2014 SR the Power of Water-final

Message fromthe President and CEO

Dear Stakeholders,

San Roque Power Corporation (SRPC) has come a long way from the start of its journey toward sustainability in 2011. We have gained the momentum to attain our goals with the development and disclosure of a forward-looking Sustainability Roadmap in 2014. You hold in your hands another milestone of ours—our second Sustainability Report, which covers our April 2012 to March 2015 performance. We have chosen “The Power of Water” as its theme, as we bring to the fore the multiple ways by which our business and operations and our main resource

"The Power of Water" brings to the fore the multiple ways by which our business and operations can harness our main resource to greatly benefit and improve the quality of life of many people.

1 San Roque Power Corporation

This page contains the discussion on G4-1.

2014 Sustainability Report 2

can greatly benefit and improve the quality of lives of people—from irrigating farmlands, providing electricity, attenuating floods, and ensuring water quality.

Now more than ever, with global warming on the rise, we also begin to feel that water is a finite resource—and this is where our sustainability agenda becomes critical. I believe that the two-way approach of the Sustainability Roadmap and the Sustainability Report as performance evaluations of the last three years, as well as the concrete greening goals setting up to 2017, provide our Company with a vigorous mechanism to make sure that our sustainability goals remain on-track and attainable and that the triple bottom-line agenda continues to be relevant and urgent to all our stakeholders.

SRPC has to focus on sustainable operations given that the country’s power shortage will continue to weigh on our power plant operations. Our operations solely depend on the natural resource of water; the availability of this vital resource becomes uncertain with the onslaught of erratic weather phenomena. Water is also commonly shared with downstream farmers to irrigate 21,000 hectares of agricultural lands. To complete the multipurpose objective of the San Roque Multipurpose Project (SRMP), we have to strike a balance between multiple variables, which are irrigation, peaking power, flood attenuation, and water quality improvement. What this shows us is that our business and operations are intrinsically linked with the environment and our surrounding communities, and on a broader scale, have a significant and immediate impact on the country’s development goals.

Operational Targets Report

We are pleased to report that SRPC has been able to deliver on its operational targets for the

last three years, achieving 100% power plant availability and reliability—which remain strategic priorities. Our Net Energy Output over the last four years of the reporting period is as follows:

Despite the decrease in the inflow of water, as reflected in our Net Energy Output, we are still able to manage our resources and deliver irrigation and peaking power because of our San Roque Reservoir Operation Rule Curve. Revised in 2013, this Curve enables us to deliver our expected peaking electricity output and our ancillary services, while making sure that the irrigation requirements of farmlands at the lower Agno River are met. Suffice to say, our sustainability thrust allows us to plan for many circumstances, and you can rest assured that we have taken steps to address this decreasing inflow.

NET ENERgY OuTPuT

Year Mega Watt Hour (MWh)

2012 1,097,959.33

2013 943,863.86

2014 853,776.72

2015 704,567.58

This page contains the discussion on G4-1, G4-2 and EU2.


On top of these positive operational strides, as of March 26, 2013, our Company has been providing ancillary services to the National grid Corporation of the Philippines to further improve the reliability and availability of the electricity supply as the country continues on its growth path. These services are regulating reserve, contingency reserve, and dispatchable reserve.

We continued to keep a close eye on revenue generation in relation to contracted capacity and ancillary services. given the provision in our Power Purchase Agreement with the Philippine government through the National Power Corporation, which states that the revenue on the contracted capacity will gradually decrease throughout the cooperation period and that the implementation of ancillary services will be limited to five years, we are very keen on ensuring the continued optimization of generated revenue without compromising the supply of irrigation and other objectives of the San Roque Multipurpose Project.

Sharing Economic Values

Our economic performance has certainly contributed to the growing economy of our local communities and the national economy. Over the last three years, we paid a total of ₱132 million in business taxes to the host local government units (Lgus), on top of income taxes amounting to ₱3.6 billion paid to the national government.

We also made advanced payments on the real property tax worth ₱48,905,279.72 to the Lgus of Pangasinan, San Manuel, and San Nicolas. All taxes were paid accurately and on time, and we strictly adhered to the internal and external reviews of financial regulations set forth by both the Bureau of Internal Revenue and the Lgus.

Meanwhile, our fence-line communities of San Manuel and San Nicolas have become first-class municipalities. Through our Community-Driven Enterprise Development approach, we have been able to help increase the average gross household monthly income of the Microfinance Project members from ₱5,000 (NPC SES, 2010) to ₱20,423, which is 2.59 times more than the ₱7,890 national monthly household poverty threshold for a family of five (National Statistical Coordination Board, 2012).

We also complied with the payment of the Energy Regulations (ER) 1-94, which are the financial benefits accruing to the host communities of power-generating projects. For the reporting period, our Company contributed ₱26,199,984.00 to the fund. The fund is paid to the Department of Energy as a trust fund that the Lgus of Pangasinan, Benguet, and the municipalities of San Manuel, San Nicolas, and Itogon, and 10 barangays within the said municipalities can access for electrification, development and livelihood, reforestation, watershed management, health, and/or environment enhancement.

Promoting Sustained Stewardship

We sustained the implementation of our Environmental Management and Monitoring Plan, allowing us to safeguard surrounding ecosystems and biodiversity and promote environmental stewardship to a broader base of stakeholders.

One of the highlights of our environmental sustainability agenda is the successful reforestation within the SRMP Watershed Area, with a total production and planting of 201,814 trees in an aggregate area of about 400 hectares over the last four years. The San Roque Dam, with its 645 million m3 combined active storage and flood surcharge provisions, has also helped



our commitment to exemplary health, safety, and environmentally sound practices, the advancement of human resources, the highest ethical standards of good corporate citizenship, and strategic social investment will remain intact.

With our Roadmap in place, we have in our hands the guide to addressing key sustainability concerns and issues throughout our value chain, so that programs and initiatives at the most basic units contribute to our Company’s overall vision. Our initiatives are also aligned with international best practices regarding dam/hydroelectric power plant operations and maintenance, environmental protection, human resource development, and corporate social responsibility. As such, I am confident that I leave behind and turn over to the capable hands of my successor a leading, self-sustaining renewable energy Company facing a bright, energized future.

Ryukichi KawaguchiPresident and CEO

attenuate the perennial flooding in the 16 municipalities along the Agno River, based on feedback from the settlers.

Empowering All Stakeholders

Throughout our work, we continuously adhere to Occupational Health and Safety standards for all employees, contractors, and communities. A healthy workforce and a safe working environment will create more efficient, more productive sustainability champions.

Stakeholder engagement is also an ever-present initiative, and we have mechanisms that engage the multitude of stakeholders at every step in our value chain so that we can fulfill all our social, environmental, and economic obligations. We begin with our internal stakeholders, monitoring their development and implementing exemplary training programs that promote professional advancement and personal welfare, for SRPC is committed to improving the lives of its employees and helping them achieve their goals and aspirations for their family.

Similarly, we take into consideration and protect the interests of our various external stakeholders as we improve our performance, because we know that our operations can significantly affect the development goals and the quality of life not only in our surrounding communities or the provinces of Pangasinan and Benguet, but also ultimately all over the country.

My Heartfelt Gratitude to All

This Report marks my final year as President and CEO of SRPC. It has been a long and rewarding journey, one that has borne fruits that we all can be proud of, and I am happy that there will be much that I will miss about this Company when I leave. I am assured, however, that with sustainability embedded in our operations,



The San Roque Power Corporation published its first Sustainability Report in March 2012. The aforementioned Report outlined the Company’s performance and plans for enhanced corporate value,

effective environmental stewardship, and dynamic and productive relations with stakeholders. This was followed by a Sustainability Roadmap that identified key initiatives to address the gaps in SRPC’s triple bottom-line performance. This 2014 Report anchors to both the 2011 Report and 2014 Roadmap. It features the Company’s performance from April 2012 to March 2015, and serves as a benchmark of the Company’s progress on its sustainability journey. The Company will report on this journey every two years.

This Sustainability Report, which adheres to the global Reporting Initiative’s (gRI) g4 Electric utilities Sector Disclosure (EuSD) guidelines, follows the "in accordance - comprehensive" criteria. The Report only covers the power generation component of the San Roque Multipurpose Project (SRMP). SRMP’s other features—irrigation, flood attenuation, and water quality improvement—are the concerns of different government agencies. Regarding the aspects of biodiversity and habitat protection, the coverage of this Report is not confined to the immediate San Roque Watershed area, as it extends to the Lower Agno Watershed. The Report also discusses the Corporate Social Responsibility (CSR) programs of the San Roque Power Foundation, Inc. (SRPFI), the Company’s Corporate Social Responsibility implementing arm.

The Company engaged the services of the university of Asia and the Pacific with regard to technical assistance and assurance services for this Report. The External Review Committee (ERC) comprises experts on economics, environment, society, labor, and human rights. They evaluated SRPC’s disclosures and validated

About the Report


About the Reportits performance based on gRI g4 principles on report content, disclosure requirements, and reporting boundaries.

Materiality

The principle of materiality was used in testing SRPC’s economic, environmental, and social performance, based on the applicable key performance indicators. It contains the Company’s sustainability performance from April 2012 to March 2015, according to data gathered from all of the Company’s departments. This Report also records the results of the Focus group Discussions conducted with the stakeholders on issues they considered worth including here.

The following are the material aspects identified in the process for defining report content:

Economics • Economic performance • Economic value generated and distributed • Direct and indirect economic impacts • Availability, reliability, and efficiency of energy produced

Environment • Compliance • Energy • Water use and monitoring • Biodiversity and habitat protection • Effluents • Waste management

Social • Compliance • Human resource profiling • Safety • Labor relations • Policies on suppliers procurement practices • Security practices • Stakeholder participation

• Community development programs • Disaster and emergency planning

We welcome your feedback on the Report. Please address any questions regarding the content of the Report to:

Sustainability Technical Working groupSan Roque Power CorporationSan Roque, San Manuel 2438Pangasinan, Philippines

E-mail: [email protected]

This 2014 Report anchors to both the 2011 Report and 2014 Roadmap. It features the Company’s performance from April 2012 to March 2015, and serves as a benchmark of the Company’s progress on its sustainability journey.



The San Roque Power Corporation (SRPC or the Company) is responsible for the operations and maintenance of the power generating facility of the San Roque Multipurpose Project (SRMP) for 25 years

effective May 1, 2003.

A private company jointly owned by Marubeni Corporation and Kansai Electric Power Company Ltd., with an equal sharing of 50%, SRPC is organized under Philippine law and headquartered in Pangasinan, Philippines. The Company has been registered with the Philippine Securities and Exchange Commission (SEC) since October 14, 1997. It is a stock corporation incorporated in the Philippines in accordance with the Corporation Code of the Philippines and the Foreign Investments Act of 1991.

SRPC’s sole customer is the National Power Corporation (NPC), to whom it has been fulfilling the stipulation of delivering the contracted capacity since operations began. As an operator bound by the Power Purchase Agreement (PPA), the San Roque Hydroelectric Power Plant (SRHEPP) generates power based on the contracted capacity. The operation of the SRHEPP is determined by the San Roque Reservoir Operation Rule Curve (for more information on the Rule Curve, see page 15).

The Company is only bound by contract to the NPC in operating and maintaining the dam and powerhouse. It is also bound by contract to the National grid Corporation of the Philippines (NgCP) in providing ancillary services to the Luzon Power grid. It coordinates closely with the NPC, the Strategic Power Development Corporation (SPDC), and the NgCP, ensuring that dispatch instructions are followed through daily interaction and open communication. This, along with the assistance of other government agencies, helps SRPC meet its four objectives.

SRPC at a GlanceCompany Name: San Roque Power CorporationPrincipal Address: Barangay San Roque, San Manuel, 2438 PangasinanAdministrative/Business Address: 36th Floor Tower 1, The Enterprise Center 6766 Ayala Avenue, Makati CityCountry of Operation: PhilippinesPlant Operation Hours: Eight (8) hours daily, from 9:00 a.m. to 3:00 p.m. and from 6:00 p.m. to 8:00 p.m. Website: www.sanroquepower.ph


SRPC at a GlanceSRPC is not a power distributor—hence, the Company does not directly engage customers in any way, such as in matters of customer accounts, disconnection for non-payment, and regulations on transmission and distribution lines. It can neither influence power prices nor be affected by the electricity's price volatility in the market. It also does not engage in marketing or advertising or promotions, so there can be no violations of regulations and voluntary codes on the matter, no fines for such violations, and no customer complaints regarding breaches of privacy and loss of data.

While it has never conducted a customer satisfaction survey, the Company nevertheless maintains good working relationships with its stakeholders, the NPC, and the other agencies involved in the project and the power industry through regular engagements. Since the start of the power plant operations in 2003, the Company has complied consistently with the PPA.

Corporate Value Chain

SRPC has committed itself to the central vision of being “The Power to Energize Lives.” Its entire operation seeks to fulfill this mission and is guided by its Corporate Value Chain with component activities that include Operations, Engineering, Maintenance, Plant Systems and Communications, Finance and Accounting, Purchasing, Human Resources Management, Occupational Safety, Environmental Compliance, Corporate Social Responsibility, and Ancillary Services.

The goal of the Corporate Value Chain is the effective operation and efficient delivery of electric power and other services, thereby promoting corporate sustainability. It evaluates the most cost-effective and -efficient strategy available to the Company, which should be able

to bridge the gap between the goals and current state of the organization. After determining the most appropriate strategy based on the organization’s goals and status, it formulates plans and programs that ensure proper task delegation and timely delivery of output. Considerations include activities, responsibility centers, time frame, budget, and assumptions and risk mitigation.

The Corporate Value Chain also provides information on inter-departmental functions, concerns and issues that serve as bases for designing strategies, plans, and programs to improve organizational efficiency in achieving goals. The basic deliverables of each corporate department are outlined by defined departmental functions provided under the organizational structure’s terms of references. Hence, inherent to each departmental function is the need for lateral collaboration in order to deliver tasks. Each department designs, commits, and adheres to departmental targets as a way of contributing to the said goal.

Inter-departmental collaborations often give rise to concerns (and sometimes cross-functional issues) brought about by reasons of control, responsibility, and accountability. These concerns and issues are addressed by policies, systems, and procedures (PSPs) that are recommended and approved by Management.

SRPC Supply Chain

The SRPC supply chain involves suppliers of spare parts and services needed for the maintenance of the equipment used in power generation; service contracts are synchronized with plant activities. The timing of the Purchase Request and the efficiency in buying/sourcing out such items/services, is integral to the plant's continuous and reliable operations.


Previously, the Purchasing Department handled supplier assessment. For greater efficiency, the Company partnered with third-party vendor accreditation expert Duns & Bradstreet Philippines (D&B) in March 2014. The suppliers’ assessment criterion was agreed upon by SRPC and D&B during the contract negotiation. All suppliers undergo the assessment; those found to have illegal or erroneous documents or to lack the financial capability to support their operations are not accredited.

Principles and Initiatives

SRPC subscribes to a number of externally developed economic, environmental, and social principles. Compliance-based examples of such include the PPA as an economic principle and the Environmental Compliance Certificate for both environmental and social principles.

The direct and indirect economic impacts on the local economy of San Manuel and San Nicolas in Pangasinan, and in Itogon, Benguet are anchored in livelihood and enterprise programs that are guided by the principles of: access to financial capital, provision of technical assistance and capacity building, institution-building, and livelihood-support goods and infrastructure projects.

The San Roque Power Foundation, Inc. is SRPC’s implementing arm for CSR programs, projects, and activities. These are funded based on the Company’s CSR frameworks, the three-year Strategic Social Investment Program (SSIP) and Annual Work and Financial Plans (WFP). Here are some of the Foundation’s initiatives, partnerships, and programs.

Specifically under environmental sustainability, it supports the National greening Program (NgP) of the Department of Environment and Natural Resources (DENR), the Philippine Eagle Program

with the Philippine Eagle Foundation, Inc. (PEFI), and the bird and wildlife conservation programs and establishment of a tree library/arboretum with NPC and DENR.

under social sustainability, it has a Partnership Program for livelihood and enterprise development with the Department of Social Welfare and Development (DSWD) and local government units of San Manuel, San Nicolas in Pangasinan and Itogon, Benguet. It also has a Memorandum of Agreement with the Department of Education and Synergeia Foundation on proficiency enhancement for English, Mathematics, and Science; partnership with the Technical Education and Skills Development Authority, Provincial Employment Service Office, and Nippon Skilled Volunteers Association on community-based skills training. It also undertakes health programs in cooperation with the Philippine Red Cross.

SRPC and the Foundation also undertake economic, environmental, and social initiatives that are anchored on internationally accepted principles such as the principles of the uN Millennium Development goal and the uN global Compact, and the approaches on Sustainable Livelihoods and Community Driven Development.



Without water, there can be no life. understanding this, SRPC fulfills its vision “The Power to Energize Lives”by harnessing the power of water to bring a fuller spectrum of its life-

giving benefits to a greater number of people. Through the San Roque Multipurpose Project, water in the San Roque Reservoir is able to deliver the benefits of farmland irrigation,

the provision of peaking power, flood attenuation, and the improvement of water quality.

Harnessing the Power of Water: The San Roque Power Corporation

This report covers the performance of the power-generation component only. The other features of the SRMP are the concerns of the different government agencies.

With a holding capacity of 525 million cu.m. in active storage, and 120 million cu.m. as flood surcharge,

the SRMP stores inflow from heavy rains and effectively

provides attenuation mechanism to the perennial flooding of the Agno River. The reservoir also regulates the volume of water that will be released downstream for minimal impacts on the 16 communities at the Lower

Agno.

The reservoir’s substantial dead storage traps

sediments transported by typhoon debris, slope erosions, or the tailings from small-scale mining activities upstream. By

serving as settling basin for these foreign objects, SRMP improves the quality of the

water that reaches users downstream.

Flood Attenuation Water QualityImprovement

Around 21,000 hectares of farmlands in Pangasinan are irrigated throughout

the year through the SRMP. The National Irrigation

Administration serves as lead agency for this objective and coordinates with the

National Power Corporation.

Farmland Irrigation

SRPC operates and maintains the power-generating

facility of the SRMP. As a hydroelectric power plant,

SRPC addresses the peaking power requirements of the

Luzon Power Grid with clean and renewable energy. Its 411MW installed capacity

can produce approximately 1,000GWh annually.

Peaking Power

San Roque Multipurpose

Project


SPILLWAy

SAN Roque dAM

AGNo RIveR

Features of the Spillway

Type: Open chute – gatedCrest level: 270 maslDesign capacity: 12,800 m3/sec

Features of the Reservoir

Active Storage: 525 MCMDead Storage: 310 MCMFlood Cushion: 120 MCM (Elev. 280-290 masl)

EL. 100.00m

EL. 295.00m EL. 280.00m

225.00mLow Water Level

Normal High Water Level

Intake of Power Tunnel

Probable Maximum Flood

290.00m


PoWeR TuNNeL

PoWeR houSe

SuRGe TANk

LoW LeveL ouTLeT

To Re-ReGuLATING PoNd

The Power Behind the Power of Water: The San Roque Multipurpose Project

The San Roque Multipurpose Project has four main objectives: irrigation, peaking power, flood attenuation, and water quality improvement. The National Irrigation Administration (NIA), in cooperation with the NPC, is the lead agency for the year-round irrigation of 21,000 hectares of farmland in the province of Pangasinan. SRMP is also designed to attenuate the perennial flooding of the Agno River, with the NPC giving the orders regarding the appropriate spillway openings to mitigate the effects on at least 16 towns. To help improve the quality of the water at the Lower Agno River, the reservoir acts as a stilling pond and traps sediments transported from upstream slope erosions and tailings from mining activities. Lastly, as a hydroelectric power plant, the SRHEPP helps to fulfill the Philippines’ peaking power requirement, thus contributing to the reliability and security of the Luzon Power grid.

Features of the dam

Type: Rock fill (clay core)Max height: 200 metersCrest level: 295 maslLength: 1.13 kilometers

Features of the Turbine

Turbine Type: Vertical Shaft FrancisNumber of Units: 3Total Rated Capacity: 411MWMax. Discharge: 260 cubic meters per second (cms)


Powering Luzon at Peak Hours:The San Roque Hydroelectric Power Plant

The San Roque Hydroelectric Power Plant has an installed capacity of 411MW and annually produces approximately 1,000gWh of renewable peaking energy. Its Power Purchase Agreement stipulates a contracted capacity of 110MW, which is supplied to the Luzon Power grid. Since the completion of the NIA’s re-regulating pond in July 2013, the SRHEPP began operating only during peak hours as the storage in the pond can satisfy the daily irrigation requirement of the NIA.

The designated peaking hours are from 9:00 a.m. to 3:00 p.m. and from 6:00 p.m. to 8:00 p.m. The SRHEPP uses a 230-kV Transmission Line traversing the nine-kilometer distance from the power plant to San Manuel Substation. The line spans 25 steel towers and two-bundle double circuit conductors equipped with advanced protection and communication systems for power transmission.

The SRHEPP is an accredited ancillary services provider and has an Ancillary Services Procurement Agreement (ASPA) with National grid Corporation of the Philippines. Ancillary services support the transmission of capacity and energy from resources to loads while maintaining reliable operation of the transmission system in accordance with good utility practice and Section 4 (b) on the Electric Power Industry Reform Act (EPIRA) in the Philippine grid Code. under

the EPIRA, the NgCP is mandated to ensure and maintain the reliability, adequacy, security, stability, and integrity of the nationwide electrical grid and to adequately serve generation companies, distribution utilities, and suppliers requiring transmission service and/or ancillary services through the transmission system. These ancillary services are:

• Regulating Reserve – generating capacity needed to balance the supply (generation) and load in real time (seconds to minutes) due to fluctuations of either load (switching on/off) or generation (ramping up/down). • Contingency Reserve – insurance generating capacity necessary to adjust automatically in response to sudden reduction of generation output or tripping of generation unit. • Dispatchable Reserve – insurance generating capacity necessary to replenish the Contingency Reserve.

It was on January 18, 2013 when the NgCP and SRPC filed an application for the approval of the ASPA for the issuance of provisional authority with the Energy Regulation Commission (ERC).This is in reference to ERC CASE NO. 2013-009 RC approved on March 4, 2013 and starting effectively on the next billing period from the receipt of the order. There were incidents of non-compliance with regulations regarding the ancillary services when the SRHEPP began offering to the grid and to the NgCP in 2013. This happened for the first six months of that year, as the Company was still learning the trade.

NgCP’s National Control Center is responsible for issuing dispatch instructions for power generation. SRPC only generates power based on the requirements of the PPA and the electricity is transmitted by the NgCP to the distribution utilities (Dus) and subsequently distributed and sold by the Dus to the consumers.

CONTRACTED CAPACITY

Period

85MW May 1, 2003 to May 24, 2008

95MW May 25, 2008 to May 24, 2013

110MW May 25, 2013 to May 24, 2017

115MW May 25, 2017 to April 30, 2028

This page contains the discussion on EU4.


Since the beginning of its operations, the power plant has never exceeded its annual allowable downtime of 15 days, which cover either scheduled maintenance or allowable forced outage due to an event or occurrence of force majeure. It utilized an average of nine days for the regular maintenance and power tunnel inspection. With this, it maintained 100% reliability and 97.53% availability in power generation.

SRPC submits an Annual generation Report to the ERC. The Strategic Power Development Corporation, which became the Independent Power Producer Administrator for SRPC’s Build-Operate-Transfer contract on January 26, 2010, trades SRHEPP's capacity to the Wholesale Electricity Spot Market (WESM). The Net Energy Output for 2012 to 2015 is broken down as follows:

NET ENERgY OuTPuT

Year Mega Watt Hour (MWh)

April 2011 to March 2012 1,097,959.33

April 2012 to March 2013 943,863.86

April 2013 to March 2014 853,776.72

April 2014 to March 2015 704,567.58

SPdCIPPA

IPP

Continue to administer the contract

Bids the plant into the market and receives revenuesDispatches according to the AARegistered WESM participant

NGCP(systemoperator)

•

••

PoWeR PuRChASe AGReeMeNT (PPA)

Ancillary Services Procurement Agreement (ASPA)

Generates power for delivery to WESM

Bids powerinto WESM

PoolRevenue

Bilateral ContractsAdMINISTRATIoN AGReeMeNT (AA)

Distribution Utilities andBulk Users

This page contains the discussion on G4-9 and EU2.


manage the efficient use of the reservoir to meet irrigation and energy demands as well as flood attenuation, as set forth by the Multipurpose Project.

According to the Rule Curve, if the water level of the reservoir is above the upper Rule Curve after satisfying the requirements for irrigation, contracted capacity, river flow maintenance, and municipal water supply, then additional water releases for power generation are allowed provided that they will not affect the operation plan.

Once the water level is below the upper Rule Curve, releases shall be limited to the requirements for the contracted capacity or the total requirements for municipal water supply, irrigation, and river flow maintenance, or whichever of the two is higher.

The Reservoir Rule Curve was agreed upon by the NIA, the NPC, and SRPC and approved by the National Water Resources Board (NWRB). It was revised and adopted in August 2013 in consideration of the completion of the NIA

The planned per unit maintenance outages, provided for in the PPA, did not result in total power interruption. It still delivered its contracted capacities, ancillary services contracts, and scheduled energy. During the reporting period, it had seven interruptions with a total duration of 9.387 hours. given that the NPC handles contracted capacity, the NgCP handles the Ancillary Services, and the SPDC handles the other energy output, power outage frequency is pegged at 2.33 hours. The average power outage duration is 3.129 hours.

The San Roque Reservoir Operation Rule Curve sets necessary operational guidelines to

SAN ROquE RESERVOIR VS RuLE CuRVECY 2012, 2013 and CY 2014 Level

290

280

270

260

250

240

230

220

1-Apr 1-May 1-Jun 1-Jul 1-Aug 1-Sep 1-Oct 1-Nov 1-Dec 1-Jan 1-Feb 1-Mar 1-Apr

Re

SeR

vo

IR L

ev

eL,

mas

l Legend:

Lower Rule Curve

Upper Rule Curve

2012

2013

2014

PLANT AVAILABILITY FACTOR

Year Availability Percentage Downtime Duration2012 96.67% 5 days, 7 days, and 1.32

hours allowable downtime in May, June, and December, respectively

2013 97.25% 0.15 hours, 4 days, and 6 days downtime in April, May, and June, respectively

2014 98.66% 5 days downtime in May

This page contains the discussion on G4-8, EC2 and EU30.


re-regulating pond. It is a critical guideline and mechanism so that SRPC is able to fulfill the various objectives of the Multipurpose Project and alleviate the concerns of stakeholders regarding possible negative impacts brought on by extreme weather, such as possible deep flooding from frequent heavy typhoons or compromised energy generation output and irrigation due to low water inflow and below “normal” water reserves. The Company works with the NPC and the NIA in following the NWRB-approved Rule Curve. Thus, the three agencies conduct annual audits to determine if the Rule Curve is being followed.

Third Party Risk Assessments

The Company utilizes third party evaluations and monitoring to assess possible risks that can affect its operations. The risk assessment includes possible impacts on the Company and its existing control measures.

Below is a list of third parties who evaluate the site, the dam, its safety measures, finances, and other related practices, policies, and aspects. The list also includes the type of evaluation and frequency conducted or previous year/s conducted.

