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Health and safety - Nexa | 2017 Annual Report

Material Issue
Safety and Health

Occupational Safety

People are our most important capital resource. That is why we consider safety to be nonnegotiable. Our goal, set in the Strategic Plan, is to achieve a zero accident rate. To do this, we have identified 14 critical risks for operations, with security protocols that must be constantly monitored. These processes were strengthened in 2017 so that we can improve the recorded accident chart.

During the year, our Total Recordable Injury Frequency Rate (TRIFR) was 2.46, including accidents with and without lost time both for our own employees and third parties, compared to 2.25 in the previous year. The accident severity rate was 1,384 (versus 510.3 in 2016), reflecting the seven fatal accidents that occurred during the year. GRI 403-2

We had seven fatalities in our operations, six in Peru and one in Brazil, all involving outsourced employees. After the incidents, we conducted a comprehensive review and our Board of Directors approved a plan to prevent fatal accidents, dramatically reduce the incidence of accidents and raise the level of safety culture in the Peru mining facilities. Some initiatives included in the plan include leadership development, training for employees and outsourced workers, and technology initiatives such as the Digital Mining project and the Automation Plan.

Our Board of Directors provides direct oversight for the implementation of these measures and schedules the quarterly effectiveness evaluations. Fatal accidents in 2017 occurred in the following situations:

❯ A rock slide during underground work in El Porvenir mine (January 25);
❯ An accident with a piece of heavy equipment (LHD loader) at the Atacocha underground mine (March 8);
❯ Maintenance activity on the automatic sampler of the conveyor belt in El Porvenir (March 18);
❯ Electric shock while performing maintenance activities in Cajamarquilla (March 22);
❯ A fall between levels of the underground mine, in Cerro Lindo (May 10);
❯ Incident involving heavy truck during maintenance in Atacocha (October 15);
❯ An accident involving a part from the industrial cleaning equipment that was operating in Juiz de Fora (December 5).

Accident Frequency Rate
GRI 403-2

Safe Behavior

In 2017, more than ever, the safety issue was the focus of our strategy. We revisited our integrated health, safety and environmental management system and worked to improve our standards, procedures and tools to make it even more robust and efficient. A number of measures were taken throughout the year to promote an environment that preserves the physical integrity of all employees, whether they are our workers or outsourced employees.

We conduct field audits, with on-site observation of employee behavior and compliance with safety procedures. In addition, safety indicators are part of the variable remuneration package for managers and operations professionals, as well as the CEO and directors, general managers and managers of corporate areas. In 2017, we created the Nexa Integrated Rate, an index that combines the results of the TRIFR and the severity rate, which will also be targets for all company executives by 2018.

We have progressed the implementation of a specific safety improvement plan for our Peruvian facilities (Peru Safety Plan), which is designed to eliminate fatal accidents; drastically reduce the number and severity of accidents; and to raise, in the medium term, safety consciousness in operating units. The project, which is being developed jointly by several areas, has been approved by the managing directors and the Board of Directors. Leaders from both countries are mobilizing to systemically search out the obstacles and failures to consolidate a safety culture.

The plan is divided into eight blocks, covering various issues involving safety, each with specific initiatives: Training and leadership awareness; strengthening the structure of the occupational health and safety team; implementation of the Third Party Management Program; improving the well-being and working conditions in the units; standardization of processes and procedures and improvements to contingency plans in the mining units in Peru; training and team awareness; synergy with the Digital Mining actions, focus on safety; and the Industrial Automation Master Plan, in support of risk mitigation.

We extended the Golden Rules (also called Rules for Life) to include our units in Peru. The initiative has a set of mandatory guidelines and procedures related to the critical operating risks at our operations and should, therefore, be considered inviolable and followed closely by all. In addition, we have implemented the application of consequence management for non-compliance with safety policies and procedures.

we have identified 14 critical risks for operations, with security protocols that must be constantly monitored. These processes were strengthened in 2017 so that we can improve the recorded accident chart.

Critical Risk

Blocking and isolation of energy
Working at Heights
Safe use of hand tools
Confined spaces
Light vehicles and mobile equipment

Rock falls (unstable rock in the ceilings or sides in subterranean drillings, with risk of rock slides)
Excavations (civil work, open pit, underground)
Liquid metal

Electrical installations
Hazardous chemical compounds
Protection of machines
Suspended loads
Pressurized systems
Venomous animals

Golden Rules

1. Working at heights – Work performed at a height greater then 1.80m requires the use of accident prevention safety equipment and an anchoring point approved for use.

