SUSTAINABLE DEVELOPMENT REPORT 2018 SahalinReport2019ENG_079withCover.indd 1 4/8/19 11:08 AM SUSTAINABLE DEVELOPMENT REPORT 2018 SahalinReport2019ENG_079withCover.indd 2-3 4/8/19 11:08 AM 1. Message from the Chairman of the Committee of Executive 7.2. Financial Benefits to the Russian Federation and the Sakhalin 9.5.3. The Safety Is Important Programme ..........................................149 Directors and Chief Executive Officer of Sakhalin Energy...................5 Oblast................................................................................................................................80 9.5.4. Hurry Up for Good Deeds Programme 7.3. Russian Content .........................................................................................................81 (Support for Charitable Initiatives of Employees) ..............150 2. About the Report .........................................................................................................9 9.5.5. Korsakov Partnership Council 7.4. Supply Chain Management ..............................................................................82 2.1. General Information ................................................................................................10 for Sustainable Development ........................................................151 7.5. Vendor Development Programme ................................................................83 9.5.6. Sakhalin Indigenous Minorities Development Plan .........152 2.2. Principles of the Report Content and Quality Definition .................11 9.5.7. Silhouette Magic by Semyon Nadein 2.3. Defining Material and Priority Topics to Be Included in the 8. Environmental Impact Management ...........................................................85 (a Cultural Project) .................................................................................153 Report ...............................................................................................................................12 8.1. General information ...............................................................................................87 9.5.8. Special Projects Dedicated to the Year of Volunteers in 2.4. Definition of the Report Scope ........................................................................17 8.2. Industrial Environmental Control ....................................................................88 the Russian Federation .......................................................................156 2.5. Public Endorsement of the Report.................................................................17 8.2.1. General information ...............................................................................88 10. 2019 Plans. 8.2.2. Impact on Atmospheric Air ................................................................88 Development Strategy up to 2023 ...........................................................157 3. Corporate Social Responsibility 8.2.3. Impact on Water Bodies .......................................................................89 and Sustainable Development .........................................................................19 8.2.4. Waste Management ................................................................................89 APPENDIX ..................................................................................................................................159 3.1. Introduction..................................................................................................................20 8.2.5. Energy Production and Consumption .........................................91 8.2.6. Greenhouse Gas and Ozone-Depleting Appendix 1. 3.2. Sakhalin Energy’s CSR System ...........................................................................21 Substance Emissions...............................................................................92 GRI Standards Compliance Table..................................................................163 3.3. Performance Standards .........................................................................................22 8.2.7. Utilisation of Associated Gas in Production..............................93 General Standard Disclosures .........................................................................164 3.4. Sustainable Development Policy ....................................................................23 8.2.8. Environmental Protection Costs and Payments for the Specific Standard Disclosures .........................................................................164 3.4.1. Key Provisions of the Sustainable Development Policy ....23 Negative Impact ........................................................................................95 Sector Disclosures (in Addition to General and Specific Standard Disclosures) .............................................................168 3.4.2. UN Sustainable Development Goals ..........................................24 8.3. Environmental Monitoring and Biodiversity Conservation ..........96 3.5. HSE and Social Performance Management ..............................................26 8.3.1. General Information ................................................................................97 Appendix 2. 3.5.1. HSE and Social Performance Management System ..........32 8.3.2. Soil Monitoring ...........................................................................................97 Comments and Suggestions of Stakeholders on Individual 3.5.2. Impact Assessment ................................................................................32 8.3.3. River Ecosystems Monitoring ............................................................98 Aspects, Indicators and/or Programmes and The Company’s 3.5.3. Inspection and Audit .............................................................................34 8.3.4. Flora and Vegetation Monitoring .................................................99 Response and Commitments .........................................................................174 8.3.5. Wetlands Monitoring ...........................................................................101 Appendix 3. 4. About the Company ...............................................................................................35 8.3.6. Monitoring of Protected Bird Species .......................................102 List of Participants of the Stakeholder Engagement Meetings 4.1. Sakhalin Energy ..........................................................................................................37 8.3.7. Steller’s Sea Eagle Monitoring .......................................................102 Held during Preparation of the 2018 Sustainable Development 8.3.8. Monitoring of Marine Biota and Its Environment ..............103 Report ............................................................................................................................175 4.2. Main Production Results in 2018 ....................................................................38 8.3.9. Ballast Water Control .........................................................................105 4.2.1. Assets ..............................................................................................................39 Appendix 4. 8.3.10. Gray Whale Monitoring and Marine 4.2.2. Development Projects ...........................................................................39 Useful Links ...............................................................................................................180 Mammal Protection ..............................................................................105 4.2.3. Hydrocarbon Production and Export ..........................................46 Appendix 5. 8.4. Pipeline Right-of-Way Maintenance .........................................................106 4.3. Continuous Improvement Programme .....................................................47 Company’s Information Centres List ..........................................................182 8.5. Oil Spill Prevention and Response Preparedness ..............................108 Appendix 6. 5. Corporate Governance ..........................................................................................49 8.5.1. General Information ..........................................................................109 Feedback Form .......................................................................................................185 8.5.2. Oiled Wildlife Rehabilitation ............................................................109 5.1. Company’s Mission, Vision, Values, and Principles ................................51 Appendix 7. 8.6. Sanitary Protection and Safety Zones .....................................................110 5.2. Corporate Governance System and Structure ........................................52 Certificate of Public Endorsement ...............................................................187 5.3. Corporate Governance Model ..........................................................................52 9. Social Impact Management ............................................................................111 Appendix 8. Conclusion on the Results of the Review of Sakhalin Energy 5.4. Risk Management .....................................................................................................54 9.1. Personnel: Management and Development ........................................113 2018 Sustainable Development Report by the RUIE Non- 5.5. Corporate