1 group environmental standards The Leighton Group is a leading international contractor. We aim to be renowned for excellence, delivering through our operating brands and the empowerment of our people. Leighton Holdings Limited ABN
2 Leighton HOLDINGS group environmental standards 2 Table of Contents Message from the CEO 3 Introduction 4 About the Environmental Standards 5 The Intent of the Group Environmental Standards 6 Governance of the Standards 7 Definitions Table 7 Standard 1 Leadership and Accountability 8 Standard 2 Planning, Objectives and Targets 9 Standard 3 Legal and Other Requirements 10 Standard 4 Risk Management 11 Standard 5 Sustainable Use of Resources 12 Standard 6 Training and Awareness 13 Standard 7 Communication and Engagement 14 Standard 8 Suppliers, Contractors and Partnerships 15 Standard 9 Incident Management 16 Standard 10 Monitoring, Measurement and Reporting 17 Standard 11 Inspections, Audit and Review 18
3 3 Respect for the Environment a Group Priority Message from the CEO Respecting the environment where we operate, and in which our people work and our communities live is paramount. Environmental impacts have the potential to threaten or enhance the prosperity and wellbeing of our people and communities locally, regionally and globally alike. For this reason, respect for the environment features prominently in our Code of Business Conduct. Our Group Environmental Policy and Standards demonstrate our continued leadership and commitment in this area. As a leading international contractor we are committed to delivering our projects, services and all our business activities in a manner that both respects the environment and contributes to the sustainability of our business. We need to work together in a comprehensive and systematic manner to achieve our environmental objectives. Environmental management has always been and will continue to be a key priority for Leighton Holdings and for me personally. I look forward to the Group s continued improvement in this area as we strive to achieve excellent environmental performance. Hamish Tyrwhitt CEO, Leighton Holdings
4 LEIGHTON HOLDINGS GROUP ENVIRONMENTAL STANDARDS 4 Introduction The Leighton Group s approach to respecting the environment begins with its Group Environmental Policy which is consistent with its core values of discipline, integrity, safety and success. The Group Environmental Policy establishes the Group s key environmental objective to prevent Level 1 environmental incidents while systematically improving the Group s environmental performance and resource efficiency through effective risk management. To support the achievement of the Group s key environmental objective, the Policy introduces the Group Environmental Standards which set the direction for the progressive development and implementation of more specific and detailed environmental management system objectives and requirements. Each Group Operating Company maintains their own management system and accordingly has their own Policy and Standards (or equivalent) which is consistent with the Group Environmental Policy and Standards. Leighton Holdings Board Values Leighton Holdings limited Leighton Holdings Environmental Framework Policy Standards Ethics and Compliance Committee Reporting provides Leighton Holdings Limited (LHL) with basis for evaluation of Group Operating Company compliance with the Framework Operating Company STATUTORY Boards Group Operating Companies Values Policy Standards Environmental Management Systems Local Operating Procedures Internal performance review analysis and change Internal and External Audit
5 5 About the Environmental Standards The Group Environmental Management Standards set the expectations for our commitment to respecting the environment, proactively managing environmental risks and continually improving environmental performance. These Group Environmental Management Standards comprise of eleven standards that have been arranged in a Plan, Do, Check and Improve cycle as illustrated below. Plan standard 2 Planning, Objectives and Targets standard 3 Legal and Other Requirements standard 4 Risk Management standard 5 Sustainable Use of Resources Improve standard 1 Leadership and Accountability* Check Group Environmental Management Standards Do standard 6 TRAINING AND AWARENESS standard 7 COMMUNICATION AND ENGAGEMENT standard 8 Suppliers, Contractors and Partnerships standard 9 INCIDENT MANAGEMENT standard 10 Monitoring, measurement and Reporting standard 11 Inspection, Audit and Review * This is a cyclical process and although Plan standards launch the cycle, Leadership and Accountability becomes the primary standard on subsequent cycles and assumes the Standard 1 position.
