consolidated non-financial statements -...

consolidated non-financialstatements

in accordance with Italian Legislative Decree No. 254 of December 30, 2016

Extract of the Directors’ Reportof the Annual Report 2017

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consolidated Non-financial Statements

Methodology, principles and reporting criteria 73Materiality analysis and content definition 73

Company management and organisation model 74Organisation, Management and Control Model of Saipem SpA - ‘Model 231 (includes the Code of Ethics)’ 75Corporate Governance 75Relations with stakeholders 75

Protecting the environment and minimising environmental impacts 76Spill prevention and response 77Energy efficiency and GHG emissions 78Water management 79Waste management 79

Social aspects 80Relations with the local context 80Local presence 81Supply chain 81

Saipem people 82Workforce trend 83Skills development 83Industrial relations 84Diversity and equal opportunities 85Health 86Safety 87Asset integrity 89

Fighting corruption 90Human rights 91

Security practices 91Reporting suspected violations 92

Reporting boundary 94Limited assurance 94

GRI Content Index 95

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SAIPEM Annual Report 2017 / Consolidated Non-Financial Statements

73

Methodology, principlesand reporting criteria

The ‘Consolidated Non-Financial Statements‘is drawn up in accordance with ItalianLegislative Decree No. 254/2016 and theprovisions of the ‘Sustainability ReportingGuidelines’ of the Global Reporting Initiative(GRI) - G4 version ‘in accordance’ with the Coreoption (see the ‘GRI Content Index’). The Coreoption requires that the ‘General StandardDisclosures’ (34 compulsory indicators), thedescription of the management approach andat least one ‘Specific Standard Disclosures’indicator is shown for each material aspect(refer to the ‘Table of correspondence with theGRI aspects’). The ‘Consolidated Non-FinancialStatements’ refers to the ‘Directors’ Report’and the ‘Corporate Governance andShareholding Structure Report’ with regard tothe content treated in detail in theabove-mentioned documents and in turn itcontains information that fulfils the obligationsreferred to in the first and secondsubparagraphs of Article 2428 of the ItalianCivil Code, limited to the analysis ofnon-financial information.In addition to the provisions outlined bylegislation, the content of the document hasbeen defined, as established by the provisionsof the GRI G4 Guidelines, taking intoconsideration the principles of materiality,stakeholder inclusiveness, sustainabilitycontext, transparency and completeness.The principles of balance, comparability,accuracy, timeliness, clarity and reliability havebeen followed to guarantee the quality of theinformation contained in the document.This document constitutes the ‘ConsolidatedNon-Financial Statements’ of the SaipemGroup as required by Italian LegislativeDecree No. 254/2016.Refer to the ‘Risk management’ section in the‘Directors’ Report’ for a description of therisks identified for the five areas of the decreeand the topics defined as material.The performance indicators, selected on thebasis of the topics identified (see the‘Materiality analysis and content definition’section), have been collected on an annualbasis. The information and quantitative datacollection process has been organised inorder to guarantee comparability over thedata and analysis of the trends over a three-

year period, to allow for the properinterpretation of the information and a fulloverview for all the stakeholders interested inthe evolution of Saipem’s performance.

Materiality analysisand content definition

As provided by the GRI G4 Guidelines, Saipemimplements a materiality analysis processevery year. This is aimed at identifying thesustainability aspects of its business thatcould substantially influence the assessmentsand decisions of its stakeholders and areconsidered significant for the Company itself.The analysis is carried out with theinvolvement of both the main internal andexternal stakeholders. The different processphases are described below. Identification ofthe relevant themes for the industry: thisfirst phase is based on an analysis of thesustainability context of Saipem’s business,company stakeholders, including competitors,sustainability rating agencies and the meansof communication. The stakeholders’ level ofinterest was defined through interviews orquestionnaires. Clients, NGOs,representatives of local communities,business partners, business associations,investors, authority representatives, vendorsand employees were all involved. The secondphase is the identification of the prioritythemes for the Group, which is carried outby consulting the senior managers, this too bymeans of a survey.The respondents identified the mostimportant topics, assessing them inaccordance with the responsibility principle(topics that must be managed by Saipem as aresponsible company) and the value created(economic, social, cultural, reputational,environmental, etc.) for Saipem itself, in favourof its stakeholders, and for civil society as awhole.The overall importance of each theme isdetermined by the nexus of internal andexternal significance in accordance with theparameters described. Thus, the materialtopics are those considered relevant by bothSaipem and the stakeholders. The final resultsof the materiality analysis were validated bythe Sustainability Committee, chaired by theCEO and consisting of the top management,

consolidated Non-financialStatementsin accordance with Italian Legislative Decree No. 254 of December 30, 2016

The ‘Consolidated Non-Financial Statements’ is the document that reports on the progress ofthe management of non-financial aspects and describes the Group’s policies, its activities, themain results and impacts generated over the year, in terms of indicators and trend analyses.

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74

Company management and organisation model

Saipem completed redefining its industrial andorganisational structure in 2017. The aim wasto achieve performance improvementobjectives and company governanceprocesses, guaranteeing the Company acompetitive advantage in better seizing theopportunities offered by the referencemarkets. The divisional configuration,formalised on May 1, 2017, includes:- an operational Corporate structure with

group-level steering and control that isresponsible for managing critical or relevantissues and aspects of corporategovernance;

- five divisions: Onshore E&C, Offshore E&C,Onshore Drilling, Offshore Drilling andXSIGHT, with full responsibility overbusiness results globally and with all thedecision-making, management andoperational powers that are necessary forthe pursuit of the targets set.

In order to allow full operability to the adoptedmodel, in accordance with the companycompliance and governance standards:- the entire Saipem system of powers and

proxies was redefined, granting properpowers to the division managers anddifferent categories in the organisationalstructure;

- each division started a total review processfor its own operational and work processmodels – with the purpose of pursuing theoverall optimisation objectives and seizingthe specific opportunities in the individualbusiness.

In this context it was necessary to reorganisethe process and architecture map of theentire regulatory system with the dualobjective of: (i) formalising the changesintroduced with regard to the neworganisational model and (ii) aligning thesystem with the new steering and control roleattributed to Corporate and with theworldwide operational and coordination roleensured by each division.

Topics required by Italian LegislativeDecree No. 254/20161) Environmental aspects

2) Social aspects

3) Fighting corruption

4) Protecting Human Rights

5) Personnel management

Topics arisingfrom the Materiality AnalysisEnergy efficiency, Water management andpollution, Spill prevention and response,Technology and operational innovation.Ethical supply chain.

Anti-corruption and ethical businesspractices.Human and labour rights.

Training and development, People Safety,Health and well-being, Safe operations,asset integrity and process safety.

Correspondence with GRI aspects

Energy, Emissions, Water, Effluents and waste.

Market presence, Supplier Assessment forLabour Practices, Supplier Human Rightsassessment.Anti-corruption.

Child labour, Forced or compulsory labour,Non-discrimination, Labour practicesgrievance mechanism, Human rights grievancemechanism.Employment, Training and education, Diversityand equal opportunities, Occupational Healthand safety, Freedom of association andcollective bargaining.

Importance to business

Impo

rtan

ce t

o st

akeh

olde

rs

the material themes ENVIRONMENTAL MANAGEMENT AND IMPACTS

en Energy e�ciency

spi Spill prevention and response

wm Water management and pollution

BUSINESS CONDUCTAND OPERATIONS

eth Anti-corruption and ethical business practices

inn Technology and operational innovation

HUMAN RIGHTS, DIVERSITY AND WELL-BEING

h Health & Well-Being

hlr Human and labour rights

sup Ethical supply chain

PEOPLE MANAGEMENT

tr Training and development

safe operations

ass Safe operations, asset integrity and process safety

saf People safety

sup

eth

asssaf

inn

h

trspi

hlr

wmen

TABLE OF CORRESPONDENCE WITH THE GRI ASPECTS

and shared with the Corporate GovernanceCommittee and Scenarios. The materialitymatrix quadrant, in which the material topicsare included, is represented below.This analysis shows that pollutant emissions

are not material due to the peculiarities of theGroup’s business.With regard to the reporting boundary, refer tothe paragraph ‘Reporting boundary’ of thisStatement.



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Organisation, Management and Control Model of Saipem SpA -‘Model 231 (includes the Code of Ethics)’

At its meeting on March 22, 2004, the Boardof Directors of Saipem SpA resolved to adoptan organisation, management and controlmodel pursuant to Italian Legislative DecreeNo. 231 of 2001 (hereinafter, ‘Model 231’),aimed at preventing the offences specified byItalian Legislative Decree No. 231/2001.Later, through specific projects Model 231 wasupdated to reflect changes in the legislation andin the company organisation of Saipem SpA.In particular, subsequent updates of Model231 have taken into account the following:- changes in Saipem SpA’s company

organisation;- trends in case law and legal theory;- observations related to the application of

Model 231, including any experience fromcriminal proceedings;

- procedures of Italian and foreign companieswith regard to these models;

- the results of supervisory activities and thefindings of internal audit activities;

- changes in legislation and in Confidustria’sGuidelines.

Finally, also after the removal of themanagement and coordination of Eni SpA onJanuary 22, 2016, the CEO, on July 28, 2016,initiated the programme to implement theinnovations for a review of the structure ofModel 231 and the Code of Ethics, which is anintegral and substantial part of Model 231, anda general Risk Assessment regarding thecrimes set out by Italian Legislative DecreeNo. 231/2001.The purpose was to review Model 231 and thedocument ‘Sensitive activities and specificcontrol standards for the Model 231 of SaipemSpA’ renamed (in line with best practices)‘Special Section of Model 231 - Sensitiveactivities and specific control standards’ withthe purpose of aligning them with:- the regulatory updates;- the organisational changes that have taken

place;- trends in case law and legal theory;- best practices.This review led the Board of Directors ofSaipem SpA to approve the new ‘Model 231(includes the Code of Ethics)’ and thedocument ‘Special Section of Model 231 -Sensitive Activities and specific ControlStandards’ of Saipem SpA on January 15,2018.After the various timely updates made overthe years, Model 231 of Saipem SpA has alsobeen updated, inter alia, in accordance withthe following regulations:- Italian Legislative Decree No. 24 of March 4,

2014, which intervened in the context of thetrafficking of human beings and theprotection of the victims amending Article600 of the Italian Penal Code (reduction to

or maintenance in a state of slavery orservitude) and Article 601 of the ItalianPenal Code (trafficking of persons);

- Italian Legislative Decree No. 39 of March 4,2014, which introduced the crime of‘grooming minors’ into the crimes set out inItalian Legislative Decree No. 231/2001;

- Law No. 68 of May 22, 2015, ‘Provisionsrelated to crimes against the environment’(so-called ‘Ecoreati’, ‘Eco-crimes Act’), whichintroduces new cases of environmental crime;

- Law No. 167 of November 20, 2017,‘Provisions for fulfilling the obligationsarising from Italy being part of the EuropeanUnion - European Law 2017’. The provisionaims to bring domestic regulations in linewith EU regulations, also intervening on theliability of legal entities. In regulating thefight ‘against some forms and expression ofxenophobic racism by means of criminallaw’, the new Article 25-terdecies, ‘Racismand Xenophobia’ provides for this as acrime within Italian Legislative Decree No.231/2001;

- Law No. 179 of November 30, 2017 on‘Provisions for the protection of thosereporting crimes or irregularities that theymay have become aware of in the contextof their public or private employment’.

