Governance & Risk Management

ABF is a holding company with very few direct employees. Our organisational structure is highly decentralised.


Our companies devise procedures appropriate to and compliant with local laws, cultures and operating conditions. These procedures, however, must comply with our overriding corporate requirements set out in the ABF Business Principles. Management responsibility is devolved to the individual businesses and consequently their Boards are responsible for achieving compliance with the Group Health & Safety and Environment Policies (as laid out in section 3 of this report). In addition, every subsidiary company has an accountable Board director and a senior manager responsible for safety and environmental matters.

Risk Management

CEOs of subsidiary companies are required to sign and submit an annual risk questionnaire which covers all types of business risks including HS&E risks. The broad HS&E risks we have identified are:

  1. Significant environmental damage;
  2. Violation of health and safety practice or significant injury to employees, contractors or visitors, principally from:
    1. Fires and explosions. Our businesses handling organic powders such as sugar and flour take great care to ensure that they are stored and handled in appropriately designed vessels and equipment. The risks have been assessed at each site, as has compliance with the European Explosive Atmospheres (ATEX) Directive.
    2. Workplace transport accidents. The scale of our operations necessitates the use of heavy goods vehicles, forklift trucks and other vehicles within our site boundaries, sometimes near to our employees, which causes risk and requires stringent controls.
    3. Poor training and awareness of contractors. Each of our businesses uses contractors for either specific projects or for routine specialist tasks. The risks associated with managing a transient workforce are significantly greater than for a fixed permanent workforce and we recognise that additional controls are needed to minimise them. Our businesses have managers with special responsibility for managing contractors.
  3. Product contamination;
  4. Legal and reputational risk from the above.

Des Pullen, Human Resources Director, reports to the CEO and is responsible for ABF’s HS&E Policies and performance. He is supported directly by a Group HS&E manager who also works with the Director of Legal Services on compliance issues. Each subsidiary company must comply with the ABF HS&E policy as a minimum and must carry out an annual self-assessment of their risk-management activities and performance. Companies submit a detailed annual HS&E performance questionnaire which provides information regarding:

  • Key H&S data (deaths, reportable injuries, lost time injuries, reportable diseases, regulatory visits & enforcement actions);
  • Key environmental data (energy usage, water usage, waste production, complaints, regulatory visits & enforcement actions);
  • Improvement plans for significant issues; and
  • Details of any targets for coming year

We require all subsidiary companies to implement the requisite level of risk-management controls to ensure compliance with our HS&E Policies. This enables the companies to install the level of risk management system which best suits their business needs and local circumstances.

Managers, operators and HS&E specialists work together to identify the main hazards and assess the risk of harm. Appropriate operational procedures and controls are put in place and all employees are provided with relevant information, training and supervision to reduce and manage those risks. Strong emphasis is placed on preventing accidents and incidents but, should they happen, companies have appropriate emergency plans which they rehearse routinely.

a. Management Systems

Twenty eight of the 236 manufacturing sites have an environmental management system externally certified to the internationally recognised ISO 14001 standard or equivalent. They include British Sugar’s UK sites, the ABN sites, three Allied Mills plants, 6 George Weston Foods sites, two Nambarrie Tea sites, an Allied Bakeries site and the AB Mauri yeast factories in Turkey and Portugal.  In fact, ABN was the first animal feed company in the UK to gain accreditation to ISO 14001.  The remaining manufacturing operations and Primark stores have environmental management systems which aim at compliance with the key aspects of ISO 14001.

British Sugar was the first company in the world to have its occupational H&S management system externally certified by Lloyds Register Quality Assurance to OHSAS 18001. In total, 23 of our manufacturing sites are certified to nationally recognised health and safety management systems. They are British Sugar’s UK beet factories, the Allied Mills’ operations, the two Nambarrie Tea sites in Belfast, the AB Mauri yeast factory in Turkey and 13 George Weston Foods’ factories in Australia and New Zealand (to AS/NZA 4801).

During 2006 the company safety specialists met as a group to update themselves on developments and exchange examples of good practice. In addition and for the first time, the senior operational managers from all of our operations in China met to review their safety standards and performance.  These specialists will meet again in 2007 to continue the process of sharing learning and experiences. Guidance on HS&E legislation is issued to UK companies using the H&S and Environment websites and work has started on developing mechanisms to improve networking and mutual support between our global operations, which will be available later in 2007.

b. Acquisitions

Before we decide to acquire a new company we always engage external independent specialists to carry out detailed safety and environmental due diligence investigation. The purpose of this is to understand the risks and potential liabilities, to assess how well the target company is managing them and to allow us to plan how best to address any material compliance and governance issues on acquisition. When a company has been acquired it has to undergo a transitional period to upgrade its performance to that required by ABF. The length of that transition depends on the degree of improvement required but is minimised by use of ABF corporate support and guidance to directors.

c. Performance Targets

Due to the considerable diversity of operations it is not appropriate for ABF to impose HS&E improvement targets on subsidiary companies.  Instead, each company sets itself targets as appropriate to the nature of their operations and risks. The safety performance of the businesses is reported monthly to ABF and forms part of formal quarterly reviews between ABF and the directors of the operating companies. The environmental performance of companies are reported and analysed annually.

d. Auditing and Verification

In 2006 we again employed Environmental Resources Management Ltd (ERM) to continue their rolling programme of audits of the management of HS&E risks at a representative range of group companies. To date, external specialists have carried out 74 independent audits. The sites are selected on the basis of materiality with regard to the range of issues as well as the contribution to the HS&E performance of ABF as a whole. The sites audited in 2006 were located in Australia, Brazil, China, Finland, India, Portugal and the UK.

ERM also carried out a sample data verification process on ABF's global HS&E data to check completeness and accuracy. Their verification statement is appended.

Each year the ABF Board reviews the verified results of these questionnaires and provides strategic direction. Companies are required to develop action plans as appropriate and progress is monitored by the Group HS&E manager.

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