TeaM Energy 2010 Sustainability Report by Writers Edge, Inc.

TABLE OF CONTENTS Foreword from the CEO 2 From Coal to Power 6

A day in the life of a coal fired power plant

Where coal ends up 12 Nothing goes to waste 18 From Power to Light 20 ECONOMIC

A neighbor they can depend on

Multiplying the fruits of hardwork

ENVIROMENTAL One with nature 30 Saving a natural wonder 34

From ridge to reef

Where the wild birds are 44 About the Report FROM BLACK TO LIGHT, TeaM Energy’s 2010 Sustainability Report, captures the company’s strategy in addressing the fundamental challenge of sustainability and presents detailed discussion of its economic, social and environmental performance. The report also communicates visually how TeaM Energy goes beyond its business of converting coal into electricity; and by energizing communities and engaging various stakeholders, the company is able to magnify its contributions to the nation and ensure the sustainability of its business.

SOCIAL

Hope for the fisherman’s daughter

It takes a village 52 Passing the torch 58 Molding tomorrow’s leaders 64 Sustainability Report Technical Working Group 68

Foreword from the CEO

From lighting to leading At TeaM Energy, we have always aspired to be known as much for our commitment to sustainable development as we are for the reliability of our energy operations. This is the second year we are reporting on the progress of our responsible business practices based on the Global Reporting Initiative (GRI) guidelines, the most widely used standardworldwide in reporting an organizationâ&#x20AC;&#x2122;s economic, environmental, social and governance performance. Our corporate sustainability framework emanates from our vision and mission. Our principle of corporate sustainability is the three Pâ&#x20AC;&#x2122;s (people, planet, profit) plus, the employees of TeaM Energy whom we are taking up as separate because they are the heart and soul of the company. In TeaM Energy, we have what we call our sustainability spheres, our sustainability solar system. At the centre is our desire to be a sustainable company, a friendly neighbour in terms of impact of our business to the environment and society as a whole. Immediately surrounding this is our mission which will build our capacity to make our corporate sustainability structure stable. The outer spheres represent our vision which encompasses everything and is what we foresee in terms of how TeaM Energy will finally impact people, planet, and profit.

TeaM Energy 2010 Sustainability Report

The outlying spheres represent our core values that we adhere to in trying to achieve our goal of corporate social responsibility. So, finally after we had drawn up our corporate sustainability framework and integrated corporate social responsibility into our business systems, we felt it was time to meet global standards and reporting requirements.

We believe the key to meeting these challenges lies in increased and improved engagement with our stakeholders. As a responsible corporate citizen, TeaM Energy sees the need to work together with our stakeholders to ensure that our business generates social and economic benefits for society. We also believe that to minimize our environmental impact, we have to be vigilant by continuously reviewing our business operations systems and practices, striving every time in making our overall impact the most minimal possible, and practicing the highest global standards in environmental management systems. We are particularly grateful for our employees, our companyâ&#x20AC;&#x2122;s No. 1 resource. We are proud of how they strive for excellence in execution and work to deliver results in a safe, efficient and responsible manner. We continue to create a culture that emphasizes personal accountability and leadership â&#x20AC;&#x201D; an approach that is helping us balance the environmental and social challenges that we face. Our community partners are equally important, not only because they are located within the areas we operate or are relevant to the continuous operations for our business, but they also provide valuable assistance as volunteers and as a source of manpower for our power plants. Improving their living standards is also to our best interest as we can tap productive individuals right at our doorstep as partners in catalyzing growth and development.

In 2009 when we published our first Sustainability Report, we joined a small but growing number of companies in the Philippines assessing their triple bottom line performance and sharing the results. In so doing, we declared our accountability to a broad range of stakeholders â&#x20AC;&#x201D; our employees, customers, shareholders, suppliers and contractors, lenders or creditors, regulators and the communities where we operate. In 2010, TeaM Energy has made a number of important milestones. We marked the second year of a five-year plan that is based on our vision of Sustainable Profits, Operations Efficiency, Significant Social Contribution, Inspired TeaM (SOSI). As we remain dedicated to achieve our SOSI goals, we continue to face bigger challenges in balancing development with the need to live up to our social and environmental responsibilities.

TeaM Energy 2010 Sustainability Report

As much as we are committed to improved collaboration, we also intend to keep leading by example. Attaining an application level of A+ from the GRI for this report is one way we are able to demonstrate our firm commitment to lead in the Asia-Pacific region, not just as an independent power producer, but also in corporate sustainability. Our Sustainability Report is a thorough and candid account of our performance and the challenges we continue to face going forward. TeaM Energy views this report as more than just a corporate document; our hope is that it can also stimulate constructive discussion on the challenges and choices associated with energy development. In that spirit, may I invite you to read the report and discuss with us how we can perform even better and to help us realize our vision for a more sustainable tomorrow.

Federico E. Puno President & CEO TeaM Energy Corporation

TeaM Energy 2010 Sustainability Report

From Coal to Power

TeaM Energy 2010 Sustainability Report

A day in the life of a coal fired power plant Folks from the Sual town in Pangasinan and from the Pagbilao town in Quezon can always tell when the power plants are churning out power at net capacity. Living around a power plant, they have gotten used to its imposing structure, particularly its towering chimney that is magnificently lit at night. Yet apart from locals, not too many people know about how the plant turns coal into electricity. How we produce electricity People live, work and become productive with the use of electricity. We cool our homes, cook food, connect to the world, communicate, and dispel darkness with the flick of a switch. All these modern-day conveniences are made possible by tiny particles called â&#x20AC;&#x153;electronsâ&#x20AC;? that move about through wires. Their movement is what essentially creates electricity. There are a number of ways to make electrons move. The most common way is by using steam to turn a turbine coupled to a generator. The energy in the fuel (coal) is converted into heat energy, which is then absorbed by water to produce steam.

