HEALTH, SAFETY, ENVIRONMENTAND QUALITY REPORT2004
1. COMPANY PROFILEInformation on the CompanyName:ČESKÁ RAFINÉRSKÁ, a.s.Registered office: Litvínov, Záluží 2, Postal Code 436 70, Czech RepublicRegistered No. (IČO): 62741772Incorporated in the Companies Register maintained by the regional Court in Ústí nad Labem, Section B, File 696Share capital: CZK 9 348 240 000Securities issued: 934 824 ordinary registered shares: the total amount of the issueis CZK 9 348 240 000.HEALTH, SAFETY, ENVIRONMENT AND QUALITY REPORT 4Česká rafinérská is a production company operating in the field of crude oil processing and running refineriesin Kralupy nad Vltavou and Litvínov. Its primary products include automotive gasoline, diesel fuel, aircraft fuels,heating oils, asphalts, feedstock for the petrochemical and chemical industries, materials for lubricating oil production,and materials for other industrial use. The Company products hold a dominant position in the CzechRepublic's market in terms of motor fuels and certain specialist products. A portion of its output is exported,some of it to EU countries.Since August 1, 2003 the Company operates as processing refinery, i. e. it processes the crude oil purchasedand supplied by its owners local affiliates. They sell the whole range of its products on the domestic or exportmarkets.With its turnover of CZK 8,9 billion, the Company reported a net profit of CZK 18 million. The Company exhibiteda continuously stable financial situation in the past year.Financial results and capital expenditures (CZK billion) 2004Turnover 8,9Profit after tax 0,018Total Capital Expenditure 0,928HSE Capital Expenditure 0,810
The 2004 HighlightsJanuary – start up of performance improvement project BIC IIMarch – planned shut down of Litvinov refineryApril – new mission and vision issued, new organization structure– planned shut down of Kralupy refineryMay – one million workhours without Lost Workday Case (LWC)June – start of construction of new 3-cut-splitter unit in Kralupy– start up of reconstructed gasoil hydrogenation unit in KralupyJuly – recertification according to ISO ČSN 9001and ISO ČSN 14001August – start up of the reconstructed gasoil hydrogenation unit in LitvinovSeptember – Responsible Care Award successful defenceOctober – entire volume of motor fuels produced had the quality standard required since 1 January 2005HEALTH, SAFETY, ENVIRONMENT AND QUALITY REPORT 5
People will always draw from the nature – from its sources and from its beauty
3. INTRODUCTORY WORDS BY THE CHAIRMAN OF THE BOARDI have the honor of presenting you with this report from Česká rafinérská on health, safety, quality, and environmentalimpact (the HSEQ Report) for 2004.2004 was the first year in which Česká rafinérská operated fully in the so-called “processing” mode, or as a costcenter for its owners, who supply the company with crude oil and other raw materials and lift and trade its products.Over the course of the year we fully adapted to the requirements of the new operational mode, althoughwe did have to resolve a number of issues that resulted from the previous mode of operation. This has beena successful year - we completed the company's reorganization and we began a series of projects that shouldprovide us with immediate, but also mid- and long-term, benefits.In 2004 we performed extensive planned repairs at both refinery plants, the so-called scheduled shut-downs.The scheduled shut-down in Kralupy was a regular stoppage while in Litvínov it was related to the “Clean Fuels2005” project. This investment project began in 2002 and within its framework we have modernized andupgraded units refining gas oil via hydrotreating unit, we have increased their capacity at both refinery plants,and we have reconstructed high-pressure chambers at the Litvínov refinery. At the Kralupy refinery, we completedthe construction of a gasoline separation unit which separates cracked gasoline into narrower fractions,thus enabling their efficient desulphurization. The total cost of this program was over one billion crowns. Wefurther paid attention to the modernization of the Claus sulphur recovery unit and modernization of rail loadingfacilities no. 70/72 at the Litvínov refinery plant. At the Kralupy refinery plant, we modernized among othersthe wastewater treatment system, flare system, and reformer compressor.This HSEQ Report describes in detail the areas of safety and health protection that belong to the traditionallysuccessful areas at Česká rafinérská. Although our results in 2004 did not achieve the projected target values -particularly as regards the personnel injury rate - Česká rafinérská still belongs to the top industrial companieson the European scale. Also, our results in the area of environmental protection show a constantly positive trendas regards both the implementation of environmental protection systems and the fact that in the past year wedid not register any accident with a significant impact on the environment in the surroundings of our two refineryplants. This is definitely a positive message to our neighbours.Our successful recertification according to ISO ČSN 9001 and ISO ČSN 14001 can also be considered worthy ofappreciation. The recertification was performed by Lloyd's Register Quality Assurance and demonstrates thegreat amount of effort we put into the quality assurance system and the environmental protection systems. Thesuccessful recertification was completed by defending our right to use the “Responsible Care” award and bywinning the title “Safe Company.”I believe, you will find interesting information about Česká rafinérská and its activities in the area of HSEQ describein this report and Česká rafinérská will remain a trusted partner considerate towards the environment aswell as to the public.HEALTH, SAFETY, ENVIRONMENT AND QUALITY REPORT 9Ivan SoučekChairman of the board and Chief executive officer
The specific structure of natural elements is the eternal inspiration for inventors
Quality Assurance PolicyČeská rafinérská considers the quality of its products and services and customer satisfaction as its principal objectiveand will pursue its business activities in accordance therewith.The quality of its activities shall be kept up at the required standard through observance of the followingprinciples:HEALTH, SAFETY, ENVIRONMENT AND QUALITY REPORT 121. High quality of products and services to be maintained.2. Product specifications to be adjusted so as to meet customers_ requirements.3. Staff awareness of training/education as a way of quality assurance to be enhanced.4. Technological changes beneficial to quality assurance requirements to be assessed and cherry-picked.5. Required quality standards to be ensured on the part of company vendors & contractors.6. Current legislation to be adhered to.7. Open communication to be maintained with relevant target groups.8. Cyclical improvements in so-called discrepancies/variances to be used as a tool for continuous improvementof the Quality Management System.9. The company reputes to be built through a transparent Quality Management System.Meeting the Quality Assurance Policy principles is the responsibility of all staff of Česká rafinérská.
