Social policy

SOCIAL POLICY GOALS AND TASKS IN THE AREA OF PERSONNEL

The strategic goals of MMC Norilsk Nickel’s corporate social policy are defined in the Concept for the Company’s Social and Economic Development through 2015, which envisages, in the section devoted to personnel management:

• Creation of a system for regulating labor relations and development of a social partnership based on a balance of the interests of employees and the Company;
• Improvement of the staff incentives system; providing employees with a competitive compensation package linked to labor productivity growth and collective and individual performance;
• Personnel development (selection, hiring, evaluation, training, advancement) to ensure that the Company is staffed by personnel with the necessary professional skills and qualifications;
• Improvement of OHS including safety measures and equipment; improvement of social services at the work place; providing workers with additional opportunities for health improvement;
• Development of corporate culture; ensuring social stability and a healthy psychological environment for staff;
• Development of corporate programs for the social adaptation of personnel during the restructuring of the Company.

Approaches to implementing personnel management policy

The social policy of MMC Norilsk Nickel is developed and implemented on a systemic basis in accordance with the Company’s regulations. The strategic goals of MMC Norilsk Nickel’s corporate HR- policy are defined in the HR-Strategy which was adopted in December 2007.

To achieve its current and long-term development goals, the Company designs programs for working with personnel.

The programs for working with personnel are intended to shape and motivate the work force in accordance with the Company’s current and future goals. The main goal of the programs is to increase the overall effectiveness of the business and create the conditions for its sustainable development. Additionally, these programs are intended to solve problems, whose impact is primarily social in nature.

The development of each program is preceded by a comprehensive analysis of specific problems and an assessment of the most acceptable approaches to solving them both from the social point of view and the standpoint of the Company’s commercial interests. A normative document (regulation, provision, instruction) is drafted for each program showing the goals and tasks, describing the mechanism for their implementation, and containing the methods for assessing their effectiveness, information content, and the justification of expenditures on their realization. As a rule, the programs are initially launched as pilot project, during which their main elements and parameters are developed.

To ensure the timely discovery of shortcomings in the mechanism for implementing the programs, the Company continuously monitors the process, thereby receiving information on the achievement of the stated goals. The monitoring is based on confirmed indicators and regular surveys of personnel. The results of the analysis and assessment of the programs’ effectiveness are used to develop recommendations as to how the programs might be improved and developed.

Human rights

MMC Norilsk Nickel is committed to the observance of human rights as stipulated by the Constitution of the Russian Federation and Russian legislation, so as in the countries where Company is conducting business. Based on the principles and norms of international law, the legal regulation of labor relations and other associated relations is carried out by the Company in accordance with the standards of the International Labor Organization and current Russian law.

The Company observes the right of workers to associate in organizations of their own choice, which is an inalienable element of the right to free associations and the freedom to conduct negotiations.

Under the Agreement for the Regulation of Social and Labor Relations at companies of the Norilsk Nickel Group in 2006-2008, Group companies, when drafting and approving local regulations, collective contracts and labor contracts, assume the obligation to voluntarily observe the following basic principles: not to allow any form of discrimination or forced labor, ensuring that every worker has equal opportunities to realize his/her labor rights, regardless of sex, race, nationality, origin, financial status, age, place of residence, religious orientation, political convictions, or other circumstances unrelated to his/her professional qualities.

The Company guarantees all workers equal opportunities to realize their potential, to impartial and fair evaluation of their performance, and to selection and advancement based solely on their professional abilities, knowledge and skills.

MMC Norilsk Nickel does not employ workers under the age of 16 and observes the Russian Federation Labor Code’s prohibition against allowing workers under the age of 18 to work in hazardous and/or dangerous work conditions.

The company does not use forced labor, and strictly observes the inadmissibility of employing women to work in the difficult and dangerous conditions of the mining and metallurgical industry. 

The Company uses a preventive system to discover and, where necessary, eliminate violations of the social and economic rights of workers. The system includes commissions who handle individual labor disputes at production units, with decisions made by members representing labor and management on a parity basis. Workers who believe their labor rights have been violated may appeal to the commission, whose decision is binding upon the employer.

Social partnership

The Company’s social partnership system is based on the following fundamental principles:

• Equal rights of the parties;
• Consideration of mutual interests throughout the decision-making process related to various aspects of the Company’s business;
• Strict compliance with national social and labor law and local regulations;
• Voluntary acceptance of obligations and strict fulfillment of them;
• Consideration of all problems on the basis of constructive dialogue.

