corporate sustainability report for 2017 · 1.11..1. managerial managerial...
TRANSCRIPT
Corporate
Sustainability
Report for 2017
1
Production and editing
Production and editingProduction and editing
Production and editing
Orly Kadosh
Orly KadoshOrly Kadosh
Orly Kadosh, Director of the Office of the Deputy CEO for Corporate
Sustainability, Karat, and the company’s risk manager.
Einav Holin
Einav HolinEinav Holin
Einav Holin, Office of the Deputy CEO for Corporate Sustainability, Karat, and
the company’s risk manager.
Pictures:
Yossi Weise, Electric Company photographer.
Our thanks to the Israel Electric Company employees who contributed to the
Our thanks to the Israel Electric Company employees who contributed to the Our thanks to the Israel Electric Company employees who contributed to the
Our thanks to the Israel Electric Company employees who contributed to the
composing of this report.
composing of this report.composing of this report.
composing of this report.
We would point out that this report is based on data regarding the company’s
activities as published in its financial reports. Therefore, the Israel Electric
Corporation is obligated with respect to all financial and other data detailed in
the financial reports.
2
Table of ContentsTable of ContentsTable of ContentsTable of Contents
A.GENERAL DESCRIPTION OF THE COMPANY AND ITS ACTIVITIES 4
.1 MANAGERIAL INTRODUCTION 5
2. STRATEGY 11
2.1 About the 2017 Corporate Sustainability Report ........................................................... 11 2.2 Sustainability Vision and Goals ....................................................................................... 13 2.3 Core Values of the Company and its Employees ............................................................. 14 2.4 Goals ............................................................................................................................... 15 2.5 Main Events During 2017 ............................................................................................... 17 2.6 Integrated Reporting ...................................................................................................... 18 2.7 Risks and Opportunities .................................................................................................. 19 2.8 Proper Reporting............................................................................................................. 21
3. ORGANIZATIONAL PROFILE 22
3.1 General ........................................................................................................................... 22 3.2 Areas of Activity and Goals ............................................................................................. 23 3.3 Structure of Operational Areas ....................................................................................... 24 3.4 Description of Supply Chain ............................................................................................ 26 3.5 Selected Figures .............................................................................................................. 27 3.6 Greenhouse Gas Emissions ............................................................................................. 31 3.7 Principle of Preventative Caution ................................................................................... 33 3.8 Initiatives ........................................................................................................................ 33 3.9 Membership in Professional Organizations .................................................................... 34
4. IDENTIFYING FUNDAMENTAL ISSUES 36
4.1 General ........................................................................................................................... 36 4.2 Examination of fundamental issues to be reported ....................................................... 38
5. STAKE HOLDER’S DIALOGUE 42
5.1 Identifying Stakeholders ................................................................................................. 42 5.2 Frameworks for a Dialogue with Stakeholders ............................................................... 43 5.3 The Electric Corporation in the Service of the Community.............................................. 45
6. CORPORATE GOVERNANCE 48
6.1 Corporate Governance Code ........................................................................................... 48 6.2 Composition of the Board of Directors ........................................................................... 51 6.3 Preventing Conflict of Interest ........................................................................................ 52 6.4 Ethical Code .................................................................................................................... 53 6.5 Preventing Embezzlement and Fraud ............................................................................. 54
B. ESSENTIAL ASPECTS OF THE COMPANY’S OPERATIONS 55
1. JOINT BUSINESS VALUE FOR THE COMPANY AND FOR STAKEHOLDERS 56
1.1 Availability and Reliability of Electricity .......................................................................... 58 1.2 Managing Load on the Demand Side .............................................................................. 60 1.3 Gearing Up for Emergency Situations ............................................................................ 61 1.4 Technological Innovations (R&D) .................................................................................... 63 1.5 Customer Safety and Health ........................................................................................... 64 1.6 Indirect Economic Effects ................................................................................................ 66 1.7 Terms of Employment ..................................................................................................... 71
3
2. RESPONSIBLE CORPORATE CONDUCT 79
2.1 Preventing Corruption .................................................................................................... 79 2.2 Emission of Polluting Gases into the Atmosphere .......................................................... 85 2.3 Managing Energy Consumption ..................................................................................... 87 2.4 Effluent and Waste ......................................................................................................... 89 2.5 Biological Diversity.......................................................................................................... 92 2.6 Obeying Environmental Regulations ............................................................................... 95 2.7 Occupational Health and Safety ...................................................................................... 97
4
A.A.A.A. General Description of the Company and its ActivitiesGeneral Description of the Company and its ActivitiesGeneral Description of the Company and its ActivitiesGeneral Description of the Company and its Activities
5
1.1.1.1. Managerial Managerial Managerial Managerial IntroductionIntroductionIntroductionIntroduction
From the Chairman of the Israel Electric Corporation Board From the Chairman of the Israel Electric Corporation Board From the Chairman of the Israel Electric Corporation Board From the Chairman of the Israel Electric Corporation Board (G4
(G4(G4
(G4-
--
-1)
1)1)
1)
While preparing my opening remarks for the Company's 2017
Corporate Sustainability Report, I examined the question as to:
"whether our progress in the area of corporate sustainability brings
value to the organization and stake holders?”
There are a number of answers to this question:
• We have, as required by regulatory requirements and the expectations of stake
holders, succeeded in achieving a high level of transparency in the company’s
operations.
• We have also succeeded in integrating environmental and social considerations
into the company's overall business activities and continuing our voluntary
commitment to regular reporting in areas relating to corporate responsibility. In
addition, we have demonstrated that the Company's operations, as reflected in
both the financial statements and in this report, include environmental and social
factors that lead to positive business outcomes.
• "Social-environmental responsibility" is part of the normative behavior for an
advanced company, and in which we take responsibility for the company’s
activities and constantly strive to reduce environmental consequences.
Considering the above aspects, six years ago the decision to become a leading company
in Israel in the field of corporate sustainability, was undoubtedly correct while our activity
in environmental and social areas, as shown in this report, is diverse, progressive and
brings honor to employees, management and members of the Board of Directors. The
significant added value of this decision is evident as seen by the fact that the company's
employees and managers uphold our existing principles and willingly and voluntarily
promote many activities.
Our company, whose operation and functioning has, for many years, held first place
amongst customer satisfaction ratings, it is amongst one of Israel’s leading companies in
which the younger generation wants to work and faces many complex challenges. One of
these challenges is adapting our main areas of activity to rapid technological changes
and developments.
6
Therefore, this year we decided to promote the area of “smart metering” – the installation
of tens of thousands of two-way smart meters for our clients. This will enable them to
obtain, in real time, information regarding electrical consumption in their homes, electricity
rates, the status of electrical devices in the home and more. Down the line, this project
will be the foundation of the company’s flagship program – the establishment of a smart
network.
Towards the end of the year and after years of discussions, we achieved agreement in
principal regarding reforms in the electric sector, a reform that is crucial to the stability
and certainty of Israel’s energy sector.
The historic and strategic outline will bring the company and the economy into a new era
of stability and competition, and will transform the Electric Corporation into a more
efficient company and a leader in a competitive market.
I believe that together we shall succeed in improving our customer service, will develop
the company’s dedicated and professional human resources and will stand at the
forefront of technology in Israel.
Respectfully,
General (Res.) Yiftach Ron-Tal
Chairman of the Israel Electric Corporation’s Board of Directors
7
From the ChairmanFrom the ChairmanFrom the ChairmanFrom the Chairman
In my opening remarks to one of the previous reports, I noted that
"we all apply the principles of sustainability in everyday life,
because in most cases it means being us". In recent years, we
succeeded in responsibly managing the company, while improving
the environmental implications of our operations, the transparency
of information for stakeholders, and, as a result, executing our role
correctly and appropriately. Managerial effort was reflected in an
improvement in the company's credit rating. It is also shown by the fact that customers
remain satisfied with the service they receive from the company despite difficulties
resulting from the integration of advanced computer systems in the different regions. Yet
another mark of success is the fact that young employees regard the company as a good
and desirable place of work.
This year, responsible management was expressed in the implementation of a new
general company strategy. This is translated into detailed work plans for the coming
years, by the defining of multidisciplinary efficiency measures and the promotion of many
environmental projects, including a project to reduce emissions in coal powered units.
2017 was declared the “Year of Service” with the intention of improving service provided
to the company's customers as well as internal customer service provided to each
Department/Division.
In 2017 we established a companywide process to consolidate the company’s core
values which will guide us in our work and began to assimilate them throughout the
company. The combination of technological innovations in the company’s main areas of
activity leads to a leap forward and a significant change in our operations. The “new”
technological world leads to a sharp transition from the “old” world to a digital world where
intelligent analysis of data collected in real time and in huge volumes, enables us to enter
to the world of business opportunities and challenging management. The rate of transition
to the "new" world is so fast that companies that fail to adapt to the change will simply
cease to function.
I believe that the company's employees and managers will successfully promote
technological innovation in order to better prepare ourselves for a new, different, complex
and challenging technological world.
In this report, you will, once again, be able to gain an impression of the social and
environmental activities taking place within the company. Activities, based on the firm
belief that the direction is right, vital and is of significant business potential.
8
At the end of 2017, we reached agreement in principle regarding structural and
organizational changes in both the electricity sector and the company. This was an
historic event and a milestone in the company's history.
The company is embarking on a long and difficult process of releasing employees who
have contributed greatly to the company and the implementation of internal organizational
changes that will lead to us being better able to cope with the many challenges expected
in the coming decade.
The company's management and myself at the head, are committed to acting with
determination, responsibility, transparency and sensitivity in all issues related to the
implementation of the complex and expected processes. This will be done in full
coordination with the company's Board of Directors and the Employees' Organization.
Respectfully,
Ofer Bloch
Chairman, Israel Electric Corporation
9
From the From the From the From the SVPSVPSVPSVP,,,, Corporate SustainabilityCorporate SustainabilityCorporate SustainabilityCorporate Sustainability
Over the past year, I have tried, along with other members of
management, to cope with the challenge of adapting ourselves
to a level of compliance with environmental and social issues
that is above simple “compliance”. The quantity of guidelines, of
regulations and corporate reporting methods regarding
sustainability are constantly increasing and make it difficult to
the concise and transparent method for formulating reports in
this area.
The Electric Corporation has committed itself to voluntary reporting using the most
accepted reporting methodology as defined by the GLOBAL REPORTING INITIATIVE –
GRI and according to the updated G4 standard. Accordingly, the company will implement
a process the aim of which is to identify significant issues that are part of our activities
and for which stakeholders are interested in receiving expanded and transparent reports.
Identifying the significant issues is achieved through the use of surveys carried out four
years ago amongst stakeholders. This year, the validity of those issues selected as being
significant was re-examined in relation to updated publications in the field. The
examinations point to the fact that the company’s operational directions in the area of
sustainability and the significant issues chosen for this report match the updated
recommendations of international bodies.
A new direction has emerged over the past years, according to which it is necessary to
combine the organizations' financial statements with its environmental-social report as an
integrated report (Integrated Reporting).
In the present report, we have taken a step forward in a new direction and, for the first
time, the relationship between the financial statement and GRI-G4 reporting requirements
regarding sustainability was examined. Based on the examination, it can be said that that
the reports in the company’s financial statement proved as a good answer to the majority
of indexes included in sustainability reports where, by expanding the scope disclosure
regarding a relatively limited number of issues, it will be possible to implement this new
direction.
10
Additionally, in this report, social and environment activities of company employees have
been summarized, including goal and target indexes.
I would like to thank the hundreds of company employees who see social and
environmental involvement as a mission, a challenge and a contribution to fitting
behavior.
Respectfully,
Dr. Adrian Bianu
SVP, Corporate Sustainability and Risk Management
11
2.2.2.2. StrategyStrategyStrategyStrategy
2.12.12.12.1 About the 2017 Corporate Sustainability ReportAbout the 2017 Corporate Sustainability ReportAbout the 2017 Corporate Sustainability ReportAbout the 2017 Corporate Sustainability Report
This report reviews the activities of the Israel Electric Corporation Ltd. in the area of
corporate responsibility during 2017 (G4-28). As with previous corporate sustainability
reports, this report also complies with the international reporting standards of the GRI
(Global Reporting Initiative) organization, and is in accordance with the G4 advanced
reporting standard– a level of transparency required for a “Core” level report which
requires a report regarding a group of obligatory indexes for each material aspect
determined by the standard as well as a summarized report (one selected index)
regarding the fundamental aspects chosen by company stakeholders.
It should be noted that the 2017 sustainability report is based on information in the
company’s financial report for the same year. Thus, for the first time in Israel, an attempt
has been made to produce an integrated report which is the reporting model that
connects the two aforementioned reports (G4-3).
It is further noted that:
• The company has committed to publish yearly sustainability reports (G4-30) and
reporting began in 2012.
• This report refers to the fundamental aspects (subjects) as decided, based on an in-
depth survey amongst the stakeholders and these subjects are identical to those in
the previous reports (G4-23).
• The present report contains a report at the “CORE” level of transparency (Basic)
(G4-29) which is divided into the following sections:
a. General description of the company and its areas of activity according to 34
obligatory indices defined in the G4 standard of GRI (G4-1÷G4-34).
b. Report of the company’s activities in 12 fundamental issues from the
stakeholders’ point of view and at a basic level of transparency (see
fundamental issues later in the document).
c. The index required for a GRI-G4 report.
d. A map showing the relationship between 2016 company's financial statement
(Examination year) and the indices required for a report in the field of corporate
sustainability, as in the present report.
12
The company’s financial statement is audited by an external auditor and other, internal
professional factors (G4-36). This provides confirmation that the information in the report
regarding corporate sustainability is also accurate.
For information regarding the present corporate sustainability report please contact:
Dr. Adrian Bianu - SVP for Corporate Sustainability and Risk Management.
Tel: 076-8633777
Company Address:
Israel Electric Corporation. Head Office, 1 Netiv HaOr Street, P.O. Box 10, Haifa, 31000
(G4-31, G4-5).
13
2.22.22.22.2 Sustainability VisioSustainability VisioSustainability VisioSustainability Vision and Goalsn and Goalsn and Goalsn and Goals
The company’s vision and goals for environmental and social involvement were revised
and approved in 2017 (the relevant document can be found on the company’s site) and
includes management’s commitment to implementing principles of sustainable planning.
14
2.32.32.32.3 Core Values of the Company and its EmployeesCore Values of the Company and its EmployeesCore Values of the Company and its EmployeesCore Values of the Company and its Employees
The company's management recently completed an in-depth process of formulating our
core values based on the company's updated vision. The process began more than a
year ago as part of the "Recalculating Route" process, led by the Human Resources and
Organization Division. Following the formulation of the first proposal for a series of core
values for the company and its employees, a long process of cooperation and dialogue
was held with 400 employees and managers from all sectors of the company in a series
of workshops. Following the workshops, the core values were redefined and brought for
discussion and ratification by the company's management.
The five core values that reflect "crowd wisdom" as presented in the workshops are:
• Change with courage: business, innovation, efficiency.
• Commitment to the customer’s needs: available and quality service.
• Leading responsibly and reliably: Honesty and personal example.
• We care about people: fairness, mutual responsibility.
• Commitment to excellence and professionalism: initiative, a passion for work,
safety.
In the midst of the profound processes of change that the electric sector is undergoing
and those that still await us, the core values will set us boundaries that cannot be
crossed, and will ensure that we act in a fair manner with both customers and employees.
15
2.42.42.42.4 GoalsGoalsGoalsGoals
The company’s principal sustainability goals for 2020 which place an emphasis on
environmental sustainability and human resources are explained later in this document.
Additional goals are described in the last update (2016) of the document “The Electric
Corporation’s policies and strategies for sustainability” that was published on the
company’s internet site.
* (Relative to 2012 when the use of natural gas was stopped)
Reduction in polluting emissions
Reduction in polluting emissionsReduction in polluting emissions
Reduction in polluting emissions* (Tons)
* (Tons)* (Tons)
* (Tons)
• 60% reduction in nitrogen oxide.
• 60% reduction in Sulphur dioxide.
• 20% reduction in carbon dioxide.
• 20% reduction in carbon footprint.
Degradable resources
Degradable resourcesDegradable resources
Degradable resources
• 10% reduction in the use of potable water for operation use
(Relative to 2013).
• 60% reduction in paper (relative to 2010).
• 10% green purchases.
Waste and associated products
Waste and associated productsWaste and associated products
Waste and associated products
• 100% reuse of coal ash.
• 100% reuse of plaster.
Prevention of environmental hazards
Prevention of environmental hazardsPrevention of environmental hazards
Prevention of environmental hazards
• Prevention of incident that pollute the sea.
• Prevention of light pollution.
• Meeting the regulatory requirements for prevention of
atmospheric pollution.
16
Diverse employment
Diverse employmentDiverse employment
Diverse employment
Target: 10% of employees will come from diverse backgrounds (% in
2017).
• Minorities – 3.5% (3%)
• Ethiopian community – 1.5% (1.3%)
• Ultra-orthodox – 1% (0.9%)
• Workers with disabilities – 3% (2.6%)
• Youth, working and studying – 1% (0.7%)
Female representation at managerial levels
Female representation at managerial levelsFemale representation at managerial levels
Female representation at managerial levels
Target: 25% female representation at the various managerial levels.
Target: 25% female representation at the various managerial levels.Target: 25% female representation at the various managerial levels.
Target: 25% female representation at the various managerial levels.
In practice:
• 22% department managers and similar.
• 18% deputy department and division managers.
• 22% branch managers.
• 13% office holders.
17
2.52.52.52.5 MainMainMainMain Events During 2017Events During 2017Events During 2017Events During 2017
In 2017, the company's employees initiated and participated in dozens of social events
including: assistance for needy populations, activities for senior citizens, a “good deeds”
assistance for needy populations, activities for senior citizens, a “good deeds” assistance for needy populations, activities for senior citizens, a “good deeds”
assistance for needy populations, activities for senior citizens, a “good deeds”
day, Purim celebration
day, Purim celebrationday, Purim celebration
day, Purim celebrations at company sites, educational activities in schools and more.
s at company sites, educational activities in schools and more.s at company sites, educational activities in schools and more.
s at company sites, educational activities in schools and more.
