2011 samsung engineering sr eng1
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Creative engineering Solution Provider
2011SamSung engineering SuStainability RepoRt
CONTENTS CEO MessageCorporate GovernanceApproach to Sustainability
Business for sustainaBility Growth Strategy Core CompetenceProject Highlight Shaybah NGL Project S-Oil Onsan Refinery Expansion Project Suji Respia
Commitment to sustainaBilityEthics & ComplianceEnvironment, Health & SafetyEmployees & WorkplaceSupply ChainLocal Community
PerformanCe summary Economic, Environmental and Social PerformanceGRI Index
aPPenDiX
02
10
22
60
71About this RepoRt
This report is Samsung Engineering’s first sustainability report. It was written to present Samsung Engineering’s commitment to enhancing economic, environmental and social value and achievements comprehensively in accordance with the Global Reporting Initiative (GRI) G3.1 guidelines.
Reporting period | This report covers Samsung Engineering’s performance and activities from January through December 2011, and if necessary to provide time-series trends, the data of the two most recent fiscal years (from January 2010 through December 2011) were utilized. As for some issues of significance, relevant data reported until April 2012 is included in this report.
Reporting boundary and scope | We aim to report all aspects of Samsung Engineering’s domestic and overseas business areas (including project sites) in principle, but in cases where data collection was not possible, the specific scope of the data was stated. We set a principle of not including subsidiaries and suppliers within our reporting boundaries, while some of their activities are reported with additional statements. The reporting boundaries and scope were based on recommendations of the GRI guidelines.
To ensure the objectivity and transparency of the content, we commissioned a third party without vested interests in the company to verify the accounts herein (Independent Assurance Statement p.76 - p.77). Samsung Engineering will continue to publish the Sustainability Report to share our sustainability management activities and performance as well as future goals with our stakeholders.
We are a force with no boundaries, rising above client expectations while creating a visionary future
Creative Engineering Solution Provider
[Vision 2020] USD 40 billion in revenue & USD 50 billion in order
Continuous ChallengeGlobal CitizenshipCreative Convergence
Creating and pursuing future value for clients through engineering excellence
sLoGAN
VisioN
CoRe VALue
MissioN
Business areas Key fiGures• hydrocarbon
• Non-hydrocarbon
Refinery
power
Gas
Metallurgy
petrochemicals
industrial Facility
hydrocarbon upstream
Water treatment
New Orders (KRW billion)
10,117 9,03211,789
2009 2010 2011
4,035 5,312
9,298
2009 2010 2011
Revenue (KRW billion) Order Backlogs (KRW billion)
13,95517,151
20,385
2009 2010 2011
Hydrocarbon Non-Hydrocarbon
· CDU/VDU · Heavy Oil Upgrading· Aromatics, HDS
· Gas Processing· LNG (Liquefaction, Terminal)
· Ethylene· EO/EG· Fine Chemicals
· Offshore Platforms· FPSO (FLNG)
· PDH· Polymers· Fertilizers
· Pipeline· GOSP
· Thermal (Coal-IGCC, Oil/Gas Fired)
· Steel Mills· Non-Ferrous Plants (Aluminum, Copper, Nickel)
· IT Facilities · Industrial Manufacturing Facilities· Pharmaceutical
· Sewage Treatment· Wastewater Treatment
· Desalination· Ultra-Pure Reuse· O&M
01
euroPe
03
asia
04
ameriCas
02
miDDle east/nortH afriCa
head office (Seoul, Korea)
Samsung Engineering has achieved outstanding performance records globally for petrochemical, refinery, gas and other hydrocarbon plant projects. Moreover, we are seeing tangible results in providing services for industrial and environmental projects as well as power plant, metallurgy and other new business opportunities. We are involved in several projects of various scales around the globe spanning from the Middle East, Asia, and Americas to Europe.
Business area & MAjOR TRACK RECORD
asia
iNDiA• IOC_FCC/DHDT Plant, LAB Plant, EG Plant• IPCL_C2/C3 Plant, LLDPE/HDPE Plant• IISCO_Steel Plant• ONGC_OPal DFCU/AU Plant MALAYsiA• PCSB_Sabah Oil & Gas Termical Project
thAiLAND• TTM_GSP-1 Plant• PTT_GSP-5 Plant, GSP-6 Plant, ESP Plant• TOC_EO/EG Plant• MOC_Cracker Plant
VietNAM• INTEL_A9 T9 ATM Plant• PMPC_PVC Plant• PETROVIETNAM_Fertilizer Plant and CO2 Recovery Plant
ChiNA• HANKOOK TIRE_PCR/TBR Plant• SAMSUNG ELECTRONICS_LCD Module Line• SAMSUNG SDI_Tianjin LED Plant, Tianjin Battery Cell Line• AIR LIQUIDE_HYCO Plant• SAMSUNG ELECTRON-MECHANICS_ MLCC Line
KoReA• SAMSUNG MOBILE DISPLAY_SMD A2 Project• KR_Seoul Maintenance Workshop Phase II Project• YONGIN CITY_Sewage Treatment Plants BTO Project• SEOUL CITY_2002 Korea-Japan World Cup Main Stadium
ameriCas
MeXiCo• PEMEX_Salamanca Refinery Plant, Tula Refinery Plant,
Minatitlan Refinery Plant• POSCO_CGL Utility Plant• CFE_Manzanillo LNG Terminal Project, Norte II Power Plant tRiNiDAD & tobAGo• PETROTRIN_CCR Refinery Plant, Ultra Low Sulphur Diesel Unit,
T&T ULSD
usA• SASL_SAS CU Ultrapure Water System• Dow-Mitsui Chlor-Alkali LLC_Dow Chlorine Manufacturing
Facility (Falcon)
euroPe
huNGARY• HANKOOK TIRE_PCR/TBR Plant• SAMSUNG SDI_PDP No. 4 Module Plant
sLoVAKiA• SAMSUNG ELECTRONICS_LCD Module Line• HANSOL_LCD Parts Plant
miDDle east / nortH afriCa
uAe• BOROUGE_2 OCU Plant• HCSEZ_ICAD IWT Plant• FERTIL_2 AMMONIA/Urea Project• TAKREER_RRE Package #3 Offsites & Utilites Project• ADNOC_Shah Gas Development Package #4 U & O Project• ADNOC & Borealis J/V Borouge_3 PO (Polyolefin) Plant Borouge_3 LDPE Plant
bAhRAiN• BAPCO_Lube Base Oil Plant• SULB_Steel Mill Project• MOW_Muharraq Sewage Treatment Plant
ALGeRiA• SONATRACH_Skikda Refinery Plant
sAuDi ARAbiA• SABIC_Gas ASU Plant• SAMCO_Acrylic Acid Plant• SPC_PDH/PP Plant• APPC_PDH/PP Plant• TASNEE_Ethylene Plant• SHARK_EG Plant• IBN ZAHR_PP Plant, OCT Plant• MA'ADEN_ Ammonia Plant, Aluminum Complex• KAYAN_PP Plant, Amines Plant• SAUDI ARAMCO_DHT Plant• SATORP_Jubail Export Refinery Package #3 and #4 Plant• SAUDI ARAMCO_Shaybah NGL (Natural Gas Liquid) Project
Wasit Cogen. Project• SAUDI ARAMCO_CO2 Capture & Injection Plant• SOCC_SOCC. Aluminum Alkyls Project
Founded
Countries
Workforce
197030
7,620(As of the end of 2011)
“ Our sustainability is founded on the basis of transparency, respect for the people and environment and the growth of our partners. For us, it is our way of creating value for stakeholders.”
Dear Valued stakeholders:
Samsung Engineering is a total engineering solution provider that generates
future value for clients through plant construction. Our service encompasses
feasibility studies, project financing, engineering, procurement, construction,
commissioning, and operation & maintenance, and we are making rapid
inroads into the global market. We boast outstanding capabilities to manage
the risks of cost, quality, and project scheduling as well as an extensive track
record and superb workforce. We have maintained an average annual growth of
more than 30%, breaking our records for new orders and sales every year since
2005. Currently we are engaged in projects in more than 30 countries, and our
workforce hails from 34 different nations.
Amidst a changing global market environment, Samsung Engineering faces
numerous new risks as well as opportunities. While we must address the work
safety issues, we must also respond to growing public interest in environmental
and ecological matters. At the same time, overseas projects represent an ever-
greater share of our business portfolio, requiring us to bolster our ties with local
communities around the world, and the scope of our responsibilities toward our
business partners continues to grow. Samsung Engineering will preemptively
address issues that arise in the global business environment.
innovating and Growing as a Global top-tier
In 2011, Samsung Engineering achieved a record KRW 11.8 trillion in new orders
and KRW 9.3 trillion in sales. We broke into the Iraqi and Qatari markets and are
expanding our business into Central Asia, starting with Uzbekistan. We won the
package deal, four units in one complex, for the Shaybah Natural Gas Liquid
Project from Saudi Aramco, the Saudi Arabian state-run oil company. Meanwhile,
we broke into the field of hydrocarbon upstream plant in 2010 by winning
our first order for the GOSP (Gas Oil Separation Plant), and we bolstered our
involvement in this area by winning a series of additional orders for these plants.
For non-hydrocarbon plants, Samsung Engineering has received a steady stream
of orders for facilities for power generation, metal processing, industrial uses
and water treatment in Latin America, namely Mexico and Trinidad & Tobago as
well as in the Middle East. Our perennial strength has been in petrochemicals,
and we are now leveraging that strength to deepen our involvement in LNG
processing, offshore platforms and other upstream areas, staying in step with
the increasing demand for energy over the long term. We will also lay the
groundwork for sustainable growth by diversifying into a multi-core business
portfolio that encompasses power, metallurgy, and industrial plants. Furthermore,
we will strengthen our position as a global engineering company which grows
with clients by responding to changes preemptively through systematic risk
management, stronger human resources development and upgraded business
operation.
Growing with transparency and Responsibility
Samsung Engineering will pay closer attention to stakeholders and fulfill all
corporate social responsibilities. We are operating an ongoing compliance which
is the integrated and regular system for legal risk management. This program
includes a compliance support system and training our employees on ethics and
legal compliance. In the process, we will cultivate an organizational culture in
which every employee voluntarily complies with all related rules and regulations.
Also, we will constantly monitor major legal risks and implement a fair trade system
based on a corporate culture that stresses clean business practices at all times.
Generating shared Value for human and the environment
The leading sources of competitiveness in the engineering industry are individual
skills and the organizational strength to bring those skills together most
effectively. Samsung Engineering practices equitable personnel management
for organizational transparency. We are also encouraging self-motivated learning
and fostering specialization so that our employees can focus on shared goals
while exhibiting their individual skills freely on the global stage. The diversity
of our employees' backgrounds will enable us to establish an organizational
culture that serves as the wellspring for creative and innovative ideas. In addition,
we remain committed to helping address global environmental issues such
as climate change mitigation, bio-diversity protection, and water scarcity
prevention. We are also concerned about raising awareness of future generation
on the environment. Our competencies regarding environmental protection
continue to improve. Samsung Engineering is at the forefront of the market for
carbon dioxide recovery, desulfurization, and water treatment facilities. We are
leveraging our environment-friendly engineering capabilities to reduce energy
consumption, and we practice environment-friendly procurement and supply.
The environmental management at our construction sites is thorough as well.
Growing in tandem with society
As companies grow, so does their effect on society and the environment, which
means ever-greater corporate social responsibilities. Importantly, Samsung
Engineering, a global player, is constantly searching for ways to grow together
with stakeholders, and to improve the value being provided to business partners,
local communities, governments and others. We have created jobs for local
communities and helped local companies to grow. We continue to strengthen
our global sourcing network by strictly engaging in fair trading practices and
win-win partnerships. In 2011, we established SNTV (Samsung Naffora Techno
Valley) in Saudi Arabia as a multi-functional office that contributes to the regional
economy and society. Our business is engineering, and we are expanding CSR
programs that are true to our knowledge-based profession. These include
establishing libraries to help people learn in the countries where we do business,
and offering classes on the environment to children.
Samsung Engineering is committed to improving the transparency of our
operations, and we are ready to listen to you, our stakeholders. I ask for your
continued support and interest.
Sincerely,
President & CEO Ki-seok park
Ceo messaGe
02 03SAMSUNG ENGINEERINGSUSTAINABILITY REPORTCEO MESSAGE
We will protect the rights of shareholders and other stakeholders by building advanced corporate governance and engaging in responsible management.
independence of the BoD and Protection of stakeholder rights
The by-laws of the BOD guarantee outside directors of Samsung Engineering the right to make decisions independently from
the influence of the company, the top management and shareholders. The by-laws are in compliance with legal provisions
regarding the appointment and disqualification of outside directors as described in the Commercial Act of Korea Article 382 (3)
and Article 542-8 (2).
Audit Committee | The Audit Committee is responsible for appointing accounting, performance and external auditors. The
members of the Audit Committee are selected at the general shareholders’ meeting. The list of candidates for the Committee
members is announced publically before the day of a meeting so that shareholders can make an informed decision on
appointing Committee members. The Audit Committee is run by three outside directors to help to ensure the transparency of
Samsung Engineering’s management practices.
Management Committee | The Management Committee deliberates and decides on matters, and reports to the BOD as
authorized by the BOD resolutions, by-laws or operation rules in order to facilitate quick and smooth decision-making on
management issues.
outside Director Recommendation Committee | The role of the Outside Director Recommendation Committee is to help
to ensure that outside directors are able to make decisions without being influenced by the top management or dominant
shareholders. To this end, the Committee, consisting of two inside and three outside directors, nominates outside director
candidates and they are approved and appointed by the resolution of the general shareholders’ meeting. Candidates for
outside directors are selected among those with extensive knowledge and experience in business administration and relevant
technologies, ensuring that the outside directors have expertise in making effective and reasonable decisions regarding all
aspects of the sustainability management. Those who are major shareholders of or in a special relationship with the company,
however, are restricted from being appointed outside directors in order to prevent conflicts of interests in the BOD.
the Composition and roles of the BoD
boD Composition | The Board of Directors (BOD) of Samsung Engineering aims to increase the efficiency and transparency of
management practices, and strengthen the financial soundness of the company. The Samsung Engineering President & CEO
serves concurrently as the chairperson of the board according to the BOD rules. The BOD consists of three inside and four outside
directors. Inside director candidates are recommended by the BOD or shareholders, while outside directors are nominated by the
Outside Director Recommendation Committee.
boD Meetings | The board of directors held eight directors’ meetings in 2011, including those regularly scheduled, with a
100 percent average attendance rate for both outside and inside directors. We assist outside directors in the performance of
their duties in many aspects by ensuring that they have timely access to management information necessary for accurate
understanding of the company’s status. We also provide them with a reasonable level of compensation for expenses incurred
while carrying out their duties.
performance evaluation and Compensation | Compensations for BOD directors and company executives are differentiated
according to the results of regular business target reviews and performance evaluations. The limit of the compensation is annually
approved by resolution at the general shareholders’ meeting. In 2011, KRW 5.95 billion was paid as the remuneration for the BOD,
and the 2012 compensation limit was set at KRW 11 billion.
04 05SAMSUNG ENGINEERINGSUSTAINABILITY REPORT
CorPorate GoVernanCe
• Samsung Engineering BOD members*
Percentage of outside directors in the BOD
No. of BOD meetings held in 2011
Average BOD meeting attendance rate
No. of external positionsassumed by outside directors100%
57%
No more than two
8
2011 Governance Key Figures
Vice President of External Relations, Hannam University
Ji-Jong Chang Outside Director
Professor of Business Administration, Kwangwoon University
sang-hoon Kim Outside Director
Head of Business Support Division
byoung-Mook Kim Inside Director
Professor of Systems Management Engineering, Sungkyunkwan University
Wan-seon shin Outside Director
Head of Outsourcing Management Unit
byung-bok sohn Inside Director
Tax Attorney, Law Firm Kim & Chang
Cheol-Min Kim Outside Director
Ki-seok park BOD Chairman
President & CEO
* The status of the BOD is as of May 2012.
• The Composition and Roles of Committees under the BOD
Function Composition* Directors*
Management Committee
Outside Director Recommendation
Committee
AuditCommittee
Deliberate upon and resolve general matters on
the management of the company
3 outside directors
3 inside directors 4 outside directors
Deliberate and decide on major management issues 3 inside directors
Recommend outside director candidates
2 inside directors 3 outside directors
Cheol-Min Kim, Wan-Seon Shin, Sang-Hoon Kim
Ki-Seok Park, Byung-Bok Sohn, Byoung-Mook Kim
Ki-Seok Park, Byung-Bok Sohn, Cheol-Min Kim, Wan-Seon Shin, Sang-Hoon Kim
Appoint accounting, performance, and external
auditors
boD
* The composition and members of the BOD are as of May 2012.
CORPORATEGOVERNANCE
We are aware of the importance of corporate social responsibility. Samsung Engineering will continue to create shared value with all stakeholders, through sustainability management.
06 07SAMSUNG ENGINEERINGSUSTAINABILITY REPORT
the structure for sustainability management
Approaches to sustainability Management | Our approaches to sustainability management cover the three directions of
responsible growth, respect for people and the environment, and reliable partnership under the CSR slogan of “Leading the
Way, Building the Future.” The directions are further divided into six priority areas (Corporate Governance, Ethics & Compliance,
Environment, Health & Safety, Employees & Workplace, Supply Chain, and Local Community). We will continue to take a
systematic approach to sustainability management. We will pursue transparent and responsible growth, respect human and
the environment, and accompany our partners.
CsR office | Samsung Engineering established the CSR Office in 2011 to take diverse stakeholder opinions into account
when making business management decisions. The CSR Office identifies sustainability management issues, performs relevant
enterprise-level activities in cooperation with business and supporting units, and reports the results to top management. Other
functions of the office include raising employee awareness about sustainability management, and building communication
channels and sharing information with external stakeholders. The establishment of the CSR Office is the first step for making
organizational governance activities more systematic and sustainability management more practical. This represents our efforts
to recognize our genuine social responsibilities and make them happen.
aPProaCH to sustainaBility
• Organizations for sustainability Management
Ceo
CSR Office (under the Financial
Support Division)
• Business Unit: Energy·Hydrocarbon·
Power Business Unit• Risk Management: Project Support Dept., Quality Management Dept.
• Corporate Governance: Business Management Dept., Human Resource Management Dept., Accounting & Tax Dept.
• Ethics & Compliance: Compliance Dept., Legal Dept., Audit Dept.
• Environment, Health & Safety: HSE Dept.
• Employees & Workplace: Human Resource Management Dept.
• Supply Chain: Outsourcing Planning Dept., Construction Planning Dept., Energy·Hydrocarbon·I&I Engineering Support Dept.
• Local Community: Global Operation Support Dept., Human Resource Management Dept., PR/IR Dept.
stakeholder engagement
Classification of stakeholders and priorities | We divide stakeholders into two categories: business and non-business
stakeholders. The clients, employees and suppliers fall into the category of business stakeholders, while non-business stakeholders
include shareholders, investors, local communities near project sites, future generations, non-governmental organizations and
government agencies.
materiality test
Approaches to Materiality test | Samsung Engineering defines materiality as “key expectations from the long-term perspective
held by stakeholders who are directly or indirectly related to Samsung Engineering’s business.” We identified potential issues and
made the issue pool by interviewing employees and considering ISO 26000, OECD Guidelines for Multinational Enterprises and
other global standards as well as issues faced by other entities in the same industry. Then, we surveyed stakeholders to determine
the materiality of such issues. We identified major issues through the engagement of stakeholders and evaluated their materiality
in terms of (1) their business impacts and internal strategic priorities, and (2) the social pressures and the influences of relevant
stakeholders. The AA1000 Stakeholder Engagement Standard was applied to the test method.
• Structures for Sustainability Management
CONCERNED AREAS Supply Chain
Local Community
Ethics & Compliance
Corporate Governance
Environment, Health & Safety
Employees & Workplace
RESPONSIBLE GROWTHRESPECT FOR PEOPLE AND
THE ENVIRONMENT RELIABLE
PARTNERSHIP
“Leading the Way, Building the Future”
Creative Engineering Solution ProviderVISION
DIRECTIONS
CSR SLOGAN
• Materiality Test Process
step 03
Definitions ofSamsung Engineering’s
key issues
step 01 step 02
Global standards
Domestic and overseas business
trends in the industry
Internal interviews
• Identify the pool of issues concerning sustainability management
• The surveyed: employees, clients, suppliers and other stakeholders
• Content: collect opinions from each stakeholder group about relevant issues in terms of the current status of Samsung Engineering and future directions
• Analyze the business impacts and internal strategic priorities
• Analyze the social pressures and the influences of relevant stakeholders
• Determine key issues
▶ Developing the issue pool ▶ surveying stakeholders ▶ selecting key issues
2011 Stakeholder Engagement
Survey
Employees
Clients
Suppliers
Other stakeholders*
APPROACH TO SUSTAINABILITY
• Major Stakeholders of Samsung Engineering and Communication Channels
• IRC (Industrial Relations Council)• Employees satisfaction survey• Intranet• Company newsletter, Campaigns• Regular meetings
• Operation of associations with design companies, vendors and subcontractors in Korea
• Operation of SEGA system for both domestic and overseas vendors
• Operation of GPN system for overseas subcontractors
• FSI (Family Satisfaction Index) surveys• Meetings, training and support
• General shareholders’ meeting• IR activities• Public announcements • Business updates report
busiNess stAKehoLDeR
No
N-busiNess stAKehoLDeR
EmployeesClients
Shareholders
Suppliers
Local Community
• The client portal • Sales and marketing channels of each business unit
• PSI (Plant Satisfaction Index) surveys • HSE satisfaction surveys
• Environmental education program, 'Kumpooh' and 'Eco-generation'
• Environmental campaigns • Development of environmental technology
• Official Website• Press kits• Operation of global offices• Training regional specialists and market investigation
• Social contributions to local communities
Envi
ronm
ent
* Other stakeholders include journalists, analysts, investors, the people from credit-rating agencies, government and NGOs who are familiar with Samsung Engineering as well as its shareholders.
08 09SAMSUNG ENGINEERINGSUSTAINABILITY REPORT
stakeholder engagement survey | We organized the 2011 Samsung Stakeholder Engagement Survey starting from January to
February 2012 in order to identify the expectations of stakeholders. The questionnaires of the survey were developed in 21 areas
to include issues defined by global standards and faced by other companies in the industry. The survey was conducted on the
four groups of stakeholders (employees, clients, suppliers and other stakeholders). We consulted each stakeholder group to obtain
their opinions about the current status of Samsung Engineering and future development directions with regard to sustainability
management.
Key issues Defined by samsung engineering | We identified the level of stakeholder interests in key issues and evaluated their
influences to our businesses through the stakeholder survey. The findings served as the basis for creating the materiality matrix.
The materiality test identified upholding ethical practices and securing compliance, health & safety, talent development, and
contributions to local economies as the issues of significance.
[Health & Safety]Do you think that the company is providing employees and project participants with proper field safety and health programs?
Yes
No
I don’t know
64.7%11.9%
23.4%
[Human Resource Management]What do you think are the priorities to strengthen the competencies of human resources?
Strengthened education and training opportunities Practical performance evaluation Improved employee welfareHigher salaries and incentives Employment of experienced employees
27.2%
40.3%
5.4%
16.9%
10.2%
[Local Community] In which areas do you think the company should make more efforts for local communities with our business footprint?
