Health and Safety

Management Approach

Our health and safety management approach has historically been decentralized, with each division/operating site applying its own expertise and experience to identifying hazards and risks, implementing controls, monitoring performance, and assigning appropriate accountabilities. We are now establishing enterprise-wide standards, aligned with international best practice, as part of our commitment to continuous improvement, operational excellence and a stronger safety culture.

To clearly articulate our expectations for health and safety performance across the business, we have identified the need for a general health and safety standard, which will be based on the requirements of Towards Sustainable Mining, and specific fatality prevention standards – such as Light Vehicles, Heavy Mobile Equipment, Working at Heights, and Confined Spaces, among others – which have been or are currently being implemented. We also have a Significant Potential Incident Standard in place. It requires tracking and specific management actions for any workplace incident that, under slightly different circumstances, could have resulted in a fatality.

The full suite of health and safety standards is being developed and implemented, in accordance with our multi-year implementation schedule.

In addition to implementing standards, we conduct safety culture assessments at our operating sites, and track a series of leading indicators designed to increase hazard awareness, improve performance and strengthen safety culture. These indicators include leader walks around sites to set the tone from the top, proactive health and safety communication activities, workplace inspections and training hours. At the corporate level, we monitor health and safety performance through regular executive reviews, peer comparisons and independent assessments.

We are working to embed these initiatives deep within the organization. Ultimately, experience has taught us that everyone must take ownership of safety and be comfortable having safety-related conversations as a matter of course in their everyday activities.

Sherritt launched an enterprise-wide Operational Excellence (OE) program in 2015. OE is a business-improvement process that focuses on team-based problem solving and process improvement, leading to meaningful results, including a safer, more efficient workplace. To date, more than 200 employees from the corporate office, Moa, Fort Saskatchewan and Ambatovy have participated in OE events, including 50 project teams focusing on areas such as logistics, maintenance and production. Examples of the types of results achieved through OE so far include:

  • Rearranging the leach maintenance shop at the Fort Saskatchewan site to reduce the walking distance for millwrights undertaking pump repairs from 2.35 km per repair to 0.45 km
  • Reduction of truck refuelling times at Moa to save approximately $500,000 per year
  • Identification of business improvements that could result in cost savings valued at $24 million for Ambatovy

OE projects will continue as part of the company’s overall objective to create a safer, more efficient workplace. Refer to this case study for more information on those that occured in 2017.

Performance

Fatalities

In 2017, Sherritt’s divisions did not experience any fatalities. 2013 was the last year we reported zero community and/or work-related fatalities.

We continue to focus on building a strong safety culture, including removing or reducing fatal risks at the sites and unsafe behaviours. Our target continues to be achieving zero harm for our employees, contractors, and community members in the areas in which we operate throughout 2018.

Lost Time and Recordable Incidents

During the year, we reported 17 lost time incidents (which are recorded when a worker misses at least one shift following a workplace injury) and 35 recordable incidents (which include injuries resulting in death, lost time, restricted work, medical treatment beyond first aid, or loss of consciousness) across the company. These statistics mark a slight increase over 2016 performance.

Our overall safety performance in 2017 continued to be peer-leading, with a lost time incident index (total number of lost time injuries per 200,000 work hours) of 0.12 (compared to 0.11 in 2016) and a total recordable incident index (total number of recordable injuries per 200,000 work hours) of 0.26 (compared to 0.25 in 2016), both of which are peer- and industry-leading results.

Lost Time Incident (LTI) Index
* LTI index = # LTI * 200,000/SUM (exposure hours for the year)
Total Recordable Incident (TRI) Index
* TRI rate = # TRI * 200,000/SUM (exposure hours for the year)

Ambatovy and the Fort Site have had site safety rules implemented for a number of years. In 2017, Moa developed the “Golden Rules for Safety” and rolled them out to employees through training and awareness. During the course of the year, OGP made progress on developing their own “Cardinal Rules for Safety”, which are subject to approval by the joint venture partner and expected to be disseminated in 2018.

Significant Potential Incidents

Sherritt records significant potential incidents (SPIs) – defined as actual or near-hit incidents that, under different circumstances, could have reasonably resulted in at least one fatality – in conformance with our standard, which had been developed in 2015. There were 31 SPIs reported over the course of the year, which is comparable to the 29 reported in 2016. They were investigated in the same manner as fatalities. Detailed investigations to identify the cause(s) of each incident were completed, and actions to prevent recurrence were identified and implemented. The most common types of SPIs in 2017 continued to be related to light vehicles, heavy mobile equipment and working at heights. As a result, we are focusing on efforts to identify and strengthen critical controls in these areas at all our operating sites. Examples of specific SPIs from the year include:

  • A civilian light vehicle crossed the centre line in Cuba and collided with a company vehicle.
  • A bulldozer operating on site rolled over.
  • An employee worked on an electrical box without isolating the electrical supply.
  • An employee fell through poorly maintained scaffolding without proper fall protection equipment.
  • A truck reversed with poor visibility and no spotter, nearly colliding with an employee.

