9. Social
Impact Management

9.1. Personnel: Management and Development

Personnel is the main asset to the company. As in the previous years, one of the most important tasks set by the company is to ensure that the rights of its employees are respected and supported. Sakhalin Energy is committed to upholding human rights of its employees, as stipulated in the International Labour Organisation (ILO) Declaration on Fundamental Principles and Rights at Work, including non-discrimination, the prohibition of the use of child and forced labour, the right to associate, to form trade unions and to join them, collective bargaining and conclusion of contracts and agreements, as well as the creation of safe and favourable working conditions for the company’s employees, as well as contractor, subcontractor, and agency personnel.

Sakhalin Energy provides equal opportunities for all job applicants and employees in strict accordance with well-defined and generally accepted recruitment rules and labour standards, and prevents any discrimination.

Sakhalin Energy undertakes to develop and comply with regulations related to the work of personnel in all aspects of employment relationships, including recruitment, selection, hiring, assessment, promotion, training, maintaining discipline, development, payment of compensations, and termination of employment contracts.

9.1.1. Approaches to HR Management and HR Policy

The HR Directorate meets the company’s manpower needs, which includes preparing organisational changes for upcoming large-scale projects, training and retaining staff, and attracting skilled employees from shareholder companies and the external labour market. The Directorate is guided by the following strategic priorities:

  • attract, hire, and retain the most talented employees in the global energy market by relying on our internal talent pool, the expertise of shareholder companies, and other sources;
  • invest in the professional and personal development of Russian specialists to ensure staff retention and the formation of a successors pool for key managerial and engineering positions;
  • offer an attractive and competitive Employee Value Proposition;
  • promote simple and clear HR processes using lean manufacturing methodologies and high-quality HR information systems;
  • develop an effective collaborative work environment that unites employees working in the offices and at the assets of the company.

The company’s senior management believes that all employees should feel engaged in their work, be confident the company supports and respects them, and be given the opportunity to contribute to the growth of the company using their knowledge, skills, and abilities. Employee engagement is measured annually via employee opinion surveys and is viewed as one of the most important indicators of employee work satisfaction at the company.

The Use of the SAP HCM Automated System

The company’s HR Directorate makes maximum use of human capital management software, namely HCM SAP, in the implementation of the HR Policy. This allows us to significantly reduce time and costs and to optimise many processes in the HR Directorate and other units of the company. In particular, the system modules used by the company automate the preparation of HR documents and reports and aid in managing important processes such as learning and development of personnel, succession planning, competence assessment, and recruitment.

 

According to the employee opinion survey conducted in 2018, the level of staff engagement was 85%. Having surpassed the results of other Russian companies, the identified figures for 2018 are leading in the industry. Employees continue to note the company’s high degree of responsibility in the field of safe and quality work performance, occupational safety and environmental protection, equipment reliability and process safety, and are ready to recommend the company as a good employer.

In September 2018, the company held a regular HR Managers Week with the participation of representatives of shareholder companies and Sakhalin Energy’s senior management. The goals of the event were to enhance the professional competence of the HR Directorate personnel, to familiarise them with new trends in personnel management, and to exchange experience with shareholder companies.

To pursue these goals and objectives, Sakhalin Energy implements its HR strategy through its HR policy.

The HR policy is an integral and strategic set of methods, tools, and documents that governs the company’s relations with its employees and helps it to promptly respond to changing conditions in the global oil and gas market and the market of qualified professionals. All required notifications regarding changes in employment conditions are communicated to the employees as required by labour legislation of the Russian Federation.

The HR Director and the Committee of Executive Directors oversee the development, modification, and approval of the company’s HR policy. These processes are based on our HR management policy, which is in line with international standards.

9.1.2. General Information

As of 31 December 2018, the total number of people employed by the company was 2,298, including 2,134 Russian employees. Sakhalin Energy operates mostly in the territory of the Sakhalin Oblast, Russian Federation. There were 2,274 employees working in this region, and 24 people employed in the Moscow office.

The company strives to hire Russian citizens, mostly Sakhalin residents, to work on the Sakhalin-2 project. This is the approach set forth in the company’s HR policy and complies with the terms of the PSA project. At the end of 2018, the number of Sakhalin Oblast residents working at the company was 1,243 people, which is 54.1% of the total personnel.

At the end of 2018, 28% of the company’s employees were working on a rotational basis and living in hotels and rotational camps built and equipped in accordance with Russian legislation and best international practices.

Personnel Structure in 2018

 

Total, persons

including, persons

Total, %

including, %

Female

Male

Female

Male

Russian personnel

2,134

629

1,505

93

99

91

including Sakhalin residents (58% of the Russian personnel)

1,243

494

749

58

79

50

Foreign personnel

164

8

156

7

1

9

Total

2,298

637

1,661

100

100

100

 

The personnel structure is mandated by the specific nature of the company’s operations: 87% are managers, specialists, and salaried workers, approximately 61% are office employees, and the rest work at the production assets of the project.

Personnel Structure in 2018 by Assets

438 of 2134 Russian employees were in managerial positions (see the Managerial Personnel Structure chart), 223 of which are residents of the Sakhalin Oblast. In order to increase the share of Russian executive personnel, the company is training, developing, and promoting existing Russian staff, and actively recruiting new qualified Russian specialists. The implementation of the Traineeship Programme, as well as the formation and development of successors pool make it possible to meet the company’s needs for junior technical staff through the recruitment of trainees (see Sections 9.1.7.4. Traineeship Programme and 9.1.7.5. Successors Pool Planning and Development).

Managerial Personnel Structure in 2018

 

Total, persons

including, persons

Total, %

including, %

Female

Male

Female

Male

Russian personnel

438

89

349

86

20

80

including Sakhalin residents (51% of the Russian personnel)

223

68

155

44

30

70

Foreign personnel

69

1

68

14

1

99

Total

507

90

417

100

18

82

In 2018, 113 employees were granted child care leave. Of these, two fathers used this right. During the same period, 47 employees (45 women and two men) resumed their job duties at the end of their child care leave. Of these, 36 people continued their employment with the company.

About 28% of the company’s employees are women (637 people at the end of 2018). Of these, 90 occupy executive positions, making up 18% of the company’s management team (see the Managerial Personnel Structure chart).

Change in the Number of Employees in Managerial Positions in 2014–2018 (as of the year end), persons

 

 

2014

 

2015

 

2016

 

2017

 

2018

 

Total

including

Total

including

Total

including

Total

including

Total

including

Female

Male

 

Female

Male

 

Female

Male

 

Female

Male

 

Female

Male

Russian personnel

366

70

296

374

73

301

399

82

317

413

88

325

438

89

349

including Sakhalin residents

199

50

149

200

52

148

215

60

155

216

66

150

223

68

155

Foreign personnel

99

5

94

96

5

91

86

5

81

83

4

79

69

1

68

Over the past five years, the number of employees has slightly changed due to production needs and the development strategy of the company. Unlike the tourism or agricultural industries, the company does not experience significant seasonal fluctuations in the number of personnel.

Change in the Number of Employees in 2014–2018 (as of the year end), persons

In 2018, 224 people left the company. Of these, 152 were men and 72 — women, including 75 foreign citizens and 149 Russian citizens (including 95 residents of the Sakhalin Oblast). Staff turnover rate in 2018 was 4.3%, in 2017 — 3.75%, in 2016 — 4.07%, and in 2015 — 4.95%. The statistics of personnel who left the company in 2018, broken down by age group and gender, are shown in the Structure of Personnel Who Left the Company in 2018 table.

Structure of Personnel Who Left the Company in 2018

Age, years

Total, persons

including, persons

Total, %

including, %

Female

Male

Female

Male

Below 35

70

33

37

31

46

24

36–50

79

29

50

63 35

40

33

Above 50 years

75

10

65

21 34

14

43

Total

224

72

152

100

100

100

At the end of 2018, the average age of employees was 39.5 years. Employees aged under 50 accounted for more than 87%.

Personnel Age and Gender Structure in 2018

Age, years

Total, persons

including, persons

Total, %

including, %

Female

Male

Female

Male

Below 35

855

319

536

37

50

32

36–50 years

1,139

290

849

50

46

51

Above 50 years

304

28

276

13

4

17

Total

2,298

637

1,661

100

100

100

The working hours are established in the company’s Internal Working Rules:

  • five-day working week with two days-off;
  • cumulative hours worked (rotation-based work);
  • shift work;
  • individual work schedule.

The working schedules used at the company’s assets are shown in the Company’s Employee Working Schedules by Asset table.

Company’s Employee Working Schedules by Asset

Company’s asset

Working schedule

Offices

– five-day working week

Prigorodnoye production complex

– five-day working week

– cumulative hours worked (rotation-based work)

OPF

– cumulative hours worked (rotation-based work)

Platforms

– cumulative hours worked (rotation-based work)

Other

– five-day working week

– cumulative hours worked (rotation-based work)

– shift work

– individual work schedule

9.1.3. Recruiting, Hiring and Onboarding New Employees

Recruitment in the company is based on the staff schedule and joint work with the heads of structural units aimed to forecast the need for personnel. Various tools and methods are used to attract potential candidates and advertise new vacancies, in particular:

  • advertising through the Sakhalin Energy’s website. For the applicants' convenience, there is an automated service for submitting CVs online. The website offers guidelines for uploading CVs; applicants can edit their CVs in their personal accounts;
  • provision of information on vacancies to the Yuzhno-Sakhalinsk Labour Centre (on a monthly basis);
  • cooperation with leading recruitment agencies;
  • participation in local and regional specialised job fairs;
  • publishing vacancy lists in online resources and in print media;
  • promoting the company’s Employee Referral Programme, according to which Sakhalin Energy’s employees who recommend candidates are given a bonus if these candidates are hired to work at the company;
  • attracting skilled employees from shareholder companies.

In 2018, the company actively recruited specialists both from the Sakhalin Oblast and other regions. Personnel mobility is one of the key trends in the labour market of the oil and gas industry, which is why Sakhalin Energy uses various opportunities and platforms for dialogue with potential job candidates. One of such events was the Job & The City job fair in Moscow organised by representatives of Skolkovo Technopark.

In December, the Legislative Fundamentals of Developing Mechanisms for Attracting Young Specialists to the Arctic and the Far East round table was held in the Maly Hall of the State Duma. It was attended by members of the lower chamber of the Parliament, employees of relevant ministries and departments, representatives of the regions, university teachers and students, and schoolchildren. Sakhalin Energy took part in the round table at the invitation of the event organiser — the Committee on Regional Policy and Problems of the North and the Far East. Young professionals are expected to play a key role in the implementation of strategic initiatives to expand the existing LNG production and the sales markets.

In addition, representatives of Sakhalin Energy shared their professional knowledge with SSU students as pro bono intellectual volunteering. A series of lectures on supply chain management and contracting were delivered by the managers and specialists of the corresponding Sakhalin Energy department. Future managers, lawyers and economists — about 40 students of the third and fourth years of study — listened to the lectures with great interest.

