 98 - 30 June 03 (as at 30 September 03)* We began recording contractor hours from July 2002



99 00 01 02 03

0 0 0 0 7.2*

99 00 01 02 03

1 1 2 0 1

Wesfarmers LPG

Trades Assistant StacyBrooksbank doingvibration checks onthe recompressor inthe Liquid ExtractionPlant at Kwinana.

Businessmanagement

TRAINING

Environmental

Our induction programme for all newemployees and contractors addressesenvironmental awareness of their workarea with emphasis on response toproduct spillage and general housekeeping.There were 149 inductions carried out thisyear associated with planned maintenanceactivities and new projects. Our trainingprogramme contains procedures formanaging environmental licence conditions.

Health

Voluntary health and fitness assessmentsusing the services of an independentconsultant were conducted this year foremployees and long-term contractors.Health management plans were discussedwith each participant following theseassessments. The next series of assessmentsare scheduled for 2005. Fitness for Work(alcohol and drugs) awareness trainingwas conducted for employees and long-term contractors as part of theintroduction of a formal policy.

Safety

All employees and contractors must attenda safety induction programme before beingallowed access to the process area toensure that they are aware of hazards,work permit requirements, occupationalhealth and safety and emergencyresponse procedures.

All employees undergo vocationaltraining to meet the requirements of theirposition with competencies measuredagainst national standards (where available).In addition, a comprehensive competency-based training programme is in placefor all process operators, involvingdemonstration of acquired competenciesagainst internal and national standards.The review of the internal competencystandards, including training workshops,continued this year to ensure they matchedcurrent plant status. This process willcontinue next year.

Emergency

A comprehensive emergency responsetraining programme is in place relevantto each employee’s position. This includesbasic, intermediate and advanced firefighting, breathing apparatus training,search and rescue and fire groundcommand programmes. Training underthis programme is conducted annually.As part of our Safety Report requirements,35 employees completed an advancedfire fighting course, 13 completed thefire ground command course and ninewent through the fire awareness andcontrol programme.

COMPLIANCE

Environmental

We continued implementing the noisemanagement plan to address non-compliance issues with the EnvironmentalProtection (Noise) Regulations 1997.This involved the implementation ofnoise reduction projects on plant itemswhich now bring us closer to compliancewith the regulations. This is discussedin more detail in the Case Study onpage 48.


Air emissions notifiable under the NPIwere estimated for oxides of nitrogen,carbon monoxide, nickel carbonyl, heavymetals and associated compounds and

Wesfarmers LPG


One employee injury and five contractor injuries requiring medicaltreatment, which led to one contractor LTI. LTIFR of zero for employees.

Continued use of site Permit to Work system.

No significant releases. One minor natural gas release following theoperation of a pressure safety valve with no threat to employees orthe public. Hazard and Operability (HAZOP) study conducted forproject to divert minor LPG emissions from tanker loading to flare.

Noise reduction on plant items progressed. Phase 2 and 2Bcompleted with subsequent noise measurements conducted toassess compliance. Phase 3 underway.

Stage 1 completed. Proposed stages 2, 3 and 4 approved bymanagement. Site work associated with stage 2 completed this year.

Draft policy developed and issued to site management for review.

Environmental policy developed and implemented this year.

No workplace injuries and LTIFR at zero.

Ongoing identification and control of hazards.

No significant release of hydrocarbons to the atmosphere.

Continued roll-out of the noise reduction programme.

Progress environmental site assessment.

Implement Fitness for Work (alcohol and drugs) policy.

Develop formal environmental policy.

02 03OUTCOMES2002 REPORT PRIORIT IES

Electrical Technician PeterWalker (foreground) undergoinga lung function test as part ofhealth and fitness assessments.

All modifications to the operating plantare reviewed and approved by senior plantmanagement prior to implementation.Procedures ensure that all changes arefully documented to allow independentaudit and review.

POLICY

We are committed to providing a healthyand safe workplace for all employees andvisitors to the Kwinana extraction plantand our gas export facilities. Identificationand control of hazards and prevention ofincidents and injury are of the highestpriority. This is achieved through aconsultative process which defines andimplements training, policies andprocedures for the wellbeing of allemployees. Four safety and healthrepresentatives continued in their roleson the site occupational health and safetycommittee this year. A new safety andhealth representative was elected toreplace one who left the company inthe last quarter of the year.

Environmental


Dust

To control dust, large areas of grass havebeen planted and are maintained.

Odour

Propane and butane are naturallyodourless. For safety reasons, we arerequired by legislation to inject low levelsof ethyl mercaptan (odourant) into the gas.This gives it a distinctive odour allowingleaks to be detected. The injection systemis closely monitored as even minor dripscan give rise to offensive odours. Any leakis quickly repaired and spillage containedand neutralised. No odour complaints werereferred to us by the DoE in 2002/2003.We received three complaints fromnearby industries and these were capturedin our environmental complaints register.


During the year we released an estimated330,276 tonnes of carbon dioxideequivalent. This is a decrease from theestimated 342,800 tonnes released duringthe previous year due to plant outagesinvolving the train one recompressor.

We installed sample points to allowsampling of emissions from the dischargestreams on train one and train two

Wesfarmers LPG


particulate matter. Data for the 2001/2002reporting period was submitted to theDepartment of Environment (DoE).Detailed information is available at:www.npi.gov.au.

LICENSING AND APPROVALS

The plant operates under licences issuedfrom the DoE and the Department ofIndustry and Resources (DoIR). Theselicences are issued annually and we arenot aware of any non-compliance withDoE licence conditions, other than theenvironmental noise non-compliancewhich is discussed in the Case Study.There are some minor levels of non-compliance with DoIR licence conditionswhich are reported under the SafetyManagement System section.

We submitted a Works ApprovalApplication to the DoE in March 2003in order to increase our productioncapacity of liquefied natural gas (LNG).The department issued a Works Approvalfor this new LNG plant in March 2003.

MANAGEMENT SYSTEMS


Environmental policy and procedures areaddressed in our Safety Report and ourDoE licence conditions. This has beenfurther enhanced by the introductionof a formal site Environmental Policy.

Quality system

We have a Quality Assurance systemmeeting the requirements of ISO 9001for the testing, inspection and servicing ofsafety relief valves. These valves are testedat prescribed periods. An independentaudit was undertaken in February 2003.The auditor concluded that ourcertification should continue.


All health and safety policies andprocedures are referred to in our SafetyReport. Following consultation withDoIR the report was revised and submittedto DoIR, who accepted it in March 2003.The report is subject to independent andregular audit and is overseen by DoIR.

Following a compliance audit conducted inJune 2002, the report recommendationswere discussed with DoIR and an actionplan was developed. We are makingprogress with these recommendations.The next compliance audit is scheduledin the first quarter of next year.

Specific health and safety procedures coverworking with high voltage electricity,accident and incident investigation, manualhandling, working in confined places,height safety and job hazard analysis.

Operator Gary Swaleand Shift ControllerGarry Tardrew at Kwinana.

recompressors, Ruston generator and thegas-fired oil heater to enable a comparisonbetween the actual and estimatedemissions. Results to date indicate a lowerlevel of emissions of nitrous oxides fromthe train two recompressor than designspecifications. Other sample pointsindicate emissions are in line with designspecifications which were reported to theDoE in 2000. Further sampling of theseemissions will be carried out next year.

Noise

The extraction plant operates 24 hours aday. There are numerous items of rotatingequipment giving rise to a low level ofbackground noise at the plant boundary.We continued implementation of themanagement plan aimed at reducingnoise emissions from the plant as far aspracticable. Details of the work carriedout are contained in the Case Study onpage 48.

Other emissions

There have been no environmentalincidents involving significant release(defined as a release which may affectareas outside the plant) of LPG, naturalgas or condensate to the atmosphere sincethe commencement of plant operationsin 1988. There have been occasionalminor LPG releases (defined as thosecontained within the plant) that havebeen quickly brought under control.

There was a minor natural gas release,lasting about fifteen seconds, during aplant start-up in March 2003, followingthe operation of a pressure safety valve onthe train one absorber. The release wassafely dispersed and did not pose anythreat to employees.

During plant shutdowns, or occasionallyto control pressure in operating vessels,gas has to be released to the atmosphere.This gas is safely disposed of throughcombustion flares. The flare tips arecontinuously monitored in the controlroom via a closed circuit camera.

In the event of a high flaring rate,additional combustion air is fed to theflare tips to prevent the formation ofblack smoke.

There are minor emissions of LPG at thecompletion of loading of road tankerswhen the hoses are disconnected. Plantmodifications were approved by sitemanagement to allow the LPG emissionsto be directed to the flare. A project wasestablished and a HAZOP study has beenconducted to ensure the safe discharge ofLPG emissions to flare. This project isscheduled to be completed next year.

WATER

Water consumption

We consumed an estimated 17,500kilolitres of scheme water during the year.

Groundwater

Three bores operating on the site providewater for garden reticulation and foremergency response.


Storm water run-off from the pavedsections of the processing areas is directedto oil/water interceptors where any oilpresent is skimmed off and recovered.A licensed contract waste disposal firmremoved all of this oily water waste,totalling 4,800 litres.

Reuse

Water used for deluge system testingpurposes in both the domestic andexport storage tank areas is returned toa storage pond for reuse.

WASTE

Solid waste

A waste management contractor removedabout 741 cubic metres of solid waste(general site waste) during the year foroff-site disposal. There is no landfill ofwaste on site.

We participated in a Kwinana IndustriesCouncil (KIC) survey to help identifycurrent industry waste managementpractices. The information provided willhelp develop future waste managementstrategies within the Kwinanaindustrial area.

Liquid waste

An oil recycling contractor removed4,650 litres of oil wastes (lubricating andseal oil) from the site during the year.

Recycling

Paper and cardboard recycling binscontinued to be used as part of our paperproducts recycling policy and about114 cubic metres of paper and cardboardwere removed by our solid wastecontractor for recycling.

LAND

Flora and fauna

Extensive landscaping including treesand shrubs is maintained to improve theappearance of the facility.

Contamination

A proposal to conduct stages two, threeand four of the environmental siteassessment was approved, following theinitial stage one site assessment conductedin 2001. Site works were completedand the consultant’s report is scheduledfor completion in the first quarter ofnext year. This report will cover furtherinvestigation of the extent of thecontamination referred to last year.

Rehabilitation

After completion of minor projects on theplant and associated facilities, excavatedareas were filled and reinstated.

RESOURCE USE

Energy

Our total energy consumption for theyear was 1,802,886 gigajoules comparedwith 1,903,217 gigajoules last year.Our energy sources are detailed below.

Fuel

During the year we used 35,471 tonnesof natural gas as fuel for the LPGprocessing plant, 14,909 litres of dieselfor vehicle and machinery fuel, 20,547litres of autogas and 9,393 litres of petrol.

Electricity

Electricity consumption for the yearwas 9,147,700 kilowatt hours.

Safetyand health

LOST T IME

We had no Lost Time Injuries foremployees and as a result our Lost TimeInjury Frequency Rate (LTIFR) and ourAverage Time Lost Rate, which providesa measure of the severity of such injuries,remained at zero.

Our LTIFR (including contractors) was7.2 with one LTI during the year.

Safety statistics are reported to ourboard every two months and monthlysafety statistics, including informationon employees and contractors, are alsoreported to Wesfarmers Energy.


There was one workers compensationclaim reported, relating to an occurrenceduring the year, compared with noclaims last year.

Wesfarmers LPG


HAZARD AND RISK

Our plant has been designed to have a verylow environmental risk. All products willevaporate if released to atmosphere, leavingno soil or water-contaminating residues.

EMERGENCY RESPONSE

We have detailed emergency responseprocedures. They describe the organisationand training of employees and contractorsto reduce the risk to personal safety andthe surrounding environment in theevent of an emergency.

Our procedures were revised during theyear to develop an EmergencyManagement Plan (EMP), which links intothe Wesfarmers Energy and WesfarmersLimited Crisis Management Plans. A draftEMP was issued to the Fire & EmergencyServices Authority of Western Australia aspart of our licensing requirements as aMajor Hazard Facility and the formalacceptance of this EMP is anticipatednext year.

Four site emergency muster point exerciseswere successfully carried out to testemployee understanding of and compliancewith emergency response procedures.

We became the rostered facility toconduct the weekly Kwinana Industrial

Mutual Aid (KIMA) radio testing. Theseradio testing protocols allow for radiocommunications to the various industrialneighbours to be verified as operational.

MATERIALS HANDLINGAND STORAGE

We operate under an annual DoIR licencecovering storage of dangerous goods.Our propane and butane products andcondensate by-product are defined asdangerous goods under the DangerousGoods Storage Regulations administeredby the department. The products arestored in vessels which comply with bothAustralian and international engineeringstandards. Approximately 3,500 litres ofdiesel is stored on-site within bundedareas. Backup supplies of lubricating oiland heat transfer fluid are kept in 200litre drums in a bunded oil storage area.

Odourant is pumped directly from sealediso-containers. The empty containersare returned to the supplier for reuse,eliminating any residual odourantdisposal requirements.

Liquid nitrogen is stored in an insulatedvessel and is used for clearing LPG fromthe export pipework following completion

of exports. An additional liquid nitrogenvessel is located at the LNG plant for usein the production process. LNG product isstored in an insulated vessel at the plant.

All of these storage areas meet legislativerequirements.

Wesfarmers LPG


As part of our commitment to reduce environmental noise from our plant operations,we completed a number of projects based on a consultant’s management reports.Our aim is to ensure compliance with the regulations and we have moved closer toachieving this objective.

Specific projects to reduce the noise from major plant items were progressed.Phase 2 and phase 2B, comprising modifications to the gas turbine alternator(Ruston generator) and plant inlet manifold were completed. This work involved theinstallation of acoustic insulation on ducting and silencers associated with the Rustongenerator and acoustic insulation of pipework from the plant inlet manifold to theinlet filter separator, dehydrator discharge lines and the suction and discharge pipesupports on the train two recompressor.