Safety and Health PolicyWork safety and health protection constitute an integral part of business activities pursued by Česká rafinérská.Česká rafinérská's facilities will be run in a way protecting the health and safety of its staff, contractors, othercompanies, as well as of citizens resident in the region.Relevant legislation and regulations will be adhered to, and observance thereof will be enforced from both theČeská rafinérská's staff and other parties concerned - consistent with ongoing drive for improvements in Českárafinérská's results in the area of work safety and health protection.The suitability and reasonability of Česká rafinérská's policy will be subjected to regular scrutiny.Principles to be abided:• Ongoing improvement of Česká rafinérská's activities and outcomes.• Permanent attentiveness of the management.• Line responsibility.• Coping with public authorities upon development of new standards and regulations.• Use of best practices and effective cost utilization.• Maintaining communication in and outside Česká rafinérská.• Maintaining high housekeeping standards.• Philosophy of Management System: – responsibilities specified,– set intents and objectives,– performance effectively measured and monitored,– ensuring that audits & reviews are duly carried out,– provision of staff training,– assessment of risks associated with company activities.• Zero accident situation being the goal.• Safe work – the condition for employment relationship.• Incident emergency systems maintenance and testing.• All incidents, injuries and near misses are to be investigated and lessons (are) to be learnt.• Open communication in case of all incidents.• Off-the-job safety, safety requirements.• Assurance of medical condition of staff on the job; provision of healthy working environment.• Familiarization of all staff and contractors with safe work rules.The top management undertakes to enforce Safety and Health Protection policy and - in collaboration with thestaff – to embrace it.February 2nd 2004HEALTH, SAFETY, ENVIRONMENT AND QUALITY REPORT 13Ing. Ivan Souček v. r.Board of Directors Chairman and CEO
Environmental protection, quality, and safety management system (TMS)All three systems are part of the integrated control system, which is denoted by the acronym TMS. The systemsare preset according to the ISO 9001:2000 and ISO 14 001:1996 standards and the “Safe Company” program.In 2004 Česká rafinérská successfully passed a recertification audit. Auditors from Lloyd's Register Quality Assurancestated that systems have been implemented according to the ISO standards and that processes for constantimprovement are in place. The system is monitored and measured using key indicators that we present tothe employees in the form of a score card. In 2004 the company complied with the indicators up to 88% (in2003 up to 77%).Česká rafinérská has implemented process control and one of its processes is the HSEQ process (this includeswork safety, protection of health and the environment, and quality management). The entire process is monitoredby the company management and the results in the score card are evaluated quarterly. The score card includesindicators in the area of environmental protection, work safety, integrity of the facility, health protection,and quality. It is included in the attachment.HEALTH, SAFETY, ENVIRONMENT AND QUALITY REPORT 14Audits are an integral part of the HSEQ process monitoring. The entire process can be divided into two parts:inspection of system requirements arising from standards and their implementation in the processes.The knowledge of the internal auditors is constantly perfected via regular training and their work is evaluatedon the basis of a preset motivational program.AuditNumber of audits/2004Internal TMS audits 5External TMS audits 2Extraordinary TMS audits 4Prequalification audits of the contractors 23Housekeeping audits 26Work permit audits 12
HSEQ Score Card - 2004 (Health, Safety, Environment, Quality) 2004No Item Result 2003 Target Below Above Actual Trend Score(2002) (100%) (0%) (120%) 2004 2004 %BEZPEČNOSTSAFETY22.214.171.124.5.TRIR 1.4 (0.9) 1.2 1.6 1.0 1.8 1.8 0Safe/at-risk Observations 99.7 (99.4) 99.3 99.0 99.6 99.8 99.8 120(%)Fires & Explosions 9 (4) 5 8 3 5 5 (number)Car accidents 13 (16) 12 16 10 12 12 (number)High Potential Incidents 1 (1) 2 5 1 0.5 0.5 (%)INTEGRITAŽIVOTNÍPROSTŘEDÍZDRAVÍJAKOSTQUALITY HEALTH ENVIRONMENT INTEGRITY126.96.36.199.188.8.131.52.184.108.40.206.220.127.116.11.2.MTBF ofmech. seals of Rot Equipment 57.7 (49.2) 51 46 56 71.9 71.9 120(meamtime between failures)Lost of containment 2.6 (3.8) 2.2 2.3 1.9 2.2 2.2 100(avg number/m)Fail to danger RV/IPF 1.3 (1.8) 2.0 2.2 1.8 1.4 1.4 120(%)Backlog of Inspection work 61.2 (27) 10 11 9 7.8 7.8 120(%)Clauss efficiency – Kralupy – 98.4 98.0 98.6 99.1 99.1 120(%)Clauss efficiency – Litvínov – 98.6 98.2 98.8 98.0 98.0 0(%)H 2S flaring 257 (355) 220 270 170 282 282 (t/a)HC flaring 4727(3839) 4312 5012 3912 3825 3825 (t/a)Leaks > 200 litres 3 (5) 5 6 3 3 4 (number)Waste water 2774 (2677) 2420 2550 2300 2615 2615 (1 000 m 3 /a )Waste production * 2003 (1563) 1500 1700 1300 2011 2011 (t/a)Non-conformance ISO 14001 0 (2) 2 3 1 1 1 (number/p.a.)Absence 1.6 (1.3) 1.8 2.2 1.4 1.3 1.3 120(%)New Occ. Health cases 0 (0) 0 1 0 0 0 (number)Compliance with Health policy ** 99.7 (99.4) 99.4 99 99.6 99.8 99.8 120(%)Non-conformance ISO 9001 0 (2) 2 3 1 0 0 (number/p.a.)Quality assurance targets 3 (11) 10 15 8 10 10 (overdue TMS audit action items)Overall rating 2004 88.6 %HEALTH, SAFETY, ENVIRONMENT AND QUALITY REPORT 15* Only Operational waste** Compliance of safety observations for: eye and ear protection, wearing gloves and dust masks, body-positioning[ ] proceed from trend
Atmosphere is the breath of nature
