GROWING TOGETHER

2016 Sustainability Report “We have shown, and will continue to do so, that Sicily can accommodate a stable, competitive and sustainable industry with a high degree of technology.

Our forward-looking attitude is an integral part of the Milazzo community and we see this as a driver for growth, creating new opportunities for well-being and investment”.

Alessandro Gilotti President of RAM Raffineria di Milazzo Index 4. THE ENVIRONMENT, A CONSTANT COMMITMENT 19 TO ITS PROTECTION 4.1 Investments for the environment 56 4.5 Energy 62 LETTER FROM THE PRESIDENT 6 4.2 Air 58 4.6 Waste products 63 RAM IN NUMBERS 8 4.3 Greenhouse gases 59 4.7 Environmental monitoring and controls 65 4.4 Water 60 1. SUSTAINABILITY ACCORDING TO RAM

1.1 Principles and criteria of reporting 12 1.2 Approach towards sustainability 13 1.3 Commitment to sustainability 14 1.4 Materiality analysis 15 1.5 Materiality matrix 16 1.6 Management system and code of ethics 17 55 11 2. RAM: A COMPANY WHICH 5. RELATIONS WITH LOOKS TO THE FUTURE 67 THE LOCAL COMMUNITY, 2.1 An overview of the Raffineria di Milazzo 20 WELL-BEING FOR ALL 2.2 Our Governance 22 5.1 Valorising cultural promotion 69 2.3 Our process of development 24 5.2 Valorising social commitment 70 2.4 Our people: the daily driver of innovation 26 5.3 Valorising education in sport 70 2.5 Technology in action: the production cycle 5.4 Valorising the safeguarding of health 72 and finished products 32 2.6 Investments, the fuel for our future 36 5.5 Valorising education for young people 73 2.7 Marine logistics 40 5.6 Institutional relations 74 5.7 Union relations 75 5.8 Transparency and sharing 75 3. SAFETY, A SYSTEM 6. PROMOTING GROWTH OF ELEVATED 43 6.1 Distribution of added economic value 78 77 STANDARDS 6.2 Our correlated activities, working together to be competitive 80 3.1 Accidents, RAM wins 6 - 0 44 6.3 The distribution of values amongst local 3.2 Investments for safety 45 enterprises 82 3.3 Plant safety: a system 6.4 Port activities 84 characterised by excellence 47 3.4 Maintenance 49 APPENDIX 3.5 The main Turnaround 50 3.6 Protocol for the protection Management systems and certification 88 of health 52 Committees and sub-committees 89 Main indicators of sustainability 90 Table of GRI correspondence 92 Auditor’s report 96

4 | 2016 Sustainability Report 5 LETTER FROM THE PRESIDENT

and competence our people display every day. We have reached the milestone of one billion euros In this Report, we also reflect on our actions taken Foremost amongst these are our employees, but of investment over 15 years, a figure especially to support the community. Our collaboration with our chain of suppliers also play an increasingly significant. schools, universities and the educational world, important role in enabling us to set ambitious which is an ongoing part of our programme, has objectives for sustainability. We are also particularly proud of our record of six been particularly strong. years of accident-free activity. This is the result of On average, more than 1,000 contractors work in increasingly high safety standards, which we have This year we again supported the Milazzo-Aeolian our plant every day, demonstrating the high scale perfected over the years, and the exceptional level Islands branch of the Italian Red Cross. This not of our activity. We have shown, and will continue of care taken by our people in relation to safety. only raises awareness of health issues amonst to do so, that Sicily can accommodate a stable, the local community, but also creates a positive competitive and sustainable industry with a high This result is even more impressive if one spirit of citizenship which we consider extremely degree of technology. considers that, in 2016, we carried out a turnaround beneficial on a social level. maintenance programme which involved almost Our forward-looking attitude is an integral part 2,000 people on average working in our plant In summary, this Report is not just about numbers of the Milazzo community and we see this as a each day during this period, in addition to our own and performance, but also the passion, dedication It is with great satisfaction that we showcase, in driver for growth, creating new opportunities personnel. and responsibility which we apply every day to this our sixth Sustainability Report, our tangible for well-being and investment. At the same time support the community and the environment, of and positive commitment to our area of operation it confirms our determination to protect the Our safety initiatives have also included building a which we are guests. and ecosystem. safety and well-being of the local people and new fire station and purchasing a state of the art environment, which is an essential requisite of a fire truck, confirming our commitment to constantly Alessandro Gilotti Health, safety and environmental protection is long-term project. modernising equipment to successfully manage any President of RAM part of our DNA and forms the foundation of the risks that may arise. agreement signed by our shareholders which has Maintaining employment levels in the area is a high created the company you see today. Our journey priority; an example of this was our acquistion in The extremely positive results related to the of growth has led us to achieve industrial 2016 of Termica di Milazzo, a thermal electric plant, environment which we achieved in 2016, confirm excellence, which is recognised internationally when we retained its entire workforce. the wisdom of our decision to invest substantially and places us in the global ‘Champions League’ for in this area. plants of this type. 2016 was characterised by further progress in developing the safety and sustainability of our Renewing some plants and introducing new These excellent results have been achieved plant. Constant improvements were made possible technology has provided significant results in thanks to our ongoing focus on innovation and by our propensity for investment and will provide terms of reducing emissions, as well as water and continuous improvement, backed by the passion strong benefits over time. energy consumption.

6 | 2016 Sustainability Report 7 624 RAM employees ZERO Find out more on page RAM 43 of this document. 99% WORK-RELATED Chapter 3 - Safety Of personnel with indefinite IN NUMBERS term contracts INCIDENTS IN THE 48.1 LAST 6 YEARS Million euros spent on personnel 9.4 1,972 Average daily presence Million tons of third-party company staff of processed product during the turnaround 88.9 97% Million euros of RAM personnel originating in investments from the Province of Messina 110.1 24% Million euros spent of the national demand with Sicily-based suppliers for petrol satisfied 62.5 15% Million euros spent with of the national demand suppliers from the province for diesel satisfied of Messina

8 | 2016 Sustainability Report 9 1 SUSTAINABILITY ACCORDING TO RAM

1.1 Principles and criteria of reporting 12 1.2 Approach towards sustainability 13 1.3 Commitment to sustainability 14 1.4 Materiality analysis 15 1.5 Materiality matrix 16 1.6 Management system and code of ethics 17

10 | 2016 Sustainability Report 11 1. Sustainability according to RAM

1.2 1.1 PRINCIPLES AND CRITERIA APPROACH OF REPORTING TOWARDS SUSTAINABILITY

THE BOUNDARIES THE REFINERY Our vision is the production of high-quality combustibles and fuels through the most modern and innovative technology, as well as with motivated and professional human resources, in full respect for the environment and the health and safety of people. As our development is based on our capacity to innovate, and therefore to keep our company active over time, sustainability is a fundamental aspect for us. A company which adopts socially responsible behaviour, monitoring and responding to the economic, environmental and social aspects of all The Raffineria di Milazzo (RAM) Sustainability established and owned by Raffineria di Milazzo SCpA parties involved, also aims to obtain a competitive Report, now in its sixth edition, is published on and Termica Milazzo Srl, acquired in 2016, is to advantage. a yearly basis and forms the main method of be considered as excluded from the analysis. Our This is why our Sustainability Report is of particular communication with stakeholders regarding the 2016 report has been drawn up according to the importance in reporting on our activity in this field economic, social and environmental performance principles indicated by the GRI - Global Reporting and developing a constructive and reciprocally of the company. Initiative, following the GRI-G4 guidelines, with an beneficial relationship with our stakeholders. The aim of this document is to provide evidence of “in accordance - core” level of adhesion, and the In our case, sustainability is achieved through the assumption of responsibility of our company, applicable supplements included in the Oil & Gas the integration of social and environmental which operates in a highly technological field, sector, which allow for the illustration of results requirements into company procedures and focused on the future, and in close contact with the and effects which have characterised the period practices, with actions for the protection of the community. of accounting regarding undertakings, strategies environment, constructing relations with the The Refinery is in fact continuously called on to and methodology for organisation management. territory, contributing to, and participating in, the adapt to Best Available Techniques (BAT), which The data and information required by the solving of problems, investing in human capital, requires a constant investment. indicators included in the SSD - Specific Standard and carefully selecting suppliers. Disclosure - were collected during interviews with In this sense, in the community where we are The 2016 Sustainability Report also illustrates the company managers and calibrated according to located, we are committed to developing: actions carried out for the protection of employees, the GRI - G4 indicators. Information relating to the • an articulated company policy for Health- the environment and the community, aimed at DMA - Disclosure on Management Approach - has Safety-Environment and Energy creating a model of sustainable development, been taken from verbatim accounts and comments • a policy for Quality transparency, and dialogue with the local regarding the various aspects of the report. • annual and multi-year investment programmes population. which are aimed not only at an increase in The Sustainability Report is subject to the approval production, but above all at a continuous The perimeters of accounting analysed take into of the Board of directors and is presented during improvement in the field of Health-Safety- consideration the activities carried out by Raffineria the shareholders’ meeting together with the Environment and Energy di Milazzo SCpA in 2016. In order to maintain the consolidated financial statements; it is subject to • a programme of external communication and same perimeters of accounting as last year for this external independent verification by the auditing relations based on the principles of openness, edition, Servizi, Milazzo Srl, a company entirely company PriceWaterhouseCoopers. transparency and dialogue.

12 | 2016 Sustainability Report 13 1. Sustainability according to RAM

1.3 1.4 COMMITMENT MATERIALITY TO SUSTAINABILITY ANALYSIS

The construction of our Sustainability Report is of sustainability and expectations which are based on a process of materiality analysis on order relevant for the company and its stakeholders. to map and organise in order of priority the themes

OUR STAKEHOLDERS

Environmental Trade unions organizations Employees Institutions

Schools and universities Civil and local Press Suppliers societies

This analysis has allowed us to identify the aspects In 2016 we confirmed our committment towards which are considered material, or rather which are themes such as: of significant impact for the organisation from an • the safety of persons and attention towards economic, environmental and social point of view, the maintenance of production plants, seen and which have a substantial influence on the as an instrument for the safeguarding of evaluations and decisions of the stakeholders. workers and the surrounding territory • the role of the Refinery within a wider-ranging The methodology includes interviews with function production system, also in relation to the managers in our company in order to identify company’s plans for the development of the typically organisational aspects, and an analysis of Valle del Mela the social-economic context in which we operate, • the Refinery as a model and ecosystem of using analysis of media monitoring has allowed us advanced technology For our company, ethical behaviour is manifested stakeholders its own organisation and resources: to identify themes of interest which concern the • the role of environmental monitoring and through daily commitment, the result of a precise • technical-professional resources (plants, activities of the organisation. the results communicated, in terms of managerial policy and a company system organised equipment, internal training and training for awareness of the efforts of the company and to focus on this objective. Schools and Universities, professionalism, etc.) The materiality matrix integrates the results of the the objectives reached regarding this theme. In RAM’s management system, the development of • economic resources (coherent investment plans, interviews with an analysis of the impact of themes positive relations with stakeholders is an element of carrying out of socially relevant works, etc.) of sustainability on company policies. There was also a event of programmed added value. • social-relational resources (communication maintenance, a Main Turnaround, relevant for In order to carry forward its policies of social projects, external relations, social involvement its important influence on employment levels. responsibility, RAM places at the disposition of etc.).

14 | 2016 Sustainability Report 15 1. Sustainability according to RAM

1.5 1.6 MATERIALITY MATRIX MANAGEMENT SYSTEM

Top right is a list of the themes considered as high for the local territory, odours, relations with priority both for external and internal stakeholders schools, safeguarding of health, suppliers, ethics, AND CODE OF ETHICS (in other words employees). In particular: communication. investments, training of training, initiatives Our idea of sustainability is based on respect for the Within the 231 Model, the Code of Ethics defines the environment, safety at work, the health of workers principles and values which inspire our activities and citizens and the quality of our products. Therefore, and govern the behaviour of all of those who in line with our nature as an avant-garde company, collaborate with RAM and work towards the reaching HIGH we have adopted the most suitable instruments in of our objectives, in order to guarantee ethical and order to pursue our objectives of sustainability, sustainable management. Investments which include adaptation to the best international standards, in order to promote improvement in our » THREE-YEARLY RENEWAL Training of personnel performance. OF ISO 50001 CERTIFICATION Training 2016 was characterised by the three- Odours We have adopted an Integrated Management yearly renewal of ISO50001 certification Initiatives for the local System which is subject to continuous updates and territory (management of energy systems). which brings together the various Management Systems which concern aspects such as health, In the appendix on pages 88-89, it is possible to The safeguarding of health Relations with schools safety, the environment, quality and energy. Each find details of the Certification System and the Management System is autonomous, while operating Committees and Sub-committees which are aimed Redistribution of wealth in an integrated manner with the other Management at guaranteeing a coherent management of activities. Suppliers Systems. All our certifications respond to criteria which are not only formal but also regard the effective Communication In order to conform to Legislative Decree 231/2001, development of a system and involves the use of Ethics which introduces the principle of the administrative time and economic resources. For this reason, responsibility of juridical persons, we apply the 231 certification institutes carry out annual maintenance Model of Management and Control, a collection of checks in order to guarantee the constant respect Maintenance code of conduct and organisational procedures which for requirements, also for the renewal of the Balance sheet are aimed at avoiding the committing of crimes by certification itself. those operating on behalf of the company, excluding Water quality Relations with the local » OUR PRINCIPAL CERTIFICATIONS territory or limiting the responsibility of the body which has Interests internal of stakeholders Employment adopted and executed the aforementioned model. ENVIRONMENT This model, which is adapted to individual company UNI EN ISO 14001:2004 Refuse structures, is constantly updated with regards to new forms of crime, and is reguarly subject to analysis QUALITY Condition and control by internal and external auditors. UNI EN ISO 9001:2008 of the earth Relations with authorities Energy management Therefore, over the course of the year, we have CHEMICAL LABORATORY updated our 231 model, which was approved on UNI CEI EN ISO/IEC 17025:2005 Workers' rights 6 October by the Raffineria di Milazzo Board of Directors. HEALTH AND SAFETY AT WORK OHSAS 18001 LOW As requested by the company Supervisory Board, Interests of external stakeholders we then involved all our Managers and Directors in SAFETY training sessions aimed at improving understanding UNI 10617 of our 231 model and the management system ENERGY adopted and implemented by the company in order UNI CEI EN ISO 50001:2011 to reduce the risk of crimes covered by the model.

