UC RUSAL Sustainability report 2016


Ethics and human rights

Management approach

UC RUSAL pays due attention to ethics and respects human rights. The Company shares the principles enshrined in the conventions of the International Labour Organisation, the Universal Declaration of Human Rights and the UN Global Compact, and applies the business guidelines in terms of human rights and the Guideline for Multinational Enterprices of the Organisation for Economic Cooperation and Development as a methodical basis for building a management system in this area.

The main documents, which set out UC RUSAL position on ethics and respect for human rights, are the Code of Ethics and the Business Partner Code; some provisions are also contained in the HR Management policy. Together, these documents define the policy of UC RUSAL with respect to compliance with and respect for human rights.

In 2016, a number of documents was adopted, including regulations on the functioning of the corporate ethics system, and regulations on corporate ethics officer, the purpose of which is to further improve the mechanisms to ensure the Company's high ethical requirements. G4-56

In 2016, Business Partner Code compliance issues were included in the Supplier Questionnaire that the counterparties must fill in before audits are conducted.

Implementation of the Company's human rights policy HKEx Appendix 27 KPI B4, B5

Human rights principles

Corporate documents

Tools and procedures for verification and response to HKEx Appendix 27 KPI  B5.2

Non-discrimination on the grounds of gender, race and/or religion G4-HR3

Code of Corporate Ethics

HR Policy

Business Partner Code

On-site audits

Hotline

Institute of corporate ethics officers

(100% coverage of the production facilities)

Abandonment of child and forced labour G4-HR5, G4-HR6

Provision of working conditions that are safe for life and health of workers, measures to prevent industrial injuries

Compliance with the regulations relating to hours of work and rest, overtime, salary, working hours, etc. G4-HR6

Compliance with the codes and regulations of business ethics and law, conducting its business without corruption; compliance with anti-money laundering legislation HKEx Appendix 27 KPI B7, G4-SO4

Code of Corporate Ethics

Business Partner Code

Implementation of measures necessary to reduce the impact of production on environment, including the conservation of fresh water to meet people's needs

Code of Corporate Ethics

Business Partner Code

Environmental reporting

Management system audits

(100% coverage of the production facilities)

Conformity of the services provided and goods delivered to the quality and safety standards HKEx Appendix 27 KPI  B6

Code of Corporate Ethics

Business Partner Code

QMS elements: quality services, supplier evaluation

(100% coverage of the production facilities)

Respect for the cultural characteristics of the countries and regions of operation G4-HR8

Code of Corporate Ethics

Business Partner Code

Assessment of the situation during the development of programmes for local communities, meetings with community representatives (100% coverage of the production facilities)

Evaluation of programmes (in Russia)

UC RUSAL pays due attention to human rights in the process of production and other activities:

          promotes respect for human rights in its own activities and the activity of its partners through the development and implementation of corporate instruments and monitoring and control mechanisms;

          conducts a periodic self-examination to determine the existence of violations of human rights in the activity of production facilities that are part of the Company (including by means of corporate ethics officers); G4-HR9

          arranges for the registration and verification of all communications from the employees or local residents to the Hotline;

          conducts investigations into the written communications from the employees to the management of the production facilities and the Company.

Human rights monitoring procedures are part of the operating standards of UC RUSAL business units and production facilities, integrated into internal documents (labour contracts, corporate policies, labour safety regulations, etc.) and in broader procedures to ensure compliance with law.

Code of Ethics and ethics officers

UC RUSAL has a Code of Ethics, which provides for the selection of ethics officers to work with employees' communication regarding work safety, compliance with labour laws, internal communication problems, and other issues. G4-HR12, G4-57

The principal task of the officers is to communicate directly with the employees in difficult situations to find a common solution and to implement it. If a negative signal is received from the employees about decisions concerning labour relations, the corporate ethics officer promptly interacts with the business leaders, the labour disputes commission and trade unions, and the company's administration develops corrective measures.

Characteristics of ethics officers

Indicators

2014

2015

2016

Number of corporate ethics officers

36

32

30

Number of communications processed by the officers G4-HR12, G4-LA16

198

156

105

Number of meetings held by the officers

230

314

198

Hotline

To work with the communications of related parties, a Hotline is organised, which can be accessed by any individual or entity, regardless of where it is located, to report a problem or violation related to the business of Company's production facilities. G4-HR12

Staff and local residents also have the opportunity to write to the Company's management. In each case, a comprehensive verification of the facts is carried out, and the results of the verification are sent to the claimant in writing. UC RUSAL ensures that all communications on the Hotline will be kept confidential. G4-58

Content of the business in terms of human rights

On the basis of the UN international practice and the Resource Guide to Corporate Human Rights Reporting UC RUSAL highlights the following aspects, in which these issues may be relevant to its business in Russia and abroad:

          law enforcement in the countries of operation, handling of complaints and communications; HKEx Appendix 27 KPI В7

          labour relations;

          the relationship in the supply chain, including the procurement of resources from areas, where conflicts occur;

          impacts on local communities, including the equitable use of natural resources, the payment of taxes, the impact of industries on health, employment and well-being of local residents in the mining and production regions.

