www.mondibp.com www.mondibp.com

MONDI BUSINESS PAPER S·E·A·T report Socio-Economic Assessment toolbox Report

2007  Socio-Economic Assessment Toolbox Report | Table of Contents

Table of Contents

1 INTRODUCTION 3 1.1 OBJECTIVES 3 1.2 STRUCTURE OF THIS REPORT 3 1.3 SEAT ASSESSMENT TEAM 3 1.4 ACKNOWLEDGEMENTS

2 OBJECTIVES AND APPROACH 4

3 OVERVIEW OF THE OPERATION AND SOCIAL MANAGEMENT SYSTEMS 5 3.1 BASIC INFORMATION ON THE OPERATION 5 3.2. EXISTING SOCIAL MANAGEMENT SYSTEMS 8 3.3 Community Engagement 11

4 OVERVIEW OF LOCAL AND NEIGHBOURING COMMUNITIES 13 4.1 THE REGION OF 13 4.2 THE OF AMSTETTEN 13

5 IMPACTS IDENTIFIED BY MBP AT 15 5.1 INTRODUCTION 15 5.2 EMPLOYMENT 15 5.3 HUMAN CAPITAL AND SKILLS DEVELOPMENT 15 5.4 TAXES AND ROYALTIES 16 5.5 VALUE ADDED 16 5.6 INVESTMENTS IN THE MILL 16 5.7 LOCAL PROCUREMENT SPEND 17 5.8 COMMUNITY SUPPORT & FACILITIES 17

6 KEY ISSUES RAISED BY STAKEHOLDERS 19 6.1 INTRODUCTION 19 6.2 OVERALL FINDINGS 19 6.3 GENERAL STAKEHOLDER FEEDBACK 20 6.4 EMPLOYEE FEEDBACK 22 6.5 OPPORTUNITIES FOR IMPROVEMENT 22

7 MANAGEMENT RESPONSES TO ISSUES RAISED 23

8 MONITORING AND INDICATORS 25 8.1 MONITORING OF THE MANAGEMENT RESPONSES 25 8.2 LOCAL KEY PERFORMANCE INDICATORS 26

9 CONTACT PERSON DETAILS FOR FURTHER INFORMATION 27 Socio-Economic Assessment Toolbox Report | INTRODUCTION 

1 INTRODUCTION

1.1 OBJECTIVES • Section 4 provides a description of local and neigh- bouring communities; This report presents the findings of a Socio- • Section 5 details impacts that MBP AT has on the Economic Assessment Toolbox (SEAT) assessment surrounding community; of MONDI BUSINESS PAPER Austria (MBP AT), the • Section 6 identifies and discusses key issues raised MONDI BUSINESS PAPER Group’s operation in Lower by stakeholders during the consultation process; Austria. The SEAT process was developed by Anglo • Section 7 provides an outline of strategic challenges, American plc, MONDI’s parent company, to help opera- opportunities for improvement and recommended tions identify and manage their social and economic actions, as suggested by the SEAT team, and manage- impact on local communities. ment responses to the issues raised by stakeholders; • Section 8 discusses the various indicators that were The SEAT process was carried out at the MBP AT mill from developed from the rapid assessment process, and how July to October 2006, including a stakeholder consultation they can be used in monitoring the operation’s social and in October. The consultation had four main objectives: economic performance; and • Section 9 outlines the additional activities that need • To gain an understanding of current and past social to be undertaken in order to complete the rapid and environmental performance of the Hausmening assessment process. and Kematen MBP AT mills; • To gain a clear view on current issues within the com- munities around the mills; 1.3 SEAT ASSESSMENT TEAM • To review and assess management stakeholder per- ceptions of the operation; and The preparatory work and consultation for the SEAT • To identify opportunities for improvement and develop assessment was carried out by the following team: priorities for the future. • Karl Grill, MBP AT Managing Director • Gerhard Schwiegk, MBP AT Financial Director 1.2 STRUCTURE OF THIS REPORT • Rudolf Beyrer, Environmental Manager • Horst Brunbauer, Head of the Trade Union This document reports on the results of the assessment • Roswitha Ebner, Assistant to the Financial Director and is structured as follows: • Bianca Greil, Project Assistant • Susanne Grote, Project Assistant • Section 2 sets out the approach and objectives of the • Christoph Hinger, PTL Process Manager assessment process, in particular identifying how the • Wolfgang Kasser, HR Director approach was applied at MONDI BUSINESS PAPER AT; • Stephanie Klotz, MBP Holding Assistant SD Manager • Section 3 provides an overview of the operation, • Birgit Matejka, Assistant to the Managing Director including information on the existing social manage- • Martin Süß, Occupational Health Manager ment system; • Karl Wadsak, Pulp Mill Engineering • Martin Zehetgruber, HR Manager

1.4 ACKNOWLEDGEMENTS

The SEAT assessment team would like to express its gratitude to the MBP AT employees, business partners and the community representatives who took the time to participate in the consultation process, as well as the mill management, who were highly supportive of the process. The SEAT study would not have been possible without their kind assistance.

