AUSTRALIAN PACKAGING COVENANT ACTION PLAN 2010 - 2015

NEW Action Plan covering the period from 1 July 2010 to 30 June 2015

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INDEX

Page 3………………..COMPANY INFORMATION    

Corporate Location & contact details Australian Subsidiary Head Office Location & contact details State Offices - Location details

Page 4………………..COMPANY OVERVIEW     

History Business activities - Corporate & Local Philosophy Brands Company Size

Page 5….……………..PACKAGING CHAIN RELATIONSHIP   

Company position within the supply chain Upstream sectors Downstream sectors

Page 5……………… COVENANT CONTACT AND TIMING  

Covenant contact Time period for Action Plans

Page 6 .........................PACKAGING MATERIALS AND FORMATS

Page 7…………………SUMMARY OF PAST COVENANT ACTIVITIES

Page 10.......................TRANSITION TO THE NEW COVENANT Page 11...................... ACTIONS SUPPORTING THE ACHIEVEMENT OF THE COVENANT OBJECTIVES AND GOALS Page 13 ……………….NEW ACTION PLAN 2010 TO 2015

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Page 15.......................THE SAMSUNG PACKAGING SPECIFICATION AND ECODESIGN PROCESS AND PROGRAM     

The Ecodesign system The packaging specification process Continuous improvement The product innovation cycle Comparison with the requirements of the APC

Page 19.....................Table 1 – SAMSUNG PRODUCT INNOVATION CYCLE TYPICAL TIME LINES

Page 21………………COVENANT COMMITMENT – MD SIGNATURE

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COMPANY INFORMATION

CORPORATE

HEAD OFFICE:

SAMSUNG ELECTRONICS CO LTD 150-2 Ga Taepyung-Ro, Choong-Gu, Seoul, KOREA Telephone Facsimile Website

0011 82 2 7277114 0011 82 2 7277985 www.samsungelectronics.com

AUSTRALIAN SALES SUBSIDIARY

HEAD OFFICE:

SAMSUNG ELECTRONICS AUSTRALIA PTY LTD Quad Samsung 8 Parkview Drive Homebush Bay 2127 NSW Telephone (Main) Facsimile (Main) Website

02 9763 9700 02 9764 6440 www.samsung.com.au

STATE BRANCHES: Melbourne Brisbane Adelaide Perth

Unit 3/ 270 Ferntree Gully Rd Notting Hill 3168 VIC Building 4, Gateway office park, 747 Lytton Rd, Murrarie 4172 QLD Ground Floor 1 Greenhill Rd Wayville 5034 SA Level 1, 85 Havelock St, West Perth 6005 WA

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COMPANY OVERVIEW HISTORY Samsung Electronics (Korea) was first established in January 1969. Initial production was black & white television for the Korean domestic market. The production of other products rapidly followed in support of local demand. Commencing in 1983, the company began to establish production facilities and sales offices in many overseas countries. One of the branch offices opened during 1983 was in Rydalmere NSW. This branch then became a Sales office in 1987. Currently, Samsung Electronics (Korea) has 24 Production facilities, 35 Sales subsidiaries and 20 branch offices around the world. The parent company is listed on the stock exchange as a public company. BUSINESS ACTIVITIES Consumer electronics, telecommunications & information technology form the core business areas for the parent company. These areas are mirrored in Samsung Electronics Australia Pty. Ltd marketing and sales activities in Australia which can be summarized into the following activities:      

Receiving product from overseas manufacturing facilities. Providing warehouse storage for the products. Promoting the products directly and indirectly to the consumer. Selling the product to retail buying groups and independent retail stores. Distributing the product to the retail buyers. Providing spare parts to authorized service centres.

PHILOSOPHY Since the company’s inception Samsung employees' have been guided by a corporate philosophy that states: "We will devote our people and technology to create superior products and services, thereby contributing to a better global society." Today this corporate philosophy unites all Samsung affiliated companies. BRANDS The company markets electronic products under the Samsung brand name. 4

COMPANY SIZE Turnover is confidential. Current number of employees:

263

PACKAGING CHAIN RELATIONSHIP

The company is classified as a packaging user and is a sole packaging covenant signatory. The company has identified the following supply chain sectors: Upstream   

Corporate headquarters located in Korea Manufacturing plants located around the world. International shipping company

Downstream   

Australian transport contractor Retail stores Consumers

Activities relating to the co-operation with both upstream & downstream supply chain sectors are contained in the Action Plan Commitment Table.

