team energy 2010 sustainability report disclosures

ContentsIndicator and Description Indicator and Description Reported Page No. Reported Page No.

Strategy and Analysis

Organizational Profile

ENVIRONMENTAL PERFORMANCEDisclosure on Management Approach

SOCIAL PERFORMANCE: Labor Practices and Decent WorkDisclosure on Management Approach

Report Parameters

Governance, Commitments, and Engagement

1.

1.1.

2.

2.1.2.2. 2.3. 2.4.2.5. 2.6.2.7.2.8.2.9.2.10.

3.

3.1.3.2. 3.3. 3.4.3.5. 3.6.3.7.3.8.3.9.3.10.3.11.3.12.3.13.

4.

4.1.4.2. 4.3. 4.4.4.5.4.6.4.7.4.8.4.9.4.10.4.11.4.12.4.13. 4.14. 4.15. 4.16.4.17.

EN1EN2EN3 EN4EN5EN6

EN7EN8EN9EN10EN11

EN12

EN13 EN14EN15

EN16EN17EN18EN19EN20EN21EN22EN23 EN26

EN27EN28

EN29

EN30

12 121213131314141616

16161616161919191920202121

2121222222232323282828303031323233

525253555556

5657575759

59

606162

636364646565666767

6767

68

69

747678

7878

79

80

81

828283

8484

86

40

41

424243

43

45

45

47

Statement from the most senior decision-maker of the organization

Name of organizationPrimary brands, products, and/or servicesOperational structureLocation of HeadquartersCountries where the company operatesNature of ownership and legal formMarkets served Scale of the company Significant size, structure or ownership changes in 2010Awards received in 2010.

Reporting period Date of most recent previous report Reporting cycleContact point for questions about the report Process for defining report contentBoundary of the report State any specific limitations on the scope or boundary of the reportReporting on other corporate entities or subsidiariesData measurement techniques and the bases of calculationsRestatements of information Significant changes from previous reporting periods GRI Index Accuracy and completeness of report

Governance structure of the company Whether the Chair of the Board is also the CEO Independence of the Board Shareholder and employer feedback mechanisms Linkage between performance and executive compensation Conflicts of interest Qualifications of the Board Relevant corporate mission, values, codes of conduct, and principles Board oversight with regards to risks, opportunities, and international standards Processes for evaluating the Board’s own performance How the precautionary principle is addressed Externally developed charters, principles or other initiatives Memberships Stakeholder groups engaged by the organization Basis for identification and selection of stakeholders with whom to engageApproaches to stakeholder engagement Key topics raised through stakeholder engagement

ECONOMIC PERFORMANCEDisclosure on Management Approach

EC1

EC2

EC3EC4EC5

EC6

EC7

EC8

EC9

Direct economic value generated and distributed, including revenues, operating costs, employee compensation, donations and other community investments, retained earnings, and payments to capital providers and governmentsFinancial implications and other risks and opportunities for the company’s activities due to climate changeCoverage of the company’s defined benefit plan obligationsSignificant financial assistance received from governmentRange of ratios of standard entry-level wage compared to local minimum wage at significant locations of operationPolicy, practices, and proportion of spending on locally based suppliers at significant locations of operationProcedures for local hiring and proportion of senior management hired from the local community at significant locations of operationDevelopment and impact of infrastructure investments and services provided primarily for public benefit through commercial, in-kind, or pro bono engagementUnderstanding and describing significant indirect economic impacts, including the extent of impacts

Materials used by weight or volumePercentage of materials used that are recycled input materialsDirect energy consumption by primary energy sourceIndirect energy consumption by primary sourceEnergy saved due to conservation and efficiency improvementsInitiatives to provide energy-efficient or renewable energy-based products and services, and reductions in energy requirements as a result of these initiativesInitiatives to reduce indirect energy consumption and reductions achievedTotal water withdrawal by sourcesWater sources significantly affected by withdrawal of waterPercentage and total volume of water recycled and reusedLocation and size of land owned, leased, managed in, or adjacent in, or adjacent to, protected areas and areas of high biodiversity value outside protected areasDescription of significant impacts of activities, products, and services on biodiversity in protected areas and areasHabitats protected or restoredStrategies, current actions, and future plans for managing impacts on biodiversityNumber of IUCN Red List species and national conservation list species with habitats in areas affected by operations, by level of extinction riskTotal direct and indirect greenhouse gas emissions by weightOther relevant indirect greenhouse gas emissions by weightInitiatives to reduce greenhouse gas emission and reductions achieved (also in EN5)Emissions of ozone-depleting substances by weightNOX , SOX, and other significant air emissions by type and weightTotal water discharge by quality and destinationTotal weight of waste by type and disposal methodTotal number and volume of significant spillsInitiatives to mitigate environmental impacts of products and services, and extent of impact mitigationPercentage of products sold and their packaging materials that are reclaimed by categoryMonetary value of significant fines and total number of non-monetary sanctions for non-compliance with environmental laws and regulationsSignificant environmental impacts of transporting products and other goods and materials used for the organization’s operations, and transporting members of the workforceTotal environmental protection and expenditures and investments by type

Fully ReportedNot Applicable

LA1LA2LA3

LA4LA5

LA6

LA7

LA8

LA9LA10LA11

LA12LA13

LA14

Total workforce by employment type, employment contract, and regionTotal number and rate of employee turnover by age group, gender, and regionBenefits provided to full-time employees that re not provided to temporary or part-time employees, by major operationsPercentage of employees covered by collective bargaining agreementsMinimum notice period(s) regarding significant operational changes, including whether it is specified in collective agreementsPercentage of total workforce represented in formal joint management-worker health and safety committees that help monitor and advise on occupational health and safety programsRates of injury, occupational diseases, lost days, and absenteeism, and number of work-related fatalities by regionEducation, training, counseling, prevention, and risk-control programs in place to assist workforce members, their families, or community members regarding serious diseasesHealth and safety topics covered in formal agreements with trade unionsAverage hours of training per year per employee by employee categoryPrograms for skills management and lifelong learning that support the continued employability of employees and assist them in managing career endingsPercentage of employees receiving regular performance and career development reviewsComposition of governance bodies and breakdown of employees per category according to gender, age group, minority group membership, and other indicators of diversityRatio of basic salary of men to women by employee category

ContentsIndicator and Description Indicator and Description Reported Page No. Reported Page No.

ELECTRIC UTILITIES SECTOR SUPPLEMENTSOCIAL PERFORMANCE: Human RightsDisclosure on Management Approach

EU1EU2EU3EU4EU5EU6EU7

EU8EU9EU10

EU11EU12EU13EU14EU15

EU16

EU17

EU18

EU19

EU20EU21

EU22

EU23

EU24

EU25

EU26EU27

EU28EU29EU30

SOCIAL PERFORMANCE: Society Disclosure on Management Approach

SO1

SO2SO3SO4SO5SO6

SO7

SO8

Nature, scope, and effectiveness of any programs and practices that assess and manage the impacts of operations on communities, including entering, operating, and exitingPercentage and total number of business units analyzed for risks related to corruptionPercentage of employees trained in organization’s anti-corruption policiesActions taken in response to incidents of corruptionPublic policy positions and participation in public policy development and lobbyingTotal value of financial and in-kind contributions to political parties, politicians, and related institutions by countryTotal number of legal actions for anti-competitive behavior, anti-trust and monopoly practices and their outcomesMonetary value of significant fines and total number of non-monetary sanctions for non-compliance with laws and regulations

SOCIAL PERFORMANCE: Product ResponsibilityDisclosure on Management Approach

PR1

PR2

PR3

PR4

PR5

PR6

PR7

PR8

PR9

Life cycle stages in which health and safety impacts of products and services are assessed for improvement, and percentage of significant products and services categories subject to such proceduresTotal number of incidents of non-compliance with regulations and voluntary codes concerning health and safety impacts of products and services during their life cycle, by type of outcomesType of product and service information required by procedures, and percentage of significant products and services subject to such informationTotal number of incidents of non-compliance with regulations and voluntary codes concerning product and service information and labeling, by type of outcomesPractices related to customer satisfaction, including results of surveys measuring customer satisfactionPrograms for adherence to laws, standards, and voluntary codes related to marketing communications, including advertising, promotion, and sponsorshipTotal number of incidents of non-compliance with regulations and voluntary codes concerning marketing communications, including advertising, promotion, and sponsorship by type of outcomesTotal number of substantiated complaints regarding breaches of customer privacy and losses of customer dataMonetary value of significant fines for non-compliance with laws and regulations concerning the provision and use of products and services

Installed capacity, broken down by primary energy source and by regulatory regimeNet energy output broken down by primary energy source and by regulatory regimeNumber of residential, industrial, institutional and commercial customer accountsLength of above and underground transmission and distribution lines by regulatory regimeAllocation of CO2e emissions allowances or equivalent, broken down by carbon trading frameworkManagement approach to ensure short and long-term electricity availability and reliabilityDemand-side management programs including residential, commercial, institutional and industrial programsResearch and developmentProvisions for decommissioning of nuclear power sitesPlanned capacity against projected electricity demand over the long term, broken down by energy source and regulatory regimeAverage generation efficiency of thermal plants by energy source and regulatory regimeTransmission and distribution losses as a percentage of total energyBiodiversity of offset habitats compared to the biodiversity of the affected areasProcesses and processes to ensure the availability of a skilled workforcePercentage of employees eligible to retire in the next 5 and 10 years broken down by job category and by regionPolicies and requirements regarding health and safety of employees and employees of contractors and subcontractorsDays worked by contractor and subcontractor employees involved in construction, operation and maintenance activitiesPercentage of contractor and subcontractor employees that have undergone relevant health and safety trainingStakeholder participation in the decision making process related to energy planning and infrastructure developmentApproach to managing the impacts of displacementContingency planning measures, disaster/emergency management plan and training programs, and recovery/restoration plansNumber of people physically or economically displaced and compensation, broken down by type of projectPrograms, including those in partnership with government, or to improve or maintain access to electricity and customer support servicesPractices to address language, cultural, low literacy and disability related barriers to accessing and safely using electricity and customer support servicesNumber of injuries and fatalities to the public involving company assets, including legal judgments, settlements and pending legal cases of diseasesPercentage of population unserved in licensed distribution or service areasNumber of residential disconnections for non-payment, broken down by duration of disconnection and by regulatory regimePower outage frequencyAverage power outage durationAverage plant availability factor by energy source and by regulatory regime

External Review Committee (ERC)

Fully ReportedNot Applicable

HR1

HR2

HR3

HR4HR5

HR6/HR7

HR8

HR9

Percentage and total number of significant investment agreements that include human rights clauses or that have undergone human rights screeningPercentage of significant suppliers and contractors that have undergone screening on human rights and actions takenTotal hours of employee training on policies and procedures concerning aspects of human rights that are relevant to operations, including the percentage of employees trainedNon-DiscriminationTotal number of incidents of discrimination and actions takenOperations identified in which the right to exercise freedom of association and collective bargaining may be at significant risk, and actions taken to support these rightsChild Labor/Forced and Compulsory LaborOperations identified as having significant risk for incidents of child labor/forced or compulsory labor, and measures taken to contribute to the elimination of child labor/forced or compulsory laborPercentage of security personnel trained in the organization’s policies or procedures concerning aspects of human rights that are relevant to operationsTotal number of incidents of violations involving rights of indigenous people and actions taken

878888

89

8989

90

90

91

93

9697979798

99

99

100

101

102

102

102

102

103

103

103

105105106106107107108

109109109

110110110111112

112

114

114

116

116116

118

118

119

120

120120

120121121

123

4 TeaM Energy 2010 Sustainability Report TeaM Energy 2010 Sustainability Report 5

GRI Index – Sustainability Reporting GuidelinesThis report, in which we announce our social, environmetal, and economic performance for the period between January 1st 2010 and December 31st 2010, is based upon the G3 Sustainability Reporting Guidelines of the Global Reporting Initiative (GRI), an internationally recognized reporting standard.


OVERVIEWTeaM Energy published its first self-declared C- Level Sustainability Report based on the Global Reporting Initiative (GRI) G3 Guidelines in 2009. The following year 2010, the company expanded its reporting coverage by producing its second GRI-compliant Report with an A+ level of application. This required a third party assurance and subsequently a compliance check by the Global Reporting Initiative, a non-governmental organization with its Secretariat based in Amsterdam, the Netherlands, that pioneered in the development of the widely used sustainability reporting framework for organizations around the world.

TeaM Energy engaged a panel of four independent experts, comprising the External Review Committee (ERC) through the University of Asia and the Pacific (UA&P) acting as Lead Organizer and Convenor of the ERC, to assess the company’s sustainability performance as reflected in its 2010 report.

TeaM Energy and UA&P jointly agreed on the selection of the ERC members, each one with a distinct role of taking into context those conditions that directed the company’s initiatives in measuring and reporting sustainability in the key areas of economic, environmental, social and governance performance.

What follows is the collective Assurance Statement of the External Review Committee that reviewed TeaM Energy’s 2010 Sustainability Report. The views and comments expressed herein reflect those of the individual experts and do not in any way represent those of their respective organizations or of the University of Asia and the Pacific.

Assurance Statement of theExternal Review CommitteeScope of Engagement and Activities Undertaken

We started our work as External Review Committee in May 2011 beginning with orientation visits to TeaM Energy’s corporate offices and subsequent field visits to its power plants in Pagbilao, Quezon and Sual, Pangasinan, including consultative sessions with the company’s identified stakeholders. Primarily, our role as ERC members was based on GRI’s definition of assurance referring to “activities designed to result in published conclusions on the quality and content of the report”.

We embarked on the assurance work that made specific reference to the G3 principles on Sector Supplement on Electric Utilities that guided TeaM Energy in its disclosure of key performance indicators (KPIs) with the highest level of sustainability application (A+). Overall, the definitive draft of the 2010 Sustainability Report contained 101 KPIs for review broken down into: 16 KPIs for economics, 57 for social and 28 for environmental aspects. We noted that there was a significant increment from the previous year’s 21 KPIs used to define its report content.

The ERC members, in devoting their time and expertise, received remuneration through UA&P. On the other hand, TeaM Energy shouldered the cost of professional fees and all related out-of-pocket expenses in the conduct of the assurance work which involved about 60-man-days over a period of five months.

In addition to our collective statement, we also provided TeaM Energy with more detailed individual reports, reflecting our observations on its sustainability performance gathered through our interactive sessions with the company’s senior management and its Technical Working Group, including local data owners and external stakeholders.

Assurance Framework

To distinctly harness our role as providing third-party assurance, we employed the GRI Principles for Defining Report Content and Principles for Ensuring Report Quality as framework in assessing TeaM Energy’s 2010 Sustainability Report.

To define report content the principles used are: materiality, stakeholder inclusiveness, sustainability context, and completeness. For ensuring report quality, we focused on the principles of balance, timeliness, accuracy, reliability, and charity.

These sustainability standards invariably helped the assurance team in looking at the company’s wide range of strategic and operative processes influencing its performance while taking into consideration the information from a broad spectrum of stakeholders consulted during the field visits. Our Findings

Team Energy ‘s resolve to expand its sustainability reporting with the highest level of application is a clear manifestation of its commitment to address the challenges affecting its key areas of operation in the economic, social, environmental and governance aspects.

General Observations

Materiality and stakeholder inclusiveness. Any sustainability undertaking should be a continuous improvement process. We recognize TeaM Energy’s expanded coverage of its sustainability reporting with 101 KPIs (from only 21 KPIs reported in 2009) and the conduct of a thorough materiality testing.


This year, specific data owners from all departments of the company assisted in the generation of information specific to the company’s core area of business. The assurance team commends the enhancement of these data collection efforts.

Demonstrating clarity and reliability, the report established the Company’s role in uplifting the conditions in their plants’ immediate communities and environments through specific programs and activities, putting into proper context its sustainability efforts, not just for its own exclusive benefit but that of the greater community.

Comparability. TeaM Energy’s adherence to the principle of comparability is manifested owing to the set of indicators it can now use to track its past performance and to target its future goals and objectives.

Material impact. We take reference to TeaM Energy’s supply contract with the Philippine’s National Power Corporation (NPC), in which its current financial report does not fully capture especially the material impact of its operations especially on the economy and the environment. For instance, the aggregate direct economic impact of the Company may actually be larger than what was actually recorded in its 2010 financial statement. The fuel transactions of TeaM Energy with the NPC are not presented in the financial statement as these are for the account of NPC. NPC procures and provides the fuel to TeaM for subsequent conversion to energy/electricity as provided in the ECA.

We are pleased to recognize that TeaM Energy’s 2010 report highlights its ongoing environmental efforts and initiatives, done in partnership with various sectors – from government agencies to non-profit organizations. Specifically notable is the partnership between TEFI and the Fauna & Flora International (FFI), which aims to provide assistance to communities of indigenous people in the municipality of General Nakar in Quezon Province. Both organizations vowed to sustain efforts in forest and biodiversity, as well as in reforestation for both upland and mangrove forests within the immediate vicinity of its plants. However, the report can benefit from having independently verifiable scientific data to support some of its key environmental core performance indicators such as those related to biodiversity of affected areas. An independent body to assess these environmental indicators can render the analysis of such indicators more reliable.

While the indicators included in the 2010 Sustainability Report are more comprehensive than the previous set, these can be better appreciated when compared over time, especially the economic indicators. Furthermore, the accuracy and overall quality of the report can significantly improve when analysis on the disclosures of social performance are analyzed in more detail. This can draw lessons for TeaM Energy to improve the impact analysis of its sustainability initiatives and therefore effectively showcase its accomplishments and capabilities.

Way Forward

Finally, TeaM Energy is highly encouraged to keep tab of the timely release of its sustainability reports to maximize the benefits derived from its extensive preparation. Sustainability reporting goes beyond performance reporting; it serves as an effective management tool that can help set goals and objectives, and aid in crucial decision-making activities to benefit both the company and the various stakeholders significantly influenced by its operation.

We congratulate Team Energy for its substantial compliance with GRI’s highest level of sustainability application. This milestone puts your company among the leaders in the pursuit of a sustainable future.

Members of the External Review Committee


Profile

10 TeaM Energy 2010 Sustainability Report

DisclosuresThis section sets the overall context for understanding our organizational performance and includes the company’s profile and governance.


Organizational Profile

2.1 Name of the organization

TeaM Energy is one of the Philippines’ largest independent power producers, with over 2,000 megawatts (MW) of installed generating capacity.

It is composed of four legal entities: parent company TeaM Energy Corporation (TEC), our subsidiaries TeaM Sual Corporation (TSC) and TeaM (Philippines) Energy Corporation (TPEC); and our social development arm, TeaM Energy Foundation, Inc. (TEFI).

2.2 Primary brands, products, and/or services

We operate and maintain two coal-fired facilities: the Pagbilao Power Station in the province of Quezon, which has installed capacity of 750 megawatts (MW) and the Sual Power Station in the province of Pangasinan, with 1,200 MW installed capacity. We also own a 20 percent stake in the natural gas-fired plant in Ilijan, Batangas, which has an installed capacity of 1,200 MW. These three power plants have long-term Energy Conversion Agreements (ECA) with the state-owned National Power Corporation (NPC): Sual (1999-2024), Pagbilao (1996-2025), and Ilijan (2001-2022).

Our combined generating capacity of around 2,200 MW accounts for 22% of the total dependable generating capacity in the Luzon grid, and 16% of the country’s dependable capacity.

In addition to the NPC, we also supply electricity to various electric cooperatives, economic zones, private companies, and the electricity market.

Through TEFI, our social development arm, we conduct sustainable programs on electrification, education, environmental stewardship, and engagement. TEFI partners with other non-governmental organizations or engages other entities to assist in the implementation of some of these programs.

2.3 Operational structure

Our operating companies and their primary businesses:

•TeaMEnergyCorporation(TEC):operatesandmaintainsthecoal-fired power plant in Pagbilao, Quezon

•TeaMSualCorporation(TSC):operatesandmaintainsthecoal-firedpower plant in Sual, Pangasinan

•TeaM(Philippines)EnergyCorporation(TPEC):sells,marketsand trades “excess electricity” (i.e., not contracted by the National Power Corporation) generated by the Pagbilao and Sual Power Plants. It also buys and sells electricity from other sources, and operates substation facilities.

•TeaMEnergyFoundation,Inc.(TEFI):conductssustainableprogramson electrification, education, environmental stewardship, and engagement.

In addition, TEC has a joint venture company with Mitsubishi Corporation called “TeaM Diamond Holding Corporation” (TDHC), which in turn owns 41 percent of KEPCO Ilijan Corporation, operator of the natural gas-fired plant in Ilijan, Batangas.

TEC, TSC and TPEC are each governed by a Board of Directors. They comprise of three divisions:

•Operations– covers the power plants, operations optimization (including integrated management systems, information technology, materials management or procurement, and security)

•Finance– covers controllership and tax, financial planning and management reporting, treasury, legal, human resources and corporate services

•BusinessDevelopment/CommercialAffairs – covers the capacity sourcing, energy supply and technical support, energy trading and financial services, and commercial affairs

In addition, the Office of the President also directs the Corporate Affairs group (composed of External Affairs and Strategic Planning, which includes Business Planning and Learning and Development), also common among TEC, TSC and TPEC.

TEFI conducts sustainable programs on electrification, education, environmental stewardship, and engagement. It is governed by its own Board of Trustees, and has an Executive Director and both regular and project employees.

2.4 Location of headquarters

TEC, TSC, TPEC and TEFI hold corporate offices at the CTC Building, 2232 Roxas Boulevard, Pasay City 1300, Philippines. The plant sites of TEC and TSC are in Pagbilao, Quezon and Sual, Pangasinan, respectively.

2.5 Countries where the company operates

TeaM Energy operates in the Philippines only. TeaM Energy Asia-Pacific Limited, a Bermuda-based subsidiary of TEC which was previously a holding company, was dissolved in 2010.

2.6 Nature of ownership and legal form

TEC is 50-percent owned by Tokyo Electric Power Co. International, B.V. (a wholly owned subsidiary of Tokyo Electric Power Co., Inc., the largest electric utility in Japan and the fourth largest electric utility in the world) and 50-percent owned by Marubeni Corporation, one of Japan’s biggest trading companies.

