This 2004 Corporate
Social Responsibility (CSR) Report is SembCorp Industries’
third environmental and citizenship report. This year, we have made
efforts to provide more detailed disclosure on a range of environmental
and community issues. We recognise that the information provided
is not yet comprehensive. However, this Report constitutes one of
a series of measures towards our ultimate aim: triple bottom line
reporting of the full range of environmental, social, and economic
SembCorp Industries recognises that to be a truly successful company,
we must have a strong commitment to improving the world around us,
and must behave as a responsible corporate citizen. This commitment
directly influences the way we conduct our businesses and how we
interact with the world at large. We aim to protect the environment,
the health and safety of our employees and customers, and the communities
in which we operate. Above all, we strive to inculcate a culture
that recognizes the importance of health, safety and the environment
at every level.
Despite the business challenges of the last year, we have been careful
not to neglect this commitment. Implementation of the international
ISO 14001 standard and other Environment, Health, and Safety (EHS)
management systems continued throughout 2004. The Group also launched
many excellent environmental and community initiatives, such as
the use of renewable fuel at our power station in the UK, and educational
support to underprivileged children in Singapore. We intend to build
on these efforts in the coming year.
We are also proud of SembCorp employees who give their time, money,
and care to community development initiatives, or work to ensure
a safe and healthy workplace. We strive to support our employees
as they pursue these initiatives.
Environment, Health, and Safety Statement
SembCorp Industries strives to be a leader - setting standards
for the industry. We are committed to responsibly serving our
community and safeguarding the environment. We aim to conduct
all business operations in a manner that ensures the health
and safety of our customers, employees, the communities in which
we operate, and our ecological system.
Understanding the importance of health, safety and the environment,
Assist the community by offering products, services
and solutions that will better conserve and protect our environment
Encourage conservation and recycling in an effort to increase
participation in recycling and promote environmental awareness
among our staff and community
Ensure safe operations while minimising impacts on the environment
and the communities in which we operate
As part of our ongoing efforts to improve our
operations in a responsible and environmentally sustainable
manner, we will also:
Comply with existing environmental health and safety laws
and legislation in all our operations
Continue research, development and employee training and education
in order to conduct business in a responsible manner
Conduct careful review of all procedures to improve performance
and quality, with constant consideration of environmental factors
Incidentally, with the expansion of our environmental businesses
over the last few years, the SembCorp Group has become one of the
largest environmental service providers in Asia. These businesses,
which currently generate revenues in excess of S$360 million, directly
improve the environment, sanitation and public health in the region.
While we have made significant progress over the last few years,
our journey on the road towards corporate citizenship is far from
over. We look forward to working together with all of our stakeholders,
in 2005 and beyond, in order to achieve ever greater levels of environmental
and community excellence.
Our approach to integrating environmental and social considerations
into our business comprises three main thrusts. First, we actively
manage our operations to continually improve our performance and
reduce risk. Second, we invest in environmental businesses around
Asia. Third, through working with partners who pay heed to environmental
concerns, we are able to influence the environmental, health, and
safety performance of our suppliers and products.
Proactive management of environmental performance
At a Group level, a SembCorp Industries Board Director is responsible
for overseeing our overall environmental and corporate citizenship
Meanwhile, the SembCorp Industries Environmental Committee, chaired
by the President of one of our business units and comprising representatives
from all business units, continues to work towards ensuring best
practice, compliance, innovation, and environmental responsibility
throughout the Group. Cross-functional committees are also used
for a similar purpose within our business units, for example SembCorp
Utilities (SembUtilities) and The Singapore Mint.
Management Systems in Place: ISO 14001 and Beyond
At an operational level, each business unit is responsible for managing
its own environmental issues and initiatives. ISO 14001, the recognised
international environmental management standard, has been widely
implemented throughout our businesses. In this, our operations have
accomplished several regional firsts: The Singapore Mint was the
first mint in Asia to be ISO 14001 certified, and SembCorp Marine
(SembMarine)’s Sembawang Shipyard was the first shipyard in
Southeast Asia to be ISO 14001 certified. We intend to increase
our use of ISO 14001 through 2005 and beyond.
(Please refer to the list of our business units certified to ISO
14001 on page 114.)
