About the Report watershed. - Maynilad Water Services · About the Report Message from the Chairman Message from the President About Maynilad ... 2011 marks a very important milestone

About the Report Message from the Chairman

Message from the President

About Maynilad

Commitment to Sustainability

Highlights of 2011

Awards and Recognitions

Management & Corporate Governance

Stakeholder Management

Employee Commitment: Key to Sustainable Development

Environmental Leadership

Community Empowerment

Moving Towards a Customer Centric Business

Testimonials

Moving Forward

GRI Index Sheet

GRI Application Check

Table of Abbreviation

Acknowledgement

Contact Details

Table of Contents

ABouT THE CovERMaynilad believes that every action we make, no matter how small, marks an inevitable

consequence to the world. "Securing our Resources" by integrating sustainability into our business has allowed us to set forth a change that has rippled out exponentially, paving the way for the

company's long-term growth and success.

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La Mesa Treatment Plant 1 sedimentation basins.

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MAYNILAD | 2011 SUSTAINABILITY REPORT

Maynilad Water Services, Inc. is very proud to release its first Sustainability Report. This report marks an important milestone for the Company, particularly with regard to our commitment to sustainability.

Scope

The figures and information contained in this report cover Maynilad’s sustainability performance from January 1 to December 31, 2011. It includes some information about Maynilad operations in all 17 cities and municipalities of the West Zone, Maynilad’s primary area of responsibility.

For quantitative measures of performance, the report also includes data for the past year. This will provide readers with a year-on-year comparison and help them identify trends, which will allow them to fully understand the impact of Maynilad’s performance on a broader scale.

RepoRting pRincipleS

The Maynilad 2011 Sustainability Report was prepared in accordance with the Global Reporting Initiative (GRI) G3.1 Standards on Sustainability Reporting. The data contained in this report covers topics that reflect Maynilad’s significant economic, environmental, and social impact, particularly those that are of value to its stakeholders. This report is a GRI-checked Level B report.

MateRiality analySiS

Maynilad focused the contents of this report on the broad areas that include topics on the environment, workplace and corporate social responsibility that are most critical and material to the organization and its stakeholders. The Key Performance Indicators to be reported were decided on by our Corporate Quality, Environment, Safety and Health (CQESH) Division, as well as by the members of our Management team.

Maynilad is a company that formulated the green team!

At Maynilad, we believe that we are more than a water and wastewater service provider. The data contained in this report allows us to tell the story of how we have worked to become a “catalyst for growth," "steward of environment," and an “agent of progress” in the various communities that we serve.

This report helps us in communicating our stand on sustainability. Here, we map out what we have achieved so far and present our plans for a more sustainable future.

Maynilad employees take a boat ride to reach a tree-planting site at the Ipo watershed.About the Report

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Dear Stakeholders,

In early 2007, Maynilad inherited an aging and highly inefficient water infrastructure from the Philippine government, after the latter took over the Company from its previous owners due to unpaid debts. From then, with our backs against the wall, to now—publishing our first annual sustainability report—we have come a long way as a company through the collective efforts of our people, unwavering vision of the Management and, most importantly, our continued commitment to environmental leadership, community development and employee welfare.

We believe that profitable operations are the key to sustain business and provide the basis to create, as well as foster, development across our stakeholder community. Year 2011 caps the five-year growth strategy established in 2007 and marks yet another proud year of growth in business and expansion of operations. True to our goal, we have hit our revenue targets. But more importantly, in getting there we have:

Increased our network of clean water users several-fold since 2007, covering the underserved market and promoting inclusivity in service delivery.

Innovated to develop a new water supply source and construct a new treatment facility to reduce dependency on the receding Angat dam water supply.

Reiterated our commitment to best practice by achieving compliance to 13 ISo Certifications for 6 of our key operating sites including ISo 14064 (focused on GHG emission reduction)—the country’s first!

Continued our commitment to employee welfare and development through trainings, occupational Health and Safety (oHS) programs and various other benefits.

Maynilad continues to be at the forefront of Corporate Social Responsibility (CSR) through its Samahang Tubig Maynilad (STM), Lingkod Eskwela and other initiatives that promote poverty alleviation by reaching out to marginalized communities.

MaynilaD in 2012

We will continue to weave sustainability efforts into our core operations and deliver nothing but progress in this journey—allowing us to have maximum positive impact on our stakeholder community. To achieve this, we will establish, manage and continuously improve our sustainability management system to cover all aspects of the triple bottom line and help drive impact to the communities that we operate in.

As our stakeholders, I urge you to become a part of this journey through your continued involvement in the long term, and to take time to read our commitments and initiatives.

MANUEL V. PANGILINANChairman

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Dear Stakeholders,

at the end of 2010, i declared that 2011 would be a defining year for Maynilad—our "make or break" year. it is no secret that Maynilad’s journey as a water and wastewater services provider has been a rough and very challenging one. the change of ownership and management had truly taken its toll on the organization, and when the company was finally turned over to the Mpic-DMci consortium in 2007, we can very well say that we had our work cut out for us.

2011 marks a very important milestone in the history of the company, because it is the culmination of our five-year strategic program. When we embarked on the Water Service transformation program in 2007, we committed to making a positive change in Maynilad. looking back, one cannot help but appreciate the dramatic turnaround that we managed to engineer for the company over the past five years.

MaKing a DiFFeRence tHRoUgH oRganiZational cHange

one of the strategic targets that our team had at the beginning of 2007 was to improve organizational efficiency. It was a bold step, but we knew that it would strengthen accountability for results and empower our employees to be more involved in the decision-making process. Maynilad had already achieved so much and we felt the need to be consistent with its improvement—allowing the Company to be more and do more.

While Maynilad has always had CSR as part of its overall corporate strategy, the rapidly changing times has allowed us to realize that our commitment to sustainability can no longer be limited to our CSR projects and initiatives. This has led us to embrace Corporate Sustainability as a proactive strategy that we needed to integrate into the core of our business and ensure the organization’s long-term growth, while taking a balanced development approach to the triple bottom line—People. Planet. Profit.

environmental leadershipWe are in an era, where businesses need to be more responsible towards how we affect the environment, and Maynilad has answered that call by integrating sustainable practices into the fabric of its operations.

Maynilad obtained ISo certifications in quality, environment, and safety and health management across 6 key operating sites. Among these is the ISo 14064:2006 certification for the verification of our Greenhouse Gas (GHG) or carbon footprint quantification and reporting initiative from Tuv Rheinland—the first and only one of its kind in the country thus far.

These management systems have allowed us to ensure that the improvements we have made are aligned with our commitment and consistent with international standards. Through this, we have already laid the groundwork necessary to continue sustainable practices for any future improvements we will be making.

MoRe pRogReSS aHeaD

2011 not only marks the end of our five-year strategy for growth but also the beginning of more progress to come. The successful publication of this report heralds a renewed commitment towards sustainability. This has allowed us to review our sustainability commitments and further improve on key areas. one thing is for certain: this is just the start of more good things to come.

In closing, our heartfelt gratitude goes to all the fellow patrons of our sustainability initiatives, for partnering with us and consistently helping us in achieving sustainable growth and thereby creating a brighter tomorrow.

VICTORICO P. VARGASPresident and Chief Executive officer

commitment to employee DevelopmentWe strongly believe in empowered employees promoting a stronger organization. At the end of 2010, our people development programs allowed our organizational culture to reach a higher level—helping our employees become more fulfilled and empowered. In 2011, we conducted 457 training programs with 11,375 attendees in over 9,151 training hours to further enable our employees to take responsibility and exercise authority in relevant areas of the business, hence driving operational excellence.

community DevelopmentServing the communities we operate in has been the center of our development programs. This year, the Samahang Tubig ng Maynilad (STM) program received an award from the International Water Association Award’s Project Innovation Awards Development (PIA-D) in recognition of how the program improved health and sanitation conditions in different communities, generated additional savings and promoted a better quality of life for the residents.

The Mamamayan Para sa Lambat at Dagat Multi-Purpose Cooperative was also born this year to assist impoverished fisher folk of the city of Bacoor. This serves as a testament of Maynilad’s commitment to creating a positive impact on the various communities that we serve.

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about maynilad

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coMpany pRoFile

Maynilad is the largest private water concessionaire in the Philippines in terms of customer base. It is a concessionaire of the Metropolitan Waterworks and Sewerage System (MWSS) given exclusive right to manage water and wastewater operations in the West Zone of the Greater Manila Area.

The West Zone concession covers 540 square kilometers and is composed of the cities of Manila(all but portions of San Andres and Sta. Ana), Quezon City (west of San Juan River, West Avenue, EDSA, Congressional, Mindanao Avenue, the northern part starting from the Districts of the Holy Spirit and Batasan Hills), Makati (west of South Super Highway), Caloocan, Pasay, Parañaque, Las Piñas, Muntinlupa, valenzuela, Navotas and Malabon—all in Metro Manila; the city of Cavite, and the towns of Bacoor, Imus, Kawit, Noveleta and Rosario—all in Cavite Province.

Maynilad is managed by DMCI-MPIC Water Company—a joint venture between Metro Pacific Investments Corporation (MPIC) and DMCI Holdings Inc. (DMCI). The MPIC-DMCI consortium took over Maynilad in January 2007.

The Company was established through the successful privatization of the MWSS in 1997. Prior thereto, MWSS was in charge of providing water supply and sewerage services in the East and West zone of the greater Metro Manila.

Highlights of 2011

A zone specialist checking customers’ consumption.

In a highly competitive bidding that drew the attention of the global water community, the partnership of Benpres Holdings Corporation and ondeo Water Services, Inc. (formerly Suez Lyonnaise de Eaux) was awarded the exclusive right to run the water and wastewater operations in the West Zone of Metro Manila.

Towards its 10th year, after a string of financial, legal, and regulatory disputes, the Company went through a change of ownership, with the Metro Pacific Investments Corporation and DMCI Holdings, Inc. consortium (“Consortium”) acquiring 83.96% of the Company’s shares. Lyonnaise Asia Water Limited held a 16% share.

The MPIC-DMCI consortium took over the Company on 24 January 2007, and immediately worked on the Company’s financial and operational rehabilitation. In August of the same year, the Consortium signed a prepayment and settlement agreement with its creditors and MWSS.

By January 2008, the Consortium, the new owners of the Company, had already paid off the Company’s outstanding debts which had then reached $240 million. The Company implemented an aggressive catch-up plan to increase its revenue, improve water service operations, and drastically cut commercial losses.

To herald the sweeping transformation, reflect the new direction and the renewed vision of the Company, its new company logo was launched in November 2008.

About Maynilad

Maynilad has the largest customer base in the Philippines

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coRpoRate ValUeS

At Maynilad we are driven by the following values:

plantS anD FacilitieS

Maynilad manages and maintains three (3) water treatment plants, seventeen (17) pumping stations, nineteen (19) reservoirs, thirteen (13) mini-boosters, one hundred six (106) deep well stations and twenty two (22) on-line boosters to provide potable water through 6,476 kilometers (km) of water pipelines for its client base. The West Zone water supply is processed at La Mesa Treatment Plants 1 and 2 in Quezon City, and at the Putatan Water Treatment Plant in Brgy. Putatan, Muntinlupa.

At the same time, Maynilad also operates and maintains one (1) Septage Treatment Plant (SpTP), one (1) communal septic tank that works together with six (6) lift stations and approximately 500 km of sewer pipelines. These ensure the efficient collection, treatment and disposal of sewage and septage.

Microfiltration units at Putatan Water Treatment Plant in Muntinlupa

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MaynilaD WateR tReatMent plantS

La Mesa Treatment Plant 1 1500 MLD

La Mesa Treatment Plant 2 900 MLD

Putatan Water Treatment Plant100 MLD

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MaynilaD WaSteWateR tReatMent plantS

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CommitmEnt toSuStainability

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Commitment to Sustainability

SUStainaBility StRategy

The creation of the CQESH Division allowed us to focus on building and implementing our Sustainability Strategy, which is based on securing our resources. This strategy focuses on the following areas:

1. Establishment and Maintenance of IMS (Integrated Management System)2. Efficiency Programs3. Clean Fleet Management4. Water Safety Plan5. Climate Change Programs6. Employee Engagement and Development7. Community Outreach Programs8. Sustainability Reporting

Social Improvement and Sustainable Transformation, Inc. (ASSIST).

