MEDIA RELEASE 7 April 2003

Super funds say: companies should plug the gap in workplace safety risk management disclosure

Two of Australia’s leading superannuation funds, the combined Public Sector and Commonwealth Superannuation Schemes (PSS/CSS) and Catholic Superannuation Fund (CSF) today called on companies to significantly improve public reporting of workplace health & safety (WH&S) risk management.

Research performed by BT Financial Group and Monash University for PSS/CSS and CSF found that nearly two-thirds of companies in the S&P/ASX200 Index did not publicly disclose their policy and strategy for workplace safety management. In addition, only 10% publicly report a lag indicator of WH&S performance and 2% of companies specify their management system applies to contractors.

“ Our review of 2001/2002 company annual reports indicates market failure in the area of WH&S disclosure by the top 200 companies,” said Mr Steve Gibbs, PSS/CSS CEO, and Mr Frank Pegan, CSF CEO, in a joint statement.

“ We call for a better informed market for WH&S risk management. This relates not only to Australia’s $27 billion annual cost of direct work-related injury and disease but also the many on-costs associated with WH&S – estimated at possibly four times greater than direct costs.

“ It is now accepted that WH&S risk management also contributes to important company assets such as reputation, brand equity and employer of choice status.

“ Companies do report WH&S information to State and Territory WorkCover authorities but this relevant risk information is frequently omitted from public company reporting. We are not calling for increased regulation of companies. We are calling for relevant WH&S performance and risk management commentary to be provided also to investors.”

WH&S has long been cited as having a relationship with sound company management. Investors are increasingly interested in this aspect of risk management and believe companies stand to gain from improved WH&S reporting. It will improve trust, enhance the market’s awareness of risk and companies will benefit from improved reputation and brand equity. In summary, companies that look after their workplace health and safety improve their chance of being sound long-term performers.

Through their joint investment governance program, established to protect the long-term interests of their members, PSS/CSS and CSF are calling on companies to disclose relevant WH&S performance and risk management commentary to investors in their annual reports; and on fund managers and investment analysts to take a more active interest in WH&S risks.

“ Corporate Australia knows it needs to work to re-build trust with investors and the community generally. Improved reporting on WH&S is one of many areas it can start with,” the PSS/CSS and CSF said.

A background position paper for media is available from this site or by calling (02) 6263 6923.

Postscript: PSS/CSS and CSF also welcome Northern Territory Government and Public Authorities Super Scheme to their investment governance program.

For interviews:
Mr Steve Gibbs, Chief Executive Officer, PSS/CSS
Mobile 0418 102 310

Mr Joe Farrugia, Catholic Super Fund
Phone 03 9648 4714, Mobile 0417 117 196

For media information:
Sabine Muller-Glissmann, Communications Manager, PSS/CSS
Phone (02) 6263 6923, Mobile 0403 916 607

Facts on the Public Sector and Commonwealth Super Schemes (PSS/CSS):

The PSS and CSS are two of Australia’s leading super funds which:

• provide retirement benefits and superannuation services to over 260,000 members Australia-wide;
• have around $10 billion funds under management;
• safeguard the long-term interests of members through Australia’s first and leading comprehensive governance program, launched in 2001;
• were the first to raise the governance issue of disclosure of risks such as auditing (April 2002) and environmental disclosure (September 2002); and
• are committed to keeping members well informed so they make the most of their retirement opportunities.

Facts on Catholic Superannuation Fund (CSF):

CSF membership is represented across the teaching profession in Catholic schools and associated agencies in Victoria, Tasmania and the Northern Territory. The CSF commenced in 1971 and represents the interests of approximately 30,000 members with combined investment assets of about A$1.1 billion. CSF formally commenced its investment governance programme in November 2002.

Facts on BT Financial Group:

BT Financial Group is the wealth management business of Westpac Banking Corporation. BT Financial Group encompasses the three former entities of Westpac Investment Management, Rothschild Australia Asset Management and BT Funds Management. BT Financial Group is one of Australia's largest investment management groups offering a range of investment management solutions to clients. The Governance Advisory Service (GAS) is a leading-edge approach to governance risk management developed with institutional investors to meet the challenge of long-term governance risk management. GAS currently advises clients representing around $3,500 million of Australian share investments.