PhIvoLCS: Monthly Monitoring of the Seismic System. SRPC's Seismic System includes a micro seismic array, a strong motion array, and a master recording station, and these have been installed within and around the vicinity of the Project. The micro array consists of four remote stations and the strong motion array consists of five remote stations; each remote station is linked via satellite communications to the master station. One of the five strong motion remote stations was converted into a PHIVOLCS “Alpha Station.” PHIVOLCS installed a broadband seismic instrument sponsored by JICA at Seismic Station 09. This instrument is capable of detecting micro

earthquakes as well as tectonic earthquakes of distant origin. This instrument is used to improve the location of local events in the San Roque Dam site. The international station code of this broadband station is “SMPP,” which is directly monitored from their Central Receiving Station. A Memorandum of Agreement between SRPC and PHIVOLCS states that the latter's technical personnel will render consultancy services with respect to the monitoring and maintenance, downloading, collection, and interpretation of seismic data generated by the System. PHIVOLCS analyzes the data and provides SRPC with reports and summaries.

NPC: Semi-annual Inspection. For the reporting period, this inspection was regularly conducted by the Dams, Reservoirs, and Waterways Division under the Dams Management Department of the NPC. This inspection serves to check the physical working conditions of the non-power components of the Project in accordance with the Dam Safety Program. It aims to determine the behavior of the dam and its appurtenant structures in order to identify deficiencies by means of a thorough visual inspection and a review of monitoring data. The NPC benchmarks their findings on the facilities of San Roque Dam, which they then adopt in the operations of the other dams they own. SRPC often rectifies observations and recommendations.

Allianz Risk Consultants: Biennial Insurance Risk Surveys. The survey conducted in 2012 and 2013 by Allianz Risk Consultants were for loss prevention. Allianz evaluates the possible risks to property and potential business interruption at the plant and recommends measures to prevent these. Based on their findings, the SRHEPP was rated above average because it properly implemented all of Allianz’s recommendations. As a sign of good faith, Allianz decided in 2014 to conduct the Risk Survey every two years, beginning 2015.


PSALM/Malayan/GSIS/NPC: Risk Surveys. The surveys were conducted in 2012 and 2014 for the non-power components insured by the Power Sector Asset and Liabilities Management Corporation (PSALM). The objectives of the survey are to review important aspects of risk management and property loss control in relation to power generation operations and maintenance; to produce an underwriting survey report to assist in the placement of machinery breakdown and business interruption insurances; and to provide risk improvement recommendations, if appropriate. They use the findings they gather from the Company as a benchmark in the survey of other PSALM-owned facilities.

Lajmar Management and Technologies (2013)/People 360 (2014): Third Party Safety Audit. This audit was conducted to evaluate and assess SRPC's compliance with Occupational Safety and Health (OSH) Regulations. They reviewed SRPC’s Safety Program, Document Standards and Procedures, and conducted interviews with employees.

People 360: Inspection, Testing, and Certification of heavy equipment. This 2014 audit was conducted on the crane, hoist, and other lifting equipment installed at the facility. Findings and observations were documented and discussed in a meeting.

dam/hydro Independent experts: demi-decade Inspections. Every five years, independent civil, dam, and electro-mechanical experts conduct an inspection of the SRHEPP to evaluate its reliability in terms of the operation and maintenance of the dam and power plant. They make the necessary assessments and recommendations to further improve the operations and maintenance of the SRHEPP. The last inspection was conducted in 2013.

eRC: demi-decade Site Inspection. Every five years, the Certificate of Compliance (COC) is renewed. ERC conducts site inspections for the verification of reportorial requirement submissions against the plant’s actual operation and maintenance records. The last inspection was conducted in 2014.

SRPC acts on these recommendations immediately so that whatever potential risk discovered will not remain an underlying issue during the next survey or audit. After all the data from these surveys and inspections are turned in, the Company makes a study on how to address the recommendations of the third parties and comes up with the design of the suggested structures.

As to the implementation of the third party-recommended projects, the Company allocates a budget and outsources contractors to undertake these. Most of the results of these surveys and audits are commendations on our procedures and practices.

It is worth noting that the Company observes and adopts Japan International Standards (JIS), uS Bureau of Reclamation (uSBR) standards, and International Commission on Large Dams (ICOLD) Dam Safety Standards and Procedures. The Company has developed an Emergency Action Plan (EAP) as required of the Environmental Compliance Certificate by the Department of Environmental and Natural Resources. SRPC conducts tabletop drills on the EAP’s Notification Flowchart and Information Education Campaign annually, after which any update required are incorporated to the EAP.


A year into the Sustainability Roadmap Project, the San Roque Power Corporation reviews how far it has gone.

On the Course of a Sustainable Future


Sustainability is quite the buzzword these days, going hand-in-hand with ‘greening’ in order to combat climate change and protect what remains of the world’s resources.

The concept of sustainability has evolved from its original scientific context, becoming more urgent for more societies and industries, so that it now pervades many different fields. It is the job and even in the best interests of the world at large to make sure that this word stays relevant for a long time. According to the World Business Council for Sustainable Development (2010), “There is no longer a choice between economic growth and environmental well-being: they are interdependent, and if we do not make sure we have both, we risk ending up with neither.”

One such company in the Philippines that recognizes this urgent concern is the San Roque Power Corporation. The Company’s primary raw material—water—depends largely on the state of environment and the reliability of natural cycles, both of which are being affected by global warming.

In 2011, the Company released its first Sustainability Report, which opened its eyes to better ways of working so that it enhances its value while protecting the planet and promoting the interests of a greater majority. With international best practices as its benchmark, sustainability became an ongoing journey for the Company and it became inevitable, that on the road to becoming a world-class corporation, SRPC would strive to do better than its first effort.

Two years later, the Report, a milestone for the Company, would be followed by the SRPC Sustainability Roadmap Project, a three-year initiative beginning April 2014 and ending March 2017.

The Roadmap Project was headed by the Sustainability Council and facilitated by a Technical Working group (TWg), which was made up of the Vice President for Corporate Social Responsibility and the Department Managers.

A roadmap is “a detailed plan to guide progress toward achieving a goal,” according to the Merriam-Webster Dictionary. The SRPC Roadmap’s goals, as established by the TWg, are thus:

• Develop a uniform Company-wide understanding of SRPC’s direction and align strategies, and • Improve processes in each department, allocate resources properly, and measure performance.

With the goals established, a hefty challenge lay before the TWg—how does one turn different problems from various departments into strengths? And how best to utilize those strengths in order to attain the ultimate goals of greening and sustainability?

The SRPC Sustainability Roadmap tries to address these questions by breaking down the issues, goals, and strategies pertaining to SRPC’s Operations, Plant Systems and Communications, Engineering, Maintenance, Safety, Accounting and Finance, Purchasing and Administration, Human Resources, and Corporate Social Responsibility aspects. It also serves as evaluation metrics throughout the entire duration of the Project.

Each draft of each departmental Roadmap was reviewed by an external and independent panel of experts in the fields of renewable energy, corporate social responsibility, environment, and economics. There were three workshop sessions conducted by the university of Asia


Aspect/Department Details Actual Performance Target Completion Period

2014 2015 2016 2017

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Timely, accurate operational response

Right mix of water utilization

End-user compliance with security measures

Available, reliable dam monitoring instrumentation

Timely project implementation and completion

Optimum service life

Adequate stock levels

Sustained, proactive safety culture

Safe, proactive contractor base

Compliance with tax regulations

Accuracy of voucher processing

Timely check availability

Optimized potential of sufficient cash

Environmental protection through responsible stewardship

Sustained social acceptability

Formal, integrated talent management and succession plan

Accurate, timely processing

Optimized supplier base

Available, reliable communications system

Reliable, up-to-date plant control systems and programmable logic controllers

and the Pacific at the SRPC office in San Manuel, Pangasinan, during which the drafts were refined.

Staying true also to the gRI’s standard of balance, the SRPC Sustainability Roadmap also identified the factors that could bring the entire initiative down the road of failure, namely: lack of management and employee commitment, participation, and support; lack of an incentive mechanism to ensure engagement; poor implementation of policies; and lack of understanding or appreciation of the goals and significance of the Roadmap. It was also added that the latter could be exacerbated by the erroneous perception that following the guidelines laid down by the Roadmap may mean additional expenditures and workload.

But this doesn’t mean that what’s written on the Roadmap is set in stone. The Management and the TWg has been reviewing and monitoring progress every three years, thus ensuring that goals are updated, developments are recorded, and issues are addressed as they arise.

And now, with first year of the Roadmap wrapped up, how much progress has the Company made?

oPeRATIoNS

eNGINeeRING

MAINTeNANCe

SAFeTy

ACCouNTING

huMAN ReSouRCeS

PuRChASING ANd AdMINISTRATIoN

PLANT SySTeMS ANd CoMMuNICATIoNS

CoRPoRATe SoCIAL ReSPoNSIBILITy


Aspect/Department Details Actual Performance Target Completion Period

2014 2015 2016 2017

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Timely, accurate operational response

Right mix of water utilization

End-user compliance with security measures

Available, reliable dam monitoring instrumentation

Timely project implementation and completion

Optimum service life

Adequate stock levels

Sustained, proactive safety culture

Safe, proactive contractor base

Compliance with tax regulations

Accuracy of voucher processing

Timely check availability

Optimized potential of sufficient cash

Environmental protection through responsible stewardship

Sustained social acceptability

Formal, integrated talent management and succession plan

Accurate, timely processing

Optimized supplier base

Available, reliable communications system

Reliable, up-to-date plant control systems and programmable logic controllers

100%

90%

50%

35%

70%

80%

50%

80%

70%

80%

98%

98%

70%

80%

98%

80%

85%

50%

100%

SRPC is dedicated to upholding the highest standards of good corporate governance to protect the Company’s reputation and the interests of all its stakeholders. This includes involving

employees in a clear decision-making process, transparency and regularity with regard to reporting to shareholders and stakeholders, and identifying and managing risks associated with its operations.

Governance Structure

The Board of DirectorsThe SRPC Board of Directors (Board) comprises seven directors and a Board Secretary, three officers from Marubeni Corporation, three from Kansai Electric Power Company Ltd., and one independent member who serves as the chairman with non-executive functions. This arrangement ensures the check and balance in all policy decisions and business transactions of the Company. The independent member of

GovernanceSRPC upholds the principles of good governance to protect its corporate value, the productivity and morale of its workforce, and the integrity of its resources.

San Roque Power Corporation

President and CEO Senior Vice Presidentfor Technical Matters

Senior Vice Presidentfor Operations and Site Administrator

Vice President, Treasurer, andChief Finance Officer

Engineering and Operations

RyukIChI kAWAGuChI kATSuToShI AGuRo

WILLIAM CoNNeLL

CARLoS M. eChevARRIA RAyMuNd N. MARIANo

Vice President forCorporate Social Responsibilityand Security

ToMMy T. vALdez

23

This page contains the discussion on G4-34 and G4-38.

Purchasing andAdministration

MARITA L. eBojoHuman ResourcesMA. RhoNA LIzA j. APIL

Governancethe Board is neither a member of the Executive Management Team nor an employee of any of the shareholders. The members of the Board are carefully selected based on their integrity and competence in business and in the power industry.

The Board is responsible for providing strategic guidance and effective oversight over the Company’s management, including the control and accountability systems. The Board is in charge of appointing the President and CEO and other officers, and ensures that strategic plans and programs of the Company are executed. The Board is also responsible for approving corporate strategy, providing appropriate resources in carrying out the same, and approving major capital expenditures and in monitoring financial and other reportorial requirements.

The directors of the Board elect the President and CEO and appoint the Board Secretary and the Vice Presidents. The directors are elected during

the regular meeting of the shareholders and have a one-year term of office until their successors are elected.

Inquiries and deliberations on key economic, environmental, and social concerns and the Board’s performance are conducted during the annual meetings at the end of the fiscal year. Recommendations are duly provided by the President and CEO with consultation from concerned Vice Presidents.

Management formulates or revises directives and policies. These are issued for the strict observance of employees.

The Company has adapted certain policies and guidelines that lay down the limits of power and authority in the organization’s hierarchy.

The Executive Management TeamThe President and CEO heads the Executive Management Team (EMT), which is the think

24

Maintenance Operations

Plant Systems andCommunications

edGAR ALLAN F. vILLeGAS RuBeNTheo P. CuTA

MARCeL P. ABLoG

Accounting and FinanceRheeNA LIzA d. de GuzMAN

2014 Sustainability Report

This page contains the discussion on G4-38, G4-39, G4-40, G4-44, HR3, SO3 and SO4.


tank of the organization. The other members of the Executive Management Team are two Senior Vice Presidents, one for Operations and Site Administrator and another one for Technical Matters; and two Vice Presidents each for Finance, and Corporate Social Responsibility and Security.

The EMT ensures that the Company is managed according to its vision and mission. With the goal of maintaining the balance between being a world-class energy producer and a socially responsible corporate neighbor, the EMT lays down the blueprints for company strategies, policies, plans, and programs.

The Board of Directors exercises the highest level of governance while the President and CEO sees business operations through. The President and CEO reports directly to the Board while the Vice Presidents report to the President and CEO.

Task Delegation

Executive-level employees handle key responsibilities for addressing economic, social, and environmental concerns raised within the organization. Economic and financial matters are seen to by the Vice President for Finance, in close coordination with the Senior Vice President for Operations. The Vice President for Corporate Social Responsibility oversees the management of social concerns and security. Environmental concerns are also tackled by the Vice President for Corporate Social Responsibility in close coordination with the Senior Vice President for Operations. They report directly to the President and CEO, who will decide on the action/s for each specific concern.

When delegating the work that goes into addressing certain specific issues that affect the organization, the Company follows these steps:

• Task identification and profiling. SRPC has in place a top-down and bottom-up feedback system that identifies potentially problematic situations. These are then profiled by determining the cause(s), selecting a cost-effective solution, and deciding on the strategy where the said solution can be effectively implemented. using this framework, SRPC Management determines first which tasks can be delegated to others and which it can undertake on its own. • Task delegation. SRPC Management has always observed subsidiarity in task delegation. Before delegating certain authority, it first ensures that the potential executor of the task is properly equipped with the requisite faculties. Whenever needed, delegator conducts a thorough discussion first with the potential executor of the task prior to actual delegation. This discussion is accomplished by clarifying the importance of the task, enumerating related concerns, and relaying expected outputs and outcomes. • Issuance of authority. Management delegates tasks either through issuing a memorandum or through revising policies. Whenever applicable, delegating follows a succession line within each department for smooth task delivery while minimizing costs. • Observing accountability. Accountability ensures that tasks are performed based on specifications within SRPC’s performance standards. Accountability is also considered in the Company’s annual rewards system. For example, delegated functions are usually incorporated in the annual performance targets of each department or employee.

This page contains the discussion on G4-38, G4-39, SO3, SO4, SO5, SO7 and SO8.


Evaluation and Compensation

SRPC’s compensation philosophy is all about being competitive in the power generation industry. This philosophy is monitored through its participation in the Mercer Survey, specifically in the energy sector.

The Company’s current job grading/classification and salary structure was based on Mercer’s 2007 proposal. In determining the remuneration of an individual, considered are: the complexity of the job, the level of accountability involved, and the job’s direct impact on the Company’s operations.

The Board determines the compensation and benefits package for officers. This package is commensurate to their qualifications and is comparable with industry standards.

The President and CEO consults with the other members of the EMT when determining the benefits and compensation package for employees. This package is also comparable to industry standards.

The ratio of the annual compensation of the organization’s highest paid local individual (the local managers in this case) to the median annual total compensation of employees is 1:6. Meanwhile, the ratio of the percentage increase in annual compensation of the organization’s highest paid local individual to the median percentage increase in annual total compensation of employees is 1:4.

Consultation with Stakeholders

Stakeholder consultations are conducted every quarter by concerned Vice Presidents and staffs singly, jointly, or largely. The results are presented in periodic (monthly, semestral, and annual) reports that are then submitted to the President and CEO.

Below is a chart that illustrates which Executive officers are in charge of consulting with specific stakeholders.

Meetings and Communications

The Board conducts annual meetings; special sessions when deemed necessary. At these meetings, the highest governance body is updated on all aspects of business operations, including but not limited to social, environmental, economic, and security concerns.

The Board is also provided with copies of the Sustainability Roadmap, Sustainability Reports, Annual Operations Reports, and Monthly Operations updates. quarterly and Annual Operations and Financial Reports are presented and submitted to the shareholders. Operations Reports are prepared by the different departments of the Company while the Annual Financial Report is prepared by an independent accounting firm for the sake of integrity. If the shareholders have any concerns, these are addressed immediately.

There are two usual modes of communication between the Management and the employees: memoranda and announcements.

Stakeholders Governance Body

Shareholders President and CEO

Business Partners President and CEO, Senior Vice Presidents, and Vice Presidents

Regulators –

Environmental and Social Vice President for CSR

Regulators – Economic Senior Vice President for Operations and Site Administrator, Engineering and Operations Manager

Media and Local Government Bodies

Vice President for CSR

Communities Vice President for CSR

Program Partners Vice President for CSR

This page contains the discussion on G4-34 and G4-37.


In addition to these, the President and CEO conducts Voice-Out sessions when his schedule allows. It is at these sessions where employees can express their issues and concerns to and with Management. The President and CEO held six Voice-Out sessions with different groups of employees from 2013 to 2014.

The Executive Management Team maintains a two-way communication with its employees through monthly meetings in order to provide regular updates and discuss performance assessments.

The Human Resources Department holds general assemblies for employees every first Monday of the month. These are for discussing new and existing issues regarding Safety, Human Resources programs and issues, as well as corporate pronouncements.

The Operations and Maintenance group also observes daily Toolbox Meetings on top of the assemblies. These aim to establish the day’s scheduled activities and discuss the job hazards for each activity.

The Company’s website provides other stakeholders a feedback corner where they


can send comments, suggestions, and recommendations.

Grievance Mechanisms

The grievance mechanism is important because SRPC acknowledges that it must maintain open and transparent communication lines with its employees and suppliers, equipping them with necessary information regarding policies and operations.

Internal StakeholdersThe Company’s Code of Conduct was discussed during a 2013 general Assembly while the Compliance Manual was discussed in a 2014 general Assembly. Copies of both were distributed to all employees. Both were subjected to the review of the Executives, and then passed on to the President and CEO for one final review and approval. It is on these that SRPC's grievance mechanism is built.

The Company's grievance mechanism includes an investigation committee established for the purpose of hearing any administrative case. It comprises the following: the Department Head as the Chairman, the Human Resources Manager to facilitate the investigation, one Human Resources employee to record the proceedings, and two members of the team to be recommended by the Human Resources—one non-HR and one non-management or non-supervisory employee—and the complainant.

However, SRPC believes not only in safety nets, but preventive measures. Its Open Door Policy gives employees the opportunity to discourse with their immediate superiors on matters pertaining to work productivity and other such topics. Employees are encouraged to approach their superiors, the Human Resources Department, and the Compliance Officer regarding issues they feel must be brought to the

Company’s attention, including concerns related to unethical or unlawful behavior and matters related to organizational integrity.

The regular orientation program makes new employees aware of the operations and organizational culture, as well as issues on safety, security, and human rights. While the orientation does not specifically discuss human rights, the two-hour general Assembly held every first Monday of the month gives updates on administrative policies and general safety, gender sensitivity, and employees’ rights and benefits, which include freedom of association. The Company, however, does not have a labor union.

Training on Leading/Managing Employees Through Employee Discipline is compulsory for all employees. This activity impresses the role, duties, and responsibilities of both the employee and the Management.

During the reporting period, there were no grievances concerning labor practices filed against the Company. There were also no reported critical concerns communicated to the highest governance body during the period in review.

Anti-corruption and Anti-bribery PoliciesIn line with its Core Value of Integrity, SRPC does not tolerate any form of corruption. As such, the Company has adopted prevention measures in giving and receiving gifts and representation expenses to third party associates.

It is clear to all employees that offering or receiving bribes, commissions, or anything of value to or from subordinates, Company clients, contractors and suppliers, and such other persons or firms with whom the Company does business are grounds for separation. The Company has a Compliance Officer that

This page contains the discussion on G4-41, HR2, HR4 and HR12.


periodically reviews employee compliance to assure that no corruption takes place within the Company.

Ongoing as of the reporting period is the drafting of the Anti-Bribery policy. The existing standards and procedures regarding the use of the Entertainment and Recreation Expense account will be incorporated here as well.

Since the start of its operations, the Company has not been involved in any legal action for corruption, anti-competitive behavior, anti-trust, or monopoly practices. Neither has the Company been fined or sanctioned in relation to its tax obligations and compliance with laws and regulations. During the reporting period, SRPC did not receive any violation notice pertaining to non-compliance with regulatory requirements.

While there is no specific formal grievance mechanism for human rights cases, it is written in the Compliance Manual that any non-compliant action regarding internal and/or external laws should be reported to the Compliance Officer.

External StakeholdersCommunity development is always an ongoing journey, and SRPC seeks to improve its positive impacts through continuous engagements with its stakeholders. Members of the host and partner communities and stakeholders have access to grievance mechanisms such as key informant interviews, focus group discussions, public consultations, and walk-in filing of incident and grievance reports.

Community CareLocal grievances, particularly with respect to the communities being assisted by the SRPC, are now being handled through organized community organizations, specifically the homeowners and livelihood associations. No cases were filed against the Company during the reporting period.

Lastly, one of the communities where the Company operates is home to Indigenous Peoples (IPs), who may have been directly or indirectly affected by the construction of the SRMP and its operations. It is the policy of the Company to comply with the Indigenous Peoples Rights Act; therefore, it does so in partnership with the National Commission on Indigenous Peoples (NCIP), especially in developing and implementing the Indigenous Peoples Development Plan (IPDP).

The IPDP was formulated by the IPs themselves with the guidance of the NCIP, the NPC, and SRPC. To ensure the continuity of its implementation, a Memorandum of Agreement that mandated the commitment of various agencies was signed on February 23, 2004 by the NCIP, the NPC, the DENR, the DSWD, and SRPC. As a result of the proper coordination and execution, there have been no reported violations of the rights of the IPs.

Partnerships with SuppliersThe Company understands that whatever happens within it ripples outward to the local communities. This is why, during the reporting period, it accredited 12 suppliers from the local communities after an assessment by Duns & Bradstreet Philippines. Ever conscious of the inter-connectedness of the two groups, the Company has policies and mechanisms in place that will enable its employees, the communities, and partner NgOs and agencies to work with each other in most transparent and ethical manner possible, protecting the SRPC’s social license and reputation.

The Company treats its suppliers as partners and seeks to maintain such relationships. All items and concerns are discussed thoroughly and the agreed terms and conditions are correctly reflected on the Purchase Order and Contract. Any legitimate company that has the financial

This page contains the discussion on HR8, HR9, HR10, HR11 and HR12.


human rights cases as part of the regular training provided by the service contractor. This requirement is provided for in the Security Manual. The Company also requires that all security guards pass the neuro-psychiatric test conducted by clinics accredited by the Philippine National Police.

and technical capability may be listed as a supplier, provided it passes the accreditation process.

Contracts with all suppliers are in accordance with the law and include articles on human rights. All the suppliers undergo accreditation and screening to ensure that they comply with the provisions of the Labor Code and the Department of Labor and Employment, particularly the minimum wage provision. SRPC also requires service contractors to provide accident and health insurance and personal protective Equipment for their workers. Security personnel are also trained to handle

This page contains the discussion on HR7, HR9, HR10 and HR11.


At SRPC, stakeholder engagement is a critical factor in ensuring the sustainability of its operations. The Company communicates regularly with the stakeholders to make sure that its

growth is achieved in a responsible manner.

For this report, the Company identified its stakeholder groups through a workshop hosted by the Technical Working group (TWg). During the workshop, guide questions

Engaging the StakeholdersSRPC holds its stakeholders in high regard. It defines and measures business success in terms of the effectiveness of its programs and the positive impacts the Company creates in their lives.


were formulated to identify and prioritize the stakeholders. A threshold of eight points (out of 20) in the questionnaire was established to rank stakeholders based on the extent of their influence on the Company's sustainability performance and the extent of the Company’s operations’ effects on them.

SRPC’s stakeholders are: • Shareholders • Board of Directors and officers • LGUs of Pangasinan, Benguet, San Manuel, San Nicolas, and Itogon • Employees • Strategic Power Development Corporation • National government agencies (National Power Corporation, National Irrigation Administration, National grid Corporation of the Philippines, Philippine Institute of Volcanology and Seismology, Power Sector Assets and Liabilities Management Corporation, Department of Education, Department of Environment and Natural Resources, Department of Social Welfare and Development, Department of Agriculture, Department of Trade and Industry, Technical Education and Skills Development Authority, Department of Science and Technology, Bureau of Internal

Revenue, Office of the Civil Defense, Philippine National Police, National Water Resources Board, Philippine Atmospheric, geophysical and Astronomical Services Administration) • Farmers, host communities, and barangays • NGOs/POs • Media • Academe • The Catholic Church in the Philippines

The stakeholder consultation was conducted by the Center for Social Responsibility of the university of Asia and the Pacific (uA&P) to protect the objectivity of the study, making sure that the Company does not exert any influence in the discussion. This was attended by 34 respondents from the following stakeholder groups:

STAKEHOLDERS MODES OF ENGAGEMENT FREQUENCY OF ENGAGEMENT

Shareholders meetings annually

Board of Directors meetings quarterly, annually, open lines of communication

Government meetings, workshops, inspections, validations, public hearings quarterly, open lines of communication

Employees meetings, general assembly, Voice-Out sessions weekly, monthly, quarterly

Farmers meetings open lines of communication

Host communities meetings, focus group discussions, surveys weekly, open lines of communication

NGOs/POs meetings open lines of communication

Media press conferences, briefings open lines of communication

Academe meetings, trainings open lines of communication

Church meetings open lines of communication

Stakeholders Number

Community 7

Media 4

Benguet local government unit 4

Pangasinan local government unit 5

Power and water agencies 4

Government agencies 8

Employees 2



using qualitative and quantitative methods (survey questionnaires and focus group discussions) guided by international standards such as the AA1000 Stakeholders guidelines and the global Reporting Initiative, uA&P assisted the stakeholders in selecting the indicators they considered material to themselves and to the sustainability performance of the Company.

A threshold of 40%, i.e., only those indicators which were chosen by at least 40% of the respondents, was set as the standard for the indicators considered material by the stakeholders. A hundred out of 110 gRI sustainability indicators were determined as material to the consulted stakeholders.

THE TOP 5 MATERIAL INDICATORS WERE:

Overall Rank

% Indicator and Description

1 91% eN13 – Habitats protected or restored

2.5 88% eu1 - Installed capacity, broken down by primary energy source and by regulatory regimeeu10 – Planned capacity against projected electricity demand over the long term

4.5 85% eC7 – Development and impact of infrastructure investments and services supportedeu2 – Net energy output broken down by primary energy source and by regulatory regime

7.5 82% eC2 – Financial implications and other risks and opportunities for the organization’s activities due to climate changeeN7 – Reductions in energy requirements of products and serviceseN27 – Extent of impact mitigation of environmental impacts of products and serviceseN32 – Percentage of new suppliers that were screened using environmental criteria

13 79% eN6 – Reduction of energy consumptioneN12 – Description of significant impacts of activities, products, and services on biodiversity in protected areas and areas of high biodiversity value outside protected areaseN31 – Total environmental protection expenditures and investments by typeeN34 – Number of grievances about environmental impacts filed, addressed, and resolved through formal grievance mechanismsPR3 – Type of product and service information required by the organizations procedures for product and service information and labeling, and percentage of significant product and service categories subject to such information requirementseu30 – Average plant availability factor by energy source and by regulatory regimeeu3 –Number of residential, industrial, institutional and commercial customer accounts

Economic

85% eC7 – Development and impact of infrastructure investments and services supported

82% eC2 - Financial implications and other risks and opportunities for the organization's activities due to climate change



Economic (cont.)

