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Nestlé Australia Limited

National Packaging Covenant Annual Report

Year 2 21 November 2007

Forward Nestlé has a long history of commitment to the environment extending over half a century. As we grew from humble beginnings into the world's largest food and beverage company, we strove to take the fundamental cultural values of environmental preservation and cleanliness into all our operations.

At Nestlé, we recognise that our business is built on trust. For a company such as ours to be successful it needs to earn and retain the confidence of everyone with whom it has a relationship – particularly consumers. We are very aware that trust can only be achieved if we maintain the quality and safety of our products. At the same time we are conscious that the decisions we make about our products and packages have an effect on the resources we use to make them. As such, we endeavour to ensure that our business has long-term sustainability, by considering our environment and social responsibilities and integrating these into daily business practices.

Since first signing the National Packaging Covenant Nestlé has progressively worked towards improving the processes involved with packaging and design decisions in order to reduce the associated environmental impacts. Our procedures and checklists allow our marketing and product development staff to evaluate the environmental consequences of their product and package design choices. Our environmental programs ensure that our factory, warehouse and office staff are better equipped to understand the effects their own actions have on the environment and are able to further reduce these impacts. A formal communication process has been established with our suppliers, and the education of our consumers through disposal information on packaging and on the Nestlé Internet site encourages informed behaviour.

In re-signing the strengthened Covenant, Nestlé has focused our approach to working with our employees, consumers and partners for a successful, sustainable future.

I am pleased to be able to share with you our Year 2 Annual Report based on the National Packaging Covenant Action Plan. We are undoubtedly moving to further integrate environmental considerations into our business practices.

Jorge Sadurni

CEO, Nestlé Oceania

Page i National Packaging Covenant Annual Report


Contents 1 Background ............................................................................................................... 1 2 Executive Summary .................................................................................................. 3 3 Nestlé the Company.................................................................................................. 4

3.1 Profile ........................................................................................................................... 4 3.2 History .......................................................................................................................... 4 3.3 Products ....................................................................................................................... 5 3.4 Packaging..................................................................................................................... 5 3.5 Packaging Minimisation................................................................................................ 7

4 Reporting Against Action Plan Commitments ....................................................... 9 4.1 Covenant Goal 1 .......................................................................................................... 9 4.2 Covenant Goal 2 ........................................................................................................ 19 4.3 Covenant Goal 3 ........................................................................................................ 21 4.4 Covenant Goal 4 ........................................................................................................ 27 4.5 Covenant Goal 5 ........................................................................................................ 29

5 Reporting against Covenant KPI’s ........................................................................ 30 6 Nestlé NPC Contact ................................................................................................ 31 7 Conclusion............................................................................................................... 32

Appendix A Nestlé’s Packaging Policy

Appendix B Nestlé’s Environmental Policy

Appendix C IDAS Report

Appendix D Nestle Life, Plenty Magazine and SHE Nestlé Magazine articles

Appendix E Independent Verification Statement

Page ii National Packaging Covenant Annual Report


1 Background The National Packaging Covenant (NPC) is a voluntary initiative by Government and Industry to reduce the environmental effects of packaging on the environment. It is designed to minimise the environmental impacts arising from the disposal of used packaging, to conserve resources through better design and production processes and to facilitate the re-use and recycling of used packaging materials.

Whilst the NPC is an Australian co-regulatory agreement for Australia, the principles and objectives of Nestlé’s involvement extend across its operations in Oceania and New Zealand. For annual reporting purposes however this document will be limited to actions in Australia.

Nestlé became a signatory to the National Packaging Covenant in September 2000. Since then, Nestlé has progressively worked towards improving packaging and design decisions, with the overall aim of reducing associated environmental impacts. Guidelines and checklists have made marketing and product development staff more aware of the environmental impacts associated with their product and package design choices. Nestlé has a range of programs to ensure all staff are better equipped to understand the environmental implications of their actions and are empowered with the necessary skills and tools to reduce such impacts. A communications process has also evolved for suppliers and consumers to ensure behavioural change with respect to responsible packaging. Beyond the initial signatory to the covenant in 2000 Nestlé has made considerable advancements in the environmental performance of packaging and operations. In 2005 Nestlé re-signed the NPC which gave the opportunity to build on past achievements under the first covenant, and more importantly, challenged the company to reach new levels of environmental excellence and leadership in the area of packaging. In November 2005, Nestlé submitted a three-year Action Plan (2005 to 2008) which forms the basis for this annual review and other reporting mechanisms. While consistent with the environmentally focused performance goals of the strengthened NPC, our overarching strategy of our three-year Action Plan involves:

Working with Our Employees - At Nestlé, we want all our employees to do the right thing when it comes to the environmental aspects of the packaging that we use. We will continue to focus on putting the right procedures, the right attitudes, and the right skills in place to ensure this happens. Performance in line with the Environmental Code of Practice for Packaging (ECoPP) and collecting performance data are major parts of achieving this goal.

Working with Our Consumers - We recognise that some of the packaging from our products ends up as litter. We also recognise that, while the recovery of packaging from households through kerbside recycling is very good, the recovery of packaging from settings ‘away from home’ is not. Therefore Nestlé is increasing efforts to work with others towards better litter abatement and better recovery of packaging from products consumed ‘away from home’. We want to help as many of our consumers as possible to do the right thing too.

Working with Our Partners - Packaging is constantly changing to meet consumers’ changing needs. As it does, we recognise that we must play a role with our partners to make sure that the environment doesn’t suffer from packaging innovation. So, we

Page 1National Packaging Covenant Annual Report


will continue to cooperate with our packaging suppliers in choosing the right material and design selections wherever possible. We will be working with our major customers to seek opportunities to present our products in the most efficient and environmentally sound way. Further, we will be developing stronger relationships with the recycling industry to make sure that wherever possible we are working together, especially when new packaging is introduced.

A baseline of performance is presented in this NPC annual report through the Action Plan objectives, actions and indicators we have set to lead us towards the establishment of performance targets and we will report annually demonstrating continuous improvement.



2 Executive Summary This 2007 National Packaging Covenant Annual Report marks the sixth reporting year of continuous improvement for Nestlé and its environmental performance in terms of packaging.

The report covers Year 2 of the company’s performance against Nestlé’s three year NPC Action Plan, 2005 to 2008 and documents the Company’s progress against all twenty-five Year 2 actions and targets. Year 2 performance has been summarised below.

Table 1 - Year 2 Action Status

ACTION STATUS Total Year 2 actions 25

Actions complete 18

Actions partially or majority complete 5

Actions not commenced 1

Actions deleted 1

Some key Year 2 highlights from the past 12 months include:

Adoption of the Nestle Packaging Policy identifying Nestlé’s commitment to reducing the environmental impact of packaging.

Adoption of the revised Nestlé Development Procedure.

Implementation of the online Packaging Impact Quick Evaluation Tool (PIQET).

Improvement of six high profile product packages, due to the implementation of various tools and policies, as part of our continuous improvement to minimise packaging.

Enhanced packaging supplier communications through contact with 96% of suppliers to increase awareness of Nestlé’s high environmental standards and requirements.

Completion of a recycleability study, which identified knowledge gaps in understanding the impacts of packaging design on the recovery industry.

Development of a new dairy product and package, which was awarded an Oceania Packaging Innovation Award in 2007 for its packaging design and labelling instructions.

