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HSE Management System (HSE_1 Group Guideline) translates the Health, Safety and Enviromental principles into an outline

of practical activities that shall be executed to manage HSE at all levels in MOL Group in order to achieve world-class performance.

HSE MS
Controlled document is on the CIP and SPS / HSE sites Date of Effect: 15. 02. 2008

HEALTH, SAFETY & ENVIRONMENT MANAGEMENT SYSTEM (HSE MS) HSE EBC & Panels 2008

FOREWORD
15th of February 2008

Dear Manager, Effective Health, Safety and Environmental (HSE) management is more crucial than ever. Legislation is becoming more stringent and public expectations are high. Our commitment is strengthened by an increasing understanding that improvement in HSE performance enhances overall business efficiency and effectiveness. We are very pleased that user friendly group guideline is now available on HSE Management System (HSE MS). Within the framework of new MOL Group Regulatory System, the Group guideline HSE_1_GG Health, Safety and Environment Management System (attached) is being issued these days. The guideline consists of 15 elements, with clearly defined business rules that must be followed by each operation. This document provides direction and conceptual guidance to managers for embedding HSE into their business by describing a consistent HSE Management System of MOL Group. Implementation of HSE MS at site and company level, covering contractors as well, should give ownership of HSE rules by all concerned. This must lead to activities where every person is accountable for implementing the agreed rules within his/her area of responsibility. The attached Group guideline (HSE MS) will be followed by series of HSE Global and Local Operative Regulations, which will be the key tools for implementation of 15 elements mentioned above. We feel a sense of urgency because the full implementation of HSE MS according to Operational regulation Road Map will involve considerable joint effort and take time. Your role as a leader is to ensure that Group HSE Guideline is implemented and followed. You can do this through taking a personal ownership of Element 1 Leadership and Accountability. Hereby we would like to ask you to create conditions for putting HSE Management System in place in your given area, with clear segregation of duties of multi-step implementation process. HSE is ready to provide professional support in implementation of HSE Group Guideline at your business. If you have any questions related to this issue, ask/send an e-mail to Group HSE Development Manager Peter Varga (PetVarga@mol.hu) or contact your HSE business manager and/or HSE local coordinator. We are confident that our common effort in implementation of Group HSE Guideline will bring positive results contributing to achieving our business strategic goals.

Thank you for your commitment.

Zsolt Herndi Chairman and CEO

Gyrgy Mosonyi GCEO

HSE MS
Controlled document is on the CIP and SPS / HSE sites Date of Effect: 15. 02. 2008

INTRODUCTION
MOL Group owns and operates a range of oil and petrochemicals businesses in different EU countries and Non-EU regions and cultures that may affect the health and safety of people, the environment. As stated in the MOL Group HSE Policy we have an overriding commitment to business excellence and sustainable development and we pursue this through the effective management of HSE. This Group Guideline is the basis for HSE management systems at all levels in MOL Group. Although HSE matters are interrelated and co-dependent, it is recognised that the skills and processes required to manage issues may vary according to the context. We are going to introduce the Health, Safety and Environment Management System to focus on the responsibilities and accountabilities of line management with regards to turning our HSE Standard Principle/Policy and thematic policies (Road Safety Policy) into practice. The HSE Policy is the highest Group level commitment in our Health, Safety and Environment Management and applies to all our business units and controlled subsidiaries.

Health, safety and environmental protection (HSE) is an integral part of the management philosophy of MOL Group. Considering HSE matters as any core business issues enables us to implement our corporate values and to achieve business excellence following the same approach wherever we do business.

Mol Group HSE Policy, December 2004

HSE MS ELEMENTS AT GLANCE


ELEMENT 1 HSE Leadership & Accountability Managers, employees and contractors understand their accountabilities and demonstrate leadership and commitment to Group HSE Policy through effective HSE management. Page 11

ELEMENT 2 HSE Risk and Change Management HSE hazards are identified and associated risks assessed and managed. Planned and unplanned changes are identified and managed.

Page 12

ELEMENT 3 HSE Training and Competences Employees, contractors and visitors are aware of relevant HSE requirements, hazards, risks and controls, are competent to conduct their activities and behave in a responsible manner.

Page 13

ELEMENT 4 HSE Planning and Targets HSE planning is an integral part of business planning with strategic objective, goals and yearly targets expected to drive continual improvement in performance.

Page 14

ELEMENT 5 Contractor and Supplier HSE Contractors, suppliers and others doing work on the MOL Groups behalf, impact our operation and reputation. The contracting of services, the purchase, hire or lease of assets and activities with partners, are carried out so as to minimise any adverse HSE consequences.

Page 15

ELEMENT 6 Design and Construction Management of HSE risks and opportunities is an integral part of all projects through design, approval, procurement, construction and commissioning.

Page 16

ELEMENT 7 Safe Operation All plant and asset is operated, maintained, inspected and tested using procedures and applying standards that manage HSE risks.

Page 17

ELEMENT 8 Health Prevention and Promotion Health risks shall be managed through prevention and protection, employee information and education initiatives.

Page 18

HSE MS
Controlled document is on the CIP and SPS / HSE sites Date of Effect: 15. 02. 2008

ELEMENT 9 Environmental Stewardship MOL Group requirements to prevent pollution and waste, improve environmental performance. Striving to minimise impact of our activities to the environment.

Page 19

ELEMENT 10 HSE Legal Requirements and Documentation Relevant legal, regulatory and other HSE requirements are identified, accessible, understood and complied with and an effective HSE document management system is in place.

Page 20

ELEMENT 11 Product Stewardship The lifecycle HSE impacts associated with MOL Groups products and services, processes are minimized, managed and communicated to customers /users.

Page 21

ELEMENT 12 HSE Communication and Consultation Open, proactive and effective communication and consultation is maintained with stakeholders regarding the HSE aspects of our business. Stakeholders are encouraged to participate in and contribute to sustainable development through HSE performance improvement initiatives.

Page 22

ELEMENT 13 HSE Incident Reporting and Investigation HSE incidents are reported, investigated and analysed. Effective corrective and preventive actions are taken and learnings shared to prevent future incidents.

Page 23

ELEMENT 14 Emergency Preparedness and Response Effective emergency preparedness and response are in place to ensure that, in the event of an incident all necessary action are taken for the protection of the public, the environment and MOLs workforce and assets.

Page 24

ELEMENT 15 HSE Operation Assessment and Improvement HSE performance and systems are monitored, audited and reviewed to identify trends, measure progress, assess conformance and drive continual improvement.

Page 25

GLOSSARY

Page 27

OPEN SYSTEM - SOLVED STATE OF HSE CUBE

Operation Elements (corners of cube)

System Driverss (centre of cube)

Global and/or Local Operative Regulations Open System (pictures)

HSE MS
Controlled document is on the CIP and SPS / HSE sites Date of Effect: 15. 02. 2008

THE NEW REGULATORY SYSTEM


Governance Handbook consists of
OOR CoE Group Guidelines Glossary

MOL Group Code of Ethics (CoE)


It sums up and systematises all business-related ethical standards and scopes of responsibilities which MOL Group established for itself.

OOR MOL Group Operational and Organisational Rules


It defines the MOL Group corporate governance philosophy, the Group operational model, the basic operational rules and describes MOL Group Standard Principles.

Standard Principles
Boa rd Exe of Dire cuti ve Bctors, oard
Describe the position, the set of principles that directs business decisions and activities to carry out core values and behaviours held critical to MOL Group.

LDA MOL Group List of Decision-Making Authorities


Defines the most important decision-making points of the operation and managerial authorities related to decisions. Thus, it disposes the key control points required by efficient development and operation of MOL Group processes.
TIER 1ewo Fram rk

Code OOR of Standard Ethics Principles LDA

DTR MOL Group Description of Tasks and Responsibilities


Stipulates the key tasks and responsibilities of organisational units as well as organisational co-ordination mechanisms that support decision-making (committees, decision preparation teams), and their charter.

DTR
Gro up Lea-level ders

Group Guidelines
Rules defined by a Group-level leader in consensus with the responsible Council that describe the standardised operational requirements of the area managed by the Group-level leader and describe rules to be mandatory applied everywhere in the Group, where the activity is performed.