TEC also has a 48.79 percent stake in TDHC, a joint venture company with Mitsubishi Corporation, which owns 51.21 percent. TDHC owns 41 percent of KEPCO Ilijan Corporation, which operates the Ilijan Power Plant in Batangas.

TSC and TPEC are wholly owned subsidiaries of TEC.

TEFI, a foundation, is a non-stock, non-profit corporation.

2,200 MW TeaM Energy’s combined generating capacity of around 2,200 MW from the three power plants (Pagbilao, Sual and Ilijan) represents about a third of the total dependable generating capacity in the Luzon grid


2.7 Markets served

The electricity generated by TeaM Energy’s power plants in Pagbilao and Sual are supplied directly to the Luzon grid by National Power Corporation or NPC pursuant to their Energy Conversion Agreements (ECAs). The Power Sector Assets and Liabilities Management or PSALM now handles its generation assets and management as prescribed under the Electricity Power Industry Reform Act or EPIRA.

NPC/PSALM has appointed Therma Luzon, Inc. (TLI) and San Miguel Energy Corp. (SMEC) as the administrators of the generated electricity covered by the ECAs of TEC and TSC, respectively. As administrators, they assumed from NPC/PSALM the sale of power produced by the respective power facilities they administer and the trading thereof in the Wholesale Electricity Spot Market (WESM). Aside from selling their power output and trading it in the WESM, they are now responsible for procuring coal and other fuel for the two power plants, and closely coordinating with the plant operators. Excess electricity generated by the power plants which are not purchased by NPC/PSALM is sold by TeaM Energy (through subsidiary TPEC) to cooperatives, economic zones, private companies and the electricity market. It also buys electricity from other sources and sells them.

TEFI conducts nationwide social development programs but its primary beneficiaries are communities in Sual, Pangasinan and Pagbilao, Quezon.

2.8 Scale of the company

As of December 31, 2010, the company has a total of 748 employees in its three locations in the country (see chart below).

SUALRegular 297Contractual/ 0Project

PAGBILAORegular 263Contractual/ 0Project

CORPORATERegular 176Contractual/ 1Project

TEFIRegular 2Contractual/ 9Project

* The monetary amounts are in USD (consolidated) since USD is the functional currency of TeaM

Group. The figures are for the calendar year ending December 31, 2010 and are based on Interna-

tional Financial Reporting Standards.

Net Sales

$592.52M

Total capitalization broken down in terms of debt and equity

Loans$2.43B

Equity$698.75M

(Stocks and Additional Paid-in Captial Retained Earnings

are excluded)

Total Assets

$3.83B

PAGBILAO

Unit 12,021,960.10 MWH

Unit 21,755,471.50 MWH

Quantity of productsor services provided

Total Gross Generationfor 2010

SUAL

Unit 13,740,639.00 MWH

Unit 23,012,005.00 MWH

OperatingIncome

$380.64M


2.9 Significant size, structure or ownership changes in 2010

There were no significant changes in size and structure during the fiscal year 2010, except for the dissolution of TeaM Energy Asia-Pacific Limited in Bermuda. With this, TeaM Energy no longer has any offshore subsidiary.

2.10 Awards received in 2010

TeaM Energy garnered several awards in 2010, including: Sual Power Station IPP of the Year - Asian Power Awards DENR Seal of Approval Gawad Kaligtasan at Kalusugan (GKK) - Secretary’s Award

Pagbilao Power Station DENR Seal of Approval 2010 Zero Basura Olympics – Candidate Master

Report ParametersReport Profile

3.1 Reporting period

Calendar Year 2010

3.2 Dateofmostrecentpreviousreport

December 2009

3.3 Reporting cycle

Beginning with the 2010 report, bi-annual

3.4 Contact point for questions about the report

The External Affairs TeamCTC Building, 2232 Roxas BoulevardPasay City 1300, PhilippinesE-mail: [email protected] Telephone: +632 552 8000Fax: +632 551 7089

ReportScope&Boundary

3.5 Process for defining report content

In 2010, we initiated our first formal materiality assessment to gain a perspective on what is important to our key stakeholders. First, we developed a list of economic, environmental and social aspects for our company. Using an interview and vigorous dialogue process, we validated our aspects with key functional leaders and senior management officials within TeaM Energy. We also integrated into our assessment the information gathered from our communities, customers, suppliers, employees and partners. This is critical in ensuring that issues of concern to our stakeholders were included.

The materiality test was completed in 2011 and has guided the content of this report. While written for a wide audience, the primary audience for this report is our key stakeholders, including governments, customers, employees, suppliers, and the communities in which we operate. We also maintain well-developed internal communication systems to share information with our employees.

The table below describes how TeaM Energy addresses GRI G3 reporting principles, including the Electric Utility Sector Supplement:

GRI G3 Reporting Principles Relevance to TeaM Energy

Principles for Defining Report Content

Materiality

The information in a report should cover topics and indicators that reflect the organization’s significant economic, environmental, and social impacts, or that would substantively influence the assessments and decisions of stakeholders.

The reporting organization should identify its stakeholders and explain in the report how it has responded to their reasonable expectations and interests.

The report should present the organization’s performance in the wider context of sustainability.

Coverage of the material topics and Indicators and definition of the report boundary should be sufficient to reflect significant economic, environmental, and social impacts and enable stakeholders to assess the reporting organization’s performance in the reporting period.

The report should reflect positive and negative aspects of the organization’s performance to enable a reasoned assessment of overall performance.

TeaM Energy continually refines its approach to identifying and reporting on its material sustainability issues. This report includes a summary of our sustainability priorities and goals, as well as an update for each priority that includes progress against each related goal.

TeaM Energy outlines and describes its key stakeholder groups, and illustrates through stories how it interacts with each, on Section 2 of this report.

The Foreword of this report presents TeaM Energy’s performance in this manner. Other sections discuss the importance of the issue and its relevance to sustainability and the company.

TeaM Energy continues to improve its reporting to more fully address the range of sustainability issues. The report includes sections in a broad range of areas such as environment, health and safety, public policy, product responsibility and supply chain.

TeaM Energy reports on a set of core performance indicators and our sustainability priorities and goals to illustrate positive as well as negative performance trends.

Stakeholder Inclusiveness

Sustainability Context

Completeness

Balance


3.6 Boundaryofthereport

All information contained in this report represent the areas for which TeaM Energy has operational control and social involvement. It covers our four entities (TEC, TSC, TPEC and TEFI).

3.7 State any specific limitations on the scope or boundary of the report

The report does not include direct sustainability information from our suppliers, customers or contractors. We have determined that exclusion of this data does not materially affect the conclusions of this report.

As the scope of this 2010 Sustainability Report is significantly broader than our 2009 report and definitions have been updated, the data reported for 2010 may not be comparable to the previous year, and were only included where comparable.

3.8 Reporting on other corporate entities or subsidiaries

The report covers TEC, as well as wholly owned subsidiaries TSC and TPEC, and social development arm TEFI.

While TEC is also engaged in the Ilijan Natural Gas Plant in Batangas through a joint venture, TeaM Diamond Holdings Corporation, the facility is not under our operational control and so its data is not included in this report.

3.9 Datameasurementtechniquesandthebasesofcalculations

TeaM Energy has established a system for gathering, consolidating, analyzing and reporting financial and non-financial data. This system has become critical to the production of regular internal reports for group management and the Board of Directors. It is also critical to the production of the annual sustainability report.

All aspects of our sustainability performance in 2010 were subjected to a rigorous internal verification process led by our Sustainability Technical Working Group (STWG), which verified qualitative and quantitative claims and data.

PerformanceIndicators

Bases for Calculation Remarks

Economic

Environmental

Financial records for the calendar year ending December 31, 2010.

• Environment manual for all facilities with integrated Safety, Health and Environmental Management System (SHEMS), which contains procedures and guidelines on measurement and monitoring;

• For the Corporate Offices and Plant Sites, the data were based on power consumption and water consumption from electric and water meters installed onsite, while fuel consumption

data came from billing statements.

Complies with International Financial Reporting Standards

Where national regulations are not yet developed, international standards and guidelines are used.

Comparability

Issues and information should be selected, compiled, and reported consistently. Reported information should be presented in a manner that enables stakeholders to analyze changes in the organization’s performance over time, and could support analysis relative to other organizations.

The reported information should be sufficiently accurate and detailed for stakeholders to assess the reporting organization’s performance.

Reporting occurs on a regular schedule and information is available in time for stakeholders to make informed decisions.

Information should be made available in a manner that is understandable and accessible to stakeholders using the report.

Information and processes used in the preparation of a report should be gathered, recorded, compiled, analyzed, and disclosed in a way that could be subject to examination and that establishes the quality and materiality of the information.

The report provides performance data covering the year 2010. Key information are presented in a Summary Data Table for ease of use. When available, industry performance data are included for comparison.

TeaM Energy uses a combination of internal processes and external verification (see Assurance) to ensure the reliability of information presented in this report.

Beginning with this report, we will produce our Sustainability Report bi-annually, as soon as is feasible after content and data are compiled.

TeaM Energy strives to present the information in this report clearly and concisely. To appeal to a wider audience, particularly our stakeholders in the communities where we operate, we included for the first time graphic illustrations on our business model, and feature stories on some of our stakeholders.

An independent group of experts on economic, environment, social, health and safety, labor, and human rights issues evaluated this report. In addition, many of the financial data included in this report are taken from the financial statements of our company, which were audited by our external accounting firm, SyCip, Gorres, Velayo & Co.

Accuracy

Timeliness

Clarity

Reliability

GRI G3 Reporting Principles Relevance to TeaM Energy

Principles for Defining Report Content


Assurance3.13 Accuracy and completeness of report

TeaM Energy believes in the importance of independent external assurance to enhance the credibility of our sustainability report. Our economic, environmental and social performance indicators have been verified by a team of experts. They formed the External Review Committee (ERC) that evaluated TeaM Energy’s sustainability performance in 2010 and adherence with the GRI guidelines based on our information database, interviews at various levels of the company, and tours of our power plants prior to publication. Their statement appears at the end of this report.

Governance, Commitments & Engagement

Governance

4.1 Governance structure of the organization

The entities under TeaM Energy – TEC, TSC and TPEC – are governed by their respective Board of Directors but with the same set of members. Their seven-man Boards are composed of three Japanese directors affiliated with Tokyo Electric Power Co. (TEPCO), three Japanese directors from Marubeni Corporation, and one Filipino director. We believe this structure provides a single vision for the company and results in an efficient and effective organizational structure.

Of the seven members of each Board, five are Directors based in Manila who comprise the Executive Committee. In addition to carrying out some of the functions delegated by the three Boards, the Committee also oversees the Delegation Policy on approval limits.

The Executive Committee is composed of the following: TEC President, who is also the President of TSC; the TEC Executive Vice President (EVP) for Business Development & Commercial Affairs, who is also the TPEC President; the EVP for Operations; the EVP for Finance and Chief Finance Officer; and a Marubeni-affiliated Director based in the Philippines.

TEFI is governed by its own Board of Trustees. Of its nine Trustees, five are members of TEC’s Executive Committee and four are officers or management employees of TEC, TSC or TPEC. The Board of Trustees likewise approves TEFI’s Delegation Policy on approval limits.

In addition to the Executive Committee, the four entities (TEC, TSC, TPEC and TEFI) also have various other committees, each with its own designated tasks. These are the Management Committee (composed of senior managers and higher levels), Health and Safety Committee, Uniform Committee, and Food Committee, among others.

4.2 WhethertheChairoftheBoardisalsotheCEO

The Chairman of the Boards of Directors of TEC, TSC and TPEC is the President of TEC and TSC. He is also the Chairman and President of TEFI.

4.3 IndependenceoftheBoard

The Boards of TEC, TSC and TPEC are composed of seven directors: three TEPCO-affiliated Japanese directors and three Marubeni-affiliated directors, and the Chairman,who is expected to decide independently of TEPCO and Marubeni. The Board of

3.10 Restatements of information

There have not been any restatements of information provided in earlier reports.

3.11 Significant changes from previous reporting periods

For the 2010 report, TeaM Energy adhered closely to the GRI G3 Guidelines, definitions, relevance and compilation techniques to ensure accurate and transparent reporting and included the Electric Utilities Sector Supplement. Some calculations and definitions that were reported in the past may have changed to better match the GRI requirements for A+ application level (GRI checked). Our 2009 report had a self-declared C application level.

Content Index3.12 GRI Index

The GRI Index appears at the start of this report. It identifies the page numbers of all the standard disclosure indicators required by the GRI Guidelines.

• GHG calculation for fuel consumption and power consumption were based on emission factors provided by the United Nations Framework and Convention on Climate Change (UNFCCC), as integrated in the published WRI GHG Protocol calculation tools.

• Air emissions were computed based on the continuous emissions monitoring system (CEMS) data, where applicable, or using the U.S. Environmental Protection Agency emission factors.

• Applicable standards are indicated for parameters covered by government (Department of Environment and Natural Resources) regulations.

Social • Applicable standards are indicated for parameters covered by government regulations.

• Indicators related to Occupational Safety and Health Standards were based on the Department of Labor and Employment-Bureau of Working Conditions’ Occupational Safety and Health Center (OSHC) Standards, unless no other national/local

standards are available

• OHSAS 18001:2007 - Occupational Safety and Health Management System

Electric Utility Sector Supplement

Same sources as above


Bases for Calculation Remarks


Trustees of TEFI is composed of nine trustees, of whom five are members of TEC’s Executive Committee and four are officers/management employees of TEC, TSC or TPEC.

4.4 Shareholder and employee feedback mechanisms

TeaM Energy is a privately held company, with Tokyo Electric Power Co. International BV and Marubeni Corporation as shareholders.

At the core of our commitment to integrity is maintaining continuous and open dialogue between management and employees. We encourage them to seek guidance and report concerns through a number of formal channels.

Our Human Resources Department (under the EVP for Finance and CFO) is in-charge of raising all employee concerns to the relevant officers. Managers are responsible for maintaining an environment that enables employees to safely raise and discuss issues. This way, we are able to prevent incidents from occurring and address issues when they arise.

In addition, both TEC and TSC have plant-based unions and collective bargaining agreements that provide mechanisms for airing grievances and other provisions, including membership in certain committees.

In 2010, the unions have raised various economic issues relating to their benefits and privileges. TEC also conducted an employee survey on the effectiveness of Shared Services (services rendered by certain units across sites including Finance, Corporate Services, Materials Management (Procurement), Information and Technology, Corporate Affairs, Learning and Development and Human Resources). The survey results help the company fare in the services provided by the Shared Services Groups. Although not part of a Shared Service Group, TEFI was likewise included in the survey to solicit employee feedback on the effectiveness of social initiatives.

The “TeaM Energy Code of Ethics and Business Conduct” manual, which was relaunched in 2010, also encourages reporting to compliance officers.

4.5 Linkage between performance and executive compensation

TeaM Energy’s compensation philosophy is to recognize company and individual performance, and must reflect the value of each officer’s position in the marketplace and within the company. The company’s executive officers are compensated in a manner that is consistent with these principles, aligns the interests of management and shareholders, and drives sustained and superior performance relative to the company’s peers. In addition, the company also takes into account individual performance based on the INsPIRED Team (for Integrity, Service Quality, People-Oriented, Innovation, Responsible Citizenship, Excellence, Dedication, TeaM work) values. These principles also govern the company’s Performance Management Program, Merit Increase and Short-Term Incentive (or STI, a performance bonus for employees).

The company also has policies on Retirement and Resignation and on Termination of Employment (relating to termination of employment for just cause, and for authorized and other causes).

These and other workforce-related policies are contained in the TeaM Energy Employment Manual, an enhanced compilation of our major HR policies, which was relaunched in 2010.

4.6 Conflicts of interest

“Delivering results with the highest standards of ethical behavior” is part of TeaM Energy’s corporate vision. The company is committed to conducting business in accordance with the highest standards of business ethics and complying with applicable laws, rules and regulations.

While a number of structures already exist to ensure our strict adherence to corporate governance principles, the company saw the need to relaunch a Code of Ethics and Business Conduct that will serve as a compass for the core beliefs and ethical practices TeaM Energy employees must always aspire to do in the business.

In July 2010, TeaM Energy embarked on a company-wide program to engage employees in embracing this Code. Among other things, the Code provides guidelines on avoiding conflicts of interest in line with external best practice standards, handling gifts, involvement in business interests that might compromise independence in decision making, and others involving ethical conduct in business dealings. Existing statements in our Code also require all employees to act in the best interest of TeaM Energy and its shareholders.

TEC and its subsidiaries are also subject to a regular audit. In 2010, both of TEC’s shareholders conducted an internal audit, with no significant problems found. Also in 2010, the updated Procurement Policies of the Materials Management Department (MMD) were issued. These updated policies, together with the Employee Manual and the Code of Ethics were included in the company’s intranet for the employees’ ease of reference.

4.7 QualificationsoftheBoard

TEC’s shareholders, specifically TEPCO and Marubeni, select their nominees to TEC’s Board of Directors. They each have their own qualifications and criteria in addition to those prescribed under the Corporation Code. In selecting their nominees to the Board, both companies implement a process for directors who can add value and contribute independent judgment to the formulation of sound economic, environmental and social corporate strategies and policies in the company.

4.8 Relevant corporate mission, values, codes of conduct, and principles

TeaM Energy’s Mission, Vision and Values statements apply to all employees across sites and were issued in 2007.

The TeaM Energy Code of Ethics and Business Conduct was derived from the best practices of the Codes of Ethics of Mirant (US-based company and the previous shareholder of the company), TEPCO and Marubeni (both Japan-based companies). The Code was reissued to all employees in 2010.

We implement an Integrated Safety, Health, and Environmental Policy in our plant sites. This is consistent with the International Standards for Safety, Health and Environmental Management System (ISO 14001:2004 and OHSAS 18001:2007). This policy upholds our commitment to the following:

•Preventionofinjury •Promotionofemployeewellness •Preventionofpollution •Compliancewithlegalandotherrequirements •Continuousimprovement •Employeeengagement •Accountability •Transparency


VisionWe are the leading and most respected company among IPPs in Asia-Pacific.

Sustained ProfitabilityWe provide excellent value to our shareholders.We exceed our customers’ expectations in terms of cost, reliability and quality service.

Operational ExcellenceWe exceed our heat rate targets.We maintain world-class EFOR (Equivalent Forced Outage Rate) and EAF (Equivalent Availability Factor).We are the preferred business partner in supplying energy.We set the standards in safety, health and environmental performance.

Significant Social ContributionTeaM Energy communities are model communities in the country in terms of education, health and economic development.We take the lead in improving and protecting the biodiversity of the areas where we operate.We are a valuable partner in the nation’s growth.We are a catalyst in enhancing Philippines-Japan social and economic partnership.

InSPIRED TeaMWe hold dear and live out our values.We deliver results with the highest standards of ethical behaviour.We benefit from the synergy of the best Japanese and Filipino systems and processes.We attract and retain the best talents.We reward our employees based on individual and team performance.We uphold industrial peace.

MissionWe are TeaM Energy, the nation’s growth partner.

We generate and supply reliable and affordable energy to uplift lives and promote the sustainable development of the country while creating value for our stakeholders.

We are committed and empowered to achieve cost effective, safe and environmentally-sound operations, using superior technology.


Values We are an Inspired TeaM. In all our relationships, we demonstrate our firm commitment to the values of:

I ntegrity

S ervice Quality

P eople-Oriented

I nnovation

R esponsible Citizenship

E xcellence

D edication

TeaM Work

26 TeaM Energy 2010 Sustainability Report TeaM Energy 2010 Sustainability Report 2726 TeaM Energy 2010 Sustainability Report TeaM Energy 2010 Sustainability Report 27

VisionWe are the TeaM Energy Foundation. We uplift lives through relevant and sustainable programs on electrification, education, environmental stewardship, and engagement. By fostering the spirit of volunteerism and social responsibility, and through synergy, we will provide significant impact to the country’s growth and development.

Core ProgramsTanglaw Enerhiya (Electrification)•HouseholdElectrificationAssistancethroughRenewable Technology and Social preparation for the Upliftment of Lives (HEART AND SOUL)

Tanglaw Aral (Education)•Improvingachievementscores•Healthprogramsforstudents

Tanglaw Kalikasan (Environment)•CommunityCarbonPoolProgram(C2P2)

Tanglaw Ugnayan (Engagement)•Volunteerism

MissionTeaM Energy Foundation is the country’s partner in sustainable development initiatives and a catalyst for positive change. We work towards the improvement of quality of life through our passionate resolve to create self-reliant, self-sustaining, and progressive communities.

TeaM Energy goes beyond the business of providing electricity. Through TeaM Energy Foundation, our corporate social responsibility arm, the company is able to fulfill one of its four corporate visions: to make Significant Social Contributions. We focus on four core programs: electrification, education, environmental stewardship, and engagement.


4.9 Boardoversightwithregardstorisks,opportunities,andinternational standards

We align our corporate goals to the Vision developed by the organization.

Our objectives, goals, strategies and measures (performance indicators) are aligned to our vision contained in the acronym SOSI:

- S for Sustained Profitability: Financial planning and monitoring are done in coordination with heads of departments; financial discipline across the company is emphasized. - O for Operational Excellence: Operations optimization - S for Significant Social Contribution: the company has the SSC Core Group as well as TEFI that drives our corporate social responsibility programs; and - I for InSPIRED TeaM: there is also a Core Group that ensures that all employees embrace fully our corporate values in addition to the HR department

These policies and standards are based on research, developed, deliberated upon, and recommended by the respective Core Groups and approved by the Executive Committee.

The company also conducts a three-year rolling review of the goals, performance indicators, and strategies on an annual basis. Adoption of the goals such as financial targets for the current year is based on the figures in the first year of each year’s three-year rolling review. Adjustments are made based on the following:

•Betterunderstandingofthemarketenvironment •Betterunderstandingofourorganization •GoalsofGroups,Division/Department,Sections,UnitsarebasedonSOSI Goals. Each division/department under a group develops its SOSI goals to contribute to TeaM Energy’s Corporate Goals. Individual goals are aligned to the goals of the group they belong to.

4.10 ProcessesforevaluatingtheBoard’sownperformance

Various departments under the SOSI group are responsible for regularly monitoring performance against goals. These are reported on a monthly basis and are captured by the Business Planning Section of the Strategic Planning in a “Corporate Scoreboard” which is graphically designed for reader friendliness and released via email and bulletin board postings to all employees a month after each performance month. This includes performance against the SOSI goals.