Amongst the many activities, we would point out a
significant event which transformed the Festival of
Lights (Hanukah) into the “Electricity Festival”
“Electricity Festival”“Electricity Festival”
“Electricity Festival” when,
for the first time a traditional festival was combined
with the company’s brand in an event whose goals
were:
• Strengthening relationships with local
authorities and with small businesses.
• Strengthening corporate responsibility.
• Strengthening relationships with
environmental organizations and others.
• This was the “From Eilat to Kiriyat Shmoneh”
race that took place for the first time during last year’s Hanukah season and which
became the first social race – “In the path of light”.
Additional events:
Additional events:Additional events:
Additional events:
in
in in
in
Award
AwardAward
AwardRoad Safety
Road Safety Road Safety
Road Safety
IEC
IECIEC
IECfor the
for the for the
for the 2017
2017 2017
2017
The award was awarded
by the National Road
Safety Authority at a
ceremony marking the
National Day for Road
Safety with personal
responsibility.
..
.
The
TheThe
The
"Dov Lautman
"Dov Lautman "Dov Lautman
"Dov Lautman
(Deceased) Award
(Deceased) Award(Deceased) Award
(Deceased) Award"
""
"
For the advancement of
workers with disabilities.
Awarded to IEC at the
Ma'aleh Conference:
Business-Leaders-
Social Responsibility
held in Tel Aviv on
29.11.17
The IEC received a
Platinum Plus rating as
part of the Ma’aleh 2017
rating for an assessment
of the implementation of
social commitment in
organizations for the
third consecutive year.
18
2.62.62.62.6 Integrated ReportingIntegrated ReportingIntegrated ReportingIntegrated Reporting
A corporation’s financial report is usually a basic, efficient and effective tool for assessing
its financial situation when the accepted requirements for reporting in the area of
corporate sustainability receive a partial (if any) solution in the financial report. Recently,
in the United States, a reporting model, known as Integrated Reporting, began to
crystalize in which, in addition to detailing financial information, the financial report
incorporates information on social-environmental issues as is customary in corporate
sustainability reports. Studies indicate that investors are interested in more extensive
information rather than just financial information and that integrated reporting improves
the relationship between the organization and its stakeholders.
The Company implements an approach by which an integrated report is achieved through
the annual publication of:
• The organizations financial statement.
• A sustainability report as per the GRI -G4 standard.
• Integrative environmental report, which describes the environmental implications
of the company's activities.
In this report, for the first time, the relationship between accepted reporting standards in
corporate sustainability reports and the information presented in the company's financial
statements are compared.
Chapter 4 of this report presents a list of required reporting metrics according to the GRI-
G4 standard and the relationship to the chapters in the financial report for 2017.
The map showing the relationship between corporate sustainability reporting metrics and
information in the financial report makes it possible to prove that the financial report
includes information that also covers social-environmental issues of interest to
stakeholders.
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2.72.72.72.7 Risks and OpportunitiesRisks and OpportunitiesRisks and OpportunitiesRisks and Opportunities
Risks
RisksRisks
Risks
Risks are an unavoidable part of the company’s business environment and of business
work and management processes. They are influenced by both internal and external
factors such as strategic risks, operational risks, financial risks and compliance and
regulatory risks .
In accordance with the guidelines contained in the Government Companies Authority
guidelines 2009/2 regarding risk management, and as part of regular and ongoing
management processes, the IEC operates a risk management process as per a master
policy governing this issue that was approved by the board of directors and recently
updated.
Risk Management is designed to ensure the company’s stability in its tasks, targets and
defined goals. It is carried out across all company divisions. Company management is
responsible for managing risk management processes and the CEO appoints a company
Risk Management Manager who is responsible for managing an integrative approach to
all risk management activities.
Additionally, in 2017, the company completed and approved a new risk survey including
risk acceptability (the amount of risk the organization is prepared to accept), updating of
risk indices and risk reduction plans .
Policy targets for risk management include:
a. Reducing losses resulting from the realization of risks that the company is
exposed to.
b. Adapting authority and responsibility frameworks amongst company employees.
c. Effective monitoring and operations to reduce risks.
d. Creating a risk assessment infrastructure including regular reporting mechanisms
and the use of said reports as a tool for monitoring risks.
In addition, exercises were held to test business continuity with the aim of ensuring the
continuous functioning of processes critical to the company’s operation.
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Opportunities
OpportunitiesOpportunities
Opportunities
Company management and employees are implementing a new strategy that focuses on:
• A primary target was set for organizing and executing actions to transform the
company into competitive business through the move, over the coming years, to a
competitive-regulatory company.
• Methods were defined for the implementation of the primary target which focuses on
steps to promote increased efficiency and initiatives to enter new areas of core
activities. Upon implementation of the new strategy the company will place itself as
the leading business in Israel’s energy economy.
• Additionally, as a company that strives to operate efficiently and fairly in a competitive
and developing market, the IEC will act to ensure the financial stability and
reasonable profitability required for the supply of available and quality electricity to the
economy and will continue to develop the electric system (based on the company’s
vision).
• Strengthening the relationship between budgetary use and the performance of the
various divisions by determining new productivity indices.
• At the end of 2017, agreement in principal was achieved with regard to structural
changes in the electricity section and organizational changes within the company.
This is an historic event and marks a milestone in the company’s history when it
stands before a long and challenging process.
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2.82.82.82.8 Proper ReportingProper ReportingProper ReportingProper Reporting
During the years when the company published corporate sustainability reports, important
information was accumulated, including how to respond to the standard’s requirements
(GRI-G4) and how to gather the required data whilst maintaining a high level of
transparency.
In this report:
• As with previous reports, this report’s information gathering, writing and
information accessibility procedures were executed by company employees
representing the various divisions.
• The information presented is compatible with the information contained in the
company’s financial reports for the reporting year. The financial report is audited
by an external, independent auditor and internal professional factors.
• Special emphasis was placed on defining goals for sustainable activities in order
to allow monitoring of their effectiveness.
• The report’s contents meet the requirements of the GRI-G4 international standard
as follows:
a) To determine substantive subjects, surveys were executed amongst
stakeholders in previous years.
b) The validity of substantive subjects was tested against those valid in
foreign electricity companies and up to date information on the subject as
detailed later in the document (Work of UN and WEC).
c) Levels of transparency, regarding substantive subjects, met the
requirements of basic “CORE” transparency with the 2013-2014 reports
meeting the requirements of In Accordance - Comprehensive transparency
d) The existing data base allows the present report to expand reporting
beyond that required by basic “CORE” transparency.
Therefore, the proper reporting and the data shown in this report are the result of the
strict reporting standards in the company’s financial statements.
22
3.3.3.3. Organizational ProfileOrganizational ProfileOrganizational ProfileOrganizational Profile
3.13.13.13.1 GeneralGeneralGeneralGeneral
The Israel Electric Corporation Ltd.
operates in the electricity sector based on
the Electrical Economy law. The
company’s headquarters are located in
Haifa, 1 Netiv HaOr St., Haifa, Israel (G4-
5). As of the date of this report the State
of Israel holds 99.846% of the company’s
issued and redeemed shares (G4-7).
The company produces, distributes and
supplies electrical energy including the
design, construction and operation of the
infrastructures required for these
operations in Israel (G4-4), Eastern
Jerusalem and the West Bank.
The company is a government and public
company supervised by a number of
regulators including the Electricity
Authority which determines electricity
tariffs and their updating. This in accordance with that stated in the Electrical Economy
Law (G4-7).
In addition to its operations in Israel, the company also operates abroad through the
Business Development and Initiatives Unit in the following fields:
• Design, construction and monitoring the execution of projects in the field of
electrical production and other electrical installations.
• Supply of professional services including the sale of knowledge, consultation
services, engineering services for different entities in Israel and abroad (Eastern
European countries, the former Soviet Union, Africa, India and others) (G4-6) .
• Operating as a supplier of professional services including the sale of knowledge,
consultation services, engineering services for entities both in Israel and abroad
(Eastern Europe, the former Soviet Union, Africa, India and others) (G4-6).
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3.23.23.23.2 ArArArAreeeeas of Activity and as of Activity and as of Activity and as of Activity and GoalsGoalsGoalsGoals
The company produces, distributes and supplies the majority of electricity used in the
Israeli economy in accordance with licenses issued for each type of activity in this area
based on the Electricity Economy Law. The company is also involved in the design and
construction of those infrastructures required for the aforementioned activities and also
operates to manage the electrical system.
In addition, the company has a license for the transmission, distribution and supply of
electricity within the borders of the State of Israel which constitutes an “essential
services” provider license (as defined by the Electricity Economy law). The company also
has a production license where system management is carried out as part of the general
license (G4-4) (G4-7).
Operational aims
Operational aimsOperational aims
Operational aims
a) To provide the best possible answer to the needs of its customers at levels of
efficiency adapted to market conditions.
b) To lead the market and lead competitors in the quality and character of services
and products supplied.
c) To act honorably, fairly and honestly towards customers, employees, competitors,
suppliers, financing shareholders and governmental agents.
d) To treat employees as a central company resource, to maintain open
communications with them, create a feeling of pride and belonging and to
encourage them to act from a sense of commitment and with creativity.
e) To serve as an example of managerial and operational excellence, technological
innovation, proper governance and transparency.
f) To act decisively to preserve the environment and to encourage the production of
clean energy and to strive toward sustainable developments.
g) To be attentive to the human environment within which the company operates
whilst cooperating with the community and showing involvement, care and social
responsibility.
24
3.33.33.33.3 Structure of Operational AreasStructure of Operational AreasStructure of Operational AreasStructure of Operational Areas
Transmitting and transforming electricity is carried out
under the license awarded to the company for the
“transmission, distribution, supply, sale and trade in
electricity”.
Within the framework of these operations, electricity
produced by the company and by other, private,
producers is transferred, by the company via its
transmission network to consumers. The electrical
network covers the entire country.
The transmission network consists of ultra-high
voltage lines (400 Kw.) and extra high voltage lines
(161 Kw.) through which electrical power is fed from
production facilities to switching stations (400 Kw.) and
to large substations (161 Kw.). From the switching
stations and large substations, power is distributed to
switching stations and substations across the country.
At the company’s switching and substations, the
electrical current is transformed from ultra-high voltage
to extra high voltage (through a linked transformer at
the switching station) and from extra high voltage to
high voltage (through an output generator at the
substation).
Transmitting ultra-high and extra high voltage power allows electricity to be transmitted
from power stations to switching and substations with relatively low loss rates. After
transformation to high voltage (at the distribution network), energy is transferred to users
of high voltage energy and, with the use of network transformer, to users of low voltage
energy.
Operations in the transmission and transformer segment also include operations,
maintenance and repairs when needed (G4-4). Additionally, the company produces
electrical power through a number of different power generation plant types. As of the
end of 2017, the gross installed capacity of the company’s production facilities is 13,617
megawatts and has remained unchanged in comparison to 2015 and 2016.
25
Competitive Structure and Changes
Competitive Structure and Changes Competitive Structure and Changes
Competitive Structure and Changes within
withinwithin
within
the Company’s Areas of Operation
the Company’s Areas of Operationthe Company’s Areas of Operation
the Company’s Areas of Operation
As of the report’s publication, the company operates as a monopoly in the field of
transmitting and transforming electricity. In addition, the company is obligated to allow
private electricity producers to use the national transmission system. Despite the
aforementioned, according to regulations governing the electrical economy
(cogeneration) 2004, the Ministry of National Infrastructures, Energy and Water has the
authority to approve private cogeneration producers to supply electricity to consumers
close to their facility without using the infrastructure services (G4-13)...................
Products and Services
Products and ServicesProducts and Services
Products and Services
Transmission and transformer services are provided to different customers according to
their connected voltage levels. The end user pays for services via the general tariff as
defined by the Electricity Authority which changes according to the connected voltage
levels. Additionally, according to the defined criteria, the company also provides
maintenance and operation services for private producer’s substations.
Restrictions, legislation, regulations and special constraints on the company’s areas of
operation in the transmission and transformer sector are subject to legal restraints such
as those defined in the Electric Economy Law.
26
3.43.43.43.4 Description of Description of Description of Description of Supply Chain Supply Chain Supply Chain Supply Chain
The supply chain includes (G4-12):
• Fuel, apart from coal which is purchased by the National Company for Coal
Supply (subsidiary company), is purchased by the company.
• Purchase of varied supplies (writing paper, office equipment, computer
equipment, photocopy machines etc.).
• Purchase of highly complex, technological equipment (boilers, turbines,
generators, transformers, monitoring equipment etc.) for the establishment and
operation of power stations and electrical networks (electricity pylons, electrical
cables for different voltages, electrical wires for various voltages etc.)
• Purchasing of various services – cleaning, catering, security, transportation,
gardening, vehicle maintenance etc.
The scope of purchases from various suppliers in 2017 was 3 billion NIS (not including
fuels or goods for development and operation etc.).
The company publishes, on its web site, its procurement program for the coming five-year
period and thus allows suppliers to join the supply chain in their areas of business.
During the reporting year there were no significant changes in ownership, structure or
supply chain in comparison with the previous year other than (G4 -13):
• Increase in the number of consumers (natural increase).
• Increase in production by private producers.
• Increase in the scope of natural gas production resulting in a reduction in output
for coal operated units.
27
3.53.53.53.5 Selected FiguresSelected FiguresSelected FiguresSelected Figures
We shall show, later in the document, figures which represent the company’s activities
(G-48, G4-9) for 2017 compared to 2016.
The number of company customers, at the end of the reporting year, stood at 2.8 million.
The company’s electricity production was 48.8 billion kilowatts and 19.4 billion kilowatts
being supplied by private producers, (G4-9). In comparison with the previous year,
production by private producers increased 3 times.
The distribution of electrical use, by customer type was similar to the previous year
(G4-EU3, G4-8): domestic use was 36%, public and commercial use was 30% and
industrial use was approximately 18%.
Annual
production
(Millions of
Kilowatts)
IEC
Natural gas
production
(%) IEC
Peak demand
IEC in
Megawatts
Record usage
in the economy
in Megawatts
Number of
consumers by
end of year
(Thousands of
consumers)
28
I
II
Installed Capacity in the Company’s Production Sector (G4
nstalled Capacity in the Company’s Production Sector (G4nstalled Capacity in the Company’s Production Sector (G4
nstalled Capacity in the Company’s Production Sector (G4-
--
-EU
EUEU
EU-
--
-1)
1)1)
1)
The IEC’s installed capacity per production unit remained unchanged in comparison with
2016. The economic development required was based on a combination of power
stations and private producers.
Figures
Year
Type of fuel
Installed output
Installed outputInstalled output
Installed output
(Megawatts)
(Megawatts)(Megawatts)
(Megawatts)
Percentage
(%)
2017
Gas
7,731 57
Methanol
43 0
Diesel oil
993 7
Coal
4,840 36
Kerosene
10 0
Total installed
13,617 100%
Natural gas
Coal
Diesel oil
Fuel oil
29
With regard to 2017 it is noted that:
With regard to 2017 it is noted that:With regard to 2017 it is noted that:
With regard to 2017 it is noted that:
The IEC’s total production was approximately 48.7 MKVH and was 71.5% of the
economy’s total production. Production using coal was reduced by 4.4% compared
to 2016 and by 18% compared to 2015 with production using natural gas increasing
by 3.6% compared to 2016 (G4-8, G4-9).
In the area of development, effort was made to implement development plans for
transmission, transformer and distribution segments. Scope of expected
development by 2020 is described later (See chapter 1.2) compared to 2015.
Development of overhead and underground transmission lines by voltage levels
(G4-EU4) (circular area in Km.) is described as follows:
Year
YearYear
Year
Type of line
Type of lineType of line
Type of line
2020
20202020
2020
2015
20152015
2015
High voltage on 400 Kw.
782 759.5
High voltage lines 161 Kw.
4,627 4,497
High voltage cables 161 Kw.
198 123.6
Permanent and private
substations
211 201
High voltage lines 21 Kw.
30,631 26,961
Low voltage lines
25,382 20,298
The company’s human resources, as of 31.12.2017 is 11,902 employees
compared to 11,908 at the end of 2016 (G4-10) and is divided as follows:
• Permanent employees: 8,558
• Temporary employees with personal contracts and others: 3,344.
• During 2018 , 550 permanent employees are expected to retire in accordance
with the approved multi-year efficiency plan. It can be stated that the majority of
the company employees (more than 95.5%) are covered by collective agreements
(G4-11).
30
• The company’s budgetary profit for 2017 rose significantly compared to the
previous year thanks to greater multi-disciplinary efficiency.
• Peak demand was 12,750 megawatts compared to 12,624 megawatts in 2015.
• The installed capacity of the company production units remained unchanged
compared to the previous year. The economy’s installed capacity shows an
upwards trend resulting from the integration of private producers which signals the
start of an era of competition in the production segment.
• The energy produced by the company’s production units was 71.5% of the energy
produced in the economy. The balance was supplied by private producers which
show significant progress in their integration into the production segment.
• Production using natural gas reached 53.5% of the company’s production whilst
production with coal decreased by 4.4% compared to last year.
• The number of customers
rose by more than the
expected natural increase
while the trend for large
customers moving to
private electricity producers
not only continued by
strengthened.
• Carbon dioxide emissions
decreased by 4.9% in 2017
compared to 2016 (See
chapter 3.9). This is the
result of increased
production of natural gas,
and by 35% compared to
2012.
• A significant reduction in emissions from all other pollutants was also achieved by
adhering to regulations and standards set by the Ministry of the Environment and
performance monitoring and full transparency (See section 3.6).
