HSE Report 2006

Helge Hoff (pictured) is one of around 5,300 employees worldwide who have a clear stake in our HSE performance.

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contents

Jotun A/S will enhance long-term

competi tiveness and financial performance

through a responsible approach, attitude,

and actions regarding Health, Safety and

Environment.

All of Jotun’s activities shall: • prevent work-related illnesses • promote employees’ physical and mental health • protect life and property • prevent pollution

Jotun’s HSE visionOrganisation of the HSE work 4

Editorial Morten Fon, President & CEO 5

Jotun’s HSE standard 6

Editorial Ken Gudvangen, Group Environmental offi cer 7

Humanitarian aid 8

R&D policy 10

Safety and preparedness 12

Paint and powder coating production 14

Paint and powder coating chemistry 17

Environment 18

Working environment 20

Internal audits 22

HSE related costs 23

The Jotun Board of Directors has overall responsibility for HSE activities and approves budgets, strategies and guidelines.

The President & CEO devises the groups HSE policy, approves Jotun’s HSE standards and proposes budgets for operations and investments.

The Group Executive Vice Presidents for the divisions, company managers and operations managers are responsible for effecting and monitoring Jotun’s HSE standards and local regulations via regular reporting and compilation of action plans.

The Jotun group’s technical director develops and maintains the group’s HSE standards. The Group Technical Director reports to Group Executive Vice President Jotun Paints.

Local HSE coordinators and HSE personnel assist with the daily monitoring of HSE activities at the factories.

Responsibility for HSE

HSE is a management responsibility in Jotun. The HSE organisation assists with controls,

expertise and reporting.

THE BOARD

PRESIDENT & CEO

DIVISIONS

GROUP TECHNICAL DIRECTOR

hse work

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JOTUN’S HSE WORK

HSE measures form a natural part of manage-

ment responsibility at Jotun, and are part of the

day-to-day work of all employees.

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editorial

Taking responsibility for HSE

Strengthening our continuous efforts to ensure Jotun workplaces are safe, our employees

remain healthy and that we as a group minimise our impact on the environment remains

the responsibility of all of us.

As a global company with operations on six continents, the Jotun Group has a responsibility to care for its employees, wherever they work. And because we have 67 companies, 40 production facilities and agents and branch offices in more than 70 countries, establishing uniform safety standards remains a challenge. While the Jotun Group has established global safety standards and remains active in encour-aging all employees to adopt them, we rely on local managers to implement these standards.

To support these local managers, we have made some changes in how we approach Health, Safety and the Environment. In 2006 the man-agement team received a comprehensive update on Health, Safety and Environmental data twice a month so that we could verify our progress. In addition, we have changed how our audit teams work. Previously, Jotun audit teams visited specifics sites, identified poten-tial risks and produced a report. In 2006 we took steps to strengthen the participation of these audit teams in training programmes.

We believe that we can be more effective if we provide local employees with the skills to take more responsibility for the condition of their workplace, and we can improve our performance.

We are also sensitive to the environmental impact Jotun has in areas where we operate. Every year we produce tonnes of solvents in the manufacture of our paints and recognise that the production of powder coatings impacts on air quality. But we also influence the environ-ment in indirect ways, from the energy we use in our production and office facilities, to the resources we consume during the production and transportation of our coatings. We are working constantly to find ways to minimise the negative impact Jotun has on the environment.

While the Jotun Group will continue to invest in the development of new initiatives to improve our performance in all areas, we recognise that our success in this area relies on the active participation of each and every individual.

President & CEO Morten Fon, here with Jotun employee President & CEO Morten Fon, here with Jotun employee Linda Bru, has a direct responsibility for HSE at Jotun.Linda Bru, has a direct responsibility for HSE at Jotun.

HSE standardJotun’s HSE standard forms the basis for the group’s systematic HSE programme. This shall be a solid foundation for Jotun’s long-term competitive strength and financial results.

Work on the HSE standard started in 1994, and in 1998 it was intro-duced throughout the group’s factories. HSE reporting and internal controls and audits are carried out in accordance with the same guide-lines throughout all of Jotun’s production units.

HSE accountsJotun compiles annual accounts on health, safety, use of resources and environmental pollution.

The purpose of the HSE accounts is to monitor the performance of the group, to compare group results with other companies of a similar

Systematic programme

Following the acknowledgement last year that the underlying data used in the preparation

of the HSE report was subject to some uncertainty, a number of regional meetings were held

during 2005, with the aim of improving the precision and credibility of HSE reports.

• Jotun Operations Academy, which will improve knowledge of HSE in

Jotun, has been established. The fi rst academy will take place in early

2007.

• Our insurance partner has audited 14 of our factories, raising

awareness of safety in the Jotun Group.