2 TIER -GG s

Group Guidelines

TIER

Global Operative regulations


LeaLocal ders

3-O pera tive regu latio

Global Operative regulations


Rules valid for more than one MOL-Group member defined by Group-level leaders describing operational framework specific either to product, service, technology, geographic region or information technology system.

Local Operative regulations

Local Operative regulations


Rules connected to a MOL Group member defined by its Local leaders that describe local processes (with organisational responsibilities) and methodologies based on the framework set in Group Guidelines and Global Operative regulations by Group-level leaders.

METHODOLOGY OF NEW REGULATORY SYSTEM


Applicable everywhere

ns

Understandable for everybody OOR Code of Ethics Standard Principles LDA Group Guidelines

Measurable anytime

DTR

GLOSSARY

Detailed rules

KPI KCI Controlling handbook Required regulation list

ENGLISH

Councils

Userfriendly form

Subsidiary involvement

CROSS GROUP COMMUNICATION & IMPROVEMENT

1. GUIDELINE OBJECTIVES AND CONTEXT


1.1 Objectives To transform the principles expressed in the HSE Standard Principle/Policy1 into a practical activities in order to manage HSE. To provide direction and conceptual guidance to managers on the embedding of HSE principles in their businesses by describing a consistent MOL Group HSE Management System (HSE MS) with clear segregation of duties. This Guideline describes the essential minimum elements of an HSE function, management system. It also includes a requirement for system to be set up in such a way that it can be externally certified, in line with nternational systems standard.2 1.2 Date of effect: 02.15.2008. HSE Panels and frontline HSE BUs are available for consultation on the implementation of this Guideline. The Group HSE Unit is responsible for training and communication of this Guideline as needed, prior to its date of effect. 1.3 Main requirements Individual HSE management tools and systems have evolved over many years but now a structured approach is required to provide managers with the assurance that they are discharging their HSE responsibilities effectively. A common framework is also needed, after decentralization of the HSE organisation, to ensure mutual review of HSE functions and business issues. MOL Group HSE MS has been built upon broad experience in management systems in a number of MOL Group companies and upon best practices. Although it will require extra efforts to put it into place, the rewards in terms of better management, reduced risks and improved business efficiency will make it well worthwhile. Group Guidelines consist of mandatory rules (M) for the proper conduct of business. However, to develop operations and implement good practices in MOL Group, recommended rules (R)3 have also been included, the better to guide the development of processes. 1.4 Compliance Rules set out in this Guideline are mandatory requirements for all units operationally controlled by MOL Group. However, these business rules may not be automatically applicable to newly- acquired companies and entry businesses within their first 3 years. To enact HSE rules is a multi-step process requiring the assignment of specific implementation responsibilities and involving: 1. Prior gap analysis (self-assessment with relevant the Divisional HSE Partner) 2. An HSE Guideline compliance development program comprising training and/or coaching (submitted by a CEO or accountable manager to then be endorsed by GHSE) 3. Compliance level improvement or enhancement, including business integrity within 3 years. Progress must be reported to GHSE and relevant superior business manager(s) at least annually. 1.5 Recommendations This Guideline may be used as an HSE MS template by any operating BU or contracting, joint entity. Furthermore, this Guideline is intended to enhance rather than merely to suggest replacement of existing sound, workable and effective BU/entity systems and practices.

1. MOL Group HSE Standard Principle/Policy demonstrates the Board of Directors commitment to HSE, the core values and expectations required to achieve world-class (top quartile) HSE performance. 2. Application for ISO 14001 and/or OHSAS 18001certificate(s) should be based on relevant business manager decision based on achievable business benefits or/and statutory requirements 3. Sentences with non-mandatory requirements are italicized.

HSE MS
Controlled document is on the CIP and SPS / HSE sites Date of Effect: 15. 02. 2008

2. KEY PERFORMANCE INDICATORS


MOL Group uses a mix of both leading and lagging indicators to measure overall HSE effectiveness and performance4. Businesses can apply more specific leading or lagging indicator which will be used to measure their HSE performances on an international industry basis and among their peer groups. 2.1 Leading indicators are designed to drive and measure critical HSE activities. When measured and monitored actively, the data from leading indicators enable effective intervention to address or reverse a negative trend before it results in injury, damage or loss. They comprise: 1. Reported Near-misses, Unsafe Act and Conditions (numbers) 2. Incident Inquiry Rate (IIR) 3. HSE Behaviour Observations, Audits, Inspections versus planed (%) 4. Fire cases (number) 5. Spills > 1 m3 (number) 6. Loss of Primary Containment (LOPC number) 7. Freshwater intake/consumption (m3) 8. Recycled, Reused and Recovered Materials (tons) 9. Road Accidents Rate (RAR) 10. HSE Audit findings closure rate (%) 11. HSE Training completion (%) 12. Emergency drills (number) 2.2 Lagging Indicators measure outcomes of a companys HSE activities. They provide an overall estimate of the progress required to achieve our vision of excellence, but they not measure the effective implementation of HSE programs, proactive action plans or on-the-spot self-assessment. They comprise: 13. Fatalities (number) 14. Lost Time Injury Frequency (LTIF) 15. Total Recordable Incident Rate (TRIR) 16. Total Reportable Occupational Illness Frequency (TROIF) 17. Hazardous Waste (tons) 18. Controlled discharges to Water (tons) 19. Direct GHG emissions (CO2 eq. t) 20. HSE non-compliances (number) 21. HSE Fines/Penalties (m ) 22. Environmental Provision release (m ) 23. HSE Expenditure (m )

3. KEY CONTROLS
Control indicators specify the most important functional controls of over the HSE from the integrated operation point of view such as reports, reviews and audits. Ad-hoc Weekly Monthly Quarterly Midyear Annual Incident Report HSE Scorecard HSE Projects Review HSE Management Letter HSE Performance Review HSE Assurance Letter (Self-Assessment) and Audit Program

4. KPIs with non-mandatory requirements are italicized.

4. REQUIRED OPERATIVE REGULATIONS AND LOCAL DOCUMENTATION


4.1 Global Operative regulations 1. HSE_1_G1.1.1 see: Group Operation Management 2. HSE_1_G2.1.1 HSE Comprehensive Risk Assessment (COMPASS) 3. HSE_1_G3.1.1 HSE Competencies &Training 4. HSE_1_G4.1.1 HSE Target Setting & Planning 5. HSE_1_G5.1.1 Contractor and Supplier HSE Management 6. HSE_1_G6.1.1 Process Safety Management (PSM) 7. HSE_1_G7.1.1 HSE Standards 8. HSE_1_G7.2.1 Fire Prevention & Protection 9. HSE_1_G8.1.1 Occupational Health Management (OHM) 10. HSE_1_G8.2.1 Workplace Health Promotion (WHP) 11. HSE_1_G9.1.1 Waste Management 12. HSE_1_G9.2.1 Greenhouse Gas (GHG) Management 13. HSE_1_G9.3.1 Risk Based Environmental Remediation (RBER) 14. HSE_1_G10.1.1 HSE Document and Record Control 15. HSE_1_G11.1.1 Product Stewardship (PS) 16. HSE_1_G12.1.1 HSE Communications 17. HSE_1_G13.1.1 Incident Reporting & Investigation System (IRIS) 18. HSE_1_G14.1.1 Emergency Response System (ERS) 19. HSE_1_G15.1.1 HSE Audit 20. HSE_1_G15.2.1 HSE Self-Assessment 21. HSE_1_G15.3.1 HSE Performance Monitoring and Reporting 4.2 Local Operative regulations 1. HSE Management System and/or HSE Policy 2. Fire Prevention & Protection and/or Emergency Response Plan 3. (HSE) Training & Development 4. (HSE) Document & Record Management 4.3 Local documentation (electronic or paper) requirements 1st element 9th element Local language version of HSE Policy Environmental Impact Assessment (for major projects) HSE MS or Register of HSE Critical activities Environmental Remediation Plan (regarding liabilities) Plan of HSE Site visits (Annual) Waste Management Plan HSE meeting(s) record(s) GHG Emissions Report (verified within EU) 2nd element Risk Register/HSE Critical Activities 3rd element HSE Training & Development Plan 4th element Annual HSE Objectives & Targets Annual HSE Action Plan 5th element Contractors HSE Pre-Qualification Questionnaire 6th element Records of Process Hazard Analysis (for critical process) 7th element Local language version of Global HSE Standards 8th element List of trained First Aid provider(s) Medical Emergency contact list 10th element List of applied HSE legislation List of HSE permits and licences 11th element List of Local MOL Products Risk Assessment (regarding manufacture) Local language version of MOL Product (M)SDS Local (M)SDS Emergency Contact List 12th element Local Annual HSE and/or SD Report 13th element Records of Incident Investigation Reports 14th element Emergency/Fire Response Plan 15th element HSE Performance evaluation records Local HSE Audit Plan

