25
Risk Management (continued)
Operational risks
Safety, health and environment
Recent developments
Product safety and integrity
Recent developments
Supply chain continuity
Recent developments
Heineken NV.
Report of the
Report of the
Financial
Sustainability
Other
Annual Report 2016
Introduction
Executive Board
Supervisory Board
Statements
Review
Information
What could happen
HEINEKEN is committed to providing a safe
workplace for all employees and contractors.
Despite the controls in place, incidents and
accidents may happen in the brewery, our
supply chain and in HEINEKEN's route-to-
market, leading to physical injuries or fatalities
to employees, contractors or members
of the public.
What are we doing to manage this risk
HEINEKEN has established 'Safety First' as
a key employee behaviour and Health and
Safety as a pillar of its Brewing a Better World
programme. The global safety programme
in place aims at enhancing global standards,
organisation and processes, and strengthening
safety leadership and safety behaviours.
Continuous improvement is achieved through
global compliance monitoring, systematic
gap-closing and central reporting of accidents,
incidents and near-misses.
Given its growing presence in emerging
markets, safety is an ongoing challenge and
a permanent focus area. Effective 1 January
2016, the HEINEKEN Life Saving Rules target
the activities that carry the greatest safety
threats to employees and contractors.
Despite these efforts, several significant fatal
accidents have occurred, underlining the
importance of realising further improvements
in the area of safety.
What could happen
Poor quality or contamination of any of
the HEINEKEN products, be it accidental
or malicious, could result in health hazards,
reputational damage, financial liabilities,
product recalls and volume decrease.
What are we doing to manage this risk
HEINEKEN has established a comprehensive
company-wide Quality Assurance programme
covering among others production standards,
recipe governance, suppliers' risk, production
material risk and country risk. Should this
risk materialise, Group-wide recall and crisis
procedures are in place to mitigate the impact
as much as possible.
Innovations and increased local sourcing
results have led HEINEKEN to further
strengthen the controls on recipe governance
and production processes in order to maintain
its food safety and quality standards.
Changes to the environment in recent years,
such as high speed of information, growing
impact of social media and tougher legal
environment in certain jurisdictions can
magnify the impact of any quality issues
or allegation thereof.
What could happen
Disruptions in the supply chain could lead to
HEINEKEN's inability to deliver key products
to key customers, revenue loss and brand
damage. Changes in the availability or price of
raw materials, commodities, energy and water
may result in a shortage of those resources
or increased costs.
What are we doing to manage this risk
Business continuity plans have been
developed for HEINEKEN's key brands in all
key markets, and back-up plans are in place
in all operating companies. Business resilience
is further strengthened through ownership
of several strategic malteries, long-term
procurement contracts, water management
plans and central management of global
insurance policies.
Political instability, terrorism, climate change
and in particular water scarcity and its effects
on crop yield and grain prices, require both the
market and governments to take measures,
which will in the short term result in additional
costs to the business.