SustainabilityReport 2011
contentsContents                                                                        Governance	15Message from Jim Henn...
Our     People,     the fibre     of our     business.                 2011 has been a challenging year for Australian Pap...
AUSTRALIAN PAPER sustainability report 2011We have a domestic market keen to buy Australian              Continued engagem...
Message from Shaun Scallan,     General Manager, Corporate     Social Responsibility     The creation of my role in March ...
AUSTRALIAN PAPER sustainability report 2011sustainable paper– the choiceA growing number of businesses and individuals    ...
about this report     Australian Paper’s 2011 Sustainability Report is the       External assurance has not been sought fo...
AUSTRALIAN PAPER sustainability report 2011   australian paper   – an overview   Head Office                              ...
Our Brands     Australian Paper manufactured and owned brands are:     Our Company                                        ...
AUSTRALIAN PAPER sustainability report 2011Our Certifications                                                           •	...
stakeholder engagement      and material issues      Ongoing communications with our key stakeholder            •	 Develop...
AUSTRALIAN PAPER sustainability report 2011Key topics raised in the Future Fibre Strategy review included: Issue          ...
Key topics raised in the Future Fibre Strategy review included (continued):       Issue           Stakeholder      How we ...
AUSTRALIAN PAPER sustainability report 2011future fibre strategyAnnounced in June 2011, Australian Paper’s Future FibreStr...
Recycled fibre                                                  Sustainably managed      Australian Paper is the only Aust...
AUSTRALIAN PAPER sustainability report 2011governancePaper Australia Pty Ltd, trading as Australian Paper is a     Board C...
Communication of risks and recommended actions    is the responsibility of the individual to whom a risk       Code of eth...
AUSTRALIAN PAPER sustainability report 2011sustainability goalsand targetsProgress on 2011 sustainability goals and target...
Progress on 2011 sustainability goals and targets (continued)       Goals               Targets                           ...
AUSTRALIAN PAPER sustainability report 2011our sustainability goalsand targets for 2012Goals                     TargetsEn...
Environment   Fibre sources	21   Biodiversity 23   Water	24   Water treatment 25   Energy and Greenhouse Gas Emissions 26 ...
AUSTRALIAN PAPER sustainability report 2011environmentWhile 2011 was a challenging year, our environmental        Our five...
total fibre source                               504,404         515,073           489,905           536,456        563,94...
AUSTRALIAN PAPER sustainability report 2011Biodiversity                                                  in forest deemed ...
Australian Paper Sustainability report 2011
Australian Paper Sustainability report 2011
Australian Paper Sustainability report 2011
Australian Paper Sustainability report 2011
Australian Paper Sustainability report 2011
Australian Paper Sustainability report 2011
Australian Paper Sustainability report 2011
Australian Paper Sustainability report 2011
Australian Paper Sustainability report 2011
Australian Paper Sustainability report 2011
Australian Paper Sustainability report 2011
Australian Paper Sustainability report 2011
Australian Paper Sustainability report 2011
Australian Paper Sustainability report 2011
Australian Paper Sustainability report 2011
Australian Paper Sustainability report 2011
Australian Paper Sustainability report 2011
Australian Paper Sustainability report 2011
Australian Paper Sustainability report 2011
Australian Paper Sustainability report 2011
Australian Paper Sustainability report 2011
Australian Paper Sustainability report 2011
Australian Paper Sustainability report 2011
Australian Paper Sustainability report 2011
Australian Paper Sustainability report 2011
Australian Paper Sustainability report 2011
Australian Paper Sustainability report 2011
Australian Paper Sustainability report 2011
Australian Paper Sustainability report 2011
Australian Paper Sustainability report 2011
Australian Paper Sustainability report 2011
Australian Paper Sustainability report 2011
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Australian Paper Sustainability report 2011

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Environment and social responsibility is critical to the success of Australian Paper. The Australian Paper 2011 Sustainability Report is a comprehensive analysis of our environmental, economic and social operations and outlines our sustainability commitments and performance.

In the words of Jim Henneberry - Chief Executive Officer - Australian Paper
"In 2012, Australian Paper will seek to maximise further opportunities in the marketplace, through increased distribution of product and expanding our range of environmentally preferable products. We will also continue to increase our production of renewable energy and aim to further reduce our energy use and waste per tonne of pulp and paper production across our sites. While 2011 proved to be a challenging year for Australian Paper, I firmly believe that we can continue to turn challenges into opportunities. I’d like to encourage the Australian manufacturing sector to demonstrate that through innovation and the adoption of best practice processes, Australian businesses can be smart, sustainable and here for the long term".

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Australian Paper Sustainability report 2011

  1. 1. SustainabilityReport 2011
  2. 2. contentsContents Governance 15Message from Jim Henneberry, Sustainability Goals and Targets 17Chief Executive Officer 2 Environment 20Message from Shaun Scallan, General Manager,Corporate Social Responsibility 4 People 34Sustainable Paper – the Choice 5 Economic 47About this Report 6 Glossary 49Australian Paper – an Overview 7 GRI Content Index 50Stakeholder Engagement and Material Issues 10 GRI Application Level Check 52Future Fibre Strategy 13This report and the information contained in this report is for the sole purpose of informing the public about Australian Paper’s efforts and achievementsin operating sustainably. It is to be read as a whole. Except where it has specifically consented in writing, Australian Paper does not consent to, orwarrant the use of, or reliance on this report or the information in it, for any other purpose.