• Jotun approved a revised chemical policy in the second half of 2006.

hse standard

nature and to provide information both internally and externally about the group’s effects on people and the environment.

Jotun’s reports are based on statutory Norwegian requirements and include the most important effects on the environment.

The HSE accounts cover a total of 39 factories:• 5 factories in Jotun Dekorativ • 12 factories in Jotun Paints • 11 factories in Jotun Coatings • 11 factories in Jotun Powder Coatings

In 2005 figures from Jotun Paints Inc., USA, were missing. They are now included in the historical data and deviation from figures published in 2006 occurs.

• We have introduced 5S in some of our factories, and this has already

shown results.

• We have contributed to several humanitarian operations – part of an

effort to demonstrate Jotun’s commitment to social responsibility.

• Jotun has approved and implemented business principles.

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HSE HIGHLIGHTS 2006

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Lean principles and HSE

Fortunately, HSE legislation worldwide is becoming increasingly more homogenous

and consistent. Through our audits we have seen a stronger focus from officials on HSE matters

and harmonised HSE legislation.

It is vital in HSE work to acknowledge the significance of continuity and regular training as basic elements that improve the physical and the psycho-social working environment. This work needs to be carried out and monitored by dedicated managers and specialists.

Our future as a leading manufacturer of paints and powder coatings is dependent on our performance on HSE issues. By resolving that HSE will not take a back seat to economic growth, Jotun is determined to have a responsible attitude with respect to health, safety and the environment.

Jotun is drawing more attention to and putting more effort into Lean manufacturing. Lean manufacturing means optimising all resources, focusing on the elimination of waste to ensure customer satisfaction. Some of our production units have worked this way for a long time; others have just begun to implement this philosophy. 5S is a tool that focuses on effective organisation of the workplace. It simplifies the work process, improves housekeeping and reduces waste, while

editorial

improving quality and safety. There is no conflict between Lean manufacturing, 5S and HSE.

Preventive maintenance is a crucial component both in Lean manu-facturing and HSE. We are drawing attention to this and working to establish a standardised global maintenance system.

Environmental soil assessments have become ever-more important; Jotun performed several of them in 2006. These assessments help us to identify any potential sources of environmental risk or liability at a property. Historically, we know that industrial activity contaminates soil, and this is also the case for Jotun.

Contaminated land and incorrect handling of hazardous chemicals introduce financial risks to our operations. Obvious costs include environmental soil assessments and treatment to re-establish soil quality; a less obvious cost is the added difficulty of selling this land compared to selling uncontaminated sites.

Ken Gudvangen, Group Environmental Officer, Ken Gudvangen, Group Environmental Officer, opens a cover for groundwater tests. These are taken opens a cover for groundwater tests. These are taken in connection with soil studies at Jotun facilities.in connection with soil studies at Jotun facilities.

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Jotun teams up with the IFRC

In large and small projects, in practical and financial ways, in countries from China to Lebanon

and Sudan, Jotun has contributed to the humanitarian relief efforts of the IFRC. It is an

expression of our commitment to health, safety and the environment, as well as of our focus

on social responsibility.

Halvor Fossum Lauritzsen, Head of International Department in the Norwegian Red Cross, has led relief efforts from Thailand (the tsunami disaster) to Darfur in Sudan. An expert advisor to the UN, he knows a thing or two about humani tarianism, responsibility and co-operation. Here he discusses how Jotun’s work with The International Federation of Red Cross and Red Crescent Societies (IFRC) contributes to a safer, more humane world.

“We appreciate greatly that Jotun supports us financially with their paints, when these are necessary, and in other concrete ways. They are always positive and willing to lend a hand when there is a need,” says Lauritzsen during an interview in his office in down-town Oslo.

He draws particular attention to Jotun’s ongoing efforts to provide first aid training and equipment to coal miners in the Shanxi province of China. “Often a huge field hospital will make less of a difference than appropriate training and equipment where it’s needed. Jotun’s work with the Red Cross to train coal miners in first aid will have a tremendous impact in terms of lives saved,” says Lauritzsen.

Common values“After visiting the project in Shanxi province, we decided to use the Red Cross to provide first aid training to our employees at Jotun’s new factory outside Shanghai in China,” said Jotun’s Group Vice President Communication Elisabeth M. Støle. “Ever since Jotun was founded 80 years ago, health, safety and the environment have been priority areas for us.”

The IFRC (using the Red Cross, Red Crescent or Red Crystal symbols) has at its core a mandate based on the Geneva Conventions, which serve as binding instruments of international law and give the organisation its independent and neutral humanitarian mission. Its mandate is signed by 177 nations.

