sharing our journey - gammon construction€¦ · (gammon) to provide a verification statement for...
TRANSCRIPT
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Sharing Our JourneySustainability Report 2005
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Contents
1 ScopeofReport
2 ChiefExecutive’sStatement
3 AboutGammon
4 CorporateSustainability
6 EconomicandBusiness
10 SocialResponsibility
16 HealthandSafety
20 EnvironmentalProtection
24 2005PerformanceSummary
25 Outlookfor2006
VerificationStatement
TheBusinessEnvironmentCouncil(BEC)wascommissionedbyGammonConstructionLimited(Gammon)toprovideaverificationstatementforits2005SustainabilityReport“SharingOurJourney”(thereport).BECconductedsamplechecksofthedataandclaimsinthereportthroughdocumentanddatareview,interviewswithresponsiblepersonnel,andvisitstoselectedsites.Ourfindingsaresetoutasbelow.
Completenessofthereportscope“SharingOurJourney”providesacomprehensiveandbalancedaccountofGammon’scommitmenttosustainabilityacrossitscorebusinessactivitiesandlocationsinwhichitoperates.Thereportalsoexhibitstheincreasingreachofthe“quadruplebottomline”approachinworkingwithbusinesspartnersandthewidercommunitytoaddresssocial,healthandsafety,environmentalandeconomicconsiderations.WeencourageGammontocontinueitsembraceofGlobalReportingInitiative(GRI)principles,andinparticulartofurtherengagestakeholderstohelpdefinethecontent,performanceindicatorsandpresentationoffuturereports.
AdequacyofdataTherelevanceandclarityofthereport’spresentationofeconomicandbusiness,social,health,safetyandenvironmentalperformanceisconsideredadequateforabroadaudienceofreaders.TheselectedcasestudiesprovidearepresentativeoverviewofGammon’ssustainabilitychallengesacrossdifferentbusinessoperationsandlocations,andtheresponsesthattheCompanyhasmadetothese.Theselectedindicatorsprovideasoundbasisforperformancebenchmarkinggivenprevailingconstructionpractices,butwillneedcontinualrefinementovertimeasconsensusonsustainabilitywithintheindustryevolves.
AccuracyofdataTheinformationpresentedinthisreportisconsistentwiththedocumentsanddatareviewed,interviewsconductedandsitesinspectedduringtheverificationprocess.Recommendationstoclarifyminorambiguitiesidentifiedduringverificationhavebeenincorporatedintothisreport.Existingdataandinformationmanagementsystemsareconsideredbotheffectiveandreliable.
OpinionBECconsidersthisreportanaccurateandreliablepresentationofGammon’sinitiativesandachievementstowardscorporatesustainabilityin2005.
KevinEdmundsDeputyDirectorBusinessEnvironmentCouncil
IntroductionTheconstructionindustryispivotaltothefosteringoflong-termsustainabledevelopment.
Economicgrowthanddevelopmentdrivesallaspectsoftheconstructionindustrythroughnewinfrastructure,urbanbuildingsandregeneration,yetatthesametimepresentspotentialenvironmental,socialandeconomicimpactstoprojectproponents,theserviceprovidersandthewiderpublic.Throughthepromotionandimplementationofindustrybestpracticeandinnovation,Gammoniscommittedtoembracingsustainablebusinesspractices.
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ScopeofReport
‘SharingOurJourney’coversourperformanceandprogressfortheyear2005,markingthethirdyearofreportingonoureffortstowardssustainablebestpractice.
Thisyear’sReportisthemedtodemonstratetheprogresswearemakinginworkingtogetherwithourcustomers,stakeholdersandthecommunityatlargeinengenderingamindsetofsustainabilityandinnovationwithinourprojectsandactivities.ThecasestudiescitedinthisReportbringthisagendatolifeanddemonstratethesharedsuccessthatsustainablebestpracticebringswhenworkingintheliveenvironmentgiventhecloseinterlinkagebetweenouractivitiesandthecommunitiesandenvironmentwithinwhichweoperate.
Followingonfromour2004SustainabilityReport,theGlobalReportingInitiative(GRI)Guidelines2002haveagainservedasaframeworkforwhatandhowwereport.Thisenablesustobenchmarkourperformanceagainstglobaltrends,aswellasidentifyandtrackinternallyhowwehaveprogressedinestablishingglobalstandardsandaligningourowncurrentpracticeswiththem.Thefollowingpagespresentourperformanceandprogressforthe2005calendaryearandrelatestoallareasoftheGammonGroup’soperations(referredtohereinafterasGammon)asfollows:
• HongKong,whereweprimarilytradeasGammonConstructionLimited, whichincludes: –jointventureprojects; –theGammonTechnologyParkwhichincludesoffices,workshops,ageotechnical laboratoryandvehicleandplantmaintenancefacility; –plantandequipment; –concretebatchingplants;
• MainlandChina,wherewetradeasGammonConstruction(Shanghai)Limitedand GammonConstruction(China)Limited;
• Singapore,wherewetradeasGammonPte.LimitedandGammonConstruction Limited(SingaporeBranch);
• Macau,whereweprimarilytradeasGammonBuildingConstruction(Macau)Limited;
• BBE&MLimited,ourelectricalandmechanicalcontractingservicescompany;
• LambethAssociatesLimited,ourengineeringconsultancy;
• EntasisLimited,whoundertakeinteriorcontractingandthesupplyofhighquality constructionproducts;and
• AsteelfabricationplantinDongguan,ChinatradingasPristine.
SustainabilityReport2005 1
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ChiefExecutive’sStatement
WehopethisreportillustrateshowGammonseekstodeliverbestpracticegiventhecloseinterlinkagebetweenconstruction,ourcommunitiesandtheenvironment.
AsdevelopmentpressuresgrowacrossAsia,constructionactivitiesareinterlinkingevercloserwithourcommunitiesandtheenvironment.Operatingincongestedandbusyurbansettingsorincloseproximitytosensitivehabitatsandenvironmentsrequiressustainabilityconsiderationstobegivenabsolutepriorityinconstruction.WethereforehopethatthisReport,ourthirdsustainabilityreport,servestoillustratehowGammonseekstodeliverbestpracticegiventhemanychallengesweface,andhowwearestrivingtobetheindustrypartnerofchoice.
Asaserviceprovider,theextentofcontrolandownershipwehaveforsustainabilityissuesvariesdependentuponthenatureofactivities,theformofprocurementandthedurationofourinvolvement.Embracingsustainabledevelopmentprinciplesthereforerequiresthecontributionofallstakeholders.Byreporting,wenotonlywanttobeopenandtransparent,butwealsohopethatwecandemonstratetheneedforindustry-widecooperationandpartneringandtomaximiseandenhancesustainabilityopportunities.
ForGammon’spart,wehavemadegoodprogressduring2005withrespecttointegratingsustainabilitybestpracticeacrossourbusiness.WehavereinforcedourcorporategovernancethroughstandardisationofourGroupprojectriskmanagementprocessandextendingcertificationtoourmanagementsystemstoourmainlandChinabusiness.WecontinuetopromoteresponsibleprocurementandpartneringandaredelightedtohavereceivedrecognitionforoursustainabilityandenvironmentalperformancethroughseveralprominentawardsinHongKong.
Despiteourgoodandencouragingprogressintheseareas,our2005performancehasbeenmarredbythetragicfatalitieswehavesuffered.Theseaccidentsservetoillustratethehigh-risknatureofourbusinessandthatwemustneverbesatisfiedwhateverourperformancestatisticssuggest.Weremainfullycommittedtothezeroaccidentsvision,andwilllearnfromallincidentstoensurewecandeliverthehigheststandardsofsafetyonoursites.
Wewouldagaininviteyourfeedback,andwelookforwardtothechallengeswefaceinsharingourjourneywithyouaswecontinuetoembracesustainability.
ThomasHoChiefExecutiveGammonConstructionLimitedMarch2006
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AboutGammon
MapofOperations
Wepositionourselvestofosterlong-termsustainablebusinesspracticesinallregionsinwhichweoperate.
GammonisaprivatelimitedcompanyultimatelyownedequallybytheJardineMathesonandtheBalfourBeattygroups.EstablishedinHongKonginthelate1950s,wehavesinceexpandedourpresencebothinHongKongandwithinSouthEastAsia,wheretodayweoperateoutofofficesinHongKong,mainlandChina,SingaporeandMacau.OurMacauoperationsre-commencedin2005.WealsohavecompletedprojectsandhaveGroupcompaniesincorporatedinMalaysia,Thailand,Vietnam,thePhilippines,TaiwanandIndonesia,althoughnoconstructionactivitieswereundertakeninthesecountriesin2005.