HSE MS
Controlled document is on the CIP and SPS / HSE sites Date of Effect: 15. 02. 2008

10

HSE INCIDENT ENVIRONMENTAL STEWARDSHIP REPORTING AND INVESTIGATION

HSE LEADERSHIP AND ACCOUNTABILITY

ELEMENT 1.
HSE Leadership & Accountability
HSE TRAINING AND COMPETENCES

HSE OPERATION ASSESSMENT AND IMPROVEMENT

Business rules for HEALTH, SAFETY and ENVIRONMENT MANAGEMENT 10 MOL Group maintains a Group HSE Standard Principles/Policy appropriate to HSE impacts of Group activities, products, services and commitments. Where a MOL entity has operational control it must have a written HSE Policy covering Group HSE Standard Principles/Policy, as a minimum. 20 Site management must define and document the scope of the HSE MS and/or HSE Critical activities in their operations. 30 Managers must demonstrate visible leadership and proactive commitment towards to HSE excellence through: setting personal example communicating HSE requirements to employees discussing and reviewing progress against HSE targets demonstrating personal participation in HSE initiatives

Type of regul. (Global or Local) L

Title of G/L Operative reg. HSE Policy

HSE MS

40 Managers must conduct frequent site inspections, reviews and behavioural observation walkabouts at least on a quarterly basis. 50 Leaders must integrate HSE issues into management meetings as the 1st agenda point or set up equivalent managerial HSE Forum /HSE (Sub)Committees 60 HSE is line management responsibility/accountability; it can not be delegated to a staff member of group or an external service provider 70 Employees and contractors must be aware of proper HSE behaviour expected of them and have a clear understanding of the consequences of inappropriate conduct. Systems are in place that recognise, reinforce and reward HSE innovation, initiatives, desired behaviour and results. 80 Employees and contractors must understand that they have the right and responsibility to stop work or refuse to work in circumstances that may cause HSE harm, and to immediately bring these situations to the attention of management.
Recommended Business rules are italicized.

11

SAFE OPERATION

HSE DESIGN AND CONSTRUCTION

HSE RISK AND CHANGE

ELEMENT 2.
HSE Risk and Change Management
CONTRACTOR AND SUPPLIER HSE

PRODUCT STEWARDSHIP

Business rules for HEALTH, SAFETY and ENVIRONMENT MANAGEMENT 10 Personnel at all organizational level must be appropriately involved in the identification of HSE hazards and effects on them, and the subsequent implementation of risk control and recovery measures. 20 HSE hazard and qualitative risk assessment must be regularly conducted though: identifying hazards assessing consequences and probabilities controlling causes and implementing prevention measures recovering and mitigation steps at existing facilities or operations and must be initiated if activities changing. HSE Critical Risks must be identified, evaluated and methods to control them put into practice. 30 A comprehensive quantitative HSE Risk assessment of health, safety and environmental hazards must be conducted for hazardous processes at existing facilities or operations. Quantitative assessment must be updated at least every 5 years or more frequently if the nature of a risk requires it. HSE risks should always be reduced to an acceptable level (ALARP) 40 All significant changes (to organisation, personnel, processes, equipment design, documentation etc.) must be evaluated and managed to ensure that HSE risks arising from such changes remain at an acceptable level.

Type of regul. (Global or Local) G

Title of G/L Operative reg.

HSE Comprehensive Risk Assessment (COMPASS)

HSE Comprehensive Risk Assessment (COMPASS)

50 MOL Group member companies/Business Divisions should establish and implement written procedure to manage critical HSE changes to ensure that all necessary actions have been identified, authorized and completed and relevant documentation updated. 60 Management of Change (MOC) system must assure essential communication and training so that all effected MOL and/or contractor employees and stakeholders can understand and successfully manage new risk. 70 HSE Comprehensive Risk Assessment must be performed by trained and qualified employees or contractor and include expertise from unit assessed. 80 HSE risks must be evaluated by the appropriate level of management, consistent with the significance of the risk. Risk management decisions must be documented and the implementation of resulting actions tracked in a risk register.
Recommended Business rules are italicized.

Management of Change

See: Group Operation Management HSE Comprehensive Risk Assessment HSE Comprehensive Risk Assessment (COMPASS)

HSE MS
Controlled document is on the CIP and SPS / HSE sites Date of Effect: 15. 02. 2008

12

HSE INCIDENT ENVIRONMENTAL STEWARDSHIP REPORTING AND INVESTIGATION

HSE LEADERSHIP AND ACCOUNTABILITY

ELEMENT 3.
HSE Training and Competences
HSE TRAINING AND COMPETENCES

HSE OPERATION ASSESSMENT AND IMPROVEMENT

Business rules for HEALTH, SAFETY and ENVIRONMENT MANAGEMENT 10 Recruitment criteria for employees must be reviewed by HSE competence requirements. 20 Employee and contractor HSE competences should be identified, documented and periodically) reviewed. (at minimum once a year) 30 Employee and contractor training needs must be identified, prioritized, planed, documented and monitored. Staff must be developed following structured competency assessment and training system. 40 Initial/orientation, ongoing and periodic refresher HSE training to meet job and legal requirements must be provided and documented. 50 HSE Culture Change training should be undertaken by all managers within the next 3 years. 60 Training of all mangers, leaders and employees should be undertaken to demonstrate fully Group HSE MS requirements and its implementation.
Recommended Business rules are italicized.

Type of regul. (Global or Local)

Title of G/L Operative reg.

HSE Competences and Training


HSE Competences and Training HSE Training and Development

13

HEALTH PREVENTION AND PROMOTION

HSE PLANNING AND TARGETS

HSE LEGAL REQUIREMENTS AND DOCUMENTATION

ELEMENT 4.
HSE Planning and Targets
HSE COMMUNICATION AND CONSULTATION

EMERGENCY PREPAREDNESS AND RESPONSE

Business rules for HEALTH, SAFETY and ENVIRONMENT MANAGEMENT 10 HSE Planning is an integrated part of Business Planning, and its schedule must always be harmonised with the MOL Group planning calendar. 20 MOL Group shall set Group-wide HSE goals, targets and leading and lagging indicators that are measurable, documented, communicated, monitored and reviewed. 30 MOL Group members and Business Divisions must annually set: measurable HSE objectives and targets, leading and lagging indicators that are documented, communicated, monitored and reviewed. They must be consistent with the MOL Group-wide HSE targets, take into account the HSE risks, legal requirements, and consider technological options, business requirements and the interests of stakeholders. 40 An Annual HSE Action Plan (tasks, projects and programs) must be put in place and include designated responsibilities, resources and time frames to achieve HSE targets and objectives. To compile an annual HSE action plan the following inputs must be considered: HSE policy, strategic goals and objectives, HSE (liability) assessment reports, requirement of relevant HSE legislations, HSE risk map, HSE trainings, HSE improvement plan, Findings of previous HSE audits (internal and external), Stakeholders expectations as well as the availability of the company or BU resources. Annual HSE action plans must be updated and communicated as changes, modifications or new developments occur.
Recommended Business rules are italicized.