Maynilad was one of the companies awarded a grant for RoBuST PHIL. The grant covers mock audit or preparatory up to the actual audit, after which Maynilad will decide if it will push through with the certification audit of BS 25999-2:2007.

This program was piloted in two areas, specifically the Technical and Commercial Management of NCAL BA and the SAP System and Availability of Information Technology Services.

The critical services of the two pilot areas were documented, all possible threats identified and a structured protocol adopted. Work procedures are now established and plans are developed to conform to the business continuity management standards.

A mock audit was conducted on November 24, 2010 and Maynilad was awarded with the Certificate of Compliance during the Best Practices Forum held at the New World Hotel in the City of Makati on February 15, 2011.

2. eFFiciency pRogRaMS

In its efforts to adopt and enforce energy efficiency in operations, Maynilad teamed up with the Manila Electric Company’s (MERALCo) Customer Choice Program, which allows the purchase of electricity from MERALCo at Time-of-use (Tou) retail rates. This enabled the Company to pay less for the electricity it consumes during off-peak hours. The agreement was initially rolled out to cover the Putatan Water Treatment Plant and villamor Pumping Station, and resulted in a minimum annual savings of 2.5% on power costs for the Company.

Apart from just reducing cost, Maynilad adopted the use of energy-efficient technologies in 2011. one of these is the installation of variable-Frequency Drives (vFD) for pumps. These vFDs helped optimize the operation of pumps in our pumping stations and online boosters, thus allowing us to fine-tune processes while

Maynilad's IMS team with external auditors from Tuv Rheinland during the ISo audit of North Caloocan Business Area.

Monitoring our water network using Sahara Leak Detection Technology.

Dagat-Dagatan Sewage and Septage Treatment Plant (DDSSTP) - The first Sewage and Septage Treatment Plant in Asia Pacific Region certified in ISO 9001, ISO 14001 & OHSAS 18001

Maynilad aims to be the established leader in environmental best practices in the water industry. We stay focused on projects, programs, activities and services, that not only bring value to the business, but also to the different communities that we serve.

In 2011, we have moved beyond our Corporate Social Responsibility (CSR) by integrating sustainability into the very framework of our operations. By optimizing and securing our resources, we were able to achieve cost savings, increase resource and operational efficiencies, improve quality of services, and maintain the health and safety of our employees in the workplace, as well as the communities we operate in.

5. Maynilad Water Services, Inc.Corporate-wide certification in ISo 14064:2006 First company in the Philippines with a certified Carbon Footprint other facilities with on-going establishment of IMS are the following:1. Central Laboratory ISo 17025:2005, ISo 14001:2004 and oHSAS 18001:20072. Water Network ISo 9001:2008, ISo 14001:2004 and oHSAS 18001:20073. Integrated Meter Management and its Meter Laboratory ISo 9001:2008, ISo 17025:2005, ISo 14001:2004 and oHSAS 18001:20074. Corporate Quality, Environment, Safety and Health ISo 9001:20085. Human Resources ISo 9001:2008

As part of maintaining and continuously improving this IMS, all key employees from across the organization have been put through IMS audit courses at different levels, covering internal and lead auditor qualifications.

BUSineSS continUity ManageMentThe Business Continuity Management standard (BS 25999-2:2007) provides guidance for businesses on how to reduce the impact of any disruption, whether due to a major disaster, a minor incident or a force majeure. Being a basic service provider, Maynilad needs to be able to respond and resume its operations following any disruption.

Resilient organization Built for Sustained Transformation of the Philippines (RoBuST PHIL) is a Public Private Partnership program which has a developmental agenda in supporting and equipping mission critical enterprises for better disaster and crisis preparedness. Co-funded by DEG of Germany, the project is being implemented by Tuv Rheinland and Asia Society for

1. eStaBliSHMent anD Maintenance oF iMS

Maynilad is committed to establishing corporate-wide Integrated Management System (IMS) applying the scopes of the following management systems:• ISO 9001:2008 for Quality Management System (QMS)• ISO 17025:2005 for Laboratory Quality Management System (LQMS)

• ISO 14001:2004 for Environmental Management System (EMS)• OHSAS 18001:2007 for Occupational Safety and Health Management System (oSHMS)• ISO 14064:2006 for Greenhouse Gases (GHG)• BS 25999-2:2007 Business Continuity Management

Ensuring that customers get quality water services at all times, Maynilad has achieved certification for its five key facilities including company-wide certification from reputable international certifying bodies such as Tuv SuD and Tuv Rheinland. These certifications are:1. La Mesa Treatment Plants 1 and 2 (LMTP 1 & 2) 2. Dagat-Dagatan Sewage and Septage Treatment Plant (DDSSTP)3. Tondo Sewage Pumping Plant (TSPP) 4. North Caloocan Business Area (NCal BA)

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reducing costs for energy and equipment maintenance. To date, Maynilad has installed 30 vFDs, 23 of which are being used in major pumping stations while seven are installed on online boosters leading to reduced cost on energy and equipment maintenance.

Maynilad acquired new technologies to effectivelymonitor and manage our water network. Advancedleak detection technologies improved our TelemetrySystem while the installation of a Geographic Information System resulted in the effective monitoring and managing of our water network. Due to these technological developments, Maynilad was able to minimize its Non-Revenue Water (NRW). We have set up a dedicated team of engineers to manage these technological developments and consistentlymonitor our NRW.

3. clean Fleet ManageMent

In 2011, Maynilad replaced 90 of the outdated company vehicles based on findings from the GHG audit that these were the second major source of air pollutant emissions in the Company. Maynilad developed a Clean Fleet initiative, which involved the lease of 155 new vehicles that are all Euro-2 compliant. These vehicles undergo periodic maintenance to ensure that they are running in the best condition. Company drivers were also trained to observe eco-driving practices such as: Slow-and-Go instead of Stop-and-Go, maintaining a steady speed when driving, among others.

4. WateR SaFety plan

Being in the business of water, Maynilad partnered with the Department of Health (DoH) and the World Health organization (WHo) to develop a Water Safety Plan. The program aims to safeguard water from possible contamination and maintain quality water for the consuming public at all times.

Based on the Guidelines for Drinking Water Quality (3rd edition) from WHo, this program uses a comprehensive risk assessment and management approach to consistently ensure the safety of the drinking water supply across all stages, from catchments to consumer.

Going one step further, in support of the plans of WHo and DoH to orient other water service providers in the Philippines, the model/template used for the training manual is the WSP of Maynilad. Maynilad provided assistance for the formulation of water safety plans of water districts in the Philippines. At the end of the workshops, participants were given appropriate materials to allow them to create a Water Safety Plan of their own.

5. cliMate cHange pRogRaMS

Maynilad recognizes Climate Change as a threat not just to its business but to the community at large. Hence, the Company has actively engaged in programs that seek to significantly lessen the effects of this threat.

Maynilad supports the rehabilitation and reforestation of the La Mesa Watershed, through the La Mesa Watershed Resource Management Framework Plan. Entering into an agreement with ABS-CBN Bantay Kalikasan to prepare an Integrated Watershed Management Plan for the Ipo Watershed, the Concessionaires agreed to shoulder the funding for the full implementation of the Ipo Watershed Management Plan.

In line with addressing climate change through tree planting, Maynilad, together with SMART-Philippine Long Distance Telephone Company, has agreed to plant 30,000 trees annually under the Ipo Watershed Reforestation program.

over the last three years, 50,000 have been planted annually under this program. Maynilad employees were able to cover an area of 6,600 hectares through this tree planting activity. The saplings planted had an 80% survival rate within the 40-hectare land area.

Aside from tree planting, Maynilad also organized eco-trek and nature tripping initiatives to educate more people on the importance of maintaining and protecting the watershed.

6. eMployee DeVelopMent

Maynilad believes that a motivated and empowered workforce drives business results and is key to continued growth and development. A number of employee development programs that come in the form of trainings and other interventions are implemented across the organization, all aligned to efficiency targets, health and safety objectives, improved infrastructure, and leadership development. In 2011, over 457 training programs have been facilitated with an average of 30 hours of training per employee.

Pay-for-performance incentive system is a good example of performance motivation that allows for rewarding accomplishments on an individual and group level.

Maynilad launched the Cadet Engineer Program in 2009 to attract and develop young, talented engineers into its talent pool. Through succession planning programs, the Company has been able to mold and nurture the new generation who will carry on its vision in the years to come.

7. coMMUnity oUtReacH pRogRaMS

Maynilad constantly reaches out to communities, even those outside of its coverage area, through different CSR programs with the sole aim of improving their quality of life.

The Ipo Watershed Management Plan is one such example. It propagates an institutionalized inclusion of the indigenous people living within the area. Through this project, Maynilad was able to help the indigenous people in organizing their cooperative and supporting their sapling nurseries. The Company also grants them stewardship fees for maintaining the planted trees. This has allowed them to gain additional income or livelihood.

8. SUStainaBility RepoRting

Maynilad’s critical stretch in its commitment to sustainability and sustainable development was to create the right avenue to communicate this commitment to the people who matter—its stakeholders. Publishing and disseminating a corporate sustainability report was one of the key means to get the same done. While 2011 is just a start, Maynilad believes the best is yet to come.

Engr. Joselito Riego De DiosChief Health Programme officer & oIC Water & Sanitation Division, Environmental Health officeDepartment of Health

Maynilad was the pioneer in Water Safety Plan (WSP) when they launched their WSP in 2007. Maynilad was instrumental in promoting WSP not only in Metro Manila but in other water Districts in the Philippines as well. The implementation of the WSP is geared towards sustainability to provide safe and quality water through a preventive approach by identifying risks and hazards. Thus Maynilad took the challenge by implementing its WSP even though it is not a mandatory requirement.

Maynilad together with Department of Health (DoH), World Health organization (WHo), Local Water utilities Administration (LWuA) and Philippine Water Works Association, Inc. (PWWA) harmoniously worked as a group and actively participated in promoting WSP through trainings, (coaching other water districts), technical reviews, and seminars. Engr. Francisco A. Arellano of Maynilad served as one of the key resource persons to help establish WSP by sharing his experiences and expertise in the field.

I strongly believe that the implementation of WSP is crucial for each water district in delivering their products and services. Thus, to show their commitment, DoH is pursuing to make WSP a mandatory requirement.

Having a common goal of providing safe, quality water and promoting health and safety. Hindi naging mahirap para sa amin to build strong relationships because of our dedicated partners to reach success.

Maynilad is proud to have the first Water Safety Plan to be certified by WHO and DOH (2007)

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highlightS of 2011

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ecoSWitcH aWaRDS

In 2011, Maynilad received the ECo-BoNuS certificate for its environment-friendly measures, making it one of the 72 companies that completed and passed the validation of the Green Philippines Islands of Sustainability (GPIoS) team. GPIoS, through the ECoSWITCH Awards, acknowledged us for making our operations more effective and efficient through lean strategies such as: reduction of energy consumption, management of waste, and optimization of raw materials used within the organization.

In the coming years, the Company plans to implement programs (i.e., power reduction, raw material maximization and waste minimization), and continue its stewardship to protect the environment.

Awards and Recognitions

46tH anVil aWaRDS

organized by the Public Relations Society of the Philippines (PRSP), the Anvil Awards has become a symbol of excellence in public relations in the Philippines. The awards are decided on by a distinguished multi-sectoral jury and awarded to outstanding public relations programs and tools designed and implemented within the past year.

Maynilad won two Merit Awards at the 46th Anvil Awards. These awards include:

• The company’s crisis communication efforts on “Water Discoloration in the West Zone (Specialized Public Relations Projects – one time basis: Crisis/ Disaster and Risk Communications)

• Ripples, the Official Company Newsletter (Public Relations Tools – Internal Publications: Newsletter)

inteRnational WateR aSSociation aWaRDS

In November 2011, the Samahang Tubig Maynilad (STM) program bested entries from low and middle-income countries all over the world in the International Water Association’s Project Innovation Awards Development (PIA-D).

The PIA-D recognizes excellent and innovative water and sanitation projects under the Applied Research, Hardware and Software categories. The awarding ceremony was held during the 2nd IWA Development Congress and Exhibition in Kuala Lumpur, Malaysia.

