SUSTAINABILITY OPENNESS RESPONSIBILITY Sustainability Report 2017 THE COMPANY STRATEGY AND GOVERNANCE CREATING VALUE SAFE PRODUCTION HUMAN CAPITAL CONTRIBUTIONLOCAL COMMUNITIESTO THE DEVELOPMENT
The new reality
The fourth industrial revolution that CHEMICAL INDUSTRY’S TRENDS: gave rise to the advent of Industry 4.0, has become one of the world’s most discussed topics of 2017. It is getting increasingly harder to ignore the fact that boundaries between the physical, the digital and the biological worlds are getting blurred with the spread AUTOMATION SENSORS of AI, Internet of things, self-driving AND ROBOTICS RECORDING PHYSICAL OPERATING vehicles, 3D printing, nanotechnologies, SOFTWARE AND HARDWARE PARAMETERS (OF MACHINES, biotechnologies, and quantum ROBOTS OPERATING ALONE THE ENVIRONMENT, ETC.) computers. Fundamental changes that OR INTERACTING WITH HUMANS AND TRANSMITTING DATA will inevitably transpire in the wake of the fourth industrial revolution are going to affect all areas of business and require that new forms and methods of operation 2 be put in place as business models undergo a radical transformation. IOT MOBILITY AND DEVICES Petrochemistry has traditionally relied CONNECTING SMART SENSORS, A COMBINATION OF NETWORKS, heavily on science and advanced DEVICES AND EQUIPMENT DEVICES, AND SOFTWARE ALLOWING technologies. That being so, new TO THE NETWORK TO STAY ONLINE AT ALL TIMES approaches and technologies will make it possible to transform all production, THE NEW REALITY NEW THE logistics, and business processes, and to reach new levels of efficiency. Transformations are going to affect not This new phase in technological and just processes but also work conditions economic development does not just at petrochemical facilities. Automation present new opportunities but is also and introduction of digital tools will fraught with new risks. Companies that help get rid of routine tasks and make are busy implementing state-of-the-art work more effective by freeing up time technologies will have to start looking for innovation, for breakthroughs and for solutions to such challenges as staff creative ideas and projects. This enabling downsizing due to process automation, environment will create real opportunities scarcity of relevant training programs at for self-development and for contributing universities and technical colleges, the to the Company’s development by showing need to retrain their personnel en masse, initiative and offering out-of-the-box and to invest in retrofitting their production solutions to emerging challenges. On the facilities, etc. flip side, employers’ expectations of their would-be employees are also changing Being one of the companies to have initiated quite drastically, including requirements full digitalization of their facilities and to have as to the content and level of their training, started implementing other elements of their mastery of not just professional skills Industry 4.0, SIBUR has already seen some but also of their soft skills. initial results. This Report makes an attempt to analyze these changes and to predict what outcomes the digital transformation and its results might bring to the Company and its stakeholders going forward.
SIBUR Sustainability Report 2017 www.sibur.ru/en THE COMPANY STRATEGY AND GOVERNANCE CREATING VALUE SAFE PRODUCTION HUMAN CAPITAL CONTRIBUTIONLOCAL COMMUNITIESTO THE DEVELOPMENT
BIG DATA AI (ARTIFICIAL INTELLIGENCE) EXTENDED ANALYTICS INTELLIGENT MACHINES ON BIG VOLUMES SUPPORTING DECISION MAKING OF STRUCTURED AND MAKING THEIR AND UNSTRUCTURED DATA OWN DECISIONS
3
IT/OT CONVERGENCE PLATFORM-SPECIFIC APPLICATIONS APPLYING INFORMATION A BROAD RANGE OF SOFTWARE TECHNOLOGIES (IT) PRODUCTS AND SERVICES IN OPERATIONAL CONTRIBUTING TO ADDED TECHNOLOGIES (OT) SECTORAL VALUE THE NEW REALITY NEW THE
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About this report
The following presentation is the 2017 only, and as such, they may be affected in our interactions with stakeholders Report on sustainable development by circumstances that are beyond the at SIBUR’s main production site of PJSC SIBUR Holding, its subsidiaries Company’s control with actual performance in Tobolsk is the Public Council comprised and affiliates. The purpose of the Report results turning out to be different from the of representatives of government agencies is to provide all interested parties with projected values. and supervisory bodies, citizens’ groups comprehensive and accurate information and religious organizations, mass media, in respect of SIBUR’s activities in the The content of the Report is reflective social services organizations, etc. area of sustainable development and of the topics and issues that the Company corporate social responsibility. and/or its stakeholders find to be of material Our engagements with non-governmental importance while taking into consideration organizations and charities in the cities This Report contains information our strategic priorities, provisions of the where the Company conducts its operations about the Company’s strategy, polices, Social Charter of the Russian Business, were carried out through the communication approaches to management, its the United Nations’ Sustainable Development channels of the charitable Formula for Good principal efforts in the areas of economic Goals, provisions of the UN Global Compact, Deeds program, via telephone and email, performance, environment and social CDP disclosure guidance, as well as the as the Company was performing a study development. It additionally showcases international social responsibility (ISO 26000) of the pressing social challenges that affect 4 our Company’s achievements in these and reporting (GRI) standards. the regions of its presence.2 areas and presents an assessment of SIBUR’s contribution to addressing In 2017, SIBUR’s primary focus was In the process of preparing this Report, essential issues existing in the regions on executing a major investment project an ad hoc survey was conducted of the of our presence. The Report was to build a world-class petrochemical Company’s stakeholders in the regions compiled giving appropriate consideration complex in Tobolsk, recruiting skilled of its presence: its partners in the Formula to the requirements of the core version workforce to fill new job vacancies, putting for Good Deeds program and regional mass of Sustainable Reporting Standards (GRI the company on a course toward digital media outlets. The interviewed identified SRS), and CDP’s1 disclosure guidance. transformation that will be affecting the and ranked in the order of priority those ABOUT THIS REPORT THIS ABOUT entire petrochemical industry going forward. aspects of the Company’s operations The scope of the Report covers the they found to be of material significance results of 2017 operations of PJSC A variety of communication channels were and in need of being included in this SIBUR Holding, its subsidiaries and used throughout the year to obtain feedback Report. The results of the survey are given affiliates with SIBUR’s stake of 50 from our stakeholders. The feedback from in respective sections of this Report.3 or more per cent (hereinafter jointly our employees was captured during internal referred to as SIBUR, and the Company), conferences, staff meetings, and at other The Report was published on SIBUR’s conducted within the Russian Federation. events. The other sources of feedback website in Russian and in English Output figures and financial performance included ad hoc surveys and polls, as well as and is available to all interested parties. numbers provided herein are reported the internal corporate hot line. in accordance with the Company’s management and financial reports. Our communications with external stakeholders were carried out in the course The 2019 and medium-term targets of face-to-face meetings, discussions, quoted in relevant sections of the Report and through co-participation in various are provided for projection purposes activities and events. A key instrument
For more information, visit our website: https://www.sibur.ru/en/ 1 https://www.cdp.net/en/guidance/guidance-for-companies. 2 Full list of members of the Public Council: http://tobolsk.formula-hd.ru/council/. 3 See pp. 27, 68, 83, 95, 114, 116, 118.
SIBUR Sustainability Report 2017 www.sibur.ru/en THE COMPANY STRATEGY AND GOVERNANCE CREATING VALUE SAFE PRODUCTION HUMAN CAPITAL CONTRIBUTIONLOCAL COMMUNITIESTO THE DEVELOPMENT
THE NEW REALITY 3 SAFE PRODUCTION 4.0 50 ANNEX 122 ABOUT THIS REPORT 4 Occupational health and safety 54 Annex 1. Glossary of Terms 122 STATEMENT BY PJSC SIBUR HOLDING’S 6 Environmental protection 66 Annex 2. The Matrix of Material Topics 123 THE COMPANY 9 Energy efficiency 80 Annex 3. Table of GRI disclosures 124 Economic development 9 (an Index of standard reporting elements) The Company’s structure of business 10 Contacts 128 Location of operations in 2017 12 HUMAN CAPITAL 86 2017 Performance Highlights 12 2017 targets vs. performance 88 Policy and management 91 Development of SIBUR’s Production 92 System in the year under review Performance management 93 STRATEGY AND GOVERNANCE 18 Improving productivity 94 5 Mission and strategy 20 P. 98 Interactions with stakeholders: 95 Corporate governance 22 key issues in 2017 Risk management 24 Workforce structure 96 Ethics and anti-corruption 27 Staff costs and the remuneration system 97 Supply chain and the way it will be 28 Measures of social support affected by the digital transformation 98 for the personnel
Corporate culture 29 REPORT THIS ABOUT Activities and results 100 Communications policy 30 Developing the employer brand 101 Stakeholder engagement 31 Training and development 102 P. 114 Building the talent pipeline 104 Trade union activities 105 Public recognition 106 2018 targets 107 CREATING VALUE 34 2017 targets vs. performance 36 Production sites’ performance CONTRIBUTION TO THE DEVELOPMENT and implementation of the 2017 37 108 investment program OF LOCAL COMMUNITIES International cooperation 40 2017 targets vs. performance 110 Innovations 41 Policy and management 111 The main foci of SIBUR’s R&D efforts Interactions with stakeholders: ?? 112 and 2017 results key issues in 2017 The policy of customer-centricity Activities and results 114 44 and its implementation in 2017 2017 results 119 Digitalization / digital transformation 46 Public recognition 120 2018 targets 49 Р. 119 2018 targets 121
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Statement by PJSC SIBUR Holding’s Chairman of the Management Board
2017 saw SIBUR continue solidifying Our sales of most petrochemical products to get to the mechanical availability phase its market positions both domestically have also demonstrated year-on-year by the second quarter of 2019. Throughout and globally. Owing to our strategic choice growth: sales of our own propylene grew the year, about 10,000 Russian construction of building a world-class integrated by 10.9% to 598 KT, sales of our own personnel contributed to the work on the petrochemical business, the Company has polyethylene grew by 12.6% to 268 KT, construction site with construction materials been successful in countering negative sales of elastomers grew by 9.7% to 485 KT. being supplied by 70 Russian contractors trends at play in the Russian and in the from Moscow, Yekaterinburg, Tobolsk, global economies and in ensuring that The volume of associated petroleum gas and other cities. A massive campaign was its operating and financial performance processed by SIBUR’s gas processing plants under way to fill already existing and active indicators are on the upswing. stood at 22.8 BCM, a 1.6% increase over vacancies at the Tobolsk production site 2016.Thanks to the expansion of the gas with skilled workforce in addition to getting fractionation capacity of the Tobolsk site, our 900 engineers and technicians ready the volume of natural gas liquids (NGL) for the launch of the new production facility. fractionation grew by 6.7% to reach 8.7 MT. As we continue shaping our company into a SIBUR’s integrated business model world-class business, we have our sights set 6 and our investments in developing new not only on demonstrating impressive financial production capacities have allowed performance but also on showing leadership us to counterbalance the changes in in the field of sustainable development and profitability of our business segments and social corporate responsibility. Our Company’s to support the 15.2 percent increase of our strategy takes into consideration the global annualized EBITDA to 160.9 bln rub, with agenda for this field, embodied by the United STATEMENT STATEMENT EBITDA profitability standing at 35.4%. Nations Sustainability Goals. The Company’s revenue grew 10.4 percent year-on-year to reach 454.6 bln rub. Our Company is a participant of an international initiative titled Responsible The launch of the Company’s digital Care. We also validate our compliance with transformation became one of the seminal the requirements of the REACH regulation moments of 2017. SIBUR is one of Russia’s adopted by the European Union to control first companies to get started on the path chemicals imported into EU countries. towards building Industry 4.0. Thanks In 2017, SIBUR joined the European Chemical to the introduction of advanced analytics, Industry Council (CEFIC). By virtue of processes digitalization, and equipment becoming a council member, SIBUR will be modernization, the Company would be able able to be a part of the efforts of 90 strategic to transform all of its production, logistics, groups focusing on matters of sustainable business, and other processes, and reach development, innovation, energy, and law as a new efficiency level. This is a grand- they pertain to the petrochemical industry. scale project that will have a noticeable effect on future development of the entire Our Company takes particular care petrochemical industry in Russia. to measure the social and environmental effects brought about by our activities In the course of the reporting year, while trying to create value for all our we continued making good progress stakeholders, all the way from our with the implementation of a large-scale shareholders and investors to residents investment project: the construction of our host regions, and to help address of ZapSibNeftekhim petrochemical complex. relevant issues of Russia’s socio-economic The Company succeeded in coming development. The fact that SIBUR’s policies up with optimal logistical and engineering and practices meet the most stringent solutions to the challenge of delivering Russian and international standards heavy petrochemical machinery to Tobolsk. has been on many occasions validated As of the end of 2017, the complex was 70% by auditors’ certifications and certified completed, which is consistent with the target by the Company’s foreign partners.
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Since the implementation of our energy saving technologies, we have been able to cut our energy costs by at least 5% while reducing our facilities’ environmental impact and improving their environmental safety. The overall size of the budget for our environmental programs in 2017 exceeded 1.4 bln rub. Our environmental impact index dropped from 4.4 to 3.9 points. Thanks to our consistent efforts to improve work safety, the number of machinery- related incidents dropped by 43% compared to 2016. In addition to training sessions on occupational health and safety, educational programs were set up for employees to develop their soft 7 skills, professional and management competences. More than 13,500 went through these programs during the year. We find these investments to be of strategic importance as they help solidify our long-term competitive advantages STATEMENT and improve SIBUR’s attractiveness to investors.
Our Company’s corporate governance system ensures that SIBUR’s shareholders’ rights and interests are properly protected while remaining cognizant of expectations and interests of a broader circle of stakeholders. Such matters as personnel policies, social investments, optimal use of all types to implement public interest projects. I thank all Company employees for their of resources, implementation of green 14 special inter-regional projects got contribution to our Company’s growth technologies, occupational safety, and implemented in partnership with leading and development. I would also like to express natural conservation, have always been operators in the areas of education, my sincere appreciation to our partners, an indispensable part of the agenda of the sport, and culture. To shore up our suppliers, customers, and shareholders Company’s Board of Directors and leadership. employees’ initiatives, we launched a for their trust and cooperation. We have set Management of nonfinancial risks has been corporate volunteering program that for ourselves ambitious goals for 2018 and incorporated into the Company’s overall risk has already attracted more than 1,000 I am confident that together we are going management system. participants. to succeed in getting the desired results.
Our engagements with regional partners are meant to help foster DMITRY KONOV sustainable development of local Chairman of the Management Board communities. This is done within the framework of Formula for Good Deeds, our corporate charitable program. In 2017, non-profits and social services organizations in the Company’s host cities were awarded 130 grants
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Economic development 9 The Company’s structure of business 10 Location of operations in 2017 12 2017 Performance Highlights 12
8 THE COMPANY THE
TheSIBUR SustainabilityCompany Report 2017 www.sibur.ru/en THE COMPANY STRATEGY AND GOVERNANCE CREATING VALUE SAFE PRODUCTION HUMAN CAPITAL LOCAL COMMUNITIES
9 THE COMPANY THE
The Companywww.sibur.ruwww.sibur.ru/en Sustainability Report 2017 SIBUR THE COMPANY STRATEGY AND GOVERNANCE CREATING VALUE SAFE PRODUCTION HUMAN CAPITAL LOCAL COMMUNITIES
The Company
SIBUR is Russia’s largest processor of associated petroleum gas and the nation’s leading petrochemical company. The Company conducts its operations in three highly profitable and diversified business segments: feedstock and energy, olefins and 22 PRODUCTION SITES 27,000 PEOPLE polyolefins, plastics, elastomers WHERE SIBUR PRODUCES A WIDE THE COMPANY’S and intermediates. RANGE OF PRODUCTS TOTAL HEADCOUNT
By combining best domestic industry practices with international business standards and personnel management practices, SIBUR offers the most efficient and environmentally sound solutions contributing to saving the 10 environment and improving living >1,400 LARGE CONSUMERS standards in the communities. SIBUR’s CLIENT PORTFOLIO IN ALL SECTORS As of December 31, 2017, SIBUR’s products were made at its 22 production sites. The Company’s client portfolio included over 1,400 large THE COMPANY THE consumers in the feedstock and energy sector, in the automotive industry, in construction, in the consumer goods sector, in the chemical and other industries in about 80 countries worldwide. The Company employs a total of more than 27 thousand people.
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Economic development
In 2017, the Company continued its strategic STRENGTHENING LONG-TERM MONETIZING UNIQUE ACCESS course towards improving the strength ACCESS TO RAW MATERIALS TO RAW MATERIALS of the Russian economy, reducing its Securing long-term access to raw Adding new processing capacities dependence on foreign producers and materials at attractive prices. Offering oil and completing the value chain to take suppliers, and transitioning to a processing- and gas companies an effective solution it to its logical conclusion while increasing based model of economy. The fact that the for processing by-products sales on domestic and export markets Company’s key assets are strategically positioned in Western Siberia, where most of Russia’s hydrocarbon reserves are concentrated, is a guarantee of an adequate supply of feedstocks and raw materials. Going forward, construction of ZapSibNeftekhim, the nation’s largest polyolefin production facility, will create opportunities for enhancing the Company's stability.
One of the factors that will be driving SIBUR’s 11 development in the near future is the advent of the fourth industrial revolution. In addition to securing access to affordable raw materials and large capacity markets, the key to being a successful petrochemical company is to have access to state-of- THE COMPANY THE the-art technologies. SIBUR has already gotten started on the path toward digital transformation.
UNLEASHING GROWTH POTENTIAL INCREASING OPERATIONAL Priorities IN THE DOMESTIC MARKET EFFECTIVENESS of the digital Actively ramping up production intended Ensuring stable business growth transformation include: for the domestic market, expanding the by minimizing risks, investing in personnel network of Russian partners and clients, training, ensuring robust development • Advanced analytics: collecting, processing and modeling massive participating in imports-substitution of presence regions arrays of data on various production programs overseen by the government processes.
• Digitalization of routine tasks and management processes: software and hardware for improving production efficiency.
• Industry 4.0: implementation of cyber-physical systems at the Company’s facilities.
SIBUR’s strategic objective is to integrate information technologies into all aspects of the Company’s activities.
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The Company’s structure of business
PJSC SIBUR
FEEDSTOCK AND ENERGY PETROCHEMISTRY BUSINESS SUPPORT SERVICES
• SIBUR Tobolsk LLC (100%) PLASTICS AND ORGANIC SYNTHESIS • JSC Siburenergomanagement (100%) (power) • JSC SiburTyumenGas (100%) PRODUCTS • SIBUR IT LLC (100%) (IT) • Yuzhno-Priobsky GPP LLC (50%), • JSC SIBUR-Neftekhim (100%) a JV with Gazprom neft group • JSC Sibur-Khimprom (100%) • SOIR LLC (50%) (a services entity) • JSC POLIEF (100%) • SIBUR TsOB LLC (100%) (a services center) • JSC Sibur-PET (100%) • NIOST LLC (100%) (R&D) • JSC NIPIgaspererabotka (50%) ELASTOMERS (engineering) 12 • JSC Voronezhsintezkauchuk (100%) • SIBUR International GmbH (100%) (exports) • JSC Krasnoyarsky zavod sinteticheskogo kauchuka (100%), • UK SIBUR-Portenergo LLC (100%) a part of a JV with Sinopec: (transportation) Sibur Sinopec Rubber Holding • JSC SIBUR Trans (100%) Company (74.99%) (transportation)
THE COMPANY THE • SIBUR Togliatti LLC (100%) • JSC Togliattisintez (100%) • Reliance Sibur Elastomers Private Limited, a JV with Reliance Industries Limited (25.10%)
OLEFINS AND POLYOLEFINS • Tomskneftekhim LLC (100%) • SIBUR-Kstovo LLC (100%) • Rusvinyl LLC (50%), a JV with SolVin • BIAXPLEN LLC (100%) • NPP Neftekhimia LLC (50%), a JV with Gazprom neft group • POLIOM LLC (25%), a JV with Gazprom neft group and GK Titan • ZapSibNeftekhim LLC (100%) • SIBUR Tobolsk LLC (100%)
INTERMEDIATES • SIBUR Togliatti LLC (100%) • SIBUR Tobolsk LLC (100%) • JSC POLIEF (100%) • JSC Sibur-Khimprom (100%)
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THE OLEFINS THE PLASTICS, ELASTOMERS, THE FEEDSTOCK AND POLYOLEFINS SEGMENT AND INTERMEDIATES SEGMENT AND ENERGY BUSINESS includes production and sale of polypropylene covers production of plastics and organic covers processing of associated petroleum gas 13 and polyethylene, BOPP films, as well synthesis products, elastomers, metyl-tert- (APG), transportation, fractionation and further as polypropylene and polyethylene involved butyl ether (MTBE), fuel components, as well processing of various kinds of crude in the production of petrochemical products as intermediate products that are primarily hydrocarbons either produced by the Company at SIBUR’s own facilities or intended for sale consumed by the Company’s own facilities. on its own or procured from Russia’s largest on foreign markets. oil and gas companies, marketing and sale PLASTICS:
of feedstock and energy products. COMPANY THE • 5 production facilities, including 3 plants
that are parts of joint ventures • 13 production facilities GAS PROCESSING: • Exports to 33 countries • Exports to 44 countries • The scale of the Company’s own APG • The Company’s polypropylene and • A capacity of around 1 MTPA to produce processing infrastructure is the largest polyethylene capacity exceeds 1 MTPA PET, glycols, spirits, expanded polystyrene, in Russia: 8 gas processing plants (GPPs), acrylates, BOPP films, and geosynthetics including a joint venture with Gazprom neft More than half of the output (58%) is consumed by manufacturers of fast moving • The average conversion rate is 96% which ELASTOMERS: consumer goods and packaging producers, is on a par with the world’s top performing about 12% are consumed by the construction • 3 production facilities companies industry, and another 10 % are taken • Exports to 53 countries • 5 compressor stations up by the chemical industry. This segment plays an important role in implementing • A 572 KTPA capacity to produce base • OUTPUT: NGLs — 5.4 MTPA, dry (natural) imports substitution programs. and specialty resins, and thermoplastic gas — 19.4 BCM elastomers GAS FRACTIONATION: INTERMEDIATES: • 2 largest gas fractionation plants • 3 steam crackers in Russia • OUTPUT: semi-finished intermediate • CAPACITY: NGLs — 8.55 MTPA products — 3.3 MTPA • 6 tank car loading racks • 90% of semi-finished products are • OUTPUT: LPG — 7.5 MTPA, naphtha — processed using SIBUR’s capacities 1.5 MTPA This segment’s products are consumed • MTBE: 503 KTPA by the chemical industry (22%), automotive industry (19%), construction industry (13%), This segment’s final consumers are producers of fast moving consumer goods petrochemical facilities (56%), utility companies (13%), etc. (36%), and intermediary companies (7%).
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Location of operations in 2017
Feedstock & energy business Petrochemical business
Infrastructural facilities Design engineering center, NIPIGAZ
Scientific centers Business support
Enterprizes under construction Loading racks
Investment projects under consideration Corporate resort
Ust-Luga 14
Tver Purovsk Zheleznodorozhny Nyagan THE COMPANY THE Muravlenko Gubkinsky MOSCOW Balakhna NIZHNY NOVGOROD Noyabrsk Kursk Vyngapurovsky Dzerzhinsk RUSSIA Kstovo Khanty-Mansiysk Voronezh Perm Pyt-yakh Nizhnevartovsk
Togliatti Blagoveshchensk TOBOLSK Novokuibyshevsk Tyumen
Krasnodar Svobodny Anapa Tomsk Omsk Krasnoyarsk
Istanbul
AUSTRIA TURKEY Beijing Qingdao INDIA Vienna CHINA Jamnagar Shanghai
Guangzhou
SIBUR Sustainability Report 2017 www.sibur.ru/en THE COMPANY STRATEGY AND GOVERNANCE CREATING VALUE SAFE PRODUCTION HUMAN CAPITAL LOCAL COMMUNITIES
Location of operations in 2017
Ust-Luga 15
Tver Purovsk Zheleznodorozhny Nyagan THE COMPANY THE Muravlenko Gubkinsky MOSCOW Balakhna NIZHNY NOVGOROD Noyabrsk Kursk Vyngapurovsky Dzerzhinsk RUSSIA Kstovo Khanty-Mansiysk Voronezh Perm Pyt-yakh Nizhnevartovsk
Togliatti Blagoveshchensk TOBOLSK Novokuibyshevsk Tyumen
Krasnodar Svobodny Anapa Tomsk Omsk Krasnoyarsk
Istanbul
AUSTRIA TURKEY Beijing Qingdao INDIA Vienna CHINA Jamnagar Shanghai
Guangzhou
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2017 Performance Highlights
Operating performance
+1.6%1 +1.5% +6.7%2 22.8 BCM 19.7 BCM 8.7 MT THE VOLUME OF THE VOLUME THE VOLUME PROCESSED ASSOCIATED OF NATURAL GAS OF NGL FRACTIONATION PETROLEUM GAS PRODUCTION
+4.5% +10.9% +9.7% 4.9 MT 598 KT 485 KT THE VOLUME THE VOLUME OF THE VOLUME 16 OF LPG PRODUCTION POLYPROPYLENE OF ELASTOMERS PRODUCTION PRODUCTION
Financial performance THE COMPANY THE +10.4% +15.2% +10.9% 454.6 BLN RUB 160.9 BLN RUB 152.7 BLN RUB REVENUE EBITDA OPERATING CASH FLOW
1 Inclusive of Gazprom neft’s share in the production/processing capacity of Yuzhno-Priobsky GPP commissioned in September 2015.
2 Includes processing contracts’ volumes.
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17 THE COMPANY THE
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Mission and strategy 20 Corporate governance 22 Risk management 24 Ethics and anti-corruption 27 Supply chain and the way it will be 28 affected by the digital transformation Corporate culture 29 Communications policy 30 Stakeholder engagement 31
18 STRATEGY AND GOVERNANCE AND STRATEGY Strategy
andSIBUR Sustainability governance Report 2017 www.sibur.ru/en THE COMPANY STRATEGY AND GOVERNANCE CREATING VALUE SAFE PRODUCTION HUMAN CAPITAL LOCAL COMMUNITIES
19 STRATEGY AND GOVERNANCE AND STRATEGY Strategy
and governancewww.sibur.ruwww.sibur.ru/en Sustainability Report 2017 SIBUR THE COMPANY STRATEGY AND GOVERNANCE CREATING VALUE SAFE PRODUCTION HUMAN CAPITAL LOCAL COMMUNITIES
Mission and strategy
OUR POSITION:
• By converting associated petroleum gas and other by-products of hydrocarbon extraction into materials that provide value to the society, we are making a sizeable contribution to preserving natural resources and maintaining the environmental equilibrium.
• Our investments help provide support for Russian economy’s transition from the resource-based model The principles of sustainable development aspects of sustainable development, to the processing one to enhance and social responsibility are the key and social and charitable activities. Some the country’s general stability and elements of SIBUR’s corporate culture. specifics of our approaches are additionally 20 competitiveness in the fast-changing When planning and executing our activities, recorded in such documents as the Code world. Through the application as well as evaluating our performance, of Corporate Ethics, Environmental Policy, of state-of-the-art technologies, we consider the economic, environmental Personnel Management Policy. we stimulate the development and social impact our actions could have of scientific and academic potential. while taking into account opinions of all When drafting these documents, the Company of our stakeholders with whom we maintain was following the principles and objectives • Goods made from our products create a constant dialogue. of the UN Sustainable Development Goals a new quality of life attainable by (SDG), UN Global Compact, requirements everyone. By using nature as the basis, The Company’s Memorandum of Corporate of the international (ISO 26000) standard, we are changing the world of things Social Responsibility and Charity is the the position expressed in the Social Charter that surround us while helping people Company’s internal corporate document that of the Russian Business, as well as the best in their desire to transform their lives. lays out our stance on the most important Russian and international practices. STRATEGY AND GOVERNANCE AND STRATEGY
UN SUSTAINABLE DEVELOPMENT GOALS
1 The full text of the Memorandum is available at: http://formula-hd.ru/o_konkurse.html.
SIBUR Sustainability Report 2017 www.sibur.ru/en THE COMPANY STRATEGY AND GOVERNANCE CREATING VALUE SAFE PRODUCTION HUMAN CAPITAL LOCAL COMMUNITIES
COMPANY’S GOALS
ECONOMIC DEVELOPMENT
• Improve financial performance
• Improve attractiveness to investors
• Contribute to the economic development of the country
ENVIRONMENT
• Minimize environmental impact 21 • Use resources in a sustainable way
• Combat climate change
• Help preserve biodiversity and restore wildlife populations
HUMAN CAPITAL DEVELOPMENT
• International health and safety standards GOVERNANCE AND STRATEGY
• Adequate pay and benefits
• Conditions for professional growth and development
CONTRIBUTION TO REGIONAL DEVELOPMENT
• Transition from the donor-recipient model to the equal partnership model
• Engage local residents in the implementation of public interest projects
• Improve stability of presence regions
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Corporate governance
SIBUR’s corporate governance system is designed to facilitate effective implementation of the Company’s sustainable development strategy, increase its competitiveness, and protect the rights and interests of shareholders. Oversight Commission GENERAL SHAREHOLDERS’ MEETING
22 Corporate Secretary BOARD OF DIRECTORS Audit Committee MARINA MEDVEDEVA
Committee on Human Resources and Remuneration
Investments and Strategy Committee LEONID MIKHELSON (Chairman) STRATEGY AND GOVERNANCE AND STRATEGY
Executive Body
MANAGEMENT BOARD Sole Executive Body
DMITRY KONOV (Chairman)
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THE COMPANY’S MAIN CORPORATE UNDER THE BOARD OF DIRECTORS, GOVERNANCE BODIES ARE: 1 THERE ARE THREE COMMITTEES:
• The General Shareholders’ Meeting • the Committee on Human Resources and Matters of sustainable development which is responsible for making decisions Remuneration responsible for personnel reviewed by the committees of PJSC on the most significant matters and for recruitment and motivation programs, SIBUR Holding’s Board of Directors electing the Board of Directors. 2017 for setting key performance indicators, in 2017 saw the Company hold one regular and for remuneration of the members (on April 27) and two extraordinary of governance bodies; The Committee on Human Resources and meetings in the form of absentee voting Remuneration under PJSC SIBUR’s Board (on January 24 and September 29). • the Investments and Strategy of Directors, which is made up of four The regular meeting approved a new, Committee responsible for strategic members of the Board of Directors, tenth version of the Statute on the General planning, asset management, discussed the following issues: Shareholders’ Meeting of PJSC SIBUR and transactions with securities; Holding. The two extraordinary meetings • results of the analysis of personnel discussed approval of a major transaction • the Audit Committee whose purview attrition from SIBUR LLC and from and the size of 2016 year-end dividends. includes matters of external audits, PJSC SIBUR Holding’s facilities; control, and risk management. In 2017, 23 • The Board of Directors which matters of sustainable development • factor analysis of the total personnel is responsible for providing strategic were reviewed by the Committees headcount and productivity leadership. The issues that fall under of PJSC SIBUR’s Board of Directors. improvement at PJSC SIBUR Holding; the purview of the Board include protection of the rights of shareholders, • The Oversight Commission that • implementation status of key approval of medium-term and short-term oversees preparation of financial 2017 tasks in the area of ensuring action plans, investment programs, and and accounting records, enhancement personnel continuity; the Company’s public accounts. In 2017, of management effectiveness, the Board’s membership was expanded. improvement of the internal control • results of monitoring social As per the decision of the General and risk management systems. sentiment at PJSC SIBUR Holding’s Shareholders’ Meeting, Ms. Wang Dan, facilities. STRATEGY AND GOVERNANCE AND STRATEGY Executive Vice-President of Silk Road Fund • The Company’s Collective Executive (PRC) that owns 10% of SIBUR’s shares, Body, its Management Board, vested The Investments and Strategy Committee was elected a Board member. Ms. Wang with the authority to perform direct under PJSC SIBUR Holding’s Board Dan became the first female ever to have management of the Company’s operations of Directors, that consists of six members been elected to the Company’s Board and to ensure that the decisions of the Board of Directors, reviewed a report of Directors. of the General Shareholders’ Meeting on the measures implemented in the field and the Board of Directors are complied of health, safety and environment. with. In 2017, the Management Board discussed the following matters The Audit Committee regularly meets of sustainable development: the Report to review technogenic risk mitigation on the Implementation of Organizational measures. Improvements Programs for 2017 with due regard for changes in social sentiment at PJSC SIBUR Holding’s The Company’s internal guidance documents facilities, and new personnel development that set the rules for corporate governance initiatives introduced by the Organizational are its Code of Corporate Governance, Development function. approved by the Board of Directors of the Bank of Russia on March 21, 2014, • The Sole Executive Body whose and the Code of Corporate Ethics, approved authority has been vested with the by PJSC SIBUR Holding's Board of Directors Management Organization SIBUR LLC. on December 16, 2014 (Revision 5)3.
