In this report

Our Company	PDF
Economic sustainability	PDF
Environmental responsibility	PDF
Social responsibility	PDF
Results and attachments	PDF

Social
responsibility

In only ten years of existence, the Company has invested RUB 2.2 billion in supporting local communities, social projects and charities. In 2010, the Company’s corporate social responsibility activities returned to levels seen before the financial crisis, with investments of RUB 418 million.

Since its formation, EuroChem has consistently increased its social investment, peaking in 2007/08 when we introduced accurate annual and medium-term planning for our social budgets. We also began to formalize our mutual obligations with the towns and regions where we work through agreements on social and economic cooperation. After being scaled back during the financial crisis of 2009, our social expenditure has now returned to pre-crisis levels. In 2010, for example, we embarked on a large-scale program to build hockey arenas in all the towns where we operate.

External social investments; assistance to towns, regions, and local communities; and charitable giving (RUB m)

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10 key features of our social responsibility

1. Social stability in the towns where we are present is supported by our commitment to ensuring the long-term stability of our business, including development projects linked to our social responsibility development strategy
2. EuroChem’s local communities enjoy relatively high standards of wellbeing and development, since the Company carries out significant social investments in the towns where it operates and its commercial success translates into more taxes paid locally
3. EuroChem wages are above average. Not only are they index-linked but they are also boosted by some of the best social packages in the industry
4. Excess resources produced by our facilities (energy from heat, electricity, water) are available for use by the towns where we operate
5. EuroChem contributes significantly to the quality of life of around 20,000 people and their families, by implementing agreed social programs based on our strategic principles
6. We enjoy good relationships with our local communities, working together to define areas of common interest and visions for the future
7. Our recreation and rehabilitation facilities are not restricted to corporate users, but are available to all residents
8. Decisions on social investment initiatives are taken in close consultation with local communities. The Company is ready and willing to support both short- and long-term plans
9. EuroChem has taken partnership working to a new level, with both local authorities and NGOs. This legal and organizational cooperation includes PPP projects, socio-economic agreements, grants, and joint programs
10. Our social policy aims to be fully accountable and transparent not only to stakeholders, but also to regional, federal and international organizations

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EuroChem’s CSR achievements in the last ten years

Preliminary results

1. We have been a key player in the reindustrialization of Russia: modernizing production, re-training thousands of employees, and forging a new modern image of Russian agro-chemistry which is based on sound economic foundations and is globally competitive on both price and quality
2. We have recruited more and more young professionals to the Company. Attracted by an exciting future, their commitment ensures our strategic stability
3. We have improved working conditions and safety for our employees at all our facilities, which now fully meet modern standards. We have restructured our system of HSE&Q on the basis of ISO 14001 and OHSAS 18001 within an integrated management system
4. We have played a key role in modernizing the social and engineering infrastructure in the towns where we work: over 60 buildings and services have been partially or fully repaired or refurbished with our support – kindergartens, schools, colleges, hospitals, sport and recreation centers, engineering utilities
5. Our social initiatives are forward-looking, effective and well-planned projects of international quality. They include: grant programs in Nevinnomyssk; the construction of hockey arenas in six different Russian regions, with associated children’s and youth sports schools; and a comprehensive social infrastructure development plan linked to our Gremyachinskoe potash project in Kotelnikovo

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Our HR principles

• developing a positive corporate culture, based on supporting and promoting the philosophy and values of the Company
• creating and developing a highly qualified, motivated and loyal team in each region where we work
• implementing effective succession planning and professional development in accordance with the Company’s priorities
• providing a safe working environment and helping to improve social and domestic conditions, which motivate staff to develop and work effectively
• creating and implementing a system of remuneration and incentivization which optimizes alignment of the interests and needs of the employees with the strategic goals of the Company
• ensuring social stability and the moral and psychological wellbeing of our teams, through the development of corporate social programs

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Case Study 3:
Vertical structure of the Company’s recruitment policy

During the last ten years we have built a vertical structure of potential personnel renewal to safeguard our business strategy. Our goal is to staff our operations and investment projects in a timely way to secure our strategic future.

>1,000
new specialists employed by the Company, including 182 in 2010 alone

>800
high-school graduates have gained places at the best universities under our target programs (82 in 2010)

1,113
students benefited from work experience in our Company in 2010. More than 1,000 students per year receive hands-on training at our facilities.

RUB 7.22m
spent on supporting new specialist staff in 2010

6
university partnerships (we have five-year agreements, both in force and pending, to implement targeted training at the universities)

>10
career days for university graduates held in the Company every year

27
EuroChem classes. This program represents our investment in school laboratory classes in chemistry and the sciences

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Case Study 4:
Personal protective equipment program

To ensure the health of its employees and improve working conditions at its plants, EuroChem is implementing a comprehensive program to provide employees with modern protective equipment.

RUB 66m
was spent on personal protective equipment in 2010

Results

• Increased levels of industrial safety
• Decrease in lost time incident rate
• Decrease in emergency-related costs

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Case Study 5:
Interaction with the Tuapse community

We have worked hard to ensure that situations similar to last year’s protest against the launch of the Tuapse terminal can be avoided in future.

Our actions

The ensuing public concern clearly showed us that we should have been more proactive in our dialogue with the local community, and should have provided more information on the nature of our operations, fertilizers and testing exercises. We believe this more proactive approach would have eliminated concerns that the terminal poses any threat to public safety, health or the environment. It was indeed a key lesson for us.

As a result, EuroChem took the following actions:

1 Informing the local community. Management invited delegations of environmentalists, journalists, NGOs and students to the terminal where we toured the facilities and demonstrated its compliance with environmental regulations.

2 Establishing ongoing two-way communication. A public viewing facility where anyone can learn more about the terminal and review relevant technical and legal documentation was opened in Tuapse. This information is also available online at http://otvet.yuga.ru/

3 Creating an environmental monitoring system. The Company has invested RUB 35 million in an environmental monitoring system which complies with leading European standards. Monitoring results from this system are displayed in real time on electronic screens.

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Case Study 6:
A public-private approach to children’s hockey

Joint social responsibility: adopting a public-private partnership model for developing hockey in Russia’s regions.

Progress so far

Over the last ten years, EuroChem has actively supported sport in a number of ways: the construction and refurbishment of sports infrastructure, sports schools and clubs, and sponsorship for sporting events. This work not only promotes healthy lifestyles, but also encourages children to take an interest in professional sport. For example, EuroChem has supported the hockey club ‘SKA St Petersburg’ since 2004, and has sponsored the ice hockey World Championships for the last three years.

In 2009 we also set up a corporate program to develop youth hockey, in partnership with the Russian Ministry of Sport, Tourism and Youth Policy. This program includes the construction of hockey arenas in the six regions where EuroChem works, the establishment of five new regional sports schools, the creation and support of junior sports clubs and teams, the promotion of ice sports, and sponsorship for teams to participate in national hockey competitions.

Our actions

We believe we have been successful in building a model where businesses, authorities and NGOs are united and share responsibility for the development of children’s sport. In our 2009 annual report (pp. 32-33), we explained how our approach, based on public-private partnership, was first used when building a hockey arena in Novomoskovsk. It is now being applied again for the construction of a similar arena in Nevinnomyssk.

1. The model is based on joint shared ownership of municipal property.
2. The model postulates that a hockey arena, with associated junior sports schools, will be at the heart of a ‘vertical structure of professional sport and sports centers’ for the local community.
3. EuroChem is looking to adopt a single PPP provision model, approved by the Ministry of Sport, Tourism and Youth Policy, for all its hockey arena construction projects. This would bring both consistency of design and commissioning, and cost benefits.

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