4.1. Labour Safety Management

Activities aimed at ensuring safe labour conditions, protecting lives and health of employees, eliminating or mitigating fire, emergency and accident risks at hazardous industrial facilities, and promoting the process safety culture rely on the Integrated System of Process Safety Management of PJSC Gazprom (ISPSM).

The Occupational, Industrial, Fire and Road Safety Policy of PJSC Gazprom ensures a unified approach to industrial safety issues in all companies of the Gazprom Group. In 2019, the Policy was updated to include road safety provisions.

The Policy sets the following goals:

• to create a safe working environment and to protect the lives and health of the employees;
• to reduce the risks of accidents and incidents at hazardous facilities;
• to reduce the risks of production-related road accidents;
• to ensure fire safety.

The ISPSM activities are regulated by a set of documents within PJSC Gazprom’s standardization system, with STO Gazprom 18000.1-001-2014 Integrated System of Process Safety Management. Key Provisions being the fundamental document in this regard.

In order to enhance the ISPSM, the PJSC Gazprom Process Safety Management System Development Strategy until 2021 has been developed and is currently implemented.

The Strategy outlines the following priority development areas:

• commitment and leadership;
• staff motivation;
• safety communications development;
• investigation of incidents and micro injuries;
• management of occupational and industrial safety risks.

To achieve the performance targets set out by the Strategy, the Company has developed and approved the PJSC Gazprom Target Program for Process Safety Assurance until 2020Approved by order of PJSC Gazprom No. 581 dated October 3, 2018..

The main objectives of the Program are as follows:

• to develop process safety regulations and procedures;
• to establish an efficient process safety management framework;
• to develop qualitative and quantitative criteria for process safety assessment;
• to reduce unplanned losses from accidents.

In the reporting year, 33 process safety by-laws and standardization documents were developed and adopted, and over 30 documents were being drafted.

PJSC Gazprom develops and implements measures aimed at improving each separate element and the overall effectiveness of the ISPSM.

Gazprom Neft has a vertically integrated process safety management system. The fundamental by-law regulating process safety at Gazprom Neft is the Policy on Industrial and Workplace Health, Safety and Environmental Protection; Fire and Transport Safety; and Civil Defence, which is coordinated by the Process Safety Department.

In 2019, Gazprom Neft restructured its collegial decision-making bodies in charge of process safety.

At Gazprom Energoholding, the managing directors of generating and heat supplying entities are responsible for ensuring compliance with process safety requirements, while chief engineers of these entities and power plant branches coordinate relevant activities.

Gazprom Neftekhim Salavat has in place the Occupational and Industrial Safety Management System which was developed in line with the requirements of OHSAS 18001:2007 / ISO 45001:2018, GOST 12.0.230-2007, GOST 12.0.007-2009, GOST R 54934-2012 / OHSAS 18001:2007. The requirements of the System apply to and are mandatory for all employees of Gazprom Neftekhim Salavat LLC. The Deputy Director General — Chief Engineer of Gazprom Neftekhim Salavat LLC performs overall supervision over the functioning of the occupational, industrial, and fire safety system. Supervision over the methods and procedures to be observed is performed by the Environmental, Industrial, and Occupational Safety Directorate.

The Gazprom Group has put in place and keeps developing corporate communications that promote an open dialogue between employees and the management on process safety issues.

As regards process safety, the interests of employees are represented by the Gazprom Workers’ Union Interregional Organization, trade unions of subsidiaries and entities, and occupational safety representatives within trade unions. Employees of subsidiaries and entities make suggestions on the ISPSM improvement through their occupational safety representatives and receive the required information about the possibilities to participate in the system.

The General Collective Agreement of PJSC Gazprom and its Subsidiaries for 2019–2021 sets forth the following obligations:

• to ensure health and safety at workplaces for employees;
• to provide employees with special clothing, footwear, and other personal protection equipment;
• to investigate accidents and cases of occupational diseases;
• to conduct preliminary and regular medical examinations (check-ups) and mandatory mental health evaluation of employees;
• to provide employees with milk and hot meals.