COVENANT CONTACT RESPONSIBLE FOR IMPLEMENTING, MONITORING AND REPORTING

Mr. Ron Wills Phone 02 9763 9799 Mobile 0408 283 385 Fax 02 9763 6440 Email: [email protected]

TIME PERIOD OF THIS ACTION PLAN 1 July 2010 to 30 June 2015

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PACKAGING MATERIALS AND FORMATS USED BY THE COMPANY 

Samsung uses packaging to protect electronic goods and whitegoods in transit between various manufacturers located in the Asian region, Australia and between local warehouses and retail stores and in transit to the final customers. Given the delicate nature and high value of the products involved, the distances travelled and the number of times the goods are transferred and handled, packaging used has to be robust.

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Materials used are primarily cardboard outer packaging and a variety of internal shock absorbing and stabilising materials made of various types of plastic as well as cardboard and moulded pulp. Smaller components and accessories tend to be separately wrapped in plastic pouches or bubble wrap to avoid damage in transit.

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The company uses every opportunity to minimise or optimise packaging, with the transition from cardboard outer packaging to shrink wrap for washing machines a recent example.

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Materials used include:

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Cardboard Paper Wood /particle board Plastics – HDPE / PP / LDPE / PS / PVC / Composites

Formats include:  

Cardboard boxes Folding cartons 6

       

Shrink wrap Envelopes Pouches Wraps Dividers Padding materials Bubble wrap Plastic containers

SUMMARY OF PAST COVENANT ACTIVITIES Samsung has implemented the 2005 – 2008 and the 2009 – 2010 National Packaging Covenant Action Plan and provided the baseline data set by entering the data into the IDAS data base. All data requirements and applicable KPIs have been met for each reporting year. We have also caught up on the inclusion of recycling information on outer cartons. We have added printer cartridge recycling to our internal recycling program. This service is provided by Close the Loop. Samsung staff is being reminded to recycle all their printing cartridges by appropriate signage near the recycling bins in utility areas.

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Our parent company in Korea has established a data management system to collect product and packaging information, called e-RIMS (E-Recycling Information Management System). Australia has used this system to provide product and packaging related data for the Covenant’s IDAS reporting system. Samsung is located in premises at 8 Parkview Drive, Homebush Bay NSW. The building has the highest possible Greenhouse rating - Five Stars. The building has been designed with best practice in energy efficiency and has the following features:  Lighting: o controlled by occupancy sensors to minimise run hours o general office lighting is automatically turned off after hours and needs to be re-activated for people working longer hours o there are motion and sound detectors in meeting rooms and storage areas that are not used continuously  Heating and Cooling: o Solar control is achieved by shade panels in the building façade o High performance insulating glass helps manage peak cooling loads o Office areas are cooled by passive chilled beams which eliminates the need for fans in the air conditioning system o Energy use is reduced by use of a low volume air distribution system o Heating is managed through that system o Total area is divided into smaller zones that can be separately adjusted to react to the number of people occupying that space 8

 Air quality: o Air passage through the system throughout the day is 100% fresh.  Recycling facilities: o Breakout areas are equipped with recycling facilities for glass, aluminium and plastic as well as a location for food scraps and wet waste o Utility areas have secure paper recycling bins and toner recycling bins o Paper recycling bins are provided at work stations  Water recycling and saving: o Recycled water is used for irrigation of the grounds, for heating and cooling the building and for flushing toilets o The building has waterless urinals o AAAA rated plumbing fittings and fixtures are used throughout o As a result the volume of water saved at the site each week is equivalent to the contents of a domestic swimming pool  Drinking water: o Water coolers have been eliminated o Zip taps providing hot and cold water are provided in breakout areas and contribute to water and energy savings.

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TRANSITION TO THE NEW COVENANT SAMSUNG undertook a program of transitioning to the new Australian Packaging Covenant which involved the following steps: 

Establish a Covenant review and implementation team;

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Review of the APC Draft to determine changes in the requirements and the resources required to meet these;

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Complete training of team members in APC compliance; 10

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Review of the Sustainable Packaging Guidelines and its requirements and their significance to the SAMSUNG business;

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Liaise with SAMSUNG headquarters to obtain details of packaging design and specification processes and internal environmental assessment systems;

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Compare SAMSUNG internal review processes with the APC Sustainable Packaging Guidelines to confirm equivalence;

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Assess the frequency of packaging review within each product grouping and its link to product innovation cycle;

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Determine local approach to meeting the review requirements of the APC.

