Corporate Social Responsibility

Corporate Social Responsibility ("CSR")

Our aims are to provide excellent service to our customers, to provide a safe working environment for our employees and to create places where people will aspire to live.

The Company has been a member of the Kempen/SNS Smaller Europe Index since October 2003, membership being available only to companies with the very highest standards and practice in the three areas of business ethics, human resources and the environment. The Company is also a constituent member of the FTSE 4 Good Index.

HEALTH AND SAFETY

As a Group, the health and safety of our employees, visitors, contractors and members of the public is of the highest importance. Our safety culture is underpinned by the application of five Strategic Safety Drivers: Simplification, Education, Engineering, Engagement and Enforcement. A Group Strategic Health and Safety Plan for 2008-2010 was presented to the Board in August 2007. The plan, detailing objectives and targets for safety performance and improvement, has been published and delivery against the targets is monitored.

Group Accident Statistics

Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 1995 (“RIDDOR”)

2007 All RIDDOR Reportable Accidents (includes Major Injuries)	2006 All RIDDOR Reportable Accidents (includes Major Injuries)	% of change
35	36	(-) 3%

2007 All RIDDOR Major Injury Reportable Accidents	2006 All RIDDOR Major Injury Reportable Accidents	% of change
2	4	(-) 50%

2007 All Accidents	2006 All Accidents	% of change
139	157	(-) 11%

Group Five Year Trend Analysis

2007 RIDDOR Reportable Accidents	2003 RIDDOR Reportable Accidents	% of change
35	58	(-) 40%

2007 All Accidents	2003 All Accidents	% of change
139	217	(-) 36%

Personnel

A new Group health and safety manager was appointed in March 2007 and is responsible for driving strategic safety management and sharing of best safety practices across all of the businesses within the Group. Scottish port operations appointed a new health and safety manager in May 2007 with a wide health and safety management career background including a period as a health and safety executive field inspector. In October 2007 the Port of Tilbury enlarged its health and safety department with the appointment of a member of the Forth Ports graduate training programme to the position of safety, health and environment officer.

Scottish Port Operations

Safety seminars were held in relation to the Scottish port operations in February and September, attended by the Scottish Ports Director, and senior management and safety representatives, as well as external participants from trade unions. The seminars covered a number of issues including slips, trips and falls, working near water, engineering safety, workplace transport and line handling. Following the meetings action plans were developed which included reviews of risk assessments and the creation of a work transport DVD.

We reported last year that behavioural safety would be a particular focus for 2007. The February safety committee seminar was attended by external consultants with expertise in behavioural safety. Following this a behavioural safety programme was introduced which has as its aim the attainment of an improved safety culture based on improving safety performance through addressing attitudes and mindsets. Phase 1 of the programme was concluded in 2007 with seven behavioural safety workshops having been held with over 100 members of staff from all Scottish ports attending. Each member of staff agreed to a personal action plan which was reviewed at further workshops held in October. The feedback from these workshops will be used in 2008 in phase 2 of the programme with the introduction of behavioural safety forums.

Port of Tilbury

Port of Tilbury and UNITE have agreed and signed a Safety Partnership Agreement for 2008-09. This document details the commitment of both parties to further improving safety standards and reducing accident rates by delivering a series of objectives and initiatives. The agreement also details both parties' commitment to delivering the objectives identified by the Safer Ports Initiative 2.

The second annual Port of Tilbury Safety, Health and Environmental forum was held in March 2007. The event was attended by a cross section of the port including port management, port staff and health & safety representatives. The event focused on the themes of accident reduction, implementation of Safer Ports Initiative 2 and sustainable improvement in health and safety performance and monitoring in partnership with the trade union health and safety representatives.

The Port of Tilbury/T&GWU partnership health and safety awareness training programme has continued throughout the year with the Enterprise Distribution Centre (EDC) and grain and bulks asset employees all attending a one day workshop with a tutor from the London Metropolitan University.

In readiness for the introduction on 1st July 2007 of the Smoke Free Workplace Regulations 2007, a thorough review of all existing arrangements was undertaken to ensure compliance. This was satisfactorily concluded in June 2007.

