Sustainability report 2009

We believe that by looking after our employees, we will encourage them to look after themselves and others affected by their activities, so that we strengthen our reputation as a trusted employer and supplier of high-quality, safe services to our customers. Only by setting the highest standards for ourselves will we be able to retain the trust of our customers and the people using our infrastructure.

Exemplary safety performance is a pre-requisite in many of the markets we operate in. Indeed, our industry-leading safety performance helps differentiate our offering and maintains our licence to operate – particularly for customers with a similar focus on safety excellence.

We have always set ourselves high standards in safety, but in October 2008 Balfour Beatty went further still, committing to reach Zero Harm across all of our businesses by 2012.

We believe that this vision is one of the most challenging ever declared by a major infrastructure group. Continuing to build a sustainable business will depend on reaching it.

By 2012 our goals are:

• Zero deaths
• Zero injuries to members of the public
• Zero permanently-disabling injuries

During our Zero Harm journey, we have mobilised an incredible shared fund of knowledge, creativity and the determination to succeed and lead our sector in eliminating the risk of serious harm across our operations.

Our businesses are collectively focusing their efforts on six key principles to turn our vision into reality:

Leading	Every leader commits to Zero Harm and inspires their people to make it their personal priority
Simplifying	We make sure our systems and processes help people do this, not get in the way
Re-thinking	We look at what we do with ‘fresh eyes’, challenge the status quo, and re-engineer how we do it to eliminate the risks
Involving	We engage everyone who works for us to make safety personal, contributing to Zero Harm through all that they do
Learning	We seek out and share what works well, adapt it for our own environment then make it what we do
Tracking	We identify where we can improve, how to close the gap and when we have achieved success.

Download our Zero Harm brochure

Capturing the imagination of our people

Zero Harm has fired the collective imagination of our businesses and the people that work within them.

We have made significant progress in the first full year of our Zero Harm journey:

• Developed detailed zero harm implementation plans within each business
• Identified the key fatal risks in each business
• Engaged our people, sub-contractors, suppliers and customers (our ‘Village’) to explore how we can deliver Zero Harm together
• Shared 70 case studies and other examples of best practice across our busines
• Conducted over 25 detailed reviews of best practice at exemplar work sites in each business (deep dives) to examine how far Zero Harm had penetrated across our business
• Held a number of Zero Harm summits with our senior management
• Engaged the Board on Zero Harm, spending a full day reviewing progress

Key Risks

Zero Harm has prompted a thorough re-thinking of our key health and safety risks in the business. Detailed analysis of 2009 actual and potential fatal incidents identified five key risks:

• Road traffic accidents
• Falling objects
• Working at height
• Electricity, and
• Utilities service strikes

Our businesses are addressing these key risks, and others specific to their activities, in their Zero Harm journey plans.

Our Safety Management Framework

Balfour Beatty has an established and comprehensive safety management framework which underpins and supports Zero Harm:

• Group policy and formal management expectations
• Safety management systems, certified to OHASA 18001 or equivalent
• Comprehensive audit programme conducted by DNV and ERM against the Balfour Beatty Group Audit Protocol (BBGAP). Following a successful pilot, BBGAP was rolled-out across all US businesses in 2009 with a total of 15 audits completed during the year. Corrective actions are focusing on a number of areas including occupational health surveillance, equipment testing, waste management and pollution prevention
• Regular communications and sharing of good practice through newsletters, the SHE portal (intranet), conferences and other events
• Senior management health and safety forums to review performance

Embedding Zero Harm

We encourage all employees to Make Safety Personal and have engaged our supply chain to innovate and redesign equipment, tasks and safe systems of work, so that hazards are recognised and safety risks are removed or reduced to the lowest possible levels.

“We succeeded in removing three employees from potential fatal or disabling risk, through the realisation of a concept developed by the team, including shop floor workers, to engineer out the risk.”

Bob Laird, Head of Cast Manganese Products, EMT, South Queensferry, Scotland

We have maintained close links with suppliers of plant and equipment who support our Zero Harm objectives. For example, one UK supplier of mobile elevated working platforms (MEWPs) has integrated an operator crush-protection system (SiOPS) into its medium/large reach equipment. We have sent information to all businesses supporting the use of these MEWPs across our operations.

Tracking

We track three key indicators of safety performance:

• The number of fatalities
• The number of permanently disabling injuries (preventing a person returning to their normal duties on a permanent basis)
• The Accident Frequency Rate (AFR) i.e. the number of reportable (major and over three-day) accidents per 100,000 hours worked

Our data covers all workers on our project sites (both our own employees and sub-contractors) in our businesses and joint ventures where we have operational control. US sub-contractor data is not reported as this is not common practice to provide this information.

