2011
Samsung Engineering
Sustainability Report
Creative Engineering Solution Provider
CEO Message
Corporate Governance
Approach to Sustainability
CONTENTS
02
10
22
Business for Sustainability
Growth Strategy
Core Competence
Project Highlight
Shaybah NGL Project
S-Oil Onsan Refinery Expansion Project
Suji Respia
Commitment to Sustainability
Ethics & Compliance
Environment, Health & Safety
Employees & Workplace
Supply Chain
Local Community
Performance Summary
Economic, Environmental and Social Performance
GRI Index
60
APPENDIX
SLOGAN
71
We are a force with no boundaries, rising above client
expectations while creating a visionary future
VISION
CORE VALUE
MISSION
Creative Engineering Solution Provider
[Vision 2020] USD 40 billion in revenue & USD 50 billion in order
About This Report
This report is Samsung Engineering’s first sustainability report. It was written to present Samsung Engineering’s commitment to
enhancing economic, environmental and social value and achievements comprehensively in accordance with the Global Reporting
Initiative (GRI) G3.1 guidelines.
Continuous Challenge
Global Citizenship
Creative Convergence
Reporting Period | This report covers Samsung Engineering’s performance and activities from January through December 2011,
and if necessary to provide time-series trends, the data of the two most recent fiscal years (from January 2010 through December
2011) were utilized. As for some issues of significance, relevant data reported until April 2012 is included in this report.
Creating and pursuing future value for clients through
engineering excellence
Reporting Boundary and Scope | We aim to report all aspects of Samsung Engineering’s domestic and overseas business areas
(including project sites) in principle, but in cases where data collection was not possible, the specific scope of the data was stated. We
set a principle of not including subsidiaries and suppliers within our reporting boundaries, while some of their activities are reported
with additional statements. The reporting boundaries and scope were based on recommendations of the GRI guidelines.
To ensure the objectivity and transparency of the content, we commissioned a third party without vested interests in the company
to verify the accounts herein (Independent Assurance Statement p.76 - p.77). Samsung Engineering will continue to publish
the Sustainability Report to share our sustainability management activities and performance as well as future goals with our
stakeholders.
Business Area & Major Track Record
Samsung Engineering has achieved outstanding performance records globally for petrochemical, refinery, gas and other hydrocarbon plant
projects. Moreover, we are seeing tangible results in providing services for industrial and environmental projects as well as power plant, metallurgy
and other new business opportunities. We are involved in several projects of various scales around the globe spanning from the Middle East, Asia,
and Americas to Europe.
1970
30
7,620
Founded
Countries
Workforce
01
EUROPE
(As of the end of 2011)
Head Office
(Seoul, Korea)
02
MIDDLE EAST/
NORTH AFRICA
EUROPE
04
03
AMERICAS
ASIA
MIDDLE EAST / NORTH AFRICA
SAUDI ARABIA
HUNGARY
UAE
• HANKOOK TIRE_PCR/TBR Plant
• SAMSUNG SDI_PDP No. 4 Module Plant
• BOROUGE_2 OCU Plant
• HCSEZ_ICAD IWT Plant
• FERTIL_2 AMMONIA/Urea Project
• TAKREER_RRE Package #3 Offsites & Utilites Project
• ADNOC_Shah Gas Development Package #4 U & O Project
• ADNOC & Borealis J/V Borouge_3 PO (Polyolefin) Plant
Borouge_3 LDPE Plant
SLOVAKIA
• SAMSUNG ELECTRONICS_LCD Module Line
• HANSOL_LCD Parts Plant
ASIA
BAHRAIN
• BAPCO_Lube Base Oil Plant
• SULB_Steel Mill Project
• MOW_Muharraq Sewage Treatment Plant
ALGERIA
• SONATRACH_Skikda Refinery Plant
• SABIC_Gas ASU Plant
• SAMCO_Acrylic Acid Plant
• SPC_PDH/PP Plant
• APPC_PDH/PP Plant
• TASNEE_Ethylene Plant
• SHARK_EG Plant
• IBN ZAHR_PP Plant, OCT Plant
• MA'ADEN_ Ammonia Plant, Aluminum Complex
• KAYAN_PP Plant, Amines Plant
• SAUDI ARAMCO_DHT Plant
• SATORP_Jubail Export Refinery Package #3 and #4 Plant
• SAUDI ARAMCO_Shaybah NGL (Natural Gas Liquid) Project
Wasit Cogen. Project
• SAUDI ARAMCO_CO2 Capture & Injection Plant
• SOCC_SOCC. Aluminum Alkyls Project
Business AreaS
AMERICAS
VIETNAM
INDIA
• IOC_FCC/DHDT Plant, LAB Plant, EG Plant
• IPCL_C2/C3 Plant, LLDPE/HDPE Plant
• IISCO_Steel Plant
• ONGC_OPal DFCU/AU Plant
• INTEL_A9 T9 ATM Plant
• PMPC_PVC Plant
• PETROVIETNAM_Fertilizer Plant and CO2 Recovery Plant
MALAYSIA
• HANKOOK TIRE_PCR/TBR Plant
• SAMSUNG ELECTRONICS_LCD Module Line
• SAMSUNG SDI_Tianjin LED Plant, Tianjin Battery Cell Line
• AIR LIQUIDE_HYCO Plant
• SAMSUNG ELECTRON-MECHANICS_ MLCC Line
CHINA
• PCSB_Sabah Oil & Gas Termical Project
THAILAND
• TTM_GSP-1 Plant
• PTT_GSP-5 Plant, GSP-6 Plant, ESP Plant
• TOC_EO/EG Plant
• MOC_Cracker Plant
KOREA
• SAMSUNG MOBILE DISPLAY_SMD A2 Project
• KR_Seoul Maintenance Workshop Phase II Project
• YONGIN CITY_Sewage Treatment Plants BTO Project
• SEOUL CITY_2002 Korea-Japan World Cup Main Stadium
MEXICO
• PEMEX_Salamanca Refinery Plant, Tula Refinery Plant,
Minatitlan Refinery Plant
• POSCO_CGL Utility Plant
• CFE_Manzanillo LNG Terminal Project, Norte II Power Plant
TRINIDAD & TOBAGO
• PETROTRIN_CCR Refinery Plant, Ultra Low Sulphur Diesel Unit,
T&T ULSD
USA
• SASL_SAS CU Ultrapure Water System
• Dow-Mitsui Chlor-Alkali LLC_Dow Chlorine Manufacturing
Facility (Falcon)
KEY FIGURES
• Hydrocarbon
Hydrocarbon
Non-Hydrocarbon
New Orders (KRW billion)
Refinery
· CDU/VDU
· Heavy Oil Upgrading
· Aromatics, HDS
Gas
· Gas Processing
· LNG (Liquefaction, Terminal)
Petrochemicals
· Ethylene
· EO/EG
· Fine Chemicals
Revenue (KRW billion)
Order Backlogs (KRW billion)
Hydrocarbon Upstream
· PDH
· Polymers
· Fertilizers
· Offshore Platforms
· FPSO (FLNG)
· Pipeline
· GOSP
10,117
9,032
20,385
11,789
9,298
• Non-Hydrocarbon
4,035
Power
· Thermal
(Coal-IGCC, Oil/Gas Fired)
Metallurgy
· Steel Mills
· Non-Ferrous Plants
(Aluminum, Copper, Nickel)
Industrial Facility
· IT Facilities
· Industrial Manufacturing Facilities
· Pharmaceutical
13,955
17,151
5,312
Water Treatment
· Desalination
· Sewage Treatment
· Ultra-Pure Reuse
· Wastewater · O&M
Treatment
2009
2010
2011
2009
2010
2011
2009
2010
2011
CEO MESSAGE
“ Our sustainability is founded on the basis of transparency, respect for the people and environment and the growth of our
partners. For us, it is our way of creating value for stakeholders.”
Dear Valued Stakeholders:
legal compliance. In the process, we will cultivate an organizational culture in
Samsung Engineering is a total engineering solution provider that generates
which every employee voluntarily complies with all related rules and regulations.
future value for clients through plant construction. Our service encompasses
Also, we will constantly monitor major legal risks and implement a fair trade system
feasibility studies, project financing, engineering, procurement, construction,
based on a corporate culture that stresses clean business practices at all times.
commissioning, and operation & maintenance, and we are making rapid
inroads into the global market. We boast outstanding capabilities to manage
the risks of cost, quality, and project scheduling as well as an extensive track
record and superb workforce. We have maintained an average annual growth of
more than 30%, breaking our records for new orders and sales every year since
2005. Currently we are engaged in projects in more than 30 countries, and our
workforce hails from 34 different nations.
Amidst a changing global market environment, Samsung Engineering faces
numerous new risks as well as opportunities. While we must address the work
safety issues, we must also respond to growing public interest in environmental
and ecological matters. At the same time, overseas projects represent an evergreater share of our business portfolio, requiring us to bolster our ties with local
communities around the world, and the scope of our responsibilities toward our
business partners continues to grow. Samsung Engineering will preemptively
address issues that arise in the global business environment.
Innovating and Growing as a Global Top-tier
In 2011, Samsung Engineering achieved a record KRW 11.8 trillion in new orders
and KRW 9.3 trillion in sales. We broke into the Iraqi and Qatari markets and are
expanding our business into Central Asia, starting with Uzbekistan. We won the
package deal, four units in one complex, for the Shaybah Natural Gas Liquid
Project from Saudi Aramco, the Saudi Arabian state-run oil company. Meanwhile,
we broke into the field of hydrocarbon upstream plant in 2010 by winning
our first order for the GOSP (Gas Oil Separation Plant), and we bolstered our
involvement in this area by winning a series of additional orders for these plants.
For non-hydrocarbon plants, Samsung Engineering has received a steady stream
of orders for facilities for power generation, metal processing, industrial uses
and water treatment in Latin America, namely Mexico and Trinidad & Tobago as
well as in the Middle East. Our perennial strength has been in petrochemicals,
and we are now leveraging that strength to deepen our involvement in LNG
processing, offshore platforms and other upstream areas, staying in step with
the increasing demand for energy over the long term. We will also lay the
groundwork for sustainable growth by diversifying into a multi-core business
portfolio that encompasses power, metallurgy, and industrial plants. Furthermore,
we will strengthen our position as a global engineering company which grows
with clients by responding to changes preemptively through systematic risk
Generating Shared Value for Human and the Environment
The leading sources of competitiveness in the engineering industry are individual
skills and the organizational strength to bring those skills together most
effectively. Samsung Engineering practices equitable personnel management
for organizational transparency. We are also encouraging self-motivated learning
and fostering specialization so that our employees can focus on shared goals
while exhibiting their individual skills freely on the global stage. The diversity
of our employees' backgrounds will enable us to establish an organizational
culture that serves as the wellspring for creative and innovative ideas. In addition,
we remain committed to helping address global environmental issues such
as climate change mitigation, bio-diversity protection, and water scarcity
prevention. We are also concerned about raising awareness of future generation
on the environment. Our competencies regarding environmental protection
continue to improve. Samsung Engineering is at the forefront of the market for
carbon dioxide recovery, desulfurization, and water treatment facilities. We are
leveraging our environment-friendly engineering capabilities to reduce energy
consumption, and we practice environment-friendly procurement and supply.
The environmental management at our construction sites is thorough as well.
Growing in Tandem with Society
As companies grow, so does their effect on society and the environment, which
means ever-greater corporate social responsibilities. Importantly, Samsung
Engineering, a global player, is constantly searching for ways to grow together
with stakeholders, and to improve the value being provided to business partners,
local communities, governments and others. We have created jobs for local
communities and helped local companies to grow. We continue to strengthen
our global sourcing network by strictly engaging in fair trading practices and
win-win partnerships. In 2011, we established SNTV (Samsung Naffora Techno
Valley) in Saudi Arabia as a multi-functional office that contributes to the regional
economy and society. Our business is engineering, and we are expanding CSR
programs that are true to our knowledge-based profession. These include
establishing libraries to help people learn in the countries where we do business,
and offering classes on the environment to children.
Samsung Engineering is committed to improving the transparency of our
operations, and we are ready to listen to you, our stakeholders. I ask for your
management, stronger human resources development and upgraded business
continued support and interest.
operation.
Sincerely,
Growing with Transparency and Responsibility
Samsung Engineering will pay closer attention to stakeholders and fulfill all
President & CEO
Ki-Seok Park
corporate social responsibilities. We are operating an ongoing compliance which
is the integrated and regular system for legal risk management. This program
includes a compliance support system and training our employees on ethics and
02
CEO MESSAGE
SAMSUNG ENGINEERING
SUSTAINABILITY REPORT
03
CORPORATE GOVERNANCE
Independence of the BOD and Protection of Stakeholder Rights
The by-laws of the BOD guarantee outside directors of Samsung Engineering the right to make decisions independently from
the influence of the company, the top management and shareholders. The by-laws are in compliance with legal provisions
regarding the appointment and disqualification of outside directors as described in the Commercial Act of Korea Article 382 (3)
and Article 542-8 (2).
• The Composition and Roles of Committees under the BOD
We will protect the rights of shareholders and other stakeholders by building advanced corporate
governance and engaging in responsible management.
BOD Chairman
President & CEO
Composition*
Deliberate upon and
resolve general matters on
the management of the
company
3 inside directors
4 outside directors
Audit
Committee
Appoint accounting,
performance, and external
auditors
3 outside directors
Cheol-Min Kim, Wan-Seon
Shin, Sang-Hoon Kim
Management
Committee
Deliberate and decide on
major management issues
3 inside directors
Ki-Seok Park, Byung-Bok
Sohn, Byoung-Mook Kim
Outside Director
Recommendation
Committee
Recommend outside
director candidates
2 inside directors
3 outside directors
Ki-Seok Park, Byung-Bok
Sohn, Cheol-Min Kim, WanSeon Shin, Sang-Hoon Kim
BOD
• Samsung Engineering BOD members*
Ki-Seok Park
Function
Byung-Bok Sohn Inside Director
Byoung-Mook Kim Inside Director
Head of Outsourcing Management Unit
Head of Business Support Division
Directors*
* The composition and members of the BOD are as of May 2012.
Audit Committee | The Audit Committee is responsible for appointing accounting, performance and external auditors. The
members of the Audit Committee are selected at the general shareholders’ meeting. The list of candidates for the Committee
members is announced publically before the day of a meeting so that shareholders can make an informed decision on
appointing Committee members. The Audit Committee is run by three outside directors to help to ensure the transparency of
Samsung Engineering’s management practices.
Cheol-Min Kim Outside Director
Wan-Seon Shin Outside Director
Sang-Hoon Kim Outside Director
Ji-Jong Chang Outside Director
Management Committee | The Management Committee deliberates and decides on matters, and reports to the BOD as
Tax Attorney, Law Firm Kim & Chang
Professor of Systems Management
Engineering, Sungkyunkwan University
Professor of Business Administration,
Kwangwoon University
Vice President of External Relations,
Hannam University
authorized by the BOD resolutions, by-laws or operation rules in order to facilitate quick and smooth decision-making on
* The status of the BOD is as of May 2012.
The Composition and Roles of the BOD
BOD Composition | The Board of Directors (BOD) of Samsung Engineering aims to increase the efficiency and transparency of
management practices, and strengthen the financial soundness of the company. The Samsung Engineering President & CEO
serves concurrently as the chairperson of the board according to the BOD rules. The BOD consists of three inside and four outside
directors. Inside director candidates are recommended by the BOD or shareholders, while outside directors are nominated by the
Outside Director Recommendation Committee.
BOD Meetings | The board of directors held eight directors’ meetings in 2011, including those regularly scheduled, with a
management issues.
Outside Director Recommendation Committee | The role of the Outside Director Recommendation Committee is to help
to ensure that outside directors are able to make decisions without being influenced by the top management or dominant
shareholders. To this end, the Committee, consisting of two inside and three outside directors, nominates outside director
candidates and they are approved and appointed by the resolution of the general shareholders’ meeting. Candidates for
outside directors are selected among those with extensive knowledge and experience in business administration and relevant
technologies, ensuring that the outside directors have expertise in making effective and reasonable decisions regarding all
aspects of the sustainability management. Those who are major shareholders of or in a special relationship with the company,
however, are restricted from being appointed outside directors in order to prevent conflicts of interests in the BOD.
100 percent average attendance rate for both outside and inside directors. We assist outside directors in the performance of
their duties in many aspects by ensuring that they have timely access to management information necessary for accurate
understanding of the company’s status. We also provide them with a reasonable level of compensation for expenses incurred
while carrying out their duties.
Performance Evaluation and Compensation | Compensations for BOD directors and company executives are differentiated
according to the results of regular business target reviews and performance evaluations. The limit of the compensation is annually
approved by resolution at the general shareholders’ meeting. In 2011, KRW 5.95 billion was paid as the remuneration for the BOD,
2011 Governance Key Figures
No. of BOD meetings
held in 2011
Average BOD meeting
attendance rate
8
100%
Percentage of outside
directors in the BOD
No. of external positions
assumed by outside directors
57%
No more
than two
and the 2012 compensation limit was set at KRW 11 billion.
04
Corporate
Governance
SAMSUNG ENGINEERING
SUSTAINABILITY REPORT
05
APPROACH TO SUSTAINABILITY
Stakeholder Engagement
Classification of Stakeholders and Priorities | We divide stakeholders into two categories: business and non-business
stakeholders. The clients, employees and suppliers fall into the category of business stakeholders, while non-business stakeholders
include shareholders, investors, local communities near project sites, future generations, non-governmental organizations and
government agencies.
Environment, Health & Safety, Employees & Workplace, Supply Chain, and Local Community). We will continue to take a
CEO
CSR Office
(under the Financial
Support Division)
• Business Unit:
Energy∙Hydrocarbon∙
Power Business Unit
•Risk Management: Project
Support Dept., Quality
Management Dept.
• Corporate Governance:
Business Management
Dept., Human Resource
Management Dept.,
Accounting & Tax Dept.
• Ethics & Compliance:
Compliance Dept., Legal
Dept., Audit Dept.
• Environment, Health &
Safety: HSE Dept.
• Employees & Workplace:
Human Resource
Management Dept.
• Supply Chain:
Outsourcing Planning
Dept., Construction
Planning Dept.,
Energy∙Hydrocarbon∙I&I
Engineering Support Dept.
• Local Community: Global
Operation Support
Dept., Human Resource
Management Dept., PR/IR
Dept.
systematic approach to sustainability management. We will pursue transparent and responsible growth, respect human and
the environment, and accompany our partners.
rs
lde
eho
r
a
h
S
• General shareholders’ meeting
• IR activities
• Public announcements
• Business updates report
Materiality Test
Creative Engineering Solution Provider
VISION
Approaches to Materiality Test | Samsung Engineering defines materiality as “key expectations from the long-term perspective
held by stakeholders who are directly or indirectly related to Samsung Engineering’s business.” We identified potential issues and
made the issue pool by interviewing employees and considering ISO 26000, OECD Guidelines for Multinational Enterprises and
CSR
Slogan
other global standards as well as issues faced by other entities in the same industry. Then, we surveyed stakeholders to determine
“Leading the Way, Building the Future”
the materiality of such issues. We identified major issues through the engagement of stakeholders and evaluated their materiality
in terms of (1) their business impacts and internal strategic priorities, and (2) the social pressures and the influences of relevant
stakeholders. The AA1000 Stakeholder Engagement Standard was applied to the test method.
Directions
Concerned
areas
Responsible growth
Corporate
Governance
Ethics &
Compliance
Respect for People and
the environment
Environment,
Health & Safety
Employees &
Workplace
Reliable
partnership
Supply Chain
Local
Community
• Materiality Test Process
Step
CSR Office | Samsung Engineering established the CSR Office in 2011 to take diverse stakeholder opinions into account
when making business management decisions. The CSR Office identifies sustainability management issues, performs relevant
channels and sharing information with external stakeholders. The establishment of the CSR Office is the first step for making
organizational governance activities more systematic and sustainability management more practical. This represents our efforts
to recognize our genuine social responsibilities and make them happen.
01
▶ Developing the issue pool
Global standards
functions of the office include raising employee awareness about sustainability management, and building communication
Approach to
Sustainability
sS
ta
keh
al
older
Co
mm
uni
ty
• Structures for Sustainability Management
enterprise-level activities in cooperation with business and supporting units, and reports the results to top management. Other
06
• Official Website
• Press kits
• Operation of global offices
• Training regional specialists and market
investigation
• Social contributions to local communities
Suppliers
Way, Building the Future.” The directions are further divided into six priority areas (Corporate Governance, Ethics & Compliance,
•O
peration of associations with design
companies, vendors and subcontractors
in Korea
•O
peration of SEGA system for both
domestic and overseas vendors
•O
peration of GPN system for overseas
subcontractors
• F SI (Family Satisfaction Index) surveys
• Meetings, training and support
er
responsible growth, respect for people and the environment, and reliable partnership under the CSR slogan of “Leading the
ld
Approaches to Sustainability Management | Our approaches to sustainability management cover the three directions of
• Environmental education program,
'Kumpooh' and 'Eco-generation'
• Environmental campaigns
• Development of environmental
technology
• IRC (Industrial Relations Council)
• E mployees satisfaction survey
• Intranet
•C
ompany newsletter, Campaigns
• Regular meetings
Em
plo
ye
Business
es
Sta
ke
s
ent
Cli
es
in
us
c
Non-B
Lo
• Organizations
for Sustainability
Management
• The client portal
• Sales and marketing channels of each
business unit
• PSI (Plant Satisfaction Index) surveys
• HSE satisfaction surveys
ho
The Structure for Sustainability Management
• Major Stakeholders of Samsung Engineering and Communication Channels
Environment
We are aware of the importance of corporate social responsibility. Samsung Engineering will continue to
create shared value with all stakeholders, through sustainability management.
Domestic and
overseas business
trends in the
industry
Internal interviews
• Identify the pool of issues concerning
sustainability management
Step
02
Step
▶ Surveying stakeholders
03
▶ Selecting key issues
Employees
2011 Stakeholder
Engagement
Survey
Clients
Suppliers
Definitions of
Samsung Engineering’s
key issues
Other stakeholders*
• The surveyed: employees, clients, suppliers and other
stakeholders
• Content: collect opinions from each stakeholder group
about relevant issues in terms of the current status of
Samsung Engineering and future directions
• Analyze the business impacts and internal
strategic priorities
• Analyze the social pressures and the
influences of relevant stakeholders
• Determine key issues
* Other stakeholders include journalists, analysts,
investors, the people from credit-rating agencies,
government and NGOs who are familiar with Samsung
Engineering as well as its shareholders.
SAMSUNG ENGINEERING
SUSTAINABILITY REPORT
07
Stakeholder Engagement Survey | We organized the 2011 Samsung Stakeholder Engagement Survey starting from January to
Key Issues Defined by Samsung Engineering | We identified the level of stakeholder interests in key issues and evaluated their
February 2012 in order to identify the expectations of stakeholders. The questionnaires of the survey were developed in 21 areas
influences to our businesses through the stakeholder survey. The findings served as the basis for creating the materiality matrix.
to include issues defined by global standards and faced by other companies in the industry. The survey was conducted on the
The materiality test identified upholding ethical practices and securing compliance, health & safety, talent development, and
four groups of stakeholders (employees, clients, suppliers and other stakeholders). We consulted each stakeholder group to obtain
contributions to local economies as the issues of significance.
their opinions about the current status of Samsung Engineering and future development directions with regard to sustainability
• The Results of the 2011 Materiality Test
management.
