Employees
and Social Policy

5.1. Staff Composition

Human capital is a core value and a key factor in the successful development of the Company. Realizing this, the leaders of the Group of companies Norilsk Nickel seek to create conditions conducive to improving the efficiency of personnel and their involvement in the implementation of corporate objectives as well as providing a transparent approach to human resource management.

The business of MMC Norilsk Nickel is based on respect for each employee. The Company provides its employees with equal opportunities to exercise their labor rights regardless of gender, age, race, nationality, origin, property, social and official status, place of residence, religious views and political beliefs, as well as other circumstances not related to their business competences. All employees have equal opportunities to realize their potential in the workplace, evaluation is conducted impartially and fairly. Official selection and promotion of employees are carried out solely on the basis of their professional abilities, knowledge, and skills.

The legal basis for the Company's approach to labor as well as other accompanying relations conforms to the recognized principles and norms of international law and standards of the International Labour Organization, as well as national legislation in the countries where the Company carries out its business activities.

The Company is developing programs of development and social support for staff and puts social and economic rights of their employees into practice: rights for social security, education, protection of the family, the right to housing, freedom of creativity, participation in cultural activities. The Company observes the rights of workers to organize unions, which is an integral element of the right to freedom of association and freedom to negotiate.

The internal regulatory framework:

  • Collective Agreement;
  • Internal Code of Labor Conduct;
  • Occupational and Job Descriptions;
  • The provisions of subdivisions;
  • The standard form of employment contract;
  • Policy on processing of personal data;
  • Code of Business Conduct and Ethics of OJSC «MMC» Norilsk Nickel;
  • The list of rules and regulations on labor, permitted for use in OJSC «MMC» Norilsk Nickel.

The person responsible for HR and Social Policy is Zelkova L.G, Deputy General Director.for Social Policy and Public Relations, a member of the Public Council under the Ministry of Labor and Social Protection of the Russian Federation, together with:

80
thousand
people
average headcount of Russian companies of the Group in 2014 average headcount of Russian companies of the Group in 2014
0.8
%
reduction of staff turnover in Russian companies of the Group in 2014
  • The Committee for Personnel and Remuneration Committee of OJSC «MMC» Norilsk Nickel;
  • Department of Personnel and Social Policy at the company's headquarters;
  • Personnel Departments in enterprises of the Group.

The average headcount of the Group of companies in 2014 amounted to 79,897 employees in Russian enterprises and 1,958 employees in the enterprises abroad. The majority of the employees of Russian companies of the Group (71% of the total number of employees in Russia) works in Norilsk and Taymyr Dolgan-Nenets Municipal District.

Another 17% of the employees of the Group stationed in the Russian Federation work on the Kola Peninsula and in Northwestern Federal District.

The decrease by 3.7% in the number of employees of Russian companies in 2014 is due to a change in the scope of work, structural changes, and measures on improving labor efficiency.

The share of senior executives at companies in the Russian Federation hired from among the representatives of the local community1 amounted to 98.5% in 2014.

Out of the total number of employees more than 70% are production workers.

The average age of employees is 40 years, with the age of more than 20% of them not exceeding 30 years and the age of 20% of employees exceeds pension age. 30% of employees are women.

More than half of employees have a secondary education (including professional education), 28.5% of employees have higher education.

DISTRIBUTION OF STAFF BY CATEGORIES, %
Indicator 2012 2013 2014
Production workers 72.3 71.4 70.8
Managers 12.6 13.3 13.4
Specialists and office staff 15.1 15.3 15.8
DISTRIBUTION OF EMPLOYEES OF RUSSIAN COMPANIES OF THE GROUP BY LEVEL OF EDUCATION, %
Education Level 2012 2013 2014
General Secondary Education 32.6 31.8 30.8
Higher 25.9 27.4 28.5
College 0.5 0.4 0.4
General Secondary Education 20.1 20.1 20.3
Higher 20.8 20.4 20.0

5.2. Recruiting New Employees

To timely meet the needs of businesses of the Group for new personnel, the Company uses a wide range of modern technologies of personnel search. The Company also implements corporate programs to attract workers and specialists among young people completing professional trainings in their professional schools.

In the reporting year, to meet the staffing needs of Zapolyarnaya Construction Company LLC, we successfully launched a pilot project to attract professional builders by an alternative method of work. In 2015, in the framework of implementation of investment projects, trying a similar method in the other entities of the Norilsk Nickel Group is foreseen.

The main emphasis in the interaction with potential candidates in an online environment is on the corporate Job and career website www.hr.nornik.ru. In 2014, as a result of the redesign, our site has undergone significant changes, in particular, its navigation was improved.

Guided by the provisions of the declarations and conventions of international organizations, the Constitution and the Labor Code of Russia, the Company absolutely excludes the use of child labor and the employment of persons under the age of 18 to work in harmful and/or dangerous working conditions.

The Company strictly observes norms prohibiting the employment of women to work in difficult and dangerous working conditions in the mining industry. The Company respects and protects the rights of mothers.

