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Sustainability Report 2011 - Borouge

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Page 1: Sustainability Report 2011 - Borouge

Sustainability Report 2011 Expanding our presence, contributing to society.

Page 2: Sustainability Report 2011 - Borouge

Key Highlights 2011Location Key Performance Indicators Threshold Target Outstanding Actual Status

Lead

ing

Cor

pora

te

% Serious Potential Incidents with RCA and Incident Investigation within 30 days of incident occurrence

85% 90% 95% 67% (1)

% Serious Potential Incident action close out within 30 days of target date 85% 90% 95% 100%

HSE Training sessions completed against plan 676 762 848 1,963

HSE Observation Tours 4,476 4,928 5,380 7,268

AD

P

Emergency Exercises completed against plan 224 256 288 323

HSE CES assurance verification tasks completed within 30 days of plan

85% 90% 95% 90%

Physical changes implemented following Management of Change process

85% 90% 95% 78% (2)

Pte Number of Water for the World Projects initiated and

published on website2 3 4 4

Lagg

ing

Cor

pora

te

TRI Frequency 0.40 0.30 0.20 0.23

AD

P Flaring of Hydrocarbon (kilotonnes) 120 107 80 118 (3)

Quantity of Waste held at Ruwais Facility (Tonnes) 60 40 30 18

Borouge Sustainability Scorecard

Key Facts and Achievements

(1) Only three recorded potentially serious incidents in 2011, of which one investigation took longer than the targeted 30 days(2) Critical review of our MOC process in 2011, and auditing planned in 2012 to further improve our system(3) A series of process upsets during the month of October did not enable Borouge to meet the target On Target Below Target Below Threshold

Produced over 1.8 million tonnes of polyethylene, polypropylene and ethylene in 2011 – almost double than in 2010

‘Borouge Star’ plastics awareness programme for school children launched in Abu Dhabi

Ruwais Distribution Centre established in Abu Dhabi

First tonnes of polyolefins exported to Europe

Launch of the Ethics Campaign

Zero Lost Time Injuries for both Borouge employees and contractors within more than 30 million man-hours worked

Winner of the Ringier Technology Innovation Award for a new polypropylene random copolymer

Awarded two ADNOC HSE Awards in the categories Environment and Sustainability

Recipient of the 2011 Middle East Chemical Week Award in the category “Project of the Year”

Fourth undergraduate scholarship programme launched in China

Award of the last contracts of the Borouge 3 Project for a cross-linkable polyethylene (XLPE) unit and non-process buildings

Signing of the Responsible Care® Global Charter with the Association of International Chemical Manufacturers (AICM) in China and of a Letter of Commitment with Singapore Chemical Industry Council (SCIC) in Singapore

Borouge employs a diverse workforce of 2,104 employees and UAE Nationals Under Development representing more than 50 different nationalities

“Water for the World™” and “Troubled Waters” exhibitions organised in four locations around the world on the occasion of the World Water Day

More than 27,800 training days delivered to Borouge employees and UAE Nationals Under Development

Launch of a Sustainability Improvement Programme, Water Footprint Study and Flare Benchmark Initiative

Page 3: Sustainability Report 2011 - Borouge

Environment

Our People

Social Responsibility

Our Solutions

GRI and IPIECA/API Index

Glossary of Terms

Publications and References

22

44

34

50

56

57

58

Message from our CEOs

About this Report

About Borouge

Managing Sustainability

Governance and Engagement

Risk Management

Economic

3

2

4

9

14

18

20

This publication was printed in the United Arab Emirates using organic inks and water based varnishes and sealants. The paper is Heaven 42, 400 g/m² and 170 g/m². This paper is FSC certified (sourced from well-managed forests and chlorine free) and Green Seal certified (contains a minimum of 30 percent post-consumer fibre). When you wish to dispose of this report, please use recycled paper waste facilities.

Did you know? Compared to virgin paper, each ton of recycled paper can save:• 17 trees• 3.3 cubic yards of landfill space• 4,000 kWh of energy• 7,000 gallons of water

(Source: US Environmental Protection Agency)

Contents

Page 4: Sustainability Report 2011 - Borouge

Borouge is an excellent example of a petrochemicals company that is experiencing formidable growth within incredible short period of time. With two million tonnes of polyolefins annual production capacity at our disposal, we are now well established to play a more important role in the global plastics market, growing our influence in the Middle East and being more competitive in the growth regions of Asia. Facing major global challenges such as climate change, availability of energy, accessibility of safe drinking water, food protection and healthcare, our industry is at the forefront of providing sustainable solutions that can make a difference to society.

Following the commissioning of several new plants in 2010, additional key milestones were achieved in 2011 including the award of the last contracts for the Borouge 3 Project, restructuring of the Marketing and Sales organisation and export of the first tonnes of polyolefins to Europe. We produced over 1.8 million tonnes of polyolefins and ethylene in 2011 – almost double than 2010 – and achieved sales and market prices beyond expectations.

We are pleased to say that we attained this performance with an outstanding safety record: No serious injuries for both Borouge employees and contractors with more than 30 million man-hours worked, thanks to a series of leading performance indicators and safety programmes implemented in 2011.

Our continuous effort to improve sustainability performance across the value chain was reinforced in 2011 through our increased commitment to the Responsible Care® Global Charter both in the Middle East and in Asia. Continuing to enhance our social responsibility, Borouge launched the fourth undergraduate scholarship programme in China, organised Water for the World™ exhibitions in four

locations around the world, and initiated a ‘Borouge Star’ plastics awareness programme for school children in Abu Dhabi.

Our commitment to mitigate our environmental footprint was highlighted through the launch of several initiatives, including a water footprint programme, a flaring benchmark study and the launch of an energy management system. We also started implementation of the membrane flare recovery project, which will lead to zero continuous flaring of hydrocarbons during normal operations of polyolefins plants, and we significantly improved our industrial waste management at the Ruwais complex.

Looking ahead, the coming years will mark the continuity of our intense development, with our new Innovation Centre in Abu Dhabi expected to be operational in 2012, a second compounding plant planned in China, and the Borouge 3 Project expected to come online towards the end of 2013. These significant capacity expansions at Ruwais and entrance into new markets are creating significantly greater customer and product complexity for Borouge. To ensure that we are ready for these challenges, we are currently implementing a transition programme called “Borouge 2015” which will further develop our Marketing and Sales strategy.

There is still a lot for us to do to make us the leader in the industry but we are building an organization that can take us forward on our sustainable journey to “Shaping the Future with Plastics” with innovative, value creating solutions.

We are proud to present our 2011 sustainability achievements and performance in this report, and we look forward to sharing our future progress with you in the following years.

Message from our CEOs

Abdulaziz Alhajri Chief Executive OfficerAbu Dhabi Polymers Co. Ltd (Borouge)

Wim Roels Chief Executive OfficerBorouge Pte Ltd

Page 5: Sustainability Report 2011 - Borouge

About this Report | Borouge Sustainability Report 2011

3

Welcome to Borouge’s 2011 annual Sustainability Report, covering Borouge’s Production Company, Abu Dhabi Polymers, and Borouge’s Marketing & Sales Company, Borouge Pte Ltd. This report focuses specifically on achievements and performance of the 2011 calendar year, but also includes key historical events in addition to looking ahead to our future developments.

The content of this report is guided by the Global Reporting Initiative (GRI) 3rd Generation (G3) Sustainability Reporting Guidelines 2006 and the International Petroleum Industry Environmental Conservation Association / American Petroleum Institute (IPIECA/API) Oil and Gas Industry Guidance on Voluntary Sustainability Reporting 2010. GRI G3 is a globally recognised framework for reporting on an organisation’s economic, social, and environmental performance whereas IPIECA/API guidance is considered as a reference in the oil and gas industry. A GRI and IPIECA/API content index is included at the end of this report.

This report covers:

• Our production activities in the Middle East (Ruwais Petrochemicals Complex) and in China (Shanghai Compounding Manufacturing Plant);

• Our distribution activities throughout the Middle East, to Asia and to other port destinations over the world, including our three logistics hubs in Guangzhou, Shanghai and Singapore.

The following limitations apply with regard to

the scope of this report:

• Contractors, suppliers and clients’ data are generally not included unless specifically mentioned;

• Environmental data disclosed in this report cover the Ruwais Petrochemicals Complex in Abu Dhabi and the Compounding Manufacturing Plant in Shanghai, over which Borouge have direct control.

Non-production facilities (headquarters, offices and labour camps) are excluded as their environmental impact is negligible compared to production facilities. In an effort to leverage and increase our role as a market leader, we are gradually evaluating and including the environmental impact of our distribution network. For the first time in 2011, electricity and water consumption of our three logistics hubs are included in the environmental section. Information related to the environmental impact of transportation moreover includes truck movements in the Middle East and in Asia as well as marine transport between Abu Dhabi and Asia;

• Labour practices data cover all Borouge employees as registered in the Company payroll;

• Health and safety data includes both Borouge employees and contractors.

We welcome your feedback on this Sustainability Report. Please direct any questions or comments regarding the report to: [email protected].

About this Report

Page 6: Sustainability Report 2011 - Borouge

Our PetrochemicalComplex in Abu Dhabi

4

Who We Are

Borouge, which means ‘constellation of stars or towers’ in Arabic, is a leading provider of innovative, value creating plastics solutions. Established in 1998 as a joint venture between the Abu Dhabi National Oil Company (ADNOC), one of the world’s major oil and gas companies, and Austria based Borealis, a leading provider of chemical and innovative plastics solutions. Borouge is a groundbreaking international partnership at the forefront of the next generation of plastics innovation.

Borouge consists of two separate companies:• Abu Dhabi Polymers Company - Borouge

(60 percent ADNOC and 40 percent Borealis), headquartered in Abu Dhabi and undertakes petrochemical production in Abu Dhabi, the United Arab Emirates.

• Borouge Pte Ltd (50 percent ADNOC and 50 percent Borealis), headquartered in Singapore and responsible for marketing and sales activities,

serving customers in more than 50 countries across the Middle East, Asia-Pacific, Indian sub-continent, Africa and Europe.

Our Facilities

Central to our operations is the petrochemical production plant in Ruwais, about 235 km west of Abu Dhabi City in the United Arab Emirates. Since the start-up of the Borouge 2 plants in 2010, the polyolefins (polyethylene and polypropylene) manufacturing capacity of our complex has t ripled to reach 2 million tonnes per year.

Borouge is further expanding its petrochemical plant by 2.5 million tonnes per year to a total annual capacity of 4.5 million tonnes with anticipated full operation by mid-2014. The project, titled Borouge 3, includes an ethane cracker, two polyethylene units and two polypropylene units, as well as for the first time, a low density polyethylene (LDPE) unit and a cross-linkable polyethylene (XLPE) unit.

About Borouge

Figure 1: Borouge’s Organisational Framework

SingaporeHeadquarters

InnovationCentre

SalesOffices

Logistics Hubs

Compounding Plant

Abu DhabiHeadquarters

Ruwais Plant

Abu Dhabi Polymers Marketing & Sales

Borouge

50%50%60%

40%

64% 36%

Page 7: Sustainability Report 2011 - Borouge

About Borouge | Borouge Sustainability Report 2011

5

Figure 2: Production Levels

Borouge has invested approximately US$ 30 million in a manufacturing plant in Shanghai with an annual capacity of 50,000 tonnes with the potential for expansion to 80,000 tonnes per year. Resins are compounded here specifically for customers in the growing automotive and appliance markets. A second plant is planned and is expected to supply an additional 105,000 tonnes per year of compounded resins.

After the first complete year of operation for Borouge 2, our production doubled from 967,000

tonnes in 2010 to 1,898,000 tonnes in 2011 – thus reaching levels close to our total production capacity of 2 million tonnes per year.

Our marketing and sales efforts are managed out of the head office in Singapore supported by sales offices in ten strategic locations, and sales agents in a further ten countries.

Borouge has dedicated logistics hubs in Asia with warehousing and packing facilities in Shanghai (600,000 tonnes per year), Guangzhou (246,000

Current Future (with Borouge 3)

2,100,000 tonnes ethylene 3,600,000 tonnes ethylene

1,140,000 tonnes polyethylene 2,220,000 tonnes polyethylene

800,000 tonnes polypropylene 1,760,000 tonnes polypropylene

350,000 tonnes low density polyethylene

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

2,000,000

20112010200920082007

Pro

du

cti

on

in

To

nn

es

Polyethylene Polypropylene Ethylene sold Resins

Our Compounding ManufacturingPlant in Shanghai

Table 1: Annual Capacity Overview of the Petrochemical Complex in Ruwais

Page 8: Sustainability Report 2011 - Borouge

6

The Logistic Hub inGuangzhou

tonnes per year) and Singapore (330,000 tonnes per year). Establishing these three logistics hubs outside the UAE is just one part of our integrated robust supply chain infrastructure that aims to supply customers with a seamless ordering process and competitive lead-times. Polyolefin pellets are distributed from the logistics Gateway in the UAE and sent via ships to ports around the world.

Key Evolutions in 2011

Construction of Borouge 3

In 2011, Borouge awarded the major final contracts for the Borouge 3 project which is already well underway at Ruwais:• A contract worth US$169 million to Hyundai

Engineering and Construction of South Korea to build a cross-linkable polyethylene (XLPE) unit. With an annual capacity of 80,000 tonnes, the unit is an added-value complement to the low density polyethylene (LDPE) unit, enabling the manufacture of innovative plastics solutions for low to high voltage energy cables.

• A contract worth US$ 111 million to Alpine Bau Deutschland AG to construct the non-process buildings.

Start-up of Ruwais Distribution Centre

The purpose of a new Ruwais Distribution Centre (RDC) established in close proximity to the polyolefins plant in Abu Dhabi is to serve as a regional distribution centre for storage of packed and palletized materials and consequential fulfilment of orders from customers located in the UAE, other Gulf Cooperation Council (GCC) countries and East Levant (EL) countries such as Jordan and Syria. The RDC consists of a 45,000 m2 warehouse with a capacity to handle an annual volume of 346,000 tonnes. The RDC started operations in December 2011 with the objective to accommodate for Borouge 1 and 2 land transportation volumes, and sent the first shipments of polyolefins to one of its key customers in January 2012.

Figure 3: Our World

Borouge’s Production Company

Petrochemical Complex

Borouge’s Marketing Company

Logistics Hubs

Compounding Plant

Innovation Centre (opening 2012)

Sales Office

Agents

Page 9: Sustainability Report 2011 - Borouge

When fully operational by mid-2014, Borouge 3

will more than double the plant’s annual capacity to

4.5 million tonnes

Our Journey

Borouge is in the midst of a 15-year journey that will transform it from a new joint venture company to an international polyolefins production and marketing business, operating the largest integrated polyolefins facility in the world.

About Borouge | Borouge Sustainability Report 2011

7

2012: Completion of Innovation Centre.

2013: Compounding Production Facility in Guangzhou.

Start-up of Borouge 3.

2014: Borouge 3 fully operational.

January: • Borouge awards US$169 million contract for

construction of XLPE unit in Ruwais.• Launch of the fourth scholarship program in China.

March:

• 3-day Water for the World event in Abu Dhabi at the occasion of the World Water Day.

April:

• Air monitoring campaign inside Borouge complex in Ruwais.

• ‘Borouge Star’ plastics awareness programme for school children at Glenelg in Abu Dhabi.

