Occupational Health, Safety and Hygiene

Group companies shall safeguard health and safety in the workplace and consider respect for workers’ rights as fundamental to the business (Article 6 of the Ethical Code – Human Resources).

Health, Safety and Hygiene Management complies with the principles set out in the Group’s Ethical Code and the “Group Policy for Health, Safety, Environment and Social Responsibility”, discussed in the introduction to this report.

The various topics discussed below have been divided under “Pirelli Tyre”, “Pirelli Real Estate” and “The Group’s Other Sectors/Companies”. Further information on the Real Estate Sector is available in the Sustainability Report of the subsidiary Pirelli & C. Real Estate S.p.A., on the web site www.pirellire.com.

Safety Management System

Pirelli Tyre S.p.A.

A Safety Management System organised and certified to meet OHSAS 18001 standards has long been in operation in the Tyre Sector (which also comprises steel cord production plants). At the end of 2007, there were 20 Operating Units certified to this standard out of a total of 24 units. The remaining four production units are also due to achieve certification.

The Safety Management System implemented in the Group’s production units has been developed on the basis of centrally drafted common procedures and guidelines. This has enabled the use of a “common language” within the Group, in terms of the key elements of workplace safety management and a uniform shared mode of operations.

A summary description is provided below of some practical examples of safety management.

  • Safety of machines, installations and work environments.
    Pirelli decided many years ago to adopt the same standards of safety all over the world for machines, installations and work environments as those in force in its European facilities, which are regulated by specific community directives.
    This decision has resulted, for example, in the installation of machines in the new Yanzhou (China) plant with safety features that are not required by the local legislation.
  • Personal protective equipment.
    In 2007, a project was started up to guarantee a standard level of protection in all facilities. Starting with Europe, a process is underway for the identification of equipment that will guarantee adequate levels of protection to all workers against similar risks and environmental conditions.
    This project will involve a progressive standardisation of all the non-European factories.
  • Monitoring and analysis of the priorities of all the projects associated with the improvement of safety in the workplace.
    All the information relating to improvement initiatives has been progressively centralised and, on the basis of assessments shared with all the facilities, the necessary resources have been allocated.

Main objective for 2008

The main focus will be on the reduction of accidents at work, which should see a falling trend in the frequency index (FI), as a result of the continuous improvement programmes underway.

Pirelli Real Estate S.p.A.

Given the nature of Pirelli Real Estate S.p.A.’s operations, which essentially involve “services”, a formal certification of the safety management system based on the OHSAS 18001 standards was not deemed necessary. Nevertheless, the corporate organisation has been structured in order to ensure the proper management of issues involving safety at work through: a system for the detection of potential critical situations; the setting out of the actions required for their reduction or removal; and a system for the verification of the implementation and effectiveness of the planned actions.

Following the completion of the process for the delegation of responsibilities for safety management with the associated spending powers, involving the management chains of the various Group Companies, a special awareness raising campaign (information, training, written appointment – assignment of functions – of the designated individuals - safety officers - even when not required) for the “safety officers” was launched in 2007, with particular focus on the Real Estate Affiliates whose operations involve high levels of risk. Raising the awareness of the safety officers should ensure further improvements in the actual level of accident prevention and safety at work given their role and their presence in the workplace.

Since 2006, Safety Department representatives have also participated in the Peripheral Committees for Operational Areas (solely for Pirelli RE Facility’s operational areas located throughout Italy, i.e. Milan, Turin, Genoa, Verona, Rome, Pozzuoli, Naples and Palermo) to raise awareness among all operational area personnel on issues involving Health, Safety, Accident Prevention and Hygiene at work.

Since March 2005, Prevention and Protection Managers have been present in all Pirelli RE Facility’s local operational areas (Milan, Turin, Verona, Genoa, Rome, Pozzuoli and Palermo), with a dedicated department operating centrally for the other Group companies.

In addition to receiving the legally required training, appointed personnel are constantly updated on new legal provisions and provided specific technical updates through the documentation and implementation of support actions by the Department Head.

In addition, since 2006 the Prevention and Protection Management has organised meetings with groups of labourers and project technicians from Pirelli RE Facility aimed at engaging them and listening to their opinions on issues of work safety. These meetings were also extended to several Local Trade Union Organisations to present the safety management models adopted by Pirelli RE and to raise the awareness of the workforce on the subject of prevention and safety.