76% eC1 – Direct economic value generated and distributed

59% eC5 – Ratios of standard entry level wage by gender compared to local minimum wage at significant locations of operation

56% eC6 – Proportion of senior management hired from the local community at significant locations of operation

Environment

91% eN13 – Habitats protected or restored

82% eN6 - Reduction of energy consumption

79% eN32 – Percentage of new suppliers that were screened using environmental criteria

79% eN31 – Total environmental protection expenditures and investments by type

79% eN27 – Extent of impact mitigation of environmental impacts of products and services

Labor

76% LA3 – Return to work and retention rates after parental leave, by gender

76% LA2 - Benefits provided to full-time employees that are not provided to temporary or part-time employees, by significant locations of operation

74% LA9 – Average hours of training per year per employee by gender, and by employee category

68% LA16 – Number of grievances about labor practices filed, addressed, and resolved through formal grievance mechanisms

65% LA8 – Health and safety topics covered in formal agreements with trade unions

Society

68% So2 – Operations with significant actual and potential negative impacts on local communities

56% So7 - Total number of legal actions for anti-competitive behavior, anti-trust, and monopoly practices and their outcomes

56% So6 – Total value of political contributions by country and recipient/beneficiary

56% So5 – Confirmed incidents of corruption and actions taken

56% So4 – Communication and training on anti-corruption policies and procedures

Human Rights

76% hR7 – Percentage of security personnel trained in the organization's human rights policies or procedures that are relevant to operations

68% hR1 - Total number and percentage of significant investment agreements and contracts that include human rights clauses or that underwent human rights screening

65% hR8 – Total number of incidents of violations involving rights of indigenous peoples and actions taken

65% hR12 – Number of grievances about human rights impacts filed, addressed, and resolved through formal grievance mechanisms

62% hR2 – Total hours of employee training on human rights policies or procedures concerning aspects of human rights that are relevant to operations, including the percentage of employees trained

Electric utilities

88% eu10 – Planned capacity against projected electricity demand over the long term, broken down by energy source and regulatory regime

88% eu1 - Installed capacity, broken down by primary energy source and by regulatory regime

85% eu2 – Net energy output broken down by primary energy source and by regulatory regime

79% eu30 – Average plant availability factor by energy source and by regulatory regime

79% eu3 – Number of residential, industrial, institutional and commercial customer accounts

Product Responsibility

79% PR3 – Type of product and service information required by the organization's procedures for product and service information and labeling, and percentage of significant product and service categories subject to such information requirements

65% PR2 - Total number of incidents of non-compliance with regulations and voluntary codes concerning the health and safety impacts of products and services during their life cycle, by type of outcomes

62% PR4 – Total number of incidents of non-compliance with regulations and voluntary codes concerning product and service information and labeling, by type of outcomes

59% PR5 – Results of surveys measuring customer satisfaction

47% PR9 – Monetary value of significant fines for non-compliance with laws and regulations concerning the provision and use of products and services



Inspired by the characteristics of the Company’s main resource—water—SRPC builds a Company that shares its value, letting it flow into the hands of more people.

Improving SRPC’sRipple Effect

• Caring for Employees

• Uplifting Communities

• Good Neighbor


SRPC’s vision of energizing lives connects our commercial success with broader societal benefits. Part of SRPC’s mission is to “ensure our long term productivity and profitability while performing our

responsibilities as a good corporate citizen.” Thus, the Company believes that the hallmark of a successful company able to withstand the test of time is its ability to efficiently and responsibly optimize, care for, and renew the capital resources available to it, whether they be financial, natural, or human resources. A company built for long-term viability recognizes that its own economic progress ripples to a broader group of stakeholders affected by the triple bottom line and who can collectively work together to improve society.

Caring for Employees

For SRPC, the drop that begins the ripple is contributing to the economic welfare of its employees. The Company regards nurturing employee welfare as a way to attract and keep talent while providing economic benefits for the local communities. It makes a point of drawing from the local pool of talent, especially for Senior Management positions, and it regards this thrust as a way to make direct investments on its host communities. This form of investment goes a long way in stimulating growth as it enhances the economic capacities and productivity of households, and helps create sustainable improvements in their lives. As of the reporting period, two members of the Senior Management Team are from the local community: the Vice President, Treasurer and Chief Finance Officer and the Vice President for CSR and Security. The assignation of a local for the CSR division, in particular, helps the

Company better engage with and understand the needs of the community.

SRPC’s employees are well-cared for from the beginning to the end of their stay. For example, the new hire’s salary is typically 40% higher than the prescribed minimum wage in the Ilocos region.

When they turn 60 years old at SRPC, employees must go into mandatory retirement. They can look forward to a share of the Retirement Funds that the Company maintains, with retirement pay pegged at one month per year of service. Retirement Fund Assets as of March 31, 2015 are ₱104 million. A regular employee may take part in the Company’s Provident Program, a savings facility at the same time a lending mechanism. Participants can contribute a maximum of 10% of their monthly base rate, while the Company shares 50% of the employee’s 10% contribution. The entire joint contribution, plus the interest earned, is turned over to the employee when he/she leaves SRPC. For the reporting period, members of the program composed 79 or 84% of the total regular workforce.

Apart from the employment of the regular workforce, the Company also offers some 20 to 30 skilled and non-skilled labor jobs for various service contracts with an income of ₱350 to ₱400 per day, which is more than the mandated daily rate in Pangasinan.

Uplifting Communities

The Company is well aware of its contribution to the economic development of San Nicolas and San Manuel, which has led to their reclassification as first class municipalities, due to its timely and accurate tax payments since 2003.

This page contains the discussion on EC3, EC5 and EC6.


Improving SRPC’s Ripple Effect

Pangasinan, Benguet, and the Municipalities of San Manuel, San Nicolas, and Itogon, and 10 barangays within the said municipalities for electrification, development and livelihood, reforestation, watershed management, health, and/or environment enhancement.

Tax credits from the government that were used for the fiscal year ending March 31, 2015 amounted to $1.34 million.

Community-Driven Enterprise Development ModelIndirect effects on the Company’s host and partner communities are also part of a positive ripple effect that SRPC strives to generate through its presence in the community. The Community-Driven Enterprise Development (CDED) model—a paradigm developed by SRPC and partners based on Sustainable Livelihood Framework (SLF) and Community-Driven Development (CDD) approach—is being used to identify the needs of the community, all the way until project completion. CDED utilizes a livelihood entities’ capital resources, of the human/organizational, social, natural, physical, and financial kind. It is reported through monthly and annual accomplishment reports.

This model has five stages: social preparation; project identification, planning, and development; project implementation and management; project evaluation and re-investment planning; and sustainability imprinting. One of the key elements to this paradigm is the coordination, formalization, and strengthening of a community organization with the objective of accessing external support (from a government, private, and/or non-government organization) in addressing key community concerns such as training, business/enterprise

Over the last three fiscal years (2012-13, 2013-14, and 2014-15), a total of ₱132,117,532.61 has been paid to the host local government units as payment of business tax. The Company and all its employees also paid 100% of income taxes which totaled ₱3,613,975,462.75 over the same period. To ensure prompt payments of the Project’s real property tax, the Company advances the payment for the local governments of Pangasinan, San Manuel, and San Nicolas. For the reporting period, SRPC paid ₱48,905,279.72 in advance to the said local governments.

The Company also continues to comply with the payment of the ER 1-94 as part of the amended agreement in the Company’s PPA with the NPC. For the reporting period, the Company contributed ₱26,199,984.00 to the fund. The fund, which is being remitted to the Department of Energy, is deposited as a trust fund that can be accessed by the local governments of

This page contains the discussion on EC4 and EC7.


basic food and non-food requirements of the family.

Imparting Skill Sets and Financial SavvyDuring the reporting period, SRPC managed through its CDED to help increase the average gross household monthly income of its Microfinance Project members from ₱5,000 (NPC SES, 2012) to ₱20,423.00, which is roughly 2.59 times more than the ₱7,890 national monthly

development, infrastructure-support (goods and civil works), packaging and labeling, exposure, market linkage, and sustainability mechanisms.

SRPC’s livelihood and enterprise programs are also designed to effectively promote local economic development. The Company envisions one entrepreneur and one gainfully employed member for each household so that their combined income can sufficiently cover for the

COMMuNITY-DRIVEN ENTERPRISE DEVELOPMENT MODEL

SuSTAINABILITy IMPRINTING

SoCIAL PRePARATIoN

PRojeCT IdeNTIFICATIoN, PLANNING, ANd deveLoPMeNT

PRojeCT IMPLeMeNTATIoN

ANd MANAGeMeNT

PRojeCT evALuATIoN

ANd ReINveSTMeNT

PLANNING

(PO strengthening, asset management, contract management, supply chain management,

accreditation, and network expansion)

(Rapid resource appraisal, Purpose-building and community

organizing, PO registration, Capacity-building on

organizational development)

(Assessment of enterprise capital, IKSP documentation,

business planning, capital sourcing, training and

capacity-building)

(Fund availment and procurement of inputs, project implementation, monitoring and documentation, marketing assistance, support

infrastructure)

(Data gathering, processing, and analysis; reinvestment planning, and asset expansion)




household poverty threshold (for a family of five), based on the latest report of the National Statistical Coordination Board (2012). The Company was able to achieve this through a combination of initiatives. These include access to capital financing through microfinance (see side story); and livelihood-support assistance through coaching, training, linkaging, and marketing; infrastructure development such as farm-to-market roads, multipurpose building, water supply systems, piggery facilities, irrigation canals, seed storage, vermi-composting facilities, and equipment sets.

The solutions for improving economic activities in the area are to connect small producers with buyers and minimize the cost of transporting people and goods. To achieve this, SRPC helps finance the construction of foot trails and farm-to-market roads, which in turn helps minimize the strain on the limited resources of rural households.

One of the most remarkable improvements in the Company’s partner communities has been the shift to a more enterprising mindset, which in turn spurred more enterprise-driven interventions. When SRPC began working with them, community members were content with income coming from the provision of labor services in the various civil works.

SRPC’s goal for these communities is to help its members sustain themselves with a steady income. One of the ways the Company achieves this is through the skills training program on Shielded Metal Arc Welding, Basic Housekeeping, Consumer Electronics Servicing, and Basic Sewing. This program imparts skills and knowledge on these trades to out-of-school

Manpower complement and respective expertise, technology, infrastructures, equipment and machineries, knowledge system and practices, and other capacities relevant to the prospect enterprise;

Networks and connections accessible in operationalizing the enterprise’s value chain;

Land, water and aquatic resources, trees and forest products, wildlife, wild foods and fibers, biodiversity, and environmental services that the concerned organization can commit to protect;

Infrastructure (transport, roads, vehicles, secure shelter and buildings, water supply and sanitation, energy, communications), tools and technology (tools and equipment for production, seed, fertilizer, pesticides, traditional technology); and

Monetary assets and instruments that an organization possesses and is willing to commit.

Human/Organizational Capital

Social Capital

Natural Capital

Physical Capital

Financial Capital



youths and women. Out of 139 graduates, 55 of them, or 40%, are currently employed. Of these, six are working abroad, 35 are employed in other provinces, six are employed in the locality, and eight have their own sewing businesses.

By the end of the reporting period, memberships for the Microfinance Project totaled to 618 and the Company supported 600 households with livelihood and enterprise activities such as cattle production, rice farming, vegetable production, carabao dispersal, and tapuey (rice wine) making. A total of 1,258 individuals were engaged in various enterprise activities, namely: rice farming, vegetable production, orchard development, vending, hog raising, poultry, and fishing, among others.

The Foundation has also established four homeowners’ associations and four livelihood organizations. The former has been maintaining resettlement assets and compliance with the Housing and Land-use Regulatory Board (HLuRB) while ensuring a harmonious relationship between residents. The latter promotes local economic growth through partnerships with donor organizations, implementation of income-generating projects, and capacity-building for members. Both serve to empower and inspire SRPC’s partners to act collectively and make decisions with the good of a greater majority as a primary consideration.

Good Neighbor

SRPC strives to be a good neighbor to its partner communities, supporting events and programs that improve social ties and promote camaraderie among the residents. The Company provides assistance to local government units for barangay, municipal, and provincial festivities

or programs such as fiestas or founding anniversaries, fund raising projects, basketball tournaments, and Christmas programs among others. These donations are guided by the Policy on Expense Report which is in compliance with the Foreign Corrupt Practices Act. SRPC, however, does not provide either financial or in-kind contributions to politicians or political parties. Below is the breakdown of total financial assistance from April 2012 to December 2014.

Financial Assistance per Area Amount (₱)

San Manuel 959,000.00

San Nicolas 57,000.00

Itogon 260,000.00

Other areas within the host provinces

208,000.00

ToTAL 1,484,000.00

LEGEND: Net Revenues Liabilities Equity

Fiscal Year

March 2012*

March 2013

March 2014

March 2015

¥ 6,219,629,771

¥ 9,558,844,466

$ 105,655,125

$ 121,035,742

$ 20,011,944

$ 274,575,175

$ 192,888,565

$ 23,613,826

$ 107,744,129

$ 8,036,743

$ 333,477,956

¥ 31,679,149,421

* SRPC’s functional currency was changed from Japanese Yen (¥) to US Dollar ($) in November 2012 after the loans were fully paid.

REVENuES AND LIABILITIES(APRIL 2012 TO MARCH 2015)

This page contains the discussion on G4-9, EC1, EC8 and SO6.


LEGEND: Total Direct Value Generated Total Economic Value Distributed Economic Value Retained Net Income Per AFS


Special note regarding this EC1 table:SRPC applied the provisions of Philippine Interpretation IFRIC 12, Service Concession Arrangements, to its PPA with NPC. Instead of recognizing the power station, the Company recognized a concession receivable from NPC because of its contractual right under the PPA agreement to receive fixed and determinable amount of payments during the cooperation period, regardless of the usage of the power station. The concession receivable, representing capital cost recovery fees, was measured on initial recognition at its fair value.

Subsequent to initial recognition, the concession receivable is measured at an amortized cost by using the effective interest method. When the Company receives a payment during the cooperation period, it apportions such payment among:

1. A repayment of the concession receivable, thereby reducing the carrying amount of the concession receivable on the balance sheet.2. Revenues recognized in the statement of income in the form of the following: a. Financing income on concession receivable, b. Operating fees for operating the power station, and c. Energy efficiency fees for electricity delivered in excess of the contracted capacity and generated during allowable downtime.

Revenue RecognitionRevenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

Financing Income on Concession ReceivableFinancing income on the concession receivable is recognized using the effective interest rate method over the cooperation period.

ECONOMIC VALuE gENERATED AND DISTRIBuTED*

*Following the GRI EC 1 protocol. **SRPC’s functional currency was changed from Japanese Yen (¥) to US Dollar ($) in November 2012 after the loans were fully paid.

This page contains the discussion on G4-9 and EC1.


Energy and Operating FeesThe energy fee is recognized based on the actual delivery of energy generated and made available to NPC in excess of the equivalent energy of the contracted capacity plus energy generated during allowable downtime. The operating fee covers the fixed operating and maintenance costs of the power station, which is computed at certain rates per kilowatt-hour (kwh) of energy generated and made available to NPC.

Ancillary Service FeesAncillary service fees, which consist of revenues for scheduled capacity without energy dispatched, are recognized as the scheduled time for the approved reserved capacity occurs.

Other types of income come from interests from bank deposits and short-term investments that accrue using the effective interest rate method, and income from other transactions that are incidental to the Company’s operations is recognized when earned.

SRPC seeks to continuously grow the percentage of annual total spend of 24.2% on local suppliers from Pangasinan and its neighboring provinces—namely, Baguio, La union, Tarlac, and Itogon.

36 classrooms constructed

52 classrooms repaired

35 others (home economics building, teacher's quarter, school ground, stage)

6 hand washing facilities

10 comfort rooms

9 water systems

3 health centers repaired

18 farm-to-market roads (total 7.55 km)

4 foot trails (55 km)

18 others (irrigation, floating dock, perimeter fence, multipurpose pavement)

General Services 6.9%

Car Rental and Pantry 4.1%

Fuel Diesel 3.3%

Vehicles/parts 3.3%

Construction Supplies 1.5%

Appliances/Furnitures 1.8%

General Plant Supplies/Computers 0.6%

Office Printing/Supplies/Christmas Expenses 0.5%

Safety Work Clothes 0.1%

Portalet/Siphoning 0.7%

Others 1.3%

ToTAL-Average Annual Purchases from Pangasinan

24.2%

ANNuAL PuRCHASES OFgOODS AND SERVICES

COMPLETED INFRASTRuCTuRE PROJECTS FROM 1999 TO 2014

EDUCATION

HEALTH

LIVELIHOOD



27,085 elementary pupils benefited from English, Mathematics, and Science Proficiency Program

30,027 English, Mathematics, and Science workbooks distributed

3,266 story and reference books donated to 25 schools

1,577 teachers trained in English, Mathematics, Science, and values formation

274 parents trained through Wanted: Mabubuting Magulang

114 out-of-school youths trained in shielded metal arc welding, consumer electronics servicing and basic housekeeping

23 women trained in basic sewing

420 children participated in summer arts workshop and basic bookmaking

114 community health volunteers trained in community-based first aid and hygiene and sanitation promotion

2,381 children benefited from supplemental feeding program

17 classrooms (9 constructed, 8 repaired)

10 WASH facilities

2 water facilities

2 farm-to-market roads (2.2 kms.)

1 health center

5 others (fence, school grounds)

2,876 loans amounting to ₱20,074,000, serving 539 households1

1,207 households extended enterprise development assistance

996 individuals trained in enterprise and skills development and study visits

202 farmers assisted in the development of 73 hectares into land-based enterprise projects

₱20,423 gross monthly household income realized from ₱5,000 (NPC SES, 2010), which is 2.59 times more than the ₱7,890 monthly household poverty threshold (NSCB, 2012)

5 economy-driven organizations organized to serve livelihood and enterprise development needs of beneficiaries

COMPLETED PROJECTS/ACCOMPLISHMENT DuRINg THE REPORTINg PERIOD:


EDUCATION HEALTH

INfRASTRUCTURE DEVELOPMENT

LIVELIHOOD AND ENTERPRISE

DEVELOPMENT

1 Includes loans disbursed by the Baro A Namnama Multipurpose Cooperative for February to March 2015.



The Asian Development Bank recognizes microfinance, or providing loans and other financial services to poor families, as a high-impact method for bettering the lives of those who have to make do with less. Similarly, the united Nations Development Programme has hailed the strategy for demonstrating in comprehensive studies that "microfinance helps very poor households meet basic needs and protect against risks, associating it with improvements in welfare of poor households, enterprise stability or growth, and empowerment."

SRPC believes in investing in the education, businesses, and lives of the residents in its partner and surrounding communities to realize its vision of energizing lives. As a commitment to good corporate citizenship, the Company partnered with the Center for Agriculture and Rural Development, Inc. (CARD), a leading microfinance institution in the Philippines, in August 2009 for the establishment of the Microfinance (MF) Project, with a particular focus on the families displaced by the 1998 construction of the SRMP.

The Company aims to make each and every family a self-sustaining, empowered, and productive contributor to society. Access to financial assistance and credit discipline are effective ways to capacitate starting entrepreneurs to grow their financial capital with accountability. The assisted community members have learned the value of active participation, timely and sufficient settlement of financial obligations, and proper business planning. Specifically, the Company's objectives are:

• To ensure greater participation in the project,

SPOTLIGHT:

Microfinance Project

Through microfinance, SRPC improves the well-being of low-income households, facilitating better chances at long-term economic stability and development at the local levels.



five new active centers were opened in 2013 and two in 2014.

Total membership grew by 82%, from 340 in 2011 to 618 in 2014, and showed 95% growth in the total number of members with loans from 2011 to 2014. From the period of August 2009 to January 2015, the cumulative membership has reached 618.

The number of loans increased in April 2012 to March 2013 (1,063) from 632 in April 2011 to

• To instill accountability in the members, • To increase borrowing capacity and household income, • To increase the capacity for finance management, • To raise awareness on the value of money, • To improve savings behavior, and • To increase the management capabilities of the active centers.

By the end of the three–year reporting period, the Microfinance Project had 18 active centers;

Indicators August 2009 –March 2015

I. Outreach

No. of Active Centers 18

No. of Members 618

No. of Members with Loans 596

No. of Loans Disbursed 3,750

Amount of Loan Disbursed (in ₱) 25,277,000

Average Amount of Loan Disbursed (in ₱) 6,740.53

No. of Outstanding Loans 128

Amount of Loan Outstanding (in ₱) 389,503.64

Average Loan Outstanding (in ₱) 3,043.00

Interest Income on Loan (in ₱) 3,177,166.35

No. of Drop-outs

After Recognized 19

After First Loan 88 After Second Loan 197 Savings Mobilization (in ₱) 452,374

Capital Build-Up (in ₱) 244,200

II. Portfolio Quality (in ₱) 3,043.00

Repayment Rate 100.00% 1

Total Amount Paid (in ₱) 28,006,195 Total Amount Due (in ₱) 28,006,195 Past Due Amount 0 Total Principal Balance of Loan With Past Due 0Portfolio at Risk 0%

1 Effective February 2015, the operation of the Microfinance Project was officially turned over to Baro A Namnama Multipurpose Cooperative (BANMPC), a cooperative initiated by the San Roque Power Foundation. With the BANMPC, the Company and the Foundation help create self-sufficient communities, teach people to take charge of their development, and work toward poverty alleviation through microfinance. The past due amount of ₱5,900 incurred by end of January 2015 was collected by BANMPC in February 2015.


(3) local migration; and (4) no current need for additional financial capital. However, majority of the voluntary terminations in 2014 was due to non-disbursement of loans in October 2014 to January 2015. Moreover, other members were purged by their co-members from the center due to issues on repayment, attendance, and/or attitude. A member may be terminated by a vote of the majority of all the center members for failing to comply with his/her obligations and violating center policies.

The repayment rate as of the end of the reporting period is 100%, which pegs the portfolio at risk ratio at 0%. The standard set by the National Credit Council of the Philippines is 5%. The past due amount of ₱5,900 in January was already collected in February 2015 by the BANMPC. No write offs were made since August 2009. The Company considers this a sign of greater accountability among the Microfinance Project members, as well as an improved economic capacity.

March 2012, and from April 2013 to March 2014 (1,076), but decreased during the latest fiscal year (583) as acceptances of loan applications were put on hold beginning October 2014 due to the proposed transition of the MF Project into a cooperative. The average amount of loans disbursed increased by 30%, from ₱5,721.52 to ₱7,444.25, due to the members’ increased borrowing capacity. Loan disbursements continued in February 2015 under the Credit Program of BANMPC.

The number of outstanding loans dropped from 294 in 2011 to 128 by January 2015, equivalent to ₱1,317,725.22 and ₱389,503.64, respectively. Loan disbursements were temporarily put on hold in October 2014, but repayment collections continued.

Causes of drop-outs were either voluntary or involuntary. Some members voluntary resigned from the MF Project due to the following reasons: (1) local or overseas employment; 2) inability to attend weekly center meetings;

Indicators Apr 2012 - Mar 2013 Apr 2013 - Mar 2014 Apr 2014 - Mar 2015

I. Outreach

No. of Active Centers 16 16 18

No. of Members 463 444 479

No. of Members with Loans 419 381 332

No. of Loans Disbursed 1,065 1,076 583

Amount of Loan Disbursed (in ₱) 7,160,000 8,234,000 4,340,000 Average Amount of Loan Disbursed (in ₱) 6,723 7,652.42 7,444.25 No. of Outstanding Loans 418 369 128

Amount of Loan Outstanding2 (in ₱) 2,329,920.95 2,098,479.53 389,503.64 Average Loan Outstanding (in ₱) 5,573.97 5,686.94 3,043.00 Interest Income on Loan (in ₱) 788,404.73 1,062,302.62 751,492.80 No. of Drop-outs

After Recognized 4 2 9

After First Loan 34 16 27 2 Balance as of end of each fiscal year



Indicators Apr 2012 - Mar 2013 Apr 2013 - Mar 2014 Apr 2014 - Mar 2015

After Second Loan 21 46 124 Savings Mobilization (in ₱) 347,137.00 1,757.00 (721,701)Capital Build-Up (in ₱) 244,200

II. Portfolio Quality

Repayment Rate 99.74% 99.79% 100.00%

Total Amount Paid (in ₱) 6,897,395 9,536,274 6,772,285

Total Amount Due3 (in ₱) 6,915,410 9,556,521 6,772,285

Past Due Amount (in ₱) 18,015.00 20,247.00 0

Total Principal Balance of Loan With Past Due (in ₱) 32,114.86 25,559.53 0

Portfolio at Risk 1.38% 1.22% 0%

3 Sum of the amount due during the period plus amount past due


Much like water, SRPC’s operations seep through all aspects of people’s lives. Thus, sound environmental practices must be observed in all its operations and actions, enhancing its corporate value and improving communities in the most responsible manner.

Nourishing theSource of Life

• Greater Efficiencies in Resource Use

• Watershed Rehabilitation and Protection

• Improving Water Quality

• Mitigating Impacts on Biodiversity

• Clean, Compliant Operations


Balancing four major mandates of the SRMP: irrigation, peaking power generation, flood attenuation, and water quality improvement, SRPC's work requires a strong focus on

environmental sustainability, beginning with SRPC’s raw material—water.

Greater Efficiencies in Resource Use

The use and consumption of materials is mainly driven by the utilization of water for hydro power generation. The water is not withdrawn from the source (the Agno River), but diverted for power generation. This water is entirely returned to the river generally unaltered and ready for irrigation purposes, as managed by the National Irrigation Administration.

The Company’s administrative offices and other plant facilities consumed about 255,500 cubic meter of water annually for domestic purposes such as cleaning, watering, and hygiene purposes.

Similarly, SRPC seeks to set itself as an example in the judicious use of energy, well aware of the burgeoning energy demand nationwide, which can surpass existing capacity. Its operations are powered by hydroelectricity, a clean source of energy with minimal negative contributions to the environment. However, utilizing this kind of power is not enough; the Company analyzes the use of energy at the workplace and improves systems and strategies for better efficiency.

On the right is SRPC’s electricity consumption from 2011 to 2014. Based on the data, there is a decreasing trend in electricity consumption, with about 40.63%MWh or gJ reduction in the

ELECTRICITY CONSuMPTION

Year MWh GJ

2011 9,301.61 33,485

2012 8,317.90 29,941.88

2013 6,759.19 24,333.08

2014 5,637.20 20,293.92

VOLuME OF WATER uSED DuRINg THE REPORTINg PERIOD

Year

2012

2013

2014

ToTAL

1,687.31 MCM

2,152.95 MCM

2,323.90 MCM

0 2000 4000 6000 8000

6,164.16 MCM

CONSuMED MATERIALS BYWEIgHT OR VOLuME

2012 2013 2014 TOTAL

2,323.90 MCM

2,152.95 MCM

1,687.31 MCM

6,164.16 MCM

2,178 kg (836

reams)

2,601 kg (867

reams)

2,751 kg (917

reams)

7,530 kg (2,620 reams)

8,317.90 MWh;

29,941.88 GJ

6,759.19 MWh;

24,333.08 GJ

5,637.20 MWh;

20,293.92 GJ

20,713.58MWh;

74,568.89 Gj

40,554.21 gallons

37,360.39 gallons

41,575.20 gallons

119,489.80gallons

Water

Paper

electricity

Fuel

This page contains the discussion on EN3, EN4 and EN5.