31
3.63.63.63.6 Greenhouse Gas EmissionsGreenhouse Gas EmissionsGreenhouse Gas EmissionsGreenhouse Gas Emissions
In August 2015, the government decided to cancel the 2010 national programs for the
reduction of greenhouse gases and ordered the Minister of the Environment, the Minister
of National Infrastructures, Energy, Water and the Finance Minister to present an
alternative plan for the Paris Conference held in December 2015. At a meeting held on
20.09.15, the government decided, whilst also considering the maintaining of energy
security of the State of Israel (G4-EU5):
• To set a national target of 8.8 tons of greenhouse gas emissions per person for
2025 and of 7.7 tons of greenhouse gas emissions per person for 2030. This
represents a restriction on additional quantities of greenhouse gas emissions
from 72 million tons in 2005 to 81 million tons by 2030.
• In order to meet the national target for the reduction of greenhouse gas
emissions, national targets were set for increased energy efficiency, to reduce
energy consumption and to expand the use of
renewable energy, as follows:
• A reduction of 17% in electricity consumption
by 2030 compared to expected consumption
for the same year based on a regular
commercial scenario. Regarding this decision,
a “regular commercial scenarios” is one that
reflects the scope of energy consumption
expected in 2030 according to trends that were
correct as of 2015.
• A reduction of 20% in the number of kilometers
travelled by private vehicles by 2030
compared to expected kilometers travelled for
the same year based on a regular commercial
scenario and trends correct as of 2015.
• Production of electricity from renewable sources will be at least 13% of electricity
consumption by 2025 and 17% by 2030.
32
Emission figures for greenhouse gases resulting from the burning of fuel for the
production of electricity are described in the following (ton CO
2
) – Scope 1. In addition,
amounts of other emissions were calculated (nitric oxide, methane, sulfur and others) per
ton equal to carbon dioxide with aim of estimating the company’s carbon footprint (G4-
EU5).
Year
YearYear
Year
Gas type
Gas typeGas type
Gas type
2016
20162016
2016
2017
20172017
2017
Carbon dioxide CO
2
(1000’s tons)
30,938 29,415
Carbon dioxide Gr./KwHour
produced
635 603
Total in 1000’s of tons Carbon
dioxide equivalent – Carbon
footprint
31,055 29,512
Carbon dioxide equivalent
Gr./KwHour produced
637 605
In 2017 the carbon footprint (including nitrogen dioxide, methane, sulfur hexafluoride and
others) decreased by 4.9% in comparison with 2016 and by 35% compared to 2012 when
there was an interruption in the flow of natural gas. Thus, we can state that the
company’s contribution to the national effort to reduce greenhouse gas emissions was
significant.
33
3.73.73.73.7 Principle of Preventative CautionPrinciple of Preventative CautionPrinciple of Preventative CautionPrinciple of Preventative Caution
The principle of “Preventative Care” is anchored in Israel legislation in environmental laws
such as the Non-Ionizing Radiation law of 2006, the Clean Air Law of 2008, the
Environmental Protection Law of 2012 etc.
The company has, for many years, been taking action to implement this principle and
allocates a yearly budget for the execution of improvements in new and existing electrical
installations based on a multi-year work plan. Special emphasis is placed on the
reduction of magnet field strength wherever possible, reduction in noise levels generated
from the various facilities and more. In addition, the company is taking steps to achieve
all the permits needed for its operation including a permit according to the Non-Ionizing
Radiation Law in which the principle of preventative caution is especially applicable.
Additionally, the company deals with complaints received from the public and, when
necessary, conducts measurements according to the guidelines of the Ministry of the
Environment (G4-14).
3.83.83.83.8 InitiativesInitiativesInitiativesInitiatives
IEC takes upon itself initiatives and commitments to promote the principles of sustainable
development (corporate sustainability) such as (G4-15):
- Implementation of a voluntary reporting system on greenhouse gas emissions from
2010.
- Determination of a strategy and policy for corporate sustainability, including the vision
of sustainability and the objectives of activity. The document was updated in 2016.
- Publication of existing corporate reports in accordance with the instructions of the
international body, GRI, every year as of 2012.
34
- Participation in the Maala rating system from 2011, with a continuous improvement in
rating and achievement of the maximum level of Platinum + for its corporate
responsibility performance in 2015.
3.93.93.93.9 Membership in Professional OrganizationsMembership in Professional OrganizationsMembership in Professional OrganizationsMembership in Professional Organizations
The IEC is a member of Israel and foreign professional organizations and encourages its
employees to participate in the activities of these organizations (G4-16).
Examples of membership in Israeli organizations
Examples of membership in Israeli organizationsExamples of membership in Israeli organizations
Examples of membership in Israeli organizations
� The Israeli Energy Society
� The Association for Environmental Planning in Israel
� The Israeli Association for Nuclear Science
� The Israeli Center for Management – Union of Human Resource Managers
� The Israeli Institute of Energy and Environment
� Association of Electrical and Electronics Engineers in Israel
� The Israel Center of Oil and Energy (ISIPE)
� Israel Institute of Chemical Engineers
� Israel Information Systems Audit and Control Association
� I.A.A – Israel Acoustics Association
35
� ISCO-IL – Israel Internet Society
� The Israeli Society for Advanced Studies in Energy, Water and Communications
For many years, the IEC has been active in various frameworks in the Manufacturers
Association of Israel including the forum for Environmental Quality Managers.
Examples of membership in foreign organizations
Examples of membership in foreign organizationsExamples of membership in foreign organizations
Examples of membership in foreign organizations
� IEEE
IEEEIEEE
IEEE
- the world's largest professional association educated to advancing
technological innovation and excellence for the benefit of humanity
� INTERNATIONAL COUNCIL ON LARGE ELECTRIC SYSTEMS -CIGRE
CIGRECIGRE
CIGRE
� WEC
WECWEC
WEC – W
WW
WORLD E
EE
ENERGY C
CC
COUNCIL
� EURELECTRIC
EURELECTRICEURELECTRIC
EURELECTRIC -
- -
-
THE UNION OF THE ELECTRICITY INDUSTRY – ELECTRICITY FOR
EUROPE
� MED
MEDMED
MED-
--
-TSO
TSOTSO
TSO
–
––
–
MEDITERRANEAN TRANSMISSION SYSTEM OPERATORS
Company representation on external gender committees
Company representation on external gender committeesCompany representation on external gender committees
Company representation on external gender committees
� Women in Energy Forum – a national forum in which female managers from different
companies participate
� Participation in the Knesset (Israeli parliament) Committee for the Advancement of
Women’s Status and Gender Equality
� Participation in the Israeli Conference for Women and Businesses
� Participation in the forum for commissioners for gender equality, Civil Service
Commission.
36
4.4.4.4. Identifying Fundamental IssuesIdentifying Fundamental IssuesIdentifying Fundamental IssuesIdentifying Fundamental Issues
4.14.14.14.1 GeneralGeneralGeneralGeneral
This report is based on the principle of “essentiality" which requires attention to identifying
those areas of operations that are of importance to stakeholders. The process for
identifying fundamental issues (aspects) was based on a survey amongst 2300
stakeholders – employees, strategic customers, governmental factors, representatives of
environmental bodies, academics, community representatives, company directors and
others. The survey was carried out in 2013 and a questionnaire containing a list of multi-
disciplinary subjects relating to sustainability was distributed to the selected subjects.
Participants were asked to select up to 10 subjects that were, in their opinion, important
to the company’s operations (see the company’s 2013 sustainability report on the
company’s web site), (G-4 – 18).
The validity of survey results was also tested in 2014 with a complementary survey
amongst 50 additional stakeholders selected on the assumption that they have an
understanding of sustainability principles (see the company’s 2014 sustainability report
on the company’s web site). The fundamental issues identified remained unchanged
compared to those of the previous years but were divided into impact groups as
described later (G4-17):
1. Issues that bring a common business value of importance to the company and
stakeholders.
2. Issues that indicate “Responsible Corporate Behavior”.
With regard to fundamental issue and according to the GRI-G4 CORE reporting
requirements the following will be detailed later:
The company’s managerial approach to the issue, report limits, figures regarding indices
specific to electricity companies and detailed figures regarding one index to be chosen by
the company for each fundamental subject/aspect.
37
In the present work figures from previous reports were not recalculated (G4-22) and
where the division of fundamental issues as shown above is new and an answer to a
specific index relating to actual figures for 2016 (G4-23)
Classification of fundamental issues by areas of impact*
Classification of fundamental issues by areas of impact*Classification of fundamental issues by areas of impact*
Classification of fundamental issues by areas of impact*
Business values common to
Business values common to Business values common to
Business values common to
company and stak
company and stakcompany and stak
company and stakeholders
eholderseholders
eholders
Responsible corporate behavior
Responsible corporate behaviorResponsible corporate behavior
Responsible corporate behavior
� Economic performances
� Available and reliable electricity
� Managing loads alongside
demands
� Readiness for emergency
situations
� Technological innovation (R&D)
� Customers’ health and safety
� Indirect economic impacts
� Conditions of employment
� Preventing corruption
� Pollutant discharge into the air
� Managing energy demands
� Sewage and waste
� Maintaining biological diversity
� Adherence to environmental
regulations
� Employment health and safety
*G4-19 - List of fundamental issues
Amongst the internal organizational impacts of the fundamental issues we can point to
(G4-20):
• Managerial effort to formulate a detailed work program including means of
monitoring budgets and progress of regular dealing concerning each fundamental
issue.
• Allocation of significant budgets to address complex environmental issues, to
obey all regulatory demands, operational/maintenance facets, maintaining
employee safety, ensuring the health of employees and customers, fair
employment and others.
38
• Creation of a transparent and credible dialogue with trade unions, and the
preservation of the organization's knowledge and employment diversity.
• Improving customer service with the integration of advanced tele-processing
technologies.
Amongst the external organizational impacts of the fundamental issues we can point to
(G4-21):
• The company’s operations have environmental impacts that are regularly
monitored by external factors (Union of Local Municipalities and the Ministry of the
Environment).
• The company’s operations are subject to regulatory monitoring in a variety of
areas including operations, finances and others.
• Promoting development programs and upgrading various electrical facilities.
• Initiating a framework for discussions with stakeholders.
• A commitment to regulatory demands and targets for the regular supply of quality
electricity to customers, to appropriate behavior towards suppliers and to increase
competition in the Israeli market.
More details will be given in the following chapters.
4.24.24.24.2 Examination oExamination oExamination oExamination of fundamental issues to be reportedf fundamental issues to be reportedf fundamental issues to be reportedf fundamental issues to be reported
The validity of survey results, carried out in previous years to determine those issues
relevant and fundamental to a report as required by GRI-4, was tested this year
according to the following papers:
a) A paper from the WEC (World Energy Council) regarding the determination of indices
for evaluating the suitability of energy systems in large countries to sustainability
indices.
b) Defining recommended courses of action in the field of sustainable development
within the framework of a paper recently published by the UN which summarizes
activities by international teams to determine Sustainable Development Goals.
An examination of the fundamental issue chosen for the report led to the following results:
39
1. In a paper* published by the WEC, an international entity with a membership of over
3000 energy companies (private, national, academic institutions and energy
ministries) from 90 countries in 2016, a comparative model was constructed to
examine the extent to which the energy system meets the requirements for meeting
the definition of “sustainable energy” which refers to three core principles:
• Energy Security – relates to optimum use of primary energy sources, reliability of
supply, reliability of infrastructures and the ability to meet demands.
• The degree to which electrical energy, as a vital commodity, is available and
usable with regard to total usage of electricity by commercial, industrial and
residential customers, to the safety of electricity usage and the extent to which
customers have access to electricity.
• The correlation between energy and environmental considerations (environmental
energy). This relates to the reduction of CO
2
emissions, the extent to which
renewable energy resources are used to produce electricity, the operation of
energy efficiency programs and demand management.
• Based on the principles above, the State of Israel is ranked 34 out of 125
countries, with Denmark, Switzerland, Sweden, Holland, Germany, France,
Norway, Finland, New Zealand and Austria in the top 10 places. The challenges
facing Israel in order to improve its ranking are: expanding the use of renewable
energy sources for electricity generation, setting targets for reducing greenhouse
gases, monitoring the success of a national program for energy efficiency, and
more. The indices provide a full response to the issues that are reported in the
present report and strengthen their substantive aspect.
2.
2.2.
2. A recently published UN study **, in which sustainable development goals were
defined as high-term interim goals (2030) for entry into sustainability, both at the
state and corporate levels, to enable comparison and to determine the success of
work programs for the integration of principles of sustainable planning based on a
uniform comparative scale. In the chart below, we examined the extent to which the
material issues for reporting in the present report (selected by our stakeholders) were
consistent with the goals set by the United Nations for sustainability (G4-18, G4-19).
40
* World Energy Council – Trilemma Index 2016
Benchmarking the Sustainability of National Energy Systems, WEC
** Sustainable Development Goals (SDG's) – UN Global Compact, GRI, 2015
Examination of the fundamental issues selected for sustainability targets (SDG):
Examination of the fundamental issues selected for sustainability targets (SDG):Examination of the fundamental issues selected for sustainability targets (SDG):
Examination of the fundamental issues selected for sustainability targets (SDG):
Fundamen
FundamenFundamen
Fundamental issues for the report
tal issues for the reporttal issues for the report
tal issues for the report
UN sustainability targets
UN sustainability targetsUN sustainability targets
UN sustainability targets
1.
1.1.
1. Common business value to the company and stakeholders
Common business value to the company and stakeholdersCommon business value to the company and stakeholders
Common business value to the company and stakeholders
1.1. Economic performances
1.2. Managing load and demand
Economic performances and contribution to national
product (SDG-8)
1.3. Availability and reliability of
electricity
1.4. Preparing for emergencies
1.5. Technological innovation
1.6. Customer health and safety
1.7. Indirect economic impacts
1.8. Employment conditions
Contribution to social sustainability (SDG-11)
Contribution to climate improvement (SDG-13)
Sustainable production and use (SDG-12)
Construction of strong infrastructures and sustainable
industrialization (SDG-9) Establishing solid
infrastructure and sustainable industrialization
(SDG-9)
Technological innovation (SDG-9)
Contributions to health and standard of living (SDG-3)
Social sustainability (SDG-11)
- Equal employment (SDG-10)
- Gender equality and empowering women (SDG-5)
- Prevention of poverty, hunger (SDG-1,2)
2.
2.2.
2. Responsible Corporate Behavior
Responsible Corporate BehaviorResponsible Corporate Behavior
Responsible Corporate Behavior
2.1 Pollutant discharge into the air
Pollutant discharge into the airPollutant discharge into the air
Pollutant discharge into the air
- Sustainable production and consumption (SDG-12)
- Encouraging use of clean energy (SDG-7)
2.2 Managing energy consumption - Contribution to climate improvement (SDG-13)
2.3 Sewage and waste - Maintaining water quality (SDG-6)
2.4 Preserving biological diversity
- Preserving land and marine biological diversity
(SDG-14, 15)
41
2.5 Adherence to environmental
Adherence to environmental Adherence to environmental
Adherence to environmental
regulations
regulationsregulations
regulations
- Strengthening corporate governance, use of
sustainability principles (SDG-16) Accessibility to
legal system (SDG-9)
2.6 Employment health and safety - Contribution to health (SDG-3)
2.7 Preventing corruption - Strong corporate governance (SDG-16)
The above comparisons, including the relationship with 13 development targets in
the area of sustainability published recently, strengthen the fundamentality of the
issues reported in the current report.
42
5.5.5.5. Stake Holder’s DialogueStake Holder’s DialogueStake Holder’s DialogueStake Holder’s Dialogue
5.15.15.15.1 Identifying StakeholdersIdentifying StakeholdersIdentifying StakeholdersIdentifying Stakeholders
The organizational environment within which the IEC operates has many stakeholders.
Identifying stakeholders is achieved through current operation and its various interfaces
(G4-25) as described in the chart following (G4-24).
43
Dialogues are regularly held with the various stakeholders with the framework of the
company’s various operations and cover a wide range of subjects that relate to
development plans, environmental projects, strategic subjects, finances, regulatory
issues and more. The content of such meetings, their frequency, communication
channels and level of dialogue change from activity to activity and are influenced by their
urgency and importance (G4-26, G4-27).
In 2014 the company established a managerial committee to promote dialogues with
stakeholders based on the following guidelines:
- Defining priority
Defining priorityDefining priority
Defining priority, dependent on essential issues on the agenda that is essential for
urgent discussion and promotion
- Continuity
ContinuityContinuity
Continuity, which defines the need for regular discussions on professional matters
and with various stakeholders
- Proactive and responsive
Proactive and responsiveProactive and responsive
Proactive and responsive, which define the need to initiate discussions with
stakeholders and willingness to comply with their requests.
- Transparency, trust and fairness
Transparency, trust and fairnessTransparency, trust and fairness
Transparency, trust and fairness, which define willingness on the part of company
representatives to conduct a dialogue in order to create trust.
5.25.25.25.2 Frameworks for a Dialogue with StakeholdersFrameworks for a Dialogue with StakeholdersFrameworks for a Dialogue with StakeholdersFrameworks for a Dialogue with Stakeholders
The company’s operations have an effect in many aspects: we provide electricity to
millions of customers, employ thousands of employees, communicate with many
suppliers in Israel and abroad, are controlled by many regulators and are in contact with
most government ministries.
We relate with great importance to the ongoing dialogue and discussion with
stakeholders, who are affected by the company's activities and naturally influence it.
Dialogue with stakeholders contributes to the improvement of our activities and helps to
adapt services and management to needs arising from the field:
44
• we conduct a dialogue with our customers within a framework of customer
surveys, meetings, initiated inquiries using a variety of channels including the
company website or social networks or the Ombudsman.
• We communicate with suppliers in a variety of ways.
