THAIOIL GROUPSYNERGY
The First Story Of Thaioil’s Quest For Sustainability 1
02About This Report
24Our Good Corporate Governace & Ethnics
66Our Communities & Society Story
04Thaioil At a Glance
36Our Clean & Safe Operation Story
76Summary of Our Performance
14Message from CEO
50Our People Story
77Our Prizes
16The Story Begins...
58Our Customers & Suppliers Story
78GRI Content Index
Content
2 Thaioil 2011 Sustainability Report
AboutThis Report
This 2011 Sustainability Report is marked as the first annual public report of Thai Oil Public Company Limited (Thaioil) prepared in accordance with the Global Reporting Initiatives (GRI).
GRI Reporting Guidelines Version 3.0 (G3) and itsIndicatorProtocolshavebeenfollowedinthisreport.TheReportcoverstheperiodof1Januaryto31December2011. It is our policy to disclosebalance, comparable,accurate and timely information that is material to thesustainability of Thaioil from organizations within ourcontrol.Therefore,boundaryofenvironmentalandsafetyperformancedatain2011coversoperationsinThailandunder Thaioil, Thai ParaxyleneCompany Limited (TPX),Thai LubeBasePublicCompany Limited (TLB), ThaioilPower Company Limited (TP) and Independent Power(Thailand)CompanyLimited(IPT)wherewehavereliableandaudibleinformation.Performancedataofcontractorsand suppliers is clearly indicated where it presents.Human resourcemanagement information is limited to
only Thaioil as we are in the process to streamliningour human resourcespolicy across theGroup.We arecurrently seeking to expand the scope of performancedata disclosure to mirror the materiality of the wholevaluechainofThaioilspecificallyinareaswherewehavethecontrolandinfluence.Datathatchangeseveryyear,such as information on human resources, have beengivenasofthelastdayofthisfiscalyear(31December2011), while special cases have been marked withasterisks.Thaioil believes that this reportmeritsGRIG3LevelB.Wearedevelopingacomprehensiveprocesstogainindependentlyassuranceofthereport,ensuringthatmaterial issues are reported and quality of reportedinformationisreliable.Weexpectour2014Reporttobethefirstindependentlyassuredsustainabilityreport.
The First Story Of Thaioil’s Quest For Sustainability 3
The Principle ofMateriality from AA1000APS andGRI TechnicalProtocol: Applying the Report Content Principles is applied toThaioilandoursubsidiariesindefiningthecontentofthissustain-ability report as illustrated in the figure to the right. Materialitydetermination isanon-goingprocesswhich is reviewedannuallytoensurechangesandmaturityofissuesandconcerns.Thaioilisexpectingthisprocesstobecontinuousimprovedtoincludemoresourcesofinformationinthenearfuture.Thefigurebellowshowsmaterialissueswhichareaddressedinthisreport.
Prioritize
Identify Issues
Review
Internal
exte
rnal
Direct Short-Term Financial Impacts
Policy-related Performance
Business Peer-based Norms
Stakeholder Behavior & Concerns Societal Norms
Thaioil Sustainability steering committee
Forfurtherinformation,pleasecontactusatthefollowing:EnvironmentandGovernmentPromotionDepartment
ThaiOilPublicCompanyLimited555/1EnergyComplexBuildingA,11thFloor,VibhavadiRangsitRoad
Chatuchak,Chatuchak,Bangkok10900,ThailandTelephone+66(0)2299-0000,+66(0)22797-2999
Fax+66(0)[email protected]
URLhttp://www.thaioilgroup.com
4 Thaioil 2011 Sustainability Report
THAIOILAT A GLANCE
millionbarrelsof crude and other feedstocks
million bahtof products value provided for the society
95> 400,000
Return on equity18.5 %
The First Story Of Thaioil’s Quest For Sustainability 5
THAIOIL THROUGHOUT THE YEAR
January February May October November-December
Completed the unit expansion of Treated Distillated Aromatic Extract(TDAE) at TLB
Become the first in Thailand to produce a complete range offuels to meet EURO 4 standards
Co-founded PTT Energy Solutions with PTT, PTTGC and IRPC toprovide engineering consulting
Provided financial support and in-kind to help Thai society in the flooding crisis
Grand opening of the Community Medicine Center
Increased investment in ethanol business by purchasing 21.28% share of Ubon Bio-Ethanol Company
Vision
We strive to be a leading
fully integrated refining and
petrochemical company in Asia Pacific
Missions
1To be in top quartile on performance and return on investment
2To create
a High-Performance Organization that promotes teamwork, innovation and
trust for sustainability
3To emphasize
good Corporate Governance and commit to Corporate
Social Responsibility
8 Thaioil 2011 Sustainability Report
Thai Oil Public Company Limited
Headquarter 555/1EnergyComplexBuildingA,11thFloor,VibhavadiRangsitRoad,
Chatuchak,Chatuchak,Bangkok10900,Thailand
Registered Capital THB20,400,278,730
Number of employees 840(asof31December2011)
Business sector Weoperateacomprehensiverefinerythatusesadvanced
andefficientprocessingtechnologiestoproducepetroleumproducts
primarilyfordomesticdistribution.Ourauxiliaryinvestmentsincludeother
suchassociatedbusinessesas:petrochemical,lubebaseoil,ethanol,
solvent,powergeneration,marineandpipelinetransportation
ofcrudeoil,petroleumandpetrochemicalproductsincludingserviceprovider
forcrudeoil,professionalservices
ThecompanywaslistedontheStockExchangeofThailand
on9August2004andthefirstdaytradingwas26October2004.
WeareoneoftheassociatesofPTTintheclassofRefineryFlagshipCompany
withinPTTGroupwhichPTTowned49.10ofthecompany’sissues
(asof31December2011).
TheThaioilGroupofcompaniessharecommonvisionandmissionin
ourconcertedefforttodrivesustainabilityacrossthevaluechainandsociety.
Weadvocateacommonsetofvalueswhichareinlinewithourmission.
Corporate Value
The First Story Of Thaioil’s Quest For Sustainability 9
Excel lenceStriving
Teamwork and Collaboration
Ownership and Commitment
Professional ism
Social Responsibi l i ty
Integrity
Init iat ive
Vision Focus
10 Thaioil 2011 Sustainability Report
Financial Highlights Million Baht
Total revenues
448,773Operating cost
422,012
The First Story Of Thaioil’s Quest For Sustainability 11
EBITDA
28,760
Payment to providers of capital
Total assets
155,087Total equity
85,034
Net profit
14,853
Total liabilities
70,053
Finance costs
2,089Dividends
5,720
12 Thaioil 2011 Sustainability Report
TOP Group Business Structure
100%
Ubon Bio Ethanol (UBE)
PTT Energy Solutions(PTTES)
Thaioil Energy Services (TES)
TOP-NYK MarineOnePte Ltd. (TOP-NYK)
Mitr Phol 35%
Others 58%
PTT 40%PTTGC 20%
IRPC 20%
J-Power 19%
PTT 20%
Thaioil 24%
100% 100% 55% 100%
100%
20%
30%
100%
50%
21%
PTT Group 80%
NYK Bulk & Energy B.V.
50%
20%
50%
56%
100%
PTT 26%
Padaeng35%
BCP 21%
80.52% 100%
Thappline(THAP)
PTT ICTSolutions(PTT ICT)
Others 60%PTT 31%
Thome Sin. 33.33%Nathalin 33.33%
Marsun 45%
9%
33.33%
55% TOP MaritimeService (TMS)
Thome-Thailand
Thai Paraxylene(TPX)
Thai Lube Base(TLB)
Thaioil Power(TP)
SellsElectricity/SteamtoGroup
Thaioil Marine(TM)
Thaioil Ethanol(TET)
Thaioil Solvent Through
TOP Solvent (TS)
Sak Chaisidhi(SAKC)
Top SolventVietnam
Independent Power (Thailand)
(IPT)
Maesod Clean Energy (MCE)
Sapthip(SAP)
Capacity :275,000barrels/day
Platformate1.8milliontons/annum
AromaticsCapacity:Paraxylene489,000tons/annumMixed Xylene90,000tons/annumBenzene 177,000tons/annumToluene144,000tons/annum
Total 900,000 tons/annum
Lube Base OilCapacity:Base Oil 270,000tons/annumBitumen400,000tons/annumTDAE65,000tons/annum
Small Power Producer Program3-on-1CombinedCycleElectricity 118 MWSteam 168 tons/hour
First Independent Power Producer Program 2-on-1Gas-Fired,CombinedCycleElectricity 700 MW
SolventdistributioninThailand
Capacity:100,000 tons/annum
SolventdistributioninVietnam
Oil & Chemical Tankers Capacity:153,000 DWT
ProvideserviceofCrewandUtilityboats
Crude Tankers : VLCCCapacity:281,000 DWT
ShipManagementService
Multi-product Pipeline Capacity:26,000 million litres/year
Sugarcane Based Ethanol Capacity: 200,000 litres/day
Cassava Based Ethanol Capacity: 200,000 litres/day
Cassava Based Ethanol Capacity: 400,000 litres/day
Proceeds the business on various professional of management services
Provides engineering technique consulting services
Oil Refinery Petrochemical & Lube Base Power Generation Transportation & Others
Core Business Value Enhancement Earning Stability Marketing / IT Support
Thaioil(TOP)
Thaioil Marine International
Pte Ltd. (TOMI)
The First Story Of Thaioil’s Quest For Sustainability 13
Oil RefineryCore business
TheOilRefineryBusinesshasacapacityofapproximately275,000bbl per day to refine crudeoil andother feedstocks.Thisaccountsforapproximately25%ofthenation’soverall refining capacity and is capable of meeting thedomestic demand for petroleum which stands at anaverageof35%.Asoneoftheregionalleadingcomplexrefineries, our strength is in flexibility to use varietiesofcrude oil from various sources, efficiency of crudeoptimizationandenergyuseandoperationalreliability.
Petrochemical & Lube baseValue enhancement
The Business comprises products such as aromatics,lubebaseoilandsolventswhichincreasethevalueofourrefineryvaluechain.Petrochemicalandlubebaseplantsare directly connected to the refinery and the powerplant. The petrochemical complex has a total annualproductionof900,000 tonsofupstreamaromaticsand735,000tonsoflubebaseoil,bitumenandTDAE.Thaioilengages in the solvent business through a holdingcompany that invests in solvent manufacturing plantsand trading business that have a combined annualproductionof100,000tons.
Power GenerationEarning & stability
Power generation business comprises Thaioil PowerCo.,Ltd.(TP)andIndependentPower(Thailand)Co.,Ltd.(IPT).IPTisanaturalgas-firedcombined-cyclewhileTPoperatesnaturalgasco-generationpowerplant.IPTandTPhavecombinedcapacitytoproduce700and118MWhrespectively.ElectricityfromTPismainlyforinternalusetoprovidestabilityofoperationswhileelectricityfromIPTisprovidedtothenationalgrid.Asidefromelectricity,TPisabletoprovide168tonsofsteamperhourforoperationsinthesamearea.
Transportation & OtherMarketing support and efficiency improvement
ThaioilMarineCompanyLimited(TM)is100%ownedbyThaioilwhichthemarinefleetincludes1verylargecrudecarrier (VLCC) with 281,000 dead weight tons and 6petroleum and petrochemical tankers with an overallcapacityof153,000deadweighttons.Ethanolbusinessis conducted through a holding company to invest inethanol manufacturing plants that has the combinedcapacityof800,000litersperday.ThaioilalsohasThaioilEnergy Services to manage human resources for theThaioilGroup,hold20%share inPTTEnergySolutionsand PTT ICT Solutions along with other companies inPTT Group and 9% share in Thai Petroleum PipelineCo.,Ltd.
14 Thaioil 2011 Sustainability Report
I am pleased to present our first Sustainability ReportthathasbeenpreparedinconformancewiththeGlobalReporting Initiatives (GRI). The intent is not only toillustrateourpastachievementsbutalsotomakepublicourcommitmenttocreatevalueforourstakeholdersandcontributetothesustainabledevelopmentofthesocietyinwhichweoperate.
ForThaioil,sustainabledevelopmentmeansourabilitytosustainlongtermvaluecreationthroughbothhorizontalgrowth via a synergized refining network, deeperinvestmentinaromatics,lubebaseoilandsolvents,andverticalgrowthbyexploringnewbusinessopportunitiesinspecialtyproductsandethanol.
Atpresent,manynewrefineries inAsia-Pacificpossessthe strength for large-scale productivity, whereas ourrefinery outplays most of them in terms of operationalflexibility and reliability. Maximizing efficiency of naturalresources and energy use is crucial to help keep ourbusinesscompetitiveinthemarket.Wehavealsonotedan increaseddemand fromour stakeholders for highertransparencywithregardstoourcompany’senvironmentalandsocialperformance.LowcarboninitiativesintroducedandpromotedbyvariousinternationalcommunitiesandgovernmentshasconfirmedouraspirationtobecomeanEnergyConvertingCompany.
Assuch,ThaioildevelopedtheSustainableDevelopmentRoadmap(SDRoadmap)in2011toenableustoachieveourvisionofleadingafullyintegratedrefiningandpetro-chemicalcompany inAsia-Pacificalongwithsustaininglong-termvaluecreationtoourstakeholders.
Businesswise, our overall performance exceeded ourexpectationsaswesawincreasedsalerevenuesandnetprofitabilityby40%and66%in2011respectively.Thekeytothisachievementwasbasedonourabilitytorespondrapidly and effectively to challenges while staying oncourse by focusing on the flexibility of our feedstock,efficientuseofourresourcesanenergyusageandreliabilityofouroperations.
Inadditiontoourexceptionalbusinessperformance,wetook steps to strengthen our efforts in social andenvironmentaldimensions,whichwebelievehasyieldedoutstanding outcomes. For example, our safety perfor-mance has been above the industry standard and werecorded zero fatalities of employees or contractors.Therewasalsonomajorenvironmentalincident,includingspills and non-compliance reported.We investedmorethan 70 million baht in the Community Health andEducationCenterinSrirachatohelpbettertheeducationandhealthofourneighbors.Wehaddonepublicconsul-tationsfor1environmentalimpactassessmentprojectin2011whichweexpecttheassessmenttobecompletedwithin this year. Inaddition,wehavedeveloped the fullscalehealthimpactassessmentforourmajoroperationsin Sriracha. We also took an active role in supportingflood relief and recovery efforts by donating diesel fuelfor the Thai navy for use in rescue and reliefmissions;providingboats forfloodvictimsthroughtheMinistryofEnergy; handing out relief supplies bags; and workingwithPTTGrouptomanageafloodreliefcenteratAdisornMilitaryCampduring thecrisis.Ouroverall contributionwasestimatedtobemorethan35millionbaht.
IhaveaverypositiveoutlookregardingtheprospectsoftheThaioilGroupaswemovetowardsbeinganEnergyConverter and provide value added projects that suitthedemandofthefuture.However,werecognizethatachange is needed for us to follow through with ouraspiration to go for the regional business area viaexpansion and integration to focus on producing highvaluedproducts.Toenablethischange,wehaveplaceda priority on talent attraction and retention to ensurethereadinessofouremployeesforthechallengingroadahead.Onthebusinesspracticeside,ourcommitmenttodevelopourbusinessprocessinlinewiththeThailandQuality Award is expected to strengthen our internalmanagement,while innovationmanagementwill be thekeyenablerofourfuture.
Message from CEO
The First Story Of Thaioil’s Quest For Sustainability 15
Ourprioritiesspanningthenextthreeyearswouldbeinthe areas of innovating resource efficiency and low-polluting solutions, responsibly and transparentlyconducting our business, and continuously identifyingand developing opportunities to create value to ourstakeholders.
Iwouldliketothankallofourstakeholdersfortheircon-tinuedsupport,aswellasourThaioilGroupemployeesfortheirvaluablecontributions.WewillcontinuetodriveoursustainabilityagendaforwardsothatwegetclosertothepositionoftheEnergyConvertingCompanythatweaspiretobe.
Mr. Surong Bulakul
ChiefExecutiveOfficerThaiOilPublicCompanyLimited
THE STORY BEGINS...
16 Thaioil 2011 Sustainability Report
The First Story Of Thaioil’s Quest For Sustainability 17
1st
stepofchangetowardmoresustainablefuture
>50 years
ofrefiningenergyforThailandandAsia
>50 years
thatwewillstepintothefuturetoconvertenergyforhumanity
Highlights from 2011
What We
DID IN 2011?