“Wherever you go in the world, we are there,” says Lauritzsen. “We are on the scene to protect civilians, monitor conditions and provide relief. Because of our mandate, many countries and companies see us as the ideal partner for humanitarian support.”

Ongoing co-operation and humanitarianism“We are an organisation that relies greatly on volunteers and good will. We depend on private companies as partners to finance and support our humanitarian operations,” says Lauritzsen. “Jotun is an example of a multi-national company that we work closely with, and each Jotun location can be in contact with a local Red Cross or Red Crescent centre to help each other out.”

Lauritzsen mentions several of Jotun’s efforts to support and assist the Red Cross in China and elsewhere. “Companies like Jotun are attracted to the IFRC as an organisation that they can trust – a good, stable humanitarian actor. And, by helping our efforts, Jotun demonstrates its commitment to communities and safe living and working conditions worldwide.”

humanitarian aid

Jotun’s Shanghai factory is one of the safest and most advanced of its

kind in China. But coal mines in the country average seven work-related

casualties every day. Together with the Red Cross, Jotun has set out to

make a difference by investing in fi rst aid training and equipment for

the coal miners – an approach considered the most effective means of

saving lives and improving conditions. The goal is to train one in every

30 workers in fi rst aid. By November 2006, as many as 20,000 coal

miners will work with a colleague trained in fi rst aid. Emergency fi rst aid

kits have also been placed strategically throughout the mines. Thanks to

the efforts of Jotun and the Red Cross, more workers will return home

safely from their workplace.

Halvor Fossum Lauritzsen

MAKING A DIFFERENCE IN CHINA

Miners wait to go underground in the Sima coal mine near the city of Changzhi, China’s west Shanxi province. The Sima coal mine produces about 10,000 tons of coal per day with around 1,300 employees. The Chinese government has vowed to close all small coal mines operating without proper safety standards in the next two years.

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We want to be pro-active in terms of reducing high-risk chemicals in the Jotun Group.

No substitute for knowledge

By continually reviewing our use of raw materials and chemicals, we in Jotun R&D ensure

that our paints satisfy industry standards and our own high expectations for safety, with

respect to our employees, our customers and the environment.

Bent W. Haflan is the Director for Research and Development in the Jotun Group. He is responsible for our corporate strategic R&D development and reports directly to Jotun’s top management on ques-tions related to the raw materials used by the group.

Why does Jotun have a hazardous chemicals policy?“We are obliged by law to assess the risk of all the raw materials that we use. There is also an international principle that hazardous chemi-cals should be replaced with less hazardous chemicals whenever possible.”

“Even if the use of a chemical is not restricted by law, we want to be pro-active in terms of reducing high-risk chemicals in the Jotun Group. By linking specific high-risk chemicals with specific policies under the direct responsibility of group management, we ensure that our focus on safety and environmental performance has top priority.”

How does Jotun manage its use of raw materials in R&D?“First of all, the chemists and other employees at Jotun’s ten labora-tories all over the world are frequently in dialogue with our Group Toxicologist who evaluates the health and environmental risks of both new and existing raw materials.“

“Evaluations of some specific hazardous chemicals are presented directly to the Jotun Group’s top management for a decision on the proposed chemical policy. In this way, we ensure that Jotun has a common approach to product safety and HSE issues worldwide.”

How does Jotun handle hazardous raw materials?“As Jotun aims to improve its products, our laboratories regularly look for new raw materials. Some hazardous raw materials will not be used, some are in the process of being phased out, and for some raw materials we impose our own restrictions.”

r&d policy

“In total, a product may contain as many as 40 to 50 different substances deriving from 20 to 25 different raw materials. Our development laboratories are free to use any raw materials that are approved by the Jotun Group, unless there are some national restric-tions. We try to be pro-active with respect to new information on hazardous properties of the chemicals we use, and respond with the explicit goal of reducing risk for our employees, customers and the environment.”

Can you give an example of a hazardous chemical that Jotun has substituted?“Yes. Alkylphenol ethoxilate is a raw material that has been in common use in water-based paints for many years. It is a kind of soap that manages to disperse or spread materials evenly in the paint. We decided that Jotun would phase this raw material out of production in the EU and replace it with other, non-hazardous soaps. It required us to develop a whole new range of 16 new colorant formulations, but we decided that it was worth it.”

“Another important policy initiative was the Jotun Group’s decision to phase out aromatic amines from all of our products by the end of 2006. These substances posed a health risk, and we decided to develop alternative solutions. In all, we have decided to phase out a small handful of different substances on a global basis, and placed restric-tions on many others.”