Maynilad’s STM won in the “Drinking Water – Software” category for demonstrating practical and integrated development in community participation.

The International Water Association (IWA) is a global network of water professionals that aims to promote the development and implementation of innovative and effective approaches to water management.

pHilippine QUill aWaRDS

In December 2011 Maynilad received five awards from the International Association of Business Communicators Philippines (IABC/Philippines) for its communication initiatives during the 10th PhilippineQuill Awards.

Maynilad’s efforts in reaching out to its stakeholders were given due recognition in the following categories:

• Award of Excellence for Communication Management Division – Special Events Category: “To the Beat of 6B” Customer Service Rally

• Award of Merit for Communication Management Division – Special Events Category: “Meet and Greet with the Maynilad President”

• Award of Merit for Communication Skills Division – Audiovisual Category: “Yakap” audio-visual presentation

• Award of Merit for Communication Skills Division – Audiovisual Category: “Water Journey” audio disc

• Finalist for Communication Creative Division – Publication Design Category: Maynilad’s Sewerage System Flyer

The awards were critical to validate the hard work the employees have devoted into these initiatives. They also serve as inspiration for Maynilad to do even better in its communication efforts to effectively reach out to stakeholders.

managEmEnt &CorporatE

govErnanCE

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coRpoRate goVeRnanceMaynilad adheres to the principles of transparency, accountability and fairness. We aim for the highest standards of business ethics and strive to nurture a culture of good governance within the company.

The Maynilad Corporate Governance Structure is the framework of rules, systems and processes in the Corporation that governs the performance by the Board of Directors and Management of their respective duties and responsibilities to the stockholders.

tHe MaynilaD BoaRD oF DiRectoRS

The Maynilad Board of Directors is the governing body, elected by stockholders, that exercises the corporate powers of the Company, conducts all business and controls its assets or properties. It is the Board’s responsibility to foster the long-term success of the Corporation, and to sustain its competitiveness and profitability in a manner consistent with its corporate objectives and the best interests of its stockholders.

The Board is responsible for formulating the Corporation’s vision, mission, strategic objectives, policies and procedures that shall guide its activities, including the means to effectively monitor Management’s performance.

Management and Corporate Governance

Maynilad’s Top Management Team is made up of highly skilled professionals who lead and nurture the Company to further growth. They hold specific executive duties, which are assigned to them by the Board of Directors.

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goVeRning coMMitteeS

With the entry of DMCI Holdings, Inc. and Metro Pacific Investments Corporation as Maynilad’s new owners early in 2007, good corporate governance at Maynilad became imperative, considering that both parent companies are publicly listed and have to comply with the Securities and Exchange Commission's Code of Corporate Governance.

To fulfill this imperative, the company’s Board of Directors first created the following committees which would ensure Maynilad’s compliance with the tenets of good corporate governance:

execUtiVe coMMittee

The Maynilad Executive Committee acts by majority vote of all its members on specific matters within the competence of the Board. It is composed of not less than three members, which includes the President.

The Executive Committee may exercise the powers of the Board of Directors in the management of business and affairs of the Corporation, when the Board is not in session. Their scope is limited, however, and does not supersede that of the actual Board of Directors or the stockholders.

aUDit coMMittee

The Audit Committee is in charge of assisting the Board of Directors in its responsibility of overseeing the financial reporting process, system of internal control, audit process, and monitoring of compliance with applicable laws, rules and regulations. It is also in charge for the review and evaluation of the qualifications, performance and independence of the external auditors, as well as their selection and appointment.

coMpenSation anD ReMUneRation coMMittee

This committee is responsible for the executive remuneration of corporate officers and directors. They are there to ensure that the compensation provided is consistent with the Maynilad culture, strategy and business environment.

The Compensation and Remuneration Committee is to be made up of at least three members. They are to establish a formal and transparent procedure for developing policies pertaining to executive remuneration and for improving the remuneration packages of corporate officers and the directors.

noMination coMMittee

Composed of at least three members, the Nomination Committee is responsible for reviewing and evaluating the qualifications of all persons nominated to the Board of Directors and other appointments that require Board approval. This is done to assess the effectiveness of the Board’s processes and procedures in the election or replacement of directors.

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coMpoSition anD Selection oF tHe BoaRD oF DiRectoRS

The Board of Directors is composed of eight members who have been elected by the stockholders.

The membership of the Board may be a combination of executive and non-executive directors so that no director or small group of directors can dominate the decision-making process.

The non-executive directors should possess such qualifications and stature that would enable them to effectively participate in the deliberations of the Board.

aVoiDance oF conFlict oF inteReSt

No person shall qualify or be eligible to be a member of the Board of Directors if he/she is engaged in any business which competes with, or is antagonistic to, that of the Corporation or any of its subsidiaries or affiliates.

The Board may consider the adoption of guidelines on the number of directorships that its members can hold in stock and non-stock corporations. The optimum number should take into consideration the capacity of a director to diligently and efficiently perform his duties and responsibilities.

The CEo and other executive directors may be covered by a lower indicative limit for membership in other boards. A similar limit may apply to independent or non-executive directors who, at the same time, serve as full-time executives in other corporations. In any case, the capacity of the directors to diligently and efficiently perform their duties and responsibilities to the boards they serve should not be compromised.

BoaRD ReMUneRation

The Board does not receive any per diem or honorarium for the board meetings/performance.

BoaRD MeetingS

The Board of Directors shall convene in Regular Meetings at least six times in each fiscal year. In instances wherein the Chairman of the Board is unavailable or absent, the President may fill in for him/her. The Chairman of the Board (or the President, in the absence of the Chairman) may call on a special meeting of the Board of Directors at any time, or upon the request of the majority of the directors. The members of the Maynilad Board of Directors are required to attend its regular and special meetings in person.

cHangeS in tHe BoaRDMr. Augusto P. Palisoc Jr. of the MPIC Hospital Group was appointed to the Maynilad Board in August 2011. He took the place of Mr. Edward Tortorici, who stepped down as Board Director after five years of serving the Company.

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StaKeHolDeR ManageMentFor us to truly engage our Stakeholders, it was important to identify each group and determine their needs and expectations. Communicating with our stakeholders was also a primary concern we had and hence identified the best mode of engagement for them.

SHaReHolDeRS

As of December 31, 2011, the capital structure is as follows:

DiScloSURe anD tRanSpaRency

Maynilad understands that the essence of corporate governance is transparency. We believe that transparency is the key to gain and maintain the trust of Management, our stockholders and the different people who have a stake in the company. Any material information about Maynilad is reported to MPIC and DMCI.

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EmployEE CommitmEnt:

KEy to SuStainablEdEvElopmEnt

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Employee Commitment: Key to Sustainable Development DiVeRSity anD eQUality

At Maynilad, we celebrate the diversity and uniqueness of each individual. We strive to nurture a culture which allows our employees to celebrate their differences and use their unique traits to further enhance our workforce. We want to bring out the best in our people, which is why we are firm in implementing laws and policies to protect our employees from any form of undue bias, prejudice or unfair practice. The Company is very strict to ensure that gender discrimination is not tolerated in any way. Employees’ salary and compensation are based on their performance and designations, but never on their gender.

Maynilad currently employs a workforce of 2,203 professionals who are geographically dispersed in 17 cities and municipalities. We have taken it upon ourselves to track and monitor our employee demographics to ensure that the projects and initiatives that we implement are relevant and have better impact.

of the workforce in 2011, 2% are executives, 11% are managers, 15% are supervisors and 72% are rank-and-file employees. Approximately 91% of the Company’s employees are from operations, while the remaining 9% are from the support group.

collectiVe BaRgaining agReeMent (cBa)Since its privatization in 1997, there have been two labor unions in the Company, one representing the rank-and-file and the other representing the supervisory employees. Both have shown keen support for the Company’s Management while vigilantly protecting the rights and welfare of their respective union members.

The Maynilad Water and Sewerage union-Philippine Transport and General Workers union (MWSu-PTGWo) is the sole and exclusive bargaining agent of all rank-and-file employees in the agreed bargaining unit. In 2011, the Company and MWSu-PTGWo, after two meetings, finalized and agreed on the economic benefits of the CBA for 2012 to 2013.

on the other hand, the Maynilad Water Supervisors’ Association (MWSA) is the sole and exclusive bargaining agent of the Company’s supervisory employees in the agreed bargaining unit. In February 2010, the Company and MWSA signed an agreement regarding the salaries and other benefits of the supervisors for the past two years of its CBA. The MWSA’s new CBA for the term 1 December 2011 to 30 November 2016 was signed in December 2011.

The Company, MWSu-PGTWo and MWSA are active partners of the united Nations’ International Labour organization in espousing social dialogue in the workplace.

2,203EMPLoYEES

1,695MALE

508FEMALE

eMployeeS UnDeR cBa

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eMployee HealtH & WellneSSThrough the Health Management Department under HR, Maynilad has implemented health and wellness strategies to ensure that employees are fit and healthy to perform their roles—all in compliance and well above the requirements of the DoH and DoLE in terms of health and safety. The main objective is to influence a change in the mindsets of our employees about the importance of keeping a healthy lifestyle.

Maynilad’s Health and Wellness programs for 2011 focused on the following areas:

• Health Risk PreventionMaynilad truly believes that “Prevention is better than cure”. Hence, the Company sought to reduce the health risks of its employees by partnering with a reliable pharmaceutical company to provide them and their dependents with affordable and good quality vaccinations. This is part of our vaccination Program. We also made sure that all of our employees, including the Management team, underwent the Annual Physical Examination (or APE). over the past three years, we have registered a very high compliance percentage for this initiative, with our highest being 99.75% in 2011.

• Treatment and RehabilitationTo make sure that employees get proper medical care and attention, Maynilad organized satellite clinics with roving doctors right at their workplaces. Held on a monthly basis, these projects have greatly reduced the cost of HMo utilization while minimizing production time loss. The establishment of in-house pharmacies at the Main office and at Arroceros also provided employees convenient access to affordable medication at all times. options to purchase medication through salary deduction have also helped employees financially.

• Health Education and Safety AwarenessIn 2011, we conducted 100% of the targeted 16 health forums and screening activities in all offices and facilities. Each activity received high attendance rates, which indicates a significant interest from employees to be well informed on matters of health. Ripples, the Company Newsletter, also educates our employees on a regular basis by providing regular health tips on disease prevention.

• Occupational Safety and Health (OS&H)Maynilad strictly observes the oS&H standards outlined in the Labor Code of the Philippines by implementing Rules and Regulations issued by the DoLE and keeping abreast with updates and developments on these standards in order to implement them appropriately.

The Man-Hour No Lost Time Accident (MHNLTA) was included in our GKK program to monitor accidents that happen in the workplace. This has greatly influenced the Company to divide its operating units further to measure safety performance better. As of December 2011, Maynilad achieved an MHNLTA of 4,766,024.

Maynilad also actively participates in the bi-annual National Gawad Kaligtasan at Kalusugan Award sponsored by DoLE.

eMployee BeneFitSMaynilad is committed to providing our employees with fair and competitive remuneration well above the government-stipulated minimum. The compensation process is designed to be at par with the industry standard so we can recruit, retain, engage and motivate our workforce.

Some of the key benefits that Maynilad offers its employees include:

Maynilad has engaged the services of AsianLife as the Health Maintenance organization (HMo) to serve its employees in times of sickness. This allows them to have access to the most reputable tertiary hospitals and doctors/specialists in the country. Maynilad employees are covered by AsianLife on a per-illness basis rather than the usual per-annum coverage, which allows them to get more savings when the need arises.

Maynilad employees are also entitled to a Welfare Plan, a voluntary program that will enable them to save with the assistance of the Company. Aside from this, Senior, Middle and Top Management are given the option of having a Car Plan, while Junior Management employees are entitled to a non-interest Car Loan.

We also encourage our employees to have a stake in the Company through our Employee Stock option. This grants employees an equity participation of up to 6% of the issued and outstanding stock of the Company.

The Human Resources (HR) Division is currently working on a long-term rewards-based compensation and merit structure. This will come in the form of a cash-based retention program, which aims to provide financial incentives to qualified and high-potential employees.

