D. Pedro I Roadway Bridge over Atibainha Dam, in Nazaré

Taiaçupeba Water Treatment Plant, in Suzano
Atibainha Dam Technical Reserve Pumps, in Nazaré Paulista
D. Pedro I Roadway Bridge over Atibainha Dam, in Nazaré Paulista
SABESP
COMPANHIA DE SANEAMENTO BÁSICO DO ESTADO DE SÃO PAULO
50.3% GOVERNO DE SÃO PAULO, 24.9% NYSE, 24.8% BOVESPA
OWNERSHIP STRUCTURE IN 31/DECEMBER/2014
14,753
EMPLOYEES
RANKING
LARGEST SANITATION COMPANY IN THE AMERICAS AND THE FIFTH LARGEST IN THE WORLD IN SERVED POPULATION
CUSTOMERS
28.4 MILLION
OPERATION
364 MUNICIPALITIES
COVERAGE INDEXES
MARKET PRICE
ADJUSTED EBITDA
WATER:
100%, SEWAGE COLLECTION: 85%, COLLECTED SEWAGE TREATMENT: 77%
R$11.6 BILLION
R$2.9 BILLION
AJUSTED EBITDA MARGIN
26%
INVESTIMENT IN THE YEAR
R$3.2 BILLION
PROFIT FOR THE YEAR
R$903 MILLION
DIVIDEND PER SHARE
R$0.786
SHARES CODE
BM&FBOVESPA – SBSP3; NYSE – (LEVEL III ADR) SBS
256 219 136
189
119
224 354
295
179
87
288
27
364
358
233
351303302
103
160 98
313
207
221 85 254 315 186 360
18 185
187
294
333 124
29
116
39 287
108
1
291
182
345
285
100
191
341
17
222
336
293 99
183
202
82
235
342
109
178
28
276
9
158
74
128
102 197
67
298
211
171
261
114
104
177
89
14
175
356
250
122
296
73
61
192
301
24
43
48
88
96
231
248
299
76
5
49
212
245
31
21
101
34
78
15
149
145
284
140
340
146
68
46
35
148
274
275
118
143
166
272
60
159
36
344
161
270
168
318
70
129
41
190
133
227
134
152
142
196
323
83 310
324
123
259
135
São Paulo Metropolitan Region
237
246
59
111
112
58
304
37
147 162 71216
362
335
93
81
144
65
317
Universalized Municipalities*
(* municipality seat)
55
355
236
91
138
286
322
338
330
19
239
240
279
316
132
203
241
350
292
151
206
200
268
56
331
66
172
20
11
320
163
363 63
307
54
69
325
52
153
45
311 64
242 232
361
165
50
244
201
157
7
62
80
199
125
92
257
75
348
265
121
343
141
339
194
169
226 44
154
223
337
228
16
260
127
170
329 332
25 319
4
306
349
6
229
3
314
30
297
326
86
156
97
347
Metropolitan Office
MC – Centro Business Unit
ML – Leste Business Unit
MN – Norte Business Unit
MO – Oeste Business Unit
MS – Sul Business Unit
328
253
359
32
13
277
155
220
139
2
89
110
273
346
40
Regional Systems Office
RA – Alto Paranapanema Business Unit
RB – Baixo Paranapanema Business Unit
RG – Pardo e Grande Business Unit
RJ – Capivari/Jundiaí Business Unit
RM – Médio Tietê Business Unit
RN – Litoral Norte Business Unit
RR – Vale do Ribeira Business Unit
RS – Baixada Santista Business Unit
RT – Baixo Tietê e Grande Business Unit
RV – Vale do Paraíba Business Unit
234
164
213
365
10
309 176
174
218
23
137
267
126
278 95 308 184 258
289 225
243
262 8
57
38
352
305
264
269
214
12
266
47
271
247
217
281
53
188
77
208
106
263
131
215
130
79
118
113
238
230
255
180
327
107 204
252 198
115
210 195
357 205
173 353
249
51
300 209
283
72
167
94
181
26
321
84
312
150
251
105
334
280
282
120
193
42
290
22
33
SABESP OPERATED MUNICIPALITIES
1
2
3
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5
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RB
RT
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RA
RM
RM
RA
RB
RG
RT
RM
RB
RB
RA
RA
RM
RB
RT
RR
RM
RA
RV
RB
RM
RM
ML
RT
RB
RT
RT
RA
RT
RV
RA
RR
RR
MO
RB
RT
RA
RS
ML
RM
RM
RM
RA
RB
RM
RM
MN
RT
RA
RG
RJ
RV
RV
RB
MN
MN
RR
RG
RA
RJ
RV
RR
RV
RT
RA
RM
RN
MO
RT
RG
RT
RM
RM
RG
RM
RT
RA
MO
RB
RS
MS
RT
RG
RT
RM
RA
RB
RR
Adamantina
Adolfo
Águas da Prata
Águas de Santa Bárbara
Águas de São Pedro
Agudos
Alambari
Alfredo Marcondes
Altair
Alto Alegre
Alumínio
Álvares Machado
Álvaro de Carvalho
Alvinlândia
Angatuba
Anhembi
Anhumas
Aparecida d’Oeste
Apiaí
Araçariguama
Arandu
Arapeí
Arco-Íris
Arealva
Areiópolis
Arujá
Aspásia
Assis
Auriflama
Avaí
Avaré
Balbinos
Bananal
Barão de Antonina
Barra do Chapéu
Barra do Turvo
Barueri
Bastos
Bento de Abreu
Bernardino de Campos
Bertioga
Biritiba-Mirim
Bocaina
Bofete
Boituva
Bom Sucesso de Itararé
Borá
Boracéia
Botucatu
Bragança Paulista
Brejo Alegre
Buri
Buritizal
Cabreúva
Cachoeira Paulista
Caçapava
Caiabu
Caieiras
Cajamar
Cajati
Cajuru
Campina do Monte Alegre
Campo Limpo Paulista
Campos do Jordão
Cananéia
Canas
Cândido Rodrigues
Capão Bonito
Capela do Alto
Caraguatatuba
Carapicuíba
Cardoso
Cássia dos Coqueiros
Catiguá
Cesário Lange
Charqueada
Colômbia
Conchas
Coroados
Coronel Macedo
Cotia
Cruzália
Cubatão
Diadema
Dirce Reis
Divinolândia
Dolcinópolis
Dourado
Duartina
Echaporã
Eldorado
* Parcial and wholesale water supply
92
93
94
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RJ
MS
MS
RB
RG
RA
RT
RB
RB
RA
RT
RT
RA
ML
RB
RT
RB
RB
RG
MN
MN
RB
RA
RT
RT
RT
RA
RT
RV
RA
RG
RS
RT
RJ
RB
RA
RT
RM
RG
RG
RV
RR
RR
RN
RT
RB
RR
RT
RA
RA
RS
RR
MS
RA
RA
MO
RR
RA
ML
RA
RR
RJ
RM
RG
RG
RJ
RG
RR
RT
RV
MO
RJ
RG
MN
RR
RR
RV
RM
RV
RT
RV
RT
RB
RA
RB
RA
RB
RT
RT
MN
RB
Elias Fausto
Embu das Artes
Embu-Guaçu
Emilianópolis
Espírito Santo do Pinhal
Espírito Santo do Turvo
Estrela d’Oeste
Estrela do Norte
Euclides da Cunha Paulista
Fartura
Fernando Prestes
Fernandópolis
Fernão
Ferraz de Vasconcelos
Flora Rica
Floreal
Flórida Paulista
Florínea
Franca
Francisco Morato
Franco da Rocha
Gabriel Monteiro
Gália
Gastão Vidigal
General Salgado
Glicério
Guapiara
Guarani D’Oeste
Guararema
Guareí
Guariba
Guarujá
Guzolândia
Hortolândia
Iacri
Iaras
Ibirá
Ibiúna
Icém
Igarapava
Igaratá
Iguape
Ilha Comprida
Ilhabela
Indiaporã
Inúbia Paulista
Iporanga
Irapuã
Itaberá
Itaí
Itanhaém
Itaóca
Itapecerica da Serra
Itapetininga
Itapeva
Itapevi
Itapirapuã Paulista
Itaporanga
Itaquaquecetuba
Itararé
Itariri
Itatiba
Itatinga
Itirapuã
Itobi
Itupeva
Jaborandi
Jacupiranga
Jales
Jambeiro
Jandira
Jarinu
Jeriquara
Joanópolis
Juquiá
Juquitiba
Lagoinha
Laranjal Paulista
Lavrinhas
Lins
Lorena
Lourdes
Lucélia
Lucianópolis
Luiziânia
Lupércio
Lutécia
Macedônia
Magda
Mairiporã
Marabá Paulista
183
184
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RB
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RG
ML
RJ
RT
RS
RT
RT
RJ
RV
RJ
RB
MN
RT
RT
RA
RT
RT
RB
RT
RT
RA
RT
RB
RT
MO
RB
RB
RT
RT
RT
RB
RA
RT
RB
RM
RR
RJ
RA
RT
RM
MN
RT
RG
RB
RR
RS
RB
RM
RA
RV
MN
RB
MN
RA
MO
RB
RT
RT
RB
ML
RT
RT
RT
RT
RT
RM
RB
RS
RM
RT
RB
RB
RB
RM
RB
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RV
RB
RV
RB
RR
RG
(MAP ON THE SIDE FLAP)
Maracaí
Mariápolis
Marinópolis
Meridiano
Mesópolis
Miguelópolis
Mira Estrela
Miracatu
Mirante do Paranapanema
Mococa
Mogi das Cruzes*
Mombuca
Monções
Mongaguá
Monte Alto
Monte Aprazível
Monte Mor
Monteiro Lobato
Morungaba
Narandiba
Nazaré Paulista
Nhandeara
Nipoã
Nova Campina
Nova Canaã Paulista
Nova Granada
Nova Guataporanga
Nova Luzitânia
Novo Horizonte
Óleo
Onda Verde
Oriente
Orindiúva
Osasco
Oscar Bressane
Osvaldo Cruz
Ouroeste
Palmares Paulista
Palmeira D’Oeste
Paraguaçu Paulista
Paranapanema
Paranapuã
Parapuã
Pardinho
Pariquera-Açu
Paulínia
Paulistânia
Paulo de Faria
Pederneiras
Pedra Bela
Pedranópolis
Pedregulho
Pedrinhas Paulista
Pedro de Toledo
Peruíbe
Piacatu
Piedade
Pilar do Sul
Pindamonhangaba
Pinhalzinho
Piquerobi
Piracaia
Piraju
Pirapora do Bom Jesus
Pirapozinho
Piratininga
Planalto
Platina
Poá
Poloni
Pongaí
Pontalinda
Pontes Gestal
Populina
Porangaba
Pracinha
Praia Grande
Pratânia
Presidente Alves
Presidente Bernardes
Presidente Epitácio
Presidente Prudente
Quadra
Quatá
Queiróz
Queluz
Quintana
Redenção da Serra
Regente Feijó
Registro
Restinga
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RG
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RA
MC
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RA
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ML
MO
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RA
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RB
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RB
RG
RA
RM
RM
RV
RT
RB
RT
RT
RN
RA
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RT
RT
RT
MN
MO
RJ
RT
RT
Ribeira
Ribeirão Branco
Ribeirão Corrente
Ribeirão do Sul
Ribeirão dos Índios
Ribeirão Grande
Ribeirão Pires
Rifaina
Rio Grande da Serra
Riolândia
Riversul
Rosana
Roseira
Rubiácea
Rubinéia
Sagres
Salesópolis
Salmourão
Salto de Pirapora
Sandovalina
Santa Albertina
Santa Clara d’Oeste
Santa Cruz da Esperança
Santa Cruz do Rio Pardo
Santa Ernestina
Santa Maria da Serra
Santa Mercedes
Santa Rosa de Viterbo
Santa Salete
Santana da Ponte Pensa
Santana de Parnaíba
Santo Anastácio
Santo Antônio do Jardim
Santo Antônio do Pinhal
Santo Expedito
Santópolis do Aguapeí
Santos
São Bento do Sapucaí
São Bernardo do Campo
São Francisco
São João da Boa Vista
São João das Duas Pontes
São José dos Campos
São Lourenço da Serra
São Luiz do Paraitinga
São Manuel
São Miguel Arcanjo
São Paulo
São Roque
São Sebastião
São Vicente
Sarapuí
Sarutaiá
Sebastianópolis do Sul
Serra Azul
Serra Negra
Sete Barras
Silveiras
Socorro
Sud Mennucci
Suzano
Taboão da Serra
Taciba
Taguaí
Tapiraí
Taquarituba
Taquarivaí
Tarabaí
Tarumã
Tatuí
Taubaté
Teodoro Sampaio
Terra Roxa
Timburi
Torre de Pedra
Torrinha
Tremembé
Três Fronteiras
Tupã
Turiúba
Turmalina
Ubatuba
Ubirajara
União Paulista
Urânia
Uru
Valentim Gentil
Vargem
Vargem Grande Paulista
Várzea Paulista
Vitória Brasil
Zacarias
COMPANHIA DE
SANEAMENTO BÁSICO
DO ESTADO
DE SÃO PAULO
BOARD OF
DIRECTORS
Alberto Goldman
Alexander Bialer (until April, 2014)
Benedito Pinto Ferreira Braga Junior (since January, 2015)
Claudia Polto da Cunha
Dilma Pena (until January, 2015)
Edson de Oliveira Giriboni (until March, 2015)
Francisco Vidal Luna
Jerônimo Antunes
Jerson Kelman (since January, 2015)
Luis Eduardo Assis (since May, 2014)
Mauro Guilherme Jardim Arce (until February, 2015)
Reinaldo Guerreiro
CHANGE OF PARADIGM AND SAFE SUPPLY
Message from the chairman of the Board of Directors
6
CONCENTRATED EFFORTS TO FIGHT AGAINST THE WATER SHORTAGE
Message from the CEO
7
AMONG THE WORLD’S LARGEST COMPANIES IN SERVED POPULATION
Profile
8
Sidnei Franco da Rocha (since October, 2014)
Walter Tesch
BOARD OF
EXECUTIVE
OFFICESRS
PAINEL DE INDICADORES
12
SUPPLY CHALLENGES IN AN ADVERSE CLIMATE SCENARIO
Water
16
Edson José Pinzan (since August 2014)
Technology, EnterprisesProject and Environment Officer
IMPACTS AND CONSEQUENCES OF THE WATER CRISIS
20
João Paulo Tavares Papa (since August 2014)
Technology, EnterprisesProject and Environment Officer
STRATEGY AND VISION FOR THE FUTURE
24
CONFRONTING THE WATER CRISIS
28
SEWAGE ON THE PATH TO UNIVERSAL SERVICES
Sewage
40
FINANCIAL-ECONOMIC MANAGEMENT
46
ENVIRONMENTAL SANITATION IN PURSUIT OF SUSTAINABILITY
54
VALUING EDUCATION IN THE CONSCIOUS USE OF WATER
60
Awards recieved in 2014
77
2014 Annual Social Report
78
About the report/Materiality matrix
80
GRI Indicators
82
UN Global Compact Principles
85
Jerson Kelman (since January, 2015)
Chief Executive Officer
Dilma Pena (until January, 2015)
Chief Executive Officer
Luiz Paulo de Almeida Neto
Regional Systems Officer
Manuelito Pereira Magalhães Junior
Corporate Management Officer
Paulo Massato Yoshimoto
Metropolitan Region Officer
Rui de Britto Álvares Affonso
Chief Financial Officer and Investor Relations Officer
SUSTAINABILITY
REPORT 2014
Coordinators Aloisio Hildebrand, João Paulo Nocetti Tonello and Priscila Costa da Silva
Writer/Editor Aloisio Hildebrand and Priscila Costa da Silva
Reporters Alessandra Mortada Castro, Ana Lúcia Fonseca Rodrigues Szabjubok, João Paulo Nocetti
Tonello, Paula Márcia Sapia Furukawa, Priscila Costa da Silva, Ricardo Camellini de Castro, Roseli Chistoni,
Silvana Almeida Nogueira, Valéria D´Amico and Wady Roberto Bon
Work group Adriano Stringhini, Alessandra Mortada Castro, Aloisio Hildebrand, Ana Lúcia Fonseca,
Rodrigues Szabjubok, Angela Beatriz Airoldi, Carlos Eduardo Hashish, Carlos Eduardo Rodrigues,
Cristina Gonçalves Tabosa Alves, Edison Airoldi, Eliana Kazue Kitahara, Elizabeth Ayres Gdikian, Guaraci
Loureiro Sarzedas, Ivan de Assis, João Paulo Nocetti Tonello, Marcelo Miyagui, Marcel Sanches, Marcio
de Freitas Junior, Maria da Conceição Gouveia, Maria Regina F. Campos, Marilza Soares, Paula Márcia
Sapia Furukawa, Paulo Ronaldo Barreto, Priscila Costa da Silva, Ricardo Camellini de Castro, Rodolfo
Lopes Protti, Roseli Chistoni, Silvana Almeida Nogueira, Valéria D´Amico, Wady Roberto Bon, Wagner S.
Pinheiro and Wanderley da Silva Paganini
Legal Consulting Elizabeth Melek Tavares and Tales José B. Bronzato
External Consulting MZ Group
Audit of the Financial Statements Deloitte Touche Tohmatsu
Photos / Infographics Sabesp Team
Graphic Design and Art Direction Marcus Romanelli (coordination), Beatriz Nalon, Giórgia Cassino,
Henrique de Brito and Marcello Mussa
Print run 200 copies
MESSAGE FROM THE CHAIRMAN OF THE BOARD OF DIRECTORS
CHANGE OF PARADIGM
AND SAFE SUPPLY
G4-1
The southeast region of Brazil is facing the worst water crisis of its history. The extremely low rainfall and water inflow levels in
water sources of the Metropolitan Region of São Paulo (MRSP) during 2014 and early 2015 brought new parameters for the assessment
of hydrological risks, previously based on the figures for 1953/1954
two-year period, the most critical ones recorded up to date.
The situation is severe and dealing with the water crisis comprises a set of actions to reduce the hydrological risks. In this regard,
we are making additional investments in works with results in the
short and medium terms, in order to improve water source reservation, expand the flow transferred between systems and treated
water production capacity.
The actions foreseen in the São Paulo Macrometropolis Plan
(area which includes the metropolitan regions of São Paulo, Campinas, Santos Coast and Paraíba Valley, Jundiaí and Piracicaba urban
agglomerates) were anticipated, such as the use of Grande river
branch in Billings reservoir, which already supplies water to the ABC
region since the 50’s and will contribute to Taiaçupeba reservoir, in
Alto Tietê water supply system.
Another example is the interconnection between the Jaguari (Paraíba do Sul river basin) and the Atibainha (PCJ basin) reservoirs, which
increases water safety in both basins. Additionally, you can find in this
report several interventions in progress, implementation or phase of
study which, scheduled to be delivered by the end of the decade, which
must alleviate the pressure on the public supply system of the Metropolitan Region of São Paulo.
Obviously, this result relies on ongoing actions and programs executed by Sabesp for years, which will be long-lasting pursued. The initiatives include fighting against fraud and pipeline losses, setting the
adjustment to network pressure, expanding sector reservoirs, decontaminating rivers and protecting water source.
Due to current situation, the adjustment to the routes and priorities
focused on expanding water infrastructure certainly has financial impacts on other relevant actions previously assumed, especially those
directed to sanitation. This situation, however, does not exclude from
our scope the target of providing universal access in our performance
area, which has recording relevant advances. In this regard, it is worth
pointing out that the complete decontamination still relies on the conscious participation of government and society by correctly disposing
the urban waste, promote the cleaning of cities and properly connect
sewage to the collecting network.
6
Referring to water, also mentioning higher social participation,
another strategic and essential path towards dealing with water
crisis focuses on the efficient management of demand. The commitment from 80% of population, who can receive bonus in their
bills, concerned with the contingency tariff and /or aware of the
severe situation we have been going through, it has been paramount to maintain a consumption level around 30% lower than the
beginning of the drought.
This mobilization, already successful, must be reinforced
with the contribution from other citizens, communities, opinion
makers, press and organized society. We need to join efforts to
increasingly raise the awareness and make those who have not
yet absorbed current crisis to understand such critical moment;
starting with the approximately 20% of inhabitants of the Greater
São Paulo, who during 2014, persisted in consuming more than
the necessary. This has to be focus of this mission which pertains to entire society. It is imperative that the entire population
cooperates by saving as much water as possible, so that, jointly
with Sabesp’s actions, we can go through 2015 without the need
of taking more drastic measures.
Without ignoring the essential precepts of environmental preservation, the understanding on such emergency moment must reach the
public administration bodies and related powers. This means greater
agility and objectivity in the grant of authorizations and licensing, with
positive operating practical results in the quick execution of works, preventing long stoppages.
The change in models must be extended to new codes of works and
requirements to new buildings, spreading and implementing measures
aiming at reducing consumption in urban areas. We must also consider
recycling and reuse for drinkable and non-drinkable purposes, water-saving devices in households, industry and agriculture.
Finally, this is the moment for us to build a more conscious relation
with water management and consumption. We have to take lessons
from the Chinese wisdom, which teaches us that every crisis represents
an opportunity to innovate, change paradigms and, above all, implement
long-term sustainable solutions. This is what Sabesp and the São Paulo
State Government have been doing: without leaving the past behind, we
always must move on.
BENEDITO BRAGA
Chairman of the Board of Directors
MESSAGE FROM THE CEO
CONCENTRATED
EFFORTS
TO FIGHT AGAINST THE WATER SHORTAGE
G4-1
1In Sabesp’s 41 years of history, 2014 was certainly one of the
most challenging years. During the last twelve months, we have
worked tirelessly to deal with the most severe drought in the Southeast region in more than eight decades, an event whose likelihood of
occurrence was 0.6%.
The strategic initiatives in the operations combined with the
population’s excellent response to the awareness and the financial incentive campaigns for rational use of water were essential to prevent
the jeopardising of the public supply system. The rapid reaction in cities
in the state’s interior and, especially, in the São Paulo metropolitan region, the most severely affected area, has demonstrated the strength of
ourinfrastructure and the high technical capacity of our professionals.
Only a Company with these attributes is able to replace the source of water supply for a vast and densely populated regions with other
production systems, as Sabesp has been doing in Greater São Paulo to
support the Cantareira system, which was the most severely affected
by the drought. Only a company of this size can execute works like the
one to extract water from Cantareira’s technical reserve. Delivered in a
short time period, it has become a case study due to the ingenuity and
expertise used to extract water below the gravity extraction floodgates.
Equally efficient was the strengthening of practices against water
losses, including intensive scans, faster repairs and replacement of
pipes and branches, in addition to the intensification of pressure management in distribution networks. The intensive media campaigns,
the mobilization of employees, the adoption of bonuses and, more recently, the contingency tariff complete the set of initiatives that have
produced very positive results.
For the first time since it began operating, the Cantareira system
is not the greatest contributor to the large metropolis. Its production
averaged 14.03 m³/s in February 2015 – 56% less than the 33 m³/s recorded before the crisis and less than the production volume of the
Guarapiranga system, which has become the largest water producer.
Our water sources currently produce 70% of what they produced under normal conditions, until the end of 2013.
This 30% reduction pace has to be maintained in 2015. Therefore,
we are carrying out works to increase water supply safety, production
capacity and the production systems integration in the metropolitan region, especially the interconnection of Billings reservoir with the Alto
Tietê system, the enhancement of Billings with Guarapiranga reservoirs
and the expansion of the ABV water treatment station. It is also essential that the population continues saving water. With these initiatives,
even if rainfall levels are unfavorable, we will possibly not need to adopt
more drastic and distressing measures, such as the rotation.
The efforts to fight the water shortage required the reallocation of investments and the creation of budget cuts to ensure the
execution of the bonus program and the planned works. Nevertheless, in 2014, the Company invested R$3.2 billion and plans
to invest more than R$13.5 billion by 2019. These factors did not
prevent Sabesp from moving forward to the goal of providing universal access to sewage collection and treatment services in its
area of operations.
Established jointly with the state government and the served
municipalities, this guideline presented positive numbers in the
execution of the third stage of the Tietê project, in the São Paulo
metropolitan region, and the Onda Limpa (Clean Wave) program in
the Santos coast region.
In 2014, we delivered 20 sewage treatment stations (STSs) executed 244,300 new connections – totaling 22.4 million people served.
Regarding water supply, although this service is universal, intensive
work was required to keep up with the growth of the population and
the business. As a result, 231,500 new connections were made. We
currently serve 25.3 million people directly, more than the population
of many countries.
It is also worth noting the efforts to obtain management efficiency gains and to improve the quality of the services provided in
the served municipalities. These initiatives include the policy for
employee’s valuing trainning, the development of leaders and the
modernization and technological improvement of internal processes. This transparent and ethical attitude is further reinforced by
a compliance program based on practices referenced to the main
global requirements, such as the Foreign Corrupt Practices Act
(FCPA), and in anticipation of the Anti-corruption Law 12,846/2013,
in effect since January 2014. In addition, in 2014, we carried out an
extensive assessment of anti-fraud mechanisms, resulting in the
improvement of the 93 existing processes and the implementation
of another 77 corporate protection initiatives.
The long-term strategic plan, the operating capacity and the dedication of our professionals were essential so that the population
could be spared the distress caused by general supply shortage in
2014. We will maintain these efforts in 2015 and in the upcoming years,
leaving an important legacy for future adversities, comprising both
the structural aspect, which is even more robust and secure, and the
population’s increased awareness of water issues.
JERSON KELMAN
Sabesp’s Chief Executive Officer
7
G4-3/4/5/6/7/8/9
FOUNDED IN 1973 a from the merger of
PROFILE
different sanitation companies and under the
guidelines of the National Sanitation Plan (Planasa),
Companhia de Saneamento Básico do
Estado de São Paulo (Sabesp) has as its vision
to provide universal access to sanitation services
in the area it operates.
AMONG THE WORLD’S LARGEST COMPANIES IN
SERVED POPULATION
Construction fo the
Cantareira System,
early 70s
Also, in accordance with sustainable development principles and
aligned with the environmental, social and economic policies of São
Paulo State Government, its controlling shareholder, Sabesp has as
its mission “to provide public sanitation services, contributing to improving quality of life and the environment”.
As a publicly held mixed capital company headquartered in
the municipality of São Paulo, the capital of São Paulo state, Brazil, the Company is governed by public and private Law standards
and principles.
Sabesp is currently the largest sanitation company of the Americas and the fifth largest of the world in terms of population served,
in accordance with the 14th edition (2012-2013) of the Pinsent Masons
Water Yearbook. We operate water and sewage services in São Paulo
state, including in the city of São Paulo.
In 2014, we posted net revenue of approximately R$11.2 billion
and net income of R$903.0 million. Our assets totaled R$30.4 billion
and our market cap was R$11.6 billion on December 31, 2014. We supply water to 28.4 million people (25.3 million directly and 3.1 million
served on a wholesale basis) and collect the sewage generated by
22.4 million people. Sabesp’s services cover approximately 67% of
the urban population of the state of São Paulo.
Our structure is divided into five management divisions, in
addition to the CEO, two of which are operational, divided into
17 business units throughout the State. We operate 235 water
treatment plants and 524 sewage treatment stations, including 9
ocean outfalls. Our water and sewage distribution networks are
70,800 kilometers and 48,000 kilometers long, respectively. On December 31, 2014, the Company had 14,753 employees, whose total
productivity was 1,008 connections per employee.
The Company operates in 364 municipalities of the state of São
Paulo, in addition to partially serving the municipality of Mogi das
Cruzes. Between January 1st, 2007, when the new Regulatory Framework (Law 11,445/07) was issued, and on December 31, 2014, we
entered into agreements to provide services for an additional 30 years with 274 municipalities (including the city of São Paulo), eight of
which executed in 2014.
On December 31, 2014, these 274 municipalities accounted for
approximately 73.4% of the Company´s total revenue and 65.7% of
intangible assets. Also, the Company continues to operate in the 54 municipalities for
which the agreements have expired and it is
negotiating renewal.
By 2030, another 38 municipalities will
have their agreements expired. Together,
they account for 8.7% of the Company´s total revenue and around 8.0% of intangible
assets. For these cases, Sabesp will spare
no effort to formalize new agreements for
another 30 years.
In addition, through December 31, 2014,
the Company supplied water on a wholesale basis to five other municipalities located in the metropolitan region of São Paulo
(RMSP), four of which also used sewage
treatment services.
In another three municipalities of the
State of São Paulo, Sabesp holds interest
in Águas de Castilho S.A., Águas de Andradina S.A. and Saneaqua Mairinque S.A.,
which provide water and sewage services
and, in the municipality of Mogi Mirim (SP),
it it holds interest in SESAMM – Serviços
de Saneamento de Mogi Mirim S.A., which
is engaged in the modernization, implementation and management of the sewage treatment system. It is worth mentioning that
there were no capital contributions to the
associated companies in 2014.
In the reuse water segment, Sabesp
acts as a partner of Odebrecht Ambiental
in Aquapolo Ambiental to produce, provide
and sell the product to the Capuava Petrochemical Complex and, in the non-domestic sewage segment, the Company created, together with Estre Ambiental, Attend
Ambiental, which began operating a non-domestic sewage pre-treatment station
and sludge disposal system in the Metropolitan region of São Paulo in the second
half of 2014, amongst other activities.
The Company also provides advisory
services on the rational use of water, planning and commercial management, financial and operating issues. We currently
operate in Panama, Honduras and Nicaragua, in partnership with Latin Consult in
the first two countries.
The Company is qualified to provide
urban rainwater drainage and urban cleaning services, handle solid waste, sell
power, perform other services, provide
products and obtain benefits and rights
that directly or indirectly result from its
The Company
operates in 364
municipalities
of the state
of São Paulo,
besides providing
whoesale
water to five
other cities
in São Paulo
Metropolitan
Region
9
Sabesp
supplies water
to 28.4 million
people, nearly
67% of the urban
population
of the state of
São Paulo.
assets, operations and activities, in Brazil
or abroad.
The control, oversight and regulation,
including tariff regulation, of our operations are mostly carried out by the São
Paulo State Energy and Sanitation Regulatory Agency – Arsesp.
The Company’s shares – all common
voting shares – are traded on the São
Paulo Securities, Commodities and Futures Exchange (BM&FBovespa) under the
code SBSP3 and on the New York Stock
Exchange (NYSE), as American Depositary Receipts (Level III ADR), under the
code SBS. On December 31, 2014, we
had 5,010 shareholders registered on the
BM&FBovespa and our capital stock was
composed as follows:
24.9%
50.3%
24.8%
We are still part of the main BM&FBovespa
indices, including the Corporate Sustainability Index.
Corporate Governance
The Company’s highest governing
body is the Shareholders’ Meeting. It is
10
incumbent upon the Shareholders’ Meeting, among others, to
elect or remove members of the Board of Directors and the
Fiscal Council, establish management’s compensation and approve dividends.
The Company’s Board of Directors is currently composed of
ten members for a unified two-year term of office, four of whom
independent, reelection being permitted in accordance with the
BM&FBovespa’s Novo Mercado rules. One of the members was
elected by minority shareholders. No executive officer is a member of the Board of Directors, except for the CEO, and the CEO
cannot be the Chairman of the Board of Directors.
2014 and the first months of 2015 were marked by major changes in our Management. In March 2014, João Paulo Tavares Papa
resigned from the position of Technology, Enterprises and Environment Officer and was replaced by Edson José Pinzan in August. In January 2015, Jerson Kelman replaced Dilma Seli Pena
as the Company’s Chief Executive Officer.
Also in March 2014, Edson de Oliveira Giriboni resigned from
the position of Chairman of the Board of Directors.
At the Annual Shareholders’ Meeting held in April 2014, the
controlling shareholder renewed part of the Company’s Fiscal
Council, electing Rui Brasil Assis as a sitting member and Enio
Marrano Lopes and Márcio Rea as alternate members. On the
same date, Joaldir Reynaldo Machado left the Fiscal Council.
On the same occasion, the minority shareholders introduced
changes to the Board of Directors, by electing Luís Eduardo Assis
to replace Alexander Bialer, and, to the Fiscal Council, by electing Alexandre Luis Oliveira de Toledo and Antonio Claudio Zeituni as sitting and alternate members, respectively, to replace
Massao Fábio Oya and Jorge Michel Lepeltier.
In January 2015, Benedito Pinto Ferreira Braga Junior, the new
State Secretary of Sanitation and Water Resources, was elected
Chairman of the Board of Directors. Subsequently, in February
2015, Board member Mauro Guilherme Jardim Arce resigned and
was replaced by Jerson Kelman.
G4-34 For further information on the Company’s corporate governance structure and its operations, see the “Corporate Governance” section in the Investors Relation area of the Company’s
website: www.sabesp.com.br/investidores.
In 2014, the compensation of executive officers and members
of the Board of Directors, including benefits, amounted to approximately R$3.4 million. This amount is added by approximately
R$504,000 relating to the executive officers’ variable compensation; the variable compensation is not applicable to members of
the Board of Directors and the Fiscal Council, pursuant to State
Decree 58,265/12 ratified by the Shareholders’ Meeting held in
April 2013.
As required by Brazilian Corporation Law, the overall compensation paid to executive officers and members of the Board of
Directors and the Fiscal Council is established by the Shareholders´ Meeting. At Sabesp, the policy relating to the compensation of Board members and executive officers is established in
accordance with the guidelines of São Paulo government, mainly
based on performance, always subject to approval by the Shareholders’ Meeting.