How does Jotun contribute to setting the framework conditions regarding the use of hazardous chemicals?“We are a body entitled to comment on forthcoming legislation and guidance documents, and are active in a number of multi-national bodies, including CEPE (Conseil Européen de l’Industrie des Peintures, des Encres d’Imprimerie et des Couleurs d’Art) and IPPIC (The International Paint and Printing Ink Council). There we partici-pate in expert groups that advise policymakers on hazardous chemi-

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Bent W. Haflan

cals, and work to establish common framework conditions for the paint industry.”

“Europe is among the strictest regions in the world when it comes to restrictions on the use of chemicals. Compliance with these strict regulations means that we are well prepared for developments in other parts of the world. A new EU regulatory framework for chemi-cals called REACH (Registration, Evaluation and Authorization of Chemicals) will come into force on 1 June 2007. In Jotun we will have one person dedicated to follow up on REACH.”

What will happen further within Jotun on this issue?“Along with a clear policy on the evaluation and use of hazardous chemicals in our products, we require satisfactory documentation from our raw materials suppliers. Correct HSE data from our suppli-ers is a necessity so that we can evaluate substances and inform our employees and customers of possible adverse effects. Identification of high-risk chemicals will continue and, as long as restrictions are not put on them by regulatory bodies, we will make our own chemical policy decisions. We will also continue to seek out alternative solu-tions, when appropriate, and work for a common position on hazard-ous chemicals through multi-national bodies.”

The use and handling of chemicals are regulated (restricted or

prohibited) by national or international laws and agreements. Jotun

must be in compliance with these regulations. Jotun has also found

it appro priate to take a pro-active approach regarding hazardous

chemicals. The chemical policies resulting from this approach will be

updated on a regular basis. Examples of decisions taken in 2006 are

to phase out the use of:

• Aromatic amines by 31 December 2006

• Lead oxide (Red Lead) by 31 December 2006

• Zinc tetraoxy chromate by 31 December 2006

• Carbendazim by 31 December 2007

• Coal tars by 31 December 2009

JOTUN GROUP HAZARDOUS CHEMICALS POLICY

Jotun Dekorativ has developed waterborne paints for interior use

that are among the best on the market in terms of low emissions.

These products are good alternatives for persons susceptible to indoor

air climate. This is just one instance of HSE factors infl uencing new

product development.

LOW-EMISSION INTERIOR PAINTS

r&d policy

“Our vision of safeguarding life and property, and protecting the environment will be maintained through the Jotun Group’s chemicals policy, which has its foundation in and support from the highest level of management.”

Chemists at Jotun’s ten labs work with a group toxicologist who evaluates risks associated with new and existing raw materials. Pictured: Merethe Sandve, Developmental Engineer, Jotun R&D.

12 www.jotun.com

safety and preparedness

Site security and training

Jotun continues to make significant investments to increase awareness of the dangers

of static electricity. Fire-related incidents in 2006 were handled professionally and quickly,

thanks in part to ongoing efforts at fire prevention and fire-fighting.

Security and safety are essential in the entire chemical industry, which needs to be prepared for a wide range of threats and incidents, such as intoxicants, organised crime, violence in the workplace and even ter-rorism. In order to manage security risks Jotun needs to evaluate which measures to take at any given time.

Active learningIn 2006 Jotun continued the important training of all staff at its production facilities worldwide on the issues of earthing and static electricity. Earthing and static electricity are the biggest challenge Jotun faces in terms of guaranteeing the safety of its employees and property. Jotun has therefore stepped up the training in these areas. In 2006 6,100 hours of preparedness training were carried out, as compared to 5,900 hours in 2005. This represented, on average, 10 hours of training each for 624 people in the organisation.

Specific incidents in 2006There were five serious incidents that occurred in 2006 which resulted in fire breaking out. None of these involved static electricity. Using the knowledge and expertise the employees had, they were able to tackle the incidents quickly, averting the risk of major fires.

Jotun is active in the area of fi re prevention measures. This includes

providing employees with training, fi re-resistant facilities and personal

protective equipment.

The correct fi re-detection system and fi re-fi ghting equipment are vital

for preventing and limiting the scope of a fi re.

Fire-detection and fi re-fi ghting systems shall be activated automatically.

Foam-based extinguishing equipment shall be used at factories

manu facturing solvent-based products.

Any conditions which result or could result in any damage to the

environment or personal injury shall be treated as non-conformities.

These conditions must be rectifi ed in order to prevent any recurrence.

This applies to incidents involving fi res, near fi res and accidental

emissions of chemicals.

FIRE PREVENTION MEASURES

The outbreak of fi re is regarded as the greatest risk factor at Jotun’s

plants. Preventive measures against fi re and explosions are therefore

given high priority in order to prevent personal injuries and damage to

property. Site security is another area in which improvements are

being made.

FACTS

Correct fi re-fi ghting equipment is vital to preventing and limiting the scope of a fi re.

