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ORLEN Group 2016 Integrated Report

II nagroda specjalna w kategorii Raport Zintegrowany | Najlepszy raport on-line

Indirect economic impacts

Capitals:  

The ORLEN Group comprises 70 companies, including 59 subsidiaries, located in Poland and in other countries. All of them follow the Group’s CSR Strategy, which states that value growth should be aligned with the interests of external stakeholders.

ORLEN Group companies place a special focus on their role as socially responsible members of their respective communities. The Group considers both the direct and indirect effects of its activities on the environment it operates in. It is an employer, tax payer, sponsor, charity provider, and partner for a number of suppliers, institutions and organisations.

Workforce

In 2016, the ORLEN Group had a total workforce of 19,700. As an employer it exerts influence not only on the lives of its employees, but also on their dependants.

To give a few numbers, as of December 31st 2016 ANWIL had 1,232 employees, while ORLEN Południe employed 639 people, plus the personnel working at other companies in its Group. In 2016, the upstream segment’s workforce totalled 142 (ORLEN Upstream: 97, ORLEN Upstream Canada: 42, and FX Energy: 3), IKS Solino employed 258 people, and the Unipetrol Group had a staff of 4,497.

Taxes

In 2016, PKN ORLEN alone paid PLN 28bn in taxes, of which PLN 166m was paid in Płock, home to PKN ORLEN’s production plant.

The essence of responsibility in this respect is diligent compliance with the applicable legal requirements.

ANWIL pays taxes to Włocławek, including taxes for property, vehicles, perpetual usufruct of land, as well as corporate and personal income tax. In 2016, these payments exceeded PLN 120m.

The amount of taxes and other fiscal charges, i.e. VAT, PIT and salary overheads at ORLEN Upstream and FX Energy Poland reached nearly PLN 10m in 2016. Furthermore, in relation to their exploration and production operations, last year both companies paid almost PLN 2.5m to public administration bodies in charges for mining rights and mineral production royalties. ORLEN Upstream Canada reported input GST (General Sales Tax) in excess of output GST charged in connection with its operating and investment activities in 2016, and received a tax refund. Payments to Canadian public administration bodies associated with exploration and production operations, such as royalties, licence fees and lease rents, totalled PLN 18.1m.1

In 2016, ORLEN Południe paid a total of almost PLN 140m in VAT, excise tax, PIT withholdings (PIT-4), property tax, CIT, and the vehicle tax.

Taxes paid by IKS Solino were almost PLN 22m, comprising VAT, property tax, vehicle tax, CIT, and PIT withholdings (PIT-4).

Unipetrol paid over PLN 4m in local taxes (Litvínov, Ústí and Most region).

1) Amounts determined based on the methodology applied in the statement of payments to governments for 2016

CSR initiatives

The ORLEN Group’s efforts with respect to corporate social responsibility are governed by the CSR Strategy. One manifestation of the Group companies’ involvement in the lives of local communities is extensive social sponsorship and charity activities.

About 30 ORLEN Group companies have declared that they engage in CSR activities. To improve the quality of life of local populations, programmes dedicated to local communities have been established, such as those in Płock and Włocławek. The Group companies lend a helping hand to solve problems of their local communities, particularly in the areas of healthcare, safety, and education. ORLEN Group companies also support projects promoting arts and culture, amateur and professional sports, and development of urban infrastructure. The underlying principle is that the Group companies should help eliminate the most pressing problems of their respective communities. Inter-sectoral partnerships are one form of such support. PKN ORLEN was among the founders of the Grant Fund for Płock Foundation, and its representatives are actively involved in the Foundation’s activities. The Foundation promotes and provides co-funding for local NGOs’ initiatives. Similar objectives are pursued by the Good Neighbourhood Grant Fund for Ostrów Wielkopolski Association, which was established by the Town of Ostrów Wielkopolski, the Municipality and Town of Odolanów, and the Municipality of Ostrów Wielkopolski.

The wide array of CSR activities undertaken by ANWIL was extended in 2014, when the ANWIL for Włocławek Foundation was established, with a budget to be used for the financing of local initiatives. ORLEN Upstream engages in community outreach initiatives in all of its licence areas. The company supports local sports organisations, educational and social projects, and participates in PKN ORLEN’s safety programme by co-financing the purchase of equipment for local firefighting units. ANWIL takes part in the same programme by supporting firefighters in its area of operation.

The ORLEN – GIFT FROM THE HEART FOUNDATION, established in 2001, fulfils the social responsibility mission of its founder, PKN ORLEN. The Foundation has partnered with more than 350 Family Group Homes which take care of 2,500 children all around Poland, is involved in scholarship programmes, and engages in projects focusing on safety, cultural, and other initiatives. Local communities are important beneficiaries of its activities. Under the ‘PKN ORLEN Charitable Giving Policy’, ORLEN Group companies may participate in CSR activities at the corporate level through the Foundation.

