EVERY DAY - Origin Energy · Origin launches 11 Life Saving Rules, which aim to protect and prevent harm to our people. 14 November Origin responds to review of Renewable Energy Target,

Strategy Performance Growth

EVERY DAY Sustainability Report 2013

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A late night snack kept cold whileOrigin powers through the night.

Origin Energy Limited ABN 30 000 051 696 Origin Energy Limited ABN 30 000 051 696

ContentsOur year at a glance 02

Our Compass 04

Our performance 05

Managing Director’s message 06

Global trends 08

Our strategy 10

Where we operate 11

Engaging with stakeholders 12

Our approach to materiality 14

Energy developments 16

Delivering energy 29

Future energy solutions 36

Managing our business 38

Value distribution 44

Origin Foundation 45

Ratings & benchmarks 47

Glossary 48

07:01am

We ensure the power is there when millions of kettles are switched on every morning.

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EVERY DAY

Scope of report Origin has been reporting on our sustainability performance since 2001. This is a concise version of our 2013 Sustainability Report.

Origin’s online Sustainability Report expands on our performance, measured against both our Material Aspects and taking guidance from international frameworks such as the Global Reporting Initiative’s G4 Guidelines. It can be viewed at reports.originenergy.com.au

Unless otherwise stated, this document reports on performance of the activities and assets operated by Origin for the 12 months to 30 June 2013. This includes Australia Pacific LNG in which Origin has a 37.5 per cent shareholding and is Upstream operator. All monetary amounts are in Australian dollars.

Discovermore online

Origin Energy Sustainability Report 2013 01

Our year at a glance

20 JulyApproval provided for Australia Pacific LNG’s $200 million Social Impact Management Plan to maximise benefits and mitigate impacts on local communities.

30 JulyLandowners sign up to Working Together pilot program, allowing them to gain training and be paid to undertake basic infrastructure maintenance on their properties as part of the Australia Pacific LNG project.

23 August Origin reports 2012 financial year results, including Statutory Profit of $980 million and Underlying Profit of $893 million.

23 August The carrying value of our interests in Transform Solar and geothermal joint ventures with Geodynamics fully impaired as activities did not meet expectations for timely and commercial development of these technologies.

27 AugustOrigin launches first mass-market energy management solution in Australia, Origin Energy Manager, enabling customers to view energy usage and predict bills.

21 SeptemberWe publicly disclose three voluntary targets to improve gender diversity in our workforce in our Annual Report.

22 OctoberOrigin launches 11 Life Saving Rules, which aim to protect and prevent harm to our people.

14 NovemberOrigin responds to review of Renewable Energy Target, raising concerns about how the policy is working in practice and its cost to consumers and businesses.

16 NovemberNew Independent Non-executive Director Bruce Morgan appointed to the Origin Board.

4 DecemberCSIRO and partners announce they will research Australian CSG fugitive emissions to establish scientific monitoring and measurement.

7 DecemberAustralia Pacific LNG partners with rugby league legend Darren Lockyer and launches the ‘Every Day is Game Day’ campaign to promote safety.

21 DecemberThe Queensland Government releases its CSG water policy preferring the industry to reuse water for beneficial use.

2013 fi nancial year

02 Our year at a glance

09:40pm

Origin, powering your household continuously

through day and night.

22 JanuaryThe Condamine River first phase gas seeps investigation report is released by the Queensland Government confirming no risk to health or environment.

1 FebruaryDeregulation of electricity and gas prices takes effect in South Australia.

21 FebruaryAustralia Pacific LNG schedule and cost review concludes a 7 per cent increase in costs and Train 1 on track to deliver first LNG by mid 2015.

21 FebruaryOrigin reports interim results, including Statutory Profit of $524 million and Underlying Profit of $362 million.

21 February Origin announces a program to lower our cost base, including reducing employee numbers by 850 by the end of the 2013 calendar year.

21 MarchAustralia Pacific LNG and Horizon Housing open the first affordable housing development in Miles, Queensland.

15 AprilOrigin participates in National Energy Affordability Roundtable which delivers a report to energy ministers nationally.

1 MayOrigin seeks to better engage and inform consumers about energy with the launch of Energy Explorer and the Knowledge is Power campaign.

14 JuneThe real-time, hand-held Origin Energy Monitor is released allowing customers to view both energy usage and costs in seconds.

17 JuneThe first LNG storage tank roof is raised by Australia Pacific LNG on Curtis Island.

Our challenge is to deliver reliable, affordable and cleaner energy


Our Compass

Our PrinciplesOrigin’s Principles provide guidance for making the right decisions:

• We conduct ourselves and our business with due care and in accordance with relevant laws and regulations. We have an overriding duty to ensure the health and safety of our employees, and to minimise the health, safety and environmental impacts on our customers and the communities in which we operate.

• We will add value to the resources that come under our control.

• The value we create will be distributed to stakeholders recognising the need to ensure the sustainability of our business, and its impact on the environment and the communities in which we operate.

• We encourage diversity and expression of ideas and opinions but require alignment with the company’s Principles, Values and Commitments and the policies established to implement them.

• When faced with choices, we make decisions knowing they will be subject to scrutiny. We should be able to demonstrate the soundness of our decisions to all stakeholders.

Our ValuesOrigin’s Values describe good behaviour:

• Caring: We care about our impact on customers, colleagues, the community, environment and shareholders.

• Listening: We listen to the needs of others, knowing that an unfulfilled need creates the best opportunities.

• Learning: We constantly learn and implement new and better ways, sharing information and ideas effectively.

• Delivering: We deliver on the commitments made in all areas of performance.

Our CommitmentsOrigin’s Commitments define the outcomes that we strive to achieve for key stakeholders.

We commit to:

• Deliver market-leading performance for shareholders by identifying, developing, operating and growing value-creating businesses.

• Create value for our customers, by understanding their needs and delivering relevant and competitive energy solutions to meet those needs both today and into the future.

• Create a rewarding workplace for our people by valuing everyone’s contribution, encouraging personal development, recognising good performance and fostering equality of opportunity.

• Respect the rights and interests of the communities in which we operate, by listening to them, understanding and managing the environmental, economic and social impacts of our activities.

• Respect the rights and interests of our business partners, by working collaboratively to create valued and rewarding partnerships.

A guide to our decision making behaviours and actions

Our Purpose

We aspire always to lead.

We deliver today’s energy needs; and we search and innovate to create tomorrow’s energy solutions.

We honour our principles and values, and they are evident in all we do.

We live our commitments to our shareholders, to our customers, to our people, to our communities and to our business partners.

04 Our Compass

Our performance

Financial Performance

$378m $760m from $980m

Statutory Profit2013

15%

Underlying Profit 2013

Safety

6.7 TRIFR15%improvement in Total Recordable Injury Frequency Rate in 2013.

Managing our business

Greenhouse gas emissions

624,000 tCO2-e 23%

Increase in emissions from our LNG business unit, including Australia Pacific LNG construction activities.

Delivering Energy

62% 05%

improvement in customer satisfaction.

customer accounts across Australia

4.3 million

Customers

customers registered for

MY ACCOUNT182,000 +

Energy developments

Origin

National Electricity Market average

Emissions intensity (tCO2-e/MWh)

0.87

0.74

Emissions intensity of power generation

Australia Pacific LNG progress

45%Upstream and Downstream components complete.

Water

$27mspent on water injection trials to replenish underground aquifers.

People

6,000 + employees across Australia, New Zealand and the Pacific, plus several thousand contractors workingon our various energy developments.

Community

$1.7 Millionspent by Australia Pacific LNG on constructing homes in Miles, Queensland to improve access to housing.

spent on goods and services by the Australia Pacific LNG project, the majority of which has occurred in Australia.

Economic

$12.3 + billion

80%of wells required for Phase 1 of the Australia Pacific LNG project now covered by land access agreements at end of September 2013.

Landholders

204compensation agreements with landholders for CSG development signed in 2013.

Value distribution

$15.1bnan increase of $2bn on prior year.

Value distributed to stakeholders

Origin Foundation

in grants, matched giving by employees, and employee volunteering in the 2012 calendar year.

Philanthropy

$3.7m


managing director’s message

It has been evident that access to energy is a key contributor to the development of strong and prosperous economies. Today, access to a reliable supply of energy is considered a basic right in most developed countries, and it underpins our modern standard of living.The community at large has come to expect a reliable and competitively priced energy supply, and is increasingly expecting that this energy is produced and consumed on a more sustainable basis.

Origin produces and procures energy to supply to customers. In so doing, we often face complex choices as we try to meet the expectations of our stakeholders.

Each year, we use our Sustainability Report to explain to stakeholders how we are making these choices. In this year’s report, we have embarked on a new phase in our thinking about sustainability.

We have made an initial assessment of the activities Origin undertakes which are of most importance to our business and our stakeholders. The result is a list of what we call Material Aspects. We believe that if we manage these Material Aspects well, that is we comply with all obligations imposed upon us and those which we choose to impose on ourselves, we can be confident our business is being managed sustainably.

In this report, we identify and discuss our management of 16 Material Aspects. Over the course of the next year, we plan to continue to identify and report on additional Material Aspects.

Creating value for our stakeholdersAs a business, we believe it is important to create and sustainably distribute value among our key stakeholders. This year, there was a substantial increase in the value we distributed to key stakeholders. We distributed $15.1 billion, which was up from $13.1 billion in the prior year. The largest portion of this, $12.4 billion, is our net expenses. Our success as a business can bring important flow on benefits to other companies and the Australian economy, particularly as we pay for products and services from other businesses such as energy network providers, infrastructure owners, engineers and construction companies.

We distributed $1.1 billion to capital providers through interest and dividend payments, and $746 million to our employees through wages and shares. We distributed a significant part of the value we create to the Australian community through the payment of taxes and royalties to state and federal governments, and in the past year these accounted for $132 million. In addition, we distributed $6 million in the form of community investment, more than half of which was provided through our philanthropic foundation, The Origin Foundation.

There are many other, less tangible ways in which we deliver value, and I would now like to discuss some of our major activities as relevant to each of our stakeholder groups. In some areas we are proud of what we are already achieving, and in others we would like to do better.

OUR CUSTOMERSWe are proud of how we are helping customers to better manage their energy use.

There are many things we are doing to help our customers manage the rising cost of energy, including introducing new solutions that provide unprecedented visibility and control over energy use and costs. In August 2012 we launched Origin Energy Manager, Australia’s first mass-market energy management solution providing customers in Victoria with almost real-time access to information about their energy use and allowing them to predict their next bill. This year we went a step further, launching an in-home Energy Monitor which can sit on the fridge and provides the same information at the touch of a button. These solutions are a direct response to the concerns many customers have raised about a lack of visibility of their energy use. By allowing bill predictions, these solutions allow customers to better manage their household budget and minimise the chance of surprise when the energy bill arrives. Over time, we expect some customers may use this information to change their consumption habits to help save on energy costs.

Yet we acknowledge we need to do better at explaining how the industry works and the drivers of price increases.

The cost of energy has increased significantly in recent years, driven primarily by investment in the network of poles and wires that deliver energy to customers, and the introduction of green schemes including the carbon price and Renewable Energy Target. As the leading energy provider in Australia, we acknowledge that the industry has not done enough to inform and engage consumers. In response, this year we launched an upgrade to how we communicate via digital and social media channels, driven by the premise ‘Knowledge is Power’.

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Origin Managing Director, Grant King.

06

We created a new knowledge hub – Energy Explorer – which contains easy to understand information on a range of energy topics, including the drivers of energy price increases. This activity represented a major change in how we engage with consumers, and it was evident in the response to the campaign that there is a genuine hunger for information about energy. We look forward to further improving our communication to customers in the future, and engaging them in Australia’s energy conversation. We share a story about this journey on page 33.

OUR COMMUNITIESWe are proud of how we have listened to landholder feedback and improved our compensation framework for land access.

Over time we have listened closely to landholder feedback, and we also considered our own experiences, to revise our approach to compensating landholders for access to their land to develop our CSG activities in Queensland. The revised process, which includes a method to calculate fair compensation on a property-specific basis, helped us to sign 204 voluntary Conduct and Compensation Agreements (CCAs) with landholders for the Australia Pacific LNG project during the past year. Australia Pacific LNG now has agreements in place for more than 80 per cent of wells required for Phase 1 of the project. This reflects strong landholder support for our enhanced process, and our CSG development activities more broadly.

We will keep working hard to share the substantial economic benefits generated by our activities.

Through our investment in the $24.7 billion Australia Pacific LNG project, we continue to look for opportunities to share economic benefits with local businesses. The Australia Pacific LNG project has spent more than $12.3 billion on goods and services – the majority of which has been spent in Australia, often in regional locations. We are also creating substantial employment opportunities, with the project currently employing approximately 10,000 people at the peak of its construction activity. By providing employment and working with local suppliers where practicable, we can maximise the economic benefits of our development for the local, state and national economy.

We also acknowledge the impacts our developments can have on communities, and we are proud of many things we are doing to minimise these impacts.

The most substantial energy development in which we are currently involved is the Australia Pacific LNG project. Housing availability and traffic are two challenges that we are currently managing around our CSG activities in Queensland. In particular, we have implemented a range of initiatives to assist the community to gain access to affordable housing. We have provided rental assistance to those on low incomes to offset rising housing costs, and continue to work in partnership with not-for-profit Horizon Housing to build new affordable housing in Miles and Roma. We have committed more than $7 million to these projects to date.

As the public and political debate continues, we realise we need to do more to communicate the facts and address community concerns about CSG.

The development of energy projects, particularly low carbon fuels such as CSG, continued to be a focus of debate over the past year. This reflects the concerns of some in society about the potential social and environmental impacts of these energy developments. In many instances, the concerns associated with CSG – which is just natural gas from coal seams – have not been evidence based and have been either greatly exaggerated or misinformed. We therefore realise we must do more to convey the accurate facts about CSG development. Through our own activities and working in partnership with the industry body, the Australian Petroleum Production and Exploration Association, we have stepped up our efforts to address the misinformation in the current debate. One example is Australia Pacific LNG’s partnership with Queensland and Australian Rugby League legend Darren Lockyer where he shared his journey learning the facts about CSG. I encourage those interested in understanding the facts about CSG or following Darren’s journey, to visit aplng.com.au

OUR EMPLOYEESWe must continue to improve our safety performance so our people stay safe, and continue to promote diversity and inclusion in our workforce.

At Origin, safety is our first priority and part of the foundation of our approach to sustainability. In the past year, we improved our safety performance substantially with our TRIFR of 6.7 representing a 15 per cent improvement on the prior year. We have established a set of 11 Life Saving Rules that govern safe behaviours across our operations. These rules address the causes of 35 per cent of the potentially serious or catastrophic incidents in our business and we are putting considerable effort into embedding them across our workforce, and ensuring our people take accountability for their actions. You can read more about the introduction of Life Saving Rules on page 39. We also continue to focus on safety observations in an effort to prevent unsafe actions and reinforce safe behaviours. We will target further improvements in safety performance over the next 12 months as we target a zero harm workplace.

In an effort to improve the representation of women in our workforce, Origin has also been an early adopter of gender diversity targets. We have put in place three voluntary targets which we discuss on page 41, and while there are some areas we need to continue to improve, it has been particularly encouraging that the rate of appointment of women to senior roles across all of our operating business units increased by 15 per cent this year.

WE Aim to share valuesustainably

OUR INVESTORSIt was a more challenging year for our business in 2013, which was evident in our financial results. At the same time, over the past decade we have established the leading Australian integrated energy company and actions taken this year make us optimistic about our future prospects.

Our financial performance and future prospects are discussed on page 40, and in further detail in our Shareholder Review and Annual Report available at reports.originenergy.com.au

In closing, we understand that millions rely on the energy we provide every day. We are also cognisant of the need to lower carbon emissions from energy supply, while balancing this objective with maintaining reliability of supply and limiting the rising cost of energy. We take seriously the responsibilities associated with making these complex choices as we try to meet the expectations of our stakeholders.

We approach these challenges with confidence, knowing that our Compass will help us to make good decisions today, and every day.

Grant KingManaging Director


GlobaL trends

Two hundred years ago, the world’s population was estimated to be around 1 billion people (1) and the main source of energy was wood. Today, the world’s population is approximately 7 billion and is expected to reach 9.5 billion by 2050 (2). Access to electricity is considered a basic human right now in most countries. The reality is that an estimated 20 per cent of the global population is still unable to access any electricity, while another 15 per cent is unable to access sufficient or consistent electricity to facilitate a healthy and more prosperous life. Population growth and rising living standards in developing nations is growing global energy demand. Diverse solutions are needed to deliver energy across geographies.

Climate change and limiting environmental impacts from energy production and use are core concerns. For example, there is increasing demand from project financiers to understand the social and environmental impacts of their investments in energy projects. The International Energy Agency (IEA)predicts that renewable resources will grow from 20 per cent to represent 31 per cent of electricity generation by 2035. In Australia, there is bipartisan support to reduce carbon emissions by 5 per cent based on 2000 levels by 2020. The challenge involves implementing practical, cost effective and socially acceptable policies.