Commitments to External Initiatives

4.11 How the precautionary principle is addressed

Through the years, we have subjected our safety, health, and environmental management system to thorough reviews and continual improvement to ensure that all environmental aspects and OHS hazards have been identified, and their associated impacts and risks determined and controlled. We have an established risk assessment methodology in our sites to evaluate modifications in our operations and capital expenditures prior to implementation.

At the very minimum, we ensure that our operational controls comply with government regulations. The lack of scientific certainty or government regulation, however, does not limit us in seeking measures to address these risks. These risk mitigation measures include the following:

TeaM Energy 2010 Sustainability Report 29


•Forafuturenationalactionplantoaddressclimatechange: The company is starting to build capacity in identifying Greenhouse Gas (GHG) sources from our operations. It also initiated projects such as the Reduction of Emissions from Deforestation and forest Degradation (REDD), which involves sustainable forest rehabilitation and management.

•Forpotentialemergenciesresultingfromenvironmentaldisasters:Wehave instituted Emergency Management Guidelines (EMG) and continue to conduct drills using various scenarios.

•Formanagementofwastes:Wepartnerwithwasterecyclers,treaters, haulers and government institutions (e.g., Department of Science and Technology, on the study of fly ash in Pagbilao) to study other uses for our waste and byproducts so they do not end up in the waste stream.

4.12 Externally developed charters, principles or other initiatives

The company does not have externally developed charters, principles or other initiatives so it considers this indicator as not applicable.

4.13 Memberships

TeaM Energy and its employees engage with many professional, industry and business organizations, covering a range of sustainability issues. By participating in these groups, we can expand our influence, help share and learn best practices, and advance discussions within and beyond our industry. Forming relationships with these associations also helps us engage with and meet the ongoing needs of our stakeholders.

These memberships are in the following organizations:

•PhilippineIndependentPowerProducersAssociation(PIPPA) – TeaM Energy representatives attend regular meetings to discuss updates on any legislations and proposed measures affecting members. Through PIPPA, TeaM Energy participates in the drafting and formulation of revenue measures. TEC’s President is Vice-President of PIPPA.

•RetailElectricitySuppliersAssociationofthePhilippines (through TPEC)

•PhilippineChamberofCommerceandIndustry(PCCI) – As an organizational member and an active member in its Committee on Environment, TeaM Energy, through its Corporate EHS Unit, is involved in environmental policy making and consultations facilitated by the Department of Environment and Natural Resources (DENR).

•MakatiBusinessClub

•TaxManagementAssociationofthePhilippines

•FinancialExecutivesInstituteofthePhilippines

•TEFIisalsoanactivememberofseveralorganizationsandcouncilssuch as the LeagueofCorporateFoundations,PhilippineBusinessforthe Environment and Philippine Council for NGO Certification.

Stakeholder Engagement

4.14 Stakeholder groups engaged by the organization

Stakeholders play an important role in our company’s continued success, and we strive to take into account their varied perspectives. TeaM Energy engages with stakeholders to share information, better understand their views on the company’s priorities, programs and performance, and determine opportunities to collaborate and to reach common goals.

Much of our stakeholder engagement focuses on key aspects of our business and operations.

EmployeesManagement

Shareholders

Marubeni

Tokyo Electric Power Company

Customers

National Power Corporation/PSALM

Independent PowerProducers

Administrators

National Grid Corporation of the

Philippines

Philippine ElectricityMarket Corporation

Energy SupplyBusiness

Bilateral Customers

Regulators

Department of EnergyDepartment of Environment and Natural ResourcesDepartment of Labor and EmploymentBureau of Internal RevenuePhilippine Ports AuthorityBureau of CustomsPhilippine Drug Enforcement Agency

National Telecommunications CommissionPhilippine National Police Coast GuardEnergy Regulatory CommissionLocal Government Units (Barangay, Municipality, Province)Media

Civil Society/Non-Government Organizations:Institutional

Investors Lingkod Tao KalikasanTanggol KalikasanBantay Kalikasan

Wild Bird Club of the PhilippinesSynergeia Foundation

Others:Indigenous people

Auditors

Local Communities

Contractors

Suppliers

Banks &Insurers

JBIC PPF

MizuhoSumitomo Mitsui

Banking Corp.Sompo


4.15 Basisforidentificationandselectionofstakeholderswithwhomto engage

To identify our stakeholders, our Technical Working Group (TWG) used a guided questionnaire that asked which groups:

•haveaninfluenceonTeaMEnergy’sattainmentofbusinessand sustainability goals; •haveinterestinworkingconstructivelywiththecompanyoncertain sustainability issues; •arerelieduponbythecompanyonadailybasis; •dependonthecompany;and •haveregularinteractionswiththecompany.

After coming up with a comprehensive list of stakeholders, the TWG performed a prioritization process in which every stakeholder group was scored with either a 1 or a 0 on the basis of how strongly they influence or how they are influenced by TeaM Energy’s economic, social and environmental performance. A cutoff score was set, and groups below the cutoff score were excluded from being surveyed for material indicators.

In the process of stakeholder engagement for this report, each stakeholder group identified was given a set of questionnaires and engaged through focus group discussions.

4.16 Approaches to stakeholder engagement

Stakeholder engagement activities occur in virtually every aspect of TeaM Energy’s operations and business transactions. Below is a table showing our modes of stakeholder engagement. Details can also be found throughout this Report.

4.17 Key topics raised through stakeholder engagement

In preparing this report, we cover topics and indicators that reflect the most significant economic, environmental and social impacts from our operations. In 2010, TeaM Energy defined a set of sustainability principles developed based upon extensive dialogue in each of the business areas, and a survey of all our stakeholder groups to identify areas of key economic, social and environmental impact. The results are listed below:

A.LaborPracticesandDecentWorkAspect •Financialdata •Policyonon-the-jobtrainingandtrainers’acceptance •Healthassessmentstodetermineworker’sfitnessforaspecifictask •Systemstoverifythathealthandsafetyequipmentisproperlyselected, maintained, and used •Systemstoensureequipmentareusedonlyduringitsmostefficientlifetime •Rewardsandincentiveprogramfordeservingemployees •Suppliers/Contractorstrainingprogramforknowledgeenhancement related to whatever he/she caters to TEC •Policyonhealthandsafetymanagement •Measuresforfireprevention/responseincaseoffireoccurrence

B.EconomicResponsibility •Permitfeesandchargespaidtothegovernment •Actionstosecurereliablepowersupply

C. Environmental Responsibility •Cleanupofdegradedwaterbody/tributaryrivers •Inventoryofchemicalusageincompanyoperations •Emergencypreparedness,includingprovisionforinformingcommunityin case of fire, spills, releases, among other things •Dialoguewiththepubliconconcernonchemicalsafety •Exposureassessmentandsafetyanalysistoevaluatehumanhealthand safety hazards to workers from processes, chemicals, among other things •Programonbestindustrialpracticesintermsofcleantechnology,pollution prevention, shift to safer chemical alternatives •Ecowatchrating •Environmentalcompliance(permitrequirements) •Disposaloflaundrywaterfromhotelaccommodationwithintheplantsite

D.HumanRights •Incidentsofseparationduetopoliticalandreligiousbeliefsofemployees •Gendersensitivityprogram •Humanrightstrainingforsuppliers/contractors

E. Product Responsibility •Information,EducationCampaign(IEC)program

F. Social •Laborunionactivities •Programstodevelopthephysicalwellbeingofcommunitymembers (e.g., sports activities) •Regularcommunity/stakeholdersconsultation •Contributionstoschoolandthecommunity

Stakeholder Group Modes of Engagement

Shareholders

Employees across all sites

Regulators

Customers

Suppliers and Contractors

Civil Society/NGOs

- Quarterly meetings

- Employee satisfaction survey Management Forum Labor union meetings/CBA negotiations

- quarterly meetings through reporting; and on an as- needed basis during Technical Working Group discussions on policy studies, inspections, audits, validations, and focus group discussions for specific topics

- Monthly steering committee meetings; open communication line

- Vendors orientation Supplier’s recognition resulting from survey among end-users on performance of vendors

- Regular meetings; open communication line



This section covers Performance Indicators for economic, environmental, and social disclosures that the GRI prescribes. TeaM Energy selected indicators on issues that are material to our business and ultimately provide a measure over time of our contributions to society.

Each section starts with a Disclosure on Management Approach (DMA), which provides an overview of how TeaM Energy addresses issues in a particular subject area to ensure continual improvement. These disclosures describe our management policies, responsibilities, strategies, and systems of monitoring, and set the context for our performance.

The last section is the GRI Electric Utilities Sector Supplement tailored for the electric utility sector to which TeaM Energy belongs. In addition, the Supplementincludes sector-specific commentary on the GRI Guidelines’ content and additional Performance Indicators for the sector.



ECONOMICDISCLOSURE ON MANAGEMENT APPROACH

Our Approach

True to our vision to become the leading and most respected IPP in Asia Pacific, TeaM Energy strives to attain leadership in the areas of financial performance or sustained profitability, operational excellence, social contribution and organizational cohesiveness.

Economic Performance

TeaM Energy ended 2010 on a strong note. We surpassed our Sustained Profitability targets, particularly our Net Income target for the Energy Supply Business (ESB) as we finally achieved full-year participation in the energy trading market. Our entry into the energy trading market further maximized the generation of our Pagbilao and Sual plants. Accordingly, operating income increased by 12.6% from the 2009 level, enabling us to meet our commitments to our stakeholders.

We seriously monitored our financial health as we continued to implement financial discipline in our operating and maintenance (O&M) and general & administrative (G&A) costs, as well as capital spending across the company.

In 2010, we spent roughly USD3million on capital investments to maintain the world-class operations of our aging power plants. Our Pagbilao and Sual power plants achieved plant availability of 83.57% and 83.36%, respectively, during the year, and we are committed to further improve their performance.

On the aspect of reliability, we delivered our guaranteed heat rate targets, as follows:

Unit 1 Unit 2Guaranteed Heat Rate

(in kCal per kilowatt hour)

Sual

Pagbilao

2397.00 2299.82 2341.07

2319.26 2270.99 2290.12



Sustaining world-class standards given our aging plants will continue to be an operational challenge for TeaM Energy. The reliability and availability of the Sual and Pagbilao power plants will also dictate the long-term viability of our ESB, which sells excess capacity when available.

Our goal of operational excellence is a shared objective with our IPPAs (San Miguel Energy Corp. for Sual and Therma Luzon, Inc. for Pagbilao) which assumed from NPC/PSALM the management and contracted capacities of the Pagbilao and Sual plants under the ECAs in late 2009. TeaM Energy believes in nurturing these partnerships to achieve operational and commercial success.

We also faced significant challenges in 2010, including the issue on the real property tax involving our Pagbilao power plant. TeaM Energy’s position on this matter has always been to abide by the agreements it had entered into prior to the construction of the plant. Under these agreements, the National Power Corporation (NPC) is responsible for real property taxes. As a responsible citizen, TeaM Energy worked together with the national and local governments in coming up with an acceptable solution. We remained focus in our efforts until the issue was finally resolved in July 2011.

Apart from political risks, TeaM Energy’s business model is sensitive to other global and local economic shifts, such as fluctuations in interest rates, foreign exchange rates, the demand-supply situation on coal, energy trading, and climate changes, among other things.

We believe that our ability to manage these risks and maintain a strong financial foundation would allow us to deliver sustainable returns to our shareholders; provide safe and reliable electricity to our customers; and deliver broader economic, environmental and social benefits to society.

Indirect Economic Impacts

In addition to our direct economic contributions through sales revenues, supplier purchases, the wages and benefits we provide our employees, and the taxes we remit to the government and on behalf of our employees, TeaM Energy also creates long-term benefits through jobs creation, supplier contracts, and engagements in the communities where we operate.

Our Vision on Significant Social Contributions (SSC) is focused on building sustainable communities. Through our partnerships and funding initiatives, we aim to improve the quality of education in schools, curb malnutrition among children, uplift the living conditions, and create livelihood opportunities in our host communities.

TeaM Energy also creates indirect economic impact through the Department of Energy’s Energy Regulation No. 1-94 Fund that redounds to the benefit of the local communities that host our two power plants.

Organizational Responsibility Responsibility for ensuring our economic performance rests in our top management through the Board of Directors and the Executive Committee, which sets the annual and long-term targets of the company.

TeaM Energy Foundation, Inc. (TEFI), our social development arm, and the Community Relations (ComRel) group in each of our power plants, are the ones responsible for translating our SSC commitment into action.

Monitoring and Compliance

Our financial statements are prepared in accordance with the International Financial Reporting Standards.

In addition to our profitability targets, TeaM Energy has an SSC Core Group responsible for preparing the SSC goals, monitoring the progress of the annual work program, providing timely technical intervention, and crafting the action plans for the succeeding periods. Close coordination is done with company management. We expect this system to be eventually fully integrated or institutionalized in our Operations Group.

Market Presence

TeaM Energy is one the largest Independent Power Producers (IPPs) in the Philippines. With its 735-MW Pagbilao and 1,218-MW Sual clean coal facilities, and a 20% stake in the 1,200-MW Ilijan natural gas-fired plant, TeaM Energy has around 2,200 MW of generating capacity. This accounts for 22% of the total dependable generating capacity in the Luzon grid, and 16% of the country’s dependable capacity.

Our ESB group continues to grow the business by utilizing uncontracted capacity that is sold to various market segments such as electric cooperatives, economic zones and large industrial users in Luzon.

While the Department of Energy (DoE) has yet to finalize the rules for the Renewable Portfolio Standards (RPS) and the Feed-In-Tariff (FIT) rates, TeaM Energy has already engaged in the following activities related to Renewable Energy (RE) development:

•ParticipateinpublicconsultationsbytheDoEfortherulesonRPSandthe Energy Regulatory Commission for the FIT rates

•IdentifyviableREprojects

•TapspecialistsandconsultantsonREdevelopment(e.g.,hydrologists,solar plant developers)

•MapoutatimetableforthedevelopmentofREprojects,withpreferenceto run-of-river hydropower sources, solar energy, and geothermal energy


Stiff retail competition and open access could also open up alternative businesses for TeaM Energy, such as energy trading consultancy, load management consultancy, and other ancillary services. With its vast scope of involvement in the power industry and conventional energy projects, the company brings forth a high-level expertise envisioned to provide ease and assistance to the management of its clients’ power needs.

Economic Performance

EC 1Directeconomicvaluegeneratedanddistributed,includingrevenues,operatingcosts, employee compensation, donations and other community investments, retained earnings, and payments to capital providers and governments

In the year ended 31 December 2010, TeaM Energy generated over US$592 million in revenues, of which nearly 85% were distributed through the course of our economic activities with our employees (wages and benefits), suppliers and contractors (payment), lenders and shareholders (interest and dividends), and government (taxes).

In addition to jobs generation and tax payment, local communities also benefit from TeaM Energy’s presence through our voluntary social investments. In 2010, we made USD1.5 million worth of social contributions through programs in education, rural electrification, environment, health, economic development or livelihood, people empowerment, engagement and partnership projects. (See further discussion in EC8)**

USD 3 million Amount of capital investments made in 2010 to maintain the world-class operations of our power plants

USD 1.5 million Amount of voluntary social investments made in 2010 through programs in education, rural electrification, environment, health, economic development or livelihood, people empowerment, engagement and partnership projects

EC 2Financialimplicationsandotherrisksandopportunitiesfortheorganization’sactivities due to climate change

Initiatives to mitigate the effects of climate change significantly influence TeaM Energy’s business. While coal-fired power plant operations per se may not be largely dependent on weather patterns unlike hydropower, wind, and solar plants, their locations (i.e., near coastlines) increase their vulnerability to natural disasters and extreme events such as strong typhoons, flooding, and tsunami.

Another potential challenge to TeaM Energy’s business involves the new regulatory environment. There are no standards yet for GHG emissions or a clear framework for carbon trading in the country. However, with the enactment of the Climate Change Act (Republic Act 9279) in 2009, the Philippine government has started formulating climate change policies. Among these is the National Framework Strategy on Climate Change 2010-2022 which is expected to lead to regulations on emission reduction, offsetting, and carbon trading.

In anticipation of these developments that are an offshoot of climate change issues, TeaM Energy is already investing in the following initiatives:

•IncollaborationwiththeFaunaandFloraInternational-Philippines(FFI)and Non-Timber Forest Products (NTFP) Task Force, TeaM Energy, through TEFI, leads in the REDD+ pilot project in General Nakar, Quezon province (REDD stands for Reducing Emissions from Deforestation and forest Degradation). The REDD+ project promotes conservation and enhancement of forest carbon stocks, and sustainable management of forests.

•Wecontinuetobuildthecapacityofourenvironmentalmanagement system and TEFI in conducting GHG inventory and management as a foundation for future mitigation activities. We support training programs by the USAID as they help the Philippine government’s progressive response to address energy security and combat climate change.

•WeparticipateintheDepartmentofEnergy’sprojecttoidentify opportunities for Carbon Capture and Storage (CCS) in the energy sector.

•AsamemberoftheAssociationoftheElectricalSupplyIndustryofEast Asia and the Western Pacific (AESIEAP), TeaM Energy participates in the Annual CEO Conference where a working group on carbon management

145,000 hectaresTotal size of forests in General Nakar, Quezon province conserved through various REDD-related activities in 2010 (REDD stands for Reducing Emissions from Deforestation and forest Degradation)

ECONOMIC REPORT CARD

* As of and for the year ended December 31, 2010; audited consolidated figures prepared under IFRS ** Economic Value Retained is not equal to Net Income

Generated

Revenues

Distributed

Payments to Suppliers & Contractors

Payments for Employee Compensation & Benefits

Payments to Capital Providers (Debt & Equity)

Payments to Governement and Community Investments

Total Economic Value Distributed

Economic Value retained**

Total Assets

Total Long-Term Debt

592,522

116,022

28,203

278,738

79,258

502,221

90,300

3,833,716

2,426,524

In Thousand USD


for the Electricity Sector has been established. The AESIEAP provides avenues through which GHG Programs can be realized by pooling experiences of member countries.

EC 3Coverageoftheorganization’sdefinedbenefitplanobligations

Looking after the welfare of our employees is consistent with TeaM Energy’s aspiration to be an employer of choice. Part of our commitment to providing a competitive salary and benefits program is the establishment of a tax-qualified non-contributory retirement plan that covers all regular employees.

As the nature of the defined benefit pension plan is non-contributory, employees covered shall receive a pension of a fixed proportion of their salary in the period leading up to retirement. The proportion would depend on the number of years of service with the company and the employee’s compensation.

At year-end 2010, the fair value of the Company’s Retirement Plan assets amounted to USD11.28 million. Of these assets, approximately 75% were invested in debt securities, 20% in equities, and 5% in real estate. The Retirement Plan is administered by a Retirement Committee while the Retirement Fund itself is managed by a Trustee Bank. Investment decisions are based on a set of guidelines that ensures optimal returns for the assets. Yearly changes in the value of assets and commitments depend primarily on price movements in the financial markets.

TeaM Energy is committed to ensure that the employees’ retirement fund can adequately cover any pension liabilities. Contributions to the fund are based on an independent valuation report prepared by a third-party actuary. The actuarial report uses weighted average assumptions on discount rate, expected rate of return on plan assets, and salary increases.

The cost of providing retirement benefits is determined using the projected unit credit actuarial valuation method in accordance with the International Financial Reporting Standard 19 (IFRS 19), which prescribes the accounting and disclosure for employee benefits.

EC 4Significant financial assistance received from government

TeaM Energy does not receive any direct financial assistance from the government in the form of credits or incentives for engaging in research and development, or for any infrastructure, equipment or facilities put up by the company as a precondition to invest or operate.

As a private corporation, the company also does not receive any equity infusion or loan from the government.

Market Presence

EC 5Range of ratios of standard entry-level wage compared to local minimum wage at significant locations of operation

The minimum wage in the Philippines is set in each region and depends on prevailing socioeconomic and other conditions in the locality. In Sual, Pangasinan and Pagbilao, Quezon, areas that host our power plants, TeaM Energy pays entry-level employees at least double the local minimum wages set by the wage boards in Region 1 (which covers Pangasinan province) and in Region 4-CALABARZON (includes Quezon province) in 2010.

Wages paid to subcontracted labor are based on the mandated minimum wage in the locality or on contract negotiations. Technicians and engineers provided by third-party service providers or contractors are paid above the local minimum wage, depending on their levels of technical expertise and experience. These contractors are paid either on a daily rate or on a per project basis.

EC 6Policy, practices, and proportion of spending on locally based suppliers at significant locations of operation

TeaM Energy’s procurement procedures are made in accordance with our Code of Ethics and Business Conduct manual as well as the Materials Management Department Policies and Procedures Manual, which uphold principles of fairness, transparency, and cost-effectiveness in the award and execution of contracts for work, supplies, and services.

The company, as a matter of practice, sources locally made goods and avail of local services, more particularly, if this proves more beneficial in terms of cost, delivery lead time and required level of quality.

To help stimulate economic growth in the host communities where few economic opportunities previously existed, we also provide a ready market for non-critical labor. Organized cooperatives in the host communities ensure the steady supply of workers to TeaM Energy for plant maintenance, landscaping, waste disposal, and other economic opportunities. (See EC9)

% ENTRY LEVEL WAGE VS. MIN WAGE

MIN.WAGE

Corporate Office

Sual

Pagbilao

404 142.8%

248 232.7%

264 218.6%


However, given the nature of our power plant operations which utilize foreign technology, we must purchase capital equipment and spare parts where they are available. These are most often widely available outside the local market.

Our Energy Supply Business (ESB) also limits us to the procurement of imported coal due to the strict specifications of the power plants. This also ensures efficient and cost-effective production of excess capacity, which cannot be achieved using coal sourced from local suppliers.

Nevertheless, TeaM Energy awarded its procurement requirements for goods and service equally between local and foreign suppliers in 2010.

EC 7Procedures for local hiring and proportion of senior management hired from the local community at significant locations of operation

It is TeaM Energy’s strategy to hire the best candidate for each position, whether or not he/she comes from the local communities. We define “local” as the province or municipality where the operations of our power plants are located. While we do not have an explicit policy on hiring senior management from the local communities, it is part of the company’s commitment to its Environmental Management Plan (EMP) to increase employment opportunities and economic activities in these areas.

