HSE REPORT 2007

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contents

Correct information is a vital part of the product and is essential to ensure effective marketing and distribution to different geographical markets.

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contents

jotun’s hse vision

jotun A/s will enhance long-term competitiveness and financial performance through

a responsible approach, attitude, and actions regarding health, safety and environment (hse).

All of Jotun’s Activities shAll

Prevent work-related illnesses

Promote employees’ physical and mental health

Protect life and property

Prevent pollution

orgAnisAtion of the hse work 4

editoriAl Morten fon, President & ceo 5

jotun’s hse stAndArd 6

editoriAl ken gudvAngen, grouP environMentAl officer 7

sociAl resPonsiBilitY 8

A historY of quAlitY 10

PAint And Powder coAting Production 12

PAint And Powder coAting cheMistrY 14

sAfetY And PrePAredness 16

environMent 18

working environMent 20

internAl Audits 22

hse-relAted costs 23

cOnTEnTS

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RESPOnSibiliTy fOR HSE

hse work

hse is A mAnAgement responsibility in Jotun. the hse orgAnisAtion

Assists with controls, expertise And reporting.

The Jotun Board of Directors has overall responsibility for HSE activities and approves budgets, strategies and guidelines.

The President & CEO develops the group’s HSE policy, approves Jotun’s HSE standards and proposes budgets for operations and investments.

The Group Executive Vice Presidents for the divisions, Company Managers and Operations Managers are responsible for implementing and monitoring Jotun’s HSE standards and local regulations via regular reporting and compilation of action plans.

The Jotun Group’s Technical Director develops and maintains the group’s HSE standards. The Group Technical Director reports to the Group Executive Vice President in Jotun Paints.

Local HSE coordinators and HSE personnel assist with the daily monitoring of the HSE activities at the factories.

the boArd

president & ceo

divisions

group technicAl director

jotun’s hse work

hse measures form a natural part of management

responsibility at jotun and are part of the day-to-day

work of all employees.

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editoriAl

Taking RESPOnSibiliTy fOR HSE

becAuse we Are pArt of the chemicAl industry, we in

Jotun believe thAt it is cruciAl to put hse high on the

AgendA. over the lAst yeAr, we hAve tAken severAl

initiAtives thAt Are in line with our strong compAny

vAlues And emphAsis on hse improvements.

Care is a core value in Jotun, and over the years we have been proud of the high internal standards we have had within the HSE area. At the same time, we acknowledge that with our global operation we need to base our future on externally acknowledged standards. Thus, we believe we can improve further.

In July 2007, all of Jotun’s company managers gathered, and one important topic on the agenda was environment. Based on these discussions and input from environmental organisations, we concluded that it is important to have focus on controlling emissions from our factories and from our products.

Loyalty is another core value in Jotun. We work continuously to make sure that our people stay with us. We believe that experi-enced employees are an asset to the company, and that they reflect a good working environ-ment. We have launched Operations Academy to enhance this thinking. Here we focus on HSE issues and link them to continuous improvement and Lean principles.

Respect is a third core value in Jotun. We have a commitment to respect all local laws and regulations in the markets where we operate. When it is possible, we surpass mere compliance to local laws and regulations. In

President & ceo Morten fon (center) learning how to perform cardiopulmonary resuscitation (cPr). coaches: ivar thinghaugen (left) and Bjørn tore vibeto.

areas like approval of raw materials and pro-duction equipment, we have strict policies that ensure our high standards.

Continuous improvement requires boldness; this is our fourth value. To improve we need to challenge the status quo and look for better solutions in all matters from a HSE point of view. Further, the boldness to launch new and more environmentally friendly products is crucial to win customers in the future.

We believe that our strong commitment to HSE will be a competitive advantage!

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hse stAndArd

SySTEmaTic PROgRammE

hse stAndArd

Jotun’s HSE standard forms the basis for the group’s systematic HSE programme. This shall be a solid foundation for Jotun’s long-term competitive strength and financial results.

Work on the HSE standard started in 1994. Four years later, it was introduced throughout the group’s factories. HSE reporting and internal controls and audits are carried out in accordance with the same guidelines through-out all of Jotun’s production facilities.

hse Accounts

Jotun compiles annual accounts on health, safety, use of resources and environmental pollution.

The purpose of the HSE accounts is to monitor the performance of the group, to compare group results with other companies of a similar

Jotun follows A systemAtic hse stAndArd designed to steer our efforts

According to the principles of our hse vision. this stAndArd prescribes

Auditing, meAsurement And reporting, which provides the bAsis for

continuous improvement.

hse highlights 2007

the first classes graduated from jotun operations Academy and

jotun coating Advisor Academy.

jotun initiated a standard for maintenance and implementation that

will start in 2008.

local hse coordinators received training in safe job Analysis.

nature and to inform interested parties both inside and outside of the group about its effects on people and the environment.