In 2016, the ORLEN − GIFT FROM THE HEART Foundation financed the purchase of modern equipment for the surgery room of the Orthopaedic Department at the Holy Trinity Hospital in Płock. It was a high-end illumination system that enables physicians to see more precisely the area to be operated on and thus contributes to effectiveness and safety of surgical operations.

The Foundation also engaged in a project to improve marking of pedestrian crossings near schools in Płock. Ten crossings near primary schools were marked with pictograms to increase drivers’ caution, and T-27 road sings, warning of the proximity of a crossing frequently used by children, were placed on roadsides. These are the first pedestrian crossings marked this way in Płock. The Foundation also co-financed the construction of a walking and cycling route in Ostrów Wielkopolski, making it possible to separate pedestrian and bicycle traffic, which significantly improved safety.

The ORLEN − GIFT FROM THE HEART Foundation continued its cooperation with Warsaw University of Technology - Płock Branch, which received a donation for the purchase of fume hoods and ancillary equipment. Fume hood is a type of a local ventilation device designed to prevent the release of harmful substances, as well as to ensure protection against fire and explosion.

In Gąbin, the Foundation helped to build a modern playground for children on the premises of the school complex.

Under the ‘PKN ORLEN Charitable Giving Policy’, ORLEN Group companies may participate in CSR activities at the corporate level through the Foundation.

ANWIL is a major patron of local sports, lending support to the ANWIL Włocławek basketball club, and Yacht Club ANWIL. The company has also pursued educational projects addressed to Włocławek’s schools, including regular campaigns such as ‘Tree for a Bottle’, ‘Right in the Eyes’ and ‘Mr Carp Restocks the Vistula’.

Last year, Włocławek’s preschoolers and students of elementary schools participated for the 14th time in the countrywide ‘Tree for a Bottle’ project, which is coordinated locally by ANWIL. The company has been organising the event in Włocławek since 2002, the very year it was initiated by the Secretarial Office of the Responsible Care Programme. In 2016, 6,958 preschoolers and students of elementary schools from Włocławek collected as many as 603,364 used PET bottles. Thus, Włocławek’s youngest residents beat their 2015 result by 40,689 bottles and once again came in first in Poland.

In 2016, ANWIL also organised the third edition of its ‘Right in the Eyes’ campaign designed to promote the wearing of reflective elements among children. As part of the project, the company’s employees and officers from the Municipal Police Department visited 20 non-public pre-schools in Włocławek and its vicinity, and distributed 860 visibility vests and reflective bands, and discussed the importance of being visible on the road.

Care for the environment and environmental education is a fixed element of ANWIL’s strategy. The ‘Mr Carp Restocks the Vistula’ competition is a joint initiative of the Fish Promotion Association and Anwil, it started in 2015 with the aim of educating children on the importance of fish to the ecosystem. Last year, the final part of the second edition of this project included the release of 10,000 eels into the Vistula river. The event was attended by winners selected from among the students of 15 schools and pre-schools in Włocławek, as well as 16 educational facilities from six provinces: Province of Warsaw, Province of Szczecin, Province of Kraków, Province of Olsztyn, Province of Wrocław and Province of Łódź.

The above are only a sample of the social projects carried out by ANWIL. The ANWIL for Włocławek Foundation plays an essential role in pursuing social objectives as its entire budget is allocated to supporting local initiatives in education, environmental protection, healthcare, safety, sports, culture and arts. Through the Foundation, ANWIL is able to improve the quality of life of Włocławek’s residents.

For many years ANWIL, as a leading business in the heavy chemicals sector, has teamed up with the Łódź University of Technology and other organisations to popularise the study of chemistry across all levels of education. Key initiatives in 2016 included patronage of the chemical engineering class at the Chemical Sciences School Complex in Włocławek, which welcomed its first fifteen students in September 2015. The company also sponsored the 63rd Chemistry Olympics in the Toruń region, one of 13 regions to host the competition, organised by the Polish Chemistry Association.

ORLEN Upstream and its related companies, FX Energy and ORLEN Upstream Canada, are also deeply committed to supporting their stakeholders.