  3. 3. Our People, the fibre of our business. 2011 has been a challenging year for Australian Paper. As most local companies in the manufacturing sector have seen, Australia’s strong currency has proved to be a major obstacle. Our company has been under intense competitive pressure from imported papers and our export markets have also been significantly impacted. Despite these difficulties, the steps we have taken in recent years to improve the sustainability of our operations has strengthened our position in a difficult marketplace. In adverse market conditions, we have turned Jim Henneberry challenges into opportunities by incorporating a risk management approach. We have responded to Chief Executive Officer marketplace requirements. Our strategy this past year Australian Paper has been to ‘think local’, ‘act local’ and continue to improve efficiencies throughout the business. We’ve been ‘operating smarter’.2 a message from the CEO
  4. 4. AUSTRALIAN PAPER sustainability report 2011We have a domestic market keen to buy Australian Continued engagement with diverse stakeholder groupsmade product. The opportunity is here for us to around future fibre sourcing will help us to continuetruly consolidate our position as a proud and iconic to balance our economic, social and environmentalAustralian company that customers want to support. performance and build mutually beneficial relationships.Australian Paper has, after all, clocked up over 140 yearsof operation in its various forms. The acquisition of In 2012, we will conduct a feasibility study into thethe assets of local manufacturer Australian Envelopes development of a major recycling plant at our Maryvaleafter they entered voluntary receivership in July 2011 mill. We want to ensure that increased customerprovided us with a growth opportunity. We have demand for recycled product can be met through localensured the future of envelope manufacturing in manufacturing rather than imported sources. TheAustralia and have further strengthened our position development of this plan would divert large amountsin the marketplace. Australian Paper now has the of paper from landfill and provide further regionallargest envelope manufacturing facility in the country. employment in the Latrobe Valley.Australian Paper will continue to look for growth In some areas, such as in water reduction, we haven’topportunities in the market to strengthen our economic achieved the goals we set in the last reporting year. Ourposition in the marketplace. partnership with the Gippsland Water Factory was set toA necessary consolidation of our stationery commence in 2011, however due to significant rainfallmanufacturing operation also took place, with the in the period following the time of approval, the intakeclosure of the Regency Park stationery manufacturing of recycled water was not required. What truly becameplant in South Australia and relocation to Preston evident in 2011 is that Australian Paper’s integration within Victoria. Increased carbon neutral product has Nippon Paper Industries (NPI) in 2009 has improvedbeen well received by customers across the board efficiencies across our operations. Through the adoptionand we are pleased to note that we achieved our five of Japanese manufacturing best practice processesyear Forest Stewardship Council® re-certification. at our Australian locations, our fixed costs haveOur Preston manufacturing plant achieved Australian significantly reduced.Forestry Standard Chain of Custody certification which Co-operation and support from our friends at NPInow extends our certified product range to include has continued despite the devastating impacts oflocally manufactured envelopes. Australian Paper the Japanese earthquake and tsunami in March 2011continues to be the largest industrial producer of base on Japanese operations. We greatly appreciate NPIsload renewable energy in Victoria. We have also seen continued commitment to Australian Paper which hasimprovements in safety with a cultural embrace of our become core to our sustainability as a business.Zero Harm strategy at our Maryvale mill. In 2012, Australian Paper will seek to maximise furtherAn invigorated response to external stakeholder opportunities in the marketplace, through increasedengagement through our Future Fibre Strategy, launched distribution of product and expanding our range ofin June, has also been essential in finding out what our environmentally preferable products. We will alsostakeholders expect from Australian Paper in terms of continue to increase our production of renewablesourcing an acceptable long term fibre supply. energy and aim to further reduce our energy use andAny shifts in fibre supply strategy need to be carefully waste per tonne of pulp and paper production acrossstudied as what is determined today will still remain the our sites. While 2011 proved to be a challenging year forfibre sourcing solution over the next 30 years. Australian Paper, I firmly believe that we can continue to turn challenges into opportunities. I’d like to encourageThe Future Fibre Strategy will also include an increase in the Australian manufacturing sector to demonstrateplantation fibre to address the shortfall in our long term that through innovation and the adoption of bestrequirements. This shortfall is due to the impact of fire practice processes, Australian businesses can be smart,on our existing plantation supplier and the inability of sustainable and here for the long term.our 2007 Management Investment Scheme agreementwith Macquarie Investment to establish sufficientplantations local to our Maryvale mill.The strategy included a detailed study which exploredthe feasibility of plantation supply from Western Victoria.A small portion of this resource has proven to be viable Jim Henneberry.and the first deliveries of these additional plantationvolumes are anticipated for early 2012. a message from the CEO 3
  5. 5. Message from Shaun Scallan, General Manager, Corporate Social Responsibility The creation of my role in March 2011 marked a More focus is given to highlighting our governance, risk concerted effort by the executive team to take and compliance approach to business, which we believe responsibility for sustainability throughout Australian will also benefit other companies in the manufacturing Paper. We recognised that we needed to communicate sector. A greater focus is also given to our people – our sustainability story in a way that shows that we are those who our CEO Jim Henneberry referred to as ‘the accountable for our actions. The result of this of course fibre of our business’ in 2010. Greater engagement with was the publication of our 2010 Sustainability Report our internal stakeholders in 2011 gave us insight into – our first report aligned with the Global Reporting what really matters to them about the way we operate Initiative (GRI) framework. our business and how we communicate with them. It was important for Australian Paper to lay the Continuous improvement projects developed and groundwork for future sustainability reporting using a implemented by our staff demonstrate what we can transparent and credible mechanism such as the GRI achieve as team members with shared objectives and framework. Last year’s achievement in publishing our how we can remain a sustainable and viable business first report has also proved stimulating for our internal in Australia. and external stakeholders. Interest in our sustainability practices is gaining momentum throughout our With our second and future GRI reports, we intend to operations and beyond. increase the focus on how our business runs and better articulate where we’re going. Put simply, we’re providing For our 2011 report we have chosen to move from a more information to our stakeholders and encouraging Level C report to a Level B report – hoping to broaden feedback so that we know what is expected of us. our story as a business and to communicate our strategic direction more effectively. It was the natural We’re a corporate citizen – we believe a good one, and next step in our sustainability reporting journey. our 2011 Sustainability Report aims to communicate this. We welcome your thoughts. Shaun Scallan. Shaun Scallan General Manager Corporate Social Responsibility Australian Paper4 a message from the General Manager, Corporate Social Responsibility