Jotun’s reports are based on statutory Norwegian requirements and include the most important effects on the environment.

the hse Accounts cover A totAl

of 38 fActories:

5 factories in Jotun Dekorativ 11 factories in Jotun Paints 11 factories in Jotun Coatings 11 factories in Jotun Powder Coatings

The reported figures for waste from Chokwang Jotun Ltd., South Korea in 2006 were incor-rectly stated in the 2006 Jotun HSE Report. They are now revised.

environment was on the agenda when all of jotun’s company

managers gathered in july 2007.

All employees at jotun’s head office in sandefjord, norway received

training in cardiopulmonary resuscitation (cPr).

fifty interior products for the scandinavian market received the official

nordic eco-label, the swan, and the eu’s eco-label, the flower.

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editoriAl

TRaining and awaREnESS

we Are engAged in A long-term effort to increAse sAfety trAining And AwAreness.

it is with humility And respect thAt we report of serious Accidents in 2007.

We have a strong commitment to health, safety and the environment. We’re dedicated to integrating safety throughout our business. Employ-ees in the Jotun Group experi enced three serious accidents in 2007 – bitter remind-ers of the seriousness of our safety work.

Two Jotun employees were involved in a car crash in Yemen in February 2007. One of them, Mushtaq Ahmed Maioni, died.

Another Jotun employee, Abdul Mateen, was hospitalised after a small fire in April 2007 at Jotun’s powder coatings factory in Pakistan. During his recovery, he contracted an infe-ction of methicillin-resistant Staphylococcus aureus (MRSA) and passed away.

Finally, in March 2007 the main gate at our

factory in Yemen fell over Jotun employee Khalid Iyyash, paralysing him from the waist down.

Each of these accidents has been investigated in order to prevent similar accidents in the future. We take this opportunity to express our sympathy to the families of these employees.

Jotun is growing fast all over the world. To fulfil our ambition of further growth and devel-opment, the major challenge will be competent employees. Jotun’s Operations Academy (JOA) and Coating Advisor Academy (CAA) are two important tools to meet this challenge. Both academies bring attention to health, safety and the environment. In 2007, 96 employees gradu-ated from JOA and 394 coating advisers from CAA. Both programmes will continue in 2008.

Fire and explosions are the greatest HSE risk in our production. In 2007, we initiated a systematic approach to identify dust cloud explosion hazards and take measures to prevent them.

Some of our raw materials and finished goods from our powder coatings production, are combustible; in certain conditions, they can set off a dust explosion. It is important to understand the explosion characteristics of the dust(s), identify locations where combus-tible dust cloud atmospheres could be present and identify potential ignition sources. We also investigate ideal plant design to elimi-nate and/or minimize the occurrence of dust explosions and protect people and facilities against the consequences.

We work to prevent, and will stop, any conduct that may be in violation of health, safety or environment laws and regulations or otherwise not in compliance with our policy, says Ken Gudvangen / Group Environmental Officer.

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has much greater chances on the job market,” he said.

“We will invite the students to visit Jotun, tell them what we can offer and give them a presentation of our company culture and values. I think it is very probable that some of them will be employed by Jotun. The day that we hire one of these kids is a day I will be very happy,” said Bak.

A success in the community

Bola Pra Frente has shown results. The pupils are getting better grades, they stay away from crime and they behave better at home. Many families have noticed the change. The big challenge for these kids after they turn 16 and need to leave school is getting a job. This is where Jotun Brazil wants to make a difference.

Fifteen years ago at the UN Earth Summit held near the beaches of Rio de Janeiro, 178 governments signed the Rio Declaration, which included 27 social development prin-ciples. Among them:

principle 5

All states and all people shall cooperate in the essential task of eradicating poverty as an indispensable requirement for sustainable development, in order to decrease the dispar-ities in standards of living and better meet the needs of the majority of the people of the world.

Today, in Rio’s Guadalope neighborhood, a constellation of Norwegian public and private partners including Jotun contribute to the education and welfare of children – a real project in the spirit of the Rio Declaration.

Bola Pra Frente (English: play the ball forward) aims to help the children of this crime- and drug-ridden neighborhood into a more nurtur-ing, educational environment. Together with the Norwegian government and other compa-nies, Jotun Brazil contributes to English instruction at the school that was started and is still run by Jorginho of Brazil’s winning world cup team of 1994.