Following a strategic review, it has been decided to introduce an Integrated Management System (IMS) within Port of Tilbury integrating three technical disciplines namely Safety and Health, Environment and Quality (SHEQ). This will align the current port accreditations to the international standards for Quality Management BSEN ISO 9001, Environmental Management ISO 14001 and Health and Safety Management OHSAS 18001.

Port of Tilbury continues to be involved in all core activities of Port Skills and Safety Limited (PSSL) including attendance at the national accident prevention officers' meetings and other special work groups. In addition, Perry Glading, Managing Director Port of Tilbury continues to be a member of the PSSL management board. PSSL is the port industry body with a remit to work with its subscribers and other external agencies on promoting high standards of health and safety and skills competence within the port industry.

Following the national launch of the Safer Ports Initiative 2 in 2006, Port of Tilbury developed a matrix table containing 15 minimum health and safety criteria. All asset areas and departments have been subject to internal verification in order to ensure that these criteria are embedded within the business. This initiative was concluded in June 2007 and the table continues to provide an audit tool to ensure that compliance is being sustained.

Property Division

A site co-ordination manual for Western Harbour and Granton has been produced by the property team, with the intention of promoting construction systems that implement best practices to provide a clean, efficient & safe building environment.

In total during 2007 there were 4 accidents/incidents that were reportable by our principal contractor to the HSE under the RIDDOR 1995 Regulations. This led to a 2007 Accident Frequency Rate of 0.80. The latest available construction industry statistics released by the Health and Safety Executive show a 3 year average Accident Frequency Rate for the industry in general to be 1.67.

The Property Division continues to promote Continuing Professional Development (CPD) for all staff by hosting a series of presentations and lectures which covered a diverse range of subjects such as the Construction (Design and Management) Regulations 2007.

Audit

The Group continues to use a hierarchical system of internal and external process safety audits to measure, monitor and demonstrate compliance with all relevant health and safety legislation and internal safety management procedures.

The second British Safety Council 5 star audit at Port of Tilbury was undertaken over 5 days in June 2007 and we are pleased to report that a score was achieved which merited a further 5 star award. The Certificate was presented to the Company at a ceremony held at Lords Cricket Ground in September 2007.

Scottish port operations' 5 star audit was re-scheduled from November 2007 to February 2008 to allow the new health and safety team to further develop the safety management systems and it is pleasing to note that after a four day British Safety Council Audit in February 2008 the Scottish ports operation also achieved a 5 star award.

EMPLOYEES

Industrial Relations and Manpower

Our employees play a key role in the success of the Group. We have a stable workforce with relatively low turnover. Our total employee headcount rose during 2007, primarily due to the purchase of Nordic. At the year end the total employee headcount was as follows:

Scottish Operation	525
Tilbury	611
Nordic	110
Total Group	1,246

More than forty per cent of the Group’s employees have more than ten years of service and a third have over twenty years of service. Each year the Board hosts a long service awards dinner for those employees with twenty five years' service.

We recognise the importance and value to our business of good industrial relations and there have been no days lost to industrial dispute since 1989.

Employee Involvement

The group wide information and consultation forums continue to provide great benefits and are held at both Group and local levels. At these meetings employees are encouraged to contribute ideas which would benefit our employees and our business. In 2007 a number of employees suggested that the Company adopt the Government’s Childcare Voucher Scheme and this was assessed and subsequently implemented.

In addition, the regular meetings with the recognised Trade Unions where matters of common interest are discussed continue to take place.

Training and Development

Training continues to be a priority for the Group for all levels of staff. This year's topics ranged from management training and development, through health and safety, including behavioural safety workshops, to training in the safe and efficient working of plant and the impact of the new Construct Design and Management Regulations. During the year the Group recruited a further two graduates to our graduate training scheme.

During 2007 there were 485 courses (521 – 2006) for 1,280 employees in Scotland (1,313 – 2006) and 1,152 courses (776 – 2006) for 2,170 employees (2,081 – 2006) in Tilbury. As Nordic did not become part of the Group until July 2007 we are unable to report comparable figures for the year. As part of our commitment to the development of our workforce we continue to support Vocational Qualifications, particularly Level 2 Cargo Operations for our port operators.