  6. 6. AUSTRALIAN PAPER sustainability report 2011sustainable paper– the choiceA growing number of businesses and individuals Paper Company % Certified Fibre*understand the complexities of the sustainability criteria Australian Paper 85%in paper selection. However, we have some work todo to raise awareness of the buying choices available UPM Kymmene 78% (see: www.upm.com)to Australian consumers. We see one of our roles as Stora Enso 66% (see: www.storaenso.com)educating businesses and individuals in their choice of Mondi 61% (see: mondi.com)paper as there are far reaching environmental, social and Resolute Forest 35% (see: resolutefp.com)economic implications of their purchasing decisions. ProductsIn 2010-2011, Australia had a trade deficit of around $1.9 International 30% (see: www.internationalpaper.com) Paperbillion in paper products. This provides a strong signal Domtar 28% (see: Domtar.com)that a very large proportion of paper and paper productsavailable in Australia is imported – $110 million of this * ertified fibre figures show the combined percentage of PEFC and FSC® Cdeficit comprises commonly used white cut ream office certified fibre and were sourced in June 2012 from publicly availablepaper (see: www.industryedge.com.au). informationClearly this is negatively impacting our economy, and The procurement of sustainable paper products shouldimpacting Australia’s opportunities to grow domestic be defined by authentic sustainability criteria thatmanufacturing and to increase local employment in the address key issues relating to environmental, social andpaper manufacturing sector. economic outcomes. Chain of Custody certification allows fibre to be tracked through the supply chain toMany consumers may also not be aware that imported its source. By incorporating a robust sustainable paperpaper flooding our market is often from countries procurement framework, businesses and individuals canwith controversial environmental and social practices. make a sustainable choice.Sustainability criteria such as the fibre source,land acquisition and the treatment of traditionallandowners and factory workers may be difficult totrace. Governance and transparency mechanisms areoften unclear.Australian Paper is a proud Australian manufacturer.Traceability of our products is clear, process todetermine low risk and certification of our fibre supplyis robust and we take seriously our responsibility tosupport and work with our local communities.Our commitment to PEFC and FSC® certified fibrealso benchmarks strongly against leading papermanufacturers worldwide. www.onpaper.com.au sustainable paper – the choice 5
  7. 7. about this report Australian Paper’s 2011 Sustainability Report is the External assurance has not been sought for this second aligned with the Global Reporting Initiative’s report, as Australian Paper undertakes assurance (GRI) sustainability reporting framework. We have activities around energy and emissions, and financial compiled this report in accordance with the GRI’s Level data to ensure that data collection and reporting B reporting requirements and the report has received a methodologies and procedures are in accordance with GRI Application Level Check. industry best practice. We progressed from a Level C to a Level B report This report provides an overview of Australian Paper’s as part of our continuous improvement processes sustainability performance for the 2011 calendar year. and to provide greater detail of our environmental, The Global Reporting Initiative’s ‘Guidance for Defining social and economic impacts throughout the Report Content’ document shaped the report structure organisation and beyond. Moving to a greater level of and content. Our next planned report will be our 2012 disclosure was influenced by a number of factors: our sustainability report, to be published in 2013. stakeholders asked us to provide more information, access to additional information available around material issues at Australian Paper and any risk associated with additional disclosure. Encouraged by Report Boundary the overwhelmingly positive response to our 2010 The report boundary has been extended from our sustainability report, our Risk Management team 2010 report. Environmental data for this year includes approved the evolution of our report from a Level C to a energy and greenhouse gas emissions for our Preston Level B for 2011. manufacturing facilities. In 2010, we included this information for our mills only. All other environmental The scope of our report has not changed greatly since data represents activity at our Maryvale mill in Victoria, our last report in 2010, as although more in-depth and Shoalhaven mill in New South Wales unless stakeholder engagement was undertaken in this otherwise stated. reporting year to determine material issues, we found that according to stakeholder feedback most issues All information covers our Australian based divisions remained the same. Greater focus has however been only. Reporting on overseas divisions of Australian Paper given to fibre sourcing through discussion around is beyond the report boundary. We do not anticipate our Future Fibre Strategy and also to reporting on reporting overseas information in the foreseeable future. more employee focused data as was the request by There are no further limitations on scope or boundary. internal stakeholders. Restatements have occurred in some parts of the environmental, social and economic sections of the report as some historical data was inadvertently reported incorrectly in 2010. Data has been corrected and notated wherever restatements are required. Data gathering processes in this area have been streamlined to ensure correct reporting in this and future years. No errors occurred that would significantly change trends in environmental or social performance. Data measurement models and techniques are described throughout the report.6 about this report
  8. 8. AUSTRALIAN PAPER sustainability report 2011 australian paper – an overview Head Office Our Product • Company head office is located in Melbourne, Categories Victoria. Australian Paper manufactures and supplies a wide range of papers for many end uses, from office paper Our Markets to invoices and statements, book and publication papers, food wrappers and bags, paper for carton liners, • Primary: envelopes, coloured papers and boards. Watermarked — Australia and New Zealand business to consumer and embossed security and cheque papers are and business-to-business markets manufactured and we convert stationery and envelope • Secondary: products. We also manufacture certified pulp to use — Australian Paper brands are exported through in the production of our printing, communication and our Paper Products Marketing (PPM) division packaging papers. Pulp is also sold to other businesses to over 70 countries in Asia, North America, such as tissue manufacturers. Latin America, Europe, Middle East, the Indian subcontinent, Europe, Africa and Papua New Guinea. PPM supplies 463,000 tonnes of paper, including Australian Paper product to over 75 countries from more than 100 suppliers from Australia, New Zealand, Asia, Japan, China, USA, Europe and Brazil. Our Pulp and Paper Production our paper and pulp production 933,441 918,458 920,698 986,937 1,039,706total pulp and paper (‘000) 600 500 Our Sales Volume 400 • 668,749 tonnes 300 200 100 0 2007 2008 2009 2010 2011 paper pulp australian paper – an overview 7