ACTIONS SUPPORTING THE ACHIEVEMENT OF THE COVENANT OBJECTIVES AND GOALS a. Goal 1: Packaging optimised to achieve resource efficiency and reduced Environmental impact without compromising product quality and safety: Action: Sustainable Packaging Guidelines for design and procurement to be implemented as set out below. b. Goal 2: The efficient collection and recycling of packaging: Action: Optimisation of proportion of recyclable packaging in accordance with the Guidelines; Use of recycled content as appropriate; Continuation of workplace recycling program; Marking of recyclable items with recycling logo and appropriate instructions; Membership of Buy Recycled Business Alliance.

c. Goal 3: Demonstrated commitment to product stewardship. Action: Commitment to packaging stewardship given by management at the local and headquarters level as outlined below; 11

Contribution to the APC funding program; Participation in product stewardship programs for television and computer products. SAMSUNG has committed seed funding to the establishment of Product Stewardship Australia and has joined as a member. Baseline data for each of the Goals and Actions are included in the summary table below:

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ACTION PLAN – 2010 to 2015 Period of this plan: 1 July 2010 to 30 June 2015 GOALS GOAL 1

ACTION

Packaging optimised to Implement the APC Sustainable achieve resource Packaging Guidelines for design efficiency and reduced and procurement environmental impact without compromising product quality and safety

Report on the performance of packaging in the supply chain.

Prepare summary report on the review process and outcomes.

BASELINE DATA

TARGET / OUTCOME

APC Sustainable Target: Packaging Guidelines have 1. Review packaging been reviewed and for all new compared with the internal products. design and specification 2. Complete review of program used by packaging for all SAMSUNG headquarters products within the to ensure compliance. (See time frame of the Note 1 for method) product innovation cycle for each product category – (See Table 1 below.) Program is in place.

COMMENT

SAMSUNG design and specification program (Ecodesign System) includes a full environmental assessment and complies with the requirements of the APC.

The system covers over 8000 items of packaging associated with 3. Report on whether the protection of packaging meets its SAMSUNG in-transit protective products in transit. role. 4. Report on performance against targets. 13

GOAL 2 The efficient collection and recycling of packaging

Targets: 1. Confirm outcome of the design and specificat-ion process results in increased proportion of recyclable material.

Optimisation of the proportion of recyclable packaging in accordance with the Guidelines.

Optimisation of recyclable packaging is part of the current SAMSUNG review process.

Use of recycled content as appropriate.

Use of recycled material for new packaging is part of the current SAMSUNG review process.

2. Confirm outcome of the review process results in use of recycled content packaging.

Continuation of the workplace recycling program.

Program is currently active

3. Confirm program is active.

Marking of recyclable packaging with logos and instructions.

Appropriate labelling of packaging is part of the current SAMSUNG review process.

4. Report on compliance.

Membership of the Buy Recycled Business Alliance

Currently a member.

5. Report on continuing membership.

Contribution to the APC funding program.

Current year contribution made.

6. Confirm annual contribution.

The SAMSUNG Ecodesign system includes modules to check for packaging recyclability and labelling.

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GOAL 3 Demonstrated commitment to product stewardship.

Commitment to packaging stewardship by local and headquarters management

Participation in product stewardship programs for TV, computer and computer peripherals recycling.

SAMSUNG is a member of the APC.

Targets: 1. Membership continues.

Senior management has committed to the implementation of the APC Action Plan

2. SAMSUNG remains compliant with the Action Plan

Legislation pending. Programs under development.

3. SAMSUNG remains committed. Report progress of implementation.

SAMSUNG headquarters policy is to commit to product stewardship.

NOTE 1.

THE SAMSUNG PACKAGING SPECIFICATION AND ECODESIGN PROCESS AND PROGRAM 1. THE ECODESIGN SYSTEM SAMSUNG uses an Ecodesign system for both product and packaging which are developed in tandem. The aim of the system is to improve the environmental performance of the product throughout the full lifecycle – design, production, transport, use and recovery. It is based on ‘Design for Environment’ principles. 15

The program evaluates the environmental aspects of both product and packaging at several stages of the design process. Firstly environmental objectives are incorporated into the design brief at the planning stage, a first assessment is conducted during the development stage and a second assessment is undertaken prior to production when packaging requirements to ensure the safe transport of each product are finalized. The program is based on the concept of continuous improvement so that the environmental outcome improves each time a product goes around the design / redesign loop. The program evaluates the environmental performance of product and packaging against a wide range of environmental criteria including:             

Regulatory compliance Labelling requirements Energy use / efficiency Emissions (materials and during production) Material use / weight Resource efficiency / resource reduction Minimisation of toxic / hazardous materials Design for transport Design for reuse Design for recycling Use of recycled materials Inclusion of consumer environmental information (recycling, batteries, refrigerant etc.) 3rd party certification etc.