Developed our First Sustainable Development Roadmap
Integrated Sustainable Development Roadmap into Thaioil Business Plan
What We
PLAN TODOIN 2012?
: Develop and Roll-out Sustainable Development Action Plan
: Develop and Roll-out SD Communication Program
18 Thaioil 2011 Sustainability Report
The Energy Converterfor the Future of Sustainable World In1960,asmallprivatelyownrefineryhasbeenestablishedundertheregistervalueofonly10millionbahttorefinethefirst dropof fuel for Thai society andeconomy.Since thatday,wehavegone throughmanychallenges, suchasoilpricecrisisoreconomicdownturnbutweareabletosurvivethroughthetestoftimeandundisputedlysucceededinbeingoneoftheleadingcompaniesinThailand.
Weareproudofourdecoratedhistorybutwenowneedtocarryonourjourneyintothechangingworldofshiftingglobaleconomicpower,globalwarming,environmentaldegradation,natural resourcedegradation,overpopulatingandincreasingtrendofnaturaldisaster.Inaddition,thevoicesofstakeholdershaveneverbeenlouderthatgeneratespressureintopoliticalandmarketingarenatohavestringentrequirementsandmoreinfluenceoneverybusiness.
We, Thaioil and our affiliates as the Group, regards challenges as opportunity and are able to foresee what oursuccesswilllooklikeinthenext50years.Wewillnotstoponlyatbeinganationalchampion,wewillnotlongerbeonlyoperations focusedandhardwareorientedcompanyandwewillnotprovideonlycommodityproducts in thenext50years.Inthenext50years,wewillbearegionalchampion,wewillbeinnovationfocusedandsoftwareorientedcompany, and we will provide specialty products to position ourselves as the “Energy Converting Company”.Ouraspirationtoprovideaddedvalueforanykindofenergytheworldwoulduseinthenext50years.Thisaspirationwill support theworld to overcoming environmental challenges and contribute to the sustainable development ofthenatureandhumanity.
As a first step,we continuously develop ourwork system to promote business excellence, and form a concretefoundation for changes tocome. In2011,wemark the first step inourGrowthStrategy towardbeinganenergyconverter.Webuildeverythingonourstrengthsonflexibilityofrawmaterialuse,efficiencyofresourceandenergyuseandreliabilityofouroperation.Meanwhile,wehavebeendevelopingaSustainableDevelopmentRoadmaptoguideusthroughbalancingprosperity,peopleandplanet.
The First Story Of Thaioil’s Quest For Sustainability 19
Our Business PrinciplesFrom Thaioil’s missions
tobe inthetopquartileonperformanceandreturnon investment; tocreateahigh-performanceorganizationthatpromotes teamwork, innovationandpassion forsustainability;withemphasisongoodCorporateGovernanceandcommitment to Corporate Social Responsibility, we have defined our business principles into High PerformanceOrganization(HPO),CorporateGovernance(CG)andCorporateSocialResponsibility(CSR).
Webelievethecontributionof thethreeprincipleswill takeThaioil to the levelofcorporatesustainabilitywherewecouldprovidevalueaddedproductsforthefuture.
WedeploytheseprinciplesthroughmultiplechannelsofwhichoneofthemisourCorporateValue,
POSITIVE that stands forProfessionalism,Ownership andcommitment,Social responsibility, Integrity,Teamworkandcollaboration,Initiative,VisionfocusandExcellencestriving.
Embedding SD Principles into POSITIVE Culture
Meeting Stakeholder Expectations
Integrated Management
Process
Sustained Sustainability
Position
20 Thaioil 2011 Sustainability Report
Sustainable Developmentat Thaioil AtThaioil,“SustainableDevelopment”reflectsourabilitytosustain longtermvaluecreationthroughoursynergizedrefining network, deeper investment in aromatics, lubebase oil and solvents, and new business opportunitiesinbio-ethanol.Theabovevaluewillberealizedbyadoptinginnovative and sustainable approaches in managingenvironmentalandsocialaspectsfromouractivitiesandproducts.
Therefore,wedevelopourownSustainableDevelopment(SD)modeltoachieveandsustainapositionininterna-tionally recognizedsustainability indexes throughstake-holderengagementprocess,integratedSDmanagementprocessandembeddingSDprinciplesintoourculture.
SD issuesmaterial to our sustainable development areidentified and prioritized through gap assessment andbenchmarkingtocomposetheThaioilGroupSustainableDevelopment Roadmap consisting of initiatives in thedimensionofeconomic,environment,societyandgover-nance.OurStrategicThinkingSession,aplatformwhereallourseniorleadersbrainstormtoconsolidateandmakedecision for long-term, medium-term and short-termstrategic plan of Thaioil, will from now on include ourSustainable Development Roadmap in its agenda. WeexpecttobeabletocommunicatethedetailandprocessagainsttheRoadmapinournextSustainabilityReport.
Stakeholder Engagement at ThaioilEngagementofstakeholdersisthecentralpieceofbusinessprocessatThaioil.WeidentifygroupsofstakeholdersbasedonrelevancetoThaioil’sactivities,productsandservices.Thelistofstakeholdergroupsinclude:shareholders,customers, businesspartners, creditors, financial institutions, employees, local communities, society, and relevantpublicagencies.Weadoptde-centralizedapproach in stakeholder identificationandmanagementaseachThaioildepartment is responsible to identify andmanage the nine groups of stakeholders as shown in the table below.TheoverallpictureofThaioilstakeholderengagementprocess,theengagementapproach,keytopics,andconcernsandapproachtoaddressconcernsareasfollows:
The First Story Of Thaioil’s Quest For Sustainability 21
Stakeholder Group
Shareholders/CapitalProviders/Investors
Key EngagementApproach
Annualgeneralmeeting
Quarterlyperformanceupdate
Analystmeeting
Roadshow
Annualreport
WeareatthestageofourstandardizingourstakeholderengagementprocessacrosstheThaioilGrouptoensureeachfunctionissystematicallyidentified,prioritizedandmanaged,uptoourstakeholder’sexpectations.Thestandardizedprocessisexpectedtobedevelopedandrolledoutintheverynearfuture.
Key Topics & Concerns
Financialperformance
Corporategovernance
Longterminvestment
Result/Approach to Address Concerns
Financialhighlightsoutlinedinthisreportconfirmsourexcellentfinancialperformance
BoardofDirectorsareindependentlyassessedbytheInstituteofThaiDirectorsin2011
Aspirationtobethe“EnergyConvertingCompany”ofthefutureandselectingDowJonesSustainabilityIndexes(DJSI)asabenchmarkingtoolinassessingsustainabilityperformanceagainstleadingoilandgascompanies
Employees
Regulators
Communities
Customers
Suppliers/Contractors
JointAdvisoryCommittee
Monthlynewsletter
Annualengagementandsatisfactionsurvey
Participatingingovernmentinitiatives
Governmentreport
Regularcommunityengagementprogram
Monthlycommunityleadersmeeting
Regularcommunication
Monthlyvisit
Annualsatisfactionsurvey
Regularcommunicationemail/phonecall
Careerdevelopment
Employeewelfare
Regulatorycompliance
Localenvironmental,healthandsafetyimpacts
Coexistingbetweencommunitiesandplantsandgoodqualityoflife
Qualityandtimelinessofproducts/services
Clearcommunication
Followingagreement
Integratedcareermanagementsystemtoidentifyperformancegap,developindividualperformancedevelopmentplan,conductannualperformanceappraisalalongwithcoaching,mentoringandknowledgemanagementsystemtodevelopouremployees
CompensationandwelfareforallemployeesbeyondregulatoryandrespectingtherightsofallemployeesaccordingtoUniversalPrinciplesofHumanRights
InternalcontrolandinternalaudittoensurecomplianceatthecorporatelevelforSETandSECrulesalongwithIntegratedManagementSystematsiteleveltoensurecompliancewithquality,safetyandenvironmentalregulations
EnvironmentalimpactassessmentthatincludingsocialandhealthaspectaccordingtoThairegulations
Communitydevelopmentandsocialinvestmentprogramsforadjacentcommunitiesandlargersociety
Voiceofcustomersandcustomerrelationshipmanagementprocessesareinplacetocontinuallyimproveourprocessandensuresatisfactionofcustomers
ApprovedvendorlisttobeamechanismtopromoteourCSRvaluesontooursuppliersandcontractors.WeendeavortoimprovetheirCSRperfomanceinlinewithourmission.
22 Thaioil 2011 Sustainability Report
Management ProcessThaioilhascommitted tocontinuallyassessanddevelopThaioilbusinessexcellence framework for thepast threeyears in accordance with Thailand Quality Award (TQA) criteria that is based on the Malcolm Baldrige NationalQualityAwardfocusingonareassuchasLeadership;StrategicPlanning;CustomerFocus;Measurement,AnalysisandKnowledgeManagement;WorkforceFocus;OperationsFocus;andResults.Webelieve thisworksystemwilldrivematurity of Thaioil operation toward integrated approaches that the processes are repeatable and regularlyevaluatedforimprovementopportunityinsynergywithotherfunctions.Inaddition,analysis,innovationandlearningorganizationwouldbetterourefficiencyandprovideuswithbetterresultsinallareasoffocus.Intermofsustainabledevelopment,wesee ISO26000asaguide inproactivelymanagingourSDriskandopportunitywhile theGlobalReportingInitiatives(GRI)isconsideredasaguidelineforSDdisclosure.
SD Communication ProgramSD Communication Program is our program to imprint sustainable development into themindset and culture ofindividualsacrossThaioilGroup.Weplan todevelopandroll-outcommunicationprogramtoallstakeholders fromthe Board room to control rooms, suppliers’ plants and our customers in order to allow them to appreciate thevalueofoursustainabledevelopment.Ultimately,ThaioilhasambitiontointegratesustainabledevelopmentintoourPOSITIVEculturethroughadvocating,communicating,andaligningthemintoourleadershipexpectations.
The First Story Of Thaioil’s Quest For Sustainability 23
24 Thaioil 2011 Sustainability Report
OUR GOOD CORPORATEGOVERNANCE & ETHICS
The First Story Of Thaioil’s Quest For Sustainability 25
~ 90%ofemployees&managementparticipatedinCGE-learningmodule
Highlights from 2011
> 90%Assessmentandrated“Excellence”forTopCorporateGovernanceReportforListedCompanies2011conductedbytheThaiInstituteofDirectors(IOD)
Full100scoreonqualityofAnnualGeneralMeetingofShareholders(AGMChecklist)AssessmentbytheSECandThaiInvestorsAssociation(TIA)
26 Thaioil 2011 Sustainability Report
What We
DID IN 2011?
What We
PLAN TODOIN 2012?
: Expand the Scope of CG E-Learning
to Cover Subsidiaries
: Apply for United Nations Global Compact
Review and Develop CG E-Learning into the Second Revision
Organize a Competition of Initiative to Improve CG from Employees
27The First Story Of Thaioil’s Quest For Sustainability
REACT is the Foundation in Conducting BusinessesAtThaioil,efficiency,reliabilityandintegritydonotrestonlypipelines andmachineries, but beyond. The samewaywedesignproductionlinetoensurequalityandtimelinessofourproducts,wedesignourcorporategovernancetoensure the quality and timeliness of our organizationaloperations and individual conduct. Therefore, Thaioilbelieves indelivering thehighest standardof corporategovernance and individual conducts, to be communi-cated to theshareholdersandsociety, therebybuilding“Trust”,similartohowourhighqualityproductgenerate“Loyalty”amongourcustomers.
CorporateGovernance(CG)alongwithHighPerformanceOrganization (HPO)andCorporateSocialResponsibility(CSR)areourcoresustainabilityprinciples.Ourorganiza-tionalgovernancemechanismisdesignedbasedonthephilosophythatthecorporategovernanceiswhatwedoasacompanywhilecodeofconductiswhatweexpectall individual representing the face of Thaioil to follow
undertheprinciplesofResponsibility,EquitableTreatment,Accountability,CreationofLongTermValueandTrans-parency(REACT).
Therefore,ThaioiladoptstheStockExchangeofThailand(SET)’sVoluntaryPrinciplesonCorporateGovernanceforListedCompaniesinThailand,since2006alongwiththeCompany’sArticlesofAssociationasthebuildingblockforourCGManual.
28 Thaioil 2011 Sustainability Report
Board of Directors
AtThaioil,theBoardofDirectorsisthehighestgoverningbodytoprovideentrepreneurialleadershiptotheManagementTeam within a framework of prudent and effective controls, which enables risk to be assessed and managed.Asleadershipisarguablythemostimportantfactorforacompanytoreachthedesirablegoal,effectivenessofthecompanyhighestleadershipisscrutinizedbyshareholderstoensuretheirinterestsaremet.Thaioil,therefore,ensuretheeffectivenessoftheBoardthroughdiversity,clearexpectationforeachDirectorandcompanysecretary,adequateinformationtosupportdecisionmaking,periodicevaluationoftheBoardperformance,remuneration,communicationandsuccessionplanning.
Accordingtotheprincipleofcheckandbalance,thecurrentpositionofChairmanoftheBoardandChiefExecutiveOfficer(CEO)isseparated.TherearecommitteesundertheBoardwhoareresponsibleforspecificissues,suchasthe Audit Committee, the Nomination and Remuneration Committee, the Risk Management Committee and theCorporate Governance Committee. In addition, specific number of independent directors for each committee isrequired to ensure transparency. TheAuditCommittee,Nomination andRemunerationCommittee andCorporateGovernanceCommittee require independentdirectors tomakeupamajority.Definitionof independentdirector isprovidedintheManual.
DiversityoftheBoardplaysanimportantroleinidentifyingandunderstandingrisksindifferentanglesandensuringthataBoardisnotcomprisedsolelyoflikemindedindividuals.Thaioil’scorporategovernancepolicyrequirestheBoardtocompriseofDirectorswithdiversebackground,inareassuchasindustrial,business,finance,management,internationalmarketing,strategy,crisispreparationandresponse,legalandcorporategovernance.TheNominationandRemunerationCommitteeisresponsibleforselectingthequalifiedpersonaccordingtotheseaforementionedcriteria.ThecurrentBoardconsistsofnineindependentdirectors,threenon-executivedirectorsandoneexecutivedirector.
In2011,theBoardmetninetimesandtwoindependentdirectormeetingswereheldtoopenlydiscussmattersrelatedtoimprovingtheCompany’sCorporateGovernance.ThaioilsucceededinachievingtheExcellentLevelfromtheCGRatingcampaignconductedbytheThaiInstituteofDirectors(IOD)inconjunctionwiththeStockExchangeofThailand(SET)andtheSecuritiesandExchangeCommission(SEC).
Diversity of the Board
How We Operate
The First Story Of Thaioil’s Quest For Sustainability 29
Remuneration of Directors
Remuneration is linkedtothedirector’sperformanceandresponsibilityaswellasthecompany’sperformanceandbenefitstotheshareholders.PerformanceoftheDirectorisassessedinthreesteps:selfassessment,boardassessmentandpeerassessmentonBoardpolicy,Boardcomposition,BoardmeetingandBoardpractices.TheoverallBoardassessmentin2011isinthelevelofexcellenceforthescoreof95%.TheNominationandRemunerationCommitteeisresponsibleforidentifyingremunerationprinciplesandmethods,inwhichmustbepresentedattheAnnualGeneralMeetingofShareholders(AGM)forapproval.
FortheCEO,theperformanceassessmentisconductedbyNominationandRemunerationCommitteeforthecategoriesofachievementofCorporateKeyPerformanceIndicators(CorporateKPI), leadershipcompetencyandefficiencyofbudgetandprojectmanagement.TheconceptofBalanceScorecard (BSC) isadoptedwherethe indicatorscovereconomic,socialandenvironmentaspects.TheseresultsmustbepresentedtotheBoardforapproval.
TheBoardoftheYearAward2008/2009 TopCorporateGovernanceReportAward2010
TheBoardoftheYearAward2010/2011(continous)
Externally-Facilitated Board Evaluations
Thaioilhasbeeninvolvedinthebi-annualprogramoftheThaiInstituteofDirectors(IOD)calledtheBoardoftheYearAwardwhichevaluatestheBoardintheareasofpolicy,performance,structure,guidance,meetingsandcomposition.TheevaluationisconductedbasedoninterviewswiththeDirectorsoftheBoard,responsetotheirquestionnaire,andreviewofsupportingdocuments.ThaioilconsidersthisasanopportunitytosubjecttheBoardtoanindependentexternalreviewforeffectiveness.ThaioilwasawardedtheBoardoftheYearAwardin2008/2009andtheTopCorporateGovernanceReportAwardin2010.Inaddition,ThaioilwasawardedtheBoardoftheYearAwardin2010/2011inthe catagory of Board with Consistent Best Practices, Board of the Year for Distinctive Practices and Audit CommitteeoftheYear.Thisdemonstratesourconsistencyincorporategovernancemechanism.