Employees’ organizations and social and labor relations regulation

The Company recognizes its employees’ right to associate and establish organizations to represent their interests as an inalienable element of the right to freedom of associations and freedom to negotiate.

The Company has a system for representation of employees’ social and labor interests. Social and labor councils (SLC), production boards and other bodies authorized by employees to represent their interests (social and labour councils, youth associations, women’s movements, sport counsels, etc.) act on behalf of all employees. Trade union members are grouped into two large unions: the Association of Trade Union Organizations, and the Trade Union Federation of MMC Norilsk Nickel. Labor NGOs thus represent the interests of virtually all employees, whose primary place of work is the Company.

Over the past decade, the Company has accumulated experience managing social and labor relations between the employer and employees using collective bargaining agreements. Local regulations governing the provision of social guarantees to workers also apply to the Group’s companies (e.g. the Social Responsibility Code was adopted by Norilsk Telecom LLC).  

Apart from statutory benefits and reimbursements workers are provided with additional guaranties in accordance with the Company’s Collective Bargaining Agreement, as well as under social schemes initiated by the employer. In particular, there is execution of pension plans, reimbursement of vacation travel costs, and the funding of health resort treatment for employees and health improvement for their children during summer holidays, and various other OHS guarantees. 

The Company’s Collective Bargaining Agreement Commission is a standing social partnership body, in which management and labor are equally represented (eight members each). During 2007 those commissions resolved key social and labour issues. In particular, the Collective Bargaining Agreement Commission of MMC Norilsk Nickel made 84 decisions, including 22 on the key corporate issues (improvement of occupational safety system, replacement of milk distribution with monetary compensation, industrial injuries, misappropriation, social programmes, Accrued Equity Pension, etc.) and 62 – on individual applications of employees.

In order to consolidate the efforts of management and labor aimed at developing and implementing effective decisions on key aspects of the Company’s operation and development, various collegial bodies have been established. The OHS commissions, where labor and management are represented on a parity basis, are one example.

To further improve social partnership mechanisms and give due consideration to the views of the staff of MMC Norilsk Nickel’s companies, employees have organized, with the employer’s support, social and labor councils (SLC) representing the interests of all workers.

To consolidate employees’ positions throughout the Norilsk-based companies of MMC Norilsk Nickel, the Corporate Social and Labor Council (CSLC) was established. The CSLC includes representatives of the employees at all the major Group companies located in Norilsk (approximately 55,000 workers).

In order to develop the system of intracorporate communications between employers and staff, the regional Corporate Forum of the Norilsk Nickel Group of Companies is held annually. The Agreement on the Regulation of Social and Labor Relations at the Norilsk Nickel Group of Companies in the City of Norilsk and the Taimyr Autonomous Area for 2006-2008 determines the basic standards for social and labor relations between the employer and employees for all Group companies in Norilsk and Dudinka. The agreement sets forth unified fundamental principles of corporate social policy intended to promote long-term, stable development of the companies and suitable living conditions for employees. The agreement also sets forth the principles for relations between the companies of the Norilsk Nickel Group in the main areas of social policy, such as personnel development, salary, work and vacation schedule, and occupational health.

In December 2007 the National Inter-Industry Association of Employers “National Association of Nickel and Precious Metals Producers” was established, with 20 companies of the Group being its founders. The first task of the Association was to develop a cross-industrial Agreement on the regulation of social and labour relations on the national level.

MMC Norilsk Nickel’s intracorporate communications system is constantly being improved. One example of this is the network of reception rooms for production, social and labor issues, a key element of the system.

The reception room network consists of the Central Reception room and 21 reception rooms at the Company’s major business units, promoting partnership and cooperation between the Company’s management and employees and communications on issues of importance to employees.

The reception room network performs the following functions:

• Informs employees of the Company’s current and future goals and objectives;
• Ensures feedback on the efficiency of decision-making;
• Reviews specific issues and proposals and communicates information on steps taken;
• Gives due consideration to employees views when drafting management decisions.

In February 2007 the Group conducted the regional Corporate Forum of the Norilsk Nickel Group of Companies in Norilsk, where the results of labour and social relations development in the Group for 2007 were finalised, and plans for 2008 were developed.

