RELIABILITY RESPONSIBILITY EFFICIENCY GROWTH PROFESSIONALISM COLLABORATION Nornickel Corporate Social Responsibility 2016 Report THEY SAW THE FUTURE. OUR MOST THEY BELIEVED IN THE FUTURE. VALUABLE THEY BUILT THE FUTURE...
YEARS HAVE PASSED AND NOW, OVER EIGHT DECADES OF OPERATIONS ASSET AS MUCH AS BEFORE, OUR IN THE FAR NORTH, OUR ENGINEERS PEOPLE CONTINUE TO BE OUR HAVE DEVELOPED GROUNDBREAKING KEY RESOURCE AND MOST TECHNOLOGIES AND UNIQUE SOLUTIONS VALUABLE ASSET. THEY SEEM WHICH ALLOW THE COMPANY IS OUR TO HAVE BORROWED THE BEST TO LEVERAGE AVAILABLE RESOURCES PROPERTIES OF OUR METALS AND MAINTAIN THE EXCELLENCE TO WITHSTAND THE HARSH OF OUR PRODUCTS. AN EVEN GREATER CHALLENGES AND BECOME HERITAGE IS OUR IDENTITY WHICH A REAL SYMBOL OF RELIABILITY. UNDERPINS OUR EFFECTIVENESS PEOPLE AND SOLIDARITY IN WORKING OVER DECADES, THEY HAVE BEEN TOWARDS THE TARGET, NO MATTER DISCOVERING NEW LANDS, THE DIFFICULTIES. CONSTRUCTING MINES AND PLANTS, SMELTING METALS, BUILDING NEW CITIES AND RAISING CHILDREN. Our mission and values
Through the efficient use of natural resources and equity RELIABILITY EFFICIENCY PROFESSIONALISM is an ability to address any is delivering against our is the ability to ensure we supply mankind with non-ferrous metals, which make the world challenges to ensure success targets in due time a sustainable strong for the business. and at minimum costs. performance. a more reliable place to live and help people realise their aspirations For us, reliability means that the Efficiency is key to our strong To be professional means Company and its team can fully competitive edge and investment to achieve goals with due regard for development and technological progress. A G4–56 and assuredly honour commit- appeal. It means excellence in all to health, safety and environment, ments to both each other and our business areas through the commit oneself to continuous partners, counterparties, govern- leverage of an optimal strategy, operating improvements and ment agencies and local communi- advanced technologies and best implementation of innovations ties, regardless of ongoing practices, effective staff manage- and cutting-edge technologies. circumstances and market ment, rational use of financial and conditions. HR resources, and mitigation of the Company’s environmental impacts. Our reliability is underpinned by To be efficient, our employees COLLABORATION a high resource to production ratio, need to continuously develop their is the ability and desire of our strategic planning, an absolute professional skills, gain new employees to achieve goals RELIABILITY priority of health and safety knowledge, and pursue personal and objectives through teamwork, issues, competitive social benefits growth. respect and mutual assistance, to employees, and sustainable the willingness to share experi- R development in the regions ence, knowledge and resources, E S of operation. and actively develop horizontal Y P C O GROWTH communication as part of N N is an effective production the effective interaction between E ramp-up and upgrade, leverage the management and rank-and- I S I of ground-breaking technologies file employees. C B RESPONSIBILITY I is a desire to honour our and development of our people. F I L F commitments and take on Collaboration can only I E T responsibility for our decisions. Growth is key to our strong be built through openness Y performance and continued and consideration for Responsibility is the main leadership despite any market the interests of all stakeholders. behavioural principle for each challenges. employee in their corporate and external relations, as it is regarded Our ability to grow depends on the C
O as a key to maintaining reliability. willingness to set and achieve strate- Responsibility is closely tied gic goals, understand and embrace L L to the readiness to assume personal changes quickly responding to
A H responsibility for the decisions made. the shifting operating environment, B T invest in the exploration and O It also means grasping the need to development of new promising W R strictly and reasonably comply with deposits, and commit ourselves A O T R the corporate rules and standards, to the development and retraining IO G a permanent focus on health and of employees. N safety, zero tolerance to corporate misconduct, negligence and breach P of business ethics, as well as RO ISM continuous and sincere aspiration FESSIONAL of each employee to maximise the impact of their performance. Contents Nornickel GROUP
6 130 Statement APPENDICES
of the President 130 and Chairman Appendix 1 of the Management Compliance with the UN Global Compact 30 54 82 100 principles Board 131 Appendix 2 4. RESPONSIBLE 5. EFFECTIVE 7. ENVIRONMENT 8. SOCIETY GRI G4 Content Index
OPERATIONS RELATIONSHIPS 83 101 136 7.1. Environmental management system 8.1. Employees and social policy 8 31 55 Appendix 3 Identified Material Aspects 4.1. Sustainability management 5.1. Stakeholders and interaction 83 111 and Boundaries (GRI G4) 1. 2016 HIGHLIGHTS mechanisms 7.2. Environmental protection 8.2. Developing local communities 34 expenditures 138 4.2. Corporate governance 55 123 5.2. Dialogue with employees 85 8.3. Transport accessibility Appendix 4 37 7.3. Environmental performance GRI G4 Specific Standard Disclosure 4.3. Remuneration 58 11 5.3. Dialogue with shareholders 90 144 38 and investors 7.4. Biodiversity conservation Appendix 5 2. ABOUT 4.4. Risk management framework List of abbreviations 60 93 126 40 5.4. Dialogue with business partners 7.5. Impacts from transport 146 NORNICKEL 4.5. Corporate security 4 and logistics operations Appendix 6 GROUP 60 9. ABOUT THE REPORT Opinion of RSPP Council 41 5.5. Dialogue with authorities, 94 on non-financial reporting 4.6. Preventing and fighting communities and non-profit 7.6. Impacts from foreign operations corruption organisations 150 94 Appendix 7 43 64 7.7. Energy conservation and efficiency External Assurance Statement 4.7. Anti-money laundering 5.6. Environmental dialogue and counter-terrorist financing initiatives 65 5.7. Supply chain responsibility 44 4.8. Corporate Trust Service 152 45 22 4.9. Transparency 10. CONTACTS 46 3. PRIORITIES 4.10. Product responsibility AND OBJECTIVES 49 4.11. Research and development 23 3.1. Development strategy 49 4.12. Ensuring economic efficiency 70 24 3.2. Goals and objectives by CSR Focus Area 6. SAFETY 71 6.1. Occupational health and safety
78 6.2. Improvement of social and working conditions © 2017 Nornickel Group. All rights reserved.
Corporate Social Responsibility Report 2016 Statement of the President and Chairman of the Management Board Nornickel GROUP
about a 1.5-fold increase in output and Nadezhda Metallurgical Plant, Statement and an almost 2-fold growth figure commissioned a saline effluent in concentration volumes by 2023. disposal facility at Kola MMC, and of the President This is only possible through prepared to introduce advanced continuous upgrade of capital metal leaching technology. and Chairman assets and technology. It is important to note that our of the Manage- As before, health and safety remain modernisation projects caused no a top priority of our production decline in output or major job cuts. ment Board A G4–1 policy. A set of measures intro- Nornickel remains a leader in terms duced in 2016 helped bring down of social responsibility and fulfils our overall injury rate. Our employ- its obligations to more than In 2016, Nornickel once again ees demonstrated a more respon- 80,000 employees every year. reaffirmed its reputation of a sible behaviour, with their pro- Along with traditional forms sustainable company that stays up active approach allowing us to of social support, Nornickel intro- to date and is able to overcome the identify more cases of workplace duces social programmes aimed global financial turmoil. Our flexible safety violations. New machinery, at urban development, social financial and dividend policies protection equipment, positioning entrepreneurship, charity, and enabled the Company to achieve a and radio systems used under- volunteering. strong financial performance, ground have contributed to a sustain the drive for reconfiguration decrease in injury rates. Still a lot Nornickel remains a reliable partner and upgrade of its production needs to be done to guarantee to regions of its presence, both as facilities, and hold firm to its safe labour. In particular, we have a major taxpayer and a contributor obligations to customers and to focus on prevention and step to important regional and federal Nornikel suppliers. Most importantly, up measures to avoid workplace programmes supporting social Nornickel maintained trust of the accidents and injuries. activities, sports, and infrastructure investment community, which projects. 6 helped secure funding for the An important part of the modernisa- remains Company’s key projects. tion plan is our commitment to I am confident that the well-coordi- solving decades-long legacy nated efforts of the management However, this does not mean we environmental issues. In 2016, and professionalism of Nornickel can rest on our laurels. The Nornickel invested over RUB 25.7 bn employees will help the Company Company has major tasks to in these solutions. We shut down to retain its industry leadership a leader achieve in terms of keeping costs Nickel Plant, which was beyond and live up to the reputation under control and improving labour modernisation, thus cutting sulphur of a reliability role model productivity. In 2016, we launched dioxide emissions within Norilsk for the employees, community, a long-term development pro- city limits. We upgraded and and country in general. in terms gramme that is expected to bring ramped up Talnakh Concentrator of social responsibility
Vladimir Potanin
President, Chairman of the Management Board MMC Norilsk Nickel
Corporate Social Responsibility Report 2016 2016 HIGHLIGHTS Nornickel GROUP 2016 highlights
SAFETY THE COMPANY’S POSITION IN THE INDUSTRY % OF GLOBAL OUTPUT A G , G . . . .
. . . .
Ni Pd Rh Pt Cu Co FIFR LTIFR Occupational health and safety expenses per employee (RUB ’ )
No. No. No. No. No. No. ENVIRONMENT A G EN NICKEL PALLADIUM RHODIUM PLATINUM COPPER COBALT PRODUCER PRODUCER PRODUCER PRODUCER PRODUCER PRODUCER . 8 . WORLDWIDE WORLDWIDE WORLDWIDE WORLDWIDE WORLDWIDE WORLDWIDE . . Total pollutant . emissions, kt , . , . , . , . , . Environmental protection expenditures and investments, RUB bn
KEY METAL SALES IN 2016 BY REGION % OF REVENUE
A G , G SOCIETY . . . . . . . Pt Ni Cu Pd , . , , , , . .
Group's average Tax and non-tax payments Community investments EUROPE ASIA NORTH AND SOUTH RUSSIA AND CIS headcount, FTIs to budgets of various levels , RUB bn and charity, RUB bn AMERICA
LTIFR and FIFR have been monitored since . There were insignificant copper shipments to Asia. Tax and non-tax payments include all taxes paid, net of VAT and dividend income tax, as well as insurance payments and customs duties. In accordance with the IFRS financial statements, net of social CAPEX.
Corporate Social Responsibility Report 2016 Key events of 2016 Nornickel GROUP Key About events Nornickel of 2016 Group
Norilsk Nickel is Russia’s leading The Group’s average headcount The Company’s Polar Division RELIABILITY EFFICIENCY PROFESSIONALISM metals and mining company, in 2016 was 82,000 employees, is located on the Taimyr Peninsula MMC Norilsk Nickel completed an Nornickel’s projects to reduce In June, Nornickel organised and the world’s largest producer including 925 people employed (Krasnoyarsk Territory) beyond important phase of its large-scale, its environmental impact, worth the Time of Reliable Solutions, of palladium and refined nickel by foreign subsidiaries. the Arctic Circle. It is linked to environment-focused programme RUB 1.3 bn, were included a corporate forum that became and one of the biggest platinum other regions by inland waterways for smelting capacities reconfigura- in the list of initiatives for Russia’s a venue to discuss the Company’s and copper producers. The Group’s In distribution and sales, (the Yenisey River), marine tion, with outdated Nickel Plant Year of the Environment in 2017. strategy progress, corporate companies also produce cobalt, the Company focuses on building transport (the Northern Sea Route) shut down in Norilsk in August, In June 2016, MMC Norilsk Nickel, culture and values, coordinate rhodium, silver, gold, iridium, long-term strategic relationships and air transport. two months ahead of schedule. Ministry of Natural Resources the vision of future development, ruthenium, selenium, tellurium, with key market players. The project is unprecedented and Environment, Federal Service and define tasks for the next three Kola MMC is located on the Kola and sulphur. A G4–9 Its customer base includes in terms of its environmental impact for Supervision of Natural years. For the second year in a row, Peninsula beyond the Arctic Circle. 436 companies, mostly industrial 10 and social guarantees provided Resources and Government the Company turned the forum into It is the leading industrial facility In 2016, the Company accounted consumers. Nornickel sells its to the plant’s employees. Before of the Krasnoyarsk Territory an interactive event with a better of the Murmansk Region and for 0.6% of Russia’s GDP, 2.7% products on all the key markets, the shutdown, the Company signed an agreement setting involvement of employees is completely integrated into of the national industrial output, with its footprint spanning over ramped up its nickel concentrate out the Company’s obligations and managers in the discussion the transport infrastructure of 9.8% of metals production, 35 countries as at the end of 2016. processing capacity at other to carry out these projects. of corporate activities. the Northwestern Federal District. and 2.4% of Russia’s exports. production facilities (Kola MMC, Norilsk Nickel Harjavalta and In Finland, Nornickel operates For the purposes of this Corporate Assets Nadezhda Metallurgical Plant). GROWTH COLLABORATION Norilsk Nickel Harjavalta (part Social Responsibility Report for 2016 of the Group), the country’s only According to the independent In October, Norilsk Administration, (the “Report”), Nornickel Group shall Production units of the Group are nickel refining plant. assessment of November 2016, MMC Norilsk Nickel’s Polar Division refer to MMC Norilsk Nickel and the located in three countries – Russia, RESPONSIBILITY the safety culture level at Nornickel and Vladimir Potanin Foundation entirety of operations forming Finland and South Africa. A G4–6 In South Africa, the Company owns In December, one of the two Group’s key production facilities signed a tripartite memorandum Nornickel Group. Unless otherwise 50% of Nkomati, a nickel mine treatment facilities for saline effluent stood at 2.5 compared to 1.4 in of cooperation. The document specified or required by the context, Its core businesses are based developed jointly with African from nickel refining operations was early 2014 when the first assess- provides for the establishment the terms “Company”, “Group”, in Russia and have a vertically Rainbow Minerals. commissioned at Kola MMC to ment took place. The safety of Norilsk Development Agency integrated structure. Two main “Nornickel” or “the Group’s compa- become a pre-eminent environmental culture improvement is driven to become a foundation for production sites in Russia are: nies” shall mean Nornickel Group. MMC Norilsk Nickel runs a global initiative run by the Company on by the implementation of risk economic, social and cultural ΅΅ Polar Division of MMC Norilsk Quantitative indicators for certain network of representative and the Kola Peninsula. The new effluent mitigation standards, safety development of Norilsk and Nickel (“Polar Division”); areas of sustainable development sales offices in Russia, UK, China, treatment technology will minimise communication campaign creation of a favourable urban ΅΅ Kola Mining and Metallurgical USA, and Switzerland. pertain to the Group’s specific the environmental footprint of and dedicated risk mitigation environment. Company (“Kola MMC”). operations in accordance with the local operations. In May, Kola programmes. The assessment In addition to geology, energy, Appendix 3. A G4–3 MMC shut down its pelletisation covered Polar Division, Kola MMC, logistics, and support businesses, and roasting section. The obsolete Norilsknickelremont and Polar the Group comprises Gipronickel technology was excluded from Construction Company. Institute, an R&D facility based the process and replaced with in St Petersburg with branches the briquetting of copper-nickel in Norilsk and Monchegorsk. concentrate. The technology upgrade In total, the Group counts over 80 companies. made the facility more environmen- tally friendly and efficient, reducing
SO2 emissions in Zapolyarny from 38,000 to 7,000 tonnes per annum.
Corporate Social Responsibility Report 2016 About Nornickel Group Nornickel GROUP Nornickel Group: core companies and business units A G 4–17
MMC NORILSK NICKEL’S FOREIGN HEAD ASSETS OFFICE
DISTRIBUTION AND SALES
SUPPORT NORILSK FUNCTIONS NICKEL HARJAVALTA
TRANSPORT NORMETIMPEX NORILSK AND LOGISTICS NICKEL NKOMATI
PECHENGASTROY
FUEL AND POLAR KOLABYT ENERGY TRANSPORTATION BRANCH 12 METALLURGY ARKHANGELSK NORILSK SUPPORT TRANSPORTATION COMPLEX BRANCH
EXPLORATION TAIMYRENERGO MURMANSK NORILSKNICKEL TRANSPORTATION REMONT BRANCH
RESEARCH AND POLAR DIVISION NORILSKGAZPROM KRASNOYARSK POLAR CONSTRUCTION DEVELOPMENT TRANSPORTATION COMPANY BRANCH
NORILSKGEOLOGIYA KOLA MMC JSC ARCTIC ENERGO NORDSTAR
GIPRONICKEL VOSTOKGEOLOGIYA NTEK YENISEY RIVER INSTITUTE SHIPPING COMPANY
BYSTRINSKOYE TAIMYRGAZ LOGISTIC CENTRE MINING COMPANY
INTERGEOPROEKT NORILSKTRANSGAZ NORILSK AIRPORT
TAIMYRTRANSGAZ LESOSIBIRSK PORT
KRASNOYARSK RIVER PORT
Corporate Social Responsibility Report 2016 About Nornickel Group Nornickel GROUP Nornickel Group production chart
PRODUCTION OF DISSEMINATED / COPPER-NICKEL SULPHIDE ORES CONCENTRATION PRODUCTION SALES
SMELTING REFINEMENT REFINEMENT (OF PRECIOUS METALS)
SMELTING SHOP KRASNOYARSK NON FERROUS METALS PLANT*
OKTYABRSKOYE FIELD OKTYABRSKY MINE TALNAKH COPPER COPPER NETWORK OWN SALES CONCENTRATOR *** CONCENTRATE PLANT THE COMPANY’S POLARDIVISION TALNAKHSKOYE FIELD TAIMYRSKY MINE NORILSK NICKEL NADEZHDA CONCENTRATOR CONCENTRATE METALLURGICAL PLAN T*** OF MMC NORILSK NICKEL
NORILSK FIELD KOMSOMOLSKY MINE PYRRHOTITE PRECIOUS CONCENTRATE METAL CONCENTRATE NORNICKEL GROUP
MAYAK MINE COPPER NICKEL NICKEL CONVERTER MATTE CATHODES
14 NICKEL ZAPOLYARNY MINE BRIQUETTES
CARBONYL PELLETS
NICKEL SULPHATE
NICKEL HYDROXIDE ZHDANOVSKOYE FIELD SEVERNY MINE ZAPOLYARNY SMELTING SHOP SMELTING SHOP MONCHEGORSK KOLA MMC CONCENTRATOR CONVERTER MATTE REFINERY*** NICKEL HYDROXYCARBONATE
ZAPOLYARNOYE FIELD KAULA KOTSELVAARA COPPER NICKEL METALLURGICAL SHOP NICKEL POWDER MINE CONCENTRATE COPPER CATHODES
SEMILETKA FIELD NICKEL COBALT CATHODES ELECTROLYSIS SHOP COBALT SULPHATE AND NORILSK NICKEL HARJAVALTA KOTSELVAARA FIELD SELENIUM
TELLURIUM
COMMERCIAL SULPHUR ** * Precious metals are refined at Krasnoyarsk Gulidov Non-Ferrous Metals Plant Cu CONCENTRATE**
CHITA (Krastsvetmet, not part of the Nornickel Group) under Au CONCENTRATE** BYSTRINSKY MPP** BYSTRINSKY a tolling agreement whereby HARJAVALTA CONCENTRATOR ** concentrates are processed PLANT into marketable metals. Fe CONCENTRATE** ** The project to develop mineral resources of the Trans-Baikal Territory is in progress. *** Production facilities are GEOLOGICAL EXPLORATION undergoing modernisation SERVICE SUBSIDIARIES under the production capacity reconfiguration programme FUEL AND ENERGY, TRANSPORT, LOGISTICS, SUPPORT AND OTHER BUSINESSES ( for more details, please see the Development R&D Strategy section).
Corporate Social Responsibility Report 2016 About Nornickel Group Nornickel GROUP
Key development projects A G 4–1 3
POLAR DIVISION Current Projects status Capacity upon completion
SKALISTY MINE . MTPA OF ORE BY
PROJECT/PHASE KOMSOMOLSKY MINE . MTPA OF ORE BY COMPLETED IN TAIMYRSKY MINE . MTPA OF ORE BY PROJECT/PHASE IN PROGRESS OKTYABRSKY MINE . MTPA OF ORE BY
TALNAKH CONCENTRATOR TALNAKH CONCENTRATOR TO BOOST UPGRADE AND RETROFIT PROCESSING CAPACITY FOR RICH TALNAKH MINES AND CUPROUS OKTYABRSKY MINE ORES AND IMPROVE CONCENTRATION KPIS; KOLA MMC OUTPUT UPON STAGE COMPLETION Current Projects status Capacity upon completion TO REACH MTPA
SEVERNYGLUBOKY MINE . MTPA OF ORE BY RECONSTRUCTION OF NADEZHDA . MTPA METALLURGICAL PLANT ELECTROWINNING OF NICKEL KTPA OF NICKEL AND RAMPING UP OF ITS NICKEL FROM CHLORINE DISSOLVED TUBE PYROMETALLURGICAL CAPACITIES FURNACE NICKEL POWDER
16 SULPHUR PRODUCTION CAPACITY OF UP TO KTPA OF SULPHUR DISPOSAL OF SALINE EFFLUENT REFURBISHMENT AT NADEZHDA FROM NICKEL REFINING METALLURGICAL PLANT PRODUCTION OF PRECIOUS METAL CONCENTRATES FROM THE RESIDUE OF CHLORINE DISSOLVED SULPHUR PRODUCTION CAPACITY OF UP TO KTPA OF SULPHUR TUBE FURNACE NICKEL POWDER REFURBISHMENT AT THE COPPER PLANT
NADEZHDA METALLURGICAL NEW ANODE COPPER CAPACITY OF KTPA; PLANT CONTINUOUS COPPER CLEANER AIR IN NORILSK RESIDENTIAL AREAS CONVERSION FACILITY DUE TO ELIMINATION OF THE MAIN SOURCE OF GROUNDLEVEL EMISSIONS AT COPPER PLANT AN OBSOLETE COPPER CONVERSION SECTION AND A RESULTING DECREASE IN SULPHUR EMISSIONS BY KTPA
CHITA PMO
Current Projects status Capacity upon completion
MINING FACILITIES DEVELOPMENT PROJECTS MINE DEVELOPMENT PROJECTS CHITA PROJECT: CONSTRUCTION OF AN OPENPIT MINE DEVELOPMENT OF POLYMETALLIC AND A MINING AND PROCESSING PLANT RECONSTRUCTION AND UPGRADE OF CONCENTRATION OPERATIONS DEPOSITS IN TRANSBAIKAL TERRITORY IN ORDER TO UTILISE UNTAPPED RESERVES
RECONFIGURATION OF PRODUCTION ASSETS: INTEGRATED PROJECT TO SHUT DOWN NICKEL PLANT KEY PROJECT FEATURES: MT OF ORE AND EXPAND KOLA MMC'S REFINING CAPACITIES IN RESERVES; OUTPUT OF MTPA
ENVIRONMENTAL PROJECT INTEGRATED EMISSION REDUCTION PROJECT
Corporate Social Responsibility Report 2016 About Nornickel Group Nornickel GROUP
Key social PECHENGSKY DISTRICT PASVIK NATURE HARJAVALTA and economic RESERVES MONCHEGORSK LAPLAND NATURE projects MURMANSK RESERVES REGION
TAIMYRSKY DOLGANO NENETSKY MUNICIPAL DISTRICT
TVER REGION
PUTORANSKY MOSCOW NATURE RESERVES
RUSSIAN OLYMPIC COMMITTEE PARTNERSHIP NORILSK
FOOTBALL UNION NORILSK DEVELOPMENT OF RUSSIA PARTNERSHIP AGENCY NOVY URENGOY CSKA PROFESSIONAL CONSTRUCTION RECONSTRUCTION BASKETBALL CLUB OF A FIBRE OPTIC OF NORILSK AIRPORT 18 SPONSORSHIP COMMUNICATION LINE RELOCATION PROGRAMME GOLDEN MASK IN CINEMA PARTNERSHIP NORILSK NICKEL MINI FOOTBALL CLUB SARATOV SPONSORSHIP SARATOV REGION INTEGRATED EMISSION REDUCTION PROJECT SOCHI
nd WINTER OLYMPIC GAMES IN SOCHI IN PARTNERSHIP
ROSA KHUTOR SKI KRASNOYARSK RESORT SPONSORSHIP TERRITORY ZAPOLYARYE HEALTH RESORT
KRASNOYARSK
SCIENCE FESTIVAL IN KRASNOYARSK SOCIAL AND ECONOMIC PARTNERSHIP AGREEMENT WITH REGIONAL AUTHORITIES th INTERNATIONAL WINTER TRANS BAIKAL UNIVERSIADE IN KRASNOYARSK TERRITORY WORLD OF NEW IN PARTNERSHIP CHITA OPPORTUNITIES
COOPERATION WITH NATURE RESERVES
CORPORATE VOLUNTEER PROGRAMME
Corporate Social Responsibility Report 2016 Priorities and objectives Nornickel GROUP
MMC Norilsk Nickel completed ABILITY TO ADDRESS an important phase of its large-scale, ANY CHALLENGES environment-focused programme for smelting capacities reconfiguration, TO ENSURE SUCCESS with outdated Nickel Plant shut down in Norilsk in August, two months FOR THE BUSINESS ahead of schedule. The project is unprecedented in terms of its environmental impact and social guarantees provided to the plant’s
20 employees. Before the shutdown, the Company ramped up its nickel concentrate processing capacity at other production facilities (Kola MMC, Norilsk Nickel Harjavalta and Nadezhda Metallurgical Plant). RELIABILITY Corporate Social Responsibility Report 2016 Priorities and objectives Nornickel GROUP
3.1. In 2016, the Company continued In implementing the New Norilsk Development strategy its strategic projects within concept, the Company focuses on: the reconfiguration scope: In 2013, the Company adopted ΅΅ ore processing started 1. Promoting innovation and a new corporate strategy focused at Stage 2 of the upgraded professional incentives by: on unlocking the potential Talnakh Concentrator; ΅΅ improving corporate culture; of the Taimyr and Kola Peninsula’s ΅΅ reconstruction completed ΅΅ creating innovative jobs; resource base, improving operating at Nadezhda Metallurgical Plant ΅΅ introducing young talent efficiency, and raising the quality to be used as a single nickel development and retention of investment and capital feedstock smelting facility; programme. management. ΅΅ Nickel Plant shut down, thus cutting sulphur dioxide emissions 2. Breaking the island mentality by: Nornickel’s priority is its Tier-1 within Norilsk city limits by more ΅΅ improving the region’s environ- assets, as they secure robust than a third. ment for new businesses returns on investments and are to emerge; located in the high-potential In 2016, the Board of Directors’ ΅΅ building a fibre optic regions where the Company has Strategy Committee reviewed: communication line; a competitive edge. Tier-1 assets ΅΅ the Company’s updated ΅΅ upgrading the Norilsk (Alykel) 3. must generate over RUB 1 bn in strategy*; Airport’s runway. revenue and have at least a 40% ΅΅ sales and marketing strategy; EBITDA margin and 20 years’ life. ΅΅ transport and logistics strategy; 3. Improving local infrastructure by: By focusing on the development ΅΅ project services development ΅΅ building convenient social, of its Tier-1 assets, the Company strategy; sporting and transport Priorities will be able to make better use ΅΅ repair services development infrastructure; of the existing infrastructure strategy; ΅΅ supporting public initiatives and fully unlock its geological ΅΅ progress in environmental to develop urban infrastructure and technological potential projects; jointly with the regional 22 to deliver the highest margins. ΅΅ progress in implementation authorities. A G4–2 and objectives In implementing its strategy, of the fuel and energy the Company factors in trends development strategy; For more details, please see that shape the global commodity ΅΅ progress in large investment the Developing Local Communities markets, and focuses on projects projects of the Company*. section. with a good safety buffer in terms
HTS of performance. Since 2015, the Company has been
HLI G implementing the New Norilsk Nornickel’s priority In 2014, the Company presented concept, a vision of Norilsk as a city its production reconfiguration of sustainable development. 2016 HI G 2016 82,006 is its Tier-1 assets, programme. The reconfiguration Corporate priorities, such as health, employees exercise seeks to achieve econo- safety and environment protection, Nornickel’s average as they secure robust mies of scale and mitigate social investments, accessibility headcount the environmental impact on of the region and support for new returns on investments the Norilsk Industrial District. businesses, are viewed as a The reconfiguration will deliver: foundation to achieve the target A and are located ΅΅ reduction of SO2 emissions vision. G4–15 through the concentrator 0.6 in the high-potential upgrade and the Nickel Plant % shutdown; Nornickel’s share regions where the Company ΅΅ substantially lower pollutant in the national GDP concentrations in Norilsk’s has a competitive edge residential area; ΅΅ higher metal recovery rates and optimisation of the Company’s 9.8 production capacity utilisation rates; % ΅΅ lower load on the energy Nornickel’s share infrastructure of the Norilsk in Russia’s metals production Industrial District.
* Reviewed by the Board of Directors on an annual basis.
Corporate Social Responsibility Report 2016 Priorities and objectives Nornickel GROUP
Key principles of the Company’s strategy and contribution to sustainable development Priorities and focus areas Objectives Goals Progress in 2016 Tier-1 asset priority ΅΅ Modernising and building capacities as part of the Tier-1 assets development, outsourcing to local and value chain construction, assembly and R&D businesses Excellence in ΅΅ Compliance with best practices Enhancement of the Company’s corporate Completed optimisation ΅΅ Economies of scale and advanced production technologies corporate governance in corporate governance governance, including by aligning corporate See Section 4.2. ΅΅ Maintaining and enhancing the Company’s key competitive edge – efficient geological exploration service and strong business and business ethics to improve documents with best practices in corporate and geology professionals with an extensive experience in the Taimyr Peninsula and Eastern Siberia ethics the Company’s investment case, governance and business ethics efficiency and competitiveness ΅΅ Ensuring sustainable high margins throughout the asset development life cycle ΅΅ Fulfilling all commitments to the government, employees and shareholders Quality management ΅΅ Confirmation of certification Surveillance audits Completed ΅΅ Securing sustainable development of the Group’s operations in a challenging macroeconomic environment to ISO 9001:2008 See Section 4.10.
Responsibility ΅΅ Laying a foundation for the community development across the Company’s regions of operations Certification audits Completed for the capital for decades to come See Section 4.10. and investments ΅΅ Efficient investment activities leading to higher tax payments to the budgets of various levels returns Contribution ΅΅ Strict compliance with staff Excellence in staff training, retraining, Completed to the professional training laws across the Group’s and professional development See Section 8.1. Social ΅΅ Achieving positive results in the Safety, Environment and Community areas and cultural operations development ΅΅ Stabilisation of the employee Upgrade of the existing distance training In progress responsibility For more details, please see the Goals and Objectives by CSR Focus Area section. of employees churn rate system See Section 8.1.
Implementation of corporate social Completed programmes See Section 8.1. 3.2. Goals and objectives by CSR Focus Area Development of talents ΅΅ Recruitment of highly skilled Provision of career guidance Completed Priorities in the Company’s employees, including those from See Section 8.2. and focus areas Objectives Goals Progress in 2016 regions of operation the skills shortage list Sponsorship of vocational schools Completed SAFETY in the Company’s regions of operations See Section 8.2.
Health and safety ΅΅ Zero work-related fatalities Annual reduction in the number of accidents Completed Employee ΅΅ Incentives for the employees Provision of competitive remuneration Completed ΅΅ Continuous LTIFR improvements In 2016, the number incentivisation to achieve best results under In 2016, the average Occupational safety of accidents decreased the business plan in line with salary in Nornickel and emergency by 39% compared the corporate strategy Group increased by preparedness 24 to a planned reduction ΅΅ Individual and team performance 11%. of 20%. The plan improvements See Section 8.1. for 2017 is to reduce ΅΅ Labour recruitment and retention accidents by another 15%. ΅΅ Creation of the talent pool Implementation of the performance In progress See Section 6.1. for the effective use of HR management framework See Section 4.3. resources Health and safety measures as per plan Completed Creation and development of the talent pool In progress See Section 6.1. See Section 8.1. Improvements in social ΅΅ Favourable social and working Overhaul of social facilities Completed Community ΅΅ Maintenance of social stability for Construction and maintenance of social Completed and working standards conditions for the Company See Section 6.2. investments the workforce in the Company’s infrastructure See Section 8.2. at the Company’s employees and charity regions of operations production sites ΅ Bringing social facilities in line ΅ in the Company’s with existing requirements regions of operations COMMUNITY Support to vulnerable Implementation of charitable programmes Completed Regulatory compliance ΅΅ Development of the regulatory Expert review of draft regulations Completed population groups See Section 8.2. and observance framework in line with See Section 5.5. of human rights the Company’s priorities Payments to budgets Full and timely payments to budgets Completed ΅΅ Minimisation of breaches of law Preparation of amendments and proposals Completed and non-budget funds and non-budget funds See Section 8.2. on draft federal regulations See Section 5.5.
Identification of non-compliance risks Completed associated with business processes, and risk In 2016, the number governance based on the mitigation of such of non-financial sanctions risks in line with the Company’s risk profile against the Company saw a reduction. See Section 4.12.