99.75%EMPLoYEES WHo uNDERWENTANNuAL PHYSICAL EXAMINATIoN

16 HEALTH FoRuMS

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In line with oS&H, Maynilad employees were asked to undergo the following Safety Training programs in 2011:

1. Basic Life Support/Standard First Aid2. Basic Water Course Rescue3. Basic occupational Safety and Health4. Loss Control Management5. Rubber Boats users Training6. EPR/Fire Fighting/Chemical Spill Response7. Working in Confined Spaces8. Electrical Safety9. Heavy Equipment10. ELSARoC - "Earthquake Landslide Search and Rescue orientation Course"11. High Angle Rescue12. New Employees orientation13. Chemical Safety14. Scuba Diving Course15. Donning and Doffing of SCBA – “Self Contained Breathing Apparatus”16. Personal Protective Equipment17. Safety Management Course

eMployee DeVelopMentMaynilad recruits talented, hard-working individuals into its workforce and is committed to helping them reach their full potential through professional development programs and opportunities. In 2011, a total of 457 training programs were facilitated, focused on enhancing technical, functional and leadership capabilities of the people.

In line with the recent change of the Company’s mission, vision and values, the HR Division also started organizing business planning sessions among employees from the different divisions and departments. This ensures that the employees are well informed and aligned to the Company’s goals.

• Gawad Kaligtasan at Kalusugan

Maynilad recognizes the outstanding and exemplary achievements of individuals, operating units/workplaces and projects in promoting a safe and healthy workplace through its annual Gawad Kaligtasan at Kalusugan (GKK). Maynilad is the only company that patterned the DoLE-oSHC’s Gawad Kaligtasan at Kalusugan, a biennial event and was launched on october 27, 2005 during the Annual Central Safety and Health Committee General Assembly.

Now on its 5th year GKK instill consciousness on the value of promoting workers protection and welfare, maintaining a safe and healthy workplace and implementing successful integrated quality, environment, safety and health.

Maynilad is the only company with a health and safety award patterned after the DOLE-OSHC’s GKK

The 5th Maynilad GKK Awarding Ceremony

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tecHnical SKillS tRainingThe selection and prioritization of the courses and programs to be conducted were all aligned with the Company’s five-year strategic plan. These courses were determined through the identification of critical learning gaps that affect the employees’ ability to deliver urgent organizational needs, while also facilitating their career development.

HUMan RigHtS pRotection

leaDeRSHip DeVelopMentMaynilad collaborated with the First Pacific Leadership Academy to roll out leadership development courses to select managers and supervisors. Along with our internal training group, the Academy was responsible for implementing courses, which would address the functional competencies of operations.

All the Leadership Development Courses were aligned with Maynilad’s Competency Framework, which includes core leadership competencies that are in accordance with that of the First Pacific Leadership Academy. The customized courses are offered to select executives, managers, supervisors and personnel who are identified for succession.

no cHilD laBoR anD FoRceD laBoRMaynilad complies with the principles of the Human Rights Act and the Child Labor Law. We implement trainings on the topic of human rights, which we believe will raise awareness on how our employees may maintain respect and fair treatment.

We are proud to say that Maynilad has not had any incidents of complaint or reports regarding child labor violations nor compulsory labor. We treat our employees with utmost respect and allow them to exercise their freedom, even providing them with the right to collective bargaining.

anti-coRRUptionIntegrity is very important for us and we make sure that all our areas of operations are conducted with honesty and fairness. At Maynilad, we strictly maintain a Code of Conduct with our employees. This allows us to clearly outline our expectations on how our employees should exercise honesty and fair dealings over negotiations and any other activities that they perform.

We do not tolerate corruption, bribery, extortion, and conflict of interest of any form. Any employee who is caught and proven guilty, or found to have participated in such acts, may be subject for dismissal. We work diligently to ensure that these guidelines are strictly enforced in order to protect the reputation and values of our company.

Below is the list of Technical Training courses that our employees underwent in 2011:

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EnvironmEntallEadErShip

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oUR enViRonMental planMaynilad’s commitment to the environment is stamped by its policy statement, “Maynilad is committed to excellence and leadership in protecting the environment.”

By optimizing the use of our resources, we are able to cover the three elements of the Triple Bottom Line (TBL), which is: People. Planet. Profit.

enViRonMental pRogRaMS

To fulfill our environmental policy, the Company will adopt strategic programs, which will address the following goals:

• Determine the current position of the organization with regard to the environment.

• Establish an environmental management system with structures, responsibility, practices, procedures, process and resources for implementing the policies, objectives and targets of the Company.

• Allow Maynilad to evaluate our performance against internationally accepted standards by achieving third-party certification and recognition, which would allow us to declare the Company’s environmental performance to our stakeholders. In line with this, we will maintain certifications on ISo 9001, ISo 14001 and oHSAS 18001, which we have in some facilities, with the goal of achieving the same certifications for all our facilities.

• Maynilad will adopt a management process based on the above international specifications, which will allow us to audit and review the environmental systems we have in place, and identify opportunities for further improvement.

Environmental Leadership

Maynilad will operate and manage resources in a way that best protects our environmental values, while maintaining the business goals for growth and viability. These values include the following:

• The Company recognizes that environmental management is among the highest of our corporate priorities;

• Environmental Performance is an integral part of business management;

• Environmental considerations are incorporated at the earliest possible stage of any project development;

• The Company will demonstrate responsible corporate citizenship by adhering to all environmental regulations and laws, and ability to anticipate changes to these guidelines;

• We work to ensure that all our operations comply with established international requirements.

The Company’s environmental mission is to protect the environment and conserve our water resources for future generations. We likewise recognize the need to satisfy the requirements of our key audiences and stakeholders in this mission, namely: our customers, employees, community, regulators, owners and investors.

enViRonMental RiSK DUe to cliMate cHange

There is no denying that Climate Change has—and will—make a big impact on our business. The most recent effects that we have encountered include turbid water caused by extensive flooding, and the emergence of iron and manganese in the water due to extended drought.

pRoBleMS DUe to DRoUgHt

a. Water Quantity i. Conflict on allocation ii. Reduction on supply iii. Reduction in water pressure iv. Irregular and intermittent supply v. Water tankering vi. Water rationing

b. Effects on quality on reduction of supply i. Deposition of silt ii. Back flow from leaking pipes iii. Customers resort to using booster pumps iv. Poor water handling from tankered and rationed water v. Need to regularly flush lines after interruptions vi. Need to operate ground water wells

c. Effects on quality i. Presence of manganese in raw water causing black precipitate ii. High levels of iron iii. Increased turbidity at the onset of the rain iv. Higher residual Al v. Presence of fluoride and manganese on raw water

d. Effects on quality for our new water source Laguna Lake i. Salt water intrusion ii. High total dissolved solids iii. High chlorides iv. Presence of ammonia and other volatile gases v. High algal content vi. Color, odor taste problems vii. Higher dosages of chlorine viii. Presence of precipitated metals and other disinfectant by products

ManganeSe anD iRon ReMoVal

The extended drought affected the quality and quantity of the water we provide our consumers. The increase in the levels of iron and manganese in the water made it necessary for Maynilad to predict the levels and depth of the water in the dams based on precipitation and run-off. This allowed us to create an effective procedure to implement iron and manganese treatment based on the predicted quality of water.

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caRBon FootpRint anD SeQUeStRation

In 2011, Maynilad released 42,708.84 tons of CO2e. For every liter of water produced, Maynilad emitted 0.0537 grams of CO2.

We wanted to understand the impact of our carbon emissions as a company. This led to the establishment of an integrated Greenhouse and Air Pollutant (GHG/AP) emissions accounting system, and we used this inventory to quantify our carbon emission. using our 2009 emissions as baseline data, the Maynilad management created a plan to improve energy utilization, reduce power consumption and, ultimately, cut down our carbon footprint by lessening our GHG emissions and through carbon sequestration.

eneRgy conSeRVation

As a result of the Greenhouse Gas Emissions inventory that we conducted, we were able to identify the two areas where we could make significant reductions in our energy consumption in the Company. The first of these areas is our electricity use. This led to the development of a company-wide program to lessen our electricity use significantly.

To help us with this, Maynilad sought the verification of third-party auditors from TÜv Rheinland to look at our GHG quantification and reporting initiative. This led to our ISo 14064:2006 certification in 2011—the first ISo certification of its kind in the Philippines. With this inventory system in place and the Company’s baseline emissions established, we were able to determine our areas for further improvement.

In 2011, our IMS facilities, such as La Mesa Treatment Plants 1 and 2, Dagat-Dagatan Sewage and Septage Treatment Plant and Tondo Sewage Pumping Plant were given objectives, Targets and Programs (oTPs), which are focused on reducing electricity consumption.

We started by actively engaging our employees and educating them on how they can play a significant role in reducing electricity consumption. These following initiatives were implemented in the North Caloocan Business Area and generated a 7,162 kw-hr decrease in our energy consumption for 2011:

• Maynilad educated its employees about “vampire loads”, also known as stand-by power or phantom load, and provided them with constant reminders regarding un-plugging appliances that are not in use, particularly towards the end of the work shift.

• Employees were reminded to switch off the lights and office equipment that are not in use, especially during lunch breaks (12 P.M.–1 P.M.). This policy is also implemented in office rooms that are not in use, even the rest rooms.

• Office Air Conditioning Units (ACUs) are only switched on during operational hours (between the hours of 9:00 A.M. to 4:00 P.M.) – instead of the original practice of having the ACus running from 8:00 A.M. to 5:00 P.M.

• Increasing the operating temperature of ACUs by 1 - 2C

• Implementing a “No Air-Conditioning Policy” during weekends and holidays.

MaynilaD gReen teaM

The GHG team a.k.a. Maynilad Green Team manage the company’s greenhouse gas emissions and the benefits of managing air pollutants. An Inventory Management Plan (IMP) was prepared by the Maynilad Green Team under the project in 2011 because it is essential in ensuring the sustainability of the inventory. It lays out the details of the inventory such as the boundaries, calculation methodologies, data management process flows, management roles, auditing and verification and other important details. With 2009 as the baseline year, Maynilad will continue with its annual GHG inventory and program in the coming years.

The first company in the Philippines with certified carbon footprint (ISO 14064:2006)

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QUality MonitoRing actiVitieS

As part of Maynilad’s compliance to the regulations of Environmental Compliance Certificates (ECCs) issued by Department of Environment and Natural Resources (DENR), its commitment to the Environmental Management Plan (EMP) and intent to continuously improve, several key monitoring activities have been facilitated periodically and analyzed for developments.

WateR QUality MonitoRing

Maynilad is assisting DENR in monitoring and assessing the water quality of Manila Bay. It has maintained 5 monitoring stations/sampling points that have been monitored since the early 80’s by Metropolitan Waterworks and Sewerage System (MWSS). In 2011, Maynilad conducted samplings every two months last January, March, May, July, September and November. Analysis is made for various parameters particularly Biochemical oxygen Demand (BoD), Total Suspended Solids (TSS) and Heavy Metal Contents. Samples were taken for 1 meter and 10 meters below water level. The results were given to DENR and consolidated by Manila Bay Coordinating office (MBCo).

Manila Bay MonitoRing pRogRaM

Maynilad’s involvement with water quality monitoring of the Manila Bay is something that we have been doing since 1999 through the MWSS’ Manila Bay Monitoring Program (MBMP) as part of its pro-active measures to determine levels of changes in the water quality resulting from the operations of the outfall. MBMP covers the coastal zones in Manila, Parañaque and Cavite. This program covers bi-monthly monitoring for physical, chemical and biological quality of water at Manila Bay to ensure its commitment in protecting the environment.

We collaborate with both public and private agencies to treat wastewater before releasing it to the bodies of water within our concession area.

coaStal clean-Up

Maynilad demonstrated their commitment to the environment by joining the ocean Conservancy’s International Coastal Clean-up 26th Anniversary last September 2011. Maynilad participated and volunteered together with other institutions such as public and private businesses, schools and local government units in the coastal clean-up along Manila Bay/Cavitex. This event contributed to our country, the Philippines having ranked as 2nd in the world in terms of number of volunteers and amount of trash collected during the Coastal Clean-up, amounting to 1,069,443 pounds of trash with 114,418 volunteers along 149 miles of coastal distance that was clean-up to be trash free.