May: • Borouge wins two ADNOC HSE Awards in the

Environment and Sustainability categories.• Borouge supplies first tonnes of polyolefins to

Europe.

June:

• Cardiology health awareness campaign in Ruwais.

August:

• Borouge wins Ringier Technology Innovation Award for a new PP random copolymer.

• Borouge facilities re-certified ISO14001 with extension to Borouge 2.

September:

• Signature of the Responsible Care Global Charter with AICM in China.

• Contribution to a relief campaign for drought victims in Somalia.

October:

• Launch of the Sustainability and Water Footprint Program.

November:

• Signature of a Letter of Commitment to Responsible Care with SCIC in Singapore.

December:

• Start-up of Ruwais Distribution Centre to serve as a regional distribution centre.

• Launch of the Ethics Campaign.

1998: Established as a joint venture between the Abu Dhabi National Oil Company (ADNOC) and Borealis.

2001: Production commences at Borouge’s first state-of-the-art polyethylene plant in Abu Dhabi.

2002: First shipments of polyethylene leave the Abu Dhabi plant to customers in the Middle East and Asia.

2004: Borouge is co-founder of the Gulf Petrochemical and Chemicals Association (GPCA).

2005: The annual production capacity of the Abu Dhabi plant is increased to 600,000 tonnes.

2006: Borouge signs the Responsible Care® Global Charter; Abu Dhabi plant achieves ISO 14001 certification.

2007: Borouge and Borealis launch the Water for the World® initiative.

2009: Borouge publishes its first sustainability report; The Borouge Scholarship Programme is launched in Asia.

2010: Start-up of Borouge 2 in Ruwais and Compounding plant in Shanghai; Logistic hubs opened in Singapore, Shanghai

and Guangzhou; Development of Sustainability Policy and HSE Management System.

2012 -

2014

2011

1998 -

2010

Page 10: Sustainability Report 2011 - Borouge

8

Borouge’s Innovation Centre on the way

Since the award in July 2010 to ASCON of a contract worth approximately US$ 70 million, the construction of the Innovation Centre in Abu Dhabi has been ongoing. Planned for completion in 2012, this new Innovation Centre will cover an area of approximately 18,000 m2 and will house more than 50 international researchers and engineers.

Awards

Borouge received several awards in 2011, which are summarised in Table 2.

Awarding Entity Achievement

ADNOC

Borouge was awarded two 2010 ADNOC HSE Awards during a ceremony held in Abu Dhabi on May 31, 2011:• In the Environment category for the Borouge 2 cracker successful start-up with

environmental friendly nitrogen cool down;• In the Sustainability category for the joint consumer waste collection and recycling

programme with ADNOC Distribution.

BorealisBorouge received a Borealis Innovation Award 2010 for the Borouge 2 start-up project in the category of Co-operation.

Ringier Technology I nnovation

Borouge received the 2011 Ringier Technology Innovation Award, one of the most influential industrial awards in the Chinese plastics industry. Winning of the award is attributed to the newly-launched RG468MO grade, a polypropylene (PP) random copolymer that provides up to a 20% productivity gain and 10% energy savings for the rigid packaging converting industry.

The World Refining AssociationBorouge was awarded the 2011 Middle East Chemical Week Award for the “Project of the Year” category for its successful Borouge 2 project.

UAE Ministry of Foreign TradeBorouge was honoured as one of the most successful UAE companies investing abroad by the UAE Ministry of Foreign Trade in “The High Flyers” book.

Fengxian GovernmentThe CMP facility in Shanghai was awarded as the “Fire Fighting Safety Company 2011” by Fengxian Safety Production Committee in recognition and appreciation of its effort and safety record.

China Safety Authority

Borouge’s logistics hub in Guangzhou, China, was proudly selected by China Safety Authority as an exemplary site for its consistent and outstanding safety performance. The award was recognition of the successful cooperation between Borouge and Enpro, Borouge’s strategic business partner in the Guangzhou logistics hub.

Table 2: Awards Received by Borouge in 2011

The Borouge Innovation Centre under construction

tonnes of polyolefins to Europe

The first supplies of polyolefins from Borougeinto Borealis territory have become a fact. In Portugal, at the port of Leixoes, about 500 tonnes of polyethylene was delivered to the Alberplas Group, the biggest polyethylene filmproducer in Portugal.

The supply from Borouge is part of the growth strategy called “Roadmap 2020”. Borouge will supply up to 1 million tonnes to European countries such as Spain, Portugal, Turkey, and to the United States.

Page 11: Sustainability Report 2011 - Borouge

9

Managing Sustainability | Borouge Sustainability Report 2011

Managing Sustainability

Case Study: Our Sustainability Policy

We are committed to:

• Pursuing a goal of no harm to people, theenvironment, the community or the reputationof Borouge

• Minimizing waste and emissions, conservingenergy and optimizing the use of naturalresources

• Identifying all operational hazards andminimizing the associated risks to a level whichis as low as reasonably practicable (ALARP).

• Ensuring that design, operational and technicalintegrity of assets are sustained throughouttheir life cycle

• Establishing appropriate security measures andcontrols against identified threats

• Understanding and respecting the social,cultural and legal aspects where we operate,and working together with various stakeholdersto add value and make a positive contribution

• Advancing sustainable development across the value chain by ensuring that our products are properly used and handled, and that theyare produced to maximize the positive health,safety and environmental impacts throughouttheir entire life cycle

Our Mission

Value Creation through Innovation

Our Vision

Shaping the Future with Plastics

Our Values

Respect

• We care for our health, safety, and environment • We are one family, building on our multicultural

diversity • We respect the communities and the environment

in which we live and work• We are good neighbours wherever we operate • We empower our people and encourage their

growth

Exceed

• We deliver what we promise and a little bit more • We win through integrity, commitment, and passion • We lead by example Create

• We are curious, creative and seek continuous improvement

• We encourage and recognize new ideas • We thrive on innovation and offer simple, smart

solutions

Focus

• We build and foster a customer focused culture • Our customers’ and owners’ success is our

business • We anticipate customers’ needs and build

partnerships • We do business according to high ethical standards

Borouge Sustainability Framework and

Organisation

“Sustainable Development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” (Brundtland Commission, 1987)

Borouge developed in 2009 its Sustainability Policy underpinned by a sustainability framework consisting of four pillars that support its current business performance and future aspirations.

Responsible Care®

A chemical industry’s global voluntary initiative under which companies, through their national associations, work collaboratively to improve their health, safety and environmental performance.

Social Responsibility

A voluntary commitment to invest in the communities where we operate for the better good.

Health, Safety and Environment

A commitment to achieving a health, safety and environment (HSE) performance of which the company can be proud, contributing to sustainable development, and earning the confidence of stakeholders.

Asset Integrity

A commitment to ensure the design, technical, and operating integrity of current and future Borouge facilities and equipment as a means of maintaining the safety of people, assets, and the environment.

Page 12: Sustainability Report 2011 - Borouge

10

The Corporate HSE Team, which has overall responsibility on sustainability issues, was reorganised and reinforced in 2011 to account for the growing importance given to sustainability management within Borouge:• The Corporate Team in Abu Dhabi was reinforced with

a new Environmental Engineer;• The corporate Sustainability Advisor received the

Sustainability CSR Practitioner Certification from the Centre for Sustainability and Excellence;

• A Loss Prevention Manager was appointed for the Marketing & Sales Company, who has oversight on HSE Management for the Supply Chain, Innovation Centre and CMP Facility;

• A Security Team Leader was appointed as part of the Loss Prevention Function in Ruwais.

In addition to the organisation changes in 2011, the Corporate HSE Organisation was developed and approved for 2015 post Borouge 3 Expansion Project.

For 2011, Borouge developed a Corporate Sustainability Balanced Scorecard covering both Abu Dhabi Polymers and the Marketing & Sales Company, focusing on leading metrics and resulting in a step change in many key performance indicators through significant combined efforts.

These objectives were reviewed and updated for 2012. They now consist of two separate HSE Balanced Scorecards – one for Abu Dhabi Polymers and one for the Marketing & Sales Company – in order to better account for the specificities of each company.

Our Sustainability Management

Borouge HSE Management System

Borouge places high emphasis on health, safety and environment and ensures that its operations adhere to ADNOC Codes of Practice, applicable Country Legislation and industry best practice. We manage HSE through the use of a HSE Management System (HSEMS) comprising of eight elements, a series of sub-elements and detailed expectations. The HSE Management System is based on the continuous

improvement concept of Plan-Do-Check-Act, and complies with ISO 14001 and aligns to OHSAS 18001 International Standards for managing health, safety and the environment. All Borouge activities have been initially certified to ISO14001:2004 in 2006 and successfully re-certified in 2009. The Compounding Manufacturing Plant (CMP) in Shanghai, which was inaugurated in April 2010, obtained ISO14001:2009 certification in July 2010. In 2011, the re-certification scope has been successfully extended to cover the new Borouge 2 plant in Ruwais which was commissioned in 2010.

Responsible Care®

Responsible Care was launched in 1985 as the chemical industry’s global voluntary initiative under which companies, through their national associations, work collectively to continuously improve health, safety, and environmental performance across the value chain.

Borouge is committed to the continued support of the Responsible Care global charter, specifically working in conjunction with the Gulf Petrochemicals and Chemicals Association (GPCA) – as one of its eight founding members – towards a common goal of full Responsible Care membership for GCC companies.

In 2011, Borouge started to implement Responsible Care

Management System RC14001, which broadens the scope of ISO 14001 beyond the traditional environmental management system to include health and safety, security, distribution, product stewardship, process safety, community awareness and emergency response. Borouge Subject Matter Experts participated in GPCA Taskforce for each of the seven Responsible Care Codes of Management Practices (CoMPs), and an internal gap analysis was performed against the CoMPs requirements.

Awareness sessions on Responsible Care were provided to the Leadership Teams of Abu Dhabi Polymers and Borouge Marketing & Sales Company, as well as to the HSE Division of ADNOC Supreme Petroleum Council (SPC).

Page 13: Sustainability Report 2011 - Borouge

Borouge’s Values: Respect, Exceed,Create, Focus

Figure 4: Borouge’s Sustainability Framework

Opportunities & Benefits – Responsible Care®

• Work with peers and competitors to meet the challenges facing chemical manufacturers and all those in the value chain.

• Continuously improve sustainability and HSE performance along the value chain through implementation of Responsible Care® Global Charter, Management System and Codes of Management Practices.

• Enhance company image and reputation

Responsible Care

Sustainability

Eco

no

micS

oci

al

Environment

OurProducts

Building RelationInvesting In

Our CommunitiesWork In

Partnership

PeopleEnvironment

AssetsReputation

DesignTechnical

Operational

SocialResponsibility

AssetIntegrity

Health, Safety and Environment

OurCustomers

OurFuture

Opportunities & Benefits – Social Responsibility

• Assure license to operate through local communities awareness, engagement and development.

• Enhance image of plastics among the general public through education on plastics and waste.

• Educate and train potential future employees through scholarship programs.

• Promote Borouge products while addressing fresh water access and proper sanitation challenges (Water for the WorldTM).

Opportunities & Benefits – HSE

• Improve worker productivity and avoid liabilities through: - Prevention of safety accidents. - Promotion of employees’ health and

well being, e.g. through Borouge Health & Social Day

• Reduce costs through decreased use of materials, water and energy, and waste reduction, e.g.: - Flaring reduction projects resulting in

hydrocarbon savings. - Explore new opportunities e.g. CDM,

Water footprint.• Align with new regulations e.g. Envision

2030.

Opportunities & Benefits – Asset Integrity

• Avoid major accidents with potential impacts outside Borouge boundaries.

• Prevent operational losses and disruption in the production.

• Reduce HSE risk profile through identification and management of HSE Critical Equipment Systems.

• Ensure safe and environmentally sound implementation of changes through Technical Management of Change Process.

Middle East

Regional

Committee

Process

Safety

Greater China

Regional

Committee

Asia South

Regional

Committee

Technical

Support

11

Managing Sustainability | Borouge Sustainability Report 2011

Additional awareness sessions were also organised for employees in key offices. In addition, 15 Borouge employees were trained to be lead auditors for the Responsible Care Management System (RC 14001).

In the other regions where we operate, Borouge also reinforced its engagement and commitment to Responsible Care through:

• Signature of the Responsible Care Global Charter with the Association of International Chemical Manufacturers (AICM) in Beijing, China on September 26, 2011.

• Signature of a Letter of Commitment to Responsible Care during the annual year-end reception organised by Singapore Chemical Industry Council (SCIC) on November 11, 2011.

11

Corporate

Sustainability

CHSE

Development

Loss

Prevention

ADP

Loss

Prevention

Pte

VP Asset Improvement

Engineering

& ProjectsInspection

VP Corporate HSEVP Global Communications

Page 14: Sustainability Report 2011 - Borouge

12

Borouge’s commitments tosustainability are embedded in fourkey documents: Sustainability Policy,Social Responsibility Guidelines,Responsible Care® Declaration ofSupport, and Ethics Policy

and benchmark studies, and identified gaps and areas for improvement.

Efficiency opportunities were consequently formulated in order to enhance sustainability management with regard to exploring new sustainability areas, defining the company long term sustainability vision and strategy, setting-up additional targets on key sustainability issues, and improving external disclosure. This will facilitate the implementation of key identified opportunities based on their cost-effectiveness and sustainability benefits (e.g. related to flaring, water re-use, packaging reduction, biodiversity protection, etc.).

An action plan will be developed in 2012 for the implementation of these improvement opportunities, which will enable to enhance Borouge’s performance through reduced environmental impact, reduced costs, increased awareness of sustainability issues and enhanced reputation.

Middle-term Sustainability Strategy

In line with Borouge 2015 project and business plan, the Corporate HSE Team has defined the following middle-term sustainability priorities and strategic actions:• Further develop Borouge HSEMS to Incorporate

Responsible Care and more definition for Asset Integrity.

• Ensure HSE regulatory compliance and develop HSE Legislation Registers;

• Develop HSE booklets and training programmes for all employees that they can use in their everyday lives;

• Implement a “fit for purpose” effective set of operational HSE Systems / Tools (regarding Permit to Work, Risk Management, Incident Reporting and Action Management);

• Develop a HSE performance based “cradle to grave” Contractor Management process;

• Develop a set of HSE mandatory requirements and

assurance process for all high risk activities;• Implement a training and competency programme for

the entire Fire and Rescue Team;• Develop fully tested scenario based crisis

management plans covering all Borouge business;• Lead the product stewardship programme through a

“cradle to grave” strategy.

Case Study: Sustainability Improvement

Programme

Borouge launched in 2011 a comprehensive

Sustainability Improvement Programme with

following objectives:

• Identify sustainability improvement opportunitiesbased on cost-benefit analysis.

• Benchmark Borouge’s sustainability performancewith peer companies.

• Prepare a report in order to further increase the organization’s awareness on sustainability issuesand challenges for Borouge.

• Further improve the current Borouge SustainabilityFramework.

• Further develop Borouge Corporate Integrated Management System covering in details the fourpillars of the sustainability framework.