Innovation in information technology will provide huge potential for end users to better control energy use and for generators to more efficiently supply energy. Not only are smart meters already offering real-time data to help consumers in Italy, Canada and Australia decide on how and when they use energy, but in the future, battery technology may support renewables such as large-scale solar to provide baseload power throughout the day and night.

The IEA has called it the ‘Golden Age of Gas’ – growing demand for energy, the lower carbon profile of gas and massive unconventional gas reserves globally that are only more recently being extracted economically. Today, thanks to new drilling technologies, these gas reserves are available for extraction and use, elevating the role of gas in the energy mix. Large volumes of gas are used domestically and also exported as LNG to energy-hungry nations to power manufacturing and other energy-intensive industries, generate electricity and heat homes.

The future may be uncertain but emerging trends can provide an insight into future changes in the global energy industry, which could influence the way energy is sourced, stored, transported and used.

GLOBALPOPULATIONINCREASES

CLIMATE CHANGE AND ENVIRONMENTAL

CONCERNS TECHNOLOGICALINNOVATION THE ROLE

OF GAS

08 Global trends

Global energy demand has increased rapidly in developing countries, especially in parts of Asia where economies are expanding, living standards are improving and populations are growing. Australia’s proximity to Asia, combined with our abundant energy resources, means our energy industry can help meet Asia’s increasing energy demand, particularly by exporting cleaner forms of energy including natural gas.

The global energy sector is highly regulated and Australia is no exception. Changes in both government policy and regulation have the power to stimulate or restrict energy investment, which in turn can affect energy prices to consumers, reliability of supply, and investment in low carbon energy solutions. Australia’s new Federal Government has announced policy measures that should free and encourage resource development and reduce the cost burdens on consumers.

A rise in income and living standards brings new choices to consumers. This, coupled with concern for our environment, will change how people use and consume energy. There has been a rise in the decentralisation of energy generation such as through rooftop solar panels and cogeneration plants. Also, expect to see more electric cars on our roads now that more car makers have released models that produce less carbon emissions.

Australia is the world’s ninth largest energy producer and only the 17th largest consumer of non-renewable energy sources (3). We have a significant opportunity to capitalise on our resource endowment, particularly in natural gas, to provide energy to other nations. By the end of the decade, Australia is expected to become the world’s largest exporter of LNG, bringing substantial economic and social benefits. By 2050, Australia’s population of 23 million is also projected to increase by 62 per cent (4), driving growth in energy demand. It is anticipated our domestic energy production will more than double to meet this increased domestic and global demand.

(1) United States Census Bureau, International Programs, World Population, Historical Population. <http://www.census.gov/population/international/data/worldpop/table_history.php>

(2) United Nations, Department of Economic and Social Affairs: Population Division, Population Estimates and Projections Section. <http://esa.un.org/wpp/unpp/panel_population.htm>

(3) Department of Resources, Energy and Tourism 2013, Energy in Australia 2013 <http://www.bree.gov.au/documents/publications/energy-in-aust/BREE-EnergyInAustralia-2013.pdf>

(4) Department of Resources, Energy and Tourism 2012, Australia’s long-term energy future, <http://www.ret.gov.au/energy/facts/white_paper/part-1/chap-3/3.3/Pages/index.aspx>

THE RISE OF

ASIACHANGES IN GOVERNMENT POLICY DESIRE &

ASPIRATIONSTHE AUSTRALIAN

STORY

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Australia’s abundant energy resources are providing cleaner and reliable energy to Asia.


Ourstrategy

Origin supplies energy to markets in Australia, New Zealand and increasingly the Asia Pacific region. Origin’s strategy is to invest in the contestable segments of energy production, power generation and energy retailing. This strategy is designed to provide opportunities to grow the value of the Company, while allowing for the effective management of the risks that arise across an increasingly competitive energy supply chain.

Pursuit of this strategy will enable Origin to:

1. Continue to be the regional leader in energy markets in Australia and New Zealand;2. Build a regionally significant position in natural gas and LNG production; and3. Build a growing position in renewable energy in the Pacific region.

1. Regional leader in energy markets in Australia and New Zealand

2. A regionally significant position in natural gas and LNG production

3. Growing position in renewable energy in the Pacific region

• Large and diverse legacy gas portfolio which, together with flexible gas transport arrangements, supports a strong domestic gas production and supply business.

• Australia’s largest power generation portfolio of approximately 6,010 MW providing flexibility and diversity across fuel, generation type and geography.

• The leading energy retailer servicing 4.3 million customers, representing approximately 30 per cent share of customers in Australia’s eastern and southern states, with a diverse portfolio of energy solutions including electricity, gas, LPG and green energy products.

• Origin’s leading retail position provides an effective channel to market for Origin’s fuel and generation portfolio.

• Origin holds a 53.1 per cent interest in Contact Energy, one of New Zealand’s leading integrated generation and energy retailing companies, supplying electricity, gas and LPG to approximately 566,000 customers.

• 37.5 per cent interest in Australia Pacific LNG which is developing a large-scale CSG to LNG project which will produce LNG for export to supply the growing demand in Asia.

• Upstream operator of Australia Pacific LNG.

• Australia Pacific LNG has the largest 2P CSG reserves position in Australia with 13,382 PJe and is the leading CSG producer in Australia, producing 111 PJe in the 2013 financial year.

• Total 2P reserves position of 6,201 PJe, which includes Origin’s share of Australia Pacific LNG, representing a substantial position in the Asia Pacific region.

• Continuing to pursue organic growth of Origin’s gas production portfolio over the medium-term, including the Ironbark CSG project and Halladale Black Watch conventional gas project.

• Significant capabilities in natural gas development, in particular unconventional gas, which allows Origin to expand its gas positions in domestic and international markets.

• Significant renewable position through contractual wind off-take agreements; ownership of a wind farm at Cullerin Range; and geothermal and hydro generation owned by Contact Energy in New Zealand.

• A number of wind development opportunities including Stockyard Hill in Victoria; and geothermal and hydro development opportunities in Chile, Indonesia and Papua New Guinea.

• Seeking opportunities in markets that provide attractive and sustainable value for renewable resources.

(1) Through Australia Pacific LNG.

RENEWABLEOPTIONS Australia, New Zealand, Chile,Indonesia, Papua New Guinea

6,010 MWgeneration portfolio

MILLION customers4.3

6,201 PJe2P reserves

13,382 PJeCSG reserves position (1)

10 Our strategy

Perth

Adelaide

Melbourne

Sydney

Brisbane

Auckland

Wellington

Port Moresby

Fiji

Where we operate

Key● Exploration acreage● Exploration acreage – geothermal● Power station● Wind generation● Geothermal generation● Hydro generation● Office▲ LPG seaboard terminal■ LPG terminal●● Production facilityx Development+ Development proposal# TAWN assets subject to Sale Agreement

with New Zealand Energy Corp

Santiago

ChileKenya

Botswana

Ho Chi Minh City

Vietnam

Indonesia

Discover our interactive map online


Stakeholder Our Commitment Key areas of interest How Origin engages

OUR CUSTOMERS Origin has 4.3 million customer accounts across Australia, which include households, businesses and major industry.

Create value for our customers, by understanding their needs and delivering relevant and competitive energy products and solutions to meet those needs both today and into the future.

Energy is an essential commodity used every day by our customers. As a result, energy reliability and affordability are key concerns for our customers. In terms of helping customers address these concerns, we are providing more visibility on energy use and costs.

Engagement with customers is guided by our Customer Charter.

Customers provide us with feedback via letters and emails; contact with our Call Centre; as well as through social media.

Origin uses advertising, marketing and news outlets to provide information about products and facts about the energy industry.

For 10 years we have met regularly with representatives of organisations representing the interests of energy consumers, through our National Customer Consultative Council.

OUR COMMUNITIESOur activities bring us into contact with a wide range of communities in Australia and internationally. Origin engages with community representatives such as governments and media, Non Government Organisations (e.g. charities, environmental agencies), local community groups and individuals.

Respect the rights and interests of the communities in which we operate, by listening, understanding and working together to manage the environmental, economic and social impacts of our activities.

We communicate directly with:

Local and indigenous communities around our operations and developments.

We also work with intermediaries and influencers who reflect and represent the interests of the broader community. These include:

Governments and regulators who are charged with representing community interests.

Industry associations which represent the interests of the energy and business sectors.

Non Government Organisations (NGOs) which represent diverse interests including environmental, social and human rights.

Media which play a key role in disseminating information to stakeholders and are critical in public debates of national significance.

Local communities – Ongoing dialogue is underpinned by our Community Engagement Directive. We engage with communities through ‘town hall’ style meetings; targeted newsletters; public information centres in key project areas; project-specific websites and hotlines; and ongoing quantitative and qualitative research. In some locations we participate in formal Community Consultative Committees, conduct our own Community Reference Groups and have Community Relations Advisors employed in the communities in which we operate.

Governments – Regular dialogue and meetings with representatives from both sides of politics and ministerial departments, including by our Managing Director, senior executives and members of Origin’s Corporate Affairs team. We also make submissions on policy matters and attend key conferences to understand policy direction and ensure the Company’s views are understood.

Industry associations – Member of relevant industry and business associations including the Energy Retailers Association of Australia; Energy Supply Association of Australia; Australian Petroleum Production and Exploration Association and the Business Council of Australia.

NGOs – Regular meetings with major environmental and climate change organisations attended by key Origin executives and members of Corporate Affairs. A senior manager has been appointed to coordinate this activity. In addition, we work with local NGOs to manage impacts and share benefits of our activities, from energy developments to delivering energy to customers.

Media – We engage with Australian and international media through media releases; events; one-on-one interviews; background briefings and presentations; Boardroom events with key Origin executives; media tours of key assets and operations; and through conferences or events.

Engaging with stakeholders

The scale and breadth of Origin’s business brings us into contact with a diverse range of stakeholders in Australia, New Zealand and increasingly other parts of the world. We define our key stakeholders as our Customers, Communities, Employees, Investors and Business Partners.

12 Engaging with stakeholders

Stakeholder Our Commitment Key areas of interest How Origin engages

OUR EMPLOYEESOrigin’s workforce includes more than 6,000 employees and several thousand contractors, the majority of whom are based in Australia.

Create a rewarding workplace for our people by valuing everyone’s contribution, encouraging personal development, recognising good performance and fostering equality of opportunity.

Employees and contractors require a safe and healthy workplace, fair and equitable remuneration by recognising good performance, career development and training to encourage personal development, and a diverse and inclusive work environment. Unions are represented at some of our operations and projects and are focused on worker rights and wages, collective bargaining, health and safety as well as working hours and rosters.

We talk to employees and listen to their feedback via twice yearly employee roadshows held by either the Managing Director or other senior executives in major office locations; senior leadership and Business Unit team meetings and conferences; a Company-wide intranet; and operation-specific newsletters and announcements.

For our field employees, we favour face-to-face communication such as ‘toolbox talks’ and visits from senior leaders.

A twice yearly formal performance management process for all employees ensures roles are clear, skills are developed and opportunities provided.

We conduct culture and engagement surveys to understand the views of our employees.

OUR INVESTORSOur investment community incorporates retail shareholders, institutional investors, debt providers, credit reporting agencies and analysts including Environmental Social and Governance advisors who rely on material information to make informed decisions on Origin’s current and future performance.

Deliver market-leading performance for shareholders by identifying, developing, operating and growing value-creating businesses.

Investors and the investment community judge how Origin is delivering shareholder value. It is important for our investors to see decisions are reached through sound leadership and governance so they can be confident the business is being managed sustainably.

Engagement with investors is through our Annual General Meeting held each October; reports including a Shareholder Review, Annual Report and Sustainability Report; one-on-one briefings; local and international investor roadshows; and telephone and email enquiries.

Information is also distributed via the ASX and industry presentations. In addition, Origin participates in external benchmarking including the Dow Jones Sustainability Index, FTSE4Good Index, CDP (formerly the Carbon Disclosure Project), and has community investment data verified by London Benchmarking Group (LBG).

OUR BUSINESS PARTNERS Origin has a number of joint venture and investment partners, both domestically and internationally. This stakeholder group also includes businesses which provide goods and services for our projects and operations.

Respect the rights and interests of our business partners, by working collaboratively to create valued and rewarding partnerships.

Business partners require an open and transparent relationship with Origin to assist joint ventures in delivering shareholder value.

Regular communication throughout daily operations, with additional engagement undertaken through formal meetings; representation on joint venture boards; and participation in operating committees .

Origin’s Code of Conduct and Supplier Selection and Engagement Directive provide guidance on fair and ethical dealings with suppliers.

Our commitment to, and engagement with, each of these stakeholders is detailed below. Our challenge as a business is to find the right balance between the differing and often competing needs of our stakeholders.

We seek to balance the needs of our stakeholders


Our approach to materiality

Origin’s approach to sustainability is anchored in our Compass. This includes our Purpose, Principles, Values and Commitments, which define what we do and guide our decision making, behaviours and actions.

Defining what is material to our performanceWe have been through a process during the past year to identify activities that Origin undertakes that are of most interest and importance both to our business and to our stakeholders. We refer to these as our Material Aspects.

We believe if we manage these Material Aspects well, we can be confident of a successful and more sustainable business.

Defining our Material Aspects requires a deep understanding of our business and stakeholders’ interests. We expect our Material Aspects to evolve through ongoing consultation with our stakeholders.

This Sustainability Report provides information about how we manage Material Aspects, in particular those which are the most relevant and topical for the 2013 financial year.

This is the starting point of an ongoing process which will result in progressive coverage of a larger number of Material Aspects than that included in this report.

To assist stakeholders in comparing our performance to others, we have followed the Global Reporting Initiative framework in our online Sustainability Report. This information is found in the DataZone at reports.originenergy.com.au

Reporting against our Material Aspects To report against each of our Material Aspects, we first consider our Duty of Care. Our Duty of Care ensures we first comply with the relevant laws, regulations and contractual obligations imposed on us by others. It also encourages us, where practical and desirable, to impose additional standards on our business to create better outcomes for stakeholders.

We listen to our stakeholders, to help determine whether our management of Material Aspects is appropriate, and we apply these learnings to our future actions. We also seek opportunities to create value and distribute that value as appropriate to our stakeholders.

14 Our approach to materiality

Energy developments Delivering energy Future energy solutions Managing our business

• Delivering the Australia Pacific LNG Project page 16

• Accessing land and coexistence page 17

• Protecting water resources page 19

• CSG as a cleaner energy source page 22

• Managing community impacts page 25

• Sharing economic benefits page 27

• Customer care page 29• Setting sustainable

tariffs page 30• Addressing energy

affordability page 31• Emissions from power

generation page 35

• Tomorrow’s energy solutions page 36

• Keeping our people safe page 38

• Financial performance page 40

• Achieving gender diversity page 41

• Contributing to effective policy page 43

Not included in this report: Corporate governance

This can be found in Origin’s Annual Report/Director’s Report at reports.originenergy.com.au

Material aspects refl ect activities of most interest to stakeholders

02:30pm

We work in partnership with local landowners to run cattle on

our properties, with the benefits shared by both parties.


Origin finds, develops, produces and procures energy from a range of sources including natural gas, coal, geothermal, hydro and wind. Development of these resources involves large, capital-intensive projects, which tend to occur in rural and regional communities. This brings Origin into contact with a diverse range of stakeholders, from local communities and landholders, to community representatives such as governments and media.

Our developments can both impact and create benefits for our stakeholders. In this section, we talk about the activities associated with our energy developments that are of most importance to our stakeholders and business at this time.

Over the past year, these have ranged from social issues such as land access and housing availability, to environmental issues such as the role of natural gas as a cleaner energy source, and the potential impact of CSG on water resources.

Delivering the Australia Pacifi c LNG projectAustralia Pacific LNG project approaches half-way markOrigin, along with ConocoPhillips and Sinopec, is a shareholder in Australia Pacific LNG, which is building a $24.7 billion project. The project is on schedule and budget to begin exporting LNG from Queensland by mid 2015. The Australia Pacific LNG project is the largest project Origin has undertaken, and once complete it stands to deliver a step change in earnings and cash flow to support the Company’s future growth.

Origin operates the Upstream part of the Australia Pacific LNG project consisting of development of the gas fields and construction of the main pipeline. The Downstream part of the project, operated by ConocoPhillips, consists of the construction of the LNG facility.

Australia Pacific LNG supplies gas to Australian customers and from mid 2015 will export gas to Asian markets under long-term contracts. As at 30 June 2013, the project was approximately 45 per cent complete.

Comprehensive review of schedule and budgetIn February 2013, Origin announced the completion of a comprehensive schedule and cost review of the Australia Pacific LNG project. This confirmed a 7 per cent increase in the estimated cost of the project to $24.7 billion (1).

Delivery of first LNG from Train 1 is expected by mid 2015. The accelerated project schedule also provides for delivery of first LNG from Train 2 in late 2015.

(1) As at 31 December 2012 exchange rates.

Delivery of first LNG from Australia Pacific LNG’s project is expected by mid 2015.

ENERGY DEVELOPMENTS

10:33am

The roof of Australia Pacific LNG’s two LNG tanks have been raised, another milestone achieved for the project.