TeaM Energy 2010 Sustainability Report

At the TeaM Energy power plants in Sual, Pangasinan and Pagbilao, Quezon, coal is used to heat the water and turn it into steam. The steam moves at high pressure inside the pipes to a turbine. High pressure causes the blades inside the turbine to spin rapidly. This rotary motion, in turn, makes the generator spin. Using electromagnetism, the generator causes electrons to move back and forth through the wire at constant cycles. Billions of electrons flow through the wire, much like water through a pipe. Electricity produced is sent out on transmission lines to substations. From these substations, the electricity is sent to homes, offices and factories. The power plants of TeaM Energy are only among several facilities that produce electricity. The Sual Power Plant is the largest in the Philippines that uses coal to generate power. The Pagbilao Power Plant is located in the coastal town of Pagbilao in Quezon Province and also uses coal. Combined, both power plants generate a total of nearly 2,000 megawatts of electricity, supplying approximately 20 percent of the generating capacity in the Luzon grid. This is enough to power 10 million computers or 20 million households with a 100-watt light bulb each.

TeaM Energy 2010 Sustainability Report

Nothing goes to waste Where TeaM Energy’s excess power goes The electricity from Team Energy’s power plants goes mostly to one customer: the National Power Corporation (NPC). However, the stateowned company does not usually take up all the electricity when demand for power in the Luzon grid is lower than the amount generated. So what happens to this “excess capacity”? TeaM Energy set up a wholly owned subsidiary called TeaM (Philippines) Energy Corporation (TPEC) in 1992. Its purpose was primarily to sell the excess electricity from its power plants to other customers and provide other services in connection with the supply or delivery of electricity. This way, not a single wattage of electricity that it generates will go to waste. The first opportunity came in 1999 when the Department of Energy (DoE) asked TPEC to assist in the development of the polyethylene industry in the country by supplying to the Bataan Polyethylene Corporation (BPC), which required a reliable source of power for its operations. In exchange for the business, TPEC was required to invest in the facilities and infrastructure needed to guarantee the quality of power provided to BPC. This not only created a new business model in the Philippine power industry, but also gave birth to TeaM Energy’s Energy Supply Business (ESB). New doors opened The success of the BPC project emboldened TeaM Energy to cater to large commercial or industrial consumers, other power generators, and distribution utilities.

TeaM Energy 2010 Sustainability Report

When Republic Act 9136, otherwise known as the Electric Power Industry Reform Act (EPIRA) of 2001 was enacted, it allowed for greater competition and efficiency in the electricity industry by making electricity tradable like a commodity. By so doing, supply and demand forces in the spot market will dictate electricity rates and should lead to the improved delivery of power supply to end-users. ESB also trades some of the excess capacity in the Wholesale Electricity Spot Market (WESM), aside from buying and selling to other clients. Open access also presents TeaM Energy’s ESB another opportunity: it will be able to sell power directly to consumers with a demand of at least one megawatt even if they are located within established franchise areas (called the “contestable market”). Future expansion Having two of the largest coal-fired power plants in the country provides economies of scale and allows the ESB to sell its power at competitive prices than other providers. With the continued rise in fuel prices worldwide, TPEC has also begun to procure its own coal through a combination of spot and long-term contracts. This will ensure a more stable fuel price and allow the TPEC to keep its price advantage. The changing landscape in the Philippine electric power industry also creates other opportunities for TPEC to establish its core competencies in retail electricity marketing, power economics, technical expertise, tariff modeling, business development, as well as a wide understanding of the ever-changing developments in the regulatory landscape. With these value-added services, TeaM Energy’s clients not only enjoy the benefits of having a reliable source of electricity, but also power within reach.

TeaM Energy 2010 Sustainability Report

From Power to Light From the electricity we generate in our power plants, we touch lives by energizing communities and empowering our various stakeholders.

TeaM Energy 2010 Sustainability Report

Economic Engagement

A neighbor they can depend on In 1999, a major blackout hit Metro Manila and large areas of Luzon when jellyfish – some 50 truckloads – accidentally clogged the cooling system of the Sual power plant, shutting it down. Power returned after several hours, but it took workers four days to remove all the jellyfish from the station. The situation required massive manpower and quick response time. “We were the first on the scene. The faster that we can remove the jellyfish, the faster they can start up the power plant,” said Federation of Sual MultiPurpose Cooperatives (also known as Sual Fed) Chairman Ernesto Gacad. Since that time, there has been a cooperative servicing the maintenance of installed jellyfish nets and the monitoring of jellyfish in the area. Steady partnership Sual Fed has nearly 3,000 members from its 11 primary membercooperatives in Sual’s 19 barangays. Federation members benefit from having a good working relationship with TeaM Energy in terms of job generation and alternative livelihood programs. In return, Sual Fed provides a steady stream of manpower, tools and equipment to Sual Power Plant.

TeaM Energy 2010 Sustainability Report

Rico Merene, Safety Officer of Power Zaver Techno Services Corporation, creditsTeaMEnergy’sstringentjobhiring process for enabling local workers to qualify for jobs abroad.

But more than local employment, Rico Merene, Safety Officer of Power Zaver Techno Services Corporation, said the stringent job application process and employment requirements at TeaM Energy and its accredited contractors has become a stepping stone for local workers to qualify in jobs abroad, especially for skilled laborers. TeaM Energy 2010 Sustainability Report

After nearly ten years as a Board Member of the cooperative, he decided to set up his own company, the Virgilio Calizo, Sr. General Engineering Services (VCGES) or popularly called Virgilio M. Calizo Services (VMCS). The VCSGES employs 40 locals and provides janitorial services to TeaM Energy, including the cleaning of the jetty facilities, where the coal ship docks during unloading. Like Mr. Merene, Ka Vio also receives free training from TeaM Energy and has gained experience and knowhow in safety. This helped him obtain an accreditation certificate as a Safety Practitioner from the Department of Labor and Employment-Bureau of Working Condition. He gives back by being an active member of the KAPATIRAN Program. Welcome presence Asidefromhelpinggenerate jobs for skilled workers, including those hired by third-partycontractors,TeaM Energy also initiates training programs through TESDA.