The SEAT Team  Socio-Economic Assessment Toolbox Report | OBJECTIVES AND APPROACH

2 OBJECTIVES AND APPROACH

The approach taken for the assessment was in line with The objectives of the SEAT process at MBP AT are: the five key steps outlined in the SEAT process. These are defined in Box 2.1. • to identify and prioritise the key social and economic impacts that must be addressed at MONDI BUSINESS PAPER AT; • to assess the effectiveness and suitability of existing initiatives, identify any shortcomings and where the SEAT Process improvements can be made; • to assess whether the operation is in line with ‘best Step 1: Define Objectives of the SEAT Process practice’ requirements on social performance; and Step 2: Profile the Kematen and Hausmening Operations • to gather and collate data for corporate social report- and Neighbouring Communities, and Identify ing purposes, as well as development of indicators Key Issues that are relevant to local conditions. Step 3: Evaluate Social and Economic Impacts Step 4: Provide Guidance on Management Responses Consultation with internal and external stakeholders, to Key Issues such as MONDI BUSINESS PAPER AT staff and com- Step 5: Reporting to Stakeholders munity representatives was essential to meeting the objectives of the assessment. 53 individuals representing 11 different stakeholder groups were consulted. A sum- mary of the stakeholders consulted is given in Box 2.2. Box 2.1 Key Steps in the SEAT Process

Stakeholders Consulted

• Mayors of neighbouring towns and villages of Amstetten, , Kematen, Neuhofen, Winklarn • Leader of the Council • Employees • Representatives of the Employment Office (AMS) in Amstetten and Waidhofen a.d. • Representatives of the Amstetten Police Department • Representatives of the MONDI BUSINESS PAPER Health Insurance • Contractors, business partners, and neighbouring companies including EAS, EMAT, Pfaffeneder, Scherz, Unikristall, Schorn Automation, and Maschinenring • Representatives of local Red Cross • Director of the hospital in Waidhofen a.d. Ybbs • Representatives of local schools and technical colleges • Representative of local and national NGOs including Lebenshilfe NÖ, Greenpeace and BSG

Box 2.2 Stakeholders Consulted Socio-Economic Assessment Toolbox Report | OVERVIEW OF THE OPERATION AND SOCIAL MANAGEMENT SYSTEMS 

3 OVERVIEW OF THE OPERATION AND SOCIAL MANAGEMENT SYSTEMS

3.1 BASIC INFORMATION ON THE Successful collaboration with a leading photocopy OPERATION machine producer in 1966 heralded the company’s development into one of the most important manu- The roots of the MONDI BUSINESS PAPER Group can facturers of copy paper in Europe. Subsequent coopera- be traced back to 1793, when Ignaz Theodor von tion with nearly all of the well-known manufacturers of Pachner was granted permission to “set up a paper mill photo-copy machines led to specialisation in the produc- for special quality paper hitherto imported from abroad”. tion of copy paper. In the 200 years since its foundation, His first paper mill, set up in the vicinity of Vienna, gradu- the company has developed itself into a leading ally became the biggest paper producer in the Austro- brand name in the paper industry. It has come to repre- Hungarian monarchy. Around 1870, NEUSIEDLER papers sent high-quality products, leading international know- were being delivered around the world; in addition to the how, consistent innovations and an ecological awareness crown lands of the monarchy, , Spain, England, that sets international trends. Scandinavia, South America and Australia were counted among the most important purchasers. At the end of the 1990’s, gradual expansion began with the support of the new owner MONDI – a subsidiary After 1920, the operation in Thresienthal and the paper company of the Anglo American Industrial Corporation and pulp operation in Kematen were added – the current active in the pulp and paper industry. locations of MONDI BUSINESS PAPER Austria.

MONDI BUSINESS PAPER Austria, Hausmening  Socio-Economic Assessment Toolbox Report | OVERVIEW OF THE OPERATION AND SOCIAL MANAGEMENT SYSTEMS

MONDI BUSINESS PAPER Austria, Kematen

The renaming of NEUSIEDLER to MONDI BUSINESS PAPER followed in 2004 as a manifestation of its full integration into the MONDI Group.

MONDI BUSINESS PAPER Austria today primarily produces the Group’s speciality papers. This includes the colour ranges as well as Color Copy, the leading paper for colour laser printing on the European market. Additionally, chlorine-free bleached TCF long-fibre pulp is produced at the Ybbstaler Zellstoff GmbH.

MONDI BUSINESS PAPER Holding The Holding of MONDI BUSINESS PAPER is also located in Hausmening, Austria. All central functions are steered by Compe- tence Centers, which guarantee optimal support for the operations and efficiency in corporate management.

PUSHING THE LIMITS, the corporate vision of MONDI BUSINESS PAPER was brought to life at the Holding and focuses on five key topics: Customer and People Focus, 3.1. Site Plan Theresienthal Socio-Economic Assessment Toolbox Report | OVERVIEW OF THE OPERATION AND SOCIAL MANAGEMENT SYSTEMS 

3.2 Site Plan Kematen

Operational Excellence, Innovation and Sustainability. To guarantee that these goals will be met, communication Paper production total: 355,500 tonnes processes are facilitated and structured through the Pulp production total: 49,500 tonnes Holding. It is important to foster synergies between the CAPEX 04-05: EUR 77 mil. operations and to actively organise exchanges across Number of employees: 870 national boundaries.

Box 3.1 Operating Figures 2005 for MBP AT As a dynamic, forward-looking company, MONDI BUSINESS PAPER uses its resources to secure, amongst other things, long-term success. A separate sustainability team concentrates on social, corporate and product responsibility, safety and health, forest management, environmentally responsible production, global working conditions and governance.

In terms of employee development, we believe that it is important to have competent and motivated employees who play their part in making the company No. 1 in the paper industry. Above and beyond this, we aim to become the preferred employer for current and potential employees. With this in mind we developed the IDC (International Development Circle) and the Sales and Marketing development programme. We offer our employees unique further development opportunities and support them in reaching their goals, so that togeth- er we can reach new heights.  Socio-Economic Assessment Toolbox Report | OVERVIEW OF THE OPERATION AND SOCIAL MANAGEMENT SYSTEMS

3.2. EXISTING SOCIAL MANAGEMENT available, compared to the previous year, participation in SYSTEMS 2006 rose by 7% to 466 people.

Social issues play an important role in the history of the Fruit for MBP AT company. Today, great importance is placed on the area A constant factor in the promotion of health in the work- of occupational health. Different programmes that make place is the distribution of fruit to all employees in the the employee aware of a safe and healthy working envi- operation. At the end of 2006, all divisions at both loca- ronment have a high priority. tions were fully provided for: 44 bowls are filled with a total of 430 pieces of fruit every day.

