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 identify hazards and risks, implement controls, monitor performance, and assign appropriate accountabilities. Over a number of years, we have established enterprise-wide standards and 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 are in a multi-year process of developing a general health and safety standard, 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. This phased approach to implementation is due to the different levels of maturity of our sites. 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 are being implemented, continually assessed and reviewed as new risks emerge and our sites progress in the management of health and safety.

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.

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 its 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 business transformation, 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:

  • Improved cycle time on safe work permits at the Fort Saskatchewan site resulted in a forecasted transition of at least 7,000 hours of non-value-added work to value-added work. This achievement was initiated through the site’s Lean program that supports employee implementation of continuous improvement projects
  • 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
  • Improved visible-felt leadership interactions at Moa leading to an additional 200 hours per year spent by supervisors in work areas seeking ways to make the work safer.

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 occurred in 2018.

Performance

Fatalities

In 2018, Sherritt’s divisions did not experience any 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 2019.

Lost Time and Recordable Incidents

During the year, we reported six lost time incidents (which are recorded when a worker misses at least one shift following a workplace injury) and 24 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 significant improvement over our 2017 performance.

Our overall safety performance in 2018 continued to be peer-leading, with a lost time incident index (total number of lost time injuries per 200,000 work hours) of 0.04 (compared to 0.12 in 2017) and a total recordable incident index (total number of recordable injuries per 200,000 work hours) of 0.15 (compared to 0.26 in 2017), 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)

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. There were 35 SPIs reported over the course of the year, which is comparable to the 31 reported in 2017. The SPIs were investigated to identify the cause(s) of each incident, and actions to prevent recurrence were identified and implemented. The most common types of SPIs in 2018 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.

In previous years, a number of SPIs regarding light vehicles were recorded at OGP. In response, OGP updated its DriveRight training program for site vehicles in 2018. DriveRight monitors drivers' performance and, most recently, has introduced a demerit system to help change bad habits.

“At Sherritt, we understand that remaining relevant and competitive in fast-changing global markets requires Operational Excellence. This is an organizational mind-set that empowers employees to shine a light on, and eliminate, waste in all its forms. The result is continuous improvement across the business, whether it be related to sustainability, production, or costs. Sherritt has been around for over 90 years – achieving Operational Excellence will help us be around for another 90.”

– Tim Dobson, Senior Vice President, Metals

Public Safety

Management Approach

As good neighbours, it is critical to us that we ensure our activities and 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. 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.

To minimize the risks of a catastrophic event that could impact a local community, the company has embarked on a multi-year program to implement process safety management systems at all sites. These systems will ensure that major hazards are identified and controlled, changes are appropriately managed, process and equipment integrity programs are in place, operating procedures are place, and there is adequate communication and training, among many other elements. The company’s Cuba operations are aligning with Cuba's Resolution 148 for major hazard installations, the Fort Site will align with the new Canadian CSA Z767-17 process safety management standard, and Ambatovy has aligned with the U.S. OSHA 1910.119 process safety management of highly hazardous chemicals standard.

Another important way we mitigate potential impacts to 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.

Sherritt’s enterprise-wide Crisis Management Standard is informed 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 2018.

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 subscribes to the Incident Command System (ICS) management framework for emergencies and is carrying out a multi-year plan to train and conduct field exercises for the local response team. Additionally, the Fort Site partners with the Northeast Region Community Awareness Emergency Response (a mutual aid emergency response association) to engage with the public and local industry partners to raise awareness of community safety risks. In 2018, the Fort Site participated in Emergency Preparedness Week and hosted its second annual Sherritt Family Fire Safety Day to educate the public on how to prepare for emergencies.

In 2018, Ambatovy participated in an emergency simulation exercise organized by the Prefecture of Toamasina and Atsinanana Region. The exercise simulated a major sulfur dioxide incident in a nearby community. In previous years, training focused on tailings dam breaches, involving local and regional stakeholders in response planning, including the National Office for Disaster Risk Management, Ministry of Defence, Ministry of Health and others.

In Cuba, multiple training exercises occurred in 2018 at our Moa mine site, as well as our Oil & Gas and Power (OGP) facilities. Exercises such as these are part of regular preparedness training in the event of an incident. These drills also inform any needed updates to plans.

Post-Incident Community Support

Sherritt’s Cuba and Madagascar operations are located on island nations, prone to seasonal storm activity. In 2018, Madagascar experienced one cyclone, Ava, which impacted the island between the end of December and beginning of January. Ambatovy collaborated with regional authorities, UN agencies and local partners to assist impacted communications through donations of fuel and clean-up support.

