the new refinery of productive turkey - socarzaur gahramanov, joined socar in april 2008, and became...

THE NEW REFINERY OF PRODUCTIVE TURKEY

STAR RAFİNERİ A.Ş.

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General Manager’s Message 5

STAR Refinery Board of Directors 7

Mission, Vision and Values 11

Integrated Management System 16

About SOCAR 19

About SOCAR Turkey 21

About Star Refinery 23

Technical Information 25

Production Plan 26

Milestones 29

STAR Refinery in figures 31

Human Resources Management 37

Occupational Health Safety Management 41

STAR Refinery OHS and Environmental Policy 45

OHS Performance Data 47

Environmental Management 51

Social Impact Management 61

Corporate Risk Management 71

INDEXSTAR RAFİNERİ A.Ş.

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GENERAL MANAGER’S MESSAGE

Dear Shareholders,

Taking strength from Azerbaijan and Turkey’s brotherhood, I deeply feel glad

and also proud that together we’ve launched STAR Refinery, the shining

star of Turkish economy and as the distinguished symbol of strategic

collaboration between Turkey and Azerbaijan, to our country and the entire

world.

We’ve laid the foundation in Aliağa in 2011 and inaugurate on 19th October

2018 with a majestic ceremony. In a very short period of time, we’ve reached

the maximum capacity with high added-value, national and domestic oil

products -which were previously imported- and brought these strategic

products in to Turkish economy. This provides an approximate of 1,5 billion

dollars annual saving in Turkey’s balance of foreign trade.

Protecting the environment, work safety and digital transformation were the

absolute essentials of refinery’s establishment phase. I’d proudly highlight

that we’re a “digital refinery” in full measure, in terms of being efficient by

using modern production and control technologies, leading

environment – friendly and work safety practices.

From the first day, we’ve been motivated by the moment we bring our

refinery into being. Now, this is our mutual glory!

I frankly thank to all my colleagues who bring this exceptional facility with

meticulous and devotedly in to Turkey and to our former employees who

contributed in the past.

Respectfully,

Mesut İLTER

General Manager


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Vagif ALIYEV - Chairman of the Board

Born in 1959, Vagif Aliyev graduated from Azerbaijan Civil Engineering Institute’s Hydraulic Engineering program in 1981. Successfully undertaken many assignments in professional life; Aliyev started working at Caspian Sea Oil & Gas Production Union’s Azer Sea Oil Construction Trust, Construction and Mounting Department Number 3 as an engineer. Aliyev, has been Head of Investments at the State Oil Company of Azerbaijan Republic since 2005. Aliyev also has been the Chairman of Board of Star Rafineri A.Ş. since 2008.

David MAMMADOV - Vice Chairman

David Mammadov was born in 1955. In 1980, graduated from M. Azizbeyov Institute of Oil and Chemistry, Faculty of Chemical Technology of Oil and Gas as a Chemistry Engineer. Started his career at Baku New Oil Refinery in 1976 as an operator, Mammadov holds the positions of Vice President for Refining in State Oil Company of the Azerbaijan Republic since 2005 and also Board Member of STAR Rafineri A.Ş. since 2008.

Zaur GAHRAMANOV - Board Member

Received high-school education in Kings College London, UK; Zaur Gahramanov then got bachelor’s and master’s degree from Azerbaijan State University Economics, International Economic Relations department. He pursued his academic career in The University of Chicago Booth School of Business, USA with MBA degree, between 2014-2016. Started his career at KPMG in the field of tax, Gahramanov worked in the field of law and tax until 2008 at various companies. Zaur Gahramanov, joined SOCAR in April 2008, and became CFO at SOCAR Trading S.A. in Switzerland. In 2013, appointed to SOCAR Azerbaijan Investments Department as Deputy General Manager, Gahramanov also carries out his role as CEO of SOCAR Turkey. Zaur Gahramanov is also board members of SOCAR Trading S.A., SOCAR Energy Switzerland and Neftçi PFK.

Süleyman GASIMOV - Yönetim Kurulu Üyesi

Suleyman Gasimov was born on 26th December 1961 in Fakhraly village of Bolnisi county, Republic of Georgia. He was graduated from Azeribaijan National Economy Institute ( now Azerbaijan State university of Economics) in 1982 and Academy of Public Administration - subject to President of the Republic of Azerbaijan - in 2003. Held various positions (Accountant, economist, deputy chief accountant and chief accountant) in oil and gas industry between 1982 - 1991. Gasimov became the Chief Accountant of Azerineft (Azeri Oil) Department of Oil and Gas Production Khazardenizneftgas (Caspian Sea Oil and Gas) Production Unit and OffShore Oil and Gas Production Unit between 1991 - 2003. Gasimov held the positions of Economy and Accounting Division Manager, Department Assistant Manager and Department Manager at SOCAR between 2004 - 2006. In 2006, became SOCAR Vice President for Economic Issues and still holds the position. Suleyman Gasimov received “Taraggi” (Progress) Medal in 2006 and “Shohrat” Medal (Medal of Honour) in 2006. Gasimov has PhD degree in Economics and also has an article in a scientific work and more than 15 scientific articles. Gasimov has been Board Member of STAR Rafineri A.Ş.

Farrukh GASIMOV - Board Member

Born in 1959 in Baku - Azerbaijan, Farrukh Gasimov graduated from Faculty of Law at Baku State University in 1981. He got his PhD degree from Moscow Public Studies and Law Institute in 1985. From 1985 to 1991, Gasimov worked as an academic and associate professor at the University of Public Administration and Politics in Baku. Farrukh Gasimov has been Deputy Head of the Legal Department in SOCAR since 2006 and Board Member of STAR RAfineri A.Ş. since 2008.

Emil EMINOV – Board Member

Graduated from Dokuz Eylül University Economics Department in 2000, Emil Eminov then got his MBA degree in Finance and Strategy from University of Pensylvania-The Wharton School. He started his career at PriceWaterHouseCoopers and from 2004 to 2012 held consultant, partner, founder, co-founder positions in various companies in finance. Eminov, then moved to Azerbaijan and pursued his career as Assistant General Manager / Project Sponsor at SOCAR Polymer factory. He holds the positions of Head of Operations at SOCAR Turkey since August 2016 and Board Member at STAR Rafineri A.Ş. since 2018..