These projects have resulted in noise reductions from the plant of between 37 and87 per cent.

Noise measurements were carried out to determine the effectiveness of the noisetreatments completed. These measurements demonstrate that we are close tocompliance with the site boundary noise requirements and noise modelling showscompliance with the residential components of the Environmental Protection (Noise)Regulations, 1997. Further projects to address this non-compliance will be carriedout next year.

The scope of work for future noise reduction will be re-evaluated based on theeffectiveness of work completed to date. It appears that phases 3,4 and 5 referredto last year may not be required.

CASE STUDYMaking

a difference...

Clinton Adams and Dr PaulKeswick from SVT EngineeringConsultants, monitoring noiseat the plant inlet.

Operations Supervisor Garry Tardrewtesting the Kwinana Industries MutualAid (KIMA) radio in the plant’s centralcontrol room.

RISK ASSESSMENT

As part of a proposed project to increaseproduction of LNG, a Quantitative RiskAssessment was conducted and submittedto the DoIR and the DoE and wasaccepted in December 2002.

EMPLOYEE WELLBEING

We continued with an employeeconsultative committee to assist in thedevelopment of a Fitness for Work(alcohol and drugs) policy. The draftpolicy has been issued to site managementand will be finalised and implementednext year. We continue to provide anEmployee Assistance Programme whichoffers independent professional andconfidential counselling to all employeesand their immediate families. We alsohave a childcare referral service toprovide employees with advice aboutchildcare services.

Health and fitness assessments and followup sessions were also completed this yearfor employees and long-term contractors.

Community

STAKEHOLDERS

Our main stakeholders are our employees,regulatory authorities, customers and ourlocal community and the shareholders ofour parent company, Wesfarmers Limited.

Employees are encouraged to providefeedback on this report. We conducted aplant tour for a group of customers whooperate service facilities along the EyreHighway. We are also represented on theKwinana Industries Public Safety LiaisonGroup which includes representativesfrom industry, regulatory authorities,local government authorities and thelocal community.

FEEDBACK/COMPLAINTS

Senior management handles anycomplaints from the community.Three complaints from nearby industrieswere received during the year related toclaimed odourant emissions from theplant and one due to a reported burningrubber smell. We are satisfied that in twoof the cases the odours did not emanatefrom our plant. The other two complaintswere both related to a single maintenanceactivity on the odourant injection facilityand involved a release of odourant.

Two complaints, one from the KwinanaTown Council and the other from theDoE, were received. Both related to adischarge of water containing sand andsilt, during maintenance activities at ourfirewater pond. All of these complaintswere investigated and resolved.

We implemented an environmentalcomplaints register to record all suchcomplaints.


We maintain good working relationshipswith the DoIR and the DoE through ourinvolvement with regular Safety Reportmeetings and communications meetingswhere we discuss our operations.

ACTION GROUPS

We are a full member of the KwinanaIndustries Council (KIC) and itssub-committee the Kwinana IndustriesPublic Safety Group (KIPS), formerlyknown as the Kwinana Major HazardsFacilities Group.

Member companies maintain amanagement system for response withinthe Kwinana industrial area to controlemergencies that may arise within theboundaries of a member company site.Member companies have a mutual aidplan to integrate emergency managementwhere appropriate. This plan, which wasreviewed and re-issued this year, allowsmember companies to obtain assistancefrom neighbours in the event of anemergency.

COMMUNICATION


Information is provided through theKIC as required. The 2002 WesfarmersEnvironment, Health, Safety and theCommunity Report was available to allemployees and circulated to stakeholders.

We are involved in the Kwinana IndustriesCouncil Community Information Servicewhich is a public phone-in system,established in partnership with KIC andthe Western Australian police service,which enables the community to find outwhat is happening within the Kwinanaindustrial area.

Website

Our operations are referred to on theWesfarmers Limited website atwww.wesfarmers.com.au.

Liaison groups

We continue to be involved in theKwinana Industries Public Safety LiaisonGroup. This group allows us to formallyconsult with state government departmentsand agencies, local governmentorganisations and community interestgroups in matters relating to ouroperations. We made a presentation tothis group during the year to provideinformation on our operations relatingto the Safety Report and this report.


No workplace injuries and LTIFR of zero.

Ongoing identification and control of hazards.

No significant release of hydrocarbons to the atmosphere.

Continued implementation of the noise reduction programme.

Progress environmental site assessment.

Implement Fitness for Work (alcohol and drugs) policy.

Conduct environmental sampling to verify greenhouse emissions.


Wesfarmers LPG


WesfarmersIndustrialand SafetyWe are Australasia’s market leaders in the supply of maintenance, repair

and operating products and safety products. With more than 250 outlets

we trade in Australia as Atkins, Bakers, Blackwoods, Motion Industries,

Mullings Fasteners and Protector Alsafe. Our businesses in New Zealand

are Blackwoods Paykels, Packaging House, NZ Safety and Protector Safety

NZ. We employ more than 3,000 people.

This is our first contribution to the Wesfarmers Environment, Health,Safety and the Community Report. It differs from the other businessunits in that we have no previously-set priorities against which to report.Safety statistics are for the last two years only. Our section covers thebusinesses whose logos appear on this page.

Our three main environmental issues are storage and handling of dangerousgoods, management of packaging waste and energy consumption.

We have reviewed our procedures for new products classified as dangerousgoods and made changes where necessary.

We are recycling packaging materials at our major offices and distributioncentres but there is still room for improvement. Wherever possible we arereusing incoming cartons to pack and dispatch goods to our customers.

To assist in data collection and to improve our knowledge of environmentaland safety issues, including energy consumption, we conducted a surveyof each of our 231 locations and received 219 responses. We intend toimprove this response rate next year.

Our two main safety issues are workplace injuries, in particular thoseresulting from manual handling, and compliance with our obligations inrelation to occupational health and safety.

When constructing new facilities we are taking the opportunity toengineer out, as far as practicable, any manual handling hazards and, inour existing facilities, we are assessing these hazards as part of the riskassessment programme.

We have a national Occupational Health, Safety and Environmentmanager and coordinators within each of our operating regions who havespecific responsibility for compliance issues.

1 July 01 - 30 June 03(as at 30 September 03)* Includes labour hire contractors



02 03

10.5 8.6

02 03

162 152

Wesfarmers Industrial and Safety

Team Leader Richard Pajor at theBlackwoods Distribution Centre,Smithfield, New South Wales.

Businessmanagement

TRAINING

All new employees are given a copy ofour environmental policy as part of theirinduction. The induction programme itselfhas been enhanced to include an overviewof the environmental managementsystems in place and their integrationwith other business practices.

Environmental, Health and Safety

Health and safety is also a significantmodule within our induction programmefor new employees. A review of themodule has resulted in the inclusion ofadditional material relating to:

• occupational health and safety(OHS) policies;

• risk management;

• dangerous goods handling and storage;

• hazard and incident reporting;

• manual handling;

• emergency response; and

• injury rehabilitation and management.

Inductions are also carried out forcontractors we engage to work in some ofour warehouses. Skilled Engineering, alabour hire contractor, is the largestsupplier to us for this purpose. Prior tocommencing work with us, these

contractors are put through a generalinduction that is designed and deliveredby Skilled Engineering. We also engagea number of contract delivery driverswho have not yet been put through asimilar process.

With each of our branches recently beingsurveyed, specific training needs tailoredto each location have been identified andplans put in place to facilitate training.

As a result of the introduction of a newrisk management process, safe operatingprocedures are being developed for specifichazardous tasks and relevant employeesare being trained in their use. Theseprocedures relate to a number of areas,including forklift, nail gun and circularsaw operation.

In New Zealand we conduct seminarsfor employees to provide information ontopics such as:

• implementing the Health & Safety InEmployment Act 1992 in the workplace;

• implementing Health & SafetyRegulations 1995 and guidelines;

• critical issues for safety in the workplace;

• managing occupational overusesyndrome and general office safety;

• noise management at work;

• hazard management practices; and

• accident reporting and investigation.

Our expertise in this area is reflected inthe fact that we are able to offer and

charge fees for seminars for external peopleon such topics. These seminars aretypically well attended.

EMERGENCY

Our major warehouse and distributioncentres have an emergency evacuationprocedure in place. We are currentlyassessing the needs of the rest of ourbusiness on a risk basis with the intentionof ensuring the emergency preparednessof these facilities is commensurate withthe risk associated with their activities.

In June 2003, fire warden training wasconducted at the Blackwoods MountWaverley branch with participation fromemployees based at our other Melbournemetropolitan branches. Emergencyevacuation drills were conducted invarious locations across Australia and inNew Zealand. Five of the 27 branchessurveyed conducted emergencyevacuation drills.

This year, several first aid training andrefresher courses were conducted.

In addition, training in the use ofemergency spill kits has commenced inVictoria and South Australia.

COMPLIANCE

Environmental, Health and Safety

We operate across Australia and NewZealand and as a result we need to



Branch Manager Steve Maxwell (left)shows the Blackwoods catalogue tocustomer Geoff Elliott at CanningVale, Western Australia.

comply with varying occupational, health,safety and environmental legislation.

We have a number of full-time specialistemployees and our safety committees andsafety representatives are drawn from ourwhole workforce. These employees haveaccess to the Intranet and occupationalhealth, safety and environment (OHSE)publications to ensure that the organisationis advised of the latest changes to legislationand other developments. Programmes suchas risk assessment, hazard identification,inspections, reporting and investigation,branch OHSE surveys and employeeconsultation form the basis of the systemsof work that, in turn, assist us inidentifying opportunities for improvementin OHSE compliance.

In South Australia, branch action plansaddressing legal compliance withregulation, codes of practice and AustralianStandards are in place.

There were no health and safetyprosecutions during the year. We did,however, receive six improvement noticesfrom government authorities involving:

• dangerous goods storage;

• obstruction around fire fightingequipment;

• obstruction to an emergency exit;

• forklift operations;

• damaged pallet racking; and

• pedestrian warehouse access.

All of these notices were resolved bythe relevant date.

Our largest branch, at Smithfield in NewSouth Wales, has undergone a completerefurbishment with new workstationsand computer equipment now installed.This process involved consultation withall relevant employees with regard torequired furniture and equipment.Individual training was also conducted foreach employee regarding the ergonomicset-up of their work area.


Relevant individual local governmentauthority licences and approvals are gainedwhen development applications are madefor the construction of new sites, or therefurbishment of existing ones. Dangerousgoods licences are held by those siteswhere it is a legislative requirement.

MANAGEMENT SYSTEMS


There has been continuous improvementand integration of our internet-basedOHSE systems. This process largely

involves consulting with key internalstakeholders to ensure that thosesystems support our business processes.The accident/incident reporting andinvestigation procedure incorporatesrequirements for managing bothenvironmental and safety incidents.The hazard and near miss reportingprocess allows for safety and environmenalreporting and requires senior managementreview of the identified corrective actions.Our audit and inspection procedurescover both environmetal and safetymonitoring requirements.

In the event of a lost time injury (LTI)occurring, reporting to our ManagingDirector is required within 24 hours andsubsequent investigations are required tobe completed by the responsible manager,with support from the OHSE coordinators.

In Australia the OHSE system wassubject to external scrutiny through thepremium discount audit schemes of bothSouth Australia and New South Wales.Our South Australian operationssuccessfully achieved level three statusand New South Wales successfully passedaudit level three of the process. Thisallowed us to obtain workers compensationpremium discounts in both states.

In New Zealand our OHS managementsystem was subject to its two-yearly audit



Manual handling is recognised as one of the most significant safety issuesconfronting our businesses. When we designed our new Blackwoods branch atMackay in Queensland one of our main priorities was the elimination of manualhandling, as far as practicable, from its activities.

The new building officially opened on 23 August 2002 with 2,434 square metres ofwarehouse and 456 square metres of office space. The warehouse incorporates acentral conveyor system which takes products to the dispatch area. At other branchesthis activity would involve an employee having to manually transport these items.

Detailed planning was also applied to determine where particular items should bestored. The faster moving line items were placed on the shelves closest to theconveyors and the slower moving product at the end of the rows to reduce thedistance the most frequently picked items need to be carried to the conveyor.

All shelves can be reached by employees without using ladders or steps, eliminatingthe need to manually handle items at a height.

We are now realising the benefits of ensuring that safety and productivity wereintegrated into the planning of this new facility. Not only has this produced positivesafety results but there has also been significant increases in productivity.Measured against 12 of our other branches, Mackay is the top performer in the areasof product moved per hour and cost per activity, with no manual handling injuriesreported to date.

CASE STUDYMaking

a difference...

Store picker Ken Waterson usingthe new central conveyor systeminstalled at the new Mackaybranch in Queensland to helpreduce manual handling injuries.

by the Accident CompensationCommission. The protective clothing,safety products and graphics factories areall currently accredited to the AS/NZS4801 Occupational Health and SafetyManagement Systems Standard. In NewZealand, our protective clothing andsafety products factories have currentISO 9000 quality system accreditation.

POLICY

During the year we reviewed andre-issued OHS, injury rehabilitation andenvironment policies. These policiesdocument our commitment to providea safe working environment for ouremployees, contractors and visitors, aswell as conducting our activities in amanner that does not adversely affect theenvironment. Other policies put in placeduring the year include those coveringdrugs and alcohol in the workplace andhealth assessments.

Environmental


Dust

In response to concerns raised byemployees at our Motion Industriesbranch in Revesby, New South Wales,testing for asbestos-related airborne dustwas carried out by an independentconsultant. The results of this testingshowed that no asbestos dust was present.