Business impacts and internal strategic priorities
• 2011 Stakeholder Survey
Clients
Employees
Survey period
Jan. 9 ~ 23
(for about 2 weeks)
Surveyed
• Domestic: about 6,000 people
• Overseas: about 1,000 people
• Participation rates: 29.7%
Common items
Specific items
Non-business stakeholders
(external)
Suppliers
Feb. 17~Mar. 2
(for about 2 weeks)
Feb. 6 ~ 20
(for about 2 weeks)
Jan. 11 ~ 25
(for about 2 weeks)
• 57 clients
(domestic and overseas)
• Participation rates: 29.9%
• Domestic: 430 people
• Overseas: 308 people
• Participation rates: 31.7%
• 282 people
(domestic and overseas)
• Participation rates: 29.0%
• Health & Safety
• HR development
• Working conditions
(discrimination)
• Project execution capabilities
• Project environment
management
• Health & Safety
• Fair operations
(contract practices)
• Health & Safety
• Win-win cooperation
• Contributions to local economies
(p.52) – local employment and
purchases
• Raising environmental efficiency (p.30)
• Working conditions and
employee welfare (p.42)
• Corruption prevention (p.26)
[Health & Safety]
Do you think that the company is providing employees and project
participants with proper field safety and health programs?
36.0%
11.9%
44.0%
12.0%
Very high
[Climate Change Response]
How do you think the company should respond to climate change
issues that have emerged as global concerns?
The company needs to engage in
voluntary actions
• Education for future generations
[Human Resource Management]
What do you think are the priorities to strengthen the competencies of
human resources?
5.4%
10.2%
[Environmental issues]
What are the areas that you think the company should concentrate
more resources on?
Yes
No
I don’t know
64.7%
[Win-Win Cooperation]
What aspects of support and cooperation do you think are needed
to build the long-term structure for mutually beneficial relationships
with suppliers?
Strengthened education and training
opportunities
Practical performance evaluation
Improved employee welfare
Higher salaries and incentives
Employment of experienced employees
40.3%
16.9%
27.2%
[Local Community]
In which areas do you think the company should make more efforts for
local communities with our business footprint?
0.1%
7.4%
11.2%
The company should show leadership
preemptively
The company should consider potential
business opportunities
• Inspection of human
rights conditions
Social pressures and the influences of relevant stakeholders
Relatively high
It is sufficient for the company to engage
in defensive actions
•R
esponses to macro-environmental
issues (p.33) - Climate change,
biodiversity, water shortage
▶ Potential issues
8.0%
Moderate
• Eco-friendlier projects (p.21)
• Project-based social contributions (p.56)
• Win-win cooperation
with suppliers (p.49)
23.4%
Relatively low
Approach to
Sustainability
• HR development (p.39)
• Strengthening the global network
of suppliers (p.47)
• Health and safety of local
communities
0.0%
The company should refrain from taking
actions as much as possible
• Occupational health and safety (p.35)
• Laying the groundwork (p.12)
• Technology transfer
• Corporate governance
• Future growth potential
[The Level of Sustainability Management]
How would you describe Samsung Engineering’s current sustainability management level?
Very low
•U
pholding ethical practices and securing
compliance (p.25)
• Project quality and risk management (p.14)
• Evaluation of the current status and determination of future directions: Awareness, the progress of sustainability management,
strategic relevance, and priorities in internal resource allocation
• Common expectations: Ethics & compliance, environment, response to climate change, social contributions, and relationship with
local communities
• Key Findings of the Stakeholder Engagement Survey
08
▶ Key issues
42.8%
38.5%
Execute projects focused on eco-friendliness
Raise the environmental efficiency of design
and logistics
Strengthen the management of construction
sites
Develop eco-friendlier technologies
Show leadership in dealing with macro-level
environmental issues
8.0%
9.4%
37.1%
16.8%
28.7%
Cooperative system for engaging
in sales activities and winning new
orders
Financial incentives
System for closer communication
Support for HR development and
training
Technological cooperation
4.1%
15.5%
38.5%
18.9%
23.0%
Social contributions through local
employment and purchases
Investment in infrastructure and education
opportunities in local communities
Expanded welfare and benefits for local
employees
Closer relationship with local stakeholders
Project-based social contributions
8.4%
12.6%
39.7%
17.3%
22.1%
SAMSUNG ENGINEERING
SUSTAINABILITY REPORT
09
Business for
Sustainability
We aim to be an enterprise that grows sustainably through management strategies from the long-term
perspective and responsible project execution in the changing market environment.
Growth Strategy
12
•Diversify business portfolio
• Diversify markets
• Upgrade project execution
capabilities
•Strengthen human resources
Core Competence
14
• Project management capabilities
• Systematic risk management
• Constant quality control
Project Highlight
16
• Shaybah NGL Project
• S-Oil Onsan Refinery Expansion
Project
• Suji Respia
Growth Strategy
We will focus on securing project execution capabilities and human resources that can be compared to
those of other global players as well as diversifying business and client portfolios.
We will build an integrated project portfolio in the hydrocarbon
technologies recently developed in the US make the shale gas-
plant industry by accumulating technological competence in
related business economically viable. As for the petrochemical
hydrocarbon upstream projects such as LNG plants or offshore
plants, where we enjoy comparative advantages, the Latin
facilities and expanding the business value chain.
American market is growing with great economic growth
potential.
Non-Hydrocarbon - Promoting Multi-core Business by Leveraging
Superior Project Management and Engineering Capabilities
national oil company of Qatar became our client for the first
our resources on power plant projects as a new growth business.
time. Furthermore, we managed to establish a foothold in the
The market volume of the power plant infrastructure business
Central Asian market by signing contracts for gas processing and
is expected to increase by more than $100 billion annually, as
polymer plant projects in Uzbekistan. We were also awarded
the global economy expands, urbanization and industrialization
contracts from the US Exxon Mobile and Russian Lukoil which
progress and the quality of life generally improves. We advanced
are global major oil companies. In 2012, we will strengthen our
into privately-funded power plant projects in Latin America in
existing market dominance in the Middle East and advance into
2010 when we signed a contract for a combined-cycle gas thermal
unexplored markets as early as possible. To this end, we will
power plant in Mexico. The Mexican project was to construct
identify alternative markets or establish more concrete entrance
combined-cycle thermal power plants, where gas turbines are
strategies, analyzing the different features of individual countries
run to generate electricity in the first stage and the byproducts
in detail. This will allow us to establish practical and country-
(flue gas) are then used as a heat source to run steam turbines in
specific roadmaps for advancing into new markets and to
the second stage. Such a system helps to raise the heat efficiency
diversify our geographical markets.
ourselves as a major player in the power plant industry as we are in
Upgrade of Project Execution Capabilities
the hydrocarbon industry by accelerating efforts to advance into
Project order receipt is not the end but just the starting point.
the Middle East and other geographical regions.
Building the Foundation for Sustainable Growth
by Diversifying Business Portfolio
To break down the revenue structure, hydrocarbon-
Feasibility
Study
Operation &
Maintenance
Engineering
Procurement
Commissioning
Construction
Hydrocarbon – Advancing into the Offshore Plant
Segment by Leveraging the World’s Top-class
Onshore Expertise
Business for
Sustainability
Carefully managed projects will, upon completion, bring
Metallurgy∙Industrial Facility∙Water Treatment | We have
opportunities to allow us to generate strong profits going
maintained comparative advantages in the water treatment
forward and win future contracts. We eliminate factors that may
segment (sewage & wastewater treatment, water purification)
act as obstacles in billion-dollar projects by managing potential
and the steel mills. In 2011, we worked to diversify our non-ferrous
risks and conducting detailed simulation in terms of schedule,
product portfolio and to expand our presence in the desalination
quality, costs and all other aspects. Moreover, we are committed
related projects (refinery,gas, and petrochemical
Refinery∙Gas∙Petrochemicals | Samsung Engineering
plant segment. The focus of our water treatment unit has been
to eliminating inefficiencies and optimizing the utilization of
plants) account for 64% of Samsung Engineering’s total
showed improved capabilities and limitless potential in
on the domestic market, but we are about to expand overseas
materials and people by organizing seamless cooperation among
revenues, while power plants, metallurgy, industrial
the chemical engineering area, to include hydrocarbon
by leveraging the solid track record achieved domestically. In the
design, procurement, construction and other functions.
facilities, water treatment and other non-hydrocarbon-
plants, oil refineries and gas processing plants, in
metallurgy segment, we will continue to build on our success in
related areas hold the remaining 36%. The company is
2011. Our unrivaled stature in the hydrocarbon area
non-ferrous processing plant projects as we successfully execute the
focusing on the diversification of the business portfolio
was reconfirmed when we won the Shaybah NGL
Aluminum Rolling Mill project in Saudi Arabia. Our industrial facility
by advancing into new project areas to have flexible
project from Saudi Aramco, the Saudi Arabia state-
unit will strengthen capabilities through constant investment.
responsiveness to the recent move toward ever-larger
run oil company. In 2012, we are poised to strengthen
project size and complexity. We are expanding the
our market dominance in these traditional mainstay
offshore business from the long-term perspective, as
segments and to diversify our geographic market
the energy market structure is expected to change
regions by advancing into Iraq and Kuwait as well as
and demand for energy is projected to remain robust.
Russia and Indonesia, which play a significant role in the
Meanwhile, we are also providing clients with genuine
global energy market.
added value through exceptional engineering services
Hydrocarbon Upstream | We have continued to build
that meet the needs and requirements of clients in
a solid track record in the upstream hydrocarbon area,
the eight project areas of refinery, gas, petrochemicals,
which we entered in 2010. We are further improving our
power, metallurgy, water treatment, and industrial facility
expertise in Gas Oil Separation Plant (GOSP), winning
plants.
orders for the Shaybah NGL project in Saudi Arabia, the
Banyu project in Indonesia, and West Qurna project in Iraq.
12
to expand our footprint in the Middle Eastern market. The
Power Plants | In the non-hydrocarbon area, we are focusing
and lower greenhouse gases at the same time. We aim to position
• Business Process
Against this backdrop, we first advanced into Iraq and Qatar
Expanding our Client Base through Market Diversification
Strengthening Human Resource Competence and Building
an Innovation and Creativity focused Corporate Culture
We believe that in the engineering field competitiveness stems
largely from the competencies of individuals as well as from the
ability to bring those skills together. Thus, our goal has been to
The significant changes observed in the EPC market include the
ensure all employees are equipped with the capabilities to work
diversification of geographical markets in line with the economic
globally, encouraging them to develop themselves and become
growth of emerging markets and resource-rich countries. In
experts in their respective areas of responsibility. Moreover, we work
the hydrocarbon upstream businesses, an increasing number
to ensure that the distinctive diversity of our workforce facilitates
of orders for the GOSP (Gas Oil Separation Plant) projects were
the generation of creative and innovative ideas. To this end, we
placed mainly by clients in Algeria, Libya and other North African
are building a cooperative working atmosphere through constant
countries in 2011. Meanwhile, the Asian region was assessed to
communication and fostering a corporate culture that enables
have great potential for the offshore plant segment. In addition,
every employee to accomplish his or her duties regardless of
we expect shale gas-related business opportunities will surge, as
gender, age, nationality, level of experience and other factors.
SAMSUNG ENGINEERING
SUSTAINABILITY REPORT
13
Core Competence
We will build the structure for sustainable growth through systematic risk and quality management,
and outstanding project management capabilities.
Its integrated research and data retrieval functions guarantee us to
continuous improvement of business performance, and the operations
share the information easily.
of the system are documented and managed constantly.
Proposal Risk Management | We follow preset processes when
COPQ Management | Improving project quality is crucial for
submitting a project proposal to a client. Before finalizing a price
achieving sustainability because the failure of quality control
offer, we review the observance of the proposal procedures,
eventually results in cost increases. As such, we implemented the Cost
and the appropriateness of project schedule, exchange rates,
of Poor Quality (COPQ) management program in 2011, a cost-side
contract terms and price estimates through a checklist.
approach to quality issues at the enterprise level, to minimize cost
Project Risk Management | Once a project begins, we first hold
increases resulting from project management failures. The program
a workshop to identify potential risks that may emerge during
helps us define and categorize potential quality-related costs, and
the project execution. Then we analyze and assess those risks by
find possible solutions to deal with specific issues.
using a systemic risk-mapping method, and perform various risk
Quality Issue Management | We are conducting internal and
management strategies to maintain, reduce, transfer or avoid risks.
external audits for our projects in accordance with the quality
management system. These quality audits are performed in various
Continuous Quality Control
formats such as jointly with clients, exclusively in-house or through
Quality Management System | Samsung Engineering’s quality
management system was designed to meet all requirements of
ISO 9001:2008/KS Q ISO 9001:2009. All of our organizations and
employees clearly grasp the system and quality control policy, and
they are determined to meet their responsibilities for the proper
implementation of the policy. The quality targets include (1) improving
client satisfaction on project execution, (2) attaining continuous
a third party. They allow us to identify and correct significant
problems, helping to reduce client concerns. In addition, we
used the categories of quality-related costs to establish concrete
action plans to prevent the recurrence of problems. A quality
issue management system was also established to ensure the
continuous management and correction of those problems in the
future.
improvement of work processes, and (3) improving project work
quality. The quality management system is designed to promote the
Project Management Capabilities
In the engineering field, core competencies depend on
the capabilities to manage projects as well as on expertise
in design, procurement and construction work. We are
committed to building an effective project management
system and applying it to executing projects.
Project Management | We have secured distinctive
competitiveness by running an integrated project
management system that oversees all project processes.
At the initial stages of a project, knowledge-management-
number of new orders.
Systematic Risk Management
Almost all of our projects are conducted on a turnkey basis,
procurement, construction and handover. The department identifies and analyzes the major problems of a project and shares them with the person in charge
of the project.
where we perform everything from engineering design
and procurement to construction and commissioning. As
such, we are managing risks through a multifaceted risk
Market Assessment and Analysis | The risk management
risks. Moreover, our global sourcing and supply chain
processes at the marketing stage include (1) region
management systems allow us to respond flexibly to
selection, (2) preliminary research, (3) primary enterprise-
changes in the international market conditions and
level report, (4) on-site research, (5) establishment of action
project schedules.
plans and (6) secondary enterprise-level report. We make
Project Schedule Management | Project completion
checklists based on the result from preliminary and on-
basis through the Project Portal. The portal system keeps
We conduct regular Plant Satisfaction Index (PSI) surveys to solve clients' complaints and improve our business processes, and the results are managed as
PSI. The Quality Management department is responsible for surveying the clients of important projects for their satisfaction at each stage of engineering/
are applied to predict project results and manage relevant
projects with our clients and suppliers on a real-time
> Offering Responsible Services: Plant Satisfaction Index (PSI) Survey
maximizing clients' value have earned us a growing
management system and processes.
executing a project. We share information about ongoing
Business for
Sustainability
to manage the projects efficiently. These efforts towards
based risk analysis and systematized scheduling methods
ahead of schedule is one of the top priorities for us while
14
them informed about the project progress and allows us
site research and manage them. The Global Marketing
Intelligence System (GMIS) is in operation as an information
sharing platform that contains data on markets, products,
PSI execution phase
Engineering/Procurement
Construction
Aspects
• Detailed design capabilities
• Client communication
•C
lient requests feedback
• Procurement capabilities
• Human capabilities
•O
rganization management ability
• Quality control ability
• Responsiveness to clients
• Project execution capabilities
• Project site management capabilities
• Quality control capabilities
• Document management
• Problem-solving
• Environment and safety
• Responses to client complaints
• Supplier management
• Communication among different
types of projects
Handover
• Plant delivery processes
•D
ocument management
• Technological training
•C
ommissioning
• Technological guidance
improvement
•M
aintenance plans
• S upport for project completion
• R esponses to client complaints
clients, competitors, licensors, proposed recommendations,
and our capabilities as well as the results of major meetings.
SAMSUNG ENGINEERING
SUSTAINABILITY REPORT
15
Project Highlight
* Saudization: The national policy of Saudi Arabia that encourages
the employment of Saudi nationals and the usage of local
equipment to a certain extent in businesses run by foreign
enterprises. Companies that fail to comply with Saudization
regulations are restricted from participating in Saudi Arabia.
Sustainability Obtained through Thorough
Project Environmental Management
We will secure sustainability through environmental management while executing projects and contribute to the development of local
communities.
Shaybah NGL Project
Client
Saudi Aramco
Location
Shaybah, Saudi Arabia
Shaybah
Period
March 2011 - July 2014
Value Creation by Leveraging Integrated Project Execution Capabilities
Samsung Engineering signed a USD 2.8 billion contract for the Shaybah Natural Gas Liquid (NGL)
project in Saudi Arabia in April 2011. The project was the first time ever that all the packages in one
gas complex were awarded to a single company on a lump-sum turnkey basis. This was also the
first time for Saudi Aramco to award a multi-package contract for gas separation plants and gas oil
separation plants to a single engineering company. Samsung Engineering has completed a total of
24 projects in Saudi Arabia since entering the market in 2001 by carrying out the SPC PDH/PP project.
About half of the projects were ordered by Saudi Aramco, the national oil company of Saudi Arabia.
Our projects are in step with the Saudi government’s determination to cultivate an EPC contractor
on its own, contribute to the growth of the Saudi Arabian economy and maintain a close partnership
with the client for long-term, sustainable growth.
Our primary principle in executing projects
traffic, water collection and solid waste. As such, we
“The SNTV is our second regional headquarters for
established and are committed to implementing
managing operations in Saudi Arabia, the largest
the Construction Environment Management Plan
geographical market for Samsung Engineering,”
(CEMP) that includes ways to mitigate key findings
said President & CEO Ki-Seok Park. “The completion
from the EIA and other potential concerns.
of the SNTV represents our commitment to
emerging as an economic, social and cultural
From an Engineering Service Provider to a
Local Community Member
is thorough environmental protection and
Samsung Engineering completed the construction
management. In the Shaybah NGL project, we not
of Samsung Naffora Techno Valley (SNTV) in May
only comply with Saudi Aramco's environmental
2011 at the Jubail Industrial Complex of Saudi
standards but have also voluntarily adopted an
Arabia. It took 21 months and $100 million to build
aggressive environment & safety management
the regional headquarters, which has the total
policy to minimize environmental impact. Relevant
floor space of 38,000 m2 and 50,000 m2. The SNTV
systems and procedures have been established
consists of an office wing, training center, residential
to monitor the implementation of these initiatives
wing and employee welfare center. As such, it will
and correct problems.
provide us with capabilities to perform all EPC
The client, Saudi Aramco, requires us to follow
processes independently. Moreover, the facility will
their environmental regulations and the results
help us with hiring and employee training as well as
from the Environmental Impact Assessment (EIA).
with social contribution activities. The training center
They comprehensively define all possible areas in
is divided into the Engineering Center and Safety
which the project may have an impact: air quality,
Training Center, where local engineers are provided
biodiversity, archeological relics, soil quality, road
with design and safety training opportunities.
➊
Execution of the World’s First Lump-sum
turnkey Contract for a Massive Gas Complex
We approach the project with goals of securing
us to secure a quality local supplier base and raise
transportation safety, ensuring the unfavorable
our construction cost competitiveness. This will also
environmental conditions do not result in lower
result in an increased number of subcontracts to
Shaybah is the largest oilfield developed anywhere
productivity, shortening the construction schedule
local suppliers, thereby boosting local economies.
in the world during the last two decades. It is
and preventing accidents of any kind.
The gas and oil industry of Saudi Arabia accounts
located in the Rub Al Khali desert, also known as the
Dead Desert, near UAE. The client Saudi Aramco
is operating oil well extractors and pipes as well as
gas oil separation plants (GOSP) and other types
of gas processing & oil refinery facilities in this area.
Contribution to Local Economies through
Transactions with Local Suppliers and
Employment of Local Residents
The Shaybah project site consists of the main NGL
Samsung Engineering has a long relationship with
section and four GOSP sections.
Saudi Arabia. We have carried out a total of 20
What it takes to complete this project successfully is
projects, worth more than KRW 10 trillion, in Saudi
an integrated management strategy at the early EPC
Arabia since 2001, when we received the first order
stages as well as an interface management strategy
in this country. Since we established a local office in
to monitor the separate site areas effectively. As
1999, we have developed relationships with local
such, we are committed to completing this project
communities by employing local residents and
with excellence because this will demonstrate our
building close partnerships with local businesses.
capabilities in executing lump-sum turnkey, multi-
We established the Samsung Naffora Techno Valley
package projects. We began this project with the
(SNTV), which serves as a regional headquarters
strategies focusing on implementation of innovative
focused on facilitating investment in local
procurement systems and specific execution plans.
infrastructure projects, in 2011. SNTV has allowed
16
Business for
Sustainability
partner of Saudi Arabia, not just as a business
partner.”
The SNTV will be donated to the Al-Jubail community.
The opening of the compound will help us position
ourselves as the “Great Company” that contributes to
the development of local communities.
• Order volume: USD 2.8 billion
• Execution period: 41 months
(Construction period: 33 months)
• No. of local staff for construction
period: Maximum 11,700
Daily average 6,700
➋
for about 85~90% of the government’s income and
about 90% of the country’s total export. Given such
a high dependency and the fact that almost all oil
and gas plant projects are massive, the execution
of relevant projects creates huge employment
➌
opportunities in this country. The Saudi Arabian
government obliges a foreign contractor to employ
a certain number of Saudi Arabians, a policy
called Saudization*. We endorse the policy and
do everything possible to contribute to the local
economy. The Shaybah NGL project is planned to
employ the maximum number of 11,700 people and
the daily average number of 6,700 people through
the construction period. We also employed 20 Saudi
Arabian nationals from the beginning of the project
in order to train them as senior engineers.
➊ Signing Ceremony for Shaybah NGL Project in April 2011 ➋ Site View ➌ Site Camp
SAMSUNG ENGINEERING
SUSTAINABILITY REPORT
17
S-Oil Onsan Refinery
Expansion Project
Client
S-Oil Corporation
Location
Onsan, Korea
Onsan
Period
September 2008 - April 2011
Challenges of the World’s Largest
Para-xylene Plant Project
Creating Client Value through Outstanding Technological Competitiveness
Korean refiner S-Oil invested KRW 1.3 trillion in the construction of the No. 2 Aromatic Complex, which
will more than double the company’s capacity for petrochemical products. The commissioning of the
project was completed and the plant began regular production in April 2011, two months ahead of
schedule. Samsung Engineering was awarded the contract for the plant expansion project, as we were
recognized for our outstanding hydrocarbon project execution capabilities. We started the project in
September 2008, and completed the plant in 32 months. The environmental protection and safety
remained the top priority from start to finish. The principle can be detailed as (1) meeting economic
responsibilities by contributing to the success of the client through perfect project execution, (2)
minimizing environmental impact by strictly observing the client’s as well as our own environmental
regulations, (3) minimizing the number of work accidents through methodical safety management
practices, and (4) making social contributions by procuring and hiring locally.
To overcome these challenges, we designed
heavy industrial and non-ferrous metal operations
tall pipe racks and structural steel, used to make
are placed. The industrial complex had resulted in
the structural framework of the plant, so that
relatively higher levels of pollutants such as SO2,
The No. 2 Aromatic Complex in Onsan, Korea
major equipment can be installed among them.
NO2, O3, CO, PM10 in the area than in other regions.
has the world’s largest para-xylene plant. Annual
In addition, we adopted the modularization
Thus, the government designated it as a special
output capacity has been raised to 900,000 tons
method, where almost all installations were
environmental countermeasure zone, subject to
of para-xylene and to 300,000 tons of benzene.
pre-fabricated offsite, and then moved to and
stricter environmental air quality standards, in 1986.
