Sustainability website / Safety / Fatality Prevention

Policy and approach

Major hazard management / Near-miss reporting / Contractor Management

Major hazard management

An analysis of fatal and serious near-miss incidents from 2002 to 2004 identified that over 90% of fatalities occurred in South Africa, with over two-thirds occurring as a result of falls of ground in underground operations and interaction between people and mobile equipment underground. ‘At-risk’ behaviour by employees and contractors was a further major contributing factor.

In 2004 we undertook a comprehensive analysis of South African operations to understand why fatal incidents occur more frequently in this region – a factor common to all producers in southern Africa. Our analysis found that in this region, hazard awareness and identification skills were less well developed and employees and contractors had a less risk-averse attitude than in other regions. In addition, employees were accustomed to an instructional management style and did not always challenge supervisors or middle managers on safety issues. Supervisors in particular were identified as requiring enhanced safety leadership skills and best practices were not always shared at divisional level across other sites in the commodity business or between businesses. Finally, cultural differences and the very wide range of languages spoken by employees may have impacted on the effectiveness of training programmes.

To address these factors, Xstrata’s South African businesses implemented intensive fatality prevention programmes in 2004 which have continued to evolve since then, to respond to specific identified risks. These programmes focus on addressing the following causes of critical and fatal incidents, identified through an analysis of fatalities, high potential risk incidents and other critical incidents:

• Safety leadership, especially at the supervisor level
• Hazard awareness and at-risk behaviour
• Falls of ground in underground mining operations
• Interaction between pedestrians and mobile equipment or vehicles

Both of our businesses with operations in South Africa (Xstrata Alloys and Xstrata Coal) continue to report on their progress every six months to the Board HSEC Committee. These reports track key performance indicators and progress against fatality prevention plan objectives and have shown clear and rapid improvements in all areas since the programme’s inception.

In other regions, our fatality prevention programmes are also focusing on improved contractor management, selection and supervision, increased security to protect employees and contractors from intruders and behavioural safety training.

These nitiatives have achieved improvements in our South African underground operations, in particular in eliminating injuries from roof fall incidents. No fatalities or critical incidents occurred in 2007 as a result of pedestrian interaction with vehicles underground. These improvements follow the development of new technology to avoid collisions between pedestrians and mobile equipment underground and advanced research into ground penetrating radar and rock mechanics, resulting in enhanced mine plans and roof support structures.

In 2007, mobile equipment continued to be the major cause of fatalities and serious incidents, although the focus has shifted to surface operations. Operational integrity and load shifting hazards are the second and third most significant causes of these incidents. Initiatives under way in 2007 and 2008 are focusing on these identified major hazards and each commodity business has refined their safety strategy by integrating leading practice prevention programmes for each of these hazards.

Xstrata’s Mount Isa Mines has developed a leading practice asset management and operational integrity programme which is being shared within the Group. The process has been developed over a three-year timeframe working with external specialists and internal engineering and maintenance teams. The programme covers all elements of operational integrity from design through to maintenance. Xstrata Alloys has sent a team to Mount Isa to observe and understand the programme to enable the key elements to be replicated at our South African operations.

Operational integrity was also identified as a key risk at a number of former Falconbridge operations. Capital investment increased in 2007 to enhance site-level safety resources, improve environmental performance and improve operational integrity and process safety. For example, safety and operational integrity expertise and resources have been enhanced at Xstrata Nickel’s Falcondo operation in the Dominican Republic, recognising the various challenges facing the operation which comprises an oil refinery, mining and ferronickel production operations and exploration properties across a number of sites. An external expert was engaged to perform a process safety review which highlighted the need for more automated process control. A project manager has been assigned to support the General Manager in implementing the required improvements. As a result of this project, levels of process control have been materially improved in critical areas such as the oil refinery, and the frequency of significant incidents have decreased.

To accelerate learning across the Group, core teams from underperforming operations visit our top performing sites for specific programmes. These sites and leading practices are identified through our Sustainable Development Assurance Programme and are shared across the Group in our annual ‘Good Practices‘ guide. For example, in 2007 teams from Australian underground operations visited our South African operations to learn about their advancements in the use of ground penetrating radar.

Leading examples from within the commodity businesses are also shared through the Group Executive Committee and monthly management reporting. Each commodity business CEO reports on initiatives to address major hazards in presentations to the Board HSEC Committee.

To identify opportunities for improvement and ensure these processes are robust and effective, every operation is integrating a formal review process of major health, safety, environmental and community hazards into their strategy review and business planning process by the end of 2008.

SD Management Standard 8: Operational Integrity
SD Management Standard 3: Behaviour, Awareness and Competency

Near-miss reporting (lead indicators)

Major hazard management / Near-miss reporting (lead indicators) / Contractor Management

Xstrata has required all operations to report high-potential risk or near-miss incidents across its operations since 2003. All high-potential risk incidents are reported on a monthly basis to the Group Executive Committee and are an important leading indicator of safety performance. Greater levels of reported incidents help to improve safety performance and procedures across the Group. All incidents are investigated and findings are incorporated into safety management procedures and guidelines as an important tool in preventing future incidents. In 2007, 291 high-potential risk incidents were reported across the Group compared to 326 incidents in 2006, including acquired operations from the date Xstrata assumed management control in each year.

SD Management Standard 11: Contractors, Suppliers and Partners

Contractor Management

Major hazard management / Near-miss reporting (lead indicators) / Contractor Management

With the increased demand for skilled labour globally, the effective management of contractors has been identified as a high-risk safety issue and is a focus for all commodity businesses, particularly in the development of large-scale capital projects.

Contractor management and supervision is integrated into each commodity business’s safety strategy and plans. In 2007, initiatives to improve contractor management were implemented across the Group. Contractor management programmes include the following requirements:

• Contractors are selected according to defined sustainable development criteria and a risk-based assessment of past performance
• Contractors are subject to the same focus and expectations as Xstrata’s employees including adherence to Xstrata’s Business Principles and Sustainable Development Framework
• All high-risk contracted roles or tasks are identified and closely monitored
• Supervision, contact and observation of contractors has been increased across the Group
• Where practicable, we have minimised the number of individual contractor firms being used at any one site
• Feedback on sustainable development performance is provided throughout the duration of the contract with consequences for non-compliance.