6 Leighton HOLDINGS group environmental standards 6 The Intent of the Group Environmental Standards These Group Environmental Standards specify the minimum requirements for environmental management to achieve our key environmental objective. Each standard includes a clearly expressed intent which Operating Companies are required to incorporate into their governance and management systems. Standard 1 Leadership and Accountability 2 Planning, Objectives and Targets 3 Legal and Other Requirements Intent To clearly define roles, responsibilities and lines of accountability for directors and employees and demonstrate leadership and commitment to managing the environment. To drive continual improvement in environmental performance with consideration of strategic and operational specific risk profiles. To identify and facilitate compliance with all environmental legal, regulatory, contractual and other requirements for all business activities in a transparent and accessible manner. 4 Risk Management To ensure effective environmental risk management by identifying, assessing and reporting threats and opportunities, and implementing, maintaining and communicating effective controls. Any change is identified and managed through an effective change management process. 5 Sustainable Use of Resources To support the sustainable use of resources by identifying and facilitating the implementation of opportunities to avoid, reduce, reuse, recycle and replace. 6 TRAINING AND AWARENESS To provide employees, contractors and other stakeholders with the necessary skills and awareness to understand and perform their environmental management responsibilities. 7 COMMUNICATION AND ENGAGEMENT 8 Suppliers, Contractors and Partnerships To provide for effective and timely communication with all relevant stakeholders To provide for the assessment and management of suppliers, contractors and partnerships (clients, joint ventures, alliances, acquisitions and investments) to ensure they align with the Group Environmental Policy and Standards. 9 INCIDENT MANAGEMENT To ensure all environmental incidents are reported, investigated, appropriate corrective actions taken and lessons shared to prevent a similar reoccurrence. 10 Monitoring, Measurement and Reporting 11 Inspection, Audit and Review To provide for the efficient monitoring, measurement and reporting of environmental information and performance To ensure environmental performance and systems are inspected, audited and reviewed to assess compliance with legal and other requirements and drive continual improvement
7 7 Governance of the Standards The Leighton Holdings governing body for environmental management is the Leighton Holdings Board operating through the Leighton Holdings Ethics and Compliance Committee which is supported by the Leighton Holdings Executive Leadership team. Leighton Holdings provides leadership by setting the Leighton Group s key environmental objective and management expectations. Leighton Holdings will periodically monitor and review (at least annually) the Group Environmental Policy and Standards together with other related components of the Group s governance system to ensure they remain relevant to the Group s risk profile and effective in addressing the needs of the Group s key stakeholders. In updating the Environmental Policy and Standards, Leighton Holdings will communicate progress with relevant stakeholders. Leighton Holdings Board and Executive Leadership Team will gain assurance about the environmental practices of Group Operating Companies through regular reporting and auditing processes that assess whether Group Operating Companies are meeting the requirements of the Group Environmental Policy and Standards. Group Operating Companies will manage their compliance with, and assurance of, meeting the requirements of the Group Environmental Policy and Standards. Group Operating Company statutory boards, with the support of their senior management teams, will develop and maintain policies and standards (or equivalent) which are consistent with the Group Environmental Policy and Standards but reflective of their unique business operating environments. Board Ethics and Compliance Committee Leighton Holdings Executive Leadership Team Statutory Boards Senior Management Group Operating Companies
8 Leighton HOLDINGS group environmental standards 8 Standard 1 Leadership and Accountability a establish expectations To clearly define roles, responsibilities and lines of accountability for directors and employees and demonstrate leadership and commitment to managing the environment. d continue improvement Leadership and Accountability b demonstrate expectations c implement accountability a. a Directors, executives and managers (as appropriate) shall set and communicate clear environmental management expectations for their businesses by: developing, maintaining and communicating clearly the environmental policy and standards (or equivalent) for their businesses that are consistent with the Group Environmental Policy and Standards; exercising sound and thorough due diligence in business decisions and when resolving competing interests between environmental objectives and other business objectives to ensure business decisions and outcomes are well informed and risk is managed appropriately; defining, documenting and communicating roles, responsibilities and accountabilities for environmental management for all employees; setting measurable and achievable objectives and targets that are consistent with Group Environmental Policy and Standards and have consideration of Operating Company specific risk profiles; allocating adequate resources to achieve these objectives and targets; promoting the environmental practices in the business development for increased product and service demands; and holding people accountable for their actions and carrying out their responsibilities. b) b Directors, executives and managers shall demonstrate visible leadership through personal example, by promoting initiatives and by participating in environmental meetings, audits, inspections and observations during site visits as appropriate. c) c Directors, executives and managers shall implement an accountability process. This may include: setting targets and managing individual and business performance against appropriate environmental performance indicators; measuring and monitoring individual and business environmental performance; evaluating performances against objectives and targets; acknowledging and rewarding good environmental performance and behaviour; and providing coaching and mentoring particularly where performance is less than acceptable or issues are identified. d) d Directors, executives and managers shall facilitate continual improvement in environmental management. They do this by: identifying inadequate performance and driving improvements; identifying the gaps with analysis for integration into planning and designing of services and business; celebrating achievements; supporting environmental outcome focused research and development initiatives; and supporting internal and external environmental networks.