This programme assessed the current situationregarding sustainability management at Borouge,through workshops, interviews, documents review

Page 15: Sustainability Report 2011 - Borouge

Key Performance Indicators ThreshholdTarget

2012

Out-

standing

Leading

% of Serious Potential Incidents & TRI Investigation Action Close Out 85% 90% 95%

Emergency Exercises (CMP, Offices, Hubs) 6 8 10

Occupation Health Improvement Programme Milestones 70% 80% 90%

HSE Training (attendance) 70% 80% 90%

Number of Water for the WorldTM Projects / Event 3 4 5

Office HSE Standard Audits 4 5 6

Observation Tour 250 300 350

Lagging Recordable Injuries 2 1 0

Key Performance Indicators ThreshholdTarget

2012

Out-

standing

Leading

% Serious Potential Incidents & TRI Investigation 85% 90% 95%

% of Serious Potential Incidents & TRI Investigation Action Close Out 85% 90% 95%

Emergency Exercises (with OSC / IMT / CMT Involvement) 18 24 30

Occupation Health Improvement Programme Milestones 70% 80% 90%

HSE Training (attendance) 70% 80% 90%

Observation Tours 4,400 5,300 6,200

HSE Critical Equipment Systems (relief valves) tested within 30 days of planned date 85% 90% 95%

Management of Change - Physical changes implemented following MOC Process 85% 90% 95%

Lagging

TRI Frequency 0.4 0.3 0.2

Energy (MWh / Ton) 7.8 7.0 6.5

Flaring of Hydrocarbon (kilotonnes) 120 95 85

Table 3: Borouge Marketing & Sales (Pte) HSE Scorecard 2012

Table 4: Abu Dhabi Polymers (ADP) HSE Scorecard 2012

13

Managing Sustainability | Borouge Sustainability Report 2011

Signing of the Responsible Care® Global Charter with the

Association of International Chemical Manufacturers

(AICM) at Beijing University of Chemical Technology on

September 26, 2011

Page 16: Sustainability Report 2011 - Borouge

14 Owners

Board

CEO

BoardAdvisory

Committee(ADP Only)

Audit Committee

Corporate Audit and Assurance Function

ExecutiveLeadership Team

Governance & EngagementBoards and Governance

Borouge consists of two separate companies with two separate Boards of Owners’ representatives. Members are senior executives from the respective Owner organisations (ADNOC and Borealis), having diverse backgrounds in leading oil and gas, petrochemical or plastics industry. Both company Boards are chaired by an ADNOC representative – Borouge’s Production Company (Abu Dhabi Polymers) by His Excellency the Director General of ADNOC, and Borouge’s Marketing & Sales Company by the head of the ADNOC Petrochemicals Directorate.

Both Borouge Boards have an Audit Committee that receives direct input from the Corporate Audit and Assurance Function (CAAF) to ensure that Borouge is operating in accordance with applicable procedures and standards. Abu Dhabi Polymers also has a Board Advisory Committee that reviews and approves the agenda in advance of Board meetings.

Other Abu Dhabi Polymers committees currently include a Board Steering Committee responsible for directly overseeing the Borouge 3 expansion project, procurement committees for overseeing major contracts, and another committee that oversees remuneration. In 2011, a dedicated Vice President was appointed to look after governance for both Companies.

Ethics and Integrity

To ensure that we do business according to high ethical standards, Borouge’s Production and Marketing & Sales Companies have a Corporate Audit and Assurance Function (CAAF). To enhance the control environment and governance structure, Borouge’s Owners decided to integrate the Internal Control Function of Abu Dhabi Polymers and the Internal Audit Department of Borouge’s Marketing & Sales Company under a common Function in 2011. CAAF monitors the performance of the companies in various areas through internal audits to evaluate the effectiveness of the risk management process, internal control structure, and corporate governance processes. The Function is independent and reports directly to the Audit Committee

of both companies with an obligation to advise the CEO in governance-related activities. The scope of the Function includes operations, projects, contracts, business processes, information technology, integrated management systems (IMS), and legal / regulatory compliance frameworks.

Each Department or Function is audited at least once in every three years in detail. In addition IMS and legal / regulatory compliance reviews are ensured once in every two years. After a healthy growth phase that saw the number of audits conducted increase by a factor of six between 2006 and 2010, CAAF stabilised this number in a view of optimizing the efforts and widening the depth and coverage of the audits. In 2011, CAAF conducted 49 audits as well as 49 IMS reviews to ensure compliance with Borouge’s Integrated Management System. The increasing focus on our operations, processes, and contracts is important for maintaining the integrity of our business, as we continue to expand.

Borouge demands the highest standards of ethics in pursuit of its day to day activities and everyone in Borouge is expected to make their decisions in consideration of this fact.

The Borouge Ethics Policy provides necessary guidelines to help employees make the right choice in relation

Figure 5: Borouge Governance Structure

The number of audits conducted by the Corporate Audit and Assurance Function has increased six fold between 2006 and 2010, and then stabilised in 2011 to further enhance the quality of the reviews by widening their depth and coverage

Page 17: Sustainability Report 2011 - Borouge

Governance & Engagement | Borouge Sustainability Report 2011

15

Figure 6: Internal Audits

Borouge VP International Affairs representing

Borouge and the UAE at an overseas conference

to work ethics; conflicts of interest; use of property; compliance; relationships with competitors, government officials, customers and suppliers; commissions, fees and similar payments; and proper control and accounting. Guidance is taken from ADNOC’s and Borealis’ policies which have been adapted to suit Borouge’s operations. Borouge believes and urges its employees to live up to the message that ‘There is no right way to do wrong...’.

No incidents of fraud, conflict of interest or other unethical act have been identified or disclosed in 2011. Borouge operates an Ethics Helpline and an anonymous feedback link on its intranet that allows any employee to serve as a whistleblower for such incidents without fear of retaliation.

All employees, upon joining the Company, are briefed on Borouge’s Ethics Policy as part of their induction training and are subsequently provided with refresher Ethics Workshops tailored to their role every two

years. In 2011, CAAF conducted induction trainings for 125 new employees. Ethics refresher sessions were provided to 131 employees from various functions across

the company. In 2012, CAAF will be conducting Ethics Workshops to cover the entire population of Borouge’s Marketing & Sales Company.

In order to strengthen the effectiveness of ethics assurance mechanism, an ethics campaign was launched in December 2011 to significantly increase awareness of Borouge employees on their ethical responsibilities.

No legal action, non-compliance, or fines were reported with regard to any aspect of operations in 2011. Each departmental function is responsible for addressing issues in its own area of responsibility - for example Corporate HSE handles legal matters related to the environment.

Public Policy Participation

As an active member of the community, Borouge has been involved in several public policy discussions during 2011 through the VP International Affairs, who represented Borouge overseas in 2011 by participating in official UAE trade delegations in Spain and Australia.

Borouge is a key member of the GPCA Plastics Committee whose role is to discuss and analyse all

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Abu Dhabi Polymers Markteing & Sales Company

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16

issues relevant to production, marketing, and image of plastic products. In 2011, Borouge sponsored the Marine Litter International Conference hosted by the GPCA in Dubai, which aimed at harmonising the global plastics industry’s activities with regard to this important issue.Through its lobbying actions and high-level relationships, our VP International Affairs helps to build the positioning of Borouge as an innovative value creating provider of plastics solutions that address major local and global challenges.

Borouge 2015 Strategy

Borouge’s long term strategy in the polyolefins industry, shared with Borealis, is based on: • Growing our business in infrastructure, automotives

and advanced packaging;• Expanding our Abu Dhabi complex to supply growth;• Pursuing operational excellence considering HSE at all

times;• Achieving a step change in innovation;• Exceeding in serving our customers with a focus on

quality and reliable execution;• Building a cross-cultural organizational capability.

The significant capacity expansions at Ruwais and entrance into new markets are creating significantly greater customer and product, as shown in Table 5.

It is our responsibility to ensure that we have a solid foundation to position Borouge as a leading provider of innovative plastics solutions in the industry and deliver upon our value added strategy and mission.

Stakeholder Engagement

Borouge values the perspectives of stakeholders, whether employees, industry peers, suppliers, consumers, government bodies, or society at large.

Table 5: Evolution of Customer and Product Complexity

Borouge 1 Only With Borouge 2 & 3

Number of customers 194 > 3,500

Number of products 19 80

Case Study:

“Borouge 2015” Programme

To ensure that we have the necessary capabilities,resources and processes to capitalise on theopportunities and meet the challenges in astructured approach, in cooperation with theProduction Company, the Board of Borouge’sMarketing & Sales Company has approved acomprehensive transition programme called“Borouge 2015”. The objectives are to:• Further develop the Marketing & Sales strategy

with a focus on capability enhancement andcommercial excellence;

• Implement a new organisation structure andidentify resources and capabilities required;

• Transform the logistics set-up by implementing aflexible and competitive Supply Chain network;

• Define and align the business rules andprocesses to better plan and increase customerservice levels;

• Align performance management and capacitybuilding across the organisation;

• Ensure adequate recruitment and manningstrategy for Borouge 3 growth;

• Determine IT upgrading requirements for thevarious business processes.

These groups are engaged through a variety of means including surveys, publications, direct meetings, and other forums.

The public and media are primarily interested in the impacts of Borouge’s activities on the environment and local communities. Our customers are concerned with product quality and timely delivery, while our owners, ADNOC and Borealis, are focused on Borouge’s HSE and economic performance.

Borouge’s representatives attending the Chinaplasexhibition

Page 19: Sustainability Report 2011 - Borouge

17

Our Key stakeholders How we engage

Employees

• Induction programmes• Employee surveys / Annual employee appraisals• Innovation Awards• Intranet (Bornet) and e-mail• Quarterly internal newsletter (Connect)• Training programmes, seminars, workshops• Open forums• Social activities (Health & Social Day, Annual Party, Team Building and Family Days)• Polls on Intranet

Owners

• Country visits• Participation in inauguration events• Visits to key customer events (e.g. ChinaPlas)• Board meetings• Newsletters and company publications• ADNOC HSE Committees: HSE Steering, Occupational Health, Crisis & Emergency Management,

Environment

Industry

• Trade/industry groups (e.g. GPCA, AICM, SCIC)• Exhibitions, conferences, seminars and workshops• Borouge Academies• Speaker invitations at conferences, seminars, workshops

Suppliers / Contractors

• Tender processes• Workshops, meetings, conferences• Audits• Contractor awards and workshops

Customers

• Participation at key industry exhibitions, conferences, seminars, workshops• Speaker invitations at conferences, seminars, workshops• Delivery of Technical Papers from Borouge at key conferences• Product literature (e.g. case studies, safety and product datasheets)• Newsletters (e.g. Borpipe)• Invitations to Borouge inaugurations• Annual customer survey

Government

• Presentation to Abu Dhabi Executive Council• Publications and events (e.g. The Highflyers book of the UAE Ministry of Foreign Trade which

highlights Borouge as one of the successful UAE companies investing abroad)• Chinese delegations to the UAE• International Affairs function, participating in trade delegations

Public

• Sponsoring social and environmental activities (e.g. Water for the World™ programme)• Scholarships at four universities in China and two universities in India• Press releases, newsletters, national advertising campaigns in newspapers and magazines of the

UAE and across our regions• Main feature in the Oil & Gas Yearbook in the UAE / Oxford Profile / The Highflyers• Conferences, seminars, exhibitions• Videos (e.g. “Why Plastics are too valuable to throw away?”, “How Plastics help protect the planet?”)

distributed to schools and general public in the UAE

Media• Press releases in newsletters, newspapers and magazines• Familiarisation visits and executive interviews with the media

Table 6: Stakeholder Engagement

UAE governmentrepresentatives

visiting Borouge’s headquarters in

Abu Dhabi

Governance & Engagement | Borouge Sustainability Report 2011

Page 20: Sustainability Report 2011 - Borouge

18

Risk ManagementSystematically identifying the level of health, safety, environmental and quality risks of processes and activities that may lead to loss for our business operation are critical. Risk assessments of plants and operations are carried out and our business processes are regularly reviewed to ensure that hazards are identified and the associated risks mitigated to a level which is as low as reasonably practicable (ALARP).

The Borouge HSE Management System provides the framework for the management of HSE risks throughout our operations and activities, while our Process Safety Management System provides tools for managing operational and project related risks.

Risk Studies

To understand and control the impact of our operations, we systematically use health, safety, and environment impact assessments (HSEIAs) during the planning and development phases of our projects in compliance with local regulations and to ensure that they proceed in an environmentally-sensitive and risk-controlled manner. In 2011, approval was obtained from the Supreme Petroleum Council - the Emirate of Abu Dhabi’s oil, gas and petrochemicals industry regulator - for the Phase II HSEIA report for Borouge 3. The Phase III HSEIA report will be prepared in 2012.

In 2011, 17 Hazard and Operability (HAZOP) studies were conducted for Borouge 3 (Polyolefins Plant, LDPE Plant, XLPE Plant) and for in-house projects (such as Flare Recovery Project, Colour Grade Project). In addition, a total of 232 Task Risk Assessments (TRA) and 3 Hazard Identification (HAZID) studies were conducted for key activities, operations and facilities at Ruwais.

Emergency Preparedness

The plant in Ruwais has a comprehensive Emergency Response System in place to deal with the various types of emergency situations that may occur while conducting the business.

Emergency preparedness is regularly practised in Ruwais, as demonstrated by the exercises and drills held during 2011:• A total of 323 basic fire drills were conducted, out

of which one exercise was conducted with the participation of other Group Companies as per the Ruwais Emergency & Fire Mutual Aid Committee (REFMAC) agreement. Two buildings evacuations exercises were also undertaken.

• In addition, Borouge participated in five REFMAC Emergency Exercises held in neighbouring ADNOC Group of Companies, as well as in 4 International Ship and Port Security (ISPS) Security Exercises and two Critical National Infrastructure Authority (CNIA) Security Audits.

Borouge has adopted an Incident Command System (ICS) based crisis and emergency management system which includes Facility Response Plans (FRP) at the tactical level and Crisis Management Plans at the strategic level. In 2011, 14 training sessions were provided to the Incident Management Team (IMT) in Ruwais, and six sessions to the Crisis Management Team (CMT) in Abu Dhabi.

Borouge is now developing a dedicated Crisis Management Plan for the Marketing & Sales Company, covering all the internal and external incidents and emergencies that could impact the Borouge business along the supply chain. The complete implementation of this plan is expected by mid-2012 and will lead to a unified comprehensive crisis and emergency management system, interfacing all Borouge facilities around the globe.

Emergency preparedness is not just limited to our operations. Borouge contractors are required to conduct regular site evacuation drills and their emergency plans are reviewed and revised to align with our FRP, targeting a seamless response across all Borouge activities to protect our people and assets, and the community beyond our boundaries.

Page 21: Sustainability Report 2011 - Borouge

Risk Management | Borouge Sustainability Report 2011

19

Process Safety and Asset Integrity

Process safety focuses on managing the integrity of operating systems and processes by applying good design principles, engineering and operating practices.The Borouge Process Safety Management System was initially developed in 2009, in line with Borouge Sustainability Framework and HSE Management System, and was updated in 2011. Focus in 2011 was put on:• Identification of HSE Critical Equipment and Systems;• Implementation of an Alarm Management System;• Development of a new automated and more efficient

Technical Management of Change (MOC) Process;• Development and implementation of the Borouge

Integrity Threats Database;• Definition of guidelines for Risk Management in line

with ADNOC requirements and industry practices.

A process safety workshop was also organised in Ruwais to share experience and lessons from recent process safety incidents.

No critical process safety incident was recorded in 2011. 78% of physical changes were implemented following the Management of Change process, below the target set of 90%, highlighting the need to further develop and implement the MOC process in 2012.