The company’s interest in the graduates of Sakhalin State University is due to the fact that more than 400 Sakhalin Energy’s employees graduated from this educational institution at different times, and nearly 100 employees — from the Polytechnic College of Sakhalin State University.

Sakhalin Energy makes every effort to continue to increase the proportion of Sakhalin Oblast residents among its staff; today, the figure is nearly 54.1%. Being well aware of the specifics of the local labour market, the company offers Sakhalin university graduates special conditions for joining the Graduate Development Programme.

In 2018, Sakhalin Energy took part in the Days of the Far East held in Moscow. The event was organised by the Office of the Presidential Plenipotentiary Envoy to the Far Eastern Federal District, the Russian Ministry for the Development of the Far East and the Moscow City Government. Representatives of the company told the guests, among which were high school students, graduates of secondary and higher educational institutions, about the Sakhalin-2 project, as well as about career and professional development opportunities at the company. Participation in such events allows to attract students for traineeship at Sakhalin Energy, and promising graduates are offered employment opportunities at the company.

In 2018, Sakhalin Energy representatives held a regular Business Day for students of Sakhalin State University (SSU). It was the third time already that the company had organised this kind of event, but this year, unlike the previous times, the dialogue between Sakhalin Energy specialists and SSU students was held on the company’s premises.

During the event, students were actively involved in project activities, in particular, project defence. The captains of the teams presented their projects to the company’s employees, who played the role of shareholders.

In 2018, the company hired 186 people (134 men and 52 women). 11 of the personnel hired were foreign employees, and 175 were Russian nationals (including 95 residents of the Sakhalin Oblast).

The statistics of employees hired in 2018, broken down by age group and gender, are presented in the Personnel Recruitment Structure in 2018 table.

The percentage of critical technical jobs filled remains one of the key performance indicators of the HR Directorate. The figure was 99.8% in 2018, 99.7% in 2017, 99% in 2016, 95.7% in 2015, and 93.8% in 2014.

The company continues to run the New Employee Onboarding Programme aimed at maximising the awareness of employees and increasing performance efficiency.

Regular information sessions are held for new employees in Russian and English with a complete overview of the specifics of the organisational units, processes, and interactions between the units and stakeholders.

Personnel Recruitment Structure in 2018

Age, years

Total, persons

including, persons

Total, %

including, %

Female

Male

Female

Male

Below 35

123

39

84

66

75

63

36–50

55

13

42

30

25

31

Above 50 years

8

 

8

4

 

6

Total

186

52

134

100

100

100

9.1.4. Remuneration and Bonus System

The company applies a time-based remuneration system, which also provides for additional payments that depend on the employees’ skills and position. This encourages efficient work and provides motivation for excellent performance.

The main principles of remuneration adhered to by Sakhalin Energy are to pay its employees competitive salaries that are equal to or exceed the average salary in the Russian oil and gas industry, and to use a transparent bonus system for all personnel categories.

Remuneration of Sakhalin Energy’s employees includes:

  • base salary, hourly rate as per the employment agreement;
  • compensating or incentive allowances and uplifts to the base salaries and hourly rates payable as per the Regulations on Labour Remuneration, Bonuses and Social Benefits, RF Labour Code and other normative acts;
  • bonuses payable as per the Regulations on Labour Remuneration, Bonuses and Social Benefits and other local normative acts.

Sakhalin Energy’s remuneration policy, practices and methods are designed to recognise and encourage excellent personal and production performance. The company uses the same remuneration system for both men and women employees.

The existing incentive system uses a single unified, standard approach to motivating employees in all the company’s subdivisions. This is achieved through the following types of bonuses as per the Regulations on Labour Remuneration, Bonuses and Social Benefits:

  • Annual Performance Bonus;
  • Special Recognition Award (SRA);
  • Long Service Award (10 years or more);
  • Employee Referral Reward;
  • one-off payment to the employees in connection with rewarding;
  • bonus for participation in a research-to-practice conference held by the company on a regular basis;
  • Committee of Executive Directors Award to employees who achieved special success in teamwork.

Employees may be awarded certificates of honour and Honorary Letters on the professional holiday (the Oil and Gas Workers Day) and the company’s anniversaries. Awarding employees may also be given to celebrate anniversary dates of employees (50 years and then every five years).

To make sure that its salaries are competitive, Sakhalin Energy regularly monitors the financial segment of the job market and annually adjusts salaries to account for the employees’ individual performance (see Section 9.1.6. Individual Performance Review).

In 2018, the minimum salary in the company was three times higher than the minimum wage established by Russian legislation. Sakhalin Energy’s labour remuneration expenses totalled 13.74 bln roubles in the reporting year, with award/bonus payments totalling 3.5 bln roubles.

9.1.5. Social Benefits and Compensations

The company does everything possible to ensure the attractiveness and competitiveness of its compensation and benefits package in order to attract and retain skilled and high-potential personnel. The compensations and benefits provided to Sakhalin Energy’s personnel ensure the well-being and social security of employees and their families.

In addition to the guarantees and benefits provided for by Russian labour law, Sakhalin Energy provides its employees with:

  • voluntary medical insurance for employees and their families;
  • accident and sickness insurance;
  • travel insurance;
  • temporary disability benefits;
  • free meals at the company’s production assets and in the company’s offices;
  • benefits related to the provision of housing for employees and their families for the duration of their employment (for those employed on terms of relocation from other regions);
  • mortgage programme;
  • compensation of part of round-trip travel expenses to employees’ chosen place of vacation within the RF territory (this applies to employees and non-working members of their families (spouses and children up to the age of 18 years), living in the Far North and equivalent areas);
  • corporate pension programme;
  • material assistance upon the birth (or adoption) of a child and in difficult personal circumstances;
  • maternity benefits;
  • additional paid vacation days;
  • leisure and development programmes for the children of the company’s employees;
  • sport and recreation facilities (see also Section 9.3. Occupational Health).

Housing Benefits

The company provides benefits related to the provision of housing for employees and their families who are hired on terms of relocation from other regions of the Russian Federation, the CIS member states, as well as from the Far North and equivalent areas. The benefits are provided in the form of housing from the housing stock of the company, or payments for the rental of accommodation.

Presently, most of the company-owned housing is located at Zima residential complex. The company also has leased residential premises in Strawberry Hills complex.

The company runs a mortgage programme, which provides for compensating a part of mortgage interest for the purchase (construction) of dwelling premises in the Sakhalin Oblast. Under the programme, the company reimburses 40% of interest payments actually paid by an employee during the accounting period, not exceeding the amount set by the company.

Since the beginning of the programme, 251 Russian employees (more than 10% of total staff) have participated in it.

Medical Insurance

The company provides employees and their families with medical insurance benefits under insurance contracts with SOGAZ concluded as part of voluntary medical, accident and illness, and travel insurance programmes.

In accordance with Russian legislation, the company provides foreign employees with required medical assistance under voluntary medical insurance contracts in the territory of the Russian Federation. The company also helps employees to acquire voluntary medical insurance policies for family members on favourable terms.

Corporate Pension Plan

The company offers a corporate non-state pension plan under which employees and the company pay contributions towards occupational pension schemes.

Participation in the corporate pension plan is voluntary and allows each employee to independently pay into their retirement pension.

At the end of 2018, 22% of the company’s Russian employees are enrolled in the corporate pension plan.

The company contributed a total of 245.6 mln roubles to Gazfond from 2011 to 2018.

Programmes for the Children of the Company’s Employees

The company implements leisure and development programmes for preschool and school children. Development groups, creative associations and hobby groups for children of the company’s employees have been working at the sports and leisure facilities of Zima residential complex since 2012.

In summer, children of the company’s employees have an opportunity to attend the Happy Holidays Leisure and Recreation Programme. The programme has been run for eight years already, and is designed for children of preschool age up to 16 years old. Every year, a different theme is developed for the programme, and each summer session is held according to a unique scenario.

Social Benefits and Compensations at Sakhalin Energy

Since the beginning of the programme, there have been 35 summer sessions. They were attended by about 4,000 children, who took part in nearly 300 excursions and more than 250 workshops.

Taking into account the principles and priorities of the company in the area of HSE, measures are taken for personnel involved in the programme implementation to improve the culture of safe behaviour and build personal responsibility for their own safety and the safety of other programme participants.

In 2018, the Safety Leader category was announced for camp counsellors working under the programme. This was done to honour the most active participants who contributed to the creation of safe conditions for the programme implementation and thus to promote the prevention of injuries and accidents.

Each session of last year’s programme was organised so that there were special activities for children aimed at creating a culture of safe behaviour. The children showed great enthusiasm about the Camp Safety Map, the collective creative activity dedicated to the topic Safety Is Important, filming and presentation of videos on the topic Safety and Happy Holidays, as well as the common Safety Day held during the fourth session, with the participation of Senya — the character of the favourite corporate animated television series about safety.

Other

Employees and their families can use the company’s shuttle buses, which run along the approved routes across the city to the company’s offices, and stop at educational institutions of Yuzhno-Sakhalinsk.

School psychological consultations are available for employees and their children.

9.1.6. Individual Performance Review

The Individual Performance Review process is one of the main tools used to achieve the company’s strategic goals of building a performance culture.

All employees undergo annual performance review. An employee’s performance is assessed based on the degree to which he/she reaches business and individual goals set at the beginning of the year.

This assessment shows whether professional development is required for the employee to continue to grow professionally and improve the company’s efficiency in general.

As of the end of 2018, 2,207 employees (96% of the personnel) underwent the Individual Performance Review (see the Individual Performance Review in 2018 table).

Individual Performance Review

Individual Performance Review in 2018

Personnel category

Gender

Total number of employees, persons

Employees who underwent the Individual Performance Review, persons

Employees who underwent the Individual Performance Review, %

Managers

 

507

503

99

including

Male

417

416

100

Female

90

87

97

Specialists

 

1,475

1,431

97

including

Male

948

939

99

Female

527

492

93

Salaried workers

 

15

11

73

including

Male

Female

15

11

73

Workers

 

301

262

87

including

Male

296

259

88

Female

5

3

60

TOTAL

 

2,298

2,207

96

including

Male

1,661

1,614

97

Female

637

593

93

9.1.7. Learning and Development

9.1.7.1. General Information

Sakhalin Energy’s learning and development system is designed to meet the needs of the company for highly qualified personnel, to achieve short-term and long-term production goals.

Learning and development in the company is based on the following principles:

  • compliance: the training content is formed based on the needs of personnel and business; the training results contribute to production goals achievement and the company’s overall strategy implementation;
  • competence approach: learning and development process is based on an analysis of employees’ competence;
  • centralisation: learning and development subdivisions are responsible for all training processes in the company, planning and spending the training budget;
  • cost effectiveness: achieving the maximum level of efficiency through the application of learning and development criteria agreed with the business, as well as the choice of educational service providers without compromising the production safety and reliability;
  • equal opportunities: continuous, systematic, and consistent improvement of the employees professional level and development of their potential throughout their career in the company;
  • reasonable balance: the ratio of on-the-job training, distance learning, internal and external training in accordance with the 70/20/10 model;
  • partnership: maintaining partnership with international and Russian educational institutions, expanding cooperation with universities in the framework of partnership agreements, cooperation with organisations and training centres of shareholders’ companies.