During the year South Tyneside College completed the bespoke new simulator system for training pilots and tug crews for both the Rivers Forth and Tay. The system and training tool is state of the art, allowing pilots and other marine personnel to simulate manoeuvring vessels of any size anywhere in our harbour area under any sea and weather conditions. The package also allows the tug crews to simulate towage either individually, or as part of a larger simulation of a vessel voyage in the harbour areas. It is proposed in the coming year that training on this system will be extended to VTS officers with simulation of river operations.

OUR COMMITMENT TO THE ENVIRONMENT

The main potential environmental impacts associated from our Group activities fall under the following broad categories:

Noise
Dust/air quality
Water pollution
Waste
Conservation
Climate change

The Group is committed to managing its ports, regeneration and recycling activities so as to limit insofar as practicable any adverse effects on the environment.

Each of our ports liaises with tenants, customers, regulators and other key stakeholders to communicate and share information on environmental and associated topics. These issues could include new initiatives, legislative changes and associated issues such as safety, security or port development.

Our property division continues to be committed to sustainable development across our sites, evidenced by the continued provision of land for affordable housing with two sites for up to 234 apartments being sold to Port of Leith Housing Association in 2007. Forth Ports is now the largest contributor of affordable housing in Edinburgh.

Following the acquisition of Nordic Recycling as part of the acquisition of Nordic we are actively examining the opportunities to increase the recycling capability of both our businesses and those of our customers.

Environment issues and performance against targets are reported on and discussed at the Environmental Management Committee Meetings in Tilbury and in Scotland at operational management meetings.

We reported last year that the Group had appointed the Edinburgh Centre for Carbon Management (ECCM) to undertake a climate change impact assessment for the year 2006 covering all group companies. As a result of the study's findings, we have begun an energy efficiency trial in one of our offices – Forth and Tay Navigation Service in Grangemouth. An energy champion has been appointed and tasked with monitoring energy use in the building, encouraging behavioural change and examining investment options to improve efficiency. Whilst this initiative is still in its infancy, the early signs are very encouraging with a considerable drop in energy consumption through behavioural change evident in the meter readings in the last quarter of the year. It is intended to extend this initiative throughout the Group in 2008. During 2008 we aim to work with the Carbon Trust to identify if there are areas where further savings could be made.

Transport

We continue to promote the movement of goods via shipping through our ports. The movement of goods via water remains more environmentally sustainable than moving goods via land through road or rail. Ships are more fuel efficient per tonne of cargo handled than road or rail and they do not contribute to the congestion issues on our road network. Movement of freight by ship reduces fuel use and therefore emissions, congestion and indeed the frequency of maintenance on the road network, thereby benefiting the economy as well as the environment.

With rising fuel costs and the growing awareness of the impact of transport on the environment our customers are also focussing much more on the sustainability of their businesses and it is becoming a key performance indicator in projects such as the London Olympics. The Olympic project in particular provides an excellent opportunity for Port of Tilbury to play a pivotal role in achieving the UK Government's stated aim of making the 2012 Olympics the "Green Games". Tilbury is working closely with the Olympic Delivery Authority and has already provided space for the Green Barge Company's barge terminal for the movement of construction materials to and from the Olympic site.

The majority of our ports have rail handling facilities and we have seen growth in rail traffic, particularly in Grangemouth, related to containers. 2007 saw almost a tenfold increase in containers entering the port from the rail link when compared to 2004. All of the coal for Cockenzie Power Station continues to be transported from Leith via train, and over the course of the year this amounted to 1.3 million tonnes of coal, which would otherwise have travelled by road through North Edinburgh.

At the Port of Rosyth, the new spine road, which links the port with the main M90 motorway and the Forth Road Bridge, was opened in February by the Prime Minister, the Rt Hon Gordon Brown MP. This new road has allowed traffic to enter the port from the M90 without having to travel through the town of Rosyth.

We reported last year that Forth Ports is part of a group, including SESTRANS, and Fife and Edinburgh Councils, which had appointed Hyder Consulting to carry out a feasibility study on a cross-Forth ferry between Fife and Edinburgh. The study was completed in 2007 and concluded that a viable service could be operated between Burntisland and Granton. It is hoped that with a preferred route now identified progress can be made this year towards funding of the infrastructure investment required to allow the service to commence. In parallel Stagecoach PLC also carried out a 2 week hovercraft trial from Kirkcaldy to Portobello in July 2007.

The property division continues to monitor the options for construction materials to be brought in for Granton, Western Harbour and the Leith Docks Development Framework (“LDDF”) via ship rather than road.