Gammon’sbusinessinterestscoverdesign,projectmanagementandconstructionservicesforbuildings,civilengineering,foundations,electricalandmechanical,maintenanceofinfrastructureandinteriorrefurbishmentsandfitout.Wealsohavecomprehensivesupportservicesincludingalargefleetofplantandequipment,aconcretebatchingbusinessandasteelfabricationserviceprovidedfromworkshopsattheGammonTechnologyParkinHongKongandDongguan,mainlandChina.
SustainabilityReport2005 3
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ToGammon,sustainabilityisguidedandmanagedthroughour‘QuadrupleBottomLine’.
SustainabilityatGammonOurapproachandinterpretationofsustainabilityisguidedbythe1987WorldCommissiononEnvironmentandDevelopment’sdefinitionof“Meetingtheneedsofthepresentwithoutcompromisingtheabilityoffuturegenerationstomeettheirownneeds”.Translatingthistoouractivities,sustainabilitytousisthepursuitofourlong-termeconomicandbusinessgoalsinanenvironmentallyandsociallyresponsiblemanner.
Asintroducedinourprevioussustainabilityreports,ourexperienceandworkingapproachtosustainabilityisnotjustaboutthetraditionaltriplebottomlineofEconomic,SocialandEnvironment,butalsoinvolvesafourthfacet,HealthandSafety,representingtheGammon‘quadruplebottomline’.Constructionisahigh-riskandpeopleintensiveindustry,andconsequently,wedemandandaimtodeliveratalltimesthehighestpossiblestandardsofhealthandsafetytoprotectworkers,staffandthegeneralpublic.Theimportanceweattachtohealthandsafetyacrossourbusinessnecessitatesthathealthandsafetyisacornerstoneofoursustainabilityframework.
CorporateSustainability
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DeliveringonSustainabilityCommitmentsWeusetheBalancedScorecardapproachtohelpalignourbroadercorporatestrategywithoursustainabilitycommitments.AGroupBalancedScorecardissetannually,definingtheGroup’sobjectivesandtargetsfortheyearandtheweightingsattributabletoeachfacetofperformance.Thesearethencascadeddownthebusinessthroughdepartmentandregion-specificBalancedScorecards.Wecanthenmeasureandexpressoursustainabilityinitiativesonacontinualbasistotrackaccountabilityofobjectivesandresults.
Gammonwasproudtowinthe2005HongKongAwardsforIndustries:EnvironmentalPerformanceAward,whichrecognisescompany-levelbestpracticeinpollutionprevention,wastereduction,useofresources,legalcomplianceandstaffandcommunityengagement.Inaddition,wealsowonthreeprojectawards–theGrandAwardforNamWanTunnel,aGoldAwardforCastlePeakRoadImprovementWorkandaCertificateofMeritfortheLandmarkEast–attheHongKongEco-BusinessAwards2005.Inresponsetotheawards,Gammon’sChiefExecutiveThomasHocommented:“EnvironmentalprotectionandsustainabilityarecorebusinessimperativesforGammon,andthecompanyisproudtoreceiveprestigiousrecognitionofitsadvancesandachievementsinthisarea.”
Ownership
Asaserviceprovider,ourabilitytointegrateanddeliveronoursustainabilitycommitmentsvariesacrossouroperatingactivities.Wherewehavelong-terminvolvementorownershipofassets,thisconferstousgreaterlevelsofcontrolandenhancestheimplementationofsustainablepractices.Thelevelsofcontrolandownershiparefunctionsofthenatureoftheprojectprocurementandcontractualarrangements.Wearestrongadvocatesofpromotingprocurementprocesseswhichenableconsiderationofthewholeprojectlifecycle.Designandbuildcontractarrangementsforexampleprovideuswithincreasedflexibilityinthedeliveryofsustainablesolutionsand,longer-termprocurementsolutionssuchasPublicPrivatePartnerships(PPP)orPrivateFinanceInitiatives(PFI)provideevengreateropportunitiesduetothelife-cycleapproachtoassetdeliveryandmanagementthattheycreate.
InnovationThedevelopmentandimplementationofinnovativeideasandtechniquesisakeycomponenttoGammon’ssustainabilitycommitments.EncouragingandfosteringinnovationispromotedthroughourCentresforInnovationandTechnicalExcellence(CITE),whichexistacrossGammon’smajordisciplinesandworkareas.Gammonalsorunsaregularinnovationcompetition,whichisopentoourstaffandbusinesspartners.Sustainabilityconsiderationsformthekeyjudgingcriteria.Our2005competitionattracted55entries,withideascoveringawiderangeofareas,fromsafetyandtheenvironmenttonoveldesignapproachesandsuggestionstoimproveefficiency.Thewinnersofthecompetitionincludedarecyclingprocessforconcretewasteandanoveltechniqueforenhancinghydrocarbonbiodegradation.
AchievingRecognition
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Theintegrationofsustainabilityintoourorganizationsupportsusinmeetingtheexpectationsofourshareholdersandcustomers.
EconomicPerformanceHongKonghasremainedourcoremarket,contributingto85%ofourbusinessturnoverin2005withtheremainingturnovercomingfromourmainlandChina,MacauandSingaporeactivities.AlthoughanumberofourmajorcivilengineeringcontractsinHongKongarenearingcompletion,weareseeingexcellentopportunitiesinSingaporeandMacauaswellasinourrailandelectricalandmechanicalbusinesses.Weenter2006withoneofGammon’sbesteverorderbooks.
WecloselytrackandreportonamonthlybasisourproductivityperformanceacrosstheGroup,enablingustoreactaccordinglythroughtheimplementationofproactivehumanresourcesinitiatives.WehavethereforemaintainedourproductivityinrecentyearsdespitethedownturnintheSouthEastAsiamarketsandfindourselveswellplacedwiththeskillsetsandstaffassetsrequiredtomeetnewopportunitiesandmarkets.
MainlandChinaisagrowingmarketforoursupplychainforthesourcingofqualityconstructionmaterials.Itisouraimtolocallysourceandprocureourproductsandserviceswherepossible,andin2005,wecontinuedtopromoteourlocalChinasourcinginitiative,increasingourmaterialprocurementvaluefromChinabyover17%fortheyear.
TurnoverGroup (US$ millions)
2003 200520042002
400
600
800
1200
1000
200
Turnover by LocationGroup 2005 (%)
Hong Kong Macau
Turnover by ServicesHong Kong 2005 (%)
E&M Construction Services
Civil Foundation Building
7.1
3.2
15.7
5816
53
85
7
SingaporeChina
EconomicandBusiness
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RiskManagementByyear-end2005,ourGroupprojectriskmanagementprocesswasstandardisedandfullyoperational.Itcoversactivities,financialmanagement,healthandsafety,environmentalandsocialperformanceattheprojectlevel.Theprocessprovidesasystematicandconsistentmethodologyinmeasuringandassessingriskagainstvariousimpactscalesaccordingtoprojectspecifics.Thisenablesalogicalandconsistentmeansofidentifying,analysing,assessing,treating,monitoringandcommunicatingpotentialriskevents.Quarterlyreportingisrequiredunderthissystem.
Implementationoftheriskprocessisdesignedtoinvolvetheprojectteamtoassessriskandassumeitsresponsibilityduringthelifeofaproject.ItisactionedthroughriskregistersfeedingbacktotheGroupRiskManager,withinvolvementfromtheExecutiveCommitteeonthoseareasdeemedhighpriority.Thewholeprocessempowersaproject’steamwiththeawarenessandthetoolstomanageriskwithintheirsphereofinfluence.
Theseproceduresarealsodesignedtoidentifyopportunitiesaspartofthemanagementprocess.Throughanalysisofrisk,weareabletoidentifyproject-specificopportunitiesthatmayexistfortheuseofalternativetechnologiesandmethodologies,forbetterefficiencies,costsavingsorperformanceimpact.
SystematicriskmanagementbringsGammonclosertosustainabilitythroughmoreefficientandreliableperformance,minimisinglossexposureinprojects,thecapabilitytoseekbroaderoutcomesbeyondfinancialbenefitandabetter,moreroundedassessmentofopportunitiesforfutureactions.Consistentwithourbrandvalues,Gammonineffectbecomesthecustomer’sriskmanagerinaproject.