Corporate Governance

Saipem adopts a system of CorporateGovernance that is based on the general andspecial regulations applicable to the Articlesof Association, the Code of Ethics, therecommendations contained in theSelf-Regulation Code of the Italian StockExchange and the best practices on thesubject.Saipem’s system of Corporate Governance isfounded on the central role of the Board ofDirectors, and on the transparency and theeffectiveness of the internal audit system. For amore detailed description of the governance ofthe aspects required by Italian LegislativeDecree No. 254/2016, refer to the ‘CorporateGovernance and Shareholding StructureReport’, in particular the section ‘Governance ofSustainability’ and the sections regarding theBoard of Directors, internal committees andrisk management. The above-mentioneddocument is present in the CorporateGovernance section of the Company’s website.

Relations with stakeholders

The identification and involvement of allbearers of legitimate interests arefundamental aspects of the Company’ssustainability strategy. Pursuing a constantdialogue and sharing objectives with allstakeholders are the means through which itis possible to create reciprocal value.



76

The approach developed by Saipem over timeis designed to ensure open and transparentrelations with the parties involved andpromote positive and mutually advantageousinteractions.In 2017, Saipem published the ‘StakeholderEngagement’ Management SystemGuideline (MSG) defining the principles andresponsibilities at the basis of Saipem’sstakeholder engagement process, in line withthe new organisational structure.This guideline is an important tool designed toimplement the Sustainability Model whichensures that sustainable development goalsare met through a series of transversalcompany processes, strengthening valuecreation, ensuring a stable presence in theterritories and the effective implementation ofSaipem’s operational activities.The main issues that have arisen over the yearfrom the stakeholder engagement processconsist of the topics considered material.The priorities among these are: people safetyand safe operations, asset integrity andprocess safety, anti-corruption and ethical

business practices, and human and labourrights. In order to meet the stakeholders’expectations on these issues in terms oftransparency and the definition of theconcrete commitments, Saipem providesdetailed reporting in this statement and in the‘Saipem Sustainability 2017’ document.

STAKEHOLDER engagement

1

2

3

4

IDENTIFICATION AND ANALYSISOF STAKEHOLDER

DEFINITION OF THE RELATIONSSTRATEGY

IMPLEMENTATION OF THE RELATIONSSTRATEGY

MONITORING AND REPORTING

Stakeholder approachFinancial stakeholders

Clients

Employees

Local Authorities and Governments

Local communities

Local organisations and NGOs

Vendors

Business association

- Continuous dialogue with the financial community.- Commitment to ensuring the utmost transparency and fair access to confidential information. - Periodic publication of information through press releases and presentations.- Periodic meetings with institutional investors and financial analysts.- Individual shareholders can interface directly with the Company Secretary. - Constant reporting and frequent meetings on operating projects. - Meetings organised with clients and potential clients also include sustainability aspects.- Proactive engagement in HSE initiatives such as environmental awareness campaigns or

LiHS (Leadership in Health and Safety) programmes.- Commitment to recruiting and retaining talented personnel and promoting their

development, motivation and skills.- Guarantee a safe, healthy work environment and stable relations with the trade unions to

ensure an open dialogue based on cooperation.- Customised engagement with local governments and authorities. - Institutional and official relations with authorities, as well as collaboration with public bodies

to launch initiatives in favour of local development projects. - Contribution to progress in local communities in terms of social and economic development

and improvement in living conditions. Each operating company or project has a specificapproach that takes the Company’s role and the specific context into account.

- Active involvement of local communities in the implementation of local development projects.- Regular publication of information, objectives and results through Saipem’s institutional

channels.- Identification of organisations with proven experience and integrity with which to establish

short and medium-term relations in order to facilitate the implementation of specific projects.- Commitment to developing and maintaining long-term relations with vendors. The process

of vendor management makes it possible to assess their reliability from technical, financialand organisational capabilities.

- Proactive commitment in HSE initiatives such as environmental awareness campaigns orLiHS (Leadership in Health and Safety) programmes.

- Active participation and support for numerous international and local associations,contributing to sharing ‘best practices’ within Saipem’s business sectors.

- Contributions to strengthening Saipem’s role in its industries and its relations with otherstakeholders (i.e. clients, local stakeholders, etc.).

Protecting the environment and minimising environmentalimpactsSaipem is aware that all its activities, from theplanning and design stages to constructionand operation, may potentially have an impacton the environment.As described in the HSE Policy of SaipemSpA, the Company is committed to preventing

any potential impacts caused by its activitiesand to using energy and other naturalresources efficiently.Saipem adopts all the necessary measuresto ensure environmental protection whencarrying out its activities to minimise andcorrectly manage the significantenvironmental aspects and impacts that mayarise, both from activities managed directly bySaipem personnel using its own vessels, and



77

also from Saipem operational projectsmanaged by third parties (clients,subcontractors, etc.). Moreover, Saipem paysthe utmost attention to the constantimprovement of its environmentalperformance. In order to ensure these results,Saipem has implemented an EnvironmentalManagement System certified inaccordance with the ISO 14001international standard. In 2017, Saipemextended the certification in accordance withthis standard covering all the Group’s relevantentities. Furthermore, the Company invests inresearch and development programmes tocreate technologies that minimise theenvironmental impact of its operations, and toprovide a service to the reference sector, andorganises specific initiatives designed topromote environmental awareness and thedissemination of best practices, also involvingexternal parties as their potential targets.Further information can be found in the‘Research and development’ section of the‘Directors’ Report’ and in ‘SaipemSustainability 2017’.

Spill prevention and response

Spills are one of the most significantenvironmental issues for the sector in whichSaipem operates. Spill prevention andresponse actions are an absolute priority forthe Company. Saipem operates byminimising the risk of spills and adoptsadvanced equipment and procedures to

implement actions that reduce and manageemergencies. Saipem’s strategy formanaging potential accidental spills is basedon the following hierarchy of actions:- Prevention: actions have been implemented

to harmonise and improve processes andoperational control of those sites andvessels which are most at risk.

- Training and preparedness: specific trainingpackages are delivered on spill prevention,and spill drills are periodically organised,that are designed to strengthen emergencymanagement skills. The drills are carried outboth on land and at sea, involving, ifnecessary, clients or third partiesdesignated for emergency responseactivities.

- Emergency response: all Saipem sites havethe necessary equipment for tackling anyemergencies which may occur and specificSpill Response Teams have been set up.The sites implement a spill managementplan which identifies the accident scenariosand response procedures and can alsoinclude the intervention of designated thirdparties.

- Reporting: the data concerning spills and‘near misses’ (events linked to operatingactivities that could have causedenvironmental damage) are monitored andsubsequently analysed to assess thecauses and prevent any recurrences.

Further information on the actions taken bySaipem to reduce the risk of spills can befound in the ‘Spill prevention and response’section of ‘Saipem Sustainability 2017’.

The total number of spills decreased in 2017if compared to the previous year.Nevertheless, there were three significantspills:- the first spill consisted of water-based mud

contaminated with debris from thecementing activities (2,500 litres) of anonshore drilling rig in Chile due to theobstruction of a discharge line to the debriswell. Checks, cleaning and testing of thecirculation and discharge pipes were carriedout and actions were taken to improve themaintenance management on the system;

- the second was an oily substances spill

(around 1,000 litres) during activities relatedto filling a diesel fuel tank in Saudi Arabia.The Spill Response Team was immediatelymobilised after notification of theemergency. The contaminated sand wascollected and removed; technical preventionmeasures were taken on the site;

- the third was an oil spill (1,000 litres) thatoccurred during lifting operations of a smallgasoil tank from a supply vessel to theWHP3 platform at the Boscongo yard(Congo). Modifications in the execution ofsimilar procedures were introduced afterthe accident in order to minimise risks.

2015 2016 2017

Group Group Group Group Group Group total consolidated total consolidated total consolidated

Number of spills

Total (No.) 38 38 30 28 26 23

Chemical spills (No.) 4 4 5 3 8 8

Oil spills (No.) 34 34 25 25 18 15

Spill volumes

Total (m3) 2.18 2.10 4.26 3.01 6.21 6.07

Chemical spills (m3) 0.06 0.04 0.71 0.18 3.58 3.58

Oil spills (m3) 2.12 2.06 3.54 2.83 2.63 2.49



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Energy efficiency and GHG emissions

Saipem’s approach to energy efficiency (andconsequently to greenhouse gas emissions)has become increasingly more structuredover the years.Energy assessments, in line with the ISO50000:2011 standard, have been carried outover the years on selected assets: significantoffice buildings, vessels, construction yardsand drilling vessels. The choice of assets tobe assessed is made in accordance with thefollowing criteria: level of criticality in terms ofconsumption, level of control, feasibility ofintervention, and need for regulatorycompliance. These assessments laid thefoundation for identifying the areas whereenergy efficiency can be increased.A technical-economic feasibility study of thesolutions identified was carried out andsubmitted to management for the definition ofan action plan. Further information on the initiatives thatSaipem has implemented over the years withthe purpose of increasing energy efficiency inits operations can be found in the ‘Tacklingclimate change’ section of ‘SaipemSustainability 2017’. Saipem has developed a methodology toestimate emissions for each specificemission source. This methodology wasreviewed and validated by a third party.Activities to review emissions factors usedfor energy consumption from fuel (directemissions) were started in 2017.The calculation methodology will also beextended in 2018 to greenhouse gasemissions from electricity and transportation(indirect emissions). All Saipem projects andsites monitor its energy consumption data ona quarterly basis which is then used tocalculate GHG emissions. An in-depthanalysis dedicated to Saipem’s approach onclimate change can be found in the ‘Tackling

climate change’ section of ‘SaipemSustainability 2017’.Energy consumption increased by 11% in2017 against 2016 (7% considering the Groupperimeter), in line with an increase in activitiesat significant operating projects. The projectscontributing the most to the increase in energyconsumption are: Zohr (Egypt), which involvedmany vessels in the fleet, including Castorone,Saipem 10000 and Normand Maximus; theSCPX Pipeline project (Azerbaijan); JazanIntegrated Gasification Combined Cycle andEPC Khurais (Saudi Arabia); theHydrodesulfuring gas plant project at theMinatitlan Refinery Plant (Mexico) and TangguhLNG Expansion (Indonesia).These last two projects and the NormandMaximus vessel saw the most significantincrease in energy consumption compared tothe previous year.The increase in the consumption of gasoline ismainly due to the execution of two onshoreprojects: the EPC Khurais project (SaudiArabia), because of the greater use of vehicles,and the Southern Swamp Associated GasSolutions project (Nigeria), due to theconsumption of the PMS (PavementManagement System) for overland transport.The increase in the use of Diesel Marine Oil ismainly due to the use of the Normand Maximusvessel and the start-up of the new onshoreTangguh LNG Expansion project in 2017, astypically occurs in the first operational phases.The increase in the use of electricity fromrenewable sources is due to the full operatingefficiency reached by the San Vitale logisticsbase (Ravenna, Italy) in 2017 in producing aconstant quantity of renewable electricitythroughout the year. Moreover, an 11% increase in self-producedrenewable resources was also recorded inFano (Italy). This latter increase can beattributed to the contingent meteorologicalconditions over the year.