IN 2014, STRATEGIC ACTIONS TAKEN BY
SABESP AND THE EXCELLENT RESPONSE OF
THE POPULATION TO AWARENESS CAMPAIGNS
AND BONUSES WERE CRUCIAL IN AVOIDING
COMPROMISING THE PUBLIC SUPPLY SYSTEM.
ligações de água
ligações de
água
de
água
7,295ligações
7,481
7,679
7,888
ligações
de
água
7,295ligações
7,481
7,679
7,888
de água
7,295
7,481
7,679
7,888
7,295ligações
7,481
7,679
7,888
de
água
7,295ligações
7,481
7,679
7,888
de água
água
PANEL OF
INDICATORS
CLOSE TO UNIVERSAL ACCESS
2014
2013
2010 A 2014
2012
2011
2010
7,295
2010
%
5,718
77
78
77
76
75
2014
2013
2012
2011
2010
23,625
23,911
24,249
24,560
2014
CLOSE TO UNIVERSAL ACCESS(1)
20,024
20,498
20,992
22,353
2011
2012
2013
thousand
inhabitants
CLOSE TO UNIVERSAL ACCESS
CLOSE TO UNIVERSAL ACCESS
atentida
esgoto
Waterpop,
coverage
ratio
21,483
coleta de esgotos
coleta
decoverage
esgotos
Sewage
collection
ratio
2014
2014
2013
e esgotos
2010
2011
2012
2013
2013
2012
2012
2011
2011
2010
2010
85
84
83
193
204
thousand
inhabitants
%
146
141
Collected
sewage
coverage ratio(2)
125
81 treatment
%
77
77
78
78
77
2014
77
76
76
75
75
77
78
77
76 satisfaction perception(3)
Positive customer
75
80
2014
2012
2011
2011
2010
2010
percepção positiva
pop, atentida
água
%
pop, atentida
água
89
2013
23,625
23,911
24,249
24,560
25,264
23,911
24,249
24,560
25,264
89
2012água
entida23,625
2011
24,249 2010
24,560
2010
2010
12
92
89
25,264
2011
2011
2012
2012
thousand
2013
2013
2014
2014
7,888
5,921
6,128
85
2012
84
85
83
84
82
67,647
83
81
23,625
água
2014
água
thousand
6,660
2014
thousand
extensão água
65,379
66,389
2010
2011
82
2012
81
76
2012
77
75
76
75
%69,619
%2013
%
%
etas
pop, atentida
água
~100
213 %
214
212
2010
2011
2010
24,249
2011
24,560
2010
2011
2012
1,093
2013
1,102
2010
2011
2012
2013
2012
25,264
2011
2014
2013
2014
inhabitants
1,083
2014
thousand
inhabitants
km
km
un
1,055
2013
2014
un
Resident population served by sewage collection
unidade
%
%
20,024
2010
20,498
2011
490
20,992
2012
2010
490
21,483
2013
2011
502
22,353
2014
2012
509
2011
125
%
thousand
inhabitants
thousand
inhabitants
2012
125
2010
2011
2012
2011
146
2010
2012
2010
2011
2012
141
2013
2014
7,481
2011
2011
2011
2011
5,921
2011
5,921
2011
5,921
5,921
5,921
7,679
2012
2012
2012
2012
6,128
2012
6,128
2012
6,128
6,128
6,128
5,718
2010
2010
2010
2010
5,921
2011
2011
2011
2011
6,128
2012
2012
2012
2012
6,660
2014
6,340
6,660
2013~100 %2014
2013
2014
2013
2014
2013~100 %2014
ligações de esgoto
ligações
de
esgoto
ligações
de
esgoto
ligações
de
ligações de esgoto
esgoto
ligações
de esgoto
Sewage
connectionsde esgoto
ligações
5,718
5,921
6,128
6,340
2010
2011
2012
2013
8,210
2014
8,210
2014
2014
2014
2014
6,660
2014
6,660
2014
6,660
6,660
6,660
thousand
thousand
extensão água
extensão
65,379
66,389
67,647
69,619
70,800
2010
2011
2012 água
2013
2014
extensão
água
2010
2011
2012 água
2013
2014
extensão
65,379
66,389
67,647
69,619
70,800
extensão
65,379 network
66,389
67,647 água
69,619
70,800
Water
2010
2011
2012
2013
2014
65,379
66,389
67,647
69,619
70,800
65,379
66,389
67,647
69,619
70,800
extensão
água
2010
2011
2012
2013
2014
extensão
2010
2011
2012 água
2013
2014
65,379
66,389
67,647
69,619
70,800
2010
2011
2012 esgoto
2013
2014
extensão
65,379
66,389
67,647
69,619
70,800
2010
2011
2012
2013
2014
47,992
44,279 extensão
45,073
45,778esgoto
47,103
2010
2011
2012 esgoto
2013
2014
extensão
47,992
44,279
45,073
45,778
47,103
extensão
2010
2011
2012 esgoto
2013
2014
Sewage
network
47,992
44,279
45,073
45,778
47,103
extensão
2010
2011
2012 esgoto
2013
2014
47,992
44,279
45,073
45,778
47,103
47,992
44,279
45,073
45,778
47,103
extensão
2010
2011
2012 esgoto
2013
2014
2010
2011
2012 esgoto
2013
2014
extensão
47,992
44,279
45,073
45,778
47,103
2010
2011
2012
2013
2014
etas
2010
2011
2012
2013
2014
47,992
44,279
45,073
45,778
47,103
235
213
214
212
232
etas
2010– Water
2011
2012Stations
2013
2014
ETA
etas
235
213
214
212Treatment
232
2010
2011
2012
2013
2014
etas
235
213
214
212
232
etas
235
213
214
212
232
235
2010
2011
2012
2013
2014
213
214
212
232
etas
2010
2011
2012
2013
2014
235
etas
213
214
212
232
2010
2012
2013
2014
2011
poços
235
213
214
212
2010
2011
2012
2013
2014
232
2010
2011 poços
2012
2013
2014
1,093
1,102
1,079
1,083
1,055
poços
Wells
poços
1,093
1,102
1,079
1,083
1,055
2010
2011
2012
2013
2014
1,093
1,102
1,079
1,083
1,055
2010
2011 poços
2012
2013
2014
1,093
1,102
1,079
1,083
1,055
2010
2011
2012
2013
2014
1,093
1,102 poços
1,079
1,083
1,055
2010
2011 poços
2012
2013
2014
2010
2011
2012
2013
2014
1,093
1,102
1,079
1,083
1,055
2010
2011
2012
2013
2014
1,093
1,102
1,079
1,083
1,055
etes
2010
2011
2012
2013
2014
509
524
502 Stations
ETE
–
Sewage
Treatment
etes
490
490
2010
2011
2012
2013
2014
etes
509
524
502
490
490
2010
2011
2012
2013
2014
etes
509
524
502
490
490
etes
509
524
502
490
490
509
524
502
490
490
etes
2010
2011
2012
2013
2014
509
524
etes
502
490
490
2010
2012
2014
2011
2013
509
524
502
490
490
2010
2011
2012
2013
2014
2010perdas
2011 - faturamento
2012
2013
2014
2010 Billed
2011Loss Index
2012
2013
2014
Water
perdas
faturamento
2014
21.3
2010perdas
2011 - faturamento
2012
2013
2014
perdas
faturamento
2013
24.4
2014
21.3
2010
2011
2012
2013
2014
perdas
faturamento
2014
21.3
2013
24.4
2012
25.7
2014
21.3
2013
24.4
2014
21.3
2011
2012
25.7
2013perdas - faturamento 25.6
24.4
perdas
faturamento
2012
25.7
2013
24.4
2011
25.6
2010
26.0
2014
21.3
2012
25.7
2011
25.6
2012
25.7
2014
21.3
2013
24.4
2010
26.0
2011
25.6
perdas
micromedição
2010
26.0
2011
25.6
2013
24.4
Water
Metered
Loss
Index
2012
25.7
2010
26.0
2014
29.8
2010
26.0
2012
25.7
2011 perdas por ligação
25.6
2013
31.2
2011
25.6
perdas
por
ligação
2010
26.0
403
395
392
372
319
perdas
por
ligação
2012
32.1
2010
26.0
por
403 perdas
395
392 ligação
372
319
por
2011
32.0
403 perdas
395
392 ligação
372
319
403
395
392
372
319
2010
32.3
403 perdas
395
392 ligação
372
319
por
perdas
por
ligação
2010
2011
2012
2013
2014
403
395
392
372
319
thousand
inhabitants
2013
(5)
524
2014
uan
thousand
inhabitants
municípios universaliz,
perdas - faturamento
2014
204
193
municípios
universaliz,
2013
146
141
2010
7,295
2010
2010
2010
2010
5,718
2010
5,718
2010
5,718
5,718
5,718
7,888
2013
7,888
2013
2013
2013
2013
6,340
2013
6,340
2013
6,340
6,340
6,340
(4)
47,992
235
2014
1,079
2012
2014
232
poços thousand
pop, atentida esgoto
20,024pop,
20,498
20,992 esgoto
21,483 etes
22,353
atentida
2010
70,800
2013
~100 %
~100 %
23,911atentida
24,249
24,560
pop,
água 25,264
23,911
8,210
8,210
8,210
8,210
8,210
(4)
2013
esgotos tratados
77
2014
extensão
78 esgoto
2013 esgotos tratados
água
77
44,279
45,073
45,778
47,103
2014
77
2012
água
78
2013
2011
2012
2010
2011
2010
8,210
6,340
Resident population served by water supply
municípios universaliz,8281 %
81
82
esgotos
tratados
esgotos
tratados
2014
2014
2013
s tratados
2013
2012
2010
2011
2012
2013
2014
2012
2013
2011
23,625
85
85
84
2014
84
83
83
82
7,679
2011
2012
2013
CLOSE TO UNIVERSAL ACCESS
coleta de esgotos
2014
2010
2011
coleta
de
esgotos
2013
2012
2010
2011
2010
25,264
Serviceságua
2010
%
7,481
ligações
de esgoto
CLOSE TO UNIVERSAL ACCESS
esgotos tratados
SERVICES
OPERATIONAL
FINANCIAL
ENVIRONMENTAL
SOCIAL
pop, atentida água
7,295
7,481
7,679
Water
2010 connections
2011
2012
ligações de água
85
84
83
82
81
Operational
~100 %
coleta de esgotos
193
204
2013
2014
unidade
2013
2014
unidade
24.4
26.0 %
25.6
vol,
395 prod,
392 água
372
319
2,992
3,059
3,053
2,840
99.97
25.7
26.0 %
2,992
3,059
3,053
2,840
99.97
25.6
perdas
por
ligação
2011
2012
2013
2014
2011
2012
2013
2014
99.97
26.0 %
perdas
por
395
392 ligação
372
319
2011
2012
2013
2014
99.97
por
403 perdas
395
392 ligação
372
319
2010
2011
2012
2013
2014
2010
99.97 %
403 vol,
395 micromedido
392
372
319
índice
de
hidrometação
por
ligação
vol,
Waterperdas
Loss
permicromedido
Connection
1,514
1,557
1,601
1,624
1,573
2010
2011
2012
2013
2014
2014
99.97
403
395
392
372
319
1,514
1,557
1,601
1,624
1,573
índice
de
hidrometação
vol,
prod,
água
2013
99.97
2010
2011
2012
2013
2014
2013
2010
2011
403
2,952
2014
2012
2010
2,952
2013
2011
2010
2010
2012
2010
403
2010
2011
(6)
21.3
24.4
25.7
25.6
26.0
%
2010
403
2011
395
2012
392
2013
372
2014
319
(7)
thousand
thousand
thousand
thousand
thousand
2012
2013
2011
2010
2014
2,952
2,992
3,059
3,053
2,840
2014
99.97
2012
99.97
2010
2011
2012
2013
2014
2012
2013
2011
2010
2014
2013
99.97
2011
99.97
2012
99.97
2010
2011
2012
2013
2014
2010
2011
2012
2013
2014
2010
99.97
2014
99.97
2011
99.97
2013
2014
99.97
Water meter index(8)
2010
99.97
2012
2013
99.97
2014
293
297
298
299
247
2011
99.97
293
297
298
299
247
2012
2013
99.97
1,514
1,557
1,601
1,624
1,573
2,952
2,992
3,059
3,053
2,840
2014
99.97
2010
2011
99.97
2010
2011
2012
2013
2014
2012
2013
99.97
2010
2011
2012
2013
2014
2010
99.97
2011
2,952
2,992
3,059
3,053
2,840
2010
2011
2012
2013
2014
2012
99.97
2010
99.97
2011
99.97
2010
2011
2012
2013
2014
2,952
2,992 volume
3,059
3,053
2,840
2010
99.97
Water produced
1,699
1,747
1,796
1,835
1,812
2,952
2,992
3,059
3,053
2,840
1,514
1,557
1,601
1,624
1,573
1,699
1,747
1,796
1,835
1,812
2010
2011
2012
2013
2014
2,952
2,992
3,059
3,053
2,840
293
297
298
299
247
2010
2012
2013
2014
2011
2010
2011
2012
2013
2014
1,514
1,557
1,601
1,624
1,573
2012
2013
2011
2010
2014
2010
2012
2013
2014
2011
2,952
2,992
3,059
3,053
2,840
2010
2011
2012
2013
2014
Water
at retail2014
2012volume
2013
2011
2010 micro-measured
1,514
1,557
1,601
1,624
1,573
0,8
0,3
0,3
0,4
0,4
2010
2011
2012
2013
2014
0,8
0,3
0,3
0,4
0,4
1,514
1,557
1,601
1,624
1,573
2012
2013
2011
2010
2014
1,514
1,557
1,601
1,624
1,573
2011
2012
2013
2010
2014
293
297
298
299
247
1,699
1,747
1,796
1,835
1,812
2011
2012
2013
2010
2014
Water
billed
volume
at
wholesale
1,514
1,557
1,601
1,624
1,573
2012
2013
2011
2010
2014
293
297
298
299
247
2010
2011
2012
2013
2014
2010
2012
2013
2014
2011
2012
2013
2011
2010
2014
1,434
1,486
1,535
1,562
1,579
2010
2011
2012
2013
2014
1,434
1,486
1,535
1,562
1,579
293
297
298
299
247
2010
2013
2011
2014
293
297
298
247
0,8 billed
0,3volume2012
0,3
0,4
0,4
Water
at retail 299
2011
2014
2010
2012
2013
1,699
1,747
1,796
1,835
1,812
293
297
298
299
247
2010
2011
2012
2013
2014
2011
2012
2013
2010
2014
1,699
1,747
1,796
1,835
1,812
293
297
298
299
247
2010
2013
2011
2012
2014
thousand
thousand
thousand
thousand
thousand
km
km
km
km
km
km
km
km
km
km
km
km
km
km
km
km
un
un
un
un
un
un
un
un
un
un
un
un
un
un
un
un
prod,
água
vol,vol,
fat,
agua
varejo
vol,
prod,
água
vol,
fat,
agua
varejo
vol, micromedido
vol,vol,
fat,prod,
agua água
atacado
vol,
vol,micromedido
prod, água
vol,
micromedido
água
de reúso
vol,
micromedido
água
de reúso
vol,
micromedido
vol,
fat,
agua
vol,
fat,
aguaatacado
varejo
vol,vol,
fat,micromedido
agua atacado
vol fat esgoto
esgoto
vol, vol
fat,fat
agua
atacado
vol, água
fat, agua
atacado
de reúso
vol,
fat,
agua
varejo
vol, fat, agua atacado
vol,fat,
fat,agua
aguaatacado
varejo
vol,
vol fat efluentes
volfat,
fat agua
efluentes
vol,
varejo 14.7
vol
fat
esgoto
2010 vol,
2011
2012
2013
2014
Sewage
billed
volume
fat, agua
varejo
14.7
água
de
1,699
1,747
1,796reúso
1,835
1,812
1,434 vol,
1,486
1,535
1,562
1,579
fat,
agua
varejo
2010
2011
2012
2013
2014
0,8
0,3
0,3
0,4
0,4
1,699
1,747
1,796
1,835
1,812
água
de
reúso
2010
2011
2012
2013
2014
2010
2012
2013
2014
2011
1,699
1,747
1,796
1,835
1,812
2010
2012
2013
2014
fat, agua
varejo
0,8 vol,2011
0,3
0,3
0,4
0,4
2012
2014
2010
2013
2011
empregados
1,699
1,747
1,796
1,835
1,812
2010
2012 reúso
2013
2014
2011
empregados
água
de
15,330
15,019
15,015
14,753
Number
of14,896
employees
2011
2012
2013
2010
2014
0,8
0,3 fat
0,3
0,4
0,4
água
de
reúso
vol
esgoto
15,330
14,896
15,019
15,015
14,753
vol
2010
2012
2013
2014
2011fat efluentes
0,8
0,3
0,3
0,4
0,4
água de
1,434
1,486
1,535reúso
1,562
1,579
14.7
vol
fat
esgoto
2011
2012
2013
2010
2014
0,8
0,3
0,3
0,4
0,4
perdas
micromedição
água
de
reúso
2011
2012
2013
2010
2014
1,434
1,486
1,535
1,579
2010
2012
2013
2011
2014
2010
2011
2012
2013 29.81,562
micromedição
2010
2011
2012
2013
2014
2014perdas
0,8
0,3
0,3
0,4
0,4
2011
2012
2013
2010
2014
perdas
micromedição
2010
2011 fat2012
2013
vol
esgoto
2013
2014perdas micromedição 31.2
29.8
2010
2012
2013 29.8 2014
2011
perdas
micromedição
2014
vol
fat1,535
esgoto
1,486
1,579
2013
31.2
2012
produtividade
2011
2012 operacional
2013 32.1
2010
2014
2014 1,434
29.81,562
empregados
Operational
productivity
2013
31.2
vol
fat
efluentes
2014
29.8
perdas
micromedição
vol
fat
esgoto
produtividade
operacional
2011
32.0
1,434
1,486
1,535
1,562
1,579
2012
32.1
2013 15,330
849
900
919
948 31.214,753
1,008
14,896
15,019
15,015
perdas
micromedição
2012
32.1
2013
31.2
2010
2012
2013
2011
2014
14.7
2011
32.0
2010
32.3
2014 1,434
29.81,562
%
1,486
1,535
1,579
849
900
919
948
1,008
2012
32.1
vol
fat
efluentes
vol
fat
esgoto
2011
32.0
2012
32.1
2014
29.8
2010
2012
2013
2011
2014
2013
31.2
2010
32.3
2011
32.0 %
(9)
uan
uan
uan
uan
uan
uan
uan
uan
%
%
%
%
%
%
%
liter /
%
connection /
liter /
day
liter
liter //
connection
/
liter
/
connection
//
connection
day
liter
/
connection
/
liter /
connection /
liter /
day
connection /
liter
day /
connection
million
m³ /
day m³
million
liter /
connection /
day m³
million
índice de hidrometação
índice de hidrometação %
índice
hidrometação
vol, fat,deagua
atacado
%
vol,vol,
fat,
agua
atacado
micromedido
vol,deprod,
água
índice
hidrometação
%
vol, prod, água
thousand
thousand
thousand
thousand
liter /
connection /
day m³
million
liter /
connection
million
m³ /
day
2013
2010
2011
2012
2010
2011
2010
2010
2011
2013
2012
2010
2010
2012
2011
2011
2010
2010
1,434
2010
1,486
2011
1,535
2012
%
%
%
%
%
32.0
14.7
31.2
1,579
32.11,562
2013 32.3
2014
32.3
32.3
32.1
32.0
2013
2014
2013
2014
32.0
2013
2014
2013 32.3 2014
14.7
32.3
14.7
15,015
14,753
2013
2014
14.7
948
1,008
2013
2014
15,015
14,753
14.7
2013
2014
vol2011
fat efluentes
2010
2011
2012
2010
2012
2010
2012
2011
fat
efluentes
2010 vol
2011
2012
empregados
vol
fat 15,019
efluentes
15,330
14,896
produtividade
empregados
2010
2011
2012 operacional
vol
fat
efluentes
849
900
919
2010
2011
2012
15,330
14,896
15,019
2010
2011
2012
empregados
million m³
million m³
m³
million
million m³
%
%
million m³
%
million m³
million m³
million
m³
million
million m³
m³
million m³
million m³
million m³
million m³
million m³
million m³
million m³
million m³
million m³
million m³
million m³
million m³
million
million m³
m³
million m³
m³
million
million m³
million m³
million m³
million
million m³
m³
million m³
million m³
million m³
million m³
million m³
million m³
million m³
million
m³
un
million
m³
million
m³
un
million m³
million m³
million m³
million m³
million m³
connections /
employee
connections
un
million
m³ /
employee
million m³
million m³
million m³
13
6.2
6.2
2010
Financial
Gross revenue
Net revenue
Adjusted EBITDA(10)
Adjusted EBITDA margin
Adjusted EBITDA margin less
construction revenue and cost
Operating result(11)
Operating margin(11)
Result (net income/loss)
Net margin
Net debt/adjusted EBITDA
Net debt/equity(12)
Investment(13)
Unit
R$ million
R$ million
R$ million
% of net revenue
2014
11,823.4
11,213.2
2,918.7
26.0
2013
11,984.8
11,315.6
4,006.6
35.4
2012
11,391.2
10,737.6
3,605.0
33.6
2011
10,529.7
9,927.4
3,371.0
34.0
2010
9,785.9
9,230.4
3,222.5
34.9
% of net revenue
34.4
44.6
43.0
43.2
44.7
R$ million
% of net revenue
R$ million
% of net revenue
multiple
%
R$ million
1,910.7
17.0
903.0
8.1
3.1
68.1
3,210.6
3,138.8
27.7
1,923.6
17.0
1.9
58.3
2,716.0
2,843.3
26.5
1,911.9
17.8
1.9
60.9
2,535.6
2,512.0
25.3
1,380.9
13.9
1.8
58.4
2,440.2
2,672.1
28.9
1,630.4
17.7
1.9
62.6
2,194.4
Ambientais
Chemical products used in water and sewage treatment
G4-EN1
G4-EN2
G4-EN3
G4-EN5
G4-EN5
G4-EN6
G4-EN6
(14)
Unit
2014
2013
2012
2011
2010
t
273,417.9
268,959.8
232,386.1
206,376.6
203,291.8
3.56
3.97
4.54
5.18
5.14
8,613
8,309
8,552
8,196
7,773
0.71
0.63
0.65
0.64
0.61
0.43
0.42
0.42
0.43
0.41
Percentage of chemical products used in water
%
and sewage treatment deriving from recycling
Total electricity consumption Terajoules (TJ)
kWh/m³
Electricity consumption/m³of water
kWh/m³
Electricity consumption/m³of sewage
Energy consumption reduction for water – J
%
-3.2%
-
-
-
-
Energy consumption reduction for sewage – J
%
-2.4%
-
-
-
-
Reductions in energy requirements/m³ of water – kWh/m³
Reductions
in energy requirements/m³ of sewage – kWh/m³
G4-EN7
Total water withdrawn – surface
G4-EN8
G4-EN8
Total water withdrawn – underground
%
-12.4
-
-
-
-
-4.2
-
-
-
-
Million m
2,674
-
-
-
-
Million m3
166
-
-
-
-
%
0.8
0.5
2.3
2.00
1.70
G4-EN7
%
3
G4-EN10
Percentage of water consumption at ETAs
G4-EN10
Recovery percentage of washing water
for filters and clarifiers at ETAs
Direct and indirect emissions of greenhouse gases(16)
%
87.4
95.5
96.8
91.4
91.9
t CO2 e
-
2,154,407
2,141,111
1,987,645
1,873,729
Direct emissions of greenhouse gases (GEE) (Scope 1)
t CO2 e
-
1,912,750
-
-
-
t CO2 e
-
221,212
-
-
-
t CO2 e
-
20,445
-
-
-
thousand m³
1,214.9
1,679.70
1,645.79
1,572.20
1,636.80
%
0.27%
0.35
0.35
0.35
0.35
%
28.50
35.42
34.74
34.74
36.17
R$ million
29.8
32.5
27.7
30.4
-
units
95
95
65
65
65
units
51
50
50
50
50
people
58,018
64,000
56,456
72,671
-
units
20,702
19,081
30,034
126,633
726,255
t
310
381
372
286
101
2,861
2,747
2,532
2,529
2,232
G4-EN15(15)
G4-EN16(15)
G4-EN17(15)
G4-EN22(16)
G4-EN22
(16)
Indirect emissions of greenhouse gases (GEE)
deriving from energy acquisition (Scope 2)
Other indirect emissions of
greenhouse gases (GEE)(Scope 3)
Reuse water volume provided
Percentage of reuse water sold
over sewage treated at ETEs with reuse
G4-EN22(16) Reuse water percentage provided over installed capacity
G4-EN31(17)
Total investments and expenses
related to environmental protection
Number of ETEs and ETAs with
Environmental Management System (SGA)(18)
Number of ETEs and ETAs certified by ISO 14001(18)
Number of people that participated in sanitation and environmental
education guided tours in our operating units
Saplings planted voluntarily
Amount of recyclable materials collected at Sabesp 3Rs
Average consumption of alcohol fuel liters/vehicle
14
Alcohol consumption/total fuel(19)
%
53
54
50
32
48
Positive public perception on Sabesp’s
environmental responsibility(3)
%
63
69
65
78
81
7.2
7.2
2011
5.5
5.5
2012
6a6
6a6
2013
6.4
6.4
2014
valor
2011 - internos
2012
2013
2014
2011
2012
2013
2014
valor
internos
501
522
594
617
501
522
594
617
valor
internos
valorin-internal
internos
Amount invested
social programs
Social
2010
2010
382
382
382
382
2010
2010
2014
2013
2014
2010
2012
2013
2010
2012
2011
2014
2014
2010
2011
2013
2013
2010
2012
2012
2011
2011
2010
2010
501
501
2011
2011
522
522
2012
2012
594
594
2013
2013
2011
2011
2012
2012
2013
2013
valor - externos
Amount invested
social and
valorin-external
externos
54
57 programs
58
63
environmental
54
57
58
63
valor
valor -- externos
externos
54
54
2010
2010
2014
2013
2014
2010
2010
2012
2013
2012
2011
2014
2014
2010
2011
2013
2013
2010
2012
2012
2011
2011
2010
2010
2014
2013
2014
2012
2013
2012
2011
2014
2014
2010
2011
2013
2013
2010
2012
2012
2011
2011
2010
2010
57
57
2011
2011
58
58
2012
2012
617
617
2014
2014
5.5
5.3
5.5
2014
4.9
5.3
2014
4.9
5.0
5.5
5.5
4.1
5.0
5.3
5.3
4.1
4.9
4.9
5.0
5.0
4.1
4.1
million hours
worked
Accidents /
Accidents
/
million hours
million hours
worked
worked
(21)
R$
million
R$
million
R$
R$
million
million
%
%
net
revenue
net
revenue
%
%
net
net
revenue
revenue
2010
49
49
2010
2010
2010
2010
2011
2012
2013
0.6
0.6
2014
percepção responsa,
percepção
responsa,
acidentes
2014
0.4
2013
0.6
2014
66
(20)
Frequency
rate
of
accidents
with
leave
0.6
2012
70
2013
6.2
7.2
5.5
6a6
6.4
0.6
2011
2014
66
64
2012
0.6
2010
70
2013
80
2011
64
2012
83
2010
2010
2011
2012
2013
2014
80
2011
83
2010
%
net
R$
revenue
million
%
net
revenue
Accidents /
%
million hours
worked
%
percepção
responsa,
Positive public
on Sabesp social responsibility
valorperception
- internos
(3)
2014
382
2013
2012
2011
2010
2010
501
522
594
2011
2012
2013
2014
2013
Complaints ranked at Procon
2012
91
93
61
49
2011
47
47
66
617
70
64
80
2014
83
%
R$
million
5.5
reclamações ranqueadas
5.3
4.9
78
reclamações ranqueadas
5.0 %
63
63
2013
2013
47
net
R$
47
revenue
2010
4.1
2014 million
91
93
78
R$
61
49
2010
2011
2012
2013
2014
2014 million
0.4
R$
2010
2011
2012
2013
2014
0.6
0.4 R$
2014
2011
2012
2013
million
Ranking at Procon(22)
2014 million
2011
2012
2013
0.6
ranking
2010
2011
2012
2013
2014
0.6
0.4 net
54
57
58
63
47
0.4
0.6 revenue
ranking
2010
2011
2012
2013
2014
0.6 net
91
93
78
61
0.6 revenue
49
0.6
0.6 net
(1) 99% and above. (2) For methodological
there may be a margin variation of 2 percentage points up and down.
0.6 reasons,
R$
net
revenue
2010
2011
2012 basis,
2013
2014
0.6 Ltda.
(3) Survey conducted by VR Consultoria
in 2014 (5,850 interviews
entire operating
with a 1.3%
marginmillion
of
2014
2010 in the
2011
2012
2013
revenue
0.6
error and a confidence interval of 95%). (4) Includes water mains, trunk collectors, interceptors and outfalls. (5) Includes
%
%
valor - externos
reclamações ranqueadas
%
%
percepção responsa,
physical and non-physical
losses. The percentage of water loss is represented by the ratio resulting from (i) the difference
percepção
responsa,
between (a) the total water volume produced, (b) the total water
2014volume billed to customers, and (c) total water
0.4volume
66
produced (after deduction of certain non-physical water losses specified below) divided by the total water volume produced.
0.6
70
66
The following is excluded
from our calculation
of water losses: 2013
(i)2010
the water 2011
used to perform
maintenance
2012 periodic
2013
2014of water
percepção
responsa,
percepção
responsa,
mains and water reservoirs;
(ii) the water supplied to municipalities,
the water
2012 such as, for example, to extinguish fires; (iii) 0.6
ranking
64
70
used by our units; and (iv) estimated water losses associated with the water supplied to shantytowns. (6) Includes physical
2011the quotient resulting from (i) the difference0.6
64
80 percentage represents
66
and non-physical losses. The water loss
between
net
66
revenue
(a) total water volume produced, (b) total
volume and (c) total water volume produced (after0.6
excluding
83micro-measured water2010
80
70
certain non-physical losses specified below)
divided by the total water volume produced. We excluded the following from
70
83
64 used to perform periodic maintenance of water mains and water reservoirs; (ii) the
our water losses calculation: (i) the water
64
water supplied to municipalities, for example,
to extinguish fires; (iii) the water used by our units; and (iv) estimated water
80
80 to shantytowns. (7) Calculated by dividing (i) the annual average of water losses by
losses associated with the water supplied
(ii) the average number of connections of83active water multiplied by the number of days of the year. (8) Water meter connections
83
%
%
%
%
%
percepção responsa,
/total connections. (9) Number of own employees. Does not include employees assigned to other entities. (10) Adjusted
EBITDA corresponds to earnings before: (i) depreciation and amortization; (ii) income tax and social contribution (federal
income taxes); (iii) the financial result; and (iv) other operating expenses,
net. (11) Excludes finance income and expenses.
2014
66
(12) Net debt includes deduction of cash and cash equivalents, interest rates and borrowing charges of domestic and foreign
70
2013
credit facilities. (13) Excludes financial commitments assumed in the program contracts (R$63 million, R$139 million, R$155
million, R$65 million and R$116 million in 2010, 2011, 2012, 2013 and2012
2014, respectively). (14) From the total energy consumption,
64
7,194 TJ refer to the water produced, 1,314 TJ to the sewage treated and 105 TJ in administrative areas. (15) The 2014 annual
80
2011
inventory of GEE emissions has been prepared for 2015. New indicators have been adopted as of 2015. (16) These refer to ETEs
83
2010
ABC, Barueri, Jesus Netto, Parque Novo Mundo and São Miguel, which have reuse facilities. Water provided corresponds
to
the water sold and consumed internally at ETEs (for instance, pump sealing). It is the nominal capacity of facilities. The 2014
amounts exclude the volume of effluents provided to Aquapolo Ambiental, which is approximately 10.8 million meters/year.
(17) We considered environmental protection expenditures and investments, directly associated with the development and
implementation
management
corporate programs, as well as with the Water Rational Use Program – Pura.
91
93 of environmental
78
61
Other expenditures and investments related to the environmental protection are included in the total amount of operating
91
93
78 (18) In 2014, we carried out the strategic realignment of the SGA implementation
61reported herein.
investments and expenses
program and certifications, aiming at speeding up the implementation of SGA at all stations until 2024. Given this new scenario,
2011
2012
2013
2014
in 2015, we will reduce our certified stations from 51 to 35. In addition to the 95 stations with SGA implemented, we have
91
93
78 phase, totaling 129 stations. (19) Including light vehicles of owned and leased fleet,
61
2011
2012
2014
other
implementation
91 34 stations
93 under 2013
78
61
fueled by ethanol and gasoline. (20) Excludes commuting accidents and occupational diseases. (21) Includes profit sharing.
(22) When not informed, it means that Sabesp was not ranked among the top 50 complaints at Procon composing the ranking.
%
reclamações ranqueadas
reclamações ranqueadas
49
49reclamações ranqueadas
reclamações ranqueadas
2010
2011
2010
2010
2011
2011
2011
2012
2012
2012
2013
2013
2013
2014
2014
2014
ranking
2011
2012
2013
2014
ranking
15
SABESP ANSWERS FOR the supply of
In addition to operating in all the regions of the vast state of São
Paulo – with territory larger than the UK and Portugal together–
the Company operates in an area where water availability per
inhabitant is extremely critical, the metropolitan region of São
Paulo (RMSP).
With 22 million inhabitants – half of the São Paulo state population and one of the world’s largest urban agglomerations – the
RMSP is located in the headwaters of the Alto Tietê basin, a combination that leads to a per capita water supply comparable to that
of semi-arid regions. While the United Nations (UN) affirms that
minimum necessary to have convenient supply is 1.5 million liters,
the supply in the RMSP is up to 10 times smaller, with an annual
average of approximately 150,000 liters/water per inhabitant.
