Fluorcorp05 Env Usa

FLUOR HSE 2005 ANNUAL REPORT
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Table of Contents:
3 4 5 9 10 11 21 24 25 26 26 28 29 31 33 39 Chairman and CEO Message Sr. VP of HSE Introduction Rewards & Recognitions Fluor HSE Professional Publications and Presentations HSE Management System Sustainable Development and Corporate Responsibility HSE Performance Client Perspective Client Review Results for HSE People Development HSE in Design Global HSE Initiatives HSE Awareness Executive Management Perspective on HSE Project Achievements 2006 Outlook
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FLUOR 2005 ANNUAL REPORT REPORT FLUOR HSE HSE 2005 ANNUAL
CHAIRMAN AND CEO MESSAGE BY aLan BoecKmann
The challenge of protecting the environment for future generations is everyones business, but success depends on leaders of industry stepping up and leading the charge. At Fluor, we want to leave the world better than we found it.
As a leading engineering and construction contractor in a range of global industries with diverse cultures and operations in remote locations, Fluor strives to set a benchmark for excellence in the protection and development of health, safety, and environmental assets and endeavors. We recognize that with leadership comes great responsibility and that future generations are relying on us to protect and preserve the natural environment. We promote sustainable development by managing our operations in a responsible way. Fluor works closely with our clients, suppliers, and contractors to implement and sustain a comprehensive Health, Safety, and Environmental (HSE) program. Our proven HSE Management System integrates the highest international standards into each project phase and verifies our consistent and complete performance. Sustainable development in project execution has increased our clients interest in our significant HSE achievements. Using a total project approach, our experts strive to meet clients HSE objectives and to provide safe, cost-effective facilities in harmony with their communities.
Commitment
Many of Fluors recognized experts in specific health, safety, or environmental disciplines work with public agencies and professional associations worldwide to develop industry and governmental standards, as well as industry best practices, to protect people, property, and the earths precious environment and resources. While Fluor has been supporting emergency relief efforts in the U.S. and around the globe for many years, 2005 proved to be an unprecedented year for natural disasters. From tsunamis to earthquakes to hurricanes, Fluor was there to provide support through the Fluor Foundation, as well as individual employee contributions. When Hurricane Katrina, the worst natural disaster in U.S. history, caused devastation across the Gulf Coast, Fluor was there, and we continue to be there today repairing lives and rebuilding communities. Fluors commitment to maintaining a healthy, safe, and environmentally sound workplace extends to every employee in our company. Our management teams actions reflect their commitment to our HSE program and are recognized by our employees worldwide. We expect both organizational and personal accountability for HSE performance. Success in sustainable development comes down to commitment, leadership, and perseverance. I am pleased to present you with Fluors HSE Annual Report, and I am proud of our employees commitment to HSE excellence.
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HSE InTrodUcTion BY GARRY FLOWERS, SR. VICE PRESIDENT
A world-class HSE function is reflected in a companys culture. At Fluor, HSE considerations are put at the forefront of everything our employees do whether designing a large-scale pharmaceutical laboratory or constructing that facility.
One of the biggest challenges to achieving a world-class HSE culture is managing change in the organization, the company, and subcontracting organizations. One of the major changes occurred in 2005 when Fluor established a new HSE Operating Board charged with enhancing our overall integrated HSE approach and setting strategic direction for Fluor. We strive to continually improve our HSE Management System through an annual review process, based on comments received from design, construction, operations, and maintenance personnel within Fluor. Employees are encouraged to submit feedback through our awardwinning knowledge management tool. Our HSE Management System put us in good stead to respond to the unprecedented number of disasters in 2005, including Hurricanes Katrina, Rita, and Wilma. As part of our overall HSE program, we are an active member in the Disaster Resource Network, an adjunct of the World Economic Forum. As a result of our long-standing relationship with the Federal Emergency Management Agency, we have developed a professional staff that is sensitive and responsive to disaster environments, and as a construction industry leader, we maintain a variety of skills required to perform disaster recovery operations. Fluor is one of only three companies to hold a contract with the agency, and our employees training and experience working in a FEMA environment is a clear differentiator. In 2005, our HSE performance continued to lead the industry, although incidence rates increased fractionally. We encountered more exposure due to 13 percent more hours worked than in 2004. Of total hours worked, non-U.S. markets accounted for more than 75 percent in 2005. Our lost work day case incidence rate was 0.05, the same as our 2004 rate, while our total recordable incidence rate was 0.46, which is an increase of 24 percent from 0.37 in 2004. I am sad to report that despite our excellence in HSE performance, we suffered four employee and six subcontractor fatalities. To address such incidents, we strengthened processes to focus on specific preventive actions. In addition the HSE Board is evaluating new methods of disseminating information in these specific areas of focus. In 2006, we will continue to embrace change and provide a strong HSE approach for our clients, our workers, and surrounding communities.
HSE OPERATING BOARD Vision To be the preeminent HSE leader, consistently delivering solutions to improve the life cycle of our projects and promote the wellbeing of our employees, clients, and the communities in which we work and live. Areas of Responsibility Work Processes & Procedures Communications People Development & Training Audit & Assessment Performance & Improvement Regulatory Compliance
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REWARDS & RECOGNITION