Health Programme:

Health Days Health Days are among the annual high- lights. In 2006, they took place from 25–27 April. In addition to essential tests like measuring blood sugar, cho- lesterol, blood pressure, BMI (Body Mass Index) and body fat, there are also events relevant to focus areas of the health programme. In previous years they were: healthy eating in the work place, personal plan to quit smoking, introduction to running (pre- sented by BSG Running) and the pre- sentation of our health homepage www.fit-4-mondibp.com. In 2006, for the first time, the Health Days were sponsored by the AUVA (Austrian Social Insurance for Occupational Risks). As a result of the broad range of events Free fruit for all employees

Eye tests during the Health Days Socio-Economic Assessment Toolbox Report | OVERVIEW OF THE OPERATION AND SOCIAL MANAGEMENT SYSTEMS 

Work Place Evaluation SPEZ AR according to the analysis of a questionnaire (which made Due to the hard physical work of employees on our up the basis of the project), 259 employees volunteered specialist equipment, “Personal Coaching” was offered to take part. In order to inform all employees of the to all employees from these units in cooperation with a results and the development of the project, an infor- qualified physical therapist (Reinhard Senn). The findings mative flyer was handed out after its conclusion in were collated and serve as a basic ergonomic training January 2007. plan for new employees. At the end of March a final report was compiled by the physical therapist, which Health Workshop for Apprentices presents the measures introduced and suggestions for Another important milestone in the area of the promotion improvement. of occupational health is increasing the awareness of the apprentices. In 2006 the new trainees could take part in Personal Plan to Quit Smoking the “Health for the Future” educational workshop with a Since mid November 2005, Health Management at focus on shaping opinions. In order to incorporate this MBP AT in cooperation with the BKK (company health basic knowledge on the promotion of health into the insurance) offers a personalised programme to quit apprentice-training programme, a new scheme was smoking. 83 colleagues made the decision to take part. developed and approved for all apprentices. New employees, shortly after their entry into an apprentice- ship, undergo a one-day introduction on the topics of safety and health in the workplace, as well as presenta- tion on MONDI safety and health policies. Additionally there was a one-day seminar on addiction prevention for newcomers.

Personal plan to quit smoking

By the end of November, the project had produced 20 definite non-smokers. As appointments are made according to demand, there is still the opportunity to register. Apprentice workshop

Project: Sleep Problems Shift Workers It has long been recognised that long-term shift work with night shifts leads to a disruption of the natural bio- rhythm. Possible negative side effects can include, amongst others, insomnia, appetite disruption, increased irritability, difficulty concentrating or depression. For this reason, a pilot project was started with the C shift (BU TH, BU AR, BU KEM) in March 2005. In 55% of the participants an improvement in the quality of sleep could be seen. As a result of this success, the project was expanded to include the A, B, D, and E shifts, the por- ters, as well as to electricians and locksmiths working in shifts. In total, after an explanation of the project and Apprentice field day 10 Socio-Economic Assessment Toolbox Report | OVERVIEW OF THE OPERATION AND SOCIAL MANAGEMENT SYSTEMS

Project “Improving Personal Fitness” Implementation Sick Leave Management On 5 and 19 April 2006, a lecture on the topic “Argument Based on the success and acceptance of the employees for the importance of a physically active life style – your of the project “Heart Balance – Workplace Evaluation” a personal service for body and soul” was presented by concept for a project to reduce the amount of sick leave Dr. Josef Steiner, consultant for internal medicine and was designed together with Johann Beran in May. The sports physician. concept comprises a systemic valuation based on anonymous diagnoses and frequency. Furthermore, it Furthermore, MBP AT took part in a study on fitness includes a coordinated control group, cooperation with improvement. The aim of the study was to prove that our BKK (health insurance provider) and the involvement with a targeted training programme, irrespective of age, of the diagnosing physician. The development is com- after only a short time, a measurable improvement in posed of long and short-term measures. The creation of health can be achieved. evaluation guidelines (Step 1), and the fixation of sample analysis areas were carried out until October 2006. The There was also an extensive programme available for implementation of the sample analysis took place runners. Health Management supported our athletic between November 2006 and January 2007. employees with incentives (PTL running clothes) and reimbursement of entry fees in the marathon, the company triathlon and various other city runs.

Further attention was paid to the example set by the March SHE ZA, such that a voluntary screening of the BU / CC-directors and their representatives was approved. As an introduction, a heart beat analysis was offered. A detailed concept is currently in planning and will be realised over the course of 2007.

Participants in the BSG ski race Socio-Economic Assessment Toolbox Report | OVERVIEW OF THE OPERATION AND SOCIAL MANAGEMENT SYSTEMS 11

Every association has its own annual programme (includ- ing various events).

On offer are: • BSG Fishing • BSG Football • BSG Bowling • BSG Culture • BSG Running • BSG Cycling • BSG Ski • BSG Curling • BSG Dancing • BSG Tennis • BSG Hiking • BSG Water Sports

3.3 Community Engagement

The MBP runners at the Vienna Marathon MBP AT traditionally maintains good relations and coop- eration with its stakeholders. We maintain active contact in order to tackle potential problems in advance. There is a grievance management system in place for all types of complaints.

Key stakeholders are defined as: the political repre- sentatives of the community and the region, the employ- ment office (AMS), schools, the Red Cross and local fire brigade as well as the neighbouring community, local suppliers and the Greenpeace Organisation.

The measures of the CEP (Community Engagement Plan) are directed towards non-monetary activities such BSG Dancing Team as tours, donations in kind, and informative meetings and monetary investments. In 2005 MBP AT supported activities within the framework of health, children and education, and culture and the arts. In addition to this, MBP AT supported requests with product donations.