5. ENVIRONMENTAL PROTECTIONAIR QUALITY PROTECTIONThe Litvínov refinery plant operates 28 technological air pollution sources. Eleven of these belong to the “especiallylarge” category; the rest - the individual tankfarms and facilities for loading and discharging both roadand railroad tankers – are “large.”Eight especially large sources include a total of 22 sources with a different technology. Sixteen of these are combustionfacilities (one especially large, the rest large or medium), the rest are facilities for storing liquid sulfurand liquefied petroleum gases and for loading these gases into railroad or road tankers.The “especially large source” category at the Kralupy refinery includes both left and right flue-gas ducts in thecompact block and the sulfur-production line for the Claus process, where off gas is exhausted into the rightflue-gas duct. Large sources include both furnaces as well as the FCC unit regenerator, the re-boiling furnace inthe new unit separating gasoline from the FCC, and the vapor recovery unit (VRU) for hydrocarbon gases andvapors. Medium sources include the boiler room in the liquefied petroleum gas (LPG) store and the wastewatertreatment plant. The list of irregular emergency sources also includes a flare for burning gases from the technologicalfacilities within the refinery plant.Emission limits and other operating requirements for both the Litvínov and Kralupy refinery plants are stipulatedby the integrated permit issued for all the facilities within the entire refinery plant.The following tables show emissions for the year 2004 from both refinery plants owned by the company andtheir development over the past 5 years.Kralupy rafinery plant(t/year)Year SO2 NOx CO Dust VOC Total2000 648.4 101.5 23.5 34.4 48.6 856.42001 1007.9 215.9 62.8 46.2 57.5 1390.32002 968.2 204.5 86.6 41.4 52.1 1352.82003 1208.8 155.2 87.5 27.7 48.3 1527.52004 623.2 115.1 83.6 24.6 50.7 897.2Litvínov rafinery plant(t/year)Year SO2 NOx CO Dust VOC Total2000 1589.5 389.7 86.0 22.5 112.8 2200.52001 3072.0 799.4 135.1 34.8 52.3 4093.62002 2054.6 522.3 110.5 20.0 57.6 2765.02003 2334.0 374.3 153.8 18.2 46.5 2926.82004 1907.0 402.9 102.6 4.4 42.8 2459.7Combustion processesWith the exception of volatile organic compounds, the emissions shown in the tables are released from combustionprocesses, i.e. from processing furnaces and emergency flares. In addition to the hydrogen sulfide emissionsspecified below, the combustion processes at both refinery plants also include emissions from sulfur productionfrom the Claus process, since these are emissions from their incinerators, which are, in principles also furnaces.HEALTH, SAFETY, ENVIRONMENT AND QUALITY REPORT 17Point emission sources of volatile organic compounds (VOC)Point emission sources of volatile organic compounds (in refineries, these are gases and vapors of non-methanehydrocarbons) mainly include storage pools, less frequently combustion processes and other sources. Other
sources are devices for loading road and rail loading facilities, particularly when loading kerosene and diesel oilwithout pumping out vapors into the recovery unit.The table below shows that the total volume of volatile organic compounds emitted from point sources in therefinery plants is low and that it has reached the technical limits of the facilities.Kralupy (t/year)Litvínov (t/year)Pools Combustion Other Total Pools Combustion Other Total2000 40.0 6.3 2.3 48.6 100.6 7.3 4.9 112.82001 31.8 19.7 5.9 57.4 40.6 6.5 5.2 52.32002 42.2 4.7 5.2 52.1 46.5 6.2 4.9 57.62003 40.1 1.3 6.5 47.9 40.1 3.9 2.6 46.62004 43.1 1.0 6.6 50.7 36.8 3.7 2.3 42.8SulfideSome gases released during crude-oil and intermediate-product refining processes contain poisonous sulfide gas(hydrogen sulfide). Sulfide is separated by elution and is subsequently processed via the Claus process to yieldliquid sulfur. The residual gas released in the Claus process then proceeds through the incinerator furnace, whichcombusts sulfide residues so that the concentration in the flue gases released into the air does not exceed10 mg/m 3 . The table below shows the yearly amount of sulfide emitted from both the Kralupy and Litvínov refineryplants.HEALTH, SAFETY, ENVIRONMENT AND QUALITY REPORT 18(t/year)Year Kralupy Litvínov Total2000 0.023 0.435 0.4582001 0.081 0.480 0.5612002 0.035 0.761 0.7962003 0.087 0.750 0.8372004 0.053 0.208 0.261The average concentration of sulfide in the flue gas from incinerators at both the Litvínov and Kralupy refineryplants was in the lower half of the allowable concentration range - around one quarter of the emission limit.Certain modifications to the sulfide processing facilities at the Litvínov refinery plant were implemented in summer2004 with the aim of increasing the sulfur recovery ratio / decreasing sulfur dioxide emissions. The operatingresults show that the goal was achieved.Fugitive emissionsThe LDAR program, which is based on locating leakages within the individual components of the refinery plantdevices (fittings, compensations, wadding, flanges, etc.), has been applied for twelve years at the Litvínov refineryplant and since 1998 at the Kralupy refinery plant.At the Litvínov plant, we focused particularly on units processing refinery gases (LPG) except for desulphurizationunits, on LPG gas storage, isomerization units, new hydrocracker, and CCR reforming; further measurementswere made at the Jiřetín tank site, AVD, and the road loading terminal. New facility constructed as partof the “Clean Fuels” project has been measured, too.The year 2004 included a scheduled shut-down for the Kralupy refinery plant. Most components in block 25(the production block of the original refinery plant) were measured, and further measurements were taken atthe gasoline storage and blending, at the MTBE production and storage division, at the fluid catalytic cracking(FCC) unit as well as at the isomerization unit.A total of approx. 32,300 components were measured at the Kralupy refinery plant; the number of measuredcomponents at the Litvínov refinery plant was more than 35,000.