ISO 14001 is, however, only one of the methods we use. Our business
units have implemented their own approaches, often specific to their
industry, to optimise EHS performance.
One example is the adoption of the Det Norske Veritas’ International
Safety Rating System (ISRS) by Sembawang Shipyard. ISRS is an internationally
recognised, systematic method of managing loss control. In 2004,
we achieved a rating of nine, out of a possible ten, thanks to continual
improvement of our operations since our first audit in 1993.
As a sampler of other measures used by the Group’s operating
units, further key management approaches adopted by Sembawang Shipyard
include a Behaviour-based Safety Program (BbS), a Safety, Health
and Environment Code of Conduct backed by fines for violations by
workers and contractors, and as a full-time EHS Officer and daily
EHS meetings for every ship under repair. In addition, the shipyard
employs a red card/ yellow card system for EHS violations, regular
environmental audits and formal procedures to control and improve
Business Units Certified
ST Architects and Engineers
SembEnviro Tay Paper
Targets, incentives, and indicators
Quantitative performance targets and monitoring of results have
been integrated into our management
systems to further drive improvement. For example, SembCorp Logistics’
(SembLog) subsidiaries ST-Airport Services and Singapore Offshore
Petroleum Services have set very clear environment, health, and
safety goals. These are translated into Key Performance Indicators
(KPIs) and targets for the number of accidents, injuries, spillages,
and even “near miss” incidents.
To further drive our staff’s commitment, some business units
have sought to link the performance review of employees to the results
of environment-related indicators. SembCorp Engineers and Constructors
(SembE&C), for example, adopts a balance scorecard system, which
assesses environment, health and safety metrics, to track and evaluate
the performance of senior managers.
Making the environment our business
SembCorp Industries’ environmental business lines
SembCorp Industries views environmental management issues as opportunities
for business, not just as risks to be managed. In total, the Group’s
revenue from environmental activities exceeded S$360 million in
2004. More than 3,600 people are employed by our environmental businesses.
These figures make the
SembCorp one of the largest environmental service providers in Asia.
Over the last five years, we have made strategic investments in
a number of environmental businesses.
We now build wastewater treatment facilities, collect and treat
solid waste, provide environmental consultancy, and recycle a wide
range of waste materials. These businesses directly benefit the
local and global environment, conserve resources, and enhance public
health where we operate.
A prominent example of this in Singapore was SembE&C’s
construction of the new extension treatment works for an Immersed
Microfiltration Membrane Plant for the Public Utilities Board. The
273,000m3/ day plant, one of the word’s largest, recovers
water that would otherwise have gone to waste under the Singapore
government’s plans for a sustainable water supply (NEWater
Environment-related investments in 2004
SembCorp Industries continued to grow its environmental businesses
throughout 2004, including:
A S$9 million investment in India’s leading
medical waste management company, including upgrading facilities
and extending modern medical waste management to more hospitals;
A S$17 million investment for the development and long term
operation of a 12,500m3/ day wastewater treatment facility in
the Nanjing Chemical Industrial Park, China;
A S$34 million contract for the design and construction of
three 6,000m3 egg-shaped anaerobic sludge digesters for Jurong
Sewage Treatment Works, Singapore.
Our commitment to the environment dovetails with our confidence
in the strong growth potential of the environmental management industry
in Asia, particularly as environmental awareness grows in the region.
Enhancing partnerships and products
SembCorp Industries has worked steadily over the last 10 years to
internally refine, contain and manage the environmental impact of
our core business operations. Moving beyond this, we have now begun
working more closely with suppliers and customers to put in place
good practice, and in parallel have begun evaluating how our core
products and services can be made more environmentally sound.
Working with our business partners for
environmentally safe processes
Sembawang Shipyard’s “contractor of the month”
award is an innovative example of how we encourage our contractors
to better the safety of their processes and work environments. The
EHS performance of the contractor is the main criteria for selection
for the award, and half of the cash prize of S$10,000 must be used
by the contractor to purchase personal protective equipment for
Meanwhile, ST-Airport Services gives preference to suppliers with
ISO 14001 certification, while SembE&C will, from 2005, require
its core suppliers to have ISO 14001.
