Certification Is a Complex Contribution to Sustainability – Interview with Polyus’ Head of HSE and Sustainable Development

Polyus Managing Company became Russia’s first mining company certified under ISO 45001. What made the Company seek certification? What challenges did it face? What progress has been made in terms of implementing corporate safety culture programs? We discussed these issues with Roman Dertinov, Director for Health, Safety, Environment and Sustainable Development at Polyus.

— December 18 was an important day for MC Polyus as Charles Corrie, Secretary to ISO and BSI Technical Committees responsible for ISO 9001, ISO 14001, BS OHSAS 18001, ISO 45001 and ISO 55001 standards awarded your company with a certificate of compliance with ISO 45001 and 14001 standards. What made you seek this certification? And what does the integrated management system mean to you?

— The Company already had an integrated HSE management system in place. Certification marked the completion of the integration of our management systems. We started this process in 2016-2017 in accordance with our corporate development strategy, to ensure that the systems were compliant with Russian legal requirements as well as international standards. In 2018, we received an umbrella certification, meaning the management company’s (MC) certifications are valid for subsidiaries, and they will no longer need to obtain separate certificates of compliance with ISO 14001 and 45001.

We are Russia’s first miner to certify an integrated HSE system for compliance with ISO 45001, which we believe has several benefits:

• Improving industrial safety culture as a result of uniform approach and methods;
• Mitigation of risk of losses on the back of improved efficiency and transparency of processes aimed at risk management;
• Improved audit quality — preparation process fully governed by the management company;
• Improved control over HSE processes, building a system of end-to-end processes;
• Upgraded quality of compliance with Russian law and international HSE requirements;
• Top-level documents (policies, standards, guidance, etc.) are developed by the MC.

We are confident this will contribute to further improvements in safety culture across all Polyus units. An integrated system means that all of the Company’s material and physical risks are streamlined. Furthermore, integration provides a top-down approach, standardization and implies that methodology promoted by the management company is extended to the business units. As a result, it is simpler to manage a single flow of information, which is also a lighter burden on the business and leads to increased savings due to lower expenses on supervision audits.

I would like to point out that we chose the British Standards Institution (BSI) as the certification body for a very good reason. First and foremost, it was crucial for us to select an independent entity. Secondly, BSI have founded the certification system and the overwhelming majority of ISO international standards are based on British national standards.

—Did you encounter any resistance from your staff during the process of introducing change to the business? Was it easy for people to adapt to the changes?

— We made sure to carry out the changes under conditions that would be comfortable for all our staff. Our people are very familiar with teamwork in working groups. Certification is a complex process which requires collaboration of all those departments contributing to sustainable development such as HR, Operations, GR, etc. In addition, many of our people have prior experience working for oil & gas or mining companies and are therefore accustomed with international standards and appreciate its importance. Hence it was not a challenge. It is also important to note that some time ago our company was audited by the International Council on Mining and Metals (ICMM) to become a member, and back then we had already implemented high corporate governance standards in accordance with ICMM’s requirements.

— What significant HSE projects is the company implementing at the moment?

— 2017 was declared the Year of the Environment in Russia. For our company, this was not just a slogan; we worked hard to reduce our levels of industrial and domestic waste. In August 2018, we completed the first construction stage of landfill facilities at Olimpiada. The area includes a number of important facilities: refuse pits for solid household and industrial waste; a two-section containment pond to collect storm and thaw water from the landfill and pit surfaces; a process area with a shelter equipped with an electrically operated bridge crane as well as a shredding machine, a press and a special BB-700 machine to process OTR tires. Two incinerators were installed near the area to neutralize waste and a special weigh bridge was designed to register waste coming to the landfill. There is a disinfectant concrete bath and a wash near the exit of the landfill.

The facilities were constructed in compliance with current environmental requirements and provide for long-term disposal of production and consumption waste. Furthermore, these facilities are designed for the disposal of certain waste types which cannot be buried as of 2019. The environmental impact of the landfill will be monitored through four inspection wells.

I would also like to mention the new treatment facilities that were constructed and commissioned at Verninskoye, to treat sewage waters from the shift camp.

In terms of measures to develop our occupational health and industrial safety systems, the Company started to build an emergency station, which is due to be commissioned in 2019. The station will feature a new building fitted out with innovative equipment for the fire brigade at Olimpiada. Moreover, the facility will provide training for employees who work at height on a special training range, as falls from height account for the majority of accidents. This project will make Olimpiada’s facilities safer against accidents and emergencies.