The Company has continuous relations with educational organizations (schools, colleges, universities) and gives future employees with high potential the opportunity to have their internships with the Norilsk Nickel Group. In particular, the program «Professional Start» includes the cooperation with 25 universities from six federal districts of the Russian Federation.

Assistance for New Employees in Settling in the New Place of Residence

The program «Assistance for New Employees in Settling in the New Place of Residence in the Norilsk Industrial District and Taymyr Dolgan-Nenets Municipal District» for invited experts from other regions of the Russian Federation and neighboring countries with highly demanded professional skills in the local labor market allows the Company to provide adequate living conditions and offset the costs of relocation and resettlement. In 2014, participants of the Program amounted to 1,254 people.

In 2014, the Company spent RUB 133,926 thsd. on the implementation of this program.

KEY INDICATORS
Indicator 2012 2013 2014
Number of hired employees 15,408 10,103 13,220
Out of them employed on permanent jobs, % More than 70
The share of hired employees, % 18.8 12.2 16.5
The number of laid-off employees 14,316 13,738 12,812
Employee turnover, % 11.8 12.1 11,3
NUMBER OF EMPLOYEES WHO ARE ON MATERNITY LEAVE AND/OR LEAVE TO CARE FOR A CHILD
2012 2013 2014
Number of employees who are on maternity leave and/or child care leave 1,830 2,061 2,188

The program is aimed at university students during their final years. Program participants are paid round trip travel to the internship location, accommodation, and the cost of preliminary medical examination. For the internship period students sign fixed-term labor contract. Students practice under the guidance of an experienced mentor and according to an individual plan. Based on internship results, the Company may sign with the student a contract for professional training and employment after graduation. The number of participants of the «Professional Start» project in 2014 was equal to 283 students from nine Russian universities.

The Company carries out professional orientation work among the young people of the Norilsk Industrial District. The work is conducted in cooperation with the Office of Elementary, Middle, and Preschool education administration of the city of Norilsk, the Centre for Employment of the city of Norilsk, all general and professional educational institutions of Norilsk and Dudinka, and Norilsk Industrial Institute. The target audience of the project is young people 4-35 years of age. The Company organizes career tours, an annual event called «Company Lesson», contests «Add Colours to the city», «I'd Like to Be a Worker», «Career Dreams». During summer months, the Company organizes occupational camps for children of school age and others. The audience of the project in 2014 amounted to more than 25,500 people.

5.3. Personnel Development

In 2014, the Board of Directors of OJSC MMC Norilsk Nickel approved a long-term Program for Human Resources Development. The program sets out priorities for the development of the human capital required to facilitate the Company's development strategy.

The main directions of the Program for Human Resources Development:

  • iplementation of segmentation and targeted personnel management in individual segments;
  • implementation of optimal models of using labor resources;
  • increased focus on a proactive approach and personal initiative;
  • strengthening of personnel reserve;
  • personnel development;
  • changing the focus of the HR service toward the implementation of the Company's strategy and playing the role of the business partner.

One of the priorities of the Program for Human Resources Development is an increase of the employees' efficiency. Since 2014, the Company has implemented a project to introduce a system of employees performance management, including performance assessment based on KPIs and assessment of competency using the «360 degrees» model. In 2014, the project covered the managers of the category «TOP» from main

production sites of the Norilsk Nickel Group and the Company's headquarters.

In 2014, the assessment of competences, which is used to define a level of development and utilizing managerial skills, was passed by the managers from TOP 100 and TOP 500 categories from Company's headquarters, the Polar Division, and the main Russian units and companies of the Norilsk Nickel Group, which constitutes 71.7% of the total number of employees in this category.

In 2014, we began the process of assessment procedures automation: assessment of competency by the «360 degrees» method was carried out with the help of WebTutor software.

The next step planned for 2015 is the discussion of the effectiveness of the employees that passed the assessment and making decisions on their further promotion and development by the HR and Remuneration Committee of JSC MMC Norilsk Nickel. It is planned to partition the System for performance management of employees to lower levels of management in 2015

In the framework of the Program for Human Resources Development in 2014, we started work on updating the system of work with the personnel reserve. The Company treats forming personnel reserve for key positions of line managers of mining, concentrating, and metallurgical units, development of transparent and realistic models of career growth, and development of employees as long-term investments that contribute to the implementation of the strategic plans.

20
thousand
employees
each year get training in education centres of the Group, Corporate University Norilsk Nickel and Kola Centre for Personnel Development

In 2015, we will continue work on forming personnel reserve. It is planned to define common approaches and criteria for the formation of personnel reserve, focusing not only on the assessment and development of management and corporate competencies of candidates to personnel reserve but also on their professional performance.

Education is one of the important activities in the area of personnel development. Personnel training is an ongoing process and is carried out throughout the work of the employee for the purpose of consistent expansion and deepening of knowledge and skills, improving professional skills to meet the needs of the Company.

The Group's companies implement a process of employee-training in accordance with their local regulatory documents, which are made by analogy with the model provision on the organization of vocational training in JSC MMC Norilsk Nickel.

The Company uses the following types of professional training of managers, professionals, employees, and workers:

  • training;
  • retraining;
  • skill improvement;
  • internships.