Type of regul. (Global or Local) G

Title of G/L Operative reg. HSE Target Setting and Planning HSE Target Setting and Planning HSE Target Setting and Planning

HSE Target Setting and Planning

HSE MS
Controlled document is on the CIP and SPS / HSE sites Date of Effect: 15. 02. 2008

14

SAFE OPERATION

HSE DESIGN AND CONSTRUCTION

HSE RISK AND CHANGE

ELEMENT 5.
Contractor and Supplier HSE
CONTRACTOR AND SUPPLIER HSE

PRODUCT STEWARDSHIP

Business rules for HEALTH, SAFETY and ENVIRONMENT MANAGEMENT 10 Contractors must be HSE pre-qualified and evaluated for work using criteria that include assessment of capabilities and competencies to perform work in a safe and environmentally sound manner. 20 Hazards and risks associated with contractor and procurement activities in our businesses must be identified, managed and communicated. 30 Clear deliverables and performance indicators should be agreed and systems put in place to ensure HSE and technical compliance. 40 Interfaces between contract owner and suppliers of services and/or products must be identified and effectively managed. 50 Purchased products and services should be verified meeting national/international health, safety and environmental standards. 60 Conduct HSE workshop for contractor to communicate MOL HSE requirements / guidelines prior to start of every project.
Recommended Business rules are italicized.

Type of regul. (Global or Local) G

Title of G/L Operative reg. Contractor & Supplier HSE Management

Contractor & Supplier HSE Management

Contractor & Supplier HSE Management

15

SAFE OPERATION

HSE DESIGN AND CONSTRUCTION

HSE RISK AND CHANGE

ELEMENT 6.
Design and Construction
CONTRACTOR AND SUPPLIER HSE

PRODUCT STEWARDSHIP

Business rules for HEALTH, SAFETY and ENVIRONMENT MANAGEMENT 10 Baseline safety-related technical, environmental and health data must be collected before the development phase of any new operation, facility or major modification. 20 Design and construction of new or modified assets must be formally approved by a PS Engineer or designated technical authority. 30 Deviation from approved design, standards and execution shall only be permitted after review and approval by PS Engineer or designated technical authority. 40 Integrated HSE and quality control/assurance must be put in place to ensure that facilities meet design and procurement specifications and that construction is in accordance with approved plan. 50 The design and selection of new plant, equipment and processes controlled by MOL Group must take known and projected asset life cycles, HSE requirements, provision for decommissioning, disposal and closure, into account. 60 Lessons learned from previous projects, current operations and other relevant sources should be taken into account in project development phases to improve HSE performance. Best Available Technique (BAT) should be preferred. 70 HSE Critical equipments, systems (pressure vessels, piping, pressure relief and vent systems, controls, alarms, sensors etc.), procedures and hazardous substances must be identified and documented prior to commissioning. 80 Prior to new/changed facility start-up final Process Hazards Analysis (PHA) must be conducted and all recommendations must be closely studied and approved by asset owner /site manager. 90 Documented pre-start-up team-review must be carried out as the final checkpoint for new and modified equipment to confirm that all appropriate HSE requirements have been addressed and the facility is safe to operate.
Recommended Business rules are italicized.

Type of regul. (Global or Local) G

Title of G/L Operative reg. Process Safety Management (PSM) Process Safety Management (PSM) Process Safety Management (PSM) Process Safety Management (PSM) Process Safety Management (PSM)

Process Safety Management (PSM) Process Safety Management (PSM) Process Safety Management (PSM)

HSE MS
Controlled document is on the CIP and SPS / HSE sites Date of Effect: 15. 02. 2008

16

SAFE OPERATION

HSE DESIGN AND CONSTRUCTION

HSE RISK AND CHANGE

ELEMENT 7.
Safe Operation
CONTRACTOR AND SUPPLIER HSE

PRODUCT STEWARDSHIP

Business rules for HEALTH, SAFETY and ENVIRONMENT MANAGEMENT 10 HSE operational procedures, local work instructions must be established, implemented and maintained to ensure that operations and maintenance activities are managed.

Type of regul. (Global or Local) G

Title of G/L Operative reg. HSE Standards

20 HSE critical processes and activities must be identified and executed according to documented regulations to ensure minimum HSE risk and impact. 30 An appropriate fire prevention system must be established to prevent the evolvement of circumstances that may cause fires in operational areas. 40 Where an operation is considered to be the cause of a major industrial accident (as defined in the SEVESO act) the HSE Comprehensive Risk Assessment (COMPASS) regulation should be implemented. 50 To prevent road accidents, Road Safety Policy requirements must be met. 60 To control hazards of MOL Groups hazardous chemicals, manufacturing and hazardous operational processes, Process Safety Management System (PSM) must be used. PSM related start-up, operating, maintenance and shutdown process regulations must be in place with identified designated authorities (e.g. permit to work, hand-over, equipment and process isolation, etc.) 70 Proposals to modify operating or design limits must be subject to Management of Change (MOC) processes. G Fire Prevention & protection

HSE Comprehensive Risk Assessment


HSE Standards Process Safety Management (PSM)

G G

See: Group Operation Management Process Safety Management (PSM)

80 Systems must be established, documented and maintained to ensure the ongoing integrity of plant and equipment. These include procedures for maintenance, inspection, testing, calibration and certification of equipment at frequencies that meet legal and manufacturer requirements. 90 The reliability and availability of protective systems and equipments (critical alarm, shutdown, emergency-response, PPE) must be maintained through appropriate testing and maintenance programs, including management of temporary disarming or deactivation.
Recommended Business rules are italicized.

17

HEALTH PREVENTION AND PROMOTION

HSE PLANNING AND TARGETS

HSE LEGAL REQUIREMENTS AND DOCUMENTATION

ELEMENT 8.
Health Prevention and Promotion
HSE COMMUNICATION AND CONSULTATION

EMERGENCY PREPAREDNESS AND RESPONSE

Business rules for HEALTH, SAFETY and ENVIRONMENT MANAGEMENT 10 Chemical, physical, biological, mental and ergonomic workplace hazards must be identified assessed and regularly revised based on the degree of occupational exposure. 20 Health risks must be managed through preventative and protection measures, employee information and education initiatives.

Type of regul. (Global or Local) G

Title of G/L Operative reg. HSE Comprehensive Risk Assessment Occupational Health Management (OHM)

30 Task/job related health screening of all employees, new hires and employees leaving MOL Group should be performed regularly.

Occupational Health Management (OHM) (OHM)


Occupational Health Management (OHM) Occupational Health Management (OHM)

40 Appropriate medical monitoring of all employees should be performed regularly. 50 Emergency medical service/support and resources must be available within 4 hours at every worksite.

G
G

60 First aid must be provided at each workplace by skilled person(s) with appropriate sources, depending on the number of employees and the level of worksite risk. 70 Health promotion program should be provided and designed to enhance employees well-being and productivity.

Workplace Health Promotion (WHP)

Recommended Business rules are italicized.

HSE MS
Controlled document is on the CIP and SPS / HSE sites Date of Effect: 15. 02. 2008

18

HSE INCIDENT ENVIRONMENTAL STEWARDSHIP REPORTING AND INVESTIGATION

HSE LEADERSHIP AND ACCOUNTABILITY

ELEMENT 9.
Environmental Stewardship
HSE TRAINING AND COMPETENCES

HSE OPERATION ASSESSMENT AND IMPROVEMENT

Business rules for HEALTH, SAFETY and ENVIRONMENT MANAGEMENT 10 For major projects (new activities, facility developments or significant modifications) which require planning permission a Preliminary Environmental Impact Study (PEIS) and/or Environmental Impact Assessment (EIA) must be performed. 20 Where installations are covered by GHG emission trading scheme (ETS), direct GHG emissions must be monitored, reported and verified. Cost-effective actions must be taken wherever GHG are emitted with the aim of decreasing such emissions. 30 Generation of hazardous and non-hazardous wastes must be minimised. Generated hazardous and non-hazardous wastes must first of all be treated by re-use, recycling, energy-recovery and/or final disposal. Hazardous and non-hazardous waste streams must be traced from generation up to final treatment which should take place as close to the point of generation as practicable. 40 Soil and groundwater contamination must be assessed and, where required, control or remediation must be taken in hand. Remediation is a risk management issue, whereby technical and administrative actions are adjusted to current and near-term future land use. MOL Group favours the in-situ natural or intensified-natural solutions whereby energy consumption and/or the amount of remediation-generated waste is zero or minimal.
Recommended Business rules are italicized.

