sustainabilityreport2003.pdf

1 CHIEF EXECUTIVE OFFICER’S MESSAGE 

I am very pleased to present MTR’s third Corporate 

Sustainability Report for 2003. 

This report demonstrates the progress we have 

made with incorporating sustainability into our 

operations. This will become more challenging in the 

coming year as our international operations continue 

to grow. In addition to reporting our economic and 

environmental achievements, we have decided to 

expand our report to include our winder social 

responsibility in future. Our reporting follows the 

international best practice guidelines prepared by the 

Global Reporting Initiative. Again this year, MTR is fully compliant with all of 

Hong Kong environmental legislation no prosecutions or fines. 

Despite a trying year in 2003, we have maintained our membership of the Dow 

Jones Sustainability Index and the FTSE4Good Global Index, and expanded 

our participation in the World Economic Forum Corporate Citizenship Initiative 

through our involvement with the Global Reporting Initiative. We have also 

expanded our support for the Union of International Transport Providers’ 

Charter for Sustainable Development. 

In this report we are presenting the results of several new initiatives including 

sustainability accounting and an inventory of our green house gas emissions. 

We are also reporting on the first steps of a three-year programme to provide 

full assurance of our sustainability reports. 

These are exciting times for MTR Corporation and our sustainability efforts are 

critical to ensuring long-term shareholder value. I look forward to receiving any 

comments you may have on the report. 

Mr. C.K. Chow 

Chief Executive Officer 

May 2004 

MTR CORPORATION SUSTAINABILITY REPORT 2003 

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2 INTRODUCTION 

This report provides an overview of MTR Corporation Limited’s (MTR) 

approach to corporate sustainability and details its contributions to social 

responsibility, the environment and the economy during calendar year 2003. 

The report also describes MTR’s progress towards achieving its 2003 

sustainability targets and presents a set of challenging targets for MTR for 

2004. Further details of the organisations and activities covered in this report 

are presented in Section 3. 

After describing the corporation and its business in relation to Hong Kong and 

through international benchmarks (Section 3), the report shows how our 

corporate governance supports our efforts in sustainability through risk 

management. The priority business risks identified in (Section 4) are allied 

with provisional indicators and targets from the previous year. Sections on 

social responsibility (Section 5), environment (Section 6) and economics 

(Section 7) provide further information as to how these risks are managed and 

targets achieved. Section 8 reports on the full set of targets for 2004. We 

have chosen not to include all details of the 2003 targets for brevity and to 

mainly focus on indicators and targets relating to our priority business risks. 

The Global Reporting Initiative (GRI) Guidelines (June 2002) were used to 

develop the structure and content of this report. This year, Annex A 

summarises how the report maps to the requirements of GRI. 

This report has been designed principally with online use in mind. The web 

version is supplemented by additional materials on a wide range of topics. 

For those who need a permanent record, a downloadable version is available 

at www.mtr.com.hk. 

As MTR’s third Corporate Sustainability Report, we would very much like to 

receive your views by emailing the Sustainability Development Manager, 

sdmng@mtr.com.hk. 

Case Study: Preparation of MTR Corporate Sustainability Report 2003 

The early stages of the reporting cycle included a review of comments on the 2002 report made 

by stakeholders including the Association for Sustainable and Responsible Investment in Asia 

(ASrIA) , Community Business, Accountability and SustainAbiliy. In addition, the corporate 

sustainability assessment provided by Sustainable Assessment Management (the research 

providers for the Dow Jones Sustainability Index) was examined in detail to identify areas for 

improvement. 

The review process identified a number of areas where the report could be improved including: 

(a) Stakeholder engagement processes (b) Linkages to the Global Reporting Initiative (c) Green 

House Gas emissions (d) MTR’s operations outside Hong Kong (e) Risk management and the 

links with sustainability. We have endeavoured to address these in this year’s report. 


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3 ABOUT MTR 

This section describes the MTR Corporation’s business both from a local and 

international context; and the corporate governance involved in managing our 

business activities. 

The MTR Corporation Limited (MTR) came into existence on 30 June 2000, 

succeeding the Mass Transit Railway Corporation, which had been 

established in 1975 as a Government owned statutory Corporation. With a 

daily patronage of over 2.3 million passengers, the MTR is one of the most 

intensively utilised mass transit railway systems in the world, transporting 1 in 

3 of Hong Kong’s population every day. Total patronage of the MTR Lines 

and Airport Express Line was 777 million in 2003. Furthermore, MTR’s daily 

patronage reached a record 3.24 million on Christmas Eve 2003. 

Through effective and efficient management in planning, design, operations, 

and maintenance of its railway services, MTR has been confirmed by recent 

benchmarking studies as one of the world’s finest railways for reliability, 

customer service and cost-efficiency (1) . MTR currently operates 116.7 km of 

railway, comprising 6 railway lines (including the Airport Express) with 50 

stations, of which 15 are interchanges to provide convenient transfer between 

the different lines (Figure 3.1). 

In recent years, MTR has not only concentrated on serving the people of Hong 

Kong, but has also been active in developing our business beyond Hong 

Kong. 

Figure 3.1 MTR Railway Network 

In addition to railway operation, development and associated businesses, 

MTR engages in the development, sale and management of residential and 

( 1) As concluded by CoMET, a benchmarking exercise conducted annually by the Railway Technology Centre of Imperial 

College, London. 


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commercial properties above and adjacent to its stations and depots in 

partnership with property developers. MTR has also retained a number of 

shopping centres as long-term investments and provides property 

management services to almost 50,000 residential units and four shopping 

centres. 

CoMET is an international railway benchmarking programme, conducted 

annually by the Railway Technology Centre of Imperial College, London. It is 

made up of a group of eleven of the world's largest metropolitan railways 

(metros). The metros are in major cities in Europe, Asia and the Americas 

and each have more than 500 million passengers per year. CoMET’s most 

recent Key Performance Indicator (KPI) Report was presented at its annual 

meeting in October 2003. More information about CoMET is available at 

www.bestransport.org. MTR’s performance was benchmarked against those of 

its international counterparts using KPIs related to Customers, Internal 

Processes, Safety and Finance. MTR was ranked as the top metro in terms 

of asset utilization, having the densest capacity per route kilometer (Figure 

3.2) but slipped to the number two position in terms of customer service, as 

teething problems on the new Tseung Kwan O Line affected passenger 

journeys on time (Figure 3.3). Identities of the other metropolitan railways in 

the CoMET Report have been removed to maintain confidentiality. 

Figure 3.2 Capacity km per Route km 

450 

400 

350 

300 

250 

200 

150 

100 

50 

0 

MTRC 

Source : Community of Metros (CoMET) 

Density: Capacity km per route km 

Other metropolitan railways 

2002 

2001 


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Figure 3.3 Percentage Passenger Journey on Time 

100.00% 

95.00% 

90.00% 

85.00% 

80.00% 

75.00% 

70.00% 

3.1 OCTOPUS 

3.2 TRAXCOMM 

* 

Service Quality: Percentage passenger journey on time 

MTRC 


*Other metropolitan railways 

* 

2002 

2001 

Further CoMET results on Staff Efficiency and Fatalities are presented in 

Section 5.4 and Section 5.5 respectively. 

Hong Kong’s Octopus smartcard system was launched in 1997. The high 

level of reliability and convenience enables Octopus diversified applications. 

Nowadays, virtually all public transport modes in Hong Kong accept Octopus. 

Its savvy use also covers parking, retail, vending machines, kiosks, leisure 

facilities and access control for residential and commercial buildings. 

Currently, 10 million Octopus cards are in circulation, with the Octopus System 

handling about 8 million transactions per day, amounting to HK$54 million. 

MTR and Octopus together secured a series of contracts with Thales to create 

an Automatic Fare Collection (AFC) system in the Netherlands. The two 

companies will work with the East-West Consortium to provide the Central 

Clearing House System Software as well as expertise in the operation of a 

new public transport e-ticketing system. The new system will be the first in the 

world to be implemented on a national scale and will offer integrated travel 

covering all modes of public transport including train, bus, tram, metro and 

ferry. The first phase for the Rotterdam area is planned for September 2004. 

TraxComm offers a low investment option for retail telecommunication service 

providers in Hong Kong by providing wholesale bandwidth services. As a 

wholly-owned subsidiary of MTR Corporation Ltd, TraxComm built its 

wholesale bandwidth services in 2003 by tapping into the 10,000 km-core 


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fibers and telecommunication infrastructure already set up throughout the 

MTR system. 

TraxComm aims to provide service to fixed network operators, mobile carriers, 

internet service providers, data centers and international carriers. 

TraxComm’s network is expandable to cover buildings within 0.5km radius of 

all MTR stations, covering nearly all business centers and around 40% of 

residential population in Hong Kong. The company also plans to cover 200 

high bandwidth buildings including data centers and class-A buildings. 

3.3 INTERNATIONAL BUSINESS 

The international consulting service business of the MTR Corporation was 

formally launched in 1998 and has now been extended to more than 20 cities 

around the world from Australia, China, India, Malaysia, the Netherlands, 

Singapore, Thailand and the United Kingdom. In 2003, our external 

consulting business experienced another year of strong growth in revenues 

and scope, particularly in Mainland China, where we extended our 

consultancy involvement to eight cities: Beijing, Chengdu, Guangzhou, 

Hangzhou, Nanjing, Shanghai, Shenzhen and Tianjin. 

In India, we were awarded our first rail consultancy contract to be funded by 

the International Bank for Reconstruction and Development. This is an 

important step in establishing a reputation with this body and with its sister 

organisation the World Bank, which are both heavily involved in projects in 

developing countries. This could, in the future, allow us an opportunity to 

assist in supporting other sustainability initiatives. 

Box 3.1 MTR and Shenzhen Line 4 

In January 2004, MTR entered into an Agreement in-Principle with the Shenzhen Municipal 

Government for the construction of Phase 2 of Line 4 of the proposed Shenzhen Metro System 

and the operation of the whole of Line 4 for a term of 30 years under a build-operate-transfer 

arrangement. The agreement also incorporates property development rights of 290,000 square 

metres of commercial and residential property. The Metro project is planned for completion by 

the end of 2008. 


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Box 3.2 M8 and R4 Rail Lines in Shanghai 

Apart from building and operating railways in Hong Kong, MTR has actively developed 

consultancy businesses in many cities around the world by making use of its expertise in the 

planning, construction, operation, maintenance and up-grading of railways plus property 

development and non-fare revenue activities. Since 2002, MTR has established a joint venture 

company Shanghai Hong Kong Metro Construction Management Co. Ltd. (SHKMCM) to 

undertake project management of railway construction projects in Shanghai. 

MTR was appointed as an Owner’s Advisor for the construction of the Yang Pu Line 8(M8). 

The M8 project comprises 24 underground stations with a total route length of 23 km. Total 

project cost is RMB14.5 billion. MTR is providing advisory services to the project owner, 

Shentong Holdings. 

SHKMCM has been appointed as Owner’s Representative to project manage, on behalf of the 

owner, the design and construction of Shen Song Line 9(R4). The R4 project is a 31 km metro 

line comprising 12 stations. It is split into 12 civil/building and 23 E&M contracts. The total 

project cost is RMB10 billion and is expected to be completed by the end of 2005. 

3.4 CORPORATE GOVERNANCE 

The Company is committed to ensuring high standards of corporate 

governance in the interests of shareholders and devotes considerable effort to 

identifying and formalising best practices. 

MTR has complied throughout the year with the Code of Best Practice as set 

out in Appendix 14 of the Rules Governing the Listing of Securities on the 

Stock Exchange of Hong Kong Limited, except that non-executive Directors of 

the Company are not appointed for a specific term but are subject to 

retirement by rotation and re-election at the Company’s annual general 

meetings in accordance with Articles 87 and 88 of the Company’s Articles of 

Association (save for those appointed pursuant to Section 8 of the Mass 

Transit Railway Ordinance). 

The U.S. Sarbanes-Oxley Act 2002 seeks to enhance the transparency and 

accountability of companies in the areas of corporate governance and 

financial reporting, was signed into law by the U.S. President on 30 July 2002. 

As the MTR is a Securities and Exchange Commission reporting company, it 

is generally bound by this new legislation. The Company has been, and will 

continue its process of reviewing its internal systems and practices and 

implementing new requirements under this legislation in line with applicable 

compliance dates. 

MTR has a clearly defined organisation and management structure. The 

senior management of MTR is made up of a two-tier management structure, 

the Board and the Executive Directorate. The Board is the highest level of 

authority and is supported by the Executive Directorate. 


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3.4.1 The Board 

Role 

The overall management of the Company’s business is vested in the Board of 

Directors. Pursuant to the Company’s Articles of Association and the 

Protocol adopted by the Board of Directors, the Board of Directors has 

delegated the day-to-day management of the Company’s business to the 

Executive Directorate, and focuses its attention on matters affecting the 

Company’s overall strategic policies, finances and shareholders. These 

include financial statements, dividend policy, significant changes in accounting 

policy, the annual operating budget, certain material contracts, strategies for 

future growth, major financing arrangements and major investments, risk 

management strategy, treasury policies and fare structures. 

The Board has established three Board committees, being the Nominations 

Committee, Audit Committee and Remuneration Committee. Each of these 

committees has defined written terms of reference. These committees 

comprise non-executive directors who have been invited to serve as members. 

Their independent and objective views on various aspects of how MTR is 

governed provide proper control and ensure that MTR continues to achieve 

the high standards expected of a major listed company. Further information on 

the Board committees is available in the MTR Corporation Annual Report 

2003 on pages 45 – 47. 

The Company takes care to ensure the Board is in a position to exercise its 

powers in an informed manner. The Board of Directors meets regularly and 

members of the Board receive information between meetings about 

developments in the Company’s business. All members of the Board of 

Directors have full and timely access to relevant information and may take 

independent professional advice, if necessary. The Board of Directors held 

12 meetings in 2003 and the average attendance rate was 85%. The 

Corporate Sustainability Report is reviewed at a full Board meeting at least 

once a year. This occurred last in May 2004. 

Composition 

The Board of Directors announced in April 2003 to split the roles of the 

Chairman and Chief Executive Officer, after Mr. Jack So’s contract as 

Chairman and Chief Executive expired during 2003. In addition, majority of 

the Board Members are non-executive directors. The non-executive 

members of the Board bring a wide range of business and financial 

experience to the Board. 

Appointments and Re-elections 

A person may be appointed as a Board member at any time either by the 

shareholders in a general meeting or by the Board upon the recommendations 

of the Nominations Committee. Board members who are appointed by the 

Board must retire from office at the first Annual General Meeting (“AGM”) after 

their appointment. In either case, the members so elected and appointed are 

eligible for re-election and re-appointment. 


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At each AGM, one third of the Board members are required to retire from 

office by rotation (excluding Board members appointed by the Chief Executive 

of the HKSAR under the Mass Transit Railway Ordinance (Chapter 556 of the 

Laws of Hong Kong) (the “MTR Ordinance”). The Office of the Commissioner 

for Transport and the Office of the Secretary for the Environment, Transport & 

Works are ‘additional directors’ appointed to the Board of MTR Corporation 

Limited by the Chief Executive of the HKSAR under the MTR Ordinance. 

Remuneration 

Remuneration of Members of the Board and the Executive Directorate are 

given in the MTR Annual Report 2003 on pages 91-92. 

3.4.2 Executive Directorate and Executive Committee 

As mentioned earlier, the Board of Directors has delegated day-to-day 

management of the Company’s business to the Executive Directorate. There 

are seven Members of the Executive Directorate and, together with the 

General Manager - Marketing and Station Business (“GM – M&SB”), they have 

formed an Executive Committee. The Executive Directorate and GM – M&SB 

regularly present to the Board reports on the performance of the principal 

activities of MTR. The Executive Directorate reviews progress on 

sustainability achievements at least twice per year. Due to the impact of 

SARS, briefings occurred in April 2003 and January 2004. The Managing 

Director for Operations and Business Development chairs the Corporate 

Sustainability Coordinating Committee (CSCC) and is responsible for 

sustainability issues at the Board level - further details are provided in Section 

4.8. 

3.4.3 Other Executive Committees 

The Executive Directorate has established a number of executive committees 

to assist in the management and control of MTR’s various core businesses 

and functions. Membership, authorities and duties of these committees are 

documented in their terms of reference. The key executive committees 

currently set up are: 

• Operations Executive Management Committee; 

• Property Executive Management Committee; 

• Project Control Group; 

• Safety Committee; 

• Railways Extensions Steering Group; 

• Financial Planning Committee; 

• Operations Performance Meeting; 

• Information Technology Executive Management Committee; 

• Tender Board; and 


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• Executive Tender Panels; and 

• Commercial Letting Committee. 

• Investment Committee 

• Business Development Executive Committee 

Figure 3.7 summarises the high-level management structures in place at MTR. 


