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Responsible Practices

Responsible Practices

Katie Rattigan manages ANZ's financial hardship programs, which have this year provided support to more than 10,000 customers facing financial difficulty.

Governments, regulators, customers, communities and our employees expect us to grow our business responsibly. This is especially important as we enter and expand in countries where legal and regulatory frameworks are different to those in our traditional markets of Australia and New Zealand.

We have strengthened our governance structures; are improving management of social, environmental and reputation risks and opportunities; and continuing to apply the lessons for ANZ, and banks generally, from the global financial crisis.

Strengthening Governance

Our Corporate Responsibility (CR) Committee is chaired by our Chief Executive Officer, Mike Smith. It identifies, responds to, and monitors current and emerging risks and opportunities for our business. This year, the Committee guided implementation of our new CR framework and priorities; human rights standards; carbon neutral strategy and approach to supporting disaster relief and recovery efforts.

In addition, ANZ’s Reputation Risk Committee oversees management of social, environmental and regulatory risks particularly in our Corporate and Institutional client portfolio including sensitive sectors such as energy, defence and forestry. It also provides a forum for staff to obtain advice on complex or controversial issues involving clients, transactions or products.

Providing Safe, Uncomplicated Products and Services

A new Global Product Management Policy provides clear guidelines for the development of safe, uncomplicated products from the concept through to decommissioning. A supporting project is streamlining and simplifying the number of products we have to ensure they meet expectations, including those of customers and regulators.

The policy also forms part of our response to the issues in relation to the marketing and promotion of the ING Diversified Yield Fund (DYF) and the ING Regular Income Fund (RIF) in New Zealand. In addition to NZ$500 million made available by ANZ New Zealand and ING in 2009, we have reached settlement with the New Zealand Commerce Commission and Securities Commission to pay a further NZ$45 million to investors in the two funds.

Providing the Right Incentives For Staff

Our Remuneration Policy was reviewed to ensure our pay and bonus systems encourage and reward appropriate risk-taking and achievement of sustainable shareholder returns.

The Board is able to reduce or eliminate deferred performance-based remuneration which has not yet vested if it considers the initial grant was not justified in light of information arising after the grant was made or to protect the financial soundness of ANZ.

Performance assessments for all employees, including our senior executives, are based on a combination of financial and non-financial measures which consider risk, reputation, stakeholder interests and sustainable practices.

Building an Ethical and Risk-aware Culture

Almost 46,000 employees completed our ’Leading’ or ‘Understanding Risk in our World’ learning programs, which reinforce the message that identifying and managing risk is everyone’s responsibility.

All staff are also required to complete an annual training course, ‘Living the Code’, which includes a declaration of compliance with our Code of Conduct and Ethics. This confirms that each employee understands the Code’s principles and has complied with them over the previous 12 months. We have recorded a 98% completion rate for this essential training and compliance program. We track and report breaches of the Code annually.

The majority of breaches of our Code of Conduct and Ethics relate to ‘Compliance with the Code, law and ANZ procedures’ and more specifically the inappropriate use of our email and intranet systems.

Taking into account the increase in staff numbers this year, the proportionate number of breaches of the Code has declined.

Types of Code of Conduct and Ethics breaches

Based on total head count (including contractors) 54,810 in 2010 and 43,523 in 2009 (a 26% increase in total staff year on year).

  2010 2009
ANZ's best interests/reputation on impact 126 20
Compliance with Code, law and ANZ procedures (mainly related to inappropriate use of email and systems) 1,021 822
Conflicts of interest 9 11
Honesty and integrity 83 167
Improper payments, benefits or gains 6 7
Personal transactions and gain 16 12
Privacy and confidentiality 16 12
Failure to report breaches of the Code, law and ANZ policies and procedures 13 14
Treat others with respect, maintain a safe workplace 16 7
Total 1,294 1,093

 

Outcomes arising from breaches of the Code included 195 dismissals, 69 resignations, 174 staff being counselled and numerous reprimands. We continue to improve our reporting systems and increase awareness of the ethical standards expected of all our employees.