Personnel training is paid for from the budget of the companies in the Group. It is free for employees. Training takes place at schools independent from Norilsk Nickel and at corporate training centres. The main educational centres of the Group are Corporate University of Norilsk Nickel (Norilsk) and Kolsky Human Resources Development Centre, which annually enroll more than 20,000 employees.

KEY INDICATORS
Indicator 2012 2013 2014
Number of employees trained, including training, retraining, and skill improvement (thousands of people) 48.7 47.9 54.1
The volume of training, total (in thousands of man-hours) 5,633.5 5,250.5 5,079.2
The average annual training volume per employee trained (in hours) 115.7 109.6 93.8
The average annual training volume
per average count employee (in hours)
68.7 63.3 63.5
The cost of professional training (in millions of rubles) 600.7 608.9 661.5
The cost of training cost per trained employee (in rubles) 12,334 12,711 12,220

The mentor is a highly qualified individual who transmits his professional knowledge to young employees. Within the Company, a system of organizational and methodical assistance of mentorship has been developed. Every year, we hold professional contests among the mentors, organizing their further training. The number of participants in the events of the "Master Academy" in 2014 amounted to approximately 3,0OO people.

The movement unites young workers from 18 to 35 years. Activities organized by the members of the movement with the support of the Company's management are aimed at solving production, innovative, intelligent, creative, and socially significant problems. In 2014, events were held in five major projects: «Norma MM» (Sports), "NIKoIM» (intellectual contests), «Creativity» (contests, festivals, and CPR), «Adaptation and career guidance» (patronage of young workers), «The Initiatives» (development projects to address socially important problems). The number of participants exceeded 14,OOO people.

The project is focused on line managers. One of the activities is a contest «Master of the Year», intellectual tournaments, implementing a program of training of line managers (masters). The number of participants in the events of the «Master University» in 2014 amounted to approximately 3,4OO people.

5.4. Motivation System

The basic principles of motivation and remuneration of the Norilsk Nickel Group of companies are as follows

  • a common approach to wages of all employees;
  • mtivating employees to achieve the goals and objectives by improving the efficiency of individual work, activity of divisions and the Group as a whole;
  • competitive wages in the labor market;
  • strengthening the Company's image as a responsible and reliable employer.

Compensation package of all employees includes:

  • remuneration (salary);
  • social package.
THE STRUCTURE OF THE COMPENSATION PACKAGE FOR THE RUSSIAN COMPANIES OF THE GROUP IN 2014, %
marcer
Salaries
marcer
Social package
THE COMPENSATION PACKAGE OF EMPLOYEES OF RUSSIAN COMPANIES OF THE GROUP
(THOUSAND RUBLES PER MONTH)
2012 2013 2014
Kola Peninsula and Northwest 51. 58.3 61.4
Krasnoyarsk Krai 35.2 37.9 40.9
Moscow and other regions of Russia 159.0 193.3 139.5
Taymyr Peninsula 76,8 80,1 84,7
DISTRIBUTION OF PAYROLL OF EMPLOYEES OF RUSSIAN ENTERPRISES OF THE GROUP BY REGIONS OF PRESENCE, %
2012 2013 2014
Payroll, RUB million 71,530.3 79,733.0 77,064.0
Kola Peninsula and Northwest 12.7 12.9 13.2
Krasnoyarsk Krai 2.8 2.5 2.8
Moscow and other regions of Russia 12,8 15,6 11,8
Taymyr Peninsula 71.7 69.1 72.2
THE SALARY STRUCTURE FOR RUSSIAN COMPANIES OF THE GROUP, %
2012 2013 2014
Fixed part 69.6 69.8 68.0
Regular bonus 15.5 15.3 14.8
One-off bonus 14.9 14.9 17.2
THE AVERAGE SALARY OF EMPLOYEES OF RUSSIAN COMPANIES OF THE GROUP (IN THOUSAND RUBLES)
2012 2013 2014
Kola Peninsula and Northwest 48.7 54.3 57.4
Krasnoyarsk Krai 34.5 36.6 40.0
Moscow and other regions of Russia 153.8 188 135.0
Taymyr Peninsula 68.9 72.9 77.0

The minimum monthly wage for workers of main production units of the Company at the full-time rate and implementation of labor standards are at least 1.5 times more than the amount of the subsistence minimum established in this region of the Russian Federation.

Remuneration of employees of the Group is based on a tariff system designed to differentiate and balance salaries, depending on the skill level, the degree of responsibility of employees, and complexity of the work.

The fixed part of the compensation consists of the tariff, including overtime and regional allowances, and stimulating compensatory bonus, and is paid according to hours worked and volume of work performed regardless of the results of the Company and the Group as a whole.

The variable (bonus) of the salary depends on the achievement of performance indicators of the employee established by the employer and the Company as a whole (fulfillment of production plans and programs subject to the requirements of technical regulations and standards, to ensure the required quality of work, productivity growth, reasonable cost savings, compliance with corporate culture).

The main share of payroll of the employees of Russian companies of the Group accounts for businesses located in the territory of Norilsk and Taymyr Dolgan-Nenets Municipal District.