Introduction of an antitrust compliance system On the plan starting 2017
Corporate Social Responsibility Report 2016 Priorities and objectives Nornickel GROUP
Priorities and focus areas Objectives Goals Progress in 2016
ENVIRONMENT
Gradual reduction ΅΅ Mitigation of the Company’s No violation of current-year environmental Completed of air pollutant environmental impact through impact limits in production operations See Section 7.3. emissions production reconfiguration and high-tech projects reducing Consistent reduction air pollutant emissions and Implementation of environmental, Completed of wastewater wastewater discharges administrative and technical measures 6.2% reduction of air discharges to minimise the environmental impact pollutant emissions into water bodies of the Company’s operations by Group companies 5.7% reduction of water withdrawal by Group companies 6.6% reduction of pollutants in wastewater discharges of MMC Norilsk Nickel in 2016 See Section 7.3.
Development of waste Environmental management compliance with Completed disposal sites ISO 14001:2004, updates in the environmental See Section 7.1. management documents
Prevention of pollution Participation in events staged under Completed resulting from sea cooperation agreements signed by the See Section 5.6. freighting and vessel Company and environmental protection operation authorities
Water consumption optimisation 26 Biodiversity conservation
Energy efficiency ΅΅ Reliable and high-quality Implementation of a programme to upgrade, In progress power supplies to production revamp and replace the Norilsk Industrial See Section 7.7. sites and local communities District’s power transmission facilities in the Company’s regions of operations Implementation of initiatives under In progress the Company’s Fuel and Energy See Section 7.7. Development Strategy
Achievement ΅΅ Improvements in operating Implementation of initiatives to improve In progress of operating efficiency efficiency operating efficiency See Section 7.7. through resource saving technologies
Corporate Social Responsibility Report 2016 Responsible operations Nornickel GROUP
One of the two treatment facilities for saline euent from nickel refining operations was commissioned at Kola MMC to become a pre-eminent environmental initiative run by the Company on the Kola Peninsula. The new euent treatment technology will minimise the environmental footprint of the local operations. In May, Kola MMC shut down its pelletisation and roasting section. The obsolete technology was excluded from the process and replaced with the briquetting of copper-nickel concentrate. The technology upgrade 28 made the facility more environmentally
friendly and e cient, reducing SO emissions in Zapolyarny from , to , tonnes per annum.
RDESIRE ETO HONOURSPO OUR COMMITMENTSN SIBILITY AND TAKE ON RESPONSIBILITY RELIABILITY FOR OUR DECISIONS Corporate Social Responsibility Report 2016 Responsible operations Nornickel GROUP
4.1. key areas of CSR: safety, environ- Sustainability ment, and community. Activities management in these areas bring the biggest positive effect in terms of long-term Corporate social responsibility is one sustainability and promoting social of the strategic priorities of Nornickel stability and comprehensive safety Group. The Company estimates its in the territories where the Company impact to be most significant in three operates.
Sustainability management A G4–56
4. OUR MISSION Through the efficient use of natural resources and equity we supply mankind with non-ferrous metals, which make the world a more reliable place to live and help people realise their aspirations for development Responsible and technological progress
Our values 30 operations STRATEGY PILLARS
Focus on TIER-1 assets
Value chain optimisation
HTS Responsibility for capital and ROI HLI G
The Company estimates SOCIAL RESPONSIBILITY 2016 HI G 2016 8.9 its impact to be the most % Safety Environment Society Increase in environmental significant in three key expenses and investments areas of corporate social Management Health Environmental Code responsibility: safety, and Safety Strategy Policy of Business Ethics Health Risk Management 29.2 environment, and community and Safety Policy Policy % Norilsk Nickel’s Quality Assurance Corporate Policy Increase in the financing Social and Working Human Capital of social, charitable Conditions Standard and social infrastructure Development Programme Corporate health programmes Anti-Corruption and safety standards Policy Information Policy Regulation 3.2 Charity Regulation % Increase in tax and non-tax payments to budgets of various levels Stakeholder Engagement
Corporate Social Responsibility Report 2016 Responsible operations Nornickel GROUP
Executive bodies of MMC Norilsk Nickel’s Head Office, managing CSR activities A G4–36
Management President Board
Non-industrial Government Internal Audit Investor Relations Strategic Planning Assets and Operating Unit Relations Unit Department Department Department Energy Unit
Corporate Federal and Regional Investment Project HR, Social Policy and Unit of Economics Governance, Asset Energy Department Programmes Management Public Relations Unit and Finance Management and Department Department Legal Affairs Unit
Non-industrial Legislative HR Department Economic Department Legal Department HSE Department Assets Department Department
32
Internal Control Corporate Social Policy Corporate Relations Production and and Risk Tax Department Security Unit Department Department Technical Department Management Unit
Corporate Security Internal Control Public Relations Department of Legal Industrial Assets Department Insurance Division Department Department Support of Projects Department (Directorate) and Foreign Operations
Investigation and Risk Management Business Development Economic Security Secretariat Service Division Department
The units whose activity is related mainly to the implementation of CSR priority:
Information Security Community and IT Infrastructure Department Environment Safety
Corporate Social Responsibility Report 2016 Responsible operations Nornickel GROUP
The Company supports major Operational management of The key internal regulations on The Board of Directors is in charge and interested-party transactions instruct the managers on individual domestic and international CSR and corporate social responsibility and corporate governance are available of overseeing the Company’s pursuant to the Federal Law On matters. Such decisions and sustainable development initiatives sustainable development activities on MMC Norilsk Nickel’s website business, with the exception of Joint Stock Companies, defines key instructions are minuted at the BD that bring together businesses at the Group’s foreign enterprises www.nornik.ru in the Investor matters that fall within the scope of risks associated with the Compa- meetings and subsequently followed committed to responsible business is carried out by the specific units Relations section: the General Meeting of Sharehold- ny’s operations, and measures up. Authorised executives are vested practices and excellent reputation. in line with their functional responsi- ΅΅ Regulation on the General Meeting ers, as specified in the Federal and procedures for managing with powers and responsibilities to Nornickel joined the Social Charter bilities and include development, of Shareholders of MMC Norilsk Law On Joint Stock Companies such risks. A G4–42, G4–45, G4–46 address economic, environmental of the Russian Business in 2005 adoption, and implementation Nickel; and the Company’s Charter. and social issues and may delegate and the United Nations Global of management decisions. ΅΅ Regulation on the Board of It establishes priorities, In overseeing the Company’s their powers to other employees Compact in 2016. The Company Directors of MMC Norilsk Nickel; the development strategy, plans management, financial and business based on their competences and sticks to the provisions of For three successive years, ΅΅ Directors’ Code of Corporate and budgets, approves major affairs, the Board of Directors may functions. A G4–35, G4–36 ISO 26000:2010 in its social and Nornickel has been among Conduct and Business Ethics; environmental policy-making and the leaders of the Responsibility ΅΅ Directors’ Professional Develop-
actively promotes the UN Sustain- and Transparency and Sustainable ment Policy of MMC Norilsk Nickel; Governing and Control Bodies of MMC Norilsk Nickel A G4–34 able Development Goals that are Development Vector indices made ΅΅ Directors’ Performance Assess- applicable to its business. A G4–15 by the Russian Union of Industrial- ment Policy of MMC Norilsk Nickel; ists and Entrepreneurs. These ΅΅ Policy for the Development and approval The management and executive indices measure the level Approval of Voting Recommenda- External auditor bodies of MMC Norilsk Nickel of CSR reporting disclosure tions in respect of Candidates General Meeting and its subsidiaries are in charge and the evolution of performance to the Board of Directors election of Shareholders of developing and implementing and commitment in this field. of MMC Norilsk Nickel; reporting Audit Commission the policy for various aspects ΅΅ Directors’ Remuneration Policy of the Group’s corporate social At the international level, of MMC Norilsk Nickel; responsibility and sustainable the appreciation of our efforts ΅΅ Regulation on the Management development, within the scope in the area of corporate social Board of MMC Norilsk Nickel; election of their functions and in accordance liability and sustainable develop- ΅΅ Regulations on the Committees reporting with the legislation and internal ment is attested by the inclusion of the Board of Directors 1 34 regulations . of the Company’s stock of MMC Norilsk Nickel. in the FTSE4Good Emerging Board of Directors All executive efforts aimed at our Index in 2016. The General Meeting of Sharehold-
CSR priorities are coordinated ers is the Company’s supreme Corporate Governance, Strategy Budget by the Management Board, governing body and has Nomination and Audit Committee Committee Committee the President, and following 4.2. the authority to elect members Remuneration Committee committees of the Company: Corporate of the Board of Directors (BD),
the Budget Committee under governance3 approve the Company’s auditor, election (since 1 July 2016) the Management Board, the Charity annual reports, and annual financial Committee, the Health, Safety The Company continuously (accounting) statements. The Audit control election
and Environment Committee, improves its corporate governance Commission, controlling the reporting the Investment Committee, framework to enhance efficiency Company’s financial and business (before 1 July 2016) and the Nomination and ensure compliance with operations, reports to the General functional reporting and Remuneration Committee. global best practices. Since 2002, Meeting of Shareholders. the Company has been following Management President, Chairman Management Board Board The Company has developed the recommendations of the Code of the Management Board and successfully implemented of Corporate Conduct of the FCSM,
the Corporate Integrated Quality and the Corporate Governance reporting,functional reporting administrative reporting and Environmental Management Code after its approval by System (CIMS)2. the Board of Directors of the Bank administrative reporting of Russia on 21 March 2014. reporting
Internal Control and Risk Management Unit Internal Audit Department
Internal Control Risk Management Internal Control and Risk Service Department Management Unit
1 See http://www.nornik.ru/en/investor-relations/shareholders/internal-documents2. 2 For details, please see the Product Responsibility and Environmental Performance sections. 3 The “Company” in this section is understood as MMC Norilsk Nickel.
Corporate Social Responsibility Report 2016 Responsible operations Nornickel GROUP
According to the Regulations In accordance with global corpo- Number of years served In 2016, the BD met quarterly body, the President, was held by 4.3. on the Committees of the Board rate governance practices and on the Board of Directors: to review the Company’s financial Vladimir Potanin. He also performed Remuneration1 of Directors, to ensure efficiency and recommendations of the Corporate ΅΅ 1 to 3 years – Rushan Bogaudinov, results, strategy implementation the functions of the Chairman of proper fulfilment of their functions, Governance Code, no less than Andrey Korobov; progress, the management’s the Company’s Management Board. Remuneration of members the Committees are entitled to consult one third of the Board of Directors ΅΅ >3 years – Sergey Barbashev, HSE reports, and operational On 27 April 2016, the Company’s of the supreme with the Company’s governing should consist of independent Alexey Bashkirov, Sergey performance reports. In 2016, the Board of Directors approved the governing body bodies and seek advice or opinion directors. Moreover, the Company Bratukhin, Andrey Bougrov, Board of Directors of MMC Norilsk new make-up of the Management The Board of Directors’ annual of external consultants appointed believes that independent directors Marianna Zakharova, Stalbek Nickel considered 1,024 matters, Board, which remained unchanged remuneration is decided upon by the Company upon a Committee’s are key to efficient operation Mishakov, Gareth Peter Penny, including 858 deal approvals, for the rest of the reporting year. by the General Meeting request. Any Committee member may of the Board of Directors and Gerhardus Prinsloo, Maxim 134 corporate governance matters, The Management Board consists of Shareholders and includes propose a consultant to the Commit- thoughtful decision-making. Sokov, Vladislav Soloviev, 12 economic and financial matters, of 13 members, including five basic remuneration for member- tee. Where required and subject to Robert Edwards. 2 social and environmental matters, women. A G4–38 ship, reimbursement of expenses approval by the Company’s President, All independent directors meet the and 18 other matters. A G4–47, G4–50 incurred by the directors Committees may engage business independence criteria recom- In 2015, the Company put in place For more information on in discharge of their duties, unit employees that have relevant mended by the Corporate Gover- the Directors’ Professional The President and the Management the members of the Board and bonuses for participating skills. A G4–37 nance Code and the requirements Development Policy based on Board are the Company’s sole of Directors, Management Board, in and chairing the Board commit- established by the current version global and national best practices and collegial executive bodies and on the President, please see tees. The Remuneration Policy In accordance with the applicable of the Listing Rules of the Moscow for corporate governance. in charge of managing the Com- the Corporate Governance section for the Board of Directors Russian laws, candidates for election Exchange, which state that an In compliance with the Directors’ pany’s day-to-day operations. in the 2016 Annual Report. was approved at the Annual to the boards of joint-stock compa- independent director is one who Performance Assessment Policy, In the reporting period, the position General Meeting of Shareholders nies incorporated in Russia may be is not related to: the BD members conduct annual of the Company’s sole executive on 6 June 2014. A G4–51 nominated by shareholders jointly ΅΅ the Company; self-assessment based on annual holding at least two percent ΅΅ any of the substantial sharehold- results. The first of such self- Employees covered by assessment in Russia A G4–LA11 of a company’s voting shares. ers of the Company; assessments was for 2015, and the
΅΅ any of the substantial counter- performance assessment for 2016 BLUE-COLLAR WHITE-COLLAR The BD is formed by the General parties of the Company; was conducted in February 2017. Indicator employees employees Executives Total
Meeting of Shareholders based on ΅΅ any competitor of the Company; The BD Performance Assessment Competency assessment 36 the Company’s Policy for Develop- ΅΅ federal and regional (Russian Report for 2016 was drafted based ment and Approval of Voting Federation or its constituent on the questionnaires filled in by Male 752 16 329 1,097 Recommendations in respect of entities) governments or the directors. It was reviewed Female 45 12 87 144 Candidates to the Board of Directors. municipal entities. A G4–39 by the meeting of the Corporate Total 797 28 416 1,241 Shareholders’ proposals of nominees Governance, Nomination and to the Board of Directors must The Company sees independent Remuneration Committee on KPI-based assessment contain information on offices held directors as very valuable contribu- 23 March 2017. A G4–43, G4–44 Male – 188 1,020 1,208
by the candidate in the governing tors to the efficiency of the Board, Female – 339 332 671 bodies of other legal entities and in particular, in terms of ensuring The Board of Directors meets as the number of shares in the Company that the matters on the agenda and when required, but at least once Total – 527 1,352 1,879 held by such candidate. A G4–40 of the Board are treated fairly, every six weeks. The meeting agenda and reinforcing shareholders’ and is set by the BD Chairman based Assessment of employees of the Group companies in Russia, % of average headcount The BD plays a key role in preven- investors’ confidence in actions on a request to convene the meeting, tion, identification and settlement taken by the Board of Directors. which can be initiated by the BD BLUE-COLLAR WHITE-COLLAR of internal conflicts between Chairman or members, or by the Audit Indicator employees employees Executives the Company’s governing bodies, In the reporting year, Commission, auditor, Management Competency assessment shareholders and employees. the composition of the Board Board, President, and shareholders Share of staff covered by competency assessment 1.4 0.2 3.9 Pursuant to the Directors’ Code of Directors remained unchanged. jointly holding at least 10% of ordinary of Corporate Conduct and Business The Board of Directors includes shares. A G4–49 Share of male employees covered by competency assessment 1.7 0.3 4.1 Ethics, the BD members shall renowned global experts with many Share of female employees covered by competency assessment 0.4 0.2 3.2 comply with the highest ethical years of experience in mining. KPI-based assessment standards, integrity and account- Five (38%) out of 13 directors are ability, avoid conflicts of interests independent, including the Board’s Share of staff covered by KPI-based assessment 0 4 13 and, in case of such conflicts, Chairman. Two directors are Share of male employees covered by KPI-based assessment 0 3 13 report them. A G4–41 the Company’s senior executives. Share of female employees covered by KPI-based assessment 0 5 12 One of the directors is female.
1 The “Company” in this section is understood as MMC Norilsk Nickel.
Corporate Social Responsibility Report 2016 Responsible operations Nornickel GROUP
The Annual General Meeting of Employee Performance Evolution of the corporate Shareholders for 2016 established Management System risk management framework Key features of the corporate risk management framework remuneration for the Chairman Since 2014, the Company has The Company has been introducing of the Board of Directors, an been implementing the Employee new risk management methodolo- The CRMF is an inherent part independent director, in the amount Performance Management System gies and integrating them with key of our corporate governance universe of USD 1,000,000 per year, paid based on a 360-degree assess- business processes and functions. in equal instalments on a quarterly ment of the key performance Risk management training basis in roubles at the exchange indicators (KPI) and competencies programmes take place on rate of the Bank of Russia on the last (managerial, corporate and value a regular basis to improve Regulations Objectives Responsibility 1 business day of the reporting quarter . related). The company’s KPIs cover employees’ professional skills for the CRMF Russian and international laws, Increase the likelihood of achieving safety, operating efficiency, capital and competencies. implementation including the Corporate the Company’s goals According to the Company’s management and organisational and improvement Charter, decisions on remuneration development and production On a regular basis, the Audit Governance Code recommended by the Bank of Russia and reimbursement amounts metrics. For our production Committee of the Board of Improve resource allocation the Company’s Vice-President for payable to the members facilities, KPI sheets are developed Directors reviews the status Russian and international boost the Company’s investment internal controls of the Company’s Management down to the shop manager level. report on the corporate risk professional risk management case and shareholder value and risk management Board are reserved to the Board management framework and standards, including ISO 31000 of Directors. The Company does The main focus in assessing provides recommendations Risk management and COSO ERM Risk Management Service not engage external consultants KPI performance in 2016 for its further improvement. Enterprise Risk Management – on remuneration matters. Remu- was to improve their quality Integrated Framework neration of the Management Board (the measurability and significance), In 2016, as part of the corporate members is linked to the Compa- as well as to train heads of units risk management framework ny’s financial (such as EBITDA) and and functions how to provide development: non-financial metrics (e.g. system- feedback based on assessment ΅΅ the Company’s Board of Directors Standard principles embracing all business areas and management levels atic measures to reduce workplace results. In 2017, the KPI-based adopted a Corporate Risk injury rates, interaction with assessment will be extended Management Policy, while stakeholders, updating and to cover managers up to section the Company’s President endorsed 38 implementing the corporate heads at key production facilities. the new policy in a declaration Key initiatives aimed at improving Key risks associated with corporate Risk insurance strategy). A G4–52, G4–53 of commitment; the corporate risk management social responsibility: Insurance is a key tool to manage 4.4. ΅΅ risk experts, whose responsibility framework include: ΅΅ Workplace injury risk risks and finances in the long-term Remuneration amounts payable Risk management is to coordinate risk management ΅΅ creation of local risk manage- ΅΅ Technical and production risk perspective, and protect the assets to the members of the Management framework activities and provide knowledge- ment standards and guidelines ΅΅ Risk of escalating social tensions of the Company and its sharehold- Board and to the President are set based support to risk owners, were for the Company’s units and in the regions of operation and ers against any unforeseen losses forth in their employment contracts The Company’s operations are appointed in various departments business areas that are custom- strained social and labour related to our operations, including approved by the Board of Directors. associated with inherent risks that of the Head Office; ised to fully fit their operations; relations among the workforce due to external hazards. may adversely affect its strategic ΅΅ key risks affecting the Company ΅΅ integration of risk management ΅΅ Risk of disruptions in Norilsk The dismissal policy for top and operational goals, including were identified, reported, analysed practices into the core business Airport operations during the The Group has centralised its executive officers does not differ financial performance. To ensure and documented along with processes of the Company, runway reconstruction in 2017 insurance function to consistently from the dismissal policy for other that all risks are managed in an risk management procedures. including strategic and opera- ΅΅ Environmental risk implement uniform policies and employees. efficient way, we have implemented The Management Board tional planning and investment ΅΅ Risks posed by climate change standards supporting a comprehen- and keep improving our corporate and the Audit Committee activities; (insufficient water resources sive approach to managing The total amount of remuneration risk management framework review risk-related reports ΅΅ phased deployment and soil thawing risk). A G4–2 insurance policies and fully paid to the members of governing (CRMF). on a regular basis; of IT systems and risk covering every risk at all times. bodies in 2016 (including salaries, ΅΅ Nornickel’s Investment Project Risk management automation For details on risks and related bonuses, remuneration for Management Regulations were tools in the Head Office, mitigants see the following sections To mitigate risks, we have imple- membership in the governing developed and approved. branches, and subsidiaries; of the Report: 4.10, 6.1, 7.1, 7.3, 8.1, mented a corporate insurance body, reimbursement of expenses) ΅΅ continuing development 8.2, 8.3. programme that covers assets, was RUB 3,533,398,000 of quantitative risk metrics equipment failures and business (USD 52,709,828)2. and, in particular, creation interruptions across the Group. of a quantitative model for key Our corporate insurance policies risks affecting the Company. are issued by major Russian insurers in cooperation with an international broker. This helps the Group make sure that its risks are underwritten by highly reputable international re-insurers.
1 This amount is after taxes that are withheld in accordance with the applicable Russian law. 2 The total amount of remuneration paid to the members of governing bodies in 2016 under IFRS was RUB 4.1 bn (USD 62 m).
Corporate Social Responsibility Report 2016 Responsible operations Nornickel GROUP
Principles of centralisation apply When planning operations, Developing and implementing to our freight, construction and the Company ensures compliance comprehensive corporate security Corporate security focus areas installation, aircraft and ship with the requirements of the measures across the Group is within insurance programmes. The Group, applicable Russian environmental the competence of the Corporate as well as its directors and officers, laws and regulations, including: Security Unit, acting in line with Ensuring safety and integrity Ensuring anti-terrorism and Preventing embezzlement of the Group’s property anti-sabotage security and illicit trafficking of carry business and third-party ΅΅ volumes of emissions and Russian laws, applicable international of the Group’s critical semi-products containing liability insurance. discharges set out in permits; regulations, internal standards and infrastructures precious metals ΅΅ limits for waste generation guidelines. To optimise the terms of coverage and disposal; and better manage covered risks, ΅΅ water consumption terms and At Infoforum–2016, National Forum we follow the best mining industry the hazardous waste management for Information Security arranged Ensuring information Monitoring contractors’ Ensuring confidentiality practices. licence. jointly with representatives of Russia’s security across the Group compliance with Russian laws, and protection of contractors’ Security Council, Federal Security including their anti-money personal information Precautionary Service, Ministry of Internal Affairs laundering and approach A G4–14 4.5. and Federal Guard Service, Nornick- counter-terrorist In accordance with Nornickel’s Corporate security el’s excellence in IT security was financing initiatives Investment Project Risk Manage- recognised by the Silver Dagger ment Regulations approved The comprehensive corporate Award, a professional information G4-DMA in 2016, risks are analysed security measures at Nornickel security prize won by the Company Anti-Corruption and impacts and potential conse- Group are aimed at ensuring safe in the nomination for “Secure Ensuring protection of Preventing corruption Implementing drug prevention quences of actions planned are uninterrupted production, logistics, Cyberspace”. employees’ personal and awareness initiatives assessed using qualified expert transportation and other operations information review during both project initiation and functioning of the critical In September 2016, Norilsk Nickel and implementation. In the event infrastructures, as well as at took part in the InfoSecurity 2016 fair, material risks are identified, preventing embezzlement and one of the most significant events Ensuring observance Participating in agenda formulation and activities of Russian mitigation initiatives are developed, in-house corruption, and counter- in IT security. The Company’s excel- of human and civil rights and international organisations for increasing safety in precious metals and a decision may be taken to ing illicit trafficking of precious lence in industrial IT security was and freedoms production and trade, and combating illicit trafficking of raw materials for these metals and transnational crime 40 abandon the project. In case of metals and metal bearing materials. recognised by the IT Sec Award 2016. implementation, current regulations During the fair, Norilsk Nickel also and standards are taken into The corporate security system is proposed establishing the Club account. FEED documents for all structured and managed based on of Information Security in Industry, the projects being implemented a number of targeted programmes a cross-industry organisation to share by the Company are subject on economic, corporate, informa- practical experience in cyber threat 4.6. Foreign Corrupt Practices Act of The Company has developed to mandatory assessment for tion, facility, and transportation protection and develop initiatives Preventing and Fighting 1977 (FCPA), the UK Bribery Act a set of measures on mitigating compliance with the applicable law security. Nornickel is actively strengthening key elements Corruption1 2010, and the Council of Europe and eliminating corruption risks during state expert appraisal. engaged in public-private partner- of domestic IT infrastructure. Criminal Law Convention on for certain business processes ships to maintain high security The Company’s strategic goals Corruption ratified by the Russian with a high probability of corruption Our corporate health and safety levels and enhance social stability For details, see the following focus on maintaining the trust and Federation. offences (procurement, relations system requires that our employees at its facilities in the regions of sections: Dialogue with Authorities, interest of shareholders, investors, with counterparties, business assess risks during each shift. Each operation. Communities and Non-Profit partners, employees, state, The Company consistently partners and other third parties, employee evaluates risks inherent Organisations, Employees Russian and international business implements the Management charity, sponsorship, etc.). in his work before starting an and Social Policy, Preventing communities, and society with Board’s resolutions on The progress of anti-corruption assignment for their shift. If life and and Fighting Corruption. regard to the Company’s opera- the compliance framework measures is reviewed and the risk health are in danger, an employee tions. Therefore, corruption of any focusing on anti-corruption map is updated on a quarterly has the right to demand elimination nature is absolutely unacceptable. priorities, key actions and basis. of risk factors or refuse to do the role of the management the work. The Company ensures compliance bodies. The Company joined the Anti- with applicable Russian and Corruption Charter of the Russian international anti-corruption laws in To develop and monitor anti-cor- Business in January 2014. In late accordance with such key regula- ruption and prevention measures, 2015, the Company submitted tory documents as the United the Company has assigned a its Declaration on Compliance Nations Convention against dedicated unit – the Corporate with the Regulations of the Anti- Corruption ratified by the Russian Relations Department. Its areas Corruption Charter to the Russian Federation, Federal Law No. of responsibility include identifying Union of Industrialists and Entre- 273-FZ On Combating Corruption, and documenting risks related preneurs, and its participation Presidential Decree No. 147 On to corruption, developing risk in the Charter’s Register was the National Anti-Corruption Plan management measures and extended. for 2016–2017, the Criminal Code controlling their implementation. of the Russian Federation, the US
1 The “Company” in this section is understood as MMC Norilsk Nickel.
Corporate Social Responsibility Report 2016 Responsible operations Nornickel GROUP
In November 2016, the Company the Company’s representatives, employees regularly participate All anti-corruption measures are anti-corruption clause in contracts Control Rules on Anti-Money joined the United Nations Global and other persons such as foreign in round tables, conferences, and implemented in the Company and its with counterparties, take measures Laundering and Counter-Terrorist Compact. This major UN initiative public officials and international expert group meetings addressing standalone business units, and are on anti-corruption monitoring, Financing developed in compliance in the area of corporate social officials where respective obligations major challenges in corruption also recommended to the Group’s internal document review, counter- with the Federal Law requirements. responsibility and sustainable are stated in agreements signed prevention. In 2016, trainings subsidiaries. The Company’s party due diligence enhancement, development unites entities with them, their internal regulations, in the corruption prevention anti-corruption initiatives are regularly employee training, and to further The key principle underlying committed to responsible business or directly in applicable law. The Policy policy and methods covered covered in corporate press releases. develop corporate culture. the Company’s AML/CTF monitoring and good industry practice is recommended for implementation 2,966 employees, which The Company ensures functioning of practices is the engagement of all worldwide. Combating corruption and observance in all Group entities. corresponds to 3.7% of the total the Preventing and Fighting Corrup- employees, within their compe- is one of the principles of the UN year-end headcount. tion page on the corporate website 4.7. tences, in identifying signs of Global Compact that its signatories In its government relations, www.nornik.ru and the relevant Anti-money laundering money laundering and terrorist undertake to adhere to. A G4–15 the Company, its employees Over 80,000 employees were section on the Company’s intranet and counter-terrorist financing activities in counterpar- and corporate bodies comply informed of the existing corruption portal. financing initiatives ties’ operations, and also The main focus areas of the Com- with the applicable laws prevention methods when signing in identifying operations subject pany’s anti-corruption activities are (including anti-corruption laws). the anti-corruption appendices In 2016, corruption-related risk As required under Federal Law to mandatory control. stated in the Anti-Corruption Policy to their employment contracts. assessment was held in respect of No. 115-FZ On Anti-Money approved by the Board of Directors The Company provides ongoing MMC Norilsk Nickel and the Russian Laundering and Combating The Company runs due diligence on 17 November 2014. The Policy’s training on anti-corruption matters In December 2016, the Company Group companies. A G4–SO3 the Financing of Terrorism dated on all potential counterparties provisions, principles and require- for its personnel. In August 2016, held an anonymous survey among 7 August 2001, the Company before signing contracts with them ments are mandatory for the the Group launched the distance the employees in order to get their To further improve the existing implements a set of anti-money in order to check their reliability governing bodies and all employees. learning course On Preventing opinion on corruption in the Company compliance procedures, in 2017 laundering and counter-terrorist and identify entities and persons It is applicable to all counterparties, Corruption. The Company’s and its anti-corruption performance. the Company plans to update financing initiatives (“AML/CTF”). involved in extremist or terrorist its corporate governance and activities. sustainable development policies, The main document regulating
Internal Anti-Corruption Documents Framework A G4–SO4 including the anti-corruption policy, the Company’s procedures for take measures to include the AML/CTF monitoring is the Internal Anti-Corruption Policy*
42 A G4–SO5
Procedure on the Corporate Trust Regulation on the Prevention and Regulation on Business Gifts Indicator Number, 2016 Service of MMC Norilsk Nickel Management of Conflicts of Interest at MMC Norilsk Nickel Recording and monitoring Confirmed incidents of corruption 0 Prompt response to reported The Declaration form for reporting hospitality expenses Confirmed incidents of corruption-related dismissals 0 violations, abuses and embezzlement conflicts of interest must be filled in by: Business gift acceptability CTS’s geography covers the • candidates applying for vacant positions criteria Confirmed incidents of corruption-related penalties (criminal or administrative penalty 0 Company’s Head Office, branches, • employees, when required or disciplinary action by employer on relevant grounds) and subsidiaries in the territory Report Form on relatives and Confirmed incidents of corruption-related non-extension or termination 0 of the Russian Federation family members of the members of contracts with business partners of the Management Board and the Board of Directors Pending corruption-related lawsuits filed against the company or its employees 0 during the reporting period
Standard anti-corruption Procedure for anti-corruption due Regulation on the Product Adjudicated corruption-related lawsuits filed against the company or its employees 0 agreement – appendix diligence on internal documents Procurement Procedure for during the reporting period to the employment contract at the Head Office of MMC Norilsk MMC Norilsk Nickel’s Nickel Enterprises Anti-corruption obligations Counterparty due diligence of an employee Elimination of any corruption to confirm their reliability, Guaranteed protection drivers in the documents solvency and financial stability of whistleblowers by the Company Anti-corruption clause in contracts (to be enacted in Q2 2017)
Code of Business Ethics for Employees* Directors’ Code of Corporate Conduct and Business Ethics*
* The documents were approved by the Board of Directors
Corporate Social Responsibility Report 2016 Responsible operations Nornickel GROUP
4.8. Any interested person may contact 4.9. to environmental issues, workforce Corporate Trust Reports received in 2016 (by type), Reports confirmed in 2016 (by type), the Service. Transparency management, increased transpar- 377 reports in total 98 reports in total Service A G4–57, G4–58 ency, and sustainable development A G4-EN34, G4-LA16, G4-SO5, G4-SO11 After a report is registered by MMC Norilsk Nickel is guided of the regions where we operate. The Company’s Corporate Trust an operator, the standard time1 by the principle of increasing Service has operated since until the investigation results are transparency and committed to The shutdown of the outdated February 2010 to ensure prompt reviewed by the Head of Service annual growth in disclosure levels. Nickel Plant in 2016 boosted the 5 29 2 response to reported violations, 5 6 is 21 days. The exceptions are The Company honours its voluntary interest of experts and the general abuses and embezzlement. 29 reports that require immediate obligation to go beyond mandatory public in the Company’s environ- 4 29 To make a report, anyone is invited 115 action or additional investigation. disclosure requirements of mental programmes and environ- 13 to call a toll-free hotline available If the report is found substantiated, the Russian law and to keep its mental impact reduction initiatives. 14 24/7: +7 800 700 1941, +7 800 700 a set of control measures is taken, stakeholders and the general More attention was also drawn 1945, or e-mail to: [email protected]. 18 and if a violation is confirmed, public fully informed about the to Our Home, My Home, and World 22 The Service’s geography covers all measures are taken to correct Company’s strategy, key develop- of New Opportunities social pro- business units of the Company and 49 the situation, eliminate any ments, and operating results. grammes. Among cultural projects, Group members. negative consequences, most interest was shown for the 105 30 and inform stakeholders. The key principles of our informa- Company’s collaboration with the The key principles underlying the tion policy are regularity, timeliness, Golden Mask Festival and the Multi- Corporate Trust Service include: Report statistics (as broken down availability, reliability, complete- media Art Museum, while in sports, ΅΅ guaranteed confidentiality for by the entity of origin and type of ness, balance, and impartiality. the most popular project was our everyone who do not wish to Payroll abuses Breaches of job descriptions reported abuse) are submitted to The Company publishes informa- sponsorship of the 2019 Winter disclose their personal data; the Audit Committee of the Board tion in mass media, on its website Universiade in Krasnoyarsk, where Production related abuses Labour disputes ΅΅ independent consideration of Directors and the Company’s www.nornik.ru, corporate pages the Company is the General Partner of reports; Technology and safety abuses Social issues relevant internal units on a in social media and feeds of news and works in close cooperation ΅΅ timely and unbiased consider- quarterly basis. The Service’s agencies, hosts publicity events with the International University ation of all incoming reports Corruption Embezzlement performance is monitored online (press conferences, briefings, Sports Federation (FISU). irrespective of the position and by the Director of Internal Control conference calls), issues statutory In 2016, national and local media Commercial and contractual abuses 44 employment period of the person Department and assessed annually publications (annual report, CSR published in aggregate more than mentioned therein. by the Board’s Audit Committee. report), and uses other communica- 90,000 news items about the Employees in charge of the Service tion channels. The Company Company and about 50 interviews have report processing perfor- actively cooperates with leading with our top executives. mance as their individual KPIs. business media, major news Corporate Trust Service reports management, items agencies, and news-focused The year 2016 saw further G4-dma Society impacts Information about the Corporate TV channels. development of our multimedia grievance 1,092 mechanisms Trust Service is available on project “Be Norilsk. The northern- 955 G4-dma 923 the Company’s intranet site An important focus in 2016 was on most city in the world through the Environmental 909 grievance Received and official webpage. To raise systemic enhancement of outreach eyes of its inhabitants”, with more mechanisms DMA awareness about the Service, to social media in which the materials added to norilskfilm.com. G4-dma Accepted the Company includes its logo Company has its corporate pages. The project received the Grand Prix Society Impacts 656 for investigation and Labour and all the relevant information This is viewed as a way to both at Digital Communications Awards Practices Grievance 57 into its corporate calendars, promote transparency and level off 2016. Mechanisms 98 In process 24 102 102 as at the beginning posters, and salary slips. geographic differences by 11 377 of the period 71 providing every internet user with To observe the requirements 301 45 279 23 255 direct access to information on of law, in 2016, Nornickel ceased 229 42 Settled 206 Nornickel. to be a shareholder in any media 152 164 (not confirmed) 119 89 outlets (the biggest of which were Settled (confirmed) 2016 was the year of Nornickel’s VK Telesfera, SZV, and Severny rebranding, which reflected major Gorod Media Company), but 2012 2013 2014 2015 2016 positive changes that had happened maintained regional media in the Company in recent years – presence due to its efficient changes in production, approach outreach activities. A G4–13