Energy

In the report last year we announced that there were a number of renewable initiatives under review across the Group.

Following that review it was decided to focus on on-site renewable energy generation. In Scotland, Port of Dundee was identified as having potential as a renewable energy hub and the port has received a number of inquiries from customers involved in both manufacture of renewables infrastructure and importation of materials.

Tilbury has made significant progress on two planning applications for renewables generation within the port. The first of these is an application by the port for the installation of four wind turbines capable of generating 24710 mWh of electricity representing approximately 30 per cent of the port's current electricity requirements. Tilbury is also supporting an application by Tilbury Green Power on the site of one of our customers, Cargill plc, to convert their facility at Tilbury to an energy from waste plant. Both of these applications are expected to be heard in the first half of 2008.

The property division is also continuing work, as part of the masterplanning for the LDDF, on identifying sources of on-site generation which would be appropriate for, and in keeping with, the Masterplan.

Recycling

The acquisition in July 2007 of Nordic Recycling Limited (“NRL”), which operates a MRF at Tilbury and a paper recycling operation at Chatham, provides a number of exciting opportunities for the Group. In addition to the potential to offer recycling services to both new and existing customers in both ports and property, NRL’s expertise is available to all Group companies in striving to further improve our recycling rates.

The initiatives we reported last year are all continuing with substantial benefits to the Group. The Port of Tilbury recycling scheme continues to be a success and has been extended to segregate waste such as timber to ensure it is recycled and not disposed to landfill and all paper and cardboard is collected and recycled without cost. In addition Tilbury is introducing a compactor to compress waste reducing the number of collections by 150 each year saving 50,000 lorry miles. Last year we advised that a recycling initiative was being examined for Grangemouth. This has been successfully implemented, diverting in the region of 600 kg of waste from landfill every month. The scheme was extended to Leith in November and we expect to roll the project out to the remaining Scottish Ports in the course of this year. 89% of the waste (by volume) uplifted from the Grangemouth logistics shed is now being recycled through on site sorting by our staff. We are pleased to report an increase, for the third year running in the number of trees saved by our confidential shredding service - 132 trees across the Scottish offices, compared with 89 in 2006.

The Group also uses recycled aggregate where possible in preference to virgin aggregate, particularly for reclamation or ground level works. In 2006 we reported the creation of Forthside L.C. and in 2007 through this vehicle the property division utilised 165,000 m3 of inert recycled materials that would otherwise have gone to landfill, in the creation of Western Harbour Park.

Environmental Management

The Port of Tilbury continues to expand its certified ISO 14000:2004 Environmental Management System to new asset areas. Last year we reported that the target for 2007 was accreditation for the conventional asset area and we are delighted to report that this was achieved. Tilbury remains on target for the last asset area, the Grain and Bulks Division to achieve accreditation in 2008. Once this is achieved the whole Port of Tilbury will be covered by the ISO 14000:2004 environmental management standard.

NRL has a target to achieve ISO 14000:2004 accreditation during 2008 for all recycling activities. This is a challenging target and one that the team at Nordic has already begun work on with the help of an external consultant. Similarly the Marine Department in Scotland is working towards ISO 14000:2004 accreditation in 2008. The Marine Department includes Forth and Tay Navigation Service, Conservancy, Forth Estuary Towage Limited, and the pilot boats.

Following on the work done by the Ecoports Foundation reported on last year the Scottish Ports operation is currently in the process of appointing a consultant to advise on the introduction of an environmental management system for the rest of the Scottish operations.

As part of the EU marine Consolidated European Reporting System, Safe Sea Net has been developed to cover all European Ports. The Maritime and Coastguard Agency has developed its links into this system and requires all UK ports to enter safety and environmental information (including waste, dangerous or potentially polluting goods and incident reporting), which then links to the EU database. The Group already has the capability to provide this information automatically through Integrated Port Operating System software and has already begun to do so.

Pollution Avoidance and Control

Our ports handle a diverse range of cargoes, many of which have the potential to cause damage to the environment if great care is not taken. Oil is handled at many of our facilities or at facilities within our harbour authority areas. Even where oil is not handled as a cargo, oil is present as a fuel or lubricant for the ships that ply our waters and enter our ports. Each of our ports has its own oil spill plan or is covered by our overarching framework plan for the Firth of Forth: Clearwater Forth ("CF"). During 2007, the CF plan was reviewed and approved by the Maritime and Coastguard Agency (MCA). Similarly, the Port of Tilbury oil spill plan has been reviewed and approval from the MCA is expected early in 2008.