• We communicate with employees through ongoing meetings, manager and
employee conferences, CEO meetings with representatives of the various units,
dealing with employee requests, inter organizational communications through the
company’s internal portal, TV screen displaying information at various locations,
the CEO's newsletter which is sent to all the company’s employees and
pensioners, feedback discussions for employees and managers, a "resources"
newsletter.
• We communicate with community and social organizations as part of activities at
company visitors' centers, round-table meetings, activities organized by the
Department of Community Affairs and more.
• We are in constant communication with investors regarding our strategic
directions, development directions, means of improving financial stability and
other issues that interest leading financial institutions in Israel and abroad as well
as analysts, investment managers, financial correspondents and others.
• We communicate with government authorities, regulators and planning authorities
through work meetings, meetings between senior management of all bodies,
provision of essential information, performance presentations and more.
45
5.35.35.35.3 The Electric Corporation iThe Electric Corporation iThe Electric Corporation iThe Electric Corporation in the Service of the Communityn the Service of the Communityn the Service of the Communityn the Service of the Community
As a leading Israeli government company, with a unique connection to the State of Israel
and as an essential service provider, we are working for the community, for the company
and tomorrow's generation of consumers who are today's students.
Social Involvement Policies
Social Involvement PoliciesSocial Involvement Policies
Social Involvement Policies
The company focuses on initiatives in the fields of
education, entrepreneurship, innovation, the fight
against poverty, the integration of the disabled and
those with special needs and support for IDF soldiers.
Policies governing our social activities constitute the
basis of work for the Human Resources and
Organization Dept., for the Community Relations Unit
for workers unions and others. Special emphasis is
placed on the adoption of IDF units, joint events for employees and soldiers, giving gifts
to those enlisting into the IDF from among employees’ families, and more.
Encouraging Employee Volunteering
Encouraging Employee VolunteeringEncouraging Employee Volunteering
Encouraging Employee Volunteering
We encourage our employees and managers to
volunteer and realize the personal and organizational
values of partnership. The company places great
importance in the creation of frameworks for
expanding the circle of volunteers and for setting a
personal example. The company has been presenting
the CEO's Award for Sustainability for more than a
decade, and through it, we recognize and honor those
employees who worked on behalf of the environment and society voluntarily and through
personal initiative.
In 2016, hundreds of workers volunteered both regularly and on a one-time basis to
provide help and assistance to others.
46
Corporation Pensioners Volunteering
Corporation Pensioners VolunteeringCorporation Pensioners Volunteering
Corporation Pensioners Volunteering
One way to maintain in contact with the company's retirees, who have accumulated rich
and diverse professional knowledge, is by creating frameworks for volunteering. For
example, the company's pensioners volunteer in Netiv HaOr, an educational program that
promotes a culture of proper behavior in an electricity-consuming environment and which
is active in over 1,500 schools throughout the country.
Internet Site
Internet SiteInternet Site
Internet Site
In recent years, we continued to renew our website in order to streamline it and make it
easier to contact IEC representatives. The company's
website is accessible to the disabled and meets
accessibility standards.
Facebook Page
Facebook PageFacebook Page
Facebook Page
Another way to communicate with customers is
through the company’s Facebook page, which, in
essence, serves as an additional means for the public
to ask questions and make complaints. In addition to handling complaints, the Facebook
page enables customers to respond to emergency situations relating to the electricity
supply. The page has more than 100,000 “Friends” and provides answers and solutions
to tens of thousands of customers. The average response time was 20 minutes (including
weekends, holidays and at night) to 98% of referrals. In addition, more than 600 initiated
posts have been uploaded to the site.
Leading Apps
Leading AppsLeading Apps
Leading Apps
Our applications complement the company's service strategy and strengthen customer
relationships in both routine and emergency situations. The company's mobile apps
enable fast and efficient service covering a range of
subjects.
Using the applications, it is possible to receive
information and report hazards, malfunctions in
47
different areas and other services. Payments can be made and it is possible to receive
immediate information also through mobile phones.
Those who register for the Personal Service are given information such as: account
history (24 months back), distribution of electricity consumption and more. General
services include: an electricity bill payment service, customer change service,
authorization regarding consumer issues, opening an account by e-mail, authorizing
standing bank order and credit card payments, reporting hazards and faults, electricity
levels, demand management data in the event of an electrical emergency and a
consumption calculator. Customers who subscribe to our email invoice service receive an
annual, user friendly consumption report which includes information that allows users to
implement economy measures.
The company’s 103 customer service line has an automatic callback mechanism (as
required by law) and is used by
approximately 980,000 customers and significantly reduces waiting times.
Our Service
Our ServiceOur Service
Our Service
In recent years, the company won first place in the consumer satisfaction survey, "Test of
the Nation", conducted by the " Geo-cartography Institute." In addition, the company won
the title "Best Company to Work For" in the BDI ranking of companies in collaboration
with The Marker.
48
6.6.6.6. Corporate GovernanceCorporate GovernanceCorporate GovernanceCorporate Governance
6.16.16.16.1 Corporate Governance CodeCorporate Governance CodeCorporate Governance CodeCorporate Governance Code
The IEC is a public-government company.
Accordingly, the Company's corporate governance
- expressed in the corporate governance code
formulated by the Company's Board of Directors -
is subject to the laws, regulations, directives and
various legal provisions applicable to the
Company, including the Government Companies
Law, the Securities Law, the Restrictive Trade
Practices Law, environmental protection laws and
others (G4-34).
Based on the IEC’s renewed vision and the
integration of the company's ethical code, the
Company's Board of Directors formulated and approved a corporate governance code.
As the IEC is a company operating in a complex world of content and an environment
saturated with legal provisions, the need arose to formulate a comprehensive and agreed
code defining the relationship between the board of directors and the management and
way in which the board of directors and its committees operate and areas of authority and
responsibility. The Code of Corporate Governance combines the main provisions of the
relevant laws and regulations, the company's articles of association and regulations,
regulatory directives and guidelines relating to the Company's operations. In addition, the
code contains rules of ethical conduct and directives that bind members of the board of
directors and management. The code gives expression to norms that reflect the
managerial and valuable concept of society (G4-44).
In accordance with the Corporate Governance Code, the company’s Board of Directors
holds, at least once a year, a closed discussion regarding the management of the
49
company's business by the CEO and officers who are subordinate to him as well as any
other matter that seems fit to those areas in which the Company engages (economic,
operational, corporate governance, etc.) (G4 -45).
The Code further stipulates that the Board of Directors must discuss once a year the
conclusions and recommendations of the Audit Committee and the Financial Statements
Review Committee regarding the effectiveness of their operations.
The main functions of the Board of Directors are to outline Company policy and to
supervise the manner in which it is implemented out by the CEO and senior
management. This requires ongoing monitoring of the activities of the CEO and
management, while maintaining the existence and suitability of functions and tools
required for this purpose. The manner in which decisions made by the Board of Directors
and Management are implemented must also be monitored (G4-35).
The Board of Directors executes the policies and supervision as defined for it and fulfills
its responsibility and authority after discussing proposals from CEO and management
whilst taking into consideration the position of the government and the various regulatory
bodies. After examining the range of alternatives and proposed plans, the Board of
Directors approves a selected alternative in the areas of strategy and policy, budget, and
work plans etc.
The Board of Directors discusses the issue of sustainability strategy and policy and
approves the main strategy, policy and directions for environmental and social
sustainability (sustainable development). The Board of Directors authorizes company
management to act to realize strategies and policies for corporate sustainability on all
levels in order that the company will be a leading company in this field. Within this
framework, a steering committee was appointed, headed by the company’s CEO and
many environmental sustainability work teams were reorganized and various issues were
promoted according to approved timetables. These included the establishment of control
mechanisms, prioritization and periodic reporting (G4-45).
50
The Chairman of the board of directors, the CEO and members of the Board held
numerous discussions with representatives of senior government ministries
(Environmental Protection, Energy and Water, Public Electricity Authority, the Ministry of
Finance, the Ministry of the Interior, etc.) to improve the Company's economic
performance and promote environmental and social projects. During discussions,
consultations were held with stakeholders (representatives of government ministries)
regarding strategic projects with high budgetary and environmental significance. The
frequency of these discussions was influenced by the importance of the subjects and, if
necessary, also took place several times a month (G4-37).
The Board of Directors does not delegate its powers to the organization's managers and
employees. However, in accordance with board of directors, decisions regarding all
issues, including issues of sustainability, responsibility are transferred to the professional
management entity, responsible for that specific issue within the Company, and its
implementation is monitored according to Company procedures. The board of directors is
updated on the progress of each of such issue in future discussions in the relevant
committee or in the plenum.
The IEC Board of Directors appointed committees to deal with essential matters, all of
which were intended to streamline the work of the board. These committees regularly
report to the board of directors
about their activities. Decisions
of the committees require the
approval of the board.
51
6.26.26.26.2 Composition of the Composition of the Composition of the Composition of the Board of DirectorsBoard of DirectorsBoard of DirectorsBoard of Directors
As a rule, since the company is a governmental company, directors are appointed (G4-
38) by the Minister of Finance and the Minister of National Infrastructures, Energy and
Water ("the Ministers") after consultation with the Committee for the Examination of
Appointments in Government Companies.
A company director is appointed for a period of no more than three years from the date
their appointment is approved, and a director who has ceased to serve may be
reappointed (by the Ministers). An external company director is appointed for three years,
and the company may reappoint them for two additional periods (only), each of three
years (G4-39).
As of December 31, 2016, the Chairman of the company’s Board of Directors is Maj.
Gen. (ret.) Yiftach Ron-Tal, who holds no other position in the company. All other board
members are not subordinate to the company's CEO (G4-39).
52
6.36.36.36.3 Preventing Conflict of InterestPreventing Conflict of InterestPreventing Conflict of InterestPreventing Conflict of Interest
As part of the appointment process, each director signs a letter, from the Committee
Examining Appointments in Government Companies, obligating them to avoid any conflict
of interest. In addition, and in accordance with company's procedure on this issue, upon
receipt of a letter of appointment regarding a new company director, the Secretary of the
Board of Directors must forward the questionnaire that the director answered whilst still a
candidate for office. In addition, prior to the commencement of any plenum meeting of the
Board of Directors, all participants are requested to properly disclose the existence of any
personal interest and/ or conflict of interest that have any connection to issues on the
agenda (G4-41).
The Government Companies Authority circular also states that if a conflict of interest or a
suspicion of a conflict of interest arises between the director's role as a director of the
Company and other business and/or personal affairs, they must refrain from any action,
involvement or participation in any discussion or vote for the purpose of making a
decision within the framework of
the board of directors or any of
its committees and that could
harm the company or give
preference to their other
interests or to an entity related to
them as an employer, a
customer or a supplier or
partner, and that is incompatible,
first and foremost, with the best
interests of the company.
In accordance with the provisions of the law and regulations for the prevention of conflicts
of interest as applicable to a director prior to their appointment, a company director must
declare any conflict of interest immediately upon its creation and absent themselves from
meetings of the board of directors. In the event that a conflict of interest or suspicion of
conflict of interest exists between the director's duties and their other business and/or his
53
personal affairs, the Company's legal advisor examines and provides their opinion on the
matter and instructs the director on the appropriate response required.
As required by law, the Company has an internal auditor. The internal auditor is not a
company employee and even serves as the supervisor for public and employees
complaints. However, this position does not, in any fashion, impair the fulfillment of his
primary function. The internal auditor has no essential business relations or any other
essential relations with the company, and does not hold external any position that creates
or is likely to create a conflict of interest with their position as internal auditor.
6.46.46.46.4 Ethical CodeEthical CodeEthical CodeEthical Code
In an organizational context, ethics deal with guiding principles for identifying appropriate
action, and the ethical code constitutes an official statement of the totality of values and
conduct that the company expects its managers and employees to adopt and implement
(G4-56).
The updated version of the Code of Ethics was approved in 2014 and was formulated as
a part of a collaborative process during which comments were received from employees,
following the comprehensive implementation of the first code (approved in 2011). The
updated code can be found on the organizational portal and on the company's website.
The company provides a variety of channels for receiving and handling approaches from
employees: internal auditor, ombudsman, managers of human resources departments,
disciplinary committees, legal advisors, direct managers, a national ethics officer and
ethics trustees of divisions and districts.
Those involved in the ethical system handle a multitude of requests each year, the
majority of which are requests for advice or clarification of current matters relating to
work. Inquiries related to ethics are open so as to enable clarification and a reply to the
applicant. In addition, all referrals are registered as is the status of their treatment,
including reference to the applicant's level of satisfaction when relevant.
In the fourth quarter of 2015, the Company's Board of Directors approved a document
entitled "Ethical Rules in Digital Space". The document is a product of long-term work,
involving many employees and managers as well as members of the ethics lineup. The
document contains five guiding principles: responsibility, honesty and integrity, mutual
54
respect, protection of privacy and protection of information. The document also includes
recommendations regarding activities of company employees in digital space and was
integrated into the Company's departments in 2016.
In 2017, the company engaged in the implementation of ethics in the matter of "providing
service to external and internal customers". The activity took place in most of the
company's units, with the aim of strengthening excellence in the service in general and
the value / human aspect of the service in particular.
6.56.56.56.5 Preventing Embezzlement and FraudPreventing Embezzlement and FraudPreventing Embezzlement and FraudPreventing Embezzlement and Fraud
The IEC conducts extensive business activity and is therefore exposed to a wide range of
embezzlement and fraud risks that may cause financial damage, damage to the
company’s image and damage to public confidence (G4-58). The danger of
embezzlement and fraud may be realized as part of work processes and/or use of
supporting information systems. The main areas of risk identified in fraud and
embezzlement cases (2009, 2013) are in the following areas: purchasing and contracting
with suppliers, managing tenders, collecting revenues, warehousing and management of
warehouses and inventory, wages and information management. Therefore, many
sensitive processes were identified and many recommendations were made following
which a detailed work plan for the period of 2016-2018 was formulated. One of the most
important recommendations relates to the need to increase managerial attention to this
issue (G4-58).
The Corporate Governance Code of the Board of Directors includes a chapter relating to
ethical rules for members of the board of directors where:
• All members of the Board of Directors, including new members, are required to
know the Corporate Governance Code and its Ethics Chapter.
• The company's legal advisor provides individual guidance to each new member of
the Board of Directors, as part of their training program, which details those
sections of the law requiring them to act honestly and fairly.
55
B.B.B.B. Essential Aspects of the Company’s Operations Essential Aspects of the Company’s Operations Essential Aspects of the Company’s Operations Essential Aspects of the Company’s Operations
* Classification of essential matters by areas of influence *
* G4-19 – List of essential subjects
Note: Regarding environmental matters, the company publishes a detailed environmental
report, every year, on its website.
Responsible Corporate
Conduct Joint Business Value
56
1.1.1.1. Joint Business Value for the Company and forJoint Business Value for the Company and forJoint Business Value for the Company and forJoint Business Value for the Company and for
StakeholdersStakeholdersStakeholdersStakeholders
The Importance of the Subject (G4
The Importance of the Subject (G4The Importance of the Subject (G4
The Importance of the Subject (G4-
--
-DMA, G4
DMA, G4DMA, G4
DMA, G4-
--
-20, G4
20, G420, G4
20, G4-
--
-21)
21)21)
21)
The economic performances of the Company reflect its capability:
• To run day to day operations on an economic basis.
• To implement the development plans of the electricity system, in order to support
the market requirements for continuous, reliable and readily available electricity
supply.
• To raise the budgets required for operations through the capital markets (the
Company is not supported by State budgets).
• The subject is at the center of management effort of the senior management
team, professional entities and the Board of Directors, which heads up laying
down financial policy and oversees the materialization thereof.
Objectives
ObjectivesObjectives
Objectives
• Improving the financial robustness of the company for future economic scenarios
related to the electricity market being opened up to competition.
• Reinforcing the business stability of the Company through locating new growth
engines.
• Reducing the Company’s financial debt by NIS 500 million every year.
• Improving the debt to EBITDA ratio to a level acceptable at an advanced electric
corporation, by 2020 (Target: 4.5).
• Financial risk management through formulating a plan to reduce risks.
• Improving the dialogue with the various regulatory entities on a basis of
transparency and credibility of reporting including incorporating actual costs in the
revision of the tariff on the part of the electricity Authority.
57
Main Activities
Main Activities Main Activities
Main Activities
• An improvement in the credit rating of the Company was achieved in 2017, both in
Israel as well as overseas, as a result of putting a vigorous multidisciplinary
efficiency plan into operation.
• The rating companies stipulate that the financial forecast for the Company for the
coming years is stable and reflects the evaluation that the company’s business
profile intensified in a sustainable manner.
• The financial debt of the Company decreased from approximately NIS 52 billion in
2012 to approximately NIS 42 billion in the report year as a result of the financial
policy that was laid down.
• The development budget for the report year was approximately NIS 3.8 billion and
is expected to remain at this level during the next few years as well.
• The Company's economic performance is described in detail in the Company's
financial statements (G4-EC1). It can be noted that although the company's
revenues in 2017 were similar to revenues in 2016, the annual profit increased
significantly (by tens of percent) compared to last year (NIS 1.1 billion).
58
1.11.11.11.1 Availability and Reliability of ElectAvailability and Reliability of ElectAvailability and Reliability of ElectAvailability and Reliability of Electricityricityricityricity
The Importance of the Subject
The Importance of the SubjectThe Importance of the Subject
The Importance of the Subject
(G4
(G4(G4
(G4-
--
-DMA, G4
DMA, G4DMA, G4
DMA, G4-
--
-20, G4
20, G420, G4
20, G4-
--
-21)
21)21)
21).
..
.
• The supply of electricity for market purposes is a vital service that impacts on the
economic stability of the state of Israel.
• The importance of a reliable a readily available supply of electricity is derived from
the fact that the dependence of the market on electricity has grown over the years
and therefore the company industriously provides quality and professional
services to its customers and develops products that meet its needs for purposes
of ensuring:
• An improvement in the experience on the part of the customer who wishes to
obtain services from the company.