“We are committed to everyone – employees, contractors and community members – going home healthy and without injury every day. Every individual has a role to play in this, and by making a personal commitment to our own safety and that of our co-workers and neighbours, we will achieve safety together. We must work to continually improve. A safe operation is also an excellent operation.”

– Steve Wood, Chief Operating Officer

Public Safety

Management Approach

As good neighbours, it is critical to us that we ensure our operations, transportation activities and other business practices avoid unintended or adverse effects on the public. We follow the regulations of our operating jurisdictions, strive to meet the expectations of nearby communities and regularly engage and collaborate with local stakeholders on health and safety–related risk awareness and emergency preparedness.

There are natural links between public safety and effective community engagement. Through engagement, we work to understand public concerns and safety risks, evaluate steps we can take to reduce risk, help clarify misunderstandings and dispel misinformation, and, when appropriate, collaborate with communities on initiatives that make all of us safer. Through these efforts, we contribute to building a strong safety culture in the communities near our operating sites.

One of the most important ways we protect both communities and our business is through effective emergency preparedness and response planning. At our operating sites, we develop plans, grounded in scenario/risk assessments, to protect the public, the environment and infrastructure, in the event of a significant incident. We also implement actions to limit the severity of impacts, should an incident occur.

In Madagascar and Canada, Sherritt is responsible for leading emergency response efforts at its sites, while in Cuba we support our joint venture partners and the government authorities who take the lead in responding to operational emergencies. Refer to this case study for more information on the Cuban approach. Whenever possible, we coordinate closely with emergency responders in both preparedness and response activities, and we regularly conduct joint training exercises with them.

In 2017, Sherritt developed an enterprise-wide Crisis Management Standard that includes emergency response. The standard is influenced by Canadian and international practices, including the Mining Association of Canada’s Towards Sustainable Mining (TSM) Crisis Management Planning Protocol, the Incident Command System’s (ICS) management approach, and the United Nations Awareness and Preparedness of Emergencies at the Local Level (APELL) Programme.

Performance

Emergency Response Planning and Training

All operating sites have up-to-date emergency response plans in place, and conducted some form of crisis/emergency preparedness training in 2017.

Every site has established timelines to review emergency response plans and conduct training exercises at least annually, and to ensure plans are up to date and applicable, and response teams are prepared.

The Fort Site focused on the delivery of Incident Command System (ICS) training levels 100, 200 and 300 throughout the course of the year. In December, a tabletop exercise was conducted utilizing the ICS and Incident Management Team (IMT) training. The last full-scale emergency simulation exercise took place at the Fort Site in October 2016, which involved more than 50 emergency responders, the municipality of Fort Saskatchewan, neighbouring facilities, and the Northeast Region Community Awareness Emergency Response association (a mutual aid emergency response group).

In August, Ambatovy conducted a simulation exercise to test the Emergency Response Plan. The scenario involved a dam break at the Tailings Management Facility, which caused the activation of the Prefectural Emergency Response Team, and included participation of many local and regional stakeholders, including: National Office for Disaster Risk Management, Ministry of Defence, Ministry of Health and others. Ambatovy provided financial and logistical support for first responder training for emergency situations at the mine site for members of the Regional Committee for Industrial Risk Management. It is with this group and the National Office for Disaster Risk Management that the APELL Programme is implemented and monitored.

In Cuba, multiple training exercises occurred in 2017 at our Moa mine site, as well as our Oil & Gas and Power facilities. At Boca and Puerto Escondido, man down and fire drill training was completed. Exercises such as these are part of the regular preparedness training in the event of an incident. These drills also inform any updates needed to plans.

Post-Incident Community Support

In 2017, once again, there were two storm events that presented a threat to the health and safety of our employees, operating sites and the surrounding communities.