Increased on-site recycling facilities at the majority of factory sites (86%).

Extensive media coverage regarding Nestlé and its Environmental Packaging efforts.

Our strategy now for Year 3 will be the achievement of those objectives and actions not achieved this year and progressing all other Year 3 actions.



3 Nestlé the Company

3.1 Profile Nestlé’s quality products have been available in Australia and New Zealand since the 1880s. Today, Nestlé Oceania spans Australia, New Zealand and the Pacific Islands, with 5,700 employees, 20 factories and four distribution centres owned and operated by the company. Nestlé Oceania, a wholly owned subsidiary of Swiss-based Nestlé S.A., has its regional head office in Sydney. The company’s production is widespread, providing employment in manufacturing and distribution across Oceania and boosting the economies of regional communities where we have a presence. A successful, expanding business of this size needs the support of a strong supply chain, and Nestlé Oceania’s logistics and planning systems allow us to deliver to a variety of distributors ranging from national supermarket chains in Australia and New Zealand to small outposts in the highlands of Papua New Guinea.

There are other Nestlé operations in the region which form part of the worldwide Nestlé Group but which operate independently from Nestlé Oceania. These include Nestlé Purina pet food (included in this plan), Nestlé Waters (Perrier, S. Pellegrino and Vittel), Nespresso, and Alcon Laboratories, a global leader in vision care. Globally, Nestlé has an interest of more than 26% in the world’s leading cosmetics company, L’Oreal. Together Nestlé and L’Oreal have leveraged their relationship by forming two further joint ventures, Galderma and Innéov, to develop leading edge products in dermatology and the new field of nutricosmetics. Nestlé also has a cereals joint venture with the US-based company General Mills known as Cereal Partners Worldwide (CPW).

As a large producer of packaged goods, Nestlé is committed to the principles of shared responsibility for packaging and product stewardship, principles which are inherent to the NPC.

Whilst the National Packaging Covenant is an Australian co-regulatory agreement, the principles and objectives of the Nestlé Action Plan document extend across our operations in Oceania, and have specific applicability in meeting Nestlé New Zealand’s obligations under the Brand Owners and Retailers Sector Action Plan, which is part of the New Zealand Packaging Accord 2004. For Annual Covenant Reporting purposes however, actions and performance indicators shall be limited to Australia.

3.2 History Nestlé was built on one man’s vision to save lives. In 1867, Henri Nestlé responded to the high level of infant mortality by inventing a milk-based substitute for babies unable to breastfeed, and assisted in saving countless young lives. This platform of good health and good nutrition which we call Good Food, Good Life remains fundamental to our continuing global success.

Over the years Nestlé has become the world’s largest food and beverage company, with more than 481 factories in 87 countries and an unrivalled portfolio of iconic brands, including Maggi, Milo, Nescafé, Kit Kat and Uncle Tobys. The Company has annual sales of more than $100 billion, and 25 of our brands have annual sales of a billion dollars or more.



Today, as we confront the challenges of changing lifestyle patterns in the 21st Century, nutrition is more than ever the key to our company’s future. While we remain loyal to the principles and ideals that drove Henri Nestlé, we are adapting to meet the changing needs of consumers.

We recognise that our business is not just the products we make, but the role those products play in making life better for the people who buy them. We recognise that food and beverages are playing an increasingly important role in people’s lives, in terms of personal health, nutrition, sociability and enjoyment. Increasingly, our consumers are receiving benefits from Nestlé products that go beyond taste and convenience. We are now providing much more to our consumers, integrating the added benefits of nutrition, health and wellness. This philosophy serves as the touchstone of our company around the world.

In 2005 we introduced the first global nutritional labelling system, the Nestlé Nutritional Compass, which encourages and empowers consumers to make informed choices about their diets. The Compass points to a product’s nutritional highlights (for example, a source of fibre) as well as its ingredients, and provides additional information including the contact details of our Consumer Services department. These labels, which will soon be on all of our products, provide consumers with valuable knowledge to help them lead a healthy lifestyle.

We are also making products that are preferred by taste over competitors in six out of 10 cases, but with added nutritional and health advantages. It’s a never-ending process of continuous innovation as we, like Henri Nestlé before us, search for ways to create Good Food and Good Life.

3.3 Products At Nestlé, we believe it is very important to focus on making local products for local needs, as this enables us to stay close to the community and our customers. Our customers are a vital part of our business and we work closely with them to improve the way we design, package, deliver and merchandise our products. Our brands and products are the focus of continual innovation and renovation and our aim is that they at a minimum, meet and preferably, exceed our customers’ expectations for taste and nutritional quality.

Throughout Oceania, the Food and Beverages Division provides many of our most recognised products, such as Milo, Nesquik, Nescafé and International Roast coffee, as well as Carnation and Nestlé milks, which are complemented by the Nestlé range of baking products. We also make a range of cooking aids and complete meals under the Maggi brand, as well as the Lean Cuisine range of frozen meals, soups and fish. In Australia, Papa Giuseppi’s provides pizzas for all the family.

Our Australian chilled dairy range provides nutritious and tasty yogurts and fresh dairy desserts, including the Nestlé All Natural and Nestlé Diet yogurts.

From Milky Bar to Allen’s Minties and Snakes Alive, Nestlé’s range of confectionery has been a favourite for many years. Popular brands in Oceania include Kit Kat, Smarties and, of course, Life Savers.

In supermarkets and other outlets through most of Australia, you can find the whole range of Nestlé Peters ice cream. Our tubs of ice cream vary from traditional vanilla through to a range of exotic delights, and on hot days, our customers love nothing more than the refreshing taste of products such as Choc Wedge, Drumstick and Frosty Fruits. We also make the luxury Heaven range, and the delicious low fat Light ‘N’ Creamy.



Our rapidly growing Food Services and Industrial Division provides a wide range of food and beverage solutions to businesses such as cafes, restaurants, pubs, clubs, offices, airlines, schools and hospitals. CDS Gourmet Foods at Brunswick forms part of this Division.

In 2004 we acquired Chalet Patisserie, a Brisbane-based company that bakes a gourmet range of gateaux, cheesecakes, flans and individual portions for the food services industry. In 2005 Nestlé bought the Melbourne-based performance nutrition company Musashi.

In 2006 we added another iconic brand to the Nestlé stable with the acquisition of Uncle Tobys. Uncle Tobys’ key brands include Vita Brits, Uncle Tobys Oats, Uncle Tobys Muesli Bars, Rollups and Le Snack. The Uncle Tobys cereals business, which includes Uncle Tobys Oats, became part of Cereal Partners Worldwide (CPW), our global joint venture with the US-based General Mills company.

In Australia, we are proud of the products marketed by the Nestlé Nutrition division. The Nestlé name was born out of concern for infant nutrition, and today our range includes Nan, Lactogen and Neslac. We also make specialist nutrition products, which are prescribed by health care professionals for people with special nutrition needs and in 2007 we further developed this business with our acquisition of the health care nutrition arm of Novartis. For athletes and active people, our Powerbar range provides a source of convenient and nutritious energy when it is needed most, and our performance nutrition business was boosted by our acquisition of the Australian company Musashi.

3.4 Packaging Nestlé is firmly committed to finding packaging solutions which will contribute to a better environment. Packaging is of course essential for both Nestlé and for our consumers. It ensures the safety and quality of products, from manufacture though to storage, distribution and consumption. In addition, packaging contributes to product appeal, provides convenience, communicates information (e.g. on nutrition and serving instructions), and may include tamper-evidence features. Packaging can also help prevent or reduce product waste.