9 9 standard 2 Planning, Objectives and Targets To drive continual improvement in environmental performance with consideration of strategic and operational specific risk profiles. e track, report and review objectives and targets a set objectives and targets Planning, Objectives and Targets b ensure objectives and targets are SMART d allocate resources to achieve objectives and targets c incorporate objectives and targets into business plans a) a Setting of environmental objectives and targets shall form an integral part of business planning. b) b Objectives and targets should be Specific, Measurable, Attainable, Relevant and Time bound (SMART), taking into consideration: specific risk profiles, businesses plans and strategic direction; anticipated changes to internal and external operating environments; and historical environmental performance. c) c Objectives and targets set by Leighton Holdings shall be incorporated in the Leighton Holdings and Operating Company business plans. d) d Adequate resources shall be allocated to achieve the objectives and targets. e) e Objectives and targets shall be tracked, reported and periodically reviewed to determine continued suitability and adequacy.
10 Leighton HOLDINGS group environmental standards 10 standard 3 Legal and Other Requirements a maintain ISO certification To identify and facilitate compliance with all environmental legal, regulatory, contractual and other requirements for all business activities in a transparent and accessible manner. f maintain documentation Legal and Other Requirements b c identify and assess requirements e monitor and incorporate changes d incorporate into management system a) a Group Operating Companies shall maintain third party certification(s) to ISO 14001: Environmental Management System for all operations. b) b Identify all applicable compliance requirements, such as Acts, regulations, standards, codes, licenses and contracts relevant to specific levels and operations of the business. c) c Where local compliance requirements are not adequate to meet the Group or Operating Companies specific policies and standards, then the Group or Operating Companies policies and standards shall be adopted, taking account of local legal, social and cultural conditions. d) d Compliance requirements shall be incorporated into management systems at the appropriate level of the business. e) e Any change to the applicable compliance requirements should be identified, communicated and implemented. f) f Systems and processes shall be put in place to ensure relevant documents and records are identified, established, securely stored, maintained, controlled and available to the user.
11 11 standard 4 Risk Management To ensure effective environmental risk management by identifying, assessing and reporting threats and opportunities, and implementing, maintaining and communicating effective controls. Any change is identified and managed through an effective change management process. h appropriately communicate with stakeholders g monitor and review risk management practices a establish the scope and context Risk Management d e f develop controls and check effectiveness b c implement identification processes and conduct assesments a. a Environmental risk management shall apply to all levels of the organisation and to all three areas of risk management; Financial, Strategic and Operational. The scope and context of the risk analysis shall be defined and conducted consistent with the Group Risk Management Standard by competent personnel. b) b Threat and opportunity identification and reporting procedures shall be developed and implemented. c) c Appropriately detailed environmental risk assessments shall be conducted where there is potential for environmental impacts to occur as a result of our products, services or activities. d) d Risk controls shall be developed and checked for their effectiveness. When changes to products, services or activities occur, corresponding risk assessments and controls shall be reviewed as appropriate. e) e Environmental threats that cannot be eliminated must be reduced to as low as reasonably practicable in accordance with the hierarchy of controls prior to the commencement of the particular activity. Any residual environmental risk must be confirmed as tolerable and accepted by persons with the authority to do so. f) f Opportunities to enhance environmental outcomes should be proactively sought. g) g Risk management practices shall be monitored and reviewed with the level of effort and oversight commensurate to the assessed risk. h) h Risk management shall consider the needs of our stakeholders and be communicated accordingly.
