CASE 1 - Amkor Anam

GREENING THE BUSINESS PARTNERS-

AMKORTECHNOLOGY PHILIPPINES

Case 1

I. BACKGROUND

Philippines

Established in 1968, grew to be the world’s largest semiconductor packaging and test company.

BACKGROUND

Its name Amkor was indicative of the countries from which its owners came, namely

America and Korea,

while its previous name, Anam, was coined from

“A” (for Asia) and “nam” (meaning South)

The company was widely known for its experience in technological IC packaging and was the acknowledged leader in this field.

It also fabricated semiconductors, packaged its own products, and designed integrated circuit for approximately 150 customers worldwide.

In 1956, its founder, Hyang-Soo Kim, initially incorporated the company in Korea as Anam Industrial Co., Ltd. And by 1968, the company began its semiconductor assembly business and established Amkor.

Its first US office was opened in Pennsylvania in 1970, but it was only in 1989 that Amkor Philippine site.

Amkor Anam’s services and products support all levels of electronics comprising

PCs/workstations, automotive/industrial component, office equipment, telecom/cellular/pager components and

other consumer requirements.

The company has always shown considerable interest and initiative to incorporate environmental management into its operations.

It initiated several reduction programs such as those for

chemical/water, solid waste, sludge. And so on.

For chemical/water reduction program,

the company installed a recycling plant for water from plating machines and also for the cooling water from dicing saw.

For the solid waste reduction program,

it started to recycle expired mold pellets and runners, and

succeeded in reducing a significant quantity of expired mold compounds.

The company reduced sludge generation by replacing chemicals.

Amkor Anam’s environmental initiatives were formalize under an integrated management system to ensue continuous improvement in its environmental performance.

This Environmental Management System (EMS) was established under the structure of ISO 14001’s system of standards, which had the following basic modules:

POLICYPLANNING IMPLEMENTATION AND OPERATIONCHECKING & CORRECTIVE ACTION/MONITORING

& MEASUREMENTMANAGEMENT REVIEW

The Environmental Policy of Amkor Anam reads as follows:

To improve the environment by striving to meet all

Relevant environmental regulations using Pollution

Prevention, Waste Minimization, and theConservation of Natural Resources as the bases

of ourenvironmental management programs.

II. STATEMENT OF THE PROBLEM/OBJECTIVES

How does Amkor Anam Philippines deal with EMS standards in greening its supply chain?

STATEMENT OF THE PROBLEM

To identify the environmental aspects and their associated impacts of the company EMS standards

To determine the different business partnerships of the company and to implement and operate their different ways on how to green these partnerships in the supply chain.

To involve the community in greening the supply chain.

To determine the net effects of Environmental Management System (EMS) in the company.

OBJECTIVES

III. ALTERNATE COURSE OF ACTION (strategies)

Raw materials

metallic compounds

various chemicalsSolvents, acids, bases, paints, inks, thinner,

water die, lead frames, molding compounds, epoxy & gold wire

ASPECTS

Wastes & HazardsOil wasteSolventSludgeMolding compoundsUsed batteriesSolder dross – used material for plating

ASPECTS

Post history of the site/Locality

Used to be a dumping ground for garbage

Paliko Creek, located at the back of the Amkor Anam plant in Barangay Cupang, Muntinlupa,

ASPECTS

Raw materials contain an element that are toxic by its nature

Wastes and Hazards pose substantial or potential threats to public health or the environment

Post history of the site : became a major source of disease for the community

IMPACTS

The BUSINESS PARTNERS OF THE COMPANY are associated with its operations in different capacities and in the different phases of the production process

Inbound logistics

Production/Internal supply chain

Outbound logistics

SUPPLY CHAIN

Material suppliers & vendors

raw materials metallic compounds

various chemicalsSolvents, acids, bases, paints, inks, thinner, water

die, lead frames, molding compounds, epoxy & gold wire

INBOUND LOGISTICS

Contractors & Service Providers

Construction of facilities

Services likeShuttle buses, waste treatment, janitorial, security, canteen, trucking and forwarding