9.1.7.2. Staff Assessment

The company applies the competence-based development approach for HR management. A profile of functional, leadership and general business competences has been developed for each position. Competence assessment is used as a basis for recommendations regarding further development and training of the employee occupying this position, as well as for other HR decisions. The job competency profile is a standard list of competences set for the company for every job.

Competence assessment gives a clear understanding of employees’ professional and behavioural qualities against the established requirements, depending on their qualifications, positions, and tasks performed.

There are various tools that can be used by managers in the process of competence assessment, in particular:

  • observation of the employee in the course of work;
  • studying competence evidence provided by the employee;
  • conducting competence-based structured interviews;
  • interviewing witnesses;
  • knowledge testing;
  • detailed recording of the employee’s performance results;
  • analysing the quality of the product delivered by the employee;
  • the 360 Degree assessment;
  • solving business cases;
  • Assessment Centre (for leadership competences only).

By the end of 2018, 99% of Job competence profiles for staff (specialists, and managers) had been posted in SAP HCM.

To assess the leadership potential and managerial qualities of personnel, the company uses modern tools such as:

  • Current Estimated Potential (CEP) Ranking Exercise — a current estimate of the highest position that the employee can occupy at the peak of his/her career during his/her work at the company. CEP is evaluated once every two years for the company’s employees JG5 and above The assessment criteria are known by the acronym CAR: Capacity, Achievements, and Relationships.

In 2018, the CEP evaluation process was carried out for 1,123 employees. As a result, 64 high-potential staff were identified and included into the Top Talent List, which unites the employees whose individual and career development is in the focus of attention of the Committee of Executive Directors.

  • Assessment Centre — a technology for integrated expert assessment of employees’ leadership competency against their current job profiles, which has been widely used in the company since 2009. This method incorporates such components as case-studies, business games, structured interviews, and feedback with a detailed analysis of the employee’s strengths and areas for development.

The target audience of the Assessment Centre is employees included in the successors pool for senior managerial positions. In 2018, 78 employees of this category passed the Assessment Centre, among them 8 women and 70 men.

Since 2009, the Assessment Centre has been used to assess the leadership competency of 668 company’s employees, including 124 women and 544 men.

  • 360 Degree — an additional tool used to assess leadership competency and personal effectiveness of employees that was developed and implemented in the company at the end of 2014. As of the end of 2018, this type of assessment had been arranged for 145 people.

To do this, the employee, his supervisor, subordinates and peers fill in an online questionnaire designed on the basis of the company's model of leadership competences.

The final results are presented as average ratings of each group of raters and are accompanied by the key findings regarding the employee's strengths and weaknesses as well as recommendations for employee development.

The structured interview method plays a special role in assessing professional competences. This is an interview during which the competence of a job candidate or employee is determined by applying the appropriate methodology. The Professional Learning Subdivision worked out information sessions on the structured interview methodology, during which videos are shown that give examples of proper and improper behaviour of managers during competence assessment. The materials are available on the HR Directorate web page. Six managers took part in information sessions in 2018.

To assess employees’ general business competences, it is recommended to use tests with specifically designed tasks and questions that help the manager assess the level of each functional competence of his/her subordinate. In 2018, 37 people used this tool. Upon completion of the testing, both the employee and the manager receive an automatically generated report that includes recommendations for development.

The Competence Assurance Programme for technicians was designed to encourage safe and reliable operations of the production assets. The programme is a system to assess knowledge and skills of Operations and Maintenance technicians. During the assessment, employees demonstrate professional knowledge acquired through learning and professional development, as well as the skills and abilities developed in the course of their work. In addition, when assessing employee competences, focus is made on the rules and standards of labour behaviour in the team and the attitude of employees towards their work, which is an important component of operating hazardous production facilities.

Competency assessment results are used later to recommend areas for employee development, prepare individual development plans, and make decisions on technician progression and transfer to other units and work areas within the production asset.

In 2017, the Competence Assurance Programme was introduced into HCM SAP (with the transfer of all active job competence profiles of employees), which made it possible to automate the planning and reporting processes under the programme. In 2018, 98.9% of the company’s employees passed the competence assessment, of which 94.5% were deemed as fully competent.

9.1.7.3. Personnel Training

The company prepares annual plans for personnel training and professional development based on current production targets, career development plans, and employee’s competence assessment results.

In 2018, 1,903 employees attended workshops and training courses, including e-learning (one or more courses per individual). The company provides training for personnel of all categories without exception (see the table of Employee Training in 2018). The average duration of training was 8.14 man-days, or 65 hours per employee (excluding on-the-job training).

In 2018, Sakhalin Energy invested 290 mln roubles in employees training.

In 2018, the company continued to implement cost optimisation programmes, including those aimed to optimise learning and development costs. However, it affected neither employees’ opportunities for learning and development, nor the number of recommended programmes and their providers. The company began to plan employee training more thoroughly, to combine various forms of training (distance, including online training, training in groups on Sakhalin instead of individual training outside the island), and to attract internal resources. All these activities allow the company to maintain the competence of its staff at the high level.

Employees Training in 2018

Personnel Category

Number of employees, persons

Number of employees trained, persons

Percentage of trained personnel

Average training duration, hours / person

Managers

507

398

79

60

including

Male

417

328

79

62

Female

90

70

78

53

Specialists

1,475

1,214

82

59

including

Male

948

836

88

67

Female

527

378

72

43

Salaried workers

15

11

73

34

including

Male

Female

15

11

73

34

Workers

301

280

93

99

including

Male

296

277

94

99

Female

5

3

60

43

TOTAL 

2,298

1,903

83

65

including

Male

1,661

1,441

87

72

Female

637

462

73

45

Sakhalin Energy’s unique training resources include Russian and foreign training service providers. Employees themselves, their line managers, the HR Directorate, and the company’s senior management monitor the implementation of training plans.

Learning Fair

Striving to improve communication with employees and increase their awareness of the company’s HR processes, the HR Directorate organised Learning Fair in 2018, which included a series of events.

As part of the Learning Fair, the company’s employees were invited to complete a training online questionnaire on learning and development process in the Russian and the English languages. More than 300 people took part in the survey.

Then the participants of the event were shown a video message from the company’s management on learning and development. One of the values shared by all employees of the company is professionalism and its continuous improvement.

On June 8 and on, interactive kiosks were deployed in all office buildings and assets of the company. Employees had an opportunity to ask any questions to learning and development specialists, to receive information about learning and development processes, resources, opportunities and tools, and to take part in a lottery with prizes. More than 700 people took part in the event.

In addition, the most active users of learning resources (online training courses on the Skillsoft portal, general business skills tests) and industrial training instructors were recognised during the Learning Fair.

The company determines the types of personnel training, resources for the training, knowledge examination, certification, and professional development of employees in the following areas.

  1. HSE Mandatory training in accordance with the requirements of the RF laws and the company’s internal standards.

The company’s activities are a vivid example of compliance with the requirements of the RF legislation and the internal standards in terms of competence assurance and HSE training provision. Timely provision of mandatory training is an integral part of the Goal Zero programme implementation.

The main objective in this field of training is to organise training, certification, and knowledge check of managers, specialists and technicians in the field of labour, industrial and process safety, special types of work, etc. As a result of effective and timely mandatory training, employees receive relevant certifications, necessary knowledge and required work permits, which ensures safe performance of work, safety of other employees, the environment and assets of the company, meeting the requirements of the RF legislation, the HSE standards of the company, the requirements of international standards and certification bodies.

Modern Technologies for Mandatory Training: New Horizons

In 2018, the company continued implementing the HSE Learning Portfolio Automation Project on the SAP HCM e-system platform in order to ensure compliance with HSE training requirements, as well as timely planning of mandatory training. The catalogue of requirements currently includes 79 training courses. During the project implementation, profiles of mandatory certifications are compiled and made accessible on the employees’ and managers’ portal. The profile is convenient to use for self-registration for a training course, and also provides an opportunity to take mandatory training in the online format. Employees and managers of the company point out a positive effect from the implementation of this project. Compliance with the HSE training requirements increased in 2018 due to the availability of the tool for monitoring and planning mandatory training. Relevant reports are submitted to the HSE Management Committee and the company’s senior management on a monthly basis.

  1. Professional Training

The main goal in this area is to increase professional competence in order to achieve safe, reliable, and efficient operation of all structural units and production facilities of the company by ensuring that the qualifications of each employee correspond to the level of complexity of the work performed. Employees of the company are nominated for professional training in accordance with the qualification requirements for the position occupied to fill gaps in functional competences, and in the case of production necessity.

Professional training of personnel is subdivided into the following areas:

  • advanced training of managers and specialists, including advanced training courses, participation in workshops, conferences, and round tables dedicated to professional issues;
  • professional training and requalification in technical and non-technical areas;
  • further training of technicians, obtaining a second/related profession;
  • obtaining international professional qualifications (IWCF, CIMA, CIPS, ACCA, NEBOSH);
  • vendor training (training in technical support and maintenance of equipment, organised by the manufacturer).

In 2018, the company continued the development of professional portfolio by discipline in order to provide targeted training and knowledge management.

  1. In-house Technical Training

The growth of the company and the use of advanced technologies in constructing and operating production assets require technicians to have a particular level of knowledge and skills within the framework of their technical competencies and the ability to safely and efficiently perform work tasks of any complexity.

The development of the technical competences of technicians is carried out through the in-house technical training system. Discipline in-house technical trainers and lead trainers, selected from among experienced production personnel, were united in the Technical Training Centre, which successfully functions at the company. The Centre ensures continuous technical training for technicians employed at the company's production assets and contractors’ staff. The In-house Technical Training Portfolio includes more than 180 courses.

The Technical Training Centre implements the following training programmes and courses:

  • by discipline (LNG process technology, operation, repair, and maintenance of production equipment);
  • on-the-job and off-the-job technical training for all disciplines;
  • in developing practical process control skills utilising the existing Operations Training Simulators and training equipment;
  • in targeted modules aimed at developing specific technical competencies and customised to the production assets’ specifics;
  • in safe production asset operations, developed in accordance with best international practices, as well as based on the findings of audits and investigations of industrial accidents;
  • in technical areas developed by equipment vendors;
  • in the target areas for the main contractors whose personnel work at the company’s production assets;
  • in developing technical competencies in accordance with the approved technician progression scheme and with regard to the competency assessment results of technicians.

Training is conducted at the company’s own training facilities.

The systematic development of training programmes ensures uniform implementation of the competence standards at the production assets. The programmes reflect the specific features of the assets related to work flow, material handling, and operation of equipment. Further, the training programmes include the requirements and practices in the field of HSE process and personal safety, which allows using them as guidelines in the performance of any work tasks and implementation of initiatives at the production assets.