Para-xylene is produced from naphtha feedstock
assembled onsite. In addition, we established
We had to come up with measures to curb NOx
and used to produce polyester, PET (Poly Ethylene
and implemented strategies to accelerate
and SOx emissions to meet the tight environmental
Terephthalate) and food packing materials.
construction, including engineering and schedule
standards from the design phase.
Benzene is a feedstock for making polymers,
management, adjustment of priorities depending
plastics, surfactants, drugs and dyes. The products
We set preventive environmental protection
on constructability, focused delivery management
produced in the expanded facilities will be sold
and voluntary green management as our core
of long lead equipments, and commissioning-
on the global market, increasing Korea’s annual
business values under the principle of focusing
centered project execution.
on the prevention of environmental accidents.
export by more than USD 2 billion.
Project execution was determined to be extremely
difficult because it was basically an expansion of
Project Execution in a Special Environmental
Countermeasure Area
existing facilities to establish the world’s largest
We implemented the denitrification and
desulfurization facilities to reduce SOx and NOx
emissions. We installed air pollution prevention
equipment that has emission standards stricter
annual production capacity. Moreover, the
Another challenge faced by this project was the
than legal regulations, and even processed rainfall
complex is located on a site reclaimed from the
status of the Ulsan-Onsan area. The plant is located
at the project site by installing a special water
sea, and the allotted period was just 32 months.
in Onsan, where industrial complexes and various
treatment system (Process Clean Sewer System).
INTERVIEW
“At first, I was worried about whether Samsung Engineering could draw a design that can accommodate all necessary facilities at this limited site as well as complete this project properly. The allocated time for this project was rather short, too. To make matters worse, unusual extreme weather
events such as frequent torrential rains and unprecedented heavy snowfall became further obstacles that the employees had to overcome. However, Samsung Engineering addressed all of these
challenges, met the delivery date and satisfied the quality requirements. The completion of this
project on schedule helped us to secure growth momentum as a global market leader.”
(Duck-Soon Lim, Project Manager of S-Oil Corporation)
We also installed photovoltaic power generators
by training employees, preparing for possible
inadequate practices and to prevent the
with a combined capacity of up to 20 kW a day. The
emergencies, responding to actual accidents and
recurrence of the same accidents. These safety
electricity generated by the solar panels is used for
engaging in effective communication efforts.
management activities enabled us to exceed the
outdoor lighting and lights in the control room.
For the S-Oil Onsan project, we established risk
client’s expectations.
Project Site Management Based on the
Health & Safety Management System
We adopted the Plan-Do-Check-Act (PDCA)
method for the management of health, safety
and the environment for construction projects.
The PDCA method consists of four steps: (1)
identifying risk factors, (2) establishing targets and
detailed action plans through risk assessment, (3)
determining specific roles and responsibilities for
organizations, and (4) managing actual projects
18
Business for
Sustainability
management plan for each phase of work before
construction. For example, we used equipment
modules and assembled them before installation
so as to manage risks related to limited working
spaces. We also conducted simulation tests to
manage seasonal risks such as bad weather and
extreme weather events.
We continuously monitored the safety-related
risks and carried out constant performance
assessments for the analysis and management
• Order volume: USD 1 billion
• E xecution period: 32 months
(Construction period: 22 months)
•N
o. of local staff for construction
period: Maximum 4,200
Daily average 2,300
of these risks. Efforts were also made to correct
SAMSUNG ENGINEERING
SUSTAINABILITY REPORT
19
Sewage Treatment Facilities Combined with a Leisure Complex
Suji Respia
Client
Yongin City
Location
Yongin, Korea
Yongin
Samsung Engineering has operated a privately funded project to integrate the management of
15 Sewage treatment facilities in the city of Yongin since 2010. Suji Respia is a noteworthy project
that features eco-friendliness by turning a facility once shunned into place where residents want
to come and relax. We will contribute to solving water shortages by utilizing our advanced
technologies and preventing streams from drying up.
Special Page
Responses to Climate Change by Building Plants with Reduced GHG Emissions
Samsung Engineering is poised to tackle rising environmental issues such as climate change and water shortages and to capture new market
opportunities by developing and obtaining eco-friendlier technologies and engaging in relevant projects. The projects described below show the
plant projects to which our CO2 recovery and SF6 decomposition technologies are applied in order to reduce GHG emissions.
PVFCCo CO2 Recovery Project
Period
December 2005 - June 2010
Client: PVFCCo
Location: Baria-Vungtau Province, Vietnam
Eco-friendlier Sewage Treatment Center
with a Green Park
Environmental Protection through Advanced
Water Treatment Technologies
Local residents tend to avoid sewage treatment
Out of the twelve facilities that will be constructed,
facilities, as they emit odors and release
four units located near the Han River basin feature
wastewater. In Suji Respia, however, the sewage
advanced water treatment functions to meet the
treatment units are all placed underground
requirements defined by the government’s Total
and any odor is completely contained through
Water Pollution Load Management System, which
deodorization and air purification systems.
is aimed at protecting the environmental water
Moreover, a leisure complex is built on the
quality and preventing water pollution. The four
premises, to include a sports center, art hall,
facilities are equipped with membrane bioreactor
soccer stadium, running track and park for the
(MBR) systems, functioning in an eco-friendlier
public to use. While the conventional sewage
way. Moreover, they were designed to feature an
treatment plant is an object of public displeasure,
advanced water treatment technology by adopting
Suji Respia has become the first of its kind that is
Samsung Engineering’s patented total phosphorus
well received by local residents. The International
treatment technology (PADDOⓇ : Pre-anoxic,
Water Association (IWA) recognized this design
Anaerobic, dPAO, Denitrifying, Oxic)) to reduce
idea and gave Samsung Engineering the 2008
pollution and the use of treatment chemicals.
Project Innovation Award for this project in the
Design category of the East Asia/ Pacific region.
Yongin, one of the most important satellite cities
In addition, Suji Respia provides Tancheon and
Seongbokcheon, streams flowing into the Han
River drainage system, with 30,000 tons of water a
day each to prevent them from drying up.
We will continue to seek out ways to improve
the environment and the quality of life for local
residents through our engineering technologies as
we did in Suji Respia.
• Operation of 15 water treatment
facilities with a combined daily
capacity of 250,000 tons
• Application of advanced water
treatment technologies
• Prevention of the drying-up of
nearby streams
Period: January 2009 - January 2011
A petrochemical plant consumes fuel and generates a huge amount of CO2. Part of the
greenhouse gases is reused or recycled to produce urea and methanol after CO2 recovery
processes. The PVFCCo CO2 Recovery project demonstrates Samsung Engineering’s CO2
recovery technologies, which capture carbon dioxide in combustion gas of a plant’s
ammonia processes and use it as a base material in urea production.
PVFCCo is a Vietnamese company that produces fertilizers, liquid ammonia, industrial gases
and other petrochemical materials. PVFCCo has contributed to laying the groundwork for
Vietnam’s petrochemical industry and to growing the economy since it was established in
2003. We were awarded contracts for technological support, quality assurance and project
execution for the PVFCCo project, and we completed the project within the 24-month
project schedule. It is expected that the project will reduce CO2 emissions by 87,600 tCO2
annually as the plant processes 240 tCO2 per day.
LCD SF6 Decomposition Facilities and CDM Service
Client: Samsung Electronics Co., Ltd.
Location: Asan, Korea
Period: September 2009 - December 2015
in the Seoul Metropolitan Area, has a rapidly
growing population, and the city’s sewage
The LCD SF6 Decomposition project of Samsung Electronics is aimed at reducing the
treatment needs have consequently seen a sharp
emissions of SF6, a perfluorinated compound (PFC) generated from LCD fabrication processes,
rise. This project was privately funded on a Build-
by decomposing the gas through a high temperature catalytic process. The LCD Industries
Transfer-Operate (BTO) basis under the Act on
Association proposed a voluntary target to limit the emissions of process greenhouse gases
Public-Private Partnerships in Infrastructure. The
within three million tons from all member manufactures combined by 2010. In step with the
contractor is tasked with opening twelve new
initiative, Samsung Electronics set a target of halving GHG emissions by 2013 compared to the
sewage treatment facilities and serving as the
2008 level.
single operator of Yongin’s 15 facilities, including
two existing sewage treatment facilities and
one night soil dump. This was the single largest
privately funded project in Korea and the 15
facilities are processing 252,530 m3 of sewage
a day, which accounts for over 80% of the total
This project was certified as a UN Clean Development Mechanism (CDM) in 2010. The
reduction facilities were completed and are now in operation. A UN agency is monitoring
reductions in CO2 emissions resulting from the facilities. The monitoring process will be
finished in mid-2012 and the reduction in CO2 will be certified as carbon credits that are
tradable in carbon exchanges in Europe and other regions.
sewage generated in Yongin.
20
Business for
Sustainability
SAMSUNG ENGINEERING
SUSTAINABILITY REPORT
21
Commitment TO
Sustainability
We are assessing the impacts of our businesses thoroughly in all of the economic, environmental and social
aspects, and are committed to meeting the responsibilities as a corporate citizen.
24
28
38
46
Ethics & Compliance
Environment, Health & Safety
Employees & Workplace
Supply Chain
• Preventing legal risks
• Running a regular legal risk
management system
• Promoting a corporate culture
focusing on employee ethics and
compliance
• Strengthening eco-friendly
engineering, procurement and
construction management
practices
• Improving and enhancing the
HSE system
• Raising awareness about safety
and the environment
• Improving development and
training programs for employees
• Providing fair and competitive
rewards based on job
performance
• Building a corporate culture for
effective communication and
cooperation
• Strengthening our global
partnership network
• Establishing fair purchasing
practices
• Promoting "shared growth" and
communication
Local Community
50
• Systematic management of
global offices
• Expanding local purchasing and
employment
• Expanding contributions to local
communities
Commitment TO Sustainability
Ethics & Compliance
The Compliance Program for Ethical and Legal Management Practices
We ensure that the management and employees manage legal risks properly and voluntarily abide by relevant rules
and regulations through implementing the Compliance Program.
Operations of the Compliance Program
The Compliance Department is established under the Compliance
Committee and guarantees independence. The department is
Today, legal governance for sustainability management is not
responsible for planning and implementing compliance initiatives
just a matter of corporate ethics but also directly associated
as well as supporting the Committee and the CCO. Enterprise-
with corporate survival. In 2011, we developed a systematic
level departments and business units have their own Compliance
compliance program and established the Compliance Committee
Officers (COs) and Compliance Managers (CMs) in charge of legal
and an organization dedicated to legal governance to respond
risk-related activities.
to stricter external regulations and ensure our business activities
• Organization in charge of Securing Compliance
are conducted in compliance with laws. As such, we will abide by
local laws and regulations in countries with our business footprint,
meeting our social responsibilities as a global player and continuing
CEO
to promote legal governance.
Organizations and operational structure | The Compliance
The Compliance Committee
Committee, the highest decision-making body in the Compliance
Program, deliberates upon and resolves major matters regarding
CCO (Chief Compliance Officer)
the company’s compliance management policy and the operation
The Chief of the Compliance Department
of relevant structures.
The Chief Compliance Officer (CCO) is primarily responsible for
Fair
trade
supervising Samsung Engineering’s compliance management
practices and the Compliance Program. The CCO, who is appointed
Corruption
prevention
Environment
& safety
Industrial
relations,
protection of
information
Support
for the
observance
of laws,
monitoring
by the resolution of the Board of Directors, sets the standards
for the company’s compliance policy and practices, and holds
DISCLOSURE ON
MANAGEMENT APPROACH
Management Principles
program allows us to build a systematic compliance support structure, ensuring that the management and employees
VISION ▶
Goals
MISSION ▶
Running a regular
legal risk management
system
Organizations in Charge
• Compliance
Commitment TO
Sustainability
• Legal
• Audit
Promoting a corporate
culture focusing on
employee ethics and
compliance
Foreign Bases
CO/CM
• Compliance Mission and Vision
voluntarily abide by relevant rules and regulations and manage legal risks.
Preventing legal risks
Business Unit
CO/CM
* CO: Compliance Officer / CM: Compliance Manager
Samsung Engineering has implemented the Compliance Program, a permanent initiative for the integrated management
of legal risks, helping to ensure that our business practices are conducted in compliance with laws and regulations. The
24
Enterprise-level
CO/CM
responsibility for awarding best practices and correcting violations.
Goals ▶
Build the platform for sustainable growth by establishing an integrated
compliance management system at the enterprise level
Build systematic,
integrated compliance response systems
Encourage the top management and employees to
adopt a compliance-oriented mindset
Prevention and regular management system for key legal risks
Setting guidelines
Education & Training
• Select key tasks
• E stablish operational standards and
manuals
• S hare the importance of compliance with
the top management and employees
• R aise awareness about compliance and
routinize compliance practices
Feedback
• Review and monitor
• Establish improvement plans
SAMSUNG ENGINEERING
SUSTAINABILITY REPORT
25
COMMITMENT TO
SUSTAINABILITY
• Ethics & Compliance
Environment, Health & Safety
Employees & Workplace
Supply Chain
Local Community
Compliance Guidelines
Monitoring and Feedback
We prohibit discrimination based on gender, race, nationality,
We selected legal risks that have huge potential impacts on our
businesses but are now inappropriately managed as key tasks.
We established employee guidelines about the compliance
risks and strengthened training programs customized by duty
religion and other factors. Sexual harassment is not be
If defining and responding to compliance risks is the first step
tolerated in any case. We strictly prohibit employees from
of legal risk management, continuous monitoring of defined
leaking employment information to those in business relations
risks is both the goal and starting point towards the correction
or to those who are not approved to receive such information.
and rank. We are also improving compliance processes and
Environment and Safety | We understand and observe
managing relevant risks by receiving reviews and feedback. The
our OHS rules as well as the environmental, safety and
details of key tasks are described below:
administrative laws and regulations of countries where we
of the problems.
We have established a compliance monitoring system that
In addition to setting the guidelines in these five areas,
Samsung Engineering’s Compliance Program obliges
Fair trade
employees to abide by in-house rules and regulations such as
accounting standards and procedures, accountability to report
Corruption
prevention
Environment
& safety
Guidelines
corporate management, and the code of conduct and the
code of ethics to promote employees’ integrity.
culture emphasizing integrity. The standards and the Code of
Conduct toward fair and transparent management practices
are suggested on the page. Employees can report a violation
of corporate ethics on this site.
and Compliance Manager of each functional and business
unit, and the relevant departments to review one another’s
environmental accidents and do not release environmental
pollutants.
homepage on corporate ethics in order to build a corporate
enables the Compliance Department, the Compliance Officer,
operate. We implement measures to prevent industrial and
• Compliance Processes
Ethical Management Website | We operate an online
Compliance management pledge
in April 2011
compliance activities. We have also conducted regular
audits for subsidiaries and project sites at home and abroad.
These initiatives help to raise employees’ awareness about
compliance activities.
Compliance Management System | We are running the
Compliance Management System in order to support
2011 Ethics & Compliance Key Figures
We have been involved in continuous communication efforts to raise
employees' awareness and understanding about the company’s
ethics and compliance management and to educate them on core
corporate values.
• Offline training sessions
employees to take part in compliance activities. The
basic items of the system include the introduction to the
Training/
Education
Constant Communication Efforts
Samsung Engineering has continued to communicate with
Labor relations and
corporate culture
Information
protection
Compliance
34
92
Total training
sessions
Compliance Program, regulations and manuals, Q&A board,
Corrections/
Feedback
Corruption prevention
recent compliance trends, recent compliance issues, education
sessions and support for whistleblowers.
Total hours for
training on ethics
and compliance
1,828 hours 4,373 hours
No. of participants
1,475 people 3,043 people
and educate employees about the company’s compliance
management pledge through in-house broadcasts and official
memorandums, encouraging them to engage in compliance
▶ Setting guidelines and improving systems: the boundary system, dos & don’ts
management practices proactively. In 2011, each employee
▶ Reporting to the top management and feedback
spent an average of 128.5 hours on compliance training
▶ Issuing warnings and drawing solutions for correction
▶ Evaluation and disciplinary actions
Fair Trade | Employees are not allowed to be involved in unfair
transactions and unlawful collusion and to ask someone to
provide improper influence. Our people shall not submit a
bid based on false information, but rather shall adhere to fair
contracting and subcontracting practices at all times.
4,045 people 4,367 people
prevention.
Compliance management declaration ceremony in April 2011
• Standards and Guidelines for Ethics and Compliance
Management
• Samsung Business Principles
Principles
and
Standards
• Code of Ethics
• Samsung Engineering Compliance Training Program in 2011
Session title
reveal information that is designated as legally protected trade
• Operational standards for compliance-related
activities
secrets or proprietary by the company or a third party. Our
people follow information security best practices and relevant
Guidelines
• Guidelines on major legal risks
the resources, intellectual property or facilities of the company.
• Definitions of wrongful practices for employees
Content and objective
Target
Date
Executives,
Team chiefs
March
Understanding of
the Compliance
Program
• Education on compliance and the company’s action plans
• Outline of the Compliance Program, global trends, relevant organizations at Samsung
Engineering
• Urging the top management to take leading roles in compliance activities preemptively
Fair Trade and
Corruption
Prevention
• E ducation on the ban on collusion, corruption prevention activities, international laws and
rules, and violation case studies
• Compliance with Samsung Engineering guidelines and processes
•C
ontrol of legal risks that may occur with regard to the relationship with clients and suppliers
Executives,
July,
Managers in September
charge of sales
(twice)
Compliance with
•O
utline of the Compliance Program, corruption prevention activities, the Fair Subcontract
the Fair Subcontract Transaction Act, major concerns for transactions with suppliers, etc.
Transaction Act
• R aising working-level employees’ awareness about compliance through actual visits to
ongoing project sites and solving problems through early detection of potential legal issues
Employees on
May major project November
sites at home (36 times)
and abroad
• Code of Conduct
Information Protection | We do not unlawfully obtain or
Industrial Relations and Corporate Culture | We follow
Compliance
relevant laws and regulations, fair trade and corruption
doubtful transactions.
corporate rules in performing their duties and do not abuse
No. of
participants
employees should bear in mind concerning legal compliance,
not conduct inappropriate acts such as receiving money,
not allowed to offer nor receive rebates or to be involved in
Corruption prevention
sessions. The subjects of the training included points that
Corruption Prevention | Our employees in any case do
entertainment or any service for undue benefits. They are
• Online training sessions
domestic and overseas labor laws in our business operations.
26
Commitment TO
Sustainability
SAMSUNG ENGINEERING
SUSTAINABILITY REPORT
27
Commitment TO Sustainability
Environment, Health & Safety
Green Management Applied to All Project Processes
We have established green management strategies that are applicable to all processes, ranging from engineering
and procurement to construction. Our green management performance index helps the entire organization to
engage in green management practices.
Green Management Strategies
Green Management System
As environmental issues have attracted global attention, we face
We incorporated green management initiatives into the existing
ever-greater demands for standardizing green management
environmental management system in early 2011 to establish
systems and disclosing environmental information. Clients present
the enterprise-level green management structure and we
diversified environmental requirements from the project bidding
obtained the Green Management System certificate in November
stage to include environmental waste disposal and the protection
2011. This is an integrated certification based on the ISO 14001
of the native plant species around project sites. In the assessment
Environmental Management System standards and incorporates
of credit ratings and corporate performance, environmental
the International Standard for GHG Emissions (ISO 14064) and
disclosure requirements have become stricter. Moreover, we now
the environmental requirements in the Guidance on Social
have a growing internal need to understand local environmental
Responsibility (ISO 26000).
laws and regulations in countries where Samsung Engineering
ERS | The manager of each project conducts a self-assessment
operates, as our geographical markets have been diversified and
of environmental capabilities through the Environmental Rating
project scales continue to expand.
System (ERS). The ERS consists of performance evaluation
items with regard to project site environmental management
• Green Management Strategies
in the three categories of legal regulations, site environmental
management and the environmental management system.
Strategic
direction
Promote green
management
Realize eco-friendly
project sites
Spread the
“Eco-Culture”
Key
action
plans
Lead global green
management trends
and achieve corporate
sustainability
Prevent
environmental
accidents and meet
corporate social
responsibilities
Raise
environmental
awareness and
share core values
Key
themes
Reduce raw material
consumption,
Make logistics ecofriendly,
Develop eco-friendly
products,
Practice green
procurement
Obey environmental
laws and regulations,
Preserve water
resources,
Reduce waste,
Protect biodiversity
Give
environmental
training by
position,
Build “EcoPartnerships” with
suppliers
SEIS | Environmental information of Samsung Engineering’s
domestic and overseas project sites are collected monthly
through the Sustainable Environmental Initiative System (SEIS), the
DISCLOSURE ON
MANAGEMENT APPROACH
Management Principles
We have set promoting green management, realizing eco-friendly project sites and promulgating a “culture of ecoawareness” as our main environmental strategies, and have established a management system for low-carbon and green
growth. Under our “people-first” principles, we ensure that the health and safety of our employees and project staff remain
a top priority. We will continue to practice proper safety and environmental management throughout every business
process, encompassing the engineering, procurement and construction stages.
internal management system. SEIS consists of three systems, (1)
the Environmental Management System (EMS), which establishes
environmental plans, manages project sites, and monitors
environmental performance based on ISO 14001, (2) the GHG
Management System (GMS) designed to collect data on GHG
emissions, and (3) Green Performance Indicators (GPI), which is a
module for analyzing green management performance.
* Environmental data was collected from all project sites in principle. Some sites, however, were excluded from the data collection scope in accordance with Samsung
Engineering’s internal directives if they were deemed to have negligible environmental impacts given the project characteristics and size.
Against this backdrop, Samsung Engineering established strategic
Goals
directions for environmental action plans to attain higher
environmental performance. Our green management strategies
reflect various initiatives such as the reduction of raw material use,
Strengthening eco-friendly
engineering, procurement
and construction
management practices
adherence to environmental laws and regulations, and training
Improving and
enhancing the HSE
system
Raising awareness
about safety and the
environment
programs to help promote green management, realize ecofriendlier project sites and spread the “Eco-Culture.”
Green management system certification in November 2011
Organization in Charge
• HSE
28
Commitment TO
Sustainability
• Outsourcing Planning
SAMSUNG ENGINEERING
SUSTAINABILITY REPORT
29
COMMITMENT TO
SUSTAINABILITY
Ethics & Compliance
• Environment, Health & Safety
Employees & Workplace
Supply Chain
Local Community
• Attaining Environmental Efficiency in All Business Processes
Engineering
• Identify environmental
issues
• Analyze environmental
needs
• Establish plans to
reduce environmental
impacts and identify key
performance indicators
• Raise energy efficiency
• Reduce pollutants
• Apply eco-friendly
construction methods
Procurement
• Eco-friendly/green
purchase
• Optimize logistics
• Environmental
assessment for suppliers
Construction
Operation
• E stablish the
construction
environmental
management plan
•C
onsider resource
usage, pollutant
releases, and
biodiversity protection
• Monitor environmental
pollutants in real-time
• Optimize the use of
energy, water and
chemicals
Attaining Environmental Efficiency in the Engineering
and Procurement Processes
Resources and Energy | We use the ISO 14001 system to
established the standards for air pollutant emissions and air
upsetting the ecological balance, damaging local plant species
monitor resource and energy consumption at all construction
quality pollution prevention facilities. These standards and
and polluting the soil. We consider the environmental impacts
We work hard to meet social responsibilities in relation to the
sites to respond to domestic and overseas regulations and
facilities are applied to domestic and overseas construction
of excavation and reclamation work based on engineering and
reduce costs. The consumption of key resources directly affects
sites to protect the health of employees and local residents
project site environmental management plans established prior to
GHG emissions and other environmental issues in the basic and
the overall cost of a project.
alike. People are posted at the entrance of every project site to
the kick-off of the actual project.
detailed engineering, and procurement processes. We are also
Water Resources | We divide construction water sources into
supervise vehicle and wheel washing processes. All vehicles that
Waste and Hazardous Materials | We engage in a
providing safe and reliable products and services.
tap water, surface water, underground water and reused water,
carry cargoes with dust scattering must be covered. Dustproof
multifaceted effort to minimize waste generation during our
Low-emission Engineering | Our project designs are drawn
managing each category appropriately. Almost every site uses
covers are also put on materials piled in the open air and on
business activities. Thorough management steps are also
tap water, and water collection has never been reported as
slopes at construction sites.
in place for hazardous materials to cover storage, vehicle
affecting the surrounding environment. We collect rainwater
Soil | Plant construction projects potentially affect the environment
transportation, pipe transportation, vehicle maintenance and
and underground water that comes to the surface during
because soil is used in abundance. Possible impacts include
vehicle refueling.
use of resources and energy, possible environmental impacts,
to reduce resource use, waste generation, air and water quality
pollution and noise by adopting optimized and up-to-date
technologies. In the basic engineering stage, we provide clients
with alternative designs that contain facilities to minimize
environmental pollution and treatment systems for releasing
excavation work. The collected water is used in sprinkling
systems or when washing off onsite areas, thereby reducing
effluent properly and we encourage clients to accept the
overall water consumption.
alternative designs.