Category 4 Tropical Cyclone Enawo made landfall in northeast Madagascar in early March and then moved south as a tropical depression, causing widespread flooding in the eastern half of the country. An estimated 81 deaths resulted, and more than 430,000 people were affected. Ambatovy made $200,000 of the Social Investment Fund available for recovery projects, and Ambatovy’s partners, including Sherritt’s corporate office, donated tens of thousands of dollars directly to on-the-ground relief efforts, which included providing those affected with clean drinking water, shelter and access to basic services. In addition, Ambatovy made an aircraft available for transporting relief supplies and employees volunteered their time to help clear up local communities impacted by the cyclone. In partnership with Medair, Ambatovy’s partners made a donation to reconstruct and rehabilitate refuge buildings in the hardest hit region.

A very powerful storm, Hurricane Irma, travelled east to west across Cuba September 7–10, 2017. Once again, the preparation and response actions of the Cuban Civil Defense authority and our partner, Cubaniquel, prevented fatalities and serious injuries in the country and at our Moa JV and OGP sites on both ends of the island. There was serious property damage across the country as a result of high winds and flooding, and reports of up to 10 deaths. Damages to homes, hospitals, and the agriculture and tourism sectors were widespread, and costs were initially estimated to be more than $2.2 billion (USD). The hurricane’s path largely avoided Moa, but did impact all OGP sites. However, impacts to operations were minimal, as all sites were prepared in accordance with the Hurricane Readiness Procedures Manual, which incorporated lessons learned from previous storms. Both Moa and OGP responded on the ground by clearing debris, providing clean drinking water, assisting in equipment repair, and, in the case of OGP, re-establishing normal power operations for the Cuban energy grid in a timely manner. In addition, Sherritt donated $50,000 to the United Nations Development Programme (UNDP) and the World Food Programme (WFP) to aid relief efforts and worked directly with the Cuban government to donate materials for reconstruction.

Stakeholder Awareness and Collaboration

Our operating sites continue to engage with local communities on risk awareness and emergency response.

While many of us associate the plague with the Middle Ages, it remains active in Madagascar. Annual outbreaks are not uncommon. In fact, in 2017, there was an occurrence of the pneumonic form of the infection, and it affected rural and urban areas in the country. To aid in efforts in tempering the spread of the infection, Ambatovy donated personal protective equipment – including masks, gloves and goggles – to the University Hospital in Analakininina. This helped to ensure that medical staff and patients were well protected. In addition, Ambatovy provided regular information updates to employees and monitored them for signs of fever and other symptoms. In addition, following road construction in the regional capital Alaotra Manoro, Ambatovy organized road safety training for taxi drivers and installed roads signs and safety markings as part of an initiative financed through the Social Investment Fund. In addition, public fire prevention awareness was conducted in the areas surrounding the mine and plant sites.

In Moa, we proceeded with the refurbishment of two public health clinics near the mine site. Permits were issued in 2016. Construction will continue into 2018, when it is anticipated one or both of the clinics will be opened to the community.

The Fort Saskatchewan site continued participating in key multi-stakeholder forums related to crisis and emergency preparedness. Our team there works actively with the Northeast Region Community Awareness Emergency Response (NRCAER) association. In 2017, through NRCAER, Sherritt provided Dangerous Goods training to the local Fort Saskatchewan RCMP detachment, resulting in increased awareness of safety risks associated with industrial sites. We also work with Life in the Heartland on building community awareness about operational risks. It is common practice for the employees at the site to meet with local authorities and first responders to update emergency scenario plans and response procedures.

Site Security

Management Approach

We are committed to safeguarding our people, assets, reputation and the environment, while respecting the rights of the public. We have an enterprise-wide policy that outlines our principles for creating a safe and secure business environment and for conducting security operations in compliance with local, national and international legal requirements, security standards and law enforcement principles.

Our management approach to site security involves identifying, understanding and minimizing security threats and risks; working with local law enforcement authorities to respond appropriately to security incidents; investigating incidents and complaints and taking actions to minimize the probability of recurrence; and implementing relevant international principles, including the Voluntary Principles on Security and Human Rights (VPSHRs).

We are a member of the Voluntary Principles Initiative. Our decision to formally join the Initiative was based on our investment in Madagascar, a country with governance concerns, high rates of poverty and potential for community-company conflict. To mitigate these risks, we wanted to formally align our policies and Ambatovy’s security operations with the highest international standard for security and human rights. We have an enterprise-wide security policy and management system for meeting the requirements of the Voluntary Principles. The system – which supports flexible application to account for the disparate risks and realities of each of our operating environments – is based on the following procedures for governing our behaviour and response to different security incidents:

  • Entering agreements with private security service providers
  • Entering agreements with public security forces
  • Reporting and investigation of security-related incidents
  • Use of force
  • Protection of providers of confidential information
  • Apprehension and transfer of suspects to public custody

Ambatovy and Fort Saskatchewan have implemented much of the Voluntary Principles requirements, and the other divisions/operating sites will endeavour to address gaps over the next few years. Application in Cuba requires a more nuanced and phased approach, including familiarizing our joint venture partners and the Cuban government with the Voluntary Principles before determining how best to move forward. As a new member of the Mining Association of Canada in 2017, MAC member companies that rely upon private or public security forces have committed to implementing a human rights and security approach consistent with the VPs and based on a determination of risk at mining facilities that they control. Furthermore, MAC members with international mining operations will report on their implementation annually in MAC’s TSM Progress Report.