EXTernaL Awards
In 2005, Fluor was recognized for excellence in HSE performance by several external organizations.
Fluor Fernald won one of only three Best-in-Class Awards given in the
Waste / Pollution Prevention category from the U.S. Department of Energys Office of Environmental Management.
The Fernald Closure project won an award for innovatively deploying on-
site, used equipment that had been scheduled for demolition to construct a treatment facility for removing radium from washwater as part of the cleanup of highly radioactive waste stored in silos.
Fluors IBM Tucson project received the Governors Pride in Arizona Award
in the Recycling Category. The award recognizes achievements to promote recycling on the project and surrounding community.
AMECO was recognized by the National Safety Council (NSC) and the South Carolina Chamber of Commerce
for achieving an outstanding record of safety excellence. Three distinguished awards were presented by the NSC: Million Work Hours Award for surpassing 10 million safe work hours without a lost-time injury Perfect Record Award for completing 12 consecutive months without incurring an occupational injury or illness leading to days away from work or a fatality Green Cross for Safety Excellence Award for achieving a total lost workday case incidence rate of zero and with no fatalities during the 2004 calendar year AMECO also received the South Carolina Chamber of Commerce Safety Award for achieving 1,000,000 safe work hours without a lost-time incident.
Fluor Constructors received four awards:
It is with sincere pride that Fluor Constructors received these prestigious awards which are an acknowledgement of the dedication and commitment of our craft workers and staff, said FD Construction Operations leader Ron Pitts. With ongoing continuous performance improvement, we can look forward to enhancing the high standards of health, safety and environmental excellence, to which were all committed.
The Fluor Constructors BP Toledo Refinery Project received an Award of Merit from the National Maintenance Agreements Policy Committee for 87,692 work hours performed from January 1 through December 31, 2004 with zero recordable injuries. 22nd Annual Thomas J. Reynolds Award for Excellence in Construction Safety & Health 2004 from the National Erectors Association Fluor Constructors has won this award for the past 20 consecutive years. The NEA is a nationwide network of more than 5,000 union contractors, local union contractor trade associations, industrial-maintenance contractors and industry suppliers. The safety awards were created in 1982 by the NEA Safety & Health Committee to recognize outstanding achievement in minimizing the number of worksite accidents. Safety Award from the Gas Processing Association of Canada (GPAC) Fluor Constructors Canada received this distinguished award for its combined field-safety and office-safety excellence. Fluor Constructors Canadas self-perform operations had no recordable incidents during the entire year. GPAC is a nonprofit organization formed to promote the interaction and exchange of technology with those involved in the hydrocarbon-processing industry. Award of Merit from the National Petrochemical & Refiners Association (NPRA) Fluor Constructors received this milestone award for having incurred no recordable incidences during 2004 for work at the BP Toledo refinery in Oregon, Ohio. This award is for self-perform and subcontractor operations. NPRA membership is composed of more than 450 companies, including virtually all U.S. refiners and petrochemical manufacturers. The Contractor Award for Meritorious Safety Performance is presented to process-area contractors that have achieved a total recordableincidence rate of 1.5 or less during the year and worked a minimum of 20,000 hours at the site.
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Fluor Australia earned Western Australia WorkSafe Plans highest honor, the
Platinum Award. The honor, bestowed by the West Australian government, is in recognition of the excellent management of safety and health in the workplace, as well as Fluors contribution to the reduction of work-related injury and disease in Western Australia. The Platinum Award went to the Perth office and an Operations & Maintenance (O&M) site in the Pilbara CMM, located in Karratha. Another Fluor O&M team working at Fluor Australia Karratha Engineering services was presented with the prestigious Gold Award for its contribution to the WorkSafe Plan. The WorkSafe Plan is an occupational safety and health (OSH) management system assessment methodology developed and promoted by Western Australias safety regulatory authority, Western Australia WorkSafe. Each key element of the plan indicates well-developed OSH management systems, a high level of implementation, and evidence of ongoing OSH improvement and OSH system maintenance activities.
Fluor United Kingdom earned two Royal Society for the Prevention of Accidents (RoSPA) awards
based on a detailed summary of the implementation of Fluors HSE Management System, incident statistics, and HSE training.
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RoSPA Presidents Award (for the fourteenth year!) RoSPA Construction Engineering Industry Sector Award
Fluor UK also received the British Safety Council National Safety (BSC) Award, for the 18th
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InTernaL Awards
Fluor made a bold commitment to safety excellence with the introduction of our ZERO AccidentsSM recognition and reward program in 1994, which established stringent standards for safety worldwide. Fluors program was based on the Construction Industry Institute Task Forces recommendations for achieving zero injuries, which had identified highimpact zero incidents techniques used to achieve safety excellence. In 2004, Fluor upgraded the ZERO AccidentsSM program by incorporating health and environmental facets and renaming it the ZERO IncidentsSM program. Because Fluor takes great pride in its accomplishments in this area and in being an industry leader, the company continues to recognize and promote outstanding HSE performance. In 2005, the program was upgraded again to include Four and Five Star awards. The ZERO Incidents program stringent criteria are updated annually to reflect the companys performance goals. The five criteria in 2005 included the recordable rate plus four additional criteria as follows.
PROJECTS Award
H HH HHH HHHH HHHHH
OFFICES Award
H HH HHH HHHH HHHHH
Recordable Rate 0.57 0.75 0.38 0.56 0.19 0.37 0.01 0.18 0.00
Recordable Rate 0.15 0.20 0.10 0.14 0.06 0.09 0.01 0.05 0.00
4 4 4 4
Additional Criteria No Lost Time Injuries or Illnesses No Environmental Citations or other Regulatory Agency Citations Successful completion of the Award Verification Audit and/or Corporate HSE Audit Implementation of the 12 High-Impact Zero Incident Techniques
consecutive year. The BSC award was based on Fluors HSE policy, organization, staff competence, planning, and incident statistics.
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The following projects achieved zero incidents in 2005 and earned the prestigious ZERO Incidents program Five-Star Award.
Project Location Safe Hours
Integrated Isocyanates Project ICA Fluor Offshore Yards Procter & Gamble Cabyao Plant KOC Effluent Water Disposal Plants AFCAP II Program Fluor Daniel India Private Limited Kuwait Oil Company Rebuilding of GC-15 and the Upgrade of BS-131 Civel Mechanical Maintenance Fluor SA Espana, Madrid and Asturias offices IE30 Bulk Clean Manufacturing Facility Katrina Relief Project Kharafi National Construction Activities for BS-131 Phase 2 NOx Reduction Project Sakhalin-1 EPC-1 Chuck Lenzie Generating Station Hazelwood Power Station Merk MK-431 & SAS Project TXU Energy Monticello SES Corning Taichung Project Fluor San Jose Hitachi IBM Fluor United Goninan Maintenance Alliance, Bluescope Steel FMS@Georgia Power Plant Bowen Progress Energy, FGD Project Revisie 2005 @ Levensduurverlenging Project BS12 The Kennecott Smelter Project Victory Complex O&M BP Toledo Clean Fuels Cetac II - Task Order 6 - Manas Air Base Fluor / 3 M D-10 Project Fluor Trinidad Operations, Port of Spain Genesis - New Cell Room Project, Inoes Chlor Ltd. Karratha Engineering Services, 7 Mile Dampier Kennecott Smelter Project KPNC Project Engineering Services, Mina Abdulla Lyondell Chemie Nederland SBET, Botlek Merck VMF Project Chevron Phillips Maintenance DuPont-Chambers Works Fluor Daniel Consultants BV GSK Dartford Project Immobilization Consolidation Project 3M Luna Energy Facility Tyndall AFB Waterschap Hollandse Delta SBET Wyeth QC Lab Sanford Zumbro River Contractors
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Shanghai, China Mataredona, Veracruz and El Empalme, Mexico Laguna, Philippines Ahmadi, Kuwait Kirkuk, Iraq New Delhi, India Ahmadi, Kuwait Dampier, Western Australia Madrid, Spain Kinsale, Ireland Louisiana Ahmadi, Kuwait Baytown, Texas Chayvo, Sakhalin Region Russia Las Vegas, Nevada Morwell Victoria, Australia Barceloneta, Puerto Rico Tatum, Texas Taichung, Taiwan San Jose, California Warrawong, Australia Cartersville, Georgia Roxboro, North Carolina The Netherlands Magna, Utah Baghdad, Iraq Oregon, Ohio Baghdad, Iraq Decatur, Alabama Trinidad & Tobago, West Indies Runcorn Cheshire, England Karratha , Western Australia Magna, Utah Ahmadi , Kuwait Maasvlakte Rotterdam, The Netherlands Durham, Raleigh, N. Carolina Guayama, Puerto Rico Deepwater, New Jersey Bergen Op Zoom, The Netherlands Dartford, Kent, United Kingdom Wroclaw, Poland Deming, New Mexico Tyndall AFB, Florida Dokhaven, Rotterdam, The Netherlands Sanford, North Carolina Rochester, Minnesota
15,000,000 6,000,000 6,000,000 5,000,000 3,500,000 3,500,000 3,000,000 1,250,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 750,000 750,000 750,000 750,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000
The following projects or office earned Million Plus Safe Work Hour achievement awards, meaning they had no lost workday cases.
Project Location Safe Hours
Greenville S.C. Office Sakhaln-1, EPC-1 Project Connect Project for London Underground Limited ICA Fluor IH Offshore Yards AFCAP II Program Chuck Lenzie Generating Station K Basin Closure Plutonium Finishing Plant Closure Sulfide Leach Project Waste Storage and Disposal Corning Taichung Deactivation & Decommissioning Project San Jose Hitachi (formerly IBM) Genesis New Cell Room Project, Ineos Chlor Ltd ICA Fluor Paleocanal Chicontepec ICA Fluor Terminal LNG NEC US Embassy NOx Reduction Project Progress Energy FGD Project Soil & Water Remediation / Groundwater Vadose Zone
Greenville, South Carolina Chayvo, Sakhalin Region, Russia London, England Mataredona, Veracruz and El Empalme, Mexico Kirkuk, Iraq Las Vegas, Nevada Richland, Washington Richland, Washington Antofagasta, Chile Richland, Washington Taichung, Taiwan Richland, Washington San Jose, California Runcorn, Cheshire, England Poza Rica, Veracruz Mexico Altamira, Mexico Kingston, Jamaica Baytown, Texas New Hill, North Carolina Richland, Washington
30,000,000 7,000,000 6,000,000 5,000,000 4,500,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000
The Silver Cross Award is bestowed upon employees who have performed lifesaving actions. It is the highest recognition the company can give a member of the Fluor team. In 2005, Fluors four Silver Cross recipients aided others who experienced lifethreatening situations ranging from a heart attack to a potential fall or suspension hazard. They included a citizen of China and an employee who was named Firefighter of the Year in his community.
Fluor Hanford Projects Drive Environmental Stewardship With Technical Achievements
Four Hanford projects received awards, ranging from improved worker safety to reduction in costs. The Plutonium Finishing Plant Closure Project earned the 2004 Fluor Hanford Environmental Stewardship Award. The Waste Receiving and Processing Facility was presented a Technical Innovation Award. Two projects of Fluors Closure Services and Infrastructure organizations received Environmental Recognition Awards. Our real mission is environmental cleanup, said Fluor Hanfords President & CEO Ron Gallagher. I am very proud to assist in presenting these awards that recognize the efforts and innovation of our projects and employees. These awards highlight daily work practices that demonstrate environmental compliance and stewardship.
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FLUor HSE ProfessionaL PUBLicaTions and PresenTaTions
In 2005, Fluor employees worldwide logged more than 60 papers and presentations regarding health, safety, and environmental topics by authors who are experts in various industries and businesses. Papers stem from new or unique ideas, which are presented to or published by a local or national society or conference. Fluor employees are encouraged to stay abreast of emerging and current technologies and share their knowledge outside the company. Fluors Professional Publications & Presentations Program (P4) promotes employees depth of expertise through the industrys trade media and professional conferences. By promoting this expertise, employees contribute significantly to Fluors ongoing efforts to differentiate the company from our competition. P4s purpose is to champion, encourage, guide, track, and recognize all technical publications and presentations by Fluor employees. Employees develop and present technical papers to local, national, and international audiences and also publish them in leading trade magazines. P4 provides a unique forum for Fluor to demonstrate its depth of expertise and creates opportunities to collaborate with our clients to document joint achievements, thereby extending client relationships well beyond the time frame of a project. The following list shows a few examples of Fluor employees HSE-related professional publications and presentations in 2005. (Only Fluor authors for each paper are named on this list.)
An Evaluation of Cost Effective Fireproofing for Process Structures by Sourabh Marakhwar and Srivalsan K.G. Annual VPP Self-Evaluation: By the Numbers by Richard O Zimmerman and Jack Griffith Bringing Fluors Safety Culture to Iraq by Phil Watson Building a Strong Culture for Health and Safety by Nancy Kralik CO2 Capture and Transport Technologies by John Barrie Construction Safety in Sub-Arctic Conditions by Pat Caughey Construction Hazard Recognition and Control by Miles Jaeger and Mark Hermanson Disaster Response in APEC - A Unique Opportunity by Bob Prieto Effective Environmental Compliance Strategy for the Cleanup of K Basins at Hanford Site, Washington by Thiruchitr Ambalam and David J Watson Evolution of DOE Safety Basis Documentation from Production to Closure at Fernald by Tulanda Brown Electromagnetic Radiation and Human Health by Cy Hardiman and Ali Zamanian Experience with NOx Continuous Emission Monitoring Systems, A Rational Approach by Vince Griffin and Murali Nannegari Fitness for Service and its Role in Mechanical Integrity: An Essential of PSM by Trevor Seipp, Shiju George and Alister Chieng Fuels Specification - Legislation and Industry Challenges by Irena Widziszowska Fundamentals of Construction Safety and Health by Tony ODea Hanford ALARA Center Showcases ALARA Techniques by Larry Waggoner Hazard Controls and ALARA Protective Measures at DOE Sites by Mark Hermanson, Larry Waggoner and Miles Jaeger Impacts of Safety and Quality in Environmental Restoration at Hanford by Steven S. Prevette Integration of HSE Issues in the Engineering and Construction Industry by Nancy Kralik Managing Project Health, Safety & Environmental by Guido Simons Process Hazard Analysis by Hans Gebel Safety & Productivity: A Case for the Link by Bob Prieto Safety Studies to Measure Exothermic Reactions of Spent Plutonium Decontamination Chemicals Using Wet and Dry Decontamination Methods by Michael J Minette, George W. Jackson and Andrea Hopkins The Partnering Against Corruption Initiative by Lee Tashjian The Impact of Environmental Legislation on Transportation Fuels and CostsHas the paradigm shifted? by Claus-Peter Haelsig Turning a Borrow Pit into a Wetland Mitigation Site: An Example of Opportunistic Environmental Management by Daniel Freeman Visionary Leaders at Work: Expanding the Fight Against Corruption by Alan Boeckmann