Stakeholder Awareness and Collaboration

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

In Moa, the refurbishment of a local community health clinic was completed, and work progressed on a second one. Refer to this case study to learn more about Sherritt’s community investment program in Cuba.

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). For example, in 2018, the Fort Site worked with a neighbouring chemical facility and supplier to strengthen its emergency response capabilities. We also work with Life in the Heartland on building community awareness about operational risks. It is common practice for 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:

  • Entering into agreements with private security service providers
  • Entering into agreements with public security forces
  • Reporting and investigating security-related incidents
  • Use of force
  • Protecting providers of confidential information
  • Apprehending and transferring suspects to public custody

Ambatovy and Fort Saskatchewan have implemented much of the Voluntary Principles requirements. 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. 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 the mining facilities they control. Furthermore, MAC members with international mining operations 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 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 with the public security force, and require security and human rights training for public security officials who patrol our sites.

In 2016, Ambatovy signed an umbrella agreement with the regional authorities around its operations and the United Nations System in Madagascar to work together to contribute to the social and economic development priorities of the region, including the promotion and integration of the company’s commitment to human rights–related principles – such as the VPSHR, among others – in order to effectively analyze and address human rights risks.

Performance

Security Incidents

Sherritt’s operating sites reported a 32% year-over-year reduction in total number of security incidents in 2018. The majority of reported incidents are theft occurring at Ambatovy’s operations, where high levels of poverty are the major driver for this activity; however, there were some more serious interactions of a higher order of severity involving muggings of employees and assaults against guards. Sherritt takes these incidents extremely seriously, particularly when the health and safety of employees and community members is threatened, and each occurrence was investigated thoroughly. The reduction is attributed to theft control measures and changes in security management practices implemented in 2017 and 2018, and follow-up investigations suggested that these improved management practices also helped prevent serious incidents from becoming more so.

Our operations in Cuba and Canada – two jurisdictions with well-established systems of governance – did not record any significant security incidents in 2018.

Security and Human Rights

In 2018, there were no security incidents involving allegations or claims of human rights abuse anywhere across Sherritt. Ambatovy’s security and human rights training results improved compared to 2017: 85% of full-time security personnel, 100% of contract security personnel, and 100% of public security officials based near our operations were trained. In 2018, an updated Memorandum of Understanding was signed with the public security in Madagascar, including commitments around training and awareness of the VPs. 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 2018, Sherritt commissioned an independent assessment of the policies, procedures, and practices used by the Fort Site to verify that the systems comply with the requirements of the Voluntary Principles on Security and Human Rights (VPSHR) and UNICEF’s checklist on Security and Children’s Rights, as five years had passed since the original baseline assessment and beginning of implementation. Overall it was found that the Fort Site has made significant advancements in implementing the VPSHR on site since the baseline, achieving a completion score of 89%. While Canada remains a low-risk jurisdiction for human rights infractions, Sherritt believes the Fort Site has demonstrated clear value from application of the VPs in this context.

In 2018, the Fort Site was invited to work in partnership with the local Royal Canadian Mounted Police detachment on the development of a security management best practice document for industrial sites in the regions. This work is expected to continue into 2019.

Sherritt’s Security and Human Rights Standard includes standardized tools for conducting site-level gap analyses. 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. In 2019, Sherritt’s Human Rights Policy will be reviewed and updated to reflect industry-wide best practice.

Our 2018 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, and workplace diversity and inclusion.

Effective and regular two-way communication with employees is the foundation of our employee relations programs. Senior managers in the corporate office and divisions are held accountable for implementing plans to address the key needs of our workforce. In previous years, Sherritt conducted an employee survey to evaluate engagement across the business. We are currently exploring new approaches for gathering employee feedback on a more frequent basis to fulfill our commitment to listen to and understand the needs and challenges of our workforce. We will report on the progress of our renewed approach in our 2019 Sustainability Report.

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 performance-based short-term incentive award expressed as a percentage of their base salary.

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 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, which are investigated by the agency in conjunction with management.

Performance

Employee Engagement

Sherritt is currently exploring new approaches for gathering employee feedback on a more frequent basis. As such, no employee engagement surveys were conducted in 2018.

Organized Labour, Grievances and Strike Action

In 2018, a process that began in previous years to put a collective bargaining process in place at Ambatovy for all local national employees resulted in the ratification of an agreement in June. 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. As such, factoring in both Ambatovy and the Fort Site, Sherritt’s employee base is now approximately 83% unionized.

Our Fort Saskatchewan site resolves all grievances following the process described in the Collective Agreement and the Labour Relations Act of Alberta. There are currently 39 active grievances in this process.

At Ambatovy, 18 grievances relating to working conditions were reported in 2018. The main topics of the complaints were: harassment, personnel transport, leader behaviour and salary increase. All 18 cases were addressed and resolved during the calendar year.