ReFoReStation oF ipo WateRSHeD

This is the first reforestation project which has institutionalized the inclusion of indigenous people in the program. The Company (i) helps the indigenous people organize their cooperative, (ii) supports their sapling nurseries, and (iii) awards stewardship fees for maintaining the planted trees. This has enabled the indigenous people to gain additional income or livelihood. The Company, together with SMART-Philippine Long Distance and Telephone Company and its other partners, has an annual target of 30,000 trees to plant. In the last three years, 50,000 trees were planted annually under the reforestation program. The IPo Watershed consist of 6,600 hectares in area which has been reforestrated jointly by MWSS & DENR. An 80% survival rate was also recorded within the 40-hectare land area. Aside from tree planting, other activities include an eco-trek and nature tripping with a cause to protect the watershed. This watershed management program is also part of the carbon sequestration activity, a response to the adaptation program on climate change.

50,000 trees are planted annually

ReforestationThis is the first reforestation project which has institutionalized the inclusion of indigenous people Dumagats in the program.

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The average quality of wastewater for 2011 for each facility is also indicated in terms of biochemical oxygen demand (BoD), chemical oxygen demand (CoD), total suspended solids (TSS), and amount of total coliform.

WateR conSUMption

Statistic Worldwide

• Nearly 600,000 volunteers joined together for ocean Conservancy's 2011 International Coastal Cleanup. Here's what they found. (Worldwide)

WaSte ManageMent

There are two main types of waste resulting from the operation of Maynilad’s wastewater treatment facilities: liquid and solid wastes.

Liquid waste or wastewater is the effluent that comes from the Imhoff tank (located in Project 7, Quezon City) and discharged to Dario/Culiat Creek. Since the treatment done in the Imhoff tank is not designed to meet the effluent standards set by the government, the effluent produced is thus considered liquid waste. one of the future projects of Maynilad is to address this by upgrading the Imhoff tank into a full-blown sewage

Reference: www.oceanconservancy.org

treatment plant that is able to comply with effluent quality standards.

Solid wastes are the sludge collected from the sanitation operations (desludging of septic tanks) and treated in the Dagat-Dagatan Sewage and Septage Treatment Plant. In 2011, Maynilad dewatered and treated 6,681 m3 of sludge. The resulting product of the treatment of solid wastes is called bio-solids. A percentage of these bio-solids are brought to a fertilizer processing plant, managed by MAPECoN, a third-party hauler, and the rest are open for hauling (LGus, other public and private groups, etc.)

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HaZaRDoUS WaSte

under Republic Act 6969, also known as the “Toxic Substances and Hazardous and Nuclear Wastes Control Act of 1990” and its Implementing Rules and Regulations, all facilities and establishments that generate hazardous wastes are required to secure a hazardous waste generators ID and transact only with DENR-accredited transporters of hazardous waste.

Maynilad is an accredited transporter of hazardous waste. Each of our registered vehicles will only transport the generated hazardous waste coming from different facilities and satellite offices of

aiR QUality anD noiSe leVel

Since 2000, Maynilad has been conducting air quality monitoring on select project sites to comply with ECC requirements. Similarly, air quality analysis in the main office (Balara) and other premises is also undertaken. To date, Maynilad complies with the air quality standards set forth in the Clean Air Act.

Maynilad has also been consistent in meeting the DENR’s standards with regard to noise level in all its facilities.

Maynilad and store it at the temporary storage facility of hazardous waste located in Balara, Quezon City.

Dagat-Dagatan Sewage and Septage Treatment Plants, Tondo Sewage Pumping Plant, La Mesa Water Treatment Plants 1 and 2, North Caloocan Business Area, and the Main office in Balara have their own Hazardous Waste Generators ID issued by DENR-National Capital Region (NCR).

All other facilities of Maynilad will have its own hazardous waste id number.

otHeR WaSte geneRateD FRoM oFFice opeRationS

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Community EmpowErmEnt

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Through the years, Maynilad has pursued innovative CSR initiatives that promote poverty alleviation by providing marginalized communities access to affordable, potable water, as well as livelihood opportunities and avenues for community development.

These CSR initiatives helped the Company strengthen its collaboration with the people, government and other local and international partners, for maximum impact not only in the communities that we serve but in the entire nation.

BetteR liVing FoR coMMUnitieS pRogRaMS

By providing these STM communities with clean water, the members of the community now enjoy improved health and sanitation conditions in their neighborhood. This also resulted in additional savings for the beneficiaries of the project, since they no longer need to purchase from private vendors who sell overpriced water or have to walk long distances to gather water.

In November 2011, the STM program bested entries from low and middle-income countries all over the world in the International Water Association’s Project Innovation Awards Development (PIA-D). The awarding ceremony was held during the 2nd IWA Development Congress and Exhibition in Kuala Lumpur, Malaysia, where Maynilad received the award for the Drinking Water – Software category for the Maynilad STM program.

SaMaHang tUBig MaynilaD (StM)

The STM program was born from the need to address the problems of water inaccessibility and irresponsible use of water in Maynilad’s concession area. Through this program, residents of urban poor communities are organized into cooperative-based water associations that are capable of managing their own water supply.

Maynilad provides values formation and technical trainings to the members who run the community bulk water system. This helps us in managing right-of-way issues, lack of land ownership titles, and prevalence of water retailer syndicates, which usually hinder these communities from gaining access to potable water.

Since the pilot STM community was established in 2009 at Barangay 123, Tondo, Manila, Maynilad was able to replicate the program in other communities in its concession area. As of 2011, STM helped 2,433 households from 11 communities, five of which were formed in 2011.

KapWa

Part of the profits generated by the STM also serves as a community fund for livelihood projects. Through the help of Maynilad, the women of STM-Tondo successfully launched Kapwa, a line of hygiene and homecare products which the Company helps develop and market.

Kapwa is derived from the Filipino value of pakikipagkapwa-tao, or being one for the other, which the members of STM-Tondo demonstrated when they were united by the mission of providing safe, affordable water.

Seeing the potential of Kapwa, the Department of Science and Technology assisted the venture by providing soap-making training to the members and donating PhP200,000 worth of mixing equipment. As a result, STM-Tondo is now a proud supplier of cleaning supplies for the Department of Public Works and Highways-NCR. Maynilad also buys their products as corporate giveaways.

Kapwa demonstrates how the STM program can expand to other community development initiatives. Maynilad hopes to achieve the same thing for other STM communities.

Community EmpowermentSeaSHell FaRMeRS coopeRatiVe

Maynilad forged a partnership with the city government of Bacoor, Cavite to establish a cooperative which will serve the impoverished fisher folk of the city. Through this partnership, the Company donated PhP1 million as seed capital to the Mamayan Para sa Lambat at Dagat Multi-Purpose Cooperative to help revitalize the city’s mussel industry.

Since its launch on June 4, 2011, the cooperative has implemented projects such as micro-financing for small-time mussel farmers, setting up a store with supplies sold at retail prices, and conducting management and technical trainings for the members.

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lingKoD eSKWela (Sanitation Facilities for Schools)

Since its launch in 2008, the Maynilad Lingkod Eskwela program has reached out to some 185,000 students from 46 public schools in the West Zone concession. The program promotes good health through proper hygiene, and involves the installation of drink-and-wash stations in campuses, as well as the clean-up of water reservoirs or tanks and regular sampling of drinking water to check its quality. Maynilad also offers free desludging of the schools’ septic tanks to ensure proper sanitation.

Likewise, Maynilad engages the students in discussions that aim to raise their awareness on environmental conservation and the importance of water for health and sanitation.

pRoMoting eDUcation anD FoSteRing DeVelopMent

Maynilad actively partners with the Department of Education (DepEd) in its back-to-school initiatives, which tie up government and private volunteer efforts to ensure the orderly opening of classes.In support of the DepEd’s oplan Balik Eskwela program, Maynilad volunteers cleaned and refurbished classrooms in Calalay Elementary School in Quezon City. Maynilad also constructed a drink-and-wash station in the school to improve the health and sanitation conditions of students and teachers. under the same program, we partnered with Tv5 for the oplan Sigla Eskwela in Malipay Elementary School in Bacoor, Cavite on June 14, 2011.

Maynilad also participated in the Balik Eskwela Command Conference by conducting water quality tests in the Lingkod Eskwela schools and suspending pipe laying and excavation works on roads near schools during the week of the school opening. This strengthened our commitment to intensify our water and health awareness campaigns in schools.

Maynilad partnered with uSAID on october 5, 2011 for the Global Handwashing Day, which was held in Calalay Elementary School. Maynilad taught schoolchildren the value of handwashing and distributed handwashing kits during the event.

inFRaStRUctURe DeVelopMent pRogRaMSReFURBiSHeD coMpUteRS

Maynilad donated eleven refurbished desktop computers to some of the neediest schools in the West Zone. These public schools include Malipay Elementary School, the fire-hit Cavite High School, Payatas Elementary School and Juan Luna High School.

Desktop computers were also donated to the offices of STM Tondo, STM Pook Pag-asa, the Mamamayan para sa Lambat at Dagat Multi-Purpose Cooperative, and the New Bilibid Prison.

pUtatan coMMUnity engageMent

Maynilad created a comprehensive program for Putatan, Muntinlupa, which is where the newly completed Putatan Water Treatment Plant is located. This program includes projects focused on helping the residents of Barangay Putatan, Muntinlupa, such as the implementation of Lingkod Eskwela in four of the poorest public schools in the barangay. We also constructed the Maynilad Day Care Center and rehabilitated the aging San Guillermo Church, as well as the Saguibas basketball court that was affected by the construction of the Putatan Water Treatment Plant.

The Company worked closely with barangay officials and volunteers in carrying out these infrastructure projects, as well as in the installation of street lights and drainages, and the upgrade of the sidewalk around the plant to improve security in the area for both Maynilad employees and Barangay Putatan residents.

MUSeo paMBata leaRning ReStRooMS

In November 2011, Maynilad signed an agreement with Manila Mayor and concurrent Museo Pambata Chairman Alfredo Lim and Museo Pambata President and CEo Nina Lim-Yuson to aid in the refurbishment of the Museum’s wash rooms.

Aside from fixing the restrooms for the hundreds of children that visit the museum every day, Maynilad also installed “water education” walls, which illustrated the importance of protecting our water resources.

Maynilad believes that Museo Pambata is a key learning establishment for the Filipino youth, and this is what prompted us to help the museum and the Manila local government in improving its facilities while imparting our advocacy to more children.

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VolUntaRy SUppoRt pRogRaMS

lingKoD ginHaWa DiSaSteR RelieF

Maynilad’s Lingkod Ginhawa serves as Maynilad’s on-call relief arm for disasters. Through this, we are able to aid families and communities displaced by calamities such as typhoons, floods and fires.

In 2011, we distributed relief goods and water jugs to a total of 2,460 families affected by fire incidents at A. Leongson St., San Roque in Navotas City; Barangays 158, 330 and Isla Puting Bato at Tondo in Manila; Zapote I, Talaba v and Talaba vI, San Nicolas 3 (Proper), Magdiwang, Queensrow West, Kawayanan and Zapote 5 at Bacoor City in Cavite Province; and Barangay Zapote in Las Pinas City.

Typhoons Pedring, Quiel and Sendong brought flashfloods that compelled Maynilad to reach out beyond its concession area. The Company provided drinking water through tankers, water jugs, bottles, and its portable water treatment equipment to affected residents of Pampanga, Bulacan and Cagayan de oro in Mindanao.

cHaMpioning WateR, HealtH anD tHe enViRonMent

A total of 11,884 families hit by Typhoons Pedring and Quiel received assistance from Maynilad. We gave out water jugs to 1,390 families located in Navotas and Baseco, Manila; San Luis, Sto. Rosario, San Carlos, San Sebastian, Sto. Tomas, Sta. Cruz Poblacion, Sta. Lucia, Sta. Rita and Apalit, Pampanga. our tankers also delivered potable water to 9,344 families in San Luis, Pampanga, while 1,150 families in Paombong and Hagonoy, Bulacan, benefitted from 16,750 liters of treated water produced by our two portable water treatment plants.

Typhoon Sendong prompted Maynilad to send its portable water treatment equipment to Misamis oriental where it provided 16,580 liters of clean water for 1,030 families. We were able to donate 2,000 pieces of 1.5-gallon jugs, 300 pieces of 5-gallon water jugs, and several items of used clothing to the calamity victims.

