The Concept of improvement and development of activities in the field of health and occupational safety in

"KMG-Security" LLP for the period 2012-2015

Introduction

1. Analysis and the current state of health and safety within the Company
2. Goals, objectives and priority directions for the development of the system of occupational safety and health
3. Introduction of best practices in the field of occupational safety
4. Improvement and development of the occupational safety management system (OSMS)
5. Training and improvement of professional skills of employees
6. Information support for the health and occupational safety management system
7. Mechanism and timing for the Concept implementation
8. Mechanism and timing for the Concept implementation

INTRODUCTION

Occupational safety refers to the condition of the employee security, provided by the complex of measures, excluding harmful and dangerous effects on the workers in the course of employment. The safe working conditions are conditions created by the employer, where the impact of harmful and hazardous production factors on worker is absent or the level of their impact does not exceed safety standards.

The safety of the production equipment is compliance of the production equipment with the requirements of occupational safety in the performance of assigned functions under conditions established by the regulatory technical and design documentation.

The safety of the production process is the conformity of production process to the requirements of occupational safety under the conditions established by the regulatory and technical documentation.

The basic principles in the field of occupational safety and health are the following:

1. precedence of life and health of the worker in relation to the results of the production activity;
2. preventing irreversible effects harmful impact of production factors on the life and health of the worker;
3. establishing uniform requirements in the field of occupational safety and health through the development and adoption of internal regulations;
4. production regulation of occupational safety and health issues;
5. ensuring coherent actions in the field of occupational safety and health between the authorized body, its territorial subdivisions and representatives of employers and workers;
6. transparency, completeness and accuracy of the information on the condition of occupational safety and health;
7. participation of the representatives of employees in formulating departmental programs on occupational safety and health, developing of internal regulations containing rules of occupational safety and health, as well as carrying out of supervision over compliance with the legislation of the Republic of Kazakhstan on labor safety and protection.

The main issue at the present time is regulation of relations in the field of occupational safety in SEMSER SECURITY LLP (hereinafter referred to as the Partnership), which are aimed at ensuring safety, preservation of life and health of workers in the process of labor activities, as well as establishment of basic policy guidelines in the area of occupational safety and health.

The Partnership in accordance with the long-term strategy of its development is committed to creating safe and healthy working conditions for its employees, which requires from the company to develop and apply innovative conceptual approaches in the field of health and occupational safety, including best practices and international practice in this area.

The present Concept was developed taking into account the above-mentioned factors and contains specific goals and future directions for development and improvement of occupational safety and health of employees of the Company.

The Concept takes into account the current trends in the development of occupational safety and health in the Republic of Kazakhstan, as well as main directions in this field established by the NC “KazMunayGas” JSC.

This document shall become a basis for development and adoption of all subsequent internal standards on occupational safety and health issues in the Partnership.

1. Analysis and the current condition of health and occupational safety within the Company

The Partnership was founded in 2001, and at present time it is a core holding company whose enterprises provide a wide range of services in the field of ensuring comprehensive security.

The Partnership operation is aimed on the following:

1. creation of effective system for the protection of the assets of the NC «KazMunayGas» JSC against illegal actions and new threats, including terrorism;
2. formation of the uniform policy in the field of the protection of the assets of the NC «KazMunayGas» JSC against illegal actions;
3. development and implementation of uniform standards for the creation, management, and improvement of the corporate security system in the NC «KazMunayGas» JSC in order to align it with the legislation of the Republic of Kazakhstan, international best practices for prevention and non-admission of illegal actions, minimization of potential damage.

In accordance with the current regulations the Partnership carries out security activity exclusively for the NC «KazMunayGas» JSC and affiliated legal entities. The Partnership is represented in almost all regions, where the Company composed of 14 regional subdivisions carries out its production activity.

Today "KMG-Security" Group of companies (hereinafter referred to as the Company) includes:

• "KMG-Security" LLP;
• Semser- Өрт Сөндіруші LLP;
• Semser specialized training center LLP.