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Figure 3.4 

THE BOARD 

CHAIRMAN, CEO 

10 NON-EXECUTIVE DIRECTORS 

EXECUTIVE DIRECTORATE 

CHIEF EXECUTIVE 

6 EXECUTIVE DIRECTORS 

- FINANCE 

- LEGAL 

- OPERATIONS 

- PROPERTY 

- PROJECT 

- HUMAN RESOURCE 

BOARD COMMITTEES 

NOMINATION 

AUDIT 

REMUNERATION 

OPERATIONS EXECUTIVE MANAGEMENT COMMITTEE (bi-weekly) 

PROPERTY EXECUTIVE MANAGEMENT COMMITTEE (weekly) 

PROJECT CONTROL GROUP (weekly) 

SAFETY COMMITTEE (monthly) 

RAILWAYS EXTENSIONS STEERING GROUP (monthly) 

FINANCIAL PLANNING COMMITTEE (weekly) 

OPERATIONS PERFORMANCE MEETING (bi-weekly) 

INFORMATION TECHNOLOGY EXECUTIVE MANAGEMENT COMMITTEE (bi-weekly) 

TENDER BOARD (monthly) 

EXECUTIVE TENDER PANELS (ad-hoc) 

COMMERCIAL LETTING COMMITTEE (bi-weekly) 

INVESTMENT COMMITTEE (ad-hoc) 

BUSINESS DEVELOPMENT EXECUTIVE MANAGEMENT COMMITTEE (monthly) 

MTR HIGH LEVEL MANAGEMENT STRUCTURE 

OTHER EXECUTIVE COMMITTEES 

(Time Frame for Meeting) 


11

4 CORPORATE SUSTAINABILITY 

4.1 INTRODUCTION 

By making a major contribution to the prosperity and well-being of Hong Kong 

and by raising the standards of corporate responsibility and risk management 

amongst listed companies, MTR is a leader in shaping and delivering a more 

sustainable society. This section presents MTR’s vision and mission, its risk 

management and achievements for calendar year 2003. Also covered in this 

section is sustainability accounting. 

4.2 MTR’S VISION 

The quality of life for many millions of people in Hong Kong is greatly 

influenced by planning and development. With the right approach, Hong 

Kong can grow from its current densely populated and cramped urban 

environment to become a world class city - a quiet, safe, clean and at the 

same time vibrant and stimulating place to live. For this to happen, 

government, business and society need to work together towards agreed 

goals, with full transparency and accountability. 

4.3 OUR MISSION IN ACHIEVING THE VISION TODAY 

MTR is helping deliver this vision today by providing equitable access to 

affordable, safe, useful, highly energy efficient and reliable transportation. 

Moreover, as the operator of a railway system in a densely populated city, 

MTR plays a significant role in reducing the environmental impacts of moving 

over two million people every day. 

Through the development of properties linked to the MTR network of stations, 

the Corporation has played an important role in the successful creation of new 

living and working communities in Hong Kong. Our rail and property model has 

not only optimised the use of airspace at railway stations, but has also 

significantly enhanced the quality of life for people by integrating the railway 


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together with road transport, shops, homes, offices and recreation space. This 

model is well recognised throughout the world and is being copied in many 

other countries. 

One of the most attractive elements of our properties is their location. People 

enjoy working, living and shopping in properties located directly above or 

adjacent to railway stations, as they offer convenience, added value and 

efficiency. Not only are their places of work, home or leisure situated directly 

above transport hubs, but because the properties are often fully integrated 

with the stations below, they can travel to and fro without being exposed to 

unfavourable weather conditions. 

An example is Union Square at Kowloon Station, which, as a planned 

comprehensive development in West Kowloon, is also the key transport hub 

for this region. Located on a 14 hectare site, this is a unique and world-class 

project for quality life and living, comprising some 12 million square feet of 

residential apartments, serviced apartments, shops, hotels and offices. This 

has led to more effective integration between its railway and property 

developments, increased catchment and passenger flows for the railway, and 

satisfactory and consistent returns to its shareholders. 

In property developments, MTR enters into partnerships with reputable 

developers who bear all development costs, including land premium and 

construction costs, and therefore all development risks. MTR takes the lead in 

development planning and supervising construction and shares part of the 

profits upon completion and sale. 

MTR also continues to raise the standard of corporate responsibility in the way 

it communicates and engages its internal and external stakeholders. MTR 

delivers optimised and consistent, long-term returns to its shareholders, 

provides staff with fair and competitive rewards and training opportunities, 

supports community initiatives aligned with its core skills and seeks continually 

to improve its environmental performance. 

We will be reviewing our Vision and Mission to align these to our developing 

international activities. Changes will be reported in our next annual 

sustainability report. 

4.4 BUSINESS BENEFITS 

MTR’s commitment to the growth of long-term shareholder value is based on a 

number of compelling business drivers: 

• Reducing risks to the safety of our customers and staff and to the 

environment at large reduces staff lost time and prevents possible claims 

that could impact net revenues. 

• Demonstrating good corporate governance and transparency, which is 

increasingly important in attracting investors, particularly those in the 

international debt markets. 

• Managing reputation externally as well as internally. 


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• Maintaining an efficient use of traction energy to power trains, limiting 

resource use and minimizing waste disposal costs. 

• Encouraging staff to develop their skills and implementing international 

best practices to improve productivity. 

• Ensuring construction projects proceed with minimal delays. 

4.5 RISK MANAGEMENT 

As a responsible corporation, MTR, through its corporate governance and 

management structures, seeks to identify and manage risks which may 

materially affect its business and by implication, the interests of our 

shareholders, customers and staff and the Hong Kong environment. Risk 

management is not analogous to sustainability but by likening risk 

management to sustainability, MTR gains greater insights into the creation of 

long-term shareholder value. 

Table 4.1 presents a non-exhaustive selection of MTR’s priority business risks. 

MTR has adopted a three-year program to develop further its approach to risk 

management, strengthen its reporting systems and related internal controls 

and provide enhanced comfort to its stakeholders over the quality of 

information provided. To this end it has engaged PricewaterhouseCoopers to 

assist and support this programme. Further details are provided in Box 4.1. 

MTR has a four-stage approach for managing business risk (Figure 4.1). 

Identification: By considering in parallel the three elements of sustainability 

(economic, social responsibility and environment), a long list of possible risks 

to the business is compiled. At this stage, the emphasis is on generating a 

wide range of risks (risk register) with no attempt to assess their importance. 

Prioritization: Each of the identified risks is assessed in terms of severity 

defined by consequence and frequency of occurrence. The prioritization of 

risks is undertaken separately for the three elements of sustainability as their 

severities are not necessarily directly comparable. Risks with a high 

consequence – likelihood score are identified as priority business risks and 

are taken forward to the next stage for senior management attention. To 

ensure their status remains up-to-date, business risks are reviewed 

periodically and as events take place. 

Action: For each priority risk, ownership is agreed and actions identified. 

Risks are identified and prioritized by the Executive Directorate and 

subsequently approved by the Board. Actions are then allocated to relevant 

Division(s). Further details are available in the 2002 MTR Corporate 

Sustainability Report. 

Monitor & Report: The implementation and effectiveness of the actions are 

monitored on an ongoing basis using key performance indicators wherever 

possible. Senior management is informed of risk and action status through 

regular reporting and key results are presented in MTR’s Annual Report and 

Corporate Sustainability Report. 


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Table 4.1 Selected Priority Business Risk, Targets and Provisional Performance Indicators 

Priority Business Risk 

Economics 

Provisional Performance Indicator 

Maintaining business in deflationary Total shareholder return as compared to Hang Seng 

economy 

Index 

Growth of shareholder value in 

Total shareholder return as compared to Hang Seng 

developed market 

Index 

Clarity of roles between Government, Accuracy and transparency of governance structure of 

regulator and central provider. 

MTR 

Ensure continued impartiality of the Accuracy and transparency of governance structure of 

Board 

Social Responsibility 

MTR 

Maintaining passenger numbers 

Passenger numbers 

(Section 5.3) 

% Customer Service Pledges Achieved 

Developing and retaining motivated 

and skilled staff for the corporation's 

diversification in Hong Kong and 

international acquisitions (Section 5.4) 

Ensuring the health and safety of 

passengers, staff and contractors 

(Section 5.5) 

Environment 

Breaches of Statutory Environmental 

Requirements (Section 6.2) 

Long-term energy supply without 

renewables (Section 6.3) 

Management of Assets (Section 6.4) - 

Staff turnover rate 

Passenger Safety 

Fatality 

Number serious injuries per 100 million PAX 

Staff Safety on the Operating Railway 

Fatality 

Loss Time Injury (LTI) frequency rate per 200,000 manhours 

worked 

Contractor Safety on the Operating Railway 

Fatality 

Reportable accident rate per 100,000 man-hours worked 

Management of Construction Activities on the 

Operation Railway 

Fatality 

No. of events causing serious injury to passenger or 

public, damage to the Operating Railway, or major 

incident to train service arising from interface construction 

activities 

Construction Safety for Railway Extension Projects 

Fatality 

Reportable accident rate per 100,000 man-hours worked 

Legal Compliance (MTR) 

Number of successful prosecutions 

Self-Monitoring Results (Operations) 

% self-monitoring noise samples within criteria set out in 

the Noise Control Ordinance 

% self-monitoring waste water samples within the 

discharge limits stipulated in the effluent discharge 

licenses. 

Legal Compliance (Project Contractors) 

Number of successful prosecutions 

Greenhouse Gas (GHG) emissions (tCO2 equivalent) 


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Box 4.1 Developing our reporting and assurance 

This year at MTR we are embarking on a journey to develop and improve our reporting and 

assurance. In terms of reporting, we have made a number of changes and improvements to our 

reporting in this, our third Sustainability Report. These include our first efforts at sustainability 

accounting and an inventory of our green house gas emissions. 

We also conducted a review of our assurance arrangements and undertook to gain enhanced 

comfort over the quality of our reported sustainability information (qualitative and quantitative). 

We have built on the relatively limited scope of the verification process that we commissioned 

last year, which involved limited testing of a sample of the information that they assured. We 

appointed PricewaterhouseCoopers who work to internationally recognised professional 

assurance standards that set out a framework for the nature and extent of the assurance work 

needed. 

PricewaterhouseCoopers conducted a programme of interviews with management, reviewed 

documentation and carried out analytical review supplemented, where necessary, with data 

testing, in relation to all the information selected for assurance. They also reviewed the whole 

report to confirm that there are no inconsistencies with the findings of their work. This work is 

consistent with a limited assurance assignment as defined by the IFAC international standards. . 

The statements and data in the Report marked with the symbol � are the subject of 

assurance work by PricewaterhouseCoopers. Please refer to the Assurance Statement in 

Section 10 for more information. 

Going forward we plan to work proactively with our stakeholders and our assurance providers 

to: 

� 

� 

� 

Identify the material aspects of our sustainability performance. 

Focus future target setting, reporting and assurance efforts on these areas in the coming 

years. 

Build up our reporting systems and controls to enhance the quality and credibility of our 

reported sustainability information further. 


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Monitor & Report 

Monitor implementation and 

effectiveness of actions. 

Internal and external reporting. 

Figure 4.1 MTR’s Risk Management Process 

Identify 

Identify economic, people and 

environmental risk (Risk 

Register). 

ENVIRONMENT 

• legislative breaches 

• energy supply…. 

• mxxx.… 

SOCIAL 

RESPONSIBILITY 

FINANCE 

• bxxx… • maintain passengers 

• shareholder value…. 

• exxxx…. • develop staff…. 

• deflationary environment…. 

• major safety incident….. 

• role of Govt, M T RC… 

• xxxx… 

• fa lling property values…. 

• xxxx… 

• debt financing…. 

Action 

Allocate ownership & develop 

actions for priority risks. 

ENVIRONMENT 

• energy supply…. SOCIAL 

RESPONSIBILITY 

FINANCE 

maintain passengers 

• Reduce direct costs 

• Develop staff skills 

high 

Frequency 

low 

Prioritize 

ENVIRONMENT 

SOCIAL RESPONSIBILITY 

FINANCE 

low 

Consequence 

Priority Risk 


17 

high

4.6 LEADING THE WAY 

In 2003, MTR achieved a number of significant milestones in corporate 

responsibility. A selection of these are presented below and discussed in 

greater detail in subsequent sections of the report. 

• Continued inclusion in the two leading global sustainability indexes, the 

Dow Jones Sustainability Index and FTSE4Good. 

• Maintaining the certification of MTR’s Project and Operations Divisions to 

ISO14001, the international standard for environmental management 

systems. 

• Initiated a review of the Code of Conduct and an audit on the compliance 

to Corporate policies. 

• Achieving 23 of the 24 quantitative performance targets established by 

Project and Operations Divisions during development of the ISO14001 

environmental management system (Section 6). 

• Continued implementation of the recommendations made in the 4 th Staff 

Attitude Survey to encourage staff development at the middle 

management level and the undertaking of a further Staff Attitude Survey 

2003 (Section 5). 

• Establishment of the Sustainability Advisory Board for the Tung Chung - 

Ngong Ping Cable Car (Section 5). 

• Continued commitment as signatory to the World Economic Forum 

Corporate Citizenship Initiative, placing corporate governance and social 

issues at the highest levels of management. 

• Participation in the second phase of the Impacts of Reporting Project being 

undertaken by AccountAbility in the UK (see Box 4.1). 

• Continued leadership for and implementation of the UITP’s (Union of 

International Transport Providers) Charter on Sustainable Development 

(see Box 4.3). 

• Organizational Stakeholder of and regional leadership for the Global 

Reporting Initiative. 

• Winner of the Association of Chartered Certified Accountants (ACCA) 

Hong Kong’s first Environmental Reporting Award. 

• Gold Award for Environmental Reporting from Business in the 

Environment Council, Hong Kong. 

• Runner up for the Environmental Excellence Award at the Asia Corporate 

Social Responsibility Forum 2003. 


18

Box 4.2 Impacts of Reporting with AccountAbility 

The MTR is participating in the second phase of the Impacts of Reporting Project being 

undertaken by AccountAbility in the UK with a group of internationally known companies. The 

project explores ways to support effective corporate reporting and will focus on the following 

questions. 

• 

• 

• 

How can best value be derived by organizations from voluntary reporting initiatives? 

Is reporting being effectively used as a management tool for successful stakeholder 

engagement? 

Does assurance enhance business performance as well as build credibility? 

MTR will be focusing on using the report as a tool in promoting internationalisation of its 

operations together with the possible upcoming merger with the Kowloon Canton Railway 

Corporation in Hong Kong. 

The companies participating in this project include: Aracruz (Brazil), Barloworld (South Africa), 

BASF AG (Germany), BNFL (UK), ConocoPhillips (USA), Dow Chemical (USA), MTR (Hong 

Kong), Novo Nordisk A/S (Denmark), Westpac Banking Corporation (Australia) and W H Smith 

(UK). Further details at www.accountability.org.uk. 

Box 4.3 UITP Sustainable Development Charter 

MTR has played a leading role in developing the UITP (Union of International Transport 

Providers) Charter on Sustainable Development, which officially launched at the UITP’s World 

Congress in Madrid in May 2003. There are 19 full signatories to the Charter, including RATP 

(France), MTA New York City Transit (USA) and MTR (Hong Kong). In signing the Charter, 

metros commit to the following. 

1. Foster leadership on sustainable development through dialogue and exchange of best 

practice with all stakeholders. 

2. Facilitate training and mentoring through activities and forums focused on sustainable 

development practices. 

3. Influence international and national government policy to develop a responsible balance 

between social, environmental and economic considerations. 

4. Adhere to a set of world-wide indicators for regular reporting on sustainable development. 

In addition to the Charter, MTR also assisted in preparing the UITP brochure entitled Three 

Stops the Mobility. This brochure outlines public transports contribution to sustainable 

development. 

Worldwide workshops are planned in 2004 and 2005 in support of this initiative leading up to the 

UITP World Congress in Rome 2005. 

More details at www.uitp.com. 


19

Case Study Corporate Evolution Towards Sustainability 

In last year’s report, we revisited the rugby ball as a visual representation of corporate 

sustainability. We consider that MTR’s achievements during 2003 have led to a slight 

expansion of the football in the social and environmental directions, as well as slight expansion 

in the economic direction. 

Environmental 

Economic 

2001 

Social 

Environmental 

4.7 SUSTAINABILITY ACCOUNTING 

Economic 

2002 

Social 

Environmental 

Economic 

During 2003 and early 2004, MTR undertook a Sustainability Accounting study 

to estimate the costs of managing priority social responsibility and 

environmental business risks for the operating railway and MTR’s support 

divisions (1) for calendar year 2003. It is MTR’s intent to estimate these costs 

and benefits on an annual basis to provide a broad indication of how these 

costs change as the Corporation evolves into new business areas and 

geographic locations and invests in new railways. 

At an early stage, it was agreed internally that the study would not be 

sufficiently accurate to allow its results to be used for management purposes. 

As such, the study was primarily intended to reinforce MTR’s commitment to 

transparency and openness to its stakeholders. In addition, many 

organisations, especially Hong Kong corporates and urban rail operators world 

wide, regard MTR as a role model and are keen to understand the financial 

costs of incorporating sustainability as a means of enhancing long-term 

shareholder value. 

The study was undertaken by an ad hoc MTR Working Group with discussions 

with senior management. The framework for the study was based on MTR’s 

priority business risks and on the Corporate Sustainability Assessment 

questionnaire developed by Sustainable Asset Management (2) . MTR’s 

Activity Based Costing (ABC) System was used to provide cost data, 

comprising staff costs and departmental operating expenses, for the study and 

already incorporates some costs that are inherent in the activities reported 

below. Cost data from the ABC system does not include capitalised 

activities (eg: capital works, projects work and extension works). The 

majority of costs incurred by the Project and Property Divisions are 

capitalised costs and as such, these Divisions were not included in the study. 

( 1) Legal & Procurement, Headquarters, Finance and Human Resources & Administration. 

( 2) SAM is the research provider for the Dow Jones Sustainability Index. 