The company has made it a priority to study the best practices in in-house technical training, the integration of Russian and international approaches, the use of modern technologies in the educational process, as well as further development of training portfolio and training facilities.

In 2018, Sakhalin Energy continued to develop closer links with the training units of the shareholder companies. The company actively cooperates with the Gazprom Training Simulator Computer Centre in the preparation of electronic training modules for the development of a base for targeted technical training of production personnel and HSE training. Six training courses have been developed, four courses are at the final stage of development, and eight courses will be converted into the e-learning format in the nearest future. Work continues to determine whether it is possible to convert technical training courses from the full-time classroom to the distance learning format. The development of new e-learning courses will make it possible to preserve the information about advanced technologies/practices applied by Sakhalin Energy, and to provide unique technical expertise for training Russian specialists and contractors’ personnel at any asset, no matter how remote it may be.

Particular attention is paid to the standardisation of educational materials for target technical courses included in the In-house Technical Training Portfolio, taking into account the experience of the Gazprom Training Simulator Computer Centre.

A purposeful and mutually beneficial interaction with shareholders in the field of professional training of personnel provides a solid basis for managing unique knowledge. In September, representatives of Gazprom and Shell attended the events of the HR Managers Week, held at Sakhalin Energy. In turn, managers and specialists of the company regularly participate in the work of the Educational and Methodological Council of Gazprom training centres.

  1. Training in the Development of Leadership, Business, and Personal Effectiveness Skills

The development of general business skills is carried out within the framework of the internal training system, taking into account the requirements of existing competences, internal assessment, and using electronic resources. The company recommends that its employees engage in self-education to develop these skills.

The leadership qualities development framework is specified in Section 9.1.7.6. Leadership and Management Development Programmes.

9.1.7.4. Traineeship Programme

To ensure that there is a sufficient number of qualified technicians, the company continues to implement the Traineeship Programme. Since 2003, 285 people have taken part in the Programme, of which 39 people continued training as the company’s trainees at the end of 2018.

The Programme focuses on professional development and further employment for young residents of the Sakhalin Oblast having vocations relevant to the company’s needs. Programme participants are mainly graduates of the Polytechnic College of Sakhalin State University.

The key component of technical training of trainees is to help them to develop practical skills and acquire work experience. The practical part of the Programme ensures that trainees develop their skills and learn the material so that they reach the required competence level.
Different training methods are actively used, such as:

  • having trainees prepare projects;
  • having trainees independently develop and deliver presentations;
  • simulating various production scenarios followed by analysis.

At all stages of the Traineeship Programme, emphasis is laid on process and personal safety in the performance of various types of work tasks.

The Programme graduates are in demand at all production assets. When working at the assets, they demonstrate a high level of knowledge and skills acquired during the Programme, steady motivation for further professional development, and commitment to the principles of the safety culture.

The first part of the programme lasts 14 months and includes:

  • English language module — an intensive training course with elements of general and technical English;
  • general technical training modules (9 months), including theoretical and practical training by disciplines, SAP and ISSOW, training using Operations Training Simulators, work with the training equipment in classrooms and workshops, etc.

The second part of the programme lasts 18 months, and includes on-the-job training as part of a shift, or in a work area a trainee is assigned to.

Traineeship Programme

9.1.7.5. Successors Pool Planning and Development

Successors pool planning and development is the company’s high priority activity for further development of personnel capacity. The key stages of the process are as follows:

  • identification of potential candidates from among the Russian personnel to fill positions occupied by foreign specialists, as well as key and managerial positions occupied by Russian employees;
  • assessment of the potential successors’ readiness to succeed the positions according to the succession plan;
  • the potential successors’ development in accordance with the job requirements to the positions planned for succession.

During the succession planning process for 2018–2022, potential successors (in the short- and long-term) were identified to 624 of the 669 positions within the succession planning scope (93%). For all employees included into the successors pool, Individual Development Plans were developed incorporating trainings and development activities to be taken under the company’s learning and development framework (professional training, development of leadership and management skills, developmental assignments, coaching, project management, etc.).

In 2018, 71 vacant positions out of the 82 included into the Successors Matrix were filled with internal candidates (86.6%), including 14 out of 16 expatriate positions (87.5%).

9.1.7.6. Leadership and Management Development Programmes

An important component of training highly qualified leaders and strong managers at all levels of management in the company is the formation and development of employees’ management and leadership skills through developmental classroom and online training courses, on-the-job and relationship-based training, such as coaching and mentoring.

Leadership development programmes have been developed for all levels of management based on the Nine Planets Leadership Competency Model (see the Leadership and Management Development Programmes chart).

Leadership and Management Development Programmes

As of the end of December 2018, 221 Russian employees of the company (43 women and 178 men), occupying managerial positions at various levels, completed training programmes under the leadership and management development framework, including the use of Skillsoft.

The company also develops its leaders through the implementation of the Mentoring Programme, which includes:

  • individual mentorship, which is voluntary informal relationships between the Programme participants, in the process of which an experienced leader (Mentor) shares his/her knowledge, experience and skills with an employee (Mentee) to facilitate personal and career development of the latter one;
  • group mentorship, which is a series of knowledge-sharing sessions held as part of the Journey to Nine Planets project, organised for high-potential JG2 employees, during which the leaders of the company share their experience in building a career, managing projects and staff in the context of leadership competencies.

9.1.7.7. Graduate Development Programme

Since 2010, the company has been implementing the Graduate Development Programme aimed to meet Sakhalin Energy’s needs for talented staff. Pursuant to the Memorandum on Cooperation in the Area of Personnel Management, signed by Gazprom and Shell, representatives of the shareholders’ companies have been participating in the programme since 2016, too.

The company organises systematic work with graduates in accordance with the three-year development programme (see the Stages of the Graduate Development Programme chart).

Stages of the Graduate Development Programm

In 2018, the company hired 14 graduates under the programme. Since 2010, 137 young specialists, including 35 residents of the Sakhalin Oblast, have participated in the programme. As of the end of 2018, there were 45 programme participants, including 14 residents of Sakhalin.

In 2018, the Sakhalin Energy’s Graduate Development Programme entered the shortlist of PEOPLE INVESTOR contest in the Human Resource Management category. The contest reveals the best practices in human resources management, corporate social responsibility, environment protection, and effective relationships with business partners.

Young Energy Graduates Club

The Young Energy Graduates Club has been functioning in the company since 2012. Its purpose is to facilitate the rapid adaptation of young professionals and to develop their business and leadership skills. In 2018, the club held a number of events, including information sessions on the company’s charitable activities, on the Continuous Improvement and the Goal Zero programmes, as well as meetings with the Production Directorate management.

9.1.7.8. Personnel Developmental Assignments

Arranging developmental assignments for the company’s employees at the Shareholders’ companies is an integral part of Sakhalin Energy’s HR strategy. Personnel developmental assignments are arranged on the basis of relevant agreements signed between Sakhalin Energy and the Shareholders companies. This form of cooperation allows the employees to study the practical aspects and specifics of work in the corresponding units of the host company and to organise more effective interaction during implementation of joint projects.

Participating in the developmental assignments, employees gain extensive experience in project work and receive additional opportunities to use their knowledge and skills in various organisational environments, to acquire new skills and experience in solving challenging tasks.

In 2015–2018, personnel developmental assignments in the shareholder companies were organised for 25 employees of Sakhalin Energy. In turn, 21 employees from the shareholders companies completed their developmental assignments at Sakhalin Energy.

9.1.7.9. Developing Scientific Potential

Sakhalin Energy pays great attention to the development of scientific potential of its employees. The company cooperates with universities and research institutes in the development of joint technical projects. The company’s specialists are involved in the work of student scientific societies, in the preparation and delivering of lectures, etc.

Every year, the company holds Young Professionals Scientific and Practical Conference.

In October 2018, the 10 th anniversary conference took place. The format of the event had changed: it had received the status of an open conference. Not only the company’s employees participated in the event, but also representatives of the subsidiaries of PJC Gazprom (Gazprom Dobycha Nadym, Gazprom Dobycha Yamburg, Gazprom Transgaz Tomsk, Gazprom Dobycha Urengoy, Gazprom Transgaz Ufa, Gazprom Training Simulator Computer Centre, Gazprom Dobycha Shelf Yuzhno-Sakhalinsk), specialists from Salym Petroleum Services B.V., undergraduate and graduate students of the Gubkin Russian State Oil and Gas University, Far Eastern Federal University, and Sakhalin State University. The 2018 conference had a record number of participants and sections: 58 reports were presented by 81 participants in six sections: Geology, Drilling and Development of Oil and Gas Fields, Production and Maintenance, Information Technologies and Automation of Production Processes, Economics and Personnel Management, University. For the first time the conference programme included an English-language section. The Conference Evaluation Panel included experts from the Production, Technical, Commercial and HR Directorates of Sakhalin Energy, as well as representatives of the Gubkin Russian State Oil and Gas University and Sakhalin State University.

9 .1.7.10. Internship Programme

In order to form an external successors pool for the Graduate positions, since 2000 the company has been implementing the Internship Programme.

Working alongside with highly qualified professionals, students of Russian universities and vocational schools get acquainted with advanced production technologies and the best international and domestic business practices as well as gain unique practical experience.

In 2018, 72 university students and 23 students of vocational schools underwent on-the-job training and pre-graduation internships at the company. 70% of the interns were residents of the Sakhalin Oblast.

The company has a successful partnership with the Polytechnic College of the Sakhalin State University in the area of vocational education, annually accepting 20 to 30 third- and fourth-year students studying in the fields relevant to Sakhalin Energy's operations to receive on-the-job training and pre-graduation internship at the Prigorodnoye production complex.

9.1.7.11. Scholarship Programme

The Scholarship Programme was launched by Sakhalin Energy in 2003.

The Programme focuses on talented leavers of Sakhalin Oblast secondary schools and vocational schools who are interested in obtaining an industry-specific education and building a career with the company.

The educational grants offered by Sakhalin Energy are awarded in the form of a scholarship (for those receiving state funds to study at a university) or reimbursing of tuition costs (for those admitted to the fee-based slots for a full-time study at a university).

In 2018, five graduates of Sakhalin schools won the contest.

As of the end of 2018, 24 participants of the Scholarship Programme studied at RF universities with the financial support of the company.

9.2. Labour Safety and Protection

9.2.1. General Information

In order to successfully implement major projects and operate production assets, the main focus must be on health and safety. Sakhalin Energy is committed to industrial safety and causing no harm to people’s health.

At present, there are ten mandatory Life Saving Rules applied by the company. These rules are associated with high-risk activities.

Statistics on violations of the Sakhalin Energy’s Life Saving Rules by the company’s and contractor’s staff in 2018 are presented in the table Violations of the Sakhalin Energy’s Life Saving Rules in 2018.

Any violation of the Life Saving Rules leads to serious consequences, including potential dismissal.

