Corporate Governance

Corporate Social Responsibility

CSR
First Gen implements various corporate social responsibility and community relations projects as part of efforts to help develop and improve the quality of life of residents in the host communities and promote their level of self-reliance. These activities focus on: 1) education, 2) community health and safety, 3) livelihood, 4) environment, 5) sociocultural and 6) disaster response and relief.

As the leading Filipino clean and renewable energy company, First Gen recognizes the impact of its operations on society and on the environment; thus, it diligently pursues its role and responsibilities as a corporate citizen. First Gen strives to ensure that its power generation facilities are operated efficiently and in a manner that meets or exceeds Government health, safety and environmental standards. First Gen is also committed to invest in opportunities that allow its host communities to grow with the Company.

First Gen, in partnership with local government units and other local stakeholders, has supported community development projects that address economic, socio-cultural, health, education and environmental concerns of the communities in which it operates. In addition, First Gen’s plants have unfailingly and diligently allocated Php0.01 per kilowatt-hour of their total electricity sales as financial benefits to their host communities as mandated by the implementing rules and regulations of Republic Act No. 9136, otherwise known as the Electric Power Industry Reform Act of 2001 (EPIRA), and Energy Regulations No. 1-94 of the Department of Energy (DOE). Monies from the allocation are devoted to electrification, development and livelihood, or reforestation, watershed management, health and /or environment enhancement projects identified by the relevant local government units that directly benefit the concerned communities.

First Gen’s corporate responsibility initiatives extend beyond its surrounding communities. First Gen has partnered with various non-profit institutions to develop and implement projects that have a significant impact on the fields of environmental conservation and education.

Environmentalism: Part of the Business Model

At First Gen, environmentalism is not just a buzz word or a part of its corporate social responsibility. Environmentalism is a vital and intrinsic part of its business model. From the fuels that it uses for its power generation to its conduct of businesses – purchasing of materials to operations at its various sites and offices – caring and nurturing the environment is an essential element in its decisions. When First Gas started operating the country’s first natural gas-fired plants — the 1000-MW Santa Rita and the 500-MW San Lorenzo plants in Batangas in 2000 and 2002, respectively — it blazed the trail for the use of indigenous natural gas for power generation, signaling the start of the development of the country’s natural gas industry.

Conscious of the fact that natural gas is the cleanest form of fossil fuel, First Gen developed an environmental program that ensures the environment within its compound and adjacent to it is also protected and preserved, if not further enhanced. One of its major programs is the protection and maintenance of the mangrove area located east of the power plant complex. The mangrove area is an important hatching ground for fish and crustaceans, a biological filter for estuarine waters and acts as a carbon sink that captures and stores carbon dioxide. From a mere patch of a mangrove in 2001, with only three recorded species, this mangrove area has now become home to 33 species of true and associated mangroves, making it a good hatching place for fish fingerlings and crabs that eventually find their way to the adjacent river and the Batangas Bay, helping the marginal fishing community increase its harvest. The mangrove area also serves as resting place for resident and migratory birds. To date there are 122 bird species recorded in the area since 2008.

With the regular cleanup of its beach area and continuous monitoring of the quality of marine waters behind the First Gas power plant, the beach has now become a nesting site for the Olive Ridley turtles, proof of the healthy condition of the beach area. Hundreds of turtle hatchlings were released at the same beach area in a span of five years. Hopefully, after years of wandering in the vast oceans, these turtles will come back to nest in the same area where they were hatched.

Binhi: A Greening Legacy

It has always been the dream of the Lopez Group and First Gen Chairman Emeritus Oscar M. Lopez to help reforest the country, conscious and alarmed at the continued degradation of the country’s forests. As such, when First Gen purchased in November 2007 a controlling stake in PNOC Energy Development Corp. (now known as Energy Development Corporation or EDC), Mr. Lopez knew his dream of reforesting and saving those that can still be saved from denudation would finally be realized.

After all, EDC is a geothermal company. Geothermal energy– steam and heat coming from the earth – is dependent on having water underneath the rocks. And the only way to have this continuously is by having a healthy watershed. Trees suck in water whenever it rains. A healthy forest cover is vital to sustaining the underground reservoir that provides geothermal energy.

As such, First Gen through EDC launched in December 2008 a major reforestation project dubbed “BINHI: A Greening Legacy” (BINHI). “The modern Lopez Group has become one of the trailblazers of the corporate green movement, hence the rooting of “environmentalism in Philippine business” philosophy among the various Lopez companies and business partners,” Mr. Lopez said. BINHI targets to establish 1,000 hectares of forests annually over a period of ten years. What makes BINHI different from the usual tree planting is that EDC uses native and prime endangered Philippine tree species like the tindalo, kalantas, mayapis, mangkono. Thus, BINHI is not only a broad-scale reforestation; it is also a biodiversity restoration project. Designed to meet man’s specific needs, the BINHI project has four modules: Tree for Food, Tree for Life, Tree for Leisure and Tree for the Future.

The “Tree for Food” module intends to accelerate the re-vegetation of denuded forestland and establish tree plantations and agro-forests that would provide a significant source of livelihood under sustained yield management for forest dwellers within EDC’s geothermal reservations.

The “Tree for Life” involves bridging of forest gaps between mountain systems to address the fragmentation of habitats of these valuable ecosystems. By doing so, trees can continue to provide ecological services like water storage, carbon dioxide sequestration, oxygen release, etc.

The “Tree for Leisure” involves planting more trees to preserve the natural beauty and ambience of the forest areas in EDC’s geothermal project sites to make it an eco-tourism destination. Currently, its Bacon-Manito geothermal reservation area is already known as an eco-tourism destination in Sorsogon.

