Hydro Annual Report 2011b

60
vIABIlItY perForMAnCe
Community impact
Maintain and enhance cooperation
“Work will continue on several levels. We must maintain the
contact that has been established. We want to arrange for the
Brazilian employee representatives to visit Norway and familiarize
themselves with how we work and cooperate here, both centrally
and locally at the plants. I believe that maintaining good contact
will be beneficial for everyone. In addition, we have discussions
ongoing between Norwegian trade unions in the industrial and
energy sectors about getting involved in one or more of the social
projects that will be initiated in Brazil. This is completely in line with
our fundamental approach to solidarity.”
Sten Roar Martinsen,
Employee-elected member of Hydro’s board of directors,
representing the Norwegian Confederation of Trade Unions (LO)
Read full interview at www.hydro.com/reporting2011
following difficult market situations, Hydro Building Systems
has had demanning processes in Portugal, Spain, Italy and
Austria during 2011. In total, 237 employees were directly
affected. In January 2012, Hydro announced that it is reducing
its extrusion capacity in Portugal.
following a consultation process with the local employees,
Hydro announced in January 2012 that one of its three production
lines in the Kurri Kurri aluminium plant in Australia will be
closed down. The closure will make redundant 150 employees,
of which 140 have volunteered to accept a severance package.
At our primary metal plant in Neuss, Germany, production
capacity was temporarily reduced in 2009 from 235,000 metric
tons to 50,000 mt, affecting 700 employees who have different
levels of reduced working hours. Mothballing the plant’s primary
production is still undecided, while casthouse production
continues. The plant was transferred to our Rolled Products
business early in 2012 to link it closer to Hydro’s other activities
in the vicinity (Grevenbroich and part-owned Alunorf).
Half of the production at part-owned Søral in Husnes, Norway,
has been temporarily stopped since 2009. To minimize
the number of temporarily laid-off employees, some employees
have been utilized as holiday relief and in investment projects.
By the end of 2011, Søral had 10 employees on reduced
working hours.
The oldest production line in Sunndal, Norway, was temporarily
closed in May 2009. Upon request from the main local
union and in agreement with the local Labor and Welfare
Organization (NAv), it was decided to introduce a system of
rolling temporary layoffs to minimize the strain on each individual.
Instead of temporarily laying off 160 employees for a
longer period, all employees in the affected organization are
A challenging decision
The decision to close the extrusion plant at Karmøy was based on
an actual situation of overcapacity in Hydro’s production in Norway,
implying the need to close one of the three extrusion plants – at
Karmøy, Raufoss and Magnor. There was also general consent
within the involved unions about the need to reduce fixed costs by
closing down a press. Due to Magnor’s proximity to the Swedish
market and a generally lower fixed-cost level, the main alternatives
were closing down the extrusion plant at Karmøy or the large press
at Raufoss. There was also a general agreement that the cost level at
Karmøy was higher than at Raufoss, but the main union at Karmøy
(Industri Energi) argued that Karmøy had a higher competence level
and the possibility of matching the cost level at Raufoss. After the
formal decision had been taken to close Karmøy, Hydro agreed to
pay for an independent report ordered by the two unions to verify
the decision. The report did not bring any new essential findings to
the issues that were highlighted, and the process continued based
on the original conclusions. Following the report, the decision was
accepted by the parties. The close to 100 involved employees at
Karmøy have been offered different means, including severance
packages and priority for new positions at Raufoss.
included in a scheme of five-week layoffs. An annual capacity
of 15,000 mt was restarted in June 2011. A planned further
ramp-up has been postponed until further notice.
All manning reductions have been communicated in advance
to union or employee representatives and have followed the
layoff requirements specified in relevant collective bargaining
agreements and legislation. All layoffs have been handled fairly,
objectively and in a manner that reduces the risk of discrimination
as it pertains to age, gender, race and veteran status,
while preserving the competence needed. Different means
have been used to reduce the impact on employees and the
local communities concerned.
Several of our primary aluminium plants have expiring power
contracts, which may result in operational adjustments in the
coming years.
Hydro’s share in the minority-owned alumina refinery Alpart,
in Jamaica, was divested to Rusal in September 2011. The
operations have been temporarily closed since June 2009.
New projects
When planning new projects, we map the environmental and
social impact. Our analyses follow the Equator Principles, and
thus reflect the requirements of the World Bank and the International
finance Corporation regarding information, consultation
and investigation of the project’s environmental and social
impact, including human rights, as well as an action plan and
proposed initiatives. Dialog with affected groups gives input to
plans, detailing our environmental and social responsibilities.
We strive to act in an open and credible manner, and gather
views from interested parties, aiming for a common understanding
of the decisions that are made.