“Once you qualify to work at the plant, it’s as good as qualifying for work abroad. The experience and training they get are comparable to those in foreign companies. Aside from that, TeaM Energy also initiates training programs with TESDA’s accredited training centers or supports the local government’s program,” said Mr. Merene, whose previous work at the power plant involved painting special signages. After acquiring work experience at the plant, upgrading his knowhow by attending various free courses offered to employees and securing his license, he now runs safety training programs for the workers employed by Power Zaver.

The jobs that the power plants generated have contributed to making both Sual and Pagbilao first-class municipality. But more than the figures, TeaM Energy’s economic contribution to the communities in Sual and Pagbilao through job generation has translated to real changes in people’s lives. Food is put on the table, kids are sent to school, and, most importantly, opportunities continue to thrive for generations to come.

The power plants engage several contractors during scheduled preventive maintenance outages. Most of the workers of these contractors are able to augment their regular income as farmers and fisher folk through their work at the plant. The others are skilled laborers, including welders and scaffolders, who are paid above minimum wages alongside precious work experience. Giving back In Quezon province, the presence of TeaM Energy’s Pagbilao Power Station has also been benefiting local communities. Virgilio Calizo, who was able to raise his three children and grandchildren with the help of his earnings as a contractor for almost 20 years with the Pagbilao plant, now gives back by providing employment to other family members in the community. In 1995, Mr. Calizo, or Ka Vio to many, was one of the founders of Kapit Bisig Ugnayan Multi-Purpose Corporation, a cooperative that provides the Pagbilao Power Plant additional manpower from its host communities. His long experience with the plant – which started during the pre-site mobilization phase in 1992 – helped him find the best kind of additional manpower support and general services that TeaM Energy needs.

TeaM Energy 2010 Sustainability Report

Virgilio Calizo was able to use his long work experienceinthePagbilaoPowerPlantwhen he set up his own company, which now employs 40 people. TeaM Energy 2010 Sustainability Report

Economic Engagement

Multiplying the fruits of hardwork A spirited group of teachers, retired teachers and retired principals got a much-deserved boost in 2009 when it won a P225,000 financial grant from TeaM Energy’s Competition on Development, which encourages registered community groups from the provinces of Quezon and Pangasinan to put together project proposals on education, environment, health and livelihood. The Pagbilao Teachers and Employees Multi-purpose Cooperative (PATEMCO) started as a regular credit cooperative, said its Business Manager, Ana Escleto. With the help of its 33 member-cooperatives in 16 schools in the municipality of Pagbilao, PATEMCO was able to expand its operations. Its flagship project – a school supplies store housed at the Pagbilao Central Elementary School – caters to more than 3,000 school kids, selling anything from pad paper to pencils at a 50-centavo discount compared with the prices in sari-sari stores outside. The venture makes school supplies accessible to majority of the families in Pagbilao, where a peso or two of savings can go a long way.

TeaM Energy 2010 Sustainability Report

PagbilaoTeachersandEmployeesMultipurposeCooperative(PATEMCO)makes schoolsuppliesaccessibletomorethan 3,000 school children at the Pagbilao Central Elementary School.

TeaM Energy 2010 Sustainability Report

To augment its income, PATEMCO bought a photocopying machine from the TeaM Energy grant, which was mostly used to increase the credit services of the cooperative. “I was able to go to school because of our family business so I know the value of perseverance when it comes to business,” said Ms. Escleto. For the teachers, having the store also means they do not have to dip into their own pockets to buy chalk, as the single box that the Department of Education supplies them each school year hardly lasts for a month or two. Membership in the cooperative also means extra income to augment their salary, which, at P10,000 after taxes for new teachers, had doomed most into a cycle of indebtedness. “We have a running joke here. That many teachers come from London. Loan-dito, loan-doon,” quipped Ms. Escleto, who is also a former president of the Pagbilao District Teachers and Employees Association.

PATEMCO launched the Kiddie Savers Club in 2008 to encourage children to save. The Club now has 600 members.

Recognizing the importance of learning the value of money at an early age, PATEMCO sought to teach kids the value of saving early on. In 2008, it launched Kiddie Savers Club, which encourages children to save by giving them their very own passbook so they can watch their money grow. The Club, which now has 600 members, is tailor-made for kids with its accessibility. With a P5 maintaining balance, virtually everyone can open an account. And like real bank accounts, those that reach P100 start earning interest. “When they reach P500, we help them open their own real-life bank account. Hopefully, saving becomes a lifelong habit for them,” Ms. Escleto said. “The peak season for withdrawals is usually during February, March, and December. The kids use the money to buy their exchange gifts for their Christmas parties, or new shoes for graduation, sometimes even Valentines’ gift for their teachers. These alone are less burden for their parents,” Ms. Escleto added.

Retired teachers run the day-to-day operations of the PagbilaoTeachers and Employees Multi-purpose Cooperative (PATEMCO). 28

TeaM Energy 2010 Sustainability Report

In less than two years, PATEMCO is already making a difference in their communities and in their members’ lives. As if they don’t do enough, the country’s unsung heroes have vowed to always do more. “All we need is the opportunity,” Ms. Escleto said.

TeaM Energy 2010 Sustainability Report

Farmers fuel the environmental missionofKASAMAKa,Quezon,Inc. (KQI), a federation of 14 people’s organizationsinthreemunicipalities in Quezon province.