Nourishing the Source of Life

electricity consumed in 2014 compared to the consumption in 2011, which is the baseline year.

The Company endeavors to sustain its energy efficiency—both as an electricity generator incorporating state-of-the-art technology for the more efficient production of clean energy, and as an end-user seeking to improve its energy efficiency in the workplace. SRPC implements basic administrative procedures like turning off electric equipment outside operational hours and giving preference to energy-efficient products and equipment such as lighting, computers, and air-conditioning units, and the preferred use of relatively new cars. The Company also reduces its use of materials such as paper, food packaging, and bottled water.

To reduce Company-wide fuel consumption, Management has enacted flexible work policies, the systematic arrangement of employee errands, initiated carpooling programs to support mass transit, and engaged in teleconferencing over long distances to save on travel time.

Notably, there was no fuel consumed for heating, cooling, and steam, as these are rendered unnecessary by the very nature of the plant operations. The Company is also developing a gHg plan for the monitoring and accounting of gHg emissions and reduction measures.

Watershed Rehabilitation and Protection

To be able to maximize the power of water, SRPC must protect its resource base: the 9,550-hectare San Roque Watershed, situated within the provinces of Benguet and Pangasinan

and within which the San Roque Dam sits. Established as a watershed forest reserve by virtue of Presidential Proclamation No. 2320 on November 22, 1983, it was created for the purpose of protecting, maintaining, and improving its water yield for irrigation, hydroelectric power generation, and other ecological enhancement purposes of the SRMP.

SRPC committed support to the National greening Program of the government with the Company-initiated "grow a Tree for the San Roque Watershed" program. The program was launched on July 7, 2011, and involves the adoption of a degraded 500-hectare portion of the watershed slated for reforestation. The project is implemented to mainly improve the vegetation of the watershed. It is in partnership with NPC, DENR, and other partner organizations. Since its inception in 2011, about 201,814 seedlings have been planted in 410 hectares. This socially mobilized tree planting activity was participated in by 4,845 volunteers. The established plantation was monitored and validated by the DENR and the Multipartite Monitoring Team (MMT) with noted survival rate of about 80%.

Environmental advocacy programs such as the establishment of a tree library/arboretum is also maintained, using indigenous species and promoting the regrowth of trees species that were endemic in the area.

To strengthen the conservation advocacy and protective measures for the birds and wildlife, SRPC has partnered with the Philippine Eagle Foundation. The Philippine Eagle Species Restoration Program within the watersheds of the Agno River and the surrounding mountains has been designed so that the presence

This page contains the discussion on EN4 and EN5.


of this majestic bird and national symbol can be considered a meaningful indicator for the ecosystem’s health and the overall environmental condition in the area.

The project touts the Philippine national bird as the rallying point for the rehabilitation and protection of the San Roque watershed areas through environmental education and public awareness campaigns, support for forest and watershed protection initiatives, and ecological research in the San Roque

Watershed, northern Cordillera and northern Sierra Madre. Research efforts over the last four years (2011-2014) resulted to the first-ever confirmed documentation of Philippine Eagles and their nest in the northern Cordillera range in Calanasan, Apayao and the monitoring/tracking of the behavioral/dispersal pattern of "Raquel," the first-ever Philippine Eagle in Luzon tagged with transmitters, in the forests of northern Sierra Madre Natural Park in San Mariano, Isabela.



Meanwhile, the presence of species Anas luzonica, or Philippine duck, in the SRMP’s area of operation has also been recorded. The duck has been categorized as “vulnerable” in the International union for Conservation of Nature’s (IuCN) Red List of Species in the Philippines. About a thousand of Philippine ducks were sighted during the bird watching activities conducted with the Wild Bird Club of the Philippines, NPC, San Roque Watershed Area Team, and the DENR, within the SRMP area. Apart from the Philippine duck, there are

no other threatened, critically endangered, or endangered species found in the vicinity.

Improving Water Quality

SRPC, together with the MMT, continuously monitors water and sediment quality of the reservoir and downstream of the dam. Suspended sediments are detrimental to water quality, as these may clog and damage fish gills and interfere with the photosynthetic processes of crops, as well as recreational activities and


aesthetic enjoyment. Sediments also carry pollutants such as nutrients and toxic chemicals into the river.

SRPC conducts regular water quality monitoring that includes in-situ (on-site) measurements and water sampling at different strategic locations, using DENR’s revised Water usage and Classification/Water quality Criteria. There are three networks of sampling sites: one monitoring station upstream (along Balog Creek), three stations in the reservoir area, and two stations in the downstream area (20 meters before the old NIA Weir).

using a Van Dorn sampling device, water samples are collected at various depths and then properly preserved and transported to a DENR-certified laboratory for analysis. Both in situ measurements and chemical analyses indicate that all the identified parameters defining the desired water quality generally meets the requirements of waters used for irrigation and fishery.

quarterly monitoring is also being done to address risks in the aquatic environment, making sure that levels of concentration of nitrogen and phosphorous in the reservoir are within the DENR standard. The Company also conducts reservoir-clearing operations by removing free-floating debris and vegetation to prevent the proliferation of organic matter and its decomposition that may deplete the dissolved oxygen and may result in fish kills and aesthetic problems in the reservoir.

upstream of the dam, the effects of water quality associated with Plant operations are confined to the reservoir area. Thus, there is no expected impact upstream. It is worth noting that water quality assessments downstream reflected significant improvement, especially in terms of turbidity and clarity and total solids dissolved and suspended. The Company is also equally diligent in monitoring and controlling the quality of effluent water from its sewage treatment facilities.



Further, the MMT's Sectoral Monitoring Team (SMT) monitors and validates environmental programs and projects quarterly, and reports findings in a semi-annual MMT meeting for approval and submission to the Department of Environment and Natural Resources-Environmental Management Bureau.

Mitigating Impacts on Biodiversity

The SRPC, in coordination with the Bureau of Fisheries and Aquatic Resources (BFAR) Region 1 and Lgu of Itogon, continuously conducts species stock enhancement in the reservoir.

During the reporting period, SRPC accomplished the seeding or dispersal of 20 kilos (about 120,000) of elvers in addition to the seedings of the past years. Dispersal of elvers was done to enhance stocks in the reservoir and in compliance with one of the conditions of Itogon. Since the SRMP’s construction, no toxic substances or invasive species have been introduced into the area. There are also no recorded incidents of species poaching and habitat conversion in the area.

Certain areas that were subject to vegetation removal and clearing operations have already been reforested. Other areas have been seeded with ipil-ipil (Leucaena leucocephala) and are host to numerous and continuous tree planting activities. The planting/seeding of the ipil-ipil also helps bring back the nutrient of the soil in order to pave the way to the planting of climax, or primary tree species in the area.

Clean, Compliant Operations

SRPC’s operational activities and power generation emit zero emissions since it does not

DIESEL CONSuMPTION

Year Gallons

2012 40,554.21

2013 37,360.39

2014 41,575.20

burn fuel and there is no associated combustion involved in the hydroelectricity generation process. There are no emissions of ozone-depleting substances from cooling systems, as the operations do not use refrigerants or freons. The office building uses electricity from the hydroelectric power generated at the Plant, hence, indirect emissions from these sources are considered insignificant. The Company’s carbon footprint mostly comes from the fuel for standby generator and Company-owned vehicles used for business trips and transporting employees to and from the Plant. These account for 1,212.82 metric tons of CO2 for the last three years.

Business trips in 2014, which included overseas trips for technical training and conferences attended by Operations and Maintenance and CSR employees, and the Company outing in Hong Kong, accounted for 2.38 metric tons of CO2 emission. However, there is no available information on the environmental impacts of suppliers transporting goods and supplies for the Company’s operations. The amount of carbon emissions arising from the transport of personnel is more than compensated by its reforestation program.

At the dam, there is no potential emission of methane due to the absence of waves that can disturb the methane in the soil from areas that were cleared of vegetation and submerged during the construction of the

This page contains the discussion on EU5, EN17, EN18, EN20 and EN21.


SRMP. The emission factor used in calculating gHg emission was based on the united States Environmental Protection Agency (uS EPA) transport emission factors by fuel type for CO2.

Dust monitoring activities and noise quality measurement tests are not regularly conducted. However, if there is a need for construction or maintenance that will likely emit air pollutants, temporary air quality monitoring sites are established at the actual construction sites and downwind toward the nearest affected communities. Noise quality measurements are also taken simultaneously at each air quality sampling station. At the noise monitoring stations outdoors of the Power Plant Facilities at the Powerhouse Area, about 65dBA was recorded. This measurement is still within the prescribed limit of 85dBA as per the OSH Standard Rule 1070 Occupational Health and Environmental Control.

The Company manages its waste disposal following the guidelines laid out in the Solid Waste Management Act and the Toxic Substances and Hazardous and Nuclear Wastes Control Act. At present, it has no critical issues pertaining to non-hazardous and hazardous wastes, and the types and volume generated are well covered by the current waste management approach. Below is a table of solid wastes generated, collected, and disposed of from 2012 to 2014.

SOLID WASTES gENERATED, COLLECTED, AND DISPOSED OF

Year Average Weight of Solid Waste Generated

Average Weight of Residuals

2012 120 cu.m 36 cu.m

2013 120 cu.m 60 cu.m

2014 120 cu.m 62 cu.m

Residuals and waste such as plastics, paper, and other biodegradable materials that are not re-used or recycled are stored at the Material Recovery Facility and disposed of at a landfill. No PCB waste was generated because all transformers used by the Company are PCB-free.

In 2012, about 16,100 liters of waste oil was transported, treated, and disposed of by Martan Enterprises, a DENR-accredited company, on June 20-21 and July 25, 2012 respectively. For the fourth quarter of 2014, about 2,086 liters of waste oil are in storage.

In 2010, about 10.37 MT of used lead-acid batteries were collected, treated, and disposed of through an agreement with Motolite’s “Balik Baterya Program.” In 2014, about 3.5 MT of lead-acid batteries were stored in the storage area.

Throughout its operations, SRPC has procedures, manual standards, and practices that address environmental compliance obligations set forth in the Environmental Compliance Certificate (ECC); the original, updated, and supplemental Environmental Impact Study (EIS); and in other applicable permits, regulatory approvals, laws, rules, and regulations. The Company also maintains links with stakeholders for collaborative partnerships toward environmental protection and conservation. The MMT MOA includes guidelines for raising and resolving environment-related grievances.

To cover expenses for the rehabilitation and restoration of affected areas and other project-related impacts that are not already addressed through other mitigation measures or programs, and are not offset by positive impacts of the Project, it maintains an Environmental guarantee

This page contains the discussion on EU5, EN18, EN20, EN21 and EN23.



Fund (EgF) that serves as a contingency fund. The EgF is composed of two components—the EgF Cash Fund and EgF Trust Fund—and comes in the form of interest-bearing and cash accounts initially amounting to ₱800,000 and ₱5,000,000, respectively.

SRPC also maintains an Environmental Monitoring Fund (EMF), a fund in support of the activities of the MMT for compliance monitoring. The EMF was established as agreed upon and specified in the MMT memorandum of agreement between the DENR, SRPC, NPC, local government units, and other MMT representatives. The fund is an interest-bearing account initially amounting to ₱1,000,000 and is meant to cover the costs of the MMT monitoring activities. Such activities include transportation, board and lodging, MMT meetings, honoraria and allowances, collection and transport of samples, laboratory analyses, documentation and reporting, and other related expenses. SRPC replenishes said accounts whenever balances fall below half of the agreed initial amount.

AS OF MARCH 31, 2015

Particulars Amount (₱)

SRPC EGF Trust Fund 5,686,946.48

SRPC EGF Cash Fund 897,877.17

SRPC EMF 894,610.65

Environmental Expense Apr 2012-Feb 2015 (Envi Compliance)Monitoring and Audits, Ground Maintenance and SWM, Reservoir Maintenance, MMT and MMT/EGF

15,025,000.28

ToTAL 22,504,434.58


In the little sitio of Narra, a 15-minute drive from the SRPC compound in San Manuel, there run irrigation canals by the rice fields and the main pathway separating lines of houses. Running in these canals is water that is clean, cool, and clear. When one bends over, there are pebbles at the bottom that could be mistaken for gold when the sun hits the water just right—reminiscent of those times when the Agno River was known for the gold that could be found therein.

But another precious commodity shines bright under the sun in Pangasinan—the pale yellow grains of palay (rice), so that irrigating these rice fields and farmlands is a critical deliverable of the multipurpose project.

As the main component of the SRMP, irrigation was conceptualized during the planning stage of the project. The San Roque reservoir is one big impoundment of water to provide year round irrigation of up to 36,000 hectares of farmland across 18 Pangasinan municipalities downstream of the Agno river.

The peaking power production of SRPC serves as the regulating mechanism in releasing water to meet the daily requirements of farmers. On the average, the San Roque reservoir releases 80 to 120 cubic meters of water per second to be impounded by the NIA re-regulating pond.

In the past, hordes of farmers trooped to the SRPC compound to complain of losses due to drought. Today, with the completion of the NIA re-regulating pond and the SRPC’s strict observance of the San Roque Reservoir Operation Rule Curve in peaking power generation, much has improved in the efficient management of water.

SPOTLIGHT:

Irrigation

Water connects SRPC to its neighboring communities and their needs. As such,the Company sets itself as a benchmark in efficient environmental stewardship so that there is clean and abundant water supply for irrigation.



harvest is good, people do not have to borrow money.)

As it fulfills its peaking power thrust, SRPC works closely with all the relevant stakeholders to make sure that the canals always glisten with abundant clear water running through them. In fact, water collected and impounded in the reservoir helps in the process of water recharge in downstream communities, and there has been no apparent change in the level of groundwater as a result of the Project’s operation. At the same time, the residents also share that the irrigation canals do not overflow even during typhoon season.

More precious than gold, water energizes the lives not only of the immediate communities, but the larger Philippine society as these farmers provide food for a greater number of people.

The farmer’s organization coordinates with the NIA and presents their irrigation dispatch requirements in a bi-annual meeting that includes the NPC, SRPC, the NWRB, the SPDC, and PSALM.

Because of the regular communication with the farmers on the daily volume of clean water that is required to help irrigate farmlands, SRPC has not heard of any complaints from farmers due to lack of irrigation during the reporting period.

gregoria Abad, treasurer of the Sitio Narra Farmer Irrigators Association, took time out from a microfinance meeting to say that she has no problem with the irrigation component. “Dire-diretso yung tubig, ‘di hirap yung palay. Kapag maganda yung ani, hindi namomroblema ang mga tao sa pag-aabono.” (The water flows continuously and the rice grows easily. When the


Energizing the lives of millions of Filipinos by providing them with clean, reliable power requires the exemplary performance and high productivity from each SRPC employee.

Channeling Greater Productivity

• Occupational Health and Safety

• Employee Welfare

• Training and Development


The capabilities of our employees are the building blocks of SRPC’s performance. With this in mind, the Company makes sure to promote the advancement of its human resources and exemplary health

and safety practices as a way of life. In effect, SRPC’s performance exceeds stakeholder expectations and industry standards and in return, the Company provides its employees with a safe and beneficial work environment where they can flourish and grow.

Occupational Health and Safety

Occupational Health and Safety (OHS) is the primary commitment of each and every employee throughout SRPC’s operations. For five straight years, the Company has maintained its No Lost Time Accident (NLTA) rate, reflecting a safety performance record of 1.4 million safe work hours as of the end of the reporting period.

The Company’s Safety Policy emphasizes the connection between employee welfare and Company productivity, and covers all regular employees and contractors. SRPC has a well-represented Safety and Health Committee that serves as the decision-making body addressing all safety issues. It is led by the Senior Vice President for Operations and Site Administrator as Chair and Engineering and Operations Manager as Co-Chair, and supported by the Senior Vice President for Technical Matters

(Vice Chairman), a safety engineer, 10 regular employees in executive and managerial positions, and five contractor’s employees from maintenance, security, medical services, and the food concessionaire. Seventy percent of the Safety and Health Committee members comes from SRPC while the remaining percentage comes from the contractor's group.

With the guidance of the Safety and Health Committee and the Technical Improvement and Audit group (TIAg), the Company makes sure that all activities, including those of the contractors, undergo the Job Hazard Analysis (JHA) and Safety Assessment. Safety inspections and audit practices are performed to measure the Company’s compliance with OHS standards, which include the Department of Labor and Employment’s (DOLE) Technical Safety Inspection on Electrical/Mechanical Equipment, Risk Assessment Audit of Power generating Components, Fire Safety Inspection by the Bureau of Fire Protection, Fire Protection System Audit by a third party entity, and the Safety Management Systems Audit by a third-party DOLE-accredited entity.

To strengthen SRPC's safety culture and to make safety an integral part in their nature, the Operations and Maintenance team conducts daily Toolbox Meetings. At these meetings, the team reviews the status of all work activities, and disseminates and discusses job hazard analyses with everyone for their understanding and full compliance. Prevhealth, Inc., the Company’s health care provider, issues regular safety and health alert and bulletins for the reference and information of all employees. SRPC also holds annual Safety Day celebrations.

NO LOST TIME ACCIDENT

Reporting Period Work Hours Rendered Number of Personnel

2012-2013 287,732 148

2013-2014 317,201 156

2014-2015 315,875 166

This page contains the discussion on LA5, LA6 and EU17.



Safety training continues to be a priority. The Safety and Engineering technical staff are annually sent on a two-week-long observation trip to one of Kansai Electric Power Company’s hydro power plants; afterward, they recommend best practices that can be adopted by SRPC. The Company also conducted 11 training sessions attended by 389 regular employees and contractors, eight of which were attended by 174 contractors. The safety topics covered were aligned with the nature of the job and the requirements of the employees to be able to deliver quality performances without compromising their safety.

As a large power company with an institutionalized OHS culture, SRPC understands its role in shaping the OHS practices of its suppliers by encouraging them to comply with labor laws and safety regulations. For example, SRPC has a partnership with the DOLE’s KAPATIRAN WISE-TAV Program. Through this program, the Company serves as a “big brother” to its suppliers, sharing its knowledge and resources to help them improve their own work conditions, and empowering them to serve as big brothers to their own suppliers, creating a ripple effect in the adoption of OHS standards. This program also helps SRPC oversee the compliance of its contractors and sub-contractors with the labor and safety standards during their service contract with the Company.

SRPC also participates in the DOLE’s Joint Assessment Inspection of its long-term service contractors. Labor Law Compliance Officers (LLCOs) from DOLE Region 1 lead this inspection, and the compliance with labor laws and OHS standards of five long-term service contractors were evaluated during the reporting period. Those assessed without any noted violations or non-compliance to standards were awarded a Certificate of Compliance.

There were no reported injuries, leaves without pay, suspensions or prolonged sick leaves caused by any work-related cases for the reporting period, either among SRPC’s employees or the contractor’s employees. Safety Orientations are conducted for all new personnel and contractors; these provide training sessions for safety awareness. The Operations and Maintenance personnel, in particular, are highly exposed to certain hazards in the workplace. Common hazards include working at dizzying heights, exposure to energized and rotating

This page contains the discussion on LA6, LA7, LA14 and LA15.


equipment, working in confined areas, and possible submergence. But based on the results of the Annual Medical Examination conducted by a third-party provider, there is no recorded incidence of a specific disease resulting from an occupational activity. As such, SRPC did not receive nor was issued any health and safety non-compliance incident report during the reporting period.

But even the most rigorous of safety cultures cannot avoid certain natural circumstances. There were 17 cases of grass fires near the Company’s facilities during the reporting period, but these incidents did not damage Company property. Nine minor non-collision vehicular incidents also took place, but these only resulted in dents and scratches. No injuries or fatalities involving the employees and the public resulted from these incidents.

TYPES OF SAFETY TRAININg

Safety Training Description Participants

SRPC Regular Employees

Contractors' Employees

LUKAS Rescue Combination Tool Training Seminar 19 35

Creating A Positive Safety Culture 2

Firetruck Operation and Maintenance Refresher Training 28 12

Hazard Identification, Risk Assessment and Risk Control Seminar 32 15

NC2 Defensive Driving Certification Training Course 34 18

Emergency Management Response Orientation Course 2 22

Advanced 5S Training and Workshop 17

Standard First Aid and Basic Life Support Training Course 39

Basic Occupational Safety and Health Training Course 30 18

Ergonomics in the Workplace 2

Basic Vehicle Maintenance Workshop Course 23 8

Employee Welfare

SRPC values its employees, and as such, its Human Resources (HR) policies were crafted with the welfare of the employee in mind. The Company makes sure this manifests in the implemented policies and programs geared toward rewarding excellent performances to improve the lives of its people and their families.

Workforce ProfileMajority of the regular employees are hired locally, with 41% coming from the province of Pangasinan, followed by 27% from the Cordillera Administrative Region in Baguio and Benguet, 50% of whom are members of the indigenous groups like the Ibaloi, Kankaney, and Kalinga. The rest are from Metro Manila and other areas of Luzon, Visayas, and Mindanao. There are five employees from Japan and one from North America. There will be three employees hanging up their hats within the next five years—one Executive (expat), one Supervisory (Baguio City), and one rank and file (Pangasinan).

This page contains the discussion on LA2, LA9, EU15, EU18 and EU25.



The Company is cognizant of the fact the Philippine energy industry is very competitive, with the renewable power sector touted as the sunshine sector, therefore attracting major investments. SRPC’s competitive remuneration system reflects the responsibilities and duties of the position and matches such with an employee’s competency—thus, no distinction is made with regard to an employee’s gender with regard to remuneration.

Majority of employees are male and are mostly part of the Operations and Maintenance group. Three out of the 14 Executives/Managers and two out of the eight Supervisory employees are female. Of the remaining 73 staff, 68% compose the male population, which is mostly made up of technical personnel, while the 32% female employees are generally in the administrative offices—making the ratio of the female to the male population 1:2.3 while the base rate of the salaries of the males and females is 1.00:3.00.

Performance IncentivesThe Company also provides regular employees performance incentives and bonuses, promotional increases, and overtime entitlements. The annual salary increases and performance bonuses are determined using an annual performance assessment conducted at the end of the fiscal year. This appraisal is based on the key result areas and performance indicators identified at the beginning of the performance planning meetings of every department. Before the final assessment, managers may conduct a semi-annual review to monitor employees' progress. The Company ensures that all employees from every level, from managers and down the ranks, undergo this program.

TOTAL NuMBER OF EMPLOYEES

Fiscal Year Total Number of Employees

March 2013 94

March 2014 94

March 2015 95

TOTAL NuMBER OF EMPLOYEESBY EMPLOYMENT STATuS

2013 2014 2015

Regular 94 94 95

Probationary 0 1 2

Contractual 20 22 24

Cadet Engineer 11 9 4

ToTAL 125 126 123

The years 2013 and 2014 saw no change in the number of regular employees (top table), although this does not mean there was no movement in and out of the Company, as the Employee Movements Table on page 68 indicates.

Employees are protected by group life and accident insurance and group medical insurance; the latter covers hospitalization, out-patient consultation and medicine reimbursement and is extended to the families of the employees. SRPC shoulders the total premiums of the insurance. For retirement benefits and other details, see page 37.

Other benefits the Company provides its regular employees are housing, transportation, rice and meal allowances, mobile communications subsidies, the provision of Company uniforms and personal protective equipment, the service awards, and leave incentives that are above and beyond what is mandated by law. During the reporting period, five female and five male employees availed of the maternity and paternity leaves, and the Rate of Return was

This page contains the discussion on G4-9, G4-10, G4-11, LA2 and LA3.


pegged at 100%. The retention rate 12 months after the leave was also at 100%.

In 2012, the Human Resources Department conducted an Organizational Climate Survey titled 100 Ways-Employees’ View of SRPC in Different Angles. This is the first survey conducted to discover the employees’ perception of their working conditions and how the Management treats them. It is also the basis for further improving the Company’s management systems and programs for the employees. The survey revealed that the employees are generally satisfied with their employment conditions, compensation, professional development, and the way Management treats them.

EMPLOYEE PROFILE BY gENDER

2013 2014 2015Number Percentage Number Percentage Number Percentage

Male 66 70.2% 67 71.3% 67 70.5%

Female 28 29.8% 27 28.7% 28 29.4%

ToTAL 94 100% 94 100% 95 100%

AVERAgE AgE ACROSS THE WORKFORCE*

Job Level Average Age

Regular 40

Executives 51

Managerial 46

Supervisory 46

Staff 38

*As of March 2015

EMPLOYEE PROFILE BY gENDER AND AgE

Age GroupMarch 2013 March 2014 March 2015

Female Male Female Male Female Male

20-29 3 12 3 10 4 10

30-39 11 17 9 22 10 22

40-49 12 31 12 24 11 23

50-59 2 5 3 9 3 11

60 above 0 1 0 2 0 1

ToTAL 28 66 27 67 28 67

TOTAL NuMBER OF CONTRACTORS’ EMPLOYEES

2013 2014 2015

Security 87 92 88

Ground, Building, and Village Maintenance

77 85 76

Road Maintenance 17 15 15

Canteen Concessionaire

23 25 18

Others (includes health provider, drivers, etc)

22 45 23

ToTAL 226 241 220

TRAININg HOuRS ALLOTTED FOR HIERARCHY OF EMPLOYEES

Job Category Percentage of Training Hours

Executives 1.0%

Managerial 8.5%

Supervisory 9.0%

Staff 81.5%

TRAININg COSTS

YearTotal Number of Training Hours

Training cost per manhour (in ₱)

Total Training Costs Incurred (in ₱)

2013 10,234 1,225.60 12.9M

2014 9,324 1,253.58 11.4M

This page contains the discussion on G4-10, G4-11, LA9 and LA10.



EMPLOYEE MOVEMENTS

Fiscal Year New Hires

Separations thru Resignation,

Retirement, Transfer, Redundancy, Termination

April 2014 -March 2015

Male -1 Male - 4Female - 1


Male – 3Female – 2

Male – 1Female – 1


Male - 2 Male - 1

Reason To fill-out vacancies 3 Resignations2 Redundancy1 Retirement1 Transfer1 Termination

Location 1 from Manila 5 from Pangasinan1 from Baguio1 from La Union

1 from Bicol Region4 from Pangasinan1 from Manila1 from Baguio1 from Japan

Age Group 20-29 = 630-39 = 240-49 = 050-59 = 0

20-29 = 130-39 = 140-49 = 450-59 = 2

Work Assignment

CSR = 0MKT = 0O&M = 8

CSR = 1MKT = 2O&M = 5

Note: There are two (2) PSC Technicians under Probation for six months as of March 2015 to fill-out regular positions.

REguLAR EMPLOYEE PROFILE BY REgION AND NATIONALITY

Japan N. America Pangasinan Baguio/Benguet Others TOTAL

2013 2014 2015 2013 2014 2015 2013 2014 2015 2013 2014 2015 2013 2014 2015 2013 2014 2015

Executive 3 3 2 1 1 1 1 1 0 0 0 0 1 1 1 6 6 4

Managerial 2 2 2 0 0 0 1 1 0 3 4 4 3 3 3 9 10 9

Supervisory 0 0 0 0 0 0 1 1 1 5 4 4 1 2 3 7 7 8

Staff 0 0 0 0 0 0 36 36 36 17 17 17 19 18 21 72 71 74

ToTAL 5 5 4 1 1 1 39 39 37 25 25 25 24 24 28 94 94 95

Percentage 5.0% 5.0% 4.2% 1.0% 1.0% 1.0% 41.5% 41.5% 38.9% 26.6% 26.6% 27.3% 25.9% 25.9% 29.4% 100.0% 100.0% 100.0%

Training and Development

SRPC remains committed to continuously developing and strengthening the professional and personal competencies of its employees. In 2014, a total of 9,324 hours were spent for various training sessions to improve the employees’ capacities and capabilities. This is, however, 910 hours less than the previous year because in 2014, the results of the Skills and Knowledge Assessment showed that substantial Competency gaps have been addressed through previous trainings; thus, the succeeding training plans only focused on refresher courses and other training requirements.