In New Zealand the graphics factoryundertook a fume monitoring exercise.This process was part of an ongoingprogramme and indicated that theextraction systems were workingeffectively.


Our greenhouse emissions were estimatedat 98,553 tonnes of carbon dioxideequivalent. Such emissions mainly relateto electricity consumption and fuel usagein our fleet vehicles.

Noise

Our New Zealand protective clothingfactory in Auckland undertook a noisemonitoring exercise which establishedmachinery noise levels. From the results,strategies were put in place to mitigatenoise levels that could, potentially,adversely affect operators.

WATER

Water consumption

Our main areas of water consumptionwere use in bathrooms and kitchens.As such we consider ourselves to be arelatively small user of water, but we donot have systems in place to accuratelymeasure usage.

WASTE

Solid waste

Contractors are used to regularly removeany solid waste from site. We do nothave accurate systems in place to quantifythe amount of solid waste we produceeach year. However, we are implementingwaste management plans for eachlocation which will help us in this areain the future. We will investigate thepossibility of becoming a signatory tothe National Packaging Covenant.

Liquid waste

Waste gear box oil generated as a resultof gear box servicing at some of ourMotion Industries branches is collectedand recycled by contractors.

Our canteens have waste cooking oilscollected and, where possible, recycledby contractors.

Recycling

Offices and distribution centres recyclewaste paper, cardboard and packagingmaterial. Whenever possible incomingcartons are reused to pack and dispatchgoods to our customers.

Our Mount Waverly steel processingdivision disposes of steel cut wastethrough a recycling contractor.

Following the roll-out of new computerterminals, our branches throughoutAustralia were faced with the disposal ofover 2,000 obsolete computer terminals.Equipment re-sellers were identified totake a small proportion of the terminalsand the remainder were delivered to awaste contractor who guaranteed 100 percent recycling of the obsolete equipment.

LAND

Contamination

We have not conducted any formalassessments in this area but we believethat, due to the nature of our businessactivities, land contamination shouldnot be a significant issue for us.

RESOURCE USE

Energy

Within our Australian operations themost significant energy resource used iselectricity. We intend to enhance ourdata collection processes to enable us toinclude information from our NewZealand business in future reports.

Fuel

The total consumption of fuel by our ownfleet of vehicles within Australia this yearwas 1,537,331 litres of petrol and diesel.

Electricity

We estimate that we used approximately13,534,001 kilowatt hours of electricity.

Safetyand health

LOST T IME

Our Lost Time Injury Frequency Rate(LTIFR) was 8.6 (compared with 10.5last year) and, during the year, there were52 LTIs. These statistics include labourhire contractor hours and injuries.Comparable statistics are not available forthe years prior to the Wesfarmers Limitedtakeover of Howard Smith Limited inAugust 2001.

Our Average Time Lost Rate, whichprovides a measure of the severity of suchinjuries, was 12.4 (compared with 14 lastyear). These statistics include contractorhours and injuries.

Safety statistics are distributed anddiscussed within management teams eachmonth and are reported to our boardevery two months.



Storeman Luke Wallace withthe 25 litre and 10 litrechemical containers, at aBakers warehouse inBlacktown, New South Wales,introduced to make manualhandling safer for employees.

Emergency response

We have a Crisis Management Plan inplace designed to respond to a wide rangeof possible emergencies. Our ManagingDirector and Chief Financial Officerare heading a team working on theconstruction of a business continuity plan.


Material handling involves the unloading,unpacking and storage of products ofdifferent dimensions and weight. Thisissue is considered when upgrading orbuilding new facilities with the intentionof eliminating or reducing, as far aspossible, the need for manual handling.Also, as part of the risk managementprogramme that is being rolled out,manual handling tasks at our existingfaciltities are being identified, theirpotential risk assessed and appropriatecorrective actions implemented. A rangeof mechanical aids for material handlingare available, the most common beingforklifts. Storage systems includeconventional warehouse storage shelving,pallet racking for bulky goods anddangerous goods stores with bunded floors,placarding, ventilation and intrinsicallysafe lighting.

Risk assessment

Risk management procedures have beenintroduced to identify OHSE hazardsand to assess their potential risk. Someassessments have already been completedwith control measures identified and


There were 152 workers compensationclaims reported, relating to occurrencesduring the year, compared with 162last year.

HAZARD AND RISK

Programmes

An OHSE branch survey was conductedby 219 of our 231 branches in Australiaand New Zealand. Process and/or taskrisk assessments have commenced ineach Australian region. These are beingfacilitated by the OHSE coordinators inconjunction with branch and regionalmanagers. Newly created “hazard/nearmiss” reporting booklets have beendistributed throughout Australia.A procedure, with supporting tools forOHSE audits and inspections, has alsobeen implemented. In New Zealand,hazard registers identify potential aswell as existing hazards and monthlyinspections (using checklists) provide ameans of documenting new hazards.These are then discussed and correctiveactions determined at health and safetycommittee meetings.

prioritised. The OHSE coordinators havedeveloped implementation plans to assistlocal management to extend this initiativeto remaining branches.

EMPLOYEE WELLBEING

The wellbeing of employees is veryimportant to us and policies have beencreated to assist in areas such as:

• health assessment;

• smoking;

• drugs and alcohol; and

• equal opportunity.

We conduct health assessments to assessan employee’s fitness to perform specificwork activities and to ensure pre-existingmedical conditions and/or disabilitiesdo not compromise the health and safetyof themselves or others.

We have an Employee AssistanceProgramme available externally throughOccupational Services Australia. Thisservice is confidential and free to employeesand members of their immediate families.It provides professional counselling inareas such as work problems, relationshipand/or family difficulties, alcohol or otherdrug abuse, grief and gambling problems.

Community

STAKEHOLDERS

Our major stakeholders are ouremployees, customers, suppliers, regulatoryauthorities and the shareholders of ourparent company, Wesfarmers Limited.

Our Blackwoods business currentlyconducts customer service surveys for bothregional customer service centres and anumber of major contract customers.



Warehouse Team Leader MarcelMoussa using an order picker atheight at the BlackwoodsDistribution Centre, Smithfield,New South Wales.

Greg Erceg using a pallet mover atthe Blackwoods Distribution Centre,Canning Vale, Western Australia.

The customer service centre surveysascertain service levels across the broadcustomer base and are conducted by anexternal provider with a random selectionof customers.

They are carried out as part of an annualcontract review process and are onlyimplemented after consultation with andagreement by the customer.

FEEDBACK/COMPLAINTS

Our branch survey did not reveal anycomplaints during the year.


Our Blackwoods branch in Canberraparticipates in the “ACT WorkCoverMake a Difference” programme. Thisinvolves our employees travelling toconstruction sites with WorkCover andassisting in the education of employees inthe construction industry regardingchoosing and maintaining appropriatepersonal protective equipment.

COMMUNICATION


We have a well-established monthlyin-house newsletter “WISBANG” that isdistributed to our employees and aimedat keeping our people informed regardingall key areas of business performance,including occupational health, safetyand the environment.

Internal monthly statistical safetyreporting to the management team hasbeen enhanced to include more detailedinformation on accidents, hazards andnear misses. Our “lessons learned”procedure allows us to share the learningsthat arise from any OHSE incidentinvestigation, or hazard report, with allof our employees.

Our Intranet site makes our OHSE policiesand procedures available to all employees.

Website

Our internet sites provide direct accessfor our customers to the material safetydata sheets relevant to the products thatwe supply.

Information about our operationsis available electronically at

www.blackwoods.com.auwww.blackwoods.co.nzwww.atkinscarlyle.com.auwww.motionind.com.auwww.bakers.net.auwww.protectoralsafe.com.au

www.protectoralsafe.co.nzwww.packaginghouse.co.nzwww.newzealandsafety.co.nz andwww.paykels.co.nz.

Liaison groups

We encourage our employees to beinvolved in relevant external liaison groups.For example:

• In Portland, Victoria, our ProtectorAlsafe branch manager is president ofthe “Portland & District Safety andHealth Group”. This group promoteshealth and safety in the communityby exchanging ideas and experiences,arranging conferences and discussinghealth and safety matters on local radio.

• In Canberra we are represented at thetwo-monthly Australian Institute ofSafety meetings. These meetings areattended by occupational health andsafety professionals from majorgovernment agencies, includingWorkCover.

COMMUNITY SUPPORT

During the year we provided support toa large number of community and socialorganisations. One of the key areas wasdisaster relief. As a result of the Canberrabush fire emergency over 500 homes weredestroyed. Our Protector Alsafe branch inCanberra, with assistance from suppliersProtector Technologies and Ansell,donated over 600 kits with safety glasses,disposable masks, ear plugs and protective

gloves. The kits were provided in the spaceof 24 hours of the bushfire and were usedto reduce hazard exposure for peoplesearching through damaged properties.

Our Protector Alsafe branch in Darwindonated safety glasses, protective glovesand dust masks to the Australian RedCross to assist in the response to theBali bombing tragedy.

Hundreds of our employees donated bloodthrough company-promoted programmes.

At Christmas, our Smithfield-basedemployees donated:

• approximately $2,000 worth of food,toys and clothing to the SalvationArmy; and

• an additional $1,169 to the WestmeadChildren’s Hospital.

We also sponsor community programmessuch as:

• SPC share-a-can appeal at Sheppartonin Victoria involving donation of goodsand services resulting in the cannerysupplying a day’s production to charity;

• donations to surf life saving clubs andother sporting clubs or functions;

• TAFE programmes; and

• WorkCover initiated educationprogrammes.


Improve our safety performance by at least halving our LTIFR each year with atarget of zero LTIs.

Reduce the number of manual handling injuries.

Ensure that each of our branches implements an OHSE improvement plan.

Implement the “PeopleSoft” human resources information system.

Improve our data collection procedures to identify opportunities to increase recycling.

Improve the data collection process for this report.




CSBPWe are one of Australia’s major suppliers of chemicals, fertilisers and

related services to the mining, minerals processing, industrial and

agricultural sectors. We operate a major industrial complex at Kwinana in

Western Australia and other complementary facilities in regional areas and

employ more than 500 people. CSBP Chemicals’ core products include:

ammonia; ammonium nitrate; sodium cyanide; chlorine; caustic soda and

sulphuric acid. CSBP Fertilisers manufactures, imports and distributes an

extensive range of phosphate, nitrogen and potassium fertilisers, in

blended, compound and liquid form.

Our three main environmental issues are reducing effluent discharges toCockburn Sound, remediation of our former operational site in Bayswaterand other legacy waste issues, and groundwater management.

We continued our wastewater recycling programme at Kwinana to reducecontaminant emissions to Cockburn Sound. We committed to the WaterCorporation’s Kwinana Water Recycling Scheme which includes effluentdisposal through the Cape Peron ocean outfall to discharge waste beyondthe waters of Cockburn Sound.

We continued our remediation work and investigations in relation tothe Bayswater contaminated site and obtained government approval fora Public Environmental Review process as part of the below-groundsite remediation.

Groundwater management initiatives included continued voluntaryreductions in our extraction licence allocation, extensive investigations andmonitoring of groundwater quality under our Kwinana site and the supplyof groundwater to Tiwest to allow it to reduce its scheme water use byapproximately one per cent of the total of Perth metropolitan surfacescheme water.

Our two main safety issues are workplace injuries and the risks associatedwith operating major industrial facilities.

We focused on a reduction in injuries and the need for all employeesto take responsibility for their actions with regard to safety and health.We showed significant improvement this year in workplace injuries,Lost Time Injury Frequency Rate (LTIFR) and days lost.

We initiated new risk assessment techniques, a new incident reporting andinvestigation system and reviewed business-wide risks and hazards andtheir management.

1 July 98 - 30 June 03 (as at 30 September 03)* Contractors included



99 00 01 02 03

3.2 1.7 5.8 8.8 5.4

99 00 01 02 03

43 39 33 34 22

CSBP

Our reduced use of scheme water wasrecognised in the Water Corporation’s“Water Hero” campaign. EnvironmentalAdviser Laurinda Shaw featured incampaign advertisements.

Businessmanagement

TRAINING

Our training and developmentcoordinator has assisted our businessareas in updating a training needsanalysis to improve the training requiredto meet safety, environmental andoperational needs. Competency periodshave been developed to identify whenretraining is required. A matrix is alsobeing formulated to assist the teams inmanaging training. Our training recordsare now stored in Sitesafe, our newelectronic incident reporting andmanagement system database.

Environmental

During the year we conducted oil spilltraining for representatives from ourmaintenance and emergency response teamsto ensure each area was prepared shouldan oil spill occur. Waste managementrefresher training was conducted forprocess areas on our main site at Kwinanain Western Australia. This provided theopportunity to outline our new wasteinitiatives, discuss our performance inthis area and reiterate how waste is tobe treated or disposed of.

Health

First aid training programmes continueto be operated to meet the specificrequirements of our operational staff andregional team. The focus of the trainingis to ensure that all business units haveadequate first aid skills to deliver the initialresponse should an emergency arise.

Health training is also provided throughthe monthly safety and health topics,by periodic health and fitness promotionprogrammes and through the availabilityof annual medical reviews.

Safety

A review of training requirements andexisting programmes across the businesswas conducted, which enabled thedevelopment of training matrices forthe delivery of safety-based training toall business units.

A safety representative programme hasbeen established to ensure ideas are sharedand appropriate training and support issupplied. Safety representatives attended aconference reviewing behavioural-basedsafety systems.

In an effort to encourage all employees totake responsibility for their own actions,all employees were informed in writingof their safety obligations. Training onbasic safety rules and safety tools

was conducted by team leaders acrossthe business.

Existing and ongoing safety messageswere promoted by the introduction of amonthly topic which was supported byvisual aids, signs and information packsdistributed to team leaders.

A full day induction programme isundertaken by all new employees. Safetyhas a prominent role in this inductionprogramme covering areas such as manualhandling, first response and general safetyinformation.