Social package consists of benefits and compensation under national law and collective agreements of enterprises, as well as additional incentive payments provided to employees as part of the Social Policy of the Norilsk Nickel Group.

The social package includes the following benefits and compensation:

  • payment to employees of enterprises in the Far North and equivalent areas and their families for return travel and baggage costs to a place of vacation and back;
  • providing concessional vouchers for spa treatment and vacations for workers and their families;
  • additional pensions for employees and other types of social guarantees under the existing collective agreements and local regulations.

Social policy is constantly improved in accordance with the Company's strategy.


To make changes to existing programs, develop new and close programs, which fulfilled its goals and objectives, we conduct a thorough and comprehensive analysis of the problem, assess the most appropriate solutions both from the social point of view and taking into account the economic interests of the Company and the interests of workers. In addition, for the timely detection of weaknesses in the implementation of programs, we constantly monitor their implementation.

The Social Policy of the Norilsk Nickel Group is being developed and implemented in a systematic manner in accordance with approved internal regulatory documents.

The «Cumulative Equity Pension» Program

In 2014, the Group's entities located in the Norilsk Industrial District, continued to implement a corporate program of private pension program called «Cumulative Equity Pension» (CEP).

The program operates since 2007; at the end of 2014, over 20 thousand Group employees participate in it.

Terms of the Program include two pension plans: «Parity» and «Corporate». The «Parity» Plan is a basic Plan, in which the funding of pension savings is carried out jointly by the employee and the Company, on a par (equal) basis. The Company's contributions to the pension are equal to the amount the employee's pension contribution but cannot exceed 7% of the employee's salary. The «Corporate» plan is aimed at highly skilled employees and/or employees with highly demanded specializations; within this plan the Company at its own expense arranges and provides private pensions for employees.

The Company is committed to forming nonstate pensions of workers in full and in accordance with local regulations.

By the end of 2014, about 5,000 people already receive pension under the CEP program.

THE STRUCTURE OF PARTICIPANTS IN THE «CUMULATIVE EQUITY PENSION» PROGRAM
Enterprises The number of participants
in 2014, people
Total 20,219
Norilsk Industrial District 17,079
The site of the Kola Peninsula 3,108
Company's Headquarters 22
Other 32
THE RESULTS OF THE IMPLEMENTATION OF THE «CUMULATIVE EQUITY PENSION» PROGRAM IN 2012–2014 YEARS
Indicators 2012 2013 2014
The amount of the Company's costs, RUB thsd. 770,637 546,858 498,162
Individual contribution of the participant
The amount of the average contribution per participant, % of wages 2.64 2.66 2.66
The amount of the average monthly contribution per participant, RUB thsd. - 2 2.01
Employer contribution as per Parity Plan
The amount of the average contribution per participant, % of wages 2.62 2.65 2.64
The amount of the average monthly contribution per participant, RUB thsd. - 1 2.0

Wellness Programs

Over the years, the Group of companies Norilsk Nickel has implemented a program of rehabilitation and spa treatment of workers and their families.

Life in the harsh climatic conditions of the Far North as well as the specifics of work at the Group require special care of the health of workers, so the program on personnel wellness is among the priorities of Company's Social Policy.

Opportunities provided by the Company for vacation for employees and members of their families The number of participants
in 2014, thousand people
The wellness centre Zapolarye (Sochi) 16,3
The wellness and spa centre Kolsky (Monchegorsk) 1,7
The wellness centre Russia (Altai Krai) 0,5
The resort Rosa Khutor (Sochi) 4,4
The wellness centre Dulber, Russia (Republic of Crimea) 0,9
Children's wellness centre Vita (Anapa) 1,1
The program for abroad corporate vacations (Bulgaria, Greece) 6,2
THE COSTS FOR THE IMPLEMENTATION OF WELLNESS PROGRAMS IN 2014, MILLION RUBLES
Wellness programs for employees and members of their families 2012 2013 2014
Vacation in wellness centre Zapolarye 629 788 862
The program for abroad vacations 472 311 328
Wellness for children 172 162 168
Vacations in third-party wellness centres 42 26 158
Vacation in wellness centre Kolsky 42 86 90
Paid travel to the wellness centre location 143 1 1
Total costs 1,501 1,468 1,607
550
apartments
the Company purchases for its employees each year
1.5
billion
RUB
amount of housing programs financing in 2014

Programs «Our Home» and «My Home»

The «Our Home» Program has been implemented since 2010 and is focused on the Polar Division, the Polar Transport Branch of the Company, and JSC Kola MMC. The «My Home» program was launched in 2011 and covers 13 companies of the corporate structure, functioning in the territory of Norilsk, Taymyr Dolgan-Nenets Municipal District, and the Murmansk Region.

Both programs are aimed at addressing the shortage of strategically important key staff and the creation of a stable core of personnel at the Group Norilsk Nickel in the territories of the Far North.