1 The Procedure on the Corporate Trust Service is approved by the Company’s President.
Corporate Social Responsibility Report 2016 Responsible operations Nornickel GROUP
4.10. MMC Norilsk Nickel’s commercial Kola MMC’s products (electrolytic Compliance Product responsibility products (electrolytic nickel as nickel, carbonyl nickel powder, of the management full-plate and uncut cathodes, carbonyl nickel pellets, electrolytic system with External nornickel Group is efficient in its primary nickel, copper cathodes, copper, electrolytic cobalt, cobalt international audits Certification Audit Certification Company standards in 2016 body results area G4-DMA production operations to provide and metallic cobalt) are certified concentrate, precious metal Compliance 1 (Products) volumes, quality, and product range in the GOST R certification system concentrates, and sulphuric acid) do MMC Norilsk Nickel ISO 9001:2008, Second Bureau Veritas Compliant Production, project management, that meet the needs of society while to demonstrate compliance with not require mandatory certification ISO 14001:2004 surveillance Certification (BVC) storage, delivery, including by fully complying with all applicable all applicable rules and regulations. and are not certified against Russian audit sea, and sales (nickel, copper, cobalt, precious materials, sulphur, laws and HSE requirements. The certification confirms that the regulatory standards. Products are selenium, tellurium) products have stable properties labelled in accordance with GOST Environmental and quality-related set forth and tested during the and TU standards. At the same time, Kola MMC JSC ISO 9001:2008, Recertification Bureau Veritas Compliant Mining and processing of ore, goals and objectives are in line with GOST R voluntary certification Kola MMC’s cathode nickel brands ISO 14001:2004, audit Certification (BVC) production of nickel, copper, cobalt, OHSAS 18001:2007 their compounds, precious metal the Company’s strategic goals and process. of SEVERONICKEL COMBINE H-1Y concentrates, sulphuric acid are formulated in the management’s and SEVERONICKEL COMBINE H-1 resolutions based on annual Copper cathodes produced by are registered on the London Metal Gipronickel Institute ISO 9001:2008 First Societe Generale de Compliant R&D, design, engineering and surveillance Surveillance (SGS) environment conservation activities, Corporate Integrated Management Polar Division are registered on Exchange and Shanghai Futures audit mining, concentration and smelting System performance reviews. the London Metal Exchange under Exchange. project management; development To achieve the goals and objectives, the NORILSK brand. Nickel branded of standards for non-ferrous the Company develops plans and as NORILSK COMBINE H-1 is In 2016, Nornickel was awarded the metal industry products and their inspection methods; development registered on the Shanghai Futures programmes and then implements Best Overseas Brand of Material for of reference standards for the them, monitors the status of target Exchange. Plating at SF EXPO CHINA Chongq- composition of non-ferrous metal parameters, and assesses perfor- ing 2016. industry products mance. Nickel branded as NORILSK Norilsk Nickel ISO 9001:2008, Recertification DQS GmbH Compliant Manufacturing of nickel and cobalt COMBINE H-1Y and NORILSK Harjavalta ISO 14001:2004 audit (DQS&UL) products In 2016, quality management COMBINE H-1, along with cobalt OHSAS 18001:2007 training was provided to branded as NORILSK K1AY and 155 employees, including 77 line NORILSK K1A, were also registered 46 managers and 78 other employees. on the London Metal Exchange. Corporate Integrated Management System (CIMS) Item 2012 2013 2014 2015 2016
Nickel production, kt 300 285 274 266 236
Copper production, kt 364 371 368 369 360 Continuous enhancement of operational excellence Objectives Competitive products and services Palladium production, ‘000 oz t 2,731 2,661 2,749 2,689 2,618 of CIMS Alignment with consumer needs and expectations related to product Platinum production, ‘000 oz t 683 651 657 656 644 safety, quality, and reliability of supplies
Factors ensuring reliability and continuity of Nornickel’s deliveries Quality Assurance Policy
Key Environmental Policy Efficient self-developed product Close coordination between Corporate regulations Health and Safety Policy delivery planning marketing, production cargo fleet Nornickel Group’s internal standards and monitoring system and delivery units
GOST R
ISO-certified management Feedback loop with customers that Talented staff Key Russian and ISO 9001:2008, ISO 14001:2004, OHSAS 18001:2007 system in Nornickel Group enables prompt response to their international Rules and regulations of the European Union, World Trade proposals, inquiries, and complaints standards Organisation, London Metal Exchange, and Shanghai Futures Exchange
Throughout the history of Nornickel Group, it never once failed to meet its obligation to deliver products to consumers
1 The Company’s products, when used as intended, fall in the category of those that change their properties almost completely: nickel is used in alloys; copper is mostly used in construction and manufacturing of electric and electronic devices; platinum and palladium as chemical compounds are mainly used in autocatalysts; and nickel salts are used in a variety of industries.
Corporate Social Responsibility Report 2016 Responsible operations Nornickel GROUP
Customer satisfaction customers, whose aggregate ing out of court settlement for 4.11. To improve the quality of decisions 4.12. monitoring consumption share must be at least all of them taking into account Research and related to research and technology, Ensuring economic Consumers of our key products are 50% of the Company’s total product the interests of consumers development the Company has an R&D Panel. efficiency surveyed to assess their satisfac- sales. In 2016, the customer (21 complaints were deemed tion on an annual basis, and those satisfaction level dropped by unfounded). For all legitimate Norilsk Nickel Group’s R&D activities A separate R&D activity is our Office Economic efficiency ensures of sulphuric acid, once every three a mere 0.2% against 2015 to complaints (23 cases), and also are focused on research, technologi- for Chemical Forensic Analysis. the Company’s development, G4-DMA Economic years. Compliance with contract 2.68 points. Best contributors partially for complaints that were cal development, feasibility studies, In 2016, it continued to update sustainability, and investor appeal. Performance terms is regularly audited and to the aggregate customer turned down (4 cases), the design and survey work to support its product databank used to fully analysed to make sure all contract satisfaction rate were platinum Company developed remedial the Company’s strategy. The main prevent cross-border smuggling In 2016, despite several adverse terms and conditions are met in full. group metals (+3.7% y-o-y in 2016), actions. One complaint is pending. strategy implementation activities of any metal-containing materials. factors (metal prices dropping carbonyl nickel (+1.5%), and relying on R&D are: The databank contains information to multi-year lows, high price The main criterion for customer copper (+1.3%). In 2016, the Company received ΅΅ development and implementa- on nearly 400 products of Nornickel and exchange rate volatility), satisfaction is maintaining or no major fines for failure to comply tion of the environmental Group (based on 20,000 repeated the Company maintained a leading exceeding the target satisfaction In the reporting year, the Company with regulatory rules and require- programme; samples), 120 products of other position in the global mining sector level (2.50 points or above). received 45 complaints about its ments related to product supplies. ΅΅ operating efficiency metals and mining companies, with a 47% EBITDA margin. That The key metric is coverage of key product or service quality, achiev- A G4–PR9 improvement; 4,500 minerals, and 3,000 metal high performance was driven by ΅΅ redefinition of the upstream alloys. The databank is designed favourable exchange rates, efforts project portfolio. as an intelligent information retrieval to control operating cost inflation,
Key risks associated with corporate social responsibility A G4–2 wizard and is a powerful software and the disposal of foreign The Group’s main R&D facility is tool currently used for the identifica- and non-core assets. Gipronickel Institute, one of Russia’s tion of unknown materials not only largest research and engineering by our Office for Chemical Forensic The Company’s CAPEX in 2016 was Technical and production risk centres for mining, metallurgy, Analysis, but also by some law- in line with the three-year average. concentration and processing enforcement laboratories. The large-scale production capacity of minerals. Besides, we use dozens reconfiguration programme launched Risk description of domestic and foreign research For the Company’s major R&D in 2014 entered its most active Technical, production, or natural phenomena which, once materialised, could have a negative impact and engineering companies along achievements in 2016 see the phase in 2016. Our CAPEX was on the implementation of the production programme and cause technical incidents, land remediation 48 with Russian universities. Research and Development section largely centred on the Bystrinsky or reimbursable damage to third parties and the environment in the 2016 annual report. Mining and Processing Plant project,
Risk mitigants Environmental Programmes that Rely Heavily on R&D A G4–2 proper and safe use of equipment according to the requirements of the technical documentation, technical rules and regulations as prescribed by the applicable laws; timely replacement of fixed assets to achieve and maintain the production safety targets; implementation of automated systems to control the equipment process flows; Polar Division’s Outdated Nickel Plant shutdown (Implemented in 2016) environmental improvement of the maintenance and repair system; Upgrade of Talnakh Concentrator to increase sulphur disposal to tailings programme training and professional development of employees both locally, on site, and centrally, through the corporate Construction of recycling units to extract elemental sulphur training centres; (sulphuric acid) from waste gases at Nadezhda Metallurgical Plant ongoing identification and assessment of technical and production risks (organisational and technical action plan and at the Copper Plant to mitigate such risks is in progress); engagement, on an annual basis, of independent surveyors to analyse the Company’s exposure to disruption
in the production and logistics chain and assess related risks; in 2016, technical and production risks were insured Kola MMC’s Switching to briquetting and briquette melting technology as part of the property and business interruption (downtime) insurance programme, with an emphasis laid on best risk programme to (Implemented in 2016) management practices in the metals and mining industry. reduce sulphur Upgrade of melting equipment, including reconstruction dioxide emissions of feeding and sealing systems in electric ore smelting furnaces by introducing the briquetting A set of measures to prepare low-grade ores for smelting and briquette melting technology
Corporate Social Responsibility Report 2016 Responsible operations Nornickel GROUP
Nickel Plant shutdown-related of 2016, which translates into (which is a notable reduction as projects, Talnakh Concentrator USD 7.4 per share. As at the end compared to 608 orders in 2015), expansion, and Nadezhda Metallurgi- of 2016, our net debt to EBITDA including 15 for environmental cal Plant upgrade. We continued the ratio remained one of the lowest in impact, 46 for non-compliance with development of an efficient solution the industry at 1.2x. The Company’s labour and health and safety laws, for the Sulphur Project, which is stable financial position is confirmed and 339 on other grounds. the next step of our environmental by investment grade ratings from A G4-SO8, G4-EN29 G4-DMA programme after the Nickel Plant Standard & Poor’s and Fitch. Compliance shutdown. For more details on economic In 2016, the Group’s companies performance see the Financial The Company remains among paid RUB 42.3 m in administrative Overview section (MD&A) industry leaders in terms of dividend fines to budgets of various levels. in the 2016 annual report. yield. Nornickel paid ca. USD 1.2 bn There was a total of 400 orders of interim dividends for 9 months issued by regulatory authorities
Financial highlights A G4–9
Indicator 2012 2013 2014 2015 2016
Revenue, RUB billion 384.5 366.2 456.0 506.1 548.6
Gross profit, RUB billion 186.5 159.0 238.0 277.0 270.8
EBITDA, RUB billion 153.3 133.6 218.2 247.3 257.3
EBITDA margin, % 40 37 48 50 47
Net profit, RUB billion 67.4 23.5 93.4 104.0 167.4
Dividends paid, RUB billion 31.0 98.4 159.9 154.2 86.7
Assets, RUB billion 637.0 614.7 739.8 974.5 998.3 50 Total CAPEX, RUB billion 84.4 63.4 49.9 103.3 112.3
Direct economic value generated and distributed2 A G4–EC1
Indicator, RUB million 2012 2013 2014 2015 2016
1. Direct economic value generated 384.9 367.8 470.8 521.2 554.9
2. Economic value distributed, including: 334.7 414.4 464.9 554.2 512.7
Operating expenses 158.0 169.5 162.0 175.7 194.6
Community investments and charity3 5.7 3.6 2.7 7.0 7.4
Payroll and other employee remuneration and benefits 74.4 87.3 87.4 104.5 114.2
Payments to providers of capital (interest, dividends) 38.3 108.3 165.2 222.0 133.4
Gross tax payments 58.3 45.7 47.6 45.0 63.1
3. Economic value retained (1–2) 50.2 (46.5) 5.9 (32.9) 42.2
1 Includes costs paid in Russia for new construction projects, expansion, retrofit or upgrade of existing facilities, acquisition of machinery and equipment, R&D and other expenses, as well as housing and amenity construction. 2 Calculated on an accrual basis under the IFRS. The Company used its in-house calculation methodology developed in line with GRI G4 Guidelines. 3 Excluding CAPEX.
Corporate Social Responsibility Report 2016 Effective relationships Nornickel GROUP
Nornickel organised the Time of Reliable Solutions, a corporate forum that became a venue to discuss the Company’s strategy progress, corporate culture and values, coordinate the vision of future development, and define tasks for the next three years. For the second year in a row, the Company turned the forum into an 52 interactive event with a better involvement of employees and managers in the discussion of corporate activities.
PROFESSIABILITY TO ENSURE ONALISM A SUSTAINABLE STRONG PERFORMANCE
GROWTH Corporate Social Responsibility Report 2016 Effective relationships Nornickel GROUP
5.1. The Transparency Policy They provide every support to Stakeholders of MMC Norilsk Nickel seeks employee representative bodies and interaction to provide stakeholders and comply with the Russian mechanisms with complete and accurate Labour Code, collective bargaining information about the Company’s agreements and joint resolutions. MMC Norilsk Nickel’s key stake- operations, as well as ensure holders are employees, sharehold- proper feedback2. Employee interests are represented ers, investors, business partners, by social and labour councils national authorities, local communi- and trade union organisations. ties and Russian and international 5.2. The Company has also set up non-profit organisations. Nornickel Dialogue collective decision making bodies identifies stakeholders based on with employees3 representing the employer, the extent to which they interact, employees and trade union share interests and communicate Nornickel Group companies organisations. with the Company. A G4–25 run an effective social partnership G4-DMA Freedom framework aimed at reconciling of Association and Collective Stakeholder engagement principles interests of employees and Bargaining and procedures are set out employers on matters pertaining in the Code of Business Conduct to the regulation of social 5. 1 approved by the Company in 2012 . and labour relations. A G4–HR4
A G4–24, G4–26
Key interests Interaction Key interaction Effective Stakeholders of stakeholders mechanisms events in 2016
Personnel
Employees ΅΅ Social benefits ΅΅ Joint commissions, committees ΅΅ Time of Reliable Solutions 54 of the Company ΅΅ Favourable working and working groups corporate forum relationships conditions ΅΅ Discussions with trade unions ΅΅ Retraining and outplacement ΅΅ Decent salaries and labour councils of Nickel Plant employees ΅΅ Company’s stability ΅΅ Offices for operating, social ΅΅ Personal Donations as an employer and labour matters Programme for Company ΅΅ Opinion polls employees HTS Over ΅΅ Corporate media, booklets, HLI G information screens and boards The Company honours ΅΅ Corporate intranet portals 2016 HI G 2016 47,000 its voluntary obligation Shareholders and investors reports Shareholders ΅΅ Capitalisation growth ΅΅ Meetings (incl. one-on-one ΅΅ Strategy Day reviewed by the offices to go beyond mandatory and investors ΅΅ Dividend payments meetings) and conference calls on 16 May 2016 for operating, social Investment banks ΅΅ Phone calls ΅΅ Foreign investors’ business and labour relations ΅΅ Transparency of information disclosure requirements (brokers) ΅΅ Emails visit to the Polar Division of MMC Norilsk Nickel Analyst and rating ΅΅ Site visits of the Russian law and agencies to keep its stakeholders Business partners 923 Suppliers and contractors ΅΅ Development of tender-based ΅΅ Customer satisfaction monitoring ΅΅ Nornickel awarded for the reports and the general public fully Company customers procurement ΅΅ Query and claim management Best Foreign Electroplating received by the Corporate ΅΅ Corruption prevention Product at SF EXPO CHINA Trust Service ΅΅ Meetings, conferences, fairs, Chongqing 2016 informed about the Company’s ΅΅ Product quality exhibitions Over ΅΅ Terms of delivery ΅΅ Tender-based procurement strategy, key developments, ΅΅ Contract support ΅΅ Corporate Trust Service 9,000 and operating results ΅΅ Joint seminars 1 news items As at the end of 2016, the work was ongoing to update the Code of Business Conduct to incorporate goals set out in the new development strategy. 2 about the Company For more details, please see the Transparency section. 3 published by national The information presented in this section refers to the Company’s Russian operations and Norilsk Nickel Harjavalta. and local media
Corporate Social Responsibility Report 2016 Effective relationships Nornickel GROUP
A G4–24, G4–26 Social partnership framework in Nornickel Group A G 4–11
Key interests Interaction Key interaction Stakeholders of stakeholders mechanisms events in 2016
Federal authorities
Russian Federation Council ΅΅ Regulatory improvement ΅΅ Working and expert groups, ΅΅ Cooperation agreement Social and labour Trade Union of Trade union On-site collective Russian State Duma in different areas commissions and committees signed (Russia’s Year of councils in all MMC Norilsk Nickel members: 11.5% decision making ΅΅ Environmental impact ΅΅ Public events the Environment – 2017) by major companies Employees of Nornickel Group bodies Russian Government MMC Norilsk Nickel, Ministry regulation ΅΅ Permits and licenses of Nornickel Group (interregional employees Federal ministries, agencies of Natural Resources and trade union) and services ΅΅ Support for domestic ΅΅ Intergovernmental commissions Environment, Federal Service producers Russian Trilateral for Supervision of Natural Commission on the ΅΅ Stability in taxes Resources and Government Regulation of Social and ΅΅ Social stability support across of the Krasnoyarsk Territory Labour Relations the Company’s geographies ΅΅ Round table discussion in the Russian State Duma on results of the Company’s Represent 86% of the Unites trade unions 8% of employees Collective Bargaining large-scale project to shut average headcount of MMC Norilsk Nickel of Nornickel Group Commission down Nickel Plant in Norilsk in the Group’s Russian and its subsidiaries, companies located Labour Dispute in August 2016 operations Kola MMC and its in Norilsk Taimyrsky Commission Dolgano-Nenetsky Local communities subsidiaries, NordStar and Zapolyarye Municipal District Social benefits Regional government ΅΅ Stability in taxes ΅΅ Working and expert groups, ΅΅ Social and Economic Health Resort commissions 17% of employees authorities commissions, committees Partnership Agreement and committees ΅΅ Environmental protection of Kola MMC and Local authorities and councils signed between ΅΅ Social stability support MMC Norilsk Nickel its subsidiaries Social insurance in the Company’s ΅΅ Cooperation agreements Territorial offices of federal and the Government commissions 33% of Zapolyarye government authorities geographies ΅΅ Development plans for the of the Murmansk Region Company’s regions of operation Health Resort Health and safety State-run educational ΅΅ Support for domestic ΅΅ Implementation of the employees institutions in the producers ΅΅ Corporate and partnership agreement to shut down commissions Company’s regions of programmes and projects Nickel Plant and committees 56 47% of Krasnoyarsk operation ΅΅ Forums, conferences, fairs, ΅΅ Memorandum signed River Port employees, Social and labour Local communities and and round table discussions to establish the Norilsk 46% of Lesosibirsk relations committees, civil society organisations ΅΅ Joint inspections, drills and training Development Agency Port employees, and etc. across the Company’s exercise footprint 59% of Yenisey River Shipping Company Russian and international non-profit organisations employees
Business associations ΅΅ Information exchange ΅΅ Joint projects ΅΅ Company joined the 13% of Krasnoyarsk Industry unions ΅΅ Removal of administrative ΅΅ Events (meetings, round table UN Global Compact Shipyard employees, 8% of Gipronickel Non-profit organisations barriers discussions, conferences and ΅΅ Nornickel joined the Institute Institute employees, ΅΅ Support for domestic competitions) of Information System and Russian and international Research Centre as a full- and 16% of NordStar sports organisations producers ΅΅ Membership in governing bodies fledged member employees ΅΅ Stability in taxes and committees ΅΅ Opinions, proposals, applications ΅΅ Partnership agreement ΅΅ Environmental protection signed between the Russian Olympic Committee and MMC Norilsk Nickel ΅΅ Partnership agreement signed between MMC Norilsk Nickel and the International University Sports Federation
The collective bargaining agreement* covers 78% of employees A G 4–11
* Including companies that have no collective bargaining agreements in place but have approved local regulatory documents making MMC Norilsk Nickel’s Collective Bargaining Agreement effective in these companies.
Corporate Social Responsibility Report 2016 Effective relationships Nornickel GROUP
In 2016, some of Russia-based solve reported problems in a timely and Crispian Investments Ltd. Competition Annual report awards CSR report awards Nornickel Group companies manner and always tend to the owning collectively 62% of (Yenisey River Shipping Company, needs and reasonable requests of the Company’s share capital, while ReportWatch Ranked first among reports of diversified – Gipronickel Institute, Norilsktrans- employees. Offices for operating, the remaining 38% is free float international companies and second gaz) made new collective bargain- social and labour relations has owned by institutional and private among Russian and international mining and smelting companies ing agreements or extended been in place since 2003, and their investors from Russia, Europe, the expired ones. Some of number keeps growing. In 2016, Asia and the USA. LACP Vision Awards Named a Top-10 Russian report Named a Top-10 Russian report the agreements were amended there were 24 offices, including and received a golden award and received a platinum award in the Materials class in the Materials class by collective bargaining commis- offices in the Polar Division, MMC Norilsk Nickel takes great sions in the reporting year. These Norilsknickelremont, Polar care in engaging with its sharehold- Moscow Exchange and Ranked first in the Best Metallurgy Ranked first in the Best CSR and amendments were mostly neces- Construction Company, Norilsk ers and provides equal access Forum Securities Market and Mining Annual Report category Sustainability Report category sitated by adjustments in wage Support Complex, Gipronickel to significant information in competition
rates arising from legislative Institute, Polar Transportation accordance with the Russian law CR Reporting Awards 2017 – Named a Top-10 report in the Relevance changes, organisational structure Branch, and Norilskpromtransport. and international best practices. & Materiality and Credibility through transformation and introduction Over 47,000 queries and applica- Assurance categories of a new automated HR system. tions were considered by the In 2016, the Investor Relations In general, Nornickel Group’s offices in the reporting year. Department continued working Russian operations comply with the A G4–LA16 on the acquisition of new investors. applicable laws and substantially As part of this effort, the Department Investment community engagement initiatives meet employee expectations. held 386 meetings with investors 5.3. and organised the Investor Day in There were no strikes Dialogue with London, followed by massive road or lock-outs at the Group’s shareholders shows in Europe and the USA. entities in the reporting year. and investors Investor Day Conference calls on Investment conferences An annual independent study (attended by senior financial performance; (attended by Company Offices for operating, The authorised capital of of investor perception towards management) commodity market managers) social and labour relations MMC Norilsk Nickel is made MMC Norilsk Nickel by the leading discussions 58 Offices for operating, social and up of 158,245,476 ordinary international investment funds labour relations are primarily tasked shares with an aggregate showed continued improvement with fast response to employee market value of USD 26.6 bn in communications, disclosure, queries (including those from as at 31 December 2016. and presentation materials, as well G4-DMA Labour retirees and veterans) and solving The Company’s ordinary shares as an increase in management Practices Road shows Visits to Company sites Investor meetings Grievance operating, labour and social are traded mostly on the Moscow availability and visibility, which Mechanisms conflicts in a timely manner, as well Exchange, while ADRs are traded benefits the Company’s investment by investors and analysts (group and as communicating employee on the London and New York stock case. one-on-one meetings) concerns to the management of exchanges. A G4–7 relevant business units and In 2016, public reports of management of the Company. They The Company’s major the Company were very much monitor the staff’s social status on a shareholders are Olderfrey appreciated by international monthly basis, making it possible to Holding Limited, UC Rusal Plc and Russian experts. Publication of financial statements, statements of Consulting support for operations, annual and quarterly reports, CSR reports, shareholders on Company
Evolution of investor engagement initiatives statements on material facts, press releases, investor shares in circulation presentations, etc. on the Company’s corporate website Initiative 2014 2015 2016 (http://www.nornik.ru/) and in media news feeds
Investment conferences 16 22 25
Investor road shows 7 10 10
Corporate Social Responsibility Report 2016 Effective relationships Nornickel GROUP
5.4. Nornickel is a member of the Participation in international, Representatives of the Company In 2016, Nornickel took part in The Company has set up a Dialogue with Institute of Information System and national and regional events take part in parliamentary sessions drafting Norilsk 2030, a strategy for dedicated function to monitor business partners Research Centre (IISRC) and thus In 2016, MMC Norilsk Nickel and round table discussions the social and economic develop- the draft laws and regulations on has an opportunity to shape the acted as a partner to (sponsor of) organised by the Federation ment of the Norilsk Municipality. a regular basis, to analyse them Nornickel is an active member of global agenda on such issues as the following major economic Council and State Duma of the This work will be continued in 2017. in depth, to inform the Company’s the International Platinum Group mitigation of adverse information forums and events: Federal Assembly of the Russian The Company provides operational relevant units about the developed Metals Association (IPA). Under risks (for political, economic, ΅΅ Krasnoyarsk Economic Forum Federation, Government of the information about Group compa- drafts, to assess the potential the auspices of the IPA, the United ideological or other reasons), (general partner) Russian Federation, Russian Union nies, analytics on long-term impact of draft laws and regulations Nations Interregional Crime and confidentiality, integrity and ΅΅ 6th St Petersburg International of Industrialists and Entrepreneurs, prospects and development on the operations of the Nornickel Justice Research Institute (UNICRI) accessibility of information in local Legal Forum (general partner) Chamber of Commerce and priorities, and takes part in setting Group, rights and duties of and MMC Norilsk Nickel launched a corporate networks or on the ΅΅ 20th St Petersburg International Industry of the Russian Federation, long-term priority goals and mission employees, interests of the regions programme to investigate into internet, and application of Economic Forum (SPIEF, partner) Association of Managers interre- of the city. of the Group’s operations. possible links between the international law to the cyberspace. ΅΅ Eastern Economic Forum gional public organisation, etc. transnational illicit trafficking of (partner) Participation in drafting On 1 March 2016, Elena Bezdene- precious metals and the financing In April 2016, Vladislav Gasumya- ΅΅ 5th Murmansk International By participating in expert and regulations zhnykh, the Company’s Vice- of terrorist activities, and to look nov, Nornickel Vice-President and Business Week (partner) working groups, commissions The Company has developed a President, State Secretary and into ways and methods of eradicat- Head of Corporate Security, ΅΅ Arctic Days in Moscow Forum and public councils established comprehensive system of working Head of the Government Relations, ing the malpractices. The pro- presented a report at the 10th (partner) by regional and local authorities, with draft laws and regulations set as a delegate took part in gramme is based on UN ECOSOC International Forum, Partnership of ΅΅ Arctic: Today and the Future the Company expresses its interests to ensure an optimal balance of the 7th Congress of the Chamber of Resolution 2013/38 adopted at the State Authorities, Civil Society and Forum (partner). and gets involved in solving social interests of society, the state and Commerce and Industry of Russia, initiative of the Russian and South the Business Community in and economic issues across its business when they are drafted. which, among other things, African Ministries of Foreign Affairs, Ensuring International Information geographies. and Nornickel. A G4–16 Security, organised in Garmisch- 5.5. Partenkirchen (Germany) by IISRC. Dialogue with In May 2016, Sochi hosted an The report was dedicated to authorities, Formats of interaction with authorities and non-profit organisations A G4–16 annual IPA Security Committee current information security issues communities meeting attended by security and practices at strategic facilities. and non-profit 60 directors of global leaders in Provisions of the report were taken organisations platinum production, and govern- into account when drafting IISRC Participation in parliamentary Membership in the Company representatives’ ment representatives (Ministry of recommendations and proposals Nornickel Group’s guiding principles hearings and round tables staged Russian Union of participation in commissions, Internal Affairs, Ministry of Foreign for relevant agencies of interna- in cooperation with government by the Federation Council, State Industrialists and committees and working Affairs, Federal Security Service, tional organisations (UN, EU, OSCE, bodies, local authorities and Duma, Russian Government, Entrepreneurs and groups with the Russian State and Federal Customs Service of ASEAN, SCO, and BRICS). non-profit organisations are Russian Union of Industrialists in the Chamber of Duma, federal executive and Entrepreneurs (RSPP), Chamber Commerce and bodies, the Russian Union the Russian Federation). Vladimir collaboration, mutual respect of of Commerce and Industry (CCI) of Industry of the of Industrialists and Potanin, President and Chairman Company experts also took part interests, and strict compliance with Russia, Association of Managers Russian Federation Entrepreneurs (Management of the Management Board of MMC in the preparation of a reference the Russian law and regional and and other organisations Board, coordination council, Norilsk Nickel, sent his greetings to book for the best available nickel municipal regulations, as well as with commissions, 10 committees), and the Chamber of Commerce the forum. The centrepiece of the and cobalt production solutions. the social responsibility principle. Participation in bodies established by local authorities and Industry (3 committees) meeting was a report on UNICRI The book was approved by (commissions, committees, expert and working groups) Investigation Stage 1. The report Rosstandart’s decree No. 1890 The Company stays in close was simultaneously presented in dated 15 December 2016. contact with federal executive and Sochi and at the UN Commission legislative authorities, and civil on Crime Prevention and Criminal society institutions. It is repre- Company representatives’ participation in draft Participation in bodies and Justice in Vienna. The attendees sented and expresses its interests regulation discussions held by the Open Government and associations established by also stressed effective interaction in 23 committees, commissions, by community councils with the authorities, as well as non-profit organisations, between government bodies and expert teams, and working groups through anti-corruption due diligence and regulatory and in events held by companies producing non-ferrous established by government bodies impact assessment non-profit organisations metals. in association with the business community, thus supporting socially important projects.