The annual performance appraisal process provides the Company with insights into the development needs of its employees so that they can advance in their careers. Management training is not only limited to the supervisors and managers; it is also administered to employees who have exhibited leadership skills, should they take the opportunity.

This page contains the discussion on G4-10, LA1, LA2, LA9 and LA11.


SRPC allots a substantial budget for professional training, whether the training is held locally or internationally. In particular, SRPC sends Technical Staff from the Operations and Maintenance group to Japan for three months in order to experience hands-on training on overhauling, which is conducted in one of Kansai Electric Power Company’s hydro power plants. This is a five-year training program for key technical staff who will be involved in the 2018 major inspection of the SRHEPP. This also serves

as an incentive that inspires and encourages employees to be more productive.

A Leadership Development Program was established in 2012 so that a pool of qualified staff will be ready and able to assume higher levels of responsibility throughout the entire organization. This program ensures SRPC’s organizational continuity, as it maintains its prime position as an excellent provider of reliable hydroelectric power and maximizes the potential



and productivity of its personnel, thus enhancing the Company’s corporate performance. The said program, relaunched in 2014, was made part of the performance goals of managers to train successor to key positions in the organization.

Likewise, the Company invited financial planning advisers to educate its employees on finances and investments, thus enabling them to make decisions regarding their money and whether or not to contribute to the Company’s Provident Fund.


Sustaining its social license to operate is the norm for SRPC by engaging stakeholders for community development while continuing to provide reliable electricity as energy demand peaks nationwide.

Surging Forward to Better Communities

• Impacts and Investment

• Community-driven Enterprise Development


The social media boom of the last few years has taught businesses big and small that they cannot afford to ignore their customers and stakeholders if they want to continue operating. License to operate is

no longer a concept confined to a piece of paper. Businesses have to work closely and in earnest with their host communities and stakeholders, gaining their trust and, ultimately, the social license to operate. It is a difficult endeavor as social license being a subjective concept, but one that brings greater rewards to any company if undertaken seriously.

With this in mind, SRPC has endeavored to make responsible corporate citizenship the core of all of its activities within the SRHEPP and outside it, and to make Social Responsibility one of its Core Values.

Impacts and Investments

SRPC’s operations are located in the three municipalities of Itogon (Benguet), San Manuel, and San Nicolas (Pangasinan) and covers a geographic area within two regions comprising 9,550 hectares of forest land. The Agno River also runs through this land; it is from this river and the surrounding forests that the Company and the municipalities get their resources for the operations and everyday living, respectively. It can be a life vulnerable to great uncertainties, and SRPC is continuously nurturing the positive changes the Company effects and striving to mitigate any negative change.

The Company is well aware of the possible negative effects on the host and surrounding communities, which are direct results of weather disturbances during both wet and dry seasons. Such was the case in 2009, when the NPC and

PAgASA instructed the Company to release water from the San Roque Reservoir due to a very high water inflow from the Agno’s tributaries and rainfall. This caused concern among the stakeholders regarding possible deep flooding, and ever since, SRPC has jointly undertaken with the NPC and PAgASA efforts to inform the communities about the flood attenuation thrust of the San Roque Multipurpose Project.

The SRPC makes sure to create long-lasting beneficial impact on its stakeholder communities with its presence in Pangasinan. Thus, SRPC’s Office of Corporate Social Responsibility has been incorporated into the main organizational structure since 2006, when the Company committed to the vision of energizing lives. The Company then established the San Roque Power Foundation, Inc. (SRPFI) in 2010 in order to provide more focus on the needs of the people affected by the SRMP and to intensify the impact of intervention on the neighboring communities that need its assistance.

The Company participates and invests in the implementation of community development programs and projects for the SRMP host communities. The target groups for these programs include children, youth, women, and the elderly. The SRPC’s intervention is guided by the Strategic Social Investment Plan (SSIP), formulated in consultation with assisted communities and partners. The SSIP consists of “three pillars” or priority interventions: livelihood and enterprise development; education and healthcare; and environmental protection. It is aligned with several Millennium Development goals such as poverty, primary education, and environmental sustainability. This plan is one of the Company’s best practices along this indicator.

This page contains the discussion on SO1 and SO2.



Community-driven Enterprise Development

To operationalize these commitments, SRPC’s actions are guided by the Community-Driven Enterprise Development (CDED), a development paradigm conceptualized with SRPC partners in the implementation of its programs, projects, and activities in the communities of Itogon, San Nicolas, and San Manuel.

SRPC places importance on the alignment of its interventions with national and international policies and programs. To synergize efforts, the Company voluntarily adopted poverty alleviation standards and criteria as stipulated under Republic Act 8425, otherwise known as the Social Reform and Poverty Alleviation Act. The Millennium Development goals also served as guidelines in the CSR programs up until this year.

This page contains the discussion on SO1, SO2 and EU22.


The construction of the SRMP, which took place between 1998 and 2003, displaced 660 families, 287 of which were resettled in the NPC-developed resettlement sites and the other 373 opting to relocate on their own. The NPC compensated all the families displaced by the Project, whether in affected properties or lost resources. In 2014, four livelihood associations were organized to access both government and private donor assistance to livelihood projects that are being implemented by assisted households within the resettlement sites. To date, the Company complements the social development programs started by the NPC.

Livelihood and Enterprise DevelopmentThis is part of the commitment of the SRPC, through the SRPFI, to build sustainable communities via interventions on livelihood and enterprise development. The Company helps partner communities gain access to financial business capital, capacity-enhancement, institution-building, support infrastructure, and linkages to other support organizations. Neighboring communities have since been able to collectively enjoy various forms of assistance from the government and private organizations ranging

from receiving seeds to the building of various livelihood support infrastructures.

This then gave rise to the Baro a Namnama Multipurpose Cooperative (BANMPC) on February 02, 2015. Initiated by the SRPFI, it is envisioned that this local cooperative will be the impetus for building sustainable communities within Company-assisted areas.

Baro a Namnama is one of the Company’s best practices. The Baro A Namnama Multipurpose Cooperative (BANMPC) was established to institutionalize the gains of the MF Project. It comprises members from the affected communities of the SRMP. The BANMPC is presently being assisted by the SRPFI until the members developed the capability to manage the cooperative on their own. The Cooperative aims to: institutionalize and localize the provision of business capital; create a thrift and savings facility; generate funds to further support business activities; and become a facility for assisting in the consolidation and trading of products generated from assisted communities within host municipalities.

This page contains the discussion on SO1, SO2 and EU22.



HealthThe Company aligns its initiatives with the health programs of the government, such as the anti-dengue campaigns. The Company contributes to the construction and repair of health infrastructure in the host communities, undertakes programs that promote the proper use of water and the importance of personal hygiene and public sanitation, and supports capability-building programs for community health volunteers. It also conducts supplemental feeding for elementary school children to promote nutrition and to improve attendance rates and performance.

EnvironmentFinally, for environmental protection, the Company is dedicated to improving the environment where it operates. It continues its tree library/arboretum project, bird and wildlife conservation, fish stock enhancement, the furtherance of the Philippine Eagle conservation project, and initiates campaigns to spread environmental awareness. The environmental programs are discussed further in the environmental section of this Report.

EducationIn terms of the educational programs, the Company conducted several learning projects and sustained campaigns for children such as Donate A Book, Make Reading Fun to improve the reading proficiency of school children and Summer Arts Workshop to enhance children’s creativity and artistic talents. The Company also supports the construction and repair of educational infrastructures through the Adopt A School Program and Brigada Eskwela. The Company also provides a monthly subsidy to volunteer teachers. For the reporting period, the Company assisted 63 volunteer teachers from the three host municipalities.

In 2012, the Reading, Mathematics, and Science Proficiency Program developed its own culture-based workbooks written by teachers from the Department of Education’s Pangasinan Division II and Itogon District II. These workbooks are now being used by grade II and III pupils from the 89 public elementary schools supported by the program. The textbooks are as follows: The Science and Health III Workbook; Let’s Read, Think, Speak, and Write English; and The World of Language and Reading.

This page contains the discussion on SO1 and SO2.

The Legacy ofRyukichi Kawaguchi

"Our slogan is to provide ‘the power to energize lives'. While

being profitable, we have prioritized

implementing projects and

programs in the areas of livelihood

and enterprise development—

promoting quality education, healthcare,

and environmental protection."



Walking down the hallways of the SRPC’s corporate headquarters, Ryukichi Kawaguchi’s stoic expression seems to give off a distant air. As President and CEO of a burgeoning hydroelectric Company comprising over 100 employees, one must be focused, driven, determined. But underneath all that lies a strong compassion for those same employees, that same Company.

At office parties, Technical Purchasing Assistant Percival Pedro would see him going around the tables, talking and listening to the employees. “He always replies to text messages,” shares Pedro.

Accounting Manager Rheena De guzman adds, “He seems very strict and has a stern face, but he is very dedicated and serious about his objectives.”

In the 23 years or so that Kawaguchi—or ‘RK,’ as his employees like to call him—has been working in the Philippines, at least half of that time has been devoted to leading the San Roque Power Corporation to a cleaner, greener, more socially-conscious future, and to putting together an example of good corporate governance for its competitors in the field of clean energy. The hydroelectric power Company began its operations in 2003 and has a concession period of 25 years. In 2028, as a consequence of its nature as a Build-Operate-Transfer project, all its assets will be returned to the Philippine government and managed by the Strategic Power Development Corporation.

However, his time as President and CEO is about to come to a close. It’s a testament to his leadership that his subordinates will remember him best as someone who truly cared for their opinions and well-being.

Electrical Maintenance Supervisor Ricardo Juan describes Kawaguchi as, “A simple but effective leader, and a humble man, who is nonetheless comparable to a teacher of a very hard subject at school." According to Human Resources Assistant Michael Sese, “He is not conventional, but in a way, he still teaches you that shortcuts cannot substitute learning the fundamentals, and that self-discipline is still the highest form of audit.”

“He is a leader who commands authority, but at the same time, he is compassionate about the needs of each of the employees,” says Edgar Allan Villegas, a Maintenance Manager. “He seems to know every employee personally—even knows everyone by their first names. You don’t see him that often, but just like a typical father, you know that he is always there behind the scenes, ready to give support.”

Dam Instrumentation Engineer Jeric B. Codiñera described him as a leader with profound knowledge. “I will remember him best for his sphere of influence that motivates his troops at all levels of the organization towards one common goal.”

Passionate About Sustainability, Compassionate to fellow Man

under Kawaguchi’s tenure as President and CEO, the Company committed itself to helping the nation build sustainable communities by providing reliable, renewable energy to power the country’s growth, while making sure it shared its value with its stakeholders. He says, “Our slogan is to provide ‘the power to energize lives.' While being profitable, we have prioritized implementing projects and programs in the areas of livelihood and

The Legacy of Ryukichi Kawaguchi


enterprise development—promoting quality education, healthcare, and environmental protection.”

It was through his initiative that SRPC created the Corporate Social Responsibility department in 2006, and the San Roque Power Foundation, Inc. shortly after. In 2012, Kawaguchi was accorded the Silver Medal for CSR Leadership Award by the Asia-wide global CSR Awards, affirming that the mark of a true leader is

measured by the good that one has been able to share with a greater majority.

The global CSR Awards, organized by The Pinnacle group International, is Asia’s most prestigious award for Corporate Social Responsibility.

“RK’s projects that had the most impact on stakeholders are those related to education and livelihood,” says Lalaine Estayo, a senior


accountant. “As the saying goes, give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime. This aptly describes the thrust of RK’s mission for the project’s affected communities."

For Vice President for CSR Tommy T. Valdez, it was the Microfinance Project. Valdez says, "the Microfinance Project provided a sustainable solution to the basic problem of the people in starting their livelihood projects. The implementation of the Microfinance Project also developed the sense of accountability and responsibility among the beneficiaries."

Chief Operations Superintendent Rubi Cuta opines that it was Kawaguchi’s securing Ancillary Services that had the most impact. “It resulted to SRPC’s management of water, which was earlier done by other agencies. This resulted to more efficient use of water to serve the Multipurpose objectives.”

In today’s ever-changing world, CSR and sustainability are key to a business’s responsible growth, for it does not divorce earning profit from accountability toward a business’s stakeholders or the resources found in the surrounding environment.

Companies with solid CSR and sustainability programs help create long-term business growth that protect the welfare of employees, and can go a long way in influencing employee behavior and boosting Company morale. The sustainability agenda promotes among employees a sense of purpose, and helps solidify loyalty to the Company and promote a vibrant workplace culture.

“RK will be remembered for motivating the lives of not only SRPC people but others. During his presidency, he touched countless of lives in the communities of Pangasinan and Benguet who are recipients of various social projects and assistance, and thus, SRPC became a Big Brother,” says Maintenance Planner Arnulfo Academia.

SRPC’s outreach programs were Pedro’s first exposure to CSR and he understands their importance to the Company. “Projects that help in maintaining the sustainability of a community are as important as those that help in maintaining the power plant. These programs will help the community become productive and independent; in the long run, the Company benefits, with smooth operations and less demands from the area. I believe that Sir RK has done his best for SRPC. He listens and decides with the best of intentions to improve benefits for the Company, community, and the stakeholders.”

SPRC’s willingness to undertake the global Reporting Initiative-based Sustainability Reporting Framework was, similarly, a thrust of Kawaguchi’s.

Sustainability reports provide stakeholders with essential information on the Company’s direction, as well as the areas potential for convergence and/or participation pertinent to delivery of outputs such as irrigation, hydro power, flood attenuation, and acceptable water quality. Because of this, SRPFI’s Program Coordination and Implementation Manager Arzel Manalili believes that Kawaguchi’s focus on sustainable performance has the most wide-ranging effect on the Company and its stakeholders. He says, “Mainstreaming



sustainability reporting will not only enhance objectivity of performance appraisal processes, but also increase productivity and define employee incentive systems, thus leading to a more sustainable organization.”

Inspirational Leader, Listener, Motivator

Kawaguchi also encouraged a culture of openness. He instituted Voice-Outs, regular sessions that take place every first Monday of the month where employees can personally express their concerns and issues to him, thus shortening the distance between the rank-and-file and the Management.

“When we launched the Voice-Out Meeting, the employees felt that they had a chance to air their concerns directly to the President and CEO of the Company,” says Human Resources Manager Rhona Apil. “During these meetings, RK listens to the employees. His presence, as well as his participation in the team workshops and games, has showed that he truly is reaching out also to our employees."

“It broke all barriers between an employee and a president,” adds Juan.

Kawaguchi’s HR programs has also made a resounding impact throughout the Company, and it was during his term that most of the benefits were enhanced. Academia shares, “There are countless improvements for employee benefits that were introduced. It shows that the employees always have a special place in RK’s heart, and his love motivates us to accomplish more.”

Sese best remembers Kawaguchi for helping him through habitual tardiness. “RK helped me

through patience and leading by example. He made me realize that if you want to change a bad habit, then you better have self-discipline. He once told me when I was late to work again, ‘Are you not ashamed? Your President comes to work on time every day—and I am not young and I can afford to be late because I am the President. But every day, I choose to get up and be on time, so no more excuses, no more reasoning. Just do it, be on time'."

Beyond Company grounds, Kawaguchi led the SRPC team in gaining the commitment and support of the host communities and local government units for the hydro power plant through development programs based on the actual needs of the community. The SRPFI went on to initiate and implement numerous community projects with heavy emphases on livelihood and enterprise development, education and health, and environmental protection.

With his retirement from SRPC, Kawaguchi leaves behind a legacy of leadership defined by responsibility and greater accountability. His brand of transformational leadership inspires everyone who has worked with him to aspire for more ambitious goals that improve the lives of more Filipinos.


Testimonials and Messages

“RK has been a different kind of President. My first impression of him is now totally different from what I know him to be through the past seven years I’ve worked with him. He is very dedicated and serious about his objectives.” Rheena De guzman Accounting

“I would like him to know that I am very grateful for his tenure as president. I would like him to know that he was really a blessing to many.”

Ricardo B. Juan Maintenance

“We are very grateful for the time he was our president, the inspirations and growth he caused, the blessings he gave, and the happy memories we all shared.” Rubi Cuta Operations

“I would like RK to know that he had not only made SRPC one of the finest, but also touched the lives of every employee, and most especially our families.”

Jeric B. Codiñera Engineering

“I will remember him best as a participative leader, because he values input from members of the Management team, but accepts the responsibility to make the final decision.”

Percival W. Pedro Purchasing

“I would like to tell him that he brought the Company into greater heights. It was during his time that responsive CSR projects were implemented and created a significant impact to the lives of the people affected by the project. It was during his time that the company started to adhere to sustainability reporting and eventually the preparation of the Company’s Sustainability Roadmap, a move that initiated the serious fulfillment of the Company’s vision in energizing lives.”

Tommy T. Valdez Corporate Social Responsibility

“He is very honest with his expenditures and limits. I’d like him to know that I’m lucky to be his secretary. He is a very compassionate person with a big heart.”

Angelica Olivar Accounting



“I will remember him best for his thoughtfulness in bringing ‘pasalubong’ every time he travels, the times that he comes out of his office to trade jokes and share stories with us, his love of books, and his passion for learning. I hope that he will always remember that during his time at SRPC, he was an inspiration to all of us. That aside from being the Company’s President and CEO, he is also a mentor, a role model and a father to us. He is a living example that a person is never too old to learn, to set new goals, or to dream. From him, I learned that the key to every great achievement is hard work; that to achieve your dreams, it is not a matter of being smart, it is a matter of being diligent.”

Lalaine A. Estayo Accounting

“Sir RK, we feel how much you love the Company, its employees, and the purpose by which the Company stands for. Having said that, please also know that we won’t fail you. Please accept my deepest gratitude for giving me the chance to work with a servant leader like yourself, and may god bless you more in your future endeavors.”

Arzel C. Manalili San Roque Power Foundation, Inc.

“I would like RK to know and always remember that he made SRPC a great place to work.”

Edgar Allan Villegas Maintenance

“I want to thank RK not just as an employee but as a person: for the knowledge he has shared with us, for the fatherly attention he has showed us, and his generosity in considering our proposed enhancements in our benefits and employee programs.”

Maria Rhona Liza J. Apil Human Resources

“Twice he has been my President, and I would like him to know that his presence was felt not only by me, but my family. His guidance, generosity, and his giving me the chance to work with him was an absolute honor. Thank you, and I will miss you, Sir RK.”

Michael A. Sese Human Resources

“RK is a true samurai. Although retired and should have been enjoying the fruits of his labor, when he was called to manage SRPC he devotedly accepted the offer. He is a real inspiration of a good follower and a leader—he walked extra miles of his career, to serve and inspire. Thank you for passing through San Roque Power Corporation as you walk the road to success and for sharing with us your achievements through your kindness and generosity.”

Arnulfo Academia Maintenance


Awards and Recognition

2015 Certificate of Recognition– Sustainable Livelihood Programfrom the Department of Social Welfare and Development – Region 1February 18, 201564th DSWD Anniversary Celebration Bauang, La union

2014 Perfect Safety Record Awardfrom Safety Organization of the Philippines, Inc. December, 4, 201447th National Industrial Safety Convention Crown Legacy Hotel, Baguio City

2014 Special Recognition–CSR in the Communityfrom the Sustainable Business Awards Philippines July 14, 2014Sustainable Business Awards Philippines 2014Dusit Thani, Manila

2013 Certificate of Recognitionfrom the Department of Education Adopt-A-School Program December 12, 2013Adopt-A-School ProgramDepEd Complex, Meralco Avenue, Pasig City

2013 Perfect Safety Awardfrom the Safety Organization of the Philippines, Inc. November 13-15, 201346th National Industrial Safety ConventionPearlmont Inn, Cagayan de Oro

2013 CSR Leadership Award to Mr. Tommy T. valdezfrom the CSR Excellence Leadership Recognition and World Marketing Summit MalaysiaSeptember 30, 2013World Marketing Summit Malaysia Putrajaya International Convention Center, Malaysia

2012 CSR Silver Leadership Award to Mr. Ryukichi kawaguchifrom the Annual global CSR Summit April 19, 20124th Annual global CSR SummitBoracay, Aklan


Sustainability Team Members

The SuSTAINABILITy CouNCILRyukichi Kawaguchi, President and CEOWilliam Connell, Senior Vice President for Operations and Site AdministratorKatsutoshi Aguro, Senior Vice President for Technical MattersCarlos M. Echevarria, Vice President, Treasurer, and Chief Finance OfficerTommy T. Valdez, Vice President for Corporate Social Responsibility and Security

The SuSTAINABILITy TeChNICAL WoRkING GRouPTommy T. Valdez, Head of the Sustainability Technical Working GroupRaymund N. Mariano, Engineering and Operations Manager, Engineering DepartmentEdgar Allan F. Villegas, Maintenance Manager, Maintenance DepartmentMarcel P. Ablog, Plant Systems and Communications Manager, Plant Systems and Communications DepartmentRubentheo P. Cuta, Chief Operations Superintendent, Operations DepartmentRheena Liza D. De guzman, Accounting Manager, Accounting and Finance DepartmentMa. Rhona Liza J. Apil, Human Resources Manager, Human Resources DepartmentMarita L. Ebojo, Purchasing Manager, Purchasing and Administration DepartmentRodelio S. Laigo, Senior Accountant, Accounting and Finance DepartmentMichael A. Sese, Human Resources Assistant, Human Resources DepartmentJayson P. Palado, Jr., Junior Operations Engineer, Operations DepartmentArnulfo V. Academia, Maintenance Planner, Maintenance DepartmentFrederick M. go, Maintenance Technician, Maintenance Department Paul F. Tello, Safety Engineer, Safety DepartmentMelania O. Abubo, Civil Engineer, Engineering DepartmentMichael D. Mercado, Plant Systems and Communications Technician, Plant Systems and Communications DepartmentMa. Concepcion P. Evanoso, IEC and Special Projects Supervisor, Corporate Social Responsibility DepartmentRochelle S. Idanan, Social Development Supervisor, Corporate Social Responsibility DepartmentTamcyn C. ubaldo, Environmental Specialist, Corporate Social Responsibility DepartmentLaurencio T. Cornel, Consultant, Corporate Social Responsibility DepartmentArzel S. Manalili, Program Coordination and Implementation Manager, San Roque Power Foundation, Inc.

TeChNICAL CoNSuLTANTSColin Legarde Hubo, Vice-Chair, Center for Social Responsibility, University of Asia and the PacificDaniele Coronacion, Faculty Member, Center for Social Responsibility, University of Asia and the PacificConcept, Editorial, Design, and Layout, Drink CommunicationsPhotography by Toto Labrador, John Carlo Despi, Renjie Tolentino, Annabelle Amantillo, and Klaus Nigge


External Review Committee Collective Statement*

SRPC operates a power peaking plant which is a critical component of the country’s electricity infrastructure. It has efficiently discharged its function to fulfill the contracted capacity of 110MW. It has contributed to the reliability of the grid with its 411MW maximum capability. The plant has also proved itself a reliable Ancillary Services Provider to NgCP. Positive externalities of the power plant operation and dam management consist of year-round irrigation of around 21,000 hectares in downstream farmlands in Pangasinan, flood attenuation for 16 towns affected by perennial flooding, and maintenance of the quality of water downstream (lower Agno River) through the reservoir that acts as a stilling pond. It coordinates with the NIA, the NPC and the NWRB in establishing Rule Curves for efficient management of the reservoir, to meet irrigation and energy demands, and flood attenuation.

It has generated significant economic value that has been efficiently distributed to capital providers (investors, owners), labor, and government (national and local). Economic value retained is geared for future capital investments and maintenance operations. Positive externalities accrue to the host communities in terms of direct economic benefits to laborers contracted by SRPC and local suppliers of goods and services, as well as in terms of indirect economic impacts (benefits) provided to host communities. Indirect economic impacts arise from a responsible Corporate Social

Responsibility (CSR) Program designed to improve livelihoods and general welfare of host communities.

In terms of Economic Sustainability, SRPC can be viewed as a socially responsible company that puts a premium not only on generating significant returns to investors but also positive economic impacts to host communities and the country in general. However, there is room to improve the CSR Program in terms of scale (e.g., expanding the number of schools or students assisted, improving local health units or centers especially in the upland barangays) and amount of financial assistance provided. CSR expenditures should be viewed as investments in human capital and host communities, which will generate positive externalities to the Company in the immediate future, and not as needless company expense that is simply required to maintain good relations with local communities.

One of the vital indicators of the sustainability of SRPC is its ability to keep the potential negative impacts of its operations on the environment at innocuous level and to capitalize on its potential favorable impacts to improve the overall quality of the environment, natural resources, and ecosystem services. The strategies adopted by SRPC to enhance the protection of the environment, natural resources, and ecosystem services are categorized according to the aspects of environmental impacts and protection being addressed. These include raw materials

University of Asia and the Pacific

* The role of the External Review Committee is to validate via external assurance activities the company's 2014 performance, as presented in its sustainability report, based on GRI.G4 sustainability reporting and disclosure requirements. The assurance given in this statement is based only on relevant data or information disclosed to and/or received by the Committee during the validation process, and does not extend to matters beyond such data or information and/or outside such process.

This page contains the discussion on G4-17 to G4-24 and G4-32.

2014 Sustainability Report 88This page contains the discussion on G4-17 to G4-24 and G4-32.

used, energy consumption, water, biodiversity, and protected areas, gHg emission, effluents and wastes, impacts of products and services, compliance with existing laws, transport, expenditures in environmental protection, track record of suppliers in environmental protection, and environmental grievance mechanism.

The Sustainability Report of SRPC discloses its efforts to minimize the adverse environmental impacts of its operations by adopting environment-friendly practices and by facilitating the restoration of ecosystems and the natural environment that were damaged in the course of its production activities. Validation of the report reveals that SRPC was diligent in keeping responsibility and commitment to promote the efficient and sustainable use of natural resources and the protection of the environment.

By nature, hydro power generation is not a natural resource extractive and consumptive activity. The SRPC generates hydroelectricity by harnessing the energy of impounded natural stream water through turbines that eventually release the water back to its normal course with practically unaltered physical and chemical properties. In addition, the impoundment of surface water in the reservoir reduces the amount of sediment load in the streamflow. Hence, SRPC operations do not degrade the water resources for irrigation and domestic uses, and the river as habitats of important wildlife species.

Paper is the only other major natural resource-based material that SRPC uses. Its report shows that the amount of paper that SRPC uses has been increasing, but there is a plan to reduce paper works through paperless office transactions. Through the years, there has been no known species of plants and animals that

were adversely affected by SRPC operation. The river and forest ecosystems within and around the SRMP reservation are adequately protected and maintained. Natural habitats that were damaged are either successfully restored or replaced by similar habitats established and protected in another area.

The solid waste management and wastewater treatment practices of SRPC protect soil and water from contamination and help conserve ecosystems and natural habitats inside and around the SRMP reservation. Most of the energy consumed by SRPC is from its own generated hydroelectricity. The fossil fuels they reported are used to run standby generator sets and service vehicles. On this account, SRPC does not significantly contribute to gHg emission. The implementation of energy-saving practices further helps reduce its carbon footprint. Transportation of personnel is the only major source of carbon emission attributable to SRPC operations. There are measures to reduce the use of such transportation and increase the use of state of the art teleconferencing facilities. Hydro power is classified as a clean energy. Hence the adverse downstream impacts of SRPC’s product are almost nil. The absence of records of violation of environmental regulations and the lack of grievances filed against the SRPC are proof of the effectiveness of its efforts to protect the environment and natural resources.