TheDeepBayLinkNorthhighwayprojectinHongKongischaracterisedbyanumberofchallengingrailwayandnoiseconstraints.Atonepointalongthealignmenttheconstructionoftheviaductoccursdirectlyoveraliverailwayline,allowingonly800mmclearanceaboveoverheadrailwaypowerlines.AstheMainContractorforthisconstructioncontract,Gammonneededtoovercometheseconstraints,whichwereunacceptabletotherailwayoperatorwhenconsideringtheoriginalconstructionproposal.Furtherconstraintsincludedtherequirementforworkstoberestrictedtothreehourspernightduringnon-traffichours.
“Byunderstandingtheconstraintsandriskswewereabletoidentifyanddesignanalternativeandacceptableconstructionmethodologybyconvertingalaunchinggirdertoamobilecantileversuspensionfalseworksystem,”saysRaylandLee,ConstructionManagerfortheproject.“Thissystemisprefabricatedoff-site,significantlyreducingtheworktimeabovetheraillineandofferedwiderbenefitsintermsofbothcostsavingsandthereduceddisturbanceachievedwithuseofquieterequipment.Byensuringwethoroughlyaddressedtheriskprofile,wewerenotonlyabletominimisetherisks,buttoenactaviablealternativesolutionthatwaseconomicallyadvantageousfortheclient.”
ConvertingRisktoOpportunityDeepBayLinkNorthhighway
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GovernanceOurgovernancestructureisvestedintheBoardofDirectors,chairedbyaNon-ExecutiveDirector(ashareholderrepresentative).TheBoardisresponsibleforsettingstrategy,policies,riskmanagementandfinancialperformanceofthebusiness.TheExecutiveCommittee(comprisingExecutiveDirectors)isresponsiblefortheimplementationofstrategyandpoliciesataday-to-daylevel,andareaccountabletoourshareholders,theJardineMathesonandBalfourBeattygroups,viatheBoardofDirectors.AllExecutiveDirectorsarefull-timeemployeesofGammonorareexclusivelysecondedtoGammononafull-timebasis,andhavespecificresponsibilitieswithintheGroup'soperations.
SustainabilitygovernanceataGrouplevelissteeredthroughSafety,Environment,QualityandRiskCommittees,basedinHongKong,supplementedbyregionalSystemReviewmeetingsinChinaandSingapore.Eachofthesecommitteesistaskedwithcascadinginitiativesandcollectingfeedbackthroughoutthebusinessandareresponsibleformonitoring,auditing,analysisandactioningonacontinuousbasis.
CodeofConductGammoncurrentlyfollowstheJardineMathesonCodeofConduct.During2005,wecommenceddevelopmentofourownCodeofConductwhichencompassescorporatepracticesinbusinessethics,compliance,environmentalandsocialresponsibility,employeerightsandprocurementpractices.Itisbasedonasetofkeybusinessprinciplesandtheframeworksinplaceforbothofourshareholderstotheextenttheyareappropriatetoourmarkets.TheCodewillbecomeformalpolicyduring2006andformsapivotalsupporttooltoreinforcegovernancestandardsacrosstheGroup.
CultureofQualitySustainabilityunderliesourestablishedcorporateaimtodeliverahighlevelofqualitytoourcustomersthroughourbrandvaluesofbeingcustomer-centric,resource-rich,innovativeandriskmanagers.Weengenderacrossourbusinessesandstaffaqualityculturethroughasenseofownershipandprideinourwork.Qualityisthereforeatthecoreofourvaluesandextendsfromourmanagementsystemsandprocessestoourpeopleandtheserviceswedeliver.
Risk Managers> environmentally committed> safety compliant> forward thinking> respectful, team players
Resource-rich> design, build, plant> Asian experts> Balfour Beatty and Jardine
Customer-centric> consensus builders> responsive> trustworthy
Innovative> learning organisation> technology enabled
Quality> product> service> social responsibility
Ourbrandvalues
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CertificationofManagementSystemsinChina
HSEQManagementSystemsGammon’sHealth,Safety,EnvironmentalandQuality(HSEQ)systemsprovideeffectiveandconsistentmanagementofactivitiesacrossallofourbusinessesandfunctions.Asof2005,withthesuccessfulcertificationofourmainlandChinaoperations,allofourregionaloperationsarecertifiedtooperateunderISO9001forqualitymanagementandOHSAS18001certificationforsafety.ISO14001forenvironmentalmanagementappliestoallregionaloperations,exceptforourPristineworkswhichwillseekcertificationin2006.OurrecentlycommencedMacauoperationsoperateunderHongKong’ssystems.Thesesystemsunderpinothercorporatefunctionsincludingprocurement,humanresources,financeandintegratedmanagementservices.IndependentauditsforISOandOHSAScertificationareundertaken,andduring2005,over30wereconductedonourvariousmanagementsystems,representinga43%increaseover2004.During2005,weconductedover65internalaudits.
Gammoniscommittedtoenforcingconsistenthighstandardsofoperationacrossallitsregionalcentres,irrespectiveofthelocalmarketconditionsandregulatoryobligations.Thesestandardsareunpinnedbyourcorporatebrandvalues,ourqualitycultureandamindsetofcontinuousimprovement.
MainlandChina,asadevelopingeconomyposedasetofnewchallengesinsecuringcertificationforourmanagementsystems.Ourbusinessinthisregionalcentrecomprisesthreeseparateandculturallydiverseoperations,withconstructionteamsinthePearlandYangtzeRiverDeltasandoursteelfabricationfactory,Pristine,inDongguan.Thecertificationprocessbeganwithgainingthebuy-inoftheregionalmanagementteams,followedbyreinforcementthroughtrainingoftheworkforce.Wethenhadtoovercomethechallengeofstandardisingourproceduresandworkprocesseswherepreviouslyvariationsexistedduetoculturaldifferencesandexpectations.
EachoftheseoperationsandourcollectivemainlandbusinessnowbenefitfromstandardisedsystemsandapproachesandtheactionandenforcementofGrouplevelinitiativescannowbemoreeasilyintegratedintoallourChina-basedactivities.
During2005,weenhancedourmanagementsystemsthroughourEnterpriseResourcePlanning(ERP)system,enablingustotrackperformanceinrealtime.Throughtheinputofdatafromsitesandoffices,itprovidesthetoolstoenableanalysisofaprojectintermsofHSEperformance.Incidentsandaccidentsaretrackedthroughouttheirlife,andamechanismexistsformeasuringdata,comparisonanalysis,feedbackandimprovementactionsonactivitiesundertaken.TheERPsystemextendstoexternalperformanceappraisalsoftradesubcontractorsandsuppliersbenchmarkingtheirperformanceagainstinternalstandardsincludingthoseforHSEQ.
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Wepromotesociallyresponsiblepracticesandinitiativestoretainourindustryleadershiproleandbethecontractorofchoice.
Gammon’sStaffGammondirectlyemploysnearly3,600peoplehailingfromsomeover17differentcountries.Over51differentprofessionsandtechnicalbackgroundsmakeupourworkforce.Assuch,ouremploymentpolicyistohirethebestpersonforaparticularpositionregardlessofsex,creedorethnicbackground.
Toensurewehaveasustainableworkforce,wehaveinplaceanumberofgroup-widehumanresourceprogrammes.Successionplanningbeingacriticalbusinessissuein2005,wepublishedcareerdevelopmentpathsforallstaff.In2006,wewillestablishandimplementstructuredsuccessionplanningfortheseniormanagementofthebusiness.Thisprocessensuresnurturingofourtalentacrossallbusinessregionsandactivities.
Anappropriatelife/workbalanceisactivelyencouraged.TheGammonStaffRecreationCluborganisesregulareventsandactivitiesacrosstheregionsandattheendof2005,weintroducedalternativeSaturdayworkinginHongKongasopposedtothenormalpracticeofasixdayweek.WemeasureourperformanceasanemployerofchoicethroughregularStaffOpinionSurveysandopenmeetings.Weencouragedialogueamongstallemploymentlevelsandcontinuetoorganiseregularbreakfastsessionsforyoungeremployeestosharetheirviewsdirectlywithseniormanagement.Internalcommunicationsusingtheintranet,noticeboards,visitsandtourspromotestaffawarenessandthebuy-intoourcorporatevalues.