From 2012 onwards, efforts will focus on pro-active activities to enhance Risk Management and Asset Integrity, continuing implementation of the above initiatives, and developing an Operational and Process Safety Risk Register.

Contractor Management

Due to the nature of our business and the growth we are currently experiencing, we hire numerous contractors to support us. In 2011, this included an average of 9,400 construction workers building Borouge 3, workers in our logistics hubs in Asia, and a number of third party contractors involved in the transportation of our products. While these are not our direct employees and we do not have direct control over a significant number of them, we recognise that

their activities represent both significant risks and opportunities.

We have taken the following measures to ensure that our construction contractors in Ruwais manage HSE in line with the Borouge and ADNOC rules and policies:• HSE requirements clarified to the contractors at the

tendering stage; • Training of contractor staff on HSE-related topics in

accordance with the new contractor HSE training matrix;

• Preparation by each contractor of an annual HSE plan reviewed and approved by Borouge. An HSE Plan workshop was organised with contractors in 2011;

• Conduction by contractors of their own internal HSE audits, whereas Borouge carries out external audits as per annual HSE audit plan;

• Contractor HSE monthly meetings and workshops to disseminate HSE requirements and lessons learnt;

• Contractor personnel involved in Task Risk Assessment (TRA), Safety Observation training, and incident investigations;

• Active participation by contractors in HSE campaigns organised by Borouge;

• Submission of monthly HSE leading and lagging performance metrics to Borouge.

Borouge recognizes and rewards the HSE performance of their contractors in Ruwais through annual HSE awards, and participation of contractors in ADNOC Annual HSE Awards.

Our three logistics hubs in Asia are required to maintain quality, environmental, and health and safety management systems that meet the respective international standards – ISO 9001:2008, ISO 14001:2004, and OHSAS 18001:2007. Our Guangzhou hub attained the tri-certification in 2010 and our Logistics Service Provider (LSP) in Shanghai achieved ISO 14001:2004 certification in January 2011. Our LSP in Singapore had achieved ISO certification prior to being selected as our logistics provider.

Borouge Fire Fighters during a Ruwais

Emergency & Fire Mutual Aid Committee

(REFMAC) exercise

19

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20

EconomicKey Financial Information

Borouge’s objective is to create economic wealth and opportunities for the Middle East and Asia both now and for generations to come. Beyond our shareholders there are many interested parties that depend on the Company’s results, including employees, suppliers, public authorities and local communities.

The below table provides a summary of Borouge’s key economic data for 2011.

Market Presence

Borouge sells polyethylene and polypropylene resins and compounds to converters in the countries of the Middle East, Africa, Indian sub-continent and Asia Pacific. The markets in which Borouge operated are a mixture of large, high gross domestic product (GDP) growth economies (India and China), large, low GDP growth economies (e.g. Japan) and many small-to-medium size economies spread across a large and diverse area.

The grades produced are sold to customers who are active in many application areas in the following sectors: water/sewage/gas pipe, steel pipe coating, energy and communications wire and cables, automotive and appliances, and advanced packaging. Borouge is also the dedicated distributor of Borealis’ polyolefins in the Middle East, Africa, Indian sub-continent and Asia Pacific.

Following the successful arrival of Borouge 2 volumes in 2010, polypropylene has been added to the product range and significant volumes of both polyethylene and polypropylene are sold across all the territories where Borouge is active. A major share of volume will be targeted at the Chinese and Indian markets, which continue to experience significant growth.

Middle East and Asia polyethylene demand is indeed expected to grow at an average rate of 7.3% per year until 2014, whereas for polypropylene, an average growth rate of 6.5% per year is expected. Projected growth rates in the Borouge region remain significantly above the global average which is expected to be around 3.5% in 2012.

Table 7: Key Economic Data

Economic Aspect Value 2011 (US$ million)

Revenues 2,532.5

Operating costs 822

Employee salaries and benefits 261.5

Payments to providers of capital 19.5

Community/social investments 2.6

Purchase orders and contracts 222.6

Training costs 4.36

Environmental expenditures 3.9

Production Value 2011 (tonnes)

Polyethylene Ruwais 1,063,136

Polypropylene Ruwais 588,915

Ethylene Ruwais (exported) 224,365

Resins CMP Shanghai 22,395

Page 23: Sustainability Report 2011 - Borouge

Economic | Borouge Sustainability Report 2011

2121

Borouge sales will expand in all application sectors, however it is forecast that the majority of volume increase will be into film and moulding applications. This will be a consistent trend up to and after the arrival of Borouge 3 volumes in 2014, with the addition of low density polyethylene production capability.

Procurement Practices

Our commitment to responsible procurement activities and to local suppliers is highlighted in the Borouge Procurement Policy that specifies the following:• To conduct all procurement activities in full

compliance with all Abu Dhabi and UAE laws (or the legal requirements of the location when operating outside the UAE), including the legal requirements for registration and licensing of vendors, contractors and consultants;

• To contribute to the local economy by using local firms whenever they can deliver the required quality of materials and services within the required time at competitive prices.

In 2011, approximately 90 percent of the procurement budget was awarded to local suppliers.

Borouge has approximately 104 significant suppliers of materials and services. While there are no specific human rights clauses in materials contracts service contracts for manpower supply require the supplier to adhere to ADNOC standards with regard to accommodation, messing, recreation, medical facilities, fixed minimum salaries, air tickets, and end-of-service benefits.

One of the major procurement risks is the shortage of supply for vital materials that are essential for the health and safety of employees and/or for the production continuity. Conscious of this risk, our Procurement Department has embarked on a series of initiatives to prevent the risk of supply shortage:• Development of Long-Term Price Agreements with

key suppliers;• Implementation of internal (in Ruwais) and external

(on suppliers’ premises geographically close to Ruwais) ‘safety stocks’;

• Development of privileged relationships with strategic partners.

We have also launched a paperless procurement process through the implementation of an on-line registration and qualification system for vendors and suppliers. In addition, the opportunity to implement online bidding for common commodity products is currently under consideration.

Following the successful arrival of Borouge 2 volumes in 2010, polypropylene has been added to the product range and significant volumes of both polyethylene and polypropylene are sold across all the territories where Borouge is active

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22

Environmental KPI Value 2010 Value 2011 Key Events of 2011

Hydrocarbon flaring

(kilotonnes) 102 118

• Flaring target of 107 kilotonnes not achieved in 2011 due to a series of process upsets in October.

• Polyolefins Membrane Flare Recovery Project at FEED stage.

• Flare benchmark study undertaken in 2011.

Energy consumption

at Ruwais facility

(MWh/ton polyolefins

produced)

10.5 6.9

• Launch of an Energy Management System in 2011.

• Set-up of a new target of 7.0 MWh/ton polyolefins produced for 2012.

Greenhouse gas

emissions (tCO2eq/ton

production)2.13 1.47 • See above key initiatives on flaring and energy.

Waste held at Ruwais

facility (tonnes) 500 18

• Step change with Industrial Waste Management at Ruwais led to reduction of on-site waste from 500 tonnes in 2010 to 18 tonnes in 2011, exceeding the outstanding target of 30 tonnes.

Desalinated and

municipal water

consumption (m3/ton

production)

3.0 1.6• Part of treated wastewater reused for on-site

irrigation of green areas in Ruwais.• Water Footprint study undertaken to identify

improvement opportunities in terms of water and wastewater management.Effluents discharge

(m3/ton production) 0.99 0.72

Environment Scorecard

Page 25: Sustainability Report 2011 - Borouge

Environment | Borouge Sustainability Report 2011

23

EnvironmentResponsible management of our environmental impact is a core value of Borouge, reflected in our corporate value ‘We respect the communities and the environment in which we live and work.’ This commitment takes an additional dimension with the major expansion of our activities in the Middle East and Asia.

Page 26: Sustainability Report 2011 - Borouge

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EnvironmentOur environmental impacts come primarily from two areas – our production facilities in Ruwais and Shanghai, and our distribution network that delivers products to our customers. We have direct control of our production and take full responsibility for its associated impacts. We only have an indirect control of the distribution network, but in an effort to leverage and increase our role as a market leader, we are evaluating the environmental impact of the distribution network with an increased focus.

We are not reporting environmental data for our offices as they are negligible compared to production facilities. Environmental impact of our offices is however considered, and following reduction actions have been implemented:• Implementation of automatic power switching off

process in Abu Dhabi and Ruwais offices;• Launch of a recycling programme for paper, plastic

PET bottles, drink cans and empty printer ink cartridges in the Singapore office.

Environmental impacts of our production activities are detailed in the following sections. As a general trend, most environmental parameters experienced an increase in absolute value in 2011 compared to 2010, in direct relation with the production doubling after the first complete year of operation

for Borouge 2. Our environmental intensities (consumptions or releases per ton produced) however improved in 2011, as we stabilized the production process after a resource consuming start-up of Borouge 2 in 2010, and reached levels comparable to 2009. For some parameters, intensities were even better in 2011 than 2009, thus showing the efficiency of our ongoing initiatives to mitigate our environmental footprint.

Energy

In 2011, Borouge’s total energy consumption amounted to 11.78 TWh. 90% of this consumption consists of direct energy at the Ruwais facilities, divided into 62% fuel gas purchased from Abu Dhabi Gas Industries Limited (GASCO) and 38% internal fuel generated. The remaining 10% of the total energy consumption consists of indirect electricity. In Ruwais, electricity is provided by the neighbouring Abu Dhabi Oil Refining Company (TAKREER). In Asia, the CMP facility and the logistics hubs do not have any direct fuel consumption, and electricity is supplied by a local energy provider.

Borouge’s total energy consumption increased by 16% between 2010 and 2011 while our production volumes almost doubled. Our energy intensity improved by 41% in 2011 to reach 6.2 MWh per ton produced (including polyolefins, ethylene and resins

Figure 7: Energy Consumption and Intensity

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Page 27: Sustainability Report 2011 - Borouge

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– equivalent to 6.9 MWh per ton polyolefins produced for Ruwais facility). This intensity level is even lower than the 2009 level of 8 MWh per ton produced, thus highlighting the efforts made in terms of energy management.

With the spectacular capacity growth of the Borouge Complex in Ruwais, the need to develop tools to better understand our energy position and management was recognized by the Top Management. In 2011, a Task Force was initiated to develop a Borouge Energy Management System, with the objectives to:• Determine the current status of energy efficiency at

Borouge;• Develop an energy management and reporting

system;

• Raise energy awareness within Borouge organisation;• Identify improvement potential by analysing reported

data;• Initiate detailed studies to achieve improvement

potential.In line with ADNOC guidelines to improve energy efficiency by 25% over 25 years, an energy KPI was included in Borouge’s 2012 HSE Scorecard for monitoring purposes, with an initial objective of 7.0 MWh energy consumption per ton polyolefins produced at Ruwais facility.

Climate Change

In an effort to minimize our carbon footprint, we have been tracking and reporting our direct (scope 1) and indirect (scope 2) greenhouse gas (GHG) emissions since 2009.

Environment | Borouge Sustainability Report 2011

2011 Scope 1 – Direct GHG emissions Scope 2 – Indirect GHG emissions

Tonnes CO2

equivalent2,797,929 925,418

Table 8: Greenhouse Gas Emissions

Borouge Team receiving the ADNOC HSE Award for Environment during the 2010 ADNOC HSE

Awards Ceremony

Figure 8: Direct CO2 Emissions and Intensity

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Our scope 1 GHG emissions amounted to almost 2.8 million tonnes CO2 equivalent in 2011. Direct GHG emissions mainly originate from combustion processes and flaring at the Ruwais production facilities, as well as fugitive emissions. Carbon dioxide (CO2) emissions account for 98% of our direct emissions, the remaining 2% being related to methane (CH4). Other GHGs such as nitrous oxides (N2O), perchlofluorocarbons or hydrofluorocarbons are not accounted for in our inventory as they are negligible compared to CO2 and CH4.

Our scope 2 GHG emissions amounted to almost 0.93 million tonnes CO2 equivalent in 2011 and are exclusively related to electricity consumption.

Our direct CO2 emissions increased by 38% in 2011 compared to 2010. The CO2 intensity improved by 30% to 1.44 tCO2 per ton production. This level is however still higher than the level of 1.32 tCO2 per ton production in 2009, highlighting remaining efforts to be made to further reduce our carbon footprint.

Our direct CH4 emissions were reduced by 7% between 2010 and 2011. The higher methane

Figure 9: Direct CH4 Emissions and Intensity

emissions in 2010 were directly linked to the commissioning activities for new B2 plants.Initiatives to reduce GHG emissions are focused on energy efficiency with the development of an Energy Management System (see previous section) and on flaring reduction.

Efforts undertaken in 2010 to reduce flaring were rewarded by an ADNOC HSE Award in 2011 (see Case Study).

In 2011, Borouge continued its effort towards a flare-less steady state operation. A benchmarking study was undertaken in order to elevate Borouge’s position amongst global petrochemical plants with regard to flaring performance. To complete this first study of its kind in the region, flare reports from 23 olefins and polyolefins (PE and PP) plants were reviewed and analysed.

Several flare reduction projects – such as use of nitrogen as sweep gas in flare headers, PO flare recovery project – were identified and are currently in FEED study or engineering stage. Implementation of these projects will enable Borouge to reduce

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Methane intensity in ton CO2eq/ton production Our direct CH4 emissions were reduced by 7% between 2010 and 2011

Page 29: Sustainability Report 2011 - Borouge

27

flaring by 85 kilotonnes per year and greenhouse gas emissions by 240,000 tCO2eq per year. The implementation of the PO flare recovery project, which will use membrane units to recover hydrocarbons and nitrogen from the purge bin gases for all five PE and four PP plants, will in particular lead to zero continuous flaring of hydrocarbons during normal operation of polyolefins plants, thus recovering valuable feedstock and leading to an overall reduction of approximately 150,000 tonnes CO2 emissions per year.

Despite our flaring initiatives and efforts, we were not able to reach our flaring target of 107 kilotonnes for 2011 due to a series of process upsets during the month of October. The new flaring target for 2012 has been set up at 95 kilotonnes.

In the next years, focus will also be put on flare metering improvement and identification of further flaring reduction projects to reach the objectives of our flaring plan 2012-2016.

Air Emissions

Non-GHG emissions relevant to Borouge’s operations are sulphur dioxide (SO2), nitrogen oxides (NOx),

Case Study:

Borouge wins ADNOC HSE Award

2010 for Environment

An ADNOC HSE Award was granted to Borougein the Environment category for the Borouge 2cracker successful start-up with environmentalfriendly nitrogen cool down. Start up withnitrogen at the world’s biggest ethane crackerat Borouge 2 cooled down the plant, and itsequipment sensible to temperature stress, toas low as minus 100 degree Centigrade priorto hydrocarbon introduction. Subsequently, theplant start up time was greatly reduced withless overall flaring and significant reduction ofCO2 emissions, resulting in environmental andeconomical benefits.

Environment | Borouge Sustainability Report 2011

Implementation of identified flare reduction projects will

enable Borouge to reduce flaring by 85 kilotonnes per year and greenhouse gas emissions by

240,000 tCO2eq per year

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Figure 10: Hydrocarbon Flaring

non-methane volatile organic compounds (NMVOC) and carbon monoxide (CO), which originate from combustion, flaring and fugitive emissions. Air emissions and intensities are shown in Figure 11.