20 

2003 

Social

Summary results of the study are presented in Table 4.2. The cost of 

managing priority social responsibility and environmental business risks for the 

specified Divisions is HK$292m, equivalent to 18% of total costs of 

HK$1,643m (Figure 4.2.). 

Table 4.2 Costs of Managing Priority Social Responsibility and Environmental 

Business Risks 

Cost of Managing Priority Business Risks HK$ 

Ensuring Passenger Safety HK$42m 

Maintaining Passenger Numbers* HK$76m 

Developing and Retaining Motivated and Skilled Staff HK$161m 

Ensuring Environmental Compliance and Improvement HK$13m 

TOTAL Hk$292m** 

*This is an indicative sum representing activities related to the maintenance of the Customer 

Pledge and is currently under review. 

** This figure is estimated to be accurate to 5%. 

Figure 4.2 Costs of Managing Priority Social Responsibility and Environmental 


Priority Risk: Ensuring Passenger Safety 

Priority Risk: Maintaining Passenger Numbers 

Priority Risk: Developing and Retaining Motivated and Skilled Staff 

Priority Risk: Ensuring Environmental Compliance and Improvement 

Operational Activities: eg: Rail and Station Maintenance 

4.8 CORPORATE SUSTAINABILITY COORDINATING COMMITTEE (CSCC) 

The Corporate Sustainability Coordinating Committee (CSCC) is chaired by 

the Managing Director for Operations and Business Development. The 

CSCC’s overall function is to ensure the implementation of the Corporate 


21

Sustainability Policy and sustainability initiatives by directing, coordinating, 

reviewing and revising as needed the Corporate Sustainability Policy, the 

Divisional Environmental Management Systems, corporate sustainability and 

social responsibility proposals and all sustainability and environmental 

programmes at MTR. 

Box 4.4 MTR Corporate Sustainability Policy 

MTR Corporation Limited is committed to the sustainable development of Hong Kong. We will 

explore and ensure the responsible management of the social, economic and environmental 

aspects of sustainable business opportunities. 

We will: 

1. Comply with all relevant laws regarding sustainability issues; in the absence of legislation, we 

will seek out and observe appropriate best international practice. 

2. Regularly review our business to identify sustainability issues, set performance goals and 

monitor and publish our performance, so as to improve continuously our performance. 

3. Conduct appropriate assessments including Environmental Impact Assessments and broad 

stakeholder engagement programmes for new projects, where required by law and suggested 

by best practice, and implement the recommendations. 

4. Train and encourage our contractors and suppliers to implement MTR recommendations to 

achieve sustainability, and to adopt sustainably acceptable practices in the products and 

services provided. 

5. Educate and train staff in sustainability matters and raise their awareness of sustainable 

development. 

6. Increase appreciation amongst passengers, legislators, opinion makers and the general 

public for the sustainable benefits of railways. 

7. Devise, implement and continuously monitor corporate-wide management systems for 

implementing the sustainability strategy. 

All queries regarding the above policy should be directed to Dr. Glenn Frommer, Sustainability 

Development Manager. 


22

5 SOCIAL RESPONSIBILITY 

MTR in prior years has included a section entitled People. This year we have 

decided to extend the scope of this section to include our wider social 

responsibility. As noted in the CEO’s Statement this section presents our first 

steps in developing a Corporate Social Responsibility Policy and 

communicating that to all our stakeholders. Further developments will be 

included in subsequent sustainability reports. Any comments or suggestions 

on this section or any other section are greatly appreciated 


MTR delivers a world-class railway service in Hong Kong and in doing so 

provides people with more time for life. In addition, MTR plays a pivotal role in 

establishing new communities in Hong Kong centered on rail access through 

its property development activities. 

At MTR, we believe that in order to ensure long term financial sustainability we 

must operate with the highest possible ethical standards with trust from all our 

stakeholders. Our social responsibility is focused on delivering quality to our 

passengers, developing and retaining the best people, ensuring good health 

and safety of all those that interact with us, dialogue with stakeholders 

affected by our future development and engagement with the local community. 

MTR’s Approach to Social Responsibility 

Corporate Social Responsibility (CSR) is defined by Business for Social 

Responsibility as “Achieving commercial success in ways that honour ethical 

values and respect people, communities, and the natural environment”. This is 

somewhat similar to Corporate Sustainability which is defined by the Dow 

Jones Sustainability Index as “a business approach that creates long-term 

shareholder value by embracing the opportunities and managing the risks 

deriving from economy, environmental and social developments.” Corporate 

Sustainability requires a robust business case, whilst CSR attaches greater 

importance to values-driven businesses. 

By applying a risk management approach as outlined in Section 4, MTR 

considers CSR to embody the spirit in which Corporate Sustainability is 

undertaken. The issue becomes which ethical values are recognized and 

prioritised and how the business honours those values. As such, CSR helps 

bring a fresh perspective to the identification and management of MTR’s 

business risks. The 2002 MTR Corporate Sustainability Report illustrated how 

the Corporation currently links its core values of Respect, Service and Value, 

to the three major stakeholders, Customers, Staff and Shareholders, through 

an inter-relationship matrix. The cells of this matrix give staff and management 

a better focus on the more important indicators. 

For CSR issues in general, the Corporation has found that the best and 

perhaps simplest way to get a better understanding of the issues is to ask its 

stakeholders, including staff, passengers and communities living near 


23

proposed new rail infrastructure such as West Island Link and South Island 

Link. Details on these surveys and initiatives are presented in this chapter. 

5.2 MAINTAINING PASSENGER NUMBERS – DELIVERING OUR BEST 

The MTR network is designed to meet our customers’ needs. For our rail 

operations, this means the provision of equitable access to affordable, safe, 

useful and reliable transportation, while continually reducing our consumption 

of non-renewable resources, the noise we generate and our emissions to air 

and water. 

The reliability and punctuality of MTR trains is unaffected by road traffic or 

weather conditions. Our trains run 19 hours a day, 7 days a week, from 

06h00 to 01h00. During rush hours, trains can become crowded and 

passengers may wait to board the next train. The high frequency of our 

trains means that passengers need to wait two to three minutes during peak 

hours on the Tsuen Wan Line, Kwun Tong Line, Island Line, and Tseung 

Kwan O Line and an average of four minutes on the Tung Chung Line. The 

Airport Express runs at 10 - 15 minutes interval for the whole day. This level of 

service has resulted in consistently high numbers of passengers using the 

MTR network (Figure 5.1). 

Figure 5.1 �Total Passenger Numbers (1994-2003) 

Total no. of passengers (Urban Lines,in 

thousands) 

850000 

800000 

750000 

700000 

650000 

600000 

550000 

500000 

Total Urban Lines* 

1994 

1995 

1996 

1997 

1998 

1999 

2000 

2001 

2002 

2003 

20000 

18000 

16000 

14000 

12000 

10000 

8000 

6000 

4000 

2000 

* (Tsuen Wan, Island, Kw un Tong, Tung Chung, and Tseung Kw an O Lines) 

0 

Airport Express Line 

Total no. of passengers (Airport Express 

Line, in thousands) 


24

Figure 5.2 Monthly Passenger Numbers (January – December 2003) 

Total number of passengers (in thousands) 

80000 

70000 

60000 

50000 

40000 

30000 

20000 

10000 

0 

Jan 

03 

Feb 

03 

Mar 

03 

SARS (Section 5.6) 

Apr 

03 

May 

03 

Urban Lines* 

Jun 

03 

Jul 

03 

Aug 

03 

Sep 

03 

Oct 

03 

Airport Express 

Nov Dec 

03 03 

* (Tsuen Wan, Island, Kw un Tong, Tung Chung, and Tseung Kw an O Lines) 

2000 

1800 

1600 

1400 

1200 

1000 

800 

600 

400 

200 

0 

Total no. of passengers (Airport Express 

Line, in thousands) 

The MTR Customer Service Pledge sets demanding quantitative targets 

across 12 areas of performance including train punctuality, reliability and 

cleanliness. Over the course of 2001, 2002 and 2003, we achieved all 12 of 

our Customer Service Pledges. Recent MTR passenger surveys involving 

more than 30,000 individual questionnaires from Coffee Evenings, the Liaison 

Train and other and other customer related activities have shown that the 

three most important factors for passengers are train headway (i.e.: time 

between trains), safety and reliability. Passenger safety is discussed in 

Section 5.4. Key data on train headway is presented on page 20 of MTR 

Annual Report 2003. Operational results in terms of reliability are illustrated 

below. 


25

Table 5.2 � Operational Performance in 2003 

Service performance item 1 Customer service 

pledge target 

Train service delivery 2 99.5% 99.9% 

Passengers journeys on time 3 

MTR Lines 


Train punctuality 4 

MTR Lines 


99.5% 

99% 

99.0% 

99.0% 

Actual 

performance 

99.9% 

99.9% 

99.6% 

99.9% 

Train reliability 5 500,000 Km 1,213,247 Km 

In addition we maintain passenger numbers with specific programs, some of 

which are outlined below. 

• We continue to renovate our stations to make a better environment for 

passengers with new shops and facilities (e.g. Internet Centres); 

• We implemented a series of activities including a bonus point program 

encouraging higher usage – the MTR Club Vow Fun Program; and 

• We continue to offer discounts to elders and children for both Airport 

Express and Urban Lines. Fare savers were also installed at various 

shopping malls and other locations to offer HK$2 dollar discounts 

passengers. Lastly, intermodal discounts were extended to passengers 

taking MTR and connecting to and from other modes of transportation like 

minibuses. 

Maintaining Passenger Numbers – Progress against 2003 Target 

Achieved 

To achieve the targets in MTR’s 2003 Customer Service Pledges 

1 Performance excludes events the causes of which are not under the control of MTR or are the results of improvement 

projects on the operating railway. Delay means a train operated on the MTR/ AEL which, for the complete journey 

between its starting point and destination point, has exceeded the designated time for that journey for at least the 

specified amount of time. 

2 (Actual train trips in a month/Scheduled train trips in a month) * 100% 

3 [(Incoming passengers in a month – passengers in a month delayed ≥ 5 minutes)/Incoming passengers in a month]*100% 

4 [(Actual train trips in a month – Train trips in a month delayed by ≥ x minutes)/Actual train trips in a month]*100% 

where x = 2 for MTR and x =5 for Airport Express Line (AEL). 

5 Actual revenue car-km run in a month/ total number of train failure incidents with trains delayed by at least 5 min in a 

month 


26

5.3 DEVELOPING AND RETAINING MOTIVATED AND SKILLED STAFF 

MTR’s ability to deliver on its Customer Service Pledges is a direct reflection 

of the high levels of skill, motivation and professionalism amongst our staff. 

Our philosophy and culture enable us to attract, retain and develop high 

calibre people at all levels, through offering well-structured remuneration, 

training and career paths and a stimulating, caring working environment with 

open staff communication for employees, consultants and contractors. 

With continued efforts to enhance productivity, MTR’s total workforce has 

fallen continuously since 2000, due to completion of the Tseung Kwan O Line 

(TKL) (Figure 5.3). 

The voluntary turnover rate 1 for MTR for 2003 was 2.9%�. This represents 

an increase of 1.1% from 2002. The average voluntary turnover rate in other 

Hong Kong companies has been 7.9% in 2003 and 7.8% in 2002 (2) . Over 

the years, increases in productivity have been achieved by organisational 

restructuring and streamlining, balanced by staff redeployment and the steady 

development of a multi-skilled workforce (Figure 5.4). MTR’s staff efficiency 

compares favourably with those of other leading metro lines worldwide (Figure 

5.5). 

Figure 5.3 MTR Staff Numbers (2000-2003) 

Number of Staff 

8,000 

7,000 

6,000 

5,000 

4,000 

3,000 

2,000 

1,000 

0 

2000 2001 2002 2003 

Year 

1 Sum of monthly turnover rate:[(monthly number of voluntary leavers/total staff at month end)*100]. The number does 

not include temporary staff, part time staff and UK staff. 

( 2) Institute of Human Resources Management, Manpower Statistics 


27

Figure 5.4 MTR Staff Productivity (1999 – 2003) 

Figure 5.5 Staff Efficiency (Passenger per Labour Hours) 

120 

100 

80 

60 

40 

20 

0 

* 

Staff Efficiency (passenger per labour hours) 

MTRC 


* Other metropolitan railways 

* 

2002 

2001 

Identities of the other metropolitan railways in the CoMET Report have been 

removed to maintain confidentiality. 


28

5.3.1 Training and Development 

We are committed to maintaining our excellent service delivery record through 

ongoing training and development of our staff. Staff competency in running a 

safe and efficient railway is ensured through: proactive and high quality 

training technologies, such as sophisticated railway training facilities and 

accelerated development schemes for high potential staff at management and 

professional levels. In 2003, we achieved three of our four training and 

development targets, as presented in Table 5.1. The target relating to our 

Knowledge Management System was not met as full implementation of the 

System will need to be continued during the course of 2004. 

Case Study: Knowledge Management System 

Knowledge Management (KM) is a new discipline of enabling individuals, teams and the entire 

organization to collectively and systematically create, share and apply knowledge to better 

achieve business objectives. Subsequent to the pilot in Operations and Project Divisions, the 

company wide KM was launched in 2003 and KM policy was developed and applied to the 

whole company. In Operations and Project, it has been promoted mainly through the Knowledge 

Library (KL) and Virtual Team (VT). 

The Knowledge Library is a repository capturing knowledge created in MTR’s business 

processes. It serves as the platform for managing company knowledge, the content of which 

has been structured in a way to optimise day-to-day sharing and re-use. 

By the Virtual Team, parties working on a project communicate through a virtual (electronic) 

workspace where documents created during the course of the project are automatically 

captured and stored. The practice reduces the chance of loss of documents and speeds up their 

transfer and retrieval. It also facilitates the distilling of useful knowledge from the project 

workspace to KL. 

Knowledge Management will improve the productivity and competitiveness of MTR in the long 

run. The following benefits have, thus far, been realised in the early stages of Knowledge 

Management implementation in Operations and Project. Knowledge management has: 

• 

• 

• 

• 

• 

Improved access to existing ideas leading to significant cost reductions; 

Transferred best practices faster, leveraging knowledge and improving quality; 

Increased organisational responsiveness and adaptability; 

Increased the efficient use/reuse of critical knowledge assets; and 

Enhanced functional effectiveness. 

5.3.2 Code of Conduct 

The MTR Code of Conduct sets out the policies and practices that the 

Company has developed to conduct itself responsibly with its internal and 

external stakeholders. It explains MTR’s business philosophy and values 

governing staff conduct in achieving business goals. The aim of the Code is to 

sustain a high level of integrity in all aspects of the Corporations operations. 

Following publication of the Code of Conduct in 2002, MTR has carried out 

extensive training and a communication campaign to ensure all levels of staff 


29

understand the content of the Code and the philosophy of an ethical working 

culture. All staff was issued a personal copy of the Code of Conduct. Each 

manager was also issued a Corporate Guidebook for Managers with particular 

examples for better illustration and communication with staff. During 2003, 

the Code of Conduct was reviewed against recent developments in corporate 

governance standards, including the standards set out under the Sarbanes- 

Oxley Act of 2002. 

To promote similar practices with contractors and to make it available for 

interested shareholders, customers and interested parties, the Company has 

placed the Code of Conduct on the MTR website for public access. 

The Code of Conduct focuses on the following areas: Ethics in management; 

Bribery, illegal gifts, entertainment and commissions; Conflict of interests; 

Relationship with suppliers, contractors, consultants and interfacing parties; 

Responsibilities to shareholders and the financial community; Relationship 

with customers; Relationship with employees; Health and safety; 

Responsibilities to the community; and Monitoring of compliance & the means 

of enforcement. 

Further guidance on sexual orientation, disability discrimination and family 

status will be completed in 2004 and communicated to all staff. 

5.3.3 Staff Communication and Consultation 

Since 1980, MTR has established a comprehensive staff consultation 

mechanism that has proved to be successful in resolving issues of common 

concern between management and staff as well as reinforcing mutual trust 

(Figure 5.7). 

This mechanism is a two tier one comprising the Joint Consultative 

Committees (JCCs) at the foundation level and the Staff Consultative Council 

(SCC) at the corporate level. The SCC is for discussing matters of company 

wide interest while JCCs are departmental consultative bodies. About 460 

staff is elected by their colleagues to serve on 23 JCCs across MTR. 


30

Figure 5.6 MTR Staff Consultation Mechanism 

Apart from the staff consultation mechanism, there are two staff unions, the 

Staff General Association and the Staff Union. MTR maintains regular 

dialogue and cordial relations with the unions. 

5.3.4 Staff Attitude Survey 

To gauge staff’s attitude and opinions about working at MTR, we conducted 

our fourth Staff Attitude Survey (SAS) in 2001. This provided essential input 

in formulating our future policies and plans. Staff identified a number of 

areas where MTR was strong including company image, pay and benefits, 

training, safety and working conditions, downward communication and 

employee involvement. Staff also raised concerns on job security, staff 

morale and work stress. 

An action plan for the corporate issues identified in the 2001 SAS was devised 

and communicated to staff in 2002. Implementation of the action plan 

commenced in 2002 with on-going efforts by various parties. In 2003, our 

efforts to address corporate issues continued and included enhancing 

communication between management and staff, reviewing organizational 

effectiveness and encouraging multi-skilling. MTR showed its appreciation to 

staff for their tremendous efforts during commencement of the Tseung Kwan 

O Line operation in 2002, by organising two Family Days to Ocean Park in 

2003 to restore work / life balance. A training programme entitled “A New 

Horizon for Leaders” was launched to enhance communication and leadership 

skills of 1,100 junior managers and senior supervisors. 