• Customer quality and safety – at the highest possible level.
Objectives
ObjectivesObjectives
Objectives
• The reliability of supply will equal 150 minutes of non-supply at maximum. This
index refers to the average minutes of non-supply per customer (from high
tension).
• The available output of the company’s production units (not including the
production units of private electricity generators) will comply with the Electricity
Authority requirements dependent upon the type of production units (for example
– 88% annual availability for combined cycle type units).
• Planned maintenance days at an annual level will comply with the Electricity
Authority requirements (for example: up to 25 days of planned maintenance for
combined cycle type units).
Main Operations
Main OperationsMain Operations
Main Operations
• The company estimates that it complied, during the report year, with the absolute
majority of standards set by the Electricity Authority, with respect to quality and
availability of the services provided by the company to its customers.
• In 2017, the reliability of supply was about an average of 135 minutes of non-
supply per customer (from high tension) compared to about 167 minutes of non-
supply the previous year. (Reliability of supply is measured mainly using the
“Minutes of non-supply index” meaning how many minutes, on average, did
customers experience a blackout situation).
59
• The company met its obligations of implementing the development plan of the
electricity grid and which was approved by the Minister of Energy, with the
exception of the project in which licensing demands were received, which caused
a delay in the deadlines (G4-EU10).
• With respect to the development of the electricity supply chain by 2020, the
following can be stipulated, (G4-EU10):
• Development of the production segment will be based on projects of private
producers
• With regard to the development of the transformation and network systems by the
end of the decade: it will include: 12 ea. 161 / 400 Kw. switching stations, of a
total output of more than 16,000 Mw., about 200 ea. 161 / 24 Kw. sub stations,
owned by the company, about 800 km. of 400 Kw. power lines (circle km. [sic]),
about 4,600 km. of 161 Kw. tension lines and about 30,000 km. of high tension
lines, etc.
• By the end of the decade, an accelerated development of the electricity grid is
expected for purposes of securing the reliability and ready availability of power
supply and therefore the development budget will be about NIS 4 billion per
annum.
60
1.21.21.21.2 Managing Load on the Demand SideManaging Load on the Demand SideManaging Load on the Demand SideManaging Load on the Demand Side
The Importance of the Subject
The Importance of the SubjectThe Importance of the Subject
The Importance of the Subject
(G4
(G4(G4
(G4-
--
-DMA, G4
DMA, G4DMA, G4
DMA, G4-
--
-20, G4
20, G420, G4
20, G4-
--
-21)
21)21)
21)
• The subject is important due to it being a technical means of controlling the
balance between the demand of the electricity market at any particular time, and
the available capacity of the production units (of the IEC and of the private
electricity generator companies).
• By means of managing load on the demand side,
the supply of electricity will be guaranteed in those
anomalous situations in which there is a disparity
between the available generating capacity and the
peak demands of the market. The following can be
stipulated as being anomalous situations:
Unexpected peak demand in summer / winter,
extended maintenance of the production units
which is over and above that planned, complex
malfunctions, etc.
• The most effective way to manage load on the
demand side is based on coming to an
arrangement with large customers who will
suspend their electricity consumption from the
national grid in return for a reduction in the
electricity tariff.
Objectives
ObjectivesObjectives
Objectives
• Providing a controlled and effective solution for anomalous situations in electricity
supply as described above while refraining from situations of non-supply of the full
demand for electricity.
• A reduction or prevention of costs incurred by consumers as a result of situations
of non-supply of electricity.
• Improvement of the effectiveness of activating the means to manage load on the
demand side by identifying anomalous situations as early as possible.
Main Activity
Main ActivityMain Activity
Main Activity
For purposes of managing the demand, arrangements with large consumers, based on
special tariffs, are activated, vis-à-vis their willingness to disconnect from the national
electricity grid pursuant to advance alerts when a reduction in the demand for electricity is
effected by the activation of local means of production.
61
1.31.31.31.3 Gearing Up for Emergency SituationsGearing Up for Emergency SituationsGearing Up for Emergency SituationsGearing Up for Emergency Situations
The Importance of the Subject (G4
The Importance of the Subject (G4The Importance of the Subject (G4
The Importance of the Subject (G4-
--
-DMA, G4
DMA, G4DMA, G4
DMA, G4-
--
-20, G4
20, G420, G4
20, G4-
--
-21)
21)21)
21).
..
.
• As a vital services provider and pursuant to the circular put out by the Government
Companies Authority, the company is obligated to set policy and ways of
operation to guarantee functional continuity in emergency situations.
• During emergency situations.
• As part of the gearing up for emergency situations, scenarios for natural disasters,
for operational malfunctions, for cyber incidents and for pandemics were
prepared, but also for security related incidents.
• The gearing up includes preparing work plans and emergency procedures,
defining emergency service levels, retaining manpower for emergency situations,
conducting training, instruction and exercising of workers in various situations and
learning lessons from actual incidents including tracking implementation.
• The company has a security system, a fire extinguishing system, first and
immediate response emergency rescue teams including the logistic means
required for emergency situations.
• The company is geared up for functional continuity of the operational, financial,
computer, communications, spokesman, etc., systems. Furthermore, national
internal drills are conducted on a fixed annual basis, including taking part in
national exercises conducted by dedicated authorities, the Homeland Command
the Israel Police, etc.
• Due to the essential services provided by the company, it is liable to constitute a
focal point for hostile acts aimed at its facilities, including cyber activities. The
company obtains guidelines from certified entities.
Objectives
Objectives Objectives
Objectives
• The company strictly maintains safety in work procedures also in emergency
situations with the objective of protecting the lives of its employees and its
customers.
• The company will act to reduce and minimalize the damages resulting from a
variety of emergency situations by means of gearing up in the best possible
manner to contend with a broad range of events.
• The company will make sure to protect the functional continuity in the field of
activities located as being important and will guarantee the supply of electricity
62
pursuant to indexes set in the various emergency scenarios, including the time for
the restoration of operational, computer and other systems damaged in
emergency situations.
Main Activities
Main ActivitiesMain Activities
Main Activities
• The company held two nation-wide exercises in 2017, of gearing up for summer
and winter in which the preparedness for various scenarios was checked. The
scenarios included: Extreme weather causing from unexpected peak demand,
cyber incidents, malfunctions and the shutdown of power stations and power
lines, fires or floods impacting power lines and facilities, etc.
• The company and its facilities are exposed to acts of god such as powerful
earthquakes, tsunamis, floods that are liable to lead to additional disasters
occurring, such as explosions at the facilities, fire, leakage of hazardous materials,
etc.
• Based upon the analysis of the stringent scenarios for earthquakes in Israel,
reinforcements and anchoring of various components were carried out based on a
priority sequence, various reviews were carried out to detect weak points in
various systems, etc.
• The company’s facilities are exposed to risks of various types of fire in light of the
fact of fuel being located at its sites, as well as hazardous materials, fire charges
(concentration of flammable materials), carrying out of work with naked flames,
facilities in which the temperature and pressure is high, (such as steam boilers).
The company operates a fire extinguishing system that includes sophisticated fire
detection and extinguishing systems which were designed pursuant to stringent
standards, fire-fighting services at the power station designated also for a case of
forest and brush fires in the vicinity of power lines.
63
1.41.41.41.4 Technological Innovations (R&D)Technological Innovations (R&D)Technological Innovations (R&D)Technological Innovations (R&D)
The Importance of the subject
The Importance of the subjectThe Importance of the subject
The Importance of the subject
(G4
(G4(G4
(G4-
--
-DMA, G4
DMA, G4DMA, G4
DMA, G4-
--
-20, G4
20, G420, G4
20, G4-
--
-21)
21)21)
21).
..
.
• As a leading company in the market, The Israel Electric Corporation believes in
entrepreneurial education in Israel that has already proved the potential inherent
therein to promote industry.
• The integration of advanced technologies in the core activities of the company,
has led to energetic oriented streamlining, manpower efficiency, the shortening of
maintenance duration, an improvement in the employees’ motivation, an
improvement in the reliability of the electricity supply and, as a result, an
improvement in economic performance. Furthermore, the topic assists in
exploiting the multidisciplinary
professional capability of the
company employees to the full.
• The company assists in promoting
new technological ideas of
entrepreneurs from outside of the
company. As of 2009, a technological
incubator was established, which
provides budget assistance as well as laboratory facility and other assistance to
entrepreneurs with ideas that have passed screening and on a condition that the
ideas are related to the fields of activity of the company.
• In addition, the company promotes research and development activities with
academics from various fields.
Objectives
ObjectivesObjectives
Objectives
• Achieving high technological preparedness prior to the expected changes in the
world of electricity over the next few years, such as: decentralization of sources of
energy, the use of renewable sources of energy, the development of a smart
electricity grid, the integration of a bi-directional digital meter, the use of electrical
vehicles, the development of advanced means of storing energy, the use of large
capacity data storage facilities for purposes of carrying out innovative analysis
using artificial intelligence, etc.
• The development of business initiatives abroad in tangential fields to those of the
fields of activities of the company, with the objective of expanding the fields of
64
endeavor and to take advantage of the extensive professional knowledge existing
within the company.
Main Activities
Main Activities Main Activities
Main Activities
• Contracts were signed with 20 enterprises at the technical incubator (G4-EC7)
and in 2016, one of the enterprises was purchased by an American company
(G4-EC8).
• The majority of activities in the field of business enterprises are aimed at the
former Soviet Union countries, Eastern Europe, Africa, India, etc. (G4-EC8).
The future is already here
The future is already hereThe future is already here
The future is already here:
• The company is promoting new projects in the field of energy efficiency in local
councils around the power station at the Orot Rabin site, has entered the field of
micro-networks (which relates to the establishment of an independent electricity
grid based on renewable energy sources and advanced energy storage facilities),
and installs two-way digital electricity meters Solar cells to supply self-
consumption while injecting excess electricity into the grid and more.
1.51.51.51.5 Customer Safety and HealthCustomer Safety and HealthCustomer Safety and HealthCustomer Safety and Health
The Importance of the Subjec
The Importance of the SubjecThe Importance of the Subjec
The Importance of the Subject
tt
t
(G4
(G4(G4
(G4-
--
-DMA, G4
DMA, G4DMA, G4
DMA, G4-
--
-20, G4
20, G420, G4
20, G4-
--
-21).
21).21).
21).
• Customer health and safety is a critical matter in light of the fact that electricity is
liable to be dangerous from the safety aspect, should the use thereof not be
affected in a proper manner.
• The company’s activities are liable to cause environmental, health and safety risks
and therefore, subject to extensive regulation.
Over the course of the past few years, there has been an aggravation in the
environmental regulatory requirements and in the environmental overseeing and
enforcement, so that the company is acting to map the potential effects of such
aspects on the health and safety of its customers.
• Along its way to prevent and minimize the ramifications of its operations, the
company complies with stringent standards in the field of electricity generation,
transmission, transformation and distribution of electricity and invests significant
budget every year in such activities, including training, protective measures and
public relations.
• The company believes in the following
The company believes in the following The company believes in the following
The company believes in the following principles in handling the matter:
principles in handling the matter: principles in handling the matter:
principles in handling the matter:
• Compliance with the requirements of the law and the regulations on the subject of
electrical safety.
65
• Regular monitoring in order to verify the compliance with the standards to which
the company is obligated.
• Full transparency of the results of the monitoring.
• Maintaining customer safety using active means (for example, preventing access
to the company’s under tension facilities, signposting) and using passive means
(transferring warnings through the mass media).
• Activating the principle of “intelligent abstaining” to reduce health implications (for
example, from electromagnetic fields).
• Publishing environmental reports including the details of the environmental
implications resulting from its operations, at the company’s website.
• Accordingly, the company publishes up to date information on matters that the
Accordingly, the company publishes up to date information on matters that the Accordingly, the company publishes up to date information on matters that the
Accordingly, the company publishes up to date information on matters that the
customers are interested in understanding and receiving reliable data, at its
customers are interested in understanding and receiving reliable data, at its customers are interested in understanding and receiving reliable data, at its
customers are interested in understanding and receiving reliable data, at its
website:
website:website:
website:
• Information regarding electromagnetic fields: What is customary overseas, what is
the situation in Israel, etc.
• Information regarding the emissions released by power stations based on
continuous measurement by dozens of monitoring stations, which are checked by
external entities such as the Urban Associations for Environmental Protection and
the Ministry of Environmental Protection.
Main Activities
Main ActivitiesMain Activities
Main Activities
• The company has been operating the “Path of Light
Path of LightPath of Light
Path of Light – A Safe Way of Life in the
Electricity Era” program for the past 11 years. The program encompasses more
than 1,550 schools in 200 local authorities all over the country and over 1 million
pupils have so far attended the program. (G4-PR1).
• In order to improve the level of public safety and to prevent electrocution on the
part of citizens, the company continues to head up a project to improve the
protective means and the signs
on electrical poles to prevent
climbing. This is true in particular
in population centers where, as
part of the project, about 160,000
electrical poles were protected at
a total cost of tens of millions of
Shekels. (G4-PR1).
• The company handles thousands
66
of inquiries coming in from customers on matters of electromagnetic fields,
handling noise from transformers and electrical wires in the vicinity of residential
areas, etc. As part of such handling, field examines are conducted, measurements
are taken by certified entities and, as required, the facilities are serviced, etc. (G4-
PR1).
• As part of the activities to reduce the levels of magnetic fields as part of the
initiated operation of the principle of “initiated abstaining”, improvements and
upgrades of facilities are carried out at an annual cost of approximately NIS 4
million and, as part of a multiyear work plan coordinated with the representatives
of the Ministry for Environmental Protection.
1.61.61.61.6 Indirect Economic EffectsIndirect Economic EffectsIndirect Economic EffectsIndirect Economic Effects
The Importance of the
The Importance of the The Importance of the
The Importance of the Subject (G4
Subject (G4Subject (G4
Subject (G4-
--
-DMA, G4
DMA, G4DMA, G4
DMA, G4-
--
-20, G4
20, G420, G4
20, G4-
--
-21)
21)21)
21)
• As a large industrial company in the market, the company invests, in addition to
the development of infrastructure, also in the provision of additional services, as
part of its responsibility towards the community.
• As part of the company’s community oriented activities, the company is subject to
the guidelines of the regulator, and mainly invests in cooperation in the fields of
both formal and informal education that are tangential to the world of its content.
• The company holds meetings with the organizations with which it operates in
order to identify needs and the projects are formulated accordingly, for the benefit
of the community and while maintaining the objective that the activities will bring
added value both to the community as well as to the company.
• All this is in order to add true content to the economic, environmental and
community oriented commitment of the company that perceives itself as having a
continual commitment to operate on the leading edge of technology and
simultaneously to demonstrate responsibility towards the environment in which it
operates.
• Under the power of all these, the subject of indirect economic effects is perceived
as being significant both inside as well as outside of the company.
• The endeavors with respect to the community are split into three fields, (EC7-G4):
• Investment for the benefit of the community at the direction of the regulator.
• Voluntary and joint activities together with community entities.
• Contributing and volunteering workers (activities of the workers association).
67
Main Activities
Main ActivitiesMain Activities
Main Activities
• The investment for the benefit of the community at the directive of the regulator.
The company invested approximately NIS 700 million in the electricity generating
sector (G4-EC8). In addition, as part of the costs of the operation of power
stations and associated expenses of fuel, the company invested approximately
NIS 100 million. The company also invested approximately NIS 50 million in the
other electricity sectors (transmission, transformation, distribution).
• We train and empower the youth to lead the charge on the subject of energy
oriented streamlining in their community, as part of the a special content focuses
learning program, such as: The “Energy Oriented Streamlining” (change in
conduct) study program for Junior High School pupils in 95 local authorities by
means of about 120 annual study programs focusing on the subject of energy
oriented streamlining as a routine in life. About 30% of the programs are
conducted in the non- Jewish sector.
• The “Green Leadership” study program
The “Green Leadership” study program The “Green Leadership” study program
The “Green Leadership” study program on the subject of energy oriented
streamlining, in conjunction with the ORT network. The program incorporates 30
schools from the 7th to the 12th grades across a broad range of study streams.
• T
TT
The “Smart City
he “Smart Cityhe “Smart City
he “Smart City" – Clever Use of Electricity and Energy Oriented Streamlining”
was launched in 60 study programs on the topic of Smart Cities in conjunction
with “Knowledge Industry”.
• The “Leading Electricity Savings”
The “Leading Electricity Savings”The “Leading Electricity Savings”
The “Leading Electricity Savings” program was incorporated in some 20 Mifal
Hapa’is clusters.
• The “Experiencing Industry”
The “Experiencing Industry”The “Experiencing Industry”
The “Experiencing Industry” program, the objective of which is to encourage high
school pupils to choose technological education, to improve the quality of
education, to support the adaptation of the vocational technological education of
the pupils to international standards, to promote the vocational development of the
pupils and to create a professional technological reserve for industry, for the
market and for the I. D. F. The connection to industry already during the course of
studies is vital and
constitutes an integral part
of the study program.
• The “Pre Academic
The “Pre Academic The “Pre Academic
The “Pre Academic
Guidance” Program
Guidance” ProgramGuidance” Program
Guidance” Program
• 3,000 outstanding pupils
from the 11th and 12th
grades from all over the
68
country: Arabs, Bedouins, Druze and Circassians, participate in the program to
encourage teenagers to progress towards academic studies and to integrate
properly in the labor market in Israel.
About one third of these pupils visit the Rabin Lights power station and attend
lectures given by engineers and economists from the various sectors, who tell
their personal success stories and the course of their integration into their jobs at
the company.
• The “Pioneer Project” Program
The “Pioneer Project” ProgramThe “Pioneer Project” Program
The “Pioneer Project” Program
The purpose is to encourage multidisciplinary technological studies of high school
pupils and to present the multidisciplinary layers of the industry. The pupils
integrate in industry in the subject of team work and project management and this
is in parallel to studies conducted in laboratories.