The technical labour inspectors of the Gazprom Workers’ Union Interregional Organization, as well as trade unions’ officers authorized to manage occupational safety issues (in total 6,300 people) exercise control over the compliance with the labour legislation and other regulations containing labour law provisions, as well as the compliance with the conditions provided for by collective and labour protection agreements.

Occupational safety committees (commissions) are functioning in all subsidiaries and entities of the Gazprom Group. Representatives of the employer and representatives of the elected body of a trade union organization are included in them on a parity basis.

To prevent or mitigate the impact of hazards on PJSC Gazprom’s employees, contractors, visitors and other stakeholders, Gazprom has arranged relevant hazard identification, risk assessment and risk management procedures aimed at ensuring process safety. They are set forth in the corporate standard STO Gazprom 18000.1-002-2020 Integrated System of Process Safety Management. Hazard Identification and Risk Management for Process Safety PurposesOrder of PJSC Gazprom No. 37 dated January 30, 2020..

In 2019, the ISPSM requirements were revised to align with ISO 45001:2018 Occupational health and safety management systems. Requirements with guidance for use, and corporate standard STO Gazprom 18000.1-002-2014 was amended to integrate the procedures of process safety hazard identification and assessment and management of identified process safety risks into PJSC Gazprom’s Risk Management and Internal Control System. Apart from that, risk assessment methods were combined and reporting documentation was unified.

In 2019, Gazprom identified its process safety hazards and assessed its process safety risks. The procedure revealed no critical risks.

The following significant risks were identified:

• the risk of injury to employees exposed to items and parts that move, fly, or rotate;
• the risk of injury in a road accident;
• the risk of an industrial safety accident as a result of a loss of containment observed in process equipment and devices at hazardous industrial facilities;
• the risk of a fire.

The following insignificant risks were identified:

• the risk of an employee being injured when falling on a flat surface: in 2019, the risk was reclassified as insignificant due to a 77% decrease in the number of cases compared to 2018 as a result of the measures planned and subsequently taken at PJSC Gazprom;
• the risk of injury as a result of exposure to an electric arc.

In 2019, in order to identify the causes of accidents, the subsidiaries and entities of PJSC Gazprom introduced a procedure aimed at determining the root causes of accidents and analysing these causes. The procedure was adopted for the development and implementation of measures to prevent process safety accidents and violationsSTO Gazprom 18000.4-008-2019 Integrated System of Process Safety Management. Analysis of Root Causes of Incidents. Procedure for their Identification and Development of Preventive Measures was approved by order of PJSC Gazprom No. 208 dated May 31, 2019..

The analysis of root causes is designed to help reveal all the factors contributing to accidents, as well as identify the events accompanying them. The findings are used to inform the employees of PJSC Gazprom’s structural units, branches, subsidiaries and entities about an accident and its causes, and to develop and implement measures aimed at preventing and/or reducing the possibility of similar accidents.

The Safety Framework is a project of Gazprom Neft primarily seeking to prevent accidents with catastrophic consequences by creating relevant protective and preventive barriers. This effort to build and implement barriers to key risks is now being implemented across the entire Gazprom Neft. An independent inspection panel was set up to oversee the presence and quality of the barriers created within the Safety Framework project, as well as to analyse the effectiveness of the actions taken which is measured as the efficiency of the barriers.

In 2019, Gazprom Energoholding completed a large-scale effort to identify, assess, and eliminate process safety risks. Each entity of Gazprom Energoholding appointed and trained persons responsible arranging this process. The findings of the risk assessment were included in roadmaps, with consistent work being currently performed to mitigate the identified risks depending on their level of hazard and severity of consequences.

Serious risks are to be addressed first, while most other risks are to be eliminated within a calendar year. The remaining risks were mitigated and will be fully eliminated following the implementation of the measures planned under the repair and investment programs of the Gazprom Energoholding companies.