Social contributions through local employment and purchases Investment in infrastructure and education opportunities in local communities Expanded welfare and benefits for local employeesCloser relationship with local stakeholders Project-based social contributions
[Win-Win Cooperation] What aspects of support and cooperation do you think are needed to build the long-term structure for mutually beneficial relationships with suppliers?
Cooperative system for engaging in sales activities and winning new orders Financial incentivesSystem for closer communication Support for HR development and trainingTechnological cooperation
38.5%
4.1%
23.0%
18.9%
15.5%
39.7%
8.4%
22.1%
17.3%
12.6%
• Key Findings of the Stakeholder Engagement Survey
[The Level of Sustainability Management] How would you describe Samsung Engineering’s current sustainability management level?
Very low
Relatively low
Moderate
Relatively high
Very high 12.0%
44.0%
36.0%
8.0%
0.0%
[Climate Change Response]How do you think the company should respond to climate change issues that have emerged as global concerns?
The company should refrain from taking actions as much as possible
It is sufficient for the company to engage in defensive actions
The company needs to engage in voluntary actions
The company should show leadership preemptively
The company should consider potential business opportunities 38.5%
42.8%
11.2%
7.4%
0.1%
[Environmental issues] What are the areas that you think the company should concentrate more resources on?
Execute projects focused on eco-friendliness Raise the environmental efficiency of design and logistics Strengthen the management of construction sitesDevelop eco-friendlier technologies Show leadership in dealing with macro-level environmental issues
37.1%
28.7%
8.0%9.4%
16.8%
• 2011 Stakeholder Survey
Jan. 9 ~ 23(for about 2 weeks)
Feb. 17~Mar. 2 (for about 2 weeks)
Feb. 6 ~ 20 (for about 2 weeks)
Jan. 11 ~ 25 (for about 2 weeks)
• Domestic: about 6,000 people
• Overseas: about 1,000 people
• Participation rates: 29.7%
• 57 clients (domestic and overseas)
• Participation rates: 29.9%
• Domestic: 430 people
• Overseas: 308 people
• Participation rates: 31.7%
• 282 people (domestic and overseas)
• Participation rates: 29.0%
• Evaluation of the current status and determination of future directions: Awareness, the progress of sustainability management, strategic relevance, and priorities in internal resource allocation
• Common expectations: Ethics & compliance, environment, response to climate change, social contributions, and relationship with local communities
• Health & Safety
• HR development
• Working conditions (discrimination)
• Project execution capabilities
• Project environment management
• Health & Safety
• Fair operations (contract practices)
• Health & Safety
• Win-win cooperation
• Corporate governance
• Future growth potential
Employees Clients Suppliers Non-business stakeholders (external)
Survey period
Surveyed
Common items
Specific items
APPROACH TO SUSTAINABILITY
• The Results of the 2011 Materiality Test
Business impacts and internal strategic priorities
Social pressures and the influences of relevant stakeholders
▶ potential issues
▶ Key issues
• Education for future generations
• Technology transfer
• Inspection of human rights conditions
• Health and safety of local communities
• Upholding ethical practices and securing compliance (p.25)
• Occupational health and safety (p.35)
• HR development (p.39)
• Working conditions and employee welfare (p.42)
• Corruption prevention (p.26)
• Strengthening the global network of suppliers (p.47)
• Laying the groundwork (p.12)
• Project quality and risk management (p.14)
• Contributions to local economies (p.52) – local employment and purchases
• Raising environmental efficiency (p.30)
• Eco-friendlier projects (p.21)
• Responses to macro-environmental issues (p.33) - Climate change, biodiversity, water shortage
• Project-based social contributions (p.56)• Win-win cooperation with suppliers (p.49)
Business forsustainaBility We aim to be an enterprise that grows sustainably through management strategies from the long-term perspective and responsible project execution in the changing market environment.
14Core Competence
• Project management capabilities • Systematic risk management • Constant quality control
16Project Highlight
• Shaybah NGL Project• S-Oil Onsan Refinery Expansion Project
• Suji Respia
12Growth strategy
• Diversify business portfolio • Diversify markets• Upgrade project execution capabilities
• Strengthen human resources
building the Foundation for sustainable Growth by Diversifying business portfolio
To break down the revenue structure, hydrocarbon-
related projects (refinery,gas, and petrochemical
plants) account for 64% of Samsung Engineering’s total
revenues, while power plants, metallurgy, industrial
facilities, water treatment and other non-hydrocarbon-
related areas hold the remaining 36%. The company is
focusing on the diversification of the business portfolio
by advancing into new project areas to have flexible
responsiveness to the recent move toward ever-larger
project size and complexity. We are expanding the
offshore business from the long-term perspective, as
the energy market structure is expected to change
and demand for energy is projected to remain robust.
Meanwhile, we are also providing clients with genuine
added value through exceptional engineering services
that meet the needs and requirements of clients in
the eight project areas of refinery, gas, petrochemicals,
power, metallurgy, water treatment, and industrial facility
plants.
hydrocarbon – Advancing into the offshore plant
segment by Leveraging the World’s top-class
onshore expertise
Refinery∙Gas∙petrochemicals | Samsung Engineering
showed improved capabilities and limitless potential in
the chemical engineering area, to include hydrocarbon
plants, oil refineries and gas processing plants, in
2011. Our unrivaled stature in the hydrocarbon area
was reconfirmed when we won the Shaybah NGL
project from Saudi Aramco, the Saudi Arabia state-
run oil company. In 2012, we are poised to strengthen
our market dominance in these traditional mainstay
segments and to diversify our geographic market
regions by advancing into Iraq and Kuwait as well as
Russia and Indonesia, which play a significant role in the
global energy market.
hydrocarbon upstream | We have continued to build
a solid track record in the upstream hydrocarbon area,
which we entered in 2010. We are further improving our
expertise in Gas Oil Separation Plant (GOSP), winning
orders for the Shaybah NGL project in Saudi Arabia, the
Banyu project in Indonesia, and West Qurna project in Iraq.
We will focus on securing project execution capabilities and human resources that can be compared to those of other global players as well as diversifying business and client portfolios.
Growth strategy
12 13BUSINESS FOR SUSTAINABILITY
SAMSUNG ENGINEERINGSUSTAINABILITY REPORT
FeasibilityStudy
Engineering
Procurement
Construction
Commissioning
Operation & Maintenance
We will build an integrated project portfolio in the hydrocarbon
plant industry by accumulating technological competence in
hydrocarbon upstream projects such as LNG plants or offshore
facilities and expanding the business value chain.
Non-hydrocarbon - promoting Multi-core business by Leveraging
Superior Project Management and Engineering Capabilities
power plants | In the non-hydrocarbon area, we are focusing
our resources on power plant projects as a new growth business.
The market volume of the power plant infrastructure business
is expected to increase by more than $100 billion annually, as
the global economy expands, urbanization and industrialization
progress and the quality of life generally improves. We advanced
into privately-funded power plant projects in Latin America in
2010 when we signed a contract for a combined-cycle gas thermal
power plant in Mexico. The Mexican project was to construct
combined-cycle thermal power plants, where gas turbines are
run to generate electricity in the first stage and the byproducts
(flue gas) are then used as a heat source to run steam turbines in
the second stage. Such a system helps to raise the heat efficiency
and lower greenhouse gases at the same time. We aim to position
ourselves as a major player in the power plant industry as we are in
the hydrocarbon industry by accelerating efforts to advance into
the Middle East and other geographical regions.
Metallurgy∙industrial Facility∙Water treatment | We have
maintained comparative advantages in the water treatment
segment (sewage & wastewater treatment, water purification)
and the steel mills. In 2011, we worked to diversify our non-ferrous
product portfolio and to expand our presence in the desalination
plant segment. The focus of our water treatment unit has been
on the domestic market, but we are about to expand overseas
by leveraging the solid track record achieved domestically. In the
metallurgy segment, we will continue to build on our success in
non-ferrous processing plant projects as we successfully execute the
Aluminum Rolling Mill project in Saudi Arabia. Our industrial facility
unit will strengthen capabilities through constant investment.
expanding our Client base through Market Diversification
The significant changes observed in the EPC market include the
diversification of geographical markets in line with the economic
growth of emerging markets and resource-rich countries. In
the hydrocarbon upstream businesses, an increasing number
of orders for the GOSP (Gas Oil Separation Plant) projects were
placed mainly by clients in Algeria, Libya and other North African
countries in 2011. Meanwhile, the Asian region was assessed to
have great potential for the offshore plant segment. In addition,
we expect shale gas-related business opportunities will surge, as
technologies recently developed in the US make the shale gas-
related business economically viable. As for the petrochemical
plants, where we enjoy comparative advantages, the Latin
American market is growing with great economic growth
potential.
Against this backdrop, we first advanced into Iraq and Qatar
to expand our footprint in the Middle Eastern market. The
national oil company of Qatar became our client for the first
time. Furthermore, we managed to establish a foothold in the
Central Asian market by signing contracts for gas processing and
polymer plant projects in Uzbekistan. We were also awarded
contracts from the US Exxon Mobile and Russian Lukoil which
are global major oil companies. In 2012, we will strengthen our
existing market dominance in the Middle East and advance into
unexplored markets as early as possible. To this end, we will
identify alternative markets or establish more concrete entrance
strategies, analyzing the different features of individual countries
in detail. This will allow us to establish practical and country-
specific roadmaps for advancing into new markets and to
diversify our geographical markets.
Upgrade of Project Execution Capabilities
Project order receipt is not the end but just the starting point.
Carefully managed projects will, upon completion, bring
opportunities to allow us to generate strong profits going
forward and win future contracts. We eliminate factors that may
act as obstacles in billion-dollar projects by managing potential
risks and conducting detailed simulation in terms of schedule,
quality, costs and all other aspects. Moreover, we are committed
to eliminating inefficiencies and optimizing the utilization of
materials and people by organizing seamless cooperation among
design, procurement, construction and other functions.
strengthening human Resource Competence and building an innovation and Creativity focused Corporate Culture
We believe that in the engineering field competitiveness stems
largely from the competencies of individuals as well as from the
ability to bring those skills together. Thus, our goal has been to
ensure all employees are equipped with the capabilities to work
globally, encouraging them to develop themselves and become
experts in their respective areas of responsibility. Moreover, we work
to ensure that the distinctive diversity of our workforce facilitates
the generation of creative and innovative ideas. To this end, we
are building a cooperative working atmosphere through constant
communication and fostering a corporate culture that enables
every employee to accomplish his or her duties regardless of
gender, age, nationality, level of experience and other factors.
• Business Process
14 15SAMSUNG ENGINEERINGSUSTAINABILITY REPORT
Project Management Capabilities
In the engineering field, core competencies depend on
the capabilities to manage projects as well as on expertise
in design, procurement and construction work. We are
committed to building an effective project management
system and applying it to executing projects.
Project Management | We have secured distinctive
competitiveness by running an integrated project
management system that oversees all project processes.
At the initial stages of a project, knowledge-management-
based risk analysis and systematized scheduling methods
are applied to predict project results and manage relevant
risks. Moreover, our global sourcing and supply chain
management systems allow us to respond flexibly to
changes in the international market conditions and
project schedules.
Project Schedule Management | Project completion
ahead of schedule is one of the top priorities for us while
executing a project. We share information about ongoing
projects with our clients and suppliers on a real-time
basis through the Project Portal. The portal system keeps
them informed about the project progress and allows us
to manage the projects efficiently. These efforts towards
maximizing clients' value have earned us a growing
number of new orders.
systematic Risk Management
Almost all of our projects are conducted on a turnkey basis,
where we perform everything from engineering design
and procurement to construction and commissioning. As
such, we are managing risks through a multifaceted risk
management system and processes.
Market Assessment and Analysis | The risk management
processes at the marketing stage include (1) region
selection, (2) preliminary research, (3) primary enterprise-
level report, (4) on-site research, (5) establishment of action
plans and (6) secondary enterprise-level report. We make
checklists based on the result from preliminary and on-
site research and manage them. The Global Marketing
Intelligence System (GMIS) is in operation as an information
sharing platform that contains data on markets, products,
clients, competitors, licensors, proposed recommendations,
and our capabilities as well as the results of major meetings.
We conduct regular Plant Satisfaction Index (PSI) surveys to solve clients' complaints and improve our business processes, and the results are managed as
PSI. The Quality Management department is responsible for surveying the clients of important projects for their satisfaction at each stage of engineering/
procurement, construction and handover. The department identifies and analyzes the major problems of a project and shares them with the person in charge
of the project.
Its integrated research and data retrieval functions guarantee us to
share the information easily.
proposal Risk Management | We follow preset processes when
submitting a project proposal to a client. Before finalizing a price
offer, we review the observance of the proposal procedures,
and the appropriateness of project schedule, exchange rates,
contract terms and price estimates through a checklist.
Project Risk Management | Once a project begins, we first hold
a workshop to identify potential risks that may emerge during
the project execution. Then we analyze and assess those risks by
using a systemic risk-mapping method, and perform various risk
management strategies to maintain, reduce, transfer or avoid risks.
Continuous Quality Control
Quality Management system | Samsung Engineering’s quality
management system was designed to meet all requirements of
ISO 9001:2008/KS Q ISO 9001:2009. All of our organizations and
employees clearly grasp the system and quality control policy, and
they are determined to meet their responsibilities for the proper
implementation of the policy. The quality targets include (1) improving
client satisfaction on project execution, (2) attaining continuous
improvement of work processes, and (3) improving project work
quality. The quality management system is designed to promote the
continuous improvement of business performance, and the operations
of the system are documented and managed constantly.
CopQ Management | Improving project quality is crucial for
achieving sustainability because the failure of quality control
eventually results in cost increases. As such, we implemented the Cost
of Poor Quality (COPQ) management program in 2011, a cost-side
approach to quality issues at the enterprise level, to minimize cost
increases resulting from project management failures. The program
helps us define and categorize potential quality-related costs, and
find possible solutions to deal with specific issues.
Quality issue Management | We are conducting internal and
external audits for our projects in accordance with the quality
management system. These quality audits are performed in various
formats such as jointly with clients, exclusively in-house or through
a third party. They allow us to identify and correct significant
problems, helping to reduce client concerns. In addition, we
used the categories of quality-related costs to establish concrete
action plans to prevent the recurrence of problems. A quality
issue management system was also established to ensure the
continuous management and correction of those problems in the
future.
HandoverEngineering/Procurement Construction
�> offering Responsible services: plant satisfaction index (psi) survey
BUSINESS FOR SUSTAINABILITY
• Detailed design capabilities
• Client communication
• Client requests feedback
• Procurement capabilities
• Human capabilities
• Organization management ability
• Quality control ability
• Responsiveness to clients
• Project execution capabilities
• Project site management capabilities
• Quality control capabilities
• Document management
• Problem-solving
• Environment and safety
• Responses to client complaints
• Supplier management
• Communication among different
types of projects
• Plant delivery processes
• Document management
• Technological training
• Commissioning
• Technological guidance
improvement
• Maintenance plans
• Support for project completion
• Responses to client complaints
We will build the structure for sustainable growth through systematic risk and quality management, and outstanding project management capabilities.
Core Competence
Aspects
PSI execution phase
execution of the World’s First Lump-sum turnkey Contract for a Massive Gas Complex
Shaybah is the largest oilfield developed anywhere
in the world during the last two decades. It is
located in the Rub Al Khali desert, also known as the
Dead Desert, near UAE. The client Saudi Aramco
is operating oil well extractors and pipes as well as
gas oil separation plants (GOSP) and other types
of gas processing & oil refinery facilities in this area.
The Shaybah project site consists of the main NGL
section and four GOSP sections.
What it takes to complete this project successfully is
an integrated management strategy at the early EPC
stages as well as an interface management strategy
to monitor the separate site areas effectively. As
such, we are committed to completing this project
with excellence because this will demonstrate our
capabilities in executing lump-sum turnkey, multi-
package projects. We began this project with the
strategies focusing on implementation of innovative
procurement systems and specific execution plans.
We approach the project with goals of securing
transportation safety, ensuring the unfavorable
environmental conditions do not result in lower
productivity, shortening the construction schedule
and preventing accidents of any kind.
Contribution to Local economies through transactions with Local suppliers and employment of Local Residents
Samsung Engineering has a long relationship with
Saudi Arabia. We have carried out a total of 20
projects, worth more than KRW 10 trillion, in Saudi
Arabia since 2001, when we received the first order
in this country. Since we established a local office in
1999, we have developed relationships with local
communities by employing local residents and
building close partnerships with local businesses.
We established the Samsung Naffora Techno Valley
(SNTV), which serves as a regional headquarters
focused on facilitating investment in local
infrastructure projects, in 2011. SNTV has allowed
us to secure a quality local supplier base and raise
our construction cost competitiveness. This will also
result in an increased number of subcontracts to
local suppliers, thereby boosting local economies.
The gas and oil industry of Saudi Arabia accounts
for about 85~90% of the government’s income and
about 90% of the country’s total export. Given such
a high dependency and the fact that almost all oil
and gas plant projects are massive, the execution
of relevant projects creates huge employment
opportunities in this country. The Saudi Arabian
government obliges a foreign contractor to employ
a certain number of Saudi Arabians, a policy
called Saudization*. We endorse the policy and
do everything possible to contribute to the local
economy. The Shaybah NGL project is planned to
employ the maximum number of 11,700 people and
the daily average number of 6,700 people through
the construction period. We also employed 20 Saudi
Arabian nationals from the beginning of the project
in order to train them as senior engineers.
16 17SAMSUNG ENGINEERINGSUSTAINABILITY REPORT
pRoJeCt hiGhLiGht
Value Creation by Leveraging Integrated Project Execution Capabilities
Samsung Engineering signed a USD 2.8 billion contract for the Shaybah Natural Gas Liquid (NGL) project in Saudi Arabia in April 2011. The project was the first time ever that all the packages in one gas complex were awarded to a single company on a lump-sum turnkey basis. This was also the first time for Saudi Aramco to award a multi-package contract for gas separation plants and gas oil separation plants to a single engineering company. Samsung Engineering has completed a total of 24 projects in Saudi Arabia since entering the market in 2001 by carrying out the SPC PDH/PP project. About half of the projects were ordered by Saudi Aramco, the national oil company of Saudi Arabia. Our projects are in step with the Saudi government’s determination to cultivate an EPC contractor on its own, contribute to the growth of the Saudi Arabian economy and maintain a close partnership with the client for long-term, sustainable growth.
* Saudization: The national policy of Saudi Arabia that encourages the employment of Saudi nationals and the usage of local equipment to a certain extent in businesses run by foreign enterprises. Companies that fail to comply with Saudization regulations are restricted from participating in Saudi Arabia.
sustainability obtained through thorough Project Environmental Management
Our primary principle in executing projects
is thorough environmental protection and
management. In the Shaybah NGL project, we not
only comply with Saudi Aramco's environmental
standards but have also voluntarily adopted an
aggressive environment & safety management
policy to minimize environmental impact. Relevant
systems and procedures have been established
to monitor the implementation of these initiatives
and correct problems.
The client, Saudi Aramco, requires us to follow
their environmental regulations and the results
from the Environmental Impact Assessment (EIA).
They comprehensively define all possible areas in
which the project may have an impact: air quality,
biodiversity, archeological relics, soil quality, road
traffic, water collection and solid waste. As such, we
established and are committed to implementing
the Construction Environment Management Plan
(CEMP) that includes ways to mitigate key findings
from the EIA and other potential concerns.
From an engineering service provider to a Local Community Member
Samsung Engineering completed the construction
of Samsung Naffora Techno Valley (SNTV) in May
2011 at the Jubail Industrial Complex of Saudi
Arabia. It took 21 months and $100 million to build
the regional headquarters, which has the total
floor space of 38,000 m2 and 50,000 m2. The SNTV
consists of an office wing, training center, residential
wing and employee welfare center. As such, it will
provide us with capabilities to perform all EPC
processes independently. Moreover, the facility will
help us with hiring and employee training as well as
with social contribution activities. The training center
is divided into the Engineering Center and Safety
Training Center, where local engineers are provided
with design and safety training opportunities.
“The SNTV is our second regional headquarters for
managing operations in Saudi Arabia, the largest
geographical market for Samsung Engineering,”
said President & CEO Ki-Seok Park. “The completion
of the SNTV represents our commitment to
emerging as an economic, social and cultural
partner of Saudi Arabia, not just as a business
partner.”
The SNTV will be donated to the Al-Jubail community.
The opening of the compound will help us position
ourselves as the “Great Company” that contributes to
the development of local communities.
BUSINESS FOR SUSTAINABILITY
We will secure sustainability through environmental management while executing projects and contribute to the development of local communities.
shaybah nGl Project
Client Saudi Aramco
Location Shaybah, Saudi Arabia
period March 2011 - July 2014
shaybah
➊ Signing Ceremony for Shaybah NGL Project in April 2011 ➋ Site View ➌ Site Camp
➋➊
➌
• Order volume: USD 2.8 billion
• Execution period: 41 months (Construction period: 33 months)
• No. of local staff for construction period: Maximum 11,700
Daily average 6,700
iNteRVieW
SAMSUNG ENGINEERINGSUSTAINABILITY REPORT
18 19
Challenges of the World’s Largest Para-xylene Plant Project
The No. 2 Aromatic Complex in Onsan, Korea
has the world’s largest para-xylene plant. Annual
output capacity has been raised to 900,000 tons
of para-xylene and to 300,000 tons of benzene.
Para-xylene is produced from naphtha feedstock
and used to produce polyester, PET (Poly Ethylene
Terephthalate) and food packing materials.
Benzene is a feedstock for making polymers,
plastics, surfactants, drugs and dyes. The products
produced in the expanded facilities will be sold
on the global market, increasing Korea’s annual
export by more than USD 2 billion.
Project execution was determined to be extremely
difficult because it was basically an expansion of
existing facilities to establish the world’s largest
annual production capacity. Moreover, the
complex is located on a site reclaimed from the
sea, and the allotted period was just 32 months.
To overcome these challenges, we designed
tall pipe racks and structural steel, used to make
the structural framework of the plant, so that
major equipment can be installed among them.
In addition, we adopted the modularization
method, where almost all installations were
pre-fabricated offsite, and then moved to and
assembled onsite. In addition, we established
and implemented strategies to accelerate
construction, including engineering and schedule
management, adjustment of priorities depending
on constructability, focused delivery management
of long lead equipments, and commissioning-
centered project execution.
Project Execution in a Special Environmental Countermeasure Area
Another challenge faced by this project was the
status of the Ulsan-Onsan area. The plant is located
in Onsan, where industrial complexes and various
heavy industrial and non-ferrous metal operations
are placed. The industrial complex had resulted in
relatively higher levels of pollutants such as SO2,
NO2, O3, CO, PM10 in the area than in other regions.
Thus, the government designated it as a special
environmental countermeasure zone, subject to
stricter environmental air quality standards, in 1986.
We had to come up with measures to curb NOx
and SOx emissions to meet the tight environmental
standards from the design phase.
We set preventive environmental protection
and voluntary green management as our core
business values under the principle of focusing
on the prevention of environmental accidents.
We implemented the denitr i f ication and
desulfurization facilities to reduce SOx and NOx
emissions. We installed air pollution prevention
equipment that has emission standards stricter
than legal regulations, and even processed rainfall
at the project site by installing a special water
treatment system (Process Clean Sewer System).