Speaking of professional training, the SAP Success Factors program was launched at Polyus Krasnoyarsk and Polyus Aldan in 4Q 2018, and will be scaled up across all business units in 2019. The program will ensure full control and transparency of compulsory and corporate training.

A training program on best HSE practices for line managers was developed and reviewed, covering three major areas:

• HSE leadership;
• Risk assessment;
• Incident investigation.

In 2018, 75% of blue-collar workers were trained in safety culture improvement and injury prevention and 94% of staff received base H&S training.

Moreover, in addition to training line manager, the HSE training was extended to include our top management as well. The Company’s Vice Presidents and Managing Directors have also received training in line with best HSE practices for top managers. As part of the company’s certification, training was arranged in compliance with ISO 14001 and ISO 45001 and carried out in 3Q — 4Q 2018 for the employees of the management company and business units involved in certification. A three-stage training program was also prepared on environmental protection, with training scheduled to start in 2019.

— Since we raised the topic of emergency prevention, what are the key risks in this area? And how do you intend to mitigate them?

— The key environmental risks are associated with waste management. We are continuously monitoring our landfills and their environmental impact. We ensure that waste collection and accumulation is continuously supervised to prevent unauthorized disposal or any other violation of environmental requirements. It should be noted that neither our internal audits, nor inspections by public agencies have identified any major non-compliance with waste management legislation.

With regard to health and safety, statistics show that 88% of accidents are caused by human error. Key risks include workers falling, road accidents, electric shocks, impact from equipment and tools (moving, rotating parts, flying fragments). In order to mitigate these risks, we conduct a number of awareness-raising risk-oriented campaigns on an annual basis (Sober Driving, Passenger Safety, Slow Down, Risk of Tipping Over, High Five, Fences and LOTO, Hold on to the Railings, Slippery Floor, seasonal anti-flu vaccinations, Divide and Dispose, Preparation for the Wild Fire Season) and we are also executing a number of projects which I will come to later (fall prevention, LOTO, injury prevention from equipment and tools).

At the same time as developing our operational efficiency, we are developing SOPs and make our workplaces compliant with safety requirements under the 5S system. Standardization offers uniform processes and workplaces, improving safety quality and promoting an understanding of proper behavior among staff. After all, instilling a culture of safety in people is the most important thing. As soon as they learn to identify and assess risks properly, they will follow safety rules 24/7. It is vital that all processes should be measurable and somehow digitized, as figures enable us to track our progress in terms of safety culture development.

— How would you describe the progress in safety culture development at your company? Which issues would you like to highlight?

— When I became HSE director in 2015, I realized that we needed to change the status of safety at the company. First of all, we adjusted the organizational structure so that the HSE departments in business units report directly to the CEO. We dramatically overhauled our KPIs —we now use the Bradley Curve (corporate safety culture evolution model) to assess the progress of safety culture across Polyus companies.

As a result of this, we hired BSI, an independent company.

In 2018, we beat our target for the development of the Group’s HSE management system (target figure: 2.2 vs. actual figure: 2.3). The assessment was based on 14 issues pertaining to the HSE management system, and each one was rated on a scale of 1 to 5. Level 2 status means that the company cares about its development and has implemented the main standards and processes. The importance of safety issues is considered to be relatively high. Furthermore, there is an audit system in place to identify hazardous occupational factors in the workplace.

Our goal is to reach a level of independence (level 3) by the end of 2020. Level 3 implies that the majority of workers have a good understanding of the goals to be achieved and that the systems are used efficiently. Safety culture improvement across Polyus operations is a corporate priority. Hence, developing our safety culture was reiterated as our main HSE KPI for 2019.

— Polyus has witnessed an overall decline in injury rate across all of its operations. How did the Company achieve this?

-The 2018 Lost Time Injury Frequency Rate (LTIFR) declined by 17% on a y-o-y basis, and the overall number of accidents has also decreased. To reduce the injury rate even further, the Company has initiated and implemented a number of projects, which are an optimal solution that can be easily digitized.

Based on 2016 data, the Fall Prevention program was selected as a priority in risk mitigation and implemented accordingly. Following the execution of the Fall Prevention campaign, the number of injuries from falling dropped by 63% (19 incidents in 2016 vs. 7 in 2018). In 2019, the project will continue with the installation systems to prevent falling from heights.