STAR REFINERY BOARD OF DIRECTORS


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MISSION Reducing Turkey’s foreign dependency with petro-chemistry integration by producing high added-value products.

VISIONBeing a trustworthy, life & nature conscious and innovative company in oil industry.

VALUES:

TRUSTWe gain trust with our honesty, accuracy and ethical business practices..

MUTUAL TRUST:We act clear, honest and transparent when we do business). We develop mutual benefit relationships and partnerships based on trust, respect and common success..

ETHICAL BUSINESS PRACTICES:We own and pattern SOCAR Turkey’s values and ethic codes in each of our tasks. We encourage everyone to practice these values and codes.

TRANSPARENCY AND CONSISTENCY:Our statements are consistent with our acts. We share our opinions clearly and to reach effective results, we call others to do the same. We include individuals to our decisions and plans who can be effected by those. We care the information to be accessible, understandable and tangible.

HONEST FEEDBACK:We design business oriented feedback processes. We contribute to others’ achivements by providing constructive and punctual feedback.

MISSION, VISION AND VALUES

AGILITYWe predict changing needs, competitive market trends and opportunities of our clients. We embrace change, proceed with endurance and maintain to protect our business focus even under fast changing conditions.

ADAPTING TO CHANGE:We create solutions on how to adapt and perform our business under constantly changing conditions.

DURABILITY:We maintain to stay durable and keep our energy at the highest level to reach high performance standards even under formidable circumstances.

FORESEEING:We consider the longer term, see the big picture beyond the current affairs and make consistent predictions about our company’s sustainability to be prepared for the future.


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STAR Refinery was inaugurated on 19th October 2018 Friday, in İzmir Aliağa. Recep Tayyip Erdoğan; President of the Republic of Turkey, İlham Aliyev; President of Azerbaijan Republic, relevant ministers and SOCAR executives attended the ceremony, in which the other affiliates of SOCAR; Petlim Container Terminal, Petkim Wind Power Plant and Aliağa Head Office were also inaugurated.

COMPREHENSIVENESSWe are conscious of our need of diverse ideas, diverse strengths and diverse experiencesfor our company’s success. We follow the diverse points of view and encourage people to collaborate and contribute to reach the mutual goals.

ONE TEAM:We make internal collaborations and encourage effective teamwork in between groups, functions and teams to obtain results.

SHARING AND COLLABORATION:We share our know how and important information proactively with our colleagues to obtain productive results. We ground on the company’s best interest rather than the individual gains.

APPRECIATING THE DIVERSITY:We perform better in a dynamic work environment thus we collaborate with our partners with diverse points of view, experiences and ways of working. We tend to look through the widest perspective when sharing our ideas, providing solutions, making decisions or planning our strategies.

PASSIONWe’re committed to our work both with our hearts and minds. We work with strong sensations which add significance to our daily routine. We welcome new challenges as well as the opportunities with pace, high energy and enthusiasm.

COMMITMENT:We are strongly committed to our company goals and support them with our way of working.

ENTHUSIASM AND DESIRE FOR PERFECTION:We continuously proceed forward and make progress. We use our motives and commitment to evoke, engage and encourage others to reach perfection. We embrace enthusiasm to find new and ground breaking ideas as well as to question and break non functional routines and rituals.

TARGET ORIENTEDNESS:We ensure our business to be coherent with our team’s targets and objectives and to support our company’s vision.

A PERFECT PLACE TO WORK:We support our workplace to be appealing and encouraging to work. We celebrate gains and achievements and share with others.

MISSION, VISION AND VALUES

PERFECTION IN PRACTICE: What ever we do, we try to achieve the best. We act professionally and try hard to be perfectionists at implementation phases. If we are mistaken we acknowledge and find solutions to avoid making the same mistakes. We share our responsibilities clearly to work with efficiency and coordination.

PRODUCTIVITYWe focus on development and use our time and resources ideally. We also use the most effective and productive processes.

SIMPLICITY:We make effort to simplify and improve our business processes, procedures and operations by improving ourselves and getting use of the best practices.

RIGHT USAGE OF RESOURCES:We strive to discover and apply safer, better, faster and more cost-effective ways to deliver effective end results. We make a point of using our resources in the most effective way and doing businesses worthy of our energy, time and funds.

PERFECTION IN PRACTICE:What ever we do, we try to achieve the best. We act professionally and try hard to be perfectionists at implementation phases. If we are mistaken we acknowledge and find solutions to avoid making the same mistakes. We share our responsibilities clearly to work with efficiency and coordination.

LIABILITYWe bear responsibility to our shareholders, clients,, colleagues and society. We lead the drive for creating a safe, trustable and sustainable environment where we operate. We own what we do and take personal responsibilities for our actions. We deliver our promises and fulfill our commitments..

OWNING:We are conscious of the impact of our actions and decisions on people, environment and society. We own our business, act responsibly and attach importance to results.

SAFETY IS IN THE ESSENCE OF EVERYTHING WE DO:Everything we do is based on safety and we take personal responsibility for the safety of ourselves and our environment. We acknowledge health and safety as our priorities and we never make any concessions.

DELIVERING ON PROMISE:We deliver our promises and fulfill our commitments. We give confidence over challenging commitments as well; we work as hard as possible to keep our word.


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STAR Refinery aims to execute, maintain and continuously improve all its business processes and activities in accordance with legal and Total Quality Management necessities

STAR, purposes to manage all of its operations in a qualified, efficient, effective and sustainable way. Thus, STAR conducts its efficiency, sustainability, performance and effectiveness oriented operations in Total Quality Management field within the scope of Integrated Management System.