Risk Management Coordinators ofeach function
Risk Management Section
Risk Management Committee Marketing
Risk Management Committee Refinery
Risk Management Committee Strategy
Risk Management Committee Finance
Risk Management Committee Corporate
Risk Management Committee Affiliates
Risk Management Steering Committee
Risk Management Committee
ThaioilBoard of Directors
30 Thaioil 2011 Sustainability Report
Organizations to Drive Sustainable Development
Corporate Governance Committee holds the highestresponsibilityforsustainabilitymanagementinThaioilGroup,while theSustainability SteeringCommittee is accountablefor the direction of the Company. The Corporate AffairsAssistantManagingDirectorchairstheSustainabilitySteeringCommittee which is composed of relevant departmentmanagers,whiletheStrategicPlanningManageractsastheCommittee’ssecretary.Toensurethesustainabilityendeavoursin line with the direction is effectively deployed, the SDTaskforce is established, chairedby theStrategicPlanningManager and composed of section heads of the relevantfunction.
Risk Management
RiskmanagementisoneoftheinternalcontrolmechanismsofThaioilunderthecorporategovernancesystem.ThehighestbodytooverseeriskmanagementoftheThaioilGroupistheRiskManagementCommittee.TheinternalRiskManagementSteering Committee reports to the Risk ManagementCommittee and compose of high-level management,responsible to drive the risk management effort of ThaioilGroup to achieve greater efficiency in all activities and tosupporttheembedmentofriskmanagementintodailyworkand corporate culture. The Steering Committee is alsoresponsibleforprovidingrecommendation,monitorprogress,and endorse the risk and control measures. Multiple riskmanagementcommitteesexistforeachbusinessareasuchas marketing, refinery, strategic planning and businessdevelopment,finance,corporateaffairsandaffiliates.
AtThaioil,eachdevelopmenthastoassessriskoftheirownscopeofwork.Iftheriskisidentifiedtoexceedtheabilityofthe function to control ormanage it, the identified riskwillbe forwarded to theRiskManagementCommitteeofeachrespectivebusinessareaandconsideredascorporaterisk.ManagementInformationSystemwithuserfriendlyinterfaceisusedforfacilitatingtheriskmanagementprocessesforallfunctionsbeforesendingtheresulttotheRiskManagementSection.
Inordertostreamlinetheriskmanagementprocess,ThaioilGrouphasdevelopedtheEnterpriseRiskManagementManual which outlines the process for a multi-dimensional risk management process. Ernst & Young CorporateServicesLimitedwasengagedtoconductanindependentassessmentonthequalityoftheriskmanagementprocessandmanual.Wescored88%intheindependentassessmentin2010.
The First Story Of Thaioil’s Quest For Sustainability 31
Environmental and social risks are also included in the risk management process and the Risk ManagementCommitteefromeachbusinessareacouldraisetheenvironmentalandsocialrisksuptotheRiskManagementSteeringCommittee.Forexample,uncertaintyofgovernmentregulationwasraisedthroughtheCorporateRiskManagementCommitteeandincludedinThaioilRiskMatrix.
The Test of The Flood Crisis
In2011,thefloodingcrisisimpactedThailandformorethanthreemonthsandresultedinbusinessdiscontinuityofmanyfactoriesandcompanies.AlthoughThaioilGroup’smajoroperationsarenotlocatedinthefloodareas,indirectimpactfromthefloodwasstillfeltastransportationrouteandotherpetroleumterminalswere impactedby theflood.Wetakepride in the fact that although our headquarter in Bangkok wasimpactedbytheflood,ouroperationsmanagedtocontinuedasusual.
Somemaycallitluck,butwebelieveinpreparationandresponse.Wehad begun monitoring the flood situation since the flood hit thenorthernpartofThailandandmorecloselywhenitreachedtheCentralpartofThailandinAugust.Duringthetime,weanalyzedandpreparedmeasurestopreventsupplyshortageandimpactproductsdistribution.Due to the closure of several petroleum terminals, we distributedproductsforadditional2-3millionlitersperdayviaourlorryloading.Thisensuredourcustomersthat,whentheyneeditthemost,theproductswere continuously supplied.We also established a temporary officeatSrirachaareawhenourheadquarterwashitbythefloodandallowedemployeestoworkathome.WeconsiderthiscrisisasatestofourCompany’s preparedness and response plan, and we believe wesuccessfully passed the test as no business discontinuity occurred.Wewillcontinuetoreviewandupdateourcrisismanagementplantoensureourreadinesstofacethefutureworldofmoreuncertainties.
Surpassing The Flood Crisis with Thaioil Group
32 Thaioil 2011 Sustainability Report
ThaioilGroupexpectsnothinglessthanthehighestethicalstandardfromeverypersoninconductingourbusiness.Thisboldstatement iswhywestrivetobeagoodcorporatecitizenship ineverywhereweoperate.Therefore,ourcodeofconduct has been developed as one of the internal control for our corporate governance system. All individualsincludingtheDirectors,Executives,ManagementandThaioilGroupemployeesareexpectedtoabidetothecode.
Multiplepractices including thePrinciplesofGoodCorporateGovernance forListedCompaniesdevelopedby theStockExchangeofThailandin2006areusedtoimplementincodeofconductforThaioilGroup.Thecodeofconductisseparated intocodeofconduct forstaff,codeofconduct to thestakeholdersandothercodesofconducts forspecific topic, including laws and human rights; cultures, customs, and political neutrality; conflicts of interest,connectedtransactions,confidentialandinsideinformation;givingoracceptanceofpresents;marketingcommuni-cation; intellectualproperties, informationandcommunication technologyandother importantpolicies. Inaddition,disciplinaryapproachincaseofanybreachofthecodeofconductincludinganti-corruptionandbriberypolicyandguidancefordeterminationofactionarealsoprovidedintheManual.
How We Do Business
In2010,ThailandmarkeditsmoveagainstcorruptioninforminganopinionsurveyofprivatesectorleadersonAnti-CorruptionCollectiveActiondevelopedbytheThaiInstituteofDirector,jointlyconductedwiththeThaiChamberofCommerce,theJointForeignChambersofCommerceinThailand,theThaiListedCompaniesAssociation,andtheThai Bankers Association. The coalition seeks to involve all public and private sector partners, the oversight agencies,andallpartsoftheThaisociety.Believingthatcorruptioninallformsisahandicapforourbusinessgrowthtowardsustainability,wetookpartinthe“CollectiveActionCoalitionAgainstCorruptionforPrivateSectors”inthatsameyear.Weconsidercorruptionandbriberyasimminentrisksofallbusinessesandweincludedanti-corruptionand bribery policies into ourCGManual andCode ofConductHandbook. These policies include no political contributionofanykind,conflictedinterests,connectedtransactions,givingandreceivinggifts,etc.
Infightingagainstcorruption,westrictlycomplywithlegalrequirementsontheenvironmentsafety,labor,taxandaccounting,aswell asgovernmentannouncements.Employeesatevery levelmuststudyandunderstand the applicablelawstotheirworkandneverviolatesuchlaws.Weinstillcompliancetolaws,rules,andregulationsinemployeesateverylevel.
Fight Against Corruption
The First Story Of Thaioil’s Quest For Sustainability 33
Tocommunicatethecodeofconduct,wedistributedCGmanualsandcodeofconducthandbookstoThaioilGroup’semployees.Everypersonhastosigntheacknowledgeformandsend itbacktoCorporateManagementOfficetokeeprecord.
WealsodevelopedCGE-learning,anonlinetrainingprogramwithcontentsencompassingkeyelementsofthecodeofbusinessethicstoensureproperguidelinesforemployees.TheprogramconsistsoftheessencesoftheCGmanualandthecodeofconducthandbookfeaturingprinciplesforcorporategovernanceandcodeofethics,casestudies,andtestforms.EmployeesareencouragedtolearnedCGE-learningtochecktheirlevelofunderstandings.Todate,therearemorethan90%oftheemployeeshaveundergonethistraining.In2012,wewillexpandCGE-learningtooursubsidiaries.
In2011,weissuedahandbookonthestandardandguidelinesforsocialresponsibilityofindustrialoperatorsinThaioilGroup’ssupplychain.Wealsostagedaworkshopwithcontractorsandsuppliers.Toencourageothercontractorsandsuppliers,weawarded tencontractorsandsupplierswith thebeststandandwith the “CSR inSupplyChain”certification letters. To coincide with Thaioil’s 50th anniversary of business, we have initiated a project for theconstructionofEmergencyBuildingatAoUdomHospitaltosupportandimprovecommunitiesaroundtherefinery.
Forenvironmental,healthandsafetydimension,wehavedefinedaquality,health, safety,andenvironmentpolicy,a social responsible policy, and complywith all laws, standards, and other regulations relating to this dimension.Indealingwithquality,occupationhealth,safety,andtheenvironment,wehaveincludedanintegratedmanagementsystem(ISO9001/ISO14001/TIS18001/BSOHSAS18001)andlaboratorycapabilitymanagementsystem(ISO/IEC17025)inourworkprocesses.Thisyear,wesuccessfullyunderwentanauditbyManagementSystemCertificationInstitute(Thailand) forour integratedmanagementsystemsandanotherbyThai IndustrialStandardsInstituteof itslaboratorycapabilitymanagementsystem.Bothauditsshowednodefectsleadingtonon-conformity.
34 Thaioil 2011 Sustainability Report
Internal audit andwhistle-blowingmechanismare thecoreprocessesof verifyingour internal controlmechanism.Wehavean internal audit function to conduct internal audit basedon the riskof eachbusiness. Theaudit areasincludeinternalcontrol,regulatorycompliance,andfinancialreport.InternalauditplanhastobeapprovedbytheAuditCommittee.Theaudit resultswillbe reported to theCommitteeat leastquarterly.Theapprovedfindingsare thencommunicatedbacktothewhistle-blowerfortracking,andconsequentlyleadtogapclosureprocesses.Wealsovisitour suppliers and contractors to help them implement our supplier and contractor standards aspart of ourCSRsupplychainprogram.
We provide whistle-blowing mechanism including the whistle blowing measures and whistle-blower protectionmechanismstoensurefairtreatmentforallstakeholdersundertheCGprinciples,thecompanysetupchannelsforcomplaints,suggestions,orrecommendationsindicatingimpactsorrisksofimpactsonstakeholdersarisingfromitsbusinessoranywrongfulactionorviolationagainstthecodeofconduct,aswellas implyingcorruptionandunfairtreatment,whileassuringconfidentialityofthewhistle-blower.Thesechannelscanbeseeninthecompany’sannualreport,CGmanual,codeofconducthandbook,aswellaswebsite(www.thaioilgroup.com).In2011,thereisnoreportonsuchviolationsinbreachingourcodeofconduct.Inaddition,thereisalsonoreportofbreachagainstregulationsconcerningenvironment;anti-competitivebehavior,anti-trust,andmonopolypractices;healthandsafetyimpactsofproductsandservices;disclosureofinformation;marketingcommunications;andprovisionanduseofproductsandservices.
AsourmissiontostrivetowardintheleadingrefiningandpetrochemicalbusinessinAsiaPacificRegion,weaimtoprovideethical-balancebetweeneachgroupofstakeholdersandrelatedorganizationsalike.WeplantoendorsetheUNGCin2012andreviewourCorporateGovernanceManualby2013toensurethatourcorporategovernanceisup-to-dateandreadytosupportourwayofconductingbusinessintheinternationalarena.
How We Ensure
United Nations Global Compact (UNGC)
TheUnitedNationsGlobalCompactisastrategicpolicyinitiativeforbusinessesthatarecommittedtoaligningtheiroperationsandstrategieswithtenuniversallyacceptedprinciplesintheareasofhumanrights,labor,environmentandanti-corruption.Sinceitsofficiallaunchin2000,theinitiativehasgrowntomorethan8,000participants,includingover6,000businessesin135countriesaroundtheworld.AsoneoftheUNGCcommitmentisthecompanytohaveCommunicationonProgress(CoP)onthecommitmentsinthetenprinciple,our2012SustainabilityReportisexpectedtobethefirstCoPtocommunicateourcommitmentandprogressinaddressingthetenprinciplesbyThaioil.
The First Story Of Thaioil’s Quest For Sustainability 35
36 Thaioil 2011 Sustainability Report
OUR CLEAN & SAFE OPERATION STORY
The First Story Of Thaioil’s Quest For Sustainability 37
24 million
litersreductionoffuelusefromenergyefficiencyandlossprevention
HIGHLIGHTS FROM 2011
60,000tons
reductionofcarbondioxidefromreductionoffueluseandhydrocarbonloss
13.16million
man-hourswithoutLostTimeInjury(LTI)forbothemployeeandcontractor
Mapped our 5-Year Environmental Master Plan
Developed 5-Year OHS and Fire Roadmap
Conducted Soil and Groundwater Quality Analysis at All Major Operations
Structured Framework for GHG Inventory
Integrated and Standardized the Management of Occupational Health, Safety, Fire Protection and Emergency Response into the Single OHS and Fire Process in Sriracha
Conducted Random Internal Assessment of Safety Leadership Level
: Initiate Action Plan According to 5-Year Environmental Master Plan
: Progress to the 2nd Phase of Soil and Groundwater Quality Project
: Improve the Wastewater Treatment System to Increase Recycling Water
: Conduct Feasibility Studies for Carbon Reduction
: Develop a Business Continuity Plan that Leverages on the Emergency in Sriracha
: Roll-out Action Plan According to 5-Year OHS Roadmap
: Conduct Group-wide Internal Assessment of Safety Leadership Level
38 Thaioil 2011 Sustainability Report
What We
PLAN TODOIN 2012?
What We
DID IN 2011?
As the nature of refinery and petrochemical industry, we realize that our operations could cause impacts to the environment if notmanaged properly. Therefore, Thaioil has always operated in compliancewith law and regulationsorbeyond.Inaddition,wehavedevelopedThaioilGroupEnvironmentalMasterPlanandconstructingsoil andgroundwaterbaseline informationatourmajoroperations inpreparation for thechange for the future whichmorestringentlawandregulationsareexpected.
39The First Story Of Thaioil’s Quest For Sustainability
We strive to be a leading organization in environmental management through continuous performance improvement and involvement of internal and external stakeholders in our program
AtThaioil,wehaveinplaceourISO14001environmentalmanagement systems certified by a third-party at all ofour major operations which they share the commonenvironmental,healthandsafetypolicy.Themanagementsystem provides the backbone for our environmentalmanagementincludingmanagingcomplianceanddefiningobjectives and targets in accordance with our ThaioilGroup Environmental Master Plan. This is expected topreventpotential impactsfromouractivities,suchasairemissions, effluent and spills to biodiversity andcommunities.Wehaveourshareserviceofenvironmentalprofessionals at ourmajor operations to provide a levelofconsistencyofenvironmentalmanagement.
Ourongoing6-monthlyenvironmentalmonitoringprogramconductedbyathird-partyisalsoprovidinganotherlevelofassurancethatnosignificantimpactfromouroperationtotheenvironmentandlocalcommunities.
Apartfromoursharedoperationalenvironmentalfunction,we have the corporate function to provide support onenvironmentalregulationtrackingandupdate.Inaddition,the corporate function is responsible for managingenvironmental permits including environmental impactassessmentandenvironmentalmonitoringreportstothegovernment with the involvement from the operationalenvironmentalfunction.
Environmental Management for Excellence
Technical Procedures
WaterManagement
ClimateStrategy
Eco-efficiency Performance
Biodiversity Supplier & ContractorProgram
EnvironmentalAudit
ReportingDisclosure
ManagementInformation Solutions
Governance Structure
40 Thaioil 2011 Sustainability Report
The Thaioil Group Environmental Master Plan
Thaioilisintheprocessofrolling-outtheMasterPlanwhichtheprogressisexpectedtobeincludedin2012SustainabilityReport.