SO2 emissions mainly originate from liquid fuel combustion and are rather low compared to other

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air emissions due to the use of low sulphur-content fuels. NOx are emitted by both liquid fuel and fuel gas combustion. SO2 and NOx emissions increased by 45% and 43% respectively between 2010 and 2011, but intensity levels improved by 26% and 27% respectively due to the stabilisation of Borouge 2 production process.

CO emissions increased by 9% only while production levels doubled and saw its intensity improve by 44% to reach levels comparable to 2009. This is particularly related to successful initiatives to minimise incomplete combustion in boilers.

NMVOC emissions are fugitive emissions mainly originating from leakages at valves, flanges, open end, and seals. The stabilisation of plants operations in 2011, added to the major production capacity increase, led to reduced NMVOC intensity by 50% to 0.90 kg NMVOC per ton production, significantly below the 2009 level of 1.11 kg NMVOC per ton

production. To further reduce fugitive emissions, Borouge awarded during the third quarter of 2011 a contract for fugitive emissions monitoring programme to start in 2012.

Our emissions of ozone-depleting substances were limited to 50kg hydrochlorofluorocarbons (HCFC - R22), released primarily through the routine maintenance of air-conditioning systems (leak reparation and top-up of HVAC equipment).

To measure the improvement as well as to identify any potential gaps in terms of air emissions, a programme was chartered in coordination with ADNOC AQMS team. The ambient air monitoring programme involved checking the air quality at different locations inside the Borouge Complex in Ruwais through two campaigns covering both the summer and winter seasons. The monitoring was undertaken with state-of-art ADNOC air monitoring stations and covered SO2, NOx, CO, H2S and VOC

Figure 11: Air Emissions and Intensities

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among others. Results demonstrated that all monitored pollutants are meeting the ambient air quality standards requirements.

Transportation

We started to examine the environmental impacts of transportation in 2009 and are gradually expanding our reporting scope. In 2011, we were able to report on truck movements throughout Middle East and Asia, marine transport from Abu Dhabi to Asian logistics hubs and other port locations worldwide, company cars and employees commuting, and air business travel. Distances travelled in 2011 by mode of transport are summarised in Table 9.

Although no formal reduction target has been set to date with regard to transportation, the following mitigation strategies have been implemented:• Start-up of the Ruwais Distribution Centre (RDC)

which will serve as a distribution hub for the GCC and East Levant countries (see Case Study);

• Participation of Borouge Subject Matter Expert in GPCA Taskforce for the development of Responsible Care Distribution Code whose objective is to reduce the risk of harm posed by the distribution of chemicals to employees, general public and the environment;

• Procurement and logistic departments are working together on packaging improvement initiatives,

shrinking package sizes and optimization of loading efficiency to reduce transportation costs and environmental impacts;

• Selection of ‘Environmental Conscious’ Logistics Service Providers (LSP) – our LSP in Shanghai achieved ISO 14001:2004 certification in January 2011.

Environment | Borouge Sustainability Report 2011

Mode of Transport Detailed Scope Kilometers Travelled

Road – Vehicles

• Truck distribution throughout the Middle East and through logistics hubs in Asia.• Company cars at Abu Dhabi office.• Employees commuting with personal cars and company buses in Abu Dhabi

(Ruwais and Headquarters) and in Asia (Logistics hubs and Headquarters)

12,065,045

Air – Planes • Borouge employees’ business travel. 13,584,820

Marine – Vessels• Marine transport from Mina Zayed Port in Abu Dhabi to Asian logistics hubs

and other port locations worldwide. 1 105,289,912

Table 9: Kilometres Travelled by Mode of Transport

Case Study: Towards Sustainable

and Environmental Friendlier Supply

Chain Network

The Ruwais Distribution Centre (RDC),which started operations in December2011, will serve as a direct distribution hubfor the region and will therefore preventunnecessary double movements. Thisproject will provide various sustainabilitybenefits:• Economical benefits: reduced marine and

road transportation costs;• Environmental benefits: reduced road

transportation will lead to decreased airemissions – estimated reduction of 700tonnes CO2 in 2012;

• Social benefits: reduced traffic congestionand waiting time in Abu Dhabi, contributionto the development of the western region and creation of job opportunities.

Note: Vessels used for sea transport are operated by several third party shipping companies which also transport various other goods along with Borouge products.’

The Ruwais Distribution

Centre will reduce transportation and

provide economical, environmental and

social benefits

Page 32: Sustainability Report 2011 - Borouge

30

• In Ruwais, company buses are used to transport staff to and from the plant;

• Video and telephone conferencing is used instead of face to face meetings when possible.

Water

All water used and discharged by our production facilities in Ruwais originates from and is routed to the Arabian Gulf, which is not considered to be adversely affected by the specific operation of our facilities. Over the course of 2011 we were supplied with 2.92 million m3 of potable water and distilled water by the neighbouring desalination plant operated by TAKREER. We also used more than 1 billion m3 of seawater – also supplied by the neighbouring TAKREER utilities plants – to serve as non-contact cooling water, all of which was subsequently returned to the sea. Cooling water is routed through a heat exchanger and monitored prior to discharge to ensure compliance with regulations.

Our process and sanitary effluents in Ruwais are treated at Borouge’s dedicated effluent treatment

plant (ETP) and are monitored daily for compliance with ADNOC discharge standards. The ETP consists of a four-stage treatment (oil removal, biological treatment, tertiary treatment and filtration). It processed 1,565,675 m3 of effluents in 2011. 13% of the processed effluents were reused on-site for irrigation of green areas, and the remaining 87% were discharged into the Arabian Gulf.

Water used at our CMP facility in Shanghai and at our three logistics hubs in Asia originates from the municipal distribution systems and amounted to approximately 68,000 m3 in 2011. Wastewater is discharged to the municipal wastewater networks. Quality monitoring is performed periodically to ensure compliance with regulations.

Discharged process and sanitary effluent volumes increased by 43% while production almost doubled between 2010 and 2011. As a result, process effluents intensity improved by 27% to 0.72 m3 per ton production. This level is significantly below the 2009 level of 0.87 m3 per ton production thanks to the reuse of treated effluents for irrigation in 2011.

Figure 12: Process Effluents Discharge and Intensity

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262,800 m3 of treated effluents were reused for irrigation of green areas in Ruwais in 2011

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31

Cooling water intake and discharge increased by 15% between 2010 and 2011, leading to a 41% improvement on cooling water intensity, back to levels comparable to 2009.

Environment | Borouge Sustainability Report 2011

Figure 13: Cooling Water Volumes and Intensity

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In 2011, we launched a comprehensive Water Footprint Programme with the objective to address water usage and efficiency and raise awareness on this critical resource (see Case Study).

Case Study:

Borouge Water Footprint Programme

Conscious of the water-related challenges,risks and opportunities facing modernbusinesses, Borouge has established andimplemented a comprehensive WaterFootprint Programme.

This programme assessed the current situation regarding water management atBorouge. It identified in particular some gapsand areas for improvement such as the limitedand inconsistent metering and reporting ofwater flows.

Efficiency opportunities were consequentlyformulated in order to enhance on-site watermanagement with regard to introducing adedicated expert on water management in the

organization, improving metering and reporting of water use/wastewater discharge, reducing desalinated water usage, re-using treated wastewater effluent, and increasing operational efficiency of equipment using process water.

An action plan will be developed in 2012 for the implementation of these improvement opportunities, which will enhance Borouge’s performance through reduced environmental impact, increased plant efficiency and reliability, reduced costs, and increased awareness of water priorities.

Borouge is the first of ADNOC Group of Companies and one of the first organisations in the Middle East region to develop and implement such a Water Footprint Programme. We will share the benefits of this programme through a Water Footprint Industry Forum in 2012.

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32

Waste and Spills

We produce hazardous and non-hazardous waste as a result of our operations at the Ruwais facility. Hazardous wastes in 2011 included empty drums and containers, contaminated soil, waste oil, insulation materials, sludge, filters, refractory bricks, etc. Non-hazardous wastes include mainly packaging waste (wood, plastic, paper) as well as metal, tyre, green and domestic waste.

All hazardous wastes from the Ruwais plant are sent to the ADNOC Integrated Waste Management Facility (BeAAT) which was completed in July 2009 with the purpose of handling hazardous waste generated by oil and gas related activities from ADNOC Group of Companies. Wastes sent to BeAAT are either incinerated or landfilled. All non-hazardous wastes are

Measures undertaken for a creative step change in waste management includedthe design and constructionof a centralized Bulk WasteStorage facility

sent to the Municipal Waste Handling Facility and are landfilled.

The CMP facility in Shanghai only produces minimal amount of hazardous waste. Non-hazardous wastes generated mainly consist of production waste (polypropylene discards) and packaging waste (plastic bags, wooden pallets), and are sent to a specialist waste contractor for recycling / reuse.

Quantities of both hazardous and non hazardous wastes sent to disposal experienced a significant increase in 2011 compared to 2010 and reached levels comparable to 2009. This is directly linked to the production increase both at Ruwais and CMP facilities, as well as to the initiative launched to improve hazardous waste management (see Case Study). This

Case Study:

Creative Step-change in Hazardous

Waste Management

With increased capacity and addition ofnew plants in Ruwais, the waste collection,segregation, temporary storage, packingand labelling facilities required bettermanagement and systems.

Measures undertaken in 2011 for a creativestep change in waste management includeddesign of a centralized Bulk Waste Storagefacility with leachate collection and pumpingfacility; Implementation of waste collectionpoints and provision of collection skips;

Organisation of weekly waste collection trips; Awareness campaigns and inclusion of waste management on the agenda of HSE meetings; Development of an IT Hazardous Waste Registry. Temporary on-site storage of waste was also introduced as a KPI on our HSE Scorecard.

Through the above measures, we achieved 100% identification of all hazardous wastes in terms of quantity, analysis and tracking in Ruwais.

The quantity of waste stored on-site was reduced from 500 tonnes in 2010 to 18 tonnes in 2011, exceeding the outstanding target of 30 tonnes.

Quantities in tonnes 2009 2010 2011

Hazardous wastes 1,510 442 1,538

Non-hazardous wastes 2,730 1,086 2,347

Table 10: Hazardous and Non-hazardous Wastes

Page 35: Sustainability Report 2011 - Borouge

Environment | Borouge Sustainability Report 2011

initiative indeed led in 2011 to the removal and disposal of significant volumes of waste which were temporarily stored on-site in Ruwais.

The majority of wastes produced in 2011 were either landfilled (78%) or recycled (18%), as shown on Figure 14. Waste incineration only represented 4% of the disposal processes. Thanks to significant efforts combined, the quantity of waste stored on-site was reduced substantially during 2011.

We experienced two spills at our Ruwais plant in 2011: one spill of approximately 30 m3 of mineral oil from a damaged check valve bonnet gasket and one spill of approximately 115 m3 of propylene gas from a broken purging facility pipeline connection. Immediate corrective actions were taken to mitigate the impact on the environment (cleaning of impacted areas, disposal of contaminated soil) and both incidents were investigated to address root causes.

Biodiversity

Borouge facilities are located in industrial zones and are not in or adjacent to protected areas or areas of high biodiversity. We have not implemented specific actions or initiatives for managing biodiversity, however, impacts of our activities on biodiversity are considered during HSEIA studies. Findings of the HSEIAs and regulatory instructions are systematically incorporated into our management of the environment and biodiversity.

Environmental Expenditures

To support our HSE personnel, we devote a significant budget to managing the environmental impacts at our production facilities.

In 2011 our total environmental expenditures were approximately AED 14.4 million. A percentage breakdown of environmental expenditures is shown in Figure 15.

45%

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Effluent Treatment Plant (Ruwais)

New Project Development

Environmental Management Costs

Figure 15: Distribution of Environmental Expenditures

78%

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18%

Incineration

Landfill

Recycling

Figure 14: Distribution of Waste per Dis-posal Process

Through waste management measures,

we achieved 100% identification of all

hazardous wastes in terms of quantity, analysis and

tracking in Ruwais

33

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34

Social KPI Target 2011 Value 2011 Key Events of 2011

Total Recordable Injury (TRI) Frequency 0.3 0.23

Implementation of leading safety metrics, safety training programmes and awareness campaigns led to one complete year with no Lost Time Injuries (LTIs) with more than 30 million man-hours worked.

Total Number of Training Hours - 222,700

Design and implementation of 37 new in-house training courses, vendor training needs as part of B3 People Strategy and investment in the Emiratization programme led to 56% increase in training hours between 2010 and 2011.

Number of UAE Nationals Confirmed in Positions – Abu Dhabi Polymers

60 73

Further focus put on the UAE Nationals Under Development programme led to the confirmation of 73 UAE Nationals in established positions in 2011, above the outstanding target of 65.

Retention Ratio (%) – Marketing & Sales Company

95 96 • Critical focus is put on attraction and retention strategies as part of B3 People Strategy.

• Successful launch of the online Career Portal.• Detailed recruitment and resource planning

strategies are being developed in preparation of Borouge 3.

Recruitment vs. Approved Headcount Increase (%) – Marketing & Sales Company

90 77

Employee Opinion Survey Result (%) – Abu Dhabi Polymers

82 912011 EOS results were above target for Abu Dhabi Polymers but below threshold for the Marketing & Sales Company. Leadership and empowerment, and pay and benefits are the main areas of dissatisfaction among employees, and will be closely looked into by the Senior Management.

Employee Opinion Survey Result (%) – Marketing & Sales Company

67 56

Our People Scorecard

Page 37: Sustainability Report 2011 - Borouge

Our People | Borouge Sustainability Report 2011

35

Our PeopleBorouge recognizes that people are its most important asset and the key to its continued success. Providing competitive employment packages, ensuring the health, safety and well-being of our employees and encouraging their development is therefore of utmost importance to us.

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36

Our People The Administration Group was restructured from 2010 onwards to implement optimised regional human resources and administration (HR&A) services in the Middle East and Asia Pacific regions by integrating HR&A Services. The Administration Group now consists of five departments, namely Human Capabilities, Strategy & Support, General Services, and two HR & Administration Departments, for the Middle East and Asia Pacific regions respectively. This integrated structure is designed to deliver strategic HR&A capability at a corporate level with local representation in areas including learning and development, strategy and support, recruitment, and day-to-day HR&A services.

In 2011, key focus on labour practices was put on employees’ health and safety, employee engagement, automation of HR&A services, and Borouge 3 People Strategy including recruitment, resource strategy and training.

Employment Conditions

By the end of 2011, Borouge employed a direct workforce of 2,104 employees and UAE Nationals Under Development for both Abu Dhabi Polymers and the Marketing & Sales Company. The number of our contractors gradually increased during 2011 for the construction of Borouge 3, leading to a yearly average of approximately 9,400 contractors.

All Borouge employees are full-time employees and 92% of our workforce have permanent contracts.

In 2011, 104 employees left the company, representing an attrition rate of 4.9%. This relatively low rate reflects employee satisfaction with regard to their job and work conditions. The highest attrition rate was among employees over 50 years old.

Detailed recruitment and resource planning strategies are being developed in preparation of Borouge 3, and critical focus is put on attraction and retention strategies as part of B3 People Strategy. The online Borouge Career Portal was successfully launched in 2011 to support our recruitment strategy.