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production

Paint production

We normally think of four stages in paint and varnish production, and the sequence they

come in is important.

PremixingIn the first stage pigments, extenders, binders and solvents are accu-rately weighed and mixed.

DispersionDispersion is important for the quality of the product and this process can be subdivided into: a) Moisturising: The air that surrounds the pigments and extenders is replaced by binders. b) Grinding: The interconnection between pigments in lumps (agglomerates) must be ground so that each pigment can be moisturised. This is done in machines with cutting and grinding functions. c) Stabilising: Once the moisturising and grinding stages of the dis-persion process have been completed, the mixture must be stabilised. Binders are added to the mixture.

AdjustingThis is the stage where the paint is prepared for use. The mixture is drained into large tanks and binders and additives previously not included are added. The final step is to adjust the colour and viscosity.

FillingBefore the product is filled into tins it goes through a quality control inspection. The most common checkpoints are: Size of grain: Checks whether the pigments and extenders have been ground finely enough. Viscosity: Checks the paint’s consistency and suitability for appli-cation.Sagging: Checks the thickness of the film that can be applied without the paint starting to drip (sagging). Specific weight: Checks whether all the right raw materials have been added.

Depending on the type of paint, other criteria are checked such as colour and drying time.

Pigments

Binders

Solvents

Additives

Failed batchproduction

DISPERSIONMoisturizingGrindingStabilizing

PREMIXING FILLING /MIXING TANKSLet downColor adjustment

EMISSION TO AIRSolventsDust

WASTEFailed batch productionWashing solubles• Water dilutant• Solvent based

RESULTPaint

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production

Powder coating production

The production of powder coating is quite different from paint production,

but can technically be divided into the same stages.

PremixingThis is the same as the first stage in paint production, where the raw materials are accurately weighed and then mixed.

CompoundingThe premix then goes into an extruder where it is melted. This is the second stage and is described as compounding. The pigments are treated to form a homogenous dispersion, which is subsequently discharged from the extruder. It is difficult to adjust the colour after this stage.

Cooling and flakingThe hot melt then has to be cooled, which is done by passing it through cooled rollers.

The final operation in the cooling stage is to break the extrudate into small flakes using rotating hammers.

Milling and classificationThe final stages of the manufacturing process are milling and classi-fication. The flakes are ground into a fine powder with a specified particle size range.

The milled powder is transferred from the mill on an air stream designed to ensure that oversized particles drop down for return to the milling chamber.

Collection The milled/classified powder is then transferred to a collection chamber. This may be a cyclone in which powder falls to the bottom while air is exhausted from the top, filtered and then exhausted into the atmosphere or a bag filter system.

MIXER

MILL

PRE-MIXER

AirBindersPigmentsHardenerAdditives

RESULTPowder coatings

WASTEDustProduct waste

EMISSION TO AIRDust

DISCHARGE TO WATERWashing water

Water

Classifier

Cyclone

Dustfilter

Cooling conveyor /crusher

Production of powder coatings, as here from Jotun’s powder coatings factory in Dubai, can involve contact with substances that pose long-term health risks. Pictured: Mr. Subhash Mhavalingkar, Junior R & D Chemist.

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SolventsSolvents are only used in paint and not in powder coatings. Solvents are the liquids that carry the solid components in paint. They must be present to ensure the paint is of the correct consistency for application by brush, roller or spray.

Paint is divided into solvent based paint, using organic solvents like mineral spirit, and in water based paints.

Pigments The pigments used in paint and powder coatings are normally present as fine solid particles that are dispersed, but not soluble, in the binder and solvent. The pigments contribute to colour and opacity (hiding powder) to the paint and protect the binders and substrate from UV degradation.

ExtendersExtenders are natural or synthetic minerals like talc, clay, etc., which are evenly dispersed in the paint. The particles come in different sizes and shapes. In powder coatings it is important that the extender is heat resistant.

BinderThe binder or resin is one of the most important components in paint and powder coatings, and can be thought of as the glue which holds

the pigments together and sticks them to the surface. In paint it is the basic solid film former that remains after the solvent has evaporated, and which binds the pigment particles together into a cohesive paint film.

The binder determines many of the necessary film properties such as adhesion, gloss level, hardness, abrasion resistance, flexibility, drying speed and durability.

AdditivesAdditives are the specialised components used in paint and powder coatings that give them their final performance and characteristics.

For example in paint, they provide UV protection, inhibit tannin staining, inhibit corrosion, protect the film against mould growth, ensure good flow and levelling.

HardenerIn powder coatings and two component paint, the hardener is used to cross-link the resin at a given temperature.

The degree of cross-linking can also be adjusted to determine the gloss level, degree of surface and other aspects, including structure and texture effects.