  9. 9. Our Brands Australian Paper manufactured and owned brands are: Our Company Our Operations Structure Australian Paper’s domestic operations comprise a number of business units, each with its own capability Paper Australia Pty Ltd, trading as Australian Paper is spanning manufacturing, production, printing, and sales wholly owned by Nippon Paper Industries Co. Ltd., and marketing. Australian Paper’s mills are located in incorporated in Japan. Paper Australia Pty Ltd. wholly Maryvale, Victoria and Shoalhaven in New South Wales. owns and operates the Australian Office division in Our envelope and stationery manufacturing is located Australia. Foreign entities listed below are all subsidiaries at Preston in Melbourne. Sales and marketing operations of Paper Australia Pty Ltd., and operate Paper Products are primarily located in Melbourne, and additional sales Marketing (PPM). offices are located in Queensland, New South Wales, ACT, South Australia and Western Australia. Overprinting machines are also located in Queensland, New South Significant subsidiaries Country of Ownership and their divisions incorporation Interest Wales, and Western Australia. Paper Australia Pty Ltd •  Australian Office Australia 100% Paper Products Marketing Pty Ltd Australia 100% Company Ownership Paper Products Marketing Taiwan 80% Australian Paper is an Australian Proprietary Company, Taiwan Ltd limited by shares and registered with the Australian Paper Products Marketing Hong Kong 100% Securities and Investments Commission (ASIC). Nippon Hong Kong Ltd Paper Industries Co. Ltd is the sole shareholder. Paper Products Marketing Malaysia 100% Pty Ltd Paper Products Marketing Singapore Pte Ltd Singapore 100% Our People Paper Products Marketing USA 100% • 1368 employees Australia wide as at December 2011 USA Inc. PPM Frohlen-Reddeman Germany 100% GmbH Australian Paper Australian Paper Australian Paper Australian Maryvale Shoalhaven Paper Products Print Packaging Office Mill Mill Marketing Group (PPM) Offset Kraft liner board Office Papers Integrated Speciality and Export Sales Web Sack and Stationery Pulp and Paper Security Papers and Specialty bag papers Envelopes operation Global Paper Transactional Trading Mail Security8 australian paper – an overview
  10. 10. AUSTRALIAN PAPER sustainability report 2011Our Certifications • Australian Forest Products Association (AFPA) • Australian Industry GroupProducts• Australian Forestry Standard (AFS) Our partnerships• Programme for the Endorsement of Forest • Monash University Certification (PEFC) • Swinburne University• Forest Stewardship Council® • Australian Institute of Management• National Carbon Offset Standard (NCOS)• Environmental Choice New Zealand AwardsSites• Australian Forestry Standard (AFS) Chain of Custody Safety• Forest Stewardship Council® Chain of Custody Australian Paper Maryvale mill received the Safety• ISO 14001 – environmental management (Maryvale Scheme of the Year Award from Manufacturer’s Monthly and Shoalhaven mills) magazine for the ‘Refresher Training Toolbox 24/7’ scheme launched in 2010.• NATA certified onsite laboratory at Maryvale mill• ISO 9001 – quality management (all operations) The Victorian Association of Forest Industries (VAFI) presented Maryvale mill with the Occupational Health• AS 4801 – safety (Maryvale mill) and Safety Award for best practice in OHS processes* dditional to our own certifications, we look for our suppliers to have A and results. either certified product or fibre that meets the AFS/PEFC and FSC® requirements. CommunityOur Licences Maryvale mill was also the recipient of VAFI’s Local Community Engagement Award, for ongoing outreach• Environment Protection Authority (Maryvale and efforts with the local Latrobe Valley community. Shoalhaven mills)• Major Hazardous Facility (MHF) at Maryvale mill Corporate Social Responsibility• Australian Made, Australian Grown Australian Office received Corporate Express Australia’s inaugural award for Corporate Social Responsibility Supplier of the Year in recognition of AustralianOur Memberships Office’s proactive approach to further improve the environmental credentials of Corporate Express’ Own• FSC® Australia Brand copy paper as they transitioned from EXP to• AFS Limited Staples Carbon Neutral Copy Paper. The product is• WWF’s Global Forest and Trade Network (GFTN) certified to AFS, PEFC and NCOS. As Corporate Express customers move from EXP products to Staples Carbon• Victorian Association of Forest Industries (VAFI) Neutral, this will reduce carbon emissions equivalent to• Timber Communities Australia (TCA) taking 16,500 cars off the road each year.• Standards Review Committee – Australian Forestry Standard australian paper – an overview 9
  11. 11. stakeholder engagement and material issues Ongoing communications with our key stakeholder • Develop and build working partnerships with groups is an essential part of our business and provides stakeholder groups an important platform from which we make informed • Mitigate risk to our business and products business decisions, shape our future strategies and determine which issues are material and should be • Manage our reputation by providing open channels reported on. Engaging with our stakeholders provides of communication, and us with an opportunity to better negotiate working • Explore innovative approaches to achieve relationships, evaluate the potential impacts of our common goals. business decisions and understand activities undertaken by various stakeholder groups. Engagement also We communicate with our stakeholders through helps us to achieve balanced economic, social and numerous methods such as our ongoing monthly environmental outcomes. Community Consultative Committee (CCC) in the Latrobe Valley in Victoria, annual community 2011 saw a more formalised approach to stakeholder consultation group at Shoalhaven, New South Wales, engagement than in previous years. We took the time to face-to-face discussions, multi-stakeholder forums, capture issues and concerns from numerous individuals surveys, website, road shows, communications materials and organisations about our products and operations, and others. allowing us to group the issues by stakeholder group, and prioritise material issues for action. Maryvale’s CCC provides feedback on environmental improvement opportunities to ensure Australian Paper Through this process, our stakeholder groups were activities are aligned with community expectation. identified as: In 2011, a collaborative engagement workshop was • Nippon Paper Industries (NPI) – our parent company held with Australian Paper and EPA Victoria to further improve responses to community complaints and • Employees to look at ways to encourage direct communication • Customers between the public and the Maryvale mill. • Suppliers The majority of our stakeholder engagement activities • Federal, state and local government in 2011 centred on the review of Australian Paper’s current fibre sources with a view to shaping our Future • Non-Governmental Organisations (NGOs), including Fibre Strategy to align with stakeholder expectations Environmental Non-Governmental Organisations where possible. (ENGOs) • Unions A number of formal engagement activities took place including multiple face-to-face discussions with many • Local communities, and stakeholders, to ensure we were hearing as many voices • Industry associations and groups. as possible. Australian Paper and these groups discussed in detail, strategic planning and day-to-day aspects With continued stakeholder engagement, Australian of ours and our supplier operations, to effectively Paper aims to: and transparently communicate our plans and seek • Understand the needs and wants of stakeholders stakeholder input and feedback. • Achieve the best possible outcome for all parties involved, where possible • Engage in open and transparent communications10 stakeholder engagement and material issues