Carbon dioxide emissionsAs part of the Responsible Care program, adopted in 1999, the company began to monitor and publicize theamount of carbon dioxide released into the air. (The company was granted the right to use the program logoin 2000, again in 2002, and finally in 2004.) The volume of emissions was reported using the methodology specifiedby the CEFIC guideline, which was adopted by the Union of the Chemical Industry of the Czech Republic,which manages the national Responsible Care program (the Responsible Care handbook). Carbon dioxideemissions from both refinery plants owned by the company - calculated using the CEFIC methodology and includingemissions from the production of the purchased electrical energy - are given in the following table forthe past 5 years.(10 3 t/year)Year Kralupy Litvínov2000 159.1 645.72001 426.3 582.72002 405.4 678.32003 420.3 503.12004 389.6 591.6In December 2004 new legislation was passed: Act No. 695/2004, on the conditions of trading greenhouse gasemissions permits and amending certain acts, and Regulation No. 696/2004, which is the implementing regulationof the Act. This legal regulation is a tool for regulating and reducing emissions of greenhouse gases, includingcarbon dioxide. The Act defines those facilities releasing greenhouse gases that are subject to the Actand that can only be operated based on a license issued by the Ministry of the Environment. Our refinery plantsbelong to such facilities and thus, in accordance with the Act, they have applied for the license.The said regulation defines the procedure for determining and reporting greenhouse gas emissions, includingmethods for verifying their volume.HEALTH, SAFETY, ENVIRONMENT AND QUALITY REPORT 19
All living creatures contain it and all living creatures desire it
WATER PROTECTIONBoth of the company's refinery plants are using water from neighboring companies - the Kralupy refinery plantis supplied water by Kaučuk, a.s. and the Litvínov refinery plant receives water from Chemopetrol, a.s., whichalso collects and processes its wastewater. The Kralupy refinery plant has its own wastewater treatment facility,which also processes water pumped from wells serving as hydro-geological protection of groundwater. Thewells, which are part of secondary groundwater protection, were built as part of the refinery's construction.The following table lists the volume of wastewater as well as its volume per one thousand tonnes of processedcrude oil. The increase in the Kralupy refinery plant in 2001 is due to the start-up of the fluid catalytic cracking(FCC) unit operation.KralupyLitvínovWastewater Specifically per unit Wastewater Specifically per unitof crude oilper unit of crude oilYear (10 3 m 3 /year) (m 3 /1 kt of crude oil) (10 3 m 3 /year) (m 3 /1 kt of crude oil)2000 376,3 219,7 1961,6 568,42001 698,0 317,6 2066,0 641,42002 612,2 288,9 2064,7 593,02003 550,7 254,8 2222,7 587,12004 557,2 256,3 2054,4 533,2The volume of groundwater from the hydro-geological protection wells for the past 5 years is given in the followingtable.Year10 3 m 3 /year2000 1230,92001 878,12002 1090,02003 1034,22004 925,1Some minor changes were implemented in the water-protection section directed towards a decrease in the volumeof wastewater. Due to a detected drainage leak within the area around the TRF tank at the Litvínov refineryplant, the original ceramic drainage system was replaced by a new one made of fiberglass without sealedjoints.HEALTH, SAFETY, ENVIRONMENT AND QUALITY REPORT 21
Nature doesn't put aside a thing; everything is used million times again
For everything new we create we can already find perfect examples in the nature
ENVIRONMENTALLY FRIENDLY PRODUCTSThe permanently high quality of all products of Česká rafinérská is one of the main priorities of the company.From this perspective, the year 2004 was particularly important since investment activities related to the “CleanFuel” project were completed. The implementation of these investments enables us to produce motor fuels withquality that fully complies with strict environmental requirements of the EU Directive 98/70/EC as amended byDirective 2003/17/EC. According to this directive, as of January 1, 2005 only motor fuels containing at most 50mg of sulfur per kg may be supplied to the market. Additionally, sulfur-free motor fuels (containing at most 10mg of sulfur per kg) must be available on the market as well and the highest total admissible aromatic-hydrocarboncontent in automotive gasoline was decreased from the original 42% (V/V) to the current 35% (V/V).Česká rafinérská successfully coped with these tasks in advance and the entire produced volume of motor fuelshad the quality required for 2005 already starting from the last quarter of 2004. Simultaneously, part of theproduction also met customers' requirements for sulfur-free engine fuel supplies, i.e., motor fuels in the qualityobligatory for the entire produced volume starting in 2009. The company also paid considerable attention topreparations for future compliance with the requirements of EU Directive 2003/30/EC regarding support for theuse of biofuels based on renewable sources of energy as a partial substitute of standard fossil fuels. The shareof these biofuels on the motor fuels market should gradually increase and by 2010 should reach 5.75% of thetotal volume of motor fuels on the market in terms of energy content.To achieve the specified quality, certain modifications to gasoline processing facilities and, particularly, to thehydro-refining units processing the intermediate petroleum distillates were implemented at both refinery plants.These had already been carried out on the Litvínov hydrogenation chambers no. 5 and 6 in 2003; the hydrogenationrefining units for processing gas oil were modified at Kralupy and Litvínov in 2004. These modificationsconcerned in particular the feeding furnace, the entire reaction system including the larger reactor that wasfilled with another catalyst, and the low-pressure section and hydrogen-sulfide removal unit.HEALTH, SAFETY, ENVIRONMENT AND QUALITY REPORT 25
The art of perception lies in the art of paying attention and observation