Astheenvironmenthasbeenrapidlychangedinbothoftheglobalandlocalscaleandintermofphysicalandregulatory,Thaioilrealizesthatmanagingday-to-dayenvironmentalissuesarenotadequateforthesustainabilityofthecompanyanymore.ItistimeforThaioiltolookintoacrystalballandprepareforthefuturechallengesinthedimensionofenvironment.Therefore,ThaioilGroupEnvironmentalMasterPlanwasformulatedthroughaconsultationwithrelevantstakeholdersincludingregulators,communities,internalenvironmentalpersonnelandmanagementonkeyenvironmentalchallenges.Inadditiontothestakeholderconsultation,benchmarkingonenvironmentalmanagementpracticeandidentificationofoverseebestpracticeresultingintheEnvironmentalMasterPlan.AfterthecompanyhasagoaltobelistedinDowJonesSustainabilityIndexes(DJSI),thisEnvironmentalMasterPlanhasbeenshapedtosupporttheCompany’sgoalwhichincludesthenineareasasthefollowingfigure.
2008 2008 20082009 2009 20092010 2010 20102011 2011 20113.90
3.95
4.05
4.10
4.15
4.20
4.25
4.30
0.00
50.0
100.0
150.0
200.0
250.0
2.785.73
3.006.27
4.04
4.20
4.25
4.09
230.
02
204.
73
189.
63
180.
39
3.026.08
The First Story Of Thaioil’s Quest For Sustainability 41
Water Discharge Volumn(unit:millioncubic-meter)
Quality (COD)(unit:ton)
Water Withdrawal(unit:millioncubic-meter)
SeawaterIndustrial water supply
Environmentalperformanceisemergingtobethefocusareaofstakeholderstoseeenvironmentalfootprintthatthecompany leftontheplanet.Thaioil is intheprocessto improveourdatacollectionanddevelopourenvironmentalperformancetargetsforkeyemissionstotrack,controlanddiscloseourenvironmentalperformancesto interestedparties.
Thaioil has two sources of watersupply including seawater andindustrial water. Raw water fromthese two sources is channeled toall ouroperations inSrirachaDistrictwhich includes the refinery, petro-chemical plant, lube base plant andpower plants. Our water supplier,EastWaterwithdrawswater from theBang-pra and Nong-kor ReservoirsintoThaioil’srawwaterreservoir.Ourtotal water withdrawal reduced byapproximately 2% from 9.28 millioncubicmeters in2010 to9.10millioncubic meters in 2011 due to ourinitiativetoreducewaterconsumptionby increasing thecycleofblowdownwaterfromthecoolingsystem.
0
2
4
6
8
10
3.026.34
Water from our operations is dis-chargedtotheoceanafteritistreatedtomeetorexceedThailegalrequire-ments.Weensurethatwater isthor-oughly treatedandanalyzedprior todischargeoff-site.In2011,asaresultofincreasinginreuseandrecyclingofwater,wemanaged todecrease thetotal volume of water discharge byapproximately160,000cubicmeters(3.8%)ascomparedto2010.
COD (Chemical Oxygen Demand)indicates a degree of pollution inwastewater by organic compounds.Inabsoluteterm,ourdischargetrendofCODiscontinuousdecreasingfrom2008 to 2011. In addition, we havesigned an MOU with ChulalongkornUniversity inacollaborativestudyonthe use of algae to improve thequalityofwastewatereffluent.Wewillcommunicate the progress of thiseffortinthenearfuture.
Total Non-Hazardous Waste Disposal (unit:thousandton)
42 Thaioil 2011 Sustainability Report
AtThaioil,wehaveadedicatedWasteManagementCommittee that monitors the refinery’s wastefrom generation to the proper treatment anddisposalaccordingtoregulations.Theprincipleof3Rs: Reduce, Reuse, and Recycle has longbeen integrated into our consideration forwastemanagement. The total volume of hazardouswastegeneratedin2011was5.55thousandtons,which was increasing from 3.89 in 2010 dueto retention ponds cleaning that producedcontaminatedsoilandsandstone.
Our preferred disposal method is recovering(including energy recovery) that accounted for82% of our total hazardous waste in 2011. Ourrecoverywastesteamwasusedasfuelsubstitutionor burn for energy recovery, fuel blendingor co-material in cement kilnwhich includes oilysludge, spent activated carbon, copper slag,ceramicballandspentcatalyst.Theothermethodswererecyclingand landfillingaccountingfor14%and 4% respectively. It should be noted that nohazardouswastewassentforincineratingin2011.
Wemanageournon-hazardouswastejustasfirmlyaswemanageourhazardouswaste.Generationand disposal is monitored, and measures aretakentosalvagefromthewastesteamallthatcanbe recycled or recovered before final disposal isconsidered.In2011,atotal0.96ofNon-hazardouswastewasgenerated.Thiswasa20%decreasingfromthefigurein2010.
2010
2011
2011
2010
0.85Recycling2.70Recovery
(includingenergy recovery) 0.08 Incineration0.26 Landfill
0.64Recycling2.54Composting0.02Recovery
(includingenergy recovery) 0.20 Landfill 0.34 LandReclaimation
0.02Recycling0.00Composting0.01Recovery
(includingenergy recovery) 0.45 Landfill 0.48 LandReclaimation
0.76Recycling4.57Recovery
(includingenergy recovery) 0.00 Incineration0.22 Landfill
Total Hazardous Waste Disposal (unit:thousandton)
12.9
10.5
8.1
3.6
12.9
8.8
8.1
3.5
13.0
13.0
6.3
8.1
2.9
8.2
8.1
3.6
0
2
4
6
8
10
12
14
2008 2009 2010 2011
The First Story Of Thaioil’s Quest For Sustainability 43
In2011,allenvironmentalmonitoringdata;includingambientair,stackemissions,noise,andwastewatercompliedwiththeregulatorylimits;andtherewasnofineand/ornon-monetarysanctionwithregardtoenvironmentallawsandregulations.Further, therewasnoenvironmental incident in2011with thepotential to impact theenvironment forexamplespillage,leakage,andexplosion.Wehavemeasuresinplacetominimizethepossibilityofanysuchincidentfromoccurring,andestablishedproceduresforemergency.
Asour goals togo further into the regional arenawhichour operation areacouldbe locatedoversea,weaim toconductourenvironmentalmanagementat thesamestandardswhereverweoperate.Therefore,wewill leveragegoodpracticeanduselessonlearnedfromourmajoroperationsinSrirachatouseinotherareas.Ultimately,wewouldlikeourenvironmentalbrandtobeseenasaresponsiblecompanyinenvironmentalmanagement.
Tofullyunderstandingtheenvironmentwhereourmajoroperationslocatedandpreventfutureliabilityregardingsoilandgroundwater,Thaioilhasconductedsoilandgroundwaterstudytoconstructthebaselineintheareaof13.52squarekilometerscoveringareaofourmajoroperations inSrirachaandcommunitiesnearby.Thestudy focusesonpotentialcontaminantsthoserelevanttorefineryandpetrochemicaloperationssuchashydrocarboncompounds.Riskassessmentforactivitieswasconductedtoidentifytheappropriatedlocationforthesamplingwells.Astheresults,therewereeightwellsconstructedinadditiontotheexistingsevenmonitoringwellsforthetotalof15wellsforgroundwatersamplings.Thaioilalsotooksoilsamplingfrom10locationswithinouroperatingsites.TherewasnoindicationofVOCscontaminationinsoilandgroundwaterthatcouldbetheconsequencefromouractivitiesatallsamplinglocations.
Soil & Groundwater at Our Home
Air Emissions(unit:thousandton)
VOCsNOX
SO2
Direct CH4 emissions
Thaioil operating condition has no significant changeduring 2008-2011. As the result, our emission datacalculating by using Shell Group HSE PerformanceMinioring and External Reporting Guide 2004 has nosignificantdifferenceexceptSO2emissionin2010whichthechoiceoffuelwasthemainfactor.
44 Thaioil 2011 Sustainability Report
Globalwarminghasbecomemorechallengingandrealthaneverbefore,thisissue,indeed,poseriskstoourbusinessoperations,particularly,ofwhichisrelatedtoenergyconsumption.AtThaioil,wehavedevelopedcontinuousinitiativestoreduceourgreenhousegasemissionsthroughasenergyefficiencyintheproductionlinewithnumbersofefficiencyimprovement programs as Thaioil founded a strong principle of efficiency.Our EnergyManagement and Loss ImprovementCommittee(E&LCommittee)functionstomonitorsourenergyconsumptionandmanagesitsloss.Wealsohaveaprogramtominimizeimpactfromclimatechangeonourwaterresourcewhichincludingforecasting,planningandreducingwateruse.Asforalongertermconcernofclimatechange,weplantodevelopourstrategyinresponsetoclimatechangewhichincludesreductionofourgreenhousegasemissionfromouractivitiesandpreparationfortheimpactfromclimatechangeintermofregulatory,policyandphysically.
Withtheloomingthreatofglobalwarming,climatechangeisachallengethatwefaceascitizensoftheworld.Aswemove forward to realizingouraspiration tobecomea leadingcompany in theRegion, it isonlynecessary thatwedemonstrateexemplaryeffortsinmitigatingclimatechange.Wehadbeguntakingmeasuresinthisregardin2009,andovertimewehavedevelopedcontinuousinitiativestoreduceourgreenhousegasemissionsfromouractivitiessuch as energy efficiency in our production line because of most of the operating expenses in the productionprocesses(excludingrawmaterialcosts)areenergyandfuelcosts.Weseethisapproachasthewin-winopportunityfor environment, society and our business. At Thaioil, we have an Energy Management and Loss ImprovementCommittee(E&LCommittee)thatmonitorsourenergyconsumptionandmanagesitslosses.Thecommitteeconsistsof39representativesandisledbytechnologydepartmentmanager.
The followingfiguresshowourperformance in termsofenergyconsumptionandGHGemissions.TheGHGdatapresentedinthisreportwascalculatedusingtheShellGroupHSEPerformanceMonitoringandExternalReportingGuide2004.WeaccountedforourdirectGHGemissionsindeterminingour2011greenhousegasemissionsfromouractivities.Howevereffortsarecurrentlybeingmadetodevelopamorein-depthGHGinventorytocoverotherindirectemissionssuchasemployeecommuting,productuseandemployeetransportationemissions.Inthisregard,weareplanning to report suchemissions in thenear future. It shouldbenoted that theperformancedataofenergyuseand GHG are from the period of 2009-2011 because the data collection process for energy usage was roll-outoperationbyoperationwhichthecoverageincludedallourmajoroperationsin2009.Therefore,ourdataonenergyconsumptionofallmajoroperationsbefore2009 isnotonthesamebasis.Wewillcontinuouslyreportourenergyconsumptionfrom2009onward.
Climate Change Mitigation & AdaptationAs our majority of Thaioil greenhouse gas emissions from our activities come from fuel combustion, Thaioil approaches to reduce greenhouse as is through energy efficiency
4.9
3.3
4.5
5.78
0.0
1.0
2.0
3.0
4.0
5.0
6.0
The First Story Of Thaioil’s Quest For Sustainability 45
Direct Greenhouse Gas Emissions(unit:millionton)
Direct GHG emissions (also known as Scope 1emissions)areGHGemissionsfromsourcesownedand controlled by Thaioil and its subsidiaries. Thisincludesemissions from thecombustionof fuels inourstationarysource.In2011,ourtotaldirectGHGemissionsrosebyapproximately1.2million tonsofCO2 equivalent (tCO2e), or 37.05% as comparedto 2010. The increase was very much due to ourchanging of fuel source but it was still lower than2009GHGemissionsevenwehadhigherproductionin2011.
Corrected Energy & Hydrocarbon Loss (CEL) Index
Indirectenergyispurchasedenergy.Theuseofsuchenergyisconsidered‘indirect’asitissourcedatthepowerplantorattherelevantsitethatisprovidingtheenergy,ratherthanatourownsite.AtThaioil,wenormallyuseelectricityandsteamfromourownoperations(TP)whichtheindirectenergyuseatourrefineryandoperationsinthesameareaisnotincludedinthisreporttoavoiddoublecounting.Weboughtelectricityonlywhenourpowerplantswereshutdownswhichwereabout10,000times lower thanourdirectenergyused.Therefore, it isnotmaterialtoreportourindirectenergyuseandindirectgreenhousegasemissionsfromourmajoroperations.
Direct energy is energy that is derived fromsourcesownedandcontrolledbyThaioilanditssubsidiaries.Thisincludestheenergygeneratedfromthecombustionofvariousfueltypesatourplantsincludingnaturalgas,LPG,fuelgas,bunkeroilanddiesel.OurCorrectedEnergy&HydrocarbonLossIndexiscontinuouslydecreasingfrom99.5in 2009 to 97.3 in 2010 and 94.7 in 2011demonstrating our increasing in energy andhydrocarbonlossefficiency.However,itisafactthatourabsolutedirectenergyusagedoesnottotallyreflectourenergyefficiencysincedifferentproducts results in different energy required.Therefore,ourdirectenergyusage in2011wasabout10,000MMGJincreasingfrom9,000MMGJ in2010due tochanging in typeofproductproduced and the processing of light crude oiltypewhichrequirehigherenergyincomparison.
200950
60
70
80
90
100
110
20092010 20102011 2011
94.797.3
99.5
46 Thaioil 2011 Sustainability Report
Energy Efficiency and Hydrocarbon LossAtThaioil,webuildourstrongfoundationontheprinciplesofefficiency,reliabilityandflexibilityofouroperationandnatural resourcesuse includingenergy.Wehavesetourgoal tobe in thefirstquartileof the refiningperformancebenchmarking among the Asia-Pacific refineries group,which has been undertaken every two years by SolomonAssociates.Toachievethisgoal,theCompanyhasestablishedthe5-yearenergyroadmapastheCompanyEnergyMasterPlanforeffectiveimplementation.Inaddition,ThaioilintroducedHydrocarbonManagementSystemtoreducehydrocarbon losswhile increasingenergyefficiency.Some important indicators thatdemonstrateourexcellence inenergyandhydrocarbonlossmanagementare:
In2011,wesetthenewbarforenergyandhydrocarbonlossindexasweoperatedinthehighestefficiencyconditioninthepast50yearssincethedaytherefineryhasbeenstartcommissioning.ThaioilfocusoureffortsincontrollingCELindexnottoexceed98whichtheresultsofourhardworkingandsupportfromseniormanagementpayoffasourCELindexwas94.7.Thisachievementwasmetduetoourequipmentinstallationandretrofittingincludingenergyconservationthroughchangeinoperatingconditionsandpracticesasfollows
Energy Saved due to Efficiency Improvement and Conservation
Ocean Loss Index:
ThisindicatorshowsthecontrollingofoceanlosswhichreflectstheCompany’soperatingexpense.
Corrected Energy and Loss Index (CEL):
CELindexconsistsofenergyindexandlossindex which is assessed by comparing theactualenergyconsumptionandhydrocarbonloss incurred with the corresponding theo-reticalallowance.ThisperformanceindicatorhasbeenincludedasaCorporateKPI.
Operating Expense:
The operating expense mainly comprisesenergy consumption, hydrocarbon loss andmaintenance cost. When compared ouroperatingexpense toother refineries’ in theAsia-PacificRegion,ThaioilwascategorizedinthefirstquartileofthebenchmarkingdonebySolomonAssociates.
Equipment Installation and Retrofitting
• Heaterinsulationimprovement
• Insulationinstallationatsteampipeline
• Changinginheaterconvectionsection
• InstallationoflowNOxburners
• Installationoffoggingsystemin gasturbineelectricgenerator
• Utilityoptimizerforenergy productionunits
The First Story Of Thaioil’s Quest For Sustainability 47
Climate Change AdaptationRightnow, therearemoreandmoreevidencesof thechangingworld throughuncharacteristicofnaturaldisasterwhichclimatechangearguablybeoneofthecauses.Therefore,Thaioilisawarethattobeinbusinessforthenext50yearshastobeabletoadaptforthemorerapidchangetocome.Inaddition,weuseourenterpriseriskmanagementtoidentify,assessandmanageriskregardingtotheclimatechange.In2011,climatechangeisillustratedasoneofthefactorscontributingfortheriskofwatershortage.Thisriskisidentifiedasintheacceptablelevelduetoourabilitytomanagetheissueinthearea.However,watersituationhasbeencloselymonitoredbyresponsibleperson.
