Report of the Directors
Business Review


Safety Performance in 2012/13

Johnson Matthey actively monitors all accidents, safety related incidents and EHS learning events. Detailed statistics are compiled monthly at group level and used by the Chief Executive’s Committee and the board at their regular meetings to review safety performance. All accidents are thoroughly investigated to determine root causes and appropriate preventative and corrective actions are assigned. The group’s rate of occupational accidents involving lost time is shown in the Health and Safety Performance Summary table and its five year performance is presented in the graphs to the right. Details of our methodology for calculating accident statistics is described in Basis of Reporting – Non-Financial Data.

In 2012/13 we achieved our lowest ever reported number of lost time accidents, which was 50 for the year, but the total number of accident days lost per 1,000 employees increased from 90 days to 137 days. The rate of all accidents with lost time reduced from 6.00 (restated) per 1,000 employees in 2011/12 to 4.97 per 1,000 employees in 2012/13. However, our greater than three day lost time accident rate per 1,000 employees increased this year to 2.68 compared with 2.38 (restated) in 2011/12. Another internal measure of safety performance is the number of accidents that result in lost time per 100,000 hours worked. In 2012/13 this accident frequency reduced slightly from 0.29 (restated) to 0.25.

The health, safety and wellbeing of contractors who are working on our sites are of equal importance to those of our employees and the group has safety performance metrics specifically for contractors, similar to those for our employees. These temporary workers are engaged typically to cover periods of long term sickness absence or maternity leave, or to manage seasonal variations in workload.

This year we reported nine lost time accidents for contractors’ accidents (2011/12 eight), of which six resulted in greater than three days lost time (2011/12 three). This is equivalent to an annual total lost time accident frequency rate of 0.31 accidents per 100,000 hours worked per year (2011/12 0.27 accidents per 100,000 hours worked per year).

Creating a Zero Accident Culture

For Johnson Matthey any accident is unacceptable and our Sustainability 2017 target is to achieve zero accidents that result in more than three days’ lost time. In 2012/13, 73% of our facilities achieved zero greater than three day accidents and in April 2012 the group achieved a continuous period of 79 zero accident days. This is a record for Johnson Matthey and gives us confidence that our zero accident aspirations are achievable, however, the challenge remains to find ways to maximise and sustain our zero accident periods.

As we work towards making our zero accidents target a reality, we are focused on improving the safety of our plants and processes and the effectiveness of our assurance systems. However, we believe that achieving our target will rely on the contribution of everyone in the business in demonstrating behaviours that make our systems work in practice and that promote a strong environment, health and safety culture.

This year we have made good progress across the areas of process and plant safety, assurance and EHS culture. Our process risk management (PRM) programmes are centred on understanding and minimising the risk of low frequency, high severity safety incidents. We have continued to develop best practice and drive improvement in process safety systems across our operations and during the year we completed a full process safety audit at one of our UK facilities. Our European process safety experts group met twice which provided opportunities to discuss best practice, learning from incidents and new regulatory requirements. Plans are underway to form a similar group, and conduct an initial audit, in North America during 2013/14. We also plan to roll out our PRM programmes, including establishing a process safety experts group, in Asia over the year ahead.

Fire is one of the biggest risks across Johnson Matthey’s operations as many of our manufacturing processes involve heat and / or the use of flammable liquids and gases. In order to better manage fire risk at our operations we held a dedicated training seminar in Royston, UK in February 2013. It was attended by over 30 representatives from our European facilities and also involved input from XL, our insurance company. Focused on pgm related fires and pressurised gas safety, the seminar examined the systems in place at each facility to prevent, control and mitigate these types of fires and explosions. A seminar will be held in North America during June 2013 and plans are underway to consider running similar seminars in Asia thereafter.

Sound assurance systems form the basis of continued improvement and during the year we completed a review of the group’s EHS audit programme and supporting protocols. Ideas to streamline the process, whilst retaining adequate levels of EHS assurance, are being developed. At present, our process involves external observation at regular fixed intervals to ensure EHS standards are being properly maintained. A revised system may introduce additional metrics and self audit which can be used by sites to provide self assurance which will then be considered during EHS audits. Following a transition period, this type of process should provide an opportunity to schedule EHS audit visits more accurately on the basis of risk, rather than solely on the basis of hazards.

Following their introduction last year, annual audit action reviews are now an established component of the assurance programme for all our sites. In 2012/13 29 full assurance audits were undertaken across the group supported by 25 audit action reviews.

In 2011/12 we piloted a behavioural safety programme to improve safety culture at our Redwitz site in Germany. Based on the success of the pilot we have continued to develop and expand this culture change programme within Johnson Matthey. Through reviewing appropriate research, lessons from incidents across the group and across our industry peers, and with input from our employees, we have developed a standard that defines the critical behaviours that characterise a robust culture of environment, health and safety. The standard was further refined using learning and input from pilot programmes and validation exercises in Europe and North America. Called ‘Our EHS Culture’, this standard will be used as the basis for Johnson Matthey’s EHS culture improvement initiatives and work is underway to implement the standard across the group during 2013/14. The standard will provide the framework for building an even safer working environment and help everyone in Johnson Matthey to better understand the behaviours to display and avoid as we work to strengthen our safety culture.

With safety performance having somewhat plateaued in 2012/13, reinvigorating our safety programmes is the key priority for the year ahead. Our EHS Culture is an exciting programme which has delivered positive results from the pilot exercises and provides the opportunity to further engage our people in achieving a zero accident workplace.

Safety Priorities for 2013/14

Our focus is to promote the prevention of major accidents and continue to work towards achieving our target of zero greater than three day accidents. Wider implementation of our EHS culture improvement programme pilot will be critical in accelerating our progress, whilst fire risk management and process safety management (including relevant PRM audits) are key to minimising the risk of a major incident. We will continue to support our businesses in other key areas of safety improvement and provide an appropriate level of assurance to the Chief Executive’s Committee and the board.

The key activities for 2013/14 to address safety improvement through the group’s ten year EHS strategy are:

Our EHS Culture

Risk Management

EHS Assurance

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