In order to monitor trends of employee attitudes and measure the progress of 

the follow-up actions, another SAS was conducted at the end of 2003. A 

random sampling approach was adopted to make the survey more cost 


31

effective. The Corporation plans to conduct such surveys every 2-3 years to 

gauge staff perception, satisfaction and morale in a more timely and efficient 

manner. 

97% of the 2,000 randomly selected staff that were invited participated in the 

2003 survey. To ensure confidentiality and impartiality, an independent 

survey company assisted in the project and performed the data analysis. 

Results of the survey will be released in 2004 and will further support MTR in 

making continuous improvements. 

5.3.5 Equal Opportunities 

MTR’s Code of Conduct formally commits the Corporation to the achievement 

of equal opportunities for all its employees. All employees are assessed on 

their ability and suitability to meet their job requirements irrespective of their 

seniority, gender, race, age or educational background. 

5.3.6 Human Rights 

Most of MTR’s core business activities take place in Hong Kong where Human 

Rights violations such as child, forced and compulsory labour are extremely 

rare. Our entry into markets outside Hong Kong will require additional 

vigilance on such issues. Currently, this work primarily comprises design for 

which we employ engineering professionals. In all cases, we ensure 

compliance with local laws. 

5.3.7 Rewards & Benefits 

MTR benchmarks the rewards and benefits provided to staff against other 

large and reputable Hong Kong companies to attract and retain high calibre 

people at all levels. 

During the SARS-stricken economy, MTR launched a series of cost reduction 

measures. Among these was the “One Day No Pay Leave Per Month 

Programme”, implemented upon consultation with staff from July to December 

2003. Due to staff commitment and hard work, MTR’s patronage and other 

commercial activities recovered sooner than expected. To show MTR’s 

appreciation, we provided all staff with a special payment to fully compensate 

the reduction in salaries. 

Developing & Retaining Motivated and Skilled Staff – Progress against 2003 

Targets 

Achieved 

Achieved 

Achieved 

Not achieved 

Achieved 

Conduct a pilot training program for 1,200 managerial and supervisory 

staff as one of the follow-up actions of the 2001 Staff Attitude Survey. 

To achieve the targeted training ratios for Operations Division Staff (3- 

4%) and staff of other divisions (1-2%) 

Management training and development department to provide 346 

training classes and 8073 trainee mandays for MTR staff. 

Promote HR knowledge sharing and enhance staff’s knowledge through 

the development and provision of a comprehensive Human Resource 

Knowledge Management System. 

Maintain open staff communication and consultation. 


32

Achieved 

Achieved 

Organise activities or staff events to enhance staff motivation and boost 

morale. 

Develop a set of clear and practical guidelines that stipulates the 

standards of behaviour for employees to foster an ethical culture in the 

Corporation. 

5.4 ENSURING THE HEALTH AND SAFETY OF PASSENGERS, STAFF AND 

CONTRACTORS 

MTR is committed to ensuring the health and safety of staff, customers, 

contractors and the public on its premises. We take care to ensure a climate of 

safety awareness in all areas and strive for continuous improvement in safety 

performance. Our efforts once again resulted in safety records for all groups 

that are among the best in the world for our type of operations. Unfortunately 

however, 7 fatalities occurred amongst MTR passengers in 2003. These 

include suicides, trespass on tracks, passengers’ own medical conditions and 

one accident on an escalator�. 

Figure 5.7 shows fatalities for 2001 and 2002, which were due to passenger 

suicides, passengers’ own medical conditions and industrial accidents. The 

identities of the other metropolitan railways in the CoMET Report have been 

removed to maintain confidentiality. 

Figure 5.7 Fatality per Billion Passengers 

70 

60 

50 

40 

30 

20 

10 

0 

2002 

2001 

Safety: Fatality per million passenger 

MTRC 

Source : Comm unity * of Metros (CoMET) * 

* Other metropolitan railways 

MTR is committed to building a safe working and traveling environment for our 

staff, passengers and contractors. By enforcing stringent safety 

requirements for meeting our very high standards, launching various 

awareness enhancement campaigns, implementing effective award systems 


33

and offering comprehensive safety training to both our contractors and staff, 

we have successfully nurtured a safety culture and sustained safety 

excellence in all aspects of our operations. 

MTR has ongoing programmes to raise safety awareness amongst our 

passengers, staff and contractors, which has led to improvements in our 

overall safety performance (Figure 5.8). In particular, accident rates of staff 

and contractors in 2003 are the lowest they have been in the last 5 years. 

Greater emphasis was placed on promoting safety messages relating to train 

doors and platform gaps as statistics from recent years indicated that these 

were areas of higher risk. 

Based on the good performance in 2003, a set or even more stringent targets 

has been established under 9 safety objectives. This reflects the 

Corporation’s firm commitment to strive for continuous improvement in our 

safety performance. 

In January 2004, we experienced an arson attack on one of our trains 

travelling from Tsim Sha Tsui to Admiralty. With the effective response of 

members of our staff and the calm reaction of passengers, the train was 

brought safely to its destination and evacuated within two minutes. It was 

fortunate that no one was physically injured in an incident that has the 

potential to do great damage. 

Figure 5.8 Incidents* per Million Journeys Carried (1993-2003) 

Incidents per Million Passengers 

Carried 

1.20 

1.00 

0.80 

0.60 

0.40 

0.20 

0.00 

1993 1995 1997 1999 2001 2003 

Year 

* The term ‘Incident’ refers to accidents such as injuries to passengers, staff and contractors or 

incidents such as derailment which are defined as reportable incidents under the Mass Transit 

Railway Ordinance. 

5.4.1 MTR Safety Month 

Since 1995, every November has been designated as MTR Safety Month. 

Safety Month is an annual event organised as part of the MTR Corporation’s 

series of passenger behaviour education activities to raise public awareness 

on safety and courtesy when travelling on the MTR. 


34

“Be Safe and Considerate, Never Force Your Way into the Train” was the 

theme of the 2003 MTR Safety Month. To help promote the message, the 

Corporation introduced a pair of new-look safety icons – “rundee” and “b.i.” – 

carrying a modern and energetic image. The two characters are the first of a 

series of characters planning to roll out gradually to draw passenger attention 

to the importance of safety and courtesy when travelling on the MTR. In 

addition, 96 safety ambassadors wearing bright green uniforms were on duty 

at selected MTR stations, reminding passengers to travel safely on the MTR. 

Every month, ten Safety Ambassadors are deployed to educate/remind 

passengers of the safe behaviour when riding on escalators. They work at 

the "top 3 stations" which had the highest number of cumulative escalator 

accidents in the preceding 12 months. 

5.4.2 Safety Performance 

The safety performance of MTR’s Operations and Projects Divisions is 

displayed in the table below. 

Table.5.2 Performance Against the Quantitative Safety Targets for 2003 

Objective Description Target Performance 

Passenger Safety Fatality 0 1 (1) 

Staff Safety on the 

Operating Railway 

Contractor Safety on 

the Operating Railway 

Management of 

Construction Activities 

on the Operation 

Railway 

Risk Management of 

the Operating Railway 

Construction Safety for 

Railway Extension 

Projects (3) 

No. of serious injuries per 100 

million passengers (Figure 5.9) 

7.2 or below 6.69 

Fatality 0 0 

Lost time injury frequency rate (2) 

per 200,000 man-hours worked 

(Figure 5.10) 

0.72 or below 0.42 

Fatality 0 0 

Reportable accident rate per 

100,000 man-hours worked 

(Figure 5.11) 

No. of events causing serious 

injury to passenger or public, 

damage to the Operating 

Railway, or major incident to 

train service arising from 

interface construction activities 

Reduce the number of significant 

hazards currently identified 

0.45 or below 0.29 

0 0 

10% reduction 22% reduction 

Fatality 0 0 

Reportable accident rate per 


(Figure 5.12) 

1.6 or below 0.52 

(1) This was due to an escalator accident and does not involve fatalities due to passenger 

suicide, passengers’ own medical conditions or trespass. 


35

(2) LTI Frequency Rate= (Number of lost time injury / Total Number of manhours worked) * 

200,000. Lost time injury (LTI) is defined as an accident to a staff member, who, as a result of 

the accident while on duty, is unable to work for one complete work shift or more. 

(3) Railway Extension Projects includes all Civil and Electrical & Mechanical works for the 

following projects: West Rail Interface Works, Tsim Sha Tsui Station Modifications, Exit C3 

Modifications at Mong Kok, and the Penny’s Bay Line. 

Figure 5.9� Passenger Safety on the Operating Railway 

No. of serious injuries per 100 million 

passengers 

8.00 

7.50 

7.00 

6.50 

6.00 

5.50 

5.00 

2001 2002 2003 

Year 

Target No. of serious injuries 

Figure 5.10� Staff Safety on the Operating Railway 

Lost time injury frequency rate per 


0.90 

0.80 

0.70 

0.60 

0.50 

0.40 

2001 2002 2003 

Year 

Target Lost time injury frequency rate 


36

Figure 5.11� Contractor Safety on the Operating Railway 

Reportable accident rate per 100,000 

man-hours worked 

0.65 

0.55 

0.45 

0.35 

0.25 

0.15 

2001 2002 2003 

Year 

Target Reportable accident rate 

Figure 5.12� Construction Safety for Railway Extension Projects 

Reportable accident rate per 100,000 

man-hours worked 

1.90 

1.70 

1.50 

1.30 

1.10 

0.90 

0.70 

0.50 

0.30 

5.4.3 Property Management 

2001 2002 2003 

Year 

Target Reportable accident rate 

The annual number of accidents for Property Management Department (PMD) 

has remained in a single-digit figure for the past 3 years. The accident rates 

are generally acceptable as many members of PMD frontline staff are required 

to carry out frequent maintenance, repair and management works in our 

managed properties. Adequate safety training has been provided with a view 

to maintaining a high level of safety awareness among all PMD staff so that 


37

they always endeavour to minimize the occurrence of accidents. Indeed, a 

majority of accidents that happened in the past 3 years were only minor cases 

in which the man-days lost were kept at low levels. 

Figure 5.13 Number of Accidents for the Property Management 

No. of Accidents 

10 

8 

6 

4 

2 

0 

2001 2002 2003 

Year 

Figure 5.14 Lost time injury for Property Management Department 

Frequency Rate (LTI) 

1.6 

1.4 

1.2 

1 

0.8 

2001 2002 2003 

Year 


38

Figure 5.15 Number of Man-days lost for Property Management Department 

Man-days Lost 

38 

36 

34 

32 

30 

28 

26 

24 

22 

20 

2001 2002 2003 

Year 


39

Case Study: Outbreak of SARS in Hong Kong 

In March 2003, the outbreak of Severe Acute Respiratory Syndrome (SARS) in Hong Kong had 

caused serious concern as the disease was developing rapidly with an increasing number of 

reported cases, especially in Amoy Gardens. The latter is just east of the Kowloon Bay MTR 

Headquarters and station, and just east of Telford Plaza and Telford Gardens, MTR managed 

property and estate. At the outset, little was known how the disease was transmitted. In the 

same month last year, the World Health Organisation issued a global alert on SARS and 

imposed travel advisories on affected areas. Suspension of classes at schools and universities 

in Hong Kong then followed suit. Consequently, MTR operations were impacted with a drastic 

downturn in urban line and Airport Express service as well as a direct effect from Amoy Gardens 

on Headquarters personnel. Ridership also fell by 25% during the peak months of SARS (See 

Figure 5.2). 

Following the outbreak of SARS, MTR proactively set up an internal infrastructure for 

disseminating health information to staff and protecting employees who were particularly 

vulnerable. The latter included pregnant women who were excused from work at MTR’s 

headquarters. 

To protect its passengers, MTR took a number of precautionary measures to prevent spread of 

the disease. MTR employed 150 additional cleaners to undertake intensive and frequent 

cleaning of stations and train facilities during peak hours. Ventilation was enhanced in stations 

by pumping in more fresh air in addition to cool air generated by chillers. Furthermore, 

additional manpower was deployed to inspect the ventilation systems of trains. Cleaning was 

also stepped up at the 19 housing estates, four office buildings and four shopping malls 

managed by MTR. 

In addition, MTR gave out free antiseptic hand towels at counters in two stations. A donation 

box was placed at each counter to raise funds for the Community Chest. MTR raised over 

HK$500,000 through the sale of gift packages for HK$10 during the 2003 Easter holiday and 

directed the money to a fund for the welfare of local medical staff. 

In order to prevent the resurgence of the disease, MTR prepared a Corporate Master Plan for 

Combating SARS in December 2003. The Plan adopts a three-level approach by the HKSAR 

Government, viz Alert Level, Level 1 and Level 2. Different courses of action will be taken under 

the different Levels. 


40

Ensuring the Health and Safety of Passengers, Staff and Contractors – 

Progress against 2003 Targets 

Passenger Safety 

Not achieved 

Fatality: 0. 

Achieved 

Number serious injuries per 100 million PAX: 7.2 or below. 

Achieved 

Achieved 

Achieved 

Achieved 

Achieved 

Achieved 

Achieved 

Achieved 

5.5 ENGAGING OTHER STAKEHOLDERS 

Accessibility 

Staff Safety on the Operating Railway 

Fatality: 0. 

LTI frequency rate per 200,000 man-hours worked: 0.72 or 

below. 

Contractor Safety on the Operating Railway 

Fatality: 0. 

Reportable accident rate per 100,000 man-hours worked: 0.45 or 

below. 

Management of Construction Activities on the Operation 

Railway 

Fatality: 0. 

No. of events causing serious injury to passenger or public, 

damage to the Operating Railway, or major incident to train 

service arising from interface construction activities: 0. 

Construction Safety for Railway Extension Projects 

Fatality: 0. 

Reportable accident rate per 100,000 man-hours worked: 1.6 or 

below. 

MTR are striving to make our railways accessible to all our passengers – 

including the disabled, the elderly and people travelling with babies or small 

children. MTR have installed a range of facilities including tactile guide paths, 

audio induction loops, lifts and ramps (by which 70% of our platforms can now 

be reached), Braille route maps and bi-directional wide ticket gates. Details on 

special facilities for disabled passengers can be found at the MTR Internet 

site. 


41

Case Study: Stakeholder Engagement in Tung Chung Cable Car Project 

The Tung Chung Cable Car Project is one that is in keeping with the theme of sustainable 

tourism . The project comprises: 

• 

• 

• 

• 

construction of a cable car system of about 5.7km long between Tung Chung and Ngong 

Ping; 

construction of associated towers and other supporting structures; 

construction of two termini, one at Tung Chung and the other at Ngong Ping; and 

construction of angle station(s) and other associated infrastructure. 

This is a unique project that focused on public involvement from the start. MTR engaged in 

consultations with key Green Groups (Conservancy Association, Green Lantau Association, 

Green Power, Friends of the Earth, Kadoorie Farm and Worldwide Fund for Nature) and 

relevant Government Departments. All parties were provided with working papers and the 

draft EIA and their comments were taken on board throughout the Study. The feedback was 

used in the assessment of the Project and has allowed design principles to be developed and 

avoidance of conflicts where possible, and has provided a more robust assessment to be 

undertaken. 

At the Ngong Ping terminal site a stream course runs through the site boundary and was initially 

considered to be a highlight of the Theme Village. Observations over a long period of time 

indicated that the water course was stressed through the effects of pollution primarily from 

domestic sources and would pose a health and safety risk to the public. As a consequence of 

MTR's briefing, the Green groups raised their concerns to Government that MTR was not 

following the correct procedures. MTR applied directly to the Environmental Protection 

Department and obtained an Environmental Permit for this diversion. 

MTR provided the findings from these consultations to the Sustainability Advisory Board (SAB), 

which is run by Hong Kong University. The SAB comprises 16 government departments, the 

Po Lin Monastery and green groups and is responsible for producing annual sustainability 

reports for the Tung Chung Cable Car Project. The SAB will be focusing on longer-term 

development of Ngong Ping while leveraging of the cable car. 

Extensive safety and environmental training was undertaken for the Cable Car Project in 2003. 

All staff must complete a Safety & Environmental Induction Course prior to being allowed to 

work on site. MTR held 3 training sessions last year and 30 staff members attended. MTR also 

produced a training booklet on the environment. Works commenced in January 2004. 


42

Case Study: Public Consultation during the West Island Line & South 

Island Line Projects 

MTR Corporation considers that the views and support of the community are paramount to the 

development of railway extensions. As such the views of the public are being sought 

throughout the course of the study, to enable the planning and design of the railway to better 

suit the needs of the community and integrate with the life of the community. 

The West Island Line/ South Island Line (WIL/SIL) public consultation exercise was conducted 

in conjunction with the Feasibility Study. Views from the public have been considered and, 

where appropriate, incorporated into the scheme being developed. 

The key parties consulted during the WIL/SIL Feasibility Study included: 

• 

• 

• 

• 

• 

• 

Southern, Central, Western and Wan Chai District Councils 

Legco Transport Panel 

Ocean Park 

Cyberport 

Professional institutions, e.g. Hong Kong Institute of Architects (HKIA), Hong Kong Institute 

of Planners (HKIP) 

Statutory bodies, e.g. the Advisory Council on the Environment (ACE), the Town Planning 

Board (TPB) 

Most of the parties consulted expressed their support for the WIL/SIL proposal. Many of them 

gave their views on railway alignment, station locations, interchange arrangement, inter-modal 

co-ordination, fares and funding. Some also expressed their concerns on the possible impacts 

of the railway during construction and operation phase. As a result of the continuing public 

involvement, the majority of the new railway lines are underground with most stations 

constructed as rock caverns to minimize the environmental impacts during construction. 