Environmental Engagement

One with nature It’s common to hear stories of man ravaging nature to eke out a living. Forests are decimated, oceans over-fished, and animals hunted to near extinction just to serve man’s greed. But KASAMA Ka, Quezon, Inc. (KQI), a federation of 14 people’s organizations in three municipalities in Quezon province, is proving that looking after one’s survival doesn’t mean the environment has to take a backseat. Greening partners In 2003, TeaM Energy tapped the group, composed mostly of small farmers and fisherfolk, to be a partner in its environmental conservation efforts in Pagbilao, home to one of its power plants. The company gave out monetary incentives for every hectare that members of KQI reforested or rehabilitated. For five years, the federation has planted and maintained 150 hectares of forest cover in three upland barangays in Pagbilao and Atimonan, and another 150 hectares of mangrove forest in coastal barangays in Padre Burgos and Pagbilao. An additional 25 hectares act as a buffer zone in case untoward incidents such as flooding happen. “Five years ago, our upland area was bare. Today, it’s covered and is now a source of seedlings,” said Efren ‘Ka Ape’ Nañez, president of KQI. The area also supports the Binahaan watershed, from which surrounding barangays draw water for irrigation and domestic use. As there is a residential area and a school at the base of the Binahaan mountain range, keeping it forested helps prevent landslides. 30

TeaM Energy 2010 Sustainability Report

Eco-tourism potential The mangrove forests, meanwhile, not only boost marine biodiversity in the area, but also serve as tourist spots. In Barangay Ibabang Palsabangon in Pagbilao, the Mangrove EcoDestination forest is home to the most number of mangrove species in the world, next to the Amazon rainforest. After five years, responsibility for the maintenance of the upland and mangrove forests was turned over to KQI in 2008, with TeaM Energy providing occasional technical and organizational assistance. KASAMA Ka, Quezon, Inc. is responsibleforthemaintenance of the upland and mangrove forests in Pagbilao.

The Mangrove Eco-Destination forest is home to the most number of mangrove species in the world, next to the Amazon rainforest.

Aiming for self-sufficiency Today, three years after the turnover, KQI still regularly monitors and supervises the designated areas. It has managed to become self-sufficient through various livelihood projects, all of which are consistent with its mandates on environmental protection and long-term sustainability. One of its viable projects is vermiculture, which uses earthworms toproduce organic fertilizer. Three years ago, the only buyer for the organic fertilizer was from a nearby barangay. Today, clients come from as far as Lucban, Quezon and Calauan, Laguna, and the project has become bread and butter for KQI members. Plans are afoot to supply to a local government unit.

KQI is now setting its sights on a handicraft project that involves nontimber products, such as cogon and tiger grass, which abound in the upland barangays. “We try to keep everyone busy with activities. Without those, people will lose interest in our cause. So we always find ways to empower our people,” added Ka Ape. Its slew of livelihood projects not only enabled the group to become sustainable financially. Thanks to its steady partnership with TeaM Energy, care for the environment has also become a way of life for KQI members.

“We’re thankful that the government firmly advocates organic farming. We’re optimistic about this because we know that organic compost, unlike chemical fertilizer, is not hazardous to the environment,” Ka Ape added.

TeaM Energy 2010 Sustainability Report

Environmental Engagement

Saving a natural wonder From the viewing deck of the Mangrove EcoDestination area in Pagbilao, Quezon, you can see the Quezon Protected Landscape. Against this as backdrop and the nearby Palsabangon River, a view of the dense mangrove forest from the top is simply breathtaking. More than providing beautiful scenery, the Mangrove Eco-Destination area serves a bigger purpose. The 145-hectare area usually shields the townâ&#x20AC;&#x2122;s coastal barangays from destructive typhoons. Home to 48 species of mangrove, the park is also considered one of the most diverse in the world and critical in maintaining the balance of the ecosystem in Quezon Province. TeaM Energy helped rehabilitate the mangrove forest by engaging nearby communities in the reforestation efforts. Eco-tourism potential

TeaM Energy 2010 Sustainability Report

TeaM Energy built a three-story viewing deck to boost the tourism potential of the Mangrove EcoDestination park in Pagbilao, Quezon.

To maximize its potential as an eco-tourism destination, the company also built a three-story viewing deck, a training center, an exhibit room, picnic areas, and bunk houses for tourists and visiting scientists. The company also repaired the access road and replaced the rickety bamboo bridge with a 780-meter concrete and metal boardwalk that cuts through the lush forest, offering the best way to see upclose all the mangrove species. During low tide, it is not uncommon to see mud crabs crawling in and out of their holes at the bottom of the mangroves.

TeaM Energy 2010 Sustainability Report

n 2008 after the completion of its five-year commitment, TeaM Energy turned over the infrastructure facilities to the Department of Environment and Natural Resources (DENR) and to the local government unit of Pagbilao. Largely due to the lack of funding for upkeep, some of its infrastructure facilities are now in a state of disrepair. Thankfully, the Quezon Ecosystem Research Development Center (QERDC), the DENR unit that manages the area, had announced plans to tap into publicprivate partnerships to save the Pagbilao mangrove experimental forest. “We realized its potential as an eco-tourism hotspot so we’re actively looking for ways to refurbish the facilities,” said QERDC Director Dr. Jun Balagas. He said the mangrove forest itself is in excellent condition, a far cry from its near-decimated state more than ten years ago.

TeaM Energy also constructed a training center, an exhibit room, picnic areas, and bunk houses for tourists and visiting scientists. In addition, it also repaired the access road and a 780-meter concrete andmetalboardwalkthatcutsthroughthe lush forest. 36

TeaM Energy 2010 Sustainability Report

Development plans The local community is also doing its part. He said students from various universities regularly volunteer in site maintenance, as well as companies doing regular tree-planting activities. â&#x20AC;&#x153;We have many plans for the site. We are talking to a lot of people because we believe in its promise to attract tourists. That way, it can be sustainable,â&#x20AC;? Dr. Balagas said. In fact, the mangrove eco destination area is considered a natural wonder that can spur further development in Pagbilao. With the government and the community doing their part, it can thrive, like the tens of thousands of varied mangrove trees that give it its unique place in the world.