Nestlé utilises a number of packaging materials to ensure that our products are delivered to our customers and consumers in the same way they left the factory. Those material types are as detailed in Table 2 over page.



Table 2 - Types of Packaging Materials Used by Nestlé Packaging Type Description Typical Use Coated Paper Wax coated paper Sugar confectionery wrappers

Wood Wooden sticks Ice cream sticks, pallets

Flexible Laminates Composite flexible materials printed and laminated to form bags and wrappers.

Confectionary bags and wrappers. Powdered sauce and soup mixes. Noodle meal wrappers. Single serve powered products (coffee and Milo)

Paper Labels Paper labels Labels for cans, bottles and cartons

Rigid Plastics Containers Polypropylene, polystyrene, high density polyethylene

Yoghurt containers, confectionary trays, ice cream tubs, powdered foods.

Carton Board Folding cartons Frozen pizzas, frozen meals. Display cartons for confectionery.

Metal Steel containers Milk products, coffee and Milo

Corrugated Cases Cases made of corrugated board

Transport containers for distribution purposes

Glass Clear glass containers Sauce bottles and coffee jars

Polyethylene Terephthalate (PET)

Black crystalline PET Food trays

Composite Can Containers with paper walls and metallic ends

Coffee substitute beverages

Nestlé Australia sources its packaging materials from a wide variety of packaging suppliers both locally and international. In all, over 200 companies are involved in the Nestlé packaging supply chain, with major suppliers including NPC signatories Amcor and Visy.

3.5 Packaging Minimisation Nestlé Australia Ltd became a signatory to the NPC on September 28th 2000 and is committed to the key Covenant principles of product stewardship and shared responsibility. These commitments are consistent with those evident in Nestlé’s worldwide and Oceania environment policies, and in Nestlé’s demonstrated efforts over the past decade to reduce packaging waste worldwide.

As stated in Nestlé’s Policy on the Environment, Nestlé globally supports an integrated approach to packaging waste minimisation that favours source reduction, reuse, recycling and energy recovery to minimise the impact of packaging on the environment. Since 1991, environmental considerations have become an important criterion in Nestlé’s renovation and innovation of packages and packaging materials. Reducing the amount of packages and packaging materials needed for a product, whilst safeguarding safety and quality, is a continuing key objective and priority. In Australia, the Nestlé Oceania Environmental Policy commits the organisation to "identifying and reducing risk to minimise environmental impact



arising from our operations and products”. Packaging impacts, as such, are required to be considered in the decision-making processes. In Australia, the Nestlé Oceania Packaging Policy reflects the goals of the strengthened NPC and the Environmental Code of Practice for Packaging (ECoPP).



4 Reporting Against Action Plan Commitments A total of 9 objectives and 25 actions outlined in the 2005 to 2008 3 Year NPC Action Plan were reported against for the Year 2 period (2006/2007). The following report presents the detailed information on all 5 Covenant goals, the objectives, actions and targets covered under the Action Plan’s second reporting year.

4.1 Covenant Goal 1 Packaging optimised to integrate considerations about resource efficiency, maximum resource re-utilisation, product protection, safety and hygiene.

Objective Action Covenant KPI

Nestlé Performance Measure

Status

1.1 Establish “Environmental Packaging Position” for Nestlé Oceania to ensure alignment with the goals of the strengthened National Packaging Covenant and the ECoPP and with the “Nestle policy on the Environment”

22 Establish Position by March 2006

Complete 1 Ensure the “Environmental Packaging Position” for Nestlé Oceania and other relevant policies and strategies reflects the goals of the strengthened National Packaging Covenant and the Environmental Code of Practice for Packaging (ECoPP).

1.2 Develop and implement procedures to clearly define the processes and approvals required for all packaging decisions. Processes to define materials permitted to be used, and provide processes for: New/innovation packaging, reviews of existing, and addressing queries on packaging

22 Policy and procedures formally adopted by July 2006.

Complete

2.1 Review, update and implement the New Package Development Procedure and other relevant required procedures (part of Strategy from objective 1) to incorporate the objectives of the revised ECoPP.

22 Review new Package Development Procedure (and others required) by March 2006.

New Package Development Procedure (and others required) formally adopted by July 2006.

Complete

2.2 Collaborate with the SPA to obtain use of the Packaging Impact Quick Evaluation Tool (PIQET) once developed

22 Implementation of PIQET for improving assessment process for New Package Development Procedure

Complete

2 Ensure that the New Package Development Procedure incorporates the objectives of the revised ECoPP.

2.3 Update and deliver internal training on the Environmental Packaging Policy & Strategy and procedures including, use of the revised New Package Development Procedure to Packaging Technologists, Brand Managers and Marketing staff

22 Percentage of staff to have completed training by July 2006.

Complete





Status

2.4 Design and implement a packaging information tracking tool to track and report annually by October each year on:

(i) Tonnes of packaging by material type by source (local or imported);

(ii) Tonnes of packaged product sold;

(iii) Ratio of product to packaging (by weight);

(iv) Tonnage of “non-recyclable” packaging sold by material type and total;

(v) Total “non-recyclable” packaging as a % of total packaging sold;

(vi) Case studies of New Package Development Procedure with improvements in environmental impacts quantified; and.

(vii) Examples of changes to protection, safety, hygiene, shelf life or supply chain considerations identified with improvements in impacts quantified.

1, 3, 4, 6, 27

Packaging information tracking tool to be operational and able to generate reports by October 2006.

Majority complete - carried forward to Year 3

2.5 Utilise packaging information tracking tool to develop performance targets in line with Covenant Key Performance Indicators.

29 Performance targets established by October 2006.

Review and report against performance annually by October each year.

Not commenced -carried forward to Year 3

3.1 Write to supplier and customers to communicate the Nestlé Oceania “Environmental Packaging Policy and Strategy” and the requirements of Nestlé's 3-year Action Plan by July 2006.

2, 3, 24 Percentage of suppliers and customers contacted.

Majority complete - carried forward to Year 3

3 Establish a structured process for engaging with Nestlé's packaging suppliers and customers regarding the National Packaging Covenant commitments

3.2 Work with suppliers and customers to: Facilitate and report on

improvements in design, manufacture, marketing and distribution of packaging utilising the ECoPP;

Identify and report on changes to protection, safety, hygiene, shelf life or supply chain considerations affecting amount and type of packaging; and

Determine the environmental and Covenant performance.

2, 3, 24 Number of packaging improvements identified.

Effect of improvements made to packaging on environmental impacts quantified.

Number of examples of changes to protection, safety, hygiene, shelf life or supply chain considerations identified.

Effect of changes quantified.

Complete





Status

3.3 Utilise outcomes of the supplier engagement process as a basis for an annual environmental and Covenant performance assessment of existing suppliers and for all new suppliers under consideration.

3,4 Number of assessments undertaken.

Number of suppliers who meet performance requirements.

Complete

4 Seek to engage the reprocessing industry with a view to overcoming barriers to the recyclability of certain packaging.

4.1 Seek to build a structured engagement process with the reprocessing industry to identify, discuss and overcome barriers to recyclability of certain packaging, particularly with regards to introduction of new products and packaging types or combinations.