Between the end of 2013 and the beginning of 2014, this already historically challenging supply scenario reached alarming proportions with the installation of atmospheric high pressure zones
in the region, obstructing rainfalls and reservoir recovery. During
such period, the most severe drought in a historical series of 84
years was recorded, since when water flow stated to be measured
in the main water sources, in 1930.
Relevant Brazilian Meteorological Institutes, such as the CPTEC/Inpe and the National Center of Natural Disasters Alerts and
Monitoring (Cemaden) were not able through their radars to identify the severity of the situation in advance, which also affected
regions in the São Paulo state inland and nearby states, such as
Rio de Janeiro, Minas Gerais and Espírito Santo. A study called
“Diagnosis of the 2013-2014 Rainy Season
in the Southeast Region of Brazil, with emphasis on the Cantareira System”, jointly
prepared by both federal institutes, reveals that “the scientific community has not
identified months in advance any sign of
possible considerable reduction in rainfall
during the 2013-2014 rainy season in the
Southeast region of Brazil“.
In such analysis, the institutes point the
climate, as the main factor for the water
crisis. “[It was] intense, persistent and abnormal atmospheric pressure system which, by inhibiting rising air currents, obstructed the occurrence of usual rainfall,
as well as the passage/development of
larger scale systems regularly accounting
for more concentrated rain throughout the
rainy season.”
Accompanied by record high temperatures, the drought directly influenced the
sharp decline in the water sources that compose the RMSP’s water metropolitan system.
The Cantareira system, which is located
in the north side of the RMSP, was the first
to show the effects of the drought, in early 2014. Main supply source of the Greater
São Paulo, this system is composed of six
reservoirs interconnected by a complex
system of tunnels and channels, located in
the municipalities of São Paulo, Mairiporã,
Nazaré Paulista, Piracaia, Vargem and Joanópolis, the latter two in bordering with
the state of Minas Gerais, approximately
100 km from the capital city.
Water is transferred from one reservoir
to another one due to severity to a pumping
station which pumps to the treatment station.
SABESP OPERATED AREA
ALTO TIETÊ BASIN
364 municipalities, totaling 25.3 million people
in the State of São Paulo and serving five
municipalities at wholesale, with a population
of 3.1 million inhabitants.
SUPPLY CHALENGES IN AN
ADVERSE CLIMATE SCENARIO
22
A persistent and
abnormal atmospheric
pressure system caused
a draught of historical
proportions on the
Cantareira System
region, including the
Jaguari dam, in this
image of early 2014
Half of
São Paulo Statte
population
Ideal minimum
availability
(acording to the UN)
million
inhabitants
Alto Tietê Basin
water avaiability
Sabesp operated
area
Sabesp operates a wider
area than Portugal and
England together
150,000
cubic
1.5
million
Relevant Brazilian
Meteorological
Institutes were
not able through
their radars
to identify the
severity of the
situation in
advance, which
also affected
regions in the São
Paulo inland and
nearby states such
as Rio de Janeiro,
Minas Gerais and
Espirito Santo
RMSP has only
10%
of water availability
considered ideal by
the United Nations
cubic
meters
per year
meters
per year
17
Cantareira System constists of six dams.
Water flows from one to another by gravity
until a pumping station which raises it to
the ETA Guaraú. When the crisis deepened,
became necessary the installation of pumps
to capture water concentrated below the
level of the floodgates that made
transport by gravity systems, a volume
called “technical reserve”.
Cantareira System – Water inflow in m3/s
Amount of water flowing into reservoirs
80
70
60
50
40
30
20
10
0
outubro novembro dezembro janeiro fevereiro
october november december january
março
abril
maio
junho
julho
agosto setembro
august september
february
march
april
may
june
july
Historical average inflow
30.6
35
53.1
70.5
73.5
66.9
48.4
38.4
35.3
28.8
24.5
25.6
Historical minimum inflow
14
14
21.8
26.9
27.6
28.1
24.7
19.9
16.5
13.9
12
11.8
1953
17.5
26
31.5
26.9
34.5
29.8
34.6
23.8
20.7
17.6
16.6
16.2
2013/2014
25.1
22.1
22.5
15.4
10.5
18.9
17.2
10.1
10
6.4
8.2
9
2014/2015
5.2
8.8
16
11.5
40.7
-
-
-
-
-
-
-
Afluência de October 2014 a January 2015
Aggravation of water crisis due to the lower inflow compared to previous year
31% of historical average inflow
79% of historical minimum inflow
Under normal
conditions,
it supplies
approximately
9 million
inhabitants of
the São Paulo
Metropolitan
Region, with an
average intake
of 33 thousand
liters per second
18
The system as a whole stores approximately
1.5 trillion liters of water, of which 982 billion
liters above the level of the gravity extraction
floodgates (also known as useful volume) and
the remainder below the floodgates, volume
referred to as “technical reserve”.
Under normal conditions, it supplies
approximately 9 million inhabitants of
the RMSP with an average intake of 33
m³/s (31 m³/s from the PCJ Basin, where
the Cantareira System is located and 2
m³/s from the Alto Tietê Basin). Another 5
m³/s may be released to rivers supplying
the Metropolitan Region of Campinas and
Jundiaí. The removal conditions are defined by the National Water Agency (ANA)
and the Water and Electricity Department
(DAEE), in compliance with the grant of the
system’s exploration, dated 2004.
During 2014, the water inflow reached
average levels almost 50% lower than the
minimum levels recorded between 1953-1954, the two-year period
with the most critical indexes until then.
According to the Agronomic Institute of Campinas, January recorded the highest drought in 125 years of monitoring the Cantareira
region. This situation, combined with the withdrawal of water to supply the population and the above-average heat seen during summer,
resulted in a continuous drop in the level of reservoirs composing the
system. In October 2014, instead of a rainy period, the situation was
even worse. Between October 2014 and January 2015, water inflow
reached only 31% of the historical average and 79% of the historical
minimum inflow (graph). In January 2015, average water inflow to the
Cantareira System was 40% lower than January 2014 and only 13% of
the average flow for the month.
In this scenario, ANA and DAEE during imposed continued reductions of water flow withdrawn by us from the Cantareira System, ensuring the reserved water to not deplete within a short period of time. Thus, in order to continue supplying water to RMSP’s
population and reduce Cantareira’s water production, in order to
ensure the survival of the water source until rainfall returns to normal levels, we took a series of actions which are detailed in the
chapter Confronting the water crisis (page 28).
Pumping system
to extract water from
the technical reserve
on Jaguari dam
19
G4-EC2
THE MEASURES TO mitigate the
drought resulted in a significant decrease in water
billed volume and revenue from services,
with a material adverse effect on the Company,
which may worsen if the drought
escalates in severity.
IMPACTS AND CONSEQUENCES OF THE
WATER CRISIS
From time to time, Sabesp faces a reduction in water availability in the water sources due to droughts. The Southeast of Brazil,
particularly southern Minas Gerais State, the Piracicaba river
basin (from which we extract the water used in the Cantareira
system) and the north side of the RMSP have experienced below-average rainfall since 2012 and the drought got worse from the
end of 2013 to September 2014.
During the rainy season, which began in October 2014, rainfall
was significantly below average from October 2014 to January
2015 and returned to a satisfactory level in February, when it was
above average for the month.
OThe result was a negative effect on reservoir levels, already
down due to the severe drought in the 2013-2014 summer. The
depletion of water is worse in the Cantareira system, the largest
one in the RMSP. As a result of the drought and the low volume
in this system, DAEE and ANA, since March 2014, have gradually
reduced the amount of water that Sabesp is permited to extract
from this system. In February 2015, Sabesp was authorized to extract 13.5 m³/s.
In March 2014, the Company was allowed to extract up to 33
m³/s, 31 m³/s of which from the PCJ water basin (Piracicaba, Capivari and Jundiaí Rivers), where the Cantareira system is located,
and 2m³/s from the Alto Tietê water basin. In order to maintain a
non-stop supply and continue meeting consumer demand even
with lower water availability, the Company has been adopting a
series of measures.
In 2014, billed water volume fell by 3.1% and net operating revenue declined by 0.9% from 2013.
If the drought continues and reservoir levels remain low, Sabesp will not be able to ensure that the bonus program and other
mitigation measures taken in 2014 and early 2015 will be discontinued nor that it will be able to serve all the population in its
area of operations. It is worth noting that the users’ increased
awareness of the need to save water and the implementation of
the bonus program have reduced per capita water consumption.
Sabesp cannot ensure that at end of the bonus program the said
consumption will return to levels that existed prior to the current
water crisis. Lower per capita consumption may adversely affect
our business and result of operations in the future.
In addition, the Company had to make a series of investments
to continue providing water to the population, which resulted
in higher costs and a revision of the capital expenditure. If the drought persists,
the Company may be obliged to take more
drastic measures, including the implementation of water rotation.
Concession of the Cantareira system
The water extraction from the Cantareira system is granted to Sabesp by the ANA
and the DAEE; the usage rights grant was
renewed in 2004 for ten years and would
have expired in August 2014. However, due
to the severe water shortage in the Cantareira system, the usage rights grant was
extended until the end of October 2015.
The Company will try to renew the usage rights granted by ANA and DAEE on the
same basis as from 2004 to 2014, which allowed the extraction of 31 m³/s from the PCJ
water basin. However, the severe drought
in 2014, the driest year in the 84 years of
record, has brought a new reference for
minimum baseline of rainfall and water in-
Grant for extraction from the Cantareira System
{
Jaguari-Jacareí dam, in
Bragança Paulista (SP),
is one of the six dams
that form the
Cantareira System
59.1% smaller
33 m3/s
13.5 m3/s
Extraction on march/2014
Extraction on feb/2015
Rains returned to
a satisfactory
level in
February/2015;
at the begining
of the 2014-2015
rainy season,
from October to
January, they
remained below
average, as had
happened on
2013-2014
Summer
The National Waters Agency (ANA) and
the Waters and Electrical Energy
Department (DAEE) grant Sabesp to extract
water from the Cantareira System. This
grant was given in 2004 and lasted for 10
years, until August 2014. Due to water
scarcity, grant was extended until October
2015. Sabesp seeks to renew it.
21
flow, which can make the discussion even
more complex. It is not possible to ensure
that the usage rights grant will be renewed
on the same basis, especially because it is
not clear how these new minimum baselines and the consequent depletion of water
source will factor in the negotiation.
The technical parameters of these
historical records, which were used the
analyze the removals of water from reservoirs and, consequently, the concession,
may be discussed in light of this new reality and, on the other hand, it is not possible
to predict if the crisis will persist, worsen
or be resolved in the immediate future.
ERP technology
increases
confidence and
assertiveness
in decision
making in the
financial and
commercial areas
and in regard Risk Management
to corporate
governance
Sabesp’s risk management
activities
are carried out in accordance with international standards and Brazilian technical
standards, specifically COSO – 2013 – The Committee of Sponsoring Organizations of the Treadway Commission and ABN NBR
ISO 31.000 – Risk Management – Principles and Guidelines. All
the work is also aligned with the Best Corporate Governance
Practice Code of the Brazilian Institute of Corporate Governance (IBGC) and the Company’s strategic planning, processes and
organizational culture. In addition to the risk related to the water
crisis, the Company is subject to other risk factors, described in
item 4.1 of the Reference Form1, and mitigating actions are established based on action plans, with ongoing monitoring.
Legal Proceedings
In the normal course of its activities, Sabesp is party to civil,
environmental, labor and tax legal proceedings, among others.
Several individual disputes account for a significant portion of
the total amount of these claims. Our financial statements include proceedings classified as possible and probable losses and
only those classified as a probable loss are provisioned for. The
relevant proceedings are described in Note 19 to the Company’s
financial statements attached hereto.
Technological management: SiiS
“
All the work
made at Sabesp
is also aligned
with the
Best Corporate
Governance
Practice Code
of the Brazilian
Institute
of Corporate
Governance
(IBGC)
The Company is committed to improving the efficiency of its
internal processes by implementing Sabesp’s Integrated Information System (SiiS). The system is enabled by the Enterprise
Resource Planning – ERP technology, composed of SAP software and a commercial customer relations software by the company Engineering.
The initial estimate was that the SiiS would be in operation
as of mid-2014, with the implementation of the SAP modules.
However, during the tests, it became clear that a number of
fundamental functionalities had to be redone and exhaustively tested before being implemented. As a result, the activities
were re-planned, taking into account the number of professionals allocated to the project. The team with approximately
150 Sabesp professionals and another 150 professionals from
the contracted consortium is still working to enable the implementation of the SAP modules in 2015 and the new commercial
system in mid-2016. The technology increases confidence and
assertiveness in decision making in the financial and commercial areas and in regard to corporate governance. This will be
possible through the provision of integrated and consolidated
information on real time. Another competitive advantage is the
change in the organizational culture, to be incorporated by the
employees, due to the need for change in the current processes
in order to adopt best market practices.
1 – The Reference Form is available on the Portuguese version of www.sabesp.com.br/investidores in the Informações Financeiras e Operacionais –
InformationFormulário de Referência e IAN
22
During 2014,
awareness campaigns
were carried out,
such as materials
and information
distribution
on the São Paulo
subway stations
(photo)
Decanters and
flocculators of ETA
Rodolfo José da Costa
e Silva (Guarapiranga
System), in the south of
the capital
SERVICE UNIVERSALIZATION in the area
of operations remains as a goal to be pursued,
propelled by the execution of structuring programs
and a large amount of investment .
1
STRATEGY AND
VISION FOR THE FUTURE
Financial health, operational efficiency and employees’ valuing
are some of the pillars that support our strategy.
The plan resulting from this strategy was conceived to ensure
continued supply in the regions served by the Company.
Between 1995 and 2014, Sabesp invested R$10.9 billion in the
RMSP in order to increase water availability, the capacity to produce and distribute treated water, and the integration between the
production systems and the distribution network. In this period,
our production increased from 57 m³/s to more than 73 m³/s.
The planning and implementation of our production systems
in São Paulo metropolitan region were conceived considering
the water availability referenced to the average inflows of the
historical series of the last 84 years, and the 1953/1954 two-year
period was until then considered the most critical period in São
Paulo metropolitan region. However, the situation experienced
between the end of 2013 and the beginning of 2015 significantly
reduced water availability in virtually all the water sources in the
RMSP to well below the minimum baselines that has driven the
production systems design.
In order to deal with this situation, Sabesp has adopted a
series of actions that reduced dependence on the Cantareira
system (the largest system in the RMSP and the water source
most affected by the crisis) and consequently increased the use
of water available in other production systems located in RMSP.
These measures reduced the average outflow of the Cantareira
system by half, as detailed in the chapter Confronting the Water
Crisis (page 30).
In order to ensure continuous supply, the Company will implement medium- and short-term initiatives to increase water avai-
lability by 30% until the end of the decade.
Public-private partnerships (PPPs) and
the installation of new plants through the
leasing of assets are partnership modalities that have already been adopted and
may be expanded to accelerate the execution of works, strengthen our investment capacity, expedite the response in
the implementation of infrastructure, especially in light of this crisis, and enable
the exchange of technology and knowledge between those involved.
Analysis of Goals
Important challenges were brought before our Company in 2014. Nevertheless, we
maintained the trajectory of service expansion with 231,500 new water connections
and 244,300 new sewage connections.
At the end of 2014, the collected sewage treatment ratio was 77%, in line with
2012 and slightly less than in 2013. This
below-expected performance was the
result of water shortage, leading to lower
water consumption and, consequently, lower amount of sewage to be collected and
treated, especially in the areas served with
sewage treatment.
In 2014, the water billed loss index fell
to 21.3%, reflecting our efforts under the
Corporate Program for Reduction of Water
Loss, which comprises actions for network
maintenance (repair of network leakages,
inspection of irregular and idle connections), asset renewal (replacement of networks, branches and water meters) and
Goals
Actual
2014
Water supply2
Sabesp
maintained the
trajectory of
service expansion
in 2014, with
231.5 thousand
new water
connections and
244.3 thousand
new sewage
connections
2014
2015
2016
2017
2018
2020
Close to universal access
Sewage collection (%)
85
85
86
88
89
90
95
Collected sewage treatment (%)
77
78
81
86
88
90
95
New water connections (thousand)
231.5
180
177
172
164
164
3163
New sewage connections4 (thousand)
244.3
235
242
242
242
237
4743
Water losses – revenue (%)
21.3
24.0
23.4
22.2
21.2
20.1
18.1
1 – According to data from the National Sanitation Information Service (SNIIS), released in 2013 by the National Department of Environmental
Sanitation of the Ministry of Cities, Sabesp is responsible for around 30% of the sanitation investments in Brazil. 2 – 99% or more. 3 – Accumulated
target for 2019/2020. 4 – Total sewage connections, including those in the scope of the Se Liga na Rede (Connect to the Network) program.
25
2014 PROFIT SHARING PROGRAM
Indicators
EBITDA fall is
consequence of
population’s
support to
encouragements
to water
consuption
reduction
offered by
Sabesp
Unit
Goal
Actual
Adjusted EBITDA margin1
%
34.0
26.0
Positive customer satisfaction perception
%
85
80
Number of new water connections thousand units
180.0
231.5
Number of new sewage connections (conventional) thousand units
215.4
238.1
Number of new sewage connections (Se Liga na Rede) thousand units
19.6
6.2
Water billed loss index
%
24.0
21.3
Collected sewage treatment index
%
78
77
intensification of the management of pressure in the network to mitigate the effects
of the water crisis.
As in previous year, the Company’s
profit sharing plan was based on some
operational, economic-financial and customer satisfaction goals. The plan complies with Decree 59,598, of October 16,
2013, and set the compensation linked to
employees’ performance. The Company
fully met three of the seven targets, as
shown above.
As a result of the severe drought that
has affected our region of operations
since late 2013, we have encouraged our
customers to reduce water consumption,
resulting in a decline in revenue and, consequently, in EBITDA.
Regarding customer satisfaction, although we did not reach the target, we
consider the result to be positive because
it shows that, despite the water crisis that
is affecting the entire southeast region,
our customers recognize the dedication
and the efforts of Sabesp’s technical staff
towards meeting their needs.
The target for new sewage connections in the scope of the Se Liga na Rede
program was not reached. The Company’s
focus on efforts to manage the water
crisis together with the difficulties inherent in the program, which depends on
the customers’ adhesion and hydraulic
adaptations inside the homes, have led to
below-expected performance.
Ethics and Transparency
The ethical values that underpin Sabesp’s actions in its relationships with its stakeholders are set forth in its Code of Ethics.
Its compliance is monitored by the Committee of Ethics, which is
supported by tools such as the Whistle-blowing Channel, which
also receives anonymous complaints, the Corporate Accountability Procedure, the Ombudsman and the Consumer Information
Service.
Sabesp’s Ombudsman is a qualified relationship channel with
two fronts:
• Last instance of the company’s customers defense, answering in second instance those who, for any reason, were unsatisfied or they were not given answer within the term established
during their preliminary contact with Sabesp.
• Last instance of the company’s image defense, operating
together with consumer defense agencies, consumer defense
non-governmental organizations, besides answering customer’s
demands sent by other government entities, such as government
secretaries and other ombudsmen.
G4-SO5/HR3 In 2014, 178,783 complaints were received, among information provided, denunciations, compliments, criticisms, suggestions and complaints. Specifically in relation to denunciations,
108 were recorded, of which 79% were solved and 21% are being
analyzed. Out of the total, 8% relates to improper behavior, such as
harassment, discrimination, persecution and unfair treatment. In
regard to the claims accepted, 43 own or outsourced employees
were punished (8 warnings, 2 suspensions and 33 dismissals).
The analysis of all these types of information allows the Ombudsman to provide the Top Management with reports, allowing
immediate actions towards emergency demands or the implementation of improvements to processes and services rendered.
The attentive monitoring of our Ombudsman analysts with
Procon contributed to the company’s efforts of systematically
1 – Adjusted EBITDA corresponds to earnings before (i) depreciation and amortization; (ii) income tax and social contribution (federal income
taxes); (iii) the financial result; and (iv) other operating expenses, net.
26
reducing the number of complaints. This initiative’s most visible
result was the company’s exclusion from the complaint ranking
over the last five years. This result underlines our daily customer
care efforts.
In addition, in accordance with the principle of business
transparency and pursuant to Federal Law 12,527/2011 and State Decree 58,052/2012, Sabesp provides the Citizen Information
Service (SIC), a channel that provides citizens with access to
information on public entities.
The Company’s minimum information, required by said legislation, is available at www.sabesp.com.br, under the SIC link, in the
top menu, where there is also a channel for citizens to request other
information. In addition to the website, citizens can obtain information in person at Rua Costa Carvalho, 300.
In 2014, 533 requests for information were responded to via
telephone or the Internet. Over the same period, citizens filed 37
appeals in the lower court and 19 in the appellate court, seeking
additional information
Combat of corruption
On January 29, 2014, Law 12,846/2013, known as Anti-corruption
Law, came into effect in Brazil introducing the concept of strict
liability for private legal entities in the country, holding companies
involved in corruption acts in the administrative and civil spheres
liable. In addition to complying with the Brazilian Anti-corruption
Law, because its shares are listed on the New York Stock Exchange, Sabesp is also subject to the Foreign Corrupt Practices Act
(FCPA), a similar law effective in the United States since 1977. In
accordance with this law, companies may be held liable even if
the corruption acts are practiced by commercial agents, representatives or other parties acting on their behalf, both in the United States and outside that country.
Total losses
(micro-mesured)
50%
37%
Sabesp’s Loss Index fell
4.5% compared to 2013,
partly due to the
intensification of
Pressure Reducing
Valves (PRVs)
Sabesp is committed to conducting its
business in a legal, ethical, transparent
and professional manner, extending to its
employees and its third-party representatives, the obligation to understand, accept
and execute these guidelines.
Our compliance program is in line with
the recommendations of the Organization for
Economic Co-operation and Development
(OECD), the United Nations Office on Drugs
and Crime (UNODC) and the World Bank. Because we are a mixed capital company, our
program deals with two different scenarios,
the active corruption (to pay a bribe) and
passive corruption (to accept a bribe), and
is structured based on Senior Management’s
Commitment; Functional Structuring; Values,
Conduct and Whistle-blowing Channel; Relationships with Third-parties; Governance
and Internal Controls; Risk Management;
Training and Communication.
G4-56/G4-SO3/SO4 In 2014, we strengthened our Compliance program through
the diagnosis and the mapping of our current compliance practices and defined
action plans for 23 procedures considered to be material based on the analysis
of corruption and corporate fraud risks in
2013. This work directly involved auditors,
and the Company’s managers. In addition,
the Company disclosed its ethical values
through in-person and virtual lectures and
training to approximately 1,520 employees
who hold leadership positions.
Used by Sabesp since 1997 and adopted
in countries such as England and Germany,
PRVs are activated to reduce water pressure
in the pipelines during periods of lower demand;
that allows realtime monitoring of the amount
of water used in a certain region and
remotely calibrate the pressure in the
local pipeline, thus reducing the amount
of water loss due to leakages
National average*
Physical loss
Caused by leakages
on the pipelines.
29.8%
Commercial loss
Water that disappears from the
network by means of illegal
connections, frauds, or
inaccurate water meter readings.
in some States, water
loss index* is greater
than 50%
Sabesp
0
2014
* - Source: National System for Sanitation Information (SNIS)
27
AT THE FIRST SIGNS of drought,
WATER
in the beginning of 2014, Sabesp implemented
emergency measures to maintain regular
supply in the Metropolitan Region of São Paulo
(RMSP) and in several affected regions
CONFRONTING THE
in the whole State.
WATER CRISIS
The interior municipalities, experiencing serious situations, were aided
by the transfer of water intake sources, new mains and the increase
of water production capacity. In the RMSP, the most severely affected
area, the capacity for infrastructure integration between the production
systems and the contingency initiatives prevented the adoption of more
drastic measures to the population, such as the water rotation1.
The strategic efforts resulted in a 30% decline in water withdrawal from reservoirs in the Greater São Paulo – from 71 m³/s
in January 2014 to 50 m³/s in February 2015. We focused our greatest efforts on Cantareira, the most seriously affected system; its
contribution to the metropolis’ supply fell down by 56% in terms
of water withdrawal. These numbers were achieved through the
following initiatives:
Transfers among systems
Sabesp has eight water production systems in the Metropolitan region of São Paulo – Cantareira, Alto Cotia, Baixo Cotia, Guarapiranga,
Rio Grande, Rio Claro, Alto Tietê and Ribeirão da Estiva Together, under
normal weather conditions, they have water production capacity of 73
m³/s and they compose the Water Supply Integrated System (SIM). They
are interconnected by large water mains comprising the Metropolitan
Water Main System (SAM), which is liable for carrying treated water to
the sector reservoirs and then to approximately 20 million people in the
Greater São Paulo.
Due to the exorbitant decline in the Cantareira system’s stored volume, which began in January 2014, one of the first emergency measures adopted was to transfer the water flow from other production
systems in order to serve the regions which, under normal conditions,
would be only supplied by the Cantareira system.
In September 2014,
technical reserve
extraction pumps
began operating at the
Atibainha dam (photo)
in the municipality
of Piracaia; reservoir
that is part of the
Cantareira System
Four systems had their supply areas expanded. Due to its proximity, the Alto Tietê
system was the first alternative to assist the
Cantareira System. Its water production increased to the maximum level, 14.97 m³/s, in
February 2013 and began supplying part of
the metropolitan region’s east side, expanding from 3.5 million inhabitants supplied in
February 2014 to 4.5 million one year later.
In 2015, thanks to the contribution from
other systems, its production was reduced
to 11.04 m³/s. The Rio Grande (Billings) and
Rio Claro systems are liable for a fraction of
the southwest region.
For the first time since the beginning
of its operations, in 1973, the Cantareira
system, which served approximately 8.8
million people before the crisis, at the
beginning of March 2015 were supplying
5.6 million clients. As a result, it stopped
being the greatest water producer for the
RMSP in February 2015, once surpassed
by the Guarapiranga system, which is now
serving 5.8 million people in the south and
west regions, versus 3.9 million people before the crisis. With a useful volume of 171
billion liters of water, this system has been
maintaining since the start of drought period, a favorable level of water availability. Within one year (from February 2014 to
February 2015) its water production increased from 13.77 m³/s to 14.49 m³/s, above
the 14.03 m³/s produced by the Cantareira
system, followed by Alto Tietê, which delivered 11.04 m³/s.
Despite the installed infrastructure, the
sectorial maneuvers for systems supply
alternation required a series of structural
adaptations in hydraulic systems, boosters and pumping stations, among other
urgent interventions.
In addition to higher transfer of flows,
SIM gained more capacity to treat and store
water. Regarding treatment, capacity went
up 2 m³/s, enough to supply a city with ap-
On early 2014,
the Cantareira
System stopped
being the greatest
water producer
of São Paulo for
the first time
since the beginning
of its operations,
in 1973
“
The strategic efforts resulted in a 30% decline
in water withdrawal from reservoirs in the Greater São Paulo –
from 71 m³/s in January 2014 to 50 m³/s in February 2015
1 – A rotation situation is characterized when there are programmed water supply interruptions in different regions (sectors) of city for certain periods
of time (hours or days).
29
proximately 800,000 inhabitants. The Guarapiranga System gained more 1 m³/s – from 14
m³/s to 15 m³/s, and the Rio Grande (Billings)
System, increased from 5 m³/s to 5.5 m³/s. In
early February 2015, with more water transferred from the water mains of Guaratuba
river (maritime watershed) to Ponte Nova
reservoir of the Alto Tiete system, another
0.5 m³/s was added to this system.
Additionally, we delivered eight sector
metal reservoirs of treated water: two in
Alto da Boa Vista, one in Capão Redondo (Parque Fernanda district), one in Jardim Ângela, one in Itapecerica da Serra (Campestre district), one in Diadema (Inamar district), one in Franco
da Rocha and one in São Bernardo do Campo. Summing up a
capacity of 83 million liters, which adds approximately 7% to the
SIM’s reservation capacity, these sector water tanks are essential in high districts or distant from reservoirs, as they ensure
the pressure necessary at networks so that water reaches the
households. Until April 2015, other seven units will be installed.
The set of 15 large tanks will increase by 10% the stored water
inventory in the Greater São Paulo.
Discharge from
the base of the dam
Portal
Active volume
Stored
volume
Whence water flows
downstream (PCJ Basin)
Supply
to
RMSP
Water production total reduction in RMSP = 21.2 m³/s
Savings from bonus = 6.3 m³/s
Savings from reduction of pressure/losses = 13.0 m³/s
Savings from permissionaires = 1.8 m³/s
Cantareira
– 17.8 m³/s
Average production
in Fev/2015 = 14.03 m³/s
Piracicaba-Capivari-Jundiaí (PCJ)
Basin rivers
+0.6 m³/s
Average production
in Feb/2015 = 14.49 m³/s
30
Technical
Reserve
–3.5
–5.4
Alto Tietê
–8.2
–0.6
–1.3
– 3.9 m³/s
+0.8
–3.1
–0.3
Guarapiranga
Tunnel
–1.3
–1.5
+3.4
Rio Grande / Rio Claro
–0.2 m³/s
–0.2
–0.2
+1.0
–0.8
Technical reserve
The Cantareira system as a whole stores approximately 1.5
trillion liters of water, 982 billion liters above the level of the gravity
extraction floodgates and the remainder below the floodgates, volume known as “technical reserve”.
Under normal conditions, this system is liable for supplying water to 8.8 million inhabitants, with average intake of up to 33 m³/s (of
which 31 m³/s from the PCJ basin, where the Cantareira system is
located and 2 m³/s from the Alto Tietê basin) to supply RMSP. Another 5 m³/s are released to the rivers supplying the metropolitan
region of Campinas and Jundiaí.
The National Water Agency (ANA) and the São Paulo State Water
and Electricity Department (DAEE) are bodies which resolve on the
conditions for water withdraw from the system, complying with provisions of the grant for exploration of the Cantareira system in 2004.
As the simulations carried out in the summer of 2014 indicated the
potential depletion of the active volume of the Cantareira system before the beginning of the next rainy season, Sabesp obtained authorization from ANA and DAEE to use part of the Cantareira system’s
technical reserve – the water below gravity extraction level.
In order to be able to use this reserve, Sabesp had to carry out
an emergency construction of dams, channels, pipes and a set of 17
floating pumps. The interventions, executed in less than two months
and ended in May 2014, represented an expense of R$80 million and
enabled the intake of the first quota of the technical reserve, with
182.7 billion liters. The second quota, with 106 billion liters, began to
be extracted at the end of October 2014. The water is pumped to Cachoeira and Paiva Castro reservoirs, the latter at the Alto Tietê basin,
following to Guaraú ETA, in the north of the city of São Paulo. At the
station, water is treated within the quality standards observed by Sabesp. The water distributed to the population complies with Ordinance
2,914 of the Ministry of Health and is analyzed
at Sabesp’s laboratories, which observe the
NBR ISO/IEC-17025 standards and are certified by Inmetro. The technical reserve’s water
quality is exactly the same as that gravity-extracted water volume. By means of the so-called base discharge, for decades, the water has been released to the rivers that follow
to the Bragantina and Campinas regions, both
located in the São Paulo State countryside, to
be used in public supply.
With R$80 million
investments,
Sabesp held
in less than
two months
actions that
enables the
extraction from
Cantareira
System’s the
technical reserve;
dams, channels,
pipes and a set
of 17 floating
pumps were built
Bonus e onus
The granting of bonuses to those who reduce water consumption and charging of a
contingency tariff to those who waste water were strategic measures to restrain demand. The bonus program was implemented
in February 2014 and was divided into three
phases. Initially, 8.8 million inhabitants were
served by the Cantareira system in the north
and mid sides of the São Paulo city, part of
the east and west sides of the city and other
10 municipalities of the Greater São Paulo.
Those who reduced their average consumption by, at least, 20% in relation to the
average recorded in preceding 12 months
would have a 30% discount in the bill. Subsequently, in April 2014, the measure was expanded to a total of 31 municipalities, nearly
31
It is estimated
that each São
Paulo State
citizen has been
reached at least
40 times by
water-saving
messages.
eight adevertising
campaigns with
over 3,000 Tv
insertions and
other 13,000
radio insertions
were carried ,
including also
newspapers
and magazines
publications and
intense media
coverage
17 million customers, including, besides the
Greater São Paulo, the regions of Bragantina and Campinas, which rely on the Cantareira system. In November 2014, those who
reduced consumption between 10% and
15% now receive 10% discount on their bill
and 20% discount to consumption reduced
by 15% to 20%. Reduction of 20% or more,
the 30% discount remains. This model will be
in force until the end of 2015.
Concurrently with the growing press coverage, eight advertising campaigns were also
carried out in 2014, with over 3,000 TV insertions and other 13,000 radio insertions, besides
publications in newspapers and magazines,
allowing to estimate that each São Paulo State
citizen has been reached, at least, 40 times by
water-saving messages.
In February 2015, the State government began a campaign called Each Drop Counts, reinforcing the relevance of the water rational use.
More than 20 million printed materials were
distributed by the Guardiões das Águas (Water
Guardians) team (detailson page 60).
The population immediately reacted to the impact of this task
force to raise awareness about the severe water crisis. In the
second month of the program, 81% of consumers had reduced
consumption and 39% of them received bonuses, an effort which
increased month after month and in February 2015, 71% of them
received bonus out of the 81% of those reduced consumption within the new model of different bonus levels. At the end of 2014,
daily per capita water consumption in the Greater São Paulo was
126 liters, versus an average of 163 liters/inhabitant/day before
the bonus grant in January 2014 – which represents a 22% decline in individual consumption.
