ǶǨǶ SIBUR Holding Social Report for 2008 Our Development Continues 2009 1 The World Around Us...................................................................................................... 4 Statement by the Chairman of the Board Alexander Dyukov and SIBUR President Dmitry Konov ............................................................................................................................ 5 About the Company. ....................................................................................................... 6 SIBUR – 2008: Social Profile ............................................................................................ 7 SIBUR and the Global Economic Recession.... 8 Consumption Crisis.......................................................................................................... 8 Global Problems.............................................................................................................. 9 Domestic Background...................................................................................................... 9 SIBUR’s people speak...................................................................................................... 9 SIBUR’s anti-crisis policy.............................. 11 Rolling With the Punch .................................................................................................. 11 Mobilization Model ........................................................................................................ 13 The Crisis Chronology.................................................................................................... 14 Adjusting the Investment Program ................................................................................. 17 SIBUR’s people speak.................................................................................................... 19 Personnel Development................................ 23 Being More Effective ..................................................................................................... 23 Growth of Wages and Salaries ....................................................................................... 25 Protecting the Standard................................................................................................. 26 Health Care.................................................................................................................. 27 Sports.......................................................................................................................... 27 Own Home................................................................................................................... 28 Collective Agreements ................................................................................................... 28 Career Opportunities ..................................................................................................... 29 New People .................................................................................................................. 30 Becoming the Best........................................................................................................ 30 Improving Competence ................................................................................................. 31 Corporate Sociology ...................................................................................................... 32 Red Dates .................................................................................................................... 33 Sign of Recognition ....................................................................................................... 34 Corporate Code ............................................................................................................ 34 SIBUR’s people speak.................................................................................................... 35 Programme of Social Initiatives ................... 38 Helping the Right Way................................................................................................... 38 “Small-scale Assistance” ................................................................................................ 38 SIBUR Alleys................................................................................................................. 39 Chemical Knowledge ..................................................................................................... 39 Personal Initiative ......................................................................................................... 40 Our Safety Is Our Life ................................... 41 Collective Value ............................................................................................................ 41 Inspections and Outcomes............................................................................................. 43 Stars of Safety.............................................................................................................. 43 SIBUR’s people speak.................................................................................................... 44 Environmental Practice ................................ 46 Greater Benefit ............................................................................................................. 46 Systemic Contribution.................................................................................................... 47 2 Green Certificate........................................................................................................... 48 European Regulations ................................................................................................... 49 SIBUR’s people speak.................................................................................................... 49 3 The World Around Us In today’s world, man relies on petrochemical processes hidden from view by fences of production plants. He keeps performing familiar tasks and using objects without giving a second thought as to their nature. Man-made materials, for instance various plastics and plastic goods, synthetic rubber have become pervasive. We deal with petrochemical products when we speak on the phone, get into a car or a subway wagon, buy packaged food and water in plastic bottles, turn on a computer or a TV set, withdraw money from an ATM, in fact just by living. Though not obvious to a layman, the relationship between creature comforts and the development of petrochemistry becomes stronger with each passing year. Man keeps building and improving his artificial environment based on natural raw materials. Among other things, petrochemistry is based on associated petroleum gas (APG), a by- product of oil extraction. Left unprocessed, it would burn in oil rig flares destroying a non-renewable resource and vastly damaging the environment. Utilizing APG is a major environmental function performed by petrochemical companies. SIBUR is Russia’s major processor of associated petrochemical gas. To this end it builds and upgrades production facilities, implements projects to convert carbohydrates into high value added products, primarily polymers and plastics. The company’s mission is to make people’s life more protected and comfortable while easing the burden on the environment and using natural resources in the most efficient manner. 4 Statement by the Chairman of the Board Alexander Dyukov and SIBUR President Dmitry Konov Dear reader! SIBUR Holding is presenting its third social report. The last few years were highly successful for SIBUR: the company demonstrated robust financial and production performance. The Group actively developed corporate social programmes and kept raising wages. However petrochemistry has been hit hard by the global economic crisis. In the fourth quarter of 2008 the Company found itself in an unprecedentedly complex situation. We were forced to cut wages dramatically, focus on operational efficiency, and revise our investment programme. The situation could not but affect the Group’s social policy, making the crisis and the company’s response the main themes of this report. Our major achievement is that we have managed to maintain the key social indicators: we did not cut wages, we have retained the key personnel, and have continued with the basic social programmes. In the coming years it is essential to consolidate the progress and to move forward. We shall continue to implement and develop our social programmes despite the unfavorable industry cycle and global economic problems. It is important to not roll back the industrial safety policy as a value for all SIBUR personnel. SIBUR has entered the crisis as a close-knit professional and mobilized team capable of rolling with the punch and clearing the space for continued development. The company will thus continue with its consistent strategy of developing the resource base and creating new production facilities. In these difficult times the company has made a special effort to communicate. By reporting to its personnel and partners about achieving the goals of sustainable development SIBUR demonstrates its openness to dialogue and confidence in the future. 5 About the Company SIBUR1 is a major Russian petrochemical company producing over 100 different products. The Group’s production chain includes gas processing, production of monomers and polymers, plastics and rubber, mineral fertilizers and tyres. The Group brings together 34 Russian enterprises in 3