Thecontinuoustraininganddevelopmentofourstaffisrecognisedasanessentialdriverofimprovementandknowledgedevelopment.TheGammonAcademyprovidesaformaltrainingfacilityforusebyallstaffacrosstheGroupaswellasforsubcontractorsandbusinesspartnersonselectedcoursesandprogrammes.During2005,47separatetrainingcoursesweredeliveredbytheAcademy.Site-basedtrainingisdeliveredthroughmorningassemblies,toolboxtalksandclassroomsessions,andtheWorkerRegistrationCentresfacilitatecriticaltraininginsafetyandenvironmentalissuestoourworkersaswellasthoseofoursubcontractors.WealsoprovideannualscholarshipsfortheMasterofInterdisciplinaryDesignandManagementofferedbytheUniversityofHongKong.In2005,threestaffwonscholarshipsandcommencedtheprogrammeandin2006,afurtherfourstaffwillparticipate.
Sincetheearly1980swehaveofferedapprenticeshipsandgraduatetraininginconjunctionwithprofessionalinstitutionsincludingtheConstructionIndustryTrainingAuthority(CITA),HongKongInstitutionofEngineers(HKIE),InstituteofCivilEngineers(ICE)andHongKongInstituteofSurveyors(HKIS).In2005,Gammonawardedcompletioncertificatestoninetechnicianapprenticesand13graduatetrainees.
SocialResponsibility
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PartneringtoOvercomeChallenges
ApplyingthePPPModeltoHongKong’sHighSpeedRoads
PartneringGammonpromotesthepracticeofpartneringasakeystepforwardtoimproveefficiencyfortheindustry.Partneringfostersasharedvision,promotingcommunicationamongstprojectparticipants,championsbestpracticeindesignanddeliveryandultimatelyimprovesoverallperformance.WehostregularPartneringForumstowhichweinvitekeyindustryfiguresandleaderstodebateandpromotetheneedforlastingpartnershipswithintheconstructionindustry.During2005,wehosted14sucheventswithover100differentcompaniesandorganisationsattending.Inparticular,wearestrongadvocatesofthelong-termpartneringapproachtoassetdeliveryandmanagementthroughprocurementmethodologiessuchasPublicPrivatePartnerships(PPP).
TherenovationoftheMandarinOrientalHongKong,aprestigiouslandmarkinthecoreCentralbusinessdistrictofHongKong,involvesnewcurtainwallingtothe26-storeytowerandretailpodium,reconstructionofguestroomsandtherenovationofrestaurant,spaandpublicareas.Inadditiontoaseven-monthclosureperiod,theprogrammeconstraintsincludeaperiodwhenthehotelwillbepartiallyopenforearlyoccupancyandtheconstructionandrefurbishmentundertakenwithindenselyutilisedandnarrowcityblocks.
Early-stageinvolvementonthepartofGammonhashelpedstewardbestvalueindesignsolutionsandthemitigationofnegativeimpactsarisingfromprojectdelivery.Withactiveinvolvementintheprojectforovertwoyears,GammonleadsastheManagementContractorandthroughthepartneringapproach,includingworkshopsandmock-upexericises,seekstoensureaninclusivesupplychainprocessdeliveringvalueformoneyaswellastimelyandinformeddecision-makingtokeeptheprojectontimeandwithinbudget.Thisproactiveapproachtoriskeffectivelyprovidesacomprehensiverisk-basedmanagementprocesstotheprojectonbehalfofthecustomer.
In2005,Gammoncommencedalong-termhighwaymaintenancecontractinHongKongwhichintegratesaPrivatePublicPartnership(PPP)contractapproach.ThecontractisbasedonclearlystatedperformancerequirementsandencouragesarealpartnershipwiththeHighwaysDepartmenttodeliverbettervalueandservice.
ThePPPmodeladoptedprovidesalong-termapproachtothemanagementandmaintenanceofHongKong’shighwayassets.Morestrategic,life-cyclebaseddecisionscanbemadeinrelationtoassetmaintenanceandmanagement.Thelongercontractdurationalsoallowsgreaterinvestmentinspecialistplant,materialsandmethods.Althoughtheprojecthasonlyrecentlycommenced,Gammonhasinitiatedstudieslookingatthelongertermopportunitiesforpromotinginnovation,energyconservationandwastemanagementaswellastheplanningtoolstominimizedisruptiontoroadusersandensuresafetythroughmoreeffectivetemporarytrafficmanagementmeasures.
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RepeatbusinessthroughCustomerSatisfaction
CustomersUnderstandingcustomerneedsandexpectationsispivotaltocorporatestrategyandourlong-termviabilityasabusiness.Asprimarystakeholderstoourbusiness,wecontinuouslyengagetheirinterestswiththeobjectivetounderstandcurrentexpectationsandforourbusinesstorespondtofuturerequirements.WeundertakearegularCustomerSatisfactionSurveytogaugeourstrengthsandidentifygapsinourperformance.Theseundertakingsprovideperformanceindicatorsforcomparisonwithannualsettargets.WecontinuetoseeintheresultsofthesesurveysthatGammon’sbrandvaluesconsistentlymirrortheprioritiesofourcustomers,andmoreimportantly,thatwedeliverintheseareas.FromourpublicsectorcustomersinHongKong,representingasignificantnumberofourprojects,wealsogainfeedbackthroughtheContractor’sPerformanceReports.Forthepastfiveyears,wehaveseenconsistentimprovementinourperformance,whichsignificantlyexceedsthemedianindustryaverage.
GammonandHuaweiTechnologies,amainlandChinesetelecommunicationscompany,haveestablishedalong-termworkingrelationshipfosteredbythemindsetofpartnering.Thisrelationship,builtonmutualtrustandopendialogueinunderstandingeachother’sexpectationshelpsensurecost-effectiveconstructionsolutionsaredeliveredforprojects.
Sinceourfirstcooperationin1999withtheconstructionofHuawei’sresearchanddevelopment(R&D)facilityinShenzhen,mainlandChina,wehavesincebeenretainedforaseriesoffurtherprojectsincludingalterationandadditionsworkstotheoriginalfacility.Thelong-termpartneringrelationshipenablesustofullyunderstandHuawei’sasset(theR&Dfacility)andtheexpectationsoftherelevantstakeholders,namelythecustomerprojectteam,endusersandtheestatemanagementteam.ByunderstandingtheseexpectationsandwiththeknowledgeandexperienceoftheHuawei’sprojects,Gammonisabletofast-trackprojectworkresultingincost-effectiveconstructionmanagementsolutions.
Customer Satisfaction Survey*Overall (including both Public and Private Sectors)
2003 2005200420022001
4
4.5
4.25
3.75
3.5Overall SatisfactionUsing Gammon on Next Project
* Survey results based on a scale of 1– very unsatisfactory to 5– very satisfactory
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SupplyChainManagementinMainlandChina
SupplyChainOurapproachtosupplychainmanagementisunderpinnedbyourbrandvaluestoensurethedeliveryofhighqualityproductsandservicesandtomeetcustomerexpectationsinaconsistentmanner.Acomprehensivesupplychainsystemisoperatedtocontrolandminimiserisksbyembracingalife-cycleapproach,wherewetakeresponsibilityforthefullprocurementprocessfromsourcing,negotiation,contractmanagement,testingandverificationthroughtologisticsanddelivery.Bymanagingrisksatallstagesofthesupplychain,weensuremoreeffectiveandefficientcontrolandareabletominimiseandeliminatenegativeimpacts.
Werecognisetheintegrityofproductsiscriticaltoourreputationandapivotalcomponenttoproductstewardship.Wethereforeseektooffercustomersbetterproductsbyworkingcloselywithoursupplychainonquality,durabilityanddelivery.OurCentresforInnovationandTechnicalExcellence(CITE)helppromotethisthroughdevelopmentofinnovationsandtechniquesinsupportofbestpractice.
Withsuppliersandsubcontractors,weseektoengendersustainabilityasabusinessethicinoursupplychainmanagement.In2005,weconductedthreeSupplyChainPartnerSharingsessionsattendedbyover40ofourbusinesspartnersinHongKongandShenzhen,withtheaimtodiscusspartneringissuesandtoraisestandardsofmanagementacrosstheindustry.Wehavereceivedexcellentfeedbackfromthesesessionsandarealreadyseeingthebenefitsthroughclosercooperationandworkingtogetherincertainareas.Wehavealsoidentifiedtheneedforourapproachtofocusonoursubcontractors.Thisisapriorityareafor2006.