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HSE MANAGEMENT SYSTEM
Fluors HSE Management System (described in company practice 000-653-8000) was originally implemented in January 2004. At the end of 2005, revisions were made, reflecting our continual improvement process. The system provides an integrated tool for demonstrating the companys commitment to continually improve HSE performance, and it establishes a framework for how HSE aspects of Fluor projects will be addressed. Fluors corporate culture, supported by this HSE Management System, gives priority to HSE considerations for our employees and our stakeholders and is fundamental for achieving profitability. The structure of the HSE Management System incorporates several levels of control documents as indicated in the following diagram.
HSE COMMUNITY OF KNOWLEDGE ONLINE
Revised HSE Management System available to employees Enhanced home page to reflect organizational changes and Management System Fluor named a 2005 North American Most Admired Knowledge Enterprise winner
Some of the enhancements made to the HSE system during 2005 include: HSE Engineering Glossary and Reference document developed to provide non-HSE professionals with a quick reference to HSE terminology and to provide guidance to HSE professionals as they plan, budget, and execute projects. Stakeholder added to the HSE policy to better identify the comprehensive group the policy serves. Fluors HSE Operating Board responsibilities introduced and defined. References to the HSE Operating Board updated to reflect the new organizational structure. Forms removed as attachments and hyperlinked to the practices and procedures. Practices and procedures made more robust in the areas of environmental awareness, contractor selection and alignment, and HSE engineering. Practices and procedures revised to provide better clarification in the areas of substance abuse, emergency contact personnel, training, pre-task planning, incident reporting, and health management in the field.
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As stated by Alan Boeckmann, Fluors Chairman and CEO, in this years message, sustainable development in project execution has increased our clients interest in our significant HSE achievements. Fluor incorporates sustainable development and corporate responsibility in a myriad of aspects of engineering, procurement, construction, operations, and maintenance, ranging from community service and philanthropy to conservation to training of nationals.
DaLLas HeadQUarTers LEED TM AppLicaTion
In May 2005, Fluor announced that our corporate headquarters would move to the Dallas/Ft. Worth area. The move reflects the companys strategy to reduce operating costs, enhance efficiency, and become more customer focused. Fluor is seeking Leadership in Energy & Environmental Design (LEEDTM) certification from the U.S. Green Building Council (USGBC) for our new corporate headquarters. LEED is a green building rating system designed to guide and distinguish high-performance commercial and institutional projects, with a focus on office buildings. Fluor is submitting its application for certification to the USGBC in the Spring of 2006 and anticipates certification award in late 2006, pending USGBC final review. Supported by an inside-out-outside-in approach to the building design, the workspaces are efficient and infused with technology and furniture supporting Fluors global focus. A dynamic and light-filled 55-foot high atrium with cantilevered balconies and wood-clad dining room seems to float 40 feet in the air. The natural site, use of regional materials and low volatile organic compound products, and a high percentage of recycled materials used for construction of the headquarters building demonstrate Fluors commitment to sustainable design. The lighting and mechanical design emphasize reduced energy consumption. Fluors corporate headquarters is designed to achieve LEED certification for both the building and the interiors.
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SCORE!
Fluors outreach tool SCORE! (Supplier and Contractor Online Registry E-version) continued its success by registering twice as many suppliers in 2005, as compared to 2004. The database of perspective suppliers proved to be a major resource in achieving Fluors ambitious goals for using local suppliers in the aftermath of Hurricane Katrina (see 2005 Project Achievements FEMA Individual Assistance Project) by allowing easy access through the web-based application. During 2005, the functionality of the tool was enhanced by adding the capability to notify registered suppliers regarding opportunities on projects within Fluor. This tool has been very helpful in diversifying our supplier base as shown in the following graphic.
Breakout of SCORE! Diversity Supplier Registrants at Years End
3% 6% 10% 5% 1% 36% 7% 15% 17%
Women Owned Business Enterprise Minority Owned Business Enterprise Small Business Disabled Owned Business/NISH Hub Zone (SBA) Small Disadvantaged Business (SBA) 8(a) Program (SBA) Veteran-Owned Business Tribally-Owned Business Service-Disabled Veteran Owned Business
BLacK Engineer of The Year Award
Fluor project manager Tulanda Brown earned a professional achievement award as the Black Engineer of the Year for her work at the Department of Energy (DOE) Fernald site in Ohio where she was responsible for HSE initiatives. She developed an innovative approach to safety documentation that is now supported by both the DOE and the Defense Nuclear Facilities Safety Board as a new standard for remedial activities and site closure for DOE nuclear sites. Ms. Brown transferred to Fluors Government Group last year and is now assigned to Fluor Hanfords regulatory compliance organization.
AnTi-corrUpTion
Fluor believes that global business has a responsibility to create a brighter future for the nations of the world. Corruption is especially damaging to the engineering and construction sector because that sector makes such a critical contribution to international development. Corruption is also damaging to citizens of countries where it is practiced because foreign investment tends to be directed to other countries where business is predictable and operates within the rule of law. The single most important change in the fight against corruption over the past few years has been the globalization of American-style, anti-corruption standards. As part of the World Economic Forum, Alan Boeckmann chaired a multinational task force charged with establishing benchmark Business Principles. To date, more than 80 companies have signed these anti-corruption principles that
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address ethical conduct regarding bribes, facilitation payments, political contributions and gifts, charitable contributions, and sponsorships. Signatory companies are required to commit to two ideas: 1) a zero-tolerance policy toward bribery and corruption and 2) a broad-based, anticorruption program implemented to guide the behavior of its employees.
Green PUrchasing
Green purchasing attempts to identify impacts on the environment and to maximize resource efficiency. Fluor addresses the impacts of our operations by reducing wastes, emissions, and discharges, and by meeting the needs of the present without depleting future generations resources. In keeping with this commitment, Fluor has established HSE principles that emphasize green purchasing. The Fluor HSE principle for Sustainable Development states that procurement activities shall address green processes. Green purchasing is an important tenant of these green processes. As a global company, Fluor is working to educate our employees about green purchasing and to develop policies and programs that comply with requirements and offer green-purchasing options to clients for the execution of their projects. Now, more than ever, contractors are focusing on more than just technical decisions. Every technical decision has some degree of social, economic, and environmental implications that must be recognized and balanced.
WasTe MinimiZaTion
In addition to green purchasing, Fluor looks for opportunities to minimize waste. For example, renovation of Fluors Greenville office complex resulted in approximately 6,500 square yards (5,435 square meters) of 22-year-old carpet slated for disposal in a landfill. This volume of old carpet raised obvious environmental concerns, so recycle opportunities were investigated. With the support of suppliers, Milliken and Bonitz Flooring Group, Fluor identified a local charity eager to accept the donation of used carpet. AID Upstate, a local nonprofit agency serving more than 750 people living with HIV/AIDS in the communities surrounding Greenville, used the excess carpet in its renovation of an assisted living facility, an office annex, and a building to be used as a thrift store.
The U.S. Office of the Federal Environmental Executive defines green purchasing as the acquisition of recycled content products, environmentally preferable products and services, biobased products, energyand water-efficient products, alternate fuel vehicles, products using renewable energy, and alternatives to hazardous or toxic chemicals.
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SUsTainaBiLiTY aT The ConsTrUcTion SiTe
There are innumerable opportunities to develop sustainability in construction. As Dave Stayshich, one of Fluors Construction Technology Managers states, It makes too much sense to leave it alone! In the long run, sustainability benefits everyone. For sustainability, the question is when will overall company savings be realized as a result of implementing sustainability principles? On many of its projects, Fluor uses the 3Rs of resource conservation that apply to construction operations as described in the Sustainable Building Technical Manual published by Public Technology, Inc.: Reduce reduce waste production by increasing labor efficiency / productivity through a waste management program (e.g., reusable formwork)
Sustainability:
Reuse reuse leftover materials that are in satisfactory condition (e.g., wood), and Recycle recycle as much waste material that cannot be reused (e.g., sheetrock, siding, steel, insulation) Examples of steps that Fluor may implement to advance construction waste management are: Assessment of probable waste streams prior to construction Direct involvement of local recyclers Work with subcontractors on specific measures; reduction, recycling, reverse distribution Provision of waste management measures in contracts Emphasis of a clean site: continuous cleanup, end-of-day wrap-up Provision of training for everyone on the jobsite Publication of results Rewards for good results Other methods that Fluor employs to make projects sustainable are to train local craft workers, use eco-labeled products, use fly ash in concrete, and return unused materials to suppliers.
ConservaTion
Development which meets the needs of the present without compromising the ability of future generations to meet their own needs.
Commission on Environment and Development
The Lone Star Infrastructure team, led by Fluor, is involved in several environmental projects. Crews building State Highway (SH) 130 outside Georgetown, Texas are creating more than just a new road. They are making sure that bats have a home. Bat habitat construction, along with tree relocation and a fish-recovery program, are examples of the broad environmental outreach the SH 130 project has implemented. Bat houses were installed on the SH 130 bridges over the San Gabriel River in Georgetown. These houses can hold between 3,000 and 5,000 Mexican free-tail bats. Up to 70 percent of the bats diet consists of corn and cotton pests such as moths and beetles. Georgetown is pleased to welcome the animals because bats consume insects and offer a better alternative to pest control than using insecticides that are harmful to people and the environment.
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Training
Through our work in designing and building some of the worlds most complex industrial projects, Fluor has an extensive history of providing craft training in locations globally to meet client needs. The company continues to be actively engaged in providing training for local residents, thereby obtaining a local skilled workforce while providing career and economic growth for the local population. Four cases highlight the diversity of training programs and the personnel affected. Iraq Fluor trained Iraqi Ministry and City Municipality employees throughout Iraq. Each person received a total of four weeks of instruction. More than 83,000 individuals were trained in 2005 on basic safety, including fall protection, personal protective equipment, trenching and excavation, confined space entry, danger tag and lock-out, hazard communication, equipment operations, and rigging safety. Louisiana In an effort to support the economic recovery of Hurricane Katrina victims and accelerate the rebuilding process in the region, Fluor created several craft training centers and funded the training of the first 1,000 citizens whose homes and/or jobs were lost by the catastrophic storm. In total, the company trained thousands of individuals in centers in and around the areas where concentrated rebuilding of hurricane-damaged infrastructure occurred. Providing local jobs is a focus of our efforts, said Alan Boeckmann. We are pleased to fund the cost of training for the first 1,000 who were affected by Hurricane Katrina. Through teamwork and ingenuity, America will turn this tragedy into a new beginning for the entire region. Fluors work for the Federal Emergency Management Agency (FEMA) of providing temporary housing units for individuals displaced by the storm required a significant number of craft personnel. Prior to the hurricane, the craft labor market was already stressed due to outages, shutdowns, and turnarounds that occur this time of year across the U.S. Fluors rapid response in creating craft training centers to educate individuals in virtually every civil craft (electricians, pipe fitters, welders, equipment operators and riggers) accelerated the recovery progress in the Gulf region. Many of these workers became employed by Fluor, our Louisiana-based subcontractors, or other construction companies to install temporary housing units and perform other related work. Individuals who were interested in training or craft employment opportunities with Fluor were encouraged to register through the companys Job2Help program, a web site created through a Fluor and Monster.com teaming effort. Kazakhstan Fluor, in partnership with Parsons, is constructing a major oil and gas facility for Tengiz Chevroil. During 2005, the partnership trained approximately 25,000 Kazakh citizens in a broad range of topics, including office safety, confined space entry, protection from hydrogen sulfide, welding safety, permit to work, environmental compliance, and electrical safety. Total instruction hours exceeded 350,000 hours. Indonesia Fluors Behavioral Based HSE Program (BBHP) was implemented in Indonesia in late 2005 at an oil drilling field situated in a jungle environment spanning approximately 217 miles (350 kilometers). BBHPs objective is to increase safe work behaviors and influence the HSE culture through effective implementation of formal and informal safe work observation processes. The programs goal is to support the zero incident policy and to minimize injury, incidents, and loss.