INBOUND LOGISTICS

Suppliers have to give detailed description as to

How they have handled the chemicals

Controlled their movement

How they propose to dispose of the waste generated in the process

INBOUND LOGISTICS

Extra precautions for chemicals listed in the

PICCS’ list of hazardous chemicals as specified in RA6969

PICC (Philippine Inventory of Chemical Substances)

INBOUND LOGISTICS

The company gives a checklistLegal compliance

MSDS (Material Safety Data Sheet) Contents of materials Emergency procedures

IQA (Incoming Quality Assurance) Looks at incoming materials Report on changes in chemical formulation

INBOUND LOGISTICS

Emergency preparedness duringDeliveries & Transfer (spill and leakages)

Progress in environmental initiative programs

INBOUND LOGISTICS

Other legal requirements

Environmental Compliance Certificates

Permit renewals

Accreditation for pollution control officers

INBOUND LOGISTICS

Regular supplier/vendor audits on-site

Environmental performance

Problem with standards

Recommendations- explained in detail- contact persons- free to ask advice

INBOUND LOGISTICS

Closure AuditsVerify if recommendations are carried out

ATP guidance on documentation processhelps chalk out programs leading to legal

complianceIdentify aspects and impactsSet up EMS

INBOUND LOGISTICS

Recycling on solid wastesUsed plastic containers and glass bottlesWaste recycling programs

Conservation of water and electricityWaste water treatment plant

INBOUND LOGISTICS

Electroplating & deionized water treatment.

IC packaging, fabrication at semicons, packaging, designing of integrated circuits.

Production Process/Internal Supply Chain

Coordination with suppliers if there are any materials that need to be reformulated or redesigned

Mold operations melamine

Benzene (acetone) Environmentally harmful - phase out

CHANGE = CLEANER PRODUCTION

Production Process/Internal Supply Chain

The company has already redesigned its production process in an effort to achieve a 75-percent reduction in non-biodegradable solid plastic waste

PRODUCTION PROCESS

Truckers and Bus Drivers

Waste RecyclersHandle the pick up, recycling & disposal of

solid and liquid waste.

Outbound Logistics

Business partners and other service providers in the person of contractors help the company dispose of different kind of waste such as:Oil wasteSolventSludgeMolding compoundsUsed batteriesSolder dross – used material for plating

OUTBOUND LOGISTICS

SludgeRecover metals (Pb, Cu, Sn etc.)

resold to various customers

Used batteriesRecycled and resold

Plastic trays“reuse concept”

OUTBOUND LOGISTICS

Other solid wastePaper cartonsStyrofoamScrap metalsUsed computer cartridgesUsed oil

Several buyers/contractors recycle them

OUTBOUND LOGISTICS

Training & Awareness seminars Appropriate to their positions Analyzing processes & room for improvements

for the enhancement of environmental performance Legal compliance Risk reduction Cost saving Lower operating cost Improved public image Increased market access Customer satisfaction

SUPPLY CHAIN

Identification of the EMS strategy

Objectives of EMSOne Point Lesson

Ensuring Employee Participation in Achieving a Green Supply Chain

One Point LessonWorkforce into many teamsEach with a supervisor

Discuss a specific principle of ISO 14001 in FILIPINOVisuals like cartoon and charts


To retain the interest and motivation of the employees“EARTH MONTH” – environmental activities

Tree planting

Poster and slogan-making contest

Environmental exhibits

Environmental protection forums


“QUALITY CIRCUIT”Company newsletter

One column dedicated to a discussion of environmental issues and related programs in the organization


Hung on bulletin boards DENR posters Mission statement Environmental policy

(employees, customers & visitors)

DENR - Dep’t of Environment and Natural Resources


Whenever the working committee met with the management team, in addition to presenting the action plan for EMS-related activities, the working committee always stressed the importance of involving the host community in its environmental program.