Moving forward, the SRPC’s environmental monitoring systems could be made more comprehensive to cover the areas upstream of the reservoir and downstream of the spillway all the way to the flood plains and coastal areas. The monitoring of biodiversity and ecosystems could be improved by adopting methods consistent with existing national and international protocols. Participation of


other stakeholders such as the Lgus, local communities, and research and academic institutions in environmental monitoring and protection could be expanded.

Freedom, equity, security, and human dignity (collectively, decent work) are important attributes of the World of Work at SRPC. The low turnover rate (separation rate minus accession rate) indicates that leaving the firm is not easy owing to job satisfaction and voice mechanisms. The Cadetship Training Program for licensed engineers, with about a dozen cadets yearly, contributes to the accession rate in the firm and is a best practice. Compensation is competitive. There is a good variety of benefits above the minimum in the gRI g4 Manual. The firm observes a seven-day notice period and there is open communication between the Management and employees. While there is no union or collective bargaining agreement, alternative forms of employee representation exist to boost work relations, e.g., general Assembly (every first Monday of the month), Toolbox Meeting (in all technical departments), Open Door Policy, Voice-Out, grievance Machinery (with formal processes).

On average, rank and file employees have higher training hours than managerial and supervisory employees while male employees have greater training hours than female employees. These are correlated to the firm’s gender ratio of about seven males to three females. The various training programs, designed to upgrade employee competencies, are significantly linked to enhanced workplace productivity and institutional memory. Workforce diversity is indicated by race, ethnicity, gender, and age. And SRPC has an Indigenous Peoples Development Plan.

There is joint assessment/inspection of contractors, who have been given Certificates of Compliance by the Department of Labor and Employment (DOLE). Employment and suppliers’ contracts contain provisions on human rights. Albeit, concerns have been raised about night shift differential and overtime pay, these reflect the need for wider dissemination among suppliers of DOLE’s new rules on labor laws compliance system, contracting or subcontracting, and the employment of night workers.

The establishment via the San Roque Power Foundation, Inc. of the Baro A Namnama Multipurpose Cooperative with 227 members, which is engaged in microfinance, among other welfare-enhancing activities in host communities, is another best practice.

All told, collaborative governance, which entails information exchange, action or movement harmonization, resource sharing, and capacity enhancement among SRPC and its various stakeholders, is an approach that is worth broadening and bolstering for more meaningful and empowering grievance-handling, productivity-gains sharing and participatory programs. Inherent to such an approach is the recognition of workers’ just shares in the fruits of production and, for the enterprise, reasonable returns to investment, expansion, and growth. Such an approach would also enrich reporting and disclosures.

Since the release of its first Sustainability Report for 2011, SRPC has made great strides in its contribution to the good of society through the responsible exercise of its mandate as an institution for irrigation, flood attenuation, and power generation. The completion and release of its 2012 Sustainability Roadmap, and now the

External Review Committee Collective Statement*



publication of a more comprehensive 2012-2014 Sustainability Report using the g4 format, reflect this continuing commitment to set more lofty goals to meet the needs of stakeholders through better services, and to monitor and disclose performance subject to the objective scrutiny of third party assurers.

The commitment to become an active and relevant player in social development in the community in which it operates, and to the nation as a whole, is captured by the gRI indicators that SRPC has adopted to disclose what it has achieved by far and what it seeks to achieve in the future. The indicators as well as other disclosures for society and product performance covering the period 2012-2014 generally meet the A rating for gRI standard for report content in terms of inclusiveness, sustainability context, materiality, and completeness and for quality in terms of balance, accuracy, timeliness, clarity, and reliability. SRPC’s report on society and product responsibility complies with the disclosure standards of the gRI.

The practice of regularly disclosing performance and setting management sustainability goals based on international standards has helped, and continues to help, SRPC in finding a balance among seemingly different and contradictory social and service commitments to various stakeholders, i.e., the need to release water to protect the dam or continue to supply power during storms while ensuring that irrigated farms are not inundated. As a consequence, SRPC has put in place compliance systems for regulatory demands as a power generation facility as well as obligations to irrigate the farms.

The Report indicates some significant strides in SRPC’s effort to improve on its present

performance reporting and monitoring. SRPC has completed and even posted online its Sustainability Roadmap showing the use of gRI standard protocol indicators. It has recently disclosed the outsourcing of its supplier accreditation to a third party using SRPC’s stringent accreditation standards. A Multi-Sector Monitoring Team (MMT) that facilitates, for stakeholders, feedback on performance and consultations, as well as inputs to decision making, has been set up. And there has been disclosure, formulation, and execution of a Strategic Social Investment plan (that is linked to some MDg goals), which serves as a roadmap for community engagement.

To improve on report quality and to capture a better appreciation of its social and service performance over time, SRPC may want to consider a time series of its social and operational indicators covering the reporting period from 2012-2014. To have more balance in reporting, SRPC may disclose the challenges it is facing to meet commitments to different stakeholders and in the implementation of its programs for communities.

On the whole, the Company’s 2014 performance, as presented in its Sustainability Report using the gRI g4 frame, complies with the standard reporting and disclosure guidelines and protocols.



San Roque Power Corporation – External Review Committee

dR. ATTy. joNAThAN SALe, Ph.d. (Chairperson, Assurer for Labor and Human Rights Performance)

He finished his Bachelor of Arts (Political Science), Bachelor of Laws, Master of Industrial Relations (with academic excellence), and Doctor of Public Administration (as top graduate) at the university of the Philippines (uP) Diliman. A member of the Philippine Bar, Dr. Sale is Associate Professor and Dean at the uP School of Labor and Industrial Relations. Dr. Sale received the uP Diliman Centennial Faculty grant Award in 2012 and 2013 and the uP International Publication Award twice in 2014. He was cited as an expert contributor to the World Justice Project Rule of Law Index for 2010, 2011, and 2014. He received the 2010 Natatanging Alumni Award for Research and Labor Education. As a lawyer, he has counseled for labor, business, among others, in different venues. Dr. Sale’s pleadings and practice have contributed to labor jurisprudence via Supreme Court and Court of Appeals decisions concerning workers’ rights, benefits and tenure, and management prerogatives. He has lectured in the uP Law Center’s Mandatory Continuing Legal Education (MCLE) Program on Human Resource Management in the Public Sector and Changes in Philippine Labor Relations Policy. Dr. Sale has published researches in the peer-reviewed Philippine Journal of Labor

and Industrial Relations (uP), Ontario International Development Agency International Journal of Sustainable Development (Canada), Social Science Research Network, World Technopolis Review (South Korea), Bulletin of Comparative Labour Relations (Kluwer Law International, The Netherlands), The Economic and Labour Relations Review (university of New South Wales, Australia; SAgE Publications), Journal of the Philippine Association on Voluntary Arbitration, and others. He has disseminated research in conferences of the International Society for Labour and Social Security Laws, International Labour and Employment Relations Association, World Technopolis Association, Working-Class Studies Association, as well as the International Labour Process Conference, How Class Works Conference, and so on. A recent publication in the Philippine Journal of Labor and Industrial Relations is Classifying the Legal System of the Philippines: A Preliminary Analysis with Reference to Labor Law which Dr. Sale co-authored with uP Visiting Professor Petra Mahy.


dR. WINSToN CoNRAd PAdojINoG, dBA (Member, Assurer for Society and Product Responsibility Performance)

Dr. Winston Padojinog or Stan – a professor of Industrial Economics and Strategic Management – is currently the Dean of the School of Management of the university of Asia and the Pacific and Chairman of its operations committee. He is also a senior research fellow of the Center for Research and Communication Foundation, Inc. – one of the foremost industry and policy think tank of the country. His research interest as well as his consultancy work revolves around business and industry policy and competitive strategies as well as overall business sustainability initiatives. Related to these fields, he is regularly consulted by medium to large-scale companies of various industries that are involved in property, energy, mining, tourism, food, and construction, among others. He has served as policy advisor to a number of industry associations like the SEIPI, Philippine Franchise Association, the Subdivision and Housing Developers Association, and to over 20 local government units. Stan is frequently invited to speak in international and local forums to discuss issues on competitive strategy, sustainability and industry policy. In 1989, he obtained his Bachelors of Arts degree double majors in Economics and Management from the University of the Philippines – Visayas as a

student scholar and in 1991 his Master’s Degree in Industrial Economics in the Center for Research and Communication as a scholar of the Hanns Siedel Stiftung Foundation of germany. He obtained his Doctor of Business Administration degree in 2009 at the De La Salle university’s graduate School of Business. In the same year, he accomplished the International Faculty Program of the IESE Business School in Barcelona, Spain. Since then, he has been working closely with IESE Business School in bringing to Southeast Asia a top-notch executive education to senior executives and business owners. Stan is the incoming fourth university president of the university of Asia and the Pacific. His investiture will be on June 2015.


dR. ReX vICToR CRuz, Ph.d.(Member, Assurer for Environment Performance)

Rex Victor O. Cruz, PhD is a full professor at the university of the Philippines Los Banos (uPLB) teaching at the College of Forestry and Natural Resources (CFNR). He obtained his bachelor and masteral degrees in forestry at uPLB and his doctoral degree at the university of Arizona. His major fields of interests and expertise are forestry, watershed management, environment and natural resources management, upland development, land use planning, and climate change. He holds the title of uP Scientist III in recognition of his productivity in research, extension, and development. He is a former director of the Forestry Development Center (1994-2000), former dean of the CFNR (2007-2011), and former Chancellor of uPLB (2011-2014). He was also a member of the uN Intergovernmental Panel on Climate Change (IPCC) in 1992-1995; 1997-2000; and 2004-2007. Currently he leads two national research and development programs in watershed management and upland development, and serves as the Director of Environmental Forestry Program of uPLB.

San Roque Power Corporation –External Review Committee

dR. GILBeRTo LLANTo, Ph.d. (Member, Assurer for Economic Performance)

President of the Philippine Institute for Development Studies, foremost government policy think tank. He is Regional Coordinator of the East Asian Development Network, a network of East Asian research institutes under the global Development Network engaged in policy research and capacity building; Lead Convenor of the Philippine APEC Study Center Network; Associate Editor of the Philippine Review of Economics; Member of the Academic Steering Committee on Financial Inclusion of the International Cooperative and Mutual Insurance Federation (ICMIF united Kingdom); Member, Advisory Council of the Microfinance Council of the Philippines; Member, National Research Council of the Philippines; Member of the Technical Committee on Economics of the Commission on Higher Education. He was formerly Deputy Director-general [undersecretary] of the National Economic and Development Authority, President of the Philippine Economic Society, and Executive Director of the Agricultural Credit Policy Council. He has a Ph.D. in Economics from the School of Economics, university of the Philippines. His research interests include public economics, growth economics, financial inclusion, microfinance, local governance, regional integration, and infrastructure regulation.


gENERAL STANDARD DISCLOSuRES

Standard Disclosure

Standard Disclosure Title

Disclosure RequirementsThe disclosure requirements for the selected Standard Disclosures are provided below. The G4 Implementation Manual contains explanations of how to prepare the information to be disclosed and how to interpret the various concepts in the Guidelines. Organizations should consult the G4 Implementation Manual when preparing a sustainability report.

STRATEGY AND ANALYSIS Location of Disclosure/Direct Answer Omissions External Assurance

g4-1 Provide a statement from the most senior decision-maker of the organization (such as CEO, chair, or equivalent senior position) about the relevance of sustainability to the organization and the organization’s strategy for addressing sustainability.

pp. 1-2 Full

g4-2 Provide a description of key impacts, risks, and opportunities.

pp. 2-4 Full

ORGANIZATIONAL PROFILE Location of Disclosure/Direct Answer Omissions External Assurance

g4-3 a. Report the name of the organization. The San Roque Power Corporation (SRPC) is a corporation organized and existing under Philippine laws and registered with the Philippine Securities and Exchange Commission (SEC) on October 14, 1997.

Full

g4-4 a. Report the primary brands, products, and services.

In accordance with the Power Purchase Agreement that SRPC entered into with the National Power Corporation, SRPC shall operate and maintain the power generating facility of the San Roque Multipurpose Project for the supply of electricity to NPC for a period of 25 years starting May 2003 on a build-operate-transfer (BOT) scheme.

Full

g4-5 a. Report the location of the organization’s headquarters. Barangay San Roque, San Manuel, Pangasinan Full

g4-6 a. Report the number of countries where the organization operates, and names of countries where either the organization has significant operations or that are specifically relevant to the sustainability topics covered in the report.

The SRPC operates in the Philippines. Its principal office is in Barangay San Roque, San Manuel, Pangasinan. It also maintains a business and administration office at the 36th Floor Tower 1, The Enterprise Center, 6766, Ayala Avenue, Makati City.

Full

g4-7 a. Report the nature of ownership and legal form. The company is jointly owned by Marubeni Corporation and Kansai Electric Power Company Ltd. with an equal sharing of 50%.

Full

g4-8 a. Report the markets served (including geographic breakdown, sectors served, and types of customers and beneficiaries).

SRPC provides electricity until the end of the term of the Power Purchase Agreement with the National Power Corporation (NPC).

As of March 26, 2013, SRPC has successfully proven its capability to provide Ancillary Services (Regulating Reserve, Contingency Reserve, and Dispatchable Reserve) to the National grid Corporation of the Philippines (NgCP).a. Contracted capacity of 110MW. b. A new Rule Curve was revised taking into consideration the completion of the National Irrigation Re-regulating Pond in July 2013. The new Rule Curve was adopted on August 30, 2013.

Net Energy Output:2012 - 1,097,959.33MWh2013 - 943,863.86MWh2014 - 853,776.72MWh2015 - 704,567.58MWh

Full

g4-9 a. Report the scale of the organization, including: • Total number of employees • Total number of operations • Net sales (for private sector organizations) or net revenues (for public sector organizations) • Total capitalization broken down in terms of debt and equity (for private sector organizations) • Quantity of products or services provided

pp. 14, 41-42, 66 Full

g4-10 a. Report the total number of employees by employment contract and gender.b. Report the total number of permanent employees by employment type and gender.c. Report the total workforce by employees and supervised workers and by gender.d. Report the total workforce by region and gender.e. Report whether a substantial portion of the organization’s work is performed by workers who are legally recognized as self-employed, or by individuals other than employees or supervised workers, including employees and supervised employees of contractors.f. Report any significant variations in employment numbers (such as seasonal variations in employment in the tourism or agricultural industries).

pp. 66-68 Full

g. Report on total contractor workforce (contractor, subcontractor, independent contractor) by employment type, employment contract and regulatory regime.

p. 68 Full

g4-11 a. Report the percentage of total employees covered by collective bargaining agreements.

None. Full

GRI – G4 CONTENT INDEXSan Roque Power Corporation Sustainability Report 2014 is prepared in accordance with Electric Utilities Sector Supplement (EUSS) released by GRI in 2009 and GRI G4 Sustainability Reporting Guidelines at ‘Comprehensive’ Level. This index lists GRI G4 General and Specific Standard Disclosures and EUSS standard disclosures. It also summarizes SRPC’s coverage and details, which are reported in relation to each Standard Disclosure. This Report is assured by an External Review Committee (ERC) hosted by the University of Asia and the Pacific. Some of the information can also be found in the micro-site (www.sanroquepower.ph). For a detailed explanation of GRI G4 Standard Disclosures, please visit www.globalreporting.org



ORGANIZATIONAL PROFILE Location of Disclosure/Direct Answer Omissions External Assurance

b. Report percentage of contractor employees (contractor, sub-contractor and independent contractor) working for the reporting organization covered by collective bargaining agreements by country or regulatory regime.

pp. 66-67 Full

g4-12 Describe the organization’s supply chain. Input for Purchasing: Main Elements of the supply chain are (a) requisitioning (b) purchasing (c) issuance of spare parts/items/services needed for the maintenance of equipment, used in power generation. The timing of the Purchase Request and the efficiency in buying/sourcing such items/services, is integral to the plants continuous and reliable operation. The items must be purchased and delivered on time, before stocks run out. And service contracts must be synchronized with plant activities, such as turbine/tunnel inspections.

Full

g4-13 Report any significant changes during the reporting period regarding the organization’s size, structure, ownership, or its supply chain.

No significant changes occurred in the Company's size, structure, ownership or its supply chain since its 2011 Sustainability Report.

Full

g4-14 a. Report whether and how the precautionary approach or principle is addressed by the organization.

Third Party Evaluation and Monitoring2012• Risk Survey by Allianz (Marnix Insurance)• Risk Survey by PSALM/Malayan/GSIS/NPC• Semi-annual inspection by NPC2013• 3rd Party Safety Audit by Lajmar 2013• 5-yearly Dam/Hydro Independent Experts • Semi-annual inspection by NPC2014• 3rd Party Safety Audit by 360• Risk Survey by PSALM/Malayan/GSIS/NPC• Site Inspection by ERC• Semi-annual inspection by NPC

Full

g4-15 a. List externally developed economic, environmental and social charters, principles, or other initiatives to which the organization subscribes or which it endorses.

p. 9 Full

g4-16 a. List memberships of associations (such as industry associations) and national or international advocacy organizations in which the organization: • Holds a position on the governance body • Participates in projects or committees • Provides substantive funding beyond routine membership dues • Views membership as strategic

This refers primarily to memberships maintained at the organizational level.

• Philippine National Committee on Large Dams• People Management Association of the Philippines• Philippine Institute of Certified Public Accountants• Safety and Health Association of the Philippines• Philippine Institute for Supply Management• Philippine Corrosion Society• Pollution Control Association of the Philippines• League of Corporate Foundation (The SRPFI is a member of the livelihood and education committees of the LCF)• Philippine Business for the Environment

Full

Eu1 Installed capacity, broken down by primary energy source and by regulatory regime

The San Roque Hydro Power Plant has an installed capacity of 411MW, producing approximately 1,000gWh per year of renewable peaking energy that is supplied to the Luzon Power grid. The PPA stipulates that the power plant is a peaking plant that operates daily for eight hours at its contracted capacity of 110MW. The designated peaking hours are from 9:00 A.M. and 3:00 P.M. and 6:00 P.M. and 8:00 P.M.

Full

Eu2 Net energy output broken down by primary energy source and by regulatory regime

pp. 2, 14 Full

Eu3 Number of residential, industrial, institutional, and commercial customer accounts

As an operator bound by the PPA, the Company has not done any research and development activity for new and more sustainable ways of providing energy. It has not undertaken planned capacity against projected electricity demand over the long term period, neither has it undertaken demand side management, which includes residential, commercial, institutional, and industrial programs. The SRPC is not a distributor; hence , it cannot influence power prices.

Full

Eu4 Length of above and underground transmission and distribution line by regulatory regime

p. 13 Full

Eu5 Allocation of CO2 emissions, allowances or equivalent, broken down by Carbon Trading Framework

p. 56 Not Reported

IDENTIFIED MATERIAL ASPECTS AND BOUNDARIES Location of Disclosure/Direct Answer Omissions External Assurance

g4-17 a. List all entities included in the organization’s consolidated financial statements or equivalent documents.b. Report whether any entity included in the organization’s consolidated financial statements or equivalent documents is not covered by the report.

None Yes, p. 87

g4-18 a. Explain the process for defining the report content and the Aspect Boundaries.b. Explain how the organization has implemented the Reporting Principles for Defining Report Content.

used in this Report was the principle of materiality in testing economic, environmental, and social performance based on the applicable key performance indicators. It contains the company’s 2012-2015 sustainability performance as gathered from all the departments of the company. This report also reflects the results of the focus group discussions conducted with the stakeholders on important issues that they considered worth including here.

Yes, pp. 87-90. While

the ERC assurance has not provided a statement

on this, SRPC attests to subjecting this to its

review during the TWg's

presentation on material

aspects and the

performance data.

G4 Index



IDENTIFIED MATERIAL ASPECTS AND BOUNDARIES Location of Disclosure/Direct Answer Omissions External Assurance

g4-19 a. List all the material Aspects identified in the process for defining report content.

p. 6 Yes, pp. 87-88

g4-20 a. For each material Aspect, report the Aspect Boundary within the organization, as follows: • Report whether the Aspect is material within the organization • If the Aspect is not material for all entities within the organization (as described in g4-17), select one of the following two approaches and report either: – The list of entities or groups of entities included in g4-17 for which the Aspect is not material or – The list of entities or groups of entities included in g4-17 for which the Aspects is material • Report any specific limitation regarding the Aspect Boundary within the organization

San Roque Power Corporation (SRPC) reports on the aspects pertinent to the power generation component of the San Roque Multipurpose Project (SRMP) only. Aspects under the Economic, Environmental, and Social categories are limited to the operations of SRPC and uses the Electric utilities Sector Disclosure for additional material aspects. The San Roque Power Foundation implements the social responsibility programs of SRPC, accounting for the following aspects: indirect economic impacts (EC) and local communities (SO).

Yes, pp. 87-88

g4-21 a. For each material Aspect, report the Aspect Boundary outside the organization, as follows: • Report whether the Aspect is material outside of the organization • If the Aspect is material outside of the organization, identify the entities, groups of entities or elements for which the Aspect is material. In addition, describe the geographical location where the Aspect is material for the entities identified • Report any specific limitation regarding the Aspect Boundary outside the organization

The other features of San Roque Multipurpose Project (SRMP), which are irrigation, flood attenuation, water quality improvement, are the concerns of different government agencies. Brief discussions on these features are in the report only to provide additional context, given the common raw material and the interdependence of the four different features, especially irrigation and peaking power, which is balanced by the Ran Roque Reservoir Rule Curve. In the aspects of biodiversity and habitat protection, the coverage of this report is not confided to the immediate San Roque watershed area but extends to the Lower Agno watershed.

Yes, pp. 87-88

g4-22 a. Report the effect of any restatements of information provided in previous reports, and the reasons for such restatements.

Any re-statement of information was made only in reporting the Company’s economic performance.

Yes, p. 87

g4-23 a. Report significant changes from previous reporting periods in the Scope and Aspect Boundaries.

From a Level B+ report following the gRI g3 and Electric utilities Sector Supplement (EuSS) guideline, the Company has produced an SR following the gRI g4 and Electric utilities Sector Disclosures guideline. For the standard disclosures, the report will follow the "in accordance - comprehensive" criteria.

The Company engaged the services of the university of Asia and the Pacific with regard to technical assistance and assurance services for this Report. The External Review Committee (ERC) comprises experts on economics, environment, society, labor, and human rights. They evaluated SRPC’s disclosures and validated its performance based on gRI g4 principles on report content, disclosure requirements, and reporting boundaries.

Yes, pp. 89-90

STAKEHOLDER ENGAGEMENT Location of Disclosure/Direct Answer Omissions External Assurance

g4-24 a. Provide a list of stakeholder groups engaged by the organization.

List of stakeholders: Shareholders; Board of Directors and Officers; Lgus of Pangasinan, Benguet, San Manuel, San Nicolas and Itogon; employees; Strategic Power Development Corporation; National government Agencies: (NPC, NIA, PSALM, DepEd, DENR, DSWD, NWRB, DA, OCD, PNP, DOST, DTI, TESDA, NgCP, PHIVOLCS, BIR); farmers; host communities and barangays; NgOs; media; academe; church

Yes, p. 89

g4-25 a. Report the basis for identification and selection of stakeholders with whom to engage.

The Technical Working group conducted a stakeholder assessment using gRI’s guidelines for stakeholder inclusiveness to determine the Company's key stakeholders.

1. The TWg conducted a workshop to define the company's stakeholders.2. guide questions were formulated to identify and prioritize the stakeholders. 3. A threshold was established to prioritize stakeholders based on their influence to the company's sustainability performance.

Yes, p. 89

g4-26 a. Report the organization’s approach to stakeholder engagement, including frequency of engagement by type and by stakeholder group, and an indication of whether any of the engagement was undertaken specifically as part of the report preparation process.

p. 32 Yes, p. 89

g4-27 a. Report key topics and concerns that have been raised through stakeholder engagement, and how the organization has responded to those key topics and concerns, including through its reporting. Report the stakeholder groups that raised each of the key topics and concerns.

pp. 33-34 Yes, pp. 89-90

REPORT PROFILE Location of Disclosure/Direct Answer Omissions External Assurance

g4-28 a. Reporting period (such as fiscal or calendar year) for information provided.

This sustainability report features the company’s performance from April 2012 to March 2015.

Full

g4-29 a. Date of most recent previous report (if any). 3/1/2012 Full

g4-30 a. Reporting cycle (such as annual, biennial). From 2006 to 2012 - annualFrom 2012, every after two years

Full

g4-31 a. Provide the contact point for questions regarding the report or its contents.

Technical Working groupSan Roque Power CorporationSan Roque, San Manuel, [email protected]

Full

g4-32 a. Report the ‘in accordance’ option the organization has chosen.b. Report the gRI Content Index for the chosen option.c. Report the reference to the External Assurance Report, if the report has been externally assured. gRI recommends the use of external assurance but it is not a requirement to be in accordance’ with the guidelines.

The SR is "in accordance - comprehensive" gRI Content Index on pages 94-107External Assurance report on pages 87-90

Full



REPORT PROFILE Location of Disclosure/Direct Answer Omissions External Assurance

g4-33 a. Report the organization’s policy and current practice with regard to seeking external assurance for the report.b. If not included in the assurance report accompanying the sustainability report, report the scope and basis of any external assurance provided.c. Report the relationship between the organization and the assurance providers.d. Report whether the highest governance body or senior executives are involved in seeking assurance for the organization’s sustainability report.

The Company recognizes the importance of an external assurance to boost the credibility of its Report.

The External Review Committee engaged by the Company is composed of independent experts in the field of economics, environment, labor, and human rights.

The members of the External Review Committee were compensated for the expertise in conducting the external review.

Full

GOVERNANCE Location of Disclosure/Direct Answer Omissions External Assurance

g4-34 a. Report the governance structure of the organization, including committees of the highest governance body. Identify any committees responsible for decision- making on economic, environmental and social impacts.

pp. 23, 26 Full

g4-35 a. Report the process for delegating authority for economic, environmental and social topics from the highest governance body to senior executives and other employees.

The organizational framework of SRPC describes the level of authority vested upon the heads of divisions for economic, environmental and social concerns and more fully stipulated in each duties and responsibilities. The organization has adapted certain policies and guidelines that lay down the limits of power and authority in the hierarchy. The Board of Trustees exercises the highest level of governance while the President and Chief Executive Officer carries out the business operations.

Full

g4-36 a. Report whether the organization has appointed an executive-level position or positions with responsibility for economic, environmental and social topics, and whether post holders report directly to the highest governance body.

The organization is headed by the President and Chief Executive Officer with Senior Vice Presidents and Vice Presidents for each departments under Operations and Maintenance, Corporate Social Responsibility and Security, and Finance. The President and CEO reports directly to the BOT while the Vice Presidents, to the President and CEO.