Creating Client Value through outstanding technological Competitiveness
Korean refiner S-Oil invested KRW 1.3 trillion in the construction of the No. 2 Aromatic Complex, which will more than double the company’s capacity for petrochemical products. The commissioning of the project was completed and the plant began regular production in April 2011, two months ahead of schedule. Samsung Engineering was awarded the contract for the plant expansion project, as we were recognized for our outstanding hydrocarbon project execution capabilities. We started the project in September 2008, and completed the plant in 32 months. The environmental protection and safety remained the top priority from start to finish. The principle can be detailed as (1) meeting economic responsibilities by contributing to the success of the client through perfect project execution, (2) minimizing environmental impact by strictly observing the client’s as well as our own environmental regulations, (3) minimizing the number of work accidents through methodical safety management practices, and (4) making social contributions by procuring and hiring locally.
“ At first, I was worried about whether Samsung Engineering could draw a design that can accom-
modate all necessary facilities at this limited site as well as complete this project properly. The al-
located time for this project was rather short, too. To make matters worse, unusual extreme weather
events such as frequent torrential rains and unprecedented heavy snowfall became further obsta-
cles that the employees had to overcome. However, Samsung Engineering addressed all of these
challenges, met the delivery date and satisfied the quality requirements. The completion of this
project on schedule helped us to secure growth momentum as a global market leader.”
(Duck-Soon Lim, Project Manager of S-Oil Corporation)
We also installed photovoltaic power generators
with a combined capacity of up to 20 kW a day. The
electricity generated by the solar panels is used for
outdoor lighting and lights in the control room.
Project Site Management Based on the health & safety Management system
We adopted the Plan-Do-Check-Act (PDCA)
method for the management of health, safety
and the environment for construction projects.
The PDCA method consists of four steps: (1)
identifying risk factors, (2) establishing targets and
detailed action plans through risk assessment, (3)
determining specific roles and responsibilities for
organizations, and (4) managing actual projects
by training employees, preparing for possible
emergencies, responding to actual accidents and
engaging in effective communication efforts.
For the S-Oil Onsan project, we established risk
management plan for each phase of work before
construction. For example, we used equipment
modules and assembled them before installation
so as to manage risks related to limited working
spaces. We also conducted simulation tests to
manage seasonal risks such as bad weather and
extreme weather events.
We continuously monitored the safety-related
risks and carried out constant performance
assessments for the analysis and management
of these risks. Efforts were also made to correct
inadequate practices and to prevent the
recurrence of the same accidents. These safety
management activities enabled us to exceed the
client’s expectations.
BUSINESS FOR SUSTAINABILITY
onsan
s-oil onsan refinery expansion Project
Client S-Oil Corporation
Location Onsan, Korea
period September 2008 - April 2011
• Order volume: USD 1 billion
• Execution period: 32 months (Construction period: 22 months)
• No. of local staff for construction period: Maximum 4,200
Daily average 2,300
eco-friendlier sewage treatment Center with a Green park
Local residents tend to avoid sewage treatment
facilities, as they emit odors and release
wastewater. In Suji Respia, however, the sewage
treatment units are all placed underground
and any odor is completely contained through
deodorization and air purification systems.
Moreover, a leisure complex is built on the
premises, to include a sports center, art hall,
soccer stadium, running track and park for the
public to use. While the conventional sewage
treatment plant is an object of public displeasure,
Suji Respia has become the first of its kind that is
well received by local residents. The International
Water Association (IWA) recognized this design
idea and gave Samsung Engineering the 2008
Project Innovation Award for this project in the
Design category of the East Asia/ Pacific region.
Yongin, one of the most important satellite cities
in the Seoul Metropolitan Area, has a rapidly
growing population, and the city’s sewage
treatment needs have consequently seen a sharp
rise. This project was privately funded on a Build-
Transfer-Operate (BTO) basis under the Act on
Public-Private Partnerships in Infrastructure. The
contractor is tasked with opening twelve new
sewage treatment facilities and serving as the
single operator of Yongin’s 15 facilities, including
two existing sewage treatment facilities and
one night soil dump. This was the single largest
privately funded project in Korea and the 15
facilities are processing 252,530 m3 of sewage
a day, which accounts for over 80% of the total
sewage generated in Yongin.
environmental protection through Advanced Water treatment technologies
Out of the twelve facilities that will be constructed,
four units located near the Han River basin feature
advanced water treatment functions to meet the
requirements defined by the government’s Total
Water Pollution Load Management System, which
is aimed at protecting the environmental water
quality and preventing water pollution. The four
facilities are equipped with membrane bioreactor
(MBR) systems, functioning in an eco-friendlier
way. Moreover, they were designed to feature an
advanced water treatment technology by adopting
Samsung Engineering’s patented total phosphorus
treatment technology (PADDOⓇ : Pre-anoxic,
Anaerobic, dPAO, Denitrifying, Oxic)) to reduce
pollution and the use of treatment chemicals.
In addition, Suji Respia provides Tancheon and
Seongbokcheon, streams flowing into the Han
River drainage system, with 30,000 tons of water a
day each to prevent them from drying up.
We will continue to seek out ways to improve
the environment and the quality of life for local
residents through our engineering technologies as
we did in Suji Respia.
SAMSUNG ENGINEERINGSUSTAINABILITY REPORT
20 21
sewage treatment Facilities Combined with a Leisure Complex
Samsung Engineering has operated a privately funded project to integrate the management of 15 Sewage treatment facilities in the city of Yongin since 2010. Suji Respia is a noteworthy project that features eco-friendliness by turning a facility once shunned into place where residents want to come and relax. We will contribute to solving water shortages by utilizing our advanced technologies and preventing streams from drying up.
responses to Climate Change by Building Plants with reduced GHG emissions
BUSINESS FOR SUSTAINABILITY
suji respia
Client Yongin City
Location Yongin, Korea
period December 2005 - June 2010
Yongin
• Operation of 15 water treatment facilities with a combined daily capacity of 250,000 tons
• Application of advanced water treatment technologies
• Prevention of the drying-up of nearby streams
Samsung Engineering is poised to tackle rising environmental issues such as climate change and water shortages and to capture new market
opportunities by developing and obtaining eco-friendlier technologies and engaging in relevant projects. The projects described below show the
plant projects to which our CO2 recovery and SF6 decomposition technologies are applied in order to reduce GHG emissions.
pVFCCo Co2 Recovery Project
Client: PVFCCo
Location: Baria-Vungtau Province, Vietnam
Period: January 2009 - January 2011
A petrochemical plant consumes fuel and generates a huge amount of CO2. Part of the
greenhouse gases is reused or recycled to produce urea and methanol after CO2 recovery
processes. The PVFCCo CO2 Recovery project demonstrates Samsung Engineering’s CO2
recovery technologies, which capture carbon dioxide in combustion gas of a plant’s
ammonia processes and use it as a base material in urea production.
PVFCCo is a Vietnamese company that produces fertilizers, liquid ammonia, industrial gases
and other petrochemical materials. PVFCCo has contributed to laying the groundwork for
Vietnam’s petrochemical industry and to growing the economy since it was established in
2003. We were awarded contracts for technological support, quality assurance and project
execution for the PVFCCo project, and we completed the project within the 24-month
project schedule. It is expected that the project will reduce CO2 emissions by 87,600 tCO2
annually as the plant processes 240 tCO2 per day.
LCD sF6 Decomposition Facilities and CDM service
Client: Samsung Electronics Co., Ltd.
Location: Asan, Korea
Period: September 2009 - December 2015
The LCD SF6 Decomposition project of Samsung Electronics is aimed at reducing the
emissions of SF6, a perfluorinated compound (PFC) generated from LCD fabrication processes,
by decomposing the gas through a high temperature catalytic process. The LCD Industries
Association proposed a voluntary target to limit the emissions of process greenhouse gases
within three million tons from all member manufactures combined by 2010. In step with the
initiative, Samsung Electronics set a target of halving GHG emissions by 2013 compared to the
2008 level.
This project was certified as a UN Clean Development Mechanism (CDM) in 2010. The
reduction facilities were completed and are now in operation. A UN agency is monitoring
reductions in CO2 emissions resulting from the facilities. The monitoring process will be
finished in mid-2012 and the reduction in CO2 will be certified as carbon credits that are
tradable in carbon exchanges in Europe and other regions.
Special Page
Commitment tosustainaBility
28environment, health & safety
• Strengthening eco-friendly engineering, procurement and construction management practices
• Improving and enhancing the HSE system
• Raising awareness about safety and the environment
38employees & Workplace
• Improving development and training programs for employees
• Providing fair and competitive rewards based on job performance
• Building a corporate culture for effective communication and cooperation
46supply Chain
• Strengthening our global partnership network
• Establishing fair purchasing practices
• Promoting "shared growth" and communication
50Local Community
• Systematic management of global offices
• Expanding local purchasing and employment
• Expanding contributions to local communities
ethics & Compliance
• Preventing legal risks • Running a regular legal risk management system
• Promoting a corporate culture focusing on employee ethics and compliance
24
We are assessing the impacts of our businesses thoroughly in all of the economic, environmental and social aspects, and are committed to meeting the responsibilities as a corporate citizen.
etHiCs & ComPlianCeCoMMitMeNt to sustAiNAbiLitY
DisCLosuRe oN MANAGeMeNt AppRoACh
MANAGeMeNt pRiNCipLes
Samsung Engineering has implemented the Compliance Program, a permanent initiative for the integrated management
of legal risks, helping to ensure that our business practices are conducted in compliance with laws and regulations. The
program allows us to build a systematic compliance support structure, ensuring that the management and employees
voluntarily abide by relevant rules and regulations and manage legal risks.
oRGANizAtioNs iN ChARGe
• Compliance • Legal • Audit
GoALs
COMMITMENT TO SUSTAINABILITY
Preventing legal risks
SAMSUNG ENGINEERINGSUSTAINABILITY REPORT
24 25
the Compliance Program for ethical and legal management Practices
We ensure that the management and employees manage legal risks properly and voluntarily abide by relevant rules and regulations through implementing the Compliance Program.
operations of the Compliance program
Today, legal governance for sustainability management is not
just a matter of corporate ethics but also directly associated
with corporate survival. In 2011, we developed a systematic
compliance program and established the Compliance Committee
and an organization dedicated to legal governance to respond
to stricter external regulations and ensure our business activities
are conducted in compliance with laws. As such, we will abide by
local laws and regulations in countries with our business footprint,
meeting our social responsibilities as a global player and continuing
to promote legal governance.
Organizations and operational structure | The Compliance
Committee, the highest decision-making body in the Compliance
Program, deliberates upon and resolves major matters regarding
the company’s compliance management policy and the operation
of relevant structures.
The Chief Compliance Officer (CCO) is primarily responsible for
supervising Samsung Engineering’s compliance management
practices and the Compliance Program. The CCO, who is appointed
by the resolution of the Board of Directors, sets the standards
for the company’s compliance policy and practices, and holds
responsibility for awarding best practices and correcting violations.
The Compliance Department is established under the Compliance
Committee and guarantees independence. The department is
responsible for planning and implementing compliance initiatives
as well as supporting the Committee and the CCO. Enterprise-
level departments and business units have their own Compliance
Officers (COs) and Compliance Managers (CMs) in charge of legal
risk-related activities.
• Organization in charge of Securing Compliance
* CO: Compliance Officer / CM: Compliance Manager
CCO (Chief Compliance Officer)
The Chief of the Compliance Department
The Compliance Committee
Enterprise-levelCO/CM
Business UnitCO/CM
Foreign BasesCO/CM
Fairtrade
Corruption prevention
Environment & safety
Industrial relations,
protection of information
Support for the
observance of laws,
monitoring
Ceo
• Compliance Mission and Vision
build the platform for sustainable growth by establishing an integratedcompliance management system at the enterprise level
prevention and regular management system for key legal risks
build systematic, integrated compliance response systems
encourage the top management and employees to adopt a compliance-oriented mindset
VISION ▶
MISSION ▶
GOALS ▶
FeedbackSetting guidelines Education & Training
• Select key tasks • Establish operational standards and
manuals
• Share the importance of compliance with the top management and employees
• Raise awareness about compliance and routinize compliance practices
• Review and monitor • Establish improvement plans
Running a regular legal risk management
system
Promoting a corporate culture focusing on
employee ethics and compliance
SAMSUNG ENGINEERINGSUSTAINABILITY REPORT
Compliance Guidelines
We selected legal risks that have huge potential impacts on our
businesses but are now inappropriately managed as key tasks.
We established employee guidelines about the compliance
risks and strengthened training programs customized by duty
and rank. We are also improving compliance processes and
managing relevant risks by receiving reviews and feedback. The
details of key tasks are described below:
Fair trade | Employees are not allowed to be involved in unfair
transactions and unlawful collusion and to ask someone to
provide improper influence. Our people shall not submit a
bid based on false information, but rather shall adhere to fair
contracting and subcontracting practices at all times.
Corruption prevention | Our employees in any case do
not conduct inappropriate acts such as receiving money,
entertainment or any service for undue benefits. They are
not allowed to offer nor receive rebates or to be involved in
doubtful transactions.
information protection | We do not unlawfully obtain or
reveal information that is designated as legally protected trade
secrets or proprietary by the company or a third party. Our
people follow information security best practices and relevant
corporate rules in performing their duties and do not abuse
the resources, intellectual property or facilities of the company.
industrial Relations and Corporate Culture | We follow
domestic and overseas labor laws in our business operations.
We prohibit discrimination based on gender, race, nationality,
religion and other factors. Sexual harassment is not be
tolerated in any case. We strictly prohibit employees from
leaking employment information to those in business relations
or to those who are not approved to receive such information.
environment and safety | We understand and observe
our OHS rules as well as the environmental, safety and
administrative laws and regulations of countries where we
operate. We implement measures to prevent industrial and
environmental accidents and do not release environmental
pollutants.
In addition to setting the guidelines in these five areas,
Samsung Engineering’s Compliance Program obliges
employees to abide by in-house rules and regulations such as
accounting standards and procedures, accountability to report
corporate management, and the code of conduct and the
code of ethics to promote employees’ integrity.
Constant Communication efforts
Samsung Engineering has continued to communicate with
and educate employees about the company’s compliance
management pledge through in-house broadcasts and official
memorandums, encouraging them to engage in compliance
management practices proactively. In 2011, each employee
spent an average of 128.5 hours on compliance training
sessions. The subjects of the training included points that
employees should bear in mind concerning legal compliance,
relevant laws and regulations, fair trade and corruption
prevention.
• Samsung Engineering Compliance Training Program in 2011
Session title Content and objective Target Date
Understanding of the Compliance Program
• Education on compliance and the company’s action plans• Outline of the Compliance Program, global trends, relevant organizations at Samsung Engineering
• Urging the top management to take leading roles in compliance activities preemptively
Executives,Team chiefs
March
Fair Trade and Corruption Prevention
• Education on the ban on collusion, corruption prevention activities, international laws and rules, and violation case studies
• Compliance with Samsung Engineering guidelines and processes• Control of legal risks that may occur with regard to the relationship with clients and suppliers
Executives,Managers in
charge of sales
July,September
(twice)
Compliance with the Fair Subcontract Transaction Act
• Outline of the Compliance Program, corruption prevention activities, the Fair Subcontract Transaction Act, major concerns for transactions with suppliers, etc.
• Raising working-level employees’ awareness about compliance through actual visits to ongoing project sites and solving problems through early detection of potential legal issues
Employees on major project sites at home and abroad
May - November(36 times)
26 27
• Ethics & Compliance Environment, Health & Safety Employees & Workplace Supply Chain Local Community
CoMMitMeNt to sustAiNAbiLitY
• Standards and Guidelines for Ethics and Compliance Management
Principlesand
Standards
• Samsung Business Principles
• Code of Ethics
• Code of Conduct
Guidelines
• Operational standards for compliance-related activities
• Guidelines on major legal risks
• Definitions of wrongful practices for employees
• Compliance Processes
▶ Setting guidelines and improving systems: the boundary system, dos & don’ts
▶ Reporting to the top management and feedback
▶ Issuing warnings and drawing solutions for correction
▶ Evaluation and disciplinary actions
Guidelines
training/education
Corrections/Feedback
Fair trade
Corruption prevention
Labor relations and corporate culture
Environment & safety
Information protection
Monitoring and Feedback
If defining and responding to compliance risks is the first step
of legal risk management, continuous monitoring of defined
risks is both the goal and starting point towards the correction
of the problems.
We have established a compliance monitoring system that
enables the Compliance Department, the Compliance Officer,
and Compliance Manager of each functional and business
unit, and the relevant departments to review one another’s
compliance activities. We have also conducted regular
audits for subsidiaries and project sites at home and abroad.
These initiatives help to raise employees’ awareness about
compliance activities.
Compliance Management system | We are running the
Compliance Management System in order to support
employees to take part in compliance activities. The
basic items of the system include the introduction to the
Compliance Program, regulations and manuals, Q&A board,
recent compliance trends, recent compliance issues, education
sessions and support for whistleblowers.
ethical Management Website | We operate an online
homepage on corporate ethics in order to build a corporate
culture emphasizing integrity. The standards and the Code of
Conduct toward fair and transparent management practices
are suggested on the page. Employees can report a violation
of corporate ethics on this site.
Compliance management declaration ceremony in April 2011
COMMITMENT TO SUSTAINABILITY
Compliance management pledge in April 2011
2011 ethics & Compliance Key Figures
We have been involved in continuous communication efforts to raise
employees' awareness and understanding about the company’s
ethics and compliance management and to educate them on core
corporate values.
• Offline training sessions
• Online training sessions
No. of participants 4,045 people
Total hours for training on ethics and compliance 1,828 hours
No. of participants 1,475 people
Total training sessions
Corruption prevention Compliance
34
4,373 hours
3,043 people
92
4,367 people
Corruption prevention Compliance
Green management applied to all Project Processes
We have established green management strategies that are applicable to all processes, ranging from engineering and procurement to construction. Our green management performance index helps the entire organization to engage in green management practices.
Green Management strategies
As environmental issues have attracted global attention, we face
ever-greater demands for standardizing green management
systems and disclosing environmental information. Clients present
diversified environmental requirements from the project bidding
stage to include environmental waste disposal and the protection
of the native plant species around project sites. In the assessment
of credit ratings and corporate performance, environmental
disclosure requirements have become stricter. Moreover, we now
have a growing internal need to understand local environmental
laws and regulations in countries where Samsung Engineering
operates, as our geographical markets have been diversified and
project scales continue to expand.
Against this backdrop, Samsung Engineering established strategic
directions for environmental action plans to attain higher
environmental performance. Our green management strategies
reflect various initiatives such as the reduction of raw material use,
adherence to environmental laws and regulations, and training
programs to help promote green management, realize eco-
friendlier project sites and spread the “Eco-Culture.”
Green Management system
We incorporated green management initiatives into the existing
environmental management system in early 2011 to establish
the enterprise-level green management structure and we
obtained the Green Management System certificate in November
2011. This is an integrated certification based on the ISO 14001
Environmental Management System standards and incorporates
the International Standard for GHG Emissions (ISO 14064) and
the environmental requirements in the Guidance on Social
Responsibility (ISO 26000).
eRs | The manager of each project conducts a self-assessment
of environmental capabilities through the Environmental Rating
System (ERS). The ERS consists of performance evaluation
items with regard to project site environmental management
in the three categories of legal regulations, site environmental
management and the environmental management system.
seis | Environmental information of Samsung Engineering’s
domestic and overseas project sites are collected monthly
through the Sustainable Environmental Initiative System (SEIS), the
internal management system. SEIS consists of three systems, (1)
the Environmental Management System (EMS), which establishes
environmental plans, manages project sites, and monitors
environmental performance based on ISO 14001, (2) the GHG
Management System (GMS) designed to collect data on GHG
emissions, and (3) Green Performance Indicators (GPI), which is a
module for analyzing green management performance.
MANAGeMeNt pRiNCipLes
We have set promoting green management, realizing eco-friendly project sites and promulgating a “culture of eco-
awareness” as our main environmental strategies, and have established a management system for low-carbon and green
growth. Under our “people-first” principles, we ensure that the health and safety of our employees and project staff remain
a top priority. We will continue to practice proper safety and environmental management throughout every business
process, encompassing the engineering, procurement and construction stages.
oRGANizAtioN iN ChARGe
• HSE • Outsourcing Planning
GoALs
28 29SAMSUNG ENGINEERINGSUSTAINABILITY REPORT
Green management system certification in November 2011
• Green Management Strategies
Keyaction plans
Lead global green management trends
and achieve corporate sustainability
Prevent environmental
accidents and meet corporate social responsibilities
Raise environmental awareness and
share core values
Strategic direction
Promote green management
Realize eco-friendly project sites
Spread the “Eco-Culture”
Key themes
Reduce raw material consumption,
Make logistics eco-friendly,
Develop eco-friendly products,
Practice green procurement
Obey environmental laws and regulations,
Preserve water resources,
Reduce waste,Protect biodiversity
Give environmental
training by position,
Build “Eco-Partnerships” with
suppliers
COMMITMENT TO SUSTAINABILITY
DisCLosuRe oN MANAGeMeNt AppRoACh
enVironment, HealtH & safetyCoMMitMeNt to sustAiNAbiLitY
* Environmental data was collected from all project sites in principle. Some sites, however, were excluded from the data collection scope in accordance with Samsung Engineering’s internal directives if they were deemed to have negligible environmental impacts given the project characteristics and size.
Strengthening eco-friendly engineering, procurement
and construction management practices
Improving and enhancing the HSE
system
Raising awareness about safety and the
environment
SAMSUNG ENGINEERINGSUSTAINABILITY REPORT
30 31
CAse
eco-friendly engineering Design
Eco-friendliness is built in during the design stage. We provided eco-friendlier
designs for Samsung Corning Precision Materials Project in 2011. The office and
plant buildings feature various ideas for higher energy efficiency and greater
eco-friendliness. The operation of air conditioning systems can be controlled
by individual offices, while ceiling-mounted air intake vents reduce heat from
lighting. Energy losses from the HAVC system were minimized by adopting
the flow control unit. Moreover, energy efficiency certified appliances, water-
saving shutoff valves and remote-controlled individual lighting systems were
put in, helping the client minimize resource use. Photovoltaic modules were
also installed to use the renewable energy source in the plant buildings.
• Eco-friendly/green purchase
• Optimize logistics• Environmental
assessment for suppliers
• Establish the construction environmental management plan
• Consider resource usage, pollutant releases, and biodiversity protection
• Monitor environmental pollutants in real-time
• Optimize the use of energy, water and chemicals
• Raise energy efficiency • Reduce pollutants• Apply eco-friendly
construction methods
engineering procurement Construction operation
• Identify environmental issues
• Analyze environmental needs
• Establish plans to reduce environmental impacts and identify key performance indicators
• Attaining Environmental Efficiency in All Business Processes
established the standards for air pollutant emissions and air
quality pollution prevention facilities. These standards and
facilities are applied to domestic and overseas construction
sites to protect the health of employees and local residents
alike. People are posted at the entrance of every project site to
supervise vehicle and wheel washing processes. All vehicles that
carry cargoes with dust scattering must be covered. Dustproof
covers are also put on materials piled in the open air and on
slopes at construction sites.
soil | Plant construction projects potentially affect the environment
because soil is used in abundance. Possible impacts include
upsetting the ecological balance, damaging local plant species
and polluting the soil. We consider the environmental impacts
of excavation and reclamation work based on engineering and
project site environmental management plans established prior to
the kick-off of the actual project.