2015 2016 2017

Group Group Group Group Group Grouptotal consolidated total consolidated total consolidated

Energy consumption (ktoe) 514.0 498.3 411.7 393.8 440.6 430.8

Total direct consumption of energy, of which: (ktoe) 488.2 472.8 388.1 370.5 419.3 409.5

- Natural Gas (ktoe) 1.5 1.5 1.4 1.4 1.1 1.1

- Heavy Fuel Oil (HFO) (ktoe) - - - - 1.0 1.0

- Intermediate Fuel Oil (IFO) (ktoe) 21.0 21.0 7.5 7.5 12.8 12.8

- Light Fuel Oil (LFO) (ktoe) 28.7 28.7 1.4 1.3 4.5 4.5

- Diesel (ktoe) 290.6 275.3 256.6 238.9 246.6 236.9

- Diesel Marine Oil (ktoe) 139.7 139.7 111.8 111.8 141.8 141.8

- Gasoline (ktoe) 6.8 6.7 9.5 9.5 11.5 11.4

Indirect energy consumption

Electricity (MWh) 112,094.5 110,580.2 102,343.4 101,083.6 92,309.9 92,307.7

Renewable energy

Electricity produced from renewable sources (MWh) 309.9 309.9 305.0 305.0 352.4 352.3

Emissions

Total emissions (Scope 1) (kt CO2 eq) 1,504.2 1,466.3 1,203.4 1,177.2 1,299.7 1,269.3



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Water management

One of Saipem’s commitments expressed inthe HSE Policy comprises the protection ofnatural resources. Considering thegeographical location of the Company’simportant operating activities, water is asignificant aspect. In fact, Saipem is awarethat it carries out important operatingactivities in water stressed areas, where theimplementation of a strategy to reduceconsumption and use the resource

efficiently is considered a priority. The re-useof water, after suitable treatment, is a keyactivity for minimising water consumption.The commitment to responsible managementof water resources is transmitted to allcompany levels through the issue of annualGroup HSE plans, which are then implementedby the divisions and operating companies.Further details on the initiatives and strategiesin the use of water resources can be found inthe ‘Water management and pollution’ sectionof ‘Saipem Sustainability 2017’.

The increase in water consumption in 2017 isdetermined by the needs triggered mainly byselect onshore projects, amongst which:Southern Swamp Associated Gas SolutionsProject (Nigeria), SCPX Pipeline (Azerbaijanand Georgia) due to hydrotesting activities,EPC Khurais Project (Saudi Arabia), the gasstorage project at Cornegliano LaudenseNatural Gas Storage Plant (Italy) and theTangguh LNG Expansion project (Indonesia),which determined a consistent increase ingroundwater consumption for the civil works

phase. The percentage of re-used waterincreased very significantly compared to2016 thanks to its use for street cleaning andirrigation (necessary activities at sites in somegeographical areas). The main projects thathave determined this increase are JazanIntegrated Gasification Combined Cycle andSHY 1 - Pipeline (both in Saudi Arabia).The discharged water has increasedproportional to the increase in consumedwater.

Waste management

The Company implements a responsiblewaste management system that is specific forthe type of operating activities.Waste management is tackled by applying ahierarchy of operations mainly aimed atminimising the waste produced through theuse of appropriate procedures ortechnologies, re-using it as material, andrecycling it after the most appropriatetreatment.Priority is given to hazardous waste in the

context of action aimed at minimising wastegeneration. The Company promotes andimplements measures, also through theresearch and development of new materials,which allow hazardous materials to bereplaced with non-harmful alternatives.Saipem ensures appropriate wastemanagement though waste managementprocedures/plans at both operating companylevel and individual project and site level.In following this approach, Saipemimplemented numerous activities in 2017:some examples are shown in the ‘Waste

Water consumption2015 2016 2017


Total water withdrawal, of which: (103 m3) 5,226.4 4,989.8 6,972.9 6,807.3 7,690.4 7,546.0

- fresh water from public network/third party (103 m3) 2,614.9 2,581.1 3,054.5 2,983.6 1,375.1 1,317.5

- groundwater (103 m3) 1,571.6 1,413.6 2,571.9 2,499.6 5,441.2 5,368.1

- surface water (103 m3) 152.8 138.7 69.5 69.5 188.3 188.3

- sea water (103 m3) 887.0 856.5 1,276.9 1,254.5 685.8 672.1

Recycled and re-used water

Re-used water(103 m3) 309.9 297.7 308.4 308.5 1,179.8 1,179.2

(%) 6 6 4 4 15 16

Waste water discharges2015 2016 2017

Group Group Group Group Group Group(103 m3) total consolidated total consolidated total consolidated

Total waste water produced, of which: 3,746.3 3,615.0 4,858.9 4,745.8 5,657.0 5,536.7

- water discharged into sewers 569.4 539.2 427.7 485.4 642.8 642.8

- water discharged into bodies of surface water 1,182.2 1,182.2 2,556.3 2,504.6 3,605.4 3,605.4

- water discharged into the sea 1,064.6 964.4 1,142.7 1,023.6 515.4 395.1

- water discharged to other destinations 930.1 929.3 732.2 732.2 893.4 893.4



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generation and management’ section of‘Saipem Sustainability 2017’.The important reduction in waste generationthat took place over the year is mainly due tothe progress of the South Stream WP 5.1project (Russia) which saw a peak in wasteproduction in 2016 because the excavatedland, as required by local legislation, was putdown as non-hazardous waste disposed of inlandfill sites. Moreover, 2017 saw theconclusion of the project to dispose of andrecycle the Costa Concordia cruise ship,which also contributed to the reduction in

waste production. The project to dismantleand recycle the cruise ship was completedafter 3 years of work. This project, inpartnership with San Giorgio del Porto, was animportant example of green ship recycling.With regard to hazardous waste, its increase ismainly due to select onshore projects.The quantity of hazardous waste includesmuds from the waste water treatment plant(Jazan Integrated Gasification CombinedCycle and EPC Khurais projects, Saudi Arabia)and waste oil (from the Rabigh II project, SaudiArabia).

Social aspects

The Company operates in over 60 culturallyand geographically different countries often incontexts characterised by difficult situationsand border issues.Saipem has established a lasting relationshipof mutual cooperation with localstakeholders, particularly in the countrieswhere it has a long term presence. Somesignificant examples are the collaborateefforts forged with various universities andschools, representatives of local institutions,non-governmental organisations presentwhere Saipem operates and localorganisations promoting development andhealth programmes. Besides what is shown in this document,Saipem provides a detailed description of thestakeholder engagement actions in thesection of ‘Saipem Sustainability 2017’ on‘Stakeholder engagement in 2017’. Saipem isalways committed to minimising any negativeimpacts at the local level and contributing tomaximising positive impacts through theimplementation of strategies that supportlocal sustainable development. The overallrisk profile (including social ) for every projectis identified, analysed and monitored from thecommercial phase. Listening to andaddressing local stakeholder grievances, alsothrough structured engagement processes, isan important tool. The Company has drawn upa criteria (Guidance on GrievanceManagement) that regulates the system thatcollects and manages grievances from localcommunities in the operating realities where itis considered necessary. This has proven to

be especially useful for managing negativeimpacts.Different countries (e.g. Nigeria, Azerbaijan,Italy, Russia) and some of the more significantoperating realities (e.g. Tangguh LNGExpansion) have implemented such grievancemanagement systems with the purpose ofensuring effective communication with thecommunities.

Relations with the local context

Saipem is committed to establishing relationswith its local stakeholders based oncorrectness and transparency in order topursue concrete shared objectives forsustainable development. This is alsoachieved by strengthening mutual trust,seeking dialogue and promoting the rightconditions in order to establish lastingcooperation in the countries where theCompany operates (see ‘SustainabilityPolicy’).Everywhere Saipem is present, it plays anactive role, contributing as well to social andeconomic aspects and not only in terms oflocal employment and value creation.Saipem’s local presence takes two forms:long-term presence where the Companyowns fabrication yards or other operatingstructures; and short/mid-term presencewhere Saipem is involved in a specific project.Saipem’s involvement and dialogue with localstakeholders therefore depends on the typeof presence in each particular area .Where Saipem has a long-term presence, theCompany carries out specific assessments

2015 2016 2017

Group Group Group Group Group Group(kt) total consolidated total consolidated total consolidated

Total weight of waste produced, of which: 508.5 472.2 907.6 902.0 431.3 426.0

- hazardous waste disposed of in landfill sites 31.9 31.8 36.1 (*) 36.0 61.2 61.1

- hazardous waste incinerated 2.8 2.7 1.6 1.5 2.3 2.3

- hazardous waste recycled 5.0 4.8 18.7 18.3 6.9 6.9

- non-hazardous waste disposed of in landfill sites 285.8 282.4 140.0 (*) 135.6 172.4 168.6

- non-hazardous waste incinerated 6.4 5.8 3.0 3.0 3.6 2.6

- non-hazardous waste recycled 176.5 144.7 708.1 707.4 185.0 184.6

(*) This data has been modified against the previous year after a recalculation.



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designed to analyse the potential effects of itsactivities on the local socio-economiccontext, also through the use of tools such asthe Socio-Economic Impact Assessment (SIA)or the ESIA (Environmental Social ImpactAssessment). Based on the results of theseassessments, Saipem prepares an action planwhich defines the necessary actions tomanage the impacts on local communitiesand the stakeholder engagement. To supportthis process, Saipem has implementedspecific tools to analyse the local context andto identify and analyse the main stakeholdersin order to define specific intervention plans.In operating projects, Saipem supports theclient’s activities, in line with their requestsand indications in order to define an actionplan for the creation of local value for thespecific project.

Local presence

For Saipem, local presence means acquiringgoods and services from local suppliers,

creating employment at local level anddeveloping the know-how of localpersonnel, increasing employmentopportunities, and of suppliers, whilestrengthening their technological andmanagerial skill. In this way Saipemcontributes to creating developmentopportunities for people and companies in thecommunities where it operates.Saipem’s presence is also characterised by acommitment to developing and maintaining acontinuous relationship with localcommunities, clients and local suppliersmaking it possible to obtain benefits also interms of reduction in overall project costs andin the overall risk profile associated withoperating activities.Saipem has internally developed a model(SELCE, ‘Saipem Externalities LocalContent Evaluation’) to quantify the value ofits local presence in economic, employmentand human capital development terms.The SELCE model was validated in itsapplication to the Italian context in 2015 byNomisma Energia.

In 2017, local personnel was attested to be74% (76% in the total Group perimeter), afigure that saw a decrease against theprevious year mainly due to the decline in orconclusion of the operating activities inprojects where personnel was mainly local.The percentage, despite the slight reduction,remains very high and concretelydemonstrates Saipem’s constantcommitment to creating value in the areaswhere it operates employing local personneland strengthening their managerial andtechnical competence and skills throughtraining and on-the job experiences.The percentage of local managers is calculatedexcluding the data of France and Italy; theinclusion of these countries would result in apercentage of 76% of local managers.

Supply chain

Saipem has more than 26,000 first-tiervendors, of which around 7,000 qualified inthe year. From a numerical point of view, themain geographical areas where theCompany’s vendors operate are Europe andthe Americas. In 2017, the geographical areasin which Saipem ordered the most significantamount of goods and services are Europe, theMiddle East, South-East Asia and Oceania.

Saipem selects partners who share the samevalues and makes them active participants inthe risk prevention process (ref. ‘Our partnersin the value chain’ Policy). Saipem iscommitted to maintaining the trust put in thecompanies that work with and for Saipem andto improving mutual collaboration. With regardto this commitment, it shall be highlighted thatmore than 4,600 vendors have collaboratedwith Saipem for more than 10 years.

Management of an ethical supply chainThe management of an ethical supply chaincomprises several interrelated phases whichcan be summarised as follows: (i) vendorqualification, (ii) contractual phase, (iii) vendormonitoring and feedback.

