Community and Environment

SPARK INFRASTRUCTURE IS COMMITTED TO SUSTAINABLE BUSINESS PRACTICE. OUR SUCCESS IS DEPENDENT ON THE PERFORMANCE OF OUR BUSINESSES AND THEIR INVOLVEMENT IN THE COMMUNITIES IN WHICH THEY OPERATE.

With a focus on organic growth, Spark Infrastructure is able to address sustainability issues within the asset companies by its representation on their Boards of Directors. Given the highly regulated nature of these businesses, Spark Infrastructure also regularly engages with the regulators in order to keep pace with future expectations of the industry and the wider community. The energy industry faces many key challenges over the coming years, including the expected introduction of emissions trading legislation and the mandatory reporting of greenhouse gas emissions.

Spark Infrastructure is committed to conducting business consistent with the following goals and values:

• valuing and rewarding employees of the Manager (see below) for their contribution to the business of Spark Infrastructure;
• enhancing Spark Infrastructure's strong relationships with partners, and motivating them to contribute to Spark Infrastructure's improved performance for their own benefit and that of Spark Infrastructure;
• respecting the legitimate interests of communities of Spark Infrastructure's asset companies; and
• maintaining high standards of corporate governance.

The Manager and responsible entity of Spark Infrastructure is 50% jointly owned by Cheung Kong Infrastructure (CKI) and RREEF Infrastructure (RREEF).

The Manager operates Spark Infrastructure Trust in accordance with the Corporations Act and the Spark Infrastructure Trust Constitution. This includes holding any investments of Spark Infrastructure, ensuring compliance with the Compliance Plan, and acting in the best interests of investors.

CKI and RREEF together provide their investment management expertise to the operations of Spark Infrastructure.

This includes identification and referral of potential investment opportunities in accordance with agreed principles, and detailed analysis and due diligence on investment opportunities.

Spark Infrastructure's corporate governance policies and charters are developed in accordance with the ASX Corporate Governance Council Principles of Good Corporate Governance and Best Practice Recommendations.

The Chairman of the Board, Stephen Johns, is an independent director of Spark Infrastructure.

Spark Infrastructure has a Code of Conduct that applies to all directors, officers and employees. This Code of Conduct covers Spark Infrastructure's corporate mission and goals, commitments (including values, responsibility to Securityholders, honesty and fairness, compliance, responsibilities to the community and more).

Economic
Spark Infrastructure's Mission is to build a major Australian-listed infrastructure investment fund by:

• Achieving long term, attractive and stable returns and capital growth for investors in line with our risk profile and market expectations;
• Establishing a diversified global portfolio of quality regulated infrastructure assets; and

The financial performance of the fund is underpinned by high quality assets and management. Spark Infrastructure seeks to provide an attractive cash yield and long term capital growth for investors.

Environmental
Spark Infrastructure operates one office of comparatively small size. While data is available for energy consumption and certain other materials, this footprint is not significant.

ETSA Utilities, CitiPower and Powercor have comprehensive structures for managing environmental impacts and risks. CitiPower and Powercor have an Environmental Management System certified to the internal standard ISO 14001:2004, while ETSA Utilities has an Environmental Management System that is consistent with this standard. ETSA Utilities develops an Environmental Management Plan each year to identify objectives, strategies, managerial controls and continuous improvement mechanisms. ETSA Utilities, CitiPower and Powercor view compliance with environmental legislation and regulation as a minimum requirement. CitiPower and Powercor have made voluntary environmental commitments.

In early 2008, the Boards of ETSA Utilities, CitiPower and Powercor endorsed a climate change policy that identified the need for further action in reducing their environmental footprints, particularly greenhouse gas emissions, and adapting the networks to better withstand forecast climate conditions. Meeting national reporting obligations with regard to greenhouse gas emissions is a key objective of the policy. Considerable work has been undertaken by the asset companies to improve data collection and measurement for internal mitigation and reporting.

Social performance indicators
ETSA Utilities, CitiPower and Powercor continue to meet the expanding requirements of a growing population and respond to immediate and longer term growth and demographic changes in residential and industrial customer sectors.

Customers expect that electricity utilities ensure the availability and reliability of electricity supply. Stakeholders expect electricity utilities to consider access to and affordability of electricity to all users for the overall sustainability of the community. These issues are considered in detail by energy regulators who set out and enforce the rules applicable to the asset companies.

In particular, the AER addresses the future reliability of electricity supply in the NEM. Since assuming responsibility for the economic regulation of distribution networks, the AER has published a number of guidelines. These include a national service performance incentive scheme, which provides incentives to electricity distribution network businesses to improve service quality, including reliability, over time. The AER has noted that investment in electricity distribution networks is contributing to stable network reliability.

Spark Infrastructure and the asset companies meet regularly with the AER and abide by all regulations.

Community safety is a key issue for Spark Infrastructure and the asset companies. For example, each year to ensure continuity of supply and public safety, ETSA Utilities, CitiPower and Powercor undertake extensive summer preparations programs that factor in associated risks. ETSA Utilities, CitiPower and Powercor have crisis management policies and procedures should an event such as major bushfire, heatwave or storm event occur.

Spark Infrastructure recognises that the workforce of the asset companies work diligently to employ safety practices that mitigate the hazards associated with electricity networks and general network operations. Addressing workforce qualifications and safety issues are therefore vital to performance.

ETSA Utilities, CitiPower and Powercor each have health and safety policies which are implemented through health and safety management systems. The systems are accredited to the certification standard Advanced Level Safety MAP edition 4. Health and safety reports are presented to each Board meeting. Health and safety is also reported to the Boards through the Risk Management and Compliance or Risk and Compliance Committees. ETSA Utilities won the 2008 SafeWork Award for 'Best Workplace Health and Safety Management System' in South Australia.

In addition, ETSA Utilities, CitiPower and Powercor have workforce development programs, as well as strategies in relation to culture, attraction, retention and training of employees.

Spark Infrastructure recognises the impact it and the asset companies have on the communities in which they operate. Spark Infrastructure complies with all relevant laws, regulations and rules governing its activities. Spark Infrastructure acts responsibly in its dealings with all relevant regulators.

Spark Infrastructure is a member of the community in which it operates and pays all government taxes, levies and duties for which it is liable. It respects the privacy of individuals through compliance with privacy laws.

ETSA Utilities, CitiPower and Powercor employ customer service strategies supported by a detailed set of policies, procedures, work instructions, manuals and guidelines. In 2007, CitiPower and Powercor became the first Victorian electricity business to be awarded International Customer Service Standard accreditation by the Customer Services Institute of Australia (CSIA). The latest performance report from ESCOSA for 2007/08 shows that ETSA Utilities outperformed its key reliability targets for average annual minutes without supply per customer in all regional areas except one. The number of interruptions averaged over all customers was the lowest in eight years, despite significant challenges during the March 2008 heat wave.