In Gazprom Neftekhim Salavat, hazard identification, risk assessment and development of risk management activities for the purposes of occupational and industrial safety are regulated by STO 18.02.2019-ISO Hazard Identification and Risk Management. Routine hazard identification and risks assessment exercises are carried out on an annual basis. Unscheduled hazard identification and risk assessment are performed in the event of:

• upgrade, overhaul or replacement of equipment;
• introduction of changes into production processes when planning any special (non-standard) works;
• amendments of legal and other requirements related to identified hazards and risks and/or related control measures;
• changes in working conditions and/or work procedures;
• accidents and incidents.

The results of hazard identification, risk assessment and development of activities are included in the annual report on the functioning of the ISPSM for their review by senior management. Should additional risk management measures be required, they are selected in a hierarchical order, from the complete elimination of a hazard to the use of personal protective equipment.

To prevent occupational, industrial, and fire safety risks, as well as to reduce their impact on employees, PJSC Gazprom develops and carries out activities aimed at eliminating risks, reducing the severity of consequences observed as a result of accidents, introducing safer technologies instead of the existing ones, and implementing administrative barriers within the management procedures.

To improve process safety performance, PJSC Gazprom develops and carries out activities aimed at enhancing each separate element and the overall effectiveness of the ISPSM.

For 2019, the Gazprom Group set the following process safety goals for its companies:

• to create a safe working environment and to protect the lives and health of the employees;
• to reduce the risks of accidents and incidents at hazardous facilities;
• to ensure fire safety at the Group’s facilities.

89 subsidiaries and entities of PJSC Gazprom were successful in achieving their occupational, industrial and fire safety goals, while 13 subsidiaries did not achieve them. In the companies that failed to accomplish the goals, a variable pay serving as an incentive pay was included into their remuneration in line with the Methodology for Assessing Delivery of Occupational, Industrial and Fire Safety Objectives at PJSC Gazprom Subsidiaries and EntitiesApproved by Order of PJSC Gazprom No. 196 dated April 23, 2018..

PJSC Gazprom developed and implemented the programs aimed at achieving the goals set. All subsidiaries carry out programs of actions seeking to improve the labour conditions, as well as plans of actions designed to ensure industrial safety at hazardous industrial facilities.

The performance against the current goals is monitored on a weekly basis by the authorized Directorate of PJSC Gazprom.

In 2019, the first cycle of implementing a risk-based approach to process safety was put into practice and tested within the perimeterof Gazprom Neft. Key risks were identified at the corporate level, with 31 scenarios developed for incidents with catastrophic consequences. For all scenarios, cause-and-effect models were developed to reflect the relations between underlying factors, a potential incident and its consequences.

All companies of Gazprom Energoholding monitor the progress and effectiveness of the process safety activities on a quarterly basis.

In terms of process safety, all companies introduce key performance indicators as regards total and fatal injuries. In 2019, the target values were achieved. Zero fatal accidents occurred at production facilities, and there were no accidents at hazardous industrial facilities in the reporting year.

In 2019, Gazprom Neftekhim Salavat achieved five process safety goals out of seven. At workplaces, no cases of fatal injuries and no injuries from falling on a flat surface were recorded. The number of employees who saw an improvement in their working conditions increased by more than 5%. The number of accidents and incidents decreased by 50% compared to the medium-term linear forecast over the past five years. No fires were recorded in the reporting year.

Based on the results of the process safety risk assessment and the analysis of process safety laws, regulations and other requirements and possible improvements, the following process safety goals are set at PJSC Gazprom for 2020 (Executive document No. 03-233 dated October 11, 2019):

• to create a safe working environment and to protect the lives and health of the Company employees;
• to reduce the risks of accidents and incidents at hazardous facilities;
• to ensure fire safety at PJSC Gazprom’s facilities.