We have a college and technology-engineering scholarship program that helps ensure us of a sustainable source of future skills and talent. These scholarships are given to promising students taking up courses relevant to the company’s operations such as engineering.

Indirect Economic Impacts

EC 8Developmentandimpactof infrastructureinvestmentsandservicesprovidedprimarily for public benefit through commercial, in-kind, or pro bono engagement

In line with our Vision on Significant Social Contribution (SSC), the company, through TeaM Energy Foundation, Inc. (TEFI) and the Community Relations (ComRel) groups in our Sual and Pagbilao Power Stations, implement programs on education, rural electrification, environment, health, economic development or livelihood, people empowerment, engagement and partnership projects. Each company-funded program has been developed through consultations with target partners/beneficiaries to identify baseline data and Key Performance Indicators (e.g., percentage of reduction on malnutrition, poverty incidence).

In addition, our host communities also benefit from the one-centavo per kilowatt hour in energy sales that we generate, in accordance with Energy Regulations No. 1-94 (ER 1-94) under Republic Act No. 9136, otherwise known as the Electric Power Industry Reform Act (EPIRA) of 2001. The host local government units (LGU) can access the ER 1-94 fund for projects that will benefit their respective communities. The Fund is administered by the Department of Energy and all projects go through the regular bidding and audit procedures of the government.

To ensure that these projects funded under ER 1-94 optimize the use of the Fund, the LGU conducts a needs assessment as part of the project proposal development. TeaM Energy’s ComRel group validates the documents, endorses these to the DoE for project funding, and also monitors the progress of the projects. A joint inspection is conducted (by representatives from TeaM Energy, LGU and DOE) to monitor the project implementation or completion and the necessary liquidation of the project fund.


Meant to spur economic activity in the barangay, municipality or province, these projects include electrification, farm-to-market roads, birthing homes, and water systems (see table below).

According to the audit report of the DoE in 2010, the available Energy Regulation 1-94 Fund amounted to Php57 million under the Electrification Fund (as of December 2010), Php70 million under the Development and Livelihood Fund (as of September 2010), and Php70 million under the Reforestation, Watershed Management, Health and/or Environment Enhancement Fund (as of September 2010), came from both Sual and Pagbilao plants.

EC 9Understanding and describing significant indirect economic impacts, including the extent of impacts

Indirect economic impacts are an important part of TeaM Energy’s economic influence in the context of community sustainability. Depending on local circumstances, they include spending of wages and salaries by our employees, suppliers and contractors, as well as by the employees of our downstream industries, along with improvements in community health and livelihoods in communities where we provide health and education facilities.

As these impacts are difficult to quantify, the company uses currently available poverty statistics culled from the Millennium Development Goals (MDG), the National Statistical Coordination Board (NSCB), and the Department of Social Welfare and Development (DSWD). To determine the impact of TeaM Energy’s health programs, we rely on the monitoring reports of the Municipal Health Officer, particularly on the annual Oplan Timbang (Operation Weight). The latest baseline and end-line (post-activity) data on the communities will be compared against these benchmarks to evaluate if the impact has been significant.

Through these measures, TeaM Energy was able to achieve the following:

•ByimplementingtheCoolMagingHealthyProgram,wereducedthe incidence of malnutrition among children (ages 0 to 6) in Pagbilao to 6.6% in 2010 from 9% in 2009; and in Sual to 4% in 2010 from 6% in 2009. •ByimplementingourSafeWaterfortheBarangaysProgram,weincreased the number of households with access to safe water by one community/ barangay and 98 households. •Byorganizingthecommunityworkforceintogeneralservicescooperatives, we were able to outsource Php48.68 million worth of jobs in Sual (that provided conservatively the equivalent of 2-3 months of employment to its participating members) and Php31.5 million worth of jobs in Pagbilao.

Another way to quantify and validate the extent of the company’s indirect economic impacts in the local communities is through the conduct of the annual socio-economic monitoring (in Sual only) and the socio-economic monitoring conducted every five years (both Sual and Pagbilao).

Our immediate goal is to establish clearer trends of socio-economic improvement in the communities where we operate. We hope to be in a position to report our progress in this area in future updates to this report.

Municipal Health Center “Sentrong Pangkalusugan” at Pagbilao, Quezon - Completed and inaugurated on June 29, 2010

Binahaan Water Spring Development at Pagbilao, Quezon

Purchase of Heavy Equipment (Bulldozer) in aqid of construction of FARM-TO-MARKET roads (Pagbilao, Quezon) Quezon’s Vengineering Measures - Sloping Agricultural Land Technology (SALT) in the Province of Quezon - fund was released last Dec 2010

Additional medical supplies, equipment and medicines for upgrading the facilities and services of Quezon Medical Center Construction of Provincial Training Center/Multipurpose Hall Phase (Pangasinan) Construction of a Birthing Home / Maternal Clinic with Provision of Hospital Equipment for the Municipality of Bautista, Pangasinan

Sual Water System Project Phase III for the Municipality of Sual, Pangasinan

Concreting of Paitan East Road at Sual, Pangasinan

Construction of Slope Protection and Shouldering of Sitio Panotmot, Brgy. Pangascasan, Sual, Pangasinan

Concreting of Sitio Panotmot Road, Brgy, Pangascasan, Sual, Pangasinan

Construction of Roadline Canal and Riprapping from resettlement to Logolog Bridge

Pangascasan Water Syste, Phase II, Brgy. Pangascasan, Sual, Pangasinan

Php 12,653,868 Municipal share



Php 151,260 Provincial share

Php 8,047,000 Provincial share

Projects funded underthe Energy Regulation 1-94

Cost Commercial/ in kind/ Pro Bono

Php 5,805,721.00 Provincial share

Php 7,500,100.00 Provincial share


Php 3,499,970.89 Municipal share

Php 2,421,665.00 Barangay share




Php 80.18 millionTotal amount of jobs outsourced in Sual (Php48.68 million) and Pagbilao (Php31.5 million) in 2010 as a result of organizing the community workforce into general services cooperatives. The amount is equivalent to generating 2 to 3 months of employment.

4%Rate of incidence of malnutrition among children (ages 0 to 6) in Sual in 2010 (down from 6% in 2009) after TeaM Energy implemented the Cool Maging Healthy Program. In Pagbilao, the incidence rate fell to 6.6% in 2010 from 9% in 2009.


ENVIRONMENTALDISCLOSURE ON MANAGEMENT APPROACH

Our Approach

Our responsibility towards future generations is paramount to TeaM Energy’s business. We aim to manage our environmental impacts through good stewardship of natural resources, mitigating the impact of our operations, continuous implementation of the Environmental Management System, and utmost compliance to all relevant environmental laws and regulations.

Materials

TeaM Energy acknowledges its responsibility in the use of fossil fuel and various chemicals in our power plants that directly contribute to air emissions, including greenhouse gases (GHG). This fact emboldens us to heighten our commitment in using environmentally sound technology that is less resource intensive and less pollutive. This includes using plant equipment that do not contain polychlorinated biphenyls (PCBs), ensuring that scheduled outages will not result into contamination of transformer oil, improving the plant heat rate to ensure coal usage optimization thereby having avoided additional CO2 emissions. Among the highlights of our 2010 environmental performance was the significant reduction in waste oil and ash disposal by finding innovative ways to reuse these output materials that may have otherwise been disposed of as waste.

Energy

While we are in the business of generating electricity, we also pursue initiatives to continually reduce our operating costs and conserve energy. Part of our Operational Excellence goals is to meet Equivalent Forced Outage Rate (EFOR) and Equivalent Availability Factor (EAF) targets to improve the operating efficiency of the power plants. We also implement heat rate improvement programs to ensure that we are optimizing coal usage with the same energy output. We have initiated the set-up of Quality Management Systems at various levels of our operations and implement energy conservation measures as part of our environmental stewardship. Management Systems at various levels of our operations and implement energy conservation measures as part of our environmental stewardship.



Water

While thermal plant operations are highly dependent on water use, we are able to minimize our impact on surrounding bodies of water by using a reverse osmosis facility in our plants to meet our operational requirements and entering into collaborative agreements with the local communities where we operate. This includes provisions limiting the withdrawal of water from nearby river systems.

Biodiversity

Maintaining high levels of biodiversity is vital to preserving biological resources and the ecosystem that all species rely on. For this reason, it is important for TeaM Energy to understand how our activities significantly impact on biodiversity in the areas where we operate.

We recognize that part of laying the ground for offsetting our carbon emissions is through habitat preservation in areas near our operations. We do this by partnering with same-purpose organizations that help us magnify our biodiversity preservation and awareness activities. We also manage our impacts on biodiversity through a variety of environmental programs such as upland and coastal reforestation/rehabilitation projects, and preservation of the habitat of vulnerable and migratory birds inside our plant premises.

Emissions, Effluents and Waste

In our business, we inevitably face the delicate balancing act in carrying out our responsibility in helping mitigate climate change. On one hand, we must generate enough electricity to sustain economic activity. On the other hand, we must manage the direct GHG emissions from power generation and also help consumers use less electricity. Still, we continue to set high standards on the performance and maintenance of installed flue-gas cleaning equipment and wastewater treatment to improve the efficiency of our facilities so that emissions, effluents, and wastes are avoided or minimized.

Products and Services

As TeaM Energy’s product (electricity) is not tangible, the environmental impacts of its business activities cover our inputs (i.e., upstream side of the life cycle) and byproducts (e.g., spent acids and other industrial wastes). We mitigate these using operational controls and station programs under our Environmental Management System (EMS).

Compliance

Both as a company policy and a corporate responsibility, we ensure that we comply with all applicable environmental policies and regulations. We have not received any notice of violations and penalties nor paid significant fines and penalties and suffered any business disruptions as a result of non-compliance with environmental laws and regulations in 2010.

As proof of our solid compliance record and firm commitment, TeaM Energy received the DENR Seal of Approval in 2010 under the ‘Track 1’ category of the Philippine Environmental Partnership Program (PEPP) for our plants’ superior environmental performance and continuous compliance with environmental laws and regulations. Both our power plants also maintained their ISO 14001 Certification in 2010.

Transport

TeaM Energy relies on third-party contractors in the shipment and delivery of coal and chemical substances to our power plants. We enforce a stringent policy on these transport operations, which is contained in our Safety, Health and Environmental (SHE) Program.

Overall Expenditures

Translating our environmental commitment into meaningful actions also impact on our bottom line. In 2010, TeaM Energy spent about USD2.1 million on various environmental protection, investments, and other commitments.

Organizational Responsibility

The Station Manager of each of our power plants is directly responsible for all aspects of our operations, including the enforcement and formulation of environmental policies and guidelines, with oversight from the Executive Vice President for Operations and the Compliance Officers. Management of third-party transport of supplies and materials is also the responsibility of the Station Manager, under the supervision of the Vice President for Operations Optimization. Fleet management for the transport of our employees is handled by the Assistant Vice President for Corporate Services.

Training Awareness

All our employees undergo awareness and training programs related to our environmental aspects prior to deployment. We also enforce Station and Corporate Codes of Practice to guide their performance throughout their employment.

Recognizing that our environmental footprint extends to our supply chain, we also extend training on environmental programs to our suppliers and contractors, as stipulated in Station Safety Codes of Practice.

Monitoring and Follow-up

We take pride in the strict implementation of international and local standards as well as various Management Systems in our power stations, which are both ISO 14001-certified since 2002. Monitoring, audit, preventive and corrective actions are in place to ensure that we comply with these requirements. This extends to our contractors and suppliers, which are governed by Codes of Practice. In addition, we also subject our operations to regular Environmental Compliance Audits of the DENR.


Materials

EN 1Materials used by weight or volume

In coal-fired power plants, fuel is converted into thermal energy to heat water, making steam. The steam turns an engine (turbine), creating mechanical energy to run a generator. Magnets turn inside the generator, producing electric energy. As such, coal and oil are the primary materials used to generate electricity. Various chemicals are also used in the treatment of input water, wastewater, and emissions of our power plants.

TeaM Energy’s environmental commitment includes the use of plant equipment that do not contain toxic organic compounds called polychlorinated biphenyls (PCBs). We have completed extensive testing and complied with the reportorial requirements of the Environmental Management Bureau (EMB) to ensure that the major equipment in our two power plants are PCB-free (i.e., less than one parts per million of PCB).

EN 2Percentage of materials used that are recycled input materials

PAGBILAO

Identify inputmaterials

that are recycled

Volume of Input(from EN1)

Volume of recycledinput materials used

% of recycled inputmaterials

Oil(for maintenance)

Unit

1,169,848.00

0.90146.50 0.61

7.37

m3m3 m3

86,200.00Water

(for reuse at Pagbilaoash pond)

** The remaining 145.60 m3 of used oil (99.4%) has been sent for off-site recycling

This indicator shows the extent to which TeaM Energy strives to reduce its consumption of input materials by reusing existing inventories that may have otherwise been disposed of as waste.

In previous years, waste oil was used in our Pagbilao Power Station as fuel for boiler operation (re-firing). In 2010, however, we started selling the waste oil to a DENR-accredited recycling company that converts it to two-stroke (2T) oil intended for use in two-stroke engines. Hence, the volume of waste oil recycled onsite was reduced to 0.9 m3 or less than 1% of the volume of oil we purchased.

In the course of our operations, we also generate ash when coal is combusted, and this either falls to the bottom of the boiler (bottom ash) or travels together with a flue gas (fly ash). Using the wet method of fly ash disposal (as opposed to the dry method of disposing the fly ash into landfills), our Pagbilao Power Station (PPS) is able to reuse water from its operations by using it as makeup water in ash ponds. Of the 1.17 million cubic meters of water that PPS used in 2010, 7.37% had been reused.

In our Sual Power Station (SPS) where the dry disposal method is used, 62,333 metric tons of fly ash generated in 2010 were sold to a local cement manufacturer for reuse as input material.

Energy

EN 3Directenergyconsumptionbyprimaryenergysource

In 2010, total direct energy use increased by 91% to 106.69 million GJ from 55.84 million GJ in 2009. This was due to the entry of IPP Administrators and the drive to operate the generating units at maximum capacity.

Non-Renewable Energy Sources

Biofuels

Coal

HFO

LFO

Gasoline

Diesel

LPG

Ethanol (blended w/ gasoline)

Coco Methyl Ester (w/ diesel)

TOTAL per site

TOTAL Energy Consumption (GJ)

43,914,433.22

n/a

80,436.75

296.36

10,701.96

606.43

32.93

218.41

44,006,726.06

62,427,312.48

206,647.04

13,469.06

2,161.79

22,347.62

676.78

240.20

456.07

62,673,311.04

3,992.81

2,575.02

443.65

52.55

7,064.03

106,687,101.13

PAGBILAO SUAL CORPORATEOFFICE

Sual

SUMMARY

NON-RENEWABLE MATERIALS

OTHER MATERIALS

Coal (MT)HFO (m3)LFO (m3)

Oil Products for MaintenanceWater (m3)Bulk Chemicals (m3)

1,689,016.66n/a

2,114.49

146.50840,902,641.79

188,163.36

2,401,050.485,432.25

354.07

-1,769,429,594.77

198.83

Pagbilao


EN 4Indirect energy consumption by primary source

While we are in the business of generating electricity, TeaM Energy also purchases electricity from external sources (i.e., the grid) to run our site operations. These include powering auxiliaries in our Pagbilao Power Station; lighting and powering electrical equipment and computers in our Corporate Office and Bayview accommodation facility; and on a limited degree, in our Sual Power Station and the housing facility within its premises, which run on house load.

In 2010, we purchased 34.5 GWh of electricity. This represents a 10.41% decline from the 2009 level. Based on the energy mix published in the Wholesale Electricity Spot Market (WESM), the National Power Corporation, and private distribution utility Meralco, the purchased electricity can be broken down into the following energy sources:

% Coal (GJ)

% Oil (GJ)

% Natural Gas (GJ)

% Geothermal (GJ)

% Hydro (GJ)

% Wind (GJ)

% Biomass (GJ)

TOTAL GJ

48,804.86

7,799.85

49,902.76

7,958.63

9,616.16

149.80

34.00

124,266.06

Indirect energy consumption by primary source

EN 5Energy saved due to conservation and efficiency improvements

Our power plants implement run heat rate improvement programs that comply with the Energy Regulatory Commission’s (ERC) limit of 9,773 BTU/kWh for coal-fired power plants.

We also pursue initiatives to continually reduce our operating costs and conserve energy. In 2010, we implemented the RAT (for Reserve Auxiliary Transformers) Program to reduce our consumption of indirect energy (sourced from the grid) that powers 6.9 kilovolts of various electrical equipment and auxiliaries in our Pagbilao Power Station.

To cut down our energy consumption, we implemented several measures, including switching off lights, air conditioners and other appliances when idle; and conserving water and reporting leaking pipes. The RAT Program saved the company 45.9 GJ/day (16,753.5 GJ/year) in 2010. This can power 5,584 100-kilowatt light bulbs running 24/7 the entire year.

EN 6Initiatives to provide energy-efficient or renewable energy-based products and services, and reductions in energy requirements as a result of these initiatives

Since 2008, TeaM Energy has been implementing efficiency improvements as part of its goal and commitment to increase plant availability, output, and operating efficiency of the power plants, as well as extend plant life and reduce operating costs.

During the scheduled annual outage in 2010, we carried out preventive maintenance on equipment and other initiatives. These covered checking the efficiency of our boilers, high and low pressure heaters, and condensers. As a result of these initiatives, we were able to reduce our energy requirements by 281.49 GJ/hr in Pagbilao and 373.25 GJ/hr in Sual.

In 2010, preliminary studies were conducted to explore mini-hydro projects as part of TeaM Energy’s future venture in the country and also to integrate such into its our renewable portfolio standard (RPS) in compliance with the Renewable Energy Act. Management was eyeing prospects in Luzon for 3 to 5 megawatts of capacity. Given our current portfolio (fossil fuel-based capacity), TeaM Energy looks into future projects to meet the RE law’s provisions on having “green capacity” to offset carbon footprints. Details of the envisioned portfolio and investments will be disclosed in 2011.

5,584Equivalent number of 100-kilowatt light bulbs that can be powered by the amount of energy saved (45.9 gigajoules a day or 16,753.5 GJ/year) in 2010 through TeaM Energy’s RAT (for Reserve Auxiliary Transformers) Program. This includes switching off lights, air conditioners and other appliances when idle; and conserving water and reporting leaking pipes.

TOTAL in 2010 kWh

Indirect energy in GJ (1 kWh=0.0036 GJ)

31,978,100

115,121.16

3,409

12.27

1,021,240

3,676.46

1,515,600

5,456.16

34,518,349

124,266.06

PAGBILAO SUAL CORPORATEOFFICE

BVA (Accom) TOTAL


EN 7Initiatives to reduce indirect energy consumption and reductions achieved

Apart from the consumption of direct energy, we are also seeking to reduce indirect energy requirements, i.e., linked mainly to personnel commuting, office lighting and powering electrical equipment.

The company is developing a systematic evaluation of these consumptions and is therefore unable to determine any relative savings. However, below is a qualitative breakdown:

BENEFITSACTIVITIES

ENERGY CONSERVATION MEASURES

Proper scheduling of lighting in parking lots, block and room; and unoccupied areas in premises

Reducing electricity consumption



Reducing fuel consumption by about 7,124 liters of fuel per year

Lessening the number of vehicles on the road leading to reductions in CO2 emissions

Reducing fuel consumptions and CO2 emissions

Reducing fuel consumption by about 43,172.9 liters and CO2 emissions

Use of videoconferencing facilities for weekly Station Manager meetings

Car pooling

Corporate shuttle services for employees in the plant sites

Use of efficient lighting systems(e.g. low-wattage halogen and CFL bulbs)

Switching off-air conditioning units inunoccupied facilities

MANAGEMENT OF BUSINESS TRAVEL

SUPPORT FOR HOME-WORK COMMUTING

Water

EN 8Total water withdrawal by source

Thermal power plants generally work by converting water into steam to turn turbines. Water then has to be cooled before it can reenter the environment or be used again. In 2010, TeaM Energy’s total water withdrawal was 2.6 billion cu.m., 1% higher than the level in 2009. Cooling water from surrounding bays accounted for 99.8% of the total.

EN 9Water sources significantly affected by withdrawal of water

The GRI considers water withdrawals as “significant” if they account for an average of 5% or more of the annual average volume of a given water body. Based on this definition, no water sources were significantly affected by TeaM Energy’s withdrawal of water.

EN 10Percentage and total volume of water recycled and reused

Our Pagbilao Power Station reuses wastewater for 100% of the 86,200 cubic meters required for its ash pond. However, this reused water was not drawn from a natural water body but from a processed water source. As such, this indicator is not applicable to TeaM Energy’s operations as we use a once-through circulating water system in both our power plants.

WATER WITHDRAWN (by Source)

Name of Body of Water Volume (m3)PAGBILAO

SUAL

CORPORATE OFFICE

TOTAL 2,610,405,144.56

Process Water

Surface water (River)

Surface water (Sea)

Locohin River

Pagbilao Bay

428,115.39

609,848.00

Process Water

Cooling Water Pagbilao Bay 839,864,678.40

Quezon Metro Water District 53,234.00

Pao Bay 3,380,077.27

Pao Bay 1,766,016,000.00

Pao Bay 33,517.50

Maynilad (Water utilities) 19,674.00

Cooling Water

Domestic Use - Action

BVA

Domestic Use (Water utilities)

Domestic Use (Water utilities)



Biodiversity

EN 11Location and size of land owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas

Our Pagbilao Power Station (PPS) is adjacent to the Quezon National Park, a 983-hectare forest reservation declared as a protected area under Proclamation No. 594 on August 5, 1940 and Republic Act 7586 on June 1, 1992. Being home to hundreds of flora and fauna species, the park is high in biodiversity value.

Surrounding the PPS is the Pagbilao Bay. While not formally declared as a protectedarea by the Department of Environment and Natural Resources (DENR), the Bay is home to five species of birds considered endangered under the Red List of the International union for Conservation of Nature. Tayabas Bay is also not a protected area but has been declared in 1981 as a Mangrove Swamp Forest Reserve under Proclamation No. 2151.

