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Essar Energy
Sustainability
Report 2012
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Contents
01. Sustainability performance highlights
02. Message from the CEO
04. About the report
06. Essar Energy at a glance
08. Our pedigree
10. Awards and recognition
11. Significant changes and events
12.Certifications
13. Our sustainability approach
19. Corporate governance
22. Economic value
23. Our people
36. Health, safety and environment
54. Product responsibility
57. Corporate social responsibility
65. Our memberships
66. G3.1 content index
78. GRI check statement
79. Independent assurance statement
81.Glossary
Sustainable investment
to fuel the future
Essar Energy plc Sustainability Report 2012
Strategy
Essar Energy’s strategy remains clear;
to create a world-class, low cost
integrated energy company, positioned
to capitalise on India’s rapidly growing
energy demand. Our portfolio includes
operations and growth projects in
the areas of refining and marketing,
exploration and production and
power generation and transmission.
Since January 2011, we have
completed approaching US$4 billion
of growth projects across refining and
power generation which positions
us to deliver a significant increase
in cash flows in future years.
Essar Energy plc Sustainability Report 2012
01
Sustainability performance highlights
Operational, economic and governance
Environment
Completion of Vadinar refinery expansion and optimisation
projects, taking capacity to 405,000 barrels per day
(bpd)/20 million metric tonnes per year (mmtpa) and
increasing complexity from 6.1 to 11.8
Carbon Disclosure Project ranked Essar Oil as the best
in carbon management in the oil and gas sector in India
during 2011
Power generation capacity increased to 2,800 megawatts
(MW) from 1,220 MW
3,011,502 tonnes of carbon dioxide (CO2) saved at
Essar Power
Anti-Corruption policy and Anti-Corruption code adopted.
Senior leadership and critical employees trained
6,297,886 kilowatt hours (kWh) of energy saved at Essar Oil
50% reduction in sulphur oxide (SOx) emissions at Essar Oil
72% reduction in nitrogen oxide (NOx) emissions at Essar Oil
Social
1 MW solar farm in Bhuj commissioned by Essar Power
Essar Oil featured as one of India’s Best Employers in a
study conducted by Aon Hewitt in 2012
53% reduction in indirect energy consumption at Essar Oil
Essar Oil improved its Employee Engagement score from
57% in 2008 to 81% in 2012, surpassing the industry
average in India of 77%
31.8% reduction in employee turnover by Exploration and
Production business
24.9% reduction in employee turnover by Essar Oil
24.4% reduction in employee turnover by the Power
Business Group
Zero LTI frequency rate achieved by the Stanlow refinery,
Essar Power, Bhander Power and Vadinar Power
30% overall increase in reporting of “near miss” incidents
(excluding Stanlow)
Over 1,000 contractors at all sites involved in safety critical
jobs assessed for competency
Essar Energy’s work in providing access to drinking water in
the Vadinar region directly benefited over 28,000 community
members in 11 villages
Essar Oil’s healthcare initiatives in the Vadinar region
benefited over 39,000 community members during the
reporting period
Over 50,000 individuals benefited through community
initiatives in Raniganj, West Bengal.
Essar Energy plc Sustainability Report 2012
28% reduction in indirect energy consumption at
Exploration and Production, Mehsana
Contents
> 01. Sustainability performance highlights
> 02. Message from the CEO
> 04. About the report
> 06. Essar Energy at a glance
> 08. Our pedigree
> 10. Awards and recognition
> 11. Significant changes and events
> 12.Certifications
> 13. Our sustainability approach
> 19. Corporate governance
> 22. Economic value
> 23. Our people
> 36. Health, safety and environment
> 54. Product responsibility
> 57. Corporate social responsibility
> 65. Our memberships
> 66. G3.1 content index
> 78. GRI check statement
> 79. Independent assurance statement
> 81.Glossary
02
Message from the CEO
“It gives me great pleasure
to present to you the first
sustainability report of
Essar Energy plc.”
We view this report as a significant
step forwards in our development as a
Company and a tool that brings together
our sustainability initiatives, allowing you
to view and measure our progress.
Since our listing on the London Stock
Exchange in May 2010, we have grown
into a diversified energy major with a
large portfolio of refining and marketing,
exploration and production, and power
assets in India, the UK and in other
parts of the world.
Our flagship Vadinar refinery on India’s
west coast is the second largest private
refinery in India with a capacity of
20 million metric tonnes per year
Essar Energy plc Sustainability Report 2012
(mmtpa) following an expansion
completed in 2012. Our acquisition of
the Stanlow refinery on 31 July 2011
brought the second largest refinery in
the United Kingdom into the business.
We are the biggest coal bed methane
(CBM) player in India with over 2,700
square kilometers (sq km) of acreage
and over 10 trillion cubic feet (tcf) of
reserves and resources. We are one
of the largest private players in India’s
power sector with a current capacity
of 2,800 megawatts (MW) and an
additional 3,900 MW under construction.
The energy and power sectors are at
the core of the global economy. Our
Company produces the means to drive
our cars and buses, light up our
homes and keep our industries running.
Unarguably, the sectors’ impact on the
environment, economy, and society is
immense. One of our biggest challenges
in operating such a large portfolio lies
in maximising its positive impact on
the planet.
How can we run a sustainable
business? It is our belief that we must
take all possible steps towards making
Essar Energy an industry leader in
business practices that have the
maximum possible positive impact on
the safety and wellbeing of our people,
our communities, and our environment.
Our employees are the strongest
links in our path to a sustainable future.
Developing and nurturing a culture of
responsible behaviour among these
employees is the strongest foundation
on which we can build a Company
that creates the maximum value for its
stakeholders. This culture of responsible
behaviour must encompass not only
the relationship between the employees
and the Company, but also their
relationships with each and every
stakeholder that is impacted by
our activities. It will be our constant
endeavour to work with the communities
around our operational sites and
encourage our employees to volunteer
their time towards these initiatives.
03
The successful expansion of the
Vadinar refinery included improving its
complexity from 6.1 to 11.8, making it
one of the most complex refineries in
the world and allowing it to produce
cleaner fuels which are compliant with
Euro IV and V standards. The refinery
already had the capability to process
32 different types of crude, and the
expansion now allows it to process a
wider, heavier basket of crude while
significantly reducing its emissions.
Our crudes will now include ultra
heavy varieties from Latin America.
We also recognise the immense scope
for, and positive impact of, renewable
energy. Essar Power has already taken
the first steps in this area by harnessing
solar power: we are operating a solar
farm in Gujarat and are looking to
expand further in the sector.
Safety is a priority at all our operational
sites. As we operate in a complex
business environment involving
thousands of employees and vast
amounts of resources, ensuring the
safety and integrity of our operations
is of paramount importance to us. The
Vadinar refinery won accolades from
national and international organisations
for its safety performance during the
15 month reporting period, while the
Stanlow refinery has achieved zero lost
time injury (LTI) incidents since its entry
into the Essar business. The Vadinar
refinery and power plants in Hazira are
OHSAS 18001:2007 certified for health
and safety management.
Environment and resource
management are very important issues
for us. All of our major operational sites
at Vadinar, Stanlow and Hazira are ISO
14001:2004 certified for environmental
management. We will strive to bring
all our operational sites up to similar
standards of environmental
performance and reporting.
With various projects in different stages
of construction and commissioning,
our asset base is set to grow further.
It remains our priority to ensure that
we follow the most stringent health,
safety and environment norms at all our
commissioned and under construction
sites. In addition, we hope to begin
reporting on their environmental
performance in our future reports.
Essar Energy plc Sustainability Report 2012
Assuring secure raw material supply
in a weak policy environment is aided
by our strong upstream linkages and
mining assets. We are also working
closely with government and state
players to secure our coal supplies.
Our priorities towards building a more
sustainable business remain consistent
and involve interactions with all of the
stakeholders that are affected by our
activities. These include:
• Improving the lives of communities
around our operational sites through
a strong focus on education,
infrastructure and healthcare
• Continued expansion of the scope
and scale of our efforts and
initiatives towards community
development
• Making health and safety the top
priority for all employees, led by the
senior management
• Developing our internal talent
and focusing on employee learning
and growth
The Board is also closely focused
on risk management, ensuring we
take account of the significance of
environmental, social and governance
matters affecting our business,
particularly where these might impact
short-term and long-term value.
As the Chief Executive Officer, my senior
management team and I take up this
challenge to ensure our employees view
our sustainability objectives as critical to
the development and success of our
Company. With our first report, we
have taken a strong first step towards
communicating our economic, social
and governance performance with you,
our stakeholders, and look forward to
demonstrating our improvements
and achievements in our future
sustainability reports.
Sincerely,
Naresh Nayyar
Chief Executive Officer
Mumbai, 24 July 2012
04
About the report
“We see sustainability reporting as a key element of
sustainability management and a driver for internal change”.
We have adopted international practice
in our reporting strategy and our first
report adheres to GRI G3.1 Guidelines.
We have also sought to address
the three principles set out by
AccountAbility, the international
sustainability organisation, in line with
accountability standard AA1000APS –
2008. These principles are:
• Inclusivity, by which people should
have a say in the decisions that
impact them
• Materiality, where decision makers
should identify and be clear about
the issues that matter
• Responsiveness, under which
organisations should be transparent
about their actions.
Essar Energy plc Sustainability Report 2012
This report includes information on
our four principal businesses, namely
Refining and Marketing India, Refining
and Marketing UK, Exploration and
Production and Power.
The report excludes information
on power sites that were under
development and construction;
onshore and offshore blocks that
were either in the development phase
or under exploratory survey in the
15 month reporting period.
The compiled data includes information
from all sites within the report
boundary. The sites included in the
boundary represent over 95% of the
business by revenue
05
Application of the reporting principles for defining quality
The following explains how we have applied the GRI reporting principles for defining quality.
Balance
The report includes both favourable and unfavourable results
in economic, social and environmental aspects.
Comparability
Earlier this year, Essar Energy decided to move its financial
reporting to a March year end to bring our reporting into line
with the Indian tax year, meaning that we have reported
financial numbers for a 15 month period from January 2011
to March 2012 to allow this change to take place. As a result,
this sustainability report also covers the 15 month period.
Subsequent reports will of course cover 12 month periods
running from April to March. However, wherever available,
this report does include two year data for the purpose of
comparability to enable our stakeholders to analyse
performance over time.
Accuracy
The qualitative information includes policy statements and
briefings about the internal processes in place. Wherever
applicable, quantitative data is included to substantiate the
information. As part of Essar Energy’s internal processes,
standard data measurement techniques are used for data
collection, collation and analysis. References to standard
protocols are included in the relevant sections. Appropriate
mention has been made where the data has been estimated.
Timeliness
This is our first sustainability report and going forward,
we will report on a yearly basis. As far as possible, we
intend to ensure that the report is published along with the
Annual Report.
Clarity
We have sought to present the information in a way that is
understandable and usable by our stakeholders. Graphs
and charts have been used as appropriate. Cross references
to the Annual Report and links to our website have been
provided to assist the stakeholders to obtain further detailed
information, if desired.
Reliability
As a Company we know that assurance brings credibility to
the report. It helps in enhancing the quality and reliability of
information provided therein and gives us feedback from a
different perspective, something that is vital in our quest
for improvement. We engaged Ernst & Young to provide
independent assurance on our first report in line with the
requirements of ISAE 3000 and AA 1000AS Type 2 Moderate
Assurance. The details of the scope and extent are described
in the assurance statement provided by Ernst & Young, see
page 79.
We are on a path of continual improvement and will address the indicators in the subsequent reports in line with the
commitment made in this report. Though we have tried to include information that our stakeholders would like to see in this
report, we are open to any comments to improve our subsequent reports.
You may send your feedback or suggestions to the following:
Mark Lidiard, Director – Investor Relations and Communications, Essar Energy. Email: ir@essar.com
Sonal Kohli, Lead – Sustainability at Essar House, 11, KK Marg, Mahalaxmi, Mumbai 400 034. Email: sonal.kohli@essar.com
Essar Energy plc Sustainability Report 2012
06
Essar Energy at a glance
Essar Energy is a world class, low cost, India-focused,
integrated energy Company with US$17.3 billion of assets
across the oil and gas, exploration and production and
power industries.
4
+ Power
13
14
15
21
1
26
2
25
Captive projects
11. Hazira
12.Bhander
13.Vadinar
14.Vadinar PI
15.Vadinar PII
16.Hazira II
17. Paradip
7
22 23
6
27 28
8
18
19
20
11
12
29
16
9
10
Imported coal projects
18.Salaya
1,200 MW
19.Salaya II
1,320 MW
20.Salaya III
600 MW
24
17
41
3
+ Refining and Marketing
Domestic coal projects
21.Mahan I 1,200 MW
22.Tori I 1,200 MW
23.Tori II
600 MW
24.Navabharat I 1,050 MW
1. Vadinar refinery 20 mmtpa
5
+ Exploration and Production
2. Mehsana Oil Block
3. Ratna/R Series
4. Assam Oil Blocks
5. Mumbai Offshore
6. Raniganj CBM
7. Rajmahal CBM
8. Sohagpur CBM
9. Talchir CBM
10.IB Valley CBM
+ Coal Mines
25.Mahan Coal Block – 73 mmt
26.Amelia Coal Block – 50 mmt
27. Ashok Karkata Coal
Block – 100 mmt
28.Chakla Coal Block – 71 mmt
29.Rampia Coal Block – 112 mmt
30
36
39
41
International Assets
30.Stanlow refinery, UK
31. Kenya refinery
32.Block 114, Vietnam
33.South East Tungal
Block, Indonesia
34.OPL 226 Block, Nigeria
35.Madagascar Blocks
36.Algoma Power Plant – 85 MW
37. Aries Coal Block – 64 mmt
38.Mozambique Coal Block – 35 mmt
39.Registered Office, London
40.Head Office, Mauritius
41. India Office, Mumbai
Essar Energy plc Sustainability Report 2012
515 MW
500 MW
120 MW
380 MW
510 MW
270 MW
120 MW
32
34
37
31
33
38
35
40
07
The Company’s strategy is to create a world-class, low cost integrated energy company, positioned to
capitalise on India’s rapidly growing energy demand. This will be achieved by:
• Optimising the performance of all existing assets
• Delivering growth through a variety of power and oil and gas projects
• Leveraging skills and our Indian asset base to identify growth opportunities
• Being a good corporate citizen
Since its initial public offering (IPO) on the London Stock Exchange in May 2010, Essar Energy has grown
rapidly by expanding its world class refinery at Vadinar in Western India to 405,000 bpd from 300,000 bpd,
and has acquired the 296,000 bpd Stanlow refinery, the second largest refinery in the UK. The Company
has also increased its power generation capacity from 1,220 MW at the time of the IPO to 2,800 MW
currently. Essar Energy also has, through a franchise model, over 1,400 operational retail outlets spread
across India and owns a 50% stake in the 80,000 bpd Kenya Petroleum Refineries Limited refinery in
Mombasa, where the Government of Kenya owns the other 50%. In addition, Essar Energy has a portfolio
of 15 exploration blocks and fields in various stages of development, including those in India, Indonesia,
Madagascar, Nigeria and Vietnam.
Our operations
Oil and Gas
Refining and
Marketing
Having successfully completed the expansion
of the flagship Vadinar refinery Essar Oil is now
India’s second largest private sector refiner.
Vadinar’s refining complexity has risen to 11.8
from 6.1 previously, allowing the refinery to
process a heavier crude basket and to
produce fuels of a higher quality and value.
As a part of the expansion and optimisation
projects at Vadinar, a Visbreaker unit was
converted into a new crude distillation unit
dedicated to processing ultra heavy crude.
Also, additional crude tanks and pipelines were
built along with two additional coke drums,
and the Fluidised Catalytic Cracking Unit was
revamped. More than 50% of the gasoil and
gasoline being produced at the refinery is now
compliant with Euro IV and Euro V standards.
The Stanlow refinery supplies approximately
15% of the UK’s national fuel transport
demand. The refinery has a complexity of
8.2 and supplies a variety of fuels, principally
petrol, diesel and jet fuel, across the UK
by road and pipeline.
Oil and Gas
Exploration and
Production
Essar Energy has 15 blocks under various
stages of development, including India,
Indonesia, Vietnam, Madagascar and Nigeria,
with total reserves and resources of 2,100
million barrels of oil equivalent (mmboe). Our
major development and production assets
include the Raniganj CBM block in West
Bengal, the Ratna/R Series fields offshore
from Mumbai and the Mehsana block in
Gujarat. The Raniganj block is one of India’s
first CBM projects and Essar Energy is India’s
leading CBM player with 2,733 sq km of
acreage across five blocks.
Power
Generation and
Transmission
With a current installed capacity of 2,800 MW
and a further 3,900 MW under construction,
Essar Energy is one of India’s leading private
power producers.
Gujarat, in June 2012. Two others, the 1,200
MW Mahan I project and the 510 MW Vadinar
P2 project, are also due to be completed in
2012. Meanwhile, the projects at Paradip (120
MW), Hazira II (270 MW), and Tori I (1,200
MW) and Tori II (600 MW) are expected to be
commissioned in the first quarter of 2014.
The Company completed its first coal fired
power project, the 1,200 MW Salaya plant in
Essar Energy plc Sustainability Report 2012
08
Our Pedigree
1
6
7
8
2
5
16
13
12
3
11
15
14
10
22
9
4
Locations
1.Canada
2.USA
3. Costa Rica
4.Argentina
5.Spain
6. United Kingdom
7.France
8.Italy
9. South Africa
10.Kenya
11.Qatar
12. Saudi Arabia
13.Dubai
14.Indonesia
15.Sri Lanka
16.India
17.China
18.Vietnam
19. The Philippines
20.Australia
21. New Zealand
22.Madagascar
23.Mauritius
24.Papua New Guinea
25.Singapore
Essar Energy plc Sustainability Report 2012
23
09
Essar Energy is a subsidiary of Essar
Global Limited (Essar Global), which
holds 76.72% of the voting rights in
the Company. The Essar Group is an
India-based but increasingly global
conglomerate and apart from its energy
interests, is a leading player in the
sectors of steel, infrastructure (ports,
projects and concessions) and services
(shipping, telecoms, realty and business
process outsourcing). With operations
in more than 25 countries across five
continents, Essar Group employs
75,000 people and has annual revenues
of over US$27 billion.
17
18
The Essar Group began as a
construction company in 1969 and
diversified into manufacturing, services
and retail. Over the last decade, it
has grown through strategic global
acquisitions and partnerships as well
as through green-field and brown-field
development projects, capturing new
markets and discovering new raw
material sources.
19
25
24
20
21
Today, the Essar Group continues to
expand its global footprint, focusing
on markets in Asia, Africa, Europe, the
Americas and Australia. The Essar
Group invests significantly in the latest
technology to drive forward and
backward integration in its businesses,
and on leveraging synergies between
these businesses. It also focuses on
in-house research and innovation to
be a low-cost manufacturer with high
quality products and innovative
customer offerings.
“Essar Group now has operations
in more than 25 countries across
five continents, employing 75,000
people and with annual revenues
of over US$27 billion.”
Essar Energy plc Sustainability Report 2012
10
Awards and recognition
received during the reporting period January 2011 to March 2012
Business Unit
Department
Award Details
Awarding Body
Essar
Energy Plc
Investor
Relations
Chartered Institute of Public Relations Award for Investor
Relations, 2011
Chartered
Institute of Public
Relations, UK
Essar Oil
Limited
HSE
32nd Annual Gujarat State Safety Conference, 2011:
Gujarat Safety
Council
Gujarat State Safety Winner’s Shield, Category II and
Group B, 2009
Certificate for Achieving Lowest Disabling Injury Index among
petroleum, gas generation and distribution and petrochemical
industries, 2009
Certificate of Honour for achieving three million man hours
without accident, 2009
CII Western Region Safety, Health and Environment Awards,
2010 – First Position, Manufacturing (Large) Category
CII
BSC International Safety Awards, 2010 – Distinction, Health and British Safety
Safety Performance
Council
Golden Peacock Environment Management Award, 2011
World
Environment
Foundation
1st FICCI National Safety Excellence Awards for Manufacturing, FICCI
2011 – Gold A ward, Large Scale category
12th Annual Greentech Environment Awards, 2011 – Gold
Award, Petroleum Refinery Sector
Greentech
Foundation
ICC Award for Excellence in Management of Health, Safety and Indian Chemical
Environment, 2010
Council
Top Final Disclosure Score, Indian Energy Sector – Carbon
Disclosure leadership Index, 2011
Carbon
Disclosure
Project
8th CII National Award for Excellence in Water Management,
2011 – Water Efficient Unit (Within Fence)
CII
Essar Oil
Limited
Human
Resources
Golden Peacock Innovation Award, 2010 – Awarded for
in-house web television Essar eNergy Network
Institute of
Directors
Bhander Power
Limited
HSE
12th Annual Greentech Environment Awards, 2011 – Silver
Award, Power Sector
Greentech
Foundation
8th CII National Award for Excellence in Water Management,
2011 – Water Efficient Unit (Within Fence)
CII
Essar Power
Limited
HSE
12th Annual Greentech Environment Awards, 2011 – Silver
Award, Power Sector
Greentech
Foundation
Essar Power
Business Group
Human
Resources
2nd Annual Greentech HR Awards, 2012 – Gold Award, for
outstanding achievement in Best Strategy
Greentech
Foundation
Essar Energy plc Sustainability Report 2012
11
Significant changes and events
during the reporting period, January 2011 to March 2012
Date
Events
February, 2011
Vadinar P1 power project. 380 MW, commissioned
Bhander Power, Hazira, receive Integrated Management Systems (IMS) certification from
international accreditation agency, British Standard Institution (BSI)
Essar Oil commissions aviation fuelling facility at Surat Airport
Essar Oil adds CNG facility to retail outlet offering
Essar Energy enters exclusivity agreement with Shell UK Ltd and offers US$350 million
for Stanlow refinery
March, 2011
Essar Energy plc announces 2010 annual results
June, 2011
Bhander Power records first sale of carbon credits
July, 2011
Essar Energy completes acquisition of Stanlow oil refinery
August, 2011
Essar Energy announces 300 MW long term power purchase agreement (PPA) for Tori I
power plant
Essar Oil commences aircraft fuelling operations at Ahmedabad airport
September, 2011
Stanlow refinery clocks seven million LTI free hours
Iftikhar Nasir takes over as CEO, Essar E&P business
Essar Energy secures second coal source to supply Mahan power project
Volker Schultz appointed as CEO of Essar Oil UK
November, 2011
Essar Power commissions 400 KV switchyard at Salaya
Salaya I power plant synchronised with Gujarat state transmission grid
Essar Oil renews product sale and purchase agreement with Indian Oil
December, 2011
Essar Oil appoints Naresh Nayyar as Deputy Chairman and introduces Lalit Kumar
Gupta as new CEO and MD
Essar Oil announces commissioning of Isomerization Unit at the Vadinar Refinery
January, 2012
Essar Oil announces commissioning of Amine Regeneration Unit at Vadinar refinery
Essar Oil announces increase in gas reserves and resources at Raniganj
Essar Oil commences production of superior grade bitumen conforming to BIS standard
March, 2012
Essar Oil commissions Vacuum Gas Oil Hydrotreating Unit and Sulphur Recovery Unit
at Vadinar Refinery
Essar Oil commissions second key unit, Diesel Hydrotreater, at Vadinar Refinery
Essar Oil completes Vadinar refinery phase I expansion project
Essar Oil outlets in NCR to get CNG pumping facilities; Company signs agreement with
Indraprastha Gas
Essar Energy plc Sustainability Report 2012
12
Certifications
Company
Area
Essar Oil Limited, Vadinar Production and supply
of petroleum products,
captive power generation
and marine operations
Essar Oil UK, Stanlow
Production and supply
of petroleum products
Essar Power Limited,
Hazira
Generation and supply
of power
Bhander Power Limited,
Hazira
Generation and supply
of power
Essar Energy plc Sustainability Report 2012
Certification/Recognition
Certification
ISO 9001:2008
Quality Management
Environmental Management ISO 14001:2004
OHSAS 18001:2007
Health and Safety
Management
ISO 9001:2008
Quality Management
Environmental Management ISO 14001:2004
ISO/IEC 17020:1998
Inspection Management
Integrated Management system conforming to OHSAS
18001:2007 for Health and Safety Management and ISO
14001:2004 for Environmental Management
Integrated Management system conforming to OHSAS
18001:2007 for Health and Safety Management and ISO
14001:2004 for Environmental Management
Certified By
DNV
BSI
UKAS
BSI
BSI
13
Our sustainability approach
Sustainability Policy
Essar Energy is aligned with the Essar Group’s Sustainability Policy that sets out the Essar Group’s environment, social and
economic objectives. The Policy was adopted in January 2011. The sustainability policy is supported by various policies that
exist at corporate, business and site levels. These policies are mentioned in the respective sections of the report.