CSBP


Halve our LTIFR with particular focus on reducing our all injuries rate.

Continue to work towards a goal of zero contaminant emissions,and particularly in 2002/2003 progress our plans for a nutrientstripping wetland in Kwinana.

Continue to work safely and effectively to deal with our historicwastes by 2006.

Progress safety management systems for our major hazardousfacilities.

Manage our groundwater to protect the resource and water quality.

Maintain our contribution to the social wellbeing of the WesternAustralian community.

Our LTIFR for employees was 5.0 compared with 9.7 last year.We successfully reduced workplace injuries from 103 to 49.

Most of our recorded contaminant emissions have reduced orremained the same, however our nitrogen emissions to CockburnSound increased. A final design and capability plan prepared for anutrient stripping wetland in Kwinana.

We treated and/or disposed of significant quantities of acidic andheavy metal wastes and progressed the Bayswater site remediation.

We revised our four major hazard facility Safety Reports forconsideration by the Department of Industry and Resources, two ofwhich were endorsed and two of which are still under consideration.We commenced development of a formal Risk and Hazard Register.

Our groundwater resource use was well within licensed allocationsand quality remained satisfactory. The Water Corporation selected usas a “Water Hero” for its water conservation campaign.

As a major employer and a major purchaser of goods and servicesin Western Australia, we continue to have a strong communityprogramme based around our major operations.


Emergency Response Coordinator AndrewJenner (left) and Environmental CoordinatorDaryl Colgan examine one of the safety postersat Kwinana put up around the site as part ofCSBP’s safety education programme.

Emergency

We focus our emergency responsefunction on two main areas - the abilityto respond in the case of an industrialor medical emergency at our sites andthe stewardship of our products inthe community.

Where our products are involved inincidents in the community we havethe capacity to provide technical andoperational support to our clients and togovernment agencies. During the year weconducted a number of exercises involvinglocal communities and emergencyservices agencies.

We also continued the development ofoperator first response strategies designedto improve the response time in the eventof an on-site incident.

Emergency response activation nowuses text messaging through the mobiletelephone network to provide betterflexibility and improved communications.At both Kwinana and our regionaloperations we maintained strong linkswith Western Australia’s emergencymanagement authorities which are akey part of our response strategies.

COMPLIANCE

Environmental

A number of laws and regulations applyto our business operations. We reported13 potential non-compliances duringthe year:

• Five related to stack testing and resultsfrom our sodium cyanide solids plant.Testing was difficult due to the limited

and interrupted production of the plantduring commissioning and testing wasnot able to be conducted three times.In a further two instances, ammoniaresults were above the limit for the solidsstack but below the limit for the totalallowable emissions from the productionfacility including both the solids andliquid plants. The Department ofEnvironment (DoE) acknowledgedthese events to be part of thecommissioning process. We are stilldiscussing the elevated ammonia levels;

• Four related to wastewater dischargesfrom the sodium cyanide solids plant.Two of these related to missed analysisfrom the solids plant discharge intothe containment system which wasconfirmed to be within licence

limits from our containment systemmonitoring. The other two non-compliances related to dischargesfrom the plant. One of these relatedto a discharge being outside thepH range which had no impact onthe containment system or dischargeto Cockburn Sound. The otherwastewater discharge had an elevatedcyanide level. This wastewater wascaptured and returned to the plantprior to reaching the containmentsystem. Both of these discharges hadno environmental impact. We havemade engineering and proceduralimprovements to the wastewaterdischarge system. DoE has advisedno further action will be taken inrelation to the missed analyses andissued a letter of warning in relationto the unplanned discharges to ourcontainment system;

• One related to an oxides of nitrogenanalyser on our sodium cyanide plantbeing offline for a period of time.We continue to discuss this issuewith the DoE;

• One related to the loss of an analyserat our wastewater monitoring stationdue to an electrical storm. DoE hasadvised that no further action willbe taken;

• One related to missed groundwatersampling at our Esperance site. DoEhas subsequently advised that it hasnoted this issue and there was noenvironmental impact; and

• One related to conducting a stack testfor the month of April one day late(i.e. 1 May). Two stack tests wereconducted in May which were bothbelow licence limits. DoE has advisedthat no further action will be taken.

CSBP


Safety and Health Adviser, RobBurns (left) and Ammonia PlantOperator, Ashley Coulter, practisea confined space entry.


Our third NPI report was submitted inSeptember 2002 with the results appearingon the NPI website www.npi.gov.au.The Kwinana Industries Council (KIC),of which we are a member, commissioneda study to assist in interpreting theemission results. The report is availableon CD ROM and has been distributedto interested industry and communityorganisations and will be available on theKIC website (www.kic.org.au) in late 2003.

Health

All members of the emergency responseteam were medically and physicallyassessed to be fit for this role in accordwith the Department of Industry andResources (DoIR) Standard, Fitness forEmergency Response Personnel.

All new employees and employeestransferring within the business undergo a pre-employment medical.

Monitoring for all potentially harmfulsubstances occurs where appropriate.

Safety

All operational areas are audited againsttheir safety action plans annually.The results of these internal audits arereported to executive management.External audits of our major hazardfacilities occur every 18 months.

We are not aware of any official enquiries,prosecutions or official complaints againstus in relation to our occupational safetyand health activities.


All relevant licences, including Watersand Rivers Commission, EnvironmentalProtection, Poisons Act, DangerousGoods and National Industrial ChemicalsNotification Assessment Scheme licences,were renewed. In addition, a number ofapprovals were sought and receivedrelating to specific projects.

These included the:

• importation of sulphuric acid at theAlbany Port;

• production of Flexi N (liquid fertiliser)at Esperance;

• use of a fungicide coating for fertilisersat Kwinana, Albany, Bunbury andGeraldton to assist farmers in theefficient application of fungicide;

• supply of artesian groundwater toTiwest as part of our Kwinana waterresource programme;

• setting of a Public EnvironmentalReview as the level of assessment underthe Environmental Protection Act forthe Bayswater remediation; and

• export of anhydrous ammoniafrom Kwinana.

Final waste acceptance certificates for the2002 disposal of arsenic-contaminatedwaste to Mt Walton East were not receivedby June 30 due to the governmentchanging its administration of the site.

We liaised with the DoIR on changes toour dangerous goods licences and relatedissues. We received approval for thestorage of chemicals associated with ourammonia/arsenic groundwater treatmentplant. Our four safety reports for ourmajor hazard facilities were revised withtwo being endorsed, and the other twoare under review by the DoIR.

MANAGEMENT SYSTEMS


We continue to utilise software to assistus in managing our EMS. Our system isconsistent with the international standardISO 14001. We will consider accreditationto ISO 14001 in the future, based onbusiness needs. The formulation ofenvironmental action plans by eachbusiness unit is used as a tool to ensurethat environmental risks are identified andaddressed and that we continue to improve.These environmental action plans arepresented to senior management on aregular basis.

Our EMS identifies the following aspectsand impacts as the most importantmatters for management:

• effluent discharges to Cockburn Sound;

• our Bayswater site and other legacywaste issues; and

• groundwater across all sites.

Our activities in these areas are detailedin the relevant sections of this report.

Quality system

We maintained our certification toAS/NZS ISO 9001:2000 for the chloralkali and ammonium nitrate processes.This involved two satisfactory externalaudits. We also maintained an internalaudit programme on our Quality, Safetyand Environmental systems. We conducted15 internal audits during the year.

Our continuous improvement focusunder our quality system resulted in theintroduction of bronze valves at the chlor

alkali plant to reduce the potential forcorrosion and the need for maintenance.All of the chlorine drums and 75 per centof the chlorine cylinders have had bronzevalves fitted. The remainder of the cylindervalves will be replaced as they are returnedover the coming year.

Our Kwinana laboratory continued tofoster a culture of continual improvement.The auditing programme with otherlaboratories to assist in benchmarkingcontinued during the year with auditsconducted with two neighbouringcompanies. In addition, our laboratory wasaudited to assess conformance to AS2243– Safety in Laboratories. Opportunitiesfor improvement were suggested with 12prioritised as urgent of which all are beingactioned. Two safety incidents during theyear have resulted in the construction of anew gas compound to meet AS 2243.10,and the introduction of a mechanicaldevice to assist with bore sampling.

The laboratory continued to maintainaccreditation by the National Associationof Testing Authorities (NATA). Allconditions resulting from the audit havebeen met except for one that is beingaddressed over the next 12 to 18 months inassociation with the introduction of a newNATA standard relating to measurementuncertainty (AS/ISO/IEC.17025 1999).

CSBP


Manager, Quality Systems, Santa Zanotti,and Emergency Response and SiteServices Coordinator Ray Chittenden, bothmembers of the Incident Control Team(ICT), participate in an emergency scenariopractised regularly as part of the ICT.


The past year saw the introduction ofSafety Action Plans (SAPs) which involveall departments meeting critical objectiveswith detailed deliverables andresponsibilites. Most of the plans wereaudited during the year. This new toolsimplified the method by which a numberof objectives are met and focused allgroups on the delivery of safety.

The introduction of a simple safetyrecording data base (Sitesafe) has alsoimproved the access of all employees toinformation regarding incidents andhazards identified in their place of work.

Our programme of developing a formalrisk and hazard register is progressing wellwith a number of large risk assesssmentsbeing completed this year. The objectiveis to have the whole business assessed byJune 2005 including reviewing our existingassessments in significant areas of risk.

We have four major hazard facilities, asdefined under the Worksafe NationalStandard “Control of Major HazardousFacilities”. These are our ammonia,sodium cyanide, chlor alkali andammonium nitrate plants and associatedfacilities. As part of this Standard each ofthese facilities has a safety report whichdescribes the major risks and how theyare managed. These reports are submittedto the DoIR for endorsement and areexternally audited on a regular basis.Our ammonia and sodium cyanide safetyreports were endorsed last year. This yearour revised chlor alkali and sodiumcyanide safety reports were also endorsedby the DoIR with structural andformatting changes from previouslysubmitted drafts. We have modified allour safety reports to adhere to this newstructure. At 30 June 2003 we wereawaiting feedback and approval from theDoIR on our revised ammonium nitrateand ammonia safety reports.

As part of our SMS we conductQuantitative Risk Assessments (QRAs) forour major hazard facilities. These QRAsare updated when we make significantchanges to our processes. For example,an update to our QRA occurred as partof the approval process for ammoniaexport. To further advance our QRAwe have included the risk assessment ofmiscellaneous pipelines on our Kwinanasite - pipes that traverse our site butbelong to others. In addition we haveinitiated a re-assessment of thecumulative risks from our sites includingreviewing the potential domino effectfrom any individual possible incident.

As a producer of raw materials forexplosives and a range of other potentiallyhazardous chemicals, we have initiatedimprovements in security in some highrisk areas in response to global terrorismconcerns. Access to our ammoniumnitrate area has been restricted furtherand on-site security has been reviewedand upgraded.


POLICY

We have a number of policies that outlineour commitment to environmental, health,safety and community issues as part of ourbusiness operation. Our environmentalpolicy was reviewed to ensure that itremained applicable and met the generalrequirements of ISO 14001 and ourbusiness needs.

We remain a committed member of thePlastic and Chemicals Industry Association(PACIA) and adhere to the principles of“responsible care” which addresses safetyand environmental issues of the globalchemicals industry through codes thatoutline best practice in the areas of

• employee health and safety;

• manufacturing safety;

• transport and storage safety;

• the community’s right to information;

• product stewardship; and

• environmental protection.

We reviewed our conformance to thesecodes through self-assessments duringthe year with satisfactory compliance.As an active member of PACIA we arerepresented at board level, on the chemicalscouncil and in various working groups.

We are also an active member of theFertilizer Industry Federation of Australia(FIFA) which represents manufacturers,importers and distributors of fertilisersin Australia. We are represented atBoard level, and on various workinggroups. FIFA’s role is to effectively manageissues that are common to memberswhere an industry-wide approach islikely to be effective. Its three strategicplatforms include environment andfood safety, import and logistics, andregulatory affairs.

We regularly contribute to the formulationand review of public policy as we currentlyhave representatives on a number ofgovernment or industry groups dealingwith environmental management andpublic safety.

EnvironmentalWe have a quality assurance manual thatoutlines our methods and practices tosample, collect and manage ourenvironmental information. During theyear we initiated a review of this manualto ensure it covered more than justlicence compliance and improve itsstructure. The report will be finalised in2003 and will then be submitted to theDoE for review.


Please note that data in this section isgenerally obtained from point sourceemissions and will differ slightly fromthose reported as part of the NPI becauseof the way in which the NPI uses standardassumptions, in part, to calculate potentialemissions we have difficulty measuring orcannot measure. In some areas we do notexceed NPI thresholds and we are thereforenot required to report in the NPI.

Dust

Dust from all sources reported under theNPI was 237 tonnes. This is based oncalculations from the NPI associatedwith the amount of unsealed surfaces ormaterials on our sites.

Odour

We had nine complaints during the yearrelated to emissions from our granulationplant at Kwinana. The emissions weresampled on a monthly basis and werewithin all licence limits. We continue toinvestigate potential causes of the changethat can sometimes occur in thepersistence and odour of the stackemission and additional testing beyondthe licence requirements has beenperformed. The results for all parametersindicate that no occupational healthexposure standards were exceeded.

Our superphosphate fertilisermanufacture plant in Bunbury ceasedoperating in April 2003. We had threeodour complaints related to this plantduring the year prior to its closure.We continue to contribute to an odourstudy with other Australian companies to reduce potential odours fromsuperphosphate rock production.


We generate greenhouse gases fromour industrial processes (principally ourammonia and nitric acid plants), vehiclesand some of the raw materials we use.Nitrous oxide continues to be a significantportion of our total greenhouse emissions.