TeaM Energy’s PPS occupies 1.5 hectares of land located seven kilometers away from mangrove forests. We comply with local environmental regulations and ensure that our power plants do not pose risks to the local environment. We are also involved in habitat restoration activities such as tree planting, which enhances biodiversity while providing additional benefits such as reducing surface water runoff, decreasing soil erosion and increasing carbon sequestration.

EN 12Description of significant impacts of activities, products, and services onbiodiversity in protected areas and areas of high biodiversity value outside protected areas

Recognizing the proximity of the Pagbilao and Sual Power Plants to areas of high biodiversity or ecological value, we are committed to keeping our impact on nature as low as possible and protecting the flora and fauna that live in the areas where we operate.

Below are the major impacts associated with coal-fired power plant operation:

•MarinedepletionduetowaterintakeLarge quantities of water are withdrawn from the Pao Bay, Lingayen Gulf for utilization in our Sual Power Station and Pagbilao-Tayabas Bay for Pagbilao Power Station. This may lead to impingement (fish caught on intake screens) and entrainment (passage of small fish and eggs of marine organisms through the condenser cooling system). While there was jellyfish impingement on the intake screens that took place in SPS in 1999, this was considered an isolated case and improvements in the intake area have been made since this incident.



•AirpollutionfromsmokestackemissionsBurning coal causes smog, acid rain, and the release of toxic substances into the atmosphere. To reduce emissions from our Sual and Pagbilao Power Stations, we utilize a combination of combustion controls and cleaning measures. We make use of electrostatic precipitators, dust extraction systems, dust collectors, air monitoring station, and ash lagoons, among other things, to ensure all emissions are within DENR standards and the more stringent WorId Bank guidelines.

•WaterpollutionduetowastewaterdischargesTo clean air emissions, power plants ‘scrub’ their boiler exhaust system with water. This wastewater is discharged into waterways, and if not properly managed, pollutes the bodies of water as it contains arsenic, lead and other toxic chemicals that have been linked to health risks.

To ensure that our water effluents do not cause water pollution, we collect and pump all our wastewater into a wastewater treatment plant (WWTP) for chemical and physical treatment before discharging. Once cleaned and treated, the discharge from the wastewater treatment plant are all emptied into a sedimentation basin before finally discharging into the sea. This enhances wastewater quality by ensuring that any suspended sediments left in the water would settle before discharging.

•ThermaldischargesOur coal-fired power plants utilize a once-through cooling water heat transfer system that requires large quantities of water withdrawn from large bodies of water. The condenser water is cooled by passive heat transfer, as water withdrawn from a river or lake (in our case, from Pao Bay in Lingayen Gulf in Pangasinan province, and Pagbilao and Tayabas Bay in Quezon province) is pumped into the condenser and returned at a higher temperature to the source water body (Baquioen Bay in Lingayen Gulf).

The potential impacts of these thermal discharges on biodiversity include the temporary displacement of fish species in the immediate area when hot water mixes with the receiving water body. Such abrupt rise in temperature can also cause the depletion of dissolved oxygen in the water.

TeaM Energy complies with the DENR requirement on the maximum allowable temperature rise of 3°C in our Sual and Pagbilao Power Stations.

EN 13Habitats protected or restored

•CarbonSinkInitiative(Size: 325 hectares) This five-year project that began in 2003 aims to preserve the country’s diminishing forest cover by rehabilitating upland and mangrove forests in the municipalities of Pagbilao and Padre Burgos in Quezon. Despite the expiration of the project agreement in 2008, TEFI continues to monitor the project. A survival rate of more than 80% for the upland plantation and 65% for the mangrove plantation was recorded in 2010.

10 hectaresTotal size of mangrove area in Barangay Bay-bay Sur, Sual already reforested through TeaM Energy’s mangrove reforestation program in partnership with the Sual Coastal Multi-Purpose Cooperative. In 2010, a total of 15,000 seedlings were planted in 1.5 hectares.

98%Survival rate of 165,000 seedlings potted and planted in the upland area of Barangay Sioasio East, Sual in Pangasinan province through a partnership between Team Energy and the Sioasio East Multi-Purpose Cooperative.

•CommunityCarbonPoolProgram(C2P2) TEFI and FFI, a global conservation organization, forged a partnership to provide assistance to Indigenous Peoples (IP) communities in the municipality of General Nakar in Quezon Province to protect the forest and biodiversity. A resolution granting Free and Prior Informed Consent (FPIC) for the protection of IPs was obtained from the National Commission for Indigenous Peoples in January 2011.

•UplandReforestation (Size: 30 hectares)In partnership with TEFI, the Sioasio East Multi-Purpose Cooperative aims to reforest the upland area of Barangay Sioasio East, Sual in Pangasinan province. In 2010, the project achieved a 98% survival rate, with 165,000 seedlings potted and planted. The construction of infrastructures such as lookout towers, bunkhouse and water impounding tank was also completed. •MangroveReforestation (Size: 10 hectares)Sual Power Station implements a mangrove reforestation program in partnership with the Sual Coastal Multi-Purpose Cooperative, a group of fisherfolk in the surrounding communities of the power station. In 2010, a total of 15,000 seedlings were planted in 1.5 hectares of mangrove in Barangay Bay-bay Sur, Sual. This brought the total mangrove area already reforested to date to 10 hectares. •BufferZoneReforestation(Size: 35 hectares)Sual Power Station conducted buffer zone reforestation in the Ash Disposal Area and power station complex as part of the requirements in its Environmental Compliance Certificate (ECC). To date, around 35 hectares have already been planted with trees. This resulted in the increase in the number of bird species, which have found a suitable habitat in the surrounding environment of SPS.

In the 2010 Terrestrial Wildlife Monitoring, three new bird species were recorded in the SPS, bringing the current total to 92 species. This represents 24% of the birds that can possibly be recorded in Luzon and about 36% of Luzon birds that can possibly be found in a similar habitat (i.e., forested to non-forested).

•BirdCensus (Size: 33 hectares)TEFI conducted an annual water bird census at the Pagbilao ash lagoon and the Mangrove Eco Destination area in Iba Palsabangon, Pagbilao, Quezon jointly with the DENR’s Philippine Animal Welfare Society and the non-profit Wild Bird Club of the Philippines. The Annual Avian Wetland Bird Census was also held in both power plants in January 2010.

EN 14Strategies, current actions, and future plans for managing impacts on biodiversity

TeaM Energy manages impacts on biodiversity through a variety of environmental programs, mostly discussed in EN12 and EN13.

92Total number of bird species recorded in the 2010 Terrestrial Wildlife Monitoring conducted in the Sual Power Station. This represents 24% of the birds that can possibly be recorded in Luzon and about 36% of Luzon birds that can possibly be found in a similar habitat (i.e., forested to non-forested).

33 hectaresTotal size of the areas in the Pagbilao ash lagoon and the Mangrove Eco Destination area in Iba Palsabangon, Pagbilao, Quezon covered by the 2010 water bird census jointly conducted with the DENR’s Philippine Animal Welfare Society and the Wild Bird Club of the Philippines.


Being in a heavily regulated industry, the company strictly complies with all its ECC requirements, Environmental management Plan, Environmental Monitoring Plan, and implements Environmental Management Systems in its power plants.

Our Site Environmental Impact Statements include an assessment of our impacts on terrestrial and aquatic biodiversity. Biomonitoring surveys (sea-, river- and land-based), which are integrated into our environmental management systems, are done by a third party to find out the state of the environments surrounding TeaM Energy’s facilities over time. The results, along with proposed measures to mitigate the impacts, are reported by multi-partite monitoring teams in the respective sites to DENR-EMB through a Compliance Monitoring and Verification Report (CMVR) based on their assessments.

In addition to the ongoing initiatives enumerated in EN13, TeaM Energy Foundation Inc. also plans to build a Biodiversity Conservation Center to house the conservation efforts of various environmental non-government organizations and the academe.

EN 15Number of IUCN Red List species and national conservation list species with habitats in areas affected by operations, by level of extinction risk

An annual water bird census jointly conducted by TEFI with the DENR’s Philippine Animal Welfare Society and the Wild Bird Club of the Philippines (WBCP) recorded the constant presence of the Java Sparrow (Padda oryzivora) and Philippine Duck (Anas luzonica) in the Ash Disposal Area of Sual Power Station since 2008 and 2009, respectively. These species are both listed as “vulnerable” in the 2010 IUCN Red List of Threatened Species. The presence of these two threatened bird species suggests that SPS is able to provide a clean and safe environment for the protection of these bird species.

*Source: Birdlife International and TEFI Bird Census

TOTAL NUMBERSPECIES HABITAT AREA LEVEL OF EXTINCTION

Philippine eagle(Pithecophaga jefferyi)

Philippine duck (Anas luzonica) Java Sparrow (Padda oryzivora)

Chinese egret (Egretta eulophotes)*

Phil. dwarf kingfisher (Ceyx melanurus)* Rufous night heron (Nycticorax caledonicus)*

Striated heron (Butorides striata)*

Unknown

346

Unknown

Unknown

Unknown

2

4

Pagbilao, Quezon

Pagbilao, QuezonSual, Pangasinan

Sual, Pangasinan

Pagbilao, Quezon

Pagbilao, Quezon

Pagbilao, Quezon

Pagbilao, Quezon

Criticallyendangered

Vulnerable

Vulnerable

Vulnerable

Vulnerable

Least Concern

Least Concern

Emissions, Effluents and Waste

EN 16Total direct and indirect greenhouse gas emissions by weight

Carbon dioxide (CO2) is the characteristic product of combustion and, as such, is also emitted by coal-fired power plants. The computation of emissions is based on analyses made on fuel.

In 2010, our total greenhouse gas (GHG) emissions from both direct and indirect energy sources amounted to 10.15 million tons CO2. Of the total, 10.13 million came from direct energy (i.e., power generation).

The CO2 emissions from direct energy consumption were calculated using the Greenhouse Gas Protocol based on the emission factors of the fuels. On the other hand, the CO2 emissions from indirect energy consumption were calculated based on emission factors for purchased electricity.

EN 17Other relevant indirect greenhouse gas emissions by weight

DIRECT ENERGYin Ton CO2

INDIRECT ENERGYin Ton CO2

EMISSIONS PER UNIT OUTPUT (tons/MWh)

SITES

Pagbilao Power Station

Sual Power Station

Bayview Accommodations

Corporate Office

TOTAL

4,239,772.35

5,891,723.66

12.06

10,131,508.07

13,910.67

1.48

659.30

444.25

15,015.69

1.18

0.97

N/A

N/A

2.15

SOURCE OFGHG EMISSIONS

FOSSIL FUELSTON CO2

BIOFUELSTON CO2

SITES

--- 3,140.48 ---


Sual Power Station

Bayview Accommodations

Corporate Office

TOTAL Fuel per SourceTOTAL CO2 emissions

Land / Water Travel

Land Travel

N/A

Land Travel

648.70 / 155.74

1,789.32

463.51

3,057.27

14.66 / 3.27

41.95

23.33*

83.21


ENERGY REDUCTIONS (kg/hr) INITIATIVES CO2 Emissions Displaced

Pagbilao Heat Rate Improvement • Unit 1 • Unit 2

Sual Heat Rate Improvement • Unit 1 • Unit 2

Reserve Auxiliary Transformers(RAT) Program

*Using performance coal

10,826.725,858.864,967.86

14,355.6612,398.831,956.83

12.5 MWh daily

26.56 tons CO2 eq/hour*

35.22 tons CO2 eq/hour*

5.438 CO2 eq/day

To date, the remaining CCO-covered substances in our plants are R 22 refrigerants, a gas widely used in numerous industrial applications, which is scheduled to be phased out by 2040. In 2010, 637.6 kilograms of R 22 were used in our power plants.

EN 20NOx, SOx, and other significant air emissions by type and weight

Our dominant sources of air emissions come from the combustion of fossil fuels in our power plants to generate electricity and produce heat. Sulphur dioxide (SOx) and nitrogen oxides (NOx) mainly originate from the boiler facility of the plants.

EN 21Total water discharge by quality and destination

Nitrogen oxide(mg/NCM)

Unit 1 Unit 1 Unit 1Unit 2 Unit 2 Unit 2

Sulphur dioxide(mg/NCM)

Particulate Matter (mg/NCM)INITIATIVES

Pagbilao

Sual

DENR Standard

467.30

539.92

1,500

536.50

580.71

1,500

928.60

1,191.02

1,500

948.20

1,173.56

1,500

39.90

23.25

200

19.70

24.04

200

BODmg/L

TSSmg/LType of Water Discharge Destination Treatment

Pagbilao

Sual

Effluent from chemical treatment

Storm run-off

Treated effluents from STP Main Plant and STP Accommodation

Discharge from sanitary landfill

Cooling Water Discharge

RO Brine Reject Discharge

DENR Standards

Domestic wastewater

Pao Bay

Baquioen Bay

Baquioen Bay

Baquioen Bay

Pao Bay

Pao Bay

Pagbilao-Tayabas Bay

Attenuation basin/ sedimentation basin 1, wastewater treatment

plant

Attenuation basin/ sedimentation basin 2

Sewage treatment plant lagoon,

biological treatment

Wetland

Sewage Treatment Plant

13

20

9

N/A

N/A

100

32 48

20

40

47.75

9.75

15.50

33

150

Besides emissions related to electricity consumption, another source of indirect emissions that may be linked to TeaM Energy’s activities is employees’ travel. This is presented in two types: emissions from fossil fuels and biofuels (on the assumption that the gasoline and diesel consumed contain 10% ethanol and 2% CME, following government regulations).

EN 18Initiatives to reduce greenhouse gas emissions and reductions achieved (also in EN5)

Discussions on the Heat Rate Improvement Program and the Reserve Auxiliary Transformers (RAT) Program to reduce our consumption of indirect energy are found in EN5 of this report.

Computation for CO2 displaced was based on estimates using the GHG Protocol Corporate Standard templates. Due to limitations, we cannot calculate the GHG emission reductions from energy efficiency programs.

To improve our level of reporting, the company partnered with USAID in 2010 to strengthen our organizational capacity in GHG accounting. Our environmental offices and TEFI program leaders attended an extensive Online GHG Management Course in preparation for future reporting requirements.

EN 19Emissions of ozone-depleting substances by weight

Ozone-depleting substances (ODS) are used to a very limited extent in TeaM Energy’s operations and are not a significant issue in the context of overall environmental impact.

Consistent with the Montreal Protocol, the use of these substances is being phased out in the Philippines. In accordance with the phase-out schedule set out in DENR Administrative Order 2004-08 (Revised Chemical Control Order for ODS), our power plants annually report installed and replaced quantities, as well as losses and how replaced quantities have been handled.


TeaM Energy does not discharge any wastewater directly to natural waterways. All wastewaters from our facilities and plants are emptied into water treatment plants or catchment basins, either directly or after neutralization. As such, our company is able to comply with DENR standards on discharging wastewater, and does not pose risk to surrounding bodies of water through thermal discharges. In addition, we do not allow discharge of bilge water from coal ships, consistent with the policy we implement under our Operations Code of Practice for Coal Unloading.

EN 22Total weight of waste by type and disposal method

TeaM Energy generated 218,134.97 metric tons (MT) of waste in 2010, higher than what has been reported in 2009, due to the inclusion of ash and gypsum in the current reporting period.

Due to the nature of our operations, which are primarily dependent on coal, non-hazardous waste in the form of ash and gypsum comprised 99.8% of all waste we generate on an annual level. As a form of recycling, these ashes are hauled daily by a third-party contractor, which uses them for cement manufacture.

As for hazardous waste, typical materials include spent acids, solvents, oil-contaminated materials, batteries and busted lamps. The 155.21 MT of hazardous waste accounted for less than 1% of the total amount of waste we generated in 2010, and were thus considered negligible. These were temporarily stored within plant premises before they were hauled and treated offsite by a third-party contractor accredited by the Department of Environment and Natural Resources (DENR).

All solid wastes were collected, segregated and managed accordingly. Biodegradable wastes were brought to a biogas facility (fertilizer generation) while recyclable materials such as industrial scraps were collected then sold to a recycler. In our Sual Power Station, we have our own sanitary landfill where residual wastes are brought.

EN 23Total number and volume of significant spills

This indicator is defined as the number and volume of significant spills resulting in substantial financial liabilities. In 2010, there was one recorded chemical spill in our Sual Power Station involving 0.4 cubic meters of ferric chloride, a chemical compound used for cleaning gas turbines.

Immediate cleanup activities were done to prevent further spillage from reaching the ground and several corrective actions were undertaken. The incident was also immediately reported to the DENR-Environmental Management Bureau Region 1. Preventive measures were put in place to avoid similar incidents in the future.

EN 26Initiatives to mitigate environmental impacts of products and services, and extent of impact mitigation

TeaM Energy adopts various initiatives to mitigate the environmental impact of its electricity generation activities. These initiatives are discussed in EN12. In addition, the environmental aspects and corresponding impacts of our inputs (i.e., upstream side of the life cycle), as well as our byproducts (e.g., spent acids and other industrial wastes) are managed using operational controls and station programs under our Environmental Management System.

EN 27Percentage of products sold and their packaging materials that are reclaimed by category

As the electricity we generate is not tangible, this indicator does not apply to TeaM Energy’s operations.

EN 28Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with environmental laws and regulations

The company did not pay any fines nor faced sanctions for non-compliance with environmental laws and regulations. In fact, our Pagbilao and Sual Power Stations have even received the “DENR Seal of Approval” in 2010 for qualifying under the ‘Track 1’ category. Both plants also maintained their ISO 14001 Certification in 2010, and no nonconformities resulting from failure to comply with legal and other requirements were cited.

(for composting) (for recycling) (for landfill)

Non-Hazardous Domestic Waste (in metric tons)

SITES BIODEGRADABLE RECYCLABLES RESIDUALS


Sual Power Station

TOTAL

–

57.29

57.29

0.63

217,702.26

217,702.89

0.16

38.58

38.74

On-Site Storage Off-Site TreatmentSITES

Industrial Waste (in metric tons)

HAZARDOUS WASTE NON-HAZARDOUSSCRAP

0.005

33.11

33.105

99.51

22.60

122.11

3.11

177.73

180.84


Sual Power Station

TOTAL


EN 29Significant environmental impacts of transporting products and other goods andmaterialsusedfortheorganization’soperations,andtransportingmembersof the workforce

TeaM Energy’s operations do not involve extensive supply and distribution networks. The ff impacts related to transport have been identified as significant based on our EMS and based on compilation of GHG emissions prepared for this report: 1) Use of fuel for transport (EN 3) 2) Vehicular emissions (EN 17) 3) Potential and actual spills (oil/fuel or chemical) - number of cases reflected in table below

The following programs and protocols are implemented as operational controls:

Contractor’s SHE Program - requires chemical suppliers to have spill response plans, Hazardous Materials handling training for personnel, and relevant permits from regulators.

Fuel withdrawal for transport use is being monitored by Warehouse Section.

Vehicle emissions are checked during renewal of vehicle licenses.

Operations Code of Practice on Coal Ship Unloading also provides guidelines for incoming coal deliveries. Coal ships are not allowed to discharge bilge water into the sea.

Under SECOP 1001 (Pagbilao) and SECOP 002 (Sual), an environmental aspect and its associated impacts can be classified as SIGNIFICANT if: •Ithasspecificrelevantlegislation,regulation,and/orpermitrequirements •Itisrelatedtocompanygoals,policies,environmentalperformance indicators, or voluntary covenants to which the company has committed •Iftheenvironmentalscoreisequaltoormorethan3andthelevelofcontrol is either low or medium.

USD 2.15 millionAmount TeaM Energy spent in 2010 on various environment-related initiatives such as wastewater treatment, maintenance of electrostatic precipitators, tree planting, and conservation of natural habitats.

EN 30Total environment protection and expenditures and investments by type

TeaM Energy spent USD2.15 million in 2010 on various environmentalprotection, assessment, and other initiatives. While most of these actions are mandatory, such as waste disposal, wastewater treatment, and maintenance of electrostatic precipitators, many others are voluntary, such as tree planting, conserving natural habitats, and other environmental initiatives.

Expenditure Type

Waste disposal, emissions treatment, and remediation costs

Prevention and environmental management costs

*Community Development Support (Envi–related)

TOTAL ENVIRONMENTAL INVESTMENT

1,627,622

504,916

13,897

2,146,436

TeaM Energy Combined (USD)


NO. OF SPILLS FROM THE TRANSPORT OF CHEMICALS

Corporate Office

Sual

Pagbilao

TOTAL

0

0

0

0


SOCIAL:Labor Practices &Decent Work

DISCLOSURE ON MANAGEMENT APPROACH

Our Approach

Our employees fuel the success of TeaM Energy, with leadership skills and team spirit, with dedication and passion. In return, the company provides meaningful work in a safe environment, training and development opportunities to advance within our organization, and a culture of teamwork that encourages creative contributions.

Employment

A critical component of TeaM Energy’s vision is to be a rewarding place to work and develop. Central to this commitment, we provide our employees with market-competitive pay and benefits while rewarding employees for strong individual and team performance.

Labor/Management

TeaM Energy adheres to a people-oriented approach that encourages open communication and maintaining harmonious industrial relations with our labor unions. We respect the rights of employees to legally organize and accord them with a proper venue to air and resolve their grievances.

Occupational Health/Safety

The health and safety of our employees is of paramount importance to TeaM Energy. Being our most valued resource, we want them to return home every day in the same



condition that they arrived at work. The nature of our operations also demands safety excellence to ensure the reliability of our business.

In 2010, we extended our commitment to safety to our contractors who also play an important role in the entire business process. We organized Safety Committees for contractors to discuss safety issues and improve performance. The health and safety records of our contractors are also included in the regular reports the company submits to the Department of Labor and Employment.

Training and Education

We expect a lot from our employees – and in return invest in their individual training and continuing development. Our goal is to be one of the most attractive employers for individuals who are focused on success.

Providing our 730 employees a rewarding place to work and develop is central to TeaM Energy’s vision. We offer employees the opportunity to advance their knowledge, expand their talents and bring their ideas to life, while providing competitive compensation and benefits.

Diversity and Equal Opportunity

TeaM Energy is committed to fair and equal opportunity for all employees, and recognizes that every individual’s unique background and experiences contribute to a successful organization. Discrimination in hiring, promotion and all other employment decisions on the basis of race, color, religion, gender, age, disability, sexual orientation, or any other basis protected by state or local laws is prohibited. Part of our commitments is to hire from the local communities whenever there are job vacancies and qualified applicants are available.