  12. 12. AUSTRALIAN PAPER sustainability report 2011Key topics raised in the Future Fibre Strategy review included: Issue Stakeholder How we What we heard Our response Resulting stakeholder group engaged driven goals and targets Environment ENGOs Directly Preference for Western We commissioned the Future Fibre Strategy through Victorian plantation Poyry report to provide a rollout meetings and fibre to replace detailed analysis of fibre also through native regrowth fibre sourcing options in Western the Global supplies Victoria. Feedback on the Forest Trade Poyry report was provided Network Concern about Australian Paper instigated Leadbeater’s possum a review of VicForests and habitat from wood DSE practices. Site visits production and fire were focused around the impact protection of biodiversity and water. We also asked for ENGO engagement for Future Fibre Strategy development Concern about illegal Australian Paper continues We will continue to logging to support GFTN principles report annually against the GFTN Trade Action Plan 2011-2013 Would like stronger We engaged with ENGOs We will continue to certification for forest on a review of AS4708 and support strong protection management in joined the standards review for biodiversity and Australia committee improved stakeholder engagement through the Timber Industry Action Plan and Australian Forestry Standard State Meetings The state government We discussed directly We will support events to Government and direct is committed to and wrote to the state engage our stakeholders engagement the protection of government to encourage with forest science biodiversity including communications on experts rare, threatened and threatened species research endangered species already underway Social Timber Meetings Concern about the We engaged with state We aim to gain industry Communities and direct future of the timber government and the support from state and Australia engagement industry, particularly union to establish industry federal government with relation to support for continued jobs availability and operations security in timber communities Union Meetings Concern about job security for members Local Meetings Concern about the We provided factual We aim to ensure that Government and through impact of the Ethical information on issues Municipal Association – regional Timber Paper campaign on of concern through our Victoria (MAV) is Victoria Towns the viability of the information portal – Ethical adequately informed of forestry industry Paper – the Facts the facts available related and impact on local to this campaign communities Local Email and MAV members were Government invitation to being encouraged to – across stakeholder support the Ethical Victoria events Paper campaign (continued overleaf) stakeholder engagement and material issues 11
  13. 13. Key topics raised in the Future Fibre Strategy review included (continued): Issue Stakeholder How we What we heard Our response Resulting stakeholder group engaged driven goals and targets Economic Government Directly Concern about the We identified and Identify and develop – local, state through economic impacts communicated these opportunities for and federal meetings throughout the impacts to the state and Australian Paper to local community federal government successfully continue if jobs were lost as operations in regional a consequence of Victoria with industry a downturn in the support from state and industry federal government Suppliers Directly Concern for the Future Fibre Strategy through impact of supplier rollout meetings economic viability if they cannot source sufficient wood through various impacts and decisions Major Combined Buying sustainable We are committed to Future Fibre Strategy customers meetings products is important sourcing certified wood rollout with and communicating customers sustainability information of and ENGOs our products Buying price We are committed to using competitive and Australian fibre sources and Australian products is manufacturing locally important Products must be Locally manufactured price competitive product will be competitively priced if we have available and competitively priced fibre sources Support for recycled We have broadened our Carbon neutral products paper and carbon carbon neutral offering, will continue to provide a neutral product and hope to increase our significant portion of our recycled product range offerings, and a de-inked pulp facility feasibility study will be completed in 2012 Australian Paper We are committed We will continue with brand reputation to transparent focused stakeholder is important for communications with engagement in coming customers to continue our stakeholder groups in years to buy coming years and have undertaken major work with industry bodies Clarification required We are committed to both Continue to maintain about the differences standards and believe that FSC® and AFS Chain of between FSC® and both standards can be Custody certification PFEC/AFS certification improved Internal stakeholder feedback was sought through an As we progress with our stakeholder engagement, online survey to gauge opinions on our first GRI aligned we expect that our key stakeholder groups will look sustainability report released in 2011. The survey gave us to the Australian Paper sustainability report as a insight into employees’ awareness of Australian Paper’s transparent representation of our activities. We also look sustainability performance, further issues deemed to be guided by our stakeholders to determine future material for future reports, employee perception of our material issues. company as a sustainable and responsible company, and recommendations for improvement for the report In 2012 we will: and the business. A number of environmental, social and • Develop a stakeholder engagement policy to provide economic topics in this report are included as a direct an ongoing framework for our engagement activities result of internal stakeholder feedback. Suggestions • Develop formal internal stakeholder engagement for improvements in how we communicate our processes to reach out to more staff and employees sustainability report have also been taken on board. to receive feedback on our sustainability activities Sustainability report briefings were also held with staff and sustainability reporting and employees and information disseminated in the • Provide an online feedback mechanism to which weeks prior to publication. stakeholders can respond to our sustainability report.12 stakeholder engagement and material issues
  14. 14. AUSTRALIAN PAPER sustainability report 2011future fibre strategyAnnounced in June 2011, Australian Paper’s Future FibreStrategy details a 30 year planning window to our fibre Utilisation of existingsourcing plans. and other plantationThe strategy’s direction was informed by an extensive sourcesstakeholder engagement program which reviewedAustralian Paper’s current fibre sources. As a result The findings of the Poyry report did not reduceof this engagement, we were able to shape the most Australian Paper’s need for additional plantationenvironmentally, social and economically viable long and recycled fibre sources to meet long term fibreterm fibre sourcing strategy. requirements. As a result, in September, we announced our plan to increase plantation inputs by maximisingThe review included discussion on the potential for usage from existing suppliers, utilising investmentfuture fibre sourcing including plantation timber from plantations in Central Gippsland and accessing some ofWestern Victoria, other plantation sources, sustainably the closest parts of the Western Victorian plantations.managed wood from regrowth state forestry operationsand recycled fibre. Investigations are also being undertaken into the feasibility of using other plantation sources. We are completing trials to increase our plantation supplyInvestigating yields and are negotiating to take additional volumes from a new Victorian supplier. We are also lookingplantation timber carefully at the creation of new plantations close tosources from Western our Maryvale mill.VictoriaPlantations in Western Victoria were establishedfor the export woodchip market and were locatedapproximately 500km from Maryvale mill.In response to a study written by the National Instituteof Economic and Industry Research (NIEIR), AustralianPaper commissioned an independent report fromglobal forestry experts Poyry Management Consultingto investigate the viability of sourcing plantation timberfrom Western Victoria to replace wood currentlysourced from managed regrowth.The Poyry report ‘Review of Issues affecting theTransition of Victoria’s Hardwood Processing Industryfrom Native Forest to Plantations’ found that on alarge scale, sourcing plantation timber from WesternVictoria could not occur without significant long termGovernment subsidy as the additional cost of deliveringwood to the Maryvale mill compared to that of managedregrowth operations would be $31 million per year. (Forthe full report: www.onpaper.com.au). future fibre strategy 13