12 Leighton HOLDINGS group environmental standards 12 standard 5 Sustainable Use of Resources a establish a baseline To support the sustainable use of resources by identifying and facilitating the implementation of opportunities to avoid, reduce, reuse, recycle and replace. d document and share outcomes Sustainable Use of Resources b seek opportunities c implement viable opportunities a. a An understanding of resource use (including energy, water and waste) and associated costs shall be established. b) b Systems and processes should be implemented to identify, investigate and evaluate potential opportunities for the sustainable use of resources that are technically viable and cost-effective. c) c For tenders that require Leighton Holdings CEO approval (as specified within the Group Work Procurement Standard), Operating Companies shall conduct a workshop that includes a multi-disciplinary team to identify and assess initiatives for the sustainable use of resources. Workshop outcomes shall be reported to Leighton Holdings. d) d Operating Company projects shall identify, document and consider opportunities for the sustainable use of resources throughout the project lifecycle and outcomes shall be communicated appropriately.
13 13 standard 6 Training and Awareness a b identify and prepare targeted programs To provide employees, contractors and other stakeholders with the necessary skills and awareness to understand and perform their environmental management responsibilities. e monitor and assess Training and Awareness c deliver programs as planned d maintain appropriate records a) a New employees shall be trained and educated in their roles and responsibilities for the Group s commitment to respecting the environment. b) b Environmental training needs shall be identified and training and awareness programs prepared with consideration of appropriate timing, including the following: prior to commencement of activities in the workplace, when changes occur to risk profiles, roles or procedures. c) c Training and awareness programs shall be delivered: in accordance with planned schedules, by competent personnel, and with methods which cater for any cultural and language requirements. d) d Appropriate records of training shall be maintained. e) e The effectiveness and appropriateness of training and awareness programs shall be assessed on a regular basis by ensuring personnel comply with all environmental requirements.
14 Leighton HOLDINGS group environmental standards 14 standard 7 Communication and Engagement To provide for effective and timely communication with all relevant stakeholders. a identify stakeholders and their needs Communication and Engagement c implement and maintain open lines of communication b plan, document and review engagement with stakeholders a) a Identify all stakeholders who are affected by the Group s activities, products and services that impact the community and environment. b) b Communication and engagement with identified stakeholders shall be planned, documented and periodically reviewed for all aspects of the business and when material changes occur to activities, products and services. c) c Clear and effective lines of communication shall be established and maintained which: enable enquiries, concerns, and complaints from stakeholders to be received, documented and responded to in a timely and appropriate manner; consider any legal, cultural and language requirements; and promote the sharing of information and best practice.
15 15 standard 8 Suppliers, Contractors and Partnerships a b c identify, assess and address risks in the supply chain and business acquisitions risks To provide for the assessment and management of suppliers, contractors and partnerships (clients, joint ventures, alliances, acquisitions and investments) to ensure they align with the Group Environmental Policy and Standards. f g implement and maintain controls for contract delivery Suppliers, Contractors and Partnerships d e manage formation of contracts and acquisitions accordingly a) a Systems and processes shall be implemented and maintained for the identification, assessment and management of environmental risk in the supply chain that may stem from (but not be limited to): environmental management performance; market based environmental pricing mechanisms (i.e. carbon pricing); availability and access to natural resources (both physical and regulatory driven); inclement weather events; and natural disasters. b) b Management decisions and procurement practices shall seek opportunities for environmentally sustainable options in the purchase and use (including storage and end use) of inputs such as energy, materials, plant and equipment. c) c Where business partnerships are sought, they shall be assessed for current or potential compatibility with the Group s Environmental Policy and Standards based on products, activities, services and previous performance. d) d Where business partnerships are formed, formal agreements shall be established which: specify the environmental expectations and requirements for disclosure of information, risks, incidents, and learnings; and defines the accountability for any external relationships. e) e A change management process for acquisitions shall be implemented to ensure alignment with the Group s Environmental Policy and Standards. f) f Systems and processes shall be implemented and maintained for the environmental management of contractors, suppliers and partnerships. g) g Appropriate records of the environmental performance of contractors, suppliers and partners shall be maintained.
