Stakeholder Engagement
The key stakeholders of MMC Norilsk Nickel include the Company’s employees, shareholders and investors, business partners, regional and local governments of the Company’s regions of operations, NGOs working in these regions, as well as stakeholders at the federal level and international organizations. The Company bases its stakeholder engagement activities on the following fundamental principles:
Norilsk Nickel follows the policy of information openness aimed at providing all stakeholders with accurate and as complete as possible information on its key activities. In its stakeholder engagement activities, the Company uses various forms and methods of disclosing information and obtaining feedback, and employs the most effective means of communication. Information on the most important events in the Company’s life and its performance is communicated to all stakeholders via the corporate media including the corporate website, corporate blog, Norilsk Nickel corporate magazine, various other print publications, as well as annual and social reports, which are prepared in Russian and English and are made available at the corporate website (for more details see Section 1.3. Information Policy). In order to study views of its stakeholders and get their feedback, the Company conducts regular polls of stakeholder representatives and analyzes comments posted to the corporate blog, as well as written communications sent to the Company. Maintaining close relationships with its stakeholders helps the Company identify stakeholders’ expectations and address their requests on a timely basis. Mutual accommodation of interests of the Company and its stakeholders is achieved through a direct dialogue with stakeholder representatives maintained by way of negotiations, establishing and running joint working groups and standing commissions, holding conferences and forums, as well as various meetings and consultations. Social dialogue with the employees Employees of the Company’s divisions and SDCs are one of the key stakeholder groups of MMC Norilsk Nickel, and the Company gives priority attention to maintaining and developing relations with this group. MMC Norilsk Nickel is committed to observance of human rights in accordance with the Constitution of the Russian Federation, the Russian legislation, and universally recognized principles and norms of the international law, as stipulated by respective declarations and conventions, as well as guidelines of the International Labor Organization and other international organizations. The Company recognizes the right of its employees to associate and establish organizations according to their choice as an inalienable element of freedom of association and collective bargaining. The Company follows the principle of prohibiting any form of discrimination or forced labor, making sure that every worker has equal opportunities to realize his of her labor rights regardless of sex, race, nationality, origin, financial and social status, job position, age, place of residence, religious orientation, political convictions, or any other circumstances unrelated to his or her professional qualities. The Company works to make sure that all workers have equal opportunities to realize their potential, receive impartial and fair evaluation of their performance, and are selected and advanced solely on the basis of their professional abilities, knowledge and skills. The Company strictly adheres to legal requirements prohibiting workers under the age of 18 to work in harmful and/or hazardous work conditions, and observes norms prohibiting the use of women’s labor in jobs with arduous and hazardous working conditions in mining industry. Employee satisfaction surveys The Company conducts regular surveys of employee satisfaction with the key conditions of their employment, including organizational and technical aspects of working conditions, OHS at the workplace, remuneration level, opportunities for professional development and career growth, disclosure on significant issues, handling of employees’ suggestions and complaints, and general relationship climate at the workplace. The surveys also cover staff satisfaction with the performance of various levels of management, employees’ attitudes to their work, loyalty to their entities, potential of personnel turnover, and social well-being of various employee groups. Survey results are used in elaborating managerial decisions on social and labor issues. Employee surveys at the Company’s entities are conducted under conditions of strict anonymity and confidentiality. Sample survey methods are used with sample sizes sufficient to enable comparison between different entities and divisions. The 2009 employee satisfaction survey In the second quarter of 2009, an employee satisfaction survey was conducted among the staff of the Company’s divisions and subsidiaries operating in Norilsk. Similarly to the previous years, the survey demonstrated a high level of general job satisfaction (80% of employees were completely or generally satisfied with their jobs), and loyalty of most staff members to their entity or company. The survey revealed significant increase in employee satisfaction with professional development and career growth opportunities, particularly among younger staff members, and increased satisfaction with workplace conditions in terms of occupational health and safety. Given the clear position of the Company’s top management with regard to maintaining stable production volumes at the Russian entities of the Group, staff satisfaction with employment guarantees also increased (increased confidence in job stability, less