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Annual Report and Accounts 2011 / Business Review / Sustainability 

Sustainability

Highlights

NWR operations LTIFR3 – OKD and OKK 7,64

  • Mining LTIFR improved by 8 per cent in 2011 compared to 2010. Over the last four years mining LTIFR has fallen substantially by 40 per cent
  • Time dedicated to staff training increased 376 per cent from 2008 to 2011
  • Total energy consumption down approximately by 10 per cent in 2011
  • Voluntary employee turnover rate1 further decreased to 1.17 per cent in 2011
  • NWR Group’s corporate social investment reached EUR 7.88 million in 2011
  • Recycling of water in 2011 reached 49.6 per cent2, an increase of 11 per cent in 4 years
 Sustainability  Sustainability
 Sustainability  Sustainability

1 Voluntary employee turnover rate includes OKD and OKK.
2 Estimate.
3 Lost Time Injury Frequency Rate represents the number of reportable injuries causing at least three days of absence per million hours worked including contractors.
4 The increase in generated waste was driven by scrap due to investments in modern technologies under the POP 2010. This is usable waste with economic benefit to society.

Petra Mašínová
Head of Corporate Communications and Sustainability

 Petra Mašínová
 Petra Mašínová  Petra Mašínová  Petra Mašínová
NWR continues to focus its efforts on the four pillars of sustainable development: corporate governance, employee welfare, environment and community. Reflecting the importance we attach to sustainability as an integral part of our business strategy, we have this year begun to report our sustainability performance in accordance with the internationally recognised GRI (Global reporting Initiative) standards. Our aim is to set the benchmark for sustainability in the CEE regional mining industry.

In 2011 NWR concluded its first year of reporting sustainability performance in accordance with the Global Reporting Initiative (‘GRI’) and published its first annual Sustainability Report for the year. Case

Case study

Access to the Dębieńsko Mine

Coal extraction from Dębieńsko 1 will be supported by the existing infrastructure of the former Dębieńsko Mine, currently owned by CZOK (‘Centralny Zakład Odwadniania Kopalń’).

The coal seams at Dębieńsko 1 will be accessible from the surface via Slopes nos. 1 and 2, which will reach depths of approximately 780 metres underground, and will be used to transport coal to the preparation plant, as well as for the transportation of workers, materials and machinery. A connection between the extraction level and the process unit has been designed to sit at this level, and will include vertical headings and large diameter holes through which fresh air will be circulated.

Further slopes will provide access to the working levels, which will reach depths of approximately 1,050 and 1,250 metres underground.

Through NWR’s ‘access project’, we will install power grids as well as anti-fire and drainage systems. The project is tailored to the conditions of this particular coal deposit, including tectonic activity, and takes into account the old workings in the former Dębieńsko Mine.

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Strategy

By its very nature, coal mining will always have an impact on the environment, and on the people who live nearby. That is why we are ever mindful of our responsibilities as we seek to expand our available coal reserves at our existing mines, develop new mines and pursue merger & acquisition opportunities. Indeed, it is incumbent upon us to go far beyond ‘box ticking’ compliance; in the course of our business we must maintain a working dialogue with the Czech, Polish and European Union regulators of our industry, with the local politicians who represent the towns and regions where we operate, and with the national politicians who legislate.

Sustainable development is integral to the business strategy of NWR. Ensuring that our business is economically and environmentally sustainable enables the NWR Group to maintain its social licence to mine coal and produce coke. We continuously monitor and evaluate the impact of our activities in order to effectively manage the sustainability of our business.

The long term success of the NWR Group depends strongly on maintaining a broad social licence to operate.
We target:

  • the sustainable and responsible use of natural resources that we mine and process;
  • minimising the environmental impact of our activities by thorough planning of our coal and coke production, efficient execution and responsibly managing the landscape; and
  • sustaining jobs within and bringing wider benefits to the local communities where we operate

By openly communicating our activities and aspirations, the NWR Group seeks to be an engaging and reliable partner for all stakeholders.

Stakeholder dialogue

When preparing reports on sustainable development, we followed the procedure recommended by the GRI. Those priority areas which stands at the forefront of the interest of our stakeholders are grouped in four pillars of sustainable development – corporate governance, our people, environment protection and relations with community – with an emphasis on safety.