3, 4 Improvements in recyclability of Nestlé's products resulting from discussions.

Complete

Objective 1 The Nestlé Oceania “Packaging Policy” was approved by Nestlé Oceania CEO, Jorge Sadurni, in July 2006 as per action 1. The Policy sets out our commitment to reducing the environmental impact of packaging, without jeopardising the safety, quality or consumer acceptance of our products.

In addition to Nestlé’s Packaging Policy when establishing new or revised packaging materials, the 'Environmental code of Practice for Packaging' (ECoPP) will be used to ensure consideration is given to environmental impact throughout the design process of any new or modified packaging component.

The Packaging Policy supplements the 2004 Environment Policy and they are available to all Nestlé Staff on the internal Intranet and on the Nestlé website for all customers and interested parties world wide. Please refer to Appendix A and B to review the Policies.

Figure 1 The Packaging and Environmental Policies

Although both policies have been finalised and adopted, policies and their associated procedures at Nestlé are continually being assessed and reviewed as technology, legislation and innovation evolves.



Objective 2 The Packaging Development Procedure was developed and approved in 2006 as per action 2.1, and launched at the 2007 Oceania Packaging Conference. This procedure was then reviewed in 2007 to include checklists and technical acceptance procedures, and to incorporate the revised objectives of the ECoPP.

The Packaging Development Procedure has a critical Environmental section covering

ECoPP, Packaging Impact Quick Evaluation Tool (PIQET), NPD Approval Process, including escalation points for environmental impact

staging, shown below in Figure 2, and Renewable Resources.

Nestlé also collaborated with the Sustained Packaging Alliance to obtain use of the Packaging Impact Quick Evaluation Tool (PIQET), as per action 2.2. The PIQET online tool has been formally implemented by Nestlé to guide the environmental impact assessment of products. In order to comply with company and external environmental requirements, any new or modified packaging must undergo a full environmental review utilising the PIQET program. Product reviews should follow the NPD Approval Process as outlined in Figure 2. Each PIQET evaluation is formally recorded and filed by the Packaging Technologist with copies sent to corporate packaging. Nestlé has been a highly active member of the advisory committee in the piloting phase of the PIQET tool with the Sustained Packaging Alliance. Progress this year has included:

a) PIQET being built into the packaging procedures and packaging development checklists;

b) Creation and implementation of a mandatory elevation process for negative PIQET reports (refer to Figure 2);

c) The designation of an internal PIQET "champion" for queries, data integrity and stakeholder communications;

d) Development and launch of the latest on line version of PIQET and the beginning of subsequent staff retraining;

e) Identification of the gaps between PIQET and ECoPP (refer to objective 4); and f) Delivery of a Nestlé presentation at the Sustained Packaging Alliance industry

forum on how and why Nestlé integrated PIQET into the new product development processes.



Figure 2 NPD Approval Process - Flow Chart

As per action 2.3 of the 2005 to 2008 Action Plan requirements, there should be internal training on the Nestlé Environmental Packaging Policy, Strategy and Procedures for Packaging Technologists, Brand Managers and Marketing staff. Staff training coverage to date covers:

Nestlé Product Application Managers - 100% attendance at the April workshop where PIQET was presented;

Nestlé Corporate Purchasing staff - 100% attendance at the March PIQET presentation; and,



Nestlé Marketing staff. Such training allows for heightened awareness and cooperation from all key staff to enable a full supply chain approach. Nestlé also set the task of designing and implementing a packaging information tracking tool to track and report annually, as per action 2.4. This task is in progress via the usage of the SAP program. When in full operation SAP will be used to generate detailed reports, however, the system still requires further modifications to aid data integrity and usability before it can enable the delivery of all reporting requirements. This action will therefore be complete in the third and final year of reporting.

As part of action 2.4 Nestlé is required to provide the NPC with detailed information covering packaging statistics. This information is provided in two formats, initially in the annual IDAS report, attached in Appendix C, and also within this document as per specific objectives 2 and 7. This data set relates to local Nestlé Australia packaging information only (and does not cover imported packaging), which accounts for 90% of products by weight on the Australian market. Please refer below for all NPC Nestlé Action Plan required Year 2 data.

i. Tonnes of Nestlé packaging by material type by supplied Packaging Material Type Tonnes (p.a)Paper 547.50Cardboard - Standard (including liquid paper board) 20431.00Cardboard - Waxed 158.00Cardboard - High Wet Strength 48.00Plastics - Type 1 (PET) 50.00Plastics - Type 2 (HDPE) 523.00Plastics - Type 3 (PVC) 9.00Plastics - Type 4 (LDPE) 903.38Plastics - Type 5 (PP) 3320.00Plastics - Type 6 (PS) 1505.00Plastics - Type 7 (Other) 273.00Glass 10506.00Aluminum 33.83Steel 7050.00Composite 2913.97Other 221.00Total packaging material supplied 48492.68

ii. Tonnes of Nestlé packaged product sold

A grand total of 323 511 tonnes of packaged product was sold between 1 July 2006 to 30 June 2007.

iii. Ratio of Nestlé product to Nestlé packaging (by weight)

The overall ratio of product to packaging ratio between 1 July 2006 and 30 June 2007 was 6.67:1.



iv. Tonnage of Nestlé “non-recyclable” packaging sold by material type and total Non-Recyclable Packaging Material Type Tonnes (p.a)Cardboard - Waxed 158.00Cardboard - High Wet Strength 48.00Plastics - Type 4 (LDPE) 903.38Plastics - Type 5 (PP) 3320.00Plastics - Type 6 (PS) 1505.00Plastics - Type 7 (Other) 273.00Composite 2913.97Other 221.00Total “Non-recyclable” packaging sold 9342.35

v. Total “non-recyclable” Nestlé packaging as a percent of total packaging sold

The grand total amount of non-recyclable packaging accounts for 19% of the total packaging sold by Nestlé.

There have been numerous case studies identified using the Package Development Procedure where improvements in environmental package design are quantified. Using the PIQET software, such case studies create clear visual comparisons on key elements such as water use, energy consumption, global warming, photochemical oxidation and solid waste.

In addition to the package development procedures there are various supply chain considerations that must be addressed before products are established. For example in 2007 it was suggested that truck deliveries could be amalgamated for glass and soft pack coffee products. This resulted in truck utilisation being increased to 94%, reducing truck movements by 89 deliveries per annum, which equated to 75,000 kilometres less travel and reduced greenhouse gas emissions.

Since the implementation of the NPC action plan in 2005 there have been six major examples of continuous improvement to minimise packaging, examples are as follows:

a) A product can height reduction saved 9.6 tonnes per annum of steel at the Smithtown factory;

b) A Milo product promotion saved 4.7 tonnes in shrink sleeves and labels; c) A design change to bulk packaging carton with display opening (‘frog mouth’)

reduced carton board by 20% at the Campbellfield factory; d) Modification of the check weigher settings at Blacktown enabled a 50% reduction in

carton board waste; e) Product redesign to down gauge three carton board products for display trays,

cartons and displays, resulted in a total board saving of 5.7 tonnes for two of Nestlé’s Blacktown lines; and

f) A design change reducing the width of coffee jars enabled 2.4 tonne of shrink film to be saved.