• The “Future Trend” Program
The “Future Trend” Program The “Future Trend” Program
The “Future Trend” Program
An experimental program for special needs children who would like to integrate
into certification studies, in technological - professional education. The pupils tour
various places of work including the various sites of the company, where they are
exposed to a range of employment opportunities.
• The Technicians and Matriculation Program
The Technicians and Matriculation ProgramThe Technicians and Matriculation Program
The Technicians and Matriculation Program
A studies track initiated by the Ministry of Education for the promotion of
technological education to increase the number of pupils studying in engineering
streams in order to expand quality - technological manpower in industry and in the
military.
The program includes dedicated tours and lectures by experts in the company
that reflect its endeavors in a broad scope of topics in the world of electricity.
• The establishment of a high school for electrically orien
The establishment of a high school for electrically orienThe establishment of a high school for electrically orien
The establishment of a high school for electrically oriented professions
ted professions ted professions
ted professions –
––
–
the
the the
the
AMAL Energy Tech.
AMAL Energy Tech. AMAL Energy Tech.
AMAL Energy Tech.
This year, a school for
electricity oriented
professions was established, which
operates in the format of a factory
contiguous high school, in the
field of electricity and
environment. The school was
set up at the Heftzibah site in
conjunction with the AMAL
Network for Technological
69
Education and the goal is to educate the next generation of professional electrical
workers. The activities commenced with 50 pupils, both boys and girls, in two 10th
grade classrooms, in the Electricity and Mechanical Stream.
• Preserving and Bestowing Heritage
Preserving and Bestowing HeritagePreserving and Bestowing Heritage
Preserving and Bestowing Heritage
• Continuation traditional and multiyear actions with the “Naharayim Experience” at
the old [Kibbutz] Gesher to commemorate the heritage of the company since its
inception.
• The Israel Electric Corporation opened the gates of the Reading Power Station to
the general public as part of the “Homes from the Inside in Tel Aviv” program, in
addition to the other company sites which are opened up each year.
• The restoration work has been completed on the “Landmark” statue – the first
electrical pylon that came out of Naharayim, adjacent to Kibbutz Gesher.
• The Visitors Center
The Visitors CenterThe Visitors Center
The Visitors Center
• About 90,000 visitors visited the three visitors centers.
• We integrate visits by participants in the programs in all areas of community
activity, and their leaders in the visitors centers.
• Physical accessibility was completed at the Orot Rabin and Heftzibah Power
Station Visitors Centers.
• The service accessibility has also been completed at Heftzibah.
• For the first time invitations in the Amharic language were produced and
dispatched, aimed at Ethiopian groups who also were trained in this language.
• In Conclusion
In ConclusionIn Conclusion
In Conclusion: The total direct and indirect exposure to community activities sums
up to about 280,000 people including advertising in new media and media
channels.
The Community Flagship Project
The Community Flagship Project The Community Flagship Project
The Community Flagship Project –
––
–
The Path of Light
The Path of LightThe Path of Light
The Path of Light
The Israel Electric Corporation has been running the Path of Light program– a program of
safe life in the electricity era for the past 12 years. This is an education program for
formulating a culture of sensible and proper conduct in general and in an electricity
consuming environment in particular. The program, which educated for a safe lifestyle,
was launched with the intent to encourage children and, through them, other community
circles, to act sensibly and in a safe manner in general and in an electricity consumption
environment in particular. About 1,550 schools in over 200 local authorities all over the
70
country participate in the program, with over 200 employees and retirees taking a
volunteer part in the program each year.
The Path of Light program is based upon the idea that understanding the topic of safety,
creating a culture of intelligent conduct and encouraging children to be responsible both
to themselves and to the community, will prevent accidents and will facilitate a high
quality of life while protecting the environment against hazards. The system - settlement
program formulated collaboration at the town and village level, nurtures and encourages
young leadership, clarifies values of environmental quality, responsibility and social
involvement, raises dilemmas, encourages a culture of safety oriented leadership, builds
bridges between populations in the community through the children, who act as agents of
change and most important of all, the encounter program encourages caring, involvement
and responsibility on the part of the children vis-à-vis their environment and contributed to
the individual, to the family and to the community.
More than 1 m
More than 1 mMore than 1 m
More than 1 million pupils
illion pupilsillion pupils
illion pupils have participated in the project over the past decade, who, in
the not so distant future, will be electricity consumers “with a basic understanding in the
fields of safety, electricity savings and energy streamlining” with openness and
willingness to integrate innovation in the community.
A budget of NIS 7 million was invested in 2017 (G4-EC8), with the main fields of study
being as follows:
• Safety and means of lighting
Safety and means of lightingSafety and means of lighting
Safety and means of lighting – with the objective of developing awareness of the
importance of safety in using electricity in general and means of lighting in
particular and to deal with the topic of producing energy and light energy in an
experience oriented way.
• Electrical technology and animals
Electrical technology and animalsElectrical technology and animals
Electrical technology and animals – with the objective of developing awareness to
environmental effects of the development of technology taking responsibility for
the environment and for the animals in the environment.
• Energy Preserving City
Energy Preserving CityEnergy Preserving City
Energy Preserving City – with the objective of clarifying what the smart use of
electricity is, to examine ways of the safe use of the nearby and far away
71
environment as one, and to contend with environmental dilemmas resulting from
wasting energy.
• Energy and safety
Energy and safetyEnergy and safety
Energy and safety – with the objective of examining the properties of various
materials, (conductors and insulators), to experiment with creating an electrical
circuit and to discuss the significance of the properties of the material within the
context of maintaining safety with respect to electricity.
• Contributing and Volunteer Workers
Contributing and Volunteer WorkersContributing and Volunteer Workers
Contributing and Volunteer Workers
While the Israel Electric Corporation as a government company, is prohibited
from giving donations, then the workers association, which is a separate entity, is
at liberty to raise funds by way of donations from the employees’ sources. This is
beneficial to the community, hospitals, day care centers, various associations and
elite I. D. F. units. For example, a donation to renovation a house for young girls at
risk in Ashkelon, to the Armored Corps House, for lone soldiers in Tel Aviv,
experience oriented and creative activities for people with disabilities in Neve
Tzedek and Rechovot.
1.71.71.71.7 Terms of Employment Terms of Employment Terms of Employment Terms of Employment
In 2017 the company employed 11,902 permanent, temporary and other workers. All
would agree that the IEC is a large and significant employer which provides a place of
employment for tens of thousands of people, giving attention also to the fact that large
sized work and service contractors also rely indirectly on the employment system of the
company and are nourished by it. The influence exerted as an employer is also evident
both to its employees – in the internal level as well as on the employees of its vendors –
in the external level despite the fact that it would be prudent to note that there is no
employer – employee relations existing between employees of contractors and the
company. In all matters related to the engagement of contractors’ employees – this is by
and large is effected for predefined missions. Each contractor determined the number of
workers required for the required mission, and independently manages the records with
respect to the workers under his responsibility. However, pursuant to the employment of
workers by subcontractors law in the fields of guarding and cleaning at public
organizations, 5773 – 2013, which came into effect on August 6, 2013, the CEO of the
company issued instructions obligating contractor’s employees who provide services to
72
the company to clock in and out every day and thus, for the first time, there is a database
with respect to all the contractor’s employees working at the company, (G4-DMA).
The Israel Electric Corporation aspires to continue to lead the electricity market in Israel,
while adapting to the changing market conditions and economic, social and technological
changes occurring in Israel and around the world and its employees are a major asset
and the main part in materializing this vision. This is from an aspiration to preserve a
sense of pride and belonging amongst them and to encourage constant commitment and
creativity (G4- 20, 21).
Worker Employment Policy
Worker Employment PolicyWorker Employment Policy
Worker Employment Policy
Recruiting workers for positions in the company is executed while ensuring the
transparency of the process, the principle of equality and affirmative action pursuant to
the law.
The company allows processes of workers mobility as part of worker motivation and
occupational diversification. Therefore, recruitment is effected while granting priority to
internal sources and to permanent workers. Only after exhausting the internal recruitment
potential and the encouragement of worker mobility and retraining in the company and, in
the event that a suitable candidate is not located, the company turns to a recruitment
process from external sources (G4-20).
Based on the law and pursuant to the
guidelines of the company Board of
Directors, family members of employees
are not to be recruited except in special
cases. This is, with the objective of
preventing the possibility of a conflict of
interests or subordinate relations
between a new recruit and his or her
relative. In light of this, at the worker
recruitment stage, a stringent control
process is conducted, during the course
of which, every case in which every
candidate who submits his application
for employment at the company is a
relative of a company employee. In such
a case, the intake process is contingent
73
upon compliance with clear criteria and obtaining the authorization of various entities at
the company as well as the authorization of the company’s Board of Directors.
The company maintains an organizational culture that respects the rights of the employee
and enables the formulation of a balance between family and the work place and
upholding a recreational culture (Flexi-time, a range of sports activities, well-being,
culture and recreation).
From the aspect of salary conditions, the company supports salary equality and it would
be prudent to state that there are no differences in salary for men and women in the
same job, with the same standard of education and the same professional seniority.
The company supports equal opportunities while ensuring the status of women in the
company and rights for a working mother, and makes a great deal of effort to integrate a
range of population groups into the ranks of its employees as part of various projects.
This year, special blue work uniforms were designed for female manual workers, and, for
the first time, work uniforms were designed for Haredi female electricians. Furthermore, it
would be prudent to state that female employees who take maternity leave, return to work
in the same job (G4-LA3).
Preservation and Development of the Human Resource
Preservation and Development of the Human ResourcePreservation and Development of the Human Resource
Preservation and Development of the Human Resource
The company develops processes of the preservation and transfer of internal
organizational knowledge in core professions and acts to nurture the human resource as
a leading major value in all fields of employment in the company. The company conducts
training and instruction processes at four dedicated schools that the company operates in
various fields and even encourages excellence and technological and process leadership
– awards prizes to outstanding workers and receives prizes for processes carried out in
various fields in its endeavors.
The human resources strategy at the company supports the development of workers who
have professional management potential with a perspective that such workers will lead
the company in the coming years. The company trains the manpower required in the
fields in which resources are in short supply or as part of technological innovation and
holds pooling and training programs that enables it to close gaps with respect to the
supply in the job market, vis-à-vis challenges and business changes.
The Steps Taken by the Company to Preserve and Develop Human Resources
The Steps Taken by the Company to Preserve and Develop Human ResourcesThe Steps Taken by the Company to Preserve and Develop Human Resources
The Steps Taken by the Company to Preserve and Develop Human Resources
(G4
(G4(G4
(G4-
--
-DMA)
DMA)DMA)
DMA)
A national recruitment center was established that provides services for all the company’s
units, the center being staffed totally by women.
74
A specialization service center was established for matters of pension that will lead to an
improvement in the service provided to employees and to pensioners. Furthermore, a
service center was opened for information accessibility and an improvement in the
service for employee and pensioners on matters such as: Terms of service, salary, loans,
various rights, etc.
An innovative career track was defined for the employment of female administrative
managers at the company, while reducing the number of secretary positions.
Development plans for human resources were put into operation, pursuant to the
Development plans for human resources were put into operation, pursuant to the Development plans for human resources were put into operation, pursuant to the
Development plans for human resources were put into operation, pursuant to the
following target populations:
following target populations: following target populations:
following target populations:
Training a reserve for management positions.
Training prior to taking up a management position including accompaniment and
mentoring.
Development of social - business leadership.
Development of professional “talents”.
The Israel Electric Corporation believes in promoting the subject of
The Israel Electric Corporation believes in promoting the subject of The Israel Electric Corporation believes in promoting the subject of
The Israel Electric Corporation believes in promoting the subject of diverse background
diverse background diverse background
diverse background
employment with the target being 10% of various
employment with the target being 10% of various employment with the target being 10% of various
employment with the target being 10% of various employer
employeremployer
employers by 2020 (see Chapter 2).
s by 2020 (see Chapter 2).s by 2020 (see Chapter 2).
s by 2020 (see Chapter 2).
Accordingly, as part of diverse background employment, the company currently employs
in 2017, over 1,041 such workers which constitute 8.5% of all the company’s employees,
are employed.
The company currently employs 380 workers with over a 20% disability rating, (2.5%) and
by 2020, we will reach the target of 3% as required of government companies.
Ethiopians, Druze, Haredi men and women are employed, as are minority groups,
Bedouins, former South Lebanon Army personnel, students from peripheral towns and
villages, working learning youth groups (from low socio-economic backgrounds). In total
there are over 660 such employees.
Amongst the leading projects in the field of employment of working youth the following
Amongst the leading projects in the field of employment of working youth the following Amongst the leading projects in the field of employment of working youth the following
Amongst the leading projects in the field of employment of working youth the following
can be stated:
can be stated: can be stated:
can be stated:
“Keren Or” [Ray of Light] – as part of which rehabilitants are employed as apprentices in
various fields. This is in conjunction with the Keren network for professional assessment
and rehabilitation, which provides occupational rehabilitation services.
“The 120 Project” in conjunction with vocational schools, as part of which both boys and
girls in the 11th and 12th grades are employed until they are called up for I. D. F. service.
The objective is to impart vocations and tolls to the pupils to integrate into employment,
with economic assistance.
“The Ofek project” run by the Ofek School in Or Akiva and the company’s training
division, in order to give boys and girls, mainly from peripheral towns and villages, an
75
opportunity to acquire a vocation for the future in the field of electricity and to pass
Matriculation examinations in Physics and Electricity. The project will be expanded in
2017 in conjunction with the Ministry of Education to a national level.
As part of the multicultural employment policy in general and the promotion of the
As part of the multicultural employment policy in general and the promotion of the As part of the multicultural employment policy in general and the promotion of the
As part of the multicultural employment policy in general and the promotion of the
em
emem
employment of women in particular, a decision was taken to inaugurate a project, the
ployment of women in particular, a decision was taken to inaugurate a project, the ployment of women in particular, a decision was taken to inaugurate a project, the
ployment of women in particular, a decision was taken to inaugurate a project, the
objective of which is to employ women, with emphasis on minority women, from the
objective of which is to employ women, with emphasis on minority women, from the objective of which is to employ women, with emphasis on minority women, from the
objective of which is to employ women, with emphasis on minority women, from the
Druze population, for work on the electricity grid and in particular with respect to
Druze population, for work on the electricity grid and in particular with respect to Druze population, for work on the electricity grid and in particular with respect to
Druze population, for work on the electricity grid and in particular with respect to
connect
connectconnect
connecting homes [to the grid], etc.
ing homes [to the grid], etc.ing homes [to the grid], etc.
ing homes [to the grid], etc.
• As part of the multicultural employment policy, a decision was taken to expand the
fields of focus also to the Bedouin population – former members of the I. D. F.
Bedouin Patrol Battalion – as part of a welder’s course, upon completion of which
they will integrate in the execution division and in other units.
• The company recruited over 170 women for various positions: Economists,
planners for connections of homes to the grid, Chemical / Industrial Engineers,
etc. 30 Haredi women have been recruited as service representatives at the 103
call centers.
• A training project to prevent sexual harassment concluded in 2017, with
approximately 10,500 employees having undergone training.
• The representation of women at various management levels has undergone a
substantial change in such a manner that currently (for targets see Chapter 2),
there are two women in the position of Vice President and 4 women in the position
of Divisional Manager.
• The following can be stated in the field of te
The following can be stated in the field of teThe following can be stated in the field of te
The following can be stated in the field of technological training
chnological training chnological training
chnological training :
::
:
• The establishment of a leading national center in the fields of infrastructure and
energy, in conjunction with government ministries, academia and leading
industrial entities. The purpose is to conduct continuous training, from school age
76
to the completion of academic studies (professional placement, technician /
practical engineering studies, academic studies).
• Over the past few years, hundreds of employees took part in 5 academic
programs. Accordingly retraining courses were carried out for practical engineers
to train them as Electrical Engineers, retaining practical engineers as Mechanical
Engineers, training electrical engineers for “high current”, master degrees in
Natural and Environmental Resources, multidisciplinary degrees, etc.
• The company’s national training center was designated to provide support in
improving company performance and raising the level of the human resource, the
academic level and the professional level of the company employees and imparts
the authority required by the government ministries (The Ministry of Economics,
generally).
Internal Organizational Courses and Academic Studies
As part of the existing corporation concept, internal training programs have been run in
the field of environmental protection as of 2008. The programs impart up to date
knowledge in various topics related to the range of activities carried out by the company
and constitutes a critical tier in reducing environmental ramifications. So far, more than
4,000 workers have taken part in various training, with some of them completing master
degree studies in Environmental Quality Management and in Business Administration.
The courses and the academic studies continue to this day.
Impartial Employment in the Supply Chain
In all matters related to rights of contractors’ employees in the guarding and cleaning
industries, the company acts, as it will be expanded below, pursuant to the directives of
the expansion orders in the cleaning industry and in the guarding and security industry,
which came into effect (G4-DMA). The Israel Electric Corporation ensures impartial
employment and severely views violations of the rights of contractor’s employees.
Accordingly, the company acts in some of its contractual associations in order to
guarantee that the vendors participating in its purchasing processes are obligated to
ensuring the rights of their employees, and actually uphold their obligations towards their
employees. The company also acts, pursuant to the provisions of the law, in order to
ensure that contractual associations with the company will be upheld while maintaining
the rights of the workers and ensuring the upholding of labor laws.
77
The activities of the Israel Electric Corporation in the fields of preserving the rights of
contractors’ employees focuses both on the purchasing process as well as on the
implementation of the contractual association.
Furthermore, the vendors are obligated, to pay their workers minimum wage on time, to
make sure to provide social benefits under the law as well as work and rest hours.