Corporate Social Responsibility Report 2016 Effective relationships Nornickel GROUP
discussed the development of laws acknowledgement of the Company Cooperation agreements Cooperation with Dialogues in public Some of Nornickel Group compa- and regulations set to solve urgent “for active participation in public In 2016, the Company signed a government reporting nies, including Polar Transportation issues. The Congress, which takes discussions of draft laws and number of agreements with federal law-enforcement Each year, the Company engages in Branch, Norilskgazprom, Taimyrgaz, place every five years, was regulations undergoing regulatory and regional authorities, as well authorities dialogues with stakeholders and Norilsktransgaz and Taimyrtrans- attended by the President of impact assessment, as well as for as major Russian and international In 2016, Nornickel consistently organises opinion polls for external gaz, operate in traditional settle- Russia, members of the Govern- proposals submitted to improve non-profit organisations. organised interaction programmes and internal stakeholders on ment areas of indigenous northern ment of the Russian Federation, mechanisms and methods of The agreements covered a wide with the Federal Security Service, preparation of the corporate social minorities. The Group does not representatives of the Presidential participation in the assessment range of social and economic Ministry of Internal Affairs EMER- responsibility (CSR) report. have any formal arrangements with Executive Office, the Federal procedure, specifically, to upgrade issues, including large sports COM, and the Federal Customs indigenous northern minorities. Assembly of the Russian Federa- the regulation.gov.ru website.” projects. Service using the public-private In early 2017, dialogues were held Representatives of the Company tion and authorities at all levels. partnership methodology: to discuss the 2015 CSR Report. are members of indigenous On 10 May 2016, an order of the For more details on agreements ΅΅ the Federal Security Service of This year’s dialogues took place minority commissions organised The Company is an active partici- Ministry of Economic Development with federal and regional the Russian Federation on on 4 March 2017 in Zapolyarny and by local authorities. A G4–MM5 pant in the system of assessing the established an interagency working authorities that were effective anti-terrorism and anti-sabotage 18 March 2017 in Norilsk during regulatory impact of draft laws and group to develop Russia’s Public as at the beginning of 2016, security of the Group’s critical the annual We Are the City social The Company did not participate regulations developed in Russia. Non-Financial Reporting Concept, see the interactive version infrastructures (fuel and energy forum. The discussions were centred in collective bodies to manage On 28 August 2016, the Company which includes a representative of of this Report. utilities, transport infrastructure, on Nornickel’s corporate values, indigenous peoples’ land use and took part in the Doors Open Day of the Company. The working group etc.); compliance with the UN Sustainable legal matters. In 2016, MMC Norilsk the Regulatory Impact Assessment has developed a draft Concept ΅΅ Ministry of Emergency Situations Development Goals and their Nickel registered no disputes Department of Russia’s Ministry recommended for submission (EMERCOM) of the Russian relevance for the Company’s in this regard, and there were no of Economic Development. After to the Government. Federation to drill emergency activities and regions of operation, breaches of indigenous peoples’ the event, the Ministry expressed responses and disaster relief and how implementation of the UN rights by the Company. A G4–MM6, operations; Goals is presented in the CSR report. G4–MM7, G4–HR8 ΅΅ Ministry of Internal Affairs of the G4-DMA Cooperation agreements Indigenous Russian Federation to prevent Dialogue minutes are included Key areas of interaction with rights Partners Subject of agreement stealing of products and in the interactive version indigenous northern minorities materials containing precious of this Report. Support for indigenous northern Government of the Murmansk Region Social and economic partnership 62 and non-ferrous metals, maintain minorities is an integral part of the
For more details, please see the Developing Local Communities section. security at public events and take For details on opinion polls Company’s general strategy to Vladimir Potanin Foundation and Norilsk Establishment of the Norilsk Development Agency drug prevention and awareness and updating the map of material improve the life of Taimyr residents. Administration For more details, please see the Developing Local Communities section. measures; aspects, please see the About The Company supports construc- ΅΅ Federal Customs Service of the the Report section. tion, maintenance and social 1 Krasnoyarsk Territory and Norilsk Construction of a multi-purpose sports centre in Norilsk Russian Federation to prevent projects in small and remote Norilsk Administration Strategic partnership, development of long-term and efficient cooperation to maintain cross-border smuggling of metal Interaction with indigenous settlements on the Taimyr Penin- and improve regular passenger and luggage bus services in Norilsk bearing materials. and minority peoples sula, and transports social aid to For more details, please see the Transport Accessibility section. The Company recognises the rights remote villages. Nornickel provides regular support of indigenous minorities residing Ministry of Natural Resources Events organised by Nornickel Group as part of Russia’s Year of the Environment in 2017 for non-profit veteran organisations across the Company’s regions of and Environment, Federal Service For more details, please see the Environmental Dialogue section. for Supervision of Natural Resources of the Federal Security Service, operation and provides patronage and Government of the Krasnoyarsk Territory Ministry of Internal Affairs, and assistance as part of the initiatives other law enforcement and security preserving and promoting the Government of the Omsk Region2 Joint project providing for high-tech products of Omsk-based manufacturers to be used at the Company’s facilities till 2020 agencies. culture and traditions of the For more details, please see the Supply Chain Responsibility section. peoples in the Far North.
International University Support for FISU activities and international university sports Sports Federation (FISU) For more details, please see the Developing Local Communities section.
Russian Olympic Committee Partnership between Nornickel and the Russian Olympic Committee For more details, please see the Developing Local Communities section.
Siberian Federal University Establishment of an R&D centre to operate as a laboratory for the development of a dynamic QC system to monitor the extraction and processing of mineral resources
Minister of Defence, Presidential Cooperation and coordination of joint initiatives to support General V. F. Margelov Plenipotentiary Envoy to the Volga Federal Nizhny Novgorod cadet corps District, Governor of the Nizhny Novgorod Region
1 Addendum to the Agreement made in 2010. 2 Road Map.
Corporate Social Responsibility Report 2016 Effective relationships Nornickel GROUP
In the reporting period, the Company In association with the Company, ΅΅ round table discussion with ΅΅ cooperation agreement signed 5.7. For more details on develop- took part in organising special the town of Nickel (Murmansk representatives of the Organisa- in June 2016 by MMC Norilsk Supply chain ment of cooperation with events to preserve and promote Region) hosted the 6th Russia- tion for Economic Cooperation Nickel, Ministry of Natural responsibility the Krasnoyarsk Territory and local traditions: Norway Cross-Border Cooperation and Development (OECD) Resources and Environment, Murmansk Region based compa- ΅΅ Big Agrish ethnic cultural festival; Days. This annual event captures member states on the inclusion Federal Service for Supervision The main objective of MMC Norilsk nies in the procurement process, ΅΅ Native Tongue Restoration by much interest of the business of OECD standards in Russian of Natural Resources and Nickel’s procurement activities please see the Development One and All, the first municipal community involved in joint environmental regulations Government of the Krasnoyarsk is timely, efficient, cost-effective of Local Communities section. festival and competition; Russian-Norwegian projects and (Moscow, 17 February 2016); Territory. The agreement and complete supply of resources ΅΅ professional holidays of tundra initiatives. ΅΅ environmental Problems in the provides for a series of projects to ensure stable operation of all In 2016, Nornickel and the Omsk residents, the Reindeer Herder’s Metals Industry (MMC Norilsk to be implemented by Nornickel production facilities. A G4–12, G4–13 Region Government signed a road Day and the Fisherman’s Day. For more details on the support Nickel’s corporate workshop, in 2017 to gradually reduce map for the project to use high-tech for cultural, academic and sports Moscow, 20–24 November the Company’s environmental The Company’s procurement products of Omsk-based manufac- Nornickel supports construction events, please see the Developing 2016); footprint in the Norilsk Industrial priorities: turers at the Company’s facilities till and repair projects in indigenous Local Communities section. ΅΅ visit of the Russian-Norwegian District. These projects are ΅΅ providing legal entities (including 2020. The road map provides for: peoples’ settlements of the Expert Group for Cross-Border included in the list of key small and medium-sized ΅΅ measures to compile a list of Taimyrsky Municipal District and Air Pollution Monitoring to Kola initiatives approved by businesses) with more opportuni- relevant products and their the Yamal-Nenets Autonomous 5.6. MMC production facilities on the Russian Government for ties to engage in procurement for application areas/projects; Area. Environmental 20 October 2016. The visit was the 2017 Year of the Environ- the Company; ΅΅ assessment of compliance of dialogue organised at the Company’s ment. Investments in the projects ΅΅ fostering fair competition; Omsk products with specifica- Events in the Company’s initiative. Experts praised results covered by the agreement will ΅΅ selecting suppliers through tions and import substitution regions of operation The measures for reducing of environmental projects carried total RUB 1.3 bn in 2017 alone. bidding; requirements of Nornickel Group In 2016, the Company took part in MMC Norilsk Nickel’s environmen- out in the Pechenga District, ΅΅ developing standardised companies; organising the following events for tal footprint are constantly on including transition to the In 2016, the Company received procurement approaches ΅΅ competitive selection of vendors local communities: the Norilsk City the agenda of the Company and copper-nickel concentrate a number of awards, including and processes; and suppliers; Day, the 60th Anniversary of stakeholders. In the course of briquetting technology and V. I. Vernadsky National Environ- ΅΅ increasing centralised ΅΅ pre-qualification of vendors Zapolyarny, and preparing for the the year, both internal and public retrofit in the smelting and mental Award for its Nickel Plant procurement volumes; and suppliers. celebration of the 350th anniversary events feature environmental conversion department; shutdown project in Norilsk and ΅΅ ensuring transparent procure- 64 of Dudinka (to be celebrated in discussions. ΅΅ meeting between Kola MMC Green Development and Evolution ment procedures through All procurement activities in September 2017). managers and members of the Awards 2016 from the Ministry of automation and independent the Company are based on the In 2016, the key environmental Working Group on Environment Natural Resources and Environ- bidding platforms; regulated procedures and policies The Company provides financial aid initiatives were: with the Barents Euro-Arctic ment. The Company made it to ΅΅ developing supplier feedback and are in full compliance with for the Krasnoyarsk Federation of ΅΅ Environmental Effects of Polar Council to discuss the Compa- the Top-3 ranking of environmental mechanisms; Federal Law No. 223-FZ On Northern Multisport Races to hold Division Nickel Plant Shutdown ny’s environment protection initiatives by the Modern Media ΅΅ preventing corruption and other Procurement of Goods, Work and a northern multi-sport race (a round table discussion during policy. The meeting was Institute and Live Planet TV abusive practices; Services By Certain Types of Legal championship in Russia. site visits to Polar Division attended by representatives of Channel among Russian metals ΅΅ streamlining inventories. Entities dated 18 July 2011. companies, Norilsk, Finland’s Ministry of Environment, and mining companies. Financial aid was also provided to 10 November 2016); Finnish Environment Institute, MMC Norilsk Nickel pays close the Top League Krasnoyarsk Public ΅΅ Industrial Production Modernisa- Norwegian Ministry of Climate Nornickel takes great care in attention to developing relations Organisation for Sports and Leisure tion in the Far North: Environ- and Environment, Norwegian working with the nature reserves with Russian suppliers and Activities to hold the Spring Cup mental and Economic Effects Environment Agency, Sweden’s that are adjacent to the production contractors, as they ensure rhythmic gymnastics championship. (a round table discussion Ministry of the Environment and sites of Kola MMC (Pasvik and the Company’s ability to meet in the Russian State Duma Energy, Russian Ministry of Lapland Reserves) and Polar its strategic targets. International on 6 December 2016); Natural Resources and Environ- Division (Putoransky Reserve). suppliers are mainly engaged ment, research institutions, and for delivering unique equipment local authorities of the Barents For more details on cooperation or systems that do not currently Region; with nature reserves, see have Russian equivalents. the Biodiversity Conservation sub-section of the Environment section.
Corporate Social Responsibility Report 2016 Effective relationships Nornickel GROUP
Procurement activities can be ΅΅ direct contracts with suppliers; either centralised or organised Direct contracts accounted Breakdown of procurement Control of Non-Financial Factors in Supplier Relations in 2016, % G4-DMA individually by the Head Office, for 65% of all contracts made Supplier branches or Group enterprises. by the Company in 2016. Assessment for Impacts Depending on the supplies ΅΅ development and implementa- on Society required and the purchase price tion of procurement guidelines, 4.89 7.83 G4-DMA Procurement Scope of supply/scope of work: legal and regulatory requirements Supplier 8.35 expected, procurement can be harmonisation of the regulatory of the Company, mandatory and recommended specifications of products Assessment initiation for Labour organised either as a bidding procurement framework across and services, including certificates, licences, permits, etc. Practices 7.76 procedure (tender), simple the Company’s Russian subsid- G4-DMA Procurement documents: provisions for no bankruptcy, no overdue taxes Supplier 2.36 procurement, simplified procure- iaries and branches, including and charges, and no criminal records in the biography of top managers Environmental 1.41 ment or single-source procurement. procurement of services; Assessment 3.40 40.86 Procurement policies for certain product categories may specify quality Procurement procedures may ΅΅ pilot test of a SAP SRM/SLC- 1.40 G4-DMA assurance procedures for supplies SUPPLIER involve collective procurement based automated system for 7.39 HUMAN RIGHTS bodies, such as the Tender supplier relationship manage- ASSESSMENT Committee, tender commissions ment, which helped improve Procurement Qualification of suppliers: default risk assessment and compliance 14.35 with initial requirements (scope of work/supply, specifications, etc.) of the Head Office, procurement the transparency and competi- procedure and tender commissions tiveness of the procurement Corporate Security’s checks into business reputation, reliability of the Group companies. procedures. and solvency of potential customers and suppliers
Analysis and evaluation of bids submitted, including track record of similar Bystrinskoye Mining Company Despite macroeconomic fluctua- All employees of Nornickel’s projects and qualifications of key employees tions in 2016, the Company Procurement are members Polar Division improved procurement efficiency, of the Association of Procurement Kola MMC having decreased the average Directors, a professional associa- Contracting Inclusion of an anti-corruption clause in the contract price of materials and equipment tion for the development of Logistic-Center procedure by 5% against the targets. The price corporate procurement practices. Norilskgazprom reduction was achieved through: Its mission is to develop and Contract Control over contractors’ compliance with health and safety requirements ΅΅ procurement policies in each implement best practices in performance by Branch of Norilskenergo Control over compliance with the Company’s initial requirements suppliers 66 product category; procurement activities. A G4–16 (scope of work/supply, specifications, etc.) and environmental regulations Murmansk Transportation Branch The policies specify a set of during work and upon acceptance mandatory principles and For more details on the Group’s Taimyrgaz approaches to organising contractor safety requirements for Taimyr Fuel Company procurement in certain product personal protective equipment and categories. As at the end of hazardous operation procedures, Other Key non-financial factors: 2016, the Company’s Tender please see the Occupational IT Department Quality of products and services Environmental protection Legal compliance Committee approved Health and Safety section. of MMC’s Head Office 24 procurement policies, which Health and safety were used to purchase nearly 40% of all supplies for the core Procurement, RUB bn operations in the reporting year. ΅΅ higher transparency of, and easier access to, procurement procedures, expansion and 15.0 improvement of the bidder base, including by way of inviting bids via independent bidding platforms, such as Fabrikant.Ru or B2B-Centre;
85.2
Non-resident suppliers (38)
Resident suppliers (540)
Corporate Social Responsibility Report 2016 Safety Nornickel GROUP
EFFECTIVE PRODUCTION RAMP-UP AND UPGRADE, LEVERAGE OF GROUNDBREAKING According to the independent TECHNOLOGIES assessment of November , the safety culture level at Nornickel AND DEVELOPMENT Group’s key production facilities OF OUR PEOPLE stood at . compared to . in early when the first assessment took place. The safety culture improvement is driven by the implementation of risk mitigation standards, safety communication campaign 68 and dedicated risk mitigation programmes. The assessment covered Polar Division, Kola MMC, Norilsknickelremont and Polar Construction Company.
CorporGate Social Responsibility Report 2016 ROWTH Safety Nornickel GROUP
6.1. Committee, is responsible All production processes at Occupational for development of the activities the enterprises are supported by health and safety and monitoring of compliance with relevant regulations and guidelines; the applicable health and safety maintenance, construction and Ensuring the occupational health legislation. installation works are carried out and safety of the employees is one in accordance with the project G4-DMA Occupational of the core aspects of Nornickel Under the Committee’s instruction, implementation plans and specifi- health and safety Group’s corporate social responsi- the HSE Department has organised cations containing health and bility work. ongoing monitoring of planned and safety sections. The companies in-progress activities aimed at have developed health and safety Health and safety improving the health and safety guidelines for various professions management A G4–36 management system. and types of work. The highest governance body in charge of health and safety matters The Company’s health and safety Investigation and registration of is the Board of Directors, which policy, including investigation and production accidents and occupa- each quarter reviews management reporting of accidents, is governed tional diseases are carried out in reports on the results of health by applicable laws of the Russian accordance with the Labour Code and safety activities. The First Vice- Federation and Technical Regula- of the Russian Federation, industry President – Chief Operating Officer, tions of the Customs Union on regulations, and the Accident who controls the Company’s security. Investigation corporate standard. Health, Safety and Environment
6. SAFETY
precedence of the life and health of employees over 70 operational performance; MMC Norilsk Nickel’s Safety commitment to creating a safe and healthy environment Health and Safety Policy for all employees;
commitment to fostering sustainable employee motivation for safe workplace behaviour. HTS HLI G Zero work-related fatalities 2016 HI G 2016 0.33 is the Company’s key LTIFR strategic priority in OHS Health and Safety Occupational health Strategy** and safety goals
creating a safe and healthy environment through introducing 106,000 scientific and technological innovations to the production * The document was approved RUB by the Company’s Management Board processes; Occupational health and signed by the CEO and safety expenses fostering sustainable employee motivation for safe workplace per employee ** The document was approved behaviour and training employees in anticipation by the Company’s Board of Directors and prevention of workplace incidents. 39 % Decrease in production- related accidents
Corporate Social Responsibility Report 2016 Safety Nornickel GROUP
The Group’s collective bargaining Engagement of employees in the Group’s companies and their Safety management commencement of work, contrac- pedestrian collisions, and for agreements have health and safety in safety management branches. Norilsk Nickel Harjavalta in contractors tors’ workers undergo induction preventing rockfalls and falling sections. A G4–LA8 The Company and most of has two joint committees. A G4–LA5 Contractors’ operations (repair, and target briefings on health and from a height ( for details, the Group’s subsidiaries run official construction and installation works safety, including security measures please see the interactive The occupational health and safety joint health and safety committees Authorised representatives of trade at the existing facilities) are as per the work execution plans. version of this Report). management system is certified composed of management, unions and staff for health and classified as high-hazard opera- against OHSAS 18001 for employee and trade union safety (1,186 employees) have been tions and governed by the Key injury indicators1 Health and safety indicator Kola MMC, against GOST R representatives in their enterprises, elected to participate in preventive respective corporate standards. The Company takes all possible details for 2012–2015 in line with 12.0.230-2007 (OHSAS 18001) for branches and production units. health and safety activities across Work permits or operations measures to mitigate the risk of the GRI Guidelines are included Norilsknickelremont (the Group’s The Russian companies of the the production units of the Group’s certificates; as well as work occupational injuries and diseases. in the interactive version of this core repair company), and against Group that have joint committees companies. In 2016, they took part execution plans (project implemen- Report. GOST R 54934-2012 / OHSAS employ around 73,200 people in over 28,000 audits and submit- tation plans, guidelines, etc.), The Group implements measures 18001 for the Polar Division. In (over 91% of Nornickel Group’s total ted around 7,800 health and safety contain safety requirements to be for mitigating the risks of the impact 2016, all these units demonstrated headcount), and new joint commit- improvement proposals. met in the process of organisation with moving parts of equipment, positive results on the recertifica- tees are being established and conduct of work. Prior to energy sources, vehicle and tion and surveillance audits.
Implementation of corporate standards Key risks associated with corporate social responsibility A G4–2
Corporate health and Tests on the corporate health safety standards and safety standards Workplace Risk description Over 3,200 employees were tested, injury risk Prevention and Control Activities with regard to Failure to comply with the Group’s health and including managers of various levels safety rules may result in threats to the employee’s Health and Safety Processes health and life, temporary suspension Safety Behaviour Audit of operations, and property damage Power Source Insulation Monitoring the implementation 72 Risk mitigants High Altitude Operations of standards HSE Department monitors the implementation Provision of Personal Protective Equipment ensure continued control over compliance of standards; with the health and safety requirements; Safety Requirements for Boarding and the results are discussed with heads Risk mitigants Alighting Company’s Motor Vehicles during of the Group’s departments and subsidiaries, improve the working conditions for Inter-Facility Transportation and reviewed by the HSE Committee. employees of the Company and its enhance methodological support for health and safety functions, including through the Procedure for Organising and Conducting contractors deployed at the Company’s High-Hazard Operations* production facilities, including by development and implementation of corporate implementing new technologies and labour health and safety standards; Accident Investigation saving solutions, and enhancing industrial improve the risk assessment and management Safety Requirements for Interaction of Vehicles safety at production facilities; framework at the Group’s companies and and Pedestrians at Production Sites and Facilities provide staff with certified state-of-the-art production facilities as part of the Risk Control Requirements for Arranging Demarcation of Hazardous Areas and Visualisation personal protective equipment; project; of the Working Space** carry out preventive and therapeutic analyse the competencies of line managers at the Group’s production facilities, develop Hazard Identification, Assessment interventions to reduce the potential impact Risk Control project of hazardous and dangerous production health and safety training programmes and and Management of Occupational Health teams are established to create hazard and risk factors; arrange relevant training sessions, including and Safety Risks the programme to determine root causes of identification registers; regularly train and instruct employees and accidents using best international practices training for project participants (over 7,000 people); assess their health and safety performance, (Tree of Causes and Hazards, 5-why, etc.); development of registers for key activities; training and conduct corporate workshops, including for employees in dynamic risk assessment and its by deploying special simulator units. provide information about the circumstances implementation at production units; and causes of an accident to all employees dedicated information boards at production units; of the Company, conduct ad hoc instruction sessions. preparation of six issues of Line Manager Notebook * In 2016, the Company set out more with educational materials; stringent requirements for work supervisors in the standard and introduced independent audit of Risk Control project additional requirements initiatives. for high altitude operations
** The standard was developed and put into effect in 2016
1 The indicators are given for Nornickel Group’s Russian operations.
Corporate Social Responsibility Report 2016 Safety Nornickel GROUP
In 2016, occupational health and pany carried out a special assess- places and over 18,620 employees Provision of personal ously implements measures To facilitate ultimate control over safety expenses of Norilsk Nickel ment of working conditions at the in 2016, which amounted to protective equipment on disease prevention, arranges the safe working behaviour, Harjavalta amounted to EUR 1.2 m Polar Division, Polar Transportation RUB 13.3 m in expenses for Shop area employees of the compulsory initial (upon employ- employees with a track record of up (EUR 4,400 per employee). and Murmansk Transportation the Group’s Russian operations. Group’s production units are ment) and regular health examina- to three years wear red helmets with Branches, Polar Construction exposed to hazardous and harmful tions and check-ups. The employ- the word “Warning” on them and Special assessment of working Company, NTEK, Norilskgazprom, In 2016, the Group carried out workplace factors (underground ees working in contaminated protective clothing with “Warning” conditions and at a number of the Group’s certification at 3,400 working work, operation and maintenance conditions are compensated for chevrons that make them stand out. In 2016, in accordance with the other production operations. places at the production units of mining equipment and heavy wash-off and decontaminating Federal Law On Special Assessment The special assessment of working of its branches and companies. self-propelled vehicles, extreme agents. A G4–LA7 In 2016, the Russian companies of Working Conditions, the Com- conditions covered 10,420 working climate, etc.). For that reason, in of the Group covered by the CSR addition to implementing technical In accordance with the Provision report purchased personal and organisational security of Personal Protective Equipment protective equipment for Occupational health and safety expenses measures, the Company also corporate standard, the Company’s a total amount of RUB 2.2 bn, or Indicators 2012 2013 2014 2015 2016 provides employees with free units and the Group’s production RUB 30,300 per employee, including of charge personal protective facilities run preliminary tests on RUB 870.7 m spent by MMC Norilsk Occupational health and safety expenses (RUB m) 6,422 4,095 7,446 10,748 8,515 equipment as per the standard the personal protective equipment. Nickel (RUB 36,200 per employee). including per employee (RUB ‘000) 77 51 95 134 106 rules and regulations on working Medical examination expenses conditions. The Company continu- amounted to RUB 396.9 m.
Key injury indicators1 A G4–LA6
Indicator 2012 2013 2014 2015 2016 Staff training in health and safety in 2016
FIFR – 0.10 0.07 0.12 0.11
2 LTIFR – 0.80 0.48 0.62 0.33 Special health and safety Health and safety: Corporate Total number of production-related accidents in accordance 103 106 64 88 53 onboarding and adaptation pre-assessment, workshops with the labour laws of the Russian Federation courses for new employees training and 2 workshops were and employees with a track assessment conducted Fatal production-related accidents 8 12 8 14 13 record of up to three years 31,200 employees completed 74 3 Minor injuries – 50 305 411 719 three years pre-assessment, training Potentially dangerous incidents4 – – 349 976 1,845 Around 5,300 employees were trained and assessment
Specialised training sessions Seminars and training Training bases: sessions for cross- improving Fatalities breakdown in 2016 by type of incident Workplace injury rate 94 heads of the Group’s branches and company audit performance during dynamics, number companies participated in the sessions participants underground and of accidents5 58 seminars and training high altitude sessions were carried out and operation 222 auditors were trained 2 Falling from a height
1 Falling Training classes Nornickel Group’s comprehensive 1 Personnel Training Improvement Programme 106 2 103 Moving objects of Action for 2016–2018 88 multimedia video production, development of training systems, 4 Rockfall e-learning programmes, 3D atlases of equipment and assembly units 64 purchase of equipment and simulation training devices 53 Accidents involving mobile work equipment extension of the underground training base at the Anhydride and employees (pedestrians) mine of Kayerkansky Mine 1 Extreme temperature related injuries 2
Energy source related injuries 2012 2013 2014 2015 2016
1 The indicators are given for Nornickel Group’s Russian operations. 2 LTIFR and FIFR have been monitored since 2013. 3 The indicator has been recorded since 2013. 4 The indicator has been recorded since 2014. The increase in the number of Minor Injuries and Potentially Dangerous Incidents was due to the introduction of the corporate Accident Investigation Standard, awareness-raising activities, and better understanding among employees of how reporting minor injuries and potentially dangerous incidents helps eliminate their causes and, therefore, prevent incidents with more severe implications. 5 Lower workplace injury rates in 2016 were due to safety culture improvements driven by the introduced corporate standards, safety communication campaign and dedicated risk mitigation programmes.
Corporate Social Responsibility Report 2016 Safety Nornickel GROUP
In 2014–2016, Nornickel Group In 2016, Polar Division completed Company). Independent experts Prevention and control companies showed positive results renovation of 739 Workplace Safety reported, that in November 2016 the in reducing the level of occupa- information boards. industrial safety culture level (Bradley tional health and safety index2. Curve indicator) amounted to 2.5 Compliance and certification audits Cross-company Internal audits Occupational safety helplines are (compared to 2.3 in December 2015, as part of the OHSAS audits of the health of the health and Safety communication available at Kola MMC and Norilsk- 2.1 in March 2015, and 1.4 in March 18000:2007 management and safety management safety management campaign nickelremont (Polar Division). 2014). The safety culture improve- system system system Employee communications are key Any Group’s company employee ment is driven by the implementation to enhancing the corporate health has a right to address the Company’s of risk mitigation standards, safety and safety culture. The Company Corporate Trust Service, which communication campaign and continuously implements Occupa- reviews matters related to occupa- dedicated risk mitigation pro- tional Health and Safety communica- tional safety. grammes. tion programme. The programme includes the following key activities: Safety culture assessment Emergency preparedness ΅΅ information support of health From October to December 2016, Nornickel Group companies take Independent external Safety behaviour audits Activities within and safety activities; DuPont Science and Technologies great care in maintaining emer- G4-DMA Emergency audits to assess the framework ΅΅ information provided to employ- assessed the current situation and gency preparedness, as the Group Preparedness the corporate health of the health ees about their right to refuse determined priorities for further embraces mining, concentration and safety management and safety to perform dangerous work via improvement of the health and safety and smelting operations, operates system monitoring system carried out existing feedback channels; management framework and for over 300 hazardous production at each facility, ΅΅ management meetings with mitigating injury and accident risks facilities, and uses various including: employees. at Nornickel’s key companies (Polar hazardous substances (toxic,
multi-stage control, Division, Kola MMC, Norilsknickelre- explosive, oxidising, etc.) in its mont and Polar Construction processes. ad hoc, operational and comprehensive health and safety inspections
Occupational health and safety index performance 76
2014
2.5 2015
2016 Health and safety performance indicators for accident prevention 2
Indicators 2012 2013 2014 2015 2016 1.5 Audits conducted:
by health and safety committees (‘000) > 30 > 35 > 33 > 33 > 31.5 1 Target audits conducted by managers, senior specialists and 18 16 7.7 8.4 6.8 committees of the Group’s enterprises and business units (‘000)
Ad hoc audits (‘000) 22 21 6.3 8.1 8.8 0.5 Comprehensive audits of health and safety and dedicated 140 157 160 163 167 management systems 0 Coupons removed from the books of employees violating health 4.1 6.4 4.4 3.9 3.4 and safety requirements (‘000)1 Polar Division Kola MMC Norilsknickelremont Polar Construction Pechengastroy Vostokgeologiya Norilsk Support Company Complex Employees subject to disciplinary action for the violation of health 7.1 7.6 6.9 8.3 8.8 and safety requirements (‘000) 2 Occupational health and safety index is the ratio of identified violations to the period of time taken by the auditors to carry out the audit. Employees with reduced bonus payments (‘000) > 14 > 17 > 14 > 15 > 15
Total (RUB m) > 67 > 56 > 55
Employees incentivised for health and safety involvement and lower >10 > 7 > 5 > 9 > 5 workplace injury rate as per the audit results (‘000)
Total (RUB m) >42 > 42 > 35 > 78 > 51
1 R emoving coupons as a prevention initiative enables the Company to take note of the number of gross violations of health and safety requirements, which did not cause accidents, and subject the culprits to disciplinary actions and financial penalty.
Corporate Social Responsibility Report 2016 Safety Nornickel GROUP
Emergency preparedness system Programme for improvement of social and living conditions of Workers at hazardous production facilities
Provide favourable social and working conditions for the Company employees Plans on containment and elimination of accidents consequences at hazardous production facilities (hazard classes I, II, III) Bring social facilities in line with the existing requirements and regulations Programme goal
In 2016, the programme was launched in 11 Nornickel branches and units located Contracts with professional Auxiliary mine rescue team Financial reserves in Norilsk, Taymyr Dolgan-Nenets Municipal District, Murmansk Region and St Petersburg emergency rescue services at Polar Division and Kola MMC for accident Programme and organisations across management Monthly realistic trainings scope the Company’s footprint at hazardous and classes production facilities Overhaul of 20 social facilities 52 relocatable buildings purchased Results 2016 highlights The total area of the renovated facilities amounted to 6,346 sq m; the social and working Test alerts for the employees with conditions of 2,818 employees were improved emergency rescue services and Works for a total of RUB 543,2 m were performed, including project and comprehensive organisations taking part repair works for a total of RUB 419,2 m Equipment purchased for RUB 124,0 m
Overhaul of 41 social facilities, including four catering and four sports and fitness facilities
Plans The programme’s budget for 2017 is planned at RUB 672.6 m 78 Nornickel Group companies have surveillance and warning systems, and systems for for 2017 communication and support in case of an accident
The Company complies with 6.2. Breakdown of social facilities Actual costs of the programme for improvement of social and working conditions 1 the requirements of the Federal Improvement of social overhauled in 2003–2016 Costs for 2003–2016 RUB 3,463.2 m Law No. 116-FZ On Industrial and working conditions Safety of Hazardous Production Facilities dated 21 July 1997, Improvement of working conditions 543 and ensures preparedness is a key aspect of the Company’s 5 for management of accidents corporate social responsibility. 28 at hazardous production facilities. The Group’s companies operate 396 more than 2,000 sanitary, amenity, 10 For information on emergency sports and fitness, catering, 363 358 334 preparedness, please healthcare and recreation see the interactive version facilities with a total area of over 271 252 of this report. 300,000 sq m. Comfortable 228 working conditions materially 154 173 contribute to the employees’ 159 165 157 satisfaction and motivation to perform. 96 98
Sanitary and amenity Sports and wellness Catering service 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Other
1 Data are given on an accrual basis.
Corporate Social Responsibility Report 2016 Environment Nornickel GROUP
Nornickel’s projects to reduce its environmental impact, with a total budget of RUB . bn, were included in the list of initiatives for Russia’s Year of the Environment – . In June , MMC Norilsk Nickel, Ministry of Natural Resources and Environment, Federal Service for Supervision of Natural Resources and Government of the Krasnoyarsk 80 Territory signed an agreement that set out the Company’s obligations to carry out these projects.
DELIVERING AGAINST OUR TARGETS EFFICIN DUE TIME AND AT MINIMUM COSTS IENCY
Corporate Social Responsibility Report 2016 Environment Nornickel GROUP
7.1. For details on Corporate Expenditures also included charges Environmental Integrated Quality and Environmen- for permissible and surplus management system tal Management System, please emissions (effluents) and disposal see the Product Responsibility of production and consumption MMC Norilsk Nickel’s Environmental section. waste, and charges paid by Management System is a compo- the Company to remedy damages nent of the Corporate Integrated For details on development of arising from non-compliance with Quality and Environmental Manage- the environmental management environmental laws. A G4–EN31 ment System (CIMS). This enables system in 2016, please see the the Company to harmonise interactive version of this Report. In 2016, the Company paid a total environmental and quality manage- of RUB 1,429,000 in environmental ment initiatives with production fines (down 15.2% y-o-y) and management, finance, health 7.2. received 15 improvement notices and safety operations. Environmental from regulators. A G4–EN29 protection expenditures The Company’s vision of its key environmental commitments the Group’s total environmental and priority environmental goals protection expenditures stood G4-DMA Environmental and objectives are stated at RUB 25.7 bn in 2016, up 8.9% Compliance in the Environmental Policy vs 2015. The largest spending G4-DMA General adopted by MMC Norilsk Nickel’s items were current environmental Information Management Board1. protection expenditures (RUB 15.4 bn) and capital invest- 7. Based on the annual CIMS analysis, ments to ensure environmental a report is prepared for senior protection and sustainable use management to assess performance of natural resources (RUB 9.6 bn). of the management system and 82 Environment decide on corrective measures.
