Integrated HSE management system

According to its corporate policy, LUKOIL is guided by principles aimed at creating safe working conditions, protecting the health of its employees and people in the regions where LUKOIL Group is present, as well as ensuring the efficient use of natural resources drawing on the best available technologies to preserve the environment.

The Integrated System of Management of Industrial, Fire, Radiation Safety, Emergency Prevention and Liquidation, the Protection of Civilians, Occupational Safety and Environmental Protection (hereinafter, the Integrated HSE Management System) has been in effect in LUKOIL Group for over 20 years. The Integrated HSE Management System provides for the identification and management of risks and environmental issues, and a risk-oriented approach is applied to system planning, introduction of changes and implementation of cutting-edge technologies.

Интегрированная система управления

Integrated HSE management system

The Integrated HSE Management System is constantly improving it is revised annually to accommodate improvements which are developed based on external audits and corporate control measures for compliance with the requirements of laws and corporate standards. The reporting preparation methodology and stakeholder engagement practices are also being continually revised.

Number of entities where audits of management systems were performed
2017 2018 2019
External audits (for compliance with ISO 14001 and OHSAS 18001 standards) 20 19 20
Internal audits (for compliance with corporate requirements) 26 27 23

Notes. External audits are conducted in a three-year cycle in accordance with ISO committee recommendations. During this period, all LUKOIL Group entities that are to be certified and in which certification or supervisory audits are conducted are audited.

Measures implemented as part of the targeted programs are funded and form an integral part of the LUKOIL Budget and the Investment Program. In addition, research projects are undertaken as part of the R&D program. During 2019, total HSE costs amounted to 0.6% of the Group’s consolidated revenue.

Financing of HSE targeted and investment programs at LUKOIL Group, RUB million
Programs 2017 2018 2019
Environmental Safety Program, including: 42,412 35,529 35,903
  • capital costs
21,927 28,498 30,046
Industrial Safety Programs, Better Working Environment, Emergency Prevention and Response Program, including: 12,307 10,093 12,008
  • costs to improve labor conditions and protect health, reduce occupational injury and occupational disease rates
6,789 4,946 5,281
  • costs to reduce accident, incident, fire, and emergency risks
5,518 5,147 6,727
R&D, experimental engineering, and scientific technical works in Russia, including: 40 80 57
  • environmental protection
23 58 34
  • industrial safety
17 22 23
Total 54,759 45,702 47,968

Note. (1) When calculating costs at the foreign entities of LUKOIL Group, the 2018 currency exchange rate of USD 1 = RUB 63 and that for 2019 of USD 1 = RUB 65 was used. (2) Data on costs under the Environmental Safety Program for 2017 is only provided for Russian entities participating in the Program; data for 2018 and 2019 also includes costs at the foreign entities participating in the Program (15 entities in total, see Appendix 8 “Reporting Boundaries”). (3) The structure of the Industrial Safety Program costs has been amended to reflect the updated Program for 2020–2022. The program for 2020–2022 was approved in 2020. More details of the Program will be provided in the 2020 Sustainability Report. (4) The change in R&D project costs is driven by funding schedules of approved projects

Our goals

To ensure an advanced level of industrial safety and labor protection is an overriding priority for the CompanyRoad and vehicle safety aspects are viewed within the scope of personnel travel rules, as well as the rules of fuel trucking to petrol stations, and are factored in the corporate system of labor protection. The bulk of products is supplied to foreign and domestic customers through the transportation systems of Transneft and Russian Railways, as well as by marine and river tankers of third party carriers. LUKOIL does not possess to own rolling stock and tanker fleet..

This goal is included in the LUKOIL Group’s Strategic Development Program. We are striving to comply with global best practices by achieving a low level of risks associated with accidents, incidents, fires, and emergencies at production facilities, labor injuries and occupational illnesses. An Integrated HSE Management System which functions sustainably is key to accomplishing this goal.

Management system changes

During 2019, we proceeded with preparations to adopt the new ISO 45001:2018 (in place of OHSAS 18001:2007 previously in effect). It contains up-to-date requirements for organizing the occupational health and industrial safety system providing for the expansion of the management perimeter. In particular, the standard prescribes that active engagement with employees and other stakeholders be put into practice, responsibility in contractor relationships be strengthened, and involvement of senior management be enhanced. A risk-oriented approach, preventive measures and actions, and a goal-setting exercise are of great importance.

In 2019, corporate standards used to govern contractor relationships, record and analyze incidents, occupational illnesses and workplace microtraumas, as well as the procedure for registering, warning about and investigating technogenic events were updated. Information about the new approaches is included on the agenda of LUKOIL’s Safety Days.

During internal audits, entities are evaluated for compliance with the new requirements. Transition to the new standard is scheduled to begin in 2020.

Leadership and Safety Culture

To enhance employee and management involvement, work on the implementation of leadership and employee engagement instruments was intensified in 2019. This approach helps to overcome resistance to change and tighten control over results.