  15. 15. Recycled fibre Sustainably managed Australian Paper is the only Australian manufacturer of wood from regrowth office, packaging and printing papers and supplies the majority of the recycled paper sold in Australia each state forestry year. The high grade de-inked recycled pulp used by operations Australian Paper in recycled office and printing papers is The harvesting of sustainably managed regrowth for manufactured from local wastepaper at Amcor’s Fairfield sawn timber produces significant quantities of low Mill in Victoria. grade residual wood which is ideal for paper making. Due to the anticipated closure of the Fairfield plant from Australian Paper is one of the outlets for this wood mid 2012, Australian Paper will conduct a Feasibility which would otherwise be left on site to rot or be burnt, Study for a large recycled pulp facility at our Maryvale or sent overseas as woodchips. Australian Paper sources Mill. Based on the size of the Fairfield plant, this facility this wood from VicForests and local sawmills. would more than triple Australian Paper’s usage of The Victorian government estimates that certified, de-inked recycled fibre and would significantly expand sustainably harvested regrowth timber generates the Australian market for recycled office and printing approximately 11,000 jobs in forestry and downstream papers. This plant would divert around 80,000 tonnes of processing, the majority of which are in regional areas. waste paper per annum from Australian landfill and also support local employment opportunities. The potential for a significant expansion in recycled supply is a key component of Australian Paper’s Future Fibre Strategy and an announcement on the recycled feasibility study is expected in the third quarter of 2012.14 future fibre strategy
  16. 16. AUSTRALIAN PAPER sustainability report 2011governancePaper Australia Pty Ltd, trading as Australian Paper is a Board Charter and Risk Management Framework. Risk private company. Financial reports are communicated to Compliance Committee and OHSE Committee memberparent company Nippon Paper Industries Co Ltd (NPI). composition is decided by the Executive Committee onAn appointed auditor audits our accounts each year, the recommendation of subcommittee members.and financial statements are lodged with the AustralianSecurities and Investment Commission (ASIC) as Remuneration arrangements for Australian basedrequired by the Corporations Act (2001). executives and directors are determined against the same merits as all other Australian Paper staff employees. Japanese director remuneration isOur board determined by NPI. NPI directly assesses the board’s economic,The Australian board of directors is elected by our environmental and social performance.shareholder NPI and includes Australian Paper’sChief Executive Officer, Chief Financial Officer, NPIRepresentative Director and NPI Tokyo based directors.The Australian board of directors is comprised of five Risk Managementmales, and a female secretary. Australian Paper has established an enterprise-wideEach director completes a declaration and consent to risk management process, consistent with the riskbecome a director in which the director declares their management principles, framework and process of ISOinterests and makes a standing order under section 192 31000 Risk Management Principles and Guidelines. Theof the Corporations Act. risk management governance structure is set out in and governed by the Board Charter and Risk ManagementA chairman is elected at each board meeting, held three Policy. Committee members are responsible forto four times per year. Each board meeting provides reporting areas of risk within their business area.an opportunity for any director to give notice of anyconflict of interest. Other senior managers involved in operational matters are responsible for:Australian Paper’s Board Charter deals with the process • Implementation of the risk management frameworkto be applied for the handling of any conflict of interest. and guidelines within their respective areas of responsibilityThere are no independent directors, as non-executivedirectors are employed by NPI or Paper Australia Pty Ltd. • Reporting on the status of the risk register as part of the annual planning and review cycle • Ensuring compliance with the process requirementsOur Committees for the risk assessment of new projects and contracts, andAn Executive Committee is a delegated subset of the • Conducting an annual review, teaming up with seniorBoard and is comprised of two executive directors functional heads of risk.and one NPI representative director. An OccupationalHealth, Safety and Environment Committee reports to Risk groups include group issues (financial, insurance,the Executive Committee and the Risk and Compliance legal and strategy), operational issues (mills and sales/Committee. The structure, scope and reporting regime marketing), systems issues, human resources issues andfor all committees, including member accountabilities safety, health, environment and community.and responsibilities is set out in Australian Paper’s 15 governance
  17. 17. Communication of risks and recommended actions is the responsibility of the individual to whom a risk Code of ethics is allocated for review and is comprised mostly of Our code of ethics commits Australian Paper to the members of the relevant committee. The committee following actions. We: members are also responsible for providing updates to the committee when it meets. • Strive to be a safe, positive, preferred place to work where high standards are upheld The Risk and Compliance Committee usually meets • Commit to improve our own individual and team quarterly. Summary findings are reported to the performances, and to build our organisational Executive Committee, Internal Audit and Board. capability • Uphold the highest level of integrity in meeting customer and shareholder needs and expectations • Ensure fair and transparent decision making where NPI Co Ltd our employees can be heard • Accept that the best solutions may come from different levels of the organisation • Commit to being a highly regarded corporate citizen, caring for the environment and positively working with our local communities and broad Audit: Board of J-SOX Directors range of stakeholders. Communicating with Executive our employees Committee Our senior managers, including the CEO and NPI Representative Director, address and update staff and employees on the state of business including production, financial performance, market related updates, external factors impacting on the business, and Occupational Risk and major initiatives and actions taken in order to build a Internal Audit Health, Safety Compliance Function Environment sustainable business. Communications are undertaken Committee Committee on a regular basis. Briefings are also provided for trade union officials who represent our employees.16 governance