1 For more details on the composition and activities of PJSC SIBUR Holing’s corporate governance bodies see the Company’s Annual Review at https://www.sibur.ru/upload/ pdf/SIBUR_AR_2017_RUS.pdf, pp. 80-103. 2 The document was published on the Company’s website: https://www.sibur.ru/about/corporate/documents/. 3 The documents are available on the Company’s website at: https://www.sibur.ru/about/corporate/documents/.
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Risk management
Risk management is one of the Company’s "One of the most effective tools and competences and expertise, nor do we fundamental principles of doing business. elements of risk culture when it comes have the right resources. This is a job for Official risk management guidelines are to detecting and evaluating risks in terms narrow specialists in their respective areas laid out in a document entitled “PJSC of completeness and quality is the cross- of expertise. But what we can and should SIBUR Holding’s Risk Management functional review. do is bring all necessary functions to the Policy” (Revision 4, approved by the Board table and organize a productive discussion of Directors on December 16, 2014)1. SIBUR encourages cross-functionality. of key threats and opportunities. To improve and optimize specific business Risk management practices are processes, task forces are purposely set We have been using this format for implemented along several streams up to include representatives of several the second straight year so we can conclude of activities: functions. During off-site sessions, that this approach is more effective than one- the function responsible for conducting on-one work with our top managers". • Creating a system for preventive risk the session is required to invite colleagues management through fostering a risk representing other functions. One of the management culture and facilitating topics that is dealt with at such cross- open discussions of potential risks. functional sessions is risk management 24 where we act as the moderator and • Engaging all employees in the process a consolidating force in detecting VLADIMIR of risk evaluation, detection, and and evaluating key risks. KREMENITSKY mitigation. This involves supporting Director, Internal Audit relevant employees’ initiatives, Being an internal audit unit, we cannot rewarding the best, establishing hope to detect all key risks completely, permanent channels for communicating reliably and with appropriate quality: time-sensitive information. for that, we lack the needed in-depth
• Improving risk detection, elimination, and prevention at all facilities of the Company. To hedge its operations from risks, the new technologies that are being STRATEGY AND GOVERNANCE AND STRATEGY the Company partners with major Russian introduced help improve work and process and foreign insurance companies to safety, reduce the time required to process implement risk insurance and reinsurance information and make decisions, suggest programs including property insurance, optimal algorithms of response to critical insurance of hazardous production facilities situations. and downtime insurance, voluntary third-party insurance, comprehensive On the other hand, the Company’s programs to insure the risks of our directors digitalization gives rise to new risks such and officers, shipments insurance, etc. as eventual workforce downsizing (primarily affecting blue-collar jobs), lack of staff SIBUR’s digital transformation has had having the needed expertise in the IT field, a profound effect on the way the Company increased size of investment in technologies manages its risks. On the one hand, and equipment.
1 The document is available on the Company’s website at: https://www.sibur.ru/about/corporate/documents/.
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RISK DESCRIPTION RISK MANAGEMENT
THE COMPANY’S MOST MATERIAL RISKS1 Risks related to operations: geopolitical, Risks related to investments: risk of failure Risks related to financial activities: regulatory, macroeconomic, feedstock, to reach investment goals. risk of long-term financial sustainability. logistical, technogenic, and other risks.
SUSTAINABLE DEVELOPMENT RISKS Human Resources-related Risks The measures to control these risks include:
The key risk factors are: 1. Conducting information campaigns in presence regions to improve SIBUR’s attractiveness as an employer, recruiting • Growing demand for staff at the ZapSibNeftekhim site 25 new staff, promoting the notion of relocation. and the associated issues of recruitment and subsequent relocation of needed professional staff from other cities. 2. Implementing projects and programs designed to bridge the gap between the level of students’ knowledge and skills • A gap between the level of graduates’ knowledge and skills and and the requirements of employing sites and facilities. the requirements the Company has for its prospective hires. This includes implementing joint programs with universities, • Waning motivation of current employees of the Company engaging foreign instructors and partner universities, setting resulting in underperformance of their KPIs. up laboratories and centers for technological innovation, etc.
• Attrition of skilled workforce from the Company’s host cities 3. Developing and implementing personal and professional due to less than adequate living standards. growth and development programs for current employees, ensuring that the levels of pay and benefits are competitive. One or several of these factors could lead to a decline in financial GOVERNANCE AND STRATEGY and operating performance or result in falling behind in the 4. Implementing the Formula for Good Deeds program striving implementation of investment programs. to improve the quality of living in the cities of the Company’s presence. This includes upgrading the cities’ infrastructures, conducting city-level events, providing support to athletic activities, etc.
For detailed information please refer to the following sections of the Report: Human Capital and Sustainable Development of Presence Regions.
Occupational Health and Safety-related (OHS) risks The measures to control these types of risks include:
The key risk factors are: 1. Implementing the most advanced approaches to OHS management, conducting risk evaluation and mitigation • natural phenomena and disasters that are beyond the Company’s on a regular basis, thoroughly investigating all accidents control; and incidents. • technical conditions of industrial sites; 2. Implementing a personnel training program, including daily • the human factor. safety briefings at the most hazardous facilities, motivating and rewarding teams that demonstrate the best OHS These risk factors, when at play, could potentially result in reduced performance. financial and operating performance, significant indemnity costs, or adversely affect the Company’s reputation and its relations with 3. Performing timely equipment upgrades and implementing stakeholders. organizational and technical measures to support safe operations at hazardous production facilities.
For detailed information please refer to the following section of the Report: Safe Production
1 The full list and a description of the most material risks, and the associated mitigation measures, are provided in the Annual Review (р. 104-107).
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RISK DESCRIPTION RISK MANAGEMENT
SUSTAINABLE DEVELOPMENT RISKS (continued)
Environmental risks The measures to control these types of risks include:
The key risk factors are: 1. Implementing the best management practices, including the Integrated management system and the Corporate • the technogenic factor associated with improper functioning environmental management system (CEMS). or malfunctioning of the equipment;
• the anthropogenic factor associated with voluntary 2. Following the most stringent international standards or involuntary damage to the environment. in the field of environmental protection.
As a consequence of one or several of these factors, the Company 3. Performing ongoing monitoring of the environmental situation 26 may incur a civil liability, be caused to bear additional expenses using mobile laboratories, among other things. Setting to repair the inflicted damage, and its reputation may suffer up sanitary protection zones around the facilities. as the result. 4. Education events for all employees at the sites. For detailed information please refer to the following section of the Report: Safe Production
STRATEGY AND GOVERNANCE AND STRATEGY RISKS CAUSED BY DIGITAL TRANSFORMATION
Human Resources-related Risks The measures to control these types of risks include:
The key risk factors are: • Changing the Company’s image to attract digital talent.
• deficit of needed staff within the Company; • Experience sharing, reference visits. • having to compete for the human resources with the established leaders in the digital world; • Outsourcing, using available personnel to train staff in the course of implementing current projects. • unparalleled scale of the project, new objectives, lack of similar experience on the Russian market; • Retraining of the Company’s current personnel to involve them in digital projects, and to improve their cross-functional • future downsizing. qualifications to deal with Reality 4.0
Technogenic risks The measures to control these types of risks include:
The key risk factors include the novelty of solutions under • Monitoring and evaluating best practices of foreign companies development, no similar precedents on the Russian market, in the area of digital transformation. likelihood that new hardware and software will not perform as expected. • Thorough testing of products and solutions under development.
• Using an iterative approach to introducing digital technologies and monitoring their performance to detect all potential technogenic risks and identify timely mitigation measures.
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Ethics and anti-corruption
SIBUR has implemented a policy of zero tolerance for corrupt practices and it thoroughly investigates all reports implicating its employees and counterparts in corrupt activities, seeking to build relations with partners who adhere to the highest ethical principles and standards. All of SIBUR’s contracts contain an anti- corruption clause and the Company expects its counterparts to assume similar legal obligations.
27 The main regulatory document for all facilities of the Company is the Federal 9% Anti-Corruption law on top of other laws OF THOSE POLLED and regulations that enforce measures IDENTIFIED ANTI-CORRUPTION AS THE TOPIC OF MATERIAL against corruption, laundering of illicit profits, SIGNIFICANCE1 and terrorism. Reports of unethical behavior, violations of fair competition standards, The Company’s internal documents that or corrupt practices implicating SIBUR’s require observance of all relevant ethical representatives can be sent to the and legal standards, its Declaration Unified Hot Line at compliance@sibur. of compliance with ethical and legal ru. The Company’s website has a special STRATEGY AND GOVERNANCE AND STRATEGY standards by the SIBUR Group and section called Compliance (at https:// its business partners and the Code www.sibur.ru/compliance/3) containing of Corporate Ethics, have been made all relevant corporate documents, available to the public2. videos, and a form to send anonymous reports about illegal practices.
1 According to the results of a survey of mass media representatives, beneficiaries, and partners in the regions. 2 Full texts of these documents are available on the Company’s website at: https://www.sibur.ru/about/corporate/ documents/. 3 More details regarding the measures to counter corruption, unethical behavior and unfair competition are given the Company’s Annual Review at p. 100-101: https://www.sibur.ru/upload/pdf/SIBUR_AR_2017_RUS.pdf.
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Supply chain and the way it will be affected by the digital transformation
Supply chain management covers two As part of the digital transformation Another planned activity under the project main areas: interactions with suppliers process, the Company has embarked is to set up a marshalling optimizer and contractors, and customer service. on a project to optimize its supply chain: at Denisovka freight rail station in Our Company seeks to develop its data from all logistics and supply chain Tobolsk. The idea is that the optimizer will relationships with all counterparts based management systems are currently being be suggesting the quickest route for the on the principles of equal partnership collected to create specialized analytical marshalling locomotives thereby reducing and mutual benefit. tools. This will initially be used to optimize the time rail cars spend being spotted for our transportation models paving the loading and cutting the marshalling cost. That said, the contractors and suppliers way for subsequent full digitalization of The project will allow us to reduce the have to follow strict standards in the field the shipment process including online rolling stock required for shipments, cut of occupational health and safety and comply shipments tracking, 100% electronic down the number of empty rail cars, save on with labor and environmental protection document management, setting up an railways fees due to shipment consolidation, laws. Violations of these requirements are online platform for interactions between optimize railcar maintenance logistics, and investigated together with local regulatory all parties to the process. reduce marshalling costs at rail stations authorities. when getting shipments ready. By making our interactions with suppliers, 28 contractors and customers 100% electronic- based, we will be able to ensure complete transparency of all processes. "Logistics 4.0 gives rise not just to new benefits for the Company but Digitalization of rail shipments comes also to new challenges. One of them as one of the stepping stones on the path is the convergence of customer service toward optimizing our logistical processes. standards from the consumer and the To achieve this goal, we started combining industrial sectors. Today’s consumers and processing, in a centralized fashion, have gotten used to very quick service: large arrays of data about the rolling in many cases it takes less than a day for stock that is used, location of rail cars, an item one buys online to get delivered initiated and completed shipments, etc. to the doorstep. Plus, the buyer can STRATEGY AND GOVERNANCE AND STRATEGY The results of the analysis will be used track the item being shipped from to build analytical tools that will provide the warehouse to the customer’s address suggestions on the proper organization in real time and from anywhere. This of shipments including the right choice is the standard industrial companies of rail cars for a given shipment, optimal will have to strive to adapt to". shipment size, estimating the time of delivery of loaded and empty rail cars. IGOR STULOV Senior supply chain manager
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Corporate culture
SIBUR’s corporate culture is underpinned by the continuing process of positive changes. It is the foundation of SIBUR’s Production System (SPS) which provides employees with simple and straightforward tools for improving their environment.
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SPS has been deployed at all Company The Company uses the following internal facilities. It includes: channels for communicating with the staff and for obtaining feedback: the corporate • visualized performance press, IndoorTV, radio, a corporate portal. management via special Many members of the staff are subscribed information boards; to the accounts of their facilities and of the Corporate Center in the social media. • a productivity improvement initiative; STRATEGY AND GOVERNANCE AND STRATEGY
• a processes simplification initiative; SINCE THE LAUNCH OF THE PROGRAM AND BY YEAR-END OF 2017, A TOTAL OF • cascading key performance indicators to all management levels; >250,000 SUGGESTIONS HAD BEEN SUBMITTED, • education activities; OUT OF WHICH • identifying and popularizing best > practices developed by individual 160,000 units and by the Company HAD BEEN FOUND ACCEPTABLE, as a whole; >150,000 IDEAS • incentivizing the staff to take HAD GOTTEN IMPLEMENTED. an active part in the changes through the Small-Step Improvement (SSI) Program.
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Communications policy
To communicate with external audiences, the Company makes use of its own For customers’ convenience, some of the most significant communication channels such as its topics for the Company are covered on dedicated online corporate website and production sites’ portals such as: websites, information letters, and public events, as well as of the public media channels.
The main principles guiding the Company’s communications policy with regard to covering SIBUR’s activities, are laid out in a document titled PJSC SIBUR Holding’s Communications Policy1. The Company strives to maintain an open, honest, and multilateral dialogue with all audiences. SIBUR’s websites have been translated into www.sibur.ru — SIBUR’s main site; http://investors.sibur.com/?sc_lang=ru-RU — 30 English and Chinese. a site for investors and analysts;
STRATEGY AND GOVERNANCE AND STRATEGY https://career.sibur.ru/ — www.formula-hd.ru — a site for job seekers, students, the site of the charitable Formula and interns; for Good Deeds program;
the Company’s accounts on social media: VKontakte, Facebook, Instagram.
1 The document is available at the Company’s website: https://www.sibur.ru/about/corporate/documents/.
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Stakeholder engagement
The principles underpinning the Company’s relations with its stakeholders are documented in PJSC SIBUR’s Code of Corporate Ethics, and in its Memorandum of Charity and Corporate Social Responsibility1.
Group Modes of Interaction Topics discussed in 2017
SHAREHOLDERS General Shareholders’ Meetings; Board • Building ZapSibNeftekhim. AND INVESTORS of Directors meetings; disclosure of operating performance results and financial statements; • Issuing Eurobonds. conference calls for investors, posting information on the website http://investors.sibur.com. • Electing a new member to the Board of Directors: Ms. Wang Dan. 31 • Approving the new version of the Statute on the General Shareholders’ Meeting.
• Discussing feasibility of implementing a major investment project: construction of Amursky Gas Processing Complex.
EMPLOYEES Corporate media: a web portal, newspapers, • Advancing the topic of customer-centricity. radio, IndoorTV; accounts of the Company, individual projects, and facilities on social • Starting digitalization. GOVERNANCE AND STRATEGY media; labor union activities; volunteering events; educational activities under the auspices • Launching a contest of employees' of Corporate University. volunteering projects.
• Developing new skills and competences required for Industry 4.0.
CUSTOMERS • Participation in various industry and topic- • Producing a new grade of polyethylene specific events, at Tomskneftekhim.
• holding own events such as the • Launching production of a phthalate-free Petrochemistry of the Future forum, polypropylene grade developed at the request of manufacturers of hygienic • bilateral meetings and negotiations; products (diapers), at Tomskneftekhim.
• client surveys; • Producing anti-fog BOPP films (at BIAXPLEN). • the SIBUR Klientam (SIBUR for its clients) magazine, • Introducing new tools, for example, optimization of logistical processes. • exchange of practices with other companies.
1 http://formula-hd.ru/o_konkurse.html.
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Group Modes of Interaction Topics discussed in 2017
BUSINESS PARTNERS • Bilateral and multilateral meetings; • Signing a joint (together with other major AND SUPPLIERS companies) agreement with the Government • participation in industry and topic-specific of Tatarstan. events; • Signing an agreement with RusHydro • holding own events; at SPIEF.
• polls; • Extending application of digitalization tools to specific processes. • monitoring legal compliance by partners and suppliers. • Monitoring of compliance with labor law by contractors involved in the ZapSibNeftekhim construction project.
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GOVERNMENT AGENCIES Socio-economic cooperation; participation • Signing a “road map” with the Government AND REGULATORS in various advisory and expert groups established of Tyumen Oblast. under the auspices of the legislative and
STRATEGY AND GOVERNANCE AND STRATEGY the executive branches of the government. • Cooperation agreement with the Government of Amurskaya Oblast
• Agreement with the Agency for Technological Development signed during the Eastern Economic Forum 2017.
• Participation in Tyumen Oil and Gas forum.
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Group Modes of Interaction Topics discussed in 2017
NON-PROFIT • Participation in various events; • Conducting contests of public-interest ORGANIZATIONS projects as part of the Formula for Good • involving NPO representatives Deeds program. in the activities of the Public Council at the Tobolsk production site; • Implementing important joint projects in presence regions. • inviting Company staff to do volunteer work for projects implemented by regional NPOs; • Official partner of ANO Dalnevostochniye Leopardy (Far Eastern Leopards). • holding a grant contest involving NPOs in 15 host cities.
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RESIDENTS OF THE CITIES • Implementation of the Open SIBUR program • Conducting contests of public-interest OF PRESENCE in Tobolsk; projects as part of the Formula for Good Deeds program.
• organizing large-scale public events for residents GOVERNANCE AND STRATEGY of the cities where the Company is present; • Implementing important joint projects in presence regions. • the Company’s website; • Official partner of ANO Dalnevostochniye • conducting open tours of the Company’s Leopardy (Far Eastern Leopards). productions sites; • Presenting SIBUR’s 2017 Sustainability • information campaigns to debunk and Report in the presence regions. disparage common myths and stereotypes about the role of chemistry in the evolution • Implementing 14 inter-regional projects of modern civilization; involving residents of host cities.
• participation of residents’ groups in the work • Launching a corporate volunteering of the Public Council of the Tobolsk program. Projects by SIBUR’s volunteers production site; in the cities.
• putting to public vote by Tobolsk’s residents • Ensuring compliance, by the Company’s projects of city-wide significance and facilities, with environmental rules scale as part of the grant contest under and standards the Formula for Good Deeds program.
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2017 targets vs. performance 36 Production sites’ performance and implementation 37 of the 2017 investment program International cooperation 40 Innovations 41 The policy of customer-centricity 44 and its implementation in 2017 Digitalization / digital transformation 46 2018 targets 49
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2017 targets vs. performance
INNOVATION
TARGET PERFORMANCE
Setting up the Technical Center On April 25, 2017, SIBUR and the Skolkovo Foundation signed for the Development and Use an agreement to set up a Technical Center for the Development of Polyolefins (TCDUP) in Moscow. and Use of Polyolefins (TCDUP) on the grounds The Center’s construction is expected of the Skolkovo Innovation Center. to be completed in 2018.
INVESTMENT PROGRAM 36 TARGET PERFORMANCE
Investing 200 bln rub (net of VAT) Retrofits and upgrades to production facilities proceeded according in retrofitting and upgrading production to schedule. The total amount of capital expenditures in 2017 stood facilities. at 135.2 bln rub. The underspending was caused by the FX rate fluctuations CREATING VALUE CREATING and by the deferment of some of the payments to 2018 due to specific document management requirements of some of the contractors.
DIGITALIZATION / DIGITAL TRANSFORMATION
TARGET PERFORMANCE
Completing digital innovation projects Completed the implementation of DataScience tools, launched in 2016. UAVs are being used for aerial monitoring, smart vision, VR features, etc.
Developing new initiatives for business Work is under way to develop an electronic document management system, process management, sales support, an e-trading platform, machine vision, AI, mobile M&R and RFID technologies, etc. remote production monitoring.
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Production sites’ performance and implementation of the 2017 investment program
2017 RESULTS (+/– VERSUS 2016 RESULTS)
Petrochemical business Description Feedstock and energy business Olefins and polyolefins Plastics, elastomers, and intermediates Revenue. RUB 184.2 bln (+7.9%) 88.1 bln (+1.5%) 146.9 bln (+12.4%) EBITDA 89.4 bln (+47.6%) 44.6 bln (–8.7%)* 30.4 bln (–3.6%)* EBITDA margin 39% 40% 20% * A slight decline in performance by the Company’s petrochemical assets was caused by the narrowing of ruble-denominated price ranges due to FX rate fluctuations.
THE COMPANY’S TOTAL CAPITAL DOTP is one of the key components to produce DOTP at the Perm site will largely EXPENDITURES of flooring and roofing materials, wallpaper, help to fill the gap for these and similar 145.7 cable plasticizers, and other materials used products so that exports could be started 135.2 in the construction industry. DOTP-containing to foreign markets where demand for DOTP products are more durable and freeze- is also growing actively. 37 resistant. On top of that, DOTP is a phthalate- 84.4 free plasticizer and, as such, is compliant As part of the project, a licensing agreement with the most stringent environmental was signed with Aekyung, a company from standards. The feedstocks for the DOTP Korea. NIPIGAS (a part of SIBUR), a leading production will be supplied by SIBUR itself, Russian center for facility design, supplies, thus constituting a yet another conversion logistics, engineering and construction 2015 2016 stage in the value chain. The deficit of management, was chosen as the general 2017 VALUE CREATING Capital expenditures, bln RUB base plasticizers on the domestic market contractor to conduct FEED and develop the in Russia is roughly equal to 60 KTPA. The detailed design. Construction, installation, lacking quantities are currently made up for testing and commissioning will be by supplies from Europe. SIBUR’s project performed by Russian contractors. 25 % OF THOSE POLLED IDENTIFIED THE COMPANY’S ECONOMIC PERFORMANCE AS THE TOPIC OF MATERIAL DRAWING RUSSIAN SUPPLIERS TO ZAPSIBNEFTEKHIM, SIGNIFICANCE1 THE COMPANY’S PRIORITY PROJECT
In April 2017, ZapSibNeftekhim signed instrumentation and control systems, On June 6, 2017, SIBUR’s site in Perm and fifty contracts with Russian businesses as well as pipe products. the government of Perm Krai concluded to supply construction materials for a special investment contract to build a new general-purpose plant buildings, as well Nine contracts were awarded to several plant to produce dioctyl terephthalate (DOTP), as for the polyethylene, polypropylene, Yekaterinburg-based companies, including a general-purpose plasticizer, with a capacity and pyrolysis units. The list of contractors TK Athena LLC, OJSC Uraltechgas, of 100 KTPA. includes companies from St. Petersburg, Polyplastic Ural LLC, UZMO LLC, JSC Perm, Ufa, Nizhegorodskaya Oblast, Uralchermet, etc., to supply polyethylene The signing ceremony was attended Rostov-on-Don, Stavropol Krai, Omsk, pipes for the construction site’s temporary by Mikhail Babich, Plenipotentiary Kirov, Tomsk, Volgograd Oblast, utility networks, screw pipes for the Representative of the President of the Chelyabinsk, Novosibirsk, Kaliningrad. construction contractors’ temporary camp, Russian Federation in Volga Federal District, as well as pipe products and light poles. Denis Manturov, Minister of Industry and 13 more contracts got signed with Trade, and Dmitry Konov, SIBUR’s Chairman businesses from Moscow and Moscow Tobolsk-based companies are also of the Management Board. The contract was Oblast. The list included JSC ZTZ, among the site’s suppliers. SSK LLC will signed by Maxim Reshetnikov, Perm Krai’s Impex-grupp LLC, Metallotsentr be supplying insulating glass units for head of administration, and Konstantin Lider-M, MTK LLC, Perviy Inzhener the construction camp, while JSC SSU-6 will Yugov, General Director of SIBUR’s Perm LLC, CTI LLC, etc. They will be be responsible for delivering several dozen site. It is expected that the plant will be put responsible for supplying equipment for thousand tons of sand for the pyrolysis plant. into service in 2019. 1 According to the results of a survey of mass media representatives, beneficiaries, and partners in the regions. www.sibur.ruwww.sibur.ru/en Sustainability Report 2017 SIBUR THE COMPANY STRATEGY AND GOVERNANCE CREATING VALUE SAFE PRODUCTION HUMAN CAPITAL LOCAL COMMUNITIES
August 2017 saw SIBUR complete the NIPIGAS, a leading Russian center textile, medical products and devices, retrofit of the Yuzhno-Balyksky Gas for facility design, supply, logistics and and other industries. Considering that Processing Plant (GPP). The retrofit construction management, was chosen the Russian TPA market is undersupplied, affected up to 30 percent of the plant’s as the general designer for the retrofit the retrofit of the Blagoveshchensk site production capacity and created an project. Construction and installation will help to substitute a significant share extra capacity to produce over 100 KTPA efforts were carried out by Russian of imports. The project is scheduled of additional natural gas liquids. The companies, with Neftmontazh LLC acting to be completed in 2019. Yuzhno-Balyksky GPP is one of SIBUR’s as the general contractor. Process largest gas processing plants. The plant equipment and materials were supplied Thanks to the completion of a state-of- has an annual APG (associated petroleum by such Russian companies as RAN the-art catalytic gas oxidizer and the gas) processing capacity of over 3 BCM, Komplekt LLC, Penzneftekhimmash retrofit of all gaseous emissions treatment thus preventing greenhouse gas emissions LLC, OJSC Kazankompressormash, NPO systems, the site’s atmospheric emissions
of some 10 MT of CO2 equivalent per year. Lenmashneftekhim, and IMS Industries are expected to drop by one half. The LLC. The level of the equipment’s and volume of industrial effluent from the As part of the comprehensive retrofit, materials’ localization supplied under TPA plant will be reduced by a factor six production units received upgrades, the project totaled 99%. of 1.5 owing to the transition to rotary 38 including a retrofit of the low-temperature pressure filters. In addition, the completed condensation and rectification unit December 2017 saw the launch upgrade will make it possible to prevent resulting in an increase of the unit’s of a retrofit of SIBUR’s terephthalic acid nearly all emissions of excess steam production capacity to 2.89 BCM per (TPA) production unit at the POLIEF resulting from the release of a lot of heat year, with the rate of recovery of target site in Blagoveshchensk to increase its generated in the process of TPA synthesis. components from the APG rising to 98 annual capacity to 350 KTPA. Once fully After the refurbishment is done, the steam percent, which is consistent with the implemented, the retrofit project will will be recycled back into the process practices of the world’s best. In addition, help improve the plant’s efficiency as well after being cooled by special cooling units, CREATING VALUE CREATING the project included building and putting as its environmental safety. TPA is used contributing to a major improvement in the into service five new process units, to produce polyethylene terephthalate site’s energy efficiency. including an adsorption gas dehydration (PET), a basic material to produce polymer unit with an annual capacity of 2 BCM and packaging for mineral water, dairy a booster compression station with the products, juices, sunflower oil, as well annual capacity of 1.5 BCM. as a primary ingredient in products of the
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"The investment project at the OPTIMIZING POLYMER LOGISTICS Blagoveshchensk site is intended to help meet the growing demand coming from On June 2, 2017, on the sidelines This will help improve the efficiency the food industry. It will also become of the St. Petersburg International of logistics compared to the more a yet another important step towards Economic Forum, Anatoly Artamonov, conventional transportation method implementing the strategy of upgrading Governor of Kaluga Oblast, Alexey using pallets allowing to move more our production sites to make them Kozlov, SIBUR's Managing Director, cargo and save on packaging when as energy efficient and environmentally Horst Schmidt, CEO of Karl Schmidt delivering to customers. friendly as possible". Spedition GmbH & Co. KG (KSS), and Nikolay Kruchinin, CEO of Freight Village Polymer products from SIBUR will Kaluga (Freight Village RU), signed take up 500 KTPA’s worth of the DMITRY KONOV an agreement to develop a new polymer hub capacity. The hub’s designed SIBUR’s Chairman processing cluster in Kaluga Oblast. capacity is 670 KTPA with a potential of the Management Board for subsequent expansion going Under the agreement, KSS will to set forward. The hub’s container yard up a logistics hub at the Freight Village that fits 1,300 40-foot containers and Vorsino to provide logistical support for the upgraded warehousing complex 39 shipments of SIBUR's polymer products, are capable of accommodating 40 KT including those to be delivered from of polymers to ensure their timely ZapSibNeftekhim, Russia's largest delivery to customers. petrochemical facility currently under construction in Tobolsk. POLYMER PRODUCTS FROM SIBUR WILL TAKE UP Products from SIBUR’s sites will be CREATING VALUE CREATING shipped using dry bulk containers, 500 KTPA’S a unique shipping method for Russia. WORTH OF THE HUB CAPACITY
THE YUZHNO-BALYKSKY GPP IS ONE OF SIBUR’S LARGEST GAS PROCESSING PLANTS. THE PLANT HAS AN ANNUAL APG (ASSOCIATED PETROLEUM GAS) PROCESSING CAPACITY OF
>3 BCM
DECEMBER 2017 SAW THE LAUNCH OF A RETROFIT OF SIBUR’S TEREPHTHALIC ACID (TPA) PRODUCTION UNIT AT THE POLIEF SITE IN BLAGOVESHCHENSK TO INCREASE ITS ANNUAL CAPACITY TO
350 KTPA
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International cooperation
"Through its membership in CEFIC, SIBUR will be able to maintain an even closer cooperation with European representatives of the industry concentrating on expertise development in the regulatory field, sharing experience in implementing large-scale investment projects, and advancing new products. This will help us strengthen the Company’s positions on the Russian and European markets".