Waste and Hazardous Materials | We engage in a
multifaceted effort to minimize waste generation during our
business activities. Thorough management steps are also
in place for hazardous materials to cover storage, vehicle
transportation, pipe transportation, vehicle maintenance and
vehicle refueling.
use of recycled steel in 2011
120,000 tonUnit: Ton
15,000
2009
60,000
2010
120,000
2011
�>�use of Recycled Materials
The use of recycled structural steel in plant construction is over 95% of the total amount. (Only qualified recycled structural steel is used in the aspects of strength, tensile force and hardness.)
We established and distributed the following environmental guide-
lines and manuals to provide the standard guidance for all environ-
mental processes in 2011:
• Environmental management handbook
• Construction environmental management guides
• Site environmental management guidelines
2011 environmental Gudelines
Resources and energy | We use the ISO 14001 system to
monitor resource and energy consumption at all construction
sites to respond to domestic and overseas regulations and
reduce costs. The consumption of key resources directly affects
the overall cost of a project.
Water Resources | We divide construction water sources into
tap water, surface water, underground water and reused water,
managing each category appropriately. Almost every site uses
tap water, and water collection has never been reported as
affecting the surrounding environment. We collect rainwater
and underground water that comes to the surface during
excavation work. The collected water is used in sprinkling
systems or when washing off onsite areas, thereby reducing
overall water consumption.
Air Quality | We consider the possibility of air quality pollution
in all of our business processes starting from engineering,
procurement and construction to commissioning. We
Attaining environmental efficiency in the engineering and procurement processes
We work hard to meet social responsibilities in relation to the
use of resources and energy, possible environmental impacts,
GHG emissions and other environmental issues in the basic and
detailed engineering, and procurement processes. We are also
providing safe and reliable products and services.
Low-emission engineering | Our project designs are drawn
to reduce resource use, waste generation, air and water quality
pollution and noise by adopting optimized and up-to-date
technologies. In the basic engineering stage, we provide clients
with alternative designs that contain facilities to minimize
environmental pollution and treatment systems for releasing
effluent properly and we encourage clients to accept the
alternative designs.
Value engineering | Value engineering refers to a method
for reducing costs by optimizing designs for higher efficiency.
Design optimization provides environmental benefits such as
reduced energy and resource use as well as cost saving. We
pursue eco-friendly design through the value engineering
methodology.
Green purchase and supplier Assessment | As a corporate
consumer, we endorse green procurement and encourage the
use of green products. We are helping to promote sustainable
consumption practices and responding to the government’s
environmental policies by purchasing green products under
the Procurement Procedure for Eco-friendly Materials. By
doing so, we are helping to mitigate the negative impact of
our business activities on people and the environment and to
use limited resources most efficiently, thereby maintaining the
quality of life and the environment in general.
Project Site Environmental Management in the Construction process
Samsung Engineering manages project sites in the most eco-
friendly way possible to minimize the impact on resources,
energy, water, air, soil and ecosystems.
COMMITMENT TO SUSTAINABILITY
• Casebook of Q&As on construction environment
• Casebook of project best practices/failures
• Casebook of environmental regulation violations
samsung Corning precisionMaterials Project
Ethics & Compliance• Environment, Health & Safety Employees & Workplace Supply Chain Local Community
CoMMitMeNt to sustAiNAbiLitY
32 33SAMSUNG ENGINEERINGSUSTAINABILITY REPORT
Category2010 2011 2012 Target
Index Data Index Data Target*
(1) Operational Performance Index (OPI)
Energy Usage Amount** 72.0 GJ/KRW billion 382,435 GJ 110.8 GJ/KRW billion 1,030,151 GJ YOY 2.5 %↓
GHG Emissions** 5.9 tCO2e/KRW billion 31,199 tCO2e 8.7 tCO2e/KRW billion 80,713 tCO2e YOY 2.5 %↓
Water Usage 8.3 ton/KRW 100 million 438,265 ton 7.6 ton/KRW 100 million 711,290 ton YOY 2.5 %↓
Waste Generation 5.2 ton/KRW 100 million 274,490 ton 5.2 ton/KRW 100 million 482,219 ton YOY 5.0 %↓
Waste Recycling Rate 37.2 % 59,354 ton 34 % 111,654 ton 35 %
(2) Management Performance Index (MPI)
MRO N/A - 23.1 % KRW 85.9 million 25 %
Green Product Investment Rate 56 % KRW 9.9 billion 54 % KRW 11.2 billion -
Green Product*** Rate 58.8 % Environment level 80.1 points 38.7 % Environment level
78.4 points 50 %
Training N/A - 0.76 hr/person 5,792 hr 0.85 hr/person
* Target is based on the performance index (intensity)
** Energy usage amount and GHG emissions are based on the emission of Scope 1 and Scope 2.
*** Green product rate = (The number of green projects) X 100 / (the number of projects subject to assessment) Green products: Projects that received 80 or higher points in the Green/Environmental Inspection Assessment
Green Management performance
performance Management | We set up our own Green
Management Performance Index based on the standards
stipulated in KSI 7001. The index is used when diagnosing
environmental impact during engineering, procurement and
construction, and performance is monitored regularly.
The Green Management Performance Index covers two areas:
operational performance and management performance.
Operational performance is evaluated on a monthly basis
by project. It is calculated as intensity per revenue, allowing
us to compare the results among construction sites and
chronologically. We conduct monthly, quarterly and yearly
performance assessments at the enterprise level and set
improvement targets to improve green management
performance steadily.
Action plans | We categorize business units according to
function such as engineering, procurement, construction and
support to analyze the requirements for each part and identify
green management issues. The issues are prioritized in the green
management plan according to importance. Each task includes
detailed action plans to achieve targets related to problem
areas, scheduling and people in charge.
COMMITMENT TO SUSTAINABILITY
2010 2011
Direct emissions (Scope 1, tCO2e) 23,342 67,824
Indirect emissions (Scope 2, tCO2e) 7,857 12,889
Total 31,199 80,713
CO2 intensity (tCO2e/KRW billion) 5.9 8.7
Other emissions (Scope 3, tCO2e)* 1,742,941 1,894,948
- Subcontractors (Construction equipments) 62,974 198,480
- Environmental facilities* 1,679,967 1,696,468
• GHG Emissions
* Environmental facilities include sewage and waste water treatment plant and waste incineration plant.
responses to Climate Change, Water scarcity, threatened Biodiversity and other macro-environmental issues
We understand macro-level environmental issues such as climate change and biodiversity, and our entire organization will strive to tackle the related challenges.
Reponses to Climate Change
Samsung Engineering annually assesses climate change-related
risks and opportunities for major functions of business under the
“Green Management Planning Guidelines.” Significant risks and
opportunities are addressed with individual action plans.
strategies to tackle Climate Change | Acquiring the
technologies of carbon capture & storage (CCS) and integrated
gasification combined cycle (IGCC) are short-term strategies for
us to meet international climate change pacts and environmental
regulations. Our long-term strategy calls for developing new
markets and technologies to address changes in the global
business environment caused by climate change.
Greenhouse Gas Management system | Our greenhouse
gas inventory was established to serve as a basis to respond
to climate change. We began collecting our GHG emissions at
domestic construction sites in 2007, and expanded the coverage
to overseas sites in 2008. The system went online in 2009. The
GHG management system receives data by emission source.
When the type and amount of energy sources are entered, GHG
emissions are automatically calculated using the appropriate
methods.
GHG emissions by direct sources in 2011*
12,548
Headquarters
68,165
Project sites
Offices
Vehicles
Unit: tCO2e
* GHG emissions by direct sources include the emissions of Scope 1 and Scope 2.
• Greenhouse Gas Emissions by Country*
Saudi Arabia
UAE
Korea
Algeria
India
Trinidad and Tobago
Bahrain
Mexico
Malaysia
China
Hungary
657
585
352
281
242
100
25
13,475
17,141
20,943
26,912
* GHG emissions by country include the emissions of Scope 1 and Scope 2.
Unit: tCO2e
Ethics & Compliance• Environment, Health & Safety Employees & Workplace Supply Chain Local Community
CoMMitMeNt to sustAiNAbiLitY
CASE
34 35
Reponses to Water scarcity
Samsung Engineering is a total water treatment solution
provider, ranging from wastewater and sewage treatment
to deionization and desalination. We develop sewage and
industrial water reuse technologies to help address increased
water usage and subsequent water shortages in the future.
We respond to water shortages and new regulations on
total pollutant loads by developing technologies to reduce
industrial water consumption and wastewater generation.
Moreover, we strive to diversify into desalination plants
by leveraging our extensive expertise and experience in
deionization and membrane technologies.
Recycling Waste Water | The current water supply capacity
is now insufficient for satisfying water demand from the
semiconductor, LCD and other electronics industries because
water quality has generally deteriorated while the industries
have grown. Thus, the need to secure alternative water
sources continues to grow. We developed a waste water reuse
technology (SEMBRⓇ+R/O), and more than 15 million tons
of water are now reused annually, helping to solve the water
shortage in these industries. In addition, solid-advanced
oxidation process (S-AOP) technology has enabled us to
process 25 million tons of low waste-density water produced
in the AMOLED processes and reuse it as process water.
biodiversity protection
Keen attention has been paid to biodiversity protection along
with climate change since 2010. The International Union for
Conservation of Nature and Natural Resources (IUCN) said in a
UN report that 17,291 endangered species are at serious risk.
To protect wildlife, Samsung Engineering strictly fulfills the
reporting requirement prior to the start of construction, and
all relevant protection guidelines are followed during project
execution.
ecology Management procedure | We conducted
biodiversity protection activities under our in-house Ecology
Management Procedure in 2011. The procedure provides
practical advice applicable to construction sites for protecting
biodiversity, including the identification of factors affecting
biodiversity, prioritization of issues, and selection of projection
methods.
SAMSUNG ENGINEERINGSUSTAINABILITY REPORT
• Protecting Wild Forests - Mangrove Protection
Greenpeace and other environment organizations expressed significant concerns over this project and the Mexican government made
the protection of mangrove trees, a habitat for hundreds species of fauna and flora, a precondition for project execution. We met this
requirement by devising measures to reduce environmental impacts and took great care to protect the mangroves around the lake.
• Protecting Wild Animals - Fauna Rescue
We captured and relocated wild animals in the site before the kick-off of project execution, as mandated by Mexican wildlife protection
regulations.
Biodiversity Protection - Manzanillo LNG Terminal Project, Mexico
• Rescue live animals trapped in fences.
• Conduct pre-inspection before demolition
• Avoid all kinds of activities hazardous to wild animals
Mangroves in preserved sites Limit access to protect forest Capture and relocate wild alligators Fauna rescue team activities
Domestic Overseas
75.0
2008
50.8
2008
88.6
2009
62.5
2009
87.9
2010
66.7
2010
83.4
2011
70.6
2011
* Safety management levels of domestic and overseas subcontractors are evaluated in the six-grade scheme (A, B, C+, C, D, E). The graph shows the percentage of subcontractors that have received the grade B or higher.
Subcontractor safety training 341sessions
Subcontractor -Samsung Engineering HSE Departmentjoint safety inspection 7times
Subcontractor CEO meetings and best practice presentations 32 companies joined
On-site monitoring and audits
141on-site monitorings 81 audits
Samsung Engineering regularly evaluates safety levels of domestic and overseas subcontractors. We are committed to improving
the safety of subcontractors through training, monitoring and inspection activities.
Subcontractor safety level assessment result* (Unit: %)
* Fauna Rescue Instructions
• Do not collect, hunt and trade in wild animals
• Do not use barbed-wire fences for excavation work
• Secure animal trails by propping up fences with sticks after work
2011 subcontractor safety Key Figures
COMMITMENT TO SUSTAINABILITY
Health and safety as Key indicators for sustainable Business
We set challenging safety and health targets at the enterprise level. We promise to remove factors threatening the safety and health of employees and achieve accident-free sites.
safety and health program
Our Safety and Health Program is carried out to guarantee the
safety for our employees and subcontracted workers and to
achieve higher performance in safety management at every level
of our businesses.
safety Management system | The Samsung Engineering safety
management system complies with OHSAS 18001. Our safety
and health program not only complies with related regulations
but also requires the full participation of business partners and
subcontractors as well as our employees. The program aims
at establishing rigorous safety and health targets every year,
eliminating hazards that may threaten employees' health and
safety, and improving the level of health and safety consistently.
preliminary Risk Management | Samsung Engineering
conducts preliminary construction meetings and risk assessments
to identify the most efficient work methods for dangerous work
and manage risks prior to actual construction. Risk assessment
meetings are attended by Samsung Engineering’s construction
and safety managers as well as by their counterparts from
subcontractors. The discussions also serve as small pre-construction
meetings on dangerous work. We are building an advanced safety
management system by simulating all projects and monitoring the
simulation results to improve performance.
Ethics & Compliance• Environment, Health & Safety Employees & Workplace Supply Chain Local Community
CoMMitMeNt to sustAiNAbiLitY
36 37
training and Awareness Reinforcement
training and Communication | For the successful
implementation of the safety and environmental
management system, Samsung Engineering’s HSE
Department provides employees with information and
training programs so that they can clearly understand and
act in accordance with HSE principles. Publishing in-house
newsletters, organizing campaigns and issuing cautions on
safety risks are some examples. In addition, training sessions
are held regularly. We also participate in relevant associations
such as the working-level council among construction
companies.
Training on safety and environmental issues was provided
through the safety training matrix in 2011. The classes
covered more than 20 subjects such as “Personal Protective
Equipment” and “Fall Prevention,” targeting the specific
duties of the trainees. A total of 2,681 employees attended
the regularly scheduled safety and environment training
programs consisting of five basic and two selective sessions
held at the headquarters or through online. The four courses
for suppliers were attended by 377 people.
external Activities | We are a member of various safety-
related associations and councils that are also represented
by other domestic engineering and construction companies.
Samsung Engineering chairs the Construction Safety Manager
Association (CSMA), and participates in the Construction
Safety Officer Association, KOSHA 18001 Association, and
the Council of HSE Managers at Samsung Group’s four
construction companies. The CSMA held the Construction
Safety Forum, the Safety and Health Week initiative, the Safety
and Health Manager's Night program and other safety and
environment related activities.
safety talk | We organized the Safety Talk Program, an in-
house campaign to raise awareness on safety, in 2011. The
program was designed to encourage employees to participate
in the efforts to become a global leader in industrial safety. The
program required employees to attend a five-minute Safety
Talk before key official meetings and meetings with clients,
except intra-department meetings. The Safety Talk program
raised employees’ awareness of the importance of safety and
served as a platform to share safety training packages.
SAMSUNG ENGINEERINGSUSTAINABILITY REPORT
* Information is based on performance recorded in 2011. (The Asian figures do not include Korean data, and the domestic field accident rate stood at 0.18% as of 2011)* TRIR (Total Recordable Incident Rate) = (Fatality + Lost Workday Case + Restricted Work + Medical Treatment) / Manhour X 200,000 LTIR (Lost Time Incident Rate) = (Fatality + Lost Workday Case) / Manhour X 200,000
In 2011, exposure work hours were 132,163,393 man-hours which were almost doubled compared to the 58,797,318 man-
hours recorded in 2010 as a result of expanded project activities. The level of accident management displayed by the Lost Time
Incident Rate (LTIR) stood at 0.0045 in 2011.
2011 Health and Safety Performance*
Africa
0 (LTIR)
0.1173 (TRIR)
0 (LTIR)
0.3430 (TRIR)
America0 (LTIR)
0 (TRIR)
Asia
0.0070 (LTIR)
0.0978 (TRIR)
Middle east
• Fatality: 1
• Lost Work Day: 2
• Restricted Work: 13
• Medical Treatment: 46
• First Aid: 314
• Near Miss: 894
total exposure work hours
132,163,393 Mh
LtiR
0.0045
standards and Guidelines | Samsung Engineering published
and distributed training guidelines by construction type
for managers and employees at overseas construction sites
in August 2011. A total of 30 manuals were published for
managers and 24 for other employees. They were delivered to
all sites along with safety training materials. In December 2011,
the Project Setup Guide Package was shared to help project
managers establish the HSE management system in the initial
stages of a project.
supervisor Assessment | Samsung Engineering assesses
the performance of supervisors at domestic and overseas
sites every six months. According to the evaluation
results, we reward outstanding performers and discipline
underperformers. As an increasing number of new employees
join the company, we sought new measures to enhance their
understanding of our safety management system.
Client hse satisfaction survey | Samsung Engineering
annually surveys overseas clients to see how they are satisfied
with our HSE management. The survey allows us to assess and
analyze the current HSE status and to understand the different
characteristics of clients. We also examine our strengths and
weaknesses by country. We are committed to achieving
excellent HSE performance by consistently carrying out HSE
management activities and correcting any problems.
university student internship program | We organized an
internship program in cooperation with the safety engineering
departments of prestigious universities to strengthen
students’ field working capabilities and enhance our corporate
image. One 4-week internship was held in each half of 2011.
Participants worked as field safety assistants.
Item Project Country Award Date
Achievement ofsafe MH without LTA(Lost Time Accident)
Borouge-3 PO/LDPE UAE 7 million MH without LTA December
GAS phase VIII (ASU) Saudi Arabia 6 million MH without LTA November
JERP #3 Aromatic Units Saudi Arabia 10 million MH without LTA October
Fertil-2 Ammonia/Urea UAE 5 million MH without LTA October
SAMCo Acrylic Acid Saudi Arabia 5 million MH without LTA September
BAPCO Lube Base Oil Bahrain 9.5 million MH without LTA July
Saudi Aramco DHT Saudi Arabia 17 million MH without LTA May
Ma'aden Ammonia Saudi Arabia 15 million MH without LTA March
HSE ExcellenceGlobal Engineering Center Project Korea
Grand prize in construction, Maeil Business Newspaper Safety
Management AwardDecember
Samsung Electronics Co., Ltd. NF China Tianjin City Haihe Cup Award March
Achievement of safe MH without LTA for GAS phase Ⅷ (ASU) project
University student internship progam Achievement of safe MH without LTA for Saudi Aramco DHT project
COMMITMENT TO SUSTAINABILITY
• 2011 HSE Award
supervisor Assessment Results
81
2010
82
2011
83
2010
85
2011
Domestic Overseas
Unit: Points Unit: Points
Client hse satisfaction survey Results
71
2009
81
2010
79
2011
Overseas
Unit: Points
Ethics & Compliance• Environment, Health & Safety Employees & Workplace Supply Chain Local Community
CoMMitMeNt to sustAiNAbiLitY
Recruitment
human Resource philosophy | We are looking for people
who aspire to be experts in their fields, effective business
leaders and global citizens by committing themselves to our
common vision and values. We are helping our employees
acquire these qualities with a wide range of training programs
and employee benefits. These offerings will help them lead
innovative activities, adhere to ethical practices and become
successful global players.
Fair hR Management | We are committed to making our
organization more transparent and dynamic by ensuring
fairness in our human resource management. We have
established policies and guidelines for maintaining diversity in
our workforce to ensure that nobody is discriminated against
on the grounds of gender, age, religion or disability. We create
or modify our human resource management rules based on
Korea’s relevant laws and update them whenever they are
revised to prevent our employees from having their interests
compromised. Our overseas office hire and manage their
employees in compliance with relevant local laws.
talent Development programs
talent Development strategies | We are seeking to run
talent development programs that help our employees fulfill
their utmost potentials and promote a challenging spirit. To
make this happen, we encourage our employees not only to
enhance basic job skills but also to develop leadership and
cultural abilities for higher organizational efficiency; to have
a better understanding of engineering, procurement and
construction; to enhance their conversation skills including
advanced English proficiency; to expand globally based on
our domestic capabilities to increase our global presence.
To achieve the goal of cultivating talented employees, we
are implementing coherent human resource development
strategies, including strengthening our organizational
competitiveness (Value/Leadership/Job Skill/Global Business),
running rank-specific business leadership development
programs and attracting talented employees from around the
world.
38 39SAMSUNG ENGINEERINGSUSTAINABILITY REPORT
COMMITMENT TO SUSTAINABILITY
emPloyees & WorKPlaCeCoMMitMeNt to sustAiNAbiLitY
Human resource management for successful Career Development
Samsung Engineering helps employees fulfill their true potentials by ensuring fairness in human resource management and offering integrated career development programs.
MANAGeMeNt pRiNCipLes
We are providing our employees with diverse training programs and attractive employee benefits to help them
lead innovative activities, stick to ethical practices and become successful global players. We aim to become an
ever-better company to work for by focusing more on developing human resources and providing a better working
environment.
oRGANizAtioN iN ChARGe
• Human Resource Management • Industrial Relations Council
GoALs
DisCLosuRe oN MANAGeMeNt AppRoACh
* The employee benefits and training programs described in this report are mainly based on those offered at our headquarters in Korea. They may vary depending on the circumstances of each overseas office.
Improving development and training programs
for employees
Providing fair and competitive rewards
based on job performance
Building a corporate culture for effective
communication and cooperation
• Objectives of our Talent Development Programs
Samsung Engineering
wants who is...
Objective
Armed with expertise, leadership,global mindset and connecting with the
organization based on shared value and vision
Engineering Academy
job expert development Skill training Leadership
training
Global competitiveness
Learningculture
Earlyadaptation of
new recruit
e-HRD system implementation
Change champion
Global Standard
Performance driven
Client driven
Approach
• Human Resource Philosophy
Multi-Dimensional Thinking & Creative Imagination
Mod
esty
& Tr
ansp
aren
cy
FRo
Nti
eR iNteGRitY iNNo
VAtioN
Glob
al ta
lent
Next generation leader
to achieve common goals
Core member leading the world
passion, Challenging
spirits, Change
teAMWoRK
leading change and future
Team player maximizing synergy
Self-regulation Unity
in global management standard
chall
engi
ng th
e w
orld
SAMSUNG ENGINEERINGSUSTAINABILITY REPORT
40 41
training programs | Our training programs, which may
vary depending on employee rank, can be divided into
three segments: fundamental programs, cultural programs
and technical programs. The fundamental programs are
focused on basic work-related skills, including how to work
and communicate with other employees effectively. The
cultural programs are mainly composed of mental training
sessions designed to stimulate employees to develop cultural
competencies and act and think like leaders. Finally, the
technical programs are intended to help employees improve
work-related skills needed to lead future growth and become
global players by honing their foreign language skills intensively.