The staff of the Company consists of more than 7500 professional workers of security, fire-fighting service and technical specialists that support the security and regime measures events at 550 sites of varying degrees of production complexity, in terms of their industrial, technological and fire safety, out of which more than 40 sites are covered by the fire protection services.

The specificity of work of the Partnership’s employees involves the risks associated with resistance to criminal acts, liquidation of accidents, natural and man-made emergencies. Most of the workers by virtue of their professional activities are under conditions of constant psychological pressure and extreme risk.

The Partnership on its part undertakes considerable efforts aimed at creating favorable conditions for performing functional job duties by the employees.

To this end, within the frameworks of the Partnership’s Policy of in the field of health, safety and environment, based on the current state standards, the regulatory legal framework governing this sphere of social and labor relations in the subdivisions was established. The structure and levels of occupational health and safety management were determined. The organizational and educational schemes in this area are established and implemented. Required supervision over of compliance with labor legislation at each workplace is implemented. Funding is allocated.

However, the current occupational safety management system requires further improvement.

Despite the declining trend the number of accidents and occupational diseases among workers still remains high. In this regard the incidents with personnel at transport involving injuries of workers are especially critical.

Occupational safety and health management system analysis points to the need for more active use of the economic levers of labor safety management along with with the administrative, legal, organizational approaches.

Occupational safety as a system for provision of life and health of workers in the course of employment cannot be considered in isolation from the social and economic situation, since it is closely related to the current condition of the economy, fixed assets, environment, level of treatment-and-prophylactic service, individual and collective protection equipment for workers, the quality of education and training, research and information potential.

In this regard, at the present stage of development it is required to significantly enhance preventive and economic orientation of the solutions in the field of occupational safety on all its levels and, above all, towards the development and implementation of methods of forecasting of major trends that reflect the status of the conditions and occupational safety in the workplace.

It is necessary among the priority areas, where active work is carried out at present time and which are reflected in a long-term development strategy, to pay increased attention to the state of occupational safety and health of the personnel, to the improvement of the quality of the personnel training, to the creation of required conditions under which they work, to strengthening the material and technical base, to strengthening of prevention and non-admission of accidents and injuries in the subdivisions.

It is essential to improve arrangement of the occupational health and safety management, make it available for use by all employees without exception, adapt it to modern business conditions and new needs of the Partnership development, brought internal norms and standards in the field of occupational safety and health into line with international requirements.

2. Objectives, tasks and priorities for the development of the occupational safety and health system

2.1. The main objective is to create the required conditions and prerequisites for the achievement of world-class companies’ level in terms of occupational safety and health, sustainable development of the Partnership allowing to protect life, to preserve the health of employees, to ensure the security of their labor by implementing an effective system of occupational risks management at each workplace and in the whole Company.

In order to achieve the above-mentioned objective it is proposed to implement a number of specific organizational activities aimed at settlement of the following tasks:

1. improving the organization of work in the field of health and occupational safety at all levels of operational management;
2. ensuring safe working conditions and protection of life, preservation of the health of all categories of staff;
3. training, retraining and upgrading the skills of workers in the field of occupational safety and health;
4. building the system of individual work with the personnel;
5. increasing the level of injury prevention, including increasing interaction with the Customers’ occupational safety and health services and joint certification of working conditions at the workplaces;
6. required provision of personnel with the personal protective equipment;
7. harmonization of reporting system for injuries and occupational diseases with the development of additional measures for their prevention;
8. introduction of a progressive domestic and foreign experience in the field of occupational safety and health;
9. development of new and re-development of existing guiding regulatory and technical documents.