ALEXEY KOZLOV Member of the Management Committee — 40 SIBUR’s Managing Director SAUDI ARABIA: On October 5, 2017, EUROPE: On October 27, 2017, SIBUR joined SIBUR, the Russian Direct Investment Fund the ranks of the European Chemical Industry (RDFI), and Saudi Arabian Oil Company Council (CEFIC). The vote to accept new (Saudi Aramco) signed a memorandum Council members and partners took part of understanding concerning possible during CEFIC’s General Assembly. In addition, cooperation in the area of petrochemistry SIBUR became a member of the European CREATING VALUE CREATING and petrochemicals marketing in the Russian Ethylene Producers Committee (EEPC, Federation and in Saudi Arabia. According a part of CEFIC), and, for the first time, took to the MOU, the companies will evaluate part in a members seminar held in Dresden the potential of the petrochemical markets on October 25-27. in the Russian Federation and in Saudi Arabia and will explore opportunities for future The membership in the Council will cooperation. enable SIBUR to participate in the activities of 93 sectoral groups focusing By partnering with one of Saudi Arabia’s on more than 120 petrochemical products, largest petrochemical companies, SIBUR as well as 90 strategic groups working will be able to expand its competencies, on issues of sustainable development, reach out to new sales markets, and further innovation, trade, energy, and law in the explore the promising Middle East market petrochemical sector. the Company is fairly new to. By sharing their combined expertise in implementing large- scale projects and in entering new markets, the two companies will be able to further consolidate their market leadership.
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Innovations
It is expected that going forward we will see in Perm, Krasnoyarsk, and Togliatti, to form the direct dialogue between the Company’s a single Block. The Company’s research R&D Block and its current customers get centers and facilities’ R&D arms currently SIBUR has been paying particular stronger, new segments of base products employ over 350 staff. attention to implementing innovations explored, the search for new specialty in several areas: chemicals continued. This is the reason SIBUR is actively patenting its intellectual why we ran, in 2017, a study of chemical property both in Russia, and abroad. As • management innovations: industry’s potential to serve seven of December 31, 2017, PJSC SIBUR Holding implementing new methods that industries: machine and instrumentation had 188 patents and invention claims will help grow business and manage building, energy, transport, agriculture, registered in its name. Of those, 24 patents it more effectively; food processing and packaging, medicine and 68 claims have been registered with and pharmaceutics, construction and light patent offices abroad, including offices • adaptive innovations: implementing industry, resulting in 198 innovative ideas in the US, Western Europe, Japan, Republic advanced technologies introduced some of which are being explored further of Korea, China, India, member countries by others; at the time of this writing. of the Eurasian Economic Union, Middle East, etc. The scope of patentable IP is aligned with • own innovation: implementing Development of SIBUR’s own proprietary SIBUR’s R&D priorities and covers processes 41 products and technologies developed technologies, from the initial R&D and technologies that are used to produce within the Company. work and all the way to full operational polyethylene and polypropylene, and PE- implementation, is performed at the and PP-based compositions, methods for research centers in Tomsk (NIOST LLC) and producing synthetic rubbers, thermoplastic in Voronezh (the Elastomery R&D center). elastomers, plasticizers, as well as monomers SIBUR is actively pursuing efforts to In 2017, they were joined by research facilities and process catalysts. formulate its R&D Development Strategy CREATING VALUE CREATING named SIBUR-2030, that would draw upon international trends, global changes, and the Company’s development strategy. One of the strategic goals is to get integrated into the global research and business communities.
SIBUR’s trade marks in jurisdictions of SIBUR’s presence are registered both under the Madrid trademark registration system and according to relevant national procedures. They currently enjoy protection in more than 100 countries worldwide. To expand the extent of protection for its brand, SIBUR obtained, in 2017, the status of a well-known mark for two of its trademarks in Russia that have historically been a part of SIBUR’s heritage, resulting in two entries being made in the Register of well-known trademarks of the Russian Federation, under numbers 189 and 190, respectively.
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THE MAIN FOCI OF SIBUR’S R&D EFFORTS AND 2017 RESULTS:
ADVANCING TECHNOLOGIES FOR DEVELOPING NEW PRODUCTS AND SEARCHING FOR ALTERNATIVE WAYS OF OBTAINING MATERIALS AND SUBSTANCES • Developers at NIOST created a “green” additive for polymer production. Several batches of the additive underwent testing at the test reactor at one of the holding’s sites.
• An “eco-friendly” reagent for the food processing industry has been developed. This will make it possible to produce food products with near-zero level concentrations of substances that could potentially be carcinogenic for humans. The process for producing this eco-friendly reagent is currently undergoing final pilot testing.
42 EXPANDING THE RANGE OF POLYOLEFIN GRADES • Launch of an effort to develop new grades of BOPP films for BIAXPLEN facilities.
• Introduction of three specimens of phthalate-free catalysts to be used for producing pipe- grade PPR003 EX polypropylene at Tomskneftekhim LLC, BOPP films, and non-woven materials at SIBUR Tobolsk LLC.
• Start of a construction of the Technical Center for the Development and Use of Polyolefins CREATING VALUE CREATING (TCDUP), expected to add new grades of polyethylene and propylene to the Company’s product portfolio.
DEVELOPMENT OF PLASTICS AND ELASTOMERS • Successful homologation, by two world-class companies, of new grades of resins (DSSK-3) developed at the Voronezh Elastomery Research Center, and a successful trial production run using our own-made catalyst (neodymium versatite).
• Development of several grades of thermoplastic elastomers with improved mechanical stability. They are processable at high temperatures without quality degradation in finished goods (shoe soles, cable insulation, interior car trim items).
• Start of a research on expanded polystyrene and PET.
DEVELOPMENT OF PLASTICS AND ELASTOMERS PROJECTS TO OPTIMIZE TECHNOLOGICAL PROCESSES AT PRODUCTION SITES
IMPLEMENTATION OF
>10 INNOVATIONS AT VARIOUS PRODUCTION FACILITIES. FOLLOWING A SURVEY OF FIVE OF THE SITES, 30 PROJECTS HAVE BEEN IDENTIFIED AS PROMISING (OVER THE LAST THREE YEARS, R&D EXPERTS HAVE SURVEYED A TOTAL OF12 OF THE COMPANY’S SITES).
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2017 saw the founding, on the basis of NIOST’s SIBUR’S PARTICIPATION IN SPECIALIZED EVENTS AND INDUSTRY ACTIVITIES Testing Laboratory Center, of an attestation center for evaluating feedstocks and materials On April 6 and 7, St. Petersburg hosted On September 6, 2017, as part of the from various producers and suppliers the 6th Cross-Sectoral Conference: Eastern Economic Forum, SIBUR signed who supply to any and all of SIBUR’s sites. Bitumen and PMA. Pressing matters a cooperation agreement with the Agency Thanks to this center’s dialogue with the for 2017. The Conference was organized of Technological Development (ANO ATD). other facilities and sites within the Company, by Gazprom neft in partnership with Under the agreement, ANO ATD will be SIBUR is well positioned to minimize the risk SIBUR Holding and with support from assisting SIBUR in the implementation of procuring substandard products, expand the Federal Road Agency (Rosavtodor) of petrochemical projects with the its list of suppliers, and optimize the price and a state company Russian Highways objective of building new production of feedstocks it buys. In 2017, the center tested (Avtodor). The conference’s participants capacities in Russia and displacing, to the 38 samples of feedstocks procured by the discussed the most pressing issues extent possible, imported products from Company. in road construction: latest changes the domestic market. The agreement’s list and amendments of the Customs Union’s of priorities includes developing a range On an annual basis, the staff of the regulatory framework, international and of products using maleic anhydride (MAH) Company’s research facilities participate domestic experience in using bitumen that will be produced at SIBUR’s Tobolsk in various trade fairs and conferences: and PMA, implementation of innovations (Tyumen Oblast) production site, and 43 AСHEMA, K-SHOW, KOREA CHEM, in the road industry, measures to meet expanding the use of enhanced oil recovery CHINAPLAS, Polyolefin Additives, contemporary requirements for mean technologies during oil production. Chemistry Means Business, OIL AND GAS time between repairs of the road surface ASIA, Russian Oil, Gas and Chemistry that is on a par with state-of-the-art On November 5-22, 2017, Manezh Central Forum, NEFTEGAS, Polymers, Analytica standards. Exhibition Hall hosted a federal exhibition Expo, etc. One of the new trends started titled Russia Focused on the Future. The in 2017 was to invite guest lecturers from In May 2017, SIBUR took part in exhibition featured an installation exhibit CREATING VALUE CREATING leading universities of the world to NIOST. Chinaplas (Guangzhou, China), Asia’s showcasing a KAMAZ rally truck. The The Center was visited by professors from largest petrochemical exhibition. At the exhibit was created by SIBUR together universities in Spain, UK, Germany, and trade fair, the Company exhibited its with the organizers of the international Poland. broad range of elastomers including Silk Road rally to demonstrate the use those that are already being supplied of synthetic materials in the automotive An important area of innovation is the search to China’s market: butadiene styrene industry. Participants were invited to take for and support of talented researchers, and polybutadiene resins, thermoplastic part in an interactive Plastics: Myths and students, inventors, and entrepreneurs. elastomers, as well as SSBR and BR Truths quiz. They could also learn about It was with this realization that the Company resin grades developed specially for the the list of future jobs in the petrochemical started, in 2010, an open contest of production of “green” tires in accordance sector and tap into virtual reality to innovation projects in the field of chemistry with EU standards. observe the progress in the construction and new materials, under the name of the ZapSibNeftekhim complex. of IQ-CHem. In 2017, more than 250 teams from 27 countries took part in the contest. The greatest number of applications were submitted by teams from Russia, India, Canada, the Netherlands, and USA.
38 SAMPLES OF FEEDSTOCKS PROCURED BY THE COMPANY GOT TESTED BY THE CENTER
>250 TEAMS IN 2017, FROM 27 COUNTRIES TOOK PART IN IQ-CHEM
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The policy of customer-centricity and its implementation in 2017
Fostering a customer-centric culture is an integral part of SIBUR’s policy for improving customer loyalty and business profitability. The Company’s corporate information resources contain materials for its employees with a description of the customer-centric approach and recommendations regarding its application in their interactions with both external clients, and customers within the Company when dealing with other in-company entities.
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In order to enhance customer-centricity, • Four internal customer-centricity events employees are regularly invited to take part in were held, one of them a corporate- client-centricity themed breakfasts. Customer wide event attended by 250 members satisfaction surveys are made publicly available. of the staff. The Company’s corporate media outlets have a special section titled “On Course to Client- • A webinar on customer centricity CREATING VALUE CREATING centricity”, to publish relevant materials on was conducted with SiburTyumenGas the topic and to run contests on customer- and Tomskneftekhim sites, attended centricity among employees. by a total of more than 50 participants.
The Company’s clients are annually • The second customer-centricity polled about their satisfaction with the contest took place with nearly 150 staff Company’s products and services. A forum in attendance representing 22 units for customers is held on an annual basis. from all of SIBUR’s sites. They had 165 On top of that, the corporate website has stories to share. 16,000 employees a page titled “To our clients” plus the (5 times the number on the previous Company publishes a magazine titled Sibur occasion) took part in the evaluation Klientam (SIBUR to its clients). of the stories.
The primary objective of the 2017 • New functions were added to the CRM customer-centricity plan was the system: automated analytics on manager- implementation of the Client Experience client interactions, expedited collection Management Program approved in 2016. of up-to-date information to prepare for The Program contains a list of customer meetings, reminders about dates that are loyalty activities, both internal to the important to the customers, improved Company, and external. By the year-end on-line processing of customers’ orders, of 2017, all activities scheduled under the improved system design and enhanced Program, were successfully implemented security. with results presented at the corporate- wide customer-centricity breakfast held • A competence model and a set at the end of December 2017: of customer loyalty KPIs were developed for the Marketing and Sales function, • The second iteration of the customer as well as for other related functions. satisfaction survey was conducted followed by producing a plan of in-house improvements.
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As part of the annual customer satisfaction is to use it as a single platform to bring DEVELOPMENT OF A COMPETENCE survey, all active buyers of SIBUR’s products together the Company and its customers to MODEL FOR THE MARKETING are invited to take part in a comprehensive discuss pressing matters that are relevant AND SALES FUNCTION survey that focuses on several sets of criteria to the development of the petrochemical specific to each product group. These criteria industry, the customers’ needs, and As part of the effort to develop the include the most critical areas of engagement: SIBUR's initiatives that seek to improve model of competences, five marketing the product offer, quality, the team, technical customer-centricity. and sales staff profiles were identified services, logistics, the commercial offer, and developed. 105 employees went document management, etc. The survey Dmitry Konov, Chairman of SIBUR’s through an assessment with a total is conducted either using an online form, Management Board, addressed the forum number of tests conducted under various or via telephone by a third-party contractor, with a keynote presentation centering on the models (personality traits, professional with consideration to the customers’ desire megatrends affecting the petrochemical competences, professional knowledge) to maintain their anonymity. industry and the Company's business exceeding 400. Following the assessment outlook. Herman Gref, CEO and Chairman of employees’ conformity with a particular Following the second wave of the study, of the Executive Board of Sberbank, was competence model, participants were working sessions were conducted within invited as a guest speaker. He spoke about broken up into teams based on their level each of the business lines to produce what leading companies focus their attention with training programs developed for 45 a cross-functional plan of activities on and what are the key success drivers that priority development areas. to address customers’ concerns. Among support sustainable business growth in this other things, the plan included initiatives rapidly changing world. New technologies, to improve product quality, expand the such as Big Data and machine learning product range, expedite processing of make it imperative that companies transform requests, improve the commercial offer, and their traditional business models resulting perform personnel training. Implementation in 40 of leading companies being supplanted CREATING VALUE CREATING of the plan is monitored on a quarterly basis. by new players. Only customer-focused companies are capable of adapting to the On April 20, 2017, Moscow hosted SIBUR's evolving customers’ needs by becoming more first clients’ forum, The Forum of the Future. technology-savvy. The forum was attended by over 190 major customers of SIBUR, hailing from Russia, On top of that, SIBUR’s representatives >400 CIS, Austria, Germany, India, China, and addressed the customers’ questions about A TOTAL NUMBER OF TESTS CONDUCTED other countries. Also in attendance were pricing of certain products, the Company’s UNDER VARIOUS MODELS SIBUR's leaders and the Company's product sales targets and investment plans. managers. The forum's stated objective
FOUR INTERNAL CUSTOMER-CENTRICITY A WEBINAR ON CUSTOMER CENTRICITY EVENTS WERE HELD, ONE OF THEM WAS CONDUCTED WITH SIBURTYUMENGAS A CORPORATE-WIDE EVENT ATTENDED BY AND TOMSKNEFTEKHIM SITES, ATTENDED BY A TOTAL OF 250 MEMBERS OF THE STAFF >50 PARTICIPANTS
THE SECOND CUSTOMER-CENTRICITY CONTEST TOOK PLACE WITH NEARLY
150 STAFF IN ATTENDANCE REPRESENTING 22 UNITS FROM ALL OF SIBUR’S SITES
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Digitalization / digital transformation
SIBUR is one of Russian companies that is DIGITAL TRENDS OF THE CHEMICAL INDUSTRY making a full-scale transition to Industry 4.0. The Company’s facilities are among the best equipped and most technologically advanced in Russia. In 2017, the level of automation of core production assets reached 84% which helped lower our production cost. In addition, SIBUR has been implementing replicating AUTOMATION IT/OT CONVERGENCE such digital solutions as advanced process AND ROBOTICS control (APC), a manufacturing execution APPLYING INFORMATION system (MES), a laboratory information SOFTWARE AND HARDWARE TECHNOLOGIES (IT) ROBOTS OPERATING ALONE IN OPERATIONAL TECHNOLOGIES (OT) management system (LIMS), an enterprise OR INTERACTING WITH HUMANS management system SAP ERP, and a business process management system (BPMS).
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SENSORS MOBILITY AND DEVICES RECORDING PHYSICAL OPERATING A COMBINATION OF NETWORKS, PARAMETERS (OF MACHINES, DEVICES, AND SOFTWARE ALLOWING THE ENVIRONMENT, ETC.) TO STAY ONLINE AT ALL TIMES AND TRANSMITTING DATA CREATING VALUE CREATING
BIG DATA AND IT/OT CONVERGENCE AI (ARTIFICIAL INTELLIGENCE) APPLYING INFORMATION MAKING DECISIONS TECHNOLOGIES (IT) BASED ON BIG DATA IN OPERATIONAL TECHNOLOGIES (OT)
PLATFORM-SPECIFIC APPLICATIONS A BROAD RANGE OF SOFTWARE PRODUCTS AND SERVICES CONTRIBUTING TO ADDED SECTORAL VALUE
Source: The Digital Transformation Initiative World Economic Forum 2017
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SIBUR’s objective for 2017 was to lay the AI technologies have been used for face to explore the equipment from the groundwork for digital transformation. recognition at the entrance to one the inside without having to wait for the To that end, the Company launched in excess buildings of SIBUR’s Corporate Center equipment to be stopped for shutdown of ten different projects in the big data field in Moscow, obviating the need for security maintenance. Thanks to the simulated including online robo-advisors and predictive badges. A smart surveillance system deployed maintenance drills, the time it takes equipment maintenance for its production at the Togliatti site monitors the conveyor to disassemble the cylinder block will facilities. Algorithms are capable of line with the finished products watching for be reduced by about 10 percent. explaining and predicting things a human build-up and alerting personnel accordingly. mind cannot. As an example, a propane 2017 saw the introduction of wearable dehydrogenation plant at the Tobolsk site Voronezh is ready to commission its devices that monitor the whereabouts makes use of an advisory tool that predicts mobile M&R (maintenance and repairs) and physical wellbeing of the staff, and the unit’s output taking into account gradual system. All necessary maintenance and the testing of UAVs for aerial monitoring clogging of the heat-exchange equipment, walkabout information, such as equipment of production facilities and product and suggests optimal process parameters. specifications and task lists, will be stored pipelines. For the first time, 3D printing on the employees’ mobile devices and read was used to make equipment parts. An advisor deployed at the emulsion resin off the plant equipment. This allows to plan Being able to produce spare parts of this plant in Voronezh provides recommendations the work in an optimal way and task the staff kind on a regular basis will primarily 47 regarding the optimal ratio of steam and accordingly, and to record the best results affect logistical chains: there will water in degassing towers to achieve the for operational and maintenance tasks. no longer be a need for long-distance required latex quality. The underlying shipments, everything could be made mathematical model uses machine learning The Tomsk site uses a VR simulator quickly and on-site. to allow for gradual equipment wear and for maintaining compressors at deterioration of its characteristics. its polyethylene plant allowing CREATING VALUE CREATING
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Under its 2018 work plan, SIBUR has • increasing the output of BOPP-film • A pilot project to use augmented reality for identified the following three areas of, production lines by using an analytical equipment maintenance (this technology and specific methods to bring about, model to determine the factors that will make it possible to get experts and digital transformation. contribute to film breakage; maintenance personnel engaged in maintenance, testing and commissioning 1. Advanced analytics. Large arrays • digital-based rail transport operations in real time). This will help reduce of data about plants’ operating logistics: analytical tools will provide maintenance time, equipment downtime, parameters, energy consumption, recommendations for proper shipping eliminate mistakes. maintenance frequencies and durations, arrangements including choosing the will be used to build analytical right type of rail cars for the shipment models providing insights on causes at hand, estimating the time of arrival "By leveraging new technologies and for malfunction, repair duration, of loaded and empty cars, etc. smart handling of big data, we intend to or the need for preventive maintenance. transform all of our production, logistics, 2. Processes’ digitalization. The primary focus business, and many other processes, Pilot activities included the following: is on automating routine processes and paper and reach a new level of automation. This and electronic document management to free transformation will affect how SIBUR’s 48 • predictive maintenance of the up employees’ time to deal with intelligence- employees go about their jobs. Automation polypropylene plant’s extruder: intensive tasks. Pilot projects: and digital tools will take over routine tasks identifying root causes for unscheduled helping to make their work more effective equipment shutdowns and minimizing • mobile walkabouts — an employee’s mobile while freeing up more time for innovation their occurrence; app will contain information about the task and for implementing breakthrough at hand, equipment involved, a work map, initiatives and projects". • an advisor tool for profitability and data from the previous shift; optimization at the butadiene production VASSILY NOMOKONOV CREATING VALUE CREATING unit — the model will help select • digital job order — an app generating Member of the the optimal and economical process job orders will help reduce severalfold Management Board — parameters and maximize profitability the time for producing one from 2 days Sibur’s Executive Director in real time; to 15 minutes.
• Econs, a real-time production efficiency 3. Industry 4.0. Upgrading equipment, testing management tool to visualize the impact new solutions, and implementing those of process parameters on the facility’s of them that have proven their effectiveness profitability; in the petrochemical industry.
SIBUR’S KEY DIGITAL INITIATIVES
IMPLEMENTED: PENDING OR UNDERGOING TEST:
↗↗Digital twins Data Science ↗↗Mobile M&R (maintenance and repairs)
↗↗Digital job orders ↗↗VR simulator ↗↗Digital logistics
↗↗Reliability management system (RMS) ↗↗Augmented reality
↗↗Advisory systems at production facilities ↗↗RFID inventory tracking in the office ↗↗Robots in laboratories, workshops, warehouses, on- and off-loading
↗↗Machine vision ↗↗Smart tools and smart clothes (wearables and IoT)
↗↗Electronic document managements and an e-trading platform (eCommerce) ↗↗Construction monitoring with UAVs ↗↗End-to-end business process automation (BPMS)
↗↗AI projects ↗↗Automation of routine tasks by using robot software (RPA)
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2018 targets
THE INVESTMENT PROGRAM CUSTOMER-CENTRICITY DIGITALIZATION, 2018 TARGETS
1. Completing construction of the 1. Reaching target customer loyalty 1. Profiting from the implementation Technical Center for the Development objectives (GFK Loyalty Index): of the digital transformation program. and Use of Polyolefins (TCDUP) Achieving business goals of our digital in Moscow. • general loyalty level — 84; initiatives (currently defined for the pilots at the Tobolsk site): • hydrocarbon feedstocks segment — 83; • polypropylene plant’s downtime caused • plastics, elastomers and organic by extruder stoppage reduced by 30 synthesis segment — 84; to 50 percent (achieved by performing predictive maintenance on the polymer • base polymers segment — 85; plant’s extruder);
• BIAXPLEN — 78. • butadiene output increased by 1 to 1.5 percent (using an advisory tool to 2. Continuing to implement the main optimize butadiene unit’s profitability); 49 initiatives under the Customer Experience Management program: • time required to produce job orders at the start of a shift reduced to 20 min • 4 Client-centricity Breakfasts; (by streamlining and digitalizing the job orders). • 3rd and 4th waves of the customer satisfaction survey; 2. Setting up and beefing up the Digital CREATING VALUE CREATING Technologies Function: • 3rd Customer-centricity Contest; • building competences; • 2 developmental sessions held by the Marketing and Sales Function; • selecting platforms and solutions;
• release of 4 issues of the SIBUR • implementing the Agile methodology; Klientam publication; • developing competences • 6 features on customer-centricity of the Function’s staff. published in the corporate newspaper.
3. Starting new initiatives: launching a computer-based distance learning course on customer-centricity, starting a new customer-centricity themed section on the web portal.
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50 SAFE PRODUCTION SAFE Safe
productionSIBUR Sustainability Report 2017 www.sibur.ru/en 4.0 THE COMPANY STRATEGY AND GOVERNANCE CREATING VALUE SAFE PRODUCTION HUMAN CAPITAL LOCAL COMMUNITIES
Occupational health and safety 54 Environmental protection 66 Energy efficiency 80
51 SAFE PRODUCTION SAFE Safe
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Updating our strategy
SIBUR offers an environmentally sound solution for converting oil and gas recovery products into feedstock and energy products, and synthetic materials with high added value by means of implementing state-of-the-art technologies and helping to improve living standards. Plastics and polymers produced by the Company are an energy-efficient and environmentally- safe alternative to glass, aluminum and other materials.
52 P LASTICS That said, by sheer virtue of operating 2. Eco-friendliness of production processes: IN A CIRCULAR ECONOMY large-scale petrochemical plants we
run the risk of adversely affecting the • In terms of CO2 emissions, consumption Plastics preserve resources environment. The Company’s strategy of energy and water, emissions is to minimize such risks, to continue and waste generated, production Due to its lighter weight, polymer improving our production safety, and ensure of polymers and other petrochemicals packaging helps conserve energy during that we use natural resources in the most is more environmentally friendly than production and save fuel during operation rational and sustainable manner, in line production of comparable materials SAFE PRODUCTION SAFE resulting in reduced tree felling and CO2 with the requirements of the Russian and including metals and paper. emissions. international law, and the UN Sustainable Development Goals. • The Company procures and supplies Plastics reduce waste generation petrochemistry’s best available technologies SIBUR’s Green Strategy focuses on designed to bring about further reduction
Polymer packaging protects products combatting climate change seeking to reduce in CO2 emissions and decreased from exposure to the environment and our carbon footprint to negative values. consumption of natural resources. ensures that the groceries get to the Within the framework of its Green Wings consumer fresh while helping extend model, the Company has been making 3. Products’ eco-friendliness and their shelf life 2- to 4-fold, thereby headway in the following areas: recyclability: producing a positive economic effect for both producers and consumers. 1. Environmental safety based on the • Contributing to sustainable development commodity model: of local communities by making products Recycling polymers into other useful that increase energy efficiency and reduce
products • Contributing to staving off climate change CO2 emissions generated by households, by processing associated petroleum transportation vehicles, manufacturing Plastics are fully recyclable. 94 percent gas in lieu of burning it at the flare facilities, and infrastructure. of all plastic bottles, over 70% of plastic stack and thus releasing a large volume
bags, and more than 64 percent of plastic of atmospheric pollutants and CO2. • Promoting recycling of finished products containers can be recycled. through fostering a favorable regulatory • Processing rich components in the environment for effective recycling natural gas which, even if only burnt of polymer products. for power generation, would lead to a negative impact on the environment • Enhancing the eco-friendly qualities of the because of the discharge of a greater Company’s products through developing
volume of CO2 and pollutants. phthalate-free grades of polypropylene.
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PLASTICS IN A CIRCULAR ECONOMY
REDUCED CONSUMPTION OF FUEL
80% 50% 20 % OF VOLUME OF ITS MASS BOEING 787 REDUCTION IN FUEL DREAMLINER BODY CONSISTS OF COMPOSITE IS MADE CONSUMPTION AND MATERIALS OF COMPOSITES EMISSIONS
AND ENERGY..
PRODUCING POLYETHYLENE BAGS REQUIRES 40% LESS ENERGY THAN MAKING PAPER BAGS DOES 53
EXTENDED SHELF LIFE RECYCLING INTO FINISHED GOODS 3 х 3 х 1 х = 7 х = 5 х 3 х PRODUCTION SAFE 3 х = 48 х = 2 х 182 х
For purposes of protecting the environment, of accidents, reducing the impact on the known as PDCA (PLAN-DO-CHECK-ACT). ensuring industrial safety, maintaining high environment and ensuring resources are The system includes 20 elements such product quality, and supporting energy used in a rational way, increasing the energy as policy and leadership, threat assessment efficiency of its production processes, SIBUR efficiency of production processes. and risk management, rules, standards and maintains and develops an Integrated instructions, preparedness for emergency Management System (hereinafter, the IMS) To achieve these goals, PJSC SIBUR situations, personnel involvement and that is compliant with four international Holding’s management commits to comply motivation, interactions with contractors, standards: ISO 9001, OHSAS 18001, ISO with all applicable laws and follow its own etc. The system is evolving and is 14001, ISO 50001, as well as with the ISO/ voluntary commitments, take steps to identify continuously improved in accordance with TS 16949 technical specification document. and mitigate risks, and to prevent injuries and the Russian law and with the requirements The IMS policy is an open access document. harm to the health of its personnel. of international standards. It is available at the www.sibur.ru website and is accessible to all Company employees and The responsibility for the implementation The Company makes sure that its HSE stakeholders . of the Company’s policies in the area standards are written into its contracts with of health, safety, and environment resides suppliers and contractors while ensuring The strategic goals of the IMS include the with the Company’s Health, Safety, that non-compliance will carry a penalty. following: establishing and maintaining safe and Environment Function. The Function’s No such infractions or incidents were work conditions and ensuring protection approach to managing Health, Safety, and recorded in 2017. of employees’ health, reducing the risk Environment is based on the methodology
1 https://www.sibur.ru/upload/upload/tmp/%D0%903_policy.pdf.
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Occupational health and safety
2017 TARGETS VS. PERFORMANCE
The Company was successful in meeting its targets for 2017 set in the pilot 2016 Sustainability Report:
• the incidence of injuries (counting contractors’ staff) remained virtually unchanged;
• the number of incidents involving machinery went down;
• the target for the HSE management system’s compliance with international 54 standards and best practices was exceeded.
SAFE PRODUCTION SAFE DESCRIPTION 2017 TARGET 2017 PERFORMANCE Reducing the incidence of PJSC SIBUR Holding’s and contractors’ occupational injuries and setting a target threshold at the level NO MORE THAN of LTIF1 equal to 0.57 0.36
Ensuring safety of processes. Reducing the rate of accidents NO MORE THAN at production facilities (PFAR)2 to the level of 0.01 0.005
Improving the rate of compliance with the HSE management AT LEAST system’s requirements to the level of3 2.65 2.71
1 LTIF (lost time injury frequency) — the frequency rate of disabling accidents (including fatalities) calculated as the number of lost time injuries per 1 million man-hours in a calendar year. Another term used in the English language is LTIR (lost time injury rate). 2 PFAR — a specific measure (a relative indicator) used to characterize changes in the level of risk of an accident occurring within companies that operate hazardous production facilities. It is calculated as a ratio between the number of cases of destruction of or damage to the equipment operated at hazardous production facilities, and the company’s production volume. 3 Compliance Rate — the HSE Management System’s development index, calculated as the average degree of compliance with the HSE Management System’s 20 elements.
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POLICY AND MANAGEMENT: CHANGES INTRODUCED IN 2017
Since 2012, the Company has been pursuing a program of facility upgrades with a view to enhancing industrial safety at its hazardous sites. By year-end of 2017, the number of machinery-related incidents dropped by 43 per cent compared with 2016.
PJSC SIBUR Holding’s framework documents underpinning the HSE Management system include the following:
• The Policy of SIBUR’s Integrated Management System for SIBUR LLC and PJSC SIBUR Holding’s companies 55 (in the area of health, safety, environment, quality, and energy efficiency)
• The Code of PJSC SIBUR Holding’s HSE To ensure that its manufacturing processes • Notify the Company of any and all HSE Management System are safe, efficient, and that losses are being incidents reduced, PJSC SIBUR Holding extends • The Statute of the OHS Management its HSE requirements to all employees • Provide HSE-related information to the
System of its contractors. management and employees of SIBUR PRODUCTION SAFE
• HSE standards In its interactions with contractors, The Company verifies contractors’ the Company evaluates their qualification compliance with HSE requirements in the HSE field, and includes relevant by performing behavior-based safety audits requirements and conditions in the and by conducting joint safety walkabouts respective agreements’ clauses with with contractors’ representatives. Gross follow-up safety monitoring performed and repeated breach of HSE requirements at all stages of the contract. To make sure by the contractor is punishable by fines and its requirements are followed, PJSC SIBUR penalties. Unsafe work performance will STATISTICAL DATA Holding provides briefings and training adversely affect the contractors’ rating and to the contractors’ staff, and involves them diminish their chances of being awarded 191 187 in joint meetings. All contractor personnel another contract with SIBUR in the future.