The Company acquires finished apartments in favorable regions of Russia and provides them to the participants of programs on a cofinancing basis: the Company pays up to half the cost of the apartment, the rest of the cost is paid by the employee during a certain period of work in the,

enterprise (from 5 to 10 years). The apartment is registered as employee's property at the end of his participation in the program, but the employee can use the apartment immediately after receiving it. The cost of apartment for the duration of the employee participation in the program does not change.

Apartments under this program are acquired in Moscow, Tver, and Krasnodar Regions. Since the beginning of the program, the Company had, purchased 2,300 apartments (transferred for use by program participants: 1,861 apartments), including 560 of them in 2014.

The Company's obligations to employees for the purchase of up to 550 apartments per year are fixed in the Collective Agreement of OJSC MMC Norilsk Nickel for 2012–2015.

Since the start of the programs, the volume of financing amounted to RUB 9,850 million, including RUB 1,500 million in 2014.

The Program of Sports Events

The program of sports events is held to strengthen corporate solidarity, develop corporate culture, and promote healthy lifestyle.

In 2014, in the Norilsk Industrial District, we organized the following company-wide competitions: Health Marathon Norilsk Nickel Ski Track, corporate marathon dedicated to the Day of Metallurgist, corporate tournament on mini-football, and for the first time, corporate competitions in alpine skiing. Outing tournament «Dad, Mom, and Me are a sporty family!», corporate competition in swimming, basketball, and volleyball were held in Sochi and Monchegorsk. During corporate basketball competition, together with the CSKA team, we held a master class for children from School for children's and youth sports of Monchegorsk and workshop for coaches.

Many corporate sports events are attended by both employees of the Company and representatives of the local population who are not employed by the Company.

The cost of the program in 2014 amounted to RUB 76,224 thsd.

Payments to Pensioners, Former Employees, and their Families

In 2014, the amount of financial aid and additional payments to pensioners, former employees, and their dependents amounted to RUB 207,204 thsd the number of participants in these programs is 22,984 people.

For information about the benefits offered to employees working on a full, temporary, and part-time employment, see the online version of the report.

Benefits provided to employees working on a full, temporary and part-time employment
Employees
Polar Division of
JSC «MMC «Norilsk Nickel»
Full-time job Temporary job (1) Seasonal work Part-time job
Paid return travel to the vacation location + +(2) +(2)
Financial assistance of all kinds + + + +
Wellness and spa treatment and vacations +
Vouchers for children's wellness centers +
Pension plans +
Severance payments (in excess of those stipulated by the legislation) + +(3) +(3) +(3)
Other benefits:
prosthetics +
funeral + +(4) +(4) +(4)
payments related to injuries at work + + (4) + (4) + (4)
payment of allowances for work in the Far North from the first day of work + + + +
if occupational disease is established - travel costs to a specialized health care setting and the examination +
three days of paid leave in the event of the death of loved ones + +(4) +(4) +(4)

(1) Employment on fixed-term contracts. According to the Collective agreements and local regulations (CA and LR).

(2) the allowance for these categories of employees is not excluded, but the actual travel is not paid, because the Company does not pay the vacation for these categories of employees.

(3) According to the CA and the LR compensation of costs associated with the move from the territories for these categories of employees is not excluded, in practice they may be paid for. The severance pay under the agreement of parties is not provided.

(4) According to the CA and the LR benefits for these categories of employees are not excluded, in practice such cases are possible.

Employees of JSC «Kola MMC» Full-time job Temporary job Seasonal work Part-time job
Paid return travel to the vacation location + +
Financial assistance of all kinds + +
Wellness and spa treatment and vacations + +
Vouchers for children's wellness centers + +
Pension plans + + +
Severance payments (in excess of those stipulated by the legislation) + +
Voluntary medical insurance + + +
The benefits provided by the program «Professional Start» +
Benefits for newly hired employees + -

Nonfinancial Incentives

In 2014, the Company awarded 4,836 employees of the Group for high production achievements and many years of conscientious work, including:

  • 28 persons with state awards;
  • 354 persons with awards from various ministries and departments;
  • 929 persons with awards from various regional and municipal authorities;
  • 296 persons with corporate awards of the Company.

5.5. Industrial and Occupational Safety

In accordance with the Industrial and Occupational Safety Strategy approved in 2014, the goal of the Company is the annual decrease in the number of industrial accidents by 20%. Achieving zero number of occupational fatalities is a key strategic objective.

The policy of OJSC MMC Norilsk Nickel in the field of industrial and occupational safety was approved in 2008. The policy establishes the principle of the priority of the life and health of workers in relation to the results of production activities and declares the Company's interest in creating healthy and safe working conditions for all workers and giving them sustainable motivation for safe behavior in the workplace.

Systems of industrial and occupational safety management of JSC Kola MMC and LLC Norilsknickelremont are certified in accordance with OHSAS 18001: 2007 standard; certification of the Polar Division of JSC MMC Norilsk Nickel is planned for 2015.

The collective agreements of the Group of companies Norilsk Nickel secure the obligations of the employer and employees on occupational safety and health protection.