Paint and powder coating chemistry

Every Jotun product contains a number of chemicals and materials, each of which contribute

to the qualities of the finished product. This presentation describes the key elements of Jotun

paints and powder coatings, and how they work together.

chemistry

18 www.jotun.com

environment

Production waste Jotun’s production waste consists mainly of packaging materials, such as cardboard, paper, plastic and metal. National return schemes are becoming more widespread, and where these are established Jotun’s activities will also be covered.

Waste and the treatment of waste cost money, and Jotun is committed to reducing the volume of waste and the costs related to waste. Production planning is the key to reducing waste. The washing of production facilities and the generation of waste are reduced to a minimum by increasing the size of production batches.

The total waste volume from Jotun’s factories was 14,700 tons in 2006. This was 3.1 per cent of the production volume, compared with 2.9 per cent in 2005.

Hazardous wasteHazardous waste at Jotun consists mainly of process water and solvent-based waste. Process water is formed as a reaction product from the production of binders. The largest volumes of solvent-based waste result from washing the production equipment. This waste is recycled to a large extent in production. Hazardous waste can also be

Effective production planning

Jotun’s HSE Vision makes clear our intent to prevent pollution, protect life and property

and act responsibly with respect to our environmental impact. We monitor our production

of waste and hazardous waste, energy consumption and emissions to air and water.

a result of production errors or returned goods. 5,000 tons of hazard-ous waste were generated at Jotun’s factories in 2006, equivalent to 1.0 per cent of production volume, which is the same percentage as in 2005. Jotun aims to reduce the proportion of hazardous waste in rela-tion to the production volume.

Contaminated sitesA number of our plants have been operating in the same location for a long period of time, or are located in areas previously occupied by other manufacturing operations. It may also be the case that substances and chemicals were used in the past that are not standard or acceptable today.

Surveys have been conducted at a number of plants, and initiatives have been implemented where the authorities have demanded this. We cannot rule out that contaminated sites may exist at several of the plants. We are particularly aware of such conditions when purchasing and selling production plants. Where we suspect contamination, investigations are undertaken to determine the extent of the problem and to clarify whether measures for avoiding pollution are necessary. Assessments and measures are carried out by external specialists.

EMISSIONS TO AIR

Emissions to the air from Jotun’s factories are mainly linked to the

production of solvent-based paints. These emissions are caused by

evaporation from the production of paints and binders. In 2006 Jotun

used 59,700 tons of solvents in production. This increase of 3,900 tons

from 2005 was mainly caused by the increased production volume.

DISCHARGE TO WATER

Washing of production equipment is the main cause of discharge/waste

from the production. In 2006 Jotun’s factories generated 69,900 tons

of water-based waste and discharge, compared to 64,300 tons

in 2005. Among the reasons for this increase are the new factories in

Yemen and China. 46,300 tons of water-based waste was purifi ed and

did not result in any pollution. The remaining 23,600 tons were handled

through approved systems, but without any documen tation of the

pollution potential.

The authorities consider discharge into public sewerage systems to be

a local problem at eight of the group’s factories.

AIR AND WATER EMISSIONS

The production of paint has a relatively small energy consumption

compared to other process industries. In 2006 Jotun registered an

energy consumption of 72.9 GWh an increase from 65.5 GWh in 2005.

The start-up of the two new factories and increased production volumes

are the main reason for the increase in energy consumption.

The reported energy consumption only includes the consumption of

energy from buildings and production facilities. This means, for instance,

that energy consumption linked to transport is not included. 20 of the

factories also use other energy sources in addition to electricity,

including oil heating and energy from waste incineration.

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environment

Operations at Jotun require resources – and this involves emissions

being discharged into the soil, sea and air. Increasing production

volumes mean that Jotun must focus on efficiency-improvement

initiatives that can provide both environmental and financial

advantages.

ENERGY CONSUMPTION FACTS

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Waste volumes as percentage of produced volume for JOTUN DEKORATIV Production waste Hazardous waste

Waste volumes as percentage of produced volume for JOTUN PAINTS Production waste Hazardous waste

Waste volumes as percentage of produced volume for JOTUN COATINGS Production waste Hazardous waste

Waste volumes as percentage of produced volume for JOTUN POWDER COATINGS Production waste Hazardous waste

Production volumes (1000 tons) Dekorativ Paints Coatings Powder Coatings

Production and hazardous waste (1000 tons) Production waste Hazardous waste

Energy consumption (GWh) Dekorativ Paints Coatings Powder Coatings

20 www.jotun.com

working environment

Preventive measuresThe most important preventive measures in Jotun include training in how to handle hazardous chemicals and use protective equipment. There was a slight increase in the level of training activities this year, which went from 753 working days in 2005 to 785 days in 2006.

