Corporate - Environment, health, safety and risk management
2006 was a year of consolidation and preparation. After a series of year on year improvements in safety, as measured by Lost Time Injury Frequency Rates (LTIFR), our performance plateaued. The 2006 LTIFR was 4.3 compared with 4.1 for 2005. There were also a higher number of motor vehicle and tanker truck accidents than the previous year. Despite these disappointing results, there were solid gains in our organisational capability in risk which will equip us to break through the plateau and continue the downward trend in incidents.
In 2006, a stronger focus on risk, reputation and sustainability was established across Caltex. In particular we implemented a newly developed enterprise wide risk management framework (RMF) and adopted an Operational Excellence Management System.
The RMF has improved and expanded the identification, reporting and management of risk across the Caltex business. To the existing focus on health, safety, environment and finance have been added areas ranging from operations, competition and reputation to asset integrity, fraud, systems and authorisation. This has provided the opportunity for clearer oversight of risk by Caltex directors and management.
Although we have traditionally reported our safety performance in terms of the LTIFR, it is increasingly becoming evident that this is only a partial, but important, indicator of safety performance. To address risk more systematically, we have adopted the Chevron developed Operational Excellence Management System (OEMS). Implementing OEMS enables us to take a more systematic approach to EHS risks and is an essential precursor to getting further and sustained improvement in our EHS performance.
We have also continued to develop our existing tools, such as the Loss Prevention System (LPS). A DVD version of LPS was deployed to all Caltex supervisors in 2006. This is a training tool to refresh supervisor knowledge and assist in improving the quality and effectiveness of incident investigations and job hazard assessments and other aspects of LPS.
Caltex achieved a bronze award in the 2005 Australian Corporate Responsibility Index (CRI) in its first year participating in the survey. The index assesses the extent to which corporate strategy is integrated into responsible business practice throughout an organisation.
The risk management framework, OEMS and CRI have provided Caltex with improved means of identifying gaps, improving and managing performance in environment, health, safety, risk reputation and sustainability.
Across Caltex, more than 90% of employee respondents said they were optimistic about the future of the company.