Safety, Health and Sustainability Committee

The former Heath, Safety and Environment Committee (‘HSEC’) established in 2007 to assist NWR’s Board of Directors with health, safety and environmental risks within NWR, was transformed into the Safety, Health and Sustainability Committee (‘SHSC’) by the Board of Directors on 15 November 2011. The purpose of the SHSC is to assist the Board in its management of corporate and social responsibilities, with a special emphasis on safety, health and environmental risks within the NWR Group. The Board approves the adequacy of risk-control measures to ensure that the risks are effectively controlled and prevented. The SHSC aims to provide the Board with additional focus, insight and guidance on key Group Sustainability and HSE issues and global trends. The members of the SHSC are: Paul Everard (Chairman), Mike Salamon, Klaus-Dieter Beck and Steven Schuit. The meetings are also regularly attended by Ján Fabián, Chief Operating Officer of NWR who is responsible for the overall operations of NWR KARBONIA and OKK, Petra Mašínová, the Head of Corporate Communications and CSR, and by two external experts, Stan Suboleski and Karl Friedrich Jakob.

Further details on functioning and activities of the SHSC may be found in the Corporate Governance section of this report on pages 77, 78.

Sustainability reporting

NWR publishes its first GRI compliant Sustainability Report, which measures NWR’s performance through non-financial indicators. In line with the Company’s aim to focus on corresponding activities, NWR intends to issue a Sustainability Report annually, shortly after the release of its Annual Report and Accounts.

The four pillars of our approach to sustainability are corporate governance, the safety and welfare of our people, care for the environment and good community relations. Detailed goals and performance indicators are set within each of these pillars.

Our people1

Caring for our employees across safety, healthcare, working environment, appropriate remuneration and training, is a top priority. Every year NWR invests considerable amounts of time and money in improving employee safety and training.
NWR operations LTIFR NWR operations2 Lost Time Injury Frequency Rate (LTIFR) represents the number of reportable injuries after at least three days of absence divided by total number of hours worked expressed in millions of hours and including contractors.  Our people

 Performance
As a result of our focus on safety, the introduction of new mining technology and safety training and education we have succeeded in reducing the LTIFR by more than 7 per cent since 2010 and by over 37 per cent in the last 4 years. Our goal is to further reduce our LTIFR to 5 by 2015.

NWR operations employee turnover Employee turnover rate is calculated using the end-of-year total number of employees who left the organisation voluntarily (adjusted for employees having left due to dismissal, retirement or for health reasons).  Our people Performance
Our aim is to maintain low voluntary employee turnover rates in order to reduce any negative impact this may have on productivity or recruitment costs. Our HR policy, benefits and motivation programmes have succeeded in reducing employee turnover by approximately 25 per cent in 4 years.
NWR operations occupational disease rate (ODR)
The frequency of occupational diseases relative to the total time worked by the total workforce in the reporting period.
 Our people Performance
We focus our efforts on providing vitamins, recuperation breaks and rehabilitation care, all of which have proved to be key elements in maintaining low levels of ODR. We have recorded continuous improvements in ODR, which has been reduced by 7 per cent since 2009.
NWR operations average hours of training per year per employee
Average hours of training per employee is calculated as the total number of hours dedicated to training divided by the average number of employees in the reporting period.
 Our people Performance
The time we dedicate to training and education has increased by 376 per cent in last four years. Training has a key role in improving human capital and preventing safety and health risks. It is also closely linked with new automated and computer controlled mining and development technology installed in POP 2010.

1 The Group has a policy towards disabled employees covered by the Code of Ethics. The subsidiaries act in compliance with Czech and Polish laws.
2 NWR operations includes OKD and OKK as main production entities

Corporate governance

We are committed to maintaining high standards of corporate governance, taking intoaccount international best practice requirements. Reflecting the importance we attach to sustainability, the Health and Safety Environment Committee was transformed into the Safety, Health and Sustainability Committee during 2011 with broader sustainability issues in its focus.
NWR Group suspected irregularities
Number of suspected irregularities (phenomena) reported within our established whistleblower procedure which is part of NWR’s Code of Ethics and Business Conduct.
 Corporate governance

Performance
The significant increase in suspected irregularities reported between 2010 and 2011 is due to the introduction of new reporting criteria. In 2011 we report the number of incidents while in 2010 we reported the number for suspected irregularities. One suspected irregularity may consist of two or more incidents.