For five years now, ORLEN Upstream has been working towards improving regional safety by co-financing purchases of equipment for local firefighters. In 2016, assistance was provided to 32 units operating within the area of the company’s field work. ORLEN Upstream was also involved in educational initiatives addressed to children. One example is a series of lessons on safety and first-aid for some 1,000 first-year students, entitled ‘Smart Dragon Rises to the Task’, carried out as part of the Safety and Healthcare Week at the ORLEN Group. Another campaign targeting schoolchildren was ‘Gym Class with the Champion’: it reached 3,364 children at 19 schools with its message promoting physical activity and a healthy lifestyle. In May 2016, ORLEN Upstream joined a volunteering effort which included renovation of a playground of the Community Educational Centre in Kosewo. The company also furnished the facility with furniture and household appliances. Like every year, ORLEN Upstream engaged with local communities by sponsoring regional sporting and cultural events. Some were initiated by the company itself, such as the ‘Fall in Love with Geology’ picnic, held in spring in Świdnik in connection with seismic research conducted in the area; it was intended to familiarise local residents with the technology used and nature of work involved.

In 2016, the company also pursued a number of R&D projects, such as GAZGEOLMOD, ŁUPZAS, IRES, RESDEV, EKOŁUPKI and UNGASLAB, carried out under the Blue Gas programme, coordinated by the National Centre for Research and Development.

ORLEN Upstream Canada was actively involved in community outreach projects. Among the supported projects were sports initiatives combining healthy competition with charity, as well as grants to local communities. A noteworthy example is last year’s charity campaign organised by ORLEN Upstream Canada’s staff in collaboration with United Way. Their joint activities included a charity drive and renovating a help centre for the needy, as well as preparation of lunch sets for the homeless under the care of Drop Inn Center. For its outstanding contribution to the project, the Canadian team received the ‘Welcome to United Way’ award as the best first-time supporter of the programme.

ORLEN Południe, independently and through the ORLEN – GIFT FROM THE HEART Foundation, has implemented a number of projects in education, as well as protection of life and health, addressed to the local community. In addition, the company was involved in the ‘For Eagles’ scholarship programme for its employees’ children, and the ‘Stop Abstention from Gym Classes’ campaign. As part of the latter project, over 300 schoolchildren in Trzebinia and Jedlicz took part in a professional ‘Gym Class with the Champion’. In this case, the champion was represented by members of the women’s volleyball team from the ORLEN League. The participating children also attended chemical, physical and art workshops, covering various areas that may help develop, shape and drive their future. They also attended practical classes in first-aid conducted by paramedics from the Malta Medical Service Association (Malta Służba Medyczna).

ORLEN Południe was also engaged in pro-environmental campaigns. For instance, in the Jedlicze Municipality it carried out the ‘Tree for a Bottle’ project organised under the Responsible Care Programme.The month-long campaign saw 250 preschoolers and over 1,000 students of elementary schools collect 145,000 PET bottles, a very impressive result attesting to the resounding success of the initiative. Each participating educational facility received tree seedlings and commemorative diplomas. The winning schools and pre-schools were also given funds to purchase equipment and organise educational trips. The final of the project, organised by ORLEN Południe, attracted some 300 children. Another recurring event held by ORLEN Południe is the ‘Tree for Waste Paper’ campaign, which has become a fixture in the programme of the Christmas Eve celebrations at the Trzebinia Market Square. As part of the event the first 500 people to bring waste paper receive plantable Christmas trees. Proceeds from the waste paper collection were transferred to one of the local elementary schools.

It is also important to highlight the involvement of the ORLEN Południe’s employees in volunteering initiatives. Under the ‘Become a Santa Claus’ Helper – Make Someone’s Dreams Come True’ project, they helped fulfill the dreams of 41 children from children’s homes in Długie and Miękinia.

IKS SOLINO, like other ORLEN Group companies, delivers on its CSR commitment through sports sponsorship, and is partner in charitable activities of the ORLEN – GIFT FROM THE HEART FOUNDATION. It was one of the businesses participating in the ‘For Eagles’ scholarship programme. The company also engages in volunteering projects. For instance, training for its management staff was used as an opportunity to help a foster care centre in Inowrocław. The company’s employees also took part in the ‘Become a Santa Claus’ Helper – Make Someone’s Dreams Come True’ project.

In its relations with stakeholders, Unipetrol adheres to principles of corporate social responsibility. It lends support to initiatives designed to improve the quality of life in the areas where it operates and cares for the natural environment. Moreover, the company supports and promotes young chemistry talents. The pillars of Unipetrol’s social commitment are education, volunteering, charity and environmental protection.

Unipetrol is a supporter of science, scientific research and education, with a particular focus on popularising chemistry. It is a long-standing partner of the University of Chemistry and Technology of Prague. A branch of the university is located within the industrial park in Litvinov, which gives the students an opportunity to cooperate with the unique UNICre research centre operated by the Unipetrol Group, a one-of-a-kind project in the Czech Republic. What is more, Unipetrol actively supports the ‘Zlatý Amos project, which seeks to recognise the best chemistry teachers in the Czech Republic.