16 Leighton HOLDINGS group environmental standards 16 standard 9 Incident Management g a processes to identify and respond to incidents To ensure all environmental incidents are reported, investigated, appropriate corrective actions taken and lessons shared to prevent a similar reoccurrence. d e f investigate and communicate appropriately Incident Management b manage and record incidents c report all incidents a) a Systems, processes and resources shall be implemented and maintained to identify and respond to actual and potential environmental incidents, including crises and emergencies. b) b In the event of an actual or potential incident, the incident shall be managed by competent personnel and recorded, classified and reported appropriately. c) c All incidents shall be reported quarterly to the Leighton Holdings Ethics and Compliance Committee in accordance with the Group Environment Reporting Standard. Level 1 incidents shall be promptly (i.e. within 24 hours) reported to the Leighton Holdings Chief Executive Officer by the Operating Company s Managing Director. d) d A systematic process shall be implemented and maintained for the investigation of actual and potential incidents as appropriate. e) e All actual and potential Level 1 incidents shall be investigated with the aim of preventing recurrence through the elimination of the cause, or where this is not possible, implementation of the highest possible controls as a corrective action. f) f All lessons learnt shall be documented and communicated accordingly. For actual and potential Level 1 incidents lessons learnt shall be shared at the Ethics and Compliance Committee meeting and the Environmental Working Group Forum. g) g During planning for environmental emergencies and crises, response plans shall align with the Emergency and Crisis Management procedures.
17 17 standard 10 Monitoring, Measurement and Reporting a develop and implement systems and processes To provide for the efficient monitoring, measurement and reporting of environmental information and performance. d consider documentation, verification and approval requirements Monitoring, Measurement and Reporting b consider the frequency and appropriateness of monitoring c consider environmental reporting requirements a) a Systems and processes shall be developed and implemented for monitoring, measuring, reporting and verification of environmental information. b) b The design and frequency of environmental monitoring programs shall be appropriate to the level of risk and controls. c) c Environmental reporting requirements (including those specified in the Environment Reporting Standard) shall be identified and documented. d) d Records of reports, underlying data, calculations and assumptions shall be maintained and subject to verification and approval.
18 Leighton HOLDINGS group environmental standards 18 standard 11 Inspections, Audit and Review To ensure environmental performance and systems are inspected, audited and reviewed to assess compliance with legal and other requirements and drive continual improvement. a plan and document an assurance framework Inspections, Audit and Review e implement and document improvements b c d conduct assurance program as planned a) a Inspections, audits and reviews shall be planned and documented to assess compliance with the Group Environmental Policy and Standards and other requirements. b) b Inspections shall be undertaken by competent personnel, in accordance with plans and schedules and as appropriate to the level of risk and controls. c) c Environmental management system audits shall be undertaken by competent and independent personnel and occur: as identified through performance monitoring and previous audits; as appropriate to the level of risk and controls; when material changes to internal or external operating environments are identified; and/or as determined by legal and other requirements. d) d Management reviews of Group Operating Company environmental management systems shall be conducted by senior management at least annually. e) e Corrective, preventative and improvement actions from inspections, audits and reviews shall be implemented as approved and appropriate records retained.
19 19 Our key environmental objective is to prevent Level 1 environmental incidents while systematically improving the Group s environmental performance and resource efficiency through effective risk and opportunity management. Hamish Tyrwhitt CEO, Leighton Holdings For more information contact: David Andreallo Environmental Project Engineer T E
20 DISCIPLINE INTEGRITY SAFETY SUCCESS Leighton Holdings Limited ACN ABN Pacific Highway St Leonards NSW 2065, Australia PO Box 1002 Crows Nest NSW 1585, Australia T F Review date: June 2013 Approved by: Mike Rollo Version: 1