The contract documents, in some of the contractual associations, include instructions
obligating the vendors to present periodic authorizations from auditors, to the company, in
the matter of upholding obligations and making payments that apply to them pursuant to
labor laws and pursuant to the terms of the contractual association, with respect to the
their employees working at the Israel Electric Corporation sites.
Upholding the Provisions of the Law in the Matter of the Rights of Contractors’
Employees in the Guarding, Cleaning and Catering Industries
The Enhancement of the Enforcement of Labor Laws Law, 5772 – 2012 came into effect
on June 19, 2012. Accordingly a mechanism was set up at the Israel Electric Corporation
to handle and clarify complaints lodged by contractors’ employees which operates in the
Human Resources Division, with the assistance of a team from the relevant division and
provides solutions for about 2,000 contractors’ employees employed at the company’s
premises. The solution includes the clarification and handling of complaints lodged by
contractors’ employees on matters listed in the law, actions in conjunction with the
Ministry of Economics, the activation of the Tenders Committee and submitting
recommendations with respect to the contractors.
Mandatory Retirements (G4-EU15, G4-LA1)
250 employees, who reached retirement age, retired in 2017.
About 900 employees retired in the period 2015 - 2016 in a voluntary early retirement
campaign.
A plan for streamlining was formulated at the company with respect to the reducing the
permanent employee headcount by about 2,000 employees by 2020, and this is over and
above retirements due to some 200 employees reaching retirement age per annum.
Obligations with Respect to Pension Funds (G4-EC3, G4-LA2)
Deposits into the company’s pension fund, with respect to first and second generation
employees insured under a budget type pension, is based upon a forecast of the cash
flow expected in the future and on a number of actuarial assumptions (the pensions of
third generation workers in an accumulative pension). There is a risk that the actual
78
pension commitment of the company will be different from those forecast by it and based
upon which the company makes deposits into the pension fund and, therefore, insofar as
the deposits and derived interest will not cover the commitments, the company is liable to
be required to make additional deposits to the pension fund, of amounts that are liable to
be significant for the company. In addition, the actuarial model for the calculation of the
deposits into the pension fund is liable to change in the future, pursuant to the changes in
the life expectancy [of the retirees], regulatory matters and the economic climate.
Changes in the actuarial model as stipulated above are liable to obligate the company to
carry out additional deposits, of significant sums of money, into the pension fund. The
company has 7 officers employed pursuant to the collective terms of employment
applicable to all the employees and also 8 employees (including the Chairman of the
Board of Directors) who are employed under personal employment contracts, of a format
approved by the Government Companies Authority. In 2015, an updated circular was
published by the Government Companies Authority in the matter of the principles for the
remuneration and incentive model of senior executives and the company acts in
accordance with the above stated circular with respect to officers employed under a
personal employment contract
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2.2.2.2. Responsible Corporate ConductResponsible Corporate ConductResponsible Corporate ConductResponsible Corporate Conduct
2.12.12.12.1 Preventing CorruptionPreventing CorruptionPreventing CorruptionPreventing Corruption
The Israel Electric Corporation conducts broad scale business activities of a total scope
of billions of Shekels per annum and is therefore, exposed to a broad spectrum of
embezzlement and fraud risks which are liable to cause financial and image related
damage and incur the distrust on the part of the general public. As part of this risk the
following is included: Abuse of assets, means of payment, tender bias, etc. (G4-DMA).
The main work processes at the company are supported by a number of information
systems. Risks of embezzlement and fraud are liable to materialize within the work
process or through the information system that support the work process. The main
exposures that have been identified are liable to materialize in the following domains:
Purchasing and contractual association with vendors, managing tenders, income from
debt collection and from executing special projects, storage and management of
inventory, payroll, managing investments, and the use by means of payment, managing
information and commercial secrets, (G4-20).
A review of focal points of embezzlement and fraud was completed in 2015 as well as a
focused review of such risks in the field of purchasing and contractual associations. The
implementation of the recommendations of the reviews will be effected and completed as
part of the work plan, the gradual materialization of which will continue until 2019 (G4-
DMA).
As part of the review, dozens of risk scenarios were selected in the following processes:
Purchasing, finances, storage [of inventory], Electricity theft and the use of company
equipment. The recommendations of the reviews will be handled within the framework of
work teams who were appointed for this matter (G4-SO3, G4-SO4). In 2016 an
examination and evaluation were also conducted of the internal controls over financial
reporting and the effectiveness thereof, including the separation of authorities in the
computerized system and the implementation of a computerized tool to prevent leakage
of information, with the emphasis on the world of fraud.
The company has procedures to prevent embezzlement and fraud and to maintain a
degree of integrity which are submitted for purposes of refresher training to all employees
at a frequency of least once a year and are available in the internal site [Intranet].
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The Policy of Integrity Amongst the Directors
(See the chapter on “Corporate Governance”)
Corporate Governance Code
Further to the vision of the renewed Israel Electric Corporation and the implementation of
the code of ethics at the company, the Company’s Board of Directors formulated and
approved a Code of Corporate Governance. Because the Israel Electric Corporation is a
large company, which operates in a complex world of content and in an environment
saturated with directives of the law – the need arose to generate an agreed upon and
exhaustive code that defines the reciprocal relations between the Board of Directors and
the management team, and arranges the manner of operation of the Board of Directors
and its associated committees and their areas of authority and responsibility.
As part of the code, an entire chapter was inserted that refers to the rules of ethics of the
members of the Board of Directors.
The rules of ethics were formulated in order to clarify expectations and to set norms of
conduct and proper standards with respect to a director in the company.
In addition to the commitment on the part of the members of the Board of Directors to
operate pursuant to the provisions of the law, the directives of the regulators and in the
spirit of the company procedures, they are to conduct themselves with integrity and honor
and to serve as an example of the manner of their conduct as those who lead the
represent the company and this pursuant to rule of ethics that were laid down.
In the ethics chapter in the code, the following topics are detailed:
� Responsibility
� Integrity
� Impartiality
� Guiding principles for proper conduct
� Refraining from conflicts of interest and paybacks
� Refraining from taking advantage of opportunities for personal benefit
� Use of internal information and maintaining confidentiality
� Reporting improper conduct
The Corporate Governance Code was approved and adopted by the company’s Board of
Directors.
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As part of the training program for members of the Board of Directors, every new board
member is required to know the Corporate Governance Code, including the ethics
chapter.
The matter is settled in a meeting held between the Secretary of the Board of Directors
and the Director.
Additionally, the legal counsel of the company provided individual instruction to every new
Board of Directors member, as part of the training program, in which the articles of the
law obligating the Director to act with integrity and impartiality are detailed.
Preventing a Conflict of Interests
As part of the appointment process, every Director signs a letter of abstention from a
conflict of interests vis-à-vis the Appointments Examination Committee at government
companies. Additionally and pursuant to the company procedures in question, upon a
new director at the company receiving a letter of appointment, the Secretary of the Board
of Directors submits the questionnaire, filled in by the Director at the time of submitting
his candidacy for the job, to the legal counsel in order for the legal counsel to air his
considered professional opinion with respect to apprehensions of a conflict of interests
between the service of the new director and his other business affairs. Additionally, prior
to the commencement of every plenary session, all the participating directors are asked
for full disclosure with respect to the existence of a personal matter and / or conflict of
interests on the part of any one of them with respect to the items on the agenda.
The circular issued by the Government Companies Authority in the matter in question
also states that should a situation of a conflict of interests or an apprehension of a
situation of a conflict of interests arise between the role of the director as a director in the
company and his other business dealings and / personal affairs – such director is
obligated to recuse himself from any action, involvement, participation in discussions,
participation in a vote for purposes of taking a decision at the Board of Directors or in one
of the associated committees, that will impact the company or will prefer another of their
own interests or the interests of an entity associated with them as an employer, a
customer or a vendor or as their partner and which is inconsistent, first and foremost, with
the good of the company.
Pursuant to the directives of the law, and the arrangement to prevent a conflict of
interests, a director at the company is to inform the company of a conflict of interests
immediately upon such being created and to be absent from the Board of Directors
meeting at which the matter, with respect to which the conflict of interests arises, will be
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discussed. In a case in which a conflict of interests or an apprehension of a conflict of
interests is detected between the role of the director in the company and his other
business interests and / or personal affairs – the legal counsel of the company is called in
to examine the matter and to voice his considered professional opinion in the matter and
to instruct the Board of Directors as to how to act.
Policy on the Matter of Maintaining a Measure of Integrity vis-à-vis Vendors
In its relations with vendors, the Israel Electric Corporation is obligated to act in an
impartial, equitable, transparent and non-discriminatory manner, pursuant to the
provisions of the law and with an aspiration of maintaining mutual trust with vendors. The
company ensures honoring agreements with vendors and the non-abuse of its status
towards them. In its conduct vis-à-vis its vendors, the company aspires to prevent an
impact on the measure of integrity and does all in its power to prevent corruption and
improper conduct.
The company draws up contractual association agreements mainly through public
tenders or other competitive processes. Within this framework, the company maintains
rules of impartiality and providing an equal opportunity to vendors. The contractual
association agreement documents are published (pursuant to the provisions of the law)
on the company’s website.
Maintaining Confidentiality and Data Security in Contractual Associations
The company has procedures and guidelines with respect to data security, including
information received under processes of purchasing (from keeping the identity of the
bidders secret and up to and including the content of the bids), in order to increase the
maintaining of confidentiality and from an aspiration to increase the trust of the vendors in
the purchasing process. Accordingly, the company takes steps and appropriate security
arrangements in order to prevent the leakage of information or the exposure thereof or
accessibility to it on the part of unauthorized entities that are liable to cause damage to
the business activities of the company or of its vendors. The company procedures even
determine explicit rules with respect to discerning between the various types of
information, the marking thereof the keeping thereof, the copying thereof and the ways of
transferring them to others. As a rule, submitting bids for purchasing procedures is
effected through a locked tender box or by secured electronic fax or to an electronic box.
Those dealing with purchasing work are obligated to increased confidentiality.
Integrity on the Part of Vendors
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• The company acts in a number of levels in the field of maintaining integrity and
preventing corruption:
• Dependability and Reliability – One of the standards for selecting the most
suitable bid, at the vendor screening process, is dependability and reliability.
Thus, a bidder, regarding who there is a suspicion that he operated a scam or an
attempt to operate a scam against the company, as part of the contractual
association process or agreement process with the company, or if a bidder has
perpetrated a criminal offence related to the provision of services / the execution
of work, the company is entitled to not include such bidder in the contractual
association process or to not accept its bid or even to cancel its win or to cancel
an agreement drawn up with it, subject to the law.
• There is an instruction in the contractual association documents regarding the
explicit prohibition of giving bribes, in addition to the obligations and prohibitions
applicable to the bidders in a tender under the power of the law.
• The company is at liberty to suspend a vendor, pursuant to the directives of the
Vendor Suspension procedure, upon the occurrence of the circumstances
detailed in the procedure, which refer to the case of the operation of a scam (or
the attempt to put a scam into operation) against the company.
• Prevention of non-competitive conduct – in the company’s contractual association
documents there is a clause regarding the vendors upholding the antitrust laws,
by which, in the event that a suspicion will arise that this is not the case, the
company will be entitled to disqualify the bid.
• In some of the purchasing processes, the bidders are even required to attach a
separate declaration to the bids regarding the upholding of antitrust laws, and the
non-coordination of the tender / purchasing process. As such, in those cases
where a real suspicion arises of the infringement of antitrust laws, (such as fixing
prices and dividing the market), the company disqualified vendors’ bids,
suspended vendors and referred the matter to the Antitrust Commission.
• The company formulated an internal enforcement plan of antitrust laws, office
bearers and enforcement teams were appointed. Likewise, a work procedure was
drawn up in this field for purposes on preventing an infringement of antitrust laws
at the company.
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Transparency
The company acts with full transparency vis-à-vis its vendors and enables participants in
contractual association processes to peruse the stated process documents, while
maintaining commercial and professional confidentiality of other vendors, subject to the
provisions of the law. The company acts pursuant to the requirements of the law with
respect to publishing decisions on the website, in all matters related to the execution of a
contractual association not through a tender pursuant to the tender obligation regulations.
The Arrest of Senior Israel Electric Corporation Officials under Suspicion of Taking Bribes
In December 2014, a number of former and current company employees, including two
senior office bearers in the company, were arrested by the Securities Authority, under
suspicion of taking bribes from the Siemens Company in order to tilt tenders in which the
company contractually associated. The company was not officially informed about the
incident. It would be prudent to state that, to the best of the company’s knowledge, this
investigation is linked to a previous investigation conducted by the Securities Authority in
this matter, as part of which Mr. Dan Cohen, who formerly served as a director at the
company, was indicted and convicted of offences of bribery and breach of trust (G4-5O5).
In 2016, indictments were served on former senior officials at the company who were
involved in the affair, with the judicial process concluding this year with extended prison
sentences.
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2.22.22.22.2 Emission of Polluting Gases into the AtmosphereEmission of Polluting Gases into the AtmosphereEmission of Polluting Gases into the AtmosphereEmission of Polluting Gases into the Atmosphere
The Importance of the Subject (G4-DMA, G4-20, G4-21)
• The subject of the emission of polluting gases into the atmosphere is central to
the company’s operation due to its being an integral part of the electricity
generating process, in which various types of byproducts from the combustion of
fuel are emitted into the atmosphere. The main gases are: Sulphur Dioxide,
Nitrogen Oxide, particle matter and Carbon Dioxide.
• The company views the design and operation of its facilities with great importance
in light of the principles of sustainable existence , while adopting the most
advanced technologies from the aspect of the environment, in conjunction with
ensure the continued reduction of environmental effects, such as:
The effects on residential environments near power stations.
• The effects inside the company which, as at this point in time, cannot, under a
regulatory resolution, install renewable means of production.
• The company defined an environmental vision pursuant to which “the company
will operate out of responsibility towards the environment, with a long term
sustainability and future prediction perspective, which will minimize the
environmental ramifications resulting from its operations and will lead to the
prevention of hazards derived from its operations”.
• The following can be stipulated as being some of the company’s activities to
reduce hothouse gasses: Increasing the efficiency of the power stations,
expanding the use of cleaner fuels such as natural gas, encouraging savings in
electricity and internal energy streamlining as well as at large customers, the
installation of scrubbers for handling emissions from coal fired units, etc.
• The company meets stringent standards on the subject and even acts
continuously to adopt proven advanced environmental standards and conducts
ongoing performance tests using a national pollutants monitoring system.
• Under routine operation, the company complies with the emission targets laid
down by the regulator (The Ministry of Environmental Protection) for each power
station.
Targets
The company’s targets in the field of the reduction of polluting emissions from power
stations by 2020, are described in Chapter 2.4 A.
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Main Activities
The company has set up and operates an air quality monitoring system, as part of which
33 monitoring and meteorological stations are operated in various geographical areas.
This system constitutes a part of the national air quality monitoring system, which is
shared by the Urban Associations for Environmental Quality and the Ministry of
Environmental Protection.
In addition, the company operates an air sampling system at the points of output of
smokestacks at power stations, pursuant to the guidelines of the Ministry of
Environmental Protection. The sampling allows verification of the continual monitoring
results and as part thereof, sampling of additional pollutants is conducted pursuant to the
requirements of the Ministry of Environmental Protection, such as Nitrogen Dioxide,
Ozone, fine suspended particle matter, etc.
Measurements of air quality obtained from the nationally deployed system of monitoring
stations in 2017 indicates isolated cases of relatively high concentration, compared to the
standard, of Nitrogen Oxide, Nitrogen Dioxide, Ozone and fine suspended particle matter.
The high concentrations were also attributed to transport activities, high concentrations of
Ozone attributed to photochemical processes occurring in the atmosphere and high
concentrations of fine suspended particle matter related to dust storms and haze.
In 2017 an approximate 5% decrease in the emission of major pollutants from power
stations was achieved compared to the previous year, an increase in the use of natural
gas and an improvement in the operating processes of the power stations (G4-EN21) and
chapter 3.5 A (G4-EN20).
In 2017, the company put into force restrictions in the use of coal fired units pursuant to
the resolutions of the Minister of Energy, completed a project of reducing emissions at
power stations at the Orot Rabin site and made progress with the emissions reduction
project at the Rutenberg power station. The scope of the emission reduction projects at
the coal fired power stations is approximately NIS 7 billion.
The Company publishes a detailed integrative environmental report on its website, close
to the date of publication of its financial statements.
2.32.32.32.3 Managing Energy ConsumptionManaging Energy ConsumptionManaging Energy ConsumptionManaging Energy Consumption
The Importance of the Subject (G4-DMA, G4-20, G4-21)
• As a company generating and supplying electricity to 2.8 million customers, the
subject is significant for its operation, both from the aspect of the regular supply of
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electricity to the market as well as from the aspect of the environmental
commitment related to the use of the basket of fuels that will cause minimal air
pollution and pursuant to the regulations.
• The electricity generating system of the company is based on steam driven power
stations and industrial gas turbines, some of which are based on combined cycle
technology. The company operates 63 generating units at 17 sites. Since 2004,
the company has been operating generating units with natural gas and this year,
the scope of production using natural gas exceeded 50% of the generated energy.
In addition, since 2014, no additional generating units were constructed by the
company with the additional energy in the market being based on private
electricity generation companies who operated natural gas fired combined cycle
units and projects to exploit solar and wind energy.
The principles of operating power stations are:
• Minimum cost of operation and maximum savings in expenditure on fuel,
operations and maintenance.
• Protecting the safety of workers preceded the survivability of the equipment.
• Preventing situations that are liable to lead to nationwide or regional electricity
blackouts.
• Guaranteeing a minimum period of time to rehabilitate situations of malfunctions.
• The company formulated a multi-year plan of action for internal energy
streamlining, to integrate green roofs in the urban environment, saving in fuel for
transport and to reduce the trips taken by vehicles.