(i) Vendor qualificationA vendor risk assessment is carried out duringthe vendor qualification phase to identifyvendors based on ethical and sustainabilityrisks depending on the country of operationand/or level of criticality of theproducts/services.From the human and labour rights (HLR)perspective, vendors operating in countriesclassified as high risk in these terms areanalysed based on the information anddocuments they submit during thequalification phase (questionnaire).

Local employment2015 2016 2017

Group Group Group Group Group Group(%) total consolidated total consolidated total consolidated

Local employees 80 78 80 78 76 74

Local (*) managers 44 43 45 44 46 45

(*) Local manager means the total of the middle and senior managers. An employee is considered local if he/she works in the country where he/she was hired.



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Similarly, for specific commodity codesconsidered as high risk for health and safety, aspecific assessment is carried out to evaluatethe Vendor’s HSE management system.Moreover, for specific commodity codes,vendors undergo a counterparty riskassessment process. This includes analysis ofits capabilities in economic, financial andorganisational terms, as well as a riskassessment with regard to corruption andreputation of Saipem. This is ensured throughin-depth checks, which include compliancewith the anti-corruption guidelines,involvement of the vendor in any type ofcriminal offence or terrorist activity, thestructure of its control chain, the managementand Board of Directors/owner. Depending on the vendor criticality, thequalification process may require anassessment visit which consists of on-siteverification, as well as of its technical,managerial, production, quality, HSE andlogistics capabilities.If operating in high risk countries, the vendormay be subject to an assessment visit alsoincluding labour rights aspects. The auditscope focuses on child and forced labour,freedom of association and the right tocollective bargaining, working hours,discrimination, disciplinary practices, andhealth and safety.

(ii) Contractual phaseSaipem is committed to conductingrelations with vendors in accordance withthe highest ethical standards, in compliancewith all the applicable laws and the Code ofEthics (in which human and labour rights arefundamental concepts), safeguarding its own

reputation and that of its subsidiaries.Environmental, social and governancerequirements are dealt with in Saipem’sgeneral terms and conditions. Vendors shalldeclare receipt and acknowledgment ofcontents of the ‘Sustainability Policy’ wherebySaipem undertakes to act as a sustainableCompany and contribute to the long-termgrowth and value creation through theeffective involvement of all stakeholders.Each party declares that its activities underthe purchase order shall, in no event, implyunacceptable risks to people or theenvironment, and undertakes to manage andmitigate these risks in its everyday operatingactivities. Moreover, vendors working withSaipem SpA are required to accept Model231 which includes the Saipem Code ofEthics. Similarly, when dealing with SaipemSpA affiliates, vendors are required to acceptthe Organisational, Management and ControlModel (OM&C Model) and the Code of Ethics.When the value of the supply for specificactivities, services and materials exceeds apredetermined amount, the specific vendor issubject to a counterparty risk assessment(the same process is also carried out duringthe vendor qualification phase).

(iii) Vendor monitoring and feedbackVendor performance is continuously monitoredand Saipem’s relevant functions are also askedto provide feedback regarding respect forworkers’ rights and the protection of healthand safety (e.g. occurrence ofaccidents/injuries during work execution,compliance with applicable HSE legislation andcontractual specifications, existence of legalproceedings for serious violations/offences).

Saipem people

As described in the ‘Our People’ Policy on themanagement of human capital, ‘people are anessential and key factor for the very existenceof the organisation, and the company canachieve its objectives only through thecommitment and expertise of its employees’.

The professional knowledge of employees is akey factor for ensuring sustainable growth andrepresents an asset to be safeguarded,valued and developed. Developing aknowledge-sharing culture is a primary meansto consolidating the wealth of acquiredknowledge and experience.

2015 2016 2017

Active vendors (No.) 32,931 29,959 26,345

Qualified vendors (No.) 10,844 6,571 6,918

Vendors qualified in the year operating in countries classified as high riskfor human and labour rights (%) - 60 59

New vendors assessed on labour rights (No.) 367 106 94

Vendors qualified for activities considered at HSE risk (%) - 6 4

Vendors assessed on HSE aspects and qualified (No.) 163 385 278

Qualification audits, of which: (No.) - 46 62

- on human and labour rights (No.) 13 6 14

- on HSE (No.) - 5 3

Employees trained in sustainable supply chains (No.) - 147 115

It must be stated that numbers in the table are representative both for the Group total and the Group consolidated perimeters, because a qualified vendor at corporate level can potentially workwith all Group realities.



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Workforce trend

The reduction in the workforce in 2017 is dueto the conclusion of some projects and to adecrease in operating activities in Indonesia,Azerbaijan, Mexico, Nigeria and Brazil. In thespecific case of Brazil, the decline wasdetermined by the rationalisation of personnelat Guarujà yard. The overall trend isdetermined by the reduction in or conclusionof operating activities in the following projectsrespectively: EPCI Kaombo, Sha Deniz 2, ElElcino, and Southern Swamp Associated GasSolution.The voluntary turnover of personnel with a keyprofessional role is down on the 2016 figure,testimony to the Company’s commitment tosafeguard the critical skills and know-how forthe business.The overall turnover rate in 2017 was 36%(35% for the total Group perimeter), a valuethat must be put into context with (a) theextremely dynamic situation in the Oil & Gasmarket, which has led, following a significantindustry-wide investment shrinkage , to aconsiderable reduction in operating activitiesand with (b) the nature of Saipem’s businesswhich, being a contractor, works though largescale projects that have variable durations(from a few months to years). Taking intoaccount these peculiarities, thequali-quantitative amount of Saipem’s humancapital is therefore subject to a naturalfluctuation connected with the differentoperating phases of projects and the cyclical

nature of clients’ investment. This entails aconsiderable increase in the workforce in agiven area at a given time and an equalreduction in the workforce towards the end ofthe project. The total turnover is calculated asthe ratio between annual exits and theaverage resources in the year.

Skills development

Saipem identifies the growth of its people, andmore particularly the identification, evaluationand development of the skills consideredcritical for the business, as a driver for thecompany’s success.In this sense and in the framework of focusingconstant attention on enhancing the specifictechnical/professional and behavioural skillsof each professional family, Saipem hasconsolidated a skill evaluation process formonitoring the skill and expertise levels ofits resources and identifying possible areasof intervention. These processes arefunctional both for a more targeted analysis ofthe company training requirements and aprecise definition of the training initiatives forthe skill development.In fact, Saipem ascribes great importanceto the training of its people, a tool forimproving and developing professional andbehavioural skills. The Company annuallydefines training programmes capable ofguaranteeing the development of know-howand skills for all workers, with particular

2015 2016 2017


Total employees at year end (No.) 46,346 42,408 40,305 36,859 35,918 32,058

Employee categories

Senior Manager (No.) 417 411 399 396 398 393

Manager (No.) 4,972 4,836 4,276 4,149 4,190 4,089

White Collar (No.) 21,549 19,837 18,496 16,721 16,642 14,971

Blue Collar (No.) 19,408 17,324 17,134 15,593 14,688 12,605

Employee categories

Americas (No.) 8,226 8,226 3,083 3,083 1,849 1,849

CIS (No.) 4,550 4,129 3,169 2,925 2,743 2,481

Europe (No.) 10,553 9,987 9,962 9,249 10,283 9,621

Middle East (No.) 8,779 7,549 9,219 8,177 11,472 9,571

North Africa (No.) 710 691 1,268 1,261 669 669

West Africa and the rest of Africa (No.) 7,310 5,608 6,637 5,197 5,589 4,554

Far East (No.) 6,218 6,218 6,967 6,967 3,313 3,313

Type of contract

Employees with full-time contracts (No.) 46,073 42,137 40,060 36,615 35,686 31,826

Employees with a key professional role (No.) 17,840 - 14,991 14,161 14,177 13,154

Employees recruited through an employment agency (No.) 4,489 2,996 5,643 4,403 5,829 4,111

Turnover

Voluntary turnover of employees with key professional role (%) 6.4 - 8.3 - 6.6 6.2

Total turnover (%) - - 40 - 35 36



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attention to the technical/professionalaspects, which are useful for projectmanagement, and the knowledge of legislativerequirements, compliance and corporategovernance.Great attention is also dedicated to thedevelopment and consolidation of a commonasset of know-how and skills, transversal tothe different contexts in which the Companyoperates and connected to the companyvalues and culture. In fact, Saipem promotes

training initiatives aimed at developingbehavioural and managerial skills in line withthe Group Leadership model.With the objective of continuously investing inthe young generations, Saipem likewiseinvests in the creation of specialist skills andthe transfer of know-how through trainingprogrammes and on-the-job training, targetedat young students from schools anduniversities with which the Company starts uplong-term partnerships.

2015 2016 2017


Employees covered by collective bargaining agreements (%) 59 60 58 60 49 62

Strike hours (No.) 35,018 33,568 65,196 55,961 1,143 1,143

2015 2016 2017

Group Group Group Group Group Group(hours) total consolidated total consolidated total consolidated

Training

Total hours of training, of which: 1,594,281 (*) 1,551,411 1,570,894 (*) 1,542,514 1,930,709 1,908,702

- HSE 1,165,952 (*) 1,124,376 1,324,853 (*) 1,297,778 1,699,674 1,677,713

- managerial potential and skills 36,390 36,268 24,446 24,385 15,090 15,090

- IT and languages 54,226 53,986 20,969 20,830 17,979 17,979

- professional technical skills 337,713 336,781 200,626 199,521 197,966 197,920

(*) The data has been recalculated following honing of the reporting methodology.

In 2017, the total number of training hoursprovided was higher than the previous yearparticularly with regard to the training hoursdelivered to Saipem subcontractors.Employee training hours were slightly downcompared to the previous year, in line with theconsiderable decrease in the workforce thattook place over the year.In quantitative terms, HSE training was the mostsignificant among the training initiativesorganised over the year. An average of 16.8hours of training were provided for employeesover 2017 (15.5 considering the total Groupperimeter), an improvement if compared to 2016.Out of a total of 1.7 million hours of training,more than 1.1 million were provided tosubcontractors.On average, each employee attended 24hours of training (21.9 at Group level), animprovement if compared to the 21.8 hours(20.5 at Group level) delivered in 2016.

Industrial relations

The global context in which Saipem operates,characterised by the management of diversitymeans that the management of industrialrelations requires the utmost care andattention. Over the years Saipem hasdeveloped an industrial relations model aimedat ensuring the harmonisation and optimalmanagement of relations with trade unions,employers’ associations, institutions andpublic bodies in line with company policies.Whenever a major organisational change isintroduced, it is common practice for theSaipem Group to communicate thedevelopment to the trade unionrepresentatives. In Italy, due to a specificprovision in the collective bargainingagreement, meetings with the unions areregularly convened to illustrate and explainany changes.