Organizational responsibility for labor relations rests at the Executive Committee, Vice President (VP) for Legal and Human Resources, Assistant Vice President (AVP) for Human Resources, and heads of various line divisions.

Occupational health and safety are the responsibility of every employee, from senior managers to employees on the plant sites. Our VPs for Operations and Station Managers oversee health and safety concerns through the Occupational Safety and Health Section, which is also functionally reporting to the Senior Manager for Integrated Management System.

The Learning & Development Program Committee, composed of the Executive Committee and the AVP for Corporate Affairs, oversees training and education. Those involving Operations and Management are within the purview of the Vice Presidents of the Pagbilao and Sual Power Stations.

Training and Awareness

All work-related policies are communicated to all employees through the Employee Manual and the Code of Ethics and Business Conduct, which cover matters such as discipline, conflict of interest, work hours, reporting irregularities, sexual harassment, among other things.

We have skills enhancement, safety training, health and wellness, and other programs that provide technical skills needed to support our corporate mission and the career development objectives of both our company and our employees.


Our Health, Safety and Environment (HSE) management system is deployed and rigorously enforced across our operations. It provides the foundation for our behavioral and compliance auditing programs, timely incident investigations to determine root causes and prevent recurrence, employee participation in ongoing HSE training, and frequent communication to reinforce HSE awareness.

Our drive to continuous improvement in all other aspects of our workforce is guided by a zero tolerance policy for non-compliance, a structured disciplinary process and thorough training that includes orientation for new employees, and annual, task-specific refresher programs.



Corporate Sual Pagbilao TOTALMANAGEMENTTEC 0 0 1 1TSC 2 0 0 2TIPEC 0 0 0 0TEFI 0 0 0 0RANK AND FILETEC 0 0 4 4TSC 0 0 0 0TIPEC 0 0 0 0TEFI 0 0 0 0

Corporate Sual Pagbilao TOTALMANAGEMENTTEC 0 0 0 0TSC 0 0 0 0TIPEC 0 0 0 0TEFI 2 0 0 2RANK AND FILETEC 0 0 0 0TSC 1 0 0 1TIPEC 0 0 0 0

FULL-TIME PROBATIONARY

FULL-TIME CONTRACT (TEMPORARY)

47

49

32

90

4727

30

219

189

LA 1Total workforce by employment type, employment contract, and region

As of 31 December 2010, TeaM Energy employed 730 nationwide, of which 68.2% belong to the rank and file.

Retaining a committed workforce is a key element of TeaM Energy’s people management strategy and offering permanent employment is a vital component of this commitment. Thus only 1.4% of our total workforce is employed on temporary contracts and mostly belong to our TeaM Energy Foundation, Inc.

Corporate Sual Pagbilao TOTALMANAGEMENTTEC 35 0 73 108TSC 32 77 0 109TIPEC 10 0 0 10TEFI 2 0 0 2RANK AND FILETEC 32 0 185 217TSC 39 219 0 258TIPEC 19 0 0 19TEFI 0 0 0 0

FULL-TIME REGULAR Table 2.3Total Size of Labor Force

Table 3.2Employed Persons

Table 3.2Employment Rate

Region1

Region 4A-

NCR

1,911,000 1,954,000 2,039,000 1,750,000 1,795,000 1,872,000 91.6 91.9 91.8

90.8 90.0 89.6

87.8 87.0 87.2

4,154,000 4,159,000 4,303,000

4,070,000 4,077,000 4,163,000

4,577,000 4,623,000 4,803,000

4,636,000 4,685,000 4,775,000

2007 2008 2009 2007 2008 2009 2007 2008 2009


LA 2Total number and rate of employee turnover by age group, gender, and region

Employee turnover is calculated as a ratio of resigned employees compared to the number of employees at yearend. For 2010, our voluntary employee turnover as a percentage of total workforce population was 2.19%. This is lower than the 2.7% turnover rate in our industry.

CORPORATE SUAL PAGBILAOCORPORATE SUAL PAGBILAO

CORPORATE SUAL PAGBILAO

7

55

69

34

6

ACTU

AL N

UMBE

R OF

EM

PLOY

EES

ACTU

AL N

UMBE

R OF

EM

PLOY

EES

ACTU

AL N

UMBE

R OF

EM

PLOY

EES

ACTU

AL N

UMBE

R OF

EM

PLOY

EES

ACTU

AL N

UMBE

R OF

EM

PLOY

EES

ACTU

AL N

UMBE

R OF

EM

PLOY

EES

4

75

119

80

18

1

57

103

80

22

AGE

56++

46-55

36-45

26-35

< 25

NUMBER OF SEPARATEDEMPLOYEES

TENURE 16++ years

11-15 years

6-10 years

≤ 5 years


GENDER

MALE

FEMALE


63

55

35

18

ACTU

AL N

UMBE

R OF

EM

PLOY

EES

ACTU

AL N

UMBE

R OF

EM

PLOY

EES

ACTU

AL N

UMBE

R OF

EM

PLOY

EES

29

52

198

17

38

9

213

3

87

84

34

262 228

35

1.4%SUAL

2.7%PAGBILAO

2.9%CORPORATE

2.19%AVERAGE


LA 3Benefitsprovidedtofull-timeemployeesthatarenotprovidedtotemporaryorpart-time employees, by major operations

The company provides eligible employees coverage for health and dental, disability or invalidity coverage, maternity/paternity leave as mandated by law, and retirement benefits.

Full-time probationary employees (i.e., those whose tenure with the company is less than one year) receive the same benefits as full-time employees. Full-time contractual employees (i.e., those who are hired for temporary jobs on fixed term contract) are guaranteed to receive the same government-mandated benefits.

LABOR-MANAGEMENT RELATIONS

LA 4Percentage of employees covered by collective bargaining agreements

At present, 50% (366) of TeaM Energy’s workforce is represented by an independent union or covered by collective bargaining agreements.

Depending on their scope, the provisions of the collective agreements apply both to the employees formally covered by them and to employees who are not members of the union but paying agency fees. New regular employees become union members upon regularization and likewise benefit from the application of the collective agreements.

The Philippines’ labor laws do not require contractors to be covered by these agreements. Thus, the indicator does not apply to contractual employees.

LA 5Minimum notice period(s) regarding significant operational changes, including whether it is specified in collective agreements

Under Philippine labor laws, a 30-day notice is required for management-initiated separations. Other than this, there are no prescribed notice periods for any significant operational changes.

LA 6Percentage of total workforce represented in formal joint management-worker health and safety committees that help monitor and advise on occupational health and safety programs

Health and safety consultation is an integral part of our company’s commitment to introduce occupational health and safety management systems in all the areas of our operations based on OHSAS 18001 guidelines.

Formal joint management-worker health and safety committees are present in TeaM Energy’s plant sites. These committees promote the exchange of safety information, and enable management to implement related policies and programs.

In accordance with the Occupational Safety and Health Standards (OSHS) of the Philippines’ Department of Labor and Employment, the membership of the Safety & Health Committee include: the Station Manager as chairman, the OHS Officer as secretary, and the nurse and other employee representative (especially union members) as committee members.

Safety & Health Total Workforce Committee % represented Membership

Corporate 171 0 0%

Sual 296 24 8.11%

Pagbilao 730 63 8.63%

The S&H Committee reorganizes every January of each year. It has been the initiative of the plants to organize a Joint Safety and Health Committee for contractors working onsite. At our Corporate Office, a Safety Committee was set up only in 2011.



LA 7Rates of injury, occupational diseases, lost days, and absenteeism, and number of work-related fatalities by region

Corporate Sual Pagbilao TOTAL

Lost Time Accidents (LTA)a) TeaM Energy 0 1 0 1b) Contractors and/or Subcontractors 0 1 1 2

Fatalities 0 0 0 0

Occupational Diseases Rate

Absentee Rate 4.73% 5.27% 4.50%

Rate of recordable incidents relating to personnel injury Injury Rate = (Total # of injuries/Total hours worked)*200,000

a) Medical Attention Cases (MA) - TeaM Energy 0 1 1 2 - Contractors/Sub-contractors 0 2 1 3b) First Aid Cases (FA) - TeaM Energy 2 5 2 9 - Contractors/Sub-contractors 1 4 9 14

Rate of recordable events measured as:a) major fire incident 0 0 0 0b) minor fire incident 0 1 0 1c) preventable vehicular accidents - TeaM Energy 5 4 6 15 - Contractors/Sub-contractors 0 1 1 2

Number of Near-Misses - - For TeaM Energy only 0 3 1 4 - including Contractors/ Subcontractors 0 3 0 3

The company uses DOLE’s definition of “total days lost” as the combined total, for all injuries or illnesses of all days of disability resulting from temporary total injuries or illnesses; and/or all scheduled charges assigned to fatal, permanent total and permanent partial injuries or illnesses. The very small number of injuries causing absence from work indicates the high level of commitment to occupational safety at the company.

TeaM Energy is also a consistent recipient of the Gawad Kaligtasan at Kalusugan Award from DOLE for its outstanding achievements in occupational safety and health practices.

LA 8Education, training, counseling, prevention, and risk-control programs in place to assist workforce members, their families, or community members regarding serious diseases

TeaM Energy takes issues on health and safety seriously. Before employees are authorized to perform any job that may have health or safety risks associated with it, they must complete mandatory training related to their tasks.

Our commitment to health and safety extends to the families of our employees and members of the communities where we operate who may be in need of help in a variety of areas.

The company also complies with the submission of the Work Accident Injuries Report (WAIR) and the Annual Medical Report (AMR) to the Bureau of Working Conditions (BWC) under DOLE. These reports disclose the work-related injuries and occupational diseases in our areas of operations, as well as our initiatives to protect the health and safety of our workforce. Based on the 2010 reports we submitted, there were no cases of serious illnesses in our company.

At both the Pagbilao Power Station and Sual Power Station, several programs to raise awareness and prevent serious diseases were introduced to the members of our workforce and the community in 2010.

LA 9Health and safety topics covered in formal agreements with trade unions

TeaM Energy and its unions recognize the importance of a strong commitment to the health and safety of our workforce and therefore commit to the following:

• Membershipinjointmanagement-employeehealthandsafetycommittees• Provisionofpersonalprotectiveequipment• Participationofworkerrepresentativesinhealthandsafetyinspections, audits, and accident investigations• Trainingandeducation• Complaintsmechanism• Righttorefuseunsafework• Periodicinspections


Managerial Professional/Technical Rank and File

Average number of traininghours per employee

In addition to the programs contained in the collective bargaining agreements, TeaM Energy provides the following comprehensive safety and health programs:

• Annualphysicalexaminations• Workenvironmentmonitoring• Protectionofworkersagainsttuberculosisandhepatitis• Respiratoryprotectionprogram• Hearingconservationprogram• Immunizationprogram

TRAINING AND EDUCATION

LA 10Average hours of training per year per employee by employee category

In 2010, our workforce logged more than 50,000 training hours in such fields as leadership, technology, environment and communication. With a 730-strong workforce population, this figure amounts to an average of 69.05 training hours per employee.

Maintaining and enhancing the company’s core competency has proved to be a recipe for success at TeaM Energy. These training programs, primarily targeted at employees in our rank and file to hone their technical expertise, enabled TeaM Energy to increase work productivity and meet rising demand during 2010.

LA 11Programs for skills management and lifelong learning that support the continued employability of employees and assist them in managing career endings

TeaM Energy encourages professional development among our employees and offers various internal training programs, as well as training provided by third parties designed specifically for the needs of the company and its employees.

Competence development is planned based on the company’s strategy and goals to determine the kind of competence needed for successful operations both over short and long terms. Contained in our Employee Manual is a Learning and Development Policy that establishes guidelines for the conduct of training. Through various learning activities, TeaM Energy seeks to create opportunities for employees to grow, both personally and professionally.

At our plant sites, we also have the CCOP 007 manual on the management of the technical training to ensure necessary competencies, training and awareness for personnel in attaining effective and efficient implementation of these activities.

We are also putting in place a unique retirement support program called “Golden Circle Club” that will allow those who have retired from the company to continue with their lifelong learning. Mechanics for club membership are still being firmed up and are expected to be rolled out in 2012.

LA 12Percentage of employees receiving regular performance and career development reviews

All employees receive an assessment of their performance and feedback on their scope for development in an annual review. This form of employee review has been in place at TeaM Energy for more than ten years. Under TeaM Energy’s Performance Management Program (PMP), employees are challenged to meet both individual and team goals that are aligned with the company’s business strategies and objectives.

The PMP is also a structured approach that serves as an opportunity for sharing feedback on employee performance, as well as identifying developmental needs.

50,000 Total training hours of TeaM Energy’s 730-strong workforce in 2010, translating to an average of 69.05 training hours per employee

Human resource development is a cornerstone for TeaM Energy.

The premise of human resource development is that learning and personal development occur mainly in day-to-day work. Every employee should have an individual development plan and is responsible for implementing it, together with his or her immediate supervisor.


DIVERSITY AND EQUAL OPPORTUNITY

LA 13Composition of governance bodies and breakdown of employees per category according to gender, age group, minority group membership, and other indicators of diversity

G E N D E R % MALE % FEMALE

Corporate Office

Managerial 58.00% 42.00%

Professional/Technical 41.94% 58.06%

Rank and File 50.00% 50.00%

Sual




Pagbilao




As we work hard to remain a world-class organization, we realize that diverse perspectives and talents are crucial to our growth. We remain committed to hiring and developing all employees regardless of gender, age, ethnicity, race, creed, disability or sexual orientation.

However, male employees mostly qualify in the highly industrialized nature of our power plant operations. Most of the work is in engineering, which remains a male-dominated field in the job market.

AGEA G E < 25 26-35 36-45 46-55 56++

Corporate Office




Sual




Pagbilao





LA 14Ratio of basic salary of men to women by employee category

Wages and salaries are determined by the type of work performed by the employee, based on the job description. Individual performance and professional experience are also considered. In addition, remuneration is aligned with the labor market (energy industry), and we conduct regular comparisons in this context.

RATIO

Corporate Office

Managerial 101%Professional/Technical 97%Rank and File 130%

Sual


Pagbilao


AVERAGE SALARY OF MALE / AVERAGE SALARY OF FEMALE

SOCIAL:Human RightsDISCLOSURE ON MANAGEMENT APPROACH

Our Approach

TeaM Energy does not tolerate human rights violations, especially those associated, either directly or indirectly, with our business. In order to stress the importance of respect for human rights, we have required all our employees to adhere to a Code of Ethics and Business Conduct that serves as a compass for the core beliefs and ethical practices we must always aspire to do in the way we do business, including investment and procurement practices.

We also expect our business partners to respect human rights. We only deal with those who share our corporate values and ensure this through a strict screening process of all our suppliers and contractors through our Supplier / Contractor Accreditation System or Program.

Providing equal opportunities is an important pillar of our uniform, enterprise-wide personnel policy. This includes equal opportunities for both sexes and strict opposition to discrimination on the grounds of ethnic or national origin, religion, or age. We respect our employees’ freedom of association and collective bargaining.

We do not tolerate any form of child labor or forced or compulsory labor in direct or indirect association with our business activities or operations. We also respect the rights of indigenous people.

TeaM Energy’s Code of Ethics and Business Conduct, policies, and guidelines substantially comply with existing Philippine laws, including those pertaining to freedom of association, nondiscrimination, privacy, collective bargaining, compulsory and child labor, immigration, and wages and hours.

Training and awareness on our Code of Ethics and Business Conduct addresses our expectations in these areas. No incidents or violations involving rights of indigenous people have occurred. Were issues to arise, our Assistant Vice President Human Resources would have responsibility for addressing them.


INVESTMENT AND PROCUREMENT ACTION

HR 1Percentage and total number of significant investment agreements that include human rights clauses or that have undergone human rights screening

TeaM Energy ensures the protection of fundamental rights enshrined in the Constitution of the Philippines. While our agreements with our business partners (such as suppliers, contractors, and customers) and other stakeholders (employees and communities) do not specifically have human rights clauses, our standard contracts include strict compliance with all relevant laws and regulations, which include those related to human rights protection.

Our partners undergo a thorough screening process before entering into any agreements with the company. While the qualifications do not pertain specifically to human rights, they include a comprehensive evaluation of the partner’s reputation, past performance, other projects, and credit worthiness, among other things. Site visits on the partner’s place of business is also conducted, where necessary. This enables us to determine if the partner adheres to pertinent laws and regulations, including those on human rights.

HR 2Percentage of significant suppliers and contractors that have undergone screening on human rights and actions taken

TeaM Energy has issued policies and procedures that mandate the Materials Management Department (MMD), which is in charge of procuring the requirements of the various units of the company, to deal only with licensed, reputable, reliable, competent and responsible vendors and contractors that passed the accreditation process.

All of our suppliers and contractors undergo this accreditation process, which includes an audit of the reputation, past performance, projects and credit worthiness, and the submission of pertinent documents, including current licenses and permits to operate. We also conduct site visits and interviews, particularly for local suppliers.

While the screening process does not specifically cover human rights issues, all our suppliers and contractors are required to comply with all relevant laws and regulations, including respect for human rights.

HR 3Total hours of employee training on policies and procedures concerning aspects of human rights that are relevant to operations, including the percentage of employees trained

In 2010, TeaM Energy launched a Code of Ethics and Business Conduct manual through a series of 28 separate rollouts to accommodate the different schedules of the employees.

All our employees (total of 730) attended the training sessions, which lasted for three hours each and included human rights issues.

NON-DISCRIMINATION

HR 4Total number of incidents of discrimination and actions taken

TeaM Energy accords all individuals with equal access to employment and advancement opportunities, and treat them in a fair and equitable manner. We do not tolerate any form of discrimination, be it due to gender, age, physical appearance or origin. This anti-discrimination principle is firmly established in our company-wide human resources policy. Our Code of Ethics and Business Conduct manual contains provisions on non-discrimination. In addition, our revised Employee Manual, also issued and rolled out in 2010, provides for Equal Employment Opportunity. It specifically states that the company will take action to avoid discrimination in matters relating to employment. The company did not receive any complaint of discrimination in 2010.

HR 5Operations identified in which the right to exercise freedom of association and collective bargaining may be at significant risk, and actions taken to support these rights

Freedom of association is both constitutionally guaranteed and governed by a number of specific laws in the Philippines where TeaM Energy operates. These laws are adhered to throughout our organization.

In our Pagbilao and Sual Plant Sites, covered rank and file employees are members of labor unions and participate in collective bargaining agreements, which the Company recognizes. Employees in our Corporate Office did not seek to form a union, particularly those occupying sensitive positions in Human Resources, Legal and Finance, as well as the executive secretaries.

CHILD LABOR/ FORCED AND COMPULSORY LABOR

HR 6 HR 7Operations identified as having significant risk for incidents of child labor/forced or compulsory labor, and measures taken to contribute to the elimination of child labor/forced or compulsory labor

The company does not hire employees who are below the legal age of 18. TeaM Energy opposes all forms of child labor.


In addition, we consider forced and compulsory labor to be contrary to our core values and the Code of Ethics and Business Conduct. Employees are not required to work beyond regular hours, except in necessary cases as prescribed by the Philippine Labor Code. Those who do are compensated accordingly.

SECURITY PRACTICES

HR 8Percentage of security personnel trained in the organization’s policies orprocedures concerning aspects of human rights that are relevant to operations

The company adheres to a Security Policy and the provisions relating to security in our Emergency Management Guidelines. Site Security Officers and some Site Security Assistants are former members of the Armed forces, military or police. As such, they have received training on human rights. Security guards hired on contractual basis are required to have valid licenses and undergo relevant training periodically from accredited training centers to maintain these licenses.

In 2010, all of the 12 security employees of the company have attended company sessions on the roll-out of the Code of Ethics and Business Conduct, which includes provisions on respect for human rights.

HR 9Total number of incidents of violations involving rights of indigenous people and actions taken

TeaM Energy’s respect for human rights includes indigenous people. There were no recorded incidents of violations during the reporting period.

No. of personnel Total No. trained on % trained on Human Rights Human Rights

Corporate

Sual

Pagbilao

Employee

Contractor

Employee

Contractor

Employee

Contractor

4

4

4

11 guards, 8 CCTV staff

147 guards

171 Plant, 33 accommodations

SOCIAL:SocietyDISCLOSURE ON MANAGEMENT APPROACH

Our Approach

Everywhere we work, we seek to become the local energy company – training and employing local staff at all levels, developing and patronizing local suppliers as much as we can, and contributing to the local communities touched by our presence. TeaM Energy aims to ensure that our presence in local communities brings positive change and creates mutual benefit. The relationships that we build with communities through our implementation of community development programs, engagement with activities key stakeholders and regular dialogue have helped establish a powerful brand of a good corporate citizen for TeaM Energy.

We use various tools to monitor and audit on our performance and commitments to society. These include the conduct of socio-economic surveys and third-party audits, as well as a mechanism for employees to report breaches of our Code of Ethics and Business Conduct.

Community

Emboldened by our Vision statement that aims to be “the leading and most respected company among Independent Power Producers in Asia-Pacific” and to “deliver results with the highest standards of ethical behavior,” we make Significant Social Contributions (SSC) that contribute to enriching our communities.

Through 2010, TeaM Energy grouped its SSC activities into several focus areas: Education, Health, Economic Development, Environment (Biodivesity), and Partnerships. Each of our power plant facilities maintains a budget to implement identified community programs, support locally based organizations and causes in our host communities. This is on top of the man-hours we invest through employee volunteerism efforts.


COMMUNITY

SO 1Nature, scope, and effectiveness of any programs and practices that assess and manage the impacts of operations on communities, including entering, operating, and exiting

TeaM Energy’s Significant Social Contributions (SSC) initiatives aim to promote sustainable development in our host communities. We employ a consultative approach to understand the socio-economic needs of communities by engaging with government, business partners, and socio-civic and people’s organizations. By merging our business and SSC goals, we aim to create meaningful mutual benefit.

Prior to engaging a community, TeaM Energy, through its social development arm TEFI and the ComRel group in each plant site, undertakes baseline socio-economic research and development facilitation. Each program or project was developed in consultation with partners (usually formed into a Technical Working Group with two or more representatives per partner-organization) and possible recipients of the program or project.

