2002 in Retrospect Environment As well as being beer's principal constituent, water plays an important part in many stages of the production pro cess. Heineken's policy of economising on water consump tion has now been introduced in all operating companies in which we have a majority interest. The impact of our 'Aware of Water' programme, which was launched in 2000, was clearly apparent. A new system installed under our waste-water treatment expansion programme was com missioned at Ibadan in Nigeria in 2002. Work on a new waste-water treatment plant at Enugu in Nigeria is in progress and the contracts for construction of the plants at Kinshasa in the Democratic Republic of the Congo and Hatay in Vietnam have been awarded. New waste-reduction and energy-saving programmes are being developed and will be implemented in the next few years. The target for our 'Aware of Energy' programme is to reduce energy consumption by 10% from the begin ning of 2003 to the end of 2004. Achieving that target will require both promotion of energy-saving practices and adoption of new technologies, such as heat recovery and biogas. A joint approach by the industry, government and health organisations to combating alcohol-related problems is one of the objects of the dialogue project initiated by the Amsterdam Group of international companies, with which Heineken cooperates in promoting responsible alcohol use and preventing its abuse. However, cooperation with governments in this area cannot be truly effective until the dialogue project is sufficiently advanced and a common position on the issue has been agreed. The first phase of a 'virtual forum' project in the Netherlands, which enables young people to learn about the use of alcohol and other substances via an interactive game, has been completed. This sociopsychological approach is designed to find effective ways to help young people avoid behaviour which incurs health risks. Personnel The average number of people employed by Heineken increased by 8,212 to 48,237, due to the acquisition of several breweries and beverage wholesalers. Excluding acquisitions, the number of employees decreased, as a result of the action taken to boost efficiency. Alcohol and Society Most people use alcohol sensibly, as one of the pleasures of life, but a small minority abuse it, and that can lead to problems. Heineken initiates and supports - in some cases with the European trade organisation - information and education projects to prevent alcohol abuse and has formulated internal rules to ensure that its marketing messages do not encourage it. Heineken regards acknowledgement of the distinction between responsible use and abuse of alcohol as the basis for effective action by and cooperation between the indus try, government and other organisations to prevent and curb alcohol abuse. Governments still resort too often to blanket measures to address alcohol-related problems, for example by restricting advertising or distribution or influencing prices through excise duty. The use of alcohol only presents a danger to safety and/or health if it is used at an inappropriate time, for example before driving a vehicle or operating machinery, or in excessive quantity. In a growing number of countries, we are going further than imposing internal rules to prevent our commercial communications encouraging alcohol abuse. In the United States, the Netherlands, Ireland and Italy, our advertising now carries a warning against abuse and we are planning to introduce similar messages in other countries. Central personnel policy is involved with the recruitment, development and retention of managers for senior inter national positions. The operating companies have their own policies for other staff which take account of the local labour market, regulations and practices. As an international group, Heineken needs managers with an international outlook and a recognisable manage ment style. Heineken fosters the creation of a shared cul ture and encourages the international exchange of expert ise by organising international postings for management trainees and placing staff, including senior management, on temporary secondment. In 2002 there were 260 expa triates working within the organisation, of whom 100 were relatively young. These expatriates came from 26 coun tries and were employed in 62 host countries. The findings of the Europe-wide study of recruitment and retention of highly qualified staff, which was complet ed in 2002, will be used by Heineken as a starting-point for encouraging the individual employee to take a more active role in the development of his or her career. A new cooperation agreement between the European works council and Heineken N.V. came into effect on 1 January 2002 which clarifies the decision-making process in relation to important local acquisitions and requires that the European works council be informed in good time. HEINEKEN N.V. ANNUAL REPORT 2002 16

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