Our operating sites employ full-time and contract security personnel. We believe that competence and training are the most important elements of effective security management and we evaluate all personnel carefully before selecting them for security detail. To ensure that our interactions with the public are respectful, we provide values- and expectations-based training, including security and human rights training, to our security personnel. At Ambatovy, we have a memorandum of understanding, which was recently reviewed and updated, with the public security force, and require security and human rights training for public security officials who patrol our sites.

Performance

Security Incidents

In 2017, the theft of fuel and other materials at Ambatovy was the only noteworthy security concern across Sherritt. However, while the severity of incidents did not increase, there was a notable increase in the number of incidents at Ambatovy overall. This is partially the result of a change in approach by new security management and improvements in reporting across the sites, including a new web based incident management system, but it remains an ongoing security issue to be monitored and managed as a result of operating in a country where poverty rates are high. In 2017, Ambatovy recorded 305 thefts, up from 109 in 2016.

Our operations in Cuba and Canada – two jurisdictions with well-established systems of governance – did not record any significant security incidents in 2017.

Security and Human Rights

In 2017, there were no security incidents involving allegations or claims of human rights’ abuse anywhere across Sherritt. Ambatovy’s security and human rights training results remained comparable to 2016: 75% of full-time security personnel, 90% of contract security personnel, and 100% of public security officials based near our operations were trained. In 2017, new private security contracts were issued with the Voluntary Principles embedded into those contracts. Throughout the year, Ambatovy also participated in security- and human rights–related workshops, training sessions and awareness-building events with other members of the Voluntary Principles Initiative, including Search for Common Ground, and the International Committee of the Red Cross. Learn more about Ambatovy’s efforts to conform to the Voluntary Principles on Security and Human Rights (VPSHR) in this case study.

At Fort Saskatchewan, security officers continued to receive basic human rights training through the provincial licensing process in Alberta. The site also trained 100% of its security personnel on the Voluntary Principles, as well as private security contractors and emergency services personnel. In 2017, Fort Site’s security personnel completed additional training in non-physical conflict resolution. As well, requirements related to Voluntary Principles were incorporated into the contract with its private security provider.

In 2017, Sherritt staff met with Cuban government officials to present the Voluntary Principles and received no objections to engage directly with the state-run security provider to introduce them to the initiative.

Sherritt’s divisions continued to use standardized tools for conducting a site-level gap analysis against the company’s Security and Human Rights Standard and implementing plans to address identified gaps. The Standard is part of Sherritt’s broader Sustainability Framework Implementation Plan for designing and implementing company-wide minimum standards across sustainability-related functions, including security.

Our 2017 annual report to the Voluntary Principles on Security and Human Rights is available online.

Employee Relations

Management Approach

Our business cannot operate and thrive without a dedicated, experienced and engaged workforce. We are committed to listening to and understanding the needs and challenges of our employees; taking action to improve the workplace; and supporting employees in reaching their potential. (For the purpose of this report, employee relations include employee engagement, talent development, labour rights, workplace diversity, and protection against workplace discrimination and harassment.)

Effective and regular two-way communication with employees is the foundation of our employee relations programs. Every two years, we conduct an employee survey to evaluate engagement across the business. Questions touch on leadership, culture, behaviours, professional development, and communication, among other areas. Senior managers in the corporate office and divisions are held accountable for implementing plans to address key findings.

Ensuring the right programs are in place to support employee development at all levels is crucial for Sherritt’s long-term success and succession planning. In spite of the challenging commodity price environment, we remain committed to employee training and development. We provide a range of technical, management and leadership training in Canada, Cuba and Madagascar. Whenever possible, we leverage opportunities to bring different groups together to build cross-organizational networks and strengthen our shared values and culture.

Our compensation programs are aligned with Our Purpose and Our Promises, fostering a company-wide culture of accountability and pay-for-performance compensation. All salaried employees are eligible for an annual short-term incentive award expressed as a percentage of their base salary. The award is based on company-wide, divisional and individual performance, and the amounts vary depending on the annual performance of each component. Performance goals are established at the beginning of the year, and are assessed quantitatively and qualitatively. Organizational performance is communicated quarterly, and each manager is accountable for providing individual performance feedback to immediate team members.