Sustainability Policy & Objectives
At Essar, we shall make sustainable development an integral part of our business model by focusing on economic, social and
environmental activities.
While doing so, we shall maintain accountability and will continue to improve our stakeholder engagement program.
We shall incorporate sustainable practices in our existing and new businesses and design our growth strategy to remain
competitive and be a good corporate citizen.
Economic Objectives
• Enhance profitability and generate wealth for our stakeholders while pursuing opportunities for growth.
• Assess, prevent, mitigate and manage full-spectrum business risks on a continual basis.
• Create sustainable value by maintaining and improving the quality of our products and services.
Social Objectives
• Have an injury free and healthy workplace and institutionalise a culture of safety in the organisation.
• Foster continual improvement, benchmark our performance and adopt best practices in health & safety.
• Build an organisation that is committed to good corporate governance and social responsibility.
• Implement community development programmes in and around the areas of our operation.
• Enhance economic benefits from our operations and develop partnerships that foster the sustainable development of our
host communities.
• Create enabling environment for the community around areas of our businesses in which they can improve their quality of
life through enhanced educational, economic and health care opportunities.
• Encourage a diverse workforce and provide a work environment in which everyone is treated fairly and with respect.
Environmental Objectives
• Minimise pollution and continually improve the performance to reduce the environmental foot print.
• Optimise resource consumption by planning and carrying out operations using sustainable technologies and processes.
• Ensure compliance to all applicable legal and other requirements.
Shashi Ruia
Essar Group Chairman
January 17, 2011
Essar Energy plc Sustainability Report 2012
14
Our sustainability approach continued
Materiality
Our approach to materiality is derived from our view of the key
building blocks we need to put in place to achieve long term
business success. The materiality process involved issue
identification, prioritisation, and review. The material issues
were identified on the basis of a five-part materiality test:
1. Policy-based performance
2. Direct, short-term financial impacts
3. Stakeholder behaviour and concerns
4. Societal norms (regulatory and non-regulatory)
5. Business peer based norms
Each material issue was mapped against key stakeholders’
concerns to arrive at the final matrix.
Stakeholder’s Concern
This report, being our first one, addresses the issues
significant to Essar Energy.
High
1
2
Medium
3
4
High
1. Rate of Return, Statutory Compliance
2. EBITDA, Project Commissioning, Safety, Supply Chain Mgmt & Security,
Refinery Complexity, International Oil Pricing, Continuity of Feedstock,
Government & Regulatory Policies, Political Situation, Fund Availability,
Market Share, Cost & Quality of Product
3. Community Welfare, Employee Engagement, Throughput, Fuel and cost
4. Mix of Crude, Brand Building
A. Issues of high concern to the stakeholders and
high importance to the Company
1. Operational EBITDA – The financial strength of our
business is of the utmost importance to our investors,
employees, and other stakeholders. An appropriate level
of EBITDA demonstrates the strength of our operations
and shows that we are manufacturing our products to an
appropriate standard and price for the marketplace we
operate in. For details of our financial performance please
visit the investor relations section of our website,
www.essarenergy.com.
For an analysis of Operational EBITDA please see
pages 40–41 of the Essar Energy Annual Report 2012.
Essar Energy plc Sustainability Report 2012
During the 15 month reporting period to March 2012, we
completed the 380 MW Vadinar P1 power project and the
expansion of the Vadinar refinery to 18 mmtpa and after the
period ended, also completed the additional optimisation
project at the refinery to increase capacity to 20 mmtpa.
Also after the period end, we completed the commissioning
of the 1,200 MW Salaya I power project in June.
3. Safety – Health, Safety and Environment (HSE) issues
are of paramount importance to us. We have very strong
HSE policies and practices in place that are designed to
minimise occurrences of major or minor accidents in our
areas of operations. At Essar Energy, our focus on safety
encompasses not just the employees, but also their
dependent families and the communities around our
areas of operation. Activities are centred on training and
awareness programmes.
During the year, the Stanlow refinery and Essar Power Gujarat
Limited, at Salaya, also aligned their HSE management and
reporting with the Company. Our safety performance is
highlighted in this report.
Low
Low
Medium
Current potential effect on company’s economic,
social or environmental performance
2. Project commissioning – Essar Energy has important
projects in various stages of development, construction,
expansion or commissioning in all of the Company’s key
business areas of oil and gas, exploration and production
and power. The Company’s ability to commission projects
to schedule is directly linked to the funds invested into these
projects by our various stakeholders, including investors and
funding sources.
4. Supply chain management and security – Supply
chain management is very important for the Company’s
entire upstream and downstream operations in order to
ensure safe and timely movement of raw materials and
finished products to and from the refinery and power
projects to Essar Energy’s customers in India and
internationally. These include the chain of over 1,400 Essar
Oil-branded fuel retail outlets across India. Managing this
process forms a crucial part of our operating strategy.
5. Refinery complexity – Complexity measures a refinery’s
ability to add value during the processing of crude oil, with
a higher rating given to those refineries which are able to
produce the highest quality, highest value fuels from ultra
heavy, lower cost crude oils. A higher complexity allows a
refinery to produce higher quality distillates such as Aviation
Turbine Fuel (jet fuel) and transport fuels conforming to the
highest environmental standards. Following completion
of the expansion project, the Vadinar refinery now has a
complexity of 11.8, allowing it to process tougher crudes and
produce diesel and gasoline meeting Euro V standards. Prior
to the expansion, the Vadinar refinery’s complexity was 6.1.
6. International oil pricing – Demand for oil products
depends heavily upon the state of the global economy.
In periods of high global energy demand, coupled with
constraints on refining capacity, our Company can expect
higher margins for our products, while an economic
slowdown lowers the demand for our product, thus
potentially affecting profitability.
15
Global liquids supply and demand
105
Other
NGLs
90
Mb/d
Bio
75
Crude
60
45
2010
2015
2020
2025
2030
Source: BP Energy Outlook 2030, January 2012
7. Continuity of feedstock – Oil refining and power
production are our largest revenue generators, and both
require a steady supply of raw materials in the form of crude
oil, natural gas and coal. The risk of disruptions to continuity
of feedstock is mitigated through long term contracts with
suppliers and captive sources of raw material.
8. Government and regulatory policies – As our
Company operates in the core sectors of oil and gas
and power, there is a significant amount of governmental
oversight and regulation. Our Company is a member of
various industry organisations and focus groups that work
with governments to achieve clearer policies on issues such
as environment, emissions and impact on communities.
9. Political situation – The majority of our Company’s
operations are in India where there is a significant amount of
political uncertainty. Higher political risk can raise borrowing
costs for the Company and means that our investors tend to
require greater returns on their investments. Political stability
therefore becomes an important issue both for our Company
and all our stakeholders.
10. Fund availability – There are major construction and
expansion projects underway across the Company’s core
activities. While all current projects have funding already in
place, future availability of funds at a competitive cost is
essential to fund the Company’s future expansion.
11. Market context – Essar Energy’s refinery at Vadinar
is India’s second largest private sector refinery complex with
an annual capacity of 20 mmtpa. With over 1,400 Essar Oil
branded retail outlets across India and over 200 under
construction, we were India’s first private company to enter
fuel retailing. With acreage of over 2,700 sq. km in India, we
also hold the largest CBM acreage. Within this, the Raniganj
block is close to commercial production. The Stanlow refinery,
acquired on 31 July 2011, is the UK’s second largest refinery
and supplies approximately 15% of the nation’s demand for
transportation fuels.
Essar Energy plc Sustainability Report 2012
12. Cost and quality of product – The Vadinar refinery
has been expanded and upgraded to a complexity of
11.8 that allows it to process heavier crudes and produce
high quality products that will meet the most stringent
environmental standards. The higher quality of our
products should allow us a better margin on our sales.
B. Issues of high concern to the stakeholders and
medium importance to the Company
1. Rate of return – A strong rate of return demonstrates
the profitability of the Essar Energy business and our ability
to create wealth for our stakeholders, and thus becomes
an issue of high concern for our investors, lenders and
other stakeholders.
2. Statutory compliance – The core sectors of petroleum
refining, exploration and production and power are highly
regulated across all regions and due to the nature of our
business, statutory compliance is an integral responsibility.
Our Company has in place the processes and practices to
ensure our compliance with all laws of the countries in which
we operate.
C. Issues of medium concern to the stakeholders
and high importance to the Company
1. Mix of crude – The Vadinar refinery processed 27
different varieties of crude during the 15 month period to
March 2012. Following the upgrade of the refinery and an
increase in complexity to 11.8, it will be able to refine a far
greater proportion of ultra heavy and heavy crudes, which
are lower in cost, and process them into superior quality,
higher value products.
2. Brand building – Essar Energy is one of the largest
energy players in India and has a premium listing on the
London Stock Exchange. Essar Oil is listed in India on the
Bombay Stock Exchange and the National Stock Exchange.
Apart from our equity and debt investors, we also impact
many people in the communities where we operate. As a
result of all these interactions with a variety of stakeholders,
we place a very high importance on increasing the strength
of our brand.
D. Issues of medium concern to the stakeholders and
medium importance to the Company
1. Community welfare – Across India and in our other
locations internationally, we work closely with local and
indigenous communities and society in general through
outreach and education programmes and we form
partnerships with local administrations and governments
where appropriate.
Essar Energy channels its community welfare activities
through the Essar Foundation (the Foundation) which drives
the entire Essar Group’s corporate social responsibility (CSR)
activities forward. The Foundation reaches out to society
at large under the 3E Framework – Entrepreneurship,
Environment and Education. The Foundation’s activities in
partnership with our Company fall within the scope of
this report
16
Our sustainability approach continued
3. Throughput – Our businesses of petroleum refining and
power need to be run efficiently and safely in order to ensure
that production processes are optimised and to deliver a
steady and maximised throughput of product. This also relies
on a steady supply of raw materials to convert them into
electricity and petroleum products.
4. Fuel use and costs – Lowering fuel use and overall costs
across our operations improves our margins and reduces
our emissions, including our carbon footprint. Enhanced
operational efficiency protects the overall margin during
periods of high crude prices, and boosts margins during
periods of low crude prices.
Stakeholder engagement
As a Company, we consider stakeholder engagement to be
fundamental to our success. Engaging with our stakeholders
not only helps us in business decision making but also helps
us in prioritising material issues. This engagement brings
many diverse perspectives on issues and gives us an
opportunity to devise an effective plan to tackle them.
The aim of the engagement is to seek a win-win outcome
for both the Company and its stakeholders.
During the 15 month reporting period, the focus was to
deepen our understanding of key stakeholder groups and
issues. Workshops and one-on-one meetings with a wide
variety of people were conducted to identify the stakeholder
influence dependency matrix, set out below.
This matrix consists of stakeholders who can have an impact
on the economic, social, or environmental performance of
the Company or who can be affected by our operations. The
following dimensions were considered while identifying the
stakeholders: responsibility, influence, proximity, dependency
and representation.
The stakeholders were grouped within high, medium, and low
categories depending on the degree and manner in which
they affect or are affected by the Company and its activities.
Essar Energy plc Sustainability Report 2012
We identified our current approach to engagement with
the stakeholders based on the following parameters:
1. Communication: conveying information about us, our
products, growth plans, and more.
2. Consultation: the process of gathering information or
advice about us from our stakeholders.
3. Dialogue: this involves an exchange of views and opinions
initiated by the Company, which may be influenced by
stakeholders.
4. Partnership: this can originate between any combination
of people, public, business, and civil bodies.
The following page shows the diverse range of stakeholders
our businesses engage with and the engagement relationship
with each stakeholder.
Stakeholder’s Impact
2. Employee engagement – Our employees are our most
important stakeholders, and engaging them to create value for
themselves and the Company is a major focus area. Employee
engagement at Essar Energy revolves around the four pillars of
succession planning, building a learning culture, a performance
management system and a leadership pipeline.
High
1
2
Medium
4
5
Low
Medium
3
Low
Stakeholder’s Dependence
1. Suppliers, Government & Regulatory Authorities
2. Investors, Customers, Local Community
3. Employees
4. Competitors
5. Service Providers, Contractors
High
17
Stakeholder Engagement Activities
Employees
ACTIVITY
FREQUENCY
THEMES
Town Hall
Ask HR
Quarterly
Ongoing/Online
HSE Connect
Sampark
Harmony – An initiative encompassing
employee wellness, cultural and family
events and counselling
ESAT (employee satisfaction)
Monthly
Quarterly
Ongoing/Online
Grievances, Initiatives, operations
An employee helpline to discuss individual
performance, remuneration, career prospects and
to take feedback
Advice and support on workplace safety
Employee connection, open house
Employee work life balance, strengthening
employee-family ties, fostering spirit of Essar family
Annual
Feedback, grievances
Investors
ACTIVITY
FREQUENCY
THEMES
Annual General Meeting
Annual
Preliminary and interim results and
interim management statements
Investor meetings
Quarterly
Board and senior management – shareholder
interaction, discussions on performance,
and future plans
Review of financial performance and activities,
Company strategy and future plans
Review of financial performance and activities,
Company strategy and future plans
Financial highlights and updates, corporate reports
and presentations
Review of financial performance and activities,
Company strategy and future plans
Company website
Quarterly, as and
when required
Online
Site visits
Biannual
Customers
ACTIVITY
FREQUENCY
THEMES
Customer Feedback Analysis and CSAT
(customer satisfaction) Survey
Customer meetings
Quarterly
Interaction on product and service issues,
opportunity to seek feedback and suggestions
Review of operations and responding to customers’
issues
As and when required
Local Community
ACTIVITY
FREQUENCY
THEMES
Personnel interaction
Ongoing
Seeking feedback, suggesting solutions and hearing
grievances
Sharing information and best practices, creating
awareness for social and environmental issues
Focus on education, professional training, health
and infrastructure
Community organisation discussions, seeking
feedback on initiatives planned or underway
Case studies and awareness programmes As and when required
Community development programmes
Ongoing
Public hearings
As and when required
Service Providers
ACTIVITY
FREQUENCY
THEMES
Service meetings
As per requirement, via telephone,
emails, conferencing or in person
Discussing service issues, quality and safety,
timeliness of service and delivery
Essar Energy plc Sustainability Report 2012
18
Our sustainability approach continued
Contractors
ACTIVITY
FREQUENCY
THEMES
Contractor safety meetings
Monthly
Awareness programmes
Ongoing
Campaigns
Competitions
Quarterly
Ongoing
HSE Timeout
Monthly
Review of performance, performing audits and
safety checks
Sharing and discussing safety guidelines and
procedures
Sharing new guidelines and best practices
Promoting teamwork, engaging contractors beyond
the work space
Sharing best practice, lessons learnt
Sequor
Quarterly
OISD Training
Safety Audits
Monthly
Monthly/As required
A safety quarterly magazine for all employees and
contractors
Training in safety aspects of functions
Plant and process safety compliance
Government and Regulatory Authorities
ACTIVITY
FREQUENCY
THEMES
Pollution Control Visits
Inspections
As and when required
As and when required
Meetings
Conferences
As and when announced
As and when announced
Pollution inspections, compliance
Regulatory compliances in environment, safety,
labour etc.
Discussing new developments, initiatives or policies
Government industry interaction on specific issues
or topics
Media
ACTIVITY
FREQUENCY
THEMES
Regular one to one update briefings
for journalists
Ongoing
Press releases
As and when required
Site visits
Biannual
Interviews with senior management
Preliminary and interim results and interim
management statements
As required
Quarterly
Brand building, information sharing and education
regarding Company or industry issues or
developments
Announcing achievements or milestones, initiatives
or developments
Showcase assets, review of financial performance
and activities, Company strategy and future plans
Profile raising, educational, information sharing
Review of financial performance and activities,
Company strategy and future plans
Competitors
ACTIVITY
FREQUENCY
THEMES
Market surveys
Third party meetings
Techno-Forums
As and when required
Annual
Ongoing
Technology supplier meetings
As and when required
Information gathering
Industry interaction
Information sharing and discussing common
industrial issues
Sharing technology updates
Essar Energy plc Sustainability Report 2012
19
Corporate governance
Introduction
The Board of Directors of Essar Energy (the Board) is
committed to maintaining high standards of corporate
governance. Following its UK listing on the London Stock
Exchange, Essar Energy is required to comply with the UK
Corporate Governance Code (the Governance Code) or
explain its reasons for non-compliance. For further details,
see the Corporate Governance Report in Essar Energy’s
Annual Report and Accounts 2012.
From an internal perspective, Essar Energy’s Corporate
Governance policy sets forth the vision and principles of
our governance structure. The Company’s Nomination
and Governance Committee keeps key governance matters
under review on a regular basis and the Company also
adopts appropriate recommendations from relevant bodies.
During the 15 month period to 31 March 2012, the Company
has complied with the Governance Code in all respects,
save for the following:
(i) Code Provision A.3.1. Neither Mr. Prashant Ruia,
the current Chairman, nor Mr. Ravi Ruia, the previous
Chairman, met the independence criteria set out in the
Governance Code on their appointment as Chairman, due
to their interests in the Company and their involvement with
the Essar Group. The Board considers that their knowledge
of Essar and role in building it into one of India’s premier
business groups provides significant benefits to Essar
Energy, outweighing any potential conflicts. Both have
made a major contribution to the Group’s growth and
success and the Board was unanimously of the opinion
that their involvement is crucially important to the ongoing
success of the Company.
(ii)Code Provision B.2.4. The Governance Code stipulates
that open advertising or an external search consultancy
should be used within the appointments process for
a non-executive director. Neither was considered
necessary for Steve Lucas’ appointment to the Board in
March 2012 because it was felt that the Nominations
and Governance Committee could identify between
themselves a broad range of potential candidates.
The Board
The Governance Code recommends that at least half of the
Board members, excluding the Chairman, should consist
of independent Non-Executive Directors determined by
the Board to be independent in character and judgement.
Our Board consists of eight Directors, comprising the
Chief Executive Officer and seven Non-Executive Directors
(including the Chairman), of whom five are determined by the
Board to be independent in compliance with the Governance
Code. All of the Essar Energy plc Board members are
selected on the basis of skills, experience, expertise,
managerial qualities and time availability. The profiles of
the members of the Board are available at
http://www.essarenergy.com/about-us/board-and-seniormanagement/the-board.aspx.
Essar Energy plc Sustainability Report 2012
As at 31 March 2012, the Board of Directors comprised:
•
•
•
•
•
•
•
•
Prashant Ruia, Chairman
Naresh Nayyar, Chief Executive Officer
Ravi Ruia, Non-Executive Director
Sattar Hajee Abdoula, Independent Non-Executive Director
Philip Aiken, Independent Non-Executive Director
Subhas C Lallah, Independent Non-Executive Director
Simon Murray, Senior Independent Non-Executive Director
Steve Lucas, Independent Non-Executive Director
In June 2012, the Board appointed Mr. Simon Murray
to the role of Vice Chairman of the Company, and also
appointed Mr. Philip Aiken to the role of Senior Independent
Non‑Executive Director. Both appointments took effect on
1 July 2012.
Mr. Steve Lucas will offer himself for election at the forthcoming
AGM, it being the first AGM since his appointment to the Board
on 29 March 2012. In compliance with the Governance Code,
all of the other Directors will offer themselves for annual
re-election by shareholders at the forthcoming AGM and intend
to do so thereafter on an annual basis at each future AGM.
The Board is accountable to the Company’s shareholders
for the proper management of the Company’s affairs. The
shareholders can provide recommendations to the Board
during the Annual General Meeting or can contact the
Company through its website, www.essarenergy.com.
The Essar Energy plc Board is responsible for the overall
conduct of the Company’s business and has the powers,
authorities and duties vested in it by and pursuant to relevant
laws and the Company’s Articles of Association.
The roles of the Chairman and the CEO of Essar Energy
are separate and a written statement of their responsibilities
has been approved by the Board to ensure that no one
person has unfettered powers of decision. The Chairman is
responsible for the operation, leadership and governance of
the Board, ensuring its effectiveness and setting its agenda.
The CEO is responsible for guiding the implementation of
Board strategy and policy with respect to the Group’s
business, with the help of the Senior Management.
Subsidiary companies
Essar Energy operates its oil and gas business in India
through Essar Oil. Essar Oil has a free float of 10.04% of its
shares on the Bombay Stock Exchange and the National
Stock Exchange of India. Essar Oil has its own Board of
Directors along with an audit and governance committee
that undertakes all the subsidiary’s corporate governance
requirements and ensures and monitors compliance with the
Indian listing requirements. The Exploration and Production
business operates within Essar Oil and is subject to the
same corporate governance requirements. Similarly, Essar
Power, which operates Essar Energy’s power business
in India, also has its own board of directors along with an
executive committee and audit committee. Essar Oil UK
has its own board of directors along with an executive
committee. The Chief Executives of each of these
businesses are members of the Essar Energy Monthly
Review Committee, as detailed below.
20
Corporate governance continued
Committees
The Board has established the following committees:
•
•
•
•
Audit Committee
Nomination and Governance Committee
Remuneration Committee
Health, Safety and Environment Committee
Each Board Committee has its own terms of reference that
are approved by the Board. These terms of reference cover
membership, composition of the Board Committee, its
duties and the frequency of its meetings. All Committees
listed above are chaired by an Independent Non-Executive
Director. The Nomination and Governance Committee and
the Remuneration Committee review their own performance,
composition and terms of reference and recommend any
changes they consider necessary to the Board for approval.