All in all, Lingkod Ginhawa provided relief to 15,214 families in 2011.

To build better relationships with various communities that we serve, Maynilad participated and volunteered in over 145 events for 2011. We served as the hydration partner in 5 medical-dental missions, 17 school events, seminars and conventions, 25 running events, and 28 other sports and cause oriented events such as tree planting and coastal clean-up drives.

Maynilad’s CSR initiatives also support the youth through sports events that promote good health and active lifestyle by organizing basketball clinics in various areas like Muntinlupa, Parañaque and Manila. These provided information to the participants on the basics of sports while emphasizing the importance of maintaining a healthy mind and body.

on March 22, 2011, Maynilad led the celebration of the World Water Day in the Philippines, in partnership with the DENR. During the event, we rallied around 2,000 people to march for two kilometers, some even carrying jugs of water, to experience the plight of thousands of Filipinos who have to travel long

distances to fetch clean water. The activity also highlighted the need for strong government action to stop the deaths of children due to lack of access to clean water, and shed light on how clean water is imperative to improving the lives of countless children in the country.

Maynilad continued the advocacy started in the World Water Day through the Philippines Bikes for Water, which was carried out by the Le Tour Filipinas from April 16 to 19, 2011. The multi-staged cycling event ran across Manila, Bataan, Zambales, Pangasinan and Baguio, and highlighted the compelling need of 16 million Filipinos for access to safe water.

19th PWWA International Conference and Exhibition

70 71


INCLUSIVENESS IN SERVICES

Mindful of its critical role in reaching out to underserved communities, Maynilad has undertaken significant measures to make water more affordable for less-privileged customers through substantial discounts.

Lifeline customers, whose consumptions do not exceed 10 cubic meters (cu.m.) per month, receive a 38% discount off their monthly water bill from the Company. Maynilad’s lifeline customers constitute roughly 20% of the residential customers.

Senior Citizens are also entitled to a 5% discount from Maynilad. This discount is on top of the discount enjoyed by lifeline customers. Aside from this, government-owned/non-profit senior citizen centers and homes are also given a 50% markdown. This privilege is extended for close to 1,423 accounts.

Maynilad extends preferential rates to small businesses, supporting their existence and growth. We provide discounts to semi-business customers who usually operate out of homes such as sari-sari stores, repair shops and small cottage industries.

Through Maynilad’s assistance, these enterprises pay residential charges for the first 10 cu.m. of water they consume, which is significantly lower than the semi-business rate.

As part of the commitment to support institutions that provide vital services to the public, Maynilad offers rate reclassification, from Commercial to Semi-Business, to the following establishments:

• Public preparatory, elementary, secondary and tertiary schools managed by LGus

• Public hospitals managed and operated by LGUs

• Jails (excluding detention centers within police stations and military camps)

VOUNTARY BLOOD DONATION PROGRAM

Maynilad employees play an active role in the Company’s CSR efforts. one of these is the bi-annual voluntary blood donation program, which is organized in partnership with the Philippine Children’s Medical Center (PCMC), Cardinal Santos Medical Center, and our Lady of Lourdes Hospital. During the event, some of the employees were recognized and touted by PCMC as “galloners” due to their regular donation of life-saving blood.

All business areas have also reduced water application fees for selected depressed areas, especially in expansion areas in North Caloocan, Fairview-Commonwealth, Novaliches-valenzuela, Muntinlupa-Las Pinas and Cavite.

Maynilad Water Services is working with local communities to change traditional livelihood practices that contaminate catchment water - World Health organization (WHo)

3 Blood Donating Activities

162 Blood Donors (Employees)

72,900 cc of Fresh Whole Blood

72 73


moving towardS a CuStomEr-CEntriC

buSinESS

74 75


As of the end of 2011, the Company’s customer base totaled 1,005,350 water service connections. of these, 90% are residential customers consuming over 280 million cubic meters (MCM) of water from January to December 2011.

The table below summarizes the number of customers per category and their respective billed volumes for 2011:

In addition to supplying potable water, Maynilad also provides qualified customers with sewerage services.

cUStoMeR SatiSFaction

one of the significant changes that we made in 2011 was moving our Customer Service Department from the operations Group to the Business Area (BA) operations Division. The Company felt that this merge was necessary to efficiently facilitate the needs of its customers, which are ultimately resolved at the BA level.

Through this new merge, Maynilad is now able touch base with its customers in two ways: • BA zone visitations • Customer Care Specialists.

To improve the quality of services that we provide through our BAs, we made sure that our BA offices are geographically accessible, and that our employees are equipped with the technology needed to answer inquiries, resolve complaints and process requests efficiently.

Moving Towards a Customer-Centric Business

BA operations also conducted a policy orientation for its 670 personnel to ensure that they are updated on revisions to Company policies, particularly those that are related to the delivery of service to customers.

Within the period of 2007 to 2011, the Company received 225,124 customer service-related complaints, which were related to complaints regarding water quality, leaks, water pressure, water availability and street hazards. These complaints were received through the Customer Service Information System (CSIS). of these complaints, 220,264 were resolved within a 10-day timeframe, marking a resolution rate of 98%. This is higher than the Company’s target resolution rate of 95%.

cUStoMeR caRe iMpRoVeMentS in 2011

MaynilaD Hotline 1626

In 2008, we engaged SPi Global (formerly ePLDT ventus) to take over our call-management operations. The Maynilad Hotline was able to accommodate this year a total of 712,302 calls, of which 93% were answered within 30 seconds. All calls received through the hotline were logged and directly endorsed to the concerned office or BA for immediate resolution.

our upgrade to the Customer Service Information System (CSIS) made it easier for SPi Global and our implementing offices (BAs, Wastewater Management, Central NRW and Customer Care) to access our customer database. The system is capable of logging complaints from customers, routing complaints to the concerned operating unit in real time, and providing irate customers with instant feedback.

text tUBig

The Company continues to implement initiatives that utilize new technologies that would enhance service delivery. one of these is Maynilad’s infoboard service called “Text Tubig”. This service allows Smart and Talk ‘n Text subscribers to receive relevant information such as water advisories, traffic advisories and water tips via short message service (SMS).

Since its launch in 2010, the number of registrants has increased from 6,995 in 2010 to 22,354 in 2011—a 69% increase. Text Tubig enabled us to provide more communication channels for our customers, easing the load of calls received by our 24-hour Maynilad Hotline.

agaD BaSa BiliS iMpRenta (ReaD-anD-Bill pRoject)

In 2011, Maynilad successfully migrated its billing system to the Read-and-Bill (R&B). Through the migration to this new system, our outsourced meter readers are able to issue a Statement of Account (SoA) to Maynilad customers on site, immediately after their water meters area read.

This new system reduced the incidence of delayed issuance of SoAs and allowed us to address our customers’ bill-related concerns more quickly.

The new R&B system paved the way to a better billing experience for customers, and Maynilad aims to make bills payment even more convenient in the future. As of 2008, we decided that the BAs will no longer be handling bill payments. We developed partnerships with a number of reputable payment facilities, who could accept bill payments for Maynilad. This led to a reduction in bill payment-related complaints and also gave our customers more options on how and where to pay their bills.

WateR SeRVice ReStoRation

To lessen the turnaround time for customer service concerns and service restoration, Maynilad adopted the advanced Microsoft Customer Relationship Management (CRM) software implementation technology in its operations. It is meant to help the Company cope with unscheduled service interruptions due to emergencies or disasters by connecting operations personnel, maintenance engineers and zone management teams in the BAs to make them readily available for dispatch at all times.

The following initiatives were implemented in 2011 to further enhance services to customers.

76 77


cUStoMeR SeRVice policieS

Maynilad’s Customer Service policies and procedures are derived from the MWSS-Ro Implementing Rules and Regulations (IRR). In line with our commitment to excellence, we are consistently reviewing and developing these policies and procedures, making sure they are aligned with the Company’s goals. In 2011, Maynilad improved on 12 existing operational policies, which allowed us to improve our average resolution rate to 99% and 98% for service and bill-related complaints.

cUStoMeR SatiSFaction toolS

Maynilad invested in a Front-end Tool upgrade, which integrates applications used in answering calls, creating accounts, reconnecting accounts, and resolving complaints into one system.

As a result, more customer management information is now available using the advanced CSIS, which has the following objectives:

(a) To establish service level metrics that will improve complaints’ resolution rate;

(b) To implement an escalation process based on customer classification, nature of complaint and geographical coverage;

(c) To provide a tool for outsourced contact center agents;

(d) To implement a customer relations management system that is flexible in handling changes in business processes;

(e) To improve first-call resolution and proactive water service disruption notifications; and

(f ) To improve the routing of complaints to the appropriate implementation team via SMS.

pRoactiVe cUStoMeR cReDit ManageMent

Maynilad formed a dedicated group of employees to monitor service accounts and make calls to customers to advise them about payment due dates. This helped reduce service disconnections and assisted in the Company’s payment collection efforts.

Meanwhile, the customer relations activities of the BAs’ Zone Management Teams help in nurturing personal relationships with customers.

cUStoMeR SatiSFaction Rating

Maynilad has been proactive in acquiring input and feedback from its customers. To retain data accuracy, we have outsourced the gathering of customer inputs to a dedicated team and third-party consultant. our Customer Satisfaction rating is acquired through an In-house and outsourced Assessment.

The In-house Assessment involves the daily gathering of feedback through outbound calls. This data is consolidated on a monthly and quarterly basis and analyzed so we can measure the effectiveness of our strategies and realign programs to effectively address short-term and long-term customer service concerns.

Customer satisfaction is also gauged based on feedback obtained from customers who call the Maynilad Hotline 1626. To determine if action was taken within the required turnaround time, call-outs are made to customers after the resolution time of the activity. The BAs also have self-administered survey forms for soliciting feedback from visiting customers.

99% Service-related complaints 98% Bill-related complaints

Average Resolution

Rate

712,302Calls answered

93%Answered within 30 seconds

78 79


Testimonials2011 was truly a pivotal year in the history of Maynilad. Everything that we have achieved this year allowed us to lay the groundwork for even better performance in 2012 and beyond.

our efforts in 2011 allowed us to shift our perspective to focus on the elements of the triple bottom line (TBL), also known as People, Planet and Profit. These three pillars capture the values and criteria that we want to use to measure our organizational success.

peopleAs part of the Company’s five-year strategic plan, Maynilad invested in Employee Training and Development as a means to empower its employees to take more active roles in ensuring a successful future for the company. Seeing the success that we had in this endeavor, the Company wishes to develop this area further through the Maynilad Water Academy and its Succession Planning program.

on tHe RoaD to BecoMing a tHoUgHt leaDeR

By the end of 2017, the Company aims to complete 450 seminars, trainings, workshops and courses through the Maynilad Water Academy, also known as the Academy. The purpose of the Academy is to develop structured benchmarking programs, which will educate Maynilad’s human capital, the public and key stakeholders.

For 2012, the Academy will be focusing on training programs in the fields of Non-Revenue Water management, Water Supply operations and Program Management, and Wastewater Management.

To promote awareness about the Academy and improve its resources, Maynilad will strengthen its partnerships with local and international communities, government agencies, non-government organizations, private corporations and academic institutions. The scope of these partnerships will focus on water and sanitation, knowledge management, research and development, children, youth, gender and the environment.

By 2017, the Maynilad Water Academy will become a recognized training institution.

Moving ForwardMeSSage FRoM Hon. RoMeo RaMoSMayoR oF caVite city

“Napakalaki ng naging bahagi ng Maynilad sa aking panunungkulan bilang mayor ng lungsod at sa aking mga nasasakupan. We are assured of our supply for most parts of the city. Ang laking ginhawa na hindi na namin kailangan gumamit ng pump upang itulak ang tubig sa loob ng bahay. Tinigil na rin namin ang pag-imbak ng tubig sa mga tangke na nagiging sanhi ng pagapekto sa kalidad ng tubig. Ang tubig ay nakakaabot kahit sa ikalawang palapag ng bahay. Ang tubig ay hindi na rin galing sa poso, at makikita mo ang malaking improvement sa water quality. Ang matagal ng problema sa fluoride ay na-resolve na rin. Hindi na kinakailangan pang bumili ng tubig sa refilling station....”