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A formal safe work observation process is a major factor in successfully implementing the BBHP. For the roll-out in Indonesia, initial training and information sessions involved more than 40 individuals. These individuals included clients, HSE compliance staff, key site management, and other site personnel. Ongoing BBHP training was positioned to align with the site contractor processes, with BBHP training systematically cascading down through the workforce. An initial questionnaire provided valuable insights into the existing site culture and a baseline designed to track HSE culture development over the longer term. Substantial work was done for the initial BBHP roll-out, including creating an original design team and subsequent steering committee to oversee ongoing program maintenance. Challenges to the BBHP roll-out included language barriers, cultural differences, different levels of acceptable safety standards, workforce development challenges, logistical issues (e.g., site size, terrain, and weather conditions), and other local demographics. However, daily implementation challenges to the BBHP have not prevented the emergence of valuable quality data as a result of effective safe work observations. The data analysis process resulted in the identification and targeting of key areas of work behaviors for further action. The flexible nature of the BBHP allows for ongoing site adjustments, as necessary. As the program roll-out emerges from its infancy into a more mature stage, individual focus and commitment to safety issues and the effective use of the key BBHP tools, such as safe work observations, will have the greatest impact on the outcome. The BBHP will continue to be systematically implemented and adjustments made according to site requirements.
FLUor FoUndaTion
The Fluor Foundation, established in 1952, is the companys philanthropic organization. Its purpose is to respond to the needs, challenges, and opportunities of our society by providing financial assistance to various nonprofit organizations and educational institutions. Fluor Corporation and the Fluor Foundation annually contribute $4 million to $5 million to global programs and organizations. One of the Foundations four areas of giving is health and human services that focus on providing financial support to groups that provide community services in the areas of food, shelter, family assistance, emergency relief, and youth services. The Foundation can respond to disaster relief through a number of mechanisms including corporate contributions, employee giving, and Fluor employee community service. In 2005, the Fluor Foundation and employee contributions totaled more than $675,000 for disaster relief worldwide. Three other areas that the Foundation addresses are: Education Related, focusing on educational organizations and programs, universities and schools Cultural, providing support to visual and performing arts, museums, art education programs, symphonies, community art festivals, arts funds/councils and public television/radio Public/Civic Affairs, providing support to community and economic development organizations, organizations promoting volunteerism, and some public-policy organizations
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EmpLoYee DonaTions To CommUniTies
Each year, employees contribute to local community organizations by volunteering their time and talent to raise money. In North American locations, Fluor supports the United Way and provides the MakeA-Difference Program in which Fluor matches 50 cents for every dollar donated by employees to the United Way, as well as other health and human services organizations. In 2005, employees at more than 40 Fluor offices and project sites pledged more than $2 million to the United Way and other human services agencies throughout the U.S. and Canada. This amount increased to more than $3 million with the Make-A-Difference Program match. These contributions support 200 local United Way organization and more than 400 other human service agencies.
DisasTer ReLief, RecoverY, and ReconsTrUcTion
Fluor has an international workforce of more than 35,000 employees and a network of offices in more than 25 countries across six continents. The global reach, industry expertise, and broad capabilities support Fluors ability to quickly respond to disaster relief, recovery, and reconstruction throughout the regions of the world. Fluor maintains a leadership role in the development of the Disaster Resource Network (DRN), an adjunct of the World Economic Forum (WEF), and is an active member of the organization. The DRN is a global network of companies in the engineering, construction, logistics, and transportation sectors committed to helping humanitarian organizations disaster relief efforts. Through annual membership in the WEF, we help to sustain the activities of the DRN to identify and deliver human, material, and financial help to relief areas. The DRNs mission is to leverage the resources of the international business community to mitigate the human suffering associated with disasters. It acts as a bridge between businesses and humanitarian organizations making it easier for businesses to offer talent or in-kind donations during the emergency response phase of disaster relief. Fluor is working with member companies of the DRN to develop a mechanism to talk with governments at the national level to create systems that will help communities prepare for disaster or mitigate the effect of a disaster. Fluor strongly supports the development of employees skills that will benefit their local community in the recovery from local disasters such as floods, earthquakes, hurricanes and tornados, fires or explosions. Daily experience in safely working in hazardous environments such as chemical plants and refineries, nuclear facilities, and military installation refurbishment prepares us to help recovery efforts in hazardous environments. Fluor has worked with FEMA since 1997 to provide emergency and disaster response services across the United States. As a result, the company has developed a professional staff that is sensitive and responsive to disaster environments. Technical specialists are not only experts in their field, but also have FEMA training, enabling them to quickly and effectively respond to emergency situations. Fluor is one of only three companies to hold a contract with the agency, and and our employees have extensive training and experience working in a FEMA emergency environment. Specific Fluor disaster response actions in 2005 included the following examples.
TsUnami ReLief FUnd
On Sunday, December 26, 2004, a magnitude 9.0 earthquake rocked the ocean floor off the east coast of Indonesia, creating a massive tidal wave that caused the loss of nearly 150,000 lives and severe damage across southern Asia and eastern Africa. People all over the world rushed to help survivors and provide relief in affected countries, including Indonesia, Sri Lanka, India, Thailand, Maldives, Malaysia, Myanmar, and Bangladesh, as well as Somalia, Kenya, Tanzania, and the Seychelles.
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The Fluor Foundation made an initial contribution of $100,000 to the American Red Cross International Response Fund in December. In addition, Fluor Corporation donated $10,000 to the Disaster Resource Network. In January 2005, Fluor employees from offices and projects around the globe contributed $176,747 to help ease the suffering of those hit by the tsunami in southern Asia and eastern Africa. Employees were invited to contribute to relief agencies of their choice around the globe.
HUrricane KaTrina
Hurricane Katrina was the third major hurricane and first Category 5 hurricane of the record-breaking 2005 Atlantic hurricane season, hitting the southern U.S. coast on Auguest 29, 2005. The storm surge from Katrina caused catastrophic damage along the coastlines of Louisiana, Mississippi, and Alabama. Levees separating Lake Pontchartrain from New Orleans were breached by the surge, ultimately flooding about 80 percent of the city. Katrina is estimated to be reponsible for $75 billion in damages, making it the costliest hurricane in United States history; the storm killed at least 1,383 people. In the wake of Hurricane Katrina, the Fluor Foundation donated $100,000 and invited employees and retirees around the world to contribute to relief efforts. By September 30, those individual donations exceeded $329,000. The Fluor Foundation provided a 50 percent match to United Way of America Hurricane Katrina Response Fund and the American Red Cross. In addition, the company provided personnel to the World Economic Forums Disaster Relief Network. ICA and ICA Fluor in Mexico together pledged $100,000, and individual projects and offices around the world joined to raise funds, as well as collected donations of clothing and food. Employees in the United States also donated the value of Time Off With Pay/Vacation/Paid Time Off through December 21. These donations were matched by the Foundation on a 50 percent basis, and the employee and Foundation contributions were designated to the United Way.
SoUTh Asia EarThQUaKe
The combined efforts of Fluor employees in 26 locations who participated in the companys Building Futures Project touched the lives of more than 10,000 children around the world.
The Kashmir earthquake (also known as the Northern Pakistan earthquake or South Asia earthquake) occurred on October 8, 2005 with the epicenter in the Pakistan-administered region of the disputed territory of Kashmir in South Asia. It registered 7.6 magnitude on the Richter scale. The Pakistani governments official death toll was more than 87,000. Employees in the Camberley, U.K., office raised about $1,000 in contributions. Fluor Foundation contributed $15,000 to Save the Children, designated for earthquake relief.
CommUniTY Service
Support for schools
Employees at Fluors Santiago, Chile, office were in the middle of their campaign to collect school supplies, tennis shoes, and jackets for 150 children at Escuela Basica No. 478 when they noticed the lack of books in the school library and the state of disrepair of the pre-school bathrooms. As soon as their backpacks were distributed, they started a collection of books for the library and volunteered to repair the bathrooms. Employees working on three projects in Peru collectively distributed nearly 3,000 backpacks, and in Ilo, they conducted much needed renovation of the school.
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At the Ford Island project in Hawaii, after delivering 50 backpacks and supplies to children in a lowincome community, Fluor volunteers were inspired to begin planning the installation of a playground for the children. For the Fluor offices that decided to collect school supplies or other personal items for disadvantaged children, Fluor donated more than 7,000 backpacks, and ICA Fluor an additional 250. Employees also donated supplies to fill the backpacks.
CommUniTY Awards
Aliso Viejo, California: Spirit of Volunteerism Award
In April, the Fluor Community Involvement Team at Fluors Aliso Viejo office was recognized as an outstanding corporate volunteer team at the Orange County Spirit of Volunteerism Awards by the Volunteer Center Orange County.
Greenville, South Carolina: 2005 South Carolina Governors Volunteer Award
In April, Fluors Greenville office was presented with the South Carolina Governors Workplace Volunteer Award. This award is given to a corporation, business, or trade association that has demonstrated commitment to the community by supporting volunteer activities. One company is selected from a number of nominated companies and is recognized by the governor of South Carolina at a ceremony at the State Capitol in Columbia.
Hanford, Richland, Washington: ESD123 Award (Educational Service District 123)
Sponsored by the Southeastern Washington Association of School Administrators, school districts recognize someone from their community each year who has given to education. Fluors Hanford office and Bob Fluor, Vice President of Global Public Affairs, have been recognized for their outstanding contributions to students and communities across the region. The Educational Service District 123 covers 23 school districts throughout the area from Richland to North East Oregon and the Idaho border. The Hanford office supports seven of those districts.
Houston, Texas: Firefighter of the Year Assistant Chief Shayne Carter, Cat Spring Volunteer Fire Department Shayne Carter, Health, Safety & Environmental Manager at Fluors Houston
office, and a fellow volunteer were recognized for exceptional achievements by the 100 Club. The 100 Club is a nonprofit organization that benefits law enforcement and firefighters in a 14-county area in and around Houston. Last summer, both men were called into action after a cement truck rolled over on a narrow road trapping the driver inside the cab. After 90 minutes of grueling work, the driver was removed. Both volunteer firefighters have more than enough tenure to retire, but they continue to serve their community in an unselfish and valuable manner.
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HSE Performance
Fluor is proud of another year of outstanding HSE performance. The companys HSE performance goals were aggressive in 2005, but collectively, Fluor employees rose to the challenge. Fluors commitment to protecting our greatest asset our employees began five decades ago. Today, Fluors strong world-class HSE culture is sustained by unwavering dedication and personal commitment that begins with the CEO and is shared by every employee. This diligent commitment is evident on Fluors diverse and complex projects, which are often faced with geographical, social, cultural, economic, political, and environmental challenges. Exposure hours increased from 239,384,806 in 2004 to 269,717,990 in 2005, representing an increase of 13 percent. International markets accounted for more than 204 million, or 76 percent of work hours in 2005. Fluor ended the year with restricted workday case incidence rate of 0.15, a lost workday case rate of 0.05, and a total recordable case incidence rate of 0.46 per 200,000 hours worked. Fluor employees continue to put forth extraordinary effort to maintain the strong health, safety, and environmental culture and performance. In 2006, Fluor will strive to improve upon our HSE progress in 2005.
Office OperaTions
Some 337 projects and offices performed the entire year without experiencing a lost workday case. Additionally, 265 projects and offices ended the year without experiencing a single recordable case. Lost Workday Case (with days away) per 200,000 hours worked
.01 .08 .06 .06 .05
.05*
Fluors office exposure hours increased slightly from 21,680,105 in 2004 to 22,154,183 in 2005. International offices represented 53 percent of the hours. In 2005, Fluor showed improvements in the safety performance rates for office operations:
2004 Total recordable case incidence rate Restricted workday case incidence rate 0.06 0.01 2005 0.05 0.00
00 01 02 03 04 05 Total Recordable Cases per 200,000 hours worked .99
.87
.64
.50 .37
.46 *
Fluor offices experienced one lost workday case in 2005, for over 22 million worldwide exposure hours, resulting in a rate of 0.01 per 200,000 hours worked.
FieLd OperaTions
00 01 02 03 04 05
* Fluor & Subcontractors Worldwide
Field operations ended 2005 with positive momentum. Collectively, Fluor projects met the companys goals for restricted and recordable case incidence rates, 0.18 and 0.75 respectively. Worldwide field operations reduced lost workday cases from 20 in 2004 to 16 in 2005. This improvement is a result of a decline in U.S. lost workday cases, from 10 in 2004 to 6 in 2005. The U.S. achieved a lost workday case rate of 0.03 and non-U.S. field operations had a rate of 0.05, which was a decrease from 0.07 in 2004. This is a remarkable achievement considering that there was a 31 percent increase in exposure hours in 2005 for non-U.S. field operations. Exposure hours for field projects worldwide increased by 23 percent, from 58,705,097 in 2004 to 72,298,410 in 2005. Activity in Fluors U.S. markets increased by 16 percent, from 30 million in 2004 to 35 million in 2005. Non-U.S. hours increased from 28 million in 2004 to 37 million in 2005, an increase of 31 percent.
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SUBconTracTor FieLd OperaTions
Exposure hours for Fluors subcontractor field operations increased from 158,999,604 hours in 2004 to 167,128,431 in 2005. Non-U.S. markets accounted for more than 149 million or 89 percent of the subcontractor exposure hours. More than 2,100 contractor and subcontractor companies ended the year without experiencing a lost workday case. More than 2,060 subcontractor companies at Fluor sites achieved ZERO INCIDENTS and did not experience a single recordable incident in 2005
FLUors ProJecT SafeTY ALerT SYsTem
Fluor projects, offices, and contractors (total of 2,480 in 2005)

