Environment Report 2015 VARD

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1 Environment Report 215 VARD European network for Health Technology Assessment JA

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7 HEALTH AND SAFETY

8 Focus on health and safety All our operations shall be planned and executed in a safe manner to ensure protection of human life and health, the environment, the community, equipment and property. With a focus on safety and wellbeing of our workforce and all stakeholders, our goal is to bring tangible benefits to employees and local communities as well as our investors and owners, and leave a minimal environmental footprint.

9 Health and safety Minor decrease in safety observations due to less building activity at the yards 12% decrease in actual accidents The frequency rate of Lost Time Injuries, recorded at 2.5 A minor increase in sick leave, recorded at 3.5% Presence at a steady high level, recorded at 96.5% We recognise that our operations involved in construction of vessels carry certain health and safety risks. Therefore it has always been our top priority to encourage a culture with knowledge about safe working practices and behaviors in all our operations. During 215, we continued to encourage everyone to report potentially hazardous conditions, which resulted in a further reduction of accidents with 12%. We are working actively with several initiatives to reduce accidents and focus especially on accidents with highest injury and damage potential. We believe in a proactive approach and set targets for safety observations as a central KPI. The preventive actions we put in place has a tangible impact on number of accidents. The frequency rate of Lost Time Injuries (LTI), of which we recorded at a rate of 2.5 for 215, had a minor increase, but is still at a low level compared to the industry. An average of 96.5% of our workforce is at work every day, which we see as a proof of good working conditions. Looking at the sick leave statistic at an average of 3.5%, there has been a minor increase from 214, but this level is still low compared to the industry. We continue our efforts to handle sick leave individually and at an early stage. This includes the flexibility to adjust an employee s work intensity and scope of work, as well as adapting the work place as an alternative to sick leave. For graphics see next pages >>

10 Accidents and safety observations 12% decrease in number of accidents Number of safety observations has decreased with 4,1% Accidents Safety observations

11 Injuries The frequency rates of Lost Time Injuries had a minor increase, but is still at a low level Total Recorded Injuries had a minor decrease LTI-rate (Lost Time Injuries) TRI-rate (Total Recorded Injuries) , ,8 4,8 3,9 3,2 2,2 2,1 1,8 2,3 2, ,3 6,1 5,3 4 4,9 5,1 4,

12 Sick leave and presence The sick leave statistics has had a minor increase, but is still at a low level of 3.5% The level of presence is at a high level of 96.5% Sick leave Presence 6% 4% 4,5 % 4,2 % 3,8 % 3,1 % 3% 3, % 2,7 % 3,2 % 3,5 % 1% 9% 95,5 % 95,8 % 96,2 % 96,9 % 97% 97% 97,3 % 96,8 % 96,5 % 2% % %

13 ETHICS AND SOCIAL RESPONSIBILITY

14 Compliance with International Standards VARD complies with two international standards of ethics and social responsibility. Social accountability The SA 8 standard is based on guidelines from the International Labor Organization and draws on various international human rights declarations. All VARD locations operate to this standard, and one of the yards is already certified. Occupational health and safety Compliance with the OHSAS 181 standard demonstrates VARD s commitment to safe and healthy working conditions. So far, two of VARD s Romanian shipyards and the Vietnamese shipyard have been officially certified. The combination of these standards is increasingly used to measure the overall performance of VARD in this field. During 215, VARD was subject to numerous customer audits which gave us a valuable input to potential areas of improvement. They also indicate that VARD runs a sound and ethical business with safe and healthy working conditions.

15 ENVIRONMENT

16 Environmental focus We have always kept a long-term perspective on preserving and steadily improving the integrity of our business, and the environment in which we operate. We are highly aware of the environmental effects our operations may cause, and thus we take necessary steps to limit the impact by continuously developing technologies, practices and business opportunities compatible with sustainable development.

17 Environment 91% waste recycling in Vard Group Long-term implementation of ISO 141 standard Steady improvements in HSE performance at Vard Promar We continually strive to reinforce policies and develop procedures in order to minimize our environmental impact, and we believe that the sound co-existence of our business and the environment is important. We promote an open dialogue on environmental issues with employees, regulatory authorities, our local communities and other stakeholders. Recycling of waste from shipbuilding and maintenance is a key priority. A comprehensive waste management framework is in place, and we have experienced an increase of 2% in the level of recycling to 91% by the end of 215. Our focus areas are construction of eco-friendly vessels, minimal emissions, waste management and noise abatement. To reduce emissions during commissioning and testing of new ships, some of our yards have invested in shore power plants. VARD is long-term implementing the ISO 141 standard - the world s most recognized standard for environmental management. VARD is in close dialogue with public authorities on issues such as avoidance of pollution resulting from our operations, and inspections are conducted on a regular basis. Remarks have generally been minor and have been handled locally as part of our everyday business. VARD will continue, in close cooperation with governmental initiatives, to map pollution at Norwegian industrial sites and in coastal waters. Since 28, VARD has been a member of the Confederation of Norwegian Enterprises NOx-fund, which means we contribute to reducing the environmental impact of emissions from fuel. Operations at Vard Promar, Brazil: The entire facility is fully compliant with the strictest of local and international environmental codes, and is steadily improving their HSE performance. For graphics see next page >>