  18. 18. AUSTRALIAN PAPER sustainability report 2011sustainability goalsand targetsProgress on 2011 sustainability goals and targetsGoals Targets Progress Commentary Yes No In progressEnvironmentUphold FSC® Complete a full 5 year FSC® Xfibre certification re-certification auditReview long Consult a broad range of stakeholders Xterm future fibre and invite participation in Future Fibresourcing options Review Review and implement Future Fibre X StrategyReduce water Gippsland Water Factory to supply X Approval for the project was received inuse at Maryvale Maryvale mill with eight mega litres September, and increased demand onmill of recycled water per day for use in Gippsland Water’s resources over the industrial processes from May 2011 summer period delayed provision of recycled water Achieve a 1% reduction in water use X Total water use increased by 4.3% due to an increase in productionReduce carbon Reduce carbon emissions by 1% X Restatement required – target incorrectlyemissions identified in 2010. Target should be a 1% reduction of energy per tonne of pulp and paper 1% reduction in energy per tonne of X Achieved a 0.562% decrease pulp and paperReduce waste at Roll out a composting program where XShoalhaven mill recovered paper solids are converted to compostReduce waste at Introduce bins to the machine floor to XMaryvale mill reduce metal waste Introduce bins to recycle plastic, X aluminium, paper, stainless steel and co-mingled metals Introduce bins to the canteen area and X Will commence in 2012 kitchens Investigate battery recycling programs X for Maryvale Look for innovative, alternative uses for X Fibre Finders Project at Shoalhaven mill waste across operations Grits and dregs recycling proposal at Maryvale mill (continued overleaf) sustainability goals and targets 17
  19. 19. Progress on 2011 sustainability goals and targets (continued) Goals Targets Progress Commentary Yes No In progress Safety Increased Implementation of the Zero Harm OHS X The strategic plan is tracking well management Strategic Plan 2011-2015 control and improvement of behavioural safety at Maryvale mill Improve safety Achieve separation of people and X To be completed in 2012 and reduce mobile equipment where practicable safety risk at Shoalhaven mill Implement a permit to work system X Review working at heights and X complete upgrades to the paper machine Complete safe lifting upgrades X Complete a joint investigation action X plan Implement a cardinal rules, fair X Cardinal rules and fair treatment model treatment model and safety charter has been completed. Safety charter in progress Implement a drug and alcohol policy X Will be completed in 2012 Improve safety Achieve WorkCover self insurance X Will be completed in 2012 and reduce safety risk at Implement extra guarding on X Australian Office machinery Prepare for and implement new national X Will commence in 2012 as legislation was OHS legislation including compliance delayed codes Implement individual site training plans X Reduce noise on machines X Commenced in 2011 and will continue in 2012 Continuous Improvement Implement Continue the 5S lean manufacturing X Will continue throughout 2012 continuous process improvement measures at Australian Office Health and Wellbeing Improve Focus on employee development X Developed a training matrix for all staff employee program and developed training plans for lead team development and high potentials as part of succession program at planning Australian Office Improve the Hold seminars in conjunction with X Only a small number of employees were health and WorkSafe in 2011 around programs on identified as high risk. These employees wellbeing of diabetes then contacted their own doctors. Australian Office staff Hold seminars through the QUIT Stop X Cancelled – no plans to carry this into Smoking campaign and reduce the 2012 incidence of smoking onsite18 sustainability goals and targets
  20. 20. AUSTRALIAN PAPER sustainability report 2011our sustainability goalsand targets for 2012Goals TargetsEnvironmentIncrease recycled fibre • Conduct a feasibility study of whether a recycling • Conduct a feasibility study to determine whetheroptions as part of the plant could be built at Maryvale mill developing a de-inked Pulp plant in Melbourne toFuture Fibre Strategy increase recycled fibre sources is feasibleImprove waste • Work with suppliers to determine whether we • Work with Monash University to find a regionalmanagement can collect data on both the type and volume of solution to reduce solid waste at Maryvale landfill waste being recycledImprove energy • Continue to look for ways to improve energy efficiencies throughout our operationsefficiencyMonitor wetlands • Carry out ongoing monitoring and management of the billabong and surrounding wetlandsOngoing odour • Finalise and submit the odour management plan • Continue to monitor and report NO x and SO x – amanagement to the EPA mandatory requirement of our operating licencesStakeholder EngagementFurther develop • Develop a stakeholder engagement policy • Develop formal internal stakeholderstakeholder to provide an ongoing framework for our engagement processes to reach out to moreengagement policy and engagement activities staff and employees to receive feedback onprocesses our sustainability activities and sustainability • Provide an online feedback mechanism to reporting which staff and employees can respond to our sustainability reportSafetyImprove safety and • Implement a contractor safety management • Undertake safety specific contractor inspectionsreduce safety risk at system and plant improvement plansMaryvale mill • Develop an area traffic management plan • Conduct Personal Protective Equipment and Manual Handling risk reviews • Review dangerous goods management processes • Develop an alcohol and drugs policy designed to • Roll out an emergency management plan support and inform employees about managing • Review leading indicators alcohol and drugs with relation to the workplace • Continue WASP and Take 5 Steps behavioural • Undertake Major Hazardous Facility Licence safety programs renewal with WorkSafeImprove safety and • Review and implement National OHS Legislation • Commence electrical safety review projectreduce safety risk at against current systemsAustralian Office • Achieve additional OHS support by employing an • Continue hazard risk reduction on machinery, additional OHS professional manual handling and noiseImprove safety and • Finalise traffic management plan • Finalise and implement the new permit to workreduce safety risk at processShoalhaven mill • Implement a drug and alcohol policy • Commence TPM Improvement and area based • Commence employee and contractor induction teams in the finishing department programMaximise human • Hire additional ex-Australian Envelopes staff to • Continue with targeted employee developmentresource effectiveness fully support our increase in skilled staff in paper opportunities converting • Continue with our range of health and wellbeing • See further consolidation in our head office, sales initiatives and manufacturing operations to improve our fixed cost baseEmployee DevelopmentContinue with • Further develop succession planning modelemployee developmentat Australian OfficeImprove training and • Create a talent council made up of senior executives to oversee Australian Paper’s training andsuccession plans succession plans sustainability goals and targets 19
  21. 21. Environment Fibre sources 21 Biodiversity 23 Water 24 Water treatment 25 Energy and Greenhouse Gas Emissions 26 Transition to National Carbon Offset Standard 28 Waste and Recycling 28 Innovation in Packaging 31 Air Emissions 31 Improving Transport Efficiency through Rail 32 Responsible Product Labelling 33