16 | 2016 Sustainability Report 17 2 RAM: A COMPANY WHICH LOOKS TO THE FUTURE

2.1 An overview of the Raffineria di Milazzo 20 2.2 Our Governance 22 2.3 Our process of development 24 2.4 Our people: the daily driver of innovation 26 2.5 Technology in action: the production cycle and finished products 32 2.6 Investments, the fuel for our future 36 2.7 Marine logistics 40

18 | 2016 Sustainability Report 19 2. RAM: a company which looks to the future

2.1 AN OVERVIEW » Why the acronym RAM The acronym RAM OF THE stands for RAFFINERIA Raffineria di Milazzo. DI MILAZZO

We operate in the field of national and international refining for the production of combustibles, fuels and raw materials for the petrol-chemical industry. This is highly complex work which can only be carried out thanks to the availability of advanced technology and highly qualified personnel.

In order to maintain these levels of excellence, which are in line with the most elevated sector benchmarks, we have maintained a significant level of investment of at least 89 million euros since 2012.

We carry out a role which can be compared to that of an oil press: we offer a high-quality service to our shareholders without owning either the raw materials or the products. » UNIQUE IN SOUTHERN ITALY It also has two jetties Our shareholders, each with 50% shares, are In 2015 we were the only company of 650 and 550 metres in length. Eni S.p.A. and Kuwait Petroleum Italia S.p.A. in Southern Italy to have access to (better known under the trademark Q8). The the Juncker Plan for investments handled shareholders pay RAM a fee for the refining of by the European Investment Bank (EIB). their crude oil which is equal to the sum of all costs. Therefore the company’s profit and loss The seven-year loan was for 110 million account is always balanced, in respect of the euros with a screening which also company’s nature as a joint-stock consortium examined social and environmental company (SCPA). sustainability.

Currently the Raffineria di Milazzo is one of the In our role as a virtuous company most advanced in Europe, capable of receiving which had successfully concluded the » WHERE WE ARE and processing a wide range of raw materials and authorisation process, we were invited The Refinery covers an area of flat producing products in line with the most stringent to speak at the Workshop on energy land of approximately 212 hectares quality specifications. Its processing capacity is industries organised by the European in the Municipality of Milazzo approximately 10 million tons per year. 90% of Commission held in Brussels in February. and San Filippo del Mela. production is sent by sea.

20 | 2016 Sustainability Report 21 2. RAM: a company which looks to the future

2.2 OUR GOVERNANCE

Eni SpA e Kuwait Petroleum Italia SpA have and Vice-president, as well as two Managing established a joint venture to manage the Refinery. Directors, each representing one of the two shareholders, invested with equal powers. The Shareholder Agreements require RAM to be: The Board of Directors additionally also nominates • competitive in the long term the General Manager, who directs the Company, • an international excellence regarding health/ making use of the collaboration of 12 Function safety/environment Managers. • flexible in order to process various types of crude oil. There is also a Board of Statutory Auditors, composed of three regular auditors and two The Board of Directors is composed of eight alternate auditors, charged with monitoring members, four nominated by Eni and four by Q8. activities. The Board of Directors nominates the President

GENERAL MANAGER PIETRO MAUGERI

HR & ADMINISTRATION INFORMATION EXTERNAL PROCUREMENT & FINANCE SYSTEMS RELATIONS ALBERTO ANTONINO ad interim LUCA SCAGLIONE FRANCESCHINI MINUTOLI Maugeri

REFINERY TECHNICAL MANAGER IGNAZIO ARCES

STRATEGIC PLANNING RAFFAELE » FERTILE GROUND FOR MANAGERIAL GROWTH D'ANGELO Management has developed principally from within the company. One example is Pietro Maugeri: he joined the company years ago as a young engineer, and after having covered ever-more-important roles, he is currently the General Manager. NEW MAINTENANCE As well as directing the company on a daily basis, the management is responsible SAFETY & PLANNING PROJECTS & OPERATIONS TECHNOLOGY ENVIRONMENT & ECONOMIC for proposing projects for investment to the shareholders aimed at improving GROUP ENGINEERING ROBERTO FORTUNATO ANTONIO GIULIO FRANCESCO FLAVIO RICCIARDI LAGANÀ the company over the long term. BUCCARELLI FULCI SABATINI MINOTTI

22 | 2016 Sustainability Report 23 2. RAM: a company which looks to the future

2.3 OUR PROCESS 2014 OF DEVELOPMENT Acquisition of a branch of the plant manager 2000 2003 HMU2, creating a new company, “Servizi The company Eni takes the place Milazzo Srl” 1987 became a of Agip Petroli in The company Consortium the joint venture underwent Company following the merger transformation as “Raffineria 1995 2004 2016 Mediterranea Raffineria di The headquarters are The acquisition 1961 Spa” Milazzo Spa was relocated from Rome of “Termica The Refinery established to Milazzo Milazzo” began operating

OUR OBJECTIVE: CONTINUOUS IMPROVEMENT

1957 1994 THE ACQUISITION OF TERMICA MILAZZO Raffineria Raffineria In 2016 we continued to invest in the It was an investment to allow for both the Mediterranea Mediterranea Spa area with the acquisition of the company optimisation of our energetic autonomy was born became part of Termica Milazzo. The company produces and for the maintaining of the continuous Agip Petroli Spa electricity by steam via a combined cycle improvement of our economic, social and thermoelectric power station running on environmental performance. natural gas. The plant is comprised principally of a gas 1982 1996 The operation also included the turbine combined with a related heat recovery employment of all the personnel which boiler with three pressure levels. The steam Agip Petroli acquired shares Joint Venture managed the plant at the time. The produced by the boiler is then used in a steam following closure due to with Kuwait Petroleum Italia: complete maintenance of employment turbine. The electricity produced is distributed the petrol crisis acquisition of 50% of Company levels was a specific commitment of social to the national grid. A part of the steam is sent shares responsibility which we undertook with the to the Raffineria di Milazzo to be used in the local territory. production cycle.

24 | 2016 Sustainability Report 25 2. RAM: a company which looks to the future

2.4 OUR PEOPLE: THE DAILY DRIVER OF 624 Total number INNOVATION of personnel in service

Our work, the production of high quality combustibles and fuel using the most modern and innovative technology, requires the contribution of qualified personnel with an aptitude for teamwork.

Our organisation includes directors, managers, technicians and administrative staff, laboratory technicians, specialised workers and apprentices, all highly qualified and specialised in their field of responsibility.

The majority of our staff are natives of the Valle RAM's staff del Mela area and in most other cases from the province of Messina, confirmation of RAM’s INDUCED EMPLOYMENT commitment to the creation of economic and social 6 27 1 1 value in the local area. Important maintenance activity such as the Main 2016 was characterised by an increase in personnel 12 66 292 236 9 Turnaround (see details on Directors employed by RAM, a very significant element Managers Office Factory Apprentices page 50) generate significant workers considering the critical situation in the South, with workers unemployment at 18.6%. collateral employment with approximately 2000 daily This is in addition to the staff of Servizi Milazzo presences on average during (SMI), a subsidiary which manages the plant for the Turnaround and more than the production of hydrogen. SMI employs 17 staff 1000 during normal activity. members, 6 of which work at RAM, again natives of RAM's staff ENI's and Q8's SMI's staff Sicily, either from Milazzo or the surrounding area. temporary working staff temporary temporary at the shareholders working at RAM working at RAM ENI and Q8

1) Source: Istat. Data T3-2016 Regional distribution of 35 employment. 9 12 6 Total number of female employees

26 | 2016 Sustainability Report 27 2. RAM: a company which looks to the future

In order to guarantee the continuous production cycle which characterises our company, more than half of the employees (58%) work eight-hour daily shifts, while the others work daytime hours (38%) or semi-shifts (4%). » WOMEN AT RAM

The average age of the Refinery staff is 43 years and, Women hold principally with regards to the level of education, almost all of office roles, but are also our staff have a degree or diploma, with a growing present in the production trend in degree-holders: 17% of our personnel cycle: maintenance, have this qualification, with 81% holding a five-year technological sector, diploma. laboratories.

Geographic origin of the personnel in service 2% 2% EMPLOYEE SURVEY Over the course of the year, Other parts Outside Sicily an engagement survey was 20% of Sicily 52% carried out among the staff, Other provinces Milazzo aimed at understanding the Messina level of agreement with the company on a number of determined aspects. In general the results were more than satisfactory, and in particular, themes related to “Health, Safety and Environment” and “Sustainable working practices” obtained very positive results, registering, 24% respectively, Valle del Mela* 83% and 77% of favourable answers.

* The municipalities which form part of Valle del Mela are: Barcellona Pozzo di Gotto, Merì, San Filippo di Mela, Pace del Mela, Santa Lucia, San Pier Niceto, Gualtieri Sicaminò, Condrò.

28 | 2016 Sustainability Report 29 2. RAM: a company which looks to the future

TRAINING

The development of technical, managerial and requirements of the technology used in the Refinery behavioural competences of the people who work and of that required by regulations regarding Health, in the Refinery is one of the fundamental elements Safety and Environment, as well as all of the applied which contributes to the efficient maintenance of the Management Systems. It also means placing drive for continuous innovation which characterises everyone in the condition of behaving and managing our company. persons and activities in a modern and functional manner according to the objectives of a company of In this sense, training becomes crucially important, a level of excellence such as ours. in the knowledge that competence, constant updates and practical experience represent important In order to reach these objectives, an annual training additions to the basic knowledge of each employee. programme is developed on the basis of training requirements highlighted by all of the managers, Carrying out training means, for us, allowing considering both compulsory training and individual everyone to always be capable of responding to the growth programmes. THE SELECTION OF PERSONNEL

The business objectives of a company Personnel development as complex as ours can only be reached with the active participation of all. For Population of young Training for new employees 347 people this reason it is important for us to select human resources who bring competence Adapt competences in line with to the company as well as the potential for changes in business and reinforce Valorisation of core Managerial ability 2,300 managerial ability and knowledge further growth. abilities of English and re-qualification In particular we focus on degree graduates Development of processes Re-qualification of accompaniment towards new roles 2,611 in engineering (chemistry/mechanics/ and professional growth electrics/materials), economics, as well as diploma holders from Technical Institutes. Training on the culture of safety, handling Safety 11,903 of emergencies and the use of all fire-fighting systems Our process includes various stages Total hours 17,161 of selection: 25 YEARS I. Analysis of curricula vitae received via the web page “Work with us” on our website.

www.raffineriadimilazzo.it » AWARD FOR 25 YEARS WORKING II. Assessment for the aptitude of the FOR RAM Hours of Training The highest levels of attention and the utmost (Average hours per employee) commitment that we make to training, as candidates, in order to collect in-depth Every year there is an award demonstrated by the figures, concerns the field of information regarding the candidates’ ceremony to celebrate 25 years profiles as well as regarding their 2014 2015 2016 Safety at work, which is a fundamental and essential working for RAM, a moment of expectations and motivations. factor for any further growth. celebration in which we remind III. Technical interview held by our ourselves and the local community For us, training is also a vehicle for dialogue 25 25 28 that our company is a system with the local area. Our activity with the world of personnel with suitable candidates, education is in fact particularly intense, including with the final selection from the best made up not only of machinery and the organisation of school visits and the promotion candidates. investments, but above all of people. of university apprenticeships (see the relative In 2016, 25 employees reached this paragraph on page 73). important milestone.

30 | 2016 Sustainability Report 31 2. RAM: a company which looks to the future

THE SIMPLIFIED FLOW CHART 2.5 PROPYLENE Petrol production TECHNOLOGY cycle IN ACTION:

THE HDT2 LGP FCC ALK PRODUCTION LPG CYCLE AND Naphtha

PETROL FINISHED Primary Reforming ETBE distillation PRODUCTS plant Diesel production cycle Our production process is necessarily complex in » STRATEGIC ASSETS FOR THE COUNTRY Topping Kerosene order to produce a finished product with an elevated Our finished products have been satisfying Kerosene JET FUEL level of added value via a process of transformation for years a significant part of the national desulphurisation plant of crude oil. demand for petrol and diesel for the automotive sector. Our focus is therefore on quality products: light and medium weight. They range from lighter products such as LPG, naphtha and petrol, to heavier products » CONSUMPTION IN ITALY - THE QUOTA Diesel Diesel desulphurisation such as Jet Fuel and diesel. These products are SATISFIED BY RAM plant obtained from the processing of crude oil, which is DIESEL a mixture of naturally occurring hydrocarbons.

Production includes a series of processing phases: 24% distillation separates the lighter hydrocarbons Petrol from the heavier ones, these latter hydrocarbons 15% are in turn chemically “broken down” and then Diesel recombined with advanced technology, creating HDC further light and medium weight products.