Out of over 22,000 employees (more than29,000 if we consider the total Groupperimeter monitored (the total includes full-time Italian employees, French employeesirrespective of the country they work in andlocal employees for all the other countries),13,694 workers (14,693 at Group level) arecovered by collective bargaining agreements.The downward trend for the total Groupperimeter can be attributed to the fact that agrowing proportion of Saipem personnel

works in countries where there are noprovisions for these types of agreements.At the same time, there has been a reductionin personnel in areas where these types ofagreements are widespread (Mexico, Brazil,Indonesia and Canada).With regard to the commitment to strengthenthe dialogue with the social partner, anagreement was signed in July 2017 toestablish the European Works Council(EWC), composed of 22 delegates



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representing Group companies operating inthe European Economic Area.The procedures for designating the nationaldelegates were thus completed in anticipationof the first meeting of the EWC to beorganised in the first months of 2018.Over 2017 International IndustrialRelations were characterised by the renewalof a set of collective agreements in differentoperating entities. New collective agreementsin joint ventures in Angola were signed in thefirst half of the year, with the introduction,among other things, of a health care systemfor employees and their families.Collective agreements were also renewed forpersonnel employed by Saipem ServicesMexico and at the Karimun yard in Indonesiaand for the drilling personnel employed inPeru. Furthermore, the renewal of thecollective agreement for the workersemployed by Ersai (Kazakhstan) is consistentwith the amendment of labour legislationenacted in the meantime in the country.In France, the Regional Department ofEnterprise, Competition, Consumer Affairs,Labour and Employment (DIRECCTE)approved the contents of the Plan deSauvegarde de l’Emploi (PSE) in December,whose procedures were launched by Saipemin May. Finally, consultations were initiatedwith trade union organisations in Norway forthe recourse to social security buffers in orderto manage staff turnover from the offshoredrilling rig Scarabeo 5 to Scarabeo 8.In 2017, a common understanding wasreached for the renewal of the 2016-2018Energy and Oil National Collective LabourAgreement in Italy. Furthermore, theCompany kept the trade unions constantlyinformed of the ongoing reorganisationprocess, even through a series of meetings,to present the rationale behind the neworganisational model and the size of each ofthe 5 divisions.For the Onshore Drilling division, the ordinarylay-off scheme was completed in September,which involved around 50 employees as ofSeptember 2016. Therefore, targeted trainingcourses have been launched for the workersconcerned.Several meetings have taken place betweenthe Company and regional and local unionrepresentatives regarding yard workloads atthe Arbatax fabrication yard.Finally, in the maritime sector, the renewal ofthe supplemental industry enterpriseagreement was signed with the trade unions.In 2017, there was a single strike event inNigeria, due to the conclusion of a project andthe resulting unemployment of personnel.

Diversity and equal opportunities

Saipem is committed to creating a workenvironment in which diversity and personal

and cultural views are considered to beresources and sources of mutual enrichment,as well as key factors for businesssustainability. This commitment is an essentialpoint of the ‘Our people’ Policy.As set out in the Code of Ethics, in fullcompliance with the legal and contractualregulations on the subject, Saipem iscommitted to offering equal opportunitiesat work to all its workers, acting so thateveryone may enjoy equal opportunities andcompensation, based solely on the criteria ofmerit and competence without discriminationof any kind. The functions responsible formanaging people must:- adopt, in any situation, criteria of merit and

competence (and anyhow strictlyprofessional) in all decisions concerninghuman resources;

- always select, hire, train, compensate andmanage human resources withoutdiscrimination of any kind;

- create a working environment wherepersonal features or beliefs do not give riseto discrimination and which ensures theserenity of all Saipem people.

More specifically, the Group’s compensationpolicies are based on the principle offairness, merit and local approach. In fact,Saipem defines its policies in full accordancewith the skills and performance assessmentand identifies compensation strategiesthrough a local approach that intercepts thespecific nature of the labour market and thelocal labour law context.Saipem is also committed to promotingprogrammes to guarantee generationalturnover, in order to ensure businesscontinuity and critical skills and promotechange. On the one hand, these initiativesprovide development opportunities for youngpeople and, on the other hand, enhancesenior resources and their know-how.Generational turnover is achieved at Saipemby supporting the motivation of the mostexpert resources to foster tutoring and thetransfer of knowledge, as well as creating theorganisational and managerial conditions toallow young people to obtain fullempowerment. Saipem guarantees its employees, dependingon the specific local circumstances, differenttypes of benefit allocation methods that mayconcern: forms of complementary pensionschemes; supplementary health insurancecoverage; mobility support services andpolicies; welfare initiatives and policies tosupport families; catering (company canteen,lunch tickets); and training courses aimed atensuring more effective integration within thereference socio-cultural context. As of todaythese benefits, where applicable, based onthe country/company/local legislation in force,are applied to the entire specific referencepopulation regardless of the type of contract(temporary/permanent), except for those



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particular services where the time scale ofperformance delivery may not be compatiblewith the duration of the contract.The protection of specific categories ofworkers is safeguarded through theapplication of local regulations andstrengthened by specific company policies,which highlight the importance of this issue.The goal is to ensure equal opportunities forall types of workers in an effort to deter the

onset of prejudice, harassment anddiscrimination of any kind (e.g. related tosexual orientation, colour, nationality, ethnicity,culture, religion, age and disability) fullyrespecting human rights. Specific regulationsin different operating companies also providefor the obligation of a minimum inclusion ofdisabled or young personnel, or compliancewith a certain proportion between local andexpatriate personnel.

2015 2016 2017

Group Group Group Group Group Group(No.) total consolidated total consolidated total consolidated

Women in the workforce

Women employed, by geographical area: 5,257 5,012 4,251 4,010 3,790 3,560

Americas 985 985 495 485 348 348

CIS 546 538 478 462 461 442

Europe 2,441 2,345 2,198 2,100 2,101 1,983

Middle East 168 166 129 123 120 115

North Africa 45 45 30 30 33 33

West Africa and the rest of Africa 479 340 250 249 312 224

Far East 593 593 560 560 415 415

Women in leadership

Women Senior Managers 22 22 23 23 23 23

Women Managers 704 694 600 591 612 606

Age ranges

Employees under 30 years 7,595 4,257 5,809 4,225 4,330 3,724

of which women 1,097 653 735 540 494 427

Employees between 30 and 50 years 31,436 29,754 28,418 26,353 25,673 22,919

of which women 3,529 3,615 2,961 2,876 2,744 2,601

Employees over 50 years 7,315 8,397 6,078 6,281 5,915 5,415

of which women 631 744 555 594 552 532

Multiculturalism

Number of nationalities represented in the employee population 128 126 120 115 115 115

As regards gender diversity, the percentageof women holding managerial positions withrespect to the total number of womenincreased from 15% in 2016 to 18% in 2017.Saipem is equipped with precise guidelines tostandardise compensation policies andreduce the pay gap between men and womenin all the local realities where it operates.Saipem supports the work/family balance ofits personnel through company regulationsand/or local policies, which guarantee parentalleave. These leaves differ only in time andmethod of abstaining from work. The growthin the average number of days of leave takenshould be highlighted even if there was anoverall reduction in the number ofbeneficiaries. In 2017, Saipem had 639employees (695 if we refer to the total Groupperimeter), 422 men (456 considering thetotal Group perimeter) and 217 women (239considering the total Group perimeter), whomade use of parental leave for a total of morethan 36,000 days (42,000 referring to the totalGroup perimeter). At the same time, the returnto work from parental leave by 538 employees(588 at Group level) was noted in the same

period, 420 men (454 at Group total level) and118 women (134 at total Group level), with an84% return rate from parental leave (85% attotal Group level), marking a slight increaseagainst the previous year.

Health

As described in the ‘The integrity in ouroperations’ Policy, Saipem considers thesafeguard of health a fundamentalrequisite and promotes thepsychophysical well-being of its people.This is a fundamental condition of the modusoperandi of Saipem which is committed tobeing a leader in safeguarding health, as wellas safety and the environment (further detailscan be found in the HSE Policy of SaipemSpA). The Company pursues this commitmentin compliance with the provisions on theprotection of privacy and national andinternational laws on the safeguard of healthand the prevention of diseases.Its implementation implies that theprogramme, for each work site, concentrates



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mainly on preventive measures and considersall the activities whose performance couldrepresent a health risk.Activities implemented include, for example,an assessment of the health risks, check-upsfor the issue of fitness certificates,vaccinations and chemoprophylaxis, healthinformation, monitoring of thehygiene/sanitary conditions, programmes forthe prevention of diseases and activities topromote health and physical activity.Saipem’s operating activities require themovement of a considerable number ofpeople, even to remote locations andcontexts, sometimes unknown to the workers.For this reason the Company ensures workersthe best possible medical assistancewherever they work, organises regular specificmedical examinations and consequentlyprepares medical fitness certificates, as wellas delivers training programmes to assignedpersonnel before undertaking any travel orbeing assigned abroad. This is to prevent risksof contracting diseases due to the effect ofthe climate, environmental and psychosocialfactors linked to the place of destination.The Company is equipped with structuredprocesses and a chain of well-definedresponsibilities to promptly manage anymedical emergency whatsoever.Saipem has developed a continually evolvinghealth management system, which is adaptedto the work environments, integrates the mostrecent epidemiological studies and isdesigned to ensure the best health monitoringand medical services.This system observes the principlesrecognised at international level and by locallaws, the WHO (World Health Organization)Beijing Declaration, ‘Global Strategy onOccupational Health for All’ (1994), Europeanlegislation and directive 2000/54/EC on the

protection of workers from risks related toexposure to biological agents at work, itsapplication in Italy through Legislative DecreeNo. 81/2008 as amended (called the ‘Law onOccupational Health and Safety’).This approach ensures effectiveness,flexibility and adequate bases for thedevelopment of a long-term health culturealso in the countries where the Companyoperates.The management system requires that therisks linked to the health of personnel areidentified and assessed (taking intoconsideration the frequency and potentialimpact), after which suitable preventive andmitigation measures are identified andimplemented. Risk monitoring is periodicallyperformed.The general principles for the safeguard ofhealth are based on the analysis of theactivities carried out in the work environmentand take into consideration the risks thatthose activities have on both the peopleinvolved in the operations in differentcapacities and the local community.The analyses carried out are specific for eachduty and destination. They include theidentification of the activities and operatingconditions in relation to normal, abnormal andemergency running conditions; the analysisof the possible contact routes for the riskagents and their combined action and a clearassociation of the hazards to the duties inrelation to the specific nature of the identifiedactivities. The results of the analyses allowthe personnel to be suitably equipped withproper preventive measures and dulymonitored. The occupational disease rate iscalculated as the number of occupationaldiseases reported divided by the hoursworked by Saipem personnel, all multiplied bya million.

2015 2016 2017


Occupational diseases (No.) 26 26 9 9 5 4

Occupational disease rate (ratio) 0.23 0.25 0.08 0.08 0.05 0.04

Safety

The safety of all Saipem personnel is a priorityand strategic objective of the Company.This commitment is also clearly described inthe ‘HSE’ Policy of Saipem SpA and ‘Theintegrity in our operations’ Policy.The safety of people is constantly monitoredand guaranteed in the management of itsactivities through an integrated health, safetyand environment management system, whichmeets the international standards and currentlegislation. In 2017, the OHSAS 18001 andISO 14001 certifications of Saipem SpAwas extended to the most significantbusiness entities in the Group, guaranteeing

a uniform and systematic approach in themanagement of the processes. Saipem defines a safety objectives plan everyyear at corporate, division and operatingcompany level, which is approved by the CEO,division manager and managing directorsrespectively. The incentive plans for the senior managersfor the areas under their responsibility islinked to the achievement of these objectives.These objectives include the:- identification of the hazards and periodic

assessment of the risks associated with thesafety of personnel, vendors and othersubjects involved in Company activities, aswell as risks for the company assets;



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- assessment of the risks caused by theinterference between the activitiescontracted to vendors operating onSaipem’s vessels or at their sites;

- training of personnel. The HSE trainingprocess can be broken down into severalphases: updating the HSE training protocol(which identifies the training needs basedon professional roles), definition andstandardisation of the courses on adedicated platform, provision of thecourses, monitoring and reporting on thetraining activities;

- adoption of adequate preventive andprotective measures to guarantee theintegrity and efficiency of the assets andthe health and safety of people;

- follow-up and control activities on theeffectiveness of the prevention and theprotective measures implemented;

- reporting, registration, analysis andinvestigation activities for accidents andnear misses;

- consolidation and analysis of safetyperformance.