Energy Conservations • Reducingtheuseofbunkeroilforthe useofcleanerenergy,forexample naturalgasasareplacement
• Improvingadvancedprocesscontrol andintroducedrealtimeoptimizerat fractionatingtower
• Reducingpressureatfractionatingtower toreduceenergyuse
• ReducingsteamusageatHydrogen Manufacturingunit
• Reducingatomizingsteamusageat FluidCatalyticCrackingUnit
• Cleaningofheatingequipment
• Reducingblow-downfromboilers
• Inspectingandadjustingoxygeninto thefurnace
• Reviewingandadjustingfuelusage ineachfurnace
TheresultsfromaboveinitiativeshelpThaioilsaves18Megawattsofenergythatisequivalentto14,000tonsfuelperyearor35,000tonsofcarbondioxideemissionreductionin2011.Inaddition,italsoprovidesmorereliabilityfortheproduction.
Hydrocarbon Saved due to Hydrocarbon Management
Efficiencyofinputmaterialuseisanotherareaofourfocuswhichwealsosetatargetforrefinerylossandnumbersofinitiativestoreducehydrocarbonlossincluding
• Installationofcrudeonlinesamplerto takecrudeoilsamplefromamarine tankerautomatically
• Improvementincrudeoilwashingina marinetankertoreducetheleftover crudeoil
Thaioil isabletoreducehydrocarbonlossof10,000tonsin2011whichisequivalentto25,000tonsofcarbondioxideequivalent.
Wealsohaveinitiativestoreduceenergyuseandhydrocarbonlossatthestageoffeasibilitystudyandengineeringdesign in theareaofcleaner fuelsusage,heatandvaporrecoveryand installationofequipmentandretrofittingtocontinueoursuccessinenergyandlossmanagementandcontributetogreenhousegasemissionsreduction.
• Improvementinsurveyorprocedureto beinlinewithinternationalstandards
• Introducingrandominspectionofstaffs practiceondischargingcrudeoilfrom crudecargotostoragetankswhether itisinlinewiththeprocedureand internationalstandards
48 Thaioil 2011 Sustainability Report
Evenrefineryandpetrochemical industryrequires lesswaterwithdrawalcomparingtofoodindustry,Thaioilhasdevelopedannualwatermanagementplaninplaceformorethan5years.Thaioil’smajoroperationsinSrirachaacquire industrial rawwater from2reservoirs:Bang-praandNong-kor throughEastWater,ourwatersupplier. Seawaterisalsoanothersourceofourwaterwhich6seawaterdesalinationunitsareinstalled.
Thaioilhascomprehensivewatermanagementplantoensureadequatewaterforouroperation.Riskregardingwatershortageisidentified.Incaseofthecrisis,wehaveanannualwatercrisispreparationthatistakingcurrentwaterdemand(forbothnormaloperationandcrisissituation),weatherforecastandrainingforecastintoaccount.Therefore,ourresponsestrategyisaroundtheconceptof
Reduce industrialwater supply throughsettingwaterconsumptiontargetinrefiningprocess and maintenance of seawaterdesalinationunitstobeabletomake-uptheshortageofindustrialsupplywater
Thaioilneverexperiencewatershortagethateffectsouroperationbefore.Inaddition,wehavecommunityaffairsteamtoregularlyengagetomonitortheissuesoflocalcommunitiesaroundouroperationthatpreventingconflictregardingwateruseinthearea.
Climatechangeishavinglargerroleinbusinessworldrightnowanditisexpectedtohaveincreasingrollinthenearfuture.Thaioilwillassessthesituationandpreparefortheadaptationtothechanginginphysicalandlegaloperatingandbusinessenvironment.Meanwhile,wewillcontinuouslyputourefforttomitigationclimatechangethroughenergyefficiencywhichhelpsreducingthe levelofgreenhousegasemitted.Asweaimtodevelopour strategyinpreparationforthefuturechallengesinclimatechangewhichisexpectedtobecompletedinthenearfuture.
Thaioil’sfirstandforemostpriorityisplacedonoccupationalhealthandsafetyofouremployees,communitiesandcontractors.Wesuccessfullyaligned themanagementsystemofoccupationalhealthandsafetyacrossallour operations,establishedfunctionstocontrolandmonitorperformance.Thaioilhasincorporatedsafetyaspectintoourkeyperformanceindicatorsasameanstoinstillconsciousnessintoourpeoplewhilstourrecording,trackingandreportingonsafetyperformanceremainsanimportantchannelinchartingourprogress.Wewillcontinuetoimproveouroccupationalhealthandsafetyprograminordertomaintainour leadingpositionanddrivingforwardtotheregionalchampion.
AtThaioil, occupational healthandsafetyofour employees, communities, contractorsandassetsareconsideredasthefirstandforemostpriority.Wehaveaproudtraditionofsustainingexcellenceoccupationalhealthandsafetyperformancewhichwasarguablyexceedingpeers inThailand.However,weunderstandwecouldnotsustain theleadingpositionifwedonotdriveourselvestothenextlevelasothersareimprovingthemselves.Therefore,wehavedevelopedthe5-yearOccupationalHealth,SafetyandFirePrevention(OHS&Fire)Roadmapasouragendatomoveintothenextlevel.
Reuse and Recyclecoolingwaterforcleaningandwateringtreesandimprovingrecyclerateofcoolingwater
Replacetheexistingwatersupplysourcesthrough conveying raw water from othersourcesbyshipsincaseofemergency
Integrated Thaioil Occupational Health & Safety SystemNothing less than the finest level of occupational health and safety in the company is our aspiration to sustain Thaioil first class position of occupational health and safety in petroleum industry
Water Management For Our Operations
Employee
Contractor
2009
0.00
0.97
2010
0.54
0.63
2011
0.55
0.55
2008
0
0.00
2009
0
0.39
2010
0
0.00
2011
0
0.14
* The TRCF and LTIF were calculated using (x / Total Hours Worked in a Given Year) * 1,000,000 Work Hours; where x is the total number of injury/lost workday case in a given year.
# Minor (first-aid level) injuries were excluded in the injury rate data
2008
0.57
1.23
Lost Time Injuries Frequency*Total Reportable Case Frequency*#
The First Story Of Thaioil’s Quest For Sustainability 49
Management of Occupational Health and SafetyIn2011,wesuccessfullyalignedtheOccupationalHealthandSafetymanagementsystemacrossallouroperations,includingatSriracha,toestablishconsistencyintheoverallmanagementofoccupationalhealth,safety,firepreventionandemergencyresponse inourmajoroperations. Inthisregard,wehavededicatedfunctionstocontrolanddriveperformanceinallaspectsrelatedtooccupationalhealthandsafety.Inadditiontothededicatedfunction,wehaveajoint-managementemployeeoccupationalhealthandsafetycommittee thatcomprisesofworkforce representativeofat least50%(excludingtheChairman).Thecommitteeholdsameetingatleastonceamonthtokeepeveryoneupdatedonrecentincidents,theprogressofthings,andonupcomingplans.
In2011,wehavealsostartedtoincorporatekeyperformanceindicatorsintheareasofoccupationalhealthandsafetyandfirepreventionasameansofinfusingthecultureandawarenessintoourpeople.Tostayaheadinthefast-pacedand competitive oil and gas industry, we regularly review Thaioil’smanagement systems and procedures againstworld-class safety guidelines for example safety laws and regulations, safety and fire standards, communication,documentation,processsafetymanagement.
Onecanmanagebestwhatonecanmeasure.Withthisinmind,weestablishedasystemfortherecording,tracking,andreportingofouremployeesandcontractorssafetyperformance, incidents,andpotential incidents(unsafeact,unsafeconditionandnear-miss).ThefollowingtableshowstheratesofTotalRecordableCaseFrequency(TRCF),LostTimeInjuriesFrequency(LTIF)recordedbetween2008and2011.
Therearenoevidenceofoccupationalhealthcasesoccurduringthepast50years,Thehealthriskassessmenthasbeendevelopedrecently.Tofurtherimproveonoursafetyandhealthawareness,wewidenedourscopetoincludekeeping trackof incidentsoccurring inother refiningandpetrochemicalcompaniesglobally, todeveloppreventionand/orcontrolmeasuresfromlessonslearned.
Improvement InitiativesIn2011,wehave integratedandstandardized themanagementofoccupationalhealth, safety, fireprotectionandemergencyresponse intothesingleOHS&Fireprocess inSrirachaforexamplee-permit,accident/incidentreportonline(OFIonline),emergencyresponseequipmentsandtools,emergency/crisismanagementteamanddrills.
Overthepastyear,wehavealso incorporatedOHSrequirementsforcontractors inthesupplychainmanagementprogram.This includescontractorsafetycertificationandtrainingwithrealtoolsandequipments.BuddysysteminoccupationalhealthandsafetywasintroducedforbothcontractorsandemployeesinJanuary2011,allowingpersonneltowarneachotherofpotentialdangers,unsafeactsand/orunsafeconditionsduringoperations.Itwasnotedthatthenumberofincidents/nearmissesreducedby14.55%aftertheimplementationofthebuddysystem
Hearts & Minds to Develop Safety Leadership
Thaioil adopts safety leadership program from Shell to enhance safety leadership and awareness among our employees. When it comes to behavioral change, nothing beats efforts applied at the roots consciousness–we go the extra mile at Thaioil. We assess safety leadership in the 5 levels, including pathological, reactive, calculative,proactiveandgenerative.Wehaverandomlyassessedoursafetyleadershiplevelin2011whichtheresult indicated that the safety leadership levelwas “calculative”.Wewill expand the scopeof assessment to coverallkeyoperationsin2012.
WebelieveourcontinuousimprovementintermofOHSprogramandperformancedatahasalargeroleinourbusinessreliabilityandouremployeeengagement.RightnowwecouldarguablyclaimasoneofthenationalchampionsintermofOHSmanagementwhichwecommittosustainthepositionwhilemovingontotheregionalchampiontosupportthefutureofThaioil.
50 Thaioil 2011 Sustainability Report
OUR PEOPLESTORY
The First Story Of Thaioil’s Quest For Sustainability 51
84 hours
ofemployeetrainingperyearperperson
HIGHLIGHTS FROM 2011
100%of
ouremployeeshavecareerdevelopmentplan
~98%of
ouremployeesparticipateinourannualemployeesatisfaction&engagementsurvey
52 Thaioil 2011 Sustainability Report
Enhanced Leadership Development Program
Aligned Performance Management System Across TOP, TLB, TPX, TES
Connected Our Performance Management System with Personnel Database
Improved Our Performance Appraisal System
Improved Recruitment Process Efficiency
Developed Soft Competency Set for Serving Business Directions and Goals
Established and Implement TOP Group Scholarship in Five Themes
Developed Employee Self Service & Manager Self Service (I-Link) for Appraisal Center and Training Management Integrated to Single System; SAP Platform
: Launch I-Link Application to Manage Human Resources Data, Appraisal, Training Management
: Expand Career Management System and Succession Plan to Cover Every Career Paths and Companies in Thaioil Group
: Health Promotion Campaign
What We
PLAN TODOIN 2012?
What We
DID IN 2011?
53The First Story Of Thaioil’s Quest For Sustainability
Integrated Human Resources System to Support Our Growth Strategy, Culture and EmployeesAtThaioil,employeereadinessisoneofthekeychallengesforoursustainability.Therefore,wedefineourstrategynamedDEARwhichcomesfromDevelop,Engage,Attract,andRetaintoovercomethechallenge.Ourapproachof development employees is constructed around our PerformanceManagement System (PMS) that includes identifyingcompetencygapanddeveloping individualdevelopmentplan toconductingperformanceappraisal. Regardingemployeeengagement,webelieveapersonwillbeengagediftheyareproudofwhattheydoanddowhattheydobestwhichwouldbeaddressedinThaioilPSM.Wealsoprovidethecompetitivesalaryandbenefitsforouremployeesintheareaoffundamentalneeds,employeedevelopment,familysupport,work-lifebalanceandcareerendingassistance.Manpowermanagementisanotherchallengeforustoprepareourpeopleandattractnewtalentsintermofnumberandcapabilitytoservetheexistingandexpandingbusiness.Wealsoconductourannualemployeesatisfactionandengagementtounderstandwhatemployeesarethinkingandfeelingtowardourorganization.Wetakethefeedbackfromthesurveyseriouslyandincorporateitintoouremployeereadinessplan.
ReadinessofskilledemployeestoservebusinessgrowthandmaintainexistingoperationisoneofthesustainabilitychallengesinoilandgasindustryandalsoincludedinThaioilStrategicChallenge.Inrespondingtosuchchallenges,wehaveour human resources strategies toDevelop, Engage,Attract andRetain (as knownasDEAR) people toensureourpeoplereadinesstoservebusinessneeds.
54 Thaioil 2011 Sustainability Report
Manpower Management
Manpowermanagementisthefirststeppingstonetolinkpeoplestrategywithbusinessstrategy.AtThaioil,manpowerplanningisnotonlytheresponsibilityofhumanresourcedivisions.Ontheotherhand,itrestsineverydepartmentmanagersandsectionheads toassessmanpowerneed inaccordancewithorganizationalstructureandbusinessstrategies with supports from human resource and planning department. Then, recruitment opportunities areidentifiedintermofbothnumberandcompetency.Thisprocessisrepeatedannuallyanddocumentedinourqualitymanagementsystem.
AtThaioil,weareintheexcitedtransitionalperiodfromsinglecompanytotheGroupofcompaniesworkingtogetherto achieve the singlegoal. Therefore,manpowermanagementof ThaioilGroup is about tobechanged tomatchwiththechangingbusiness landscapewhichemployeediversity intermofagerangeandskills isoneofthekeys.Employeesegmentationmodelisthendevelopedtomonitorandensureexecutionofhumanresourceplanning.
Performance Management System
Performance Management System(PMS)isoneofthecoreprocessestoalignemployeeswithThaioil’sdefinedpriorities and goals. In addition, webelieveitisthebestwaytokeepouremployeesmotivatedandunderstandhowtheycontributetothesuccessofThaioil.PMSiscomprehensiveprocessthatprovidescommonunderstandingof the priorities and goals, clarifyexpectationsforindividualandgroupcontributions, identify competencygap through feedbackandcoachingandengravecommitmentbasedonmeaningful work and reward. Thisprocess is facilitated by our Man-agement Information System (MIS),theCOACHundertheSAPplatform.Moreover, the I-Link programwill beappliedin2012insteadoftheCOACHinordertomanagethehumanresourceinformationdatamoreeffectiveway.
Thaioil alsodefinesCoreCompetency forall careerpathsalongwithLeadershipCompetency toensureallofouremployees have opportunity to progress and success. Competency of all employees are assessed against thedefinedCoreCompetencyandLeadershipCompetencytoidentifydevelopmentopportunitieswhichwillberecordedfor follow up in Individual Development Plan (IDP). The performance against KPI along with competency of allemployeesisassessedtwiceayearwhichinfluentemployee’smeritandvariablecompensation.
TheCorporateKPIisthestartingpointwhereitwasformulatedaccordingtoBalanced Scorecard (BSC) principlewhichcoverseconomic,environmentand social dimensionswhich formu-lated fromall departmentsand final-ized by executive team. Then it isdeployed from CEO to executives,departmentmanagers,sectionheadsand employees respectively. EachpersonneedtosettheirKPItobeinlinewith theassignedKPI from theirsuperiortoensurealignmentthrough-out the organization. Supervisor willthencoachandprovide feedback tosubordinate for their developmentas well as encourage them fortheir contributions with recognition.Employee merit and variable com-pensation is linked to the PMS tomotivate and promote employees tofocusonthecorporatepriorities.
The First Story Of Thaioil’s Quest For Sustainability 55
Learning Organization
Apart from preparing people in term of number, preparing competency of our people to meet the demand isalsocriticalforoursuccess.ToexecuteIDP,weprovidenumbersofchannelincludesscholarship,onthejobtrainingvia coaching and mentoring. However, we believe knowledge management is beyond developing an individual.Therefore,wedevelopedourknowledgemanagementsystem to retainknowledgewithinThaioil andshare itwithour employees through KM Portal, E-library and Community of Practices including best practice sharing amongcompanies inPTTGroup. Inaddition,wehaveaprogramtoacquire theserviceofour retiredemployees tobeaconsultantfordevelopmentofworksystemandworkprocessandforeducatingnewgenerationofemployees.
Averagetraininghoursperstaff isincreasingforall levelofemployeeforfourconsecutiveyearsfrom2008-2011with an exception of non-management employee in2011.Weexpect thenumberofaverage traininghoursper person to continuously improving to be one of theareasinorganizationallearning.