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We regularly measure nitrous oxide fromour nitric acid and sodium cyanide plants.We also continue to review internationalresearch of technological improvementsto reduce emissions.

Our 2002/2003 greenhouse emissionstotalled 1,282,834 tonnes of carbondioxide equivalent. This increase from2001/2002 is due to increased ammoniaand nitric acid production and higherconcentrations of nitrous oxide from thenitric acid plant. We are continuing toreview the concentration increase withour technology supplier.

As part of our membership of theCommonwealth Greenhouse Challengeprogramme we submitted our 2001/2002report during the year which reported787,000 tonnes carbon dioxide equivalentemissions. This is higher than the702,000 tonnes mentioned in this reportlast year because we reviewed our databaseand recording systems after publication totake account of suggestions contained inthe external verification of our 2000/2001Greenhouse Challenge Report. The2001/2002 report received a satisfactoryexternal audit from the same auditor.

Noise

We are a member of the KwinanaIndustries Council (KIC) noisemanagement group and the NortheastRockingham Noise Reduction Group.We received one noise complaint duringthe year which could not be substantiatedas being generated from our site. Wecontinued to conduct regular noise surveysand they showed that last year’s reportedimprovements had been maintained.

Other emissions

Oxides of Nitrogen (NOx)

We continue to operate within licencelimits for emissions of oxides of nitrogen(NOx) from our sodium cyanide andnitric acid plants. The NOx analyser inthe sodium cyanide liquid plant wasoffline for a period of 69 hours due toan instrument failure during May 2003.The plant was operating steadily duringthis time with other parameters confirmingthat emissions were also steady. We werejust below our licence limit of 90 per centavailability (86 per cent) and we havereported this to the DoE.

Particulate

Our ammonium nitrate particulateemissions from our prilling plant werebelow licence limits for the dryer,predryer and tower stacks (licence limitsof 0.35g/m3, 0.25g/m3 and 0.25g/m3

respectively) (see Figure 1). We continueto investigate technological options forreducing emissions from this plant.Progress on emission management isdiscussed with the DoE on a regularbasis. We did not complete the emissionmodelling discussed in last year’s report,but this will be conducted next year.

Sulphur Dioxide

We no longer manufacture sulphuricacid at any of our sites. Our Albany andKwinana sulphuric acid plants weredemolished during the year and ourEsperance plant is expected to bedemolished by 2006. Sulphuric acid isimported into Kwinana for the productionof superphosphate fertiliser and use invarious industrial applications.

Chlorine

Our chlor alert monitoring system wasactivated 113 times during the year.These monitors are situated throughoutthe chlor alkali plant and sound an alarmwhen chlorine is detected (they are set atlevels well below that at which health canbe impacted). Due to the sensitivity ofthese meters the chlor alerts can often becaused by normal operating conditions andpreparation of equipment for maintenance.We continue to work with the DoIR toupgrade the plant to meet containmentstandards that were introduced severalyears after the plant was constructed.

WATER

Consumption

During the year we continued tocommunicate with neighbouring industryand the Water Corporation (WAWC) tofinalise details relating to the Corporation’sKwinana Water Recycling Project.The project will reduce industrial use ofscheme water through reuse of treatedwater from the Corporation’s wastewatertreatment plant at Woodman Point.This initiative will release a significantamount of water for use elsewhere in thePerth metropolitan area. In addition,when fully operational, the project willenable us to cease contaminant dischargesto Cockburn Sound with the exceptionof rainfall events, maintenance or unusual

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FIGURE 1: PRILL PLANT STACK EMISSIONS (GRAMS PER CUBIC METRE)

Jan-Jun 96 96/97 97/98 98/99 99/00 00/01 01/02 02/03

Tower 0.012 0.014 0.013 0.021 0.024 0.028 0.015 0.020

Predryer 0.453 0.235 0.177 0.132 0.080 0.186 0.117 0.114

Dryer 0.336 0.363 0.253 0.138 0.168 0.127 0.145 0.094

Demolition of the 92metre stack at the sulphuricacid plant at Kwinana.

conditions. The plant should be completedin 2004 and the ocean discharge ofindustrial emissions (relocated fromCockburn Sound) with the existingWAWC waste water effluent, will beassessed by the Environmental ProtectionAuthority (EPA) in 2003.

Our use of scheme water has continuedto decrease over recent years through theapplication of reuse options on-site andwith neighbouring industry. Our effortswere recognised by the Water Corporationwhen we were selected to be a part oftheir “Water Hero” campaign during theyear as an example of a company that hasimproved management of water.

We extract groundwater from theTamala (superficial) and Yaragadee(sub-artesian) aquifers.

During the year we gained approval tosend sub-artesian water to neighbouringindustry to replace the use of scheme waterin their processes. Hence our extractionof sub-artesian groundwater has increasedwith net benefits in a reduction of schemewater from our neighbours (see Figure 2).When the water recycling project is fullycommissioned in 2004 our joint effortswith other industry should redirect twogigalitres per annum back into the schemewater system, compared to water usein 1999.


Activities on all our sites are focusedon minimising discharges to surface andgroundwater which we continue tomonitor at all sites.

Our Bunbury site continued to reusewastewater within the plant and forirrigation purposes. There were nodischarges to the Preston River. Wecontinue to monitor the Preston Riverupstream and downstream of our site.

Our contaminant discharges to PrincessRoyal Harbour from our Albany siteremained low. Nitrogen levels decreasedslightly from 2,510 kilograms (kg) lastyear to 2,412kg this year. Phosphorous

remained below 100kg as it has been forthe past five years. Fluoride levels reducedfrom 358kg last year to 285kg this year.We continue to explore options to reduceour discharges to Princess Royal Harbour.As part of this investigation we arereviewing the potential for reuse withinthe plant and we continue to liaise withthe Water Corporation and other industriesregarding the potential for connection tothe reticulated mains sewerage system.

At Kwinana:

• discharges of metals have remained lowand have reduced from last year withthe exception of manganese whichincreased slightly from 17kg last yearto 24kg this year (see Figure 3);

• nitrogen discharges have increasedfrom 30,245kg last year to 38,606kgthis year; and

• phosphorus discharges have alsoincreased from 4,986kg last year to7,252kg this year.

Both the nitrogen and phosphorusincreases are linked to changes in theproduction profile of our granulatingplant and increased transport of materialsaround site. All of these emissions remainwell below our daily licence limits.

We have emphasised the importanceof good housekeeping and are reviewingmany activities on-site that may havecontributed to this increase as a resultof increased transport of product on-site.We also prepared detailed plans for anutrient stripping wetland that wehope to initiate as a pilot project nextyear. We have already ordered thenecessary seedlings through a community-based nursery.

Reuse

Over recent years the implementationof the principles of reduce, reuse andrecycle have assisted us in reducing ourwastewater discharges and divertingwaste from landfill. We endeavour toreuse waste within and between plants.

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FIGURE 3: HEAVY METAL DISCHARGES TO COCKBURN SOUND (KG/YR)

98/99 99/00 00/01 01/02 02/03

Arsenic 382.0 1,232.7 11.9 5.9 4.6

Copper 2,030.5 333.8 102.6 5.7 1.4

Manganese 158.0 237.3 98.7 16.9 24.5

Molybdenum 623.5 525.7 145.2 3.4 1.2

Zinc 0.2 470.1 589.3 996.1 862.7

FIGURE 2: ANNUAL TOTAL EXTRACTIONKWINANA WORKS (MEGALITRES)

99/00 00/01 01/02 02/03

● Volume extracted

1,334 984 1,867 2,756

● Licence limit

5,760 5,760 5,760 5,760

Targets (kg/yr) for 2002/2003 calculated from the Monthly Average Daily Load limit contained in our EP Act Licence wereArsenic 16.4kg, Copper 87.6kg, Manganese 87.6, Molybdenum 365kg, Zinc 1825kg

Adam Speers, Environmental Adviser(left) and Dr Rob Holmes from theDepartment of Environment on aremediated area formerly containingarsenic-contaminated soil at Kwinana.

Our superphosphate plant reuses all thewastewater it produces and with additionalengineering changes can now acceptwastewater from other areas when itmeets process guidelines. Our nitric acidplant collects and stores wastewatergenerated on start up for reuse within theplant and, whilst running, any wastewaterproduced is directed to the granulationplant for reuse. Approximately 10,000kilolitres of water were reused this year.

WASTE

Solid waste

We continued to reduce our wastestockpiles. Our initiatives during theyear included:

• removal of neutralised fluoride-containing residues from our Bunburysuperphosphate plant to an approvedlandfill;

• supplying Alcoa with 6,800 tonnesof gypsum for reuse as a fertiliser ontheir rehabilitation areas and fortreatment of bauxite residue;

• using sulphur filter residues fromour former Kwinana sulphuric acidplant at our Bunbury facility forsuperphosphate manufacture (priorto closure);

• treating and safely disposing of 750tonnes of lead sulphate waste fromour Esperance site;

• recycling of approximately 11,500tonnes of scrap metal from oursulphuric acid plant and disposal of7,200 tonnes of waste to landfill;

• treating and safely disposing of 3,043tonnes of acid plant bricks from ourAlbany site; and

• excavating and safely disposing of2,934 tonnes of arsenic-contaminatedsoil from the area of our decommissionedammonia plant at Kwinana.

A revision of the EP Act ControlledWaste Regulations occurred in the latterhalf of 2002/2003. We contributed tothe public review of the proposedchanges. After the new legislation isgazetted, we will modify our wasteprocedures to reflect the new requirements.Next year we will be initiating an auditprogramme of disposal sites where wesend our wastes.

We are an active member of the KICSustainability Group. This group isreviewing the potential for synergiesbetween industry in the areas of waste andenergy to harness potential improvements

in efficiency and contribute to thesustainability of the region. The wastemanagement group has conductedinterviews and surveyed local industryon waste production, recycling anddisposal with a view to improved inter-industry coordination.

During the year we submitted ourcleaner production action plan as part of our commitment to the WesternAustralian Centre for Cleaner Production.This plan outlines our objectives andprojects in implementing the principlesof cleaner production in our organisation.The plan is available on the WesternAustralian Sustainable Industries Groupwebsite www.wasiq.curtin.edu.au.

Liquid Waste

We reuse and recycle a number ofliquid wastes, including wastewaterreferred to earlier in this report, on site.Disposal of liquid waste off-site is oftendue to cleaning of sumps and drains orthe result of a pump failure. All wastetreated and disposed of is done inaccordance with regulations andour licences.

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Process Improvement FacilitatorChris Grove places a hard hat into aspecific purpose recycling bin.

Recycling

We have a number of programmes on sitewhich involve recycling and reuse of officewaste as well as drums, batteries and metal.During the year we recycled 187 tonnes(compared with 392 tonnes last year).Last year’s figure included 232 tonnes ofscrap metal recycling from a demolitionof a section of our old ammonia plant.This year, and in future years, recyclingfrom demolition projects will be includedin the solid waste section. Waste disposedto landfill increased from 338 tonnes in2001/2002 to 447 tonnes this year.

During the year we implemented a hardhat recycling initiative. The hard hats willbe reprocessed by a Western Australianmanufacturer to produce road bollardsand other plastic items. An upgrade tocomputers at our Kwinana site wasinitiated in June 2003. We reviewed thewaste generated from this project andimplemented polystyrene recycling.Polystyrene is compacted and reused.Cardboard was collected as part of ouron-site recycling collection system.All workable computers will be sent to a company for recycling.

In June 2003 we organised a stakeholder forum to review the draft of our 2002/2003environment, health, safety and community report. This initiative was part of ourimprovement plan developed in consultation with SMEC, the independent verifiersof this report to enhance the level of stakeholder input and feedback on the report.

The objectives of the forum were to seek input on stakeholder expectations of thispublic environmental reporting process and assess the proposed content of the2002/2003 report for feedback on the ability of the report to meet those expectations.A complementary objective was for us to explain our performance against the variouselements in the report and indicate where continuous improvement was required.

Over 40 representatives from the community, our neighbours, suppliers and governmentagencies attended. We received useful feedback on the structure and content of thereport. The attendees will receive a response to their comments prior to the publicationof this year’s report and a copy of the final report will be sent to attendees.

During the forum issues either related to our activities, outcomes or structure of thereport and full responses were provided. Senior representatives from Wesfarmers werepresent to hear the commentary, respond to it and accept it for consideration in futurereports. The attendees were able to critique the actual data and trends to be includedin this report following presentations from our key staff which in turn allowed us tomake some amendments to the manner in which information is provided.

Amongst the comments made was the need to consider public safety and securitymanagement and to explain how we respond to complaints. Information on thesetwo issues have been included in the report. We will repeat this endeavour in2004 for the 2003/2004 report.

CASE STUDY

LAND

Flora and fauna

We continue to be a member of theFeral Pigeons Control Group and duringthe year we continued to bait and cullpigeons at our Kwinana site and reducepotential food sources.

Our Wellard Road site at Kwinana wasimpacted by a severe wildfire. We havealmost completed our negotiations withthe Department of Conservation andLand Management for most of the siteto be managed in accordance with thesurrounding conservation lands. We arecontinuing our groundwater monitoringon and off the site and have identified noenvironmental or public health impactsfrom the site. The most extensiveprogramme relates to finding reuse optionsfor the gypsum stored there. We removedsome 6,800 tonnes during the year andhave several proposals under discussion.

Contamination

During the year we progressed theremediation of our former operational

site in Bayswater in preparation for futureland development. The remediation projectwas referred to the EPA for setting thelevel of assessment under the EP Act. Weare now preparing a Public EnvironmentalReview (PER) document and we hope theassessment will be concluded in mid-2004.However, most of the processes are out ofour direct control. Copies of our completedsubmissions will be made available onour website (www.csbp.com.au).