concerns about potential loss of job). The satisfaction indicators with regard to remuneration level, disclosure of information, handling of employees’ suggestions and complaints remained at the previous years’ levels. Some decrease in employee satisfaction with organizational and technical aspects of working conditions terms was observed at a number of entities. At the same time some entities showed positive changes in most satisfaction indicators. The survey results were reviewed by the top management of the Company and its respective divisions and subsidiaries. On the top management’s request, a system of measures to address local (at the level of individual entities) and more general issues identified by the survey has been developed and implemented. In addition to general staff satisfaction surveys, the Company practices regular thematic employee surveys to provide information basis for managerial decisions in various areas (adaptation of young employees, effectiveness of corporate health improvement and recreation programs, including those aimed at employees’ children, provision of protective clothing, workplace amenities etc.). Shareholders and investors MMC Norilsk Nickel bases its shareholder and investor relations on the principles of direct constructive dialogue in accordance with the existing legislation and generally accepted international practices. The Company works to ensure the maximum possible transparency of its operations, providing its shareholders and investors with timely and equal access to information on its performance. The Company’s body in charge of shareholder and investor relations is the Investor Relations Department. The Company’s shareholder and investor relations activities are focused on the disclosure of relevant information on its activities and performance. In accordance with the legal requirements concerning rights and legitimate interests of shareholders and investors, the Company prepares, publishes and submits to the Federal Service for Financial Markets and Russian stock exchanges (CJSC SE MICEX and OJSC RTS) annual reports, securities issuer’s quarterly reports, statements of material facts, and statements of facts which may have considerable influence on the value of the issuer’s securities. The Company ensures trading of its shares on the Russian trading floors CJSC SE MICEX and OJSC RTS by means of regular disclosures of information in accordance with the listing requirements of the stock exchanges. In addition, the Company ensures circulation of its Level 1 American Depositary Receipts on a number of foreign trading floors, including IOB, London Stock Exchange – UK; OTC Market – New York, USA; Freiverkehr, Berlin-Bremen Stock Exchange – Berlin, Germany. The dividend policy of MMC Norilsk Nickel approved by the Company’s Board of Directors in 2002 envisages using 20–25% of IFRS net income for dividend payments. Given the circumstances of the global financial crisis and considerable decrease in prices of the Company’s metal products, on May 21, 2009 the Company’s Board of Directors approved its recommendation to the General Shareholders’ Meeting not to pay dividends for 2008. At their Annual General Meeting held on June 30, 2009 the shareholders of OJSC MMC Norilsk Nickel upheld the Board’s proposal and decided not to pay dividends for 2008. The management of MMC Norilsk Nickel holds regular meetings with shareholders and investors to discuss current operations of the Company and its development plans and to learn about the views of minority shareholders. The information voiced during such meetings is then considered in further decision making. In 2009, seeking to improve its information transparency and to meet information needs of the investment community, the Company:
As a result of the Company’s activities aimed at business analysts, in 2009 leading investment banks issued more than 70 analytic reports on its performance. Relations with business partners The Company seeks to deal with its business partners – suppliers and customers – based on the principles of transparency, fairness, impartiality, and ethical business conduct. The Company practices a socially responsible approach to selecting its suppliers and customers and identifies potential partners through analysis of the market, also taking into account companies’ public reputation and their approach toward corporate governance and social responsibility. The Company prequalifies potential providers of goods and services, paying particular attention to their business conduct. The Company purchases its major inputs via tenders, ensuring transparency of the procurement process by:
The Company chooses its customers based on selection criteria that take into account their reliability ratings and global reputation. The Company develops its relations with customers based on corporate sales standards. It seeks to deliver products conforming to established standards, at the same time meeting specific customers’ demands to the maximum extent possible. The Company gives priority to securing long-term contracts with consumers of metal products, particularly with the end users who use nickel to manufacture steel, alloys, and other products. The prices are determined based on the international practice. The Company’s sales policy is flexible, allowing customers to seek payment extensions and improved delivery conditions. The Company carries out annual surveys among all of its domestic and foreign customers to find out their views on delivery conditions, product quality and packaging. The Company evaluates the degree of customer satisfaction with the quality of products and delivery services. The Company