The Health, Safety and Environment Committee assists the
Board and the Senior Management in obtaining assurance
that appropriate systems are in place to deal with the
management of safety, health and environmental risks.
The Health, Safety and Environment Committee meets at
least twice a year and in general the Health, Safety and
Environment Committee meetings are held in India, with
each meeting including a site visit, or on site at the Stanlow
refinery in the UK. During the reporting period the Committee
met three times. The focus of those meetings has been on
process safety management (also known as “PSM’’) and the
development of the Group’s health, safety and environment
culture within all operations and at all sites.
The Terms of Reference of each Committee can be
accessed at the following link:
Performance
Performance evaluation of the Board, the Board Committees
and individual Directors takes place on an annual basis and
is conducted within the terms of reference of the Nomination
and Governance Committee with the aim of improving
individual contributions, the effectiveness of the Board and
its Committees and the Company’s performance. It is
intended that evaluation of the Board will be externally
facilitated at least every three years, as required by the
Governance Code, starting during the financial year ending
31 March 2013 onwards.
The Board undertakes a formal self-evaluation of its
performance on an annual basis. The nature and scope of
this exercise is approved by the Board as a whole, taking
advice, where necessary, from third parties. The evaluation
is designed to determine whether the Board continues to be
capable of providing the high level judgement required and
whether, as a Board, the Directors are informed and up to
date with the business and its goals and understand the
context within which it operates.
The evaluation also includes a review of the administration of
the Board covering its operations, its agenda and the reports
and information produced for the Board’s consideration. In
addition, an annual evaluation of the performance of the
various Board Committees is also undertaken.
The details of the Directors’ remuneration including salary
and bonuses can be found in full in the Remuneration report
contained within the annual report.
Ownership structure:
The ownership structure of the Company is as below:
http://www.essarenergy.com/about-us/corporategovernance.aspx.
There is an additional committee, called the Monthly Review
Committee, formed to monitor and review the Company’s
strategy, organisation, and operations on a monthly basis.
Apart from members of the Board, the Committee
comprises senior executives of the Company’s operating
subsidiaries and businesses.
The following are the members of the Monthly Review
Committee:
Naresh Nayyar, Chief Executive Officer
Prashant Ruia, Chairman
P Sampath, Chief Financial Officer
KVB Reddy, Executive Director, Essar Power
Mark Lidiard, Director of Investor Relations and
Communications
Lalit K Gupta – Chief Executive Officer Essar Oil India
Volker Schultz – Chief Executive Officer Essar Oil UK
Iftikhar Nasir – Chief Executive Officer of the E&P business.
Essar Energy plc Sustainability Report 2012
Essar Global
76.72%1
Free-float
Post IPO
98.13%
Essar Power
21.98%
Essar Energy
PLC
87.10%
Essar Oil Limited,
India
100%
Essar Oil UK
10.04%
Public
Shareholders
1.On 18 January 2011, Essar Global acquired an economic interest in a further 16,973,961
shares pursuant to an equity swap transaction as part of the existing convertible bond
arrangements at Essar Energy level. As part of the equity swap transaction, Essar Global has
the option to settle the swap by acquiring these further 16,973,961 shares (and therefore the
voting rights attached to such shares). The transaction increased Essar Global’s economic
interest in the Company to 78.02%.
21
Risk Management
The Company is committed to strengthening its risk management capability in order to protect and enhance shareholder value.
Our risk management framework ensures consistency in methods used for assessing, monitoring and communicating risks
throughout the Company. The Group maintains a register of key controls and procedures which is reviewed and updated
annually. As part of its risk based internal audit plan, the Group Internal Audit function continually assesses the control
environment to provide assurance on the design and operating effectiveness of the controls. For detailed information about
the principal risks and uncertainties that face the Essar Group please refer to the Annual Report.
Corporate Governance policies
In continuing our focus on good corporate governance, Essar has adopted the following policies:
Whistleblowers Policy
A Whistleblowing hotline provides arrangements by which staff may, in confidence, raise concerns about possible improprieties
in matters of financial reporting or other matters. Staff may raise concerns in either English or the local language using a hotline
phone number or by sending an email or letter to addresses especially created for the purpose. Regular updates on the
Whistleblowing hotline are provided to the Audit Committee by respective Management Audit Committees. The policy not only
covers all employees but also our business partners including contract workmen and third parties who are involved directly or
indirectly in doing business with the Company either as vendors or suppliers. The Company’s Whistleblowing policy is available
on the Company’s website, http://www.essarenergy.com/about-us/contact-us/whistleblower-policy.aspx.
Anti-Corruption Policy and Anti Corruption Code
Since the UK Bribery Act 2010 came into force, the Company has carried out comprehensive risk assessment and developed
and strengthened our policies and systems/procedures relating to anti-corruption and bribery in line with the Act. Our
Anti-Corruption Policy is fundamental to this.
The Group has implemented extensive measures to ensure that the Group, all its subsidiaries, branches, divisions and
controlled affiliated companies and all of its employees comply with the Company’s anti-corruption policies and procedures.
All employees of the Company, including senior management, are subject to ongoing communications and training to build
awareness of its anti-corruption and bribery policies and procedures. The policies and procedures contain requirements
in relation to i) the conduct of employees; ii) arrangements pertaining to political contributions, charitable donations, gifts,
hospitality, entertainment and sponsored travel and retaining third parties; and iii) prohibition of facilitation payments. Essar
Energy’s processes for identifying and dealing with infringements of its Anti-Corruption Policy are working well. For example,
during the period, there was an incident involving one employee that was identified, and prompt and appropriate action was
taken by the business.
Code of Conduct for Prevention of Insider Trading
Essar Energy and Essar Oil both have procedures in place for the prevention of insider trading which have been adopted by
their respective Boards. These procedures are in compliance with the applicable laws of the UK and India respectively.
Essar Energy plc Sustainability Report 2012
22
Economic value
Economic value distributed
The following table shows our economic performance in the 15 month reporting period.
Essar Energy Plc Consolidated January 2011–March 2012
Direct economic value generated and distributed
Direct economic value generated
Revenues
Economic value distributed
Operating costs
Employee wages and benefits
Payments to providers of capital
Payments to Government
Economic value retained
US$ millions
21,828.6
(21,344.8)
(159.2)
(843.4)
(38.1)
(22,385.5)
(556.9)
No financial assistance from the Indian Government was received during the 15 month reporting period to March 2012
and the Indian Government does not have an equity stake in the Company.
Indirect economic impact
Our financial statements provide details of the economic performance of our Company. However, our economic footprint
expands considerably when we consider the indirect economic impact of our activities on all our stakeholders. Many of our
sites are in rural India and our local hiring and procurement activities in the site vicinity positively impact the local economy. At
Stanlow, we have recruited people from areas in close proximity to the refinery to fill newly created roles or vacancies arising
as a result of retirements.
Similarly, the infrastructure that we create to run our operations at our sites also positively impacts the local communities.
Essential physical infrastructure created at sites such as guest houses and townships employ local people.
The direct economic activities of our operations filter deeper into the economy as employees at various sites also procure
products and services from the respective local economies.
At Stanlow, Essar acquired a stake in the Enterprise Board as a part of the refinery acquisition. The Enterprise Board’s key
objective is to promote small scale businesses in the local community. Essar also runs a successful apprenticeship scheme at
Stanlow that provides valuable work experience and internships to school children and undergraduate college students from
within the region and the wider UK. The experience that first time employees and interns gain at Essar enhances their
employability in the next stage of their careers.
We also provide training to our skilled and semi-skilled contract workers which enables them to command a higher
remuneration for their services even after they have left the Company. At Stanlow, Essar reaches out to nationally recognised
sector skills councils for obtaining frameworks and accreditations for the in-house programmes that we run at site to ensure
the continued competence of the workforce.
Furthermore, we work closely with industry associations and government agencies at the national and international level on
various issues, including sector friendly policy formulation.
Essar Energy plc Sustainability Report 2012
23
Our people
The Central Human Resources (CHR) operation of the wider
Essar Group has functional responsibility for HR issues
across Essar Energy. The CHR provides direction in various
HR aspects and introduces innovative tools and models
across the Company for continual improvement and
enhancing value creation.
Our Company policies pertaining to labour aspects highlight
our commitment as an employee friendly business. These
policies encompass, among other aspects, recruitment and
selection of personnel at all levels of the Company, employee
induction, performance management, learning and
development, separation and business practices. Employees
can provide recommendations to the Company through the
head of HR within each business group.
The Essar Group President for Human Resources is also a
member of the Essar Group’s highest governing body, the
General Management Committee, and has the operational
responsibility for labour aspects. The Group President is
assisted by a strong team of professionals leading various
HR portfolios such as talent acquisition and management,
learning and development, and employee engagement.
As a Company, we have been firmly focused on developing
and refining our people management processes and in
building our talent acquisition capability. In the past, we
have introduced a number of initiatives in training and
development to create a learning environment.
The oil and gas sector today is increasingly recognising the
importance of having a strong talent pool as one of the key
driving forces for growth.
This sector employs a high number of engineers and
technical professionals and generally speaking is a highly
diverse and global work force. As an industry, we have
witnessed a remarkable growth in our activities, which
has not been matched by a corresponding growth in
the workforce.
Within India, liberalisation in the oil and gas sector with the
entry of global majors into exploration and production and the
introduction of the National Exploration and Licensing Policy
has increased demand for domestic talent. According to a
recent study by Ernst & Young, India’s oil and gas sector will
require 25,000 additional professionals in the next five years,
representing approximately 48% of the current number of
professionals working in the sector. The driving factors for
this demand are the rise in exploration and production activity
within India and by Indian companies abroad, and capacity
augmentation in refining and marketing. Similarly, India’s power
sector has witnessed an unprecedented growth in the past
decade as the private sector gears up to meet India’s
power demand.
Employers in India are expecting a strong employment market
in the next few quarters as hiring intentions strengthen and
the economy improves. According to the latest Manpower
employment survey of 5,244 employers across India, the Net
Employment Outlook of over 50% among Indian employers
is the highest in the 41 countries surveyed.
Essar Energy plc Sustainability Report 2012
In the reporting period, talent retention was one of our major
areas of focus in a market where there are high projections
for growth and where talent is in short supply.
Initiatives include the relaunch of Next Moves, which is
an internal process for talent identification for use before
commencing external searches, as well as HiPer–HiPo,
which are differentiated development and retention offerings.
Job rotation is also used as a learning driver with a focus on
cross functional rotations in order to help develop technical
competencies.
Building a learning organisation
Our learning philosophy
As a successful Company, Essar Energy acknowledges
the need to constantly adapt and respond to a changing
environment to learn and grow. We value learning at all levels
within the Company and truly believe that learning is a
continuous process.
Learning@Essar does not merely equip individuals with the
skills required in their present roles – we believe in investing
for the future development of all our employees. To make this
philosophy work, employees are expected to take ownership
of their learning and development needs. The business and
corporate HR teams are committed to support employees in
the pursuit of their development and partner with them in all
their learning endeavours.
The Learning and Development Framework at Essar is a
function of three skill sets that influence employees’ personal
and professional development.
General
management skills
strategically linked
to business
Functional and
technical skills
linked to
corporate roles
EMPLOYEE
Individual skills highlighted
in performance reviews
To ensure an effective and efficient running of learning
initiatives at Essar and to institutionalise a consistent learning
process across the Company we have clearly defined our
standards of operation. These standards flow from our
organisational learning philosophy and the learning
objectives of the Company.
24
Our people continued
Talent acquisition
The tables below give examples of the open vacancies filled
at some of our sites through our Internal Recruitment model
called Next Moves. The remaining vacancies were filled
through external agencies.
Essar Energy (Financial Year 2011–12)
No. of
positions
No. of
selections
Durgapur
23
2
Mumbai
20
4
Vadinar
47
7
Location
All new hires are required to sign a confidentiality agreement
and to take part in a comprehensive training module. The
module includes policies, guidelines and procedures of
the Company including, but no limited to, anti-corruption,
human rights and intellectual property rights. All the
Company policies, guidelines and procedures are also
communicated to the employees on the Essar intranet.
Employee engagement
The Employee engagement initiative at Essar Energy details
our efforts to enhance engagement using all six engagement
drivers: ‘Quality of Life’, ‘Work’, ‘Opportunities’, ‘Total Rewards’,
‘People’ and ‘Company Practices’ to create a highly engaged
workforce that is committed to value creation. An independent
survey across the Essar Group by Hewitt Associates was
conducted in 2008 to study the prevailing levels of employee
engagement and identify key focus areas for improvement.
Subsequently, the Essar Group partnered with Aon Hewitt in
an initiative to gauge employee feedback between November
2010 and January 2011. The study was designed to capture
employee opinions and reactions from a sample set of
the workforce.
The measurement of engagement was derived from the
following areas: recognition, pay, career opportunities, work
activities, performance management, policies, benefits,
work life balance, training and development, resources
and physical work environment. The corporate Employee
Engagement processes are being extended to new business
acquisitions, both in India and internationally.
Essar Oil and Essar Power also participated in the Best
Employers India study conducted by Aon Hewitt in 2012. In
total, 1,640 employees of Essar Oil were invited to participate
in the survey, and 1,567 employees responded to the survey,
with a healthy response rate of 96%.
Employee engagement was measured at both
Essar Oil and the Essar Power Business Group. The
following graph gives the distribution of engagement
of employees:
Distribution of engagement of employees
100%
90%
80%
70%
BE India 2007:
82%
BE India 2009:
88%
BE India 2011:
77%
60%
50%
40%
30%
20%
10%
0%
Key objectives of the survey included:
• To assess employees’ attitudes and beliefs about
their work activities, opportunities, quality of work life,
Company procedures and policies, rewards, and people
in the organisation;
• To assess employee understanding and support of the
business goals and strategies of the Essar Group and
identify key drivers of employee engagement;
• To identify the extent to which employees are observing
and managers are supporting the desired behaviours
throughout the Company;
• To reinforce the idea of shared responsibility for improving
business results; and
• To learn whether different groups of employees have
different needs or issues.
57%
60%
81%
2008 (N=926)
2010 (N=346)
2012 (N=1567)
Essar Oil
Aon Hewitt Best Employers Study India
Source: Aon Hewitt Engagement Database
Engagement score: Essar Oil
Essar Oil 2008: 57% (N=926)
Essar Oil 2010: 60% (N=346)
45%
Serious Range
65%
30%
Indifferent Range
High Performance/Aon Hewitt
Best Employer Range
0%
Destructive Range
Source: Aon Hewitt Engagement Database
Essar Energy plc Sustainability Report 2012
Aon Hewitt Best Employers
India StudyTM 2011: 77%
Essar Oil 2012: 81% (N=1567)
100%
25
Over the span of the three engagement surveys, Essar Oil
improved its Employee Engagement score from 57% in 2008
to 81% in 2012, surpassing the industry average of 77% and
placing it as one of India’s best employers.
Serious Range
30%
65% Essar Power 2008 (67%)
Essar Power 2010 (73%)
High Performance/Aon Hewitt
Best Employer Range
Indifferent Range
BE India (88%)
0%
Destructive Range
100%
Source: Aon Hewitt Engagement Database
Key Engagement Opportunity Drivers
Career
Opportunities
Recognition
Training &
Development
Benefits
Key Engagement Threat Drivers
Work
Activities
Career
Opportunities
Policies
Co-workers
Distribution of engagement
Spread of Disengaged
22%
Engaged
73%
67%
17%
10% 10%
1%
1%
Disengaged
Not Engaged
Nearly Engaged
2008
2010
Source: Aon Hewitt Engagement Database
Essar Energy plc Sustainability Report 2012
Essar
Power
2010
Essar
Power
2008
Howitt
BE India
2009
83%
75%
91%
79%
75%
91%
56%
46%
79%
65%
53%
82%
70%
75%
86%
68%
68%
88%
Say
Engagement Score: Essar Power
40%
Engagement Behaviours
Engaged
I would, without hesitation,
recommend this organisation to a
friend seeking employment.
Given the opportunity, I tell others
great things about working here
Stay I rarely think about leaving this
organisation to work somewhere
else
It would take a lot to get me to
leave this company
Strive This organisation motivates me to
contribute more than is normally
required to complete my work
This company inspires me to do
my best work every day
Please note: Figures represent percent ‘Agree’ and ‘Strongly Agree’
Essar Power improved its employee engagement score from
67% in 2008 to 73% in 2010.
Performance management
Our Performance Management System (PMS) is a
comprehensive, continuous and ongoing process in line
with our commitment to provide an environment that is
encouraging and supportive, and appreciative of talent and
enterprise and one in which our employees can do great
work and grow professionally and personally.
All full-time employees with more than six months of service
with the Company are eligible for an annual performance
and career development review. Our Company believes
in equal pay for equal work. The ratio of basic salary for
men:women is 1:1. An annual performance linked bonus is
based both on the performance of the Company as well as
the individual in the given financial year.
The PMS has been renamed e-compass and is aimed at
enabling employees to find their true vocation in their career
development and align their performance with business
priorities. The improved system allows for greater
transparency in terms of visibility of goals.
26
Our people continued
Balanced Scorecard
The Balanced Scorecard is a strategy deployment tool that
enables a holistic view of performance. It aims to align this
performance throughout the Company to help achieve its
strategic goals. During the reporting period, we engaged
KPMG to help articulate our strategic plan and implement
the Balanced Scorecard.
It is one of the most widely adapted performance
management frameworks. At Essar Energy, the Balanced
Scorecard aims to be the principal tool through which high
level business changes are implemented across the
Company at the level of individual employees, by setting
clear objectives. It works by targeting four organisational
perspectives – Financial, Customer, Internal Processes,
and Learning and Growth. There are direct relationships
between each of these perspectives that the Scorecard
aims to build and strengthen.
Initiatives
Measures
Targets
Initiatives
Targets
Measures
Objectives
Initiatives
Targets
Learning
and Growth
Measures
“To achieve our
vision, how will
we sustain our
ability to
change and
improve?”
Objectives
Initiatives
Targets
Measures
Vision
and
Strategy
Personal Accident Insurance policy
Health Insurance policy
Domestic Transfer policy
Relocation Allowance
Retirement policy
–– Provident fund/Employees’ pension scheme
–– Superannuation scheme
–– Gratuity
Key Initiatives on rewards and recognition:
With the intent to create a performance driven culture and
deliver sustained performance from managers, the Company
introduced a Short Term Incentive plan which will be payable
after every three years of service for consistent performers.
“To satisfy our Internal Business
Process
shareholders
and customers,
what business
processes
must we excel
at?”
Customer
Objectives
“To achieve our
vision, how
should we
appear to our
customers?”
•
•
•
•
•
12 weeks of maternity leave is provided to employees on a
full pay basis.
Financial
Objectives
“To succeed
financially, how
should we
appear to our
shareholders?”
Employee benefits
We provide our employees with benefits as required by the
laws of the countries in which we operate and as part of our
HR policies and processes. These benefits are set out in the
following policies. Employees are made aware of these
benefits at the time of joining and via the Company intranet.
An Employee Stock Option Scheme has also been introduced
for certain members of senior management with an aim to
create a stronger link between executive performance and
reward and increasing the shareholder value by enabling
participants to have greater involvement with, and share in,
the future growth and profitability of the Company.
Employees of Essar Oil UK, incorporating the Stanlow refinery,
are able to take advantage of UK share savings schemes
established by the UK Government, allowing them to purchase
shares in Essar Energy through monthly savings plans.
Employee assistance initiatives
We have developed initiatives to assist employees in various
areas of their lives, including developing a healthy work-life
balance. These initiatives are offered within the “Employee
CONNECT” framework which also offers an Employee
Assistance Programme, a professional counselling service
programme designed to help each employee and their
immediate family members to deal with the varied challenges
that life poses.
For detailed information on our initiatives to create a work life
balance please visit the Essar Group website at www.essar.com.
Essar Energy plc Sustainability Report 2012
27
Human rights
Our Company respects the human rights of employees.
We abide by the human rights laws applicable to the
countries in which we operate and also address these issues
in our investments and contracts.
We are in the process of strengthening the employee and
contractor training on human rights. We are also revising our
internal audit system to include human rights indicators.
Our commitment to respect human rights is supported by
our following corporate policies:
1. Essar Group Sustainability Policy
Please refer to page 13.
2. Essar Group Health, Safety and Environment Policy
Please refer to page 37.
3. Hotline – The Whistleblower Policy
Please refer to page 20.
4. Policy against Sexual Harassment
The policy against sexual harassment serves as a
mechanism for prevention or elimination of sexual
harassment in the workplace.
5. Business Practice Policy
The policy lays down guidelines for all employees to bring
about a uniform and disciplined approach to representing
the Company externally.
6. Open Door Policy
Our “Open Door” policy encourages all employees to
discuss their problems with their managers. The policy
guarantees that employee concerns are heard, considered
and answered without fear of reprisal.
All the above policies are communicated to the employees at
the time of joining the Company. These policies are also
available on the Essar Group intranet.
The policies are reviewed periodically for their continued
applicability to the business. The implementation of the
policies at different levels of the Company is evaluated during
internal audits at regular intervals.
Child labour
Essar Energy does not engage in or support the use of
child labour.
Forced or compulsory labour
Essar Energy does not engage in or support the use of
forced or compulsory labour.
Discrimination
Essar Energy does not engage in or support discrimination
in hiring, remuneration, access to training, promotion,
termination, or retirement based on race, national or social
origin, caste, birth, religion, gender, or any other grounds
that could give rise to discrimination.
Essar Energy plc Sustainability Report 2012
Disciplinary practices
Essar Energy treats all personnel with dignity and respect,
including any circumstances where disciplinary action might
be required.
Working hours
Essar Energy complies with applicable laws and industry
standards with regard to working hours and public holidays.
The normal working week, not including overtime, is defined
by the laws applicable in the countries where we operate.
Equal opportunity
Essar Energy is an equal opportunity employer and believes
in equal remuneration for equal work.
Employment opportunities are open to applicants from
diverse backgrounds and all levels of ability throughout the
Company. Disabled people are encouraged to apply and will
be provided with the appropriate training according to their
level of aptitude and ability. In the event that an employee
becomes disabled during the course of their employment,
the Company seeks to redeploy or retrain the employee
wherever possible.
A diversity and inclusion policy is in place for Essar Oil UK
employees based at the Stanlow refinery. The policy also
refers to the key UK employment legislation that provides
the legal framework for equal opportunities. This policy and
adherence to the Equal Pay Act 1970 (as amended), ensures
that employees are paid at equal levels across the different
grades within the Company, irrespective of gender.
Employee communications
The Company is committed to providing employees with
information about the Company on a regular basis and
employee communication and consultation is widely
encouraged throughout the Group. For example, within
Essar Oil UK, employees are invited to hear directly from
Senior Leaders during quarterly townhall sessions and via the
Essar Oil UK Intranet. Matters requiring specific consultation
are managed via established employee bodies and
consultation forums.
Essar Oil UK operates performance management systems
to align business and individual goals and has introduced
share schemes whereby employees can purchase shares
and have a vested interest in the success and performance
of the Company.