The Company carries out HSE internal auditson: HSE management system, compliancewith the HSE legislative provisions and auditson the processes regarding safety.These audits (over 100 in 2017) involvedoperating companies, operational sites(including the fleet) and subcontractors.The Company has launched severalawareness campaigns over the years with thepurpose of spreading a deeper and moreentrenched safety culture. The Leadership inHealth and Safety (LiHS) programmestands out among these. This was launched in2007 with the purpose of promoting thedevelopment of leadership abilities andcultural change regarding safety. The purposeof the programme is to strengthen Saipem’shealth and safety culture, disseminating safebehaviours throughout the Company andfocusing on the development of leadership atall levels. Saipem created the Leadership inHealth and Safety (LHS) Foundation in 2010from the internal success of this programme.The Foundation supports companies andorganisations in promoting a safety culture byimplementing the LiHS programme.The Foundation is active in the non-profitsector and operates by organising trainingworkshops in schools, shows and culturalevents to achieve zero accidents, triggeringvirtuous behaviour in terms of safety.The Foundation also sponsors research incollaboration with some of the main Italianuniversities to enrich and enhance the cultureof health and safety.

At Saipem, the health and safety culture ofworkers is guaranteed and supported by theexternal regulatory environment, mainlycharacterised by laws and agreements atnational and company level, and by an internalenvironment characterised by specificpolicies on health and safety that setparticularly stringent criteria compared to thelocal contexts, which today still haveregulatory systems in the process ofdevelopment. Moreover, not all countries inwhich Saipem operates have trade unions atboth national and local levels. Where specificagreements are in place, they can be brokendown into three main lines:- the establishment of workers’

representatives for health and safety(composition and number);

- specific training for safety officers (thoseappointed by Saipem and workers’representatives) and the distribution ofinformation on safety issues to allemployees with particular reference tohealth and safety at work courses,firefighting courses, first aid courses andmandatory specialist courses for ‘SpecialOperations’ (Onshore-Offshore);

- regular meetings between the company andworkers’ representatives.

In Italy, workplace health, safety and theenvironment issues are governed by specificcontractual provisions and the NationalCollective Labour Agreement. In particular, thecollective agreement provides for theappointment of corporate representatives ofthe workers for their protection in the areas ofhealth, safety and environment (RLSA).The appointment is made by election and thenumber of representatives is established bylaw and the collective bargaining agreement.There are a total of 19 RLSA at the SaipemItalian offices. A specific trade unionagreement signed by Saipem and the tradeunions defines the competences of the RLSAand their full authority to carry out theiractivities even over workers assignedtemporarily to activities at yards andwork-sites other than those of origin.It should also be noted the presence ofinstitutes in foreign countries, whereparticipation is shared between managementand the workforce for the management ofinitiatives and programmes regarding healthand safety in accordance with the referenceregulations in different national situations.Among these are the Saipem Group entitiesoperating in Algeria, Angola, Bolivia, Brazil,Canada, Colombia, Congo, Croatia, Ecuador,France, Indonesia, Malaysia, Mexico, Norway,Peru, United Kingdom, Romania and Venezuela.



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All the safety statistics also includeperformances by subcontractors, with theexception of the absenteeism rate.Unfortunately, there were 3 fatal accidents in2017 involving subcontractor personnel inBrazil, Saudi Arabia and Singapore due to thefollowing causes: an explosion duringdepressurisation of a subsea system, a fallfrom height while a scaffold was beingdismantled and a crane boom striking anindividual during its installation. In-depth investigations were conducted toidentify the causes of these accidents and theappropriate action to reduce the possibility ofsuch accidents from being repeated: some ofthe most significant actions concernimproving or reinforcing the competency ofkey resources in areas such as ‘working atheight’ training and simultaneous operations. Saipem invests significant resources to trainits personnel on HSE topics throughcampaigns and specific programmes, in orderto increase the awareness of the risk of itsown activities, and in strengthening its ownHSE management system. It is Saipem’s duty,as a responsible employer, to do everythingpossible to prevent accidents at work.The results of Saipem’s continuous efforts aredocumented by the trends in the mainindicators (TRI - Total Recordable Incidentsand LTI Lost Time Injury). The TRI FrequencyRate (TRIFR) for 2017 is 0.51, data thatconfirms the improvement trend compared to0.62 for 2016 (0.78 if we consider the totalGroup perimeter) and 1.01 for 2015 (1.08 withthe total Group perimeter).Confirming the solidity of the system and itshomogenous implementation, the results ofthe activities carried out by a third-partycertification company (in order to obtainextensions for the OHSAS 18001 and ISO14001 certifications), in line with the results ofthe internal audits carried out at corporatelevel, have shown a decrease innon-conformities and an increase in its areasof strength. The total absenteeism hours for Saipempersonnel in 2017 were about 1.8 million, withan equivalent absenteeism rate of 4.7% (4.1%if all Saipem Group companies were

considered), a value that is overallsatisfactory. The total absenteeism hours aremainly determined by absences from illness,paid and unpaid leave provided for by localregulations. The absenteeism rate is in linewith the previous year’s rate. The totalabsenteeism hours have also declined inconsidering the overall decrease in theworkforce.An explanation of the methodology forcalculating the main indicators is shownbelow:- the man-hours worked are the total number

of hours worked by employees of Saipemand contractors working at the operatingsites;

- lost days of work translate into the totalnumber of calendar days in which the injuredperson was not able to do their job as aresult of an LTI. The calculation for the lostdays starts from the second day after anaccident until the day when the person iscapable of returning to work. The calculationdoes not include fatal accidents;

- FTLFR, LTIFR and TRIFR are calculated asthe number of fatal accidents, LTI and TRI,divided by the hours worked, all multipliedby one million. These ratios include injuriesboth to employees of the Company and ofcontractors;

- the Severity Rate is calculated as days ofwork lost divided by the hours worked,multiplied by one thousand;

- the employee absenteeism rate iscalculated as the ratio between the totalhours of absence and the theoretical totalannual hours to be worked. The theoreticalannual hours of work are calculatedproportionately to the total work force atDecember 31. The total hours of absencedo not include parental leave and estimatedholiday hours.

Asset integrity

Saipem strongly pursues the effectiveimplementation of its asset integritymanagement system as an outcome of gooddesign, construction and operating practices

2015 2016 2017


Man-hours worked (millions of hours) 234.4 213.2 258.6 222.5 281.9 220.8

Fatal accident (No.) 2 2 1 1 3 3

Lost Time Injuries (LTI) (No.) 70 61 51 40 37 34

Man-hours worked (No.) 4,439 4,065 3,106 1,705 1,857 1,380

Severity Rate (ratio) 0.02 0.02 0.01 0.01 0.01 0.01

Total Recordable Incident (TRI) (No.) 253 215 201 139 144 113

Absenteeism rate (%) 4.6 4.8 4.9 4.2 4.1 4.7

Fatal Accident Frequency Rate (FTLFR) (ratio) 0.85 0.94 0.38 0.45 1.06 1.36

LTI Frequency Rate (LTIFR) (ratio) 0.31 0.30 0.20 0.18 0.14 0.17

TRI Frequency Rate (TRIFR) (ratio) 1.08 1.01 0.78 0.62 0.51 0.51



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adopting the integrated management ofbarriers to reduce the risks associated withMajor Accident Events (MAE).Asset integrity refers to the prevention andcontrol of the events with low frequency andhigh/severe consequences on people, theenvironment, assets or project performance.A dedicated team has been set up to developan asset integrity management system modelin line with the best Industrial practices.The asset integrity model follows a typicaldeming cycle: planning, operations,performance monitoring and continualimprovement.Saipem undertakes to prevent risks toimprove the integrity of its operations. For thispurpose, it adopts a proactive approach in themitigation of risks as an integral part of itsmanagement and business activities.Further information can be found in the ‘Safeoperations, asset integrity and process safety’section of ‘Saipem Sustainability 2017’.

Fighting corruption

Saipem has always conducted its businesswith loyalty, fairness, transparency, integrityand in full observance of laws and regulations.In this context, corruption is an intolerableimpediment to the efficiency of business andfair competition.Amongst its various initiatives, Saipem hasimplemented the ‘Anti-corruptionCompliance Programme’, a detailed systemof rules and controls aimed at preventingcorruption in line with best internationalpractices and the principle of ‘zero tolerance’expressed in the Code of Ethics.In particular, the Saipem Code of Ethics (lastupdated on January 15, 2018) establishesthat ‘bribes, illegitimate favours, collusion,requests for personal or career benefits foroneself or others, either directly or throughthird parties, are prohibited without anyexception’.The Saipem ‘Anti-Corruption ComplianceProgramme’ is characterised by its dynamismand constant attention to the evolvingnational and international regulatoryframework and best practices.Over the years, and in view of continuousimprovement, the ‘Anti-Corruption

Compliance Programme’ has been constantlyupdated in line with the applicable provisionsin force (including, inter alia, the UnitedNations Convention Against Corruption, theOrganisation for Economic Cooperation andDevelopment Convention on CombatingBribery of Foreign Public Officials inInternational Business Transactions, ItalianLegislative Decree No. 231 of June 8, 2001,the US Foreign Corrupt Practices Act and theUK Bribery Act).More specifically, the Board of Directors ofSaipem SpA approved the ‘Anti-CorruptionManagement System Guideline’(Anti-Corruption MSG) on April 23, 2012.This repealed and replaced the previousAnti-Corruption Compliance Guidelines inorder to optimise the compliance system inforce. All the detailed anti-corruptionprocedures for specific risk areas were thenupdated (inter alia, the procedures for jointventure agreements, sponsorships, gifts,non-profit initiatives, vendors and consultants,relations with public administration andmerger & acquisition transactions).Saipem then issued the latest update of the‘Anti-Corruption Management SystemGuideline’ in 2015. This represented animprovement in the regulatory context of the‘Anti-Corruption Compliance Programme’ andthe Saipem Corporate Governance systemsregarding anti-corruption.The above-mentioned MSG was examinedand approved by the Board of Directors ofSaipem SpA and it is mandatory for SaipemSpA and all its subsidiaries to adopt andimplement it.All Saipem people are responsible forcomplying with the anti-corruptionregulations: for this reason all the documentsare accessible through the website and theCompany intranet portal. In this context,managers hold a role of primary importanceand they are called upon to promotecompliance with anti-corruption proceduresby their colleagues.Aware that the primary element for developingan effective strategy to combat thephenomenon of corruption lies in developinga thorough understanding of the tools for itsprevention, Saipem regards these traininginitiatives and awareness activitiesconsiderably important.

2015 2016 2017

Group Group Group Group Group Group(No.) total consolidated total consolidated total consolidated

Employees trained on issues of compliance,governance, ethics and anti-corruption - - 2,813 2,802 1,962 1,954

Hours (*) of training on issues of compliance, governance,ethics and anti-corruption 4,264 3,884 6,713 6,664 6,201 6,178

(*) The number of training hours has been calculated by multiplying the average number of hours by the average duration of the courses.