Borouge provides its employees with competitive employment packages, following ADNOC’s compensations and benefits policy in defining the grade, compensation, and benefits of Abu Dhabi Polymers employees. For our Marketing & Sales Company employees, we have established competitive salary and benefit scales based on regional industry averages as determined by a commissioned third-party consultant. As a result, the ratio of Borouge’s standard starting salary compared to the local legal minimum wage (or a comparable market data for locations where there is no guaranteed minimum wage) varies between 1.22 and 4 depending on the locations where Borouge has operations.

All employees are provided with the following benefits:• Healthcare insurance in compliance with the

regulations of the specific country;• Housing and child/education allowances provided

Table 11: Turnover in 2011

CategoryNumber of employees who left

in 2011Turnover rate

Male 90 4.9%

Female 14 5.3%

<30 years old 28 5.3%

30-50 years old 57 4.1%

>50 years old 19 10.6%

Page 39: Sustainability Report 2011 - Borouge

37

for expatriates living in India, China, Hong Kong, Singapore, and the UAE;

• Furniture purchase and car allowances are provided depending on employee’s grade;

• Employees starting in the UAE are entitled to a minimum 29 days of leave each year, and in our other locations, a minimum of 18 days a year;

• Retirement provisions include a pension scheme for UAE nationals and end of service benefits for expatriates.

Protecting our Employees

In line with Borouge’s value ‘We care for our health, safety, and environment’, the health and safety of our people is our number one priority and we are fully committed to continually improving our health and safety performance.

There are currently seven distinct HSE committees within Borouge: four in Ruwais (among which one is related to contractors), one in Abu Dhabi, one in CMP Shanghai, and one in Singapore. The HSE Committee for Singapore’s office was created in 2011 and held its first meeting on June 17, 2011. These committees meet on a monthly basis to discuss key occupational health and safety issues. In Singapore, awareness sessions on Workplace Safety & Health Act and subsidiary legislations (Occupational Safety & Health Law in Singapore) were provided for office employees in 2011.

Safety

Further to our world-class safety performance in 2010, Borouge Senior Leadership recognized that our past performance raised expectations, but offered no guarantee in personal safety. This was particularly true as 2011 was deemed to be an extremely challenging year for Borouge, with early operation of new facilities, significant organizational change, and significant overseas and multi-cultural contractor recruitment for the Borouge 3 Expansion Project. In order to not only maintain our current performance but to raise the bar once more there was a need for significant focus on leading key performance indicators (KPI’s) across all areas of the business.

To do this, aligned leading KPI’s - related to serious incidents investigation, HSE training, HSE observation tours, emergency exercises - were established across all areas, underpinned by local safety programmes that were established and monitored with diligence.

In addition to the safety programmes directly relating to the aforementioned KPI’s, a series of additional programmes were also executed to drive the 2011 safety performance:• Safety Leadership Training: Over 200 Borouge staff

in supervisory and above positions were trained for two days each on Behavioural Safety Leadership.

• Training Matrix: A Corporate wide HSE Training matrix per role was developed including contractors and overseas operations. This will be supported by a training calendar in 2012.

• Borouge 3 Project: A series of risk based daily, weekly, monthly and quarterly audits, inspections and campaigns were implemented to re-enforce that safety is the number one priority, in addition to a comprehensive campaign of awards, in the form of trophies, which is a known motivator for companies and individuals.

• ‘Safety Bazaar’: With the theme “Safety is not expensive, it is priceless”, a ‘Safety Bazaar’ was opened in November 2011 in Ruwais with the aim to increase awareness of the workforce by involving them and showing them which tools and equipment are safe or unsafe to use.

• Golden Rules of Safety: A joint project was initiated with M/s Al Hosn Gas to create a set of golden safety rules for high risk personal safety activities.

• Office HSE: In each of our main offices worldwide, HSE Committees were established to engage all employees in HSE matters. We are developing a standard for Office HSE and have committed to audits all worldwide offices in 2012.

• HSE Booklets: The first of a series of three HSE Booklets, covering Travel Safety and Security, was prepared in 2011 and distributed to all worldwide employees in January 2012. Employees’ booklets for Road Safety and HSE in Offices and at Home will be developed in 2012.

Aligned leading KPIs,underpinned by local safety

programmes, were establishedand monitored with diligence

in 2011 to maintain world-classsafety performance

Our People | Borouge Sustainability Report 2011

Page 40: Sustainability Report 2011 - Borouge

38

• HSE Campaigns: In Ruwais, safety awareness campaigns were organised in 2011 on bicycle safety, good housekeeping to prevent incidents, and hand rail and injury.

• HSE Bulletins: Various HSE bulletins were posted on the Borouge HSE Intranet regarding incidents investigations, safe driving in fog, bus safety, stairways, PPE, Permit to Work system, and road safety.

• HSE Reporting: Introduction of a quarterly HSE dashboard.

As a result of the above initiatives, our 2011 safety performance was exceptional as we went through the complete year without a single lost time injury (LTI) for Borouge employees and contractors with more than 30 million man-hours worked.

No recordable injury was recorded for Borouge employees in 2011, while Borouge contractors experienced 7 recordable injuries which led to a Total Recordable Injury Rate (TRIR - based on one million man-hours) of 0.23 for both Borouge employees and contractors in 2011. This TRIR is better than our target of 0.3 and than benchmark values of 0.38 (Construction Industry Institute, 2008 Safety Report)

and 1.80 (International Association of Oil & Gas Producers, 2009 data).

As part of this outstanding performance, we successfully completed a TRI-free maintenance shutdown of the olefins plants with 558,000 safe man-hours. In addition, the construction of the Ruwais Distribution Centre was safely completed within 9 months and 450,000 man-hours without a single recordable injury. In order to maintain this outstanding safety performance in the future, Borouge will build on their current programmes augmented with new safety developments, such as an electronic permit to work system and an improved Incident Management and Action Tracking System.

Health

The health and well-being of our employees, their families and the wider community is also one of our top priorities. No case of occupational health has been recorded for Borouge employees or contractors in 2011.

Borouge employees on manufacturing sites may be exposed to health risks such as occupational noise, radiation, hazardous gases, heat and fatigue during the course of their duties. Office employees may be exposed to ergonomic health risks.

Figure 16: Total Recordable Injury Rate (TRIR)

In 2011, we achieved a complete year with no lost time injury for Borouge employees and contractors with more than 30 million man-hours worked. No recordable injury was moreover recorded for our employees, while our contractors experienced 7 recordable injuries which led to a TRIR of 0.23 for both Borouge employees and contractors in 2011

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Occupational health management at Borouge formally began in 2009 with focus on the Ruwais plant, and was then extended to other facilities and offices in 2010.

In 2011, occupational health monitoring in Ruwais consisted of noise, heat stress, ammonia and benzene monitoring. Impacted employees were trained to the use of monitoring devices. Next step in 2012 will consist in the development of a chemical exposure monitoring system.

Figure 17: Lost Time Injury Frequency (LTIF)

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The health and well-being ofour employees is one of our

top priorities

Case Study: Stay Cool… Avoid Heat

Stress

During a heat stress related near-missinvestigation, the idea of using cooling vestPPE was suggested, studied, and finally testedon several employees who could be potentially exposed to heat stress. Feedback was very positive as the use of cooling vest, made of fire retardant clothing, helped reducing thebody temperature increase while maintainingfreedom of movement.

Next steps will be to extend the use of coolingvest to other physiologically demanding jobssuch as maintenance activities on furnaces orboilers, especially during the summer period.

The following training programmes and awareness campaigns were organised in 2011:• Delivery of radiation safety and occupational health

awareness to employees;• Heat Stress ‘Beat the Heat’ campaign during the

Summer period;• Cardiology health awareness campaign in Ruwais;• HSE Bulletin on the Borouge intranet on fasting

during Ramadan.

An Occupational Health Management System is currently under implementation with a focus on Occupational Health Risk Assessment (OHRA), hearing conservation and heat stress prevention programmes.

Focus in 2011 was also put on improving radiation safety protection activities (organisation, monitoring, and awareness). Borouge has a license from the Federal Authority for Nuclear Regulation regarding radiation.

Diversity and Equality

Our commitment to diversity and equality is visible in our value ‘We are one family, building on our multicultural diversity’.

Our People | Borouge Sustainability Report 2011

Page 42: Sustainability Report 2011 - Borouge

40

Figure 18: Workforce Diversity

Borouge employs a diverse workforce of 2,104 people representing more than 50 different nationalities. Breakdown of employees by gender and origin is provided in Figures 18 and 19.

The majority of Borouge employees (87%) are male due to the industrial nature of the company as well as its historical development, with only male working at the Ruwais facility until 2009. The first female was hired in Ruwais in 2010, paving the way for further feminization. The percentage of female employees increased from 10% to 13% between 2010 and 2011. Female employees are predominantly office based in Administration and Shared Services positions. There were moreover three women out of 38 members in the Company Leadership Teams in 2011, compared to only one in 2010.

No differentiation in pay exists between male and female employees, in respect with Borouge’s commitment to fair and equal opportunities. This is demonstrated by the average ratio of male to female basic salary which varies between 0.82 and 1.16 according to grade levels.

As part of the UAE government’s plan to create employment opportunities for UAE nationals, known as Emiratization, there is a concerted effort within Borouge to hire Emiratis and provide them with on-the-job training for specific roles. In 1999 Borouge began operations with five Emirati employees; at the end of 2011 they numbered 538, representing 26% of the total workforce and 42% of the Leadership Teams. The focus put on the UAE Nationals Under Development programme led to the confirmation of 73 UAE Nationals in established positions in 2011, above our outstanding target of 65.

Borouge does not apply a formal policy for local hiring outside the UAE, however, a large percentage of the workforce is hired locally in each country where we operate.

No incidents of discrimination (defined as an action that affects the morale of fellow employees) were reported in 2011. In line with Borouge policy, any employee who believes he has suffered from discrimination is required to report the concern to his immediate supervisor or the HR&A department.

87%

13%

Male

Female

There were three female Leadership Team Members in 2011 compared to one in 2010

Emirati

ArabWesterner

AsianAfrican

57%

8%

8%

26%

1%

Figure 19: Workforce Diversity

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41

Borouge employs a diverse workforce of 2,104 people representing more than 50

different nationalities

Workforce Engagement

Employee Engagement Strategy

Components of our employee engagement strategy include annual opinion surveys, Emiratization monthly meetings, quarterly open forums conducted by the CEO’s, HR info-sessions, online general discussions, quarterly internal magazines (Connect Newsletter) and polls on the intranet.

Social activities are managed through our Social Committee which was created in 2009. A Sports Committee was launched in 2011 to provide sports opportunities to Borouge employees and a Ladies Committee was created in early 2012. Regular social trips are organised for our employees and their families. In 2011, a trip to Turkey was organised for Abu Dhabi employees, and a Family Day took place at the Universal Studios Singapore for more than 100 staff members from the Singapore office.

Borouge also recognizes the efforts and quality of work of its employees, and celebrates it during the Annual Party, where long service employees are rewarded.

Employees’ Opinions and Grievances

Employees are encouraged to report any problems or grievances to their Line Managers, who are responsible for addressing them with advice and assistance from HR as deemed necessary. Borouge has a commitment to investigate and resolve without delay any grievances

to prevent the possibility of development into more serious problems.

Key issues raised by Borouge employees in 2011 related to lack of communication from management, lack of reward / recognition, unclear goals and targets, unfair distribution of work, lack of on-the-job training, unclear career structure, poor job description, misalignment of grading among technical and non-technical positions, or internal salary disparity.

Action steps taken to address these issues included:• Increased communication through CEO roundtables,

quarterly business updates, HR info sessions, lunch talks;

• Extensive review of reward practices and rolling-out of new compensation approach;

• Implementation of the Job Architecture Project to align job descriptions, titles and grades;

• Job Analysis Training to 110 employees at different levels;

• Salary adjustments.

Human Capabilities

We recognize the importance of developing our employees, embedded in our value ‘We empower our people and encourage their growth’.

To this end, our Human Capabilities function was created in 2010, with the objective to manage all aspects of Learning, Development and Competency Management.

Performance Management Process

Borouge Corporate Performance Management System (PMS) covers all Borouge employees and operates in a yearly cycle, including setting of objectives, elaboration of Personal Development Plan (PDP), mid-term review and yearly performance appraisal for every employee. The objective of the PMS is to enhance performance orientation, provide ongoing feedback on employees’ performance and act as a tool for employee development.

In 1999 Borouge started operations with five Emirati employees; at the end of 2011 they numbered 538, representing 26% of the workforce

Our People | Borouge Sustainability Report 2011

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For 2011, 95% of Borouge employees have received a formal performance appraisal and review according to the Corporate PMS.

The Human Capabilities function moreover implemented several processes and programmes with regard to employee development:• Talent Review process to evaluate employees’

potential to enter the ‘Talent Pool’;• Succession Review process;• Professional Ladder process to provide a grade

progression system;• People Day process to identify high potential

employees;• Borouge Middle Manager programme to enhance

capability and self awareness of middle managers. A similar programme was conducted for Team Leaders;

• Borouge Joint Leadership programme with Borealis to enhance capabilities of the Leadership Team.

Objectives of these processes and programmes are to provide employees with attractive and challenging development opportunities, and to ensure that competent and motivated personnel are recruited and retained.

Training

To maintain people competence and ensure their development, training needs are identified as part of the performance management process and training is provided to our employees according to their PDP. As a minimum, all new employees joining Borouge undergo induction and orientation training.

The different types of training provided to our employees in 2011 include:• HSE trainings;• Functional / technical trainings to enhance the

knowledge and skills of employees pertaining to their job;

• Soft skills trainings designed to enhance the behaviour of employees as they interact with one another (e.g. communication, presentation);

• Systems trainings provided to users of systems for the manufacturing and business processes (e.g. from vendors during a system upgrade or implementation of a new system).

Trainings provided to Borouge employees and contractors are a combination of in-house solutions using internal or external resources and of public courses in the UAE or overseas, according to the specific needs. The Borouge Training Centre, which was launched in 2010, has the mission to be a centre of excellence through providing the highest quality of training for our employees.

Focus in 2011 was mainly put on safety training, manager training programme and Borouge 3 vendor training. Training Needs Analysis was performed for Borouge 3 project as per B3 people strategy milestone implementation. A total of 37 new in-house training courses were designed and implemented in 2011.

Borouge rewarded its long-service employees during itsAnnual Party in Abu Dhabi

Case Study:

Employee Opinion Survey (EOS) 2011

The 2011 EOS results were above target for Abu Dhabi Polymers (91% against atarget of 82%) but below target for theMarketing & Sales Company (56% againsta target of 67%).

HSE, performance management and socialactivities were the main areas of satisfaction among Abu Dhabi Polymers employees,while key strengths identified by ourMarketing & Sales Company employees included alignment and clarity of goals,teamwork, and product quality.

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Case Study:

Investing to Train Borouge’s UAE

Nationals

Borouge is investing US$ 1.2 million in itsEmiratization programme in Abu Dhabi. TheUAE National Development Department(UAE NDD) is implementing a structuredprogramme involving 26 national employees inthe Borouge 3 Project.

In addition to their activities at Borouge’s plantin Ruwais, the UAE NDD sent the engineersto origin countries of the engineeringcompanies in charge of implementing theBorouge 3 Project, namely Seoul, South Koreafor Utility and Offsite plants and XLPE; Milan,Italy for polyolefin projects; and Munich,Germany for ethylene unit plants.