We have also been working more closely with major customers. For
instance, at Sembawang Shipyard, our alliance partners and major
customers audit us regularly for our environmental practices and
performance, while teams working on repair projects for Shell and
BP are given a cash bonus if they achieve the EHS KPIs set for the
projects. At ST-Airport Services, a similar innovative scheme has
been set up with a client, whereby both parties contribute to a
bonus fund that is awarded to ST-Airport Services only if the KPIs
Environmental Business Lines
Countries of operation
SembCorp Environmental Management
Operation of waste collection, recovery, and sorting systems,
medical waste incineration, paper recycling construction waste
recovery, waste to energy, biological waste treatment
Singapore, Australia, China, India, Malaysia
SembCorp Engineers and Constructors – Environmental
Design and construction of wastewater collection and treatment
systems, building of waste management facilities
SembCorp Utilities –
Treatment of hazardous industrial waste, treatment and recycling
of industrial wastewater
SembCorp Marine –
Recycling of copper slag from shipyard grit-blasting
Making our products and services more environmentally
The Total Environmental Quality Score System adopted by SembE&C
illustrates how environmental considerations can be integrated into
building design. More than 50 environmental criteria are applied
to each building project at the design stage. If the project does
not achieve a minimum score (currently 73 out of 100), it is sent
back for review and re-design.
Similarly, SembUtilities has been progressively converting to more
environmentally sound fuels. Our 815 megawatt cogeneration power
station on Jurong Island completed in year 2001, which concurrently
produces both electricity and steam, made us the first licensed
power generating company in Singapore to produce 100% of electricity
from clean-burning natural gas. Likewise, we began converting SUT
Sakra’s industrial boilers from heavy fuel oil to natural
gas in 2004. The steam and power we supply to customers in Singapore
will thus be sourced entirely from a fuel that generates substantially
less air emissions and no waste, compared to other fossil fuels.
Environmental and corporate citizenship means taking real steps
and making substantial investments to improve performance year after
year. The following sections profile SembCorp Industries’
significant initiatives for 2004.
Energy and Clean Air
In 2004, SembUtilities’ 133 megawatt Wilton Power Station
at Teeside in the UK, began generating power from tallow, a form
of renewable energy. We also commissioned a new 42 megawatt gas-fired
turbine at the facility, which uses the latest “Dry Low NOx”
technology. These initiatives have substantially reduced air pollutants
and offset the fossil fuels that would otherwise have been used.
Meanwhile, our steam distribution operations on Jurong Island, Singapore,
are working to strengthen efficiency though a number of innovative
technical modifications, which are expected to curb energy loss
by a further 50%. This will lead to less initial fuel being needed
to supply customers with the steam they require.
For our logistics and transport related operations, we have sought
to reduce vehicle fuel use and related air pollution through good
route planning. This has been especially significant for SembLog
as transportation is an integral aspect of supply chain management.
Meanwhile, SembCorp Environmental Management’s (SembEnviro)
new Command, Control, Communications, and Intelligence Center (C3i),
coupled with Global Positioning System (GPS) devices fitted to all
our trucks, enables real time tracking, better route planning, and
better fuel efficiency for our fleet of more than 300 waste collection
In 2004, SembMarine introduced an innovative Dust Buster system
at Jurong Shipyard, a technology that reduces flying dust generated
by ship hull grit-blasting by 90 per cent. Likewise, at Sembawang
Shipyard, blasting screens were installed at its KG VI dock as additional
measures to prevent and control dust generated by grit blasting
activities, while two air-monitoring stations were also installed
in the shipyard.
Between 1999 and 2004, the efforts of The Singapore Mint’s
Energy Conservation Committee reduced energy usage by 10 per cent,
even as total production from the Mint increased by approximately
As part of the company’s environmental and community outreach
efforts, Sembawang Shipyard launched the Green Wave Environmental
Care Project for schools in December 2002. This annual competition,
targeted at the young and open to all students in Singapore, was
jointly sponsored by Sembawang Shipyard’s alliance partners,
oil majors Shell and BP.
The Green Wave initiative’s main objective is to inculcate
in students a sense of personal and collective responsibility for
their own environment, and, in the process, develop creative and
innovative ideas in the area of environment care and protection.
Through developing innovative environmental protection ideas and
programs, student participants are rewarded with attractive cash
prizes. In 2004, more than 120 entries were received, with 21 awards
totalling S$32,000 presented to the winning teams from Primary to
Tertiary levels. The long term plan is to introduce Green Wave to
students in other ASEAN countries.