156 performing work at SIBUR’s facilities and in the interest of the Company must:
• Know and follow all applicable statutory BY YEAR-END OF 2017, THE NUMBER OHS requirements OF MACHINERY-RELATED INCIDENTS DROPPED BY • Know and observe PJSC SIBUR Holding’s HSE by-laws 43% COMPARED WITH 2016. 2015 2016 2017
Hazardous production sites, pcs
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INTERACTIONS WITH STAKEHOLDERS: In 2017, the Company’s production sites of behavior and actions under a variety KEY ISSUES IN 2017 organized Occupational Health and Safety of operational circumstances at the sites. Days to facilitate a discussion between In 2017, as part of the effort to fulfil its the sites’ employees (workers, shift In November 2017, the city of Anapa hosted strategic OHS objectives, PJSC SIBUR supervisors, plant and site managers) a cross-functional session involving HSE Holding undertook across-the-board work and HSE teams to address safety lapses staff, as well as managers and experts in the following key areas: and ways to reduce risks and improve representing other functions at the sites compliance with OHS standards. Breakout and at the Corporate Center. The primary • Improving and streamlining processes teams would analyze the incidence of objective was to share not just the Company- of the HSE Management System injuries and incidents at the sites and specific knowledge and experience but also suggest solutions to preventing accidents to learn about the best practices and trends • Fostering a safety culture and injuries, while modeling patterns from the world leaders in HSE.
• Implementing a risk-based approach . for site design, construction, operation, and decommissioning A CONFERENCE IN TOMSK 56 ON THE TOPIC OF OCCUPATIONAL HEALTH • Providing safe work conditions On July 20, 2017, Tomsk hosted . “I am quite happy with what I saw • Providing effective protection equipment a conference to discuss the topic at SIBUR’s production site. This of occupational health in the constituent is a state-of-the-art occupational • Preventing accidents regions of the Russian Federation that safety management system that has make up Siberian Federal Okrug. drawn on the world’s best practices. • Training and continuing professional A site like this one is an example to be
SAFE PRODUCTION SAFE development of staff across the board The list of attendees included Valery followed. And the state, embodied by its Korzh, Director of the Department regional authorities, could nudge the • Introducing best practices of Work Conditions and Safety at the others to reach these high standards Ministry of Labor and Social Protection by promulgating such best practices”. • Interacting with contractors of Russia, representatives of the Federal on a systematic basis Service for Labor and Employment (Rostrud), heads of regional-level • Interacting with government oversight government agencies for labor, and heads agencies for purposes of ensuring safety of regional offices of Rostrud. VALERY KORZH at hazardous production facilities and Director of the Department of Work promoting information sharing with The issues discussed by the conference Conditions and Safety at the Ministry a view to improving the regulatory and participants included prevention of labor of Labor and Social Protection methodological framework underpinning law infractions, measures to reduce the of the Russian Federation industrial safety incidence of injuries at work and the risks of occupational diseases, experience • Implementing dedicated programs sharing. to ensure compliance with occupational, industrial, fire, and environmental safety During the second part of the event the standards and requirements participants toured SIBUR’s production site where they learned about the • Working together with the operations Company’s corporate approach to management team at ZapSibNeftekhim managing occupational health and safety, to ensure safety at the construction site examined workplaces and personal protection equipment.
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OCCUPATIONAL HEALTH- STATISTICS ON THE NUMBER OF ACCIDENTS AND INCIDENTS IN 2014-2017: AND SAFETY-RELATED ACTIVITIES Description 2014 2015 2016 2017 Despite being able to reach all targets, Number of accidents 0 1 0 1 we classified one incident that took Number of incidents 90 63 (-30%) 51 (-19%) 29 (-43%) place during turnaround maintenance Number of injured employees of the Company 31 28 19 20 and resulted in a pipeline fracture as an accident. A thorough inquiry was conducted — including fatalities 0 1 0 0 with proper lessons learned.
Key activities implemented in the area Safety at the Company’s production sites involvement in HSE processes. SIBUR’s of occupational health and safety in 2017 is achieved through the implementation sites hold annual contests of best practices included: of a risk-based approach to safety. Human- in groundskeeping and building and facility induced risks are identified using the maintenance. As part of a personalized • Adoption of the second edition of the approach described in the corporate standard incentives program, 1,794 employees were Code of HSE Management System titled The Procedure for threat identification awarded the title of a Leader for their • Harmonization of requirements under and assessment of risk of possible accidents. personal contribution to the enhancement 57 the Key Safety Rules The standard’s objective is to consistently of the occupational health and safety detect threats and admit they exist while system, with 296 more receiving the title • Implementation of procedures for also characterizing and evaluating the of a Champion. Additionally, best work identifying threats and assessing risks consequences of potential accidents and teams and shift crews are chosen from core of possible accidents (ITARA) and for the probability of them occurring. and auxiliary facilities at the site level and identifying threats and managing risks at the Company level. in the area of occupational health and The end result of such identification safety (OHS) of threats and assessment of risk of All sites have implemented an electronic OHS PRODUCTION SAFE • Implementation of new approaches possible accidents (ITARA) at SIBUR’s simulator designed to assess the speed and to motivation with respect to HSE production sites would be identification the appropriateness of actions taken by the (competitions between shops and crews, of the most significant risks and measures employee in a case of emergency. A total motivational signs, safety cards) devised for mitigating such risks. 2017 saw of 3,805 employees were tested in 2017. 1,828 ITARA sessions take place resulting • Testing the staff’s knowledge in 945 suggested risk mitigation measures. A program titled Interactions with contractors and skills by using an accident Throughout the year, 313 measures were on matters of occupational health and safety simulator and training videos implemented using our own resources has been implemented for contractors’ • Reduction of the number of jobs with and outlays for key assets support. A total employees to ensure the contractors’ hazardous work conditions following of 2,208 high risks were under management employees and OHS staff receive regular an ad hoc evaluation of work conditions by the year’s end. 632 measures are training and go through safety briefings. scheduled to be taken in 2018-2021. A total of 273 of contractors’ employees • Development of job-specific check lists received training under SIBUR’s various for pre-qualifying potential contractors Risks that threaten the health and livelihood training programs in 2017. Staff of the HSE • Development and pilot implementation of SIBUR’s employees are evaluated based function are included in the commissions of a Remote Monitoring System at Class on an internal methodology described that investigate contractors’ incidents. 1 and Class 2 hazardous production in the corporate standard titled Procedure facilities (at JSC Sibur-Khimprom). for occupational health and safety threat This initiative is being implemented jointly identification and risk management. All with Rostekhnadzor employees of the Company’s sites are involved in the process of identifying threats • Optimization of operating procedures 1,828 and managing risks that imperil occupational ITARA SESSIONS TAKE PLACE of firefighting and gas rescue units health and safety. This helps to most RESULTING IN • Harmonization of occupational health accurately identify and evaluate the hazards and safety instructions that exist at workplaces. 945 • Optimization of alarm communication An important role in fostering a safety and investigation procedures SUGGESTED RISK MITIGATION culture is played by staff motivation and their MEASURES
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DIGITALIZATION To monitor their health, integrity and "The key factor is that using UAVs for serviceability, to detect unauthorized monitoring allows us to analyze photos Occupational health and safety processes crossings, inappropriate presence taken over pipelines’ protected areas and equipment have also been going of unauthorized equipment, or other at any time as an additional measure through a digital transformation. factors that could affect proper operation of control, thereby helping reduce the In September 2017, SIBUR switched of main pipelines, the company’s staff risk of violations". to unmanned aerial monitoring perform regular aerial visual surveys of its pipelines in Western Siberia. of the pipelines. In the past, the surveys Zapsibtransgas, a subsidiary of JSC were performed using Mi-8 and AS-350 SiburTyumenGas, is SIBUR’s key gas helicopters, and AN-2 aircraft. OLEG ROMANOV transmission asset. The company oversees Chief Engineer more than 2,900 km of gas product lines Since September 2017, the flyovers have of Zapsibtransgas in YaNAO, KhMAO, and Tyumen Oblast, been performed using Supercam S-350 of which more than half are located in hard- unmanned aerial vehicles (UAVs). This type to-reach areas and traverse marshlands, of operation was assigned to a specialist large navigable rivers, and a multitude contractor company. The use of UAVs for 58 of small lake and river streams. pipeline monitoring is designed to eliminate possible risks for the personnel and serve as a more cost effective solution.The monomer plant in Tomsk has also started using drones for monitoring from the air.
An automated monitoring system was set up at the ethylene storage facility at SIBUR’s
SAFE PRODUCTION SAFE Tomsk site. The 5,000-ton isothermal ethylene storage facility was designed The specialized software is used for to build the optimal stock of raw materials automating enterprise management and to support uninterrupted operation processes while simultaneously performing of the Tomsk site. A state-of-the-art supervisory control and monitoring process acoustic emission monitoring system was parameters. commissioned in summer of 2017 to obtain real-time equipment health data concerning Operating in an online mode, the system the internal tank and the facility’s foundation. furnishes information about production and In addition to being used for monitoring engineering processes, determines causes performed by a facility operator, the data are of errors, and sends analytical monitoring archived and analyzed by the Tomsk site’s data on to production support services. personnel with a pre-set frequency. Because of a shortened response time this makes it possible to make timely decisions SIBUR Togliatti, a synthetic rubber with regard to changes in the production producer, has implemented a new processes resulting in an enhanced level manufacturing execution system (MES). of industrial safety.
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IMPROVING THE SAFETY CULTURE REGIONAL EXPERIENCE AND TRAINING TOMSK: In October 2017, SIBUR’s Tomsk TOGLIATTI: In November 2017, During introductory safety briefings at site hosted table-top exercises attended 80 employees of SIBUR Togliatti, PJSC SIBUR Holding’s sites, all visitors and by response teams from Tomskneftekhim a synthetic rubber manufacturer, earned employees (including contractors’ staff) LLC, Emergency Situations Ministry, their Emergency Response Worker are briefed on potential occupational risks Promgazservis LLC, Search and Rescue of Russia rescuer badges. They formed and hazards, be that at operating facilities Service, Center for Medical Response the basis of a non-professional emergency or at facilities still under construction. to Disasters, and the city’s Duty Response response team (NERT) created under Team. Under the exercise scenario, the the Federal Law On Industrial Safety As part of the mandatory corporate training loss of containment at a polyethylene of Hazardous Production Facilities. curriculum, the following training events plant resulted in a polypropylene spill into The status of the NERT was validated were implemented in 2017: the external environment creating a toxic by the industry’s certification board under and explosible cloud. The exercise was the RF Ministry for Industry and Trade. • Developmental sessions for line used to check the emergency services’ The team is made up of employees who managers: OHS Days at the sites using readiness to respond to such or similar are very familiar with the production the following formats: Effective safety emergencies in a timely manner and processes and the equipment and have 59 management and Safety management: act in accord with each other while also been found to be medically fit to operate the human factor testing the practical skills of the site’s under extreme emergency conditions. management and staff. • 2 developmental sessions for HSE units
• Top managers of the facilities received training under the following modules: Risk
assessment in the area of occupational PRODUCTION SAFE health and safety, Threat identification and accident risk evaluation, Behavior-based safety audits
• Employees received training on the methods of accident risk identification and assessment
• Workshops on regulatory changes in the field of industrial safety and 2017 RESULTS environmental protection
• A webinar on process safety management (PSM) 13,650 EMPLOYEES 3,805 HAD WENT THROUGH TRAINING AT CORPORATE THEIR KNOWLEDGE TESTED • Webinars on OHS risk assessment, UNIVERSITY UNDER THE MANDATORY USING A SIMULATOR Behavior-based safety audits, and PSM, CORPORATE TRAINING CURRICULUM FOR HSE developed for the senior management
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EMERGENCY RESPONSE
PJSC SIBUR Holding’s emergency response procedures are based on the Federal Law of the Russian Federation On Protection of Population and Territories from Natural and Man-Made Emergencies.
60
Should a threat of an emergency arise or a natural or man-man emergency transpire, employees will be appropriately notified through local public address and The Company has developed its own set alarm communications systems that are of documents that address the procedure built into the facilities’ design. for notifying internal and external
SAFE PRODUCTION SAFE stakeholders about emergencies and All PJSC SIBUR Holding’s employees incidents. These include: have received training on what to do in an event of a threat of an emergency • The Instruction for information or if a natural or man-man emergency response to emergencies and arises. All facilities have designed measures incidents at SIBUR’s production to improve the robustness of their facilities. Under the Instruction, operations and to protect the wellbeing a statement or a press release are of their staff in emergency situations. to be published within one hour. In addition, they have built financial and inventory reserves for emergency recovery. • A Matrix of timely and coordinated notification of incidents at SIBUR, To address civil defense and emergency describing interactions at all level To report an incident, employees response needs, sites have set up site-level within the Company and relations can call a 24/7 corporate hot line emergency response and civil defense with external organizations (private at 8 800 77-07-112, or send a text teams that pull into regional (municipal and security contractors, the Ministry message to 5312. district) and functional (agency-specific) for Emergency Situations, Ministry subsystems (or units). for the Interior, etc.).
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Each site has its own health and safety INTERACTIONS commissioners who are members WITH THE LABOR UNION of the trade union and are appointed from the ranks of the site’s workforce. Permanent HSE Committees have been Having received appropriate training, set up within the Managing Organization the commissioners’ role is to help foster In 2017, the staff and the labor union SIBUR LLC and at every SIBUR’s the safety culture within their respective participated in the development facility. In addition, Occupational Safety divisions and across the entire company. and implementation of a number Commissions have been established of measures whose objectives included: within SIBUR LLC and at all of the In 2017, the functions of the trade union’s Company’s sites and facilities. health and safety commissioners were • Perform employees’ health checkups The objective of these commissions largely re-examined. This “resetting” using state-of-the-art diagnostic is to ensure that occupational health affected their responsibilities, competence techniques; and safety policies are implemented requirements, approaches to training and based on the principles of social development, performance evaluation • Improve the quality of preliminary, partnership and to enable parity-based criteria and approaches to motivation. These periodic and pre-shift examinations; representation of both the employer changes were documented in an updated 61 and the initial-tier elected body version of the Statute on SIBUR Profsoyuz’s • Promote healthy living by means of a labor union or any similar Health and Safety Commissioners developed of prevention and education; representative body. jointly by the HSE and Production Efficiency Functions, Corporate University, and • Create an enabling environment approved by the Council of SIBUR Profsoyuz. to promote exercise and sports in our own and in rented gymnasiums; Working together with SIBUR’s labor
union, the following measures have been • Ensure that cafeterias have healthy PRODUCTION SAFE implemented to improve the health and food on the menu. safety commissioners’ effectiveness and enhance their contribution to occupational health and safety:
• A developmental session was held
• As part of the TOP 5 PPEs initiative, Contracts with Contractors have clauses commissioners were taught to perform that prescribe mandatory preliminary and acceptance inspection of personal pre-shift examinations for staff at healthcare protection equipment to be able facilities suggested by the Customer. to properly test new PPE models
• A concept document on first aid training was developed
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WORKPLACE INJURIES Year after year, the Company has been THE COMPANY MONITORS THE INCI- steadily improving its statistics on the rate DENCE OF WORKPLACE INJURIES SUS- To reduce the incidence of workplace of accidents (LTIF). A decision was made in TAINED BY ITS CONTRACTORS’ WORK- injuries, the following measures were 2016 to include contractors’ data in the LTIF ERS. LOST TIME INJURY FREQUENCY implemented in 2017: calculations. The number of injuries recorded (LTIF) WITHIN CONTRACTOR COMPANIES in 2017 was 43 (including injuries sustained • Cascading occupational health and by contractors), with 1 fatal accident involving safety KPIs across all organizational a contractor’s employee. 1.58 1.58 levels, developing and implementing personalized managers’ contracts for The recorded spike in the number of injuries HSE matters. sustained by SIBUR’s and contractors’ employees was partially due to the increased • Advancing the safety culture through volume of construction work and partially due various forms of training and staff to the improved transparency of reporting. All 0.32 engagement. incidents, from major ones to the potentially 0.17 hazardous, that had occurred at the facilities 62 • Running the OHS Hot Line to enable every were thoroughly investigated, their causes 2014 2015 2016 2017 staff member to interact directly with the established, and measures taken to prevent Company’s management on pressing OHS such incidents from reoccurring in the future. THE RATE OF LOST-TIME INJURIES matters. INCLUDING THE DATA FROM CON- The Company has implemented a pre- TRACTORS • Analyzing and implementing successful qualification procedure for would-be HSE practices. contractors on SIBUR’s website. 0.73 The process includes:
SAFE PRODUCTION SAFE • Conducting internal inquiries into all 0.63 recorded incidents, monitoring and • self-assessment by filling out an online verifying implementation of corrective check list; actions triggered by such investigations. 0.36 0.30 • denial of access to the bidding process • Performing behavior-based safety audits to the candidates who fail to meet with a visual representation of the level company-defined criteria; of safety within production sites (the index of hazardous situations, the IHS) following • application of varying HSE requirements 2014 2015 2016 2017 such safety audits. differentiated according to the type Rate of injuries sustained by employees (2016, 2017, of work involved. including contractors’ data)
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OCCUPATIONAL HEALTH AND SAFETY INCIDENCE OF OCCUPATIONAL TOTAL INVESTMENT IN OCCUPATIONAL AND PREVENTION OF OCCUPATIONAL DISEASES HEALTH AND SAFETY DISEASES 12 1,434.8 Following an ad hoc evaluation of working conditions, a review of the 1,076.9 results of health checkups, and following 915.1 the investigation into incidence of 913.2 occupational diseases, measures were 643 +12% 780.5 taken to help reduce the incidence of 724.8 4 4 665.3 +2% +9% occupational diseases and to protect 2 employees’ health. 2014 2015 2016 2017 2014 2015 2016 2017
A CORPORATE MEDICAL CENTER After the working conditions evaluation Investment in occupational health activities, mln rub FOR SIBUR’S EMPLOYEES WILL BE conducted in 2017, PJSC SIBUR Holding Dedicated production program (hereinafter, DPP-1) INAUGURATED IN TOBOLSK increased the number of jobs with acceptable focusing on ensuring SIBUR’s sites’ compliance 63 work conditions by 928. The number of jobs with the requirements and standards in the area of industrial safety, mln rub A corporate medical center is scheduled corresponding to Hazard Class 4 that carries to open on the premises of Solnechny the risk of an onset and development Shopping Center (located on the grounds of serious debilitating occupational diseases of the city’s housing estate no. 9). during the patient’s professional career, has 913.2 MLN RUB SIBUR-Tobolsk LLC and insurer SOGAZ been reduced to a zero. The number of Hazard TOTAL INVESTMENT IN OCCUPATIONAL HEALTH signed an agreement that will allow Class 3 jobs where there is a risk of an onset AND SAFETY IN 2017, A 12-PERCENT INCREASE the Company’s employees to receive and development of minor occupational OVER 2016 PRODUCTION SAFE high-quality medical care either through illnesses, has been reduced by 318. a voluntary health insurance policy or by paying a fee. Tobolsk will be cooperating KEY ACTIVITIES IMPLEMENTED UNDER THE DPP-1 PROGRAM with medical doctors from other cities Facility Key achievements in Russia, including St. Petersburg. • Retrofit of pre-explosive concentration sensors SIBT • Installation of control and alarm communication equipment for detecting hazardous Employees of the Tobolsk production site and toxic substances • Installation of a Suction Unit will be able to get access to outpatient VSK • Pump replacements care and have doctors treat their children: • Transferring D-4 Unit’s discharge to the site’s general flare system. the agreement above includes a clause STLT • Installation of a discharge line to transfer gas-phase discharges from D-1-I-1 Unit’s tank about pediatric care. farm to the flare • General overhaul maintenance of the protective layer of concrete in load-bearing The center will include a health checkup and external-envelope structures, drainage systems, and perimeter pavements around KZSK the buildings of the Nitrile-butadiene rubber production shop (a hazardous production unit that will operate at the company’s facility) in accordance with the industrial safety assessment report site. This will help reduced the time • Ensuring compliance with applicable standards. A retrofit of the slurry mixer unit at Shop 8b needed for performing the checkups • Ensuring air-tight loading of ethylbenzene, styrene, synthetic fatty alcohols into tank cars at Bldg. 703 while dramatically improving their SKhP • Ensuring air-tightness when filling highly inflammable liquids and flammable liquids while quality. In addition, SOGAZ will provide venting vapors to the gas-vapor collection and recovery unit at the loading racks its services to all medical stations • Fitting protective sleeves onto ethylene and propylene pipelines at intersections with motor roads. Shop 604: ensuring compliance with standards. located on the grounds of the Tobolsk SNKh • Installation of automatic fire alarm systems and public address/general alarm systems at site and will upgrade the medical the Ethylene oxide and glycol plant building and at the Acrylic acid and ethers plant building equipment. This should have a major POLIEF • Installation of a PA/GA system to be used in the case of fire positive effect on the quality and • Installation of an automatic fire alarm system and a PA/GA system accessibility of healthcare services. TNKh • Retrofit of a 3D computer simulator to model activities under the Action plan for localization and liquidation of consequences of an accident • Installation of cutoff valves to prevent tank cars from overflowing when filled SK with propane-propylene cuts and butane-butylene cuts • Retrofit of the foam fire extinguishing system at the gas separation shop BIAXPLEN • Installation of an automatic fire suppression system
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PUBLIC RECOGNITION
On an annual basis, SIBUR’s sites and individual employees participate in various federal and regional-level contests. These include the All-Russian contest Success and safety, and Proficiency and safety, where SIBUR’s participants receive top awards.
64
AN INTERNAL RECOGNIZING OUR EMPLOYEES’ CORPORATE AWARD ACHIEVEMENTS
The site in Tomsk was presented with S.A. Poluyanov, an expert from SIBUR- E.Yu. Mitasov, HSE Director at SIBUR-
SAFE PRODUCTION SAFE a Winner’s Cup as SIBUR’s best facility Tobolsk, received a letter of appreciation Tobolsk, and Z.Sh. Dzhabiyev, Head in the area of OHS. from the Chairman of the City Duma for of Department of Industrial Safety, Civil his exemplary performance of duties and Defense and Emergency Response, were personal contribution to implementing civil awarded with badges for their exemplary defense measures in the city of Tobolsk. service in the field of civil defense in the city of Tobolsk.
RECOGNIZING FACILITIES’ ACHIEVEMENTS
SIBUR-Tobolsk received a 1st Degree the incidence of workplace injuries and Certificate for its achievements in the occupational diseases. field of emergency management and fire safety in 2017. The site in Kstovo came in 2nd in the nomination for Best projects designed SIBUR-Tobolsk received a 2nd Degree to optimize office processes and service Certificate for participating in the contest provision processes at the National titled the Best NERT in Tyumen Oblast. Contest of Projects held as part of the 2nd Russian Leaders’ Congress. SIBUR-Tobolsk’s non-professional civil defense team (NCDT) received an award SIBUR’s site in Kstovo was recognized as the best NCDT in Tobolsk for their to be No. 1 in its home city and No. 2 achievements in the field of civil defense. in the region during the regional stage of the All-Russian contest of most SIBUR-Neftekhim came in 3rd in the regional successful organizations in the field contest titled Russian Organization with of OHS “Success and safety”, conducted High Social Responsibility for reducing by the professional association Etalon.
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2018 TARGETS
LOST TIME INJURY FREQUENCY (LTIF) RATE ENSURING PROCESS SAFETY. KEEPING ENSURING THAT THE HSE MANAGEMENT FOR EMPLOYEES OF PJSC SIBUR HOLDING AND THE RATE OF ACCIDENTS AT PRODUCTION SYSTEM IS COMPLIANT WITH INTERNATIONAL OF ITS CONTRACTORS NOT EXCEEDING FACILITIES (PFAR) AT THE LEVEL OF STANDARDS AND FOLLOWS THE BEST PRACTICES WHILE KEEPING THE RATE OF COMPLIANCE AT THE LEVEL OF AT LEAST 0.43 0.007 2.85 INCLUDING CONTRACTORS’ WORKFORCE OR LOWER
65 SAFE PRODUCTION SAFE
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Environmental protection
TARGETS VS. PERFORMANCE
STRATEGIC TARGET
2017 TARGET PERFORMANCE Reduce human (anthropogenic) impact THE AVERAGE RATE OF SPECIFIC IMPACT ON The EII target was exceeded. The following factors contributed to the reduction of the EII: on the environment produced by PJSC THE ENVIRONMENT (EII) PRODUCED BY PJSC SIBUR HOLDING’S FACILITIES DROPPED TO SIBUR Holding’s facilities. Reduce the • a drop in the rate of accidents; environmental impact index (EII) from 5.2 kg per ton down to 4.4 kg per ton IN 20171 3.9 • an increase of the share of waste recycled followed by its subsequent stabilization for captive use, waste neutralization, turning the waste over to third parties for disposal or for use as feedstocks (at SK, SIBUR Neftekhim, Tomskneftekhim); 66 reduced physical volume of waste generated at Tomskneftekhim and Nizhnevartovsk Gas Treatment Plant;
• measures implemented to reduce the concentration of pollutants in the waste water (at SIBUR Togliatti: salt- FACILITIES’ TARGETS free coagulation, at Tomskneftekhim:
SAFE PRODUCTION SAFE changing process parameters); 2017 TARGET PERFORMANCE • switching to sootless flaring, operation Launch the implementation Detailed design of the glycol recovery plant in the pre- of a project to install local waste documents were developed commissioning mode (Compressor treatment facilities at the monomer for retrofitting the industrial Station at Nizhnevartovsk GPP). production plant of the wastewater treatment system Tomskneftekhim LLC
Improve performance of wastewater The effectiveness of bioreactors has treatment facilities at JSC POLIEF been improved with regard to chemical mutagenesis of the biological sludge, pH and temperature stabilization
Initiate the retrofit of the industrial 2017 saw the completion of EAD waste treatment system in Shop 1 at (engineering and design) work. JSC POLIEF The retrofit is scheduled for 2018
Construct wastewater treatment facilities Waste treatment facilities were built at JSC Sibur-PET and put into operation
1 The EII target was exceeded.
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POLICY AND MANAGEMENT
SIBUR’s sustainable development is inseparable from ensuring that all of its facilities conduct their operations in an environmentally safe manner while implementing measures to reduce the human impact on the environment and striving to improve the well-being of the workforce and the residents of the communities where the Company has its operations.
By recovering its associated petroleum Attainment of these goals will require taking Effective resource management, impartial gas (APG), a by-product of oil production, steps in the following areas: risk assessment and environmental the Company is fulfilling an important impact reduction are the underpinnings objective of improving the environment • management of environmental issues of the Integrated Management System’s 67 in its oil production areas while helping and risks; policy. The policy is available on the to create a feedstock base for subsequent Company’ website and may be freely deeper conversion of hydrocarbon resources • evaluation of the impact planned activities accessible by all interested parties1. into various energy commodities and would have on the environment and public petrochemical products. health, and implementation of appropriate As part of PJSC SIBUR Holding’s Integrated countermeasures; Management System, the Company’s Whereas SIBUR attaches special Environmental Management System
importance to ensuring environmental • development of effective environment successfully passed, in 2017, a compliance PRODUCTION SAFE safety and to protecting the environment monitoring systems and monitoring audit and confirmed its conformance to and human health, it has set before itself of compliance with applicable standards; the requirements of the ISO 14001:2004 the following goals: standard. The IMS covers 27 SIBUR’s • implementation of cutting-edge facilities. In 2017, the Company made • Reduce the adverse effect on the environment-friendly processes and preparations for switching to a newer environment technologies; version of the standard: ISO 14001:2015. This included revising and updating • Reach the level of environmental safety • building new treatment facilities and some of the processes and procedures that would be on a par with what is equipment, and upgrading existing ones; to ensure compliance with the updated achievable with the best available requirements. The revisions affected, technologies. • cooperation with governmental agencies among other things, the IMS Guide, the and regional legislators and authorities Methodology for assessing environmental • Improve the quality of the environment as well as international organizations and issues and risks, approaches to evaluating in the areas where the Company’s sites associations on matters of environmental conformity with the requirements are located, and manage the use of protection, and implementation of best of the HSE Management System. natural resources in a reasonable and practices and technologies; sustainable manner. The key to ensuring environmental safety • maintaining an active dialogue with all of the Company’s sites and successfully • Continue to enhance the Health, Safety, stakeholders, public at large and local mitigating their impact on the and Environment management system. residents with regard to the Company’s environment is strict observance operations and environment protection of applicable legal requirements, rules in the areas of PJSC SIBUR Holding’s and guidelines by all SIBUR’s own staff operational presence; and that of its contractors. At the site level, this is directly overseen by unit • improving the environmental managers and by the management management system as a part of contractor companies. of the Integrated Management System in compliance with the requirements of the international ISO 14001 standard.
1 https://www.sibur.ru/upload/upload/tmp/%D0%903_policy.pdf.
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INTERACTIONS WITH STAKEHOLDERS: KEY ISSUES IN 2017 RESULTS OF SURVEYING The Company recognizes the importance EXTERNAL STAKEHOLDERS: 1 of keeping an open and frank dialogue on environment-themed topics with the broadest possible circle of stakeholders. To achieve this goal, the Company's representatives participate in its internal as well as external activities. SIBUR acts as 50 % 43 % 33 % a partner to various discussion platforms, OF THOSE POLLED OF THOSE POLLED OF THOSE POLLED IDENTIFIED conducts surveys of its clients and partners, IDENTIFIED ENVIRONMENTAL IDENTIFIED EFFLUENTS THE SIZE OF INVESTMENT IN and develops new channels of information. SUSTAINABILITY AND WASTE ENVIRONMENTAL PROTECTION AS THE TOPIC OF MATERIAL AS THE TOPIC OF MATERIAL AS THE TOPIC OF MATERIAL SIGNIFICANCE SIGNIFICANCE SIGNIFICANCE On an ongoing basis, SIBUR has been a participant in the activities of RSPP’s Committee for Environment and Natural Resource Management aimed at improving 68 environment protection legislation.
In 2017, the Company was directly involved in preparing comments and suggestions for 33 % 12 % the draft Law On Environmental Assessment, OF THOSE POLLED OF THOSE POLLED IDENTIFIED the Federal Law On Water Supply and Water IDENTIFIED EMISSIONS WATER CONSUMPTION Discharge, the Federal Law on Environmental AS THE TOPIC OF MATERIAL AS THE TOPIC OF MATERIAL SIGNIFICANCE SIGNIFICANCE Protection, as well as a number of other
SAFE PRODUCTION SAFE legislative instruments as related to developing systems for automated control of emissions, discharges, and pollutants.
COOPERATION WITH THE BEST AVAILABLE TECHNOLOGIES (BAT) BUREAU
"A reduction of the negative The BAT framework is being developed as The Company’s employees were directly environmental impact is made possible part of a state-run program to implement involved in the development of the following through setting industrial environmental a new approach to technical regulation reference documents: standards that are predictable and of the manufacturing industry, the achievable". approach that is based on the principles • Reference document No. 18 "Heavy of best available technologies (BATs). The organic synthesis", new technologies will help improve the environment in the country through more • Reference document No. 50 "Natural gas effective environment regulation. They will be and APG processing", GALINA KHOLSHEVA instrumental in reducing energy-to-output Head of SIBUR’s HSE ratios by promoting the use of BATs in the • Reference document No. 32 "Production Management System Area field of energy efficiency, in accelerating of polymers, including biodegradable industrial development, and in improving polymers", the manufacturing sector’s competitiveness. • Reference document No. 31 "Fine organic The BAT Bureau noted the contribution synthesis", made by SIBUR’s experts to the development of BAT reference documents in the field • as well as а set of horizontal-level of petrochemistry and gas processing BAT reference documents: Reference and praised them in respective letters of document No. 22, Reference document appreciation. Both Corporate Center’s No. 22.1, Reference document No. 47, employees and staff from production sites Reference document No. 8. took part in the effort.