has created and maintains electronic databases of customer complaints regarding all types of Company’s products and nonconformances with delivery conditions. Customer complaints are reviewed and addressed in accordance with the established corporate procedures. The Company’s representatives have been participating in annual events for metals producers and consumers – London Metal Exchange Week (since 1998) and London Platinum Week (since 2003) – and in various international conferences on the development of metal markets, giving presentations and participating in receptions and meetings organized for business partners. Stakeholder engagement with regard to environmental performance The Company continuously monitors existing and drafted environmental legislation and regulations. The interested bodies of the Head Office, as well as Company’s production units and SDCs are kept informed of new developments via electronic Register of Legal and Other Requirements. The Register is updated as appropriate, but at least once a month. Assessments of environmental compliance are carried out in the course of day-to-day operations of the Company’s entities, and by way of internal environmental inspections of Company’s divisions and SDCs. The internal environmental inspections are carried out on the basis of the corporate Regulations R GMC‑NN 120-001 2007 “Conducting Environmental Inspections at the Facilities of OJSC MMC Norilsk Nickel”. The internal environmental inspections include a review of external requests and communications from state environmental authorities. In general, the Company operates in compliance with the requirements established or approved by state environmental authorities according to the existing environmental legislation. For each case of environmental non-conformance, goals, objectives and measures to bring the operations into compliance are identified. Engagement with regional governments and non-governmental organizations Norilsk Nickel maintains productive relations with the governments of its regions of operations based on mutually beneficial cooperation and accommodation of interests of various groups participating in socio-economic processes. Concluding socio-economic cooperation agreements is an effective mechanism of engagement with regional authorities. Such an agreement between OJSC MMC Norilsk Nickel and the Krasnoyarsk Region Administration was signed in April 2009. At the time of the economic crisis, fulfillment of obligations in the field of social and economic cooperation with regional and municipal authorities became one of the top priorities of the Company’s social policy. In the reporting year, Norilsk Nickel took measures to keep consumer prices in Norilsk and Dudinka cities at the 2008 level by maintaining stable rates for socially significant works and services (freight shipping services, cargo handling at Dudinka Seaport), and stable rental rates for warehouse space leased by the Polar Division and Company’s SDCs. This helped prevent significant increase in prices of food and other basic consumer goods in the cities. Norilsk Nickel operates in several Russian regions differing in terms of their geography, demography, and socio-economic situation. Taking these differences into account, the Company’s management pays particular attention to the needs of northern cities and towns, including Norilsk, Dudinka, Monchegorsk, and Zapolyarny, and to the development of Nickel settlement. The aggravation of economic context of the Company’s operations in 2009 did not affect Norilsk Nickel’s contribution to social and economic development of the areas. The funding of regional investment programs and financial assistance to municipal authorities remained at the previous year’s level. In particular, the Company continued funding the reconstruction of Alykel airport1 (the overall cost of the program in 2009 amounted to RUB 100 million), helping improve the safety and regularity of flights. Six hundred tonnes of fuel oil were donated to Nickel settlement for creating necessary fuel reserves for the coming winter. Norilsk Nickel is the largest taxpayer in the Krasnoyarsk and Murmansk Regions, and also the largest employer in a number of cities and towns. This places a great responsibility upon the Company, making cooperation with regional and municipal authorities even more important. The Company keeps the authorities continuously informed of forecasts and prospects of its development and possible changes in the employment sphere. At the time of crisis, Norilsk Nickel paid particular attention to the protection of jobs, thus contributing to maintaining social stability in its regions of operations. On the Company’s initiative, a roundtable meeting on the issues of employment in the Far North areas was held in Norilsk in June 2009. The meeting participants include members of the regional parliament and representatives of administrations of Norilsk, Taimyr, Evenk Autonomous Okrug, as well as Turukhansky and Severo-Yeniseisky Districts. Formation of regional and municipal budgets prepared based on the “result-oriented budgeting” principle was another area of particularly close cooperation between the Company and regional and municipal authorities. In order to help the areas relieve their budget constraints, the Norilsk Nickel top management decided to shift the date of corporate income tax refund due to the Company in 2009 to the year 2010. This provided additional RUB 5 billion for the Krasnoyarsk Region budget and about RUB 1 billion for Norilsk municipal budget in the reporting year. Throughout the year the Company maintained constructive relations with non-governmental