Across our company, we have both unionized and non-unionized workforces. We recognize and encourage the right to engage in free association and collective bargaining. As with all of our relationships, we strive for productive and mutually beneficial outcomes in our discussions with employees and organized labour representatives. When labour grievances do occur, we investigate and work to reach an acceptable solution for all parties concerned. In certain cases, we may opt for third-party arbitration. Once grievances have been resolved, the management team evaluates all of the issues that were raised and determines what process improvements, if any, can be made to ensure we learn from each one.

We have a policy for workplace discrimination and violence prevention. There are discrete policies on human rights, business ethics and diversity that meet legal requirements and best practices. We are committed to continuous improvement in these areas, with a growing focus on diversity and inclusion. In Cuba, all national workers are hired through an employment agency and can report any issues of discrimination. The agency will undertake an investigation in conjunction with management. Any actions taken are governed by the same types of standards that would apply in Canada.

Performance

Employee Engagement

Sherritt conducted an employee engagement survey in 2017. The participation rate was 77%. When comparing results with previous surveys, the divisions made an overall improvement in engagement for our front-line employees. In most groups, we also saw an improvement in employees’ assessment of “Manager Effectiveness”, which has been an area of focus for the company. The next survey is scheduled for 2019, but one of our priorities for 2018 is to look at a new approach to gathering employee feedback that will allow us to measure employee engagement much more frequently.

Organized Labour, Grievances and Strike Action

Approximately 380 of Sherritt’s employee base is unionized. At our Fort Saskatchewan site, unionized employees are represented by Unifor Local 530A. (Sherritt and Unifor have had an effective partnership for more than 60 years without a labour interruption.) In April 2016, a new three-year agreement came into effect. In Cuba, all organized labour considerations are mandated by the Cuban state and many of the systems and tools that are common in other jurisdictions, including collective bargaining, are not employed there.

Our Fort Saskatchewan site resolves all grievances per the process described in the Collective Agreement and the Labour Relations Act of Alberta. This site has not had an arbitration heard by a third party for more than 15 years.

A process that began in previous years to put a collective bargaining process in place at Ambatovy advanced in 2017. In May, a collective bargaining framework was signed with the Works Council Members, and a list of employee aspirations was received in October 2017. Management is currently analyzing each request in preparation for the first collective bargaining session in the first quarter of 2018.

Our Fort Saskatchewan site received 30 grievances relating to labour practices in 2017, an increase over last year. Nineteen of the 30 grievances were resolved during the calendar year and those that were not will be managed in accordance with the procedures set out in the collective agreement.

At Ambatovy, eight grievances relating to working conditions were reported in 2017, which is comparable to the previous two years of reporting. Four complaints were against a supervisor or co-worker, three cases related to health and safety, and one case regarded a job evaluation. All eight cases were addressed and resolved during the calendar year.

There were no work stoppages as a result of labour unrest in 2017.

Fourteen percent of Sherritt’s workforce is female. In our Canadian locations (Fort Saskatchewan, Calgary and Toronto), our workforce is 19.5% female. At Ambatovy, 13% of workers are female. In Cuba, our main workforce is contracted by the state and thus, Sherritt is not involved in hiring decisions.

Although our overall gender-diversity percentage is at the upper end of the mining and energy sectors, we remain committed to building a highly inclusive culture, in order to attract and retain a diverse workforce.

In 2016, our President and CEO joined the “30% Club Canada”, whose goal is to ensure that at least 30% of board seats in the country are held by women by 2019. In 2017, Sherritt also became a member of Catalyst Canada and signed the Catalyst Accord 2022, pledging to increase the average percentage of women on boards and women in executive positions in corporate Canada to 30% or more by 2022. We conducted an analysis of both our internal environment and the broader industry to set a current-state baseline for diversity and inclusion at Sherritt. This analysis helped to identify challenges and opportunities, which were used to inform a two-year plan to establish the groundwork for a more diverse and inclusive work environment. In 2017, we established a company-wide Diversity and Inclusion Steering Committee, as well as local working groups to better support initiatives at the site level, and began a full review of policies, programs and processes to identify any potential bias.

“Just as we are focused on strengthening our balance sheet, we are also focused on strengthening our organization. Diverse and inclusive workplaces are stronger, more resilient workplaces. Through a thorough organizational design review and a focus on improving gender metrics at all levels, we believe we will position Sherritt to function better.”

– David Pathe, President and Chief Executive Officer