1 According to the results of a survey of mass media representatives, beneficiaries, and partners in the regions.
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Communication is exercised through a variety SIBUR’s Tobolsk site works nonstop to reduce "The example of ZapSibNeftekhim of channels such as making publications its impact on the environment by taking steps demonstrates how the best available in the corporate, local and federal media, to upgrade its production facilities, implement technologies may be applied… producing various environment-themed energy efficient technologies, introduce a For me, it was important to see how information materials for the broader closed-loop water cycle and state-of-the-art SIBUR’s operating facilities deal with audience, holding public hearings and monitoring systems including both fixed and environmental challenges. Their contests of innovative ideas in the field mobile stations. impact on the environment has been of environmental protection. reduced to the minimum due, in part, The Company participated in the 12th to the implementation of a closed-loop The Company’s facilities monitor the state International Landscape Conference system for water use. I could also see of the environment in real time instantly “Landscape-ecological support for in operation the mobile environmental uploading data on the world wide web where rational nature management and laboratory that, at the request of the they can be accessed by anyone who is sustainable development” held in Tyumen public, would travel to any location within interested. Oblast. The conference was attended by the city to take measurement of the air environmental scientists, geographers quality. All this information is available TOBOLSK: In April 2017, SIBUR’s Tobolsk site and landscape scientists from Russia, and publicly accessible". hosted, as part of the Year of the Ecology in Germany, Austria, USA, India, Ecuador, 69 Russia, a working meeting between Sergey Poland, and Lithuania. As part of the Ivanov, the Special Representative of the off-site field session, the delegates took SERGEY IVANOV President of Russia for Nature Conservation, a tour of SIBUR’s Ecotrail, a unique Special Representative Environment and Transportation, Vladimir Russian project implemented by SIBUR of the President of Russia Yakushev, Governor of Tyumen Oblast, together with Tobolsk Comprehensive for Nature Conservation, Alexander Kozlov, Governor of Amurskaya Research Station (TCRS) of the Ural Environment Oblast, and Dmitry Konov, Chairman Branch of the Russian Academy and Transportation
of SIBUR’s Management Board. of Sciences. PRODUCTION SAFE
PUBLIC HEARINGS IN TOBOLSK: AN EFFECTIVE PUBLIC RELATIONS TOOL
2017 saw the city of Tobolsk hold a series and the results of the completed evaluation of public hearings to discuss the following of their impact on the environment. projects: The results of studies confirming "There is a deeply-rooted stereotype the projects’ compliance with the that Russia’s environmental protection • construction of a pipeline to the requirements of Russia’s environmental standards are not as high as Europe’s. ZapSibNeftekhim complex; law were also made available. It is expected However, having taken an extensive tour that the environmental impact is going of SIBUR’s ecotrail, this misconception • expansion of the facility for spent to be even lower than what the law sets of mine was shattered and the opposite chemicals at the Tobolsk site as the minimum level. was proven — that the level of protection (construction of a tank to hold the spent for Tobolsk’s ecosystem is very high". catalyst); All hearings were officially found to have taken place. • retrofit of the industrial wastewater PATRICK HALKE neutralization and treatment shop Research fellow at the Tobolsk site; of Маrtin-Luther- Universität Halle- • construction of an alternate motor road Wittenberg (MLU, to the south of Dziraeva Prospect. Germany)
The attendees of the hearings were presented with reports containing the projects’ main technical parameters
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ACTIVITIES AND RESULTS THE COMPANY’S TOTAL BUDGET FOR IMPLEMENTING DEDICATED ENVIRONMENTAL PROGRAMS IN 2017: The year 2017 in the Russian Federation was declared as the Year of the Ecology. Region Facilities 2016, mln rub 2017, mln rub In addition to taking part in the activities Nizhegorodskaya Oblast SNKh, BB, SK over 210 251.6* on the official government-approved Tyumen Oblast STG, SIBT 200 267 list of events (the events in Tver and Samara Oblast STLT, BNK, 170 105 Perm, as shown below), SIBUR carried Tomsk Oblast NIOST, BT, TNKh 130 362.6 out a number of its own activities on the Perm Krai SKhP 120 247 corporate level. Some of the key activities Voronezh Oblast VSK 110 45.8 included the following: Tver Oblast PET 80 129 Republic of Bashkortostan POLIEF 32 41 • PET (Tver): construction of waste Kursk Oblast BK 2.5 1.4 treatment facilities; Moscow Oblast BZhD over 2 1.9 • SKhP (Perm, Perm Krai): construction Tula Oblast Geosynth 1 0.6 70 of a biotreatment unit for wastewater treatment (to be completed in 2018); GENERAL EXPENSES ON ENVIRONMENTAL PROTECTION:
• Nizhnevartovsk GPP: retrofit mln rub 2017 of a pressure discharge header using Current expenses 4,076.114 a trenchless technology; incl. expenses on wastewater treatment 2,667.202 expenses on waste management 490.888 • SIBUR Togliatti: expenses on water consumption - SAFE PRODUCTION SAFE expenses on air cleanup 704.787 –– retrofit of the aeration system and penalties for non-compliance with statutory requirements, sand filters; including the requirement to clean up after damaging the environment 0.549 regulatory impact payments 17.195 –– mothballing the sludge reservoir; Capital expenses on environmental protection 97.794
• SIBUR Tobolsk:
–– construction of a 4/9 storage CHANGES IN THE ENVIRONMENTAL IMPACT INDEX (EII) OVER tank at the P-10 waste landfill for THE PERIOD OF 7 YEARS AND THE TARGET LEVEL FOR YEAR-END OF 2021 nonrecyclable waste; As a result of the Company’s persistent over the last several years. To illustrate, –– the Ecotrail project in Tobolsk; efforts to protect the environment, the level the average specific index of environmental of anthropogenic impact on the environment impact produced by PJSC SIBUR Holding’s –– monitoring of vegetation biodiversity has been declining steadily, despite the facilities (the Environmental Impact Index, and testing the vegetation using Company’s growing production capacity or EII) dropped from 4.2 in 2016 to 3.9 in 2017. chemical methods.
7.0 7.2 7.0 6.6 5.8 5.2 5.2 4.9 4.4 4.2 4.1 3.9 4.5 4.2 3.9 4.0 3.9 3.5 2010 2011 2012 2013 2014 2016 2017 2018* 2019* 2011* 2020* 2021*
Long-range goals Actual performance Historical data Adjusted targets for 2021 4,076.1 MLN RUB CURRENT EXPENSES 1 Here and henceforth, changes in the values when compared to the previous year stem from the fact that the ON ENVIRONMENTAL PROTECTION programs are being implemented in a phased manner. Therefore, the budget for the current year depends on the implementation stage.
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PROTECTION OF WATER RESOURCES TOMSK: detailed design documentation "One of SIBUR’s main priorities completed for retrofitting the industrial is to make our production facilities more CONSUMPTION OF WATER RESOURCES wastewater treatment system. environmentally friendly. Our new state- of-the-art and highly automated waste PERM: SIBUR’s Perm site initiated a project treatment facilities at Sibur-PET will help 136* to build a biological treatment unit (BTU). make industrial wastewater treatment 129 125 125 The BTU’s rated capacity is 350 cmh with more effective". built-in extra redundant capacity. The design takes into account potential peak loads due to flooding and would allow to add new capacities should a need arise later on. The PAVEL LYAKHOVICH technology for the treatment facilities was Member developed by Nijhuis Water Technology (the of the SIBUR’s 2014 2015 2016 2017 Netherlands), one of the global leaders Management Board — in building state-of-the-art wastewater Managing Director Total water consumption, mln cu. m treatment and cleanup systems. * The increase in water consumption was due to 71 weather conditions (a hot summer), and growing TOBOLSK: The subject of retrofitting the production volumes. industrial wastewater neutralization and treatment shop (IWNT) at SIBUR Tobolsk was discussed during the city-wide public Key 2017 activities that have helped to hearings. The shop’s capacity will be increased KRASNOYARSK: The site completed the reduce the volume and improve the quality as a response to the construction of the retrofit of the local waste treatment facilities of discharged wastewater: ZapSibNeftekhim petrochemical complex, by replacing vibrating screens used for water
the expansion of the Tobolsk production site, removal from effluent sludges. This has PRODUCTION SAFE TOGLIATTI: SIBUR Togliatti’s biotreatment and the city’s expansion in general. contributed to a reduction in the concentration facilities that collect wastewater from the city’s of suspended solids in the effluent and a drop entire Central District underwent scheduled TVER: SIBUR finished the retrofit of its in coagulator consumption while curbing raw annual maintenance to repair and clean the wastewater treatment facilities at the materials losses. equipment. This was designed to improve the Tver site. The retrofit project was on the equipment’s reliability during operation and official approved list of activities to be VORONEZH: The first stage of the program the quality of wastewater cleanup. The effort completed during the declared Year of the to upgrade the water cycle system has resulted in a retrofitted regenerating tank, a Ecology in Russia. Once implemented, this been completed. The site retrofitted seven comprehensive cleanup of secondary settling project has made it possible to improve cooling towers: all of them have been tanks, and an overhaul of drum screens and the environmental characteristics of the fitted with new-generation state-of-the-art sand filters. site’s facilities producing polyethylene fan systems that are twice as efficient as terephthalate (PET), a base polymer widely the previous ones. Operating parameters BLAGOVESHCHENSK: development of used to make state-of-the-art plastic are analyzed by an automated control design documents for upgrading the packaging. The new wastewater treatment system allowing to maintain the required TPA (terephthalic acid) plant to increase facilities are fitted with a state-of-the-art temperature and the cooled water flow rate its capacity to 350 KTPA. Once fully biological discharge water treatment system more effectively and efficiently. Each cooling implemented, this would allow to enhance capable of reducing wastewater discharge tower is equipped with drift eliminators thus the facility’s efficiency and environmental threefold. The rated capacity of the new water preventing the water from escaping the safety. treatment facilities is 150 cu. m per day. cooling tower and reducing the consumption of filtered make-up water.
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ODIES OF WATER THAT ARE MATERIALLY AFFECTED BY EFFLUENT GENERATED BY THE COMPANY’S FACILITIES
JSC Voronezhsintezkauchuk discharges JSC POLIEF discharges its treated SIBUR Tobolsk LLC discharges its treated 72 its wastewater into the Voronezhskoye wastewater into the Belaya River. Neither wastewater into the Irtysh and Aremzyanka. Water Reservoir post the water treatment the Resolution to make the water body The Irtysh is a highest-class fishery water facilities. In its entirety, it is situated inside available for use nor any other documents body. The Aremzyanka was designated as the the city limits. It does not have the status of contain any reference to the water body second-class fishery water body. an environmental protected site (or area). being designated as a natural reserve. At present, no industrial-level fishing is The Belaya is designated as a highest- done at the Voronezhskoye Water Reservoir, class fishery water body. In 2017, POLIEF’s while amateur fishing is popular. The ecologists released five thousand hatchlings
SAFE PRODUCTION SAFE reservoir does not contain any protected of sterlet sturgeon into the Belaya. This species of fish. environmental initiative designed to preserve the biodiversity of water resources was carried out for the third consecutive year. However, this marked the first time restocking the river with fish was done in Blagoveshchensk itself.
WASTEWATER AND SPILLS
POLIEF’S ECOLOGISTS RELEASED Description 2014 2015 2016 2017 Wastewater discharge into water bodies, MCM, 10.1 10.3 10.61 12 including: 5,000 HATCHLINGS OF STERLET 1 Scheduled discharge 10.1 10.3 10.6 12 STURGEON INTO THE BELAYA Unscheduled discharge 0 0 0 0
Share (%) of wastewater that Data not being collected — is subsequently used by other entities not applicable to the Company
Significant spills: 0 0 0 0
1 A slight increase due to an increase in drainage systems clean-up by consumers
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AIR POLLUTION CONTROL Air samples are taken by gas analyzers located to SIBUR’s employees, the citizens, at a fixed location on the boundary of a site’s and to other stakeholders. The data are The Company regularly monitors the sanitary protection zone. The instruments also provided to regional Air Pollution quality of air at its sites’ locations, within run in real time and perform self-diagnostics Monitoring Centers under ROSHYDROMET the boundaries of sanitary protection zones, to eliminate the possibility of a human (Federal Service for Hydrometeorology and in residential areas. Public health and interference with the analysis process. and Environmental Monitoring). From environmental monitoring laboratories at there the data are passed on to the production sites take measurements 24/7. The results of the monitoring and air observatory at St. Petersburg’s Atmosfera In addition, mobile environmental labs sample analyses are published in public R&D Center where experts compile take measurements in various monitoring domain publications and are available Russia’s ecology map. locations spaced across the entire perimeter of the production site. GREENHOUSE GAS EMISSIONS1:
Description 2015 2016 2017
2 2 Direct greenhouse gas emissions, MT 6.223 6.462 73
incl. CO2 6.182 6.440 Data to be made available CH 0.041 0.022 4 in Q3 of 2018
N2O 0.0000137 0.0000140 HFCs 0.0000003 0.0000002 Atmospheric emissions prevented (due to processing of 7 7 the associated gas), MT
Greenhouse gas emissions (CO2 equivalent) prevented (due 71 72 to processing of the associated gas), MT PRODUCTION SAFE
EMISSIONS STATISTICS
63 61 59 Within the framework of an air pollution 56 59 58 56 control program, the following measures were implemented in 2017:
• sanitary protection zones (SPZs) were established at SIBUR-PET LLC (Tver), JSC Polyom, JSC RusVinyl.
• completed a FEED for retrofitting and 2014 2015 2015 2016 2016 2017 2017 stabilizing the operation of the flare
Atmospheric emissions, thousand tons facilities at SIBUR Togliatti.
• fitted floating roofs onto benzene tanks in the commodity shop to reduce releases of oil products at SIBUR Kstovo.
1 According to calculations by Atomsfera R&D Center. The results are presented annually as part of reporting under the Responsible Care Initiative. 2 Note: An increase in fuel consumption for stationary combustion and for flaring at SIBUR Tobolsk LLC, Vyngapurovsky GPP, a subsidiary of STG, SIBUR Togliatti LLC.
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AIR QUALITY MONITORING: THE REGIONAL EXPERIENCE
"The data collected by the mobile unit have validated the conclusions made by an independent review body. We analyze the quality of atmospheric air in all eventualities: under standard operating conditions, and whenever process parameters are changed, switched or adjusted. We did not see any values climb above the statutory threshold".
TOBOLSK: Tobolsk is home to two fixed air KSTOVO: Over a period of nine months quality monitoring stations. A third station in 2017, the local branch of the Federal 74 is located within the site’s sanitary protection State-Funded Healthcare Institution EVGENY SHEVCHENKO zone. Each station is fitted with gas analyzers “Center of Hygiene and Epidemiology Head of HSE Department that have been taking air samples on a daily in Nizhegorodskaya Oblast” took 54 trips at the Kstovo site basis over the last 30 years. The collected data to the sanitary protection zone of the SIBUR- are analyzed by the staff of the fully accredited Kstovo facility resulting in 330 laboratory central plant laboratory of SIBUR’s Tobolsk studies of the atmospheric air looking production site. for presence of nitrous oxide, nitrogen dioxide, sulfur dioxide, carbon monoxide,
SAFE PRODUCTION SAFE Each citizen can gain access to the air quality benzene, toluene, xylene, ethylbenzene, monitoring results by using a variety of and unsaturated hydrocarbons. different sources. Over the past two years, the data from the stations were used as the Over a ten-month period, the mobile basis for monthly publications in the local environmental station at the Kstovo site press. These publications are run under took 145 scheduled measurements of 10 air the heading of “Ecomonitoring: What do we pollutants including saturated hydrocarbons. breathe?” Statistics showing concentrations A total of 1,226 lab tests took place. of various chemicals are available on the web site of the Tobolsk production site at sibur- tobolsk.ru. This information is presented in the form of a diagram in the Air Quality Index section.
1,226 LAB TESTS WERE TAKEN OF THE ATMOSPHERIC AIR RESULTING “CENTER OF HYGIENE AND EPIDEMIOLOGY IN NIZHEGORODSKAYA OBLAST”
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WASTE MANAGEMENT THE MAIN 2017 ACHIEVEMENTS initiatives designed to increase the share IN REACHING THE FIRST OF THE of waste that is recycled for captive use, SIBUR’s waste management activities focus OBJECTIVES INCLUDE THE FOLLOWING: neutralized, and provided to third parties, on attaining two objectives: or reused as feedstocks. SIBUR Tobolsk: preparations completed for • Optimizing generation, processing and the construction of a sealed tank at the site’s SIBUR Kstovo, SIBUR Neftekhim: Separate disposal of own production waste own waste landfill for non-recyclable waste. consumer-grade plastic and paper waste collection has been systematically • Helping host cities implement measures SIBUR Togliatti: the mothballing of the sludge introduced at these sites. Containers to foster waste collection and recycling tank was completed. After land remediation for separate waste collection are being at the site of the tank’s location followed by installed, the staff is being actively biological recovery, a 184-cu.m layer of fertile engaged. The staff’s awareness is being topsoil was added at the site’s perimeter raised with the use of announcement along with planting a 6,000 sq.m lawn boards and videos. and several dozen 5-year old maple trees. Nizhnevartovsk gas processing plant: A full BIAXPLEN, SIBUR Kstovo, SIBUR Neftekhim, retrofit of the industrial discharge pressure 75 POLIEF, Tomskneftekhim, SiburTyumenGas: header using a trenchless method. These sites implement measures and
WASTE PRODUCTION SAFE
2014 2015 2016 2017 Waste generation, KT 74 74 77 64 incl. Class 1 hazard waste 0.03 0.02 0.02 0.01 Class 2 hazard waste 3.6 1.9 2.0 0.044 Class 3 hazard waste 6.8 5.9 6.41 5.634 Class 4 hazard waste 33 30 29 27.97 Class 5 hazard waste 31 36 402 30.295 Captive reuse of waste for production 6.2 5.93 5.73 7 Disposal of waste at own sites 10.3 10.6 10.4 11 Balance of waste at year-end, KT 19 21 21 21 SIBUR TOGLIATTI HELPING Shipments of hazardous waste (subject to Annexes I, II, Data not being collected — ITS HOST CITY III и VIII to the Basel Convention), including: not applicable to the Company
SIBUR Togliatti LLC owns and operates biological wastewater treatment plants that clean not just the site’s own effluents, but also the wastewater generated by the city’s Central District and other facilities in the industrial cluster in the city’s northern part. The site invests annually in upgrading its equipment, including 1 An increase due to waste from turnaround maintenance (equipment cleanup at PF), completion of the polymer sand filters, secondary settlement production facility refurbishment project (at TNKh). tanks, and aerotanks, and in updating 2 An increase caused by accumulation of construction debris from building demolition. its aeration system. These measures 3 The decline in captive reuse of waste is caused by the increased economic use of recycled materials (producing are designed to help increase the quality less waste but more recycled materials, the so-called by-products). The recycled products are consumer-quality of treatment while ensuring the facilities and are sold as finished goods, i.e. in reality the reuse is not declining. could continue handling discharge water 4 A reduction due to the cyclic nature of some of the maintenance tasks. from the city without any interruptions. 5 A drop in the quantity of construction debris.
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PERM: SIBUR Khimprom developed THE SECOND LIFE and implemented its own environmental OF PLASTICS (TOBOLSK) education program that involved participating The following measures have been in the eco-school movement, conducting 15 secondary schools took part in a contest taken as part of the Green Strategy ecology classes for school students, running of Eco-Squads as part of the Second Life of implementation plan: two TV projects: Green Light and A Guest Plastics project that is being implemented in the Studio, monitoring the air quality by the administration of Tobolsk with • Separate industrial waste collection on the territory of two important natural support from SIBUR. is now fully implemented. sites — natural reserves Chernyaevsky Forest and Andronovsky Forest. For two months, the Eco-Squads took • Consumption waste types such part in four stages of the contest with the as plastics and paper products are In June 2017, SIBUR was the first to get aim of creating collections of fashionable being collected separately for further on board with the RF Ministry of Natural clothing made from recycled materials. re-sale or re-use at POLIEF, SIBUR Resources’ Separate Properly project In addition, the participants developed Neftekhim, SIBUR Kstovo, SIBUR to implement environment-conscious and defended projects on the subject Togliatti, PET, BIAXPLEN, SIBUR Yug. practices for handling general municipal of polymer processing, filmed video 76 and household waste. The project aims clips, and took part in a week-long • Some of BIAXPLEN’s wastes have to bring together NGOs, citizens’ groups, competition of collecting plastics. The been converted into by-products local businesses, government agencies, winners were awarded with certificates (technical specifications had municipal authorities, and other types and valuable gifts. to be changed accordingly) for further of groups and private individuals to help re-use. develop and implement the best and most “I really enjoyed being a member advanced practices for separate waste of an eco-squad”, says Alyona Chupina, collection, to educate the public a contest participant. “I had heard
SAFE PRODUCTION SAFE To achieve the second set of objectives, the and to popularize appropriate methods about plastics recycling before, but following activities were implemented: of waste disposal. having participated in the contest I now have more information so I can talk TOBOLSK: The administration of the city The first activity to be implemented under to the people I know about the benefits of Tobolsk working together with SIBUR this project was Basketbottle, a one-of- of separate waste collection. The most and Tyumen Polymer Products Factory a-kind eco-friendly initiative to foster memorable event was, of course, launched an initiative entitled “The Second responsible handling of food-grade the contest of campaigner teams because Life of Plastics” which involved installing plastics, spearheaded by the VTB United it took us a long time to prepare, gather 50 receptacles for separate collection League with the support from the Ministry information, and to study the matter of plastics for their further processing. of Natural Resources of Russia and SIBUR. in depth. Plus, it was exciting to be able The official ceremony of unveiling the All plastics collected at the games of the to display my creativity on stage”. first plastics drop-off point was held VTB United League are converted into at School No. 9. As part of the initiative, new products: clothing, packaging, road a contest of children’s drawings titled “The construction materials, etc. Environmental Warning Bell” and dedicated to the Year of the Ecology in Russia was Under this project, special receptacles conducted. In their drawings, the students for collecting recyclables, mostly plastic suggested their own ideas for preserving bottles, were installed at home arenas the environmental equilibrium in the cities. of the Russian clubs that earned the The winners were presented with awards. right to play in the VTB United League’s playoffs. The clubs undertook an obligation KSTOVO: As part of the initiative “The to transfer for further recycling all plastic Second Life of Plastics” the residents bottles used by the teams’ players and of Kstovo collected and transferred for staff, and invited all fans and basketball further processing nearly 9 tons of recyclable lovers to support this initiative. polymers. This quantity of plastics made it possible to manufacture 20 thousand Since the launch of the initiative, a total plastic shoe covers. A representative of 8,414 plastic bottles have been collected SINCE THE LAUNCH OF THE INITIATIVE, A TOTAL OF of the Central District Hospital at Kstovo was and recycled. This would be enough later presented with a certificate of transfer to manufacture over a thousand sets >8,414 PLASTIC BOTTLES donating the shoe covers to the hospital. of basketball players’ uniforms. HAVE BEEN COLLECTED AND RECYCLED
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PROVIDING TRAINING TO OWN STAFF ENVIRONMENTAL EDUCATION TOMSK: Tomsk school students initiated AND TO PARTNERS’ EMPLOYEES a project to develop an environment-themed Instilling the sense of responsibility computer game within the framework Staff training and competence development for protecting the environment in the of a summer IT session at the Creativity are among the priorities of SIBUR’s younger generation is an important Palace for Children and Youths with the HSE Management System. Training on element of SIBUR’s environmental policy. participation of Tomsk IT college. The matters of environmental protection The Company is a regular organizer of students were given a tour of SIBUR’s and sustainable management of natural various environment-themed contests, Tomsk site where they were introduced resources is provided on a systemic basis educational events and tours, eco-classes to the company’s operations, learned both by the Company’s own HSE personnel at schools. Some of the latter are taught about its products and the environment and by specialized learning providers. by corporate volunteers. monitoring system. The site’s experts made a presentation about the instrumentation Diverse training formats are being used in order TOBOLSK: Under the Open SIBUR used for sample analysis, about the methods to improve training effectiveness: classroom program, a total of 21 visits to the Ecotrail and parameters used to validate a sample’s instruction, webinars, distance courses, and were organized in 2017 for 483 visitors. conformance to standards. This information, briefings. In 2017, more than 300 employees These included residents and guests of along with other information about the received training in the following areas: Tobolsk, school and university students, environmental aspects of a petrochemical 77 representatives of NGOs and citizen groups, facility, will serve as a basis for building the • the role of managers and staff of SIBUR’s management, employees from the media game. general business management systems Company’s presence regions, journalists, in assuring environmental safety; leadership of Tobolsk’s administration and of Tyumen Oblast’s Government. • ensuring environmental safety when handling waste of Hazard Classes 1 The Ecotrail tour season ended with
through 4; a conference between the representatives PRODUCTION SAFE of the Tobolsk Comprehensive Research • studying the international ISO 14001:2015 Station of the Ural Branch of the Russian standard; Academy of Science and the city’s schoolteachers. The attendees discussed • changes in the natural resources the potential for including the tours to the management law of the Russian Ecotrail in the school curricula. Federation;
• et al.
In addition to the standard training curricula, the Company’s sites employ training videos and films. As an example, JSC Sibur Neftekhim made a film about separate collection of paper and plastic waste at the site and the subsequent chain of recycling and disposal. UNDER THE OPEN SIBUR PROGRAM, A TOTAL OF Sharing experience with other PJSC SIBUR Holdings’s facilities as well as with other 21 VISITS production companies play an important role TO THE ECOTRAIL WERE ORGANIZED in training. Members of the staff can share
their experience and help develop coordinated VISITORS solutions in the area of environmental 483 protection through the use of SharePoint, a common collaboration tool, and by attending developmental sessions offered by the HSE department, or by participating in external conferences and seminars, and in visits to the leading domestic and foreign petrochemical companies.
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PARTICIPATION IN DOMESTIC AND INTERNATIONAL ENVIRONMENT-THEMED INITIATIVES
GREEN SPRING, RESPONSIBLE EUROPEAN CHEMICAL THE ALL-RUSSIAN ECO-SUBBOTNIK CARE© INDUSTRY COUNCIL
SIBUR is an annual participant in the Since 2014, SIBUR has been a participant In October 2017, SIBUR joined the ranks Green Spring Subbotnik organized of the Responsible Care® program. of the European Chemical Industry by the Vernadsky nongovernmental The program’s main focus areas are: Council (CEFIC). The vote to accept new environmental fund. For a full month Council members and partners took in 2017, employees of the Company • Plant safety, occupational safety part during CEFIC’s General Assembly. participated in various activities under and health protection A total of over 20 companies representing the banner of the Green Spring. Russia, the Netherlands, Belgium, UK, These included: grounds cleaning, • Environmental protection, product Spain, and Hungary were nominated. planting flowers and trees, collection safety In addition, SIBUR became a member 78 of wastepaper and recyclable materials, of the European Ethylene Producers helping veterans of the Great Patriotic • Transportation and storage safety Committee (EEPC), a part of CEFIC, and War and disadvantaged individuals, for the first time took a part in a members building and restoring children’s • Energy consumption and resource seminar held in Dresden on October playgrounds, and a number of other consumption by producers 25-27. activities. The Green Spring initiative was supported by 21 of SIBUR’s production As part of its involvement in the sites representing 13 of the nation’s Responsible Care program, SIBUR
SAFE PRODUCTION SAFE regions. has been introducing the best HSE THE MEMBERSHIP IN THE COUNCIL WILL ENABLE SIBUR TO PARTICIPATE practices including procedures for IN THE ACTIVITIES OF threat identification and accident risk assessment, implementing various SECTORAL GROUPS dedicated programs, and producing 93 annual reports in accordance with the ON OVER organization’s requirements. THE REACH REGULATION 120 PETROCHEMICAL PRODUCTS, In 2017, SIBUR furnished its regular AS WELL AS SIBUR is compliant with the requirements Company report on environmental
of the REACH (Registration, Evaluation, management to the organization’s STRATEGIC GROUPS Authorization and Restriction authorized national body in Russia, 90 of Chemicals) Regulation adopted the Russian Chemists’ Union. FOCUSING ON SUSTAINABLE DEVELOPMENT, INNOVATION, TRADE, ENERGY, AND LAW IN by the European Union to address THE PETROCHEMICAL SECTOR. the distribution of chemical substances produced in or imported into EU countries. The Regulation’s aims include:
• ensuring a high degree of protection for human health and the environment;
• collecting and systematizing data on all substances produced in or imported into the European Union;
• fostering innovation and development of alternative methods for evaluating the safety of chemical substances.
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PUBLIC RECOGNITION 2018 TARGETS
SIBUR KHIMPROM (DZERZHINSK):
ECOTECH, the 2nd International Fair and PRyanik of the year — 2017, an award • complete construction of the Forum, unveiled the results of “Separate sponsored by the Russian Public Relations wastewater biotreatment plant Properly!”, the All-Russian Contest of Association (RASO), was presented to the (scheduled for 2018) Socioecological Projects sponsored by Kstovo-based project titled #формулапо- the Ministry of Natural Resources and лимера (a polymer formula) implemented Environment of the Russian Federation. by SIBUR and its regional sites -SIBUR- Basketbottle, an ecogame developed Kstovo and RusVinyl (a SIBUR and POLIEF (BLAGOVESHCHENSK): jointly by the VTB League and SIBUR, was SolVin joint venture) in partnership with voted the best initiative to promote the Vtorresurstekhnologii and Studiya Surpriz, • retrofit industrial wastewater treatment culture and practice of separate waste an event agency. The award was presented facilities (to be completed in 2019) collection. SIBUR was also presented with for the second time at the federal level. 79 a special award certificate for pursuing SIBUR’s project became the winner in the • retrofit gas purification units used an active environmental policy during the Industrial PR category. in the production of TPA Year of the Ecology. (to be completed in 2018)
SIBUR TOBOLSK (TYUMEN OBLAST): SAFE PRODUCTION SAFE • build a 4/9 tank at the P-10 waste landfill for nonrecyclable waste. The SIBUR’s #формулаполимера project SIBUR was again recognized for its IWNT Shop (to be completed in 2018) in Kstovo was among the winners of participation in Green Spring, the All- the national Gold Puzzle award held Russian Eco-Subbotnik. The Company annually by the National Association was presented with an award for of Event Organizers (NAOM). The thrust showing initiative and making significant SIBUR TOGLIATTI (SAMARA OBLAST): of #формулаполимера is to raise public contribution to the cause of environmental awareness of the contribution made protection. The team of SIBUR Togliatti • retrofit the mechanical effluent by modern polymer-based technologies received a letter of appreciation for their treatment unit (to be completed in 2018) into raising the levels of comfort and active involvement in creating a positive environmental safety in an urban setting. environment and improving the ecology in the city of Togliatti. YUZHNO-BALYKSKY GPP (KHMAO-YUGRA, PYT-YAKH):
• retrofit waste treatment facilities at YuB GPP (Phases 2, 3, and 4 of installation of the wastewater treatment facility SKOSV-500) (to be completed in 2018) SIBUR Khimprom was chosen as "The SIBUR’s Ecotrail project in Tobolsk won City’s Best Company in terms of production one of the top prizes awarded by the efficiency and attention to social issues", international project titled “Ecoculture. partly in recognition of its implementation Peace and harmony". of environmental initiatives. Personal certificates of appreciation were presented to the facility’s head of the Environment Department, GR advisor, and HSE Director.