PERSONNEL AND CORPORATE CULTURE DEVELOPMENT

Personnel development

The Company devotes considerable attention to the development of personnel and corporate culture. Efforts in this area are aimed at providing an efficient staff based on the discovery, development and maximum realization of the labor and creative potential of all employees, while giving them a sense of corporate solidarity and commitment to the Company’s interests.

To achieve this, the Company uses state-of-the-art technologies for the professional training of personnel, the selection and adaptation of younger employees, the search for highly qualified professional staff, the training of personnel reserves 1 , work with targeted personnel groups, and the development of internal communications.

Diagram 2.



Professional training system

The Company considers investment in professional training of its staff as an imperative to ensure long-term competitiveness, dynamic development, a higher value of human capital and, eventually, an increase in the Company's capitalization. Good quality professional training is not limited to ensuring sufficient personnel qualification to meet operational needs only.  It also enhances dedication and commitment of the Company’s employees, creates a favourable social and psychological environment in work teams and has a direct positive impact on corporate culture.

The Company uses a systematic approach to professional training, involving identification of training needs according to professional skills standards, training planning, process monitoring and valuation of the results. Our staff has training plans which include evaluation and certification of personnel, project training, new technology implementation training and creation of a personnel reserve.

Diagram 3.



The Company intensively uses video conferencing in its training programmes.  It allows us to involve famous scientists, advisors and leading specialists in the training process wherever our students might be located. The corporate distance learning system (DLS) was further developed with its library embracing 60 distance learning courses and computer simulators. At the end of 2007 the registered users of DLS amounted to 1,991 persons including 684 persons in the Head Office (Moscow), 890 persons in the Taimyr Peninsula (Norilsk), and 417 persons in the Kola Peninsula (Monchegorsk, Zapolyarny).

To enhance its competitive advantages with regard to personnel development in accordance with the corporate standards that determine the level of professional training that is necessary to achieve the strategic tasks of the Group, the Company continued developing the Norilsk Nickel Corporate University (figure 4.5.), a private educational institution for advanced professional education (advanced training). The University was granted licences for education in 240 jobs, for the professional training of specialists under 38 programmes and 7 lines of training in management, finance, IT, etc. and state accreditation with a right to issue state-recognised degree documents.     

Management reserve development

The Company sees employees with in-depth knowledge of production and a good work record as the core of its future HR potential and reserve.

We operate an internal management reserve training system, involving annual selection, through open contest, of the most talented employees as management reserve at the following three management levels: lower-tier managers (foremen), mid-tier managers (section or workshop foremen), and top-tier managers (directors, deputy directors of the Company’s business units). To ensure the efficiency of the reserve size and related training costs, at all levels reserves are formed not by individual position, but by groups of similar positions based on three-year job opening forecasts. During three years, employees in the management reserve undergo comprehensive multilevel managerial training, and are promoted to managerial positions based on their performance. The reserve management method adopted by the Company annually reviews the number of participants and extends the arrangement for another year. This method ensures a high utilization rate and regular movement of employees from the bottom up.

Each employee assigned to the reserve has a development plan that provides for comprehensive management training over three years and, based on results, appointment to vacant managerial positions.

Corporate culture development

As part of its corporate culture development, the Company pursues a policy of fostering a spirit of mutual respect, corporate loyalty and commitment among its staff, as well as pride in the results of their work

The main objectives of the Company’s policy in this respect are:

• Developing corporate business ethics;
• Improving staff identification with the Company based on corporate symbols;
• Arranging corporate events aimed at team building and bringing together all our people, regardless of their position in the Company.

Norilsk Nickel’s Ethics Code underpins corporate culture development.  The Code aims to create an atmosphere of trust and mutual respect in work teams, to promote productivity.  The Code sets the expectations for employees’ personal qualities and behaviours with which our staff should comply.

The Company’s Code of Ethics is based on the principles of observance of overriding human values, and mutual assistance and respect, in order to create an atmosphere of mutual respect and trust among all employees. The Company assumes that the work and behavior of labor and management will, under no circumstances, deviate from high professional and moral standards. The Code of Ethics provides for mechanisms to carry out the principles it contains. Violations of the Code of Ethics are reviewed by the relevant commissions, which are empowered to take appropriate measures.

In 2007, 3,528 employees of the Group entities received awards for top performing results and long years of service, including 9 receiving state awards, 267 receiving sector awards from ministries and agencies, 221 receiving regional and local authorities awards, 3,031 receiving corporate awards.