1% 3%
Fluors Project Safety Alert System quantifies the safety status of each project so that outstanding performance can be recognized and additional focus can be placed on those projects where improvement is needed. The Project Safety Alert System identifies projects with a total recordable case incidence rate exceeding the Fluor goal for the reporting period. Categories include: 1) Blue - World-Class: Managing safety at an incidence rate of zero 2) Green - Warning: Managing safety at or below the goal 3) Red - Alert Status: Managing safety above the goal
95%
world-class warning alert
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CLienT PerspecTive on HSE

RoBerT STinson, ProJecT Manager for Corning for design and consTrUcTion of a gLass sUBsTraTe manUfacTUring faciLiTY in TaichUng, Taiwan, provides insighT on conTracTor HSE performance and capaBiLiTies on a Large inTernaTionaL proJecT.
On a scale of one to 10, with 10 being the most important, how critical to Corning is a contractors HSE capability? Can you explain why?
Theres no question about it. The HSE capability of a contractor like Fluor is an absolute 10 in importance to Corning. Our people and safety are the highest priorities for us and we will never compromise on that. I write monthly reports which focus on four areas safety, schedule, quality, and cost. The priorities change from month to month, with one exception. Safety is always at the top of the list. A poor safety performance can override any accomplishments you might have on a project. So the ability of a company like Fluor to enforce and uphold the highest possible safety standards is an absolute necessity if they are going to do business with us.
Have you seen a shift in importance of HSE performance over time? If so, whats driving the shift and do you think it will continue?
Yes, theres been a shift. I think its driven by a Western influence, coupled with a growing universal care for people. Said another way, the value for individuals has taken its rightful place as a top priority. I think HSE is particularly critical when a project is outside of North America, like the Taichung project.
Fluor is the contractor for the Corning Taichung project. Can you cite some examples where the Fluor HSE function has made a difference for the project in areas such as whole lifecycle costs, field performance, subcontractor management and the like?
The fact that the Taichung project is in Asia is an important consideration. The lifecycle cost to enforce safety in Asia is more expensive. Corning and Fluor really have to manage safety ourselves here. Weve trained more people and, because of our stringent safety requirements, weve kept only the people who maintain the highest safety standards. At the same time, safety has improved the workmanship. High safety standards actually help maintain our timeline with fewer setbacks due to haste and carelessness. So, it has an overall positive effect and improves the project quality.
Can health and safety performance add to the profitability and value of a project?
No matter how you look at it, health and safety are costs to a project. Theyre not meant to save you money. When contractors ask us what the budget is for safety, we tell them there are no budget constraints. But safety pays off in many other ways. I mentioned earlier that I write a monthly report that always includes our schedule. Its really important for us to hit our timelines, and having good health and safety performance keeps us on track with our schedule.
How about environmental performance? Can it make a difference in the profitability and value of a project?
Good environmental performance is in line with Cornings values. We live and work in the communities surrounding our facilities. So do many of our customers. So, even though it does have associated costs, its very important.
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CLienT Review ResULTs for HSE
In 2005, as a part of Fluors Client Review program, 156 clients provided feedback on Fluors HSE Performance. Overall results of all reviews conducted resulted in a total HSE Customer Confidence Index of 74. The following breakdown shows the types and percentage of the 156 clients who participated in the review process, listed first according to Fluors business organization and then by the clients position in their companies.
by Business Group:
The Client Review process provides a formal, yet flexible, framework for engaging both Fluor and client personnel in a structured conversation. The process allows the client to communicate his or her issues and concerns, and encourages collaborative feedback. This process promotes an open dialogue in a neutral environment, avoiding the interrogative approach used in most traditional satisfaction surveys.
Lynn Kelly, Fluor Global Services
Energy and Chemicals Operations & Maintenance AMECO Government
33% 28% 27% 12%