Thanks to the technology at our disposal, we are able to transform about 90% of crude oil into light The total volume of finished product sent in Further information and a description Vacuum and medium weight products while the remaining 2016 was 8.4 million tons, with a prevalence for of the individual plants is available on 10% is a heavy product such as fuel oil. The level oversea distribution of 89%. Among products sent SULPHUR www.raffineriadimilazzo.it of innovation reached allows us to refine a wide overland, 36% was represented by fuel oil, sent via range of crude oils, including those requiring oil pipelines to the nearby thermoelectric power in the section “Lo Stabilimento”, LCF more complex processing, with a consequential station. The remaining part was distributed via where an interactive map is also economic advantage. tankers throughout Southern Italy, 90% in Sicily. available, describing the various stages of processing. FUEL OIL

32 | 2016 Bilancio di sostenibilità 33 2. RAM: a company which looks to the future

PRINCIPAL PORTS OF DESTINATION 14% Venice 10% RAW MATERIALS USED (data in millions of tons) 2014 2015 2016 Livorno Crude oil 7,99 8,74 8,72 15% Semi-processed products 1,07 0,79 0,54 12% 10% 78% Naples Non EU EU Italy Other products necessary for the process of refining 0,19 0,17 0,10 TOTAL 9,19 9,66 9,36

NEW REGULATIONS FOR JET FUEL The Jet Fuel produced by Raffineria di In order to bring us into line with the Milazzo sent both by sea and by land new regulations, we carried out various conforms to the new EI/JIG STANDARD actions. A number were of a structural 1530 regulation elaborated by the technical nature, concerning technical modifications team from the Energy Institute which, for to the storage tanks and loading racks in the first time, has also involved refineries order to further favour the separation and in quality controls throughout the Jet Fuel draining of water and the elimination of any production chain. The regulation brings impurities. Others, of a managerial nature, into use an entire series of tactics and provide for additional operational checks checks to ensure that the quality of the Jet such as additional analyses and checks on Fuel is preserved throughout the process, tankers before and after loading with the from production, to storage, to distribution. application of seals.

ORIGIN OF THE CRUDE OIL Norway Azerbaijan Russia OUR PRODUCTS: MAIN USES USA 3,9% 14,3% 21,6% 0,9% Italia LPG Mainly employed for domestic, industrial and agricultural 4,5% purposes, it is also used as a propellant for aerosols, as engine fuel, as fuel for heating and the production of heat.

Petrol It is commonly used as fuel for internal combustion engines. United Kingdom Propylene Principally used in the production of polymers, plastics and 3,8% other chemical compositions.

Jet Fuel Used as an aeronautical fuel for jet engines.

Diesel Used to fuel diesel engines.

Fuel oil Used for fuel for thermoelectricpower stations.

Sulphur Sold in both liquid and solid form; it is used in many industrial Mexico Algeria Kuwait processes and in agriculture as a fertiliser. 3,9% 3,9% 11,9% Egitto Turkmenistan Libya4,3% Iraq 8,5% 9,3% 9,3%

34 | 2016 Sustainability Report 35 2. RAM: a company which looks to the future

2.6 A SUMMARY OF PROSAQ

INVESTMENTS, Fields Objectives What we have done / what we are doing (the most important projects) THE FUEL FOR Safety and health Improve conditions in • Reduction of the noise impact in the CTE working environments plant OUR FUTURE • New sentry box for FCC operators Serious accidents Prevent the risk of serious • Relocation of the fire-prevention garage accidents Improve efficiency and • Adaptation of fire-prevention systems the availability of structures for and passive protection the handling of emergencies • Monitoring of roof tanks and the fire-resistance of • Replacement of the Flares tip equipment and structures during • Maintenance for improvement an emergency of the mooring jetties docks.

Security Expansion of the presence • Perimeter fencing and video surveillance detection system

Water resources Improve the effectiveness and • Fine-tuning revamping TAP efficiency of management in • Regimentation of surface waters normal and emergency conditions • Project for the optimisation of cooling for the water treatment plant. water network

Atmosphere Reduce emissions into the • Interventions/Studies for the reduction atmosphere of Sox/Nox emissions including the installation of an SNCR CO-Boiler and an increase in the use of Natural Gas. Awaiting authorisation: • Recovery of VRU Vapours • Covering of API tanks

Investment represents the driving force of our invested. We would like to highlight that over the last Raw materials and Improve the quality of products • HDS 1 Revamping activity, which allows us to maintain our commitment 15 years we have invested more than 1 billion euros. products and their environmental • HDS1/2 Vacuum Dryer Revamp to innovation and sustainability. Our investment policy takes into consideration various compatability • New Sulphur Recovery Unit fields identified by an improvement programme with This is “fuel” which sustains our perspectives for regards to Safety, Health, Environment, Energy Energy efficiency Reduce/Optimise consumption Vacuum ovens and Topping 3 Furnace continuous improvement in order to render the and Quality, in the framework of our Integrated • Energetic recovery of Kerosene Refinery ever more competitive in a global context Management System, known as PROSAQ. • Improvement of compressor control which is characterised by significant differences in systems (HydroCOM) regulations, above all with regards to environmental Active since 2013, the year in which we obtained Surface and Prevent the risk of • Renovation of the sewage system protection. ISO 14001 certification, this “Improvement plan” subsurface contamination of the surface and • Renovation of the tankage is a document which defines the scheduling of the Our full attention towards environmental and safety objectives to be reached with a view to the continuous subsurface • Installation of double sealed tanks themes leads us to use the best available technology improvement of the System and a constant reduction Surface and Implementation of the Integrated • WorkFlow Issuing of authorisations and to develop good practices. in losses, through the programming of targeted subsurface system Management System continuous adaptations for certification; interventions. The plan is updated every trimester for safety health • New systems for the consultation In 2016 we invested approximately 89 million euros, with the involvement of all of the competent functions, environment energy of technical documentation a considerable sum, bearing in mind that 2015 was identifying the necessary actions and investments in and quality a record year with more than 120 million euros order to reach the objectives.

36 | 2016 Sustainability Report 37 2. RAM: a company which looks to the future

Economic resources were then used for projects reliability of the units, as well as the improvement dedicated to the reduction of environmental impact, of the energy factor. on the maintaining of standards of safety and

INVESTMENTS 1996 - 2016 (in millions of euros)

1996 85,9 1997 49,3 1998 46,5 1999 44,1 2000 76,4 2001 51,0 2002 35,5 2003 28,3 2004 67,9 2005 34,6 2006 34,5 2007 35,1 2008 56,1 2009 59,1 2010 60,6 2011 69,6 2012 102 2013 92,1 2014 104 2015 121,7 2016 88,9

38 | 2016 Sustainability Report 39 2. RAM: a company which looks to the future

2.7 MARINE LOGISTICS INTEGRATED PORT HANDLING With the coordination of RAM, a computer system, “Integrated Port Handling”, In consideration of the fact that the majority of RAM unmooring operations is established in relation has been set up, a software system products are transported by sea, port logistics are to the size of the tanker aimed at rationalising and integrating of great importance in the life of our company. • mooring services for docked tankers. This is the information flow for the handling the process of tying the ropes to the mooring of port activities. This is an instrument It is not only a strategic asset for our business but bollards. This is carried out exclusively by for the management of ship movement also an important communication point for the city “Gruppo Ormeggiatori di Milazzo” for the RAM jetties. The Port of Milazzo and for local businesses. • fire-fighting service. This is composed of a team of fire-fighters from a private company was thus the first in Italy to computerise The marine shipping of incoming (mainly crude) who supervise all of the operations of loading/ the management of port operations. and outgoing (mainly petrol and diesel) petroleum unloading The advantages of this system, which products takes place via the marine terminal built • evacuation service. There is a permanent presence has substituted all pre-existing printed between the two jetties. The marine terminal off-shore of a vessel for any necessary evacuations documentation, can be seen in the falls under the jurisdiction of the Port Authoritiy via sea of the personnel present on the jetties reduction in delays due to communication of Messina. Situated in the sea area off the north • anti-pollution service. Carried out by one or and bureaucracy, and in the immediate coast of Sicily, the area has a generally sandy sea more vessels that patrol the area of sea in front availability of data for operators and bed offering good anchoring. of the Refinery , ready to intervene in the case of authorities, and for the elaboration of accidental spillage of products Both jetties are used for loading LPG, petrol and • maritime agencies. These carry out a whole statistics regarding archived data, in the diesel, and jetty 2 is also used for unloading crude series of activities for ship-owners both before real-time viewing of the situation of the oils and the loading of fuel oil and propylene. and during the presence of the ship either port in the case of emergencies and in off-shore or moored, such as the presentation the reduction of the risk of erroneous In terms of responsibility, the Captain of the ship of documentation to relative authorities, the interpretation in communications. is responsible for the carrying out of correct disembarkation of maritime personnel, caboose manoeuvres of mooring and unmooring following and other necessities. the indications of the port pilot, who comes on Milazzo Pilots board before the beginning of mooring procedures. » JETTY 1 In order to carry out mooring and unmooring Escape Milazzo Mooring staff approximately 470 mt vessel manoeuvres there is a tug service managed by an Fire-fighting independent local company. in length and 30 in width, with 2 mooring points. Tugs Maritime Maritime warnings There are various local companies involved in Mooring for ships of up agency activities surrounding marine logistics. to 104,000 tons gross Following the services involved: • piloting. Compulsory for all ships, this is managed by the Milazzo Corporation of Pilots. Pilots are » JETTY 2 figures who, together with the Captain of the approximately 650 mt in ship, carry out all the manoeuvres of mooring/ length and 30 in width, ACTIVITIES GENERATED BY MARITIME LOGISTICS unmooring with 6 mooring points • tugboat services. On the basis of indications Mooring for ships of up to provided by the Pilot, together with the Captain of Car hire the ship, tugboats carry out operations of towing 240,000 tons gross, the service Refuse collection maximum size for ships and positioning of ships from off-shore positions Hotels Chemistry to their assigned mooring point and vice-versa. used for intercontinental Other suppliers Certification The number of tugboats to be used for mooring/ transportation of goods Forwarding services and services agents

40 | 2016 Sustainability Report 41 3 SAFETY, A SYSTEM OF ELEVATED STANDARDS

3.1 Accidents, RAM wins 6 - 0 44 3.2 Investments for safety 45 3.3 The safety of the plants: a system characterised by excellence 47 3.4 Maintenance 49 3.5 The main turnaround 50 3.6 Protocol for the protection of health 52

42 | 2016 Sustainability Report 43 3. Safety, a system of elevated standards

3.2 3.1 INVESTMENTS SUMS FOR OPERATIONS ACCIDENTS, FOR IMPROVEMENTS IN THE FIELD OF SAFETY 2016 FOR 2015 RAM WINS 6-0 2014 16,8 17,1 SAFETY 10,8 mln 4 mln 4 mln 4

In 2016, a considerable level of investment was maintained for the improvement of the reliability of our plants and safety systems.

The total sum of investments made in 2016 regarding safety amounts to 17.1 million Euros, more than in 2015 (16.8 million), confirming our growing commitment to the continuous improvement of risk analysis and the adopting of preventative measures.

Among the main projects completed in 2016, the most significant are: • a new fire prevention station: The new station has been constructed outside of the perimeter of the Refinery, near the main entrance. In particular, we constructed a new building with suitable areas for fire-fighting vehicles and We at RAM can safely claim that teamwork creates our company policies regarding safety, obtaining for the personnel offices, as well as a new very high levels of safety. 2016 saw the beating excellent results. control room which has brought together all the of the 6-year record without accidents involving For an important event such as the 2016 Turnaround, existing fire-prevention alarm, monitoring and personnel. This objective was reached thanks to which involved more than 1,500 external workers, management systems the attention paid to prevention, the efforts that there were no recorded accidents. • the purchase of a new fire-fighting vehicle: are made every day for the continuous raising There are many instruments brought into play the vehicle in question is very innovative, the of our standards and thanks to the contribution for safety, and range from continuous training to second of its kind in Italy and Europe, and the of our staff, who make a special commitment to awareness campaigns, to the strengthening of best in terms of fire-fighting efficiency. It is scrupulously respecting all of the standards for internal procedures and simplified signage. characterised by very high operational flexibility work safety and the procedures defined by the which renders it suitable for operation in various company. types of situation, from gas leaks to fires in This result is even more noteworthy if one Number Number areas of the plant, to remote interventions for considers that third-party companies working in of accidents of accidents tank fires. It also has highly advanced control involving RAM involving Company the Refinery, which carry out operations with a personnel personnel systems and operator interfaces. high risk of accidents (instrumental, mechanical, building, electrical works, etc.), have significantly 0 1 Investments in this field include current spending reduced the number of accidents by following for safety which amounts to 9.2 million euros.

44 | 2016 Sustainability Report 45 3. Safety, a system of elevated standards

3.3 SAFETY AND EMERGENCY MANAGEMENT • the carrying out of company policies The culture of safety involves all our for the prevention of serious accidents, personnel, both operative and non, who provided for by our Safety Management PLANT SAFETY: are subject to a periodical programme of System, in conformity with the theoretic and practical training with requirements of regulations in force. A SYSTEM CHARACTERISED fire prevention exercises in the Practice Field. Furthermore, on a regular basis, Furthermore RAM has participated we carry out training together with the in work-groups coordinated by the BY EXCELLENCE National Fire Fighters Corps. We have an prefecture of Messina for the updating internal “Fire-fighting Squad” composed of the External Emergency Plan: The elevated level of safety which characterises possible actions for the reduction of such risks. of a Team Leader and specially-trained this document brings together the the activity in our plant originates principally from The plan is formally handed to the companies the establishing of a highly articulated system of before they begin programmed maintenance Fire Fighters. management of accident scenarios which prevention. The Security and Coordination Plan, work, in order to allow an accurate evaluation of In the case of emergencies, the have an external impact. prepared on the occasion of complex activity all of the actions to be carried out. The Security “Emergency Squad” comes together, The preparation, emission and activation such as, for example, the operations regarding and Coordination Plan is scrupulously followed by under the coordination of the Shift Leader of the External emergency plan is the the Turnaround, is a very detailed plan which all the companies involved and its application is (the highest executive figure within the responsibility of the Prefecture of analyses risks and, in collaboration with executing supervised by experts in safety nominated by us. factory), composed of the fire-fighting Messina. The External Emergency Plan companies and our supervisors, identifies all team as well as operational personnel can be viewed on the website of the from the plant. RAM is subject to Prefecture of Messina (furthermore, compliance with Legislative Decree on the website of the Municipality of » WORK PERMIT 105/2015, a specific regulation regarding Milazzo, and the Municipality of San Filippo The specific analysis of risk for every significant risks of accidents, which, del Mela, the “Information on accident maintenance job is carried out via among other things, provides for: risks at RAM” sheet can be the compilation of a Work Permit, a • an in-depth analysis of risks and the viewed). The sheet contains the document which authorises and governs preparation of the Safety Report regulations regarding behaviour to the working activities to be carried out in • the adoption of preventative measures be adopted in the case of serious the various areas of the plant. Particular and the mitigation of accident scenarios accidents, the possible areas concerned attention is paid to activities to be carried which are considered credible. and a description of the plants and the out in so-called “confined” spaces, • the implementation of the Internal prevention and safety measures adopted. where, in other words, there is reduced Emergency Plan ventilation, thus creating the conditions for the possible accumulation of hazardous substances. Furthermore, this type of area, considering the restricted space, renders any rescue operations more complicated. We take various measures in order to minimise the work risks in these situations. These include the special preparation of personnel and trials of work management, the creation of contacts between personnel outside of the equipment and workers inside, as well as the use of appropriate signage.