Key risks associated with corporate social responsibility A G4–2
HTS Environmental risk HLI G In 2016, Nornickel 2016 HI G 2016 25.72 ranked 4th in the World RUB bn Risk mitigants Group’s environmental Wildlife Fund’s Environmental Risk description expenses and investments Responsibility Rating of Metals Surplus environmental impact related to develop, approve and implement procedures to reduce production activities, unfavourable weather pollutant emissions and discharges; conditions or emergency accidents and establish maximum permissible environmental impact and Mining Companies in Russia incidents and its limits;
6.6 factor in established limits and maximum permissible % environmental impact in planning to comply with them Reduction of pollutant in production operations; discharges implement action plan to reduce emissions during unfavourable weather conditions;
develops and implement preventative and remedial 6.2 action plans. % Reduction of pollutant 1 See http://www.nornik.ru/en/about-norilsk-nickel/sustainable-development/environmental-protection. emissions
Corporate Social Responsibility Report 2016 Environment Nornickel GROUP
7.3. Air protection To communicate its environmental TOP PRIORITY environmental protection goals Environmental Polar Division’s various opera- efforts to the people of Norilsk, performance tions mainly impact the environ- Polar Division has been running an G4-DMA Emissions ment in Norilsk. 54 pollutants automatic toll-free enquiry service The Company strictly complies are emitted to the air in this area. since 2012. By dialling 007, anyone with: The key pollutant is sulphur can hear short-term environmental sulphur projects; TOP PRIORITY ΅΅ the Federal laws on the Protec- dioxide, accounting for ca. 98% forecasts for the city. environmental Phased reduction of efficiency improvement at gas tion of Atmospheric Air and on of all emissions. A G4–SO2 protection pollutant air emissions, treatment plants; the Protection of the Environment goals In 2015, the Company developed primarily sulphur dioxide new production methods; with respect to inventory, control Kola MMC’s operations have and approved a roadmap to reduce and solids control over pollutant emissions under and management of air emis- environmental implications mostly air pollutant emissions at MMC adverse weather conditions; sions; for Monchegorsk and Zapolyarny Norilsk Nickel’s Polar Division up to ΅΅ the Federal law on the Protection towns and Nickel settlement. 2020. In August 2016, as planned, collection of gas flows at shops. of the Environment and the Water The key pollutants resulting from cop- outdated Nickel Plant was shut Code of the Russian Federation per and nickel feedstock processing down, with Polar Division’s nickel with respect to water use and are sulphur compounds and dust feedstock melting transferred to water body protection; which contains heavy non-ferrous Nadezhda Metallurgical Plant. ΅΅ the Federal law on Production metals such as nickel and copper. As a result, some 600 sources and Consumption Waste with of emissions were eliminated construction and upgrade respect to waste management. Reduction of air emissions in the Norilsk residential area. of waste water treatment plants; (especially those of sulphur dioxide Consistent reduction The Company’s operations are and dust containing non-ferrous The Company continued the of waste water discharge water cycle optimisation; planned with reference to statutory metals) is the key objective sulphur projects at Copper Plant into water bodies water supply recycling and reuse environmental limits. In 2016, pursued by the Company’s and Nadezhda Metallurgical Plant, systems. the Company did not exceed limits operational units in terms of with the project design documents for key pollutant emissions. environmental management. approved by Russia’s State Expert
84 The Company has in place an overhaul and construction integrated environmental reporting Air pollutant emissions, kt A G4–EN21 of tailing ponds; system to monitor progress in Development of waste achieving environmental objectives reuse of waste at the Group’s operations; 1,938.49 1,912.03 disposal sites to reduce 1,828.09 1,883.24 and prepare quarterly, annual and 1,787.57 man-made impact engagement of specialist contractors ad-hoc reports. The Company on the environment to use, treat and dispose of waste; submits annual statistical reports to construction and retrofit of production regulating authorities as and when and consumption waste disposal facilities. required.
In 2016, the Company ranked 4th in the World Wildlife Fund’s Environmental Responsibility Rating Polar Division of Metals and Mining Companies 14.74 10.51 20.38 10.49 15.97 in Russia. According to the rating Other business units and subsidiaries methodology, metals and mining 164.62 165.44 169.79 ballast water and waste water treatment; 148.58 132.9 companies are assessed by three Kola MMC Zero pollution engagement of specialist contractors indicators: environmental policies, to treat, use and dispose of waste 2012 2013 2014 2015 2016 in maritime cargo environmental impacts, and and oil-bearing waste water; transportation disclosures and transparency. and vessel operation purchase and use of high-quality fuels; treatment of food waste and dry waste aboard ships.
Corporate Social Responsibility Report 2016 Environment Nornickel GROUP
Review Board. MMC Norilsk Nickel Greenhouse gas (GHG) Protection Of Water A and SNC-Lavalin Inc. (Canada) emissions Bodies Key risks posed by climate change G4–2, G4–EC2 signed a contract to prepare In 2016, the Group’s direct GHG the Group uses water from G4-DMA engineering documents and emissions totalled 10,031,386 surface and underground sources Water implement the sulphur dioxide tonnes of CO equivalent, with the ( see Appendix 4) for its drinking, G4-DMA 2 Effluents recovery project at Nadezhda estimates for Polar Division, Kola production and process supply Soil thawing risk Metallurgical Plant. MMC and Nornickel’s fuel and needs as well as for community energy operations based on the and shipping needs. The water is In 2016, the Group’s pollutant Guidelines and Instructions withdrawn in compliance with the emissions decreased by 6.2%, with approved by Order of the Russian approved limits, without any major Polar Division’s emissions down Ministry of Natural Resources impacts on water bodies. No water by 5.1% and Kola MMC’s emissions No. 300 dated 30 June 2015. is withdrawn from either the Ramsar Risk mitigants Risk description down by 21.7% (22.8% for sulphur GHG emissions intensity equals Wetlands or from other protected A dioxide). Such a significant 18.287 tonnes of CO2 equivalent natural territories. G4–EN9 Active man-made impact on the Norilsk routinely monitor the condition of foundation beds reduction was achieved because per RUB 1 m of consolidated Industrial District’s permafrost soils over for buildings and structures built on permafrost; Kola MMC shut down its pelletisa- revenue. A G4–EN15, G4–EN18 The Group’s wastewater effluents the past 80 years, thawing of soils, ice bands and lenses, increased depth of run geodetic control of changes in buildings’ positions; tion and roasting section, excluding do not exceed the approved limits, seasonal thawing leading to loss monitor soil temperature at buildings’ foundations; the obsolete technology from Use Of Ozone-Destroying including admissible impact limits, of bearing capacity of pile foundations, the feedstock treatment process. Substances or have any major impact on deformation of buildings and structures monitor the facilities’ compliance with operational In 2016, Kola MMC completed the The Group neither produces nor biodiversity of water bodies and resulting in their destruction requirements for crawlspaces; construction of the copper-nickel uses ozone-depleting substances, related habitats. A G4–EN26 concentrate briquetting section and except for small amounts used as develop recommendations and corrective action plans to ensure safe operating conditions for buildings is now bringing the technology up a chemical agent for laboratory- In 2016, the Group’s total water and structures. to the required volume and quality based chemical analysis as well as withdrawal decreased by 5.7% performance. The full-fledged for filling and topping of compres- primarily owing to lower withdrawal roll-out of the briquetting technol- sors in various air conditioning units from water storage reservoir ogy will additionally reduce sulphur and carbonated water machines, Kharaelakh as the turbines at NTEK’s 86 dioxide emissions. which produce water used as a TPP-2 worked fewer hours. Polar cooling agent for medium- and Division reduced water withdrawal For more details on our air low- temperature refrigerating as Nickel Plant was shut down, while emission reduction initiatives, equipment. A G4–EN20 mine and pit water inflows and Risk of insufficient water resources please see the interactive third-party wastewater volumes version of this report. fluctuated. Kola MMC increased water withdrawal as mine water inflows fluctuated.
Risk mitigants Risk description
As a result of probable water shortages supervise a hydrological monitoring system to forecast water in storage reservoirs caused by natural level in rivers and water bodies in the Norilsk Municipality phenomena (abnormal drought), there territory, including a set of measures introduced jointly is a possibility of failure to achieve with Srednesibirsk Hydrometeorology and Environmental necessary water pressure at HPP turbines Monitoring Administration to classify and analyse leading to limited power production hydrological data; in the Norilsk Municipality territory Insufficient water level for withdrawal cooperate with Roshydromet to organise constant may also lead to drinking water shortages hydrological and meteorological monitoring stations in the Norilsk Municipality to improve the accuracy of water level forecasts in the Norilsk Municipality territory;
dredge the Norilskaya river and reduce energy consumption at the production facilities should the risk materialise.
Corporate Social Responsibility Report 2016 Environment Nornickel GROUP
Polar Division posted a significant increase in pollutants discharged facilities. Waste is used for preparation
change in water consumption as as part of the wastewater due to of filling compounds, as flux for melting Total water withdrawal1, mcm Total water consumption, mcm A G4–EN8 A G4–EN10 Nickel Plant was shut down. NTEK’s higher water withdrawal for of metal in melting furnaces, construc- increased water consumption was Monchegorsk process needs and tion and strengthening of tailing 533.67 due to a greater volume of recycled excess concentrations of some dumps, railroad groundwork, road 86.48 95.02 102.49 567.04 574.17 88.77 96.41 water used to cool the equipment. pollutants in the nickel electrolysis filling, etc. Over the last eight years 563.94 564.32 The percentage of reused and shop’s saline effluent. (2009–2016), the Group has been recycled water in the Group’s total steadily re-using some 50% of all water consumption stood at 85.8% In 2016, the discharge of wastewa- waste produced. A G4–MM3 35.92 30.16 27.93 in 2016. The total volume of reused ter pollutants did not exceed the 35.48 35.53 and recycled water in the Group’s maximum discharge rates or limits. All of the Group’s waste disposal sites 170.52 27 7.43 274.00 267.87 water withdrawal came in at are listed on the national disposal site 252.96 249.93 175.38 171.32 172.18 382.6%. This percentage is largest For more details on the Group’s register. The Group manages waste 178.77 for Polar Division (495.0%) and water body impact reduction and monitors special sites in 719.02 Kola MMC (424.7%), and stands initiatives effected in 2016, please accordance with applicable permits. 634.12 634.90 569.59 at 243.6% for NTEK and 38.1% see the interactive version of this Tailings pits are monitored addition- 535.49 for the Company’s other units. report. ally as required by safety standards for hydraulic structures. In 2016, the Group’s total Waste management waste water discharge stood at Over 90 % of the Group’s production As part of the Talnakh Concentrator G4-DMA 143.5 mcm, which is 1.15 mcm lower waste is classified as hazard class 5 upgrade and retrofit project 47.37 47.23 46.86 46.67 51.03 Waste that the last four years’ average. (practically non-hazardous waste), to increase its total ore capacity 41.30 41.87 41.26 40.89 40.60 including rock and overburden, to 16 mtpa, the Group continued Polar Division and Norilskenergo tailings, and metallurgical slags. To the construction of a new tailings pit 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 Branch posted a decrease in reduce technogenic impacts on the which should meet all environmental pollutants discharged as part of the environment, waste is stored and requirements and ensure that up wastewater as no effluents came disposed of in an environmentally safe to 6 mt of tailings per annum is stored Total wastewater discharge, mcm Pollutants discharged as part A G4–EN22 of the wastewater, KT 88 from Nickel Plant after it was shut way at the Group’s special waste and disposed of in an environmentally down. Kola MMC showed an disposal sites or used at the Group’s safe way. 39.2 33.09 36.2 39.52 38.67 71.83
Waste generation and disposal in 2012–2016, mt A G4–EN23 72.39 76.92 24.47 67.47 31.55 26.28 25.44 76.93 23.48 22.59 26.39
23.07 119.32 22.27 22.57 84.57 76.98 80.31 77.77 73.55
7 7.47 72.68 75.62 61.8 15.87 12.96 15.18 12.13 13.22 Waste generation Polar Division
14.1 Kola MMC 11.93 12.1 11.37 10.61 4.07 4.04 3.67 3.90 4.50 1.25 0.7 0.37 0.56 1.85 6.39 6.11 Waste use at own facilities 5.02 5.59 4.97 Polar Division 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 Kola MMC 2012 2013 2014 2015 2016
Polar Division and Norilskenergo NTEK
Kola MMC Other business units
1 Water withdrawal volumes associated with Polar Division, Norilskenergo and other business units of the Group include the water withdrawn from NTEK network.
Corporate Social Responsibility Report 2016 Environment Nornickel GROUP
An upgrade and retrofit project was 7.4. Following the Socially Important Since 2006, the Pasvik Nature one of Russia’s oldest nature Reproduction of aquatic completed with regard to the tailings Biodiversity Initiatives Competition held under Reserve has been carrying out reserves (founded in 1930). bioresources pipes at Nadezhda Metallurgical Plant conservation the World of New Opportunities an ecological assessment of In 1985, it was included in the The Company’s Polar Division in 2016. Started in 2013, the project charitable programme in Septem- the natural environment in the area UNESCO Network of Biosphere develops Oktyabrskoye, Talnakh included a replacement of some Cooperation with ber 2016, the Joint Directorate of of Pechenganickel Plant (including Reserves. and Norilsk-1 Fields; Kola MMC 13 km of the existing pipes with nature reserves Taimyr Nature Reserves received Zapolyarny, Nickel and their develops Zhdanovskoye, G4-DMA leak-proof polymer piping. In the Kola MMC is located 15 km from funding to implement the Crafts suburbs, as well as the Pasvik State In 2002, Kola MMC and the Lapland Zapolyarnoye, Kotselvaara Biodiversity course of replacement, the pipes the Pasvik Nature Reserve and Workshops project in 2017. Nature Reserve), and developing a Biosphere Reserve signed and Semiletka Fields. were cleaned of the mud contents 10 km from the Lapland Biosphere The initiative is aimed at promoting long-term environmental monitor- contracts for the development of a that underwent two-stage treatment Reserve, while Polar Division’s sites the crafts practised by the ing programme. The reserve is also methodology to reclaim disturbed Pursuant to the Russian laws, and did not pose a life hazard, and are some 80–100 km away from indigenous people of the North. working on several projects that natural environments in the areas design documents on field then washed through with water. the buffer zone of the Putoransky received grants under MMC Norilsk affected by permanent emissions development and capital At the same time, precautions were Nature Reserve. At present, In 2016, the Company also helped Nickel’s World of New Opportuni- from Severonickel Plant and construction projects, both taken to prevent pollution from these the Company’s operations do not Taimyr’s nature reserves to put in ties charitable programme. monitoring of the Monchegorsk for business and non-business mud contents. In September 2016, produce any significant impact place reliable satellite communica- For example, in 2016, it started District and the Lapland Biosphere purposes, must have a section the works were performed in heavy on areas adjacent to the nature tions infrastructure for the reserves’ the implementation of a project Reserve. The scientific research describing the company’s rain, which washed off some iron reserves. A G4–EN12, G4–mm2, G4–EN11 employees and guests, and to develop the Pasvik Reserve’s data provided a basis for further environmental protection and hydroxide into the Doldykan river assisted in transporting their research database and promote rehabilitation of disturbed lands control (monitoring) initiatives and caused a temporary change Taimyr Peninsula research groups to the outer field an effective dialogue at the Russia- and for sanitary and fire-protection to track changes across in the colour of the river water. The Putoransky State Nature locations. Norway border, encouraging improvements in the forest areas. the ecosystem resulting The Company fully paid the fine Reserve was included on the launch of new R&D projects from ongoing development, and environmental damages, taking the UNESCO world heritage list in Kola Peninsula in the Pechengsky District In 2016, the Company also construction, or accidents. measures to clean up the area near 2010. It covers a total area of over The Company cooperates with of the Murmansk Region. provided financial aid for the the tailings pipes and prevent 1,887 thousand ha. The reserve the Lapland and Pasvik Nature Lapland Biosphere Reserve to The Company has field develop- contamination. is part of the Joint Directorate of Reserves in several areas. The key With an area of 278,000 ha, make a new nature trail and publish ment, mine liquidation and land Taimyr Nature Reserves, which also ones are environmental monitoring the Lapland State Nature Biosphere books about Oleg Semyonov- rehabilitation projects in place for In 2016, Norilskgazprom piloted a includes the Putoransky, Taimyrsky and vegetation restoration in the Reserve is one of the largest Tyan-Shansky and Herman Kreps, all of its fields, with special reserves 90 solid domestic and industrial waste and Big Arctic reserves, as well as vicinity of Kola MMC’s production protected areas in Europe and also the reserve founders. set up for rehabilitation activities. landfill in the Tukhard settlement, the Purinsky and Severozemelsky sites. updated engineering surveys for natural protected areas. Disturbed and rehabilitated land area1, ha A G4–EN12, G4-MM1 the construction of a landfill in the The Pasvik State Nature Reserve
Messoyakhsky natural gas field, with In 2016, the Joint Directorate of is featured as one of the Wetlands Including the project design documents sent for Taimyr Nature Reserves continued for the Shadow List of Ramsar Sites during disposal review to the Krasnoyarsk Branch of implementing three projects under the name of Fjarvann – of solid domestic Russia’s State Expert Review Board. selected under MMC Norilsk Schaannings Field Base. It covers during and industrial during other Nickel’s World of New Opportuni- a total area of over 14,000 ha. Item Total during mining construction waste activities In 2016, the Group decreased ties charitable programme to Total disturbed area, 13,735.18 12,049.46 139.00 65.00 1,481.72 the total volume of waste by support socially important initia- In 2016, the construction of a visitor beginning of period 0.38 mt y-o-y, or 1.1%, due to waste tives. Those are: centre in the settlement of Nickel reductions at Kola MMC by 0.76 mt ΅΅ Save the Bighorn Together was completed with the support Total rehabilitated area 0.00 0.00 0.00 0.00 0.00 y-o-y, or 7.1%. Meanwhile, Polar (research and protection from the Company. The state-of- Total disturbed area 1,311.88 1,071.35 227.52 1.34 11.67 Division increased the total volume of this endangered species the-art centre with an area of over in the reporting period of waste by 0.3 mt y-o-y, or 1.3% of the Putorana Plateau); 800 sq m was opened on 17 January Total disturbed area, 15,047.06 13,120.81 366.52 66.34 1,493.39 as the Talnakh Concentrator ΅΅ Hatanga Crafts Festival (a space 2017, when Russia was launching end of period upgrade and retrofit project for demonstration, experience the Year of Ecology, and aimed to was still in progress. sharing and knowledge transfer promote environmental awareness 1 The total area of disturbed land as at the beginning of 2016 differs from the total area of disturbed land as at the end of 2015, as stated in the 2015 CSR Report , which is due to the adjustment of data collection boundaries; the considerable increase in the disturbed land area in order to revive the northern among communities from in 2016 is due to more intensive operations at Bystrinsky MPP. The Group’s total waste utilisation indigenous peoples’ forgotten the cross-border regions rose by 1.34 mt y-o-y, or 6.6%, due crafts); of Russia, Norway and Finland. to higher utilisation at Polar ΅΅ Environmental Camp (a summer Division. field camp set up in the protected area of the Putoransky Nature Reserve).
Corporate Social Responsibility Report 2016 Environment Nornickel GROUP
7.5. Both Nornickel Group’s companies 7.6. Environmental protection and monitoring measures taken Impacts from and other parties engaged in Impacts from by the Company during the field life cycle transport and transportation ensure multi-stage foreign operations logistics operations monitoring of compliance with the standards and rules of transporting Norilsk Nickel Harjavalta’s main The Company’s transport and goods. Most of Polar Division’s metal environmental impact consists Environmental monitoring of changes in ecosystem elements logistics subsidiaries and units products are transported from in emissions of ammonia (NH ) and G4-DMA 3 Transport have all the necessary environmen- Murmansk and Arkhangelsk to nickel, and discharges of nickel (Ni), 2- tal permits, undergo regular audits Europe, and all of Kola MMC’s metal sulphates (SO4 ) and ammonia + by the supervising authorities, products are transported from ions (NH4 ). and comply with the applicable St Petersburg to Europe by third-party environmental regulations in fleet chartered by Metal Trade In 2016, Norilsk Nickel Harjavalta their operations, specifically in Overseas, one of the Group’s met all permit requirements for Prospecting Exploration Pilot Commercial Abandonment Abandonment transportion of hazardous goods. companies. Third-party fleet emissions, discharges and waste and production development or enhanced or enhanced As a result, there are no significant environmental parameters comply disposal volumes. production recovery recovery of environmental impacts from with the requirements of international testing of remaining remaining reserves reserves the transportation of products, environmental conventions. In 2016, the Company continued materials, and members researching and monitoring water of the workforce. A G4–EN30 For more details about the environ- habitats on the Kokemaenjoki River mental initiatives of the transport and in the area of the 2014 accidental Measures taken: protection of air, subsoil resources, vegetation logistics units, see the interactive Ni solution discharge from Norilsk and animal species, habitats, water resources, water life, land version of this Report. Nickel Harjavalta. resources and soil (including measures to rehabilitate disturbed or contaminated land and soil); collection, use, treatment, transportation and disposal of hazardous waste Environmental impact of Norilsk Nickel Harjavalta
Item 2013 2014 2015 2016
Waste removal 92 Industrial wastewater, ‘000 cu m 625 625 728 771 and disposal, land Pollutant concentrations in industrial wastewater, t rehabilitation and Ni 0.5 66.61 0.4 0.4 improvement measures 2- SO4 19,420 19,281 20,051 22,457
+ NH4 (converted to nitrogen) 28.3 45 36 49.5
Total water consumption, mcm 2 11.5 10.9 10.4 10.9
Total air pollutant emissions, t
The projects provide for making The Company traditionally takes part Norilsk organised an ecological mara- Ni 2.0 1.8 1.7 1.6 lay-outs, slopes, hydraulic and in urban greening projects in Norilsk, thon for greening the Zapolyarnik NH 80 50 70 70 irrigation structures, and taking Dudinka, Monchegorsk, Zapolyarny, stadium territory. 3 other technical measures. Impor- and Nickel. The programme for urban Waste generation, kt 22.0 30.8 16.5 7.0 tantly, the Company’s fields are in greening and restoration of public Upon the recommendation from commercial development, explora- spaces and surrounding territories is nature reserves, in 2003, Kola MMC Waste disposal, kt 21.3 29.8 15.7 0.8 tion and production test stages with implemented in cooperation with the started implementing a land rehabilita- liquidation or abandonment not municipal authorities and seeks to tion programme. In just 13 years, Kola Power consumption, GW/h 181 164 165 180 expected until 2050. A G4–EN13 clean up and improve public spaces MMC had over one million trees and Power consumption for heating/cooling, GW/h 124 122 122 130 and areas adjacent to the roads, bushes planted over an area of about The Company complies with protect water bodies and water 100 ha, including as part of a pilot Steam consumption, GW/h 201 203 198 225 all applicable regulations for reserves, and revamp tourist camping project to restore damaged land land rehabilitation and other sites. In 2016, the Company’s adjacent to the Company’s production Environmental expenses, USD m 3.0 3.0 3.0 2.7 environmental protection volunteers joined the programme. site in Monchegorsk implemented 1 Including 66,189 kg (Ni) discharged in July 2014 as Ni solution due to a heat exchanger failure at the reduction plant. activities associated with Monchegorsk hosted the environ- jointly with Kola Science Centre of the 2 Over 95% is water withdrawn from surface sources (Kokemaenjoki River). field development. mental Let’s Do It festival, while Russian Academy of Sciences.
Corporate Social Responsibility Report 2016 Environment Nornickel GROUP
The three-year research confirmed ΅΅ Taimyrgaz. The company holds a The key documents governing the Major investment projects aiming The programme’s priority project In 2016, the Company’s fuel and that there were no negative licence for gas and gas conden- development of the fuel and energy to increase the use of renewable is the installation of an automated energy assets provided a stable impacts. The situation fully sate production, and follow-up assets are the Fuel and Energy energy include: commercial electricity metering energy supply for the Group’s normalised, with the metal content exploration in Pelyatkinskoye Development Strategy (approved ΅΅ the replacement of obsolete system across the Company’s operations and other consumers, in the water meeting the applicable Field, the Taimyr Peninsula’s by the Board of Directors in 2015) hydroelectric units at Ust-Khan- operations in the Norilsk Industrial including the residents of towns standards, and clam and shell largest hydrocarbon deposit. and the Programme to Upgrade, tayskaya HPP to make better use District. The project involves the and settlements of the Norilsk populations recovering in Currently, the field is being Revamp and Replace the Norilsk of water resources, increase HPP installation of units, electricity and Industrial District. a natural way. developed by the company; Industrial District’s Power Facilities generation volumes, and improve heating meters, the automatic ΅΅ Taimyrtransgaz. The company (in implementation since 2014, the reliability of energy supplies acquisition, transfer, processing There were no significant changes Since the accident occurred, transports natural gas and expected to run up to 2025). to the Norilsk Industrial District and storage of data, etc. The in the structure of primary power Norilsk Nickel Harjavalta has been condensate to consumers (as at 31 December 2016, two projects of upgrading oxygen consumption in 2012–2016. Natural in close touch with regulators in the Norilsk Industrial District; For the purposes of implementing out of seven hydroelectric units generation facilities and air gas is the primary energy source strictly complying with their ΅΅ Norilskgazprom. The company a uniform R&D policy and meeting were commissioned); compressor systems are in their used for generating about 90% of directives. As part of the jointly produces and treats gas and the targets of the strategy for ΅΅ installation of an additional final stages. The Company total energy. The peak values of developed environmental protec- gas condensate, and sells raw the fuel and energy assets, autotransformer at the Opornaya continued rolling out energy gas consumption in 2013 and 2016 tion plan for 2016, the facility hydrocarbons to NTEK and the Company has set up an Expert substation to increase the intake efficient equipment across its were driven by lower water levels released the first batch of salmon MMC Norilsk Nickel’s Polar Committee on Energy, which forms of power and capacity from business units, having replaced at NTEK’s HPP water storage fingerlings to maintain the fish Division. Norilskgazprom a part of the Company’s R&D Ust-Khantayskaya and Kureys- incandescent lights with LED and reservoirs, which led to increased population in the river. produces gas in the following Council and is chaired by the kaya HPPs for the Norilsk other energy saving bulbs and TPP generation and lower HPP fields: Severo-Soleninskoye Senior Vice President – Head of Industrial District across installed RPM controllers in volumes in order to achieve Gas Condensate Field; Nonindustrial Assets and Energy the 110 kV network to 350 MW ventilation systems, pump stations long-time average annual levels to 7.7. Yuzhno-Soleninskoye Gas Supply. and 500 MW in normal and and other variable load systems. coincide with the peak load of the Energy conservation Condensate Field; and emergency conditions, respec- Each year, the Company develops heating season. The decrease in G4-DMA and efficiency Messoyakhskoye Gas Field; To achieve the fuel and energy tively (the project was success- and implements organisational and coal consumption was due to the Energy ΅΅ Norilsktransgaz. The company development goals and objectives, fully completed in 2016). technical action plans to save fuel, reconfiguration of core production The fuel and energy business transports natural gas and the Company is running investment heat, power and water. facilities. In 2016, the Company’s block is an integral link in the condensate from the Norilskgaz- projects approved by the Invest- For more details about HPPs generated 38% of total power 94 production chain and a key element prom fields to consumers in ment Committee. key investments in the fuel MMC Norilsk Nickel and NTEK are produced by the Company’s fuel in supporting the households the Norilsk Industrial District; and energy capacities, please members of industrial non-commer- and energy assets. across the Company’s footprint. ΅΅ Bystrinsk Electric Grid Company. In 2016, the Company continued see the interactive version cial organisations (Energy Consum- Most of the Company’s production The company was set up in 2015 upgrading, revamping and of this Report. ers Association and Energy Due to the Nickel Plant shutdown, facilities and workforce operate as a construction management replacing the Norilsk Industrial Producers Association, respec- there were significant changes in or live in the harsh Arctic climate. company under the investment District’s power facilities. For the purpose of Federal Law tively). These organisations work the patterns of electricity, heat and project to build an overhead No. 261-FZ On Energy Conserva- towards creating a competitive and steam consumption by the Group’s The Company’s fuel and energy Kharanorskaya GRES (power tion and Improvements in Energy transparent power and capacity facilities in 2016. Of the total assets include: plant) – Bugdainskaya – Bystrins- Efficiency, in 2016, MMC Norilsk market in Russia, as well as consumption, electricity represents ΅΅ NTEK. The company is respon- kaya 220 kV power line with Nickel launched a mid-term ensuring a favourable investment the highest percentage – 49.9% (vs sible for power and heat 220 kV Bugdainskaya and programme, approved by climate in the industry. A G4–16 55.5% in 2015), followed by heating generation, transmission and Bystrinskaya substations; the Company’s First Vice-President and cooling energy – 45.8% (vs sale using the facilities of ΅΅ Arctic-Energo. The company (COO), to improve energy efficiency 33.3% in 2015), and steam and Norilskenergo (MMC Norilsk is Kola MMC’s default supplier at the industrial facilities low-grade heat used in production Nickel’s branch) and Taimyren- based in Monchegorsk. of the Norilsk Industrial District processes – the remaining 4.3%. ergo. It comprises five power and the Murmansk Region. A G4–EN6 generating facilities, including three thermal power plants (TPP-1, TPP-2 and TPP-3) and two hydropower plants (Ust-Khantais- kaya and Kureyskaya HPPs);
Corporate Social Responsibility Report 2016 Environment Nornickel GROUP
Kola MMC accounts for the The Group’s total energy supply In 2016, the Group’s Russian consumption of nearly all energy to external consumers stands operations saved 930 TJ of energy (around 99%) purchased from at 19,882 TJ, with NTEK’s share on the back of multiple energy saving third-party suppliers1. amounting to 86.4%, or 17,178 TJ. initiatives (against 1,290 TJ in 2015)2.
Primary energy consumption3, TJ A G4–EN3
2012 2013 2014 2015 2016 %
Coal 4,299 4,250 4,417 4,170 2,132 1.2
Natural gas 132,095 151,351 146,200 145,266 151,081 87.5
Diesel fuel and fuel oil 12,441 11,888 11,684 12,274 15,640 9.1
Gasoline and aviation fuel – – – – 3,789 2.2
Total 148,835 167,489 162,301 161,710 172,643 100.0
Intermediate energy consumption4, TJ A G4–EN3
2012 2013 2014 2015 2016 %
Electricity 50,434 44,499 45,100 42,943 32,530 49.9
Heating and cooling 22,866 21,152 28,230 25,721 29,888 45.8
Steam, low-grade heat 9,048 9,568 9,648 8,692 2,803 4.3
Total 82,348 75,219 82,978 77,356 65,221 100.0
96 1 Kola MMC buys energy through Arctic-Energo, its default supplier. 2 The adjustment (as compared to 1,209 TJ specified in the 2015 report) is due to the update of the calculation methodology for NTEK. The new methodology does not factor in the difference between the target and actual energy consumption. 3 Since 2016, including the consumption by the Company’s transport and logistics operations; in 2016, total consumption, excluding transport and logistics operations, stood at 160,568 TJ. 4 Net of losses.
Corporate Social Responsibility Report 2016 Society Nornickel GROUP
Norilsk Administration, MMC Norilsk Nickel's Polar Division and Vladimir Potanin Foundation signed a tripartite memorandum of cooperation. The document provides for the establishment of Norilsk Development Agency to become 98 a foundation for economic, social and cultural development of Norilsk and creation of a favourable urban environment.