MONITORING OF ENVIRONMENTAL IMPACTAirEmissions from combustion sources as well as other stationary sources (storage vessels and tanks, loading devicesfor railroad and road tankers, sulfur production from the Claus process) are detected through measurements.At the Litvínov refinery, pollutant concentrations are determined by constant measuring of flue gases from thesulfur-production incinerator; at other sources, they are determined via authorized one-off measurements.The Kralupy refinery takes continuous measurements in both flue-gas ducts of the original refinery block (crudeoil distillation, hydrogenation refining, reforming, refinery gas processing, and sulfur production) and in the outletfrom the sulfur-production unit incinerator; concentrations of sulfur dioxide and carbon monoxide are alsocontinuously measured in the flue gases form the FCC unit's catalyst regenerator. Emissions from other sourcesare measured via authorized one-off measurements.At both of the company's refinery plants, the volume of pollutants from flare stacks is determined via mass balance.One-off, technical measurements are performed in particular for the fine-tuning operation of the processingequipment or to determine the efficiency of emission reduction devices.Leakages from non-point sources belonging to the fugitive emission category (i.e. pollutant release from potentialleaks in the processing machinery, pipelines, pumps, compressors, and accessories), are determinedthrough the LDAR program, described in the section on air protection. The program has been in force at the Litvínovrefinery since 1993 (even before the establishment of Česká rafinérská) and at the Kralupy refinery since1998.We have restored data transmission from the air pollution imission monitoring station, built in the municipalityof Veltrusy and upgraded as part of the construction of the FCC unit.WaterAdministrative proceedings concerning wastewater from the Kralupy refinery were concluded in 2004 and theplant was issued a new license to handle wastewater and a license to release wastewater (subsequently includedin the integrated license).Compliance with the specified pollution limits for the released wastewater is ensured by analysis of collectedsamples. Both the sampling and analyses are performed by an authorized organisation.To effectively control the operation of the wastewater treatment plant, we use the results of internal water-qualitymonitoring based on point samples collected from both the input and output points of the wastewater treatmentplant and from outlet water after mixing it with water pumped from hydrology protection drums, whichis performed by the plant laboratory.The volume of released wastewater is constantly measured and the flow rate is compared to a fixed limit.HEALTH, SAFETY, ENVIRONMENT AND QUALITY REPORT 27
Nature creates only perfect things; let this be an inspiration for us
6. QUALITY MANAGEMENTQuality control is part of the integrated management system - TMS. The entire management system is discussedin the introductory chapter.The quality control system was preset according to the ISO 9001:2000 standard. The functionality of the systemwas confirmed by the Lloyd's Register Quality Assurance certification organization in June 2004 after Česká rafinérskásuccessfully passed a re-certification audit and the validity of its certificate was extended.In 2004, Česká rafinérská announced a new “Mission and Vision” and the company is now trying to accomplishthese goals particularly in relation to its customers. In its activities, the company conforms to the principlesdeclared by the Quality Control Policy. As in the preceding years, in 2004 the basis of our work is a focus onthe customer, both external and internal. Customer satisfaction is regularly evaluated using questionnaires. Theresults are as follows:Internal customer satisfaction monitoringPerformed on the level of the individual company divisions that reciprocally evaluate the condition and potentialimprovement of internal communication.The first step was a preparation of an electronic questionnaire comprising several sections (introductory section,section common to all divisions, special sections for the individual divisions/sections). The respondents were senta letter asking them to fill in the questionnaire, which was stored on the Intranet. Anonymity of the responseswas assured. It was also possible to add personal comments or suggestions. Completed questionnaires wereprocessed and the overall results are available to directors and managers. In 2005 we will hold inter-divisionalworkshops with the goal of producing further improvement plans. The management of the company will be informedabout the results of the individual measures.Output:Total number addressed: 94 respondentsTotal number of responses: 54 respondents (57% return)External customer satisfaction monitoringThe third consecutive survey of external customer satisfaction in Česká rafinérská - for the first time under thenew processing conditions - took place in May and June 2004. The survey newly concentrated on our externalcustomers - processors (4 trading companies of the shareholders). The questionnaire and cover letter were sentout electronically (this saves time and makes it easy to fill out; emphasis was placed on covering the main commonareas of communication). This was preceded by a preparatory phase of consultations with the processors;communication of Česká rafinérská with the processors was mapped and the contacted persons representingthe individual processors and areas of communication were selected on this basis. A total of 31 selected representativesof 4 processors were addressed (the selection was carried out according to the communication matrixof Česká rafinérská with the processors within the framework of the processing).Output:Total number sent out: 31 questionnairesTotal number returned: 12 questionnairesAchieved return:39% (we achieved 50-55% with our business partners)Established satisfaction level: 60.3% (we achieved 78-83% with our business partners)HEALTH, SAFETY, ENVIRONMENT AND QUALITY REPORT 29
The summary of all comments, ideas, and suggestions was processed into the form of provision proposals aimedat increasing customer/processor satisfaction with a subsequent evaluation of their implementation and efficiency;this applies to the following areas:• New organizational structure of Česká rafinérská and processing• Processor communication/awareness• Familiarity with processing rules• Activities and initiatives of Česká rafinérskáImprovement projectsHEALTH, SAFETY, ENVIRONMENT AND QUALITY REPORT 30The “Best in Class II” (BIC II) project - there are currently a total of ten projects open under the BIC II heading.Their basic scope of activities covers almost all areas of Česká rafinérská. Although the BIC project wasoriginally a technical division project, it is clear that BIC II will not do without support from other divisions.The management of the individual projects within the framework of BIC II has been directed toward mid-levelcompany management (department heads, senior engineers, and senior technicians). The individual project teamsthen include representatives of all involved professions; in well-founded cases, it is also necessary to cooperatewith our key suppliers.The main goal of the BIC II project is to bring Česká rafinérská among the best quarter of refinery plants in WesternEurope according to the evaluation by the Solomon study. The entire project focuses on changes in the maintenance,investment, and purchasing processes.The “Alignment I” project is a plan focusing on defining, monitoring, and measuring company processes afterAugust 1, 2003 (transition of the company to the reprocessing refinery mode) and at producing the applicabledocumentation of the individual processes as specified in the Process map.Monitoring and measuring of the processes using preset key indicators is also an important part of the qualitycontrol system.