Since 2012, Unipetrol employees have been involved in volunteering initiatives for the benefit of the company’s immediate environment. These involved an annual charity drive as part of the ‘We Make Dreams Come True’ project, with the proceeds going to local charities. Their efforts complement the company’s charitable activities as Unipetrol supports the community of the Usti region on a regular basis. The company’s charity programmes contribute to rebuilding the local infrastructure, organising cultural events and sporting activities for children and teenagers.

Another pillar of Unipetrol’s CSR agenda is environmental protection. The company is a partner of the Czech Fishery Union and is actively involved in restocking fish into the Bilina river.

The company is a sponsor of sports, including hockey and motor sports. Unipetrol also engages in initiatives addressed to children and young athletes.

Suppliers

In 2016, PKN Orlen and the ANWIL Group implemented the ‘Supplier Code of Conduct’.

ORLEN Group companies are major partners for all their suppliers, including local ones. For instance, in 2016 ANWIL cooperated with 5,251 domestic and 705 foreign suppliers. Last year, the Company adopted its ‘Supplier Code of Conduct’, a comprehensive guide governing cooperation between ANWIL and its suppliers, which ensures that the company’s trading partners observe the standards in place at the ORLEN Group and bidders in contract award procedures are fully aware of the expectations that they are required to meet.

ORLEN Upstream is fully committed to ensuring that any work carried out by or on behalf of the company is safe for the natural environment. Accordingly, it only selects partners operating to the highest standards in this respect. Over 90% of the partnering companies were certified for compliance with the exacting environmental standards of ISO 14000, which attests to their care for the environment and environmentally-friendly initiatives.

In 2016, operations within the Upstream sector (pursued independently or with a partner) were carried out in a total of 30 licence areas located in 9 provinces of Poland. ORLEN Upstream always seeks to engage local businesses and communities whenever it commences work in a given area and afterwards, during ongoing operations. In 2016, it contracted 14 companies operating in its licence areas for various services, from building access roads and investment project sites, through waste disposal, to hospitality services. Furthermore, 3 local residents were employed for the purposes of reclamation work.

ORLEN Upstream makes an effort to develop this priority for supporting local communities in its subcontractors. In line with this policy, in 2016 a security company engaged by ORLEN Upstream employed 3 persons living in the direct vicinity of project sites, and a subcontractor providing drilling and maintenance services contracted 2 local companies for logistics and social services at the drilling rig.

In late 2015, ORLEN Upstream became the sole shareholder in FX Energy, thus gaining full control over the assets of the US-based company and its subsidiaries. T As a result of the acquisition, new exploration and production areas were added to the company’s portfolio of projects in Poland. In connection with operations carried out in 2016 by FX Energy as a member of the ORLEN Group, 10 local businesses in joint licence areas were engaged to perform various work accompanying the projects.

At Unipetrol, out of its 4,720 suppliers, as many as 223 come from the Usti region.

Membership of organisations and trade associations

The ORLEN Group is involved in many organisations as it perceives such activity as an essential element of its commercial operations in Poland and Europe.

In addition to PKN ORLEN, other ORLEN Group companies are also involved in the Responsible Care Programme. This international initiative of the chemical industry seeks to consistently introduce improvements related to health, safety and the environment (the so called HSE triad), and openness in communication. The programme has been joined by ANWIL, IKS Solino and Unipetrol, and in 2016 also by ORLEN Południe.

The companies’ memberships in organisations and trade associations, as well as their participation in efforts to develop their respective industrial sectors, are a key element of their social activity.

For instance, Anwil is a member of such organisations as the Polish Chamber of Chemical Industry, Fertilizers Europe, Polish ISO 9000 Forum, Polish Chamber of Industrial Power and Energy Consumers, and the Polish Commercial Electrical Engineering Chamber.

ORLEN Upstream is a member of the Polish Association of Oil and Gas Industry Engineers and Technicians and the Energy & Geoscience Institute. Furthermore, the company’s employees also hold memberships in various trade organisations.

ORLEN Upstream Canada is associated in the Canadian Association of Petroleum Producers (CAPP) and Lochend Industry Producers Group of Alberta.

ORLEN Południe is an active member in such organisations as the Polish National Chamber of Biofuels, Polish Association of Oil and Gas Industry Engineers and Technicians and the Association of European Candle Makers. All of those are organisations gathering entities from the respective segments of the chemical industry.

In 2016, IKS Solino was involved in the work of the Polish Salt Foundation and the Solution Mining Research Institute.

Unipetrol holds memberships of numerous organisations and associations, including the Association of the Chemical Industry in the Czech Republic, Polish Capital Club in the Czech Republic and SGP Standard. Furthermore, Unipetrol’s representatives sit on the boards of key trade organisations, including the Czech Association of Oil Industry and Trade (ČAPPO) and SVSE, an association of large energy consumers.


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