Progress against targets

Our target is zero deaths. Tragically in 2009, there were two fatal accidents on our work sites (one in US and the other in Hong Kong) and one fatal accident while driving on the public highway in the UK (eight fatalities in 2008). Three fatalities are still three too many and prompt us to re-energise our efforts on eliminating fatal risks. All fatalities are subject to full investigation and review involving senior management, resulting in comprehensive action plans to prevent reoccurrence.

There were three permanently disabling injuries in 2009, an improvement compared to the six reported in 2008 but still a significant concern.

156 injuries to the public were reported in 2009 (178 in 2008, restated), of which 92% were of a minor nature.

Our AFR in 2009 was 0.17 for the Group, a 15% reduction on the previous year (0.2 in 2008) and a reduction of 70% since 2002. Our target was that no business would exceed an AFR of 0.2 in 2009. Fourteen businesses, around half of our total, achieved this goal in 2009. In addition, all four joint venture businesses achieved this in 2009.

Chart data

Occupational health

In 2009, 6,721 employees worldwide received occupational health screening (8,627 in 2008). Of these 14% were referred for further medical examination (5% in 2008). We collected data for the first time in 2009 on the incidence of silicosis across our business. No cases were reported.

Benchmarking

In many regions, we continued to perform better than industry benchmarks for accident frequency rates. For example, Gammon Construction recorded an incident rate per 1,000 workers of 6.2 in 2009 (slightly up from 5.9 in 2008), which is 90% (91% in 2008) better than the Hong Kong construction industry average of 61.4 (source: Construction Industry, Labour Department).

In Italy, compared to the equivalent INAIL/ISTAT reportable incident rate for industry per 1,000 workers of 52.8 in 2008 (2009 data not yet available), in 2009 our Italian rail business had a reportable incident rate of 7.69 - a performance 85% better than the national industry average.

All our US businesses fared significantly better than the most onerous industry averages in both total recordable and also lost time injury rates, with the exception of Balfour Beatty Rail Inc. for which recordable injury rate was, at 4.12, slightly higher than the BLS Building Construction rate of 4.0.

Balfour Beatty US businesses	Total recordable injury rate	Lost time rate
Balfour Beatty Infrastructure Inc.	2.56	0.47
Balfour Beatty Rail Inc.	4.12	1.37
Heery	0.62	0.12
Balfour Beatty Construction	0.71	0.06
US Benchmark Data for 2008
OSHA Construction 2008	4.7	1.7
Heavy and Civil Engineering Construction 2008	4.2	1.4
Construction of Buildings 2008	4.0	1.5

Rate of injuries for US Construction Sector vs. Balfour Beatty US businesses

(2008 data published by US Bureau of Labor Statistics in October 2009)

Fines and convictions

Balfour Beatty operating companies were convicted and fined in 2009 for health and safety offences:

• The UK civil engineering business was fined £50,000 for a fatal accident to a sub-contractor in 2003
• Our local authorities business, now Balfour Beatty WorkPlace, was fined £15,000 for an incident in 2006 (known then as Balfour Beatty Infrastructure Services)
• Mansell pleaded guilty to two separate incidents that occurred in 2005 and 2006 (former Birse and Dean & Dyball businesses) and were fined a total of £35,000
• Balfour Beatty Utility Solutions was fined AUS$800 by Queensland H&S Inspectorate in Australia in respect of a Prohibition Notice issued due to the position of an emergency stop button and inadequate guarding
• Gammon Construction was fined HK$30,000 for a number of minor safety offences

	2009	2008	2007	2006
UK	£ 100,000	£200,000	£260,747	£100,000
Continental Europe	0	£4,930	0	0
North America	pending	US$7,900	0	US$12,660
Rest of World	AUS$800 HK$30,000	£7,500	0	Dhs 3,000 HK$ 38,000

Our priorities for the year ahead are:

• Continue to refresh and strengthen our Zero Harm journey plans, eliminating fatal risks and life-changing injuries and engaging with our key stakeholders to enable this across the business
• Continue to learn from each other, share and replicate good practice
• Roll-out a new safety leadership programme, to support all our senior managers (approximately 400) in rethinking their roles as leaders in the context of the challenge of achieving and sustaining Zero Harm

We want our safety leadership programme to set an industry benchmark by offering a completely different development experience – one that we hope we will become an important "rite of passage" for all leaders across Balfour Beatty.

During the second half of 2010 we will introduce a new approach, called Zero-In, to establish a clear and accurate idea of further workstreams required to make sure our 2012 goals are reached. This will involve a comprehensive assessment of what further action needs to be taken in each business to close outstanding gaps and embed a sustainable approach to achieving Zero Harm into everything we do.