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Energy efficiency
2017 TARGETS AND PERFORMANCE
TARGET PERFORMANCE Evaluate the potential for improving energy efficiency, calculate energy 2017 saw the energy-saving potential of all production facilities efficiency indices for power generation being reevaluated and updated accordingly. The Energy Intensity Index facilities. as the energy efficiency indicator was set as a target for the facilities.
Continue searching for new 2017 saw the Top 50 best practices As a result, and realizing the potential in the area of energy savings being of established best practices. evaluated for their suitability 173 for being implemented at the facilities. ACTIVITIES WITH THE PROJECTED COST- 80 EFFECTIVENESS IN EXCESS OF 887 MLN RUB WERE IDENTIFIED FOR IMPLEMENTATION
Decide on further expansion of the Energy The Energy Management System (without the certification) Management System’s scope. has been implemented at all production sites of the holding. SAFE PRODUCTION SAFE
Ensure all SIBUR’s sites are involved All production sites except LLC NPP Neftekhimia (JV) in managing specific power requirements. have been brought aboard. As of 2018, NPP Neftekhimia is also starting to get involved.
Ensure that the cost effectiveness The increase in cost effectiveness of energy saving measures is 24 percent of energy saving measures in 2017 was 25% above the actual values for 2016. measured at ABOVE THE 2016 VALUE.
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KEY ACTIVITIES SCHEDULED FOR 2017
Description Energy Source Cost saving — Cost saving — Comments as to the reasons for target performance underperformance
Recovery and salvaging of the ethane- Natural gas 94.6 MCM 85.4 MCM A later-than-scheduled start of the propane mixture to be used for power, heat activity. Following the launch, extra and steam generation, and to produce measures were taken to distribute dehydrogenated propane, at SIBUR Tobolsk the ethane-propane mixture between power, heat and steam generation and propane dehydrogenation, making it possible to maximize the rate of utilization of the available volume of the ethane-propane mixture.
Optimum unit commitment for turbine Natural gas 14.8 MCM 8.8 MCM Reasons for underperformance: equipment enabling the use of the R-100 1. Imposition of constraints by the turbine without the K-110 bottom turbine system operator (an external 81 at SIBUR Tobolsk initiative), precluding from operating the target set. Partially offset by an extra effect obtained from implementing the activity titled “Increasing the average annual capacity delivery through the CDA facility”. 2. A change in the volume
of supplied thermal power PRODUCTION SAFE and a change of the purchase price of the electric power (day ahead market — DAM) relative to the plan, resulting in lower effectiveness of the target set versus the alternative set.
Introducing an energy-efficient process Thermal power 24,900 Gcal 27,500 Gcal for dimethyl dioxane (DMD) catalyst regeneration in Shop I-8-13 at SIBUR Togliatti
Using a single KTs-101/3 machine at gas Electric power 9.3 mln kWh 58.3 mln kWh A change in the volume of APG receival with the volume of gas being received vs. the business plan received at below 80 KCM (equipment allowing to extend the time of optimization) at Muravlenko GPP, operation in a single-machine mode. SiburTyumenGas
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POLICY AND MANAGEMENT LONG-RANGE GOALS. UPDATING THE ENERGY SAVING POTENTIAL AND COVERAGE MAPS According to the IMS’s Policy on Health, Safety, Environment, Quality and Energy REALIZATION OF THE LG-2 POTENTIAL OVER THE YEARS IN QUESTION, BLN RUB1 Efficiency, SIBUR’s strategic priorities in the area of energy efficiency and resource utilization center on making improvements Factors affecting to the energy efficiency of production the potential: scope 3.4 BLN RUB and minimizing inefficient use of energy expansion, The Focus benchmark updating, of energy efficiency resources, cutting down the cost of energy implementation of MA 2016 improvement efforts procurement and generation.
2 +7% 6.1 1.4 Key areas of the Company’s focus on 5.7 improving energy saving and energy 1.3 efficiency: 0.8 0.7 1.9 82 • design and implement measures under the Energy Saving Program;
LG-1 LG-2 MA 2017 MA 2018 MA 2019 MM 2020-2021 Unrealized • conduct energy surveys at the Company’s potential facilities;
• measure the available potential and BM — Benchmark narrow the gap between the Company LG — Long goals SAFE PRODUCTION SAFE and the world level in the medium term — MA — Management Activities see Chart. PF — Polief SK — SIBUR Kstovo
In 2017, as part of the implementation As part of the Long-range Goals-2 (LG-2) of the past activities along with the of its Energy Management System (EMS), effort, September 2017 saw the Company’s development of new activities allowing SIBUR successfully passed an external energy-saving potential being updated and to bridge the gaps. re-certification audit verifying compliance its standards revised. The realization of with ISO 50001:2011 requirements. the potential is made possible through the • keep a lookout for and disseminate best implementation of scheduled management practices; An initiative was launched in 2017 to activities for the year. An in-depth analysis streamline the process of managing of short-range activities (spanning 2017 • maintain and promote the development specific power requirements and energy and 2018) was performed at the planning of the Energy Management System in losses at the Company’s sites. Once stage, so that when new plans are drawn accordance with the requirements of implemented, the initiative will help up for the 2019-2021 period, there will be ISO 50001:2011 within the framework perform a more thorough analysis of any a need to carry out a thorough evaluation of the Integrated Management System. failures to reach the planned targets, detail the impact of specific factors on power consumption, identify losses and ultimately define steps to curb such losses.
1 As of August 2017. 2 Size of the LG-2 gap updated following the adjustment of gaps at Polief and SK with Uralsintez no longer being part of the scope.
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INTERACTIONS WITH STAKEHOLDERS % The Company is an active participant 12 of key Russian and international discussion OF THOSE SURVEYED IDENTIFIED ENERGY platforms and fora focusing on sustainable EFFICIENCY AS THE TOPIC use of resources and energy efficiency of OF MATERIAL SIGNIFICANCE1 production facilities. SIBUR’s staff act as experts in various working groups and during meetings with representatives of other large companies.
2017 HIGHLIGHTS:
83
In July, as part of the effort to help prepare In October, SIBUR’s experts took part A training program titled Operational a state report on the status of energy in the international Russia Energy efficiency and production management
saving and energy efficiency for submittal Week forum to discuss approaches to aimed at SIBUR’s managerial staff is PRODUCTION SAFE to the Ministry of Energy, the Company effecting a global improvement in energy currently under joint implementation with compiled and furnished a statement efficiency, to advance renewable energy Skolkovo Business School. The program containing information about the key technologies, and to contribute to the includes training sessions focusing on the results of the Company’s Energy Saving digital transformation of Russia’s electric practical implementation of various applied Program, as well as the quantitative power industry. projects, including energy efficiency and qualitative performance indicators projects. A team of SIBUR’s managers demonstrated over the period between developed a project aiming to improve 2011 and 2016. the quality of equipment diagnostics where relevant for energy consumption.
SIBUR held meetings with representatives As a member of Technical Working Group of such major Russian companies as 48 at the Best Available Technologies Gazprom neft, Lukoil, and Severstal to (BAT) Bureau, SIBUR completed the share experiences in improving process development of a technical reference control effectiveness. guide on best available technologies titled “Improving energy efficiency in the course of economic and/or other types of activities”.
1 According to the results of a survey of mass media representatives, beneficiaries, and partners in the regions.
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ACTIVITIES AND RESULTS STATISTICS 8.9BLN KWH The set energy goals are being achieved POWER CONSUMPTION, TOTAL: ELECTRIC POWER through the implementation of the Energy CONSUMPTION IN 2017 Saving Program that each facility compiles 1 annually. An Energy Saving Program is 8.8 8.9 comprised of measures that are technically 8.3 7.6 achievable and economically viable. Progress with the implementation of the Program MLN GCAL is monitored by means of the SOVA (the 21.4 System for Tracking Opportunities and THERMAL POWER Activities) Information System. CONSUMPTION IN 2017
1 In 2017, the implementation of the Energy 20.3 21.1 21.4 18.4 Saving Program resulted in cost savings in the amount of 1,479 mln rubles. 84 The Company does not currently make Digital transformation has also had an effect use of renewable sources of energy as this on energy efficiency and energy saving. In 2014 2015 2016 2017 would not be economically feasible at the particular, the following digitalization tools moment. That said, SIBUR keeps on the have been put into practice: constant lookout for all existing and emerging Electric power consumption, bln kWh solutions in the field. • application of the Six Sigma Thermal power consumption, mln GCal methodology to implement projects
SAFE PRODUCTION SAFE aiming to improve production processes’ energy efficiency; KEY ACTIVITIES IN 2017 • introduction of process-centered KPIs Description Energy source Savings Cost for production personnel to ensure the effectiveness, equipment is operated while maintaining mln rub the most effective modes of operation; Using a single KTs-101/3 machine at gas Electric power 58.3 mln 107.5 receival when the volume of gas being kWh • introduction of statistical and regression received is below 80,000 cu m (equipment methods into the analysis of the Big optimization) at Muravlenko GPP, Data generated by the production SiburTyumenGas processes in a search for hidden Recovery of the ethane-propane cut (EPF) Natural gas 85.4 MCM 283.7 insights; for power, steam and heat generation and for propane dehydrogenation (PDH) • implementation of benchmarking at SIBUR Tobolsk as a means of assessing the company’s standing vis-à-vis the global competition Using energy efficient thermal insulation Natural gas 9.4 MCM 30.5 and the gap between its goals and for process equipment at SIBUR Tobolsk potential; Reducing consumption of heating gas Natural gas 5.8 MCM 20.9 by replacing the coil on P-201 furnace • implementation and development at Sibur-Khimprom of automation tools (automated energy resources accounting system — Introducing an energy-efficient dimethyl Thermal power 27,500 Gcal 27.0 dioxane (DMD) catalyst regeneration AERAS, MES, APC, etc.). process in Shop I-8-13 at SIBUR Togliatti
Implementing an Advanced Process Thermal power 47,300 Gcal 66.5 Control (APC) system for olefin production at EP-360 (SIBUR-Kstovo)
1 The 2017 upturn was caused by an increase in production volumes.
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COST EFFECTIVENESS OF ENERGY SAVING MEASURES (ENERGY SAVING PRO- PUBLIC RECOGNITION GRAMS — ESPS), MLN RUB
ESP-2017 ESP-2018 Target Performance Completion, % Threshold Target 1,415 1,479 104.5 1,390 1,544
Energy Intensity Index 2017 (EII)1, % EII 2018, %1 Target Performance Completion Threshold Target 173.1 173.0 100 168.7 163.8
In 2017, SIBUR’s project titled "Present-day Energy Saving: Classical Instruments and the Response to INDUSTRY 4.0 Challenges” was nominated for an award in the category “An Effective Control System for Energy 85 Saving and Improving Energy Efficiency at IN 2017, THE IMPLEMENTATION OF THE ENERGY SAVING PROGRAM RESULTED a Fuel and Energy Company” at the All- IN COST SAVINGS IN THE AMOUNT OF Russian Contest of Energy Efficient Projects ENES-2017 1,479 MLN RUB SAFE PRODUCTION SAFE KEY ACTIVITIES IN 2018
Description Energy source Savings Cost effectiveness, mln rub Introducing an anti-surge control system at Nyagan Gas Electric power 16.8 mln kWh 33.1 Processing Plant, SiburTyumenGas
Retrofitting C-101/106 compressors at ТU-4, SiburTyumenGas Electric power 26. 7 mln kWh 58.5
Retrofitting the ВА-103/1 afterburner at Shop DBO-2/3, Natural gas 16.2 MCM 52.2 SIBUR Tobolsk
Installing a PRDS (pressure-reducing and desuperheating) Thermal power 15,200 Gcal 29.1 system and condensate pots in workshop sections at Voronezhsintezkauchuk
Retrofitting a condenser system at SIBUR-Kstovo Thermal power 27,800 Gcal 16.6
Retrofitting Column 90 by replacing the mass-transfer equipment Thermal power 18,500 Gcal 10.0 with the more effective ones, at the D-4 Plant, SIBUR Togliatti
1 A negative performance value indicates a positive change for the EII.
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86 HUMAN CAPITAL HUMAN Human
capitalSIBUR Sustainability Report 2017 www.sibur.ru/en THE COMPANY STRATEGY AND GOVERNANCE CREATING VALUE SAFE PRODUCTION HUMAN CAPITAL LOCAL COMMUNITIES
2017 targets vs. performance 88 Policy and management 91 Development of SIBUR’s Production 92 System in the year under review Performance management 93
Improving productivity 94
Interactions with stakeholders: 95 key issues in 2017 Workforce structure 96 Staff costs and the remuneration system 97 Measures of social support 98 for the personnel Activities and results 100 Developing the employer brand 101 Training and development 102 Building the talent pipeline 104
Trade union activities 105
Public recognition 106
2018 targets 107
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2017 targets vs. performance
SIBUR’s pilot 2016 report contained targets for developing the human resource potential for the coming year. All key performance targets were successfully met.
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PERSONNEL
2017 TARGET PERFORMANCE
HUMAN CAPITAL HUMAN Implement a package of measures Facilities have developed and are currently 2017 SAW designed to improve the staff’s social implementing measures intended to sentiment. improve the level of social sentiment. The 12,000 MEMBERS aggregate index of social sentiment has OF THE STAFF POLLED increased by 9 points. AND 130 FOCUS GROUPS CONDUCTED
Introduce digital technologies to help • OPORA: a personal account management tool employees can use streamline communication between to ask questions about their level of pay, make enquiries the staff and HR managers and automate or request documents, etc. routine tasks. • Self-service terminals providing access to the list of benefits employees are eligible for; an interface to file an application to travel to the SIBUR-Yug resort.
Launch an English-language learning An English-language learning program program for technical staff. has been developed and deployed. This >500 PEOPLE includes technical English for the staff of PEOPLE HAVE ENROLLED the Project Office and the Operations Block IN THE PROGRAM. at ZapSibNeftekhim. The program is also offered as part of the Dubler (Shadowing Trainee) program.
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2017 TARGET Update the process for interacting with healthcare facilities and improve the effectiveness of healthcare services provided to the staff (including those offered at the Yug Corporate Resort Center in Anapa).
UPDATES WERE IMPLEMENTED KEY ACHIEVEMENTS IN SEVERAL AREAS IN 2017:
Improved employees’ satisfaction with:
1. Health Assessment 4. Treatment at health resorts • Healthcare services — by 15% • Assessment of morbidity rates based • Arranging treatment for employees on the data obtained during periodic and their families at the SIBUR-Yug • Resort treatment — by 77% health examinations, number of visits Corporate Health Resort. • Summer vacations for children — to healthcare centers (adjusted for the • Children’s Resort Camp at the SIBUR- by 27% 89 specifics of a given production facility, Yug Corporate Health Resort. or region). • Treating employees at Altaysky Krai • Implementation of the Early Disease resorts (Belokurikha, Rossiya, Altay- Diagnostics initiative enabling additional West). tests and examinations as may 6,289 be required due to the patient’s age. • Treating employees at regional resorts PEOPLE RECEIVED TREATMENT
with funding from the Social Insurance AT SIBUR-YUG CAPITAL HUMAN • Health screening at the workplace. Fund. (13% MORE THAN IN 2016). 2. Ambulatory care 5. Sport and Healthy Living • Introduction of the Shop Doctor program. • Staying physically active in the workplace. • Dynamic monitoring of employees’ health 2,478 • Training sessions in rented gymnasia, with differentiation by patient categories. UNDERWENT ADDITIONAL CHECK-UPS swimming pools, holding festivals and (45 WERE DIAGNOSED WITH SERIOUS • Follow-up examination and treatment public sport-themed events. ILLNESSES FOR THE FIRST TIME, of patients in the “risk group”. MORE THAN 300 EMPLOYEES RECEIVED • Developing and implementing disease- IN-PATIENT TREATMENT 3. Improving medical care and services prevention programs to match AND RETURNED TO WORK) the relevant risk-factor and morbidity • Initiate construction of a multifunctional profiles. healthcare center and create a center for preventive check-ups at the Tobolsk • A framework for message broadcasting 65% Production Site. via mobile apps, video courses and OF HEALTHY FOOD DISHES webinars, promotional campaigns in the ON CAFETERIAS’ MENUS; ATTENDANCE • Set up and equip medical rooms workplace. OF CAFETERIAS GREW BY 35% at facilities. • Promote healthy living habits • Provide emergency aid and first-aid as an element of corporate culture. paramedical services. • Health of a Leader Program. • Provide first-aid training courses >200 or employees. 6. Healthy Food EMPLOYEES QUIT SMOKING
• Vaccinations. • Availability of health food, cafeterias, coffee breaks, salad bars, and vending • Organize Health Schools (screenings, machines selling health food. consultations with specialist healthcare practitioners)
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POTENTIAL EMPLOYEES
2017 TARGET PERFORMANCE Satisfy the demand for human resources at ZapSibNeftekhim, implement the Dubler program at other productions sites of SIBUR The program has been successfully implemented. ZapSibNeftekhim’s demand to train personnel to the required level for skilled personnel has been met through the Dubler program of competence. and by conducting dedicated training of young employees.
Expand the use of new tools when interacting with potential hires to cover all Deployment of an automated call center, 90 regions where the Company is present. optimization of the selection process.
SCHOOL STUDENTS
HUMAN CAPITAL HUMAN 2017 TARGET PERFORMANCE Expand the reach of projects intended to stimulate interest in natural science Carrying out such projects as the I Love Science festivals disciplines among the younger and master classes, providing support to the Mendeleev conference generation in the regions of the and contest for young researchers and to the Festival Company’s presence. of Contemporary Science Films.
Launch a new type of educational program THE FIRST CLASS OF 2017 NUMBERED in Tobolsk, based on the experience 9 TRAINEES of Scotland’s Forth Valley College. 25 GRADUATES. WILL BE COMPLETING A COURSE OF STUDY IN CHEMICAL TECHNOLOGIES AS ZAPSIBNEFTEKHIM’S INTERNS. OUT OF THOSE, After the program’s successful launch, 18 WERE INVITED its various elements have been replicated TO WORK FOR in colleges in Kstovo and Tomsk SIBUR FACILITIES. for training future hires.
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Policy and management
SIBUR’S PRINCIPAL ASSET IS ITS WORKFORCE OF
>27,000 STAFF MEMBERS WHO ARE EACH MAKING A PERSONAL CONTRIBUTION TO THE COMPANY’S GROWTH. THEY ALL SHARE THE SAME SET OF VALUES: COMMITMENT TO RESULTS, MERITOCRACY, COOPERATION AND TEAMWORK, TRUST, MUTUAL RESPECT AND RELIABILITY, GROWTH, INITIATIVE, AND LEADERSHIP.
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In addition to respecting all fundamental human rights guaranteed under Russian and international law, the Company makes a fair assessment of its employees’ professional
skills and competences and of their CAPITAL HUMAN performance, ensuring that they are provided Relations between the Company and with an adequate level of compensation, its employees are underpinned by the a competitive benefits package, and an principles of fair partnership and are empowering environment for personal in keeping with the requirements and professional growth and development. of the following documents:
The Company performs regular monitoring • the Constitution and the Labor Code of compliance, by its officers, with the labor of the Russian Federation; laws. The Company’s supreme body vested with the authority over the development • international declarations including and implementation of its personnel the Universal Declaration of Human management policy is the Board of Directors. Rights, and the ILO Declaration on Within the Board, the function of developing Fundamental Principles and Rights the HR and personnel incentives policy at Work; is delegated to the Committee for Human Resources and Remuneration. • the Company’s own bylaws such as its Code of Corporate Ethics, Some of the key matters on the 2017 the Code of Corporate Behavior, agenda of the Board of Directors and the Personnel management policy, Committee for Human Resources and and Procedures for managing the Remuneration included the launch of the human resources potential; program of SIBUR’s digital transformation, establishment of a new function entitled • collective bargaining agreements. Digital Technologies, and recruitment of highly skilled IT specialists.
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Development of SIBUR’s Production System in the year under review
In 2017, SIBUR’s Production System SPS 2017 IN NUMBERS: (the SPS) covered all of the Company’s sites with more than 27,000 members of the staff involved. The main objective Under the Small Step Improvements of the SPS is to provide employees with program, employees are rewarded >57,500 >34,600 simple tools they could use to make their financially for coming up with the best SUGGESTIONS FILED SUGGESTIONS ACCEPTED personal contribution to improving ideas for optimizing the operations AND IMPLEMENTED IN 2017 the efficiency of their facilities of the Company as a whole and/or its and the Company as a whole1. offices and sites:
Developing personnel competences as part of the continuing improvement process: 64 the establishment, in 2017, of an institute of in-house Lean Manufacturing trainers: IN-HOUSE TRAINERS RECEIVED TRAINING
92 Replicating best practices: the Company runs a permanent Best Practices Portal 336 74 accessible by all staff members resulting BEST PRACTICES BEST PRACTICES in the approval of: OF FACILITIES OF SIBUR
During the year under review, the SPS To sustain the achieved results and current stage in SPS development, to
HUMAN CAPITAL HUMAN continued to evolve which included dealing to augment the process of continuing identify its desired state, and to make with the following issues: streamlining improvement, the Company has developed plans to reach such a state for the year to processes, increasing productivity, expediting an SPS health assessment program come. SPS health assessments will make decision making, delegating greater authority (HAP). Its main objective is to perform a it possible to compare units’ performance, to lower levels of the management hierarchy, system-level diagnostic evaluation of the identify growth zones and track changes. and making full use of the potential of the Company’s IT systems and technologies.
1 Current state diagnostic system (Long-range goals, HAP, Plan for Organizational Improvements…)
2 A Management system to track achievement of goals (KPI cascades, VPM, operational focus..) Management System How are continuous 3 A system of personnel incentives and development improvements incorporated into 4 Optimizing production and business processes (value stream the existing systems mapping, process KPIs, 6 sigma…) Management Processes 5 Managing space and time (5S, hourly output) How do employees develop themselves within their 6 Continuing improvements (problem solving, accumulation units / functions and processing of ideas, best practices)
Corporate Culture How do employees 7 Leadership’s commitment to improvements (Manager’s Work Standard) embrace the continuous 8 Involving staff in the improvement process improvement culture 9 Work in cross-functional teams
10 Self-development and development of others
1 For further details about the SPS refer to SIBUR's 2016 Sustainability Report, p. 80.
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Performance management
SIBUR’s performance management system is a corporate-wide system for assessing employees’ performance allowing every member of the staff to evaluate their contribution to the Company’s performance. It represents an approach to assess their performance. SIBUR’s performance management system’s evolution received a new impetus in 2017. By enhancing and refining its long-range production performance targets for 2018-2020 and by aligning the production performance targets with marketing and sales targets, SIBUR has been able to augment its projections of improvements in operational efficiency and to develop long-range development programs. 93
The key performance indicators (KPIs) that are built into the system are plain and straightforward, and easily measurable. They are designed to motivate staff, support continuing change, and minimize risks with
a view to increasing the Company’s value and SIBUR’s 2017 Production Contract CAPITAL HUMAN ensuring stability of its operations. included the following KPIs:
Corporate-level KPIs get approved annually • Production KPIs (production of liquid by the Board of Directors on the basis fractions (hydrocarbon feedstocks) of a business plan for the coming year at gas processing plants; output and are subsequently embedded in the volumes). Production Contract. Compliance with the KPIs is monitored on a monthly, quarterly • Financial performance KPIs (EBITDA; and annual basis. The annual report meeting budgeted G&A cost targets; of compliance with the Production Contract’s operating cost per output). key performance indicators is reviewed by the Committee for Human Resources • Occupational safety KPIs (LTIF1). and Remuneration and is approved by the Company’s Board of Directors. • Strategic performance KPIs (making progress with the implementation of The approved set of trackable long-range the ZapSib-2 project). KPIs are intended to be used for evaluating performance and efficiency of production facilities and units, and for assessing performance of individual employees, and their contribution to the overall performance of the Company.
1 LTIF (Lost Time Injury Frequency) is the incidence of injuries resulting in temporary disability, an alternative term used in English-language sources is LTIR (Lost Time Injury Rate).
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Improving productivity
In 2017, the Company completed one EXPERIENCE SHARING AT SIBUR-TSOB of the phases of a very important initiative to improve productivity. More specifically, NIZHNY NOVGOROD: SIBUR’s experience this changeover will enable the Center this included taking the following steps: in establishing a shared personnel to make a switch to crosscutting services center at SIBUR’s business processes-based mode of operation • Consolidating workforce optimization services center (SIBUR-TsOB) caught the while strengthening its expert role. programs and aligning them with interest of diamond miner ALROSA and This will entail using, to the maximum programs for consolidating plants chemicals industry leader BASF who had extent possible, available opportunities and facilities, equipment upgrades, their HR managers pay a visit to SIBUR- to automate and robotize standard and process automation. TsOB’s Nizhny Novgorod office. The main operations which should have a positive purpose of the visit was to get introduced effect for the business processes of the • Facilitating best practices exchange. to the operations of the shared personnel Company as a whole. services center running under the • Including productivity improvement auspices of the business services center. ALROSA’s representatives thanked targets into production contracts SIBUR-TsOB for hosting the visit having and personal targets for managers. As explained by the ALROSA noted the usefulness of the information 94 representatives, the company is about they were provided: “We were able to begin centralizing its HR management to gain a conceptual understanding functions, and therefore needs to study of the system: what functions get the experience of other large companies transferred, what the economic effects who have already had this done. Visitors are. This knowledge will allow us from the Russian subsidiary of BASF to better calculate our own project came to compare SIBUR-TsOB with to centralize HR function”.
HUMAN CAPITAL HUMAN a similar center of their own, based in Berlin, and to exchange best practices. BASF representatives noted a number of practices they found interesting and At the moment, SIBUR-TsOB is going invited the management of SIBUR-TsOB about a major transformation of its to visit BASF’s shared services center operational model. Once completed, in Berlin.
The level of workforce optimization achieved The Company’s digital transformation has in 2017 stood at 12 percent. The optimization had a profound effect on the approaches primarily affected those vacancies that to managing human capital. Automation result from transfers (relocations) of and digitalization have made it possible to employees, retirements, and other natural dispose of routine tasks and to make the reasons for personnel attrition. work more efficient while freeing up time for creative and pioneering tasks and projects. The initiative has been joined by the This creates an empowering environment various functions of the Company. helping the staff with their own development A study of the world’s best practices and with making an impact on the Company’s in management and business process development by showing initiative and coming design is under way. Strategic vision up with out-of-the-box solutions to new is being formulated. The Company has challenges. begun implementing programs that are designed to help the functions meet their Having analyzed large arrays of data, strategic vision targets. New services the Company developed, in 2017, several have been launched and existing services analytical models to help the staff fine-tune have been centralized at SIBUR’s production units to achieve their optimal business services center (SIBUR-TsOB). performance and learn when to perform Processes are being optimized and maintenance, or why certain mechanisms simplified, cross-cutting processes are prone to failure. Some projects of this kind are being digitalized. have already been implemented in various regions of the Company’s presence, such as Tobolsk, Tomsk, and Voronezh.
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Interactions with stakeholders: key issues in 2017
SIBUR’s employees are among the Some of the most prominent issues media outlets to help forge the Company’s Company’s key stakeholders. Using on the 2017 agenda included: the issues image as the attractive employer for this a variety of intra-company communication of staff training and relocation to work category of workforce. channels (from corporate media and for ZapSibNeftekhim (Tobolsk), the the Company’s social media accounts implementation and development of the As the recruitment of staff for to measuring social sentiment using initiative to increase productivity, participation ZapSibNeftekhim ramps up, the need for the resources of the Corporate in WorldSkills projects that are being actively communicating with potential job seekers Communications the Organizational promoted at production sites. in Tyumen Oblast and in Tobolsk is getting Development Functions), the Company increasingly pressing. On two occasions maintains a dialogue with its staff and As far as the interactions with prospective (in June and November of 2017), the gathers their feedback in a timely fashion. candidates go, one of the main themes importance of giving priority to the locally- was filling vacancies within the Digital sourced staff was raised at the meetings Technologies function which is responsible of the Public Council of the Tobolsk for the Company’s digitalization. On the production site. Company representatives labor market, SIBUR has to compete for reaffirmed their willingness to consider the candidates possessing the right set of local applicant as the first order of priority skills with the leading global and Russian provided the latter meet the appropriate 95 IT companies and, therefore, engages qualification requirements. professional communities and specialized
RESULTS FROM A POLL CONDUCTED WITH EXTERNAL STAKEHOLDERS: 1 HUMAN CAPITAL HUMAN
24 % 23 % OF THOSE POLLED IDENTIFIED OF THOSE POLLED IDENTIFIED STAFF HEALTH AND SAFETY STAFF TRAINING AS THE TOPIC OF MATERIAL AND DEVELOPMENT SIGNIFICANCE AS THE TOPIC OF MATERIAL SIGNIFICANCE
12 % 9% OF THOSE POLLED IDENTIFIED OF THOSE POLLED IDENTIFIED EMPLOYEE INCENTIVES LABOR RELATIONS PRACTICES AND BENEFITS PACKAGE IN THE COMPANY AS THE TOPIC OF MATERIAL AS THE TOPIC OF MATERIAL SIGNIFICANCE SIGNIFICANCE
1 According to the results of a survey of mass media representatives, beneficiaries, and partners in the regions.
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Workforce structure
WORKFORCE INDICATORS: The reported reduction in headcount was Description 2014 2015 2016 2017 due to a change in the number of companies General information making up the Holding and owing to Total headcount as of December 31 25,580 27,509 27,950 27,196 measures to improve work productivity.
newly hired employees 2,891 3,791 3,528 2,095
Average number of employees 25,926 27,135 27,722 27,344
Composition by level of qualification
Workers, % 53 52 53 47
Managers, specialists and clerical staff, % 47 48 47 53
Composition by form of employment
Full-time staff, % 88 84 83 80
Under a limited term contract, % 12 16 17 20 96
THE COMPANY’S HUMAN CAPITAL HUMAN WORKFORCE COMPOSITION BY GENDER WORKFORCE COMPOSITION BY AGE TOTAL HEADCOUNT (% OF TOTAL HEAD COUNT)) (% OF TOTAL HEAD COUNT)
37% 38% 34% 34% 22% 21% 21% 18%
27,196 23% 22% 23% 23% 66% 63% 62% 66% 32% 34% 34% 39%
23% 23% 22% 19%
2014 2015 2016 2017 2014 2015 2016 2017
Male under 30 y.o. Female 30 to 40 y.o. 40 to 50 y.o. over 50 y.o.
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Staff costs and the remuneration system
The Company’s employee compensation Remuneration is comprised of the constant and remuneration scheme is founded upon (base) part and a variable part (a bonus). The Company also the principles of transparency and fairness The constant part is revised annually and uses non-financial in assessing every employee’s contribution may be adjusted based on the overall labor incentives to reward its into the Company’s growth and its market market performance, the economic situation, employees. competitiveness. and the employee’s personal performance throughout the year. The variable part In 2017, 3 employees were awarded with is computed based on the employee’s pay a meritorious Badge For Contribution grade, their performance as to meeting to SIBUR’s Development, with another their KPIs, and on the overall Company 147 receiving a Certificate of Appreciation performance. from the Management Board’s Chairman.