Dust and solventsThe factories in Flixborough (UK), Indonesia and Zhangjiagang (China) received training in basic chemical risk assessment and in how to monitor levels of dust and organic solvent. Local HSE coordi-nators and key personnel have reviewed work procedures, learnt how to use extraction systems and methods of calculation for predicting exposure to dust and solvents, in both the short and long term, in accordance with national limits.

The project provided valuable data that can be used as the basis for calculating dust and solvent levels at Jotun’s various factories all over the globe. The experiences will be used in the group’s work to prevent damage to health linked to important work tasks and people’s work-place.

TrainingIn order to promote the health of its employees, Jotun conducts health surveys, ergonomic surveys, and provides systematic first aid training. In 2006 828 operators attended first aid training courses.

Safe working environment

Jotun continuously monitors conditions at its factories and trains its employees in the handling

of hazardous chemicals and first aid. Statistics related to absence and occupational illness help

measure our performance in work-related safety.

A total of 463 working days were spent on this training, marking an increase on the 377 days in 2005.

Absence through illnessDue to different sick pay schemes, conditions of employment and ways of registering sickness absence at the plants, there is uncertainty about absence figures recorded at Jotun. In 2006 a total of 21,444 days of absence through illness were recorded, as opposed to 16,757 days in 2005.

The figures from plants in Norway are included in the total figures above and do not have the same uncertainty as the others. In 2006 the level of absence through illness at Jotun A/S was 5.2 per cent, compared to 4.0 per cent in 2005. The increase was due to long-term absence through illness.

Occupational injuriesIn 2006 there were 1,311 days of absence recorded as a result of injuries. This equates to 0.1 per cent of the total working hours, which is at the same level as in 2005. The H-value at Jotun for 2006 was 7.86, slightly higher than the 2005 value of 7.13.

DeathsThere were no deaths at Jotun in 2006.

21www.jotun.com

working environment

Preventive action is the main focus of the work related to the working Preventive action is the main focus of the work related to the working

environment and health in Jotun. It is a management responsibility, environment and health in Jotun. It is a management responsibility,

but the results must be achieved through systematic work, widespread but the results must be achieved through systematic work, widespread

involvement and a high level of knowledge about preventive measures involvement and a high level of knowledge about preventive measures

among all employees in the company. among all employees in the company.

FACTS

0

1

2

3

4

5

6

7

8

9

0605040302

2.6

0.30.6

1.21.4

0.9

2.8

1.3

2.0

1.7

0

1

2

3

4

5

6

7

8

9

0605040302

5.8

2.01.8

1.61.8

2.7

6.1

5.24.7

5.4

0

1

2

3

4

5

6

7

8

9

0605040302

5.5

1.4

2.1

0.8

2.2 2.1

6.7

5.0

4.5

2.3

0

1

2

3

4

5

6

7

8

9

0605040302

2.3

3.5

1.3

2.8

1.9

0.6

2.4

3.1

1.2

1.1

2002 2003 2004 2005 20060

2

4

6

8

10

12

2002 2003 2004 2005 20060

2

4

6

8

10

12

0

3

6

9

12

15

Dekorativ Paints Coatings GroupPowder Coatings

Training in JOTUN DEKORATIV(hours/no. of operators) Hazardous substances First aid

Training in JOTUN PAINTS(hours/no. of operators) Hazardous substances First aid

Training in JOTUN COATINGS(hours/no. of operators) Hazardous substances First aid

Training in JOTUN POWDER COATINGS(hours/no. of operators) Hazardous substances First aid

H-values

Absence through illness (%) 2002 2003 2004 2005 2006

Frequence of injuries resulting in absence of more than 1 day Dekorativ Paints Coatings Powder Coatings

In 2006 HSE staff carried out six internal audits. The audit report from all of the audits carried out has been made available to the Jotun management.

Main features of the auditsThe internal HSE audits that were carried out in 2006 showed improvements on housekeeping in general and a positive response towards HSE and HSE audits. How ever they reveal that Jotun faces challenges linked to storing and handling of raw materials e.g. flam-mable goods, peroxides and additives. For Jotun to be able to follow the visions and meet the goals that have been determined for the future, the group is dependent on all employees having sufficient knowledge of safety, health and the environment issues.

The audits also revealed that Jotun needs to place greater emphasis on preventive maintenance with regard to production equipment and buildings.

Need for enhanced qualification

Jotun has an auditing strategy with the clear aim of assessing and improving

our performance. This year’s audits showed general improvement, as well as specific

areas in need of greater attention.

• To reduce undesirable risk and the potential for loss.

• To contribute towards a satisfactory balance between focusing

on increasing market shares and results, and long-term

investment in initiatives to improve the level of HSE.

• To maintain and promote sound ethical attitudes.