MainlandChina,althoughbeingamajorsourceofconstructionmaterials,presentsnumerouschallengesinmeetingGammon’sminimumsuppliercriteria.Securityofsupply,qualityofproductandspecifiedstandardsinsafetyandenvironmentforfactoryoperationsrequirethehands-oninvolvementofourProcurementteaminthisdevelopingmarket.GammonundertookapilotauditingprogrammewithGuangxiHuahongCementCo.Ltdtoinitiateanewsourceforcementsupply.Factoryvisitsandauditswereundertakentoinspectoperations,interviewmanagement,reviewexistingenvironmentalpracticesinregardstocommunityimpact,assesstheprospectsforGovernmentassistanceinupgradingtheexistingfacilitiesandalsotoinspecttheirtransportandlogisticsfacilities.SubsequentmeetingsandtheformulationofanimprovementprogrammeledtothequalificationofthecompanyanditsGuangxi-locatedfactorybecomingaregularsuppliertoourMacauoperationsduring2005.Regularauditswillcontinuetoassuresupplierintegrity.
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Weoperateunderapolicyofresponsibleprocurementacrossourbusinessesaspartofthesupplychainmanagementprocess,withimplementationthroughadecentralisedframeworkforregionalcentres.Nevertheless,allofficesshareacommonmethodology,whichlooksbeyondpricealoneintheselectionprocessforsuppliers.Considerationisgiventohealthandsafetyissues,environmentalcomplianceandtreatmentofworkers,throughduediligencesiteandfactoryvisits.In2005,wecommencedunifyingsupplierinformationfromourregionalcentresforfutureconsolidationandcomparisonofdata,policydevelopmentandactionsonbestpracticeforprocurement.
In2005,wealsoconsolidatedamechanismtobenchmarktheperformanceofindividualtradesuppliersandsubcontractorsworkingonGammonprojects.Thisinformationisnowpublishedviaourextranet,accessiblebyourvendors,sothattheycanunderstandandbenchmarktheirrelativeperformanceagainstothersametradecompaniesbeingusedbyGammon.Thisinformationwillalsobeusedforreviewanddiscussiontoinstigatecontinuousimprovement.
CommunityWithintheurbanareaswherewework,wemustmeetthelocalcommunities’andstakeholders’increasingexpectationsinprojectdelivery.Engagingandeducatingontheworkweareperformingcontinuingthroughthelifecycleofourprojectsisaprioritytous.Onandoff-site,wecloselymanagesafety,environmentalandnuisancefactors.Forexample,during2005weundertookacomprehensiveappraisalofpublicriskarisingfromouractivitieswithanumberofareasforactionidentified.
Throughactivestakeholderengagementandthevoluntaryadoptionofstringentperformancestandards,GammonhasbeenabletoidentifyandmanagepotentialnegativecommunityimpactsarisingfromthecomprehensiveupgradeoftheLandmarkretailandcommercialcomplex.LocatedinHongKong’scorebusinessdistrictofCentral,theshoppingcomplexposesnumerouspublicconstraintstotheworkingstrategy,sequenceandtimingoftheworks.Theseincludeaccesstothecomplex,asitremainsopentothepublicthroughouttheworks,theofficesadjacenttothesideandanewluxuryboutiquehotelrecentlyopenedinthecomplexitself.
Throughregularclientandtenantmeetings,goodplanningandeffectivecommunications,potentialconflictsareanticipatedandproactivelymanaged.Forwardplanningandworkssequencinghasensuredpublicareasandworksitesareclearlydelineatedandaresafeforpedestriansandgeneralpublicuseand,thatdisruptionstotheheavilycongestedstreetlevelareasareminimised.Nuisancefactorstotenants,theexistingbuildingandsurroundingpropertieshavebeenreducedwiththeadoptionofstringentvoluntarynoiseandvibrationstandards.Regularengagementensurespromptattentiontoallcomplaintsandenquiresonsiteworks.Todate,responsesfromstakeholdershavedemonstratedthatthebusinesseswithinthecomplexhavenotbeenmarkedlydisturbedduringtheworks.
ALandmarkChallenge
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WiththeexpansionofourPristinesteelfabricationfactoryinDongguan,noisegenerationfromtheextendedproductionyardposedapotentialnuisanceimpactduetotheadjacentlocationofahostel.Pristine’smanagementandstafftookaproactiveandvoluntaryapproachtothispotentialproblem.Followingdetailednoiseassessments,bothfordayandnight-timesituations,theresultswereusedforthedesignandconstructionofanoiseenclosuretoensurethatthenoiselevelsatthehostelarereducedtowithinacceptablestandards.Subsequenttestinghasconfirmedthis.ThisexercisewasundertakenaspartofGammon’scommitmenttotheFederationofHongKongIndustries’1-1-1ProgrammeaimedatencouragingenvironmentalimprovementandstewardshipinthePearlRiverDelta.
Ourcommitmenttothecommunityreachesbeyondourworksitesandtheirimpacts.Wearearegularcontributorandparticipantinlocalcharitiesandevents.GammonrunsaMindsetprogramme,whichpromotestherehabilitationofmentallyillpatientsthroughemploymentandalsoworkscloselywithlocalschoolsthroughourstaffwhovolunteerasambassadorstotheMindsetprogramme.Weactivelysupporttheconstructionindustry’sowncharity,theLighthouseClub,forthoseaffectedbyconstruction-relatedincidents,andregularlysupporttheCommunityChest,theChristinaNobleChildren’sFoundationandothercharities.Ourstaffarealsoregularparticipantsandvolunteersincommunityeventsthatpromotesocialandenvironmentalissues.
During2005,GammonsponsoredaMindsetprojectwhichinvolvedtheconversionoftheoldstaffandwelfareclubatCastlePeakHospital,HongKong,intoamulti-functionalcommunitycentre.Thecentre,comprisingsome7,000squarefeet,isopentotheHospital’spatientsandtheirfamilymembers,servingasavenueandprovidingfacilitiesforvariousactivitiessuchasvocationaltrainingandself-helpgroups.Gammonundertooktheoverallmanagementandtherenovationservice,ensuringeffectivecoordinationwithallpartiesinvolvedandsuccessfulcompletion.
Gammoncontinuestopromoteandsupportthenextgenerationofengineeringandconstructionprofessionals.In2005,atotalof28undergraduatesfromeightuniversitieswereselectedtojointheGammonUniversityFellowship.TheFellowshipsprovidepersonalmentoring,training,sitevisits,involvementinGammonactivitiesandprioritytoapermanentcareerwithGammon.Wehavealsowell-establishedscholarshipprogrammeswiththreeleadingChineseUniversities:TsinghuaUniversityinBeijing,TongjiUniversityinShanghaiandtheSouthChinaUniversityofTechnologyinGuangzhou.Eightyonescholarshipshavebeengiventostudentsattheseinstitutionsprovidingthemtheopportunitytocompletefurthereducation.
MindsetatCastlePeakHospital
CommunityResponsibilityinChina
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HealthandSafety
Asthefourthfacetoftooursustainabilityvision,Health&Safetyismanagedasapriorityfunctiontoourbusiness.
ZeroAccidentVisionWedonotcompromiseincreatingthebestinaworkingenvironment,equipmentmaintenanceandstafftrainingtosupportourzeroaccidentvision.Acomprehensiverangeofinitiativestocreateacultureofsafetythatminimisesrisk,seekstoeliminateaccidentsandstrivesforfullcomplianceonsitesunderpinsourvision.
Inalloperatingareas,initiativesaresupportedbycertifiedsafetymanagementsystems(toOHSAS18001standard),site-specificriskregisters,regulartrainingtoallstaffandon-sitemanagementbycertifiedsafetypersonnel.Weannuallysetprimaryandsecondarytargetstotrackourperformanceinsafety.Primarytargetsrelatetoissuessuchasaccidents,incidentratesandnon-compliances,whereasoursecondarytargetsintroduceaseriesof‘nearmiss’measurables.
TheSentosaCoveArrivalplazaprojectislocatedonSingapore’sresortislandofSentosa.TheGammonprojectteamfacedsafetychallengesduetothelargeareaoftheprojectsite,themultipleconcurrentworkfronts,andtherequiredextensivescaffoldingtoprovideworkingplatformsandaccess.Inaddition,aculturallydiversesubcontractorworkforceneededtobemanaged.
Tomeetandovercomethesafetyrisks,theprojectteamimplementedacomprehensivesafetymanagementsystem,whereallsupervisorystaffandsubcontractorswerepartytoitsimplementationandachievingtheproject’ssafetygoals.Theactioningofanareamanagementscoringscheme(seecasestudyonpage18),whichtoourknowledgeisthefirstapplicationofsuchasysteminSingapore,provedtobeakeycomponentofthesite’ssafetysuccess.