The company uses a consistent approach when handling HSE issues (see Section 3.5 Health, Safety, Environment, and Social Performance Management). This approach complies with both legislation and risk management so as to ensure continuous improvement in this area. The company also requires contractors to manage HSE issues in compliance with this approach and international standards adopted by the company.

The company’s main fields of activity in the area of safety are:

  • leadership and commitment at all levels of the company;
  • industrial safety;
  • road safety;
  • preventive work with contractor organisations;
  • learning from incidents in the industry and awareness-raising campaigns.

Life Saving Rules

Violations of the Sakhalin Energy’s Life Saving Rules in 2018, number of cases

Violation

Number of cases

Alcohol or drug abuse

6

Smoking or use of ignition sources in hazardous areas

3

Standing under suspended load

0

Failure to follow the requirements of a work permit

6

Locking or isolating equipment before work begins

1

Obtaining authorisation before entering a confined space

0

Taking protection measures against a fall when working at height

3

Failure to use a seatbelt

4

Failure to follow Journey Management Plan or invalid Defensive Driving Certificate

4

Using a communication device or exceeding the speed limit when driving

4

Injury Rates for the Company and Contractor Organisations in 201 4 –2018

Parameter

2014

2015

2016

2017

2018

Number of people injured in accidents at the workplace, total people

6

9

9

4

4

– including fatalities

0

0

0

0

0

Number of accidents for contractor organisations at the company’s assets, total people

4

9

9

4

4

– including fatalities

0

0

0

0

0

Total registered incidents (per 1 mln man-hours)

0.46

0.68

0.64

0.26

0,23

Number of people injured in road traffic accidents (per 1 mln man-hours)

0

0.07

0

0

0

9.2.2. Industrial Safety

Sakhalin Energy has an Industrial Safety Policy and an Industrial Safety Management System (ISMS) that comply with Russian legislation and international best practices.

The company’s main industrial safety goal is to ensure individuals and society are protected from accidents at hazardous production facilities and to mitigate their effects.

An integral part of ISMS is overseeing compliance with the industrial safety requirements. This is done by evaluating the functioning of all hazardous production facilities of the company, preventing accidents at these facilities, and ensuring we are prepared to respond to accidents and incidents and their consequences.

All aspects of industrial safety are continuously and regularly inspected by the company’s experts under the ISMS. These inspections are planned and carried out so that the safety of all operations is effectively monitored at hazardous production facilities.

The company submits production control data to Rostekhnadzor annually as required by law.

The company operates hazardous production facilities with the following hazards:

  • reception, use, processing, generation, storage, and transportation of hazardous substances listed in Appendix 1 to the Federal Law No. 116 Federal Law. On the Industrial Safety of Hazardous Production Facilities dated 21July 1997;
  • use of equipment operated under excess pressure (over 0.07 MPa);
  • use of permanently installed hoisting equipment.

As required by law, 10 hazardous production facilities have been registered in the state register, and hazard classes were assigned.

For Hazard Class I and II facilities, it is mandatory to develop industrial safety declarations. The company has developed such declarations for all hazardous production facilities.

The company conducts industrial safety training and certification for employees working at the company’s hazardous production facilities in compliance with law and the ISMS. The procedure for industrial safety training, examination, and certification is in compliance with the current legislation.

The company achieves high productivity and observes all industrial safety regulations by using the latest technologies and regularly assessing and managing industrial safety risks. The company takes many measures to improve performance, including:

  • setting up and operating the company’s Industrial Safety Management System as required by law;
  • auditing at different levels and regularly reviewing the ISMS;
  • having an efficient and unbiased procedure for accident and incident investigation at the assets; preparing reports as required by law;
  • monitoring compliance with the industrial safety rules set forth in federal laws, other regulations, and local regulations;
  • developing preventive measures and organising accident and incident prevention work at all hazardous production facilities of the company;
  • offering industrial safety training and a certification system for the company’s employees as required by law.

On the company’s decision, Justification of Safety (JoS) documents were developed and implemented at seven hazardous production facilities of the company. All JoS passed the industrial safety expert review pursuant to the requirements of the RF legislation.

All the above measures implemented by the company along with a number of the best practice tools guarantee that the company complies with industrial safety regulations at all stages of production, starting from designing each new well up to the moment hydrocarbons are loaded in the Prigorodnoye port.

9.2.3. Safety Culture

Occupational health and safety is one of the company’s core values. Sakhalin Energy sets high standards and expects all employees of the company, contractor and subcontractor organisations to comply with them.

Continuous improvement of the corporate safety culture aimed at achieving Goal Zero is one of the priority tasks of Sakhalin Energy.

The company supports leaders’ development at all levels to ensure creation of safety culture and continuous improvement. A safety culture is a system of values, beliefs, and ideologies adopted in an organisation. It depends on many factors, in particular:

  • the top managers’ commitment to HSE principles;
  • the company’s priorities;
  • the company’s policies, procedures, and standards;
  • employee engagement and motivation;
  • availability of feedback, information exchange;
  • safety awareness among employees, their behaviour;
  • competency of employees.

Safety Culture Evolution Ladder

Sakhalin Energy pays great attention to the HSE leadership development of all company`s employees. In 2018, 70 line managers, HSE specialists, and HSE critical contract holders underwent HSE Leadership for Mid-level Managers training course.

The aim of the training programme is to ensure a common understanding of the current HSE situation, to motivate employees to seek continuous HSE improvement and to develop their leadership qualities.


Implementation of the Goal Zero programme has been an integral part of developing the safety culture in the company.

Goal Zero is a mindset that actively promotes no leaks, spills, harm or injury, both at work and in daily life. Employees’ personal responsibility for compliance with the HSE rules and intervention in unsafe situations (as one of the elements of the safety culture) help the company to reach its safety targets and production goals.

The company continues to promote the Effective Observation and Intervention Programme. The Programme aims to implement a systematic approach to the identification, assessment, and prevention of unsafe practices and conditions in the workplace, as well as to continuously improve the safety culture and safe behaviour.

When employees adopt the practice of safe behaviour and it becomes the norm at production sites, in the offices, and in their homes, it will be a tremendous step towards achieving the generative level of the safety culture.

In the company, there is the CED award for the best safety practices, for the prevention and timely response to hazardous situations, which promotes safe behaviour and HSE achievements.

All employees of the company and contractor organisations can take a training course under the Effective Observation and Intervention Programme. The purpose of this course is to build employees’ conscious attitude to safety through observation, communication, and concrete actions, as well to teach them effective intervention methods.

The company has been holding Summer and Winter Safety Days for the last eleven years. All employees of the company and contractor organisations gather to discuss the ever topical safety issues: how people’s actions and behaviour influence the safety of others, and how to improve work safety. They also discuss following safety rules both at the workplace and outside working hours.

Safety Days topics in 2018 included care for people, decision making dilemmas, risk normalisation and preparation for winter conditions (both of individuals’ and company’s assets).

9.2.4. Road safety

Road safety is of particular importance for Sakhalin Energy.

More than 650 vehicles with combined annual mileage over 9 mln km are engaged in the project activities. Sakhalin Energy’s management and the Road Safety Steering Committee emphasise strict adherence to the norms of the RF transport legislation and compliance with the requirements of the company’s Road Safety Management Standard.

To maintain and improve its road safety performance, the company continues to implement the following actions:

  • Monthly meetings of the Road Safety Steering Committee chaired by the Chief Executive Officer of the company;
  • Analysis of IVMS reports. IVMS monitors driver behaviour, identifies non-compliance, and allows the company to take steps to prevent situations that may lead to road traffic accidents. The entire monitoring system covers about 1,500 drivers and 650 vehicles;
  • Defensive driving training. All professional drivers, and also non-professional drivers required to drive on the company`s business, take defensive driving courses. In 2018, the courses were conducted for more than 1,500 drivers of various categories. Moreover, the company allowed any employee to attend the defensive driving training;
  • Vehicle compliance control. All company’s and (sub-)contractors’ vehicles used in production activities are inspected, and company’s and (sub-)contractors’ drivers are monitored to see that they comply with road safety rules and company’s Road Safety Management Standard. Four Road Safety Monitoring teams perform oversight in different regions.
  • Interaction with other organisations. The company initiated cooperation with Gazprom Dobycha Shelf, which develops the Kirinskoye Field, in order to jointly solve road safety issues at the south access road to Lunsky Bay. The Road Safety Monitoring team and the State Traffic Safety Inspectorate keep watch over the south access road;
  • Active participation in various forums, where the company shares its experience in ensuring road safety under the project. In 2018, the company attended the following events: 4th Annual Conference Safe Driving–2018, Road Safety Conference for Contract Holders, and others.
  • Implementation of the Safe Journey Management Programme at the company’s assets. Each of Sakhalin Energy’s production assets has appointed persons responsible for road safety who monitor the daily operation of all vehicles within the asset, including journey management and check-ups of the technical state of vehicles and transported cargoes;
  • Cargo Securing and Vehicle Transportation training course. Sakhalin Energy’s operations involve transportation of materials and heavy equipment using the roads of the island. Statistics prove that improperly secured cargoes are one of the main reasons behind a significant number of road traffic accidents. It became apparent that a training course had to be introduced when it was discovered that non-compliant cargo transportation had risen under the project and that there are no clear recommendations in the regulations of the Russian Federation on proper securing of cargo. A Cargo Securing Standard, consistent with the best international practices, was developed in 2018. All oversize and heavy cargoes within the project are transported under the control of the company’s Road Safety Department.

Under the Road Safety Programme the company has committed to promote and disseminate robust corporate safety standards outside of its and contractors’ area of responsibility, especially in those communities and locations in Sakhalin where Sakhalin Energy has its operations. This is done through cooperation with Sakhalin Oblast Government, Yuzhno-Sakhalinsk Administration and Traffic Police.

9.3. Occupational Health

The company uses a systematic approach in protecting the health of its personnel. Sakhalin Energy has developed and approved a corporate occupational health and hygiene standard, including the following sections:

  • medical requirements for occupational fitness;
  • occupational health;
  • health risk assessment;
  • medical emergency response;
  • medical requirements for contractors;
  • control over the prohibition of alcohol and psychoactive substances use at workplaces;
  • chronic fatigue management;
  • etc

Sakhalin Energy’s Occupational Health and Hygiene Standard

Periodic health examinations and clinical screening of the company’s employees working under hazardous, dangerous and/or harsh work conditions were arranged in accordance with the Medical Requirements for Occupational Fitness Standard.

In 2018, 99.6% of the company’s employees engaged in work under harsh, hazardous and/or dangerous conditions underwent mandatory periodic health examination. More than 75% of office personnel were covered by clinical screening.

The company continues to focus on preventing employee fatigue. Fatigue risk management guideline has been issued. Also, additional measures are introduced to assess and manage the fatigue risk (training materials). The company’s employees have access to interactive information on managing risks associated with fatigue

Health risks are assessed at all company’s assets. A monitoring system for harmful occupational factors has also been introduced. The process of mapping harmful occupational factors at the company’s remote assets was continued to increase the visibility of information on harmful factors.

