Social responsibility    
 
Environment

Bringing benefits to the environment
The Keller Group continues to recognise the impact of its business on the environment, with many of its products contributing environmental benefits. These include land reclamation schemes, soil erosion control, flood control, decontamination or containment of contamination and the preparation of brownfield sites.

During the year, Keller Ground Engineering (KGE) was involved at a site in Portadown, Belfast, which is being used as a testing ground for an innovative in situ groundwater remediation system. This reactive gate and barrier system involved constructing deep slurry walls across the natural flow of groundwater, thereby directing contamination to a reactor vessel containing filter material where the contaminant is broken down.

Group companies were involved in various dam remediation schemes, forming part of a worldwide focus on upgrading major dams to prevent premature failure due to soil erosion and earthquake. For example, Franki Australia was involved in the remediation of two dams – the Yarawonga Reservoir in Victoria and the Hume Dam, which straddles the Murray River, separating Victoria from New South Wales – where they installed secant walls comprising interlocking stone columns to depths of up to 20 metres.

In 2002, Keller continued its support for various environmental research projects. These included a project undertaken jointly by Franki Australia and Monash University, to ascertain the effectiveness of deep soil mixing in Coode Island silt in the docks area of Melbourne. Coode Island silt is an acid sulphate soil and improving its strength in situ will allow construction of container platforms without undue settlement, reduce the requirement for more costly piling solutions and limit the expensive handling of this contaminated material.

In the UK, KGE continued to support research into sustainable construction, through its sponsorship of a Queen’s University, Belfast, Ph.D programme. The Group is represented on the Industrial Advisory Board of the QUESTOR Centre (Queen’s University Environmental Science and Technology Research Centre) and, in partnership with the Environmental Agency, the QUESTOR Centre and others, Keller is involved in the development of permeable reactive barriers.

Our Specialist Services business, Makers, is working with local authorities and housing associations across the UK on the structural refurbishment of social housing, much of which was constructed in the 1960s and 1970s. As an alternative to demolition and rebuild, these projects are resource efficient and have fewer environmental impacts. In addition, they invariably bring thermal efficiency benefits, resulting in reduced energy consumption.

Environmental management systems
Notwithstanding the positive impacts of many of the schemes in which we are involved, we do recognise that many of our site activities have environmental effects. Most notably, these involve noise, dust and slurry emissions and the use of specialist products, such as grouts. We have a continuous programme of trying to mitigate these impacts by, for example, selecting new plant with reduced noise emissions, researching the viability of new, more benign materials and seeking better ways of capturing waste from drilling.

At Hayward Baker, for example, the equipment fleet has been converted to operate with a new, environmentally-friendly form of lubricant. Many of the hydraulic systems operate in areas where leaks or spills could result in contamination of the soil or nearby waterways. The properties of the new hydraulic oil make it inherently biodegradable, minimising the risk of long term environmental damage.

Our environmental management systems are not uniform across the Group. Our businesses, which have their own environmental policies, have each adopted a system that reflects local regulations, culture and business needs. In Australia, for example, Franki has developed an Environmental Noise and Vibration Management Plan, which is modified to suit the specific requirements of individual sites. This plan involves community consultation, including advising local residents and businesses of the duration of Franki’s activities and providing an in-house contact who will discuss their concerns.

Makers has now integrated its environmental management system into a single safety, quality and environmental management system. As planned, ISO14001 accreditation will be sought during 2003. During the year, environmental training for operatives has been undertaken at all sites and environmental awareness training has been incorporated into the standard induction training for all new staff.

The KGE environmental management system, which complies with ISO14001, was fully introduced into the business in 2002. An “environmental performance” satisfaction rating has recently been added to their customer survey which, together with the internal review process, is expected to provide an independent measurement of performance.

Working with the community
Most projects in which Group companies are involved are located in remote areas, away from local populations and therefore, there is usually little impact on, or relationship with, a local community. For most of our businesses, support for local community projects is indirect – by, for example, sponsoring or supporting the efforts of employees who are involved in charitable or community projects.

