MICHELIN - 2008 ANNUAL REPORT

Risk Management
Operating Risk Management
Michelin relies on three tiers of independent and highly responsible
groups to guarantee the robustness of its risk control policy:
● Operating managers identify and manage risks in their respective
entities (prevention, protection and business continuation plan) in
line with Group standards.
● Group Services (Finance, Legal, Environment & Prevention…):
analyze risks, define prevention and protection standards,
manage and monitor implementation of risk policy in their own
field of expertise.
● Internal auditors: review overall risk control measures.
Michelin’s risk policy is defined, supervised and coordinated by
the Group’s Risk Manager.
The Group’s Risk Committee meets 3 times per year to review a
number of risk control measures, in order, more specifically, to
support the Managing Partners in their risk control decisions with
special emphasis on potentially serious risk.
Financial Risk
Financial risk is dealt with in Note 4 of the Consolidated Financial
Statements, on page 95 of this Report.
Industrial Hazards
Industrial hazard control is vital for the continuation of Michelin’s
operations over the long term while ensuring the protection of its
personnel, its assets and its environment.
Michelin’s industrial risk map is updated at least once a year. This
helps to identify Group risks and assess their criticality. Prioritized
multi-annual action plans with a strong emphasis on prevention
are drawn up and implemented in the annual plans. They address
in particular the issues of safety at the workplace, industrial
hygiene, and asset and environmental protection.
Monitoring of the Group’s progress in the areas of Environment
and Prevention (EP) is based on:
● 5-year orientations and objectives, which are revised each year
based on the evolution of the assessments that are carried out.
Such orientations and objectives are given concrete expression in
progress plans and investment plans for each operating entity.
● a network of experts who are based in each site and bring
technical and methodological support to the local site managers.
The latter bear ultimate responsibility for the performance of their
entity’s Environmental and Prevention performance.
The robustness of the approach is based on implementation
of an Environmental and Risk Prevention Management System
(SMEP). This is an extension to all other EP fields (Asset Protection,
Work Safety, Industrial Hygiene, Ergonomics) of the existing
Environmental Management System.
The system is being rolled out in the industrial sites. Michelin
teams have been auditing sites since 2005 and 2006. The system
will be fully deployed by 2011.
LIMITED INDUSTRIAL HAZARDS
The main risk factors arising from Michelin’s operations are as follows
Industrial operations Main risk factors Michelin action
Synthetic rubber production
2 plants, Bassens in France and Louisville, Kentucky in the USA.
Inflammability of hydrocarbons used in synthetic rubber. Regular review of safety and site protection measures; ongoing
significant investment programs to further enhance risk control
and limit the consequences of an event.
Metal reinforcement production
Production in 10 sites supplying 68 factories worldwide.
Rubber mix production
Production in 49 sites supplying 68 factories worldwide.
Textile reinforcement production
Production in 3 sites.
Accidental spillage from electrolytic metal reinforcement
processing plant.
Fire-prone situation.
Vapor and gas emitted while manufacturing adhesives.
Regular inspection of the facilities and processing of effluents at
waste water treatment plants.
Pursuit at Group level of a program to equip all facilities with sprinkler
devices and risk confinement through fragmented operations.
Installation of air purifiers at every plant.
158 2008 Michelin Annual Report