TeaM Energy 2010 Sustainability Report

The mangrove park is considered a naturalwonderthatcanspurfurther development in Pagbilao.

TeaM TeaMEnergy Energy2010 2010Sustainability SustainabilityReport Report

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Environmental Engagement

From Ridge to Reef Everything is related to Everything Else, is the first law of ecology. This means that each and every ecosystem plays a role to create the needed “balance” in order that “environmental services” are protected and sustained. An important lesson to be learned from the first law of ecology is that the Earth’s ecology is based on a network of relationships. That is why, in the first-class municipality of Sual, Pangasinan, home to the Philippines’ biggest coal-fired power plant run by TeaM Energy, we have partnered with communities, government agencies and the local governments to create an integrated approach to conserving and protecting the environment with the ridge to reef ecosystem approach. The ridge to reef approach recognizes that upland deforestation and other forms of vegetation clearance impacts coastal ecosystems by increasing sediment loads and sea water temperature. Working with two cooperatives, Sioasio East and Sual Coastal MulitPurpose Cooperatives, the DENR, and the Municipal Government, the company is a prime mover in the ridge-to-reef ecosystem management approach by complementing upland reforestation and re-greening programs with coastal resource rehabilitation. From Ridge…: Sioasio East Multi-Purpose Cooperative battles forest fires and the blistering heat to protect upland reforestation project

TeaM Energy 2010 Sustainability Report

TeaM Energy is a prime mover in the ridge-to-reefecosystemmanagement approach and is working with two cooperatives in Sual.

In the upland, TeaM Energy funds the work of the Sioasio East MultiPurpose Cooperative that looks after 50 hectares of upland forest to prevent soil erosion. Once a week, a member of the cooperative dutifully takes a 30-minute hike up the slippery slopes of the mountain to check on the forest. TeaM Energy 2010 Sustainability Report

Sioasio East Multi-Purpose Cooperative looks after 50 hectares of upland forest to prevent soil erosion.

There are also regular visits from a team of forest rangers hired by the local government unit to do daily rounds in a 400-hectare DENR reforestation project nearby. “The upland forest have grown beautifully because there’s always someone who looks after them,” says Barangay Chairman Joseph Gacad. “When one dies, we replace it right away. During summer, we even irrigate. This way, our 50 hectares are always planted at 100% capacity.” Aside from providing extra income to upland farmers, the project also serve as glue that holds the community together, said Romulo Vaygan, president of the cooperative. Livelihood projects, such as making handicraft from locally available raw materials, also provide extra income to upland farmers.

“During summer, we are always wary of wildfires. But everyone knows what to do when that happens. In fact, when fire broke out a few months ago, everybody helped put it out. We were able to contain it before it spread,” he says.

The group, which gets full support from the barangay, reports their progress monthly to TeaM Energy. To make their programs sustainable, several livelihood projects are also in the works, including the making of handicraft from locally available raw materials such as cogon and tiger grass. … to Reef: Sual Coastal Multi-Purpose Cooperative diligently and patiently manages mangrove plantations

To help ensure the sustainability of the programs, TeaM Energy offerstechnicaltrainingandcash incentives so the cooperatives can augment their members’ livelihood. One of these is the vermiculture project of the Sual CoastalMultipurposeCooperative.

In the coastal areas, the Sual Coastal Multi-Purpose Cooperative oversees the mangrove rehabilitation project of TeaM Energy. Composed of 240 farmers and fishermen from five coastal barangays in Sual, the Cooperative has been the company’s environmental partner since 2005. It is responsible for more than 10 hectares of land, with five hectares added this year. “Sometimes, it can be hard to plant mangrove propagules, especially during the rainy season. When one dies out, we have to replace it right away. It’s a very difficult process. We have to watch it closely, but it’s worth it,” says Lailo Sotero, president of the Cooperative. To help ensure the sustainability of the programs, TeaM Energy offers technical training and cash incentives so the cooperatives can augment their members’ livelihood. One of these is the vermiculture project of the Sual Coastal Multipurpose Cooperative. While it started only this year, the project produces first-rate organic fertilizer and is now already highly sought-after in Barangay Sioasio East. Just like the mangrove propagules they planted, the cooperatives continue to flourish in Sual. What started out as initiatives to take care of nature have grown into programs that sustain communities and sustain lives.

TeaM Energy 2010 Sustainability Report

Environmental Engagement

Where the wild birds are A thick plume of smoke and ash, and the smell of burning coal. These are the usual images conjured when you think of a coalfired power plant. The sight of birds flying around and gracefully landing on the calm waters of the ash pond at the Pagbilao Power Station, however, shatters this stereotype. For many years now, the ash pond has served as a sanctuary for some threatened bird species that come from as far as Taiwan and Hong Kong. Members of the Wild Bird Club of the Philippines (WBCP), a nationwide organization of birdwatchers interested in the preservation of wild birds, have been sighting the biggest number of wild ducks in the area, of which close to 90% are the famous Philippine ducks (Anas luzonica). “In terms of biodiversity, the Philippines has more than double the number of bird species than China,” said Mike Lu, president of the WBCP. Believing that birds are the best testimony to the cleanliness of the power plant’s surroundings, TeaM Energy has partnered with the WBCP to promote biodiversity conservation.

TeaM Energy 2010 Sustainability Report

TeaM Energy partnered with the Wild Birds Club of the Philippines (WBCP), a nationwideorganizationofbirdwatchers interestedinthepreservationofwildbirds, topromotebiodiversityconservationinits Pagbilao and Sual Power Plants.

TeaM Energy 2010 Sustainability Report

The250-memberWildBirdClubholdsregular birdwatching activities in Pagbilao.

PagbilaoPowerStationisknownforthebiggestnumberofwildduckssightings,ofwhichcloseto90%arethefamousPhilippineducks(Anasluzonica).