In 2007, the Prevention and Protection Service continued to provide assistance, information and “proactive control” for all the company’s operational facilities.

We believe that the achievement of the best results over time in Safety and Prevention not only requires purely formal or paper based controls, but also those of a proactive and, where possible, of an educational nature geared towards the promotion of a culture of safety and prevention at work and raising the awareness of the personnel involved, i.e. safety managers, safety officers and workers.

In 2007, initiatives geared towards improving the safety at work of the operational personnel (technicians and blue collar workers) continued, together with tackling the problem of “undeclared labour” and social security contribution evasion by contractors and subcontractors working at the building sites and the premises of the customers of the Pirelli RE Group Companies.

The projects listed below, launched in 2006, were extended to all ongoing contracts and the new contracts obtained in 2007.

  • Standardisation and use of Safety Plans for Pirelli RE Facility personnel who are called to different locations as needed);
  • Standardisation and use of Safety Plans for Pirelli RE Facility personnel assigned to customers’ premises;
  • Standardisation and use of Safety Plans for Pirelli RE Facility personnel assigned to supply specific services or installations.

The three types of “Safety Plan” contain a “pull-out section on hazards” delivered to each worker exposed to such risks. This innovative means of informing workers, a relative novelty in Italy, on many occasions has been met with approval by local health authorities.

  • Safety at Construction Sites (large construction/repair sites)

• The setting up of a control and monitoring system, using specific indicators, for the safety of individual construction sites and for their compliance with safety applicable laws.

  • Prevention of undeclared work and social security contribution evasion by contractors/subcontractors.

• Establishment of a procedure for identifying and monitoring “on site” workers and trades people and regular verification of the social security compliance of the businesses operating in the construction sites.

• Since 2007, careful monitoring of the social security compliance of the contractors and subcontractors in all of the Pirelli RE Facility operational sites (collection and updating of social security compliance certifications). For the sites covered by Law 494, the social security compliance certification checks have been performed since 2006 by the Works Managers.

  • Analysis of air quality and particulate in the basement archives of the Pirelli RE Milan HQ (outcome: satisfactory). Analysis of electromagnetic pollution at Pirelli RE’s offices in Rome, located in the vicinity of radio base antennas and radio links (outcome: satisfactory).

Main objectives set for 2008

  • Improvement and structuring of the system of communication (new procedures, new regulations issued on safety, etc) between the functions responsible for company Safety and the staff appointed for their implementation (vested with the adequate spending powers). For Pirelli RE Facility, this new system will also continuously update the Employer.
  • Establishment of a computerised SAFETY DIARY, which will enable the “monitoring” and “maintenance” of all the initiatives taken to protect individual workers, i.e. details of information provided, training, risk-specific brochures for duties assigned to employees, IPD delivery, etc. This diary will also be used by the Competent Doctor to bring health surveillance as much as possible into line with the actual health risks for the individual employees.

Other Group Sectors / Companies

Pirelli Broadband Solutions

The company is implementing an Integrated Safety and Environmental Management System (ISO 14001 / OHSAS 18001), due to undergo the certification audit by the first half of 2008.

Pirelli Labs

The activities carried out in 2007 focused on the one hand on the update of the chemical risk assessment for white room operations, and on the other on the analysis of specific problems and the training of internal and external staff.

As already implemented by the Group’s operational units, Pirelli Eco Tecnology, Pirelli & C Ambiente and the other group companies are developing a Safety Management System based on the Group Policy for Safety, Environment and Social Responsibility.

As was the case for Pirelli Real Estate, no formal certification of the Health and Safety System was undertaken in the abovementioned companies. Instead, it was decided to encourage the local development of management systems that could better adapt to each facility’s characteristics, according to the types of operations conducted and their features.

At organisational level, a system of delegation for safety, with spending powers, is in place, together with structures to support local safety management.

Pirelli Labs

Researchers in the Pirelli Labs

Health & safety performance gauging

Pirelli Tyre S.p.A.

With regard to Safety and focusing on injury data recorded in production plants, there has been a substantial improvement in performance compared to 2006 in terms of the Frequency Index (FI), i.e. the relative number of injuries occurring. The Gravity Index (GI), however, worsened.

Including all the injuries occurring in tyre factories, the Frequency Index (FI) figure for 2007 was 2.52, whereas the Gravity Index (GI) was 0.51.