46 | 2016 Sustainability Report 47 3. Safety, a system of elevated standards

Another positive factor is our attention paid to 3.4 external companies, involving them intensively in ATTRIBUTION OF BONUS POINTS the continuous improvement of all aspects of safety. During monthly meetings with the companies, we 1 2 3 4 5 MAINTENANCE analyse aspects concerning the risks of our sector of operation, also evaluating experiences from The maintenance of the Refinery plants guarantees The underlying concept of the Turnaround is other situations and collecting proposals for the 6 7 8 9 10 reliability, functionality and the efficiency of system, similar to that of a service carried out on a car. improvement of working practices. with the consequential optimisation of production. A periodical check-up which serves to assess Companies with safety levels which are Maintenance is mainly divided into: all of the components subject to deterioration unsatisfactory are asked to re-examine the causes 11 12 13 14 15 • Programmed maintenance (or preventative through regular use. It is therefore a check-up and to take immediate action in order to improve. maintenance), carried out according to pre- which focuses on safety, but is also useful for SITUATION OF PERSONNEL established dates. This is commonly known as saving on maintenance and repair costs over the These activities also allow for the sharing of Turnaround long-term and for extending the life of the vehicle BEHAVIOUR innovative ideas, such as how to use new equipment SAFE • Predictive maintenance, carried out when (or in our case the plant). REWARDS and materials which can reduce the risks of the warning levels of numerous parameters are The Turnaround is an important phase for the life of BONUS POINTS

typical activity in the Refinery. Every year, in January, WRITTEN PRAISE reached, which act as indicators for possible our plant, in that it involves a significant technical,

an analysis of results is carried out regarding VERBAL PRAISE breakdowns technological, economic and managerial

the performance of the various companies, the VERBAL WARNING • Corrective maintenance, carried out in the case commitment which sees the involvement of all programmes and objectives for improvement for WRITTEN WARNING of a break-down. the structures either directly or indirectly involved the following year. Companies and workers who REFERRAL TO THE TRAINING CENTRE -5 in making sure that the activities are carried out PAIRING WITH -10 distinguish themselves over the year are rewarded. THE COMPANY SPP The Turnaround is closely linked to the standard with respect to schedules, budget and above all, BEHAVIOUR SUSPENSION -15 safety objectives UNSAFE indications provided by plant constructors, . Furthermore, our activities are marked by suppliers of equipment and rotating machines, and Given the significant work commitment intensive auditing, carried out by a third-party follows predefined intervals of intervention. required during the Turnaround, we make use » THE SAFETY METER company specialised in safety, with the collaboration The objective is to ensure the running of the plants of the collaboration of specialised companies, of our supervisory and operational personnel. This is a points system, similar to that of a with the highest levels of reliability, availability engineering companies and various professional driving license, which has been introduced and safety. figures. In the field of safety, the training of personnel plays in order to increase sensibility regarding The majority of programmed maintenance works is During the Turnaround, with a view to continuous a fundamental role. safety. Cases of non-conformity are concentrated on mechanical aspects and internal improvement, we regularly examine, together strengths in the field of Before entering the plant, new employees of the reported to the companies and according inspections, on the verification of monitoring and with the companies, the companies, and for special occasions, training safety systems and power systems, as well as safety which have emerged during the activities to the seriousness of the cases, points are and information course are programmed, which the general upkeep of rotating machines. More carried out, and we analyse the areas on which, examine subjects such as emergency procedures, detracted. Once the points run out, the specifically, scrupulous inspections are carried out, in the future, it will be necessary to focus more specific environmental risks and the Refinery’s worker can no longer enter, and therefore followed by maintenance (where necessary) on pumps, attention. safety policies, as well as responsibility and carrying work in, the Refinery. With training activities, compressors, furnaces, monitoring and analysis Furthermore, the contribution of the plant workers out of procedures regarding work permits. the points can be earned back. instrumentation, according to legally-established is also fundamental, thanks to their experience intervals, records, and evidence emerging from and competence in monitoring any anomalies in

inspections on every plant or production line. the processing plants. CAMPAIGN REGARDING FALLS The campaign provided precise indications for the In 2016 we promoted an awareness campaign reduction of risks which include the keeping of the regarding falls. According to national statistics, workplace in order, accidents due to falls represent a significant the reporting of dangerous areas and surfaces, » INVESTMENTS percentage of the total number of accidents on the use of handrails to prevent falls from stairs, IN MAINTENANCE IN 2016 a national level. adequate lighting in the workplace and the As well as overall investments Qualitative studies have revealed that the main verification of the protection of open gaps. for a total of factors of risk are related to the state of surfaces Awareness has been carried out via informative 89 million euros, where people walk and the presence of substances meetings with workers, leading to a maturation in 2016, the total spent of leadership for safety for People in Charge and or objects, the lack of visibility, moving too quickly, in maintenance was poor housekeeping, or psychological-physical cultivating a culture of risk prevention, also through conditions of the workers which have not been the use of signage and the reporting of dangerous 92 million euros. evaluated by the person in charge. conditions.

48 | 2016 Sustainability Report 49 3. Safety, a system of elevated standards

3.5 THE MAIN

SAFETY SYSTEMS: THE TORCH TURNAROUND The Refinery Flares are an important system for the safety of the plant, and are used for the correct handling of any excess gasses 2016 saw us involved in the large-scale activity which may result during the running of the of a Turnaround which involved all of the plants dedicated to the production of diesel. 62.4 million units. The hardware is characterised by a euros were spent on the Turnaround. pilot flame which serves as a guarantee of safety, remaining permanently alight in such A key moment was the signing of the Safety a way as to immediately burn the gas which, Agreement between our company and the owners in these phases, of the companies involved in the works. is conducted via a closed system known as “blow down”. In conditions of regular The signing of the Safety Agreement is aimed at further increasing the level of awareness and operation, the flare burns a minimum involvement of the external companies with regards quantity of gas which allows the flame to stay to essential objectives in this field, also and above alight and guarantees the safety of the plant all during such a complex and articulated phase as and the people working there. In exceptional that of the Turnaround. cases, there are moments where significant The most important figure of all with regards to the amounts of gas are produced, and which are 2016 Turnaround was for accidents, with a result of zero in the work-site areas concerned. in any case transported to the flare. Despite an increase in throughput, the The objective was reached thanks to the careful Refinery continues to record positive results safety planning, the meticulous checks on work site in terms of emissions. activities, also entrusted to companies specialised During the main turnaround due to in the sector, and to the use of instruments for the the shtut-down and start-up of the unitsan management of Safety which had already been Number of companies involved 112 » THE NEW INSTRUMENTS used in previous experiences. higher gas flowrate was sent to the flares. Hours worked Over 700,000 This is why there was an increase in burned OF THE TURNAROUND gas rate to the flares system in 2016. The new analytical process: » TIMING FOR THE TURNAROUND Number of workers involved 1,500 • Stop Pre turnaround works were started Number of safety and coordination 208 in 2015 The Turnaround began meetings GAS BURNED IN THE TORCH • Analyse in April and ended at the beginning (tons) • Reflect Number of special coordination 80 of July 2016. meetings 2014 2015 2016 • Act Safety “bites”, brief informative Number of workers awarded 148 During the Turnaround, as well as the activity of sessions in the field. programmed maintenance aimed at keeping the Number of accidents 0

plant at perfect levels of efficiency and guaranteeing 9,896 8,966 17,270 Verifications carried out on the the highest levels of reliability, various improvements certifications for the specialisations 3,308 were carried out concerning the LcFiner, HDC, HDS2 of the workers units. Work vehicles checked 678

Workers trained for entry 1,717 to the Refinery

50 | 2016 Sustainability Report 51 3. Safety, a system of elevated standards

3.6 PROTOCOL FOR THE PROTECTION OF HEALTH

Our company considers the well-being of its staff as fundamental. We are seriously committed to following rigorous health protocols, which cover both aspects of prevention and safeguarding from risks.

Our plant has emergency services with specialised medical staff offering a service for 12 hours a day on site and an on-call service for the remaining hours of the day. Additionally, the Company Physician contributes to the definition of protocols to be followed according to the specific risks present in the workplace and to carrying out a series of other tasks (see box). Our health protocol sees that all workers undergo a hearing test,a spirometry test, as well as tests to check the parameters of blood and urine.

In 2016, 570 workers underwent periodical check- ups, of which 390 were shift workers and 180 day workers. Furthermore, 454 workers underwent blood tests. The results were satisfactory: all those examined were found to be in a good state of health, and an absence of particular illnesses connected to the working activity carried out was recorded.

» RESPONSIBILITIES OF THE COMPANY PHYSICIAN The carrying out of periodical check-ups (annually for operative staff and every two years for non-operative staff)

The drawing up of the health file regarding risk

The issuing of certificates of conformity for the carrying out of various tasks

52 | 2016 Sustainability Report 53 4 THE ENVIRONMENT, A CONSTANT COMMITMENT TO ITS PROTECTION

4.1 Investments for the environment 56 4.2 Air 58 4.3 Greenhouse gases 59 4.4 Water 60 4.5 Energy 62 4.6 Waste Products 63 4.7 Environmental monitoring and controls 65

54 | 2016 Sustainability Report 55 4. The environment, a constant commitment to its protection

4.1

FOR IMPROVEMENTS WITH REGARDS INVESTMENTS TO THE ENVIRONMENT 2016 was also characterised by intense activity FOR THE for the improvement of the environmental performance of the Refinery. Works aimed at energy recovery included ENVIRONMENT the revamp of the HDS1 unit, which minimises the sulphur amount in kerosene. These operations were also extended to the For our company, environmental sustainability is a improvement of environmental and energy condition which allows us to successfully carry out performance for the furnaces in Topping 4 our business over time. Environmental excellence is, in reality, written in our DNA, as it forms an and the Vacuum. integral part of the Pact signed by our shareholders at the time of the creation of the joint venture. In addition, the completion of two projects which As prescribed by the Integrated Environmental were exclusively environmental in nature was Authorisation issued by the Ministry for the planned for 2016: Environment, we adopt the Best Available • the third plant for vapour recovery (VRU3), Technology (BAT) in order to guarantee low emission levels and the optimisation of consumption of raw in addition to the already-existing units (VRU1 materials, products, water and energy. and VRU2) Again, in 2016, The environmental results were • the covering of the API separators of the more than positive: we continue to achieve Waste Water Treatment Section to minimise excellent performance with regards to emissions any odorous impact. into the atmosphere, an aspect which allows us to look to the future. Although these operations were planned for In 2016, Investments regarding projects the sole purpose of improving the environment for innovation and the improvement of our and therefore not for an increase in production environmental performance amounted to of products, nor for the economic improvement approximately 57.2 million euros. of assets, the process for the obtaining of the necessary administrative authorisation Of these, 32.3 million euros were destined to specific regarding their implementation was incredibly projects for environmental protection, more or less the same ratio as the previous year in regards to long, and therefore - despite everything being RAM’s overall level of investment (37% against ready (materials, companies, money) 36%), confirming our continuous commitment to FOR IMPROVEMENTS - the projects were not completed in 2016. » API the protection of the surrounding ecosystem. WITH REGARDS TO Development of the projects is therefore The name stands for the American THE ENVIRONMENT programmed for completion in 2017, Petroleum Institute, the organisation Investments in this field include current spending with the hope of having the necessary which was the first to define for the environmental matrix (air, water, refuse) 2014 2015 2016 the characteristic standards for planning. authorisation as soon as is reasonably possible. which amounts to 22.3 million euros. The separation of oil from water takes place via gravity, taking advantage 35.6 45.3 32.3 of the difference in the specific weights mln € mln € mln € of the two fluids.

56 | 2016 Sustainability Report 57 4. The environment, a constant commitment to its protection

4.2 4.3 AIR GREENHOUSE

We pay much attention to the quality of the air, the see page 65) both with regards to the concentration roof of the home where we all live. Emissions into of the compounds emitted and the total annual GASES the atmosphere are continuously monitored for quantity in terms of mass flow (restricted to NOx,

the principal parameters regarding NOx, SOx, CO SO2, PM, and CO). Our commitment to the reduction of greenhouse and particles (PM). We also constantly monitor the The final mass flow figures for the year generally gases continued in 2016. We follow the European emissions of Volatile Organic Compounds (VOC) confirm the trends of previous years, demonstrating system of “emission Trading”, a system of exchange produced by the plants, storage and systems for significantly lower figures than the limits set for greenhouse gas (GHG) emission quotas within the the loading of products. We use LDAR methodology by the AIA. Furthermore, 2016 saw the results of European Union finalised at promoting the reduction of (see box) for the VOCs originating from the plants. operations carried out in 2015 with the installation of said emissions according to the criteria and guidelines the 3rd and 4th stage of cyclonic separation and the expressed in the Kyoto Protocol. Our reference points are provided by the limits set Turboexpander for the FCC unit. This development, The volume of greenhouse gases emitted directly

by the AIA (Integrated Environmental Authorisation, in fact, led to a substantial reduction in PM values. by the Refinery, expressed in equivalent tons of CO2, is subject to certification by specialised external organisations. COMPARISON OF EMISSION DATA FOR THE PRINCIPAL COMPOUNDS The emissions registered in 2016 are slightly lower (data expressed in tons) than those of the previous year, following a trend of constant reduction. The intensity of greenhouse gases AIA limits = 2,547 AIA limits = 9,623 emitted directly in relation to production is equal to 196

kg of CO2 per ton processed. 1,673 1,649 1,659 3,196 » THE KYOTO PROTOCOL 2,862 3,065 This is an international treaty for the environment regarding global NOx SO2 2014 2015 2016 2014 2015 2016 warming, which was drawn up on

11 December 1997 AIA limits = 251 AIA limits = 1,259 in the Japanese city of Kyoto, by more than 549 567 75 77 512 180 countries and came into 37 effect in PM CO 2014 2015 2016 2014 2015 2016 2005

AIA limits (DIRECT EMISSIONS) CO2 AIA limits not provided for RAM values

1,090 1,085 2014 2015 2016 989 » LDAR METHODOLOGY An acronym for Leak Detection And Repair, this is aimed at the evaluation of the entity, 1.88 COV and above all the carrying out, of actions 1.86 1.83 2014 2015 2016 necessary for the reduction of micro-leaks of organic compounds into the working environment.