The regular birdwatching activities in these areas have spawned a host of rewards, not just for the bird enthusiasts, but also for conservationists and regulators. One activity is the annual Asian Water Bird Census, which is being jointly undertaken by the WBCP and the Department of Environment and Natural Resources (DENR) since 2004.

As migratory as well as endangered species of birds have found a sound habitat in the plant’s vicinity, the 250-member club is now able to hold regular bird-watching activities in Pagbilao, which usually starts at the break of dawn, when the birds can be seen flying in formation. Mr. Lu said the birds are attracted to the undisturbed ash pond, which was built primarily to hold and neutralize the ash by-product of burnt coal. “Since the power plant has well-manicured lawns and well-kept shrubs, it’s easy to spot and photograph forest and terrestrial species of birds, including the Java sparrow, Barred Rail and Buttonquail,” he added. The rare phenomenon is not only happening inside the Pagbilao power plant. At TeaM Energy’s Sual Power Station, the ash lagoon has also become a “birder’s wonderland,” said TeaM Energy Foundation Executive Director Ricky de Castro, who is also a member of the WBCP. Over the last ten years, the bird population in the area has increased dramatically, making it another sought-after destination for bird watching enthusiasts.

TeaM Energy 2010 Sustainability Report

Prior to the census, the DENR did not have any data on water birds, said Mr. Lu. With the help of WBCP, which conducts the census during its birdwatching activities, the DENR found out that 80 species of water birds can be found in the wetlands of Parañaque, which has since been declared as a critical habitat area. The WBCP also hosted the first Asian Bird Fair in Davao City in 2010 and has helped promote ecotourism by producing bird watching books for the Department of Tourism. In many of these activities, the WBCP always relies on the support of TeaM Energy. “Companies are not too hot about the environmental aspect of birds. Usually, they just use them for educational purposes. Only TeaM Energy looks at its support from the point of view of environmental preservation,” Mr. Lu said.

TeaM Energy 2010 Sustainability Report

Social Engagement

Hope for the fisherman’s daughter Jelyn Siorez is a fisherman’s daughter. She grew up in the sleepy little fishing village of Ibabang Polo in Pagbilao, Quezon, with a population of not more than 4,000. When she was younger, all she wanted was to finish high school. She didn’t even dream of going to college. She just knew she had to find work. There were plenty of mouths to feed, and being the second in a brood of 14, Jelyn learned early on to carry the yoke of responsibility. Near the end of her third year in high school, this fisherman’s daughter heard opportunity knock, seized it, and never turned back. Working hard in school while helping out in family chores, she eventually graduated valedictorian of her high school. Being valedictorian, Jelyn was offered a college scholarship by TeaM Energy in 2000. With the free tuition and allowance, she took up a four-year computer science course at Manuel S. Enverga University Foundation in Lucena City.

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TeaM Energy 2010 Sustainability Report TeaM Energy 2010 Sustainability Report

TeaMEnergytechnicalclerkJelynSiorez was able to get a degree in computer science through the help of a college scholarship from TeaM Energy.

Now 28, Jelyn is the picture of hope and contentment. A technical clerk at the Engineering and Performance Section of the TeaM Energy Pagbilao power plant, she goes about her daily tasks with a smile and a spring in her stride. TeaM Energy 2010 Sustainability Report

Despite her enviable position as a happily married woman with two kids, her own house and a family car, this fisherman’s daughter still chooses to live with her “extended family” in Pagbilao. She has unofficially adopted three of her siblings, and even supports their schooling. A sister is graduating from college with a degree in education. Another sister is in high school, and the youngest is only four years old, but helps babysit Jelyn’s own three- and two-year-old kids. Her 24-year-old brother is a coal trimmer working with the contractor at the Pagbilao power plant coal docks.

Jelyn and her “extended family” in Pagbilao.

While her husband is away at work, Jelyn occupies herself with various activities inside and outside the company. “I love to join contests for designing company posters and event logos. I’m also a member of the company choir. I also join the company’s environmental awareness and ‘Cool Maging Healthy’ project activities, especially when they go weighing and giving vitamins to the children,” she adds. “TeaM Energy has been a big help,” she acknowledges. “I’m also thankful it is supportive of our community. I hope our company’s college scholarship program continues to help more young people make the most of their lives, as it has helped me.”

TeaM Energy 2010 Sustainability Report

Social Engagement

It takes a village To Marilyn Verzosa, the barangay health centers have become battleground in the fight against child malnutrition. As a Barangay Nutrition Scholar (BNS) and a successful trainee of the Pabasa sa Nutrisyon (PsN or Reading for Nutrition) Program, Marilyn is in the front lines. She regularly joins dedicated barangay health workers, knocking on doors to check on children ages 0 to 71 months old in Barangay Capantolan, one of the seven barangays with the highest incidence of malnutrition in Sual, Pangasinan. They tediously weigh all undernourished children and vigilantly monitor their nutritional status to determine the impact of the PsN program. Health ally

TeaM Energy 2010 Sustainability Report

TeaM Energy has become a steady ally of barangay health workers in Sual and Pagbilao through its health initiatives.

In this fight for survival and good health, TeaM Energy has become a steady ally. Through the company’s “Cool Maging Healthy” (It’s Cool to Be Healthy) program, a three-year social health initiative in the communities of Sual and Pagbilao, Quezon that host its two power plants, dedicated and sincere women like Marilyn who are already doing nutrition-devoted community volunteerism are tapped as strategic partners. Aside from barangay health workers and scholars, the company also coordinates with the local government units, as well as with rural health units in the area. TeaM Energy 2010 Sustainability Report

Barangays in Sual which used to rank among the “Top 5 Malnourished Barangays” in the municipality were able to dramatically reduce their malnutrition rates with the help of TeaM Energy’sprogramwiththeNutritionCenterofthe Philippines.