THE AVERAGE 2017 PAY ACROSS THE CONSTANT AND VARIABLE COMPONENTS STAFF COSTS: GENERAL INFORMATION 97 COMPANY GREW BY 12.8 PER CENT YEAR-ON- OF STAFF PAY, % YEAR AGAINST 2016 AND AMOUNTED TO
80,071 RUB 2% 2% 2% 2% 80,071 26% 24% 24% 24% 70,963 +12.8% 62,977 +12.7% 72% 74% 74% 74% 56,535 +11.4% 35,440 30,878 +13% CAPITAL HUMAN 26,607 23,744
1,785 600 736 951
WITH THE LOWEST SALARY AT ANY 2014 2015 2016 2017 2014 2015 2016 2017 OF THE COMPANY’S FACILITIES STANDING AT
RUB 12,000 Constant (base) component Payroll fund, mln rub OR 160% OF THE MINIMUM STATUTORY Variable components Social payments, mln rub MONTHLY PAY SET BY LAW One-time bonuses Average pay, rub (FEDERAL LAW NO. 408 OF DECEMBER 1, 2014).
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Measures of Social Support for the Personnel
A satisfying level of social guarantees is All of SIBUR’s facilities participate 2017 saw the implementation of a pilot an important piece of our full-time staff’s in a voluntary health insurance scheme project to introduce a set of workplace- remuneration and benefits package. The covering their full-time staff. The voluntary compatible fitness routine called A Healthy package we provide includes access to health insurance coverage extends Minute, and to arrange and equip dedicated medical treatment, sickness (disability) to all full-time employees. In addition, Fitness Areas to promote exercising in the benefits, parental leave benefits. SIBUR arranges and pays for all types of workplace (using steppers, mini-treadmills mandatory health checks. In 2017, pre- and weight stations, resistance exercise employment health screening and annual bands, etc.). health checkups were provided to 100 percent of employees either currently SIBUR-Yug, the Company’s Black Sea working or filling a vacancy in an area with health resort and wellness center in harmful or hazardous working conditions, Anapa hosted 4,146 SIBUR employees and or those transferred to another position members of their families. 2,143 children In 2017, 1,100 employees enrolled with a different set of hazardous working aged 7 to 16 spent their vacations at the in a new program, called Health, conditions. summer camp. Starting from 2017, both whose mission is to take a systemic grandchildren and parents of the staff 98 approach to keeping the employees In addition to covering medical bills, the are eligible to visit the resort. healthy, to create an enabling Company implements measures that environment at work, and to foster are aimed at preventing ill health and A program called Mi-Siburyata (We’re commitment to a healthy life style as an promoting exercise and healthy life choices SIBUR’s youngsters) has been set up for indispensable element of the corporate amongst its staff. children of SIBUR’s staff. As part of the culture. The following activities have program, children’s creativity contests are been implemented under this program: Athletic clubs that have been set up at the held, gifts are presented to the children
HUMAN CAPITAL HUMAN Company’s facilities play an important role on September 1 and on the New Year’s, • Health Schools and Health Days for in promoting the healthy life-style. In 2017, and tours are arranged to production staff including mobile screening and employees won medals in municipal and facilities. 430 participants took part in the lectures about the benefits of a healthy regional track and field meets, as well as in Mi-Siburyata contest held in 2017 with lifestyle, consultations with specialist soccer, volleyball, powerlifting, swimming, 120 winners receiving prizes and gifts. physicians, and disease prevention rifle and pistol shooting competitions. activities as a follow-up from the periodic health examinations. SIBUR’s major athletic events in 2017 included a Spartaciad of employee teams • A program to procure blood pressure competing in 11 athletic disciplines, monitors and make them available a corporate cross-country race under in the workplace. the name of In Pursuit of Good Health, a swimming competition between SIBUR’s • Launch of a corporate magazine about facilities in Nizhegorodskaya Oblast, the healthy lifestyle called SIBUR: company-wide competitions known as A Healthy Future. The pilot issue with SIBUR’s Ski Track and Autumn on the Volga. the circulation of 2,200 copies was delivered to the Tobolsk production site For the second straight year, the Company SIBUR-YUG, THE COMPANY’S BLACK in December. conducted, as part of the Summer SEA HEALTH RESORT AND WELLNESS Spartaciad, a Health Festival with CENTER IN ANAPA HOSTED participants attempting to pass the GTO (Gotov k Trudu i Oborone, or Ready for Work 4,146 SIBUR EMPLOYEES and Defense) fitness tests. All in all, 164 AND MEMBERS OF THEIR FAMILIES company employees successfully passed the test in 2017 meeting the requirements needed to get the gold, the silver, or the bronze GTO badge. In September, SIBUR’s combined team, comprised of athletes from Moscow, Nizhny Novgorod, Tobolsk 2,143 CHILDREN and Tomsk, took part in IRONSTAR, SPENT THEIR VACATIONS an international triathlon competition. AT THE SUMMER CAMP
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A JOINT PROJECT BY SIBUR AND THE AGENCY FOR HOUSING MORTGAGE LENDING (AHML) “ZapSibNeftekhim will become a world- At the St. Petersburg International Economic of a dedicated housing mortgage lending class complex employing the industry’s Forum in June 2017, AHML and SIBUR program for SIBUR’s staff that will involve top production engineers, process signed an agreement for the development AHML’s partner banks. Under such engineers, and other professionals. of the housing market in Tobolsk, Tyumen a program, members of the staff will By partnering with AHML, SIBUR will be Oblast. Under the agreement, the two be able to get cheaper loans to purchase able to focus on its core business having parties are to jointly implement a housing the apartments they rent. The size of provided its staff with appropriate housing rental program offering ZapSibNeftekhim AHML’s investment in the project may conditions”. employees standard comfort-grade housing reach up to 4 bln rubles. This project for lease with an option to purchase the is truly innovative being the first of its property later. kind on the Russian market. In addition to offering its employees concessionary The parties will jointly set up a pool mortgage terms, SIBUR will subsidize DMITRY KONOV of lease apartments in Tobolsk. The a portion of the purchase price of the Chairman apartments to be leased to the Company’s apartments they will be buying. of SIBUR’s 99 staff and their families will meet all Management Board today’s standards for housing and home The parties will be implementing this comfort. These properties are going to be project on competitive yet mutually leased to up to 1,500 families. As part of beneficial terms. The apartments its incentives program, SIBUR will provide to be leased are going to be initially its staff with company-owned apartments acquired by Kutuzovsky closed-end
for the first five years rent-free. real estate investment fund (under the CAPITAL HUMAN management of AHML). The shares in the In addition, the two parties are fund are already available on MICEX for currently in discussion over the terms purchase by public investors.
“The project to create rental housing in the regions working together with one 1,500 FAMILIES of Russia’s largest companies is a pilot WILL BE OFFERED RENTAL project that will pave the way for building HOUSING WITH AN OPTION a segment of corporate rental properties TO BUY THE PROPERTY LATER with the participation of a single development institution”.
4 BLN RUB WILL BE INVESTED IN THE PROJECT BY AHML ALEXANDER PLUTNIK AHML’s General Director
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Activities and results
The Company’s dynamic growth and high demand for skilled workforce, its plans with regard to staffing new functional units and ZapSibNeftekhim, have all served as the drivers behind the need for optimizing the recruitment process to the maximum extent possible. To achieve this goal, the following steps have been taken:
• Managers at various levels received training on how to conduct a structured interview which has led to an improvement of the candidate evaluation quality and allowed to effectively rank the candidates by focusing on the same set of competences, to mitigate recruitment 100 risks, and to reduce the hiring time. This training was provided to 1,228 managers. To raise awareness of available vacancies employees. All of them were folded into at ZapSibNeftekhim, the Company the onboarding program. As of December • Candidate selection has been automated implemented a project called Mobile Groups 31, 2017, the total number of program with the use of OPORA, a common whereupon off-site mobile sessions would participants (counting those in the program’s database capable of storing all incoming be set up at staff-providing cities including second year) stood at 500 people. resumes and selection statuses in real Kazan, Ufa, Nizhnekamsk, Sterlitamak,
HUMAN CAPITAL HUMAN time. At the same time, the process Khabarovsk, etc. In the course of the project, When it comes to hiring managerial has been made more straightforward over 15,500 resumes were reviewed, and staff, the Company fills its vacancies with thanks to the reduction of the number a roster of potential candidates was developed. graduates of the world’s top business of interviews and the stages required schools, provided no matching candidates are to coordinate the job offer. The duration of Applicants who successfully pass all stages available from the Company’s own internal the overall process was cut by 13 per cent. of selection and get hired by the Company, pipeline. In 2017, INSEAD business school are enrolled in a two-year onboarding and hosted a SIBUR career event for prospective • A single partially automated call center development program that targets young staff candidate with a keynote presentation by for applicants has been set up. Here one under 30 years of age with the relevant job Sergey Komyshan, SIBUR’s Management can quickly get an answer to frequently experience of under one year. The program Board Member and Executive Director. 8 new asked questions concerning available involves close interactions with a mentor participants joined the program throughout vacancies, internship programs, etc. in addition to receiving guidance from HR the course of the year. Whereas previously applicants had to staff. In 2017, the Company hired 284 young make enquiries with recruitment officers at specific sites’ HR departments, now they can call a single call center (calls are free for applicants from across Russia). Since the inauguration of the call center, over 50 percent of the callers had their questions answered without having to be put through to a recruitment officer while the average conversation with an 15,500 RESUMES 284 YOUNG EMPLOYEES operator lasted 2 minutes. WERE REVIEWED, AND A ROSTER OF GOT HIRED BY THE COMPANY IN 2017 POTENTIAL CANDIDATES WAS DEVELOPED
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Developing the employer brand
2017 saw the continuation of the effort to strengthen SIBUR’s reputation as an attractive employer for various categories of potential and existing employees. Working in the framework of an innovative concept titled An Empowering Environment to Unlock Potential, a guidance document was developed to position the Company as an employer with a value proposition broken down into segments based on the target audiences.
101 A concept for SIBUR-branded areas Y and Z. With the realization that their at educational institutions has been values and aspirations are quite different developed. These are rest areas complete from those of our current staff, our with Wi-Fi, hassocks or beanbag chairs, Company is preemptively developing the and information boards featuring areas that are going to be relevant in information about building a career within the near future, including digitalization,
the Company. Such areas have already cross-functional teamwork, non-stop CAPITAL HUMAN been set up at Kstovo Oil College, Tobolsk interactions through social media, staff branch of Tyumen Industrial University, rotations, internships, etc. Ufa State Oil Technical University, Voronezh State University of Engineering As part of these efforts, SIBUR became, for the Technologies, and at Tobolsk multi- fourth time, a partner of Management of the discipline technical college. Future, an All-Russian Students’ Conference hosted by Higher School of Management at Considerable efforts have been expended St. Petersburg State University. The delegates on advancing our employer brand to were addressed by Dmitry Konov, Chairman be able to attract the best candidates of SIBUR’s Management Board, who spoke representing the so-called Generations about innovations at SIBUR.
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Training and development
CURRENT STAFF Depending on their learning objectives, FOCUS ON TRAINING AN EMPLOYEE corporate training programs are assigned to OF THE FUTURE At a time when digital technologies are appropriate university departments such as: increasingly pervasive and the ways people One of the far-reaching effects of SIBUR’s interact at work undergo a sea change, the • Production efficiency, digital transformation is the change of employees’ key assets are comprised not requirements set for prospective candidates just of their professional knowledge but • Marketing and sales, wishing to work for the Company, including also of the so-called soft skills: young workers and recent graduates of higher • Occupational health and safety, learning institutions and colleges. In addition • critical reasoning skills, to the required “flexible” skills, the changes • Economics and finance, are affecting the list of professional • ability to analyze information and make requirements which now already include basic decisions in a short span of time, • Information technologies, etc. programming skills and mastery of technical English needed to operate the most advanced • competencies in the areas of economics A new department — Leadership and Culture state-of-the-art machinery. and finance, — was established to develop management 102 competences and to foster corporate culture. This is the reason why the Company focuses • self-development and self-education The curriculum of the Personal Effectiveness its efforts on making sure that training skills. department includes management, standards at relevant universities and communication and mentorship skills. colleges are aligned, to the maximum extent These are the skills that are the focus possible, with the specific requirements of the Company’s massive employee The programs are developed with the of employer facilities. To achieve this goal, training courses for 2017 and 2018. The participation of leading international experts company employees read lectures and
HUMAN CAPITAL HUMAN implementation of most of the training and the Company’s own experts. To enhance arrange site tours and visits to the Company’s programs is under the purview of SIBUR’s the engineering, technical and process training facilities for students in the cities of Corporate University that provides instruction expertise, Tobolsk is in the process of setting SIBUR’s presence. 2017 saw more than 400 to employees of all organizational levels and up a training center that will be used to train such events take place. functional areas. In 2017, Corporate University the Company’s workers and engineering staff. executed 5,700 training programs. In addition to the specific job-related For the sake of convenience, and to improve disciplines, the targeted programs’ the effectiveness of the training process and curricula include English language modules the speed of knowledge transfer, Corporate and corporate courses focusing on the University uses such course-delivery formats development of personal effectiveness. as distance learning courses, webinars, video- The experts from the Company act as both lectures, and training videos. the lecturers in the very specialized fields of knowledge, and as university-level education All Company employees have access quality experts. In 2017, one half of the to the corporate e-library. 270 students who took an internship with the Company ended up deciding to stay and work at SIBUR’s facilities.
CORPORATE UNIVERSITY EXECUTED STATISTICS OF PARTICIPATION IN EDUCATION PROGRAMS AND EVENTS AT CORPORATE UNIVERSITY: >5,700 TRAINING PROGRAMS Description 2014 2015 2016 2017 Corporate education programs, no. of people 5,450 5,570 7,869 13,654 Compulsory education programs, no. of people 7,440 7,659 8,805 13,650 Total number of training sessions held, no. of 1,490 1,724 2,831 65,453 people Total number of training sessions held 5,737 Trainee composition by categories, % 270 STUDENTS Workers 58 58 53 32 Managers, specialists, clerical staff 42 42 47 67 WERE TRAINED IN THE COMPANY
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With the emergence of new goals, the target ADDRESSING THE CHALLENGE OF STAFFING ZAPSIBNEFTEKHIM audience had to be expanded: the 2017
career guidance events focused not only To ensure the facility is adequately FOLLOWING THE COMPLETION OF THESE on natural science and chemistry majors, staffed, the Company is implementing, PROGRAMS, MAIN PRODUCTION FACILITIES AT ZAPSIBNEFTEKHIM HIRED but also on students working towards their in the regions of its presence, a tailor- degrees in physics, math, and IT. They were made program of student selection and STUDENTS invited to take part in hackathons, IT-themed training targeting students with high 73 events where participants spend several potential (the so-called HiPos). OVER hours working on solving specific IT-related problems of various companies. SIBUR’s 2017 saw the implementation of pilot >150 NEW STUDENTS hackathons were hosted by Higher School projects aiming to provide dual and ENROLLED IN THE NEW ROUND OF THE of Economics (MLH Local Hack Day) and network-based training to selected TRAINING PROGRAMS WILL BE OFFERED Moscow Institute of Physics and Technology students using Tyumen Industrial JOBS IN 2018. (Global changers). The Company gave the University as the base, plus programs Among the cities covered by the participants assignments to develop mobile at Kstovo Oil College, Tomsk Industrial targeted programs in 2017 and 2018 apps and to build models for predictive and Humanitarian College, and other are Tobolsk, Tyumen, Ekaterinburg, analysis of product quality. The most professional and vocational education Perm, Tomsk, Kstovo, Dzerzhinsk, Ufa, 103 successful solutions were rewarded with institutions. Blagoveshchensk (Amurskaya Oblast), prizes and the teams were invited to take and Vladivostok. part in the contest to participate in the Company’s internship program.
Engaging middle and high school students
is another important area of focus. ENGAGING SCHOOL STUDENTS IN TOBOLSK CAPITAL HUMAN In addition to taking steps to stimulate their interest in mathematics, chemistry and In 2017, Tobolsk was chosen to be the venue department at Mendeleev Tobolsk Teaching physics, SIBUR has been implementing for the implementation of a pilot project to Institute and with the support from SIBUR various educational and awareness-raising set up SIBUR’s Classes. under the Formula for Good Deeds engineering and computer programming- charitable program. themed projects for school students. Under In addition to covering the general the annual SIBUR’s Grants program, the secondary school curriculum, students Tenth-grade students are taught the Company provides awards for winners that are part of the Classes will be basics of a worker’s profession using one of regional and oblast-level Olympiads, given additional courses in information of the regional colleges as the venue. as well as for the teachers who trained technologies, chemistry, mathematics, A network-based teaching format has been them. In 2017, award ceremonies were held physics, and engineering design. implemented with some classes taking in 8 cities where the Company operates, Participation of 42 Tobolsk students was place at the production facilities. with 34 grants awarded to teachers and 331 secured for this pilot project. grants awarded to school students. Participating students study computer An event-based career guidance system has science at the IT Expert training center, been put in place in the cities of presence. at the IT Lab in School 9, in the Festo It includes holiday sessions at summer classroom in School 18, and at the facilities camps, series of public classes as well as of the Tobolsk-POLITECH Center for Youth classes held at facilities, regular tours for Innovation and Creativity (CYIC). The CYIC high school seniors and their teachers, was set up on the initiative of a group a series of casual no-tie meetings with the of professors of the computer science Company’s top managers, quests and live action games focusing on specific professions organized together with regional offices.
.
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Building the talent pipeline
2017 saw the continuation of the efforts DEVELOPMENT PROGRAMS FOR STAFF OF KEY FUNCTIONS: aimed at building a talent pipeline, developing promising employees and preparing them for filling management-level vacancies within PRODUCTION EFFICIENCY the Company. Through the relocation of its production staff from other facilities, the A program for the management of A Development Program for the Second Company has been able to successfully fulfil the Operating Performance function in Command, a program for mid-level the objective of staffing ZapSibNeftekhim implemented jointly with SKOLKOVO managers designed to enhance the with highly skilled workforce. Donor sites Business School. The program’s key skills needed to develop technological were offered a training program to help outcomes are: improvements and to develop the teams quickly fill the gap ensuring staff continuity. under their command. • getting new experience (including In 2017, talent development programs international experience) from other focused primarily on helping reach the companies in handling operational targets of the functions who provide support challenges, to and shape strategic development of the 104 Company, i.e. plan production volumes, • applying other companies’ experience perform production, maintain property, plant at SIBUR’s facilities, and equipment, and sell finished products. • exchanging practices between facility managers, acquiring teamwork-based problem-solving expertise.
HUMAN CAPITAL HUMAN COVERAGE COVERAGE
>90 STAFF 220 STAFF
MARKETING AND SALES VALUE CHAIN MANAGEMENT
A comprehensive program for developing A program for developing key professional the function’s personnel with the focus competencies — analytical reasoning, on changing the sales model and cross-functional communication skills, transitioning from product distribution knowledge of the Holding’s value chain. to a customer-centric sales paradigm.
COVERAGE COVERAGE
>120 STAFF >120 STAFF
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Trade union activities
Our trade union organization is an important internal partner for the Company. Its contribution to the organization of work and rest of our staff is quite significant. The framework for the interaction between the Company and SIBUR Profsoyuz is documented in the social and labor Agreement entered into on June 30, 2016 for a period of three years, through June 29, 2019.
THE CURRENT COLLECTIVE AGREEMENTS Initial-tier trade union units that are part REGIONAL EXPERIENCE: DZERZHINSK ARE IN EFFECT FROM 2017 THROUGH of the SIBUR Profsoyuz union operate 2019 COVERING on a site level. Collective bargaining As part of JSC Sibur-Neftekhim’s 105 agreements are concluded with the Health program, socio-psychological % OF THE COMPANY’S STAFF 100 facilities to establish the principal benefits examination of staff members and guarantees members of the staff are is carried out while providing training entitled to, in addition to those that the on stress-relief techniques and offering law envisages. This includes accident psychological support to site teams payouts in cases where an employee in addition to one-on-one consultations.
suffers an occupational injury at work, CAPITAL HUMAN additional vacations for female employees Scope of assistance in 2017: and persons with family-related needs, providing company-sponsored transfers • Psychological awareness raising — to the place of work, subsidizing child 558 people (21 events) daycare costs; compensation payments to retiring individuals; various types of • Socio-psychological support financial assistance programs. to the workforce — 49 events
The current collective agreements are • Psychological support to individual in effect from 2017 through 2019 covering employees — 215 consultations 100 percent of the Company’s staff. • Seminars — 558 people As part of the social partnership arrangement seeking to improve the staff’s • Psychological support for candidate satisfaction with their social standing, selection — 32 people SIBUR Profsoyuz has been participating in reviewing the results of social diagnostic Expected result: surveys and in developing, based on such analysis, organizational improvement • Improved psychological and physical programs designed to improve the staff’s health of employees; morale and social sentiments. • Successful team building;
• Improved social and psychological climate at work;
• Prevention of interpersonal conflicts, etc.
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Public recognition
SIBUR has been consistently placed at the top of employers’ rankings based ST ST ST on reviews by experts, prospective 1 PLACE 1 PLACE 1 PLACE hires, and students. In 2017, the IN THE HEADHUNTER IN THE CHEMICAL IN THE CHEMICAL INDUSTRY RANKINGS INDUSTRY CATEGORY CATEGORY OF THE Company was ranked as follows: OF THE UNIVERSUM RATING RANDSTAD AWARD RATING
ST RD RD RD ST 1 PLACE 3 PLACE 3 PLACE 3 PLACE 1 PLACE PLACE AT THE AT THE GRADUATE IN THE ENGINEERING IN THE FEDERATION IN THE BEST EMPLOYERS EFFECTIVE 2017 CONTEST/ PROFESSIONS CATEGORY CATEGORY OF THE HR BRAND OF 2017 RANKING BY FUTURE EDUCATION FORUM FORUM OF THE UNIVERSUM RATING OF THE YEAR AWARD TODAY, A JOB SEARCH SERVICE
106 MANY OF THE COMPANY’S EMPLOYEES BECAME WINNERS OF VARIOUS AWARDS AND PROFESSIONAL SKILLS COMPETITIONS: HUMAN CAPITAL HUMAN
11 SIBUR employees took part Denis Zhdanov from the Tobolsk Site Employees of the Tomsk Site were in WorldSkills Hi-Tech 2017, the 4th emerged among the winners of the among the winners of the regional Championship of Hi-Tech Industries’ regional stage of the professional skills professional skills competition for Cross-Industry Workers’ Professions. competition titled Celebrating the welders. Oleg Zakharov came in first, Riyan Nigmanov, a lead engineer with working man! held in the Ural Federal with Vladimir Ishutin clinching the Yuzhno-Balyksky Gas Processing District, in the Best Welder category. third place. Plant (SiburTuymenGaz), came in first in the Non-Destructive Control category. Bronze awards went to Artem Boyko, Section Manager, Control and Instrumentation and Process Control Systems, Zeleznodorozhnensky Branch, Biaxplen, in the Process Automation nomination, and to Alexey Svetlana Kamalova, a lead engineer Podatelev, Shift Supervisor, Magnetics for occupational health, safety and and Measurements Shop at Sibur- environment at Nyagangazpererabotka, Neftekhim, in the Electrical Installation won a regional professional skills nomination. competition among HSE experts.
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2018 targets
DIGITALIZATION OF HR PROCESSES: DEVELOPMENT OF SPS: ADVANCING THE EMPLOYER BRAND:
• Implementation of the SAP Success • Development of information systems in • Partnership with Case-in, the All- factors IT solution. support of continuing change, including Russian Championship for Engineering such portals as HAP, Best Practices, Degree Students, establishment of a • Development and launch of a corporate and Problem Solving. Petrochemistry League. Conducting social network. regional selection stages at ten largest • Development of SIBUR’s Production relevant institutions of higher learning. • Automation of some HR processes using System within such administrative units Jungle Jobs (recruitment), E-Learning as the Corporate Center and NIPIGAS. (training), RPA (HR administration, compensation and benefits).
107
STAFF TRAINING: STAFF SELECTION: CAPITAL HUMAN
• Comprehensive interactions with the • Automation of some of the personnel WorldSkills union, integration of the selection processes with the use latter’s standards and methods into of information systems and chat bots. the Company’s business processes, including corporate professional skills • Increasing the number of employees championships based on the WorldSkills holding a degree in physics and methodology, and the expansion of the mathematics. list of existing competences.
• Development of a corporate competences model.
• Establishment of a Technical Training Center (TTC).
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108 Contribution to the development CONTRIBUTION TO THE DEVELOPMENT OF LOCAL COMMUNITIES LOCAL OF DEVELOPMENT THE TO CONTRIBUTION of local
communitiesSIBUR Sustainability Report 2017 www.sibur.ru/en THE COMPANY STRATEGY AND GOVERNANCE CREATING VALUE SAFE PRODUCTION HUMAN CAPITAL LOCAL COMMUNITIES
2017 targets vs. performance 110 Policy and management 111 Interactions with stakeholders: key 112 issues in 2017 Activities and results 114 2017 results 119 Public recognition 120 2018 targets 121
Contribution 109 to the development of local COMMUNITIES LOCAL OF DEVELOPMENT THE TO CONTRIBUTION
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2017 targets vs. performance
STRATEGIC TARGET PERFORMANCE
Improve the effectiveness of managing the Company’s charitable A transparent system has been created for managing charitable program with a focus on long-term planning, systematicity, activities; the Formula for Good Deeds program has been fine- accountability of social investments in line with the Company’s goals tuned after its first year under implementation. A mechanism for and working closely with local authorities. collecting the accounting data from the Company’s counterparts has been set up. Well-defined criteria have been adopted for evaluating programs and projects under implementation.
Support transition to long-range planning and budgeting. A long-range plan has been developed for the Basketball School program under the Sport and Healthy Living focus area. Development of long-term plans spanning 2018 through 2020 got underway for Education and Science and Culture focus areas. 110
TARGETS FOR REGIONAL PROJECTS PERFORMANCE Improve the overall quality of applications sent to the contest Educational modules for counterparties have been incorporated of public-interest projects through the implementation of into key inter-regional projects in the areas of sport, education, an educational program for participating representatives and culture. of non-profit organizations, public and municipal entities in the regions. Educational events were attended by
>700 LOCAL EMPLOYEES OF SOCIAL SERVICES INSTITUTIONS
TARGETS FOR INTER-REGIONAL PROJECTS PERFORMANCE
CONTRIBUTION TO THE DEVELOPMENT OF LOCAL COMMUNITIES LOCAL OF DEVELOPMENT THE TO CONTRIBUTION Amalgamate the ad hoc inter-regional projects into pertinent A long-range plan has been developed for the Basketball comprehensive programs for each of the focus areas, for the School program under the Sport and Healthy Living focus area. purpose of achieving sustainable and lasting results. Development of long-term plans spanning 2018 through 2020 got underway for Education and Science and Culture focus areas.
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Policy and management
Uniting all stakeholders on the basis of shared values and getting them engaged in the process of positive change is the key objective of Formula for Good Deeds, SIBUR’s corporate charitable program. In 2017, the program’s development trajectory was charted based on the feedback from the pilot competition of social projects, from polls conducted among counterparties, and by performing an ad hoc survey of social challenges faced by the communities where the Company is present operationally.
The Company’s strategic partners on the local level are the regional and municipal authorities. In some of the regions, SIBUR has entered into 111 social and economic cooperation agreements with the local communities looking to promote sustainable economic growth, improve the The Company’s policies in the field of investment climate, and find solutions to the sustainable development and social social challenges facing both the regions as responsibility are outlined in the a whole and specific municipalities in particular. following internal policy documents: Such social and economic development agreements were signed with the governments • The Code of Corporate Ethics; of Khanty-Mansi Autonomous Okrug (KhMAO), Yamalo-Nenets Autonomous Okrug (YNAO), • The Memorandum of Corporate and Tomsk Oblast. Social Responsibility and Charitable Activities; The topics of interacting with the stakeholders in the areas of the Company’s • Rules of procedure for conducting operational presence, promoting sustainable the contest of public-interest development of the local communities, projects; and implementing the program of social investment form a part of the agenda of the • Rules of procedure for sponsorship Company’s Board of Directors. activities (covering sponsorship of public-interest projects) On a day-to-day basis, these matters are under the purview of the Business support in the • Rules of procedure for conducting regions of presence function at the Corporate the contest of volunteering projects. COMMUNITIES LOCAL OF DEVELOPMENT THE TO CONTRIBUTION Center and its duly appointed representatives at the production sites that are folded into the Formula for Good Deeds program.
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Interactions with stakeholders: key issues in 2017
The Company’s interactions with its THE COMMON VALUES CONCEPT stakeholders on a broad range of issues concerning the Company’s involvement The Program's focus areas cover all key aspects of city life while reflecting the values that in the development of cities and local matter to everyone: communities are founded on the idea of common values and interests and assume that any party may act as the URBAN DEVELOPMENT CULTURE initiator and/or a participant of a public- interest project and make their contribution towards prosperity of their cities. A comfortable environment for living; Art and beauty surrounding us in our daily cities that are attractive to live and work in lives
112
EDUCATION ENVIRONMENTAL AND RESEARCH PROTECTION
The future for our children, opportunities Preserving the wildlife so that for creativity, for personal and professional we can pass it on undisturbed fulfillment to the future generations
SPORTS AND HEALTHY CONTRIBUTION TO THE DEVELOPMENT OF LOCAL COMMUNITIES LOCAL OF DEVELOPMENT THE TO CONTRIBUTION LIFE STYLE VOLUNTEERING
Healthy living, active lifestyle, Empathy and kindness towards living a long life each other
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In 2017, the main channels of communication Deeds program is under implementation, Corporate Communications function. with the stakeholders on the issues of and for correlating these problems with the Throughout the year, the councils’ meetings sustainable development, public-interest and themes of the applications sent to the grant discussed the topics of environmental charitable projects remained largely the same: contest and of the objectives of the ad hoc safety at the facilities, talent recruitment via electronic mail and the dedicated call line inter-regional projects. The study included from the local communities, compliance of the Formula for Good Deeds, the corporate reviewing the data from open sources and with the occupational health and safety charitable program, as well as through personal polling counterparties in the regions. standards, and meeting construction interactions during the program’s events. This deadlines. has since been augmented by another format: Based on the results of internal surveys of the carrying out surveys of internal and external functions and on the data obtained during the In 2017, Tobolsk undertook a project partners and counterparts in the regions. study, changes and adjustments were made to create a venue for creativity and for to the Rules of procedure for conducting social interactions, called #Artlab. At the year’s beginning, an internal survey the contest of public-interest projects, with Between July 17 and September 30, the was conducted targeting the representatives additional amendments scheduled to be venue hosted more than 150 culture- and of the Company’s key functions whose areas made to a number of the inter-regional education-themed events attended by more of responsibility were directly impacted projects. To wit, the education components than 1,200 Tobolsk residents. by the Formula for Good Deeds program: of the inter-regional projects in the areas of 113 Human Resources, Corporate University, Sport and Culture have been expanded all the 129 of the participants took part in a survey Corporate Communications, Corporate while augmenting the precision of the themes responding to questions about Tobolsk’s Culture. Representatives of the trade union of educational events. In addition, priorities most sought-after forms of cultural and were also polled. The purpose of the survey have been set for the activities carried out recreational activities, providing an insight was to identify these organizations’ goals, in the areas of Urban Development and into what types of events are completely attainment of which could be facilitated through Environmental Protection. lacking and what innovative projects the the implementation of public-interest projects residents themselves would be prepared and by means of adjusting priorities and The Company plans to conduct such studies to undertake on their own using the #Artlab focusing on the most pressing needs that ought on an annual basis to be able to monitor venue. The inputs obtained during the to be taken into consideration when dealing with changes and to assess the effectiveness poll were taken into account when putting the counterparts. of the projects and initiatives it undertakes. together plans for the various initiatives to be implemented in Tobolsk in 2018 as Surveying the Company’s functions became The public councils set up at the Tobolsk part of the Urban Development efforts. a starting point for conducting a large- Production Site and at the Amursky GPP, scale study of social problems affecting the continued to pursue their respective communities where the Formula for Good agendas under the stewardship of the
SURVEYS OF COUNTERPARTIES IN THE REGIONS: STATISTICS
115 ENTITIES FROM 16 CITIES UNDER THE FORMULA FOR GOOD DEEDS PROGRAM CONTRIBUTION TO THE DEVELOPMENT OF LOCAL COMMUNITIES LOCAL OF DEVELOPMENT THE TO CONTRIBUTION
59% 41% STATE-FUNDED ENTITIES NONPROFITS
31% 26% 17% 14% 9% 3% EDUCATIONAL INSTITUTIONS OF NON-PROFIT SPORT ENVIRONMENTAL CHARITABLE INSTITUTIONS CULTURE ORGANIZATIONS ORGANIZATIONS ORGANIZATIONS FOUNDATIONS
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Activities and results
The Formula for Good Deeds program’s GRANT CONTEST grant system and the project-based approach have made it possible to considerably improve the transparency and the efficiency of the Company’s social investments, and to bring its relations with partners and counterparties to a whole new level. The program’s overreaching objective remains unchanged — to promote sustainable and systematic development of a favorable urban environment that local residents would opt to work and live in.