Using sports as a springboard for social development is on the rise. Ronaldinho, another Brazilian football star, was recently named UN Spokesperson for Sports and Development. The UN’s former Secretary-General Kofi Annan said the following:

The time is right to encourage governments, development agencies and communities to think

how sport can be included more systematically in the plans to help children, particularly those living in the midst of poverty, disease and conflict.

dreAm. leArn. work.

At the heart of Jotun’s involvement in Bola Pra Frente is the desire to give the kids of Guadalope the skills and stability needed to get jobs in a growing economy.

“It is morally good to give what we can to the communities where we operate. And by helping young people to get an education, we are helping to create new talents that may one day work in Jotun,” says Michael Bak, President of Jotun Brazil.

On behalf of Jotun Brazil, Bak takes part in a non-governmental organisation [NGO] called Solio Maritima (English: The Maritime Dream) set up by Norway’s Minister of International Development Erik Solheim. Bak and a colleague brought Bola Pra Frente to the attention of the NGO.

The project they launched was called “Dream, Learn, Work for the Maritime Industry.” One of the most fundamental skills to joining this industry is command of the English language, so the NGO hired in an English teacher for Bola Pra Frente, and efforts are underway to build new classrooms.

14-year-old Thayane Ribeiro has been learn-ing English through Bola Pra Frente. “This is really great. I have learned a lot, and I see great opportunities from taking a course like this. As an English speaker, one

sociAl resPonsiBilitY

helping And supporting other people is A mission enshrined in

Jotun’s corporAte vAlues. we show cAre At the corporAte level And

At the locAl level. bolA prA frente is A greAt exAmple of the lAtter.

glObal RESPOnSibiliTy and lOcal accOunTabiliTy

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Bola Pra Frente is much more than a soccer programme; it is a way out of poverty.

Jotun’s Michael Bak (right) and Brazil’s former world champion Jorginho team up to give young people an education.

gloBAl And locAl

Much of jotun’s csr work is done at the local level

through projects like Bola Pra frente. funding for csr

efforts comes both from local and corporate budgets.

jotun’s participation in programmes is done on an

ad-hoc basis, with an emphasis on projects that

contribute to the sustained development of the

immediate communities where we operate. for more

information about specific projects in your community,

contact the Managing director of jotun in your

country or jotun’s group communication department.

A similar project called Abrigo (English: Shelter) aims to help teenage mothers in the community. Again, it involves giving people skills to succeed in working life. Helping the disadvantaged realise self-sufficiency is a motif of Jotun Brazil’s social efforts.

“We’ve presented these projects to management in Norway and gained their support. I under-stand that Bola Pra Frente is seen as a good case study for Jotun’s corporate social responsibility (CSR) efforts,” said Bak.

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A historY of quAlitY

a HiSTORy Of QualiTy: 1920–2007

from its inception Jotun hAs followed A philosophy of quAlity. with its culture of

investment in product development And production, Jotun hAs lAunched more effective

products thAt better protect property And sAfeguArd the environment.

Jotun’s founder Odd Gleditsch Sr. established a way of thinking that has served the company well: Develop quality products, communicate their superior value to the market and trust con-sumers to see the difference in the final result. From its earliest patented product Arcanol to today’s powder coatings and tin-free marine anti-fouling coatings, Jotun’s success has been built on high quality coatings that preserve property.

Historically Jotun has invested heavily in laboratories and research and development. Jotun’s chemists and engineers responded through the years by inventing ever better products based on safer raw materials. In addition, Jotun’s efforts to stay at the fore-front of modern production technology have minimised waste and optimised the use of energy, supply and manpower.

What’s better than making something based on environmentally sound principles? The answer: Not making it at all. Jotun’s products help people preserve what they already have. This generates savings throughout the entire value chain. We collected some examples to show how Jotun coatings have contributed to property protection.

1932 Arcanol: jotun acquires the worldwide patent to this revolutionary new paint. its value stemmed from metallic lead in dust form as its active pigment. for decades, this coatings solution was considered one of the most significant innova-tions in corrosion prevention.

1935 femkronerslakk (english: five-kroner lacquer): jotun develops a lacquer far more expensive (and far better) than anything else on the market. Marketed as a premium product, using the five-kroner note, this product symbolised gleditsch’s conviction that there is a market for high quality.

1951 jotun builds a massive new production location, with an equally large r&d laboratory. A goliath competitor predicts that little jotun will never hit full production capacity of all of its newly developed products. jotun would later merge with this competitor, effectively consuming it.

1969 Powder coatings: jotun invests in corro-coat thereby becoming an early producer of this product, which – free of organic solvents – is an attractive option both for corrosion protection.

