Social responsibility
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25.02.09
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EuroChem corporate social responsibility principles
EuroChem views its corporate social responsibility as a voluntary contribution to economic, ecological and social activity which provides for the sustainable development of the company itself, the areas where it is located and society as a whole.
The policy of social responsibility does not contradict the company's commercial interests and takes into account the current and future needs of the main stakeholders. EuroChem's corporate social responsibility consists of three blocks - corporate social policy, corporate social activity and corporate social reporting.
EuroChem's corporate social policy is a pattern of conduct formulated on a general corporate level which is carried out by the enterprises in the regions of their economic and production interests; it means performing legislative norms and voluntary obligations and is also directed at ensuring a balance between business profitability, the opportunities for long-term development and the socio-economic development of the regions.
EuroChem's social policy is strategic in nature, fixed in a series of documents and integrated into the company's corporate culture.
The framework document which determines the fundamental principles of EuroChem's social policy is the Strategy for the Development of the Joint-Stock Company for the Period up to 2012.
The following are declared in the Strategy:
- the optimal balance between the growing effectiveness of the main business of the company and steady, voluntary participation in the socio-economic development of Russia;
- the open and public character, continuity and prolonged
institutional effect of the company's social activity;
- the increased effectiveness of the company's social investments through the creation of a system of "partner" projects and innovational
management technology in the area of social responsibility;
- ensuring regular investment in the development of labor resources taking into account the enterprises' future needs for qualified personnel.
It is also stressed that the choice EuroChem's social engagement areas relies upon targeted and systematic approaches, and corresponds to Russian initiatives and international standards in this area.
Corporate social activity consists of the practical measures for bringing about corporate social responsibility. Corporate social reporting is the process of informing stakeholders of the progress and results in the area of social responsibility.
The goal of the company's activity in the area of social responsibility is achieving sustainable development based upon economic, ecological and social conditions.
Corporate social responsibility EuroChem is called upon to provide for:
- the growth in the level and quality of life of company personnel and the public involved;
- the steady socio-economic development of the regions where the company is located;
- the development of specialized industries (the chemical industry, agriculture, power utilities, etc.);
- preserving social and ecological sustainability in the regions where the company's activity takes place.
The company actively participates in the socio-economic development of the regions where its enterprises are located, making large-scale social investments. Altogether in 2007 investments of a social nature came to more than RUR 470 million. From this total, RUR 185.5 million were for the support of sports and a healthy lifestyle, RUR 22 million for investments for education, and RUR 64.6 million for urgent regional needs.
A special focus of activity in the area of corporate social responsibility is the implementation of a reporting process which corresponds to the principles and procedures of international standards and Russian initiatives in this area. By the end of 2007 EuroChem had published two social reports: for the 2002-2005 period and for 2006. The corporate social report of EuroChem for 2006 was independently verified by Veritas Certification Bureau for compliance with the GRI version G3 social reporting standard.
The publication of the social report enabled the following
in 2007:
- to disclose a significant volume of information on the company's activity in the area of corporate social responsibility;
- to increase the quality the management of investments in sustainable social development.
Measures to prepare for 2007 social reporting were also carried out.
On the whole, in 2007 EuroChem conducted its economic, production and commercial activity relying upon the principles of corporate social responsibility and reporting.
Social investments and charity
In 2007, when carrying out its external social policy, EuroChem continued the transition from one-off contributions to charity and social support:
- to regular planned social support of regions as part of agreements on social and economic cooperation;
- to social investments on the basis of programs and institutional approaches.
The company consistently increases the amount of funds invested and the social and economic effectiveness of social investments.
The external corporate social policy is based on the following principles:
- compliance with the adopted investment priorities (support of sport and a healthy lifestyle, education and science, the sustainable development and social needs of territories where the company is active);
- targeting social investments at lessening the company's social risks,
- increasing the effectiveness of social support and social investment, achieving real effects of the development of the territory and the strengthening of corporate reputation;
- the development and implementation of effective technologies and models of social investment.
The management aspects of company social policy within the framework of risk management are also stated in Chapter 3 of this Report.
The principle of regular planning of social support and the rejection of spontaneous social payments is consistently employed during the realization of social policy. This principle is realized in the practice of annual agreements on socio-economic cooperation concluded between EuroChem and the regional and local authorities. The amounts and specific targets of social support and social investments are established in these agreements.
Taking into account the nature of the company’s production operations, great attention is paid to financing measures for environmental protection and the implementation of resource-saving technology.
In particular, an agreement with the Administration of the Tula Region for 2007 included: the introduction of technology which lowers the negative effect of industrial equipment on the environment (RUR 60 million), reconstruction of the Cultural and Business Center and the Training Center of Azot (RUR 34 million), support of sports and a healthy lifestyle (RUR 6.6 million), the development of science and education (RUR 5 million). In 2007 the sports facilities of one of the schools of the city of Novomoskovsk were reconstructed, the learning facilities of the Novomoskovsk Institute of the D. I. Mendeleev Russian Chemical and Technical University were re-equipped, funds were allocated to renovate the main hall of the V. M. Kachalin Novomoskovsk Dramatic Theater, and material support was given to war and labor veterans.