Moreover, the Saipem Internal Audit functionshall independently review and assess the

internal control system in order to verifycompliance with the requirements of the



91

Anti-Corruption MSG, on the basis of its ownannual audit programme approved by theBoard of Directors of Saipem SpA.Any violation, suspected or known, ofanti-corruption laws or anti-corruptionprocedures must be immediately reportedthrough the channels indicated in the‘Whistleblowing reports received by Saipemand by its subsidiaries’ procedure, which isavailable on the Company website and theintranet portal. Disciplinary measures areprovided for Saipem people violating theanti-corruption regulations and omitting toreport violations they are aware of.Saipem expects all of its Business Partners tocomply with all applicable laws, includingAnti-Corruption laws, in connection withSaipem’s business, and to undertake tocomply with the reference principles of theAnti-Corruption MSG.

Human rights

Saipem is committed to protecting andpromoting human and labour rights whenconducting its business, taking intoconsideration both the work standardsrecognised at international level and the locallegislation in the countries where Groupcompanies operate. This commitment is partof Saipem’s modus operandi and is also madeclear in the ‘Our People’ Policy. With reference to the management ofrelations with personnel worldwide, Saipemadheres to the principles of the UNUniversal Declaration of Human Rights andthe OECD Guidelines for MultinationalEnterprises. Moreover, Saipem’s CEO isformally committed to promoting and abidingby the principles set forth in the UN GlobalCompact, to which Saipem adheres, includingprinciples 1, 2, 3, 4, 5 and 6 (regarding labourrights and the promotion of thesocio-economic development in theterritories). In so doing, due attention is given to thefundamental International LabourOrganisation (ILO) conventionsencompassing the protection against forcedand child labour, the promotion ofnon-discrimination on employment andoccupation, as well as freedom of associationand collective bargaining. Especially with regard to the latter, Saipemhas a sound record of relations with tradeunion organisations in a variety of geographiclocations and covering several segments ofits business. Further details can be found inthe ‘Industrial relations’ section.Saipem promotes and encourages a constantopen dialogue between employer andemployees so that the interests of the partiescan be best realised in consideration of thefact that a regular and effectivecommunication flow between the two parties

appreciably reduces the probability ofmisunderstandings and conflict arising at theworkplace.Therefore, Saipem takes steps to ensure thatthere is a widespread and shared systembetween all the workers in Italy and around theworld which permits an easy and effectiveresolution of any conflicts linked to issues thathave implications of an administrative nature.It is for this purpose that a procedural tool hasbeen drawn up. It defines the methods forresolving conflicts, the schedules, the peopleinvolved in the process and knowledge of theoutcomes for the workers.Saipem’s attention to labour rights extendsalso to offshore personnel with full abidanceto the principles and the rights recognised toseafarers promoted under the ILO MaritimeLabour Convention of 2006 (MLC 2006).Seafarers also have the right to submit acomplaint according to a structured process ifa violation of their rights arises.In order to guarantee that each person isaware of their rights, all people working onoffshore vessels receive a copy of the relatedprocedure and all the forms necessary for thecomplaint, together with a copy of theiremployment agreement. The captain and/orthe Company examines any complaint, andany instance of harassment is managed incompliance with the Company’s disciplinaryprocedures.Finally, based on commitments made by theGroup in the context of the Global Compact,Saipem has completed a human rightstraining and awareness programme for HRpersonnel operating in 20 countries. At thesame time, a similar initiative was targeted atsubcontractors to seek a shared and moreeffective approach to promoting andrespecting human rights.

Security practices

In the management of security activities,Saipem gives utmost importance torespecting human rights. Saipem iscommitted to adopting preventive measuresaimed at minimising the need for response bypublic/private security forces in the case ofany threats to the safety of its people and theintegrity of its assets.The Company manages relations with localsecurity forces in order to ensure a sharedcommitment to human rights, as well as theadoption of rules of engagement that limit theuse of force.Before signing a contract, vendors of securitygoods and services are subjected to a duediligence to verify that there are nocounter-indications connected with theviolation of human rights.Saipem has introduced clauses regardingthe respect for human rights in its contractswith these vendors since 2010, and failure to



92

observe them leads to the withdrawal of theCompany from the contract. As of today, thecontractual clauses on human rights havebeen included in the ‘General terms andconditions’ of contracts.For new projects in which Saipem isresponsible for security, the Company carriesout a Security Risk Assessment on thecountry in question before initiating a tenderprocess. If it decides to go ahead with issuinga call for bids, Saipem prepares the ProjectSecurity Execution Plan in which thesecurity risk connected with the operatingactivities and the context is analysed,including human rights violation issues.The actions required to manage and reducethese to a minimum are decided based on therisks identified.In November 2017, a session (the fourth) ofthe HOPE programme (Human OPerationalEnvironment, training programme on humanrights and work practices) targeted at projectpersonnel in Angola was delivered.Further information can be found in the‘Human and labour rights’ section of ‘SaipemSustainability 2017’.

Reporting suspected violations

A fundamental part of Saipem’s structuredsystem for managing stakeholder complaintsis the reporting management process(‘whistleblowing’), governed by a specialCorporate Standard made available to allemployees (through various means, amongwhich the intranet and company noticeboards) and external stakeholders (publishedon the Company’s website).

The term ‘report’ refers to any informationregarding possible violations, behaviour andpractices not in line with the Code of Ethicsand/or which may cause damage or injury toSaipem SpA (even if only to its reputation) orany of its subsidiaries, by employees,members of company bodies, Saipem SpAand its subsidiaries’ audit companies and thirdparties in a business relationship with thesecompanies, in one or more of the followingareas: internal control system, accounting,internal controls on accounts, audits, frauds,administrative responsibilities underLegislative Decree No. 231/2001, and others(such as violations of the Code of Ethics,mobbing, security, and so on). Saipem hasprepared various channels of communicationin order to facilitate the sending of reports,including, but not necessarily limited to,regular post, fax numbers, yellow boxes,e-mail, and communication tools on theintranet/internet sites of Saipem SpA and itssubsidiaries. The Internal Audit functionensures that all appropriate controls are inplace for any facts that have been reported,through one or more of the followingactivities, guaranteeing that: (i) these arecarried out in the shortest time possible andrespecting the completeness and accuracy ofthe investigation; (ii) the utmost confidentialitywith methods suitable for protecting theperson reporting. The investigation comprisesthe following stages: (a) preliminary check;(b) assessment; (c) audit; (d) monitoring ofcorrective actions. The Internal Audit preparesa quarterly report on reports received that,following examination by the Saipem Board ofStatutory Auditors, is transmitted to therelevant people for suitable assessment.

(No.) 2015 2016 (*) 2017

Number of files

Total, of which: 78 125 118

- founded or partially founded 20 28 20

- unfounded 58 97 67

- open - 4 31

(*) The count for closed files includes 4 closed files concerning the system of internal controls and risk management and re-opened and closed also for other matters concerned.



93

The following files were opened in 2017: 12files on issues of discrimination, of which 6 arestill open and 6 closed; 26 files on issues ofworker’s rights, of which 14 still open and theremaining 12 closed; 3 files on issues of localcommunity, of which 1 still open and 2 closed.All 41 files were transmitted to the competentcompany bodies (Board of Statutory Auditorsof Saipem SpA, Compliance Committee ofSaipem SpA and the Compliance Committeesof the companies involved in the reports).With regard to the issues of discrimination,with reference to the closed cases, thecompetent company bodies decided to close3 on the basis of investigations carried out,considering that there were no violations ofthe Code of Ethics with reference to the factsreported. A violation was confirmed in 2 casesand in 1 case corrective actions wereidentified even though there were noviolations. The corrective actions consisted ofthe following: the dismissal of an employee,the issue of a warning letter and sensitivitytraining to improve employee behaviour.It should also be noted that 7 discriminationcases were closed in 2017; they were stillopen at the time of the last reporting. Of the 7files closed, 6 were unfounded and 1 waspartially founded. With regard to this last case,corrective actions were carried out on theperpetrators of the behaviour, which consistedof a verbal warning, and planning of a specifictraining session on leadership development.With regard to the issues of workers’ rights,with reference to the closed cases, in 7 casesthe competent company bodies decidedupon closure deeming that there were nocases of violation of the Code of Ethics with

reference to the facts reported, whilstviolation was confirmed in 1 case and 2 caseswere partially confirmed and in 2 cases,though without violation, corrective actionswere taken. The actions were the following:the dismissal of an employee, the monitoringof the future behaviour of another employeeby management, the implementation of anawareness course on the subject of sexualharassment and interviews with employees onthe identified issues. It should also be notedthat 9 workers’ rights cases were closed in2017; they were still open at the time of thelast reporting. 6 files were unfounded, 2 werefounded and in 1 case, though there was noviolation, corrective action was highlightedconsisting of the dismissal of the perpetratorof the behaviour, carrying out sensitivitytraining on the topic of sexual harassment,creating work groups to identify improvementpoints with reference to the managementworkloads and interpersonal relations and theplanning of specific meetings in order tounderstand and improve the relationshipdynamics in the workplace.As regards issues on the relations with localcommunities, with reference to the twoclosed cases, the competent companybodies decided to dismiss them on the basisof the investigations carried out that deemedthat there was no violation of the Code ofEthics with reference to the facts reported.No corrective actions were implemented.1 case dealing with issues regarding the localcommunities from 2016 was closed in 2017.This file was unfounded and no correctiveactions were identified with regard to thisoutcome.

(No.) 2015 2016 2017

Files on cases of discrimination



- unfounded 9 17 4

- open - - 6

Files on workers’ rights



- unfounded 10 23 9

- open - 1 14

Files on violations of the rights of local communities


- founded or partially founded - - -

- unfounded 2 2 2

- open - - 1

The data is updated as of December 31, 2017.

Details of some file categories are provided below:



94

Reporting boundary

The ‘Consolidated Non-Financial Statements’contains the information and performanceindicators for Saipem SpA and the fullyconsolidated subsidiaries in the ‘AnnualReport’, as prescribed by Italian LegislativeDecree No. 254/2016.Any changes in the reporting boundary fromthe previous year are described in the‘Principles of consolidation’ section of the‘Annual Report’.In some contexts, described below, there aredeviations on the consolidation boundaryprevious defined, in any case guaranteeingthe criterion of significant impact: i.e. theinformation necessary to ensureunderstanding of the Group’s activities, its

operations, its results and the impactproduced by it are always and in any caseensured.In fact, for some material issues, the impact ofSaipem’s activities goes beyond the boundaryof the organisation (see table below).In line with international reporting bestpractices and to guarantee comparability ofthe performances against the informationpublished in other company documents, theindicators are also reported with a moreextended reporting boundary than thatrequired by Italian Legislative Decree No.254/2016, including non-consolidatedcompanies and joint operations, joint venturesor associates, over which Saipem controlsoperations1. These indicators are marked bythe wording ‘Group total’.

Reporting areaSafety

Environment

Relations with local stakeholders

Differences in the consolidation boundaryIt also includes the data for subcontractors operating on Saipem and partner sites inactivities where Saipem is responsible for HSE management.It also includes the data for subcontractors operating on Saipem and partner sites inactivities where Saipem is responsible for HSE management. Furthermore, the significancelimits for the inclusion of operating sites in the boundary (no. of people on site or, in thecase of offices not belonging to Saipem, the type of lease contract) are also included.The companies that do not have significant operating activities are excluded.

