Presented by Edward L. Quevedo Pillsbury Madison & Sutro LLP Environment & Land Use Group

1. Upgrading (and Sustaining) The EMS: Driving Continuous Improvement, Worker Safety, Sustainability, and Other Key Attributes into the System -The Case of Western Digital Corp. Presented by Edward L. Quevedo Pillsbury Madison & Sutro LLP Environment & Land Use Group

2. Overview of Session • EHSMS Principles • EHSMS Design Concepts • Eco-Efficiency - the Master Metric • The Hidden Attributes of the EHSMS • The WDC EHSMS Vision and Mission • The WDC Implementation Path • EHSMS Design Consequences • Lessons Learned and the Road Forward

3. EHSMS Principles • Decision Theory and Integration of the OSH Management System with the EMS • Choices among OSH Management System Models • BSi 8800 • AIHA OSH Management System Guidelines • OSHA VPP Star • Design with the Future in Mind - Do we seek Sustainability or other Future Goals?

4. OSH Management System Models • OSHA VPP • integrates well with NIOSH standards • simple framework • AIHA OSH Management Systems Guidelines • incorporates JHA model • robust framework - minimal design decisions • BSi 8800 • aligns with ISO 14001 • provides HSE guidance • state of the art model - maximum design flexibility

5. EHSMS Principles - 2 • Practical Integration Issues • Workforce sophistication • Existing management structure • Delegation (not assignment) of responsibility • Implementation Scheduling • Registrar management • Maintenance of the EHSMS

6. EHSMS Design Concepts • An EHSMS will deliver precisely what it is designedto deliver - nothing more, nothing less • Design must be active and begin at project inception - a direct analogy to product design • The E(HS)MS as a Product • Must meet customer expectation • Must be marketed • Must be delivered on time and on budget • The real value is in the use, not the delivery • The product must be stewarded throughout its lifecycle

7. EHSMS Design Concepts - 2 • Customer Design Issues • Marketing Issues • Delivery Issues • Eco-Efficiency and the EMS • E(HS)MS Stewardship • The Principle of Sustainability

8. Eco-Efficiency - The Master Metric • Existing Terms of Limited Value • Compliance • EH&S “Performance” • “Strategic” EH&S Management • The New Lodestar - Eco-Efficiency • Each dollar spent and each person hour invested must be justified as simultaneously aiding both the business and either Human Health and Safety or the Environment • Activities which do not pass the test should be subject to question, and to regulatory innovation discussions with Regulatory Partners

9. The Hidden Attributes of the EHSMS • Leadership • Industry/Corporate/Site/Community • Education • Workforce/Customers/Suppliers/Community • Trust • Installing Wiring for Stakeholder Input • Organizational Reinvention • Fundamental Business Need • EHSMS is a reinvention engine (in the programme) • Sustainability • Retuning the EHSMS to Dial in the SMS

10. The WDC EHSMS Vision and Mission • WDC EH&S Vision • WDC will be among the global industry leaders in the EH&S performance of our products, processes, and business practices. We will partner with our suppliers, customers, and the communities in which we operate to maximize protection of personal health and the environment • WDC EH&S Mission • Minimize EH&S risks and impacts while optimizing operational efficiency through commitments to P2, legal compliance, and continuous improvement

11. The WDC EHSMS Vision and Mission - 2 • Vision Document • Aligns with Policy Statement • Gives clear direction for management review • Articulates clear basis for programme • Mission Document • Aligns with Objectives • Provides grounding for executive and employee performance reviews • Integrates into MDs’ business plans

12. The WDC Implementation Path • Initial Review - follows EMAS model for maximum impact in design and manufacturing phases • Modeling of QMS - to optimize integration and improve QMS through the implementation process • Learning Organization Model - to utilize each education session as an opportunity for continuous improvement

13. Challenges size of site manufacturing process MD management style - “hands-off” history of program implementation position in manufacturing cycle (media facility) Opportunities/Solutions expand EHS criteria redesign opportunities inclusion of more middle managers monthly milestones - gain interest/buy-in include core business metric in EHSMS objective set WDC ImplementationSanta Clara, California

14. Challenges number/literacy of workers complexity/variety of processes number/variety of functions personality of EMR growth of site Opportunities/Solutions MD loyalty and leadership/expanded training increase in metrics, not criteria allow aspects and ranking to involve more input, time EHSMS becomes planning tool WDC ImplementationKuala Lumpur, Malaysia

15. EHSMS Design Consequences • Intervention with Financial Partners • Intervention with Regulators • Commitment to Continuous Off-Line, Non-Production Education of Employees + Key Alliance Partners (the Learning Organization expands)

16. EHSMS Design Consequences - 2 • Share (Internally and Externally) Innovations and Successes of Divisions or Sites to Inspire Others • Taking and Sharing Credit • Hard wiring EH&S Quality Performance to Performance Reviews and Compensation • Top-down model • Tap Creativity of WorkForce, Solicit Participation to Inspire Creativity, and Reward Creativity When Displayed • Cultural and Financial Challenge - requires “plowing back”

17. Stabilizing the EHSMS • Continuously Learn and Synthesize New Learning • Changing the Audit Protocol and Approach • Stage I - Protocol Has Mentoring and Training Effect - “Is there a Policy Statement?” • Stage II - Protocol is a Re-Design Engine - “Is The Policy Adequate? Can/Should we improve it based on business conditions/environmental conditions/market conditions/community issues or concerns?” • Stage II EHSMS Programs • Regulatory Reinvention • Life Cycle Inventory • Supplier Management • Community Outreach/Environmental Reporting • Migrating Toward Sustainability

18. Lessons Learned and the Road Forward • Efficiency in Design - align objectives with metrics to show quick returns • Accuracy in Design - requires mapping of the manufacturing process • Innovation in Design - the value of the Learning Organization Model • Eco-efficiency - the opportunities for regulatory reform • Challenges - regulatory reform and supplier management

19. Discussion: Future Challenges • Entry of Competition • Revisions to ISO 14001/14004 • New Technologies • New Geographies • Others??

20. Edward L. QuevedoPillsbury Madison & Sutro LLPEnvironment & Land Use Group San Francisco: 415.983.1125 Silicon Valley: 650.233.4766 ___________________ quevedo_el@pillsburylaw.com http://pillsburylaw.com ___________________  San Francisco  Sacramento  Silicon Valley  Los Angeles  Orange County  Carmel Valley  San Diego   New York City  Northern Virginia  Washington, D.C  Tokyo