We have committed ourselves publiclyto fully remediating the site to make itsuitable for future industrial/commercialland use. The PER will contain severalpotential remediation techniques whichwill probably be used in some combinationthrough the project. Our preferred methodfor the majority of the site is to reusethe iron cinders that form most of thewaste. We are reviewing several potentialoptions. It will be our most significantenvironmental project for several years.

We acknowledge that our handling of thisissue has attracted criticism during theyear. We believe this to be unwarranted.Extensive studies by us and various

government agencies over many years,including studies completed in 2003, havedetected off-site groundwater movement,but no discernible environmental orpublic health effects from the site.

We have disclosed this contamination inprevious reports and have never waveredin our commitment to fully remediatingthe site. Since 1986 we have removedabout 12,000 tonnes of waste and from1998 we have spent more than $5 millionon waste removal and preparation for thefinal remediation work. During the yearwe conducted an extensive survey ofdomestic bores in the area of our site andfound only one that was negativelyimpacted by contamination potentiallyfrom our site. We have agreed in goodfaith to relocate that bore.

We publicly committed to full release ofour consultant’s report on the groundwatercontamination under our site. We delayedpublication because we believed thatto publish it before we had had theopportunity to test domestic bores in thevicinity might have caused unnecessaryalarm among nearby residents.

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Ian Hansen, General Manager, ChemicalsBusiness, (right) with a group of stakeholdersduring a tour of the ammonia plant before thestakeholder forum held at Kwinana in June.

As the PER process moves forward in2003/2004 there will be extensivecommunity consultation around ourplans and activities. A communityinformation bulletin has recently beenpublished as part of this consultation anda copy is available on our website.

New legislation addressing contaminatedsites is progressing through parliamentand is expected to be gazetted next year.We have a number of sites which arepotentially contaminated from pastpractices and next year we will beinitiating an assessment programme toallow classification of our sites under thenew legislation.

We have progressed on assessing ourhistoric waste disposal sites at ourEsperance works and the site is now inour historic waste management plantargeted for completion by 2006.

During the year we removed anddisposed to appropriate landfill soilwhich was contaminated with arsenicfrom the decommissioned ammoniaplant at Kwinana.

We received regulatory approval for theKwinana ammonia arsenic groundwaterplume remediation last year and we haveprogressed with construction of plantduring the year. At 30 June 2003 thewastewater treatment plant for theammonia/arsenic groundwater plume was

still being constructed after some delayscaused by technical difficulties related tothe saline water under the site. The plant,which will extract, treat and return thegroundwater, should be in use by theend of 2003.

RESOURCE USE

Energy

Our operations use energy in the formof natural gas and electricity, most ofwhich can be related to our processes.

Fuel

We use fuel in our fleet of vehicles andmachinery. We used 242,129 litres ofpetrol and 89,627 litres of LPG in ourfleet of 138 vehicles during the year.

Electricity

We used 29,187 megawatt hours ofelectricity of which a large percentagewas generated internally. A proportionof this comes from steam turbinespowered by waste heat released from thechemical processes.

Raw materials

Our essential raw materials are naturalgas, phosphate rock, sulphuric acid, waterand the ammonia we manufacture fromnatural gas.

Safetyand health

LOST T IME

Our Lost Time Injury Frequency Rate(LTIFR) for employees was 5.0 (comparedwith 9.7 last year) and, during the year,there were five LTIs. Including contractors,our LTIFR was 5.4 (compared with8.8 last year) and, during the year, therewere eight LTIs.

Our Average Time Lost Rate, whichprovides a measure of the severity of suchinjuries, was 9.8 for employees (comparedwith 19.4 last year). There was a majorimprovement in the number of workplaceinjuries with a reduction from 103 lastyear to 49 this year.

Safety statistics are reported to executivemanagement each month and to ourBoard every two months.


There were 22 workers compensationclaims reported, relating to occurrencesduring the year, compared with 34 last year.

HAZARD AND RISK

Programmes

We have commenced preparing aformal risk and hazard register for use inoccupational and public safety planningand the first review will be completednext year.

Emergency response

A number of desktop exercises have beenconducted during the year, together withfull on-site and off-site training exercises.

Our emergency teams responded to twooff-site tanker incidents and attended anumber of chlorine leaks in themetropolitan area and regional locationsas far away as Broome. Most of theseincidents did not relate to our equipmentor operations.


All raw material and manufacturedproducts are safely stored and transferredaround our operations.

With over 2,000 chemicals approved foruse, we have embarked on a process ofreviewing chemical management withinour operations as part of our formal riskand hazard register.

This includes protocols for control ofchemicals introduced to the work

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Martin Lindsay, Manager,Laboratory Services, movinga gas cylinder from the newgas compound.

environment, our chemical approvalprocess, availability of safety data, usagerisks and storage. We hold all requiredlicences and permits for our operations.

Risk assessment

During the year we further developedour programme of risk assessment.The system now works on two levels.The potential public risk from our majorhazard facilities is assessed by the use ofQuantitative Risk Assessments (QRAs).The QRA process continued throughoutthe year and will be completed in 2003.The process of Team Based RiskAssessments continued throughout theyear with assessments completed in anumber of our large operations andsupport areas, including the Albany works,the laboratory, the ammonia loadingfacilties and for many specific projects.

Employee wellbeing

Our professionally-staffed first aid centreis the central area for a large number ofsupport services and programmes aimedat improving employee wellbeing. Thecentre runs a number of special health-focused programmes, such as professionalcounselling, health awareness topics, fitnessprogrammes and assessments, audiometrictesting, immunisations, subsidies forhealth club memberships, on-site Pilatesclasses, fitness sessions at the beach andhealth programmes looking at risk factors.

Employees who do suffer work or non-work-related injury or illness have accessto a full range of support networks toensure they are provided with anadequate return to work programme.

Community

STAKEHOLDERS

Our main stakeholders include ouremployees, customers, suppliers, the localcommunities in which we operate andthe shareholders of our parent company,Wesfarmers Limited.

We acknowledge the community’sinterest in our operations and we arecommitted to open communicationswith our stakeholders:

• we consulted with local governmentsand regulators on plans for thetransport of ammonium nitratesolution to Esperance;

• we presented information to theKwinana Community & IndustriesForum explaining the steps necessaryto allow the export of ammonia bychanging the equipment on theexisting import facilities at Kwinana;

• we participated in the KwinanaIndustries Public Safety Liaison Group,which meets in a public forum involvingcommunity and regulatory stakeholders,to review public safety issues;

• through the Kwinana IndustriesCouncil, we supported the creation ofthe Community Information Service, a telephone-based service that providesaccess to a range of informationabout industry;

• we are an active member of FIFA andPACIA with participation at Board andChemicals Council level - this is a keypart of our industry leadership in

assisting to develop new policies andapproaches; and

• we organised a stakeholder forumattended by community, governmentand industry representatives to discussand provide feedback on our reportingprocess. This is covered in more detailin the Case Study report on page 64.

As a member of the KIC we facilitatecommunity attitude surveys whichprovide an insight into the concerns andinterests of the local community on anongoing basis.

During December 2002 we conducteda tour and presentation for localgovernments and community interestgroups in the Kwinana region andprovided updates on our operations andenvironmental improvement initiatives.

During the year we continued ourprogramme of hosting visits by studentsto various parts of our organisation.

FEEDBACK/COMPLAINTS

We received 20 complaints during theyear: 17 related to our Kwinana siteand three to our operations at Bunbury.Of these complaints, 16 were fromexternal parties and four from employees.

Nine complaints related to emissionsfrom our granulation plant at Kwinanaand are dealt with earlier in this report.Of the remaining complaints relatedto our Kwinana works, six were related toodours of ammonia, one was related tonoise and one was related to emissionsfrom our superphosphate plant.

Complaints are recorded in our Sitesafeincident database. We endeavour to ensurethat all complaints are addressed as quicklyas possible to enable a response to beprovided. Complaints relating to odoursor emissions most often result in a checkof our operating plants and the windspeed and direction.

COMMUNICATION


We are continually updating informationto inform key stakeholders about ourbusiness. Several newsletters are producedfor both our employees and a numberof external audiences.

A report, based on our section of theWesfarmers Limited 2002 Environment,Safety, Health and Community Report,was distributed to our stakeholders in

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Liz Williams, Occupational HealthOfficer, conducting resuscitation trainingfor a group of staff, at Kwinana.

At least halve our LTIFR and continue reducing workplace injuries.

Continue projects working towards reducing contaminant emissions, particularlyat Kwinana through the Kwinana Water Recycling Plant and a planned nutrientstripping wetland.

Obtain endorsement for our four revised safety reports for our major hazard facilities.

Continue to work safely and effectively to deal with our historic wastes by 2006.

Increase the use of recycled water and contribute to reduced scheme wateruse in Kwinana.

Maintain our contribution to the social wellbeing of the Western Australiancommunity.


June 2003 as a means of updating thecommunity on our environment, safety,health and community initiatives andmajor projects.

Website

We maintain a comprehensive website(www.csbp.com.au) providinginformation about our business.

COMMUNITY SUPPORT

We support a number of communityorganisations throughout WesternAustralia, including:

• major sponsorship of CurtinUniversity’s Centre of Excellence inCleaner Production;

• a number of rural advancement groupsand local schools promoting health,safety, literacy development andcomputer skills; and

• a number of community safety, healthand environment projects andapprenticeship and university awards.

RESEARCH

As a member of the Australian MineralsIndustry Research Association we supportresearch into the safe use and disposal ofsodium cyanide, a gold reagent used bythe mining industry.

We also support a range of agriculturalresearch programmes, including themeasurement of pasture quality with theCSIRO and nutrient research with theGrain Research Development Corporation.

We invest about $500,000 each year inour own agricultural research activitiesand about $70,000 of other research iscontracted to external providers.

The underlying aim of this research is toenhance the economic returns of the enduser by maximising nutrient uptake andimproving plant productivity and quality.

The specific objectives of the work include:

• evaluation of new fertiliser productsunder field conditions;

• investigation of more effective methodsof fertiliser application; and

• generation of data to validate andimprove our fertiliser recommendationcomputer models, based on soil andplant analysis services.

Through our initiatives and continuedefforts we strive to reduce the productionof waste and our impact on theenvironment.


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Proposed wetland area (right)next to the effluent containmentpond at Kwinana.


SoticoWe produce hardwood sawn timber at Deanmill, Yarloop and Collie in

Western Australia’s south-west and operate timber processing plants at

Manjimup and Welshpool. During the year our Pemberton karri sawmill and

Forest Harvesting Operations were sold and we are in discussions with

other parties about the sale of the remaining assets as we move towards

exiting the hardwood forest products industry. In October 2003 we sold

our pine treatment plant at Mundijong. We employ about 300 people.

Our three main environmental issues are land contamination, hydrocarbonproduct storage and ensuring compliance with our obligations.

Prior to our sale of the Pemberton site to AusWest Timbers, we agreedwith the state government our respective responsibilities for remediatingthe contamination. We have accepted responsibility for dealing withpentachlorophenol (PCP) contamination arising from our years operating atimber treatment plant on the site. We are considering the best method ofremediation based on recommendations from consultants.

Fuel storage tanks at Yarloop Mill and Boddington were removed. Plans arein place to have the Welshpool underground tanks removed when the sitecloses. Refurbishment of oil storage sheds at all our sites will be initiatedprogressively to ensure compliance with environmental regulations.

Implementation of our Environmental Management System based onAS/NZS ISO14001 continued with a further two locations (Collie milland Boddington plantation) commencing the certification process.

Our two main safety issues are workplace injuries and materials handlingand storage.

Our Lost Time Injury Frequency Rate (LTIFR) decreased and the totalnumber of injuries reduced for the seventh consecutive year.

Safe working procedures, which are part of our management systems, areregularly reviewed and audited to ensure that they meet current standards andrequirements and updated procedures are communicated to our employees.

1 July 98 - 30 June 03 (as at 30 September 03)

LOST T IME INJURYFREQUENCY RATE


99 00 01 02 03

7.7 5.7 0.7 1.9 1.4

99 00 01 02 03

180 144 129 77 59

Sotico

Location Manager NevilleMcDonald at Sotico’s rehabilitatedresidue area at the Deanmillsawmill in Western Australia.

Businessmanagement

TRAINING

Environmental, health and safety

Recognition of current competenciescontinues to be undertaken for ouremployees by the Department ofTraining through associated TAFEcolleges. The Recognition of CurrentCompetencies (RCC) Programmeaimed at achieving full or partialqualification in the Forest and ForestProducts Certificate, Business (OfficeAdministration) Certificate, GeneralConstruction Certificate or Certificatein Business was conducted throughoutthe year.

During the year, 673 individual workinstruction training sessions wereconducted. These were necessary dueto amendments to work instructions,requirement for skills upgrading or asa result of process improvements.There were an additional 501 trainingsessions not related to work instructionsundertaken by our employees. Of the501 sessions, 206 were under the RCCprogramme. The ratio of employees(based on employee numbers at June2003) who undertook training was84 per cent.

COMPLIANCE

Environmental

With the sale of our forest harvestingoperation on 28 February 2003 we areno longer involved in harvesting of nativetimber from state forests. A harvestingcontractor harvests pine from aplantation we own at Boddington inWestern Australia.

Until the sale of the forest harvestingoperation, all our state forest harvestingoperations were carried out in accordancewith the “Code of Practice for TimberHarvesting in Western Australia” and the“Manual of Management Guidelines forTimber Harvesting in Western Australia”.

Private plantation harvesting continuesto be conducted in accordance with the“Code of Practice for Timber Plantationsin Western Australia”.

We operated a plant at Mundijong,45 kilometres south-east of Perth, whichuses a CCA (copper, chrome and arsenic)treatment process to preserve timber.The main products from this operationare treated pine rounds used in fencing,vineyards and other applications.