Whistleblower Protection

Our Whistleblower Protection Program enables all employees, contractors and consultants to confidentially report concerns about conduct, practices or issues they are concerned about without fear of reprisal, dismissal or discrimination.

  2010 2009
Reports received 18 12
Reports closed 16 101
Reports still under investigation 6 4
 
1. Two cases carried over from 2008.

Responsible Decisions in our Institutional Lending Portfolio

Our shareholders, customers and non-government organisations are increasingly interested in ANZ’s approach to managing social and environmental issues related to large corporate clients and projects.

We have clear policies in place to guide our involvement in sensitive sectors, such as energy, mining and defence, and we consult regularly with interested parties in order to better understand their concerns.

For example, a respected Australian faith-based organisation approached us concerned about our involvement with a hydroelectric project in the Mekong region and its potential to adversely impact local people, communities and the environment.

ANZ has supported this project over time recognising it will deliver much needed and secure electricity supplies to a developing nation. Properly managed from a social and environmental perspective, the project will also improve the lives of local communities through the availability of better health, transport and educational infrastructure, and improved household and community income levels.

Our client, with our support, provided a key representative from the community organisation with the opportunity to see first hand how the project sponsor was managing the issues, working with local people, and seeking to make a positive contribution to the economic and social development of the impacted communities.

Through the visit, both parties were able to share perspectives on the positive and negative aspects of the project and discuss details of remedial strategies in place to respond to key issues regarding the social and environmental impacts.

Respecting People and Communities – Our Approach to Human Rights

A new set of standards, ‘Respecting people and communities – ANZ’s approach to human rights’ formalises our commitment to be respectful of local cultures and priorities, comply with laws and go further in situations where we have the responsibility, skills, resources and expertise to do so.

The standards were developed in consultation with stakeholders, including shareholders, community groups and our staff, who want to know where we stand on these issues and to see evidence our commitments are ‘more than words’.

Practical actions we have taken to embed our standards in everyday business include establishing occupational health, safety and wellbeing plans for countries in our network and providing training covering social and environmental issues and opportunities relevant to our lending decisions for senior bankers.

We also support internationally accepted human rights standards, including the UN Global Compact and OECD Guidelines for Multinational Enterprises, and apply the Equator Principles to all project finance transactions.

In applying our standards, we understand our responsibility to respect the national sovereignty of host governments. Our response to human rights issues and ability to effect change may depend in some cases on local conditions and cultures, legal frameworks and the extent of our management control over another entity.

Over the coming year we will work with our customers, business partners and suppliers to encourage their support for our approach and standards while further incorporating them into our business practices including training, communications, contracts, agreements and due diligence processes.

Supporting Customers in Financial Hardship

Dedicated teams in Australia and New Zealand are helping customers to manage and emerge from periods of financial difficulty. In Australia for example, our Customer Connect team assisted over 10,000 customers this year.

A new program has been trialled to identify customers showing early signs of financial stress so that we can offer prompt assistance and help them avoid more serious problems down the track.

More than 3,500 credit card customers were contacted and while the majority felt comfortable managing their situation, 11% accepted our offer of support such as changes to their credit card product, more convenient ways of managing their account or access to financial education and literacy programs.

A new confidential debt advice service is also being piloted offering customers in financial difficulty direct and timely access to over-the-phone assistance from independent financial counsellors. The service will help customers assess their overall financial situation, prioritise debts, arrange temporary repayment packages and plan the most appropriate course of action.

These measures enhance our long-term investment to ensure our most vulnerable customers are protected from inappropriate offers of credit and that those who find themselves in financial difficulty receive timely, appropriate and sensitive support.

Training Fund Builds New Careers

More than $640,000 in training grants have been provided to help staff build new careers outside the bank or find alternative positions with us if their roles are offshored.

In partnership with the Finance Sector Union (FSU) in Australia and FINSEC in New Zealand, the initiatives include:

  • Committing up to $10 million to a New Career Training Fund to help impacted employees find new jobs and careers outside ANZ.
  • Improving processes to support higher rates of redeployment and retraining for roles within the bank to minimise redundancies.
  • Establishing a Past Employee Care Fund to help eligible individuals facing a period of financial hardship after leaving ANZ.