2. Blocking and isolation of energy – The maintenance and cleaning of machinery whose moving parts, electric conductors or fluids present an accident risk must be carried out in a zero-energy state.

3. Confined space – Working in confined spaces should only be performed by trained and authorized professionals. The use of an entry permit and the monitoring of the safety watch during the entire procedure is mandatory.

4. Light vehicles and mobile equipment – The operation of light vehicles or mobile equipment requires the use of seat belts for both the driver and the passengers. The use of a mobile phone is prohibited while driving or operating equipment. Speed limits must always be observed within the units.

5. Alcohol and drugs – The use of alcohol or drugs on the premises or on duty is prohibited.

6. Rock falls – Entry to mining fronts and development is only permitted after a formal inspection that confirms it is safe.

7. Suspended loads – For these cases, the equipment must be inspected with a check list and all items must conform. Critical loads must be approved through a Work Permit and follow a rigging plan. The operating area must be isolated and warning signs posted.

8. Safety protection for machines – The protection can only be removed with machine and equipment locked and with energy shut off. At the end of the activities, the protective equipment must be replaced to avoid removal by unauthorized persons.

9. Hazardous chemical materials – Hazardous chemicals should be handled only while the employee is using HSE-approved PPE. All hazardous chemicals should be on the master list of authorized products. Safety and protection systems for tanks, cylinders and pipelines of hazardous chemicals cannot be removed or disabled.

10. Accident reporting – Every accident, regardless of its severity, must be reported.

11. Work authorization – For activities involving critical safety hazards, it is mandatory that all workers involved have formal authorization.

12. Risk assessment – Prior to any activity, a prior and formal risk assessment must be carried out through the following tools: Preliminary Risk Analysis (APR) for all activities, except for supervision activities, area inspections, site visits and administrative activities; Procedures for routine activities; PPT for non-routine and high-risk activities.

We are continuing our “coaching” process in the Peruvian units, where we have already helped over 400 managers and that is now even more focused on creating a safety culture. The program prioritizes guidelines that range from the identification of risks to zero tolerance for inappropriate behavior that can lead to accidents.

Along with the implementation of policies and tools, the safety team’s structure itself also changed and gained additional overall weight in the Peruvian mining units through the creation of a specific management team dedicated to safety. This team is fully aligned with the other units, the restructuring of the workforce based on each unit’s size and the risks associated with its operation and the introduction of a technical training program for the area’s employees.

In addition, other activities were devoted to improving mine procedures and inspections, strengthening the field safety teams with better trained personnel.

Safety for Outsourced Employees

For outsourced labor management, one of the Safety Plan’s most important blocks, activities range from selection and hiring of our strategic partners, training of their operational professionals and managers, risk management in outsourced activities, awareness management and the recognition and reward process for companies and professionals that best serve our health and safety culture. With regard to the health and safety issues, we want to have with us companies that are as engaged as is Nexa in the prevention and elimination of any and all accidents.

Safety in Logistics

Our logistics operations presented low daily and serious accident rates. This was due to the success of the accident reduction program implemented in 2015. One of the highlights was the introduction of the Health, Safety and Environment (HSE) Management Manual for logistics operations, published in 2016. The document is part of the company’s overall support of legal requirements and aims at ensuring that suppliers closely follow the standardized internal guidelines.

In 2017, several activities were focused on logistical safety, such as the creation of safety committees with our logistics providers, safety campaigns, simulated emergency drills and training. All activities were integrated between the Brazilian and Peruvian operations.

Aimed at both inbound and outbound transport operations, the manual addresses such issues as contractor requirements for logistics services, safety rules, communication and event analysis, requirements for the transportation of dangerous cargoes and emergency response guidelines, involving internal and external processes — external transit of cargo, port terminals and warehouses under logistical management. In addition to the publication of the manual, we also updated the logistics service contracts with HSE guidelines for common cargo and hazardous cargo.

Another activity in this regard was the 1st Logistics Safety Committee meeting for transporters. The event, at the Três Marias and Juiz de Fora units, involved discussions and planning actions to improve logistics operational safety. In addition to sharing experiences, ideas and best practices, the committee prepared a work plan containing 12 safety actions.

who now are even more focused on creating a safety culture.