2.2. The main top-priority directions for the development of the occupational safety and health system are as follows:

1. improvement of the regulatory legal framework in order to ensure the transition to economic methods for occupational safety management, as well as to bring internal regulatory documents in line with the current legislation and for simplification of their enforcement;
2. establishment of the occupational risks management system;
3. introduction of international occupational safety standards ;
4. improving the system of continuous education of employees on occupational safety on the basis of modern training technologies. Development of effective training programs in the field of occupational safety and health;
5. introduction of technical equipment and technologies that increase the occupational safety level;
6. development and improvement of technical equipment, the structure and level of training of workers maintaining the facilities of increased danger, provision of them with high-quality protective clothing, personal protection equipment;
7. improving the insurance and health care system for workers;
8. increasing the personalization of managing officers’ responsibility for ensuring the occupational safety and health;
9. study and implementation of the experience of other companies;
10. popularization and promotion of occupational safety and healthy way of living, using available resources of the Company, as well as the mass media;
11. establishment of effective systems for monitoring conditions and protection of labor at the workplace, prevention and localization of accidents, introduction of automated information systems for support of monitoring;
12. ensuring close collaboration with the state supervision and control authorities;
13. active development of material incentive tools and motivation of employees for the development and maintenance of the Company's policy in the field of occupational safety and health. The employee must be interested to show continuous leadership in the field of health, occupational safety and environment, to demonstrate continuous application of health, occupational safety and environment policies, procedures, rules and norms;
14. effective carrying out of preventive measures to prevent impact of hazardous and harmful production factors on workers, population and environment

2.3. In order to achieve the established objectives tasks the Company shall:

1. use the whole available and practically implemented range of measures for prevention of emergency situations associated with personnel and mitigation;
2. observe the priority of planned and ongoing activities and measures related to the improvement of labor conditions;
3. ensure compliance with the requirements of legislation of the Republic of Kazakhstan, international agreements, sectoral and corporate regulatory requirements regulating the operation of security organizations in the field of labor protection, industrial safety and health;
4. carry out its activities in the field of occupational safety and health, in accordance with the requirements of the rules and regulations of the Republic of Kazakhstan, international standards;
5. demand from the Customers and contractors to apply the same standards and norms in the field of security, health and occupational safety adopted by the Partnership;
6. involve all staff of the Partnership for active participation in the works on security and occupational safety and health;
7. provide priority financing of activities aimed at improving safety and creation of healthy and safe working conditions, seek and allocate sufficient funds and resources;
8. implement appropriate incentive and motivation measures aimed on improving the qualification of employees of the Partnership on a regular basis

3. Implementation of the best health and occupational safety practices

The Company shall build on its work in the area of occupational safety and health, taking into account the requirements of normative legal acts, rules and regulations of the authorized bodies of the Republic of Kazakhstan, internal departmental standards of the NC “KazMunaiGas” JSC, taking into consideration the international requirements and standards.

Implementation and maintenance of activities in accordance with international standards in the field of occupational safety and health, the latest achievements of science and engineering, best practices in accordance with the international quality standards will allow in the long term to:

• minimize risks associated with production activity;
• improve staff satisfaction and responsibility for the results of their work:
• improve economic efficiency of rendering security services;
• continuously improve activities in the field of health and occupational safety;
• avoid claims on part of the authorized bodies of the Republic of Kazakhstan, overhead organizations and customers ordering security services;
• ensure customer satisfaction in the provided security services;
• increase the level of social partnership and create a healthy social climate in subdivisions, ensure involvement of whole staff in operation of the health and occupational safety management system.

4. Improvement and development of the health and occupational safety management system

The main task of the health and occupational safety management system (hereinafter referred to as the HOSMS) in the Partnership is transition from responding to already happened cases to risk management and prevention of damage to the health of the workers. This objective can be achieved by creating a comprehensive, end-to-end occupational risks management system, which shall form the basis for management of the system of preservation of the life and health of workers in the course of their work activities, covering all workplaces, irrespective of Client served by them.

Evaluation, monitoring and management of occupational risks include:

• carrying out analysis and evaluation of the health status of employees in a causal relationship with working conditions;
• informing workers about occupational risk, likelihood of its occurrence and control methods, as well as on the implications and responsibilities;
• monitoring of the dynamics of professional risk indicators;
• carrying out preventive measures for reducing the probability of damage to the workers ' health (probability of occurrence of insured event).