Type of regul. (Global or Local) G

Title of G/L Operative reg. HSE Comprehensive Risk Assessment (COMPASS) Greenhouse Gas Management (GHG) Waste Management

Risk Based Environmental Remediation (RBER)

19

HEALTH PREVENTION AND PROMOTION

HSE PLANNING AND TARGETS

HSE LEGAL REQUIREMENTS AND DOCUMENTATION

E L E M E N T 10 .
HSE Legal Requirements and Documentation
HSE COMMUNICATION AND CONSULTATION

EMERGENCY PREPAREDNESS AND RESPONSE

Business rules for HEALTH, SAFETY and ENVIRONMENT MANAGEMENT 10 Systems must be put in place to identify and access all applicable HSE laws, regulations, approvals, licences, permits, and other requirements (e.g. codes, policies, standards, protocols and commitments) and documented in a compliance register that is reviewed and kept up-to-date and communicated to the workforce.

Type of regul. (Global or Local) G

Title of G/L Operative reg. HSE Document and Record Control HSE Document and Record Control HSE Document and Record Control

20 A compliance plan must be prepared and followed up for all external and internal HSE requirements and such plan must contain the precise description of a given action or task, its implementation timetable, resources required and person(s) responsible. If minor changes in law occur, the preparation of such action plans is optional. 30 A system must be put in place to make secure drawings, design data and other documentation, including definition of responsibilities for maintaining such information. Current versions of relevant documents must be made available and understandable to users, as required. Documents from external sources necessary for HSE MS planning and operation must be recorded and kept up-to-date. 40 Systems must be put in place to ensure that accurate, legible and identifiable HSE records are set up and maintained. Medical records must be kept confidential by appropriate health experts

HSE Document and Record Control HSE Document and Record Control

50 HSE documents and records must be identified, securely stored, readily retrievable, with specified retention times based on legal requirements and/or knowledge preservation needs, and responsible custodians assigned. Disposal of such documents must be in accordance with MOL operative regulations. 60 Every HSE related data/datum, figure and record should be stored in HSEINFO.

HSE Document and Record Control

Recommended Business rules are italicized.

HSE MS
Controlled document is on the CIP and SPS / HSE sites Date of Effect: 15. 02. 2008

20

SAFE OPERATION

HSE DESIGN AND CONSTRUCTION

HSE RISK AND CHANGE

E L E M E N T 11 .
Product Stewardship
CONTRACTOR AND SUPPLIER HSE

PRODUCT STEWARDSHIP

Business rules for HEALTH, SAFETY and ENVIRONMENT MANAGEMENT 10 Product Stewardship must be applied at all product life cycle stages relevant to the MOL activities 20 New product (uses and markets) assessments must be conducted prior to marketing or distribution, to identify health, safety and environmental hazards and risks associated with their normal use and potential misuse. 30 Periodic reassessments must be conducted for all manufactured and re-branded products and isolated intermediate streams. This includes collection and review of adverse effects reported or experienced by those handling such products. Records of assessment, background information and conclusions must be kept up-to-date throughout a products life and retained as appropriate. 40 Dangerous substances and products must be managed throughout their life-cycles i.e. preparation, authorization, restrictions on their manufacture, market distribution, use and disposal. 50 Material Safety Data Sheets (MSDS), labels, exposure scenarios, chemical safety assessments and other information must be developed and made available to handlers and users in accordance with legal and customer requirements, and when such information changes. 60 A system must be put in place to respond to emergency requests for MOL product health, safety and environmental information. 70 An effective recall system must be put in place for MOL products where defect could give rise to health, safety and environmental hazards. 80 Dangerous goods should be handled during transportation according to the requirements of the related (ADR, RID, IMO and IATA) regulations. The handling system should manage and focus on sender and receiver roles of MOL Group companies and BUs.
Recommended Business rules are italicized.

Type of regul. (Global or Local) G

Title of G/L Operative reg. Product Stewardship

Product Stewardship Product Stewardship /MSDS

G Product Stewardship

21

HEALTH PREVENTION AND PROMOTION

HSE PLANNING AND TARGETS

HSE LEGAL REQUIREMENTS AND DOCUMENTATION

E L E M E N T 12 .
HSE Communication and Consultation
HSE COMMUNICATION AND CONSULTATION

EMERGENCY PREPAREDNESS AND RESPONSE

Business rules for HEALTH, SAFETY and ENVIRONMENT MANAGEMENT 10 MOL Group HSE Policy, the HSE MS, HSE (business) rules, and relevant information on HSE matters, risks, plans and performance must be communicated throughout the organisation to employees, and to external stakeholders, on a regular basis. 20 Proactive and open consultation and communication with governments, authorities and other organisations must be maintained to contribute to the development of public policy, relevant legislation and educational initiatives in relation to Sustainable Development. 30 HSE critical information must be shared across the organisation and its operations as well as, where appropriate, with external stakeholders. 40 Concerns, complaints and relevant external communications related to HSE aspects of the organisation must be recorded in a register, acknowledged, investigated as incidents and outcomes reported back to relevant stakeholders. 50 The MOL Group Sustainability Report to all stakeholders addressing HSE performance, initiatives, risks and stakeholder concerns, must be produced on an annual basis. 60 Elaboration in electronic form of Local SD reports in the context of environmental, social and economic factors, may be considered.
Recommended Business rules are italicized.

Type of regul. (Global or Local) G

Title of G/L Operative reg. HSE Communications

HSE Communications

HSE Communications

HSE Performance Monitoring & Reporting

HSE MS
Controlled document is on the CIP and SPS / HSE sites Date of Effect: 15. 02. 2008

22

HSE INCIDENT ENVIRONMENTAL STEWARDSHIP REPORTING AND INVESTIGATION

HSE LEADERSHIP AND ACCOUNTABILITY

E L E M E N T 13 .
HSE Incident Reporting and Investigation
HSE TRAINING AND COMPETENCES

HSE OPERATION ASSESSMENT AND IMPROVEMENT

Business rules for HEALTH, SAFETY and ENVIRONMENT MANAGEMENT 10 HSE incidents must be reported, investigated, analysed and mitigated in a timely manner.

Type of regul. (Global or Local) G

Title of G/L Operative reg. Incident Reporting & Investigation System

20 HSE near-misses should be reported, investigated, analysed and communicated. 30 The root causes of incidents must be identified so that actions may be taken to prevent their recurrence.

G Incident Reporting & Investigation System Incident Reporting & Investigation System (IRIS) Incident Reporting & Investigation System Incident Reporting & Investigation System

40 Corrective and preventive actions must be identified and prioritised and aim at eliminating or reducing the risk and recurrence of incidents and near-misses (all recommendations should be in the form of measurable actions with clearly-defined parties responsible and time scales for implementation) 50 High risk incidents must be investigated by a multi-functional/level team with participation and leadership from outside the Business Unit concerned. 60 Major incident investigation reports must be submitted to MOL Group EEB/BMT within 3 months of the occurrence of such incidents.

70 Information gathered from incidents must be analysed to identify lessons learned and to monitor trends, and then reported to management to improve HSE MS practices. 80 Lessons learned must be shared across the organisation with stakeholders, and others as appropriate, o prevent such incidents recurring. 90 Unsafe acts and unsafe conditions should be recorded in a hazards register and mitigations measures adopted to eliminate such actions and conditions.
Recommended Business rules are italicized.