Training from Samsung Group Scheduled to openOnline trainingOffline training
• Structure of Talent Development Program
Newly-appoint-ed executives
Group introduction
Internal introduction
Newly-appointed assistant manager
Promoted managers [Introduction]
ScoutedExperienced
Overseas
Seniormanagers
Samsung EMBA
Internal mini-MBA
Character educationfor associates
Business EnglishOnline
Training regional specialists
Samsung MBA
Nurturing executives
Leadership education
foreach rank
Language courses
Internal small
foreign language
center
Special courses for business units
Strategic language courses
Onsite language courses
Intensive English courses for newly-hired employees
Leader'sAcademy
Executives
Sales SupportProject Design Procurement Construction
Process for upgrading entry-level employees to deploy them to major tasks earlier
PE KP CFM FCM
Management EPCPM LE PRM CM
EPCSchool
Core Jobs DevelopmentCourses
Business School
Education for eachjob skill
Middle manager nurturing process
Selection and training
bAsiC CuLtuRe teChNiQue teChNiQue
Course Purpose and Description Target
Quick upgradingEnable participants to do what is usually done by one-year
assistant managers in a project on their own Up to one year
after entry
Improving core job skills Improve job expertise and general management competenciesStaff - Depury
Managers
Internal foreignlanguage center
Enable participants to communicate with foreign business partners in a more professional way All employees
Business SchoolAllow participants to enhance business-related basic competencies to do
tasks from a multi-dimensional and integrated perspectiveAll employees
Reverse Engineering Enable participants to acquire the ability of engineering through case studiesThree to four
years after entry
TSDP (Technical Skill Development Program)
Enable participants to have a better understanding of design codes and specificationsto improve their basic competencies
Two to three years after entry
135 hours
Average annual learning hours per employee
177
2009
169
2010
197
2011
training expense per employee
performance Assessment and Rewards
We are offering a wide range of fair and competitive performance-
based rewards in order to retain talented employees with strong
capabilities and experience and to provide appropriate incentives
for outstanding performance. The rewards are based on the
systematic performance evaluation.
Annual salary system for All employees | We are offering
annually determined salaries based on performance for all
employees. Under the annual salary system, the basic salary and
bonus, which consisting of individual and group incentive, are
provided. Moreover, the incentives are given to the employees
who award a project, finish a project successfully and show
innovation in their fields.
Fair evaluations | Our performance evaluation programs are
based on competency and performance history. The evaluation
results are directly linked to promotion and annual salary. In 2011,
we began a new compensation program that bases payment
on previous evaluations in order to assess each employee’s
performance and competencies on a long-term basis. The new
program allows employees to receive more stable income by
focusing on the longer history of their performance.
We are committed to making our organization more integrated and promoting activities for more effective
communication among employees to maximize the positive effects of diversity in our workforce. As of December
2011, we had 1,213 local employees hired by overseas offices and the total number of our overseas employees stood
at 1,366, and female employees were 1,088, with the figures on an upward trend. In addition, we are striving to reduce
conflicts within our organization by holding meetings and forums for each rank since the number of entry-level and
experienced employees entering our organization has significantly increased for the past three years. They will promote
mutually-beneficial practices through communication and cooperation. Notably, we conducted research to see how
our employees treat and accept the colleagues with various background in order to improve the corporate culture and
strengthen our organizational capabilities in 2011.
>�Workforce Diversity
COMMITMENT TO SUSTAINABILITY
Unit: KRW in ten thousands
Workforce breakdown (Domestic vs. Overseas)
4,680
2009
5,882
2010
7,620
2011
total employees
Headquarters
Overseas Offices
6,407(84%)
1,213(16%)
* As of the end of 2011* This number includes all employees in the headquarters and overseas offices
Unit: People Unit: People
636
2009
828
2010
1,088
2011
Female employees
865
2009
1,021
2010
1,366
2011
overseas employees
18.5%17.4% 17.9%
13.6%14.1% 14.3%
Unit: People Unit: People
Value Leadership job Skills Global Business
General
Managers
(Deputy)
Managers
Assistant M
anagersStaff
Ethics & Compliance Environment, Health & Safety• Employees & Workplace Supply Chain Local Community
CoMMitMeNt to sustAiNAbiLitY
SAMSUNG ENGINEERINGSUSTAINABILITY REPORT
42 43
We are committed to a balance between work and personal life for all staff. To make this happen, we are improving our working environment and providing a wide range of employee benefits.
Promoting a Work and life Balance
employee benefits
employee benefits | We are providing diverse fringe
benefits, including support for leisure activities, health
insurance and financial assistance for family events, to help
our staff concentrate on their work better. Notably, we
employed a selective benefits program, where employees
can choose the benefits they need in 2011. The new program
was adopted by reflecting employees’ feedback from the
Industrial Relations Council that the effects of the fringe
benefits may vary depending on the circumstances of
individual employees.
Retirement pension plans | We are running a retirement
pension plan to help our employees live on a stable income
stream after retirement in accordance with Korea’s Employee
Retirement Benefit Security Act. We offer a defined-benefit
type of pension plan, which has an accumulated capital of
KRW 86.7 billion, managed by Samsung Life Insurance.
Assistance for Maternity Care | We are striving to protect
maternity care in many ways so as to help raise the low birth
rate, one of today’s hottest social issues in Korea, and allow
female employees to maintain a balance between work and
family. If a female employee gets pregnant and reports it via
our internal maternity protection system, her department
manager will adjust what she has to do at work according to
her conditions and make sure that she has regular prenatal
tests. After she returns to work following the maternity leave
spanning 90 days before and after childbirth, she can use an
in-house Maternity Room, be given priority in getting her
child admitted to the company daycare center, and use a
flexible work schedule.
Realization of Great Workplace
employee satisfaction survey | Every employee has the
chance to respond to an annual employee satisfaction
survey as part of our efforts to enhance our organizational
strength and provide a better working environment for our
employees. The survey is designed to measure how much
individuals and teams understand and focus on work and
how effectively they communicate with each other. We take
measures to resolve problems, if there are any, based on the
results. In 2011, we developed a questionnaire reflecting
our specific circumstances and used it to measure what
our employees thought about their working environment.
Around 63.5 percent participated and the overall satisfaction
rate was 74.7. Regarding questions about leadership, general
tasks, and the overall organization, the scores were high, but
it was found that we needed to do something to increase
work efficiency, enhance system integration and define
corporate values more specifically to meet the needs of
our growing organization. We will analyze the results of the
survey and do what is needed to improve how we work at
the department level as well as the company-wide level.
in-house Counseling Center | We are running an in-
house counseling center with four regular qualified
counselors for our employees and their family members.
The center was opened in 2010 and provides around 200
counseling sessions every month as of 2012. The counseling
is conducted via face-to-face meeting, online counseling,
email, SMS and phone calls. The center helps reduce stress at
work and make communication and cooperation between
employees more effective by administering psychological
tests to our employees and departments, providing feedback
for them and offering department-level programs designed
to improve communication among team members. Notably,
in 2011, the center carried out a program called “Counselors
Visit You” in overseas offices and 9 domestic and overseas
construction sites (India, UAE and Algeria, etc.). In the
program, the counselors offered customized counseling
services through face-to-face meetings, which received a
tremendous response. In addition, the counseling center
provides parenting and family advice to give our employees
a sense of comfort and security and help them have more
harmonious family lives. Going forward, we will enhance our
counseling services on treatable mental health conditions,
such as depression and mental disabilities, and make
counseling mandatory for employees who work at sites for a
long time or who are dispatched to sites at an older age.
Club Activities | We encourage our employees to join
clubs, at least one club per person, as part of our efforts
to promote internal communication and strengthen the
corporate culture. Currently, there are over 30 clubs, including
basketball teams and bands, involving 1,500 people. As our
workforce increases in size, we are providing more assistance
for club activities by adding more specific activities to the
club list, paying 80 percent of the club bills and making it
simpler to get a refund. More importantly, we are running
donation programs in association with club activities to make
the participants fulfill themselves. In 2012, we will develop
the donation programs into “talent donation” activities in
association with community outreach programs.
COMMITMENT TO SUSTAINABILITY
Activities of skin-scuba diving
Christmas concertorganized by the music club
• Employee Benefits
employeebenefits
other benefi ts
Medical checkups
support for
supp
ort f
orGro
up insurance medical bills
educat
ion
fees
cove
red by accident insurance
• Chil
dren
pre
scho
ol tu
ition
s• T
hree major diseases
• Chi
ldre
n sc
hool
tuiti
ons
• Dental expenses
• General medical expenses• Basic checkup for staff
• Comprehensive checkup for staff
• Meal allowances• Selective benefits
2011 employee benefits Key Figures
percentage of employees who work more than 1 year after returning to work from maternity leave
100 %
Accumulated capital of our retirement pension plan
86.7 KRW billion
Turnover rate*
2009 2010 2011
2.03%1.84%
2.35%
* Turover rate is based on the annual average number of full-time employees in headquarters.
( as of December 2011, defined-benefit type)
Ethics & Compliance Environment, Health & Safety• Employees & Workplace Supply Chain Local Community
CoMMitMeNt to sustAiNAbiLitY
SAMSUNG ENGINEERINGSUSTAINABILITY REPORT
44 45
operation of industrial Relations Council
industrial Relations Council (iRC) | We have established
a labor management council defined in the labor law in
order to improve employees’ welfare and put the company
on a sustainable footing by promoting engagement and
cooperation between the employer and employees. The
council, a representation of the employees, is helping to build
one of the best working environments in our industry, by
encouraging cooperation and a mutually beneficial corporate
culture based on trust and making the company share more of
the gains from growth with its employees. The representatives
of the IRC are elected by direct voting. Currently, twenty
representatives are working for the 18th H.U.G. IRC, which was
launched in April 2011, in several divisions, including Harmony,
Unique and GWP. The council is striving to realize its vision of
“creating a harmonious corporate culture” in many ways. They
are helping the management and employees feel connected
with each other by making visits to domestic and overseas
construction sites, holding diverse types of labor-management
meetings and forums once or more every month, making the
new headquarters building more comfortable for employees,
and running a program to enhance business sensibilities.
promoting Labor-Management Communication | We
hold regular labor-management council meetings involving
labor representatives and the same number of management
representatives. At the meetings, labor representatives share
employees’ feedback on major policies with the management
so that something can be done to improve the working
environment. In particular, the top management, including the
CEO, CFO meet with labor representatives on a regular basis
• Vision and Mission of the Industrial Relations Council
In 2011, we held the “Women’s Leadership Conference” to share ideas about the desired roles of women as leaders and promote
communication between female employees. In the event, the activities of the IRC for Woman were presented and an external leadership
instructor and a specialized counselor were invited to give a special lecture about how to become a successful female leader to the
audience. The conference also served as a valuable opportunity for networking.
>�Women’s Leadership Conference
MISSION
VisioN seCL DNA Creator Creating a harmonious corporate culture
harmonyPromote a harmonious
corporate culture through autonomous
communication
unique
Unlock your potential in diversity
GWp
Realize your dream as a professional
STRATEGY
Affinity / Relationship / Communication
A R
C
TrendMotivation
Global
GWp
Great Work place
Improve company
rules
Move into the new
headquarters building
WLB & sensibility programs
Shared growth
programs
COMMITMENT TO SUSTAINABILITY
18th h.u.G. iRC (industrial Relations Council)
our employee at samsung engineering india
Number of participants receiving education about the corporate culture
Training forcorporate culture
Training for corporate competence enhancement
* The education about the corporate culture includes classes focused on managing diversity and building communication to prevent discrimination regardless of gender, nationality, status and age.
to resolve complaints from employees and reflect their ideas
when revising main company policies and rules. These efforts
are helping to protect the rights of the employees.
strengthening the Corporate Culture and Addressing employees’ Complaints
sharing the Corporate Culture | We prohibit forced labor
and child labor at all of our work sites, domestic and overseas,
in accordance with Korea’s labor-related laws and the local
regulations of the countries where we operate. All newly-hired
employees, whether they are entry-level or experienced, are
required to take a two-hour class at an orientation about the
corporate culture pursuing shared growth and tolerance of
diversity regardless of region, nationality, gender, age, race and
religion. As for existing employees, they learn how to embrace
diversity, communicate and cooperate with colleagues, prevent
corruption and avoid discrimination through corporate culture
promotion programs. Also, all employees are educated about
gender equality and sexual harassment prevention every year
and can file a complaint via the IRC for Woman and counseling
center if there are any issues involving sexual discrimination or
harassment. In 2011, there were no reported cases of forced
labor, child labor, sexual harassment or sexual discrimination.
Addressing employees’ Complaints | We have established
an online and offline process to resolve complaints from
employees. If any of the employees finds unreasonable practices
or inconveniences, they can ask for a meeting with their
department leader or post an article via GRID-Q, the internal real-
time reporting system or the bulletin board or the anonymous
reporting function within the website of the IRC. If there are any
issues regarding human rights violations, personal worries or
matters that need to be kept confidential, we make sure that
internal specialized counselors have private meetings with the
reporter to address the issue. Our complaint resolution system is
working effectively to help create a better working environment
and build trust between employees and the company.
beyond Work place
3,475
2010
4,170
2011
1,541
2010
1,910
2011
Unit: People Unit: People
Ethics & Compliance Environment, Health & Safety• Employees & Workplace Supply Chain Local Community
CoMMitMeNt to sustAiNAbiLitY
46 47
Design Vendor subcontractor
F/S* Commissioning O&M**engineering procurement Construction
* F/S: Feasibility Study ** O&M: Operation & Maintenance
seGA (samsung engineering Global Alliance)
A total of 5,113 registered vendors, 257 seGA vendors
Category NameSEGA
Korea (Seongjohwe) India China Others Total
Static 862 32 (22) 10 8 12 62
Rotating & package 967 36 (15) 3 1 34 74
Piping 849 31 (19) 5 - 12 48
Electrical & instruments 1,005 36 (21) 9 2 13 60
Logistics & inspection 1,430 12 (8) 1 - - 13
Total 5,113 147 (85) 28 11 71 257
seGA: 20% of vendors ordered, 23% of the amount ordered
1,300 vendors
SEGA*
KRW 4.3 trillion5%
5%
87%
3%
KRW 1,000 billion(23%)257 (20%)
Number ofvendors ordered
Amount ofannual order
Countries of SEGA vendors ordered
Korea Europe North America Others
COMMITMENT TO SUSTAINABILITY
suPPly CHainCoMMitMeNt to sustAiNAbiLitY
* The number of registered SEGA vendors and the amount of orders are as of December 2011.
MANAGeMeNt pRiNCipLes
We maintain an integrated supply chain system to ensure fairness in transactions with our partners and share gains
from growth with them. We will strive to enhance the “shared growth” system by allowing our partners to communicate
with us more effectively.
oRGANizAtioN iN ChARGe
• Audit • Compliance
• Outsourcing Planning • Construction Planning • Construction Technology
• Energy Engineering Support • Hydrocarbon Engineering Support • I&I Engineering Support
GoALs
DisCLosuRe oN MANAGeMeNt AppRoACh
Strengthening our global partnership
network
Establishing fair purchasing practices
Promoting “shared growth” and
communication
Global Network of our partners
Our partners are made up of design companies for engineering
design, vendors for procurement and subcontractors for
construction. Each department chooses and registers a company
as a partner according to criteria, such as expertise, overall
competencies, environmental awareness and ethical conduct.
A company registered as a partner tends to have a long-term
relationship with us.
Design for engineering | We have a total of 183 registered
design partners: 81 companies in the hydrocarbon sector and
102 companies in the non-hydrocarbon sectors, such as power,
metallurgy, industrial facilities, and water treatment. Moreover, we
are running Gisuhwe, an association of design companies, for 24
such companies. We are well aware that the development of our
design partners has a direct impact on the quality of plants we
make, so we are providing the partners with diverse assistance,
such as know-how transfer.
Vendors for procurement | We have 5,000 registered vendors
and since 1994, we have run Seongjohwe, an association of
vendors, consisting of Korean ones. In 2008, we began to run SEGA
(Samsung Engineering Global Alliance) to strengthen our global
network. We select SEGA member companies based on impartial
assessment and help them remain loyal to us with a wide range of
incentives. We analyze the needs of SEGA members and use the
results to explore ways to make inroads into new markets along
with SEGA members and develop training programs for them.
subcontractors for Construction | For a company which seeks
to carry out executing projects, especially in foreign countries,
selecting appropriate subcontractors is of great importance
to complete the project successfully. We have established the
Samsung Contractors Association for domestic projects and the
GPN (Global Partner Networking) for overseas projects to discover
competent subcontractors and build long-term partnerships with
them. We will use the GPN to set up a database of region-specific
and product-specific subcontractor information and analyze the
performance of subcontractors to select them strategically. At
the same time, the subcontractors will be able to use the GPN to
communicate with us by posting their demands to the system
and having discussions with us.
Global sourcing network Based on fair trade and shared Growth
We are committed to upgrading our global sourcing network to increase our business competencies, preventing collusion and corruption, and allowing all project participants to gain a fair share of growth based on transparent trade and principled business ethics.
SAMSUNG ENGINEERINGSUSTAINABILITY REPORT
48 49
Fair trade
We select new partners to add to our official partner list
carefully according to criteria, such as environmental
awareness and ethical conduct as well as expertise and overall
competences.
Corruption prevention | As more nations are stepping up
anti-corruption measures, we made it mandatory for our
partners to sign and submit the anti-corruption pledge and for
all proposal participants to attend classes about non-disclosure
requirements and the prevention of collusion and corruption
in 2011. In addition, our Audit Department and Compliance
Department have a team of dedicated instructors for each
rank to offer training programs for corporate competency
enhancement and compliance to entry-level employees,
experienced employees, employees to be dispatched to
overseas work sites, domestic and overseas employees for
construction sites and global offices.
Fair trade | We have introduced a fair trade compliance
agreement to enhance commitment to compliance with
regulations and ethical practices and are implementing specific
action plans accordingly. Moreover, we are striving to create
more transparent and equal partnerships by sticking to the
principle of shared growth throughout our operations of
choosing partners and managing processes. In addition, we are
imposing strict restrictions and requirements on areas possibly
subject to unfairness in bidding and selecting subcontractors.
Furthermore, we are running a fair trade system to evaluate our
partners regularly in a fair and objective manner and identify
unfair practices and resolve problems, if any. This system allows
us to help our partners improve the quality of their products
and enhance operational efficiency.
Win-win partnership
We help our Korean partners move into foreign markets with
us to build long-term partnerships with them. We offer them
well-organized assistance for financing, training and know-how
transfer, to allow them to enhance their competitiveness and
capture a fair share of gains from growth.
expanding overseas with partners | We help our Korean
partners make inroads into foreign markets with us. To make
this happen, we held a conference to explain how to penetrate
overseas markets and collect ideas from our partners in 2009.
We asked 66 participants about the countries in which they
would like to operate and helped them set up specific plans to
receive orders from foreign countries and operate in emerging
markets with significant growth potential. So far, we have
worked with several of our partners in Saudi Arabia and the UAE.
better payment Conditions | We began to make all payments
in cash to our partners based on the progress of a project.
Moreover, the payment term has been reduced from 15 days to
10 days.
Financial Assistance | We gave loans worth a total of KRW
2.05 billion with no interest for six months to five small and mid
sized cash-strapped partners. Also, we set up a shared growth
fund worth KRW 10.6 billion with a credit limit of KRW 31.8
billion and have lent a total of KRW 10.5 billion to 9 small and
mid sized partners with a 1% interest, which was lower than the
market interest rate, as of the end of January 2012.
support for education & training | We are helping our
partners improve their technological capabilities and increase
their corporate value by offering diverse education and training
programs. We held a total of 117 sessions of education about
the latest technology and best practices. We also offered online
training courses to 514 employees from our partners.
technical Know-how transfer | We are striving to provide our
partners with technical support, which they need most. We
offered training programs and technical support for the latest
technology, such as 3D modeling, to our partners to help them
implement operational innovations and enhance technological
capabilities. In addition, we assisted 28 of our partners in
earning ISO 9001 certification, an ISO standard for a quality
management system. Each of the certifications is reported to
have generated KRW 9.05 million, including a direct cost of
KRW 4.25 million, in cost savings.
2011 supply Chain Key Figures
Received the Good Company Award for fair trade and shared growth in October 2011
Value of Shared Growth Fund KRW 10.6 billion
(As of January 2012)
The number of partners assisted in obtaining ISO 9001 certification 28 partnersiso
Seminar on market trends of raw materials and equipments in june 2010
Signing ceremony of the fair trade agreement for the win-win cooperation and subcontracting in March 2010
Training about quality control for onsite super-visors of our subcontractors in April 2011
Communication Channels Frequency Tasks
Design companyMeeting of Gisuhwe Once a year Network and exchange information
Section meetings by disciplines Every quarter Discuss current matters at section level and exchange information
Vendor
General Meeting of SEGA Korea Seongjohwe
Once a yearShare operational organizations of SEGA Korea Seongjohwe and meet with the CEO
Section Meeting of Seongjohwe Any time Share the performance results of each section
Steering Committee of SeongjohweFour times a
yearDiscuss current matters of Seongjohwe and share the performance results of each section
Seminar on market trends of raw materials and equipments
Once a yearEliminate project risks accompanying fast changing market conditions and share expected market trends of raw materials and equipment
Subcontractor
Investigation of partners’ family satisfaction index (FSI)
Once a year
Assess the processes of choosing subcontractors, making agreements, managing construction, controlling quality and hazards, paying the bills, developing trade practices, and give advice on mutually beneficial cooperation
Meetings Any time Meetings by disciplines
COMMITMENT TO SUSTAINABILITY
We hold meetings with 'Gisuhwe', an association of design companies, 'Seongjohwe', an association of vendors, and 'Seong-
geonhwe', an association of subcontractors and collect feedback through surveys on a regular basis. Going forward, we will
strengthen communication with overseas partners through our global network.
�>�Communication with partners
SAMSUNG ENGINEERINGSUSTAINABILITY REPORT
Ethics & Compliance Environment, Health & Safety Employees & Workplace• Supply Chain Local Community
CoMMitMeNt to sustAiNAbiLitY
Contributing to the Development of local Communities through Business
We are helping local communities we operate in to grow and prosper by making the communities part of our business activities.
Global operations
We are a global corporation operating in diverse countries.
We contribute to the development of local communities we
operate in by hiring local employees and making purchases
from local firms.
By December 2011, we had set up 20 global offices in 30
countries where we have projects, and the number of locally
hired employees was 1,213, or 16 percent of all our employees.
We are making as many purchases as possible from local
companies to reduce cost and help boost the local economy.
We are aiming to exceed USD 5 billion in orders from overseas
offices, 5,800 employees hired by overseas operations (23
percent of our workforce) and 40-percent share of design
tasks by 2020. To achieve these goals, we will operate regional
headquarters in four major regions: the Middle East, India,
South East Asia and North America and multi-functional offices
with high marketing and resource capabilities in other regions.
Global operation support Department Created | We
established Samsung Engineering India (SEI), our first global
office in 2006 and have since strengthened our global network.
In July 2011, we created the Global Operation Support
Department at the headquarters in Korea to help make major
inroads into foreign markets through effective localization
strategies.
We will follow our “local content strategy” to purchase and
use resources efficiently, diversify our channels of recruitment
by making the most of our foreign EPC Center Pool through
regional EPC offices. Moreover, we will expand our global
outsourcing to add more value to our products and services.