16 Energy developments

Upstream progressAs at 30 June 2013, 343 gas wells had been drilled and work was on track despite having been impacted by severe weather events through the year.

At the same time, installation of gathering pipelines was ahead of schedule with the equivalent of 273 wells connected – 100 more than the targeted 170 wells. Around 161 diameter-kilometres of gathering line had been installed and all land surveys, environmental studies and flow line routes were scouted for Phase 1 well locations.

The eastern gas field facilities were 63 per cent complete, which is behind schedule due to severe weather events in the March Quarter and execution challenges but this will not impact the project’s critical path. The first compression train at Condabri Central is forecast for completion in October 2013.

In conjunction with work on the eastern fields, facilities in the western gas fields are progressing well.

Similarly, the main pipeline from Condabri to Gladstone is ahead of schedule with 143 kilometres fully installed. This part of the project is 73 per cent complete and significantly ahead of the target of 50 per cent complete. Land access for the main pipeline and its laterals has been secured.

Downstream progressTargets have been consistently met in the Downstream project. As at 30 June 2013, all LNG compressors had been delivered for Train 1. The first LNG modules were received at Curtis Island and set on their foundations. The first refrigeration compressor has been set and Train 1 gas turbine generators were set on their foundations. The roof was raised on each of the two LNG tanks

ahead of schedule, and the tanks were 35 per cent complete at the financial year end.

Australia’s leading 2P CSG reserves positionAustralia Pacific LNG has the leading 2P CSG reserves position in Australia. During the year, Australia Pacific LNG reported an increase in overall gas reserves. This adds to the already sufficient reserves to support a two-train LNG project.

In the year to 30 June 2013, Australia Pacific LNG’s 2P CSG reserves increased by 271 PJe to a total of 13,382 PJe. The 3P Reserves increased by 108 PJe to 16,155 PJe. Origin provides quarterly updates on production and exploration activity, and annual updates on reserves, including Australia Pacific LNG, which are on our website at originenergy.com.au/reports

Accessing land and coexistenceWhy accessing land is important Energy resources such as natural gas often sit underneath land owned by someone else, and so in operating our business we are required to agree access with a range of landholders. Many landholders have a deep and long-held connection with their land, so we take our obligations around land access very seriously.

How we approach and build these relationships is vitally important and we are committed to ensuring a fair land access process which maintains the confidence of landowners and regulators. We are transparent about our land access processes so that communities understand that while our operations can cause change and uncertainty for landowners, they are fairly compensated and have many opportunities to realise additional benefits by working in partnership with us.

While compensation agreements are required in many parts of our business, the primary focus of our current land access activities is our largest project, the $24.7 billion Australia Pacific LNG project in Queensland.

Delivering good outcomes for landownersIn developing CSG resources for the Australia Pacific LNG project, Origin will always negotiate access to a landowner’s property before entering, and the process of negotiating access is highly regulated. Origin’s land access practices show that we regularly exceed the legal requirements that protect the interests of landowners.

We follow the mandatory conditions set out in the Queensland Government’s Land Access Code as well as other relevant regulations, which we combine with our own best practice guidelines to ensure our duty of care. These additional activities provide extra confidence that our dealings with landowners are fair, and help us build trusting and lasting relationships.

Origin has developed a Land Access Strategy, where excellence is defined as having meaningful conversations with landowners, building long-term contractual relationships with them and managing those relationships in an empathetic and compliant way. Dedicated Landowner Relations Advisors (LRAs) are assigned to each landowner.

05:45am

Landholders take an early morning walk in Queensland’s CSG fields.

Land access at a glance

Our PurposeBuild trusting landowner relationships that support project delivery and leave positive legacies.

Laws & Regulations

We follow the QueenslandGovernment’s Land Access Code plus many other regulations.

Our Additional Actions

We work with landowners to write Property Management Plans that inform property-specific planning and are used to calculate fair compensation.

Our Approach

We follow a rigorous, formal process from pre-planning through to rehabilitating land post activity.

Our Performance

This year we negotiated and signed 204 compensation agreements.

At the end of September we had agreed access to more than 80% of wells required for Phase 1 of the Australia Pacific LNG project.


We believe energy development and agriculture can and should coexist, and this is something we are actively demonstrating in our business today.

Maintaining agricultural production

1,200 tonnesof sorghum harvested on our Monreagh property in 2013.

The process of engaging with landowners, from the first notification through to contract negotiations, to activity occurring on their land can take a minimum of six months, but on average takes 12 months or longer. We seek to provide landowners the appropriate amount of time to consider our plans, provide feedback, obtain legal advice and negotiate their agreement. Our relationship with landowners ends when we leave their property and they sign off that rehabilitation is satisfactory.

Over time we have listened to landowners’ feedback and applied our learnings to the development of a new Compensation Framework that calculates compensation on a property specific basis. Using this case-by-case approach, Origin has negotiated and signed 204 compensation agreements with landowners for the Australia Pacific LNG project over the past year. At the end of September, compensation agreements were in place for more than 80 per cent of the total wells required for the Australia Pacific LNG project’s Phase 1 development.

Our land access team works with a ‘plain English’ Conduct and Compensation Agreement to ensure negotiations are straight-forward and transparent. LRAs are trained to work with landowners to develop formal Property Management Plans that list existing farm business activities and identify areas where we can plan to minimise impacts or share benefits, such as building or upgrading roads and fencing, and the mutually useful placement of dams and managing pests.

Agricultural producerAustralia Pacific LNG owns some of the land on which we operate, and we employ specialist Agricultural Property Managers to manage the agricultural production on this land. Monreagh is one of our 1,100 hectare properties located southwest of Chinchilla, where crops, cattle and gas exist side by side. Earlier this year, we harvested 1,200 tonnes of sorghum from a 400 hectare crop on Monreagh and there are plans to expand in the future. Overall Origin has around 3,000 hectares of land under cropping activities. Integral to our plans, is to beneficially use water produced and treated as part of CSG production, see page 20.

Creating shared valueWhere possible, Origin seeks to create shared value for landowners. The Working Together Program provides landowners the opportunity to undertake basic maintenance around gas infrastructure on their properties. In order to carry out this work, landowners are required to meet the same pre-qualification standards as all contractors. The pilot program, developed in conjunction with Skills Queensland, assists them to meet these standards and attain a Certificate III in Rural Operations. Having achieved full recognition of skills and accreditation, landowners are able to tender for broader contracting opportunities to generate additional income.

In addition, Origin has established two mutually beneficial arrangements in Miles and Spring Gully, where we work with local landowners to run cattle on our properties. Across these two arrangements, we have 5,400 head of cattle grazing on our properties, which are managed in conjunction with local farmers and the resulting benefits shared between both parties.

04:45Pm

Checking on a landholder bore as part of our extensive monitoring program which will help us identify any changes in water supply over time.

5 actions to ensure fair land access1. Property Management Plans

developed with landowners. 2. Property-specific Terms

of Access that define expectations during the operational phase in fine detail.

3. Negotiated compensation agreements that are aligned with Origin’s Compass, laws and regulations and international best practice.

4. Specialist training for Landowner Relations Advisors in business, legal and technical areas relevant to land access.

5. Employing Agricultural Property Managers to help maintain agricultural production on Origin-owned land.


Protecting Water resourcesWhy water is importantEffective and responsible management of water is important for our business. We come into contact with water in many of our activities, including gas production and power generation, and we understand that how we use, re-use or dispose of water is of considerable interest to stakeholders.

Currently, there is a high degree of interest in water management related to our CSG activities. Some stakeholders have raised concerns about the potential impact of CSG extraction on both water supplies and quality.

We take our responsibilities around CSG water management seriously. We strive to take a leadership position and are committed to advancing scientific and public understanding of the Great Artesian Basin (GAB) hydrogeology as we develop our project.

Addressing community concernsThe community has expressed two key concerns when it comes to CSG and water:

1. the extraction of groundwater from coal seams and interconnectivity of some aquifers may reduce water availability for other users in the GAB; and

2. the process used to extract water may deteriorate water quality.

CSG is produced by pumping groundwater from coal seams to release gas. Many of the concerns raised about the potential impacts of CSG activities on water resources reflect misunderstandings based on inaccurate or insufficient information.

The entire CSG industry’s impact on groundwater, including Origin’s, is often greatly exaggerated.

In the areas where we extract CSG for our project, the water we withdraw is from the coal seams and typically contains high levels of salt. This generally makes it unsuitable for use as a water source without treatment, so we are not taking water that would be otherwise used for agriculture or other uses.

There are however, a small number of users who may experience reduced water availability as a result of CSG production. For these users the CSG industry is required by law to make good any impacts on groundwater availability. It is currently estimated that over the life of the existing CSG projects that water levels in the Surat Basin may decline to a level which affects water availability in approximately 528 of the 21,000 bores. Of these bores 111 relate to areas in which Australia Pacific LNG operates. We have already commenced negotiating make good agreements with landholders whose bores may be affected within the next three years.

Fraccing and well designThe extraction of CSG requires the drilling of wells and can involve the use of hydraulic fracture stimulation, commonly referred to as fraccing, to improve the flow of gas. It’s estimated that approximately 30 per cent of our wells over the life of the Australia Pacific LNG project will require fraccing, with minimal fraccing required in the first five years.

Australia Pacific LNG exclusively uses water-based fraccing fluids. The fluid primarily comprises water and sand (98.8 per cent) which is used to prop open the fractures in the coal seam. A small percentage of the fluid contains other additives which are necessary to enable the sand to flow into the fractures. These additives are found in common household items and are considered entirely safe in the small quantities in which they are used.

Fraccing is strictly controlled by regulation and will not contaminate aquifers. However, the community has expressed concerns that fraccing could create connections between clean water aquifers and salty or brackish water from the coal seams we access. This is geologically very unlikely, as coal seams and water aquifers are separated by hundreds of metres of very low-permeability rock.

Our wells are also designed to very strict standards, with layers of cement and steel casing separating the wells from the surrounding environment.

The Australia Pacific LNG project is underpinned by extensive experience, sound science, and thorough and extensive regulations and approvals. There are two layers of legal protection for water resources, Federal and State. At a Federal level, the project complies with the Water Act 2000 and Environmental Protection and Biodiversity Conservation Act. Under Queensland law, the project is subject to environmental assessment by the Department of Environment and Heritage Protection which has developed the Coal Seam Gas Water Management Policy specifically for careful management of the CSG industry. There are also many state acts, guidelines and policies, for example the Office of Groundwater Impact Assessment, which produces the Underground Water Impact Report, which is publically available.

Our management program for water is governed by strict conditions imposed by law, and in addition to this we make commitments that extend beyond the law.

Additional actions we takeUnderstanding the water resources in the areas we operate is the foundation of our approach. In early 2013, we completed a comprehensive groundwater bore baseline assessment program. Over three years, 900 bores were studied, with groundwater levels, groundwater quality, bore construction and condition data gathered, as well as written and anecdotal data from landowners. This has helped us and the community better understand groundwater resources. It has also provided a baseline against which we can measure any changes that may occur as a result of our activities. The baseline data is therefore the basis of the project’s CSG Water Monitoring and Management Plan.

Origin strives to take a leadership position on the management of CSG water.

Water at a glance

Our PurposeAppropriately manage our impacts on water sources and ensure water security for our business and other water users.

Laws & Regulations

Water management is governed by extensive federal and state laws and regulations, including the Water Act 2000, EPBC Act and Queensland’s CSG Water Management Policy.


Australia Pacific LNG has established a research partnership with the CSIRO called GISERA through a $14 million investment to further CSG research including water.

Our Approach

Our formal water management plans, strategies and monitoring programs guide how we use, re-use or dispose of water.

Our Performance

We’ve invested $27 million to date on water injection trials at Spring Gully, Reedy Creek and Condabri.

Discover more online


Australia Pacific LNG has one of the largest water management teams in the resources industry comprising more than 70 professionals. Their expertise ranges from postgraduate qualified specialties to water engineers and scientists, with experience gained both within Australia and internationally.

Australia Pacific LNG has also established a research partnership with the CSIRO called GISERA, through a $14 million investment. Among other socio-economic and environmental impacts, GISERA will conduct research to better understand the impacts of CSG development on groundwater and make publicly available the results of this research.

CSG water useThe Queensland Government’s Coal Seam Gas Water Management Policy recognises the opportunity to convert CSG water to a resource that can be beneficially used.

The policy outlines a variety of potential options for use of CSG water. The two primary options we have identified are:

1. Aquifer injection: this involves pumping treated water into aquifers depleted from historical groundwater extraction making water available for future use. We were the first CSG project to be granted approval for aquifer injection at Spring Gully’s Precipice Aquifer. Trial injection schemes are currently underway at Reedy Creek and Condabri. It is estimated more than $117 million will be spent on trials and water injection once the project is in operation.

2. Beneficial use, such as for agriculture: one of the highest value uses of water is to irrigate crops that will feed and benefit the community. Our first CSG water treatment plant at Spring Gully irrigates a 300 hectare pongamia plantation, with the plant’s seeds, stalks and leaves being suitable for bio-diesel and farm fodder. Origin is currently developing a distribution network to supply water to support landholder irrigation and livestock watering at Condabri and Talinga.

Each of these options requires CSG water to be first purified through sophisticated reverse osmosis treatment processes. Reverse osmosis reduces the salt content of the water to provide freshwater for further use. The salt removed through the treatment process creates a salt waste called brine which requires further treatment and disposal.

Managing brineThe salt removed during the reverse osmosis process produces brine. Currently brine is held in specially built storage ponds that are subject to strict construction and lining requirements. Over time, water left in the brine evaporates, producing concentrated salts.

The total amount of salt estimated to be produced from the CSG industry in Queensland over the 40 year life of all of the projects is expected to be in the order of 10 million tonnes. This is equivalent to the annual production of salt in Australia.

We are currently assessing a number of ways to beneficially use this salt, one of which is salt recovery which extracts common table salt and sodium carbonate from the brine. If successful, this could be made available to the domestic market.

The Australia Pacific LNG project is underpinned by extensive experience, sound science, and thorough and extensive regulations and approvals.

910,000ML 615,000ML 140,000ML 95,000ML 25,000ML

Annual recharge to the GAB

Total annual estimated groundwater use in the GAB

Current annual groundwater use in Surat Basin

Average annual water production by the CSG industry

Typical annual water production by Australia Pacific LNG post 2015

CSG industry’s water use in context

05:22Pm

Beneficially using treated water to irrigate crops in Queensland.


Darren’s journey to learn the facts about CSG

We know that when it comes to CSG there is concern around water and in particular, about protecting water used for drinking and agriculture, or draining the GAB.

In response to this and the ongoing public debate about CSG, Australia Pacific LNG launched a major educational campaign.

We wanted to provide accurate and transparent information to help people better understand how CSG is developed, where the water comes from during extraction and how we responsibly and sustainably manage water. We also wanted them to know that the industry is tightly regulated and our project alone complies with more than 1,500 federal and state conditions and regulations.

Taking people through the various steps of CSG production, our campaign aims to answer questions and respond to common concerns about topics ranging from how we work with landholders to water security and the process involved in hydraulic fracturing (or fraccing as it’s commonly known).

A key part of the campaign was partnering with Queensland and Australian Rugby League legend Darren Lockyer. But before Darren would agree to work with us, he was keen to understand more about the industry for his own reassurance.

We decided to share his journey learning the facts about CSG through a series of informative webisodes. In these, Darren puts his questions about CSG direct to experts such as engineers, scientists, hydrologists and landholders.

Fact sheets addressing the most common water concerns were also made available giving more information on topics such as water management.

Darren said: “I grew up in Roma, right in the middle of where lots of Queensland’s CSG is found. When Australia Pacific LNG wanted help explaining how they’re developing natural gas from Queensland’s coal seams, I agreed, but on one condition, we head back to where it’s all happening so I could find out what’s going on for myself.

“I spent time learning about CSG water, about aquifers and aquitards and about what happens to the water when it comes up to the surface.

“People talk about the water being contaminated. Once you talk to the experts, they make sure the water is not the water the farmers use and when you hear the experts explain it to you, you actually start to feel a lot more confident about it all.”

During the campaign, visits to the Australia Pacific LNG website substantially increased. We have been encouraged by the number of people interested in the facts about CSG.

06:03PM

Australia Pacific LNG’s campaign in partnership with Australian

Rugby League legend Darren Lockyer aims to share the facts

and counter CSG misinformation.

follow Darren’s journey

online


CSG as a cleaner energy sourceResponding to climate changeClimate Change is a major societal challenge and an important issue for energy companies. Origin is a producer of emissions in Australia through our gas production and power generation activities, and plays an important role in helping to lower carbon emissions from energy supply through our development of natural gas and renewable energy.

We are committed to managing our energy use and greenhouse gas emissions, and reporting them transparently. In response to some recent studies which have attempted to question the benefits of natural gas, in the past year we have been asked by some stakeholders to validate the cleaner qualities of natural gas. We discuss emissions associated with CSG activities in this section, while emissions associated with our power generation activities is discussed on page 35, and the development of low carbon energy solutions on page 36.