In line with the management system standards’ necessities, Star Refinery started Integrated Management Systems configuration as of 2017:

ISO 9001: 2015 – Quality Management Systems ISO 14001: 2015 – Environment Management Systems OHSAS 18001: 2017 Occupational Health and Safety Management Systems ISO/IEC 27001:2013 – Data Safety Management Systems

Integrated Management System was built up by instilling Total Quality Management culture, ensuring the adopting of the process, risk and opportunity based approach, compatible business processes, encouraging continuous improvement and contribution.

GENERAL CONDITIONSWithin the scope of Total Quality Management, following training categories were carried out in the set up phase of Integrated Management System :

Raising Awareness Training Implementation and Documentation Training Risk Management Training Internal Investigator Training Head Investigator Training Training of the Trainer

INTEGRATED MANAGEMENT SYSTEM


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Specifying Mission, Vision and Corporate Values

Announcing Integrated Management System Policy

Establishing Document Management System

Defining Business Processes

Composing of the Processes and Operations Defining Documents

Determining the Scope of Integrated Management System

Defining and Socumenting the Risks and Opportunities, Specifying

Their Strategies

Defining Process Based Key Performance Indicators

A new hired STAR employee, receives an Integrated Management System training, within the

scope of Orientation Training Program given by Quality Assurance Department.

Star, aims to raise awareness of Integrated Management Systems among all of its

employees.

2017 – 2018 Process Based Integrated Management Systems targets

main topics are listed below:

It is planned that Integrated Management Systems will be certified in accordance

with ISO 9001, ISO 14001 and OHSAS 18001 standards, by authorized accredited

third parties until the end of 2018.

In line with the necessities of ISO 27001 standard, installation-oriented actions has

been taken and certification was set to be the mid term priority.

Following the establishment of Integrated Management Systems; respective

actions and training organizations will continue to conduct, maintain, review and

improve the system.

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ABOUT SOCAR SOCAR VALUE CHAIN


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AbsheronBulla Deniz Umid, ZafarMashalShafagAsimanBabek

Azeri Chirag Deep Water GunashliBahar Gum DenizBinegediKurovdaghKursengi ve GarabaghliMishovdagh KelameddinMuradkhanlı, Jafarli ve Zardab

NeftchalaPirsahhatRamanyShah DenizSurakhanySouth – West GobustanZigh Hovsan

Gas Processing FacilityHaydar Aliyev Oil RefinerySTAR Refinery

Azerkimya Productio UnionPetkimSOCAR CarbamideSOCAR PolymerSOCAR Methanol

Azerigaz Production UnionSOCAR Energy UkraineSOCAR Georgia GasSOCAR Georgia PetroleumSOCAR PetroleumSOCAR Petroleum SA RomaniaSOCAR Trading

REFINING

PETRO-CHEMICSTRYMARKETING OF OIL PRODUCTS

EXPLORATION PRODUCTION

Baku – Novorossiysk Oil PipelineBaku – Supsa Oil PipelineBaku – Tbilisi – Ceyhan Oil Pipeline ( BTC)South Caucasia Natural Gas Pipeline (SCP)Dubendi TerminalKulevi TerminalRailway Transportation

PIPELINES

SOCAR, State Oil of Azerbaijan Republic, is established in 1992 to utilize Azerbaijan’s oil and gas reserves. Owning and operating the oil and gas resources in Caspian basin; the company is one of the most well-established and prestigious energy companies of the world.

Representing Azerbaijan’s deep rooted experience in oil production dating back to 19th century; SOCAR is responsible of carrying out the duties of exploration, research and development of oil and petrol fields in Azerbaijan; production, processing and transportation of oil, gas and gas condensate, selling of oil and petrochemistry, selling of gas in domestic and foreign markets and purchase of industrial and natural gas for the country.

SOCAR has a wide range of operations in oil and petro-chemistry industries in Azerbaijan, including

land and sea basins:

Research, exploration and processing of oil and petrol fields

Production, processing and transportation of oil, gas and gas condensate

Selling of oil and petro-chemistry in domestic and foreign markets

Wholesale and retail purchase of natural gas

SOCAR owns operations with 23 legal entities and 4 non-corporate entities; including 3 production

unions, 1 oil and 1 gas processing facility, 1 deep water jacket facility, 2 trusts and 1 institution.

SOCAR Turkey; is the foremost representative of Azerbaijan and

Turkey’s economic cooperation which increasingly gains power and

efficiency.

As being one of the most well-established energy companies of the

world; SOCAR (State Oil of Azerbaijan Republic) started a powerful

strategic partnership between two countries by acquiring Petkim in

2008. SOCAR Türkiye Enerji A.Ş. (SOCAR Turkey) was established on

30th December 2011 to perform SOCAR’S operations in Turkey. SOCAR

Turkey’s investment plan in Turkey is inclusive of the largest scaled

investments in country’s history.

SOCAR Turkey rises on the grounds of Turkey and Azerbaijan’s deep

rooted brotherhood and fellowship.

As Turkey is one of the most important countries among SOCAR’s

global operations, SOCAR Turkey implements an approximate of

19,5 billion US Dollar investment plan based on the confidence in

Turkish market’s potential in which SOCAR takes place with powerful

ventures, country’s future and steady growth.

Within the scope of “Refinery – Petro-chemistry- Energy – Logistics

– Distribution”, prior to completion of investments; SOCAR Turkey’s

ultimate objective is to turn Aliağa Peninsula into one of Europe’s

top production forces by putting value added chain –Crude oil ending

up transforming into a product - into practice, within the scope of

aggregation model.

Operating with incorporated companies Petkim, Star Refinery, Trans

Anatolia Natural Gas Pipeline (TANAP), Petlim, Petkim Wind Power

Plant ( Petkim RES), SOCAR Distribution, SOCAR Warehousing;

SOCAR Turkey aims to be one of three major holdings of Turkey and

to become one of the largest production powers of the country.

ABOUT SOCAR TURKEY


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Being one of SOCAR Turkey’s investments in the Aliağa Peninsula, STAR ( SOCAR Turkey Aegean Refinery) Refinery is the most critical investment of refinery - petro-chemistry – energy - logistics - distribution integration and SOCAR Turkey’s value chain. Having the capacity of processing 10 million tones of crude oil annually, STAR Refinery has the flexibility to process various types of crude oil in between 28-36 API.