In February 2015, a contingency tariff was established to those customers who increased consumption, after due approval by the regulator. Also valid until December 2015, the tariff mechanism applies a 40%
burden on the tariff for those exceeding the average consumption from
February 2013 to January 2014 by up to 20%, or 100% over the tariff for
those exceeding 20% of the average.
These fees incur on all users, including those who have firm demand
contracts (large-sized consumers). Customers with water consumption
corresponding to or lower than 10 m3, hospitals, first-aid clinics, nursing
homes, police stations and prisons are exempted. In the March bill, 12%
of consumers had their bill adjusted due to higher consumption. Another 7% with this profile were not included in the surcharge, since they
consumed less than 10 m³/month.
Bonus Program
Reduced consumption and received bonus
Reduced consumption (without bonus)
Adhesion to bonus program at RMSP
22%
13%
22%
10%
19%
May/14
Jun/14
Jul/14
Aug/14
Sep/14
Oct/14
Nov/14
Dec/14
Jan/14
Feb/14
3.3
3.9
2.4
3.9
3.6
3.6
4.1
4.8
5.4
6.3
12%
25%
25%
23%
24%
savings
of
71%
65%
53%
50%
26%
25%
49%
51%
25%
24%
28%
26%
27%
21%
46%
52%
45%
31%
24%
80
70
60
50
40
30
20
10
0
Consumption above average
66%
(%)
m³/s
m³/s
m³/s
m³/s
m³/s
m³/s
m³/s
m³/s
m³/s
m³/s
Of which: 12% com onus and 7% social tariff/minimum consumption (without onus)
32
Reduction of water loss
G4-EN27
Although it was on the spotlight in 2014 due to the severe water crisis, the water loss control is not a recent concern.
Relevant efforts permanently endeavored by Sabesp for an efficient water management, actions fighting against losses continue, for at least, two decades. In 2009, it was transformed into a
corporate program.
Implemented in partnership with JICA (Japan International Cooperation Agency), the Corporate Water Loss Reduction Program
is divided into two fronts. The first is focused on fighting what we
technically call physical loss, which are caused by leaks in the
distribution network. The fight agai nst commercial loss – water
that disappears from the network by means of illegal connections,
frauds, or inaccurate water meter readings—is another front.
In the 12 years of program activity (2009-2020) investments of
R$5.1 billion are estimated, either by means of our own investments or taken out with JICA and the, brazilian development banks
Caixa Econômica Federal and BNDES. Over the past seven years,
from 2009 until the end of 2014, we have invested R$2.6 billion, of
which R$541 million only in 2014, with change of equipment, pipes,
water meter, besides the scanning to identify frauds.
Sabesp’s currently metered loss ratio is 29.8% (18.8% of physical losses and of 11.0% commercial losses), 4.5% down on the
31.2% recorded in 2013. National average total losses came to
37% and, in some states, this percentage exceeds 50%, according to the National Sanitation Information System (SNIS). By the
end of the decade, Sabesp intends to reach a 25.9% metered loss
ratio, which accounts for 16.8% of physical losses, a level similar to UK and above countries like France and Italy, with ratios
between 25% and 29%. These goals have been revised, due to
the Program’s budgetary restriction, which is a result of current
water crisis.
In relation to 2014, it is worth mentioning that the reduction was
influenced by the intensified management of network pressure (see
details below). Leakage detection efforts were also expanded by
sending teams to the streets of RMSP in order to contain damage
and loss in the pipelines. The efforts reduced average repair time
from 60 to 17 hours. The increasing number of alerts coming from
the population through the Company’s channels and even via mail
from the CEO were essential to the efficiency of our work. For underground leakages, which are most of the cases, Sabesp has a
geophone system, which has been improved
(see box on this below).
Concurrently with these measures in
progress, in 2014, we reinforced important
initiatives to fight against losses, e.g. the installation of pressure reducing valves (PRVs).
Sabesp has been using the PRVs since
1997, which are adopted by the world’s
best systems, such as UK and Germany,
the PRVs are activated to reduce water
pressure in the pipelines during periods of
lower demand, when networks are more
pressurized. It also allows real-time monitoring of the amount of water used in a
certain region and remotely calibrate the
pressure in the local pipeline, thus, reducing the amount of water lost due to leakages. Due to the exceptional intensity of the
water crisis, other 124 units were implemented in 2014, totaling more than 1,300
items of equipment in operation throughout 14,000 km of network in the Metropolitan Region of São Paulo.
With rainfall below average until January 2015, the water inflow was even lower in this period, compared to 2014, and
we intensified the pressure reduction.
This measure raised criticism that Sabesp
would not be observing the rules imposed
by the Brazilian Association of Technical
Standards(ABNT). The fact, however, is
the ABNT restricts a minimum pressure of
10 meters of water column (mwc, unit to
measure pressure in supply networks), but
under crisis situations, such as the one we
are going through, the rule allows pressure lower than the minimum. Item 5.4.1.2 of
NBR 12.218/94 says: “the amounts of static
pressure exceeding the maximum and the
dynamic pressure lower than the minimum
may be accepted, provided that technically
and economically justified”.
According
to National
Sanitation
Information
System (SNIS),
while National
average total
losses reaches
37% (in some
States this
percentage
exceeds 50%),
Sabesp’s figures
were 29.8% in
2014, numbers
4.5% smaller
than 2013’s,
as a result of
R$2.6 billion
invested since
2009 (from a
R$5.1 billion
total planned
until 2020) by the
Corporate Water
Loss Reduction
Program
FIGHTING AGAINST LEAKAGES TECHNOLOGY
Implemented over two decades ago in Sabesp’s leakage detection
operations, the geophone technology detects water leaks from the
pipes through soil auscultation with a small sensor (geophone).
However, inaccurate chalk or spray marks may result in remeasurement and wasting of time. Therefore, Sabesp is improving
this system by adjusting a smartphone to the geophone device,
connecting the operational work on the streets to a data center.
With the assistance of a GPS, it will be possible to monitor the
technician’s work to accurately detecting and signaling the problem,
which means greater speed and accuracy in the repair. In addition,
the digitalization and storage of sound signals in a databank will
enable the classification of different leak profiles, which will ease
the selection of method to be applied in the repair. This invention,
still in the research phase, is the result of a partnership between
Sabesp’s Department of Execution of Research, Development and
Innovation Projects, and professor Linilson Padovese (USP), being
supported by the São Paulo Research Foundation (Fapesp). This device
should be operating in around three years.
Water at wholesale
Another measure adopted to offset the
lower flow withdrawn from the Cantareira
system was to reduce by around 2 m³/s the
water volume supplied on a wholesale basis to municipalities composing the coverage area of this system.
The systems’ new
rainfall and water
inflow levels,
formerly based
on the figures Results
for 1953/1954,
brought new
Out of 31 m³/s Sabesp was authorized
parameters for
the hydrological to withdraw from PCJ basin prior to March
risks assessment, 2014, in February 2015 only withdrew 10.40
directly impacting m³/s. The remainder derives from Alto Tietê
the conception of basin, resulting in the production of 14.03
projects and the m³/s at the Guaraú water treatment staanticipation of tion (Cantareira system). Comparing water
the works already withdrawal from the Cantareira System in
planned
February 2014 with February 2015, we have
a 56% reduction, which means savings of
17.74 m³/s – sufficient to supply approximately 7.1 million people. Considering the
set of systems that serve the RMSP, savings came to 21.4 m³/s in the same period,
sufficient to serve 8.6 million inhabitants,
more than the population of the city of Rio
de Janeiro1.
A gestão da pressão foi responsável
pela parcela de 46% dessa economia, a
transferência de mananciais respondeu
por 30,5%, o Bônus ajudou em redução de
19,8% e a transferência de menor volume
de água para municípios atendidos no ata-
cado foi responsável pela economia de 3,4% do total. E o consumo per capita caiu 22% em um ano – de 163 litros/habitante/
dia em janeiro de 2014 para 126 litros/habitante/dia no final de
dezembro de do mesmo ano.
Rainfall below average continued until January 2015. The water
inflow was even lower during such period, compared to 2014 and
was considered the worst period of the historical series. Therefore, the interventions scheduled for 2015, as seen thereafter, will
be essential to maintain the regularity of water supply in the short
term in the entire metropolitan region of São Paulo.
It is worth noting that the systems’ new rainfall and water inflow
levels, formerly based on the figures for 1953/1954, brought new parameters for the hydrological risks assessment. The new scenario
directly impacts the conception of projects and the anticipation of
the works already planned in the São Paulo State’s Macrometropolis
Plan to expand the supply infrastructure.
G4-EN5/EN6
Another impact evidenced with the crisis was the
3.2% increase in the Company’s total energy consumption compared to 2013 in water product. This is justified by the intensified
replacement of flow between RMSP production systems and the
higher need of equipment to expand the systems which now cover sectors previously supplied by the Cantareira system.
The trend is this situation to be reversed with the regularization of water and operating conditions. In case of sewage, the
higher energy consumption in sewage activities occurred due to
the expansion of services, especially the increase in the number
of pumping stations which pump the load to sewage treatment
stations. (For further details, see the Panel of Indicators, page 16).
Future actions
DIn light of the new scenario, confronting the crisis requires the
repositioning of investments and a series of short and medium-term
initiatives to increase water availability and the integration between
1 – 1 m³/s is sufficient to serve approximately 400,000 people.
Executed actions reduced by 56% the use of water from Cantareira
3
14
20
b/
13
Fe
4
01
ar
/2
34
23.3
21
m³/s
-8.2
-5.4
-0.6
19.0
17.1
14.0
Permissionaires
Advances from
other systems
15
20
19.9
b/
ay
Ap
M
12.0
-17.74 m³/s
/2
0
Ju 14
n
Ju /20
Au l/20 14
14
g/
2
Se 014
p
Oc /20
14
t
/
2
No
01
v/
4
20
De 14
c/
Ja
20
n/
14
20
15
r/2
01
4
M
Water production at the Cantareira System
Feb/2014 to Feb/2015
25.2
Fe
20
17.0
(m³/s)
-3.5
27.6
27.0
22.0
Bonus Program
01
De
c/
t/2
01
3
32.8 32.8
31.4 31.9 31.8
Oc
g/
2
Au
b/
2
ar
Fe
M
33.3
33.0
31.6
01
3
Ap /201
r/2 3
M 013
ay
/2
01
3
34.0 32.8 33.3
32.0
Reduction of
pressure/losses
the production systems, expanding by 30% the water supply in the
RMSP by the end of the decade, splitted into three phases. The first
comprises short-term measures, expected to be executed and begin
operation in 2015, including the transfer of 0.5 m³/s from the Guaratuba River to the Alto Tietê system, in operation since February 2015,
the interconnection that will enable the transfer of 4 m³/s from Billings to the Alto Tietê system, the transfer increase from Billings with
donation of another 1 m³/s to Guarapiranga and the enlargement of
the ABV water treatment station by 1 m³/s.
In the medium-term, more sources should be incorporated into
the integrated system. The São Lourenço production system , which works began in April 2014, is one of the main sources. Once
operational, at the end of 2017, it will allow the transfer of another
4.7 m³/s (with a maximum capacity of 6.2 m³/s). The total amount
for this project is budgeted at R$6.0 billion, including R$2.2 billion
allocated to construction through a public-private partnership with
Camargo Corrêa and Andrade Gutierrez and R$3.8 billion to a 21year operation and maintenance of the plant’s services.
At the end of January 2015, the Company published a pre-qualification bid notice for companies interested in bidding for
the interconnection works between the Jaguari (Paraíba do Sul
basin) and Atibainha (Cantareira system basin) dams. Howbeit
an appeal was taken to the São Paulo State Accounting Court,
which was granted partial relief leading to its republication on
March 21, 2015. It is a large scale construction project, with expected average outflow of 5.13 m³/s and maximum outflow of 8.5
m³/s, which should begin operating in the second half of 2016,
enhancing the Cantareira system.
Also in the medium term, the Company is studying the construction of two Reuse Water Production Stations , one on “Pinheiros Expressway” (2 m³/s) and another in Barueri (1 m³/s). In
these stations, the collected sewage is treated until it is transformed into reused water with a quality close to that of potable
water, and then transported to the Guarapiranga and Isolina reservoirs (Alto Cotia system), respectively, where it will be treated
and transformed into potable water again.
In order to achieve this result, both reuse water production stations
will be equipped with membrane biologic reactors, which perform ultrafiltration and have the capacity to remove solid particles with a diameter a thousand times smaller than a hair. Afterwards, the membrane
filtration may be followed by osmosis and oxidation processes. And as a
last stage, the water will be submitted to a final disinfection process to
eliminate pathogens, such as bacteria and viruses.
Alternatively to Reuse Water Production Stations, there are studies
of new water sources near the RMSP, where good quality water is
available. These options will be compared with Reuse Stations in terms of investments necessary and operating expenses, opting for more
cost-effective solutions.
Savings/action
The Metropolitan Water Program
These measures, which contribute to fight against the largest
drought of history, will carry on a work started over two decades ago
with the Metropolitan Water Program (PMA). Implemented by mid
“
In 2014, R$349 million
were invested in
supply infraestructure
on RMSP
90’s, the PMA regularized supply, in conformity with population growth and to dealt with a
situation of rotation experienced by six million
people in the metropolitan region of São Paulo due to the lack of infrastructure.
Completed in 2000, the first phase of the
Metropolitan Water Program put an end to
rotations and expanded the capacity of the
whole system, as increased untreated water
available supply, enhanced the reservation
and renovation structures and increased
treated water production and transportation
(intake) capacity. In 2006, the second phase of
the Program began. Completed at the end of
2014, it required investments of around R$1.9
billion, including our own funds and financing
from Brazilian Federal Savings Bank (CEF)
and Brazilian Development Bank (BNDES)
and funds from the public-private partnership
(PPP) signed to expand Alto Tietê system’s
production capacity – from 10m³/s to 15m³/s.
Only in 2014, R$349 million were invested
in the Program, a 173% increase over 2013
due to changes in the Company’s strategy
due toworks brought forward and emergency
actions in operation to face the water crisis.
With that Programa, it was possible to cover
services to consumers from 70% to 100% and
the water production capacity in the Metropolitan Region of São Paulo increased from 57
m³/s to 73 m³/s, i.e., a 28% increase in production against 22% growth of population (IBGE),
making available water sufficient to 5.5 million
people. Alone, it would be sufficient to supply
the cities of Salvador (2.9 million) + Fortaleza
(2.6 million). This was possible with the improved infrastructure of five systems over these
two decades.
At Sabesp, the water supply, although is an
universal service, it is a service which continuously requires performance keeping up
with demographic growth and regularization
of new areas. Thus, 231,511 new connections
were made, outpacing the annual records of
the past 15 years. Today, 25.3 million people
are directly served.
35
Protection of Water Sources
A greater need of water sources to supply
the metropolitan region of São Paulo make
actions towards the environmental recovery
of these water sources yet more urgent,
with an acting of, above all, the municipal
executive power, which has the prerogative to promote land regularization of regions
already occupied and prevent the irregular
settlement in the surroundings of the water
sources – considered to be environmental
preservation area.
The Water Sources Program, implemented in 2008 in a partnership with the municipal government, is focused on recovery of
Billings and Guarapiranga, two of main reservoirs of the Greater São Paulo. Most of
funds have been invested to create sewage
collection infrastructure in the region. This
program comprises improvement interventions, precarious lots and housing units in
Guarapiranga and Billings sub-basins’ areas. Initiated in 2009, it must benefit 58,000
households until 2015. These actions have
been executed with funds of the federal
government, the State of São Paulo, municipalities, Sabesp and the World Bank. Out of
US$ 100 million to be invested by Sabesp in
Metropolitan Water Program
28%
increase in water
production capacity
this project, up to date, approximately R$147.4 million were executed, of which R$30.4 million in 2014.
Concurrently, Billings dam also counts on Pró-Billings program,
whereby sewage treatment works will serve the population with
trunk collectors, sewage pumping stations, collecting networks and
household connections, taking sewage to ETE ABC for treatment,
with an estimated completion date by the end of 2018.
Nossa Guarapiranga (Our Guarapiranga) is a third initiative
towards the recovery of metropolitan water sources. Started at
the end of 2011, the Program is supported by 10 collector dinghies and 11 eco-barriers (which are structures with floats and
underwater metallic screens installed in the mouth of the dam
inflow that removes waste that reaches these channels). The
items taken out of the dam include couches, plastic containers,
TV sets, car carcasses, and a variety of waste types that contaminate the water and disrupt water intake and treatment operations. Between December 2011 and October 2014, 9,026 m3 waste
were removed.
This volume, which is sent to the sanitary landfill, corresponds
to the monthly collection by 475 dump trucks (approximate average of 250 m3/month). In addition, since July 2012, a diagnosis
service has been executed, water plants control and removal ,
i.e., the macrophytes, which obstruct the dam’s water intake, besides hampering the use of reservoir for the practice of nautical
sports. This service relies on two especially-equipped dinghies
for this operation. From implementation until the end of 2014,
R$15.1 million were allocated to the program, which should reach
R$17.9 million by the end of 2016.
It is worth mentioning that recovering and preserving urban
water sources in a complex area with heavy population agglomeration as the Greater São Paulo is a collective mission. The participation of sanitation companies of all municipalities through the
expansion of sewage collection and treatment, the inspection of
irregular occupancy, urban cleaning and the increased citizens’
awareness of the proper waste disposal value are critical actions
to move forward in preserving these important water sources in
such a water shortage environment.
Coastal Supply
22%
population
growth
This difference is big enough to
supply the populations of:
Salvador (2.9 million)+
Fortaleza (2.6 million)
In just over two decades the
Metropolitan Water Program ended
the casters and increased water production
capacity in Greater São Paulo by 28%.
Supplying nine municipalities in the Santos coast region is a
complex, challenging task. Considered by the Brazilian Institute
of Geography and Statistics (IBGE) the 15th largest metropolitan
region in the country considering the number of inhabitants—approximately 1.8 million in 2014, which doubles in high season, when
the highest temperatures are registered and caused water consumption per capita peaks, that overwhelms the supply system.
The need to ensure water supply safety in the region required
building an integrated water intake, treatment and distribution
system, as we have in the Greater São Paulo, intended to make
supply flexible. This structure allows us to transfer water flows
from regions with higher water availability to regions with higher
demand, offsetting the volume availability limitation for water intake of rivers deriving from Serra do Mar.
With the inauguration of the Mambu-Branco station in Itanhaém and
the Jurubatuba station in Guarujá at the end of 2013, both supplying 3.6
m³/s to the Santos coast region, it currently has 15 ETAs. After treatment, water is sent to 50 storage centers with capacity of approximately
320,000 m3 and is then strategically distributed to nine cities.
In 2014 we built 1.3 km of treated water mains and its reservation was expanded by 17,300 m3 by delivering a 5,000 m³-reservoir
in Vicente de Carvalho and another in Bertioga, with reservation
capacity of 12,300 m³. In addition, it was started a 25,000 m3 reservoir construction in Praia Grande. Two stations were also delivered; ETA Itu, in São Vicente and ETA Bertioga. Together, the
stations required investments of R$16.1 million and added 380
liters/second of treated water on the south coast.
All these actions are part of the Água no Litoral (Water on the
Coast) Program which estimates R$1.1 billion in investments by
the end of the program’s first phase, in 2021, using our own funds
and also CEF’s. Out of this amount, R$934 million have already been
disbursed and R$76 million only in 2014, including funds used on
the north coast for improving the system and building treatment
stations in Ubatuba and Caraguatatuba, which are in progress, and
has a treatment capacity of 150 liters/second each. The second
phase of Água no Litoral is under the planning phase.
Interior actions
Sabesp, through the Regional Systems Executive Boards, operates in 310 municipalities in the São Paulo’s interior, where we
provide universal water supply services. However, the 2014 drought also affected several regions, depleting up rivers and lowering
reservoirs, which required emergency actions to maintain regular
supply for 1.2 million people. Using its own technical and operational capacity, 55 emergency water intakes were built in 26 municipalities with the most serious scenario.
At a cost of approximately R$21 million, these actions also required setting more than 100 kilometers of water mains and resulted in the production capacity expansion from new intake spots of
more than 1.8 m3/second. Such work ensured relief to citizens by
removing the possibility of public supply rotation in these municipalities. According to the National Protection and Civil Defense
Department data, until the last months of 2014, 1,117 municipalities
of 13 Brazilian states of southeast and northeast regions received
emergency status decrees due to water shortage recognized by
the federal government. In São Paulo, 45 municipalities declared
rationing. None of them is operated by Sabesp.
In 2014, 9 ETAs and 36 wells were concluded, making available
another 794 liters/second to the water supply systems of 33 cities
of the State. Another important action was the construction of 44
reservoirs with total capacity of 42.7 million liters. These actions
contributed to solve water crisis situations considering also the
demand deriving from the population growth in these municipalities, maintaining universal supply services in all bases operated
by Sabesp. For 2015, 8 ETAs have been built (interior and coast),
which will increase production by 1.7 m3/s, sufficient to supply a
population of 680,000 people.
Water in Santos Coast Region
Integrated system
flexibilizes supply
9 municipalities
15 ETAs
320 thousand m3
of reservation capacity
1.8 million tourists
supplied during Season
(doubling population)
Referring to the economic aspect, with
emergency actions, it was possible to avoid
a revenue drop of approximately R$60 million
which would be generated with supply discontinuance. In addition, this severe situation made Sabesp to designate professionals, as requested by the State government,
to provide technical assistance to other
municipalities with smaller-sized companies
and restricted operational capacity.
G4-EC8 Also in the interior, we develop
actions intended to bring water supply
and sewage to isolated and low-income
communities. It is called the Água É Vida
(Water is Life) Program. Created in November 2011, it is being implemented in
Alto Paranapanema and Vale do Ribeira
regions, once these regions have a large
population in rural areas and present the
worst human development indexes in the
State. In this task, Sabesp is responsible
for supplying water and providing technical assistance to the municipalities which,
using State funding, are responsible for
installing Individual Sewage Units (USIs).
These units are pieces of equipment with
technology better suited for regions where, due to their isolation, do not have conditions to have the traditional basic sanitation infrastructure.
The initial goal is to serve 81 communities from 30 municipalities, benefiting more
In ABC, Barueri,
Jesus Neto,
Parque Novo
Mundo and
São Miguel
ETES, Sabesp
produced in 2014
5 million liters
of reuse water
for urban use
supply: cleaning
of streets, yards
and memorials,
unclogging
sewage networks,
rainwater
galleries etc.
37
Sabesp has
15 regional
laboratories, tem
15 laboratórios
regionais, spread
strategically over
the State; they
conduct over
700,000
essays every
year; moreover,
the Company
pioneers in
having technical
tasters in the
country
than 15,000 people. By December 31, 2014
we had completed the works in 11 communities and in another 14 communities the
works were in progress. In total, we accomplished 78 kilometers of networks and
ducts, and 24 new wells, already in operation. Most of the work was performed by its
own labor force. As for water supply, we invested R$7.4 million out of a total of R$12.5
million budgeted up to 2015.
The measures and consequences of the
drought that stroke Brazil’s southeast region in 2014 led to a continuous drop of the
company’s revenue, and the investment to
expand water availability in the metropolitan region of São Paulo became a priority.
Therefore, the scope and program targets
have been reviewed.
The scope and goals of this program
have been revised, taking into account
the outcome of drought which stroke
Brazil’s southeast region during 2014 and
impacted on the Company’s revenue drop.
Investments had to be driven to expand
the water availability in the metropolitan
region of São Paulo and regions of higher
demand on the coast and interior.
Conscious and sustainable use of water
G4-EN27
As in the Program for Reduction of Water Loss, developing actions aimed at the efficient and responsible use of
water has been part of Sabesp’s sustainable management guidelines for decades. The water crisis has reinforced the relevance
of these initiatives.
One of the highlights is PURA (Rational Use of Water Program),
which combines educational campaigns in public buildings, with
practical guidance for civil servants on water consumption reduction. Concurrently, there is a structural measures implementation, with installation of valves, pressure relief devices, timers,
water outputaerators, replacement of floats and water volume
sensors, replacement of old plumbing systems and pipelines, and
building new reservoirs to collect and reuse rainwater.
Started in 1996, the program has been implanted in 8,160 properties
all over the State, through partnerships with State and Municipal public entities. Only in 2014, 257 buildings of RMSP public administration
received the program. Until December 2015 it will be implemented in
240 state schools of the Greater São Paulo, by means of a partnership
with the Department of Education of the State of São Paulo.
Besides physical structural changes to avoid waste, the participating schools which manage to reduce water consumption,
by at least, 10% get a 25% discount on their bill. Until 2015, the
expectation is to reach annual savings of R$13.9 million and of at
least, 216 million liters of water, saving enough water to supply a
city 36,000 inhabitants
PURA evolution in government buildings
in the metropolitan region of São Paulo
Adopted by the most advanced world systems, the reused water technology is among the most efficient initiatives for sustainable
water consumption. Indirectly destined to the human consumption
by means of double treatment1 or customized for industrial purposes, it results in great savings of raw water which is no longer withdrawn from water sources. We highlight the Aquapolo Ambiental,
a project implemented and operated since the end of 2012 by means
of a partnership between Sabesp and Odebrecht Ambiental.
The largest project to produce industrial reuse water in South
America and fifth largest in the world, Aquapolo is located near the
ABC sewage treatment station (ETE), at the border between São
Paulo and São Caetano do Sul, and it able to treat the effluent generated at the station. Approximately 900,000 m3 of water per month
are supplied to the large companies in the Capuava Petrochemical
Complex, in the ABC Paulista region (Santo André, São Bernardo
and São Caetano) and used to wash machinery and warehouses,
cooling boilers, power generation, etc. In 2014, negotiations started
“
Aquapolo is the
85
Quality control
largest project do produce
industrial reuse water in South America
and the fifth largest in the wolrd
ETE ABC
(São Paulo)
Number of properties serviced by PURA in RMSP
REUSE WATER
(after treatment of the effluent
generated AT ETE ABC)
819 1,741 2,191 2,491 2,651 2,908
900
million
liters per month
DESTINATION:
cooling boilers,
wash machinery and
warehouses,
power generation
Capuava
Petrochemical
Complex
2008
38
2009
2010
2011
2012
2013
2013
with sanitation companies Semasa (Santo
André) and DAE (São Caetano do Sul) to supply reuse water to the industrial units installed in these municipalities, saving drinkable
water for municipal citizens. There is also a
study in order to serve new industries in São
Bernardo do Campo by installing a new water main. We expect that Aquapolo reaches
a peak production of 1 m3/s in the coming
years.
G4-EN22
In addition to Aquapolo, Sabesp conducts the reuse of effluents at ABC,
Barueri, Jesus Neto, Parque Novo Mundo
and São Miguel ETEs for urban use supply, such as cleaning of streets, yards and
memorials, unclogging sewage networks,
rainwater galleries, watering yards, reducing dust in construction sites. In 2014, we
produced 5 million liters for these purposes.
equivalent to
360
Olympic
swimming
pools
The cleaning process conducted at
28 stations of the Greater São Paulo and
other 207 stations operated in the coast and
inland combines the most stricter international rules. Any doubt about the quality of water coming from stations is solved with over
700,000 laboratory essays conducted yearly
by 15 regional laboratories of quality control
with samples collected in several places,
from the way to reservoirs, water mains, distribution networks, connections, branches
until delivery to households.
In certain situations, we resort to the taste
sensitivity. Sabesp is the single company to use
this resource, it relies on technical tasters who
investigate the existence of substances which
may alter taste or smell. The result of these
processes, monthly reported in customers’
bills, show conformity indexes in line with the
sanitary requirements of the Ministry of Health
and the World Health Organization (WHO)
Currently, 13 of 15 laboratories already
have essays accredited by INMETRO, totaling
683 accredited essays. The central laboratory
promotes the improvement of all essays – the
Proficiency Essay Program, which consists of
sending a sample to internal and external laboratories in order to obtain an average result,
thus, allowing to identify any weaknesses and
provide greater reliability to results.
Between
December 2011
and October 2014,
Nossa
Guarapiranga’s
collector dinghies
and eco-barriers
system was
responsible for
the withdrawl of
nine thousand
cubic meters
of waste from
the dam, which
corresponds
to the monthly
collection of 475
dump trucks
1 – After treatment at ETE, water is sent to water sources. After intake, water receives new treatment before being distributed to consumers.
39
SEWAGE
Works of the Tietê
Project in Suzano: since
1990, nearly 16 million
people have benefited
from the expansion
of the sewage
collection network
EXPANDING THE SEWAGE infrastructure means
reducing hospital and clinic admissions due
to water-transmitted diseases, falling in infant mortality,
decontamination of rivers and water mains,
job creation, and increasing the value of tourism
and real estate.
In other words, sanitation means prosperity, health, life quality
and development.
According to the World Water Development Report 2014, a survey
conducted by the UNESCO, it is estimated that more than 80% of the
sewage in the world--and more than 90% in developing economies —is
neither collected nor treated. And more: 36% of the world population,
approximately 2.5 billion people, live without appropriate sanitation,
which is the probable cause of death of more than 1.5 million children
younger than five years old in the world, every year.
In São Paulo, the expansion of sewage collection and treatment in
municipalities served by Sabesp, reached in 2014 sewage indexes of
85% for collection and 77% for its treatment. Our sewage system currently serves 22.3 million people.
Even though 2014 was a year of double efforts to ensure water
supply, the sewage collection and treatment expansion actions
had significant results. Throughout the year we delivered new sewage treatment stations and made 244,280 new connections all over the
State, being the highest number of connections since 2011—the second
highest over the past 16 years.
Interior’s Universal services
Due to the worsening of the water crisis, triggered by the long
drought, Sabesp, by means of Regional Systems Executive Board had
to reallocate resources in order to enable the execution of works in
the water production systems set in municipalities more affected by
the drought, which ended up delaying some
sewage construction works.
Among the main actions in 2014 are the
delivery of 16 new sewage treatment station
units , the enlargement of one unit and the renewal of other three stations. This set of works
increased treatment capacity by 1.9 m3/s, benefiting 700,000 people in 16 municipalities. The
interventions for sanitation universalization in
the interior required an investment of R$153.2
million during the year. Currently, Sabesp has
524 sewage treatment stations in operation
throughout the State. In 2015, 27 new units are
already under construction in 25 municipalities. Thus, the treatment speed will be expanded by approximately 800 liters/second, directly benefiting more than 300,000 people.
Concurrently to offering more health,
comfort and life quality to the served citizens,
expanding the sanitation infrastructure has a
direct impact on the environment, by improving
water resources. The infrastructure outcome is already visible by the improvements in
major rivers, such as the Pararangaba, Lavapés, Lavrinhas and Queluz’sewage treatment
stations, which improved Paraíba do Sul and
consequently, the water going to Guandú river,
extracted to supply the State of Rio de Janeiro.
Another example is the improvement of
Jundiaí river – which during more than 30 years could not be used for public water supply
and now, after concluding Campo Limpo and
Várzea sewage stations in 2013, initial operation of Itupeva unit in 2014 – which was reclassified to Class 3, a category that allows human
consumption after conventional treatment.
Thus, it will be used to supply approximately
250,000 people in the Itupeva and Indaiatuba
municipalities located in region of lower water
availability in the State, with only 104 m3 per
inhabitant/year. In addition, along with Soroca-
In 2014 on the interior:
SEWAGE ON THE PATH
TO UNIVERSAL SERVICES
16
new
Sewage
Treatment
Station
+ expansion of one
unit and renovation
of three other ETEs
22.3 million
people served
with sewage
collections
Indexes on
operated areas:
85%
sewage collection
77%
sewage
treatment
Currently, Sabesp has
524 ETEs in operation
in the whole State
1,900
in
liters per second
of increase
in sewage
treatment
capacity
16
municipalities
700 thousand
with
153.2
R$
million
investiments
people
benefited
41
Tietê Project
1st and 2nd phases
1990
2010
Sabesp is structuring the fourth
and final phase of the Tietê Project,
which will include works of
great complexity in the central region
of São Paulo and the expansion
of networks to regularized poor
and remote areas of the
metropolitan area
Construction of great sewage stations,
outfall instalation, pipelines, collection
networks, interceptors and linking to the
network benefited:
15.8 million people with
sewage collection
&
8.5 millio peolpe with
U$2th billion
230km
Reducing pollution spot
sewage treatment
to the 4 phase
between 1993 and 2015
3ª Etapa (2010 - 2016)
Sewage Collection
2010
2016
84%
87%
Collected Sewage Treatment
2010
68%
+1.5 million
people benefited
With Campo
Limpo and Várzea
(2013) and
Itupeva (2014)
ETEs, Jundiaí
River water
regained human
consumption
quality
ba river, which was benefited with ETEs Paul
D’Alho in Boituva and Bairro do Porto in Capela
do Alto – it contributes to reducing pollution in
the Tietê river, which is the State’s largest river.
However, it is worth noting that the water
bodies pollution also originates from industrial process, waste disposed on soil that
ends up carried by rainwater into the rivers
(diffuse pollution), disorderly land use and occupancy, and the illegal disposal of sewage
in rainwater. Thus, it is essential that society raises its awareness on the importance
of correct garbage disposal and connecting
houses to the sewage network and that local
authorities keep on cleaning their cities and
inspecting irregularities.
Metropolitan Region of São Paulo (RMSP)
Irregular and disorderly settlements, illegal
sewage disposals, environmental degradation
of nature conservation areas , deficient inspections by the local government, and high
population concentration make RMSP a highly
complex area to expand the the sanitation service. Tackling this set of negative factors, visually represented by the highly polluted rivers
that crossthe metropolitan region , requires
42
2016
84%
+ 3 million
people benefited
Workd of 3rd Phase
39%
completed
36%
under execution
25%
bidding
large-scale initiatives, such as the Tietê Project, the largest environmental sanitation program in Brazil. Implemented in 1992, the project
combines actions in 27 municipalities of the Greater São Paulo.