Air Quality | We consider the possibility of air quality pollution
Value Engineering | Value engineering refers to a method
in all of our business processes starting from engineering,
for reducing costs by optimizing designs for higher efficiency.
procurement and construction to commissioning. We
Design optimization provides environmental benefits such as
reduced energy and resource use as well as cost saving. We
pursue eco-friendly design through the value engineering
2011 Environmental Gudelines
methodology.
We established and distributed the following environmental guide-
Green Purchase and Supplier Assessment | As a corporate
lines and manuals to provide the standard guidance for all environ-
consumer, we endorse green procurement and encourage the
mental processes in 2011:
use of green products. We are helping to promote sustainable
CASE
Eco-friendly Engineering Design
Eco-friendliness is built in during the design stage. We provided eco-friendlier
designs for Samsung Corning Precision Materials Project in 2011. The office and
plant buildings feature various ideas for higher energy efficiency and greater
eco-friendliness. The operation of air conditioning systems can be controlled
by individual offices, while ceiling-mounted air intake vents reduce heat from
lighting. Energy losses from the HAVC system were minimized by adopting
the flow control unit. Moreover, energy efficiency certified appliances, watersaving shutoff valves and remote-controlled individual lighting systems were
put in, helping the client minimize resource use. Photovoltaic modules were
also installed to use the renewable energy source in the plant buildings.
Samsung Corning Precision
Materials Project
consumption practices and responding to the government’s
environmental policies by purchasing green products under
> Use of Recycled Materials
the Procurement Procedure for Eco-friendly Materials. By
doing so, we are helping to mitigate the negative impact of
The use of recycled structural steel in plant construction is over 95% of the total amount. (Only qualified recycled
structural steel is used in the aspects of strength, tensile force and hardness.)
our business activities on people and the environment and to
use limited resources most efficiently, thereby maintaining the
quality of life and the environment in general.
Project Site Environmental Management in the
Construction Process
Samsung Engineering manages project sites in the most ecofriendly way possible to minimize the impact on resources,
120,000
• Environmental
management handbook
• Casebook of Q&As on
construction environment
• Construction environmental
management guides
• Casebook of project best
practices/failures
• Site environmental
management guidelines
• Casebook of environmental
regulation violations
Use of recycled steel in 2011
120,000 ton
60,000
15,000
Unit: Ton
2009
2010
2011
energy, water, air, soil and ecosystems.
30
Commitment TO
Sustainability
SAMSUNG ENGINEERING
SUSTAINABILITY REPORT
31
COMMITMENT TO
SUSTAINABILITY
Ethics & Compliance
• Environment, Health & Safety
Employees & Workplace
Supply Chain
Local Community
Green Management Performance
performance assessments at the enterprise level and set
Performance Management | We set up our own Green
Management Performance Index based on the standards
improvement targets to improve green management
performance steadily.
stipulated in KSI 7001. The index is used when diagnosing
Action Plans | We categorize business units according to
environmental impact during engineering, procurement and
function such as engineering, procurement, construction and
construction, and performance is monitored regularly.
support to analyze the requirements for each part and identify
The Green Management Performance Index covers two areas:
operational performance and management performance.
Operational performance is evaluated on a monthly basis
by project. It is calculated as intensity per revenue, allowing
green management issues. The issues are prioritized in the green
Responses to Climate Change, Water Scarcity, Threatened Biodiversity
and other Macro-environmental Issues
We understand macro-level environmental issues such as climate change and biodiversity, and our entire organization
will strive to tackle the related challenges.
management plan according to importance. Each task includes
detailed action plans to achieve targets related to problem
areas, scheduling and people in charge.
Reponses to Climate Change
Greenhouse Gas Management System | Our greenhouse
us to compare the results among construction sites and
Samsung Engineering annually assesses climate change-related
chronologically. We conduct monthly, quarterly and yearly
risks and opportunities for major functions of business under the
“Green Management Planning Guidelines.” Significant risks and
opportunities are addressed with individual action plans.
2010
Category
Index
2011
Data
Index
2012 Target
Data
Target*
(1) Operational Performance Index (OPI)
Energy Usage Amount**
382,435 GJ
110.8 GJ/KRW billion
1,030,151 GJ
YOY 2.5 %↓
5.9 tCO2e/KRW billion
31,199 tCO2e
8.7 tCO2e/KRW billion
80,713 tCO2e
YOY 2.5 %↓
Water Usage
8.3 ton/KRW 100 million
438,265 ton
7.6 ton/KRW 100 million
711,290 ton
YOY 2.5 %↓
Waste Generation
5.2 ton/KRW 100 million
274,490 ton
5.2 ton/KRW 100 million
482,219 ton
YOY 5.0 %↓
37.2 %
59,354 ton
34 %
111,654 ton
35 %
Waste Recycling Rate
technologies of carbon capture & storage (CCS) and integrated
gasification combined cycle (IGCC) are short-term strategies for
72.0 GJ/KRW billion
GHG Emissions**
Strategies to Tackle Climate Change | Acquiring the
us to meet international climate change pacts and environmental
N/A
-
23.1 %
KRW 85.9 million
25 %
Green Product Investment Rate
56 %
KRW 9.9 billion
54 %
KRW 11.2 billion
-
58.8 %
Environment level
80.1 points
38.7 %
Environment level
78.4 points
50 %
N/A
-
0.76 hr/person
5,792 hr
0.85 hr/person
Green Product*** Rate
Training
* Target is based on the performance index (intensity)
** Energy usage amount and GHG emissions are based on the emission of Scope 1 and Scope 2.
*** Green product rate = (The number of green projects) X 100 / (the number of projects subject to assessment)
Green products: Projects that received 80 or higher points in the Green/Environmental Inspection Assessment
to climate change. We began collecting our GHG emissions at
domestic construction sites in 2007, and expanded the coverage
to overseas sites in 2008. The system went online in 2009. The
GHG management system receives data by emission source.
When the type and amount of energy sources are entered, GHG
emissions are automatically calculated using the appropriate
methods.
regulations. Our long-term strategy calls for developing new
markets and technologies to address changes in the global
business environment caused by climate change.
• GHG Emissions
GHG emissions by direct sources in 2011*
(2) Management Performance Index (MPI)
MRO
gas inventory was established to serve as a basis to respond
Direct emissions (Scope 1, tCO2e)
Indirect emissions (Scope 2, tCO2e)
Total
CO2 intensity (tCO2e/KRW billion)
Other emissions (Scope 3, tCO2e)*
- Subcontractors (Construction equipments)
- Environmental facilities*
2010
2011
23,342
67,824
7,857
12,889
31,199
80,713
5.9
8.7
1,742,941
1,894,948
62,974
198,480
1,679,967
1,696,468
Offices
Vehicles
68,165
12,548
Unit: tCO2e
Headquarters
Project sites
* GHG emissions by direct sources include the emissions of Scope
1 and Scope 2.
* Environmental facilities include sewage and waste water treatment plant and waste incineration
plant.
• Greenhouse Gas Emissions by Country* Unit: tCO e
2
26,912
Saudi Arabia
20,943
UAE
17,141
Korea
13,475
Algeria
657
India
585
Trinidad and Tobago
352
Bahrain
281
Mexico
242
Malaysia
China
Hungary
100
25
* GHG emissions by country include the emissions of Scope 1 and Scope 2.
32
Commitment TO
Sustainability
SAMSUNG ENGINEERING
SUSTAINABILITY REPORT
33
COMMITMENT TO
SUSTAINABILITY
Ethics & Compliance
• Environment, Health & Safety
Employees & Workplace
Supply Chain
Local Community
Reponses to Water Scarcity
oxidation process (S-AOP) technology has enabled us to
Samsung Engineering is a total water treatment solution
provider, ranging from wastewater and sewage treatment
process 25 million tons of low waste-density water produced
Health and Safety as Key Indicators for Sustainable Business
in the AMOLED processes and reuse it as process water.
to deionization and desalination. We develop sewage and
industrial water reuse technologies to help address increased
water usage and subsequent water shortages in the future.
We respond to water shortages and new regulations on
total pollutant loads by developing technologies to reduce
industrial water consumption and wastewater generation.
Moreover, we strive to diversify into desalination plants
by leveraging our extensive expertise and experience in
deionization and membrane technologies.
Recycling Waste Water | The current water supply capacity
is now insufficient for satisfying water demand from the
semiconductor, LCD and other electronics industries because
water quality has generally deteriorated while the industries
have grown. Thus, the need to secure alternative water
sources continues to grow. We developed a waste water reuse
technology (SEMBRⓇ+R/O), and more than 15 million tons
of water are now reused annually, helping to solve the water
shortage in these industries. In addition, solid-advanced
Biodiversity Protection
Keen attention has been paid to biodiversity protection along
We set challenging safety and health targets at the enterprise level. We promise to remove factors threatening the
safety and health of employees and achieve accident-free sites.
with climate change since 2010. The International Union for
Conservation of Nature and Natural Resources (IUCN) said in a
UN report that 17,291 endangered species are at serious risk.
To protect wildlife, Samsung Engineering strictly fulfills the
reporting requirement prior to the start of construction, and
all relevant protection guidelines are followed during project
execution.
Ecology Management Procedure | We conducted
biodiversity protection activities under our in-house Ecology
Management Procedure in 2011. The procedure provides
practical advice applicable to construction sites for protecting
biodiversity, including the identification of factors affecting
biodiversity, prioritization of issues, and selection of projection
methods.
Safety and Health Program
Preliminary Risk Management | Samsung Engineering
Our Safety and Health Program is carried out to guarantee the
safety for our employees and subcontracted workers and to
achieve higher performance in safety management at every level
of our businesses.
Safety Management System | The Samsung Engineering safety
management system complies with OHSAS 18001. Our safety
and health program not only complies with related regulations
but also requires the full participation of business partners and
subcontractors as well as our employees. The program aims
conducts preliminary construction meetings and risk assessments
to identify the most efficient work methods for dangerous work
and manage risks prior to actual construction. Risk assessment
meetings are attended by Samsung Engineering’s construction
and safety managers as well as by their counterparts from
subcontractors. The discussions also serve as small pre-construction
meetings on dangerous work. We are building an advanced safety
management system by simulating all projects and monitoring the
simulation results to improve performance.
at establishing rigorous safety and health targets every year,
eliminating hazards that may threaten employees' health and
safety, and improving the level of health and safety consistently.
CASE
Biodiversity Protection - Manzanillo LNG Terminal Project, Mexico
• Protecting Wild Forests - Mangrove Protection
G
reenpeace and other environment organizations expressed significant concerns over this project and the Mexican government made
the protection of mangrove trees, a habitat for hundreds species of fauna and flora, a precondition for project execution. We met this
requirement by devising measures to reduce environmental impacts and took great care to protect the mangroves around the lake.
2011 Subcontractor Safety Key Figures
Samsung Engineering regularly evaluates safety levels of domestic and overseas subcontractors. We are committed to improving
the safety of subcontractors through training, monitoring and inspection activities.
• Protecting Wild Animals - Fauna Rescue
e captured and relocated wild animals in the site before the kick-off of project execution, as mandated by Mexican wildlife protection
W
regulations.
* Fauna Rescue Instructions
• Do not collect, hunt and trade in wild animals
• Rescue live animals trapped in fences.
• Do not use barbed-wire fences for excavation work
• Conduct pre-inspection before demolition
• Secure animal trails by propping up fences with sticks after work
• Avoid all kinds of activities hazardous to wild animals
Subcontractor safety
training
Subcontractor -Samsung
Engineering HSE Department
joint safety inspection
341sessions
Subcontractor safety level assessment result* (Unit: %)
88.6
83.4
34
Commitment TO
Sustainability
Capture and relocate wild alligators
66.7
70.6
50.8
141on-site monitorings
81 audits
Domestic
32 companies joined
* Safety management levels of domestic and overseas subcontractors are evaluated in the six-grade
scheme (A, B, C+, C, D, E). The graph shows the percentage of subcontractors that have received the
grade B or higher.
Overseas
2008
Subcontractor CEO
meetings and best
practice presentations
Limit access to protect forest
62.5
75.0
On-site monitoring
and audits
Mangroves in preserved sites
87.9
7times
2009
2010
2011
2008
2009
2010
2011
Fauna rescue team activities
SAMSUNG ENGINEERING
SUSTAINABILITY REPORT
35
COMMITMENT TO
SUSTAINABILITY
Ethics & Compliance
• Environment, Health & Safety
Employees & Workplace
Supply Chain
Local Community
2011 Health and Safety Performance*
In 2011, exposure work hours were 132,163,393 man-hours which were almost doubled compared to the 58,797,318 manhours recorded in 2010 as a result of expanded project activities. The level of accident management displayed by the Lost Time
Incident Rate (LTIR) stood at 0.0045 in 2011.
Total exposure work hours
132,163,393
LTIR
MH
0.0045
Standards and Guidelines | Samsung Engineering published
Client HSE Satisfaction Survey | Samsung Engineering
and distributed training guidelines by construction type
annually surveys overseas clients to see how they are satisfied
for managers and employees at overseas construction sites
with our HSE management. The survey allows us to assess and
in August 2011. A total of 30 manuals were published for
analyze the current HSE status and to understand the different
managers and 24 for other employees. They were delivered to
characteristics of clients. We also examine our strengths and
all sites along with safety training materials. In December 2011,
weaknesses by country. We are committed to achieving
the Project Setup Guide Package was shared to help project
excellent HSE performance by consistently carrying out HSE
managers establish the HSE management system in the initial
management activities and correcting any problems.
stages of a project.
Supervisor Assessment | Samsung Engineering assesses
Middle East
Africa
0.0070 (LTIR)
0.0978 (TRIR)
the performance of supervisors at domestic and overseas
Asia
sites every six months. According to the evaluation
0 (LTIR)
0 (TRIR)
0 (LTIR)
0.1173 (TRIR)
America
results, we reward outstanding performers and discipline
0 (LTIR)
0.3430 (TRIR)
underperformers. As an increasing number of new employees
join the company, we sought new measures to enhance their
Client HSE Satisfaction Survey Results
Overseas
81
71
79
Unit: Points
understanding of our safety management system.
2009
2010
2011
Supervisor Assessment Results
Domestic
• Fatality: 1
• Lost Work Day: 2
• Restricted Work: 13
• Medical Treatment: 46
• First Aid: 314
• Near Miss: 894
83
Overseas
85
81
Unit: Points
* Information is based on performance recorded in 2011. (The Asian figures do not include Korean data, and the domestic field accident rate stood at 0.18% as of 2011)
* TRIR (Total Recordable Incident Rate) = (Fatality + Lost Workday Case + Restricted Work + Medical Treatment) / Manhour X 200,000
LTIR (Lost Time Incident Rate) = (Fatality + Lost Workday Case) / Manhour X 200,000
Training and Awareness Reinforcement
Training and Communication | For the successful
implementation of the safety and environmental
management system, Samsung Engineering’s HSE
Department provides employees with information and
training programs so that they can clearly understand and
act in accordance with HSE principles. Publishing in-house
newsletters, organizing campaigns and issuing cautions on
safety risks are some examples. In addition, training sessions
are held regularly. We also participate in relevant associations
such as the working-level council among construction
companies.
Training on safety and environmental issues was provided
through the safety training matrix in 2011. The classes
covered more than 20 subjects such as “Personal Protective
Equipment” and “Fall Prevention,” targeting the specific
duties of the trainees. A total of 2,681 employees attended
the regularly scheduled safety and environment training
programs consisting of five basic and two selective sessions
held at the headquarters or through online. The four courses
for suppliers were attended by 377 people.
36
Commitment TO
Sustainability
University Student Internship Program | We organized an
82
departments of prestigious universities to strengthen
students’ field working capabilities and enhance our corporate
Unit: Points
2010
internship program in cooperation with the safety engineering
2011
2010
2011
image. One 4-week internship was held in each half of 2011.
Participants worked as field safety assistants.
External Activities | We are a member of various safetyrelated associations and councils that are also represented
by other domestic engineering and construction companies.
Samsung Engineering chairs the Construction Safety Manager
Association (CSMA), and participates in the Construction
Safety Officer Association, KOSHA 18001 Association, and
the Council of HSE Managers at Samsung Group’s four
construction companies. The CSMA held the Construction
Safety Forum, the Safety and Health Week initiative, the Safety
University student internship progam
Item
environment related activities.
Safety Talk | We organized the Safety Talk Program, an inprogram was designed to encourage employees to participate
in the efforts to become a global leader in industrial safety. The
Achievement of
safe MH without LTA
(Lost Time Accident)
program required employees to attend a five-minute Safety
Talk before key official meetings and meetings with clients,
except intra-department meetings. The Safety Talk program
raised employees’ awareness of the importance of safety and
served as a platform to share safety training packages.
Achievement of safe MH without LTA for GAS
phase Ⅷ (ASU) project
• 2011 HSE Award
and Health Manager's Night program and other safety and
house campaign to raise awareness on safety, in 2011. The
Achievement of safe MH without LTA for Saudi
Aramco DHT project
HSE Excellence
Project
Country
Award
Date
Borouge-3 PO/LDPE
UAE
7 million MH without LTA
December
GAS phase VIII (ASU)
Saudi Arabia
6 million MH without LTA
November
JERP #3 Aromatic Units
Saudi Arabia
10 million MH without LTA
October
Fertil-2 Ammonia/Urea
UAE
5 million MH without LTA
October
SAMCo Acrylic Acid
Saudi Arabia
5 million MH without LTA
September
Bapco Lube Base Oil
Bahrain
9.5 million MH without LTA
July
Saudi Aramco DHT
Saudi Arabia
17 million MH without LTA
May
Ma'aden Ammonia
Saudi Arabia
15 million MH without LTA
March
Global Engineering Center Project
Korea
Grand prize in construction,
Maeil Business Newspaper Safety
Management Award
December
Samsung Electronics Co., Ltd. NF
China
Tianjin City Haihe Cup Award
March
SAMSUNG ENGINEERING
SUSTAINABILITY REPORT
37
Commitment TO Sustainability
Employees & Workplace
Human Resource Management for Successful Career Development
Samsung Engineering helps employees fulfill their true potentials by ensuring fairness in human resource
management and offering integrated career development programs.
Recruitment
Talent Development Programs
Human Resource Philosophy | We are looking for people
Talent Development Strategies | We are seeking to run
who aspire to be experts in their fields, effective business
talent development programs that help our employees fulfill
leaders and global citizens by committing themselves to our
their utmost potentials and promote a challenging spirit. To
common vision and values. We are helping our employees
make this happen, we encourage our employees not only to
acquire these qualities with a wide range of training programs
enhance basic job skills but also to develop leadership and
and employee benefits. These offerings will help them lead
cultural abilities for higher organizational efficiency; to have
innovative activities, adhere to ethical practices and become
a better understanding of engineering, procurement and
successful global players.
construction; to enhance their conversation skills including
advanced English proficiency; to expand globally based on
our domestic capabilities to increase our global presence.
• Human Resource Philosophy
Multi-Dimensional Thinking & Creative Imagination
To achieve the goal of cultivating talented employees, we
are implementing coherent human resource development
R
F RO N T I E
Global talent
llenging the worl
d
cha
MWORK
Te
y
am
erg
play
syn
to a er maximizing als
chiev
e common go
running rank-specific business leadership development
regulation Unity
Self-
V AT I O N
lead innovative activities, stick to ethical practices and become successful global players. We aim to become an
TEA
competitiveness (Value/Leadership/Job Skill/Global Business),
t generation lea
Nex change and der
futu
g
din
re
lea
We are providing our employees with diverse training programs and attractive employee benefits to help them
Passion,
Challenging
Spirits,
Change
NO
Management Principles
IN
DISCLOSURE ON
MANAGEMENT APPROACH
desty & Transparenc
Mo
y
strategies, including strengthening our organizational
r leading the
embe
w
re m anagement s orld
tan
Co obal m
da
l
g
rd
in
EGRITY
T
N
I
programs and attracting talented employees from around the
world.
• Objectives of our Talent Development Programs
Samsung
Engineering
wants
who is...
Armed with expertise, leadership,
global mindset and connecting with the
organization based on shared value and vision
ever-better company to work for by focusing more on developing human resources and providing a better working
environment.
* The employee benefits and training programs described in this report are mainly based on those offered at our headquarters in Korea. They may vary depending on
the circumstances of each overseas office.
Fair HR Management | We are committed to making our
Providing fair and
competitive rewards
based on job
performance
Building a corporate
culture for effective
communication and
cooperation
or modify our human resource management rules based on
Client
driven
Engineering Academy
Approach
Job expert
development
Skill training
Leadership
training
Korea’s relevant laws and update them whenever they are
revised to prevent our employees from having their interests
compromised. Our overseas office hire and manage their
Global
competitiveness
Learning
culture
Early
adaptation of
new recruit
e-HRD system
implementation
employees in compliance with relevant local laws.
Organization in Charge
Commitment TO
Sustainability
Global
Standard
established policies and guidelines for maintaining diversity in
on the grounds of gender, age, religion or disability. We create
38
Change
champion
organization more transparent and dynamic by ensuring
our workforce to ensure that nobody is discriminated against
• Human Resource Management
Performance
driven
fairness in our human resource management. We have
Goals
Improving development
and training programs
for employees
Objective
• Industrial Relations Council
SAMSUNG ENGINEERING
SUSTAINABILITY REPORT
39
COMMITMENT TO
SUSTAINABILITY
Ethics & Compliance
Environment, Health & Safety
• Employees & Workplace
Supply Chain
Local Community
Training Programs | Our training programs, which may
cultural programs are mainly composed of mental training
vary depending on employee rank, can be divided into
sessions designed to stimulate employees to develop cultural
three segments: fundamental programs, cultural programs
competencies and act and think like leaders. Finally, the
and technical programs. The fundamental programs are
technical programs are intended to help employees improve
focused on basic work-related skills, including how to work
work-related skills needed to lead future growth and become
and communicate with other employees effectively. The
global players by honing their foreign language skills intensively.