The preservation process involves driedlog rounds and timber undergoing avacuum pressure treatment using theCCA solution. Once treated, the timberis stacked on a concrete pad to facilitatefixation. This process results in the CCAsolution becoming chemically bound or

fixed in the timber. Any excess solution iscaptured and recycled. This process meetsAustralian Standard 1604-1-2000specification for preservative treatmentfor sawn and round timber.

The treatment storage tanks are bunded.This process is undertaken in accordancewith our management procedures whichconform to AS/NZS ISO 9002 andAS/NZS ISO 14001.

Sotico


Tanks at Yarloop Mill and Boddington removed. Plans are in place tohave the Welshpool underground tanks removed when the site closes.

Second consultant’s report received and under review.

LTIFR of 1.4 down from 1.9 last year.

Progress removal of remaining underground tanks which containhydrocarbon products.

Finalise the long term management of the Pembertoncontaminated site in co-operation with the state government.

Aim for zero LTIFR.


Team Leader, Production,Colin Bingham at the YarloopMill wash down facility.

Department and a Water Corporationpermit to discharge waste water.

WorkSafe Western Australia did not issueus with any prohibition or improvementnotices during the year.

No other licensing authorities haveissued notices of non-conformance.

MANAGEMENT SYSTEMS


Our EMS is based on the AS/NZSISO 14001 standard and contains fulldocumentation of our activities thatmay impact on the environment, whileproviding a baseline for continuedperformance improvement. The EMScontinues to be integrated with our existingQuality Management System (ISO 9002).Surveillance audits were conducted at theMPC, the Deanmill, Yarloop sawmillsand our head office in Welshpool. Thesesites maintained ISO 14001 certification.

The audits did not reveal any major issues,however, one minor non-conformancewas raised at Yarloop Mill. An actionplan has been put in place to rectify this.

We commenced working towards theISO 14001 certification process for ourCollie sawmill and Boddingtonplantation during the year.

POLICY

Our environmental policy is availableon our website at www.sotico.com.au.

Environmental


Noise and dust

Noise and dust are issues at our threeremaining hardwood sawmills and arecarefully managed by supervisory staff.


Greenhouse emissions were estimatedat 29,500 tonnes of carbon dioxideequivalent, a reduction of 1,956 tonnesfrom last year.

Other emissions

Pemberton Mill, which was sold in April2003, continued to work towards theDoE’s recommendation of reducingsmoke emissions from the waste pit.

WATER

Consumption

We have no accurate measure of ourtotal water consumption.

Groundwater

Several sites have approval to usegroundwater from either dams or bores.Groundwater is also used to top uprecycling reservoirs.

Recycling

The Deanmill, Collie and Yarloopsawmills and the Mundijong treatmentplant recycle water from their holdingreservoirs back to log stockpiles.

Sotico


In October 2003, we sold the MundijongTreatment Plant.

The government’s 10 year ForestManagement Plan to apply from 2004has not yet been finalised. Log supplycontracts were conditionally allocated inJuly 2003 and it is expected that theywill be completed by December 2003,when current contracts expire.

Our parent company, Wesfarmers Limited,has announced it is exiting the nativeforest products industry and negotiationsare underway to sell our jarrah sawmillingand processing operations.

NATIONAL POLLUTANTINVENTORY (NPI )

Our facilities at Yarloop, Deanmill andCollie sawmills, Mundijong treatmentplant, and the Manjimup ProcessingCentre (MPC) have reported under thefederal NPI legislation. The emissionresults for 2001/2002 are on the NPIwebsite at www.npi.gov.au.


To meet our legal obligations withrespect to environmental licensing wehold two Department of Environment(DoE) licences, five Department ofIndustry and Resources dangerous goodslicences, three Water and RiversCommission (WRC) licences and fiveAustralian Communication Authority(ACA) licences. We have one registrationwith the DoE, a permit from the Health

Log Hauler Darrel Green at the millfuel storage facility at Yarloop Mill.

Sotico



The Mundijong treatment plant, theMPC and the Yarloop and Deanmillsawmills continued to take water samples.These samples are analysed by NATACertification Services International-accredited laboratories. The DoE continuesto receive an annual report on watersampling results from the MPC site.

WASTE

The ISO 14001-certified sites havedrawn up action plans which focus onreducing waste.

Solid waste

Bark removed from logs at our hardwoodsawmills and sawdust continue to be soldto various customers for use as gardenmulch and potting mix. Most sawdustproduced from Collie is sold. Bark andsawdust that is not currently sold is burntor stockpiled. Some bark from ourDeanmill sawmill was sold to a south-westhorticulturist for use on avocado orchards.

Bark and pine shavings from Mundijongwere sold to garden supply companies.

Our negotiations with a local powerproducer to take our remaining wastes, andwhich we reported last year, have not seenany progress towards a successful outcome.

Jarrah residues continue to be sold toSimcoa Operations Pty Ltd at Kemerton,near Bunbury in Western Australia tomake charcoal for use in the productionof silicon.

Liquid waste

We generate waste oil that is stored andthen removed by contractors for recycling.

Materials recycling

The Yarloop, Collie and Deanmillsawmills separate recyclable waste fromnon–recyclable waste. Recycling bins areprovided and recyclable waste is taken forrecycling. Where there is no disposalservice, suitable products are burnt, withmetal strapping and plastics sent to localauthority landfill sites.

Vehicle tyres changed on-site are taken bythe supplier for recycling.

LAND

Contamination

Part of the Pemberton sawmill site, whichwe sold in April 2003, is contaminatedfrom timber treatment activities carried outby us and previous owners, one of which

was the Western Australian government.We have maintained ownership of thefreehold land containing the contaminationsettling ponds. A report on ourmanagement of this issue is contained inthe Case Study on page 72.

We received site investigation reportsfrom consultants on our WelshpoolProcessing Centre and the Mundijongtreatment plant sites as part of thedisclosure process associated with theproposed sale of these properties.The Mundijong report did not identifyany significant contamination issues.At Welshpool, while significantcontamination was not reported,recommendations were made regardingsoil removal and further investigation.These are being considered in the contextof the sale process. A conditional offerto purchase the Welshpool site wasaccepted on 15 August 2003.

Fuel storage tanks at Yarloop Mill andBoddington were removed. Plans are inplace to have the Welshpool undergroundtanks removed when the site closes in2004. Oil storage sheds at all our siteswill be upgraded to ensure compliancewith environmental regulations.

We commissioned consultants to carryout environmental assessments of theremaining jarrah sawmills and ourManjimup Processing Centre as part of thepreparation for the sale of these locations.

Rehabilitation

An area of pine plantation at Boddingtonthat was clearfelled is being leased to theForest Products Commission forestablishment of a blue gum plantation.

Resource use

Raw material delivered for use in oursawmills from state forests amounted to139,430 tonnes compared with 216,177tonnes in the previous year.

Total native hardwoods used in the millingprocess reduced by about 35 per cent, orabout 76,747 tonnes.

The reduction in the resources we usedduring the year reflects the voluntaryreduction in our intake of native forestlogs announced in May 2001 and thesale of business assets.

ENERGY

Our total energy use was 147,221gigajoules.

Fuel

During the year we used 97,097 litresof petrol, 1,543,900 litres of diesel and282,506 litres of liquefied petroleum gas(LPG). A reduction in the usage of dieselof approximately 600,000 litres occurredthis year.

Electricity

During the year we used 21,401,931kilowatt hours of electricity. A reduction inthe usage of electricity of approximatelytwo million kilowatt hours occurredthis year.

Members of the Lefroy Catchment Groupand Sotico’s Deanmill Location Manager,Neville McDonald, (left) water samplingoff Springall Road at Deanmill.

Safetyand health

LOST T IME

Our Lost Time Injury Frequency Rate(LTIFR) was 1.4 (compared with 1.9 lastyear) and, during the year, there was onlyone LTI. Our Average Time Lost Rate,which provides a measure of the severityof such injuries, was 4.0 (compared with3.25 last year). These statistics do notinclude contractor hours and injuries.

The number of all injuries reduced by 32per cent. Since we began focusing on thisaspect of our safety performance there hasbeen a reduction of 78 per cent over aseven-year period.

Safety statistics are reported to ourBoard every two months and to seniormanagement monthly.


There were 59 workers compensationclaims reported, relating to occurrencesduring the year, compared with 77 claimslast year.

Workers compensation claims continue tobe a focus of management. The numberof open claims as at 30 June 2003 was34, compared with 40 last year, a 15 percent reduction.

Sotico


Previous environment, health and safety reports have referenced the progress ofthe investigation of the contaminated land at the Pemberton Mill site.

In April 2003 we sold the Pemberton Mill site. We have however maintained acommitment to remediation of contaminated land caused by processes during ourownership of this site. We have maintained ownership of the freehold land containingthe contamination settling ponds.

HISTORY

The site was originally leased to the State Sawmills from 1914 until 1961.

Hawker Siddley Building Supplies purchased the site in 1961 and operated thebusiness until 1971 when we bought the site and finally sold it in 2003.

Throughout these periods timber was treated with a number of products to increasethe durability of the Karri product. In 1914 the State sawmills constructed a timbertreatment plant on the site and operated it until 1948 when it was closed. In 1960the State sawmills constructed another treatment plant based on a different processutilising pentachlorophenol (PCP). We ceased timber treatment processes in 1987whilst the site was under our control.

IDENTIF ICATION

In 1990 we commissioned the first of a number of environmental investigations toidentify potential contamination. The results of this investigation were discussed withthe Department of Environment (DoE) and a number of containment issues addressed.In 1999 a further study was undertaken to confirm the contamination levels andmonitor the effects of the earlier initiatives. Although these initial investigations werelimited, they did reveal there was contamination present.

To further evaluate appropriate options for management of the identified contaminationissues we engaged the services of URS Australia Pty Ltd environmental consultants.This process commenced in 2002 and the URS report was completed in 2003. Work withURS is continuing with respect to measures available for management and siterehabilitation options.

PARTIES INVOLVED IN LATEST INVESTIGATION

Due to the historical ownership of the site by us and the state government, theinvestigations, which commenced in 2002, are being funded jointly by us and thestate government. The DoE, an integral party to this remediation, have been and willcontinue to be consulted as to the scope of the works.

REMEDIATION

From the initial report in 1990 an area of the affected land was fenced to prevententry onto the contaminated site. The final report, which was completed in late 2002,detailed potential remediation options for the site. This report was also the basis fordetermining final responsibility for remediation of the contaminated area.

URS have commissioned a Canadian company to undertake trials of a bioremedialprocess for the treatment of the PCP contamination.

We anticipate a report on this process will be sent to us by the end of September 2003.

URS will submit a recommended remediation strategy for the PCP contamination onthe site. We will discuss with the DoE the recommended strategy to get governmentapproval to implement the PCP clean up process.

CASE STUDYMaking

a difference...

General Manager, Timber Operations, Max Evansand URS Environmental Engineer Gemma Frame atthe contaminated site adjacent to Sotico’s formerPemberton karri sawmill.

HAZARD AND RISK

Programmes

We maintained our drug and alcoholprogramme.


Safe working procedures, which are partof our management systems, are regularlyreviewed and audited to ensure they meetcurrent standards and requirements.Updated procedures are communicatedto our employees.

Internal audits of compliance with thestacking and de-stacking work instructioncontinued throughout the year.

Emergency response

Each location has an EmergencyPreparedness and Response Plan.The locations with ISO 14001 certificationhave reviewed and upgraded their planswhere necessary. These plans were includedin their certification audits, which aretested annually.

EMPLOYEE WELLBEING

Employees who are made redundantdue to the state government’s decision tocease harvesting of old growth forestscontinue to be kept informed of availablehelp and assistance from a number ofexternal agencies.

The employee information pack detailingcontact names and addresses and otherinformation to assist in finding newwork is distributed to employees whoseposition has been made redundant.

Community

STAKEHOLDERS

Our stakeholders include our employees,the local communities in which we operate,our customers, suppliers (including theForests Products Commission), relevantgovernment agencies, various non-government organisations and theshareholders of our parent company,Wesfarmers Limited.

We recognise that our most importantstakeholders are our people. We arecommitted to providing a safe andlearning environment to reward effortand ensure equal opportunities for all.

We have a number of strong relationshipswith community bodies, local businessesand charity organisations.

We worked closely with TimberCommunities Australia, the ForestIndustries Federation of Western Australiaand members of the Furnishing IndustryAssociation of Australia duringdiscussions about future log supply.

Over the past year, we supported theYarloop Progress Group, the ManjimupHorticultural & Forestry Expo andseveral other organisations with the aimof helping those within the communitiesin which we operate. We also providein-kind assistance such as makingavailable our Boddington site for theTelstra Rally Australia.

FEEDBACK/COMPLAINTS

We record all environmental complaints.We did not receive any such complaintsthis year.

ACTION GROUPS

We are a member of the Forest IndustriesFederation of Western Australia and theNational Association of Forest Industries.

COMMUNICATION


We produce a regular newsletter for staff,‘Timberlines’, which is distributed to allour locations.

Website

Our website(www.sotico.com.au)provides comprehensive informationon our company and its business units.It displays our range of hardwoods,presents technical information and

delivers comprehensive environmentalinformation.

The site highlights our EnvironmentalPolicy statement and our progress inadopting ISO 14001 certification.It recommends other websites to visitwith regard to forest management andthe benefits of timber and includes afrequently asked questions section.

The website also includes a news section,which provides up-to-date informationon our company and the industry.


Progress removal of remaining underground tanks which containhydrocarbon products.

Finalise the long-term management of the Pemberton contaminated site inco-operation with the state government.

Aim for zero LTIFR.


Sotico

AIR L IQUIDE W.A.