Action 2.5 under objective 2 requires Nestlé to utilise packaging information tracking tools to develop performance targets in line with NPC Key Performance Indicators. This is the one action in the Year 2 reporting period that has not commenced. Indicative targets will be developed once the SAP reporting has been finalised (as per 2.4 above). In the mean time all new or modified packaging will have an environmental assessment completed with any negative impacts escalated to senior management for review, as depicted in Figure 2.

Objective 3 Over the Year 2 reporting period, Nestlé has worked extensively with suppliers by contacting 96% of its packaging suppliers in August 2006. Nestlé’s aim was to raise awareness with suppliers regarding Nestlé’s Environmental Packaging Policy as well as general commitments and expectations under the NPC (action 3.1). So far 42 suppliers have been contacted which covers 97% of Nestlé’s spend. These suppliers distribute across all major packaging categories including flexibles, corrugated, cartons, glass, metal, rigid plastics and paper. Suppliers were asked to report on packaging initiatives undertaken in the last 12 months that have resulted in improvements to environment, protection, safety, hygiene, shelf life and supply chain.

Nestlé also strives to provide information for customers and suppliers on their website regarding packaging and the NPC. The web page can be viewed at the following address: http://www.nestle.com.au/Community/Environment/Packaging/Default.htm.

Broader contact with customers and new suppliers is planned to be addressed in Year 3 due to the need initially to improve internal objectives, aims and targets and for these to be understood and practiced before customers are addressed. As per action 3.2 there have been five significant initiatives identified and completed with the aim to reduce packaging by our suppliers. Initiatives include:

a) A 65 tonne annual saving of polystyrene was achieved by the reducing gauge of yogurt tubs

b) The recycled content of the yogurt tub cardboard clips increased from 55% to 76%. c) A down gauge of carton board at Campbellfield saved 1.5 tonnes of material. d) A down gauge of can thickness at Gympie, Tongala and Smithtown resulted in a

9.1 tonne saving of tin plate. e) A down gauge of ice cream tub wrapping at Mulgrave saved 2.3 tonne per annum

in LDPE Nestlé has also identified and reported on changes to shelf life considerations affecting amount and type of packaging. By moving to metallised labels, one of our Food Service products was able to reduce UV light penetration, which impacted shelf life and enabled a move from tin plate to polypropylene package materials to achieve optimal shelf life and an overall positive impact to the environment.

All Nestlé factories are working towards ISO 14001 (Environment) and OHSAS 18001 (Health and Safety) certification. This certification requires assessment of environmental risks and includes assessment of purchasing and contracts. Globally Nestlé has Principles of Purchasing which indicate purchasing requirements and considerations. Such certification and purchasing documents provide the foundation for responsible packaging management under the NPC framework.



http://www.nestle.com.au/Community/Environment/Packaging/Default.htm

Nestlé Oceania holds an annual performance review with its strategic packaging suppliers. Within these reviews each supplier has discussed its approach to environmental issues and addressed the work they are doing in relation to the National Packaging Covenant.

Whenever Nestlé Oceania tenders its packaging business, all suppliers are requested to complete specific components of the tender documentation outlining their environmental policies and procedures. Current and new suppliers from July 2007 onward are now required to detail their environmental performance and objectives, which are consequently rated as part of a formal evaluation model used to review all suppliers. Due to this requirement, Nestlé can now assess both local and overseas suppliers from an environmental perspective, as per action 3.3. Information requested includes:

a) Which Environmental policies and systems are currently conformed to, confirming that they meet Australian standards and that the services supplied to Nestlé are done so without any detrimental effects to the environment;

b) Specific targets and objectives to minimise packaging impacts; and c) Provision of details regarding actions taken to increase the recyclability of

packaging. A review of current packaging material suppliers has not been completed this year due to changes in staff although is planned for Year 3.

Objective 4 As per action 4.1 Nestlé has completed a recycleability study, which has identified knowledge gaps and a general greater understanding of the impact that packaging design can have on the recovery industry. This study was conducted by Visy Recycling, Australia's largest recycler, who conducted the Packaging Recycling Review of Nestlé's packaging styles and their impacts on the recovery and recycling streams. Beyond the report Visy also provided Nestlé with a national point of contact for liaison to assist in optimising new or modified packaging from a recovery and recycleability perspective.

Nestlé also aims to improve the current gaps between ECoPP and PIQET. Whilst PIQET is an effective tool that covers most of the requirements for ECoPP, other tools are required to ensure we cover the gap areas such as impacts on the waste and recovery stream. The need for the two tools to be more compatible is paramount to allow for a more usable system. In the mean time PIQET will be the means for meeting Nestlé’s ECoPP requirements.

As a result of this process, one Nestlé product has already been identified as having a negative impact and is therefore set for modification to improve its recycleability in the first half of Year 3. Future products with similar packaging may also be permanently banned. A second product has been identified as problematic for the recovery system and will be modified. The issues surrounding the second product have positively increased awareness for staff in a variety of product development roles. Awareness has caused the introduction of new disposal communications to promote appropriate recycling behaviour as a direct result of understanding how the packaging would behave in the recovery stream. A third product has been vastly improved to incorporate a unique spilt recycle approach. Recently Nestlé created a new brand of dairy product where the packaging design includes a rigid plastic inner and recyclable outer. This product was also branded with unique and clear labelling indicating separation before appropriate disposal. This design was awarded a Packaging Oceania Award, 2007. Please refer to Figure 3 overpage to view the packaging.



Figure 3 – Award winning ‘All Natural’ Nestlé Yoghurt Package



4.2 Covenant Goal 2 Efficient resource recovery systems for consumer packaging and paper.



Status

5 Maximise the recovery of post-consumer packaging generated by Nestlé staff.

5.1 Seek to establish collection facilities for the on-site collection of post-consumer packaging recycling generated by Nestlé staff and report on performance. (For example the collection of beverage containers from the staff café).

16 On-site recycling facilities for collection of post-consumer packaging from staff.

Amount of post consumer packaging collected from staff. (If quantifiable otherwise qualitative details).

Partially complete, ongoing to year 3

Objective 5 In order to establish collection facilities for the on-site collection of post-consumer recyclable packaging generated by Nestlé staff, the majority of factory sites (86%) have established post consumer facilities for recycling for their employees. Materials recycled include aluminium cans, paper/cardboard, glass and plastics bottles. Table 3 outlines the current Australian Nestlé sites and their recycling status for employees.

Table 3 Nestlé Sites Currently Recycling

Site Recycling Altona Yes

Arndell Pk No Blacktown Yes Broadford Yes

Chalet Yes Campbelfield Yes

Ecuhca Yes Gympie Yes

Mulgrave Yes Pakenham No Smithtown Yes Tongala Yes

Wahgunyah Yes Blayney yes

Of the sites not currently recycling, both are investigating options for recycling facilities in employee areas in 2008. Refer below for a map of the Nestlé Australia sites.

Historically, specific recycling targets have not been set for the sales and administration offices, however, waste management plans and strategies are being progressively developed and implemented via Safety Health Environment (SHE) committees.



Figure 4 Nestlé Sites in Australia

Regarding part b of action 5.1, Nestlé have investigated their ability to obtain data about the amount of post consumer packaging collected from staff. Investigations have revealed that obtaining this data is neither feasible nor practical because of the difficulties in duplicating the waste collection stream for packaging and non-packaging waste, and the segregation required to separately weigh recyclables and waste from staff and canteen areas. Part b of this performance measure will be removed from the Action Plan.



4.3 Covenant Goal 3 Consumers able to make informed decisions about consumption, use and disposal of packaging of products.