Full

g4-37 a. Report processes for consultation between stakeholders and the highest governance body on economic, environmental and social topics. If consultation is delegated, describe to whom and any feedback processes to the highest governance body.

p. 26 Full

g4-38 a. Report the composition of the highest governance body and its committees by: • Executive or non-executive • Independence • Tenure on the governance body • Number of each individual’s other significant positions and commitments, and the nature of the commitments • Gender • Membership of under-represented social groups • Competences relating to economic, environmental and social impacts • Stakeholder representation

pp. 23-25 Full

G4-39 a. Report whether the Chair of the highest governance body is also an executive officer (and, if so, his or her function within the organization’s management and the reasons for this arrangement).

pp. 24-25 Full

G4-40 a. Report the nomination and selection processes for the highest governance body and its committees, and the criteria used for nominating and selecting highest governance body members.

p. 24 Full

G4-41 a. Report processes for the highest governance body to ensure conflicts of interest are avoided and managed. Report whether conflicts of interest are disclosed to stakeholders, including, as a minimum: cross-board membership, cross-shareholding with suppliers and other stakeholders, existence of controlling shareholder, related party disclosures.

p. 28 Full

G4-42 a. Report the highest governance body’s and senior executives’ roles in the development, approval, and updating of the organization’s purpose, value or mission statements, strategies, policies, and goals related to economic, environmental and social impacts.

The senior executives of the SRPC, from the President and CEO down to the department managers, crafted the vision, mission and value statements of the Company under the guidance of professional academic and trade consultants. Each department for economic, social, and environmental topics makes their own goals, plans, programs and strategies for approval by the President thence by the BOT.

Full

G4-43 a. Report the measures taken to develop and enhance the highest governance body’s collective knowledge of economic, environmental and social topics.

The BOT conducts a regular meeting every year with special sessions as may be deemed necessary. It is in these meetings that the highest governance body is updated on all aspects of business operations including but not limited to social, environmental, economic, and security concerns.

Full

g4-44 a. Report the processes for evaluation of the highest governance body’s performance with respect to governance of economic, environmental and social topics. Report whether such evaluation is independent or not, and its frequency. Report whether such evaluation is a self-assessment.b. Report actions taken in response to evaluation of the highest governance body’s performance with respect to governance of economic, environmental and social topics, including, as a minimum, changes in membership and organizational practice.

p. 24 Full

G4 Index



GOVERNANCE Location of Disclosure/Direct Answer Omissions External Assurance

g4-45 a. Report the highest governance body’s role in the identification and management of economic, environmental and social impacts, risks, and opportunities. Include the highest governance body’s role in the implementation of due diligence processes.b. Report whether stakeholder consultation is used to support the highest governance body’s identification and management of economic, environmental and social impacts, risks, and opportunities.

p. 26 Full

g4-46 a. Report the highest governance body’s role in reviewing the effectiveness of the organization’s risk management processes for economic, environmental and social topics.

p. 26 Full

g4-47 a. Report the frequency of the highest governance body’s review of economic, environmental and social impacts, risks, and opportunities.

p. 26 Full

g4-48 a. Report the highest committee or position that formally reviews and approves the organization’s sustainability report and ensures that all material Aspects are covered.

pp. 25-26 Full

g4-49 a. Report the process for communicating critical concerns to the highest governance body.

pp. 26-27 Full

g4-50 a. Report the nature and total number of critical concerns that were communicated to the highest governance body and the mechanism(s) used to address and resolve them.

None. Full

g4-51 a. Report the remuneration policies for the highest governance body and senior executives.b. Report how performance criteria in the remuneration policy relate to the highest governance body’s and senior executives’ economic, environmental and social objectives.

p. 26 Full

g4-52 a. Report the process for determining remuneration. Report whether remuneration consultants are involved in determining remuneration and whether they are independent of management. Report any other relationships which the remuneration consultants have with the organization.

p. 26 Full

g4-53 a. Report how stakeholders’ views are sought and taken into account regarding remuneration, including the results of votes on remuneration policies and proposals, if applicable.

pp. 26-28 Full

g4-54 a. Report the ratio of the annual total compensation for the organization’s highest-paid individual in each country of significant operations to the median annual total compensation for all employees (excluding the highest-paid individual) in the same country.

p. 26 Full

g4-55 a. Report the ratio of percentage increase in annual total compensation for the organization’s highest-paid individual in each country of significant operations to the median percentage increase in annual total compensation for all employees (excluding the highest-paid individual) in the same country.

p. 26 Full

ETHICS AND INTEGRITY Location of Disclosure/Direct Answer Omissions External Assurance

g4-56 a. Describe the organization’s values, principles, standards and norms of behavior such as codes of conduct and codes of ethics.

pp. 28-30 Full

g4-57 a. Report the internal and external mechanisms for seeking advice on ethical and lawful behavior, and matters related to organizational integrity, such as helplines or advice lines.

pp. 28-30 Full

g4-58 a. Report the internal and external mechanisms for reporting concerns about unethical or unlawful behavior, and matters related to organizational integrity, such as escalation through line management, whistleblowing mechanisms or hotlines.

pp. 28-30 Full


G4 IndexSPECIFIC STANDARD DISCLOSuRES

Standard Disclosure

Standard Disclosure Title

Disclosure RequirementsThe disclosure requirements for the selected Standard Disclosures are provided below. The G4 Implementation Manual contains explanations of how to prepare the information to be disclosed and how to interpret the various concepts in the Guidelines. Organizations should consult the G4 Implementation Manual when preparing a sustainability report.

CATEGORY: ECONOMIC

ASPECT: ECONOMIC PERFORMANCE Location of Disclosure/Direct Answer Omissions Full

g4-DMA

Long-term productivity through strong economic performances is among SRPC’s goals on the road to achieving economic sustainability. The ways in which the Company tries to achieve these on a regular basis are as follows:

• Monitoring costs and expenses and requirements to stockholders, lenders, and government agencies.• Implementing stricter compliance with government requirements regarding documents.• Reviewing and updating Accounting Policies as to accounting procedures, processes, expense reports, and other accounting-related areas.• Sending employees for training to improve efficiency.

g4-EC1 Direct economic value generated and distributed pp. 41-44 Full

g4-EC2 Financial implications and other risks and opportunities for the organization’s activities due to climate change

p. 15 Full

g4-EC3 Coverage of the organization’s defined benefit plan obligations p. 37 Full

g4-EC4 Financial assistance received from government p. 38 Full

ASPECT: MARKET PRESENCE Location of Disclosure/Direct Answer Omissions Full

g4-DMA

The Company provides more than the required compensation and benefit packages to its employees, including a non-contributory, higher-than-statutory retirement plan as prescribed by the employee manual. A third-party compensation survey, specifically the Mercer Survey of 2007, serves as a guide to SRPC’s salary structure.

g4-EC5 Ratios of standard entry level wage by gender compared to local minimum wage at significant locations of operation

p. 37 Full

g4-EC6 Proportion of senior management hired from the local community at significant locations of operation

p. 37 Full

ASPECT: INDIRECT ECONOMIC IMPACTS Location of Disclosure/Direct Answer Omissions Full

g4-DMA

SRPC formulated the Strategic Social Investment Plan (SSIP) via consultations with partners and assisted communities. Projects are assessed and designed based on the needs of the community and guided by the Community-Driven Enterprise Development (CDED) Approach. The CDED is a development model borne out of the Company’s experience and partnership with the communities and other interest groups. It advocates for ventures into micro and small enterprises as vehicles for poverty alleviation. The idea simply connects to the basic enterprise capitals (human, social, financial, physical, and natural) in identifying, selecting, implementing, and sustaining community-driven enterprise/s. The word “community” need not restrictively refer to collective undertakings but may also refer to economic activities popular within an assisted community.

g4-EC7 Development and impact of infrastructure investments and services supported

pp. 38-41, 43-44 Full

g4-EC8 Significant indirect economic impacts, including the extent of impacts pp. 39-41, 43-44 Full

ASPECT: PROCUREMENT PRACTICES Location of Disclosure/Direct Answer Omissions Full

g4-DMA

To boost direct investments at the local level, SRPC gives priority to local suppliers at strategic locations, which is guided by the Company’s Procurement Policy. Such suppliers are assessed by the canvassing procedures of the policy, which is regularly reviewed in order to tighten internal control and improve risk management

g4-EC9 Proportion of spending on local suppliers at significant locations of operation

24% of items/services are purchased from local suppliers.

The local suppliers are those located within Pangasinan and its neighboring Provinces—Baguio, La union, Tarlac and Itogon.

Full

ASPECT: AVAILABILITY AND RELIABILITY Location of Disclosure/Direct Answer Omissions Full

Eu10 Planned capacity against projected electricity demand over the long term, broken down by energy source and regulatory regime.

p. 14 Full

ASPECT: DEMAND-SIDE MANAGEMENT Location of Disclosure/Direct Answer Omissions Full

g4-DMA

This is not applicable. San Roque Power Corporation does not undertake any form of demand-side management initiatives because it is only an operator of the San Roque Hydroelectric Power Plant. It does not interact with residential, commercial, institutional, or industrial customers in order to modify patterns of electricity usage. Its sole customer is the National Power Corporation to whom it must deliver the contracted capacity throughout the contract period.

ASPECT: RESEARCH AND DEVELOPMENT Location of Disclosure/Direct Answer Omissions Full

g4-DMA

This is not applicable. The research and development of additional ways to provide reliable electricity is not a thrust of the Company given that it is bound only to operate and maintain the power plant up to 2028, after which it will be turned over to the Philippine government.

ASPECT: PLANT DECOMMISSIONING Location of Disclosure/Direct Answer Omissions Full

g4-DMA

This is not applicable because this is for nuclear power plants. The SRMP provides hydroelectric power and, as a Build-Operate-Transfer Project, will be turned over to the government in 2028.

ASPECT: SYSTEM EFFICIENCY Location of Disclosure/Direct Answer Omissions Full

g4-DMA

The Company is committed to sustain the provision of 100% available and reliable electricity to the National Power Corporation up to the end of cooperation period in 2028. We do this through regular systemic process of inspection and maintenance of the power plant, including planned per-unit maintenance outages; a third-party evaluation and monitoring to assess possible risks that can affect the power plant’s operations (see pp. 16 to 17); and continuous training of technical personnel.

Eu11 Average generation efficiency of thermal plants by energy source and by regulatory regime

Not Reported Not Reported

Eu12 Transmission and distribution losses as a percentage of total energy The SRPC only generates power based on the requirements of the PPA and submits an Annual generation Report to the Energy Regulatory Commission (ERC). The Strategic Power Development Corporation (SPDC), which became the Independent Power Producer Administrator (IPPA) for the BOT contract of the SRPC on January 26, 2010, trades the SRPC’s capacity to the Wholesale Electricity Spot Market (WESM).

Full

CATEGORY: ENVIRONMENTAL

ASPECT: MATERIALS Location of Disclosure/Direct Answer Omissions Full

g4-DMA

Material use is mainly driven by the utilization of water for hydro power generation and indirect energy use (comprised mostly of petroleum, oil, and lubricants for plant maintenance). At SRPC, resources are conserved through improved efficiencies and the waste reduction. One of the goals stated in the Project's Environmental Management Plan is the reduction of wastes and unnecessary consumption of resources (materials, fuel, energy), including the recovery and recycling of materials where feasible.

Any hazardous/toxic substance and other non-conventional pollutants present at the site and are regulated by Philippine statutes or their implementing rules and regulations are assessed and controlled under the Hazardous Materials Standards, Procedures and Practices (ENV-01-02).

SRPC generally complies with applicable regulatory standards, particularly Republic Act 6969 (Toxic Substances and Hazardous and Nuclear Wastes Control Act) and Department of Environment and Natural Resources (DENR) Administrative Order 39 (Chemical Control Order for Cyanide and Cyanide Compounds). The Environmental Management Bureau-Region 1 confirmed that the transformers being used by the power plant are free of polychlorinated biphenyls (PCBs). SRPC has complied with the requirements for the grant of exemption from the requirements of the Chemical Control Order (CCO) on PCBs.


SPECIFIC STANDARD DISCLOSuRESASPECT: MATERIALS Location of Disclosure/Direct Answer Omissions Full

g4-EN1 Materials used by weight or volume The Company’s material use is mainly driven by the utilization of water for hydro power generation.2014 = 1,687.31 MCM2013 = 2,152.95 MCM2012 = 2,323.90 MCMTotal = 6,164.16 MCM

Full

g4-EN2 Percentage of materials used that are recycled input materials The water used for generating hydroelectric power is entirely returned to the river generally unharmed and unaltered for purposes of irrigation as being managed by the National Irrigation Administration. SRPC does not recycle or reuse water utilized for domestic purposes.

Full

ASPECT: ENERGY Location of Disclosure/Direct Answer Omissions Full

g4-DMA

One hundred percent of SRPC's electricity comes from its station power (i.e., from a renewable energy source). SRPC sustains energy efficiency both as an electric generator incorporating technology to produce energy cleanly and efficiently, and as an end-user, improving energy efficiency in the workplace through process improvement and employee awareness.

The Company gives preference to purchasing environmentally superior products and office materials as part of its commitment to environmentally sound practices. It implements administrative procedures that reduce indirect energy consumption, simplify work processes, and improve efficiency and productivity.

The Company also conducts assessments that identify sources of pollution and resource (e.g., fuel, electricity, water, etc.) usage so that pollution prevention and resource conservation opportunities can be identified, prioritized, and implemented.

g4-EN3 Energy consumption within the organization p. 51 Full

g4-EN4 Energy consumption outside of the organization pp. 51-52 Full

g4-EN5 Energy intensity pp. 51-52 Full

g4-EN6 Reduction of energy consumption Improving the Company's energy efficiency in the workplace by implementing basic administrative procedures like turning off electric equipment outside operational hours and giving preference to energy-efficient products such as lightings, computers and air-conditioning units.

Full

g4-EN7 Reductions in energy requirements of products and services Flexible work policies, systematic arrangement of employee errands and carpooling programs to support use of mass transit, and use of teleconferences are some of the ways that the Company reduces its fuel consumption.

Full

ASPECT: WATER Location of Disclosure/Direct Answer Omissions Full

g4-DMA

SRPC is a hydro power plant, thus, it generates electricity using water-driven turbine generators and does not use water in processes like cooling it in order to condense steam, ash handling, and coal cleaning. 100% of the water used in generating power is returned to the Agno River for subsequent use in irrigating farmlands downstream.

The use of water as the sole and primary material in generating power is guided by the dispatch instructions of the National Power Corporation (NPC), provisions of the Power Purchase Agreement, the Irrigation Dispatch Requirement of the National Irrigation Administration, and the condition of water level in the reservoir in reference to the San Roque Reservoir Operation Rule Curve. Water at the reservoir is managed through the San Roque Reservoir Operation Rule Curve as well.

The Company’s Standard Procedures and Practices has provisions for performance standards relating to flow measurements, and water quality monitoring and reporting. As mandated, SRPC and the NPC observe a minimum ecological flow downstream to maintain a riverine environment along immediate segments of the Agno River.

Together with the San Roque Multipurpose Project's (SRMP) Multipartite Monitoring Team (MMT), SRPC regularly monitors and validates the quality of reservoir water and operational discharges used for irrigation purposes. The Company undertakes data collection of physical, chemical, and biological variables from the aquatic ecosystem to determine the general state of the water bodies directly affected and their seasonal dynamics. Water quality conditions within the reservoir and water discharges for irrigation are regularly cascaded to stakeholders.

g4-EN8 Total water withdrawal by source WATER uSED FOR POWER gENERATION2012 2013 2014 TOTAL

2,488.76 MCM 2,061.93 MCM 1,860.284 MCM 6,410.974 MCM

Full

g4-EN9 Water sources significantly affected by withdrawal of water upstream of the dam, the water quality impacts associated with the operation of the Plant are confined to the reservoir area; hence, no impacts are expected further upstream. Downstream of the dam, assessment of water quality reflects significant improvement especially in terms of turbidity/clarity and total solids (dissolved and suspended). The Company is also equally diligent in monitoring and controlling the quality of its effluent water from its sewage treatment facilities.

Full

g4-EN10

Percentage and total volume of water recycled and reused The water used for generating hydroelectric power is entirely returned to the river generally unharmed and unaltered for purposes of irrigation as being managed by the National Irrigation Administration

Full

ASPECT: BIODIVERSITY Location of Disclosure/Direct Answer Omissions Full

g4-DMA

The NPC has the jurisdiction regarding the management and control of the San Roque Watershed, which is considered as the lifeblood of the SRMP and known for its high biodiversity attributes. For its part, SRPC spearheads advocacy projects to complement efforts to restore and protect biodiversity, wildlife, and forest habitats in the watershed. As per Item 12 of the additional conditions of the Environmental Compliance Certificate (ECC) issued to the Project, the Company is mandated to coordinate with the NPC and the DENR on both the agencies' formulations and implementations of a viable watershed management plan.

The Company shows its support to the government’s National greening Program (NgP) by adopting a 500-hectare portion of the watershed where interventions are most needed for reforestation projects. It is committed to restoring habitats, implementing environmental advocacy programs, and establishing a tree library/arboretum in order to promote indigenous species and to bring back species of trees that once thrived in the area.

The Bird and Wildlife Conservation Program is a continuing effort to promote the long-term viability of healthy populations of birds and wildlife across their range of habitats within the SRMP area. SRPC also partnered with the Philippine Eagle Foundation for biodiversity protection and conservation through the conduct of site suitability assessments for possible release sites for Philippine Eagle in the Cordillera and Caraballo mountain ranges. Because of this partnership, more research studies of Philippine Eagles and their habitats in Luzon have been undertaken.

In partnership with the NPC and the Bureau of Fisheries and Aquatic Resources (BFAR), the Company is also engaged in fish stock enhancement, particularly the replenishment of a particular species of eel that has diminished with the construction of the dam in 1998.

g4-EN11

Operational sites owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas

Full

g4-EN12

Description of significant impacts of activities, products, and services on biodiversity in protected areas and areas of high biodiversity value outside protected areas

The SRMP reservoir has created an impoundment of water covering an area of about 12.8 km2.

Full



ASPECT: BIODIVERSITY Location of Disclosure/Direct Answer Omissions Full

EN13 Habitats protected and restored This body of water provides a good quality habitat that is attractive to waterfowl like Philippine ducks. Various species of water dependent birds are also attracted and evidently have established permanent home ranges in this area. In fact, based on the bird survey conducted by the Wild Bird Club of the Philippines with SRPC, Team Energy Foundation and DENR-CENRO urdaneta City, sightings of 81 different species of birds have been confirmed.

Full

Eu13 Biodiversity of offset habitats compared to the biodiversity of the affected areas

The body of water is a habitat of waterfowl like Philippine ducks and various species of water-dependent birds. The bird survey conducted by the Wild Bird Club of the Philippines with SRPC, Team Energy Foundation and DENR-CENRO urdaneta City, confirmed sightings of 81 different species of birds.

The areas that were cleared thru vegetation removal/clearing operation was already reforested. Areas were broadcasted with ipil ipil seeds and continuous tree planting activities are being conducted to restore the loss of vegetation during project construction.

Itogon claims that species of eel decreased after the construction of the dam and they included enhancement of species stock as one of the conditionalities that was needed to comply. Seeding or dispersal of 20 kilos (about 120,000) elvers was done by SRPC during the period, in addition to what been seeded in the past.

Full

g4-EN14

Total number of IuCN Red List species and national conservation list species with habitats in areas affected by operations, by level of extinction risk

Anas luzonica or Philippine Duck was classified as vulnerable in the IuCN Red List.

Full

ASPECT: EMISSIONS Location of Disclosure/Direct Answer Omissions Full

g4-DMA

The Company’s office building’s type of electricity—including that used for lighting, cooling, heating, and office equipment (e.g., printers, photocopiers)—is hydroelectric power. Hence, indirect emissions from these sources are considered insignificant.

As greenhouse gas (gHg) emissions accounting evolves, the Company is making every effort to respond by establishing and eventually expanding its gHg inventory accordingly. The Company offsets carbon emissions with equivalent carbon-fixing, such as CO2 emissions reduction out of generating hydro power and tree planting activities.

Aside from gHg reduction programs being implemented, carbon sequestration programs are also in place. SRPC is continuously implementing the grow a Tree for San Roque Watershed initiative in support to the National greening Program of the government.

The Company endeavors to sustain its energy efficiency both as an electric generator as it incorporates state-of-the-art appropriate technology to produce energy cleanly and efficiently.

g4-EN15

Direct green-house gas (gHg) emissions (Scope 1)

a. Report gross direct (Scope 1) gHg emissions in metric tons of CO2 equivalent, independent of any gHg trades, such as purchases, sales, or transfers of offsets or allowances.b. Report gases included in the calculation (whether CO2, CH4, N2O, HFCs, PFCs, SF6, NF3, or all).c. Report biogenic CO2 emissions in metric tons of CO2 equivalent separately from the gross direct (Scope 1) gHg emissions.d. Report the chosen base year, the rationale for choosing the base year, emissions in the base year, and the context for any significant changes in emissions that triggered recalculations of base year emissions.e. Report standards, methodologies, and assumptions used.f. Report the source of the emission factors used and the global warming potential (gWP) rates used or a reference to the gWP source.g. Report the chosen consolidation approach for emissions (equity share, financial control, operational control).

Zero emissions in terms of operational activities, power generation, since the Company does not burn any fuel and no associated combustion is involved in the process. Carbon footprints mostly came from company-owned vehicles used for business travels and transporting of employees to and from the Plant. This accounts for 1,212.82 tons of CO2.

Full

g4-EN16

Energy indirect greenhouse gas (gHg) emissions (Scope 2) SRPC's office building's electricity consumption, including electricity used for lighting, cooling, heating, and office equipment (e.g., printers, photocopiers) comes from hydroelectric power, hence, indirect emissions from these sources are considered insignificant.

Full

g4-EN17

Other indirect greenhouse gas (gHg) emissions (Scope 3) p. 56 Full

g4-EN18

greenhouse gas (gHg) emissions intensity pp. 56-57 Full

g4-EN19

Reduction of green-house gas (gHg) emissions

a. Report the amount of gHg emissions reductions achieved as a direct result of initiatives to reduce emissions, in metric tons of CO2 equivalent. b. Report gases included in the calculation (whether CO2, CH4, N2O, HFCs, PFCs, SF6, NF3, or all).c. Report the chosen base year or baseline and the rationale for choosing it.d. Report standards, methodologies, and assumptions used.e. Report whether the reductions in gHg emissions occurred indirect (Scope 1), energy indirect (Scope 2), other indirect (Scope 3) emissions.

SRPC endeavors to sustain its energy efficiency both as an electric generator as it incorporates state of the art appropriate technology to produce energy cleanly and efficiently, and as an end-user, improving its energy efficiency in the workplace by implementing basic administrative procedures like turning off electric equipment outside operational hours and giving preference to energy-efficient products such as lightings, computers and air-conditioning units. The company encourages reductions through investment in energy efficient office equipment and lightings and reduced use of materials such as paper, and food packaging and bottled water.

Full

g4-EN20

Emissions of ozone-depleting substances (ODS) pp. 56-57 Full

g4-EN21

NOx, SOx, and other significant air emissions pp. 56-57 Full


SPECIFIC STANDARD DISCLOSuRESASPECT: EFFLUENTS AND WASTE Location of Disclosure/Direct Answer Omissions Full

g4-DMA

To properly manage wastewater, SRPC implements wastewater characterization (quality, quantity, frequency, and sources of liquid effluents in the facility), segregation of liquid effluents (industrial and sanitary), identification of opportunities to prevent or reduce wastewater (reuse and improvement of operating conditions).

Systems in place are as follows: water management for minimal use; quantification of water discharges; compliance of discharges with regulatory requirements; maintenance of potable water systems and wastewater treatment units; monitoring of compliance of wastewater with applicable requirements; and employee training on water use guidelines.

SRPC encourages its employees to reuse and recycle materials. Minimization and reusing common office wastes such as paper, aluminum cans, and cardboard are also being practiced. At the same time, it also encourages employees to refrain from using non-recyclable items.

Hazardous wastes such as used lead-acid batteries, tires, and used oil are disposed of based on regulatory standards. Company storage facilities are periodically inspected by the DENR and MMT. Such materials are also managed for their monetary value (cash value derived from these waste materials are allocated to various CSR projects).

The Company has standard procedures and practices, which include performance standards related to chemical spill prevention, control, and countermeasures.

SRPC does not transport hazardous wastes internationally. Hazardous wastes are treated and disposed of locally at licensed facilities and records are kept as appropriate at the site level.

SRPC makes sure that used oil, petroleum, and lubricants are safely impounded in a designated storage area. These are scheduled for treatment and recycling by an authorized hazardous waste transporter and treater for the first week of June 2015.

g4-EN22

Total water discharge by quality and destination Water used for hydroelectric generation is entirely returned to the river for irrigation use. Assessment of water quality downstream reflects significant improvement especially in terms of turbidity/clarity and total solids (dissolved and suspended). Results for both in situ measurements and chemical analyses indicate that all the identified parameters that define the desired quality of water for its intended beneficial use (i.e., for irrigation) are generally within the DENR guideline limits.

Full

g4-EN23

As greenhouse gas (gHg) emissions accounting evolves, the Company is making every effort to respond by establishing and eventually expanding its gHg inventory accordingly. The Company offsets carbon emissions with equivalent carbon-fixing, such as CO2 emissions reduction out of generating hydro power and tree planting activities.

p. 57 Full

g4-EN24

Total number and volume of significant spills No significant spills were recorded during this reporting period. Full

g4-EN25

Aside from gHg reduction programs being implemented, carbon sequestration programs are also in place. SRPC is continuously implementing the grow a Tree for San Roque Watershed initiative in support to the National greening Program of the government.

Hazardous wastes such as used oil and batteries are collected and stored in a designated storage area. These wastes are transported and treated locally at a licensed and DENR-accredited facilities and do not cross international boundaries.

Full

g4-EN26

Identity, size, protected status, and biodiversity value of water bodies and related habitats significantly affected by the organization's discharges of water and runoff

Downstream of the dam, assessment of water quality reflects significant improvement especially in terms of turbidity/clarity and total solids (dissolved and suspended). Suspended sediments play a major role in water quality as sediments may clog and damage fish gills and interfere with the photosynthetic processes of crops, as well as recreational activities and aesthetic enjoyment. Sediment may also carry other pollutants such as nutrients and toxic chemicals into the water body. As such, the significant reduction of sediment loads in water flowing downstream of the dam essentially proves the Project’s objective on water quality enhancement.

Full

ASPECT: PRODUCTS AND SERVICES Location of Disclosure/Direct Answer Omissions Full

g4-DMA

The company has procedures, manual standards, and practices that address environmental compliance obligations in operating and maintaining the San Roque Multipurpose Project as set forth in the Environmental Compliance Certificate (ECC) and the original, updated and supplemental Environmental Impact Study (EIS), and as further set forth in other applicable permits, regulatory approvals, laws, rules and regulations. The Company also maintains linkages with its stakeholders for collaborative partnerships towards environmental protection and conservation.

g4-EN27

Extent of impact mitigation of environmental impacts of products and services

The Company has a procedure manual on standards and practices that addresses environmental compliance obligations in operating and maintaining the San Roque Multipurpose Project as set forth in the Environmental Compliance Certificate (ECC) and the original, updated and supplemental Environmental Impact Study (EIS), and as further set forth in other applicable permits, regulatory approvals, laws, rules and regulations. SRPC also maintains linkages with its stakeholders for collaborative partnerships towards environmental protection and conservation.

Not Reported

g4-EN28

Percentage of products sold and their packaging materials that are reclaimed by category

Not Applicable. Hydroelectric power is the only product of SRPC. Hydro power passes through transmission lines and therefore there is nothing to reclaim.

Full

ASPECT: COMPLIANCE Location of Disclosure/Direct Answer Omissions Full

g4-DMA

Monitoring and reporting updates on environmental compliance are accomplished quarterly; afterward, the reports are submitted to the regulatory agencies.

g4-EN29

Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with environmental laws and regulations

During the period, the Company did not receive any violation notice pertaining to non-compliance with environmental requirements or penalties for any environmental offense.