The Partnership shall organize a thorough accounting and fulfillment of requirements of the HOSMS policies and support activities undertaken to protect the health, safety and environment. It is necessary to create and maintain a corporate culture that supports HOSMS, on the basis of the following:

1. willingness to improve indicators in the area of HOSMS;
2. motivation to improve personal indicators in the area of HOSMS;
3. taking personal responsibility for the indicators in the area of HOSMS;
4. participation of employees at all levels in the HOSMS development;
5. commitment to effective HOSMS.

The company's management commitment to HOSMS shall include the following:

• allocation of required resources, time and funds for HOSMS issues;
• personal example in daily work;
• active participation in work and HOSMS revision both at local and remote sites;
• recognition of the significance of the HOSMS issues in business decisions;
• recognition of compliance with efficiency criteria in cases where the objectives are achieved;
• promotion of the employees’ proposals regarding measures to improve the work in the field of HOSMS;
• participation in internal and external initiatives.

A leading role of management in the promotion of a corporate culture that would contribute to achieving good performance on HOSMS and where it could function effectively is required. Senior management can encourage the employees for active participation in improving HOSMS indicators, motivation, and personal responsibility.

In the structural subdivisions and subsidiaries the Company has to develop procedures for ensuring the competence of personnel performing certain works and tasks that are critical for HOSMS condition, based on the following:

• personal abilities;
• skills acquired in course of experience;
• acquired knowledge.

Competence assurance systems shall be applied both for already recruited personnel and in course of recruitment of new personnel. It is necessary to undertake a regular review and evaluation of the level of competence of personnel in the field of functions performed by them taking into account the personal development and training required to become competent in a changing jobs and technologies. Procedures for ensuring competence include, inter alia:

• systematic analysis of job requirements;
• assessment of the work of personnel according to certain criteria;
• documented evidences of the competence of the employee;
• periodical reassessment program.

5. Training and improvement of professional skills of the employees

When implementing new approaches to health and occupational safety management, there is a need for personnel training, taking into account the specificity of carried out works and for the competent execution of works that will allow to have the appropriate qualifications and competence to perform work assignments.

Health, occupational safety and environment training is the process of acquiring and sharing knowledge, presentation to employees of major or specific standards of safe work and safety, prevention of personal injuries and diseases, familiarization with new major or specific standards, development of the ability to identify actual and potential hazards in the production environment and ways for their prevention, elimination and management.

Taking into consideration that the production environment is continuously changing, training shall be conducted on a regular basis, by way of organizing training courses, workshops in specific areas, refresher courses, drills, workouts and practice scheduled exercises.

During personnel professional preparation, training and qualification improvement it is necessary to:

• provide an appropriate level of personnel qualification involved for work at the facilities, including the preparation for action in case of possible accidents and emergency situations;
• organize work on improvement of the system of vocational selection and psychological training of workers that complies with the level of applied equipment, importance of the decisions taken;
• improve the health and occupational safety management system in all structural subdivisions of the Partnership;
• regularly hold seminars on sharing experience, introduction of modern methods teaching of employees

It is necessary to improve training programs, develop and implement on existing educational base of the Company (“Semser” Special Training Center" LLP) the training programmes for employees of the Company on health and occupational safety on the basis of modern technologies, taking into account the specificities of operation.

It is required to develop procedures for ensuring and improving the competence of the personnel by identifying training needs and conducting appropriate training for whole personnel, including training at the workplace. The extent and nature of training must be sufficient to ensure the implementation of the Policies and objectives of the Company in the field of health, occupational safety and environmental protection.

It is necessary to maintain appropriate record of conducted training, planning of qualification and skills improvement, develop systems for monitoring the efficiency of training programs and introduce amendments to them as necessary.