Qualified for the certification of Strategic Investment Incentive as a first in Turkey, Star refinery was built by an international consortium constituted of Técnicas Reunidas (Spain), İtalyan Saipem (Italy), GS Engineering (South Korea) and ITOCHU (Japan). Agreements with these leading companies were signed in 2013. Over 3000 engineers from 14 countries worked in the construction, in total 19.500 employments were provided in the peak period. Being the first refinery established since 1984, STAR Refinery has the feature of being the biggest investment of private entrepreneurship in Turkey. STAR Refinery also focuses on the strategic products in the direction of Turkish economy and industry’s requirements. STAR Refinery is going to produce naphta, xylene, reformat which are substantial raw materials for petro-chemistry industry and also diesel, jet fuel, LPG and petroleum coke etc. products which constitute important items of current deficit; thus provide 25% of our country’s refined oil products requirement.Thus, our country’s foreign source dependency is going to decrease and 1,5 billion dollars will be contributed for narrowing of current deficit.STAR Refinery’s total project cost is 6,3 billion dollars. 3,3 billion dollars of total project finance cost was covered by the loans received from international credit agencies; also the remainder was covered by the investors (SOCAR and Azerbaijan Ministry of Economy). Project financing has the feature of being the largest and longest term loan agreement of Turkey in terms of loan extent and term. Financing of the project, defined as one of the largest oil and gas project financing operations of Europe, Middle East and Africa (EMEA) region of 2014, also had collected 3 awards out of 4 nominations among the financings in Turkey in “Bond & Loans Awards” event held by Global Financial Conferences annually.

Besides the necessary permits taken in compliance with Turkish Environmental Regulations and Environmental Impact Assesment approvals in the establishment phase, International Environmental and Social Impact Evaluation Study has also been conducted. STAR Refinery, designed with an economically applicable and environmentally sustainable ultimate cutting-edge technology, carries out its operations pursuant to Turkish Environmental Regulations, International Finance Corporation (IFC) and International Performance Standards on Environmental and Social Sustainability.

ABOUT STAR REFINERY


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Capacity : 10 million tons/year (214.000 barrels/day)

Configuration : High

Transformation Refinery Complexity : 9,0 NCI

Crude Oil Processing Gap : 28-36 API

Capacity of Warehousing : 1.630.000 m3

Investment Worth : 6,3 billion USD

TECHNICAL INFORMATION PRODUCTION PLAN

Category Product Amount(Thousand tones / year)

Low sulfurous diesel 4.8001.6003201.6001.000700160

Jet fuelLPGLight NaftaReformat and mixed kslienPetroleum cokeSulphur

Motor fuels

Raw material for petro-chemisrty

Other


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Agreements with four leading companies (Technicas Reunidas - Saipem - GS Eng - Itochu) which undertake EPC (Engineering, Procurement, Construction) phase, were signed. ESIA report published.

Environmental Impact Assessment (EIA) report came out as positive.

Agreement for project financial loan was signed. STAR Refinery had collected 3 awards out of 4 nominations among the financings in Turkey in “Bond & Loans Awards” event held by Global Financial Conferences annually.

Feasibility was completed. Pre-engineering design contract and FEED - Front End Engineering Design package agreement were signed. Licence was taken out. International ESIA practices were started.

STAR Refinery financing was also awarded as the “Refinery Financing Deal of the Year” and “Global Refinery Project of the Year” by 3 world - famous organizations.

FEED process was completed. Construction started on 25th October. In November, EPC (Engineering, Procurement, Construction) process was started.

Large part of heavy and super heavy equipments of Star Refinery was launched in the field.

In December, STAR Refinery obtained the certification of Strategic Investment Incentive as a first in Turkey.

The first flow of crude oil was delivered from Azerbaijan.Initial start-up of the first compressor, initial vapor blast to refinery lines, initial boiler ignition, demineralized water production, ignition of Flares was occurred. STAR Refinery officially inaugurated in October. By the end of 2018, commissioning was completed substantially.

MILESTONES09 10 11 12 14 15 16 17 1813

2.860 decares of field was assigned to STAR Refinery, which was owned by Petkim previously.

2008

The first power phase was completed and the first pipe was engaged.


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STAR Refinery Quality Control Laboratory also started working and accredited from 96 test methods

by Turkish Accreditation Agency ( TÜRKAK) in terms of being convenient of efficiency, employee

competency and technical conditions according to Laboratory Quality Management System’s

“TS EN ISO/IEC 17025 Standard of General Conditions for Experiment and Calibration

Laboratories’ Competence”.In this context, all 97 parameters, those were planned to be

included in the accreditation, were performed under the observance of inspection team and

technical requirements including competency of laboratory staff, verification and uncertainty

of measurement were reviewed. STAR Quality Control Laboratory became the first laboratory

passing this inspection and become entitled to receive Accreditation Certificate by proving its

international competence in all parameters.

STAR REFINERY IN FIGURES


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Before operation; 80.000 ton crude oil

necessary for the crucial production

test, was delivered to refinery with

244 m long Absheron tank. Refinery’s

initial raw material was Azeri light

oil coming from SOCAR’s homeland

Azerbaijan.54kV power supply was powered, subsequently the main station and 13 sub stations were successfully powered.

5400 km instrument cable was installed.

3200 km electric cable was installed.

388.200 m3 concrete was used.

76.000 tons steel was used.

55.000 tons above-ground pipe installed.

1.045.000 m2 paint was used.

72.000 tons equipment was installed.

35.000 tons of tank was installed.


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Star Refinery believes human resource is the keystone of a successful corporate structure. Based on this point; STAR Refinery aims to enrich and carry the human resource forward.

To reach this aim, STAR Refinery focuses on forming a well-raised, innovative, open to change, team player, skillful, energetic, dynamic human resource also having a potential to improve themselves as well as the work and embracing the universal ethic codes and corporate values.