The Technical Working Group (TWG) identifies the performance indicators, specific goals and timelines. During its implementation, a regular monitoring or feed backing meeting is conducted by the TWG to improve or sustain the implementation of the program. At the end of its implementation, the TWG convenes for a closeout orterminal evaluation.

Corruption, Public Policy, Anti-Competitive Behavior, Compliance

Our Code of Ethics and Business Conduct sets the expectation for employee and external engagement. It also establishes expectations around internal corruption, anti-competitive behavior, conflicts of interest and other unethical practices.


We ensure that all our employees understand the policies contained in the Code by conducting a series of training (roll out) sessions across sites.


All our employees are expected to follow the reporting procedures in the Code of Ethics and Business Conduct. The Executive Committee discusses with business units the company’s position on various issues. Monitoring and follow-up programs continue to evolve.

We also established reportorial requirements on receiving and giving gifts to prevent internal corruption.

Our SSC Core Group quarterly monitors and reviews all social investments and initiatives. We also conduct regular dialogues with stakeholder groups, such as the barangay forum for our Safe Water for the Barangays Program, monthly meetings with the Mothers’ Clubs, and “Kumustahan” with the cooperatives in Sual and Pagbilao to monitor the communities’ perception and feedback on programs we are implementing. The company also opens its doors to stakeholders during Lakbay Aral (educational tours) and plant visits, which also serve as opportunities for the company to gauge public perception on our operations.


The Executive Committee ensures that all our employees abide by the Code of Ethics and Business Conduct. Compliance Officers monitor the submission of forms on requests for expenditure approval and gifts.

Responsibility for our SSC initiatives rests with the Assistant Vice President for Corporate Affairs, who approves or recommends the approval to the CEO and President of programs and projects related to the achievement of SSC goals. The External Affairs Senior Manager approves or endorses the approval of such programs/projects to the AVP for Corporate Affairs; and the Community Affairs Management Team (Community Affairs Manager, Public Relations Supervisor in Pagbilao and Sual) prepares the project proposals. Programs under the mandates of the TeaM Energy Foundation goes through the regular process of approval through the TEFI Board of Directors.


TeaM Energy communities are model communities in the country in terms of education, health and economic development

Improved Literacy

Reduce Child Malnutrition

Increase Income Opportunities

We take the lead in improving and protecting the biodiversity of the areas where we operate

Reduce environmental footprint

Build strong and sustainable communities

Embed CSR (Internal CSR)

We are a catalyst in enhancing Philippines-Japan social and economic partnership

National Partnerships

Local Partnerships

Branding and Reputation

Total as of 31 December 2010

TARGET

10

10

10

30

TARGET

20

5

5

30

TARGET

15

5

20

40

100

ACCOMPLISH-MENT

10

9.5

9.5

29

TARGET

19.5

5

4

28.5

TARGET

15

4.5

20

39.5

97

The 2010 SSC ScoreboardSocio-economic



Some of the programs that are designed to meet the identified targets and commitments in various areas as follows:

Cool Maging Healthy Gintong Binhi sa Karunungan Scholarship Program Balik-Aral sa Kaunlaran Program Competition and Development Program

Our external stakeholders are furnished with an Annual Community Development Summary on our major accomplishments and efforts in the communities. In addition, results of various surveys conducted are made available to the public.

As the power plants continuously operate, we manage the impact of their presence in the community by closely monitoring through regular visits and interaction, engaging partners and beneficiaries, conducting focus group discussions, and enlisting independent and credible consultants to audit us when needed.

For example, we hold a socio-economic and public health monitoring survey annually for some indicators in our host communities in Sual, Pangasinan and a comprehensive socio-economic and public health monitoring survey every five years in the host communities of both Sual and Pagbilao Power Plant to monitor changes, if any, on significant indicators. We implement this monitoring by engaging a competent consultant accredited by the World Health Organization.

We share the survey results with the communities and their key leaders through a series of information drives and dialogues. Aside from being transparent, this also helps us strengthen our relationship with stakeholders.

Through these processes, the company and our stakeholders are able to effectively determine and monitor the impact of TeaM Energy’s presence in the host communities.

CORRUPTION

SO 2Percentage and total number of business units analyzed for risks related to corruption

Operational risk management is included in TeaM Energy’s strategy process, and business units conduct risk assessments, including corruption.

In 2010, we issued the Code of Ethics and Business Conduct manual to all our employees and conducted 28 separate training (rollout) sessions to ensure that 100% of our workforce understand our company’s basic policies and directives, including issues on corruption. The Code covers the importance of following laws and statutes that concern our operations and financial reporting. It also gives details on how to protect information about our operations, customers and suppliers.

The Code, which is a reminder of each employee’s responsibilities, is a tool to help everyone deal with situations in which they are unsure how to act. The process of acknowledging the Code is a way to raise awareness and ensure the business is run with integrity. This way the company can maintain credibility with customers, partners, employees, shareholders and other stakeholders.

During the reporting period, our Legal Department has also introduced a “Form C” document intended to monitor gifts employees receive from business partners (suppliers and contractors). This form is in addition to the “Form A” (Request for Expenditure Approval) and “Form B” (for declaring gifts and other privileges given by employees) documents required to be submitted to the department as a measure that could ultimately prevent internal corruption.

SO 3Percentageofemployeestrainedinorganization’santi-corruptionpolicies

All employees across sites (Corporate Office, Sual and Pagbilao Plant Sites) attended and participated in the training sessions that went with the rollout of the Code of Ethics of Business Conduct in 2010. The Code includes provisions on anti-corruption.

SO 4Actions taken in response to incidents of corruption

A small number of cases alleging corruption were brought to the attention of TeaM Energy in 2010. The company has investigated and found no evidence of corruption in any of these cases.

Employees are aware of the consequences in case they are found to have violated company policies related to corruption, which may include termination of employment. These policies are contained in the Code of Ethics and Business Conduct, as well as the revised Employee Manual issued and rolled out in 2010.

PUBLIC POLICY

SO 5Public policy positions and participation in public policy development and lobbying

TeaM Energy has longstanding relationships with the government and interacts regularly with various government agencies and industry groups. Our engagement includes a wide range of activities and issues, including the following:


•ParticipationinpublichearingssponsoredbytheBureauofInternal Revenue (BIR) regarding proposed tax legislations – We participate in the formulation of revenue policies and industry consultation on proposed revenue measures.

•MembershipinthePhilippineIndependentPowerProducersAssociation (PIPPA) – TeaM Energy representatives attend regular meetings to discuss updates on proposed legislations and help draft measures and position papers affecting the power sector.

•Participationincongressionalhearings–Thecompanyisabletoaid legislation by attending various public hearings on proposed legislations affecting the energy sector. TeaM Energy representatives are also able to share their insights and expertise as resource speakers in meetings conducted by the Joint Congressional Power Commission (JCPC) and the Committee on Energy.

SO 6Total value of financial and in-kind contributions to political parties, politicians, and related institutions by country

TeaM Energy does not give monetary or in-kind support to political parties, politicians or related institutions. While contributions were made in 2010 that were over and above the company’s social responsibility programs and projects and customary gifts during holidays, these were not political in nature and were given to government entities, non-government organizations and communities in the form of financial assistance or aid. This amounted to P3.4 million.

Our policies related to anti-corrupt practices date back to the time the company was owned by Mirant Corporation. As a subsidiary of an American company then, it was mandated to strictly abide by the “Foreign Corrupt Practices Act” which makes it unlawful for any American company to give money to a foreign official for any business dealings.

While TeaM Energy is no longer under U.S. jurisdiction, we continue to strictly adhere to certain reportorial requirements on giving financial and in-kind contributions. All our business partners (suppliers and contractors) are also bound by legal contracts that prohibit them from engaging in bribery practices.

ANTI-COMPETITIVE BEHAVIOR

SO 7Total number of legal actions for anti-competitive behavior, anti-trust and monopoly practices and their outcomes

In 2010, TeaM Energy was not involved in any legal actions for anti-competitive behavior, or anti-trust or monopoly practices. The Philippines to date also does not

have a comprehensive and developed legislation relating to anti-trust and monopoly activities.

COMPLIANCE

SO 8Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with laws and regulations

TeaM Energy paid tax penalties amounting to $233,112 in 2010. However, based on the GRI definition, the amount still does not qualify as “significant” fines.

As earlier mentioned, we also faced significant challenges in 2010, including the issue on the real property tax involving our Pagbilao power plant. TeaM Energy’s position on this matter has always been to abide by the agreements it had entered into prior to the construction of the plant. Under these agreements, the National Power Corporation (NPC) is responsible for real property taxes. As a responsible citizen, TeaM Energy worked together with the national and local governments in coming up with an acceptable solution. We remained focus in our efforts until the issue was finally resolved in July 2011.

SOCIAL:Product ResponsibilityDISCLOSURE ON MANAGEMENT APPROACH

Our Approach

For TeaM Energy, product responsibility means exercising due care in the generation of electricity, to ensure that our operations do not pose hazards to the health and safety of the communities where we operate, and the environment. We have longstanding management systems in place to assess the health and safety impacts of our operations in all life cycle stages.

Part of our vision towards Operational Excellence is to be “the preferred business partner in supplying energy.” In order to achieve this vision, we apply the highest


safety, reliability and environmental friendliness in our operations. This requires an excellent know-how, high efficiency, modern infrastructure and continuous willingness to innovate. Given the high social responsibility attached to coal-fired power plants, we apply the highest principles on the activities and management of our group. Adhering to basic ethical principles and all legal requirements is a matter of course to us.

“Delivering results with the highest standards of ethical behavior” is part of TeaM Energy’s corporate vision. The company is committed to conducting business in accordance with the highest standards of business ethics and complying with applicable laws, rules and regulations.


To translate our commitments into action, the company adopted a Code of Ethics and Business Conduct in 2010. This serves as a compass for the core beliefs and ethical practices TeaM Energy employees must always aspire to do in the business. We continue to conduct training programs for the members of the Business Development and Commercial Affairs Group.


Responsibility for ensuring that we comply with all laws, codes and regulations related to our product (i.e., electricity) rests with the Executive Committee.

CUSTOMER HEALTH & SAFETY

PR 1Life cycle stages in which health and safety impacts of products and services are assessed for improvement, and percentage of significant products and services categories subject to such procedures

TeaM Energy is in the business of converting fuel into electricity. Except for resource planning and generation, the other life cycle stages of this operation are handled by external or third parties. The responsibility for the extraction of resources (mainly coal) lies with the Independent Power Producer Administrator (IPPA) while delivery of electric power to the grid is that of the National Power Corporation/PSALM. The excess capacity generated by TeaM Energy’s plants are sold to electric cooperatives and private utilities which handle the transmission and distribution of electricity in their areas.

In resource planning, TeaM Energy considers social impacts, along with economic and financial impacts. Health and safety impacts are included in decision-making related to social impacts. Public safety management plans are established for each of our generating facilities. These plans include design, placement, and maintenance of safety signages.

PR 2Total number of incidents of non-compliance with regulations and voluntary codes concerning health and safety impacts of products and services during their life cycle, by type of outcomes

TeaM Energy has no record of incidents of non-compliance with regulations and voluntary codes concerning health and safety impacts of its products and services during their life cycle. We complied with all legal requirements based on Philippine standards.


Both Pagbilao and Sual power plants are recipients of the Gawad Kaligtasan at Kalusugan (GKK) Award given annually by the Department of Labor and Employment (DOLE) to companies with exemplary compliance with DOLE’s Occupational Safety and Health Standards. Both power stations are also OHSAS 18001- and ISO 14001-certified, demonstrating the company’s compliance with world-class standards on workplace safety health and environmental management.

PRODUCT & SERVICE LABELLING

PR 3Type of product and service information required by procedures, and percentage of significant products and services subject to such information requirements

TeaM Energy produces electricity for the NPC/PSALM, electric cooperatives and private utilities. As such, complying with product information requirements is the responsibility of our customers.

PR 4Total number of incidents of non-compliance with regulations and voluntary codes concerning product and service information and labeling, by type of outcomes

TeaM Energy has not had incidents of non-compliance with regulations and voluntary codes concerning product and service information during the reporting period.

PR 5Practices related to customer satisfaction, including results of surveys measuring customer satisfaction

TeaM Energy conducts a comprehensive customer satisfaction survey on its main markets, the results of which provide guidelines for strategic targets and operational development.

We also employ a continuing Customer Relationship Management (CRM) program geared customized to meet the specific needs of every customer. In addition, we hold constant dialogues with customers via face-to-face meetings, phone calls and email exchanges to assure that customers are abreast of developments related to ongoing projects.

PR 6Programs for adherence to laws, standards, and voluntary codes related to marketing communications, including advertising, promotion, and sponsorship

TeaM Energy adheres to laws, standards and voluntary codes related to marketing communications. This includes following the guidelines of SGS Philippines on the use of the ISO Certification Mark and the Code of Ethics governed by the Advertising Board of the Philippines (AdBoard).

With regard to sponsorships, TeaM Energy is a regular sponsor of the activities of the Wild Birds Club of the Philippines, a non-profit organization promoting the protection of migratory and indigenous species of birds in the Philippines. This sponsorship enables TeaM Energy to translate its commitment for biodiversity preservation into action.

MARKETING COMMUNICATIONS

PR 7Total number of incidents of non-compliance with regulations and voluntary codes concerning marketing communications, including advertising, promotion, and sponsorship by type of outcomes

The company complies with all regulations and voluntary codes concerning marketing communications, including advertising, promotion, and sponsorship.

PR 8Total number of substantiated complaints regarding breaches of customer privacy and losses of customer data

TeaM Energy does not have any substantiated complaints regarding breaches of customer privacy and losses of customer data during the reporting period.

COMPLIANCE

PR 9Monetary value of significant fines for non-compliance with laws and regulations concerning the provision and use of products and services

TeaM Energy is not aware of any events of non-compliance with laws and regulations concerning the provision and use of products and services during the reporting period.


ELECTRIC UTILITIES SECTOR SUPPLEMENT

PROFILE

EU 1Installed capacity, broken down by primary energy source and by regulatory regime

TeaM Energy utilizes a fuel mix of coal and natural gas to generate a total gross installed capacity of 2,200 MW of electricity, broken down into the following:

While overall generation has increased over the past several years, the mix by fuel type has not changed. However, TeaM Energy has started exploring renewable sources of energy to provide the grid with a more environment-friendly generated capacity.

EU 2Net energy output broken down by primary energy source and by regulatory regime

In the reporting year, the net energy generation of the Pagbilao coal-fired power plant, Sual coal-fired power lant and Ilijan natural gas plant were 3,593 GWH, 6,087 GWH and 7,766 GWH, respectively. This net energy output represents about a third of the energy requirements of the Luzon grid.

Pagbilao Sual Ilijan* Plant

Installed Capacityin MW / Fuel Type

750

Coal Coal Natural gas

* TeaM Energy owns a 20 percent stake

1,200 1,200



EU 3Number of residential, industrial, institutional and commercial customer accounts

TeaM Energy supplies electricity to the state-owned National Power Corporation (NPC) through Energy Conversion Agreements (ECA). Our Energy Supply Business, which sells our excess capacity, had seven customers during the reporting year. These were the following:

EU 4Length of above and underground transmission and distribution lines by regulatory regime

TeaM Energy does not handle transmission and distribution for the electricity supplied to the NPC under the ECA. For the excess capacity we sell through our Energy Supply Business, below are the details:

•SolidDevelopmentCorporation(SDC):approximately7kilometers,1x69kV transmission line from Cruz-na-Daan Service Station up to SDC Plant

•BaguioCityEconomicZone(BCEZ):approximately7.702kilometers,1x69 kV transmission line from Itogon Service Station to Texas Instruments Compound

•NPCAlliance(formerlyBPC):approximately10km,2x230kVtransmission line from NGCP Tower tapping point up to PNOC-AFC Compound

EU 5Allocation of CO2e emissions allowances or equivalent, broken down by carbon trading framework

The Philippines has yet to adopt a regulatory framework in connection with the Kyoto Agreement on the reduction of CO2e emission targets and carbon trading. As such, TeaM Energy has yet to observe emission allowances for this purpose.

ECONOMIC

EU 6Management approach to ensure short and long-term electricity availability and reliability

The Philippines’ power consumption in 2010 was estimated at 65 terawatt hours (TWh). By 2015, this is expected to increase to 65TWh due to higher economic growth and an increase in population. (Source: Philippines Power Report Q2 2011, Business Monitor International, April 15, 2011)

In order to secure energy supply, TeaM Energy is continually optimizing its power generation capacities. This strategy includes the following measures:

•Maintenanceandenhancementoffacilitiesandequipment •Heatrateimprovementprogram(discussedinEN5andEN6) •Boileroptimizationprogram •Plantoperatorstraining •Facilitiesmodifications •Sparepartsoptimization

Name of client Location Classification

Solid Development Corporation (SDC)

Baguio City EconomicZone (BCEZ)

Benguet Electric Cooperative (BENECO)

La Union Electric Corporation (LUECO)

Philex Mining Corp.

SEM-CALACA Power

Meralco for Sunpower Philippines Mfg. Ltd.

Mataas na Parang San Ildefonso, Bulacan

Loakan Road, Baguio City Economic Zone

Alapang, La Trinidad, Benguet Electric Cooperative

San Fernando, La Union Distribution Utilities

Padcal, Tuba Benguet Large Industrial User

Calaca, Batangas Replacement Power

Laguna DU (Meralco) Large Industrial User (Sunpoer)

Large Industrial User

Availability & Reliability

- Maintenance enhancement of facilities and equipments- Heat rate improvement program- Boiler optimization program- Plant operators training- Facilities modifications- Spare parts optimization

Policy governing – Energy Conversion Agreement

Additional contextual information- Financial reporting and disclosures- Technology obsolences- Earnings- Shareholder information- Organizational strategy


EU 7Demand-side management programs including residential, commercial,institutional and industrial programs

The primary objective of most demand-side management (DSM) programs is to provide cost-effective energy and capacity resources to help defer the need for new sources of power, including generating facilities, power purchases, and additional transmission and distribution capacity. TeaM Energy has yet to embark on DSM, but it recognizes these programs’ importance as a way to enhance customer service and demonstrate action on climate change.

TeaM Energy, through its subsidiary TPEC, has been aggressively marketing its Total Power Solutions Program with various companies for their power needs. Capitalizing on its vast expertise in the field of supply, trading, engineering, support, regulatory compliance and project management, TPEC provides advisory assistance in the management of its clients’ power requirements so they realize savings from power-related costs.

TPEC also prepares a unique and tailor-fit study by immersing in clients’ load profile, power flow, supply provisions and arrangements that impact on rates, risk management, technical requirements, as well as keeping abreast of emerging market developments in the power sector. With these, TPEC produces work outputs pertaining to financial and technical analyses, reports and recommendations to help clients maximize and achieve energy efficiency in their operations.

To this end, TPEC has invested heavily in developing the skills and competence of its management and technical personnel through continuous training, both local and international, in the areas of electricity trading, finance, fuel procurement, management, marketing and commercial contracts.

TPEC’s involvement assures that ongoing electricity demands are met while seizing opportunities and offering solutions to future issues and needs, taking into account developments in the power industry.

EU 8Research and development

Developing renewable energy projects supports the initiative of the Philippine government to reduce the country’s dependence on fossil-based power plants. It also promotes the creation of greater access to electricity in the rural areas.

TeaM Energy has been proactive and forward thinking in the exploration and development of renewable energy resources. As proof of our commitment, we have been exploring potential renewable energy projects to complement our existing portfolio. We have so far identified five types of renewable energy projects and made an initial investment of USD65,000 for research and development on mini-hydro.

In addition, TeaM Energy, through TEFI, is part of the DoE’s Working Group on Determining/Identifying Opportunities for Carbon Capture and Storage (CCS) in the energy sector. This is a technical assistance project funded by the Asian Development Bank.

By participating in these studies, we are provided with the opportunity to explore the potentials for CO2 mitigation in anticipation of possible business risks discussed under EC2.

EU 9Provisions for decommissioning of nuclear power sites

TeaM Energy does not own any nuclear power plants. Therefore, we do not participate in decommissioning activities.

EU 10Planned capacity against projected electricity demand over the long term, broken down by energy source and regulatory regime

Type Capacity R&D Expenditure

Mini-hydro

Impounding hydro

Solar

Geothermal

Biomass

Approximately 5 MW US$ 65,000

20 MW Ongoing

10 MW Ongoing

20 MW Ongoing

11 MW Ongoing

25,000

20,000

15,000

10,000

25,000

0

MW

Required Additional Cap

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

10,030 10,030 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384

1,646 1,701 1,774 1,865 1,944 2,038 2,135 2,235 2,327 2,432 2,541 2,656 2,775 2,900 3,031 3,167 3,310 3,459 3,615 3,778 3,949 4,127

7,036 7,270 7,582 7,934 8,309 8,710 9,123 9,553 9,945 10,393 10,860 11,349 11,860 12,394 12,952 13,535 14,145 14,783 15,450 16,147 16,875 17,636

300 300 450 450 450 500 600 650 500 650 650 650 800 650 800 900 800 900 900

41 634Committed

Existing Capacity

Required Reserve Margin

Peak Demand

4.5 % AAGR

600 MW Coal-Fired(GN Power);33.5 MW BacMan II

Malaya (685.83 MW)Retirement

40.8 MW BacMan I-2


In the Philippines, overall responsibility to supply electricity rests with the state-owned NPC, which owns, maintains and develops transmission networks. The Department of Energy (DoE) is responsible for planning and projecting energy capacity.

As per DoE’s projections, the Luzon energy grid demands an additional capacity of 300 to 450MW from years 2011-2016, increasing to 500 to 900MW from 2017-2030.

To help address these energy requirements, TeaM Energy plans to expand the capacity of the Sual and Pagbilao power plants up to 900MW (300MW for Pagbilao, 300-600MW for Sual). We are also eyeing additional capacity of about 50MW from renewable energy projects.

EU 11Average generation efficiency of thermal plants by energy source and regulatory regime

Generation efficiency is a constant focus in operating the company’s power plants. Average generation efficiency is defined as the energy generated from the energy input into the heat and electricity-generating stations.