6. Information support for health and occupational safety management system

The Partnership shall develop the accounting and analysis system to reflect the degree of the health and occupational safety management system policy implementation and its requirements and record the extent of implementation of established objectives and performance criteria.

It is necessary to have procedures for ensuring the integrity, accessibility and control over such accounting, which must include the records about the relevant contractors and procurements, results of audit and corrective actions.

It is essential to establish the duties and powers for initiating the identification, determination and implementation of corrective action in case of non-compliance with these requirements in respect of the HOMS, its functioning or results. Non-compliance cases can be identified by monitoring, through the signals coming from the employees, contractors, customers, public authorities or the public, as well as investigations of the incidents.

It is required to develop clear procedures for such identification and corrective actions, through which the immediate supervisor in collaboration with the representative of top management, shall:

1. notify the parties concerned;
2. identify cause-and-effect relationship and the possible main cause;
3. define an action plan or follow-up revision plan;
4. initiate preventive actions which are adequate to the nature of the violation;
5. carry out control to ensure the effectiveness of undertaken preventive measures;
6. notify the appropriate personnel about changes and implement them.

It is necessary to have procedures for internal accounting and notification of incidents that have affected or could affect the HOMS in order to learn the right lessons, and take appropriate actions.

There must be a mechanism for incidents notification of to regulatory authorities to the extent required by law, or, depending on the requirements of the company policy to the external communication.

After the incident it is necessary to identify both the circumstances of the incident and the shortcomings in HOMS that led to it, so that persons, who are responsible for taking actions after an incident, will be able to make their conclusion.

Mechanism and obligation to take actions after the incident must be clearly identified. Generally the mechanism should resemble the procedure for implementation of corrective action in case of non-compliance with the HOMS.

Obligations to take measures after the incident must be adequate to the scale of the real or potential effects.

7. Mechanism and timing of implementation

The mechanism of the program implementation includes financial and organizational and legal framework for addressing the problems by developing appropriate planned activities.

The Concept implementation is carried out by program and target method through focused and coordinated activities of all stakeholders.

In the case of the restructuring of the subdivisions of the Partnership, as well as affiliation of new subdivisions will be subject to adjustment.

All subdivisions and subsidiaries of the Partnership must participate in addressing the above-mentioned tasks in accordance with their established functions.

The main source of measures funding is the budget of the Partnership, as well as additional funds from other forecasted sources of funding. Annual funding is expected for the Concept implementation.

The amount of spent money will be clarified each year based on the volume of production activity and availability of funds from other sources.

The terms for the Concept implementation are defined for 2012-2015 period.

8. Expected outcomes and effectiveness of the Concept implementation

Implementation of activities envisaged in the Concept during specified period will allow to:

1. establish and improve the system for:
- health and occupational safety management in the subdivisions of the Partnership aimed at prevention of occupational accidents and occupational diseases;
- training of occupational safety workers on the basis of modern training technologies and continuous education programs, improving the quality of training of workers;
- insurance and health care of workers;

2. brought the internal norms and standards in the field of occupational safety and health into line with international requirements;
3. strengthen the material and technical base of health and occupational safety system required for the effective development of specified direction at the level of international standards, as well as to reduce the proportion of workers employed in conditions that do not meet sanitary and hygienic standards;
4. provide:
- safe working conditions for workers in the course of employment at level achieved by foreign companies;
- close cooperation of the health and occupational safety Service of the Partnership with public supervision and control authorities, the relevant subdivisions of the NC “KazMunayGas” JSC;
5. increase the personal responsibility of managers for ensuring occupational safety and health;
6. optimize the prime cost of provided services by reducing the level of indirect losses and expenses;
7. enhance social, image and competitive appeal sought by the Partnership.

The Partnership understands that the most precious thing is the life and health of workers, as well as the condition of full-fledge natural environment. In this regard, the management of the Partnership will continue to support and develop the most promising directions that make a particular contribution to the development of safe production activities and protection of the environment.