Sustainability Report 2010 Lek d.d.

Lek Health, Safety and Environment Systems 26 inspections on site by senior managers and safety meetings. The topics to be dealt with were selected on the basis of accidents, reported near-misses and identified risk analysis. In cooperation with an occupational medicine specialist, we provided our employees with an opportunity to attend preventive health programs, which include specific health sustaining programs, guided workouts, and participation in seasonal flu vaccination campaigns. Our preventative ap- proach to employee health is undergoing significant change, and will be further adjusted, upgraded and supported in the years to come. Progressive implementation of a comprehensive safety system is of key importance to the company’s growth and development. It is associated with promoting due diligence, continuous learning, and employee training and promotion. In 2010, the following HSE activities were organized: • Regular periodic training for employees in occupational health and safety, and fire safety; • Regular training on Behavior Based Safety for newly hired employees and managers; • Periodic HSE training for managerial staff: internal HSE topics were upgraded in cooperation with the Labor Inspectorate of the Republic of Slovenia; • Targeted training on Explosion Safety (ATEX); • Training on Process Safety performed by two lecturers from the Swiss Institute of Safety and Security; the training program is essential for ensuring safety of manufacturing processes; • Training on NEM (Novartis Emergency Management) as an integral part of BCM (Business Continuity Management); • Tactical fire drills in conformity with the risk portfolio, to check the response of protection and rescue teams and the status of firefighting equipment, and to test alertness in case of emergency; • Evacuation drills with fire extinguishing tests; • Open House Day (Menge‰) for local firefighter clubs, and a workshop dealing with the fire safety awareness of employees in the domestic environment. 2.5 Environmental impact and risk assessment In accordance with legal requirements, all Lek sites have acquired environmental permits for operation (see Item 2.2. Compliance with laws and standards). When planning an intervention and its potential impact on the environment, an impact and stress admissibility asses- sment is made. The assessment is carried out in accordance with legal environmental guidelines, data from public sour- ces, monitoring and studies carried out by authorized insti- tutions, the current environment status and pollution, antici- pated emissions resulting from the planned activities, and applicable environmental regulations. Environmental impact evaluation is performed by using a 6-level scale (negligible, minor, moderate, major, massive or catastrophic exceeding the regulatory limits). Impacts of the anticipated intervention are evaluated accor- ding to individual elements of the environment, and separa- tely for the construction time and the operation time. If any environmental impact has been identified, mitigation measu- res are proposed. Pursuant to the Decree on the Prevention of Major Accidents and Mitigation of their Consequences (OG of RS, Nos. 71/08 and 105/10), Lek, with the exception of the Menge‰ produc- tion plant, is characterized as a negligible source of risk. At the Menge‰ production plant, classified as a source of minor environmental risk (mainly due to the presence of flammable substances at the site), hazardous substances were detec- ted as anticipated. By applying the measures planned for emergency cases which may result in large-scale emissions, fire or explosion, and by means of response measures, the necessary action was taken to prevent major incidents. Be- ing a minor environmental risk plant, we filed an application for an environmental permit with the Ministry of the Enviro- nment and Spatial Planning. The permit is due by the end of 2015, as major risk sources are given priority. 2.6 Risk prevention and mitigation measures Risk assessment is carried out using various methods. The choice of an appropriate method depends on its suitability for the area subject to assessment and on the qualification level of the associates involved. Risk assessment is made for: • Risk Portfolio, • Workplace (Workplace Risk Assessment), • Capital expenditure projects, with priority use of the ZHA (Zurich Hazard Analysis) method in the project qualification phase, • Facilities and production lines: Zurich Hazard Analysis (ZHA), • Introduction of new products and production process- es: Process Risk Assessment – PRORA), • Assessment of product quality risks: priority use of the FMEA method. The Risk Portfolio provides the management team with an overview of major HSE risks and levels of risk management by individual site, country, business group, and in the corpo- ration as a whole. The Risk Portfolio development and compilation are carried out in three steps: • Risk assessment and preparation of a Risk Portfolio for individual sites. • Preparation of a Risk Portfolio for Lek d.d. (Slovenia) and Sandoz. • Annual review of the Risk Portfolio for business groups at the corporate level. 2.7 HSE objectives For 2010, the following measurable HSE objectives were set (see Item 4.2. Realization of HSE objectives for 2010): • Improving water use efficiency, • Improving energy efficiency,