Key challenges

Xstrata's key safety challenge is the elimination of fatalities and critical incidents, with a particular focus on our South African businesses (Xstrata Alloys and Xstrata Coal South Africa), where the majority of fatalities and a higher proportion of high potential risk incidents (including serious 'near miss' incidents) has occurred.

Fatality and critical incidents prevention programmes

We remain committed to our belief that the goal of zero fatalities is achievable in our business. We recognise that low injury frequency rates alone are not an indicator of how major hazards are being managed and we have developed a very strong 'near-miss' reporting culture across our operations since 2002, to provide leading indicators of our performance in managing critical risks. Xstrata's HSEC Management Standards include a specific standard focussed on catastrophic hazards, which recognises the particular challenge these incidents represent. This standard is intended to ensure the Group has the culture, processes and structures to identify and manage high potential safety hazards over the life of our operations. Every operation was audited against this standard through the HSEC Assurance Programme in 2005 and the overall Group performance was above the 'satisfactory' level. Performance against this standard was better in Europe, South America and Australia than in South Africa.

The intensive fatality prevention programmes being implemented at these operations, combined with the improved cross-learning between our high performing operations and our South African businesses that the HSEC Assurance Programme has facilitated, is expected to improve performance and audit scores substantially for the region.

Franz Mazivhe 'sounds' the roof to check for roof fall hazards at Kroondal mine

An analysis of fatal and high potential incidents at Xstrata's operations since 2002 shows:

• there are three principal causes of critical incidents:
  • falls of ground;
  • mobile equipment; and
  • interaction of people and plant/machinery
• 92% of fatalities since Xstrata's listing in 2002 have occurred in southern Africa with approximately two-thirds occurring in underground mining operations;
• safety leadership is essential to managing major hazards and, particularly at the supervisor level in South Africa, needs to be enhanced;
• the majority of incidents have occurred due to a combination of inadequate hazard awareness and at-risk behaviour. Safety strategies, annual plans and targeted initiatives are addressing these issues, including improved supervisor skills and behavioural-based safety programmes at all operations to eliminate at-risk behaviour; and
• the reporting and analysis of high potential risk incidents, including 'near misses' provide an invaluable source of learning. Improved levels of high potential risk incident reporting often correspond to fewer critical incidents.

In 2004 we undertook a comprehensive analysis of our South African operations to understand why fatal incidents occur more frequently in this region – a factor common to all producers operating 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.

From the final quarter of 2004 and during 2005, intensive fatality prevention programmes were developed and implemented at all South African operations to tackle the key causes of fatal incidents and to address the challenges our analysis identified. Following fatal incidents in 2005, a thorough assessment of Xstrata's fatality prevention programmes was conducted together with external experts, to determine whether our programmes were addressing the correct key risks to the greatest extent possible. This analysis confirmed that our overall fatality prevention programme in South Africa is correct and is beginning to show significant improvements in behaviour and leadership. However, the programme seeks to change attitudes and eliminate at-risk behaviour and, as such, requires a long-term approach and ongoing commitment. Xstrata's Board is monitoring progress carefully and both our South African businesses, Xstrata Alloys and Xstrata Coal SA, are required to provide the Board HSEC Committee with six-monthly progress reports on their fatality prevention programmes.

While a large number of initiatives are underway across our commodity businesses to achieve continuous and sustainable improvements in safety performance, this chapter focuses on the key elements of our initiatives to tackle fatalities and critical incidents, as the primary safety challenge we face. In response to the key risks identified above, our fatality, critical incident and injury prevention programmes concentrate on the following:

• high potential risk incident ('near miss') reporting;
• behavioural safety programmes;
• leadership and training programmes and performance criteria;
• contractor management; and
• improved safety management systems and safe working procedures to manage key risks such as interaction between people and vehicles or mobile equipment (see case study) and roof falls.

High potential risk incidents ('near miss') reporting

Since 2002, Xstrata's operations have focused on recording, reporting and investigating high potential 'near miss' incidents, as an important leading indicator of safety performance and a critical learning tool to avoid fatalities. High potential risk incident reporting has steadily increased across Xstrata's businesses during this time period, indicating improvements in hazard identification and often corresponding to improved safety performance. In 2005, 226 high potential risk incidents were reported across Xstrata's operations, compared to 168 in 2004. Regular reviews of high potential risk incident reporting are undertaken to ensure all employees and contractors continue to improve awareness of 'near misses'.

