Open joint-stock company «BYELORUSSIAN STEEL WORKS — management company of «Byelorussian metallurgical company» holding» PROGRESS REPORT on social responsibility and corporate sustainability 2016 OPEN JOINT-STOCK COMPANY «BYELORUSSIAN STEEL WORKS – MANAGEMENT COMPANY OF «BYELORUSSIAN METALLURGICAL COMPANY» HOLDING» REPORT on activity in the area of sustainable development for 2016 ZHLOBIN 2017 Content Preface to the report 5 General Director’s Appeal 6 Description of the enterprise 8 General information 8 Business approach 12 Strategy and goals in the area of sustainable development 14 Enterprise’s approach to sustainable development 14 Principles of strategy implementation 14 Management of sustainable development 16 History of sustainable development 18 Participation in external initiatives 31 Interaction with stakeholders 31 Interaction with the community 32 Interaction with mass media 33 Interaction with authorities 34 Interaction with science 35 Process of determination of essential subjects 37 Indicators of effectiveness in the area of sustainable development 38 Financial-economic activity 38 Economic effectiveness 39 Key indicators 40 Profit 40 Payment to the owner 40 Taxes and compulsory payments 41 Enterprise’s risks 41 Investment risks 41 Industry risks 41 Country and regional risks 42 Legal risks 43 Industrial safety, labor protection and ecological risks 43 Financial support by the government 43 Market presence 44 Indirect economic impacts 45 Medium-term targets of the plant 46 Information on achievements and awards 47 Environmental activity 50 Environmental policy 50 Key principles and approaches 50 Implementation of the ecological strategy 51 Minimizing the plant’s impact on the region’s vital activity 51 Minimizing of the plant’s impact on flora and fauna 52 Efficient use of natural resources 56 Efficient use of energy resources 56 Air basin protection 58 Water basin protection 62 Utilization of industrial wastes 64 Training 66 Improvement of ecological culture of the personnel 66 Development and implementation of resource-saving, low-waste and environmentally safe technologies 67 Expenses for environment protection and monitoring. Ecological payments 67 Medium-term targets of the Company 68 Social activity 70 Labor relations and adequate labor 70 Personnel management policy 70 Key principles and approaches 71 Description of the personnel 72 Employees rights 75 Professional and career development 76 Training and education 77 Motivation system 82 Material stimulation 82 Non-financial incentives 86 Short-term targets in the area of social responsibility 87 Labor protection and ensuring of industrial safety 87 Improvement of labor conditions 89 Training and competence evaluation 91 Social control of observance of human rights in the area of labor protection 91 Health protection 92 Effectiveness of medical and health promotion programs 94 Social package of privileges and guarantees for employees 95 Health promotion and rest time of the employees and their families 97 Physical culture and sport development 97 Cultural life of the plant employees 98 Solving of employees housing problems 101 Support for large families 102 Social support of unemployed pensioners, invalids and other categories of people not sufficiently provided for 102 Social partnership 103 The trade union organization of OJSC «BSW – management company of «BMC» holding 103 Primary organization RPO «Belaya Rus» 106 Primary organization PO BRYU 106 Veterans’ union 109 Women’s union 109 Union of soldiers-internationalists 111 Union of young specialists 111 Union of foremen 112 Union of physical training and sport 112 Monitoring of public opinion about social programs effectiveness 112 Responsibility for the goods produced 114 General provisions 114 Product life cycle 115 Customer’s health and safety 117 Product marking with appropriate information 118 Marketing communications 118 Mutually beneficial cooperation with consumers of the plant’s products 119 Mutually beneficial cooperation with suppliers 121 Annexes Aims of the enterprise for medium-term outlook 124 List of abbreviations 125 General standard reporting components of GRI (G4) 127 Specific standard reporting components 129 Feedback questionnaire 133 Notes 134 YELORUSSIAN STELL WORKS Preface to the Report This Report on the plant’S actiVity in the area of The Report is prepared in conformity with the general sustainable deVelopment for 2016 (hereinafter Version of reporting according TO GRI G4 Guidance. referred TO as “the Report”) prepared by Open CONTENT AND SIGNIFICANCE OF THE REPORT Joint-Stock Company “Byelorussian Steel Works – Management Company of “Belorussian Metallur- Taking into consideration the approach recom- gical Company” Holding is the ninth Report of the mended by