The minority of objecting views included queries on the need of the WIL/SIL and concerns about 

the impact of WIL/SIL on other modes of public transport. The views have been noted and will 

be responded to in due course. 

The public consultation exercise will continue after submission of the Project Proposal. MTR 

will report back to the consulted parties and stakeholders on the latest proposed scheme of the 

WIL/SIL. 

MTR firmly believes that this exercise has provided a better railway project, will enable an 

earlier public endorsement of the WIL/SIL and will pave the way for early implementation of the 

project, which is the most important demand of the residents of Western and Southern Districts. 


43

5.6 COMMUNITY INITIATIVES 

In addition to the Coffee Evenings and Liaison Train noted in regard to 

Passenger Surveys, MTR undertakes regular radio phone-in programs, 

arranges visits and meets regularly with representatives from the Legislative 

Council, local politicians and interested parties. For example, we supported 

the Community chest Green Day Event by sponsoring nearly 30,000 free 

tickets. We also supported non-charitable organizations’ activities by providing 

free poster spaces at stations. 

Box 5.1 All You Need is Love - February 2004 

Romance was in the air at Hong Kong Station and those with love on their minds wrote down 

their thoughts to display on a giant Love Tree put up on 7 February 2004 in the station’s Central 

Subway. On Valentine’s Day, Commercial Radio DJ’s also set up a song dedication corner in 

the Central Subway where passengers dropped by to write down messages that was read out 

by the DJ’s to accompany a special selection of love songs to be played at the station. The 

broadcast was also aired live on Commercial Radio. Love songs were also broadcasted at 

Tsim Sha Tsui, Causeway Bay, Kowloon, Tsing Yi and Airport Stations. 

Case Study - Art in Stations 

The programme commenced in 1998 with the aim of incorporating artistic elements into the 

MTR network to provide passengers with a more comfortable and enjoyable travelling 

environment. The most recent initiative was the Living Art in Stations programme, which was 

launched in 2003. Live performances included dances by school children and acrobatic 

performances. A number of murals were displayed for he 2003 Art in Station Architecture 

initiative including attractive mosaic tile murals in Central and Yau Ma Tei stations. 

Case Study - MTR Shopping Centres 

As a company, we are committed not only to high quality assurance standards, but also have a 

social responsibility in our shopping centre management. We give care and attention to both 

tenants and shoppers alike, and prioritise community involvement in our promotion campaigns. 

An example is the ‘MTR Shopping Centres Good Student Club’, which was formed to 

encourage Hong Kong children and young adults to establish a positive attitude and value 

towards life, and in particular assist students in developing their individual standards of self 

improvement. Awards were given on a monthly basis to students who were exemplary in 

various disciplines or ones who displayed improvement, and a "Student of the Year Award" was 

given to the most outstanding student who was able to distinguish himself in every discipline 

and display continuous improvement throughout the year. 


44

6 ENVIRONMENT 


MTR delivers a world-class railway service, transporting over 2.3 million 

passengers every day. In doing so, MTR makes a significant contribution to 

reducing traffic congestion, noise and air emissions in the densely populated 

urban surroundings of Hong Kong. However, as discussed in Chapter 4, 

there are a number of environmental issues that are considered to be priority 

risks for MTR’s overall business. 

6.2 BREACHES OF STATUTORY ENVIRONMENTAL REQUIREMENTS 

6.2.1 Environmental Management System 

At MTR, environmental responsibility starts at the highest level and cascades 

down throughout the organisation to ensure that staff understands their own 

responsibilities and how they can assist MTR achieve its environmental 

targets. 

The Corporation initiated the development of a corporate-wide Environmental 

Management System (EMS) in 1997 to ensure that all environmental impacts 

were monitored and controlled. The system integrated environmental 

management into all divisional activities to ensure that opportunities for cost 

effective avoidance or mitigation were identified and implemented. 

During 2002, MTR further developed its EMS to meet the requirements of the 

international ISO14001 environmental management system standard. MTR 

received ISO14001 certification for “provision of railway project management, 

operation, maintenance and relevant administrative services” (1) in March 2003 

and has maintained this certification during the course of 2003. 

MTR’s ISO14001-certified EMS is distinctive in a number of ways. 

• Environmental risks were identified and prioritised through a bottom-up 

approach through a series of nine workshops involving over 200 staff from 

across Project and Operations Divisions; and 

• The system is based around a set of challenging, quantitative targets, 

which are designed to improve performance. These are supported by 

detailed action plans defining responsibilities and timescales. 

( 1) Stated scope of ISO14001 Certificate 


45

Case Study: M8 and R4 Rail Lines in Shanghai 

Since 2002, MTR has established a joint venture company Shanghai Hong Kong Metro 

Construction Management Co. Ltd. (SHKMCM) to undertake project management of railway 

construction projects in Shanghai. SHKMCM has been appointed as Owner’s Representative 

to project manage, on behalf of the owner, the design and construction of Shen Song Line 

9(R4). The R4 project is a 31 km metro line comprising 12 stations. It is split into 12 

civil/building and 23 E&M contracts. The total project cost is RMB10 billion and is expected to 

be completed by the end of 2005. 

An Environmental Assessment Report (EIA) for Line 9 was undertaken by the lead engineering 

consultant and the Environmental Research Institute during the design stage. The EIA will be 

submitted to both the National and Shanghai Environmental Protection Bureaus for assessment 

and approval once the Line No.9 Project is registered by the National Planning and Construction 

Committees. During construction, regular environmental inspections will be carried out to 

ensure the works are executed in a manner, which meet the requirements of the local 

regulations and the EIA. 

Case Study: Environmental Management of the Penny’s Bay Rail Link 

The Penny’s Bay Rail Link (PBL) is an extension of the MTR system, connecting the Tung 

Chung Line to the proposed new Hong Kong Disneyland Theme Park (Theme Park) at Penny's 

Bay on Lantau Island. The PBL project will provide 3.4 km of new track and two new stations. 

Environmental management is a key element of the PBL project. The following environmental 

measures have been adopted on PBL Project sites: 

1. Targets for concrete and rebar wastage are set at 10% and contractors regularly (half-yearly/ 

quarterly) report on the achievement of these targets. 

2. Methods for handling, reusing, recycling and disposal of construction wastes are stated in the 

Contractor's Environmental Management Plan which is approved by MTR and in the Waste 

Management Plan which is approved by EPD. The Waste Management Plan is also one of the 

Environmental Permit conditions. 

3. Regular site inspections and waste management audits are carried out to monitor 

construction wastes issues on site and any identified deficiencies will be rectified within a short 

period of time after liaison with the contractor concerned. 

4. Contractors encourage their staff and subcontractors' to reuse scrap rebar wherever possible 

for temporary work with a view to reducing waste and cost. 

6.2.2 Environmental Performance 

Through our efforts to improve efficiencies and reduce costs, we have actively 

sought to improve MTR’s environmental performance. The results of our 

efforts over the last three years are summarised in Table 6.2. 


46

Table 6.1 Key Environment Data 2001 – 2003 

Issue Division 2003 2002 2001 

Green House Gas Emissions 

Greenhouse Gas Emissions Corporate 639,984 CO2 - - 

Wide 

(Section 6.3) 

equivalent 

Electricity Consumption 

Traction Energy 

Waste Generation 

Metals Recycled 

Spent Oil Recycled (% 

Total) 

Water Usage 

Water Consumption 

Operations 782,273 MWh 726,390MWh 709,170MW 

h 

Operations 2.29kWh/train 2.46kWh/train 2.50kWh/trai 

km 

km 

n km 

Operations 1204 tons 941 tons 720 tons 

Operations 100% 

15,800litres 

Operations 253,579 m 3 

50% 

9,414 litres 

20% 

3,154 litres 

187,031m 3 211,073m 3 

The substantial increase in electricity consumption since 2002 is attributable to 

a number of factors including: first full year of Tseun Kwan O Line operation; 

operation of eight-car train on the Tung Chung Line as opposed to the 

previous seven-car trains; precautionary air conditioning measures at stations 

during SARS outbreak; and the opening of Nam Cheung station. 

6.2.3 Legal Compliance 

For all railway operations, projects and property in Hong Kong, MTR has an 

effective and sensible approach to supervising, managing and undertaking 

environmental works to a higher standard of environmental achievement than 

that required by Hong Kong’s environmental ordinances 1 . As a result legal 

compliance is assured provided MTR’s requirements are satisfied. MTR was 

not successfully prosecuted or fined in 2003 �. 

The MTR Operating Railway is directly responsible for legal compliance to 

environmental legislation for normal operations and maintenance works inside 

and outside the stations and along the railway. The Corporation ensures 

through appropriate training and supervision that all necessary permits are in 

order to allow noisy maintenance activities to progress in non-traffic hours with 

minimal impact to local residents. 

Contractors employed by the Operating Railway are however fully responsible 

or their own compliance to the environmental legislation. We note that our 

contractors on the operating railway received no prosecutions under the 

environmental ordinances in 2003. 

MTR Project Division has an Environmental Permit for each of our four 

Designated Projects under the Environmental Impact Assessment Ordinance: 

Mong Kong Entrance C3, Tsim Sha Tsui Station Enhancement Works, 

1 A full list of the environmental ordinances can be found in Section 9. 


47

Penny’s Bay Line and the Tung Chung to Ngong Ping Cable Car. 

Environmental compliance for each of the 8 major worksites are however the 

responsibility of our contractors. In 2003 we are pleased to note that none of 

our contractors for our project activities were successfully prosecuted�. 

MTR Property Division employs contractors who are likewise responsible for 

compliance to environmental legislation. No prosecutions have been issued to 

our contractors in 2003. 

6.2.4 Noise - Operating Railway 

� MTR has agreed with The Environmental Protection Department on an annual 

program of monitoring noise levels at 25 locations along its railway lines to 

ensure compliance. Warnings and abatement notices are issued from time to 

time by the Environmental Protection Department which may be due to 

activities adjacent to railway premises. In addition there were 51 complaints 

received from local residents. Each warning and complaint was investigated 

through ad-hoc monitoring with appropriate corrective actions taken if noise 

levels proved higher than limits set in the Noise Control Ordinance. The 

corrective actions were implemented and proved effective in reducing noise 

levels below these limits. As a result, there were no noise abatement notices 

or prosecutions brought against MTR Operating Railway in 2003. 

An increase in noise complaints was noted with the opening of operations of 

the Tseung Kwan O line. Wheel turning, rail grinding and lubrication of wheel 

flanges have reduced high levels of internal noise. The current levels of noise 

are on par with other major railways, though the levels are higher than the 

other MTR urban railway lines. A program has been put in place to ascertain 

the cause of the noise and develop a mitigation program focusing on track 

support and possibly the wheel rail interface. 

6.2.5 Water - Operating Railway 

� MTR has instituted self-monitoring of wastewater discharge at 153 designated 

discharge points. This monitoring allows corrective actions to be taken in a 

timely fashion to achieve compliance with the water discharge licenses issued 

by the Environmental Protection Department. 

6.2.6 Railway Construction 

Though the compliance to environmental legislation is a responsibility for 

MTR’s contractors, MTR has put in place advanced monitoring and site audit 

arrangements to encourage our contractors to be fully compliant with 

environmental legislation. 

There are weekly environmental site audits and monitoring of noise and dust 

levels supplemented with occasional daily site visits. Letters and advice are 

issued to contractors where there is a danger of a contractor breaching any 

environmental legislation. Partnering with contractors is also extensively used. 

This compliments the training given to contractors and MTR site staff on safety 

and environmental issues. 


48

In addition, MTR has maintained Milestone Payments for compliance to a 

Safety, Quality and Environmental site audits on the Penny’s Bay Line and the 

Tung Chung to Ngong Ping Cable Car. Payment is not issued if the contractor 

fails the site audit. There were no incidents of non-payment in 2003. This 

practice is not standard in Hong Kong, but MTR and our contractors recognize 

the benefits of this system. In addition, MTR remains as the only client in Hong 

Kong to promote contractor achievement awards in safety, quality and 

environment to deserving contractors. MTR has developed a comprehensive 

range of tried and tested measures that are incorporated into its construction 

contracts to ensure that people living and working close to construction works 

do not experience unacceptable levels of noise. MTR monitors the noise 

from construction works undertaken by contractors in much the same way as it 

monitors its own operating railway. During 2003, all monitoring results were 

within legal limits. 

6.2.7 Progress Against 2003 Targets 

During 2003, we fully achieved 91% of the 121 environmental targets 

presented in the last year’s Corporate Sustainability Report (Table 6.3). 

Table 6.2 Progress against 2003 Targets 

Division No. of 

Targets 

No. of Fully Achieved 

Targets 

Corporate 4 3 75% 

Finance 10 9 90% 

Human Resources 10 10 100% 

Legal and Procurement 15 14 93% 

Operations 24 23 96% 

Projects 7 7 100% 

Property Development 14 8 57% 

Property Management 37 36 97% 

TOTAL 121 110 91% 

Table 6.3 Environmental Targets Not Fully Achieved in 2003 

% of Fully Achieved 

Targets 

The table below shows the individual targets not fully achieved and the 

percentage of completion as of 31 December 2003. 

Division Target Status Reason for not 

Achieving Target 

Finance Green Accounting - Develop a 

75% Delayed - completion 

spreadsheet approach to estimate 

environmental spending. 

in May 2004. 

Human 

Resources 

Promote HR knowledge sharing and 

enhance staff's knowledge through the 

development and provision of a 

comprehensive Human Resource 

Knowledge Management System. 

75% Design of the system 

and policy documents 

are under review by 

Management. 


49

Division Target Status Reason for not 

Achieving Target 

Operations Overall 5% Paper Consumption Reduction 75% SARS led to an 

on the top 4 Departments on largest paper 

increased need for 

consumption in Operations Division and 

communication with 

the Procedure and Manual Publication 

Section. 

staff. 

Property 

Development 

Property 

Development 

Property 

Development 

Property 

Development 

Property 

Development 

Property 

Development 

Property 

Management 

Property 

Management 

External Education & Training - As 

appropriate, conduct further study trips to 

acquire information on the latest building 

design and construction technology. 

Property Construction - As Appropriate, 

encourage adoption of metal formwork 

instead of timber formwork for building 

contruction in new development sites. 

Property Construction - Encourage 

contractors to: use off site pre-fabricated 

modular construction. 

Property Construction - Encourage 

contractors to: use dry wall construction. 

Property Construction - Encourage the use 

of tropical hardwood from managed 

sources only. 

External Education & Training - Develop 

programme design packages for tendering, 

in line with the Dream City Concept 

developed by MTR. 

Hong Kong Properties- Continue the 

replacement of fresh water supply 

galvanized iron (G.I.) downfeed pipes and 

soil and waste cast iron (C.I.) drainage 

pipe with more durable material e.g. 

copper pipes and UPVC pipes. 

Kowloon Properties - Construction of noise 

barrier at Telford Gardens refuse collection 

point to reduce noise produced during 

refuse collection. 

75% SARS delayed the 

completion. 

75% Whilst MTR can 

influence, the Joint 

Venture is responsible 

for adopting this 

measure. 





measure. 





measure. 





measure. 

75% Tendering programme 

was delayed as it is 

being coordinated 

with various 

Government 

Departments. 

75% Replacement of all 

drainage pipes by 

uPVC pipes is ongoing 

(90% 

completion) The 

replacement of fresh 

water downfeed pipes 

by copper pipes is ongoing 

(80% 

completion). 

75% Buildings Department 

has approved the 

proposal and site 

work is scheduled in 

February 2004. 


50

Breaches of Statutory Environmental Requirements – Progress against 2003 

Targets 

Legal Compliance (MTR) 

Achieved 

100% compliance with noise, air, water and waste regulations. 

Achieved 

Achieved 

Achieved 

Achieved 

Achieved 

Fully comply with Environmental Permits for Tung Chung – Ngong 

Ping Cable Car and Theme Village Park. 

Self-Monitoring Results (Operations Division) 

100% of self-monitoring noise samples at agreed locations along 

the railway line within Noise Control Ordinance. 

95% of first round self-monitoring comply with the discharge limits 

stipulated in the effluent discharge licences. 

Legal Compliance (Project Division Contractors) 

TST contractors to achieve 100% compliance with noise, air and 

water regulations. 

PBL contractors to achieve 100% compliance with noise, air and 

water regulations. 

6.3 LONG TERM ENERGY SUPPLY WITHOUT RENEWABLES 

Even on one of the world’s most efficient railways, transporting 2.3 million 

people every day necessitates the consumption of large quantities of 

electricity. As one of MTR’s most significant direct costs, electricity 

consumption is constantly monitored and opportunities for further efficiencies 

actively sought and assessed. 

6.3.1 Green House Gas Inventory 

As presented in Table 6.1, MTR achieved one of the two targets relating to 

Green House Gas (GHG) emissions, namely the completion of GHG 

Emissions Inventory for year 2003 based on the WBCSD / WRI Protocol. 