All critical and high potential risk incidents are reported monthly to the Xstrata Executive Committee and quarterly to the Board and are investigated by a team of senior operations and safety personnel to determine their underlying causes and to develop preventive action plans. The investigations into high potential risk incidents form an integral part of safety training, hazard identification and management and are a valuable source of improvements to safety plans and systems.

Behaviour based safety programmes

Addressing the behavioural issues that contribute to safety incidents is one of Xstrata's major safety challenges. Behaviour based safety programmes require a collaborative, problem-solving approach by managers and employees to identify appropriate and inappropriate behaviours, which are then incorporated in behaviour inventories and used by personnel to monitor peer behaviours in a participative setting. Targets are set against inventories and progress against records of observations is monitored and shared.

Behaviour based safety programmes are in place or are being implemented at every Xstrata operation globally, with a particularly intensive effort in South Africa in 2005 and 2006. These programmes have been developed in consultation with employees and internationally recognised safe behaviour experts.

The majority of South African employees have been trained in the methodology of behavioural safety and the observation of unsafe or at-risk behaviour. Programmes specify safe and at-risk behaviour; and techniques include task observations; training for management, observers and employees in safety self-management; goal setting; and positive reinforcement through an incentive scratch card system that provides immediate monetary rewards for demonstrated safe behaviour. Observations are recorded and necessary corrective actions implemented. The introduction of the behaviour-based safety programmes and other initiatives have not only improved the management of major hazards but have also resulted in a substantial improvement in injury performance across the South African sites. For example, Tavistock Colliery improved the frequency of lost time injuries from 0.6 per million hours worked in 2004 to 0 in 2005 and the TRIFR from 3.8 in 2004 to 0.5 in 2005.

Enhanced safety leadership in South Africa

Xstrata Coal's General Manager Health and Safety was seconded to South Africa in 2005 to facilitate the development of a five-year HSEC strategy and accompanying safety plans, and to transfer best practice safety skills from our high-performing Australian mines.

Xstrata Alloys established a Sustainable Development Department in 2005, led by a member of the senior management team and supported by external consultants. The Department's primary aims are to ensure an integrated approach to health, safety, environment and community programmes across Xstrata Alloys through an overall sustainable development strategy and balanced scorecard, and to drive their fatality prevention programme.

Remuneration at both South African businesses has been reviewed and reweighted to ensure the emphasis is on rewarding safety management and safe behaviour by the business at every level. At Xstrata Alloys, HSEC performance now represents at least 60% of all management bonuses. Clear evaluation criteria have been set and performance is linked back to the balanced scorecard. At Xstrata Coal, 80% of supervisors' performance bonus and between 40% and 50% of lower level employees' total performance bonus is now dependent on safety criteria. For senior management, the overall safety performance of the business unit determines 40% of the bonus amount.

Supervisor training

Xstrata Coal identified hazard awareness, incident investigation, supervision and safety coaching skills as key areas for improvement amongst employees, contractors and supervisors and as a priority in addressing fatalities in South Africa.

In response, Xstrata Coal South Africa, in collaboration with independent experts, created a comprehensive off-site 28 day training programme, designed to improve supervisory skills particularly in the area of safety management (see case study on pages 62-63). This training programme has been described as an example of global best practice by an independent safety professional who reviewed Xstrata Coal South Africa's fatality prevention programme in July 2005. All Xstrata Coal South Africa supervisors completed this training programme in 2005 and all newly appointed supervisors are required to complete the course. All managers completed a safety management course to complement the supervisor training and impart the specific knowledge and skills managers require.

Technician completes safety walk around of vehicle at Ernest Henry mine

Xstrata Alloys has been closely involved with the development and roll-out of Xstrata Coal's supervisor training programme and this business unit is adopting a similar model in 2006, learning from Xstrata Coal's experience. All Xstrata Alloys supervisors will be trained in four modules – self empowerment through emotional intelligence; resource management; people and team management; and managing discipline in the workplace. Following training, a continuous evaluation programme will be implemented to ensure skills transfer and an ongoing focus on improved safety leadership and coaching. All managers are being trained in incident investigation and are participating in further HSEC management training.

Unsafe acts contribute to the majority of injuries at Xstrata Zinc operations. To address this, we initiated a campaign in 2005 focussed on safe behaviour training awareness and motivation that includes supervisors and will continue into 2006. Hazard assessments for all materials and activities will be completed during 2006 at all Xstrata Zinc operations and will be complemented with the improvement of incident investigation activities, including root cause analysis, to determine the fundamental reasons of injuries and their prevention.