There were no work stoppages as a result of labour unrest in 2018.

Workplace Diversity and Inclusion

With Sherritt’s Sustainability Goal of improving diversity at all levels of the company, Sherritt spent much of the year analyzing the composition of our workforce and assessing our internal policies including hiring, talent management, and flexible work arrangements. In 2019, Sherritt will launch a global framework for diversity and inclusion, setting out our multi-year plan to achieve our stated goal.

Currently, the workforce at Sherritt is 14% female, largely unchanged from 2017. In our Canadian locations (Fort Saskatchewan, Calgary and Toronto), our workforce is 20% female. In Cuba, our main workforce is contracted by the state and Sherritt is not involved in hiring decisions. In fact, the management team of the Cuban side of Sherritt’s JV at Moa (Cubaniquel) is currently 40% women. Where Sherritt does not have oversight in hiring, we believe that we can still model by example and influence our JV operations in areas such as human rights and diversity and inclusion.

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.

Sherritt has joined both the “30% Club Canada”, whose goal is to ensure that at least 30% of board seats in the country are held by women by 2022, and Catalyst Canada. As a signatory of the Catalyst Accord 2022, Sherritt pledges to help increase the average percentage of women on boards and women in executive positions in corporate Canada to 30% or more by 2022. In 2019, Sherritt’s President and CEO assumed the co-chair role for the 30% Club.

Canada (Fort Saskatchewan, Commercial and Technologies, Calgary OGP and Corporate offices) Cuba (Moa and OGP)1, 2 Madagascar (Ambatovy) Other3 Total
Male Female Unknown Male Female Unknown Male Female Male Female Unknown Male Female Unknown
Permanent 672 169 2,320 192 3,121 452 5 11 6,118 824
Full-time 656 158 2,320 192 3,121 452 5 11 6,102 813
Part-time 16 11 16 11
Temporary4 4 2 57 3 0 5,672 621 1 1 5,680 623 57
1 Includes the office in Havana
2 Includes Sherritt and General Nickel Company S.A. of Cuba employees at Moa, as well as employees of the entities that make up the Oil & Gas and Power businesses (including Energas)
3 “Other” includes our Bahamian marketing office, which services the Moa JV, and OGP Spain
4 Temporary employees include consultants and positions currently filled by contractors

Employee Diversity

Canada
(Fort Saskatchewan and Corporate)
Cuba
(Moa and OGP)1
Madagascar (Ambatovy)
Employee average age 45 51 37
Women in workforce (%) 20.1% 2.17% 12.6%
Women in management (%) 18% 0% 13.8%
Note: Sherritt does not currently define or track employee ethnicities and therefore has not included these metrics.
1 Includes Sherritt employees and Cuban local national employees

During the year, Sherritt’s Fort Site engaged in a research study to "improve workplace culture in Alberta science, engineering, trades and technology companies by decreasing implicit bias and stereotypical threat," facilitated by the Canadian Centre for Women in Science, Engineering, Trades and Technology (WinSETT). Sherritt is one of a number of industry participants. The program involves the assessment of workplace culture and a review of formal policies with the intention that the results will help both Sherritt with our diversity and inclusion strategy and the industry more broadly. The project is funded by the Status of Women Canada Western Region with in-kind contributions from participating companies and not-for-profit organizations.

In 2018, Sherritt updated the Harassment, Discrimination and Violence Prevention policy to expand the definition of prohibited behaviours and to clarify the accountabilities of all employees to ensure a safe and inclusive work environment. Training was provided to site leaders at the Fort Site regarding their accountability in addressing harassment and violence in the workplace.

During the year, five instances of discrimination were reported by employees at the Fort Site. This is something Sherritt takes extremely seriously. It is likely that the increase in incidents is not because the incidents were not occurring previously but because of increased awareness of the accountability of leaders and encouraged use of formal reporting procedures; however, each incident has been thoroughly investigated and treated with the attention such issues require, including training and, in some cases, termination of offenders. It is Sherritt’s goal to create a diverse and inclusive workplace where issues are readily reported and appropriately addressed.

“Sherritt’s Fort Site is a partner with the Centre for Women in Science, Engineering, Technology and Trades (WinSETT) research project on improving workplace culture for women in STEM companies such as Sherritt. From their early commitment, all levels of the organization have become engaged in assessing their current strengths and challenges in the area of D&I, and have moved this discussion to the development of goals and priorities related to developing and sustaining an inclusive workplace culture. The momentum from an early exploratory discussion through focus groups to a comprehensive draft framework has been remarkable.”

– Lori Campbell, Principal, Colbourne Institute for Inclusive Leadership, Norquest College