HSE Performance of contractors

Viktória Márton

GHSEA14 November 2007

Content

► MOL Group HSE Policy

► MOL Group HSE performance 2007

► Contractors’ HSE performance 2007

► MOL Group HSE expectations 2008

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MOL Group HSE Policy

The HSE Policy is the highest Group level committment in our Health, Safety and Environment Management and applies to all our business Units, controlled subsidiaries and contractors as a basis for setting theirHSE targets, objectives and programs.

„Health, safety and environmental protection (HSE) is an integral part of the management philosophy of MOL Group. Considering HSE matters as any core business issues enables us to implement our corporate values and to achieve business excellence following the same approach wherever we do business.”

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MOL Group HSE Policy

to continuously improve our HSE performance,

to have a preference for suppliers and business partners complying with our HSE policy and standards, especially in case of long term partnerships,

to communicate openly

MOL Group HSE performance H1 2007

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KPI for MOL Group

Target 2007

H1 2007

Actual 2007*

Forecast 2007

Status evaluation

Fatality 0 1 1 1 No fatal accident of MOL Group employee & contractor / fatality of 3rd party (fatality of 3rd party (SNSNTrans)Trans)

LTIF 1,8 1,12 - 1,36 Below year-end target, but winter season coming

LTI 47 14 30 34 (indicative figure only!) one serious event (E&P)one serious event (E&P)

Fire cases 15 6 9 9 Damage deriving from fires reached 45000 EUR Damage deriving from fires reached 45000 EUR

TROIF 0 0 0 0 No reported occupational illness in the Group

RAR 2,5 2,25 - 2,4 Yearly target is achievable

Hazardous waste

80 000 tons

23 963 - 80 000 Target set for 2007 is achievable (normal operation & emergency cases)

Actual 2007* = Week 39 (end Q3)

** = w** = withith/ w/ withoutithout near misses & road near misses & road accidentsaccidents

Main causes of MOL Group LTIs in H1 2007

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• 37% of LTIs are derived from maintenance, 37% of LTIs are derived from maintenance, 28% from pedestrian traffic at MOL Group out of 14 LTIs in H1 2007

37%

14%

14%

7%

14%

14%

Maintenance

Operating and servicing of machines, equipment, technologies, facilities

Vehicle traffic at depots or at technological facilities

Pedestrian traffic in buildings

Pedestrian traffic within technological

facilities

Other

Contractors’ HSE performance 2007Number of Lost Time Injuries

0

5

10

15

20

25

30

35

2005 2006 2007*

LTIs

7

•Till 19 October 2007

► Early warning: Time proportionate contractor LTI figure is nearly the same as 2006 data

► Contractors’ has almost the same number of injuries as MOL Group employees

► No serious contractor injury in 2007

Contractor LTI with high injury potential 2/1

► On 23.08.2007. employees of a contractor and its two subcontractors were eliminating an illegal drainage on product pipeline near Balástya village, when the trench wall fell down covering a subcontractor employee fully and a main contractor employee partially.

► Antecedents:

► Surroundings of the drainage was excavated by dredger on 21 August

► Size of the trench was 3x4x2,5m, there was a dirt road and a channel near the trench

► Due to 10 bar overpressure the employees did not start repairing the pipeline

► The incident:

► The work restarted 2 days later (23 August)

► The side wall of the trench slid burying two employees

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Contractor LTI with high injury potential 2/2

► Causes:

No backslope was prepared because:

► the employees intended to save the nearby channel and dirt road and

► The days before this work they worked in smaller (90cm deep) trenches where backslope construction was not first priority

Work should have not been allowed in the trench

► Corrective action:

► Internal regulation was prepared for earth works (detailing responsibilities)

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Contractors’ HSE performance 2007

10

Number of non-Lost Time Injuries

0

5

10

15

20

25

2005 2006 2007*

NLTIs

► The same trend as in LTIs

•Till 19 October 2007

Contractors’ HSE performance 2007

11

Fires

0

1

2

3

2005 2006* 2007**

Fires

* In 2006 a tank explosion was caused by contractor work, this incident was NOT classified as contractor fire case

**Till 19 October 2007

MOL Group Strategic HSE Goals 2006-2010

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HEALTH

• Execute Workplace Health Promotion Program for at least 75% of MOL Group employees by 2010

SAFETY

• Lost Time Injury Frequency (LTIF) target for MOL Group to be in first quartile among peer group or at least to be < 1 by 2008

• By implementing defensive driving culture, Road Accident Rate (RAR) target for MOL Group by 2008 is to be in first quartile among peer group

• HSE pre-qualification of all key contractors by 2008 (to have the same HSE performance at contractors as in MOL Group by 2010)

ENVIRONMENT

• Decrease amount of known (end Y2004) environmental provision-based liabilities by 90% till 2015

• Development of standardised waste management practice with reducing waste quantities and increasing ratio of reuse and recycling

• Achieve integrated water management (with focusing on protection of freshwater resources)

• Optimize greenhouse gas emissions and support the increase of renewable energy utilisation

GOVERNANCE

• Establishment and operation of Sustainable Development Framework in the Group

• Compliance with Group HSE standards at high risk businesses by 2010

• Move company HSE culture towards generative approach

• Set up HSE leading indicators for Group level and all business segments by 2008

Group HSE Objectives & Targets for 2008

► Health protection:• No work related fatal accident in MOL Group (staff, contractors and 3rd

parties)• Total reportable occupational illness frequency (TROIF) equal to zero• Each business unit contribute to get involved at least 40% of employees in

workplace health promotion program

► Safety • Lost time injury frequency (LTIF) no more than 1.0• Road accident rate (RAR) not more than 2.3• Incident inquiry should reach at least 80%• Long term suppliers (beyond 1 year) should be HSE pre-qualified • Each business unit should set and apply at least one Process Safety leading

indicator

► Environmental protection:• Each business unit should set Waste Management leading indicator• MOL Group’s environmental liabilities as known at the end of 2007 should be

reduced by 6.0 bn HUF in 2008• Reduce CO2 emissions by 1% as a direct result of GHG reduction initiative(s). • Reduce Group level fresh water intake by 10%