50 51
• Functions of Global Offices
Functions of Offices Number of Offices Countries
Multi-functional(Marketing, Support for operations, IPO, EPC)
8 Saudi Arabia, India, USA, Mexico, Algeria, Thailand, UAE, China
Marketing 6 Vietnam, Japan, Brazil, Venezuela, Indonesia, Uzbekistan
Business Support 3 Malaysia, Hungary, Trinidad & Tobago
Procurement 1 Italy
Financing 2 UK, Singapore
Total 20
2011 Global operation Key Figures
30 countriesNumber of countrieswe operate in
20 offices
1,213 people
Global operations
Employees atglobal operations
COMMITMENT TO SUSTAINABILITY
loCal CommunityCoMMitMeNt to sustAiNAbiLitY
MANAGeMeNt pRiNCipLes
We are committed to helping local communities where we operate to grow and prosper by hiring local employees,
making purchases from local companies and investing in the infrastructure while engaging in community outreach
activities. We will continue to fulfill our corporate social responsibilities by encouraging more employees to participate
in community volunteer activities and maintaining close relationships with local organizations in need as part of our
global social contribution initiatives.
oRGANizAtioN iN ChARGe
• Global Operation Support • Human Resource Management • PR/IR
GoALs
DisCLosuRe oN MANAGeMeNt AppRoACh
Systematic management of
global offices
Expanding local purchasing and
employment
Expanding contributions to local
communities
SAMSUNG ENGINEERINGSUSTAINABILITY REPORT
70%86%26%
58%41%
usAKorea
uAe
Malaysiaindia
saudi Arabia
We made 32 percent of all our purchases in the markets where we operate in 2011.*
Our total spending on procurement of materials for that year was more than KRW 1.35 trillion.
>� 2011 Local procurement Results
* The ratio of local procurement to total procurement of materials in major markets: Countries whose local procurement ratio is 10% or lower, such as China, Thailand, Malaysia and Algeria, are not included.
total Value of Local procurement KRW 1.35 trillion
Local to total procurement Ratio 32%
52 53
Localized Approach
hiring Local employees | We recruited a wide range of
employees from the countries where we operate in 2011
to help create a virtuous cycle in the local economy. We
are focused on expanding our global operations by hiring
employees from the region. Our goal is to increase the total
number of staffs employed by our overseas offices from 1,213
now to 3,600 by 2015.
We will not just increase local recruitment but also strive to
hire and retain more talented local employees as supervisors
for their workplaces so as to enhance operational efficiency.
Moreover, we will make the most of our staff rotation program
designed to deploy employees to understaffed workplaces to
nurture talented overseas employees at the headquarters in
Korea. We are increasing local recruitment every year to create
jobs and stimulate the local economy.
In addition, we are working to strengthen our local capabilities
by maintaining the ratio of locally-hired supervisors at a
reasonable 17 to 20 percent of the workforce in the region.
In Saudi Arabia, we are preferentially employing people with
disabilities, providing internship opportunities for college
students, and running a workplace tour program. In 2010,
we employed 30 people with disabilities in Saudi Arabia.
Also we are fully complying with the “Saudization Policy,” a
mandatory labor policy from the Ministry of Labor of Saudi
Arabia and have recently received the Best Company Award
for Saudization. We exceeded the NITAQAT requirement
ratio of 7 percent to achieve 11.7 percent in December 2011.
Furthermore, we employ many local workers or those from
other countries when carrying out overseas projects.
Finding and Cooperating with Local Companies | We
conduct an in-depth investigation of a country before we
decide to move into the market. We classify target countries
into a strategically important group and a general group
depending on how much they matter to our business
and look for local constructors and equipment makers
with a competitive advantage, which we can partner with
while estimating the sales potential of the markets. We are
striving to work with as many local companies as possible to
contribute to the development of local economy.
Managing impact on Local Community | Before we launch
construction of a project, we hold public hearings to minimize
its negative impacts on the local community. If any problems
are identified during public hearings, our project managers
find solutions following the internal procedure.
17%
Contributing to the Local Community - sNtV
Completion of sNtV | We held an opening ceremony for
Samsung Naffora Techno Valley (SNTV), a multi-functional
office building in Saudi Arabia. We began to construct the
building with the investment of around USD 100 million
in September 2009 and completed it after 21 months. The
building is located within the Jubail Industrial Complex
in Saudi Arabia, where we are carrying out four projects,
including the construction of refinery facilities.
Functions of sNtV | The SNTV, covering 50,000 m2 of the
site area and 38,000 m2 of the gross floor area, consists of
4 facilities including engineering, safety and sports center
as well as accommodations. The building will be used not
just to carry out its own EPC projects but also to recruit
local residents, offer training courses and provide voluntary
community services. The SNTV is designed to integrate
the functions of Samsung Saudi Arabia (SSA), our former
subsidiary in the nation and Samsung EPC (SEPC), a regional
office built to conduct local projects. Saudi Arabia is our
biggest market, where we received orders worth USD 4.7
billion in 2011. We will use the SNTV to provide permanent
offices and quality employee benefits, such as decent
accommodations, for our employees and to help our clients
achieve significant growth. In addition, the building will
serve not only as our regional headquarters for our biggest
market but as a cornerstone on which we can develop
our partnership with Saudi Arabia from business level to
economic, social and cultural level.
Local EconomyHire and train local employees
Local EnvironmentPublic awareness about
environmental protection
• Provide safety experience education for the general public
• Open sport facilities to people on holidays• Voluntary community services by employees, such as blood donation
• Hire and train Saudi employees• Offer safety training programs
• Hold a writing competition about environmental protection
• Support environmental protection activities through sisterhood relationships with local schools
We use the SNTV to help Saudi Arabia develop its economy, safety and welfare in diverse ways. The engineering center offers
offices for our client so that they can promote communication in and help hire and nurture local employees. The safety
training center is designed to raise the employees' awareness about safety and reduce industrial accidents by providing safety
education programs from the Occupational Safety and Health Administration. Finally, the sports center is provided to local
community as a sport and educational facility. The SNTV will be donated to the local community of Al-Jubail in thirty years.
We hope the building will pave the way for us to grow as a “Great Company” that is committed to the development of the
local community.
�>���Contributions of sNtV to the Local Community
COMMITMENT TO SUSTAINABILITY
Local CommunityContribute to the development of
the local community
The whole view of SNTV
Linking our business activities
with local contribution
programs
SAMSUNG ENGINEERINGSUSTAINABILITY REPORT
Ethics & Compliance Environment, Health & Safety Employees & Workplace Supply Chain• Local Community
CoMMitMeNt to sustAiNAbiLitY
'Kumpooh', environmental education program
We launched 'Kumpooh', the environmental education
program for schools in our neighborhood in 1996. At first, it
was part of voluntary community services conducted by a
department. The program offers online content and offline
activity programs about environmental protection for children.
This is one of our representative social contribution activities.
- Korean Website: www.e-gen.co.kr
- English Website: www.eco-generation.org
integrated online education site on environmental
protection | Children can have access to a wide range of
multimedia learning resources, such as Flash content, video files
games, stories and quizzes about the environment. The website
is available in two languages: Korean and English.
one -Day teachers’ Classes about environmental
protection | Our employees give specialized classes about
the environment, such as water treatment and energy, to
elementary and middle-school students. In addition, we provide
activity programs for experiments and quiz competitions. In
2011, we began to manage a team of employee supporters and
dispatch them to schools as one-day teachers to raise children’s
awareness about environmental protection.
uCC & english essay Competitions about environmental
preservation | We have held UCC competitions since 2007 and
organized English essay competitions via Eco-generation, our
English website since 2008 as part of our efforts to promote
environmental awareness among children. We will expand
the events to the 'Global Environment Forum for Teenagers', a
combination of competitions and lectures from 2012.
Mou for educational Donation signed | We signed a
memorandum of understanding to promote educational
donations with Korea’s Ministry of Education, Science and
Technology in August 2011. We are running online and offline
education programs in 'Kumpooh' about several topics, such
as the environment and green growth by using our own
technology and specialized staff. The MOU will allow us to
expand our existing activities.
Mou signed with uNep headquarters | In September
2011, we signed a memorandum of understanding to jointly
operate an environment networking platform for children
with the United Nations Environment Programme in Tunza,
Indonesia, where the International Children's Conference on the
Environment was held. The children around the world can share
diverse content on the environment and engage in community
activities via the online platform and communicate with each
other in real-time through SNS functions.
54 55
social Contributions and investment in the Community
We reaffirm our commitment to fulfilling our social corporate responsibilities through social contribution in Korea and overseas.
Creating Future Value through social Contribution Activities
We have engaged in a wide range of social contribution
activities based on our business activities in cooperation
with our global offices. We have reaffirmed our commitment
to responsibilities as a global corporate citizen by building
schools of hope in foreign countries and provided urgent
relief efforts for Haiti and laid the foundation to become a
socially responsible global corporate citizen by participating
in voluntary community services in major markets. Moreover,
we are leading the efforts to make the world a better place to
live in by engaging in diverse voluntary community services
and building sisterhood relationships with rural areas and other
local communities.
• Our Social Contribution Activities
• Building libraries in strategically important countries
• Voluntary community services in foreign countries
• Donation of talent, knowledge and experience
• Local public services in Gangdong-gu
• Giving festival
• Family public service activities of families
Creating a future value through
social contribution activities
Promoting talent donation and giving activities
Creating shared value through marketing strategies and association
Voluntary community services associated with the local community
Employees have greater pride in their company through social contribution activities
We engaged in more voluntary community services and collected more donations from our employees in 2011. The donations and direct
public services were focused on educational programs, and we also gave high priority to assistance for medical institutions and rural areas.
Category 2009 2010 2011
Donation 3,774,987 4,155,016 4,687,897
Direct public services 167,845 303,078 753,796
Fund-raising among our employees
50,774 72,741 109,908
Total 3,993,606 4,530,835 5,551,601
82,887 hours
Average time spent per person on participating in voluntary community services
Total time spent on participating in voluntary community services
12.1 hours
spending on social Contributions (unit: KRW 1,000)
� INTERVIEW
priceless experiences with 'Kumpooh'
“Kumpooh was a friend as well as a teacher to me.”
Hyo-Seon Koh, a volunteer for 'Kumpooh' summer camp
I joined 'Kumpooh' when I was an elementary school student and
have served as its member for over ten years. Though I used to live in
Jeju Island, I have been able to join the activities via the online website.
What I remember most is that I presented a speech introducing 'Kum-
pooh' at the Asian Children’s Conference on the Environment in Japan
in 2007. I hope more children will learn more about how to protect the
environment and have valuable experiences at 'Kumpooh'. (Hyo-Seon
Koh, student, 24)
2011 social Contributions Key Figures
COMMITMENT TO SUSTAINABILITY
'Kumpooh' summer camp
Composition of social Contributions in 2011
38.9%
57.3%
20.0%
2.7%
20.0%
29.7%
16.6%
3.2%
6.0%
5.6%
Donations Direct public services
Educational Institutions: KRW 1.8 billion
Environmental Institutions:KRW 280 million
'Kumpooh': KRW 430 million
Libraries: KRW 150 million
Assistance for Rural Areas: KRW 150 million
Others: KRW 20 million
Medical Institutions: KRW 1.4 billion
Culture: KRW 780 million
Social Welfare: KRW 150 million
Others: KRW 260 million
SAMSUNG ENGINEERINGSUSTAINABILITY REPORT
Ethics & Compliance Environment, Health & Safety Employees & Workplace Supply Chain• Local Community
CoMMitMeNt to sustAiNAbiLitY
56 57
social Contributions in Korea
We are committed to growing along with local communities
where we operate by fulfi l l ing our corporate social
responsibilities. We will continue this commitment to help
shape a brighter future.
sisterhood Relationships with Rural Communities | We
have sisterhood relationships with nine villages in Korea. We
help them with farm work, hold direct markets for agricultural
products, invite local residents to take a tour of Seoul, and
offer assistance for village events. For example, our employees
regularly visit the villages to build close relationships with local
residents by helping them do farm work, including collecting
chestnuts and picking grapes and pears, in peak season.
Moreover, we provide medical examinations for residents in
sister villages with poor medical systems and donate thermal
underwear for the elderly so that they can keep warm in
winter. Meanwhile, we buy agricultural products from the
direct markets to help farm village create more profit and
donate the products to local welfare centers.
talent Donation | We are running a specialized volunteerism
program designed to allow our employees to volunteer their
expertise to less experienced and younger co-workers to
upgrade their professionalism as part of our commitment
to nurturing talent. For this program, we hold workshops for
volunteerism leaders, encourage our employees to participate
in more talent donation programs and do various activities in
association with clubs.
Voluntary Community services in Connection with Local
Communities | We sponsor community welfare organizations
in our neighborhood and provide voluntary services on a
regular basis to maintain close relationships with them. In
addition, our technicians visit low-income families to maintain
and repair their home appliances and work with community
organizations to provide specialized voluntary services.
We are also providing assistance and voluntary work for
events in Gangdong-gu, a home to our headquarters for the
development of local community.
➊ Voluntary services at Samsung Engineering India (SEI) ➋ Digging up potatoes as voluntary services ➌ Voluntary services at the School of Hope in Vietnam ➍ 'Kumpooh' workshop for the UNEP International Children’s Conference on the Environment➎ Employees’ voluntary services in the village of Mirinae, a rural community
➍
➌
➎
➋➊
COMMITMENT TO SUSTAINABILITY
social Contributions around the World
We donate part of our profits we earn in overseas markets to
the local communities we operate in.
school of hope in Vietnam | We built a 'School of Hope' in
Vietnam with donations from our employees and company's
financial assistance. The school is designed to provide
educational programs for preschoolers but it is also offering
health and medical services for local residents. We are providing
educational services for infants in Ky Tho Bac, a rural village
with poor education. We are also offering health education and
medical services for local residents, including pregnant women.
industry-university Collaboration and Voluntary Community
services in Mexico | We are engaged in projects in Mexico, with
dedication to serving the local community we operate in. We
consider ourselves a permanent member of the local community,
not as a temporary visitor. So we are finding organizations in need
and providing assistance for them under the slogan of “Samsung,
Buen Amigo” (“Samsung, Good Friend!”). Furthermore, we have
built a strong collaborative relationship with Universidad de
Colima, a university in the state of Colima, and offer its students
internships to find talented employees and teach them job
skills. In addition, we donated face masks to local organizations
when swine flu hit the nation, and are doing voluntary work at
orphanages and nursing homes.
Mentoring and other support for schools in poor Regions
in india | Our Indian office is providing school uniforms and
supplies for students from low-income regions in its “Corporate
Social Mentoring” program and offering mentoring services
to help create a intimate relationship with them. In 2010, we
provided personal computers and PC education programs
for elementary school students from low-income families
attending the Good Samaritans School in Madanpur Khadar.
Also, we invited 40 elementary school students to our Indian
office to take a tour of the offices to show them how engineers
work. In addition, we have done voluntary work at local
orphanages and sponsored sick children since 2006.
building Libraries in underdeveloped Nations | Given the
fact that engineering is a knowledge-based industry, we have
built libraries in strategically important nations since 2011. This
is part of our commitment to helping build a better future
by investing in nurturing talent in client nations. This year, we
will build libraries in India. This will be our first step towards
remodeling decrepit schools and community centers in rural
regions into new libraries for children and local residents.
Voluntary community services in Mexico
SAMSUNG ENGINEERINGSUSTAINABILITY REPORT
Ethics & Compliance Environment, Health & Safety Employees & Workplace Supply Chain• Local Community
CoMMitMeNt to sustAiNAbiLitY
58 59
Plant enGineerinG anD our liVes
A sustainable future for the next generations will be ensured when limited resources of the earth are more effectively used through cutting-edge plant engineering technologies that prevent environmental impacts and improve energy efficiency. Based on know-how, experiences and insight accumulated for 42 years, we at Samsung Engineering are committed to providing optimal engineering solutions, thereby becoming a global leading plant engineering company that contributes to the sustainability of mankind and environment.
From the manufacturing of small plastic bottles with clean water that we drink every morning to the oil refining to power cars and airplanes for our journey, the plant engineering industry is closely connected with all of our lives.
energy plant
Refinery and gas plant separates and produces a variety of oils and
gases suitable for their uses from crude oil. And, the energy sources
are generally used in a wide range of our lives such as product
production, flight, driving, and commercial and residential facilities.
petrochemical plant
About 70% of our body is made of water, while
petrochemical products account for 70% of our daily
necessities. Petrochemical plants produce raw materials
for the production of our daily necessities by using basic
petrochemicals cracked in the refining process. These raw
materials are used in a variety of products such as vehicles,
cell phones and clothes.
power plant
Power plant generates and supplies electricity that is necessary for
our lives. The electric energy makes it possible for us to do a lot of
things that have been not feasible by other energy sources.
Environmental plant plays a major role in preventing
environmental pollution through the treatment of wastewater,
seawater desalination, incineration, landfill, reduction of
greenhouse gas emissions and recovery of soil pollution.
To maintain a clean environment along with industrial
development is valuable and essential for our next generations.
environmental plant
Industrial plant encompasses a wide range of facilities to
support basic industries and manufacturing such as roads,
railways, sports complexes, logistics bases, hotels and tire
factories, which are essential for our bountiful lives.
industrial Facilities plant
Metallurgy plant
Mineral resources are transformed into various metallic materials to make it easier
to be manufactured through the metallurgy plant. Moreover, metallic materials are
used in building facilities and manufacturing products such as vehicles and home
appliances.
SAMSUNG ENGINEERINGSUSTAINABILITY REPORT
64
samsunG enGineerinG SUSTAINABILITY REPORT
performance summary
eConomiC Data
Income Statement*(Unit: KRW million)
2010 2011
Revenue 5,312,261 9,298,184
- Domestic 1,782,934 2,437,309
- Overseas 3,529,327 6,860,875
Cost of sales 4,501,886 8,219,469
Gross profits 810,375 1,078,715
Administrative expenses 381,769 459,730
Other operating income 188,058 334,535
Other operating expenses 204,410 236,254
Operating profit 412,254 717,266
Share of profit of associates - 36
Financial income 69,375 63,905
Financial costs 22,603 94,187
Profit before income tax 459,026 687,020
Income tax 122,403 172,494
Profit for the year 336,623 514,526
* These financial statements are prepared on a consolidated basis and in accordance with the KIFRS standards.
Balance Sheet*(Unit: KRW million)
2010 2011
Total assets 3,534,863 5,188,615
Current assets 2,831,725 4,156,825
- Cash and cash equivalents 408,701 560,018
- Other current assets 2,423,024 3,596,807
Non-current assets 703,138 1,031,790
- Tangible and intangible assets 491,535 734,482
- Other non-current assets 211,603 297,308
Total liabilities 2,578,050 3,875,258
Current liabilities 2,404,525 3,644,841
Non-current liabilities 173,525 230,417
Total equity 956,813 1,313,357
Capital stock 200,000 200,000
Consolidated surplus 56,624 56,624
Retained earnings 937,816 1,358,353
Other reserve △197,489 △264,338
Non-controlling interest △40,138 △37,282
Total liabilities and equity 3,534,863 5,188,615
* These financial statements are prepared on a consolidated basis and in accordance with the KIFRS standards.
61SAMSUNG ENGINEERINGSUSTAINABILITY REPORT
enVironmental Data
health & safety
2010 2011Total time of exposure to work (Unit: MH) 58,797,318 132,163,393
Industrial accident rate: domestic-converted industrial accident rate* (Unit: %) 0.12 0.18
Industrial accident rate: overseas-LTIR** 0.0034 0.0045
- Middle East 0 0.0070
- Asia 0.0139 0
- Africa 0 0
- America 0 0
* Converted industrial accident rate (%) = Number of converted industrial accident victims / number of regular workers X 100 Number of converted accident victims: weighted by the deaths (10 times that of those who were injured in industrial accidents) Number of regular workers: (Annual sales value for domestic construction projects X Labor cost rate) / (Average monthly salary of the construction industry X 12)** LTIR (Lost Time Incident Rate) = (Fatality + Lost Workday Case) / Manhour X 200,000
hse Communication & investment
2010 2011Value of spending on the environment (Unit: KRW million) 6,287 9,111
- Spending on the environment* 3,487 6,511
- Investment in the environment** 2,800 2,600
Number of participants in education about the environment (Unit: People) 7,616 60,555
Number of participants in education about safety (Unit: People) 676,153 1,196,727
* Spending on the environment: money spent on the efforts to protect the environment, treat waste and purchase environmentally-friendly products** Investment in the environment: money spent on research and development for environmentally-friendly purposes
Consumption & emissions
2010 2011Consumption of energy (Unit: GJ) 382,435 1,030,151
Direct energy consumption 322,323 931,790
- Gasoline 59,116 92,314
- Diesel 218,889 793,285
- Kerosene 16,690 3,792
- Heavy oil 15 1,185
- LNG 26,495 39,081
- LPG 1,118 2,133
Indirect energy consumption 60,112 98,361
Consumption of water (Unit: Ton) 438,265 711,290
- Tap water 378,097 396,250
- Underground water 12,788 192,725
- Surface water 4,500 23,413
- Recycled water 42,880 98,902
Greenhouse gas emissions* (Unit: tCO2e) 31,199 80,713
Direct emissions (Scope 1) 23,342 67,824
Indirect emissions (Scope 2) 7,857 12,889
Other emissions (Scope 3) 1,742,941 1,894,948
- Subcontractors (Construction equipments) 62,974 198,480
- Environmental facilities** 1,679,967 1,696,468
Amount of waste produced (Unit: Ton) 274,490 482,219
- Construction waste 232,213 475,244
- Industrial waste 30,071 3,430
- Specified waste 12,206 3,545
Amount of waste treated (Unit: Ton) 274,490 482,219
- Burned 172,416 318,322
- Landfilled 42,720 52,241
- Recycled 59,354 111,654
- Discharged to the sea 0 2
* The greenhouse gas emissions are a total amount including Scope 1 and Scope 2.** Environmental facilities include sewage and waste water treatment plant and waste incineration plant.
62 63PERFORMANCESUMMARY
SAMSUNG ENGINEERINGSUSTAINABILITY REPORT
soCial Data
ethics & Compliance training
2010 2011Hours of training about ethics and compliance (Unit: Hours) 4,740 6,201
- Corruption prevention 4,740 1,828
- Compliance - 4,373
Number of participants in offline training about ethics and compliance (Unit: People) 4,458 4,518
- Corruption prevention 4,458 1,475
- Compliance - 3,043
Number of participants in online training about ethics and compliance (Unit: People) 3,518 8,412
- Corruption prevention - 4,045
- Compliance 3,518 4,367
social Contribution
2010 2011Total value of spending on social contributions (Unit: KRW million) 4,531 5,551
Donations 4,155 4,688
- Educational Institutions 65 1,822
- Medical Institutions 1,501 1,390
- Culture 2,000 780
- Environmental Institutions 185 282
- Social welfare 120 151
- Others 284 263
Direct public services 303 753
- Libraries 0 150
- 'Kumpooh' 100 430
- Assistance for Rural Areas 122 150
- Others 81 23
Fund-raising by employees 73 110
Total hours spent on participating in voluntary services (Unit: Hours) 60,382 82,887
Average hours spent per person on participating in voluntary services* (Unit: Hours) 11.4 12.1
* The average hours spent per person on participating in voluntary services is based on the average number of employees in the headquarters in Korea, with our overseas offices excluded.
supply Chain
2010 2011Number of partners we helped to obtain ISO certification (Unit: Companies) - 28
Volume of the win-win fund (Unit: KRW million) - 106
Percentage of SEGA order value (Unit: %) 32 23
Workforce status
2010 2011Total number of employees* (Unit: People) 5,882 7,620
Gender
- Male 5,054 6,532
- Female 828 1,088
Region of birth
- Korea 4,831 6,184
- Asia Pacific (excl. Korea) 888 1,175
- Americas 109 172
- Middle East Asia 11 44
- Europe 23 24
- Africa 20 21
Employment status
- Permanent 3,791 4,645
- Fixed-term 1,224 1,762
- Overseas offices 867 1,213
Percentage of locally-hired managers (Unit: %) 18 17
* The total number of employees refers to all employees in the headquarters and overseas offices as of December of each year.
training & Career Development
2010 2011Total training hours (Unit: Hours) 800,265 927,770
- Value 154,722 291,852
- Job 393,617 312,459
- Leadership 89,101 53,241
- Global business 162,825 270,218
Average training hours per employees* (Unit: Hours) 151 135
Training expense per employee* (Unit: KRW in ten thousands) 169 197
Percentage of annual performance assessment (Unit: %) 100 100
* The average training hours and training expense per employee are based on the average annual training time in the headquarters in Korea, excluding data from overseas offices.
employee Welfare
2010 2011Ratio of entry-level employees' wages to the official minimum wage* (Unit: %) 191.8 191.7
Wage tables for men and women Same Same
Turnover rate** (Unit: %) 1.84 2.35
* The ratio of entry-level employees' wages to the official minimum wage is based on the data from the headquarters in Korea. Our overseas offices pay more than what is required by local laws.** Turnover rate is based on the annual average number of full-time employees in headquarters.