The role of natural gasThrough our development of CSG resources, and other conventional gas activities, we support the delivery of cleaner energy. When used to generate electricity, natural gas whether from CSG or conventional sources, produces up to 70 per cent less emissions than coal. Gradually replacing coal-fired power stations with gas-fired power stations would help Australia to reduce its greenhouse gas emissions. The United States has shown the cleaner potential of natural gas, reducing its emissions substantially, largely by shifting from coal to gas for power generation.

Gas is also an ideal partner for peaking power generation which supports renewables that currently cannot provide energy all the time, such as solar or wind. That is why natural gas will continue to play an important role in the delivery of energy in Australia and around the world.

Some stakeholders have expressed concern that our development of a project of the scale of Australia Pacific LNG will lead to a significant increase in our carbon emissions. While it is true that our emissions will rise as our CSG production increases, we balance this against our important role in addressing the global issue of climate change.

When exported as LNG to our customers in China and Japan, the gas we produce will have the potential to supersede other, potentially less environmentally attractive fuel choices in those countries. This will have a positive impact on global carbon emissions. A WorleyParsons study has estimated that every tonne of CSG emissions in Australia reduces global emissions by 4.3 tonnes, when the gas displaces conventional coal-fired power.

The environmental benefits of gas are not just limited to greenhouse gases. Natural gas also uses much less water than coal-fired power and produces much lower levels of noxious substances such as sulphur dioxide, nitrogen oxides and fine particle emissions. Burning gas instead of coal also improves urban air quality, a real benefit in China.

Reporting our emissionsThe energy industry and the projects we manage are highly regulated when it comes to carbon emissions reporting. Relevant Australian laws and regulations that we abide by include the Environmental Protection Act 1994, the National Greenhouse and Energy Reporting Act (NGER Act), the Energy Effi ciency Opportunities Act 2006 and the Clean Energy Act 2011.

(1) Greenhouse Gas Emissions: Study of Australian CSG to LNG, WorleyParsons, April 2011.

(2) Data sourced from Greenhouse Gas Emissions: Study of Australian CSG to LNG, WorleyParsons, April 2011 and Origin estimates, April 2012.

Studies have estimated that every tonne of CSG emissions in Australia reduces global emissions by 4.3 tonnes(1), when the gas displaces conventional coal-fired power.

Gas and water gathering, and treating water

Extraction of the gas from well

Gas processing plant

Main Transmission pipeline from gas fields to LNG facility

Upstream: 11%

Lifecycle emissions produced during the CSG to LNG process (2)


We produce emissions and play an important role in developing cleaner forms of energy that will help to reduce emissions.

CSG as cleaner energy at a glance

Our PurposeManage our energy use and air emissions, report them transparently, and invest in cleaner forms of energy.

Laws & Regulations

Emissions reporting is highly regulated, including through the Environmental Protection Act (1994), the National Greenhouse and Energy Reporting Act, and the Clean Energy Act.


We contribute to greater understanding of emissions from gas through membership of Joint Industry and Department of Natural Resources and Mines and joint Australian Government and CSIRO initiatives.

Our Approach

We have formal processes for monitoring and measuring emissions, reporting them to regulators, and seek ways to improve operational performance to reduce emissions.

Our Performance

Total scope 1 emissions for LNG operations and Australia Pacific LNG Upstream construction activities were 624,000 tCO2-e, a 23% increase on the prior year.

Each year, we are required to report our audited emissions to regulators.

We measure and report our emissions from CSG exploration, production, processing and transport under the NGER Act. We have done this since it was established in the 2009 financial year.

This year our LNG business unit scope 1 emissions from operations were 552,700 tCO2-e, and scope 1 emissions from Australia Pacific LNG construction activities were 71,300 tCO2-e. There was an 11.3 per cent increase in emissions from operations on the prior year and a 466 per cent increase in emissions from construction activity on the prior year, as we continued to ramp up activity towards delivery of first LNG by mid 2015.

We contribute to greater understanding of emissions from natural gas and its role in addressing climate change, through membership of relevant industry associations and government bodies. These include the Joint Industry and Department of Natural Resources and Mines, the joint Australian Government and CSIRO initiative to investigate fugitive emissions from CSG, Australian Petroleum Production and Exploration Association and the Australian Industry Greenhouse Network.

We have also undertaken voluntary reporting of emissions to the CDP for the past eight years and have publically disclosed this information for the past seven years. We report the same data in the Dow Jones Sustainability Index.

CSG to LNG processUsing CSG as fuel for power generation in Australia, or for shipping as LNG to overseas markets, requires a complex array of machinery and engineering. This includes processes such as exploration, drilling and well construction, extraction of gas and water, gathering and treating water, gas processing, pipelines, refrigeration and storage.

The majority of greenhouse gas emissions occur at the end of this process during combustion (burning) of the gas, or in other words its end use. Around 78 per cent of all emissions occur where the gas is used by generators to make electricity or when used directly by homes or industry. This means that the vast majority of emissions associated with our CSG activities will occur overseas, once the gas is transported as LNG to Japan or China, and burnt in power stations to create electricity. The benefit of reduced emissions from gas relative to coal will be recognised in those countries. Only a small proportion of emissions will occur in Australia, where we extract and process the gas ready for shipping.

Successive stages of refrigeration cool the gas turning it into LNG

LNG is storedin tanks

Overseas the LNG is regassified and used to fuel power stations,industrial and residential use

LNG is exported inpurpose-built ships

Downstream: 11% End use: 78%


Fugitive emissionsIn the past year, some stakeholders have expressed concern about fugitive emissions from CSG. Fugitive emissions can come from:

• infrastructure leaks which can occur on a small scale throughout the production process;

• intentional flaring of CSG to ensure the safe and efficient operation of equipment; and

• minor venting of CSG where it is not practical to flare.

Australia Pacific LNG uses new technologies and rigorous internal processes, to ensure fugitive emissions from our operations are negligible. We have programs in place at operational assets to routinely detect and repair methane leaks along production infrastructure.

Acknowledging the need to provide added confidence to the community that fugitive emissions are being accurately reported, in August 2012 the Australian Government commissioned a review which recommended further research into fugitive emissions. The government has subsequently announced a joint study with CSIRO of CSG fugitive emissions covering Queensland and New South Wales CSG production. Origin supports and will participate in the CSIRO study. The study will focus on sampling CSG infrastructure, such as wellhead pipe connections and fittings, and well site emission rates.

Naturally occurring seepsThere is documented and anecdotal historical evidence of shallow gas seepage in areas of Queensland prior to the arrival of the CSG industry. This is because gas exists close to the surface, which is a factor that attracted energy companies to the area.

Origin, as Upstream operator of Australia Pacific LNG, has continued investigations into bubbling methane seeps observed in the Condamine River. Research activities have involved independent specialists and included:

• aquatic ecology assessment of the riverine areas near the seeps;

• installation of temporary water level gauging stations;

• mapping visible bubble locations, installation of soil gas monitoring probes, collection of water and gas samples for analysis, and measurement of soil gas parameters;

• measuring and monitoring methane at the seeps;

• a 3D contouring survey of the river profile;

• inspection, downhole video runs and testing of water bores including gas and water level measurements, water and gas chemistry and composition analyses;

• a review of existing Australian and international information regarding similar situations; and

• an ongoing water quality monitoring program.

In parallel with these investigations the Queensland Government conducted its own studies into the seeps in 2012, coordinated by the CSG Compliance Unit, with results released in January 2013.

The Government’s Summary Technical Report about the Condamine River Gas Seep Investigation found no evidence of safety risk or environmental harm. The report summarised the Government’s work to investigate the seeps and referenced the investigation and investment in ongoing studies being undertaken by Origin. These investigations will provide important baseline data necessary for developing a more detailed understanding of the seeps.

Natural gas produces much lower levels of greenhouse gas emissions than coal when used for power generation.

03:50Pm

Checking on a CSG well in Queensland with Australia Pacific LNG partner Darren Lockyer.


Managing impacts on communitiesWe are responsible for managing our impacts on othersNew gas plants and power stations are large-scale infrastructure developments, which often occur in rural and regional communities. Our presence in these communities can bring many benefits. It can also create social impacts including increased competition for labour, pressure on local services, traffic, and for large developments, a shortage of housing. We aim to listen to communities, understand their concerns about these impacts, and take action to mitigate them.

The largest development in which Origin is currently involved is the Australia Pacific LNG project in Queensland. The social impacts currently requiring our greatest focus are road safety and housing availability.

Listening to communitiesCommunity expectations of resource companies are continually increasing. Over time, the Queensland state government has introduced strong regulatory requirements and consultation mechanisms to ensure that industry and communities work together to manage the issues that come with large-scale developments. There are many laws and regulations in place to protect communities.

For the Australia Pacific LNG project, the Queensland Coordinator General, under the State Development and Public Works Organisation Act 1971, agreed to the commitments made in the Australia Pacific LNG project’s Environmental Impact Statement (EIS) and Social Impact Management Plan (SIMP). In approving the EIS, the Coordinator General imposed strict conditions the project must meet. These are an essential part of our approach to managing impacts on communities, but we don’t stop there.

Origin has implemented additional guidelines and principles which help us manage community impacts. Open and transparent engagement is crucial to developing and maintaining strong partnerships with our stakeholders.

Origin’s Community Engagement Directive is a formal framework which guides the Company’s interactions with communities. This process is underpinned by rigorous social and economic analysis, and by listening to and interacting with communities to better understand how they work, and their concerns and aspirations.

We provide several mechanisms through which communities can provide feedback to us or lodge a concern. This includes in person at our offices in Chinchilla, Roma and Miles, via a dedicated 1800 number and email. The top five concerns raised by communities around our CSG developments, are traffic and transport, noise, dust, construction operations and behaviour of employees and contractors. Traffic is by far the biggest concern, accounting for 42 per cent of complaints, and this is a key focus of our efforts to mitigate our impacts on communities.

To better understand the socio-economic impacts associated with CSG, Australia Pacific LNG established GISERA along with the CSIRO, which funds constructive, objective and publicly available research. A wide range of research partners contribute to GISERA to ensure the research topics reflect the views and concerns of stakeholders.

The road is for sharingThe development of the Australia Pacific LNG project and other CSG to LNG projects places additional pressure on roads. The influx of workers and the use of large vehicles to transport goods, increases traffic in rural and regional communities, and with this raises the risk of road incidents. Road safety is therefore critically important to us and our communities.

Origin’s Land Transport Directive outlines measures for employees, contractors and suppliers to minimise the risk of traffic incidents. The directive includes driver and occupant safety, driver competence and journey planning to lessen the risks.

Australia Pacific LNG has contributed financially to an upgrade of the Miles airport, which includes a sealed runway for all-weather access. In September 2013, Australia Pacific LNG also announced a contribution of $54 million for Maranoa Regional Council to conduct road upgrades in the area surrounding the project, north-east of Roma. The funding will enable the widening of sealed roads that are heavily used by Project vehicles, and the bitumen sealing of some roads to improve road safety and reduce dust levels for nearby residents.

Other road safety measures include restricting heavy and excessive light vehicle movements during school bus hours and also during the Christmas holiday period, reducing speed limits for construction traffic and In-Vehicle Monitoring Systems in all project vehicles. This has led to the creation of a CSG industry Logistics Safety Code of Practice. We have also put in place buses between Roma airport and project sites which is removing approximately 100 cars off the road each two week roster period.

By listening to the concerns of communities we can work together to minimise impacts.

Creating value for our communitiesAt Origin, we look to create a positive legacy for communities over the long-term, by finding opportunities to create value. We work in partnership with communities to decide the best ways to do this. Understanding the risks associated with driving on country roads, and listening to community concerns, led us to establish the Caring About Road Safety (CARS) program in partnership with RACQ. The CARS program equips young drivers with driving skills and positive attitudes that could help save lives. Since the program began in 2007, more than 1,500 students from local schools in Tara, Miles, Chinchilla, Dalby, Roma, Biloela and Moura have participated in the practical driver training course on local roads.

Promoting road safety

1,500School students have completed our road safety program in Queensland.

Community impacts at a glance

Our PurposeMinimise our impact on communities with particular consideration for housing and road safety.

Laws & Regulations

The Queensland Coordinator General agreed to Australia Pacific LNG’s EIS and SIMP with strict conditions and these form the basis of our approach.


With the CSIRO, Australia Pacific LNG has established GISERA, a major research project into the socio-economic impacts associated with the CSG industry.

Our Approach

We follow a rigorous process which includes impact assessment, mitigation strategies and ongoing monitoring and reporting.

Our Performance

We’ve committed more than $7 million to build new homes in Queensland to alleviate housing pressure.


Access to affordable housingThe scale of CSG to LNG development in Queensland and the number of workers required to deliver three large projects being built at the same time, has created a short-term influx of people to some rural and regional locations, and will also create jobs for the longer-term. This, in turn, has created pressure on housing supply and led to a rise in prices and rents, most likely to impact those on low to medium incomes working and living in the community. We have listened to community concern about this issue via our Community Consultative Committees and other feedback channels, and there are a number of actions we have taken to reduce our impact on the housing market.

We have built temporary camps for employees around our major construction activities such as gas plants, the pipeline route, drilling sites and on Curtis Island, which reduces our impact on housing availability.

However, there have been some immediate and unavoidable short-term housing impacts as the project has developed, and in these instances we have funded rental support programs to help those impacted.

Partnerships are crucial to managing the challenges associated with housing. We work closely with local councils and NGOs as they are often best placed to understand the social impacts and most appropriate solutions. Australia Pacific LNG has partnered with not-for-profit affordable housing provider Horizon Housing to construct homes and assist in easing housing stress experienced by the community. More than $7 million has been committed to address housing affordability in the gas fields, which has included nine homes completed in Miles and the delivery of affordable accommodation in Roma in 2014.

Queensland’s CSG to LNG projects have created jobs and economic prosperity, but along with the increase in workers has come pressure on housing and accommodation in a number of towns. As part of our commitment to support these communities, Australia Pacific LNG partnered with Queensland’s leading not-for profit housing provider, Horizon Housing on two initiatives to help relieve housing pressures.

The $2.05 million affordable housing project at Miles in South West Queensland, launched in March, features townhouse style homes designed for young couples, families and individuals. Two of the nine dwellings were sold, with the proceeds reinvested in similar developments.

The remaining seven houses are managed by Horizon Housing and are rented at a significant discount to market rates to those working in service industries, and affected by rising housing costs.

The second initiative located at Roma, features a $1.75 million development offering a range of housing options. These 10 homes are expected to be completed and ready to be occupied by September 2014, with an additional eight townhouses expected to be built by September 2015.

The projects are part of Australia Pacific LNG’s multi-million dollar commitment to support gas field communities with affordable housing and relieving accommodation pressures throughout the region.

“This is the first time that a major energy company and a private non-profit housing provider have joined forces to fund and develop new affordable homes for the benefit of the wider community, and this approach could easily serve as a template for other projects across the country,” said Horizon Housing’s Chief Executive Jason Cubit.

12:55Pm

Donna and Cody Yesberg move into their new home which is part of an affordable housing project with Horizon Housing.

Housing

$7.0m +Committed to projects improving access to affordable housing.

4 things we do to manage impacts on housing1. Build temporary camps to

house our construction and operational workforce.

2. Offer rental support programs and subsidised rental properties for low to medium income earners.

3. Build new affordable housing with not-for-profit Horizon Housing.

4. Partner with regional councils to enable new housing developments through investment in infrastructure.

Watch more online

Joining forces to build new homes for the community


More than $12.3 billion has been spent on goods and services across the entire Australia Pacific LNG project, the majority of which has occurred in Australia.

Sharing economic benefi tsCreating value for communitiesWhen we develop large energy projects, we create considerable economic value sometimes in the billions of dollars, for Australians. We do this by:

• employing a large number of workers;

• creating demand for and procuring goods and services from suppliers;

• paying taxes and royalties; and • investing in infrastructure and

regional development during both the construction and operation of projects.

We also contribute financially to the communities where we operate by tailoring our investment to match the unique needs of each community.

Local projects, local businessesWhile we contribute to each community where we operate, currently our biggest contribution is through the Australia Pacific LNG project. The nature and size of the project connects us with many communities across Queensland, as well as bringing together regional suppliers throughout the Surat region, a large engineering and support base in Brisbane, and supply chain partners in most Australian states and territories. We believe that our success relies on an ability to build a competitive local supplier base, deliver lasting socio-economic benefits and develop local talent.

In 2009, the project developed an Australia Industry Participation (AIP) Plan in accordance with the requirements of the Enhanced Project By-Law Scheme. In August 2012, an AusIndustry determination was made indicating that the project’s AIP Plan had been successfully implemented. In November 2010, the Queensland Government Coordinator–General’s report on the project’s EIS, recommended the development of a Local Content Strategy for the life of the project that is consistent with the principles of the AIP Plan.

The Local Content Strategy objectives are to create opportunity for local businesses to participate in the project, build their capability, support training and development initiatives and ensure project contractors and suppliers are aligned with the project’s sustainability principles.