18 Our approach As part of our proactive HSE initiatives to achieve Vision Zero, we continue to further develop our robust set of guidelines and principles for our operations: Long-term implementation of the ISO 141-standard for environmental management across all major business units. Long-term implementation of the SA8-standard for social accountability and OHSAS 181- standard for occupational health and safety. We have a robust code of conduct, Ethical Guidelines, and are continuing the process of implementing the corporate values. Continuously developing the HSE-handbook which governs our sustainability and social responsibility. Active use of our new HSE-films and training courses, focusing on protective gear and best practices to reduce long-term health impacts. Consistent HSE assessment and reporting. Active promotion and participation in open dialogues with key stakeholders and use the feedback to improve our practices. Purposeful supporting of talent and social causes, as well as providing opportunities for employee development.

19 Waste recycling ratio 1% 99% 1% 96% 93% 9% 91% 91% 87% 9% 8% 8% 76% % 214 7% 215 6% 5% VARD Aukra Norway Braila Romania Brattvaag Norway Brevik Norway Langsten Norway Niteroi Brazil Promar Brazil Søviknes Norway Tulcea Romania Vung Tau Vietnam

20 Environmental accounts In the following pages we will present the detailed environmental accounts for each yard. Waste recycling ratio The shipyards ability to sort their waste and deliver it for recycling is presented as a recycling percentage. The ratio shows how much of the total amount of waste has been recycled. Waste management Certified waste disposal companies collect recycled waste fractions from our yards. Various types of metals - e.g. steel and aluminium - account for the main bulk of waste sent for recycling. Other recycled waste fractions include EE waste, fluorescent tubes, wood, paint residues, oil-based waste, batteries, waste oil, plastic, food waste, paper and cardboard. The waste disposal companies refuse incineration plants, generate electricity and heat from waste not recycled to new materials. Freshwater Shows the total consumption of freshwater used in the office buildings and the production facilities. The consumption is dependent on projects, since a certain amount of water is used in testing of various systems on board the vessels. Ballast water With respect of the environment, we keep track of the amount of foreign ballast water we import from foreign seas, and discharge outside our yards. For the Norwegian yards, this is basically the ballast water carried in the hulls towed from Braila and Tulcea. From 212 and onwards, the fresh water in Tulcea and Braila is provided by the public water supply. From an environmental point of view, it is better to use fresh water for this purpose. It has been documented that fresh water organisms do not survive when they are flushed out into the sea.

21 Environmental accounts In the following pages we will present the detailed environmental accounts for each yard. Electricity Includes the total electricity consumed at the yards facilities (office buildings, workshops and machinery) and for the pumps, tools, ventilation, lighting and heating used on the vessels during the outfitting period. Solvents Shows the amount of solvents used during production, e.g. in connection with the consumption of paint. The solvents in paint are released into the air when the paint dries. We are continuously looking for paint systems with less solvent emission. Diesel oil for vehicles and heating in buildings A few of our yards have production workshops which are heated by oil fired systems. This explains the variation in the consumption rates for heating in buildings. Diesel is also used to power forklifts and various vehicles and machines. Fuel oil During outfitting, the vessels use fuel oil in connection to commissioning, testing and conduction of sea trials. Ships equipped with a catalyser use urea in addition to fuel, which reduces NOx emissions. The amount of fuel oil consumed will vary from yard to yard as a direct result of number and types of vessels built annually. Emissions to air Our yards use an assortment of fossil fuels for powering vessels and vehicles, as well as for heating, etc., thus releasing a certain amount of pollution into the air. Our Synergi software calculates emissions of CO2, NOx, SOx and PM (particulate matter) related to these activities.

