ANNUAL REPORT 2017

Health and Safety

1. Vision, policy, goals

Progress in Health and Safety is one of Severstal’s key performance indicators.

The Company’s Health and Safety policy, approved by the Board of Directors, sets the guidelines for safe operations across the business. The policy has six fundamental principles:

  • Safe working conditions
  • Health and Safety management
  • Systems for monitoring and reporting hazards
  • Safe and responsible employee conduct
  • Compliance with best practices in Health and Safety
  • Health and Safety information must be clear and straightforward

Severstal’s Health and Safety policy is set and constantly reviewed by a designated Board Committee which sets the Company’s Health and Safety strategy. Severstal is committed to ensuring its operations are safe and aims to constantly reduce the number of employee accidents and eliminate fatalities. In order to achieve this goal, the Company continuously invests in improving safety across its operations, in line with global best practice.

2. Results of work

In 2017, the lost time injury frequency rate (LTIFR*) was 0.96.

* LTIFR stands for Lost Time Injury Frequency Rate. All figures exclude Severstal North America and PBS Coals.
** Excluding the mine accident in February 2016.

3. Health and Safety initiatives

Since the launch of Severstal’s Labour Safety project in 2011 and its incorporation into the business system, the Company has achieved a significant reduction in injuries in Russian Steel (which represents 60% of the Company’s employees). Since 2016, the Company’s labour Safety tools have been consolidated under the safety Framework and extended to the activities of the entire Severstal group.

The Labour Safety tools have been developed to identify hazards and educate workers, to ensure they operate safely and respond effectively to dangerous situations, including security breaches. The project is structured around three areas: providing safer working conditions, training and engaging employees. An essential element of the Labour Safety project is a comprehensive audit and analysis, which allows Severstal to monitor and compare standards and practices across the business and continuously improve the Company’s Health and Safety performance.

Part of the safety training involves live demonstrations aimed at improving safety awareness among employees and supporting a culture of safety across the workforce.

One aspect of the Labour Safety project involves psychometric testing, incorporating the use of polygraph testing. By running psychometric tests the Company is able to identify the level of risk posed by individual employees and anticipate any potentially dangerous behavioural tendencies. The testing is carried out consistently across all of the Company’s departments to address risks at every level.

In order to assess and monitor the effectiveness of the Labour Safety systems at our sites, Severstal runs audits for the Accident Prevention System (APS) arranged by specialists from the Labour Protection Service. Production managers are incentivised to improve safety levels in line with the APS system objectives.

Every division within the Company has a system which monitors information received from employees. This ensures that incidents are efficiently registered and analysed.

4. Key safety investments in 2017

The company invested about 1,651 million rubles to ensure labour safety. Among the largest investments:

– The programme to reduce the injuries while walking by foot (SRS – 22.8 million rubles);
– Programme to improve the level of protection in emergencies (SRS, Metiz – 25.1 million rubles);
– The acquisition of safety equipment (Karelsky Okatysh – 222.4 million rubles, Olkon – 565.0 million rubles);
– Industrial safety systems in the Vorkutaugol mines – 785.2 million rubles.