Average annual learning hours per employee
Training expense per employee
135
hours
who award a project, finish a project successfully and show
We are offering a wide range of fair and competitive performance-
Fair Evaluations | Our performance evaluation programs are
capabilities and experience and to provide appropriate incentives
based on competency and performance history. The evaluation
for outstanding performance. The rewards are based on the
results are directly linked to promotion and annual salary. In 2011,
systematic performance evaluation.
we began a new compensation program that bases payment
annually determined salaries based on performance for all
169
innovation in their fields.
based rewards in order to retain talented employees with strong
Annual Salary System for All Employees | We are offering
197
177
Performance Assessment and Rewards
employees. Under the annual salary system, the basic salary and
bonus, which consisting of individual and group incentive, are
on previous evaluations in order to assess each employee’s
performance and competencies on a long-term basis. The new
program allows employees to receive more stable income by
focusing on the longer history of their performance.
provided. Moreover, the incentives are given to the employees
> Workforce Diversity
Unit: KRW in ten thousands
2009
2010
2011
We are committed to making our organization more integrated and promoting activities for more effective
• Structure of Talent Development Program
communication among employees to maximize the positive effects of diversity in our workforce. As of December
BASIC
Value
CULTURE
Leadership
TECHNIQUE
Job Skills
TECHNIQUE
Global Business
2011, we had 1,213 local employees hired by overseas offices and the total number of our overseas employees stood
at 1,366, and female employees were 1,088, with the figures on an upward trend. In addition, we are striving to reduce
Executives
conflicts within our organization by holding meetings and forums for each rank since the number of entry-level and
Senior
managers
Newly-appointed executives
Management
General
Managers
(Deputy)
Managers
Promoted
managers
Assistant
Managers
Newlyappointed
assistant
manager
[Introduction]
Scouted
Experienced
Overseas
PRM
CM
EPC
Language courses
EPC
School
Business
School
Samsung EMBA
Selection and training
PE
KP
CFM
FCM
Middle manager nurturing
process
Internal miniMBA
Leadership
education
for
Training regional each rank
specialists
Education
for each
job skill
Internal
small
foreign
language
center
Sales
Staff
Character education
for associates
Offline training
Special courses for
business units
Strategic language
courses
Onsite language
courses
experienced employees entering our organization has significantly increased for the past three years. They will promote
mutually-beneficial practices through communication and cooperation. Notably, we conducted research to see how
our employees treat and accept the colleagues with various background in order to improve the corporate culture and
strengthen our organizational capabilities in 2011.
Total Employees
Workforce Breakdown (Domestic vs. Overseas)
Online training
Commitment TO
Sustainability
(16%)
5,882
Intensive English courses for
newly-hired employees
Training from Samsung Group
Scheduled to open
Course
Purpose and Description
Target
Quick upgrading
Enable participants to do what is usually done by one-year
assistant managers in a project on their own
Up to one year
after entry
Improving core job skills
Improve job expertise and general management competencies
Staff - Depury
Managers
Internal foreign
language center
Enable participants to communicate with foreign business partners in a more professional way
All employees
Business School
Allow participants to enhance business-related basic competencies to do
tasks from a multi-dimensional and integrated perspective
All employees
Reverse Engineering
Enable participants to acquire the ability of engineering through case studies
Three to four
years after entry
TSDP (Technical Skill
Development Program)
Enable participants to have a better understanding of design codes and specifications
to improve their basic competencies
Two to three
years after entry
6,407
4,680
(84%)
Unit: People
Headquarters
Overseas Offices
Unit: People
2009
40
1,213
7,620
Project Design Procurement Construction Support
Process for upgrading entry-level employees to deploy
them to major tasks earlier
* As of the end of 2011
* This number includes all employees in the headquarters and
overseas offices
Business English
Online
Samsung MBA
Internal
introduction
Group
introduction
LE
Core Jobs Development
Courses
Leader's
Academy
Nurturing
executives
PM
2010
2011
Overseas Employees
18.5%
Female Employees
17.4%
17.9%
14.1%
13.6%
1,366
14.3%
1,088
828
1,021
636
865
Unit: People
Unit: People
2009
2010
2011
2009
2010
2011
SAMSUNG ENGINEERING
SUSTAINABILITY REPORT
41
COMMITMENT TO
SUSTAINABILITY
Ethics & Compliance
Environment, Health & Safety
• Employees & Workplace
Supply Chain
Local Community
Promoting a Work and Life Balance
Realization of Great Workplace
Employee Satisfaction Survey | Every employee has the
chance to respond to an annual employee satisfaction
survey as part of our efforts to enhance our organizational
We are committed to a balance between work and personal life for all staff. To make this happen, we are improving our
working environment and providing a wide range of employee benefits.
strength and provide a better working environment for our
employees. The survey is designed to measure how much
individuals and teams understand and focus on work and
how effectively they communicate with each other. We take
Employee Benefits
can choose the benefits they need in 2011. The new program
Employee Benefits | We are providing diverse fringe
benefits, including support for leisure activities, health
insurance and financial assistance for family events, to help
our staff concentrate on their work better. Notably, we
employed a selective benefits program, where employees
was adopted by reflecting employees’ feedback from the
Industrial Relations Council that the effects of the fringe
benefits may vary depending on the circumstances of
individual employees.
Retirement Pension Plans | We are running a retirement
pension plan to help our employees live on a stable income
stream after retirement in accordance with Korea’s Employee
• Employee Benefits
Retirement Benefit Security Act. We offer a defined-benefit
f
Gro
up
cov • Th
ere r
d
r
port fo
Sup ation fees
c
u
ed
Other Benefits
Assistance for Maternity Care | We are striving to protect
maternity care in many ways so as to help raise the low birth
rate, one of today’s hottest social issues in Korea, and allow
prehensive che
cku
• Com
• Basic checkup f p for
or s
taff staf
Employee
Benefits
Medical chec
kup
s
l tuitions
schoo
ren
ool tuitions
hild n presch
C
• dre
il
h
•C
p
med port
ica f
lb
KRW 86.7 billion, managed by Samsung Life Insurance.
or ls
il
n
ura
ins
• Gene
ral m
• Den edic
a
tal
exp l ex
en
s
Su
es
ns
pe s
e
es
seas rance
r di
su
ajo ent in
m
d
ee acci
y
b
ce
type of pension plan, which has an accumulated capital of
female employees to maintain a balance between work and
family. If a female employee gets pregnant and reports it via
our internal maternity protection system, her department
manager will adjust what she has to do at work according to
her conditions and make sure that she has regular prenatal
tests. After she returns to work following the maternity leave
spanning 90 days before and after childbirth, she can use an
• Meal allowances
• Selective benefits
in-house Maternity Room, be given priority in getting her
child admitted to the company daycare center, and use a
flexible work schedule.
measures to resolve problems, if there are any, based on the
results. In 2011, we developed a questionnaire reflecting
our specific circumstances and used it to measure what
services through face-to-face meetings, which received a
tremendous response. In addition, the counseling center
provides parenting and family advice to give our employees
a sense of comfort and security and help them have more
harmonious family lives. Going forward, we will enhance our
counseling services on treatable mental health conditions,
such as depression and mental disabilities, and make
counseling mandatory for employees who work at sites for a
long time or who are dispatched to sites at an older age.
Club Activities | We encourage our employees to join
Around 63.5 percent participated and the overall satisfaction
clubs, at least one club per person, as part of our efforts
rate was 74.7. Regarding questions about leadership, general
to promote internal communication and strengthen the
tasks, and the overall organization, the scores were high, but
corporate culture. Currently, there are over 30 clubs, including
it was found that we needed to do something to increase
basketball teams and bands, involving 1,500 people. As our
work efficiency, enhance system integration and define
workforce increases in size, we are providing more assistance
corporate values more specifically to meet the needs of
for club activities by adding more specific activities to the
our growing organization. We will analyze the results of the
club list, paying 80 percent of the club bills and making it
survey and do what is needed to improve how we work at
simpler to get a refund. More importantly, we are running
the department level as well as the company-wide level.
donation programs in association with club activities to make
In-house Counseling Center | We are running an inhouse counseling center with four regular qualified
counselors for our employees and their family members.
the participants fulfill themselves. In 2012, we will develop
the donation programs into “talent donation” activities in
association with community outreach programs.
The center was opened in 2010 and provides around 200
counseling sessions every month as of 2012. The counseling
is conducted via face-to-face meeting, online counseling,
email, SMS and phone calls. The center helps reduce stress at
work and make communication and cooperation between
employees more effective by administering psychological
tests to our employees and departments, providing feedback
for them and offering department-level programs designed
to improve communication among team members. Notably,
Visit You” in overseas offices and 9 domestic and overseas
2011 Employee Benefits Key Figures
2.03%
program, the counselors offered customized counseling
our employees thought about their working environment.
in 2011, the center carried out a program called “Counselors
Turnover rate*
construction sites (India, UAE and Algeria, etc.). In the
Christmas concert
organized by the music club
Accumulated capital of our retirement pension plan
1.84%
2.35%
(as of December 2011,
defined-benefit type)
86.7 KRW billion
Percentage of employees who work more than 1 year
after returning to work from maternity leave
2009
2010
2011
* Turover rate is based on the annual average number of fulltime employees in headquarters.
100 %
Activities of skin-scuba diving
42
Commitment TO
Sustainability
SAMSUNG ENGINEERING
SUSTAINABILITY REPORT
43
COMMITMENT TO
SUSTAINABILITY
to resolve complaints from employees and reflect their ideas
Ethics & Compliance
Environment, Health & Safety
• Employees & Workplace
Supply Chain
Local Community
when revising main company policies and rules. These efforts
are helping to protect the rights of the employees.
Strengthening the Corporate Culture and Addressing
Employees’ Complaints
Sharing the Corporate Culture | We prohibit forced labor
and child labor at all of our work sites, domestic and overseas,
Our employee at Samsung
Engineering India
in accordance with Korea’s labor-related laws and the local
regulations of the countries where we operate. All newly-hired
employees, whether they are entry-level or experienced, are
18th H.U.G. IRC (Industrial Relations Council)
required to take a two-hour class at an orientation about the
corporate culture pursuing shared growth and tolerance of
Operation of Industrial Relations Council
“creating a harmonious corporate culture” in many ways. They
Industrial Relations Council (IRC) | We have established
a labor management council defined in the labor law in
order to improve employees’ welfare and put the company
on a sustainable footing by promoting engagement and
cooperation between the employer and employees. The
council, a representation of the employees, is helping to build
are helping the management and employees feel connected
with each other by making visits to domestic and overseas
construction sites, holding diverse types of labor-management
meetings and forums once or more every month, making the
new headquarters building more comfortable for employees,
and running a program to enhance business sensibilities.
one of the best working environments in our industry, by
Promoting Labor-Management Communication | We
encouraging cooperation and a mutually beneficial corporate
hold regular labor-management council meetings involving
culture based on trust and making the company share more of
labor representatives and the same number of management
the gains from growth with its employees. The representatives
representatives. At the meetings, labor representatives share
of the IRC are elected by direct voting. Currently, twenty
employees’ feedback on major policies with the management
representatives are working for the 18th H.U.G. IRC, which was
so that something can be done to improve the working
launched in April 2011, in several divisions, including Harmony,
environment. In particular, the top management, including the
Unique and GWP. The council is striving to realize its vision of
CEO, CFO meet with labor representatives on a regular basis
diversity regardless of region, nationality, gender, age, race and
religion. As for existing employees, they learn how to embrace
diversity, communicate and cooperate with colleagues, prevent
corruption and avoid discrimination through corporate culture
promotion programs. Also, all employees are educated about
gender equality and sexual harassment prevention every year
and can file a complaint via the IRC for Woman and counseling
center if there are any issues involving sexual discrimination or
harassment. In 2011, there were no reported cases of forced
labor, child labor, sexual harassment or sexual discrimination.
Number of participants receiving education
about the corporate culture
Training for
corporate culture
Addressing Employees’ Complaints | We have established
an online and offline process to resolve complaints from
Training for corporate
competence enhancement
4,170
3,475
1,541
employees. If any of the employees finds unreasonable practices
or inconveniences, they can ask for a meeting with their
department leader or post an article via GRID-Q, the internal realtime reporting system or the bulletin board or the anonymous
1,910
reporting function within the website of the IRC. If there are any
issues regarding human rights violations, personal worries or
Unit: People
Unit: People
2010
2011
matters that need to be kept confidential, we make sure that
2010
2011
* The education about the corporate culture includes classes focused on
managing diversity and building communication to prevent discrimination
regardless of gender, nationality, status and age.
internal specialized counselors have private meetings with the
reporter to address the issue. Our complaint resolution system is
working effectively to help create a better working environment
and build trust between employees and the company.
• Vision and Mission of the Industrial Relations Council
> Women’s Leadership Conference
VISION
SECL DNA Creator Creating a harmonious corporate culture
In 2011, we held the “Women’s Leadership Conference” to share ideas about the desired roles of women as leaders and promote
communication between female employees. In the event, the activities of the IRC for Woman were presented and an external leadership
MISSION
instructor and a specialized counselor were invited to give a special lecture about how to become a successful female leader to the
audience. The conference also served as a valuable opportunity for networking.
Harmony
Unique
GWP
Promote a harmonious
corporate culture
through autonomous
communication
Unlock your
potential in diversity
Realize your dream
as a professional
A
Improve
company
rules
t
rea
Work Pla
c
e
R
G
STRATEGY
WLB &
sensibility
programs
Trend
Motivation
GWP
Affinity / Relationship / Communication
44
Commitment TO
Sustainability
ey
ac
ond
Work Pl
e
Move into
the new
headquarters
building
B
C
Shared
growth
programs
Global
SAMSUNG ENGINEERING
SUSTAINABILITY REPORT
45
Commitment TO Sustainability
Supply Chain
Global Sourcing Network Based on Fair Trade and Shared Growth
We are committed to upgrading our global sourcing network to increase our business competencies, preventing
collusion and corruption, and allowing all project participants to gain a fair share of growth based on transparent
trade and principled business ethics.
F/S*
Engineering
Procurement
Construction
Design
Vendor
Subcontractor
Global Network of our Partners
Commissioning
O&M**
*F/S: Feasibility Study
** O&M: Operation & Maintenance
vendors, consisting of Korean ones. In 2008, we began to run SEGA
(Samsung Engineering Global Alliance) to strengthen our global
Our partners are made up of design companies for engineering
network. We select SEGA member companies based on impartial
design, vendors for procurement and subcontractors for
assessment and help them remain loyal to us with a wide range of
construction. Each department chooses and registers a company
incentives. We analyze the needs of SEGA members and use the
as a partner according to criteria, such as expertise, overall
results to explore ways to make inroads into new markets along
competencies, environmental awareness and ethical conduct.
with SEGA members and develop training programs for them.
A company registered as a partner tends to have a long-term
relationship with us.
Design for Engineering | We have a total of 183 registered
DISCLOSURE ON
MANAGEMENT APPROACH
Subcontractors for Construction | For a company which seeks
to carry out executing projects, especially in foreign countries,
selecting appropriate subcontractors is of great importance
design partners: 81 companies in the hydrocarbon sector and
to complete the project successfully. We have established the
102 companies in the non-hydrocarbon sectors, such as power,
Samsung Contractors Association for domestic projects and the
metallurgy, industrial facilities, and water treatment. Moreover, we
GPN (Global Partner Networking) for overseas projects to discover
are running Gisuhwe, an association of design companies, for 24
competent subcontractors and build long-term partnerships with
such companies. We are well aware that the development of our
them. We will use the GPN to set up a database of region-specific
design partners has a direct impact on the quality of plants we
and product-specific subcontractor information and analyze the
make, so we are providing the partners with diverse assistance,
performance of subcontractors to select them strategically. At
such as know-how transfer.
the same time, the subcontractors will be able to use the GPN to
We maintain an integrated supply chain system to ensure fairness in transactions with our partners and share gains
Vendors for Procurement | We have 5,000 registered vendors
communicate with us by posting their demands to the system
from growth with them. We will strive to enhance the “shared growth” system by allowing our partners to communicate
and since 1994, we have run Seongjohwe, an association of
and having discussions with us.
Management Principles
with us more effectively.
SEGA (Samsung Engineering Global Alliance)
Goals
A total of 5,113 registered vendors, 257 SEGA vendors
SEGA: 20% of vendors ordered, 23% of the amount ordered
SEGA
Category
Strengthening our
global partnership
network
Establishing fair
purchasing practices
Promoting “shared
growth” and
communication
Organization in Charge
46
Commitment TO
Sustainability
• Audit
• Compliance
• Outsourcing Planning
• Construction Planning
• Construction Technology
• Energy Engineering Support
• Hydrocarbon Engineering Support
• I&I Engineering Support
Name
Korea
(Seongjohwe)
India
Korea
Europe
North America
China Others Total
1,300 vendors
Static
Rotating &
package
Piping
Electrical &
instruments
862
32 (22)
10
8
12
62
967
36 (15)
3
1
34
74
849
31 (19)
5
-
12
48
1,005
36 (21)
9
2
13
60
Logistics &
inspection
1,430
12 (8)
1
-
Total
5,113
147 (85)
28
11
-
13
71
257
Others
5%
3%
5%
KRW 4.3 trillion
87%
SEGA*
257 (20%)
Number of
vendors ordered
KRW 1,000 billion
(23%)
Amount of
annual order
Countries of
SEGA vendors ordered
* The number of registered SEGA vendors and the amount of orders are as of December 2011.
SAMSUNG ENGINEERING
SUSTAINABILITY REPORT
47
COMMITMENT TO
SUSTAINABILITY
Ethics & Compliance
Environment, Health & Safety
Employees & Workplace
• Supply Chain
Local Community
Signing ceremony of the fair trade agreement
for the win-win cooperation and subcontracting
in March 2010
Fair Trade
We select new partners to add to our official partner list
carefully according to criteria, such as environmental
awareness and ethical conduct as well as expertise and overall
competences.
Corruption Prevention | As more nations are stepping up
2011 Supply Chain Key Figures
Received the Good
Company Award for fair
trade and shared growth
in October 2011
anti-corruption measures, we made it mandatory for our
partners to sign and submit the anti-corruption pledge and for
all proposal participants to attend classes about non-disclosure
Department have a team of dedicated instructors for each
rank to offer training programs for corporate competency
Seminar on market trends of raw materials and
equipments in June 2010
Better Payment Conditions | We began to make all payments
programs. We held a total of 117 sessions of education about
in cash to our partners based on the progress of a project.
the latest technology and best practices. We also offered online
Moreover, the payment term has been reduced from 15 days to
training courses to 514 employees from our partners.
10 days.
Technical Know-how Transfer | We are striving to provide our
Financial Assistance | We gave loans worth a total of KRW
partners with technical support, which they need most. We
2.05 billion with no interest for six months to five small and mid
offered training programs and technical support for the latest
sized cash-strapped partners. Also, we set up a shared growth
technology, such as 3D modeling, to our partners to help them
fund worth KRW 10.6 billion with a credit limit of KRW 31.8
implement operational innovations and enhance technological
billion and have lent a total of KRW 10.5 billion to 9 small and
capabilities. In addition, we assisted 28 of our partners in
mid sized partners with a 1% interest, which was lower than the
earning ISO 9001 certification, an ISO standard for a quality
market interest rate, as of the end of January 2012.
management system. Each of the certifications is reported to
Support for Education & Training | We are helping our
have generated KRW 9.05 million, including a direct cost of
partners improve their technological capabilities and increase
KRW 4.25 million, in cost savings.
their corporate value by offering diverse education and training
Value of Shared
Growth Fund
KRW
10.6 billion
(As of January 2012)
requirements and the prevention of collusion and corruption
in 2011. In addition, our Audit Department and Compliance
Training about quality control for onsite supervisors of our subcontractors in April 2011
The number of partners
assisted in obtaining
ISO 9001 certification
ISO 28 partners
> Communication with Partners
We hold meetings with 'Gisuhwe', an association of design companies, 'Seongjohwe', an association of vendors, and 'Seonggeonhwe', an association of subcontractors and collect feedback through surveys on a regular basis. Going forward, we will
strengthen communication with overseas partners through our global network.
enhancement and compliance to entry-level employees,
experienced employees, employees to be dispatched to
overseas work sites, domestic and overseas employees for
construction sites and global offices.
Fair Trade | We have introduced a fair trade compliance
agreement to enhance commitment to compliance with
regulations and ethical practices and are implementing specific
action plans accordingly. Moreover, we are striving to create
48
Commitment TO
Sustainability
Communication Channels
Win-win Partnership
We help our Korean partners move into foreign markets with
Design company
us to build long-term partnerships with them. We offer them
well-organized assistance for financing, training and know-how
transfer, to allow them to enhance their competitiveness and
more transparent and equal partnerships by sticking to the
capture a fair share of gains from growth.
principle of shared growth throughout our operations of
Expanding Overseas with Partners | We help our Korean
choosing partners and managing processes. In addition, we are
partners make inroads into foreign markets with us. To make
imposing strict restrictions and requirements on areas possibly
this happen, we held a conference to explain how to penetrate
subject to unfairness in bidding and selecting subcontractors.
overseas markets and collect ideas from our partners in 2009.
Furthermore, we are running a fair trade system to evaluate our
We asked 66 participants about the countries in which they
partners regularly in a fair and objective manner and identify
would like to operate and helped them set up specific plans to
unfair practices and resolve problems, if any. This system allows
receive orders from foreign countries and operate in emerging
us to help our partners improve the quality of their products
markets with significant growth potential. So far, we have
and enhance operational efficiency.
worked with several of our partners in Saudi Arabia and the UAE.
Vendor
Subcontractor
Frequency
Tasks
Meeting of Gisuhwe
Once a year
Network and exchange information
Section meetings by disciplines
Every quarter Discuss current matters at section level and exchange information
General Meeting of SEGA Korea
Seongjohwe
Once a year
Section Meeting of Seongjohwe
Any time
Share operational organizations of SEGA Korea Seongjohwe and
meet with the CEO
Share the performance results of each section
Steering Committee of Seongjohwe
Four times a Discuss current matters of Seongjohwe and share the performance
year
results of each section
Seminar on market trends of raw
materials and equipments
Once a year
Eliminate project risks accompanying fast changing market conditions
and share expected market trends of raw materials and equipment
Investigation of partners’ family
satisfaction index (FSI)
Once a year
Assess the processes of choosing subcontractors, making
agreements, managing construction, controlling quality and hazards,
paying the bills, developing trade practices, and give advice on
mutually beneficial cooperation
Meetings
Any time
Meetings by disciplines
SAMSUNG ENGINEERING
SUSTAINABILITY REPORT
49
Commitment TO Sustainability
Local Community
Contributing to the Development of Local Communities through Business
We are helping local communities we operate in to grow and prosper by making the communities part of our
business activities.
Global Operations
2011 Global Operation Key Figures
We are a global corporation operating in diverse countries.
We contribute to the development of local communities we
operate in by hiring local employees and making purchases
30 countries
Number of countries
we operate in
from local firms.
By December 2011, we had set up 20 global offices in 30
countries where we have projects, and the number of locally
Global operations
20 offices
Employees at
global operations
1,213 people
hired employees was 1,213, or 16 percent of all our employees.
We are making as many purchases as possible from local
companies to reduce cost and help boost the local economy.
We are aiming to exceed USD 5 billion in orders from overseas
offices, 5,800 employees hired by overseas operations (23
percent of our workforce) and 40-percent share of design
We will follow our “local content strategy” to purchase and
tasks by 2020. To achieve these goals, we will operate regional
use resources efficiently, diversify our channels of recruitment
headquarters in four major regions: the Middle East, India,
by making the most of our foreign EPC Center Pool through
South East Asia and North America and multi-functional offices
regional EPC offices. Moreover, we will expand our global
with high marketing and resource capabilities in other regions.
outsourcing to add more value to our products and services.
Global Operation Support Department Created | We
established Samsung Engineering India (SEI), our first global
office in 2006 and have since strengthened our global network.
