Sustainability MANAGING FOR SUST AINABLE GROWTH ‘The publication of our first Sustainability Review in 2004 was a major achievement for Santos. The next steps are to undertake projects to improve our performance – not just in Australia but worldwide – and to accurately collect, verify and report on a range of sustainability data.’ MARTYN EAMES Vice President  Corporate and People Late in 2004 Santos published First Steps: Sustainability Review , the Company’s first standalone publication on this topic.  It describes how Santos is implementing the principles  of sustainability in the areas  of corporate governance, the environment, social responsibility and economic performance. Annual Report 2004 26 This was a significant milestone for Santos as it represents a starting point for the collection of data and the ongoing measurement of performance  in the area of sustainability. TRCFR per millions hours worked Communicating with stakeholders is an important activity and the publication of the Sustainability Review is a further extension  of Santos’ commitment in this regard. Santos applies considerable resources to the communication effort and aims to present information in a clear and concise manner in order to generate a greater understanding of the business by its stakeholders.  Santos has been recognised for its achievements in this area. Santos’ 2003 Annual Report  was featured as an example  of best practice reporting in PricewaterhouseCoopers’  Trends  in Corporate Reporting 2004 publication. Reports from companies worldwide are considered in compiling this publication and they must  meet specified criteria. This is  the third time a Santos annual report has been featured. Santos was also awarded a 2004 Silver Award for Excellence in Annual Reporting for the 2002 Annual Report by the Australasian Reporting Awards.  Receiving independent recognition for these activities serves as  a reference point for Santos’ desire to continually improve communication performance. Santos has been listed as  an inaugural member of the Australian SAM Sustainability Index (AuSSI). The AuSSI tracks the performance of around 70 Australian companies that lead their industry in terms of economic, environmental and  Process safety capability which deals with plant and equipment integrity assurance, design and construction, and maintenance,  is being developed through  the formation of a new set of standards to be incorporated  It also follows the principle that the majority of employees should The new structure is designed  to support the exploration- focused growth strategy.  It mirrors the ‘conveyor belt’ lifecycle of an exploration  and production company where exploration success leads  to commercialisation and development activity and finally revenue-generating production.  The results demonstrated considerable improvement  over the baseline assessments conducted in 2003 with steady progress in the implementation  of the procedures, processes and tools needed to achieve the requirements of the standards. Reorganising and simplifying the Company’s structure was one of the major outcomes and in May 2004 Santos began operating under a new functionally-based organisation structure. Further improvements were also made with the implementation  of the Environment, Health and Safety Management System standards, with Santos operations undergoing full assessments against standards for the  first time.  Santos commenced a major company-wide transformational change program in late 2003.  The program was designed to significantly improve Santos’ performance in four areas: key business processes, financial performance, organisation structure and company culture.  POSITIONING THE WORKFORCE FOR THE FUTURE SAFETY IMPROVING TOTAL RECORDABLE CASE FREQUENCY RATE into the health and safety management system.  social criteria. The index is calculated daily by Dow Jones Indexes and published in  The Australian newspaper. Following is an overview of progress and achievements in the area of sustainability for 2004.  The safety focus in 2005 will be on finalising a comprehensive set of hazard standards which outline the required controls to ensure that hazards encountered across Santos’ operations and activities are well managed.  The health and safety of employees is of paramount concern to Santos. Santos delivered another year of improvement in 2004 and achieved its lowest total recordable case frequency rate of 6.4.  ’01 ’02 Contractor ’03 ’04 Combined Employee 0 5 10 15 20 FIRST STEPS $_{Sustain}$ability Revi ew 2004