During2005,theprojecthadnoreportableaccidentsorlosttimeincidentsdespiteover380,000man-hourshavingbeenworked.
AchievingtheZeroAccidentVisionSentosaCove,Singapore
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In2005,Gammonachieveditslowest,mostimprovedaccidentrateeverrecordedandthehighestlevelsofcompliancetoHealthandSafetyregulations,with29%and33%improvementsrespectivelycomparedwithour2004performance.UsingtheGovernmentproducedfiguresfortheHongKongconstructionindustryaverageaccidentincidentrate,werateamongstthetopperformingcompaniesinourindustry.Ourperformancehasbeenrecognisedbyindustrythroughanumberofawardsforsafety.
Despitethesebesteffortsandperformance,constructionremainsahigh-riskbusinessandwehaveyettototallyeliminatesafetyriskexposure.In2005,fourfatalitiesoccurredonoursites.Ourresponsestotheseaccidentshavebeenswiftwithimmediateinvestigationsandreviewsundertakenofbothmanagementandequipmenttounderstandtheapparentdisconnectcomparedwithourimprovedoverallperformance.Thefindingsoftheseinvestigationsarenotjustfocussedonidentifyingtherootcausesoftheseunfortunateaccidents,butaddresswhereandhowtoeliminatesimilarsituationsinfuture.Aseriesofhigh-levelinitiativeswillbeundertakenin2006tofurtherimprovesitepracticesandaccountability.
TargetingHighRiskActivitiesCertainactivitiespresenthigherthanusualrisksonourconstructionsites.Baseduponourprojectworkandactivitiestobeundertaken,wearecontinuallyreviewingareaswhereweneedtobevigilantandreinforcesafetymessagesandexpectations.Anexample,our‘WorkingatHeightSafetyCampaign’,waslaunchedin2005toenhanceandpromoteworkingatheightsafetyawarenessandtorewardoursites,workersandforemenforoutstandingperformance.TheWorkingatHeightCharterwassignedinJune2005byGammon’sseniormanagementtocommitourselvestothisinitiative.Itisplannedtotracktheeffectivenessofthispromotionalactivityandundertakefurthercampaignsin2006.
InOctober2005,toreinforcesafetyawareness,weheldGammon’sfirstHealthandSafetyFamilyDayinHongKong.Thedayattractedover700visitors,includingstaffandtheirfamilies,subcontractors,clientsandGovernmentofficials.Inadditiontogamesboothsaimedatreinforcingthesafetymessage,anawardpresentationwasheldforthewinnersofthecompetitionsfortheBestSafetySite,theBestSafetyForeman,theBestSafetyWorkerandtheBestSafetySlogan.
Accident Incident Rates (per 1,000 workers)*2001–2005
30
25
20
15
10
5
0
Hong Kong SectorChinaSingaporeGroup excluding ChinaInternational2001 2002 2003 2004 2005
* For comparison, the latest available incident rate for the Hong Kong construction industry (For 2004) was 60.3 per 1,000 workers.
30
25
20
15
10
5
0
ReinforcingSafetyAwareness
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Behavioural-basedSafetyBehavioural-basedSafety(BBS)introducesasystematicon-goingapproachtosafetymanagementbyobservingworkerbehaviourandsafetyawarenessonsiteandassessingwhyworkersbehavethewaytheydo.Behavioural-basedsafetyisabottom-upapproachfocusingonfront-lineworkers,supervisorsandmiddlemanagers,whereincriticalbehavioursareidentifiedandtargetedforchange.Theseactionsincludegoalsettingandopendiscussionwithworkersontargetsforsafety,regularsitevisitsbyDirectorsandseniormanagementtoenforcecorporatecommitmenttosafety,andtheintroductionofrewardschemesforworkersinbestsafetypractices.
In2004,GammonembarkedonapilotstudywiththeOS&HCouncilinHongKong,whichidentifiedanumberoffocalareastoimprovesafetyawarenessandbehaviour.In2005,wefollowedupbyworkingjointlywithTsingHuaUniversityonafurtherresearchstudy.ThreeofGammon’smajorconstructionsitesinHongKongwereselectedtoparticipateinthisstudyandthefindingshavereinforcedthenecessityofhighlevelinvolvementinsafetymanagementandthebenefitsofgoalsetting.AlthoughtheuseandapplicationofBBSintheconstructionindustryremainsatapreliminarystageofunderstanding,forGammontheestablishmentoftheAreaManagementschemealongwiththetrainingofoursub-contractor’smanagementareimportantoutcomesofourBBSstudiestodate.
Safetyisbothapersonalcommitmentandtheresponsibilityofallworkersatalltimesonsite.Tobringthisunderstandingtobothemployeesandsubcontractedworkers,in2005weintroducedtoallofoursitestheAreaManagementscheme.Thisisamethodologywherebyappointedindividuals,knownasAreaManagers,aremeasuredandscoredontheperformanceoftheirrespectivesite-basedteamsforHealth,Safety,EnvironmentalandSecurity(HSES)basedonobservedphysicalconditionsonsite.ThisisachievedbydividinganygivensiteintoclearlyidentifiableareasinwhichboththeAreaManagersandtheirteamsareassignedwithoverallresponsibilityforHSES.
WeeklyinspectionsandscoringoftheseareasisundertakenbyGammon’ssafetystaff,withtheperformanceresultsreportedbacktoseniorsitemanagementforreviewandaction.Inaddition,anindependentauditorcarriesoutperiodicauditsofallsitestoensureaccuratescoringandthuscreateamorecomparativestandardacrosstheCompany.During2005,theAreaManagementschemewasinitiatedacrossallprojectsitesinclusiveofallourregionaloperations.Thisisasignificantadditionalperformancemonitoringandbenchmarkingschemewhichwebelieveisuniquetotheindustry.
AccountabilityattheWorkSiteAreaManagement
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WorkerRegistrationandTrainingDuring2005,weaddedtwofurtherWorkers’RegistrationCentrestoouroperations,oneinMacauandafourthinHongKong,tosupplementtheexistingthree.Inadditiontotheirfunctionasregistrationfacilities,thesecentresprovidecompulsoryhalf-daypracticalsafetyandenvironmenttrainingcoursestailoredtotheneedsoffrontlineworkers.Bytheendof2005,atotalof13,180workersfromGammonsitesanddirectGammonstaffhadattendedourregistrationcentreswithover86%ofthesebeingsubcontractorworkers.
WorkingwithSubcontractorsandSuppliersGammonacknowledgesthatinordertomaintainconsistentlyhighhealthandsafetystandards,thetrainingandeducationofoursubcontractors’managersisacriticalcomponentofthesafetycultureandmindset.In2004,theGammonAcademylaunchedafulldaytrainingcourseentitled‘HSEManagementSystemforSubcontractors’,whichwastargetedatoursubcontractors’seniormanagersanddirectors.In2005,31subcontractors’managementstaffattendedthiscourse.
EnsuringaHealthyWorkingEnvironmentAllGammonprojectsitesarerequiredtomeetminimumstandardsofhealthandhygiene,whichareinspectedroutinelyduringinternalauditsandwhenundertakingAreaManagementinspections.Protectionagainstmosquitoes,rodentsandotherpestsisroutinelyundertaken.
InresponsetothepotentialforAvianFlu,during2005weprovidedPersonalHealthProtectionKitstoeachmonthlyanddailypaidmemberofstaff.Thepurposeofthekitistoactasapreventionmeasureagainsttheoutbreakoftheinfectiousdiseases.Furthermore,ahealthpromotioncampaignwasorganizedtopromotehealthawarenessamongstaffincludingrecommendedpersonalhygienetraining.
Attendees at Gammon’s Worker Registration Centres(at 31/12/05)
Direct Gammon Workers (1,786) Subcontractor Workers (11,394)
13.6
86.4
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Westriveforcontinuousimprovementandleadershipinenvironmentalprotectionthroughinnovationandbestpractice.
ManagingImpactsWetackleenvironmentalmattersthroughourcompany-wideenvironmentalmanagementsystems.Byfirstquantifyingandmeasuringourperformance,weareabletoimplementandadoptappropriatemitigationmeasurestominimiseandmangetheimpactsofourbusinessactivities.Werecognisethattheextenttowhichweareabletomanageandcontroltheseenvironmentalimpactsisafunctionofthedeliveryandprocurementprocess,theextentofownershipandtheactualprojectspecifics.Toreachbeyondtheselimitations,wepromotepartnering,earlystagedesigninvolvement,buildabilitystudiesandotherinitiativesandmeanstopromoteandadoptbestpractice.