Early1970s dubai: jotun’s entry into this market earns it the nickname “the rolls-royce of paint”, as its products do in one coat what local competi-tors do in three, with predictable savings in time, money and materials.

1974 seamaster: jotun launches the revolutionary antifouling system for commercial vessels that minimises extra visits to dry dock, as well as fuel used, due to smooth hulls.

1932 1935 1951 1969 eArly 1970s 1974 1975 1983 1991 1994 1997 1999 2000 2007

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A historY of quAlitY

Preventing corrosion Protects the environMent

throughout its history jotun has made a name for protecting property. this effort has an environmental

impact: corrosion is wasteful consumption of non-renewable resources. ships that live shorter lives increase

consumption of energy-intensive steel. corrosion can also lead to environmentally damaging spills.

An illustration jotun published back in the early 1990s has gained a prophetic note in today’s climate- and

carbon-focused atmosphere. it describes how corrosive damage to a high-pressure oil pipe would require

full replacement with a new 12 meter pipe. to produce the necessary 2.6 tonnes of steel requires 1 tonne of

equivalent coal energy. this process emits 5 tonnes of carbon dioxide into the air. All of this could be

prevented by effective maintenance and use of high-quality protective coatings.

1975 jotun is the first paint producer in scandinavia, probably in europe, to acquire an electronic micro-scope. examination of timber and paints leads to valuable new knowledge on paint application and performance.

1983 lady: four years of r&d lead to this new line of interior paints that are unique because they feature far fewer solvents and environmentally benign materials.

1991 jotun makes its biggest investment ever in a new production facility that is designed and built to meet environmental standards well into the future.

1994 responsible care®: together with a key raw materials supplier, jotun participates in life-cycle analyses of chemical products, including coatings.

1997 scanimp: one of the first products for impregnating wood that is free of heavy metals such as chrome, arsenic or copper. it is used on the leonardo da vinci bridge and the main airport gardermoen in norway.

1999 14001: jotun thailand becomes the first paint factory in thailand and the first in jotun to obtain iso 14001 environmental certification. since

then, many jotun companies have obtained iso 14001 certification.

2000 seaquantum: jotun and nippon oil and fats cooperate to develop a tBt-free antifouling for ship hulls. its unique hydrolysing technology reduces fuel consumption significantly more than competitors’ self-polishing products.

2007 fifty interior products for the scandinavian market received the official nordic eco-label, the swan, and the eu’s eco-label, the flower.

1932 1935 1951 1969 eArly 1970s 1974 1975 1983 1991 1994 1997 1999 2000 2007

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Production

PainT PROducTiOn

we typicAlly refer to four stAges in pAint And vArnish production.

their sequence is importAnt.

premixing

In the first stage, pigments, extenders, binders and solvents are accurately weighed and mixed.

dispersion

Dispersion is important to the quality of the product, and this process can be subdivided into:a) Moisturising: The air that surrounds the pigments and extenders is replaced by binders.b) Grinding: The interconnection between pigments in lumps (agglomerates) must be ground so that each pigment can be moisturised. This is done in machines that cut and grind these lumps.c) Stabilising: Once the moisturising and grinding stages of the dispersion process have been completed, the mixture must be stabilised. More binders are added to the mixture.

AdJusting

This is the stage where the paint is prepared for use. The mixture is drained into large tanks and binders and additives previously not included are added. The final step is to adjust the colour and viscosity.

filling

Before the product is filled into tins, it goes through a quality control inspection. The most common checkpoints are:Size of grain: Checks whether the pigments and extenders have been ground finely enough.Viscosity: Checks the paint’s consistency and suitability for application.Sagging: Checks the thickness of the film that can be applied, before the paint starts to drip or sag.

Pigments

Binders

Solvents

Additives

Failed batchproduction

DISPERSIONMoisturizingGrindingStabilizing

PREMIXING FILLING /MIXING TANKSLet downColour adjustment

EMISSION TO AIRSolventsDust

WASTEFailed batch productionWashing solubles• Water dilutant• Solvent based

RESULTPaint

Specific weight: Checks whether all the right raw materials have been added.

Depending on the type of paint, other criteria are also checked, such as colour and drying time.