Although it was not possible to collate information on all relevant MTR 

activities, the results presented in Table 6.4 and Figure 6.1 cover the main 

GHG-generating activities. MTR purchases electricity from both CLP and 

HEC. However, data on carbon dioxide emissions per unit of electricity 

purchased by customers in Hong Kong is only publicly available from CLP. In 

developing the estimate of GHG emissions, the most significant assumption 

made was that all electricity consumed by MTR is purchased from CLP. 


51

Table 6.4 � MTR Green House Gas Emissions Inventory 2003 

Activity Tonnes CO2 equivalent 

Electricity – train operation 436,508 

Electricity – managed properties 114,979 

Waste disposed to landfill (1) 76,388 

Electricity – Headquarters 6,791 

Road fleet (2) 2,845 

Fuel - Headquarters 1,588 

Staff flights 885 

TOTAL 639,984 

Figure 6.1 MTR Green House Gas Emissions Inventory 2003 

Electricity - Train Operation Electricity - Managed Properties 

Waste Disposal to Landfill Electricity - Headquarters 

Road Fleet Fuel - Headquarters 

Staff flights 

6.3.2 Scheme of Control 

In Hong Kong, it is currently only possible to purchase electricity generated 

from oil, coal, gas or nuclear sources. This is due to the Scheme of Control, 

( 1) Waste disposed to landfill – Project, Operations & Property Divisions 

( 2) Road fleet – Operations and Property Divisions plus Headquarters 


52

an agreement between the Hong Kong SAR Government, CLP Power and 

Hongkong Electric which regulates the generation and supply of electricity. 

Neither CLP Power nor Hongkong Electric generates electricity from 

renewable sources (1) and the Scheme of Control does not allow other 

electricity providers to enter the Hong Kong market. The situation may 

change on expiry of the Scheme of Control in 2008. As such, MTR’s efforts 

to reduce Greenhouse Gas Emissions are currently restricted to the efficient 

use of electricity in its operations. 

6.3.3 Traction Energy 

Figure 6.2 illustrates MTR’s traction energy per train-kilometre (2) over the last 

ten years. Traction energy decreased in the early 1990s when regenerative 

braking, which converts forward motion into energy to be used later for 

acceleration, was introduced but has increased slightly year on year since 

1995 as increased train frequency has required more demanding regulation 

between stations. 

Figure 6.2 Traction Energy (1993–2003)* 

kWh / km 

3.5 

3 

2.5 

2 

1.5 

1 

0.5 

0 

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 

Year 

* Data prior to 2001 has been previously published. Due to changes in data management, 

data prior to 2001 has not been verified. 

( 1) CLP Power has the right to use capacity at the Guangzhou Pumped Storage Power Station. 

( 2) MTR uses 'traction energy per train-kilometre' rather than 'traction energy per passenger' as train frequency is 

specified in MTR's Operating Agreement with the Hong Kong SAR Government. 


53

Case Study: Reuse of Coping Stones from Platform Screen Doors 

One of the most significant wastes being generated from the Platform Screen Door 

(PSD) project is coping stones, which must be removed from platforms and scrapped 

for PSD installation. The initial plan was for these scrapped stones to be taken to a 

public dump site. However, in order to meet MTR’s Environmental Objectives, the 

PSD team proactively searched for alternatives to reuse the stones. 

After much research, Mr CP Lui, Assistant Construction Engineer of the PSD team, 

found a fish farm owner in Tai Po who agreed to reuse the scrapped coping stones at 

no cost to MTR. The owner has used the scrapped stones to improve the 

environment of his fish farm. 

The fish farm has collected scrapped coping stones from 6 platforms totalling around 

110 tonnes since early 2002. 

Two more organisations have since expressed interest in reusing scrapped coping 

stones. The PSD team has displayed an innovative partnering approach in order to 

meet MTR’s sustainability policy. 

Long-term energy supply without renewables – Progress against 2003 Targets 

Achieved 

Calculate MTR’s Green House Gas (GHG) emissions using 

international guidelines. 

Not Achieved 

6.4 MANAGEMENT OF ASSETS 

Examine opportunities for sourcing electricity from renewable 

sources prior to expiry of Scheme of Control in 2008. 

As presented in Table 6.1, MTR achieved all its targets relating to long-term 

management of assets. 

Whilst the target “to explore the requirement for original suppliers to ‘dispose’ 

of parts/equipment etc. at the end of its life cycle through environmentally 

acceptable means” was achieved, it has been decided not to develop or 

implement contractual requirements for contractors to take back and dispose 

of assets for a number of reasons including: 

- The length of time between procurement and disposal is often over 10 years 

and Contractors place a high cost against future risks; 

- Contractors, either single parties or Joint Ventures, have obligations that 

expire after 12 years (Contract under Seal); and 

- MTR already controls the disposal of special wastes by approved contractors 

by specifying compliance with Hong Kong legislation and through its internal 

Asset Management Manual. 


54

Management of Assets – Progress against 2003 Targets 

Achieved 

Review and implement the environmental assessment criteria for 

the prequalification of contractors and suppliers in terms of ISO 

14001 requirements. 

Achieved 

Achieved 

Achieved 

Achieved 

Continue to implement a policy to segregate scrap to distinguish 

“re-cycle”, “non-re-cycle” components and maximise sales 

benefits. 

Identify 3 or more products/technologies, which can be introduced 

each year to the Corporation. 

Seek to identify alternative products, which are more energy 

efficient. 

Explore the requirement for original suppliers to ‘dispose’ of 

parts/equipment etc. at the end of its life cycle through 

environmentally acceptable means. 


55

7 ECONOMIC 


Whilst corporate reporting on financial performance is well established through 

our Annual and Interim Accounts, reporting on the interactions between MTR 

and the economy is at an early stage of development. As such, this chapter 

outlines MTR’s financial performance and economic contribution. MTR’s 

approach to corporate governance is discussed in Section 4. 

7.2 FINANCIAL PERFORMANCE 

MTR’s Annual Report 2003 describes how the Corporation enhances longterm 

shareholder value and details our financial performance during 2003. 

Of particular interest may be the Financial Review, Profit and Loss Account, 

Balance Sheet and Consolidated Cash Flow Statement. A summary of 

MTR’s financial performance is presented in Table 7.1 (The Annual Report is 

available online at www.mtr.com.hk). 

Table 7.1 Summary of MTR’s Financial Performance (2002-2003) 

2003 2002 

Profit & loss account (HK$ million) 

Turnover (Fare and non-Fare) 7,594 7,686 

Operating profit before depreciation 3,747 4,014 

Depreciation (2,402) (2,470) 

Interest and Finance Charges (1,539) (1,125) 

Profit attributable to shareholders 4,450 3,579* 

Dividend 

Balance sheet (HK$ million) 

2,215 2,161 

Total assets 102,366 101,119* 

Loans, obligations under finance leases & bank overdrafts 32,025 33,508 

Deferred income 5,061 6,226 

Shareholders’ funds 

Financial ratios 

57,292 53,574* 

Operating profit from railway & related operations before 49.3% 

depreciation as a % of turnover 

52.2% 

Non-fare revenue as a % of turnover 27.7% 25.6% 

Gross Debt/equity ratio† 55.9% 62.5%* 

Interest cover (in times) 5.6 4.5 

Restated to include retrospective adjustments on deferred income tax provided in accordance 

with a revised accounting standard. 

† Loans, obligations under finance leases and bank overdrafts as a percentage of 

the shareholders’ funds 


56

Table 7.2 �Summary of MTR’s Total shareholder Return (2000-2003) 

7.3 FARES 

Total shareholder return (3) (from IPO 

2000 to 31 Dec 2003) 


2000 to 31 Dec 2003) in % 


2000 to 31 Dec 2003) Annual Equivalent 

(1) Based on HK$9.38 share price on IPO day. 

MTR Corporation 

Total Shareholder 

Return (1) 

Hang Seng Index (2) 

HK$2.23 per share - 2464.699 HSI points 

23.8% -15.23% 

6.8% -5.0% 

(2) The comparison for the Hang Seng Index has been obtained by making similar adjustments to the 

data available through the Bloomberg Terminal. 

(3) Including dividends 

MTR's fare setting policy is to review and adjust its fares annually, roughly in 

line with inflation. As a result, revenues generated should be sufficient to 

cover operating costs, debt servicing, and capital expenditure, in addition to 

providing an appropriate return to its shareholders. 

One strategy to increase ridership in 2003 included improvement of linkages 

with other modes of transport. We also increased patronage through other 

well-received discount initiatives such as the “Ride 10 get One Free” scheme, 

group tickets and concession fares on the Airport Express Line (AEL). 

To promote the healthy benefits of walking, MTR Corporation joined the Hong 

Kong Medical Association’s “Healthy 8000 Steps” Campaign in 2003. MTR 

identified 10 routes that involve 480 to 1,900 steps. Signs were posted at 

Fare Saver machines and within the MTR to inform passengers of the 

estimated number of steps they would be walking on each route while 

reminding them of the different health benefits that come with walking. 

Passengers could then estimate the number of steps they had walked and 

enjoy the $2 saving on MTR journeys from designated stations by using the 

Fare Saver machines. 

MTR has full autonomy in setting its own fares without any Government or 

legislative approval. Historically, MTR has voluntarily consulted with the 

public, the Government and the legislature before setting its fares. This 

consultation process was formally adopted in the Operating Agreement 

between MTR and the Hong Kong Government. 


57

After carefully reviewing economic conditions in Hong Kong and in the overall 

interest of MTR, the Boards of Directors decided not to implement a fare 

increase in 2003. 

7.4 INTERACTION WITH HONG KONG, ASIAN AND GLOBAL ECONOMIES 

MTR directly employs about 6,629 people and indirectly supports the 

employment of many more in Hong Kong, the region and globally through the 

hiring of contractors for projects (ranging from rail infrastructure construction to 

station cleaning), the purchase of supplies and energy and our involvement in 

joint property development ventures. Beyond this, MTR’s services, namely the 

efficient movement of people and the provision of residential, retail and office 

space, play an important role in the Hong Kong economy. In addition, the 

Octopus Smartcard pioneered and majority owned by MTR, provides 

electronic payment of fares for transport and other services in Hong Kong. 

The service allows more efficient transactions and reduces the need for cash 

handling. 

7.5 ROLE IN PROMOTING HONG KONG AS AN INTERNATIONAL FINANCIAL CENTRE 

MTR’s partial privatisation in October 2000 and subsequent inclusion in the 

Hang Seng Index (which represents Hong Kong’s 33 blue chip companies), 

MSCI and FTSE Index series has brought additional quality and diversity to 

Hong Kong’s equity capital market. As of 31 December 2003, MTR’s market 

capitalisation was HK$62,935 million and MTR was ranked Number 15 in the 

Hong Kong Stock Exchange. Furthermore, MTR stocks outperformed the 

Hang Seng Index 2003. Our ongoing borrowing needs for our capital 

expenditure programme were met by using a number of cost effective 

transactions involving different financial instruments and markets. However, 

we managed our debt portfolio prudently in accordance with our Preferred 

Financing Model which diversifies risk through different specifications. MTR 

continues to be active in raising corporate governance and transparency 

standards in Hong Kong and more widely in Asia through our excellent 

relations with investors. 

We were pleased that our considerable efforts in the field of corporate social 

responsibility and sustainability were recognized by both the Dow Jones 

Sustainability world Index (DJSI World) and the FTSE4Good Global Index in 

2003, becoming one of the few companies from Hong Kong to meet the 

globally recognized standards required for inclusion in these indices. 

MTR won a “Silver Award” for our 2002 Annual Report in the General 

Category in the 2003 Best Annual Reports Competition organised by the Hong 

Kong Management Association. This marked the fifteenth consecutive year 

since 1988 that MTR has received such recognition. The report also won the 

Bronze Award in the Overall Annual Report Category amongst transport 

companies at the International Academy Awards of Annual Reports (ARC) 

Awards in New York organized by the International Academy of 

Communications Arts and Sciences. 


58

7.6 MEASURES OF MTR’S ECONOMIC CONTRIBUTION 

The Global Reporting Initiative, which provides international best practice on 

corporate sustainability reporting, has proposed a set of core economic 

indicators. These together with additional MTR specific data provide an 

indication of MTR’s economic contribution (Table 7.3). 

Table 7.3 Economic Contribution (2001-2003) 

2003 2002 2001 

Financial Performance 

Turnover (HK$ million) 7,594 7,686 7,592 

Profit for the year attributable to 

shareholders (HK$ million) 

4,450 3,579 4,284 

Return on Shareholder’s Fund 

Interaction with Hong Kong, Asian & 

Global Economics 

8.0% 6.7%** 8.2% 

Number of Staff 6,629 6,891 7,231 

Staff costs & related expenses (HK$ 

million) 

1,643 1,579 1,641 

Energy & Utilities (HK$ million) 546 502 501 

Repairs & Maintenance (HK$ million) 477 435 437 

Stores & Spares Consumed (HK$ 

million) 

128 121 119 

Railway Capital Expenditure (HK$ 

million) 

2,582 5,196 6,657 

Total number of passengers (MTR & 

AEL) 

777 million 786 million 767 million 

Share of franchised public transport in 

HK 

24.3 23.5% 23.5% 

Interest payments on borrowings 

(HK$ million) 

1,551 1,153 896 

Dividend Payment (HK$ million) 2,215 2,161 2,118 

Taxes paid (HK$ million) 4 1 Nil 

Subsidies received (HK$ million) 675 219* Nil 

* Pursuant to the financing arrangement under the Penny’s Bay Rail Link Project Agreement entered into 

between the MTR Group and the Government, interim cash dividend declared and payable to the 

Government during the year had been waived. 

** Restated to include retrospective adjustments on deferred income tax provided in accordance with a 

revised accounting standard. 


59

8 SUSTAINABILILTY TARGETS 2004 

8.1 CORPORATE SUSTAINABILITY TARGETS 

Target 

Prepare a Corporate Social Responsibility Policy and communicate the policy to all 

stakeholders. 

Review vision, mission, core values and implement changes if any. 

Outline how sustainability has been taken into account in international operations and under 

merged company scenario. 

Continue implementing assurance in governing sustainability issues. 

Review position on Corporate Social Responsibility. 

Review Code of Conduct and implement recommendations. 

Complete audit of Code of Conduct and legal obligations and implementation 

recommendations. 

Maintain membership with DJSI, FTSE4Good & WEF. 

Complete participation with Accountability on impacts reporting. 

Preparing a Guidebook to the Code of Conduct which will, among other items, refer to sexual 

orientation, disability discrimination and family status. 

Maintain Sustainability Advisory Board (Cable Car Project). 

Develop a climate change strategy. 

Further develop sustainability accounting to include Capital and Revenue investments. 

8.2 SOCIAL RESPONSIBILITY TARGETS 

Target 

Maintain open staff communication and consultation particularly with regards to the progress of 

the possible merger. 

Maintain the same level of community involvement. 

Follow-up on the 2003 Staff Attitude Survey results. 

Provide support and input for the corporation’s proposal on the possible merger. 

Revise the Code of Conduct and implementation of resulting changes. 


60

8.3 OPERATIONS DIVISION (ISO14001 TARGETS) 

Generated from Operations 

Division 

Reduce the Air Pollution 


Division 

Reduce the Water Pollution 


Division 

Reduce the Land 

Contamination Generated from 

Operations Division 

Reduce Waste Disposal from 


Reduce Resources 

Consumption 

- Zero complaint leading to abatement notice or prosecution 

(2003 Baseline: Zero complaint leading to abatement notice 

or prosecution, 100% compliance with NCO) 

- 95% of self monitoring noise samples within NCO criteria 

(The scope is enlarged that train noise, construction noise 

permit and equipment noise are included. And the results 

will be reported in Balanced Score Card) 

- Zero complaints on exhausts from diesel locos (2003 

Baseline: 0) 

- Zero complaints about external air quality with none leading 

to abatement notice/prosecution (2003 Baseline: 0 

complaints and none leading to abatement notice/ 

prosecution) 

- Replace all CFC refrigerant (R12) chillers with non CFC 

refrigerant chillers by 2015 

- Meet existing MTR design criteria for Air Quality for 

operating railway and LAR transport interchanges 

- 100% compliance with WPCO on the reports submitted to 

EPD (2003 Baseline:100%) 

- 97% of first round self monitoring comply with the discharge 

limits stipulated in the effluent discharge licenses 

(Excluding pH limit, which is now under the negotiation with 

EPD) (2003 Baseline: 97%) 

- Implement land contamination reduction plan by 2003 

- Maintain or better than the 2003 waste paper recycling 

quantity (2003 Baseline: 449235 Kg ) 

- Maintain or better than the 2003 year waste metal recycling 

quantity (2003 Baseline: 1204 ton) 

- Maintain or better than the 2003 waste oil recycling quantity 

(2003 Baseline: 100%) 

- Meeting Energy Consumption Budget 798915 and 

794551MWh for 04 and 05 respectively (Budget for 2003: 

821730 MWh) 

- Maintain the Hazardous Chemical Consumption as 2003 

- Maintain the Water budgeted Consumption at the top 2 

departments in Operations Division 

- Maintain or better than the budgeted Paper Consumption 

on the top 5 Departments on largest paper consumption in 



61

8.4 PROJECT DIVISION (ISO14001 TARGETS) 

8.4.1 PBL and TST 

Objectives Targets 

Noise, Air & Water 

Improve Project 

Division’s contractor 

compliance with noise, 

air and water 

environmental 

regulations. 