Within this context, MBP AT holds “Open Days” on special occasions. The last open day took place after the implementation of FLEX 05. Around 5,000 visitors were recorded, and they were able to gain a good impression of the mill. Numerous calls and the personal impression of the visitors confirmed the success of this event.

BSG Tennis Team

BSG = Company Sport Association www.fit-4-mondibp.com Our company sport associations are funded by MBP AT.

There are only nominal membership fees. In total the various BSGs have 900 members (including partners and children between the ages of 6 and 18). Once a year there is an association gift that can be purchased cheaply.

Open house on the occasion of the FLEX 05 startup 12 Socio-Economic Assessment Toolbox Report | OVERVIEW OF THE OPERATION AND SOCIAL MANAGEMENT SYSTEMS

Stakeholder Topics Activities Local and Adjoining Government • informal relationship • Authority contacts before • Environment issues and after projects • local procurement • informal meetings • mill tours Local Police Authorities • Emergency contact • information information • mill tours Local Employment Office (AMS) • informal meetings and information Schools • internships • offering internships • local Primary School • projects with schools • mill tours • local Secondary School • Knowledge transfer from • trial week / ‘Education Mile’ industrial praxis • mill presentations Red Cross, Fire Brigade • Emergency procedures • Evacuation involvement • Volunteering • Donations • mill tours • Support of fundraising activities • Support voluntary disaster operation Communities: • Environment issues • press information • local Associations • Volunteering • Summer jobs • neighbours • Satisfaction survey • Grievance mechanism • open Day Local Contractors • closer integration into MBP • involvement in the innovation Zone Non-governmental Organisations (NGOs) • Environment issues • involvement in training • Grievance mechanism

Overview of activities by stakeholders and topics

Visitors during a mill tour Socio-Economic Assessment Toolbox Report | OVERVIEW OF LOCAL AND NEIGHBOURING COMMUNITIES 13

4 OVERVIEW OF LOCAL AND NEIGHBOURING COMMUNITIES

4.1 THE REGION OF LOWER AUSTRIA Main Industries of Lower Austria The main industries in the region are machinery and steel Located in the North East of Austria, Lower Austria is the building, electronics, stone and ceramics, and iron and largest in area of all Austria’s federal states and has the metals. Central and East European (CEE) countries are second largest population after Vienna. Its landscape important business partners for Lower Austria. The ranges from high alpine areas, meadows, to gentle hills region’s exports have grown by over 33% since 2003, and wide plains. The capital of Lower Austria is with 22.7% of the total exports destined for CEE coun- St. Pölten. The region’s proximity to Vienna as well as tries. The share of exports to CEE in relation to total its infrastructure, giving access to the exports for Austria as a whole is 15.9%. and , make it an important economic region within the country. Unemployment within the region is in line with the national average of 7.3% although at 7.2% the unem- Lower Austria is home to the Wachau, a beautiful stretch ployment rate for women is slightly higher than the of the Valley between Melk and Krems. national average of 6.8%2. The landscape features examples of the region’s evolu- tion since prehistoric times including monasteries, castles, ruins and the baroque Abbey Melk. In 2000, 4.2 THE DISTRICT OF AMSTETTEN the Wachau was declared part of the UNESCO world heritage. The district of Amstetten is located at the western most point of Lower Austria, in the region of Lower Population Austria, along the banks of the river Ybbs. The city of Lower Austria has a population of approximately 1,545,8041 Amstetten is the most populated within the district. The inhabitants. This amounts to approximately 20% of the MONDI BUSINESS PAPER operations are located in the population of Austria. Amongst the inhabitants of the suburbs of Ulmerfeld and Kematen. region, the majority are of German ethnicity; only around 6% of the population are foreign nationals. Population According to a 2005 census, there are 91,215 inhabitants living in the Amstetten district, which accounts for nearly 6% of the population of Lower Austria. The town of Amstetten itself has approximately 24,000 inhabitants.

Amstetten enjoys an even distribution of wealth in terms of income, and the majority of inhabitants are middle class with a tendency towards wealth rather than poor- ness. The average income is EUR 24,771 per year.

Main Local Industries in Amstetten The largest employer in the region is Umdasch Konzern, a formworks and shop fitting company which employs around 1,855 people. Together the MONDI BUSINESS PAPER operations in Ulmerfeld and Kematen employ 870 people.

Districts in Lower Austria

1 http://www01.noel.gv.at/scripts/ru/ru2/stat.asp?NR=3 2 Source: MBP 14 Socio-Economic Assessment Toolbox Report | OVERVIEW OF LOCAL AND NEIGHBOURING COMMUNITIES

Ulmerfeld-Hausmening Ulmerfeld was first mentioned in the official records as early as 995. Since MONDI BUSINESS PAPER’s establishment in the area in 1793, it has played an important role in the development of the community. MONDI BUSINESS PAPER is the largest employer in Ulmerfeld and has positively affected the development of the suburb in terms of economic growth. The increase of the population can be linked to the subsequent develop- ment and expansion of the company.

Kematen MONDI BUSINESS PAPER is the single largest employer in the town. On 1 October 2002 the operational business of the Kematen paper mill and of Ybbstaler Zellstoff GmbH was taken over by MONDI BUSINESS PAPER. As in Ulmerfeld, the growth of the company has positively influenced the town’s development.