Nature has the only goal: never stop
To risk is good but only when it is a matter of saving a life
7. SAFETY AND HEALTH PROTECTIONIn the field of safety and health protection, Česká rafinérská complies with the principles of the TMS policy specifiedin Chapter 4 of this report. Safety and health protection are integral parts of the company's activities. Allfacilities are operated in such a way as to protect the health and safety of its employees, contractors, and othercompanies as well as citizens in the region. The company tries to apply a proactive approach to safety based onthe prevention of accidents by identifying potential risks and, should an extraordinary situation occur, by learningfrom it analyzing its causes. Emphasis is put on investigating each extraordinary event, with the potentialrisk evaluated using the Risk matrix (see page 36).Česká rafinérská has established a Central Safety and Environmental Team (CSET). This team is headed by the technicaldirector and includes representatives from the individual company processes. The team discusses extraordinaryevents, suggestions by employees, and legislative requirements. Every month it declares an “Issue of theMonth.” Employees are thus regularly informed about risks in the area of safety and protection of health and theenvironment. Employees and contractors meet regularly in safety sub-teams led by their managers. The aim is toincrease the awareness of our employees in this area. The issues they work on are prepared exactly by the CSET.The safety level is constantly monitored using preset indicators partly in the area of consequence monitoringand also in the area of monitoring the efficiency of the safety system.Indicators in the area of consequences:Injury frequency 1.4Number of fires 5Number of leakages above 200 l 3Indicators from the area of monitoring the efficiency of the system:Percentage of measures following from extraordinary events and audits that are implemented within the deadline 85Motivation program:In 2004 we published a brochure by the motivation team with the following topics:Work with high-pressure waterRisk of electrical injuryWork at heightsThe brochure warned of risks connected with these activities, and also covered first-aid rules. Each topic wasconcluded with a contest. Anyone who took part and gave the right answer was rewarded with a small gift.The last contest had a record number of participants - 260 employees.In addition to the brochure, we also warned of the risks connected with personal safety outside of safety, to promotethis topic we were using cards and small presents given to every employee. For example, risks connected withsummer vacations and risks connected with winter vacations. The aim is to make all employees familiar with safetyand to achieve a situation in which everybody realizes that safety concerns everyone.You can learn more about the motivation program on page 35.An important milestone last year was the scheduled shut-down in the Kralupy refinery plant. As with previous scheduledshut-down, we placed great emphasis on preparation. We trained 1,600 contractors and performed dailyinspections in the area of safety and protection of health and the environment. Any offenses in this area were immediatelydiscussed in the safety subteams. This effort has paid off as is evidenced by the following numbers.HEALTH, SAFETY, ENVIRONMENT AND QUALITY REPORT 33Number of injuries1 (only required first aid)Number of fires 0Number of leakages 0
Complying with safety principlesThe set principles are constantly checked and include a positive motivation system. This means that the companytries to warn of mistakes and always explain them. To do this, it uses a safety monitoring methodology.This is a method of communicating with the monitored person when his or her working habits are discussed inrelation to safety and protection of health and the environment. Employees with safe working habits are rewardedwithin the framework of the motivational program (see page 35).Health careHealth care is one of the fundamental blocks of Česká rafinérská and is expressed trough a series of specific policiesand programs. In 2004 we continued with a system of periodic preventive employee health care. Employeesparticipate in a two-year cycle of periodic health checks performed by contractual doctors at both sites.This year, almost 60 administrative employees reported to the scheduled periodic health checks and more than200 employees working as operators passed professional health checks required by the law or ordered by thePublic Health Office. The company continued its effort to positively influence its employees' state of health withevents held as part of the Good Health Promotion Program. The main focus of this program in 2004 were the“PROBETA - tobacco-free environment” project and the anti-stress program.HEALTH, SAFETY, ENVIRONMENT AND QUALITY REPORT 34The basic purpose of the “PROBETA - tobacco-free environment” project was to concentrate on the problem ofsmoking as an important health risk, with the aim of reducing the number of smokers and improving the workingenvironment. To communicate all aspects of smoking - medical, social, and economic - we used the employeeperiodical newsletter Echo, information on the Intranet, posters, the participation of doctors and rolemodels and the experience of those who have already succeeded in quitting. The project also included a motivationalcontest for smokers and a survey that showed great interest of employees in this issue. Within the frameworkof the project, we also reviewed places where smoking is allowed and reduced them by 25%.The Anti-stress program continued with specialist courses led by psychologists. Participants were mostly employeesfrom the technical division - particularly operators, shift managers, and laboratory technicians. In 2004there were 3 courses attended by a total of 40 employees. Psychologists helped to provide management of theproduction sections at both sites with feedback on the results and further goals of the program.Within the framework of the Paleta system of employee benefits, almost 60% of employees took advantage ofsome of the offered sporting activities (swimming, squash, ice-skating, fitness center) and about 30% of employeestook advantage of other offers aimed at increasing good health (influenza vaccination, vitamins, massages).Employee educationIn 2004 a whole range of events took place within the framework of various educational programs for the company'semployees. Based on positive experience from the previous period, we implemented e-learning programsand training and testing of employees - particularly programs required by law. These training and testing sessionstake place in the form of e-learning and always include sets of test questions to verify the acquired knowledge.In the area of employee competency development, the company implemented e-learning courses in foreignlanguages, presentation skills, and MS Office applications.