Cause and effect were analysed to compare the production environment data (air in working zones, vibration, noise, microclimate, ionising radiation, etc.) and employee health data. Risks of harmful factors influencing employee health at the production assets are assessed based on the analysis.

Corrective measures are subsequently developed to minimise any risks, and the Fountain electronic database is used to make sure the measures are put into place. In 2018, the rate of reported occupational diseases remained at a relatively low level (see the Rate of Reported Occupational Diseases table).

Rate of Reported Occupational Diseases in 2014–2018

Total rate of reported occupational diseases

2014

2015

2016

2017

2018

Company alone

0.61

3.33

0

0

0

Company and contractors

0.39

1.15

0.21

0,2

0,4

With temporary disability

(company alone)

0.36

0.67

0

0

0

With temporary disability

(company and contractors)

0.23

0.15

0.07

0,1

0,4

Performance indicators are analysed on a regular basis in order to improve working conditions, prevent illness, and promote a healthy lifestyle.

In 2018, an increasing number of contractors applied the company’s approach to assessing cardiovascular disease risks and body mass index. This allows them to effectively monitor the risk of developing acute coronary syndrome. The company uses software to ensure that only employees who are fit in terms of health are admitted to work at remote assets. The company’s approach to risk assessment of cardiovascular disease and body mass index calculation is based on an analysis of mortality for reasons other than occupational injuries.

Besides mandatory health programmes, in 2018, the company continued its policy of encouraging personnel to keep fit and prevent diseases.

To do this, additional steps were taken, such as:

  • preventing acute respiratory viral diseases and influenza, including health education and vaccination;
  • implementing a programme promoting a healthy lifestyle and engaging in sports. An initiative group of the company developed a schedule of activities to improve general health and promote fitness and sports. According to this schedule, employees participated in sports and competitions both within their subdivisions and at the corporate level as well as in open local and regional championships in various sports (football, hockey, volleyball, tennis, swimming, hiking, etc.);
  • providing access for the company’s employees and their families to the corporate sports and fitness centre in Yuzhno-Sakhalinsk (gym, swimming pool, football field, tennis courts and icerink). Moreover, there are gyms and sports fields at the company’s remote assets;
  • implementing a programme to prevent alcohol and drug addiction by raising the awareness of the impact alcohol and drugs have on health;
  • introducing a campaign against smoking. Every year on 31 May, Sakhalin Energy celebrates the World No Tobacco Day when employees meet to discuss the problem of tobacco addiction. Smokers are offered free medical advice and nicotine replacement therapy. Also, there is an extensive information campaign during which posters and leaflets are distributed;
  • continuing to implement high standards for medical emergency response. In 2018, over 350 employees of Sakhalin Energy and contractors completed first-aid training.

The company’s and contractors’ employees at remote assets of the Sakhalin-2 project as well as the company’s employees on foreign business trips are provided with high-quality medical support guaranteed by AEA International (Sakhalin). The company’s employees can also receive medical services at other healthcare facilities listed by SOGAZ insurance company under the VMI (voluntary medical insurance) programme (see Section 9.1.5. Social Guarantees, Benefits and Compensations).

9.4. Human Rights

9.4.1. Human Rights: Principles and Management System

Sakhalin Energy’s key business principles include running its business in a socially responsible manner, compliance with the laws of the Russian Federation, and respect for fundamental human rights within the legal business framework.

The integrated approach to human rights has several interconnected components, in particular:

  • Human Rights Policy commitment;
  • incorporation of commitments into the company’s strategy;
  • human rights risks and impact assessment;
  • stakeholder engagement in connection with human rights issues;
  • efficient grievance mechanism;
  • training of the company’s and contractors’ personnel;
  • human rights monitoring and reporting.

The company’s human rights standards are laid out in the following principal documents to ensure they are implemented on a day-to-day basis:

  • Human Rights Policy;
  • Code of Conduct, including the Statement of General Business Principles;
  • Business Management System;
  • Commitment and Policy on Health, Safety, Environment, and Social Performance Policy;
  • Security Policy;
  • Contracting & Procurement Policy;
  • Whistle Blowing / Grievance Procedure;
  • Sustainable Development Policy.

The Human Rights Policy (available on the company’s website) sets forth the human rights commitments and discusses managing risks associated with potential or actual violations of human rights resulting from the company’s activities.

Sakhalin Energy has adopted standards for observing human rights in all situations in which there is a potential for violating these rights, namely:

  • employee relations;
  • working in communities;
  • contracting and procurement;
  • asset security.

The company holds training courses and information sessions on human rights (see 9.4.4. Human Rights Training). Security contractors in particular are informed about the company’s human rights standards.

Sakhalin Energy Presented Its Experience at the International Human Rights Forum

In November 2018, the 7th United Nations Forum on Business and Human Rights was held at the UN Headquarters in Geneva, bringing together more than two thousand participants — representatives of states, businesses, public organisations, legal institutions, trade unions, UN agencies, etc.

Sakhalin Energy held a session on the monitoring of compliance with human rights standards by contractors and subcontractors. The topic of respecting human rights in supply chains is one of the key issues on the international agenda, and comprises a wide range of aspects.

The session aroused great interest among business representatives, international financial institutions, and public organisations.

Being a regular participant of the Forum, Sakhalin Energy previously presented its successful practices in the support of indigenous minorities, corporate community grievance mechanisms, integrated approach to the observance and promotion of human rights under the Sakhalin-2 project, etc.

In December 2018, the Russian Business and Human Rights Round Table was held in Moscow. The event was organised jointly by the Russian Union of Industrialists and Entrepreneurs (RUIE), Global Compact Network Russia, and Sakhalin Energy, and was dedicated to the 70th anniversary of the Universal Declaration of Human Rights. The round table was attended by representatives of federal authorities, as well as international organisations and companies operating in the territory of the Russian Federation. 

The participants of the anniversary round table had an opportunity to learn about the experience of Russian business in respecting and promoting human rights.

Company’s Human Rights Activities

9.4.2. Grievance Mechanisms

The company’s stakeholder engagement strategy is focused on minimising impacts on human rights. It is obvious, however, that it is impossible to eliminate all adverse impacts of a project as large as Sakhalin-2. This is why the company adopted a grievance mechanism right as construction started to effectively address grievances raised in connection with the project. The mechanism includes the following:

  • Whistle Blowing Procedure to address violations of the Statement of General Business Principles, Code of Conduct, or other procedures of the company (related to conflict of interest, bribery, corruption, etc.).
  • Human Resources Inquiries Procedure to address labour and employment issues raised by the company’s personnel (violation of employee rights under the law, regulatory legal acts, and the company’s local regulations; violation of labour agreements and the terms of employment contracts concluded with employees; other situations affecting the interests or violating the labour and personal rights of employees in the course of their work for the company).
  • Community Grievance Procedure to address grievances from the public and contractors’/subcontractors’ employees in connection with the Sakhalin-2 project. In addition to the Community Grievance Procedure, the company established a separate procedure for addressing grievances related to the Sakhalin Indigenous Minorities Development Plan in 2011 (see Section 9.5. Social Investment and Contribution to Sustainable Development of the Host Region).

These mechanisms can help resolve grievances quickly and efficiently, they thoroughly document grievances and corrective measures, and reduce the likelihood that similar situations will reoccur, thereby contributing to building strong, long-term relationships with everyone affected by the company.

To ensure maximum efficiency of the community grievances procedure, the company relies on a number of principles to conduct these activities, including:

  • legitimacy, and incorporation into the corporate system;
  • accessibility;
  • transparency and openness;
  • stakeholder engagement and ensuring dialogue during the grievance process;
  • setting target dates and taking concerted actions to address grievances;
  • confidentiality;
  • applicability for both the company and contractors;
  • using continuous learning, taking preventive measures and proactive steps.

9.4.3. Grievance Handling in 2018

In 2018, 75 grievances and requests were received from the company’s personnel and external stakeholders as part of various corporate grievance mechanisms, including:

  • 36 grievances under the Whistle Blowing Procedure;
  • one grievance from an employee of the company under the Human Resources Inquiries Procedure;
  • 38 grievances from the public and employees of contractor and subcontractor organisations.

The grievances related to violations of the General Business Principles, the Code of Conduct, or other company’s procedures were handled under the Whistle Blowing Procedure. These grievances concerned material and services procurement, conflict of interest, and unethical behaviour.

Each of the 36 grievances received under the Whistle Blowing Procedure had been resolved by the end of 2018. All the grievances were resolved within the time frame established.

Requests of the company’s employees regarding matters related to their work in the company and the application of local regulations of the employer were examined in strict accordance with the Human Resources Inquiries Procedure. In 2018, one grievance was received from an employee within the framework of this Procedure. The grievance was resolved within the time frame established in the Procedure.

The grievances from communities and employees of contractor and subcontractor organisations were addressed in compliance with the Community Grievance Procedure. These grievances were related to labour relations (in contractor and subcontractor organisations), impact on settlements, construction camp management, compliance with the Code of Conduct, and the implementation of the Sakhalin Indigenous Minorities Development Plan.

By the end of 2018, 27 grievances out of the 38 received from the public and employees of contractor and subcontractor organisations had been resolved. In addition, one grievance received at the end of 2017 had been resolved. All 27 grievances were addressed within the time frame established in the Grievance Procedure (less than 45 business days). At the end of 2018, 11 grievances remained unresolved. Information on the status of these grievances will be presented in the 2019 Sustainable Development Report.

Categories of Public Grievances in 2018, %

Grievance category

Number of registered grievances

%

Labour relations / labour safety

17

44

Construction camp management

5

13

Code of Conduct

5

13

SIMDP implementation

6

16

Impact on settlements

4

11

Other (contractual relationships)

1

3

Total

38

100

9.4.4. Human Rights Training

A certain level of employee awareness is required to incorporate human rights standards into the daily operations of the company and its contractors. Therefore, the company offers systematic training and awareness sessions for the personnel of Sakhalin Energy, its contractors, and other stakeholders.

The company’s requirements in the area of human rights are included in a number of educational instructions and courses that all company’s employees and contractors are required to take.

Examples of this training are:

  • general instruction;
  • Code of Conduct training;
  • health, safety, environmental, and social performance training.

The company conducts personalized courses for specific personnel that have a higher risk of violating human rights. The process of appropriate training selection is shown in the Appropriate Training Selection chart.

Appropriate Training Selection

The Community Grievance Procedure training course is offered to employees whose scope of work includes receiving or resolving grievances from the population (e.g. subdivision heads, reception desk employees, and the company’s representatives who directly supervise the work of contractor organisations).

9.4.5. Monitoring Human Rights

Monitoring is important for ensuring human rights are observed. Both monitoring and reporting of human rights are done not only internally, but also externally.

As a rule, monitoring includes:

  • visiting communities;
  • surveying the personnel of the company and external stakeholders;
  • meeting with internal and external stakeholders, including local community, and representatives of contractor organisations, for receiving feedback;
  • reviewing contracts to make sure they contain human rights provisions.