To better understand these data, it should be recalled that the GI was calculated by considering all calendar days between the injured person’s interruption of work and their return to the factory as “lost”, without counting the day of the accident. Holidays and weekly rest days that occurred during this period have therefore been included.

The calculation of the aforementioned indexes did not include so called “in itinere” injuries, which are discussed later in this report.

See the graph below.

Infortuni Pirelli Tyre

With regard to the Health of employees, the 2007 frequency index for new cases of occupational disease was 0.51.

Compared to previous years there was a sharp increase in the occupational diseases reported. This increase was almost exclusively concentrated in one Operating Unit, where a documentary update was performed in 2007.

Shifting the focus to injuries occurring in Tyre Sector’s non production units, considering the total number of injuries independent of the number of days lost for each injury, the following values were recorded in 2007:

FI = 1.50

GI = 0.23

In 2006, the figures for these indexes were FI=1.61 and GI=0.33, which were calculated solely taking into account injuries that involved an interruption of work of more than three days (excluding the day of the injury), and not, as in 2007, on the basis of the total number of injuries recorded.

Pirelli Real Estate S.p.A.

Including all injuries at work that involved an interruption of work, the frequency index for 2007 was FI = 0.39 and the gravity index GI = 0.39.

The figure below shows the trend of the indexes from 2004 to 2007.

Malattie Pirelli Tyre

The following initiatives were implemented in 2007 to tackle the increase in injuries:

  • Raising of awareness of Pirelli RE Facility operations area Managers and safety officers (prevention campaign for operational personnel).
  • Publication of a “Safe Driving” handbook to prevent road accidents (in itinere and non).
  • Half-year injury analysis: classification and analysis of individual injuries.
  • Onsite visits (in all cases) to the location where the injury occurred by the Prevention and Protection Department.

The Prevention and Protection Department also manages the reporting of dangerous situations by employees and by the Workers’ Representatives for workplace Safety.

The Department deals with all reports (written or via telephone) within 24 hours of their submission. The documentation certifying this “attention” to the various reports is kept in a special archive.

Other Group Sectors / Companies

In Pirelli Broadband Solutions no injuries occurred at work in 2007, whereas 3 in itinere injuries were recorded. No injuries were recorded during 2007 for Pirelli Labs.

The aggregate injury figures for Pirelli Ambiente and Corporate for 2007 reveal a frequency index of FI = 0.41 and a gravity index of GI = 0.04, a slight increase against 2006, which recorded an FI = 0.05 and GI = 0.001. Since these values are so low, no significant statistical indications can be drawn from what is essentially a stable trend.

In itinere injuries

Information on in itinere injuries (i.e. occurring during work transfers or while travelling to reach the workplace) was also collected and processed in 2007.

At Group level, a total number of 117 in itinere injuries was recorded, i.e. 3.8 accidents every one thousand workers, (4.5 in 2006). Unfortunately in one case a road accident led to the death of the person involved.

Fatal accidents

In 2007, no fatal accidents at work were recorded for Pirelli Group employees.

However, two employees employed by an external company died. One of the accidents occurred in Brazil, in the Santo Andrè Pirelli Tyre Plant, during the manoeuvring of a truck in the material unloading area, and the other in Venezuela in the Guacara plant, during maintenance work on a roof.

Sharing of experiences between production plants

All information on injuries is collected in a tailor-made IT system (injury analysis, corrective measures adopted, etc.) and, if the accident dynamics are significant, all production plants are informed and requested to: 1) internally check the existence of conditions similar to those that caused the specific injury and 2) set out any corrective actions required.

The IT system records the solutions adopted by the various production plants and shares those considered to be the best.

Awareness raising and training

Pirelli Tyre S.p.A.

As in previous years, 2007 also saw the active implementation of awareness raising and training initiatives on health and safety issues targeted at all grades of staff and designed to promote safer conduct.

The Safety Training Programme for new recruits and for those who have started working for Pirelli, in various capacities (agency workers, interns etc.), was continued in 2007.

Training for personnel with operational assignments was provided through specific sessions held both in the classroom and, especially, in the workplace. Educational tools also included operational instructions describing the typical duties of the various roles. Experience gained through risk analysis reviews and from past injuries was also shared.

In all the production plants workers have been provided training to handle emergencies.

Pirelli Real Estate S.p.A.

