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2013 Sustainability Report

 

Environmental management

The ALL + Sustainable program drives improvements in waste and effluent management.

Impact reduction

Using tools developed in-house based on specific characteristics of the sector, ALL seeks to monitor, prevent and reduce the main impacts provoked by the operation. Environmental management involves intense coverage of questions such as atmospheric emissions, waste, effluents and risks to biodiversity, but also includes general impact control programs, environmental education and engagement initiatives.

Railway operations generate proportionately fewer atmospheric emissions than the transportation of the same freight volume by road. Transporting a cargo of 2,310 metric tons, for example, requires a train with 30 railcars, whereas 68 double trailer trucks would be necessary to transport the same cargo by road. Even so, emissions represent the sector's most significant impact, and ALL is focused on reducing them.

The company's main emissions are particulate material and greenhouses gases (GHG), such as CO, SO and NOx, which are measured annually in the company's GHG inventory. The 2013 inventory shows that direct emissions (scope 1) represented more than 95% of ALL's total emissions, most worthy of note being caused by the consumption of diesel fuel. Scope 1 emissions reached 1,074,500 tCO2e, a slight increase over the previous year (1,070,200 tCO2e). This rise was due to the beginning of operations on 142 kilometers of the line between the municipalities of Itiquira and Rondonópolis in Mato Grosso, and to increased train traffic on the duplicated stretches of the Paulista Network.

One of the measures adopted to reduce emissions is the periodic renewal of the fleet. Currently, 10.5% of the company's locomotives have been in use for less than five years. In addition to the environmental gains, with the reduction in emissions and the increase in energy efficiency, the measure has had a positive effect on productivity.

In 2013, the company consolidated its ALL + Sustainable program, which sets forth management guidelines on two other significant environmental impacts in the sector: effluents and waste. The company is concerned about integrating sustainability into its projects from the very beginning. For example, in the construction of the Rondonópolis Intermodal Complex inaugurated in 2013, R$ 25 million was invested in sustainability-related measures.

Among the measures implemented in parallel with the execution of the works – which included a 260 km extension in the rail network and the construction of a new terminal – were programs to monitor flora, fauna, water quality and sediments, to control erosion and silting caused by the implantation of the platform and the access routes, as well as revegetation of the railway right of way and compensatory planting, among others.

Since the railways cut forest fragments, permanent preservation and conservation areas in diverse Brazilian biomes, the company takes specific measures to control risks to biodiversity. Invasive vegetation is monitored and controlled on all the networks, using herbicides authorized by Ibama and manual cutting in protected areas. This initiative is aimed at preventing the installation of exotic species caused by the grain which leaks from trains

The company also works on reclaiming waterside vegetation affected by its operations. The Rondonópolis project took measures to protect the fauna in the forestry areas cut by the railway, with the installation of wildlife crossings.

Other environmental questions specific to the rail sector which ALL addresses are the identification, control and correction of liabilities, erosion processes and critical drainage points; the reconstitution of vegetation; and reducing leakages in bulk freight.

ALL follows Ibama guidelines to measure risks to and monitor impacts on flora and fauna and control noise generation and atmospheric emissions. It reports to this federal environmental authority on its compliance with the conditions agreed for each operation on an annual basis.

Another tool ALL has used to reduce its environmental impact is its Environmental Management Manual used as a guide for employees and supported by monthly training sessions. In 2013, the company maintained its internal audit program, developed to monitor its main environmental indicators and drive employee compliance with these guidelines. Compliance is monitored on a monthly basis and is reinforced every quarter, when ALL senior management conducts the "production circuit", designed to present each unit with its results and compare them with other units.

Planting seedlings

As the rail operation expands, ALL invests continually in the environmental reclamation of areas modified by the arrival of the railway. In 2013 alone, the company planted a total of more than 215 thousand native tree saplings, 96,000 of which on the Northern and Western networks, and 119,000 as compensation for the duplication works on the Paulista network.

Between October 2013 and February 2014, more than 65,000 Cerrado native tree seedlings were planted on the stretch of railway between the municipalities of Alto Araguaia and Rondonópolis, in the permanent preservation areas and in other areas along the line.

In addition to reclaiming the areas crossed by the railway, trees are planted in vegetation curtains and around rail terminals to compensate for the rail operation's carbon emissions.

Environmental compliance

The company makes every effort to comply with and, whenever possible, do more than is required by the more than 1,500 environmental laws, decrees and rulings at federal and state level, as well as the environmental licensing requirements to which it is subject, seeking to adapt a very old rail network to an ever increasing number of market requirements.

The adoption of a legal compliance management software has proved useful in helping the company to adapt more rapidly and to anticipate new legal requirements.

In 2013, ALL consolidated a new level in its relations with Ibama. In conjunction with other companies in the sector, ALL has been contributing to the enhancement of the authority's environmental procedures. The main results of this partnership include the creation of standardized terms of reference (documents that define the guidelines for obtaining an environmental license) and improvements in rulings related to standards.

In spite of its efforts to abide by laws and regulations, in 2013 ALL received 32 notifications (14 for accidents and 18 related to operational incidents), resulting in environmental fines totaling R$ 61,192,448.23 (of which R$ 11.4 million was paid in 2013). The company also received 128 non-monetary sanctions, mostly related to non-compliance with operational procedures.

The company is still awaiting the judgment of three lawsuits related to notifications from Ibama (Instituto Brasileiro do Meio Ambiente e dos Recursos Naturais Renováveis) and Imasul (Instituto de Meio Ambiente do Mato Grosso do Sul). Two of these are related to accidents, one in São Vicente (São Paulo) in January 2013, and the other in Inocência (Mato Grosso do Sul) in April, totaling R$ 54.5 million. The third is related to a report about contaminated diesel oil in the operation in Catanduva (São Paulo), with a fine estimated at R$ 2.5 million.

R$ 12.4 million

the amount invested by ALL in environmental projects. Of this amount R$ 8.3 million (67%) went to environmental management and preventive measures.

Suppliers

The company has been implementing diverse initiatives to involve its supply chain in its impact reduction efforts. In 2013, it launched Geverd, a publication aimed at fomenting sustainability and best labor practices among ALL sleeper providers. The document presents guidelines on questions such as management, human resources, documentation, safety, health and the environment to assist in the development of partner companies. It is part of a tracking program which comprises a diagnostic assessment at the beginning of the process and three appraisals conducted during the course of the year.

The comparison of the results of the initial diagnosis with the audit carried out at the end of the first year showed improvements: the average score of the companies evaluated rose from 178 to 720 points, on a scale up to a thousand. Among the guidelines set forth in the material is the creation of routines to ensure and check on compliance with labor and environmental legislation, monitoring items such as the origin of the timber used to make sleepers and the non-use of child labor.

Similar to the Excellence Guide, a set of guidelines on ALL requirements for providers of other materials, Geverd is reviewed annually to incorporate any changes in legislation. During the course of the year, suppliers insert the documents which demonstrate the fulfillment of their labor obligations in the Document BankDoc. At the end of the year, those having the full documentation in the system are eligible for a prize. In 2013, Geverd focused mainly on social questions, and the winning supplier received a course on human resources management as a prize.

In 2014, in partnership with the consultancy DNV--GL (Det Norske Veritas), ALL initiated a diagnosis of its supplier chain with a view to further enhancing supplier management. Focused initially on sleeper providers, this diagnosis will be extended to other company suppliers.