Limited assurance

Reporting is subject to limited assurance byan independent company (hereinafter ‘theauditor’), the auditor of the annual report.The auditor certifies, in the context of thestatutory audit, that the ‘ConsolidatedNon-Financial Statements’ have beenapproved by the Board of Directors.The auditor also expresses, with anappropriate report, the certification that,

based on the work carried out, no elementshave come to its attention to make it thinkthat the ‘Consolidated Non-FinancialStatements’ have not been prepared, in allsignificant aspects, in compliance with theprovisions of Articles 3 and 4 of ItalianLegislative Decree No. 254/2016 and the GRIG4 Guidelines. The Saipem SpA Board ofDirectors approved the ‘ConsolidatedNon-Financial Statements’ on March 5, 2018.

Material topic External boundary LimitationsPeople safety Vendors and subcontractors Partial, for vendorsSafe operations, asset integrity and process safety Vendors and subcontractors Partial, for vendorsAnti-corruption and ethical business practices Business partners, vendors and subcontractors -Human and labour rights - -Technology and operational innovation - -Training and development Subcontractors (HSE training) -Spill prevention and response Vendors and subcontractors VendorsEthical supply chain Vendors and subcontractors Partial, for vendorsWater management and pollution Vendors and subcontractors VendorsHealth and well-being Some local communities -Energy efficiency Vendors and subcontractors Vendors

(1) The ‘Group total’ perimeter includes, in relation to the environmental, health and safety aspects (including HSE training),the following companies: SAGIO - Companhia Angolana de Gestão de Instalaçao Offshore Ltda, Petromar Lda, STAR CoLtd. The perimeter concerning personnel and human rights has been extended to include the following companies:Petromar Lda, STAR Co Ltd, Charville Lda, Saipar Drilling Co BV, TSGI Mühendislik Insaat Ltd Sirketi, ASG Scarl, CEPAV(Consorzio Eni per l’Alta Velocità) Due, KWANDA Suporte Logistico Lda. Regarding the aspects related to anti-corruption,the extension of the perimeter concerns the following companies: Petromar Lda, TSGI Mühendislik Insaat Ltd Sirketi,Saipem Taqa Al Rushaid Fabricators Co Ltd.

The ‘External boundary’ column specifies thecategories of stakeholders impacted bySaipem’s operations, for every material topic.

Any limitations affecting the boundary ofevery material theme are also shown in the‘Limitations’ column.



95

GRI Content Index

‘In accordance’ - Core option

Legend of the documentsDNF17: Consolidated Non-Financial Statements RF17: Annual Report 2017CG17: Corporate Governance and Shareholding Structure Report 2017

GENERAL STANDARD DISCLOSURES

General StandardDisclosures

Page No. or link

G4-1

G4-3G4-4G4-5G4-6G4-7G4-8G4-9

G4-10G4-11G4-12G4-13

G4-14G4-15G4-16

G4-17G4-18G4-19G4-20G4-21G4-22G4-23

G4-24G4-25G4-26G4-27

G4-28G4-29

G4-30G4-31G4-32G4-33

G4-34

G4-56

‘Letter to the shareholders’, pages 2-3 (RF17).

Cover (RF17).‘Directors’ Report’, pages 20-35 (RF17).Inside back cover (RF17).Inside cover (RF17).Table ‘Shareholding structure’, page 58 (CG17).‘Directors’ Report’, pages 20-35 (RF17).‘Saipem people’, pages 82-83 (DNF17); ‘Letter to the shareholders’, pages 2-3 (RF17); ‘Financial andeconomic results’, page 36 (RF17).‘Saipem people’, pages 82-83 (DNF17).‘Saipem people’, pages 84-85 (DNF17).‘Social aspects’, pages 81-82 (DNF17).‘Company management and organisation model’, pages 74-75 (DNF17); ‘Social aspects’, pages 81-82(DNF17); ‘Shareholder structure of the Saipem Group’, pages 5-7 (RF17); ‘Consolidation principles’, pages109-112 (RF17).‘Directors’ Report’, pages 58-67 (RF17).‘Fighting corruption’, pages 90-91 (DNF17).Saipem is an active member of 89 business associations at the national and international level. The parent companyis a member of 29 associations, among which ANIMP, IADC, IMCA, IPLOCA, UN Global Compact and WEC.

‘Reporting methodologies, principles and criteria’, pages 73-74 (DNF17); ‘Reporting boundary’, page 94(DNF17); ‘Shareholder structure of the Saipem Group’, pages 5-7 (RF17); ‘Scope of consolidation atDecember 31, 2017’, pages 130-134 (RF17).

‘Reporting methodologies, principles and criteria’, pages 73-74 (DNF17); ‘Company management andorganisation model’, pages 75-76 (DNF17).

Cover (RF17).Italian Legislative Decree No. 254/2016 came in effect as of the 2017 reporting year. This document istherefore the first ‘Consolidated Non-Financial Statements’. Nevertheless, the Company has beenreporting on sustainability performance by publishing specific documents each year since 2006.‘Reporting methodologies, principles and criteria’, pages 73-74 (DNF17).Inside back cover (RF17).‘GRI Content Index’, pages 95-97 (DNF17).‘Limited assurance’, page 94 (DNF17).

‘Board of Directors’, pages 16-28 (CG17); ‘Board Committees’, pages 30-35 (CG17); ‘Structure of theBoard of Directors and its Committees’, page 59 (CG17).

‘Company management and organisation model’, page 75 (DNF17).

Organisation profile

Identification of the material aspects and boundary

Stakeholder engagement

Document profile

Governance

Ethics and integrity

Strategy and analysis



96

SPECIFIC STANDARD DISCLOSURES

SpecificStandard

Page No. or link Omission (i)

EconomicsMarket presenceG4-DMAG4-EC6

G4-DMA

G4-EN3

G4-DMA

G4-EN8

G4-DMA

G4-EN15

G4-DMA

G4-EN22

G4-EN23

G4-EN24

G4-DMAG4-LA2

G4-DMAG4-LA6

G4-DMAG4-LA9

G4-DMAG4-LA12

‘Social aspects’, page 81 (DNF17).

‘Protecting the environment and minimisingenvironmental impacts’, page 78 (DNF17).‘Protecting the environment and minimisingenvironmental impacts’, page 78 (DNF17).



‘Protecting the environment and minimisingenvironmental impacts’, pages 77 -80 (DNF17).‘Protecting the environment and minimisingenvironmental impacts’, page 79 (DNF17).

‘Protecting the environment and minimisingenvironmental impacts’, pages 79-80 (DNF17).‘Protecting the environment and minimisingenvironmental impacts’, page 77 (DNF17).

‘Saipem people’, pages 82-83, 85-89 (DNF17).‘Saipem people’, pages 85-89 (DNF17).

‘Saipem people’, pages 87-89 (DNF17).‘Saipem people’, pages 87-89 (DNF17).



The total energy consumption in 2017 was equivalent to18,435 TJ. The percentage of electricity consumed bythe Group that was produced by renewable sourcesdepends on the energy mix of the different countries.

The data on water quality (including treatmentwater) is not available as it was not systematicallyreported.

Project data, and thus geographical area data, ismonitored monthly. Considering that Saipem worksin more than 60 countries, it is considered moresignificant to provide aggregate data. Saipem doesnot monitor safety data by gender. The data onemployees and subcontractors operating at theGroup sites are shown in aggregate form so as toprovide an overview of safety management.

Training hours are not shown by gender andcategory because the IT systems used forreporting do not allow for differentiating the data atthis time.

The Board of Directors is composed of 9 members,of which 3 women. The age of the directors is notconsidered material. The data for the breakdown ofthe workforce by gender and age is expressed in anabsolute value and not as a percentage.

EnvironmentEnergy

Water

Emissions

Effluents and waste

SocialWork practices

Employment

Workplace Health and Safety

Training and education

Diversity and equal opportunity


SPECIFIC STANDARD DISCLOSURES

SpecificStandard

Page No. or link Omission (i)

G4-DMA

G4-LA14

G4-DMAG4-LA16

G4-DMA

G4-HR3

G4-DMAG4-HR4

G4-DMAG4-HR5

G4-DMAG4-HR6

G4-DMA

G4-HR10

G4-DMAG4-HR12

G4-DMAG4-SO4

G4-SO5

‘Social aspects’, pages 81-82 (DNF17).


‘Respect for human rights’, pages 91-93 (DNF17).‘Respect for human rights’, pages 92-93 (DNF17).

‘Saipem people’, pages 85-86 (DNF17); ‘Respectfor human rights’, pages 91-93 (DNF17).‘Respect for human rights’, pages 92-93 (DNF17).

‘Social aspects’, pages 81-82 (DNF17).‘Social aspects’, page 82 (DNF17).




‘Social aspects’, page 82 (DNF17).

‘Respect for human rights’, pages 92-93 (DNF17).‘Respect for human rights’, pages 92-93 (DNF17).

‘Fighting corruption’, pages 90-91 (DNF17).‘Social aspects’, pages 81-82 (DNF17); ‘Fightingcorruption’, pages 90-91 (DNF17); ‘Anti-corruptionprocedures’, pages 44-45 (CG17); ‘Board ofDirectors induction’, page 21 (CG17).

‘Legal proceedings’, pages 164-173 (RF17).

The data on vendors is collected by means of aqualification questionnaire and then analysed.New vendors who are assessed on labour rightsare reported in absolute value because thepercentage does not provide significantinformation to quantify the verification effort carriedout by Saipem.

The data on vendors is collected by means of aqualification questionnaire and then analysed.The percentage of new vendors assessed onhuman rights issues is not considered significant.Saipem assesses vendors who provide goods andservices representing more significant commoditycodes operating in countries considered critical.

The Saipem Code of Ethics (which makes Saipem’srepudiation of any sort of discrimination andcorruption clear) is provided to every newemployee (at the time of signing the contract) andcommunicated to governance committeemembers and business partners. As regards themembers of the governance committees, theCompany has prepared and implemented a ‘BoardInduction’ programme since May 2015. It was alsodelivered in 2017. With particular concern toemployees, such training specifically targetspersonnel considered at-risk. This is the reasonwhy the percentage of covered employees is notshown as it is not significant. Moreover, informationon the split by employee category andgeographical area is not reported.

Reports on workers’ rights


97

Assessment of vendors on work practices

Human rightsNon-discrimination

Freedom of association and collective bargaining

Child labour

Forced and compulsory labour

Assessment of vendors on human rights issues

Human rights reports

SocietyAnti-corruption



98

INDEPENDENT AUDITORS’ REPORTThe independent auditors’ report, which concerns the Consolidated Non-Financial Statementsincluded in the dedicated section of the Annual Report, is accessible through this link.


http://www.saipem.com/en_IT/static/documents/SaipemBil17Ing.pdf#page=75

Headquarters: San Donato Milanese (Milan) - Italy

Via Martiri di Cefalonia, 67

Branches:

Cortemaggiore (Piacenza) - Italy

Via Enrico Mattei, 20

Information for Shareholders

Saipem SpA, Via Martiri di Cefalonia, 67

20097 San Donato Milanese (Milan) - Italy

Relations with institutional investors

and financial analysts

Fax +39-0244254295

e-mail: [email protected]

Publications

Relazione finanziaria annuale (in Italian)

Annual Report (in English)

Interim Consolidated Report as of June 30

(in Italian and English)

Saipem Sustainability (in English)

Also available on Saipem’s website:

www.saipem.com

Website: www.saipem.com

Operator: +39-0244231

Layout and supervision: Studio Joly Srl - Rome - Italy

Società per Azioni

Share Capital €2,191,384,693 fully paid up

Tax identification number and Milan Companies’ Register

No. 00825790157

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saipem spaVia Martiri di Cefalonia, 6720097 San Donato Milanese (MI)

saipem.com

saipem. engineering energy

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consolidated non-financial statements -...

Documents