PerformanceMonitoringEnvironmentalregulatorycompliancerepresentstheminimumexpectationforourbusiness.During2005,wereceivedtwolegalnon-compliances,oneforaprojectsiteinHongKongwhereanillegalwaterdischargeoccurredfollowingtheaccidentalturningoffofacontrolpump,andthesecondforanoiseissueinSingapore.Actionsweretakentoimmediatelyrectifytheseproblemsandtotakemeasurestohelpensurenosimilarbreachesinthefuture.
In2003wecommencedenvironmentaldatacollectionfromourmajorHongKongprojectsfocusingonwastegeneration,waterconsumptionandenergyusage.Thisprogrammewasextendedin2004toallHongKongprojectsandin2005toallofGammon’soperations,activities,offices,supportservicesandregionalbusinesses.ThismostrecentexerciseprovidesthemeanstoquantifyourdirectenvironmentalimpactsinacomprehensiveandcoordinatedmannerforbettermanagementandGrouptargetsetting.
Performancefor2005 HongKong Singapore* China Total (includesMacau) (includesPristine)
Landfillwaste(m3) 244,274 7,152 634 252,060
WastetoPublicFill(m3) 416,130 Nodata Nodata –
ElectricityUsage(kWh) 19,695,029 459,371 1,766,896 21,921,296
DieselandPetrolUsage(litres) 26,888,659 873,101 158,390 27,920,150
Waterconsumption(m3) 545,860 15,997 44,313 606,170
* Singapore data has been extrapolated for the year based upon August to December returns.
TheNamWanTunnelprojectgeneratedover800,000m3ofrockspoilinexcavationwaste.Withourproactiveapproachtomanagement,theprojectteamundertookprocessingofthespoilintoreusablematerialviaaGammon-establishedsortingfacility.Then,throughcollaborativeeffortsinvolvingbothGammonandothermanagedconstructionsites,theentirevolumewassuccessfullydistributedacrossprojectsinHongKong.This100%recyclingrateattractedwide-spreadindustryattentionforbestpracticewiththeGammonteambeingawardedhighesthonoursatthe2005HongKongEco-BusinessAwards.
EnvironmentalProtection
CollaborativeWasteRecycling
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FundamentaltothecollectionofenvironmentaldataistheestablishmentofKeyPerformanceIndicators(KPI)forourHongKongoperations,wheretimeseriesdataexistsforwaste,waterandenergyusage.In2005,theefficiencyofuseofenergyandwaterimproved,howeverwastedisposedtolandfillincreased,thereforepartiallymeetingour2005targets.Thisincreaseinlandfillwasteisduetoaspecificcontractrequiringsubstantialexcavationsandlandfilldisposalofreclamationsoils.WithacomprehensivedatasetnowexistingforalloftheGammonregionsandactivities,GroupKPI’swillberolledoutaccordinglyin2006andbeyond.TheseKPI’swillenableperformancetobetrackedandspecificenvironmentaltargetstobesetinthefuture.
TakingResponsibility:GreenhouseGasesandAirPollutionInSeptember2005,GammonsignedthevoluntaryCleanAirCharterpromotedbytheBusinessCoalitionontheEnvironment(BCE)inHongKong.ThisCharterrepresentsthefirststepsbythelocalbusinesscommunitytoaddresstheairpollutionproblemsthatthegreaterPearlRiverDeltafaces.Asasignatory,wehaveestablishedanin-houseworkinggroupcomprisingrepresentativesfromourdifferentoperatingunitstoformulateanactionplantoreduceourairqualityimpacts,whicharisefromavarietyofactivitiessuchastransportation,on-siteplantusage,electricityconsumptionandchemicalsusage.Animportantaspectofourplanistoquantifythedirectgreenhousegascontributionourbusinessmakesasacarbondioxideequivalent.The2005yearmarksamilestoneforenactingtheprocesstomeasureandreportongreenhousegasemissionsacrossallofourregionalbusinesses.
GammonpossessesandmanagesthelargestplantfleetinHongKong,comprisingover1,300piecesofplantassets.Toresponsiblymanagetheenvironmentalimpactsassociatedwiththisfleet,particularlyairemissionsandnoise,weemployacomprehensivePreventiveMaintenanceProgramme(PMP)foreachitemofplantandequipment.ThePMPismanagedbyacomputerisedinformationmanagementsystem,promptingandtrackingtoclosurenecessarymaintenanceworks.Plantperformanceintheareasofnoisegeneration,exhaustemissionsandfuelconsumptionisalsoroutinelyassessedsothatthePMPensuresareliable,well-maintained,quieter,efficientandmoreenvironmentally-friendlyfleet.
18.04
2004 2005 2004 2005 2004 2005
16.27
13.47
11.55
8.6410.11
Water KPIWater used (m3) per HK$100k Expenditure
Waste KPIWaste generated (m3) per HK$100k Expenditure
Energy KPIEnergy used (GJ) per HK$100k Expenditure
Hong Kong Sector
PollutionControlthroughAssetManagement
Group Greenhouse Gas Emissions 2005CO2 Equivalent (%)
Hong Kong and Macau(80,014 tonnes)
China (including Pristine)(1,184 tonnes)
Singapore (2,537 tonnes)Note: Calculated based on Greenhouse Gas Protocolpublished by WBCSD / WRI (excludes air travel)
95.6
31.472,669
2004 2005 2004 2005
68,537
6,7619,333 Transportation
(excludes air travel)
Support(offices, concreteand steel)
Operations
Comparable Performance (Hong Kong Sector)CO2 Equivalent (tonnes)
2,1442,297
PollutionControlthroughAssetManagement
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PromotingInnovationandGreenConstructionAsaconstructionserviceprovider,wearecontinuouslypromotinginnovationindesignandconstructiontechniquestodrivebetterenvironmentalperformanceandefficiencies.Atthebasiclevel,allourprojectsitesmustadoptandfollowenvironmentalandwastemanagementprogrammestonotonlyensurecompliance,butalsotodemonstratecontinuousimprovement.
Opportunitiesatthedesignstageofprojectsenablesenvironmentalprinciplesandintentionstobeintegratedsuchasoptimisingenergyefficiency,minimisingresourceusageandthedesigningoutofwaste.Thesubsequentconstructionmethodologiesadopted,orbuildability,alsoformsakeyconsideration.Precastandprefabricatedsolutionshelpreduceon-siteimpactssuchaswastegenerationandconstructionplanningandmethodologiespromoteenvironmentalsavingsandbenefits.Gammonadvocatesconsiderationoftheseapproachesonallprojects.WealsosupportschemeswhichrateandquantifysubsequentenvironmentalperformanceofprojectssuchastheHongKongBuildingEnvironmentalAssessmentMethodology(HK-BEAM).
TheawardoftheDesignandBuildContractforCastlePeakRoadinHongKongpresentedanexcellentopportunitytoembraceandimplementenvironmentalandwastemanagementprinciplesattheprojectdesignstage.UsingLambethAssociates,ourin-housedesigners,redesigncombinedwithleanconstructiontechniquesenabledanumberofinnovationsandenvironmentalimprovementstobemadetoenhanceproposalsmadeattenderstage.Theextentofconstructionactivitiesandmaterialshavebeenreducedthroughdesignchangestotheroadalignmentandpilecaps.Seawalldesignchangesreducedtherequiredextentofdredgingbyapproximately30%.Aswell,significantwastemanagementgainswereachievedthroughthereuseof47,500m3ofdredgedmaterialsforreclamationandseawallconstructionandthroughinter-projectcollaboration,50,000m3ofresidualfinesarisingfromGammon’sNamWanTunnelprojectwereutilised.
BalfourBeattyE&M,awhollyownedsubsidiaryofGammon,injointventurewithBalfourBeattyPowerNetworksundertookseveraltowerlinerefurbishmentcontractsduring2005.ThemajorityoftowerlocationsinHongKongaresituatedinthecountryparks,whichimposesignificantenvironmentalsensitivities.Traditionalapproachestomaintenanceandrefurbishmentwouldrequiretheneedforaccessroutesandworkingspacestobeconstructed,damagingthelocalecology.Inresponse,theBalfourBeattyE&Mprojectteamdevelopedaninnovativesolutiontousehelicoptersasskycranestoremovetowertopsectionsduringreplacementworks,representingafirstforHongKong.Theassociatedhelicopternoiseissuewasappraisedbutthelocalisedshort-termnoiseimpactswereoutweighedbythelong-termecologicalbenefits.Thisinnovativealternativeprovedverysuccessful,acceleratingtheprojectprogrammeandensuringminimaldisturbanceofexistingvegetationwithintheparks.
