GRUNDFOS AND THE ENVIRONMENT

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1 BEING RESPONSIBLE IS OUR FOUNDATION THINKING AHEAD MAKES IT POSSIBLE INNOVATION IS THE ESSENCE Do you want to know more? All requests and inquiries pertaining to Grund fos s Environmental, Health & Safety Management Systems should be made to the Environmental, Health & Safety Coordinator. This individual is responsible for recording all requests and answers. Additional copies of this pamphlet or fur ther information on Grundfos s Environmental, Health & Safety objectives, targets and policies can be obtained by sending a written request to: Grundfos Pumps Manufacturing Corporation Attn: Environmental, Health & Safety Coordinator 5900 E. Shields Avenue Fresno, CA Phone: Fax: Grundfos Pumps Manufacturing Corporation 5900 E. Shields Avenue Fresno, CA

2 3rd Edition January 2004 Purpose page 1 President s Message page 2 Health & Safety Policy page 3 Environmental page 4 Environmental, Health & Safety Management System page 5 Health & Safety Activities pages 5-7 Environmental Activities pages 8-10 Do You Want to Know More? back page PURPOSE Provide information to Grundfos employees, visitors, external contractors, services and other interested parties. The Grundfos Environmental Policy, the Health & Safety Policy, and the relevant rules of behavior apply to everyone who comes to the Grundfos facility. OHSAS Occupational Health & Safety ISO ENVIRONMENT 1

3 President s Message Grundfos Pumps Manufacturing Corporation (GMU) and the Grundfos Group worldwide are committed to taking concrete actions to lessen the impact of our operations on the environment and to provide a safe work environment. We have elected to become ISO and OHSAS certified in order to strengthen and publicize this commitment. Our environment activities will pertain to all aspects of our business, including product and packaging design, production and testing, and the products and packaging received from suppliers. We will also require contractors working on our premises to comply with all GMU safety and environmental requirements. Further, we will provide employees with education and information in order that they can actively contribute towards GMU s compliance with the standards and increase their environmental awareness in their personal lives. On an annual basis, GMU will review the progress it has made and will initiate new projects to further its environmental friendliness and our Safety First in accordance with the ISO and OHSAS standards. The Environmental Health and Safety Coordinator at GMU is responsible for providing day-to-day management of our ISO and OHSAS projects and for recommending to the GMU Management Staff Team projects to be undertaken in the future. Ultimately, the President of GMU has responsibility for our compliance to the standards and our continued certification. William J. May, President Grundfos Pumps Manufacturing Corporation 2

4 Health & Safety Policy It is our priority to have a safe and healthful workplace. To support this priority, we have implemented OHSAS and an Injury and Illness Prevention Program. The intent of these efforts is to enable Grundfos Pumps Manufacturing Corporation (Grundfos) to identify potential health & safety hazards, assess the risks of these hazards and, where appropriate, implement necessary controls to minimize or eliminate the hazards. Where possible, these efforts will be pro-active in nature. As a minimum, members of management will do everything necessary to ensure a safe and healthful work environment and that it complies with federal, state, and local health & safety regulations. Where there are no existing regulations pertaining to a potential hazard, Grundfos will follow industry standards, best practices or corporate directives in our efforts to control hazards and improve workplace health and safety. All employees are expected to report unsafe cond itions to their supervisor, lead or other member of management. Grundfos has implemented several programs to empower its employees to correct unsafe conditions at all levels of our organization. Employees are expected to comply with company safety rules, follow established safe work practices and exercise care in all their work activities. Grundfos will utilize its resources to continually evolve our safety process and culture in order to eliminate unsafe cond itions and hazardous processes. Working together, we can succeed in having a safe, healthful and profitable workplace from which we all will benefit. Authority and responsibility for carrying out this policy begins with the office of the President of the Company, William J. May. Authority is delegated to Managers, Supervisors and the Environmental, Health & Safety Coordinator to ensure this policy is properly implemented and reviewed periodically to ensure its continued relevance and priority to the organization. 3

5 Environmental Policy Grundfos Pumps Manufacturing Corporation (GMU) will openly, actively, and factually take part in environmental improvements. GMU must show a high degree of consciousness with regard to both the internal and external environment. The annual environmental report will give an account of issues and objectives. As a minimum GMU will live up to the requirements of the local environmental legislation. The efforts within this field must primarily be preventative. Within financially justifiable limits, the environmental impact and the consumption of resources must be limited in GMU through development of new products and processes. The environmental impact throughout the life of the product must be identified when designing product modifications. Where possible, the products must be designed in such a way that they can be re-used or recycled. GMU must ensure that product and packaging can be disposed of in an environmentally safe way when designing and implementing product mod ifications. Where it is financially and technically possible, cleaner technology must be applied. GMU must strive for the most appropriate production methods, taking both environment and profitability into consideration. Buildings, installations and technical equipment will be maintained at a high and safe standard, and environmentally sound materials must be used. After their useful life, GMU will ensure that the facilities are returned to an environmentally sound condition. Through education and information GMU will motivate employees, suppliers, customers, and other interest groups to environmental awareness. All purchases must be carried out in proper consideration of environmental consequences. It will be ensured that contractors working in the facility of GMU will meet the environmental requirements. 4

