Health, safety and environmental (HSE) policy

Our HSE policy provides a solid basis for our long-term success and leadership in business.

We aim to prevent environmental pollution, make efficient use of the power and natural resources we consume, reduce greenhouse gas emissions, and employ efficient waste management practices.

There are no circumstances which justify non-compliance with safety requirements, neglect of the health of our employees or damage to the environment. Work safety is a must within Severstal.

Health and safety program

Over the last three years the occurrence rate of industrial injuries at Severstal has reduced more than twofold.

In 2010, we embarked on a large long-term project named Labour Safety, aimed at steadily reducing the occurrence rate of industrial injuries.

The project calls for the implementation of an efficient labour safety system to make it possible to change the culture of industrial safety, from that of management supervision, to personal commitment from all employees.

In 2010, we launched the project at Cherepovets Steel Mill, and by mid-2012 it should be implemented in the whole Russian Steel Division.

The idea of the Labour Safety project is that we change the culture of industrial safety by implementing consecutively three major principles: providing safe labour conditions, getting employees involved in safety policies, and teaching safe behaviour. Each of these includes special tools or detailed procedures, such as:

• evaluating the risk of missions
• troubleshooting and low cost operations procedure
• setting labour safety goals for all management levels, and motivation
• a system for identifying and adjusting hazardous conditions by auditing industrial operations safety, and also through a behavioural safety audit
• an updated system for investigating accidents and micro trauma
• an updated system for training and mentoring programmes (allowing work to be done independently)
• a communications programme promoting safe behaviour;
• a labour safety roles and responsibilities matrix
• an updated system for dealing with those who fail to observe labour safety rules.

We envisaged that all managers will be trained and individually coached in these procedures, and will use them in their everyday operations.

The project also provides for a number of investment programmes: higher standards of sanitary amenities for employees, purchase of modern and quality personal protective equipment, repairs to, and construction of, pathways in the plant compound, installation of safety signs, etc. These will be implemented everywhere.

Environmental protection

In 2010, we spent over US$70.0 million on environmental protection measures, continuing the following:

• energy saving and reducing greenhouse gas emissions
• reducing atmospheric emissions of pollutants
• water supply and waste water treatment
• solid waste management.

Implementing the long-term energy saving programme has made it possible for the Cherepovets Steel Mill to reduce energy consumption in 2010 by 2.9% compared to 2009. At the same time, steel production rose by nearly 16%. This was due to a number of projects, for example, the large phased investment project, Automated System for Energy Resources Control and Management – Interdepartmental Accounting totalling over US$13.5 million. We completed the fourth of five phases in November 2010 and the fifth is scheduled for completion in 2011.

The project’s goal is to exercise control of the energy consumption of our major production units and, consequently, analyse them and take appropriate measures to reduce non-production costs.

The atmospheric air protection programme aims to renovate the gas-cleaning systems for three naphthalene presses (partially completed in December 2010), and also to modernise gas cleaning of the suction systems in the central ferroalloy storage area (work is done in two phases: we completed the first phase, involving the drier drums section, in November 2010, and the second phase covering the crushers section will be completed in the second quarter of 2011).

The construction of a new filtering unit for advanced waste treatment in the Cherepovets Steel Mill long product shop is nearing completion. The unit, once commissioned, will make it possible to meet appropriate cleaning standards for facility No.10.