Main Activities
• Since the legislation of the Electricity Market Law the policy of the Government of
Israel is to encourage competition in the generating sector, through integrating
private electricity generating companies. As at the end of 2017, the installed
capacity of private electricity generating companies is more than 3,500 Mw,
generating more than 50% of their energy using natural gas.
• Under the law, the company is obligated to intake generating facilities of private
manufactures into the transmission and distribution system.
• Promoting savings in energy is a subject of national importance and the company
has formulated a multiyear plan for energy streamlining at its facilities. In the
period from 2016 to 2019, about NIS 30 million will be invested for purposes of
energy efficiency with the purpose of achieving, by 2020, annual savings of 3.6%
of the consumption of electricity measured at the end of 2013 which serves as a
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baseline year (G4-EN6). The main activities being carried out: The replacement of
old air conditioning units, the transition to low consumption lighting, the installation
of attendance sensors, the use of coatings on window glass to prevent heat
penetration, etc.
• The company sees itself as being responsible and obligated to take steps to
reduce environmental hazards along the electricity supply chain. Accordingly, the
company puts a great deal of effort and significant budget into environmental
protection as described in Chapter 1.7 B.
• The company has formulated a multiyear work plan to reduce the consumption of
gasoline and diesel fuels for transport, for its fleet of vehicles. As part of the
activities, the company began
a campaign of checking tire
pressure, encouraging travel
by trains and by public
transport conducting training
on thrifty driving, publishing
comparative information for
company vehicle drivers
against average values of
vehicle fleets vis-à-vis fuel
consumption and trips. In
2017, the company continued
integrating hybrid vehicles
into its vehicle fleet with
management leading by example by driving hybrid (gasoline - electric) vehicles,
leading to significant savings in fuel consumption. Fuel consumption for transport
totals at about 3 million liters of fuel per annum.
• The company views the field of integrating green roofs as an action to implement
values of sustainability and a contribution to energy efficiency. Accordingly, closed
urban substations will be designed with green roofs as an integral part of the
structure and by the end of 2017, 4 such green roofs have been established with
the maximum scenery integration being effected in an urban environment.
2.42.42.42.4 Effluent and WasteEffluent and WasteEffluent and WasteEffluent and Waste
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The Importance of the Subject (G4-DMA, G40-20, G4-21)
• Various byproducts are produced in the electricity generating process, such as:
Coal ash, gypsum, hazardous materials, solid waste, industrial and sanitary
effluent, etc. The correct handling of these types of waste and effluent is required
by law and is central to the operation of the company.
• As a large industrial organization that affects the quality of life of the community
and the environment, the operations of the company in the proper handling of
waste and effluent also has ramifications outside the company.
• The company treats its own sanitary effluent by reusing reclaimed water to irrigate
landscaped areas. Additionally, the reclaimed sanitary effluents from external
sources (sewage purification plants) are used as feed water for the cooling towers
of the generating units at the Alon Tavor and Gezer sites.
• The company emphasizes the intelligent use of water resources and a multiyear
work plan was formulated to reduce the consumption of fresh water.
Objectives
• The reduction of the use of fresh water at generating sites by 10% by 2020,
compared to 2013.
• A reduction in the use of paper by 50% by 2020 compared to 2010.
• Expansion of the use of coal ash and gypsum with a target of 100% re-use.
• Separating of metal waste, paper and toner waste, cardboard waste, organic
waste electronic waste, etc.
• Publication of an integrative environmental report in conjunction with the
publication of the financial statements
Main Activities
• Coal ash is the byproduct of burning coal at a power station. The quantity of ash
produced is about 0.8 million tons per annum, while, in the coming years, the
quantity will be reduced due to the increasing use of natural gas. The entire
quantity of ash that is produced is supplied for use in the manufacture of cement
and concrete, other construction products, the construction of banks for roads or
as padding in cow sheds (G4-EN23). The company tracks the quality of the
ash at intervals of every 6 months, with the results of the tracking indicating a
continuous compliance with the criteria to define the ash as “Good for Use”.
Likewise, the absence of an impact on water sources was verified in the
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monitoring of underground water carried out under the ash storage sites at the
power station.
• Gas emissions, produced at the coal fired generating units, undergo treatment in
the system to reduce Sulphur Oxide and, as a result, gypsum is obtained as a
byproduct which is of a very good quality, similar to natural gypsum. The
quantities of gypsum produced in 2017 (about 85,000 tons) were sold for these
uses, (G4-EN23).
• Solid waste is handled at the company using the “general management”
approach, which is based on reducing the production of waste, source separation
of the various types of waste and the recycling thereof. The company separates
the following at source: Paper waste, cardboard, various types of cables, metals,
wood waste, plastic bottles, electronic waste, etc.
• Up to this point in time, the consumption of paper for printing purposes was
reduced by 48% compared to 2010, which was record year for use. Over the past
two years, the use of recycled paper was initiated and significant savings were
achieved in both the quantity of toner for printing as well as in paper by
transitioning to centralized printing centers. Likewise, the collection of paper waste
and cardboard continued with the assistance of the Amnir company.
• As part of the obligations under the power of the law, the company removes
hazardous material waste (batteries, used oil, neon tubes, etc.) to approved
dumping sites.
• Pursuant to the provisions of the prevention of asbestos hazards law, the
company promotes a project or removal of asbestos from the Reading, Eshkol
and Haifa Power Station sites. The projects will continue until 2021, with the
investment required for removal will total at about NIS 100 million.
• The company has innovative equipment for handling sea pollution events and the
gearing up for spill events is maintained at a high level by annual exercises of the
special teams designated for this. In 2017, there was an incident of a leak of liquid
into the sea, in the Ashdod area, which was handled in an immediate manner
pursuant to the guidelines of the appropriate entities and which was inspected by
the representative of the Ministry of Environmental Protection (G4-EN24).
• As a result of the generation of electricity, industrial effluents are produced, which
are handled on the spot by means of a chemical process for the separation of oils,
fuel, metals and floating solids. The purified effluents are re-used at the power
station and an excess effluents are streamed into the sea under the terms of a
permit. In 2017, a technology was developed at the technological incubator of the
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company, which is based on seaweed to handle industrial effluents prior to
streaming them into the sea. The technology is useful also for chemical factories,
dairy factories and others and its contribution to cleaning up the flow of effluents
prior to streaming them into the sea under the terms of a permit is significant.
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2.52.52.52.5 Biological DiversityBiological DiversityBiological DiversityBiological Diversity
The Importance of the Subject (G4-DMA, G4-20, G4-21).
• The company has thousands of kilometers of electricity lines at various levels of
voltage, hundreds of substations, dozens of power stations etc., spread out all
over the country. Being facilities located in open areas or adjacent to such areas,
there is an effect on the biological diversity and sometimes on the marine
biological diversity.
• The effects result both from the actual occupation of the area as well as from
associated environmental effects derived from the ongoing operations of the
facilities and, accordingly, the subject is important both for stakeholders and for
the company.
• In 2010, the Ministry of Environmental Protection published a strategic plan “The
National Plan for Biological Diversity in Israel” which served to formulate an inter-
ministerial plan of action on the subject which was adapted to the objectives of the
Biological Diversity Convention of the United Nations, to which Israel is a
signatory.
• The biological diversity refers to various species of plants or animals that are
infiltrators, arrive in Israel from various areas, have no natural enemies and
therefore proliferate uncontrollably while causing damage to ecological systems.
Another phenomenon is that damaging is related to light pollution resulting from
existing artificial lighting surrounding various sites and which impacts on the
natural biological processes of birds, such as brooding in the wrong season,
interfering with migratory processes, exposure to predators, etc.
Main Activities
• Based on the national outline plan for Parks and Natural Reserves
(N. O. P. 8), about 0.8% of all overhead power lines pass through proclaimed
natural reserves, (G4-EN11) and that 1.8% of them pass through national parks.
The company does not have high tension power lines passing through natural
reserves, and 1% of them pass through national parks.
• As part of the reviews of impact on the environment, the effect on the biological
diversity is examined for new projects, by carrying out ecological surveys to profile
the valence of the land from the aspect of habitats and ecological systems, to
detect species of plants and animals at risk, including laying down the means that
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will be taken to prevent the impact on sensitive species and habitats. For
example, with respect to new substations, there are various environmental
guidelines to protect habitats and special species, guidelines for the scenery
rehabilitation using local species, guidelines for the handling and eradication of
invasive species, guidelines for the reduction of light pollution, etc.
• With respect to electricity wires in the outline plans, there are guidelines for the
protection of electricity pylons to prevent the electrocution of birds, guidelines for
the handling and eradication of invasive species, etc.
• At the establishment stage of various facilities, the company refrains from the use
of aggregates transported from quarries contaminated with seeds of invasive
species, (G4-EN13).
• At the company sites illuminated pursuant to security and safety requirements,
examinations are carried out to reduce the scope of the illumination, a periodic
examination of the direction of the lights (in order to prevent light shining upward),
and to reduce the power of the illumination in order to prevent the phenomenon of
light contamination.
• In order to obtain comprehensive information, botanical and zoological field
surveys are conducted to detect species that are in danger of extinction and
regarding which various actions are to be taken to prevent the phenomenon (G4-
EN14), as defined in the “Red Book for Nature Preservation” of the International
Organization for Nature Preservation.
• Since the beginning of the 1980s there is documentation at the company
regarding the electrocution of vultures and other large birds of a wingspan of over
2 meters which make use of the electricity poles and pylons as observations
posts, for night nesting or for resting. As of 1996, the company transfers budget to
the Nature and Parks Authority and to the Nature Protection Company for
purposes of “Spreading Wings – Adoption of Vultures and Raptors” to protect and
bolster the vulture population and views this project as an important
environmental contribution.
• In order to reduce the electrocution of large birds, the company developed various
types of protective means that are suited to electrical wires and poles. The
protective means includes protective sleeves made of insulating material
designated for electrical wires, spikes and barbs that prevent landing etc. Up to
this point in time, thousands of electrical poles and pylons (high and overhead
tension lines), that are located in sensitive areas determined by mapping, were
protected to prevent electrocution.
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• Using sea water to cool the power station affects the marine biological diversity in
the vicinity, with the power station itself also being affected by the biological
diversity that comes in with the seawater, (such as jellyfish). The company
conducts marine environmental monitoring pursuant to the requirements of the
Ministry for Environmental Protection while conduction continual tracking of the
appearance of marine animals at the outlet point of the cooling water and in the
areas of the pilings of marine jetties for offloading coal ships, (G4-EN26).
• The company conducts an annual mapping of the sea bed surrounding the
precipitation pools and in the area of the coal jetties, a multiyear tracking of
changes in the shoreline and checks the effects of the hot water expelled from the
cooling systems on the marina fauna and the quality of the sea water. Likewise,
the effects of the coal on the marine environment and on the marine fauna are
monitored with such indicating that there is no damaging effect on the fauna (G4-
EN12).
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2.62.62.62.6 ObeObeObeObeying Environmental Regulations ying Environmental Regulations ying Environmental Regulations ying Environmental Regulations
The Importance of the Subject (G4-DMA, G4-20, G4-21).
• The Israel Electric Corporation is subject to laws and regulations in the field of
environmental protection that refers to various matters involving its activities
including: Air, ground and water quality, noise prevention, non-ionized radiation.
• Dealing with hazardous materials, etc.
• The company studies the ramifications of the environmental laws, acts to prevent
or to minimize the environmental ramifications, gears up for the economic
ramifications from the implementation of the laws and allocates budget in order to
fulfill the directives of the environmental laws that apply to it.
• The company views itself as being responsible and obligated to take steps to
protect the environment and to reduce hazards through the electricity supply
chain. The company estimates that as from the end of 2017, it essentially
complies with the essential directives of the law in the field of environmental
protection. The company holds the environmental licenses required for its
operations and where such are absent, it acts to obtain them.
• The company operates pursuant to the principles of policy in the field of
environmental sustainability approved in 2014 and revised in 2016. The
foundation of the principles is a combination of environmental considerations in all
fields of operation and including in taking decisions, integrating the principles of
sustainability programs in the company’s operations, etc. The detailed policy is
published at the company’s website.
Main Activities
• No significant fines were imposed on the company in 2017 (G4-EN29), but
indictments were issued against a number of executives with respect to an
environmental incident at the Hagit site and the matter is still under legal
discussions.
• As part of its activities, the company is subject to the directives of the planning
and construction laws. Likewise, with respect to its various facilities (power
stations, switching stations, high tension wires), the directives of the outline plan
apply and, accordingly, the company conducts the environmental enforcement of
its obligations in a comprehensive manner.
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• Pursuant to the National Outline Plan NOP 3/a/10, the termination of the
operations of the Reading Power station will occur in 2020. Pursuant to the stated
plans, the company will have to make significant environmental investments at the
site to conduct extensive removal / construction work. In parallel, discussions are
being held with the various planning entities to approve the new NOP to establish
two new production units on the site.
• The shoreline vicinity preservation law prohibits, impacting the shoreline vicinity as
defined in the law (a domain of 300 meters from the shoreline), unless a permit
has been lawfully issued to this effect. Some of the company’s generating facilities
are located along the Mediterranean shoreline and thus the company has geared
up to both prevent pollution of the sea with fuel, as well as to increase the
readiness for handling of possible pollution incidents as well as to protect the
facilities from marine pollution from external sources.
• The company acts to arrange business licenses that are absent for part of its
facilities, pursuant to the directives of the law and the requirements of the
authorities in this matter. The company invests considerable budget with respect
to this matter in order to adapt its older facilities to the provisions of the law in
matters of fire extinguishing and others.
• In 2016, the Ministry of Environmental Protection published a nation program to
implement the targets for reducing hothouse gases. A decision as taken during
the report year in this regard to shut down coal fired generating units 1 - 4 at the
Orot Rabin site and the suspension of the project to establish new coal fired
generating units at the Ruttenberg site.
• During the report year, the company allocated approximately NIS 1 billion for
purposes of complying with the environmental requirements in the electricity
supply chain (See Chapter 1.7).
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2.72.72.72.7 Occupational Health and Safety Occupational Health and Safety Occupational Health and Safety Occupational Health and Safety
The Importance of the Subject (G4-DMA, G4-20, G4-21)
• The company acts to ensure the occupational health and safety of its employees
and of contractors’ employees who work at the company’s sites. The company
views this subject as being critical and treats it as part of its obligations vis-à-vis
its employees and their families to prevent, insofar as possible, injury at work in
order to return them whole and healthy to their families.
• A system to protect hygiene and safety in work was set up at the company, which
operates in conjunction with the occupational medical system, pursuant to the law
and pursuant to the safety directives of the company. In addition, the company
has work instructions and safety instructions pursuant to the law and there are
procedures that are enforced at the company’s facilities, by the Safety Wardens.
• The company is reliant upon its stated activities by the following principles:
• The safety of the workers transcends equipment survivability.
• Every safety incident or almost work accident is to be examined with the approach
of learning lessons and taking steps to correct failures, and this is in order to
prevent the next incident.
• Pursuant to the law, the company employees and the contractors’ employees who
work at the company’s sites will be given a safety briefing and refresher briefings
of the safety procedures several times a year, at the time of commencement of
work and during the course thereof, will undergo periodic exercises and will use
personal protective equipment as required by law.
• Over and above safety at work, special emphasis will be afforded to work related
driving and a great deal of effort has been expended in this matter.
• For purposes of preventative health follow up, the medical system is to be
maintained together with the occupational hygiene system at the functional level
required by the law.
• Oversight on a worker’s health is affected by means of supervision of his work
environment.
• Contractors’ employees who work at the company’s sites are required, under the
contractual association agreements, to uphold the requirements of the law in this
matter. Every worker who commences work within the company’s premises must
undergo work safety training. The contractors are obligated to provide their
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workers with personal protection equipment. In the case of non-compliance with
the company’s safety procedures, the contractor’s workers and the contractor are
summoned to a clarification hearing, (G4-EU18).
Targets in the Domain of Work Accidents by 2020 (Compared to 2016)
מדד/שנה
מדד/שנהמדד/שנה
מדד/שנה
2016
20162016
2016
2017
20172017
2017
Number of accidents per
year
)Over 1 day absence(
138 132
Accident rate per
100,000 work hours
0.55 0.54
Average days of absence
Following an accident
21.6 22.8
Main Activities
• In order to ensure the health of the workers and their families, the company:
Conducts a health survey of workers over 40 years of age and periodic
examinations of workers who were exposed to occupational illnesses, gives
lectures on the topic of promoting health by expert doctors in various fields,
disseminates information to raise awareness of breast cancer, colorectal cancer
and others, and campaigns are held that advocate a healthy life style.
• Senior management receives ongoing reports of work accidents and approves the
work plan in the matter of safety, occupational medicine and hygiene. The
company operates safety committees in which representatives of the workers
association are also members, whose job is to handle the improvements required
in the various work processes, including control of the materialization thereof, with
the matter of safety committees being included in collective agreements with the
workers association, (G4-LA5, G4-LA8).
• Over 60 committees were set up in 2017 to investigate anomalous safety
incidents and actions to learn lessons from them were executed.
• While working at the company, the employees are liable to be exposed to various
damaging factors (such as noise, radiation, hazardous materials) and the
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company operates a system of occupational - environmental examinations at the
work place in order to reduce exposure.
• 130 workers, who were exposed in the past to asbestos, underwent medical follow
up examinations during the report year, as did more than 500 workers who were
exposed in the past to floating dust, etc., (G4-LA7).
• The company operates clinics at the various sites as part of the medical system
that provides first aid, examination prior to acceptance for employment and
acceptance for permanent employment, fitness tests after drawn out illnesses or
accidents, examinations of workers prior to early retirement in the wake of illness,
examinations of workers who were exposed in the past to occupational diseases,
etc., (G4-LA7). Thanks to the medical system, the company saves tens of
thousands of work hours due to the fact that the examinations are conducted at
the work site and the employees are not required to take leave to have the
examinations at the Health Care funds’ clinics