There are a range of things we do to share economic value with our stakeholders. The online Industry Capability Network (ICN) allows potential suppliers to register interest in the project and access information on tender opportunities. Currently, there are 1,920 suppliers registered, with 50 per cent identifying Queensland as their primary location. The ICN complements our dedicated Australia Pacific LNG website, advertising employment opportunities and our community commitments.

We employ a dedicated Local Content Team, which works with and educates suppliers on how to become part of the supply team, while the Building Regional Capability Program ensures local suppliers are competitive and therefore in the best position to compete for work with the project.

Supplier Information Sessions also improve understanding of our procurement processes and showcase opportunities for businesses to participate. A total of 4,700 people have attended 41 supplier information sessions in nine council areas including: Maranoa, Western Downs, Biloela, Toowoomba, Gladstone, Miles, Brisbane, Sydney and Melbourne.

At June 2013, $12.33 billion had been spent on goods and services across the entire project, the majority of which has occurred in Australia.

Lasting valueWe have established the Tier Barometer Assessment Tool, which helps potential suppliers measure their capability and the tool can also create a roadmap showing the additional skills and training that may be needed to successfully tender for work. To date, 875 suppliers have used the Tier Barometer Assessment Tool to assess their position along the project’s supply chain.

Back in 2011, we formed a strategic partnership with Construction Skills Queensland (CSQ) to ensure there were enough people with the appropriate skills to support the construction phase of the project. Many contractors working on the construction phase of the project have accessed funds for training including MCJV and East Coast Pipelines. Some construction contractors are accessing training funds directly through CSQ, for example Bechtel and Leighton Contractors.

Substantial employment opportunities have been created through the project, and this is benefiting many regional communities. Currently, the project is at the peak of construction employing approximately 10,000 people. Once complete, the operations will provide ongoing employment for approximately 1,000 people.

Our Skills Scholarship Program, now in its seventh year, provides financial support to local apprentices to build and retain a range of skills needed in key gasfield and pipeline communities including Miles and Chinchilla. We partner with local businesses, such as hairdressers, registered clubs and local mechanics to provide apprentices with up to $13,500 (before tax) in scholarship payments to help with their training costs while they complete their training in the local area. Since it began in 2007, the program has provided more than 100 scholarships to the value of $1.35 million.

Economic benefits at a glance

Our PurposeCreate and share economic value generated by our operations and development projects.

Laws & Regulations

The Australian Industry Participation Plan, and Australia Pacific LNG’s Environmental Impact Statement guide the ways we create value from our activities.


We employ a dedicated Local Content Team, hold regular supplier information sessions, and our Tier Barometer Assessment Tool helps suppliers assess their capabilities and what they need to do to tender for work.

Our Approach

A Local Content Strategy guides how we create opportunities for local business to participate in the Australia Pacific LNG project.

Our Performance

10,000+ currently employed on the Australia Pacific LNG project.

$1.35 million provided to support apprentices in communities surrounding the project since 2007.


A key issue facing local communities across regional Queensland is the ability to retain school leavers in the area.

While there is a desire to stay local, they sometimes need to leave for bigger cities in search of training, job and career opportunities.

With input from local community members and businesses, Origin developed the Community Skills Scholarship program in Queensland, where our biggest project the Australia Pacific LNG project, is located.

Our scholarships are designed to help people realise ambitions, kick start careers, and ease training costs by offering a financial incentive to individuals who take up a trade and the local businesses who employ them.

Since being introduced in 2007, the program has provided more than 100 scholarships across school based, mature age and indigenous males and females to the value of $1.35 million. Scholarships in a range of professions have been awarded including chefs, electricians, hairdressers, carpenters and gardeners, giving skills and jobs to the next generation of workers in local communities.

The MacDonnell family from Roma are a great example of how the program works, with 17 year old Shannen joining her older brothers Scott, 19, and Ashley, 21, as previous scholarship winners.

Shannen is a school-based apprentice with Roma business O&G Joinery and is studying Certificate III in Cabinetmaking and was very pleased to win the scholarship.

“It will really help me throughout my apprenticeship with costs and transport – when I finish school I’ll have to start paying board at home,” Shannen said.

Proud parents Kelly and Terry said the fact that all their children had won scholarships and were able to find work locally helped them to stay in their local community.

“The scholarship is great for young apprentices and in the long run it’s been really good for us as a family,” Mrs MacDonnell said.

11:36am

Our Skills Scholarship Program provides financial support to local apprentices like Shannen MacDonnell to build and retain a range of skills needed in regional communities.

Providing skills to communities

Watch more online


Origin is the leading Australian energy provider. We have 4.3 million customer accounts across electricity, natural gas and LPG. We are also one of the largest power generators, representing approximately 13 per cent of total National Electricity Market (NEM) capacity.

We therefore play an important role in the delivery of reliable, affordable and cleaner energy supply which millions of households rely on every day.

Over the past year, we faced some social challenges in the delivery of energy, particularly as we sought to help our customers manage rising costs. This created a range of associated challenges for our business, including the delivery of competitive tariffs and offers, assisting those in hardship and improving customer service.

Customer careMeeting our customers’ needsLike all large customer-facing businesses, Origin’s success relies on our ability to understand and respond to our customers’ needs, and to provide efficient and effective service.

In recent years, we have sought to enhance our ability to achieve these objectives by upgrading to a new SAP-based billing and customer relationship management system. We experienced short-term implementation challenges this year, which resulted in billing delays affecting some customers. Late bills peaked at 180,000 in September 2012, but improved to 24,000 by year end, in line with the historical average.

We now have a platform to simplify our processes, more effectively manage enquiries from our customers, and offer new and more targeted products and services with the objective of building better, longer-term relationships. Approximately 3.3 million customers are now being serviced on our billing and customer management system, and by the end of October 2013 all residential, as well as small and medium business customers will have been migrated to this platform.

A national framework for consumer protectionThe provision of energy in Australia is highly regulated, and includes the National Energy Retail Law, National Energy Retail Rules and National Energy Retail Regulations. From 1 July 2012, the Australian Energy Regulator took over national responsibility for consumer protections under the National Energy Customer Framework (Customer Framework), replacing previous state and territory responsibilities. The Customer Framework sets out key protections and obligations for energy customers and the businesses they buy their energy from, including the provision of financial hardship programs, regulations related to credit, collections and disconnections, and disclosures around energy prices, terms and conditions.

South Australia, the Australian Capital Territory and New South Wales have commenced operating under the new framework, while Victoria is expected to standardise the framework with existing retail codes in early 2014. Queensland has indicated plans to adopt the framework during 2014.

Over and above legislation and regulatory requirements, Origin has implemented Best Practice Procedures (BPPs) across our Contact Centres to simplify, standardise and improve the customer experience. The BPPs include standard steps and tips to handle customer payments, moves and cancellations, account maintenance, high bills and price comparisons. They were designed by our front-line employees, and provide a consistent framework to enable us to minimise the effort that customers need to expend when dealing with us, and empower front-line staff to resolve calls in the first instance. Adherence to the BPPs is supported by training and coaching by team leaders.

Origin’s front line customer service teams are trained to identify any special needs. This includes identifying customers who rely on life support equipment, and undertaking the necessary steps to manage these circumstances in line with applicable regulations and our duty of care.

Additionally, the Origin Sales Capability Framework (OSC) has been specifically developed to support our sales teams to ensure they have the right skills, processes and resources to deliver sales excellence. The framework provides us with an organisation-wide sales language and standards.

Collectively, these initiatives helped to deliver a 5 per cent improvement in customer satisfaction for 2013, when compared to the prior year.

Providing greater choice in products and servicesOur Care and Sales teams work to understand our customers’ needs and match them to the appropriate products and services. By listening to our customers, understanding their needs and using this to drive product innovation, we have developed the leading portfolio of efficient and low carbon energy solutions in Australia.

Deliveringenergy

5 % Customer satisfaction

Improvement in 2013

Our leadership in low carbon energy solutions• Largest green energy provider

with 530,774(1) customers on GreenPower or Green Gas products.

• Installed 10,560 rooftop solar photovoltaic systems across Australia in the 2013 financial year with a capacity of 30 MW.

• First to introduce a residential and business solution for charging electric vehicles.

Customer care at a glance

Our PurposeDeliver a positive customer experience by understanding and meeting their energy needs, and providing efficient and effective service.

Laws & Regulations

National Law has established a competitive market for electricity and gas, with additional consumer protections in the National Electricity Customer Framework.


We have best practice processes to simplify customers’ dealings with us, and our front-line people are specially trained to manage special needs and financial hardship.

Our Approach

We evaluate a customer’s individual needs and match them to the right product and solutions, including billing and payment options.

Our Performance

Customer satisfaction improved 5% compared with the prior year.

We recorded 8.0 Ombudsman complaints per 1,000 customers.

(1) After publication of this Sustainability Report, Origin identified that its GreenPower customer numbers had been overstated during three successive quarters in 2013. Origin has restated its GreenPower customer numbers in this, and the online Sustainability Report and corrected the reporting methodology.


We also seek to lead in the provision of energy efficiency advice and products, with our efforts promoted to our customers via a number of channels including bill inserts, our website and energy ambassadors.

The implementation of our new SAP system has also provided new capabilities to deliver innovative products and services including online self-service and e-Billing. This is already simplifying customers’ experience in dealing with us, and among other things allows them to manage their accounts and payments online in a secure environment, and review energy usage, in their own time without the need to receive the traditional paper bill.

Working with customers to resolve issuesOpportunities for proactive identification and resolution of current or potential disputes with customers are embedded within our customer management system. Complaint Resolution Performance Training forms part of a thorough training framework to equip our Customer Service Agents with the right skills and knowledge to meet customer needs.

If not satisfied with the outcome – or indeed at any point – the customer may refer the dispute to the relevant Ombudsman in their respective state. The Ombudsman can either open an enquiry case or an investigation case. An enquiry case is where Origin and the customer work together towards resolving the dispute.

For more complex matters, the Ombudsman may seek a written resolution. From this point forward the process is very much one mandated by the Ombudsman acting under its charter.

The level of Ombudsman complaints rose compared to the previous year, from 7.2 per 1,000 customers, to 8.0 per 1,000 customers. A key driver of the increase was that a significant number of our customers in New South Wales were migrated to our new billing system and therefore some experienced late bills. Release of these late bills within a short period of time also led to a spike in calls to our contact centre, with pressure on capacity to maintain our service commitments. We continue to address the underlying causes of the complaints and also to enhance our ability to resolve disputes.

The rate of increase in energy costs (see Addressing energy affordability section) continues to drive customer complaints providing further rationale for our efforts to inform and empower customers through initiatives like Energy Explorer, a website explaining in simple terms how energy is sourced, produced, delivered to customers and the drivers of price increases.

Overcoming barriers to contactFor customers from a non-English speaking background, or those who may have a disability which makes direct contact with Origin more difficult, we:

• employ a number of multilingual staff, and for the Power On hardship program ensure access to multilingual financial counselling and energy auditors;

• print Interpreter service contact details on bills in seven languages; and

• provide large print and online versions of bills to assist low vision customers.

Setting tariffs for long-term sustainable outcomes In the markets in which Origin sells energy in Australia, there is a mixture of tariffs determined by regulators (regulated tariffs) and tariffs determined by retailers (deregulated tariffs).

Deregulated tariffsThe process by which we determine our deregulated tariffs is an important element of our retail business. The tariffs we set for our residential and business customers, typically expressed as cents per kilowatt hour for electricity or cents per megajoule for gas, are determined by considering several elements. These include the costs to generate energy, to supply it to homes and businesses via networks, as well as the retail costs to service customers.

We believe our stakeholders are best served over the long-term by the setting of sustainable tariffs, which consider long-term energy procurement costs, future investments in generation required, and provision of an improved range of products and services to customers.

At the same time, we should be allowed to make an appropriate return, reflecting our investment and performance.

In Australia there is a mixture of tariffs determined by regulators and retailers.

10:27am

A customer calls our call centre, and one of our employees uses our Best Practice Procedures to quickly resolve their query.

Listen to a podcast about customer care online

30 Delivering energy

The electricity and gas markets are highly regulated, and so even where retailers set tariffs without oversight by regulators, there are still substantial compliance requirements for notifying regulators, including posting information to their comparison sites, and communicating price changes to customers. We are also proactive in keeping other key stakeholders informed, particularly governments and regulators.

To ensure compliance, as well as deliver on our own additional due care commitment, we have established a Markets Strategy Committee. The role of this Committee is to protect the integrity of our pricing model and ensure the required analysis and stakeholder consultation takes place before tariffs reach the marketplace.

Regulated tariffsWhere tariffs are subject to regulation, such as in Queensland and New South Wales, Origin models tariffs according to the methodology prescribed by the regulator in New South Wales and receives actual end tariffs from the regulator in Queensland. We also provide input to their decision making process through formal submissions.

Regulated tariffs are typically published in the Government Gazette and/or advertised as a public notice in major state newspapers. We inform customers of price changes directly through bill messages or direct mail.

OffersOur offers to customers consist of a tariff as well as other features. Some products such as eSaver and Daily Saver Plus may include discounts against standard rates, with conditions specifying a minimum term. FlexiChoice allows customers to choose the term of their contract without being subject to exit fees. A fixed rate product, RateFreeze, offers customers the choice to lock in their tariff for a two-year term.

Addressing Energy affordabilityThe challengeEnergy is an essential service which consumers and businesses rely on every day to light homes, and power industry. Historically, Australia has enjoyed among the cheapest energy prices in the developed world, largely due to our access to abundant natural resources.

Customers’ ability to manage their energy payments is influenced by many factors including the frequency and timing of bills combined with demands on household budgets. When customers receive a bill they were not expecting, either due to cost or timing, it’s commonly referred to as ‘bill shock’.

Prices have significantly increased over the past five years, driven mainly by investment in the poles and wires networks that transport electricity, as well as climate change policies designed to help Australia reduce its carbon emissions. As a result, energy affordability has become an important issue for an increasing number of our customers. The focus of our efforts has been to put control back into customers’ hands. We do this by informing customers about the drivers of price increases through initiatives like Energy Explorer, and solutions and services that enable greater visibility of energy use and costs like Origin Energy Manager and My Account.

There is also a particular set of challenges for vulnerable customers who may be experiencing financial hardship, and we have a specialist team to identify and manage these scenarios through our Power On program.

Solutions to give customers greater controlKey to Origin’s ability to understand and respond to our customers’ energy affordability needs is the way we capture, interpret and act on the information they provide. We have introduced new processes across our Contact Centres, based on industry best practice, which have enabled us to simplify customer engagement, ensure our agents can resolve most issues quickly, and that more complex or sensitive matters are effectively managed by specialist teams within the business.

Over a number of years Origin has been undertaking research to better understand the customer experience and particularly energy affordability.

There are four ways which we currently help customers address energy affordability:

1. Better informing customersIn the past year, we have increased our efforts to explain to customers the structure of the energy industry and the drivers of price increases. This was supported by research indicating that most customers do not know why their energy prices have risen so substantially.

In May, we launched an upgrade to how we communicate via digital channels, driven by the premise ‘Knowledge is Power’. We created an online information portal – Energy Explorer – which contains easy to understand information on a range of energy topics, including price increases. This represents a change in how we engage with consumers, and it was evident in the response that there is a genuine hunger for information about energy. This activity is discussed in more detail in a story on page 33.

Energy affordability at a glance

Our PurposeEmpower customers to control their energy use and costs by providing relevant and practical solutions, and support those in hardship.

Laws & Regulations

National Law has established a competitive energy market, with additional consumer protections in the National Electricity Customer Framework.


We have created online tools such as Energy Explorer, My Account, Energy Manager and Energy Monitor to provide customers greater visibility and control.

Our Approach

We seek to avoid bill surprises through increased knowledge and visibility, and appropriate payment options.

Our Performance

60,000 Victorian customers have access to detailed consumption data through ‘Energy Manager’.

17,600+ customers in financial hardship being assisted.

We have increased our efforts to explain the energy industry and drivers of price increases.


2. Providing greater visibility and control

In August 2012 we introduced Australia’s first mass-market energy management solution to our customers in Victoria. Origin Energy Manager helps customers better understand and manage their energy use. Customers in Victoria with a fully operational smart meter can view their energy use online and by using this information, learn how they can save energy in near real time.

This year, we went a step further, offering eligible customers in Victoria a free in-home Energy Monitor which provides information about energy use and costs at the touch of a button. We also recently introduced on My Account a feature that enables our customers in other states to understand and manage energy use through establishment of a home profile. Collectively, these solutions are providing customers with unprecedented visibility of how and where they use energy in the home.

The introduction of flexible pricing options in Victoria in September 2013, will leverage customer visibility of their energy use, and incentivise customers to use electricity at different times so they can benefit from cheaper tariffs.

On a macro level, it also helps reduce the pressure on the system during times of peak demand, and can therefore help delay the need for new investment in the electricity network. This could alleviate one of the factors putting upward pressure on energy prices.

To date, Victoria is the only state that has rolled out smart meters on a large scale. Other states and territories have varying plans and support for smart meters.