Currently it is in its third phase, whose purpose is to expand the
sewage collection index from 84% to 87% and sewage treatment
levels from 68% to 84% within the RMSP. This phase requires total investments of approximately US$2 billion, with financing from
the Inter-American Development Bank (IDB), BNDES and CEF.
Out of this amount, R$1.55 billion have already been disbursed, of
which R$497 million in 2014.
Initiated in 2010, 39% of the works planned for this stage have
already been completed, 36% are in progress and 25% are in bidding process. When completed, these works will benefit another 1.5 million people with sewage collection and 3 million city
residents will have their sewage treated.
The current stage supplements the actions taken in the first and
second phases, from 1990 to 2010, when the large sewage treatment
station’ construction, the installation of outfall sewer, ducts, collecting networks, interceptors and connections to the networks enabled the collection to 15.8 million people and treatment of collected
sewage to more than 8.5 million RMSP inhabitants.
Sabesp has been structuring the fourth and last phase involving
investments estimated at US$2 billion. It will include large, complex
works in São Paulo downtown and the network expansion to the regularized, low-income suburbs. However, due to the water crisis and
the need of prioritizing investments in water, the estimated budget
for this project is under revision.
In addition to a healthier environment, the actions result directly
in environmental benefits. The greatest example is the expressive re-
“
In 2014, Sabesp invested
R$14 million in the complete decontamination
of two large urban streams, benefiting
320,000 people, besides the conservation
of the already depolluted 146 urban
streams and the actions to initiate the
decontamination of another 18 water bodies.
duction of the Tietê river’s polluted spot, which has already shortened
230 kilometers compared to 1993, when it reached the Barra Bonita reservoir, 530 kilometers from its spring, in the Salesópolis municipality.
Such Information is available in the study called “A Water Quality Portrait and the Partial Evolution of the Project Tietê Impact Indicators”,
released in 2014 by the NGO SOS Mata Atlântica Foundation.
According to this report, in the Greater São Paulo “investments
in basic sanitation have turned 18 collection points distributed in
streams and small rivers inside São Paulo, from a very bad condition—completely dead rivers—to bad, regular or good condition.
In the entire basin area, the expansion of the sewage collection
network and the volume of treated sewage have resulted in an improved water quality”.
This progress also reflects on the actions taken under the program
Córrego Limpo (Clean Stream) Program implemented in 2007, by a partnership with the Municipal Executive Power. Sabesp is responsible
for identifying illegal discharges, improving the stream area’s sewage
systems, and cleaning the margins. The municipal government is responsible for registering households in housing programs. From 2007 to
the end of 2014, Sabesp invested R$144 million in this program, resulting
in the decontamination of 148 streams. Approximately 2.2 million people
were directly benefited, within an area of approximately 180 km².
While works have been executed, Sabesp promotes forums of
community participation aiming at raising the awareness and integrate area residents into the actions to keep clean the margin of
these streams. Among these actions, the community is trained to participate in the water quality measurements and encouraged to fight
against the irregular waste disposal.
In 2014, Sabesp invested R$14 million in the complete decontamination of two large urban streams, benefiting 320,000 people, besides
the conservation of the already depolluted 146 urban streams and the
actions to initiate the decontamination of another 18 water bodies.
We should still emphasize that the Tietê Project actions also help to
reduce the pollution generated by these streams. In 2013, starting the
program’s fourth phase, we expected to fully or partially depollute
another 20 major streams by the end 2014, with investments estimated
at R$100 million. However, due to this drought’s effects and consequences in the southeast of Brazil and the difficulty faced by the municipal government to remove and reallocate low-income households,
the goals had to be revised.
In 2014 we started implementing in Arujá and signed a cooperation agreement with the municipal government of Ribeirão Pires. Additionally, the Bragança Paulista, Ferraz de Vasconcelos,
Poá, Suzano, Osasco, Taboão da Serra and Barueri municipalities
are analyzing this program’s feasibility. Our goal is to have decontaminated approximately 200 streams in the metropolitan region
of São Paulo by the end of the decade,
which means covering an area of approximately 250 km2.
Sanitation on the coast
The São Paulo coastline is another region
benefiting from a better life quality provision,
bathing conditions improvement of 82 beaches, better health, and better tourism development conditions under the Onda Limpa (Clean Wave) Program. As the greatest
intervention in environmental sanitation on
the Brazilian coastline, the program is moving up in terms of reaching universal sewage services in the Santos coast region and
north coast municipalities.
The works initiated in 2007 have already demanded investments totaling R$2.1
billion to projects and the expansion of the
following: network and sewage connection,
trunk collectors and pumping and treatment
stations. In addition to our own funds, we
have obtained financing from JICA, the Japanese development agency, and the Government Severance Indemnity Fund for Employees (FGTS). Just in 2014, R$187 million
were invested in the program.
In the Santos coast region, the program is
in its supplemental phase, started in November 2013, subsequent to the first phase. The
completion of the first phase (including the
supplemental phase) with total investments
estimated at R$780 million will allow an increase from the current 70% to 88% of the sewage
service indicators in Santos coast region, by
completing another 33,000 connections. Since implementation, the program has already
expanded the sewage collection from 53% to
70%, besides 100% treatment of the sewage
collected. The program’s goal is to reach 95%
and 100%, respectively.
On the north coast, the works initiated in
2008 will increase the region’s sewage collection index from 36% to 85% by the end of
2016 when approximately R$510 million will
be invested in the region, with own funds
and BNDES and CEF’s financing. Until 2014,
the program has already demanded R$157
million, of which R$12.8 million in 2014, to
expand collection networks, connections,
rising mains and pumping stations and the
conclusion of two ETEs in São Sebastião
(Una/Engenho and Baleia/Sahy).
Water treatment
generated around
30% less sludge
over the past five
years in Sabesp’s
eight production
systems due to
the untreated
water collect
quality, treatment
process
optimization
and the
implementation
of new treatment
technologies and
products
Sabesp is
committed to
the pursuit of
innovation and
technological
alternatives for
proper disposal
of solid waste
from sanitation
services
43
Onda Limpa Program
Greatest
intervention
in
environmental
sanitation on
the Brazilian
coastline
Since 2007, were invested
R$
2.1 billion
(R$187 million
in 2014 only)
• network expansion
• sewage connections
• trunk-collectors
• pumping stations
• treatment stations
Investiment of
R$
780 million
connections
(1st phase)
* – Goal
Santos coast
33,000
region
implemented
Before
Onda Limpa
53%
Current indexes
Sewage collection:
70%
To the end of
1st phase*:
88%
Sewage
Treatment:
100%
Investments
From the begining of the
Program on thePrograma no
North coast (2008)
until 2013:
R$
Program Goal:
Universalization
North
coast
144.2 million
In 2014:
12.8
million
R$
• Collection network expansion
• new connections
• booster lines and stations
• ETE Una/Engenho conclusion
• ETE Baleia/Sahy conclusion
(both in São Sebastião)
44
“Connect to the Network Program”
G4-EC8
This program was rolled out in January 2012 and its
purpose is to subsidize sewage connection costs to low-income
households. This is a way to stimulate the connection of more
households to the public sewage network and thus increase the
volumes sent for treatment and decrease of disposal of in natura sewagein the water bodies. The costs are paid by the São
Paulo State government and Sabesp at the ratio of 80% and 20%,
respectively. We are also responsible for works, which cover
municipalities in our entire area of operation--in the São Paulo
metropolitan area, in the interior and coastline.
In eight years, the goal is to make household adjustments and
connect 192,000 households with income of up to three minimum wages, with total investments of R$349 million. By December 2014, more than 21,000 connections were completed in 110
municipalities in São Paulo state, with and investment of R$67.6
million. We estimate that at the end of the Se Liga na Rede program 800,000 people will be directly benefited and approximately
40 million São Paulo inhabitants will be indirectly benefited from
cleaner rivers, streams, and water sources.
Sludge Disposal
The disposal of solid waste originated from sanitation services
make up a complex equation, consisting of legal, environmental
and operational variables. To this regard, we are committed to
seek innovation and technologic alternatives that would contribute to minimization, beneficial use and the appropriate final disposal of sludge volumes.
From a total of R$23.4 million invested in research over the
past three years (R$10.7 million in 2014 alone), part was exclusively allocated to developing related to sludge use, starting at
sanitary landfill coverage material, then composting and drying
via solar radiation to finally its use in civil construction. These researches are in partnership with the Brazilian Innovation
Agency (FINEP) and Fapesp (São Paulo State Research Support Foundation).
In early 2014, documentation was filed with the Ministry of
Agriculture to approve the registry which allows the daily use of
70 tonnes of sludge generated by the Lavapés ETE, in São José
dos Campos, in agriculture. We expect to obtain this permit in
2015. For the Barueri sewage treatment station , the largest one
in Latin America, planning is focused on the installation of sludge
drying units and we have studies on how to use the remainder
biogas in sludge digestion.
With respect to water treatment, Sabesp recorded an approximate 30% decrease in sludge generation at our eight production
systems over the past five years. This was possible due to the
untreated water collected quality, treatment process optimization, and the implementation of new technologies and products.
Concurrently, over the past 12 years, we have gradually reduced
the chemicals used in water treatment in the Greater São Paulo
area, with positive environmental effects.
Praia Grande Outfall
being transported
for installation; work
is part of the
Onda Limpa Program
45
PURSUING GROWTH while maintaining
a sustainable financial-economic stability
was an especially challenging goal in 2014.
The severe drought which, since the end of 2013,
has been beleaguered the region where
we operate led us to take indispensable
measures to overcome the adversities
we have been facing.
FINANCIAL-ECONOMICAL
MANAGEMENT
Pumping structures
of Consolation reservoir,
in downtown
São Paulo
The discount we have granted to customers to reduce water
consumption and other actions that the Company has taken to
tackle the water crisis resulted in a decline in revenue and in yet
more restrictive expenses, in addition to the need to reschedule
our investments.
To preserve our water resources stocks, in February 2014 the
Company implemented an incentive program to reduce consumption based on a bonus whereby those customers served by the
Cantareira system, based on the monthly average consumption
seen between February 2013 and January 2014, who monthly reduce water consumption by 20% would qualify for a 30% discount
in their water and sewage bills.
In March, the program was extended throughout the São Paulo Metropolitan region and promptly to the Piracicaba, Capivari
and Jundiaí Rivers water basin region located in the Cantareira
system’s area of influence. Originally scheduled to be effective
for 7 months, it should remain effective up to December 2015.
With a view to encourage the population which had already
been reducing consumption without qualifying for the benefit in
October 2014, we decided to set new ranges of bonuses and the
following discounts have been granted:
• 10% for customers reducing from 10% to 15%;
• 20% for customers reducing from 15% to 20%;
• 30% for customers reducing more than 20%.
In April 2014, after several discussions with public participation since 2011, Sabesp’s Tariff Revision process has been concluded. On this date, we were authorized to apply the tariff repositioning index of 5.4408%.
However, in order to not harm the stimulus offered by the incentive program to reduce water consumption, by the Company’s
decision, the implementation of tariff repositioning only became
effective in December 2014, so that to offset the postponement
period, ARSESP authorized to apply the tariff repositioning of 6.4952%.
Despite our efforts to reduce the demand for water, in January 2015, we still
recorded an increase in consumption by
few customers. Accordingly, to reinforce the incentive to reduce consumption,
ARSESP approved and we implemented
a contingency tariff mechanism, which
consists of additions to water and sewage
bills for customers1 whose monthly water
consumption exceeds the average monthly
consumption seen between February 2013
and January 2014, the same used for the
incentive program to reduce water consumption, under the following conditions:
•40% when consumption exceeds up
to 20%;
•100% when consumption exceeds
more than 20%.
The effects of the actions taken over the
water billed volume are shown in the Financial-Economic Management item of this Report.
In March 2015, considering the adverse conditions imposed by the water crisis,
the Company filed with ARSESP, a request
for extraordinary revision, as provided for
in the Final Technical Note RTS/01/2012 –
Detailed Methodology for SABESP’s Tariff
Revision Process – First Tariff Cycle.
Additionally, regarding regulatory issues, an adaptation of the internal processes to pass on to customers the regulatory
and inspection fee, equivalent to 0.5% of
revenue, net of COFINS and PASEP derived from services provided to regulated
municipalities, was completed in 2014; ho-
reduction of
more than 20%
Reduction reduction from
of water
15% to 20%
consumption
reduction from
10% to 15%
Increase
in water
consumption
increase
up to 20%
increase of
over 20%
30%
20%
10%
40%
100%
discount
discount
discount
of addition
on water bill
of addition
on water bill
1 – Customers with firm demand agreement, although they are not included in the bonus program, they are exempted from complying with consumption contracted
and are subject to the collection of contingency tariff, if consumption increases. Customers with water consumption equal to or lower than 10m3, hospitals, first-aid
clinics, nursing homes, police stations, prisons and centers of Fundação CASA (social and educational treatment center for adolescents) are exempted.
47
Sabesp’s
management
approach over
the years has
resulted in a
solid financialeconomic
performance,
which was
decisive to
absorb the
effects of 2014’s
water crisis
wever, the application thereof will occur
only at the appropriate time.
Also, we should emphasize that the transfer of legal charge1 to customers residing in
the Municipality of São Paulo, as set forth in
the municipal legislation, under the cooperation agreement and services agreement
executed with São Paulo State and Municipal
governments, and as provided for by Arsesp
Resolution 407/13, is still suspended.
Still regarding actions to tackle the water crisis effects, we cut R$1.1 billion in
2014 cash basis budget, so as to reduce
the pressure on cash in this period and
maintain the Company´s liquidity at an
adequate level.
With respect to investments, despite
some changes in initial plans and rescheduling to face the water crisis, we were
able to execute the original Capex plan.
In 2014, we invested R$3.2 billion, as
shown in the table below:
Investment Plan
(R$ million)
2,900
437
3000
2500
2000
1500
2,361
256
587
Water
Sewage
Total
São Paulo
Metropolitan Region
833.8
1,174.2
2,008.0
Regional Systems
(inland cities and coast region)
472.9
729.7
1,202.6
1,306.7
1,903.9
3,210.6
Total
Note: Commitments assumed with program contracts
(R$115.6 million) are not included
For the period between 2015 and 2019,
the Capex plan was adjusted aiming at
increasing investments in water over the
next years and thus, expanding the water
availability and safety in the São Paulo metropolitan region. Between 2015 and 2019,
we expect to invest approximately R$13.5
billion, as shown in the following chart2:
2,706
760
2,707
717
1,255
1,427
544
1,255
1,919
Loans and Financing
1,518
In 2014, the Company obtained loans and financing in the
amount of approximately R$382 million to make the investments
planned for the 2015-2019 period.
1000
907
711
500
2015
2016
2017
2018
563
2019
Water
Sewage Collection
Sewage Treatment
Investment Track Record
The table below shows the investments
made in 2014, broken down by segment
and region (R$ million current):
2,824
662
Brazilian Federal Savings Bank – CAIXA: In June 2014 we entered
into agreements that totaled approximately R$320.8 million. These agreements were part of PAC 2012-2013 and PAC 2013-2014
selections made by the Ministry of Cities, intended for the performance of works under Tietê Project, the Metropolitan Water
Program and water supply and sewage treatment works in the
Municipalities of Hortolândia and Itatiba. The loans are repayable within 24 years, with a four-year grace period, subject to interest rates indexed to the TR (benchmark interest rate), plus 6%
per year and a management fee of 1.4% p.a. and a risk rate of
0.3% p.a.
Indebtedness Level
Most of the Company´s debt (around 60%) was raised with official
agencies of local and foreign government, and multilateral organizations, at low costs and for long terms. The remaining derives from
funds raised in the local and international capital markets, preferably intended for debt management purposes.
At the end of 2014, our total debt was approximately R$10.8
billion, of which 40.3% was denominated in foreign currency. Most
of the foreign-currency denominated debt was raised with international financing organizations, with long-term maturities, a repayment schedule diluted over a long period of time, and bearing low
interest rates. In 2014, we repaid R$529.5 million of our debt.
Between 2008 and 2013, with the acceleration of investment,
the total debt ratio adjusted by the adjusted EBITDA, stood stable
at around 2.5 times, since the total indebtedness level increase
consistently with the Company´s operating cash generation level.
However, in 2014, the Company´s indebtedness level increased
3.64 times, due to the adverse effects of the water crisis, especially on EBITDA, and not due to a disproportionate rise in debts.
We have set certain limits to make debt agreements, and the ratio
should not exceed 3.65 times.
1 – Refers to the amount corresponding to 7.5% of revenue earned with services rendered in city of São Paulo, net of COFINS, PASEP and default of
municipality’s taxes that Sabesp has been transferring to the Municipal Fund of Environmental Sanitation and Infrastructure since the signature of the
agreement with the municipality of São Paulo, in June 2010.
2 – For additional information about our investment projects and emergency works to deal with the water crisis, check the chapter Confronting the
Water Crisis (page 28).
48
Sabesp’s management approach over the years has resulted
in a solid financial-economic performance, which was decisive
to absorb the effects of 2014’s water crisis.
This financial-economic performance was reflected in the
gradual increase in credit risk rating over the last years. Nevertheless, due to the financial impacts of the water crisis, there
was a change in the rating from neutral to negative in 2014, as
shown in the graph of this page.
Brazilian Development Bank (BNDES): In June 2014, we entered into
an agreement involving approximately R$61.1 million intended for the
works under the Metropolitan Water Program in the Municipality of
Santana de Parnaíba. This agreement was part of PAC 2013-2014 selection made by the Ministry of Cities. This financing is repayable within
AAA
AA+
AA
AAA+
A
ABBB+
BBB
BBBBB+
BB
BBB+
B
BOct-95
National Scale
brA+
108 months, with a 36-month grace period, and
bears financial charges equivalent to TJLP
(long-term interest rate) + 1.76% p.a.
Additionally, BNDES subscribed and
paid-in 13 debentures out of the 42 under the 3rd series of the 18th issuance of
debentures, in the total amount of R$35.8
million. The remaining balance is scheduled to be subscribed by 2016. Additional
information on loans and financing are
available (only in Portuguese version) in
the Company´s Reference Form at www.
sabesp.com.br/investidores, menu Informações Financeiras e Operacionais – Formulário de Referência e IAN.
Capital Markets
In June 2014, the Company made the
19th issuance of debentures in the total
amount of R$500.0 million, in a single series, maturing in June 2017, pegged to the
CDI rate plus an interest rate ranging from
0.80% to 1.08% per year. The resulting proceeds intended for the payment of financial
commitments maturing in 2014 and 2015.
Additional information on debts with the
capital markets are available (only in Portuguese version) in the Company´s Reference
Form at www.sabesp.com.br/investidores
menu Informações Financeiras e Operacionais – Formulário de Referência e IAN.
brAA+ Aa1.br
AA(bra)
AA-(bra)
brAAA+(bra)
brA
brA-
Standard
and Poor’s
Global Scale
BB-
BB+
(negative outlook)
BB
BB-
Apr-01
Fitch
BBB+
B+
Jul-98
Baa3
(negative outlook)
investment grade
Jan-04
Moody’s
Oct-06
Jul-09
Apr-12
Dec-14
Sep-17
49
Stock Market
In BM&FBovespa,
Sabesp’s shares
handled an
annual financial
volume of R$7.5
billion in 2014,
and participated
in all sessions;
whereas in the
US market, the
trading volume
was US$5.7 billion
in 2014, stable
compared to 2013
Although the tariff adjustment process,
eagerly awaited by the market, has been
completed in April 2014, Sabesp’s shares
over the year reflected the unpredictability of the effects of the severe drought that,
since the end of 2013, has affected the region where the Company operates.
Thus, shares and ADRs depreciated
by 35.7% and 44.5% over 2013, closing the
year at R$17.01 and US$6.29, respectively.
During the same period, the Ibovespa (São
Paulo Stock Exchange index) dropped by
2.9% while the Dow Jones appreciated by
7.5%. As a result of this performance, the
Company´s market value, which, in 2013,
was R$18.1 billion declined to R$11.6 billion
in 2014. The book value per share was
R$19.46 as of December 31, 2014.
Sabesp’s shares are traded in 100% of
BM&FBovespa trading sessions and handled an annual financial volume of R$7.5
billion in 2014. In the US market, the Company closed the year with 169.9 million
outstanding ADRs. The annual financial
volume traded at NYSE in 2014 remained in
line with 2013, at US$5.7 billion.
In 2014, Sabesp continued to be monitored by the market financial institutions.
Dividends
Under our bylaws, common shares are entitled to mandatory minimum dividends corresponding to 25% of profit for the year, obtained
after the deductions required or permitted under the law, and can be
paid as interest on shareholders’ equity.
In 2014, Sabesp paid R$537.5 million in dividends as interest on shareholders’ equity for FY 2013, corresponding to roughly R$0.78633094301
per common share and a dividend yield of 3.0%.
In 2014, the Board of Directors approved the proposal for the payment of interest on shareholders’ equity totaling R$252.3 million, or
R$0.36913009306 per common share and a dividend yield of 2.2%, to be
paid within up to 60 days after the Annual Shareholders’ Meeting where
the 2014 accounts will be submitted for approval.
Related Parties
On March 18, 2015, the Company, São Palo State government and
the Water and Electricity Department (DAEE), and the Sanitation and
Water Resources, as intervening party, signed a Term of Agreement, in
order to adjust the undisputable amount of debts related to pension and
retirement supplementary benefits referred to by São Paulo State Law
4819, of August 26, 1958, paid by the Company and not reimbursed by the
State. The current amount of the agreement is R$1.01 billion, out of which R$696.2 million relating to the principal amount and R$316.0 million
relating to inflation adjustment to the principal through February 2015.
For details, see Note 31c to the financial statements.
In 2014, net operating revenue remained steady, totaling R$11.2 billion, with a
slight decline of 0.9% over 2013.
Net operating revenue track record
(R$ billion current)
12.0
10.0
9.2
10.7
9.9
11.3
11.2
2013
2014
8.0
Debt of Municipalities Served on Wholesale Basis
6.0
The municipalities of Guarulhos, Mauá and Santo André are
served with treated water on wholesale basis by Sabesp, however,
currently, Guarulhos does not pay the bill, Mauá pays around 2%
of the bill and Santo André nearly 15% of the account. The unpaid
amounts are claimed in court and Sabesp has been receiving favorable court decisions.
In addition, the municipality Mauá also owes to Sabesp the
investments made by the Company and not indemnified upon the
resumption of services by referred municipality. Sabesp filed a lawsuit against Mauá and the courts sentenced this municipal government and SAMA (Mauá’s municipal water and sewage company) to pay the debt. A final and unappealable court decision was
issued and Sabesp started the court-ordered collection; however,
the Municipality of Mauá filed an action for relief from judgment in
an attempt to annul the decision favorable to Sabesp. The lawsuit
is pending judgment.
Referring to the municipality of Diadema, which also had debts
related to the failure to pay water bills at wholesale and resumed
and non-indemnified assets, in March 2014, Sabesp assumed the
direct rendering of water supply and sewage services, as part of
the judicial settlement to solve the debts. For details, see Note 9 to
the financial statements.
Financial-Economic Performance
4.0
In 2014, the Company disclosed a net income of R$903.0 million.
2.0
Net Income Track Record
(R$ million current)
2,000
1,912
2010
1,924
1,630
1,500
1,381
1,000
903
500
2010
2011
2012
2013
2014
2011
2012
Gross operating revenue declined by
R$634.6 million, or 6.7%, compared to
2013, basically due to the adoption of the
Water Consumption Reduction Incentive
Program since February 2014 and accordingly, a decrease of 2.2% in water and
sewage billed volume, with an impact not
offset against the tariff adjustment of 3.1%
applied since December 2013. The tariff
repositioning index of 6.5%, applied in December 2014, has impact on revenue only
as of January 2015.
In 2014, the costs of products and services rendered, administrative and selling
expenses, and construction costs increased by 13.6% (R$1.1 billion). If we exclude
Water and sewage billed volume(1) by user category
(millions of m3)
Water
50
Water and sewage billed volume(1) by region
Water + Sewage
(millions of m3)
2013
2014
%
2013
2014
%
2013
2014
%
Residential
1,565.6
1,548.6
(1.1)
1,299.1
1,292.7
(0.5)
2,864.7
2,841.3
(0.8)
Commercial
175.4
172.6
(1.6)
163.4
162.4
(0.6)
338.8
335.0
(1.1)
Industrial
39.4
38.9
(1.3)
44.4
43.0
(3.2)
83.8
81.9
(2.3)
Public
54.6
51.7
(5.3)
42.5
39.9
(6.1)
97.1
91.6
(5.7)
Total retail
1,835.0
1,811.8
(1.3)
1,549.4
1,538.0
(0.7)
3,384.4
3,349.8
(1.0)
Wholesale
299.0
256.8
(14.1)
29.7
24.2
(18.5)
328.7
281.0
2,134.0
2,068.6
(3.1)
1,579.1
1,562.2
(1.1)
3,713.1
3,630.8
Total
(1) Unaudited
Sewage
Water
Sewage
Water + Sewage
2013
2014
%
2013
2014
%
2013
2014
%
Metropolitan Region
1,206.9
1,172.4
(2.9)
1,029.2
1,005.4
(2.3)
2,236.1
2,177.8
(2.6)
Regional Systems(2)
628.1
639.4
1.8
520.2
532.6
2.4
1,148.3
1,172.0
2.1
Total retail
1,835.0
1,811.8
(1.3)
1,549.4
1,538.0
(0.7)
3,384.4
3,349.8
(1.0)
(14.5)
Wholesale
299.0
256.8
(14.1)
29.7
24.2
(18.5)
328.7
281.0
(14.5)
(2.2)
Total
2,134.0
2,068.6
(3.1)
1,579.1
1,562.2
(1.1)
3,713.1
3,630.8
(2.2)
(1) Unaudited
(2) Composed of the coast and interior regions
51
the effects of the construction cost, the
increase was 11.3%. Costs and expenses
represented 82.9% of net revenue in 2014
from 72.3% in 2013. For additional information on the breakdown and changes in
costs and expenses, see our Press Release available on the Company´s website
In 2014,
net operating
revenue remained
steady, totaling
R$11.2 billion,
with a slight
decline of
0.9% over the
previous year
at www.sabesp.com.br/investors, Operational and
Financial Information item in the top menu.
Adjusted EBITDA decreased by 27.2% from R$4.0 billion
in 2013 to R$2.9 billion in 2014, and the adjusted EBITDA
margin reached 26.0% from 35.4% in 2013. If we exclude the
effects of revenue and construction cost, the adjusted EBITDA margin ends up in 34.4% in 2014 (44.6% in 2013).
Adjusted EBITDA and Adjusted EBITDA Margin Track Record
4.0
3.2
3.4
3.6
2.9
34.9%
43.2%
34.0%
44.6%
43.0%
35.4%
33.6%
34.4%
Adjusted EBITDA Margin
26.0%
Adjusted EBITDA Margin
excluding revenue and
construction cost
Internal Controls
The internal controls are evaluated on a structured and systematic
basis since 2005, based on the parameters established by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)
2013 and the Control Objectives for Information and Related Technology (COBIT).
Annually, the evaluation of internal
controls is revaluated considering both
eventual new risks associated to the preparation and disclosure of the financial
statements and possible significant changes in computer processes and systems.
The controls, which are tested by the
Company’s independent unit, cover the procedures about the accuracy of accounting
records; the preparation of the financial statements in accordance with effective standards; and the proper authorization of the
transactions related to acquisitions, use and
disposal of the Company’s assets.
The review on the effectiveness of internal control environment in 2013, as
prescribed by Section 404 of Sarbanes-Oxley Law, was completed in April 2014
and no material deficiencies were identified, similarly to previous years. The 2014
tests will be completed in April 2015.
(Non-accounting measurements)
2014
2013
2012
A – Direct Economic Value Generated
12,369,246
12,436,533
11,820,477
a
Revenue
12,369,246
12,436,533
11,820,477
B- Economic Value Distributed
10,005,530
9,737,238
9,410,019
b
Operating expenditures
5,902,839
5,172,151
5,113,183
Adjusted EBITDA margin less revenues and construction costs
Employee salary and benefitsc
2,132,245
1,932,739
1,735,434
Payments to shareholdersd
842,286
1,063,581
1,158,562
Payments to governmentse
1,128,159
1,521,437
1,364,646
Investments in communityf
32,102
47,330
38,194
2,363,716
2,699,295
2,410,458
2011
2012
G4-EC1
2013
2014
Accumulated economic value
(R$ thousand)
Accumulated Economic Value (A-B)
Notes
(a) Composed of all operating, financial income and other operating income, monetary variations, foreign exchange gains and revenue related to the
construction of assets.
(b) Composed of operating costs and expenses, such as: general supplies, treatment supplies, services, electric power, general expenses ( excluding
expenses related to the use of water and meals/snacks) and employee training courses. Expenses related to depreciation and amortization and write-off of
credits were excluded.
(c) Employee salary and benefits – Composed of payroll and charges (excludes courses and training), meals/snacks and amounts paid to governmental
institutions (employee charges and taxation).
(d) Payment to shareholders – Composed of interest on shareholders’ equity /additional dividends proposed, financial expenses paid such as interest rates, fines
and other financial expenses (excluding income tax over remittance abroad), monetary and foreign exchange variations paid. Retained earnings were excluded.
(e) Payments to governments – Composed of Cofins/Pasep over operating and non-operating income, tax expenses, income tax and social contribution
(excluding deferred taxes), income tax over remittance abroad and use of water.
(f) Investments in community – Composed of institutional support, support of events, reception, exhibits and tax incentives distributed in the areas of
education, culture, health, sports, fight against hunger and food safety.
Sabesp internal
controls are
evaluated on
structured and
systematic basis
since 2005
Reconciliation of Adjusted EBITDA(1)
Profit
Finance income
Depreciation and amortization
Income tax and social contribution
Other operating income (expenses), net2
Adjusted EBITDA
Adjusted EBITDA margin
Construction revenue
Construction cost
Adjusted EBITDA less revenues and construction cost
2010
52
Sabesp complies with the principles of independence with respect
to services provided by the external auditor, namely: an auditor cannot audit his or her own work; an auditor cannot function in the role
of management, and an auditor cannot serve in an advocacy role for
his or her client. Deloitte Touche Tohmatsu Auditores Independentes is
the auditor for Sabesp since the review of the quarterly financial information as at September 30, 2012. In this period, it has audited financial
statements, quarterly financial information, and financing projects
In 2014, the fees paid for these services by Sabesp totaled
R$1.2 million, of which 93.9% corresponds to the audit of the financial statements. Deloitte Touche Tohmatsu Auditores Independentes does not audit any of our investees. While providing
audit services, the external auditors did not provide non-audit
services to the Company.
Legend
Adjusted EBITDA (R$ billion current)
44.7%
External Audit
2014
903.0
635.9
1,004.5
371.8
3.5
2,918.7
26.0
(2,918.0)
2,885.5
2013
1,923.6
483.2
871.1
732.0
(3.3)
4,006.6
35.4
(2,444.8)
2,394.5
2012
1,911.9
295.7
738.5
635.7
23.2
3,605.0
33.6
(2,464.5)
2,414.4
2011
1,380.9
633.0
768.7
498.1
90.3
3,371.0
34.0
(2,224.6)
2,177.0
2010
1,630.4
378.8
552.2
662.7
(1.6)
3,222.5
34.9
(2,130.6)
2,081.1
2,856.2
3,956.3
3,554.9
3,323.4
3,173.0
34.4
44.6
43.0
43.2
44.7
1 – The Adjusted EBITDA (“Adjusted EBITDA”) corresponds to the net income before: (i) depreciation and amortization expenses; (ii) income tax and social
contribution (federal tax on income); (iii) financial results and (iv) other net operating expenses. The Adjusted EBITDA is neither a measurement of financial
performance according to the accounting practices adopted in Brazil, the IFRS – International Financial Reporting Standards or USGAAP (accounting principles
generally accepted in the United States), nor should be considered individually or as alternative to the net income, as measurement of operating performance, or
alternative to the operational cash flows, or measurement of liquidity. The Adjusted EBITDA does not have a standardized meaning and the Company’s definition of
Adjusted EBITDA may not be compared to those adopted by other companies. The Company’s Management believes that the Adjusted EBITDA provides a useful
measurement of its performance, which is broadly used by investors and analysts to assess performance and compare peers. Other companies may calculate the
Adjusted EBITDA different from our means. The Adjusted EBITDA is not an integral part of the financial statements.
The Adjusted EBITDA aims at reporting an operational economic performance index. Sabesp’s Adjusted EBITDA corresponds to the net income before net financial
expenses, income tax and social contribution (federal tax on income), depreciation and amortization and other net operating expenses. The Adjusted EBITDA is not a
financial performance index recognized by the Brazilian Corporate Laws’ methodology and should not be considered individually nor as an alternative to net income
as an operational performance index, nor as an alternative to operational cash flows or as liquidity index. Sabesp’s Adjusted EBITDA works as an overall economic
performance index and is not affected by debt restructuring, fluctuations in interest rates, changes in the tax burden or levels of depreciation and amortization.
As a result, the Adjusted EBITDA works as an adequate instrument for a regular comparison of the operational performance. In addition, there is another formula
to calculate the Adjusted EBITDA which is adopted in clauses of few financial commitments. The Adjusted EBTIDA allows a better understanding not only of the
operational performance but also of the capacity to meet the Company’s obligations and raise funds for investments in capital goods and working capital. However,
the Adjusted EBITDA has limitations preventing it from being used as profitability index, because it does not take into account the costs resulting from Sabesp’s
activities or other costs that may considerably affect its profit, such as financial expenses, taxes, depreciation, capital expenditures and other related charges.