Town hall Amstetten; © Town of Amstetten

Umdasch Konzern, Amstetten 1,855 Education in Amstetten MONDI BUSINESS PAPER Austria AG 870 The area’s proximity to the University of , and the broad range of educational opportunities contribute to the dis- Engel Austria GmbH, trict’s high skill-level. A large percentage of students in Mechanical Engineering 750 Amstetten attend the Waidhofen academy with a focus on Lisec Glastechnik Industrie, automation technology, electrical engineering und mechan- Amstetten/Hausmening, 411 ical engineering. This is reflected in the district’s supply of CNH Österreich GmbH 387 skilled mechanics and electricians. Large production companies – Approximate number of employees 2005 Various factors contribute to a high quality of life in Amstetten, including numerous opportunities for recrea- tional activities, good health care and educational opportu- General Hospital Amstetten nities and excellent transport links. Centrally located (incl. nursing students) 1,000 between Linz in and St. Pölten, Amstetten is situated near main train and highway junctions. Municipality of Amstetten 387 Raiffeisen Lagerhaus Amstetten-Aschbach 8

Large service companies – Approximate number of employees 2005

Overview Amstetten Lower Austria Austria Population 2005 91,251 1,572,411 8,206,524 Changes in % 2001 (VZ 2001) – 2005 1.3 1.5 2.2

Employed Persons 2005 34,868 533,827 3,230,286 Changes in % 2004–2005 -3 1.3 1 Unemployment 2005, Annual Average 1,941 42,600 252,654

Overview of employment figures in the Amstetten Region Socio-Economic Assessment Toolbox Report | IMPACTS IDENTIFIED BY MBP AT 15

5 IMPACTS IDENTIFIED BY MBP AT

5.1 INTRODUCTION Additionally, the Mill calculates that approximately 120 persons are indirectly employed as MBP AT contractors. As a key contributor to the local and regional economies, Furthermore, approximately 148 additional people MONDI BUSINESS PAPER Austria has an important work for the MONDI BUSINESS PAPER Group on-site economic impact on local communities, in addition to its in Hausmening. social and environmental impacts. This section dis- cusses the Mill’s principal economic impacts. Purchasing power of employees is relatively high there- fore induced employment is calculated as 15% of the total direct and indirect employees, as well as those MBP 5.2 EMPLOYMENT employees based in Hausmening.

The first and most important economic impact is job creation: Category Persons Total direct employment 870 • direct employment at the Hausmening and Kematen Total indirect employment 120 paper mills; Induced employment 171 • direct employment at the Kematen pulp mill Total estimated employment 1,161 (Ybbstaler Zellstoff AG); • indirect employment as MBP AT contractors; and Table 5.2 Total Estimated Employment • induced employment through the spending of direct Generated by MONDI BUSINESS PAPER Austria (2005) and indirect employees on local goods and services, and through the public sector jobs supported by taxes paid by MBP AT. 5.3 HUMAN CAPITAL AND SKILLS DEVELOPMENT Employment figures are presented in Tables 5.1 and 5.2. MBP AT is committed to the personal and professional development of its employees and invests extensively in human resources. Table 5.3 summarises the training Category Persons budget at the Mill for 2005. Hausmening and Kematen Mills 825 • Apprentice positions 50 Type of training Total Total Training Ybbstaler Zellstoff AG 45 training training hours per Total Direct Employment 870 hours days employee Safety Training 1,893 237 2  Table 5.1 Direct Employment Generated by MONDI BUSINESS PAPER Austria (2005) Language Training 0 9 1 Management The average age of staff is 39.1 years and employee Training 855 107 1 fluctuation is very low, at only 0.62. Local recruits are Technical Training ,595 824 8 favoured and therefore both mill employees, as well as middle and senior management are predominantly from Other 20,379 ,  the region and area surrounding Hausmening and Total 30,272 3,784 38 Kematen. Table 5.3 Investment in Training and Development (2005) 16 Socio-Economic Assessment Toolbox Report | IMPACTS IDENTIFIED BY MBP AT

MBP AT also has an extensive apprenticeship pro- 5.5 VALUE ADDED gramme with approximately 10 in-house trainers. In 2005, there were about 50 apprentices, and every year MONDI BUSINESS PAPER Austria’s contribution in its the Mill accepts about 10 –12 new students. It offers value added is illustrated in Table 5.5. apprenticeships as industrial clerks, IT technicians, paper technicians, or electrical / mechanical engineering technicians. Apprentices also have access to some Value added 2006 additional benefits such as a yearly excursion, health (EUR 1,000) training, tutoring, as well as advanced training in, for Operating Profit1 6,063 example, English or computer skills. This programme Employee costs 45,599 has proved extremely successful, as approximately 75% Depreciation / amortisation1 20,025 of all apprentices receive “good to excellent” marks in Total 71,687 their vocational school3 assessment, and 75% receive 1 “good to excellent” marks on the final apprenticeship impairment effects are excluded examination. Table 5.5 MBP AT Value Added (2006) Additionally, the Mill runs a talent management pro- gramme for exceptional managerial candidates. In 2005, MBP AT identified and evaluated about 40 employees 5.6 INVESTMENTS IN THE MILL for participation in this programme and they are in the process of completing the course work. Some of these In 2005, after a 3-year construction, MBP AT commis- talents will go on to participate in a Group-wide pro- sioned one of its largest investment projects, FLEX 05. gramme called the “International Development Circle”. This EUR 45 million project saw cut-size capacity at the Moreover, individuals are encouraged to enrol in further Austrian mills increased by 140,000 tonnes a year to education (e.g. MBA programmes), which may be 400,000 tonnes. Additionally, the project helped to partly sponsored by the Mill. reduce the noise levels from the Hausmening mill and improve general facility safety. FLEX 05 has significantly increased performance and service levels at MBP AT, 5.4 TAXES AND ROYALTIES pushing the MONDI BUSINESS PAPER Group to the forefront in the speciality sector and therefore helping MONDI BUSINESS PAPER Austria makes a significant assure the long-term survival of the operation. Addition- contribution to the local, state and national governments ally, the company’s capital expenditure in 2005 was through the taxes and royalties it pays. This is detailed approximately EUR 77 million. in Table 5.4.