COLLABOABILITY OF OUR EMPLOYEES RATION TO ACHIEVE GOALS AND OBJECTIVES THROUGH TEAMWORK
Corporate Social Responsibility Report 2016 Society Nornickel GROUP
8.1. recognised principles and rules of The responsibility for the HR and Employees international law, standards of the social policy of the Norilsk Nickel and social policy International Labour Organisation, Group is borne by: and national laws of the countries ΅΅ Corporate Governance, Nomina- human capital is one of the key of the Company’s operations. tion and Remuneration Commit- factors contributing to the Com- tee of MMC Norilsk Nickel’s Board G4-DMA Market Presence pany’s successful development. The business of Norilsk Nickel is of Directors; G4-DMA Recognising its importance, based on respect for each ΅΅ Ms. L. Zelkova, Senior Vice Employment the management of Nornickel Group employee and their rights. The President for HR, Social Policy and is committed to creating conditions Company’s position on human Public Relations, a member of the that would contribute to employees’ rights is set forth in the Code of Public Council under the Ministry performance and engagement, and Business Conduct, Personal Data of Labour and Social Protection exercises a transparent approach Policy, Anti-Embezzlement of the Russian Federation; to HR practices. Regulation, In-House Investigation ΅΅ Departments of Personnel and Regulation, and Regulation on the Social Policy of the Company’s The legal basis of the Company’s Prevention and Management of Head Office; approach to labour and other HR Conflicts of Interest in Norilsk ΅΅ personnel services of the Group’s relations is consistent with widely Nickel. companies. 8. Key risks associated with corporate social responsibility A G4–2
Risk of escalating social tensions Risk mitigants in the regions of operation 100 strict abidance by the collective bargaining agreements made and strained social between the Group’s companies and employees; and labour relations Society fulfilment of social obligations under public-private partnership among the agreements; workforce active liaison with regional and local authorities, and civil society institutions;
HTS public meetings to facilitate constructive dialogue between the private sector, public authorities and local communities HLI G Risk description in the Company’s regions of operation; Nornickel’s social policy Escalating tensions among the implementation of the World of New Opportunities charitable workforce due to deterioration of social 2016 HI G 2016 programme aimed at supporting and promoting regional public and economic conditions in the 91.5 focuses on maintaining initiatives; Company’s regions of operation RUB bn implementation of the Norilsk Upgrade project to introduce Tax and non-tax payments social stability in teams innovative solutions for sustainable social and economic to budgets of various levels development of the region; engaged in the Group’s regular social monitoring across the Group’s operations; operations implementation of programmes to retain released employees and retrain them for other jobs at the Company’s production facilities; opinion polls in the regions of operation on quality of life, 23.6 employment levels, migration attitudes, social well-being RUB bn and areas of concern; Financing of social, charitable and social social projects and programmes aimed at supporting employees infrastructure programmes and their families, as well as the Company’s former employees. 94,200 RUB Average monthly salary paid to the Company’s employees
Corporate Social Responsibility Report 2016 Society Nornickel GROUP
Group average and actual headcount as at the end of the year, ‘000, Personnel structure Personnel structure Russian citizens, % A G4–10 by gender, % by category, % A G4–EC6
99.5
86.3 85.0 13.1 84.1 83.6 83.3 82.0 81.9 82.3 82.0 81.4 97.8 29.2
16.9
70.0 70.8
Male Blue-collar employees Share in total headcount
Female White-collar employees Share in senior executives 2012 2013 2014 2015 2016 Executives
Average headcount Headcount Personnel structure by type of contract, %
Total 5.6 Male 5.1 Female 6.8 Headcount of the Group’s Personnel structure Personnel structure foreign operations, employees by education1, % by territory, % 102
8.1 18.8
273 30.6 16.6
19.4 4.8 94.4 94.9 93.2 586 38 70.6 13 10 5 31.0 Fixed-term employment contracts Unlimited employment contracts 0.3
Europe (Finland) Total average Norilsk Industrial District (NID)
Europe (other countries) Higher education Krasnoyarsk Territory (except for NID) Asia Undergraduate education Kola Peninsula Industrial North America Secondary vocational education District (Murmansk Region)
Australia Primary vocational education Moscow and other regions of Russia
Africa (SAR)
1 Unless otherwise specified, the indicators are hereinafter given for the Group’s Russian operations. Over 99% of the staff employed by the Group’s Russian companies are full-time employees. In 2016, there were 1,329 employees working under civil contracts and external part-timers not on the Company’s payroll, including 766 males and 563 females.
Corporate Social Responsibility Report 2016 Society Nornickel GROUP
Priority HR projects and development programmes in 2016 Target Personnel Groups Development Projects
Management Start has been Senior Management Skills Professional Skills Mentor Academy is a framework Leader movement for young The Master University created specifically for newly Development More than Assessment for for providing organisational and professionals brings together project has been designed appointed line managers. 600 managers have been trained Executives seeks to methodological assistance to employees aged from 18 to 35. It holds for line managers 138 managers were trained in to improve their communication identify professional mentors (highly qualified blue-collar its events in five major areas: Norma NN (foremen). It includes the Norilsk Industrial District and skills. areas in need of priority workers sharing their professional (active leisure), NIKoNN (mind sports and the Foreman of the Year Kola MMC in 2016. 10 top development. As many knowledge with young employees). quests), Creativity (contests, festivals contest, a training students were offered as 245 executives The Company holds annual and KBNN), Induction and Career programme and mind sport internships at the Company’s in the Power and corporate professional skills Guidance (support for young employees, tournaments for line European facilities. Mechanics functional competitions for mentors, with meetings with school students), managers (foremen). units have taken part in winners taking part in regional Initiatives (projects to address social the assessment process. and federal competitions. issues). The most active teams receive Talent Pool Management Upgrade – the Company has started cascading the The Recognition Forum of Mentors the Leader of the Year status at an project down to lower and middle management level. More than 800 employees takes place every year. annual competition. of Polar Division, Kola MMC, and Pechengastroy have been tested for the pool, and 112 of them have been included in the talent pool. Each employee in the talent pool has been assigned with a mentor (superior). They have all received educational materials. The Company has commenced industrialisation of its talent pool management process using SAP HCM. The above projects have been carried on since 2003. In 2016, they covered more than 26,000 people.
104 Prospective recruitment has ongoing relations with colleges engaging them in solving actual For its efforts in guiding the young Outplacement, retraining Certain categories of the Nickel of skilled PERSONNEL and universities and offers business tasks. The method served in their career development, and relocation of Nickel Plant redundant employees The Company applies a wide internships to students majoring as the basis for the Conquerors the Company has received Plant Employees (vulnerable categories, or women range of advanced recruitment in much sought-after professions of the North, a business game held awards in several nominations All outplacement proceedings who could not be offered an technologies. In particular, we use and qualifications. as part of the Career Start-Up of the Community Professional in respect of the Nickel Plant outplacement) have received a specialised Norilsk Nickel – programme that took place in Engagement competition held employees have been conducted additional benefits and severance Jobs and Careers website Students from dedicated Russian Norilsk in summer 2015. In 2016, in the Krasnoyarsk Territory. by the Company in compliance guarantees. As at the end of 2016, www.hr.nornik.ru and a free universities are invited to take Kola MMC joined the business The Conquerors of the North with statutory procedures, with the relevant agreements under employment hot line part in the Career Start-Up game. For two summer months, project won the All-Russian the relevant notices duly sent these programmes have been (8-800-700-19-43). programme of pre-graduation the programme participants were Graduate Award 2016. to the local employment agency, signed with 65 employees. internships and work placements. offered to take a hands-on training the trade union, the Social and The Company also implements The Programme cooperates with and a multi-stage business game For more details on the Com- Labour Council, and other The outplaced employees have corporate programmes to recruit 23 Russian universities. In 2015, with a focus on team work to try pany’s career development stakeholders. been offered professional training white- and blue-collar employees Norilsk Nickel was the first and tackle some of the Company’ programmes, please see to master new professional skills, from among young people that company in the Russian metals and real tasks. In 2016, the business the Developing Local As at the end of 2016, the Com- or to upgrade their qualification are completing their training at mining sector to start mentoring game was attended by 215 Communities section. pany has outplaced 1,680 employ- category and get clearance for professional schools. The Company students and graduates by students. ees to various positions in Polar specific types of work. More than The Company has taken efforts Division and other operations. 1,158 employees have undergone to assist new employees with their the training during 2016. A G4–LA1 living arrangements by launching The Company has signed
Indicator 2012 2013 2014 2015 2016 the dedicated programme in agreements with 569 employees The total cost of social the Norilsk Industrial District under the Metallurgy Veterans support measures undertaken Employments 15,408 10,103 13,220 15,607 15,166 and Taimyrsky Dolgano-Nenetsky Programme; as at 31 December by the Company in connection Employee inflow ratio1, % 18.8 12.2 16.5 19.1 18.8 Municipal District. Experts with 2016, all its participants have with the closure of Nickel Plant Separations 14,316 13,738 12,812 14,277 15,413 professional skills in high demand received a one-off redundancy has amounted to RUB 1,382 m. on the local labour market invited payment. 2 Employee turnover , % 11.8 12.1 11.3 10.7 10.5 from other Russian regions and Employee outflow ratio3, % 16.6 16.7 15.6 17.1 19.2 neighbouring countries are provided
1 The ratio of new employments to the total employments as at the end of the period. with adequate living conditions 2 The ratio of resignations, dismissals for breach of labour discipline, and negotiated terminations, to the annual average headcount. and compensated for the costs 3 The ratio of all separations to the total employments as at the end of the period. of relocation and resettlement.
Corporate Social Responsibility Report 2016 Society Nornickel GROUP
Personnel development The Group’s entities organise their System of incentives In 2014, the Company launched its personnel training process in and rewards Remuneration package structure in the Group’s Russian entities in 2016, % G4-DMA long-term HR strategy – the Human accordance with their local internal In 2016, the Company approved Training and Education Capital Development Programme. regulations based on the Model its remuneration policy, which seeks The Programme sets out the priority Regulation on Professional Training to recruit and retain employees, Remuneration package areas of human capital development at MMC Norilsk Nickel. promote productive attitude required to facilitate the implementa- to work, administrative efficiency tion of the Company’s strategy. The professional training process and simplicity, and compliance Salary – 93% Benefits – 7% may include training, retraining, with legal requirements. The main objectives of the Human skills improvement, and internship. Capital Development Programme Training takes place at corporate The key principles that underlie are as follows: training centres in Norilsk and the Company’s remuneration ΅΅ to introduce staff segmentation Monchegorsk (more than 70% system include: Fixed part – 70% Variable (bonus) part – 30% and apply a targeted approach of all courses), and independent ΅΅ progressive remuneration system to social benefits in various institutions. in line with the job grading segments; framework (single approach ΅΅ to implement appropriate models In 2017, the Company intends to to salaries and wages); in deploying manpower; transform its corporate training ΅΅ single approach to salaries Regular bonus – 13% One-off bonus – 17% ΅΅ to focus increasingly on system by enhancing and develop- and wages; the proactive approach ing the distance learning option. ΅΅ incentivising employees to and personal initiative; It also plans to roll out the talent achieve their goals and objec- ΅΅ to enhance the talent pool; pool management programme tives by improving individual, takes into account knowledge and bonus remuneration system. ΅΅ to help personnel grow; for the Nornickel Group facilities business unit and Group skills, complexity of tasks, and level Blue-collar employees are remuner- Average salary in the Company, ΅΅ to change the HR focus towards in the Norilsk Industrial District. performance; of responsibility. The grading ated in accordance with the RUB ’000 per month supporting the Company’s The comprehensive talent pool ΅΅ competitive salary; framework seeks to ensure that the time-based, time plus bonus, or strategy and acting as a business development programme is to be ΅΅ promotion of the Company’s Company delivers on its business piecework plus bonus remuneration partner. finalised, with the first version image as a responsible and The total payroll objectives and implements its systems. Bonuses are paid to the of the industrialised talent pool reliable employer. of Nornickel Group 106 strategy, secures maximum return employees who have met the bonus Training is one of the key tools management process to be tested in 2016 amounted on investment in human capital, award criteria and have scored to to RUB 92,186.9 m. of personnel development. Training in production environment. The In 2016, the Company continued and engages and retains the best achieve the relevant threshold is an ongoing process and an Company plans to launch its Talent its efforts in the introduction professionals. values calculated to factor in the everyday part of the employee’s Nurturing project focused on the of the grading framework, whereby overall performance of the Com- 94.2 daily work enabling them to concept of selection and develop- each job and level of remuneration Executives and whitecollar pany, and the relevant unit, as well 84.9 consistently expand and deepen ment of promising employees. are ranged by reference to employees are compensated as the employee’s personal 76.0 75.4 their knowledge and skills, and to Executive professional skills the value the Company attaches 68.5 on the basis of the time actually contribution. Types of bonuses: for enhance professional excellence to assessment will be extended to the relevant position. Grading worked by applying the relevant overall operating performance in a meet the Company’s development to cover line managers employed is conducted by applying the point tariffs and wages in accordance given month; for outstanding individ- needs. A G4–LA10 at mining operations. factor method to job evaluation that with the time-based remuneration ual performance; for completion of system, or the time worked and critical assignments, and other types Key personnel training indicators A G4–LA9 performance demonstrated in of one-off awards in accordance accordance with the time plus with the local regulations. Indicator 2012 2013 2014 2015 2016
Employees covered by training, vocational training, retraining 48.7 47.9 54.1 63.1 70.0 2012 2013 2014 2015 2016 and skills improvement (‘000)
The average annual training volume per employee trained (hours) 115.7 109.6 93.8 92.2 80.8 Key compensation indicators A G4–ec5 Training costs (RUB m) 600.7 608.9 661.5 669.1 760.0 Minimum monthly Regional payroll compensation Remuneration Average percentage to statutory package monthly salary, of the aggregate minimum Region (RUB ‘000) (RUB ’000) payroll, % monthly wage
Kola Peninsula Industrial District 76.6 72.1 12.2 1.0 (Murmansk Region)
Krasnoyarsk Territory (except for NID) 47.9 46.9 2.4 1.2
Moscow and other regions of Russia 165.0 157.6 15.0 1.7
Norilsk Industrial District (NID) 103.4 94.5 70.4 1.7
Corporate Social Responsibility Report 2016 Society Nornickel GROUP
Employee awards achieved their goals and objectives, ΅΅ health resort treatment and Co-Funded Pension Plan The terms of the Programme As at the end of 2016, In 2016, 4,980 employees of the the Company conducts a thorough vacation to employees and their Programme provide for two pension plans: the Co-Funded Pension Plan Group received various awards for and comprehensive review, families at subsidised prices; In 2016, the Group entities Parity and Corporate. The Parity has been made available their outstanding performance and assesses the most acceptable ΅΅ one-off financial aid in the face continued implementing its Plan is the basic plan where to more than 5,600 people. long-standing and diligent work, solutions in terms of social interests, of certain life events, or hardships; Co-Funded Pension Plan, a pension savings are co-funded by including 55 employees honoured economics of the Company, ΅΅ additional pensions to employees corporate private pension pro- the employee and the Company on Health improvement with government awards, 303 and the interests of its employees. and other types of social gramme. The programme targets a par (equal) basis. The Company’s programmes employees – with ministry and In addition to that, to ensure guarantees under the existing employees of 20 entities, including contribution is equal to that of The Company’s programme of agency awards, 1,338 employees prompt identification of gaps collective bargaining agreements the Company’s branches and the employee but may not exceed health improvement and health who received awards from regional in the programme implementation and local regulations. Group entities in the Norilsk 7% of the employee’s salary. resort treatment that it offers its and municipal authorities, 271 and mechanism, the Company monitors Industrial District and Kola The Corporate Plan is designed employees and their families is one 3,013 employees who were granted such implementation on an ongoing For more details on employee Peninsula, as well as the Head for highly skilled employees and/or of the key priorities in its social corporate and internal awards, basis. benefits and remuneration, please Office in Moscow. A G4–Ec3 employees with highly sought-after policy. The significance of the respectively. see Appendix 4 hereto. occupations; within this plan, the programme is explained by special The social package includes The programme has been in place Company finances private pension working conditions at the Group’s Social policy the following benefits since 2007; at the end of 2016, more plans for such employees. In 2016, facilities, and harsh climate of The social policy of the Nornickel and compensations: than 17,000 of the Group employees an average participant contribution the Far North where the Company’s Group is implemented in a consis- ΅΅ payment of return travel have joined the programme. amounted to 2.70% of the employ- main operations are located. tent manner in accordance and baggage costs to a place ee’s salary, or the Company’s with its approved regulations. of vacation to employees average of RUB 2,500. To make changes to the existing in the Far North and equivalent programmes, develop new ones areas, and their families; Participants of the Co-Funded Pension Plan in 2016 and close the programmes that have
Indicator 2016 2017 (plan)
Total participants 17,322 18,958 Employee-related social expenses in 2016, RUB m Kola Peninsula Industrial District (Murmansk Region) 2,867 3,201 108 2016P 2016A 2017P Moscow and other regions of Russia 18 25 288 136 255 145 257 164 Norilsk Industrial District (NID) 14,437 15,732
481 481 663 2,037 2,042 2,145
Vacation programmes Number of participants in 2016
2,387 2,315 2,272 Zapolyarye Health Resort (Sochi) 10,301
Kolsky Health and Spa Centre (Monchegorsk) 1,689
3,323 3,411 Non-corporate health resorts, incl.: 7,958 3,190 186 164 229 1,044 Rossiya Health Resort (Altai Territory) 509 457 1,194 286 457 1,173
Roza Khutor, Imeretinsky resorts2 (Sochi) 7,356
Rosa Springs Health Resort (jointly with the Imeretinsky resort) (Sochi) 5,232
Rossiya Health Resort (Republic of Crimea) 1,573 Health resort treatment and vacations Relocation assistance to new Corporate social projects1 of employees and their families employees Primorie Holiday Centre (Gelendzhik) 601 Reimbursement of round trip travel Financial aid and additional benefits expenses and baggage fees to Expenses for voluntary medical paid to pensioners, former employees other non-corporate health resorts 43 employees and their families insurance and their families Vacation for children (incl. Anapa and Bulgaria) 1,508 Pension plans Housing programmes Other social expenses International vacation programme 5,160
1 Developing target groups, sports and festive events, New Year presents for children. Total participants 26,616
2 Wellness programme offered by the Rosa Khutor ski resort and Imeretinsky is combined with the treatment offered by the Zapolyarye Health Resort.
Corporate Social Responsibility Report 2016 Society Nornickel GROUP
Our Home and My Home Temporary Assistance Programme volleyball, basketball, alpine skiing, The Company also provides ΅΅ Norilsk Nickel took the 3rd prize 8.2. Programmes for Employees of Polar Division snowboarding competitions, targeted assistance to its former in the All-Russian Creating the Developing local Our Home programme has been and Kola MMC in Acquiring and sport events dedicated to employees and their families to pay Future competition that promotes communities implemented since 2010 and is Residential Property the Metallurgist Day and other high for health improvement and best talent engagement practices. offered at Polar Division, Polar In September 2016, the Company days and holidays. The annual medications, funeral services, The competition sponsored by norilsk Nickel is one of the major Transportation Branch, and Kola piloted the Temporary Assistance Polar Olympics, a winter family and helping in financial distress. the Ministry of Education and employers and taxpayers in G4-DMA Local Communities MMC. My Home programme was Programme for Employees of Polar competition, brings together Science of the Russian Federation Russia1. The Company makes G4-DMA launched in 2011 and includes Division and Kola MMC in Acquiring the Group’s corporate and The Company’s awards is held every year. significant contribution to the Indirect Economic Impacts 13 Group entities operating Residential Property, a new housing municipal teams. as a responsible employer ΅΅ In 2016, Norilsk Nickel was development of local communities in Norilsk, Taimyrsky Dolgano- programme aimed at social support In 2016, the Company was hon- included in the Russia’s top by implementing a range of social Nenetsky Municipal District and employee retention. It is The corporate competitions oured by a number of significant employer rating by the Head- programmes that address current and Murmansk Region. designed to give the Company’s encompass 10 sports. awards attesting to the high opinion Hunter portal. The contest and future objectives taking into employees a greater choice in shared by its employees and expert brought together 233 companies account stakeholder opinions and Both programmes seek to address determining their future region of Programmes supporting former community in respect of its representing all industries and the results of the comprehensive the shortage of strategically residence and quality of housing, employees and their families personnel management practices. regions of the country. The rating analysis of the current situation important critical and key personnel and encourage them to make The ongoing post-retirement ΅΅ The Company received the was based on the scores from job and potential impact. A G4–SO1 and to create stable core staff at responsible decisions. To this end, support of its former employees Randstad Award 2016 as one seekers and employees, and took the Group entities located in the Far the Company provides employees is part of the Company’s corporate of the most attractive employers into account the performance of Norilsk Nickel’s key regions of North. Preference is given to line with interest-free loans to make social policy. in the Russian metals and mining the contenders’ HR departments. operation in Russia include the cities managers and highly skilled blue- a down payment due in up to ten sector. ΅΅ Norilsk Nickel with its integrated of Norilsk and Monchegorsk, collar employees. years and partially repays mort- The Company’s Veterans pro- communication programme Taimyrsky Dolgano-Nenetsky gage loan interest. In 2016, gramme has been designed to Creating the Future has won the Municipal District of the Krasnoyarsk The Company purchases ready-for- 122 people joined the programme. support unemployed pensioners Silver Archer award for the Best Territory, Pechengsky District of the residence flats located in Russian who permanently reside in Norilsk. Corporate Communication and Murmansk Region, Tazovsky District regions with comfortable living Sporting and mass public The conditions for programme Corporate Media Project. of the Yamal-Nenets Autonomous conditions and provides those to events programme participation depend on eligible employees under co-financ- The programme of sporting and the employee’s length of service ing terms: the Company pays up to mass public events seeks to foster or permanent disability status. 110 Company’s contribution to the development of local communities A G4–EC8 a half of the flat price and the rest is the corporate team spirit, develop Financial aid is paid by the Social paid by the employee during a corporate culture, promote a Security Fund of the Norilsk specified period of the employment healthy lifestyle and maintain Industrial District from the charitable The Group’s operations as a backbone of local economies term (5 to 10 years). The flat is favourable psychosocial climate contribution made by the Company. registered as the employee’s within teams. For this purpose, property upon completion of their the Company has set up The former employee financial aid Making tax payments Facilitating employment Fostering participation in the programme. the Physical Fitness and Sports programme establishes the amount to local budgets in local communities cooperation with Employees can use the flat immedi- Promotion Council. of the benefit paid upon retirement local businesses ately after receiving it. The flat price by reference to the employment remains unchanged throughout The Company welcomes regular period. the term of the programme. fitness sessions of its employees, organises and holds annual The Pensioner Financial Aid Fund Developing local social Organising regular charitable Operating socially Since the start of the programmes, corporate sports events and provides financial aid to former infrastructure programmes oriented assets and the Company has purchased competitions attended by dozens employees who retired prior to assets essential 3,404 flats. of thousands employees, their 10 July 2001 provided they had been for local community support families, and local community. employed by the Company’s units for The Company’s obligations to more than 25 years and permanently annually purchase up to 550 flats for The events include the annual Polar reside outside of the Norilsk its employees are stipulated by the Division Olympics, Kola MMC Industrial District. The Fund relies Collective Bargaining Agreement of Olympics, Norilsk Nickel Ski Track on voluntary monthly contributions Cooperation agreements with government authorities MMC Norilsk Nickel. In 2016, the flats health marathon, “Dad, Mum from employee salaries and equal were purchased in the Tver Region and I – a Sporty Family” corporate charitable contributions from and Krasnodar Territory. competition, swimming, futsal, the Company’s budget. 1 The information presented in this section refers to the Company’s Russian operations.
Corporate Social Responsibility Report 2016 Society Nornickel GROUP
Employing local To reduce unemployment and The career guidance events staged Tools used by the Company in assessing the impact of its programmes population staff its Polar Division units, by the Company focus on children As the major employer across its MMC Norilsk Nickel and Norilsk and young people under 35 y. o., and footprint, the Company implements Employment Centre signed constitute part of the regional and a set of initiatives to provide jobs a cooperation agreement with municipal interagency initiatives to
Monitoring social Annual polls among social Comments and career guidance to local the view to retraining those out implement the 2020 Occupational status in teams through programmes’ participants offered by expert communities, including to younger of work for the most needed Guidance Strategy in the Krasnoyarsk designated meetings who have benefited from: community at population groups. blue-collar jobs. Territory and the City of Norilsk. for operating, social health resort treatment; special purpose and labour issues events (round vacation; tables, forums, etc.) MMC Norilsk Nickel costs to finance its social, charitable and social infrastructure corporate gifts; programmes in 2016, RUB m cultural, entertainment, sporting events
27,064 25,750 23,616 A 2,816 Charity G4–EC7 2016 dedicated research: Monthly social status Assessing the 4,174 18,276 reports impact of the 5,250 Social programmes and benefits for employees researching personnel social projects 14,876 engagement as part of 3,536 implemented under 11,486 Sponsorship (sports projects) self-assessment for the purpose 11,294 of participating in the Russia’s the World of New best employers rating Opportunities 8,593 Infrastructure development in the regions programme: of operation (construction of railway public survey to assess and power lines to Bystrinsky Mining the effect of the World of New and Processing Plant) upon making decision 1,147 Opportunities programme to fund; 1,399 1,044 1,407 Investments in social projects and social infrastructure when monitoring 3,591 2,343 development (construction of fibre optic lines, renovation the progress. 2,598 of Zapolyarye Health Resort, participation in Norilsk 2,246 A 112 Airport reconstruction, etc.) G4–EC7 4,021 1,709 1,555 1,329 Repair and maintenance of social infrastructure (relocation programme, programme for improvement 2,672 2,579 A 1,303 1,738 of social and living conditions, etc.) G4–EC7
Area, Gazimuro-Zavodsky District ments of the Krasnoyarsk Territory, Budget payments 2015 2016P 2016 2017P of the Trans-Baikal Territory, the Murmansk Region, the Trans- In the reporting year, Norilsk Nickel’s a prospective region where the Baikal Territory, the Tver Region, payments to budgets of all levels and Bystrinsky Mining and Processing and the Saratov Region. non-budget funds rose by 3% 2 Plant is being constructed. In the year-on-year, reaching RUB 91.5 bn. Unemployment in key communities , % Tver Region, the Company is Norilsk Nickel sees its social policy Higher tax and non-tax payments are engaged in the construction of priorities in maintaining social due to the planned payroll increase. Murmansk Region 2.3 housing for its employees under My stability in teams engaged in the Decrease in income tax and 2.2 Home and Our Home programmes. Group’s operation, and in local environmental payments are due to Nickel Saratov hosts the Company’s communities. The Company the deduction of the overpayment 1.6 Zapolyarny General Service Centre that opened regularly assesses the impact of its recorded at the beginning of the year. Monchegorsk in 2016. Norilsk Nickel has entered social programmes and adjusts A G4–EC7 1.2 1.2 1.1 into social and economic partner- them accordingly. Krasnoyarsk Territory 0.8 ship agreements with the govern- Taimyrsky Dolgano-Nenetsky Municipal District Norilsk Tax and non-tax payments1 to budgets of various levels, RUB bn
Budget 2012 2013 2014 2015 2016
Total tax and non-tax payments, including 78.6 72.3 79.2 88.7 91.5
federal budget 23.5 16.7 13.5 11.9 14.1 2 As at the end of the reporting year.
Krasnoyarsk Territory consolidated budget 32.2 28.8 37.1 43.6 41.6
the budget of the city of Norilsk 4.0 3.7 4.1 5.5 4.7
Murmansk Region budget 5.7 5.7 7.0 8.2 7.8
1 Tax and non-tax payments include all taxes paid, net of VAT and dividend income tax, as well as insurance payments and customs duties.
Corporate Social Responsibility Report 2016 Society Nornickel GROUP
Key career guidance events: Annually, all Norilsk educational In 2016, the target audience Relocation Comprehensive Nickel Plant The line will be 956 km long, ΅΅ excursions, institutions and teachers actively of the Company’s career guidance programme shutdown programme with approximately 460 km using ΅΅ exhibitions, involved in the Company’s career events exceeded 25,000 people. Since 2011, the Company has been in August 2016, MMC Norilsk the existing power lines, 190 km ΅΅ open days, guidance efforts are invited to take contributing to a long-term target Nickel completed an important running through a permafrost zone G4-DMA Shutdown ΅΅ public lectures, part in the contest promoting Cooperation development programme to relocate people phase of a large-scale, environ- with no infrastructure, and 3.5 km plans ΅΅ dedicated lessons (Company’s innovative pedagogical practices As part of its social and economic living in Norilsk and Dudinka ment-focused programme for beneath the Yenisey River with Lessons, Norilsk Nickel – in vocational counselling. The partnership agreements entered (the Krasnoyarsk Territory) to other smelting capacities reconfiguration a radio relay link as a backup. Not Just Dreams), Company enlists its young special- into in 2009 and 2016, the Russian regions with favourable as outdated Nickel Plant was shut ΅΅ career contests (Add Colours ists to take part in its professional Company has been cultivating climate conditions. down in Norilsk two months ahead The project is funded by to your Town, My Parents’ Job is engagement programmes seeking cooperation with the companies of of the schedule. The project has MMC Norilsk Nickel, with Safe, I Would Become a Worker, to establish a direct dialogue with the Krasnoyarsk Territory and the The programme envisages been implemented in accordance organisational support provided Dreaming of a Future Career), school students, and shape up a Murmansk Region. By implementing relocation, over the span of with the agreement entered into by the Krasnoyarsk Territory ΅΅ additional education pro- positive attitude to joining the these agreements the Company 10 years, of 11,265 families (1,126 in 2014 among the Company, authorities. The total project grammes for students of Nornickel team and living in the has managed to make significant families per year) registered with the relevant ministries, and regional costs are estimated at RUB 2.5 bn. dedicated universities, areas of the Company’s operations. contribution to the development of the respective municipalities as and local authorities. Prior to the ΅΅ Conquerors of the North, local communities not only through those entitled to housing subsidies shutdown, the Company ramped up In 2016, the Company held tenders a business career guidance In 2016, the Company’s integrated its investment projects, but also under Federal Law No. 125-FZ On its nickel concentrate processing and selected contractors, with game for interns, younger generation professional by providing assistance to regional the Housing Subsidies for Citizens capacities at its other production materials procured and supplied. ΅΅ schoolchildren and student engagement project won the award companies, creating local jobs, Migrating from the Far North facilities (Kola MMC, Norilsk Nickel In February 2016, the construction work brigades, as Russia’s Best Social Project and paying local taxes. Regions and Equated Territories Harjavalta and Nadezhda Metallur- and installation of the communica- ΅΅ social skills training programmes sponsored by the Agency for dated 25 October 2002. gical Plant), and put in place an tion line started. for high school students, Strategic Initiatives. The project seeks For social infrastructure develop- The Company participates unprecedented programme of ΅΅ intellectual quizzes to stir up an interest in R&D creativity, ment, please see the interactive in the programme as a benefactor, outplacement, retraining and Podsolnukh (What? Where? When?), and introduce new educational version of this Report. with its donation to the programme relocation of the plant’s employees. store chain ΅΅ Arctic Wave festival of R&D technologies to motivate children and totalling RUB 8.3 bn. Since The plant shutdown has allowed to The Podsolnukh store chain, a part
discoveries, youth to acquire professions sought the launch of the programme, substantially decrease SO2 ground of the Norilsk Nickel Group, takes ΅΅ Arctic.PRO R&D marathon. after by the Company. the Company has contributed level concentrations in the its fair share of the retail market 114 a total of RUB 5,331 m to residential area of Norilsk. in the Norilsk Industrial District the Krasnoyarsk Territory budget, A G4–MM10 with eight stores, including one Cooperation development in figures including RUB 830 m in 2016. hypermarket. One of the store 1 Across During 2011–2016, 5,786 families Construction of a Novy chain’s priorities is to provide local purchased apartments and moved Urengoy–Norilsk fiber optic population with an opportunity Indicator the Krasnoyarsk Territory the Murmansk Region to the “mainland,” including communication line to buy socially significant basic Procurement tenders for goods and services held 1,573 937 4,796 families from Norilsk In late 2014, the Company made groceries at affordable prices. by the Company and 990 families from Dudinka. a decision to build a fibre optic In 2016, a total of 648 home communication line between Novy The SKU range of the chain Locally awarded procurements in the aggregate 61.79% 54.54% purchase certificates were issued. Urengoy and Norilsk. This signifi- includes 31 types of socially tenders held by the Company, % cant project was launched in line significant goods (vegetables, Group’s procurement costs in the region, RUB m, 18,384.6 1,487.1 Federal funding for the target with the Company’s development fruit, grains, dairy products, meat, incl. relocation programme was reduced strategy to meet the Norilsk canned foods, eggs, sugar, etc.) in 2015 and suspended altogether Industrial District’s need for that are offered at prices signifi- for services 2,684.0 1,487.1 in 2016, whereas contributions high-speed internet connection cantly lower than in other stores from the Company and regional and state-of-the-art mobile of the Norilsk Industrial District. for physical resources 14,757.3 0 and local budgets remained services. 2016 witnessed a twofold increase for food supplies 943.3 0 unchanged. The Company plans to of the socially significant goods discharge its obligations under the sold in the Podsolnukh store programme donating RUB 830 m chain (from 10% to 23% of the total each year up to the expiry turnover). of the Agreement in 2020.
1 As of January 2017.
Corporate Social Responsibility Report 2016 Society Nornickel GROUP
The Podsolnukh store chain Nornickel’s new charitable strategy 3. Socially oriented business: Innovations welcomes from 10,000 to 13,000 first launched in 2014 has been since inclusion of socially oriented people daily. The annual consumer then deployed in the following three assets and social infrastructure Objective ΅΅ Facilitate the implementation of advanced technologies, foster R&D potential and encourage innovation in engineering. traffic in 2016 increased by 4% as directions: in the Group’s assets. compared with 2015, with the 1. Comprehensive charity: transition Arctic.PRO R&D ΅΅ Held since 2014. absolute figure exceeding 4 million from one-off donations to a more The Company’s charity mechanisms marathon ΅΅ Target audience – schoolchildren of Norilsk, the Taimyrsky Dolgano-Nenetsky Municipal District, people. The average retail prices efficient grant-based social seek to improve the effect of Monchegorsk and the Pechengsky District. in the Podsolnukh store chain investments scheme, development charitable initiatives and to support ΅΅ Three stages: an online quiz, a personal invention contest, and a winter R&D school for finalists appreciated a fraction over 1% of social infrastructure, and local communities’ social improve- (Kazan in 2016, Krasnoyarsk in 2015, and St Petersburg in 2014). in 2016, which is notably less than establishment of local partnerships ment projects. The Company places ΅΅ In 2016, a total of approximately 600 children participated in the marathon. the official inflation rate. through cooperation agreements a high emphasis on development of FabLab, an innovation ΅΅ FabLab-Norilsk and FabLab-Monchegorsk were launched in 2015. and joint projects. civil institutions and improvement of and creativity ΅΅ The laboratories feature cutting-edge equipment (3D scanners and printers, laser and milling machines, plotters, Charitable programmes 2. Support and donations targeting the region’s reputation both locally laboratory lathes, moulding machines, etc.) enabling experiments, 3D printing, robot engineering, creation of unique The main objective of the Company’s specific organisations, provision and nationwide. designer items and interior decorations, programming, and inventions. charitable programmes is to improve of aid in the aftermath of natural ΅΅ The FabLab laboratories host training courses and workshops for schoolchildren, university students, the overall business environment calamities and catastrophes. IT professionals, engineers and other keen participants. and mitigate social problems across ΅΅ In 2016, the Monchegorsk laboratory hosted a foresight session with the view to further expanding the FabLab the regions of Norilsk Nickel’s project, and to defining avenues for development, including establishment of an autonomous non-profit operations. organisation and involvement of local communities in the laboratory’s efforts.