To entice mothers to attend the Pabasa learning sessions, TeaM Energy made the health centers more child-friendly.

TeaM Energy also plays good neighbor to women like rural health midwife Leticia “Letty” S. Mislang of Barangay Macaycayawan in Sual who has been reaching out to the remotest barangays in Sual under her charge for the last 32 years. Caoayan and Capantolan, two of the other barangays in Sual under Letty’s care, used to be among the “Top 5 Malnourished Barangays” in the municipality. With TeaM Energy’s assistance in implementing the PsN program, the two barangays have seen the malnutrition rates significantly reduced. Grassroots strategy PsN, a brain child of the Nutrition Center of the Philippines, is a unique grassroots approach to teaching nutrition information and health practices to mothers, pregnant and lactating women, and family members. To entice mothers to attend the Pabasa learning sessions, TeaM Energy made the health centers more child-friendly. It supplied rubber mats, toys, and snacks so mothers can bring their children along and leave them to the care of volunteers during the session. The company also encouraged mothers to go into vegetable gardening, one of the modules taught in the PsN, by providing tomato, pechay, ampalaya, sitao, and okra seedlings in so-called “Damayan sa Pamayanan” (Communal Backyard Gardening) sites. It also gave out prizes to the best vegetable gardens per barangay. 54

TeaM Energy 2010 Sustainability Report

Championing volunteerism TeaM Energy is also a good neighbor to Belen Abadilla, a barangay health worker since 1999 and a Barangay Nutrition Scholar for the past four years. Belen served as point person for many of TeaM Energy’s CMH initiatives in Pagbilao, Quezon Province, including the Mothers’ Club, a group founded in 2001 to organize the mothers in the barangay. As a community health volunteer, Belen conducts once-a-week lectures on family nutrition among 30 housewives and mothers, whose spouses work as construction workers, farmers, fishermen, tricycle drivers, and the like. “Here in Barangay Ibabang Polo, we are trying to lessen our malnourished children and through the help of TeaM Energy’s Cool Maging Healty program, more mothers are breastfeeding and taking better care of their babies. The backyard gardens are growing well, and the housewives have made good use of the harvested vegetables to provide more nutritious meals for their family. We also got rid of bad practices among some of the women, such as gambling and smoking,” Belen says proudly. On top of health volunteerism, she also conducts livelihood seminars on soap-making, gardening, and beauty culture to the members of the Samahan ng Kababaihan sa Isla Grande Multipurpose Cooperative. Founded in February of 2004, the cooperative is a conduit of TeaM Energy for its microfinance program with some 60 to 70 active members – all housewives from the barangays of Ibabang Polo and Isla Grande in Pagbilao. With seed money from TeaM Energy, the cooperative put up a Bigasan ng Bayan, provided loans to finance the small businesses of its members, and took over the operations of the Botica sa Barangay. With untiring women volunteers like Belen, Marilyn and Letty as partners, TeaM Energy is able to enrich its role as a good corporate neighbor and magnify its impact in the communities where it operates. Indeed, it takes a village. With seed money from TeaM Energy, the Samahan ng Kababaihan sa Isla Grande Multipurpose Cooperative took over the operations of the Botica sa Barangay.

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TeaM Energy’s Cool Maging Healty programencouragedhousewivestogrow vegetablesintheirbackyardssotheycan provide more nutritious meals for their family.

TeaM Energy 2010 Sustainability Report

Social Engagement

Passing the torch It was a dreary, rainy morning, but the building that houses the Sual Livelihood and Skills Training Center (SLSTC) was bustling with activity. Efren Gabonada, trainer of welders, was demonstrating the proper and safe method of welding pipes to students. An elderly Japanese trainer from Nippon Skilled Volunteers Association (NISVA) looked on. Later, it would be the students’ turn to hold torch to metal and watch as the sparks fly. The students were chosen among the initial 40 applicants who will receive daily training in metal arc welding for the next two months. After completing the program, they can qualify to take the certification test at the Technical Education and Skills Development Authority (TESDA) Center in Lingayen, Pangasinan, and work as welders here and abroad. Pride in his work Mr. Gabonada himself is a proud product of the SLSTC. He had worked for two years with one of the welding contractors at the Sual power plant. The plant was still new. We did the chimney – the same one you see rising above the plant site,” he beams.

TeaM Energy 2010 Sustainability Report

Efren Gabonada, trainer of welders, is a proud product of the Sual Livelihood and SkillsTraining Center set up with the help of TeaM Energy, TESDA, the local government unit of Sual, the Nippon Foundation, and NISVA.

Thanks to the veteran welders at the Sual plant, he gained a lot of work experience. When he tried to apply for a job abroad, he found out that he still needed a certification from the state-owned TESDA. Good thing his wife, who was working at the municipal government, learned about SLSTC and encouraged him to apply.

TeaM Energy 2010 Sustainability Report

Launched in February 2008, the SLSTC is a joint undertaking of the local government unit of Sual, the Nippon Foundation, NISVA, TESDAPangasinan Provincial Office, and TeaM Energy. Nippon Foundation is one of the largest philanthropic, non-governmental organizations in Japan. It funds and supports the operation of NISVA volunteers who travel to Southeast Asian countries to contribute their practical knowledge and skills in support of the host countriesâ&#x20AC;&#x2122; economic and social development. Training others Together with six other trainees, Mr. Gabonada received a two-month training in welding under the tutelage of sprightly trainer Fumio Nijimi from NISVA. Recognizing his skill, Mr. Gabonada was tapped to be the assistant of the Japanese trainer in the succeeding sessions. Seeing his skills, the local government unit recommended him to the Trainors Methodology Training Program (TMTP) in TESDA Lingayen. This is where Mr. Gabonada got his license to train other aspirant welders. He now conducts welding sessions at the SLSTC in two shifts.

