MICHELIN - 2008 ANNUAL REPORT

FIRE RISK
Fire is the Group’s main industrial hazard, both at process and
raw material and finished product storage levels. The number
of significant fire starts reported Group-wide is, however, very
limited.
For more than five years, no fire nor in fact any other industrial
accident, resulted in serious damage to personnel, Group or
third-party assets or environmental impact for the neighboring
communities.
Efficient control of fire hazards hinge on a detailed evaluation
approach and proper implementation of means of prevention,
protection and intervention.
● Michelin took the initiative of an ambitious test program,
aimed at improving and sharing technical knowledge in the area
of automatic protection by sprinkler systems of tire warehouses
and in the area of environmental impact of tire fires.
This series of tests completed between 2001 and 2006 in the
United States and in France, involved the main tire manufacturers,
supply chain specialists and a specialized parts manufacturer,
under the umbrella of SNCP (Syndicat National du Caoutchouc
et des Polymères).
This innovative program was conducted on significant quantities
of stored tires (2,000 to 4,000 tires per real life test), arranged
in actual storage conditions. Some 21 preliminary tests and
12 real life tests were conducted with a variety of tire storage
configurations. The tests enabled a benchmarking of different
types of sprinklers and to assess the efficiency of wetting agents
in conjunction with fire-fighting water.
The findings of these tests have led to improvements in
fire protection for existing warehouses and to measure the
effectiveness of new technologies for future infrastructures,
while safely optimizing their operations. They also produced
further information on the environmental impact of such fires
based on analysis of smoke components, fire fighting water and
atmospheric dispersion.
● A robust approach to fire risk control: Michelin developed
its own standards of major industrial and fire risk control: the
High Protected Risk Michelin (HPRM) standard.
HPRM is based on three mainstays:
- prevention (an array of hazard prevention measures),
- protection (automatic protection devices and passive measures
to segregate risks in order to minimize consequences in the event
of serious damage),
- intervention (early detection, fast-reaction personnel and
equipment).
The Group-level risk control expert team is supported by a
network of site-based operational counterparts who ensure
gradual implementation of Group standards in all facilities. The
condition of, and measures taken by, sites are reviewed against
HPRM standards. The progress targets that are identified are
prioritized as part of multi-annual progress plans drawn up by all
industrial and logistics sites.
Moreover, new projects (construction, revamping, expansion,
introduction of new manufacturing processes and so on), are
subject to prior approval by Environment and Prevention experts
who ensure compliance with HPRM standards.
The Group’s global internal control approach is based on
a proprietary tool (EC-HPRM, High Protected Risk Michelin
Compliance Assessment) developed and deployed at central
level. This application serves to assess site conformity to internal
standards. It entered into mainstream application on January 1,
2008.
● Leveraging test experimentation and exchanging best
practices: further to the success obtained through use of the
Michelin “SECURISTAT” data collection and processing software
for events in connection with industrial hazards deployed since
2004, the Group-level fire prevention department developed a
system to build on the experience obtained internally and from
third parties: events are analyzed and the conclusions drawn from
them are shared across the Group to drive further progress.
“SEVESO“ CLASSIFICATION
The “Seveso III” European directive aims to prevent major chemical
hazards at industrial sites and to limit their consequences for man
and the environment. It induces site classification with reference
to the volume of site hazardous substance inventory. The level
of regulatory disclosure requirements and prevention measures is
based on this classification. At the end of 2008, out of more than
40 Michelin European sites, 2 were classified “high-level” and
8 “low-level” risk sites.
Risk Transfer to Insurance Companies
In addition to a proactive protection and prevention policy,
the Group’s insurance strategy is based on the following three
principles:
1. Risk Assessment
A Group’s risk map, based on a method shared by all entities, is
used to assess the level of coverage required.
2. Transfer of High-Intensity Risk
Michelin has set up integrated global insurance programs, within
the limits of the insurance and reinsurance markets, to cover
high-intensity risks. These address mainly “Property Damages”
and “Casualty”.
PROPERTY DAMAGE
A EUR 500 million limit insurance program has been subscribed.
To ensure continued operations under the best financial terms in
case of loss, this insurance scheme includes a EUR 50 million ICW
(Increased Cost of Work) extension.
CASUALTY
This program includes three key aspects:
● Product Liability,
● General Liability insurance which is subscribed in FOS (Freedom
of Services) in European Union countries and provides umbrella
coverage in excess of local contracts, for all other countries,
● Environmental Impairment Liability coverage for all Group
companies.
Legal Fees/Defense Costs and Product Recall Expenses are
excluded from these coverages.
Other insurance programs cover lower-level risk.
3. Group captive insurance companies
The Group fully owns several “captive” insurance companies
whose role is to cover medium-level risk. This internal mutualisation
aims to reduce Group insurance costs.
Captive companies, with limits commensurate with their
resources, mainly handle:
Other Information
Additional Information Consolidated Financial Statements The Managing Partners’ Report Michelin at a Glance
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