Arctic Wave festival ΅΅ The festival took place in Norilsk and Monchegorsk in 2015 and 2016 drawing over 8,000 participants Partnership of R&D discoveries each time. ΅΅ Objective: to promote science and technology among the youth, support creative engineering and innovative Objective ΅΅ Support public initiatives, impart new skills to the participants, and develop local expertise. thinking in schoolchildren, and demonstrate development potential of global and domestic R&D. ΅΅ Over 20 interactive sites hosting science battles and team games, quests and contests, experiments and tests, Grant ΅΅ The annual socially responsible initiatives competition with free grants for winners. lectures by young scientists and educational R&D shows. competition ΅΅ Project geography: Norilsk, the Taimyrsky Dolgano-Nenetsky Municipal District, Monchegorsk, and the Pechengsky District. 6th All-Russian ΅΅ MMC Norilsk Nickel became general partner of the festival in 2015. Science Festival ΅΅ Competition participants: non-profit organisations and associations, government and municipal bodies. ΅΅ Educational R&D lectures, science shows, workshops and contests. 116 in Krasnoyarsk ΅΅ Participants may submit their projects in one of the following 8 nominations: POLE OF GOODNESS (volunteer ΅΅ In 2016, over 40 R&D organisations, universities, innovation centres, plants and enterprises of the Krasnoyarsk movement, social support of vulnerable population), POLE OF THE FUTURE (new methods and technologies Territory and other Russian regions took part to showcase their most advanced products. in engaging children, teenagers, young people; R&D creativity, vocation counselling, spiritual guidance and ΅΅ The Company initiated and sponsored participation of a delegation representing supplementary patriotic education), POLE OF THE CITY (development and redevelopment of public spaces and courtyards), education facilities for children and cultural institutions from Norilsk and Dudinka that focus POLE OF RENAISSANCE (maintaining and recovering cultural heritage), POLE OF ENERGY (promotion of predominantly on R&D projects. healthy lifestyle), POLE OF NORTH (nurturing environmental awareness); POLE OF GROWTH (organisational development of non-profit entities), NEW POLE (a special nomination for proactive and ambitious secondary School of Urban ΅΅ Held since 2014. school students). Competencies ΅΅ A joint project by MMC Norilsk Nickel and the Kudrin Fund for Supporting Civil Initiatives. Participant ΅΅ Academy for social partnership and development: workshops, meetings, presentations and round tables ΅΅ The goal is to raise financial awareness, foster social activism and encourage new projects. 1 training on social projects, management, expertise and project promotion, analysis of application process mistakes. ΅΅ The target audience includes high school students and teachers from Norilsk, the Taimyrsky A new topic introduced in 2016 is monetisation of social projects. Dolgano-Nenetsky Municipal District, Monchegorsk and the Pechengsky District of the Murmansk Region. ΅΅ Social engineering workshop: a three-day learning session that takes participants all the way through from idea ΅΅ In 2016, the School hosted workshops for teachers and schoolchildren and staged the Our City generation to the project implementation in the form of a city-wide campaign. educational festival. 50 senior school students who succeeded in the project went to Anapa to take ΅΅ The proactive attitude of the participants has risen noticeably: in 2016, the Company held as many training part in a training expedition conducted in form of a business game that sought to nurture leaders sessions, workshops and round tables as during the period of 2014–2015. The programme involved and activists for children’s community organisations and project groups, as well as student approximately 1,800 people. self-government practices.
1 All training is free for the participants under the World of New Opportunities programme.
Corporate Social Responsibility Report 2016 Society Nornickel GROUP
Development The Company’s regions of operation day, Nornickel employees developed Sponsoring vocational hosted a Let’s Do It corporate and presented their socially important training Objective ΅΅ Engage active citizens and business community to address social issues of the local communities through volunteer environmental marathon projects and ideas. The Company MMC Norilsk Nickel helps develop business projects. engaging local activists, participants awarded grants to the best projects. the material, technical and Social ΅΅ The course runs in Monchegorsk (with some attendance from the Pechengsky District) and Norilsk. of the Plant of Goodness programme academic potential of Norilsk’s Entrepreneurship ΅΅ The course includes theory of social entrepreneurship, business planning and investment analysis. and caring town residents. In December 2016, Nornickel vocational training institutions Course ΅΅ The attendees get free guidance and advice to develop and promote business ideas addressing revealed the findings of Russia’s first to improve the quality of training any given social problems. The Engineers of the Future ever research named Corporate for in-demand jobs and reduce ΅΅ The course deliverables come in the form of a business plan for implementing a social intellectual forum held in Moscow Volunteering in Russia: Status and the adaptation time for graduates entrepreneurial project. brought together the best regional Recommendations. The research was hired by the Group. ΅΅ Course graduates may submit their business projects for expert review, with the best projects getting Plant of Goodness volunteers. initiated by the National Corporate funding from the Company in the form of an interest-free loan. Volunteering Council and the The financial support targets ΅΅ Two clubs of socially responsible businessmen were open in Norilsk and the Murmansk Region in 2016. The most exciting events of the Company. Its findings may be used as long-term projects implemented They brought together the most active representatives of small and medium business. Objective: volunteer programme in Norilsk a tool to foster corporate volunteering in conjunction with the Norilsk to share experience, learn new trends and technologies of doing business, discuss plans, and forge were Norilsk, Run with Me! and the and boost the efficiency of pro- Polytechnic College, Norilsk partnership connections. Cinderella amateur show. The Kola gramme managers and coordinators. Industrial Engineering and Service ΅΅ In 2016, the Company financed regional and federal outdoor events for club members, including their participation in the All-Russian Convention of Social Entrepreneurs held in Skolkovo, the Moscow Region. Peninsula hosted a DobroNickel in College, and Norilsk Industrial Zapolyarny family fest, Orange Ball of As at the end of 2016, Nornickel Institute. ΅΅ The Company received two awards at the All-Russian Competition Russian Business Leaders: Dynamics and Responsibility 2016 held as part of the 10th Russian Business Week. One of these awards celebrated Friendship and Warm Hose charitable became one of the three winners of the Company’s success in the nomination For Support and Development of Social Entrepreneurship. initiatives. the Champions of Goodness national After the Norilsk Industrial Engi- contest, receiving an award in the neering and Service College had Another interesting event titled Environment nomination for its been provided with a full upgrade The Company’s charity efforts Certain donations also get approved The corporate volunteer programme Engineers of Goodness was held as environmental volunteer programme of its infrastructure with the support centre around the World of New by the Company’s management. helps the Company achieve its part of the Company’s annual social in the Krasnoyarsk Territory, of the Company’s Polar Division, it Opportunities programme. In 2016, In 2016, the Company helped business goals as volunteers’ technology forum where, within one Murmansk Region and Moscow. won the Best Industrial Partnership it was recognised as the Best construct outdoor swing sets, mobility, responsibility and leader- College award in the Educational Charity Promotion Programme supported entities dealing with ship represent the very qualities Establishment of the 21st Century. th 118 as part of the 9 annual review vulnerable demographics (veterans required by the Company to boost Leaders League – 2016 All-Russian 2016 winners – structure Projects and winners Leaders of Corporate Charity. Polls of the Great Patriotic War, invalids, its performance and underpinning competition. by territory, % of the Socially Responsible undertaken by Polar Division and multi-child families, special needs its personnel development model. Initiatives Competition Kola MMC demonstrate that the children, financially disadvantaged The Company provides organisa- in 2014–2016 In 2016, the Polytechnic College of programme is positively viewed by citizens); and financed participation tional and financial support to its the Norilsk State Industrial Institute 13 local population, non-commercial of local non-profit organisations and employees’ volunteer initiatives. 400 opened the Electric Drive, organisations, and authorities. entities in various sports competi- One of the significant events in 2016 385 Machines and Apparatuses and tions, creativity contests, etc. was the launch of the Employees’ TPS Boiler Equipment laboratories The programme covers three focus Personal Donation Programme with after the previously purchased 15 302 areas: Partnership, Innovations, In 2016, Polar Division and Kola MMS the matching contributions commit- 49 equipment was assembled and Development. donated a total of RUB 370.7 m ted by the Company. Any employee installed. in response to requests from of the Head Office (and, in future, In 2016, the funding for the World organisations. of Kola MMC) who has a personal In 2016, the Company and the of New Opportunities programme account on the intranet portal can 18 Siberian Federal University entered amounted to RUB 144.3 m. Corporate volunteer take part in the programme. In 2016, 108 into a cooperation agreement to 91 95 programme the donations exceeded RUB 3 m. build a new sci-tech centre, which Target assistance Nornickel launched the Plant of will operate as a laboratory for The Company continued providing Goodness corporate volunteer In the reporting year, the Company Norilsk the development of a dynamic QC targeted charitable donations in programme in December 2015. for the first time joined the Good- system to monitor the extraction Monchegorsk response to special requests from Over the year, Moscow, Norilsk and Hearted Bazaar, a New Year 2014 2015 2016 and processing of mineral organisations. In 2014, the Polar the Kola Peninsula hosted more than charitable fair. Moscow’s most Pechengsky District resources. Division and Kola MMC set up 60 various charitable campaigns, known charitable event held Taimyrsky Dolgano-Nenetsky Projects Winners dedicated charity committees to which lasted over 60,000 hours at the Gostiny Dvor welcomed Municipal District review organisations’ applications. and engaged 5,000 employees. 13,000 guests.
Corporate Social Responsibility Report 2016 Society Nornickel GROUP
Supporting sports and grassroots football, and an XXIX International Winter Universiade will pay for the training of sports Federal cultural projects Local cultural projects projects official partner of Russia’s national 2019 in Krasnoyarsk facilities’ administrators, heads of In 2016, Nornickel acted as a The Company has supported the Norilsk Nickel sponsors strategic football team. The Company, acting as general functional divisions and sports top general partner of the Golden Mask following most talked about cultural Russian and international sports partner of the XXIX International managers, as well as leaders of in the Cinema project. Golden Mask events that took place in its local organisations. The Company provides sponsor Winter Universiade that will take volunteering teams which will be in the Cinema is a unique nationwide communities: support to the Norilsk Nickel futsal place in 2019 in Krasnoyarsk, has organised in 2017–2019 on the theatre project making stage ΅΅ an exhibition of local modern In accordance with the agreement club. Located in Norilsk since 2016, been honouring the obligations it basis of the Russian International productions of the best Russian art Cosmic Descent organised entered into by the Company in the club participates in the Russian assumed in 2015 to prepare the Olympic University and the Siberian theatres available to a broader to celebrate the 55th anniversary 2016, Nornickel obtained the status Super League Championship and venue for the upcoming worldwide Federal University. audience. The Company has of the first human space flight, of General Partner of the Russian Russian Futsal Cup. Its relocation sports event. supported cinema-based online and the Space Exploration Day Olympic Committee and the Russian gave a powerful push to the The Company was officially broadcasting of winning produc- (Norilsk); Olympic team. This would enable the development of minifootbal in The Bobrovy Log Fun Park, one announced general partner of the tions of the famous festival across ΅΅ the IX International Documentary Company to provide support to youth the local community, as the team of the investment projects of XXIX International Winter Universi- the country. Cinema Festival Nordic Charac- and high performance sports for up members and coaching staff are now Nornickel, has become a construc- ade on 15 February 2016. ter (Norilsk, Murmansk); to 2021, including to assist with the directly involved in the promotion tion site for a new athletic training Nornickel sponsored the Russia – ΅΅ the Big Argish festival that implementation of Olympic educa- of children’s sports in polar regions, complex to be equipped with With a view to promoting sports My History exposition held in demonstrates social, cultural, tional programmes of the Russian putting the club’s motto Playing for a broadcasting system and an among different audiences and the historical park at the Exhibition tourist, and business potential International Olympic University for the City – Playing for the Region! integrated security system, expanding the target area of of Economic Achievements in of the Russian North (Norilsk). a total amount of over RUB 1 bn. into practice. expanded ski trails, an ambulance presentation for the Krasnoyarsk Moscow. The Company’s participa- helicopter pad, new equipment, etc. XXIX International Winter Universi- tion in this project has become a The Company annually holds the In April 2016, the Company signed Starting from 2015, Nornickel ade 2019, Nornickel is supporting natural follow-up to the educational Star Corporation creativity contest a partnership agreement with has been acting as a general partner Seven trails of the Bobrovy Log Fun various engagement and cultural projects raising awareness of the among its employees, proposing the International University Sports for the Futsal to Schools national Park will welcome the athletes of the events, assisting with the branding national history, including those to compete in musical and artistic, Federation (FISU), under which the project, which seeks to include XXIX International Winter Universi- of three NordStar aircraft running connected with the exploration of and ornamental areas. In 2016, Company as an official partner of this sport into health and fitness ade 2019, who will compete for nine both domestic and international the Arctic Region and the Russian the festival celebrated its FISU will be promoting the interna- engagement programmes offered sets of medals in five disciplines – flights with the symbol of the Winter North (Arctic Days in Moscow 11th anniversary. tional university sports movement. by Russian educational institutions slalom, giant slalom, super giant, Universiade 2019, to be followed forum, VI International Forum Arctic: 120 FISU is the main body to supervise as part of extra-curriculum activities. alpine skiing combined, and PSL. by the branding of other transporta- the Present and the Future, etc.). The Company holds corporate international universiades and The Company supervises the Futsal tion means and art objects in festive events with popular Russian university championships, including to Polar Region Schools programme. The Company’s participation in the various locations. In 2016, after the reconstruction and local music bands and the upcoming XXIX International Winter Universiade will help create financed by the Company, the performers as a must-have; employ- Winter Universiade to be held in For the eighth year running, the most advanced sports infra- Support for cultural Russian Salon at the United Nations ees’ kids are invited to theatrical 2019 in Krasnoyarsk. the Company has been sponsoring structure in compliance with global projects Office in Geneva held its opening performances. The annual the Russian Cross-Country Skiing standards, designed for professional Supporting cultural projects is part ceremony. The Company’s efforts audience of such festive events Nornickel continues providing Championship in Monchegorsk. This sportsmen training, provide more of the general strategy the have been appreciated personally exceeds 20,000 people, half of support to CSKA professional championship is currently the only comfortable and safer conditions Company pursues in the sphere of by S.V. Lavrov, Head of the Ministry which are employees’ children. basketball club, Russia’s most nationwide sports competition held for participants at the start point on charity, which includes two major of Foreign Affairs of the Russian successful and award-winning in Monchegorsk. Around 200 people the trail, and broadcast the alpine directions. Federation. basketball club. In 2016, the team from 26 regions participate in the competitions using the most won the EuroLeague Final Four over marathon, including leading Russian up-to-date equipment. the strongest European basketball athletes. clubs. The Company has arranged for For more details on support of training of highly skilled personnel In 2015, Norilsk Nickel became corporate sports, please see the and volunteers who will be involved an official partner of the Russian Employees and Social Policy in the Winter Universiade 2019. Football Union in promoting youth section. The funding provided by Nornickel
Corporate Social Responsibility Report 2016 Society Nornickel GROUP
Chita Project 8.3. Yenisey River Shipping Company Preliminary stage preceding the creation of the Norilsk Development Agency The Company continues imple- Transport transports socially important cargoes menting the comprehensive accessibility to various destinations across the public-private partnership pro- Krasnoyarsk Territory. During the gramme to develop mineral The essential role of our transport short period of spring floods, it resources of the Trans-Baikal and logistics operations for ensures delivery of fuels and April 2016: Territory (Chita project). This communities across the Group’s lubricants, food and other goods to a two-day Strategic Session for businessmen, authorities, and experts tasked Strategic with the compilation of lists of directions and projects to be included project, one of the key ones operations is due to remote locations with limited transport Session in the remit of the Norilsk Development Agency. comprising the Company’s growth location of Norilsk Nickel’s key accessibility on the Podkamennaya strategy, contemplates construction production facilities, their position and Nizhnyaya Tunguska rivers and in of the Bystrinsky Mining and as a mainstay of local economies, other areas. The shipping company Processing Plant, a concentration and the severe Arctic climate. operates its own search and rescue facility, a rotation camp, railway and A G4–EC8 fleet and takes part in emergency October 2016: power grid infrastructure. The response missions on internal water execution of the Memorandum of Cooperation between the heads of Norilsk operation will create approximately The Company’s own cargo fleet routes of the Yenisey Basin. In 2016, Memorandum Municipality, Nornickel Polar Division, and Vladimir Potanin Foundation. of Cooperation 2,000 jobs, including those at includes 6 reinforced ice class the Yenisey River Shipping Company auxiliary and satellite facilities, and vessels (ARC 7 according to RMRS). was named the best among Russian increase tax proceeds. The project The technological capacities of the river shipping companies in the is expected to be completed as vessels allow overcoming polar ice Industry Leader contest held by the up to 1.5 m thick without icebreak- November 2016: scheduled. Federal Agency for Sea and River ers. Five Norilsk Nickel container Transport. holding the conference Franchising as a Tool to Boost the Trade and Services City-Wide Sector of Norilsk that demonstrated through presentations and workshops The Company’s successful vessels, and the Yenisey tanker Conference the best of Russia’s franchising practices to be used in most sought-after trade public-private partnership experi- ensure year-round service between Local shipping between different and services segments in the region. ence in implementing this project in Dudinka, Murmansk, Arkhangelsk, locations along the Yenisey river is 2016 was presented at the Eastern Rotterdam and Hamburg sea ports, carried out by dry cargo vessels of Economic Forum. and also offer commercial voyages MMC Norilsk Nickel’s Krasnoyarsk to other destinations. Transportation Branch. They deliver 122 In 2016, the Company was named Under the programme, which The Norilsk Development Agency socially important goods from the winner of the IABS’ Gold Quill has been in place since 2014, project is being implemented in The Company’s own river fleet Dudinka shipping agricultural Awards, an international profes- MMC Norilsk Nickel sponsored conjunction with the educational consists of 163 self-propelled products as their return cargo sional award, in two nominations: 57 cultural projects in Norilsk, project for introduction of the best vessels, and 392 non-self-pro- and carry cargoes for the Russian Special Event, and Audio/Visual the Taimyrsky Dolgano-Nenetsky urban development practices pelled vessels. Emergency Situations Ministry Communications for its Go Show Municipal District, Monchegorsk, throughout the Company’s regions to deal with emergencies. project, the northernmost 3D show, and the Pechengsky District, of operation: Russian Municipal and the northernmost flashmob, with 20 of them in 2016. Map: Points of Growth. In 2016,
organised as part of the previous in conjunction with the Kudrin Fund Norilsk Nickel’s transport and logistics assets year’s celebration of its 80th Norilsk Development Agency for Supporting Civil Initiatives, anniversary. Key objectives of the Agency: the Company held a series of launching projects for economic workshops and hands-on sessions
One of the nominations in diversification and urban space for representatives of the Adminis- Own cargo fleet of Own river fleet Own rail car fleet the World of New Opportunities transformation, creating a favour- tration of Norilsk and Taimyrsky reinforced ice-class Socially Responsible Initiatives able investment climate in the city, Dolgano-Nenetsky Municipal vessels Competition is the Renaissance providing support for small and District, with subsequent visits to Pole. It serves to support projects medium-sized businesses, and Perm and Cherepovets to share designed to preserve and give new promoting local employment and experience in urban development. life to cultural heritage, tap into self-employment. In addition, there Norilsk businessmen and tourist creative potential, develop various are plans to develop a tourism experts were welcomed to share Nordavia, Norilsk Avia, Port terminals in Norilsk Airport forms of art, and offer new leisure cluster based on local natural and their thoughts at a special venue NordStar air carriers Dudinka, Murmansk, Krasnoyarsk, and activities for the local communities. production facilities, hold training at the big Argish festival. Lesosibirsk sessions and promote branded businesses and entrepreneurial initiatives. The Agency is sched- uled to start its operation in 2017.
Corporate Social Responsibility Report 2016 Society Nornickel GROUP
Key risks associated with corporate social responsibility A G4–2
Risk of disruptions in Norilsk Airport operations during the runway reconstruction in 2017
Risk mitigants Risk description The risk of disruptions in Norilsk Airport monitoring the progress in the Norilsk Airport runway operations in potentially adverse reconstruction; weather conditions at peak times engagement of a dedicated commission for the Norilsk and in the restricted runway operating Airport runway reconstruction and air traffic during mode during its repair may cause a the reconstruction; shortage of freight and passenger air traffic and escalation of social tensions flight scheduling so as to account for the current need in the Norilsk Municipality territory in freight and passenger transportation services, working hours of the airport and capacity of air carriers; aircraft ground handling and maintenance so as to account for changes in the aircraft fleet, retraining of the flight personnel and support staff, and recruitment of additional staff; scheduling vacations of Nornickel Group employees residing in the Norilsk Municipality territory so as to account for reduced passenger traffic in Norilsk Airport 124 during the runway reconstruction.
The destinations covered by As part of the 2010–2020 Federal In 2016, MMC Norilsk Nickel and the the NordStar air carrier include Russian Transport Development Norilsk City Administration entered more than 30 Russian and CIS Programme and the Memorandum into a cooperation agreement with cities. The airline offers regular of Intent signed between the a view to maintaining and expanding and charter flights, and transports Federal Air Transport Agency and the existing regular passenger passengers to interregional budget MMC Norilsk Nickel, the project for and luggage bus service in Norilsk. subsidised destinations selling reconstruction of the Norilsk Airport tickets at reduced tariffs. Following (“Alykel”) reached its principal stage For more details on operating the end of 2016, NordStar was in 2016. The agreement provides results and the projects imple- named the most punctual air that the Norilsk Airport will be used mented in the sphere of Norilsk carrier at the Domodedovo Airport not only by cargo, passenger and Nickel’s transport and logistics of the Moscow Air Cluster. special aircraft, but by special operations, please see aircraft, including owned by the the Transport and Logistics section Norilsk Avia is the only air operator Russian Emergencies Ministry. of the Group’s 2016 annual report that is capable of responding to both The airport is expected to become industrial and social emergencies the centrepiece of the Russia’s in the region (the Norilsk Industrial Arctic Zone development project. District and Taimyrsky Dolgano- A distinctive feature of this project Nenetsky Municipal District of the is the reconstruction being Taymyr Peninsula). The Company conducted without closing satisfies the demand for regional the airport, or interrupting flight traffic, including emergency connections. In 2016, the first stage ambulance flights as part of search of the reconstruction of its 720 m and rescue operations. long paved runway was completed.
Corporate Social Responsibility Report 2016 About the Report Nornickel GROUP
The preparation of the Corporate The updated map of material by disclosing the Company’s Social Responsibility Report, disclosures (aspects) presented in a approaches to implementation of including mapping out essential new format became the outcome of responsible practices in its supply topics to be covered and selecting the efforts undertaken. The highest chain. The Report discloses an independent entity to certify scoring aspects have been the injury rate among the employ- 9. (audit) the Report is coordinated recognised material by the working ees of the contractors involved by the Social Policy Department. group. The material aspects are in the Group’s operations. A G4–21 The independent auditor of the CSR fully disclosed in the Report with Report is approved by the Senior details of respective management The CSR Report has been Vice President for HR, Social Policy approaches and performance approved by the RSPP’s Council About and Public Relations, whom the Social indicators provided. Aspects from on Non-Financial Reporting and Policy Department is accountable to. the blue area were deemed verified by a professional auditor The information included in the relevant (intermediate between and Global Reporting Initiative Report is collected and confirmed by material and non-material aspects), SDG Mapping Service. The Report a special working group consisting of with respective management has been also approved by the Report representatives of the Company’s approaches disclosed in the MMC Norilsk Nickel’s Board key divisions. A G4–48 the Report. of Directors. A G4–33
In order to upgrade the map of The collection scope for material The interactive version of the material disclosures, the Company’s aspects (see Appendix 3) is set in Report published on www.nornik.ru employees and representatives of such a way as to describe all contains additional information on external stakeholders were invited to Nornickel Group’s material impacts. the Report’s sections, an extended take part in the poll which ultimately The collection scope has not GRI index, dialogue minutes, a involved 23 representatives undergone any significant changes table of comments and proposals of the external stakeholders and compared to the previous reporting prepared by stakeholders in 47 representatives of the internal period. The Report provides results respect of the Report. A G4–27 ones. A G4–18 for all the companies within the 126 Nornickel is one of the companies was published in June 2016. GRI G4 Guidelines; it is being scope against each aspect. For that pioneer public non-financial Traditionally, the Report aims to gradually adapted to comply with In addition to polling, the concept some companies, however, the Poll participants geography, % reporting in Russia. The Company inform a wide range of stakehold- the new GRI standards. The project was also developed on the basis information is disclosed separately has been publishing annual social ers on the Company’s strategy and included the update of disclosure of the Company’s mass media profile based on the materiality principle. responsibility reports since 2003, mission, its sustainable develop- methods and data collection scope in 2016, stakeholder dialogues In addition to the companies with GRI Gold Community member- ments principles, key highlights and for a number of indicators, in in 2016–2017, recommendations covered by the CSR Report, the ship obtained in 2016. Nornickel results of the reporting period, and particular in respect of land offered by the investment community consolidated IFRS financial 23 is a participant of the GRI Standard the Group’s material impact on rehabilitation, energy consumption in respect of the previous CSR statements include Nkomati Nickel Pioneers programme. A G4–28, stakeholders. and the number of employees Report, comments of the indepen- Mine classified as an asset held for G4-29, G4–30, G4–15 covered by collective bargaining dent auditor and the Russian Union sale, and a number of the Group’s Information provided herein was agreements. The Company of Industrialists and Entrepreneurs’ other foreign companies that The 2016 Corporate Social Respon- obtained from corporate reports adjusted historical energy saving Council for Non-Financial Reporting, do not have a material economic, 52 sibility Report has been prepared and special information requests data and updated the calculation as well as by benchmarking environmental and social impact. 25 in accordance with the extended based on the recommendations methodology for a number comparable reports. A G4–17, G4–23 version of the GRI G4 Sustainability contained in the GRI G4 Guidelines of health and safety indicators Guidelines, and the GRI Mining and the GRI Mining and Metals required by the GRI Guidelines. In addition to the GRI G4 Guidelines, The working group has adjusted the and Metals Sector Supplement. Sector Supplement. In 2016, the In general, there have been no the Company has used the following scope of some material aspects The Report reflects the Company’s Company launched the project to restatements or corrections of in preparation of the Report: beyond the Group. In addition to the performance for the period from standardise and automate the CSR historical data that could signifi- ΅΅ UN Global Compact; Occupational Health and Safety, the Head Office 1 January 2016 to 31 December preparation business process. cantly affect the decisions or ΅΅ UN Sustainable Development working group has classified the 2016 and provides mid-term and The system developed as a result opinions of the addressees Goals up to 2030; following aspects beyond the Group Norilsk Industrial District long-term outlook for a number of permits to collect information of this Report. A G4–22 ΅΅ Guidance on Social Responsibility as material: Anti-Corruption, Product positions1. The 2015 CSR Report meeting the requirements of the ISO 26000:2010; and Service Quality Compliance, Kola Peninsula Industrial District (Murmansk Region) ΅΅ RSPP Reference Performance Emergency Preparedness. These Indicators. have been described in the Report
1 Bearing in mind that the Company’s operations are impacted by a multitude of factors beyond its control, the actual results in the future reporting periods may differ from the projections contained in the 2016 CSR Report.
Corporate Social Responsibility Report 2016 About the Report Nornickel GROUP
Set of disclosures No. on MAP OF MATERIAL ASPECTS A G4–19, G4–20 (aspects) Disclosures (aspects) the map
3.00 Economic Economic performance 1
Market presence 2
2.50 Indirect economic impacts 3
Environmental Energy 4
2.00 Water 5
Biodiversity 6 S
ER 1.50 Sulphur dioxide and solid emissions* 7
Greenhouse emissions* 8 1.00 D TAKEHOL Emissions of ozone-depleting substances (ODS)* 9 S TO
E Emissions of other substances* 10 C 0.50 Discharges 11
Effluents and wastes 12 0.00 IMPORTAN 0.00 0.50 1.00 1.50 2.00 2.50 3.00 Transport 13
Materiality of the Group’s impacts Environmental costs and investments** 14
Environmental grievance mechanisms 15 128 Supplier Environmental Assessment 16
Environmental compliance** 17 Material aspect with the highest Social Employment** 18 priority
Material aspect Occupational health and safety** 19
Immaterial but Training and education 20 relevant aspect Labour practices grievance mechanisms 21 Integral assessment of materiality Supplier assessment for labour practices 22 for stakeholders to materiality Local communities** 23 of impacts by the Group’s Anti-corruption 24 companies Grievance mechanisms for impacts on society 25
Supplier assessment for impacts on society 26 ECONOMIC ASPECT Product and service compliance 27 Environmental aspect Emergency preparedness 28
Social Shutdown plans 29 aspect Freedom of association and collective bargaining 30
Aspect materiality Indigenous rights 31 increased following Compliance 32 the poll
Supplier and contractor human rights assessment 33
* new description of the GRI Emissions aspect as compared with the one used in 2015 CSR Report. ** the materiality of the disclosure has been increased following the polling of internal and external stakeholders.