DISCLOSURE ON
MANAGEMENT APPROACH
In July 2011, we created the Global Operation Support
Management Principles
We are committed to helping local communities where we operate to grow and prosper by hiring local employees,
making purchases from local companies and investing in the infrastructure while engaging in community outreach
activities. We will continue to fulfill our corporate social responsibilities by encouraging more employees to participate
Department at the headquarters in Korea to help make major
inroads into foreign markets through effective localization
strategies.
in community volunteer activities and maintaining close relationships with local organizations in need as part of our
global social contribution initiatives.
• Functions of Global Offices
Goals
Functions of Offices
Systematic
management of
global offices
Expanding local
purchasing and
employment
Expanding
contributions to local
communities
Organization in Charge
• Global Operation Support • Human Resource Management • PR/IR
50
Commitment TO
Sustainability
Number of
Offices
Countries
Multi-functional
(Marketing, Support for operations, IPO, EPC)
8
Saudi Arabia, India, USA, Mexico, Algeria, Thailand, UAE, China
Marketing
6
Vietnam, Japan, Brazil, Venezuela, Indonesia, Uzbekistan
Business Support
3
Malaysia, Hungary, Trinidad & Tobago
Procurement
1
Italy
Financing
2
UK, Singapore
Total
20
SAMSUNG ENGINEERING
SUSTAINABILITY REPORT
51
COMMITMENT TO
SUSTAINABILITY
Ethics & Compliance
Environment, Health & Safety
Employees & Workplace
Supply Chain
• Local Community
Localized Approach
Also we are fully complying with the “Saudization Policy,” a
Hiring Local Employees | We recruited a wide range of
employees from the countries where we operate in 2011
to help create a virtuous cycle in the local economy. We
are focused on expanding our global operations by hiring
employees from the region. Our goal is to increase the total
number of staffs employed by our overseas offices from 1,213
now to 3,600 by 2015.
We will not just increase local recruitment but also strive to
hire and retain more talented local employees as supervisors
for their workplaces so as to enhance operational efficiency.
Moreover, we will make the most of our staff rotation program
designed to deploy employees to understaffed workplaces to
nurture talented overseas employees at the headquarters in
Korea. We are increasing local recruitment every year to create
jobs and stimulate the local economy.
In addition, we are working to strengthen our local capabilities
by maintaining the ratio of locally-hired supervisors at a
reasonable 17 to 20 percent of the workforce in the region.
In Saudi Arabia, we are preferentially employing people with
disabilities, providing internship opportunities for college
students, and running a workplace tour program. In 2010,
mandatory labor policy from the Ministry of Labor of Saudi
Arabia and have recently received the Best Company Award
for Saudization. We exceeded the NITAQAT requirement
ratio of 7 percent to achieve 11.7 percent in December 2011.
Furthermore, we employ many local workers or those from
other countries when carrying out overseas projects.
Finding and Cooperating with Local Companies | We
conduct an in-depth investigation of a country before we
into a strategically important group and a general group
depending on how much they matter to our business
Contributing to the Local Community - SNTV
local residents, offer training courses and provide voluntary
and look for local constructors and equipment makers
Completion of SNTV | We held an opening ceremony for
with a competitive advantage, which we can partner with
Samsung Naffora Techno Valley (SNTV), a multi-functional
while estimating the sales potential of the markets. We are
office building in Saudi Arabia. We began to construct the
striving to work with as many local companies as possible to
building with the investment of around USD 100 million
contribute to the development of local economy.
in September 2009 and completed it after 21 months. The
Managing Impact on Local Community | Before we launch
construction of a project, we hold public hearings to minimize
its negative impacts on the local community. If any problems
building is located within the Jubail Industrial Complex
in Saudi Arabia, where we are carrying out four projects,
including the construction of refinery facilities.
are identified during public hearings, our project managers
Functions of SNTV | The SNTV, covering 50,000 m2 of the
find solutions following the internal procedure.
site area and 38,000 m2 of the gross floor area, consists of
4 facilities including engineering, safety and sports center
we employed 30 people with disabilities in Saudi Arabia.
as well as accommodations. The building will be used not
just to carry out its own EPC projects but also to recruit
> 2011 Local Procurement Results
community services. The SNTV is designed to integrate
the functions of Samsung Saudi Arabia (SSA), our former
subsidiary in the nation and Samsung EPC (SEPC), a regional
office built to conduct local projects. Saudi Arabia is our
biggest market, where we received orders worth USD 4.7
billion in 2011. We will use the SNTV to provide permanent
offices and quality employee benefits, such as decent
accommodations, for our employees and to help our clients
achieve significant growth. In addition, the building will
serve not only as our regional headquarters for our biggest
market but as a cornerstone on which we can develop
our partnership with Saudi Arabia from business level to
economic, social and cultural level.
> Contributions of SNTV to the Local Community
We made 32 percent of all our purchases in the markets where we operate in 2011.*
We use the SNTV to help Saudi Arabia develop its economy, safety and welfare in diverse ways. The engineering center offers
Our total spending on procurement of materials for that year was more than KRW 1.35 trillion.
offices for our client so that they can promote communication in and help hire and nurture local employees. The safety
training center is designed to raise the employees' awareness about safety and reduce industrial accidents by providing safety
Total Value of Local Procurement KRW 1.35 trillion
Local to Total Procurement Ratio
The whole view of SNTV
decide to move into the market. We classify target countries
education programs from the Occupational Safety and Health Administration. Finally, the sports center is provided to local
32%
community as a sport and educational facility. The SNTV will be donated to the local community of Al-Jubail in thirty years.
We hope the building will pave the way for us to grow as a “Great Company” that is committed to the development of the
local community.
Korea
86%
Saudi UAE
Arabia
17% 26%
Linking our
business activities
with local
contribution
programs
USA
70%
India
41%
Malaysia
58%
Local Economy
Hire and train local employees
• Hire and train Saudi employees
• Offer safety training programs
* The ratio of local procurement to total procurement of materials in major markets: Countries whose local procurement ratio is 10% or lower, such as China, Thailand,
Malaysia and Algeria, are not included.
52
Commitment TO
Sustainability
Local Community
Contribute to the development of
the local community
• Provide safety experience education for
the general public
• Open sport facilities to people on holidays
• Voluntary community services by
employees, such as blood donation
Local Environment
Public awareness about
environmental protection
• Hold a writing competition about
environmental protection
• Support environmental protection
activities through sisterhood
relationships with local schools
SAMSUNG ENGINEERING
SUSTAINABILITY REPORT
53
COMMITMENT TO
SUSTAINABILITY
Ethics & Compliance
Environment, Health & Safety
Employees & Workplace
Supply Chain
• Local Community
Social Contributions and Investment in the Community
We reaffirm our commitment to fulfilling our social corporate responsibilities through social contribution in Korea
and overseas.
Creating Future Value through Social Contribution Activities
We have engaged in a wide range of social contribution
activities based on our business activities in cooperation
with our global offices. We have reaffirmed our commitment
to responsibilities as a global corporate citizen by building
schools of hope in foreign countries and provided urgent
socially responsible global corporate citizen by participating
in voluntary community services in major markets. Moreover,
live in by engaging in diverse voluntary community services
and building sisterhood relationships with rural areas and other
local communities.
'Kumpooh', Environmental Education Program
We launched 'Kumpooh', the environmental education
relief efforts for Haiti and laid the foundation to become a
program for schools in our neighborhood in 1996. At first, it
• Our Social Contribution Activities
• Building libraries in strategically important countries
Promoting talent donation and
giving activities
Creating shared value through marketing
strategies and association
Creating a future
value through
social contribution
activities
'Kumpooh' summer camp
we are leading the efforts to make the world a better place to
Voluntary community services associated
with the local community
Employees have greater pride in their company
through social contribution activities
department. The program offers online content and offline
2011, we signed a memorandum of understanding to jointly
activity programs about environmental protection for children.
operate an environment networking platform for children
This is one of our representative social contribution activities.
with the United Nations Environment Programme in Tunza,
• Donation of talent, knowledge and experience
- English Website: www.eco-generation.org
• Local public services in Gangdong-gu
Integrated Online Education Site on Environmental
Protection | Children can have access to a wide range of
multimedia learning resources, such as Flash content, video files
Indonesia, where the International Children's Conference on the
Environment was held. The children around the world can share
diverse content on the environment and engage in community
activities via the online platform and communicate with each
other in real-time through SNS functions.
games, stories and quizzes about the environment. The website
is available in two languages: Korean and English.
One -Day Teachers’ Classes about Environmental
Protection | Our employees give specialized classes about
2011 Social Contributions Key Figures
expand our existing activities.
MOU Signed with UNEP Headquarters | In September
- Korean Website: www.e-gen.co.kr
• Family public service activities of families
technology and specialized staff. The MOU will allow us to
was part of voluntary community services conducted by a
• Voluntary community services in foreign countries
• Giving festival
as the environment and green growth by using our own
INTERVIEW
Priceless Experiences with 'Kumpooh'
the environment, such as water treatment and energy, to
We engaged in more voluntary community services and collected more donations from our employees in 2011. The donations and direct
elementary and middle-school students. In addition, we provide
public services were focused on educational programs, and we also gave high priority to assistance for medical institutions and rural areas.
activity programs for experiments and quiz competitions. In
2011, we began to manage a team of employee supporters and
Spending on Social Contributions (unit: KRW 1,000)
Category
Donation
Direct public
services
Fund-raising
among our
employees
Total
2009
2010
2011
3,774,987
4,155,016
4,687,897
167,845
303,078
753,796
awareness about environmental protection.
72,741
109,908
3,993,606
4,530,835
5,551,601
Total time spent on
participating in voluntary
community services
Average time spent per person
on participating in voluntary
community services
2.7%
5.6%
3.2%
6.0%
16.6%
50,774
dispatch them to schools as one-day teachers to raise children’s
Composition of Social Contributions in 2011
Preservation | We have held UCC competitions since 2007 and
20.0%
Donations
38.9%
20.0%
Hyo-Seon Koh,
a volunteer for
'Kumpooh' summer
camp
UCC & English Essay Competitions about Environmental
Direct public
services
57.3%
29.7%
82,887 hours
Educational Institutions:
KRW 1.8 billion
Environmental Institutions:
KRW 280 million
'Kumpooh':
KRW 430 million
Medical Institutions: KRW 1.4 billion
Social Welfare:
KRW 150 million
Libraries: KRW 150 million
12.1 hours
Culture: KRW 780 million
Others: KRW 260 million
Assistance for Rural Areas:
KRW 150 million
Others: KRW 20 million
organized English essay competitions via Eco-generation, our
English website since 2008 as part of our efforts to promote
“Kumpooh was a friend as well as a teacher to me.”
environmental awareness among children. We will expand
I joined 'Kumpooh' when I was an elementary school student and
the events to the 'Global Environment Forum for Teenagers', a
have served as its member for over ten years. Though I used to live in
combination of competitions and lectures from 2012.
Jeju Island, I have been able to join the activities via the online website.
MOU for Educational Donation Signed | We signed a
memorandum of understanding to promote educational
What I remember most is that I presented a speech introducing 'Kumpooh' at the Asian Children’s Conference on the Environment in Japan
in 2007. I hope more children will learn more about how to protect the
donations with Korea’s Ministry of Education, Science and
environment and have valuable experiences at 'Kumpooh'. (Hyo-Seon
Technology in August 2011. We are running online and offline
Koh, student, 24)
education programs in 'Kumpooh' about several topics, such
54
Commitment TO
Sustainability
SAMSUNG ENGINEERING
SUSTAINABILITY REPORT
55
COMMITMENT TO
SUSTAINABILITY
Social Contributions in Korea
Ethics & Compliance
Environment, Health & Safety
Employees & Workplace
Supply Chain
• Local Community
Talent Donation | We are running a specialized volunteerism
We are committed to growing along with local communities
where we operate by fulfilling our corporate social
responsibilities. We will continue this commitment to help
shape a brighter future.
Sisterhood Relationships with Rural Communities | We
have sisterhood relationships with nine villages in Korea. We
help them with farm work, hold direct markets for agricultural
products, invite local residents to take a tour of Seoul, and
offer assistance for village events. For example, our employees
regularly visit the villages to build close relationships with local
residents by helping them do farm work, including collecting
chestnuts and picking grapes and pears, in peak season.
Moreover, we provide medical examinations for residents in
sister villages with poor medical systems and donate thermal
underwear for the elderly so that they can keep warm in
winter. Meanwhile, we buy agricultural products from the
direct markets to help farm village create more profit and
program designed to allow our employees to volunteer their
expertise to less experienced and younger co-workers to
upgrade their professionalism as part of our commitment
to nurturing talent. For this program, we hold workshops for
volunteerism leaders, encourage our employees to participate
in more talent donation programs and do various activities in
association with clubs.
Voluntary Community Services in Connection with Local
Communities | We sponsor community welfare organizations
in our neighborhood and provide voluntary services on a
regular basis to maintain close relationships with them. In
addition, our technicians visit low-income families to maintain
and repair their home appliances and work with community
organizations to provide specialized voluntary services.
We are also providing assistance and voluntary work for
events in Gangdong-gu, a home to our headquarters for the
development of local community.
donate the products to local welfare centers.
Voluntary community services in Mexico
Social Contributions around the World
We donate part of our profits we earn in overseas markets to
the local communities we operate in.
School of Hope in Vietnam | We built a 'School of Hope' in
Vietnam with donations from our employees and company's
financial assistance. The school is designed to provide
educational programs for preschoolers but it is also offering
health and medical services for local residents. We are providing
educational services for infants in Ky Tho Bac, a rural village
with poor education. We are also offering health education and
medical services for local residents, including pregnant women.
Industry-University Collaboration and Voluntary Community
Services in Mexico | We are engaged in projects in Mexico, with
dedication to serving the local community we operate in. We
consider ourselves a permanent member of the local community,
not as a temporary visitor. So we are finding organizations in need
and providing assistance for them under the slogan of “Samsung,
Buen Amigo” (“Samsung, Good Friend!”). Furthermore, we have
built a strong collaborative relationship with Universidad de
Colima, a university in the state of Colima, and offer its students
internships to find talented employees and teach them job
skills. In addition, we donated face masks to local organizations
56
Commitment TO
Sustainability
when swine flu hit the nation, and are doing voluntary work at
orphanages and nursing homes.
Mentoring and Other Support for Schools in Poor Regions
in India | Our Indian office is providing school uniforms and
➊
➋
➌
➍
➎
supplies for students from low-income regions in its “Corporate
Social Mentoring” program and offering mentoring services
to help create a intimate relationship with them. In 2010, we
provided personal computers and PC education programs
for elementary school students from low-income families
attending the Good Samaritans School in Madanpur Khadar.
Also, we invited 40 elementary school students to our Indian
office to take a tour of the offices to show them how engineers
work. In addition, we have done voluntary work at local
orphanages and sponsored sick children since 2006.
Building Libraries in Underdeveloped Nations | Given the
fact that engineering is a knowledge-based industry, we have
built libraries in strategically important nations since 2011. This
is part of our commitment to helping build a better future
by investing in nurturing talent in client nations. This year, we
will build libraries in India. This will be our first step towards
remodeling decrepit schools and community centers in rural
regions into new libraries for children and local residents.
➊ Voluntary services at Samsung Engineering India (SEI) ➋ Digging up potatoes as voluntary services ➌ Voluntary services at the School of
Hope in Vietnam ➍ 'Kumpooh' workshop for the UNEP International Children’s Conference on the Environment
➎ Employees’ voluntary services in the village of Mirinae, a rural community
SAMSUNG ENGINEERING
SUSTAINABILITY REPORT
57
PLANT ENGINEERING AND OUR LIVES
From the manufacturing of small plastic bottles with clean water that we drink every morning to the oil
refining to power cars and airplanes for our journey, the plant engineering industry is closely connected
with all of our lives.
Energy Plant
Refinery and gas plant separates and produces a variety of oils and
gases suitable for their uses from crude oil. And, the energy sources
are generally used in a wide range of our lives such as product
production, flight, driving, and commercial and residential facilities.
Environmental Plant
Environmental plant plays a major role in preventing
environmental pollution through the treatment of wastewater,
seawater desalination, incineration, landfill, reduction of
greenhouse gas emissions and recovery of soil pollution.
To maintain a clean environment along with industrial
Petrochemical Plant
development is valuable and essential for our next generations.
About 70% of our body is made of water, while
petrochemical products account for 70% of our daily
necessities. Petrochemical plants produce raw materials
for the production of our daily necessities by using basic
petrochemicals cracked in the refining process. These raw
materials are used in a variety of products such as vehicles,
cell phones and clothes.
Industrial Facilities Plant
Industrial plant encompasses a wide range of facilities to
support basic industries and manufacturing such as roads,
railways, sports complexes, logistics bases, hotels and tire
factories, which are essential for our bountiful lives.
Power Plant
Power plant generates and supplies electricity that is necessary for
our lives. The electric energy makes it possible for us to do a lot of
things that have been not feasible by other energy sources.
Metallurgy Plant
Mineral resources are transformed into various metallic materials to make it easier
to be manufactured through the metallurgy plant. Moreover, metallic materials are
used in building facilities and manufacturing products such as vehicles and home
appliances.
58
A sustainable future for the next generations will be ensured
when limited resources of the earth are more effectively
used through cutting-edge plant engineering technologies
that prevent environmental impacts and improve energy
efficiency. Based on know-how, experiences and insight
accumulated for 42 years, we at Samsung Engineering are
committed to providing optimal engineering solutions,
thereby becoming a global leading plant engineering
company that contributes to the sustainability of mankind
and environment.
SAMSUNG ENGINEERING
SUSTAINABILITY REPORT
59
Samsung Engineering
Sustainability Report
Economic Data
Income Statement*
(Unit: KRW million)
Performance Summary
2010
2011
5,312,261
9,298,184
- Domestic
1,782,934
2,437,309
- Overseas
3,529,327
6,860,875
Cost of sales
4,501,886
8,219,469
Gross profits
810,375
1,078,715
Administrative expenses
381,769
459,730
Other operating income
188,058
334,535
Other operating expenses
204,410
236,254
Operating profit
412,254
717,266
Revenue
-
36
Financial income
Share of profit of associates
69,375
63,905
Financial costs
22,603
94,187
Profit before income tax
459,026
687,020
Income tax
122,403
172,494
Profit for the year
336,623
514,526
2010
2011
* These financial statements are prepared on a consolidated basis and in accordance with the KIFRS standards.
Balance Sheet*
(Unit: KRW million)
Total assets
3,534,863
5,188,615
Current assets
2,831,725
4,156,825
- Cash and cash equivalents
408,701
560,018
2,423,024
3,596,807
Non-current assets
703,138
1,031,790
- Tangible and intangible assets
491,535
734,482
- Other non-current assets
211,603
297,308
Total liabilities
2,578,050
3,875,258
Current liabilities
2,404,525
3,644,841
Non-current liabilities
173,525
230,417
Total equity
956,813
1,313,357
Capital stock
200,000
200,000
56,624
56,624
- Other current assets
Consolidated surplus
Retained earnings
Other reserve
Non-controlling interest
Total liabilities and equity
937,816
1,358,353
△197,489
△264,338
△40,138
△37,282
3,534,863
5,188,615
* These financial statements are prepared on a consolidated basis and in accordance with the KIFRS standards.
64
SAMSUNG ENGINEERING
SUSTAINABILITY REPORT
61
ENVIRONMENTAL DATA
Consumption & Emissions
Health & Safety
2010
2011
Consumption of energy (Unit: GJ)
382,435
1,030,151
Direct energy consumption
322,323
931,790
59,116
92,314
- Gasoline
- Diesel
Total time of exposure to work (Unit: MH)
Industrial accident rate: domestic-converted industrial accident rate* (Unit: %)
Industrial accident rate: overseas-LTIR**
0.0070
0
- Africa
0
0
- America
0
0
- Asia
- Heavy oil
15
1,185
- LNG
26,495
39,081
- LPG
1,118
2,133
60,112
98,361
Consumption of water (Unit: Ton)
438,265
711,290
- Tap water
378,097
396,250
12,788
192,725
4,500
23,413
- Recycled water
42,880
98,902
Greenhouse gas emissions* (Unit: tCO2e)
31,199
80,713
Direct emissions (Scope 1)
23,342
67,824
7,857
12,889
1,742,941
1,894,948
62,974
198,480
Indirect emissions (Scope 2)
Other emissions (Scope 3)
- Subcontractors (Construction equipments)
- Environmental facilities**
1,679,967
1,696,468
Amount of waste produced (Unit: Ton)
274,490
482,219
- Construction waste
232,213
475,244
- Industrial waste
30,071
3,430
- Specified waste
12,206
3,545
Amount of waste treated (Unit: Ton)
274,490
482,219
- Burned
172,416
318,322
- Landfilled
42,720
52,241
- Recycled
59,354
111,654
0
2
- Discharged to the sea
0.18
0.0045
0
3,792
- Surface water
0.12
0.0034
0.0139
793,285
16,690
- Underground water
2011
132,163,393
- Middle East
218,889
- Kerosene
Indirect energy consumption
2010
58,797,318
* Converted industrial accident rate (%) = Number of converted industrial accident victims / number of regular workers X 100
Number of converted accident victims: weighted by the deaths (10 times that of those who were injured in industrial accidents)
Number of regular workers: (Annual sales value for domestic construction projects X Labor cost rate) / (Average monthly salary of the construction industry X 12)
** LTIR (Lost Time Incident Rate) = (Fatality + Lost Workday Case) / Manhour X 200,000
HSE Communication & Investment
2010
Value of spending on the environment (Unit: KRW million)
2011
6,287
9,111
- Spending on the environment*
3,487
6,511
- Investment in the environment**
2,800
2,600
Number of participants in education about the environment (Unit: People)
Number of participants in education about safety (Unit: People)
7,616
60,555
676,153
1,196,727
* Spending on the environment: money spent on the efforts to protect the environment, treat waste and purchase environmentally-friendly products
** Investment in the environment: money spent on research and development for environmentally-friendly purposes
* The greenhouse gas emissions are a total amount including Scope 1 and Scope 2.
** Environmental facilities include sewage and waste water treatment plant and waste incineration plant.
62
Performance
Summary
SAMSUNG ENGINEERING
SUSTAINABILITY REPORT
63
Social Data
Workforce Status
Total number of employees* (Unit: People)
Ethics & Compliance Training
2010
2011
5,882
7,620
5,054
6,532
828
1,088
Gender
- Male
- Female
- Corruption prevention
Region of birth
- Korea
6,184
- Asia Pacific (excl. Korea)
888
1,175
- Americas
109
172
- Middle East Asia
11
44
- Europe
23
24
- Africa
20
21
- Permanent
3,791
4,645
- Fixed-term
1,224
1,762
867
1,213
18
17
Employment status
Percentage of locally-hired managers (Unit: %)
* The total number of employees refers to all employees in the headquarters and overseas offices as of December of each year.
Training & Career Development
2010
2011
Total training hours (Unit: Hours)
800,265
927,770
- Value
154,722
291,852
- Job
393,617
312,459
89,101
53,241
162,825
270,218
Average training hours per employees* (Unit: Hours)
151
135
Training expense per employee* (Unit: KRW in ten thousands)
169
197
Percentage of annual performance assessment (Unit: %)
100
100
- Leadership
- Global business
* The average training hours and training expense per employee are based on the average annual training time in the headquarters in Korea, excluding data from overseas offices.