SOCAR Turkey’s expectation is that all employees should assure to perform all work processes successfully, safe and responsibly by using their knowledge, skills and expertise within the scope of SOCAR Turkey’s fundamental values of transparency, mutual trust and perfection in practice.

HUMAN RESOURCES MANAGEMENT

In this sense, placement of the right employee to the right position becomes crucial and enables to build a strong, motivated team also bonded with other members and company.Human Resources Department completed hiring the majority of the workforce by December 2018 to have a successful outcome and start operating in the commissioning phase, by selecting operators, technicians and engineers appropriate for the positions and assignments with tests and interviews especially designed for this recruitment process.

STAR Refinery believes that employees are the key factor in building and maintaining relationships based on trust and respect with government entities, neighboring communities, providers and other shareholders. Therefore; employees, already been selected among technically and professionally skilled candidates, are provided career progression programs they require, such like career development, personal growth, leadership development.

STAR Refinery undertakes to provide equal employment opportunities to all its employees in compliance with the legal legislation. Age, gender, race, ethnicity, religious belief, disability or marital status related discrimination is not allowed among the employees.

Forced labour or child labour are not accepted in STAR Refinery; prime contractor and sub contractor companies are expected to adopt this principal as well. In addition, it is guaranteed by agreements that product and service suppliers of STAR Refinery does not use forced labour or child labour.


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TRAINING AND IMPROVEMENT To utilize the human resource in the most efficient and productive way, STAR Refinery supports its employees’ personal and professional growth in line with their career maps, in accordance with company’s targets and strategies.

As a result of considering training and improvement as an investment in company’s most important resource, STAR Refinery creates a professional work place and career improvement opportunities and contributes to the progress of its employees with multiple training programs. Within this scope, STAR Refinery provides career development and personal growth trainings to its employees in STAR Refinery Training Center which was completed in 2017. STAR Refinery Training Center has the capacity of having 500 attendants in 12 classrooms at once.

INTERNAL RECOMMENDATION AND COMPLAINT MECHANISM In STAR Refinery, an internal recommendation and complaint mechanism is available which allows all employees -including primary and sub contractors’- to transmit their work related issues by e-mail, phone or personally, also by name or anonymously.

Within the scope of this mechanism; recommendations and complaints are recorded and conveyed to related departments. Following the investigation of recorded complaints, complainant is notified on the action plan and follow-up process.

EMPLOYEE PROFILE In the operation phase, STAR Refinery’s number of employees is going to reach to 1.100, involving approximately 650 technical staff and 450 engineer, management and administrative staff in total.

In the construction and installation phase, number of total workforce reached approximately to 10.000, as the sum of prime contractor that employing 3.000 engineers from 14 different countries, sub contractor and employer STAR Refinery’s employees, during the project.

Total number of employees: 19.500 (In the peak period) Number of employer’s employees: 1.100 Number of prime contractor’s employees: 700 person Number of sub contractor’s employees: 18.219 person (In the peak period) Number of personnels employed from Aliağa and other counties of İzmir (Total of employer, prime contractor and sub contractor): 6.400 (STAR: 360) Total number of female employees: 576 (STAR: 113) Total number of disabled employees: 76 (STAR: 15)

White Collar 462Blue Collar 636Grand Total 1098

Male 985Female 113Grand Total 1098

Primary Education 2Senior High School 272Associate Degree 468Bachelor’s Degree 311Master’s Degree 45Grand Total 1098

To manage, follow-up and report all training related activities, an electronic infrastructure called SOCAR Learning Center was set up. 120.000 hours of training has been provided in STAR Refinery up to the present. Besides OHS, trainings on 911 different issues in personal and professional growth categories were provided to hundreds of employees in 2.030 groups.

19.500 TOTAL NUMBER OF EMPLOYEES (In the peak period)

Personal growth 9%

OHS-E 26%

Technical Development

40%

System development 1% Orientation

3%


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STAR Refinery aims to prevent all kinds of incidents threatening the health and safety

of its employees and neighboring communities. STAR Refinery attaches priority to

Occupational Health and Safety (OHS) Management among all other business

processes; based on this, provides continuous and efficient prevention for avoiding

incidents and minimising possible effects on human health and environment during

each phase; including pre-construction, construction, installation, engagement and

operation; within the scope of its OHS - E Policy.

Construction and engagement operations are being monitored by more than 400 OHS

personnels from primary and sub contractor employees. Besides these employees

specialized in OHS, specialists experienced in jetty work, lifting operations, mechanic

work, electric work, traffic and radiography also support construction and installments

to be carried out safely.

For the operation phase, a team of 95 people has been organized within the scope of

four disciplines (OHS, Process Safety, Environment and Fire-fighting and Rescue) in

line with international standards.

In STAR Refinery, responsibility of safe work environment maintenance does not belong

only to OHS specialized teams; it is shared equally by all employees; therefore to

preserve this culture intensive training programs are provided to all employees.

Besides the basic OHS trainings all employees receive from the very beginning;

additional trainings on job specific subjects (Closed spaces, working at height, load

lifting operations, driving vehicles safely, leave days, emergencies, signaller training

etc.) are also provided and periodically repeated.

Constituted for educational purposes, STAR Refinery Traning Center provides

a 80 hour OHS training program (64 hours technical training, 16 hours compulsory

training required by the legislation) in accordance with the fields of operation within.

274.012 hours of training has been provided in the refinery since the construction

started.

OCCUPATIONAL HEALTH AND SAFETY MANAGEMENT

Total working hours has been reached to

137 million man-hours as of December

2018. Total recordable incident rate (TRIR)

has been actualized 0,260 per 200.000

man-hours from the beginning of the

project. As STAR Refinery believes all

accidents can be prevented; it is aimed

to set this rate to zero. To put this aim

into practice and ensure all employees’

occupational health and safety; OHS

Management System was created under

the guidance of SOCAR Golden Rules, which is based on the learnings through industrial experiences.