As reported in previous years, regular exercises are carried out to test the robustness of the plans. This year's CF exercise was a major ‘tier 2’ exercise - ‘Exercise Black Bay’ - utilising our Marine Emergency Centre in Grangemouth to manage the marine elements of the exercise. This year, for the first time, we had a Forth Ports liaison officer in the shoreline response centre at Fife Council’s new emergency centre, thus giving immediate access to the shoreline command and control team and to the Environment Group, which consists of environmental experts from local authorities, Scottish Natural Heritage and the Government’s Fisheries Research Laboratory. Participants also included BP, Briggs Environmental Services, RSPB, SSPCA, the MCA, the Scottish Government and towage companies in the Forth, who provided tugs for exercise purposes.

As a responsible landlord we take a firm and pro-active approach to ensuring that our tenants comply with their environmental obligations, including remediation where required. As a statutory harbour authority we have legal duties regarding monitoring, reporting and prosecuting in relation to acts of pollution in our waters.

Environmental Research

Forth Ports have reached an agreement with the University of Dundee to fund a post-graduate research student to examine changes in relative sea level in the Firths of Forth and Tay. There is little up-to-date data relative to sea level change in the Forth and Tay. The aim of this project is to identify the historic changes in sea level and to use this to identify what changes, if any, we can expect in the future at our ports.

Natural Environment

We are particularly aware of the importance of balancing port and property development with the protection of the habitats and species around our ports. The designations of protection range from the highest levels of European Protection through Special Areas of Conservation and Special Protection Areas to national legislation through the Sites of Special Scientific Interest network of sites, and in some cases local designations. These, along with the impact of the new policies under the Water Framework Directive are regularly considered in port and property development discussions.

As the statutory harbour authority for the Firths of Forth and Tay we believe that it is important that we remain members of the Forth Estuary Forum (www.forthestuaryforum.co.uk), and the Tay Estuary Forum (www.dundee.ac.uk/crsem/TEF). In Tilbury, as a major port operator on the Thames we are an active partner in the Thames Estuary Partnership (www.thamesweb.com ). The aim of these organisations is to promote the wise and sustainable use of their various geographic areas and our commitment to these organisations includes financial donations, membership fees and in-kind contributions, including office accommodation and substantial management time.

Forth Ports sit on the Forth Area Advisory Group, which is tasked with preparing the river basin management plan for the Forth under the Water Framework Directive. As part of the work for the Water Framework Directive, we continue to allow the Scottish Environment Protection Agency to place monitoring equipment on some of our navigation buoys in the Forth and Tay.

Port of Tilbury is a Gold corporate member of the Essex Wildlife Trust which manages 7 visitor centres and 87 nature reserves in the Essex area.

Security

All of our ports remain compliant with the International Ship and Port Facility Security Code (ISPS) and the associated EU and UK implementing legislation. All of our port facility security plans have been revised during 2007 in light of new guidance from the Department for Transport. We await proposals from the Department for Transport on the implementation of the EU Port Security Directive.

COMMUNITY RESPONSIBILITY AND INVOLVEMENT

Education

Port of Tilbury has enhanced its partnership agreement with Thurrock and Basildon College and remains a significant business partner in the Academy of Logistics and Transport. Employees from the port have visited a number of local schools and colleges through the year, including Chafford Hundred School and the Gateway Academy, contributing to careers events, assisting with the preparation of CV's and participating in interview training.

The property team has been working with Heriot Watt University third year students on their external site projects with the Hub at Leith being used as the model. Members of the property team stage the site visits and attend the presentations to assist in judging the quality of the work.

Forth Ports also sponsored the water safety section of a work book published by an organisation called the Risk Workshop which trains school children in the Edinburgh and Lothian area on risk and safety issues.