3. Offering Payment plansWe offer a range of different products to help customers manage their energy costs. For example, EasiPay helps take the surprise out of bills, by averaging out usage over a 12 month period. Customers can set up their account to pay either monthly, fortnightly or weekly instalments by direct debit – instead of the standard quarterly bill and payment. This ensures a smooth billing cycle, with more regular, smaller payments that can help with budget management.

4. Assisting those in hardshipWe are required by law to design, implement and maintain a customer hardship program, which is approved by the Australian Energy Regulator. We operate a mature and robust program called Power On, which identifies and responds to customers experiencing financial difficulty. Power On offers short-term relief, payment flexibility and guidance to help manage energy costs. Our Customer Advocacy team also ensures the customer is aware of, and able to access relevant concessions and grants available in each state. In recent years, the number of disconnections for non-payment has risen, but so too has the number of customers we are actively assisting with payment support.

At the end of the 2013 financial year, 17,615 customers in financial hardship were being supported. Of these, 12,008 were being financially supported through Power On, an increase from 11,310 in the prior year. A further 4,623 customers were being supported through Country Energy’s hardship program and a further 984 Integral Energy customers in Queensland were being supported on a hardship program. As these customers have not yet been migrated to Origin’s billing system, their hardship requirements are still managed through the legacy systems. Origin’s hardship program and our payment support through Power On amounted to more than $4.4 million in 2013 through a combination of incentive payment plans and energy efficiency programs. We also carried out more than 900 home energy audits, assisting our customers to identify energy saving opportunities and providing more than $75,000 worth of energy efficiency items including retrofits and replacement appliances.

We have trained our front-line employees to better identify customers who are experiencing financial hardship. They ask specific questions which helps ensure finite financial support is directed to those most in need.

Customers being assisted through hardship programs(1)

2013 2012 2011

17,615 11,310 8,537

(1) 2012 and 2011 exclude Country and Integral Energy customers.

11:50am

Customers access our Origin Energy Manager to check in on their energy use and costs.

Although not all bills are the same, generally, they cover the following costs:

Costs

Costs reflected in your electricity bill

Networks: Paying for the maintenance, upgrading and operation of the poles and wires.

Generators: The cost of generating electricity.

Retail services: Managing your accounts, billing and customer service.

Government green schemes: The national carbon price; Renewable Energy Target and other state-based schemes such as solar feed-in-tariffs.

GST: The goods and services tax.

45%

20%

10%

15%

10%



About half of all Australians have sought more information on energy, but relied on a Google search and not their energy provider, according to research commissioned by Origin earlier this year.

This made us realise that the energy industry has not done the best job in engaging with consumers. We decided this has to change.

On 1 May 2013, we launched an upgrade to the way we communicate information via digital media channels, which are now the preferred information resource for a large number of people.

Our activity included an interactive campaign based on the premise ‘Knowledge is Power’, which puts energy information directly in the hands of Australians.

We created Origin Energy Tales, presenting bite-sized pieces of information about energy on wrappers containing chewy caramels. Each of the 25 stories was designed to entertain and inform, while revealing a different fact about Australia’s energy industry. The campaign aimed to encourage Australians to start an energy conversation.

Origin Energy Tales were distributed at many major CBD and metropolitan locations, supported by advertising, and generated a social media buzz. Around nine million Origin Energy Tales were distributed over two weeks and more than 65,000 people visited the campaign website over a six week period.

Underpinning the campaign was the creation of Energy Explorer, our online energy knowledge hub. Energy Explorer provides interesting and up to date energy information through a mix of clear and simple explanations, diagrams, videos and links to other material from around the world. Topics covered include energy pricing, climate change and managing energy use.

Energy Explorer remains a popular source of interesting energy information, simply presented and available to anyone looking to learn more about energy in Australia.

And as for Australia’s conversation about energy; it’s only just begun.

For more information originenergy.com.au/energyexplorerknowledgeispower.com.au

07:00am

We started handing out almost nine million Origin Energy Tales

to customers on 1 May, with bite-sized pieces of

information about energy.

Our new knowledge hub Energy Explorer provides interesting energy information through clear explanations, diagrams and videos.

When it comes to energy, knowledge really is power


Media, politicians and customers have all been talking about the rising cost of electricity over the past 12 months. Our own research shows that customers want more information about how they can control energy costs.

To help, Origin launched Origin Energy Manager at the end of 2012 in Victoria – the first residential solution to provide customers with detailed usage and cost breakdowns, as well as future bill estimates.

Accessed securely via the internet, Origin Energy Manager enables residential customers to:

• view electricity used as recently as 24 hours ago, with data collected in 30 minute increments and presented hourly. That creates a usage profile from 48 reads a day or 17,520 reads per year, versus the traditional four bill periods each year;

• receive an indicative projection of their next electricity bill based on their current usage and individual tariff structure;

• set an energy budget and measure progress towards an energy saving goal; and

• create a personalised energy savings plan to assist in reaching goals, including a range of energy efficiency tips.

During the year, eligible Victorian customers were also the first to get access to Energy Monitor – a device that displays information about energy use and cost within seconds. The size of a smart phone, Energy Monitor sits magnetically on a customer’s fridge and receives data wirelessly from their smart meter.

Origin Energy Manager and the Energy Monitor are complementary products, each offering different insights to help customers with visibility and control of their energy usage. Both are dependent on the availability of smart meters of which two million had been installed in Victoria at the end of May 2013.

Origin Energy Manager is available for free within Origin’s My Account online self service tool for eligible Victorian customers. The Origin Energy Monitor is exclusive to Origin, and is provided at no additional cost to eligible Victorian customers who take up and remain on the Origin Smart Daily Saver Energy Plan for 12 months.

09:09am

A Victorian family uses their Energy Monitor to get instant information about their energy use in the home.

We are giving our customers unprecedented visibility of energy use and costs.


Helping customers take control


Emissions from power generationManaging our emissionsAs one of the largest power generators in Australia accounting for approximately 13 per cent of total NEM capacity, the emission of greenhouse gases into the atmosphere is an important environmental consideration for our business. While the reliable supply of energy underpins our modern economy and standard of living, burning natural gas or coal to generate electricity also creates emissions that impact on our climate. We therefore closely manage and monitor the emissions associated with our power generation.

Cleaner forms of power generationOrigin’s 6,010 MW of power generation is diverse across fuels, including natural gas, black coal, wind and hydro. Over time, we have built our portfolio to manage risks associated with progress towards lower carbon energy supply, and as a result the emissions intensity of our power generation activities has historically been below the NEM average.

Origin operates a wind farm which produces energy with zero emissions, and has several other power stations fuelled by natural gas, which is considerably cleaner than coal. For example, Origin’s combined cycle gas-fired power station Darling Downs has an emissions intensity 0.42 tCO2-e/MWh, which is less than half of the most efficient coal-fired power station in Australia at Tarong in Queensland with an intensity of 0.86 tCO2-e/MWh(1). It is also only about a third of the intensity of the average brown coal power station at 1.22 tCO2-e/MWh.

Reporting our emissions Emissions reporting is highly regulated in Australia in line with the Intergovernmental Panel on Climate Change (IPCC) reporting framework. Origin is required to comply with several pieces of Commonwealth and state regulation including The National Greenhouse and Energy Reporting Act 2007 (NGER Act) and The Clean Energy Act 2011. In managing this process we engage third party auditors to provide assurance over emissions data.

The Clean Energy Act and the NGER Act are both central elements of the Australian Government’s policy response to climate change. We talk more about these policies on page 43.

During the year, output from our portfolio of generation assets increased by 7 per cent, from 15.7 TWh to 16.8 TWh. This reflects higher output from all of our peaking plants given constraints in the market, partly offset by lower output from Darling Downs and Eraring Power Station, which experienced extended outages.

The increase in generation output impacted the level of greenhouse gas emissions produced for the year. Emissions from power generation increased from 11.77 Mt CO2-e to 12.40 Mt CO2-e.

The emissions intensity of our power generation was steady year on year at 0.74 tCO2-e/MWh. This year for the first time Origin has included Eraring Power Station and Shoalhaven Scheme emissions in our Sustainability Report. While Origin did not assume outright ownership of Eraring Energy until 1 August 2013, we owned the output of the power stations for the 2013 financial year under the previous GenTrader Arrangement with the New South Wales

Government. As Origin is the liable entity for these power stations under the Clean Energy Act, we have included the emissions in our report this year. We have also restated last year’s emissions to reflect the emissions of those assets in the prior year.

The inclusion of Eraring Power Station and Shoalhaven Scheme increased Origin’s emissions intensity. Without these power stations, Origin’s emissions intensity would have been 0.47 tCO2-e/MWh. The emissions intensity of Origin’s portfolio continues to compare favourably to the NEM average of 0.87 tCO2-e/MWh.

Other reportingUnder the National Pollution Inventory Scheme (NPI), Origin is also required to report annually on its oxides of nitrogen (NOx) and sulphur (SOx). NPI reporting for all generation sites is undertaken and centrally coordinated by the environmental team within our Energy Markets business.

Origin is also a participant in CDP, an international, not-for-profit organisation providing the only global system for companies and cities to measure, disclose, manage and share vital environmental information. We have been reporting our carbon data to CDP since 2007.

Over time, Origin has built a generation portfolio that is less emissions intensive than the NEM average.

05:13Pm

Our Darling Downs combined gas-fired power station is one of

the cleanest baseload power stations in Australia in terms of

carbon emissions.

Power emissions at a glance

Our PurposeClosely manage, measure and report the emissions associated with our power generation activities.

Laws & Regulations

Emissions reporting is highly regulated at a national level, and includes the National Greenhouse and Energy Reporting Act 2007 and the Clean Energy Act 2011.


Each year we voluntarily report our emissions to CDP and have been doing so since 2007.

Our Approach

We have built a portfolio of low carbon power generation assets including natural gas and wind with an emissions intensity below the NEM average.

Our Performance

Emissions intensity of 0.74 tCO2-e/MWh is below the NEM average of 0.87 tCO2-e/MWh.

(1) Source data based on sent-out production, from 2009 ACIL Tasman Report.


Future energy solutions

Origin delivers energy today, and we also search and innovate to create tomorrow’s energy solutions. We do this by exploring for and investing in new energy opportunities that will enable us to provide affordable, efficient and cleaner energy in the future. In considering the development of energy sources for the future, we are faced with social, economic and environmental challenges. Currently, the primary challenge we face is meeting society’s expectation for cleaner forms of energy, and the often competing objective of ensuring energy supply remains reliable and affordable for customers.

Tomorrow’s energy solutions As well as delivering customers a secure, reliable and affordable supply of energy today, we continue to carefully examine a range of opportunities – both domestically and further afield – that will enable us to create tomorrow’s energy solutions.

We continue to progress a range of future energy opportunities, with a primary focus on natural gas and renewable fuels including hydro and geothermal.

Meeting the world’s growing demand for energy Energy is the cornerstone of human development. History has shown that societies with access to a reliable and affordable energy supply grow and prosper. This critical role of energy in society is evidenced by the continued growth in global energy demand.

In its 2012 World Energy Outlook, the IEA forecast global energy demand to grow by more than one third in the period to 2035, with China, India and the Middle East accounting for 60 per cent of the increase. Despite the growth in low carbon sources of energy, fossil fuels are expected to remain significant in the global energy mix.

The challenge society faces is to make energy available as widely as possible so it supports sustainable human development, while at the same time lowering the carbon emissions associated with energy supply to help address climate change. As an energy company, we have an important role to play.

Natural gasOrigin has extensive experience in the development of both conventional and unconventional natural gas resources in Australia and New Zealand. We are increasingly looking to apply this knowledge to new opportunities in Australia, New Zealand and internationally.

For the foreseeable future, natural gas will continue to play a critical role in the world’s energy supply. As a cleaner burning fuel, it produces up to 70 per cent less carbon emissions than coal, when used for power generation.

The IEA has projected that natural gas demand will continue to grow. In China alone, gas consumption is expected to increase from around 130 billion cubic metres (bcm) in 2011 to 545 bcm in 2035. Unconventional gas accounts for nearly half of the increase in global gas production to 2035, with most of this coming from China, the United States and Australia.

Natural gas has been in use by societies for more than a century. Recently, unconventional natural gas – gas that has previously been inaccessible by conventional methods – has become economically viable, a phenomenon starkly observed in the United States. The development of shale gas resources in particular has created substantial social and economic benefits in the form of jobs and investment. The gas is also being used for power generation, displacing more emissions intensive coal-fired generation. This has been a major contributor to probably the most significant carbon reduction achievement in the world. Emissions from electricity generation in the US have declined by more than 10 per cent from 2007 to 2011. Increased use of gas for power generation helped total US carbon emissions decline by 550 million tonnes in that four year period, from 7,250 MtCO2-e to 6,700 MtCO2-e (1). This is equivalent to the carbon emissions of Australia’s total economy.

(1) EPA 2013.

For the foreseeable future, natural gas will continue to play a critical role in the world’s energy supply.

UP to

70 %Natural gas

Less emissions from natural gas than coal when used for power generation.

36 Future energy solutions

Against this global context, Origin will continue to pursue natural gas opportunities for the future. Within Australia, this includes the Ironbark CSG project in Queensland, and the Halladale Black Watch conventional gas project in Victoria, both of which continue to be progressed towards final investment decisions in the medium-term. In order to grow our gas reserves position, we are undertaking targeted exploration opportunities in the Bowen and Surat basins in Queensland, the Cooper/Eromanga basins in Central Australia, the Otway Basin Offshore Victoria and the Bonaparte Basin in waters off the Northern Territory. Theses opportunities will be in a mix of both conventional and unconventional targets. Internationally, we are also undertaking a targeted program of exploration activities in New Zealand, Vietnam, Kenya and Botswana.

Collectively, these opportunities position Origin strongly to help meet the growing global demand for cleaner, transportable natural gas.

Renewable energy opportunitiesIn Australia, Origin continues to progress towards a final investment decision for the Stockyard Hill Wind Farm in Victoria. When developed, this will be one of the largest wind farms in Australia.

Origin is also developing a select portfolio of renewable energy opportunities in international markets with a primary focus on Chile, which boasts both strong renewable resource potential and growing demand for energy.

In Chile, the rapidly expanding economy is heavily reliant on imported fossil fuels despite the country having potential for geothermal and large-scale hydro development that could deliver energy security , and provide Chile with a strong forward path to achieving sustainable energy output. Origin, along with our joint venture partners, is pursuing hydro and geothermal opportunities that if realised will bring real economic, social and environmental benefits to the nation.

Origin’s hydro opportunities are being developed through Energía Austral, one of Chile’s leading hydroelectric development companies in which we have a 51 per cent interest. After the close of the reporting period, Energía Austral received unanimous approval for its Cuervo hydro project from the Aysén Environment Evaluation Commission. This is an important milestone in the ongoing development of the project towards a final investment decision, however the project now enters a period of appeal and so there remains the possibility this approval may be challenged by certain stakeholders.

Consistent with our strategic focus, Origin is also evaluating a geothermal opportunity in Indonesia. Learn more at originenergy.com.au

The International Energy Agency forecast global energy demand to grow by more than one third in the period to 2035.

09:40am

Through our interest in Energía Andina S.A., we have a portfolio of

12 geothermal exploration projects across northern and

central Chile.


managing our business

Origin is a large business, which employs approximately 6,000 people predominantly across Australia, New Zealand and the Pacific. We employ a similar number of contractors on our various energy developments.

There are a number of activities we need to do well in order to ensure effective management of our business. This includes activities associated with our finance, legal, information technology, people and culture, public policy and other corporate functions.

The activities currently most important to the effective management of our business, are the safety of our people, the Company’s financial performance, our efforts to improve gender diversity and advocating for efficient and effective policy settings from governments.

Keeping our people safeWhy safety is importantAt Origin, safety is our first priority. We have an overriding duty to ensure that our employees and contractors return home safely every day.

Given the nature of our business which requires the use of heavy equipment, land, air and sea travel and the operation of energy production facilities, we are constantly reminded of the inherent risks faced by our people, and those who do work on our behalf.

Our ultimate objective is a zero harm workplace for our employees and contractors.

Creating a safety cultureGiven the importance of safety, a great deal of safe practice is mandated by government legislation, and we take great care to comply with relevant legislation and regulations.

Much of this regulation is industry specific. For example, the largest energy development in which we are currently involved, the Australian Pacific LNG project, is governed by the Queensland Petroleum & Gas (Production & Safety) Act 2004.

Our self-imposed performance requirements have been determined by considering legislation, regulation and industry standards, and the performance outcomes of peer organisations who undertake similar tasks. These performance requirements are then reflected in a range of business-wide standards, Directives and Toolkits to guide safe behaviour.

Our employees and contractors face considerable risks when they do work on our behalf. During the year, two contractors working for Stena Drilling lost their lives in an incident on the Stena Clyde drilling rig, which was drilling a well on Origin’s behalf in the Otway Basin.

Our safety result, which we define as our performance against the Company-wide Total Recordable Injury Frequency Rate (TRIFR), measures our success in reducing the number of work-related injuries and marks our progress towards our ultimate aspiration of zero harm.