3 During the apprenticeship, students attend a vocational school for theoretical training.

Taxes and Other Payments 2006 to the Public Sector (EUR 1,000) Corporate tax 242 Taxes paid on behalf of employees: • Income 2,831 • Health Insurance & Social Security 7,668 Motor vehicle tax 1 Real estate tax 72 Energy tax 347 Chamber contributions 305 Total 11,466

Table 5.4 Taxes and Payments to the Public Sector (2006) FLEX 05 Socio-Economic Assessment Toolbox Report | IMPACTS IDENTIFIED BY MBP AT 17

5.7 LOCAL PROCUREMENT SPEND Of additional note is the company health insurance, which offers more affordable terms for employees MONDI BUSINESS PAPER Austria procures a significant and co-insured dependents than comparable health amount of its raw materials from local, regional, and insurance companies. The MBP AT company health national sources, making it an important contributor to insurance is the responsible social health insurance the regional economy. The following table details the provider for the Austrian operations. At the end of 2006 Mill’s most significant procurement expenditure within 3,200 beneficiaries were insured by the company Austria and the Hausmening Region. health insurance fund. Insurance payments made for this

Item Approximate Value Purchased From (EUR million / year) (Company and Location) Austria Pulp 193.1 MBP Sales GmbH, Vienna Pulp 20.5 Ybbstaler Zellstoff GmbH, Kematen Natural gas 18.9 Econgas GmbH, Vienna Electricity 9.0 Austrian Power Vertriebs GmbH, Vienna PCC 7.7 Unikristall GmbH, Gummern Wrapper 7. flexopack Verpackungen GmbH, Allhaming Carton, boxes 7.4 Duropack AG, Karlsdorf Starch 5.4 Agrana Stärke GmbH, Gmünd Hausmening Region pulp 20.5 Ybbstaler Zellstoff GmbH, Kematen Pallets 1.3 Amstler&Zalr GmbH, Mauer Transport 1.2 Johann Wögerer GmbH, Neufurth Masonry works 0.8 SCE Schaufler Bau GmbH, Electrical installations 0. peter Pfaffeneder GmbH, Neuhofen/Ybbs Waste disposal 0.6 Stadgemeinde Amstetten, Amstetten Automation engineering 0.4 EMA-Automatisierung GmbH, Amstetten Steel construction 0.3 KSM Karkheck GmbH, Hausmening Steel construction 0.3 Schiefer Metalltechnik, Allhartsberg

Table 5.7 Local Procurement Expenditure (2005)

5.8 COMMUNITY SUPPORT & group in 2006 totalled EUR 5.1 million, whereby hospital FACILITIES stays constituted the main expenditure at EUR 1.5 mil- lion. As a result of achieving annually higher surplus, it is In respect to MBP AT’s social responsibility within possible to provide consistent improvement of service the community it aims to act in accordance with its for the insured persons. Engagement Plan. As can be seen in Table 5.9, this includes numerous activities. MBP AT reviews the request for support in terms of the Community Engagement Plan. In 2005, MBP AT spent approxi- mately EUR 9,340 on corporate social investment.

In addition to donations for social and cultural causes, the focus for donations in kind in local areas is on schools, kindergartens, papermaking schools, and uni- versities, as well as local associations (see also chapter 3). MBP AT offers guided tours of the operations to schools and interested groups. Upon request these can be conducted in conjunction with specialised discus- sions with MBP experts on individual topics. Presentation of donation to Lebenshilfe NÖ 18 Socio-Economic Assessment Toolbox Report | IMPACTS IDENTIFIED BY MBP AT

CE Activity Time Frame Budget (in EUR) Notes Open Day On occasion 120,000 / event After large projects Press Information Ongoing 0,000 / year Summer Jobs June, July, August 00,000 / year ~ 300 seasonal workers and September (work experience for students) Grievance Mechanism Ongoing internal manpower Through switchboard / porter Evacuation Involvement Ongoing internal manpower Developing and train common evacuation procedures for emergency Donations Ongoing 10,000 / year Decision by BOD, mainly for social and communal purposes Support Fundraising Ongoing Within donations i.e. support of fundraising activities Activities (emergency aid for local and worldwide disasters) Support Voluntary On Demand e.g. support after big floods Disaster Operation Working Support Company Ongoing 15,000 / year Including the family members Sport Associations of the employees Mill Tours Ongoing internal manpower For stakeholders Trial Week / Ongoing / internal manpower For future apprentices Education Mile once a year Mill Presentations Within schedule internal manpower Alternating at schools like HTL, HAK, (2–3 a year) Universities Graz, Linz, and Munich Internships Within summer Within summer jobs procedure jobs procedure Health Services Ongoing 0,000 / year for family members of our staff Special Projects On occasion for very special community projects.

Table 5.9 Community Engagement Activities

Health Activities MBP AT has initiated a number of programmes to help improve the overall health of employees including but not limited to: flu vaccinations, Health Days, workplace evaluation SPEZ AR, personal plan to quit smoking, roll- out of the project ‘Sleep Problems in Shift Workers’, health workshop for apprentices, project ‘Improving Personal Fitness’, implementation of sick leave manage- ment, and the Company Sport Association. A full descrip- tion of these activities can be found in Chapter 3.2. Socio-Economic Assessment Toolbox Report | KEY ISSUES RAISED BY STAKEHOLDERS 19

