Philippine San Miguel Corporation

The aims and scope of this report Based on Information collected mainly during the year 2000, this environmental report Is addressed to our employees, customers and other stakeholders. The report explains Ionians understanding of the environmental aspects of its activities and their impact, outlines a program for reducing adverse impact, and reports actions aimed at implementing the stated policies and goals. Monika previously reported on Its environmental activities In the publication Monika and the environment In 1999. Ionians business review 1999 also included statements on environmental issues.

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There as been remarkable progress in environmental management and environmental performance at Monika since we last reported on these matters. Monika and the environment reported the start of the systematic collecting of environmental data from production sites. Work continues on the development of data collection and the creation of performance indicators aimed at measuring the success of Ionians environmental work to date. This group-level report includes no systematic site-specific information. The case studies offer close-ups of the practical environmental work that Is being carried out In the different parts of the organization.

Monika supports efforts to develop uniform and globally applicable guidelines for economic, environmental, and social reporting. This report, which is limited to environmental issues, applies the general framework proposed by the Global Reporting Initiative in its Sustainability Reporting Guidelines. This report, as well as In-dept financial and social information, Is also available at Ionians online corporate reporting site; www. Nooks. Commonness[->0]. The new information and communication technologies that drive global economic development have the potential to open up new roads of sustainable development.

Thanks to the denationalization process that these technologies have started, a growing part of what we consume can be produced In the digital space. The potential Is there, but technology as such will not decide the course of development. Much will depend on individual lifestyle choices in the new context of freedom. Will we waste the saving made by transacting traditional business in the digital space by consuming materials and energy through other pursuits? Or will we accept that there can be no freedom without responsibility?

We at Monika firmly believe that the global information age is fostering a new sense of social spontaneously and we want to shoulder our share of that responsibility, Our responsibility for the consequences of our actions, striving to meet current needs without Jeopardizing the rights or resources of future generations. Globally operating industries increasingly want to establish uniform social and ethical operating principles, including principles of environmentally sustainable practices. Monika supports this development and actively participates in global initiatives promoting uniformity.

If companies were able to agree on the basic ground rules of sustainable placement, we would no longer be locked in a zero-sum game and would instead be able to move towards a win-win situation. Our environmental work is based on life cycle thinking. That means that we consider the life cycle adverse environmental impact of our operations and are committed to seeking to reduce this impact. At Monika, environmental work is not a separate field handled by specialists. Environment is everybody’s business. Cooperation and open communication are at the heart of our efforts to meet our economic, environmental and social responsibilities.

Accordingly, Monika supports initiatives to create a common framework for reporting on these elements of sustainability. This report is based on such triple bottom line thinking. Monika wants to participate in the Joint enterprise of building new foundations for sustainable development. Ionians environmental work is based on life cycle thinking. The goal is to reduce adverse effects throughout the product life cycle through environmental management of own operations, systematic supplier management, integration of Design for Environment into product development, and sound End-of-Life practices.

At Monika, environmental activities are integrated into normal day-to-day business processes and ways of thinking. Design for Environment plays an important role in these activities and enters product development very early on. Work has started on building a Monika-wide database listing the material content – substances and quantities – of components used in Monika products. The database is an essential Design for Environment tool and will help Monika respond to restrictions on the use of substances. It will also help all parts of the organization give answers to inquiries on material content from customers and other stakeholders.

Efforts continued to develop environmentally preferable alternatives to substances that are to be restricted by forthcoming European Union legislation and other regulations. Alternatives are being developed for instance for lead, halogenated flame retardants, hexameter chrome (chrome VI), cadmium and mercury. In Ionians view, recovery of products is a critical stage of economically and environmentally sustainable End-of-Life practices. Monika offers its network equipment customers a teacake and recycling service. Different recovery and recycling options for mobile phones are evaluated and used.

The contents of the MS in place vary somewhat,depending on such local circumstances as legislation, regulations and waste treatment capabilities. However, Monika has decided to apply Monika standards even in places where they are higher than the prevailing local standards. Updated supplier requirements with revised environmental requirements were approved in 2000. Implementation started with thinking aims at reducing the thorough understanding of the environmental aspects and impacts of the different stages of the long and complex process chain and extensive supplier network characteristic of he communications industry.

The whole Monika network is instrumental in gaining this understanding and implementing the goals based on it. The network comprises in addition to Monika business and research and development units, Ionians supplier, logistics and end- of-life partners. Ionians research and development organization keeps close contact with independent research institutions. The aim is to stay abreast of advances in basic research and to identify new environmental issues with a possible bearing on Ionians business operations. The information and communications industry has shared environmental locals.

Monika participates in industry-wide efforts to find economically and environmentally sustainable solutions to life cycle issues facing the whole industry, such as the collection and recycling of products at the end of their life cycle training of sourcing personnel and supplier audits based on the new requirements. Monika values and principles are the solid foundation for our business success, sound environmental stewardship and good corporate citizenship. The interrelated values and principles define the Monika Way of approaching issues of business, employment, environment and society at large.

The Monika Way is the heart of Ionians distinctive culture that unites the company across its locations. Monika Values All Monika employees are expected to adhere to the four core values of Customer Satisfaction, Respect for the Individual, Achievement and Continuous Learning. The environmental organization includes two Monika-wide bodies: the Monika Environmental Steering Group and the Monika Environmental Management Team, which comprises representatives from the business groups. The Monika Environmental Management Team prepares proposals on environmental issues to be implemented n a Monika-wide basis to the Monika Environmental Steering Group.

The Steering Group, chaired by Veil SoundГKC, prepares action programs and gives guidelines for business groups and line organizations. The highest decision-making body in environmental issues is the Monika Quality Board, whose members include the Chairman and CEO of Monika, the President of Monika and the Presidents of the Business Groups. These Monika-wide bodies strive to ensure that the business group and unit level implementation of environmental activities is consistent with the environmental policy and that cooperation among business groups is efficient.