This year we recorded a TRIFR of 6.7, a 15 per cent improvement on our previous year’s TRIFR of 7.9 (1). This progress reflects our collective effort on safety, and the effect of some new initiatives introduced to help drive improved performance, even though we fell short of our target of 6.0.

Lost time cases track the severity of injuries occurring in our business, by measuring the injuries that resulted in an employee missing at least one full shift or workday. For the year, there were 40 lost time cases and a total of 486 days of work lost, equating to a lost time severity rate of 18.4 (total days of lost time case/million hours worked). This is a substantial improvement on the prior year, where there were 46 lost time cases and a total of 658 days of work lost, equating to a severity rate of 36.1. We recognise that we must have a determined and ongoing program of work to achieve our safety goals. We introduced a new safety campaign during the year to assist. Our 11 Life Saving Rules set out mandatory “dos and don’ts” to help protect employees and contractors.

These rules address the causes of 35 per cent of the potentially serious or catastrophic incidents in our business and we are putting considerable effort into embedding them across our workforce through a range of leadership, training and communication activities. The Life Saving Rules are designed to hold people to account for their actions, and violation of them can carry serious consequences, including possible termination of employment.

To further encourage a culture and behaviours that will help prevent future injuries, we continued our practice of observations. Observations are acknowledged as a leading indicator of safety performance, and accordingly we set a target of 30,000 for the year. For 2013, we exceeded our target and logged more than 45,000 observations, on topics such as working safely from heights, stopping work if the environment appears unsafe and the dangers of driving at dusk in unfamiliar locations. As we met the annual safety performance target we granted $1,000 in shares to each eligible employee under our Employee Share Plan.

Looking forward, we are focusing on increasing the quality of the observations, and encouraging our employees to have conversations with each other about safe and unsafe behaviours.

Sharing with the communitySafety is not only important for our business, we also look for opportunities to share our safety knowledge with our stakeholders. We funded the establishment of the Surat Basin Rotary Wing Aero Medical Evacuation along with three other LNG projects in Queensland. The service is used for emergencies in remote areas in the Surat and Bowen basins. In the past year, the service undertook 72 missions for the LNG projects and 54 missions for local communities.

(1) TRIFR revised from 8.0 due to retrospective data updates.

Safety at a glance

Our PurposeEnsure the health and safety of employees and contractors and create a zero harm workplace.

Laws & Regulations

Health and safety is highly governed, and we follow industry specific codes including the Queensland Petroleum & Gas (Production and Safety) Act 2004.


Employees are incentivised to have regular safety conversations with each other which we call ‘observations’.

Our Approach

We are building a culture that rewards safe behaviours and encourages speaking up for safety.

Our Performance

45,946 observations recorded in 2013.

TRIFR 6.7, a 15% improvement on prior year.


38 Managing our business

By focusing on what ‘Life Is’ all about, Origin has successfully introduced a set of Life Saving Rules designed to keep people safe from harm.

Within many industries, there are activities where the smallest deviation from procedure could result in serious injury or death. Origin has identified 11 such activities and introduced clear procedures for dealing with those activities.

The Life Saving Rules, launched during our annual Safety Week, are clear, unambiguous and mandatory for all Origin employees and contractors working at sites under Origin’s operational control in Australia and internationally.

General Manager Health, Safety and Environment, David Provan said: “The aim of our Life Saving Rules is to protect and prevent harm to people – we believe the rules can literally save a life.

“To support the roll-out, we launched a ‘Life Is’ campaign to reinforce the message that the reason we are safe is so we can go home at the end of each working day and be with the people we love.

“It is everyone’s responsibility to follow the Rules so they can go home safely each day. Our role as a responsible employer is to make sure the Rules are clear, unambiguous and embedded within our systems.”

During the roll-out of the Rules, managers at every level were accountable for briefing their staff and contractors and reinforcing the importance of individual responsibility for safety. Employees and contractors were also reminded of their authority to stop work if it is unsafe, and that no task should be undertaken unless the person is trained and competent to complete that task.

These briefing sessions generated positive conversations and increased awareness of how the Rules applied to individuals and their teams. Teams identified any barriers to compliance, which were subsequently addressed.

As failure to follow the rules could lead to serious injury or death, breaches of the rules attract serious consequences, up to and including termination of employment. Every breach is investigated and Origin’s disciplinary procedures and consequence framework for breaches are readily available for all employees.

08:19am

01. A Toolbox talk commences at one of our sites in Queensland, where our people share stories

on how to stay safe at work.

02. Our 11 Life Saving Rules.

The aim of our Life Saving Rules is to protect and prevent harm to people. We believe the rules can literally save a life.

02

01

Life Saving Rules

Life Saving Rules and icons © copyright International Association of Oil & Gas Producers.


New bank loan facility secured.

$7.4bnFunding Australia Pacific LNG

Financial performanceThe 2013 financial year was a more challenging one for Origin.

In particular, a very competitive operating environment and the impact of past regulatory decisions regarding electricity pricing hindered the performance of our Energy Markets business.

Origin’s key financial indicators for the 2013 financial year were:

• Statutory Profit of $378 million decreased from $980 million in the prior year.

• Underlying Profit of $760 million decreased from $893 million in the prior year.

• Underlying EBITDA of $2.18 billion decreased from $2.26 billion in the prior year.

• Underlying Earnings Per Share of 69.5 cents per share (cps) decreased from 82.6 cps in the prior year.

The total dividend payable to shareholders for the 2013 financial year was 50 cps, in line with the 2012 financial year. The dividend franking level for the year was 50 per cent compared with 100 per cent in the prior year.

As a result of utilisation of available tax losses and the impact from development projects, including Australia Pacific LNG, the Company does not expect to have sufficient franking credits to frank the final dividend.

Strong business fundamentalsDespite the challenges impacting Energy Markets during the period, stronger contributions from all other parts of Origin – including Exploration & Production, LNG and Contact Energy – highlighted the Company’s robust fundamentals.

In addition, the Australia Pacific LNG project, in which Origin is a 37.5 per cent shareholder, made significant progress during the year and the project is on track to deliver first LNG by mid 2015.

To support Origin’s Australia Pacific LNG funding commitments, the Company raised more than $5 billion during the period to lengthen debt maturities and improve its liquidity position. In August 2013, Origin entered into a new $7.4 billion bank loan facility to refinance all existing bank debt and establish the Company’s funding position post completion of Australia Pacific LNG.

Future prospectsThe highly competitive environment in the Energy Markets business in the 2013 financial year has resulted in a higher level of locked in discounts which will delay recovery of earnings in the 2014 financial year. However, there are a number of improving trends that make us optimistic about our future prospects.

In Energy Markets, we have stemmed customer losses experienced in past periods, our investment in new billing systems has started to drive improved operational performance, and our gas portfolio is positioned to capitalise on rising demand for natural gas. When Australia Pacific LNG commences LNG production by mid 2015, Origin expects strong growth in earnings and cash flow to support the continued growth of the Company.

More details about Origin’s 2013 financial performance can be found at reports.originenergy.com.au

11:42am

Managing our business requires us to buy and sell power, natural gas, coal and carbon emission-related products.

When Australia Pacific LNG delivers first LNG by mid 2015, Origin expects strong growth in earnings and cash flow.


achieving Gender diversityDiversity underpins successful organisations At Origin, we believe in treating our people fairly and equitably. We place gender at the heart of our diversity agenda. Women make up roughly half of our society, roughly half of our customer base and at Origin they make up 40 per cent of our workforce.

We continue to focus on ensuring fair representation and equal treatment of women throughout all levels of our workforce.

Creating a fair and equitable workplace Australian law governs the fair treatment of workers, by preventing and eliminating unlawful discrimination and harassment on the basis of a variety of factors, some of which include gender, race, nationality, age, pregnancy, political affiliation and religious beliefs. Origin also has a Diversity and Inclusion Policy that applies to all aspects of employment, and all employees.

However, at this time there are no formal laws or regulations that govern the representation of women in the workforce. As a result, there are a number of things we do voluntarily to increase the representation and equitable treatment of women at Origin.

As part of these efforts, we have committed publicly to three voluntary targets:

• continue to deliver equal average pay for men and women at each job grade;

• improve our retention of women, with a target to reduce our turnover rate among women in senior professional and management roles by 15 per cent in the 2014 financial year; and

• increase the number of women in senior management, with a target to improve our rate of appointment of women to senior professional and management roles by 15 per cent in the 2014 financial year.

Our Diversity Council, chaired by the Managing Director, meets regularly to oversee activity in the area of diversity and measure progress against our stated targets.

Our performance in 2013We have performed well across some, but not all of our target areas in the 2013 financial year. Once a year the Company undertakes a comprehensive review of all aspects of remuneration. In the 2013 financial year the difference between male and female average pay at each job grade was within our targeted range of 2 per cent, with male average pay slightly higher at some levels and female average pay slightly higher at others.

Turnover of women in senior professional and management roles increased over the year, as did turnover of men in those roles. Turnover of both men and women in the remainder of our workforce also increased. One contributing factor was the significant reduction in headcount that occurred during the year as we focused on reducing costs. The percentage of women in senior professional and management roles departing the Company as part of this process was lower than the equivalent percentage for men.

All of the operational Business Units (Energy Markets, LNG and Exploration & Production) achieved the targeted 15 per cent increase in rate of appointment of women to senior roles. Appointment of women to senior professional and management roles in the corporate functions (Finance & Strategy, People & Culture, Corporate Affairs and Legal & Company Secretary), where in many cases women already make up more than half the function, did not increase by 15 per cent.

As at 30 June 2013, women represent 22 per cent of the Board; 11 per cent of the Executive Management Team; 27 per cent of professional and management roles; and 40 per cent of all employees.

01:15Pm

Discussing flexible work arrangements to suit

changing circumstances.

40% 22% 11%Women in our workplace

Women on the Board

Women in ExecutiveManagement Team

27 %Women at Origin

Women in professional and management roles

We believe that treating our people fairly and equitably will help Origin to be a more successful organisation.

Gender diversity at a glance

Our PurposeBuild a more diverse workplace, with a focus on gender diversity, to help Origin be more successful.

Laws & Regulations

Australian law governs the fair treatment of workers by eliminating unlawful discrimination, including by gender, however there are no formal laws that govern representation of women in the workplace.


We have made publicly available three targets to improve gender diversity at Origin.

Our Approach

Our Diversity Council, chaired by Origin’s Managing Director, sets our gender diversity agenda and our Diversity and Inclusion Policy guides our actions.

Our Performance

Appointments of women to senior roles jumped 15% over the year in our operational businesses.


At US$8.5 billion, the Australia Pacific LNG project financing was at the time the largest project financing ever secured in Australia and represents a key component of the financing of the $24.7 billion project.

Reflecting the size and complexity of the transaction, it has won several finance industry awards, Best Project Finance Deal of the Year from Finance Asia, Best Project Financing from Asia Money and Oil & Gas Deal of Year in 2012 from Project Finance International.

The project finance facility provides funding for the downstream parts of the project, including the LNG plant on Curtis Island near Gladstone in Queensland. The funding will be progressively drawn down throughout the construction period, up to the US$8.5 billion facility limit.

The syndicated facility was signed in May 2012 by the Export-Import Bank of the United States (US EXIM), The Export-Import Bank of China (China EXIM), and a number of Australian and international commercial banks for 16 and 17 year terms. Australia Pacific LNG’s ability to secure long-term finance removed refinance risk from the project.

For many banks, it was the first time they had assessed LNG risk and for US EXIM, it represented its second-largest single project financing in history.

The ability to secure US$8.5 billion in project finance from Australian and international lenders evidences the strength and quality of the project, the strength of the joint venture partners and financiers’ confidence in the CSG to LNG industry. The funding will help Australia Pacific LNG to realise its planned investment.

The project remains on track to deliver first LNG by mid 2015, and stands to deliver a step change in Origin’s future growth prospects.

01

02

02:52pm

01. Work continues on Curtis Island, where we are building infrastructure which will help us meet the world’s growing energy needs.

02. The first of 69 LNG modules arrive at Curtis Island for use as the foundation structure for the project’s LNG trains and as supporting infrastructure.

Awards

Best Project Finance Deal 2012.Best Project Financing.Oil & Gas Deal of the Year in 2012.

Australia Pacific LNG financing recognised with awards


Contributing to effective policyEnsuring sound, stable policyOrigin operates across a number of markets and jurisdictions, including Australia, New Zealand, Chile, Papua New Guinea, Indonesia and the South Pacific. Our activities are conducted in accordance with a range of government policy and regulatory settings in relation to energy supply and security, carbon, environmental and planning approvals.

Given the scale and complexity of our business, and the significant investment required to bring our activities to market, they must be underpinned by sound, stable policy. Without commercially viable policy settings we will not achieve a cost efficient energy system. As a result, engagement with policy makers is an important part of managing our business.

In the past year, we have contributed to many major policy discussions in Australia, with the two primary focus areas being climate change; and domestic gas supply.

Climate change policyClimate change is an important societal challenge, and Australia needs the appropriate policy settings to drive emissions reductions. In Australia, the two major Australian political parties both support a 5 per cent emissions reduction on 2000 levels by 2020. However, there is no agreed approach to achieving that objective. As a result, there continues to be major uncertainty around how Australia’s emissions reductions target will be achieved.

The two major Climate Change-driven policy instruments in Australia are the Carbon Pricing Mechanism and the Renewable Energy Target (RET).

Carbon Pricing MechanismThe Carbon Pricing Mechanism came into effect at a fixed price of $23 per tonne of carbon emissions on 1 July 2012, and rose to $24.15 per tonne on 1 July 2013. While Origin is a long-time supporter of a market based price on carbon, in our policy advocacy we pointed out that this substantially exceeds the price in other major economies such as Europe or the United States. This creates a disadvantage for Australian businesses participating in global markets.

At the same time, the price is not high enough to cause a change in the way electricity is produced in Australia, and coal-fired power still dominates the generation fuel mix. The change in Government following the September 2013 election has created further uncertainty for the future of carbon pricing in Australia. The Coalition Government has vowed to repeal the carbon price in favour of a Direct Action policy, though the timing for this change and details of the Direct Action policy is as yet unknown. We plan to actively engage with government on the proposed Direct Action policy.

Renewable Energy TargetOrigin has been a long-time supporter of the RET and continues to support the policy, including its central objective of promoting development of renewable energy. The RET has support from the two major political parties. The objective of the policy is for 20 per cent of Australia’s electricity to come from renewable sources by 2020. To achieve the RET, a fixed target of 45 TWh of renewable energy was set. The large-scale RET, which supports wind farms, is to provide 41 TWh of the target and the small-scale RET, which supports solar, is uncapped but has a notional 4 TWh target, currently being significantly exceeded.

Our advocacy has centred on the difference between the policy’s intent and the practical way in which it is operating and its impacts. Since the RET was created there has been a substantial downward revision in total electricity consumption forecast for 2020, so to build the targeted 41 TWh large-scale RET and 4 TWh notional small-scale Renewable Energy Scheme volume would mean that approximately 28 per cent of Australia’s electricity would come from renewable sources, instead of the intended 20 per cent. As the leading energy provider in Australia, we have a responsibility to communicate how pursuing the original target in a market with declining demand creates unintended consequences, including higher than necessary costs for consumers and businesses who ultimately bear the cost of the scheme. The NSW Independent Pricing and Regulatory Tribunal reported that the RET will cost $102 for an average electricity consumer in New South Wales in 2013-14.

We believe more work must be done to understand the true costs of the scheme, and its impacts on electricity market stability. If these factors are not well understood, we could be locking Australia into considerably higher future electricity costs than necessary.

Domestic gas supplySome gas users and their representatives have voiced concerns in the past year about the rising cost of natural gas. They have also expressed fear that there will not be enough supply to meet domestic demand, therefore believe a portion should be reserved for domestic use only.

We believe the greatest economic benefits for Australia are realised by allowing all resources, including natural gas, to flow to their highest value use. Policies that force producers to supply gas at a specified volume and price are likely to decrease Australia’s economic wealth. We also believe that there is unlikely to be a shortage of gas supply on Australia’s east coast in the short-term. In September 2013, we signed a Gas Supply Agreement with ESSO Australia Resources PTY LTD and BHP Billiton Petroleum (Bass Strait) PTY LTD to purchase up to 432 petajoules (PJ) of natural gas from Longford in Victoria, which supports our view that there is sufficient gas supply.

Australia has the potential to create significant economic, environmental and social benefits through greater development of its substantial natural gas resources. However we face strong global competition and a supportive market-based policy environment is necessary in order for these benefits to be realised.

Origin’s policy efforts are focused on ensuring the best outcomes for Australia such as avoiding gas reservation. Instead we advocate for policy settings that promote investment in exploration, to stimulate new supply to meet demand growth.

3 key points on domestic gas supply1. There are sufficient gas

reserves in the well-integrated Eastern Australia market to supply both future domestic and international customers.

2. Origin is strongly committed to domestic gas markets and we continue to negotiate arrangements with our customers for future gas supply.

3. The Government has a critical role in facilitating the development of gas reserves with resulting economic, environment and social benefits.