Internal monitoring is done at the subdivision level as well as by the Internal Monitoring Department. External monitoring includes regular audits by lenders, shareholders, and independent experts.

The Business Integrity Committee, which includes the Chief Executive Officer and a number of other directors, oversees compliance with the established Grievance Procedure.

Conclusions on the application of human rights standards are included in regular internal reports for the senior management and shareholders of Sakhalin Energy, as well as in the company’s annual Sustainable Development Reports.

9.5. Social Investment and Contribution to the Sustainable Development of the Host Region

9.5.1. Social Investment and Sustainable Development: Sakhalin Energy’s Principles and Approaches

Since its establishment in 1994, the company has paid close attention to implementation of social programmes in the territory of the Sakhalin Oblast. The significant and consistent investments in social sphere, as well as the long-term policy focused on addressing the social issues are the core of Sakhalin Energy’s commitment to sustainable development principles. Sakhalin Energy pursues a policy of mutual investments of resources for the benefit of all stakeholders.

In 2018, the company invested about 72 mln roubles in the implementation of external social programmes in the Sakhalin Oblast.

In accordance with the company’s Social Investments Strategy, Sakhalin Energy is implementing projects that:

  • result from consultations with the public and meet the identified needs of the communities impacted by the company’s activities;
  • relate to issues that affect the company’s reputation;
  • may not directly relate to the company’s activity, while contributing to economic, environmental, and social development of Sakhalin Island;
  • contribute to sustainable social, economic, and environmental development of Sakhalin and demonstrate the company’s commitment to sustainable development to stakeholders.

Sakhalin Energy's social investment programmes are aligned with the company's long-term goals in its host region, Sakhalin.

The company focuses on implementing strategic long-term partnership projects with external stakeholders, and on using various tools and techniques to implement social programmes, including competitive funding. Governing bodies and expert councils have been established to make decisions under the key programmes. These are collegial coordinating and advisory bodies that involve the company's representatives, partners, and members of non-governmental organisations in the territory where the company operates. 

While striving to achieve lasting social changes in the region, the company has implemented a number of projects within priority areas defined through public consultations. These are:

  • environmental protection and biodiversity conservation;
  • safety;
  • education;
  • culture and arts;
  • healthcare;
  • promoting the development of the Sakhalin indigenous minorities.

The company's approach to the development of the host region is a targeted policy of participating in the life of the community. This includes support for relevant projects and programmes aimed at the development of the region (funds for this activity are allocated by shareholders), as well as the involvement of the company’s employees in corporate social programmes, development of charity and volunteer activities in the region, and participation of the company discussing issues that are vital to the territory where it operates.

Over the years that it has been developing the social investment programme, Sakhalin Energy has built its own model for managing external social programmes that is based on the company’s policies and the best international charity practices. Not only does the company seek to adapt and use the best international practices, but it has become an example of corporate philanthropy.

Sakhalin Energy finished second in the Corporate Charity Leaders 2018 Ranking, which was joined by 47 Russian and international companies. The Corporate Charity Ranking sponsors — Vedomosti, PWC and Donors Forum — have declared identification of best corporate charity practices and their promotion to business communities and general public as their principal goal. According to experts, the company succeeded in getting top ranking due to the continuity and consistency of its social policy, commitment to high social responsibility standards and use of innovative approaches to create a better social climate in the host region.

The company performs its social investment activities in line with a number of documents. They identify the objects and principles of the charity activities and social investments, and outline how to manage these issues, e.g. planning, decision making, and financing procedures. These documents include the Social Investment Strategy as a part of the Social Performance Management Standard. Pursuant to the Strategy and in accordance with the company’s internal audit requirements, Sakhalin Energy conducts continuous internal monitoring and a biennial independent external evaluation of social investment projects.

The company's objectives in social investments for 2019 include:

  • Develop and implement programmes to support the company's development strategy and to enhance the effectiveness of its contribution to solving the regional tasks.
  • Maintain and further the dialogue with stakeholders aimed at creation of a sustainable social basis for the company's initiatives.
  • Improve social programmes efficiency by:
  • involving the stakeholders in the development and implementation of external social programmes;
  • expanding collaboration with state authorities, business partners, expert and public organisations while implementing social projects;
  • replicating effective models of social programmes in the region and at the federal level;
  • ensuring knowledge management in the field of corporate social responsibility (CSR) and developing advanced training system to improve skills of employees engaged in social investment programmes, and ensuring high-level information visibility and transparency.

9.5.2. The Energy Social Initiatives Fund

The Energy Social Initiatives Fund finished second in the Corporate Charity Leaders project under the Best Grant Competition category. The category was established by the Presidential Grants Foundation.

The Energy Social Initiatives Fund is one of Sakhalin Energy's charitable programmes that demonstrates the comprehensive and consistent approach to promoting social transformation in the host region and its commitment to solving important problems of local communities. The grant programme, launched in 2003, allows the company to support the most interesting and effective solutions to community problems. When selecting projects, the company is guided by the principle of openness and transparency. The Expert Council consisting of representatives of the company, NGOs and government authorities evaluates proposals and selects the winning projects. Information on the terms and conditions for participation in the contests and the selection criteria is available on the website of the Energy Social Initiatives Fund (www.fondenergy.ru).

Financing is provided for projects in several focal areas, including education, environmental protection, art, culture, social support, sports, and healthy lifestyle promotion.

Since 2003, 302 non-profit organisations and social institutions in 64 settlements of Sakhalin have received financial support as part of the Energy Social Initiatives Fund. In total, 594 projects have been implemented in the years of the programme. The company's investments have amounted to over 84.97 mln roubles.

Number of Projects that Received Funding in 2003–2018 (by districts)

In 2018, funding was granted to 47 projects, including:

  • As part of the Avatar in the Library. New Technologies in Servicing Readers project, there is a new employee in the Okha City Library No. 13 — a robot librarian who acts as a guide to readers in the world of literature: introduces readers to recently published books, tells them about the library, conducts quizzes, acts as a host in educational and gaming activities. The robot librarian is able to work not only indoors, but also outdoors, that is why a number of activities are held outside the walls of the library. As a result, children and young people get more and more interested in visiting the library, and the number of its users increases.
  • The implementation of the Young Meteorologist project resulted in the installation of a meteorological station in the territory of Vasilek Kindergarten No. 29 (Sanatornoye village), which gives teachers an opportunity to acquaint children with the main standard meteorological instruments, the methods and techniques of observation and processing obtained results, makes it possible to conduct systematic observation of the weather and seasonal phenomena in the surrounding nature, as well as to study the microclimate of the territory around the kindergarten. The project is intended for children, parents, teachers, residents of Sanatornoye village, and includes a set of activities aimed at improving the environmental awareness of project participants.

9.5.3. The Safety Is Important Programme

Safety is one of Sakhalin Energy's top priorities. Since it regards safety to be among the most topical issues in Sakhalin, in 2005 the company initiated The Safety Is Important programme, and has been implementing it in partnership with the Sakhalin Emercom and the Ministry of Education of the Sakhalin Oblast ever since.

Projects under the programme are implemented with the participation of public organisations and state institutions such as V.A. Polyakov Search and Rescue Team of the Russian Emercom, the Department of the State Road Safety Inspectorate of the RF Ministry of Internal Affairs for the Sakhalin Oblast, the Sakhalin Branch of the All-Russian Voluntary Fire Organisation, the Rossoyuzspas Sakhalin Regional Public Organisation, the Regional Extracurricular Educational Centre, and others.

The programme is developing in several key areas, one of which is the creation of educational cartoons about safe behaviour in various situations. Senya, the main character of the cartoons, has become the symbol of the programme. The subjects of the cartoons are later used as the basis for comic books, published for educational purposes.

The comic book titled Safe Way to the School was published just before the beginning of the new school year. Now this book is used in educational activities throughout the island.

In May 2018, the presentation of a new cartoon was held in the Dalnee village school. The cartoon, devoted to the safe use of gas in everyday life, was released in time for the beginning of active gasification of residential buildings in the settlement. The event was attended by employees of Sakhalin Energy and Gazprom Gas Distribution Far East — the operator of the village gasification project. 

In October 2018, the traditional Children's Safety Holiday was held, which brought together children's teams from 15 districts of the island. This year, two stages of the competition dedicated to Internet security and transport safety were held in a new format and with the participation of new partners. For the first stage, the organisers together with MTS staff equipped a room in which each participant was to conduct an online broadcast in compliance with the information security rules. At the Transport Safety stage, employees of the Yuzhno-Sakhalinsk Children’s Railway checked how the young participants knew the railway safety rules.

The target audience of the programme also includes adults — teachers and parents. Engagement with these stakeholders is carried out through the organisation of competitions for Life Safety teachers and the support of work in the dedicated Life Safety classrooms at schools and preschool institutions.

During the skiing season, Senya was an active participant in the events held at the Mountain Air Sports and Tourist Complex. In April 2018, during the end of the season holiday, a separate session was devoted to skiing safety issues. The opening of the new 2018/2019 season was also held with the participation of the main character of The Safety Is Important programme.

Detailed information about the programme and related materials are available on the website www.senya-spasatel.ru . Since 2018, Senya has also had an Instagram account.

9.5.4. Hurry Up for Good Deeds Programme (Support for Charitable Initiatives of Employees)

Corporate volunteering is one of the forms of CSR implementation, which not only expands the scope and range of the company's charitable programmes, but also unites the personnel. Sakhalin Energy involves employees in charitable programmes and supports their volunteer initiatives in every possible way. The programme was launched in 2003 as a grant competition to support employees’ charitable initiatives, and has undergone a number of changes since.

Currently, the programme offers employees various opportunities:

  1. Participation as a volunteer in the preparation and holding of corporate campaigns to raise funds for social institutions selected by employees during a survey via the Intranet (three times a year).
  2. Participation in Volunteer Days (Voluntary Community Work Days) (twice a year).
  3. Initiation and implementation of their own charitable projects with the participation of colleagues.
  4. Provision of professional assistance (pro bono) on their own initiative, or participation in the company's projects aimed at developing the potential of the company's charitable programmes participants (NGOs and state-funded institutions).

The various formats of participation in the programme make it possible to involve in volunteering those who are ready to act as initiators and organisers, as well as those who are willing to join them during a charity event. According to the evaluation of the social programmes, almost 30% of the company's employees participate in the programme. Employees can also invite the members of their families, including children.

In 2018, there were two Voluntary Community Work Days in the territories of the rehabilitation centres for the disabled. Two corporate campaigns were organised to raise funds for the Golden Mustang Equestrian Club, the Kirovskoe Boarding School for Mentally Retarded Children, and the Makarov Social Rehabilitation Centre for Children. These institutions are actively implementing innovative programmes for the rehabilitation of children through sports activities. Sakhalin Energy organised the annual New Year Miracles charity event: on the eve of the most popular winter holiday, the company's employees granted the wishes of 169 young Sakhalin residents with disabilities or in difficult family circumstances. Employees donated about 2.95 mln roubles during the year, and, according to the Hurry Up for Good Deeds Programme rules, this amount was doubled by the company.