In the field of industrial and occupational safety, the Company is guided by the current legislation of the Russian Federation (Labor Code of the Russian Federation, Federal Law No. 116-FZ dated July 21, 1997, On Industrial Safety of Hazardous Production Facilities, the Federal Law of No. 426-FZ dated December 28, 2013, On Special Assessment of Working Conditions, regulations developed on the basis of these laws, and technical regulations of the Customs Union in the field of security). The Company complies with labor standards of the International Labour Organization.

Investigation and registration of accidents associated with the production and occupational diseases is done in accordance with the Labor Code of the Russian Federation and internal standards.

Responsibility for the development of activities and monitoring the implementation of legislation in the field of industrial health and safety is assigned to the First Deputy General Director – Chief Operating Officer, who directly manages Department of Industrial Health and Safety and heads the Production Accident Prevention Committee.

The main purpose of the Committee is to reduce the number of workplace injuries at the companies of the Group by improving the efficiency of organizational and prevention work, ensuring of employees for safe working environment, and introducing advanced mechanisms aimed at improving the safety culture of production.

Key indicators
Indicator 2012 2013 2014 Plan 2014 Fact 2015 Plan
IFR 0,10 0,07
LTIFR 0.80 0.47
The total number of accounted accidents associated with the production 103 106 not more than 85 63 not more than 50

In 2014, the Committee reviewed issues on the volume of occupational injuries, improving the existing system of industrial safety and labor protection, monitoring implementation of the planned measures aimed at reducing accidents, and increasing the effectiveness of the system of industrial safety and labor protection. The Committee held video conferences and retreats in the territory of the production sites of the Norilsk Nickel Group of companies.

To improve the management system of industrial safety and labor protection of OJSC MMC Norilsk Nickel following corporate standards were developed and adopted in 2014:

  • «Behavioral Safety Audit» (defines procedures for organizing and conducting behavioral audit in the field of industrial health and safety for the prevention of accidents and incidents, which result from the dangerous actions and unsafe conditions);
  • «Energy Sources Lockout» (sets procedure for organizing and conducting work on the isolation of energy sources in the course of production activity);
  • «Work at a Height» (establishes the procedure for organizing and conducting work at height to ensure the safety of workers carrying out work at a height, as well as employees and other persons in the area or in the immediate vicinity of the production of these works);
  • «Hazard Identification, Risk Assessment and Risk Management in the Field of Industrial Health and Safety» (establishes uniform requirements for work on hazard identification, risk assessment and management in the field of occupational safety and health as the most effective preventive measures to prevent occupational injuries, accidents, and incidents);
  • «Providing Employees with Personal Protective Equipment» (regulates the formation of needs, acquisition, provides the Company's employees with special clothing, footwear, and other personal protective equipment, as well as with wash-off and/or decontaminating agents (hereinaer referred to as the «PPE»), controls the use of PPE by employees, visitors of production sites of the Company, and representatives of the contractors engaged in production activities in the territory of the Company);
  • «The Safety Requirements for Entering and Exiting Corporate Transportation» (sets requirements for the organization of the safe dispatch of workers to and from work, transporting them within production sites and facilities of the Company while entering and existing vehicles).

The companies of the Group have been implementing these standards.


In 2014, the Company developed corporate standards on «Accident Investigation» and «Safety Requirements in the Interaction of Vehicles and Pedestrians at the Production Sites and Facilities».

In the reporting year, we developed and put into effect the Regulations on the Audit of the Control System of Industrial Safety and Labor Protection by a Second Party, on the basis of which we trained internal auditors and carried out cross-Group audits. Cross-company audits were carried out on the Polar Division of JSC MMC Norilsk Nickel, JSC Kola MMC, JSC NTEC, LLC Polar Construction Company, JSC Pechengastroy, LLC Norilsk Support Complex and LLC Norilsknickelremont.

In accordance with the Federal Law No. 116-FZ dated July 21, 1997, On Industrial Safety of Hazardous Production Facilities (taking into account changes to the Federal Law No. 22-FZ dated March 4, 2013),

the Government Decree No. 536 dated June 26, 2013, On Approval of Requirements for the Documentation to Ensure Industrial Safety Management Systems, the Company approved and put into effect the Regulations on the safety management system of OJSC MMC Norilsk Nickel.

We developed guidelines for the organization of the working groups on certification of workplaces, created such working groups, and conducted certification of positions in the production structural units of the Group.

The companies of the Group have a system for monitoring the state of industrial safety and health, including the following elements of control and preventive functions: behavioral safety audits; multistage monitoring of the industrial health and safety; operational, targeted, and integrated testing.

for
11
thousand
workplaces
special evaluation of labor conditions was performed in 2014
1.5
billion
RUB
amount of housing programs financing in 2014

Special Assessment of Working Conditions at the Workplace

In 2014, in accordance with the Federal Law On Special Assessment of Working Conditions, we carried out a special assessment of conditions in the workplace in the Polar Division, LLC Norilsknickelremont, LLC Polar Construction Company, JSC NTEC, JSC Norilskgazprom, and other production plants of the Norilsk Nickel Group. In 2014, we evaluated 11 thousand workplaces of more than 21 thousand employees. The costs of this special assessment of working conditions for the whole Group amounted to RUB 11.8 million.