23

HEALTH PREVENTION AND PROMOTION

HSE PLANNING AND TARGETS

HSE LEGAL REQUIREMENTS AND DOCUMENTATION

E L E M E N T 14 .
Emergency Preparedness and Response
HSE COMMUNICATION AND CONSULTATION

EMERGENCY PREPAREDNESS AND RESPONSE

Business rules for HEALTH, SAFETY and ENVIRONMENT MANAGEMENT 10 Systems must be put in place to identify potential emergency situations and their likely impact, including those on nearby operations. 20 Emergency Response Plans that define responses (including the mitigation of impacts on HSE) to predictable emergency scenarios must be documented, accessible, communicated and reviewed. These plans should define roles and responsibilities of employees and contractors. 30 Emergency response plans must be aligned with the MOL Business Continuity Management system (BCM), MOL Group business continuity requirements, and internal/external response organisations, taking into account their capabilities to respond. 40 Resources, including equipment and warning devices, required for emergency response and ongoing recovery activities, must be identified, maintained and tested at least annually. 50 Employees, contractors, visitors and external stakeholders as appropriate, must be trained in and understand emergency response plans, their roles and responsibilities, and the use of emergency response resources. 60 Emergency exercises and drills must be scheduled and conducted regularly (at least annually) including liaison with and the involvement of internal/external response organisations and other stakeholders, as appropriate. 70 Follow-ups from emergency exercises and drills must be documented, incorporated into revisions of plans and resources, and shared with stakeholders and others, as appropriate.
Recommended Business rules are italicized.

Type of regul. (Global or Local) G

Title of G/L Operative reg. Emergency Response System (ERS) Emergency Response Plans

Emergency Response Plans

Emergency Response System (ERS) Emergency Response System (ERS)

HSE MS
Controlled document is on the CIP and SPS / HSE sites Date of Effect: 15. 02. 2008

24

HSE INCIDENT ENVIRONMENTAL STEWARDSHIP REPORTING AND INVESTIGATION

HSE LEADERSHIP AND ACCOUNTABILITY

E L E M E N T 15 .
HSE Operation Assessment and Improvement
HSE TRAINING AND COMPETENCES

HSE OPERATION ASSESSMENT AND IMPROVEMENT

Business rules for HEALTH, SAFETY and ENVIRONMENT MANAGEMENT 10 MOL Group Business Unit and company HSE performance must be monitored and reported in a way that can be verified externally. Performance must be continuously evaluated to support increase in business value on the basis of approved HSE goals, targets and (leading and lagging) performance indicators

Type of regul. (Global or Local) G

Title of G/L Operative reg. HSE Performance Monitoring & Reporting

20 Annual management reviews must be conducted to determine the continuing suitability, adequacy and effectiveness of the HSE MS. Information reviewed should include audit results, incident reports, performance reports and the opinions of relevant stakeholders. Findings from lessons learned processes (e.g. behavioural observation, audits, incident investigations, near-misses, HAZOPS, etc.) must be prioritised, tracked and followed up on. 30 Compliance with relevant (national) legal HSE requirements must be assessed regularly - internally annually (unless a Group HSE audit is conducted within the same reporting year) and by an independent external auditor every 5 years. For these liability assessments annual plans must be compiled and assessments conducted accordingly. 40 HSE Due Diligence must be an integral part of any proposal for company acquisition, divestiture or merger. Such Due Diligence must identify risks and potential costs related to all HSE issues at the company concerned. 50 Risk-based Group audits must be conducted every 3 years at HSE-critical Subsidiaries and of MOL Group processes based on a pre-defined set of questions / areas harmonised with the annual Internal Audit programme. Audits may be more frequent depending on an organisations HSE risk profile and performance history. G HSE Audit HSE Liability Assessment

HSE Audit HSE Due Diligence HSE Audit Checklist

60 Performance improvement plans must be prepared, executed and continuously monitored to address areas for improvement (AFI) including non-conformities. The workforce must be actively involved in periodic self-assessments, audit findings as well as corrective and improvement actions as part of the Group Improvement Framework. 70 Based on mid-year HSE performance evaluations, Management Letters might be issued identifying areas for improvement for the relevant year with necessary corrective actions/recommendations. Such corrective actions must be implemented and recommendations followed-up on. 80 Subsidiaries must conduct annual self-assessments to establish the extent of their conformance with this Group Guideline and then send their annual HSE Assurance Letter to the GCEO, GHSE and relevant Managers Appointed-for-Control (MAC) and Divisional Leader(s).
Recommended Business rules are italicized.

HSE Target Setting & Planning

HSE SelfAssessment Management Letter


HSE SelfAssessment Management

25

5. INTEGRATION CRITERIA
This Guideline is relevant to all Business and Functional Units and MOL Group legal entities at Group, Divisional and site levels where MOL has operational control. They include: Majority owned5 and/or operated sites and activities (from exploration and planning through to closure and rehabilitation) Development (R&D) projects and divestments MOL Group management control (including construction activities prior to hand-over). The table below explains compliance requirements for all types of operation. Asset Owner 1 2 MOL MOL Asset Operator MOL 3rd Party Compliance level Compulsory Not Compulsory6 - MOL does not have operational control Compulsory - MOL has operational control Not Compulsory - MOL does not have operational control Not Compulsory - MOL does not have operational control Compulsory - MOL has operational control

3 4

3rd Party JV where MOL owns < 50% of the shares JV JV where MOL owns > 50% of the shares JV JV where MOL owns < 50% of the shares JV where MOL owns > 50% of the shares JV where MOL owns < 50% of the shares JV where MOL owns > 50% of the shares JV where MOL owns < 50% of the shares JV where MOL owns > 50% of the shares

MOL Joint Venture(JV)

JV

MOL

MOL

Compulsory - MOL has operational control

Partner

Not Compulsory - MOL does not have operational control Not Compulsory - MOL does not have operational control Not Compulsory - MOL does not have operational control Not Compulsory - MOL does not have operational control

Partner

10

3rd Party

11

3rd Party

5 Majority owned means that MOL or a Subsidiary owns more than 50 percent interest in the entity. 6 Where MOL Group does not have operational responsibility but has an equity stake, or where significant MOL Group assets are involved, this Guideline is made available to the management of operator, so that comparable HSE MS may be applied.

HSE MS
Controlled document is on the CIP and SPS / HSE sites Date of Effect: 15. 02. 2008

26

GLOSSARY
Term ALARP Definition Short for As Low As Reasonably Practicable. Reducing risks to ALARP means reducing risks to a level at which the cost, effort, time and trouble of further risk reduction would be grossly disproportionate to the risk reduction achieved. A systematic and documented review of the effectiveness of implementation of HSE processes, programs and process regulations, based on general process criteria and the professional judgment of experienced assessors.

Assessment

Annual HSE This process is a key component of HSE Governance. It is conducted annually and requires Assurance Letter sites /subsidiaries to complete an assessment of HSE performance using the Self Assessment tool. The process is aimed at measuring and recording HSE MS process maturity at organisational level. Any deviations identified as a result of completing self assessments are then tracked to closure via corrective actions. Audit A systematic, independent and documented process for obtaining audit evidence and evaluating it objectively to determine the extent to which the management systems audit criteria set by the organization are fulfilled. A deviation, either permanent, temporary, or incremental, from a currently established baseline, or anything that is or may be substituted for something else. This includes changes to personnel, processes, systems, plant and equipment, technology, documents, risks, legislation, commitments, obligations, other requirements, and external environmental, physical and social factors affecting or affected by the organization. The systematic process for dealing with changes to manage HSE risk. The process and activities related to the cessation of the operating life of an operation following a decision to close the operation which ends following abandonment, decommissioning, rehabilitation and, if required, remediation. An up-to-date documented record of the regulatory and other requirements applicable to an operation. An individual, company or other legal entity that carries out work on MOL premises or performs services pursuant to a contract for service. This includes sub-contractors as well. The sum of water effluents discharged to subsurface waters, surface waters and sewers.