2 – Other net operating expenses mainly refer to the write-offs of property, plant and equipment, provision for intangible assets loss, loss related to economically
unfeasible projects, minus revenue from sale of property, plant and equipment, public notices sales, indemnities and refund of expenses, fines and sureties, property
lease, reused water, Pura and Aqualog’s projects an services.
53
SABESP’S ENVIRONMENTAL management,
ruled by the guidelines proposed in its Environmental
Policy, is inherent to the rendering of sanitation
services and the essence of its businesses.
Focused on consolidating the environmental culture,
the company prioritizes the in-house and external
a mixed model, and the ISO 14001 standard will be kept at the certified stations,
and may be expanded according to the
Business Units’ strategy, while for other
stations, an own model will be adopted
(SGA-Sabesp).
Until March 2015, Sabesp had 51 stations certified by ISO 14001. Considering
the new scenario presented, the scope of
certifications was reviewed and Sabesp
obtained recommendation for ISO 14001 re-certification of 35 stations, as of April 2015.
dissemination of the knowledge and experiences
related to the good environmental practices.
ENVIRONMENTAL SANITATION IN PURSUIT OF
SUSTAINABILITY
The Paraíba do Sul river
was one of the
beneficiaries of the
expansion of the
collection and treatment
of sewage systems
These are actions included in the corporate environmental management programs, which rely on the involvement of employees, community and partnership with non-governmental organizations.
G4-EN31 In 2014, R$29.8 million were allocated to investments
and expenses related to environmental protection, directly linked
to the development and implementation of corporate environmental management programs, as well as the Rational Water Use
Program – Pura.
Other investments and expenses related to environmental protection are included in the total amount of operating expenses
and investments reported herein. Actions and programs associated with water and energy consumption, as well as the generation of effluents and waste are reported in the chapters referring
to operation, given the strict relation of these environmental aspects with our business.
Environmental Management System and ISO 14001 Certification
Aiming at improving the operating management, in 2009, Sabesp established a program to gradually implement an Environmental Management System (SGA) at the sewage treatment stations (ETEs) and water treatment stations (ETAs). Approximately
R$30 million were invested between 2009 and 2014 to improve the
management requirements and stations’ infrastructure, offering
greater operating safety to minimize risks, accidents and generation of environmental liabilities, besides stimulating the development of preventive actions.
This initiative reinforces the process of changing the culture
under development at the Company, which inserted the environmental management to the corporate guidelines. Structured based
on ISO 14001 standard, the SGA has already been implemented in
95 stations and is under phase of implementation in another 34,
totaling 129 stations.
In 2014, there was a strategic realignment of the program to
gain agility, observing the SGA implementation target in all stations until 2024. As a result, in 2015, Sabesp will start adopting
Climate changes and greenhouse gas
emission management
Currently, the climate changes represent
one of the great global challenges to be
faced, and sanitation is one of the sectors
highly impacted by the effects of climate
change and the extreme events related
thereto. Sabesp, aware of its responsibility and of the need of playing its role within
this context, has been advancing in the development of its Greenhouse Gas Emission
Corporate Management Program – GHG,
in line with the guidelines of the Climate
Change State Policy (PEMC) which main
objective is to reduce and manage these
gases emissions.
The annual GHG emissions inventories
as well as the promotion of operational
improvement and control actions of GHG
emissions are important work fronts of this
Company’s initiative. These guidelines are
The annual
greenhouse
gas emissions
inventories
as well as the
promotion of
operational
improvement and
control actions
of GHG emissions
are initiatives
that expand
environmental
awareness
ENVIRONMENTAL MANAGEMENT SYSTEM
R$30 MILLION
129 STATIONS
2024
{ 34
95
investment, between 2009 and 2014
implemented
under
implementation
Implementation target in all stations
55
G4-EN15/EN16/EN17
Evolution of Greenhouse Gases Emissions at Sabesp
by scope, from 2007 to 2013
GHG emissions (million ton C02e)
2.000
Scope 1
1.500
1.000
Scope 2
500
Scope 3
pruning remains, so that to transform the raw material, high in
phosphorus and nitrogen into an organic fertilizer appropriate
for agricultural use. Besides this aspect, the process uses solar
energy and promotes more adequate processing of the material under aerobic conditions and at the generation place, thus,
reducing by 80% the need of transportation and minimizing the
generation of greenhouse gases by approximately 76 tonnes of
CO2e/month.
In 2014, for the 9th consecutive time, Sabesp participated in the
CDP – Carbon Disclosure Project – Climate Change, an international standardization and organization initiative through which the
companies release their results on GHG emissions under inventory, as well as other aspects of the climate change management.
Water resources management and water sources protection
G4-EN11
Reserves inside protected areas
Morro Grande Reserve
(municipality of Cotia)
•
•
•
•
•
•
•
•
Area: 10,700 ha
Perimeter: 70 km
Reservoirs: Graça and Pedro Beicht
Drainage basin of Pedro Beicht reservoir
Alto Cotia Production System
Law n.1949/79 – M. Grande Forest Reserve.
Listed as historic place by Condephaat in 1981.
Unesco (1994) declares it as São Paulo City Green Belt Biosphere
Reserve.
G4-16
2007
2008
Sabesp is
involved and
takes actions at
several levels
of the Water
Resources
Management
National System,
through the work
of approximately
160 of its
employees
56
2009
2010
2011
2012
2013
in agreement and they aim at meeting the
PEMC, both referring to the mapping of
main sources of emissions, and the survey
and dissemination of actions with potential reduction of GHG emissions
In 2014, Sabesp concluded the corporate
inventory of GHG of 2013, totaling 2,154,407
tCO2e, and the 7th inventory since 2007, observing the principles and requirements of
NBR ISO 14.064:2007 Part 1 standard and
the GHG Protocol Brazilian Program.
The trend seen in previous inventories
continues with sewage collection and treatment activities as the highest sources of
GHG emissions, accounting for approximately 89% of total. The electricity’s share is 10% and other activities account for
nearly 2%.
Among the actions to reduce emissions, we point out the project developed
in partnership with the municipal government of Botucatu and the Agribusiness
University of Unesp. We refer to the work
called “Transforming Sludge into Organic
Fertilizer and Decreasing the Generation
of Greenhouse Gases”, which won the
8th award Ozires Silva of Sustainable Entrepreneurship , under the Environmental
Entrepreneurship for Large-Sized Companies category.
The system foresees drying 22 tonnes/
day of sludge and add tree barks and tree
Sabesp is involved in and takes actions at several
levels of the Water Resources Management National System,
through the work of approximately 160 of its employees, from different company units, under a corporate coordination. At the
Water Resources Management National System level, we have a
seat in the Plenary Session of the National Water Resources
Council (CNRH), and seats in three of this Council’s technical
chambers; we are also represented in the Plenary Session and
the technical chambers of the four federal committees with jurisdiction in the State of São Paulo. At the state level, we are represented in the seven technical chambers of the State Management Water Resources Council and we have a seat in the Plenary
Session of the 21 state water basins committees and in technical
chambers, where we prioritize our participation to the Planning,
Sanitation and Water Use Billing chambers.
Also aimed at improving the management of water resources, we are monitoring the gradual implementation of the water
use billing instrument. This is an important instrument to raise
the awareness about the rational use, besides providing part
of the resources necessary to the actions planned in order to
recover and preserve the water resources. Another issue discussed by the Company has focus on the classification of water
bodies, that is the instrument whereby each basin committee
can set an arrangement per water quality goals linked to the
main water uses.
Both these major management instruments are directly related to our business. In 2014, the Company disbursed R$40.7
million, paid to the State and the Federal Water Basins, for the
use of the water from the Paraíba do Sul river, Piracicaba , Capivari, and Jundiaí rivers basins, the Sorocaba and Médio Tietê
rivers basis, the Baixada Santista basin, Alto Tietê river basin,
and Baixo Tietê river basin. The collection for the use of water
from other hydrographics basins in the State of São Paulo should
probably start in 2015-2016.
Valuing the need of preserving water resources, the Company
owns and maintains areas inside preservation units, which we
inspect and monitor. These areas are also made available to Universities and NGOs for social and environmental studies.
Rio Claro Reserve
(Salesópolis and Bertioga)
• Area: 16,200ha
• Drainage basin of Ribeirão do Campo, Guaratuba and Poço
Preto reservoirs
• Rio Claro Production System
• inserted in the Serra do Mar State Park (Decree nº 10.251/77)
and declared as the Atlantic Forest Biosphere Reserve by
UNESCO in 1994.
Besides the reserves since 1990, Sabesp
has been maintaining two forest nurseries
to produce native species trees to conduct
the riparian forest restoration and recovery
projects nearby water sources supplying the
metropolitan region of São Paulo – RMSP.
One of them is installed at Jaguari dam of the
Cantareira system, in the municipality of Vargem, and the other at the Alto Cotia water
treatment station – ETA, in the municipality
of Cotia.
As regard the use permits and environmental licensing, our operacional facilities
are currently under the Corporate Programs to Obtain and Maintain Water Resource Usage Right Permits and Environmental Licensing. We have filed use permit
requests in the manager agencies for all
water uses , many of which have already
been granted and other are under analysis
at the Water and Electricity Department
(DAEE) and the National Water Agency
(ANA). The Corporate Program associated
with the licensing of ETEs, ETAs and sewage pumping stations (EEEs) is in progress,
and estimated to be concluded until 2017.
Concerning the new projects, the obtainment of licenses and grants is already included in their life cycle.
In 2014, Sabesp
disbursed
R$40.7 million
as payment for
water usage from
rivers of Federal
or State scope,
concerning the
basins of the
Paraíba do Sul
river, rivers of
the Piracicaba,
Capivari and
Jundiaí, rivers
Sorocaba and
Médio Tietê,
Santos Coasta
Region rivers,
Alto Tietê and
Baixo Tietê
Sabesp Environmental
Education Program – PEA
Capivari Farm
(municipality of São Paulo)
•
•
•
•
Area: 2,900ha
Perimeter: 12km
Inserted in the Environmental Preservation Area– Capivari-Monos
Guarapiranga production system
São Francisco Reserve
(municipality of São Sebastião)
•
•
•
•
•
Area: 2,580,971.00 m2
Perimeter: approximately 7,144.40 m
São Francisco stream
São Francisco Production System
Inserted in the Serra do Mar State Park (Decree nº 10.251/77)
and declared as the Atlantic Forest Biosphere Reserve by
UNESCO in 1994.
The Sabesp Environmental Education
Program (PEA) is composed of a set of
actions and projects within the corporate
scope, concerned with changing the culture of employees and community. Currently, these actions seem to be more necessary in order to provide information to the
population, clarify doubts and emphasize
everyone’s collaboration to reduce consumption and rationally use water.
Many of these projects came from local initiatives and then were expanded,
conveying environmental concepts through theater, dance, music, mimes, drawing
workshops, manuals, exhibits, forestation,
stream, river and beach cleaning, monitored visitation to treatment stations, and
educational lectures. They are mainly aimed at children and young adults, public
and private school students, teachers, and
low-income communities.
57
Many of the
Environmental
Education
Program’s
projects –
which include
music, theater,
forestation,
stream cleaning
etc. – came
from local
initiatives
and then were
expanded
58
The initiatives include the Clubinho
Sabesp, the Rational Water Use Program
(PURA), the Sabesp Millennium Day,
Navega São Paulo, Abraço Verde, Prol,
Ecopoints, Sabesp 3Rs, Community Involvement, Sabesp of All Colors, Fish Repopulation, Green Life, Futurágua, Clean Beach,
and Small Scientists, amongst others. In
2014, we conducted almost 3,000 lectures
at schools, communities and businesses,
reaching an audience of 560,000 people.
We also organized nearly 2,000 monitored
visitations to our facilities to approximately 58,000 visitors.
One of the projects is Futurágua, the
purpose of which is to raise the awareness
and transform 6 and 10-year old children
into multiplying agents of the water rational use. In partnership with schools and
teachers, this project brings daily guidance to raise children’s awareness towards
environment preservation. On the north
coast, approximately 1,600 primary school
students of four cities in the region met the
Clubinho Sabesp characters (Super H2O,
Gotucho and Gota Borralheira) and visited
the facilities of a water treatment station.
In 2014, environmental education activities were also developed involving the release of nearly 50,000 young fishes of red
belly pacu, prochilodus lineatus (curimba),
tilapia and lambari, in partnership with
municipal governments and schools. The
participating municipalities are: Fernandópolis, Estrela D’Oeste, Guarani D’Oeste,
Valentim Gentil, Dirce Reis, Guzolândia,
Jales, Urânia, Alto Alegre, Gastão Vidigal,
Glicério, Monções, Monte Aprazível, Nipoã, Turiuba, Monte Alto, Santa Ernestina,
Palmares Paulista, Ibirá, Irapuã, Adolfo,
Nhandeara, Presidente Alves, Pongaí,
Uru, Catiguá, Avaí and Lins. These actions,
jointly with the advance of sanitation services, benefit important water sources in
the region, such as Turvo, São José dos
Dourados and Batalha rivers and the Campestre, Marimbondo, Santa Rita, streams,
among others.
The sewage treatment in these cities
brought life to the water bodies, enabling
the return of fishes and fishermen. In the
city of Lins, for instance, we usually see
people daily fishing in the city’s central region. Fishes besides offering leisure, they
contribute to the households’ living.
“
In 2014, almost three
thousand lectures have
been conducted at schools,
communities and businesses,
reaching an audience of
560 thousand people.
Planting trees is another front benefiting environment, such
as for instance, the project “A child is borne, Plant a Tree”. This
is a partnership between Sabesp and the Santa Casa de Misericórdia in the municipality of Jales, which defined that for each
child born, a tree is planted by families together with employees
of Santa Casa and Sabesp in the reforestation of Sabesp’s Jales
ETE area. Only in this activity, 900 trees were planted in 2014.
Overall, during 2014, in the educational voluntary actions to recover vegetation throughout the State, approximately 21,000 tree
saplings were planted.
Concurrently, a partnership between Education municipal departments and Sabesp, municipal and state schools participate
in the project “Kitchen Garden at Schools”. The activity aims at
stimulating children to a healthy eating habit , including greenery
and vegetables cultivated by themselves.
The production takes place at the school which plays an important role of motivating students and teachers, both in relation
to the cultural usage of kitchen garden, such as the adoption of
safe and sustainable food habits. The lessons learnt by children
with these activities are simple, but the most important ones are
those bringing concepts about the relevance of water, the appreciation of vegetables cultivated, harvested and prepared by
them, besides reinforcing the friendship and work group.
We also point out the PROL – Frying Oil Recycling Program,
which combats its incorrect discard in soil and water. This program relies on the partnership with municipal governments, shopping malls, supermarkets, parks and the Environment Department
(SMA), which cooperated to disseminate this Program. Various
partnering NGOs sent the oil collected to produce biodiesel.
Additionally, in 2014 we published the book “40 years of Sanitary and Environmental Practices in Sanitation”, aiming at
registering and disseminating a sample of the comprehensiveness of actions carried out by the Company and its influence on
people’s daily lives, promoting the responsible behavior towards the environment.
Good environmental practices in administrative areas
With a view to promoting the management of solid waste generated in Sabesp’s administrative activities, the Sabesp 3Rs
Corporate Program is based on the concepts of Reduction, Re-utilization and Recycling. Implemented in 2008, the program
started to be developed from the need identified of organizing
and standardizing the various selective waste collection initiatives carried out by different units of the Company. Therefore, a
business procedure was prepared which defines the guidelines
to manage such waste and establishes the standard methodology for the selective waste collection implementation phases,
temporary storage and destination of waste managed by administrative activities, pursuant to prevailing laws and in partnership with waste recycling cooperatives.
G4-EN2 By means of Sabesp employees’ qualification and outsourced workers’ training, the program stimulates the adoption
of responsible consumption and waste minimization habits, both
within the corporate environment and social life. In 2014, we
sent approximately 310,000 tonnes of solid waste generated by
administrative activities and trained nearly 250 employees for
the program’s management and monitoring. Since the inception
of the Program, more than 1,655 tonnes of waste have already
been disposed appropriately from the social and environmental
viewpoint, by training approximately 1,800 professionals among
employees and outsourced workers.
The Company carries on its Vehicle Fleet Renovation Program.
In 2014, we further advanced in replacing our light vehicle fleet, with Flex technology and mandatory supply with ethanol. We
reached the percentage of 78.5% for light vehicles and 68% for
heavy fleet, whose technology complies with Law Euro-5 of reduction of pollutant emissions.
The economic benefits and management revamp brought
by the Program are added to the environmental relevance, such
as reduction of fuel consumption, maintenance and documentation savings and revenues from replaced vehicle auctions
(R$2.6 million in 2014), besides the decommissioning of the
company’s asset base. With this program, we maintained a productivity of 98% of the fleet availability for daily operations.
Another initiative is the Social and Environmental Seal for
206 purchase specifications of Sabesp, granted by the State
Program of Sustainable Public Contracts. We achieved 30% of
the foreseen target – the certification of 700 specifications – in
view of the need of making technical changes in the seal issue process, required by the Environmental State Department.
Enacted by State Decree nº 50,170/05, the seal signals to the
supplying market the São Paulo State’s intention of conforming
its consumption profile with the sustainable development international guidelines.
G4-EN33 Sabesp’s bidding procedures do not allow the participation of entities interdicted by environmental crimes, pursuant
to Article 10 of Law 9,605/98, which provides information on criminal and administrative sanctions deriving from conduct and
activities harmful to the environment. In bidding procedure is
required to the Bidder the issuing of a statement that it will be
used only wood products and byproducts
of exotic origin or legal native origin in
the execution of the works and engineering services.
Sabesp’s contractual instruments also
have clauses requiring the compliance
with legal Federal, State and Municipal
provisions, which interfere in the execution of works and/or services, pointing
out the compliance with the environmental laws.
The Outsourced Services Studies of
the São Paulo State Government – Specific Social and Environmental Instructions
are also applied to define its technical
specifications. This study establishes the
implementation of environmental actions
by means of training of Contractor’s employees and awareness of all those involved, especially pointed out in Technical
Specifications and obligations of Sabesp
and Contractor.
Under the perspective of managing the
strategic post-consumption goods used,
the Company plans, operates and controls
the physical flow of these materials. These
goods are grouped into lots and they are
assigned a market economic value to be
tendered in auction. Therefore, Sabesp
besides playing its role before the Law
8.666/93, does not allow materials to be
discarded inappropriately.
In the public notices for unserviceable item auctions promoted by Sabesp, it
is included environmental clauses aiming
at complying with prevailing laws, about
issues, such as solid waste management,
the environmental protection and the control of vehicle polluting emissions.
The implementation of new rules to
acquire office supplies, cleaning and IT
materials provides for the utilization of
WEB platform made available by supplier
to Sabesp’s units and directly delivered at
the utilization sites, contributing to reduce
the use of transport, thus, minimizing the
vehicle atmospheric emissions.
In 2014, through
Vehicle Fleet
Renewal Program,
Sabesp furhter
advanced in
replacing its
light vehicle
fleet with Flex
technology, and
mandatory supply
with ethanol:
78.5% for light
vehicles and 68%
for heavy fleet,
whose technology
complies with
Law Euro-5
of reduction
of pollutant
emissions
59
G4-10/56
Fernanda Ribeiro was
one of twelve kids who
won a competition
among children of
Sabesp’s employees;
themed “water saving”
the drawings illustrate
the 2015 calendar of the
Company
SABESP’S COMMITMENT WITH LEGITIMACY, ethics, transparency
and respect for people and environment guides its socially
responsible performance and business decisions.
Thus, we adopt the assumption that the positive impacts
a company may exercise in the value chain contribute to the social
development of population under its influence.
VALUING EDUCATION IN THE
CONSCIOUS USE OF WATER
In a scenario susceptible to climate changes and low water availability,
Sabesp assumed the challenge of stimulating the changes of behavior
contributing to the rational and conscious use of water. In this regard,
Sabesp launched in 2014 the Guardião das Águas Program (Water
Guardian), which reinforces the need of gathering all employees in a
network to raise the awareness of customers, communities, institutions,
condominiums and children towards limited water resources.
The corporate citizenship principles guide the sustainability
actions among those with whom the Company maintains contact,
reinforcing its commitment with society. In this regard, we establish business guidelines related to the social and environmental
sustainability and the valuation of human capital, in line with our
Code of Ethics and Conduct, in pursuit of the sustainable development, integrated management, respect for human rights, diversity and improved life quality.
The social responsibility trespasses the Company and is reflected in its strategic objective of fomenting the citizenship practices
that promote the relationship between Sabesp, volunteers and community. This a broad set of commitments incorporated into the organizational culture, the business strategies and the ethical way of
conducting the operations.
Aware of the relevance of volunteer work and its benefits for the
community in general, Sabesp, by means of its Corporate Volunteering
Program, foments the good practices, bringing more dignity to those involved. This raises employees’ interest and admiration who feel more
integrated with the organization and its projects and more involved with
the culture and values.
Sabesp Corporate Volunteering Program was created in 2009
as way of recognizing the volunteers and is inserted into the
Company’s strategic guidelines. It was built on a participating
way, organized with all executive boards and its main objectives are to transform the community where it operates, motivating
and gaining the involvement of the highest number of employees
as possible, besides contributing to Citizenship, expressed in the
Company’s Code of Ethics and Conduct.
G4-15 We also support and encourage the compliance with
UN’s eight millennium goals, which are part of our Corporate Volunteering Program consisting of approximately 1,100 volunteers
and its main vector are the United Nation’s “Eight Millennium
Development Goals”, with emphasis in ODM 7 – Life Quality and
Respect of Environment.
Within this perspective, 150 facilitators
were training with the objective of disseminating their knowledge, thus, creating a
citizenship network, whose projects were
added to Sabesp’s Volunteer Management
Program to control the indexes. Supported
by volunteers’ work and their results, in
2014, the actions are interconnected with
the Guardião das Águas Program, which
promoted as main social and environmental initiative in 2014, the campaign: “water
saving as a way to avoid water shortage”,
including tips and advices for consumers
about not wasting water.
As usual, the social aspect was not left
aside and as part of Sabesp’s annual calendar, the Winter Clothing Campaign was
organized by FUSSESP – São Paulo State
Solidarity and Social and Cultural Development Fund, inspired by the campaign’s
motto “Good clothing is to give away”,
which promoted during four months, the
collection of more than 2.1 million clothes
with quality and 170 events were held, benefiting 280 entities and 52,000 families.
However, much more than figures, this
result represents the social development
promoted by employees who every year go
beyond as volunteer citizens, supported by
the managerial body. These initiatives are
in line with our Code of Ethics and Conduct,
which values the respect towards society
and customer, the environment, people, integrity, competency and citizenship.
Sabesp
encourages
the compliance
with UN’s eight
millennium goals,
which are part
of our Corporate
Volunteering
Program
Winter Clothing Campaing
2014
over
2.1 clothes
million
280 entities
benefited
52,000 families
serviced
61
“
Out of ten respondents,
eight stated they were “satisfied”
or “very satisfied” with
Sabesp, on the annual
satisfaction survey
Customer: awareness and partnership
and efforts endeavored by Sabesp’s technicians to meet their
customers’ demand amid a scenario of water crisis which affects
Brazil’s southeast region, especially the metropolitan region of
São Paulo.
We also conduct satisfaction surveys every two years in each
municipality where we have a program contract. In 2014, approximately 11,600 surveys were conducted in 105 cities. Survey results
guided the enhancement of our customer service. The surveys are
widely disclosed, thus strengthening our commitment to transparency and constant improvement of services provided.
G4-EC8 By means of the Guardiões das
Águas campaign, during 2014 Sabesp’s teams visited 40,000 condominiums (some of
them more than once), in 89 districts, covering more than 6 million people. Only in
January 2015, 10,023 condominiums were
visited which increased consumption. In
addition, the mobilization towards awareness were accompanied by distribution
of water tanks to socially vulnerable households, earning income of up to three minimum wages and facing water shortage
caused by low reservation at their houses.
The objective was to adjust the households’ reservation capacity to the ABNT rules
and maintain supply for until 24 hours, which does not occur due to the limited building standard of these houses. This action
has the partnership with the São Paulo
State Government and 800 units were distributed in the first quarter of 2015. The
target is to deliver 25,000 units. In addition,
millions of customers in the metropolitan
region of São Paulo received low-flow devices, which can reduce faucet consumption as much as 20%.
For the seventh Customer satisfaction surveys
consecutive year,
Sabesp renewed
We conduct an annual satisfaction surthe certificate
vey with our customers, always using the
granted by
Fundação Abrinq – same methodology, which allows us to
Save the Children, compare the performance of different buas a child siness units throughout different periods.
friendly company Our goal is to enhance customer services
based on the survey’s results. In 2014, we
maintained a general satisfaction with the
Company at 80%.
5,850 people were interviewed in the
entire State of São Paulo, where out of
10 respondents, 8 stated they were “satisfied” or “very satisfied” with services.
This good result was due to the dedication
62
Volunteer adhesions and institutional programs
G4-15 In the social area, we point out the maintenance of voluntary
adhesions to citizenship actions and global pacts.
For the seventh consecutive year, we renewed the certificate granted by Fundação Abrinq – Save the Children, as a child friendly company. To be entitled to this seal, every year we describe the projects targeting children, and among them we point out in 2014: Clubinho Sabesp,
the Apprentice Program and the Child Citizen Institute (ICC). Know more
about the projects aimed at younger audiences:
Clubinho Sabesp: Through on-line gaming and characters, the
website www.clubinhosabesp.com.br stimulates children and
adolescents between 6 and 13 years to interact, today, it has
50,000 members. This virtual space is mainly directed to environmental education, focused on “Learn to take care of our
water with saving tips from Clubinho Sabesp team”.
Apprentice Program: technical and professional qualification for
youth between 14 and 21 years, with 24-month contract and hourly
load of 3,680 hours between theory and training on the job, this
program prepares youth to the labor market. This is developed in
partnership with the National Service of Industrial Apprenticeship
Senai – SP and the Company-School Integration Center- CIEE. This
initiative already opened opportunities to 1,703 young people, 565
of which joined the program in 2014.
Citizen Child Institute– ICC: Sabesp co-supports this institute destined to qualify youth coming from deprived households, promoting
education, culture, and welfare in the Metropolitan region of São
Paulo. In 2014, Sabesp contributed with R$2.8 million that allowed
free services for 7,400 children and adolescents and 6,200 households by means of nine daycare centers and three circus schools.
We are signatories of the United Nations Global Compact which
gathers companies, workers and the civil society in order to promote
the sustainable growth and the citizenship, aligning its activities to
the human rights, labor, environmental protection and anti-corruption principles. Sabesp is a partner of Ethos Institute for Business
and Social Responsibility, a non-profit organization, characterized
as civil society organization of public interest whose mission is to
mobilize, raise the awareness and help companies manage their business in a socially responsible way.
Local communities
G4 SO1
The worsening of water crisis led the Company to potentialize its relationship with community, seeking to more and more
strengthen the dissemination of conscious use of water, the proper use of sewage network, waste disposal and the preservation
of water sources areas. The Guardiões das Águas network now is
the Company’s flagship, of which we highlight:
• Field day about the conscious use of water at schools: Sabesp and
the Education State Department launched the ECO-URA Sporting
Event- Conscious School in the Rational Use of Water, which gathered students from 207 schools of São Paulo capital city.
• Meetings between leaders and community: Approximately
180 community leaders held meetings seeking to bring communities’ representatives to the company and clearly inform
them about the water crisis in the southeast, streghtening the
dialogue between community and the company.
• Water Rational Use Program – Pura: in partnership with the
Education Department and the Penitentiary Administration
State Department (further details in the chapter: Confronting
the Water Crisis)
• Environment – Sabesp and Bradesco Partnership: a series of educational actions in Cidade de Deus, Osasco and
other two bank’s branches in Alphaville, to disseminate the
concept “Water: the life energy.” In this event, more than 450
people attended lectures and 2,700 students received in their
classroom volunteers informing about water-saving tips and
green preservation.
• Educational leisure: Sabesp opens areas of its reservoirs to
the neighboring community which were previously closed.
Sabesp’s parks in Mooca, Cangaíba and Butantã are areas renovated by Sabesp to offer more life quality by means of sports
and leisure.
• Inclusive culture: In partnership with the Association of the
Visually Impaired Friends (ADEVA), it offers an inclusive movie
session at Sabesp movie theater, free of charge, where all films
sponsored by it are required to exhibit subtitles and audio-description, benefiting those visually and hearing impaired.
G4-EC4
• Cadê Você (Where are you?) Project:
Conceived by the Mara Gabrilli Institute
and sponsored by Sabesp, it seeks to
identify individuals with disabilities, living in the poorest communities in São
Paulo city, to bring them information on
the main services in the areas of health,
work, sports, accessibility, education,
and legal.
• Film Project at Plaza exhibiting classic
sci-fi movies: Supported by Sabesp, open-air film exhibition every Thursday of August
2014, at Praça Victor Civita, in São Paulo.
• Solidarity during festivities: Several campaigns were conducted during Christmas, like employees producing Christmas
trees under the sustainability theme, donation is a simple gesture, Christmas for
special children: saving water but wasting solidarity, among others.
• Supports and sponsorships: Culture
incentive through Rouanet Law: the Incentive Program to São Paulo Film Production totaled R$4.3 million invested
by Sabesp, by means of the Rouanet
Law. Awards were given to production
and finishing of feature films in fiction,
animation and documentary short film
productions. The productions were
selected by the Culture State Department, which evaluated several selection criteria, among them, the projects
aesthetic quality (previously approved by the Brazilian Cinema Agency)
and the proven residence over two years of the project’s director in the State
of São Paulo. On the other hand, as from
2012, all the persons benefited with such
Law are required to produce copies with
subtitles, in order to increase the access
to the content by those hearing impaired.
A Sabesp é
signatária do
Pacto Global,
iniciativa da
ONU que reúne
empresas,
trabalhadores e
sociedade civil
para promover
o crescimento
sustentável e
a cidadania,
alinhando suas
atividades aos
princípios de
direitos humanos,
do trabalho,
de proteção
ambiental e
ao combate à
corrupção
FINANCIAL AID RECEIVED FROM THE GOVERNMENT
Total incentive
2011
2012
2013
2014
Culture incentive – Rouanet law
5,405
9,280
7,341
4,304
Audiovisual incentive
8,000
4,672
6,908
5,572
Sports incentive
3,090
2,872
3,379
2,130
Condeca
3,000
3,000
3,300
2,100
Total
19,495
19,831
20,928
14,106
63
Labor practices and
decent work conditions
The water and
environmental
crisis adversity
has been
mobilizing the
entire Company
to develop
alternatives to
reduce the risk
and the impact on
services rendered
to population
The worsening
of water crisis
led the Company
to potentialize
its relationship
with community,
seeking to
more and more
strengthen the
dissemination of
conscious use of
water, the proper
use of sewage
network, waste
disposal and
the preservation
of water
sources areas
64
Sabesp, consistent with its corporate and prospective strategy in relation to
future scenarios, defined in its Strategic
Plan, among business guidelines, the development of human capital as a competitive
advantage in order to achieve goals, such
as the sustainable universal services and
liable for water and sewage services and
develop solutions to address the restrictions raised by water shortage.
The evolvement to a new level of achievements requires our professionals to clearly
understand the context of the world’s transformation today. It also requires the qualification to take advantage of opportunities of
re-inventing, constantly dealing with the dualism of public administration under the aegis
of results, and act based on principles and
values of organizational cultures which ensure the sustainability and the establishment
of productive relations with several players of
the process.
Thinking about these demands, Sabesp
invested in a model of People Management
Skills, stimulating the development of critical skills for businesses. Once adopted,
our people management model has been
improving aiming at offering to Sabesp
a value proposal to employees, capable
of improving their commitment with the
organization’s objectives and strategy.
In this concern, we especially point out
its integrated processes: the continued education, the career management, life quality,
climate management and HR services. Taking
into account the Corporate Governance,
Sabesp’s bylaws set forth that all decisions
related to the “Personnel Policy”, such as
the definition of staff, career plan and salaries, the collective bargaining agreement, the
opening of selection process and the profit
sharing program, must be resolved by the Board of Directors and approved by controlling
bodies of the State of São Paulo.
It is worth mentioning in particular the
water and environmental crisis. Such adversity has been mobilizing the entire Company to develop alternatives to reduce the
risk and the impact on services rendered to
population. The qualification and expertise
of professionals in the sanitation business
have been decisive for results obtained. It
was also necessary to involve and commit several stakeholders in
convergent efforts.
In this case, people management played a relevant role, with
coordinated actions and strict control of personnel indicators and
intensifying the development of leaders with vision of the future, on
an integrated and entrepreneurship basis, adding efforts so that the
Company could seek alternatives and innovative solutions to provide
quality answers to society.
G4-LA1
TOTAL NUMBER AND RATES OF NEW HIRING OF EMPLOYEES AND TURNOVER BY AGE GROUP
By age grou, gender and region
2011
2012
Turnover
Men
Women
Total
Men
Women
Total
Gender
7.7%
7.2%
7.6%
5.5%
4.4%
5,3%
20 to 40 years
6.1%
6.9%
6.2%
5.1%
5.6%
5.2%
41 to 55 years
4.3%
5.9%
4.7%
3.0%
2.6%
3.0%
Above 55 years
24.4%
17.7%
23.2%
15.3%
10.8%
14.7%
RMSP
8.1%
6.8%
9.6%
5.4%
4.0%
5.1%
Inland and coast
7.3%
8.1%
5.6%
5.6%
5.3%
5.6%
Age Group
Region
Employment
Sabesp conducts the recruiting and selection process through
civil-service examination for employees, trainees and apprentices, so that to comply with specific laws, ensuring the hiring of
qualified professionals, prepared to work in several positions at
the Company.
