Sustainable Development Report Contents INTRODUCTION FROM THE CHIEF EXECUTIVE OFFICER . .5 ABOUT THE REPORT General information . .8 Definition of report contents . .8 Report quality assurance . .10 Definition of report boundaries . .11 INTRODUCTION Sustainable development and corporate social responsibility – essential components of Sakhalin Energy’s strategic development . .12 Sustainable development and corporate social responsibility, use of international standards . .14 ABOUT SAKHALIN ENERGY Management structure . .16 About Sakhalin-2 . .18 Company mission, core values and business principles . .19 Corporate culture . .22 SOCIAL AND ECONOMIC BENEFITS OF SAKHALIN-2 PROJECT FOR THE RUSSIAN FEDERATION AND SAKHALIN OBLAST General . .23 Financial benefits for the Russian Federation . .24 Russian content . .25 MAIN PRODUCTION AND BUSINESS ACHIEVEMENTS Startup of gas production in the Lunskoye field . .27 Inauguration of the LNG plant . .28 Essential completion and status of facilities . .30 Well drilling programme . .34 Implementing plans to produce and export hydrocarbons . .35 New phase of project financing . .37 STAKEHOLDER ENGAGEMENT Stakeholder engagement strategy and principles . .38 Stakeholder engagement in 2009 . .39 Community liaison officers . .39 Company information centres . .41 Community grievance procedure . .41 Engaging Sakhalin indigenous peoples . .41 Interaction with NGOs . .42 Engaging Japanese stakeholders . .42 2 2009 Sustainable Development Report MANAGING NON-FINANCIAL RISKS IN HEALTH, SAFETY, ENVIRONMENT, AND SOCIAL ISSUES General principles of managing non-financial issues . .44 Structure and content of managing non-financial risk . .44 Hazards and risk management . .45 Objectives and annual improvement plans . .46 Audits and inspections . .46 Corrective and preventive actions . .46 Management reviews . .46 ENVIRONMENTAL PROTECTION, ECOLOGICAL AND INDUSTRIAL SAFETY Policy . .48 Goals and performance . .48 Industrial environmental monitoring . .49 Waste management . .49 Biodiversity . .50 Training and awareness . .61 Monitoring and follow-up . .61 HUMAN RESOURCES MANAGEMENT AND DEVELOPMENT HR management and HR policy approaches . .62 General . .62 Labour safety and protection . .63 Protecting the health of personnel . .65 Housing policy . .66 Recruitment, motivation and assessment . .66 HR training and development . .68 SOCIAL INVESTMENT AND CONTRIBUTION TO REGIONAL SUSTAINABLE DEVELOPMENT Company principles and approaches to Social investment and sustainable development . .70 Development of the regional social infrastructure . .71 Social investment and sustainable development programmes supported by Sakhalin Energy . .72 Sakhalin indigenous minorities . .75 2010 plan . .78 EXTERNAL REVIEW OF THE REPORT . ..