2005 HSE Performance
by Client Functions:
Senior Management Project Management Project Controls/Finance Engineering Construction Plant/Site Management Process Procurement Business / Finance Management Maintenance Operations Other
Client Responses:
4% 23% 3% 10% 11% 4% 1% 3% 1% 25% 10% 5%
IndicaTor SUmmarY Performance Indicator Health, Safety & Environmental * 71 100 = High; 41 70 = Moderate; 1 40 = Low Index* 74
1. Does Fluor Conform to Your HSE Requirements? (134 valid responses) 49% Always Conforms 49% Usually Conforms 1% Sometimes Conforms 2. Have You Noticed Any Improvement in Fluors HSE Performance? (156 valid responses) 10% Improved Significantly 31% Improved 58% Stayed the Same 1% Declined
3. How Does Fluor Compare to Our Competitors in HSE Performance? (156 valid responses) 40% Above Competitors 44% Slightly Above Competitors 16% Same As Competitors 4. How Important Is HSE Performance to You (the client)? (151 valid responses) 75% Extremely Important 16% More Than Somewhat Important 9% Somewhat Important
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PeopLe DeveLopmenT
Focused career development is critical to maintaining the superiority of our peoples skills, knowledge, and experience and is a critical component of the Fluor HSE business strategy. A robust development process benefits Fluor, clients, and employees and allows Fluor to provide a highly skilled workforce for complex projects. In 2005, the corporate HSE group issued its Global Functional Track (GFT) for use in career planning. The HSE GFT is a set of documents that provides the framework and tools for understanding potential career paths and the required skills, behaviors, and knowledge required for those positions within the HSE discipline. The GFT addresses all HSE career paths, including HSE engineering and HSE construction management. In late 2005, the corporate HSE group finalized planning for its first Functional Development Forum (FDF). The HSE FDF is charged with identifying and developing individuals who have the desire and capability to become recognized experts in HSE and to ensure the continued development, recognition, and retention of seasoned Fluor HSE professionals. The FDF will designate protges and their mentors and sponsors and will also capture individual development plans in an online database. The FDF will be implemented in 2006.
HSE in Design
Fluor places special emphasis on developing engineering designs that fully consider and mitigate inherent risks associated with projects that could have the potential to cause harm to people or the environment. Appropriate, cost-effective HSE features are incorporated into project designs to minimize the potential for hazardous events or environmental impacts. HSE design criteria are incorporated into the engineering design of each project component, including processing equipment, supporting infrastructure, and ancillary facilities. Fluor requires that the HSE philosophy developed and applied to the basic engineering phase of a project also be applied consistently through the detailed engineering and construction phases of the project. Fluors formalized techniques for HSE reviews provide the mechanism for documented evaluation and verification of a safe, compliant, and environmentally responsible facility or project design. HSE in design revolves around the following concepts: Consistency in engineering to achieve a low-risk design Design that follows standards Adherence to regulations and codes Design that minimizes engineering oversights and errors leading to changes Satisfactory resolution of all risk mitigation issues HSE in design according to a plan While HSE plays a pivotal role in all projects, what follows are a few of the best examples from 2005.
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The earlier in the project HSE opportunities are identified, the more cost effective are the solutions.
WeTLands CreaTion
Plans to create a wetland mitigation site in support of State Highway 130 (SH 130) in Williamson County, Texas represent a true win-win mutual benefit to the environment and to the community. The project proposes to create a wetland mitigation site from an area excavated to provide construction materials. The impacts resulting from the construction of SH 130 include effects to surface waters and other wetlands. The creation of this mitigation site is part of the compensatory mitigation requirement established by the U.S. Army Corps of Engineers (USACE) individual permit for the project. The plans for the creation of this wetland mitigation site, adjacent to the San Gabriel River, require approval of the USACE prior to initiation of construction of the mitigation site. Coordination has also been initiated with local government bodies to explore possible passive recreational uses by the public and long-term maintenance arrangements. Creating a wetland mitigation site provides an opportunity to plan for various features to realize the maximum value of the area, including planting of vegetation that encourages wildlife use by creating diverse habitat types on the site. The vegetation species will provide both cover and food sources for animals that are attracted to a wetland habitat. The animals provide a source of passive recreation for people who want to observe mammals, birds, and fish in a natural setting. With the City of Georgetown and public school nearby, this mitigation site will provide educational opportunities as the wetland and the surrounding woodlands mature. In addition, the school may develop opportunities for enhancement of the habitat in and around the wetland as part of educational programs. Interpretive features can be installed to facilitate the publics understanding of the benefits and functions of wetlands and riparian habitats. Furthermore, the design of the site will allow the wetland to function as a water quality feature by filtering storm water that runs from the north end of the site through a series of grassy swales into the wetland itself before entering the San Gabriel River on the south side of the site. Because this site was a large borrow source, it will be able to detain a significant amount of flood water by acting as a detention basin in the lower pond.
CO 2 Emission RedUcTion Engineering
Because of skyrocketing oil and gas prices, many of our clients are turning towards coal (and other solid fuel) utilization projects. With this trend, carbon capture, or reducing carbon dioxide (CO2) emission into the atmosphere, has become a more important goal for many major energy companies. Fluor has been active in developing CO2 recovery processes for many years, and in 2005 engineering work in this area substantially increased. Fluor worked with numerous client companies and technology providers in the development and application of both post-combustion and pre-combustion CO2 removal systems. Recovered CO2 from these systems will be beneficially used in applications such as enhanced crude oil production or will be permanently sequestered from the atmosphere in deep underground formations.
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In 2005, Fluor developed engineering enhancements to significantly lower process energy and chemical requirements for the Econamine FG PlusSM technology. This proprietary Fluor process offers a proven and cost-effective option for the removal of CO2 in low pressure, oxygen-containing flue gas streams from boilers, combustion turbines, and other combustion equipment. The performance of this process is successfully demonstrated by the more than 24 plants licensed to date. Fluor also is working with several clients to evaluate pre-combustion CO2 recovery for newly proposed integrated gasification combined cycle (IGCC) power plants. Because the product syngas fuel in an IGCC plant is totally contained under moderate pressure prior to combustion, CO2 can be readily removed. Shifted syngas in which carbon monoxide and water contained in the syngas have been chemically converted to CO2 and hydrogenpresents an attractive opportunity for increased CO2 recovery and further reduced green house gas emissions. Finally, Fluors novel CO2LDSepSM process, which can cryogenically recover sulfur and liquid carbon dioxide from highpressure synthesis gas, potentially represents the future of carbon recovery technologies.
PaTenTs
Fluor engineers typically apply for 10 to 12 new patents per year. Many of the inventions submitted include important HSE benefits. For example, Fluor engineers have devised and patented several mechanical improvements to the delayed coking process to increase operator safety. (Delayed coking is used extensively in the petroleum refining industry.) In 2005, these engineers received yet another patent for an innovative shielding device to enhance operator protection from the very high pressure water jets used to remove petroleum coke from the processing drums. Another excellent example of HSE benefits through engineering invention is a pending Fluor patent for a novel non-destructive testing (NDT) system for thermoplastic pipe joint welds. Industry use of high density polyethylene pipe and other plastics to handle corrosive or otherwise hazardous materials continues to increase. The NDT system developed by the Fluor engineers uses ultrasonic energy to detect internal flaws in piping joints. Prior to this system, external visual inspection was the only way to evaluate piping integrity. Being able to detect and correct internal weld flaws significantly reduces the risk of pipe failure. This, in turn, reduces the chances that operating personnel could be injured or the environment damaged by release of hazardous materials caused by a pipe failure. This system has already been used to inspect pipe joints in a large capacity acid pipeline after a weld failure caused an environmental release. More than one-quarter of the pipeline welds were found to be internally flawed and were repaired prior to restarting the pipeline.
GLoBaL HSE IniTiaTives