In 2010, 80% of staff impacted by offshoring decisions who have expressed a wish to stay at ANZ have been redeployed in other roles within the bank.

For staff who have elected to leave ANZ, more than 90 are now pursuing a range of vocations including in nursing, teaching and photography, after receiving a New Career Training Fund grant.

Twelve former staff members affected by offshoring decisions have also been supported by the Past Employee Care Fund, which provides one-off cash payments of up to $15,000 to help staff through a period of financial hardship after leaving ANZ.

Total number of employees and contractors in Australia and New Zealand impacted by offshoring decisions

  2010 2009
Australia    
Permanent staff made redundant 56 202
Contractors whose contracts finished 75 353
New Zealand    
Permanent staff made redundant 7 187
Contractors whose contracts finished 11 55

Supporting Our Communities

Andrew Wilson-Annan

Andrew Wilson-Annan, an executive in our Regional Commercial Banking business is also a Country Fire Authority (CFA) volunteer in Woodend, Victoria. We provide Andrew with volunteering leave and flexible working hours so he can perform his duties to support the CFA's vital work protecting his community.
“Our partnership with ANZ ushers in a new era of engagement in the region – it will be based on participation, mutual learning and an inclusive approach to sustainable development.”
Dimity Fifer, CEO, Australian Volunteers International

This year we expanded our volunteer program giving all employees globally access to one day of paid leave for volunteering. We also established a partnership with Australian Volunteers International (AVI) to provide skilled volunteering opportunities for our employees in Asia Pacific.

ANZ and AVI’s first pilot project is with respected community organisation Bahay Tuluyan, in the Philippines. Our local team will share their professional skills in areas such as finance, governance, IT and human resources so Bahay Tuluayn is better equipped over the long term to deliver its services that create education opportunities for children in need.

Our staff contributed over 91,000 hours of volunteering this year – short of our 100,000 hours target. With increased organisational support and a more stable economic environment, we aim to achieve this target in 2010–2011.

A new Disaster Relief and Recovery Policy is helping to ensure we provide timely, effective and appropriate support when our customers and communities are impacted by natural disasters.

Following a 7.1 magnitude earthquake which hit the area around Christchurch, New Zealand in September, ANZ donated NZ$1 million to the New Zealand Red Cross Canterbury Earthquake Appeal. We also matched donations to the appeal from our New Zealand staff, provided volunteers to assist the New Zealand Red Cross with their hotline and offered a special package of relief measures to impacted customers and business clients.

We have also contributed to rebuilding efforts for communities affected by earthquakes in Indonesia and China; Typhoon Ketsana which swept across Vietnam, the Philippines, Laos and Cambodia; flooding in Queensland and India; and the tornado which devastated the Liangping Chongqing region of China.

Key Goals We Set Out To Achieve In 2010

KEY GOALS WE SET OUT TO ACHIEVE IN 2010 PERFORMANCE
Implement our new CR framework across the Group with a specific focus on programs and initiatives in the Greater Mekong region.
Implement our revised Human Rights Statement across our business.
Pilot a debt advice service for retail customers in financial difficulty.
Implement consistent social and environmental assessment processes and guidance for the evaluation and credit approval of sensitive sector Institutional clients in our Asia Pacific operations.
Improve our retail customer satisfaction in Australia and New Zealand.
Improve our performance on the Peter Lee and Associates survey of corporate and institutional clients.
Reduce our Lost Time Injury Frequency Rate (LTIFR) in Australia and New Zealand by a further 10% and continue the global implementation of our health and safety system.
Achieve an employee engagement score of 69% in 2010.
Implement a new Group-wide community investment model and enable staff to contribute 100,000 hours volunteering.
Implement our revised sustainable sourcing framework and publicly report on verification, audit processes and spot checks used to assess compliance and corrective actions required.
Implement products and services to assist clients and customers with the transition towards a lower-carbon economy.
Implement a tailored learning program and tools for senior leaders and employees to further embed a strong risk management culture across ANZ.
  • Achieved or on track to achieve
  • Partially achieved or in progress
  • Did not achieve
 
See anz.com/cr/performance for more detail