Performance Measure

Status

6.1 Undertake a review of the Nestlé Litter Strategy to incorporate current research and opportunities, specifically:

The further refinement and acceptance of the Direct Litter Indicator (DLI) and Cumulative Litter Indicator (CLI);

Build DLI/CLI into New Product Development Procedure as appropriate; and

Participation in the AFGC’s Packaging stewardship forum and possible participation in other industry wide initiatives.

Education DLI/CLI applied in public report.

DLI/CLI incorporated into New Product Development Procedure.

Percentage of AFGC’s Litter Subgroup meeting attended.

Action deleted

6.2 Work with industry groups to improve the recovery of packaging from Nestlé products consumed both in the home and away-from-home, including recovery from public places by July 2007.

Education Identify industry groups.

Percentage of meetings attended.

Number of projects resulting from collaborations

Complete

6.3 Continue, through the packaging sampling review process for existing products every two years, to ensure disposal guidance is provided on all products and an identification number on all plastic rigid packaging by June 2008.

Education Percentage of products with correct disposal guidance.

Percentage of plastic rigid packaging with identification number.

Complete

6 Seek to ensure that Nestlé customers are aware of correct recovery and disposal options for Nestlé products.

6.4 Continue to promote staff awareness and participation in National Packaging Covenant and Nestlé’s Action Plan initiatives including:

Maintaining up-to-date information on the Intranet site;

Review and further development of ‘Fact Sheets’;

Regular articles in the Nestlé Internal magazine ‘Life’, and;

Packaging Waste Reduction / Environmental Awareness activities.

Education Visits and downloads from staff Intranet site.

Up-to-date information on the Intranet site.

Number of Fact Sheets finalised and published.

Number of articles in the Nestlé Internal magazine ‘Life’.

Percentage of staff participation in Environmental/ Packaging Waste Reduction Awareness Activities

Complete



6.5 Work with industry associations to promote recycling and to support the provision of information to consumers on packaging and via other mechanisms.

Education Number of initiatives undertaken in association with industry stakeholders

Complete

6.6 Continue to expand the provision of environmental and packaging information contained within the Nestlé Australia Internet to assist in the education of the Australian community regarding packaging including:

The “Environmental Packaging Policy” for Nestlé Oceania;

Nestlé Action Plans and Annual Reports;

Recycling and disposal information for post consumer packaging, and;

Information on packaging related activates and investigations.

Education Website updated regularly (annually as a minimum)

Number of site visits and downloads.

Enquiries received through website contacts.

“Environmental Packaging Policy and Strategy” for Nestlé Oceania; published

Nestlé Action Plans and Annual Reports published.

Recycling and disposal information for post consumer packaging published.

Information on packaging related activates and investigations published.

Majority complete – carried forward to Year 3

Objective 6 Nestlé’s Litter strategy, which was first developed in 2003, outlines internal and external actions which Nestle commits to undertaking in response to the increasing focused attention on litter. External actions have included assisting to promote an industry sector response to litter via the Australian Food and Grocery Council (AFGC), through chairing the AFGC’s Litter Management Group. As part of this action, Nestlé previously commissioned Nolan ITU (now part of Hyder Consulting) to conduct a study and develop specific litter indicators, the Direct Litter Indicator (DLI) and Cumulative Litter Indicators (CLI). The intent was to further progress and facilitate the use of these by industry as indicative litter indicators, however there is now some doubt as to the appropriateness of the use of the DLI and CLI.

The DLI and CLI have served their purpose in gaining a greater understanding of the litter stream. However changes in the industry have meant that the indicators are no longer considered the most appropriate methodology to meet the original objective. Consequently action 6.1 has not been undertaken and will be removed from the Action Plan with a greater focus to be placed on action 6.2.

Nestlé’s Environment Manager sits on the AFGC Environment Committee. Industry contacts made via the AFGC Environment committee have included:

Glass Users Initiative Group; Packaging Stewardship Forum; and Keep Australia Beautiful.

As a direct result of the collaborations from involving and participating in AFGC Environment committee, and as per action 6.2, the following projects/interactions have evolved:

Comments to AFGC for consolidation into overall response paper on Container Deposit Legislation (CDL);



Active participation to review proposals for the Glass User Initiative Group to improve recycling rates and collection facilities for glass;

Meeting with the Packaging Stewardship GM to discuss membership;

Keep Australia Beautiful sponsorship of the Territory Tidy Towns for 2007-2008 involving a KAB litter audit;

A 2007 audit of Nestlé products and their packaging determined that 99% had appropriate identification of disposal and recycling guidance as per action 6.3. Please refer to Figure 5 for some examples of compliant labels. Of the products surveyed only one product has been found to be missing its rigid plastic (recycling logo) identifier. The capital required to amend this has been budgeted for completion in late 2007 (early Year 3). The key issues identified by the audit were a lack of symbols (e.g. a flexible missing a bin disposal symbol) or the use of an incorrect symbol (e.g. glass packaging did not specify "glass recycle", and only displayed the mobius loop).

Figure 5 Compliant Nestlé Product labelling for disposal and recycling



A 2007 survey was conducted of all consumer complaints that had been received via the ‘customer care’ info line. This survey identified four key issues regarding packaging;

I. Rigid plastic symbols missing on some small yoghurts,

II. Non recyclable coffee lids,

III. Excessive packaging on ice cream, and

IV. Excessive packaging on a cough lolly.

Consumers contacting Nestlé's Customer Care Info line regarding packaging and environmental issues have increased from 2006 to 2007 by 36%. Due to this surge in interest and to conform to Nestlé environmental ideals, we strive to ensure that customers are aware of correct recovery and disposal options for all Nestlé products though internal artwork and environmental check lists. Year 3 will see a series of environmental labels roll out formally to Nestlé products. Action 6.4 involves the continued promotion of staff awareness regarding the NPC and Nestlé’s Action Plan. There have been a number of ways this task has been completed such as:

Updating the Nestlé Australia intranet website to include the latest action plans, recycling and disposal information and packaging related activities (refer to Figure 6 below).

Monitoring of staff Nestle Australia intranet usage, for example in Year 2 there were 76 downloads and 54 visits recorded (refer to Figure 6 below).

The use of hard copy fact sheets have been replaced with emailed environmental alerts. The alerts act as a call to action versus information sharing. The number of environmental alerts totalled 7 for this year.



Figure 6 Nestle Australia Intranet Screen Dump

Media coverage in three Nestlé internal and external magazines regarding the National Packaging Covenant and what Nestlé are doing to deliver their commitments. Please refer to Appendix D for the articles in;

Nestle Life 07, outlining the PIQET tool and its advantages for Nestlé,

Plenty Magazine, outlining Nestlé environmental initiatives, and

Safety Health Environment (SHE) Nestlé Magazine, outlining environmental achievements against annual targets.

Conducting various staff environment awareness activities such as:

Inclusion of an "environment" category in the debut launch of the Nestlé Oceania Packaging Innovation Awards in 2007 as well as the publicity of award results locally and internationally on various mediums; and

Provision of general environmental tips to improve staff impacts on the environment for example Figure 7 overleaf.

Activities for staff to raise environmental awareness through participation at events such as World Environment Day.