58 | 2016 Sustainability Report 59 4.4 THE WATER SUPPLY

a second network of wells drawing from the sea WATER which is primarily for the creation only in the case of fire-related emergencies a network of wells of a hydraulic barrier to protect the water table. The water drawn from created especially these wells (created in the framework for the supply of water of the Securing of the area known as for industrial use for the units MISE) is recovered and used in the drawing of DEMI water production cycle due to its quality and steam from Termica Milazzo

lastly, another source of water is provided by the network municipal aqueducts, used exclusively for health and hygiene purposes.

Water is an essential element for our production Therefore we were able to benefit from an improved cycle. capacity for the water re-use equivalent to It is used principally for the cooling of the plants), 2,437,769 million cubic metres, or rather 46% more QUANTITATIVE INFORMATION FOR WATER SUPPLY (in cubic metres) for fire-fighting systems and for the production than the previous year, and this consequently led to of DEMI and boiling feed water to be used for the a reduction in the total amount of water to be taken 5.9% 6.6% 6.7% production of steam. This last product is used as from sources (well water, the water networkmains 28.2% 48,5% 50.3% 46.0% an energy carrier both for the production of electric water, etc). energy or for the heating of process fluids, as well 30.6% 34.6% as for the steam-out of equipment before the On 6 December there was a containment leak into 2014 2015 2016 carrying out of maintenance works. the Corriolo stream concerning a small quantity 8,146,862 8,386,411 8,234.248 Total amount of Total amount of Total amount of of fuel oil, we triggered immediately appropriate water drawn water drawn water drawn We operate with the utmost commitment to the prevention meansures and secured the whole area. protection of the water table. This undertaking is The failure was thus fixed resolved and de- expressed in high levels of attention to the control contamination operations were duly carried out. 17.5% 12.5% 12.7% and maintenance of the quality of the water in the The competent authorities, prompty informed of water table and the optimisation of consumption the situation, came to the Refinery for verifications WELL WATER and the recovery of water within the production immediately after the incident and in the following QUANTITATIVE INFORMATION 2014 2015 2016 cycle. days. MISE WATER REGARDING RECYCLED/ In the framework of the process of continuous WATER FROM OTHER SOURCES REUSED WATER 1,784,502 1,670.000 2,437,769 With regards to the monitoring of quality, it should improvements, adjustments were made to the WATER ACQUIRED FROM TERMICA MILAZZO (WATER AND STEAM) (in cubic metres) be highlighted that systematic checks are carried unit in order to avoid any occurence of this kind out, using the extensive network of piezometers of leak. present in the Refinery. The samples taken, also in the presence of the Monitoring Organisation Waste water is treated together with rain water. (ARPA), allows for the effective verification over ANALYSIS OF WATER DISCHARGED INTO THE SEA (concentration of the principal parameters / in mg/l) time of the quality of the water. The water which we released into the sea amounted to approximately 5 million cubic metres. The In 2016, water consumption followed a downward quantity of oxygen necessary for the complete AIA limits = 40 AIA limits = 160 AIA limits = 80 AIA limits = 5

trend thanks to the positive effects of our investment biochemical and chemical oxidisation of organic 126 100 in the revamping of the TAP (waste water treatment and inorganic compounds present in a water sample 48.29 unit consisting of a chemical-physical section and is indicated by two parameters (BOD and COD). 25 25 17 13.86 19 15.72 a biological section). 0.05 0.03 0.05 BOD COD SST Idrocarburi 2014 2015 2016 2014 2015 2016 2014 2015 2016 2014 2015 2016

AIA limits Legislative Decree 152/06 From the data shown in the table it is possible to see how we are Reference parameters (mg/l) significantly below the imposed limits.

60 | 2016 Sustainability Report 61 4. The environment, a constant commitment to its protection

4.5 4.6 ENERGY WASTE PRODUCTS

The modernisation of the units in order to optimise In 2016, we increased our levels of autonomy The production of waste products is related to removal of a considerable quantity of materials energy consumption has been one of our priorities regarding energy in an ecologically compatible all of the main activites which take place in the regarding the construction of the new HMU3 plant for investment over the last few years. Energy manner thanks to the fully-operational status of Refinery: process stages, maintenance works and (in 2014) and the construction of the new access consumption in fact constitutes a significant part the Turboexpander, which produces electric energy the functioning of auxiliary services. road to the Refinery (2015) which determined an of the total operational costs for refining, equal to by exploiting the pressure energy of the flue gas increase in the quantity of waste production. approximately 30%. generated by the FCC unit. With the contribution For the correct waste management, we make of our thermo-electrical power station for the use of procedures set out according to relative The disposal of the waste products takes place We therefore pay particular attention to energy generation of steam and 53 MW of electrical power regulations in force (Legislative Decree 152/2006 in the most suitable sites according to the type consumption thanks to our Energy Management - which in 2016 satisfied approximately 41% of part IV and its addendums). of material, with particular attention paid to System, based on UNI EN ISO 50001 certification. our energy requirements - and the support of the These procedures are periodically subject to opportunities forwaste recovery. Our policies are By applying a systematic approach, we are able to Turboexpander, in 2016, we were able to reach checks and audits by third party for the verification aimed at continuously increasing, over time, the carry out checks on a regular basis regarding the 50.7% of our required energy generated through of conformity to regulations and their correct percentage of waste destined to recovery, both trend of consumption and to identify any areas clean methods. application on the part of the respective units. with regards to hazardous and non-hazardous requiring intervention in the framework of energy material. efficiency. In 2016, data regarding waste products demonstrated a notable decrease. The data is Waste recovery principally concerns materials THE CONSUMPTION OF ENERGY IN THE REFINERY comparable to 2013, inasmuch as 2014/2015 were which can be re-used, such as earth from digs, characterised by investments which involved the catalysts and used oils.

21,217,986 Energy produced Waste Products Recovered Destined by RAM 65% 7% 2% 27% (tons) or recycled for disposal 2016 27,589,307 6,366,943 Total quantity of Hazardous Non-hazardous (tons) (tons) GigaJoule Energy acquired 48% 21% 32% from abroad refuse produced refuse produced refuse produced 4,378 Renewable energy 100% produced by RAM 2016 26,322 12,564 13,758 57% 43%

20,938,094 Energy produced by RAM 67% 10% 2% 21% 28,470,100 7,527,279 2015 Energy acquired 2015 56,231 12,752 43,479 69% 31% GigaJoule from abroad 50% 21% 29% 4,727 Renewable energy 100% produced by RAM

20,353,062 2014 47,647 10,758 36,889 71% 29% Energy produced by RAM 63% 10% 2% 25% 2014 28,116,356 7,758,603 GigaJoule Energy acquired 53% 20% 28% from abroad » WASTE FROM RAM 4,691 Renewable energy 100% • Sludge resulting from the treatment • Used catalysts produced by RAM of waste water • Refuse produced by maintenance works • Dregs produced during cleaning on the units operations for tanks • Waste produced by the excavation of land for FUEL GAS FUEL OIL FUEL GPL COKE NATURAL OR ELECTRICAL THERMAL ENERGY SOLAR METHANE GAS ENERGY (STEAM) ENERGY the construction of new unitss.

62 | 2016 Sustainability Report 63 4.7 ENVIRONMENTS MONITORING AND CONTROLS

At RAM, we are committed to applying the Best The effects of our activities in the surrounding Available Techniques (BAT) in order to reduce to area are constantly monitored by organisations a minimum our impact on various environmental responsible for environmental controls. matrixes. The BATs are related to their individual sectors and are defined on a European level. In particular, over the course of 2016, ARPA (Agenzia Regionale per la Protezione dell’Ambiente) Our activity is regulated by Integrated Environmental of Messina carried out 15 inspections aimed at: Authorisation (AIA), issued by the Ministry for the Environment, which incorporates the application of • controls regarding conformity with the rules the BAT. relative to the Integrated Environmental Authorisation and the regulations in force Among the principal reference points, regulations regarding the environment regarding AIA apply those relating to best available • verifications on the correct functioning of the techniques, with which comparison is made analysers in the continuous monitoring systems between the environmental performance of the for stack emissions (SME) plants and that established by the authorisation. • verifications of the functioning of systems for the The objective of this procedure is the overall and treatment of exhaust substances (waste water) integrated evaluation of the environmental impact and discharges into the sea of a plant. • assessment of samples of interstitial gas as part of the implementation of the Soil Gas Monitoring As of today, the AIA includes all previous Protocol authorisations regarding emissions into the • sampling of the water table air, water, the earth, as well as refuse, and is • checks on the monitoring system for air quality. fundamental for the carrying out of a number of types of activity, specified by ministerial decree, including those for energy-related activities. » INTEGRATED ENVIRONMENTAL AUTHORISATION Over the course of 2016, following the identification of new BATs, we underwent a re-examination of The Integrated Environmental the AIA, as is the case for all Italian refineries. The Authorisation (AIA) is the regulation which authorises the activity re-examination takes place on a scheduled basis and conditions of a particular installation, (every 10 years in the absence of certification, guaranteeing its conformity with every 12 with ISO 14001 certification, and 16 with the requirements provided for by relative EMAS) or when new BATs are identified. We have regulations in force. therefore passed all the relative documentation to the Ministry, which will carry out the necessary verifications, a process which should be concluded before the end of 2017.

64 | 2016 Sustainability Report 65 5 RELATION WITH THE COMMUNITY, WELL-BEING FOR ALL

5.1 Valorising cultural promotion 69 5.2 Valorising social commitment 70 5.3 Valorising education in sport 70 5.4 Valorising the safeguarding of health 72 5.5 Valorising education for young people 73 5.6 Institutional relations 74 5.7 Union relations 75 5.8 Transparency and sharing 75

66 | 2016 Sustainability Report 67 5. Relations with the local territory, well-being for all

5.1

For us, the community represents a University scholarships and degree theses. natural continuation of our activity. We We would like, in particular, to underline our VALORISING CULTURAL see our role as a driver for opportunity to collaboration with the Italian Red Cross, with increase the well-being of the surrounding which we organised a series of initiatives population. aimed specifically at younger generations PROMOTION with the aim of promoting the culture of 2016 again saw our continuing support for prevention and the safeguarding of health projects of cultural and social value, and in the world of sport and in schools. Well-being is socialisation and participation. This of the Madonna del Carmelo, the Patron Saint of the our activities to cultivate a fertile exchange is why we favour involvement in events and initiatives town, a concert was also held with a nationally- of knowledge with younger generations One of the most important values arising which take place locally. famous singer. through the world of sport, and in particular from these initiatives was that of encouraging It is a source of great satisfaction for us to be able We also supported the local organisation for territorial with School and University. Interactions young people to become active citizens and to support the development of moments of cultural promotion of Milae in the organisation, together with which have led to clear examples of agents for positive change in their social entertainment which can bring enrichment to the the Municipal Administration, of the “Tono Summer development via visits to the Refinery, circles. population. Fest 2016” which took place in the new plaza situated In particular, we lent our support to the Municipal near the bay of the same name. An event which was Administration of San Filippo del Mela, in the an important tourist attraction, focusing attention organisation of a series of summer shows which on sport and well-being - thanks to the presence of integrate well into the social context and attract qualified instructors - as well as on awareness of the large audiences, also from many nearby towns. This local territory, with the organisation of excursions from year, for the 150th anniversary of the role of the the Bay of Tono to Capo di Milazzo, along particularly Municipality of San Filippo del Mela for the protection charming nature trails.

SUMMER SHOWS IN THE MUNICIPALITY OF MILAZZO In order to highlight the particularity and the great patrimony of art, nature and tradition of the Tyrrhenian area, we supported the organisation in Milazzo of two cultural and musical events. One of the manifestations was “Milazzo Castroreale Jazz” which saw an initial » CHRISTMAS IN MILAZZO series of live concerts in the mountain area We made our contribution to creating of Castroreale, and a second series in the a joyful Christmas atmosphere. In fortified city of Milazzo. Furthermore, both particular, through the commercial here and in the historical centre of Milazzo, organisation Confcommercio Messina a series of film screenings was organised in for the purchase of two large Christmas collaboration with institutions from France, trees placed in the pedestrian street, and Germany, England and the United States. with the local organisation for territorial The other event was the Preview of the promotion, for Christmas decorations both “MareFestival Salina”. The guest actors in the centre and in the suburbs. involved in the festival, before reaching the Our contribution furthermore allowed for island which was made famous by the film the organisation of the New Year’s “The Postman”, paid a visit to Milazzo, Concert with the involvement of a where a series of activities took place to multitude of people in the town centre. promote the film festival.