Employee Welfare
2010
2011
4,740
6,201
4,740
1,828
-
4,373
4,458
4,518
4,458
1,475
- Compliance
Number of participants in offline training about ethics and compliance (Unit: People)
- Corruption prevention
4,831
- Overseas offices
Hours of training about ethics and compliance (Unit: Hours)
- Compliance
Number of participants in online training about ethics and compliance (Unit: People)
- Corruption prevention
- Compliance
-
3,043
3,518
8,412
-
4,045
3,518
4,367
Social Contribution
2010
2011
Total value of spending on social contributions (Unit: KRW million)
4,531
5,551
Donations
4,155
4,688
65
1,822
- Medical Institutions
1,501
1,390
- Culture
- Educational Institutions
2,000
780
- Environmental Institutions
185
282
- Social welfare
120
151
- Others
284
263
Direct public services
303
753
0
150
- 'Kumpooh'
100
430
- Assistance for Rural Areas
122
150
81
23
- Libraries
- Others
Fund-raising by employees
Total hours spent on participating in voluntary services (Unit: Hours)
Average hours spent per person on participating in voluntary services* (Unit: Hours)
73
110
60,382
82,887
11.4
12.1
* The average hours spent per person on participating in voluntary services is based on the average number of employees in the headquarters in Korea, with our overseas offices excluded.
Supply Chain
2010
2011
Ratio of entry-level employees' wages to the official minimum wage* (Unit: %)
191.8
191.7
Wage tables for men and women
Same
Same
Turnover rate** (Unit: %)
1.84
2.35
2010
2011
Number of partners we helped to obtain ISO certification (Unit: Companies)
-
28
Volume of the win-win fund (Unit: KRW million)
-
106
32
23
Percentage of SEGA order value (Unit: %)
* The ratio of entry-level employees' wages to the official minimum wage is based on the data from the headquarters in Korea. Our overseas offices pay more than what is required by local laws.
** Turnover rate is based on the annual average number of full-time employees in headquarters.
64
Performance
Summary
SAMSUNG ENGINEERING
SUSTAINABILITY REPORT
65
GRI Table
● Reported
Indicator
Description
1. Strategy and Analysis
1.1
Statement from most senior decision-maker in organization
1.2
Description of key impacts, risks, and opportunities
2. Organizational Profile
2.1
Name of organization
2.2
Primary brands, products, and/or services
2.3
Operational structure
2.4
Location of organization's headquarters
2.5
Location of overseas branch offices and sites
2.6
Nature of ownership and legal form
2.7
Markets served
2.8
Scale of the reporting organization
2.9
Significant changes during reporting period regarding size, structure, or ownership
2.10
Awards received in reporting period
3. Report Parameters
3.1
Reporting period
Page
2-3
2-3, 12-13
Inside the
cover
74
72-73
Inside the
cover, 72-73
72-73, 74
Inside the
cover, 72-73
61, 74
75
1
3.2
Date of most recent previous report (if any)
-
3.3
Reporting cycle (annual, biennial, etc.)
1
3.4
Contact point for questions regarding the report or its contents
3.5
Process for defining report content
3.6
Boundaries of report
1
3.7
1
3.11
State any specific limitations on the scope or boundary of report
Basis for reporting on comparability from period to period and/or between
organizations
Data measurement techniques and bases of calculations for data, including
performance index
Explanation of the effects of & reasons for any re-statements of information
provided in earlier reports
Significant changes from previous reporting periods applied in the report
3.12
Table identifying the location of the Standard Disclosures in the report
3.13
Policy and current practices with regard to seeking external assurances for the report
3.8
3.9
3.10
4. Governance, Commitments, and Engagement
4.1
Governance of organization
Back Cover
6-9
1
66-69
1, 76-79
4-5
4.2
Indicate whether the Chair of the highest governance body is also an executive officer
4-5
4.3
4-5
4.5
Number of members of highest governance body that are independent and/or non-executive members
Mechanisms for shareholders and employees to provide recommendations or directions to highest
governance body
Compensation for members of highest governance body, senior managers, and executives
4.6
Processes in place for highest governance body to ensure conflicts of interest are avoided
4-5
4.7
Process for determining the qualifications and expertise of the members of the highest governance body
4-5
4.8
4-5
4.10
Internally developed statements of mission or values, codes of conduct, and principles
Procedures of highest governance body for management of economic,
environmental, and social performances
Processes for evaluating highest governance body's own performance
4.11
Whether and how the precautionary approach or principle is addressed by the organization
2-3
4.12
Externally developed economic, environmental, and social charters, principles, or other initiatives
75
4.4
4.9
4-5
4-5
4-5
4-5
4.13
Membership in associations and/or national/international advocacy organizations
75
4.14
List of stakeholder groups engaged by the organization
6-9
4.15
Bases for identification and selection of stakeholders with whom to engage
6-9
4.16
4.17
Approaches to stakeholder engagement, including frequency of engagement by type and stakeholder group
Key topics and concerns raised through stakeholder engagement, and responses to them
6-9
6-9
66
Performance
Summary
◐ Partially Reported
Status
○Not Reported
Remarks
Samsung Engineering Co., Ltd.
Financial implications and other risks and opportunities for organization's activities due to climate change
EC3
Coverage of organization's defined benefit plan obligations
EC4
Significant financial assistance received from governments
Range of ratios of standard entry-level wages compared to local minimum wage at significant
locations of operation
Policy, practices, and proportion of spending on locally-based suppliers at significant locations of operation
EC6
EC7
EC8
EC9
No major change affecting decisions made by
stakeholders during the reporting period
2011. 01 ~ 2011. 12
●
Comment separately if special attention is needed
for a basis of measuring and calculating data
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
EC2
EC5
●
●
●
●
●
●
●
●
●
●
●
●
Description
Economic Performance Indicators
EC1
Direct economic value generated and distributed
●
●
●
●
●
●
●
●
●
●
●
●
Indicator
No previous publication
Every year
All domestic and overseas workplaces, with project
Environmental Performance Indicators
EN1 Materials used by weight or volume
EN2 Percentage of materials used that are recycled input materials
EN3 Direct energy consumption by primary energy source
EN4
Indirect energy consumption by primary source
EN5
EN7
Energy saved due to conservation and efficiency improvements
Initiatives to provide energy-efficient or renewable energy based products and services, and
reductions in energy requirements as a result of these initiatives or services more widely used
Initiatives to reduce indirect energy consumption and reductions achieved
EN8
Total water withdrawal by source
EN9
EN10
EN6
EN11
No previous publication
No previous publication
Process of hiring local workers preferably and percentages of locally-hired high-ranking managers
Development and impact of infrastructure investments and services provided primarily for public
benefit through commercial, in-kind, or pro bono engagement
Understanding and describing significant indirect economic impacts
EN12
EN13
EN14
EN15
Page
Status
61
-
●
●
●
○
64
◐
52
●
●
●
●
21, 33
42
51, 64
53-57
16-21
31
32, 62
○
Remarks
Not Reported
Not Reported
◐
●
32, 62
◐
-
○
31
◐
Not Reported
-
○
32, 62
◐
Water sources significantly affected by withdrawal of water
30
No water sources that are significantly
affected are found
Percentage and total volume of water recycled and reused
Location and size of land owned, leased, managed in, or adjacent to protected areas and areas of
high biodiversity managed by us
62
●
●
-
○
Not Reported
Description of significant impacts of activities, products, and services on biodiversity biological diversity
34
◐
34
◐
34
●
-
○
Habitats protected or restored
Strategies, current actions, and future plans for managing impacts on biodiversity
Number of IUCN Red List species and national conservation list species with habitats in areas
affected by operations, by level of extinction risk and the government and living in the areas
affected by our business activities
-
●
●
●
○
18
◐
EN16
Total direct and indirect greenhouse gas emissions by weight
32-33, 62
EN17
Other relevant indirect greenhouse gas emissions by weight
33, 62
EN18
Initiatives to reduce greenhouse gas emissions and reductions achieved
21, 33
EN19
Emissions of ozone-depleting substances by weight
EN20
NOx, SOx, and other significant air emissions by type and weight
Not Reported
Not Reported
Not Reported
Practices of managing air pollutants are
partially reported
EN21
Total water discharge by quality and destination
34
◐
EN22
Total weight of waste by type and disposal method
62
◐
EN23
Total number and volume of significant spills
-
●
Prevented any major leaks from occurring
by using toxic substance management
guidelines for each project and no significant
accident was occurred in 2011
EN24
Weight of transported, imported, exported, or treated wastes deemed hazardous under the terms
of the Basel Convention Annex I, II, III, and VIII Annex of Basel Convention
-
●
No case of transportation, import and export,
treatment of wastes specified in provisions
I,II,III,IV of the Annex of Basel Convention has
occurred
EN25
Name of water bodies significantly affected by the reporting organization's discharges of water
and runoff protection states, protection levels and biological diversity value of related habitats
-
○
Not Reported
Initiatives to mitigate environmental impacts of products and services, and extent of impact mitigation
20-21,
30-31
●
EN26
SAMSUNG ENGINEERING
SUSTAINABILITY REPORT
67
Indicator
Description
EN27
Percentage of products sold and their packaging materials that are reclaimed by category
EN28
Monetary value of significant fines and total number of non-monetary sanctions for noncompliance with
environmental laws and regulations
EN29
EN30
Significant environmental impacts of transporting products and other goods and materials used for the
organization's operations and transporting members of the workforce
Total environmental protection expenditures and investments by type
Labor Practices and Decent Work Performance Indicators
LA1
Total workforce by employment type, employment contract, and region
Page
Status
-
●
No packages were used.
-
●
No case of violation other than a fine for
environmental damage has occurred during
the reporting period. There was one case of
an imposed fine.
30
◐
32, 62
●
64
LA2
Total number and rate of employee turnover by age group, gender, and region
LA3
Benefits provided to full-time employees that are not provided to temporary or part-time employees
42
●
●
●
LA4
Percentage of employees covered by collective bargaining agreements
44
◐
LA5
Minimum notice period(s) regarding significant operational changes
44
◐
-
◐
36, 63
●
37
●
-
◐
40, 64
LA6
LA7
LA8
Percentage of total workforce represented in formal joint management-worker health and safety
committees
Rates of injury, occupational diseases, lost days, and absenteeism, and number of work-related fatalities
Education, training, prevention, and risk-control programs to assist workforce members, their families, or
community members family members and local residents deal with serious diseases
42, 64
Remarks
Actions taken in response to incidents of corruption
-
SO5
Public policy positions and participation in public policy development and lobbying
-
●
SO6
Total value of financial and in-kind contributions to political parties, politicians, and related institutions,
by country
-
●
Collect requests and opinions of employees
through the Industrial Relations Council.
The notification is done via official channels, such
as the Industrial Relations Council.
The Health and Safety Committee is run for each
project.
SO7
Total number of legal actions for anti-competitive behavior and monopoly practices, and outcomes
-
●
No cases. There have been no legal actions
in connection with unfair competition and
monopoly behavior.
SO8
Monetary value of significant fines, and total number of non-monetary sanctions for non-compliance
with laws and regulations
-
○
Not Reported
SO9
Operations with significant potential or actual negative impacts on local communities
-
◐
This is checked through the environmental
impact evaluation at the beginning of project
execution. No workplaces have been found
to have a seriously negative impact on local
communities
There is no trade union. Health and safety issues
are discussed through the HSE Department.
SO10
Prevention and mitigation measures implemented in operations with significant potential or actual
negative impacts on local communities
-
○
Not Reported
35
◐
Safety elements are checked through the
pre-evaluation of hazards during the project
execution.
-
○
-
○
Percentage of employees receiving regular performance and career development reviews
Composition of governance bodies and breakdown of employees per category by indicators of diversity
LA14
Ratio of basic salary of men to women by employee category
64
LA15
Return to work and retention rates after parental leave
42
●
100%
●
0%. We do not have an official process to check
about human rights protection when we
determine whether to make an investment in our
subsidiaries and joint ventures
Not Reported
100%
Not Reported
-
○
●
○
-
○
Not Reported
45
HR6
HR7
Operations identified as having significant risk for incidents of forced labor, and measures taken
45
●
●
HR8
Percentage of security personnel trained in the organization's policies or procedures concerning human
rights relevant to operations
-
◐
HR9
Total number of incidents of violations involving rights of indigenous peoples, and actions taken
52
◐
HR10
Percentage and total number of operations that have been subject to human rights reviews and/or impact
assessments
8-9
◐
HR11
Number of complaints related human rights that are filed, dealt with, and resolved through the official
complaint registration channel
45
◐
HR4
HR5
68
Performance
Summary
PR1
Not applicable due to the nature of our
business
Not applicable due to the nature of our
business
Not applicable due to the nature of our
business
-
○
PR5
15
●
PR6
Programs for adherence to laws, standards, and voluntary codes related to marketing communications
-
●
Product marketing communication complying
with marketing-related laws and targeting
people randomly is not conducted.
-
●
0 Case
-
●
0 Case
-
●
0 Case
PR3
PR7
Not Reported
Life cycle stages in which health and safety impacts of products and services are assessed, and
percentage of significant products and services subject to such procedures
Total number of incidents of non-compliance with regulations and voluntary codes concerning health
and safety impacts of products and services during their life cycle, by type of outcomes
Type of product and service information required by procedures, and percentage of products and
services subject to such information requirements
Total number of incidents of non-compliance with regulations and voluntary codes concerning
product and service information and labeling
Practices related to customer satisfaction, including results of surveys measuring customer satisfaction
PR4
-
Not Reported
The Code of Ethics stipulates that the company
is prevented from participating in politics.
The Code of Ethics stipulates that the company
is prevented from participating in politics.
Product Responsibility Performance Indicators
PR2
Human Rights Performance Indicators
45
This can be checked through the initial
environmental impact evaluation beginning of
project execution.
SO4
LA13
Percentage of significant suppliers and contractors that have undergone screening on human rights
Total hours of employee training on policies and procedures concerning aspects of human rights that are
relevant to operations, including percentage of employees trained
Total number of incidents of discrimination, and actions taken
Operations identified in which the right to exercise freedom of association and collective bargaining may
be at significant risk
Operations identified as having significant risk for incidents of child labor, and measures taken
◐
◐
LA12
HR3
16-19, 52
●
○
Programs for skills management and lifelong learning for continued employability and managing career endings
-
Percentage of operations with implemented local community engagement, impact assessments, and
development programs
27
LA11
HR2
SO1
27
●
○
●
●
●
Percentage and total number of significant investment agreements that include human rights clauses or
that have undergone human rights screening
Remarks
Percentage and total number of business units analyzed for risks related to corruption
Average hours of training per year per employee
HR1
Status
Percentage of employees trained in organization's anti-corruption policies and procedures
LA10
-
Page
SO2
Health and safety topics covered in formal agreements with labor unions
4, 64
Description
Society Performance Indicators
SO3
LA9
-
Indicator
PR8
PR9
Total number of incidents of non-compliance with regulations and voluntary codes concerning
marketing communications
Total number of substantiated complaints regarding breaches of customer privacy and losses of
customer data
Monetary value of significant fines for noncompliance with laws and regulations concerning provision
of products and services
Partners are responsible for facility security and
security managers are trained about human
rights and ethics in accordance with internal
ethics regulations.
In 2011, the working environment and possible
discrimination elements were evaluated with
stakeholders involved.
SAMSUNG ENGINEERING
SUSTAINABILITY REPORT
69
GRI Statement
Samsung Engineering
Sustainability Report
Appendix
Our sustainability report meets all requirements of Level B+ at the level of reporting indicators in the GRI G3.1 guidelines. Also, a third-party verifier and the
application level checking of GRI have confirmed that this report is appropriate for B+ in the application levels of the G3.1 guidelines.
70
Performance
Summary
Corporate Profile
UK
Establishment Date
Capital Stock KRW 200 billion
1970. 01. 20
President &
CEO
Ki-Seok Park
Employees
7,620 (as of the end of 2011)
Contact
Tel: 02-2053-3000
Fax: 02-2053-3339
Address
500 Samsung GEC, Sangil-dong,
Gangdong-gu, Seoul, Korea
Total Assets
Revenue
Operating
Profit
Hungary
Italy
KRW 5.19 trillion (as of the end of
2011, based on KIFRS)
KRW 9.3 trillion (as of the end of
2011, based on KIFRS)
KRW 717 billion (as of the end of
2011, based on the KIFRS)
Head Office
(Seoul, Korea)
Uzbekistan
Japan
Algeria
India
USA
China
Saudi Arabia
UAE
Vietnam
Mexico
Thailand
Venezuela
Trinidad & Tobago
Malaysia
Singapore
Indonesia
Brazil
Global Network
Americas
Americas
Europe
Middle East / Africa
Asia
Grupo Samsung Ingenieria Mexico, S.A. De C.V.
Sevilla #40 Piso 9 col. Juarez, Delegacion Cuauhtemoc C.P. 06600 Mexico City
Tel 52-55-5207-6823
Fax 52-55-5080-7721
Samsung Engineering America INC.
2103 Citywest Blvd., 18th floor, #101 Houston TX 77042, USA
Tel 1-281-360-2058
Fax 1-281-360-2195
Samsung Engineering Co., Ltd. Venezuela office
Oficina 10-B-3, Piso 10, Torre La Noria, Paseo Enrique Eraso, Urb. Las
Mercedes, Sector San Roman, Caracas, Venezuela
Tel 58-212-992-2831/3031
Fax 58-212-992-3639
Samsung Engineering Trinidad Co., Ltd.
T&T Chamber of Industry & Commerce Bldg. 1st Floor Westmoorings Trinidad
West Indies Port of Spain Trinidad & Tobago
Tel 51-868-637-5403
Fax 1-868-632-6104
Samsung Engineering America do Sul Projeto e Consultoria Ltda
20090-003 Av. Rio Branco 1, 16 andar, Sala 1610 Centro, Rio de Janeiro, RJ, Brasil
Tel 55-21-3613-3100
Fax 55-21-3613-3111
72
APPENDIX
Europe
Samsung Engineering Milan Office
Via Brescia 28, Palazzo D, Scala 3, 20063 Cernusco Sul
Naviglio, Milano, Italy
Tel 39-02-3672-2050
Fax 39-02-3672-2074
Samsung Engineering Magyarorszag KFT.
1123 Alkotas u.53. Budapest Hungary
Tel 36-1-319-2694
Fax 36-1-319-2641
Samsung Engineering CO., Ltd. UK Office
16th Fl., City Tower, 40 Basinghall St. London EC2V 5DE UK
Tel 44-20-7382-1643
Fax 44-20-7382-1649
Middle East / Africa
Samsung Saudi Arabia Co., Ltd. & Samsung EPC
Co., Ltd.
P.O.BOX 35816, Samsung Naffora Techno Valley, Jubail
31961, Kingdom of Saudi Arabia
Tel 966-3-356-5900
Fax 966-3-356-5929
Samsung Engineering Abu Dhabi Office
P.O. Box 73410, 31st Floor, Etihad Tower 3, Baynunah Street,
Al Bateen, Abu Dhabi, UAE
Tel 971- 2-676-2323
Fax 971- 2-676-2772
Samsung Engineering Algeria (Branch Office)
16035 01 Rue Des Cretes- Hydra, Alger, Algerie
Tel 213-21-48-4620
Fax 213-21-48-4622
Asia
Samsung Engineering Tashkent Office
100084, International Business Centre, Block A, 8th Floor, 107B,
Amir Temur Street, Tashkent, Uzbekistan
Tel 998-71-238-5830~2
Fax 998-71-238-5837
Samsung Engineering Co., Ltd. Tokyo Office
Roppongi T-cube 17F, 3-1-1, Roppongi, Minato-ku, Tokyo,
106-8532, Japan
Tel 81-3-6234-2184
Fax 81-3-6234-2183
Samsung Engineering Malaysia Sdn., Bhd.
Suite 14.06, 14th Fl, Kenanga international, Jalan Sultan Ismail
50250 Kuala Lumpur, Malaysia
Tel 603-2162-0714
Fax 603-2162-0907
Samsung Engineering Construction (Shanghai) Co., Ltd.
15F, Onelujiazui No. 68 Yin Cheng Road Shanghai 200120, PRC
Tel 86-21-5010-6886
Fax 86-21-5010-6887
Samsung Engineering India Private Ltd.
201301 A1, Windsor IT Park, Tower A, Level-5, Sector-125,
Noida, U.P. India
Tel 91-120-406-0700
Fax 91-120-406-0750
Samsung Thai Engineering Co., Ltd.
98 Sathom Square Office Tower, Unit 1~6, 14th Floor, and
15th Floor, North Sathom Rd, Silom, Bangrak, Bangkok 10500,
Thailand
Tel 66-2-232-7500
Fax 66-2-232-7525
Samsung Engineering Vietnam Representative Office
Unit 1909, 19th Floor, Keangnam Hanoi Landmark Tower 72
Building, Plot E6, Giay Giay New Urban Area, Me Tri Commune,
Tu Liem District, Hanoi, Vietnam
Tel 84-4-3934-7992
Fax 84-4-3934-7994
Samsung Engineering Co., Ltd. Singapore
Representative Office
049483 3 Church Street, 12-01 Samsung HUB Building,
Singapore
Tel 65-6222-0841
Fax 65-6222-6735
BUT. Samsung Engineering Indonesia
135-856 Bapindo Plaza, 16th floor of Mandiri Tower Jl.Jend
Sudirman Kav.54~55, Jakarta Indonesia
Tel 62-21-2995-0112
Fax 62-21-2995-0109
SAMSUNG ENGINEERING
SUSTAINABILITY REPORT
73
Corporate Profile
Organizational Chart
List of Awards (Overseas)
CEO
President of
Corporate Planning
Global Environment
Research Center
Audit Department
HSE Department
Marketing Unit
Energy Business
Hydrocarbon Business
Upstream Project
Management Division
Gas Project
Management Division
Refinery Project
Management Division
Power Business
Outsourcing
Management Unit
Business Support
Division
Financial Support
Division
Petrochemical Project
Management Division
Steel & Metals Plant Project
Management Division
Energy Engineering
Technology Division
Year
2011
MEED 2011 Top EPC Contractor (Ranked 2nd)
Ranked by MEED, a professional magazine on the Middle East economy. Received new orders in the oil and gas sectors
Overseas
2011
ENR Top International Contractor
(Overseas – Ranked 34th)
Ranked by ENR, a professional magazine on the US construction business, based on overseas sales
Overseas
2011
ENR Top International Contractor
(Global – Ranked 55th)
Ranked by ENR, a professional magazine on the US construction business, based on domestic/overseas sales
Overseas
2011
PMI Distinguished Project Award
(Thailand GSP-6)
Granted by PMI, the world’s leading not-for-profit membership association for the project management profession.
Competencies for performing individual projects are evaluated and awards are given on a project-by-project basis
Overseas
2010
Oil & Gas Middle East Annual Ranking (2nd)
Ranked by Oil & Gas, a professional magazine on the petrochemical business in the Middle East. Received new orders in
the oil and gas sectors
Overseas
2010
ENR Top International Contractor
(Overseas – Ranked 35th)
Ranked by ENR, a professional magazine on the US construction business, based on overseas sales
Overseas
2010
ENR Top International Contractor
(Global – Ranked 69th)
Ranked by ENR, a professional magazine on the US construction business, based on domestic/overseas sales.