We keep in regular contact with all of our stakeholders who include our employees, investors, analysts and shareholders, the community, governmental and municipal authorities, suppliers, customers and educational institutions.

Environment

Mining, by its nature, affects the environment in a number of ways. We are aware of the impacts our activities have on the environment wherever we operate. To mitigate these we pay particular attention to water consumption, waste management, emissions and to biodiversity, in the form of our land reclamation projects.
NWR operations total direct energy consumption
Total direct energy consumption (in gigajoules, GJ) includes direct primary energy purchased and produced minus direct primary energy sold.
 Environment Performance
Total energy consumption decreased approximately 10 per cent in 2011 (reported in GJ) mainly due to the lower consumption of compressed air (OKD) and thermal energy (OKD, OKK). This decrease was driven by the substitution of compressed air with more efficient electricity.
Note: The total direct energy consumption is not available for 2008 and 2009 due to the unavailability of reportable audited data due to a significant change in the reporting base.
NWR operations total amount of land rehabilitated
Land rehabilitation (reclamation) is the area influenced by mining activities.
 Environment Performance
The total amount of land rehabilitated in reclamation projects is in accordance with ‘Comprehensive Rehabilitation and Reclamation Plan’ for a five-year period which is to be updated each year. The plan is regularly submitted to the Czech Ministry of the Environment for approval. The total amount of rehabilitated land planned for year 2012 amounts to 28.6 hectares.
NWR operations water discharge
The total amount of water effluents discharged over the course of the reporting period into subsurface waters, surface waters, sewers, treatment facilities, and ground water.
 Environment Performance
We continuously strive to reduce the total water discharge by increasing the volume of recycled water in our mining operations. Recycled water accounted for 49.6 per cent of the total volume discharged in 2011 and this proportion has been increasing continuously since 2008.
Note: estimate for 2011
NWR operations weight of waste generated
The total weight of generated waste includes the total volume of hazardous waste and non-hazardous waste defined by the Czech legislation. Non-hazardous waste contains all other forms of solid or liquid waste excluding waste water.
 Environment Performance
The total weight of generated waste increased in 2011 due to the higher production of scrap steel resulting from the decommissioning and replacement of old equipment with new technology under the POP 2010 and PERSP 2015 programmes. Scrap steel is considered a recyclable material.

Community

We are committed to maintaining high standards of corporate governance, taking intoaccount international best practice requirements. Reflecting the importance we attach to sustainability, the Health and Safety Environment Committee was transformed into the Safety, Health and Sustainability Committee during 2011 with broader sustainability issues in its focus.
Corporate social investment (CSI)
Group’s1 CSI spent primarily on social issues in the form of donations or sponsorship, excluding benefits for employees. CSI supported projects from the following areas: community, enterprise and job creation (scholarships, support of schools), health and culture (OKD Foundation); education (donations); environment (funds provided beyond the law requirements) and sport (sponsorship). NWR do does not support political parties and did not make any political donations during the year.
 Community Performance
We are committed to social investment at both a corporate and operational level. The volume of  nvestment is influenced by the prevailing economic situation of the industry.
The significant increase in CSI in 2011 is driven by OKD donations to the OKD Foundation, which increased 232 per cent.
We rank amongst the largest private donors in the Czech Republic.

1 In 2011, NWR donated EUR 250,000 to OKD Foundation and EUR 20,000 to St. Barbara Civic Association. In 2011 NWR supported sponsorship projects, with a total contribution of EUR 180,476. Supported sponsorship projects: International Viola Viola Festival in Haarlem in the Netherlands for EUR 40,000; European Business Congress in Katowice in Poland for EUR 10,220; Polish Coal 2011 forum in Katowice in Poland for EUR 10,220; International Contemporary Art Fair ‘Art Prague 2011’ in Prague in the Czech Republic for EUR 7,860; 54th Biennial: ‘Federico Díaz: outside itself’ in Venice in Italy for EUR 8,153; Mukachevo Expedition Project for orphan children from the Czech Republic and Ukraine for EUR 2,000; XXI economic forum in Krynica-Zdrój in Poland for EUR 10,500; Cool Math project aiming to improve the teaching of mathematics in primary schools in the Czech Republic for EUR 79,523; support for Ondřej Broda European Champion and World´s Vice Champion in swimming with fins for EUR 12,000.