Avian FLU Response
Availability of Fluor HSE information was enhanced in 2005 by adding the HSE Management System to Projects OnLineSM (POL), Fluors robust, Internetbased project collaboration and document management tool. Fluor uses POL to engage the entire project team (including clients, home office and jobsite employees, contractors, fabricators, and suppliers) in communication and collaboration regardless of the team members locations worldwide. Consequently, both Fluor and non-Fluor project team members now have instantaneous access to the same HSE procedures and tools.
Fluor formed an Avian Flu Task Force in 2005 to address the threat of a potential pandemic caused by the avian flu virus H5N1. The Task Force assists offices and projects globally to be prepared in the event that the avian flu virus mutates and develops the ability to be transmitted from human to human. As migratory birds spread the avian flu virus into different countries, many global issues are expected to arise. The Task Force monitors and evaluates the evolving situation and develops appropriate plans and actions that will be beneficial to both the company and our employees. Fluor relies on a number of organizations such as the World Health Organization (WHO), U.S. Center for Disease Control, and International SOS for continuous updates. Organizations such as WHO are working with national governments to devise a global response to the threat of an avian flu pandemic.
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WorLd WaTch
Because Fluor is a global company, it is important to impart HSE and security information to our employees and subcontractors. This information is provided through a number of resources. Fluor makes available an electronic service called World Watch to our employees, with the goal of providing HSE and security information to business travelers around the world. The data available through the site are wide-ranging from translations for medications and illnesses in a variety of languages to safety precautions in hotels. In addition, Fluor subscribes to a web-based database called GlobeSmart that provides employees with diverse information, such as cultural aspects of various countries. In 2005, a work group composed of HSE, Security, and Travel representatives evaluated and implemented several features to make World Watch more available to employees through links at key locations throughout Fluors Intranet.
AirLine Insider
Fluor added Airline Insider to World Watch in 2005. Airline Insider provides up-to-date information on commercial airline companies globally. Whether a safety rating or a maintenance program for a particular airline, the data are available for evaluation by individuals or teams within Fluor.
HSE Awareness
HSE awareness among all Fluor employees is encouraged with various communication tools, such as newsletters, alerts, Knowledge OnLine, News Online, and Fluors Intranet site. In addition, Fluor holds annual contests and events to highlight HSE activities, thereby increasing awareness and elevating the companys HSE culture.
KidS HSE PosTer ConTesT
This contest has continued to gain popularity since its inception in 1997. In 2005, the contest drew more than 200 entries from around the globe. The goal of the contest is to motivate Fluor employees and their children to take pride and ownership of the HSE program by using their creative abilities. Participants were offered cash incentives and honorable mention certificates. Winning participants also had their entries displayed via Fluors Intranet site, News Online, and Knowledge OnLine for worldwide recognition.
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FriendLY Engineering ConTesT
Fluor holds an annual engineering challenge for employees, called a Friendly Competition in which contenders are given a specific project and a list of materials compiled strictly from office supplies and are asked to pre-engineer the respective task. One week is allowed for teams to pre-engineer the project and once this phase is complete, the teams are given one hour to construct their designs. Many aspects such as safety, costs, and production time are taken into account before the winning team is announced. Football World Cup was the project for 2005. Teams were instructed to construct a device using common office supplies to propel a ball into a goal. A team in Fluors Haarlem office in The Netherlands won the competition after an impressive three-and-a-half minute construction and completion using only two erasers, a paper clip, two thumb tacks, and an elastic band. This creative game emphasizes Fluors strategic commitment to cost and schedule focused on fast-track projects.
2005 HSE SLogan Logo
This global competition promotes HSE visibility among all Fluor employees. The winning entry must encourage a safe and sustainable environment. The incentive to participate includes companywide recognition via News Online, a cash incentive, a commemorative plaque, and the winners slogan displayed on hardhats on projects around the world. After the management carefully reviewed more than 200 entries, the slogan 2005 Keep Alive was announced the winner. Fluors ongoing employee involvement will continue to shape and enhance our exceptional HSE culture.
HSE WeeK 2005
Fluor kicked off the companys first annual HSE Week on April 18, 2005. CEO Alan Boeckmann promoted this endeavor by impelling the Executive Management Team to engage projects and offices around the globe to participate in activities such as: Planting Trees Kick Off and Revitalization of Current Recycling Programs Personal Protective Equipment (PPE) Demonstrations Special Training Health Fairs and Screenings Lunch & Learns Incentive Giveaways The theme for HSE Week 2005, which concluded on Earth Day, was Protecting Our Children and Our Future. Global participation during HSE Week 2005 was extremely gratifying, said Garry Flowers, Senior Vice-president of HSE, Security & Industrial Relations. Employees demonstrated that they have taken strong steps to fold in the value of health and the environment with Fluors strong safety culture. With the help of many enthusiastic and willing volunteers, the first annual HSE week was a resounding success and sets a great precedent for HSE Weeks to come.
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EXecUTive ManagemenT perspecTive on hse