28
Our people continued
Measurements
Total workforce by type
FY 2011–2012
FY 2010–2011
Essar Oil1
Stanlow2
Power Business2
E&P Business2
Employees
927
n/a
1,086
195
2,208
Fixed Term
Contract
18
n/a
20
14
52
Third Party
Contract
1,651
n/a
296 944
2,891
Employees
Fixed Term
Contract
939
1,002
1,301
254
3,496
12
24
35
15
86
Third Party
Contract
2,200
500
372 742
3,814
1 Essar Oil analysis includes employees only
2 Employee analysis for Stanlow, Power and E&P includes both permanent and fixed term contract employees
Fixed Term Contract Employees are directly hired through the Company on a fixed term contract basis for a period ranging
between one and three years for certain projects. The contract can be renewed further in line with business needs upon
mutual consent by both the parties. The contract can be terminated by either of the parties with a one month notice period
from either side. Third Party Contract employees include contractors and sub-contractors hired for specific jobs at sites such
as Vadinar or Raniganj.
Employees by category
Senior
Middle
Junior
32
n/a
50
21
103
32
29
52
25
138
166
n/a
155
50
371
195
258
177
59
689
729
n/a
901
138
1,768
712
739
1,107
185
2,743
FY 2010 – 2011
Essar Oil
Stanlow
Power Business
E&P Business
Total
FY 2011 – 2012
Essar Oil
Stanlow
Power Business
E&P Business
Total
Employee by gender
Essar Oil
Stanlow
Power Business
E&P Business
Total
Essar Energy plc Sustainability Report 2012
FY 2010–2011
FY 2011–2012
Male
Female
Male
Female
886
n/a
1,062
188
2,136
41
n/a
44
21
106
898
933
1,283
239
3,353
41
93
53
30
217
29
Employees by age group
Essar Oil
Stanlow
Power Business
E&P Business
Total
FY 2011–12
FY 2010–11
Below 30
30-50
Above 50
Below 30
30-50
Above 50
491
n/a
657
62
1,210
411
n/a
408
110
929
25
n/a
41
37
103
468
184
830
130
1,612
447
506
455
110
1,518
24
336
51
29
440
Return to work after parental leave
Female
Employees Taking Parental Leave
Essar Oil
Stanlow
Power Business
E&P Business
Total 1
1
2
1
5
Employees Returning to Work After Leave
Essar Oil
Stanlow
Power Business
E&P Business
Total Retention Rate 1
0
2
1
4
80%
Percentage of total employees covered by collective bargaining agreements
2010–11
Stanlow1
n/a
2011–12
55%
1 For August 2011 – March 2012
Total attrition
Essar Oil
Stanlow
Power Business
E&P Business
Essar Energy plc Sustainability Report 2012
FY 2011–2012
FY 2010–2011
Attrition
%
Attrition
%
121
n/a
116
41
13.05%
n/a
10.49%
19.62%
92
33
106
36
9.80%
3.22%
7.93%
13.38%
30
Our people continued
Attrition by category
FY 2010–2011
Essar Oil
Stanlow
Power Business
E&P Business
Senior
%
Middle
%
Junior
%
6
n/a
3
2
18.75%
n/a
6.00%
9.52%
21
n/a
17
8
12.65%
n/a
10.97%
16.00%
94
n/a
96
31
12.89%
n/a
10.65%
22.46%
Senior
%
Middle
%
Junior
%
4
4
5
4
12.50%
13.79%
9.62%
16.00%
13
11
12
14
6.67%
4.26%
6.78%
23.73%
75
18
89
18
10.53%
2.44%
8.04%
9.73%
FY 2011–2012
Essar Oil
Stanlow
Power Business
E&P Business
Attrition by gender
FY 2010–2011
Male
%
Female
%
Essar Oil
Stanlow
Power Business
E&P Business
113
n/a
113
38
12.75%
n/a
10.64%
20.21%
8
n/a
3
3
19.51%
n/a
6.82%
14.29%
FY 2011–2012
Male
%
Female
%
Essar Oil
Stanlow
Power Business
E&P Business
89
27
101
30
9.91%
2.89%
7.87%
12.55%
3
6
5
6
7.32%
6.45%
9.43%
20.00%
Attrition by age group
Essar Oil
Stanlow
Power Business
E&P Business
FY 2010–2011
Below 30
%
30–50
%
Above 50
%
67
n/a
54
22
13.65%
n/a
8.22%
35.48%
50
n/a
56
16
12.17%
n/a
13.73%
14.55%
4
n/a
6
3
16.00%
n/a
14.63%
8.11%
Below 30
%
30–50
%
Above 50
%
54
1
67
11
11.54%
0.54%
8.07%
8.46%
35
14
37
18
7.83%
2.77%
8.13%
16.36%
3
18
2
7
12.50%
5.36%
3.92%
24.14%
FY 2011–2012
Essar Oil
Stanlow
Power Business
E&P Business
Essar Energy plc Sustainability Report 2012
31
Total hires
FY 2011–2012
FY 2010–2011
Hires
%
Hires
%
Essar Oil
Stanlow
Power Business
E&P Business
478
n/a
524
55
51.56%
n/a
47.38%
26.32%
111
84
321
93
11.82%
8.19%
24.03%
34.57%
Hires by category
Essar Oil
Stanlow
Power Business
E&P Business
FY 2010–2011
Senior
%
Middle
%
Junior
%
8
n/a
12
4
25.00%
n/a
24.00%
19.05%
93
n/a
49
11
56.02%
n/a
31.61%
22.00%
377
n/a
463
40
51.71%
n/a
51.39%
28.99%
FY 2011–2012
Essar Oil
Stanlow
Power Business
E&P Business
Senior
%
Middle
%
Junior
%
1
6
6
5
3.13%
20.69%
11.54%
20.00%
15
34
32
14
7.69%
13.18%
18.08%
23.73%
95
44
283
74
13.34%
5.95%
25.56%
40.00%
Hires by gender
Essar Oil
Stanlow
Power Business
E&P Business
FY 2010–2011
Male
%
Female
%
462
n/a
499
47
52.14%
n/a
46.99%
25.00%
16
n/a
25
8
39.02%
n/a
56.82%
38.10%
FY 2011–2012
Essar Oil
Stanlow
Power Business
E&P Business
Essar Energy plc Sustainability Report 2012
Male
%
Female
%
107
63
310
81
11.92%
6.75%
24.16%
33.89%
4
21
11
12
9.76%
22.58%
20.75%
40.00%
32
Our people continued
Hires by age group
FY 2010–2011
Below 30
%
30–50
%
Above 50
%
259
n/a
388
33
52.75%
n/a
59.06%
53.23%
215
n/a
122
16
52.31%
n/a
29.90%
14.55%
4
n/a
14
6
16.00%
n/a
34.15%
16.22%
Below 30
%
30–50
%
Above 50
%
76
30
224
70
16.24%
16.30%
26.99%
53.85%
35
51
86
16
7.83%
10.08%
18.90%
14.55%
0
3
11
7
0.00%
0.89%
21.57%
24.14%
Essar Oil
Stanlow
Power Business
E&P Business
FY 2011–2012
Essar Oil
Stanlow
Power Business
E&P Business
Average man days of training per employee
Apr 11–Mar 12
Essar Oil
Stanlow
Power Business Group1
E&P Business Group
Male
Female
Total
3.4
2.53
1.77
0.56
3.8
1.37
1.40
1.21
3.4
2.43
8.55
1.14
1 Training data for Male and Female for external training only
Essar Oil
Essar Oil – employee by gender, age group and category
Senior Management
Middle Management
Junior Management
Total
2011–2012
2010–2011
Below 30
30–50
Below 30
Above 50
30–50
Above 50
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
0
0
453
453
0
1
37
38
13
161
234
408
0
0
3
3
19
4
2
25
0
0
0
0
0
2
432
434
0
0
34
34
12
187
241
440
0
3
4
7
20
3
1
24
0
0
0
0
Attrition in Essar Oil by category, age group and gender
Senior Management
Middle Management
Junior Management
Total
2011–2012
2010–2011
Below 30
30–50
Below 30
Above 50
30–50
Above 50
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
0
0
61
61
0
0
6
6
2
21
25
48
0
0
2
2
4
0
0
4
0
0
0
0
0
0
51
51
0
0
3
3
2
13
20
35
0
0
0
0
2
0
1
3
0
0
0
0
Essar Energy plc Sustainability Report 2012
33
Essar Oil – hires by category, age group and gender
2011–2012
2010–2011
Below 30
30–50
Below 30
Above 50
30–50
Above 50
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Senior Management
Middle Management
Junior Management
Total
0
0
245
245
0
0
14
14
6
91
116
213
0
0
2
2
2
2
0
4
0
0
0
0
0
0
72
72
0
0
4
4
1
15
19
35
0
0
0
0
0
0
0
0
0
0
0
0
Stanlow
Stanlow – workforce by gender, age group and category
Aug 11–Mar 12
Below 30
30–50
Above 50
Male
Female
Male
Female
Male
Female
Senior Management
Middle Management
Junior Management
Total
0
19
139
158
0
9
17
26
15
122
313
450
2
27
27
56
12
81
232
325
0
0
11
11
Stanlow – attrition by category, age group and gender
Aug 11 – Mar 12
Below 30 30–50 Above 50 Male
Female
Male
Female
Male
Female
0
1
0
1
0
0
0
0
2
3
3
8
1
4
1
6
1
3
14
18
0
0
0
0
Senior Management
Middle Management
Junior Management
Total
Stanlow – Hires by category, age group and gender
Aug 11 – Mar 12
Below 30
Senior Management
Middle Management
Junior Management
Total
30–50 Above 50
Male
Female
Male
Female
Male
Female
0
3
18
21
0
2
7
9
4
23
12
39
0
5
7
12
2
1
0
3
0
0
0
0
Power Business
Power Business Group – workforce by gender, age group and category
2011–2012
2010–2011
Below 30
Senior Management
Middle Management
Junior Management
Total
30–50
Below 30
Above 50
30–50
Above 50
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
0
2
620
622
0
0
35
35
28
140
231
399
0
4
5
9
22
9
10
41
0
0
0
0
0
2
786
788
0
0
42
42
28
161
256
445
0
4
6
10
24
10
16
50
0
0
1
1
Essar Energy plc Sustainability Report 2012
34
Our people continued
Power Business Group – attrition category, age group and gender
Senior Management
Middle Management
Junior Management
Total
2011–2012
2010–2011
Below 30
30–50
Below 30
Above 50
30–50
Above 50
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
0
0
52
52
0
0
2
2
0
16
39
55
0
0
1
1
3
1
2
6
0
0
0
0
0
0
63
63
0
0
4
4
4
12
20
36
0
0
1
1
1
0
1
2
0
0
0
0
Power Business Group – hires by category, age group and gender
Senior Management
Middle Management
Junior Management
Total
2011–2012
2010–2011
Below 30
30–50
Below 30
Above 50
30–50
Above 50
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
0
0
366
366
0
0
22
22
6
46
67
119
0
0
3
3
6
3
5
14
0
0
0
0
0
0
215
215
0
0
9
9
4
31
50
85
0
0
1
1
2
1
7
10
0
0
1
1
Total workforce by location
Baroda
Bekundpur
Bharuch
Bhuj
Chandwa
Chennai
Delhi
Dhenkanal
Hazira
Korba
Mahan
Mumbai
Paradeep
Ranchi
Salaya
Vadinar
Vizag
Waidhan
Total
Essar Energy plc Sustainability Report 2012
FY 2010–2011
FY 2011–2012
2
1
2
10
47
8
7
9
150
11
219
175
27
8
221
184
23
2
1,106
1
1
2
10
93
11
9
11
180
14
253
181
39
21
292
189
28
1
1,336
35
E&P Business
E&P Business – workforce by gender, age group and category
Senior Management
Middle Management
Junior Management
Total
2011–2012
2010–2011
Below 30
30–50
Below 30
Above 50
30–50
Above 50
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
0
0
54
54
0
0
8
8
1
36
61
98
0
3
9
12
20
11
5
36
0
0
1
1
0
0
109
109
0
0
21
21
11
46
45
102
0
3
5
8
14
10
4
28
0
0
1
1
E&P Business – attrition by category, age group and gender
Senior Management
Middle Management
Junior Management
Total
201102012
201002011
Below 30
30050
Below 30
Above 50
30050
Above 50
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
0
0
19
19
0
0
3
3
0
7
9
16
0
0
0
0
2
1
0
3
0
0
0
0
0
1
7
8
0
0
3
3
0
8
7
15
0
2
1
3
4
3
0
7
0
0
0
0
E&P Business – hires by category, age group and gender
Senior Management
Middle Management
Junior Management
Total
2011–2012
2010–2011
Below 30
30–50
Below 30
Above 50
30–50
Above 50
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
0
0
25
25
0
0
8
8
1
8
7
16
0
0
0
0
3
3
0
6
0
0
0
0
0
0
58
58
0
0
12
12
2
10
4
16
0
0
0
0
3
4
0
7
0
0
0
0
Total workforce by location
Mehsana
Ahmedabad
Durgapur
Mumbai
TOTAL
Essar Energy plc Sustainability Report 2012
FY 2010–2011
FY 2011–2012
5
12
95
97
209
5
3
151
110
269
36
Health, safety and environment
At Essar Energy, Health, Safety and Environment (HSE) continue to be among our critical sustainability priorities. HSE is an
integral part of the management of business and is viewed with equal importance alongside profitability, costs, production
and quality.
We are making continuous efforts to bring about an overall improvement in safety performance. We strive to have an
injury‑free and healthy workplace and to institutionalise a culture of safety in the Company. In complying with the statutory,
industry and Company’s requirements, we ensure health and safety of the people delivering or using our services.
As a Company we are conscious of the fact that industry can play a great role in reducing any environmental impact caused
by its activities. We are committed to the following:
• To minimise pollution and continually improve performance to reduce our environmental footprint
• To optimise resource consumption by planning and carrying out operations using proven resource conservation methods
• To identify opportunities such as clean technologies, energy efficiency and water efficiency with a view to long term
sustainability
• To increase awareness of environmental issues – both global and business-specific
Our commitment to HSE is driven by senior management at Essar Energy and is demonstrated through directors’ involvement
in reviewing HSE performance and adherence to international standards. Dedicated teams are in place at sites and at
corporate level in order to manage HSE issues.
Our commitment to HSE issues is communicated through the following policies:
Policy
Level
Essar Group Health, Safety and Environment policy
Health, Safety, Environment and Quality Policy
Health, Safety and Environment Policy
Health, Safety and Environment Policy
Health, Safety and Environment Policy
Health, Safety and Environment Policy
Essar Group
Essar Oil and Vadinar Power, Vadinar
Essar Power Gujarat Limited, Salaya
Hazira Power
Bhander Power
Essar Oil UK
The ownership of commitment and responsibilities is clearly defined in the Essar Group HSE Management System and the
site Occupational Health and Safety manuals, where applicable.
Essar Energy plc Sustainability Report 2012
37
Health, Safety & Environment Policy
Essar Group is committed to achieve excellence in Health, Safety & Environment (HSE) by providing and maintaining safe
and healthy working conditions and following operating practices that will protect the environment. We will implement
HSE Management systems to ensure health and safety of employees and those who work for us, including contractors.
In fulfilment of this commitment and our goal to have an injury free and healthy workplace, and institutionalising a culture
of Safety in the organisation, we will make continuing efforts to:
• Demonstrate visible commitment towards Health, Safety & Environment across all levels of management starting from
the top.
• Increase HSE awareness and competence by training and education to facilitate safe working and enhance the health
of employees by delivering quality health care.
• Integrate HSE in all phases of operations as well as at all stages of projects.
• Continuously recognise hazards, assess Health, Safety & Environmental risks in our operations through audits,
risk assessments and review of Standard Operating Procedures and take steps to mitigate risks.
• Minimise pollution, reduce environmental footprint and optimise resource consumption by planning and carrying out
operations through environmentally responsible processes, techniques and practices.
• Promote safe behaviour amongst those who work for us (including compliance by employees and others that personal
protective equipment will be used by them, where required), report all accidents and incidents and stop work that is unsafe
and a threat to the Safety of people.
• Foster continual improvement, benchmark our HSE performance and adopt best practices in HSE.
• Comply with all relevant statutory and other requirements pertaining to HSE.
• Investigate accidents and incidents and occupational illnesses to prevent recurrence and laterally share ‘Lessons Learnt’
across all businesses. Extend HSE good practices in all spheres of our operations including outside of plants viz. during
travel, in office, township, during sales and marketing related activities and off the job.
It is our endeavour to have HSE at the centre of every business planning and decision making process. It is reiterated that
Safety continues to be Line Management and Individual’s responsibility.
Shashi Ruia
Essar Group Chairman
Place: Mumbai
Date: September 24, 2007
Endorsement and Implementation at Stanlow Manufacturing Complex
The implementation of the Essar Group HSE Policy is the collective responsibility of every Essar and Business Partner employee
at Stanlow Manufacturing Complex. Our commitment to adhere to site rules, standards, processes and procedures will prevent
incidents and injuries. This requirement is supported by the arrangements documented in Stanlow’s HSE Management System
and the Trade HSE Standards ETS700. Arrangements for applying this policy to Major Accident Hazards are detailed in the
COMAH Safety Report. We measure our performance and set targets for improvement. We include HSE performance in the
appraisal of all staff and reward accordingly.
Volker Schultz
Chief Executive Manager
Place: Stanlow
Date: December 2011
Essar Energy plc Sustainability Report 2012
Jon Mason
General Officer
38
Health, safety and environment continued
HSE Management
Structure
The management of HSE is defined by the following
structure within the Company.
HSE Policies
HSE Management System
Sub-elements, expectations
and performance standards
Group procedures
and guidelines
Business/Site specific
procedures and guidelines
The following businesses of the Group are certified to
OHSAS 18001:2007 and ISO 14001:2008 requirements.
• Essar Oil Ltd, Vadinar (includes Vadinar Power)
• Essar Power Ltd, Hazira
• Bhander Power Ltd, Hazira
HSE policies are implemented through the HSE
Management system consisting of eight elements. These
eight elements have further sub-elements, expectations and
performance standards. The procedures and guidelines
provide direction and guidance for effective implementation
of HSE requirements. In addition, individual businesses
and sites within Essar Energy have HSE procedures and
guidelines for local implementation of HSE requirements.
HSE Management Committees
HSE Sub-committee
(Board Level)
Chaired by Independent Non-Exectuvie Director
Monthly Review Committee
(Energy Business Level)
Chaired by the Chairman of Essar Energy plc
HSE Executive Committee
(Essar Group Level)
Chaired by Director, Essar Group
Business Executive Committees
(Business Level)
Chaired by Business CEOs
Management Safety Committee
(Site Level)
Contractor Safety Committee
(Site Level)
Essar Energy plc Sustainability Report 2012
39
All of our sites have representatives of the workforce on the
management safety committees. Safety committee meetings
by business are held periodically in line with Company
procedures.
Skills Management
Training is one of the most important tools that not only
helps in preventing accidents and reducing cost but also
institutionalises a culture of safety within the Company.
Our Approach to Health and Safety
Essar Energy operates refineries and power plants and
carries out drilling operations for oil and gas production. All
of these operations involve handling a vast volume of natural
resources and raw materials, and managing employees and
contractors at sites that are spread across India, the UK
and other countries. Ensuring the safety of our personnel,
equipment and inventory is of paramount importance to us.
Going forward, we aim to continue our focus on training and
provide innovative tools for learning and development. The
diverse nature of our business requires different types of
training to be provided.
Process Safety
In an endeavour to strengthen systems and reduce the risk of
major accidents while also improving asset performance, the
following initiatives were taken at Essar Oil in the 15 month
reporting period:
• Quantitative Risk Assessment (QRA) study by a third party
• Safety Integrity Level (SIL) study by a third party for
refinery operational facilities
• Monthly reporting of process safety leading and lagging
indicators in line with the Centre for Chemical Process
Safety (CCPS) matrix and American Petroleum Institute
(API) 754 standards. Essar Oil also became a CCPS
member in 2011.
• Introduction of structured incident reporting and
investigation system to report and analyse different
types of failures and incidents with a special emphasis
on near misses.
• Established safety critical equipment and devices,
procedures along with inspection, testing and preventive
maintenance plan.
• Use of web based tools for management of process
safety information, incident investigation, mechanical
integrity, asset reliability and training.
• Dissemination of process safety-related information
through process hazard analysis, classroom training,
web portal and other training methods.
Contractor Safety Management
Contractor safety management is a challenge owing to the
nature of a workforce which is always changing. Contract
workers are deployed in large numbers and to maintain the
safety performance of the Company, training is vital. This is
of particular relevance to our business.
Competency assessment (CA) for safety critical jobs was
given considerable emphasis during the 15 month reporting
period. CA was made mandatory for certain trades in all the
business groups such as riggers, crane operators, welders,
HMV operators and electricians. The respective HSE
departments at different sites have developed site specific
models for ensuring that this objective is met.
Contractor safety management will continue to be our focus
in the coming year.
Essar Energy plc Sustainability Report 2012
The following training was given to employees across
all businesses:
Level 1: online training
Various training modules (both non-technical and technical)
were prepared as appropriate to the employee and completion
of basic HSE modules was made mandatory for all employees.
Level 2: classroom training
HSE training was arranged at all sites, covering over 30 HSE
topics. This training is given adequate weight during the
annual performance appraisal process of each individual to
make it more effective.
Level 3: rotational training in the HSE department
To provide more specific HSE training to line managers, a
special drive to increase rotational training has begun. Under
this scheme, certain employees are placed within the HSE
department for a minimum period of four weeks, with the
objective of including at least one person from each technical
department. The intention is that trained individuals can
subsequently become HSE representatives for their
department to improve standards on a continual basis.
Safety Culture
The Company aims to institutionalise a culture under
which there is a strong focus on developing an effective and
efficient system to improve safety performance. First and
foremost, the priority is to protect the individual and provide
him or her with a safe work environment. Essar’s goal is to
be among the leaders in safety.
To improve the safety culture across the Company, various
initiatives have been taken up and existing programmes
strengthened. The most important among these are:
• Regular and wider communication on safety across
the organisation.
• Observing safety week at various locations.
• Safety road shows at different locations.
• Strengthening line management involvement through a
safety champion programme. More than 100 champions
were nominated across the energy business to take the
message of safety forward.
• Launching of an Essar Group Safety Anthem in Hindi
and English and using it widely in various internal forums
and meetings.
• Safety signs and poster campaigns across all sites,
including offices and guest houses.
40
Health, safety and environment continued
• Enhanced safety induction for new employees, trainees,
lateral hires and employees undergoing inter business
transfers.
• Training programmes and campaigns on driving safety.
• Revamping of the HSE intranet for increased
communication and learning to all employees located
across different geographies.
Reporting
Health and Safety data is collated for all the energy business
groups operated by Essar.