organizations, social movements, branches of political parties and other civil society institutions. For example, Norilsk Nickel jointly with Green Russian Environmental Movement organized a scientific and practical conference titled “New Approaches to Addressing Environmental Issues of Industrial Operations”, which was held in Monchegorsk in May 2009. In 2009, the Company’s cooperation with regional governments, municipal authorities and civil society institutions significantly contributed to addressing important social issues, providing assistance to vulnerable social groups, and safeguarding of cultural, ethnic, and historical heritage. Engagement with the federal-level stakeholders The Company works with federal legislative and executive authorities in order to ensure representation and communication of its interests in the committees, commissions, expert panels and task forces created by the state authorities with the involvement of the business community. The Company also uses its participation as an opportunity to promote socially significant projects. The Company’s representatives participate in parliamentary hearings and roundtable meetings organized by the Council of Federation and the State Duma of the Federal Assembly of the Russian Federation. The Company productively cooperates with non-governmental non-commercial organizations and sectoral associations representing the interests of the business community, including the Chamber of Commerce and Industry of the Russian Federation, and the Russian Union of Industrialists and Entrepreneurs1. When interacting with the state authorities, the Company considers it a priority to achieve a balance of interests between businesses, their employees, communities in the areas of operations, and the society as a whole. In particular, the Company participates in the development of the Strategy of Socio-Economic Development of the Far East and Baikal Region for the period until 2025, and the Strategy of Socio-Economic Development of Siberia for the period until 2020. Within the framework of a public-private partnership, the Company contributes to the implementation of an investment project aimed at the development of mineral resources in the Zabaikalsky Region, including the construction of Bugdainsky and Bystrinsky ore mining and processing plants and associated transport infrastructure. The Company actively participates in forums, conferences, and other public events organized by state authorities of various levels. In February 2009, the Company participated in the 6th Krasnoyarsk Economic Forum, in June – in the Saint Petersburg International Economic Forum 2009. In September 2009, Norilsk Nickel took part in the 8th International Investment Forum “Sochi-2009”, being a sponsor of the event, and in the Third Russian-Indian Forum on Trade and Investments as an Official Partner. In October the Company participated in the First Murmansk International Economic Forum MEF-2009. The forums provided a national level platform for a dialogue between leading Russian businesses, government, and the expert community. In particular, the Murmansk Forum was dedicated to economic cooperation in the Barents Euro-Arctic Region in a new post-crisis situation. International cooperation Being one of the world’s largest mining and metal corporations, the Company sells most of its products in foreign markets. Therefore it pays particular attention to cooperation with international sectoral associations and non-governmental organizations, aimed at mutually beneficial sharing of best practices in production, environmental, social and other spheres. Membership in international organizations opens new opportunities for expanding the Company’s business in terms of both attracting foreign investments and improving access of Russian companies to international markets. Managers of MMC Norilsk Nickel participate in the activities of a number of international non- profit institutions, including the Nickel Institute, United States – Russia Business Council (USRBC), the International Platinum Group Metals Association, and the International Metallurgists Union. In cooperation with leading foreign mining and metal companies – participants of the International Platinum Group Metals Association – the Company since 2002 has been implementing a sectoral program to combat the theft and illicit trafficking of materials bearing precious metals of Russian and foreign origin. Long-term experience of productive cooperation with international organizations ensures successful implementation of projects of different scale and complexity. The Company works with the Asia-Pacific Economic Cooperation (APEC) implementing certain projects on behalf of the Russian Federation, in particular, participating in the APEC Mining Task Force (MTF). Norilsk Nickel’s participation in the MTF meetings provides additional opportunities for pursuing Company’s interests in the Asia-Pacific Region through participation in the projects designed by the MTF. In 2009, Vladimir Strzhalkovsky, General Director and Chairman of the Management Board of MMC Norilsk Nickel, was elected chairman of the Business Council for Cooperation with Indonesia. Indonesia is one of the most promising trade and business partners of Russia in the Southeast Asia region.3 Through its representation in Russian employer associations, the Company interacts with the International Organization of Employers (IOE), in particular, participating in sharing experience in the field of CSR. The IOE has organized a special Corporate Social Responsibility Working Group in order to elaborate a consolidated position of employer organizations. ______________________ |