As a result of these efforts, 83% of Borouge employees (excluding UAE Nationals Under Development) followed at least one training course in 2011 totalling more than 100,000 training hours, a twofold increase compared to 2010. The average number of training hours per employee trained amounted 65 hours (compared to 30 hours in 2010), representing eight days per person, per year.

Our 234 UAE Nationals Under Development were provided with a total of more than 121,000 training hours, representing 519 hours per trainee.

Total cost for training provision was US$ 4.4 million.

Category

Number of

employees

trained

Total number

of training

hours

Average training hours

per employee Cost of train-

ing in US$2011 2010

Borouge Employees 1,549 101, 290 65 30 4,049,000

UAE Nationals Under Development

234 121, 410 519 436 316,000

Total 1,783 222,700 125 78 4,365,000

Table 12: Training Overview in 2011

95% of Borouge employees have

received a formal performance appraisal

and review for 2011

(image pending)

In 2011, seven UAE Nationals Under Development from Borouge’s Innovation Centre attended a 42-day training programme at Borealis Innovation Headquarters in Linz, Austria

Our People | Borouge Sustainability Report 2011

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Social Responsibility | Borouge Sustainability Report 2011

45

Social ResponsibilityIn line with our Sustainability Framework and our values ‘We respect the communities and the environment in which we live and work’ and ‘We are good neighbours wherever we operate’, our aim is to support the local communities and create opportunities in places where we have operations.

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Social Responsibility In 2010, we issued our Social Responsibility (SR) Guidelines with the objective to establish a uniform group-wide approach guiding our voluntary commitment to the communities in which we operate thereby enhancing our reputation and image. Our SR Guidance Document provides a framework for Borouge to support activities, events or causes consistent with our Mission, Vision and Values, and in line with our Strategy as well as our Ethics and Sustainability Policies. We encourage proposals from within the organization and from external sources, provided they meet at least one of our five SR criteria, namely Health, Safety, Environment, Water and Plastics Related Education.

Three Regional SR Committees were established in 2011 in the Middle East Africa, Greater China and Asia South regions.

Water for the World™

Borouge and Borealis initiated Water for the World™ in 2007 to address the fresh water access and proper sanitation challenges through a programme that embodies our values and manifests our commitment to social responsibility.

Since its launch, Water for the World™ has directly benefited more than 260,000 people all over the world and has built a platform for partnerships with stakeholders from the plastics industry, water and sanitation companies and NGO’s. As the first global programme in the plastics industry to address the water challenge, Water for the World™ achieved significant project milestones in four areas:• Supporting water access projects in areas of need;• Developing and promoting best-practices in

water supply and conservation to the utility and agricultural communities across the world;

• Raising awareness and encouraging a more efficient use of water resources in communities;

• Advancing sustainable water management through the transfer of knowledge and best practices.

Some of the projects undertaken by Borouge and Borealis through Water for the World™ in 2011 include:• Supporting Kenyan water provision projects to bring

sustainable drinking water and sanitation solutions to communities with limited, inadequate and unsafe access to water and sanitation - as members of Water & Sanitation for the Urban Poor (WSUP). Two WSUP supported programmes in Kenya already benefited more than 90,000 people;

• Helping protect Haarbach community groundwater through a wastewater pipeline upgrade in Germany;

• Contribution of US$ 136,000 to the Emirates Foundation for Philanthropy to support two research projects on groundwater in the UAE.

In 2011, Borouge’s Marketing & Sales Company exceeded its target by initiating and publishing four Water for the World™ projects on the website (www.waterfortheworld.net).

Borouge organised“Water for the World™” and “Troubled Waters” exhibitions in four locationsaround the world

Water provision projects supported by Borouge and Borealis in Kenya already benefited more than 90,000 people

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Social Responsibility | Borouge Sustainability Report 2011

Case Study:

Borouge marks World Water Day 2011

with a major event in Abu Dhabi

Borouge organised two exhibitions of “Waterfor the World™” and “Troubled Waters” inAbu Dhabi to mark World Water Day on March22, 2011. Through these exhibitions, as well aspresentations by leading experts in the fieldof water conservation and research, Borougedemonstrated how it contributes to addressingthe global water challenge through its “Waterfor the World™” initiative and reinforced its keyrole in helping people around the world get easyaccess to clean water and sanitation facilities.

Predominantly an internal event for itsemployees, the exhibitions were attended by HEDr. Rashid Ahmed Bin Fahad, the UAE Ministerof Environment and Water, Rashed Saud AlShamsi Chairman of Borouge’s Marketing &Sales Company, as well as representativesfrom ADNOC, Borealis, CH2M Hill Dubai,Abu Dhabi Water and Electricity Authority(ADWEA), Environment Agency Abu Dhabi(EAD), the Emirates Foundation for Philanthropyand the Health, Education, Environment andDevelopment (HEED) Association from Pakistan.

The photographic “Troubled Waters” exhibition displayed a number of images by Belgian photographer Dieter Telemans. These photographs highlighted the precious value of water by showing the impact of desertification and drought in the Horn of Africa, floods in Bangladesh, health, sanitation and urbanisation in India, China, Aral Sea, Ethiopia and Chad, as well as water management in Spain and Australia.

The third day of the event was dedicated for children from Glenelg School who learnt about the value and importance of water conservation for the future.

These exhibitions were later staged in Singapore during the Singapore International Water Week in July 2011, and during the “Water Day” organised at Beijing University of Chemical Technology on September 26, 2011 and at Shanghai East China University of Science and Technology on October 26, 2011.

Borouge launched itsfourth undergraduate

scholarship programmein China

Scholarship Programme

The Borouge Scholarship Programme contributes to attracting motivated, highly-skilled talent to help enhance the rapidly developing plastics industry in Asia.

Borouge is proud to continue supporting the development of the plastics industry in China with the launch of its fourth Scholarship in the country in January 2011. Under this programme, Borouge provides financial support to high-performing undergraduate students of polymer science and engineering in Yangzhou University by granting 14 selected students with annual scholarships.

Through the Scholarship Programme, Borouge encourages potential talents in the plastics industry to seek innovative and sustainable solutions that contribute to the future of society. Students are selected based on their academic performance each year and among them, one to two will be given the opportunity of training at a Borouge location thereby obtaining practical experience in an innovative and dynamic environment.

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With the fourth scholarship granted in 2011, Borouge already established partnerships with four universities in China, namely Beijing University of Chemical Technology, South China University of Technology in Guangzhou, East China University of Science and Technology in Shanghai, and Yangzhou University in East China, and with two universities in India, namely the Institute of Chemical Technology in Mumbai and the Indian Institute of Technology in New Delhi.

We initiated the‘Borouge Star’awareness programme at Abu Dhabi schools

Case Study:

Borouge initiates new awareness

programme at Abu Dhabi schools

Borouge launched the “Borouge Star – Building Tomorrow” awarenessprogramme at Abu Dhabi schools on April18, 2011, aiming to stimulate scholars’interests in science, enhance theirknowledge of plastics as a sustainablesolution to global challenges such asclimate change and energy distribution,and inspire them in selection of theircareers when they grow up.

In addition, Borouge canvassed these universities for potential International Scholarships recipients and these will be awarded in 2012. In line with its commitment to students who have the ambition to grow and exceed, Borouge’s International Scholarships financially and educationally support high performing students to pursue postgraduate studies (Master and PhD) in polymer science, chemical engineering or technical disciplines related to these areas at internationally renowned universities.

This programme, conducted over 4 days at the Glenelg School in Abu Dhabi, included around 500 children from different educational grades. During the programme, the targeted scholars learned more about Borouge, petrochemicals and the significant role that plastics play in everyday life.

The “Borouge Star” awareness programme will be extended to other schools in Abu Dhabi providing a platform for many more scholars in the Emirates to benefit from this comprehensive and creative programme.

Borouge’s International Scholarships financially and educationally support high performing students to pursue postgraduate studies (Master and PhD) in polymer science, chemical engineering or technical disciplines related to these areas at internationally renowned universities

48

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Relief Assistance

In September 2011 Borouge arranged an internal donation campaign through which the Company and its employees have raised approximately AED 220,000 as contribution to support the drought and starvation victims in Somalia and the Horn of Africa. The donation made by Borouge through its social committees in Abu Dhabi and Ruwais was coordinated with the major relief campaign that the UAE Red Crescent launched on the occasion of the UAE’s celebration of the International Arabic Volunteer Day.

Events Sponsorship

In 2011 Borouge sponsored several sports and cultural events and foundations in the UAE including:• Sounds of Austria Concert;• UAE National Day Chess Championship;• Family Development Foundation;• Liwa Date Festival.

Borouge is also proud to be the official sponsor of the UAE National Football Association.

Gulf Plastics Pipe Academy

Embodying our value of ‘We lead by example’, Borouge is the founding member of the Gulf Plastics Pipe Academy (GPPA), an independent, non-profit organisation formed to promote the use of specified plastic pipes systems and good installation practices in the greater Middle East region. The goals of the organisation, identified by other companies in the Middle East and GPPA, are to educate professionals and society at large about the uses and benefits of plastic pipes. GPPA educational programmes provide Borouge with a means to support our product users to ensure product quality. GPPA now has more than 100 members from across the value chain.

In July 2011, GPPA organized a three day plastics engineering course in Cairo for a group of engineers from the Engineering for the Petroleum and Process Industries.

Borouge will also establish a training centre alongside the Innovation Centre in Abu Dhabi for GPPA, thereby fulfilling its commitment to improving standards and the application of polyolefins for high quality pipe systems.

The Sounds of Austria Concert was

held in Abu Dhabi

Social Responsibility | Borouge Sustainability Report 2011

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Our Solutions | Borouge Sustainability Report 2011

51

Our SolutionsFrom simple everyday products that make life easier to step-changing technological developments, Borouge is leading the way by ‘Shaping the Future with Plastics’. Our solutions can be found in everyday products around you such as internet cables, food packaging, irrigation systems or plastic parts in cars.

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The unique proprietary Borstar® process and catalyst technology enables Borouge to provide a differentiated range of polyethylene and polypropylene sustainable innovative plastics solutions for infrastructure applications, automotive components and advanced packaging.

Energy and Communication Cables

Borouge is the leading supplier to the wire and cable industry providing solutions in insulation, semi-conductive and jacketing. Borouge has solutions for low, medium and high voltage energy transmission and distribution cables, data and communication cables, building and automotive wires.

Pipe Systems

Borouge pipe grades are used in water and gas distribution, waste and sewerage disposal, chemical and industrial projects, irrigation systems, domestic plumbing and heating and cooling systems, as well as oil and gas exploration and transportation. Setting standards in the industry, our solutions add value through improved processing characteristics, lower maintenance, lower installation costs, longer product lifetimes, increased safety and no leakages.

Automotive Components

With a long track record in developing innovative plastics solutions with the automotive market and several international certifications, Borouge is a leading supplier to this rapidly expanding market. Borouge provides tailor-made solutions for dashboards, door side claddings, front-end carriers, air-vents systems, bumpers and under-body shields.

Advanced Packaging

Borouge provides a range of innovative plastics solutions utilising proprietary technologies for a variety of high-performance flexible packaging applications, especially in co-extruded structures such as lamination, exclusive carrier bags, high-strength packaging, frozen and snack food packaging, shrink films and greenhouse films. Borouge also provides innovative plastics solutions for rigid plastic applications such as healthcare, boxes, trays, pallets, bottles and caps and closures.

Our Solutions Borouge aims to preserve the positive image of plastics and that innovative plastics solutions enhance society through providing sustainable responses to some of today’s global challenges:• Access to water and sanitation with sustainable pipe

materials, ensuring safe, durable, and efficient access to our most vital resource;

• Access to energy by securing, interconnecting, and extending energy networks to meet the world’s increasing energy needs;

• Enhanced communication with wired or wireless broadband communications, ensuring the stable and secure communication networks that are critical to modern society;

• Improved healthcare with a new generation of materials for safer, more convenient, and affordable medical equipment;

• Food delivery and safety with advanced packaging that delivers enhanced food protection and safety across the value chain;

• Climate protection with lighter, more energy-efficient materials that reduce greenhouse gas emissions of products across their lifecycles.

REACH

Registration, Evaluation and Authorisation of Chemicals (REACH) is a European legislation, officially approved in 2007, that targets chemical manufacturers and importers from the European Union (EU) and their associated impacts. The legislation requires that all chemical substances are registered, whether on their own or in preparations, and necessitates the sharing of information across the entire value chain. REACH represents a fundamental shift of responsibility from public authorities to industry in demonstrating the safe manufacture and use of chemicals.

In 2010, Borouge, through its appointed Only Representative (OR) Borealis AG, has achieved full REACH legislative registration of 3 substances - Ethylene, Propylene and 1-Butene. With this registration, Borouge can import these substances into EU in quantities above 1,000 metric tonnes per year. To facilitate continuous compliance with REACH, a substance volume tracking system was implemented in

Borouge’s innovative products are benefiting society throughproviding sustainable responsesto some of today’s global challenges

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53

Case Study: Borealis and Borouge

demonstrate how innovative

polyolefins solutions reduce weight

and CO2

emissions

Our polypropylene (PP) materials facilitate theproduction of lightweight high performanceautomotive parts that meet the same rigorousdemands as compact material and heavierparts, delivering cost efficiency, weightreduction and improved environmentalperformance - the current automotiveindustry’s challenges.

At the 2011 ‘Société Française desIngénieurs des Plastiques’ Congress inJune, Borealis and Borouge presented their latest innovations for the automotiveindustry aimed at reducing vehicle weight.Designed to aid Tier One suppliers and originalequipment manufacturers meet the market’scurrent trends and challenges, our industrysolutions can lower overall production coststhrough improved handling, reduced overallenergy consumption and the eliminationof manufacturing steps. Key innovations for under the bonnet, interior and exteriorautomobile parts can provide solutions withweight savings between 15% and 35%.

Compared to standard Low Density Polyethylene, Borstar® grades allow

material savings of up to 30% and make it possible to reduce CO2

emissions by 40% throughout the entire life cycle of the application

2011 to monitor the import volumes of other applicable substances into EU which do not require immediate registration as the volumes are below 1,000 metric tonnes per year.

Product Stewardship

Borouge works with its direct customers to ensure that both our products and their end uses comply with applicable regulations. Borouge produces safety information sheets / safety data sheets and compliance statements for all of its products. These documents are provided to our customers and available for download on our website (www.borouge.com). We are focused not just on protecting the environment, but also the health of our workers and society. Although our polyolefin products are widely regarded as non-

Our Solutions | Borouge Sustainability Report 2011

hazardous, we do consider possible health and safety impacts during product development at each lifecycle stage from concept development through to eventual disposal. No incidents of non-compliance with regulations and voluntary codes regarding marketing, labelling, or the impact of our products have been reported to Borouge in 2011.

The following Product Stewardship developments were implemented in 2011:• Hazard evaluations of our products were conducted

based on HSE information of raw materials, and possible exposures to the products were identified. This hazard and exposure information is used to characterize the product risk.

• A procedure on Product Risk Characterization and Risk Management was developed.

• Questionnaires were sent to our suppliers to check for raw materials regulatory compliance and to help them understand Borouge / regulatory requirements.

• We provided our distributors (LSPs, shipping lines, carriers) with product HSE information, and advised our LSPs on safe storage and handling requirements for our products.

Customer Focus

Understanding and addressing customer needs is critical for Borouge’s continued success and development. The primary importance of customers is highlighted in our values ‘We build and foster a customer-focused culture’ and ‘We anticipate customers needs and build partnerships’.