Overseas
2010
Institutional Investor (Best IR – Ranked 1st)
Ranked by Institutional Investor, a professional magazine for stock investors, based on a survey of 800 investors and analysts
Overseas
2010
Forbes Asia’s 50 Fabulous Companies
Ranked by Forbes Asia based on sales, operating profit, and market capitalization for the past five years
Category
Year
Domestic
2011
Domestic
2011
Domestic
2011
Domestic
Hydrocarbon Engineering
Technology Division
Awards
Description
List of Awards (Domestic)
Corporate Strategy &
Planning Division
Domestic Project
Management Division
Category
Overseas
Industrial & Infrastructure
Engineering Technology
Division
Ownership Structure
2010
Domestic
2010
Domestic
2010
Domestic
2009
Domestic
2009
Awards
Description
Hankyung Daily’s Super Companies in Korea
(Ranked 31st)
Fortune Korea’s 500 Top Companies
(Ranked 88th)
Fortune Korea’s Fastest Growing Companies
Hankyung Daily’s Super Companies in Korea
(Ranked 37th)
Fortune Korea’s 500 Top Companies
(Ranked 93rd)
Fortune Korea’s Fastest Growing Companies
Hankyung Daily’s Super Companies in Korea
(Ranked 51st)
Fortune Korea’s 500 Top Companies
(Ranked 117th)
Ranked by Hankyung Daily based on a combination of market capitalization, sales and net income
Ranked by Fortune Korea based on the sales of the previous year
A total of 11 companies were on the list
Ranked by Hankyung Daily based on a combination of market capitalization, sales and net income
Ranked by Fortune Korea based on sales of the previous year
Fortune Korea’s Fastest Growing Companies
Ranked by Hankyung Daily based on a combination of market capitalization, sales and net income
Ranked by Fortune Korea based on sales of the previous year
Member of Associations*
13.1%
63.6%
Total Shares Issued
40 million
9.6%
5.1%
4.4%
4.2%
Shareholders
Number of Shares Held
Equity Ratio
Cheil Industries Inc.
5,238,299
13.1%
National Pension Service of Korea
3,846,299
9.6%
Samsung SDI Co., Ltd.
JF Asset Management Limited
2,036,966
1,748,374
Construction Outsourcing Association
Korea Construction Engineers Association
Korea Carbon Capture and Storage Association
International Water Association(IWA)
Korea Economic Research Institute
Korea Electrical Contractors Association
5.1%
Seoul Chapter, The Construction Association of Korea
Korea Professional Engineers Association
Korea Electric Engineers Association
4.4%
Seoul Chamber of Commerce
Korea Management Association
Korea Information Communication Contractors Association
A Chapter of Korea Institute of Registered Architects
The Korea International Trade Association
The Korea Railway Association
Korea Investment Trust Asset Management
1,667,782
4.2%
Others
25,462,280
63.6%
The Federation of Korean Industries
Korea Industrial Technology Association
Korea Plant Industries Association
Total
40,000,000
100%
The American Chamber of Commerce in Korea
Korea Fire Facility Association
Korea Plant Engineering Association
The European Union Chamber of Commerce in Korea
Korean Society of Fire Protection Professional Engineers
Korea Institute of Plant Engineering & Construction
Korea Business Council for Sustainability Development (KBCSD)
Fire Safety Association
International Contractors Association of Korea
The Construction Management Association of Korea
Korea Engineering & Consulting Association
Korea Green Foundation
● Cheil Industries ● National Pension Service ● Samsung SDI
● JF Asset ● Korea Investment Trust ● Others
* The principles regarding corporate social responsibility or support for external initiatives are under internal consideration.
74
APPENDIX
SAMSUNG ENGINEERING
SUSTAINABILITY REPORT
75
Independent Assurance Statement
Scope and objectives
Two Tomorrows (Asia) Limited has undertaken independent assurance of
Samsung Engineering’s 2011 Sustainability Report.
engagement with stakeholders other than staff.
• Assessment of information provided to us by Samsung Engineering on its
reporting and management processes relating to the Principles.
The assurance process was conducted in accordance with AA1000AS (2008).
• Assessment of supporting evidence for key claims in the Report.
We were engaged to provide moderate level, Type 1 assurance, which includes
• Review and feedback on drafts of the Report and the Global Reporting
evaluation of adherence to the AA1000APS (2008) principles of inclusivity,
Initiative (GRI) index in the report.
materiality and responsiveness (the Principles).
We undertook no checking of sustainability performance data and
consequently offer no assurance over performance data or associated claims
included in the Report.
Responsibilities of the directors of Samsung Engineering and
of the assurance providers
The directors of Samsung Engineering have sole responsibility for the
preparation of the Report. In performing our assurance work, our responsibility
is to the management of Samsung Engineering. However our statement
represents our independent opinion and is intended to inform all of Samsung
Engineering’s stakeholders. We adopt a balanced approach towards all of
Samsung Engineering’s stakeholders.
We have no other contract with Samsung Engineering and this is the first year
that we have provided independent assurance. We were not involved in the
preparation of any part of the Report. However, having reviewed and provided
feedback on drafts of the Report, in a number of instances changes were made
to the final version. Our team comprised MinGu Jun, project leader, and InMog
Yang. This assurance statement was prepared by the team in English, and
reviewed and signed off by Jon Woodhead, Sustainability Services Director, Two
Tomorrows. Further information, including individual competencies relating to
the team can be found at: www.twotomorrows.com.
Basis of our opinion
We undertook the following activities:
• Review of Samsung Engineering’s process for identifying and evaluating
material issues.
Findings
documented process for stakeholder identification and participation should
gas reduction plant project. We recommend that future reports should
be established to ensure that the current approach is ongoing and not ‘one
include additional information on the company’s projects in this area, such
off’.
as enhancing relevant R&D, employee development and marketing capacity
• Samsung Engineering demonstrates a high level of understanding and
response to overseas client’s needs, including the example of improving its
• Establishing the ‘Green Management System’, that integrates the energy,
customer) system. In addition to clients, further improvement can be made by
greenhouse gas and other environmental aspects of ISO 26000, is a
expanding approaches such as use of regional experts and market intelligence
commendable approach. We recommend that Samsung Engineering should
to cover potential CR risks relating to global project sites, suppliers and local
ensure that the system is embedded within each functional division and
We reviewed and provided feedback on drafts of the Report and where
communities. We also recommend that Samsung Engineering should ensure
necessary changes were made. On the basis of the work undertaken, nothing
more systematic and integrated management of environmental and social
came to our attention to suggest that the Report does not properly describe
• Samsung Engineering also utilises an ERS (Environmental Rating System) to
issues through continuous collection and analysis of related information
Samsung Engineering’s adherence to the Principles of the AA1000APS.
identify further performance improvement opportunities. In the future we
through regional hubs.
recommend that the company should ensure that the results of the ERS are
• Samsung Engineering’s approach and reporting emphasises eco-efficiency
• In many developing country projects, establishing joint ventures with local
Without affecting our assurance opinion we also provide the following
stakeholders and relevant communication channels should be taken
partners is required by local law. We recommend that Samsung Engineering
observations.
into consideration at every step of the business including engineering,
should report on the current status of JVs in relevant developing countries,
procurement, construction and operations during the development of
and efforts to establish a formal system for screening partner companies’
stakeholder participation processes.
capacity for managing social and environmental risks will be needed.
In this first sustainability report, Samsung Engineering established three
‘directions’ and six ‘areas for CSR implementation’ and linked them with the
corporate vision of ‘Creative Engineering Solution Provider’. This is a good
Material issues are those which are necessary for stakeholders to make
starting point for integrating the CSR framework with efforts to achieve the
informed judgments concerning Samsung Engineering and its impacts.
vision. In the future, integration between the corporate vision and strategy
• B ased on the work undertaken, we are not aware of any issues that are of high
Engineering should establish a systematic incident management plan
and the CSR framework will be increased through regular review of the CSR
materiality for its operations that Samsung Engineering has not recognised
that prioritises and implements a communication strategy for relevant
directions and areas, to ensure these reflect new material issues, and to exploit
within its report. However, we recommend that future materiality assessment
stakeholders.
further linkages with the corporate vision.
should exclude those issues that many stakeholders consider as standard
Over time, the current governance structure for CSR, where main issues are
business management activities, such as ‘Project Quality’, ‘Risk management’,
managed by the CSR team, should be improved by appointing a responsible
‘Providing base for continual growth’, unless these can be clearly linked with
Director and establishing a committee under the Board of Directors to oversee
CSR implementation areas and goals.
progress and to provide authority for action. These developments should
• The process for assessing the business impact of sustainability issues
also be used to support enhancements in the management and capacity of
should reflect legal, project quality and environmental risk factors. We
relevant functional divisions.
also recommend that Samsung Engineering should ensure consistent
The Report includes a series of CSR goals in the ‘Commitment to Sustainability’
implementation of the materiality assessment process by establishing a formal
section. Samsung Engineering should ensure that these goals are clearly linked
process for top management review and approval of material assessment
with material issues identified through stakeholder engagement and the
processes and results.
• We also recommend that Samsung Engineering should introduce a
improve the goals to include more specific, measurable, achievable, relevant
stakeholder review committee for review and moderation of the materiality
SRI (Socially Responsible Investment) analyst and our Tomorrow’s Value Rating
and time bound targets.
assessment process, to ensure this reflects the full range of stakeholders’
to compare the issues identified through the Samsung Engineering materiality
We have confirmed that the GRI indicators referenced in the GRI index pages
process.
are reported either partially or fully. In our opinion the Report meets the criteria
Responsiveness concerns the extent to which an organisation responds to
within the GRI G3 guidelines to an application level of B+.
stakeholder issues.
responsible for managing non-financial issues, based at the Seoul
Inclusivity concerns the participation of stakeholders in developing and
headquarters. Interviewees were suggested by Samsung Engineering and
• The results of the company’s stakeholder survey revealed that ‘implementation
achieving an accountable and strategic response to sustainability.
of environmental-friendly projects’ is seen by the majority of stakeholders as
• Samsung Engineering categorises its stakeholders as ‘Business Stakeholders’
the most important issue among the environmental section. As the materiality
• Review of Samsung Engineering’s approach to stakeholder engagement
and ‘Non-Business Stakeholders’, in line with the AA1000 Stakeholder
analysis assigned relatively low significance to this topic, based on its current
and the outputs of recent stakeholder engagement. We had no direct
Engagement Standard. Whilst this approach is seen as a good basis, a formal
business impact, the Report includes only one case study on the greenhouse
APPENDIX
more directly reflected in the performance evaluation of the project teams.
in the whole life cycle of the business. To ensure continuous improvement,
materiality assessment process. We also recommend that Samsung Engineering
76
project teams.
Observations
performance standards of International Finance Corporation, ESG report of an
agreed with Two Tomorrows.
long term.
EHS performance and providing feedback to clients through VOC (Voice of
• Brief materiality assessment based on internet research, peer reports,
• Interviews with four executive management team members and managers
building, and development of a strategy for creating related opportunity in the
opinions.
• Samsung Engineering is potentially exposed to risk through incidents within
international projects and local suppliers. We recommend that Samsung
Two Tomorrows (Asia) Limited
Seoul, Korea
15th May 2012
Jon Woodhead
MinGu Jun
InMog Yang
Project Director
Project Leader
Lead Associate
Two Tomorrows (Asia) Limited is part of DNV, a global provider of services for managing risk, helping
customers to safely and responsibly improve their business performance. www.twotomorrows.com
SAMSUNG ENGINEERING
SUSTAINABILITY REPORT
77
Review Opinion
GHG Assurance Statement
No.: AS_PRJC-378793-2012-CCS-KOR_E
I am very pleased to meet the Sustainability Report of Samsung Engineering,
My third point is about the meaning of sustainability reporting.
which is leading the industry through many successful projects both in Korea
It should be noted that sustainability reporting is not merely publishing
and abroad. After having reviewed this report, I would like to give you four
a report, but a part of continuous process of plan-do-check-act. In this
points as follows:
sense, the following report will need to demonstrate clearly how Samsung
The first point is about the role of the engineering industry in relation with
Engineering has incorporated what is measured, assessed, and promised in
sustainability management.
this report in the company’s business activities during the reporting period.
So far Samsung Engineering has endeavored to accommodate client’s
The fourth point is related to a way of building up trust in communicating
requirements fully and address quality challenges thoroughly by means of
sustainability.
Introduction
Verification Approach
Plant Satisfaction Index (PSI), which is introduced in this report. And it is very
Along with assurance, the third-party review has been used as a way of
DNV Certification, Ltd. (“DNV”) was commissioned by Samsung Engineering Co.,
The verification has been conducted by DNV from 23rd April through 18th May
Ltd. (“Samsung Engineering”) to verify the Samsung Engineering’s Greenhouse
2012 and performed in accordance with the verification principles and tasks
Gas Inventory Report for the calendar year 2010~2011 (“the report”) based
outlined in ISO 14064-3:2006. We planned and performed our work so as to
upon a limited level of assurance. Samsung Engineering is responsible for the
obtain all the information and explanations deemed necessary to provide us
preparation of the GHG emissions data on the basis set out within the WRI/
with sufficient evidence to provide a limited verification opinion concerning
WBCSD GHG protocol: 2004 and the principles set out in ISO 14064-1:2006.
the completeness of the emission inventory as well as the reported emission
Our responsibility in performing this work is to the management of Samsung
figures in ton CO2 equivalent. As part of the verification process:
Engineering only and in accordance with terms of reference agreed with them.
• We have reviewed and verified the Samsung Engineering’s Greenhouse gas
likely that Samsung Engineering’s key clients in the oil and gas, petrochemical,
power generation, and steel industry will include sustainability-related issues
in their project requirements. Sustainability activities by the International
Petroleum Industry Environmental Conservation Association (IPIECA), the
International Association of Oil & Gas Producers (OGP), and the World Steel
Association are such examples.
gaining stakeholder trust in a company’s sustainability report. However, above
all things, stakeholder trust relies on how consistently the company has put
its promise into action.
Samsung Engineering should review constantly whether its business activities
are proceeding towards the directions as promised in the disclosures on
management approach of this report (to cite a few, strengthening compliance
At the same time, the Royal Academy of Engineering has demanded that an
system; establishing an eco-friendly business management; creating a work
engineer should consider a way of contributing to sustainable development
environment balancing work and life; fair trade and mutually beneficial supply
in applying his/her engineering knowledge even when his/her client does
chain management; and contributing to the local community) and prove
not ask him/her to do so. Therefore I hope that Samsung Engineering will not
how it is materializing its promises in its activities to achieve performance as
only respond to client’s increasing demands for sustainable development
anticipated.
completely, but also be equipped with a capability of proposing a creative
sustainability solution that the client has not thought of yet, and thus
enhancing the level of sustainability management of both Samsung
Engineering and its client.
The second point is concerned with the linkage between corporate strategy
and sustainability management strategy.
However, it should be borne in mind that it is not a matter of verbal
expression simply to improve logical consistency when we assert that
• We have reviewed and verified the process to generate, aggregate and report
Scope of Assurance
the emissions data.
Conclusions
indirect emissions (Scope 3 emissions) :
As a result of the work described above, in our opinion nothing has come to
• R eporting period under verification : Calendar Year 2010~2011
our attention that would cause us to believe that the GHG emissions data set
•O
rganizational boundary for reporting : Samsung Engineering Co., Ltd.
out in Samsung Engineering’s report are not fairly stated. The GHG Emissions of
the reports to be published next year, the year following next year, and the
subsequent years that show consistent actions towards its promises are truly
the way to earn and accumulate trust.
Samsung Engineering for the year 2010~2011 were confirmed as below;
I am looking forward to seeing Samsung Engineering developing into a
a major step forward of the company’s strategy because it links Samsung
development.
• We have reviewed the GHG inventory Report dated on 23rd April 2012.
(Scope 1 emissions), Energy indirect emissions (Scope 2 emissions) and Other
through business and management innovation.
strong will to become a corporate citizen contributing to sustainable
Management System.
reporting, publishing this report may be the first step to stakeholder trust, but
well-being of humankind and the environment, presented in this report, is
Engineering has selected as one of its core values shows the company’s
investment or otherwise, based upon this assurance statement.
To link this point with the aforementioned meaning of sustainability
company obtaining stakeholder trust and leading sustainable development
with this common value. In particular, “Global Citizenship” that Samsung
DNV expressly disclaims any liability or responsibility for any decisions, whether
The emissions data covered by our examination comprise Direct emissions
I think that the vision of “Creative Engineering Solution Provider” for the
Engineering’s corporate strategy and sustainability management strategy
DNV ASSURANCE STATEMENT
Organizational
Boundaries
Buildings
May 2012
Director of Sustainability Management Research Center,
Kookmin Institute of Business Research
Han-Kyun Rho
Domestic
construction
sites
Overseas
construction
sites
Operation &
Maintenance
sites
Address / Remark
Year 2010
Year 2011
6 buildings
(including
headquarter)
9 buildings
(including
headquarter)
34 construction
sites in Korea
46 construction
sites in Korea
Overseas 14
construction sites
Overseas 17
construction sites
7 sites for Operation
& Maintenance
7 sites for Operation
& Maintenance
Verification activity
Greenhouse Gas Emissions of Samsung Engineering Co., Ltd. from Yr
Desk Review, Site
visit, Process & data
verification
Desk Review, Site
visit, Process & data
verification
Desk Review, Process
& data verification
2010~2011
Desk Review, Site
visit, Process & data
verification
(Unit: ton CO2-e)
Operational
Boundary
(Period)
Direct
emissions
(Scope 1)
Indirect
emission
(Scope 2)
Other indirect
emissions
(Scope 3)
Total
emissions
Year 2010
23,342
7,857
1,742,941
1,774,140
Year 2010
67,824
12,889
1,894,948
1,975,661
※ In order to report the GHG emissions as an integer, the rounded number on the statement
might be different from the number on the system with ± 1 tCO2.
※ Total emissions = Scope 1 + Scope 2 + Scope 3
sustainability management strategy should be linked to corporate strategy
18th May 2012
closely. Rather, it is a warning against a superficial approach that mechanically
adds a new societal demand of sustainability management without any
change in the existing management practices. Therefore, I hope that the
future strategy of Samsung Engineering will evolve into an integrated one,
which merges an aspect of sustainable development with the company’s
Tae-Ho Kim
In-Kyoon
Lead Verifier
Country Manager
DNV Certification, Ltd.
established tradition of uncompromising quality control of its projects and
performance.
78
APPENDIX
This Assurance Statement is valid as of the date of the issuance (18th May 2012). Please note that this Assurance statement would be revised if any material discrepancy which
may impact on the Greenhouse Gas Emissions of Samsung engineering Co., Ltd., is subsequently brought to our attention.
In the event of ambiguity or contradiction in this statement between English version and Korean version, Korean shall be given precedent.
SAMSUNG ENGINEERING
SUSTAINABILITY REPORT
79
Glossary
Terms
Description
AA1000AS
This is a principle regarding obligations to explain sustainability management, specified by the company. The international standard includes three
principles: inclusivity, materiality and responsiveness.
CCS (Carbon Capture and Storage)
This refers to all technologies that remove carbon dioxide from fossil fuels by capturing and storing the gas. This technology allows you to collect in high
density, take away and store carbon dioxide before it is emitted into the air. Research is under way to make this technology available as an alternative
technology for preventing global warming.
CDM (Clean Development Mechanism)
In this system, which is stipulated in Article 12 of the Kyoto Protocol, an advanced nation can be considered to have reduced greenhouse gases in its
region by investing in a developing nation to reduce greenhouse gas emissions in the region.
CDP (Carbon Disclosure Project)
This refers to a global project by international financial or investment organizations, to conduct a survey asking major businesses in each country what
strategies they have to respond to climate change and how much carbon they release into the air.
CO2 Recovery
This technology allows you to increase efficiency, reduce emissions of or reuse CO2 in processes to treat byproducts, such as methanol and urea, or
ancillary materials by recycling CO2 generated in consuming fuel in a petrochemical plant.
Engineering
This refers to collecting and integrating technologies from various fields and completing projects.
EPC
FEED (Front End Engineering Design)
Green House Gas
This indicates the entire engineering process from front end engineering, design, design basis to process the design package to completion of the basic
design package.
This refers to a gas causing a greenhouse effect. Greenhouse gases specified by the WRI/WBSCD are CO2, CH4, N2O, PFCs, HFCs and SF6.
GOSP (Gas Oil Separation Plant)
This indicates a plant that separates oil and gas before treating them. Oil and gas are mixed when they are extracted from oil wells and separated to be
made into products.
GRI (Global Reporting Initiative)
This is an independent international non-profit organization that created international standards for a sustainability report. This organization provides
standardized reporting indices for a sustainability report. The current version is G3.1. In accordance with the international trends towards integrated
reporting, the organization is developing G4, a new framework for a sustainability report, including existing financial reports and expected to announce it
in 2013.
ITB (Invitation to Bid)
This refers to the client demanding that contractors propose price, delivery date, and other options conditions in relation to the construction of a plant or
purchase of equipment.
LSTK (Lump Sum Turn Key)
This refers to a package deal, where a plant construction agreement is signed based on estimated construction volume and amount while design is
incomplete. The contractor provides all services, including financing, land purchase, design, construction and test operation, and delivers the facility to the
client in complete form.
Materiality Test
This refers to a technique of identifying opportunities and risks a company faces and determine which are more important than the others by considering
both stakeholders’ interests and business issues deducted from communication among stakeholders.
Offshore
In the dictionary, this means a part of sea, which is near the coast. This also indicates all facilities and activities for drilling oil and natural gas from the sea
and transporting them through pipes to the shores.
Para-Xylene
This refers to a colorless, transparent and volatile liquid smelling of aromatic odor, which is one of xylene isomers with two methyl groups attached to benzene.
Plant
80
This is a combination of the initials of engineering, procurement and construction and refers to the scope of work of an engineering project.
This refers to a combination of industrial facilities, machine, electricity, construction, communications and is used to indicate facilities and factories.
PQ (Pre-Qualification)
This refers to evaluating qualifications of bidders when the client requests that they submit a bidding or proposal.
Reverse Engineering
This refers to disassembling and examining, or analyzing a finished product in detail to discover its design or production process.
SR (Social Responsibility)
This refers to responsibilities that the government, companies, institutions and organizations should fulfill. For businesses, this may be called “corporate
sustainability”. Responsibilities are applied to various fields, such as human rights, the environment, labor practices and organizational governance and the
international standard for social responsibility (ISO 26000) came into effect in 2010.
Urea
This refers to organic compounds (CO(NH2)2) with crystalline materials and no color. They are final compounds in the protein metabolism of mammals
and certain fish (AA1000AS).
Upstream
This refers to a process from oil exploration, mining to the production of petrochemical products. On the contrary, the sales process, including marketing,
transportation and distribution, is called downstream.
Value Engineering
All activities, such as design criteria, specification, suppliers and construction methods, can be improved to meet requirements of quality, construction
period, and stability in each section of EPC at minimum cost.
APPENDIX
2011 Samsung Engineering
Sustainability Management
Task Force
CSR Office
Sung-Il Hong, Jeong-Hee Sohn, Sung-Ah Lee, Seung-Kyu Lee
Project Management
Dong-Jin Lee, Beom-Seop Yun, Ji-Young Kim, Jeong-In Song, Jin-Hyung Park, Ji-Won Moon
Corporate Governance
Min-Kook Kang, Seung-Kwon Bang, Wan-Seob Kim
Ethics & Compliance
Tae-Yong Park, Jae-Sang Na, Jong-Kwang Lee
Environment, Health & Safety
Dae-Hoon Kim, Soo-Jung Hong, Cheon-Su Yeo
Employees & Workplace
Ki-Chae Ahn, Jae-Hyun Park, Seok-Min Lee, Ki-Seung Han, Do-Young Park, Joon-Kyu Chung
Supply Chain
Dong-Soo Son, Kyu-Ha Kim, Joung-Jun Baek, Ji-Eun Shin
Local Community
Song-Yi Kim, Ho-Jae Lee, Ji-Hee lim, Jae-Woo Chang, Na-Mi Choi
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The DJSI is a benchmark index for global sustainability management.
500 Samsung GEC, Sangil-dong, Gangdong-gu, Seoul, Korea
Tel. 02-2053-3000 Fax. 02-2053-3339
www.samsungengineering.com
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