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Production

the production of powder coAting is quite different from pAint

production but cAn technicAlly be divided into the sAme stAges.

premixing

This is the same as the first stage in paint production. The raw materials are accurately weighed and then mixed.

compounding

The premix then goes into an extruder where it is melted. This is the second stage and is described as compounding. The pigments are treated to form a homogenous dispersion, which is subsequently discharged from the extruder. It is difficult to adjust the colour after this stage.

cooling And flAking

The molten substance then has to be cooled, which is done by passing it through cooled rollers. The final operation in the cooling stage is to break the extruded substance into small flakes using rotating hammers.

milling And clAssificAtion

The final stages of the manufacturing process are milling and classification. The flakes are ground into a fine powder with a specified particle size range. The milled powder is transferred from the mill on an air stream designed to ensure that oversized particles drop down and return to the milling chamber.

collection

The milled/classified powder is then transferred to a collection chamber. This may be a cyclone in which powder falls to the bottom while air is exhausted from the top, filtered and then released into the atmosphere or a bag filter system.

MIXER

MILL

PRE-MIXER

AirBindersPigmentsHardenerAdditives

RESULTPowder coatings

WASTEDustProduct waste

EMISSION TO AIRDust

DISCHARGE TO WATERWashing water

Water

Classifier

Cyclone

Dustfilter

Cooling conveyor /crusher

POwdER cOaTing PROducTiOn

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PainT and POwdER cOaTing cHEmiSTRy

every Jotun product contAins A number of chemicAls And mAteriAls,

eAch of which contribute to the quAlities of the finished product. this

presentAtion describes the key elements of Jotun pAints And powder

coAtings And how they work together.

solvents

Solvents are only used in paint and not in powder coatings. Solvents are the liquids that carry the solid components in paint. They must be present to ensure that the paint has the correct consistency for application by brush, roller or spray. Paint is divided into two groups: solvent-based paints, which use organic solvents like mineral spirit, and water- based paints.

pigments

The pigments used in paint and powder coat-ings are normally present as fine solid parti-cles that are dispersed but not soluble in the binder and solvent. The pigments bring colour and opacity (hiding powder) to the paint and protect the binders and substrate from degra-dation by ultraviolet radiation – a component of sunlight.

extenders

Extenders are natural or synthetic minerals like talc, clay, etc., which are evenly dispersed in the paint. The particles come in different sizes and shapes. In powder coatings, it is important that the extender is heat resistant.

binder

The binder or resin is one of the most impor-tant components in paint and powder coatings and can be thought of as the glue which holds the pigments together and sticks them to the surface. In paint, it is the basic solid film

cheMistrY

former that remains after the solvent has evaporated and which binds the pigment particles together into a cohesive paint film.

The binder gives paint a number of key char-acteristics, like adhesion, gloss level, hardness, abrasion resistance, flexibility, drying speed and durability.

Additives

Additives are the specialised components used in paint and powder coatings to give them their final performance and characteristics. For example, in paint they provide UV protec-tion, inhibit tannin staining, inhibit corrosion, protect the film against mould growth and ensure good flow and levelling.

hArdener

In powder coatings and two-component paint, the hardener is used to cross-link the resin at a given temperature. The degree of cross-linking can also be adjusted to determine the gloss level, degree of surface and other aspects, including structure and texture effects.

jotun r&d

the laboratories in jotun cover

several subjects within chemistry:

polymer, organic, analytical, bio

and electro chemistry.

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More and more of jotun’s products have received official eco-labels.

the innovation process has been strengthened in both the Middle east and south east Asia.

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in jotun, we strive to replace or reduce

hazardous substances in our products

and processes by using less hazardous or

non-hazardous substances – a principle

called substitution.

SiTE SEcuRiTy and TRaining

site security And trAining

Security and safety are essential in the entire chemical industry, which needs to be prepared for a wide range of threats and incidents, such as intoxicants, organised crime, violence in the workplace and even terrorism. In order to manage security risks, Jotun needs to evaluate which measures to take at any given time.

Active leArning

In 2007, Jotun continued to train all staff at its production facilities worldwide on issues related to earthing and static electricity. Earthing and static electricity are the biggest challenge Jotun faces in terms of guaranteeing the safety of its employees and property.

In 2007, 8,000 hours of preparedness training were carried out, compared to 6,100 hours in 2006. This represented, on average, 10 hours of training for each of the 783 people in the organisation.

sAfetY And PrePAredness

fActs

fire is regarded as the greatest risk factor at jotun’s factories.

Preventive measures against fire and explosions are therefore given

high priority in order to prevent personal injuries and damage to

property. site security is another area in which improvements are

being made.

thAnks to knowledge And trAining, fire incidents lAst yeAr were

hAndled quickly, Averting the risk of mAJor fires.

specific incidents in 2007

There were five serious incidents in 2007 in which fire broke out.