The delivery has been completed of the kits containing job and risk-specific brochures to all Pirelli Real Estate employees, with particular focus on Pirelli RE Facility management personnel (chemical, electrical and machinery risk).

Since the end of 2005, a regular information (bimonthly) service has been in operation, targeted at all Safety Managers and at Safety Officers in particular, for new regulations concerning Safety, Prevention, Protection, Environment and Management of Property assets.

Specific information brochures will also be distributed on a regular basis, aimed at raising the awareness of operational staff and safety officers in relation to safety and prevention at work (the first of these was issued in December 2005, entitled “Global Service and Laws 626 and 494: Safety in Maintenance Work”).

The programme of providing information kits (launched in 2005) consisting of various brochures to new recruits continued.

In 2006, a “safety” intranet accessible to all employees was created, containing 60 means of information, prevention and protection, some of them highly innovative, geared specifically to labourers, safety officers and project managers.

In 2007, the information, prevention and protection instruments in the “safety site” increased from 60 to around 100.

The site is structured as follows:

  • Information and training: contains risk fact sheets for all jobs in the Pirelli RE Group, and also for work in brownfield areas; the coordination of works conducted in buildings and installations; the coordination of works at construction sites; and a guide to safe driving.
  • Work procedures.
  • Safety in construction (tender contracts under Article 7 Legislative Decree 626/94).
  • Safety at construction sites (sites covered by Law 494).
  • Management and Safety of Properties (also contains an operational fire prevention manual for “Property Managers”).
  • Operating standards for employees of Pirelli RE Facility (analysis of various work risk situations and the hazards of drinking alcoholic beverages on the job).
  • Work equipment fact sheets (a guide to purchasing, safety hazards, prevention and protection, user instructions, and IPDs for the use of equipment).
  • Safety plans for Pirelli RE Facility operations.
  • Technical standards (including a specific provision relating to asbestos risk produced “in-house” to make it as relevant as possible to the Group’s actual operating conditions).
  • Safety News: a list of the legislative changes in the field of safety, accident prevention, occupational hygiene and property management.

Other Group Sectors / Companies

Safety is also a central element of employee training programmes in the other Group sectors / companies.

In 2007, training organised in the abovementioned companies involved, among others, safe working practices in laboratories and during experiments, with a particular focus on training and information campaigns for new recruits and external personnel.

Health & safety investments and expenditure

The most significant investments in 2007 were recorded by Pirelli Tyre.

In 2007, investments in health and safety by Pirelli Tyre reached a total of around 7 million euro.

Investments involved the improvement of machinery and plants and, more generally, the overall work environment (i.e. improvement of microclimate and lighting conditions, layout changes to improve operating ergonomics, measures to ensure the healthiness of infrastructures, etc.).

These investments were accompanied by safety related expenses essentially attributable to work environment monitoring (i.e. sampling and analysis, consultancy studies, etc.), purchasing of personal protection equipment (e.g. injury prevention shoes, gloves, safety eye-glasses, etc.) and collective protection devices (e.g. better protection of machinery, suction systems and measures to improve the workplace environment not covered by specific investment projects).

Healthcare assistance during working hours

For decades Pirelli has had infirmaries operating in its production plants, with nurses and doctors available to provide employees with medical care during working hours. These facilities provide first aid care, consultancy on non work-related health problems and health supervision for workers exposed to specific risks.

Healthcare promotion campaigns developed in line with local programmes also make use of these facilities.

Group flu prevention campaign

Again in 2007, Pirelli gave its workers the opportunity of being inoculated free of charge with the seasonal anti-flu vaccine.

In 2007, the anti-flu campaign was given further impetus through wide reaching information tools targeted at all organisational levels (involving southern hemisphere workers in the spring and those in the northern hemisphere in autumn).

Several thousand people took part in the initiative.

Group Policy “No Smoking Company”

In June 2003, a letter sent by the Top Management to all the Group’s Chief Executive Officers announced the corporate decision to become a “No Smoking Company”, to safeguard the health of both smokers and non smokers. This decision was consistent with Pirelli’s long-standing policy of protecting the health of its employees in every country where the Group operates.

Specific training/information initiatives on the damage caused by cigarette smoke were also implemented through the distribution of leaflets, organisation of conferences on nicotine addiction and publication of questionnaires on smoking on the Company’s Intranet System.

The verification of the implementation of the no smoking policy also led to reports of 55 breaches of the policy by staff on Pirelli premises.