Safety - from Board Room to Site and Back

1. Safety - from Board Room to Site and Back Triennial ConferenceCIB W099 Implementation of Safety and Health on Construction Sites Presented by Derek Smyth ©2002 Gammon Skanska Limited. All Rights Reserved 9 May 2002

2. Safetyis a KEY strategic business issue

3. Brand ValuesHow our brand values deliver the ultimate goal • Customer-centric • consensus builders • responsive • trustworthy • Resource-rich • design, build, plant • Asian experts • Skanska • Quality • product • service • social responsibility • Risk-managers • environmentally committed • safety compliant • forward thinking • respectful, team players • Innovative • learning organisation • technology enabled

4. Why is Safety such a significant business issue? • The human factor remains paramount and is a focus of our social responsibility • Direct and indirect “Cost” of accidents can be crippling to the business

5. Safety • Safety issues facing the construction industry • Board room - measure, monitor, manage • Gammon Skanska experience • Results achieved • Future plans

6. SafetyGlobal Work-related Deaths One million deaths / year 3,000 /day 2 / minute

7. SafetyHong Kong Construction Industry 29 deathsin 2000 1 death every 10 working days

8. No of Accidents > 3 days 1,000 workers IR = Incident Rate Progress1999 to 2001

9. Cost of Accidents Direct • Medical costs • Compensation • Sick Leave • Damage to plant and equipment • Clean up and repair costs • wastage/repairs • suspension or removal from lists Indirect • legal costs • increases in future insurance premiums • suspension of work • cost of senior management investigation • loss of image and reputation • loss of morale and productivity

10. In the Board Room • Leadership and commitment- we must “Walk the Talk” on safety • Put safety NUMBER 1 on the Agenda • Measure, monitor and manage

11. Missionto provide a workplace that is without accident or incident.

12. Balanced Scorecard Customers and Markets Financial 50% 15% Internal Business Process People & Future Growth • Zero fatalities • Further improve safety incidence rate • Reduction in Safety Regulation Breaches • Reduction in Environmental Regulation Breaches 20% 15%

13. Integrated Management System Finance International Production & Supply Services Commercial Civil Engineering New Businesses Human Resources Insurance Corporate Marketing & Communication Group Solicitor & Company Secretary PFI / PPP / Modular Construction Plant & Equipment Fabrication Management Fabrication Ready Mix Concrete Underground Engineering Safety, Environment, Quality & Design Interior Businesses Gammon Skanska - Managing Safety Gammon Skanska Asia Board Gammon Skanska Asia Executive Committee Safety & Environment Action Committee Hong Kong Sector Group Services Sector International and New Business Sector Corporate Building Engineering SE Asia Foundations Engineering Thailand Underground & Specialist Construction China USA/European

14. Safety & Environment Action Committee (SEAC) Members • Director (HS&E) - Chairman • Representatives from the Senior Management of Operatioins • Representative from the Group Quality Department • Group HS&E Manager • Chief HS&E Engineer • Project HS&E Manager Objectives • Meet monthly • Set policy • Address key areas • Report to Executives

15. Task Groups Gammon Skanska- Managing Safety

16. Eight Primary Targets • No fatal accident • Continuous improvement in Accident incident Rate (IR). • Continuous reduction in breach of Statutory Safety Requirements (including Part I Non-compliance listed on Labour Department Inspection Reports) • Continuous reduction in Environmental Protection Department Offences

17. Eight Primary Targets • Continuous reduction in legislative offences covering Food & Hygiene, Fire Services and Police/Traffic Offences • An elimination of dangerous occurrences (as defined in First Schedule of the F&IU Regulations). • An elimination of Utility Damage. • No Labour Department Suspension notices.

18. League Table

19. League Table

20. Staff Bonus Scheme • Eligible Staff • On the basis of a team approach and that all site staff must play a role in Safety and Environment all those site staff below Construction Manager are eligible. • Bonus • The amount of HK$1,500 for a consecutive 3 month period, ie effectively HK$500/month if all award criteria are achieved for a 3 month period. • Daily paid worker • All daily paid received HK$1,500 safety bonus for a consecutive 6 months accident free period.

21. Gammon Skanska Experiences The right start! • Develop close working partnerships (Client, Consultants, Sub-contractors, EPD) • Promote open dialogue • Agree on overall objectives and safety requirements at the outset • Maximising the amount of prefab and dry fix systems • Safety education • Minimising multi-tiered sub-sub-contracting • Shared safety objectives with subcontractors

22. Safety Measures carried out at Chater House Increased cost of safety measures HK$6M

23. Implementation • Operates a “Safety Working Cycle System” with daily safety meetings

24. Training • Must be stimulating • Must involve all site staff • Gammon Skanska approved training provider • Develop practical solutions

25. Implementation • Use proprietary self-climbing perimeter safety screens to increase protection at the high-level working floors

26. Implementation • Use proprietary material handling platforms with extension facility for deliveries to and from typical floors

27. Implementation • Use of safety barriers throughout high-level work-place

28. Implementation • Make available toilet facility and fire hose reels on every floor

29. Must not use cultural argument to compromise on safety

32. Group Target 2002: IR < 19.0

34. Accident / Incident Results 2001/2 • Improvement in IR and all 8 primary target areas But • Improvement becoming more difficult to make - need to work smarter and harder • Need tighter regional controls

35. In the pipeline • OHSAS 18001 • Innovative building • Worker Injury Risk Management • Health issues • Training Schools

36. Safety Management Systemsand ISO 18001 • Integrated or not integrated • 18001, 14001 and ISO 9001:2000- how to make user (site) friendly • Argument to make Quality the umbrella? - many of these are company policy decisions with important operational impacts

37. Innovative Building Techniques • Better quality of life for all • Driven by social responsibility INTEGER

38. Modular Construction • much safer construction techniques • up to 75% less construction waste • up to 40% less vehicular traffic • up to 60% less noise and dust • high quality apartments • faster construction times by up to 15%

39. Post Injury Risk ManagementImpact of Poor Injury Management Cost Aspect Premiums! HK$40 million to $110 million or no insurance! Or very high excess. Human Aspect Isolation and anxiety - not contact Low self esteem Physical de-conditioning Depression Litigation Ownership of injury management now with the Company

40. Gammon Skanska Doctors • Familiar with Gammon Skanska • Immediate treatment where appropriate • Follow up with hospital Dr if hospitalisation occurs • Assist in RTW programmes • Medical review • Medical advice

41. The Process is never ending • The Board Room must recognize both the human and business issues • The Board Room must set in place systems to measure, monitor and manage • All employees must “Walk the Talk” • Sites and management must review and continuously improvement through innovation at all levels of the business. • Board Room to then monitor review and react.

42. Missionto provide a workplace that is without accident or incident.

43. Thank You