At the factory in Guangzhou (China), a forklift short-circuited and caught fire and a spillage of solvents caught fire during welding. At the factory in Melbourne (Australia), a skip caught fire outside working hours. A short-circuit at the factory in Lahore (Pakistan) led to a fire and in Yanbu (Saudi Arabia) when a carton with a catalyst caught fire.

Using their knowledge and expertise, employees were able to tackle the incidents quickly, averting the risk of major fires.

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the use of an employee id at electronic access card readers is used for building entrances and certain internal areas.

Annual training of dedicated firefighters is mandatory at all factories.

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fire Prevention MeAsures

jotun is active in the area of fire prevention. Measures include providing employees

with training, fire-resistant facilities and personal protective equipment.

correct fire detection systems and firefighting equipment are vital to prevent and

limit the scope of a fire.

fire detection and firefighting systems shall be activated automatically. foam-based

extinguishing equipment shall be used at factories that manufacture solvent-based

products.

Any conditions which result or could result in any damage to the environment or

personal injury shall be treated as non-conformities. these conditions must be

rectified in order to prevent any recurrence. this applies to incidents involving fires,

near fires and accidental emissions of chemicals.

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environMent

EffEcTivE PROducTiOn Planning

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production wAste

Jotun’s production waste consists mainly of packaging, such as cardboard, paper, plastic and metal. National return schemes are becoming more widespread and, where these are established, Jotun’s activities will also be covered.

Waste and the treatment of waste are connec-ted to costs, which Jotun is committed to reducing. Production planning is the key to the reduction of waste. Through the produc-tion of greater series, we reduce to a minimum washing of production facilities and generation of waste.

The total waste volume from Jotun’s factories was 15,700 tonnes in 2007. This was 2.9 per cent of production volume, compared with 3.0 per cent in 2006.

mAintAining the rAtio between wAste, energy consumption And production volume At more or less the

sAme over time is A pArtiAl success. our goAl is to be more efficient And reduce wAste.

hAzArdous wAste

Hazardous waste at Jotun consists mainly of process water and solvent-based waste. Process water is formed as a reaction product from the production of binders. The largest volumes of solvent-based waste result from washing the production equipment. This waste is recycled to a large extent in produc-tion. Hazardous waste can also be a result of production errors or returned goods. In 2007, 5,800 tonnes of hazardous waste was gener-ated at Jotun’s factories, equivalent to 1.1 per cent of production volume and is 0.1 per cent less than in 2006. Jotun aims to reduce the proportion of hazardous waste in relation to the production volume.

Air And wAter eMissions

emissions to Air

emissions to the air from jotun’s factories are mainly linked to the

production of solvent-based paints. these emissions are caused by

evaporation from the production of paints and binders. in 2007, jotun

used 70,500 tonnes of solvents in production. this increase of 10,800

tonnes from 2006 was mainly caused by the increased production

volume.

dischArge to wAter

washing of production equipment is the main cause of discharge from

the production. in 2007, jotun’s factories generated 77,200 tonnes of

water-based waste and discharge, compared to 69,900 tonnes in 2006.

the main reason for this increase is higher production volumes.

45,400 tonnes of water-based waste was purified and did not result in

any pollution. the remaining 31,800 tonnes were handled through

approved systems.

there is a reduction in discharge to water over the last five years, with

a peak of 83,100 tonnes in 2004.

the authorities consider discharge into public sewage systems to be

a local problem at six of the group’s factories.

contAminAted sites

A number of our factories have operated in the same location for a long period of time or they are located in areas where another factory was previously situated. In some instances, these factories may have used sub-stances and chemicals that are not standard and acceptable today.

Surveys have been conducted at a number of factories, and initiatives have been imple-mented where required by authorities. We cannot rule out that several of the factories operate on a contaminated site. We are particu-larly aware of such conditions in connection with the purchase and sale of factories. Where we suspect contamination, we undertake investigations, hoping to determine the extent of the problem and to clarify whether mea-sures for avoiding pollution are necessary. Assessments and measures are carried out by external specialists.

environMent

energY consuMPtion

the production of paint consumes relatively little energy compared to

other process industries. in 2007, jotun registered an energy consump-

tion of 77.4 gwh – an increase from 72.9 gwh in 2006.

higher production volumes are the main reasons for the increase in

energy consumption. the reported energy consumption includes only

the consumption of energy from buildings and production facilities. this

means, for instance, that energy consumption linked to transport is not

included. twenty of the factories also use other energy sources in

addition to electricity, including oil heating and energy from waste

incineration.

fActs

jotun’s activities require resources and involve emissions and discharges

to the soil, sea and air. As it increases production volumes, jotun must

focus on initiatives to improve efficiency and provide both environmental

and financial advantages.