10 GOLDEN RULES

In the scope of this system; OHS

Performance Evaluation Auditing Program

(SHAPE) was consituted with the purpose

of measuring and improvement of

occupational health and safety during

construction phase. SHAPE enables to

indicate fields of improvement in terms of

occupational health and safety. Continuous

improvement is aimed by weekly controlling

programs, detection and execution of

corrective and preventive operations and

monthly follow-up reports in ongoing

construction and startup operations in

different stations.


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WORK AUTHORIZATION

ROAD SAFETY

ENERGY INSULATION

ENTERING INTO CLOSED SPACES

WORKING AT HEIGHT

LOAD LIFTINGOPERATIONS

LOAD LIFTING OPERATIONS

CHANGE MANAGEMENT

SIMULTANEOUS WORK

PERSONAL PROTECTIVE

EQUIPMENT ( PPE)

Employees and teams who show successful practices in work safety are awarded monthly

to remark occupational health and safety and to raise awareness of following the work

safety rules. STAR Refinery top management also attend award ceremonies and share

their messages concerning OHS.

In STAR Refinery, industrial updates are followed up to improve process safety with the best applicable techniques. Possible system based risks are spotted at design and engineering phases and scientific precautions are taken to minimize the detected risks. Pre-Start up Safety Reviews (PSSR- Reviews enabling to control the facilities’ compliance with unique design and working principles in terms of process safety) is one of these precautions.

Simultaneous commissioning and constructing operations require the risk assessment to be applied with Simultaneous Operation (SIMOPs). This practice is also effective to raise risk awareness of employees and eliminate risks. Simultaneous operations are consulted in daily SIMOPs meetings and controlling is carried out by work permit system. Related procedures are carried out for permissable operations.

In addition to this system and methods, “SAFE: SOCAR Aims for Efficiency” program which reflects SOCAR Turkey’s corporate OHS-E vision in 16 core principals and forms the basis of all OHS-E management systems’ of group companies, is also carried out. These principals are:

Regulatory Compliance Management’s Leadership and Responsibility Risk Evaluation and Management Operational Responsibility Constructor and Supplier Management Efficiency, Training and Behavior Change Management Facility Design and Construction Environmental Evaluation and Management

Human Life Protection Information and Documentation Social Responsibility Customers and Productions Performance Follow-up and Development Incident Analysis and Prevention Emergency Preparedness and Crisis

Management

Demonstrations are also organized to raise awareness of actions to be taken in case of emergencies. Within the scope of Emergency Management Plan, demonstrations concerning the possible emergencies during start up and operation phases are carried out and methods of response to possible scenarios and emergency communication system are tested.

In 2017, 120.070 employees received 274.012 hours of training in the refinery.


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45 46

ÇEVRE

bekçileriyiz. Gelecek nesillere temiz bir çevre bırakmak için liderlik yapıyoruz.

Tüm kazalar engellenebilir.

önem veririz.

politikamızdan sorumludurlar.

Zaur GahramanovCEOSOCAR Türkiye

Genel MüdürSTAR Rafineri

SAFE 02-01-03

S O C A R

A I M S

F O R

E F F I C I E N C YPolitikası

Health, Safety & Environment (HSE) Policy

SOCAR Turkey is committed to a culture of adopting OHS-E industry best practices which is foundational in achieving safety, environmental and occupational health excellence.

Zaur Gahramanov CEO SOCAR Türkiye

Mesut İlterGeneral ManagerSTAR Refinery

The health and safety of our employees, contractor’s employees and neighbours is vital to us.

OCCUPATIONAL HEALTH

We value safety as a license to operate. We do not work without providing work safety!

We are loyal guards of our natural resources. We lead the way to deliver a healthy environment for future generations.

SAFETY

ENVIRONMENT

As SOCAR Turkey, we believe: All incidents can be prevented

To work in STAR Refinery, commitment to our OHS-E principles is a must

Environmental responsibilities are essential for our success.

Every single employee and contractor is responsible for our OHS-E policy regardless of their status and rank

Compliance with our OHS-E management system and our commitment to this policy ensure OHS-E excellence.

We deliver on our promises

OUR KEY PRINCIPLES

February 2017

HEALTH, SAFETY & ENVIRONMENT POLICY

OHS PERFORMANCE DATA


47 48

0,000

0,300

0,350

3.000.0003.500.0004.000.0004.500.0005.000.000

2.500.0002.000.0001.500.0001.000.000500.0000

0,250

0,200

0,150

0,100

0,050

Total Rate of Recorded Industrial Accidents (TRIR) 12 months, 200.000 Man Hour)

3,995.395

0,112

0,300

3,926.701

0,104

0,300

4,623.505

0,100

0,300

3,633.191

0,097

0,300

3,465.733

0,087

0,300

3,641.201

0,077

0,300

3,016.545

0,084

0,300

3,085.099

0,078

0,300

2,721.696

0,082

0,300

2,436.867

0,085

0,300

2,915.400

0,093

0,300

2,018.854

0,101

0,300

2.000.0002.500.0003.000.0003.500.0004.000.0004.000.0005.000.000

1.500.0001.000.000500.000

0,025

0,030

0,035

0,020

0,015

0,010

0,005

0,000

Frequency rate of Industrial Accidents with Lost Time (LTIF) 12 months, 200.000 Man Hour)

Jan-18 Feb-18 Apr-18 Jun-18 Aug-18 Oct-18Mar-18 May-18 Jul-18 Sep-18 Nov-18 Dec-18

Jan-18 Feb-18 Apr-18 Jun-18 Aug-18 Oct-18Mar-18 May-18 Jul-18 Sep-18 Nov-18 Dec-18