22 Vard Aukra Norway Established: 1949 Total yard area: 53 5 m² Employees: 99

23 Vard Aukra Waste recycling ratio % 99% 99% 1% 8% 71% 6% 4% 2% % Total waste recycling (t) 2 Recycled (t) Not recycled (t) Energy used Emissions to air Waste recycled Electricity 3.15 GWh CO t Metal 49 t NO X kg Wood 39 t Freshwater used SO X 93 kg Paper/ plastic 4 t Freshwater m 3 PM 491 kg Sand from sandblasting - Recycled waste total 212 t Chemicals used Solvents 17 l Waste not recycled Diesel 15 5 l Waste to landfill site 2 t Fuel oil vessels l

24 Vard Aukra Recycled waste total (tons) Freshwater (m 3 ) Waste to landfill site (tons) Electricity (GWh) ,9 3,6 3,

25 Vard Braila Romania Established: 194 Total yard area: 5 m² Employees: Page 25

26 Vard Braila Waste recycling ratio % Total waste recycling (t) 1% 8% 6% 85% 91% 91% Recycled (t) 465 4% 2% Not recycled (t) % Energy used Emissions to air Waste recycled Electricity 1.64 Gwh CO t Metal t NO X kg Wood 118 t Freshwater used SO X 13 kg Paper/ plastic 21 t Freshwater m 3 PM 682 kg Sand from sandblasting t Recycled waste total t Chemicals used Solvents 83 7 l Waste not recycled Diesel l Waste to landfill site 465 t Fuel oil vessels l

27 Vard Braila Recycled waste total (tons) Freshwater (m 3 ) Waste to landfill site (tons) Electricity (GWh) ,5 17 1,

28 Vard Brattvaag Norway Established: 195 Total yard area: 2 5 m² Employees: 162

29 Vard Brattvaag Waste recycling ratio % 94% 1% 1% 8% 65% 6% 4% 2% % Total waste recycling (t) 1 Recycled (t) Not recycled (t) Energy used Emissions to air Waste recycled Electricity 3.99 GWh CO t Metal 283 t NO X kg Wood 8 t Freshwater used SO X 229 kg Paper/ plastic 9 t Freshwater m 3 PM 1 22 kg Sand from sandblasting - Recycled waste total 528 t Chemicals used Solvents 7 l Waste not recycled Diesel l Waste to landfill site 1 t Fuel oil vessels 516 l

30 Vard Brattvaag Recycling waste total (tons) Freshwater (m 3 ) Waste to landfill site (tons) Electricity (GWh) , 3,

31 Vard Brevik Norway Established: 1916/1986 Total yard area: 34 1 m² Employees: 127

32 Vard Brevik Waste recycling ratio % Total waste recycling (t) 1% 8% 6% 4% 2% % 93% 76% 8% Recycled (t) Not recycled (t) Energy used Emissions to air Waste recycled Electricity 3.84 Gwh CO t Metal 99 t NO X kg Wood 73 t Freshwater used SO X 42 kg Paper/ plastic 22 t Freshwater m 3 PM kg Sand from sandblasting 9 t Recycled waste total 298 t Chemicals used Solvents 3 44 l Waste not recycled Diesel l Waste to landfill site 76 t Fuel oil vessels l

33 Vard Brevik Recycling waste total (tons) Freshwater (m 3 ) Waste to landfill site (tons) Electricity (GWh) ,29 3, 3,

34 Vard Langsten Norway Established: 1945 Total yard area: 33 7 m² Employees: 185

35 Vard Langsten Waste recycling ratio % Total waste recycling (t) 1% 8% 82% 87% 87% 142 6% 4% 2% Recycled (t) Not recycled (t) % Energy used Emission to air Waste recycled Electricity 8.36 Gwh CO t Metal 377 t NO X kg Wood 138 t Freshwater used SO X 555 kg Paper/ plastic 19 t Freshwater m 3 PM kg Sand from sandblasting 7 t Recycled waste total 931 t Chemicals used Solvents l Waste not recycled Diesel l Waste to landfill site 142 t Fuel oil vessels l

36 Vard Langsten Recycling waste total (tons) Freshwater (m 3 ) Waste to landfill site (tons) Electricity (GWh) ,4 9, 8,

37 Vard Niterói Brazil Established: 1997 Total yard area: 65 m² Employees: 698

38 Vard Niterói Waste recycling ratio % Total waste recycling (t) 1% 8% 6% 4% 2% % 74% 91% 96% Recycled (t) Not recycled (t) Energy used Emissions to air Waste recycled Electricity 7.51 Gwh CO t Metal 546 t NO X kg Wood - Freshwater used SO X 279 kg Paper/ plastic - Freshwater m 3 PM kg Sand from sandblasting - Recycled waste total t Chemicals used Solvents l Waste not recycled Diesel 19 l Waste to landfill site 128 t Fuel oil vessels 639 l

39 Vard Niterói Recycled waste total (tons) Freshwater (m 3 ) Waste to landfill site (tons) Electricity (GWh) ,85 8,5 7,

40 Vard Promar Brazil Established: 211 Total yard area: 25 m² Employees: 1 717

41 Vard Promar Waste recycling ratio % Total waste recycling (t) 1% 8% 6% 4% 2% % 72% 72% Recycled (t) Not recycled (t) Energy used Emissions to air Waste recycled Electricity Gwh CO t Metal 3 36 t NO X kg Wood 277 t Freshwater used SO X 87 kg Paper/ plastic 21 t Freshwater m 3 PM 454 kg Sand from sandblasting - Recycled waste total t Chemicals used Solvents 9 92 l Waste not recycled Diesel l Waste to landfill site 1 62 t Fuel oil vessels l