The Company arranges corporate celebrations, cultural and sports events which play an important role in team building, fostering corporate loyalty and pride in the Company's achievements and employees’ physical and cultural development.  

Corporate events are conducted on a regular basis. Company Day occupies a special place in the hierarchy of annual company-wide events and the best performers from all company enterprises attend the festivities. The Company Day event is used for rewarding the highest performing employees.

In 2007, according to MMC Norilsk Nickel Corporate events calendar and Group entities plans, there were held festive and sports events and events for kids attended by more than 190 thousand employees of the Group entities and their family members.

In 2007, the Company continued to support the initiatives of the target personnel groups ² that contribute significantly to the achievement of production results, the shaping of the Company’s staff potential, and corporate culture development. In 2007, about 57,970 employees of the Group entities were involved in various educational, contesting, cultural and other events of the Group; 14,146 of them were involved in events organised by participants of “Woman’s Outlook”, more than 13,000 employees took part in the events organised by YPM “Leader” (YPLM).

Given the significant proportion of young people among our staff, we focus on their development. The Norilsk Nickel Smart and Clever Club is another successful initiative.  Its membership includes over 300 young specialists. 11 teams from various entities of the Group participate in the club events. In November 2007, the V Corporate Festival of the Merry Norilsk Nickel Club was held in Norilsk.

Sport activities.

An important tool of corporate culture development is promotion of sport, a healthy lifestyle and fitness among the Company’s employees as a means of enhancing their productivity and efficiency. This is especially important for people who work in the severe climate of the Far North, combined with the impact of specific production conditions.
Corporate-wide sports events are organised by the Council for Promoting Physical Education and Sports at Norilsk Nickel, its subsidiaries and associated companies. The Council includes Company managers and representatives of Sports Associations and Administrations of the regions where the Company operates.

The Company regularly holds corporate sport competitions in which the teams of the Company, its subsidiaries and associates and local teams take part. Competitions include cross country skiing, track-and-field athletics, mini-football and volleyball. According to the Corporate Sports Council Calendar, in 2007 there took place five corporate competitions: Norilsk Nickel Skiing, race to celebrate the Metallurgist Day, family competition “Daddy, Mummy and Me: A Sports Family!”, mini-football and basketball tournaments that involved 10,500 people and 124 teams.

Corporate sports events give a new momentum to the development of mass sport both at the Company’s enterprises, subsidiaries and in the areas where it operates overall. More and more local people get involved in regular physical exercise and sports and begin to adhere to a healthy lifestyle.

Childhood and youth

The Company develops childhood and youth programs, among them are Chilgren Club, School Labour Teams, Road to Tomorrow competition and others. One of the most important motivation and corporate culture elements of MMC Norilsk Nickel is the “Kids Club” programme. In 2007, within the scope of the project the Company continued the efforts aimed at developing creative capabilities of children and teenagers living in the regions of the Company presence, building a positive image of the Company among them and motivating them to choose a career in the Company.

The Kids Club conducted a creative contest “Route to Tomorrow”, prepared and published an annual book for first-year pupils, provided assistance to social protection institutions for children of the Norilsk Industrial District, engaged in editing and maintaining the corporate website http://www.nickelca.ru/, prepared and conducted the corporate New Year party for the children of the Company employees, organised and delivered 41,947 children’s New Year presents to the Group entities.

Information on the competition and other youth and children programs can be found at the Company’s website for children www.nickelca.ru. This portal won the most respected Golden Site 2007 web-competition in the Social and Charity Projects nomination. This year more than 840 participants competed for the prizes. Nickelca.ru project was rated among the top ten in the “State and society” nomination, with more than 90 sites participating.

REMUNERATION AND MOTIVATION

Interrelated and complementary elements, such as remuneration, moral incentives, professional and career development, play a key role in the Company’s personnel incentive system.

The key element in the personnel motivation system is remuneration, which the Company bases on a comprehensive policy with the following main principles:

• Strict compliance with Russian law; adherence to all government standards for the Far North, and the Collective Bargaining Agreement;
• Payment of all salary and salary-related taxes and insurance premiums related to state pensions, medical and social insurance for employees in full and in a timely manner;
• Employees’ salaries depend on the productivity and the results they achieve;
• In order to ensure the hiring and retention of personnel with the necessary professional skills and qualifications and the motivation to work effectively, Company’s policy, that determines salary levels, rests upon the concept of attractive salary that is competitive on local labor markets.

Remuneration and social package

The compensation package includes the following basic components (see picture 4.7):

• A salary consisting of:
  • Base salary (including surcharges and allowances for labor conditions, payments in accordance with regional coefficients and northern allowances for length of service in the Far North and equivalent locales, sector allowances for successful restructuring work, payment for time not worked, etc.). The share of this component is more than 60 %.
  • Regular bonus (12%);
  • Bonuses for collective and individual performance (18%);
• A social package that includes statutory benefits and reimbursements and those provided for by the Collective Bargaining Agreements, additional encouraging bonuses provided under the respective social programs (the share of this component is a little bit more than 9%).

Salary

Salary payments to employees are based on a system of gradations that differentiate and balance base salaries, depending on the level of qualifications, the degree of responsibility, and the complexity of the work.

Employees of companies located in Far North and equivalent areas, receive, in addition to base salary, payments based on regional coefficients and northern allowances.

Regional and northern allowances together account for about 60% of all salary-related costs in total wage fund of companies located in Far North and equivalent areas.

The Company’s personnel (including top management of the Company and its business units) remuneration policy links the payments to key parameters of collective and individual performance: growth in production volumes, productivity, reduction in planned production costs, reduction of non-production use of resources, OHS, work discipline, compliance with corporate culture rules, etc.

A most important target of the Company’s remuneration policy is ensuring personnel motivation to highly productive labour by achieving a competitive level of salaries and making effective use of the payroll funds.

The Group strives to constantly improve the employee reward systems accentuating the link between input from an individual employee to the overall output and his/her remuneration.

In 2007, the business units of Norilsk Nickel Group continued to realize staff performance management system that aims at improving the evaluation of personnel performance taking into account their individual input in increasing production efficiency, additional incentives for staff and improvement of individual responsibility of the staff for carrying out the current and strategic tasks of the Company.

New elements of personnel motivation were implemented to raise labor productivity and efficiency project activity, stimulate implementation of measures to ensure the security of the Company’s assets, strengthen individual and collective responsibility for meeting occupational health and safety standards.

Social package

The Company’s social package consists of employee benefits and payments, including the following main items:

• Discount trip vouchers for health resort treatment and vacation for workers and their families;
• Payment for employees of northern companies and their families of travel and luggage expenses to and from vacation sites once every two years³ ;
• Additional pension insurance.

In addition to benefits applying to all employees, the Company offers a supplementary social package to the best employees – those who achieved the strongest results. These benefits are provided under a number of social programs: Additional Corporate Vacation Payments for Transportation, Joint Social Pension, Soft Loans and other (in more detail these programs are described in Social Report of MMC Norilsk Nickel for 2006).

In 2004-2006 the beneficial lending program for best employees who successfully completed the challenging selection process and signed special-term labor contracts operated in pilot mode in the Polar Division. In 2007 it was rolled down to branches, subsidiaries and associates of the Company located in Norilsk and TMD.

Social programmes

Employee benefits provided for by social programmes represent free-will obligations of the Company to enhance social security of the employees and provide risk insurance. Social programmes are an inherent part of social package of staff or staff groups. As a rule social programmes as special-purpose and long-term projects are implemented in addition to the Collective Bargaining Agreement and extend the range of social benefits provided to the employees at the initiative of the employer.

Diagram 4.

The exact list and terms of programmes in effect at specific enterprises depend on regional and country specifics.
If we consider the regions of Russia, the system of social guarantees and benefits is best developed at the main companies of the Group located in the Far North.
The future tasks include harmonisation of social policy, implementation of common corporate personnel policies and standards and social programmes based on regional and country specifics at all the Group companies, including overseas assets.

Pension programmes

During the recent decade pension benefits were in the focus of attention of the Company’s management and personnel. Over this period several programmes have been developed and adopted that provide for post-retirement benefits for the pensioners of the Company. As the Company accumulated experience in implementing such programmes, taking into account the results of the Pension reform in the RF and the development of the pension services market, the Company was getting ready to form a corporate pension system that is based on the principles of accumulation and joint participation in the accumulation of pension funds of the Company and the staff. 2007 was a milestone for laying the foundation of this system.

In the summer of 2007 the new accrual-based corporate joint pension programme was launched – Accrued Equity Pension (AEP). A specific feature of the new long-term programme is its accessibility for each employee regardless of his or her age and record with the company. During the first six months of the programme it was joined by 3,779 employees of the entities located in the Norilsk Industrial District (the Polar Division, LLC NSC, LLC PCC, LLC NNR, OJSC NTEC) and 1,583 employees of OJSC KMMC.

The implementation of corporate post-retirement option programme started in 2007. In order to improve staff motivation for high production and financial performance based on the Company’s performance results in 2006 management decided to transfer part of personnel remuneration amounts to their registered pension accounts with Norilsk Nickel Private Pension Fund. The pension contribution (option) was made by the Company to the benefit of employees who have made their choice and expressed their readiness to participate in the development of additional pensions by entering into pension agreements with the Private Pension Fund. During a short time period the corporate post-retirement option programme embraced more than 60 thousand employees of the Company, its subsidiaries and associates with the programme coverage at the participating entities reaching in average about 90%. Late in 2007 decision was made to reward the staff in a similar manner based on 2007 performance results.

Recuperation programmes

For many years the Company and its subsidiaries have offered health resort rehabilitation and treatment for employees and their families with funds allocated from the social budget to compensate the employees for a significant share of the cost of resort holiday packages. Health resort vouchers are distributed based on the applications filed and medical reports provided by the social insurance commission that is guided by the Regulation on distribution of health resort vouchers for employees and their families.

In 2007 new recreational opportunities were offered to the employees. A number of Group entities commenced pilot implementation of Health Programme to create additional recreational opportunities for employees taking into account their individual needs in health survey, acquisition of expensive medicine or the purchase of fitness membership cards, etc. Under the programme terms, every three years an employee receives the respective compensation to use for vacation purposes regardless of whether he or she intends to spend it in Norilsk or in the “mainland”.

Norilsk Nickel takes an active part in resolving the priority local development tasks acting as the partner of regional and municipal government authorities under the programmes aimed to improve social infrastructure and enhance the quality of services in housing, social and cultural sphere.

The key forms of assisting the local development are:

• Social investments in the projects to modernise and repair social infrastructure facilities, including those financed jointly with the government on a parity basis (public private partnerships), and in long-term programmes or cooperation with educational, creative, cultural and sports organisations;
• Financial and organisational support to events initiated by the beneficiaries.

The priority recipients of charity assistance are the organiszations and institutions that may be classified as development institutions, i.e. whose activities have an immediate impact on creating occupational potential of the territory and the Company and the cultural element of the quality of life in the territory. These include educational institutions of all kinds, culture, sports and public organisations, including associations of veterans and youth centres that promote healthy lifestyle and instill a sense of civic pride in the youth.

Local and corporate mass media provide an overview of the key sponsorship and charity events in order to communicate to community residents and employees the charity priorities of the Group companies and the steps actually taken. Annual questioning of the principal recipient groups are held for feedback purposes to identify their opinions and awareness level with regard to the contents and organisation of charitable activities by the Company.

In a move to achieve the long-term objectives of creating favourable living conditions in the territories of the Company’s operations, in 2007 the Company in cooperation with Norilsk City Administration commenced implementing the Programme for the Development of the Material and Technical Base for Athletics and Sports in the Norilsk Municipality in 2007-2010. Under the Programme the Company provided funds to upgrade six sports facilities and purchase flooring for mini-football field in the Arktika Sports Complex and sports equipment for Ol-Gul ski base.

In 2007, the Company’s financial assistance allowed a large charity project to upgrade school gymnasiums of the Greater Norilsk. Based on the project implementation results, 45 school gymnasiums underwent capital repairs and facilities were created enabling sports activities of schoolchildren.

Apart from sports facilities the Company also funded the modernisation and repairs of housing stock and social facilities in the NID (child health clinic, the buildings of vocational training school No. 105, professional lyceum No. 17, Norilsk Industrial Institute, Children’s Creativity Centre, etc.)

OJSC KMMC rendered financial assistance to the administration of Pechenga district to repair energy and road facilities.

Sponsorship of settlements in Taimyr

A traditional area of assistance to the NID is rendering sponsorship support to the settlements and institutions of the Taimyr Municipal District (TMD). Representatives of the business units belonging to the Company’s Polar Division and the Group companies held visits to the sponsored settlements and were engaged in holding events on the level of separate settlements and the region. A significant portion of funds was allocated for the purposes of resolving the issues contained in the applications of the respective local governing bodies that were created as part of municipal reform in 2006.