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A Japanese trainer from Nippon Skilled Volunteers Association (NISVA) helps students turn to hold torch to metal at the SLSTC.

TeaM Energy 2010 Sustainability Report

Out of 205 participants since it was establishedthreeyearsago,theCenter hasalreadyproduced180competent welders who have received TESDA certifications.

Out of 205 participants since it was established three years ago, the Center has already produced 180 competent welders who have received TESDA certifications. Some now work with a TeaM Energy contractor, Power Zaver Techno Services Corporation, while others are affiliated with the Federation of Sual Multi-Purpose Cooperative which the Sual Plant also engages for various contracted jobs. A number also work abroad, hired as welders in Subic or have put up their own neighborhood welding shops. Newfound satisfaction During their training at SLSTC, the participants were also provided metal scraps and other materials to practice their skills. They also work on actual welding projects for the local government. Mr. Gabonada hopes the Center will continue to reap the generosity of donors. He himself has now shunned the lure of working abroad, and is now content with helping his hometown. He treats his students like his brothers. “I tell them to study hard. I find satisfaction now that my students are doing well for themselves,” he says. “My goal is to register the Center as TESDA-certified so that it can receive funding from the national government directly.

Anumberofskilledworkerswhowere trained at the SLSTC are also able to work abroad, as welders in Subic, or have put up their own neighborhood welding shops. 62

TeaM Energy 2010 Sustainability Report

Beingthefirstladymayorofatraditionally male-dominatedpoliticalarenainMuslim MIndanaowasadauntingtaskforMayor Janaree Pundato.

Social Engagement

Molding tomorrow’s leaders When then 34-year-old Janaree Pundato Disomimba stepped in as mayor of Tamparan, Lanao del Sur in 2007, the fifthclass municipality was so cash-strapped it could not even afford to build its own town hall. It was also known for being the haven of warring clans from nearby towns that a school had been converted to serve as temporary shelter for refugee children. As the first lady mayor of the town, Mayor Janaree faced the daunting task, not just of alleviating poverty, but also contending with the traditionally male-dominated political arena in Muslim Mindanao. “In the Muslim community, it’s always tough to be a woman leader and especially to be young,” she said. “When I was campaigning, a representative from the religious sector even questioned why a woman has to run.” After three years, a combination of hard work, transparency, and citizen empowerment has enabled the town to make significant strides, both economically and politically. And Mayor Janaree, who came from a long line of reform-minded leaders, was both at the forefront and on the “crossfire.” 64

TeaM Energy 2010 Sustainability Report

Mayor Janaree joined the Asian InstituteofManagement-TeaMEnergy Bridging Leadership Conference in 2007, along with the lady mayors of Mindanao, to create drastic reforms in her town.

While removing abusive employees from government posts, she also sought to create a support system to help her in the task of instituting reforms. “I surrounded myself with like-minded people from the grassroots and civil society. I networked with groups like Kaya Natin, which has progressive leaders.” From the training program, she also learned the value of “systemic thinking,” and now looks at the bigger picture whenever she was confronted with a problem. And despite stepping down from office in 2010 when her husband took over, Mayor Janaree continues to contribute to the bigger mission of the Bridging Leadership Center. “We now have our own town hall. We improved the health care situation. We cleaned up the bureaucracy. And we put in place some reforms that put a stop to the practices that promote acts of corruption and patronage,” she proudly said.

By being part of the National Organization of Bridging Leaders (NOBLe), she said she can help other alumni by sharing how the lessons they learned in the program are done in practice. It’s also a good venue, she added, to see if the programs they put in place can be replicated elsewhere.

Before she stepped in, all government transactions were conducted in the house of the Disomimbas, who has been in power for the past five decades. “Every barangay project has to be approved by them. And typical of Mindanao leaders, all the sisters or wives are the treasurers. But when I became mayor, I started conducting biddings,” she added.

She also founded the I am for Peace And Development (iPAD) Mindanao, a network of civil society organizations, which recently called on lawmakers to postpone the ARMM elections and instead set up a caretaker government in the region.

Her conviction to create drastic changes in her municipality was strengthened when Mayor Janaree joined the Asian Institute of Management-TeaM Energy Bridging Le adership Conference in 2007. Along with the lady mayors of Mindanao, Mayor Janaree found a forum where she could be openly progressive with her ideas.

While Mayor Janaree admits she was initially reluctant to be on the frontline as mayor, the huge mandate that she received from the people of Tamparan – garnering the biggest in the town’s history – inspired her to do her best. With some help from the Bridging Leadership Center, this feisty leader has been able to turn theory into practice, and in the process give hope to the people of its 44 barangays.

“Through the Bridging Leadership Conference, I learned that change must start from the leader and we must engage our stakeholders in the process. I also learned that we, as leaders, must learn to own the problem. Leaders must admit we cannot do it alone. With a town that has so many issues, even if you’re the best, you can’t do it alone,” she explained.

“There was no question in my mind whether what I was doing was right. The only challenge for me was to give everything a good fight,” she added.

Communication, she added, became central to her program of government – from identifying problems to rallying her constituents to help her solve them. “I discovered that the simple conversations I had with the townspeople were the most educational and heartwarming feedback mechanism we can set up. From what we gathered, we implemented reforms accordingly. I told the people, I can only do it if you will help me.” Progressive leaders like Mayor Janaree becomepartoftheNationalOrganizationof Bridging Leaders. 66

TeaM Energy 2010 Sustainability Report

Sustainability Report Technical 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. Consultants Editorial Services: Writers Edge, Inc. Creative Services : Ardent Communications, Inc. Photography: Jorem Catilo

TeaM Energy 2010` 2010 Sustainability Report

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To obtain a copy of the TeaM Energy 2010 Sustainability Report, contact The External Affairs Team E: external.affairs@teamenergy.ph T: +632 552 8000 Fax: +632 551 7089

TeaM Energy 2010 Sustainability Report