In soliciting best practice buy-in from our project partners, suppliers and contractors we acknowledge the difficulties in engendering the mindset of sustainability that we, ourselves, are still in the process of evolving. Where we can constructively engage this stakeholder group we undertake consultation and dialogue through a variety of programmes and informal meetings.
Partnering ĦE Our Partnering Programme is about building mutual advantage based upon responsible social and environmental principles in the planning and delivery of our projects. By seeking better efficiencies and working methodologies from project contractors and suppliers, we can achieve eco-efficiencies in the work process and bring to the table value and social benefit that delivers on our corporate promises.
Partnering is collaboration between ourselves and our contractors/suppliers through which we conduct on-site training, share information, build trust and engender the culture of continuous improvement. Now in its sixth year of operation, partnering has consistently proven itself an effective tool in achieving more with the same resources and delivering on time and within budget. In 2005, the Disneyland Resort Line and completion of works on the existing rail network were accomplished with minimal disruptions and within a framework of best of practice to demonstrate the partnering strategy at its most effective.
Contractor safety ĦE Safety ranks amongst the highest of risk factors in our rail business and therefore demands stringent standards and monitoring processes for our contractors and their on-site operations. We set our own targets based on the business risk management strategy as well as structure contractual obligations that demand more than compliance to local regulations. Site safety is monitored on a regular basis through inspections, contractor meetings and timely accident reporting and follow-up procedures. In reporting this year, despite the record of no fatalities for 2005, in January 2006, regrettably, for the first time in five years, one contractor fatality occurred on the NP360 cable car. Even with best efforts and systems in place, on-site accidents are an inherent hazard of construction which serves as a strong reminder to site and personal safety management awareness.
We take a hands-on role in safety for those properties developed by our joint venture partners. The master Control Document details expected safety best practices. We employ a site manager seconded from our Operations Division to work with our partners on a daily basis and appoint an independent health and safety engineer to ensure safety is properly practised and to the standards stipulated. In 2005, three convictions for safety breaches were incurred on our several joint venture property development sites.
One fatality occurred on a property partner's development site. Although we do not have the controlling management of such sites, an enquiry was launched on our part to investigate the cause of the fatality with a report and the consequent recommendations for improvement in safety training for workers conducting similar tasks and the review of the method statement for such tasks. Overall, the 2005 reportable accident frequency rate per 100,000 man hours worked was 0.62 on these partnered development sites.
Engaging property interests ĦE Our relationship with development stakeholders in our property business is an active dialogue at all stages of planning and development. In planning projects, we reflect the aspirations of modern community living by incorporating design, materials, the natural environment and other factors that deliver a quality product that will increase in value over time. In developing a project, we influence the process through contractual obligations and the Control Document which specify standards and site
work practices.
The ARCH, a residential tower block developed as a joint venture, describes our engagement process in practice and illustrates the property 'through train' strategy in action. Confined within an existing built community which restricted spatial planning, the ARCH incorporates innovative design that preserves natural views and introduces a sky garden to allow for green spaces in high-rise living. In delivering this project, strict observance to noise and air pollution regulations were imposed to minimise inconvenience to the communities in proximity to the site and the building design, materials standards and infrastructure systems were included in the master plan to ensure long-term eco-efficiency of the building. Management systems are in place to sort waste, improve energy usage in individual units and, maintain the safety and a quality environment
for residents.
Ethics ĦE Of significant advancement to our progress in best practice for 2005 is the inclusion of the CSR Guideline as a driver to our procurement policy and supply chain management. Initiatives are underway to encourage suppliers and contractors to adopt, as far as practicable, the Corporation's own standards for labour, social and environmental stewardship and ethics as expressed in the Code of Conduct. In 2005, initial action was taken through a seminar inviting 20 of our major suppliers and contractors to field their understanding and commitment to general CSR principles. While most have a basic appreciation of the benefits of CSR practices and allocate manpower to them, a low percentage have any detailed planning or structures in place to implement them. We see this as an opportunity to engage in a strategic plan to develop procurement and supply policy management that enables all parties to access a CSR model and employ best practice for themselves. In our tendering process, as an example, we request a wage schedule for all contracted and sub-contracted staff employed. Those bids not adequately fulfilling wage specifications and minimum wage levels are barred from the bidding process. We also seek to lead by example. In 2005, we paid all contractors according to terms.
As a further step, the Procurement and Contracts Department now includes a social qualification in supplier briefings and the Social Questionnaire issued in all pre-qualification exercises is being updated to reflect the CSR Guideline and the Hong Kong CSR Charter. The Code of Conduct which governs our internal policy and employee behaviour when conducting business is also available and encouraged to be used by our contractors and suppliers as a model for their
own practice.
Another major step in best practice is the introduction of procurement as an area of benchmarking under the CoMET programme. The Corporation hosted the second CoMET group workshop in late 2005 on this agenda augmented by site visits to mainland Chinese railway suppliers. The aim of the exercise was to compare the different procurement practices and systems adopted by various metros worldwide and, to compare the effectiveness of procurement operations and the cost of purchases using several commodities as examples. Further group meetings are planned in 2006 to continue the industry's education with a view towards possible formalised standards in this area of practice.