Reaching out to involve the Community in Greening the Supply Chain

Without their involvement, the committee felt that the effectiveness and efficiency of the company’s environmental program would not be successful.


CLEAN UP OF PALIKO CREEK

Present at these meetings were the

Barangay foundation, City Planning and Development Office, LLDA (Laguna Lake Development Agency), Community Development Division, Environmental Sanitation Office, Lake Management Office and Amkor Anam.


After a number of meetings, these groups and agencies,declaring their commitment to clean up the Paliko Creek,signed a manifesto that highlighted the following:

The designation of a permanent watcher and cleaner

The issuance of barangay ordinance creating rules against dumping and its corresponding sanctions

The fabrication of several trolley bins from scrap wood donated by Amkor Anam

The recommendation to monitor other companies that dumped wastes on the creek and to request them to develop their own cleanliness and environmental programs.


Amkor Anam’s initiatives have met with many great rewards.

The company has saved a lot from its energy and water conservation programs.

Its production efficiency has also increased on account of EMS such that the company can now handle additional work for export to the US, Japan and Europe.

Net Effects

Regulatory risks have gone down and the company is always ready for inspection by government bodies.

Its environmental initiatives have enhanced its standing in the community.

Its environmental programs have brought different groups together to work for a common goal “thereby creating immeasurable goodwill and cooperation.”

Net Effects

All these achievements have shown Amkor Anam to demonstrate that industry leadership could be achieve, not only by economic accomplishments, but also through the company’s participation in furthering environmental and social responsibility.

Net Effects

The improvement of environmental performance that came about through the establishment of EMS in the company resulted in several benefits.

BENEFITS OF EMSReduced RiskLess Regulatory OversightImproved Public ImageStakeholder’s SatisfactionIncreased Market AccessLowered Operating Costs

Emphasized accidents prevention Compliance to regulationsEnvironment and safety-conscious vendors

and subcontractorPrevention of penalties

Reduced Risk

On-time permits renewal

Monitoring included in the computerized maintenance management system

renewal triggered two months before expiration

Stricter discharge monitoring

Set-up an in-house laboratoryWeekly audit of waste treatment plant effluents

Less Regulatory Oversight

IPO listing compliance

Extensive features in conventions, newspapers, and invitations for lectures

Excellent results in customers' audits on EHS

Benchmarking of other companies striving for ISO 14001 certification* IDT * Fujitsu* Uniden * AMI* Kodak Phils. * Sharp* Temic * Astec* San Miguel Packaging

Improved Public image

Employees' active participation (TPM's)Improved community relationshipSemi-annual Community Right-to-Know

MeetingsLGU's (Local government units) & LLDDA's

(Laguna Lake Development Authority)Making us models and benchmark for othersCited by LLDA for significant reduction in BOD

loadingPaliko Creek experience to be adopted to other

river system in Muntinlupa CityHosted the 1st Multi-Sectoral meeting last Nov.

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Stakeholders' Satisfaction

Compliance to customers translated to competitive advantage

Increasing trend on number of customers asking for environment related programs

Increased Market Acces

Reduced chemical purchases (25 percent)

Reduction in solid waste disposal ( recycling and waste exchange)

Energy efficiency (Enercon)

Reduced supplies (3R's programs at TPM)

Lowered Operating Costs

IV. ANALYSIS / EVALUATION

Republic Act No. 6969 “Toxic Substances and Hazardous & Nuclear

waste Control Act of 1990”

Sec. 4. Objectives – The Objectives of this Act

Sec. 4. Objectives

a) To keep an inventory of chemicals that are presently being imported, manufactured, or used, indicating, among others, their existing and possible uses, test data, names of firms manufacturing or using them, and such other information as may be considered relevant to the protection of health and the environment;

Sec. 4. Objectives

c) To inform and educate the populace regarding the hazards and risks attendant to the manufacture, handling, storage, transportation, processing, distribution, use and disposal of toxic chemicals and other substances and mixture.