Data is based on leading and lagging indicators and is
reported on a monthly basis. These reports, giving details
of business HSE performance, are circulated widely within
the Company. The key lag indicators in our reports are
defined as below:
First Aid Case
Work related injury that requires on time treatment and
subsequent observation, e.g. minor scratches, burns, cuts,
which do not ordinarily require medical care. The first aid
may not be administered by a physician or registered
professional
Medical Treatment Case
Work related injury or illness requiring more than first aid
treatment by a physician, dentist, surgeon or registered
medical personnel, e.g. nurse or paramedic under the
standing orders of physician or under the specific order
of a physician
Lost Time Injury
Injury which results in an individual being unable to carry
out any of his duties or to return to work on a scheduled
work shift on the day following the injury unless caused by
delays in getting medical treatment. An absence from work
for a period for 24 hours or more is considered a Lost
Time injury.
Additionally, information about incidents at sites is made
available to all the employees on the Essar intranet in the
form of safety alerts. All incidents are investigated to identify
the immediate, basic and root causes and the actual and
potential consequences. The level and depth of investigation
is in line with the severity or potential severity of the incident.
The implementation of corrective actions arising out of such
investigations is monitored both by the business as well as
the Company HSE.
Essar Energy plc Sustainability Report 2012
Emergency preparedness and response
We have Emergency Response Plans (ERPs) specific to each
site. The efficacy of the response plans is checked through
periodic mock drills that are conducted in line with a site
specific drill planner. Additionally, ERPs are audited by external
agencies for completeness and continued applicability.
Occupational health and industrial hygiene
Essar Energy has mandatory health checkups for employees
at a minimum of once a year to detect any occupational
health issues. Monitoring of workplace noise, illumination,
heat stress, dust, sulphur oxide, nitrogen oxide, hydrogen
sulphide, hydrogen chloride, gasoline, benzene and volatile
organic compounds is also carried out. Periodic training is
conducted on industrial hygiene hazards and controls. Risk
assessment is carried out at site level and appropriate
control measures have been put in place to prevent
occupational diseases.
Transportation Safety
A Driving Safety policy, introduced in 2007, aims at safe
driving, education and training of drivers where applicable
along with periodic monitoring of driving safety performance.
In the reporting period, as well as conducting defensive
driving programmes for a number of our employees in
offices, several initiatives were taken by businesses at
different locations to promote safe driving. The types of
defensive driving safety programmes at sites included
modules on plant safety, highway safety, fuel conservation
and safe driving. Over 1,000 people have been trained in the
last two years at Essar Oil, Vadinar.
41
Measurements
HSE Training
Employees
Contractors
Apr 10–
Mar 11
Apr 11–
Mar 12
Apr 10–
Mar 11
Apr 11–
Mar 12
Essar Oil
Stanlow1
Essar Power
Bhander Power
Vadinar Power
E&P Mehsana
E&P Raniganj
Consolidated
2,767
n/a
324
491
409
0
16
4,007
1,703
1,324
593
474
300
0
528
4,922
4,193
n/a
306
274
296
5
36
5,110
1,879
2,506
237
318
686
0
199
5,825
Apr 10–
Mar 11
Apr 11–
Mar 12
24,626
n/a
1,207
1,081
236
0
18
27,168
25,670
1633
1,000
867
304
0
104
29,578
1 Stanlow Data for Aug 11 – Mar 12
HSE Inductions – Contractors
Essar Oil
Stanlow1
Essar Power
Bhander Power
Vadinar Power
E&P Mehsana
E&P Raniganj
Consolidated
1 Stanlow Data for Aug 11 – Mar 12
HSE Meetings
Employees
Essar Oil
Stanlow1
Essar Power
Bhander Power
Vadinar Power2
E&P Mehsana
E&P Raniganj
Consolidated
Contractors
Apr 10–
Mar 11
Apr 11–
Mar 12
Apr 10–
Mar 11
Apr 11–
Mar 12
199
n/a
18
18
25
6
5
271
212
112
18
18
13
9
23
405
19
n/a
6
6
12
0
43
86
70
179
6
6
13
8
93
375
Apr 10–
Mar 11
Apr 11–
Mar 12
795
n/a
12
22
55
0
31
915
390
402
57
75
81
0
0
1,005
1 Stanlow Data for Aug 11 – Mar 12
2 Vadinar Power HSE Meetings include Joint Safety Committee meetings including both employees and contractors: 2010–11: 9 meetings, 2011–12: 8 meetings
Contractor Competency Assessment
Essar Oil
Stanlow1
Essar Power
Bhander Power
Vadinar Power
E&P Mehsana
E&P Raniganj
Total
1 Stanlow Data for Aug 11 – Mar 12
Essar Energy plc Sustainability Report 2012
42
Health, safety and environment continued
Contractor Tool Box Talks
Apr 10–
Mar 11
Apr 11–
Mar 12
65,925
n/a
1,184
966
249
2
169
68,495
86,414
7,681
1,247
1,220
232
57
415
97,266
Apr 10–
Mar 11
Apr 11–
Mar 12
377
n/a
228
217
61
10
88
981
1,834
3,152
910
783
40
9
148
6,876
Apr 10–
Mar 11
Apr 11–
Mar 12
Essar Oil
Stanlow1
Essar Power
Bhander Power
Vadinar Power
E&P Mehsana
E&P Raniganj
Total
517
n/a
39
44
475
0
5
1,080
731
1,365
69
61
528
0
14
2,768
Apr 10–
Mar 11
Apr 11–
Mar 12
21
n/a
3
2
2
0
4
32
29
45
1
0
3
0
7
85
Essar Oil
Stanlow1
Essar Power
Bhander Power
Vadinar Power
E&P Mehsana
E&P Raniganj
Total
1 Stanlow Data for Aug 11 – Mar 12
HSE Inspections
Essar Oil
Stanlow1
Essar Power
Bhander Power
Vadinar Power
E&P Mehsana
E&P Raniganj
Total
1 Stanlow Data for Aug 11 – Mar 12
Near Misses
1 Stanlow Data for Aug 11 – Mar 12
Lagging Indicators
First Aid Case
Essar Oil
Stanlow1
Essar Power
Bhander Power
Vadinar Power
E&P Mehsana
E&P Raniganj
Total
1 Stanlow Data for Aug 11 – Mar 12
Essar Energy plc Sustainability Report 2012
43
Medical Treatment Case
Essar Oil
Stanlow1
Essar Power
Bhander Power
Vadinar Power
E&P Mehsana
E&P Raniganj
Total
Apr 10–
Mar 11
Apr 11–
Mar 12
8
n/a
0
0
1
0
10
19
18
3
4
0
0
0
4
29
Apr 10–
Mar 11
Apr 11–
Mar 12
0
n/a
0
0
0
0
2
2
3
0
0
0
0
0
3
6
Apr 10–
Mar 11
Apr 11–
Mar 12
0.00
n/a
0.00
0.00
0.00
0.00
0.31
0.31
0.05
0.00
0.00
0.00
0.00
0.00
0.26
0.31
Apr 10–
Mar 11
Apr 11–
Mar 12
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
1 Stanlow Data for Aug 11 – Mar 12
Lost Time Injury
Essar Oil
Stanlow1
Essar Power
Bhander Power
Vadinar Power
E&P Mehsana
E&P Raniganj
Total
1 Stanlow Data for Aug 11 – Mar 12
LTIFR
Per 200,00 man-hours worked
Essar Oil
Stanlow1
Essar Power
Bhander Power
Vadinar Power
E&P Mehsana
E&P Raniganj
Total
1 Stanlow Data for Aug 11 – Mar 12
Fatalities
Essar Oil
Stanlow1
Essar Power
Bhander Power
Vadinar Power
E&P Mehsana
E&P Raniganj
Total
1 Stanlow Data for Aug 11 – Mar 12
Essar Energy plc Sustainability Report 2012
44
Health, safety and environment continued
Our Approach to Environment
Climate Change
As a respected global energy business, we recognise
our responsibility towards climate change mitigation and
adaptation. We view climate change as an opportunity that
will strengthen the Company and position us for future
growth and success.
The emerging climate change regulations can affect the
competitiveness of industrial sectors, impacting profit
potential and trade flows. Therefore it is imperative to have
a structured approach to carbon management to manage
the impact of climate regulations on our Company’s growth
and profitability.
Our approach towards climate change mitigation and
adaptation is aimed at providing clean solutions to our
customers and reducing our own carbon footprint by
adapting the latest technology and energy conservation
measures. In addition, managing regulations, stakeholders’
expectations and costs are key factors in our approach.
After a detailed structured greenhouse gas (GHG)
accounting process and disclosure at the Carbon Disclosure
Project (CDP) following international protocols, Essar Oil is
working towards a robust GHG management system to
deliver results on a year on year basis and to show its
positioning relative to industry standards. CDP ranked Essar
Oil the best in carbon management in India in the energy
sector during the year 2011. Essar Oil gradually intends to
build GHG reduction targets to operational levels, requiring
each operation to assess their GHG performance and to
look for best practices to monitor, inventorise, report and
own the GHG emissions stemming from their operations.
Essar Energy plc Sustainability Report 2012
Looking at climate change as a key element of sustainable
growth for our Company prepares us to respond to evolving
scenarios in relation to climate change (e.g. regulatory,
stakeholder, financial risks and opportunities).
Various strategies have been considered based on emission
information and analysis and both a short term and long term
strategy have been defined for Essar Oil. The most important
components of the short term strategy include:
• To set a base year GHG inventory. This may require a
change in base year due to the refinery expansion.
• Monitoring the energy performance of all operating
facilities.
• Taking up opportunities to improve energy efficiency in the
refinery processes.
The most important components of the long term
strategy include:
• Determining year-on-year GHG inventory.
• Continuous optimisation of existing processes and
products.
• Opportunities for benefits from the Clean Development
Mechanism of the Kyoto Protocol.
• Exploring opportunities for renewable energy sources.
45
At Essar Oil, the GHG mitigation approach includes optimisation and energy conservation schemes. Various activities were
carried out across the Vadinar refinery which reduced energy consumption and in turn the GHG emissions. Some of the
actions taken by Essar Oil are as below:
S.N.
Description
1
2
3
4
Use of natural gas in place of furnace oil in captive power plant.
Use of natural gas in place of furnace oil in refinery furnaces.
Installation of natural gas fired based power plant instead of coal fired power plant
Increasing extraction from existing steam turbine to reduce high pressure steam to high pressure steam, let down
by 72 tonnes per hour
Reducing the size of the impellers for sea water cooling pumps
Modification for handling high speed diesel of Euro III/Euro IV standard direct, rail-loading from product
intermediate tanks
Compressor to be stopped when demand for air is low (less than 100 NM3/hr)
Connection of low salt water line from desalination product pump discharge header to discharge header (low salt
water tank bypass line)
Interconnection between bitumen pump discharge header and bitumen return header from gantry
Stopping of all rich amine pumps
Reducing the size of the impeller for the sour water pump
Interconnection between fuel oil rail and road tanks pump suction headers, to allow more flexible usage
5
6
7
8
9
10
11
12
Approx. CO2
emissions,
Ton of CO2
57,589
6,882
3,338
350
690
800
8
530
93
103
Our Bhander power plants (phase I of 155 MW and phase II of 340 MW), have qualified as Clean Development Mechanism
(CDM) projects and have been ratified by the United Nations Framework Convention on Climate Change (UNFCCC). The CDM
projects registered with UNFCCC resulted in the issuance of 4,479,540 Certified Emission Reductions (CER) on a cumulative
basis. A total of 208,593 CERs were verified and issued by the UNFCCC and over 1,000,000 CERs are being monitored and
under verification. A carbon footprint study for all our running power plants has also been carried out.
Essar Power has also entered into the renewable energy sector with the commissioning of a 1 MW solar farm in Gujarat
during the 15 month reporting period. More details of our solar project are in the renewable energy initiative section below.
Pollution Prevention
Essar Oil utilises the services of a sister company, Vadinar Oil Terminal Ltd (VOTL), to manage crude oil imports and exports
and for distribution of petroleum products. VOTL is governed by the International Maritime Organisation’s guidelines and
protocol. Onshore pollution prevention and control is managed by VOTL.
The Company uses 100% double hulled tankers on time charter to transport oil products via sea. The average age of the
tankers is about 10 years.
Our on-shore pollution prevention and control measures at our hydrocarbon storage facilities include primary, secondary and
tertiary containment. Primary containment includes engineering controls through adequate tank design. Secondary containment
includes full bunding, or containment walls, around the tanks with 110% capacity and tertiary containment includes the diversion
of any spilled material to a slop tank specifically designed for the purpose.
Any spill of a chemical or oil totaling over 100 litres is considered as significant in line with our Company procedures.
There were no significant oil spills at any of our sites during the 15 month reporting period.
The effluent treatment plant at the Vadinar refinery operates following a three stage process incorporating physical,
chemical and biological treatment. This is followed by tertiary treatment using dual media, activated carbon filters and chlorine.
At Vadinar, all the effluent generated by the production process is treated and 100% of this is recycled. Desalinated water and
cooling tower blowdown is discharged into the sea.
Most of the hazardous waste generated at our sites is either reused or recycled or sold to Pollution Control Board
approved authorities.
All the environment expenditure at the Stanlow refinery is included as part of project costing.
Essar Energy plc Sustainability Report 2012
46
Health, safety and environment continued
Air
We have installed state of the art air pollution control
equipment at all sites to control the air pollution. Measures to
reduce pollution are implemented according to the nature of
the operation and business. Stack emission and ambient air
quality is being monitored by the Company as well as the
State Pollution Control Board. The use of the following has
helped in the reduction of sulphur oxide (SOx) and nitrogen
oxide (NOx) emissions.
•
•
•
•
•
•
•
•
Amine absorbers
Low sulphur fuel
Low NOx burners
Sulphur recovery unit
Floating roof tanks
Particulate control from FCC plant
Flue gas desulphurisation plant
Good flare management
Protection of water resources
Water is a critical and valuable resource for our Company’s
operations. Ensuring adequate water supplies is a key
business risk that needs to be managed in the same way as
energy and carbon. As far as possible, we design and run
our operations in ways that help reduce water use.
We also take utmost care not to contaminate the ground
water as a result of our operations. This is ensured through
design as well as regular monitoring.
Protecting biodiversity
The Stanlow refinery at Ellesmere Port is located on the River
Mersey. The river is in its estuarine state at Ellesmere Port,
where it is at its widest point of three miles (five km). The
eastern part of the estuary is significantly affected by silting,
and part of it is marked on modern maps as dry land instead
of as tidal. These wetlands are of importance to wildlife, and
are categorised as a Ramsar site, under the Ramsar
Convention which lists wetland sites of international
importance. The operations at the Stanlow refinery are not
considered to have any material impact on the Ramsar site.
Essar Energy plc Sustainability Report 2012
An Extended Environmental Impact Assessment is carried
out by a qualified third party on all projects that could have
an impact on biodiversity. The comprehensive assessment
includes biodiversity aspects and mitigation measures which
are adequately addressed in the site environmental
management plan.
Our refinery at Vadinar is located near a Marine National Park
and is considered an area of high biodiversity value. Several
measures have been taken to ensure we have a minimal
effect on the existing biodiversity. Some of the measures
include translocation of coral from the intertidal and sub tidal
pipeline and jetty corridor to nearby locations. Over 2,300
specimens belonging to 23 species of hard coral and one
species of soft coral were translocated by the National
Institute of Oceanography under the supervision of Essar Oil
and the Marine National Park Authority. The health of corals,
mangrove and associated ecosystem in the region is
monitored on a monthly basis.
Additionally, around 150 hectares of mangrove planting has
been carried out in the last three years. Further planting is
ongoing in close consultation with the National Marine Park
Authority and a study of the ecological aspects of mangroves
planted has been initiated.
To demonstrate our continued commitment towards
biodiversity and related initiatives, Essar Oil has supported
the Marine National Park authority to establish a marine
research station in the National Park and Sanctuary.
Our power plants at Hazira do not fall under the area of
high biodiversity. However they do fall under protected areas.
No species on the International Union for Conservation of
Nature Red List exist in the area surrounding our power
plant operations.
47
Essar Oil Limited, Vadinar
Material Consumption – Essar Oil
FY 2011
FY 2012
14,755,532.6
13,495,999.0
FY 2012 (MT)
(GJ)
Crude Oil Processed (MT)
1 No Input Materials were recycled
Direct Energy Consumption – Essar Oil
Direct Energy Sources Purchased
Natural Gas
Internal Fuel Oil
Fuel Gas
Naphtha
HSD
FCC Coke
FY 2011 (MT)
(GJ)
93,269.5
323,997.4
288,058.9
0
0
199,824.0
5,120,615.0
13,021,453.8
13,365,358.2
0
0
7,099,746.7
146,499.0 8,083,141.073
273,633.1 10,997,313.45
180,406.0
83,70,477.6
23,863.0 1,069,062.40
4,271.0
185,062.43
181,199.0
6,438,000.5
Essar Oil – Indirect Energy Consumption
FY 2012
FY 2011
Electricity Purchased (kWh)
Electricity Purchased (GJ)
89,628,540.0 41,842,640.0
322,662.7
150,633.5
Essar Oil – Energy Saved due to Conservation and Improvements in the following units
Utility – Impeller trimming
PIT – Dispatch
VBU Impeller trimming
Utility – connection of LSW
CDU/FCCU
Dispatch
Total
kWh
kWh
kWh
kWh
kWh
kWh
kWh
April 2010–
March 2012
3,886,722.0
390,657.0
73,317.0
1,322,310.0
616,000
8,880
6,297,886.0
Fresh Water Withdrawn
(m3)
EOL, Vadinar
FY 2011
FY 2012
21,115,378.0
26,621,961.0
EOL, Vadinar – Withdrawal by Source
(m3)
Q1
Q2
Q3
Q4
Total
FY2012
FY2011
Sea
River
Sea
River
5,400,454
5,096,595
5,123,914
4,831,599
20,452,562
163,679
163,663
248,066
87,408
662,816
5,570,021
5,453,035
5,336,140
6,385,454
22,744,650
390,271
649,924
1,336,656
1,500,460
3,877,311
Waste Water Generated
EOL, Vadinar (m3)
Essar Energy plc Sustainability Report 2012
FY 2011
FY 2012
1,810,604.0
1,635,404.0
48
Health, safety and environment continued
Waste Water Reused/Recycled
FY 2011
FY 2012
1,810,604.0
1,635,404.0
FY 2011
FY 2012
8.57
6.14
ETP Treated Water (m )
3
Percentage of Total Water Reused and Recycled
%
Quality of Effluent
Parameters
Unit
GPCB Limits
Apr 2010 – Mar 2011
Apr 2011 – Mar 2012
pH
O&G
ppm
Phenol
ppm
Sulphide
ppm
COD
ppm
SS
ppm
BOD
ppm
CN
ppm
6–8.5
8
7.8
5
<4
<4
0.35
0.18
0.18
0.5
0.2
0.2
125
62
65
20
9.0
11.9
15
11
11.56
0.2
<0.005
< 0.005
Total de-salinated water discharged into the sea in FY 2010–11 was 2,939,235.0m3 and in FY 2011–12 was 3,375,138.0m3.
Quality of Effluent Discharged
Greenhouse Gas Emissions – Essar Oil, Vadinar
Units
Scope 1 emissions
Scope 2 emissions
tCO2e
tCO2e
FY 2010
FY 2011
FY 2012
2,407,663.0
2,529,310.0
2,470,410.0
75,233.0
80,218.0
37,394.0
FY 2011
FY 2012
0.18
0.19
Energy Intensity – Essar Oil
tCO2e/Tonne Production
Emissions – Essar Oil
2010–11
PM
(in Tonnes)
SO2
NOx
CO
326.28 49,32.78 1,603.71
566.879
2011–12
PM
SO2
418.27 24,82.57
(in Tonnes)
NOx
CO
446.48 388.752
Waste Disposal
Hazardous Waste
EOL, Vadinar
ETP Oily Sludge (MT)
Used Lubricating Oil (MT)
Discarded Empty Drums
Spent Ni-Mo Catalysts (MT)
Slop Oil (MT)
Oily Cotton Rags (MT)
Lead Acid Batteries1
1 Lead Acid Batteries for FY 2011 include all batteries reported for all periods up to 31 March 2011
Essar Energy plc Sustainability Report 2012
Units
FY 2011
FY 2012
Disposal Method
3,834
47.78
9,714
0
30,455
1.2
365
3,340
44.16
12,195
630
77,793
1.2
156
TSDF site
Recycled
Reused
Reused
Recycled
Reused
Reused
49
Waste Disposal
Non-hazardous Waste
EOL, Vadinar
Spent FCCU Catalyst (MT)
Waste Bitumen (MT)
Waste Coke (MT)
FY 2011
FY 2012
Disposal Method
1,355.6
12.13
45
629.52
9.13
32
Reused
Recycled
Reused
Capital Expenditure on Environment (INR)
Essar Oil, Vadinar
Pollution Prevention and Control Equipment
FY 2011
FY 2012
n/a
3,015,000
Stanlow Refinery
Material Consumption – Stanlow
Crude plus Feedstock (MT)
Aug 11 – Mar 12
6,148,893.2
1 No Input Materials were recycled
Direct Energy Consumption – Stanlow
in GJ
Aug 11 – Mar 12
26,000,000.0
Indirect Energy Consumption – Stanlow
in GJ
Aug 11 – Mar 12
403,404.5
Fresh Water Withdrawn
(m3)
Stanlow1
FY 2011
FY 2012
n/a
3,212,000
1 Aug 11 to Mar 12
Water Withdrawn by Type – Stanlow
(m3)
Aug 11 – Mar 12
Surface Water
Ground Water
Potable water
Saline once through Water
Total
310,000
2,600,000
302,000
14,100,000
17,312,000
Water Discharge
FY 2012
Stanlow1 (m3)
1 Approximate discharge during the entire year
Essar Energy plc Sustainability Report 2012
24,000,000.0
50
Health, safety and environment continued
Quality of Effluents – Stanlow
Aug 2011 – Mar 2012
Consented Outfalls
SDAF
NDAF
N38
N19
Total Oil
ppm
TSS ppm
COD ppm
pH
5.77
7.57
5.98
3.97
14.77
9.29
8.11
8.00
74
79
115
49
7.7
7.8
8.3
7.8
Greenhouse Gas Emissions – Stanlow
Aug 11 – Mar 12
Units
tCO2e
Scope 1 emissions
1,831,101.0
tCO2e
Scope 2 emissions
0.00
1 August 2011 to December 2011 = 1135655 t as verified under EU-ETS
January 2012 to March 2012 = 695446 t not yet verified
Emissions
Aug 11 – Mar 12
PM
SO2
NOx
121.5
8,134.8
2,878.2
CY 2011
(In tonnes)
Waste Disposal
Hazardous Waste
In Tonnes
7957
Aug 11 – Mar 12
Oils – Onsite (Tonnes)
Chemicals – Onsite (Tonnes)
4610
555
FY 2011
Stanlow – Overseas Transfer of Waste
Spent R6301 Catalyst
Criterion DC-130 Cat ex R4001/2
Nickel Catalysts
Tonnes
Tonnes
Tonnes
569.5
44.2
7.3
Essar Power Limited, Hazira
Material Consumption – EPoL
Natural Gas (m3)
FY 2011
FY 2012
612,218,906.3
450,193,755.7
1 No input materials were recycled
Direct Energy Consumption – EPoL
EPoL, Hazira (GJ)
FY 2011
FY 2012
482,320.0
398,903.0
Aug11–Mar12
1 The above represents auxiliary consumption only
Indirect Energy Consumption – EPoL
in GJ
Essar Energy plc Sustainability Report 2012
–
51
Electricity Consumption – EPoL
FY 2010
FY 2011
FY 2012
KWh
54,583,560.0
55,969,810.0
45,785,100.0
EPoL, Hazira
Energy Saved due to Conservation and Improvements – EPoL
FY 2011
FY 2012
Total Projects Implemented (tCO2e)
–
3,011,502.0
Project Implementation Commenced (tCO2e)
–
141,744.0
Power Business Group
1 Cumulative projects implemented or under implementation as on 31 March 2012
Fresh Water Withdrawn – EPoL
FY 2011
FY 2012
3,859,875
2,969,275
FY 2010
FY 2011
FY 2012
(m3)
EPoL, Hazira
Greenhouse Gas Emissions – EPoL
Units
tCO2e
Scope 1 emissions
997,323.0
1,199,666.0
882,221.0
tCO2e
Scope 2 emissions
0.0
0.0
0.0
The above represents total emissions. The emissions due to auxillary consumption in FY 2011 and FY 2012 were 24,458.77 and 20,437.63 tCO2e respectively.