The fourth module is the “Tree for the Future” which addresses the preservation of vanishing prime native trees by rescuing their seedlings and protecting them in safe zones like schools and public parks. This module also enriches their genetic pool through vegetative material reproduction..

Other First Gen subsidiaries have their own individual environmental and community projects that are in cooperation with the local communities such as mangrove protection and rehabilitation as well as tree planting. These projects allow these communities to enjoy the benefits of a healthier environment while at the same time achieve better crop yields and increased fishing harvests.

Development and Conservation of the Verde Island Passage

First Gen, along with First Philippine Conservation, Inc. and Conservation International, also initiated a program in 2004 to protect the Verde Island Passage off the coastal waters of Batangas, Oriental Mindoro, Occidental Mindoro, Marinduque and Romblon. The program, called Project Center of the Center (Project CoC), involves marine conservation work in partnership with local communities along the area. The Verde Island Passage hosts a fragile ecosystem that is so significant that a marine scientist, Dr. Kent Carpenter from the International Union for Conservation of Nature, called it the “Center of the Center” in marine shorefish biodiversity. The conservation of Verde Island Passage has attracted the support of a number of organizations and corporations that are convinced with Verde Island Passage’s importance in the preservation of the world’s marine biodiversity.

In 2010, First Gen through First Gas assumed the role of direct implementer of Project CoC with focus on marine law enforcement in nine marine protected areas (MPAs) in the coastal towns of Mabini, Tingloy and later in Lobo in Batangas province. Project CoC, thus, has become an institutionalized activity under the Community Relations Program of First Gas.

With its focus on marine law enforcement, First Gas now extends logistical and operational support to Bantay Dagat (Sea Watch) volunteers in the three Batangas coastal towns. The logistical support includes fuel, honorarium and food allowance, new equipment, training and legal support to the Bantay Dagat volunteers, and even educational support to the loved ones of the volunteers.

The First Gas support helps the Bantay Dagat volunteers conduct regular reconnaissance patrols in their respective municipal waters. The reconnaissance drives help secure the MPAs against illegal fishers, while at the same time keeping commercial fishers from the municipal waters off the three coastal towns.

On top of Mabini, Tingloy and Lobo, 7 other towns and one city, composing the Bantay Dagat Network of the Province of Batangas have started receiving support from First Gen also since 2010. The support comes in the form of training, life and accident insurance for all 364 Bantay Dagat members in Batangas province, as well as assistance in the campaign to promote the importance of protecting the marine ecosystems.

Through the Bantay Dagat Network, First Gen helps in protecting 43 declared MPAs with a total area of 2,072 hectares.

Support for Quality Education

First Gen’s corporate social responsibility and community relations programs consider education as one of the core focus areas that are designed to help develop and improve the quality of life of residents in the host communities and promote their level of self-reliance.

In Pantabangan, Nueva Ecija, First Gen through First Gen Hydro Power Corporation (FGHPC or FG Hydro) implements an Educational Incentive Program (EIP) for the benefit of four adopted public elementary schools in the host communities. Under the EIP, FG provides educational assistance to Grade 6 students from the four public elementary schools in Pantabangan. The assistance aims to help assure the students’ completion of their primary education.

To complement the EIP, teachers are trained on various teaching skills and methodology that are based on a training module approved by the Department of Education (DepEd) and designed to make lessons more interesting and comprehensible to students. The DepEd-approved EIP adopts an integrated approach in improving the performance of the EIP’s beneficiaries. As an integrated program, the EIP also includes a feeding program designed to reduce the malnutrition rate in the adopted schools to five percent – or lower.

In Batangas, subsidiary First Gas has tied up with Batangas State University to implement the Teachers’ Education for Students Thrust (TEST) program. Under the TEST program, teachers from Santa Rita Aplaya Elementary School (SRAES) and Santa Rita Karsada Elementary School (SRKES) complete a Master in Education course. By enhancing the proficiency of the teachers, the TEST aims, in turn, to improve the mean percentage of pupils from both public elementary schools, located within the host barangay of Santa Rita in Batangas.

First Gas, FG Hydro, FG Bukidnon, and the projects under development FGen Bubunawan, FGen Tagoloan and FGen Puyo implement other education-related projects for the benefit of their respective host communities. These include school clean-up and repainting drives; and the distribution of free school supply for thousands of indigent pupils.

FG Hydro, FGen Bubunawan, FGen Tagoloan and FGen Puyo also reached an earlier agreement with Knowledge Channel Foundation, Inc., a non-profit Lopez Group member company, to bring educational television programs to the public schools within the host community.

First Gas, on the other hand, sponsored review classes for SRKES and SRAES students taking up DepEd’s National Achievement Test.

Livelihood Support

First Gen through First Gas also implements various livelihood activities under its Tulong Upang Lumawak Angking Yaman (TULAY) Program. Activities under the TULAY Program include skills training aimed at helping qualified individuals from the host community enhance their chances of finding employment and improving their lot.  Qualified individuals are trained on employable skills, such as welding (shielded metal arc, gas tungsten, arc and flux cored arc welding); while other beneficiaries receive basic and advance cosmetology training under the Gand­a Mo, Hanapbuhay Ko Project.

FGen Puyo also provided skills training on Shielded Metal Arc Welding and Electrical Installation and Maintenance to qualified residents of its host communities including members of the Mamanwa and Manobo tribes. The skills training is part of our commitment to the Hydropower Service Contract with the Department Of Energy.

Under the Project Center of the Center, two Bantay Dagat Groups were also provided with livelihood support. The Samahang Bantay Dagat ng Mabini was provided with 1 unit diesel 4DR5 boat engine for its ecotourism boat business while the Nagkakaisang Bantay Dagat ng Tingloy was provided with equipment and initial ingredients for its shing-a-ling and miki noodles business.