Corporate Social Responsibility Report 2016 Appendices Nornickel GROUP
Appendix 1. Appendix 2. Compliance with the UN Global Compact principles A G4–15 GRI G4 Content Index1 A G4–32
Global Compact principle Section of the Annual Report
Human rights
Principle 1: Businesses should support and respect the protection Goals and Objectives by CSR Focus Area of internationally proclaimed human rights Employees and Social Policy
Principle 2: Businesses should make sure that they are not complicit in human rights abuses
Labour
Principle 3: Businesses should uphold the freedom of association Dialogue with Employees General Standard Excluded information/ UN sustainable and the effective recognition of the right to collective bargaining Disclosures Page comments development goal
General Standard Disclosures Principle 4: Businesses should uphold the elimination of all forms of forced Dialogue with Employees and compulsory labour Employees and Social Policy Strategy and Analysis
Principle 5: Businesses should uphold the effective abolition of child labour G4-1 7 – –
Principle 6: Businesses should uphold the elimination of discrimination in respect G4-2 23, 39, 48, 49, 72, 87, 101, 124 – – of employment and occupation Organisational Profile Environment G4-3 11 – – Principle 7: Businesses should support a precautionary approach Risk Management Framework to environmental challenges G4-4 9 – –
Principle 8: Businesses should undertake initiatives to promote greater Goals and Objectives by CSR Focus Area G4-5 152 – – environmental responsibility Environmental performance G4-6 9 – – 130 Principle 9: Businesses should encourage the development and diffusion Environmental performance G4-7 58 – – of environmentally friendly technologies Research and development G4-8 9 – – Anti-corruption G4-9 8, 11, 50, consolidated financial – – Principle 10: Businesses should work against corruption in all its forms, Goals and Objectives by CSR Focus Area statements for the year 2016 including extortion and bribery Preventing and fighting corruption G4-10 8, 102 – 8 The interactive version of this Report provides a table demonstrating how the Company’s corporate social responsibility priorities (safety, environment and community) and activities relate to key international and domestic corporate social responsibility and sustainable development G4-11 57 – – standards, including ISO 26000:2010, GRI G4 aspects, UN Global Compact principles, UN Sustainable Development Goals, and RSPP Reference Performance Indicators. G4-12 65 – –
G4-13 16, 65, consolidated financial – – statements for the year 2016
G4-14 40 – –
G4-15 23, 34, 126, 130 – –
G4-16 60, 61, 66 – –
Identified Material Aspects and Boundaries
G4-17 12 – –
G4-18 127 – –
G4-19 128 – –
G4-20 128, 136, Appendix – The collection – – scope for material aspects GRI G4 in the interactive version of the Report
G4-21 127 – –
G4-22 126 – –
G4-23 126 – –
1 For the report’s External Assurance Statement, see a similarly named Appendix to the Report.
Corporate Social Responsibility Report 2016 Appendices Nornickel GROUP
General Standard Excluded information/ UN sustainable Excluded Disclosures Page comments development goal information/ UN sustainable Material Aspects DMA and Indicators comments development goal Stakeholder Engagement Specific Standard Disclosures G4-24 55 – – Category: Economic G4-25 55 – – Economic performance G4-26 55 – – DMA 49 – – G4-27 127 – – G4-EC1 50 – 8, 9 Report Profile G4-EC2 87 Risks posed by climate change are not measured financially – G4-28 126 – – G4-EC3 109 – – G4-29 126 – – G4-EC4 – The Group did not receive significant government grants – for the 12 months ended 31 December 2016 G4-30 126 – – Market presence G4-31 152 – – DMA 101 – – G4-32 131 – – G4-EC5 107 – 1, 8 G4-33 127 – – G4-EC6 103 – –
Governance Indirect economic impacts
G4-34 35 – – DMA 111 – – G4-EC7 112, 113 – 9 G4-35 36 – – G4-EC8 111, 123 – G4-36 32, 36, 71 – – Category: Environmental G4-37 36 – – Energy G4-38 37 – 16 DMA 94 – G4-39 36 – 16 132 G4-EN3 96 7 G4-40 36 – – G4-EN4 – Not assessed; disclosure not planned – G4-41 36 – 16 G4-EN5 – 7 G4-42 35 – – G4-EN6 96 – 7, 13 G4-43 36 – 4 G4-EN7 – Not applicable to the Company’s products 7, 12 G4-44 36 – – Water G4-45 35 – 16 DMA 86 – – G4-46 35 – – G4-EN8 89, 138 – 6 G4-47 37 – – G4-EN9 86, 138 – 6 G4-EN10 89, 140 – 6 G4-48 127 – – Biodiversity G4-49 37 – – DMA 90 – – G4-50 37 – – G4-EN11 90 – 15 G4-51 38 – – G4-EN12 90, 91 – 15 G4-52 38 – G4-EN13 92 – 15 G4-53 38 – – G4-EN14 – 15
G4-54 – Not disclosed for personal – G4-MM1 91 – 15 data protection reasons G4-55 – – G4-MM2 90 – 15 Ethics and Integrity Emissions
G4-56 21, 31 – 16 DMA 85 – – G4-57 44, http://www.nornik.ru/en/ – 16 G4-EN15 86 – 13 investor-relations/information- G4-EN16 – – disclosure/preventing-and- G4-EN17 – Reporting not required by law – fighting-corruption G4-EN19 – – G4-58 44, http://www.nornik.ru/en/ – 16 G4-EN18 86 – – investor-relations/information- disclosure/preventing-and- G4-EN20 86 Negligible emissions – fighting-corruption G4-EN21 8, 82, 140 – 3, 12, 15
Corporate Social Responsibility Report 2016 Appendices Nornickel GROUP
Excluded Excluded information/ UN sustainable information/ UN sustainable Material Aspects DMA and Indicators comments development goal Material Aspects DMA and Indicators comments development goal
Effluents and Waste Human rights
DMA 86, 88 – – Freedom of Association and Collective Bargaining G4-EN22 89, 140 – 6 DMA 55 – – G4-EN23 88, 140 – 3 G4-HR4 55 None – G4-EN24 90 – 3, 6, 14 Indigenous rights G4-EN25 – There are no such waste or waste transportation – DMA 63 – – G4-EN26 87, 138 – – G4-HR8 63 – – Environmental Compliance G4-MM5 63 – –
DMA 83 – – Supplier Human Rights Assessment G4-EN29 83 – – DMA 66 – – Transport Society DMA 92 – – Local Communities G4-EN30 93 – – DMA 111 – – Overall G4-SO1 111 Such programmes are implemented in 4 out of 72 (5.6%) Group – DMA 83 – – entities operating in Russia (the Company’s Head Office, G4-EN31 83 – 9, 12, 13, 14, 15 Kola MMC, Polar Division, and Nornickel – Shared Services Centre) within the report boundaries Supplier Environmental Assessment G4-SO2 85 – – DMA 67 – – G4-MM6 63 – – Environmental grievance mechanisms G4-MM7 63 – –
DMA 44 – – Anti-corruption 134 G4-EN34 44 No environmental grievances were filed – DMA 40 – – with the Corporate Trust Service in 2016 G4-SO3 43 – 16 Category: Social G4-SO4 42 – 16 Labour Practices and Decent Work G4-SO5 43 – 16
Employment Compliance
DMA 101 – – DMA 50 – – G4-LA1 104 – 8 G4-SO8 50 – –
G4-LA2 142 – – Supplier Assessment for Impacts on Society G4-LA3 No data on return to work and retention rates after parental leave – (by gender) due to the lack of centralised records DMA 67 – – Grievance mechanisms for impacts on society Occupational health and safety DMA 44 – – DMA 71 – – G4-SO11 44 – – G4-LA5 72 – 8 G4-LA6 74 No breakdown by gender for injury rates due 3, 8 Product Responsibility to the lack of centralised records Product and Service Compliance G4-LA7 75 – 3, 8 G4-LA8 72 – 8 DMA 46 – –
Training and education G4-PR9 48 – –
DMA 106 – – Sector Disclosures (Aspects)
G4-LA9 106 No breakdown by gender due to the lack of centralised records 4 Emergency preparedness
G4-LA10 106 – 8 DMA 77 – – G4-LA11 37 – – G4-MM3 88 – – Supplier Assessment for Labour Practices Shutdown plans
DMA 67 – – DMA 115 – – Labour practices grievance mechanisms G4-MM10 115 The IFRS financial statements reflect a decommissioning provision – for Polar Division, Kola MMC and Norilsk Nickel Harjavalta DMA 44, 58 – – (3% of the Group’s operations within the report boundaries). G4-LA16 44, 58 – – As at 31 December 2016, this provision stood at RUB 23,764 m
Corporate Social Responsibility Report 2016 Appendices Nornickel GROUP
Appendix 3. Identified Material Aspects and Boundaries (GRI G4) A G4–20
Complex Complex
Aspect materiality MMC Norilsk Trans- Other outside the Group Nickel’s Head Fuel and portation Foreign business units Category GRI aspect (in the supply chain) Office Exploration Metallurgy Research energy and logistics Support assets Sales of the Group
Economic Economic performance 1 –
Market presence 2 –
Indirect economic impacts –
Environmental Energy 3 –
Water –
Biodiversity –
Emissions –
Effluents and Waste –
Environmental compliance –
Transport –
Overall –
Environmental grievance mechanisms –
Social Employment 4 – 136 Occupational health and safety +
Training and education 5 –
Labour practices grievance mechanisms –
Freedom of Association and Collective – Bargaining
Indigenous rights –
Local Communities –
Anti-corruption +
Social compliance –
Grievance mechanisms for impacts on – society
Product and service quality compliance +
Closure planning –
Emergency preparedness +
1 As regards pension plans, the boundaries include only business units benefiting from the Co-Funded Pension Plan. Information is collected on all companies of the business block 2 As regards nationality, the boundaries include all business units of the Group. 3 As regards energy saving, the boundaries include Polar Division, Kola MMC and NTEK. Information is collected on key companies of the business block 4 As regards benefits offered to employees, the boundaries include only Polar Division and Kola MMC. 5 As regards staff assessment, the boundaries include only the Head Office, Polar Division, Kola MMC and Pechengastroy. The detailed table including the names of the Group’s companies and branches can be found in the interactive version of this report.
Corporate Social Responsibility Report 2016 Appendices Nornickel GROUP
Appendix 4. GRI G4 Specific Standard Disclosure Environmental performance
Total water withdrawal A G4–EN8
Including
Group’s total Polar Division and Norilskenergo NTEK Kola MMC
Indicator, mcm 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016
Total water withdrawal, incl. 332.40 352.78 351.96 348.52 328.44 88.77 86.48 95.02 102.49 96.41 252.96 277.43 274.00 267.87 249.93 35.48 35.92 30.16 27.93 35.53
from surface water bodies 244.35 267.33 258.93 254.92 230.45 0.03 0.01 0.02 0.02 0.02 226.89 250.44 242.84 239.21 216.68 14.43 13.76 13.04 12.84 12.39
from underground sources 26.10 27.02 31.16 28.66 33.24 0.00 0.00 0.00 0.00 0.00 26.07 26.99 31.16 28.66 33.24 0.00 0.00 0.00 0.00 0.00
wastewater from other organisations 15.96 15.22 21.07 21.15 15.42 10.21 9.77 15.38 15.48 9.78 0.00 0.00 0.00 0.00 0.00 0.20 0.24 0.13 0.12 0.11
natural water inflow 37.76 33.71 31.84 34.84 40.82 24.86 21.07 23.57 28.60 26.15 0.00 0.00 0.00 0.00 0.00 12.85 12.59 8.22 6.19 14.63
municipal water supplies and other water utilities (excluding NTEK) 8.25 9.51 8.96 8.94 8.51 0.08 0.00 0.00 0.00 0.001 0.00 0.00 0.00 0.00 0.00 8.00 9.33 8.77 8.79 8.40
from NTEK1 92.14 94.01 94.08 96.44 104.45 53.67 55.62 56.05 58.39 60.46 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
1 Included into the volume of water withdrawn by NTEK.
Water sources A G4–EN9, G4–EN26
Scale of impact associated with the Group companies’ Scale of impact associated with the Group companies’ 138 Branches and subsidiaries water withdrawals water discharges
Polar Division of MMC Norilsk Nickel Withdrawals from water systems (the Yenisei River, water Water bodies of the Yenisei River and Norilo-Pyasinskaya water bodies of the Norilo-Pyasinskaya water system and Kara Sea) system are used to discharge wastewater Polar Transportation Branch of MMC Norilsk Nickel do not affect the environment and cannot change the ability of the ecosystem to perform its functions Krasnoyarsk Transportation Branch of MMC Norilsk Nickel
Norilsknickelremont
ZSK
Norilsk Support Complex
Norilskgeologiya
TTK
Taimyrgaz
ERP
Norilsk Airport
NTEK
Norilskpromtransport
NTPO
Murmansk Transportation Branch of MMC Norilsk Nickel Withdrawals do not affect the water sources Wastewater is discharged into the water bodies (water bodies of the Barents Sea) of the Barents Sea Kola MMC
Corporate Social Responsibility Report 2016 Appendices Nornickel GROUP
1 A NOx, SOx, and other significant air emissions, including their type and weight G4–EN21
Air pollutant emissions
Including
Total amount NO2 SO2 Solids Branches and subsidiaries Indicator, kt 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016
Group’s total 2,097.58 2,097.03 2,088.27 2,063.52 1,936.44 9.52 12.13 12.13 9.84 10.12 2,044.21 2,032.85 1,947.58 2,009.11 1,877.97 19.20 20.63 23.09 20.67 14.3 Polar Division 1,938.49 1,912.03 1,828.09 1,883.24 1,787.57 1.43 1.57 1.61 1.64 1.52 1,908.01 1,881.06 1,797.18 1,853.92 1,758.18 8.89 9.98 9.68 8.95 6.18 NTEK 7.88 10.54 9.74 6.33 8.2 6.63 8.78 8.11 6.32 6.89 0.025 0.062 0.044 0.008 0.006 0.006 0.005 0.007 0.006 0.006 Kola MMC 148.58 164.62 165.44 169.79 132.9 1.12 1.15 1.12 1.18 1.12 136.06 151.58 150.20 155.05 119.72 9.74 9.98 11.76 10.61 7.38 1 Air pollutant emissions are determined on the basis of the Environmental Monitoring and Industrial Control data: emissions are calculated as per the applicable methodologies using data on feedstock and equipment running time, through sampling and analysing fuel gases, direct measurements with gas analysers, etc.
Percentage and total volume of the water recycled and reused A G4–EN10
Including
Group’s total Polar Division NTEK Kola MMC
Indicator, mcm 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016
Total amount of water used, incl. 1,319.50 1,347.96 1,417.80 1,421.41 1,463.81 563.94 564.32 567.04 574.17 533.67 535.49 569.59 634.12 634.9 719.02 178.77 172.18 175.38 171.32 170.52 Utility water 27.52 27.28 25.02 21.29 20.72 12.26 12.47 11.41 12.51 12.09 7.22 7.11 6.96 2.34 1.79 2.82 2.45 1.93 1.79 1.9 Production, incl. 1,292.33 1,320.69 1,392.75 1,400.12 1,443.09 551.67 551.84 555.63 561.66 521.58 528.28 562.47 627.15 632.56 717.24 175.95 169.72 173.45 169.53 168.62 water reused 38.71 39.37 39.41 40.13 36.73 37.32 37.39 37.38 37.7 34.43 0.92 0.88 0.93 0.89 1.03 0.00 0.00 0.00 0.00 0.17 water recycled 1,092.54 1,202.54 1,269.55 1,275.62 1,219.70 472.95 471.30 473.59 478.07 442.82 447.11 458.17 525.9 537.68 607.85 154.15 150.44 150.48 146.67 150.72
140 Percentage of reused and recycled water in the volume of water used, % 85.7 92.2 92.3 92.6 85.83 90.5 90.1 90.1 89.8 89.4 83.7 80.6 83.1 84.8 84.7 86.2 87.4 85.8 85.6 88.5 The Group’s total volume of reused and recycled water in the water withdrawal is 382.6%. This percentage is largest for Polar Division (495.0%) and Kola MMC (424.7%), and stands at 243.6% for NTEK and 38.1% for the Company’s other units.
Total wastewater2 and pollutant discharge A G4–EN22
Including
Group’s total Polar Division and Norilskenergo NTEK Kola MMC
Indicator, mcm or kt 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016
Total wastewater discharge, mcm, incl. 146.53 146.17 145.62 140.45 143.55 39.20 33.09 36.20 39.52 38.67 76.98 84.57 80.31 73.55 77.76 26.28 24.47 25.44 23.48 22.59 Insufficiently treated 30.23 30.09 30.90 29.58 29.81 6.37 5.81 5.94 6.01 6.42 0.00 0.00 0.00 0.00 0.00 23.50 24.06 24.60 23.48 22.59 Contaminated untreated 34.03 26.09 26.44 27.73 26.94 30.62 25.22 25.43 27.54 26.83 0.00 0.00 0.00 0.00 0.00 2.78 0.40 0.84 0.00 0.00 Treated to standard quality at treatment facilities 2.38 2.37 4.42 5.92 5.26 2.18 2.05 4.13 5.18 4.71 0.01 0.00 0.00 0.00 0.003 0.00 0.00 0.00 0.00 0.00 Standard clean (without treatment) 79.89 87.62 83.96 77.1 81.54 0.03 0.01 0.70 0.78 0.73 76.97 84.57 80.31 73.55 77.76 0.00 0.00 0.00 0.00 0.00 Pollutants discharged as part of the wastewater, kt 151.11 139.43 140.52 153.1 192.99 72.39 76.93 67.47 76.92 71.83 0.28 0.1 0.27 0.48 1 77.47 61.80 72.68 75.62 119.32
2 The volume of water discharge is measured instrumentally by certified gauges and is also based on the Calculation of Water Consumption and Water Discharge as approved by the territorial office of the Federal Water Resources Agency.
Total weight of waste by type and disposal method A G4–EN23
Waste management
Waste input from third-party Waste use at own Waste transfer to third-party Waste transfer to third-party Waste storage at own waste Waste treatment Branches Waste generation contractors3 facilities contractors (for use or treatment) contractors (for storage) disposal sites at own facilities3 and subsidiaries Indicator, mt 2012 2013 2014 2015 2016 2016 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 2016
Total, including 43.52 40.49 35.17 33.64 33.27 0.04 20.89 19.35 18.24 18.81 20.15 0.06 0.037 0.044 0.041 0.09 0.073 0.041 0.04 0.049 0.11 23.13 21.08 16.81 14.75 13.54 0.0003 Polar Division 31.55 26.39 23.07 22.27 22.57 0.03 15.87 12.96 12.13 13.22 15.18 0.028 0.026 0.027 0.024 0.03 0.048 0.041 0.04 0.049 0.07 16.23 13.38 10.84 8.99 7.88 0.0001 Kola MMC 11.93 14.10 12.10 11.37 10.61 0.00 5.02 6.39 6.11 5.59 4.97 0.015 0.011 0.017 0.017 0.01 0.0001 0.0002 0.0000 0.0003 0.0003 6.9 7.7 5.97 5.76 5.66 0.0002 3 Has been calculated since 2016.
Corporate Social Responsibility Report 2016 Appendices Nornickel GROUP
Waste management in 2016 by hazard class and waste type, t
Waste input Waste transfer Waste transfer from third-party to third-party contractors to third-party contractors Waste storage Item Waste generation contractors Use (for use or treatment) (for storage or disposal) at own disposal sites Treatment
Hazard class 1 71.9 0.9 2.0 69.0 1.1 0.0 0.0
Hazard class 2 5,813.5 0.0 5,791.0 17.3 1.1 0.0 9.0
Hazard class 3 29,861.1 1,426.4 28,194.7 2,503.9 113.1 572.0 167.0
Hazard class 4 1,113,548.0 16,085.5 2,689.4 238.9 54,938.0 1,090,048.1 69.0
incl. mining waste and tailings 1,014,449.0 0.0 0.0 0.0 0.0 1,014,449.0 0.0
Hazard class 5 32,118,369.1 17,876.1 20,114,973.6 85,694.8 59,932.7 12,445,749.7 54.1
incl. mining waste and tailings 27,195,659.1 0.0 14,953,842.7 0.0 0.0 12,241,816.4 0.0
Total 33,267,663.6 35,388.8 20,151,650.7 88,524.0 114,986.0 13,536,369.8 299.0
incl. hazard class 1–4 waste 3.5 – – – – – – (% of the total volume)
Social performance A G4–LA2
Benefits for full-time, temporary and part-time employees
Full-time work Temporary work1 Seasonal work
142 Benefits for employees of Polar Division Full-time work Part-time work Full-time work Part-time work Full-time work Part-time work Part-time work
Reimbursement of vacation travel expenses (incl. return fare) + + +2 +2 +2 +2 –
All kinds of financial aid + + + + + + +
Health resort treatment and vacations + + – – – – –
Vouchers for children’s wellness recreation tours + + – – – – –
Pension plans + + – – – – –
Termination benefits (apart from those prescribed by the applicable law) + + +3 +3 +3 +3 +3
1 Work under a fixed-term employment contract. 2 According to the collective bargaining agreement and local regulations, such categories of employees are not excluded from benefits; however, in practice, travel expenses are not reimbursed since no vacation is granted to such employees. 3 According to the collective bargaining agreement and local regulations, such categories of employees are not excluded from the reimbursement of expenses associated with relocation, it is practically possible. No severance pay is provided by mutual agreement.
Full-time work Temporary work1 Seasonal work2
Benefits for employees of Kola MMC Full-time work Part-time work Full-time work Part-time work Full-time work Part-time work Part-time work
Reimbursement of vacation travel expenses (incl. return fare) + + + + – – –
All kinds of financial aid + + + + – – –3
Health resort treatment and vacations + + + + – – –3
Vouchers for children’s wellness recreation tours + + + + – – –3
Pension plans + + + + – – +
Termination benefits (apart from those prescribed by the applicable law) + + + + – – –
1 Work under a fixed-term employment contract. 2 At Kola MMC, no seasonal work is carried out; employees do not work seasonally. 3 In-house employees doing bywork can be granted benefits by their primary employer.
Corporate Social Responsibility Report 2016 Appendices Nornickel GROUP
Appendix 5. List of abbreviations
AML/CTF Anti-money laundering / counter-terrorism financing JSC Joint-stock company
ASEAN Association of Southeast Asian Nations Kola MMC Kola Metals and Mining Company JSC
BRICS Five countries: Brazil, Russia, India, China and the Republic of South Africa Kola MMC JSC
CHPP Combined heat and power plant KPI Key performance indicators
CIMS Corporate Integrated Quality and Environmental Management System KPID Kola Peninsula Industrial District
CIS The Commonwealth of Independent States LTIFR Lost Time Injury Frequency Rate
CRMF Corporate Risk Management Framework MMC Metals and Mining Company
CSR Corporate and Social Responsibility NIR Norilsk Industrial Region
DMA Disclosure on Management Approach NPOs Non-profit organisations
EBITDA Earnings Before Interest, Taxes, Depreciation and Amortisation NTEC Norilsk-Taimyr Energy Company
EMERCOM The Ministry of the Russian Federation for Civil Defence, Emergencies and Elimination of Consequences of Natural Disasters OECD Organisation for Economic Cooperation and Development
EMS Environmental Management System OHSAS Occupational Health and Safety Assessment System
OJSC Open joint-stock company 144 EU European Union
FCSM Federal Commission for the Securities Market OOO Russian limited liability company
FFMS Federal Financial Markets Service OSCE Organisation for Security and Co-operation in Europe
FIFR Fatal-Injury Frequency Rate PGM Platinum group metals
FISU International University Sports Federation PJSC Public joint-stock company
FZ (FL) Federal Law PPE Personal Protective Equipment
GOST State standard RMRS Russian Maritime Register of Shipping
GRES District thermal power plant RSPP (RUIE) Russian Union of Industrialists and Entrepreneurs
GRI Global Reporting Initiative SCO Shanghai Cooperation Organisation
Group Nornickel Group SDG Sustainable Development Goal
HPP Hydropower plant TJ terajoule
IFRS International Financial Reporting Standards UN The United Nations
IISRC International Information Security Research Consortium UNESCO United Nations Educational, Scientific and Cultural Organization IPA International Platinum Group Metals Association UNICRI United Nations Interregional Crime and Justice Research Institute ISO International Organisation for Standardisation VAT Value added tax IT Information Technology Click here to access the interactive version of this Report IUCN International Union for Conservation of Nature
Corporate Social Responsibility Report 2016 Appendices Nornickel GROUP
Appendix 6. The Council on Non-Financial Reporting The Company is responsible for including the full shutdown of Nickel Plant Council on Non-Financial Reporting of the Russian Union of the Russian Union of Industrialists and the information and statements provided in 2016, to boost their environmental safety. of Industrialists and Entrepreneurs (RSPP) Entrepreneurs (the “Council”), established in the Report. The accuracy of the Report’s It describes measures taken to expand as per the Management Bureau’s Resolution information is beyond the scope of the public the range of products and services, and Opinion of the RSPP Council on Non-Financial Reporting on Nornickel dated 28 June 2007, reviewed, at verification procedure. improve their quality and safety. There is also Group’s 2016 Corporate Social Responsibility Report for the request of MMC Norilsk Nickel a description of the Company’s investment the purposes of public verification (the “Company”, the “Group”, “Nornickel”), This Opinion has been prepared for MMC projects, related priorities and expenses. Nornickel Group’s 2016 Corporate Social Norilsk Nickel. The Company may use it for It reports on the integration of information Responsibility Report (the “Report”). both corporate and stakeholder communica- technologies in the financial reporting tion purposes by publishing the original system and its rollout across the Company’s The Company requested the RSPP to version without any changes. subsidiaries, the corporate governance arrange for the public verification of the framework, key elements of the risk CONCLUSIONS Report, with the Council on Non-Financial management framework, and the approval of Based on the review of the Report and Reporting providing an opinion on the the respective policy. The Report lists CSR the information publicly available on completeness and materiality of the Report’s priorities, focus areas and objectives, the Company’s official website, and following information about the Company’s operations including those for 2017. It provides details a collective discussion of the results from the perspective of the Social Charter of on the Company’s Corporate Integrated of the Report’s independent assessment the Russian Business, which sets out key Quality and Environmental Management undertaken by the members of the Council principles of responsible business conduct. System (CIMS), implementation of the Health on Non-Financial Reporting, the Council and Safety Policy, and the process of From 15 May to 5 June 2017, the Council confirms as follows: confirming the CIMS compliance with members reviewed the content of the international standards across the Nornickel Group’s 2016 Corporate Social Company’s Report and passed this Opinion Company’s operations. The Report contains Responsibility Report covers the key areas in accordance with the Council’s Procedure information about corporate anti-corruption of responsible business conduct in for Public Verification of Corporate regulations and activities, including regular accordance with the principles set out in Non-Financial Reports. anti-corruption training for the personnel and the Social Charter of the Russian Business, employee surveys related to the efficiency The Council members possess all and provides sufficient information about 146 of the relevant measures. the required competencies in corporate the Company’s operations in relation thereto. responsibility, sustainable development Business partnerships and non-financial reporting, comply with The Report discloses information about the The recommendations made by the Council the ethical requirements for independence focus areas, tools and results of stakeholder following the public verification of and impartiality, and provide their personal engagement, including dialogues with Nornickel Group’s 2015 Report were duly expert opinion rather than the opinion stakeholders held by the Company while noted and incorporated into the 2016 of organisations they represent. preparing public reports. It describes Report. For example, the Company the initiatives to engage shareholders and The Report was assessed based provided a more detailed coverage foreign investors, while also giving details on on the following criteria of information of occupational health, safety and a number of agreements signed with federal completeness and materiality. stakeholder engagement in preparing and regional authorities, as well as large the Report. Russian and international non-profit Information is considered to be material if it organisations. These pertain to a variety of reflects the company’s efforts to implement The Company’s 2016 Report contains matters concerning the social and economic the principles of responsible business material information relating to the following development of the regions where the Group conduct set out in the Social Charter of the aspects of responsible business conduct. operates. The Report pays special attention Russian Business (see www.rspp.ru). Economic freedom to the Company’s efforts in ensuring Completeness implies that the company and responsibility employee health, safety, and professional provides a comprehensive overview of its The Report discloses information about development, and implementing corporate operations, including the underlying values and Nornickel Group’s core business segments, social programmes. Additionally, it covers strategic benchmarks, governance systems and products, footprint, and position in the the measures to support employees of structures, accomplishments and key results, domestic and foreign markets. The Report Nickel Plant due to its shutdown in the and the stakeholder relationship framework. dwells on the Company’s development reporting year, while also dwelling on the strategy updated in 2016, and sets out social partnership framework and collective The procedure for the public verification its strategic goals for ensuring sustainable bargaining practices. The Report gives of the Report factors in the Company’s development. It presents the Company’s a description of staff communication and application of international reporting financial and operational results, along with feedback channels in place at the Company, frameworks; this Opinion does not, however, key development projects. The Report including surveys, offices for operating, purport to assess the Report’s compliance contains information on the progress social and labour relations, the Corporate with such international frameworks. of the smelting capacities reconfiguration, Trust Service, and the annual corporate
Corporate Social Responsibility Report 2016 Appendices Nornickel GROUP
forum. It offers information on the Company’s reduction of the Group’s air emissions and Final provisions in addition to its objectives, provide contribution to developing specific regions used in management practices. The work to deliver high-quality products, water impact, as well as waste treatment Information in the Report generally reflects information on their implementation and and cities, as well as to the description of Company is advised to pay more attention questionnaire surveys of customer activities. The Report features information the Company’s consistent work towards the summarise its performance against the goals significant corporate events, which should to the assessment of social projects and satisfaction, procedures to monitor about the Company’s initiatives in respect of integration of corporate social responsibility and objectives across all material aspects. be more specific and move beyond a mere programmes, given the importance of this compliance with contract terms and review land rehabilitation, reproduction of aquatic and sustainable development principles into This approach will provide stakeholders with statement of facts. information for the stakeholders. complaints. The Report also contains details bioresources and biodiversity preservation. its business practices. The Report contains a broader insight into the Company’s about the Company’s procurement policy, It dwells on the development of the mid-term a significant amount of information about prospects and achievements. The Company should take into account that It is further recommended that the Company which aims to improve transparency and programme to improve energy efficiency in the Company’s impact on the society and the analytical value of the Report will provide more details on how its CSR targets access to procurement procedures, among the reporting year, and implementation of the environment, its strategy and policies in the The Report discloses material information increase if it includes detailed comments on correlate with the Sustainable Development other things by inviting bids via independent Fuel and Energy Development Strategy key focus areas, and the effect of the related relating to the approaches to sustainable the indicators, especially in case of Goals of the UN 2030 Agenda, while also bidding platforms. It mentions pilot testing of along with the Programme to Upgrade, programmes. It covers the main focus areas development and corporate social significant changes thereof. emphasising its contribution to achieving the automated system for the supplier Revamp and Replace the Norilsk Industrial and formats of stakeholder engagement, responsibility management. To ensure a these, including solutions to specific It is recommended that the Report feature relationship management and discloses data District’s Power Facilities. It also lists energy including those used in preparing the Report. more complete disclosure going forward, the challenges. a more extensive disclosure on the on contractors’ compliance with the HSE consumption and saving indicators. The Company is advised to give more detailed The Report was prepared using internation- responsibility across the supply chain and The RSPP Council on Non-Financial requirements during work. The Report Report provides details on the Company’s information on the KPI system, with a special ally and domestically recognised reporting contractor interactions, and specify the ways Reporting hereby takes a positive view of describes the Company’s membership in cooperation with nature reserves adjacent to emphasis on sustainable development and tools (e.g. the GRI G4 Sustainability the corporate HSE standards apply to MMC Norilsk Nickel’s Report, supports the international and Russian public organisa- its key production sites. It describes the corporate social responsibility KPIs. Reporting Guidelines, Comprehensive contractors, relevant controls, achievements Company’s commitment to responsible tions, and participation in international, corporate volunteer environmental marathon option, GRI G4 Sector Disclosures and the It is further advised that the Company and further plans. business practices, notes consistency in national and regional events. It also hosted by the Company’s regions of RSPP Key Performance Indicators), which provide more cases to support developing the reporting process, and highlights the fact that the Company joined operation, and the awards received by the ensures comparability of the Group’s the information on the material aspects The Report describes corporate tools to confirms that Nornickel Group’s 2016 the United Nations Global Compact and Company for its environmental performance. information with that of other Russian and of its CSR activities and the associated assess the performance of social pro- Corporate Social Responsibility Report has signed partnership agreements with international companies. The Report is also management approaches. In particular, this grammes. In future, it would be appropriate passed the public verification procedure. the Russian Olympic Committee and the Contribution to the development in line with the UN Global Compact and 17 applies to the disclosure of the Company’s to add a description of how these tools are International University Sports Federation. of local communities The Report gives a detailed account of Sustainable Development Goals of the UN Human rights the Company’s contribution to the social and 2030 Agenda. The Report’s structure, key The Report emphasises the Company’s economic development of local communities. topics and material disclosures were defined 148 commitment to human rights in accordance It highlights the Company’s standing as a based on the contributions from stakehold- with the international regulations and the major taxpayer, employer, and contributor ers, with the relevant selection criteria Chair of the RSPP Council laws of the countries of operation. In this included in the Report. to regional and federal social, sports and on Non-Financial Reporting Fyodor Prokopov respect, the Report focuses on labour rights infrastructure development programmes. The 2016 Report is the Company’s thirteenth and the prevention of any discrimination. It The Report refers to the social and economic non-financial report, which demonstrates its proclaims equal employment, professional cooperation agreements between the determination to consistently develop Deputy Chair of the RSPP Council development and career growth opportuni- Company and the government agencies reporting processes and enhance on Non-Financial Reporting Elena Feoktistova ties predicated exclusively on employee across its footprint, including those signed transparency. The Company uses various skills. The Report indicates that the in the reporting year. There is also a forms of independent assessment and Company’s position on human rights is description of the key regional social and confirmation of disclosed information reflected in a number of its by-laws. It gives economic projects implemented thereunder. (professional audit and public verification). account of the Company’s initiatives to It reports on the Company’s participation This reflects the Company’s commitment to ensure protection of employees’ personal in drafting Norilsk 2030, a strategy for keeping stakeholders informed and maintain- information and observance of their social the social and economic development of ing the high quality of disclosures. and economic rights, including those with the Norilsk Municipality, and in the Norilsk respect to safe and comfortable working Development Agency project. It also dwells RECOMMENDATIONS conditions, social security, education, family on the Company’s social programmes aimed While acknowledging the Report’s strong welfare and housing. It also describes the at urban development and support of social points, the Council calls attention to some Company’s efforts to protect the rights of the entrepreneurship, charity, and volunteering. aspects of disclosures’ materiality and indigenous minorities residing across its In particular, the Report focuses on the World completeness, which should be addressed regions of operation, preserve and develop of New Opportunities, the Company’s key in the future reporting cycles. their culture and traditions. charitable initiative. It lists the performance assessment tools for the Company’s social The Council notes that the previous Environmental protection programmes. The Report discloses data on non-financial report recommendations The Report presents the Company’s tax and non-tax payments to budgets of remain valid and good for use going forward. environmental protection priorities, various levels, and on the financing of social, environmental management and environ- The Report features the Company’s goals charitable and social infrastructure mental risk management frameworks. It and objectives for its CSR activities. It is programmes. provides data on environmental expenses recommended that in the next reporting and performance, while also covering cycles, the Group disclose specific plans for the initiatives that resulted in a significant the mid-term and the next reporting period,
Corporate Social Responsibility Report 2016 Appendices Nornickel GROUP
Appendix 7. External Assurance Statement
150
Corporate Social Responsibility Report 2016 Contacts
Contacts
Svetlana Ivchenko, Head of the Social Policy Department MMC Norilsk Nickel A G4-5, G4-31
Address: 15, 1st Krasnogvardeysky Drive Moscow 123100 Russia Tel.: +7 495 786 8320 Fax: +7 495 755 6737 Email: [email protected]
facebook.com/NornickelRU/
twitter.com/NornikOfficial
vk.com/nornik_official
152 youtube.com/user/NornikOfficial
instagram.com/nornickel_official
feeds.feedburner.com/nornik/AIDB
norilskfilm.com/ Norilsk through the eyes of its residents
CorporateCorporate SoSoccial Reessponponsisibilitybility Reeportport 2016