68 | 2016 Sustainability Report 69 5. Relations with the local territory, well-being for all

5.2 VALORISING SOCIAL COMMITMENT

With a view to developing community spirit with the surrounding area, our commitment extends to 5.3 providing support to those who help others, as always with a focus on the quality of projects. Over the last few years, in the Christmas and Easter VALORISING periods, we took part in campaigns for awareness and research promoted by nationally-famous associations such as ADMO (Association of Bone EDUCATION IN SPORT Marrow Donors), ENEA (European Neuroblastoma Association NPO) and Lega del Filo d’Oro. We are convinced that sport can represent an defibrillators in places of public interest, together On the occasion of Women’s day we presented all important educational opportunity for young people. with an increased number of people who are trained of the women in RAM with the “AISM Gardenia” in Commitment, constant practice through training to use them, will render our territory ever safer, support of research into Multiple Sclerosis. and team spirit are all values which contribute to significantly reducing the percentage of risk. We are also in constant contact with non-profit forming people who can then grow up to become Particular attention is paid to all sports associations associations and local parishes to provide adults with a marked sense of community and in the area which have a “young persons’ sector”, comfort for disadvantaged people and families increased awareness of the fundamental rules of or rather which are involved with children and through the donation of essential items. social life. teenagers. All these associations were given the Lastly, it was with extreme pleasure that we For this reason we provide support for numerous possibility of having a defibrillator and free access accepted the request from the volunteers of the As well as forming a source of self-financing, the amateur young persons’ associations in the area, to training. AIPD (The Italian Down Syndrome Association) calendar presents, over 12 months, the commitment which play an important role in bringing young Milazzo - Messina for the creation of the 2017 of the association, with initiatives aimed at helping people together through sport. In particular, we donated a defibrillator, together calendar. families and promoting social, scholastic and In 2016 our support was also extended to a project with a guarantee of maintenance for the next few professional integration for people with Down for safety in Sport in the local territory. In particular, years, to the following associations: Folgore, Syndrome. strengthened by our deep-rooted culture for safety, Gioventù Francescana, Vincenzo Patti, Academy we developed the “Sport sicuro a Milazzo (safe S.Pietro and G.S.Don Peppino Cutropia for football, sport in Milazzo)” project, together with the Italian CSI Milazzo and A.S.Volley 96 for volleyball and Red Cross, our partner for various initiatives aimed Scarabeo for basketball. The personnel of the THE RESTORATION OF THE EFFIGY OF SAN FRANCESCO DI PAOLA at awareness. sports associations were also trained to use the defibrillator. On the occasion of the 600th anniversary and we made a significant contribution. of the birth of the Saint, the wooden statue The Sanctuary, which was founded and All the other sports associations involved with young of San Francesco di Paola, the co-patron of constructed by the same San Francesco people which already have a defibrillator such as, for example, Nino Romano (volleyball), Minibasket and Milazzo, underwent extensive restoration. di Paola during his stay in Milazzo, in the Svincolatini (basketball), had the opportunity to have The Parish Priest, Mario Savarese, in his second half of the 15th century, is a historical free training. role as Rector of the Sanctuary where the and artistic attraction and is visited by The project was born as an opportunity to satisfy statue is exhibited, organised a collection a considerable number of tourists and requirements for safety in sport and, at the same We lastly wanted to highlight the importance that we to raise funds for the restoration works, pilgrims who come from all over the world. time, to provide as widespread as possible awareness give to training in this field with a further practical for life-saving and reanimation techniques. An gesture, providing the Red Cross with a defibrillator ever-more widespread presence of semi-automatic which will be put to practical use for these objectives.

70 | 2016 Sustainability Report 71 5. Relations with the local territory, well-being for all

5.4 VALORISING THE SAFEGUARDING OF HEALTH

Our collaboration with the Italian Red Cross also » A SELECTION OF SUBJECTS took the form of activities to focus public opinion on REGARDING THE CULTURE OF FIRST AID how first aid can save lives in every-day situations. In particular, we agreed to develop a new training 5.5 project aimed at students in the third and fourth year of secondary school in Milazzo and San Filippo del Mela. VALORISING EDUCATION Via workshops, in which class-based lessons Wounds and were alternated with hands-on practice, qualified haemorrhages volunteers from the Italian Red Cross presented the FOR YOUNG PEOPLE youngsters with interesting themes regarding first Burns and trauma aid, underlining the importance of first aid and the It is our firm belief that businesses can play a The delegations from each of the schools developed correct carrying out of the manoeuvres which allow crucial role in the development of schools and and discussed subject proposed for resolution in people to assist while waiting for qualified help to Cardiopulmonary universities, helping students to increase their the European Parliament, in English. arrive. Resuscitation individual knowledge and competence. Approximately 1,300 students took part with » A visit to the Raffineria di Milazzo plant by enthusiasm and interest in 76 hours of lessons, We therefore interpret our participation in the life French school managers, following the positive carried out via 19 sessions held in seven different of the local territory by developing a significant experience which took place last year. The visit schools in the area. Life-saving manoeuvres commitment to promoting presentations and formed part of a project which, taking its cue from guided tours within the plants, as well as tutoring the work of the European Commission regarding in apprenticeships. the causes and consequences of early school leaving, carries forward the requirement to identify School visits in 2016 brought 297 students from good educational practices via the discussion and various educational institutes, not only from the sharing of experiences with educational colleagues Province of Messina, to the Refinery. and partners from other European organisations. The French school managers also visited various 17 students took part in apprenticeships, as part scholastic organisations in Messina and the of their study programmes, at the Refinery; they province. were principally from the faculties of Engineering, Chemistry, Information Technology and Economics » Erasmus+ at the Raffineria di Milazzo, the from the Universities of Messina, Palermo and European Union programme for the education and Catania. training of young people, through which we hosted Italian, Romanian and Lithuanian Economics Other projects promoting education for young students accompanied by their respective teachers. people to which we lent our support were: It was an opportunity to discover the world of education and research on an international level in » GA Mylae - The Young European Parliament at technical and technological fields, as well as in the the Castello di Milazzo, which saw a solid group of field of economics. 50 teenagers from 6 high schools from the Province of Messina, joined by students from other schools in » With the BEST (Board of European Students Milazzo as listeners, all involved in a simulation of of Technology) from the University of Messina, the Plenary Assembly of the European Parliament. we continued our collaboration for another 2016 Summer Course aimed at students from all European Universities.

72 | 2016 Sustainability Report 73 5. Relations with the local territory, well-being for all

5.6 5.7 INSTITUTIONAL RELATIONS UNION RELATIONS

We are constantly committed to exchanges with work groups, service conferences, hearings with Correct, constant and transparent industrial and the Environment), we defend and protect national and local institutions with a view to institutions and/or technical organisations. relations represent one of the cornerstones of the employment, paying particular attention to aspects sharing information regarding our activities, and Only through constructive dialogue reciprocal company management. Together with the RSU of environment and safety. The elections which to involving the local community. improvements can be achieved. (United Trade Union Representation) and the RLSA took place in 2016 for the renewal of RSU-RLSA For this purpose, we regularly take part in meetings, (Representation of Workers for Health, Safety furthermore conferred full representation to these organisations.

Considering the importance of our company within its sector, there are colleagues who hold the role of Territorial Secretaries for the sector trade unions (FILCTEM-CGIL, FERMA-CISL and UILTEC- UIL), who contribute in a constructive manner to defining union policies and supporting the RSU in wider-ranging and more complex themes.

5.8 TRANSPARENCY AND SHARING

Our communication policy mainly concerns initiatives of territorial involvement. The website provides constant information regarding our activities, in particular via the News section. This is a channel of direct communication which is increasingly appreciated and which will therefore be developed further. In 2016, our website registered 115,061 page views from approximately 25,000 individual visitors.

Our website also offers the opportunity to consult the 2016 Sustainability Report.

» OPENING OF THE GA MYLAE YOUNG EUROPEAN PARLIAMENT IN THE CASTELLO DI MILAZZO

74 | 2016 Sustainability Report 75 6 PROMOTING GROWTH

6.1 Distribution of added economic value 78 6.2 Our correlated activities, working together to be competitive 80 6.3 The distribution of values amongst local businesses 82 6.4 Port activities 84

76 | 2016 Sustainability Report 77 6. Promoting growth

6.1 PERSONNEL FINANCIERS In 2016, we distributed approximately 39% of the total The quota distributed under the form of fees to economic value to the personnel, a total of 48 million financiers amounts to 7 million euros. Fees paid to DISTRIBUTION OF ADDED euros, an increase over previous years. The fact that financiers represent the sum paid for fees regarding the majority of our employees come from Milazzo financing from partners and banks. The resources and the Valle del Mela allows for the transformation of involved in investments for the company come ECONOMIC VALUE the quota distributed to the personnel into purchasing mainly from the various partners, with whom project power, bringing value to the local territory. The quota financing has been set up. The consortium nature of our Company means then distributed to our main partners: personnel, of economic value distributed is made up of salaries, Over the course of 2016, financing for 110 million that the crude oil we refine is supplied by the institutions, financiers and the community. social security contributions, amounts set aside for the euros was obtained from the European Investment shareholders Eni and Q8, who pay a fee which is Severance Pay Fund, and additional services for the Bank in the framework of the Juncker Programme. equal to the costs sustained, including taxes paid, In 2016, the total economic value generated personnel. Level two collective agreements establish As well as the important economic aspects of this net of revenue. The balance sheet produced at the amounted to 123 million euros, an increase of periodical retribution for personnel according to goals financing, it also allowed us to consolidate our end of the year is therefore always necessarily 11.5 million compared to 2015. Without counting reached and regulations in force and in line with the standing in the European framework. balanced, showing neither profits or losses. The the quota held by the company (amortisation for strategic objectives of RAM for the valoraisation of added economic value arises from the difference 59.8 million euros), the largest quota is distributed people. between revenue and intermediate production among the staff. costs. It represents wealth which is generated and Personnel costs (data expressed in thousands of euros) Salaries 34,187 Social Security Contributions 10,099 Determination of added value according to GBS guidelines (data expressed in thousands of euros) Severance Pay fund 2,136

Formation of Added Value 2014 2015 2016 Other personnel costs 250 Services to personnel 1,408 Revenue from sales and services 711,165 601,992 561,392 TOTAL 48,079 Other revenue and income 7,950 8,799 10,364

Capitalised costs 1,474 1,604 2,127 INSTITUTIONS Payments to Institutions (data in Euros) Value of production 720,590 612,395 573,882 Institutions received a quota equal to 7.9 million Income tax 4,413,356 Acquisition of external materials and services (611,970) (496,456) (446,538) euros, including duties, direct and indirect taxes, contributions and annual fees. The main items Other operative costs (7,025) (4,484) (4,339) - of which IRES 3,847,647 which make up the added value distributed to - of which IRAP 746,737 Intermediate production costs (618,994) (500,941) (450,877) institutions are: IRAP - Regional Income Tax, IMU - Global gross added value 101,595 111,454 123,005 Property Tax, TARI - Refuse Tax and TASI - Indivisible Other Taxes 3,057,444 Services Tax IRSE - Corporate Income Tax, and for Note: the section referring to extraordinary components has been reclassified according to new accounting principles. - of which IMU/Tasi 1,934,476 “Contributions and annual fees”, the contribution for experimental combustion centres, destined for - of which taxes on SO /NOx 2 232,325 the Special company “Innovhub - Experimental emissions Stations for industry” as set out by the ministerial Distribution of economic value (in thousands of euros) G4-EC1 INDICATOR - other 890,643 decree of 10 March 2015 issued By the ministry for 2014 2015 2016 Economic Development. Contributions and annual fees 467,547

Remuneration for personnel 43,897 47,307 48,079 Total 7,938,346

Remuneration for financiers 7,433 7,434 7,026

Remuneration to institutions 5,326 4,449 7,938 THE COMMUNITY The quota of added economic value destined for the to the territory in various areas, aimed at charity Remuneration to the community 144 142 168 community amounts to approximately 168 thousand associations and associations for sporting activities Global Net Added Value 56,800 59,342 63,211 euros. for young people, social activities, contributions for Amortisation 44,796 52,122 59,794 It supports social activities aimed at benefiting schools, and the funding of research pHDs (see the the local territory. This item refers principally to chapter “Relations with the community, well-being Global Gross Added Value 101,596 111,464 123,005 contributions in support of the development of for all”). activities to involve the population with regards

78 | 2016 Sustainability Report 79 6. Promoting growth

acquired value and/or technical-qualitative, safety points system (from 1 to 49) and through administrative 6.2 and environmental aspects, are defined as critical. verification regarding the solidity of the supplier. These suppliers are subject to a second, more The passing of all checks renders the candidate detailed, verification stage, which requires the suitable to be inserted into the register of suppliers OUR CORRELATED ACTIVITIES, compilation of a further questionnaire. and, therefore, to begin collaboration when necessary. There are 1,127 active qualified suppliers in the The assessment of these questionnaires, which is register, of which 380 are critical and 747 are non- WORKING TOGETHER TO BE carried out by our rating team, takes place through a critical. In 2016, critical qualified suppliers totalled 29, and » THE SECOND STAGE OF SUPPLIER non-critical suppliers totalled 102, for an overall total COMPETITIVE VERIFICATION of 131 qualified suppliers.