64 65PERFORMANCESUMMARY
SAMSUNG ENGINEERINGSUSTAINABILITY REPORT
Gri taBle
Indicator Description Page Status Remarks
Economic Performance Indicators
EC1 Direct economic value generated and distributed 61 ●EC2 Financial implications and other risks and opportunities for organization's activities due to climate change 21, 33 ●EC3 Coverage of organization's defined benefit plan obligations 42 ●EC4 Significant financial assistance received from governments - ○ Not Reported
EC5 Range of ratios of standard entry-level wages compared to local minimum wage at significant locations of operation
64 ◐
EC6 Policy, practices, and proportion of spending on locally-based suppliers at significant locations of operation 52 ●EC7 Process of hiring local workers preferably and percentages of locally-hired high-ranking managers 51, 64 ●
EC8 Development and impact of infrastructure investments and services provided primarily for public benefit through commercial, in-kind, or pro bono engagement
53-57 ●
EC9 Understanding and describing significant indirect economic impacts 16-21 ●Environmental Performance Indicators
EN1 Materials used by weight or volume - ○ Not Reported
EN2 Percentage of materials used that are recycled input materials 31 ◐
EN3 Direct energy consumption by primary energy source 32, 62 ●EN4 Indirect energy consumption by primary source 32, 62 ◐
EN5 Energy saved due to conservation and efficiency improvements - ○ Not Reported
EN6 Initiatives to provide energy-efficient or renewable energy based products and services, and reductions in energy requirements as a result of these initiatives or services more widely used
31 ◐
EN7 Initiatives to reduce indirect energy consumption and reductions achieved - ○ Not Reported
EN8 Total water withdrawal by source 32, 62 ◐
EN9 Water sources significantly affected by withdrawal of water 30 ● No water sources that are significantly affected are found
EN10 Percentage and total volume of water recycled and reused 62 ●
EN11Location and size of land owned, leased, managed in, or adjacent to protected areas and areas of high biodiversity managed by us
- ○ Not Reported
EN12 Description of significant impacts of activities, products, and services on biodiversity biological diversity 34 ◐
EN13Habitats protected or restored
34 ◐
EN14Strategies, current actions, and future plans for managing impacts on biodiversity
34 ●
EN15Number of IUCN Red List species and national conservation list species with habitats in areas affected by operations, by level of extinction risk and the government and living in the areas affected by our business activities
- ○ Not Reported
EN16 Total direct and indirect greenhouse gas emissions by weight 32-33, 62 ●EN17 Other relevant indirect greenhouse gas emissions by weight 33, 62 ●EN18 Initiatives to reduce greenhouse gas emissions and reductions achieved 21, 33 ●EN19 Emissions of ozone-depleting substances by weight - ○ Not Reported
EN20 NOx, SOx, and other significant air emissions by type and weight 18 ◐Practices of managing air pollutants are partially reported
EN21 Total water discharge by quality and destination 34 ◐
EN22 Total weight of waste by type and disposal method 62 ◐
EN23 Total number and volume of significant spills - ●
Prevented any major leaks from occurring by using toxic substance management guidelines for each project and no significant accident was occurred in 2011
EN24Weight of transported, imported, exported, or treated wastes deemed hazardous under the terms of the Basel Convention Annex I, II, III, and VIII Annex of Basel Convention
- ●
No case of transportation, import and export, treatment of wastes specified in provisions I,II,III,IV of the Annex of Basel Convention has occurred
EN25Name of water bodies significantly affected by the reporting organization's discharges of water and runoff protection states, protection levels and biological diversity value of related habitats
- ○ Not Reported
EN26 Initiatives to mitigate environmental impacts of products and services, and extent of impact mitigation20-21,30-31
●
Indicator Description Page Status Remarks
1. Strategy and Analysis
1.1 Statement from most senior decision-maker in organization 2-3 ● 1.2 Description of key impacts, risks, and opportunities 2-3, 12-13 ●
2. Organizational Profile
2.1 Name of organization - ● Samsung Engineering Co., Ltd.
2.2 Primary brands, products, and/or services Inside the cover ●
2.3 Operational structure 74 ●2.4 Location of organization's headquarters 72-73 ●
2.5 Location of overseas branch offices and sites Inside the cover, 72-73 ●
2.6 Nature of ownership and legal form 72-73, 74 ●
2.7 Markets served Inside the cover, 72-73 ●
2.8 Scale of the reporting organization 61, 74 ●
2.9 Significant changes during reporting period regarding size, structure, or ownership - ● No major change affecting decisions made by stakeholders during the reporting period
2.10 Awards received in reporting period 75 ●3. Report Parameters
3.1 Reporting period 1 ● 2011. 01 ~ 2011. 12
3.2 Date of most recent previous report (if any) - ● No previous publication
3.3 Reporting cycle (annual, biennial, etc.) 1 ● Every year
3.4 Contact point for questions regarding the report or its contents Back Cover ●3.5 Process for defining report content 6-9 ●3.6 Boundaries of report 1 ●3.7 State any specific limitations on the scope or boundary of report 1 ● All domestic and overseas workplaces, with project
3.8 Basis for reporting on comparability from period to period and/or betweenorganizations
1 ●
3.9 Data measurement techniques and bases of calculations for data, includingperformance index
- ● Comment separately if special attention is needed for a basis of measuring and calculating data
3.10 Explanation of the effects of & reasons for any re-statements of informationprovided in earlier reports
- ● No previous publication
3.11 Significant changes from previous reporting periods applied in the report - ● No previous publication
3.12 Table identifying the location of the Standard Disclosures in the report 66-69 ●3.13 Policy and current practices with regard to seeking external assurances for the report 1, 76-79 ●
4. Governance, Commitments, and Engagement
4.1 Governance of organization 4-5 ●4.2 Indicate whether the Chair of the highest governance body is also an executive officer 4-5 ●4.3 Number of members of highest governance body that are independent and/or non-executive members 4-5 ●
4.4 Mechanisms for shareholders and employees to provide recommendations or directions to highest governance body
4-5 ●
4.5 Compensation for members of highest governance body, senior managers, and executives 4-5 ●4.6 Processes in place for highest governance body to ensure conflicts of interest are avoided 4-5 ●4.7 Process for determining the qualifications and expertise of the members of the highest governance body 4-5 ●4.8 Internally developed statements of mission or values, codes of conduct, and principles 4-5 ●
4.9Procedures of highest governance body for management of economic,environmental, and social performances
4-5 ●
4.10 Processes for evaluating highest governance body's own performance 4-5 ●4.11 Whether and how the precautionary approach or principle is addressed by the organization 2-3 ●4.12 Externally developed economic, environmental, and social charters, principles, or other initiatives 75 ●4.13 Membership in associations and/or national/international advocacy organizations 75 ●4.14 List of stakeholder groups engaged by the organization 6-9 ●4.15 Bases for identification and selection of stakeholders with whom to engage 6-9 ●4.16 Approaches to stakeholder engagement, including frequency of engagement by type and stakeholder group 6-9 ●4.17 Key topics and concerns raised through stakeholder engagement, and responses to them 6-9 ●
● Reported ◐ Partially Reported ○Not Reported
66 67PERFORMANCESUMMARY
SAMSUNG ENGINEERINGSUSTAINABILITY REPORT
Indicator Description Page Status Remarks
Society Performance Indicators
SO1Percentage of operations with implemented local community engagement, impact assessments, and development programs
16-19, 52 ◐This can be checked through the initial environmental impact evaluation beginning of project execution.
SO2 Percentage and total number of business units analyzed for risks related to corruption 27 ◐
SO3 Percentage of employees trained in organization's anti-corruption policies and procedures 27 ●SO4 Actions taken in response to incidents of corruption - ○ Not Reported
SO5 Public policy positions and participation in public policy development and lobbying - ● The Code of Ethics stipulates that the company is prevented from participating in politics.
SO6Total value of financial and in-kind contributions to political parties, politicians, and related institutions, by country
- ● The Code of Ethics stipulates that the company is prevented from participating in politics.
SO7 Total number of legal actions for anti-competitive behavior and monopoly practices, and outcomes - ●No cases. There have been no legal actions in connection with unfair competition and monopoly behavior.
SO8Monetary value of significant fines, and total number of non-monetary sanctions for non-compliance with laws and regulations
- ○ Not Reported
SO9 Operations with significant potential or actual negative impacts on local communities - ◐
This is checked through the environmental impact evaluation at the beginning of project execution. No workplaces have been found to have a seriously negative impact on local communities
SO10Prevention and mitigation measures implemented in operations with significant potential or actual negative impacts on local communities
- ○ Not Reported
Product Responsibility Performance Indicators
PR1 Life cycle stages in which health and safety impacts of products and services are assessed, and percentage of significant products and services subject to such procedures
35 ◐Safety elements are checked through the pre-evaluation of hazards during the project execution.
PR2 Total number of incidents of non-compliance with regulations and voluntary codes concerning health and safety impacts of products and services during their life cycle, by type of outcomes
- ○ Not applicable due to the nature of our business
PR3 Type of product and service information required by procedures, and percentage of products and services subject to such information requirements
- ○ Not applicable due to the nature of our business
PR4 Total number of incidents of non-compliance with regulations and voluntary codes concerning product and service information and labeling
- ○ Not applicable due to the nature of our business
PR5 Practices related to customer satisfaction, including results of surveys measuring customer satisfaction 15 ●
PR6 Programs for adherence to laws, standards, and voluntary codes related to marketing communications - ●Product marketing communication complying with marketing-related laws and targeting people randomly is not conducted.
PR7 Total number of incidents of non-compliance with regulations and voluntary codes concerning marketing communications
- ● 0 Case
PR8 Total number of substantiated complaints regarding breaches of customer privacy and losses of customer data
- ● 0 Case
PR9 Monetary value of significant fines for noncompliance with laws and regulations concerning provision of products and services - ● 0 Case
Indicator Description Page Status Remarks EN27 Percentage of products sold and their packaging materials that are reclaimed by category - ● No packages were used.
EN28Monetary value of significant fines and total number of non-monetary sanctions for noncompliance with environmental laws and regulations
- ●
No case of violation other than a fine for environmental damage has occurred during the reporting period. There was one case of an imposed fine.
EN29Significant environmental impacts of transporting products and other goods and materials used for the organization's operations and transporting members of the workforce
30 ◐
EN30 Total environmental protection expenditures and investments by type 32, 62 ●Labor Practices and Decent Work Performance Indicators
LA1 Total workforce by employment type, employment contract, and region 64 ●LA2 Total number and rate of employee turnover by age group, gender, and region 42, 64 ●LA3 Benefits provided to full-time employees that are not provided to temporary or part-time employees 42 ●
LA4 Percentage of employees covered by collective bargaining agreements 44 ◐Collect requests and opinions of employees through the Industrial Relations Council.
LA5 Minimum notice period(s) regarding significant operational changes 44 ◐The notification is done via official channels, such as the Industrial Relations Council.
LA6 Percentage of total workforce represented in formal joint management-worker health and safety committees
- ◐The Health and Safety Committee is run for each project.
LA7 Rates of injury, occupational diseases, lost days, and absenteeism, and number of work-related fatalities 36, 63 ●
LA8 Education, training, prevention, and risk-control programs to assist workforce members, their families, or community members family members and local residents deal with serious diseases
37 ●
LA9 Health and safety topics covered in formal agreements with labor unions - ◐There is no trade union. Health and safety issues are discussed through the HSE Department.
LA10 Average hours of training per year per employee 40, 64 ●LA11 Programs for skills management and lifelong learning for continued employability and managing career endings - ○ Not Reported
LA12 Percentage of employees receiving regular performance and career development reviews - ● 100%
LA13 Composition of governance bodies and breakdown of employees per category by indicators of diversity 4, 64 ●LA14 Ratio of basic salary of men to women by employee category 64 ●
LA15 Return to work and retention rates after parental leave 42 ● 100%
Human Rights Performance Indicators
HR1 Percentage and total number of significant investment agreements that include human rights clauses or that have undergone human rights screening
- ●
0%. We do not have an official process to check about human rights protection when we determine whether to make an investment in our subsidiaries and joint ventures
HR2 Percentage of significant suppliers and contractors that have undergone screening on human rights - ○ Not Reported
HR3 Total hours of employee training on policies and procedures concerning aspects of human rights that are relevant to operations, including percentage of employees trained
45 ●
HR4 Total number of incidents of discrimination, and actions taken - ○ Not Reported
HR5 Operations identified in which the right to exercise freedom of association and collective bargaining may be at significant risk
- ○ Not Reported
HR6 Operations identified as having significant risk for incidents of child labor, and measures taken 45 ●HR7 Operations identified as having significant risk for incidents of forced labor, and measures taken 45 ●
HR8Percentage of security personnel trained in the organization's policies or procedures concerning human rights relevant to operations
- ◐
Partners are responsible for facility security and security managers are trained about human rights and ethics in accordance with internal ethics regulations.
HR9 Total number of incidents of violations involving rights of indigenous peoples, and actions taken 52 ◐
HR10Percentage and total number of operations that have been subject to human rights reviews and/or impact assessments
8-9 ◐In 2011, the working environment and possible discrimination elements were evaluated with stakeholders involved.
HR11Number of complaints related human rights that are filed, dealt with, and resolved through the official complaint registration channel
45 ◐
68 69PERFORMANCESUMMARY
SAMSUNG ENGINEERINGSUSTAINABILITY REPORT
samsunG enGineerinG SUSTAINABILITY REPORT
Appendix
Gri statement
70 PERFORMANCESUMMARY
Our sustainability report meets all requirements of Level B+ at the level of reporting indicators in the GRI G3.1 guidelines. Also, a third-party verifier and the
application level checking of GRI have confirmed that this report is appropriate for B+ in the application levels of the G3.1 guidelines.
USA
Mexico
Trinidad & Tobago
UK
Hungary
Algeria
Saudi Arabia
India
Vietnam
China
japan
Malaysia
Thailand
UAE
Venezuela
CorPorate Profile
Global network
Americas
Europe
Middle East / Africa
Asia
Americas
Grupo samsung ingenieria Mexico, s.A. De C.V.Sevilla #40 Piso 9 col. Juarez, Delegacion Cuauhtemoc C.P. 06600 Mexico CityTel 52-55-5207-6823Fax 52-55-5080-7721
samsung engineering America iNC. 2103 Citywest Blvd., 18th floor, #101 Houston TX 77042, USATel 1-281-360-2058Fax 1-281-360-2195
Samsung Engineering Co., Ltd. Venezuela officeOficina 10-B-3, Piso 10, Torre La Noria, Paseo Enrique Eraso, Urb. Las Mercedes, Sector San Roman, Caracas, VenezuelaTel 58-212-992-2831/3031Fax 58-212-992-3639
samsung engineering trinidad Co., Ltd.T&T Chamber of Industry & Commerce Bldg. 1st Floor Westmoorings Trinidad West Indies Port of Spain Trinidad & TobagoTel 51-868-637-5403Fax 1-868-632-6104
Samsung Engineering America do Sul Projeto e Consultoria Ltda 20090-003 Av. Rio Branco 1, 16 andar, Sala 1610 Centro, Rio de Janeiro, RJ, BrasilTel 55-21-3613-3100Fax 55-21-3613-3111
Middle east / Africa
samsung saudi Arabia Co., Ltd. & samsung epC Co., Ltd. P.O.BOX 35816, Samsung Naffora Techno Valley, Jubail 31961, Kingdom of Saudi ArabiaTel 966-3-356-5900Fax 966-3-356-5929
samsung engineering Abu Dhabi officeP.O. Box 73410, 31st Floor, Etihad Tower 3, Baynunah Street, Al Bateen, Abu Dhabi, UAETel 971- 2-676-2323Fax 971- 2-676-2772
samsung engineering Algeria (branch office)16035 01 Rue Des Cretes- Hydra, Alger, AlgerieTel 213-21-48-4620Fax 213-21-48-4622
Asia
samsung engineering tashkent office100084, International Business Centre, Block A, 8th Floor, 107B, Amir Temur Street, Tashkent, UzbekistanTel 998-71-238-5830~2Fax 998-71-238-5837
samsung engineering Co., Ltd. tokyo officeRoppongi T-cube 17F, 3-1-1, Roppongi, Minato-ku, Tokyo, 106-8532, JapanTel 81-3-6234-2184Fax 81-3-6234-2183
samsung engineering Malaysia sdn., bhd. Suite 14.06, 14th Fl, Kenanga international, Jalan Sultan Ismail 50250 Kuala Lumpur, MalaysiaTel 603-2162-0714Fax 603-2162-0907
samsung engineering Construction (shanghai) Co., Ltd. 15F, Onelujiazui No. 68 Yin Cheng Road Shanghai 200120, PRCTel 86-21-5010-6886Fax 86-21-5010-6887
samsung engineering india private Ltd.201301 A1, Windsor IT Park, Tower A, Level-5, Sector-125, Noida, U.P. IndiaTel 91-120-406-0700Fax 91-120-406-0750
samsung thai engineering Co., Ltd. 98 Sathom Square Office Tower, Unit 1~6, 14th Floor, and 15th Floor, North Sathom Rd, Silom, Bangrak, Bangkok 10500, ThailandTel 66-2-232-7500Fax 66-2-232-7525
samsung engineering Vietnam Representative office Unit 1909, 19th Floor, Keangnam Hanoi Landmark Tower 72 Building, Plot E6, Giay Giay New Urban Area, Me Tri Commune, Tu Liem District, Hanoi, VietnamTel 84-4-3934-7992Fax 84-4-3934-7994
samsung engineering Co., Ltd. singapore Representative office 049483 3 Church Street, 12-01 Samsung HUB Building, Singapore Tel 65-6222-0841Fax 65-6222-6735
but. samsung engineering indonesia135-856 Bapindo Plaza, 16th floor of Mandiri Tower Jl.Jend Sudirman Kav.54~55, Jakarta IndonesiaTel 62-21-2995-0112Fax 62-21-2995-0109
europe
samsung engineering Milan office Via Brescia 28, Palazzo D, Scala 3, 20063 Cernusco Sul Naviglio, Milano, ItalyTel 39-02-3672-2050Fax 39-02-3672-2074
Samsung Engineering Magyarorszag KFT. 1123 Alkotas u.53. Budapest HungaryTel 36-1-319-2694Fax 36-1-319-2641
samsung engineering Co., Ltd. uK office 16th Fl., City Tower, 40 Basinghall St. London EC2V 5DE UKTel 44-20-7382-1643Fax 44-20-7382-1649
Establish-ment Date 1970. 01. 20 Capital Stock KRW 200 billion
President & CEO
Ki-Seok Park Total AssetsKRW 5.19 trillion (as of the end of 2011, based on KIFRS)
Employees 7,620 (as of the end of 2011) RevenueKRW 9.3 trillion (as of the end of 2011, based on KIFRS)
ContactTel: 02-2053-3000Fax: 02-2053-3339
Operating Profit
KRW 717 billion (as of the end of 2011, based on the KIFRS)
Address 500 Samsung GEC, Sangil-dong, Gangdong-gu, Seoul, Korea
72 73APPENDIX
Brazil
Italy
Uzbekistan
Singapore
Indonesia
head office (seoul, Korea)
SAMSUNG ENGINEERINGSUSTAINABILITY REPORT
List of Awards (overseas)Category Year Awards Description
Overseas 2011 MEED 2011 Top EPC Contractor (Ranked 2nd) Ranked by MEED, a professional magazine on the Middle East economy. Received new orders in the oil and gas sectors
Overseas 2011ENR Top International Contractor (Overseas – Ranked 34th)
Ranked by ENR, a professional magazine on the US construction business, based on overseas sales
Overseas 2011ENR Top International Contractor (Global – Ranked 55th)
Ranked by ENR, a professional magazine on the US construction business, based on domestic/overseas sales
Overseas 2011PMI Distinguished Project Award (Thailand GSP-6)
Granted by PMI, the world’s leading not-for-profit membership association for the project management profession. Competencies for performing individual projects are evaluated and awards are given on a project-by-project basis
Overseas 2010 Oil & Gas Middle East Annual Ranking (2nd)Ranked by Oil & Gas, a professional magazine on the petrochemical business in the Middle East. Received new orders in the oil and gas sectors
Overseas 2010ENR Top International Contractor (Overseas – Ranked 35th)
Ranked by ENR, a professional magazine on the US construction business, based on overseas sales
Overseas 2010ENR Top International Contractor (Global – Ranked 69th)
Ranked by ENR, a professional magazine on the US construction business, based on domestic/overseas sales.
Overseas 2010 Institutional Investor (Best IR – Ranked 1st) Ranked by Institutional Investor, a professional magazine for stock investors, based on a survey of 800 investors and analysts
Overseas 2010 Forbes Asia’s 50 Fabulous Companies Ranked by Forbes Asia based on sales, operating profit, and market capitalization for the past five years
List of Awards (Domestic)Category Year Awards Description
Domestic 2011Hankyung Daily’s Super Companies in Korea (Ranked 31st)
Ranked by Hankyung Daily based on a combination of market capitalization, sales and net income
Domestic 2011Fortune Korea’s 500 Top Companies (Ranked 88th)
Ranked by Fortune Korea based on the sales of the previous year
Domestic 2011 Fortune Korea’s Fastest Growing Companies A total of 11 companies were on the list
Domestic 2010Hankyung Daily’s Super Companies in Korea (Ranked 37th)
Ranked by Hankyung Daily based on a combination of market capitalization, sales and net income
Domestic 2010Fortune Korea’s 500 Top Companies (Ranked 93rd)
Ranked by Fortune Korea based on sales of the previous year
Domestic 2010 Fortune Korea’s Fastest Growing Companies Fortune Korea’s Fastest Growing Companies
Domestic 2009Hankyung Daily’s Super Companies in Korea (Ranked 51st)
Ranked by Hankyung Daily based on a combination of market capitalization, sales and net income
Domestic 2009Fortune Korea’s 500 Top Companies (Ranked 117th)
Ranked by Fortune Korea based on sales of the previous year
Member of Associations*Construction Outsourcing Association Korea Construction Engineers Association Korea Carbon Capture and Storage Association
International Water Association(IWA) Korea Economic Research Institute Korea Electrical Contractors Association
Seoul Chapter, The Construction Association of Korea Korea Professional Engineers Association Korea Electric Engineers Association
Seoul Chamber of Commerce Korea Management Association Korea Information Communication Contractors Association
A Chapter of Korea Institute of Registered Architects The Korea International Trade Association The Korea Railway Association
The Federation of Korean Industries Korea Industrial Technology Association Korea Plant Industries Association
The American Chamber of Commerce in Korea Korea Fire Facility Association Korea Plant Engineering Association
The European Union Chamber of Commerce in Korea Korean Society of Fire Protection Professional Engineers Korea Institute of Plant Engineering & Construction
Korea Business Council for Sustainability Development (KBCSD) Fire Safety Association International Contractors Association of Korea
The Construction Management Association of Korea Korea Engineering & Consulting Association Korea Green Foundation
* The principles regarding corporate social responsibility or support for external initiatives are under internal consideration.
