CSI Forum 2009 Improving safety in the industry: CSI progress and priorities Antony Henshaw CEMEX / CSI

2 Background: Health and Safety 1 of 6 key areas identified in Agenda for Action CSI member commitments (2002): –develop standard, joint systems to measure, monitor and report –establish information exchange to share experiences and understand accident root cause –improve existing systems, procedures and training for tracking, following up and preventing accidents –report performance publicly in common format

3 Work to date ‘Guidelines for Measuring and Reporting’ ‘Examples of Good Practice’

4 Key Performance Indicators KPI’s (Cement only) Year 2003Year 2004Year 2005Year 2006Year 2007Year 2008 CSI Members reporting Total directly employed130,752138,940148,684172,133188,834190,747 Manhours, directly employed246m269m286m372m402m390m LTIs, directly employed1,6511,5851,6991,3811,3011,038 LTI FR, directly employed Number of Lost Days (calendar), directly employed No data 69,07467,03559,94970,566 LTI SR (calendar), directly employed No data Number of LTIs, indirectly employed (contractors) ,1991,2851,122 Number of Fatalities, directly employed Fatality Rate (per 10,000 directly employed) Number of Fatalities, indirectly employed (contractors) Number of Fatalities, third parties Total number of Fatalities

5 Good progress in LTIs reduction No Data Data here: cement-only LTI data for all activities shows similar positive downward trend

6 Poor progress on fatality reduction 2008: 220 reported fatalities CSI fatality incidence is unacceptable Activity Cement Aggregates1522 Readymix3345 Others*2520 Totals207220

7 Fatality rates: cement-only 2008: 133 cement-only fatalities (16 employee, 102 contractor, 15 third party) Similar total to 2007 Reduction in employee fatalities offset by increase in contractor fatalities 3

8 Peer comparison 3 (CSI contractor rate is estimated) Cement industry performance very poor compared to the Chemical and Oil & Gas industries Despite good practice sharing and ongoing safety commitments fatality rates are rising Likely to increase as CSI members expand into developing regions and construct new plants

9 Peer comparison: Oil & Gas Producers (OGP) Fatal Accident Rate Per 100 million hours worked OGP reported 11 employee and 87 contractor fatalities in 2007 for approximately 1.5 million employed (CSI is ~0.5 million) CSI Employee Fatality Rate: ~5 times higher than OGP In OGP, contractors have a higher fatality risk but only twice that of employees (but ~10 times higher for CSI) OGP main fatality causes are broadly similar, though vehicles accounted for only 30% in 2007, compared with 45% for CSI

10 Peer comparison: chemicals 3 Chemical industry reported 28 employee fatalities in 2005 for 1.04 million employed (no contractor data available) IE Employee Fatality Rate of ~0.27 per 10,000 employed compared with CSI Employee Cement-only rate of 1.73 IE CSI Employee Fatality Rate is ~6 times higher than chemical industry

11 Peer comparison: fatality prevention Fatality Prevention Review (2009): 31 companies consulted Focused on fatality prevention statistics and approaches to ascertain: –Best-performing companies –How they achieve success in fatality elimination –What the CSI can learn

12 Fatality rates “Class A”“Class B”“Class C”“Class D”“Class E” Employee Fatality Rate of < or = 0.1 Employee Fatality Rate of 0.11 to 0.25 Employee Fatality Rate of 0.26 to 0.5 Employee Fatality Rate of 0.51 to 1.0 Employee Fatality Rate of 1.01 to1.5 Akzo Nobel CAT Continental Exelon Fortum GE ITT Mondi Pirelli UTC ABB AEP BP Dow Shell Umicore Alcoa DSM ENI Evonik- Degussa Petro-Canada Rio Tinto Weyerhaeuser Alstom Goodyear Hoegh Stora Enso TNT Express Anglo- American BHP Billiton EON OGPCSI If CSI moved to “Class A” it could save up to 200 lives a year

13 Learning for CSI 70% have specific Fatality Prevention initiatives Successes: –UTC & Rio Tinto reduced fatalities by factor of 10 –ABB by factor 7 –AEP by factor of 5 Successes typically gained over 5 years, some 3 years

14 Key success factors  Highly visible CEO commitment  Senior Management safety training  Establishing safety “Golden Rules”  Strong safety management of contractors  Strong safety management of drivers  Rigorous fatality investigation procedures  Implement specific fatality prevention focus

15 CSI: Root case analysis Category Employee4542 Contractor Third Party4045 Totals Highest risk category of person: contractors

16 Root case analysis Highest risk area of work: driving and vehicles

17 CSI action Driver and Contractor Safety Initiatives started in November 2008 To eliminate driver and contractor related injuries and fatalities

18 Driver and Contractor Safety Driver Safety guidelines: –8 Safety Elements for Drivers –9 Safety Elements for Managers –Guidelines on Implementation of Safety Elements –Guidelines for Transport Contractor Management

19 Driver and Contractor Safety Contractor safety guidelines: –Safety Considerations for Contractor Management ( Prequalification, Contract Definition and Award, Pre-Commencement, Implementation, Handover and Acceptance, Post-Contract Review ) –6 Safety Elements for Contractor Management: –Guidelines on Implementing Safety Elements for Contractor Management

20 Implementation Gap analysis by each CSI member company on systems already in place Adoption of Good Practice documents within 5 years across all activities and regions Public updates on implementation progress

21 Pilot projects (contractors) Overseen by individual companies Review success in near future and assess CSI-implementation potential –USA (contractor prequalification) –Poland (contractor employee passports)

22 Key messages CEO-led initiative, expecting their approval and leadership Our injury performance as an industry is far from where we need it to be Without focused prevention initiatives we can expect our performance to worsen Industry support for the Driving and Contractor Safety Management documents will set us on the right path to zero fatalities

23 For more information … Driver Safety breakout session: This afternoon at Chromium room Task Force Co-Chairs: Jim O’Brien: Paul Corbin: