SKG is conscious of its responsibilities towards its employees and towards others with whom the Group comes into contact. At all times SKG promotes safe and healthy working conditions and conduct within the working environment.

Health & Safety is an important agenda item at all Group, regional, divisional and operational board and management meetings. We recognise that a formal statement of our health & safety policy and the appropriate focus on its implementation is an essential feature of the working of the Group.

The Health & Safety Policy has an opening Declaration of Intent which notes that:
“SKG will conduct its activities in a responsible manner, taking care of the health, safety and welfare of everyone affected by its activities and minimising the impact of the business on the environment. It will be an integral part of our business and we will promote adherence to the highest standards of safety in the operation of our facilities.”

To achieve this SKG will:

• measure and benchmark health & safety performance on a continuous basis
• continually assess our processes in order to reduce risks and to seek continuous improvement in health & safety practice and performance
• maintain management systems that help to protect employees, visitors, contractors and the public from injury/ill health
• take all practical steps to develop a positive safety culture and safe behaviour throughout the Group
• include health & safety performance as an important element by which all managers are incentivised.

The elements of the policy and subsequent working standards were designed in accordance with the OHSAS (ISO) 18001 Health & Safety Management System.

The Policy document includes:

• the general requirements
• the policy statement
• planning for risk assessment and control
• implementation and operation
• checking, reporting and corrective action
• management review.

When significant accidents do unfortunately occur, each is reported and details are communicated to every manufacturing plant General Manager. In this way, experiences are shared which in turn can help the prevention of similar accidents elsewhere in the Group.

The Group has drawn up a written document covering an extensive list of Health & Safety Standards which, together with the Policy document, has been issued to every SKG site and made available to every employee via notice boards, intranet, meetings and other appropriate media.

As a minimum, induction programmes must include a review of the company’s health & safety policies and regulations, emergency procedures, escape routes, assembly points and the specific rules of the job to be undertaken. These are also given to temporary workers and contractors.

As a common practice the Company performs cross audits in Health & Safety using the in-house Health & Safety coordinators and regularly conducts briefings and training sessions to new employees.

In the specific area of employee health, an appropriate number of trained and people qualified in First Aid are designated for each site. The objectives are to be able to provide:

• initial treatment for injury or ill health until professional medical help arrives
• treatment of minor injuries which would otherwise have no treatment, or which do not require treatment by a medical professional.

Every site is required to have appropriate equipment and facilities to enable first aid to be carried out.

In addition, most sites have a medical nurse or doctor who attends for designated periods at regular intervals.
It is obligatory for each site to have a Safety Committee which must include representatives from all levels of the organisation and must be illustrated in the safety organisation chart for the business unit.
The safety meetings are chaired by the site General Manager and are required to be held on a regular basis (at a minimum, monthly for the larger plants and quarterly for the smaller plants).

There are safety coordinators at country or subdivision level who liaise with the Group Safety Manager who in turn reports to the Group VP of Human Resources.

The responsibilities of the Group Safety Manager include:

• elaboration of Group safety policy and standards
• measurement of performance through safety statistics, reviews and audits
• communication throughout the network
• development and the fostering of best practices
• provision of communication and fostering assistance to divisions and plants where needed.
• proactively identify developing best practice.

All performance reviews at plant, country, division and regional level have safety as a priority on the agenda. Annual management performance reviews include measurement of progress in safety performance against pre-agreed targets.

Since January 2008, all plants report details to Group on:

• injuries to contracted employees
• restricted workday cases
• medical treatment cases
• first aid cases
• near misses.

The Group presents annual awards to the “safest plant” and the “most improved plants” in each reporting division for their safety achievements.

While there has been progress in our health & safety performance in 2009, there continues to be clear scope for improvement.

Group-wide the accident performance statistics reflect an improvement over 2009. In accident frequency a 9.8% reduction was recorded while in accident severity the improvement achieved was 12.1%. These reductions compare favourably with a target reduction of 10% and took place in every division, except in Paper.

Latin America experienced three fatalities during the year involving employees of subcontracted companies (two in forestry activity and one during work on a high voltage electrical cabinet). One subcontracted company working in building construction in our sack plant in Poland also had a fatality, and in France a fatality occurred in our plywood mill involving one of our employees.

These fatalities are deeply regretted and are sad reminders of the need for all of us to increase our efforts in the area of health & safety. The critical importance of a safe working environment has been re-emphasised at all levels of the Group.

While target improvements going forward vary between divisions and regions, the Group commitment is to continue to improve on our previous year performance by means of an ongoing annual re-check.

Work Safety
In France, SKG employees in the Corrugated Division received a post card from their management during summer time asking for serious recommendations about safety on their return to work. An invitation was also extended for employees’ children to draw pictures illustrating safety at work. A selection of these pictures was then used to make a calendar. The purpose was to reinforce the sense of risk avoidance all the way from home.

At the end of 2009 a Safety Opinion Survey was launched in some of our plants in order to measure safety climate. This survey will permit every plant to identify areas requiring improvement and to raise the profile of health & safety. The renewal of this survey is planned on a regular basis and will enable the measurement of improvements. This safety opinion survey when completed will be released to all our plants in late 2010.