Meanwhile, throughout 2004, SembEnviro has been consistently educating
the public about recycling through measures including promotional
videos, pamphlets, and talks at schools. In addition, our colourful
recycling stations (“Toria Stations”) were a staple
at the 2004 National Day celebrations and the inaugural Recycling
Day on November 21, 2004.
2004 also saw the launch of SembEnviro’s Learning Portal.
By providing training in proper waste management and cleaning practices,
the Learning Portal aims to raise standards of public health and
at the same time help low-wage workers upgrade their skills.
JPL Industries, a unit of SembMarine, recycles some 300,000 tonnes
of copper blasting slag every year that would otherwise have to
be disposed. This conserves natural resources and helps extend the
life of Singapore’s only landfill.
Sembawang Shipyard has developed an extensive waste segregation
and recycling program, centered on an on-site Recycling Compound.
Our strict segregation practices make both environmental and economic
sense. During 2004, the shipyard recovered more than 10,000 tonnes
of scrap, generating revenues of more than S$3 million.
SembLog has standardised packaging and storage materials, and introduced
durable plastic storage containers, to allow repeated use and reduce
bulky waste. Packaging crates and pallets returned by our customers
are also reused and recycled for overseas shipments, thus reducing
the number of crates required.
SembEnviro provides recycling services to more than 500,000 households
in Singapore. In addition, it continued to develop innovative waste
management technologies in 2004. In addition to the Singmatic system,
a pneumatic refuse collection system that reduces manual handling
of waste, odour, and land requirements associated with waste transfer,
it also introduced a unique split refuse chute system that allows
convenient collection of recyclables from high rise dwellings, thus
promoting higher participation and recycling rates.
Meanwhile, The Singapore Mint channels old coins for cleaning, so
that these can be recycled back into re-circulation.
This year, the SembCorp Group and its staff rallied to respond to
the humanitarian crisis left in the wake of the Asian tsunamis of
December 2004. Our timely response demonstrated the compassionate
side of our organisation, both in big ways as well as small ones.
(Please see page 118 for a detailed account of the efforts on the
part of our Group).
Meanwhile, over the course of the year, the Group maintained its
active commitment to the Community Chest’s SHARE program,
an initiative to encourage voluntary contributions from employees,
the funds from which are used to support more than 50 welfare organizations
and more than 240,000 disadvantaged individuals. We introduce SHARE
to our employees when they join us, and several of our business
units provide matching contributions. For example, Sembawang Shipyard
gives approximately S$60,000 to SHARE every year.
SembMarine further contributes to the community through the School
Books Assistance Grant (SchoolBAG), giving some S$152,000 to 742
needy students under the SchoolBAG scheme.
Key CSR Effort: The SembCorp
Group Responds to the Asian Tidal Wave Disaster
The SembCorp Group joined hands with our employees to contribute
to the relief effort following the tsunamis that devastated
parts of Asia on December 26, 2004. We raised close to S$700,000
in cash for the victims of the tsunamis, primarily through contributions
by our companies and staff, as well as through our efforts to
coordinate donations amongst our business partners
Our businesses also used their own unique assets to aid the
relief efforts. SembEnviro, for example, mobilised more than
100 recycling workers to collect more than 13 tonnes of clothing
and food from around Singapore.
Meanwhile, SembLog immediately provided a range of logistical
support to the effort and offered two of our warehouses for
the sorting and storage of food, clothing, and other items.
SembMarine provided 78 Indian-national employees affected by
the tsunamis with free return air tickets to India and S$300
each in cash, as immediate aid to help them and their families
through the crisis.
Meanwhile, SembEnviro continued to sponsor the education of four
young adults from Gracehaven, an association that temporarily houses
troubled youths. SembEnviro also actively supported the White Ribbon
campaign to prevent violence against women through the preparation
of more than 30,000 ribbons, and mobilising more than 260 workers
to distribute information packs to households in Singapore. In addition,
more than S$20,000 was donated to the Jamiyah Children’s Home
from the sponsorship proceeds of the promotional 2004 SembEnviro
In Vietnam and Indonesia, where SembCorp Parks Management (SembParks)
operates its industrial parks, a total of 31 projects were organised
for the local community in 2004. Activities included scholarship
funds to the various educational institutions, contributions to
religious organizations during festive periods, provision of gift
packages to the needy families and donations to build homes for
the poor. In addition, the industrial parks in Indonesia also provided
medical and dental aid to its neighbouring community.
