Corporate governance, risk management and compliance are key areas in which we measure our performance.

Achieving full regulatory compliance
 

We aim to achieve full regulatory compliance and ensure that all our contractors do so too. Accordingly, we provide information about any regulatory non-compliance that may have resulted from our operations during the reporting period.

Regulatory Compliance:
 

This year 100% of our projects achieved full regulatory compliance with the Protection of the Environment Operations Act 1997 and other environmental, occupational health and safety, and planning legislation.

Environmental Audits:
 

There were 17 civil and builder environmental audits conducted on 67% (12 of a possible 18) of projects in progress during the year. The indicator target to achieve a minimum score of 75% on all environmental audits result is calculated by the sum of the builder and civil audit results, and the result is 88% this year. Of the eight civil works audits (73% of total civil works contracts), all contractors achieved a score greater than 75%. The remaining 27% of civil contracts that did not receive an audit is mostly attributable to the short-term nature or lesser value contracts let (less than $250,000)27. Nine audits were conducted with builders and 78% of the builders scored above 75%, including one who scored an impressive 100%. As in previous years, we continue to work with builders to improve and maintain these results.

Occupation, Health and Safety (OH & S) Project Audits:

From July 2008 we implemented an occupational health and safety (OH & S) audit system which requires most civil or landscaping contractors to obtain audits directly. From that point they became directly responsible for compliance and continuous improvement.

Landcom maintains that this approach will place the roles and responsibilities onto the parties most capable of delivering better and safer work practices. It will also drive long-term improvement in the industry through contractor ownership of audit activities. We continue to encourage contractors to seek independent third-party OH & S accreditation.

Since the commencement of the new contract requirements, OH & S audits have been recorded at The Ponds, Parkbridge and Potts Hill projects.

How this will change
 

As mentioned, over the past 12 months we have moved from undertaking OH & S and environmental audits ourselves to transferring this responsibility to our contractors. Our compliance indicators have been reviewed accordingly and will reflect the new practice from next year. In future, the focus for the revised indicator will be on reporting issues arising from our site management activities and include the number and type of immediate action requests issued to contractors.

Use voluntary systems and standards to benchmark and improve our performance
 

Landcom maintains its accredited Environmental Management System (EMS), which conforms to the requirements of AS/NZS ISO 14001:2004, the Australian / New Zealand standard for environmental management systems. Our EMS was first accredited in November 2000 and is independently verified by SAI-Global on an annual basis. One surveillance audit was conducted during the year, with Landcom continuing its accreditation under the ISO standard. The next triennial audit is scheduled for November 2009²⁸.

Global Reporting Initiative
 

The Global Reporting Initiative (GRI) is a network-based organisation that has developed a widely used sustainability reporting framework. Sustainability reports based on GRI are used to benchmark organisational performance, organisational commitment to sustainable development and to compare organisational performance over time. The core guidelines are in their third generation (G3) and were released in October 2006.

Not all of the GRI guidelines are relevant to Landcom’s operations. Under the G3 guidelines, Landcom achieved a score of B+ on its 2008/2009 report. This score is achieved by scoring a minimum of 20 under the G3 reporting performance indicators, and at least one from each indicator category of economic, environmental, human rights, labour, society and product responsibility. The full GRI index can be found on Landcom’s website²⁹. Contained in it is Landcom’s response to each of the GRI indicators.

NABERS Energy for Offices
 

The Australian Building Greenhouse Rating (ABGR) tool has been incorporated into the NABERS performancebased rating system for existing buildings. NABERS rates a building on the basis of its measured operational impacts on the environment. The energy rating tool has been re-named NABERS Energy for Offices and is managed by the NSW Department of Environment and Climate Change.

Landcom rents its head office and regional office space. A recent energy audit of our head office in Parramatta determined that, based on current energy consumption and other relevant data on the tenancy such as net lettable area, occupancy hours and staff numbers, our head office has a rating of three stars under the NABERS scheme (excluding the additional Level 1 office space). This is an improvement on a similar study prepared using the ABGR rating tool in 2005, which rated our head office tenancy as 1.5 stars. Landcom currently purchases 100% GreenPower for its head office in Parramatta and for our regional offices (excluding sales offices and the additional Level 1 office space at the head office).

This indicator will remain unchanged and we will continue to report our NABERS rating.

Promoting sustainability through our supply chain
 

We provide information on the number of tenders for development that require our private sector partners to adhere to particular sustainability criteria, and the total number of suppliers that possess pre-qualification based on sustainability criteria. The objective here is to encourage our industry partners to establish these practices with their other clients.

Landcom has three classes of prequalified contractors:

• Civil and landscaping contractors
• Project management service providers
• Project delivery agreement partners

Since last year’s report, Landcom has re-tendered the supply of prequalified project management services and we are currently in the process of evaluating expression-of-interest submissions for both civil and landscape contractors. We received submissions from 54 civil and 34 landscaping contractors. We envisage this process will be completed by the time this report goes to print and will advise the outcome in next year’s report.

Landcom engaged the following development partnering tenderers in the 2008/2009 financial year who addressed our sustainability criteria in their tender submission:

How this will change
 

The focus of this indicator has been on our partnering arrangements and to a lesser extent, our ability to influence the behaviour of our contractors. The indicator will be increased in scope from July 2009 to enable us to report on opportunities to drive sustainable design, materials and practices in tenders and contracts. In future, we will be showcasing projects, policy, contracts and any other activities that we believe demonstrate leading practice in sustainability.

Engaging with stakeholders about how we report on sustainability
 

This indicator provides a qualitative description of the stakeholder engagement program we conduct in relation to our sustainability reporting. This year, we integrated our stakeholder engagement with Landcom’s sustainability indicator review process.

During the year, we carried out a series of stakeholder consultation activities. We initially engaged a consultant to review our key sustainability issues with a view to matching them with our corresponding reportable performance indicators.

This process included formal engagement with Landcom staff and the Executive team through a series of workshops and questionnaires. The outcome informed our assessment of the material issues for Landcom and helped to identify changes in our core business since the inception of the indicators.

Following this, an updated set of proposed indicators was prepared and presented to Landcom’s Project Review Panel³⁰ well as Landcom Board members and staff. Key stakeholder workshops were also held to consult further with industry groups.

The feedback and suggestions from this process were considered and the indicators and targets were revised as needed. They were then placed on public exhibition to obtain more community and stakeholder feedback. All feedback was considered and amendments were made to the indicators where appropriate, with the final indicators endorsed by the Landcom Board and adopted by the Planning Minister in September 2009. Please refer to the section titled ’Raising the bar to a more sustainable future’ of this report for more information on the indicator review process.

How this will change
 

While this indicator will remain largely unchanged, our stakeholder engagement processes will, in future, become more strategic through the development of a five-year stakeholder engagement strategy against which we will report each year.

Managing our risk
 

A full description of our risk management is provided under ‘Governance – Achieving full regulatory compliance’ of this report. This indicator remains unchanged.

²⁸ An overview of Landcom’s EMS is available at www.landcom.com/environmental-managementsystem
²⁹ Refer www.landcom.com.au/GRI_Index
³⁰ The Project Review Panel is an external panel of expert advisors who offer independent review and comment on Landcom projects and practices.