Specific GHG Emission Per 1 MWH Gross Generation
FY 2011
FY 2012
0.436
0.446
Emissions – EPoL
FY 11
tonnes
PM
SO2
NOx
33.11
Nil
104.86
FY 12
tonnes
PM
SO2
NOx
34.48
Nil
102.11
Waste Disposal
Hazardous Waste
EPoL, Hazira
Used Oil (KL)
FY 2010
FY 2011
8.82
44.31
FY 2012 Method of disposal
9.87 Sold to Pollution Control Board approved agencies
Bhander Power Limited, Hazira
Material Consumption – BPoL
Natural Gas (m3)
FY 2011
FY 2012
574,693,930.5
515,600,450.3
1 No input materials were recycled
Direct Energy Consumption – BPoL
Bhander Power (GJ)
1 The above represents auxiliary consumption only
Essar Energy plc Sustainability Report 2012
FY 2011
FY 2012
472,114.0
403,191.0
52
Health, safety and environment continued
Indirect Energy Consumption – BPoL
Aug11–Mar12
in GJ
–
Electricity Consumption – BPoL
Bhander Power
KWh
FY 2010
FY 2011
FY 2012
50,701,825.1
55,964,225.7
48,557,465.0
Fresh Water Withdrawn – BPoL
(m3)
Bhander Power
FY 2011
FY 2012
3,375,155
2,917,445
Greenhouse Gas Emissions – BPoL
Units
tCO2e
tCO2e
Scope 1 emissions
Scope 2 emissions
FY 2010
FY 2011
FY 2012
1,197,365.0
0.0
1,112,082.0
0.0
991,385.0
0.0
1 The above represents total emissions. The emissions due to auxiliary consumption in FY 2011 and FY 2012 were 23,860.2 and 20,267.74 tCO2e respectively
Specific GHG Emission Per 1 MWH Gross Generation
FY 2011
FY 2012
0.426
0.417
Emissions – BPoL
FY 11
tonnes
PM
SO2
NOx
31.54
Nil
47.30
FY 12
tonnes
PM
SO2
NOx
42.79
Nil
65
FY 2010
FY 2011
FY 2012
Nil
10.29
20.79
FY 2011
FY 2012
Nil
Nil
Waste Disposal – BPoL
Hazardous Waste
Bhander Power
Used Oil (KL)
Waste Disposal – BPoL
Non-hazardous Waste
Bhander Power
None
E&P, Raniganj
Direct Energy Consumption
E&P, Raniganj (GJ)
FY 2011
FY 2012
65,751.1
114,553.3
Fresh Water Withdrawn
(m3)
E&P, Raniganj
Essar Energy plc Sustainability Report 2012
FY 2011
FY 2012
23,890
15,670
53
Greenhouse Gas Emissions – E&P, Raniganj
Units
tCO2e
tCO2e
Scope 1 emissions
Scope 2 emissions
FY 2011
FY 2012
17,824.8
0.00
18,596.2
0.00
Waste Disposal
Hazardous Waste
E&P Raniganj
FY 2011
FY 2012
Method of Disposal
0
4.99
Sold to Pollution Control Board approved agencies
Used Oil (KL)
Waste Disposal
Non-hazardous Waste
E&P Raniganj
Plastic (tonnes)
FY 2011
FY 2012
0
2
Capital Expenditure on Environment (INR)
FY 2011
FY 2012
Operational Costs (Including green belt development)
2,316,459
8,213,835
FY 2011
FY 2012
15.0
2.9
FY 2011
FY 2012
286.4
207.3
E&P Raniganj
E&P, Mehsana
Direct Energy Consumption
E&P, Mehsana (GJ)
Indirect Energy Consumption
E&P, Mehsana (GJ)
Water Withdrawal
E&P, Mehsana (m3)
FY 2011
FY 2012
365.0
365.0
Greenhouse Gas Emissions – E&P, Mehsana
Units
FY 2011
FY 2012
tCO2e
Scope 1 emissions
34.9
40.0
tCO2e
Scope 2 emissions
0.2
0.2
FY 2011
FY 2012
0
0
FY 2011
FY 2012
0
39.76
Waste Disposal
Hazardous Waste
E&P Mehsana
None
Waste Disposal
Non-hazardous Waste
E&P Mehsana
Drill Cuttings (Tonnes)
Capital Expenditure on Environment (INR)
E&P Mehsana
Essar Energy plc Sustainability Report 2012
FY 2011
FY 2012
–
81,235
54
Product responsibility
Essar Energy always seeks to provide customised
solutions to customers. Operational excellence and delivering
consistent value are some of our key customer focus areas.
We are improving our strategy to meet customer demands.
The details of our customer strategy are given in the
following pages.
Our Company has a robust mechanism for selecting
suppliers and contractors. They are evaluated on the basis of
their competence to meet the technical requirements for the
product, adherence to quality assurance, service capability
and past performance, amongst other criteria.
The Essar Group has a Global Sourcing Division that ensures
the following:
• Long term partnership with key suppliers and contractors.
• A wide vendor base through comprehensive vendor
research.
• Value generation through consolidated spend by
obtaining benefits of economies of scale through a wider
supplier base.
• Direct and measurable reduction in sourcing cost through
induction of spend data analysis and life cycle costing
concepts.
• Greater usage of IT tools such as project management
and planning, budget cost control, SAP, tendering and
e-bidding.
• Unification of vendors and item catalogue across the
Company.
Our Product Strategy
We believe government pricing policies in India for certain fuel
types such as diesel have led to a slightly inflated demand for
that product, while adversely affecting the demand for certain
other products such as furnace oil. We also expect a decline
in the demand for kerosene oil.
We have consistently focused on maximising sales of
petroleum products from the Vadinar refinery in the Indian
domestic market and followed a considered strategy of
product exports to optimise realisations of our products.
We view South Asia as one of our focus areas for near
term growth.
With the completion in 2012 of the refinery expansion at
Vadinar, we are in a position to offer greater volumes of both
Euro IV and Euro V standard automotive grade fuels to our
clients. In the direct retail segment, where through our franchise
model we have over 1,400 operational branded fuel outlets,
we are following the strategy of network rationalisation and
controlled growth. We will continue to focus on growing our
retail offerings in compressed natural gas (CNG) and Auto LPG.
In the reporting period, we successfully launched the VG30
grade bitumen in the domestic market. This has become
the benchmark for new project requirements in India.
We have procedures in place to minimise risk at all stages of
product handling, including carrying out extensive checks at
the refinery complex for all product movement in and out of
the complex.
Essar Energy plc Sustainability Report 2012
Our Customer Strategy
Refining and Marketing, India
Essar Oil has built and maintained excellent relations with
all its customers. We maintain a high level of service quality
which we believe is one of our unique selling points as a
supplier. We have made a conscious effort to go beyond
being simply suppliers to our customers by allowing
ourselves to have a deeper, more positive impact on
our customers’ businesses and maintain longer term
relationships with them. We organise periodic customer
meetings across the country to update our customers on our
activities and to seek their feedback on our performance.
Our sales in the domestic market are broadly categorised
into three customer segments – public sector undertakings
(PSUs), direct bulk customers and Essar fuel retail outlets.
During the financial year 2011–12, we sold approximately
7.8mmt of products in the domestic market, representing
over 60% of our total sales. This is particularly commendable
as the 15 month period saw the commissioning of new
refineries elsewhere in India and capacity increases in some
public sector refineries even as the industry recorded lower
than expected growth for most products, including petrol
and fuel oil. Over five million metric tonnes of products were
exported to various regions such as South East Asia and the
Middle East.
Of our total domestic sales in India during the financial year
2011–12, approximately 85%, or 6.8mmt, mainly in diesel,
petrol, kerosene oil and LPG were sold to the public sector
oil marketing companies (OMCs). During the reporting
period, we signed a fresh product purchase and sale
agreement with Indian Oil Corporation for a period of three
years, and also signed an agreement with Shell India.
Our sales during the reporting period were affected by a
scheduled 35 day refinery shutdown in September and
October 2011 as part of the Vadinar refinery expansion
project and for routine maintenance.
Domestic Market Sales (Refinery Product only)
LPG
MS
ATF/Kero
HSD
FO
Sulphur
Bitumen
SUB-TOTAL
FY09–10
FY10–11
FY11–12
551
1,174
868
5,105
746
78
584
9,106
596
851
706
5,344
761
81
456
8,795
576
828
630
4,777
540
80
261
7,692
55
Essar retail outlets
Essar Oil, through its franchise model, has an extensive
network of over 1,400 operational retail petrol stations
across India, and over 200 outlets under various stages of
construction. We have entered into agreements with various
public sector OMCs to service our retail network in the most
economical manner.
Product Consumption by Location
15.8%
2.7%
20.5%
We were the first private entity in India to establish the
franchise model in petrol retailing. The model means that
the franchisee owns the land and the infrastructure.
60.9%
India
South East Asia
Middle East
Rest of World
Domestic Market Sales by Type of Customer
(including Traded Product)
PSU
Direct Customers and
Traders
FY09–10
FY10–11
FY11–12
7,507
7,289
6,802
1,237
1,212
843
797
557
128
9,541
9,058
7,773
Retail
Total
1 FO and Bitumen sales to PSUs have also been included under the PSU segment
Oil marketing companies
We have off-take agreements with all the public sector oil
OMCs in India – Indian Oil Corporation, Bharat Petroleum
and Hindustan Petroleum – to sell our refined petroleum
products including our entire production of LPG.
The quantity to be sold is finalised at the beginning of each
year of the contract and prices are adjusted on a fortnightly
or monthly basis based on the type of products and are
moved via rail, road, pipelines, and coastal shipping.
Direct bulk customers
Our primary direct sales customers comprise of petroleum
product traders and direct commercial users such as
cement factories, power plants and construction companies.
Our direct customer sales include both spot and term sales
for primary fuel oil, sulphur, bitumen and petroleum coke.
Essar generally enters into annual off-take agreements with
its direct bulk customers which include limitations such as
sales territory and end user certification requirements. Our
sales to Essar Group companies also fall into the direct bulk
customer category. We have entered into sale and purchase
agreements with Shree Cements and Lafarge International
for the sale of petroleum coke.
Essar Energy plc Sustainability Report 2012
Our expansion strategy in fuel retail is highly dependent on the
regulatory pricing environment for the public sector OMCs,
who receive price subsidies from the Government of India and
are therefore able to set their retail prices at below cost. The
subsidies are provided to effectively compensate the OMCs
for the losses incurred by them on subsidising the price of
diesel. The Government of India has deregulated the pricing of
petrol which is a step in the right direction but we believe total
deregulation is essential to create a level playing field between
the private and public sector companies. As a result of this
pricing mismatch between the private and public refiners,
we had the opportunity to sell petrol at par with the market
prices for only a few months during the reporting period
and recorded our highest sales in December 2011 at 23.7
thousand TKL. Our overall retail sales during the financial year
2011–12 stood at 128,000 metric tonnes.
If prices and margins at fuel retail outlets operated by public
sector undertakings (PSUs) are at market levels, the retail
prices at Essar Oil outlets are maintained at par with the
nearest OMC outlet, otherwise fixed differentials are
maintained to avoid losses.
We have continued to expand our non-fuel retail offerings
across the network and now offer products and services
such as auto components, lubricants, food and beverages,
agricultural products, telecommunications, banking services
and tourism through our tie-ups with companies such as
Indian Oil, Castrol, Total, State Bank of India, Western Union,
Amul and Café Coffee Day.
Adding product offerings such as CNG and Auto LPG at our
retail stations has been one of our key focus areas. We have
entered into strategic tie-ups with leading gas marketing
companies including Indraprastha Gas, Mahanagar Gas,
Sabarmati Gas, Adani and Gujarat Gas among others.
As of May 2012, we had 17 stations offering CNG and
LPG fuels to retail customers, of which 12 CNG stations
were commissioned during the financial year 2011–12. In
addition, we have commissioned a petrol dispensing unit
at an Essar Group company Aegis logistics outlet leveraging
our partner network.mpany Aegis logistics outlet leveraging
our partner network.
56
Product responsibility continued
Customer Testimonials
“Essar Oil has been a very reliable supplier for Tata Power
over the last two years and has played a significant role in the
commissioning activities related to the prestigious Mundra
UMPP project. The performance on quality and delivery
parameters has been excellent and any queries raised have
been addressed as a top priority. We look forward to
continuing our relationship with Essar Oil for future
requirements as well.”
A.M. Dharam
Chief Manager – Fuel Procurement
Tata Power
Refining and Marketing, UK
Our products from the Stanlow refinery in the UK are
primarily sold within the United Kingdom and represent
approximately 15% of all transport fuels consumed within
the country. The principal distribution area is the north west
region of England, with product also being moved to the
Midlands and airports, including Manchester Airport. Our
primary customer groups at Stanlow are international fuel
companies, independent fuel companies, supermarkets,
resellers and commercial bulk customers, such as industrial
companies and railways.
Power
Our primary customers in the power segment are Essar
Group companies and various Indian State Electricity
Boards. Up until 2011, almost 85% of our capacity was sold
to Essar Group companies. With the commissioning of the
Salaya I project in June 2012, 1,300 MW, or approximately
40% of the total operating capacity of 2,800 MW, as at June
2012, will be sold under long term agreements to the Gujarat
State Electricity Board.
As we look forward to the commissioning of new power
generation projects, we expect the share of Essar Group
companies as our primary customer will fall further as our
PPA with the State Electricity Boards of states such as
Madhya Pradesh and Bihar become operational. By mid2014, we expect around 52% of our sales to go to State
Electricity Boards.
Essar Energy plc Sustainability Report 2012
Exploration and Production
Our Exploration and Production business commenced
sales from our CBM blocks in August 2010 through the
small cascade storage system, with each cascade having
a carrying capacity of 500 standard cubic metres (scm).
The system also includes a compressor station with a
capacity of 6,000scm/d.
In August 2011, we commissioned a dedicated pipeline to
supply gas to one of our primary customers and continued
serving additional customers through the cascade system.
At present, of our total production range of approximately
25,000scm/d, around 20,000scm/d is being sold to
external customers while the remainder is consumed
within the business.
Renewable Energy Initiative
During the year, we took a first step into the renewable
energy sector with the commissioning of our first solar farm.
The Essar Power renewable energy team began
construction of the 1 MW solar photovoltaic project at Bhuj,
Gujarat. The plant was completed within two months and
was commissioned in February 2012.
The Company signed a PPA for 25 years with GUVNL,
the leading power transmission and distribution company
in Gujarat. Upon completion, the plant was synchronised
with the grid in accordance with the terms of the PPA.
The unit has its own performance monitoring system, enabling
Essar Power to compare its technologies and performance.
We have high expectations from this project and the technical
and commercial knowledge acquired will be invaluable in our
objective of building bigger solar power plants.
57
Corporate social responsibility
In line with our approach to the wider community, our social
responsibility focus is on the enrichment of communities
around our operational sites by acting on their developmental
needs and aspirations. The Essar Foundation (the Foundation)
is the entity which is responsible for delivering corporate
social responsibility (CSR) initiatives across the whole Essar
Group and we work closely with the Foundation at all our
operational sites.
Vision:
To become a catalyst of positive change in society.
Mission:
To improve the quality of social and economic life of
our neighbourhood communities and make a positive
contribution to the life of all those who are directly or
indirectly impacted by our business, products and services.
The guiding principles of our CSR activities are based on the
3E framework, comprising Entrepreneurship, Environment,
and Education. Entrepreneurship initiatives are a cornerstone
of the Company’s approach to CSR. Enabling communities
through improvements in education, infrastructure, women’s
empowerment and healthcare have been our priorities.
We classify our planned activities into neighbourhood CSR
activities and National/State projects. The communities
targeted by our activities are broadly classified into:
• Participating families who have contributed their land to
our operational activities
• Communities living in the vicinity of our operational sites
• Communities whose socio-economic well being is
impacted by our activities
Around 75% of our operations in India have implemented
community engagement programmes. Social impact
assessments are done as part of the environmental clearance
process in different geographies for all the green-field and
brown-field projects and the results of these assessments
are shared with the designated regulatory body.
Some of our activities and initiatives run throughout the
reporting period, such as a community health clinic, or
are held periodically, such as vaccination programmes or
education campaigns, while some are activities with a single,
one-off objective, such as the construction of a water tank or
providing computers and sewing machines to a local jail. In
the table below, we detail the total number of activities that
were ongoing or held periodically and individual actions and
activities during the reporting period.
Site
Vadinar
Tori
Raniganj/Durgapur
Essar Energy plc Sustainability Report 2012
Ongoing
Activities
Individual
Activities
12
25
5
32
26
8
Essar Oil’s CSR activities around the Vadinar oil refinery
site in Gujarat state cover over 17 villages with a combined
resident population of over 35,000. Health camps organised
by Essar attract people from other villages in the region.
At Raniganj, in West Bengal state, the Exploration and
Production team working at the CBM gas production site
covers over 19 villages and reaches over 20,000 people.
Essar Power has been very active at its project site at Tori,
in Jharkhand state, and is impacting the rural communities
around the project site with investments in healthcare,
education and environment.
The amounts reported for the period are funded by the
Foundation and do not reflect the amounts listed in the
financials of the 15 month reporting period for Essar Energy
as the Foundation receives contributions from Essar Energy
as well as its sister companies and runs several programmes
funded jointly.
Annual Spend on CSR at sites (in INR million and US dollars)
FY April 2011–March 2012
Site
INR mn
USD ‘000
Essar Oil Limited, Vadinar
E&P, Raniganj CBM Project
Essar Power, Tori Power Project
Total CSR Spend
28.05
5.85
5.44
39.34
577.97
120.61
112.14
810.72
1 USD/INR at 48.53
CSR Spend by business in India
14.9%
13.8%
71.3%
Oil & Gas
Power
E&P
The Group has made no political donations during the 15
month period to 31 March 2012 (including in India). Essar Oil
UK donated a total of £15,000 to various British charitable
causes during the 15 month period. No further charitable
donations were made by the Group during the period
(including in India). The Group made no charitable or
political donations in 2010 (including in India).
58
Corporate social responsibility continued
Breakdown of consolidated spend in India is as under
(in INR million and US dollars):
Health
Infrastructure
Education and women’s empowerment
Other social activities
12.01
12.78
4.14
10.41
CSR Spend by sector in India
26.4%
10.5%
30.5%
32.5%
Health
Infrastructure
Education and women
empowerment
Other social activities
The following pages provide a snapshot of our CSR initiatives
at different locations. A few case studies have been included
to describe the work we do in identified focus areas.
Infrastructure
Some of our activities are in India’s rural areas where
infrastructure is extremely poor and people are lacking in
basic facilities such as roads and access to drinking water.
The Foundation and Essar Energy businesses work closely
with the local and village administrations in such regions to
provide potable water, to develop roads, deepen water tanks
and ponds, and to construct or upgrade schools or
community buildings.
In the 15 month reporting period, some of our significant
infrastructure activities were:
• Construction and refurbishment of community and public
utility buildings
• Installation of street lights
• Construction, widening and repairs of village roads
and drains
• Construction of walls for buildings and flood relief
• Assisting state governments in village development
schemes
Essar Energy plc Sustainability Report 2012
The provision of drinking water to villages in our areas
of operation has been one of our priority infrastructure
initiatives. During the reporting period, we focused on the
following activities towards this end:
• Drinking water tanker supplies
• Construction of overhead water storage tanks
• Construction of pump house, sump and laying pipelines
for carrying river water
• Repair and maintenance of hand pumps
Essar’s work in providing access to drinking water in the
Vadinar region directly benefited over 28,000 community
members in 11 villages.
59
Education
Education is one of the 3E’s of Essar’s social responsibility
framework. We have been deeply involved in supporting rural
education at all our sites through a variety of ways. Our focus
on education seeks to achieve the following objectives:
• Resolving fundamental issues of access and quality
of education
• Using education to enable young minds to achieve their
true potential
• Promoting creative tools to make education an enriching
experience
• Improving infrastructure and environment for better learning
The employees were encouraged to visit any of the
exhibitions and purchase a book for the drive. At the end of
the four day exhibition, the drive had collected approximately
1,700 books which will form the foundation of the community
library being established by the Foundation for children from
the local communities. The Foundation also used the
occasion to donate book sets to the refinery complex’s
housekeeping staff for their children.
Our activities during the reporting period included:
• Support for local teachers and students in financial need
• Construction and refurbishment of school buildings,
classrooms, and upgrading school infrastructure
• Donations of computers, notebooks and stationery
• Support for and implementation of educational schemes
and projects of local governments
• Organising classes for computer education, language,
and adult literacy
At Vadinar, Essar organised the Library Inclusion
Programme, a workshop involving 50 teachers from
25 schools from the Khambalia and Lalpur blocks of the
Jamnagar district, within which the refinery is situated.
The workshop had two priorities – refurbishing the existing
libraries in schools and cultivating a habit of reading.
Some of our activities in education are as follows:
Pledge-a-Book Drive to support a community library
for children
Essar Foundation organised a Pledge-a-Book Drive at Vadinar
in March 2012 with the aim of building a community library for
children. This event was held concurrently with an exhibition of
children’s books organised by the Foundation simultaneously
held across locations in Vadinar. The drive was launched after
roadshows by the Foundation highlighting the very low levels
of reading and learning abilities and high dropout rates of the
children in schools supported by the Foundation.
Essar Energy plc Sustainability Report 2012
Essar Gyanjyoti scheme supports Gujarat state’s
school enrolment drive
Every year, primary schools across Gujarat organise a formal
Pravesh Mahotsav event to celebrate the first day at school
for children as a part of the Government of Gujarat’s Primary
School Enrolment Drive. Essar has been an active partner of
the Government since the Drive’s inception in 2005.
The Essar Foundation runs the Gyanjyoti (Lamp of
Learning) scheme, through which it provides school kits to
disadvantaged children in communities around its areas of
operations. At Vadinar, the scheme runs well beyond the
operational area of the Essar Oil complex and covers over 80
villages in the Lalpur and Khambalia district blocks. In June,
2011, the Foundation organised Pravesh Mahotsavs at
various government-run village schools in the region and
distributed 1,500 school kits to Class 1 students.