Based on 2017 data, the selected priority was a pilot project at Polyus Aldan mechanical workshop to prevent injury from the impact of moving equipment and tools and mitigate relevant risks. Following the implementation of the project in 2018, there was a zero injuries rate from the impact of equipment and tools (vs. two such injuries in 2017). In 2019, the project will be scaled up across our other business units.

The LOTO project has been in implementation since 2016 to minimize hazards related to electric current and, as a result, incidents of considerably lower severity were recorded in 2018.

In addition, the overall mechanical availability level was improved: 98% of machinery and equipment operated across Polyus was utilized in line with the established service life (vs. 93% in 2016) due to appropriately timed H&S inspections. The overall percentage of instructions carried out according to schedule for Polyus companies currently stands at 99%.

Overall, I would like to stress that every production model should encapsulate two key items: efficiency and safety; if one of these factors is missing, the model will inevitably fail. If any company wants to be maximise its efficiency, safety is one of the key factors necessary to achieve this goal.

— How are HSE functions divided between the management company and business units? How do they communicate with other departments?

— Aside from HSE, other departments, such as, Operations and HR, also hold responsibility for safety. That is why it is more appropriate to speak not of dividing responsibility but rather of pooling our intellectual and resource capacities to comply with safety requirements more efficiently. Of course, our department oversees this.

The management company defines its environmental priorities according to the information on environmental impact available across all Polyus companies. Furthermore, the management company provides methodological support to business units in terms of amendments to environmental law (in particular, support with transitioning to the best available technologies), while liaising with federal agencies to promote business needs when new legislation is drafted. This is achieved through dialogue with structures such as the Committee on Environment and Use of Natural Resources of the Russian Union of Industrialists and Entrepreneurs, working groups of the federal regulators (Rosprirodnadzor and Rospotrebnadzor) etc.

Our endeavors are supported by the Company’s management and Board of Directors, including its Independent Directors, who have a particular focus on HSE. We are highly appreciative of the support of William Champion, Chairman of the Operations Committee, who meets the managers of HSE departments twice a year in person for updates on plans and performance as well as to provide expert support and advice on possible initiatives and solutions.

— Polyus is the only Russian company to be a member of the International Council on Mining and Metals (ICMM). Is it difficult to hold leadership in the mining industry? What does ICMM membership offer the company?

— As an ICMM member, we aim to promote its ideas and values among Russian mining companies: We regularly hold open workshops and discuss practices in Russia as well as the experiences of ICMM member companies worldwide. We held a workshop on water stewardship in 2016 and a safety workshop in 2017, for oil & gas and mining companies. In 2019, a waste management workshop is to be arranged under the auspices of the St. Petersburg Mining University.

This encapsulates the role and mission of the leader. Personally, I am an advocate of ICMM principles: I firmly believe that employers should look after their employees as well as the local communities and protect the environment. The more companies comply with these principles, the better the quality of life in our country will be.

— As we have begun to address the issue of sustainable development, does the Company have an environmental strategy, and if so, what are its goals? Are any environmental campaigns being implemented or perhaps due to be implemented in the business units, and if so, which ones?

Our environmental strategy is to reach our waste targets for disposal by 2020 (with a focus on worn OTR tires, which account for a large part of bulky waste at our mine sites), reduce the per-unit consumption of fresh natural water by our operations, achieve full compliance with legal requirements for permits, and a decrease in per-unit greenhouse gas emissions.

In 2018, the Divide and Dispose campaign was carried out with the aim of separating waste collection for its subsequent disposal and neutralization in compliance with the revised domestic legal environmental requirements on waste management, which came into force on January 1, 2019. This campaign comprised arranging separate waste collection areas in all business units, the procurement and commissioning of incinerators to neutralize waste, signing new agreements with regional contractors for waste disposal and a number of other activities, which allowed for the improvement of waste management, thus making it safer and more efficient. In 2019, a water campaign is to be launched to solve environmental issues related to water use, aimed at reducing rated consumption of water from natural sources for operations in particular.

Indeed, sustainable development is a question of far more than environmental protection and safety. It also includes creating the so-called high-quality workplaces and a positive social environment. Unless a blue-collar worker has an advanced, mechanized or automated workplace and high-quality tools, and can have a good rest after his shift, we will never achieve a high level of efficiency and safety. There will be no yield.