Change

Management of change (MOC) Closure

Compliance register Contractor Controlled discharges to water Controlled documents

Documents pertinent to effective HSE MS planning, operations and risk control and exist to ensure continual improvement. These documents can be internal or external, and must be current, uniquely identifiable, and up-dated (with changes and revision status recorded) and can only be changed through a formal process to ensure that only current versions are

Corrective action Action designed to correct an undesirable HSE problem or defect in the management system. Examples may include breakdown of controls, non-conformance with MOL or regulatory requirements, accident, injury, illness, fire, release to the environment or other HSE-related loss, undesirable trends in HSE metrics, etc. Critical activity Critical HSE Information An activity or activities where conduct outside expected performance has the potential to result in a high risk incident. Information determined to be essential to the organization's workforce to ensure expected HSE performance is achieved and maintained. This information may include employee risks and associated controls, HSE metrics, progress on key objectives, lessons from incident investigations, customer concerns, responses to concerns communicated to leadership, etc. The whole complex of distinctive spiritual, material, intellectual and emotional features that characterise a society or social group. Information determined to be essential to the organization's workforce to ensure expected HSE performance is achieved and maintained. This information may include employee risks and associated controls, HSE metrics, progress on key objectives, lessons from incident investigations, customer concerns, responses to concerns communicated to leadership, etc. The whole complex of distinctive spiritual, material, intellectual and emotional features that characterise a society or social group.

Culture Critical HSE Information

Culture

27

Term Dangerous goods Design data

Definition Transported goods categorized by ADR that have the potential to pose a significant risk to the health and safety of people or the environment. Any information used during, or as a record of, the development of a facility that defines the resource, process, product, equipment, operation, layout or control of the facility. This may include, but not be limited to: basis of design, process flow diagrams, piping and instrumentation drawings, models, plans, single line diagrams, isometrics, construction drawings, operations and control philosophies, layout drawings, design calculations, site data, design standards, specifications (including for feed/feedstock and product), design datasheets, process media, materials, cause and effect diagrams, fire and safety studies, manufacturers data, manufacturers operating and maintenance manuals, emergency shutdown sequences and critical equipment registers. Emissions to air of carbon dioxide (CO2) from combustion of fossil fuels and from production process, from sources owned or controlled by MOL Group. Does not include emissions from transport or indirect emissions. Structured units of recorded information, published or unpublished, in physical or electronic form, managed as discreet units in the HSE management system. Most records are documents; but not all documents are records. A document becomes a record when it is part of a business transaction, is kept as evidence of that transaction and is managed within a record keeping system. A systematic, comprehensive and verifiable approach to the management of HSE issues, which is based on an assessment of their likely risks, potential legal liabilities and costs arising from the issues, and is reasonably designed and operated to control and reduce those risks and prevent those liabilities from being incurred. An abnormal occurrence that can pose a threat to the safety or health of employees, customers, or local communities, or which can cause damage to assets or the environment. An exercise intended to train people in duties and escape procedures to be followed in case of emergency. Surroundings in which MOL Group operates, including air, water, land, soil, natural resources, flora, fauna, habitats, ecosystems, biodiversity, humans (including human artefacts, culturally significant sites and social aspects) and their interaction. The environment in this context extends from within an operation to the global system.

Direct CO2

Documents

Due diligence

Emergency Emergency drill Environment

Environmental Total amount spent on provision related projects. Provision (as specified by IAS 37.): provision release a present liability with uncertain timing and amount, which will, arising from a past event, occur with high probability (greater than 50%), and will require a financial commitment. Fall Fatality Incident caused by falling off, over or onto something. Death resulting from work related injury or occupational illness, including the fatalities due to accidents caused to third parties. Company employees, contractor employees and 3rd parties to be planned/reported separately. At Group level 3rd party fatalities will not be reported externally. The number of company/contractor fatalities per 100 million hours worked. The number of fatal incidents per 100 million hours worked. Incidents involving a third party fatality are included, provided they directly result of company/contractor operations. An unplanned combustion. It includes electrical arcs that also involve a subsequent fire or evidence of combustion (flame, smoke or charring). Case that are not sufficiently serious to be reported as medical treatment or more serious cases but nevertheless require minor first aid treatment, e.g. dressing on a minor cut, removal of a splinter from a finger. First aid cases are recordable incidents. The total volume of fresh water withdrawn from the environment (surface water / ground water / drinking water) used for technological purposes. The atmospheric gases responsible for causing global warming and climate change. The major GHGs are carbon dioxide (CO2), methane (CH4) and nitrous oxide (N20). Less prevalent but very powerful greenhouse gases are hydrofluorocarbons (HFCs), perfluorocarbons (PFCs) and sulphur hexafluoride (SF6). Reported as CO2 equivalent.

Fatal Accident Rate (FAR) Fatal Incident Rate (FIR) Fire First Aid Case (FAC) Fresh water consumption GHG Greenhouse Gases

HSE MS
Controlled document is on the CIP and SPS / HSE sites Date of Effect: 15. 02. 2008

28

Term Harm Hazardous materials Hazardous process

Definition A significant and/or long-lasting adverse impact on people, the environment or the community. Substances that have the potential to pose a significant risk to the health and safety of people or the environment. Undesired, dangerous release of materials or energy (e.g., toxic or corrosive discharges, fires, and explosions) with potential for causing serious injury to people and/or significant property or environmental damage

Hazardous waste Waste featuring one or several hazardous characteristics listed in the local applicable (HW) legislation. In MOL Group HW is categorized according to source of waste production: a) arising from normal operation b) emergency events c) resulting from construction/ demolition d) from past operations. Hazards Hierarchy of control Source or situation with a potential for harm in terms of injury or illness, damage to property, damage to the environment, or a combination of these. A series of controls, which should be applied in the following order (a number of these options may be considered and applied individually, or in combination): Eliminate the complete elimination of the hazard Substitute replacing the material or process with a less hazardous one Redesign redesigning the equipment or work processes Separate isolating the hazard by collective guarding or enclosing it Administrative providing controls such as training, procedures, etc. PPE Isolating the employees from the hazard with providing and obligation of usage of Personal Protective Equipment Those behaviours that are expected to result from effective implementation of the organizations HSE MS. This includes the behaviours of employees, all levels of leadership, contractors and other non-employees with access to MOL operations.

HSE Behaviours

HSE Competence A specific combination of attributes such as HSE knowledge, skills, abilities and attitudes that is specified to perform a role within an occupation, staff position or job function providing adequate and safe assurance of successful performance. HSE Documents HSE related documents, either electronic or paper (e.g. procedures, work instructions, checklists, training tools, etc.) developed and implemented to provide HSE direction, guidance and requirements and ensure organizations operate in a safe manner and in compliance.

HSE due diligence An HSE assessment and/or audit of a potential investment, including identification of HSE risks and related costs. HSE expenditures Costs (CAPEX and OPEX) of any and all materials, assets, services and projects, which are arising from or related to ensuring compliance with HSE regulations, internal procedures or standard requirements, or can mitigate HSE risks, or improve HSE performance. HSE Impacts Any change that has adverse or beneficial effects on health, safety or the environment resulting from the organizations aspects. Some examples of impacts include toxic effects from exposure to chemicals, asphyxiation from confined spaces, resource depletion from energy usage, pollution from air emissions, and environmental release during product distribution. The process of revealing HSE non-compliances of MOL Group and assessment of expenditure need related to solving the revealed HSE non-compliances. A non-fulfilment of a requirement of a) HSE MS, policy, operational regulation and b) HSE related laws, legislation. Monetary fines levied for violating HSE related laws & regulations. Any change to the health and safety of people, the environment, the community or property, whether adverse or beneficial, wholly or partially resulting from an organizations activities, products or services. An unplanned event or chain of events that has, or could have, resulted in injury or illness or damage (loss) to assets, the environment or company reputation. Incidents do not include operations, maintenance, quality or reliability incidents which had no HSE consequence or potential. Number of HSE incidents inquired by root cause analyses (TRIPOD approach) per number of all HSE incidents.