Safety Days

The event is held on an annual basisSafety Days are held in each LUKOIL Group entity at least once every six months. and serves as an effective tool for exchanging experience and HSE best practices identified not only at LUKOIL entities but also by its strategic contractors. At the Safety Day held in January 2020, which was devoted to 2019 performance, the participants discussed both industrial and occupational safety issues and the increasingly stringent community requirements for oil companies in the area of sustainable development, climate change and environmental protection.

Leadership visits

As part of leadership visits, heads of business units of PJSC LUKOIL and LUKOIL Group entities evaluate the level of workplace safety at production facilities.

Digital technology

In addition to automation tools for routine procedures (electronic briefings and issuance of hazardous work permits), such tools as hazardous work video recording and a “Mobile Inspector” software and hardware system are being implemented at the Company’s facilities. A new, original “Safety Culture 4.0” mobile service was also developed.

"Safety Culture 4.0” mobile service

Today, the culture of safety cannot advance if modern technologies are not applied, for they simplify and accelerate employee training and awareness, on the one hand, and provide for an enhanced control over compliance with safety requirements and eliminate the human factor, where required, on the other.

Digital technologies (augmented reality and mobile apps to name but a few) hold great potential to influence human conscience and perception. Digital technologies are capable of changing human behavior at a far faster rate than traditional methods of persuading, thus reducing the human error factor in occupational injuries and accidents. Digital products cater to a wide range of workers and guarantee more solid performance. Owing to sharp visualization and a non-routine way of presenting information, they surprise and provoke interest, hold attention and ensure a higher level of mastery of material.

“Safety Culture 4.0” mobile service is a proprietary LUKOIL product that has already gained attention in the industry. Its concept is centered around a rapid integration of required data and knowledge into the work flow, including through the use of augmented reality. Using only a cellular phone, a worker may find a relevant document, get instructions on how to act in case of a non-routine event or render aid to a colleague in case of a workplace incident, when every minute or even second counts. Instead of reading a long text, it would not take more than a rapid glance at the display to take action. An emergency response rate may not only help preserve one’s health but may save lives as well.

All training services of this app are promptly updated in real time, all at the same time in all regions of the Company’s operations. By virtue of a shared mobile app service, the procedure for organizing leadership visits and notifying employees of the results has been simplified. One more useful (or motivating) function of the app is the ability to count accident-free days in the entity a worker where is employed and the possibility of benchmarking the indicator with the entire business sector entities. The pilot implementation of the project was completed; its replication at all Group entities is scheduled for 2020.

Promotion through focused measures

Taking into account the styles of human perception of information, three main promotion techniques are used: visualization, communication and motivation. Visualization tools (e.g., a “Leader in Safety” logo printed on documents, work interruption and self-check records, accident-free counters, etc.) remind workers of the need to ensure behavior-based workplace safety at all times. For communication development purposes, materials and various safety-related media clips are posted and made available on the internal portal. Employees and teams with notable safety excellence performance are awarded marks of distinction and themed contest prizes.

Notifications and training

An extensive use of digital products, such as visualization of all incident case studies based on investigation reports, is also planned in this area. An interactive “Culture of Safety” training calendar is scheduled to be placed in facility workshops and group premises. The calendar will be brought in step with our “Safety Culture 4.0” mobile app and a built-in augmented reality service to transform the calendar into an annual training and notification system on all current safety issues. This technology was already used in management trainings; in 2020, sets of training materials have been developed and an annual “Management Leadership” training program has been launched.

The widespread use of digital technologies in the organization of compulsory training for LUKOIL Group employees, including through the corporate distance learning system, allows for an optimization of costs and a more efficient distribution between compulsory education and training aimed at developing professional, managerial and leadership competencies.

Training performance
2017 2018 2019
Amount of training on industrial safety and occupational health and safety for LUKOIL Group, person-courses 56,481 60,106 59,314
Industrial safety and occupational health and safety for LUKOIL Group – training costs (“Employee training and advanced vocational training”), RUB million 327.9 323.2 263.8

Notes. (1) The data includes actual information on in person and remote employee training. (2) The data on 2017–2019 training costs includes information on Russian entities, as well as on LUKOIL Uzbekistan Operating Company LLC and LUKOIL MID-EAST LIMITED.

Right to refuse life-threatening work

Employees have the right to refuse to perform their job duties if they consider it impossible to perform the work without endangering their lives or health. This right is enshrined in Clause 6.1.9 of the Agreement between the trade union and PJSC LUKOIL for 2015–2020 and the Key Rules of Safety when Staying at Facilities of LUKOIL Group Entities in accordance with STO LUKOIL “Leadership and Culture of Safety.”

Employee involvement

Through authorized occupational health and safety representatives and joint committees (commissions) for occupational health and safety, employees can propose measures to be taken to further safetyThis issue is regulated by Section 6 “Health, Safety, and Environment” of the Agreement between the employer and the Trade Union of Public Joint-Stock Company “Oil Company ‘LUKOIL’” for 2015–2020.. In 2019, the first training for authorized occupational health and safety representatives as part of a “Leader in Safety” program was undertaken. We plan to continue this practice, with such training to be held at least once a year.