An agreement with the administration of the Krasnodar Territory and the municipality of the Belorechensky district in 2007 included the participation of EuroChem-BMU in the construction of a youth sports center (RUR 4.4 million), opening of the third specialized chemistry classroom at middle school No. 18 in the village of Ryazanskaya and providing additional equipment for the existing classrooms in Belorechensk and the village of Pshekhskaya (RUR 1.5 million). EuroChem-BMU received the title of "Best Corporate Benefactor of 2007" for its active involvement in charitable activity in 2007 from the Commission for the Development of Charity and Volunteerism of the Council for Assisting the Development of Civil Society Institutions and Human Rights of the Head of the Administration of the Krasnodar Territory and "Volunteer," the Krasnodar Center for the Support of Citizen Initiatives .
Implementation of Human Resources
Management Policy
People are the foundation upon which all company activity is built.
When both EuroChem and the whole industry are growing, this is one of the most valuable resources for the company, and it is in short supply. In its striving to succeed, EuroChem tries to find, hire, train, develop and retain talented, versatile, mobile and motivated employees who share the philosophy and values of EuroChem while developing a general unified culture and conduct requirements both in business and in society.
BASIC PRINCIPLES AND METHODS
A promising human resources management program was created and approved by the Board of Directors in 2007, expressed in the form of a HR-Strategy for the industrial enterprises for the period 2008-2012.
The purpose of the Human Resources Strategy of EuroChem is to unite the values and culture of the company with efforts in the area of hiring, retaining, developing, motivating and managing personnel and through this to reach any business goals which are set (which are defined in the company's business strategy). Furthermore, one must have long-term action plan scenarios and methods for evaluating results.
The HR-strategies are carried out taking into account a series of basic principles which guarantee EuroChem's long-term sustainable development.
- Ensuring a balance between economic and social effectiveness;
- The development of a favorable corporate culture and EuroChem's positive work values;
- Unwavering compliance with legal requirements;
- An accent on professional and personal growth within the company for promising employees;
- Creation of a secure working environment which stimulates excellent results and teamwork;
- The creation of a transparent and objective system for the evaluation of the results of each employee's contribution;
- The construction of an understandable, just and transparent system of leadership and management;
- An understanding that diversity is a competitive advantage.
Based on the HR-strategy, and adhering to corporate principles, EuroChem achieved significant success in 2007 in the area of human resources management.
PERSONNEL EFFECTIVENESS
As a unified organizational system, EuroChem has been improving the effectiveness of corporate management systems for many years and has been simplifying the management structure; promising new production methods come to replace ineffective production methods, and as a result the qualitative and quantitative structure of employment changes. As a result of improving the effectiveness of business processes and work productivity, the company's average headcount for 2007 decreased by 9.9%, and the headcount by 9.2% (the average headcount on 01.01.2008 was 22,656 persons).
PERSONNEL MOTIVATION AND SOCIAL GUARANTEES
EuroChem personnel policy motivation is oriented at providing a competitive salary level in accordance with the growth in the productivity and effectiveness of the enterprise's activity. The structure of the company employee's income consists of three main portions: salary, compensation based upon annual results and payments of a social nature. Competing for leadership positions in its industry, EuroChem MCC takes the issue of providing a worthy level of income to its workers most seriously. The level of salary differs at company enterprises, but the general approach consist of providing a competitive growth of salary levels from year to year.
EuroChem adheres to the principle of the transparency of plans for increasing the real content of salary for all its employees. Every year the company issues directive documents which fix the intentions for increasing the average salary level at each production enterprise. This provision is reflected in the collective bargaining documents. In 2007, as in previous periods, there was in increase in the real income level of worker salaries provided through a two-stage indexation of the tariff rates and salaries of EuroChem workers (in April and in October). The level of indexation was determined using the results of a comprehensive analysis of the situation and forecast tendencies for the development of regional labor markets and salary levels in the main industrial sectors of the economy. EuroChem upholds the principle of worker salary level differentiation based upon a comprehensive evaluation of their productivity, professionalism, and the level of responsibility given.
The average monthly salary as a whole for all EuroChem enterprises in 2006 was 16% higher than the average monthly industrial salary in the Russian Federation and 55 % higher than the average salary in Russia as a whole. The company's policy in the area of regulating staff compensation provides for the average annual level of salary at each industrial enterprise to be no less than 10% higher than the indicator for the main sectors of regional industry.
In all recent years, EuroChem has increased the guaranteed portion of the salary. In the future it is planned to increase the constant portion of salary to no less than 70%. By this indicator, EuroChem defines itself as a socially-oriented company.
As for social guarantees, EuroChem has a system of benefits as part of the relevant social programs established in the Collective Bargaining Agreements. Striving to support a high level of competitiveness and social responsibility, EuroChem forms its budgets for payments of a social nature with annual indexation of the average amount of payments of a social nature per employee no less than the inflation level for the year.
Video about social projects of EuroChem in Nevinnomyssk.
Video about rest of children in Tuapse.
Video about the opening of first-aid post in Nevinnomyssk.