6 Environmental, Health & Safety Management System Grundfos Pumps Manufacturing Corporation (Grundfos) has obtained certifications to ISO environmental management system standard and the OHSAS occupational health and safety assessment system for its operations in Fresno, California and Allentown, Pennsylvania. Both of these management systems require the identification of EHS impacts and the identification of objectives and targets for continuous improvement. In an effort to improve our EHS efforts and activities, Grundfos has developed this informational pamphlet to communicate its environmental, health and safety (EHS) efforts and activities to employees, contractors and other interested parties. Health & Safety Activities Safety is the first priority at Grundfos. A safe and healthful workplace promotes employee satisfaction and a better quality of life. Grundfos is moving its safety efforts from the compliance-driven focus (reactive) to a behavioral-based safety effort (pro-active). To achieve this, Grundfos hired a full-time Environmental, Health & Safety Coordinator to lead these efforts. To ensure a sound health and safety system, Grundfos obtained certification to the OHSAS in The Safety process at Grundfos involves (1) employee-driven safety teams in each production facility to conduct safety reviews of the various work areas and identify safety hazards for corrective action, (2) employees trained in the behavior-based safety process, and (3) an employee team trained to provide emergency medical assistance and first aid. Grundfos encourages early reporting of any potential injuries, illnesses, and muscle strains or sprains before they become too severe and require medical treatment. This enables Grundfos to conduct an evaluation into the potential causes and to temporarily reassign the employee to a job that will not aggravate the injury GMU Annual Recordable Injuries

7 Health & Safety (continued) Grundfos s in-house 911 emergency response team responds to medical emergencies. All team members are equipped with pagers for notification when the response system is activated and can respond anywhere in the factory within 2 minutes. The team conducts routine training drills to maintain their high level of effectiveness. The addition of an Automated Electronic Defibrillator (AED) unit has enabled the team to effectively respond to cardiac emergencies. B S.A.F.E. The Behavior-based Safe Acts For Everyone (B>S.A.F.E.) process is the proactive efforts of employees to recognize safe behaviors and identify at-risk behaviors before they result in an injury by conducting observations and providing positive consequences and feedback. By reviewing previous accident data, Grundfos was able to identify observable behaviors that were involved in or contributed to workplace injuries. These behaviors are defined as to what a safe behavior would look like. The observation process is the key to the success of the process. Employees are then given feedback and positive consequences for their safe behaviors and insight to the causes of at-risk behaviors. Employees names are omitted since we are looking for what, where and why atrisk behaviors are happening, not who is doing them. Since beginning these efforts in May, 2001, Grundfos has conducted over 900 observations and increased our overall percent safe behaviors by 7% facility-wide. Observers have given over 5,700 positive feedback on safe behaviors and collected important information to identify and remove the barriers to safe behaviors for over 800 at-risk behaviors. Grundfos currently has 34 employees trained as observers participating in this important safety process. OHSAS The Occupational Health and Safety Assessment Series (OHSAS) specification provides requirements for an occupational health and safety (OH&S) management system, to enable Grundfos to control 6

8 OHSAS (continued) our OH&S risks and improve our overall safety performance. Grundfos obtained certification to the OHSAS specifications for our Fresno and Allentown facilities in the later part of OHSAS requires the presence of formal health and safety management systems. It incorporates a structured approach to hazard identification and risk management. This systematic approach will result in reduced accident risk, fewer occupational health problems and ultimately reduced medical and worker compensation costs. The awarding of OHSAS certification resulted from a final weeklong certification audit carried out by the National Standards Institute of Ireland (NSAI). Contractors Both the ISO Standard and the OHSAS specifications require Grundfos to interact and communicate relevant procedures and requirements with our suppliers and contractors. The management systems Grundfos has implemented consider the hazards and risks arising from the activities of our contractors, visitors, and the use of products or services supplied to Grundfos. Contractors and suppliers are required to submit written certifications to Grundfos that: they agree to comply with all Federal, State and local environmental health and safety codes as well the Grundfos General Safety Rules while on the Grundfos premises. they provide any additional information required by Grundfos to assist in the identification of any potential health and safety hazards, the assessment of the risks and the implementation of any necessary control measures. contractors, performing work onsite, will comply with the Grundfos environmental policies. This compliance will be a pre-requisite to any work being done on site. 7