Also, average number of training hours for male andfemale in2011 is81and85hours/person respectivelywhichdemonstrateourperformanceregardingcommit-menttoequalopportunity.
Thaioil Performance Management System
Career endingassistance
56 Thaioil 2011 Sustainability Report
Thaioildevelopedknowledgemanagement(KM)processundertheCOSSAIModelwhichincludes5steps:capture,organize,store,share,applyandinnovate.RepresentativesfromalldepartmentsareassignedasKMGovernanceCommitteetomaintainKMwithintheorganization.KMPortalactsasthefacilitatorofallKMprocesseswithinThaioil,forexampleinformationsharingwithincommunityofpracticeandknowledgesearchingwhicheveryemployeecouldaccessandlearn.Inaddition,Thaioilassignsemployeeswhodecoratedwithexperienceandknowledgeasthelistofexpertswhichotheremployeescouldmakeacontacttoresolvespecificissue.
Compensation Mix & Employee BenefitsAtThaioil,weexpectthebestpeopletoworkforuswhichwebelievethebestpeopledeservethebestcompensationandbenefits.Webenchmarkourpositionincompensationpackageandbenefitsannuallywiththefirsttieroil&gasand petrochemical companies in order to ensure our compensation and benefits are positioned inwell place. Allemployeesinequivalentlevelreceiveequivalentbasicsalaryrangeandbasicbenefitspackagewithnodiscriminationongender,age,race,religion,etc.
Wealsoconsiderouremployeesasfamilymemberstotakencareoff.Therefore,weprovideemployeewelfarebeyondlegalrequirementsintheareaoffundamentalneeds,employeedevelopment,familysupport,work-lifebalanceandcareerendingassistanceasprovidedinthefollowingtable.
Knowledge Management at Thaioil
Employeedevelopment
Family support Work-lifebalance
• Foodfor shiftstaffs
• Transportationto workattherefinery
• Medicalinsurance
• Uniform
• Residence employees attherefinery
• Medicalinsurance forfamily
• Childeducation allowance
• Cremation allowance
• Employee clubs
• Fitnesscenterat headquarter
• Savingandcredit cooperative
• Cosumer cooperative
• Defined benefitplan
• Annuity
• Schorlarship
• Educationleave
Fundamentalneeds
4.2 4.14.3 4.2
5.0
4.0
3.0
2.0
1.0
0.0
2008 2009 2010 2011
The First Story Of Thaioil’s Quest For Sustainability 57
Voice of Our EmployeesApart fromcommitmentonThaiconstitutionand labor laws,we respectand listen to thevoiceofouremployeesthroughmultiplechannels.ThaioilhasconstructedaneffectivemechanismtoconnectmanagementwithemployeesbythecoordinationofThaioilUnionandJointAdvisoryCommittee(JAC),orinotherwords,Management-EmployeeCommittee.Allof theemployee’s representatives in thecommitteecomefromtheUnion tobridgethe twopartiesof employees andmanagements. The committee has ameeting once amonth to discuss any employee relatedmatters.No incident regardingdiscriminationaswellas issues regardingsignificantoperationalchange thatcouldsubstantiallyaffectouremployeescomestoourattentionthroughanychannelin2011.WearealsohavinghighportionofemployeeinourUnionof71%.
Employee Satisfaction & EngagementAtThaioil,welookbeyondseparatedemployeesatisfac-tion and engagement to ensure we understand andresponse to the actual preference of our employee.Therefore, we develop Thaioil Model in 2010 whichadopts factor analysis to look at the correlation ofemployeesatisfactionandemployeeengagement.
In 2011, over 737 employees completed thequestion-naireaccountingfortheexcellentresponserateof97.9%(comparingtothetargetat94%).Thesatisfactionscorein2011was4.2from5whichweaimthatthescore isnotlessthan4.Thescoreindicateminordropfrom4.3in 2010, however, the trend is considerably stable in4years.Wewillusethefeedbackto identifyneededtostepupoureffortandtotranslateintoactionplanswhichwillbetrackedandreportedprogressin2012.
Rights of Our EmployeesThaioilcommitstotheprinciplesofuniversalhumanrightsasstatedintheCorporateGovernanceManual.
As a performance based organization, we ensure our decision on people bases on personal performance andcompetency.Weensureafair treatmenttoallemployeesandcontractorswithoutdiscriminationbasedongender,race,religion,politicalviewornationalorsocialorigin.Inaddition,ThaioilisstrictlyincompliancewithThailawsandregulationswhichprohibittheuseofchildandforcedlaborsandpreventionofassociationandcollectivebargaining.
Asweconsiderpeopleisthepowertodrivethecompanytotheaspirationinthenext50years.Weacceptthatthechallengesinpreparingpeoplereadyforthequick-stepforwardofThaioilisnotashorttermfix.Lookingattheothersideof themirror, this isexcellentopportunity forbothexistingemployeesandpersonswhowishto joinThaioil tolearnandgrowintheexcitingbusinessof integratedrefiningandpetrochemicalasouraspirationtobetheEnergyConverterforthebetterworld.
Employee Satisfaction Score
58 Thaioil 2011 Sustainability Report
OUR CUSTOMERSAND SUPPLIERSSTORY
The First Story Of Thaioil’s Quest For Sustainability 59
89%satisfactionpercentageofourcustomers(1HY2011)
HIGHLIGHTS FROM 2011
>250,000metric tons ofsulfurthatwesavefromreleasingtotheenvironmentbyintroducingEURO4products
10companiesinvolvedinthePilotPhaseforhighprioritysuppliersandcontractorsofThaioilCSRinsupplychain
60 Thaioil 2011 Sustainability Report
Launched E-Ordering System Phase I for Petroleum Customers
Organized a Workshop with Other Related Departments to Brainstorm on Responding to Customer Feedback
Rolled Out CSR in Supply Chain Phase I for 10 Key Suppliers and Contractors
: Modify Partial Parts of the E-Ordering System to Serve
Customer Requirements
: Formulate Customer Database
: Expand CSR in Supply Chain Program into Phase II to Include More Suppliers and Contractors
What We
DID IN 2011?
What We
PLAN TODOIN 2012?
The First Story Of Thaioil’s Quest For Sustainability 61
Customers & Green Products
ThaioilseesandtreatscustomersasourbusinesspartnerswhomweseektounderstandandaligntheirbusinessgoalswithourbusinessplanbyworkingtogethertoincreasevaluesbetweenThaioilandcustomers.Indoingso,Thaioilhasdevelopeddifferentmethodsand initiatives toensure thatourcustomers’concernsandvoicesare effectivelymanagedandheard.Forinstance,aseparateandindependentfunctioninmanagingcustomerrelationsisestablishedtoensurethatallconcernsareaddressed;andbothlargescaleandsmallscalecustomerareincludedinourcustomerengagementplan.In2011,ourkeyachievementsregardingcustomersandgreenproductsweretheE-OrderinginitiativewhichsustainablyhelpsimprovingefficiencyofoilorderingprocesswhilsttheRoadTankerprojectwaslaunchedtoprovidevehiclesafetyinspectionandrestareafordriversofourcustomerswithaimstopreventaccident.
Moreover,abyproductofThaioilachievementsinmeetingEURO4standardswhichhelpreducinganumberofsulfurfromourairtobreath.Intheyearstocome,thechallengeinholisticmanagementofcommercialactivitiesforallofourexistingandfuturebusinessremains,however,withourstronginfrastructureanddedicatedteams,suchadifficultywillsoonbeovercome.
AtThaioil,wegobeyondcustomerfocustotreatourcustomersasourbusinesspartnerstounderstandtheirbusinessgoalsandalignwithThaioil’sbusinessplan.Ourcommercialstrategydoesnotfocussolelyonincreasingthenumberofcustomerasmanyaspossible.Ontheotherhand,wefocusonwalkingtogetherwiththecurrentcustomerstoincreasethevalue,bothtangibleandintangiblebetweenthemandThaioil.However,weopentodobusinesswithnewcustomerstoexpandourfamilytobethebigfamilybusinesswiththesenseofprofessionalofThaioil.
Respondingtothecustomervoiceintimelinessandultimatelyansweringcustomerneedisoneofthekeysuccessfactorsforcustomerrelationshipmanagement(CRM)atThaioil.Howwehearthevoiceandhowweensureweunderstandwhatourcustomerreallywantsaredetailedasfollows.
Listening, understanding and integrating customer feedback into product and service improvement process to build customer engagement
62 Thaioil 2011 Sustainability Report
Thaioil has a dedicated function formanaging customer relations independently from customer planning functionto ensure interest of the function is to looking after customer voice. Every customer is included in our customerengagement plan that details the responsible person, schedule for engagement, method for engagement andobjectivesofengagementforeachofthecustomers.Theengagementmethodsincludecustomervisits,callingviatelephone, seminar andplant visit. In addition, customers couldprovide feedback throughourwebsitewhich themessagewillbecenteredbyourCustomerRelations.Thecustomers’requirement,feedbackandexpectationwillbegatheredandpassedtorelateddepartmenttotimelydelivertheirrequirementintermofresponse,product,serviceorbusinessprocessimprovement.
ThaioilvaluesvoicesofcustomersasoneofthekeyinputsinourcontinuousdevelopmentwhichE-Orderingishowwelistentocustomersandadaptittotheworldofinformationtechnologyandinternet.Thetraditionalprocessinvolvingmultiplestepsofhumandependentandoutofdatemachine(i.e.facsimile)whichhumanandmachineerrorcouldreasonablybeexpected.Therefore,weanalyzedcustomerfeedbackandcameupwiththeconceptualdesignofincreasingflexibilityforcustomers,improvingefficiencyforoilorderingprocessandprovidingaconvenientaccesstosystemforthecustomerwithuser-friendlysystem.Thenewprocesswasthendesignedtohaveonly3stepsofcreatingsaleorder,issuingproductticketandcollectingproducts.AllstepsaremanagedthroughSAPwhichthecustomercouldaccessthesystemtotrackthestatusandcredit.Therefore,thenewintroducedprocesscouldsavetime,reducetransactionerror,provideflexibilityincludinguser-friendlyinterface.Ourfirstphasein2011pilotedondomesticlorryloadingcustomersunderthecashandcreditpaymentterm.
Thereare twocategoriesofThaioil’scustomers: largescalecustomers (i.e.,off-takers)andsmallscalecustomerswhichtheirexpectationsarebasicallythesame,i.e.qualityofproducts/services,availabilityofproductandsafetyofproduct.Therefore,Thaioilcustomerengagementprocessbuildsoncustomerlifecycledefinedasfollows
From Now,We go On-Line,E-Ordering Initiative
1. Customer acquisition
2. Customer growth
3. Customer retention
4. Customer recovery
Potential customers
Existing customers
Customers with potential of business expansion
Customers facing businessissue/out of bussiness
CustomerRelationshipManagement
Provide information on product/services
Listen, respond, build trust
Co-develop businessstrategy and model
Maintain communicationand provide support asappropriate
Voice ofCustomer
The First Story Of Thaioil’s Quest For Sustainability 63
Information Security
Securityofcustomerdataistheareaweupholdasoneofthepriorityinourcustomerdatamanagementsystem.As we currently moving toward more software oriented organization. Computer program and management informationsystemisbecomingapartofourdailylife.
Asourmarketing,order,fulfillmentandcustomerservicehistoryareincludedinourcustomerdatabase,weonlyallowaccesstocustomerdatatoauthorizedpersonsonly.Ourcommercialstaffscouldaccesstoseeonlythedataofcustomerstheyareresponsible.Inaddition,alltheaccessandactionsareloggedinthesystemtoensuretracking and investigation in case of the incidence. Maintaining confidential information and use of inside information isalso included inourcodeofconduct. In2011,Thaioil receivedthecertificationof ISO/IEC27001InformationSecurityManagementSysteminthecomplexproductionnetwork.Thaioilneverexperiencedacaseofbreachesofcustomerprivacyorlossesof/stolencustomerdata.
Truck Loading
As our philosophy of corporate responsibility goes beyondfactoryfence-line,wealsoconcernthewell-beingof road tankerdriversofourcustomersas to prevent accident that has consequence on safety of communities, environment, customers business andultimatelyThaioil.Therefore,wehavebeenworkingtogethertoidentifytheriskandunderstandtheneedtoultimatelyprovidethemwithwhatweconsiderthebestinclassrestfacilityforourcustomers’truckdrivers.Theycanaccessthefacilitytosleep,showerorrestbeforetakingbackourproducts.Apart fromhumanfactor,customers’vehicle isanotherareawhereourcorporate responsibility reaches to. Thaioil has the safety precaution by inspection all trucks before offtaking our products. Un-qualify trucks will be informedthe issuesandwesadlycouldnotprovideourproducts to the trucks toprotect our customer businessandcommunitysafety.
Wedonotfocussolelyongivingeverythingourcustomerasking.However,wetrytounderstandwhatthecustomerreallywants toensureour responsehelp themtomeet theirexpectation.Wehaveweeklycommercialmeeting todiscuss about responding to customer expectation and also monthly brainstorming session with other relevantdepartmentstoensureholisticviewtoanalyzecustomerexpectationand identifyingapproachtoresponseonkeyissues.
To verify the effectiveness of our customer relationmanagement,Thaioilconductsannualcustomersurveywhich includes satisfaction ratinganddescriptive feed-back. Customer relations function is responsible fororganizingthesurveyviaquestionnaireandcompilestheresults.Thecustomersatisfactionscoreisthenbench-marked with our competitors to identify improvementplan as needed. The descriptive feedback will bediscussed in the monthly commercial brainstormingsession.
64 Thaioil 2011 Sustainability Report
AirpollutionintheurbanareaisoneoftheenvironmentalissuesinthemajorcitieslikeBangkokwhichexhaustgasfromroadvehiclesisoneofthemaincontributors.Sulfurcontentinfuelsisreleasedintotheatmosphereafterthecombustionprocessinanengine.Sulfurintheatmospherecausesacidrainandparticulatewhichcouldhaveimpactonhumanhealthandtheenvironment.In2011,ThaioilbecamethefirstThairefinerywhichallproductsaremetwithEURO4Standardsincludingdiesel,gasolineoctane95,gasolineoctane91andbaseoilforgasoholoctane95andoctane91duetoourvolunteeringbeginstheprojecttoconstructtheCatalyticCrackedGasolineHydrodesulphurizationUnit(CCGHDS)since2006.Thiseffortresultsinreductionofsulfurcontentinfuelsfrom350ppmtobelessthan50ppmorapproximately7timeslessthantheregularfuelsusedinThailand.Weareabletoproduce30millionlitersperdayofEURO4fuels.In other words, we were saving more than 250,000 metric tons of sulfur in 2011 that was supposed to be released into the atmosphere or equivalent to 2,500,000 rice sacks.
Tobeanearlybirdinthemarket,werespondedtothechangeinthelimitationoflevelofcarcinogeniccomponentscalledpoly-cyclicaromatics(PCAs)containedinconventionalrubberprocessingoil.ThaioilGroupinvestedabout800millionbathforraisingtheproductivityofTDAE,anenvironmentalfriendlyproduct.TheTDAEcontainsPCAsmerelybelow3%aslimitedbylawthroughoutEU.Rightnowwehavethecommercialscaleproductioncapacityof67,500tonsofTDAEperyear.
Green and Clean Products for Healthier Customers and a Better World
Thaioil believes that the buying pattern nowadays is gearing toward greener and cleaner products which wouldbe rapidly increasing in the future as the environmental and health impact becomes more evitable. Apart frominternationalstandardsandregulations,ourvoiceofcustomersisalsoincludedinnewproducttoimproveourproductqualityanddelivery,serviceandinnovatingnewproductstoserveThaimarket.
Overall Customer Satisfaction Score Against Target
Thecustomersatisfactionscorein2011was89%againstthetargetof85%.Theratingisincreasingforconsecutiveyearswhichweareexcitedtomaintainthetargetagainin2012.
Despite our comprehensive approach, the challenge remaining is holistic management of commercial activitiesthroughoutThaioilGroupforournewbusiness,i.e.solventandethanol.However,wehavestronginfrastructureanddedicatedteamsinbothcoreandnewbusinessestobethetotalcustomersolutionsofThaioilGroupby2015.Thiswillenableustomoveonintothenext50yearswhichnewchallengesinincreasingportfolioofspecialtyproductandcompetinginregionalarena.