Figure 7 An Example of an Environmental Tip

There are a number of initiatives that have begun in association with industry partners. Within the reporting year Nestlé sat as a panel member at the Sustained Packaging Alliance Round Table Series 14 to address the challenges a brand owner faces in trying to label products for recycleability or recycled content.

According to action 6.6 Nestlé Australia is continuing to expand the provision of environmental and packaging information contained within the Nestlé Australia Internet to assist in the education of the Australian community regarding packaging. As part of this action the internet website is been updated continually, however site visit counts and download information is not yet accessible. Accessibility to website monitoring information is planned as a Year 3 action.

Other information available on the internet covers recycling and disposal information for post consumer packaging including the “Recycling near you" website link to help consumers find out what their councils do and do not pick up for recycling. Provision of information on the website also includes the Environmental Packaging Policy and Strategy as well as the Nestlé Annual Report, recent articles and Action Plans for Nestlé Oceania.



4.4 Covenant Goal 4 Supply chain members and other signatories able to demonstrate how their actions contribute to goals.


Performance Measure

Status

7.1 Design and implement a waste information management system to track and report annually by October each year on:

(i) packaging, environmental and waste minimisation projects within each site including:

management of products with QA, Aged, Expired status;

solid waste minimisation plans, and;

(ii) the amount and type of packaging material recovered for recycling;

(iii) the amount and type of packaging material sent to landfill; and

(iv) performance against established environmental and financial waste management benchmarks around service performance and commercial arrangements in relation to current waste management practices.

21, 27 Number of environmental and waste minimisation projects.

Amounts of consumer packaging from on-site collection, which is sent for recycling.

Amounts of types of consumer packaging from on-site collection, which is sent to landfill.

Percentage of self-assessments against environmental and financial waste management benchmarks undertaken.

Complete 7 Maintain the Nestlé’s No Waste at Work program (or equivalent) at all manufacturing sites and distribution centres in relation to solid waste minimisation and recovery 2.

7.2 Utilise waste information management system to develop performance targets in line with Covenant Key Performance Indicators by October 2006. Review and report against performance annually by October each year.

29 Performance targets established.

Reports generated by October each year.

Complete

8 Consider obtaining Membership of the Buy Recycled Business Alliance (BRBA) and progress the use of recycled materials within Nestlé, especially in product packaging.

8.1 Through the BRBA Coach Program:

Develop and adopt a buy recycled purchasing policy by March 2006;

Implement a buy recycled program by June 2007; and

Design and maintain an information management system to track and report on the purchase of recycled content products by October 2007.

26 Membership of the Buy Recycled Business Alliance by March 2006.

Buy Recycled Coach Program undertaken.

Buy Recycled policy adopted by March 2006.

Buy recycled purchasing program developed by June 2007.

Partially complete ongoing for Year 3



Objective 7 Action 7.1 under the Nestlé Action Plan was to design and implement a waste information management system to track and report annually by October each year. To date 85% of Australian sites have Waste Reduction Plans (Eco Plans) covering a number of initiatives to reduce energy, water and waste. Initiatives include:

Measurements for Quality Assurance to determine the Final Release Quality (FRQ) on a monthly basis at each individual factory. Each factory then conducts monthly Management Reviews for quality and maintains individual Action Plans to address quality failures. In the year 2 reporting period the average FRQ achieved has significantly improved, from 5.9% in 2006 to greater than 99% in 2007.

Measurements also take place for Aged and Expired stock. The 2006 target was to reduce aged and expired stock by 16%. The 2006 result was 11% however Nestle remains committed to a reduction in poor goods despite results having been hampered by the implementation of a major new information system during 2006.

Understanding and action towards the Oceania waste objective, being for a 5% reduction (this is total waste disposed of to landfill). This target is one of three Eco indicator reductions that Nestle Oceania has committed to delivering. Year to date waste is tracking at approx 9.6% increase on 2006. A number of factors contributed to this including, low production volumes, increased production trials, expired/damaged stock.

All sites have in place a sales and administration waste program where all manufacturing sites are required to establish and implement; waste management plans to increase the amount and type of packaging material recovered for recycling.

As part of action 7.1 Nestlé has been gathering data in order to analyse the following to meet annual reporting commitments:

i. the amount and type of Nestlé packaging material recovered for recycling

Packaging from on site collection sent for recycling between July 1st 2006 and June 30th 2007 was 2968kg, which equates to 27.3% of total waste.

ii. the amount and type of Nestlé packaging material sent to landfill Packaging from on site collection which goes to landfill between July 1st 2006 and June 30th 2007 was 7920kg, which equates to 72.7% of total waste.

Note: these are total waste figures not just consumer packaging.

As per Action 7.2 Nestlé have established performance targets in order to help meet the Nestle Oceania target for a 5% reduction in waste. All sites have developed Waste Reduction Plans to help achieve this target and annual reports are written.

Objective 8 In order to use recycling materials within Nestlé, especially in product packaging as per action 8.1 Nestlé has initiated a ‘Buy Recycled Program’ involving the development of a Buy Recycled Policy, planned for Year 3 coupled with a purchasing program.

Nestlé representatives have also met with the Buy Recycled Business Alliance (BRBA) to discuss membership. The possibility of joining the BRBA is still under review and a decision will be made within the next 12 months.



4.5 Covenant Goal 5 All signatories demonstrate continuous improvement in their management of packaging through their individual action plans and annual reports.


Performance Measure

Status

9.1 Contribute to Covenant Funding Arrangements as required each year.

Financial contribution made each year.

Complete

9.2 Submit an Annual report against the Action Plan.

28 Report lodged by 31 October each year.

Complete

9.3 Report against performance target once established.

29 Report against performance targets and timelines demonstrates continuous improvement.

Complete

9 Report on the performance against Nestlé's Action Plan demonstrating continuous improvement.

9.4 Undertake external verification of the achievement of Nestlé's Action Plan commitments for each Annual Report.

28 Verification complete and submitted with Annual Report, lodged by 31 October each year.

Complete

Objective 9 As part of objective 9 under action 9.1 the financial contribution has been made to the NPC.

This NPC Annual Report for year 2 has also been submitted as per the NPC extension offered to Nestlé by November 2007. This annual report includes Key Performance Indicators as outlined in action 9.3 and the overall performance based on targets that clearly demonstrates Nestlés continuous improvement regarding packaging.

Lastly an independent verification statement outlining Nestlés achievements in this reporting year, based on their 3 year action plan can be found attached in Appendix E.



5 Reporting against Covenant KPI’s KPI 1 - Total Weight of consumer packaging (domestic and imported sold per annum into the Australian market) and the total weight of products packaged.

This KPI is addressed through objective 2 of the Action Plan.

KPI 3 - Improvements in design, manufacture, marketing and distribution to minimise the environmental impacts of packaging.

This KPI is being addressed through objective 2 and objective 3 of the Action Plan.

KPI 4 - Changes to protection, safety, hygiene, shelf life or supply chain considerations affecting amount and type of packaging.

This KPI is being addressed through objective 2 and objective 3 of the Action Plan.

KPI 6 - Total weight, by type, of “non-recyclable” consumer packaging sold per annum into the Australian market.

This KPI is being addressed through objective 2 and 3 of the Action Plan.

KPI 16 - Signatories providing on-site collection facilities for post-consumer packaging recycling. This KPI is being addressed through objective 5 of the Action Plan.

KPI 21 - Estimated tonnage of consumer packaging sent (a) for recycling and (b) to landfill from on-site collection facilities.