GRI G4, the process of determination of enterprise. Maintaining the tradition of sustainability the Report Content was carried out in compliance reporting, the enterprise confirms its readiness for with the principles of significance, coVerage of the an open dialogue with the stakeholders. BSW imple- stakeholders, deVelopment sustainability conteXT and ments the obligations undertaken and follows the completeness of the information disclosure. TO de- chosen course of improVement and reorganization in termine the Report conteXT and TO form its content, all directions: management of sustainable deVelop- the enterprise carried out assessment of important ment, economic actiVity, work with the staff in the topics in correspondence with the reQuirements of area of social actiVity of the enterprise in the region GRI Guidelines. Topics and Questions disclosed in and cooperation with suppliers and customers, and the Report are Considered IN THE REPORTING policy of enVironmental and industrial safety. significant in terms of their influence upon actiV YEAR THE ENTERPRISE The Report discloses the plant’S achieVements in BSW - ity and interests of the key STARTED TO USE GRI, the area of sustainable deVelopment. Its priority is- stakeholders: customers, VERSION G4 TO REPORT sue is BSW actiVity directed towards production of suppliers, employees, au- ON SUSTAINABLE Quality goods, proVision of safe and adeQuate labour thorities and local commu- conditions for the employees, decrease of the eco- DEVELOPMENT. nities. Special attention is logical impact and promotion of healthy way of liVing. paid TO deVelopment of the projects of the national SCOPE OF THE REPORT and regional leVel in the Report; compleX informa- tion about implemented initiatiVes aimed at improVE- The enterprise adopted an annual report cycle. ment of ecological efficiency of the production is This Report reflects the results of BSW actiVity in presented, labour protection and industrial safety the period from January 1, 2016 till December 31, issues are disclosed in detail as well as personnel 2016 including main approaches TO achieVement of and social policy and interaction with local communi- the goals and task fulfillment as well as plans and ties and suppliers of the plant. goals of the Organization. Electronic Versions of the Reports can be found on our corporate web-site SO as TO maintain A constructiVE dialogue with all belsteel.com. The Report does not contain informa- interested parties, the plant Values EVery opinion tion regarding joint-Ventures and the enterprises about its actiVity in the area of sustainable deVelop- located outside the Republic of Belarus. ment. That is why contact information and A feedback form are giVen in the report. EssENTIAL CHANGES IN THE REPORT Your opinions and proposals regarding the form and This Report does not Key implemented ar- content of the Report as well as Questions may be contain any essential rangement that helped sent TO: [email protected] or TO the postal changes of the in- to strengthen the enter- address: formation disclosed prise’S image are marked in the preVious re- Open Joint-Stock Company “Byelorussian Steel with the sign “NOVELTY” ports of the plant. Works – Management Company of “Belorussian Met- in the Report. Economic indicators allurgical Company” Holding (OJSC “BSW-Manage- are giVen in US dollars corresponding TO the AVerage ment Company of “BMC” Holding), 37 Promyshlen- annual rate of the National Bank of the Republic of naya str., Zhlobin, Gomel region, 247210, Republic Belarus EXisting in 2016 EQualed TO BR1,9885. of Belarus. SOCIAL REPORT 2016 5 General Director’ message DEAR FRIENDS! results of the first Quarter showed that BSW managed to achieVE positiVE dynamics thanks to I’M glad to acQuaint you with the Report of OJSC well-organized work of the team of employees. “Byelorussian Steel Works – management company AS A result, the enterprise completed 2016 with of “Byelorussian Metallurgical Company” holding A positiVE profitability. AS regards Volume of pro- in the area of sustainable deVelopment for 2016. duction, the plant produced 2,2 million of steel This Versatile document contains comprehensiVE in 2016. IT is far from our maXimum achieVement information about our enterprise’S actiVity. Tak- (2,7 mio T), but in the EXisting circumstances this ing into consideration reQuirements of the global performance is worthy of respect. Considering practices, we prepare this report EVery year to these figures we may say that BSW steel melt- help our business partners and representatiVes of ing capacity was loaded to OVer 80% in 2016. BE- other interested audiences to form an idea about sides, the production capacity utilization factor in BSW operation, its potential and prospects. steel making