In all over 40 criteria are included in the Ecodesign system. Relevant aspects are addressed in the packaging module which also focuses on:

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Weight (material optimization) Recyclability Inclusion of plastic marking logos Easy of recycling Use of Chlorine free paper Use of recycled content in cardboard boxes Use of bio-based printing inks Use of recycled materials generally Reuse of packaging components where possible Reduction of complex materials Certain materials are banned (e.g. Expanded polystyrene cushioning material) Elimination of hazardous materials – e.g. Heavy metals

2. THE PACKAGING SPECIFICATION PROCESS Packaging engineers design each packaging system in conformance with the output of the Ecodesign system and to ensure that it is designed to sufficiently protect the product in transit. Packaging specifications (which include environmental requirements) are transmitted to each contract manufacturer or factory together with the specifications of the product. Compliance with specifications is monitored. A check of packaging material compliance with specifications is part of the quality assurance process on incoming goods.

3. CONTINUOUS IMPROVEMENT The Ecodesign system assigns a score to each environmental attribute measured for both the product and packaging. The scores are weighted to reflect the specific attribute’s importance in the overall environmental impact of the product and packaging system throughout the product’s life cycle. Points scored by the 17

product/packaging system are aggregated for comparison purposes. This score can be used to determine whether or not any change made to a product and packaging system results in an overall improvement on environmental performance. The aggregated score can be used to classify the product and package as either an ‘eco-product’ a ‘good eco-product’ or a ‘premium eco-product’, the objective being to move each product and package up the design hierarchy. The reports of these assessments will be made available on the SAMSUNG corporate website.

4. THE PRODUCT INNOVATION CYCLE SAMSUNG manufactures a wide range of consumer electronics and white-goods in a highly competitive market. Innovation in the technology applicable to each of these product, together with market and regulatory pressures, ensure that each product cycle is relatively short. Each product model marketed by SAMSUNG therefore spends a relatively short time in the market before it is replaced by either an upgraded version of the same product or a completely new design. In the white-goods sector, for example, a product introduced this season will be upgraded once for next season and replaced with a new product the season after. This means that every two years a new product and packaging combination appears for each SKU on the market. The innovation cycle for electronics is even shorter, with models of mobile phones, for example, being replaced after 6 months in order to remain competitive. The packaging system used for each product only lasts as long as that model lasts in the market.

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model is replaced with a new model, it is contained in a newly designed packaging system which has undergone the internal design and review process. The net result is that all packaging used for SAMSUNG products is subject to review within a two year cycle or less.

5. COMPARISON WITH THE REQUIREMENTS OF THE APC The SAMSUNG Ecodesign system matches the requirements in the APC Sustainable Packaging Guidelines, the implication being that each product marketed by SAMSUNG in Australia is being packaged in accordance with the Guidelines (i.e. it has had a process similar to that required by the Guidelines applied to it in the design and development stages and subsequently reflected in the packaging specifications.) Given the short product model innovation cycle, ranging from 6 months to two years, each model or product replacement automatically involved a compliant review of the packaging in use.

TABLE 1.

SAMSUNG PRODUCT INNOVATION CYCLE TYPICAL TIME LINES

PRODUCT GROUP Air conditioners Mobile phones Microwave ovens Washing machines Refrigerators Vacuum cleaners

INNOVATION CYCLE 2 years 6 months 2 years 2 years 2 years 2 years 19

Wine coolers/cellars Television – LED Television – Plasma Television – LCD Television – Projection DVD/Blu Ray Player Combination Player Digital Video Recorder DVD Rom Device CD RW Drive DVD RW Drive Combination Drive MP3 Player Fax – Plain Paper Fax – Inkjet Printer – Color Printer – Laser Printer – Photo Notebook computer Computer Monitor LCD

2 years 1 year 1 year 1 year 2 years 1 year 2 years 1 year 1 year 1 year 1 year 1 year 6 months 2 years 2 years 1 year 1 year 6 months 6 months 1 year

The conclusion that can be drawn from the above is that, given that the longest innovation cycle time line is two years – i.e. each product is replaced with a new model within a two year period – the packaging used for each SAMSUNG product undergoes a compliant review within that time frame.

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