The company's employees increasingly use their professional knowledge and skills to contribute to the development of partner organisations. In particular, in 2018 they organised and held a number of seminars on occupational safety and health issues for employees of the Mountain Air Sports and Tourist Complex and teachers of Yuzhno-Sakhalinsk schools, delivered lectures for students and schoolchildren, worked as members of the examination boards at the local universities, etc.

9.5.5. Korsakov Partnership Council for Sustainable Development

The Korsakov Partnership Council for Sustainable Development, a social investment and sustainable development programme implemented in the Korsakov Municipal District of the Sakhalin Oblast, was initiated by Sakhalin Energy in 2003. As part of this programme, the company provides financial assistance to social projects.

The programme is managed by the Korsakov Partnership Council for Sustainable Development. The Council consists of 9 members, three representatives of each party: Sakhalin Energy, the government authorities, and the community of the Korsakov Municipal District.

In addition to being a stakeholder engagement tool and an expert council to review projects for social investments, the Korsakov Partnership Council also plays a role in monitoring of the population’ social activity in the district.

Another task solved by this programme is involving as many possible community members of the Korsakov District in discussions of projects. To do this, a project fair has been held twice a year as part of the Korsakov Initiatives Contest. This is both a public presentation and a competition of ideas. These fairs are open to participation of all residents, and they choose the most relevant projects and prioritise the proposals submitted that need to be implemented first to further the district advancement.

In 2018, public consultations on the Korsakov Sustainable Development Partnership Council activities were held in 10 settlements of the Korsakov District. 53 residents were provided with information on the results of the work of the Partnership Council, its achievements, implemented projects, and plans for the future.

During public consultations, an assessment of the Korsakov Municipal District population’ attitude towards the work of the Korsakov Partnership Council is made, and the residents' awareness of the projects implemented in the Korsakov Municipal District under the support of Sakhalin Energy. In addition, proposals are collected regarding further development of the programme.

The Korsakov Partnership Council for Sustainable Development has performed competitive selection of projects since 2004. In 2018, the Council supported 17 projects proposed by local non-profit organisations.

Materials on the Korsakov Partnership Council are available at www.korsakovsovet.ru .

9.5.6. Sakhalin Indigenous Minorities Development Plan

The Sakhalin Indigenous Minorities Development Plan (hereinafter referred to as SIMDP or the Plan) is a partnership programme that has been jointly implemented by Sakhalin Energy, the Regional Council of Authorised Representatives of the Sakhalin Indigenous Minorities, and the Sakhalin Oblast Government since 2006. The programme has been divided into five-year phases, with the period of 2016–2020 being SIMDP 3.

Every year, consultations are held as part of the Plan in all areas of SIM traditional residence. In 2018, 13 public meetings, attended by 187 people, were held in 11 communities. The main objectives of the consultations were to inform the public about the results of the 2017 Plan and the competitive programmes for 2018, as well as to discuss issues related to the management and implementation of the Plan as a whole and its individual programmes in particular.

9.5.6.1. Goals and Structure of the SIMDP

In 2016–2020, the Sakhalin Indigenous Minorities Development Plan aims to achieve the following key objectives:

  • Capacity building: to perfect leadership qualities and technical skills (including those in accounting, budgeting, business planning, economic activity, preparation of reports), and to support the aspiration for further development of ethnic self-awareness.
  • Social, cultural and economic development: the targeted areas for support are cultural revival, economic viability of traditional enterprises, and to improve social conditions. Focus is made on long-term strategic planning in line with the principles of sustainable development.
  • Independent fund preparation: assistance in the preparation for the eventual establishment of an independent SIM development fund.
  • Disclosure of the environmental effects of the Sakhalin-2 project: to ensure timely provision of objective and complete information about the existing and/or potential impacts, and about the measures taken to prevent and/or minimise any potential negative effects.

Governance Structure (2016–2020)

Decisions on the allocation of funds under SIMDP are made by the programme committees that consist exclusively of SIM representatives, specially elected at meetings in the districts. The programme committees are supported in their work by the Expert Groups and District Committees.

Independent monitoring of the Development Plan is conducted on an annual basis. This gives the SIMDP partners and Sakhalin indigenous minorities an opportunity to get an independent assessment of the Plan and the results of its programmes, and also to identify the problems to promptly develop appropriate corrective measures. The monitoring is conducted by a social work specialist with extensive international experience in the development and monitoring of indigenous minorities projects. In 2018, after half of the SIMDP 3 implementation period, a midterm evaluation of the programme implementation was made. Two different methodological approaches were used for this purpose: a survey of public opinion and quality surveys and observations conducted by the midterm evaluation team, which included Gregory E. Guldin, Independent Expert, L.V. Passar, Indigenous Peoples representative from Khabarovsk Region, and A.T. Konkov, Head of Sociology Department at SSU.

9.5.6.2. Traditional Economic Activities Support Programme of the SIMDP

The funds of the Traditional Economic Activities Support Programme were distributed among its components such as business planning, self-sufficiency, and capacity building.

In 2018, the Programme Committee approved 32 projects aimed to support clan and family enterprises, communities and other associations of the Sakhalin Indigenous Minorities, to provide aid to SIM representatives and to conduct workshops. In the framework of the projects, boat motors, nets and fishing gears, snowmobiles, consumables, and certain types of electrical appliances were purchased for conducting traditional economic activities.

In 2018, the Second Sakhalin Oblast Traditional Sports Competition among SIM Children was held in Poronaysk. The key participants of the event were the combined teams from seven districts of the island — Aleksandrovsk-Sakhalinsky, Nogliki, Okha, Poronaysk, Smirnykh, Tymovsk and Yuzhno-Sakhalinsk. The competition programme included shooting from the traditional bow, the triple jump, throwing tujiang on the trochee, and other events, which show the peculiarities of the national sports of Sakhalin indigenous ethnic groups. The event was organised by the Sakhalin Oblast Government and Sakhalin Energy under the Sakhalin Indigenous Minorities Development Plan.

9.5.6.3. Social Development Fund of the SIMDP

The resources of the Social Development Fund were distributed among its components, namely Education, Healthcare, Capacity Building, Culture, and Sports. In 2018, the Social Development Fund Committee approved 28 projects. The Nivkh ('Man') Territorial-Neighbourhood Community of the Indigenous Minorities of the North participated in the implementation of the SDF projects as a partner organisation. As part of educational projects, 58 students of specialised secondary and higher education institutions received financial support, and 9 people were provided aid for medical reasons.

For more details about the implemented projects, please visit the website of the Development Plan www.simdp.ru.

According to the Corporate Charity Leaders 2018 Ranking, the Sakhalin Indigenous Minorities Development Plan is the best programme that significantly contributes to the implementation of the UN Sustainable Development Goals (the category was sponsored by the UN in Russia).

9.5.7. Silhouette Magic by Semyon Nadein (a Cultural Project)

The Silhouette Magic by Semyon Nadein exhibition was opened in the Literary and Art Museum of Anton Chekhov’s Book Sakhalin Island. It worked in Yuzhno-Sakhalinsk until 21 January 2018. In February 2018, the exhibition was transferred to Okha, and then it toured the local history museums of Nogliki, Tymovsk, Poronaysk, Korsakov, where everyone willing could admire the literary and decorative-applied works of the Evenki artist, who embodied the traditions of the Sakhalin Indigenous Minorities in his masterpieces. The exhibition was accompanied by a series of events under the general title Around the Exhibition: excursions, workshops, a shadow performance based on Semyon Nadein’s works, and a street laser show with images created by the artist. In addition, the residents of each town participating in the project had an opportunity to take part in an appliquéd ornament contest. The project will be completed in February 2019. The closing ceremony will include the presentation of a home shadow theatre — a set for arranging an amateur shadow performance at home.

In total, the exhibition and its accompanying events were visited by more than 10,000 people, most of which — as a part of charity events.

9.5.8. Special Projects Dedicated to the Year of Volunteers in the Russian Federation

9.5.8.1. My Contribution to the Development of the Island Project

During the Eastern Economic Forum held in September 2018, Sakhalin Energy and the Sakhalin Oblast Government signed a Memorandum of Intent, which serves as a basis for partnership in the field of socio-economic development of the region within the framework of the Mountain Air Sports and Tourist Complex project. The document provides for cooperation in the development and support of the My Contribution to the Development of the Island volunteer movement project and the improvement of safety culture at the Mountain Air Sports and Tourist Complex. The memorandum was signed to continue cooperation after the pilot phase of the project, launched in late 2017, and is aimed at the development of volunteering at the Mountain Air Sports and Tourist Complex.

Being one of the fastest growing ski resorts in the Far East and also the island’s signature attraction, Mountain Air will be the main venue for the Children of Asia 2019 international competition. Today, Sakhalin youth have a splendid opportunity to personally take part in the development of their city and region. The company provided not only financial, but also methodological and organisational support to the project throughout the year, thus promoting volunteering on the island. Involving young people in social practice through the development of volunteering creates a solid foundation for the personal self-fulfilment of volunteers, and helps them to make a significant contribution to the future of Sakhalin.

9.5.8.2. #I’M A VOLUNTEER Media Project

This is Russia’s first cinematographic interpretation of volunteering in Russia. The presentation of the film took place in December 2018 in almost 1,500 Russian cities and villages. The ‘film of the year’ created by Third Sector Social Films Laboratory depicts volunteering as a major social movement and as heroic acts performed by each volunteer. Sakhalin Energy was one of the first partners of the project, providing support in the film making and promoting its screenings on Sakhalin.

#I’MAVOLUNTEER was filmed in different regions of the country. It tells amazing real-life stories of ordinary people who, at some point of their lives, felt a desire to help others. The Sakhalin story, included in the picture, is about the participants of the first Russian project for training volunteer rescuers of marine mammals. The Sakhalin: Man and the Sea project, implemented by the Boomerang Club with the support of Sakhalin Energy, subsequently received the support of the Presidential Grants Foundation and was recognised as one of the best social projects in Russia.

9.5.8.3. Volunteering: Present and Future. Development Prospects Conference

The conference, held in Yuzhno-Sakhalinsk in October 2018, brought together more than 150 well-known representatives of the volunteer movement in Russia. The participants spent two days discussing technologies for the development of volunteering, modern approaches and best practices, legal and financial aspects of the movement. There were separate sessions devoted to corporate volunteering and volunteering in the field of culture and sports. Representatives of the National Council for Corporate Volunteering, the Mosvolonter Resource Centre for the Development and Support of the Volunteer Movement, the V. Potanin Charitable Foundation, the State Hermitage Museum and the Darwin Museum shared their experience with the conference participants. Sakhalin volunteers also told their colleagues about their practices.

The event helped not only to summarise the experience, but also became a platform for effective exchange of views, dialogue and search for partners to implement the best volunteering practices on Sakhalin.