42 Vard Promar Recycling waste total (tons) Freshwater (m 3 ) Waste to landfill site (tons) Electricity (GWh) , 13,

43 Vard Søviknes Norway Established: 1936/1946 Total yard area: 57 m² Employees: 176

44 Vard Søviknes Waste recycling ratio % Total waste recycling (t) 1% 8% 6% 4% 2% % 83% 94% 9% Recycled (t) Not recycled (t) Energy used Emissions to air Waste recycled Electricity 7.7 Gwh CO t Metal 54 t NO X kg Wood 187 t Freshwater used SO X 27 kg Paper/ plastic 35 t Freshwater m 3 PM 1 43 kg Sand from sandblasting 34 t Total recyclable waste t Chemicals used Solvents l Waste not recycled Diesel 83 l Waste to landfill site 128 t Fuel oil vessels 73 l

45 Vard Søviknes Total recyclable waste (t) Freshwater (m 3 ) Waste to landfill site (t) Electricity (GWh) ,6 7, 7,

46 Vard Tulcea Romania Established: 1975 Total yard area: 75 m² Employees: 2 735

47 Vard Tulcea Waste recycling ratio % Total waste recycling (t) Recycled (t) Not recycled (t) Energy used Emissions to air Waste recycled Electricity Gwh CO t Metal t NO X kg Wood 237 t Freshwater used SO X 258 kg Paper/ plastic 129 t Freshwater m 3 PM kg Sand from sandblasting t Recycled waste total t Chemicals used Solvents l Waste not recycled Diesel l Waste to landfill site t Fuel oil vessels l

48 Vard Tulcea Recycled waste total (tons) Freshwater (m 3 ) Waste to landfill site (tons) Electricity (GWh) , 41, 35,

49 Vard Vung Tau Vietnam Established: 27 Total yard area: 116 m² Employees: 755

50 Vard Vung Tau Waste recycling ratio % Total waste recycling (t) 1% 8% 6% 4% 2% % 78% 79% 76% Recycled (t) Not recycled (t) Energy used Emissions to air Waste recycled Electricity 7.63 Gwh CO t Metal t NO X kg Wood 169 t Freshwater used SO X 33 kg Paper/ plastic 2 t Freshwater m 3 PM kg Sand from sandblasting - Recycled waste total t Chemicals used Solvents - Waste not recycled Diesel l Waste to landfill site 466 t Fuel oil vessels 86 l

51 Vard Vung Tau Recycled waste total (tons) Freshwater (m 3 ) Waste to landfill site (tons) Electricity (GWh) , 7, ,23 2 2

52 Overview Resources used Aukra Braila Brattvaag Brevik Langsten Niteroi Promar Søviknes Tulcea Vung Tau Electricity 3.15 GWh 1.64 GWh 3.99 GWh 3.84 GWh 8.36 Gwh 7.51 Gwh Gwh 7.7 GWh Gwh 7.63 GWh Freshwater m m m m m m m m m m 3 Solvents 17 l 83 7 l 7 l 3 44 l l l 9 92 l l l - Diesel, heating/ vehicles 15 5 l l l l l 19 l l 83 l l l Fuel oil vessels l l 516 l l l 639 l l 73 l l 86 l Emissions to air CO t 176 t t t 4 4 t t 989 t t t t NO X kg kg kg kg kg kg kg kg kg kg SO X 93 kg 13 kg 229 kg 42 kg 555 kg 279 kg 87 kg 27 kg 258 kg 33 kg PM 491 kg 682 kg 1 22 kg kg kg 1 462kg 454 kg 1 43 kg kg kg Waste recycled Metal 49 t t 283 t 99 t 377 t 546 kg 3 36 t 54 t t t Wood 39 t 118 t 8 t 73 t 138 t t 187 t 237 t 169 t Paper and plastics 4 t 21 t 9 t 22 t 19 t - 21 t 35 t 129 t 2 t Sand from sandblasting t - 9 t 7 t t t - Recycled waste total 212 t t 528 t 298 t 931 t t t t t t Waste not recycled Waste to landfill site 2 t 465 t 1 t 76 t 142 t 128 t 1 62 t 128 t t 466 t Waste recycling ratio 99 % 91 % 1 % 8 % 87 % 96 % 72 % 9 % 93 % 76 %

53 Thank you for your attention European network for Health Technology Assessment JA

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