Waste 

Minimize waste 

generated and waste 

sent to landfill during 

construction projects 

8.4.2 Tung Chung Cable Car Project 

Full Compliance with all Environmental Permit Conditions. 

- TST contractors to achieve 100% compliance with noise, 

air and water regulations (Baseline: Non-compliances for 

similar TKE contract – 6 Noise, 1 Air, 2 Water) 

- PBL contractors to achieve 100% compliance with noise, 

air and water regulations (Baseline: Non-compliances for 

similar TKE contract – 3 Noise, 4 Air, 5 Water) 

- Concrete wastage to be below 7% for TST and 10% for 

PBL (Baseline: MTR contractor currently achieves

8.5 PROPERTY MANAGEMENT DIVISION (ISO14001 TARGETS) 

8.5.1 Kowloon Properties 

Issue Target 

Comply with Hong 

Kong’s Legislative 

requirements and 

international best 

practice 

Resource Use Nil 

- 100% compliance with air pollution, noise, water pollution 

control ordinances for operation, maintenance and 

renovation works. 

- Full implementation of noise pollution control policy and 

management system. 

- Carrying out environmental assessment and justification 

before procurement of materials/equipment and 

implementation of works. 

- Monitoring of tenant fit-out works and operation for 

compliance with statutory requirements. 

- Regular cleaning of fresh water tank i.e. 4 times per year. 

- Conducting positive measure to prevent existence of 

legionnaires disease at Telford Plaza and Luk Yeung 

Galleria. 

- Construction of the noise barrier at Telford Gardens refuse 

collection point to reduce the sound level produced during 

refuse collection. 

Waste Minimization - Use zero ozone depletion potential refrigerant for chiller 

plant repairing works. 

- Re-use the disposed construction materials (e.g. Hoarding 

board, shopfront glass panel, glass door etc.) for renovation 

work and spare part for future maintenance use. 

- Continue the replacement of C.I. S&W drainage pipe with 

more durable material e.g. UPVC pipes at Luk Yeung Sun 

Chuen and Telford Gardens. 

Education & 

Dissemination 

8.5.2 Hong Kong Properties 


Waste recovery (plastic bottles, aluminium cans and paper) in 

residential estates. 

Resources Use Internally benchmark energy and water consumption of MTR managed 

properties and develop quantitative targets and action plan. 

Waste Minimisation Full implementation of noise pollution control policy and management 

system. 

Use zero ozone depletion potential refrigerant for chiller plant repairing 

works. 

Re-use the disposed construction materials (e.g. Hoarding board, 

shopfront glass panel, glass door etc.) for renovation work and spare 

part for future maintenance use. 

Continue the replacement of fresh water supply G.I. downfeed pipes 

and soil and waste C.I. drainage pipe with more durable material e.g. 

copper pipes and UPVC pipes. 

Internally benchmark waste generation of MTR managed properties and 

develop quantitative targets and action plan. 

Education & 

Dissemination 

Waste recovery (plastic bottles, aluminium cans and paper) in 


Continuously promote environmental best practice by estate managers. 


63


Comply with Hong 

Kong's Legislative 

Requirements and 

International Best 

Practice 

8.5.3 LAR Properties 

100% compliance with air pollution, noise, water pollution control 

ordinances for operation, maintenance and renovation works. 

Monitoring of tenant fit-out works and operation for compliance with 

statutory requirements. 

Conduct positive measure to prevent existence of legionnaires disease 

at MTR managed properties. 

Issue Targets 

Energy - Replacement of Tungsten filament 

light bulbs by compact fluorescent 

tubes for energy saving and 

reduction in heat generation in all 

newly handed over LAR properties 

which include Sorrento (T1, T2), 

Harbourside, Seaview Crescent (T5), 

Coastal Skyline (T2, T5, Clubhouse, 

Carpark) (T = Tower) 

- Reduction of unnecessary lighting for 

energy saving in all newly handed 

over LAR properties. 

- To install “Voltage Reduction 

System” on lighting for energy saving 

in Sorrento (T3, T5, T6), the 

Waterfront (T1, T2, T3, T6, T7), 

Seaview Crescent. 

- Reduction of energy consumption by 

setting higher room temperatures for 

air-conditioned spaces in Club 

House. 

- Reduction of energy consumption by 

setting a higher chilled water supply 

temperature during off-peak 

seasons. 

- Investigation of the use of electronic 

ballast for fluorescent lights. 

Regulatory Compliance Full implementation of noise pollution control 

policy and management system. 

Ozone Depleting Substances Use of zero ozone depletion potential and high 

efficiency refrigerants for chillier plant repair or 

replacement works. 

Waste Recycling - Re-use of disposed construction 

materials (e.g. Hoarding board, 

shopfront glass panel, glass door 

etc.) for renovation works and spare 

parts for future maintenance use. 

- Waste recovery (plastic bottles, 

aluminium cans and paper) in 


External Education and Training Continue to encourage contractors to set up 

procedures to manage environmental complaints 

form both internal and external parties. 

Campaigns and related activities Continuously promote environmental best 

practice by estate managers. 


64

Issue Targets 

Regulator Compliance - 100% compliance with air, noise and 

water pollution control ordinances for 

operation, maintenance and 

renovation works. 

- Monitoring of tenant fit-out works and 

operation for compliance with 

statutory requirements. 

8.5.4 Two International Finance Centre 

Objectives Target 

Compliance with air, noise and water pollution control 

ordinances for operation, and maintenance of the building 

services systems and the fit-out works of tenant floors of 

2IFC. 

Fulfill the requirements to obtain the certificate of Energy 

Efficiency Registration Scheme for Buildings 

Fulfill the requirements and obtain the certificate of Fresh 

Water Plumbing Quality Maintenance Recognition Scheme 

Diesel/petrol consumption by road fleet/motor pool. 2IFC has 

a goods van and a petrol car. The usage of these vehicles is 

strictly control by the management of 2IFC. 

8.6 PROPERTY DEVELOPMENT DIVISION (ISO14001 TARGETS) 


Internal Education & 

Training 

External Education & 

Training 

Environment Impact 

Assessment 

Routine control and 

monitoring 

Mid of 2004 

3 rd quarter of 2004 

Routine control and 

monitoring 

- Encourage staff to attend training programmes on environmental 

matters and concerns. 

- Keep staff abreast of latest technology which are environmental 

friendly. 

- As appropriate, conduct further study trips to acquire information 

on the latest building design and construction technology. 

- As applicable, undertake EIAs for new development projects and 

fully comply with the requirements of the issued Environmental 

Permits. 

Regulatory Compliance - Comply with air, noise and water pollution control ordinances for 

new property developments. 

Property Design - Within MTR’s sphere of influence, encourage developers to adopt 

Environment Management Systems. 

- Comply/ implement the requirements of the Corporate EMS as 

applicable to the Property. 

- Within MTR’s sphere of influence, encourage developers to 

incorporate Green and Innovative Buildings Practice Notes into the 

design of new developments. 

- Adopt energy saving fittings and electronic ballasts in new 

buildings. 

- Adopt a variable speed pumping system or direct feed system for 

potable water supply system for new shopping centres. 


65


Property Construction - Within MTR’s sphere of influence, encourage contractors to use off 

site pre-fabricated modular construction. 

8.7 FINANCE DIVISION (ISO14001 TARGETS) 

Issue Target 

Logistic & Material 

Management 

Sustainability 

accounting 

- Within MTR’s sphere of influence, encourage contractors to use 

dry wall construction. 

- Within MTR’s sphere of influence, encourage adoption of metal 

formwork instead of timber formwork for building construction in 

new development sites. 

- Within MTR’s sphere of influence, encourage the use of tropical 

hardwood from managed sources only. 

- Ensure 100% compliance with the EPD regulations on Chemical 

Waste disposal and handling. 

- Ensure 100% use of pollution-free mechanical handling 

equipment. 

- Ensure 100% use of lead free gasoline road vehicles. 

- Ensure 100% fitting of particulate removal device to pre-euro 

diesel road vehicles. 

- Develop a spreadsheet approach to estimate sustainability 

spending. 

Company Reporting - Within the boundaries of the relevant legislation governing 

Company Reporting, reduce the printing and distribution of 

Company Reports and circulars. 

General, Office & 

System Management 

Environmental 

Awareness 

- Continue to purchase office equipment and stock items using 

green procurement guidelines 

- Continue to exercise the recycling program of PC equipment and 

to re-use PC equipment by 50% 

- Continue the Finance Division environmental working group to 

manage and monitor the progress of environmental targets on a 

regular basis. 


66

8.8 LEGAL AND PROCUREMENT DIVISION (ISO14001 TARGETS) 


Resource Use Green Procurement 

- Enhance the environmental assessment criteria for the 

prequalification of contractors and suppliers in terms of 

ISO 14001 requirements. 

- Identify 3 or more products/technologies which can be 

introduced each year to the Corporation. 

- Introduce the new General Specification which 

incorporates updated provisions on environmental 

requirements. 

- Seek to identify alternative products which are more 

energy efficient/ environmentally friendly. 

Paper Reduction 

- Promote website for all prequalification application. 

- Introduce ‘e’-Tendering system to all international 

contracts (2nd Quarter 04). 

- Review and minimise the number of recipients of copies of 

Contractors/Purchase Orders documents. 

- Promote the use of the LAN for MTR publications. 

Waste Minimisation Disposal Procedures 

- Continue to implement a policy to segregate scrap to 

distinguish “re-cycle”, “non-re-cycle” components and 

maximise sales benefits. 

- Promote refurbishment to extend the life of existing 

equipment. Supplier to dispose of old parts. 

Environmental 

Education and Training 

Internal Education & Training 

- As appropriate, support other Divisions to educate 

personnel in the use of the catalogue system, P. Card and 

‘E’-tendering. 

External Education & Training 

- Assist Corporation in promoting the environmental benefits 

of rail. 

Environmental Impact - Continue to facilitate the award of EIA contracts for all 

Assessment 

Divisions. 

Environmental 

- Implement the Divisional Environmental Management 

Management Systems 

System established in 2002 and support the Corporate 

(EMS) 

EMS. 

Audit and Reporting - Expand third - party (supplier/contractor) audits to make 

suppliers aware of MTR policy on environmental priorities. 

8.9 HUMAN RESOURCES DIVISION (ISO14001 TARGETS) 

Targets 

Maintain the number of environmental messages displayed on InfoPanels. 

Organise visits for external parties upon request to share MTR’s experience in environmental 

protection with other organisations or companies. 

Disseminate information on new environmental policies. 


67

Targets 

Organise and support activities, campaigns and related initiatives to promote clean and green 

transport mode. 

Organise and support activities to promote the environmental protection awareness among 

internal MTR staff. 

Undertake Indoor Air Quality monitoring in MTR Tower. Compare results with established 

trends and verify compliance with WHO standards. 

Maintain / increase printer cartridge recycling rate. 

Continue to reduce paper consumption in MTR Tower. 

Reduce levels of electricity consumption in MTR Tower. 

Maintain / reduce fuel consumption by road vehicles. 

8.10 HEADQUARTERS DIVISION (ISO14001 TARGETS) 

Targets 

Organise and support activities, campaigns and related initiatives to promote clean and green 

transport mode, as well as sustainability development. 

Organise and support activities to promote the environmental protection awareness among 

internal MTR staff. 

Organise and support community or external activities to enhance the green image of the 

Corporation. 

Maintain good stakeholders’ relationship through media, publicity and customer relations 

activities. 


68

9 ENVIRONMENTAL LEGISLATION 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

Air Pollution Control Ordinance (Cap 311); 

Animals and Plants (Protection of Endangered Species) Ordinance (Cap 

187); 

Country Parks Ordinance (Cap 208); 

Dumping at Sea Ordinance (Cap 466); 

Environmental Impact Assessment Ordinance (Cap 499); 

Fisheries Protection Ordinance (Cap 171); 

Forests and Countryside Ordinance (Cap 96); 

Marine Parks Ordinance (Cap 476); 

Noise Control Ordinance (Cap. 400); 

Oil (Conservation and Control) Ordinance (Cap 264); 

Oil Pollution (Land Use and Requisition) Ordinance (Cap 247); 

Ozone Layer Protection Ordinance (Cap 403); 

Plant Varieties Protection Ordinance (Cap 490); 

Protection of the Harbour Ordinance (Cap 531); 

Public Cleansing and Prevention of Nuisances Regulation (Cap 132); 

Technical Memorandum on Noise from Construction Work in Designated 

Areas (DA-TM); Technical Memorandum on Noise from Construction Work 

other than Percussive Piling (GW-TM); 

Technical Memorandum on Noise from Percussive Piling (PP-TM); 

Waste Disposal (Chemical Wastes (General)) Regulation (Cap 354); 

Waste Disposal Ordinance (Cap 354); 

Water Pollution Control Ordinance (Cap 358); 

Wild Animals Protection Ordinance (Cap 170). 


69

10 ASSURANCE STATEMENT 

To the Directors of MTR 

Introduction 

MTR Corporation (“MTR”) has issued a Sustainability Report 2003 (“the 

Report”) covering its approach to corporate sustainability and detailing the 

social responsibility, environment and economic contributions it has made 

during 2003. We have been asked to consider selected statements made 

and data reported in the Report. The objectives of our assurance, the scope of 

our work and our findings are detailed below. 

The Directors are solely responsible for the contents of the Report, the 

reliability of the information presented and its maintenance and integrity on the 

internet. Our responsibility is only to the management of the company and is 

to report on the statements and data indicated based on our assurance work 

and on the terms agreed with management for this purpose. The work 

described below has been carried out solely for the Directors and was not 

planned in contemplation of any third party relying on it. Accordingly, 

PricewaterhouseCoopers will accept no responsibility for the use or 

interpretation of the results of its work by any third parties. 

Our objectives 

The overall objectives of our procedures were to: 

� 

� 

Assess whether the selected statements and data in the Report are 

supported by underlying evidence; 

Read Sections 5, 6 and 7 of the Report to assess the consistency of the 

information presented with the findings of our work. 

Assurance work performed 

Our procedures were limited to: 

• Interviews with management and personnel in the sustainable 

development, operations, property, project and human resources divisions, 

involved in providing information for inclusion in the Report in relation to 

the selected statements and data; 

• Examination on a test basis of documentary evidence relating to the 

selected statements and data on which we report; 

• Review of the relevant sections of the Report relating to the selected 

statements and data to check for consistency with the findings of our work. 

Basis of our work 

There are no generally accepted international standards for the preparation or 

assurance of sustainability reports. We have therefore based our approach on 


70

emerging best practice and the underlying principles within international 

standards for assurance engagements. We planned and performed our work 

to obtain limited assurance on the information reviewed. We believe our work 

provides a reasonable basis for our findings. In preparing our conclusion, we 

have not conducted an audit as defined in auditing standards, and we do not 

express an audit opinion on any data in the Report. 

Considerations and Limitations 

It is important to read the statements and data in the context of the reporting 

policies and limitations in Section 11. Environment and social responsibility 

data is subject to many more inherent limitations than financial data given both 

their nature and the methods used for data determination, calculation or 

estimation. 

We have not provided assurance over all contents of this report, nor have we 

undertaken work to confirm that all relevant issues are included. 

We have not carried out any work on data reported in respect of targets or 

future projections. We have not provided assurance over previous years’ data. 

We have not performed work on the maintenance and integrity of information 

in the Report published on the MTR website. 

It is also important that, in order to obtain a thorough understanding of the 

financial results and financial position of MTR, the reader should consult the 

MTRC Annual Report for the year ended 31December 2003. 

Conclusion 

We have reported to management that: 

� 

� 

based on the work completed, the statements and data in the paragraphs 

in the Report marked with the symbol � are supported by underlying 

evidence. Nothing has come to our attention to indicate that the 

statements require any material adjustment or that the data is materially 

misstated; 

the information presented in Sections 5, 6 and 7 relating to the selected 

statements and data are consistent with the findings of our work. 

PricewaterhouseCoopers, Hong Kong, May 2004 


71

11 BASIS OF REPORTING 

The financial performance and economic contribution data includes the 

accounts of MTR and all its subsidiaries except for a non-controlled subsidiary 

(see note to the accounts 1D in MTR Annual Report 2003) and have been 

prepared using the accounting policies used in MTR Corporation’s Financial 

Statements. For more information, refer to www.mtr.com.hk 

The Environmental and Social Responsibility data is aggregated from various 

divisions within MTR (Operations, Projects, Property, Human Resource). The 

source of data is specified accordingly throughout the report. 

Targets and projections 

The corporate targets are set through discussions with senior executives and 

directors. Divisional targets are set through discussions within Divisions and 

are based on the principle of continual improvement. Environmental targets 

for Operations and Project Divisions are set in accordance with the ISO14001 

certified Environmental Management Systems. 

Limitations 

The measurement, calculation and estimation of some of the Environmental 

and Social responsibility data carry some limitations that cause a degree of 

uncertainty in relation to the data reported. 

Limitations include: 

� Different interpretation of reporting guidelines – eg: for greenhouse 

gases. 

� Measuring, calculating or estimating the data – eg: methods, 

accuracy and sampling for environmental measuring equipment. 


72

ANNEX A GRI CHECKLIST 


73

ANNEX A GRI CHECKLIST 

GRI Reporting Elements Links to Report Sections 

1 Vision and Strategy 

1.1 Statement of the Statement of the 

organisation's vision and strategy regarding 

its contribution to sustainable development. 

1.2 Statement from the CEO (or equivalent 

senior manager) describing key elements 

of the report. 