In the area of training, we continued with legal seminars within the framework of boosting the employees' awarenessof legal issues; we organized a seminar on the European Union and the company also pursued the developmentof its employees' “soft skills”: presentation skills, time management, etc. Another important part oftraining and education are car-driving tests for all employees who drive company vehicles.In 2004 the Training Center of Česká rafinérská focused its efforts on developing the knowledge and competenceof operators and other plant workers. Scaffolding construction training, climbing instruction for the purposesof the scheduled shut down in Kralupy, and also instruction on the proper use of safety harnesses wasorganized for a group of technicians from the maintenance and work safety sections. One of the courses in thearea of HSEQ was “Extraordinary Events Investigation.” We also put considerable effort into the schooling ofcontractors according to our internal standards; in total, almost 2900 contractors have been trained.In the area of education, a total of 4 audits took place in 2004; these were:– Safety management audit within the framework of defending the “Safe Company” award– HSEQ audit by the shareholders– Re-certification audit– Inspection by the Czech Environmental Inspection (ČIŽP) in connection with the Act on Chemical SubstancesMotivation Scheme for 20041. Man-hours without LTI - employees + contractorsodd million – 1 000 000even million – 2 000 0002. Near-missesNear-miss reportingLottery3. Safety improvement suggestionsLow risk eliminationMedium risk eliminationHigh risk elimination4. Safe/at-risk observationsLottery – observed employee – KralupyLottery – observed employee – LitvínovLottery – observed contractor – KralupyLottery – observed contratcor – Litvínov5. Kilometres with no car accident - per driver categoriesCategories 1,2,3 + pool cars – for every 15 000 kmCategory 4 – every half a year with no car accidentGift for groupGiftFinancial bonusGiftGiftFinancial bonusFinancial bonusFinancial bonusGiftGiftGiftGiftGiftGift for each driverHEALTH, SAFETY, ENVIRONMENT AND QUALITY REPORT 356. MoTivation team is helping and advisingLeafletRisks linked to out of work activities
RISC ASSESSMENT MATRIX – ABNORMALITIESCONSEQUENCESRISING DEGREE OF PROBABILITYGRAVITYPEOPLEPROPERTYENVIRONMENTREPUTATIONA B C D ENeveroccuredin rafineriesOccuredin rafineriesOccuredin ourcompanyOccuredmany timesa yearin ourcompanyOccuredmany timesa yearin onespace0Withouttreat tohealth/consequencesfreeFreeof damageNo impactNodamage1Minor injury,slight impactSlightdamageSlightimpactMinordamage2SlightinjuryMediumdamageMediumimpactLimitedextentof mischiefHEALTH, SAFETY, ENVIRONMENT AND QUALITY REPORT 36345Seriousinjury(absence)Lastingconsequences1-3 fatalinjuriesHighernumberof fatalinjuriesLocalizeddamageHighdemageExtremelyhighdamageLokalizedimpactGreatimpactMassiveimpactConsiderableact ofmischiefNational“disgrace”InternationalimpactLow risk Medium risk High risk
The one who shouts „Attention“ is better than the one who waves his hand
Communication among people was always important
8. COMMUNICATIONS, RELATIONS WITH THE SURROUNDINGS,AND SOCIAL RESPONSIBILITYIn addition to explaining the transition to processing refinery mode, the communication activities in 2004 includedthe “Clean Fuels” investment project campaign aimed at achieving better environmental parameters ofthe products. In the Most and Litvínov regions, Česká rafinérská cooperates with the Most pro Krušnohoří (Mostfor Ore Mountains) Environmental Center, which collects all available data on the environment supplementedby the up-to-date information from industrial companies and provides it to the general public in various forms.In the Kralupy region, information is communicated to the municipal and local authorities and the public is addressedthrough the local press. Česká rafinérská makes use of various communication channels, including thepublishing of a periodical information magazine and administration of web pages at www.ceskarafinerska.cz.As regards the towns and villages in the vicinity of both refinery plants, Česká rafinérská has applied a principlesof corporate social responsibility (CSR). By concluding a long-term cooperation contract with the town ofVeltrusy – on whose territory most of the Kralupy refinery plant is located – Company has accomplished the goalof entering into framework contracts with the nearest municipalities, contracts that will be further detailedthrough yearly amendments. All contractual documents concluded in this sense included commitments relatedto providing information to the neighbouring municipalities, improvement and protection of the environment,promotion of activities of civic associations and organizations, and supporting specific projects of the local government.The activities of Česká rafinérská also provided room for help to those in need - so-called sponsorship activities.The company has given a range of financial donations to organizations, charity, clubs, schools and various associations,whose applications were discussed by the Financial Donations Committee.The key feats in this field in 2004 undoubtedly included vegetation planted according to a landscaping study inthe area between the industrial complex and the town of Kralupy residential area. The area was planted followingthe construction of a FCC unit and after 3 years of taking care of it, Česká rafinérská presented it to thetown of Kralupy. This project is worth CZK 7.5 million. With its future full-grown vegetation of dozens of treespecies it will provide a visual landscaping interface and at the same time will unite the area – which was previouslyused for agricultural purposes – with the riverine meadow biotope on the right bank of the Vltava river.Česká rafinérská released almost CZK 13 million for financial gifts and donations placed mostly to subjects inboth regions where the Company operates.HEALTH, SAFETY, ENVIRONMENT AND QUALITY REPORT 39
Money moves the world, it depends on us which direction it takes