EU 12Transmission and distribution losses as a percentage of total energy

The transmission lines or the high-voltage backbone system of interconnected transmission lines, substations, and related facilities are owned and maintained by the National Grid Corporation of the Philippines (NGCP). As such, the distribution of electric power to the end-users is the responsibility of electric cooperatives, private distributors, government-owned utilities and local government units that have the franchise to operate the distribution system.

ENVIRONMENT

EU 13Biodiversityofoffsethabitatscomparedtothebiodiversityoftheaffectedareas

Right from the planning stage of development work, TeaM Energy takes into consideration the need to preserve the environment and the landscape by seeking

Average Net Thermal Efficiency (%)

Sual 32.93

Pagbilao 34.87

solutions with local government units for locating infrastructure. Like other environmental variables, biodiversity – and in particular the presence of protected areas – therefore constitutes an input to the planning of a sustainable grid.

We have identified 30.7 hectares of agricultural land in Sual and Pagbilao that had been converted for industrial use for the operation of our power plants. To mitigate our environmental impact, both during the construction and the operation of our plants, we have planted trees and other ornamental plants that will help restore ecological balance and improve the ambience in the area. To date, a total of 35.64 hectares – 16 percent more than the size of the land converted – have been planted with trees. This is maintained and monitored twice a year.

EU 14Processes and processes to ensure the availability of a skilled workforce

TeaM Energy’s recruitment process is based on seeking the most talented people possessing the specialized, intellectual, and relational capabilities that are most suitable and appropriate for the roles they will perform. Department Heads are responsible for assessing whether the skills in their respective groups are sufficient to achieve their goals. Should a gap exist, necessary interventions are listed in the Performance Management Plans of employees at the beginning of the year. If additional manpower is required, this is relayed to the Human Resources group and approved by the Executive Committee.

To constantly ensure that capabilities are aligned with the demands of the market, the company has a training model whose purpose is to guarantee that all employees have the opportunity to extend their knowledge and develop the key abilities for managing their roles effectively.

The company provides the following training programs to various types of employees:

Under our Learning and Development Policy, employees are encouraged to pursue continuing professional education (CPE) before renewing their licences. These CPE courses are given during annual conventions and other Professional Regulatory

Type of Employees Training Programs Provided

New employees

Non-technical employees

Workers in Operation and Maintenance

Control Operators and Senior Control Operators

Job orientation seminarClassroom, on-the-job training

Seminar on “Power Plant Fundamentals” at the plant site

Vendor’s training

Specialized training through simulations


Commission-certified CPE providers. We also partner with the Technical Education and Skills Development Authority (TESDA) for the training and certification of heavy equipment operators and welders.

While certain senior management positions are reserved for Japanese nationals, TeaM Energy also recruits local workers. This is formalized in a Memorandum of Understanding with the local government unit, which assures residents in areas where we operate priority for employment, provided that they possess the minimum requirement. This commitment is also stipulated in our Environmental Compliance Certificates issued by the DENR.

SOCIAL

EU 15Percentage of employees eligible to retire in the next 5 and 10 years broken down by job category and by region

The table below provides a breakdown by job category and by plant site:

EU 16Policies and requirements regarding health and safety of employees and employees of contractors and subcontractors

TeaM Energy employees are trained in health and safety issues relevant to their assignments. Under our Site Safety, Health and Environmental Policy (coded as SSO 045 in Pagbilao and SCOP 001 in Sual), each plant site is committed to integrate safety, health, and environmental protection in all aspects of our business and operations upholding the following pillars of our safety, health, and environmental stewardship:

% retirable in the next 5 years % retirable in the next 10 years

Operations

Maintenance

Technical Support

Administrative Support

Sual Pagbilao Corp Sual Pagbilao Corp

10% 16% 10% 22% 22% 20%

17% 14% 6% 22% 19% 13%

5% 6% 4% 7% 11% 8%

3% 5% 1% 6% 10% 3%

1) Prevention of injury and ill-health 2) Prevention of pollution 3) Compliance with legal and other requirements 4) Continual improvement 5) Employee involvement 6) Accountability 7) Transparency 8) Management commitment

The policy is implemented and monitored through a roster of elemental procedures (with reference to the elements of OHSAS 18001:2007) and operational control procedures (with reference to specific safety protocols and programs).

In 2010, we added the following new safety programs:

•DailyMorningSafety&HealthAssemblyProgram:A 15-minute assembly among employees and contractors that promotes good health, unity and teamwork. This is conducted every Tuesday and Thursday in Pagbilao and is followed by a Safety Talk on various programs in the plant. •ContingencyPlansforPandemicsandEpidemics: Developed as an implementing action for times of pandemic/epidemic to safeguard employees at the Plant Site and prevent the spread of diseases within the plant site in order to maintain the well being of employees and contractors. This also ensures the continuous operation of the plant that may be impaired if employees are affected with the disease outbreaks. •Behavior-basedSafetyProgram: This term is used for programs focused on changing the behavior of workers towards positive safety behavior. This relies on the belief that most workplace safety and health problems are the result of “unsafe acts.” The program provides a framework for implementing the observation and feed back process in order to modify worker’s behavior towards safety. •FireProtectionSystemImpairmentProgram: A program to limit the downtime from the fire protection system and ensure that contingency measures are in place in the event of any impairment in the fire protection system. •MedicalSurveillanceProcedure: A program developed by Sual Power Station for the early identification of medical conditions that could lead to occupational injuries and illnesses.

• Ergonomics Program: Minimizes employee exposure to ergonomics hazards by training on hazard recognition, use of appropriate engineering controls, and use of personal protective equipment.

• Driving Safety: Plants’ guidelines to authorized drivers and contractors in preventing vehicular accidents through defensive driving, compliance to speed limits and road safety signage and preventive maintenance of vehicles.


•Work ZoneManagement: identifies various areas in the plant premises where different types of activities are done and the appropriate plant protection equipment are required. We also manage our suppliers and contractors’ compliance with our safety and health programs through a series of screening, documentation requirements, orientation, and evaluation process under the following procedures:

1. Safety, Security, Health and Environment (SSHE) ORIENTATION 2. Contractors Management Program All contractors are covered by the sites’ safety policies.

EU 17Days worked by contractor and subcontractor employees involved inconstruction, operation and maintenance activities

The activities we mainly contract out to other companies include construction, operation, and maintenance, which involve various categories of workers (engineers, technicians, welders, power plant mechanics, painters, electricians, helpers, etcetera). In 2010, total days worked by contractors and their employees amounted to 398,549.16.

EU 18Percentage of contractor and subcontractor employees that have undergone relevant health and safety training

It is important for TeaM Energy to care for our contractors to the extent that we care for our own employees. As we consider them as our partners in ensuring a reliable energy supply, it is essential that our contractors also receive health and safety training to minimize the risk of injuries.


No. of Contractor

Construction Activities

Operation Activities

Maintenance Activities

not monitored 282,737.16

n / a 115,812 n / a

not monitored 230,747.16

not monitored 51,990

Corporate Office

*Only total contractor manhours is monitored.

TOTAL 115,812 282,737.16

Pagbilao* Sual


We are committed to providing electricity reliably and safety. Covered by our comprehensive Incident Management System is the Hazard Identification, Risk Assessment and Determining Controls (HIRADC) designed to identify areas of vulnerability in our business and address programs on employee safety, public safety, emergency management, business continuity management and enterprise risk management as well as programs to ensure the resilience of our generation systems.

We have Emergency Preparedness and Response procedures, as well as Emergency Guidelines, which are used to respond to all significant emergencies and communication, onsite and off-site. These include the dissemination of emergency preparedness information and training to all employees; environment, safety and health orientation to contractors and subcontractors prior to working in our plant sites; and annual drills for testing emergency response procedures with various scenarios. In addition, we have an SSO 014-Communication Protocol with NPC in our Sual Power Station.

We also have emergency communication channels that are designed to enable immediate coordination with internal staff, field crews, local government units, and key customers. These mechanisms include a private phone network, a private radio network, the public cellular networks and purpose built web-based tools.

In addition to working closely with the communities we serve, we also coordinate with regulatory authorities and comply with specific environmental safety laws and

For this reason, we put in place a Contractors Safety, Health and Environment (SHE) Policy which requires all our contractors and suppliers to undergo the standard SHE Orientation prior to the start of their work inside the plant. Some local contractors also benefit from the KAPATIRAN-WISE-TAV program where trainings for BOSH are provided by TeaM Energy for the designated Safety Officer of these companies.

All contractor and subcontractor employees working at TeaM Energy plants and facilities also receive the necessary health and safety information. The content and the extent of instructions and training depend on the working area and the working tasks of the contractor and subcontractor employees. Preventive health and safety measures cover essential dangers related to our facilities, plants and processes.

EU 19Stakeholder participation in the decision making process related to energy planning and infrastructure development

TeaM Energy maintains constant dialogue and consultation with all stakeholders with regard to energy planning and infrastructure development. In 2010, there were no significant plans on infrastructure development. As such, only internal studies were conducted.

EU 20 Approach to managing the impacts of displacement

Involuntary displacement associated with our business operations has been rare in our company history. There was no incident of displacement in 2010.

EU 21Contingency planning measures, disaster/emergency management plan and training programs, and recovery/restoration plans.

Key event risk and assumptions

On-site and Off-site emergency planning

On-site and Off-site communication

Subject to continuous assesment; Identified through Emergency Preparedness and Response procedures as well as Hazard Identification, Risk Assessment and Determining Controls (HIRADC) included in IMS. These plus vulnerability indices have all been input to the Emergency management Guidelines.

Covered by the Emergency Management Guidelines

Covered by the Emergency Management Guidelines; Also SSO 014-Communication Protocol with NPC (Sual)

Matter Approach

Matter Approach

Emergency plan testing covered by the Emergency Management Guidelines

Approval by external parties (e.g. public authorities or regulators);

1) DOLE inspection;2) The Sual and Pagbilao Power Stations’ respective Oil Spill Response Plans contain all information as well as steps and operational procedures required under Philippine Coast Guard (PCG) Memorandum Circular (MC) No. 01-2005. This Plan has to be approved by the Commandant of the PCG. As provided, under PCG MC No. 01-2005, the plan shall have duration of five years from date of approval and cease to be valid if significant alteration or revision was made without prior approval from the PCG.

Training and preparedness measures for employees, contractors, subcontractors

Trainings are conducted for employees. Emergency preparedness information are also disseminated to employees. For contractors and subcontractors, they undergo environment, safety and health orientation prior to conducting work at sites. Our system for Emergency Preparedness and Response under our Integrated Management Systems also provides planning for such emergency, including training provisions for concerned employees. Annual drills are conducted for the purpose of testing emergency response procedures with various scenarios.


In 2010, TeaM Energy began preparations for the electrification of 100% of the 3,400 households in five barangays in the Polilio Islands. The DOE thus approved the saturation of household electrification in the remaining barangays by 2012.

•HOUSEHOLDELECTRIFICATIONPROJECT(HEP) – Similar to HEART AND SOUL, HEP focuses on community empowerment through social preparation. TeaM Energy partnered with local electric cooperatives in an eight-year program from 2010 to 2017 to electrify households nationwide. As of 2010, a total of 2,650 households in 12 provinces have been connected to the grid.

•UndertheNational Residential Lighting Program of the Philippine Energy Efficiency Program (PEEP), the country aims to lower energy consumption through the use of efficient lighting systems. PEEP is implemented by the Department of Energy (DOE) funded by the Asian Development Bank (ADB). Among the private sector partners is TeaM Energy, which will help promote renewable energy systems throughout the country and organize communities to strengthen project ownership among households. We have committed to electrify three provinces in the Visayas and one in Palawan with 223 households.

EU 24Practices to address language, cultural, low literacy and disability related barriers to accessing and safely using electricity and customer support services

TeaM Energy’s operations cover electricity generation and energy trading. As the company does not directly deal with the end-users of its product (i.e., electricity), our programs are targeted for specific internal (contractors) and external (local communities where we operate) audiences.

One of these internal programs is a 30-minute Safety, Health and Environment orientation for contractors, which uses video materials translated in Filipino to create better understanding of the various hazards in the workplace. We also allow our contractors to use the local language they are most familiar with in preparing a Job Hazard Analysis. Various signages in the plant are also translated in Filipino and accompanied by descriptive graphic materials or photos.

For the local communities, the company has entered into contracts with local government units that have translations in Filipino. An example is the Compromise Agreement between TeaM Energy and the residents of Pagbilao in Quezon province for the use of water from the Locohin River.

•DENR-issuedEnvironmentalComplianceCertificate; •RepublicActNo.6969,whichrequiresustoimmediatelyreportincidentsof chemical or hazardous waste spills; regulations such as the following: •DOECircular98-02-003,whichmandatespowerplantstoreportalloilspills or environmental incidents to the Department of Energy; and •PhilippineCoastGuard(PCG)MemorandumCircularNo.01-2005,which requires our power plants to have an Oil Spill Response Plan that contains all information, as well as steps and operational procedures, on incidents involving oil spills.

The company has an Environmental Management Committee, which makes available all information related to emergency preparedness. Our Occupational Health & Safety and Environment Sections are responsible for disseminating information on procedures and keeping records.

EU 22Number of people physically or economically displaced and compensation, broken down by type of project

TeaM Energy did not undertake any project that led to displacement in 2010.

EU 23Programs, including those in partnership with government, or to improve or maintain access to electricity and customer support services

The Philippines has a policy that encourages private sector participation in rural electrification. Like the government, TeaM Energy strongly believes that the provision of electricity will yield more opportunities for improved quality of life, greater access to basic services and better infrastructure for rural development. This shared belief led to various public-private sector partnerships aimed at communities that are too remote to be economically connected to the grid, with an opportunity to receive reliable, adequate and affordable electricity to meet their social and economic needs.

To help meet the Department of Energy’s (DOE) target of providing electricity to 90% of all households by 2017, TeaM Energy has implemented these programs:

•HEARTANDSOUL(acronymforHouseholdElectrificationAssistance Through Renewable Technology and Social preparation for the Upliftment of Lives) – The program uses the best practices we learned from Project BEACON, which successfully electrified far-flung communities in Mindanao that helped catalyze development in the rural areas.

As its name connotes, HEART AND SOUL calls for full-hearted participation of all the parties concerned to make the program more sustainable. The program helps local communities in planning how to utilize electricity, managing their systems, and linking them with other institutions so they themselves can create social and economic opportunities to uplift their lives.

3,400Number of households in the Polilio Group of Islands electrified through TeaM Energy’s HEART AND SOUL in 2010

12 Number of provinces (covering 2,650 households) that have been connected to the grid in 2010 through the HOUSEHOLD ELECTRIFICATION PROJECT (HEP), an eight-year partnership between TeaM Energy and local electric cooperatives

32,000 individuals, 17 provinces nationwide benefitted from the HEART AND SOUL Project


Unit 1 Unit 2 Unit 1 Unit 2

Power Outage Frequency 1 3 4 4

No. of Days/Hours 1.16 / 27.90 18.84 / 452.28 5.10 / 122.47 7.43 / 178.22

Pagbilao Sual

PRODUCT RESPONSIBILITY

EU 25Number of injuries and fatalities to the public involving company assets, including legal judgments, settlements and pending legal cases of diseases

This indicator includes all known injuries and fatalities to the public involving TeaM Energy’s assets, as reported through our Incident Management System (IMS). Our efforts to minimize the risk of injury to the public include the implementation of safety programs and we are pleased to report that no such incidents occurred during the reporting period.

EU 26Percentage of population unserved in licensed distribution or service areas

We do not report on this issue since the disclosure is not applicable to the business. TeaM Energy does not have any licensed distribution areas and our customers are mainly institutions and not individual end-users.

EU 27Number of residential disconnections for non-payment, broken down by duration of disconnection and by regulatory regime

We do not have residential customers and thus, this indicator is not applicable.

EU 28Power outage frequency

GRI defines power outage frequency as the total number of customer interruptions divided by total number of customers served. The table above shows unplanned outages of TeaM Energy during the reporting period.

Under our ECA with NPC, we are allowed to have up to 31 days of unplanned power outages per unit per year in our Pagbilao Power Station and 25 days per unit per year in our Sual Power Station. If the days of actual outages fall below these limits, these days are added to the allowance the succeeding year.

Unit 1 Unit 2 Unit 1 Unit 2

27.90 150.76 30.62 44.55

Pagbilao Sual

EU 29Average power outage duration

The table above shows our average number of hours per unplanned outage during the reporting period. Please refer to EU28 for the actual number of hours.

EU 30Average plant availability factor by energy source and by regulatory regime

TeaM Energy recognizes the importance of making our power stations available when their capacity is required to ensure the necessary energy supply and to avoid fluctuations between energy supply and consumption, which might lead to power failure. Our availability factors during the reporting period remain above 80%.

84.74% 83.71%

Pagbilao Sual

122 TeaM Energy 2010 Sustainability Report TeaM Energy 2010 Sustainability Report 123122 TeaM Energy 2010 Sustainability Report TeaM Energy 2010 Sustainability Report 123

External Review Committee (ERC)

The External Review Committee (ERC) is tasked to assess the content of TeaM Energy’s 2010 Sustainability Report. The committee comprises of four sustainability management experts who were appointed in their individual capacity, not a representative of their organizations. As independent experts, they are encouraged to freely share their opinions and give their assurance statements on the report.The following are the members of the ERC:

Prof. Colin Hubo is an elected representative to the Stakeholder Council (SC) of the Global Reporting Initiative (GRI) in Amsterdam. As a two-term SC member (2007-09/2010-12), he is part of GRI’s formal governance structure, which formulated the GRI G3 reporting guidelines. Presently, he is the vice-chairman of the Center for Social Responsibility of the University of Asia and the Pacific. He is consultant/adviser on sustainability reporting of the following companies: Toronto Mining Ventures, Energy Development Corporation, TeaM Energy, Petron Corporation, Lopez Group Foundation, Inc., AES Masinloc Corp., and Chamber of Mines of the Philippines. Likewise, he was country lead consultant of the World Bank/IFC technical assistance in CSR for Mining, UK Embassy Alternative Financing technical assistance for LGUs, and currently co-team leader of the Agence Francaise de Developpement (French Development Agency) technical assistance in Green Financing for Urban Cities in the Philippines. Prof. Hubo obtained his undergraduate degrees from University of the Philippines, graduate studies from UP and UA&P, and fellowship in public policy from Duke University (USA).


As undersecretary at the National Economic Development Authority of the Philippines (1996-2003), he served as Coordinator of the Philippine Council for Sustainable Development and led a multistakeholder process in the formulation of Philippine Agenda 21.

Prof. Lotilla began his academic career in law at the University of the Philippines (UP) in 1985 and served as Director of the Institute of International Legal Studies of the UP Law Center and Vice-President for Public Affairs. He was appointed Professor of Law in 1995 and has published articles on various aspects of the law of the sea and marine-related issues.

Professor Jay A. Yacat is an Assistant Professor with the University of the Philippines Department of Psychology in Diliman where he teaches courses in Filipino psychology and research methods. He is currently finishing his PhD in Psychology from the same university. He is the President and Chairman of the Board of Directors of the National Association for Sikolohiyang Pilipino (NASPI). He is also a member of the Board of Directors of the Psychological Association of the Philippines where he is accredited as a certified Social Psychologist.

He is also has a number of consultancies with both local and international organizations, having served as technical consultant for program and project monitoring and evaluation, and project and process documentation.

Dr. Winston Conrad B. Padojinog, senior economist, is currently Dean of School of Management and Chairman of the operations committee of the School of Management of the University of Asia and the Pacific. He is also senior research fellow of the Center for Research and Communication Foundation, Inc. He is also a resident lecturer of economics and strategic management in the multicultural class of the University of Western Australia - Graduate School of Management. He forms part of the faculty in microeconomics of the Management Associates Program of the Development Bank of the Philippines.

Dr. Padojinog is currently a strategy consultant and mentor of medium- to large-scale companies of various industries like mining, hotel, real estate and construction, port logistics, franchising, financial and food services. He also serves as policy advisor to a number of industry associations and is frequently invited to speak in international and local forums to discuss issues on strategy, policy and industry prospects.

He has a Bachelors of Arts degree double majors in Economics and Management from the University of the Philippines - Visayas and Master’s Degree in Industrial Economics in the Center for Research and Communication. He is also as a scholar of the Hanns Siedel Stiftung Foundation of Germany. He also holds a Doctor of Business Administration degree at the De La Salle University’s Graduate School of Business and attended the international faculty program of the IESE Business School in Barcelona, Spain.

Professor Raphael P. M. Lotilla is the Regional Programme Director of the GEF/UNDP/UNOPS Partnerships for Environmental Management for the Seas of East Asia (PEMSEA) Regional Programme and the Executive Director of the PEMSEA Resource Facility. He is experienced in multidisciplinary, multiagency, and multistakeholder partnerships in a national and regional context. He served in the Philippine government as the Secretary (Minister) of Energy from 2005 to 2007, and served as president and CEO of the Power Sector Assets and Liabilities Management Corp. tasked with the privatization of public power generation assets.


Sustainability ReportTechnical Working Group Alvero, Marjorie Lalaine T.Astilla, Wanda Fe L.Bauto, Ellen G. Bellas, Joyce O.Bueza, Arnel D.Caasi, Hazel E.Calaunan, Jesusa C.Castro, Hannah Karenina S. De Castro, Roderick F.Delos Reyes, Maria Anna F.Factor, Rosalie F.Guanlao, Jocelyn R.Lavadia, Charlynne D.Lopez, Maria Teresa C. Malacca, Santiago S.Matibag, Jose R.Meneses, Melissa M.Osio, Ethel S.Taghoy, Jenny Rose P.Puno, Federico E.Ramos, Nicanor Jr. B.Romualdez, Froilan Gregory H.Roxas, Rodolfo N.Sabaupan, David C.Taghoy, Tristan A.Velasco, Juliet A.Virgino, John P. ConsultantsEditorial Services: Writers Edge, Inc. Creative Services : Ardent Communications, Inc. Photography: Jorem Catilo

To obtain a copy of the TeaM Energy 2010 Sustainability Report, contact The External Affairs TeamE: [email protected]: +632 552 8000Fax: +632 551 7089

All rights reserved. No part of this book may be reproduced in any form by any electronic or mechanical means (including photocopying, recording, or information storage and retrieval without permission in writing from the TeaM Energy Corporation.


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