To create the necessary conditions aimed at improving the quality of life of local residents and enhance the technical base of institutions and organisations of the TMD, the Company provided assistance to medical institutions, schools, preschools, Taimyr district association of the disabled and other organisations in purchasing construction materials, equipment, learning aids, furniture, etc.

As part of the “Corporate Assistance to Taimyr Settlements” programme the Company provided for the purchase of playsets and sports equipment for outdoor playgrounds in the settlements of Taimyr Dolgan-Nenets municipal district. New Year trees and garlands were purchased for all community centers of the TMD in anticipation of the New Year. About 3,800 New Year presents were purchased and delivered to the settlements for the children residing in Taimyr settlements.

Education

The Group companies have for many years strengthened their reputation as a permanent business partner of city educational establishments. Apart from cooperation in creating the necessary conditions to carry out the educational and learning process, company representatives are engaged in occupational orientation of schoolchildren, acquainting them with the key principles of social policy, technological and environmental projects of the Group.

In 2007 the sponsoring companies of Norilsk Nickel Group provided assistance in the NIR to 63 educational institutions (schools, lyceums, vocational training schools) of Norilsk and Dudinka and 32 preschools of the city of Norilsk. Funds provided under the educational sponsorship programme were allocated in 2007 to improve the quality of methodological and technical base of the sponsored institutions: organise theme classes, assist in organising and holding cultural and sports events, organise children’s trips to the countryside, excursions to the production facilities.

During the last year the trend of focus shifted in the support of educational institutions from strengthening the technical base of certain kindergartens and schools (assistance in repair works, procurement of construction materials) to allocation of resources for the purchase of innovation technology, state-of-the-art learning aids, development games and specialised equipment.

In this context, as a target programme and with approval of the Department of comprehensive and pre-school education of the city of Norilsk, in 2007 the Polar Division held a tender for the purchase of multimedia systems, laptops and interactive whiteboards for all sponsored city educational institutions, based on the needs of each institution.

In addition, new companies of the Group that had not participated in corporate assistance joined the programme in the 2007 reporting year, for example: CJSC Alykel, OJSC Norilsk-Telecom, LLC Norilsk Industrial Transport, etc.

The Company continued supporting the Norilsk Cadet Corps, a state boarding school, located in Minusinsk district of the Krasnoyarsk region. In 2007, monetary support of dedicated vocational training institutions in the Krasnoyarsk region was also rendered by OJSC Yenisey River Shipping Company.

For several years the Kolskaya MMC has implemented the “Medalist of KMMC” programme under which the school-leavers who get graduation medals from their schools in the cities where the Kola companies operate, also receive encouraging prizes from the Company.

The support of organisations facilitating the development of children and the youth is one of the priorities of community assistance by Norilsk Nickel Harjavalta Oy. The Finnish company has also established close cooperation with schools and other educational establishments.

Support to sports and creative teams

Group companies respond to applications of organisations and teams whose activities promote and enhance culture and promote the key components of healthy lifestyle among the residents in the regions where the Group operates.

In 2007 year the Polar Division rendered assistance to the Taimyr Folk Ensemble of Dudinka City School of Arts and allocated funds to the Municipal Culture Establishment “City Culture Centre” for organising festive events.

OJSC YRSC supported the activities of regional “Patriot” youth club in Krasnoyarsk, regional boxing federation of Krasnoyarsk and other creative associations.
An important line of charity assistance by KMMC in 2007 was the support of Murmansk regional public organisation – Monchegorsk-Severonickel hockey club.

Nkomati mine’s contribution to local development

Nkomati mine contributes to the local development by implementing a two-tier social and economic development programme that, apart from assistance to socially vulnerable groups and support to non-for-profit organisations, provides for the realisation of social and labour plan. Social and Labour Plan is a mandatory document which is regulated by the Mineral and Petroleum Resources Development Act (MPRDA) and serves to satisfy the public needs for education and advanced training, health care, sport, culture and business development.

Relationships between the mine’s management and municipal governments are governed by the Municipal Act, laws and regulations issued by local authorities. Economic development projects implemented by the company in 2007 providing for the creation of new workplaces for three local communities had been approved by municipal governments. Municipal governments are also involved in implementing the initiatives of Nkomati mine in the area of health, social development, sport and culture.
Nkomati mine cooperates with two municipal governments that established Business Forums to consolidate the community development efforts.