Health, Safety and Environment Committee (“HSEC”) report
The HSEC of NWR was established by the Board at the end of 2007 and met for the first time in May 2008.
The role of the HSEC
The HSEC was established to assist the Board in its oversight of health, safety and environmental risks within NWR and its subsidiaries including the Group’s compliance with applicable legal and regulatory requirements associated with HSE matters. Thus the HSEC provides the Board with additional focus, insight and guidance on key Group HSE issues and global trends.
How the HSEC functions
The HSEC has seven specific duties allocated to it by the Board. These are:
- to oversee the Group’s performance in relation to health, safety and environmental matters;
- to review the policies and systems within the Group to ensure compliance with applicable health, safety, and environmental legal and regulatory requirements;
- to review reports and meet with senior management in subsidiaries to discuss the effectiveness of the Group’s policies and systems for identifying and managing the HSE risks that are material to the achievement of corporate objective;
- to liaise with the Audit and Risk Management Committee to ensure adequate oversight of the Group’s systems for managing risks;
- to monitor the impact of operations on Group reputation;
- to prepare the HSE section of the Annual Report of NWR; and
- to report to the Board on key global HSE issues and trends.
Composition
The HSEC comprises of Independent and Executive Directors to ensure that the committee has the appropriate balance of independence and knowledge of operations to discharge its functions. The members of the HSEC are: Paul Everard (Chairman), Mike Salamon, Klaus-Dieter Beck and Steven Schuit. Two external experts regularly attend the meetings and these are Stan Suboleski and Karl-Friedrich Jakob. Going forward, the meetings will also be attended by Ján Fabián, Chief Operating Officer of NWR who was appointed in November 2008. Mr.Fabián is responsible for the operations of KARBONIA PL and OKK.
Activities undertaken during the year
In 2008, the HSEC met twice in compliance with its charter, and conducted two site visits to OKD mines in the Czech Republic. At the meetings, it reviewed the health, safety and environmental reports of the operations of NWR, and reported the results of its meetings to the Board and to the Audit and Risk Management Committee. Included in the reviews are detailed reports on extraordinary events that occur at the operations. These events include fatalities, incidences of spontaneous combustion, coal and gas outbursts, and rock bounces. Reports of health problems as well as regular environmental reports are also reviewed. The HSEC also endorsed the general safety objectives of the NWR operating companies.
Health and safety report
The safety record continued to show an improving trend in 2008, with an Injury Frequency Rate (IFR) at 36.6 per 1 million hours worked (down from 2007 of 40.5), comparable to large, best practice mining companies. However, this improved performance was marred by the deaths of seven underground employees during the year, which represents an increase of three fatalities from the previous year.
In January at the ČSA mine, one fatal incident occurred as a result of crossing a belt line; in February at the Lazy mine, one fatality occurred at a longwall face; two deaths occurred in early July at a longwall face at the Darkov mine; one death occurred in mid July at the Paskov mine at a longwall face; and two deaths were caused by a major bounce impact at the ČSA mine in November.
The Company takes fatalities extremely seriously. OKD, the labour union, and government representatives investigate such accidents and the findings are forwarded to the HSEC for further analysis and recommendations.
In 2008, the LTIFR was 13.05 for OKD and 2.75 for OKK, a reduction from 2007’s figures of almost 17 per cent and 39 per cent respectively. The majority of accidents at OKD happen on the longwall and on the development sections that the mining authorities attribute to personal miscalculation or underestimation of risk. Continued improvement has been targeted as part of the safety programme for 2009.
OKD implemented a broad programme of safety improvements during the year, including the introduction of new personal protective equipment, improved footwear, brighter lights and less cumbersome batteries, reflective clothing, and less bulky self-rescue units. It also began to install new ventilation systems with integrated de-dusting of the air stream, introduced weekly safety audits at selected operations, and instituted a programme of regular safety briefings and meetings with both management and labour. This is an ongoing process and more improvements are planned.
By far the largest improvements in health and safety will result from the Productivity Optimisation Programme 2010 (POP 2010) initiative. The project aims to introduce state-of-the-art mining machinery at both the production faces and the development roadways. Five new longwall systems, equipped with the latest shield designs and state-of-the-art dust control systems have been introduced since mid-year 2008. Four new, modern road headers, equipped with improved spray systems and atmospheric monitoring, and two sets of loaders in combination with drilling machines were also placed in service during the year. The equipment modernisation programme will continue throughout 2009 leading to a total of 10 new longwalls and 12 modern development sections.
During the year, 13 incidents of spontaneous combustion (high CO2 rates) occurred and 29 incidents of seismic events exceeding 0.1 megajoules (MJ) were also reported. Both numbers represent an increase from the previous year. One major step to reduce the impact of these events was to further reduce the daily advance rates of the affected or higher potential risk longwall faces.
Primary health risks stem from worker exposure to dust, noise and vibration. Incidences of these decreased during 2008 when compared to 2007. These areas continue to be the focus of the NWR operating companies and the HSEC.
A new central air-conditioning unit, rated at a final cooling capacity of 15 MW, was placed in service at the ČSM mine in December 2008. This unit will improve the working climate at the working faces.
In 2008 at OKK, the measures of accidents were at a level of 50 per cent compared to the average of the preceding five-year period.
The positive change can be attributed to a number of improvements. In particular, there has been an improvement in the quality of employee education and training, and increased responsibility for safety performance has been placed on all Company employees. Safety principles and rules have been pertinently included in the Collective Labour Agreement.
Within the past year, a safety control system has been implemented within OKK. Every job-related accident was and is being investigated with the highest priority of an extraordinary event. Technical measures are often adopted to prevent similar accidents from reoccurring. This has been particularly true in the area of equipment maintenance.
Environmental report
The HSEC reviewed environmental reports on water and air pollution control, waste disposal, hazardous chemical management and control, and the reclamation of old mine sites. There were no substantial issues in these areas in 2008 and no significant deficiencies were cited by any of the regulating authorities. OKD has developed an environmental impact plan to the year 2010 and work is ongoing on the extension of this plan to 2015. In 2008, OKD spent CZK 365 million on mine subsidence abatement and CZK 71 million to reclaim old mining areas. The figures represent an increase of 62 per cent and a reduction of 23 per cent compared to 2007.
At OKK, the key environmental programme in 2008 involved the implementation of the “Chemical Processes Hermetical Sealing” CAPEX project in the total amount of CZK 89 million. Completed in December 2008, the hermetical sealing of chemical processes prevents any contacts of noxious substances with the ambient atmosphere. The original hermetising medium – coking gas – was replaced with a new medium – nitrogen. The new technology eliminates the disadvantages of coking gas as a medium (pipelines clogged with naphtalene, rust). This project results in an increased operational certainty of the coking plant chemical processes and moderates the risk of any noxious substance leaking into the air.
Assessment of HSEC activity
The HSEC believes that it carried out the functions set out in the HSEC’s charter.
The charter is available on the NWR website at: www.newworldresources.eu.