6 KEY ISSUES RAISED BY STAKEHOLDERS

6.1 INTRODUCTION by internal and external stakeholders; general stake- holder feedback, consisting mainly of feedback from During two full days of stakeholder interviews, the SEAT external stakeholders; employee feedback; and oppor- team was able to gain a broad understanding of the tunities for improvement. relationship between stakeholders and MBP AT, the company’s image and importance in the region, and perceptions of its social and environmental performance. 6.2 OVERALL FINDINGS Stakeholders representing similar organisations were grouped together and interviews were held at office • In general, MBP AT has a very positive image within facilities on-site at the Hausmening mill. Afterwards, the region and the local community. Stakeholders stakeholders were invited to enjoy a buffet and have a predominantly agree that MBP AT has a good reputa- tour of the mill. On the whole, participants were appre- tion externally, as an important and fair employer, and ciative of the whole SEAT and consultation process and a socially and environmentally responsible company. were open and honest in their feedback. • There is very little recognition of the MONDI BUSINESS PAPER brand in the region. In general, it can be said that there was very little to no Stakeholders still refer to and identify with the negative feedback or criticism. On the whole, stakehold- NEUSIEDLER company name. ers were positive about MBP AT and its role as an • Environmental improvement has been crucial for the employer and member of the community. Also, a com- company’s positive image. In the 1980’s MBP AT (or mon pattern in stakeholder feedback could be identified NEUSIEDLER, at that time) had environmental issues as most of the issues were raised in almost all interviews. with its pollution of the Ybbs River. Since the massive There was also a slight difference in feedback from clean-up campaign and its drastic improvement in its external and internal stakeholders. Therefore, the follow- overall environmental performance, MBP AT was able ing section is divided into; overall findings, which is to turn its bad reputation around and enjoys a good comprised of issues that were consistently raised both image today partly because of this.

The DIALOGUE at MONDI BUSINESS PAPER Austria 20 Socio-Economic Assessment Toolbox Report | KEY ISSUES RAISED BY STAKEHOLDERS

The DIALOGUE facilitates exchanges between management…

• Contact to stakeholders was already very good. While 6.3 GENERAL STAKEHOLDER some stakeholders were at the Hausmening mill for FEEDBACK the first time, most were already in contact with MBP AT in some way or another, making the dialogue • All stakeholders agree that MBP is one of the most open and transparent. Nevertheless, SEAT was significant employers in the region. Although there are good opportunity for open discussion and to foster a number of other companies in the area, for some of good relations. the neighbouring small communities, MBP is the • MBP’s Safety & Health programme was widely known major employer. MBP AT is generally seen by the to and appreciated by stakeholders. Some commu- community as a generous and fair employer, with a nity representatives even considered MBP’s Health good working climate and excellent benefits in place Programme as a model for other such projects in the for employees. region. • In addition to direct employment, MBP AT is an impor- • Some stakeholders, especially local authorities and tant provider of apprenticeships and internships. In employees, expressed concern for the survival of the Austria, availability of apprenticeships is becoming an Austrian sites, especially Kematen and the YZG pulp increasingly important issue. MBP AT runs a highly mill. Recognising that MBP AT is now a member of an successful apprenticeship programme, and while not international Group, there is concern that the rela- all apprentices get jobs at MBP AT, there is no prob- tively small and costlier Austrian operations will be lem to successfully place them once they have fin- closed and jobs will be lost. ished. Similarly, the company provides good oppor- • Emphasising the above-mentioned concerns, it was tunities for local students to get summer internships highlighted that high cost and insufficient availability or even complete their theses at MBP AT. of wood is critical at the present time. It was widely • MBP AT is a driver of the local economy, not only recognised that MBP AT must find a way to overcome through direct employment and job creation, but also this barrier. through indirect employment of contractors and small • In general, external stakeholders have a very positive businesses in the communities around the mill. opinion of the company, while employee attitude Additionally, induced employment created through shows potential for improvement. the buying power of those receiving an income from MBP AT is noteworthy. • Today, MBP AT has excellent environmental perform- ance. Years ago, MBP AT (NEUSIEDLER) actions were damaging the environment, however there has Socio-Economic Assessment Report | KEY ISSUES RAISED BY STAKEHOLDERS 21

been a radical improvement and now the company is • In general, MBP has a positive image in the region and considered particularly responsible regarding the envi- there was no trend in negative feedback. ronment. There are no complaints concerning environ- • Some local authorities expressed concern for the ment (air or water emissions, transport, noise, etc.). survival of the two mills in a global market, knowing • The Safety & Health programme well known and that the economic conditions in Austria (high labour, highly appreciated by the community. Contractors energy and wood costs) are less favourable than in working on-site recognise and appreciate high safety other countries where the MBP Group has opera- standards and have applied them to their own com- tions. panies and local authorities especially applauded • There was an isolated contractor complaint that those health initiatives. contractors without necessary certification are cheap- • Up until now, the dialogue with MBP AT has been er for the company and are therefore awarded con- good and transparent. Stakeholders have good con- tracts. tact to the company and feel free to discuss con- • The wish was expressed that contractors have access cerns. There is no need for extra informational mate- to the MBP innovation and idea management pro- rial or more regular contact. Additionally, the “Open gramme, as they too have many ideas for improve- Day” is appreciated. However, some stakeholders ment. expressed the wish to organise more mill visits.

… and employees 22 Socio-Economic Assessment Toolbox Report | KEY ISSUES RAISED BY STAKEHOLDERS

6.4 EMPLOYEE FEEDBACK 6.5 OPPORTUNITIES FOR IMPROVEMENT

• As opposed to external stakeholders, amongst • A short action plan should be derived from isolated employees there were some differing opinions on issues raised. There are a few isolated complaints that external image of MBP AT; however, most agree that should be dealt with. the company does project a positive image in the • In general, stakeholders were very happy with the region. current level of dialogue and contact with the com- • Working climate is seen differently by different employ- pany. This good contact and communication with ees. Two employees that have been with MBP AT should be maintained. (NEUSIEDLER) for many years were less positive than • Internal communication to employees could be the rest and had markedly differing opinions to young improved. or new employees. • The attitude and motivation of long-time employees • Employees expressed the wish that communication is important and special attention should be paid to could be improved, especially between employees this issue. and department, as well as management communi- cations to employees on strategic developments of the company. • There was also significant concern for survival of the operation, especially the Kematen mill and the YZG pulp mill. Socio-Economic Assessment Report | MANAGEMENT RESPONSES TO ISSUES RAISED 23