» FIGURES FOR CORRELATED ACTIVITIES Organisational structure Over the course of 2016, the number for Supplies of company employees entering the Refinery on a daily basis was, on average, more than one thousand units, with daily Consistency of information average peaks of around two thousand technology structures during this year’s Turnaround. Human resources, including the geographic origin of the personnel THIRD-PARTY COMPANY PERSONNEL PRESENCES (daily averages) Health, safety and environment 1,972 Human rights 1,029

Training Excluding the period During the period Certification and qualifications of the Turnaround of the Turnaround Our network of suppliers - the chain of third-party The qualification process for third-party companies companies which we rely on - represents a very is subdivided into various stages. The first involves WITH CONFIRMING, COMPANIES This innovation finds concrete applications important element from a competitive point of the filling out of a standard questionnaire which IN THE SUPPLY CHAIN IMPROVE in the possibility for our suppliers to benefit view, as well as a significant increase in workforce regards general information on the company and and competence in important moments. its activity, a number of administrative documents CIRCULATING CAPITAL from the Confirming platform. and any references. This questionnaire, which This is an innovative web-based solution In 2016 we participated in the “Production The suppliers are therefore an important component can be downloaded from our website, is aimed at for the discounting of invoices which allows Chain Programme” promoted by Intesa from a sustainability point of view. Correlated all companies which which to be considered for access to credit with more advantageous collaborators are required to share and apply the collaboration. Sanpaolo, a project created with the conditions compared to those available on elevated standards regarding the health and safety The questionnaire allows us to also examine in objective of developing levels of excellence the market and to improve the management of personnel and the protection of the environment further detail aspects relative to sustainability in production chains in the Italian of circulating capital within the supply chain. that we have defined. (impact on safety, training, the protection of human entrepreneurial system. rights etc.). Fundamentally, the companies which The Production Chain Programme defines a To this end, we have adopted a specific system for The results of the questionnaires, combined participate in Confirming can obtain the new model for collaboration between RAM assessing the suitability of companies, in such a way with company data and the documentation and immediate payment from the bank of invoices as to be able to ensure the existence of technical, certifications held by the company, allow for the and collateral companies with regards to the issued to RAM. economic and financial capabilities which respond to elaboration of a qualification rating which classifies banking system, with the aim of guaranteeing legal requirements, and also ensure that third-party every company present in the portal. more favourable conditions, facilitating access For us, this is therefore a specific desire companies can also contribute to our continuous Suppliers which are capable, with their services, to credit and structuring specific products for to assist our suppliers via an initiative of improvement. of conditioning company performance in terms of companies within the production chain. economic sustainability.

80 | 2016 Sustainability Report 81 6. Promoting growth

THE DISTRIBUTION OF SPENDING 6.3 NORTH ITALY (turnover in millions of euros) THE DISTRIBUTION 2014 2015 2016 TOTAL OVERSEAS 110.3 122.5 104.4 OF VALUE AMONGST LOCAL 2014 2015 2016 23.2 23.4 41.1 CENTRAL ITALY ENTERPRISES 2014 2015 2016 TOTAL ITALY 22.5 13.7 21 2014 2015 2016

224 266.6 262.2

SOUTHERN ITALY

2014 2015 2016 SICILY

of 110.1 91.2 131.3 136.8 which 80.5%

TURNOVER IN SICILY BY PROVINCE Messina Milazzo (turnover in millions of euros) of 62.5 which 38.4 57% 62%

Trapani Palermo 0,1 3 0% 3%

Enna 1.3 Catania 1% Agrigento 2.4 0 2% 0% In 2016 we recorded an increase in turnover with were then destined to companies located in Milazzo. third-party companies, also with reference to those from Southern Italy, which represent 45% of overall Third-party companies operating together with TOTAL SICILY Caltanisetta turnover. the Refinery are a significant driver for the local 2.4 Siracusa The turnover of Sicilian companies (80% of Southern economy. Our activities of maintenance, particularly 2% 36.8 Italy) saw an increase to 110 million euros, with regarding the Shut-down, have repercussions on 110.1 the province of Messina contributing to the tune of collateral activities, such as hotels, restaurants and 33% Ragusa 56.7%. As in 2015, approximately 40 million euros commercial activity. 80.5% 1.6 1%

82 | 2016 Sustainability Report 83 6. Promoting growth

6.4 PORT ACTIVITIES

The value of the Refinery and the effects of our activities have positive repercussions from an economic point of view, also with regards to the local port system. As well as local taxes, we also pay, annually, approximately 388 thousand euros in state fees to the Messina Port Authority, which receives almost 10 million euros per year thanks to the payments from ships which moor at the Refinery’s jetties. These are just a few figures which help to analyse the income generated by port traffic and which quantify the positive effects that RAM has on the Port of Messina system.

There are approximately 600 ships which moor at the Refinery’s jetties, generating freight traffic of 17,168,452 tons of crude oil, refined products and liquid gases. This represents approximately 75% of the total movement in the ports of Messina, Milazzo and Lipari, or rather those regarding the Messina Port Authority. Furthermore, in 2016 alone, the VAT revenue from the importing via sea of crude oil from non-European Community countries was 505 million euros.

It is also due to this element that the Messina Port Authority is one of the most important in Italy.

84 | 2016 Sustainability Report 85 APPENDIX

Management systems and certification 88 Committees and sub-committees 89 Main indicators of sustainability 90 Table of GRI correspondence 92 Auditor’s report 96

86 | 2016 Sustainability Report 87

MANAGEMENT SYSTEMS COMMITTEES AND CERTIFICATION AND SUB-COMMITTEES

ENVIRONMENT Committees and Sub-committees are founded with particular competences regarding specific subjects, UNI EN ISO 14001:2004 to provide support for the Integrated Management System, in order to guarantee the coherent and correct Fields of application: the refining of crude oil and semi-processed products received via sea, storage and management of activities. handling of products via sea, tankers and pipeline, the production of electrical energy and steam for internal use via multifuel boilers, service plants (treatment of industrial sewage, preliminary depositing of waste). CCSSA - CENTRAL COMMITTEE FOR SAFETY, HEALTH, ENVIRONMENT Certified by DNV. AND ENERGY It determines company policies, strategies for continuous improvement, and the performance objectives of QUALITY the Integrated Management System. The Committee is composed of: the Managing Directors, the Director UNI EN ISO 9001:2008 General , the Technical Director and the Manager of the Safety, Protection and Prevention Function. Field of application: the activities of production, storage and handling of propylene, the highest added value stream among those produced. The requirements are regularly verified by an internal audit system. CCSSA - COMMITTEE FOR SAFETY, HEALTH, ENVIRONMENT Certified by Bureau Veritas. AND ENERGY/LEVEL 1 LINE COMMITTEE Field of application: laboratories for the analysis of raw materials, fuels for internal consumption and It handles the definition, realisation, monitoring and coordination of development plans for the reaching discharges into the sea. of objectives and performance indicators. It is composed of the Director General, the Technical Director, Certified by Bureau Veritas. and all the Function Managers.

CHEMICAL LABORATORY LEVEL 2 (OR FUNCTION) AND LEVEL 3 (OR UNIT) LINE COMMITTEES ISO/IEC 17025:2005 These carry out a fundamental role for the improvement of internal communication on the themes of Field of application: technical competence and laboratory management in conformity with the requirements HSE - Health, Safety and the Environment, defined by the CSSA (Level 1 Committee): the managers transfer of the regulation for tests relating to Refinery oil, fuel gases, and water. information to their collaborators to then inform the directors of the feedback collected. The level 2, or Certified by ACCREDIA. Function, Committees are made up of the Function manager and their direct collaborators, up to Unit Managers. HEALTH AND SAFETY AT WORK The level 3, or Unit, Committees are made up of the Unit Manager and their direct collaborators. OHSAS 18001 Fields of application: the refining of crude oil and semi-processed products received via sea, storage and SAE Sub-committee handling of products via sea, tankers and pipeline, the production of electrical energy and steam for internal Analyses and verifies reports of accidents, undesirable events and economic losses. use via multi-fuel boilers, service plants (treatment of industrial sewage, preliminary depositing of refuse). Certified by DNV. SPAD Sub-committee Coordinates the activities in the SGI framework with regards to external companies and contractors. SAFETY UNI 106177 SMMI Sub-committee Field of application: the prevention and management of accidents, developed in respect of the requirements Analyses and verifies activities for the improvement and modification of plants and processes. specified in the new relative regulation (Legislative Decree 105/2015). SVSC Coordination ENERGY Deals with the logistical management and monitoring of field visit activities. UNI CEI EN ISO 50001:2011 Fields of application: the management of energy in the process of refining of crude oil and semi-processed products received via sea, tankers and pipeline, the production of electrical energy and steam for internal use via multi-fuel boilers, service plants (treatment of industrial sewage) Certified by DNV.

88 | 2016 Sustainability Report 89 Main indicators of sustainability

MAIN INDICATORS OF SUSTAINABILITY

Indicator Unit of measurement 2014 2015 2016 Indicator Unit of measurement 2014 2015 2016

Raw materials Safety Crude oil 7.99 8.74 8.72 (number Frequency index of employee and contractor of accidents every Semi-processed products Million tons 1.07 0.79 0.54 0 0.24 0.24 accidents million hours Other products used for the process of refining 0.19 0.17 0.10 worked) Finished products (number LPG 90,335 96,150 95,135 of calendar days Propylene 97,512 76,358 97,559 Index of gravity of employee and contractor accidents lost per year for 0 0.95 0.72 every thousand Naphtha 1,133,369 1,295,931 1,290,747 hours worked) Petrol 1,859,809 1,683,540 1,731,978 Tons Accidents involving RAM personnel Number 0 0 0 Jet Fuel 243,425 204,083 276,017 Accidents involving external companies Number 0 1 1 Diesel 4,021,613 4,531,850 4,051,425 Environment Fuel oils 756,306 937,120 768,384 Air Sulphur 88,107 102,842 94,336 Nox 1,649 1,673 1,659 Employment So2 3,196 2,862 3,065 Employees in service 605 611 624 Volatile Organic Compounds (VOC) Tons 989 1,090 1,085 - of which are resident in the Province of Messina 588 593 603 PM 75 77 37 Employees on the payroll 608 604 615 Number CO 549 512 567 Employees with an fixed-term contract 6 6 8 Total direct emissions of greenhouse gases Million tons 1.88 1.86 1.83 Employees with an indefinite-term contract 599 598 607 Energy efficiency Employees subject to performance evaluation 226 144 165 Energy acquired from outside 7,758,603 7,527,279 6,366,943 Training 15,458 15,488 17,611 Energy produced by RAM 20,353,062 20,938,094 21,217,986 Hours GigaJoules Average hours of training per employee 25 25 28 Renewable energy produced by RAM 4,691 4,727 4,378 Spending on training Euros 258 221 189 Overall energy consumption 28,116,356 28,470,100 27,589,307 Union relations % ee self-produced/ee total consumed % 44 43 51 Percentage of employees covered by collective % 100 100 100 Water agreement contracts Total amount of water drawn Cubic metres 8,146,862 8,386,411 8,234,248 Hours of worker strikes Number 264 0 553 Water from wells % 48.50 50.30 46.00 Economic value and Investments Water from other sources (municipality, bilge etc...) % 5.90 6.60 6.70 Value of production 720,590 612,395 573,882 MISE water % 28.20 30.60 34.60 Intermediate production costs (618,994) (500,941) (450,877) Water and steam acquired from Termica Milazzo % 17.50 12.50 12.70 Economic value generated / distributed 101,595 111,464 123,005 Recycled/reused water Cubic metres 1,784,502 1,670,000 2,437,769 - Distributed to the personnel 43,897 47,307 48,079 Thousands of euros Refuse - Fees to financiers 7,433 7,434 7,026 Quantity of refuse produced 47,647 56,231 26,322 - To institutions 5,326 4,449 7,938 - of which is hazardous 10,758 12,752 12,564 - To the community 144 142 168 - of which is not hazardous Tons 36,889 43,479 13,758 To the company (Amortisation) 44,796 52,122 59,794 Total amount of refuse recovered or recycled 33,778 38,899 15,071 Total investments Millions of euros 104 122 89 Refuse produced destined for disposal 13,869 17,332 11,251 Suppliers Transportation Total turnover 247.14 290.99 303.27 Total volume of product distributed 8.3 8.9 8.4 - Overseas 23.17 23.43 41.1 - of which by sea Million tons 7.4 7.7 7.5 - Italy 223.97 267.55 262.16 - of which by land 0.9 1.3 0.9 - North 110.28 122.48 104.38 Millions of euros - Central 22.46 13.74 20.98 - South 91.23 131.33 136.80 of which in the Province of Messina 53.57 63.68 62.46 of which in Milazzo 44.3 39.81 38.48