Provide Workers with Personal Protective Equipment. Treatment and Prevention Activities

Employees of industrial units and enterprises of the Norilsk Nickel Group are employed in conditions of exposure to hazardous and harmful factors (work in underground conditions, operation and maintenance of metallurgical equipment, self-propelled heavy transport in extreme climatic conditions, etc.).

Employees are provided with personal protective equipment (PPE) in accordance with standard rules and regulations on working conditions; we continuously implement measures on disease prevention, organize compulsory preliminary (at the commencement of employment), and periodic medical examinations (diagnostic exams).

For maximum control of safe working behavior by peers, the new employees with less than 3 years of experience must wear a red helmet with the word «Warning» and clothing with «Warning» chevrons.

The Company organized a preliminary test of PPE, including latest developments of leading manufacturers in the industrial units and companies.

In 2014, the Company spent RUB 1,256 million on purchase of PPE or RUB 15.7 thsd per employees, including RUB 529 million and RUB 20.1 thsd in OJSC MMC Norilsk Nickel, respectively.

In 2014, the cost of medical examinations at the Russian companies of the Norilsk Nickel Group amounted to RUB 311 million including RUB 118 million spent at OJSC MMC Norilsk Nickel.


Personnel Participation in the Management of Occupational Safety and Health

In most of the companies of the Norilsk Nickel Group, we created and operate joint committees on health and safety, which include representatives of management, employees, and trade unions. The number of employees, of the companies with such committees is about 70 thousand people (more than 87  % of the Group's employees).

Authorized trade union and labor safety group representatives (1,650 employees) have been elected and participate in preventive work in the field of occupational health and safety carried by the production units of the Group. In 2014, authorized representatives on labor safety carried out more than 34 thousand audits and submitted about 6.8 thousand suggestions aimed at improving working conditions and safety.

Personnel Training on Industrial Health and Safety

In addition to the industrial health and safety training provided by the legislation, Norilsk Nickel offers employees a special adaptation course for newly hired employees and employees with less than three years of experience, the program of training for engineering and technical personnel of the mineral complex, and seminars on legislative changes in regulations on industrial health and safety.

In 2014, 24.5 thousand employees of the Norilsk Nickel Group passed pre-certification training, training, and certification in the field of industrial health and safety, including 4,250 people trained in OJSC MMC Norilsk Nickel. Training costs for industrial safety and labor protection in the Group amounted to RUB 45.2 million, including RUB 28.3 million spent by OJSC MMC Norilsk Nickel.

THE COST OF LABOR PROTECTION MEASURES
Indicators 2012 2013 2014
The cost of labor protection measures (RUB million) 6,422 4,095 3,742
including one employee (RUB thsd) 77 51 47
Indicators of preventive work in the field of industrial health and safety
Indicators 2012 2013 2014
Audits held:
By Committees on industrial safety and health (ths.) > 30 > 35 > 33
Targeted inspections by management, leading specialists, as well as company committees and their units (ths.) 18 16 7.7
Operational audits (ths.) 22 21 6.3
Comprehensive audits of status and control systems of industrial safety and labor protection 140 141 160
Revoked coupons from violators of labor protection requirements (ths. pcs.) 4.1 6.4 4.4
Workers brought to disciplinary action for violation of labor protection requirements (ths people) 7.1 7.6 6.9
Reduced bonuses for employees (ths. people). > 14 > 17 > 14
Awarded employees for active work in the field of labor protection and based on the results of checks on the reduction of occupational injuries rate (ths. people). > 10 > 7 > 5
For the total amount (million Rubles). > 42 > 42 >  35
INJURY INDICATORS
Indicators 2012 2013 2014
In Russian companies of the Norilsk Nickel Group
(1) Number of accidents associated with the production, with a fatal outcome 8 12 8
(2) FIFR 0.10 0.07
(3) Number of accidents associated with the production, with temporary loss of capacity for work 95 94 55
(4) LTIFR 0.80 0.47
(5) The total number of accounted accidents associated with the production in accordance with the labor laws of the Russian Federation (light + serious + fatal) 103 106 63
(6) The number of serious accidents 11 22 12
(7) The coefficient of professional diseases 216 206 226
(8) Coefficient of lost days 1.75 1.75 1.95
(9) Coefficient of absence in the workplace 81,45 86,97  64,22 
(10) Coefficient of absence in the workplace 5 310 5 446 4 913
(11) The total number of accounted accidents associated with с  the production in accordance with the с labor laws of the Russian Federation among the staff of contractors employed at  the sites of Russian companies of the Norilsk Nickel Group 13
(12) Out of these, fatalities 5
Distribution of fatal accidents By place of accident
marcer
In the course of mining operations
marcer
In the course of repair operations
Number of overhauled social and domestic facilities during 2003–2014
marcer
Sanitary and domestic
marcer
Sports and wellness
marcer
Catering service
marcer
Other
Distribution of fatal accidents By type
marcer
Worker falling from a height
marcer
Trauma by moving, rotating parts of machinery and equipment
marcer
Interaction of mobile equipment and workers (pedestrians)
marcer
Exposure to hazardous and toxic substances

The main reason for accidents that occurred (including fatal accidents) at the production sites is of organizational nature–namely, the failure of managers and specialists on labor protection to comply with their duties as well as a violation by victims of labor of production discipline, rules, and regulations on labor protection.