CorPorate Profile
shareholders Number of shares held equity Ratio
Cheil Industries Inc. 5,238,299 13.1%
National Pension Service of Korea 3,846,299 9.6%
Samsung SDI Co., Ltd. 2,036,966 5.1%
JF Asset Management Limited 1,748,374 4.4%
Korea Investment Trust Asset Management 1,667,782 4.2%
Others 25,462,280 63.6%
Total 40,000,000 100%
ownership structure
63.6%
13.1%
9.6%
5.1%
4.4%
4.2%
total shares issued
40 million
74 75APPENDIX
● Cheil Industries ● National Pension Service ● Samsung SDI ● JF Asset ● Korea Investment Trust ● Others
Organizational Chart
Upstream Project Management Division
Gas Project Management Division
Refinery Project Management Division
Petrochemical Project Management Division
Steel & Metals Plant Project Management Division
Energy Engineering Technology Division
Hydrocarbon Engineering Technology Division
Industrial & Infrastructure Engineering Technology
Division
Audit Department
HSE Department
Marketing Unit Energy Business Hydrocarbon BusinessBusiness Support
DivisionPower Business
Outsourcing Management Unit
Domestic Project Management Division
President ofCorporate Planning
Global Environment Research Center
CEO
Corporate Strategy & Planning Division
Financial Support Division
SAMSUNG ENGINEERINGSUSTAINABILITY REPORT
76 77APPENDIX
inDePenDent assuranCe statement
Scope and objectivesTwo Tomorrows (Asia) Limited has undertaken independent assurance of
Samsung Engineering’s 2011 Sustainability Report.
The assurance process was conducted in accordance with AA1000AS (2008).
We were engaged to provide moderate level, Type 1 assurance, which includes
evaluation of adherence to the AA1000APS (2008) principles of inclusivity,
materiality and responsiveness (the Principles).
We undertook no checking of sustainability performance data and
consequently offer no assurance over performance data or associated claims
included in the Report.
Responsibilities of the directors of samsung engineering and of the assurance providersThe directors of Samsung Engineering have sole responsibility for the
preparation of the Report. In performing our assurance work, our responsibility
is to the management of Samsung Engineering. However our statement
represents our independent opinion and is intended to inform all of Samsung
Engineering’s stakeholders. We adopt a balanced approach towards all of
Samsung Engineering’s stakeholders.
We have no other contract with Samsung Engineering and this is the first year
that we have provided independent assurance. We were not involved in the
preparation of any part of the Report. However, having reviewed and provided
feedback on drafts of the Report, in a number of instances changes were made
to the final version. Our team comprised MinGu Jun, project leader, and InMog
Yang. This assurance statement was prepared by the team in English, and
reviewed and signed off by Jon Woodhead, Sustainability Services Director, Two
Tomorrows. Further information, including individual competencies relating to
the team can be found at: www.twotomorrows.com.
basis of our opinionWe undertook the following activities:
• Review of Samsung Engineering’s process for identifying and evaluating
material issues.
• Brief materiality assessment based on internet research, peer reports,
performance standards of International Finance Corporation, ESG report of an
SRI (Socially Responsible Investment) analyst and our Tomorrow’s Value Rating
to compare the issues identified through the Samsung Engineering materiality
process.
• Interviews with four executive management team members and managers
responsible for managing non-financial issues, based at the Seoul
headquarters. Interviewees were suggested by Samsung Engineering and
agreed with Two Tomorrows.
• Review of Samsung Engineering’s approach to stakeholder engagement
and the outputs of recent stakeholder engagement. We had no direct
engagement with stakeholders other than staff.
• Assessment of information provided to us by Samsung Engineering on its
reporting and management processes relating to the Principles.
• Assessment of supporting evidence for key claims in the Report.
• Review and feedback on drafts of the Report and the Global Reporting
Initiative (GRI) index in the report.
FindingsWe reviewed and provided feedback on drafts of the Report and where
necessary changes were made. On the basis of the work undertaken, nothing
came to our attention to suggest that the Report does not properly describe
Samsung Engineering’s adherence to the Principles of the AA1000APS.
observationsWithout affecting our assurance opinion we also provide the following
observations.
In this first sustainability report, Samsung Engineering established three
‘directions’ and six ‘areas for CSR implementation’ and linked them with the
corporate vision of ‘Creative Engineering Solution Provider’. This is a good
starting point for integrating the CSR framework with efforts to achieve the
vision. In the future, integration between the corporate vision and strategy
and the CSR framework will be increased through regular review of the CSR
directions and areas, to ensure these reflect new material issues, and to exploit
further linkages with the corporate vision.
Over time, the current governance structure for CSR, where main issues are
managed by the CSR team, should be improved by appointing a responsible
Director and establishing a committee under the Board of Directors to oversee
progress and to provide authority for action. These developments should
also be used to support enhancements in the management and capacity of
relevant functional divisions.
The Report includes a series of CSR goals in the ‘Commitment to Sustainability’
section. Samsung Engineering should ensure that these goals are clearly linked
with material issues identified through stakeholder engagement and the
materiality assessment process. We also recommend that Samsung Engineering
improve the goals to include more specific, measurable, achievable, relevant
and time bound targets.
We have confirmed that the GRI indicators referenced in the GRI index pages
are reported either partially or fully. In our opinion the Report meets the criteria
within the GRI G3 guidelines to an application level of B+.
Inclusivity concerns the participation of stakeholders in developing and
achieving an accountable and strategic response to sustainability.
• Samsung Engineering categorises its stakeholders as ‘Business Stakeholders’
and ‘Non-Business Stakeholders’, in line with the AA1000 Stakeholder
Engagement Standard. Whilst this approach is seen as a good basis, a formal
documented process for stakeholder identification and participation should
be established to ensure that the current approach is ongoing and not ‘one
off’.
• Samsung Engineering demonstrates a high level of understanding and
response to overseas client’s needs, including the example of improving its
EHS performance and providing feedback to clients through VOC (Voice of
customer) system. In addition to clients, further improvement can be made by
expanding approaches such as use of regional experts and market intelligence
to cover potential CR risks relating to global project sites, suppliers and local
communities. We also recommend that Samsung Engineering should ensure
more systematic and integrated management of environmental and social
issues through continuous collection and analysis of related information
through regional hubs.
• Samsung Engineering’s approach and reporting emphasises eco-efficiency
in the whole life cycle of the business. To ensure continuous improvement,
stakeholders and relevant communication channels should be taken
into consideration at every step of the business including engineering,
procurement, construction and operations during the development of
stakeholder participation processes.
Material issues are those which are necessary for stakeholders to make
informed judgments concerning Samsung Engineering and its impacts.
• Based on the work undertaken, we are not aware of any issues that are of high
materiality for its operations that Samsung Engineering has not recognised
within its report. However, we recommend that future materiality assessment
should exclude those issues that many stakeholders consider as standard
business management activities, such as ‘Project Quality’, ‘Risk management’,
‘Providing base for continual growth’, unless these can be clearly linked with
CSR implementation areas and goals.
• The process for assessing the business impact of sustainability issues
should reflect legal, project quality and environmental risk factors. We
also recommend that Samsung Engineering should ensure consistent
implementation of the materiality assessment process by establishing a formal
process for top management review and approval of material assessment
processes and results.
• We also recommend that Samsung Engineering should introduce a
stakeholder review committee for review and moderation of the materiality
assessment process, to ensure this reflects the full range of stakeholders’
opinions.
Responsiveness concerns the extent to which an organisation responds to
stakeholder issues.
• The results of the company’s stakeholder survey revealed that ‘implementation
of environmental-friendly projects’ is seen by the majority of stakeholders as
the most important issue among the environmental section. As the materiality
analysis assigned relatively low significance to this topic, based on its current
business impact, the Report includes only one case study on the greenhouse
gas reduction plant project. We recommend that future reports should
include additional information on the company’s projects in this area, such
as enhancing relevant R&D, employee development and marketing capacity
building, and development of a strategy for creating related opportunity in the
long term.
• Establishing the ‘Green Management System’, that integrates the energy,
greenhouse gas and other environmental aspects of ISO 26000, is a
commendable approach. We recommend that Samsung Engineering should
ensure that the system is embedded within each functional division and
project teams.
• Samsung Engineering also utilises an ERS (Environmental Rating System) to
identify further performance improvement opportunities. In the future we
recommend that the company should ensure that the results of the ERS are
more directly reflected in the performance evaluation of the project teams.
• In many developing country projects, establishing joint ventures with local
partners is required by local law. We recommend that Samsung Engineering
should report on the current status of JVs in relevant developing countries,
and efforts to establish a formal system for screening partner companies’
capacity for managing social and environmental risks will be needed.
• Samsung Engineering is potentially exposed to risk through incidents within
international projects and local suppliers. We recommend that Samsung
Engineering should establish a systematic incident management plan
that prioritises and implements a communication strategy for relevant
stakeholders.
Two Tomorrows (Asia) Limited
Seoul, Korea
15th May 2012
Jon WoodheadProject Director
MinGu JunProject Leader
inMog YangLead Associate
Two Tomorrows (Asia) Limited is part of DNV, a global provider of services for managing risk, helping
customers to safely and responsibly improve their business performance. www.twotomorrows.com
SAMSUNG ENGINEERINGSUSTAINABILITY REPORT
78 79APPENDIX
reVieW oPinion
I am very pleased to meet the Sustainability Report of Samsung Engineering,
which is leading the industry through many successful projects both in Korea
and abroad. After having reviewed this report, I would like to give you four
points as follows:
The first point is about the role of the engineering industry in relation with
sustainability management.
So far Samsung Engineering has endeavored to accommodate client’s
requirements fully and address quality challenges thoroughly by means of
Plant Satisfaction Index (PSI), which is introduced in this report. And it is very
likely that Samsung Engineering’s key clients in the oil and gas, petrochemical,
power generation, and steel industry will include sustainability-related issues
in their project requirements. Sustainability activities by the International
Petroleum Industry Environmental Conservation Association (IPIECA), the
International Association of Oil & Gas Producers (OGP), and the World Steel
Association are such examples.
At the same time, the Royal Academy of Engineering has demanded that an
engineer should consider a way of contributing to sustainable development
in applying his/her engineering knowledge even when his/her client does
not ask him/her to do so. Therefore I hope that Samsung Engineering will not
only respond to client’s increasing demands for sustainable development
completely, but also be equipped with a capability of proposing a creative
sustainability solution that the client has not thought of yet, and thus
enhancing the level of sustainability management of both Samsung
Engineering and its client.
The second point is concerned with the linkage between corporate strategy
and sustainability management strategy.
I think that the vision of “Creative Engineering Solution Provider” for the
well-being of humankind and the environment, presented in this report, is
a major step forward of the company’s strategy because it links Samsung
Engineering’s corporate strategy and sustainability management strategy
with this common value. In particular, “Global Citizenship” that Samsung
Engineering has selected as one of its core values shows the company’s
strong will to become a corporate citizen contributing to sustainable
development.
However, it should be borne in mind that it is not a matter of verbal
expression simply to improve logical consistency when we assert that
sustainability management strategy should be linked to corporate strategy
closely. Rather, it is a warning against a superficial approach that mechanically
adds a new societal demand of sustainability management without any
change in the existing management practices. Therefore, I hope that the
future strategy of Samsung Engineering will evolve into an integrated one,
which merges an aspect of sustainable development with the company’s
established tradition of uncompromising quality control of its projects and
performance.
My third point is about the meaning of sustainability reporting.
It should be noted that sustainability reporting is not merely publishing
a report, but a part of continuous process of plan-do-check-act. In this
sense, the following report will need to demonstrate clearly how Samsung
Engineering has incorporated what is measured, assessed, and promised in
this report in the company’s business activities during the reporting period.
The fourth point is related to a way of building up trust in communicating
sustainability.
Along with assurance, the third-party review has been used as a way of
gaining stakeholder trust in a company’s sustainability report. However, above
all things, stakeholder trust relies on how consistently the company has put
its promise into action.
Samsung Engineering should review constantly whether its business activities
are proceeding towards the directions as promised in the disclosures on
management approach of this report (to cite a few, strengthening compliance
system; establishing an eco-friendly business management; creating a work
environment balancing work and life; fair trade and mutually beneficial supply
chain management; and contributing to the local community) and prove
how it is materializing its promises in its activities to achieve performance as
anticipated.
To link this point with the aforementioned meaning of sustainability
reporting, publishing this report may be the first step to stakeholder trust, but
the reports to be published next year, the year following next year, and the
subsequent years that show consistent actions towards its promises are truly
the way to earn and accumulate trust.
I am looking forward to seeing Samsung Engineering developing into a
company obtaining stakeholder trust and leading sustainable development
through business and management innovation.
May 2012
Director of Sustainability Management Research Center,
Kookmin Institute of Business Research
han-Kyun Rho
GHG assuranCe statement
introduction
DNV Certification, Ltd. (“DNV”) was commissioned by Samsung Engineering Co.,
Ltd. (“Samsung Engineering”) to verify the Samsung Engineering’s Greenhouse
Gas Inventory Report for the calendar year 2010~2011 (“the report”) based
upon a limited level of assurance. Samsung Engineering is responsible for the
preparation of the GHG emissions data on the basis set out within the WRI/
WBCSD GHG protocol: 2004 and the principles set out in ISO 14064-1:2006.
Our responsibility in performing this work is to the management of Samsung
Engineering only and in accordance with terms of reference agreed with them.
DNV expressly disclaims any liability or responsibility for any decisions, whether
investment or otherwise, based upon this assurance statement.
scope of Assurance
The emissions data covered by our examination comprise Direct emissions
(Scope 1 emissions), Energy indirect emissions (Scope 2 emissions) and Other
indirect emissions (Scope 3 emissions) :
• Reporting period under verification : Calendar Year 2010~2011
• Organizational boundary for reporting : Samsung Engineering Co., Ltd.
Organizational Boundaries
Address / RemarkVerification activity
Year 2010 Year 2011
Buildings6 buildings(including
headquarter)
9 buildings(including
headquarter)
Desk Review, Site visit, Process & data
verificationDomestic
construction sites
34 construction sites in Korea
46 construction sites in Korea
Desk Review, Site visit, Process & data
verificationOverseas
construction sites
Overseas 14 construction sites
Overseas 17 construction sites
Desk Review, Process & data verification
Operation & Maintenance
sites
7 sites for Operation & Maintenance
7 sites for Operation & Maintenance
Desk Review, Site visit, Process & data
verification
Verification Approach
The verification has been conducted by DNV from 23rd April through 18th May
2012 and performed in accordance with the verification principles and tasks
outlined in ISO 14064-3:2006. We planned and performed our work so as to
obtain all the information and explanations deemed necessary to provide us
with sufficient evidence to provide a limited verification opinion concerning
the completeness of the emission inventory as well as the reported emission
figures in ton CO2 equivalent. As part of the verification process:
• We have reviewed and verified the Samsung Engineering’s Greenhouse gas
Management System.
• We have reviewed the GHG inventory Report dated on 23rd April 2012.
• We have reviewed and verified the process to generate, aggregate and report
the emissions data.
Conclusions
As a result of the work described above, in our opinion nothing has come to
our attention that would cause us to believe that the GHG emissions data set
out in Samsung Engineering’s report are not fairly stated. The GHG Emissions of
Samsung Engineering for the year 2010~2011 were confirmed as below;
Greenhouse Gas emissions of samsung engineering Co., Ltd. from Yr
2010~2011(Unit: ton CO2-e)
Operational Boundary (Period)
Direct emissions (Scope 1)
Indirect emission(Scope 2)
Other indirect emissions (Scope 3)
Totalemissions
Year 2010 23,342 7,857 1,742,941 1,774,140
Year 2010 67,824 12,889 1,894,948 1,975,661
※ In order to report the GHG emissions as an integer, the rounded number on the statement
might be different from the number on the system with ± 1 tCO2.
※ Total emissions = Scope 1 + Scope 2 + Scope 3
18th May 2012
This Assurance Statement is valid as of the date of the issuance (18th May 2012). Please note that this Assurance statement would be revised if any material discrepancy which
may impact on the Greenhouse Gas Emissions of Samsung engineering Co., Ltd., is subsequently brought to our attention.
In the event of ambiguity or contradiction in this statement between English version and Korean version, Korean shall be given precedent.
in-KyoonCountry Manager
DNV Certification, Ltd.
tae-ho KimLead Verifier
DNV ASSURANCE STATEMENT
No.: AS_PRJC-378793-2012-CCS-KOR_E
SAMSUNG ENGINEERINGSUSTAINABILITY REPORT
Terms Description
AA1000ASThis is a principle regarding obligations to explain sustainability management, specified by the company. The international standard includes three principles: inclusivity, materiality and responsiveness.
CCS (Carbon Capture and Storage)This refers to all technologies that remove carbon dioxide from fossil fuels by capturing and storing the gas. This technology allows you to collect in high density, take away and store carbon dioxide before it is emitted into the air. Research is under way to make this technology available as an alternative technology for preventing global warming.
CDM (Clean Development Mechanism)In this system, which is stipulated in Article 12 of the Kyoto Protocol, an advanced nation can be considered to have reduced greenhouse gases in its region by investing in a developing nation to reduce greenhouse gas emissions in the region.
CDP (Carbon Disclosure Project)This refers to a global project by international financial or investment organizations, to conduct a survey asking major businesses in each country what strategies they have to respond to climate change and how much carbon they release into the air.
CO2 RecoveryThis technology allows you to increase efficiency, reduce emissions of or reuse CO2 in processes to treat byproducts, such as methanol and urea, or ancillary materials by recycling CO2 generated in consuming fuel in a petrochemical plant.
Engineering This refers to collecting and integrating technologies from various fields and completing projects.
EPC This is a combination of the initials of engineering, procurement and construction and refers to the scope of work of an engineering project.
FEED (Front End Engineering Design)This indicates the entire engineering process from front end engineering, design, design basis to process the design package to completion of the basic design package.
Green House Gas This refers to a gas causing a greenhouse effect. Greenhouse gases specified by the WRI/WBSCD are CO2, CH4, N2O, PFCs, HFCs and SF6.
GOSP (Gas Oil Separation Plant)This indicates a plant that separates oil and gas before treating them. Oil and gas are mixed when they are extracted from oil wells and separated to be made into products.
GRI (Global Reporting Initiative)
This is an independent international non-profit organization that created international standards for a sustainability report. This organization provides standardized reporting indices for a sustainability report. The current version is G3.1. In accordance with the international trends towards integrated reporting, the organization is developing G4, a new framework for a sustainability report, including existing financial reports and expected to announce it in 2013.
ITB (Invitation to Bid)This refers to the client demanding that contractors propose price, delivery date, and other options conditions in relation to the construction of a plant or purchase of equipment.
LSTK (Lump Sum Turn Key)This refers to a package deal, where a plant construction agreement is signed based on estimated construction volume and amount while design is incomplete. The contractor provides all services, including financing, land purchase, design, construction and test operation, and delivers the facility to the client in complete form.
Materiality TestThis refers to a technique of identifying opportunities and risks a company faces and determine which are more important than the others by considering both stakeholders’ interests and business issues deducted from communication among stakeholders.
OffshoreIn the dictionary, this means a part of sea, which is near the coast. This also indicates all facilities and activities for drilling oil and natural gas from the sea and transporting them through pipes to the shores.
Para-Xylene This refers to a colorless, transparent and volatile liquid smelling of aromatic odor, which is one of xylene isomers with two methyl groups attached to benzene.
Plant This refers to a combination of industrial facilities, machine, electricity, construction, communications and is used to indicate facilities and factories.
PQ (Pre-Qualification) This refers to evaluating qualifications of bidders when the client requests that they submit a bidding or proposal.
Reverse Engineering This refers to disassembling and examining, or analyzing a finished product in detail to discover its design or production process.
SR (Social Responsibility)This refers to responsibilities that the government, companies, institutions and organizations should fulfill. For businesses, this may be called “corporate sustainability”. Responsibilities are applied to various fields, such as human rights, the environment, labor practices and organizational governance and the international standard for social responsibility (ISO 26000) came into effect in 2010.
UreaThis refers to organic compounds (CO(NH2)2) with crystalline materials and no color. They are final compounds in the protein metabolism of mammals and certain fish (AA1000AS).
UpstreamThis refers to a process from oil exploration, mining to the production of petrochemical products. On the contrary, the sales process, including marketing, transportation and distribution, is called downstream.
Value EngineeringAll activities, such as design criteria, specification, suppliers and construction methods, can be improved to meet requirements of quality, construction period, and stability in each section of EPC at minimum cost.
Glossary
80APPENDIX
500 Samsung GEC,Sangil-dong, Gangdong-gu, Seoul, Korea134-090
Tel: +82-2-2053-3000Fax: +82-2-2053-3339E-mail: csr.secl@samsung.com Website: http://www.samsungengineering.com
If you want to download this report in PDF format, visit our website at
http://www.samsungengineering.com
If you have any suggestions or questions about this report, please contact us using the
information below.
2011 samsung engineering sustainability Managementtask Force
CsR office
Project Management
Corporate Governance
ethics & Compliance
environment, health & safety
employees & Workplace
supply Chain
Local Community
Sung-Il Hong, Jeong-Hee Sohn, Sung-Ah Lee, Seung-Kyu Lee
Dong-Jin Lee, Beom-Seop Yun, Ji-Young Kim, Jeong-In Song, Jin-Hyung Park, Ji-Won Moon
Min-Kook Kang, Seung-Kwon Bang, Wan-Seob Kim
Tae-Yong Park, Jae-Sang Na, Jong-Kwang Lee
Dae-Hoon Kim, Soo-Jung Hong, Cheon-Su Yeo
Ki-Chae Ahn, Jae-Hyun Park, Seok-Min Lee, Ki-Seung Han, Do-Young Park, Joon-Kyu Chung
Dong-Soo Son, Kyu-Ha Kim, Joung-Jun Baek, Ji-Eun Shin
Song-Yi Kim, Ho-Jae Lee, Ji-Hee lim, Jae-Woo Chang, Na-Mi Choi
500 Samsung GEC, Sangil-dong, Gangdong-gu, Seoul, Korea Tel. 02-2053-3000 Fax. 02-2053-3339
www.samsungengineering.com
Samsung Engineering Co., Ltd. was selected as a component of the Dow Jones Sustainability Index (DJSI).
The DJSI is a benchmark index for global sustainability management.
This report was printed on environment-friendly paper using soy ink.
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