The Company implements projects to eliminate negative impact on human rights, and in some cases involves external stakeholders for their development.

Labour relations

The Company respects and guarantees the rights and freedoms of its employees according to international law and in accordance with the laws of the country of operationHKEx Appendix 27 KPI B1

Collective bargain agreements (or similar documents) contain provisions on work and rest hours, minimum wages, social benefits, etc. The Company interacts with trade unions and other legitimate representatives of employees in an effort to address emerging issues in the negotiating process, which is the realisation of workers' right to collective associations for the protection of their rights. G4-HR4

All matters relating to the disciplinary liability or dismissal of employees must be reviewed by the lawyers of production facilities to ensure that the labour rights are not violated and the law is respected. Forms of protection of personal data of employees of production facilities have been created. HKEx Appendix 27 KPI B1

In the Russian Federation, the main source of labour law is the Labour Code of the Russian Federation (LCRF), which sets out the rights and obligations of the employee and employer, and regulates the issues of hiring, dismissal, and promotion. The LCRF prohibits discrimination in the workplace and forced labour, sets out rules for remuneration of labour, labour conditions, working hours and rest, provides for the differentiation of working conditions, depending on gender, age and the family responsibilities of employees, and other aspects. State supervision and control over observance of labour legislation by employers is carried out by the State Labour Inspectorate. All inspections at the Company’s enterprises are registered in the corporate information system and the management of production directorates monitors the timely measures taken on the production sites. HKEx Appendix 27 KPI B1 (b)

The HR Directorate, the Directorate for Control, Internal Audit and Business Coordination, and the Legal Affairs Directorate are responsible for monitoring compliance with labour legislation in business units and at production facilities. During the on-site visits, staff interviews are conducted selectively to identify violations of labour rights (including cases of discrimination, forced labour and similar). In 2016, a comprehensive audit of HR services was conducted on all UC RUSAL production facilities; there are no violations of the labour rights of the workers. G4-HR6, G4-HR5, G4-HR9, HKEx Appendix 27 KPI B4, G4-37

The prohibitions of child and forced labour are set out in the state legislation in the countries of operation. The Company included these prohibitions in the Corporate Code of Ethics and the Business Partner Code. The Company conducts regular control actions. During on-site and off-site inspections of financial and economic activities of the Company’s enterprises, as well as during individual inspections of personnel, the control directorate checks the labour contracts of personnel. No evidence of violation of these prohibitions have been identified since the establishment of the Company. HKEx Appendix 27 KPI B4 (b)

The compensation system using grades operating in UC RUSAL does not include a gender perspective in the determination of compensation, which ensures equal pay for equal work of men and women.

Human rights education, mainly in terms of compliance with labour rights, is provided to HR officers. G4-HR2

The Company adheres to the principle of diversity and equal opportunities, which is manifested in the increased representation of women in higher levels of management, and the provision of career prospects for staff at every level. For more information, please see the Corporate Governance and HR sections.

Security

The safety of the employees of UC RUSAL production facilities and contracting organisations is one of the main priorities of corporate social responsibility. The policy applies to all production facilities of the Company.Health and safety management system includes mechanisms to enable the assessment of the state of work safety and to take prompt action (e.g. audits of management systems at production facilities). The requirements for compliance with work safety standards are included in contracts with service providers. For more information, please see Labour Protection and Supply Chain sections.

All employees of contracting organisations ensuring security at UC RUSAL enterprises and facilities are subject to compulsory training under the Company's approved access and internal regulations, as well as periodical briefings. G4-HR7

Local communities

The Company implements charitable and social programmes aimed at improving the quality of life, health and education in the countries of operation. Programmes for local communities are addressed to small indigenous peoples, among other, with a view to providing them with clean water, electricity, social and health services. G4-MM5, G4-HR8

For more information, please see the Investment in Community Development section.

Results in 2016

In 2016 the Company received no communications about human rights violations at its production facilities, as well as significant conflict situations. There have also been no accidents during the reporting period that have damaged the life and health of workers and residents of the surrounding territories. There were no cases of violation of the rights of indigenous minorities. G4-MM5