Performing Arts in the Community

For the third year running the Tilbury cruise terminal was used to stage a variety show, based on the Twelve Days of Christmas which ran for ten days in December. It was produced by the arts team at Thurrock District Council and sponsored by the Port of Tilbury. The event involved six professional actors, with participation from fifty community groups and forty five local schools. The success of the show was demonstrated by the Port of Tilbury and Thurrock Council winning the ‘Community Award’ at a prestigious ceremony at the Theatre Royal, Bury St Edmunds. Tilbury has also agreed to host a week long event at the cruise terminal in July 2008 where the Royal Opera House will lead an event designed to encourage community involvement in music and the performing arts.

Forth Ports' development site opposite Ocean Terminal saw two major events in 2007. The first of these was "Fuerzabruta" which was the most popular event at the Edinburgh Festival Fringe. The spectacular show held in a dramatic black tent attracted over 20,000 people over the five week run. The second event for which Forth Ports was co-sponsor, “Twas the Night Before Christmas”, was an entertaining retelling of the classic Christmas tale. It was held on 24th November and attracted nearly 6,000 people. The show formed part of the Edinburgh Winter Festival and was the first time a winter festival event had been held outside Edinburgh city centre.

Forth Ports were also the headline sponsor for the Leith Festival (held between 1st and 10th June). The festival has a long history spanning over a hundred years and hosted 150 events at 40 locations with over 30,000 people attending the music, drama, theatrical, comedy, sporting and outdoor events.

Community Engagement

Port of Dundee has again made an in kind contribution to both the North Carr and Unicorn historic vessels berthed in Victoria Dock and, the Port of Leith continues to support the historic vessel SS Explorer.

The Forth Ports’ property team participated in the Rob Roy Challenge during June raising £3,500 for a variety of local children’s charities. This charity fund-raising event included a 17-mile walk from Drymen to Callander and a 38 mile cycle from Callander to Kenmore at the north end of Loch Tay.

Forth Ports continue to sponsor a number of local community publications in the Leith area. The Leith Harbour and Newhaven Community News is distributed to local residents and is a focus for debate on local issues. The Leither Magazine is a free community magazine with links to youth organisations, community facilities and local businesses. Forth Ports also part-sponsored the East Coast Sailing Week, based at Granton. This year 75 yachts and 300 sailors took part in the event and there are plans to re-stage the event in 2010.

Port of Tilbury has supported a variety of charities this year, including St Luke’s Hospice, Demelza House Childrens Hospice, Tilbury Riverside Project and the Surestart Children’s centre.

For the third year running, Port of Tilbury sponsored the ‘Mayor’s Award’ at the Thurrock Council Civic Awards. The Mayor's Award is presented to an individual who has performed in a specific single act of bravery or courage or who has overcome exceptional difficulties. The nominees are selected and chosen by the people of Thurrock. During the year, the port has continued its support for a number of community groups and has also extended that support to a number of new groups, including Thurrock Council family Services (Christmas Gift appeal), Thurrock District Scouts and Guides, Hawkwell Athletic Football Club, Essex Wildlife Trust, Orsett Show, Thurrock Rugby Club U11’s, and the Essex Racial Equality Council.

Management Involvement

Members of the Management Team hold a variety of posts in organisations whose aim is to improve the community, environmental and economic health of the areas in which our business operates:

Charles Hammond, the Group Chief Executive, is also the Chairman of Scottish Enterprise, Edinburgh and Lothians (SEEL) and an advisory member of the board of Scottish Enterprise. He also sits on the Waterfront Development Partnership Board.
Perry Glading, the Managing Director, Port of Tilbury, is the Chairman of the Academy of Transport and Logistics for Thurrock and Thames Gateway represents the Group on the management board of Port Skills and Safety Limited, the organisation which promotes safety in the port industry.
Morag McNeill, the Group Company Secretary, is a member of the Waterfront Recruitment Initiative.
Nathan Thompson, the Managing Director of the Property Division, sits on the Waterfront Development Partnership Board.
Derek McGlashan, the Security and Environment Manager, is a Director of the Forth Estuary Forum, an Honorary Research Fellow in the Department of Geography at the University of Dundee and has been appointed to represent the United Kingdom Major Ports Group on the new Sustainable Seas Task Force, an advisory Group set up by the Environment Secretary of the Scottish Government.
Malcolm Butchert, Project Manager, Property Division, is a member of the Waterfront Recruitment Initiative.

As at 17th March 2007

Corporate Social Responsibility