MinimisingWasteThroughDesign
ProtectingBiodiversityThroughInnovation
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Life-CycleEnvironmentalManagementWhereweownassets,aswithourconstructionsupportservicesinHongKongandourPristinesteelfabricationfactoryinmainlandChina,weseektoresponsiblymanagetheassociatedupstreamanddownstreamenvironmentalimpacts.Allassetsarecoveredbyenvironmentalmanagementsystemsandweemploycontinuousreviewprocedurestopromoteandintegratebest-practicemeasurestoensurewegobeyondlegalcompliance.Long-termprojectandassetmanagementcontractswillsimilarlytransfertheownershipandhenceopportunitiesoflife-cycleenvironmentalissuestothecontractingteams.
Duringtheconcretebatchinganddeliveryprocess,wastageofsomefreshconcreteisinevitable.In2005,werevisitedthelandfilldisposaloptiontoseekamoresustainablesolutionforwastetreatment.Aswastefreshconcreteideallylendsitselftobeingrecycled,wehaveinvestigatedandinstalledaconcretereclaimeratourmainbatchingplantinHongKong,whichenablesphysicalseparationofsandandaggregatesfromfinesthroughtheuseofwater.Immediatewastebenefitsfromthereclaimerincludeareductionbyover60%inthevolumesofwastebeingsenttolandfillaswellasresourcesavingsthroughthereuseofaggregatesandriversand.Thesebenefitsreducetrafficmovementsassociatedwithtransportationofwastetolandfillsandnewaggregatestothebatchingplant,generatinglocalcommunitybenefitsofreducedroadtrafficandairemissions.
EnvironmentalManagementintheSupplyChainThislife-cycleapproachisreflectedinourstrategyforaresponsibleandaccountablesourcingprogramme.During2005weimplementedtheProcurementEnvironmentalAwarenessProgramme(PEAP)tointroducebestpracticetooursupplychainthroughin-housetrainingandexternaldiscussionswithourbusinesspartners.Inaddition,thePEAPestablishedaframeworkforassessingandrespondingtotheupstreamanddownstreamimpactsassociatedwiththemajorprojectsuppliersandmaterialsweuse.Thisisanon-goingprocessgiventhequantityandvariationofmaterialswesource.
During2005,productappraisalsofthecementwesourcehasdefinedtheauditprotocolweneedtofollowforaproposednewsupplier.Appraisalsundertakenjointlywithourfuelsupplierin2005haveestablishedanactionplantopromotemoreefficientdieselusageonsiteaswellasidentifyingopportunitiesfortheuseofmoreenvironmentally-friendlyalternativefuels.
SustainableConcreteWasteManagement
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2005PerformanceSummary
Economic&Business
1 CertificationinmainlandChinaofourmanagementsystems SubstantiallyAchieved
2 Standardisegroupriskmanagementprocessandprovidetraining Achieved
3 Simplifyinternalmanagementandgovernanceproceduresthroughtheconsolidationofmanagementmanuals NotAchieved2006target
4 ImplementHumanResourceprogrammestofurtherimproveproductivityandstaffengagement Achieved
5 Developadedicatedsustainabilityintranetsiteaccessibletoallstaff Achieved
SocialResponsibility
1 BuilduponPartneringinitiativesstartedin2004withstrategicbusinesspartnersthroughservices, Achieved venderperformanceappraisalsandopinionsurveys
2 Continuetopromotepartneringandsustainabilitywithinthewiderconstructionindustry Achieved
3 Improveoverallsatisfactionofcustomers PartiallyAchieved
4 ContinuetopromotecommunityengagementonexistingandnewGammonprojects Achieved
5 Publishcareerdevelopmentpathsforallstaff Achieved
Health&Safety
1 MeetGroupPrimaryandSecondarytargetsforHealthandSafety NotAchieved
2 ImplementtwonewinitiativesandprogrammestopromotetheZeroAccidentsVision Achieved
3 ImplementonallHongKongsitesanAreaManagementSystemtomanageandcontrolHSEissues Achieved
4 Ensurethat100%ofGammonandsubcontractorworkforceonGammonHKprojectshaveattended Achieved theWorkersRegistrationCentres
5 Implementtransparenthealth&safetystatisticsanddatarecordinginChina Achieved
EnvironmentalProtection
1 Achievetargetsandobjectivessetin2005EnvironmentalManagementProgramme Achieved
2 Achieveimprovedperformancewithrespecttowastegenerationandresourceusageasmeasured PartiallyAchieved bythekeyperformanceindicators
3 ExtendbenchmarkingactivitiestoallofGammon’soperationsinChina,Singapore,MacauandConstructionServices Achieved
4 Implementanenergymanagementandconservationprogramme NotAchieved
5 ImplementtheProcurementEnvironmentalAwarenessProgramme(PEAP) Achieved
Asummaryofourprogresswithrespecttothe2005targetssetinourlastSustainabilityReportisprovidedbelow.
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ForfurtherinformationonthisReportandGammon’ssustainabilityactivities,contactourEnvironmentalandSustainabilityManager:
t +�522516��56e [email protected]
FurthercopiesofthisReportareavailableuponrequestandcanalsobedownloadedfromourcorporatewebsite:
w www.gammonconstruction.com
Outlookfor2006
Economic&Business
1 UpdateandissuenewGammonCodeofConducttoreflectourshareholders’expectations
2 ConductEnterpriseResourcePlanningusercertificationtoallrequiredstaff
3 SeekISO14001certificationforPristine
4 Ensureaveragestaffproductivityismaintained
5 Continuetopromoteanddeveloprelationshipsforrecurringandlifecycleearningsopportunities
SocialResponsibility
1 GaugeinternalstaffmoraleandengagementthroughconductingOpinionSurveys
2 Implementstructuredsuccessionplanningforseniormanagement
3 Increaseoverallcustomersatisfactioninprivatesector
4 Selectstrategicpartnersforeachtradefortenderingthroughasystematicassessmentprocedure
5 Engagesubcontractorsforenhancedsupplychainmanagement
Health&Safety
1 MeetGroupPrimaryandSecondarytargetsforhealthandsafety
2 Implementroutineplantandequipmentsafetychecks
3 Implementmeasurestoenhancethesafetyriskmangementprocess
4 Undertakehigh-levelinitiativesinvolvingalllevelsofmanagementtofurtherimprovesitepracticeandaccountability
5 Structuredsafetytrainingprogrammeforallstaffgrades Achieved
EnvironmentalProtection
1 Achievetheobjectivesandtargetssetinthe2006EnvironmentalManagementProgramme
2 MeetperformancetargetsforenergyandwaterusageandwastegenerationinHongKongbasedonestablishedkeyperformanceindicators
3 FulfillobligationsofBCECleanAirCharter
4 Implementastructuredenvironmentaltrainingplanforallstaff
5 ImplementperformancetargetsacrossthedifferentGammonbusinessunitsandregions Achieved
GammonhassetthefollowingtargetsataGrouplevelfor2006tofurtherreinforceourcorporatesustainabilitycommitments.
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HONG KONG
HeadquartersGammon Construction Limited28/F., Devon HouseTaikoo Place, 979 King’s RoadHong KongTel: 852 2516 8823Fax: 852 2516 6260
MACAU
Gammon Building Construction(Macau) Limited168 EDIF Tong Nam Ah Centre Com19/R MacauTel: 853 827 789Fax: 853 827 938
SINGAPORE
Gammon Construction LimitedSingapore Branch102F Pasir Panjang Road #07-02Citilink Warehouse ComplexSingapore 118530SingaporeTel: 65 6274 3622Fax: 65 6275 0622
CHINA
Gammon Construction (China) LimitedShenzhen33/F United Plaza5022 Binhe Avenue, FutianShenzhen 518026People’s Republic of ChinaTel: 86 755 8373 2902Fax: 86 755 8291 1915
ShanghaiRoom 8, 8/F., East Ocean Centre, Tower II618 Yan An Road EastShanghai 200001People’s Republic of ChinaTel: 86 21 5385 5258Fax: 86 21 5385 4241
BeijingNo. 604 Diyang TowerH2 Dongsanhuan Bei LuChaoyang DistrictBeijing 100027People’s Republic of ChinaTel: 86 10 8453 7688Fax: 86 10 8453 7699