Back in Singapore, the Woodlands Wellington Football Club continues
to receive more than S$300,000 per year from main sponsors SembCorp
Power and Gas, subsidiaries of SembUtilities. Our contribution supports
the local sports fraternity and the grooming of budding football
talent, through sponsorship of players’ training and coverage
of the club’s operating costs.
In 2004, SembUtilities laid the groundwork for an advanced new membrane
based treatment facility that will recover more than 50% of the
wastewater we process at our facility on Jurong Island. The recovered
water will be used for a range of industrial applications, instead
of being discharged to the sea, thus reducing the use of fresh water.
Construction of this facility will commence in 2005.
Likewise, two SembLog centers collected rainwater for non-potable
use, while seawater is used to cool the air conditioning system
at one of our logistics centers. Meanwhile, SembE&C actively
tracked key performance indicators as a means to reduce water use.
For example, the company’s pre-cast department must not exceed
1 m3 of water per m3 of pre-cast, while the defense department must
not exceed 700 m3 of water per million dollars in sales.
To address the potential for water pollution from fuel oil spillages,
SembLog subsidiaries ST-Airport Services and Singapore Offshore
Petroleum Services have put in place stringent procedures and monitoring
systems. These include interceptor tanks which filter oil and grease
from effluent discharges, as well as storing drummed products within
bunds or using spill containment pallets. ST-Airport Services also
commissioned advanced fuel storage facilities in 2004 that significantly
reduce the potential for a spill. Thanks to efforts such as these,
we have not recorded a single spillage since we began tracking this
metric in year 2000.
Health and Safety
At Sembawang Shipyard, our innovative BbS program (see p122) has
focused on personal responsibility for safety and fostered a positive
mindset to make the work environment safer for all. Our target is
a safer environment for the people and the protection of valued
Sembawang Shipyard’s Loss Control Teams have also developed
numerous innovative approaches to improve health and safety around
our shipyard. For example, in 2004 an innovative tool was designed
and patented, which enables cables to be stripped without risk of
finger injury. During the trial period for this tool - Cable Strip-T-Ease™
- occurrences of injury from stripping cables were reduced to virtually
zero. The tool was successfully patented in 2004.
Among other health and safety initiatives in 2004, SembUtilities
introduced several new chemical transfer systems that eliminated
the need for manual handling of hazardous materials. We were pleased
to be given a Merit Award by the Ministry of Manpower, during the
inaugural Occupational Health Best Practice Awards on 19 October
Meanwhile, SembE&C has strived to be the benchmark for health
and safety excellence in the local construction industry. Our Frequency-Severity
Index (a measure of health and safety performance at worksites)
has remained below the Singapore national average over the last
four years. We also have two internal awards to reward good safety
behaviour, as well as an annual Occupational Health and Safety seminar.
The 2004 seminar held on 15 October, included talks by Singapore
Ministry of Manpower officials, invited guest speakers and a keynote
address by SembE&C President and CEO Wong Heang Fine entitled
“Towards a positive safety culture”.
In July 2004, Batamindo Industrial Park (BIP) officially launched
its road safety campaign for the year, working in close cooperation
with the Batam Traffic Police, Land Transport Authority, BIP tenants
and the community in and around the park. The campaign educated
road users to abide by traffic regulations and resulted in improved
traffic performance which continued throughout 2004. Monetary awards
were presented to 21 drivers with exemplary records, while more
than 220 vehicles were summoned for traffic offences for the period
between July to August 2004. OUR PERFORMANCE
During 2004, we took some important steps down the road towards
corporate social responsibility and achieved a number of milestones
and awards. At the same time, we began tracking our environmental
and community performance quantitatively at a number of our business
units. Relevant scorecards are presented below.
Performance Scorecard 1 – Key Performance Indicators
For a diversified Group like ours, adopting KPIs that represent
the full range of environmental and social issues is challenging.