The Gyanjyoti scheme also reaches out to the children of
local communities around its Raniganj CBM project site at
Durgapur in West Bengal. In July 2011, the Exploration and
Production team at Raniganj distributed school kits to 2,881
primary school students from 27 schools in 24 villages.
The school kit consisted of a bag, notebooks and
writing instruments.
60
Corporate social responsibility continued
Essar Foundation sponsors the Burdwan district
book fair
In January 2012, the Essar Foundation sponsored the 24th
Burdwan District Book Fair 2011-2012, organised by the
Government of West Bengal and Raja Ram Mohan Roy
Library Foundation.
The main objective of the week-long fair was to promote
Bengali literature and culture, while also providing a platform
to showcase the work of budding writers and novelists.
Around 80 publishing companies participated in this event,
which drew a huge response from the local school and
college students.
EEPL Nigeria donates science laboratory to Lagos
school
Essar Energy’s Nigerian subsidy, Essar Exploration and
Production Limited Nigeria (EEPLN) donated a refurbished
science laboratory to Falomo Senior High School at Lagos,
Nigeria in December, 2011. The laboratory, which includes
physics, chemistry and biology equipment, was given to the
school as part of EEPLN’s commitment towards community
development and the advancement of basic science
education in Nigeria.
Spreading the joy of reading in Mahan
The Essar Foundation and Essar Power Madhya Pradesh,
which runs the Mahan power project site, organised a
Reading Carnival at Saraswati Shishu Mandir Nanda Vihar
School in Mahan in July 2011. The event was aimed at
creating a festive mood to encourage students to read and
creative mediums such as storytelling, art and painting,
music and paper craft were used to elicit the children’s
interest in books.
The school is run by Essar Power Madhya Pradesh with
the help of a local education trust, Saraswati Shishu Mandir.
Being based in a rural, tribal area, the children have very little
exposure to the formal education system and a majority of
the students are first-generation learners.
The Carnival, entitled ‘I Love Reading’, was conducted
in collaboration with KATHA, a Delhi based organisation
specialising in promoting the habit of reading among children.
The three-day event integrated education with “learning” and
focused on creating an acceptance of the new method of
teaching both among the teachers and students.
Essar Energy plc Sustainability Report 2012
During the Carnival, a classroom specific library was set up
consisting of storybooks specifically designed to relate to the
child’s imagination and the world around, with the intention of
spreading basic awareness of health, education, environment
and social life through storytelling. Senior officials of the district
administration visited the carnival and announced their
intention to introduce this teaching methodology in schools
in the district.
Essar Foundation and Essar Power Jharkhand bring
back the joy of being in school at Tori
Essar Foundation and Essar Power Jharkhand Limited made
India’s National Education Day a memorable one at their Tori
site by formally handing over a refurbished school building to
the local administration.
The new Essar Middle School is located in Village Chatro,
near the power project site. All the classrooms have been
equipped with blackboards and benches and the school has
a separate room for staff and a playground. This is the only
school in the locality with these facilities. The school was
inaugurated by the Human Resource Development Minister
of the Government of the state of Jharkhand. The minister
also distributed scholarship cheques to the local students
pursuing education beyond Class 10.
Schools in the villages surrounding the Tori site suffer from
high dropout rate, absenteeism and underachievement. Two
days prior to the inauguration, Essar Foundation celebrated
‘The Joy of Being in School’, using colours as a way of
making school more attractive to children. This initiative was
facilitated by Akansha Foundation, a Mumbai based nongovernmental organisation.
Over 60 children enjoyed painting on their T-shirts and
canvases on the first day which created the enthusiasm to
paint the school walls on the following day.
61
Healthcare
Most of our operational sites are located in rural areas with
very poor healthcare facilities and a wide prevalence of
curable diseases. Making healthcare more accessible to
rural communities around our operational area has been,
and will continue to be, a strong focus area for us. Essar Oil’s
efforts in healthcare around the Vadinar refinery benefited
over 39,000 community members during the 15 month
reporting period.
Over 125 people were given free vaccinations for hepatitis-B,
diphtheria, whooping cough, tetanus, and tuberculosis.
Nearly 100 cases of malnutrition were detected and the
children were provided with nutritional supplements, vitamins
and tonics. A large number of Essar employees, district
officials and representatives from the villages came forward
to assist during the camp, which was well covered in the
local media.
Some of our significant contributions and responsibilities
towards healthcare have been:
• Operating a 24 hour Community Health Center at Jakhar
village, near the Vadinar refinery, and running community
centers at other sites
• Running mobile clinics reaching out to villages at our
operational sites in Vadinar and Raniganj
• Operating Mother and Child welfare clinics at various
locations
• Organising and sponsoring health camps, including for
eye care, cancer, vaccination, and general health check
up for school children
Foundation and Essar Power Mahan organise health
camp for malaria affected villages
Essar Foundation, under its ‘Aarogya’ (community health)
programme, and Essar Power Madhya Pradesh organised a
one-day Health Camp in November 2011 at its project site.
This followed an outbreak of malaria in the adjoining district
of Sidhi that had claimed 66 lives. Responding proactively to
the situation, the Essar team took the initiative of conducting
a health camp, along with the State government, in the
Village of Nagwa, for the benefit of residents of 11 villages
located around our site.
A total of 1,087 patients were treated at the camp and were
found to be suffering from fever, arthritis, colds and coughs,
malnutrition and gynaecological disorders. Over 100 patients
were tested for malaria and four cases of severe illnesses
were identified and were referred to the Community Health
Centre, Khutar, for long term treatment. Free medicines were
distributed at the camp.
Essar Foundation community health initiative crosses
milestone in Vadinar
The Essar Foundation Community Health Project in Vadinar,
under the Essar Aarogya Scheme, crossed a major milestone
in serving the needs of around a dozen villages around the
refinery complex. In the period since its inception in 2006,
the project has benefitted as many as 200,000 patients.
The project works through multiple platforms:
The Mother and Child Care Clinic, established in 2006 in
coordination with the district Panchayat at the Vadinar Public
Health Center, offers the services of gynaecologists,
paediatricians and general physicians.
The Essar Mobile Clinic Service, launched a month later
in 2006, conducts medical camps and provides free
medical treatment to residents of nine villages around the
refinery complex.
The Community Health Center was started in 2007 in
the village Jakhar. The center provides round the clock
medical services, has a daily Out Patients Department that
is supported by three doctors and four paramedical staff, a
laboratory and an ambulance service and holds a monthly
diabetic clinic.
Essar Energy plc Sustainability Report 2012
62
Corporate social responsibility continued
In June 2008, a sub-center was established in Kajurda
village, offering 2 hours of outpatient services daily.
Taking the Essar Aarogya scheme beyond the villages
covered by the health and community centers, Essar
Foundation and Essar Oil, in collaboration with the Guru
Govind Singh Hospital, Jamnagar, organised a free medical
camp in the Mota Mandha village in Khambalia taluka in
June 2011.
Additionally, a drawing competition was also organised
for the students of the two schools. The theme of the
competition was ‘source of water for domestic purposes’.
Students were provided with drawing books and colour
pencils for the event.
A team of nine doctors, including paediatric surgeons,
orthopaedic surgeons and other medical specialists, along
with officials from the Essar Occupational Health Centre,
Vadinar, attended to patients at the camp. Over 230 patients
from the four villages of Mota Mandha, Nana Mandha,
Kajurda and Parodiya received expert medical advice and
a complete course of medicines for a week, free of charge.
Essar Power opens a community dispensary at its
Jharkhand power project site
In keeping with Essar’s commitment to provide need based
support to communities around its project sites, Essar
launched a dispensary and ambulance service at Chatro
village near its Tori project site in Jharkhand state.
CBM Durgapur celebrates World Health Day
Essar Foundation and Essar employees at our CBM project
site at Raniganj in West Bengal spent World Health Day on
7 April 2011 organising special health camps for two schools
in the vicinity of the project site. The camps were organised
in association with the Vivekananda Hospital.
More than 786 students from Khatgoria and Borgoria villages
received a preliminary ear, nose and throat and dental health
checkup at the special camp. The health camps not only
raised awareness about dental hygiene but also helped the
staff gather primary health data about the local people –
information that will help medical practitioners, teachers and
CSR teams identify and address potential health issues.
Essar Energy plc Sustainability Report 2012
Essar already runs a dispensary at Nagar village in the
same region, and the second facility will help expand
the geographical reach and impact of medical
services considerably.
The new dispensary is manned by two doctors and two
nursing staff and provides the additional advantage of an
ambulance service that will be able to serve 12 villages
within a 15 kilometre radius of the dispensary. It is expected
to benefit 2,800 to 3,000 villagers directly. All the services
and medicines given at the dispensary are provided at no
cost to patients.
63
Entrepreneurship and Empowerment of Women
As entrepreneurship forms one of the pillars our of social
responsibility philosophy, we strive to create enabling
environments for community members at our sites. At villages
in Vadinar, Essar conducts three month-long programmes in
adult education, computer education, stitching and general
English speaking courses. Every three months, these classes
are held in a different village.
Other Social Initiatives
The monthly cattle fodder assistance programme covers 13
villages around the Vadinar refinery. The fodder assistance
programme takes care of the fodder requirements of over
2,450 cows in the 13 villages by providing assistance at a
rate of Rs. 285 per cow. A milk cow is a very important
resource in the rural communities because milk and milk
products form an important part of the community’s diet.
Activities at Vadinar
Our community initiatives at the Stanlow refinery
As the second largest refinery in the UK, and one of the
largest industries in the north west of England, Stanlow’s
association with the community extends beyond being just
an employer. We are associated with a host of community
initiatives and national and international organisations that
support healthcare, education and eradication of poverty.
Class Conducted
Stitching classes
General English Language Classes
Computer Classes
Adult Education Classes
Number of
Villages
Students
2 villages
2 villages
2 villages
2 villages
56
55
40
10
Essar Foundation runs a stitching centre in Salaya providing
the skills and earning capabilities for rural women to support
their families.
Environment
While environment remains one of our priorities as an
Company, we also strive to raise awareness among our
neighbouring communities on environmental issues such as
pollution, green cover, leading anti-plastic campaigns at
schools, supporting government programmes on
conservation and tree planting drives.
Sport Relief is a biennial charity event organised by Comic
Relief, one of Britain’s most notable charities and BBC Sport.
Sport Relief raises funds for some of the most underprivileged
people in the UK and the rest of the world by getting together
leading personalities from the world of screen and sport.
Employees at Stanlow played their part in supporting the
charity by raising GBP £1,350 in a single day, and their
contribution was doubled, with the management matching
the employees’ contribution.
In March 2012, Stanlow’s Hat Swap, aimed at replacing
employees’ existing safety helmets with new, Essar branded
helmets, raised over GBP £3,600 for a local primary school,
thanks to management’s offer to make a financial contribution
to the school for every old hat given in by the employees.
During the reporting period, Essar sponsored Formula
Student teams from the University of Manchester and Aston
University. The Formula Student is an engineering competition
that is organised annually by the Institution of Mechanical
Engineers, London. As a part of our association, the two
university teams visited the Stanlow site to interact with
employees and displayed their entries into the competition.
Essar held a No Smoking information session at the refinery
site to help employees who wanted to quit smoking. The
No Smoking Day is held annually in the UK as a day to raise
awareness of the effects of smoking and help smokers who
are looking to quit. Partnering with the local anti-smoking
organisation, employees could obtain advice and information
on how to give up smoking.
Furthermore, Essar was the proud sponsor of the 31st
annual Four Villages Half Marathon held at the village of
Helsby. The annual event covered the four villages of Helsby,
Mouldsworth, Manley and Dunham-on-the-Hill.
Essar Energy plc Sustainability Report 2012
64
Corporate social responsibility continued
The way forward
In India, nearly 44 million children of school age do not attend
school. In addition, nearly 2.7 million children drop out of
school every year. Giving children access to quality
education around our operational sites thus remains a
commitment of considerable importance for us.
Going forward, we intend to have a deeper and wider
engagement with our stakeholders, including consultations
to develop a better understanding of our communities and
their issues. We aim to design programmes which are
inclusive and have a sense of mutuality.
Partnership will be the key driver for enhancing the value of our
initiatives. We will strengthen our existing partnerships and
also develop and nurture new partnerships with government
agencies, knowledge providers, non-governmental
organisations and local people to achieve success.
We will aim to strengthen and enhance the effectiveness of
our ongoing programmes by introducing innovative tools and
processes. In education, we aim to focus on introducing
alternative and practical educational techniques and
methods in addition to supporting rural schools with basic
infrastructure, books and learning aids. Along with
supporting existing schools, Essar also aims to construct
additional schools in isolated areas that are close to its
operational sites. In healthcare, we will build on expanding
the scope and reach of our healthcare centres, clinics and
programmes. In livelihood, we will develop programmes
which support individuals in maximising their potential, both
economically and personally.
Essar Energy plc Sustainability Report 2012
65
Our memberships
Institution
Scope
Link
ASSOCHAM
The Associated Chambers of Commerce and Industry of India
(ASSOCHAM), India’s premier apex chamber comprises a
membership of over 200,000 companies and professionals across
the country. As an apex industry body, ASSOCHAM represents
the interests of industry and trade, interfaces with Government
on policy issues and interacts with counterpart international
organisations to promote bilateral economic issues.
CCPS is a not-for-profit, corporate membership organisation
within the American Institute of Chemical Engineers (AIChE) that
identifies and addresses process safety needs within the chemical,
pharmaceutical, and petroleum industries. CCPS brings together
manufacturers, government agencies, consultants, academia and
insurers to lead the way in improving industrial process safety.
The CIA represents the chemical and pharmaceutical businesses
across the UK. The Association focuses on influencing policy
agenda across various industry issues and providing advice
and professional services to its members, including training and
handling and implementing new regulations.
CII is a non-government, not-for-profit, industry led and industry
managed organisation, playing a proactive role in India’s
development process. Founded over 115 years ago, it is one of
India’s leading business associations, with a direct membership of
over 8,100 organisations from the private as well as public sectors,
including SMEs and MNCs, and an indirect membership of over
90,000 companies from around 400 national and regional sectoral
associations.
The EEMUA is a non-profit membership organisation based in the
UK that aims to improve the operational, environmental and safety
performance of the industrial facilities and assets of its member
companies through sharing of best practices and experiences
among members.
JOIFF focuses on fire hazard management in the high hazard
industries and other commercial and industrial organisations.
The Forum works towards developing the skills and knowledge of
emergency response personnel through training, shared learning
and technical advisory.
The OCIMF is a voluntary association of oil companies worldwide
which have an interest in shipping of crude oil, petroleum products,
allied products and gas. The Forum’s mission is to promote
safe and environment friendly operations of global oil and gas
movement and improving design and operation standards.
PetroFed is a non-profit organisation representing the hydrocarbon
and related companies in public, private and joint sectors to
promote interest of petroleum industry in line with Public/National
Policies, through a self-regulatory environment.
The UKPIA is an association of nine member companies engaged
in the downstream oil industry in the UK and represents their
interests on a host of common issues such as refining and
distribution and marketing. The association also leads the
industry’s position on various legislative issues.
www.assocham.org
Centre for Chemical Process
Safety
Chemical Industries
Association
Confederation of Indian
Industry
Engineering Equipment and
Material Users Association
Joint Oil and Industry Fire
Forum
Oil Companies International
Marine Forum
Petroleum Federation of India
UK Petroleum Industry
Association
Essar Energy plc Sustainability Report 2012
www.aiche.org/ccps
www.cia.org.uk
www.cii.in
www.eemua.co.uk
www.joiff.com
www.ocimf.com
www.petrofed.org
www.ukpia.com
66
G3.1 content index
Standard Disclosures Part I: Profile Disclosures
1. Strategy and Analysis
Profile
Disclosure
1.1
1.2
Description
Reported
Cross-reference/
Direct answer
Statement from the most senior
decision-maker of the organisation.
Description of key impacts, risks,
and opportunities.
Fully
2–3
Fully
2–3, 20–21
Description
Reported
Cross-reference/
Direct answer
Name of the organisation.
Primary brands, products, and/or
services.
Operational structure of the
organisation, including main
divisions, operating companies,
subsidiaries, and joint ventures.
Location of organisation’s
headquarters.
Number of countries where the
organisation operates, and names
of countries with either major
operations or that are specifically
relevant to the sustainability issues
covered in the report.
Nature of ownership and legal form.
Markets served (including geographic
breakdown, sectors served, and
types of customers/beneficiaries).
Scale of the reporting organisation.
Significant changes during the
reporting period regarding size,
structure, or ownership.
Awards received in the reporting
period.
Fully
Fully
Front Cover
6–7
Fully
20
Fully
Back Cover
Fully
6–7
Fully
Fully
20
54–56
Fully
Fully
22, 28
11
Fully
10
If applicable,
indicate the part
not reported
Reason for
omission
Explanation
If applicable,
indicate the part
not reported
Reason for
omission
Explanation
2. Organisational Profile
Profile
Disclosure
2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
2.9
2.10
Essar Energy plc Sustainability Report 2012
67
3. Report Parameters
Profile
Disclosure
3.1
3.2
3.3
3.4
3.5
3.6
3.7
3.8
3.9
3.10
3.11
3.12
3.13
Description
Reported
Cross-reference/
Direct answer
Reporting period (e.g., fiscal/calendar
year) for information provided.
Date of most recent previous report
(if any).
Reporting cycle (annual, biennial, etc.)
Contact point for questions regarding
the report or its contents.
Process for defining report content.
Boundary of the report (e.g.,
countries, divisions, subsidiaries,
leased facilities, joint ventures,
suppliers). See GRI Boundary
Protocol for further guidance.
State any specific limitations on the
scope or boundary of the report
(see completeness principle for
explanation of scope).
Basis for reporting on joint ventures,
subsidiaries, leased facilities,
outsourced operations, and other
entities that can significantly affect
comparability from period to period
and/or between organisations.
Data measurement techniques and
the bases of calculations, including
assumptions and techniques
underlying estimations applied to
the compilation of the Indicators
and other information in the report.
Explain any decisions not to apply, or
to substantially diverge from, the GRI
Indicator Protocols.
Explanation of the effect of any
re‑statements of information
provided in earlier reports, and
the reasons for such re-statement
(e.g.,mergers/acquisitions, change
of base years/periods, nature of
business, measurement methods).
Significant changes from previous
reporting periods in the scope,
boundary, or measurement methods
applied in the report.
Table identifying the location of the
Standard Disclosures in the report.
Policy and current practice with
regard to seeking external assurance
for the report.
Fully
4
Fully
Fully
Fully
Not applicable as this is
the first report
5
5
Fully
Fully
5, 14
4
Fully
4
Fully
4
Fully
ISO 9001; ISO 14001,
OHSAS 18001, GHG
Protcol, IPIECA
Guidelines, IFRS and
other relevant industry
standards
Fully
Not applicable as this is
the first report
Fully
Not applicable as this is
the first report
Fully
GRI Index
Fully
5
Essar Energy plc Sustainability Report 2012
If applicable,
indicate the part
not reported
Reason for
omission
Explanation
68
G3.1 content index continued
4. Governance, Commitments, and Engagement
Profile
Disclosure
4.1
4.2
4.3
4.4
4.5
4.6
4.7
4.8
4.9
4.10
4.11
Description
Reported
Cross-reference/
Direct answer
Governance structure of the
organisation, including committees
under the highest governance body
responsible for specific tasks, such
as setting strategy or organisational
oversight.
Indicate whether the Chair of the
highest governance body is also an
executive officer.
For organisations that have a unitary
board structure, state the number
and gender of members of the
highest governance body that are
independent and/or non-executive
members.
Mechanisms for shareholders
and employees to provide
recommendations or direction to the
highest governance body.
Linkage between compensation for
members of the highest governance
body, senior managers, and
executives (including departure
arrangements), and the organisation’s
performance (including social and
environmental performance).
Processes in place for the highest
governance body to ensure conflicts
of interest are avoided.
Process for determining the
composition, qualifications, and
expertise of the members of the
highest governance body and
its committees, including any
consideration of gender and other
indicators of diversity.
Internally developed statements
of mission or values, codes of
conduct, and principles relevant to
economic, environmental, and social
performance and the status of their
implementation.
Procedures of the highest
governance body for overseeing
the organisation’s identification
and management of economic,
environmental, and social
performance, including relevant risks
and opportunities, and adherence
or compliance with internationally
agreed standards, codes of conduct,
and principles.
Processes for evaluating the
highest governance body’s own
performance, particularly with
respect to economic, environmental,
and social performance.
Explanation of whether and how the
precautionary approach or principle
is addressed by the organisation.
Fully
19–20
Fully
19
Fully
19
Fully
19, 23
26, 36
20, 25
Fully
19
Fully
19
Fully
13, 21, 27, 37, 57
Fully
20, 38
Fully
20
Fully
20–21
Essar Energy plc Sustainability Report 2012
If applicable,
indicate the part
not reported
Reason for
omission
Explanation
69
4.12
4.13
4.14
4.15
4.16
4.17
Externally developed economic,
environmental, and social charters,
principles, or other initiatives to
which the organisation subscribes
or endorses.
Memberships in associations
(such as industry associations)
and/or national/international
advocacy organisations in which
the organisation: * Has positions in
governance bodies; * Participates in
projects or committees; * Provides
substantive funding beyond routine
membership dues; or * Views
membership as strategic.
List of stakeholder groups engaged
by the organisation.
Basis for identification and selection
of stakeholders with whom to
engage.
Approaches to stakeholder
engagement, including frequency
of engagement by type and by
stakeholder group.
Key topics and concerns that have
been raised through stakeholder
engagement, and how the
organisation has responded to those
key topics and concerns, including
through its reporting.
Fully
65
Fully
65
Fully
16
Fully
16
Fully
17–18
Fully
17–18
Standard Disclosures Part II: Disclosures on Management Approach (DMAs)
G3 DMA
Description
DMA EC Disclosure on Management
Approach EC
Aspects Economic performance
Market presence
Indirect economic impacts
DMA EN Disclosure on Management
Approach EN
Aspects Materials
Energy
Water
Biodiversity
Emissions, effluents and waste
Products and services
Compliance
Transport
Overall
DMA LA Disclosure on Management
Approach LA
Aspects Employment
Labour/management relations
Occupational health and safety
Training and education
Diversity and equal opportunity
Equal remuneration for women
and men
Essar Energy plc Sustainability Report 2012
Reported
Cross-reference/
Direct answer
Fully
Fully
Fully
22
54–56
22
Fully
Fully
Fully
Fully
Fully
Fully
Fully
Fully
Fully
36
44
36
36
36
54
36
36
36
Fully
Fully
Fully
Fully
Fully
23
23
36
23–24
27
Fully
27
If applicable,
indicate the part
not reported
Reason for
omission
Explanation
To be
reported
in
70
G3.1 content index continued
4. Governance, Commitments, and Engagement continued
DMA HR Disclosure on Management
Approach HR
Aspects Investment and procurement practices
Non-discrimination
Freedom of association and collective
bargaining
Child labour
Prevention of forced and compulsory
labour
Security practices
Indigenous rights
Assessment
Remediation
DMA SO Disclosure on Management
Approach SO
Fully
Fully
54
27
Fully
Fully
27
27
Fully
Fully
Fully
Fully
Fully
27
36
27
27
26
Aspects Local communities
Corruption
Public policy
Anti-competitive behaviour
Fully
Fully
Fully
Fully
57
21
65
19
Compliance
DMA PR Disclosure on Management
Approach PR
Aspects Customer health and safety
Product and service labelling
Fully
19
Fully
Fully
54
54
We retain well established
advertising firms who
follow country codes
as applicable
54
54
Marketing communications
Customer privacy
Compliance
Fully
Fully
Fully
Standard Disclosures Part III: Performance Indicators
Economic
Performance
Indicator
Description
Economic performance
EC1
Direct economic value generated
and distributed, including revenues,
operating costs, employee
compensation, donations and other
community investments, retained
earnings, and payments to capital
providers and governments.