Engaging and consultative management approach

Employee participation in identifying hazards and managing safety risks is imperative to our success in achieving zero injuries or fatalities at our operations. Health and safety information and reporting structures were revised during the year and new structures adopted across our businesses to facilitate greater employee participation, including improved communications in a range of languages and using a wide range of teaching methods to overcome lower levels of literacy.

In north Queensland and South America, Xstrata Copper and Xstrata Zinc have implemented the Positive Attitude Safety System (PASS), which encourages peer review and open discussion of observed deficiencies and desired behaviours. PASS is a dynamic safety process that assists line management to encourage, support and reinforce safe behaviours, activities and attitudes. This creates a positive safety environment, which supports employees' safety habits and encourages employees to bring forward their ideas on safety improvements.

Hazard assessments and incident investigation training

Hazard assessments form an important part of managing risk and safety at our operations. Comprehensive risk assessments are completed for identified major hazards at each site and codes of practice, standards and procedures are revised and updated in response. Hazard awareness training is undertaken using awareness mock-ups.

Incident investigations have revealed that we need a more practical tool which our employees and contractors can use to minimise risk in the workplace, particularly in South Africa. A number of initiatives are being developed to address this, including a series of 'Golden Rules' developed for each hazard at Xstrata Alloys and the '12 Cardinal Safety Rules' developed at Xstrata Coal South Africa, in consultation with employees. In addition the Visible Veld (field) Leadership Programme is being used. This programme involves mine managers calling together work teams to stop work and identify safety hazards. Photographs are taken of the hazards, the work team identifies a solution and the mine managers ensure the solutions are implemented. The team is also advised when the safety issue has been rectified. At Xstrata Alloys, an interactive simulated training programme is used to teach hazard identification and corrective actions.

In 2005, our South African operations implemented ICAM – the incident, cause, analysis method of incident investigation – to investigate all lost time, restricted work and high potential risk incidents. ICAM is a recognised investigation and data analysis method used by a number of companies around the world to enable quick and easy identification of the root causes of an incident. ICAM aims to prevent recurrence and to advance safety by examining why incidents happen. Our training programme is encompassing all heads of department, managers, and operating managers, who are trained in lead or basic investigation techniques.

Contractor management

Improved contractor management has been identified as a key focus area for our businesses to achieve our aim of a fatality-free business. Our HSEC Standard: Contractors, Suppliers and Partners requires the systematic selection, engagement and management of contractors, suppliers and partners who provide Xstrata with products and/or services. Systems are required for monitoring contractor performance and regular audits are undertaken to ensure compliance to Xstrata's Standards, with financial penalties for non-compliance or dismissal.

George Fisher Mine: Morning Crew attending a communication meeting

Overall our Group performance against this standard fell slightly short of the satisfactory target with all regions performing above this level except for South Africa. The South African HSEC improvement programmes are also addressing this deficiency, in particular through the supervisor training programme and their contractor management systems.

Contractor management has been identified by Xstrata Zinc as its primary area of focus for safety improvements, together with behavioural safety programmes. In response to the fatality of a contractor at a zinc operation in Spain in 2005, a Contractor Safety Supervisor has been appointed specifically to oversee major externally contracted work and ensure compliance against Xstrata's safety standards and procedures at Xstrata Zinc operations in Spain. The frequency of safety inspections has been increased and increased financial penalties are being imposed for non-compliance. Along with current safety plans, each contractor will define specific preventative actions and safety targets, which are assessed quarterly.

Improved safety management systems and safe working procedures

As previously identified, the key risks associated with Xstrata's operations are interaction between people and mobile equipment and roof falls underground.

Xstrata Alloys identified collisions between people and mobile equipment underground as its most pressing safety risk and set about developing new technology, fitted to each employee and contractor's safety helmet to alert people underground and operators of mobile equipment to their proximity to one another. See case study.

Underground mining expertise from Xstrata Coal's Australian operations was employed at some South African underground operations to assist in identifying improvements to management systems and safe working procedures and to prevent falls of ground.

In November 2005, Xstrata Alloys conducted an intensive one-week evaluation of mining and ground control practices in collaboration with recognised industry experts such as Professor Jim Galvin, Consultant Mining and Rock Engineer (Australia); Professor Neilon van der Merwe (University of Pretoria); Dr Mike Roberts (MiningTek CSIR); and Tony Jagger, Consultant Geologist and Rock Engineer (South Africa). Xstrata Alloys is implementing a number of leading practice initiatives arising from this review. These include the compilation of structural geological plans that map all dominant geological features, to enable better mine planning and avoidance of roof fall incidents.

Noise monitoring equipment at Minera Alumbrera's truck workshop