9. COSTS OF ENVIRONMENTAL PROTECTION – OPERATING COSTS AND INVESTMENTSOperating costsOperating costs of environmental protection are covered from operating resources and are specified in the entriesused in reports on the company's environmental impact. The majority of these costs belongs to the processingof hydrogen sulfide gases from the Claus process and treating and release of wastewater.[CZK thousands]Claus units 42,860.6Operation and maintenance of the wastewater treatment plant 2,092.3Cleaning and releasing of wastewater 80,893.7Water analysis 94.6Operation of HOPV and an open channel 6,040.6Monitoring of air and groundwater pollution 1,235.6Air pollution fee 2,171.2Waste material disposal 6,264.3Emission measurements 2,532.2Other 2,574.2InvestmentsIn 2004 concluded investment activities at the Kralupy refinery were related to the terminal, wastewater treatmentplant, filtration of cooling water and MEROX waste gases; in Litvínov, these included completion of a newdrainage system for the TRF tank.We also continued the development of emergency pumping systems in wastewater pools, reconstruction andmodernization of the terminal, as well as increasing the capacity of the wastewater stripper at the Litvínov refineryand releasing wastewater and exchanging burners in the furnaces at the Kralupy refinery.New activities started in 2004 include the transformation of the slop pool, restructuring of the condensate management,selective refining of FCC gasoline, and dealing with noise emissions in Kralupy rafinery by reductionmeasures, mostly on the isomerisation unit.In 2004 we invested CZK 33.3 million in the activities specified above.During the past year we began and completed the construction of an early-warning informational system in Kralupy,alarm and warning systems at both the Kralupy and Litvínov sites, and a new station in Litvínov for fillingliquid sulfur into tankers. The total capital expenditure for these activities was CZK 31.75 million.To improve manipulation of catalyst dust in the FCC unit, we constructed and put into operation a completelyclosed system of pneumatic transportation; capital expenditures were CZK 5.6 million.The main investment events in 2004 were projects jointly denoted as “Clean Fuels 2005” modernization of unitno. 2304 in Litvínov, additional HRPO reactor, and a three-exhaust separating column in Kralupy). To realizethese plans, we spent CZK 585.85 million in 2004. The goal was to modify the petroleum distillate hydro-refiningfacilities at both refinery plants so that we would achieve desulphurization of motor fuels required by theEuropean Union starting from 2005. The reduction of sulfur content in motor fuels results in a reduction of sulfur-oxideemissions particularly in exhaust fumes from motor vehicles.HEALTH, SAFETY, ENVIRONMENT AND QUALITY REPORT 41
Those who are willing to listen to are not surprised by a critique
10. RESPONSIBLE CARE – RESPONSIBLE BUSINESS IN CHEMICAL INDUSTRYIndicators for HSE results (according to CEFIC) in 2004Number Indicator Unit 2004Refinery: Kralupy (K), Litvínov (L) K LWork safety and health protection1 Number of fatal injuries Number of deaths per year 0 02 Frequency of injuries with subsequent incapacity for work2.1 For own employees Number of injuries/million of hours worked/year 4.3 1.32.2 For contractors Number of injuries/million of hours worked/year 0 03 Frequency of industrial illnesses Number of illnesses/million of hours worked/year 0 0Environmental protectionTreatment of waste material4 Hazardous waste t/year 1437.4 457.85 Other waste t/year 1216.2 1081.0Emissions released into the air6 Sulfur dioxide t/year 632.2 1907.07 Nitrogen oxides t/year 115.1 401.38 Carbon dioxide t/year 389628 5916399 Volatile organic compounds9.1 VOC t/year 50.7 42.89.2 POPC t/year 38.6 111.8Substances released into water10 Phosphorus compounds t/year 0.1 –11 Nitrogen compounds t/year 46.6 –12 COD t O 2 /year 91.9 –13 Total heavy metals (EQS factor) t/year N –BOD t O 2 /year 19.4 –Undissolved substances t/year 17.2 –Petroleum substances (NEL) t/year 2.7 –Other potential effects14 Substances with a potential impact on health and the environment14.1 Hydrogen sulfide – into the air t/year 0.053 0.208– into water t/year – –Energy exploitation15 Energy consumption and energy exploitation efficiency15.1 Energy consumption tons of oil equivalent (TOE)/year 124279 16333015.2 Specific energy consumption TOE/year/tons of production/year 0.05103 0.03796Distribution/transportation16 Distribution/transportation accidents16.1 Air transport Number of accidents/tonne of transported substances – –16.2 Railroads Number of accidents/tonne of transported substances – –16.3 Roads Number of accidents/tonne of transported substances – –16.4 Naval Number of accidents/tonne of transported substances – –16.5 Inland waterways Number of accidents/tonne of transported substances – –16.6 Pipelines Number of accidents/tonne of transported substances – –Reference data1 Number of employees1.1 Number of own employees (average) 278 4321.2 Number of contract employees (average) 186 2302 Number of hours worked2.1 Number of hours worked by own employees 461144 7659112.2 Number of hours worked by contractors 449376 5556803 Turnover – receipts from sale of own products and services *) CZK million/year *) *)4 Distribution of products and number of accidents – –5 Safety costs, costs of protecting health and the environment5.1 Total HSE capital expenditure CZK million/year 434.7 375.15.2 Ratio of HSE to total capital expenditure % 84.9 76.75.3 HSE operating cost CZK million/year 62.0 243.2HEALTH, SAFETY, ENVIRONMENT AND QUALITY REPORT 43N – not monitored – does not occur, is not produced*) The refineries provide only material processing service, they do not produce their own products.
Let us be helpful, the success lies in helpfulness
11. DIRECTORYPersonnel Location Telephone Fax E-mailEnvironmental ProtectionIng. Milan Vitvar Litvínov 47-616-4477 47-616-4858 firstname.lastname@example.orgEva Horská Litvínov 47-616-4442 47-616-4858 email@example.comIng. Pavel Fobl Litvínov 47-616-6530 47-616-4858 firstname.lastname@example.orgIng. Hana Čermáková, Ph.D. Kralupy 315-71-3455 315-71-3809 email@example.comHealth, Safety and Quality ManagementIng. Michaela Freyová Litvínov 47-616-4041 47-616-5745 firstname.lastname@example.orgMiloš Maršíček Litvínov 47-616-2160 47-616-5745 email@example.comMiroslav Bělka Kralupy 315-71-3436 315-71-3809 firstname.lastname@example.orgMiroslav Holienčin Litvínov 47-616-2307 47-616-5745 email@example.comJan Rusó Kralupy 315-71-3426 315-71-3809 firstname.lastname@example.orgJitka Kopecká Litvínov 47-616-2724 47-616-5745 email@example.comPetr Svoboda Kralupy 315-71-3419 315-71-3809 firstname.lastname@example.orgBc. Gabriela Bergmanová Litvínov 47-616-3062 47-616-5745 email@example.comHuman ResourcesJUDr. Alena Stejskalová Litvínov 47-616-3809 47-616-6838 firstname.lastname@example.orgIng. Ivo Hamáček Litvínov 47-616-5943 47-616-6838 email@example.comMiroslav Havel Litvínov 47-616-5600 47-616-3557 firstname.lastname@example.orgPublic RelationsIng. Aleš Soukup,CSc. Kralupy 315-71-8579 315-71-8642 email@example.comIng. Jaroslav Růžek Kralupy 315-71-8578 315-71-8642 firstname.lastname@example.orgExternal Cooperation: Ing. František Srb, MUDr. Petr Bučekinfo@crc.czwww.ceskarafinerska.czHEALTH, SAFETY, ENVIRONMENT AND QUALITY REPORT 45
ČESKÁ RAFINÉRSKÁ, a.s.Záluží 2, Litvínov 7, Post Code 436 email@example.comProduction: CDL Design s.r.o., www.cdl.cz, 2005