Taking into account the complexity and comprehensiveness of
the process, the Company engaged Fundação Carlos Chagas – FCC,
a non-profit entity and specialized in conducting civil-service examination processes, under full delegation regime, where expenses are
covered by the number of applications. Seven civil-service examinations were conducted between 2011 and 2014, as follows:
Company Total
7.7%
7.2%
7.6%
5.5%
4.4%
5.3%
Employees Hired
513
210
723
697
218
915
% Hired Employees
4.3%
7.2%
4.9%
5.8%
7.2%
6.1%
2013
2014
Turnover
Men
Women
Total
Men
Women
Total
Gender
3.6%
3.6%
3.6%
1.9%
2.6%
2.0%
20 to 40 years
3.9%
5.2%
4.2%
2.2%
3.3%
2.5%
41 to 55 years
2.1%
2.2%
2.1%
0.8%
1.7%
1.0%
Above 55 years
8.3%
6.1%
8.0%
4.4%
4.6%
4.5%
RMSP
4.1%
3.3%
3.9%
1.4%
1.2%
1.4%
Inland and coast
3.1%
4.4%
3.3%
2.4%
5.6%
2.8%
Age Group
Region
2011
2012
2013
2014
Employees
389
-
624
-
Apprentices
-
552
1,060
-
Trainees
565
1,030
748
We could see that the civil-service examinations conducted for
Sabesp mobilize a significant number of candidates, and the last two
examinations carried out for 624 vacant positions for employees and
565 for apprentices received 41,319 and 12,147 applications, respectively. Aiming at meeting the units’ needs, the Company has a Bank
of Opportunities, accessible to all employees, which matches interests by means of in-house reallocations.
SANED Merger
Sabesp started the process of merging Water and Sewage Services of Municipality of Diadema – SANED, by Municipal Law nº
3.355, in September 2013 and the effective operation of services
by Sabesp began on March 31, 2014. Aiming at aligning SANED’s
professionals with Sabesp’s strategies, culture and competencies,
the employees were interviewed to analyze current activities and
their classification into Sabesp’s current Career and Salary Plan.
The effective reallocation of SANED’s employees to Sabesp is estimated for 2015.
The turnover ratio in 2014 was mainly concentrated in professionals above 55 years. Figures reveal that hiring and dismissal
over the past three years remained in line.
Company Total
3.6%
3.6%
3.6%
1.9%
2.6%
2.0%
Employees Hired
405
131
536
19
7
26
% Hired Employees
3.4%
4.3%
3.6%
0.2%
0.2%
0.2%
Workforce
Since Sabesp is a mixed-capital corporation, people management has different characteristics from only government or private
companies. On the one hand, the staff must answer to decisions of
the State of São Paulo’s controlling bodies, and on the other hand,
this is an issue considered highly strategic for business, where
the decision-making process has a direct impact on the quality
of sanitation services rendered to population, well as results for
the government and other shareholders. In this regard, the area’s
planning and control are essential to ensure qualified professionals who believe and share the Company’s mission.
G4-10 Sabesp has 14,753 employees (base of Dec/14), ruled by
Brazilian Labor Laws (CLT). The male gender prevails (80%), high
school educational (50%), white ethnic group (82%), over 40 years
of age (76%). Employees work 18 years on average at the Company.
Besides the permanent personnel, development opportunities
are offered to 942 trainees and 559 young apprentices, with learning and qualification activities aiming at their inclusion in the
labor market. Sabesp executes services agreements, relying on
approximately 7,478 outsourced workers.
Building a more equitable and sustainable society necessarily entails valuating diversity and social inclusion. The respect for
human and cultural diversity and nondiscrimination are part of our core principles. We
guarantee that right to difference, ensuring
each worker, regardless of his or her background, all the conditions to develop his or
her talents and potentialities.
Sabesp complies with prevailing laws
as to the right to reserve job vacancies,
offered in the public selection process for
disabled people. In 2014, 74 job positions
were filled under these conditions, 74.3%
employees physically impaired, 17.6%
employees hearing impaired and 8.1% visually impaired. We maintain agreements
with associations, through which 145 disabled people work in our service branches,
activity to which they receive over 108
hours of previous training.
Career and Salary
Plan exists to
manage human
resources more
independently and
flexibly; follow
the best market’s
practices; include
actions to attract
and retain good
employees; pay
compensation
according to the
market’s average
and recognize
the employee’s
qualification
efforts
65
G4-LA3 The return rate of 86 women who
were on maternity leave stood at 78% in 2014.
The Company’s personnel is distributed
as follows:
G4-LA12
2011
Sabesp adopts a Salary Policy which seeks the internal and
external balance. Therefore, surveys are yearly carried out with
COMPOSITION OF GROUPS LIABLE FOR GOVERNANCE AND BREAKDOWN BY EMPLOYEE CATEGORY,
ACCORDING TO GENDER, AGE GROUP, MINORITIES AND OTHER INDICATORS
2011
2012
2013
2014
Men
Women
Total
Men
Women
Total
Men
Women
Total
Men
Women
Total
Board of Directors and Fiscal Council
14
1
15
14
1
15
2
11
13
13
2
15
Audit Committee
3
0
3
3
0
3
3
0
3
3
0
3
Not commissioned
0
0
0
0
0
0
0
0
0
0
0
0
Comissioned
479
113
592
485
117
602
485
114
599
493
119
612
Managers
479
113
592
485
117
602
485
114
599
493
119
612
969
2,647
1,733
973
2,706
1,735
983
2,718
1,702
957
2,659
Technicians 4,588
1,751
6,339
4,499
1,768
6,267
4,434
1,754
6,188
4,358
1,714
6,072
Operational 5,183
95
5,278
5,284
160
5,444
5,314
196
5,510
5,223
187
5,410
2,977
14,753
Region
Men
Women
1 (Metropolitan region
of São Paulo, Paraíba valley
and Santos coast region)
8.119
2.367
2 (Regional systems
except for Paraíba valley
and Santos coast region)
3.849
561
Total
11.968
2.928
Governance Bodies
Manager
Category
University students 1,678
Subtotal 11,928
2,928
14,856 12,001
3,018
15,019 11,968
3,047
15,015 11,776
Trainees
442
476
918
443
445
888
443
481
924
446
496
942
Young apprentices
317
189
506
362
198
560
317
174
491
359
200
559
3,673
16,254
Total 12,687
3,593
16,280 12,806
3,661
16,467 12,728
3,702
16,430 12,581
Age
Until 17 years of age
0
0
0
0
0
0
0
0
0
0
0
0
18 to 30 years of age
649
289
938
743
327
1,070
708
314
1,022
576
242
818
31 to 40 years of age 2,775
710
3,485
2,589
705
3,294
2,402
679
3,081
2,109
638
2747
41 to 50 years of age 4,434
1,164
5,598
4,498
1,137
5,635
4,429
1,129
5,558
4,310
1,080
5390
765
4,875
4,171
849
5,020
4,429
925
5,354
4,781
1017
5798
45.8
43.8
45.5
45.9
43.9
45.5
46.5
44.5
46.1
47
45
47
Until 3 years 1,470
399
1,869
2,028
571
2,599
2,068
610
2,678
1,358
461
1,819
4 to 10 years 1,240
331
1,571
764
194
958
546
91
637
950
188
1,138
11 to 20 years 4,962
1,204
6,166
5,262
1,301
6,563
4,889
1,183
6,072
4,957
1,166
6,123
994
5,290
3,947
952
4,899
4,465
1,163
5,628
4,511
1,162
5,673
16.4
17.2
17
16.3
16.9
17.4
16.7
17.3
18
18
18
Above 50 years of age 4,110
Average age
Length of Service
Above 20 years 4,296
Average time
17.1
Education
Primary school 2,179
2012
Total
Men
Women
10.486 8.777
4.410
2013
2.569
3.224
449
14.896 12.001
Total
11.346 8.790
3.673
3.018
Men
3.178
15.019 11.968
2014
Women
2.605
Total
11.395 8.638
442
3.047
Men
3.620
3138
15.015 11.776
Women
Total
2.542
11.180
435
3.573
2.977
14.753
Note 1: Sabesp’s contracts are executed by means of civil-service examination, pursuant to 1988 Federal Constitution, where positions, prerequisites,
region, vacancies and salary are detailed. Currently, 78% of our managers work in Region 1 and 22% in Region 2.
Note 2: G4-EC8 Sabesp does not directly hire outsourced workers. Services agreements are executed with outsourced workers who are assigned
according to our needs. Under such conditions, we have approximately 7.1 thousand professionals who are not registered in Sabesp’s databank.
specialized external advisors, so that to attract and retain qualified
professionals necessary for the proper services rendering.
Until May 2014, Sabesp considered two regional salary bases,
different from each other by 20% and in the 2014-2015 collective
bargaining agreement, Sabesp assumed the commitment of these salaries parity and now the base salary is only one
The Career and Salary Plan (PCS) is structured so that to attract,
retain and rewarding good employees, recognizing overachievers,
and fostering continuing skill progress, thus helping to build competitive edges in the environmental sanitation sector.
The PCS is aligned with Skill-based People Management, which
consists of the following guidelines: manage human resources more
independently and flexibly; follow the best market’s practices; include actions to attract and retain good employees; pay compensation
according to the market’s average and recognize the employee’s
qualification efforts. This model enables to attracting, retaining and
developing qualified and committed professionals, offering careers
prospects and compensation compatible with the market.
Employees’ compensation is composed of base salary, corresponding to the job position, bonus, if designated to a managerial
or leadership/supervision position, as well
as by all benefits granted by the Company.
The managerial and leadership duties
are assigned according to the complexity
and the characteristics of activities directed and supervised, indicators – number
of employees under leadership/supervision, municipalities serviced, water/
sewage connections and geographic
area coverage.
By means of Y career, the PCS allows
mobility and the professional ascension
of undergraduate employees in two directions, one technical and the other one managerial, so that the technical employee
at more advanced stage of his/her career
may continue specializing in his/her technical area, with possibility of receiving
compensation corresponding to a managerial career.
G4-LA12
DISTRIBUIÇÃO DE EMPREGADOS POR GÊNERO E ETNIA
Men
Women
The possibility of
employee’s career
ascension relies
on the skill-and
performancebased
assessment
results and
the budgetary
availability
Total
2011
2012
2013
2014
%
2011
2012
2013
2014
%
2011
2012
2013
2014
%
White 9,912
9,889
9,790
9,637
82%
2,487
2,540
2,545
2,491
84%
12,399
12,429
12,335
12,128
82%
Afro descendants
1,808
and mulattos
1,870
1,928
1,893
16%
329
357
379
368
12%
2,137
2,227
2,307
2,261
15%
184
202
209
206
2%
110
116
118
113
4%
294
318
327
319
2%
53
2,232
2,198
101
2,299
1,712
58
1,770
1,589
52
1,641
High school 6,233
1,097
7,330
6,164
1,121
7,285
6,462
1,125
7,587
6,346
1,073
7,419
University1 3,556
1,778
5,334
3,639
1,796
5,435
3,794
1,864
5,658
3,841
1,852
5,693
Par time2 1,254
266
1,520
1,224
261
1,485
1,337
302
1,639
296
1326
1,622
Indigenous
6
7
7
7
0%
0
0
0
0
0%
6
7
7
7
0%
Full time 10,714
2,662
10,450
13,131
Not declared
18
33
34
33
0%
2
5
5
5
0%
20
38
39
38
0%
2,928
3,018
3,047
2,977
100%
14,856
15,019
15,015
Working hours
13,376 10,777
2,757
13,534 10,631
2,745
13,376 2,681
1 – 1,932 professionals hold specialization at the graduate/MBA levels and 9% of which hold Master’s degree or PhD.
2 – They work in operational and customer service areas.
66
NUMBER OF EMPLOYEES PER REGION
G4-LA12
Salary Policy
Asian
Total 11,928
12,001
11,968 11,776 100%
14,753 100%
67
G4-LA12
DISTRIBUTION OF EMPLOYEES PER POSITION, GENDER AND ETHNIC GROUP CATEGORY
Gerentes
Year 2011
White 441
Afro descendants 19
and mulattos
Asian 19
Indigenous 0
Not declared 0
Total 479
Homem
2012 2013
450
451
17
16
2014
455
19
18
0
0
485
19
0
0
493
18
0
0
485
Universitários
2011
108
3
Mulher
2012 2013
111
108
4
4
2014
111
4
2
0
0
113
2
0
0
117
4
0
0
119
2
0
0
114
2011
1.448
134
Homem
2012 2013
1.493 1.487
139
143
2014
1.459
141
2011
824
86
Mulher
2012 2013
827
832
86
89
2014
810
89
92
1
3
1.678
96
1
4
1.733
97
1
4
1.702
59
0
0
969
60
0
0
973
58
0
0
957
100
1
4
1.735
Technicians
Year 2011
White 3,857
Afro descendants
664
and mulattos
Asian 60
Indigenous 2
Not declared 5
Total 4,588
Men
2012 2013
3,750 3,683
2014
3,622
2011
1,485
Women
2012 2013
1,485 1,472
2014
1,439
2011
4,166
Men
2012 2013
4,196 4,169
2014
4,101
2011
70
Women
2012 2013
117
133
2014
131
671
671
658
216
227
226
221
991
1,043
1,098
1,075
24
40
60
54
65
3
10
4,499
67
3
10
4,434
66
6
9
4,361
48
0
2
1,751
52
0
4
1,768
52
0
4
1,754
50
0
4
1,714
13
3
10
5,183
23
3
19
5,284
24
3
20
5,314
24
3
20
5,223
1
0
0
95
2
0
1
160
2
0
1
196
1
0
1
187
DISTRIBUTION OF THE AVERAGE ANNUAL PAYMENT OF PPR
2011
2012
2013
2014
Average* Average* Average* Average*
(R$)
(R$)
(R$)
(R$)
2,168
2,344
2,285
2,755
2,927
3,122
3,054
3,698
5,086
5,416
5,262
6,533
9,370
10,849
10,870
13,161
3,308
3,585
3,542
4,281
* – The amount to be distributed corresponds to up to the limit of base payroll
(salary plus commission function and / or functional bonuses established in
the employment contract and the lenght of service additional) according
to the results achieved by the PPR indicators, and paid in the immediately
following year, in the following ratio: 30% will be divided by the total number
of employees and 70% applied in proportion to wages of each employee.
Sabesp’s employees are distributed in the
364 municipalities operated by the Company,
accounting for 56.4% of the São Paulo State’s
municipalities. The proportion between the
smallest salary and the minimum wage paid
at the company is 1.9, without any base salary
difference for men and women
68
62
0
0
983
Operational
As variable compensation, Sabesp adopts
the Profit Sharing Program aligned with the
compliance with strategic targets and involving everyone in a single objective. The PPR
aims at stimulating and recognizing the employees’ efforts to outpace targets and indicators set out in the Strategic Plan. Over the
years, the program has been evolved in terms
of scope, forms of distribution and indicators,
always aiming at aligning the criteria to the
Company’s strategies. It is yearly negotiated
with the unions, the general guidelines of which are set forth by Federal Law n° 10,101/2000
and State Decree n° 59,598/2013.
Professional
category
Operational
Technicians
University students
Managers
Sabesp Average
G4-LA13 MATHEMATICAL RATIO OF SALARY AND COMPENSATION
BETWEEN WOMEN E MEN, BROKEN DOWN BY EMPLOYEE CATEGORY AND RELEVANT OPERATING UNITS
2011
2012
2013
2014
Operational
1,880
2,012
2,212
2,443
Technicians
2,884
3,139
3,461
3,757
University students
5,955
6,412
7,076
7,742
Managers
13,117
15,170
16,388
17,295
Average
3,488
3,828
4,173
4,559
Overall (R$)
2011
2012
2013
2014
Initial Base Salary
815
1,100
1,189
1,376
Average Salary
3,488
3,828
4,173
4,559
Minimum wage
545
622
678
724
Percentage (%)
1.49
1.67
1.64
1.90
PERCENTAGE BETWEEN LOWEST SALARY AND MINIMUM WAGE – OVERALL
in R$
Lowest salary*
Minimum wage
Percentage
Benefícios
2011
2012
2013
2014
815
545
1.50
1,101
622
1.77
1,189
678
1.75
1,376
724
1.90
* – Lowest initial salary paid to the Environmental Sanitation Agent I. There is no difference of base salary between men and women.
G4-LA2
Sabesp adopts a policy of maintaining benefits consistent with those practiced in the market, which contributes to improve employees’ life quality. This policy also enables to attracting professionals, retaining talents and improving performance.
G4-EC5
VARIATION OF LOWEST SALARY PERCENTAGE, BROKEN DOWN BY GENDER,
COMPARED TO THE LOCAL MINIMUM WAGE IN RELEVANT OPERATING UNITS
2011
2012
2013
2014
Region 1
978
1,321
1,427
1,501
Region 2
815
1,101
1,189
1,376
Minimum wage
545
622
678
724
Region 1
1.79
2.12
2.10
2.07
Region 2
1.50
1.77
1.75
1.90
Lowest Salary
Legal benefits: night-shift premium, paid weekly rest, overtime, premium for unhealthy work, hazardous work pay, day-care assistance, special day-care assistance, uniform cleaning, remote duty and
transportation ticket.
Percentage
Other practices: social welfare, group life insurance, supermarket/drugstore card.
Benefits Granted by the Company: meal ticket, snack at extraordinary hour, staple basket, Christmas basket, Children Center – CCI, job
stability, additional sick pay, vacation bonus, health care and private
pension plan (Fundação Sabesprev). It is worth mentioning that the
health care and private pension plan benefits have been discussed by
the Company, requiring studies to analyze the impacts and support the
decision on these issues:
• Health Care Plans : The Health Care Plans administered by Sabesprev and by Economic Research Institute Foundation – FIPE, have
been reviewed, evaluating the possibility of improving the inactive
employees’ plans.
• Private Pension Plan: Employees until July 2010, had access to
a single defined benefit (BD) private pension plan. In view of its
characteristics, this plan recorded a relevant actuarial deficit. On
that date, the National Superintendence of Supplementary Private
Pension – PREVIC approved the proposal to extinguish BD plan and
create a new plan under the Defined Contribution mode (CD), the
Sabesprev Mais. Currently, this matter is under judgment, and the
Benefit Plan – BD remains with 8,670 active beneficiaries and Sabesprev Mais with 5,188 beneficiaries.
Average Salary
Obs.: There is no difference of base salary between men and women.
Skill-and Performance-Based Assessment
Union Freedom and
Collective Bargaining Agreement
G4-LA11
The Skill – and Performance – Based Assessment is an
important managerial tool which foments the continued communication between manager and his team, besides identifying the
level of skill development and performance of employees related to business strategies. The assessment cycle targets all employees, every year, allowing to equalize expectations between
manager and employee.
The possibility of employee’s career ascension relies on the
skill-and performance-based assessment results and the budgetary availability. It is worth mentioning that the skill-and performance-based assessment goes beyond promotion issues,
enabling a perception of the organizational climate, identify performance gaps and define development individual plans. In the
last cycle, 3,640 employees were promoted and 42,332 development commitments were established.
G4-HR4/G4-11
Sabesp seeks to be proactive in its relationship with professional associations, prioritizing ethics and harmony.
Also consistent with corporate governance
principles, the Company encourages and
supports its employees to participate in
professional associations, as a full exercise of their rights. This also foments the
individual development and collaborate to
maintain a good organizational climate. Out
of total employees, approximately 70% are
voluntary Union members.
The Unions represent employees at the
Company, at the proportion of one Union lea-
During its
qualification
processes,
Sabesp assesses
the compliance
with local
environmental
laws by its
suppliers through
installation
and operation
licenses issued
by environmental
agencies
69
ENTITY AND OBJECTIVE
Sabesp Association – development of leisure, sport, social and cultural activities
Association of Retirees and Pensioners of Sabesp – AAPS – defense of retirees and pensioners and active employees eligible
to retirement and also the improvement of their life quality
Association of University Professionals of Sabesp/APU – it represents employees of all backgrounds, to collaborate and influence
the environmental sanitation management, expand the channels of participation in the company management, improve and develop
professionals
Association of Sabesp Managers/ADMSABESP – defense of interests and aspirations, promoting the professional recognition,
ensuring the strict observance to the professional and employee ethics
Association of Sabesp Engineers/AESABESP – integration and defense of interests nationwide and internationally and promote the
technical and cultural development
Cooperative of Economy and Mutual Credit of Sabesp Employees/CECRES – it offers lines of credit with more accessible interest rates
Social Security Sabesp Foundation – Sabesprev – supplementary private pension closed entity liable for managing the private pension
plans (12,570) and health care (13,700)
Brazilian Association of Sanitary and Environmental Engineering/ABES – contribution to the knowledge and improved life quality of
Brazilian society. It participates nationwide and statewide of CONAMA, National Council of Water Resources – CNRH, CONFEA (Federal
Council of Engineering and Agronomy), Environment State Councils and others
Brazilian Association of Infrastructure and Base Industries/ABDIB – development of Brazilian infrastructure market and base industry,
strengthening them according to international standards
To preserve health
and develope a
culture of safety
is priority at
Sabesp’s people
management
70
der for each 478 employees. Main Unions at
the Company are: Sintaema – the São Paulo State Water, Sewage and Environmental
Workers’ Union, Sintius – Workers Union of
Urban Industries of Santos, Santos coast region, south coast and Vale do Ribeira, SEESP
– Engineers Union in the State of São Paulo,
SASP – the São Paulo Lawyers’ Union, Sintec – the São Paulo State High School Industrial Technicians’ Union and others.
These entities play their role actively
not only claiming improvements, but also
giving opinions on corporate issues. The
collective bargaining process takes place every May and issues are discussed
directly with workers unions, without the
employer’s union intervention.
The Company conducts negotiations with
responsibility and transparency, valuing the
healthy dialogue with Union entities. They
also hold meetings at any time in order to discuss reasonable proposals aiming at meeting
employees’ expectations and they maintain a
positive agenda with leaderships, aiming at
mitigating the usual restrictions of this relationship, however, in observance to its financial capacity and governmental guidelines.
In the 2011-2014 period, the answer to claims prioritized relevant issues referring to labor
relations, in line with the best market’s practices. Besides Unions, other
entities and associations gather employees with different objectives,
enabling greater participation and integration.
In labor relations, our challenge is to maintain a contingency plan
encompassing strategies and attitudes ensuring continued production
processes. This requires a stimulating and synergic environment so that
business leaderships and employees’ representatives show to be endeavored to always find conciliatory solutions for any differences.
Occupational health and safety
To preserve health and develop a culture of safety is priority at
Sabesp’s people management. The activity involved in business
poses several risks which may cause consequences to employees and the environment. Most of human diversity and the places
where activities are carried out require a management system to
protect approximately 15,000 employees and also service providers involved in the daily work. To minimize risks and zero accidents in the working process are the main challenges, converging integrated actions towards preservation of health.
G4-HR7
The professionals working in Specialized Occupational Health and Safety Engineering Services – SESMT effectively
participate by advising managers in each business unit to observe and promote the culture of health and safety prevention at the
company. We also rely on the engagement and commitment of
3,700 professionals working as Cipa members, 1,500 at 150 CIPAS
and 2,260 members of the fire brigade. Such performance makes
the difference in results obtained.
G4-LA5
Out of total employees, 25% work in health and safety
formal committees and they are involved in activities, such as systematization, monitoring and specific programs. On a corporate basis,
over the past years, Sabesp has been improving occupational health
and safety prevention programs in order to ensure and improve professional activities, adding and incorporating life quality.
The planning and direction of actions, campaigns and programs apply the statistical reports of occupational accidents occurred with employees and service providers, as well as main
occupational health indexes in entire company. This practice has
been optimizing the resources destined to prevention in view of
gradual reduction of frequency and severity of accidents and occupational diseases.
Safety Practices
The main actions developed are:
• Standardization and Programs – basis and structure of Management System: the occupational health and safety procedures were
improved and combined into two single documents in order to improve and facilitate its application and the compliance with laws.
The unhealthy and hazardous work pay procedure in May 2014,
defined a new methodology to standardize the employees’ classification into the Exposure Similar Groups – GHE in entire Sabesp.
This adjustment derived from a study prepared by specialized consulting firm, with the participation of Unions and representatives of
Sabesp’s executive boards and approved in the 2014/2015 collective bargaining agreement.
• Environmental Risk Prevention Program (PPRA): this is generated by a computerized system and comprises Sabesp’s 500
establishments, identifying the environmental risks by Exposure Similar Groups– GHE, defining measures of control and the
development of health and safety corrective actions.
• Occupational Health Medical Control Program (PCMSO): it
allows to outline the health profile of all employees, apprentices and trainees and subsidizes health and life quality programs, besides complying with legal aspects.
• Vaccination Program, it targets the prevention of infectious diseases. In 2013 and 2014, 4,160 employees exposed to sewage
were vaccinated against typhoid fever.
SST Performance Indicators
Occupational medical examinations (nº)
Employees vaccinated against influenza (nº)
Non-conformities (unsafe conditions) registered
SST qualification opportunities (nº)
Participations in the Prevention Minute (nº)
Campaigns developed by CIPA (nº)
Inspections carried out by SESMT and CIPA (nº)
% of non-conformities solved
% of items solved at inspections
Investments (R$ million)
Investment in prevention per capita (R$)
• CIPA in Action Program, aiming at potentializing Cipa’s actions (internal
committee for accident prevention)
with company’s leaders. We also point
out the In-house Week of Occupational Accident Prevention– SIPAT, with
15,000 attendances yearly.
• Fire Brigades, 290 present in all
the company’s units, liable for identifying, answering and controlling emergency situations.
• Minute of Prevention is a practice, with
40,000 attendances/year, including quick discussions organized by CIPA, SESMT and official representatives. The
issues discussed are filmed and made
available at the Corporate TV in the Virtual Prevention Minute.
• Health and Safety Campaigns were
intensified through newsletters, lectures and preventive actions, such
as “Você no Trânsito” (you in the traffic), “Segurança nota 10” (Safety grade 10), Prevenção contra Dengue (prevention against dengue), Ergonomia
(ergonomy), Conjunctivitis, Influenza,
among others.
• Indicators and Corrective Action – the
path towards the optimization of actions: the computerized health and safety managerial report informs and subsidizes managers in the critical analysis
of processes and proposal of corrective
actions from indicators obtained (see
box below (see table below).
Overall, we verify that the integration
of programs developed and investments
made in occupational health and safety over the past years contributed to the
gradual reduction by 16% in the number of
accidents in the period.
2011
2012
2013
2014
14,607
1,331
60,501
40,000
700
1
1
10
600
12,475
11,343
1,403
42,033
39,967
776
3,916
1
1
12
799
15,456
12,256
1,534
38,363
39,338
1,073
4,271
1
1
12
799
15,020
13,037
1,023
28,261
32,979
669
2,638
1
1
10
695
Minute of
Prevention
is a practice,
with 40,000
attendances/
year, including
quick discussions
organized by
CIPA, SESMT
and official
representatives;
issues discussed
are filmed and
made available
at the Corporate
TV in the Virtual
Prevention
Minute
71
G4-LA6
TYPES AND RATES OF INJURIES, OCCUPATIONAL DISEASES, DAYS LOST, ABSENTEEISM AND NUMBER OF OCCUPATIONAL
DECEASES BROKEN DOWN BY REGION AND GENDER
G4-LA7 EMPLOYEES WITH HIGH INCIDENCE OR HIGH RISK OF OCCUPATIONAL DISEASES
2011
2012
2013
2014
Men
Women
Total
Men
Women
Total
Men
Women
Total
Men
Women
Total
Frequency rate
8.0
2.9
7.1
6.2
1.7
5.4
7.0
4.6
6.6
7.4
4.3
6.4
Severity rate
365
189
334
209
20
175
557
182
488
326
40
274
Occupational disease
103
16
119
64
15
79
68
5
73
1
0
1
Training and Education
Sabesp
3%
Absenteeism (%)
Decease
0
2%
0
0
1
3%
0
1
2%
3
0
3
1
0
1
Region 1 (metropolitan region of São Paulo, Paraíba valley and Santos coast region)
Frequency rate
8.3
3.4
7.3
5.1
2.1
4.7
6.9
4.6
6.4
7.7
2.2
6.6
Severity rate
298
140
266
150
25
124
674
158
565
318
49
262
Occupational disease
81
16
97
34
12
46
35
3
38
1
0
1
3%
Absenteeism (%)
Decease
0
3%
0
0
1
3%
0
2%
0
2
0
2
1
0
1
Região 2 (Sistemas Regionais exceto Vale do Paraíba e Baixada Santista)
Frequency rate
7.3
1.1
6.6
8.6
0.0
7.7
7.3
4.6
7.0
6.7
1.2
5.9
Severity rate
506
402
495
335
0
296
311
291
309
343
0
303
Occupational disease
22
0
22
30
3
33
32
2
34
0
0
0
0
0
2%
Absenteeism (%)
Decease
0
2%
0
0
0
3%
0
0
1
2%
0
1
0
Definitions: Frequency rate: number of occupational accidents including injury and leave by million hours/men worked yearly.
Severity rate: Days lost debited from occupational accidents by million hours /men worked yearly. Occupational disease: Number of employees under leave due to disease or triggered by work activity. The 2011 to 2013 amounts will be added by the cases of common disease
being converted into occupational disease, by INSS (Brazilian Social Security Institute), due to epidemiological technical nexus defined by
such agency. Absenteeism: Percentage which measures the decrease of total load of hours worked due to absence at work.
Life Quality
The Life Quality – Live Happy Program
aims at offering the opportunity to, by means
of cultural change, assimilate the relevance
of having a healthy life. The program has
prevention characteristics, supporting and
encouraging personal habits and life styles
which promote health and wellbeing, also
contributing to improved work environment.
In order to direct the corporate actions
to life quality, Sabesp’s Employees Life Style
Mapping was conducted and 6,274 employees participated (40% of permanent employees), whose results allowed to conclude that,
implementing two corporate actions related
to food education and prevention against sedentary lifestyle, it is possible to contribute to
control and prevent chronic diseases, such
as obesity, hypertension, diabetes, high cholesterol and stress.
72
blue every Friday in November. Information lectures, video screenings, and testimonial talks about the importance of prevention
and early diagnosis were also given.
In order to reduce these risks, corporate actions concerned
with food re-educational and physical activity are carried out. In
2014, the higher emphasis was the fight against sedentary lifestyle, promoting the regular practice of physical activity, such as,
for instance:
• The Challenge Day: a worldwide physical activity campaign
held every last Wednesday of May, a day dedicated to the life
quality. Consisting of more than 200 activities that include spots
matches, dance, gymnastics, power walking and others, Sabesp added more than 22,600 participants in the Challenge Day
between 2011 and 2014.
• Arrangements with Fitness Gyms: Employees and dependents
have discounts in the monthly fees of 23 accredited fitness gyms.
Several other corporate actions are regularly conducted to
promote changes of behavior, life style and raise the health concern: the Blood Donation Campaign in 2014 resulted in a total of
1,270 blood bags collected, Pink October and Blue November:
these are breast and prostate awareness and prevention campaigns. As it happen all around the world, several Sabesp buildings were illuminated with the corresponding colors, and the
employees dressed in pink every Friday in October and dressed in
Sabesp was one of the pioneers to adopt the concept of corporate education in Brazil and naturally transformed into influencers of its continued evolvement. The Sabesp Corporate University has been an ideal tool for the professional development, so
that Sabesp is able to adapt to a complex scenario and several
transformations of the sanitation sector and the Brazilian economy. In order to make feasible its programs, UES adopted a learning architecture which mixes on-site methods and self-development, practices to share knowledge and distance education.
In a company geographically distributed, such as Sabesp, the
distance education – EAD plays a relevant role in the process
of disseminating knowledge and collectively exchange information. With an annual list of approximately 500 distance courses
in different formats, Sabesp offers 35,000 participations/year on
average. The number of participants has been growing yearly
and the proportion of those attending distance courses already
achieved 52% of total attendances in 2014.
G4-LA10 The Qualification and Development Plan is prepared
yearly– PCD, addressing the technical and operational demands
focused on environment, water resources, sustainability, environmental sanitation, solid waste, environmental laws, environmental education, safety, human resources, quality, social and
environmental responsibility and compliance.
Another source of analyzing needs is the Development Individual Plan – PID a product of the Skill-and Performance-Based Assessment, where after the feedback at the end of each assessment
cycle, manager and employee establish a development plan for the
G4-LA9
next prevailing period. As a result of two
cycles of Skill-and Performance-Based Assessment, 83,000 development commitments
were generated directing the UES’ qualification and development programs.
The University has a subsidy program
aiming at raising education to answer
with expertise to the organization’s technical demands, pointing out MBA/graduate
studies, technical professional courses,
languages, educational agreement and
professional certification.
Strengthening Sabesp Leadership
The Sabesp Corporate University – UES
is liable for developing leaders continuously
preparing the organization for business challenges. The highlight among UES’s actions is
the Management Excellence Program– PEG
aiming at developing our leaders, whose
main challenge is to help reaching sustainable, responsible universal water and sewage services until the end of the decade. This
activity aims at contributing to implement an
entrepreneurship culture, focused on result-driven management, people valuation and
development, incentive to creativity and innovation in work processes. Between 2012
and 2014, we formed three classes, comprising 370 leaders.
