2006 Robert W. Campbell Award Recipient
Category I

Excerpts from Case Study

Founded in 1902, Alcan is one of the globe’s leading suppliers of bauxite, alumina and aluminum, and a top-ranked provider of engineered and packaging materials. Each of Alcan’s four business groups holds predominant market positions in the Americas, Europe and Asia. With some 65,000 employees and its head office in Canada, Alcan is a public company with 2005 revenues of US$20.3 billion.

Maximizing Value is Alcan’s governing objective. AIMS, the Alcan Integrated Management System, is an enabler of value maximization. AIMS is composed of four pillars: Value-Based Management (VBM), EHS FIRST (Alcan’s Environment, Health and Management System), Continuous Improvement (CI) and Our People Advantage.

AIMS is a key competitive differentiator as well as a powerful driver of integration. Recent acquisitions have provided Alcan with the opportunity to increase its EHS knowledge and integrate best practices from external sources. EHS FIRST rallies Alcan employees everywhere around common EHS objectives and goals, and paves the way for world-class EHS performance by applying the same high standards across the board.

LEADERSHIP

Management’s commitment and leadership drive efforts to achieve the Company’s EHS vision: “to be a recognized leader of environment, health and safety excellence in everything we do and everywhere we operate.” Alcan’s corporate values and newly updated EHS FIRST Policy support this vision and anchor the Company’s EHS FIRST system.

Alcan’s senior management team are visible and active EHS leaders and champions at work and in the community. They demonstrate a drive to continually improve EHS performance and allocate sufficient resources to train employees in EHS FIRST. Between 2003 and 2005, 13,000 Alcan employees participated in the EHS FIRST Leadership Competency Program.

EHS FIRST: ALCAN’S EHS MANAGEMENT SYSTEM

EHS FIRST is more than a system - it represents an attitude, a mindset and an acceptance of responsibility and accountability to achieve world-class EHS performance at every Alcan facility. World-class performance means attaining zero EHS-related incidents/injuries by promoting and protecting the environment and the health and safety of employees and communities where Alcan operates. It also includes contributing to a better world by playing a leadership role in diverse EHS-and sustainability-related organizations.

EHS FIRST integrates best practices from Alcan and third parties, as well as ISO 14001 and OHSAS 18001 specifications, and spells out the Company’s key EHS requirements, roles and responsibilities. Whenever possible, employees are expected to go beyond compliance with these minimum standards.

The four cornerstones of Alcan’s EHS FIRST system are: 1) management commitment and leadership, 2) line ownership and meaningful employee involvement, 3) an aware, trained and committed workforce, and 4) effective two-way communication (including knowledge growth and best-practice sharing).

New facilities must be fully compliant with EHS FIRST within two years of their acquisition or start-up. The EHS FIRST manual outlines the key requirements or directives to be implemented at each site. Regular monitoring, measuring and auditing of EHS performance using both leading and lagging indicators are key drivers of success along Alcan’s journey of continual EHS improvement.

THE EHS FIRST IT SUITE

EHS FIRST incorporates a constantly evolving suite of IT tools for measuring, analyzing and sharing information on EHS performance. These tools allow information to be shared both vertically and horizontally, permitting sites to compare their performance with peers. The suite serves as the auditable data source for many of the EHS FIRST reports. It enables Alcan to readily analyze trends, develop programs to reduce risk, identify key performance indicators and share best practices.

EHS RESULTS: CONTINUOUS IMPROVEMENT

Alcan continues to reduce its major EHS risks and improve its performance on key EHS metrics. For a total direct implementation investment of US$36 million, the EHS FIRST system has, to date, delivered a minimum of US$43 million in benefits, predominantly from safety. The estimated value at stake for environmental and health issues is more than US$1 billion.

Between 2001 and 2005, Alcan reduced its greenhouse gas emissions by 3.5 million tonnes, perfluorocarbon emissions by 21%, polycyclic aromatic hydrocarbons by 40%, energy used for smelting by 6%, Recordable Case Rate by 70% and Lost-Time Injury/Illness Rate by 68%, as well as achieved 100% ISO 14001/OHSAS 18001 certification of its facilities. Alcan’s advanced AP (Aluminium Pechiney) technology is the industry’s benchmark in several areas including energy efficiency.

In 2005, 11 new directives were added to EHS FIRST to address business group-specific risks. Alcan has experienced a steady decline in fatalities since the introduction of EHS FIRST. In 2005, the Company had zero Alcan Injury and Illness Record-keeping System (AIRS) fatalities. Fatalities now trigger company-wide call to actions, including one for mobile equipment/pedestrian safety, working at height and contractor management.

LINKAGE BETWEEN EHS AND BUSINESS PERFORMANCE

Alcan knows that it cannot generate maximum sustainable value without being a world-class EHS performer. EHS FIRST is embedded in Alcan’s business processes and culture, and is a fundamental component of all strategic planning and decision-making. The synergy and integration between the pillars of AIMS enable Alcan’s business management system to generate maximum long-term value.

The Company’s goal is not simply to achieve zero, but rather to create sustainable EHS value wherever it operates. EHS FIRST has improved productivity by reducing employee absenteeism, streamlining processes and enhancing systems.

CONCLUSION

The business case for EHS FIRST is both compelling and sound. EHS FIRST delivers tangible value through reduced accidents, occupational illnesses, environmental incidents, liabilities and insurance premiums. It also lowers overall costs through its focus on excellence and continual improvement, as well as on problemsolving, quality and stakeholder engagement.

Alcan is currently finalizing a strategic plan for the next five years of its EHS FIRST journey. This strategic plan will raise the bar, once again, building on lessons learned in the past to deliver world-class EHS perfor-mance in the future.

EHS FIRST has proven to be a powerful competitive differentiator and a driver of leadership, integration, engagement and consensus at Alcan sites worldwide. Simply put, EHS FIRST is making Alcan a better employer, investment, neighbour and corporate citizen worldwide.