EC2
Financial implications and other
risks and opportunities for the
organisation’s activities due to
climate change.
EC3
Coverage of the organisation’s
defined benefit plan obligations.
EC4
Significant financial assistance
received from government.
Market presence
EC5
Range of ratios of standard entry
level wage by gender compared to
local minimum wage at significant
locations of operation.
Essar Energy plc Sustainability Report 2012
Reported
Cross-reference/
Direct answer
Fully
22
Fully
44
Fully
26
Fully
22
Fully
25
If applicable,
indicate the part
not reported
Reason for
Omission
Explanation
To be
reported
in
71
EC6
Policy, practices, and proportion of
spending on locally-based suppliers
at significant locations of operation.
Partially 54
Fully
Procedures for local hiring and
proportion of senior management
hired from the local community at
significant locations of operation.
Indirect economic impacts
Fully
EC8
Development and impact of
infrastructure investments and
services provided primarily for public
benefit through commercial, in-kind,
or pro bono engagement.
Fully
EC9
Understanding and describing
significant indirect economic impacts,
including the extent of impacts.
EC7
Proportion Not
of spending available
on locally
based
suppliers
Currently it
is not part
of our data
collection
system
2013
Local is defined as
same country and most
employees are hired
locally. Please see 33–35
57–64
22
Environmental
Performance
Indicator
Description
Reported
Materials
EN1
Materials used by weight or volume.
Partially 47, 49–53
EN2
Percentage of materials used that are Fully
recycled input materials.
Energy
EN3
Direct energy consumption by
primary energy source.
EN4
Indirect energy consumption by
primary source.
EN5
EN6
EN7
Water
EN8
EN9
Fully
Cross-reference/
Direct answer
EN10
Percentage and total volume of water Fully
recycled and reused.
Biodiversity
EN11
Location and size of land owned, leased, Fully
managed in, or adjacent to, protected
areas and areas of high biodiversity
value outside protected areas.
Essar Energy plc Sustainability Report 2012
Explanation
To be
reported
in
Not
available
Currently it
is not part
of our data
collection
system
2013
Not
Not
reported for available
Raniganj
Currently it
is not part
of our data
collection
system
2013
Currently it
is not part
of our data
collection
system
2013
Mehsana,
Raniganj
materials
47, 49, 50–53
Partially 47, 49–51, 53
Fully
Fully
Reason for
Omission
47, 49–51
Energy saved due to conservation
Fully
45, 47
and efficiency improvements.
Initiatives to provide energy-efficient Partially 45, 47
or renewable energy based products
and services, and reductions in
energy requirements as a result of
these initiatives.
Not
Initiatives to reduce indirect energy
consumption and reductions
achieved.
Total water withdrawal by source.
Water sources significantly affected
by withdrawal of water.
If applicable,
indicate the part
not reported
47, 49, 50–53
No water sources were
significantly affected by
withdrawal of water
48
46
2012
Not
available
72
G3.1 content index continued
Environmental continued
Description of significant impacts of Fully
activities, products, and services on
biodiversity in protected areas and
areas of high biodiversity value outside
protected areas.
EN13
Habitats protected or restored.
Fully
Fully
EN14
Strategies, current actions, and
future plans for managing impacts on
biodiversity.
Fully
EN15
Number of IUCN Red List species
and national conservation list species
with habitats in areas affected by
operations, by level of extinction risk.
Emissions, effluents and waste
EN16
Total direct and indirect greenhouse Fully
gas emissions by weight.
EN17
Other relevant indirect greenhouse
Not
gas emissions by weight.
EN12
EN18
EN19
Initiatives to reduce greenhouse gas
emissions and reductions achieved.
Emissions of ozone-depleting
substances by weight.
EN20
NOx, SOx, and other significant air
emissions by type and weight.
EN21
Total water discharge by quality and
destination.
EN22
Total weight of waste by type and
disposal method.
EN23
Total number and volume of
significant spills.
EN24
Weight of transported, imported,
exported, or treated waste deemed
hazardous under the terms of the
Basel Convention Annex I, II, III, and
VIII, and percentage of transported
waste shipped internationally.
EN25
Identity, size, protected status,
and biodiversity value of water
bodies and related habitats
significantly affected by the reporting
organisation’s discharges of water
and runoff.
Products and services
EN26
EN27
Initiatives to mitigate environmental
impacts of products and services,
and extent of impact mitigation.
Percentage of products sold and
their packaging materials that are
reclaimed by category.
Essar Energy plc Sustainability Report 2012
46
46
46
46
48, 49, 51–53
–
Not
available
Fully
44–45
Fully
For other
At Stanlow ODS is
sites
managed by the site
contractor and reported
as part of legislative
requirement and
reported annually.
Fully
48, 50–52
Fully
48–49
Fully
48, 50–53
Fully
45
Fully
50
Fully
46
Fully
44–46
Fully
We do not have any
products that are
packaged
Currently it
2013
is not part
of our data
collection
system.
Additionally,
this year the
focus was
to calculate
emissions
due to owned
assets.
Not
available
Currently
there is no
system to
consolidate
all ODS
data from
all the sites.
2013
73
Compliance
Fully
EN28
Monetary value of significant fines
and total number of non-monetary
sanctions for non-compliance with
environmental laws and regulations.
Transport
EN29
Significant environmental impacts
Partially
of transporting products and other
goods and materials used for the
organisation’s operations, and
transporting members of the workforce.
Overall
EN30
Total environmental protection
Fully
expenditures and investments by type.
None. There were no
non-compliances in the
reporting period.
54
Scope 3
emissions
Not
available
If applicable,
indicate the part
not reported
Reason for
Omission
Currently it
is not part
of our data
collection
system
2013
45, 49, 53
Social: Labour Practices and Decent Work
Performance
Indicator
Description
Reported
Cross-reference/
Direct answer
Employment
LA1
Total workforce by employment type, Partially 28
employment contract, and region,
broken down by gender.
LA2
Total number and rate of new
employee hires and employee turnover
by age group, gender, and region.
LA3
Benefits provided to full-time
employees that are not provided to
temporary or part-time employees,
by major operations.
LA15
Return to work and retention rates
after parental leave, by gender.
Labour/management relations
LA4
Percentage of employees covered by
collective bargaining agreements.
LA5
Minimum notice period(s) regarding
significant operational changes,
including whether it is specified in
collective agreements.
Fully
29–31
Fully
26
Fully
29
Fully
29
Fully
Minimum notice period is
either as per management
of change procedure
which is part of the
company management
system or as specified in
the bargaining agreement.
Occupational health and safety
Fully
39
LA6
Percentage of total workforce
represented in formal joint
management-worker health and
safety committees that help monitor
and advise on occupational health
and safety programmes.
LA7
Rates of injury, occupational diseases, Partially 42–43
lost days, and absenteeism, and
number of work-related fatalities by
region and by gender.
LA8
Education, training, counselling,
prevention, and risk-control
programmes in place to assist
workforce members, their families,
or community members regarding
serious diseases.
Essar Energy plc Sustainability Report 2012
Fully
26, 40, 58, 61–62
Explanation
To be
reported
in
Third party
Contract
workers by
gender
Not
available
Currently it
is not part
of our data
collection
system
2013
Lost days,
Absentee
rate
Not
available
Currently it
is not part
of our data
collection
system
2013
74
G3.1 content index continued
Social: Labour Practices and Decent Work continued
LA9
Health and safety topics covered in
Fully
formal agreements with trade unions.
Training and education
LA10
Average hours of training per year
per employee by gender, and by
employee category.
LA11
Programmes for skills management
and lifelong learning that support
the continued employability of
employees and assist them in
managing career endings.
LA12
Percentage of employees receiving
regular performance and career
development reviews, by gender.
Diversity and equal opportunity
LA13
Composition of governance bodies
and breakdown of employees per
employee category according to
gender, age group, minority group
membership, and other indicators of
diversity.
Equal remuneration for women and men
LA14
Ratio of basic salary and
remuneration of women to men by
employee category, by significant
locations of operation.
Topics include but not
limited to appointment
of Union appointed
safety representatives,
attendance of union
members at regulatory
refresher training, Permit
To Work refresher
training, Breathing
Apparatus, H2S and
confined space and fire
fighting training.
Fully
32
Fully
23
Fully
25
Fully
19, 28–29
Fully
25
Reported
Cross-reference/
Direct answer
Social: Human Rights
Performance
Indicator
Description
Investment and procurement practices
Partially 27
HR1
Percentage and total number of
significant investment agreements
and contracts that include clauses
incorporating human rights
concerns, or that have undergone
human rights screening.
Partially 27
HR2
Percentage of significant suppliers,
contractors and other business
partners that have undergone human
rights screening, and actions taken.
Partially 24
HR3
Total hours of employee training on
policies and procedures concerning
aspects of human rights that are
relevant to operations, including the
percentage of employees trained.
Non-discrimination
HR4
Total number of incidents of
discrimination and corrective actions
taken.
Essar Energy plc Sustainability Report 2012
Fully
No case in the reporting
period
If applicable,
indicate the part
not reported
Reason for
Omission
Number of
contracts
Not
available
Not part of
our data
collection
system
2013
Number of
contracts
declined
Not
available
Not part of
our data
collection
system
Not part of
our data
collection
system
2013
Number of Not
hours spent available
on human
rights training
during the
induction
training.
Explanation
To be
reported
in
2013
75
Freedom of association and collective bargaining
HR5
Operations and significant suppliers Fully
identified in which the right to
exercise freedom of association and
collective bargaining may be violated
or at significant risk, and actions
taken to support these rights.
Child labour
HR6
Operations and significant suppliers
identified as having significant risk
for incidents of child labour, and
measures taken to contribute to the
effective abolition of child labour.
Fully
Forced and compulsory labour
HR7
Operations and significant suppliers Fully
identified as having significant risk
for incidents of forced or compulsory
labour, and measures to contribute
to the elimination of all forms of
forced or compulsory labour.
Security practices
HR8
Percentage of security personnel
trained in the organisation’s policies
or procedures concerning aspects
of human rights that are relevant to
operations.
Indigenous rights
HR9
Total number of incidents of
violations involving rights of
indigenous people and actions
taken.
Assessment
HR10
Percentage and total number of
operations that have been subject to
human rights reviews and/or impact
assessments.
Remediation
HR11
Number of grievances related to
human rights filed, addressed and
resolved through formal grievance
mechanisms.
The governing law
adequately addresses
the human rights
requirements for
operations and suppliers
identified as exposed to
human rights violation.
The governing law
adequately addresses the
human rights requirements
for operations and
suppliers identified as
exposed to human rights
violation. However, we are
revising our internal audit
system to include human
rights indicators.
The governing law
adequately addresses the
human rights requirements
for operations and
suppliers identified as
exposed to human rights
violation. However, we are
revising our internal audit
system to include human
rights indicators.
Fully
All security personnel
hired directly by the
company are trained
in different aspects of
human rights.
Fully
No case in the reporting
period
Fully
27
Fully
No case in the reporting
period
Social: Society
Performance
Indicator
Description
Local communities
SO1
Percentage of operations with
implemented local community
engagement, impact assessments,
and development programmes.
SO9
Operations with significant potential
or actual negative impacts on local
communities.
Essar Energy plc Sustainability Report 2012
Reported
Cross-reference/
Direct answer
Fully
57–64
Fully
57
If applicable,
indicate the part
not reported
Reason for
Omission
Explanation
To be
reported
in
76
G3.1 content index continued
Social: Society continued
SO10
Prevention and mitigation measures
implemented in operations with
significant potential or actual negative
impacts on local communities.
Corruption
SO2
Percentage and total number of
business units analyzed for risks
related to corruption.
SO3
Percentage of employees trained in
organisation’s anti-corruption policies
and procedures.
SO4
Actions taken in response to
incidents of corruption.
Public policy
SO5
Public policy positions and
participation in public policy
development and lobbying.
SO6
Total value of financial and in-kind
contributions to political parties,
politicians, and related institutions by
country.
Anti-competitive behaviour
SO7
Total number of legal actions for
anti-competitive behaviour, anti-trust,
and monopoly practices and their
outcomes.
Compliance
SO8
Monetary value of significant fines
and total number of non-monetary
sanctions for non-compliance with
laws and regulations.
Fully
57
Fully
Fully
100% business units
are analysed for such
risks.
21
Fully
21
Fully
65
Fully
No contributions were
made in the reporting
period.
Fully
No case in the reporting
period
Fully
No case in the reporting
period
Social: Product Responsibility
Performance
Indicator
Description
Customer health and safety
PR1
Life cycle stages in which health
and safety impacts of products
and services are assessed for
improvement, and percentage of
significant products and services
categories subject to such
procedures.
PR2
Total number of incidents of noncompliance with regulations and
voluntary codes concerning health
and safety impacts of products and
services during their life cycle, by
type of outcomes.
Product and service labelling
PR3
Type of product and service
information required by procedures,
and percentage of significant
products and services subject to
such information requirements.
PR4
Total number of incidents of noncompliance with regulations and
voluntary codes concerning product
and service information and labeling,
by type of outcomes.
Essar Energy plc Sustainability Report 2012
Reported
Cross-reference/
Direct answer
Fully
54
Fully
No case in the reporting
period
Fully
54
Fully
No case in the reporting
period
If applicable,
indicate the part
not reported
Reason for
omission
Explanation
To be
reported
in
77
PR5
Practices related to customer
satisfaction, including results of
surveys measuring customer
satisfaction.
Marketing communications
PR6
Programmes for adherence to
laws, standards, and voluntary
codes related to marketing
communications, including
advertising, promotion, and
sponsorship.
PR7
Total number of incidents of
non-compliance with regulations
and voluntary codes concerning
marketing communications,
including advertising, promotion, and
sponsorship by type of outcomes.
Customer privacy
PR8
Total number of substantiated
complaints regarding breaches of
customer privacy and losses of
customer data.
Compliance
PR9
Monetary value of significant fines
for non-compliance with laws and
regulations concerning the provision
and use of products and services.
Essar Energy plc Sustainability Report 2012
Fully
17,54
Fully
We retain well established
advertising firms who
follow country codes
as applicable
Fully
No case in the reporting
period
Fully
There were no complaints
in the reporting period
Fully
No case in the reporting
period
78
GRI check statement
Essar Energy plc Sustainability Report 2012
79
Independent assurance statement
The Board of Directors and Management
Essar Energy Plc
London, UK.
Independent assurance statement
Ernst & Young Pvt. Ltd. (EY) was retained by Essar Oil
Limited (the Company) to provide an independent assurance
on Essar Energy Plc’s Sustainability Report (the Report) for
the period January 2011 to March 2012. The Company’s
management is responsible for the content of the report,
identification of key issues, engagement with stakeholders
and its presentation. EY’s responsibility, in accordance with
the Company’s management’s instructions, is to carry out a
limited assurance engagement on the Report and to include
specific observations from our work. The assurance
statement should not be taken as a basis for interpreting
the Company’s performance across the scope of issues
covered in the Report. Our responsibility in performing our
assurance activities is to the management of the Company
only and in accordance with the terms of reference agreed
with the Company. We do not therefore accept or assume
any responsibility for any other purpose or to any other
person or organization.
What we did to form our conclusions
Our assurance engagement was planned and performed in
accordance with (ISAE 3000)1 and to meet the requirements
of a Type 2 moderate assurance engagement as defined by
AA1000AS (2008)2. The assurance principles of Inclusivity,
Materiality and Responsiveness, as outlined in AA1000AS
(2008), and GRI G3.1 guidelines were used as criteria against
which we reviewed the Report.
1 International Federation of Accountants’ International Standard for Assurance
Engagements Other than Audits or Reviews of Historical Financial Information
2 AA1000AS (2008) – The second edition of the AA1000 assurance standard from the
Institute of Social and Ethical Accountability.
The scope of the assurance covers sites and indicators
considered relevant to the Company and include:
• Data and information related to the Company’s
sustainability performance for the period 1 January 2011
to 31 March 2012;
• The Company’s internal protocols and processes
related to the collection and collation of sustainability
performance data;
• Review of the GRI – specific core performance
indicators and information reported from the business
and locations mentioned below;
1.Power: Vadinar Power, Vadinar (Gujarat), Essar
Power and Bhander Power, Hazira (Gujarat)
2. Refining and Marketing: Vadinar (Gujarat)
3. Exploration and Production: Raniganj (West Bengal)
4. Corporate Office, Mumbai (Maharashtra)
In order to form our conclusions we undertook the following
key steps:
1. Interviewed select key senior personnel of the Company
to understand the current processes in place for
capturing sustainability performance data as per GRIG3.1 and corporate guidelines, and the progress made
during the reporting period.
Essar Energy plc Sustainability Report 2012
2. Reviewed the Company’s approach to stakeholder
engagement and processes for determining material
issues through interviews and review of associated
documents with issue owners at the corporate office at
Mumbai and manufacturing units at Hazira and Vadinar
and Raniganj.
3. Reviewed selected corporate level processes and
supporting evidence for collecting, consolidating, and
reporting select indicators.
4. Reviewed the local systems and processes in place for
managing and reporting on the Company’s sustainability
activities at the sites visited mentioned above.
Limitations of our review
The assurance scope excludes:
• Aspects of the Report and data/information other than
those mentioned above;
• Data and information outside the defined reporting period
i.e. 1 January 2011 to 31 March 2012;
• The Company’s statements that describe expression of
opinion, belief, aspiration, expectation, aim or future
intention provided by the Company;
• Review of the financial performance included in the Report;
Our conclusions
On the basis of our review scope and methodology, our
conclusions are the following:
• Inclusivity: We reviewed how the Company has been
engaging with its stakeholders across the business for
developing its sustainability approach. We are not aware
of any matters that would lead us to conclude that the
company has not applied the inclusivity principle in
developing its approach to sustainability.
• Materiality and Responsiveness: We are not aware of any
material aspects concerning the Company’s sustainability
performance which have been excluded from the Report.
Nothing has come to our attention that causes us to believe
that the Company has not applied its processes for
determining material issues to be included in the Report.
• Reliability of performance information: We reviewed the
accuracy and completeness of sustainability information in
the Report. Nothing has come to our attention that causes
us not to believe that the data has been presented fairly, in
material respects, in keeping with the GRI-G3.1 guidelines
and the Company’s reporting principles and criteria.
Observations and opportunities for improvement
Key additional specific observations have been outlined
below. These observations do not affect our conclusions
on the Report set out above.
• The Company has demonstrated effort to prepare the
Report in keeping with the GRI-G3.1 reporting guidelines
• Company has designed a new internal portal for reporting
of its CSR Initiatives which provides a consolidated
overview of the activities taken up across locations
along with the impact / touched beneficiary data. Thus
highlighting Company’s footprint in the community.
80
Independent assurance statement continued
• For information pertaining to purchased energy at Vadinar
Refinery, data is being tracked from two sources namely,
MRSS for internal data management and invoices from
the electricity suppliers. Presently the MRSS captured
data has been reported in the Sustainability Report. The
Company may consider aligning both these information
sources as there is a difference between the two sets
of data;
• Similarly, for data pertaining to safety, difference between
the data at the site and that reviewed at the corporate
office was evidenced. The data at most of the sites were
maintained through internal systems and reported to
corporate office on a monthly basis, as MIS (Management
Information System) reports. It was seen that in some
cases amendments in the data following submission of
MIS reports were not communicated to the corporate
office, thus leading to observed data variation. The
Company may consider aligning its safety systems such
that access is made available to the safety data on a
regular, if not real time, basis both to the site and the
corporate office.
Our assurance team and independence
Our assurance team, comprising of multidisciplinary
professionals, has been drawn from our climate change and
sustainability network and undertakes similar engagements
with a number of significant Indian and international
businesses. As an assurance provider, EY is required to
comply with the independence requirements set out in
International Federation of Accountants (IFAC) Code of
Ethics 3 for Professional Accountants. EY’s independence
policies and procedures ensure compliance with the Code.
3 International Federation of Accountants (IFAC) Code of Ethics for Professional Accountants.
This Code establishes ethical requirements for professional accountants. The guidance
related to network firms was updated in July 2006.
for Ernst & Young Private Limited
Sudipta Das
Partner
24 July 2012
Kolkata
Essar Energy plc Sustainability Report 2012
81
Glossary
BIS
Bureau of Indian standards
bpd
barrels of crude oil (159 litres by volume) per day
BPoL
Bhander Power Limited
BSI
British Standards Institution
CBM
coal bed methane refers to the gas (principally methane) which is found in coal seams
CDM
Clean Development Mechanism
CDP
Carbon Disclosure Project
CER
certified emission reductions
CNG
compressed natural gas
CO2
carbon dioxide
CSR
corporate social responsibility
DNV
Det Norske Veritas
EEPLN
Essar Exploration and Production Limited Nigeria
Essar Energy or the Company
Essar Energy plc
Essar Oil
Essar Oil Limited
Essar Oil UK
Essar Oil (UK) Limited
Essar Power
Essar Power Limited
the FoundationEssar Foundation, the entity which responsible for delivering CSR initiatives across the whole
Essar Group
GHG
greenhouse gas
GPCB
Gujarat Pollution Control Board
GUVNL
Gujarat Urja Vikas Nigam Limited, the leading power transmission and distribution company in Gujarat
HSE
health, safety and environment
kWh
kilowatt hours
LPG
liquefied petroleum gas
LTI
lost time injury
mmt
million metric tonnes
mmtpa
million metric tonnes per annum
MW
Megawatt
NOx
nitrogen oxide
PPA
power purchase agreement
PSU
public sector undertaking
SOx
sulphur oxide
tcf
trillion cubic feet
TSDF
Treatment, Storage and Disposal Facility
UKAS
United Kingdom Accreditation Service
UNFCCC
United Nations Framework Convention on Climate Change
VOTL
Vadinar Oil Terminal Limited
Essar Energy plc Sustainability Report 2012
Registered office:
Essar Energy plc
3rd Floor
Lansdowne House
57 Berkeley Square
London W1J 6ER
T: +44 (0) 20 7408 8760
www.essarenergy.com
Head office:
Essar Energy plc
6th Floor
DCDM Building
10 Frere Felix de Valois Street
Port Louis
Mauritius
T: +230 202 3136