Full

ASPECT: TRANSPORT Location of Disclosure/Direct Answer Omissions Full

g4-DMA

The Carbon Footprint Assessment was done to help quantify emissions, and explore possible measures to minimize them. Flexible work policies, programs to support use of mass transit, carpooling, and teleconferencing are some of the ways the Company reduces the environmental impact associated with workforce mobility.

g4-EN30

Significant environmental impacts of transporting products and other goods and materials for the organization’s operations, and transporting members of the workforce

NO. OF gALLONS OF DIESEL uSED FROM 2012 TO 2014

2012 2013 2014

40,554.21 37,360.39 41,575.20

This consists of fuel to run standby generator sets and company-owned vehicles for employee travel. This accounts for about 1,212.82 tons of CO2 emissions.

Full


SPECIFIC STANDARD DISCLOSuRES

ASPECT: OVERALL Location of Disclosure/Direct Answer Omissions Full

g4-DMA

SRPC strives to minimize the negative effects on the environment and continue to abide by regulations concerning the environment by allocating substantial investments and resources on a continuous basis to adopt and implement environmental protection and pollution-control measures. It pledges to integrate and implement environmental awareness into all aspects of its operation and management of the San Roque Hydroelectric Power Plant. Its corporate policy endeavors to fulfill environmental obligations through the following:

• Subscription to the Philippine Environmental Impact System.• Compliance with local, national, international environmental regulations applicable to the operation and management of the power plant.• Development and implementation of an Environmental Management System.• Imbibing the best practice in environmental management, including energy efficiency, water quality management, recycling and waste reduction, periodically updating these practices to incorporate relevant developments.• Conducting internal environmental audits and reviews on a periodic basis and measure activities against environmental goals.

The implementation of the Environmental Monitoring and Management Plan (EMMP) seeks to make the SRMP comply with the ECC conditions and other relevant environmental laws, regulations and guidelines. Site-specific Environmental Standards, Procedures and Practices (ES&Ps) were established and continuously implemented to minimize and mitigate adverse environmental impacts, prevent pollution, and evaluate environmental performance to identify areas for improvement.

SRPC also maintains an Environmental guarantee Fund (EgF) composed of the EgF Cash Fund and EgF Trust Fund. The EgF serves as contingency fund for covering expenses incurred by the rehabilitation/restoration of affected areas and other project-related effects that are not already addressed through other mitigation measures or programs and are not offset by positive impacts of the SRMP.

The Company also maintains an account for the Environmental Monitoring Fund (EMF), which a proponent shall commit to establish in support of the activities of the MMT for compliance monitoring. The EMF was established as agreed upon and specified in the MMT MOA among the DENR, SRPC, the NPC, Lgus, and other MMT representatives.

g4-EN31

Total environmental protection expenditures and investments by type SRPC maintains an account for Environmental Monitoring Fund (EMF), a fund that a proponent shall commit to establish in support of the activities of the MMT for compliance monitoring. The EMF was established as agreed upon and specified in the MMT MOA among DENR, SRPC, NPC, Lgus and other MMT representatives.

Full

ASPECT: SUPPLIER ENVIRONMENTAL ASSESSMENT Location of Disclosure/Direct Answer Omissions Full

g4-DMA

The Purchasing Policy covers the assessment of SRPC’s suppliers for their environmental performance; specifically, those dealing with hazardous waste. The Company makes sure that they are accredited by the DENR and comply with standards regarding their transport, treatment, and disposal.

g4-EN32

Percentage of new suppliers that were screened using environmental criteria

All suppliers were accredited for their legal and financial capability by a third-party expert. However, for siphoning service, suppliers are required to be DENR-accredited. Siphoning service comprise 0.7% of the total average annual purchases.

Full

g4-EN33

Significant actual and potential negative environmental impacts in the supply chain and actions taken

1. Number of suppliers subject to environmental impact assessments – NONE2. Number of suppliers identified as having significant actual and potential negative environmental impacts – NONE 3. Significant actual and potential negative environmental impacts identified in the supply chain – disposal of old Batteries and used oil4. Percentage of suppliers identified as having significant actual and potential negative environmental impacts with which improvements were agreed upon as a result of assessment – NONE5. Percentage of suppliers identified as having significant actual and potential negative environmental impacts with which relationships were terminated as a result of assessment – NONE

Full

ASPECT: ENVIRONMENTAL GRIEVANCE MECHANISMS Location of Disclosure/Direct Answer Omissions Full

g4-DMA

Environmental monitoring findings were reported and concerns were raised and discussed with the Multipartite Monitoring Team through the regular meetings. Should there be any concerns that need immediate attention, a special meeting will be conducted.

g4-EN34

Number of grievances about environmental impacts filed, addressed, and resolved through formal grievance mechanisms

There was no grievance about environmental impacts filed through formal grievance mechanism during the reporting period.

Environmental concerns were raised and discussed with the Multipartite Monitoring Team.

Full

CATEGORY: SOCIAL

Sub-Category: Labor Practices and Decent Work

ASPECT: EMPLOYMENT Location of Disclosure/Direct Answer Omissions Full

g4-DMA

To attract the best and most qualified applicants,SRPC ensures that its compensation package is competitive in the market with no discrimination toward age, ethnicity, gender or nationality, as indicated in the Recruitment and Benefits Policies. Competitive benefits in the power industry are granted to all regular employees. In case of vacancies, positions are first filled via internal sourcing, with external sourcing utilized only when there are no qualified internally sourced candidates. The Company also makes sure that there are no underage candidates, whether within its ranks or among its contractors and subcontractors. Just recently, SRPC was issued a certificate of Compliance on general Labor Standards and Occupational Safety and Health Standards by the Department of Labor and Employment (DOLE) Region I.

Tie-ups with universities that require on-the-job training for their students, particularly in the engineering field, are accommodated during summer. Annually, 12 fresh Engineering Board Exam passers are accommodated for the Cadetship Training program. Furthermore, in partnership with the DOLE in its Special Program for the Employment of Students (SPES), SRPC accommodates 10 students in the locality for a maximum of 30 days. The allowance for the students is based on the minimum wage in the region with SRPC shouldering the 60% and 40% by DOLE.

Seventy percent of the employees are male and specifically assigned in the Operations and Maintenance group, while 30% are female employees who are mostly assigned in the offices. The remuneration ratio of males and females is at ₱1.00:₱3.00

g4-LA1 Total number and rates of new employee hires and employee turnover by age group, gender and region

p. 68 Full

g4-LA2 Benefits provided to full-time employees that are not provided to temporary or part-time employees, by significant locations of operation

pp. 65-67 Full

g4-LA3 Return to work and retention rates after parental leave, by gender p. 66 Full

ASPECT: LABOR/MANAGEMENT RELATIONS Location of Disclosure/Direct Answer Omissions Full

g4-DMA

Notices regarding operational changes are disseminated to employees within 15 days via regular meetings with the Management every first Monday of the month. Notices regarding major organizational issues usually come from the Office of the President and CEO.

g4-LA4 Minimum notice periods regarding operational changes, including whether these are specified in collective agreements

Seven days Full

G4 Index



ASPECT: OCCUPATIONAL HEALTH AND SAFETY Location of Disclosure/Direct Answer Omissions Full

g4-DMA

Occupational Health and Safety is everyone’s concern. The Safety and Health Committee’s members comprise the Management, rank and file employees, and representatives from the contractor’s group (security, medical services, the food concessionaire, and building/grounds and road maintenance providers) so as to represent all employees and their respective issues, as per Occupational Safety and Health (OSH) Standard 1040 (Health and Safety Committee).

Following the OSH Standard 1050 (Notification and Keeping of Records of Accidents and/or Illnesses), the Company prepares weekly, monthly and annual performance reports and submits these to all concerned parties. The Operations and Maintenance team holds daily Toolbox Meetings to review the statuses of work activities and discuss the most recent Job Hazard Analysis (JHA) in order to prevent work-related incidents and reduce risks. Health care provider Prevhealth, Inc issues regular safety and health alert and bulletins for the reference and information of all employees.

All new hires, on-the-job trainees, Cadet Engineers, and SPES undergo Safety and Security orientation prior to their dispatch.

g4-LA5 Percentage of total workforce represented in formal joint management-worker health and safety committees that help monitor and advise on occupational health and safety programs

p. 63 Full

ASPECT: OVERALL Location of Disclosure/Direct Answer Omissions Full

g4-LA6 Type of injury and rates of injury, occupational diseases, lost days, and absenteeism, and total number of work-related fatalities, by region and by gender

pp. 63-64 Full

g4-LA7 Workers with high incidence or high risk of diseases related to their occupation

p. 64 Full

g4-LA8 Health and safety topics covered in formal agreements with trade unions Not applicable. The Company has no labor union. However, it has a tie-up with the Department of Labor and Employment (DOLE) Region 1 Office for the KAPATIRAN WISE-TAV Program which encourages the companies to assist/guide small companies in eventually becoming fully compliant with labor laws and OSH Standards.

Full

ASPECT: TRAINING AND EDUCATION Location of Disclosure/Direct Answer Omissions Full

g4-DMA

It is SRPC’s goal to continue improving its workforce through in-house or external training, as per the Policy on Training ADM-04013.

A Skills and Knowledge Assessment (SKA), launched by the Technical Improvement and Audit group the previous year, is required specifically for managers in order to identify any gaps in the competency of the technical personnel and address these via training (the Training Matrix). The SKA has been integrated in the Performance Management Process so that the successful compliance of the employee in a given fiscal year will eventually affect his/her performance bonus as well as his/her salary increases, if any, for that period.

The Training Matrix is a tool used to list down the types of priority training needed by the employee as against the actual training sessions attended during the fiscal year. It is a framework to easily identify common skills required by a certain group rather than one person at a time, making it easier to target new critical skills needed to be acquired for long term goals. It also serves as the basis of the training plan budget.

Standards and Procedures specify that technical personnel, particularly the Operations and Maintenance group, must undergo the qualification cards to qualify for performing the functions of the next-level position.

A Leadership Development Program was also re-launched in 2014 in order to establish a more measurable compliance, as well as reward those managers who complete the program for their subordinates.

g4-LA9 Average hours of training per year per employee by gender, and by employee category

pp. 65, 67-68 Full

g4-LA10

Programs for skills management and lifelong learning that support the continued employability of employees and assist them in managing career endings

p. 67 Full

g4-LA11

Percentage of employees receiving regular performance and career development reviews, by gender, and by employee category

p. 68 Full

ASPECT: DIVERSITY AND EQUAL OPPORTUNITY Location of Disclosure/Direct Answer Omissions Full

g4-DMA

Most of SRPC’s employees come from the Cordillera Administrative Region (CAR) and the province of Pangasinan at 22% and 40%, respectively, as these are the areas where the Company operates. Thirteen percent come from the other areas of Luzon, 3% from Visayas, 1% from Mindanao, and 17% from Metro Manila.

Fifty percent of the employees from the Cordillera Administrative Region are Indigenous Peoples from the Ibaloi, Kankanaey, Kalinga, and Kalanguya ethnic groups.

The SRPC population is 71% male and 29% female. Majority of the workforce are within the 30-39 and 40-49 age groups for both male and female.

g4-LA12

Composition of governance bodies and breakdown of employees per employee category according to gender, age group, minority group membership, and other indicators of diversity

pp. 67-68 Full

Eu15 Percentage of employees eligible to retire in the next 5 and 10 years broken down by job category and by region

p. 65 Full

Eu17 Days worked by contractor and subcontractor employees involved in construction, operation and maintenance activities

p. 63 Full

Eu18 Percentage of contractor and subcontractor employees that have undergone relevant health and safety training

p. 65 Full

ASPECT: EQUAL REMUNERATION FOR WOMEN AND MEN Location of Disclosure/Direct Answer Omissions Full

g4-LA13

Ratio of basic salary and remuneration of women to men by employee category, by significant locations of operation

p. 66 Full

ASPECT: SUPPLIER ASSESSMENT FOR LABOR PRACTICES Location of Disclosure/Direct Answer Omissions Full

g4-DMA

under the Memorandum of understanding (MOu) with SRPC’s Service Contractors, the Joint Assessment Inspection is conducted by Labor Law Compliance Officers (LLCO) representatives from Region 1 to assess each contractor’s compliance with labor laws, and safety and health standards.

Contractor compliance is also guided by the DOLE Kapatiran WISE-TAV Program and the DOLE Incentivizing Compliance Program. These programs also help SRPC oversee the compliance of its contractors and sub-contractors with the labor and safety standards during their service contract with the Company.

Service contractors that are assessed by DOLE are awarded or given a Certificate of Compliance (COC) in the general Labor Standards and Occupational Safety and Health Standards signifying that they have complied with the required necessary Labor Standards.

g4-LA14

Percentage of new suppliers that were screened using labor practices criteria

p. 64 Full

g4-LA15

Significant actual and potential negative impacts for labor practices in the supply chain and actions taken

p. 64 Full


G4 Index

ASPECT: INDIGENOUS RIGHTS Location of Disclosure/Direct Answer Omissions Full

g4-HR8 Total number of incidents of violations involving rights of indigenous peoples and actions taken

p. 29 Full

ASPECT: ASSESSMENT Location of Disclosure/Direct Answer Omissions Full

g4-HR9 Total number and percentage of operations that have been subject to human rights reviews or impact assessments

pp. 29-30 Full

ASPECT: SUPPLIER HUMAN RIGHTS ASSESSMENT Location of Disclosure/Direct Answer Omissions Full

g4-DMA

Suppliers are accredited by a third-party assessor, which investigates their legal existence and financial capability.

g4-HR10

Percentage of new suppliers that were screened using human rights criteria

pp. 29-30 Full

g4-HR11

Significant actual and potential negative human rights impacts in the supply chain and actions taken

pp. 29-30 Full

ASPECT: HUMAN RIGHTS GRIEVANCE MECHANISMS Location of Disclosure/Direct Answer Omissions Full

G4-HR12

Number of grievances about human rights impacts filed, addressed, and resolved through formal grievance mechanisms

pp. 28-29 Full

SPECIFIC STANDARD DISCLOSuRESASPECT: LABOR PRACTICES GRIEVANCE MECHANISMS Location of Disclosure/Direct Answer Omissions Full

g4-DMA

SRPC formalized its Open Door Policy in 2013 to make sure that all employees have channels of communication with the Management. The dissemination of the Compliance Manual was discussed by the Compliance Officer with all regular employees. A workshop on Leading/Managing through Employee Discipline was conducted initially and cascaded to the remaining employees in 2014.

SRPC has a policy on Rules and Regulations on Disciplinary Actions. The composition of the Investigation Committee is as follows: Department Head as the Chairman; Human Resources Manager, and; three other employees (two of whom are either not from Human Resources (HR) or is not a Manager subject to the recommendation of HR to the Chairman). The HR representative or any other designated employee shall be assigned to record the minutes of the investigation and hearings. To ensure fairness and impartiality, the employees’ Manager or Supervisor, who is either a witness to the offense or is a party in the case, shall not be named a member of the Investigation Committee.

Employees also have access to the Working Committee Minutes of Meetings and the general Assembly Minutes which are posted in bulletin boards and emailed to department representatives for proper dissemination in their respective work areas.

g4-LA16

Number of grievances about labor practices filed, addressed, and resolved through formal grievance mechanisms

No human rights violations, discrimination cases, nor incidents of forced labor among SRPC's employees, its contractors or subcontractors, and suppliers have been reported to date.

Full

Sub-Category: Human Rights

ASPECT: INVESTMENT Location of Disclosure/Direct Answer Omissions Full

g4-DMA

There is an ongoing coordination with the Region 1 office of the Department of Labor and Employment in order to orient employees on sexual harassment, the Magna Carta for Women, and other related matters. It is to be scheduled after the Turbine Inspection in June 2015.

g4-HR1 Total number and percentage of significant investment agreements and contracts that include human rights clauses or that underwent human rights screening

pp. 25-26 Full

g4-HR2 Total hours of employee training on human rights policies or procedures concerning aspects of human rights that are relevant to operations, including the percentage of employees trained

p. 28 Full

ASPECT: NON-DISCRIMINATION Location of Disclosure/Direct Answer Omissions Full

g4-HR3 Total number of incidents of discrimination and corrective actions taken No human rights violation, discrimination case, or incidence of forced labor among SRPC employees, contractors, subcontractors, or suppliers has been reported to date.

Full

ASPECT: FREEDOM OF ASSOCIATION AND COLLECTIVE BARGAINING Location of Disclosure/Direct Answer Omissions Full

g4-DMA

SRPC has no labor unions however, it does not prohibit the right of employees to associate or organize and collectively bargain with the Management, either. There are also several avenues of communication available to all employees, which are supported by the Open Door Policy. These are:

• General Assemblies scheduled every first Monday of the month, where employees from the manager to the rank and file gather to discuss Safety, Health, and Wellness, and the policies of the Company. updates on employee programs and benefits are also part of the discussion.• Voice-Out Meetings where the President and CEO schedules meetings with a group of employees. This is a venue where concerns or suggestions in improving work process or enhancing current benefits and practices are discussed. • There is a Working Committee comprised of department representatives that discusses employee programs such as team buildings/Company outings, Safety Day celebrations, corporate sports festivals, Christmas gatherings, the Company uniform, and others. They prepare the plans, budget, and oversee the implementation of the programs.• Daily Toolbox Meetings where scheduled works for the day and safety, particularly job hazard analysis is discussed by the Operations and Maintenance Group.

g4-HR4 Operations and suppliers identified in which the right to exercise freedom of association and collective bargaining may be violated or at significant risk, and measures taken to support these rights

p. 28 Full

ASPECT: CHILD LABOR Location of Disclosure/Direct Answer Omissions Full

g4-HR5 Operations and suppliers identified as having significant risk for incidents of child labor, and measures taken to contribute to the effective abolition of child labor

The Company does not employ minors who are under the legal working age.

Full

ASPECT: FORCED OR COMPULSORY LABOR Location of Disclosure/Direct Answer Omissions Full

g4-HR6 Operations and suppliers identified as having significant risk for incidents of forced or compulsory labor, and measures to contribute to the elimination of all forms of forced or compulsory labor

No human rights violations, discrimination cases, incidents of forced labor among SRPC's contractors or subcontractors and suppliers have been reported to date.

Full

ASPECT: SECURITY PRACTICES Location of Disclosure/Direct Answer Omissions Full

g4-DMA

All security personnel are equipped to handle human rights cases as part of their training that is provided by the service contractor.

g4-HR7 Percentage of security personnel trained in the organization’s human rights policies or procedures that are relevant to operations

p. 30 Full



Sub-Category: Society

ASPECT: LOCAL COMMUNITIES Location of Disclosure/Direct Answer Omissions Full

g4-DMA

SRPC envisions each household in partner communities to have one entrepreneur and one gainfully employed member to achieve a household income that is above poverty level.

To achieve this, the Company uses the Strategic Social Investment Program (SSIP), which contains information gathered and analyzed with assisted community organizations, to determine the best possible move regarding the needs of its neighboring communities. SRPC provides assistance using the Community-Driven Enterprise Development approach, with reference to the SSIP. The socio-economic development plans, projects, and activities are designed based on community needs and funding of which will have to be prioritized and approved by the SRPFI’s Board of Trustees.

ASPECT: LOCAL COMMUNITIES Location of Disclosure/Direct Answer Omissions Full

g4-SO1 Percentage of operations with implemented local community engagement, impact assessments, and development programs

pp. 73-76 Full

g4-SO2 Operations with significant actual and potential negative impacts on local communities

pp. 73-76 Full

ASPECT: ANTI-CORRUPTION Location of Disclosure/Direct Answer Omissions Full

g4-DMA

SRPC does not tolerate corruption. The Compliance Officer submits a quarterly report on the compliance with anti-corruption policies and this is forwarded to the President and to Marubeni Main Office. The policy with regard to giving monetary contributions to local politicians is coded in ADM-05-11 and ADM-05-11A (Policy on giving and Receiving gifts and Entertainment).

g4-SO3 Total number and percentage of operations assessed for risks related to corruption and the significant risks identified

pp. 24-25 Full

g4-SO4 Communication and training on anti-corruption policies and procedures pp. 24-25 Full

g4-SO5 Confirmed incidents of corruption and actions taken p. 25 Full

Eu22 Number of people physically or economically displaced and compensation, broken down by type of project.

pp. 74-75 Full

ASPECT: PUBLIC POLICY Location of Disclosure/Direct Answer Omissions Full

g4-DMA

The Company strictly adheres to its anti-partisan politics policy.

g4-SO6 Total value of political contributions by country and recipient/beneficiary p. 41 Full

ASPECT: ANTI-COMPETITIVE BEHAVIOR Location of Disclosure/Direct Answer Omissions Full

g4-SO7 Total number of legal actions for anti-competitive behavior, anti-trust, and monopoly practices and their outcomes

p. 25 Full


g4-SO8 Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with laws and regulations

p. 25 Full

ASPECT: SUPPLIER ASSESSMENT FOR IMPACTS ON SOCIETY Location of Disclosure/Direct Answer Omissions Full

g4-DMA

On average, 67 suppliers are accredited annually. Eighteen percent (or 12 out of 67) of these suppliers are from neighboring towns. As per directive of the Management, the Company prioritizes suppliers from Pangasinan to help uplift lives of communities near the San Roque Dam.

g4-SO9 Percentage of new suppliers that were screened using criteria for impacts on society

18% (12/67) suppliers were screened from neighboring towns. This is to help uplift lives of communities near the power plant.

Full

g4-SO10

Significant actual and potential negative impacts on society in the supply chain and actions taken

Number of suppliers subject to assessments for impacts on society– 12 suppliersNumber of suppliers identified as having significant actual and potential negative impacts on society – NONE

Full

ASPECT: GRIEVANCE MECHANISMS FOR IMPACTS ON SOCIETY Location of Disclosure/Direct Answer Omissions Full

g4-DMA

SRPC observes strict adherence to government regulations, the Power Purchase Agreement, and other Memorandums of Agreement with partner agencies. It also adapted the Community-Driven Development Approach, which provides an opportunity for the Company to address community grievances.

g4-SO11

Number of grievances about impacts on society filed, addressed, and resolved through formal grievance mechanisms

None. Full

ASPECT: DISASTER / EMERGENCY PLANNING AND RESPONSE Location of Disclosure/Direct Answer Omissions Full

g4-DMA

Procedures and protocols for responses relating to emergency/disaster cases are set forth in the Company’s Emergency Action Plan. SRPC aims for the synchronicity of its Emergency Action Plan with the Disaster Risk Reduction and Management Plan of Local government units at both municipal and provincial levels.

Sub-Category: Product Responsibility

ASPECT: CUSTOMER HEALTH AND SAFETY Location of Disclosure/Direct Answer Omissions Full

g4-DMA

As part of the Hazard Recognition and Risk Management Program, various safety inspections, audits, and assessments are conducted to evaluate and assess SRPC’s compliance with OSH regulations and generate recommendations to address gaps in reference to OSH Standards. These initiated inspections/audits are:

• DOLE Technical Safety Inspection on Electrical/Mechanical Equipment• DOLE Joint Assessment Inspection on Labor Laws and Occupational Safety and Health Standards • Risk Assessment Audit of Power Generating Components• Fire Safety Inspection by the Bureau of Fire Protection• Fire Protection System Audit by Third Party Entity• Safety Management Systems Audit by a Third Party DOLE Accredited Entity• Job Hazard Analysis and Safety Assessment

SPRC also abides by the DOLE’s Zero Accident Program (ZAP).

g4-PR1 Percentage of significant product and service categories for which health and safety impacts are assessed for improvement

Initiated inspections and assessments such as:a. DOLE Technical Safety Inspection on Electrical/Mechanical Equipmentb. DOLE Joint Assessment Inspection on Labor Laws and Occupational Safety and Health Standards c. Risk Assessment Audit of Power generating Componentsd. Fire Safety Inspection by the Bureau of Fire Protection and 3rd party entity

Full

g4-PR2 Total number of incidents of non-compliance with regulations and voluntary codes concerning the health and safety impacts of products and services during their life cycle, by type of outcomes

Initiated inspections and assessments such as:a. DOLE Technical Safety Inspection on Electrical/Mechanical Equipmentb. DOLE Joint Assessment Inspection on Labor Laws and Occupational Safety and Health Standards c. Risk Assessment Audit of Power generating Componentsd. Fire Safety Inspection by the Bureau of Fire Protection and 3rd party entity

Full



ASPECT: CUSTOMER HEALTH AND SAFETY Location of Disclosure/Direct Answer Omissions Full

Eu25 Number of injuries and fatalities to the public involving company assets, including legal judgments, settlements and pending legal cases of diseases.

p. 65 Full

ASPECT: PRODUCT AND SERVICE LABELING Location of Disclosure/Direct Answer Omissions Full

g4-DMA

SRPC abides by the Power Purchase Agreement, the Philippine grid Code, the Department of Energy’s Ancillary Service Procurement Plan, the Ancillary Service Procurement Agreement with National Grid Corporation of the Philippines, and the DOE’s 1-94 – EPIRA Law.

g4-PR3 Type of product and service information required by the organization’s procedures for product and service information and labeling, and percentage of significant product and service categories subject to such information requirements

pp. 13, 15 Full

g4-PR4 Total number of incidents of non-compliance with regulations and voluntary codes concerning product and service information and labeling, by type of outcomes

None. Full

g4-PR5 Results of surveys measuring customer satisfaction There is a healthy relationship between SRPC, NPC, SPDC and NgCP. SRPC is paid on time, dispatch instructions are followed, constant interaction and open communication are maintained.

Full

ASPECT: MARKETING COMMUNICATIONS Location of Disclosure/Direct Answer Omissions Full

g4-PR6 Sale of banned or disputed products Not applicable. Not Reported

g4-PR7 Total number of incidents of non-compliance with regulations and voluntary codes concerning marketing communications, including advertising, promotion, and sponsorship, by type of outcomes

Not applicable. Not Reported

ASPECT: CUSTOMER PRIVACY Location of Disclosure/Direct Answer Omissions Full

g4-PR8 Total number of substantiated complaints regarding breaches of customer privacy and losses of customer data

None. Full


g4-PR9 Monetary value of significant fines for non-compliance with laws and regulations concerning the provision and use of products and services

None. Full

ASPECT: ACCESS Location of Disclosure/Direct Answer Omissions Full

g4-DMA

Due to compliance with the PPA, the San Roque Hydroelectric Power Plant has been found to be 100% reliable and available.

Eu26 Percentage of population unserved in licensed distribution or service areas.

Reporting on the percentage of an unserved population in licensed distribution areas is not applicable to SRPC’s case.

Not Reported

Eu27 Number of residential disconnections for non-payment, broken down by duration of disconnection and by regulatory regime.

The SRPC is not a distributor; hence, it cannot influence power prices. This is the reason the company is not affected by the electricity’s price volatility in the market. Moreover, being a non-distributor, the company does not directly engage electric customers in any way, such as in matters of customer accounts, disconnection for non-payment, and regulations on transmission and distribution lines.

Full

Eu28 Power outage frequency. With the annual 15 days allowable downtime, the Company utilized an average of nine days for the regular maintenance and power tunnel inspection. With this, SRPC has maintained its 100% reliability and 97.53% availability in power generation.

Full

Eu29 Average power outage duration. 3.129 hours. Full

Eu30 Average plant availability factor by energy source and by regulatory regime.

p. 15 Full

ASPECT: PROVISION OF INFORMATION Location of Disclosure/Direct Answer Omissions Not Reported

2014 SR the Power of Water-final

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