90 | 2016 Sustainability Report 91 Table of GRI correspondence

TABLE OF GRI CORRESPONDENCE

GRI – G4 Indicators References GRI – G4 Indicators References (paragraph - comments) (paragraph - comments) Statement from the most senior decision-maker of the organization Our Governance G4-1 (such as CEO, chair, or equivalent senior position) about the relevance Letter from the President - Strategy and analyses of sustainability to the organization and the organization’s strategy G4-34 Governance structure of the organization Management system and code of ethics - G4-2 Description of key impacts, risks and opportunities Letter from the President An overview of the Raffineria di Milazzo Cover Governance Letter from the President Processes for evaluating the highest governance body’s own performance G4-3 Name of the organization - G4-44 - on sustainability issues An overview of the Raffineria di Milazzo An overview of the Raffineria di Milazzo Technology in action: the production cycle G4-4 Primary brands, products, and services Principles and criteria of reporting and finished products G4-48 Body that approves the Sustainability Report - G4-5 Location of the organization’s headquarters An overview of the Raffineria di Milazzo An overview of the Raffineria di Milazzo Approach towards sustainability Number of countries where the organization operates, and names of G4-56 Corporate mission and values, codes of conduct and principles - countries where either the organization has significant operations or Technology in action: the production cycle G4-6 Management system and code of ethics that are specifically relevant to the sustainability topics covered in the and finished products Management system and code of ethics report - G4-7 Nature of ownership and legal form An overview of the Raffineria di Milazzo G4-57 Mechanisms for for seeking advice about unethical or unlawful behavior The guidelines that the Refinery applies are included in the 231 model of organisation, Ethics and Integrity An overview of the Raffineria di Milazzo management and control - G4-8 Markets served Management system and code of ethics Technology in action: the production cycle - and finished products G4-58 Mechanisms for reporting concerns about unethical or unlawful behavior The guidelines that the Refinery applies Technology in action: the production cycle are included in the 231 model of organisation, and finished products management and control - G4-9 Scale of the organization Principles and criteria of reporting Distribution of added economic value - - Ram in numbers Main indicators of sustainability - Organisational profile Our people: An overview of the Raffineria di Milazzo the daily driver of innovation G4-10 Breakdown of employees by contract, region and gender G4 - DMA - - Our Governance Main indicators of sustainability - Percentage of total employees covered by collective bargaining G4-11 Main indicators of sustainability Investments, the fuel for our future agreements - Technology in action: the production cycle Distribution of added economic value and finished products G4-12 Describe the organization’s supply chain - G4-EC 1 Direct economic value generated and distributed Distribution of added economic value Our correlated activities, working together G4-EC 4 Financial assistance received from government Investments to be competitive Principles and criteria of reporting Relations with the local community, - Economic performance indicators well-being for all G4-13 Significant changes during the reporting period No significant modifications compared - to the previous year G4 - DMA Distribution of added economic value Explanation of how the precautionary approach or principle is addressed - G4-14 Management system and code of ethics by the organization Our correlated activities, working together List externally developed economic, environmental and social charters, to be competitive Development and impact of infrastructure investments and services Relations with the local community, G4-15 principles, or other initiatives to which the organization subscribes or Management system and code of ethics G4-EC 7 which it endorses supported well-being for all Institutional relations Principles and criteria of reporting - - G4-16 Memberships of associations G4 - DMA Confindustria Messina, Unione Petrolifera, Our correlated activities, working together Confindustria Energia to be competitive Companies included in the consolidated financial statements Our correlated activities, working together G4-17 Principles and criteria of reporting Proportion of spending on local suppliers at significant locations to be competitive and an indication of the companies not included in the report G4-EC 9 of operation - G4-18 Process for defining report boundaries and content Principles and criteria of reporting Main indicators of sustainability Main indicators of sustainability G4-19 Material aspects identified Materiality analysis - Identified material aspects G4 - DMA G4-20 Boundary for the report for each material aspect (within the organization) Principles and criteria of reporting Technology in action: the production cycle and boundaries and finished products G4-21 Boundary for the report for each material aspect (outside the organization) Principles and criteria of reporting Technology in action: the production cycle and finished products G4-EN 1 Materials used by weight or volume G4-22 Explanation of the effect of any restatements of calculations None - Main indicators of sustainability G4-23 Explanation of significant changes from previous reporting periods None Principles and criteria of reporting - G4-24 List of stakeholder groups engaged by the organization Materiality analysis G4 - DMA Main indicators of sustainability Principles and criteria of reporting - - Energy Materiality analysis G4-25 Basis for identification and selection of stakeholders with whom to engage G4-EN 3 Energy consumption within the organization Energy - Relations with the local community, Energy well-being for all G4-EN 5 Energy intensity - Stakeholder engagement Approach to stakeholder engagement, including frequency of engagement Relations with the local community, Main indicators of sustainability G4-26 by type and by stakeholder group well-being for all OG2 Energy produced by renewable sources by origin Energy Materiality analysis - OG3 Energy saving from conservation and improvements in terms of efficiency Energy Key topics and concerns that have been raised through stakeholder Relations with the local community, Environmental performance indicators G4-27 engagement, and how the organization has responded to those key topics Investments, the fuel for our future well-being for all and concerns, including through reference to what is stated in the report G4-EN 6 Reduction of energy consumption - - Energy Investments for the environment Principles and criteria of reporting Principles and criteria of reporting G4 - DMA - - G4-28 Reporting period Water The present Sustainability Report refers to the year 2016 (01/01/2016 - 31/12/2016) G4-EN 8 Total water withdrawal by source Water Principles and criteria of reporting - G4-EN 9 Water sources significantly affected by withdrawal of water Water G4-29 Date of most recent previous report 2016 Sustainability Report was published Water Report profile the 2nd of May 2016 G4-EN 10 Percentage and total volume of water recycled and reused - G4-30 Reporting cycle Annual Main indicators of sustainability Principles and criteria of reporting G4-31 Contact point for questions regarding the report or its contents Transparency and sharing - Main indicators of sustainability The ‘in accordance’ option the organization has chosen; GRI Content Index; G4-32 Principles and criteria of reporting - reference to the External Assurance G4 - DMA Investments for the environment G4-33 External Assurance of the report Auditor's report - Air - Greenhouse gases

92 | 2016 Sustainability Report 93 Table of GRI correspondence

References References GRI – G4 Indicators (paragraph - comments) GRI – G4 Indicators (paragraph - comments)

G4-EN 15 Direct greenhouse gas (GHG) emissions Greenhouse gases G4 - DMA - G4-EN 18 Greenhouse gas (GHG) emissions intensity Greenhouse gases G4-HR3 Total number of incidents of discrimination and corrective actions taken None G4-EN 19 Reduction of greenhouse gas (GHG) emissions Greenhouse gases Management system and code of ethics G4-EN 21 NO , SO , and other significant air emissions Air - X X G4 - DMA Human rights Our correlated activities, working together Principles and criteria of reporting to be competitive - Management system and code of ethics G4 - DMA Main indicators of sustainability Percentage of new suppliers that were screened using human rights - - G4-HR10 criteria Our correlated activities, working together Waste products to be competitive G4-EN 22 Total water discharge by quality and destination Water Principles and criteria of reporting - Waste products G4 - DMA Relations with the local community, G4-EN 23 Total weight of waste by type and disposal method - well-being for all Main indicators of sustainability G4-EN 24 Total number and volume of significant spills Main indicators of sustainability Percentage of operations with implemented local community engagement, Relations with the local community, G4-SO1 impact assessments, and development programs well-being for all OG6 Volume of flared and vented hydrocarbon Safety systems: the torch Principles and criteria of reporting G4 - DMA Management system and code of ethics - Management system and code of ethics Technology in action: the production cycle G4 - DMA - and finished products Our people: the daily drivers of innovation - G4-SO4 Communication and training on anti-corruption policies and procedures - Investments for the environment The guidelines that the Refinery applies Extent of impact mitigation of environmental impacts of products G4-EN 27 Investments for the environment are included in the 231 model and services of organisation, management and control Technology in action: the production cycle and finished products G4-SO5 Confirmed incidents of corruption and actions taken None - Main indicators of sustainability G4 - DMA Management system and code of ethics OG8 Benzene, lead and sulfur content in fuels - Management system and code of ethics The quantity of benzine, sulphur and lead Society - G4-SO6 Total value of political contributions by country and recipient/beneficiary present in fuels produced by us Our 231 Model does not provide are significantly within the standards specified for contributions to political subjects in relative regulations in force G4 - DMA Management system and code of ethics Principles and criteria of reporting G4 - DMA - Total number of legal actions for anti-competitive behavior, anti-trust, Investments for the environment G4-SO7 None and monopoly practices and their outcomes

Monetary value of significant fines and total number of non-monetary G4-EN 29 None G4 - DMA - sanctions for non-compliance with environmental laws and regulations Monetary value of significant fines and total number of non-monetary G4-SO8 None G4 - DMA Investments for the environment sanctions for non-compliance with laws and regulations

G4-EN 31 Total environmental protection expenditures and investments by type Investments for the environment Our correlated activities, working together G4 - DMA Principles and criteria of reporting to be competitive - Main indicators of sustainability Percentage of new suppliers that were screened using criteria for impacts Our correlated activities, working together G4-SO9 - on society to be competitive Accidents, RAM wins 6 - 0 G4 - DMA Protocol for the protection of health - OG13 Number of process safety events, by business activity Accidents, RAM wins 6 - 0 Union relations - Our people: the daily driver of innovation Union relations Percentage of total workforce represented in formal joint management- - G4-LA 5 worker health and safety committees that help monitor and advise on Main indicators of sustainability occupational health and saftey programs - Management system and code of ethics Type of injury and rates of injury, occupational diseases, lost days, Accidents, RAM wins 6 - 0 G4-LA 6 and absenteeism, and total number of work-related fatalities, by region - and by gender Main indicators of sustainability Social performance indicators work practices Workers with high incidence or high risk of diseases related to their G4-LA 7 Protocol for the protection of health occupation

G4-LA 8 Health and safety topics covered in formal agreements with trade unions Union relations

G4 - DMA Our people: the daily drivers of innovation Average hours of training per year per employee by gender, and by G4 - LA 9 Our people: the daily drivers of innovation employee category Principles and criteria of reporting - Main indicators of sustainability G4 - DMA - Our people: the daily drivers of innovation Programs for skills management and lifelong learning that support Our people: the daily drivers of innovation G4 - LA 10 the continued employability of employees and assist them in managing - career endings Main indicators of sustainability G4 - DMA Our people: the daily drivers of innovation Percentage of employees receiving regular performance and career G4 - LA 11 Main indicators of sustainability development reviews, by gender and by employee category G4 - DMA Our people: the daily drivers of innovation Ratio of basic salary and remuneration of women to men by employee G4 - LA 13 Main indicators of sustainability category, by significant locations of operation Percentage of new suppliers that were screened using labor practices Our correlated activities, working together G4 - LA 14 criteria to be competitive Our correlated activities, working together to be competitive Significant actual and potential negative impacts for labor practices G4 - LA 15 - in the supply chain and actions taken Plant safety a system characterised by excellence

94 | 2016 Sustainability Report 95 defining the content and the quality of a sustainability report set out in the “G4 Sustainability Reporting Guidelines”, and are summarised as follows:

 comparing the financial information reported in chapter “Distribution of added economic value” of the Report with the information included in the Company’s financial statements as of 31 December 2016 on which we issued our audit opinion, in accordance with article 14 of Legislative Decree no. 39 of 27 January 2010, on 10 April 2017;  analysing, through inquiries, the governance system and the process for managing the INDEPENDENT AUDITORS’ LIMITED ASSURANCE REPORT ON THE sustainability issues relating to the Company’s strategy and operations; SUSTAINABILITY REPORT  analysing the process aimed at defining the significant reporting areas to be disclosed in the Report, with regard to the methods for their identification, in terms of priority for the various stakeholders, as well as the internal validation of the process findings; To the Board of Directors of  analysing the processes underlying the generation, recording and management of quantitative Raffineria di Milazzo SCpA data included in the Report. In detail, we carried out:

‐ meetings and interviews with the management of Raffineria di Milazzo SCpA to achieve a general understanding of the information, accounting and reporting systems We have carried out a limited assurance engagement on the Sustainability Report (hereinafter the in use to prepare the Report, as well as of the internal control processes and “Report”) of Raffineria di Milazzo SCpA (hereinafter the “Company”) for the year ended 31 December procedures supporting the collection, aggregation, processing and submission of the 2016. information to the function responsible for the Report preparation; ‐ a sample-based analysis of the documents supporting the preparation of the Report, in order to obtain evidence of the reliability of processes in place and of the internal Directors’ responsibility for the Sustainability Report control system underlying the treatment of the information relating to the objectives disclosed in the Report; The Directors are responsible for preparing the Sustainability Report in compliance with the G4 Sustainability Reporting Guidelines defined in 2013 by the GRI - Global Reporting Initiative, as  analysing the internal consistency of the qualitative information described in the Report and indicated in the paragraph “Principles and criteria of reporting” of the Report, and for that part of its compliance with the guidelines identified in the preceding paragraph “Directors’ internal control that they consider necessary to prepare Sustainability Report that is free from material responsibility for the Sustainability Report”; misstatement, whether due to fraud, unintentional behaviours or events. The Directors are also  obtaining a representation letter, signed by the legal representative of Raffineria di Milazzo responsible for defining the sustainability performance targets of Raffineria di Milazzo SCpA, for SCpA, on the compliance of the Report with the guidelines identified in the paragraph reporting the sustainability results, as well as for identifying the stakeholders and the significant “Directors’ responsibility for the Sustainability Report”, as well as the reliability and aspects to be reported. completeness of the disclosed information.

Our limited assurance work was less in scope than a reasonable assurance engagement performed in Auditor’s responsibility accordance with ISAE 3000 (reasonable assurance engagement) and, consequently, it does not provide us with a sufficient level of assurance necessary to become aware of all significant facts and We are responsible for the preparation of this report on the basis of the work performed. We circumstances that might be identified in a reasonable assurance engagement. conducted our engagement in accordance with International Standard on Assurance Engagements 3000 (Revised) – Assurance Engagements other than Audits or Reviews of Historical Financial Information (ISAE 3000), issued by the IAASB (International Auditing and Assurance Standards Conclusion Board) for limited assurance engagements. The standard requires that we comply with applicable ethical requirements, including professional independence, and that we plan and perform our work to Based on the work performed, nothing has come to our attention that causes us to believe that the obtain limited assurance that the Report is free from material misstatement. The procedures consisted Sustainability Report of Raffineria di Milazzo SCpA as of 31 December 2016 has not been prepared, in in interviews, primarily of company personnel responsible for the preparation of the information all material respects, in compliance with the “G4 Sustainability Reporting Guidelines” defined in 2013 presented in the Report, analysis of documents, recalculations and other verification procedures in by the GRI - Global Reporting Initiative as disclosed in the paragraph “Principles and criteria of order to obtain evidence deemed appropriate. reporting” of the Report.

The procedures we performed consisted in verifying compliance of the Report with the principles for Rome, 21 April 2017

PricewaterhouseCoopers SpA

Signed by 2 of 3 Luca Bonvino (Partner)

This report has been translated from the original, which was issued in Italian, solely for the convenience of international readers. 96 | 2016 Sustainability Report 97

3 of 3 RAFFINERIA DI MILAZZO S.C.p.A

Joint-Stock Consortium Company Legal Offices in Milazzo (ME), 98057 Contrada Mangiavacca

Share Capital 2,171,143,000.00 fully paid up VAT number, Tax Code and registration number for the Messina Business Register 04966251003 E.A.I of Messina n. 171213

Post box n. 178 Fax: +39 090 9232200 Telephone: +39 090 92321

Our thanks to all the colleagues who have collaborated in creating the present publication.

Graphic design Cabiria BrandUniverse

Publishing consultants Lifonti & Company

All rights reserved. No part of this book may be copied or distributed in any way, either photocopied or in any other form, without the written permission of Raffineria di Milazzo S.C.p.A. raffineriadimilazzo.it

98 | 2016 Sustainability Report