We have therefore chosen to provide one Group-wide KPI - charitable
giving - coupled with a specific KPIs for each of our five main
1: SembCorp Industries – Charitable Giving and Community
The SembCorp Group benefits from the support of the broader
communities in which we operate. We in turn are committed to
assisting our communities, in particular through our charitable
giving program. Last year, the Group donated S$1.1 million to
charity. Through these donations, we actively support many charities,
philanthropic efforts, educational events, welfare groups, and
underprivileged people. We are proud to make a difference in
the lives of people in Singapore and around the world.
KPI 2: SembCorp Utilities
–Carbon Dioxide (CO2) Gas Emissions
SembUtilities has switched to using cleaner fuels such as natural
gas to reduce the negative impact of burning fossil fuels, and
has put in place treatment systems to ensure compliance with
government regulations. However, carbon dioxide from our worldwide
power generation activities is one of the major remaining emissions
and hence is one of our KPIs. As noted, we have achieved good
reduction in CO2 emissions per million dollar sales over the
last few years, and our total worldwide emissions have remained
virtually constant, despite the acquisition in 2003 of our utilities
terminal and power plant in Teesside, UK.
1 SembCorp Group’s worldwide charitable giving
2 Includes donations by SembCorp Industries’ majority
1 SembUtilities’ worldwide operations
2 Only CO2 emitted from the combustion of fuel ( i.e. natural
gas, diesel and fuel oil) for power
and steam generation is taken into consideration
SembCorp Marine Engineering /Sembawang Shipyard – Accident
Safety has always been a key priority of SembMarine’s
shipyards. Our EHS management system at Sembawang Shipyard has
been in place since the 1970’s, and in 2002 we introduced
a new BbS system to bring our performance to the next level.
We are profiling the Accident Frequency Rate as the KPI for
Sembawang Shipyard. As shown in the graph, improvement has been
KPI 4: SembCorp Logistics/
ST-Airport Services – Fuel Spillages
ST-Airport Services’ core business includes the transport,
storage, and transfer of large quantities of aviation fuel.
Product spillage can cause water pollution and ground contamination,
increase fire risk and result in other negative impacts. ST-Airport
Services has put stringent systems, procedures, and monitoring
programs in place to prevent spills. We have profiled spillages
as the KPI for this operation. We are proud to have achieved
our target of zero spills every year since monitoring started
KPI 5: SembCorp
Environmental Management –
Vehicle Accident Rate With a fleet of 300 large vehicles on the road 365
days a year, road safety is of paramount importance for SembEnviro.
We have been monitoring our Vehicle Accident Rate KPI closely,
and have put in place a number of initiatives to reduce the
potential for accidents. Our efforts to improve road safety
led to a huge 68% drop in accident cases between 2002 and 2004,
resulting in an accident-to-km-traveled ratio of 0.78 accidents
to every 100,000 km traveled in 2004, well within our target
of less than 1 accident per 100,000 km traveled.
KPI 6: SembCorp Engineers
and Constructors –
Water Consumption Water is used in many of SembE&C’s operations,
and is one of Singapore’s most precious resources, thus
water consumption has been chosen as a KPI. Reducing water consumption
has been an integral part of our environmental management system
for many years. SembE&C has done well over the last five
years in reducing water consumption per million dollars of sales,
and continues to be committed to reducing the amount of water
utilised in our construction activities and processes.
1 Singapore operations only
1 Singapore operations only
SembCorp Group CSR
Milestones for 2004
stripper patented by
SembCorp Industries conferred Commendation at ACCA
Singapore Environmental Reporting Awards
SembEnviro launches first road safety campaign
SembUtilities given Merit Award at inaugural MOM Occupational
Health Best Practice Awards
Sembawang Shipyard awarded Level 9 ISRS rating
SembE&C awarded two Construction Excellence Awards by
SembE&C awarded 11 safety performance awards by MOM
SembMarine Green Wave Program Award Ceremony
BIP awarded ISO14001
SembEnviro Medical recognized as an “Essential firm
during national emergencies” by NEA
SembUtilities’ Wilton Power Station, UK, granted approval
to burn tallow
SembEnviro participates in Singapore’s inaugural Recycling
Day and Clean & Green Week
Launch of SembEnviro
Launch of Command, Control, Communications,
and Intelligence centre
sponsors ACCA Thought
Leadership Seminar on “Responsibility in Business:
Sustainability or Profitability?”