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1.61.3 1.2

2.0

1.6

2.3

1.4

1.3

07

2.1

1.1

0

1

2

3

4

5

6

06050403

1.6

2.2 2.3

1.5

2.1 1.6

1.1

2.7

07

1.7

2.3

2003 2004 2005 2006 20070

50

100

150

200

300

250

2003 2004 2005 2006 20070

2

4

6

8

10

2003 2004 2005 2006 20070

5

10

15

20

25

30

40

35

waste volumes as per centof produced volume for jotun dekorAtiv Production waste hazardous waste

waste volumes as per cent of produced volume for jotun PAints Production waste hazardous waste

waste volumes as per centof produced volume for jotun coAtings Production waste hazardous waste

waste volumes as per centof produced volume for jotun Powder coAtings Production waste hazardous waste

Production volumes (1000 tonnes) dekorativ Paints coatings Powder coatings

Production and hazardous waste (1000 tonnes) Production waste hazardous waste

energy consumption (gwh) dekorativ Paints coatings Powder coatings

www.jotun.com 19

working environMent

preventive meAsures

The most important preventive measures in Jotun include training in how to handle hazard-ous chemicals and how to use protective equipment. There was a slight increase in the level of training activities this year, which grew from 785 working days in 2006 to 964 in 2007.

chemicAl risk Assessment And sAfe

Job AnAlysis

Risk assessment is an important tool for the decision makers and those designing and oper-ating processes. In many countries, it is a legal requirement.

There are also business reasons for conduct-ing a risk assessment, as the techniques help to improve safety performance and ensure that the precautions are proportionate to the hazard. This helps Jotun apply its resources to those measures that have the greatest overall influence on health and safety.

In 2007, Jotun held a practical training in risk assessment with special attention on safe job analysis for HSE coordinators. The gathering was held in Zhangjiagang (China); similar gatherings will be held in Europe and the Middle East.

SafE wORking EnviROnmEnT

workers’ sAfety is A primAry concern in Jotun; everyone hAs the right to A heAlthy And sAfe working

environment. identifying, evAluAting And reducing risks relAted to occupAtionAl heAlth And sAfety is

pArt of our dAy-to-dAy work.

trAining

In order to promote the health of its employ-ees, Jotun conducts health and ergonomic surveys and it provides systematic first aid training. In 2007, 846 operators attended first aid training courses. A total of 419 working days were spent on this training – a decrease from 4,633 days in 2006.

Absence through illness

Due to different sick pay schemes, conditions of employment and ways of registering sick absence at the factories, Jotun’s absence figures are to some degree unclear. In 2007, a total of 21,844 days of absence through illness were recorded, as opposed to 21,444 days in 2006.

The figures from factories in Norway are included in the total figures above and do not have the same uncertainty as the others. In 2007, the level of absence through illness at Jotun A/S was 4.6 per cent, compared to 5.2 per cent in 2006. Long-term absence through illness constitutes more than 83 per cent.

occupAtionAl inJuries

In 2007, there were 1,592 days of absence recorded as a result of injuries. This equates to 0.1 per cent of the total working hours, which is at the same level as in 2006. The H-value at Jotun for 2007 was 6.09, an improvement from 7.86 in 2006.

deAths

There were two fatal accidents in 2007. Both accidents have been investigated in order to prevent similar accidents in the future.

20 www.jotun.com

working environMent

fActs

Preventive action is the main focus of the work related to the working

environment and health in jotun. it is a management responsibility,

but the results must be achieved through systematic work, widespread

involvement and a high level of knowledge about preventive measures

among all employees in the company.

0

1

2

3

4

5

6

7

8

9

06050403

0.6

1.21.4

0.9

2.8

1.3

2.0

07

2.9

1.72.7

0

1

2

3

4

5

6

7

8

9

06050403

1.81.6

1.8

2.7

6.1

5.24.7

5.4

07

6.0

1.8

0

1

2

3

4

5

6

7

8

9

06050403

2.1

0.8

2.2 2.1

6.7

5.0

4.5

2.3

07

1.0

2.4

0

1

2

3

4

5

6

7

8

9

06050403

1.3

2.8

1.9

0.6

2.4

07

1.4

1.1

3.1

1.2

1.1

2003 2004 2005 2006 20070

2

4

6

8

10

12

2003 2004 2005 2006 20070

2

4

6

8

10

12

0

3

6

9

12

training in jotun Powder coAtings(hours/no. of operators) hazardous substances first aid

h-values

Absence through illness (%) 2003 2004 2005 2006 2007

frequence of injuries resulting in absence of more than 1 day

dekorativ Paints coatings Powder coatings

training in jotun dekorAtiv(hours/no. of operators) hazardous substances first aid

training in jotun PAints(hours/no. of operators) hazardous substances first aid

training in jotun coAtings(hours/no. of operators) hazardous substances first aid

www.jotun.com

internAl Audits

internAl Audits

In 2006, HSE staff carried out nine internal audits. The final report from each of these audits has been made available to Jotun’s management.