Sec. 8. Pre-Manufacture and Pre-Importation Requirements.

- Before any new chemical substance or mixture can be manufactured, processed or imported for the first time as determined by the Department of Environment and Natural Resources, the manufacturer, processor or importer shall submit the following information: the name of the chemical substance or mixture; its chemical identity and molecular structure; proposed categories of use; an estimate of the amount to be manufactured, processed or imported; processing and disposal thereof; and any test data related to health and environmental effects which the manufacturer, processor or importer has.

Sec. 9. Chemicals Subject to Testing. - Testing shall be required in all cases where:

The manufacturers, processors or importers shall shoulder the costs of testing the chemical substance or mixture that will be manufactured, processed, or imported.

Sec. 11. Chemical Substances Exempt from Pre-Manufacture Notification. - The manufacture of the following chemical substances or mixtures shall be exempt from pre-manufacture notification:

d) Chemical substances and mixtures that exist temporarily and which have no human or environmental exposure such as those which exist as a result of chemical reaction in the manufacture or processing of a mixture of another chemical substance.

Republic Act No. 9003 “Ecological Solid Waste Management Act of

2000”

Sec. 2. Declaration of Policies - It is hereby declared the policy of the State to adopt a systematic, comprehensive and ecological solid waste management program which shall:

Sec. 2. Declaration of Policies

(a) Ensure the protection of the public health and environment;

(c) Set guidelines and targets for solid waste avoidance and volume reduction through source reduction and waste minimization measures, including composting, recycling, re-use, recovery, green charcoal process, and others, before collection, treatment and disposal in appropriate and environmentally sound solid waste management facilities in accordance with ecologically sustainable development principles;

Sec. 2. Declaration of Policies

(d) Ensure the proper segregation, collection, transport, storage, treatment and disposal of solid waste through the formulation and adoption of the best environmental practice in ecological waste management excluding incineration;

(f) Encourage greater private sector participation in solid waste management;

Sec. 3. Definition of Terms. - For the purposes of this Act:

(nn) Source reduction shall refer to the reduction of solid waste before it enters the solid waste stream by methods such as product design, materials substitution, materials re-use and packaging restrictions;

Republic Act No. 9275"Philippine Clean Water Act of 2004“

SECTION 2. Declaration of Policy- The State shall pursue a policy of economic growth in a manner consistent with the protection, preservation and revival of the quality of our fresh, brackish and marine waters. To achieve this end, the framework for sustainable development shall be pursued. As such, it shall be the policy of the State:

SECTION 2. Declaration of Policy

a) To streamline processes and procedures in the prevention, control and abatement of pollution of the country's water resources;

b) To promote environmental strategies, use of appropriate economic instruments and of control mechanisms for the protection of water resources;


c) To formulate a holistic national program of water quality management that recognizes that water quality management issues cannot be separated from concerns about water sources and ecological protection, water supply, public health and quality of life;

d) To formulate an integrated water quality management framework through proper delegation and effective coordination of functions and activities;


h) To promote public information and education and to encourage the participation of an informed and active public in water quality management and monitoring;

i) To formulate and enforce a system of accountability for short and long-term adverse environmental impact of a project, program or activity;

SECTION 26. Incentives Scheme

- An incentive scheme is hereby provided for the purpose of encouraging LGUs, water districts (WDs), enterprises, or private entities, and individuals, to develop or undertake an effective water quality management, or actively participate in any program geared towards the promotion thereof as provided in this Act.

V. CONCLUSION

When implemented properly in the company, the modules of EMS are expected to have substantial impact on

environmental performance and compliance, competitive edge and marketing advantage, corporate image, cost savings and productivity, and above all, on the urge to contribute toward sustainability

V. CONCLUSION

The supply chain comprises inbound logistics, production, and outbound logistics. The business partners associated with each of these phases contributes significantly toward the greening of the supply chain.

V. CONCLUSION

THANK YOU

CASE 1 - Amkor Anam

Documents

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