9 Environmental Activities Electricity Usage Reduction In late 1999, Grundfos identified that the amount of energy used at our Fresno facility was an opportunity for improvement since Grundfos was using over 7 million KWH of electricity annually at a cost of over $500,000 to the business. The management team set a target of a 10% reduction in the total amount of energy used over a three-year period at an average of 3.3% per year. In 2001, with shortages looming and costs rising, reduction in electrical usage became even more critical. This resulted in a re-evaluation of the energy reduction objective and resulted in a new target of a 20% reduction of the energy used in The internal employee energy teams implemented a replacement of all high bay lighting with energy efficient T5 lights in both factories. The projected annual energy savings from this project, the control of task lighting and the repair of air leaks is projected to be around 650,000 Kilowatts per year. The results from these Team efforts has resulted in a 28% reduction in the amount of energy used while maintaining production levels and increasing employee awareness. For these efforts, one of the energy teams won top honors from the California Council of Excellence for their efforts and Grundfos was awarded the 2002 Flex Your Power Energy Conservation Award from the State of California. Grundfos remains committed to usage reductions. Solid Waste Disposal Reduction To conserve landfill space, the reduction and reuse of spent materials is also an objective that Grundfos has aggressively pursued. The initial focus in achieving this reduction target was the evaluation of waste streams and the identification of recycling opportunities. Grundfos currently recycles or reuses the following materials: Wood Cardboard Green Waste Styrofoam Peanuts (reused) Office Paper (white, colored and blue bar) Batteries Aluminum Cans Plastic Bottles Copier Toner Shrink Wrap Metal Scrap & Shavings 8

10 Solid Waste Disposal Reduction (continued) Through 2001, Grundfos has reduced the amount of waste that was sent to a landfill by over 106 tons or 62% of the waste produced compared to The recent addition of plastic shrink wrap has enabled Grundfos to eliminate additional 20,000 pounds of solid waste from the landfill in Grundfos is expanding its recycling efforts to increase the type and quantity of materials it recycles and reuses. Chemical Usage Reduction Recognizing that chemicals can be a factor in pollution and a health and safety concern, Grundfos focused efforts on reducing the number of chemicals it uses at its Fresno facility, specifically those associated with production or are extremely hazardous. The focus of an employee team (C.E.R.T.S. Chemical Reduction Through Standardization) was to reduce the overall number of chemicals used by standardizing the chemicals used in the various product segments. Through these efforts, Grundfos was able to eliminate over 210 different chemicals from its current inventory. The introduction of new chemicals into the workplace is controlled through a chemical request and evaluation process to ensure that all new chemicals are evaluated for their hazards and potential environmental impacts. Extremely hazardous substances are not permitted into the facility. Chemical Waste Reduction The generation of hazardous waste was an early objective that Grundfos would focus on. The original goal was to reduce the amount of hazardous waste sent for disposal by 70% over a three-year period. This was accomplished by finding alternative disposal options for the waste generated. In doing so, Grundfos was able to reduce the amount of hazardous waste from 19 tons per year to less than 2 tons per year. Typical wastes that are recycled or reused as a secondary fuel source include: Used absorbent/ Metal grindings Alkaline batteries filter material Cathode ray tubes Fluorescent tubes Waste oil & coolants (computer monitors, etc.) Wastes that are treated for disposal include: Phosphoric acid Waste paint and debris (alcohol-based) 9

11 Water Usage Reduction Water is one our most precious resources in the San Joaquin Valley (located in central California). The reduction in the amount of water used at Grundfos is a new objective initiated in The Grundfos Fresno facility consumed approximately 12 million gallons of water in The target is to reduce that usage by 10% annually over the next 3 years. The maintenance of the landscaping and facility grounds is a primary user of water. By adjusting the watering schedule and initiating a proactive sprinkler maintenance program, Grundfos was able to reduce its water consumption by over 1,000,000 gallons in Future efforts are focusing on internal water usage sources in the production process, such as cooling towers, washers and testing tanks. Grundfos has implemented several changes to our process equipment to minimize water usage at our Allentown, Pennsylvania facility. Storm Water Protection Since 1999, Grundfos has worked with the Fresno Metropolitan Flood Control District in their Partners for Clean Storm Water to eliminate or reduce storm water pollution from our facility and by practicing recognized pollution prevention activities, such as: Employee education Spill containment structures Spill response procedures Good housekeeping practices Preventive maintenance Visual inspections Grundfos also practices these pollution prevention activities at our Allentown, Pennsylvania facility. Natural Gas Reduction The use of natural gas has steadily increased since The cost per unit of natural gas (Therm) has also increased over the past several years. The primary source for the consumption of natural gas is in the heating of the factory and offices during the winter months. Grundfos is focusing efforts to reduce the overall consumption during this time period. An internal employee process improvement team will be formed to assist in this reduction effort. At the Fresno facility, a lesser amount of natural gas is used in the production factory for the heating of a curing oven as part of the ECoat paint process. Additional natural gas is used to run the hot water heaters for the kitchens, showers and restrooms. 10