• To maintain the attention on our corporate culture and

attitudes.

• To report weaknesses and non-achievement to the required

level in the organisation.

internal audits

The Board of Directors in Jotun has resolved to implement regular The Board of Directors in Jotun has resolved to implement regular

internal audits of factories and warehouses. This shall ensure Jotun’s internal audits of factories and warehouses. This shall ensure Jotun’s

own requirements for a systematic review of routines, systems and own requirements for a systematic review of routines, systems and

production processes. production processes.

It also involves systematic, documented, objective assessments being It also involves systematic, documented, objective assessments being

carried out of factories planned for the future.carried out of factories planned for the future.

Internal audits shall be carried out by personnel who are sufficiently Internal audits shall be carried out by personnel who are sufficiently

independent to provide an impartial attitude and judgement. The independent to provide an impartial attitude and judgement. The

auditors must have sufficient knowledge of the areas that are being auditors must have sufficient knowledge of the areas that are being

reviewed, including knowledge and experience of relevant matters reviewed, including knowledge and experience of relevant matters

within HSE, management, technical issues and regulations.within HSE, management, technical issues and regulations.

Audits include discussions with personnel, the inspection of operating Audits include discussions with personnel, the inspection of operating

conditions and equipment, and the review of journals, written proce-conditions and equipment, and the review of journals, written proce-

dures and other relevant documentation. The purpose of the audits is to dures and other relevant documentation. The purpose of the audits is to

determine whether the business is fulfilling the relevant provisions and determine whether the business is fulfilling the relevant provisions and

targets set.targets set.

Internal audits are an important tool used by

Jotun in its HSE activities. Regular audits and

controls allow us to adjust processes so that

every aspect of health, safety and the

environment is properly taken into account.

Internal audits and controls are important elements of Jotun’s

HSE policy and are carried out at all Jotun’s factories throughout the

world. Using systematic controls, the group lays the foundation for

common learning and improvements.

22 www.jotun.com

TOOLS FOR IMPROVEMENT

FACTS

THE PURPOSE OF AUDITS

The total cost of HSE work and measures has fallen in recent years. The fall is mainly due to the reduction in operating costs linked to the environment. HSE-related operating costs amounted to NOK 25 million in 2006. This is a slight increase compared to 2005. The reasons for this increase include the start-up of two new factories, the cost of purchasing personal protective equipment and higher waste management costs arising from increased production.

Out of the total figure for HSE-related operating costs for 2006 waste management accounted for 48.4 per cent.

It is difficult to make a clear distinction between ordinary operating and investment funds and HSE-related costs. When an investment is made in new machinery at a factory, this might be because the machines installed needed to be modernised, but this can also provide a benefit in terms of HSE.

The HSE-related costs that are quoted in the table are therefore set according to best estimates and based on what Jotun believes has accrued for the main purpose of achieving HSE improvements.

Investments for safe operation

HSE costs rose in 2006 due to waste management from increased production, start-up

of two new factories and acquisition of protective equipment for Jotun employees.

Deviations 2005 2006

Serious conditions that lead to reporting to the authorities 9 20Serious conditions that lead to reporting to the authorities 9 20

Events that have resulted in damage to the group’s property 11 22Events that have resulted in damage to the group’s property 11 22

Fatal or serious accidents 2 0Fatal or serious accidents 2 0

Accidents that can lead to a day’s absence or more 53 77Accidents that can lead to a day’s absence or more 53 77

Emissions that can harm the environment 23 22Emissions that can harm the environment 23 22

Fires 2 5Fires 2 5

hse-related costs

www.jotun.com 23

Jotun divides HSE-related costs into investment Jotun divides HSE-related costs into investment

and operating costs. Investment covers costs and operating costs. Investment covers costs

linked to buildings, process equipment, treatment linked to buildings, process equipment, treatment

plant, foam facilities, fire-fighting equipment, etc. plant, foam facilities, fire-fighting equipment, etc.

Operating costs include expenses for protective Operating costs include expenses for protective

equipment, hiring of specialists, waste treatment, equipment, hiring of specialists, waste treatment,

operation of treatment plant and payment of fees operation of treatment plant and payment of fees

and charges. The biggest HSE costs are those and charges. The biggest HSE costs are those

related to waste management.related to waste management.

FACTS

Total HSE costs per division Total HSE costs per division (mill NOK)(mill NOK) 02 03 04 05 06 02 03 04 05 06

Jotun Dekorativ 9.5 10.2 13.6 17.8 16.1

Jotun Paints 17.5 14.6 7.8 10.6 9.7

Jotun Coatings 8.1 9.5 8.7 11.5 15.4

Jotun Powder Coatings 5.9 3.5 3.7 3.8 3.6

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