3,995.395

0,011

0,000

3,926.701

0,011

0,000

4,623.505

0,015

0,000

3,633.191

0,015

0,000

3,465.733

0,015

0,000

3,641.201

0,012

0,000

3,016.545

0,016

0,000

3,085.099

0,016

0,000

2,721.696

0,021

0,000

2,436.867

0,022

0,000

2,915.400

0,023

0,000

2,018.854

0,030

0,000

Man - Hour - Monthly

TRIR - 12 Months

TRIR - Target

Man - Hour - Monthly

TRIR - 12 Months

TRIR - Target

OHS Performance Data

Man hour 2.018.854 39.480.853 136.791.289

1.323.628

3.879

1.450

44.354

46.185

86

344

831.556

0,61%

0,056

0,260

1.323.628

424

34

9.640

9.740

11

54

260.813

0,66%

0,030

0,101

1.323.628

96

0

142

147

4

3

11.910

0,59%

0,099

0,297

Man hour Without Lost Time

Number of OHS Field Checks

Number of Safety Observation Cards

Number of Unsafe Situations / Behaviours

Total Number of Near Miss / Unsafe Situation / Behaviour

Number of OHS Audits

Number of Emergency Drills

OHS Trainings Man Hour

OHS Trainings per 200.000 Man hour

Frequency Rate of Industrial Accidents with Lost Time (LTIF)

Total Rate of Recorded Industrial Accidents (TRIR)

December TotalYear of 2018 Cumulative


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ENVIRONMENTAL MANAGEMENT Not only as legal obligations; STAR Refinery carries out environmental and social impact management practices within the scope of Equator Principals, Union Acquis and IFC Performance Standards, in all business processes. By this approach, STAR Refinery’s socioeconomic and environmental risks and potential negative impacts were specified within the scope of STAR Refinery Environmental and Social Impact Evaluation Study. Also, management principles were defined to minimize these risks and impacts.

Besides Occupational Health and Safety, Environmental and Social Impact Management concept is STAR Refinery’s priority in the carrying out process of business targets. It is expected that all employees should follow these Environmental and Social Management principles -including contractor companies’ teams- in a determined, careful and uncompromisingly manner. Also, all contributor contractor companies’ environmental and social management practices are being monitored.

STAR Refinery, as being aware of its responsibilities to today’s world and future generations; has adopted a sustainability-conscious way of working and making production. STAR Refinery also adopted being “respectful to life, sensitive to nature” as a corporate value and integrated this to all business processes. Environmental and social impact system and processes were established within the scope of this value.

ENVIRONMENTAL IMPACT MANAGEMENTWithin the scope of Environmental and Social Impact Evaluation which is based on the performance standards of international finance companies, ISO 14001 Environmental Management System and the best business practices, it is aimed to manage environmental impacts of STAR Refinery’s business processes efficiently. In this scope, an Environmental Management System was developed to specify, evaluate and minimize the environmental risks.

STAR Refinery adopts the concept of environmental sustainability, that is also one of the main principles of sustainable progress. This concept of Refinery’s is based on carrying out continuous improvement aimed practices and performing the one with the highest level among the national and international necessities. In this direction; conducting of the operations sensitively by efficient usage of natural resources and energy, effective management of all kinds of emission and constant follow up is among company’s corporate objectives.

Principles composing the general framework of STAR Refinery’s environmental vision are given on the right side:

Being the pioneer of making environment-sensitive investments, Not considering the environment protection expenses as a burden; making these expenses for leaving the future generations a more comfortable and viable future. Actualizing sustainable progress in a sustainable environment. Minimizing the potential negative environmental impacts resulting from operations; using best available technologies and efficient practices. Being prepared for emergencies by carrying out Environmental Risk Management in the most correct way.

STAR Refinery prepared management plans concerning a number of basic elements to minimize environmental impacts. Assigning special tasks and responsibilities to employees, taking necessary precautions according to environmental impact evaluation, documenting the improper situations systematically by regular field checks and resolve with improvements, periodic follow-up, reporting and auditing are among these elements.

As a part of Environmental Management System, STAR Refinery and primary contractor have been formed environment teams constituted of environment professionals. These employees are following up the environmental requirements of the project carefully; in the scope of Environmental Management and Monitoring Plans.


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STAR Refinery’s main Environmental Management and Monitoring Plans include the following thematic fields:

Waste Management Hazardous Waste Management Waste Water Management Management of Dust and Other Emissions Monitoring the air quality Resource Productivity Management Management of Dumping Grounds Monitoring the Sea Quality and Sea Sediment Marine Bio-diversity Management Inland Flora - Fauna Management

BEST AVAILABLE TECHNIQUESIn STAR Refinery’s engineering design phase, many “Best Available Techniques” (meaning economically applicable and locally supplied -available- and their way of execution) have been grounded on to provide the whole environment to be protected in the best way possible.

Among these techniques considering and planning many regulations reducing the fugitive emissions including volatile organic compounds which can reach to the atmosphere, the following examples also ranked:

Withdrawal of volatile organic compounds which will be formed during the filling process in refinery jetties, by Vapor Recovery Unit. To dispart hydrogen sulphide from waste gas by cleaning with amine in Amine Regeneration Unit and utilize the waste gas to be used in refinery fuel gas system

Using natural gas instead of fuel oil, enables to avoid threats concerning air pollution and to keep refinery-sourced SOX and NOX emissions in the minimum level. The predicted impact of the project in terms of air pollution is below the limit values of long term air quality that is defined in the Air Quality Evaluation and Management Regulations of National Environmental Legislation.

STAR RAFİNERİ A.Ş.STAR RAFİNERİ A.Ş.STAR RAFİNERİ A.Ş.

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ENVIRONMENT MANAGEMENT OPERATIONS Waste/ Waste water ManagementDomestic waste water which was gathered from fields offices, continued to be disposed of in Petkim Waste Water Treatment Facility. Waste water gathered from project field was also disposed of at certified facilities through licensed companies.In terms of waste management, it was continued to work with licensed facilities authorized by the Ministry, for hazardous / non-hazardous waste disposalsand these facilities also were audited by project environment teams.

Energy and Water managementFor effective usage of energy, energy-efficiency campaigns were conducted. 640.000 m3 water re-used for the pipeline cleaning with pressure or street sprinkling.

As a part of the program, a special traning was given to STAR Project employees by the academic staff of Dokuz Eylül University Marine Sciences Institute, about the marine mammals observed in the zone. OHS-E teams of STAR Refinery, primary contractorand sub contractor were informed on the marine biodiversity in Nemrut Bay and also methods and tools of marine observation.