This KPI is being addressed through objective 7 of the Action Plan.

KPI 22 - Adoption of the ECoPP and development of systems for its implementation. This KPI is being addressed through objective 1, objective 2 and objective 3 of the Action Plan.

KPI 26 - Implementation of Buy Recycled purchasing policy practices. This KPI is being addressed through objective 8 of the Action Plan.

KPI 27 - Establishment of baseline performance data This KPI is being addressed through objective 2 and objective 7 of the Action Plan.

KPI 28 - Annual Reporting against Action Plan.

This KPI is being addressed through objective 9 of the Action Plan.

KPI 29 - Demonstrated improvement and achievements of milestones in Action Plan. This KPI is being addressed through objective 2, objective 7 and objective 9 of the Action Plan.

Education - Provision of consumer information to enable more informed behaviour. Education is being addressed through objective 6 of the Action Plan.



6 Nestlé NPC Contact Please find inserted Nestlé’s contact for information regarding this National Packaging Covenant Action Plan:

Jacky Nordsvan

Nestlé Australia Ltd

GPO Box 4320

SYDNEY

Phone: 02 8756 2211

Fax: 02 9736 0426

Email: [email protected]



mailto:[email protected]

7 Conclusion Following the analysis of all 2006 to 2007 National Packaging Covenant documentation, it can be seen that Nestlé Australia has had a successful Year 2 reporting period. Of the 25 proposed actions, 18 were successfully completed, 5 partially complete, 1 not attempted, 1 deleted and of the 11 KPI’s outlined in the 2005 to 2008 Action Plan, all were addressed.

The focus is now set for the final year, with plans to conclude all actions partially complete and to undertake fully the remaining actions that have not been attempted.

So far the trend towards continual improvement from Year 1 to Year 2 shows that NPC progress is solid and effective, outlining Nestlé’s commitment to the NPC ideals and targets for long term improvement of environmental packaging performance.



Appendix A Nestlé’s Packaging Policy



Packaging Policy

Nestlé is committed to reducing the environmental impact of

packaging, without jeopardising the safety, quality or consumer

acceptance of its products. It is Nestlé’s objective to develop safe

and wholesome packaged foods using the most efficient and

appropriate packaging materials available, while, at the same time,

satisfying consumer requirements and expectations.

Nestlé seeks packaging solutions that:

• Result in the lowest possible weight and volume of packages and

optimise efficiencies in transport and distribution.

• Take into account new packaging materials and processes that

reduce the impact on the environment.

• Avoid the use of substances that can adversely impact the

environment during packaging production, recovery, and disposal.

• Decrease packaging waste at all stages, including package

manufacturing, distribution, utilisation and disposal.

• Increase the use of recycled materials wherever possible.

• Increase the recycleability and compatibility of its packages with

existing waste management schemes.

• Ensure consumers are aware of the correct recovery and disposal

options for the packaging of Nestlé products.

Jorge Sadurni

CEO Nestlé Oceania

in Oceania

Appendix B Nestlé’s Environmental Policy



Environmental PolicyOceania

Nestlé is committed to the integration of environmental programs

and practices into our daily business activities at all workplaces so as

to meet the needs of customers, consumers and the Company.

With this policy we are committed to:

• Identifying and reducing risk to minimise environmental impact

arising from our operations and products.

• Operating our business to meet or exceed environmental legislation

and other requirements applicable to Nestlé.

• Establishing measurable objectives and targets to ensure continuous

improvement aimed at preventing pollution and improving

environmental performance.

• Providing information, instruction, training and supervision to all

employees and contractors.

• Encouraging a similar environmental commitment from our

suppliers and contractors.

• Consulting with internal and external stakeholders, including local

communities on environmental matters.

• Developing and implementing an Environmental Management System.

• Ensuring all managers and employees understand their

responsibilities and accountabilities to deliver against the company’s

Environmental Policy.

Jorge Sadurni

CEO Nestlé Oceania 1 November 2004

Appendix C IDAS Report



National Packaging Covenant KPI Report Survey Name: The NPC Survey 2007 Company: NPCIA

Lodged Date: This data has not yet been lodged User: NESTLE AUSTRALIA LTD

KPI 1A : Report tonnes of packaging by material type and source(local or imported)

Locally sourced packaging materials (TONNES per annum):

Paper 547

Cardboard - Standard (inc liquid paper board) 20431

Cardboard - Waxed 158

Cardboard - High Wet Strength 48

Plastics - Type 1 (PET) 50

Plastics - Type 2 (HDPE) 523

Plastics - Type 3 (PVC) 9

Plastics - Type 4 (LDPE) 903

Plastics - Type 5 (PP) 3320

Plastics - Type 6 (PS) 1505

Plastics - Type 7 (Other) 273

Glass 10506

Aluminum 33

Steel 7050

Composites 2913

Other 221

Imported packaging materials (TONNES per annum):

Paper 0

Cardboard - Standard 0

Cardboard - Waxed 0

Cardboard - High Wet Strength 0

Plastics - Type 1 (PET) 0

Plastics - Type 2 (HDPE) 0

Plastics - Type 3 (PVC) 0


0Plastics - Type 5 (PP)



Glass 0

Aluminum 0

Steel 0

Composites 0

Other 0

Total Tonnes of packaging 48490

KPI 1B : Net tonnes of packaged product sold 323511

KPI 1C : Ratio of product to packaging (by weight)

KPI 6A : Enter the total weight of non-recyclable consumerpackaging sold per annum into the Australian market.


Plastics - Type 5 (PP) 3320



Non recyclable paper/cardboard (waxed or High wet strength) 206

Composites 2913

Total 9120

KPI 6B : Total non recyclable packaging as a percentage of totalpackaging sold

KPI 16A : Do you have on-site collection for recycling facilities? (postconsumer packaging i.e. used packaging materials containers,wrapping or boxes etc used by staff or signatory)

Yes

KPI 16B : What types of on-site recycling facilities are provided?

Paper/cardboard Yes

Plastics Yes

Metals Yes

Organics Yes

No Other

KPI 21 : Enter the estimated tonnage of consumer packaging sent forrecycling and to landfill from onsite collection facilities (refer to KPI16)

KPI 21A Consumer packaging from on-site collection which is sent forrecycling

Total tonnes 2968

Percentage of total waste 27.3

KPI 21B Consumer packaging from on-site collection which is sent tolandfill

Total tonnes 7920

Percentage of total waste 72.7

KPI 22A : Has the Environmental Code of Practice for Packagingbeen formally adopted ?

Yes

KPI 26A : Have you adopted a buy recycled purchasing policy orpractices? No

KPI 26B : Provide examples or quantitative data from this adoption

33345

Total amount of product purchased that has recycled content (tonnes)

KPI 27A : Did you report indicative baseline data (where available),including qualifiers & assumptions, by 31st October 2006 Yes

KPI 27B : Have you reported established baseline data by 31 October2007? Yes

KPI 28A : Report lodged by 31 October each year and outlineprogress against baseline data, individual Action Plan commitments,targets and timelines.

No

KPI 29: Annual report clearly demonstrates continuousimprovement and performance against individual targets andtimelines in Action Plan.

Yes

Appendix D Nestle Life, Plenty Magazine and SHE Nestlé

Magazine articles





Nestlé Life Magazine



Plenty Magazine



SHE Nestlé Magazine

Appendix E Independent Verification Statement



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