Our Clean and Safe Products for the Better World
The First Story Of Thaioil’s Quest For Sustainability 65
Suppliers & Contractors
AtThaioil,wehaveconcreteinfrastructureforsuppliersandcontractorsmanagement.Ourapprovedvendorlistprocesswillscreenunqualifiedsuppliersandcontractorsfromourlistwhichthecriteriaonquality,environment,andhumanrightsare included.OurCSR insupplychain isanotherplatformtodemonstrateourpreferenceto conductbusinesswith responsibleorganizations.Wedevelopedoursupplychainstandardsbasedon interna-tionalrecognizedguidanceonsocialresponsibilityalongwithaguidelinetoimplementthestandards.ThephaseoneofCSR in supply chainwas focusingonhighpriority suppliers andcontractorswhilemore suppliers and contractorsareexpectedtobeincludedinthephasetwoofthisinitiative.
IneverybusinessmodelincludingThaioil’s,supplychainisanundeniableintegralpartofitwhichtheperformanceofsuppliersandcontractorsistranslatedintotheperformanceofThaioil.Thus,thestandardsforsuppliersandcontrac-torsthatincludesocialandenvironmentalcriteriahavetobesetandhavetobecheckedonaregularbasiswhichThaioil ultimately prefer to conduct businesswith organizations that have equal or higher standardson corporateresponsibility.EverysuppliersandcontractorsofThaioilhastobescreenedbyfillingtheVendorQuestionnairewhichincludesthetopicsonlaborrights,environmental,healthandsafetymanagementbeforeregisteredintotheApprovedVendor List (AVL) of Thaioil Group’s suppliers and contractors. Furthermore, considering we are capital andtechnological intensive industry,thus,child laborandforcedlaborarenotthe issues inoursupplychain.However,wewillnottoleranttheabusingoftheFundamentalPrinciplesandRightsatWorkinoursupplychain.
InadditiontotheAVL,ThaioilhasdevelopedthevoluntarystandardsonCorporateSocialResponsibilityforSuppliersand Contractors in 2010 which is in line with ISO 26000 Guidance on Social Responsibility and introduced thestandards to suppliers and contractors in Thaioil CSR in Supply Chain 2010 along with knowledge sharing onresponsiblesupplychain.Thereare7areasinthestandardsincludinggovernance,humanrights,laborpractices,theenvironment,fairoperatingpractice,consumerissuesandcommunitydevelopment.Inaddition,ThaioildevelopedtheguidelineforkeysuppliersandcontractorswhoseektoimplementtheStandards.
WeofficiallylaunchthephaseoneofourCSRinsupplychainin2010forour10highprioritysuppliersandcontractorsinoperationsandadministrativeareasasweintenttofocusondeliveringcomprehensiveprocesstoourkeysuppliersandcontractorsthosedefinedfromtheirpotential impactsfromtheirCSRperformancetoThaioiloperation.Duringtheyear,wehavevisitedourkeysuppliersandcontractorstohelpthemwiththeunderstandingoftheStandardsandovercomethebarrierforimplementation.WewillcarryonCSRinsupplychainintothephasetwowhichatleast25moresuppliersaregoingtojoinourinitiative.
Integrated CSR risk management in our supply chain for business sustainability
66 Thaioil 2011 Sustainability Report
OURCOMMUNITIESAND SOCIETYSTORY
The First Story Of Thaioil’s Quest For Sustainability 67
>70millions baht
thatweinvestedinThaioilGroupHealthandLearningCenter
HIGHLIGHTS FROM 2011
>50,000annual services transaction
intheThaioilGroupHealthandLearningCenter
>200Households
& 12benefitfromrenewableenergyandenergyefficiencyprojectsofThaioil
public servicesbuildings
68 Thaioil 2011 Sustainability Report
What We
DID IN 2011?
What We
PLAN TODOIN 2012?
Opened Community Madicine Center for Community around the Refinery
Contributed in Coral Breeding & Rehabilitation at Si Chang Island
Completed the Huay Poo Ling Pico-Hydro Power Plant Project
Initiated the Umphang Energy Sufficient City in Honor of His Majesty the King Project
: Carry on Building of Social, Physical, Mental and Intellectual Happiness in Communities
Around the Refinery
: Continue the Umphang Energy Town in Honor of His Majesty the King Project,
Coral Breeding & Rehabilitation and Ban Mae Cho Hydro-Power Plant Project
: New Projects of Biogas Production and Non-toxic Farming Project at Kho Mak Noi
The First Story Of Thaioil’s Quest For Sustainability 69
Corporate Social Responsibility (CSR) to build Thaioil Group Brand through Prevention of Impact to Communities and Establishing Sustainable Community Development Program at the National and Community levels.
AtThaioilGroup,ourCSRprincipleisbasedonthefivestrategiesof(i)Leverageour50yearexpertiseforenhancingthe Company’s CSR strategic to be benchmarked with international standard of sustainability, (ii) Build CSR alliancesand/orcreatingco-creationwiththe important institutesorbodiesthat influencesocieties, (iii)Reduceglobalwarming throughCleanDevelopmentMechanism (CDM), (iv)Emphasizeamore in-depthCSRactivities withthecommunities(V)Createandconsistentlypromoteemployeevolunteeringspirit.
ThaioilGroupconsidersournearbycommunitiesasneighborwhichwecommittopreventandmitigatepotentialimpact from our activities to the communities.We also emphasize inmaintaining quality, occupational health safety and environment standards. Environmental Impact Assessment (EIA) and public participation are the key approach to identify potential environmental impact, develop prevention and mitigation measures and communicatingwiththepotentialaffectedpartiestogetconcernsandmakeunderstanding.
70 Thaioil 2011 Sustainability Report
Impact Prevention and Community EngagementAtThaioilGroup,webelieve thecommunityacceptanceandengagement isoneof thekeysuccess factors forasustainablebusiness.Therefore,inconsiderationprocess,weincludesocialandenvironmentaltopicsintobothnewandexpansionprojectproposalchecklist.Iftheprojectcouldhaveimpactoncommunityorenvironment,themeasureisrequiredtoaddresstheriskwhichcouldbevoluntaryenvironmentalstudy,voluntarymitigationmeasuresorfullEIAaccordingtotheOfficeofNaturalResourcesandEnvironmentalPolicyandPlanning(ONEP)requirementsthatincludesBiodiversity,SocialandHealthImpactAssessment
ThaioilfullycomplieswithONEPGuidelineonStakeholdersParticipationinEIAwhichincludesstakeholderidentificationand engagement which at least 2 public consultations are required. The first public consultation is to receivestakeholderconcernsregardingtotheprojectdevelopmentandthesecondistoagreeontheproposedmitigationmeasuresoftheprojectandgaininformedconsent.ThestakeholderidentificationprocesshastobeinaccordancewiththeONEP’sguidelinewhichclassifystakeholderintosevengroupsincluding1.affectedpersons,2.EIAlicenseholders,3.ONEP,4.authorities,5.NGOs,6.mediaand7.publictoensureeffectiveparticipation.On-goinggrievancemechanismmanagedbyexternalparty(inotherwords,EIAlicenseholder)inconjunctionwithThaioilissetupduringtheEIAprocesstoprovideanotherchanneltoreceivecommunityconcerns.OncetheEIAisapproved,itsmitigationand monitoring measures would be included in the environmental management system (EMS) at site level andcommunicatetothenearbycommunities.
ThemitigationandmonitoringmeasuresareregularlytrackedinternallyandexternallybyEMSmechanismandtheexternalpartywhohasEIA license.Theenvironmentalmonitoringandauditreport ispreparedtwiceayearbyEIAlicenseholder and submit toONEP. Themonitoring criteria are includingmarinebiodiversity alongwith air, noise,emissions,effluence,seawaterqualityandoccupationalhealthandsafety.Environmentalfunctionofoperationsandgovernment relations function of corporate areworking together to select an EIA license holder and oversee thethird-partymonitoringandreportpreparation.
At ThaioilGroup,weconsider thenearby community asour neighbors and friends. In Thai culture, neighbors meanmorethanapersonwholivesnearbywhichneighborsarelookingaftereachotherandgivinghandswhensomeone is in trouble.Theaforementioneddefinition is imprinted intoall our staffsespecially inourdedicated communityaffairs function.Eachcommunityaffairstaffhasadesignatedcommunity tobuild relationshipsand engagement.WealsohavetheCommitteeonEnvironmentandCommunityRelationsatSrirachaareatooverseemanagementofpotentialcommunityimpacts.Thiscommitteecomprisesofrepresentativesfromrelatedfunction,forexampleenvironment,communityaffairs,operationstoensureinvolvementofrelevantfunctions.ThaioilalsohasthePrincipleofTripartiteasknownasAoUdomModelwhichistheinnovationfromourlongexperienceinworking with the communities and local administrations. The model is the regular meeting between Thaioil, communitiesand localadministrationstoexchange ideaandfindingsolutionsfor thematters inrelevanttothearea.
Nearby Communities are our Neighbors
The First Story Of Thaioil’s Quest For Sustainability 71
Community Engagement and Development
Thereare11communitiesinwhichwehaveintensiveengagementprogramincludingknock-doorvisit,communityleadermeetingandcommunitydevelopmentprogram.Inaddition,weprovidethosecommunities’memberswithmobilephonenumberofourcommunityaffairsofficersasachannelforgrievanceorcommunication.Foralternative,weprovideacallcenternumberattherefinerytocommunitiestoreceivegrievanceorconcerns.Thecallcenterwillrecord thegrievance intoourwebportalname“Opportunity for ImprovementSystemorOFI-onlinesystem” to investigateandtrackthegrievance.Ifthepersonisnotsatisfied,theycouldfilegrievancetothecommunityleadersorthelocaladministration.
In addition, to understand the whole range of stakeholders in the communities, we have engagedwith local networksintheareaincludingTeacherNetwork,CommunityNetwork,YouthNetwork,CivilBoyScoutNetworkandHealthVolunteerNetworktouseasour input forcontinuous improvementand identificationofcommunity developmentprogram.
Tripartite Development Model (Ao Udom model)
Non-Governmental Oragnization/ Project Cooperation Agreement
Educations Learning Knowledge
Self Experience & ExperimentationCommunity Knowledge
Ao Udom Hospital Health Knowledge
SD : Society: Economy: Environment
Thaioilbelieves that thecommunitydevelopment isnotlimitedtoonlyeconomicalprosperity.Ontheotherhand,strongandsustainedcommunityhastobebuiltonhealthycommunityintermofphysicalandculture.Therefore,Thaioilstructurescommunitydevelopmentprogramaroundthefourprinciplesofhappiness,namelysocial,physical,mentalandintellectualhappiness.Feedbacksfromcommunitiesandlocalnetworksareanalyzedandusedfordevelopmentofthecommunitydevelopmentprogramthatmeetstheactualdevelopmentneedsinthefourareasofhappinessof the communities nearby. In addition, we involvecommunities, localadministrations for theplanningandtheexecutionofourprograms.Ultimately, themean tosustaincommunitydevelopmentprogramistoincludetheprogramintothecommunitydevelopmentprogramofthegovernment.In2011,ourkeycommunityachievements
beyonddonations,participationinlocalcommunityeventareprovidedasfollowingtopics.
Health Promotion
Thaioil focuses on good physical and metal stage ofcitizen,whichwebelievetheyarethekeyforhappinessin life.Therefore,we invest inThaioilGroupHealthandLearning Center for communities as an approach topursuit holistic health development for both physicallyandmentallyofourcommunities.Inaddition,Thaioilhasaplaninplacetoconstruct“the50thAnniversaryThaioilgroup Emergency Building” for Ao Udom Hospital inregardto50yearsanniversaryofThaioilin2012tohelpthehospitalincreasingitscapacity.
72 Thaioil 2011 Sustainability Report
Environmental ConservationApart from environmental management in compliance with regulations and innovation of cleanerproducts,Thaioilalsocontributestotheenvironmentalconservationandbiodiversityenhancementviasupportingtheprojectofauthorityandotherorganizationsincluding
Thaioil Group Health and Learning Center
TheHealthandLearningCenterprovidesservicesintheconceptof“CommunityandPreventiveMedicine”underthecoordination with Laem Chabang Sub-district Administration, Ao Udom Hospital and community committeesnearby.Thesepartieshavebeeninvolvedsincethebeginningofthisinitiativeandagreedontheconstructionofthecentertoprovidevarietiesofhealthservicesforpeopleatanyageswhoaresurroundingtherefineryandalsoprovide“Mobilehealthunitproject”whichisatravelcontinuallyhealthservice.Therefore,Thaioilcontributesmorethan70millionbahtfortheconstructionofthebuildingandutilitiesonthe2.4acrelandclosetothecommunities.Theserviceprovidedatthecenterinclude
Dentalandproactivehealthcare;
Communitymedicinetodevelopcommunity healthdatabaseincorporatewithLaemChabang Sub-districtAdministrationandAoUdomHospital;
Publiclibrary;
Multipurposeareaforcommunities;
Activityareatopromotegoodhealth;
Buddhisthall;and
Communityemergencycenter.
Thecenterprovidesfreeaccessibleservicestothe11communitiesformorethan20,000personslivingadjacenttotherefinery.Thisisourtruewillingtoreturnsomethingbackforourgoodneighborswholiveside-by-sideforfivedecades.During2011,Thaioilorganizesotherhealthpromotionactivitiesnamelyaerobicdance,physical test,hula-hoopexercise,religionceremonyandcommunitydialoguebetweencommunityleadersoncommunitydevelopment.
Coral Breeding & Rehabilitation :
ThecooperationprojectwiththeDepartmentofMarineandCoastalResourcesandtheAquaticResourcesResearchInstitute,ChulalongkornUniversitytorestorecoralreefatKohSiChang,ChonburiProvincetoenhanceecologicalvalueoftheGulfofThailand
Garbage Free Community:
TheprojectisthecooperationbetweenLaemChabangSubdistrictAdministrationandcommunitiesintheareatohaveapilotprojectatBanAoUdomCommunitywiththepurposeofimprovinggarbagemanagementandlandscapeinthearea.
Educational trip:
Thaioilarrangedaneducationaltripforcommunityleadersandschooldirectorsintheareatohelpthesepeoplegainsomeknowledgeandideatodeveloptheircommunities.Theprogramincluded
: Zero-wastemanagementat AcademicResourcesCenter, KasetsartUniversityinKrabi Province
: SufficiencyEconomyModel atBanKhoKlang
The First Story Of Thaioil’s Quest For Sustainability 73
Education Support
Thaioilconsidersknowledge isthefoundationofeducationaldevelopment.Therefore,childandyoutheducation isincludedinthecommunitydevelopmentprogram,including
Social Investment for the Sustainable Future
Thaioilsocialinvestmentapproachistocontributeforthesustainabledevelopmentofthelargersociety.Weidentifyourexperienceandexpertiseaccumulatedafter50yearsinanenergybusinessasourstrengthtodeveloprenewableenergyprojectsforromoteareasinthailand.Theprojectsemphasizeonapplyingnaturalenergyresourcesinsteadofwastingthem.Thisconcepthelpstoenhancetheeffectivenessofresourcemanagementandincreasethestandardoflivingofthecommunitiesonasufficiencybasis.
Building partnership with recognized institutes such as the Department of Alternative Energy Development andEfficiency(DEDE),theEnergyforEnvironmentFoundation(EforE)andtheUnitedNationsDevelopmentProgramme(UNDP),isoneofourapproachestodevelopCSRprojects.Togetherwithourpartnerships,werecentlysucceedindevelopmentofsomerenewableenergyprojectswhichinclude
understandinginsymbiosisbetweenanimals,plantsandhumantothecommunities.
: DonationforHRHPrincess MahaChakri'sFundunder thepatronageofHRHPrincess MahaChakriSirindhorn'ssince 1991foranylevelofeducation withinThailandoroversea.
: ThaioilEducationFundforstudents andcollegestudentsinLaem ChabangSub-districtwhichthe numberofscholarshiphasbeen increasingfrom126to162in 2011tocover22communities inLaemChabangarea.
: ThaiOilPublicCompanyLimited FundinMemorialofDr.Pramote Chaivet(incorporationwiththe EngineeringInstituteofThailand) todevelophighprofilechemical engineerinmasterdegreesince 1997.
: ThaiOilPublicCompanyLimited ScholarshipinAnandaMahidol Foundationwhichhasbeen establishedin2005foranylevel ofeducationwithinThailandor oversea.
: EducationandEthicforYouth LeaderBuildingProjecttoprovide scholarshipforpoorstudents insevencommunitiesaround therefinerytoattendKasetsart University,SrirachaCampus.