HSE Liability Assessment HSE non-compliance HSE Penalty Impact

Incident

Incident Inquiry Rate (IIR)

29

Term In-situ remediation Job Hazard Analysis (JHA) Loss of Primary Containment (LOPC)

Definition On-site treatment of contaminated materials to reduce the source volume or concentration. It may include vacuum extraction for volatiles and semi-volatiles, air sparging or bioremediation. The job hazard analysis is a thorough, orderly, systematic approach for identifying, evaluating, and controlling the hazards of executed jobs, works, duties and operations. The uncontrolled or unplanned release of a product from a process or storage that serves as primary containment. Report separately according to the following three categories 1. LOPC Incidents that release from 10 up to 100 kg 2. LOPC Incidents that release from 100 up to 1000 kg 3. LOPC Incidents that release greater than 1000 kg Work related injury which results in a person being unfit for work at least one shift. Fatalities are included. The number of LTIs per 1 million hours worked. A document that contains information on the potential health effects of exposure to chemicals, or other potentially dangerous substances, and on safe working procedures users should adhere to when handling chemical products. Cases that are not severe enough to be reported as LTI or RWC but are more severe than requiring simple FAC. A near-miss is an incident which potentially could have caused injury or occupational illness and /or damage (loss) to people, assets, the environment or company reputation, but which did not.

Lost Time Injury (LTI) Lost Time Injury Frequency (LTIF) Material Safety Data Sheet (MSDS) Medical Treatment Case (MTC) Near-miss

Non-conformance A non-conformance is any deviation from the organizations management system. This includes deviation from MOL policy or standards, established HSE procedures, rules, regulations and voluntary commitments. A non-conformance is often an indication of weakness or a flaw in the management system that requires corrective and/or preventive actions to improve the effectiveness of the management system. Non-LTI Non Work-related injury Observation Occupational Illness A work related injury that do not require the injured person to be absent from work including FAC, MTC and RWC The injury happening to an employee during or related to not-organized work by employer. Any injury taking place when employee is transported from home to workplace and from workplace to home is considered to be non-work related injury, except the injury happens with a vehicle owned or leased by the employer. A systematic, independent and documented process for recognition of UA and UC during execution of the regular jobs by employees. A work related abnormal condition or disorder , other than that resulting from a work injury, caused by or mainly caused by exposures at work. Work injuries are caused by single event in the working environment cases resulting from anything other than a single event are considered occupational illnesses. Occupational Illnesses include acute and chronic illness or diseases that may be caused by inhalation, absorption, ingestion or direct contact. Any injury such as a cut, fracture, sprain, amputation, etc. which results from a work accident or from a single instantaneous exposure in the work environment. Conditions resulting from animal bites such as inspect or snake bites, and from one-time exposure to chemicals are considered to be injuries. All equipment (including clothing) which is intended to be worn or held by a person at work and which protects him against one or more risks to his health or safety (e.g. safety helmets, gloves, eye protection, high-visibility clothing, safety footwear)

Occupational Injury

Personal Protective Equipment (PPE)

Preventive Action An action designed to prevent or reduce the probability of occurrence of an undesirable HSE incident such as the breakdown of controls, non-conformance to MOL or regulatory requirements, accident, injury, illness, fire or other HSE related loss, etc. Procedure Process A formal and documented combination of methods, steps and actions established by an organization to achieve specific results, behaviour or activity. Any activity or set of related activities (including storage, manufacturing, use, handling, on-site transfer) and the associated equipment and technology.

HSE MS
Controlled document is on the CIP and SPS / HSE sites Date of Effect: 15. 02. 2008

30

Term Process Hazard Analysis (PHA) Product stewardship PSM

Definition PHA is application of organized, methodical approaches to identify, evaluate, and control the hazards associated with process facilities. Product stewardship is a concept whereby health and environmental protection centres around the product itself, and everyone involved in the life-cycle of the product is called upon to take up responsibility to reduce its health and environmental impact. PSM is a management system addressing all elements of the process safety to methodologically identify, understand and reduce risks related to industrial processes. Its main purpose is to prevent serious incidents like major fires, explosions or toxic releases that might affect plant personnel, off-site populations, environment or result in significant material losses. Requirements resulting from laws, regulations, judicial orders, administrative orders, consent decrees, municipal ordinances, etc. Identifying "legal" requirements means making sure the organization knows which governing bodies (national, local) have authority as related to their activities and the full extent of what requirements apply. Any work related injury other than LTI which results in a person being unfit for full performance of the regular job on any day after the occupational injury. Work perform might be an assignment to the temporary job, part-time work at regular job or continuation full-time in the regular job but not performing all the usual duties of the job. Where no meaningful restricted work is being performed, the incident is recorded as an LTI. Combination of the likelihood and consequence(s) of a specified hazard occurring undesirable HSE event.

Requirements

Restricted Workday Case (RWC)

Risk (HSE)

Risk Assessment A systematic approach used to determine the degree of risk or vulnerability associated (HSE) with identified hazards. Risk Assessment A practical tool that is used to qualitatively assess HSE and other business risks. Matrix (RAM) The result is referred to as a Risk rating. Road accident Any event with involvement of a (registered) road motor vehicle (owned or leased by employer and employees owned vehicle) during execution of working duties resulting in death, injury or damage to assets, if a vehicle was not properly parked. It is not relevant who was injured, whose assets were damaged where an event happened or who was at fault. If no death/injury occurs, material damage arising from the following categories (regardless of the repair cost) is also considered an accident. Collision between vehicles in motion. Collision of MOL driver/rider with stationary object. Non-Collision accident - events that involve MOL driver/rider overturning, spinning, skidding and/or running off the road. The number of road accidents per 1 million km driven. Any event with involvement of a (registered) road motor vehicle (owned or leased by employer and employees owned vehicle) during execution of working duties that result in material damage only (apart from the three accident categories) is considered an incident. If the fleet vehicle was properly parked occurrences resulting in damage only will be considered an incident. The number of road incidents per 1 million km driven. Geographically separated operational installation (e.g. Zala Refinery, .). In case of Logistics depots, all depots in one country are considered as one site. The same applies to Retail filling stations (all FSs in one country is one site). Therefore sites in Retail or Logistics are e.g. Hungary, Slovakia. In case of Upstream drilling activities all drilling platform is a separated site like all producing well of Upstream production activity is a separated site as well. Unintended or uncontrolled release of hazardous materials exceeding 1 cubic metre to the external environment (groundwater, surface water, soil), except spills contained in impervious containments. Detailed goals identified by an organisation as being necessary to achieve HSE strategic objectives. Targets are usually short term and achievable within a year and carry the most weight when integrated into the organisation's annual Business Plan. All targets should be realistic.

Road Accident Rate (RAR) Road Incident

Road Incident Rate (RIR) Site

Spills > 1m3

Targets

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Term Process Hazard Analysis (PHA) Total Recordable Incident (TRI) Total Recordable Incident Rate (TRIR) Total Reportable Occupational Illness (TROI)

Definition PHA is application of organized, methodical approaches to identify, evaluate, and control the hazards associated with process facilities. The number of recordable incidents (FAC, MTC, LTI, RWC). The number of TRI per 1 million hours worked (worked during the reporting period)

The number of all occupational illnesses, whether or not they resulted in LTI, disabilities or RWC.

Total Reportable The number of TROI per 1 million hours worked (worked during the reporting period) Occupational Illnesses Frequency (TROIF) Trend Analysis The process of analyzing performance data to determine and understand current and past conditions of performance used to predict and improve future results, e.g. incident investigation data identifying numerous and similar root causes.

Unsafe Act (UA) UA: a behaviour which increases unnecessary the risk for injury, damage or loss; & Condition (UC) UC: which could lead to injury, damage or loss if not corrected. Visitor Waste Work-related injury A person visiting MOL site, who is not a MOL Group employee or contractor at that site. Materials listed in applicable local legislation which are disposed of, or are intended to be disposed of or must be disposed of by their owner. An occupational injury happening to an employee during or related to organised work (during travel for work purposes, materials handling or transport, performing personal toilet, organised workplace catering, occupational health care or any other service provided by the employer during working hours), independent of its time, date and location and the degree of involvement of the (injured) employee. Any injury taking place when an employee is being transported from home to workplace or vice-versa is not considered to be a workrelated injury, unless such injury happens in a vehicle owned or leased by the employer.

HSE MS
Controlled document is on the CIP and SPS / HSE sites Date of Effect: 15. 02. 2008

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This publication is designed to provide user friendly solution in regard to the subject matter covered. To obtain additional copies of this booklet: send e-mail to petvarga@mol.hu download form HSE SPS site: http://molsps/sites/hse/default.aspx Published by MOL Group HSE 2008