Maynilad is working with the indigenous Dumagat Community to plant trees and address the problem of illegal logging.

“Ako po ay katulong sa pag i-inspeksyon ng lahat ng mga punong itinanim. Maganda po ang pakiramdam ko pag ako ay nakakatulong sa kalikasan at lumuluwag ang aking kalooban.”

Rogelio CruzVillage Chief, Dumagat Community

80 81


SUcceSSion planning

As part of our mission to further develop our talented and hard-working employees, Maynilad will continue to provide education and training to prepare them for future leadership posts.

The organizational refocus that we undertook in the last five years allowed us to eradicate redundant tasks and responsibilities, and create specialized departments and divisions. Through this restructuring, we were able to identify the strengths of our employees and move them to departments where they can grow significantly in their roles for the Company.

Maynilad will further develop a succession planning program for employees in 2012 and in the years to come.

nURtURing a cUltURe oF cUStoMeR SeRVice

our customers are also one of our top priorities in 2012. Maynilad strives to improve its customer service further—reason why the Company intends to have all BA offices, as well as its Customer Care Department, ISo certified.

The Company plans to install an Interactive voice Response System (IvRS) in 2012. This will allow customers to choose the appropriate service from a menu, thereby decreasing waiting time and ensuring higher first-call resolution rate by directing calls to the right department every time.

pRoFitIn 2012, Maynilad will continue its expansion efforts to connect more people to the network, especially those living in the Cavite area where water availability is still only between four to eight hours a day.

To further enhance the company’s efficiencies, Maynilad’s Information Technology Services (ITS) Division will reconfigure certain SAP modules under the Arangkada: SAP Assessment Project. This project involves a detailed analysis of the company’s SAP-related business processes—from operations, to administrative tasks, to human resources management, etc.—to identify other SAP modules that may be used by the company.

once completed, we expect the upgrade to result in more productivity due to the automation of more tasks, reduction of paper use, easier transactions and more convenient access to data through SAP. This will allow Maynilad employees to become more effective in providing quality services to our customers.

planetThe CQESH Division continues to lead Maynilad’s environmental and sustainability initiatives. It seeks to position the Company as the environment cause champion of the industry through the establishment of IMS. After helping the Company achieve triple ISo accreditations for its major facilities, CQESH has already begun lining up other offices for accreditation in 2012. These offices include Central Laboratory and the Alabang Sewage Treatment Plant.

The Logistics Division, which had been successful in its Re-Fleeting program in 2011, seeks to construct an additional satellite warehouse, finish the renovation of offices, and get an ISo certification for Socea Bonna Warehouse.

The creation of this report has opened the eyes of the Company and its employees to our areas for improvement. We wish to continue the practice of measuring and disclosing Maynilad’s commitment to sustainability, which is why we will continue our Sustainability Reporting initiative through our CQESH Division’s lead. In 2012, we aim to have more Key Performance Indicators to report and receive a higher level of standard in the industry and the country.

We will continue our Climate Change programs and develop new initiatives that will help us in lowering our energy consumption and GHG emissions.

But the biggest shift that we have undertaken is in incorporating sustainable practices into the core of our business operations. Through the organizational restructuring of the Company, we were able to create departments and divisions that would help in mainstreaming sustainability into our processes. This will make it easier for us to monitor and improve our environmental impact in the future.

Maynilad’s commitment towards sustainability allowed us to further understand the impact of our operations on the environment. This is precisely why we continue to push our defined limits and set the benchmark for sustainability in the country.

WaSte WateR tReatMent FacilitieS

Part of Maynilad’s commitment to sustainability is through environmental protection. In collaboration with both public and private agencies, Maynilad is putting its efforts into cleaning up, restoring, and preserving Manila Bay by treating wastewater before releasing it to the bodies of water within its concession area.

The Bahay Toro STP, located at Agnus Dei College Bahay Toro, Quezon City is one (1) of the fifteen (15) waste water facilities in the San Juan River Basin Project of Maynilad. It has a Modified Activated Sludge technology with a capacity of 13,400 CMD to serve of population of 103,000.

San Antonio STP - Moving Bed BioreactorPaltok STP - Moving Bed Bioreactor

Tandang Sora STP - STM AerotorBahay Toro STP - Modified Activated Sludge Process

84 85


GRI Index SheetProfile Disclosure Description

Page Number Section

1.1 Statement from the most senior decision-maker of the organization. Page 4 Message from the Chairman

1.2 Description of key impacts, risks, and opportunities. Not Applicable

Maynilad Does not want to disclose this information in this report.

Profile Disclosure Description

Page Number Section

2.1 Name of the organization. Page 11 About Maynilad

2.2 Primary brands, products, and/or services. Page 11 About Maynilad

2.3

Operational structure of the organization, including main divisions, operating companies, subsidiaries, and joint ventures.

Page 11 About Maynilad

2.4 Location of organization’s headquarters. Page 93 Contact Details

2.5

Number of countries where the organization operates, and names of countries with either major operations or that are specifically relevant to the sustainability issues covered in the report.


2.6 Nature of ownership and legal form. Page 38 Shareholders

2.7

Markets served (including geographic breakdown, sectors served, and types of customers/beneficiaries).


2.8 Scale of the reporting organization. Page 40 Employee Commitment

2.9Significant changes during the reporting period regarding size, structure, or ownership. Page 2 About the Report

2.10 Awards received in the reporting period. Page 28 Awards & Recognition in 2011


Page Number Section

3.1 Reporting period (e.g., fiscal/calendar year) for information provided. Page 2 About the Report

3.2 Date of most recent previous report (if any). Page 2 About the Report

3.3 Reporting cycle (annual, biennial, etc.) Page 2 About the Report

3.4 Contact point for questions regarding the report or its contents. Page 93 Contact Details

3.5 Process for defining report content. Page 3 Materiality Analysis

3.6Boundary of the report (e.g., countries, divisions, subsidiaries, leased facilities, joint ventures, suppliers). See GRI Boundary Protocol for further guidance. Page 2 About the Report

3.7State any specific limitations on the scope or boundary of the report (see completeness principle for explanation of scope). Page 2 About the report

3.8

Basis for reporting on joint ventures, subsidiaries, leased facilities, outsourced operations, and other entities that can significantly affect comparability from period to period and/or between organizations.

Not Applicable

No Subsidiaries / Joint Ventures of Maynilad are covered in the report

3.9

Data measurement techniques and the bases of calculations, including assumptions and techniques underlying estimations applied to the compilation of the Indicators and other information in the report. Explain any decisions not to apply, or to substantially diverge from, the GRI Indicator Protocols. Page 3 Materiality Analysis

3.10

Explanation of the effect of any re-statements of information provided in earlier reports, and the reasons for such re-statement (e.g.,mergers/acquisitions, change of base years/periods, nature of business, measurement methods).

Not Applicable

This is the first Sustainability Report of Maynilad

3.11Significant changes from previous reporting periods in the scope, boundary, or measurement methods applied in the report.

Not Applicable

This is the first Sustainability Report of Maynilad

3.12 Table identifying the location of the Standard Disclosures in the report. Page 84 GRI Content Index

3.13Policy and current practice with regard to seeking external assurance for the report. Page 90 GRI Application Check


Page Number Section

4.1

Governance structure of the organization, including committees under the highest governance body responsible for specific tasks, such as setting strategy or organizational oversight. Page 32 Board of Directors

4.2Indicate whether the Chair of the highest governance body is also an executive officer. Page 32 Board of Directors

4.3

For organizations that have a unitary board structure, state the number and gender of members of the highest governance body that are independent and/or non-executive members. Page 32 Board of Directors

4.4Mechanisms for shareholders and employees to provide recommendations or direction to the highest governance body. Page 36

As Maynilad is not a publicly listed company, this is not mandatory for

them.

4.5

Linkage between compensation for members of the highest governance body, senior managers, and executives (including departure arrangements), and the organization’s performance (including social and environmental performance). Page 36 Board Remuneration

4.6Processes in place for the highest governance body to ensure conflicts of interest are avoided. Page 36 Avoidance of Conflict of Interest

4.7

Process for determining the composition, qualifications, and expertise of the members of the highest governance body and its committees, including any consideration of gender and other indicators of diversity. Page 36

Maynilad Board of Directors / Nomination Committee

4.8

Internally developed statements of mission or values, codes of conduct, and principles relevant to economic, environmental, and social performance and the status of their implementation. Page 12 Mission / Corporate Values

4.9

Procedures of the highest governance body for overseeing the organization’s identification and management of economic, environmental, and social performance, including relevant risks and opportunities, and adherence or compliance with internationally agreed standards, codes of conduct, and principles. Page 32 Composition of Board of Directors

4.10Processes for evaluating the highest governance body’s own performance, particularly with respect to economic, environmental, and social performance. Page 35

Currently Internal Audit evaluates the Economic performance of the company.

Setting up processes to evaluate Environmental and social processes.

4.11Explanation of whether and how the precautionary approach or principle is addressed by the organization. Page 35 Internal Audit

4.12

Externally developed economic, environmental, and social charters, principles, or other initiatives to which the organization subscribes or endorses.

Not Applicable

Company does not endorses any externally developed charter

4.13

Memberships in associations (such as industry associations) and/or national/international advocacy organizations in which the organization: * Has positions in governance bodies; * Participates in projects or committees; * Provides substantive funding beyond routine membership dues; or * Views membership as strategic.

Not Applicable No Membership

4.14 List of stakeholder groups engaged by the organization. Page 39 Stakeholder Management

4.15 Basis for identification and selection of stakeholders with whom to engage. Page 39 Stakeholder Management

4.16Approaches to stakeholder engagement, including frequency of engagement by type and by stakeholder group. Page 39 Stakeholder Management

4.17

Key topics and concerns that have been raised through stakeholder engagement, and how the organization has responded to those key topics and concerns, including through its reporting. Page 39 Stakeholder Management

86 87


DescriptionPage Number Section

ECONOMIC

EC1 Direct economic value generated and distributed, including revenues, operating costs, employee compensation, donations and other community investments, retained earnings, and payments to capital providers and governments.

Page 27 Highlights of 2011

EC2 Financial implications and other risks and opportunities for the organization’s activities due to climate change. Page 53 Environment

EC3 Coverage of the organization’s defined benefit plan obligations. Page 44 Employee benefits

EC4 Significant financial assistance received from government. Not Applicable

Maynilad is a private firm therefore does not receive any financial assistance from the government.

EC5 Range of ratios of standard entry level wage by gender compared to local minimum wage at significant locations of operation. -

We are paying above the government mandated minimum wage to our employees.

EC6 Policy, practices, and proportion of spending on locally-based suppliers at significant locations of operation. Not

Applicable

We provide our customers the best quality at the minimum cost, therefore we do not have any preferences in opting for suppliers and prefer ethical supplier.

EC7 Procedures for local hiring and proportion of senior management hired from the local community at significant locations of operation.

-

We have a policy to hire the workers for construction purposes from local community. This procedure is a part EMP submitted to the National Government.

EC8 Development and impact of infrastructure investments and services provided primarily for public benefit through commercial, in-kind, or pro bono engagement.

Page 62 Community Empowerment

EC9 Understanding and describing significant indirect economic impacts, including the extent of impacts. Page 54 Impacts of Climate Change

ENVIRONMENT

EN1 Materials used by weight or volume. Page 61 Materials used

EN2 Percentage of materials used that are recycled input materials. - -

EN3 Direct energy consumption by primary energy source. Page 55 Energy Consumption

EN4 Indirect energy consumption by primary source. Page 55 Energy Consumption

EN5 Energy saved due to conservation and efficiency improvements. Page 55 Energy Consumption

EN6

Initiatives to provide energy-efficient or renewable energy based products and services, and reductions in energy requirements as a result of these initiatives. Page 55 Energy Conservation Initiatives

EN7 Initiatives to reduce indirect energy consumption and reductions achieved. Page 55 Energy Consumption

EN8 Total water withdrawal by source. Page 58 Water Consumption

EN9 Water sources significantly affected by withdrawal of water. Page 58 Water Consumption

EN10 Percentage and total volume of water recycled and reused. Page 58 Water Consumption

EN11

Location and size of land owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas. Page 57 Biodiversity / Environmental Programs

EN12

Description of significant impacts of activities, products, and services on biodiversity in protected areas and areas of high biodiversity value outside protected areas.