Program for Improvement of Social and Living Conditions of Workers

The companies in the Norilsk Nickel Group operate more than 2,000 social facilities (sanitary and domestic facilities, catering, sports and recreational facilities, health care, recreation facilities, etc.) with a total area of over 300 thousand m2. Under the Program for improvement of social and living conditions of employees of the Group, companies annually spend significant funds allocated for maintenance of these facilities.

In 2014, 11 Norilsk Nickel units located in the city of Norilsk, Taymyr Dolgan-Nenets Municipal District, Murmansk Region, and Saint Petersburg participated in this program.

During implementation of the program in 2014, RUB 333.5 million was spent on various work, including design and capital repairs for the amount of RUB 218.5 million, equipment purchased for RUB 115.0 million.


The Company completed comprehensive overhauls and put into operation 11 social facilities, with a total area of 6,578 m2. Working conditions were improved for 3,997 employees.

Altogether during the implementation of the program (2003–2014), the Group spent RUB 2,549 million, completed the overhaul of 163 social facilities, and purchased 338 mobile buildings.

The Norilsk Nickel Group intends to continue this program to improve social conditions of workers by improving and reducing the repair timing and bringing facilities up to modern requirements.

5.6. Dialog with Employees

All the enterprises of the Company have a «Code of Conduct», which contains the rules of corporate behavior and moral norms used during interactions both within the Company and with external parties.

In 2014, the regulation of social and labor relations in the companies of the Norilsk Nickel Group was implemented on the basis of social partnership with the workers' representatives: trade unions and social and labor councils. The Company provided all necessary conditions to ensure their activities: we provided the premises, furniture, communications, and office equipment; make payments for monthly membership fees on the basis of personal applications of employees.

THE SHARE OF EMPLOYEES PARTICIPATING IN THE TRADE UNION ORGANIZATIONS AT THE END OF 2014, %
Enterprises/group of companies Share
Companies located in the territory of the municipality of Norilsk and Taymyr Dolgan-Nenets
Municipal District
8
LLC Institute Gipronickel 9
JSC Kola MMC and subsidiaries 19
JSC Krasnoyarsk shipyard 24
CJSC Nordavia-RA 25
LLC Wellness centre Arctic 33
JSC Lesosibirsky Port 50
JSC Krasnoyarsk River Port 50
JSC Yenisey River Shipping 55
JSC Arkhangelsk Sea Commercial Port 64
Average for the Russian companies of the Norilsk Nickel Group 12

Trade union organization of employees of the Group located in the city of Norilsk, Taymyr Dolgan-Nenets Municipal District, Murmansk Region, Sochi are combined in the interregional public organization, the Union of Workers of OJSC MMC Norilsk Nickel, with more than 7 thousand participants.

In March 2014, OJSC Taymyr Airline created the primary trade union organization of flight crews Northstar at the basis of Trade Union of Russian flight crews.

All large enterprises have social and labor councils. Since 2006, we operate the Corporate Social and Labor Council of the Norilsk Nickel Group, which oversees the work of about 60 thousand employees of the enterprises of the Company located in the city of Norilsk and Taymyr Dolgan-Nenets Municipal District of the Krasnoyarsk Krai. Social and Labor Council of JSC Kola MMC, which is composed of representatives of social and labor councils operating in each of the internal divisions, represents 81  % of the employees.

To regulate social and labor relations, we organized working groups for collegial decision making: Commissions on the Collective Agreement, the Commission on labor disputes, the Commission/Committee on social benefits, the Commission on Social Security, Committee on Labor Protection, the Commission for regulation of social and labor relations.

Under the current system of social partnership, representatives of the employees have the opportunity to openly review production and social programs implemented in the enterprises, contribute to the special assessment of working conditions and implementation of measures to prevent occupational injuries and diseases among employees working in hazardous working conditions.

Offices on Production, Social, and Labor Issues

The primary goal of offices for the submission of production and labor issues is a timely response to the issues raised by employees (including retirees and veterans) and operational conflict resolution on the production, labor, social, and domestic issues; they also bring to the attention information of the Company/units on issues concerning workers. The offices conduct monthly monitoring of the social situation in the workforce, which enables to take the necessary measures to address the emerging issues raised in the form of submitted complaints and to eliminate cases of neglect of the needs and reasonable requests of workers.

In the territory of the Norilsk Industrial District, there are 22 offices for submission of social and labor issues. In 2014, they reviewed and resolved more than 35 thousand requests on social, domestic, legal, operational, and personal issues. More than 75  % of complaints received were from employees of the Company.

2012 2013 2014
The share of the employees of the Group covered by a Collective Agreement 92% 93% 94%
The share of employees of the Group represented in the social and labor councils 84% 84% 84%
The share of the Group's employees participating in unions 12% 12% 12%
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