We are 40-per cent owned by Wesfarmerswith the remaining shares held by AirLiquide Australia Ltd, a wholly-ownedsubsidiary of Air Liquide of France.Wesfarmers Energy has managementresponsibility for our head office inMyaree, Western Australia, and our sitesat Kwinana and Henderson, south ofFremantle. We make and market a rangeof industrial, medical, scientific andenvironmental gases and welding products.

Our two Kwinana locations are engaged inthe production, through an air separationunit, of oxygen, nitrogen and argon andthe operation of a carbon dioxide recoveryand liquefaction process. We have anacetylene manufacturing plant atHenderson and refilling and distributionalso occurs at that site.

We employ 74 people.

Overview

Unquestionably the highlight of the year, inthe context of the issues dealt with in thisreport, was the achievement in June 2003of 11 years without a Lost Time Injury.

Environmental

We have no formal EnvironmentalManagement System but a widely-displayed environmental policy is includedin induction material for new employees.

Our quality assurance system is beingupdated to conform to ISO 9001.

We complied with the conditions of ourDepartment of Environment (DoE)licence and other licences covering poisonsand supply of ozone-depleting substances.

Our air separation unit operates 24 hoursa day but the November 2001 cumulativenoise model for the Kwinana areaindicated we made only a very marginalcontribution to overall noise levels.

Our three sites consume about 101,369kilolitres per annum of water. No groundwater is used and approximately 60 percent of water taken into the acetylenemanufacturing process is separated fromthe lime waste slurry and recycled.

Solid and liquid wastes are removed bycontractors and waste paper is collectedfor recycling from Myaree and Henderson.

In terms of resource use, our operationsconsumed about 5,700 litres of dieselfuel, 1,900 litres of liquefied petroleumgas and 80 megawatt hours of electricity.

We recover carbon dioxide from theadjacent CSBP ammonium plant atKwinana, remove impurities and liquefythe product for sale. Our Henderson sitere-sells refrigerant gases to approvedindustry users.

National Pollutant Inventory reportingis being completed for 2002/2003 inrespect of acetone solvent used in the

refilling of acetylene cylinders and energyconsumption at the air separationunit plant.

Safety and Health

During the year we focused on regularhealth and safety meetings, internalaudits on our safety managementprocedures and we introduced a Fitnessfor Work programme.

All employees undergo training in hazardsassociated with the gases and equipmentthey are required to handle. Basicworkplace first aid training was conductedfor selected employees in April 2003.

Our emergency management plan wasredrafted and we completed a trainingexercise in June.

We complied with our Department ofIndustry and Resources licence coveringstorage of dangerous goods. A hydrocarbonrisk audit of the Kwinana air separationunit was conducted and all issues raisedhave been addressed.

Employees have access to voluntaryfitness and health assessments and theyand their immediate family memberscan take advantage of an EmployeeAssistance Programme.

Website

Further information on our operationsis available from our websitewww.airliquidewa.com.au.


OtherBusinesses

Other Businesses

Air Liquide, Kwinana,Western Australia.

STATEWEST POWER

We are a majority-owned subsidiary ofKleenheat Gas, specialising in thedesign, construction, operation andmaintenance of diesel and gas-fired powerstations for the mining industry andremote area townships. Our head officeis at Canning Vale in Western Australiaand during 2002/2003 we employedabout 50 people.

Overview

We recorded one employee Lost TimeInjury during the year after four yearswith no such injuries. A Fitness forWork programme and an EmployeeAssistance programme were introduced.

Environmental, Safety and Health

Key environmental managementrequirements and processes are outlinedin our Management Plan (Health, Safetyand Environment) and we have policiescovering these areas.

Issues such as waste removal, dust controland noise management are managed eitherby us, as the power station operators, orby customers to whom we supply power.We install oil separation equipment tocontrol waste oil and storm water run-offat power station sites.

During the year our power stationsconsumed more than 46 million litres of

diesel fuel and about 2,000 terrajoulesof gas. Electricity consumption at CanningVale was 144,774 kilowatt hours.

Material Safety Data Sheets are heldon-site for hazardous substances andbunded storage areas are provided whererequired. We use Job Safety Analysis formajor tasks to identify all risks and assesspotential impact on employees, thepublic, plant and equipment.

AUSTRALIAN RAILROAD GROUP

The Australian Railroad Group (ARG)is a joint venture between Wesfarmersand Genesee & Wyoming Inc of theUnited States. ARG is the majorprovider of rail freight services inWestern Australia and South Australia.Further information is available atwww.arg.net.au.

QUEENSLAND NITRATES

Through CSBP, Wesfarmers is a jointventure partner with Dyno Nobel AsiaPacific in the Queensland Nitrates fullyintegrated ammonium nitrate plant atMoura in central Queensland. It producesammonium nitrate for the coal miningindustry. Further information is availableat www.csbp.com.au.

BENGALLA

Wesfarmers has a 40 per cent interestin the Bengalla open cut coal mine inthe Hunter Valley of New South Wales.The mine is managed by Coal and Allied,a Rio Tinto Group Company, andproduces steaming coal for domestic andexport markets. Further information isavailable at www.coalandallied.com.au.

WESPINE

Wesfarmers and Fletcher Building Limitedjointly own the Wespine plantationpine sawmill near Bunbury in WesternAustralia. Wespine has a long-termcontract with the government of WesternAustralia for the supply of pine logsand produces sawn timber for housingconstruction, furniture manufacture andother uses. Further information isavailable at www.wespine.com.au.

Other Businesses


An Australian Railroad Grouptrain hauling iron ore fromKoolyanobbling to Esperancein Western Australia.

VerificationStatement

ABN 47 065 475 149 ACN 065 475 149

SMEC Australia Pty Ltd Level 6, 12 St Georges Tce Perth WA 6000 Telephone: (08) 9323 5900 Facsimile: (08) 9323 5901

VERIF ICATION OBJECTIVE

Wesfarmers Limited (Wesfarmers)commissioned SMEC Australia Pty Ltd(SMEC) to verify the data and content ofthis Report 2003 Environment, Health,Safety and the Community (the report),the sixth such report produced by thecompany. The objective of this verificationaudit was to ensure statements madewithin the report were consistent withevidence from which they were derived andwere able to be supported by quantitativedata wherever possible.

Wesfarmers holds responsibility forthe preparation of the report and thisVerification Statement representsSMEC’s independent opinion. SMECwas not involved in any part of thereport preparation.

VERIF ICATION METHOD

The accuracy of the report was verifiedby randomly verifying a selection of theinformation presented. SMEC wascommissioned to:

• Identify major anomalies in the report;

• Track the data streams from collectionof data to review of the conclusionsmade from the subsequent analysis andassess the accuracy and appropriatenessof the processes used; and

• Review the contents of the reportwith respect to the significant aspectsof the organisation and the issues forthe organisation’s stakeholders.

The data verification process involvedreviewing the reports submitted by thebusiness units then randomly selectingitems for which verification would besought. At each site the processes by whichdata was collected, stored, analysed andreported were examined to establish therobustness of the processes used and anymisinterpretation that may have occurred

as a result. Interviews were held withWesfarmers personnel responsible foreach data set and processes used to deriveconclusions reported were demonstrated.Potential for errors in aggregation andinterpretation were explored andconsistency of approach for the purposesof reporting in this report was assessed.

Each major business unit described in thereport was visited by SMEC personnel.The visits took place at an operating sitewithin each business unit to allowprocesses used in data collection to beobserved and verified. Meetings were heldwith personnel responsible for collating andpreparing the report for each business unit.Systems used for data collection wereobserved and tested for randomly selecteddata items. Specific focus was placed onverification of the basis for qualitativestatements made in the report preparedby each business unit to ensure theycould be substantiated. Where possible,effort was made to establish comparabilityof findings between reporting years andwith industry standards. Such comparisonwould enable the company performanceto be benchmarked.

Verification of the reports of the minorunits (Air Liquide WA and StateWestPower) occurred remote from the site.

The Curragh Queensland Mining auditwas conducted by SMEC’s Brisbane officeand the Wesfarmers Industrial and Safetyaudit was undertaken by SMEC’s Sydneyoffice. All other business units were auditedby SMEC’s Perth office. WesfarmersLandmark was sold between preparationof the report and the audit period.Wesfarmers decided not to include it in thereport (although it was a wholly-ownedbusiness unit during the review period)because it would have had to negotiateaccess to documentation held by thenew owner of Landmark. Landmark wasalso responsible for the brief details onWesfarmers Federation Insurance.The insurance business remains ownedby Wesfarmers but is also not included inthis report. Wesfarmers hopes to resumereporting on its insurance activities(augmented by a recent acquisition) inthe 2004 report.

OPINION

The level of sophistication in the datacollection systems often reflects the sizeand age of the business unit involved.Smaller business units tend to have lesscomplex data collection systems. Businessunits that are relatively new to the companyare still developing data collection and

management systems and may lack thesystems to collect baseline data.Thesevariations result in some differentialbetween the level of information thatcan be provided by each business unit.

The verification process used indicated:

• A high level of accuracy in the datapresented. However, minor modificationof some qualitative statements wasundertaken and slight adjustment ofdata was made to clarify the manner inwhich it was presented; and

• Datasets were generally traceableand readily identified. During theaudit, data trails were easily locatedand demonstrated and the aggregationand collation undertaken to reachconclusions were logically presentedby the personnel responsible forundertaking those activities.

Overall, SMEC is satisfied that:

• The report is a fair and honestrepresentation of the organisation’spolicies, management systems andperformance;

• The numerical data presented in thereport is valid and accurate; and

• The written statements in the reportpresent an accurate representation ofthe results and progress achievedduring the reporting period.

GENERAL F INDINGS

As a result of completing the verificationprocess, the following findings are made:

• Wesfarmers continues to seek aconsistent approach to measuring andreporting performance across all businessunits through striving to adopt bestpractice reporting standards. Thecontinued implementation of the five-year improvement plan developed bySMEC in 2001/2002 and the integrationof new global initiatives for reportingof environment, social and economicachievements will assist in this regard.

• The ability of each business unit toidentify those environmental andsafety elements critical to their ongoingoperations is commended and hasallowed a complete list of criticalelements to be prepared for the first time.

• The ongoing involvement of personnelacross the organisation in data collectionand management, in addition to thosewho provided input to the verificationundertaken by SMEC, indicates thatthe business units maintain processesconsistent with best practice in reporting.The level of ownership of the report


and the information within it was veryhigh in all instances and demonstrateda commitment to the integrity of thecontents of the report. In light oforganisational changes that were evidentduring the verification process, suchcommitment is to be commended.

• The introduction of new business unitsinto this reporting framework haschallenged personnel within thoseunits. In some other businesses, extraresponsibilities and loss of corporateknowledge have added to the challengesfaced in the reporting process. The abilityto meet the standard achieved by othersis praised as the commitment to thereporting process remains in place inspite of the demands arising from eitherhaving to report for the first time oradjust to change.

The above findings represent a summaryof the more detailed findings presentedto Wesfarmers.

For SMEC Perth,

Brett Loney

Principal Environmental Scientistand AuditorBSc (Env. Sc.) PGradDip EIA.

For SMEC Sydney,

Luke Palfreeman

Manager Environment andPlanning (NSW)

Senior Environmental Auditor (QSA)BSc, BE, MEngSc MIEAust CPEng

7 October 2003

Australian Competition and Consumer Commission (ACCC) – The federalgovernment’s independent competition policy and consumer protection watchdog.

Australian Standards (AS) – National benchmarks for products and services.

CBM – Coal Board Medical

CHIMA – Cultural Heritage Investigation and Management Agreement

CHMP – Cultural Heritage Management Plan

Environmental audit – A programme to evaluate compliance with regulations,systems, programmes and policies.

Gigajoule – Unit of energy equivalent to 1,000,000,000 joules.

Greenhouse gases – Gases such as carbon dioxide, methane and nitrousoxide which contribute to retention of heat in the earth’s lower atmosphere.

Greenhouse Challenge – The federal government’s programme ofcooperation between industry and government to reduce greenhouse gasemissions through voluntary action.

International Organisation for Standardisation (ISO) – ISO publishesinternationally-agreed standards covering areas such as quality management(the ISO 9000 series) and environmental management (ISO 14000).

Liquefied petroleum gas (LPG) – A combination of, predominantly, propaneand butane extracted from natural gas or as a by-product of petroleum refining.

Liquefied natural gas (LNG) – Comprising predominantly methane, it isproduced from natural gas that has been purified, refrigerated and condensedto liquid form.

Lost Time Injury (LTI) – An LTI is any work injury which causes absence forone day or a shift or more.

Lost Time Injury Frequency Rate (LTIFR) – The main calculation we useto measure workplace safety performance. It is calculated by dividing thenumber of LTIs by total hours worked, multiplied by one million. Anotherindicator, Average Time Lost Rate (ATLR), provides a measure of the severityof occurrences.

National Packaging Covenant – An agreement between the packagingsupply chain industry and governments which sets guidelines covering themanufacture, supply, distribution, consumption and recovery/recycling ofpost-consumer packaging.

National Pollutant Inventory (NPI) – An internet database designed toprovide the community, industry and government with information on thetypes and amounts of certain substances being emitted to the environment.The NPI contains data on certain priority substances which are emitted to theenvironment. The substance list was determined by consideration of health andenvironmental risks in Australia. The NPI uses standard assumptions, in part,to calculate potential emissions we cannot measure or have difficulty measuringand, accordingly, data reported to the NPI may differ from point sourceemissions reported in this report. More information can be found on the NPIwebsite (www.npi.gov.au).

Overburden – Unmineralised material overlaying coal deposits or ore bodies.

Rehabilitation – Treatment of disturbed areas to achieve a level of stabilityequal to that which existed before or to an alternative acceptable form.

SMS – Safety Management System

SOP – Standard Operating Procedure

Glo

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mindfield - creative business partners

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