Section 3 – About MTR 

Section 4 – Corporate Sustainability 

Section 1 – Chief Executive’s Statement 

Section 2 – Introduction 

2 Profile 

Organisational Profile 

2.1 Name of reporting organisation. Section 2 – Introduction 


2.2 Major products and/or services, including 

brands if appropriate. 

2.3 Operational structure of the organisation. 

2.4 Description of major divisions, operating 

companies, subsidiaries, and joint 

ventures. 

2.5 Countries in which the organisation's 

operations are located. 

2.6 Nature of ownership; legal form. 

2.7 Nature of markets served. 

2.8 Scale of the reporting organisation: 

- Number of employees 

- Products/services offered 

- Net sales 

- Total capitalization/total asset. 

2.9 List of stakeholders, key attributes of each, 

and relationship to the reporting 

organisation. 

Report Scope 

2.10 Contact person(s) for the report, including 

email and web addresses. 

2.11 Reporting period for information provided. 

2.12 Date of most recent previous report. 

2.13 Boundaries of the report and any specific 

limitations on the scope. 





Section 3.4 – Corporate Governance 


Figure 5.3 – MTR Staff Numbers (2000-2003) 


Table 7.1 – Summary of MTR’s Financial 

Performance (2002-2003) 



Section 4.3 – Our Mission in Achieving the 

Vision Today 

Section 5.3 – Developing and Retaining 

Motivated and Skilled Staff 

Section 5.4 – Ensuring the Health and Safety 

of Passengers, Staff and 

Contractors 




Section 11 – Basis of Reporting 


74


2.14 Significant changes in size, structure, Section 3 – About MTR 

ownership, or products/services that have 

occurred since the previous report. 

2.15 Basis for reporting on joint ventures, 

partially owned subsidiaries, leased 

facilities, outsourced operations, and 

other situations that can significantly 

affect comparability from period to period. 

2.16 Explanation of the nature and effect of 

any re-statements of information provided 

in earlier reports, and the reasons for 

such re-statement. 

Report Profile 

2.17 Decisions not to apply GRI principles or 

protocols in the preparation of this report. 

2.18 Criteria/definitions used in any accounting 

for economic, environmental, and social 

costs and benefits. 

2.19 Significant changes from previous years 

in the measurement methods applied to 

key economic, environmental, and social 

information. 

2.20 Policies and internal practices to enhance 

and provide assurance about the 

accuracy, completeness, and reliability 

that can be placed on the sustainability 

report. 

2.21 Policy and current practice with regard to 

providing independent assurance for the 

full report. 

2.22 Means by which report users can obtain 

additional information. 

3 Governance Structure and Management 

Systems 

Structure and Governance 

3.1 Governance structure of the organisation, 

including major committees under the 

board of directors that are responsible for 

setting strategy and for oversight of the 

organisation. 

3.2 Percentage of the board of directors that 

are independent, non-executive directors. 

3.3 Process for determining the expertise 

board members need to guide the strategic 

direction of the organisation, including 

issues related to environmental and social 

risks and opportunities. 



Annex A – GRI Checklist 

Section 4.7 – Sustainability Accounting 

No significant changes from previous years. 

Box 4.1 – Developing our reporting and 

assurance 

Section 10 – Assurance Statement 


assurance 



Section 4.8 – Corporate Sustainability 

Coordinating Committee 

Section 3.4.1 – The Board 



75


3.4 Board-level processes for overseeing the 

organisation's identification and 

management of economic, environmental, 

and social risks and opportunities. 

3.5 Linkage between executive compensation 

and achievement of the organisation's 

financial and non-financial goals. 

3.6 Organisational structure and key 

individuals responsible for oversight, 

implementation, and audit of economic, 

environmental, social and related policies. 

3.7 Mission and values statements, internally 

developed codes of conduct or principles, 

and policies relevant to economic, 

environmental, and social performance and 

the status of implementation. 

3.8 Mechanisms for shareholders to provide 

recommendations or direction to the board 

of directors. 

Stakeholder Engagement 

3.9 Basis for identification and selection of 

major stakeholders 

3.10 Approaches to stakeholder consultation 

reported in terms of frequency of 

consultations by type and stakeholder 

group. 

3.11 Type of information generated by 

stakeholder consultations. 

3.12 Use of information resulting from 

stakeholder engagements. 

Overarching Policies and Management 

Systems 

3.13 Explanation of whether and how the 

precautionary approach or principle is 

addressed by the organisation. 

3.14 Externally developed, voluntary 

economic, environmental, and social 

charters, sets of principles, or other 

initiatives to which the organisation 

subscribes or which it endorses. 

3.15 Principal memberships in industry and 

business associations, and/or 

national/international advocacy 

organisations. 



Not included in this report. 

Section 3.4.3 – Other Executive Committees 



Box 4.4 – MTR Corporate Sustainability Policy 

Section 5.3.2 – Code of Conduct 


Section 5 – Social Responsibility 



Section 5.3.4 – Staff Attitude Survey 

Case Study: Stakeholder Engagement in Tung 

Chung Cable Car Project 

Case Study: Public Consultation during the 

West Island Line and South Island Line 

Projects 


Section 4.5 – Risk Management 


assurance 

Section 6.3.1 – Green House Gas Inventory 



76


3.16 Policies and/or systems for managing 

upstream and downstream impacts. 

3.17 Approach to managing indirect economic, 

environmental and social impacts 

resulting from its impacts. 

3.18 Major decisions during the reporting 

period regarding the location of, or 

changes in, operations. 

3.19 Programmes and procedures pertaining 

to economic, environmental, and social 

performance including: 

- Priority and target setting 

- Major programmes to improve 

performance 

- Internal communication and training 

- Performance monitoring 

- Internal and external auditing 

- Senior management review. 

3.20 Status of certification pertaining to 

economic, environmental, and social 

management systems. 

4 GRI Content Index 

4.1 A table identifying location of each element 

of the GRI report content, by section and 

indicator. 

5 Performance Indicators 

Economic Performance Indicators 



Contractors 

Section 6.2.1 – Environmental Management 

System 

Section 6.3 – Long Term Energy Supply 

Without Renewables 

Section 6.4 - Management of Assets 

Section 7.4 – Interaction with Hong Kong, 

Asian and Global Economies 

Section 7.5 – Role in Promoting Hong Kong as 

an International Finance Centre 

Section 7.6 – Measures of MTR’s Economic 

Contribution 


Section 4.5 – Risk Management 

Section 6.2.2 – Environmental Performance 

Table 6.3 – Progress against 2004 Targets 

Section 7.1 – Financial Performance 

Section 8 – Sustainability Targets for 2004 

Section 5.3.3 – Staff Communication and 

Consultation 


Section 6.2.1 – Environmental Management 

System 


assurance 

Annex A – GRI Checklist 

EC1 Net sales. Table 7.1 – Summary of MTR’s Financial 


EC2 Geographic breakdown of markets. Section 3 – About MTR 

EC3 Cost of all goods, materials, and services 

purchased. 

EC4 Percentage of contracts that were paid in 

accordance with agreed terms, excluding 

agreed penalty arrangements. 

EC5 Total payroll and benefits broken down by 

country or region. 

Table 4.2 – Costs of Managing Priority Social 

Responsibility and Environmental 


Table 7.4 – Economic Contribution (2001- 

2003) 

Section 6.2.6 

Figure 5.4 – MTR Staff Productivity (2000- 

2003) 


77


EC6 Distributions to providers of capital broken 

down by interest on debt and borrowings, 

and dividends on all classes or shares, 

with any arrears of preferred dividends to 

be disclosed. 

EC7 Increase/decrease in retained earnings at 

end of period. 

EC8 Total sum of all taxes paid broken down 

by country. 

EC9 Subsidies received broken down by 

country or region 

EC10 Donations to community, civil society, 

and other groups broken down in terms of 

cash and in-kind donations per type of 

group. 

Environmental Performance Indicators 




2003) 




2003) 


2003) 

Section 5.6 – Community Initiatives 

EN1 Material use other than water, by type Section 8 Sustainability Targets for 2004 

EN2 Percentage of materials used that are 

wastes from sources external to the 

reporting organisation. 

EN3 Direct energy use segmented by primary 

source. 


Table 6.2 – Key Environment Data 2001-2003 

EN4 Indirect energy use. Not included in this report. 

EN5 Total water use. Table 6.2 – Key Environment Data 2001-2003 

EN6 Location and size of land owned, leased, 

or managed in biodiversity rich habitats. 


EN7 Description of the major impacts on Not included in this report. 

biodiversity associated with activities 

and/or products and services in 

terrestrial, fresh-water, and marine 

environments. 

EN8 Greenhouse gas emissions. Table 6.2 – Key Environment Data 2001-2003 

EN9 Use and emissions of ozone depleting 

substances. 

EN10 NOx, SOx, and other significant air 

emissions by type. 

EN11 Total amount of waste by type and 

destination. 



Table 6.2 – Key Environment Data 2001-2003 

EN12 Significant discharges to water by type. Section 8 Sustainability Targets for 2004 


78


EN13 Significant spills of chemicals, oils, and Section 8 Sustainability Targets for 2004 

fuels in terms of total number and total 

volume. 

EN14 Significant environmental impacts of 

principal products. 

EN15 Percentage of the weight of products 

sold that is reclaimable at the end of the 

products' useful life and percentage that 

is actually reclaimed. 

EN16 Incidents of and fines for noncompliance 

with all applicable 

international declarations/conventions 

/treaties, and national, sub national, 

regional and local regulations 

associated with environmental issues. 

Social Performance Indicators 

Labour Practices and Decent Work 

LA1 Breakdown of workforce, where possible, 

by region/country, status, employment 

type, and by employment contract. Also 

identify workforce retained in conjunction 

with other employers, segmented by 

region/country. 

LA2 Net employment creation and average 

turnover segmented by region/country. 

LA3 Percentage of employees represented by 

independent trade union organisations or 

other bona fide employee representatives 

broken down geographically OR 

percentage of employees covered by 

collective bargaining agreements broken 

down by region/country. 

LA4 Policy and procedures involving 

information, consultation, and negotiation 

with employees over changes in the 

reporting organisation's operation. 

LA5 Practices on recording and notification of 

occupational accidents and diseases, and 

how they relate to the ILO Code of 

Practice on Recording and Notification of 

Occupational Accidents and Diseases. 

LA6 Description of formal joint health and 

safety committees comprising 

management and worker representatives 

and proportion of workforce covered by 

any such committees. 

Section 6.1 – Introduction 


Section 6.2 –Breaches of Statutory 

Environmental Requirements 





2003) 



Section 5.3.3 –Staff Communication and 

Consultation 




Contractors 

Section 3.4.3 – Other Executive Committees 


79


LA7 Standard injury, lost day, and absentee 

rates and number of work-related 

fatalities. 

LA8 Description of policies or programmes (for 

the workplace and beyond) on HIV/AIDS. 

LA9 Average hours of training per year per 

employee by category of employee. 

LA10 Description of equal opportunity policies 

or programmes, as well as monitoring 

systems to ensure compliance and 

results of monitoring. 

Equal opportunity policies may address 

workplace harassment and affirmative 

action relative to historical patterns of 

discrimination. 

LA11 Composition of senior management and 

corporate governance bodies, including 

female/male ratio and other indicators of 

diversity as culturally appropriate. 

Human Rights 

HR1 Description of policies, guidelines, 

corporate structure, and procedures to 

deal with all aspects of human rights 

relevant to operations, including 

monitoring mechanisms and results. 

State how policies relate to existing 

international standards such as the 

Universal Declaration and the 

Fundamental Human Rights Conventions 

of the ILO. 

HR2 Evidence of consideration of human rights 

impacts as part of investment and 

procurement decisions, including 

selection of suppliers/contractors. 

HR3 Description of policies and procedures to 

evaluate and address human rights 

performance within the supply chain and 

contractors, including monitoring systems 

and results of monitoring. "Human rights 

performance" refers to the aspects of 

human rights identified as reporting 

aspects in the GRI performance 

indicators. 

HR4 Description of global policy and 

procedures/programmes preventing all 

forms of discrimination in operations, 

including monitoring systems and results 

of monitoring. 

Figure 5.7– Fatality per Million Passengers 

Figure 5.8– Incidents per Million Journeys 

Carried (1993-2003) 

Figures 5.13-5.15 – Safety Data for Property 

Management Department 

Section 5.3.1 – Training and Development 


Section 5.3.5 – Equal Opportunities 


Section 5.3.6 – Human Rights 





80


HR5 Description of freedom of association Not included in this report. 

policy and extent to which this policy is 

universally applied independent of local 

laws, as well as description of 

procedures/programmes to address this 

issue. 

HR6 Description of policy excluding child 

labour as defined by the ILO Convention 

138 and extent to which this policy is 

visibly stated and applied, as well as 

description of procedures/programmes to 

address this issue, including monitoring 

systems and results of monitoring. 

HR7 Description of policy to prevent forced 

and compulsory labour and extent of 

which this policy is visibly stated and 

applied as well as description of 


issue, including monitoring systems and 

results of monitoring. 

Society 

SO1 Description of policies to manage impacts 

on communities in areas affected by 

activities, as well as description of 



results of monitoring. Include explanation 

of procedures for identifying and 

engaging in dialogue with community 

stakeholders. 

SO2 Description of the policy, 

procedures/management systems, and 

compliance mechanisms for organisation 

and employees addressing bribery and 

corruption. Include a description of how 

the organisation meets the requirements 

of the OECD Convention on Combating 

Bribery. 

SO3 Description of policy, 


compliance mechanisms for managing 

political lobbying and contributions. 

Product Responsibility 

PR1 Description of policy for preserving 

customer health and safety during use of 

products and services, and extent to 

which this policy is visibly stated and 

applied, as well as description of 



results of monitoring. Explain rationale for 

any use of multiple standards in 

marketing and sales of products. 



Case Study: Stakeholder Engagement in Tung 

Chung Cable Car Project 

Case Study: Public Consultation during the 

West Island Line and South 

Island Line Projects 





Contractors 


81


PR2 Description of policy, 



compliance mechanisms related to 

product information and labelling. 

PR3 Description of policy, 

procedures/management systems and 

compliance mechanisms for consumer 

privacy. Identify geographic areas 

covered by policy. 



82

CONTENTS 

1 CHIEF EXECUTIVE OFFICER’S MESSAGE 1 

2 INTRODUCTION 2 

3 ABOUT MTR 3 

3.1 OCTOPUS 5 

3.2 TRAXCOMM 5 

3.3 INTERNATIONAL BUSINESS 6 

3.4 CORPORATE GOVERNANCE 7 

4 CORPORATE SUSTAINABILITY 12 

4.1 INTRODUCTION 12 

4.2 MTR’S VISION 12 

4.3 OUR MISSION IN ACHIEVING THE VISION TODAY 12 

4.4 BUSINESS BENEFITS 13 

4.5 RISK MANAGEMENT 14 

4.6 LEADING THE WAY 18 

4.7 SUSTAINABILITY ACCOUNTING 20 

4.8 CORPORATE SUSTAINABILITY COORDINATING COMMITTEE (CSCC) 21 

5 SOCIAL RESPONSIBILITY 23 


5.2 MAINTAINING PASSENGER NUMBERS – DELIVERING OUR BEST 24 

5.3 DEVELOPING AND RETAINING MOTIVATED AND SKILLED STAFF 27 

5.4 ENSURING THE HEALTH AND SAFETY OF PASSENGERS, STAFF AND 

CONTRACTORS 33 

5.5 ENGAGING OTHER STAKEHOLDERS 41 

5.6 COMMUNITY INITIATIVES 44 

6 ENVIRONMENT 45 


6.2 BREACHES OF STATUTORY ENVIRONMENTAL REQUIREMENTS 45 

6.3 LONG TERM ENERGY SUPPLY WITHOUT RENEWABLES 51 

6.4 MANAGEMENT OF ASSETS 54 

7 ECONOMIC 56 


7.2 FINANCIAL PERFORMANCE 56 

7.3 FARES 57 

7.4 INTERACTION WITH HONG KONG, ASIAN AND GLOBAL ECONOMIES 58 

7.5 ROLE IN PROMOTING HONG KONG AS AN INTERNATIONAL FINANCIAL CENTRE 58 

7.6 MEASURES OF MTR’S ECONOMIC CONTRIBUTION 59

8 SUSTAINABILILTY TARGETS 2004 60 

8.1 CORPORATE SUSTAINABILITY TARGETS 60 

8.2 SOCIAL RESPONSIBILITY TARGETS 60 

8.3 OPERATIONS DIVISION (ISO14001 TARGETS) 61 

8.4 PROJECT DIVISION (ISO14001 TARGETS) 62 

8.5 PROPERTY MANAGEMENT DIVISION (ISO14001 TARGETS) 63 

8.6 PROPERTY DEVELOPMENT DIVISION (ISO14001 TARGETS) 65 

8.7 FINANCE DIVISION (ISO14001 TARGETS) 66 

8.8 LEGAL AND PROCUREMENT DIVISION (ISO14001 TARGETS) 67 

8.9 HUMAN RESOURCES DIVISION (ISO14001 TARGETS) 67 

8.10 HEADQUARTERS DIVISION (ISO14001 TARGETS) 68 

9 ENVIRONMENTAL LEGISLATION 69 

10 ASSURANCE STATEMENT 70 

11 BASIS OF REPORTING 72 

ANNEX A GRI CHECKLIST

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