A notable exception to this is Makers which, through its social housing refurbishment schemes, has significant interfaces with residents and community groups. Makers prides itself in having an effective dialogue with residents, which includes the distribution of site brochures (in four different languages, in some cases) to advise residents on how they will be affected by their works.
 

Health and safety
As with environmental management systems, there is no single health and safety management system across the Group, as each business is subject to different safety standards and regulations. There is, however, a strong safety culture within all the businesses, which means that safety features high on the senior management agenda, safety training at all levels is taken very seriously and, on the ground, significant resources are dedicated to inspecting job sites for potential hazards and giving on site “toolbox talks” to ensure that safety awareness governs the daily work activities.

In North America, a company’s safety record, relative to
other businesses, is measured through the experience modification rating (EMR). A low score indicates a good safety record. In 2002 the EMRs for Hayward Baker and Case were both 0.69, against an industry standard rating of 1.00 and a previous year’s rating of 0.73. This improvement reflects the effort and resources which are dedicated to improving safety performance. Both Hayward Baker and Case have full-time, dedicated safety professionals as well as regional safety officers and operate schemes through which employees are incentivised to come up with new ways of improving safety.

The key safety objective for our Franki operations in Australia is to achieve zero lost-time injuries. Despite a renewed emphasis on safety management throughout the year, the number of lost-time injuries rose from 10 to 12, notwithstanding a reduction in man-hours worked. Incident and frequency rates remain below the Australian construction industry average.

In our Continental Europe and Overseas operations, a procedure for on-site health and safety forms part of the quality management system. In addition, operating units are required to respect and comply with all local regulations. To the extent feasible, training courses are held on a regular basis in order to improve risk awareness on site. Each business unit employs a safety officer, either on a full or part-time basis, according to the business need and local regulations. Performance is monitored by the divisional head office in Germany and compared to international standards. Rates of sick leave remain below the industry average. As a trend, the number of accidents on site declined in 2002 compared with the previous year.

In the UK, Makers recorded a further reduction in the total number of accidents reported through the accident reporting procedure to 98 (2001: 114). The number of accidents reported to the Health & Safety Executive (“HSE”) increased to 18 (2001: 14), which becomes less significant when account is taken of the increase in the number of employees on site from 598 in 2001 to 725 in 2002. The accident frequency rate (AFR) increased to 1.13 (2001: 1.05) and the accident incident rate (AIR) increased to 2,344 (2001: 2,174).

Following an increase in reportable accidents during the first
six months of 2002, all managers were targeted to attend the Construction Industry Training Board’s Site Managers Safety Training Scheme. Another key initiative introduced during 2002 was the use of video cameras by safety advisers to capture good and bad site practices, for use in training videos. Also, the measurement of safety performance at site level was improved. Performance charts are used for internal benchmarking and are reviewed by the board on a monthly basis.

KGE saw a slight rise in the number of reportable accidents in 2002, with an increase in the number of three-day accidents and a reduction in major injury accidents. This resulted
in an increased AFR of 15.6 (2001:12.5) and an AIR of 3,690
(2001: 2,991). As a consequence, a number of new safety initiatives have been introduced, including an increase in the frequency of site safety “toolbox talks”, the introduction of a new series of safety awareness days and greater participation of site supervisors in management safety meetings.

There were no HSE prosecutions or enforcement notices brought against either of the UK businesses in 2002 and there are none pending.

Employees
Throughout the year our businesses have continued to use
a variety of media and forums for communicating with their employees including Company newsletters, consultative councils, results presentations, suggestion schemes and informal channels, such as company-wide social events.

In addition to job-specific and safety training, in which considerable resource is invested by all our businesses, the
Group has a three-tier management development programme. It comprises basic modules, which are offered locally in the main centres of operation; a strategic programme offered each year to some 20 managers from across the Group; and the further development of individuals at, or just below, board level through executive programmes at Insead and Harvard business schools.

It is our policy to employ and train disabled people wherever their skills and qualifications allow and when suitable vacancies are available. Disabled employees are encouraged to undertake training and career development to prepare them for promotion. Should existing employees become disabled, every effort is made to find appropriate work and training if appropriate.