JIM HEAVNER IS RESPONSIBLE FOR FLUORS UPSTREAM BUSINESS LINE WITHIN THE ENERGY & CHEMICALS GROUP.
Youve been a major proponent of integrating Fluors HSE expertise into the projects of your business. Why does this make good business sense?
Todays oil and gas markets are often found in remote areas of the world where environmental sensitivities are extremely high. Its critical that Fluor and our clients are perceived as culturally sensitive and good environmental citizens. So the more we integrate environmental, cultural, and safety perspectives into everything we do, including our designs, the better we serve our clients and our business.
Can you give a couple of examples of projects where HSE has made a difference for you and your clients?
One that comes to mind immediately is the Tengiz Chevroil project in Kazakhstan. For that matter, HSE is critical on virtually every project in Kazakhstan given the environmental sensitivities there. HSE is also of critical importance on the RasGas joint venture project between Qatar Petroleum and ExxonMobil. On projects like these, its imperative that our clients feel comfortable and confident that weve looked holistically at environmental, cultural, safety and health issues as they pertain to our work.
Why is Fluors HSE function a competitive advantage for the company?
First off, I believe Fluor has a first-rate HSE competence in both the design phases and in the field and its getting stronger and stronger. Thats important because, in todays world, just merely having the HSE function is not going to distinguish you from the pack. The more HSE resources you have, the better your case is on the competitive scale and the higher your chances of winning the work. If you delve into our HSE function and see the talent we have, youll come to the same conclusion that our HSE function is a real competitive advantage.
Have expectations for HSE capabilities changed over the past five years? How is Fluor responding to the changes?
Lets go back further than five years. Ten years ago, there were only a handful of sophisticated players who could distinguish between HSE that was integrated into projects early and the standard job site safety program. Five years ago, most of the clients and competitors in our business were zeroing in on HSE, although some were more sophisticated than others. Today, the best of the best understand that HSE requires a holistic approach to be successful. By that I mean they consider and understand all the environmental, cultural, safety and health implications of what they are doing. Sometimes this is easier said than done, because we often dont know what we dont know. Let me give you an example. We were involved in a project in an area where a particular mushroom was coveted by the local citizens. The mushrooms were so good our expats began consuming them in large quantities, which had a serious impact on availability. As strange as it may seem, the locals developed an animosity
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toward our expats over this mushroom issue, and it was affecting our relations within the community. Only after we understood the sensitivities were we able to promote harmony and develop the type of relationship with the local community that enabled us to efficiently and effectively do our job. Ten years ago, Fluor didnt think about things like that. Now we do and, even better, were capable of dealing with them.
How do you think clients will be viewing HSE five years from now?
Ive used the word holistic several times already, but that really is the key to the future. Im convinced that, five years from now, our clients will expect a very strong, holistic HSE approach from their contractors. In my opinion, that will be the basic price of entry into many of the markets in which we play. I also think that there is another element that will increasingly factor in to the HSE arena by the end of the decade. Thats community relations. I strongly believe that our clients will expect their contractors to take a much more active role in community relations down the road. In fact, were already seeing that today in many of our projects.
Incorporating HSE into projects early is a shift for some project managers and others. How would you go about selling early integration of HSE to them?
I would take them back to their basic project management skills. The first thing they have to understand about a project is its full scope, which obviously must include HSE. If you look at HSE myopically, you wont have the full scope. Once HSE is part of the full scope, its automatically included in the next step, which is the execution plan.
Are those same selling points applicable to clients?
Yes, absolutely! You still occasionally run into clients who do not see the value of an integrated, holistic approach to HSE. Instead, they see HSE as a luxury they cant afford on a project. When that happens, you have to take them through lessons learned and demonstrate the high risk of problems they run without considering HSE. Importantly, these problems can occur both during construction and later, during operations. Thats an important point that often escapes people.
Your business is involved in projects across the globe. Are there countries or regions where HSE is more important than others?
I think health, safety, and environmental considerations are important everywhere, but have higher priority with some governments than with others. The better question is how clients and contractors operate around the world. Those with a high sense of corporate responsibility and a desire to be good corporate citizens will bring the same high HSE focus to all their projectsregardless of the local emphasis.
If you could define the value that Fluor HSE brings to your clients in a single sentence, what would it be?
Simply put, Fluor HSE gives our clients confidence that their corporate reputations are protected, and even enhanced, by a contractor who has the highest possible regard for the well being of the communities in which we operate and the people who do our work.
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PROJECT ACHIEVEMENTS
FLUors CommiTmenT To ReBUiLd LoUisianaFEMA IndividUaL AssisTance ProJecT
Quick Facts In 2005, the Fluor Team in Louisiana: Built a workforce of more than 3,800 Louisiana residents Hired 30 Louisiana-based contractors out of a total 38 project-wide Committed 92 cents of every dollar spent to citizens and firms within the affected areas of Louisiana Operated craft training centers throughout Louisiana Worked approximately 2 million safe hours
Prior to Hurricane Katrina making landfall on the U.S. Gulf Coast in August 2005, Fluor had already taken steps to integrate our team with the Federal Emergency Management Agencys (FEMA) organization in Louisiana. Within hours of Katrinas landfall, Fluor initiated our Individual Assistance project for Louisiana and was able to respond to the massive destruction and flooding by helping FEMA house individuals and families who had been displaced. Fluors efforts to respond to this unprecedented disaster were further extended as Hurricane Rita swept through the Gulf Coast region just a few weeks later. Fluors scope of work included identification of commercial parks or tracts of land where travel trailer or mobile home sites could be developed, and placement, maintenance, and demobilization of those homes. In addition, Fluor installed housing units on private, commercial, or newly developed sites and provided roads, power, and sewage and water systems as needed. A natural disaster does not nullify FEMAs requirement to comply with the National Environmental Policy Act; therefore issues that were considered included flood plains, wetlands, storm water, sanitary wastewater, potable, endangered species, contaminated soils, Formosan termites, air emissions, and cultural and archaeological artifacts. Working in 52 of Louisianas 64 parishes, during the last four months of 2005, the Fluor team hauled and installed more than 24,000 travel trailers and mobile homes to house approximately 84,000 people. This fact resonates well with the team that has worked diligently to bring relief in a time of crises, said Project Manager Bob Spaulding. The Fluor team in Louisiana also did what it could to help rebuild the Louisiana economy that was shattered by Hurricane Katrina. More than 3,800 Louisiana workers, many of whom lost their homes and jobs as a result of the disaster, were a part of the Fluor team and worked tirelessly to rebuild their own communities. Along with quality jobs, Fluor provided valuable training to the Louisiana workforce through craft training centers across the region. Recipients of the training were able to begin rebuilding their neighborhoods and parishes while improving their marketable job skills. Fluor also made the effort to subcontract Louisiana firms, achieving an 80 percent level by the end of 2005. Using our web-based database SCORE! to register perspective suppliers, Fluor was able to perform a search for suppliers that fulfilled specified criteria. Another way that Fluor helped the local economy was by spending 92 percent of expenditures within the affected areas of Louisiana. Fluor project personnel worked approximately 2 million safe hours in 2005 while engaged in such activities as driving a large fleet of vehicles for more than 150,000 miles (241,400 kilometers) every day.
The Fluor team has put forth a tremendous effort providing homes, jobs, and training for Louisianas residents. This is more than just a construction project; we are helping to rebuild peoples lives and their communities. Bob Spaulding, Project Manager
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FPSO Design EnTaiLs a NUmBer of HSE OpporTUniTies
The Enfield floating production, storage and offloading (FPSO) facility is part of a development by Woodside Energy Limited of its Enfield Area Development. The FPSO facility will be located 25 miles off the Western Australia coast, near Exmouth, and it is expected to process up to 100,000 barrels of oil per day (bpd) upon completion in 2006. The project involves offshore oil/gas separation, oil/gas dehydration, gas compression, and water injection. The design and integration of the 8500-ton FPSO topsides includes a total capacity of 140,000 bpd fluids.
HSE engineers play a vital role in defining the often conflicting requirements between production need and safety and environmental needs. The HSE standards essentially define the tension that exists between these elements and the compromise or trade-off agreed to optimally satisfy all requirements for all sub systems on the facility.
The design process is complex in part to meet stringent environmental and safety requirements. The Enfield FPSO is located in an area off the northwest coast of Australia prone to severe cyclones. The FPSO has a turret mooring to enable disconnection from the subsea riser to sail away from the path of any threatening cyclone. Consequently, the FPSO has to be designed to meet the HSE classification requirements of a registered ship. The basis of the Enfield FPSO safety requirements were defined in the Safety Case, a legislated requirement for offshore facilities in Australian waters that comprises three main elements: the process description, a quantitative risk analysis, and the Safety Management System (SMS). These requirements will be implemented to mitigate the risks identified to as low as reasonably possible (ALARP). Additionally, the design has to meet the stringent environmental requirements as defined in the Environmental Impact Statement. The HSE requirements have had a direct influence on the design process from the outset. The Enfield Hazard Operability results, together with a number of other phased design reviews, risks identified in the SMS, and the environmental actions were administered through an action tracking register. The key to meeting these requirements was the early identification and timely communication and tracking of these actions to project team members to ensure their incorporation into the design and to ensure that the design inherently complies with the requirements or that the risk can be demonstrated as being ALARP. To confirm that this interface is implemented effectively on the Enfield project, the HSE team worked on a day-to-day basis the same as the more traditional engineering disciplines. This discipline was indistinguishable from any other discipline and participated throughout the front-end engineering design and detailed design phases in the design reviews, interdisciplinary document review process, and engineering coordination meetings. The HSE team incorporated the design functions such as loss prevention, environmental, human factors engineering and ergonomics, fire and gas protection systems, hazardous area classification, fire and gas P&IDs, fire and gas PDS layouts, and Material Safety Data Sheets and registers. This construct enabled the HSE requirements to be communicated and understood by the peer disciplines and to be incorporated into the design development in an effective cost and schedule manner.
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HSE TaKes IniTiaTive To DeveLop LocaL PersonneL
The Chevron Pacific Indonesia (CPI) Program is a five-year contract for capital and maintenance works within CPIs Indonesian Business Unit (IBU) operations area located within Sumatra, Indonesia. The consortium, comprising PT Tripatra Engineers and Constructors and PT Fluor Daniel Indonesia, supplies and manages engineering, procurement, and construction management services. Our commitment to all aspects of work on this program, together with the introduction of our management systems has brought a new level of HSE compliance and achievement to the Indonesian market. In 2005, the project implemented the Program HSE Management System, and program management personnel received in-depth Behavioral Based HSE Program (BBHP) training. Integral parts of the BBHP system include development of a steering committee and the development of the safe work observation inspection program. (For more information about BBHP training on this project, see the Training portion of the Sustainable Development section in this report.) The programs training plan also entailed the development of national personnel to enable them to eventually take over all roles currently filled by expatriate personnel. The HSE department is one key area where the program management has proactively taken the initiative to identify personnel and then commence with a development program to achieve the goals of the plan. Training and ongoing development of the BBHP system, as well as all other aspects of HSE management will continue through 2006 as project and subcontractor management and leadership personnel are trained. Subsequently, the training and learnings will flow through to all project field personnel.
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AccepTance of SafeTY Case for TesTing High Speed RaiL Line in The NeTherLands
Safety is a major focus on the Dutch High-Speed Rail (HSL-Zuid) project to build a new 60-mile (95-kilometer) high-speed rail line with a maximum speed of 186 miles per hour (300 km/hour). HSL-Zuid is the single largest public-private partnership (PPP) contract awarded by the government of The Netherlands and will be a key part of the Trans-European Rail Network. The first test ride was successfully performed at a maximum speed of 50 mph (80 km/hour) with an ultimate test planned in early 2006 that will reach speeds up to 205 mph (330 km/hour). Prior to testing, stringent safety requirements had to be met. As program manager for the Infraspeed consortium (consisting of Fluor Infrastructure, Royal BAM, and Siemens), Fluor is responsible for safety management. Prior to the first dynamic test, Infraspeed needed to submit a Safety Case for testing the line with trains at speeds in excess of 25 mph (40 km/hour). A second Safety Case is needed prior to commencement of 25 years of usage, maintenance, and renewal of the line. A dedicated safety task force began in March 2004 to develop the material for the first Safety Case. It resulted in 27 binders of documentation and a computerized risk model that have undergone numerous formal and informal assessments and panel reviews. The documents provide evidence that the safety requirements are met for both the building and testing phases of the project. Building evidence consists mainly of design justification and hazard and risk analysis. Testing evidence consists mainly of testing plans/ procedures and safety and health plans/procedures, as well as descriptions of how safety is assured during the testing phase of the project. Train speed during the testing phase is incrementally increased to the maximum operational speed for HSL Zuid, 25 to 186 mph (40 to 300 km/hour), and then to 205 mph (330 km/hour), by adding a safety factor of 10 percent. Measures to mitigate possible safety hazards include compliance with a strict Railway Operation & Safety Procedure, a provisional signaling system, fences along the railway line and at bridges, a sweeper train at low speed for inspection and clearance of track, clamped (locked) switches, possession of interface and other specific areas, derailleurs placed at the boundaries to interface areas, a communication system, closed but unlocked escape doors in tunnels, a Fire Brigadesapproved Calamity Plan, Operation Control Center, derailment provisions in place, and a second train driver on the test train. Acceptance of this Safety Case is planned for March 2006. The US$3.1 billion, 60-mile (95kilometer) rail line is expected to be complete and ready for passengers in April of 2006. For additional information on this project, refer to Fluors 2005 Annual Report.
A Safety Case demonstrates that the relevant assets and/or activities comply with the legal and contractual safety requirements. It is assessed by an Independent Safety Assessor (ISA) prior to submission. This project is the first in The Netherlands railway industry required to adopt a Safety Case approach; in fact, a Safety Case of this magnitude is quite unique around the world.
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Engineering and ConsTrUcTion Team SUrmoUnTs OBsTacLes on IraQ ReBUiLd ProJecT
Fluor and two other companies were awarded task orders under contracts to resurrect existing power supply grids and construct a more efficient and supportable power supply infrastructure in Iraq. Some of the projects included repair of generation stations and medium- and low-voltage substations; repair, replacement, and installation of new high voltage transmission lines; and the rehabilitation of distribution control centers.
Safety and Security was Paramount
Few, if any, of Fluors construction personnel who traveled to Iraq had ever worked in a combat zone before. The logistics and movement of personnel and equipment throughout Iraq was and remains a very dangerous job. It required heavy security, which spawned a close relationship between the Fluors project management and corporate security management divisions. Contractors were advised to obtain their own security and not rely on the military. As a result, Fluors Corporate Security Division stepped up quickly to assemble security staffs and private security companies to support operations and client requirements, establish pre-deployment security risk management training, and develop key relationship networks with organizations in Iraq including the Coalition Provisional Authority, U.S. Agency for International Development, other coalition contractors, and U.S. military intelligence-gathering organizations. Fluors Security force has provided critical intelligence to the project team, transportation security, and protection of employees. It also dispels rumors and provides reassurance to employees operating in a highly unfamiliar, and in many ways, dangerous and challenging environment. Under typical peacetime conditions, project managers success or failure is ultimately measured by their ability to produce results on schedule and within budget. Such benchmarks cannot always be routinely applied in Iraq. Although the amount of time spent to get the job done was considered more critical than cost to meet the urgent nature of the work to provide electrical power to Iraqis, safety and security always remained at the forefront and were made more challenging by the simultaneous
selection of security contractors and movement of project personnel to job sites. Upon completion, the generating facility will provide capacity sufficient to accommodate approximately 100,000 Iraqi homes. Although the project is being performed within a difficult security environment, the schedule is similar to a U.S. domestic project. The work safety culture has been well received by Iraqi contractors, and the project has achieved a world-class safety record. In addition to providing engineering, procurement, construction, and commissioning services, the consortium teams are training Iraqi Ministry of Electricity employees on how to operate and maintain this very modern facility. For additional information on Iraqi projects, refer to Fluors 2005 Annual Report.
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2006 OUTLooK
2 0 0 6
In keeping with our continual improvement model of Fluors HSE Management System, 2006 will see increased efforts to drive down the total recordable and lost workday incidence rates through a number of methods. Evaluation of near misses (any unintentional and unplanned event with the potential to cause injury, illness, property or asset damage, environmental damage, or loss of production) will continue with the intent of eliminating situations that could result in injury, illness, or damage. The ability to capture information about near misses globally and to disseminate this information across global operations will be enhanced via use of a web-based automation tool that will be implemented in 2006. Training of the workforce on application of the HSE Management System will continue as well. Due to the increased number of projects and maintenance / operations activities that Fluor will manage in 2006, the demand for qualified HSE individuals will increase. The implementation of the HSE Functional Development Forum will allow efficient tracking and development of individuals to maintain an overall high level of expertise. With the influx of new resources into the company, training on the Management System and its associated documents and tools will be paramount. Several industries and clients that Fluor serves are expected to face increased environmental controls. For example, it is anticipated that interest in carbon emission reduction in the power industry will increase. Fluors experienced HSE professionals will be able to provide the necessary expertise and knowledge base to address such situations in an efficient and costeffective manner. HSE capabilities will be expanded globally in such areas as hazard operability studies, and consistency will be enhanced through expanded use of the improved HSE Project Activity Model, an automated template that identifies required activities to meet project scopes of work. Our HSE audit program will be enhanced in 2006, with improvements to field and engineering compliance audits and systems audits. These enhancements will allow any concerns to be identified and addressed as early as possible. Given that many of the projects Fluor executes are located in remote locations, HSE will continue to be a major aspect of performance. Social issues and community relations will be vital ingredients in performance of work. And, of course, there will be a continued stress on safe work practices. Early in 2006, Alan Boeckmann will join his colleagues at the World Economic Forum to continue his leadership role in development and implementation of anti-corruption standards. To continue elevating HSE awareness among employees and subcontractors, a monthly global HSE newsletter will be issued, highlighting activities and events throughout the company. HSE Week 2006 will occur in October, with the theme Education and Leadership for Sustainable Development, and we look forward to providing highlights in our 2006 HSE Annual Report.
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Fluor Corporation 1 Fluor Daniel Drive Sugar Land, Texas 77478 www.fluor.com
Fluor, Fluor Constructors International, Inc., the ZERO symbol, and the HSE Pyramid are registered service marks of Fluor Corporation. AMECO is a registered service mark of American Equipment Company.
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CorporateRegister.com 22/03/2007

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FLUOR HSE 2005 ANNUAL REPORT

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CHAIRMAN AND CEO MESSAGE BY aLan BoecKmann

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3% 6% 10% 5% 1% 36% 7% 15% 17%

BLacK Engineer of The Year Award

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SUsTainaBiLiTY aT The ConsTrUcTion SiTe

Commission on Environment and Development

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Support for schools

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Aliso Viejo, California: Spirit of Volunteerism Award

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.01 .08 .06 .06 .05

00 01 02 03 04 05 Total Recordable Cases per 200,000 hours worked .99

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SUBconTracTor FieLd OperaTions

Fluor projects, offices, and contractors (total of 2,480 in 2005)

world-class warning alert

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CLienT PerspecTive on HSE

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Energy and Chemicals Operations & Maintenance AMECO Government

33% 28% 27% 12%

4% 23% 3% 10% 11% 4% 1% 3% 1% 25% 10% 5%

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FriendLY Engineering ConTesT

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