Borouge have been utilizing an independent third party consultant to conduct an annual Customer Satisfaction Survey since 2003.

In 2011, our performance against our industry peers was again strong, with Borouge scoring 5.0 out of 6.0, an improvement over the previous year which placed Borouge second. On the polypropylene segment, which was included in the survey for the second time in 2011, Borouge were rated the top ranked company overall.

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54

Main areas for improvement to further enhance customer satisfaction include delivery lead time and reliability, and efficacy of complaints handling.

Protecting customer data and customer privacy are particularly important in the way we conduct our business. This is central to preserving our reputation and being the supplier of choice. No substantiated complaints regarding the loss of customer data or privacy from either customers or regulators are known to our legal department.

Industry Relations

Borouge is an active and leading member in several industry groups in the regions where it operates. In the Gulf Region, Borouge is a founding member of the Gulf Petrochemicals and Chemicals Association (GPCA) and is a member of all GPCA committees, namely Responsible Care®, Plastics, Human Resources, Supply Chain and Advocacy. In Asia, Borouge is a member of the Association of International Chemical Manufacturers (AICM) and the Singapore Chemical Industry Council (SCIC) since 2010.

In order to enhance our reputation, provide best services and new innovations, and strengthen relationships with our customers, Borouge actively participates in key industry events – exhibitions, fairs and conferences – all over the world. In 2011, we participated in 18 industry exhibitions and more than 30 conferences and presentations with a total budget of US$ 1.9 million.

Innovation

Innovation Centre

As a company focused on Value Creation through Innovation, Borouge is investing in a new Innovation Centre in Abu Dhabi. With a total investment of US$ 70 million in equipment and facilities, Borouge’s Innovation Centre will work together with the European innovation centres of Borealis as well as with local and international educational institutions such as the Petroleum Institute of Abu Dhabi, to further develop the competence of polymer science in the United Arab Emirates. It is expected to be operational in 2012.

More than 50 international researchers and engineers will focus on innovations for compounding as well as innovative plastics solutions for the infrastructure, automotive and advanced packaging industries in close cooperation and partnership with Borouge’s customers throughout the value chain.

As part of our Emiratization policy, young UAE Nationals will be trained and given the opportunity to pursue a career in research and development. From 2010 onwards, we began training talented young Emiratis at the Petroleum Institute in Abu Dhabi, after which they will continue their training in the UAE and at Borealis facilities in Europe.

The Company also has an Application Centre at its manufacturing plant in Shanghai focusing on innovative solutions for the fast growing automotive and appliances markets.

Innovation Award

Borouge celebrated its best idea generators and innovators of the year for the fourth time in March 2011 at its annual Innovation Award ceremony, raising awareness about the importance of innovation for our current and future success. A large number of nominations were submitted by Borouge’s community, screened by the Innovation Award Committee and voted for by the Leadership Teams. Creative innovative ideas and solutions were subsequently awarded.

The Innovator of the Year was awarded to the development of an innovative Olefins Conversion Unit Start-Up strategy and implementing it to have a successful world scale start-up of Borouge 2.

The Idea of the Year award went to the excellent idea to minimise continuous flaring from the nine Borstar® plants from Borouge 1, 2 and 3 in an economical way. Instead of combining the Purge Bin streams from PE and PP plants, having dedicated membrane units will allow substantial recovery of valuable feedstock and give an overall reduction of 152,000 tonnes CO2

emissions per year.

Our future Innovation Centre in Abu Dhabiis expected to be operational in 2012

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55

Event Date Location

Arabplast January Dubai, UAE

Auto Expo January New Delhi, India

Plastivision India January Mumbai, India

World Future Energy Summit January Abu Dhabi, UAE

Middle East Electricity Exhibition February Dubai, UAE

Gastech (with ADNOC) March Amsterdam, Netherlands

Plastics Summit April Dubai, UAE

7th International Plastics, Printing

and Packaging (3P) Industry ExhibitionApril Lahore, Pakistan

Chinaplas May Guangzhou, China

Asia Petrochemical Industry Conference May Fokuoka, Japan

Middle East Pipe Oil and Gas May Abu Dhabi, UAE

International Goods Fair May Seoul, South Korea

Wire South East Asia September Bangkok, Thailand

Middle East Oil and Gas Show and Conference (MEOS - with

ADNOC)September Bahrain

Water Expo China October Bejing, China

Water Philippines October Manila, Philippines

Saudi Plastics November Riyadh, Saudi Arabia

International Water Association of Malaysia November Kuala Lumpur, Malaysia

Table 13: Participation in Industry Exhibitions and Fairs in 2011

Our Solutions | Borouge Sustainability Report 2011

Borouge wins Ringier Technology

Innovation Award

Borouge won the 2011 Ringier Technology Innovation Award, one of the most influential industrial awards in the Chinese plasticsindustry, during a ceremony held in August in Shenzhen, China. The recognition was attributed to its newly-launched RG468MO grade, a polypropylene (PP) random copolymer that provides up to a 20% productivity gain for the rigid packagingconverting industry.

Borouge’s RG468MO grade perfectly met all the required standards of the Award including innovation and easy usage by customers. RG468MO ensures food protection and freshness as well as good marketability.The RG468MO PP grade represents a step-change in packaging materials, delivering:• 10% reduction in cycle time together with

improved mechanical performance;• Clear transparency and pleasing visual

aesthetics;• Up to 10% saving in production energy;• CO2 emissions reduction of approximately 4

tonnes per year.

best idea generators and innovators of the

year for the fourth timein March 2011 at its

annual Innovation Award ceremony

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56

Report section GRI G3 2006 IPECA/API 2010 Report page

Message from our CEOs 1.1 2

About This R eport 3.1 to 3.11, 3.13 3

About Borouge 4

Who we are 2.1, 2.3 to 2.6 4

Key Evolutions in 2011 2.9 6

Our Journey 7

Awards 2.10 8

Managing Sustainability 9

Our Mission, Vision and Values 4.8 9

Our Sustainability Management 1.2, 4.12 10

Borouge Sustainability Framework and Organisation 1.2, 4.8 11

Governance & Engagement 14

Boards and Governance 4.1, 4.2, 4.9 14

Ethics and Integrity 4.4, 4.6, EN28, SO8, PR9 14

Public Policy Participation SO5 SE14 15

Borouge 2015 Strategy 16

Stakeholder Engagement 4.14 to 4.17 17

Risk Management 4.11 18

Risk Studies 18

Emergency Preparedness 18

Process Safety and Asset Integrity HS5 19

Contractor Management 19

Economic 20

Key Financial Information 2.8, EC1 20

Market Presence 2.7 20

Procurement Practices HR1, HR2, EC6 SE5, SE7, SE9 21

Environment 22

Energy EN3 to EN7 E2, E3 24

Climate Change EN16, EN18 E1, E4 25

Air Emissions EN19, EN20 E7 27

Transportation EN17, EN29 29

Water EN8 to EN10, EN21, EN25 E6, E9 30

Waste and Spills EN22, EN23 E8, E10 32

Biodiversity EN11 to EN14 E5 33

Environmental Expenditures EN30 33

Our People 34

Employment Conditions LA1 to LA3, EC5 36

Protecting our Employees LA6 to LA8 HS1, HS2, HS3 37

Diversity and Equality HR4, LA13, LA14, EC7 SE6, SE15 39

Workforce Engagement SE16, SE18 41

Human Capabilities LA10 to LA12 SE17 41

Social Responsibility SE1, SE4 44

Water for the World™ EC8 SE4 46

Scholarship Programme SE4 47

Relief Assistance SE4 49

Events Sponsorship SE4 49

Gulf Plastics Pipe Academy 4.13 SE4 49

Our Solutions 50

Our Solutions 2.2 52

REACH 52

Product Stewardship EN26, PR1 to PR4, PR7 HS4 53

Customer Focus PR5, PR8 53

Industry Relations 4.13 54

Innovation 54

GRI and IPIECA/API Index 3.12 56

Glossary of Terms 57

Publications and References 58

GRI and IPIECA/API IndexThe content of this report is guided by the Global Reporting Initiative (GRI) 3rd Generation (G3) Sustainability Reporting Guidelines 2006 and the International Petroleum Industry Environmental Conservation Association / American Petroleum Institute (IPIECA/API) Oil and Gas Industry Guidance on Voluntary Sustainability Reporting 2010. The table below cross-references the sections of this report with GRI and IPIECA/API indicators.

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Glossary of Terms | Borouge Sustainability Report 2011

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Glossary of TermsADNOC Abu Dhabi National Oil CompanyAED United Arab Emirates DirhamsAICM Association of International Chemical ManufacturersALARP As Low As Reasonably PracticableAPI American Petroleum InstituteB1/2/3 Borouge 1/2/3BeAAT ADNOC Integrated Waste Management FacilityBTC Borouge Training CentreCAAF Corporate Audit & Assurance FunctionCDM Clean Development MechanismCEO Chief Executive OfficerCH4 MethaneCMP Compounding Manufacturing PlantCMT Crisis Management TeamCNIA Critical National Infrastructure AuthorityCO Carbon MonoxideCO2 Carbon DioxideCoMP Code of Management PracticeEAD Environmental Agency Abu DhabiEIA Environment Impact AssessmentEL East LevantEOS Employee Opinion SurveyESC Employee Status ChangeETP Effluents Treatment PlantEU European UnionFEED Front End Engineering and DesignFRP Facility Response PlanFSC Forest Stewardship CouncilGCC Gulf Cooperation CouncilGDP Gross Domestic ProductGHG Greenhouse GasGPCA Gulf Petrochemicals and Chemicals AssociationGPPA Gulf Plastics Pipe AcademyGRI Global Reporting InitiativeH2S Hydrogen SulphideHAZID Hazard IdentificationHAZOP Hazard and OperabilityHCFC HydrochlorofluorocarbonHR Human ResourcesHR&A Human Resources and AdministrationHSE Health, Safety and EnvironmentHSEIA HSE Impact AssessmentHSECES HSE Critical Equipment and SystemsHSEMS HSE Management SystemHVAC Heating, Ventilating, and Air ConditioningICCA International Council of Chemical AssociationsICS Incident Command SystemIDP Individual Development PlanIPIC International Petroleum Investment CompanyIMS Integrated Management SystemIMT Incident Management TeamIPIECA International Petroleum Industry Environmental Conservation

AssociationISO International Organization for StandardizationISPS International Ship and Port SecurityIT Information TechnologyKPI Key Performance IndicatorLDPE Low Density PolyethyleneLSP Logistics Service ProviderLTI Lost Time InjuryLTIF Lost Time Injury FrequencyLTPA Long-Time Purchase AgreementMOC Management Of ChangeMWh MegawatthourN2O Nitrous OxideNDD National Development DepartmentNGO Non Governmental OrganizationNMVOC Non Methane Volatile Organic CompoundNOx Nitrogen OxideOH Occupational HealthOHRA Occupational Health Risk AssessmentOHSAS Occupational Health and Safety Assessment SeriesOR Only RepresentativePDP Personal Development PlanPE PolyethylenePMS Performance Management SystemPO PolyolefinsPP PolypropylenePPE Personal Protective EquipmentRDC Ruwais Distribution CentreREACH Registration, Evaluation and Authorisation of Chemicals

REFMAC Ruwais Emergency & Fire Mutual Aid Committee

SCIC Singapore Chemical Industry CouncilSIL Safety Integrity LevelSO2 Sulphur DioxideSPC Supreme Petroleum CouncilSR Social ResponsibilityTRA Task Risk AssessmentTRI Total Recordable InjuryTRIR Total Recordable Injury RateTWh TerawatthourUAE United Arab EmiratesUNEP United Nations Environment ProgrammeUS$ United States DollarVOC Volatile Organic CompoundVP Vice PresidentWSUP Water and Sanitation for the Urban PoorXLPE Cross-Linkable Polyethylene

Borstar® - Patented Borealis technology that supports differentiated polyethylene and polypropylene products. Borstar® technology is a critical element in developing the next generation of innovative, bimodal plastics. Combines excellent mechanical strength and product processability and also supports products that are cost-effective, allowing material savings of up to 30 percent.

Catalyst - A substance added into the reactor to initiate or accelerate a polymerisation reaction.

Cracking - Process whereby complex organic molecules such as heavy hydrocarbons are broken down into simpler molecules such as light hydrocarbons.

Dimerization - Any chemical reaction in which two identical monomers react to form a dimer.

Ethane - A colourless, odourless gaseous alkane, C2H6 , that occurs as a constituent of natural gas.

Ethylene - A colourless flammable gas, C2H4, derived from natural gas and petroleum and used as a source of many organic compounds.

Flaring - A process of disposal of hydrocarbons during clean-up, emergency shut downs and for disposal of small volume waste streams of mixed gasses that cannot easily or safely be separated.

Greenhouse Gas - The gases present in the atmosphere which contribute to global warming through a greenhouse effect. The main greenhouse gases are carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), and three groups of fluorinated gases (sulphur hexafluoride, HFCs, and PFCs).

Olefin - Any of a class of unsaturated open-chain hydrocarbons such as ethylene, having the general formula CnH2n.

Ozone Depleting Substance - A compound that contributes to stratospheric ozone layer depletion.

Petrochemical - A chemical derived from petroleum or natural gas.

Polyethylene - A polymerized ethylene resin, used especially for containers, kitchenware, tubing, and in the form of films and sheets for packaging

Polymerisation - A chemical reaction where polymer is synthesised from monomers.

Polyolefin - The collective name of Polyethylene (PE) and Polypropylene (PP). Polyolefins are produced by the polymerisation of olefins (typically ethylene or propylene), derived from hydrocarbons from oil refining or natural gas separation plants.

Polypropylene - A polymerized propylene resin, used as a thermoplastic moulding material.

Processability - Describes the behaviour of the polymer in a converting process, such as a blow-moulding machine or film line. Good processability means stable behaviour in the process and a high processing speed at low energy consumption.

Propylene - A flammable gas, CH3-CH:CH2, derived from petroleum hydrocarbon cracking and used in organic synthesis.

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Borouge Publications

This report is also available online at www.borouge.com/sustainability.

Our other publications include:Company Facts 2011 Addressing Climate Change HSE Management System

Publications and

References

References

Borouge: www.borouge.com

ADNOC: www.adnoc.ae

Borealis: www.borealisgroup.com

Water for the WorldTM programme: www.waterfortheworld.net

Responsible Care®: www.responsiblecare.org

REACH: http://ec.europa.eu/environment/chemicals/reach/reach_intro.htm

Gulf Petrochemicals and Chemicals Association: www.gpca.org.ae

Gulf Plastics Pipe Academy: www.gulfplasticspipe.org

Association of International Chemical Manufacturers: www.aicm.cn

Singapore Chemical Industry Council: www.scic.sg

Global Reporting Initiative: www.globalreporting.org

International Petroleum Industry Environmental Conservation Association: www.ipieca.org

UAE Football Association: www.uaefa.ae

Borouge’s head offices:

Abu Dhabi Polymers Company Ltd | Borouge Tower | Sheikh Khalifa Energy Complex | Abu Dhabi | UAETel: +971 2 6070300 | Fax: +971 2 6070999 | P O Box 6925 | email: [email protected]

Borouge Pte Ltd | 1 George Street #18-01 | Singapore 049145 | SingaporeTel: +65 6275 4100 | Fax: +65 6377 1233 | email: [email protected]

Addressing Climate Change