  22. 22. AUSTRALIAN PAPER sustainability report 2011environmentWhile 2011 was a challenging year, our environmental Our five year FSC® re-certification audit involved threegovernance framework has provided a structure separate physical audits between September 2010for resilience. Moving beyond the requirements of and July 2011, resulting in the renewal of our Chain ofAustralian Paper’s environmental policy to ensure the Custody certification in August 2011.‘effective use of energy, water and materials’, we haveimplemented innovative and effective ways as part Since 2008, Australian Paper has also been Chain ofof our continuous improvement commitment and to Custody certified to the Australian Forestry Standardreduce risk. which is the only forestry standard that is recognised by Standards Australia. The AFS is globally endorsed by theWe intend to maintain this momentum in the coming Programme for the Endorsement of Forest Certificationyears and firmly endure as a successful example (PEFC); the world’s largest forest certification organisation.of environmental innovation in the Australianmanufacturing sector. Chain of Custody certification under the Australian Forestry Standard and FSC® means that Australian Paper’sAs a result of our continuous improvement projects, manufactured products can be tracked clearly from thewe have: origin of the wood source, through the processing phase, and finally, to the end product, ensuring confidence• reduced waste to landfill and subsequently minimised in the responsible management of the entire paper cost – a key measure of sustainability manufacturing and distribution process..• re-engineered waste so that it is useful either in our manufacturing processes or for other uses including The proportion of fibre input sources remained relatively compost unchanged in the last reporting year, with the greatest inputs being plantation fibre and fibre sourced from• significantly increased our renewable energy managed regrowth forests in Victoria. Waste paper production using black liquor and de-inked pulp together comprise around 9% of our• improved effluent treatment and fibre source and in 2011, 52,894 tonnes was used in our• decreased odour complaints. recycled products. Almost two thirds of our fibre is from hardwood andFibre sources softwood plantations, primarily grown in the Gippsland region in Victoria. From early 2012 we also expect to source additional plantation fibre from the closest partsSustainable fibre sourcing remains a focus for Australian of Western Victoria.Paper. Our Future Fibre Strategy outlines plans toincrease plantation and recycled fibre from the current Sustainably managed regrowth forests in the Centralratio of almost two thirds. Highlands of Victoria provide our second largest fibre source. This wood is sourced from VicForests – a stateAustralian Paper is one of the foundation members of government owned enterprise. VicForests, together withFSC® Australia and has been FSC® Chain of Custody the Victorian government’s Department of Sustainabilitycertified since 2006. FSC® certificates are valid for and Environment (DSE) and Department of Primaryfive years and annual surveillance audits are conducted Industries (DPI), is responsible for protecting, conservingto verify continued compliance. and managing areas approved for timber harvesting. VicForests abides by the mandatory legislative requirements and codes of practice set by all tiers of government and was an early adopter of voluntary forest certification. VicForests operations are certified to the Australian Forestry Standard (AFS). 21 environment
  23. 23. total fibre source 504,404 515,073 489,905 536,456 563,942 Key facts 600,000 • 86% virgin fibre is from certified sources 37,177 30,084 500,000 50,746 17,456 • 13% is sourced from saw mill waste 63,581 32,399 19,061 35,438 15,447 36,968 14,971 11,740 32,442 33,403 • 3% is sourced from private landholders 400,000 38,238 tonnes • 85% of fibre sourced was Australian Forestry 300,000 Standard certified 200,000 • 47% is FSC® certified. 100,000 0 390,845 416,438 409,132 450,343 473,871 Is plantation wood more 2007 2008 2009 2010 2011 sustainable than managed wood waste paper de-inked imported pulp regrowth wood? The broader issue of whether plantation wood wood purchased is more sustainable than wood from managed forests is complex. Most major office paper 1,413,411 1,476,586 1,454,784 1,591,907 1,674,684 manufacturers in Europe and North America do 1,700,000 not place an emphasis on plantation sources and 1,600,000 source the majority of their fibre from managed 1,400,000 natural forests, choosing to focus on certification 1,200,000 as the material issue. In this way the whole tree cubic metres can be utilised with high grade wood being used 1,000,000 for sawn timber and low grade wood being used 800,000 for paper manufacturing. The trees are then 600,000 regrown using local seed to maintain biodiversity. 400,000 Certainly from an FSC® perspective, the emphasis 200,000 is on the responsible management of natural forests for wood production. By area, only 8.4% 0 of FSC® certified forests worldwide are plantations. 2007 2008 2009 2010 2011 63.5% of FSC® certified forests worldwide are natural forests and 28.1% are a mixture of natural 6% 35,438 forests and plantations (see: www.fsc.org). fibre inputs 3% tonnes 17,456 tonnes 7% 37,177 tonnes 47% plantation* 262,960 tonnes imported pulps de-inked pulp waste paper managed regrowth* 37% 210,911 tonnes *including sawmill waste22 environment
  24. 24. AUSTRALIAN PAPER sustainability report 2011Biodiversity in forest deemed likely to contain rare or threatened species. If a threatened species is detected during a pre- harvest survey, harvesting operations are managed toAustralian Paper’s ethos is to encourage our fibre ensure habitat for the species is adequately protected.suppliers to protect the biodiversity found inVictoria’s forests. Methods adopted within the pre-harvest surveys are well known and commonly used and tested researchAustralian Paper works with managed regrowth wood techniques. Survey methods continue to be updated andsupplier VicForests to ensure that Victoria’s uniquely refined ensuring an adaptive approach to threateneddiverse forest fauna species are protected through species management.the stringent management of commercial forestrypractices. VicForests values forest biodiversity and all Special Management Zone Plans have been created byoperations comply with the legislative framework that VicForests to appropriately manage operations in areasgoverns sustainable timber harvesting in Victoria. Our where rare or threatened species have been recorded.suppliers adopt the precautionary principle where there These Special Management Zone Plans may result in theis the threat of serious or irreversible damage to the exclusion of harvesting in some areas and modificationsenvironment, in addition to a range of instruments to to harvesting operations in others to ensure adequateprotect biodiversity. suitable habitat is protected. Survey results are forwarded to DSE for addition in the Victorian WildlifeThis framework protects a range of environmental Atlas to improve our understanding of how native faunavalues present in our forests and requires various is utilising our forests.measures to be put in place when harvesting operationsare undertaken. These measures can include: In the future, VicForests will:• Retaining habitat trees to allow for nesting • Continue to investigate the role of regenerating• Retaining seed trees to help regenerate the forest forests as a source of habitat for native fauna• Retain buffer zones alongside rivers, creeks and other • Ensure communication channels are developed and key environmental features, and maintained between DSE and VicForests and other research institutes to ensure a co-operative approach• Retaining additional protection zones where for the management of target species no harvesting is permitted or where harvesting operations are modified. • Continue to review its survey methodology to ensure it remains adaptive and best placed to manageThis legislation also requires the protection of threatened biodiversity in Victoria’s State forests.species and their habitat including Leadbeater’s Possum,listed as endangered on the IUCN Red List. Key facts:Victoria has 4.8 million hectares of National Park and • Around 6% of Victoria’s 7.8 million hectares ofconservation reserves which protect habitat for rare and native forest is available and suitable for woodthreatened species. productionAdditional measures are also used to protect species • VicForests harvests around 5,000 hectares eachand potential habitat in our state forests, including year which is less than 0.07% of the total forestan assessment of all areas prior to harvesting. This • All harvested areas are fully regenerated with theprocess commonly involves the exclusion of forest from original mix of local speciesharvesting. Specific fauna surveys are also undertaken 23 environment

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