: CooperationProjectwith Universities,forexample,Master DegreeonChemicalEngineering (ChEPS)oftheKingMongkut's UniversityofTechnologyThonburi since1997.
Youth Scientific Camp for Environmental Conservation:
Theannualprojectaimstodevelopknowledgeandawarenessinenvironmentalconservationforyouth.
Biodiversity Survey at Phubai Hill:
TheprojectisintenttoenhanceecologicalandbiologicalknowledgeintheareaofPhubaihill.Thisknowledgebringsthebetter
74 Thaioil 2011 Sustainability Report
Project to improve the efficiency of the stove modification of tea leaves steaming:
Miang (preserved tea leaves) requires thesteamingprocess inpreparation.However, the regular process consumes large amount of energy fromfirewoodduetolowefficiencyofthestove.Therefore,Thaioil inconjunctionwithEforEand the InstituteofEnergyResearchandDevelopment,ChiangMaiUniversityhavebeenconductedamethodtoimproveenergyefficiencyofthestove.ThepilotprojectwasconductedatBanPaMiangVillage,LampangProvinceforthe132householdswhichthemainincomewasfromproducingandsellingsteamedtealeaves.TheprojectstaffsincludingThaioilvolunteershelpthevillagerstoincreasethesurfaceofthestove’sheatingexchangeformore than400%andheightening thestackas resulted in the reductionofenergyusagefor60%offuel.Atthepresent,over100householdsareusingenergyefficientstovestoreduceforestencroachmentandsaveover7,140treeswhiledecreasingcarbondioxideemissionby15,000tonsayear.
Biogas from animal farm project:
Thaioil and EforE also developed biogas from pig farms at Ban Nares,Amphoe Don Chedi, Suphan Buri Province, to produce the biogas in a100-cubic-meterfixed-domepitfilledwithpigmanure.Theproject installedthemainpipesystemalongvillageroadstodistributebiogasto23households.Thisway,BanNaresvillagerscansavetheirfuelexpensesbyusingthebiogasforreplacingLPG.Theprojectalsoreducesunpleasantsights,odors,unhygienicenvironmentanddisease-spreadinginsects,aswellasglobalwarming.
To ensure the holistic management approach by the communities for thecommunitiesandcontinuousdevelopment, theprojectcommittee issetupfromcommunityrepresentative,stockfarmerandlocaladministration.Initially,theprojectmembershavetomake300bahtentryfeeand50bahtpermonthfortheconstructionandmaintenanceofthebiogaspipeline.
Pico-Hydro Power projects:
Huay Poo Ling, a remote village of Chiang Mai Province located in themountainousareawhereaccessibilityofelectricitywaslimitedbutrichinnaturalhydro power. Therefore, Thaioil, in partnership with EforE and the UnitedNations Development Programme (UNDP) have initiated the project called“HuayPooLingPico-HydroPowerPlantProject”whichPicoderivefromtheItalianpiccolo,meaningsmall.However,sizeisnoteverythingespeciallyforthe 99 households from2 villages atHuayPoo Ling.A cross-flow turbineelectricgeneratorcapableofproducing22kWelectricitymakesdifferencesinthequalityof life forvillagersbyproviding lightingandaccessible tomediaincludingenlighteningopportunityforchildrentobeeducatedthroughsatellitelearning.VillagersandthelocaladministrationhavebeeninvolvingsincethedesignoftheprojectandsetupateamtooverseethemachinemaintenanceandothermanagementwhichtheDepartmentofNationalParks,WildlifeandPlant Conservation (DNP) and the Department of Alternative EnergyDevelopment and Efficiency (DEDE) were in the advisory role. In addition,Thaioil also provided school building with computer and distance learningsystemfor theschool inHuayPooLingtogiveopportunity forstudents tohaveequaleducationasstudentsinacity.
TheprojectwasjustanexampleofhowThaioilengagesinthedevelopmentofcommunitiesinthecountry.Ourotherhydropowerplantsinclude7.5kWgenerator at Champathong Temple, Phayao Province; 3 kW generator atBannPean,ChiangMaiProvince;and3kWgeneratoratHighlandAgriculturalResearchCenterandthe4thRangerRegiment,KampaengpethProvince.
The First Story Of Thaioil’s Quest For Sustainability 75
2011 Flood Crisis and Thaioil Corporate Citizenship2011floodcrisis inThailandwokeupeveryparty to reviewand revise their crisispreparationand responseplan.Asweconsiderourselvesascorporatecitizenshipofacountrywhereweoperate,Thaioilalongwithourvolunteeringemployeesactively involved in theset-upandmanaging the flood relief centeratAdisornMilitaryCamp,SaraburiProvincealongwithothercompaniesinPTTGroup.
Thaioilalsodonatedintermoffinancialandprobonoincludingdieselfuel,boats,survivalbags,sandbags,lifejacketsandwaterpumpsdirectlytothefloodvictimsorthroughgovernmentagencies,accountingformorethan35millionbaht. In addition, our employees made significant contribution for flood victims by visiting and encouragingthem tofight thefloods in theProvinceofTak,Saraburi,PhraNakhonSiAyutthaya,LopBuri,PathumThaniandNonthaburi.OuremployeesalsodecidednottoorganizeThaioilGroupsportdayasplannedbuttochangeitintofundraising campaign for flood victims to “Thaioil Group Charity Day”, which the Company top up the value of theemployeedonationforthetotalcontributionabout2.4millionbaht.
Umphang Energy Town in Honor of HM the King Project
UmphangDistrictinTakProvinceistheareathatispossessedwithhighpotentialforrenewableenergydevelopmentincludinghydro,biomass,biogasandsolarpower.Therefore,Thaioilandourpartner,EforEhave selected theSub-district namedMaeChanofUmphangDistrictinTakProvincetobethefirstpilotareaundertheumbrellaoftheprojectcalled“UmphangEnergyTowninHonorofHMtheKing”tocelebrateontheauspiciousoccasionofthe7thCycle (84th) of His Majesty the King’s BirthdayAnniversaryonthe5December2011.Weplantodevelophydropowerplant,biomasspowerplant,biogas system and solar power for this initiative.Weambitiouslyhopethat“UmphangEnergyTown”willbeaprototypeprojectforthe implementationofsufficienteconomyforthedevelopmentofcom-munities in the remote area where renewableenergyisthekeyenable.Thaioilexpectstobeableto communicate the progress and benefit to thecommunitiesin2012.
76 Thaioil 2011 Sustainability Report
Totalrevenues millionbaht 401,400 287,393 324,352 448,773
EBITDA millionbaht 7,949 21,393 17,381 28,760
Netprofit millionbaht 224 12,062 8,956 14,853
Earningspershare bahtpershare 0.11 5.91 4.39 7.28
Returnonequity % 0.3 17.8 12.2 18.5
Returnonassets % 0.2 8.9 6.3 9.8
Significantfinancialassistance millionbaht 1,076 1,175 1,367 1,722
receivedfromgovernment
Marketcapitalization millionbaht 47,737 87,211 159,632 119,342
Summary of Our Performance
EconomicPerformance
EnvironmentalPerformance
SocialPerformance
Performance Unit 2008 2009 2010(1) 2011
Totalproductions millionton 14.09 16.03 13.97 16.17
Waterwithdrawal millioncu.m 9.36 8.52 9.28 9.10
Waterrecycle millioncu.m 0.60 0.61 0.66 0.70
% 6.50 7.20 7.10 7.70
Treatedwastewaterdischarged millioncu.m 4.04 4.20 4.25 4.09
CODdischarged ton 230.02 204.73 189.63 180.39
Hazardouswastegeneration thousandton 5.00 5.78 3.89 5.55
Non-hazardouswastegeneration thousandton 1.37 0.46 1.20 0.96
VolatileOrganicCompounds(VOC) thousandton 12.93 12.85 12.99 12.97
emissions
NOxemissions thousandton 3.60 3.50 2.87 3.02
SOxemissions thousandton 10.52 8.79 6.27 8.22
Methaneemissions thousandton 8.09 8.10 8.10 8.10
TotalEmployees persons 858 872 877 840
Employees-Female persons 157 171 181 173
Employees-Male persons 701 701 696 667
EmployeesinBangkok persons 87 100 103 93
EmployeesinSriracha persons 771 772 774 747
Employeeover50yearsold persons 144 171 127 126
Employee30-50yearsold persons 561 566 565 559
Employeebelow30yearsold persons 153 135 185 155
Employeesatisfaction scorefrom5 4.16 4.11 4.27 4.21
Lost-timeinjuriesfrequency(LTIF)- permillion 0 0.39 0 0.14
Contractors workinghour
Lost-timeinjuriesfrequency(LTIF)- permillion 0 0 0 0
Employees workinghour
Fatalities persons 0 0 0 0
(1)ThaioilGroupadoptedThaiAccountingStandards(TAS)no.19,re:EmployeeBenefitsretrospectively.(2)ThedatareportedisonlyforThaioil.
The First Story Of Thaioil’s Quest For Sustainability 77
Our Prizes
Recognition in 2011Date Received Awards Awarding Organization
March Prime-minister’sThailandQualityClassAward ThailandProductivityInstitute
inlinewithBaldrigeperformanceexcellenceprogram
August ThailandEnergyAwards DepartmentofAlternativeEnergy
• Outstandingoff-gridrenewableenergyproject DevelopmentandEfficiency
• Outstandingenergyconservationforindustrialplant
September CSR-DIWAward DepartmentofIndustrialWorks
September CSR-DIWContinuousAward DepartmentofIndustrialWorks
December SETAwards2011 TheStockExchangeofThailand
• Outstandinginvestorrelations
• Outstandingcorporatesocialresponsibility
December BestOil&GasRefiningCompanyinAsia WorldFinanceMagazine
December BestOilandGasCleanEnergyCompanyinAsia WorldFinanceMagazine
Membership in Associations
Associations YearofMembership
PetroleumInstituteofThailand 1987
ThailandBusinessCouncilforSustainableDevelopment 2006
78 Thaioil 2011 Sustainability Report
GRI Index Table
Profile Disclosures
1 Strategy and Analysis
1.1 Statementfromthemostseniordecision-makeroftheorganization 14,15
1.2 Descriptionofkeyimpacts,risks,andopportunities 18,19,20
2 Organizational Profile
2.1 Nameoftheorganization 8
2.2 Primarybrands,products,and/orservices 13
2.3 Operationalstructureoftheorganization 12
2.4 Locationoforganization'sheadquarters 8
2.5 Numberofcountrieswheretheorganizationoperates,andnamesofcountries 12
2.6 Natureofownershipandlegalform 8
2.7 Marketsserved 12,13
2.8 Scaleofthereportingorganization 10,11,76
2.9 Significantchangesduringthereportingperiodregardingsize,structure,orownership 5
2.10 Awardsreceivedinthereportingperiod 77
3 Report Parameters
3.1 Reportingperiod 2
3.2 Dateofmostrecentpreviousreport -
3.3 Reportingcycle Annual
3.4 Contact 3
3.5 Processfordefiningreportcontent 3
3.6 Boundaryofthereport 2
3.7 Limitationsonthescopeorboundaryofthereport 2
3.8 Basisforreportingonotherentitiesthatcouldaffectcomparability 2
3.9 Datameasurementtechniquesandthebasesofcalculations. 2
3.10 Explanationoftheeffectofanyrestatementsofinformation -
3.11 Significantchangesfrompreviousreportingperiodsinthescope,
boundaryormeasurementmethodsappliedinthereport -
3.12 GRIcontentindex 78
3.13 Policyandcurrentpracticewithregardtoseekingexternalassuranceforthereport. 2
4 Governance, Commitments and Engagement
4.1 GovernanceStructure 28
4.2 Whetherthechairoftheboardofdirectorsisalsoanexecutiveofficer 28
4.3 Percentageoftheboardofdirectorsthatareindependent,non-executivedirectors 28
4.4 Mechanismsforshareholdersandemployeestoproviderecommendations
ordirectiontotheboardofdirectors 21
4.5 Linkagebetweencompensationformembersofthehighestgovernancebody,
seniormanagers,andexecutives 29
4.6 Processesinplaceforthehighestgovernancebodytoensureconflicts
ofinterestareavoided. 32,33
4.7 Processfordeterminingthequalificationsandexpertiseofthemembers
ofthehighestgovernancebodyforguidingtheorganization'sstrategy 28
4.8 Internallydevelopedstatementsofmissionorvalues,codesofconductandprinciples
relevanttoeconomic,environmentalandsocialperformanceandthestatus
oftheirimplementation 7,8,32
4.9 Proceduresofthehighestgovernancebodyforoverseeingtheorganization's
identificationandmanagementofeconomic,environmental,andsocialperformance 20
4.10 Processesforevaluatingthehighestgovernancebody'sownperformance 29
4.11 Precautionaryapproach 30,31
GRI Indicators Pages Note
Firsttime
Firsttime
Firsttime
The First Story Of Thaioil’s Quest For Sustainability 79
4.12 Agreements,principles,orexternalinitiativesoneconomic,environmentalandsocialaspects 27,39
4.13 Membershipsinassociationsandnational/internationaladvocacyorganizations 77
4.14 Listofstakeholdergroupsengagedbytheorganization. 21
4.15 Thebasisforidentifyingandselectingstakeholderswithwhomtoengage 20
4.16 Approachestostakeholderengagement 21
4.17 Keytopicsandconcernsthathavebeenraisedthroughstakeholderengagement 21
Economic Performance
DisclosureonManagementApproachtoEconomicPerformance 30,56,70,71
EC1 Directeconomicvaluegeneratedanddistributed 10,11,76
EC2 Implicationsofclimatechange 47,48
EC4 Significantfinancialassistancereceivedfromgovernment 76
EC5 Standardentrylevelwagecomparedtolocalminimumwage 56
EC8 Infrastructureinvestmentsandservicesforpublicbenefit 67
Environmental Performance
39,41,42,43,
DisclosureonManagementApproachtoEnvironmentalPerformance 46,48,64,70
EN5 Initiativestoreduceenergyconsumption 46,47
EN8,EN10 Waterwithdrawalandrecycledandreused 41
EN12,EN14 Biodiversity 71
EN16,
EN18,EN20 Significantairemissionsandinitiativestoreducethem 43,45,46,47
EN21 Totalwaterdischargebyqualityanddestination 41
EN22,EN23 WasteandHazardousWaste,includingsignificantspills 42,43
EN26 Initiativestomitigateenvironmentalimpactsofproductsandservices 64
EN28 Environmentalfinesandsanctions 43
Labor Practices and Decent work
49,53,
DisclosureonManagementApproachtoLaborPracticesandDecentWork 54,55,57
LA1-LA3 Employment 54,56,76
LA4 Labor/managementrelations 57
LA6,LA7 Occupationalhealthandsafety 49
LA10-LA12 Trainingandeducation 55
LA14 Diversityandequalopportunity 57
Human Rights
DisclosureonManagementApproachtoHumanRights 32,33,34,70
HR2 Procurementpractices 65
HR4-HR7 Managinghumanrightsriskinoperations 34,57
Society
DisclosureonManagementApproachtoSociety 32,33,34,70
SO1 Impactsofoperationsoncommunities 70,71
SO2-SO4 Managingrisksrelatedtocorruption 32,33
SO6 Politicalcontributions 32
SO7 Legalactionsforanti-competitivebehavior,anti-trust,
andmonopolypracticesandtheiroutcomes 34
SO8 Significantfinesandnon-compliancewithlawsandregulations 34
Product Responsibility
DisclosureonManagementApproachtoProductResponsibility 32,33,64
PR2 Customerhealthandsafety 34
PR4,PR5 Productandservicelabeling 34,57
PR6-PR7 Marketingandcommunications 32,34
PR8 Customerprivacyandlossesofcustomerdata 63
PR9 Non-compliancewithlawsandregulationsconcerningproductsandservices 34
GRI Indicators Pages Note
Noneofouroperationprocessariskofviolationoffreedomofassociationandcollectivebargainingandusingofchildandforcedlabors
Thaioilnotallowedtomakepoliticalcontribution
80 Thaioil 2011 Sustainability Report
Survey of Readers’ Opinions
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EnvironmentandGovernmentPromotionDepartmentThaiOilPublicCompanyLimited555/1EnergyComplexBuildingA,11thFloorVibhavadiRangsitRoad,Chatuchak,Chatuchak,Bangkok10900,ThailandFax+66(0)[email protected]
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