Page 57 Biodiversity

EN13 Habitats protected or restored. Page 57 Biodiversity

EN14

Strategies, current actions, and future plans for managing impacts on biodiversity. Page 57 Watershed Management

EN15

Number of IUCN Red List species and national conservation list species with habitats in areas affected by operations, by level of extinction risk.

Not Applicable

As none of the IUCN Red list species exist in areas of our operation.

EN16 Total direct and indirect greenhouse gas emissions by weight. Page 54 GHG Emission

EN17 Other relevant indirect greenhouse gas emissions by weight. Page 54 GHG Emission

EN18 Initiatives to reduce greenhouse gas emissions and reductions achieved. Page 54 Emission Reduction Program

EN19

Emissions of ozone-depleting substances by weight. Not Applicable

We do not use any refrigerants for our operations causing emissions of ozone depleting substances

EN20 NOx, SOx, and other significant air emissions by type and weight. Page 54 GHG Emission

EN21 Total water discharge by quality and destination. Page 58 Water Consumption

EN22 Total weight of waste by type and disposal method. Page 58 Water Consumption

EN23 Total number and volume of significant spills. - -

EN24

Weight of transported, imported, exported, or treated waste deemed hazardous under the terms of the Basel Convention Annex I, II, III, and VIII, and percentage of transported waste shipped internationally.

Not Applicable -

EN25

Identity, size, protected status, and biodiversity value of water bodies and related habitats significantly affected by the reporting organization’s discharges of water and runoff.

Page 57 Biodiversity / Environmental Programs

EN26

Initiatives to mitigate environmental impacts of products and services, and extent of impact mitigation. Page 56 Environmental Programs

EN27

Percentage of products sold and their packaging materials that are reclaimed by category. Not

Applicable

We being a water& sewerage industry, we do not use any packing material for our products.

EN28

Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with environmental laws and regulations. - -

EN29

Significant environmental impacts of transporting products and other goods and materials used for the organization’s operations, and transporting members of the workforce.

Not Applicable -

EN30 Total environmental protection expenditures and investments by type. - -

LABOR PRACTICES

LA1Total workforce by employment type, employment contract, and region, broken down by gender. Page 42 Employee Commitment

LA2

Total number and rate of new employee hires and employee turnover by age group, gender, and region. Page 42 Employee Commitment

LA3

Benefits provided to full-time employees that are not provided to temporary or part-time employees, by major operations. Page 44 Employee Benefits

LA15Return to work and retention rates after parental leave, by gender. Page 44 Employee Benefits

LA4 Percentage of employees covered by collective bargaining agreements. Page 43 Collective Bargaining Agreements

LA5

Minimum notice period(s) regarding significant operational changes, including whether it is specified in collective agreements. Page 44 Employee Commitment

LA6

Percentage of total workforce represented in formal joint management-worker health and safety committees that help monitor and advise on occupational health and safety programs. Page 45 Employee Health & Wellness

LA7

Rates of injury, occupational diseases, lost days, and absenteeism, and number of work-related fatalities by region and by gender. Page 45 Employee Health & Wellness

LA8

Education, training, counseling, prevention, and risk-control programs in place to assist workforce members, their families, or community members regarding serious diseases.

Page 45 Employee Health & Wellness

LA9 Health and safety topics covered in formal agreements with trade unions. Page 45 Employee Health & Wellness

LA10

Average hours of training per year per employee by gender, and by employee category. Page 47 Employee Development

LA11

Programs for skills management and lifelong learning that support the continued employability of employees and assist them in managing career endings.

Page 47 Employee Development

LA12

Percentage of employees receiving regular performance and career development reviews, by gender. Page 44 Employee Benefits

LA13

Composition of governance bodies and breakdown of employees per employee category according to gender, age group, minority group membership, and other indicators of diversity.

Page 42 Employee Empowerment

LA14

Ratio of basic salary and remuneration of women to men by employee category, by significant locations of operation. Page 44 Employee Benefits

88 89


HUMAN RIGHTS

HR1

Percentage and total number of significant investment agreements and contracts that include clauses incorporating human rights concerns, or that have undergone human rights screening. -

All our contractors need to attain Form DO 18A from Department of Labor & Employment. The form is allotted to the contractors who comply with the Human Rights clauses and Labor laws.

HR2

Percentage of significant suppliers, contractors and other business partners that have undergone human rights screening, and actions taken.

-

Our contract with suppliers and vendors include human rights clause and therefore all our suppliers and contractors need to comply with this requirement as we conduct random checks.

HR3

Total hours of employee training on policies and procedures concerning aspects of human rights that are relevant to operations, including the percentage of employees trained. Page 47 Employee Development

HR4 Total number of incidents of discrimination and actions taken. Page 49 Human Rights

HR5

Operations and significant suppliers identified in which the right to exercise freedom of association and collective bargaining may be violated or at significant risk, and actions taken to support these rights.

Not Applicable -

HR6

Operations and significant suppliers identified as having significant risk for incidents of child labor, and measures taken to contribute to the effective abolition of child labor. None We conduct random checks on our

suppliers in terms of human rights.

HR7

Operations and significant suppliers identified as having significant risk for incidents of forced or compulsory labor, and measures to contribute to the elimination of all forms of forced or compulsory labor. Page 49 Human Rights

HR8

Percentage of security personnel trained in the organization’s policies or procedures concerning aspects of human rights that are relevant to operations. Page 49 Human Rights

HR9

Total number of incidents of violations involving rights of indigenous people and actions taken. Page 49 Human Rights

HR10

Percentage and total number of operations that have been subject to human rights reviews and/or impact assessments. Page 49 Human Rights

HR11

Number of grievances related to human rights filed, addressed and resolved through formal grievance mechanisms. Page 49 Human Rights

SOCIETY

SO1

Percentage of operations with implemented local community engagement, impact assessments, and development programs. Page 62 Community Empowerment

SO9

Operations with significant potential or actual negative impacts on local communities. Page 62 Community Empowerment

SO10

Prevention and mitigation measures implemented in operations with significant potential or actual negative impacts on local communities. Page 64 Community Empowerment

SO2

Percentage and total number of business units analyzed for risks related to corruption. Page 49 Human Rights

SO3

Percentage of employees trained in organization’s anti-corruption policies and procedures. Page 49 Human Rights

SO4Actions taken in response to incidents of corruption.

Page 49 Human Rights

SO5

Public policy positions and participation in public policy development and lobbying. -

Participate in various public consultation & hearings on environmental protection in terms of water resources.

SO6

Total value of financial and in-kind contributions to political parties, politicians, and related institutions by country. -

We did not contributed in any kind of in-kind contribution to any of the political parties.

SO7

Total number of legal actions for anti-competitive behavior, anti-trust, and monopoly practices and their outcomes.

Not Applicable -

SO8

Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with laws and regulations. - -

PRODUCT RESPONSIBILITY

PR1

Life cycle stages in which health and safety impacts of products and services are assessed for improvement, and percentage of significant products and services categories subject to such procedures. Page 13 Plants & Facilities

PR2

Total number of incidents of non-compliance with regulations and voluntary codes concerning health and safety impacts of products and services during their life cycle, by type of outcomes. - No Incidents in 2011

PR3

Type of product and service information required by procedures, and percentage of significant products and services subject to such information requirements.

Not Applicable -

PR4

Total number of incidents of non-compliance with regulations and voluntary codes concerning product and service information and labeling, by type of outcomes. Page 75 Customers Care Improvements

PR5

Practices related to customer satisfaction, including results of surveys measuring customer satisfaction. Page 74 Customer Satisfaction

PR6

Programs for adherence to laws, standards, and voluntary codes related to marketing communications, including advertising, promotion, and sponsorship. Page 74 Customer Satisfaction

PR7

Total number of incidents of non-compliance with regulations and voluntary codes concerning marketing communications, including advertising, promotion, and sponsorship by type of outcomes. -

We comply to the PANA & KBP regulatory law and there were no incidents of non -compliance with regulations.

PR8

Total number of substantiated complaints regarding breaches of customer privacy and losses of customer data. Page 74 Customer Satisfaction

PR9

Monetary value of significant fines for non-compliance with laws and regulations concerning the provision and use of products and services. - -

Disclosure of Management Approach Page 79 Moving Forward

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Francisco A. ArellanoEnrique G. De GuzmanFreda P. BoleyleyAnna Liza P. PorciunculaChester Y. Del Rosariovilma S. CembranoJohn Emmanuel B. MartinezConrado P. SorianoMark Paul S. CapatiTeresita v. ManceraMa Rowena T. CaritativoCybele L. RegaladoCherubim o. MojicaJennifer C. RufoPatricia B. HizonJoseph Rosmon M. Tuazonvida Maya A. KoEmil Carlo F. ComstiRonnie F. ParaisoLuis Mauricio Z. LermaMitchie M. ArcainaChristian Reginald M. IndonMae Liza S. velasquezNancy D. EspenillaMa. Elizabeth H.obanilRicardo Jose G. MirandaJo-Ann R. PabilonaEdmundo M. Perez IILolita D. BautistaMa. Cherry S. MarillaJoy Marie C. ArceAnn Margarett L. MarigondonRyan S. orilloGuillermo C. GabatinoApollo C. TiglaoJeric M. AxalanMark Allan B. TajanAnthony S. SampianoAbigail S. EscalonaMa. Ana E. TriaRessie D. vicenteElaine L. ChangMaria Teresa M. ArtiagaClarisse Joy S. GomezZmel D. GrabilloAilyn C. CabralAileen S. Sta. MariaMyra P. TacderanKris G. Catangcatang

Karthik SubburamanArpit ShrivastavaDianne PribhdasKelvin Tee

AcknowledgementCorporate Quality, Environment, Safety and Health (CQESH)Integrated Management System (IMS)Integrated Management System (IMS)IMS - Surveillance and MaintenanceIMS - Surveillance and MaintenanceEnvironment ManagementEnvironment ManagementCorporate SafetyCorporate SafetyCentral LaboratoryInternal Audit ServicesCorporate and Financial PlanningCorporate CommunicationsStakeholder CommunicationsAdvocacy & MarketingAdvocacy & MarketingAdvocacy & MarketingKey Accounts ManagementLegal and Regulatory AffairsCorporate GovernanceHuman Resources (HR)- organizational DevelopmentHR - Business PartnerHR - Training and DevelopmentHR - Rewards and Compensation PlanningHR - SAP HCM AdministrationHR - Health ManagementHR - Health ManagementMaynilad Water AcademyMaynilad Water AcademyCentral Non-Revenue Water PlanningCentral Non-revenue Water PlanningWastewater Management - Planning and Project Development Wastewater Management - Planning and Project Development Business Area operations - Customer CareBusiness Area operations - Customer CareBusiness Area operations - Customer CareBusiness Area operations - North Caloocan Business AreaProgram Management - Program Planning and ControlWater Supply operations - Water ProductionWater Supply operations - Water ProductionWater Supply operations - Water NetworkWater Supply operations - Water NetworkCorporate Logistics - Materials Planning and ControlCorporate Logistics - Procurement Technical Services (TS), Geographic Information System (GIS)TS/GIS - Asset ManagementTS/GIS - Asset ManagementTS/GIS - Database ManagementIntegrated Management System

Project ManagerProject ConsultantWriterGraphic Artist

aDDReSS:MWSS Compound, Katipunan Avenue, Balara, Quezon City

HeaD oFFice tRUnKline: 981-3333

cUStoMeR coMplaintS anD inQUiRieS: Maynilad Hotline 1626

e-Mail aDDReSS: [email protected]

pRiMaRy contactFrancisco A. ArellanoCorporate Quality, Environment, Safety & [email protected]

SeconDaRy contact• Enrique G. De. Guzman Integrated Management System (IMS) [email protected]

• Anna Liza P. Porciuncula IMS – Surveillance and Maintenance [email protected]

Contact Details

ECC International, Philippines | www.eccinternational.com

http://www.eccinternational.com

Documents

About the Report watershed. - Maynilad Water Services · About the Report Message from the Chairman Message from the President About Maynilad ... 2011 marks a very important milestone