51% 114 OF THOSE POLLED IDENTIFIED THE COMPANY'S INVOLVEMENT IN THE DEVELOPMENT OF LOCAL COMMUNITIES AS THE TOPIC OF MATERIAL SIGNIFICANCE1 The second annual contest of public-interest More than 130 projects emerged as the projects received 585 applications from winners in the following categories: Urban 15 of the cities where the Company has its Development, Education and Science, Sports operations. Tobolsk led the group with 137 and Healthy Living, Environmental Protection, projects applications. On top of the standard Culture, and Volunteering. selection process, the residents of Tobolsk were asked to vote for the projects of city- wide significance. Out of more the 40 projects applied for, the residents chose 14 which ultimately received financial backing from the Company. One more project was selected by the decision of the Public Council of the Tobolsk Production Site. The total number of votes cast in Tobolsk exceeded 9,000 (over 9 per cent of the city’s total population). CONTRIBUTION TO THE DEVELOPMENT OF LOCAL COMMUNITIES LOCAL OF DEVELOPMENT THE TO CONTRIBUTION
THE SECOND ANNUAL CONTEST OF PUBLIC-INTEREST PROJECTS RECEIVED >130 PROJECTS EMERGED AS THE WINNERS 585 APPLICATIONS FROM 15 OF THE CITIES WHERE THE COMPANY HAS ITS OPERATIONS
THE TOTAL NUMBER OF VOTES CAST TOBOLSK LED THE GROUP WITH IN TOBOLSK EXCEEDED
137 PROJECTS APPLICATIONS >9,000 1 According to the results of a survey of mass media representatives, beneficiaries, and partners in the regions.
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35 Urban Development projects were Educational establishments such Projects featuring sports have granted financial support. Grants were as universities, colleges, schools and traditionally performed strongly amongst used to clean up and improve common continuing education centers received other contest winners: out of 130 winning urban areas in the cities of Voronezh, 25 grants covering the topic of Education projects 38 are aiming to advance Muravlenko, Nizhnevartovsk, and Tobolsk, and Science. Throughout the year, sport and healthy living. In the cities and to renovate 4 offices housing social the grantees carried out 22 fun-filled where the Company is present grant services organizations in Gubkinsky, activities to popularize natural sciences, funding was used to hold various sports Krasnodar, and Tobolsk. Blagoveshchensk implemented 5 career guidance projects events including streetball (Voronezh), (Bashkortostan) hosted an advocacy to help recruit prospective enrollees ice hockey (Dzerzhinsk), basketball advertising contest Don’t Look the Other to the relevant institutions of higher (Blagoveshchensk, Bashkortostan), Way where winning entries were provided learning, retrofitted 7 classrooms and fencing (Togliatti) tournaments, etc. with ad space at the city’s traffic stops. laboratories to facilitate study of natural Additionally, 7 sportsgrounds were sciences. refurbished, and several secondary school gymnasiums redecorated. Three projects in Nizhegorodskaya Oblast and 115 in Tomsk focused on involving physically challenged children and adults in regular sport activities.
35 25 GRANTS 38 PROJECTS URBAN DEVELOPMENT PROJECTS COVERING THE TOPIC ARE AIMING TO ADVANCE SPORT WERE GRANTED FINANCIAL SUPPORT OF EDUCATION AND SCIENCE AND HEALTHY LIVING
During the Year of the Ecology, special In the field of Culture, the Company As far Volunteering goes, 6 projects emphasis was placed on environment- strives to facilitate the development emerged as the winners such as: related projects. The contest resulted of competitive homegrown culture inclusive events for handicapped children in 11 grants being released in support products. In 2017, grants were provided in Noyabrsk and Tobolsk, lessons of eco-awareness and conservation to fund the implementation of 15 local of kindness towards homeless animals projects. In Tobolsk, the funds from projects in the area of culture. The in Tobolsk, a volunteering school for the grant were used to create an out- winners included contests for gifted people over 55 by the Older Generation, COMMUNITIES LOCAL OF DEVELOPMENT THE TO CONTRIBUTION of-doors Green Classroom. Perm and children in Blagoveshchensk and a Tyumen-based NGO, and others. Nizhnevartovsk had new bike trails built. Nizhnevartovsk, a Tomsk-based festival Voronezh organized an environment- titled A Theater in a Pocket, building themed training trip for students an apparel collection for the Fashion of the Kisselev Voronezh Training and Theater in Tobolsk. Education Center while Gubkinsky saw a youth eco-patrol set up.
11 GRANTS 15 LOCAL PROJECTS 6 PROJECTS WERE RELEASED IN SUPPORT OF IN THE AREA OF CULTURE EMERGED AS THE WINNERS ECO-AWARENESS AND CONSERVATION PROJECTS IN THE AREA OF VOLUNTEERING
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INTER-REGIONAL PROJECTS THE FOLLOWING INTER-REGIONAL PROJECTS WERE IMPLEMENTED IN 2017: In addition to the projects selected in the course of the contest, the Formula for Focus area Focus area Good Deeds program serves as a platform URBAN DEVELOPMENT: EDUCATION AND SCIENCE: for implementing inter-regional projects 1 inter-regional project 6 inter-regional projects spanning several of the regions where the Company has established its presence A project titled A pull-up bar for every 125 teachers from 63 cities attended the Fourth allowing to focus on the most pressing court made it possible to have 3 world- All-Russian Conference of Chemistry, Biology development priorities in a comprehensive class outdoor gym stations installed in and Ecology Teachers — Project Activities at manner. Blagoveshchensk, Kstovo and Tomsk. School: Motivation, Content, Methodologies, held in Sochi on March 2-7, 2017.
With the sponsorship support from the % Company, Ufa hosted the final round of the 86 Mendeleev contest of young researchers OF THOSE POLLED 116 IDENTIFIED CHARITABLE AND bringing together 93 young scientist from SPONSORSHIP PROJECTS 30 universities and 20 cities. 28 of them AS THE TOPIC OF MATERIAL emerged as the contest winners. SIGNIFICANCE1
The I Love Science master classes held in Blagoveshchensk, Kstovo, Noyabrsk and Perm were attended by more than 200 teachers and 580 schoolchildren aged 10 to 16.
The I Love Science Festival took place in five cities including Voronezh, Kstovo, Nyagan, Svobodny, and Togliatti. The Festival’s updated program covered mathematics, physics, chemistry and cross-curricular disciplines. The total number of participants exceeded 14,000.
With SIBUR’s support, the cities of Tobolsk and Tomsk hosted the Festival of Contemporary Science Films (FUNK) which was attended by more than 4,500 spectators. Viewings of films focusing on science, technologies, legendary scientists CONTRIBUTION TO THE DEVELOPMENT OF LOCAL COMMUNITIES LOCAL OF DEVELOPMENT THE TO CONTRIBUTION and inventors were accompanied by open lectures, discussions, and science shows.
2017 saw a new format introduced — the so-called Science Sessions, educational summer camps for schoolchildren aged 9-13 held in Dzerzhinsk, Nizhnevartovsk, Tobolsk, and Togliatti. The Science Sessions hosted 598 schoolchidren, with 24 teachers receiving training on experimental training methods focusing on unleashing the potential of every child.
1 According to the results of a survey of mass media representatives, beneficiaries, and partners in the regions.
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Focus area Focus area Focus area SPORTS AND HEALTHY LIVING: CULTURE: VOLUNTEERING:
The Basketball School program bringing Creating a Tobolsk-based experimental together all of the Company’s projects in venue for innovation and for socializing, support of basketball. Within the framework called #Artlab. Between July and September, of the Basketball School, SIBUR, together with the venue hosted more than 150 events, its partners from the Unified VTB League and including a Drawing School for local city BC Zenit, organized a #SIBURCAMP summer residents, projects aimed at professional camp and a SIBUR-Zenit school for young artists titled Portfolio Revue and Art-grade, athletes from the regions of SIBUR’s presence. an exhibition about the History of Russian At the regional stages of the project, 1,050 Design Between 1917 and 2017, lectures athletes aged 12 to 16 took part in the project by guest experts, and poetry soirees. with the methodology seminars attended by 330 coaches. As part of a joint effort with the A joint project with the State Theater Under the Flag of Kindness — charity soccer 117 NBA, Tyumen and Blagoveshchensk had its of Nations: the theater made guest games featuring celebrity athletes, film and basketball courts rebuilt and fitted with state- appearances in Dzerzhinsk, Kstovo, Tobolsk, showbiz stars took place in Dzerzhinsk, of-the-art equipment, whereas Voronezh saw and KhMAO. On May 25 through June 1, Svobodny, Tobolsk, and Tyumen. the inauguration of a new Street Basketball the theater conducted, with the support from Center. SIBUR, a Festival of Theaters from Russia’s small cities. Another project named Common Sense included practice sessions in 18 different A joint project with Territoria, the sport categories. Open training sessions led international festival-school: art laboratories by renowned athletes and coaches took place led by celebrity directors, playwrights and in eight cities where the Company is present choreographers were held in Voronezh, and were attended by more than 15,000 Dzerzhinsk, Kstovo, Perm, Tobolsk, Tomsk, participants. In addition to the regular training and KhMAO. sessions, Perm and Togliatti hosted the extreme Character of Steel running races.
Sibur Dance Fest, a multi-format dance festival, took place in Nizhnevartovsk and Tobolsk becoming a notable feature of both the athletic and the cultural scenes. More than 360 dancers took part in the master classes offered by renowned dancers culminating in gala concerts for the cities’ residents. COMMUNITIES LOCAL OF DEVELOPMENT THE TO CONTRIBUTION 60 volunteers helped organize the festivals.
Good Football, a series of soccer competitions for children aged 11-12, included city-level tournaments in four cities: Blagoveshchensk (Bashkortostan), Dzerzhinsk, Nizhnevartovsk, and Tobolsk, with the final round taking place in Tobolsk. A total of 300 young soccer players took to the pitch with more than 600 spectators looking on. Eight coaches attended methodology seminars.
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CORPORATE VOLUNTEERING SOME STATISTICS ABOUT THE IMPLEMENTATION OF THE CORPORATE VOLUNTEERING PROGRAM IN SEPTEMBER THROUGH DECEMBER 2017: The highlight of 2017 was the launch, in September, of a dedicated program for corporate volunteers under the auspices of the Formula for Good Deeds program. 23 CITIES 3 TRAINING SEMINARS This step was made in response to numerous FROM KURSK TO SVOBODNY FOR VOLUNTEERS FROM MOSCOW, requests coming to the Formula for Good PERM, AND NIZHEGORODSKAYA OBLAST Deeds from employees of the Corporate Center and from production sites. >100 51 APPLICATIONS REGISTERED USERS ON SIBUR’S TO PARTICIPATE IN THE VOLUNTEER PROJECTS’ VOLUNTEERING PORTAL CONTEST INVOLVING 16 CITIES
41% OF THOSE POLLED IDENTIFIED VOLUNTEER PROJECTS 20 USERS 118 VOLUNTEER ACTIVITIES >250 RECEIVED THE COMPANY’S SUPPORT BY THE STAFF AS THE TOPIC OF THE SOCIAL NETWORK FOR VOLUNTEERS OF MATERIAL IN THE FORM OF GRANTS SIGNIFICANCE1
The program gives volunteers an opportunity to either suggest a project of their own and move on to implement one with the Company’s and coworkers’ support, or, alternatively, opt to take part in various company-wide activities.
Working on their own, winners of In their respective cities, SIBUR's corporate volunteer contests have arranged volunteers act as the "ambassadors" of the environmental awareness events and Company in general and of the Formula for eco-lessons (in Dzerzhinsk, Kstovo, and Good Deeds program in particular, setting an Togliatti), held festivals and fun-filled example of supporting the underprivileged, of master classes for children in hospitals providing responsible care for people in need, and at orphanages (in Blagoveshchensk and of making a personal contribution to (Bashkortostan), Krasnodar, Noyabrsk, improving the quality of living in their cities. and Muravlenko), repaired enclosures for stray animals at animal shelters (two EMPLOYEES projects in Moscow), helped improve a bird 64 park in Togliatti, and started a mobility OF THE CORPORATE CENTER DONATED The corporate volunteering program is service to transport senior citizens to THEIR BLOOD TO PATIENTS OF THE BAKULEV CARDIOVASCULAR SURGERY CENTER being implemented through several formats healthcare facilities in Tobolsk. such as a grant contest for volunteers, CONTRIBUTION TO THE DEVELOPMENT OF LOCAL COMMUNITIES LOCAL OF DEVELOPMENT THE TO CONTRIBUTION company-wide events, social media groups, In 2017, the Company lead an initiative 1,236 GIFTS and educational activities. All of these are to raise funds for video questionnaires COLLECTED IN THE COURSE OF THE BECOME A designed to help support those important for the orphaned children sponsored FATHER CHRISTMAS CAMPAIGN FOR CHILDREN initiatives that are spearheaded and by the Change A Life foundation. FROM 13 CITIES: Blagoveshchensk, Voronezh, implemented by SIBUR’s employees for the Staff of the Moscow-based Corporate Dzerzhinsk, Krasnodar, Kstovo, Nizhny Novgorod, Nizhnevartovsk, Perm, Svobodny, benefit of their communities. Center volunteered to make blood Tobolsk, Togliatti, Tomsk, Tyumen. donations. Company workers organized “marathons” to collect warm clothing for the disadvantaged (Make Them Warm) WARM CLOTHES CONTAINERS and to collect gifts for children in dire 50 circumstances — Become a Father COLLECTED AS THE RESULT OF THE MAKE THEM WARM CAMPAIGN IN 7 CITIES: Voronezh, Nizhny Christmas. Novgorod, Krasnodar, Moscow, Perm, Tobolsk, Tomsk
1 According to the results of a survey of mass media representatives, beneficiaries, and partners in the regions.
SIBUR Sustainability Report 2017 www.sibur.ru/en THE COMPANY STRATEGY AND GOVERNANCE CREATING VALUE SAFE PRODUCTION HUMAN CAPITAL LOCAL COMMUNITIES
2017 results
6 130 GRANTS 89.3 MLN RUB FOCUS AREAS ISSUED IN THE LOCAL COMMUNITIES TOTAL GRANT AMOUNT
119
>1,500 >2,000 14 EVENTS MENTIONS IN THE MEDIA SPECIAL PROJECTS CONTRIBUTION TO THE DEVELOPMENT OF LOCAL COMMUNITIES LOCAL OF DEVELOPMENT THE TO CONTRIBUTION
>50,000 >4,000 EVENT PARTICIPANTS EMPLOYEE PARTICIPANTS
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Public recognition
FORMULA FOR GOOD DEEDS PROGRAM:
Winner of the top prize in the Charity ST category at the Russia’s Best Projects 1 PLACE Contest. IN THE NOMINATION BY THE RUSSIAN FEDERATION MINISTRY OF ECONOMIC DEVELOPMENT TITLED BEST PROGRAM FOSTERING THE DEVELOPMENT OF THE INFRASTRUCTURE FOR NON-PROFIT ORGANIZATIONS, CHARITY AND VOLUNTEERING IN THE REGIONS OF THE COMPANY’S PRESENCE
The nomination is a part of the annual contest conducted jointly by the Association of Grantmakers (The Donors’ Forum), the 120 newspaper, and PWC.
JOINT SIBUR-NBA PROGRAM:
RD ACKNOWLEDGEMENTS: 3 PLACE IN THE SOCIAL PROJECT NOMINATION AT THE BEMA FESTIVAL >600 LETTERS OF APPRECIATION SENT IN FOLLOWING THE IMPLEMENTATION OF REGIONAL-LEVEL AND INTER-REGIONAL PROJECTS
ART LABORATORY, TOBOLSK Plays titled Tobolsk: The Wall of Fame and Listen, Tobolsk created with SIBUR’s
CONTRIBUTION TO THE DEVELOPMENT OF LOCAL COMMUNITIES LOCAL OF DEVELOPMENT THE TO CONTRIBUTION support under the auspices of the Territoria festival got on the long list of the Golden Mask, the National Theater Award.
SIBUR Sustainability Report 2017 www.sibur.ru/en THE COMPANY STRATEGY AND GOVERNANCE CREATING VALUE SAFE PRODUCTION HUMAN CAPITAL LOCAL COMMUNITIES
2018 targets
STRATEGIC FOR REGIONAL-LEVEL PROJECTS
Build active and responsible communities in the regions of Launch a dedicated grant program for schools to furnish presence bringing together the Company itself, its employees, classrooms with the equipment needed to facilitate study of exact partners, counterparts, and residents, all adhering to common values. and natural sciences.
121 Expand the expertise of our partners and counterparties, help Develop an effective methodology for evaluating grant projects’ them further enhance the needed skills and competencies. robustness and performance.
FOR THE CORPORATE VOLUNTEERING PROGRAM FOR INTER-REGIONAL PROJECTS
Transfer the required skills of social project management Perfect the mechanisms used for implementing long-term and teamwork to the corporate volunteers. inter-regional programs run within the framework of education and culture programs. COMMUNITIES LOCAL OF DEVELOPMENT THE TO CONTRIBUTION
Ensure that volunteering projects’ results are sustainable.
www.sibur.ruwww.sibur.ru/en Sustainability Report 2017 SIBUR GLOSSARY OF TERMS THE MATRIX OF MATERIAL TOPICS TABLE OF GRI DISCLOSURES
Glossary of Terms
Term Expansion Definition
Global Reporting Initiative is an international organization whose main GRI Global Reporting Initiative goals include development and implementation of an authoritative and credible framework for sustainability reporting.
EBITDA Earnings before interest, taxes, depreciation and amortization.
The number of lost time injuries taken relative to the total time worked LTIF Lost time injury frequency and calculated per 1 million man-hours worked.
All individuals and legal persons who have the ability to influence Stakeholders operations of the Company or are themselves influenced by it.
Corporate Center Management company PJSC SIBUR Holding headquartered in Moscow.
The Company’s responsibility not only for the economic but also for the CSR Corporate social responsibility environmental and social impact of its operations. 122 Regions of presence/presence Constituent regions of the Russian Federation where PJSC SIBUR Holding regions conducts its business operations.
The Company’s financial contributions towards sustainable development of its presence regions in order to create favorable conditions
ANNEXES Social investments for developing the Company’s business including minimization of economic, social, environmental and reputation risks.
The model of business and society development that while allowing SD Sustainable development to meet the needs of the present does not compromise the ability of future generations to meet their own needs.
A set of goals for future international cooperation that, at the end of 2015, replaced the Millennium Development Goals. These goals are expected United Nations Sustainable SDG to be achieved between 2015 and 2030. The final document entitled Development Goals Transforming our world: the 2030 Agenda for Sustainable Development outlines 17 global goals and 169 associated targets.
SIBUR Sustainability Report 2017 www.sibur.ru/en THE MATRIX OF MATERIAL TOPICS МАТРИЦА СУЩЕСТВЕННЫХ ТЕМ TABLE OF GRI DISCLOSURES
The Matrix of Material Topics1
LIST OF MATERIAL TOPICS
1. Economic performance 23 14 2. Innovation 12 4 8 3. Investments 24 7 1
4. Risk management 11 5 9 5. Ethics and anti-corruption 13 2 Relations with suppliers 6. 3 and contractors (supply chain) 21 16 123 10 18 6 7. Sustainable development strategy 15 17 20 19 22
8. Safety at work stakeholders for Materiality ANNEXES 9. Industrial injuries 25
10. Occupational health
11. Protection of water resources Materiality for the Company 12. Air pollution control
13. Effluents and waste 18. Personnel training and development Contribution to developing 23. presence regions 14. Environmental impact reduction 19. Recruitment of young staff
Developing partnerships 15. Energy saving and energy efficiency 20. Equal rights for men and women 24. with local communities
16. Human resources policies 21. Labor union engagement Rights of indigenous 25. 17. Remuneration and benefits 22. Employer brand and small-numbered peoples
1 Tools for gathering information underpinning this Matrix are described in the About this Report section, p. 4
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Table of GRI disclosures (an Index of standard reporting elements)
GRI Disclosure Page in the Report Comment GENERAL DISCLOSURE GRI 101: General information about the Report 4 GRI 102: Organizational profile 102-1 Name of the organization 10, 12 102-2 Activities, brands, products, and services 10, 12-13 102-3 Location of headquarters Russian Federation, 117292, Moscow, ul. Krzhizhanovskogo, 16/1 102-4 Location of operations 14-15 102-5 Ownership and legal form 10, 12 102-6 Markets served 14-15 102-7 Scale of the organization 14-15 102-8 Information on employees and other workers 96 124 102-9 Supply chain 28 102-10 Significant changes to the organization and its supply chain — The Precautionary Principle is one the key principles our Company 102-11 Precautionary Principle or approach follows.
ANNEXES 102-12 External initiatives 78 The Company is a member of the Russian Chemists’ Union, 102-13 Membership of associations and ARPET, the Non-Profit Partnership for the Development of the Polyethyleneterephthalate Industry, World Plastic Council, etc. 102-14 Statement from senior decision-makers 6-7, 24, 39, 40, 48, 71 102-15 Key impacts, risks, and opportunities 24-25, 31-33, 40, 52-53 20-21, 29, 44-45, 52-53, 55, 60, 61, 102-16 Values, principles, standards, and norms of behavior 67, 82, 91, 111, 112 102-17 Mechanisms for advice and concerns about ethics 27 102-18 Governance structure 22-23 102-19 Delegating authority 22-23 102-20 Executive-level responsibility for economic, 6, 40, 48, 68, 71 environmental, and social topics 102-22 Composition of the highest governance body and its See the Company’s 2017 Annual Report pp. 85-102 committees 102-23 Chair of the highest governance body See the Company’s 2017 Annual Report, pp. 83 102-24 Nominating and selecting the highest governance body See the Company’s 2017 Annual Report, pp. 84 102-25 Conflicts of interest See the Company’s 2017 Annual Report, pp.102-103 102-26 Role of highest governance body in setting purpose, See the Company’s 2017 Annual Report, pp.84-86 values, and strategy 102-27 Collective knowledge of highest governance body See the Company’s 2017 Annual Report, pp. 85-87 102-28 Evaluating the highest governance body’s performance See the Company’s 2017 Annual Report, pp. 85-87 102-29 Identifying and managing economic, environmental, and See the Company’s 2017 Annual Report, pp. 85-87 social impacts Additionally: see the Annual 102-30 Effectiveness of risk management processes 24-25 Report, pp. 106-111 102-31 Review of economic, environmental, and social topics 23 The Report was approved by the Company’s highest governance 102-32 Highest governance body’s role in sustainability reporting body
SIBUR Sustainability Report 2017 www.sibur.ru/en GLOSSARY OF TERMS THE MATRIX OF MATERIAL TOPICS TABLE OF GRI DISCLOSURES
102-33 Communicating critical concerns See the Company’s 2017 Annual Report, pp. 82-87 102-34 Nature and total number of critical concerns See the Company’s 2017 Annual Report, pp. 86-87 102-35 Remuneration policies See the Company’s 2017 Annual Report, pp. 87 102-36 Process for determining remuneration See the Company’s 2017 Annual Report, pp. 87 102-37 Stakeholders’ involvement in remuneration See the Company’s 2017 Annual Report, pp. 87 102-38 Annual total compensation ratio Not disclosed based on the principle of personal data protection 102-39 Percentage increase in annual total compensation ratio — 102-40 List of stakeholder groups 31-33 102-41 Collective bargaining agreements 105 102-42 Identifying and selecting stakeholders 31-33 102-43 Approach to stakeholder engagement 31-33 102-44 Key topics and concerns raised 31-33, 68, 69, 83, 95, 112, 114 102-45 Entities included in the consolidated financial statements See the Company’s 2017 Annual Report, pp. 36-37 125 102-46 Defining report content and topic boundaries 4 102-47 List of material topics 123 102-48 48 Restatements of information None 102-49 Changes in reporting None ANNEXES 102-50 Reporting period 2017 102-51 Date of most recent report August 2017 102-52 Reporting cycle annually 102-53 Contact point for questions regarding the report Dzuro, Natalia Alexandrovna, Corporate Communications Block 102-54 Claims of reporting in accordance with the GRI Core Standards: Core or Comprehensive 102-55 GRI content index 125-129 102-56 External assurance 124 102-56 EXTERNAL ASSURANCE GRI 201: Economic performance 201-1 Direct economic value generated and distributed 16, 36-39 201-2 Financial implications and other risks and opportunities 26, 52-53 due to climate change 201-3 Defined benefit plan obligations and other retirement Not applicable plans The Company did not receive financial assistance from 201-4 Financial assistance received from government the government in 2017 GRI 202: Market presence 202-1 Ratios of standard entry level wage by gender compared to The level of pay at all Company’s facilities is consistent with local minimum wage the average pay across the industry’s labor market GRI 203: Indirect economic impacts 203-1 Infrastructure investments and services supported 110, 114-119 203-2 Significant indirect economic impacts 40, 110, 114-119 GRI 204: Proportion of spending on local suppliers 6, 37, 38 Partial disclosure
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GRI 205: Anti-corruption 205-1 Operations assessed for risks related to corruption 27 205-2 Communication and training about anti-corruption policies 27 and procedures 205-3 Confirmed incidents of corruption and actions taken No incidents of corruption were discovered in 2017 No cases of anti-competitive behavior involving the Company GRI 206: Anti-competitive Behavior or its subsidiaries were discovered in 2017 ENVIRONMENTAL TOPICS GRI 302: Energy 302-1 Energy consumption within the organization 84 302-2 Energy consumption outside of the organization Not accounted for due to lack of legal requirements 302-3 Energy intensity 84 126 302-4 Reduction of energy consumption 80-82, 84 302-5 Reductions in energy requirements of products and 84 services GRI 303: Water ANNEXES 303-1 Water withdrawal by source 71 Partial disclosure 303-2 Water sources significantly affected by withdrawal of water 72 GRI 304: Biodiversity 304-1 Operational sites owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside None protected areas 304-2 Significant impacts of activities, products, and services on 70, 71-72 biodiversity 304-3 Habitats protected or restored 70, 72, 75 304-4 IUCN Red List species and national conservation list — species with habitats in areas affected by operations GRI 305: Emissions 305-1 Direct (Scope 1) GHG emissions 73 In 2017, due to an increase in output volume, GHG emissions were 305-5 Reduction of GHG emissions not reduced GRI 306: Effluents and waste 306-1 Water discharge by quality and destination 72 disclosure 306-2 Waste by type and disposal method 75 306-3 Significant spills 72 306-4 Transport of hazardous waste The Company did not transport any hazardous waste in 2017 306-5 Water bodies affected by water discharges and/or runoff 72 SOCIAL TOPICS GRI 401: Employment 401-1 New employee hires and employee turnover 96 401-2 Benefits provided to full-time employees that are not 98-99 provided to temporary or part-time employees
SIBUR Sustainability Report 2017 www.sibur.ru/en GLOSSARY OF TERMS THE MATRIX OF MATERIAL TOPICS TABLE OF GRI DISCLOSURES
In keeping with Russia’s Labor Code, the agreement specifies minimum notice periods for notifying employment authorities GRI 402: Minimum notice periods regarding operational and the elected body of the initial-level union organization prior changes and whether this is specified in the collective to initiating applicable actions: at least two months prior to such bargaining agreement actions, or, if the decision to downsize workforce could lead to massive layoffs, at least three months in advance of such actions GRI 403: Occupational health and safety 403-1 Workers representation in formal joint management– 61 worker health and safety committees 403-2 Types of injury and rates of injury, occupational diseases, lost days, and absenteeism, and number of work-related 54, 57, 62 fatalities 403-3 Workers with high incidence or high risk of diseases 63 related to their occupation 403-4 Health and safety topics covered in formal agreements 61, 105 127 with trade unions GRI 404: Training and education 404-1 Average hours of training per year per employee 102
404-2 Programs for upgrading employee skills and transition ANNEXES 102-103 assistance programs 404-3 Percentage of employees receiving regular performance 104 and career development reviews GRI 405: Diversity and equal opportunity
405-1 Diversity of governance bodies and employees 96 405-2 Ratio of basic salary and remuneration of women to men The level of pay in the Company does not depend on gender No incidents of discrimination in the workplace were reported GRI 406: Non-discrimination in the Company in 2017 GRI 407: Freedom of Association and Collective Bargaining 105 GRI 410: Security practices 410-1 Security personnel trained in human rights policies or All members of the Company’s security organization receive procedures training in human rights policies The Company’s operations in the areas settled by indigenous and small-numbered peoples (YNAO, KhMAO, Ust-Luga) GRI 411: Rights of indigenous peoples do not affect the settlements and/or the livelihood of these peoples and do not infringe on their rights GRI 413: Local communities 413-1 Operations with local community engagement, impact 114-119 assessments, and development programs 413-2 Operations with significant actual and potential negative There is a risk of negative impact on the environment. impacts on local communities The Company is taking steps to mitigate such risk GRI 414: Supplier social assessment 414-2 Negative social impacts in the supply chain and actions No negative social impacts detected in 2017 taken The Company does not participate in political activities nor does GRI 415: Public policy including financial contributions it provide any funding for political purposes. GRI 419: Socioeconomic Compliance Zero violations in 2017
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CORPORATE COMMUNICATIONS
Moscow, ul. Krzhizhanovskogo, 16/1
Phone/Fax: +7 (495) 937-17-26 E-mail: [email protected]
WEBSITE
http://www.sibur.ru/
128 (Russian version)
http://www.sibur.ru/en/
(English version) ANNEXES
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