Climate change is an important societal challenge, and Australia needs the appropriate policy settings to drive emissions reductions.


At Origin, we strive to grow our business and create value to share sustainably with all of our stakeholders.

In previous sections of this report we have discussed in detail how we are managing the activities which are of most interest to our stakeholders and our business, at this point in time. In this section, we discuss our results in the form of the value we distribute to stakeholders.

In the 2013 financial year, we delivered a substantial increase in the gross value we distributed to our stakeholders. We distributed $15.1 billion in value, up from $13.1 billion in the prior year.

This year, we changed the way we report our gross value distribution to align with the Global Reporting Initiative’s new G4 guidelines. Net expenses, which were previously included as part of our gross value created, have now been included in our gross value distributed. As a result, 2012 gross value distribution has been restated from $2.2 billion to $13.1 billion to provide a more relevant year on year comparison.

Value distributionThe Value distribution calculation and commentary is based on the income and expenses reported in the Income Statement of Origin Energy Limited.

Of the total $15.1 billion distributed in the past year, $1.1 billion was distributed to capital providers through interest and dividend payments, compared to $929 million in the prior year. This is due to an increase in borrowings and reduction of $77 million in capitalised interest predominantly associated with Mortlake Power Station being commissioned in August 2012.

We also distribute value to our employees through wages and benefits and seek to attract and retain high quality and skilled people. Our remuneration is competitively benchmarked against more than 300 companies. Our value distribution to employees increased this year to $746 million, from $665 million in the prior year. This year we granted $1,000 in shares to each eligible employee under our Employee Share Plan, as we met the annual safety performance target.

Through our operations and energy developments we create significant value for the Australian community through the payment of taxes and royalties to state and federal governments. In the past year, we distributed $132 million to governments and the broader community through income taxes and royalties. The current tax expense decreased by $46 million primarily due to a decrease in taxable profit.

This year, we distributed $6 million to communities as measured by the methodology of the LBG, which was a $1 million increase on the prior year. We invest to support initiatives of importance in local communities around our operations and developments; however just over half of the $6 million was awarded through the Origin Foundation. The Foundation funds grants towards educated-related initiatives to provide a pathway to employment and financial stability, as well as matching donations made by Origin employees to charities of their choice, and coordinating the time and skills Origin people volunteer with our charitable partners.

Additional valueIn addition to the gross value we distribute, there are also other positive economic effects we create across our operations and developments.

For instance, we create substantial economic value through our energy developments, through the creation of jobs and the sourcing of local materials and suppliers, particularly in the rural and regional areas where we operate. The Australia Pacific LNG project – in which we have a 37.5 per cent interest – has spent more than $12 billion to date on goods and services, the majority of which has occurred in Australia.

Our community contributions are verified by LBG, allowing for an accurate benchmark of our performance with other organisations. In addition to the audited community contribution, we do other things that distribute value to stakeholders. For example, in the past year we provided $2.9 million in payment support to customers in financial hardship through our Power On program. We create payment plans for these customers, to ensure they can continue to afford their energy supply.

Value distribution

Economic value distributed ($m)

2013 2012

Net Expenses (excluding stakeholders’ payments) (1) 12,404 10,703Depreciation and amortisation(2) 695 614Total operating costs 13,099 11,317Employee wages and benefits net of taxes 746 665Interest expense (2) 468 326Dividends paid to shareholders 610 603Total payments to providers of capital 1,078 929Current Income tax expense (3,4) 57 103Royalties to government 29 31Other taxes 46 43Total payments to government 132 177Community investments 6 5Total community contributions 6 5Economic value distributed 15,061 13,093

(1) Excludes capital expenditure.(2) Excludes capitalised interest.(3) Income tax includes only current income tax expense. GST and deferred taxes are excluded.(4) Includes all subsidiaries in Australia and overseas.

$15.1bnValue distributed

An increase of $2 billion on the prior year.

44 Value distribution

$3.7mFoundation philanthropy

Invested in grants, matched giving by employees and employee volunteering in the 2012 calendar year.

The Origin Foundation is our philanthropic foundation, which was founded in 2010 as part of the 10 year anniversary of Origin listing on the Australian Securities Exchange.

We believe in the power of education to change lives for the better and aim to empower young Australians to reach their potential. The focus of the Foundation spans the education lifecycle, from early childhood intervention to school reform, to transitioning to further study or work and life-long learning.

The early years in a child’s life lays the foundation for future learning and lifetime outcomes. Success at school determines whether children go on to further education, training and employment. While building skills throughout adulthood is important for career advancement as well as resilience to cyclical and structural changes in the economy.

Working with a range of partners, we’re using education to help break the cycle of disadvantage. We also provide access to training and development for the not-for-profit

sector to help build longer-term capacity and improve their social impact.

Our engaged philanthropy model awards financial grants, provides partners with access to skilled volunteers and matches donations made by Origin employees. In the calendar year 2012, the foundation channelled $3.7 million to more than 30 not-for-profit organisations working in the area of education.

Throughout the year the Foundation provided Origin employees with opportunities to volunteer with partners through skilled and unskilled projects. Over the 2012 calendar year employees spent 5,300 hours sharing their time and skills with partners.

The foundation also matches the donations that Origin employees make to charitable organisations through the workplace giving

program, Give2. At the end of December 2012, 252 employees had made a donation through the Give2 program over the calendar year. When matched by the Foundation, more than half a million dollars went to charity.

The Foundation’s true impact cannot be effectively measured in dollars alone; it will become clearer as the growth and development of our funding recipients is realised. The performance of the Origin Foundation is reported annually and can be read on Origin’s reporting website. We look forward to the continued growth and development of the Foundation’s activities in coming years.

12:37pm

Young Indigenous children in Borroloola enjoying the Indi Kindi

pre-school literacy program.

On average, Indigenous children have lower rates of school attendance, poorer learning outcomes and complete year 12 at half the rate of non-Indigenous students. This is why the Foundation makes substantial investments in programs to help Aboriginal children access and make the most of education. Our support includes Gawura, a day school in central Sydney, schooling in Cape York, the Stronger Smarter Institute, the Indi Kindi pre-school literacy program in remote Borroloola, the Aboriginal Girls’ Circles, and the highly successful Australian Indigenous Mentoring Experience.

Breaking the cycle of disadvantage


Like many young people, Addison was uninspired by school and unsure of his future.

When Addison scored poorly in his year 12 exams he was facing an uncertain future. His passion was art and music but he struggled in the traditional educational path of study and exams. Without some innovative thought his talents may never have had the opportunity to reach their potential.

Luckily for Addison the Launceston City Campus, a public school in Tasmania sits alongside the University of Tasmania and he became one of the first students to use evidence of his skills to gain entry. Big Picture Education Australia is a philanthropic organisation with a philosophy of ‘One student at a time’. Its focus on education made it a perfect partner for the Origin Foundation.

Through the Big Picture Design at the school, Addison connected with members of his local community to find mentors and develop his passion for art. The Academy Gallery at the University of Tasmania encouraged Addison to take on the role of a curator to establish an art exhibition for his school. The success of the event allowed Addison to build a portfolio of his creative work, as well as event coordination and management and occupational health and safety issues.

He was than able to present it to the university as proof of his educational abilities and scope to learn beyond the standard test process. The University looked past his grades and saw his potential as a student willing, capable and passionate about learning.

The exhibition opening was not just a great moment for Addison but it allowed fellow students to see how their own futures are in their hands and will be driven by their own passions.

Addison is one of the first students of the Big Picture school design to go to university and the first in his family.

Addison said: “It was an evolution of sorts and now here I am. I’m doing my first semester, in my first year at University, and I am loving every minute of it. I feel honoured, I feel proud of myself. I feel number one!”

09:22am

Origin Foundation partner Big Picture Education Australia helped Addison find a mentor in Malcolm Bywater, Director of the Academy Gallery, University of Tasmania.

Watch Addison tell his story online

The individual learning experience

46 Origin Foundation

Sustainability Ratings and BenchmarksDuring the 2013 financial year, Origin participated in a number of surveys commissioned by different sustainability ratings agencies.

Origin also reports sustainability performance against the internationally recognised Global Reporting Initiative indicators. The selected indices and indicators cover a broad range of sustainability issues, allowing Origin’s performance to be viewed by stakeholders against specific issues or holistically across the whole set of issues.

Dow Jones Sustainability IndexWe were included in the Dow Jones Sustainability Australia Index which tracks the performance of the top 30 per cent of the 200 listed Australian companies in the S&P/ASX 200 that lead the field in terms of sustainability.

London Benchmarking GroupOur community investment data is independently verified by the LBG, which promotes a consistent set of criteria for determining community investment, donations and commercial initiatives in the community.

FTSE4GoodSince 2004, Origin has been a member of the FTSE4Good Index Series, which is designed to identify companies that meet globally recognised corporate responsibility standards.

CDP Origin is a respondent to CDP’s annual request for both climate change and water information. CDP is an international, not-for-profit organisation providing the only global system for companies and cities to measure, disclose, manage and share vital environmental information.

Energy Supply Association of AustraliaSince 2009, Origin has been a signatory to the Energy supply Association of Australia’s (esaa) Sustainable Practice Framework, which is a major platform for the energy supply sector’s work in improving sustainability in the industry.

08:31Pm

Our reporting website provides a comprehensive review of

our financial and non-financial performance for 2013.

RATINGS &BENCHMARKS

FeedbackContact:

[email protected]

Origin SustainabilityAustralia Square Level 45, 264-278 George StreetSydney NSW Australia 2000


Glossary

Non-IFRS Financial MeasuresThis document includes certain non-IFRS Financial measures. Non-IFRS Financial measures are defined as financial measures that are presented other than in accordance with all relevant Accounting Standards. Non-IFRS Financial measures are used internally by management to assess the performance of Origin’s business and to make decisions on allocation of resources. The non-IFRS Financial measures have been derived from Statutory Financial measures included in the Origin Consolidated Financial Statements and are provided in this report to enable further insight and a different perspective into the financial performance, including profit and loss and cash-flow outcomes, of the Origin business.

The key non-IFRS financial measures included in this report are defined below.

Free Cash Flow Cash available to fund distributions to shareholders and growth capital expenditure.

Productive Capital Funds employed including Origin’s share of Australia Pacific LNG and excluding capital works in progress for projects under development which are not yet contributing to earnings.

Segment result Underlying EBIT for the Energy Markets, Exploration & Production, LNG, Contact Energy and Corporate segments. Net financing costs and tax expense/(benefit) are allocated to LNG, Contact Energy and the Corporate segments in measuring segment result. As disclosed in note 2 of the Origin Consolidated Financial Statements.

Total Segment Revenue Total revenue for the Energy Markets, Exploration & Production, LNG, Contact Energy and Corporate segments, including inter-segment sales as disclosed in note 2 of the Origin Consolidated Financial Statements.

Underlying profit and loss measures:Consolidated profitEBITEBIT marginEBITDAEffective tax rateEPSIncome tax expenseNet financing costs/incomeNon-controlling interests

Share of ITDAUnderlying measures are measures used internally by management to assess the profitability of the Origin business. The underlying profit and loss measures are derived from the

equivalent Statutory profit measures disclosed in the Origin Consolidated Financial Statements and exclude the impact of certain items that do not align with the manner in which the Managing Director reviews the financial and operating performance of the business. Underlying EBIT, Underlying EBITDA and Underlying Consolidated Profit are disclosed in note 2 of the Origin Consolidated Financial Statements. Underlying EPS is disclosed in note 32 of the Origin Consolidated Financial Statements.

Non-financial terms2C Best Estimate Contingent resource.

3C High Estimate Contingent resource.

2P reserves The sum of Proved plus Probable reserves. Probable reserves are those reserves which analysis of geological and engineering data indicate are less likely to be recovered than Proved Reserves but more certain than Possible Reserves. It is equally likely that the actual remaining quantities recovered will be greater than or less than the sum of the estimated proved plus Probable Reserves (2P).

Availability The time a generation plant was available for use, after deducting planned and unplanned outage hours, compared with the total time under review.

Barrels (bbls) A measure used for oil production and sales. One barrel equals approximately 159 litres.

Baseload power Baseload power stations produce electricity at a constant rate to meet the minimum demand requirements of customers.

Capital expenditure Investment in acquisition or improvement of long-term assets, such as property, plant or equipment.

Carbon dioxide (CO2) Greenhouse gas produced as a by-product of oil and gas production and when burning fossil fuels and biomass.

Equivalent Carbon dioxide CO2-e The concentration of CO2 which would cause the same level of radiative forcing as a given type and concentration of greenhouse gas.

Climate change Any change in climate over time, whether due to natural variability or as a result of human activity.

Coal seam gas (CSG) Natural gas contained within coal seams.

Cogeneration Producing two or more forms of energy from one fuel source. Generally, cogeneration plants operated by Origin Energy produce steam and electricity from natural gas.

Condensate A light oil that separates during gas production processes due to changes in pressure and temperature.

Contract Price (CP) An international price for LPG, in US dollars, using the Saudi Aramco Contract Price tender process. Australian LPG producers export LPG or sell into the domestic Australian market at prices that reflect the CP. Similarly, Australian LPG retailers purchase domestically produced or imported LPG based on CP.

Development well A well drilled to enable production from a known oil or gas reservoir.

EIS Environmental Impact Statement

Electricity measures

Watt (W) A measure of power when a one ampere of current flows under one volt of pressure.Kilowatt (kW) One kW = 1,000 watts.Kilowatt Hour (kWh) Standard unit of electrical energy representing consumption of one kilowatt over one hour.Megawatt (MW) One MW = 1,000 kW or one million watts.Gigawatt hour (GWh) One GWh = 1,000 megawatt hours or one million kilowatt hours.Terawatt hour (TWh) One TWh = 1,000 gigawatt hours, or one million megawatt hours.

Exploration well A well drilled to identify a new reservoir of natural gas or oil.

FID Final Investment Decision.

Gas measures

Joule Primary measure of energy in the metric system.Gigajoule (GJ) A gigajoule equals one billion joules.Terajoule (TJ) A Terajoule is equal to 1,000 gigajoules.Petajoule (PJ) A Petajoule is equal to one million gigajoules.Petajoules equivalent (PJe) An energy measurement Origin Energy uses in its annual report to represent the equivalent energy in different products so the amount of energy contained in these products can be compared. The factors used by Origin Energy to convert to PJe are: one million barrels crude oil = 5.8 PJe; one million barrels condensate = 5.4 PJe; one million tonnes LPG = 49.3 PJe; one TWh of electricity = 3.6 PJe.

Geothermal Energy that is generated by converting hot water or steam from deep beneath the Earth’s surface into electricity.

Hydrocarbons Oil and gas, including condensate and gas liquids (LPG and ethane).

Kbbls Kilobarrels = 1,000 barrels.

Kt Kilotonnes = 1,000 tonnes.

LNG Liquefied natural gas.

LPG Liquefied petroleum gas.

NEM National Electricity Market.

NGOs Non-government organisations.

Offshore exploration The search for hydrocarbon deposits under the sea, such as natural gas or oil.

Onshore exploration The search for hydrocarbon deposits beneath the earth’s surface, such as natural gas or oil.

Peaking plant A generator that can be quickly started to operate during periods of high electricity demand and/or high prices in the electricity market.

Photovoltaic (PV) Photovoltaic cells convert sunlight into electricity.

Power On Origin Energy’s hardship program which provides payment options for customers experiencing financial difficulty.

QCA Queensland Competition Authority

RET The Federal Government implemented a Renewable Energy Target (RET), requiring 20 per cent of electricity to come from renewable energy sources by 2020.

Seismic survey A geophysical survey to understand rock formations beneath the Earth’s surface.

Spot market A wholesale market for commodities, such as electricity or crude oil, which allows matching of supply against demand.

The Company Origin Energy Limited and its controlled entities.

Total Recordable Injury Frequency Rate (TRIFR) The total number of fatalities and injuries resulting in lost time, restricted work duties or medical treatment per million hours worked.

Upstream Part of Origin Energy’s business that is involved in the exploration and production of hydrocarbons.

48 Glossary

This Sustainability Report provides an overview for the 12 months to 30 June 2013. Further information about Origin’s sustainability performance can be found at: reports.originenergy.com.au

This report has been printed on Impact paper by Focus Press Pty Ltd. The paper is made from 100% recycled Post Consumer waste recycled paper and is FSC certified. Focus Press operates under an ISO14001 Environmental Management System and an ISO9001 Quality Management system. The printing process is 100% alcohol-free and uses vegetable-based inks. The report has been printed Carbon Neutral as certified under the Australian Government National Carbon Offset Standard.

Registered offi ceLevel 45, Australia Square264-278 George StreetSydney NSW 2000

GPO Box 5376Sydney NSW 2001

Telephone (02) 8345 5000Facsimile (02) 9241 [email protected]

SecretariesAndrew ClarkeHelen Hardy

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GPO Box 3993Sydney NSW 2001

Toll Free 1300 664 446Telephone (02) 8016 2896Facsimile (02) 9279 0664

[email protected]

DIRECTORYOrigin Energy Limited

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