The need to replace our current leaders
and the fact that 50 % of our officers will re-
Sabesp
University has a
subsidy program
aiming at raising
education to
answer with
expertise to the
organization’s
techinical
demands
AVERAGE NUMBER OF TRAINING HOURS/YEAR/EMPLOYEE
broken down by gender and employee category
Average of hours in 2011
Average of hours in 2012
Average of hours in 2013
Average of hours in 2014
Category
Men
Women
Total
Men
Women
Total
Men
Women
Total
Men
Women
Total
Managers
116.1
71.1
55.2
50.4
58.6
52.0
86.3
94.9
87.9
58.4
72.3
61.1
University students
88.8
71.0
66.5
61.3
82.7
69.0
96.6
106.4
100.1
91.1
98.5
93.8
Technicians
63.9
45.5
43.4
44.2
61.2
49.0
58.5
60.3
59.0
60.5
66.6
62.2
Operational
40.2
36.0
35.9
29.7
37.0
29.9
44.6
58.7
45.1
37.2
55.5
37.9
Young apprentices
23.4
50.7
39.8
77.5
75.6
76.8
114.3
153.9
128.4
449.9
460.6
453.7
Trainees
63.9
56.1
68.4
77.1
83.8
80.5
109.3
102.5
105.8
64.1
62.5
63.3
Total
60.5
46.3
46.5
42.9
69.4
48.8
62.2
83.6
67.0
66.2
94.9
72.7
Attendances
2011
2012
2013
2014
Attendance
108,854
92,372
128,903
134,986
9,000
8,442
10,669
11,642
546
510
646
708
Total investment (R$ thousand)
Investment per capita
73
By the coaching
process, leader
have the
opportunity
to reflect and
review skills and
challneges and,
forming action
plans, improve
the most varied
capabilities
to achieve
their goals, in
line with the
Company’s
mission
“
tire in the next five years, required us to prepare their successors. Our Succession and
Career Program aims at developing a new
generation of leaders, culturally aligned and
ready to face competition and ensure the
business sustainability. The company’s main
challenge in this program was to build a successor development process consistent with
and in line with the market’s best practices,
offering a competitive edge in these professionals’ qualification. The results obtained
are already translated into the ascension of
19 professionals (22% of participants), who
assumed managerial positions between 2011
and 2014. Aiming at structuring other members of the Succession Program, an assessment process was conducted in 2014 which
resulted in the selection of 78 professionals.
This time, the emphasis was the appointment
of new successors by Sabesp’s units, valuing
the perception of potential leadership detected by respective areas’ managers.
Another drive to development is the
Coaching process where leaders have the
opportunity to reflect and review skills and
challenges and from action plans, improve the most varied capabilities to achieve their goals, in line with the Company’s
mission. Up to date, 180 leaders from all of
Sabesp’s executive boards underwent the
executive coaching.
The direction conferred to the leadership programs considers the sanitation activity external plan, which has daily becoming more competitive with the presence
of domestic and international competitors
with new and higher requirements from
granting authorities, regulatory authorities
and the society in general. Therefore, the
evolvement of this sector challenges leaders to find new answers to new questions
– and managers of the future need to be
thus qualified.
Sabesp operates 23 decentralized
units,which process bids guided
by an institutional policy which aims at
ensuring the application of prevailing
lawsand contract activities and estabilishes
conditions, so that purchase services and
services serve the end customer efficiently
74
Knowledge Management
This is an essential process for the intellectual exchange
amongst individuals, so that to build a collective knowledge asset
to meet as much as possible the business’ objectives and involves the participation of qualified and experienced professionals.
Among the knowledge management practices of Sabesp Corporate University, we point out:
Knowledge centers, Sabesp cooperation network, stimulus to
innovation, critical knowledge, monographs, works and technical
presentations, travel report and external events, 64 virtual areas
and blogs; knowledge center, electronic management of 2,513
documents about working processes, articles from domestic and
international training program.
Climate Management
The Organizational Climate Management at Sabesp enables
the analysis of the company’s environment and the monitoring of
employees’ satisfaction, allowing to identify employees’ motivation in several aspects: leadership, relationship, pride, recognition, amongst others
The latest climate survey took place in the second half of 2013,
with 73% participation amongst active employees. Summarizing
results, 77% of employees considered Sabesp a good place to
work and the average satisfaction index stood at 59%. In 2014,
the Company focused the employees’ involvement to prepare action plans, thus, 18 workshops were held, involving 362 participants in focused groups with representatives of the Company’s
executive boards.
Our conviction is sustained that climate monitoring and employees’ involvement contribute to the development of an efficient people management and the organization’s joint commitment to enable positive results.
Evaluation of suppliers
The Company’s procurement processes are broadly disclosed in
our electronic bidding portal, available at our Website, ensuring suppliers equal participation conditions. The relationship with our suppliers is guided by ethics, transparency and social-environmental
criteria, reason that we encourage entities with which we maintain
business relationship to adhere to the management practices and
reduce the greenhouse gas emissions. We are the first government
company to implement an electronic procurement process in Brazil. Besides reducing costs, the system offers greater transparency,
efficiency and agility to its suppliers and population.
Sabesp’s on-line procurement system offers its suppliers
same competition and participation conditions, regardless of the
place these are installed, besides a relevant reduction of costs,
waste and obsolescence.
G4-LA14 Referring to the labor laws, it is worth mentioning that
all the requirements to evidence the compliance with its liabilities
enacted by the bidding laws are applied in our public notices. During bidding phase, the payment of social charges is evidenced, as
provided for by laws, duly settled by collecting agencies and no debt
in arrears before the Labor Court. As condition to supplier sign the
agreement, we check the regular standing of debt clearance certificate – C.N.D. of INSS (Brazilian Social Security Institute) and the
regular standing with Employee Severance Indemnity Fund – CRF.
During agreement, supplier shall submit to SABESP its invoice evidencing the monthly payment of the social charges, as
provided for by laws. The agreement has a clause referring to
Contractor’s obligations and responsibilities containing labor,
occupational safety and environmental requirements and it is
supported by legal orders, thus, conferring to Management a relevant role in terms of ensuring the labor rights. The contractor
also undertakes to establish partnerships (sub-contractors or
outsourced workers) only with companies with social security
and labor regular standing, as well as municipal, state or federal
taxes regular standing, the contractor being solely liable for any
irregular acts of facts practiced by sub-contractor and/or outsourced worker of its behalf, employees or representatives.
Referring to environmental responsibility during its qualification processes, Sabesp assesses the compliance with local environmental laws by its suppliers through installation and operation
licenses issued by environmental agencies. In addition, Sabesp
also evaluates the product’s toxicological risks, so that to ensure
safety both at the water treatment station and for end consumer.
G4-EN32 This process includes the following analyses: technological development index; evaluation of production process,
from raw material to final product; checking of aspects related to
environment/social responsibility; promotion of fair trade, selecting suppliers with same level of quality and within such context,
searching for lower price. (currently, Sabesp has 386 qualified
suppliers and 22,547 materials qualified in the series).
Sabesp promotes the participation and engagement of local
suppliers in their performance areas. Our business units have
their own budget and autonomy to contract on a decentralized
basis. We operate 23 decentralized units, which process bids
guided by an institutional policy, which aims at ensuring the application of prevailing laws in supply and contract activities and
establishes conditions, so that purchase and services serve end
customer efficiently.
Price Electronic Quote – Reversal Auction – in this option, supplier may participate in acquisition of supplies/equipment and
common services of up to R$16,000.00, works and engineering
services of up to R$30,000.00. Through the electronic quote process, all potential suppliers are notified via e-mail about the auction, therefore, they may tender bids on-line. Same participant
may tender several bids and the system administers them, showing the lowest prices, without however, reveal the bidders’ names. This type of quote provides transparency to the process and
allows higher competitiveness and accordingly, reduced prices.
The development of information may be followed and checked
by any citizen, since after the conclusion of the auction, results are
disclosed, evidencing once more the Sabesp’s seriousness when
dealing with these processes.
Climate survey
(second half of 2013)
73%
participation among
active employees
77%
of employees consider
Sabesp a good place
to work
59%
Average
satisfaction
ndex
Electronic invitation – in this option,
suppliers are invited by e-mail to register their proposals via Internet. On pre-established date, proposals are opened
via Web, via Special Commission of Bids
and immediately disclosed on the website.
The Electronic Invitation is used in acquisition of materials and equipment up to the
amount of R$80,000.00.
The regional purchases, the stimulus
to the micro and small-sized company, the
social responsibility and the adoption of
social and environment criteria compose
Sabesp’s actions in pursuit of sustainability in its contracts. Sabesp seeks higher
number of suppliers meeting the required technical specifications and quality
standards, it maintains a continued evaluation process opened to any company
interested in performing in any of the
market segments of its interest. Additional information is available in our website
www.sabesp.com.br – Qualification Normative Guidelines.
Regional
purchases,
stimulus to
the micro and
small-sized
company, social
responsibility and
adoption of social
and environmental
criteria compose
Sabesp’s actions
in pursuit of
sustainability in
its contracts
75
Child Labor
G4-LA15/HR5
The mesures
adpted by Sabesp
to remove all
forms of forced
or slave labor
result from a
study conducted
by the National
Pact on slave
labor employing
production chains
Sabesp’s bidding procedures determine as qualification condition1,
that bidder declares its regular standing
before the Ministry of Labor in the observance to the prohibitions provided for in
Article 7, item XXXIII of Brazil’s Federal
Constitution, i.e., forbidden night, hazardous or unhealthy work to those under 18
years of age and any work to those above 16 years, unless under the condition
as apprentice, as of 14 years of age During bidding phase, the failure to comply
with such notice rule will determine the
bidder’s disqualification and during the
contractual performance, any infringement to such rules may also result in contractual termination.
Besides the conditions foreseen in the
bidding procedures, the company has its
own qualification process for suppliers
and related products to acquire strategic
materials, such as chemical products.
In the qualification of suppliers, several
requirements are evaluated, amongst them,
the production process, from raw material
to the end product, verifying aspects related to the social responsibility, such as
child labor. Currently, Sabesp has 386 qualified suppliers and 22,547 materials qualified
in series. On the other hand, and in relation to the measures taken
to effectively eradicate child labor, for the seventh consecutive
year, we renewed the Save the Children certificate granted by Fundação Abrinq, as reported in the preamble of this chapter.
AWARDS RECEIVED IN 2014
Corporate Sustainability Index (ISE) BM&FBovespa. Sabesp joins this portfolio for the eight consecutive year.
“Value 1000” Award – Water and Sanitation Sector, granted by Valor Econômico newspaper.
Forced or Slave Labor
The most influential people in Brazil – 2014, conferred to the former chief executive officer, Dilma Pena by Época magazine, considered one of
2014’s eminent persons.
G4-HR6
IT & Government Award – Public e-Administration category, awarded by Fórum Editorial to Siges – Service Orders Computerized Management.
The measures adopted by Sabesp to remove all forms
of forced or slave labor result from a study conducted by the National Pact on employees production chains, which employ slave
labor. Actions involving the Registration of Sabesp’s Suppliers
and the participation in bids and contracts were sent at that time
to the Managing Committee of the National Pact for the Eradication of Slave Labor. Among these actions, we point out:
a) the systematic consultation of our registration area of the
“black list” of the Ministry of Employment and Labor in order
to check if Sabesp’s suppliers are using slave labor;
b) the bidders interested in participating in bids, or to qualify their
products in Sabesp, have to declare they do not use slave labor in their production chain and;
c) the contractual provision that the contractor will take the responsibility for any use of slave labor in its production chain.
Within this context, we point out that, the utilization of forced
or compulsory labor is reason for terminating the agreement
with Sabesp.
Also in relation to the commitments assumed, Sabesp publishes in its Social Report, included in its Sustainability Report that
does neither employ child nor slave labor, it is not involved in
prostitution or sexual exploitation of child or adolescent and it is
not involved in corruption.
Excellence Modern Consumer in Customer Services Award – state government services category, awarded by Consumidor Moderno magazine
to the customer service of regional systems executive board
One of 100 most innovative companies in IT – Brazil, conferred by IT Mídia, in partnership with PricewaterhouseCoopers (PwC) to Sabesp,
ranked in the 50th position.
Best Brazilian Sanitation Company, according to the ranking prepared by Spanish consulting firm Merco (Business Reputation Monitor) in
partnership with Ibope Inteligência, which lists the 100 most reputed companies in Brazil.
Sanitation Quality National Award (PNQS) 2014, conferred by the Brazilian Association of Sanitary and Environmental Engineering (Abes) :
• Level I – Bronze trophy: Vale do Paraíba business unit
• Level II – Gold trophy: Mooca and Interlagos regional management units
• Level II – Silver trophy: São Mateus regional management unit
• Level III – Platinum trophy: Santo Amaro regional management unit
São Paulo Management Quality Award PPQG/2014, organized by the São Paulo Management Quality Institute (IPEG):
• Level III – State Governor Trophy: Billings regional management unit
• Level II – Gold Medal: Santo Amaro regional management unit
One of the 15 priority works for Brazil’s development, granted according to a study issued by KPMG, independent auditors, auditing companies to
PPP São Lourenço.
Anefac 2014 Transparency Trophy – publicly-held companies with turnover up to R$5 billion, awarded by the National Association of Finance
Executives (Anefac) to Sabesp’s financial statements.
SP 2014 Highlights CIO Award, conferred by IT4CIO Network Technology to Sabesp’s IT Superintendent due to his influence on the information
technology sector.
DatacenterDynamics Awards 2014 National Champion in two categories: innovation in medium datacenter and leadership in the public sector,
awarded by Datacenterdynamics to Sabesp’s data center.
Water Guardians
In January 2015 only
40,000
im
89
neighborhood
condos
visited by Sabesp
teams in 2014
(some more
than once)
10,023
2nd position in the Benchmarking Ranking of Companies with the Best Sustainability Practices in Brazil, awarded to Sabesp by Benchmarking
Brasil, recognized as benchmark in the management of sustainability practices.
with increased
consumption
were visited
3rd Most Reliable Institution, conferred by Brazilian institute of Public Opinion and Statistics (Ibope) to Rede Nossa São Paulo, São Paulo citizens’
recognition to Sabesp for its services rendered with quality.
condos
were distributed
in the first quarter 2015
impacting over
6 million
20%
savings
on tap
flow reduction devices
distributed to RMSP customers
800
watertanks
people
millions of
Winner in the Sanitation Ranking 2014, awarded by Instituto Trata Brasil to the city of Franca with the basic sanitation best indexes (water supply;
sewage collection and treatment; losses; investments/collection).
goal:
25,000
units
For socially
vulnerable families
(income up to
three minimum wages)
who had lack of water
problems caused by low
reservation in their homes
The aim was to adjust buildings
reservation capacity to Brazilian Association of
Technical Standards (ABNT) regulation
and keep up to 24 hours water supplies
1 – Law 8,666/93 – Article. 27, item V – in compliance with provisions of Article 7, item XXXIII of the Brazilian Federal Constitution. (included by Law no. 9,854
of 1999).
76
Learning & Performance Award Brasil – Micropower, ABRH and ADVB 2014 – National Benchmark and rankest first – Best Practices and
Lessons Learned to Develop Human Capital
HR Management Award and “1,000 top and best companies” (Exame magazine) and “Best Companies to Work for” 2014:
• Top 100 Companies in HDI – Organizational, Sustainability, Human Development Index
• “Top 100 Companies in Corporate Citizenship 2014”.
São Paulo Diversity Seal – Full Seal, awarded by the São Paulo State Government to Sabesp for reaching the most advanced professional and
personal diversity policy level
Abrinq Seal – Awarded by Fundação Abrinq – Save the Children, for the seventh consecutive year, for the projects: Child Citizen Institute (ICC),
through which Sabesp is the cosponsor of nine daycare centers and three circus schools; Clubinho Sabesp, and the Apprentice Project
IT&Government Award 2014, granted by Fórum Editorial – Informática Hoje newspaper to SiiS Project – Sabesp’s Information Integrated System.
77
2014 ANNUAL SOCIAL REPORT
1 – Calculation Basis
2014 Ammount (Thousand reais)
2013 Ammount (Thousand reais)
Net Revenue (NR)
Operating Profit (OP)
Gross payroll (GP)
11,213,216
1,910,709
2,123,607
11,315,567
3,138,845
1,927,078
2 – Internal Social Indicators
Meals
Compulsory payroll changes
Private pension
Healthcare plan
Occupational health and safety
Education
Culture
Professional training and development
Day-care assistance
Profit sharing
Other
Total – Internal social indicators
3 – External social indicators
Education
Culture
Health and sanitation
Sports
Hunger erradication and food safety
Other
Total contributions to society
Taxes (excluding payroll charges)
Total – External social indicators
4 – Environmental Indicators
Investments related to the Company’s production / operation
Investments in external programs and/or projects
Total investments in environment
Concerning the establishment of “annual goasl” to
minimize waste, general consumption in production/
operation, and improve the efficiency in the use
of natural resources, the Company
Amount
(thousand)
% on GP
% on NR
Amount
(thousand)
% on GP
% on NR
144,449
177,969
69,474
131,353
11,541
2,000
457
10,501
1,936
63,925
3,967
617,572
6.80%
8.38%
3.27%
6.19%
0.54%
0.09%
0.02%
0.49%
0.09%
3.01%
0.19%
29.08%
1.29%
1.59%
0.62%
1.17%
0.10%
0.02%
0.00%
0.09%
0.02%
0.57%
0.04
5.51%
135,320
160,195
88,426
124,305
12,494
2,919
846
10,785
2,154
52,928
4,178
594,550
7.02%
8.31%
4.59%
6.45%
0.65%
0.15%
0.04%
0.56%
0.11%
2.75%
0.22%
30.85%
1.20%
1.42%
0.78%
1.10%
0.11%
0.03%
0.01%
0.10%
0.02%
0.47%
0.04%
5.25%
Amount
(thousand)
% on OP
% on NR
Amount
(thousand)
% on OP
% on NR
1,256
14,445
838
2,584
0
12,979
32,102
1,470,003
1,502,105
0.07%
0.76%
0.04%
0.14%
0.00%
0.68%
1.68%
76.93%
78.62%
0.01%
0.13%
0.01%
0.02%
0.00%
0.12%
0.29%
13.11%
13.40%
2,028
24,933
5,396
4,341
26
10,606
47,330
1,834,843
1,882,173
0.06%
0.79%
0.17%
0.14%
0.00%
0.34%
1.51%
58.46%
59.96%
0.02%
0.22%
0.05%
0.04%
0.00%
0.09%
0.42%
16.22%
16.63%
5 – Staff Indicators
Number of emloyees at the end of the period
Number of employees hired during the period
Number of outsourced employees*
Number of interns
Number of employees above 45 years
Number of female employees
% of management positions held by female employees
Number of afro-descendent employees
% of management positions held by black employees
Number of physically-impaired employees or employees
with special needs
6 – Relevant information about the exercise
of corporate citizenship
Ratio between the highest and lowest compensasion
in the Company
Total number of occupational accidents
0,79%
0,77%
1,56%
(X) does not have goals
( ) fulfill from 0 to 50%
( ) fulfill from 51 to 75%
( ) fulfill from 76 to 100%
0,14%
0,13%
0,27%
17.096
15.437
32.533
0,54%
0,49%
1,04%
(X) does not have goals
( ) fulfill from 0 to 50%
( ) fulfill from 51 to 75%
( ) fulfill from 76 to 100%
0,15%
0,14%
0,29%
2013
14,753
26
7,478
942
8,648
2,977
19.44%
2,261
3.76%
15,015
536
7,108
924
8,234
3,047
19.03%
2,307
3.34%
219
174
2014 Ammount
(Thousand reais)
Targets 2015
18.28
20.1
157
165
The social and environmental projects developed by the
Company were defined by:
( ) management
(x) management and managers
( ) all employees
( ) management
(x) management and managers
( ) all employees
The safety and health standards in the work environment
were defined by:
(x) management and managers
( ) all employees
( ) all + Cipa
(x) management and managers
( ) all employees
( ) all + Cipa
With respect to the trade union freedom, the right to collective
bargaining agreement and the internal representation of
employees, the Company:
( ) dos not get involved
( ) follows ILO rules
(x) will incentive and follow ILO
( ) dos not get involved
( ) follows ILO rules
(x) will incentive and follow ILO
The private pension plan includes:
( ) management
( ) management and managers
(x) all employees
( ) management
( ) management and managers
(x) all employees
The profit sharing includes:
( ) management
( ) management and managers
(x) all employees
( ) management
( ) management and managers
(x) all employees
In the selection of suppliers, the same ethical
and social and environmental responsibility standards
adopeted by the Company:
( ) are not considered
( ) are suggested
(x) are required
( ) are not considered
( ) are suggested
(x) are required
With respect to the employees participation in
voluntary work programs, the Company:
( ) does not get involved
( ) supports
(x) organizes and encourages
( ) does not get involved
( ) supports
(x) organizes and encourages
Total number of customer’s complaints and comments
in the Company (Ombudsman) 65,762 na empresa Ouv. n/a
in Procon CIP 2,000
no Procon CIP n/a
in Court JEC/Conc. 331
na Justiça JEC/Conc. n/a
% of complaints and comments received or solved
in the Company (Ombudsman) 98.16% na empresa Ouv. n/a
in Procon CIP 89.6%
no Procon CIP n/a
in Court JEC/Conc. 76.7%
na Justiça JEC/Conc. n/a
Total value added to distribute (em thousands of R$):
In 2014: 5,731,007
In 2013: 6,656,476
Distribution of value added:
25.6% government;
34.1% employees;
15.7% shareholders;
24.6% outsourced;
12.0% retained
27.6% government
26.3% employees;
6.9% shareholers;
17.2% outsourced;
22.0% retained
Valor (mil) % sobre RO % sobre RL Valor (mil) % sobre RO % sobre RL
15.155
14.695
29.850
2014
7 – Other information
HR7 “This company does no hire child or slave labor, it has no involvement with prostitution or sexual exploration of children
or adolescents and is not involved in corruption”. “Our company values and respects the internal and external diversity”.
“The number of outsourced employee(s) is estimated considering the labor allocated to services agreement, since Sabesp does
not hire outsourced workers directly”.
78
79
Materiality matrix
ABOUT THE REPORT
The indicators discussed were prioritized according to the relevance for Sabesp and stakeholders with whom the Company is
periodically engaged: employees, customers (municipalities), customers (consumers), investors, suppliers, experts and third sector
/associations. These stakeholders participate in on-line consultations where they could point out the “very relevant”, “relevant”
and “irrelevant” aspects among those composing the GRI methodology. In total, 201 persons expressed their opinion.
G4-20
Crossing the issues mentioned by stakeholders, added to
the analysis of 2014 Company clipping and Sabesp’s perception of the
relevance and applicability for its businesses and sector, by means of materiality tests,
pointed out the aspects effectively relevant
for the organization at this moment – issues
which may reflect the economic, social and
environmental impacts or which may significantly influence the stakeholders’ evaluations and decisions. This process gave rise to
the following materiality matrix. The aspects
contained in the quadrant “very relevant”
have been discussed in report and are relevant for the entire organization.
G4-18/19/21/22/24/25/26/28/29/30/31/33/80
For eight years, Sabesp has been yearly
releasing its Sustainability Report. This is
the fourth edition published concurrently
with the Company’s Management Report,
in line with our Joint Committee’s decision
to comply with the market best practices.
This initiative is also in line with the principle of accountability transparency with the
stakeholders involved in such business.
The material approaches the Company’s
performance from January 1, 2014 to December 31, 2014. Therefore, this document includes main information about the
Company’s operational, economic, social
and environmental performance in referred period. The growth opportunities strategically built from challenges found in the
Company’s daily activities are also reported herein and follow business development projections until the end of decade,
as set out in our Target Plan.
The information contained herein also
follow the evolution of works executed by
Sabesp included in its latest report released on March 31, 2014. In addition, these
data are also used as document to evidence the company’s advance in relation to
the 10 principles defined by Global Compact, from which Sabesp has been signatory since 2006. This initiative created by
the United Nations (UN) includes companies that promote the sustainable development from guidelines which encompass
human rights and the sustainable relation
with environment.
In 2014 report we again followed the
GRI (Global Reporting Initiative) methodology which proposes guidelines to monitor
the economic, social and environmental
indicators. This is the most complete me-
80
thod and accepted in today’s sustainability reports. We decided
to migrate from version 3.1 of GRI, adopted in the last four editions
to G4 guidelines, mandatory as of reports prepared based on the
year of 2015. The indicators can be found highlighted throughout
the text, alongside the issue reported. A reference list describing
each one of these indicators can be found in the final pages hereof. This report was not submitted to external check.
Following the content of the last reports, the execution of this
report also started with the top management’s involvement, after
discussion and approval of the process adopted for its preparation by the Company’s Joint Committee in a meeting held in December 2014. Subsequently, in March 2015, documentation was
sent to the Board of Directors’ cognizance.
In addition, the rules issued by the Brazilian Securities and
Exchange Commission (CVM) were applied and the International
Financial Reporting Standards (IFRS), issued by the International
Accounting Standards Board – IASB were applied in the financial
statements and pursuant to the accounting practices adopted in
Brazil which observe the pronouncements issued by the Brazilian
Accounting Pronouncements – CPCs.
The financial statements are audited by Deloitte Touch Tomatsu Auditores Independentes. In order to prepare the Social
Report, we used the guide of Brazilian Institute of Social and Economic Analyses (Ibase) and the Instituto Ethos’ model.
The survey of data and the construction of texts relied
on the participation of a team composed of two members of each
one of the Company’s five executive boards, all of them directly
appointed by officers. With the participation of other strategic
departments composing the work group.
Successive meetings were held, whether individually or joining the whole team for adjustments to the data collection process, alignment of issues and number checking, always seeking
the accuracy and clarity in information disclosed. The preparation hereof also had the technical contribution of MZ Associados
consulting firm.
The electronic version of this report can be found in at our
website www.sabesp.com.br/RS2014, on this date only in Portuguese and subsequently also in English and Spanish versions.
Further information, suggestions and comments about this public
must be sent to sustentabilidade@sabesp.com.br.
Aspects to be reported

Economic performance

Procurement practices

Energy

Water

Emissions

Effluent and waste

Products and services

Conformity

Investments and environmental protection expenses

Action against corruption

Customer’s health and safety
81
G4-32
GRI INDICATORS
GRI G4 Indicator
Pages
Economic category
Economic performance
Este relatório apresenta conteúdos Padrão das Diretrizes GRI para Relato de Sustentabilidade.
A localização dos indicadores abordados no relatório está identificada nas tabelas a seguir.
Overall Standard Contents
Page
G4-EC1 Direct economic value generated and distributed
G4-EC2 Financial implications and other risks and opportu-nities for the organization's activities due to climate change
G4-EC5
G4-EC8
Strategy and analysis
6, 7
G4-1
Organizational profile
G4-3
9-10
G4-4
9-10
G4-5
9-10
G4-6
9-10
G4-7
9-10
G4-8
9-10
G4-9
9-10
G4-10
61
G4-11
69
G4-13
No relevant changes to be reported
G4-15
61
G4-16
56
Relevant aspects identified and thresholds
G4-17
Not applicable
G4-18
80-81
G4-19
80-81
G4-21
80-81
G4-22
80-81
G4-23
No relevant changes to be reported
G4-EN1
G4-EN2
G4-EN3
G4-EN5
G4-EN6
G4-EN7
G4-EN8
G4-EN10
G4-EN10
G4-EN11
G4-EN15
G4-EN16
G4-EN17
G4-EN22
G4-EN22
G4-EN22
G4-EN27 Water Rational Use Program
G4-EN27 Effluents reuse
G4-EN31
Steakholders commitment
G4-24
80-81
G4-25
80-81
G4-26
80-81
Report profile
G4-28
80-81
G4-29
80-81
G4-30
80-81
G4-31
80-81
G4-32
80-82
G4-33
80-81
Presence in the market
Range of ratios of standard entry level wage, by gender, compared to local minimum wage at significant
locations of operation
Indirect and economic impacts
Significant indirect economic impacts, including the extent of impacts
Environmental category
Supplies
Chemical products used to treat water and sewage
Percentage of chemical products used in water and sewage treatment deriving from recycling
Energy
Total electricity consumption
Electricity consumption /m³ for water and sewage
Reduction of energy consumption for water and sewage
Reductions in energy/m³ requirements for water and sewage
Water
Total water withdrawn – surface and underground sources
Percentage of water consumption at ETAs
Recovery percentage of washing water for filters and clarifiers at ETAs
Biodiversity
Reserves inside protected areas
Emissions
Direct emissions of greenhouse gases (GEE) (Scope 1)
Indirect emissions of greenhouse gases (GEE) deriv-ing from energy acquisition (scope 2)
Other indirect emissions of greenhouse gases (GEE) (Scope 3)
Effluents and waste
Reuse water volume provided
Percentage of reuse water sold over sewage treat-ed at ETEs with reuse
Reuse water percentage provided over installed capacity
Products and services
G4-LA1
G4-LA2
G4-LA3
G4-LA4
52
21
69
37, 44, 62, 67
14
14, 59
14
14, 34
14, 34
14
14
14
14
57
14, 56
14, 56
14, 56
14
14
14
33
38
Overall
Total environmental protection expenditures and investments
14, 55
Social category
Labor practices and decent work
Employment
Total number and percentages of hiring of employ-ees and turnover by age group, gender and region
65
Benefits granted to full-time employees not provid-ed to temporary workers or part-time employees, broken down by
68
important operating units of organization
Return-to-work and retention rates after materni-ty/paternity leave, broken down by gender
66
Labor relations
Minimum notice period(s) for operational changes and whether they are specified in collective agreements
The collective
agreements do
not stipulate a
minimum term to
notify operational
changes. Any
change is notified in
advance, and term
varies according to
the situation
Governance
10
G4-34
Ethics and honesty
G4-56
82
27, 61
83
GRI G4 Indicator
Pages
GRI G4 Indicator
Occupational Health and Safety
G4-LA5 Percentage of workforce represented at formal health and safety committees, composed of employees from different
71
G4-LA6 Types and rates of injuries, occupational diseases, days lost, absenteeism and number of occupational diseases,
72
hierarchical levels, who help to monitor and guide occupational health and safety programs
broken down by region and gender
G4-LA7 Employees with high level or high risk of occupa-tional diseases
G4-LA8 Topics related to health and safety covered by formal agreements with unions
72
The collective
agreements
executed between
Sabesp and Union
entities do not
include specific
issues related to
health and safety
Trading and Education
G4-LA9 Average number of training hours/year per employ-ees, broken down by gender and employee category
G4-LA10 Continued skills and learning programs contrib-uting to continued employability during pre-retirement period
G4-LA11 Percentage of employees regularly receiving ca-reer development and performance analyses, broken down by
gender and employee category
73
73
69
Diversity and equal opportunities
G4-LA12 Composition of groups in charge of governance and breakdown of employees by employee category, according to the
G4-LA13
G4-LA14
G4-LA15
G4-HR3
G4-HR4
G4-HR5
G4-HR6
G4-HR7
G4-HR8
86-88
gender, age group, minorities and other diversity indicators
Equal compensation between men and women
Mathematical ratio between salary and men/women compensation, broken down by employee category and relevant
69
operating units
Suppliers evaluation in labor practices
Percentage of new suppliers selected based on labor practices-related criteria
74
Actual and potential relevant negative impacts for labor practices in supply chain and measures taken referring to
76
this issue
Human rights
Non-discrimination
Total number of incidents of discrimination and corrective actions taken
26
Freedom of association and collective bargaining
Operations and suppliers identified in which the right to exercise freedom of association and collective bargaining
69
may be infringed or may be at significant risk, and actions taken to support these rights
Child labor
Operations and suppliers identified as having risk for incidents of child labor and measures to contribute to the effective
76
eradication of child labor
Forced or compulsory labor
Operations and suppliers identified as having significant risk for incidents of forced or compulsory labor, and
76
measures to contribute to the elimination of all forms of forced or compulsory labor
Safety practices
Percentage of security personnel trained in the organization’s policies or procedures concerning aspects of human
79
rights that are relevant to operations
Indigenous rights
Total number of incidents of violations involving rights of indigenous people and actions taken in this regard
In 2014, no
occurrences of this
type were registered
G4-SO1
G4-SO3
G4-SO4
G4-SO5
G4-SO6
Páginas
Society
Local communities
Percentage of operations with commitment programs implemented with local community, assessment of impacts
and local development
Action against corruption
Percentage and total number of operations analyzed for risks related to corruption and significant risks identified
Communication and training in policies and procedures against corruption
Cases confirmed of corruption and the measures taken
Government policies
Total value of financial contributions to political parties and politicians, by country and addressee/beneficiary
27
27
26
Sabesp does not
adopt such practice
Unfair competition
Total
number
of
legal
actions
for
anti-competitive
behavior,
anti-trust, and monopoly practices and their outcomes Lawsuit filed in
G4-SO7
2010 continues in
progress due to
damages caused
in view of cartel of
gases sentenced
by Cade (Brazilian
Antitrust Agency).
Decision was
unfavorable to
Sabesp at trial
court, and currently,
judgment on appeal
is pending
GLOBAL COMPACT PRINCIPLES
Principles
Pages
1 – Businesses should support and respect the protection of internationally proclaimed human
rights
61, 76
2 – Make sure that they are not complicit in human rights abuses
61, 76
3 – Businesses should uphold the freedom of association and the effective recognition of the right
to collective bargaining
69
4 – The elimination of all forms of forced and compulsory labor
76
5 – The effective abolition of child labor
76
6 – The elimination of discrimination in respect of employment and occupation
7 – Businesses should support a precautionary approach to environmental challenges
8 – Undertake initiatives to promote greater environmental responsibility
9 – Encourage the development and diffusion of environmentally friendly technologies
10 – Businesses should work against corruption in all its forms, including extortion and bribery
84
63
26, 27
7, 55, 58, 59
55, 58, 59
44
7, 28
85
86
87
88