7 MANAGEMENT RESPONSES TO ISSUES RAISED

In response to the issues raised during the consultation 2. SHE (Safety, Health and Environment) of stakeholders, MBP AT management has committed itself to taking the measures enumerated below. The main goal of MBP AT is the operational safety and health of our employees, contractors and visitors. Numerous measures and actions, such as a reporting 1. Risk Management system for near accidents, structured auditing system, comprehensive training programmes analysis of occur- In the area of risk management (emergency / evacuation rences, communication of measures etc… play an management) MBP AT will try to intensify dialogues with important role in reducing and hindering the number of the Police, Red Cross and the volunteer fire department injuries and work-related illnesses. (coordinated action – common cause). Environmental institutions should get to know the business before inci- dents. A list with the respective contact person has been 3. Suggestion System at MBP AT forwarded to the police. Similarly, a tour of the operations will take place with the respective people. There are many contractors working at MBP AT. They have expressed the desire to be incorporated into MBP AT’s suggestion system.

The DIALOGUE is a platform for discussion… 24 Socio-Economic Assessment Toolbox Report | MANAGEMENT RESPONSES TO ISSUES RAISED

4. MBP System tours be held (for example for teaching staff only) was expressed. We are happy to meet this request. The three years since the realignment of the Innovation Management System, have shown that the IM concept can be continuously and successfully implemented. 6. Procurement Process at MBP These efforts have paid off – for the company and the employees! At MPB AT the starting point of the procurement process is the identification of demand. After this, a purchase From 2004 until 2006 we achieved: requisition is entered on a decentralised level, often directly from the technicians. The next step, which is to • 3898 new ideas were submitted identify if current quotes for requested material or service • 1988 implemented ideas are available, is handled directly by the purchasing • More than EUR 10.3 mil. in savings were recorded! department. If no such offer is available, suppliers are • More than EUR 460,000 in bonuses were paid invited to submit a quote. The follow-up action is to start negotiation with potential suppliers (price, delivery terms, In the combined German and Austrian cross-industry payment conditions, etc.) and identify the most advanta- benchmark analysis carried out by the ÖPWZ (Austria’s geous offer. The best offer is transformed into a purchase Productivity and Profitability Centre) we were ranked in order within SAP, signed accordingly, and sent to the the leading group. (>400 businesses from various supplier who returns acceptance of the order. The sub- branches. Figure = Innovation Score) sequent step is the delivery of ordered goods or execu- tion of ordered service. After confirmation of goods / services receipt in SAP, invoices forwarded by the sup- 5. Tours plier are passed on for entry into SAP and payment is made via a weekly payment run. Tours of the operations have been offered at MBP AT for a long time. The main interested parties from the local area are schools and local associations. The organisation of the tours is the responsibility of the human resources department. Specially trained guides aim to impart to the groups both the traditional and modern aspects of the location. In the feedback to the SEAT a desire that extra

… and to learn from top business and industry managers. Pictured from left to right: Karl Grill (Managing Director MBP AT) with star guest Helmut Pechlaner (President WWF Austria) and television presenter Barbara van Melle. Socio-Economic Assessment Report | MONITORING AND INDICATORS 25

8 MONITORING AND INDICATORS

8.1 MONITORING OF THE MANAGEMENT engagement, which is directly linked to the concerns and RESPONSES needs of local stakeholders. The CEP covers a 3-year period, is revised tri-annually and reviewed yearly, or as The actions derived from the management responses required. to issues raised, as described in Chapter 7, will be carried out by the management team of In 2007, MBP AT will begin to report on the fulfilment of MONDI BUSINESS PAPER Austria. The action plan will its CEP to the rest of the MONDI BUSINESS PAPER be carefully followed up and reported on, on a regular Group through a newly introduced CEP Fulfilment Key basis. Additionally, the results of the SEAT analysis and Performance Indicator. This is part of the new focus stakeholder consultation have already been incorporated on sustainability and social performance of MBP’s into the Mill’s Community Engagement Plan (CEP), which PUSHING THE LIMITS Performance Management defines and sets out MBP AT strategy for community System.

Employees at a works outing 26 Socio-Economic Assessment Report | MONITORING AND INDICATORS

8.2 LOCAL KEY PERFORMANCE INDICATORS

Certain findings of the SEAT process can be used as indicators to monitor and measure performance. These are indicated in Table 8.1

Indicators Total Value (a) Value added EUR 11,466,000 (b) Taxes and other payments to the public sector EUR 71,687,000 (c) Direct employment 870 (d) Indirect contractor and supplier employment 120 (e) Induced employment 171 (f) number of apprentices 50 (g) Expenditure on procurement in the region EUR 26,100,000 (h) Spend on social and community programmes EUR 9,340 (i) capital expenditure EUR 77,000,000

Table 8.1 2005 Key Social Performance Indicators – MONDI BUSINESS PAPER Austria

Additionally, there are several other indicators that might potentially be used to measure social performance and monitor the follow-up of management responses, for example:

• Percentage of apprentices who find a place of work within a set time frame; • Employee satisfaction; • Spending on community projects; and • Number of people participating in mill visits. Socio-Economic Assessment Toolbox Report | CONTACT PERSON DETAILS FOR FURTHER INFORMATION 27

9 CONTACT PERSON DETAILS FOR FURTHER INFORMATION

For further details on this SEAT Assessment or on MONDI BUSINESS PAPER AT’s social management initiatives, please contact:

Mr. Wolfgang Kasser Head of Human Resources

MONDI BUSINESS PAPER Austria Haidmühlstraße 2-4 3363 Ulmerfeld-Hausmening

[email protected] +43 7475 500-2150