mAin feAtures of the Audits

The internal HSE audits that were carried out in 2007 showed improvements on house-keeping in general and a positive response towards HSE and HSE audits. However, they reveal that Jotun faces challenges linked to maintenance, safe operations and storage and handling of raw materials. In order to pursue our vision and meet the goals that we have set, the Jotun Group must ensure that its employees possess sufficient knowledge on issues related to safety, health and the environment.

The audits also revealed that Jotun needs to place greater emphasis on preventive main-tenance with regard to production equipment and buildings.

nEEd fOR EnHancEd QualificaTiOn

the chAllenge is to Acknowledge internAl Audits As tools for improvement

And see them As A positive effort.

the PurPose of Audits

to reduce undesirable risk and the potential for loss

to contribute towards a satisfactory balance between a focus on increasing market

shares and results and long-term investment in initiatives to improve the hse level

to maintain and promote sound ethical attitudes

to maintain attention on our corporate culture and attitudes

to report weaknesses and non-achievement to the required level in the organisation

the Board of directors in jotun has resolved to implement regular

internal audits of factories and warehouses. this fulfils jotun’s own

requirement to undertake a systematic review of routines, systems and

production processes.

it also involves systematic, documented and objective assessments of

factories that are planned for the future.

internal audits shall be carried out by personnel who are sufficiently

independent to provide an impartial attitude and judgement. the

auditors must have sufficient knowledge of the areas that are being

reviewed, including knowledge and experience of relevant matters

within hse, management, technical issues and regulations.

Audits include discussions with personnel, the inspection of operating

conditions and equipment and the review of journals, written proce-

dures and other relevant documentation. the purpose of the audits is to

determine whether the business is fulfilling the relevant provisions and

targets set.

internAl Audits Are An importAnt tool used by

Jotun in its hse Activities. through regulAr Audits,

every Aspect of heAlth, sAfety And the

environment is properly tAken into Account.

fActs

internal audits and controls are important elements of jotun’s hse policy

and are carried out at all jotun’s factories throughout the world. using

systematic controls, the group lays the foundation for common learning

and improvements.

tools for iMProveMent

22 www.jotun.com

www.jotun.com

internAl Audits

The total cost of HSE work and measures has fallen in recent years. The fall is mainly due to the reduction in operating costs linked to the environment. HSE-related operating costs amounted to NOK 24 million in 2007. This is a slight decrease compared to 2006. Better routines for washing equipment and production planning are the main reasons for this decrease.

invESTmEnTS fOR SafE OPERaTiOn

hse costs Are not reAdily cAlculAted As investments mAde explicitly to improve operAtions mAy

hAve An implicit hse benefit. Jotun reports A slight decreAse in hse-relAted costs in 2007.

deviAtions 2006 2007

serious conditions that lead to reporting to the authorities 20 2

events that have resulted in damage to the group’s property 22 12

fatal or serious accidents 0 3

Accidents that can lead to a day’s absence or more 77 63

emissions that can harm the environment 22 18

fires 5 5

fActs

jotun divides hse-related costs into investment

and operating costs. investment covers costs

linked to buildings, process equipment, treatment

plant, foam facilities, firefighting equipment, etc.

operating costs include expenses for protective

equipment, hiring of specialists, waste treatment,

operation of treatment plant and payment of fees

and charges. the biggest hse costs are those

related to waste management.

Out of the total figure for HSE-related operating costs for 2007, waste management accounted for 56.3 per cent. It is difficult to make a clear distinction between ordinary operating and investment funds and HSE-related costs. When an investment is made in new machinery at a factory, this might be because the machines installed needed to be

hse-relAted costs

www.jotun.com 23

modernised, but this can also provide a benefit in terms of HSE.

The HSE-related costs that are quoted in the table are therefore set according to best estimates and based on what Jotun believes has accrued for the main purpose of achieving HSE improvements.

total hse costs per division (mill nok) 03 04 05 06 07

jotun dekorativ 10.2 13.6 17.8 16.1 11.5

jotun Paints 14.6 7.8 10.6 9.7 9.7

jotun coatings 9.5 8.7 11.5 15.4 11.7

jotun Powder coatings 3.5 3.7 3.8 3.6 5.2

www.jotun.com

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