During framework constructions; before piling operations start, it is checked every morning for 15 minutes that if dolphins are in the area. In case dolphins are observed; construction pauses and due precautions are taken until they leave the area. This is one of the tangible objectives of this program.

UK originated Aquatic Engineering (UK) actualized the set up of silt curtain that serves as a barrier against sediments and suspended solids potentially originated from construction, as one of the precautions STAR Refinery took to protect marine ecosystem.

Within the scope of Marine Biodiversity Management Plan, regular monitoring is pursued by Dokuz Eylül University Marine Sciences Institute; also STAR Environment Team makes marine observations every two days.

Soil Management :Qualified vegetable soil coming from STAR Refinery excavation site, was used to regenerate Aliağa Güzelhisar dumping grounds. Also; the rest of the stored soil was continued to be used for greening the chamfers. In this practice, after vegetable soil spreaded on to chamfers; seeds blended with water by using “hydro-seeding” method and sprayed on for greening.

Air Emissions Management:Regular maintenance and air filter change had been done concerning the equipments causing emission such like heavy equipments in the construction field, generators and also project vehicles. In the scope of settled dust management, street sprinkling had been done every two days especially under dry air conditions.

Pollution Preventing Operations:Usage of spill kits and drip trays were provided to avoid all kinds of oil or chemical spill or leaks which may reach to groundwater or the sea; and also cause land pollution.

Rehabilitation Operations: Rehabilitation have started in Çaltılıdere ve Güzelhisar D dump sites, which were used for dumping construction remains. Following the soil compaction, topographical collocation and spreading the vegetable soil operations in 2013 - 2014; revegetation in the field had been observed. Successful forestation of Güzelhisar D field in cooperation with Ege Orman Foundation is also beholded. Annual maintenance is being continued.

Forestation opoerations:During the field organizing phase before the construction; in return for 5.000 trees which were cut down under the control of İzmir Regional Forest Directorate; 21.000 trees were planted to Haydar Aliyev Forest by SOCAR beginning from 2011

Operations for Preserving Marine Life:Parallel to jetty construction; STAR Refinery has started greater marine animals monitoring program including sea turtles and marine mammals within the scope of Marine Biodiversity Management Plan.


55 56

Soil Analysis:Prior to construction process, field reference study was completed after the analysis of soil samples taken from the field. During the construction phase, soil analysis studies are carried on in the areas considered necessary, as a part of environmental inspections.

Sea Water Quality:Prior to dock constructions, sea water quality reference measurements were carried out at different points and periodic measurements were carried on during the construction phase. Sea water general quality criteria analysis were carried out by an accredited laboratory in the scope of related regulations. In addition, turbidity that may be caused by construction is monitored by online monitoring system.

Marine Biodiversity and Marine Chemistry:Studies in collaboration with Dokuz Eylül University Marine Sciences and Technologies Institute, involve detection of Posidonia Oceanica’s (an endemic sea plant of Mediterranean) detailed coordinates, marking with buoys, gathering of samples and building monitoring stations with vaults.

ENVIRONMENTAL MONITORING OPERATIONS STAR Refinery facility takes part under the scope of Environmental Impact Assessment (EIA) Regulations’ Appendix - 1 List, Article 1.a, Waste and Chemical Industries which was issued in the Official Gazette and effectuated after then. According to the regulations, EIA reports were prepared for company’s operational processes and related reports were approved by Ministry of Environment and Urbanization Turkish Republic between the years of 2009 and 2014. The refinery’s current EIA report was entitled to get EIA certificate as of January 2018.

Periodic EIA monitoring operations which are based on the elements pledged in the EIA reports, are conducted by ministerially licensed companies and results are reported to the Ministry on a regular basis.

STAR Refinery’s periodic monitoring operations dependent to Environmental and Social Impact Evaluation Study, is conducted by another international firm.

ENVIRONMENT MANAGEMENT TRAININGS

With the purpose of enhancing STAR Refinery employees’ environmental management competences; operation based (construction / commissioning) environmental management, spill and waste management trainings are provided.

In the meanwhile, environment campaigns are being conducted to raise awareness and ensure following of the environmental standards; concerning the issues of response to fuel and chemical spill, waste management including hazardous wastes, filtration of concrete waste water, resource wastes, waste sacks’ color codings, spill kits / stations,

energy saving and internal natural resource productivity.

Detection of sea turtles’ potential breeding sites, marine mammals (seals and dolphins), firm ground living creatures , fish and invasive species, marine sediment quality, detection and monitoring of heavy metal deposition through mussels and more of the same operations are included in the context of the multidisciplinary monitoring program based on marine chemistry and biology. Monitoring, will be repeated once in six months until the end of jetty constructions. Again, in line with the related plan, a specific training was carried out to STAR Refinery employees about the sea mammals which are seen in the zone.

Besides the regular inspections STAR Refinery environmental team conducts in the field, during the construction in marine space; potential progression and regressions in seagrass habitats are also being monitored on half yearly basis with support of Dokuz Eylül University and their lepidochronology and buoyage approach.

In addition, monitoring through satellite imaging was carried out and turbidity measurements were pursued with the devices placed to buoys. Also, to measure the sediment deposition, grade stakes were installed to the bottom of the sea.

Ambient Noise, Settled dust and PM10: External environment air quality and environmental noise measurements are carried out by an accredited company since 2015.


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Regardless of the time operating period takes, large scaled industrial companies interacting with

the local community is inevitable in today’s world. These companies act more responsible about

managing this interaction, while the sustainable progress targets are addressed in the global

platforms.

Receiving interacted shareholder communities’ approval plays a great role in the sustaining

of operating uneventfully in the same region for years. This community approval is beyond

quantitative expression and can not be provided by a certificate/licence; yet it is expressed as

Business Social Licence in the global platform.

STAR Refinery considers corporate reputation as an indispensable value and carries out

practices to protect and enhance Business Social Licence for pursuing its existence with positive

interactions for many years.

With this approach; STAR Refinery aims to pursue the positive dialog with neighboring

communities as well as to provide maximum added value to its surrounding community.

In line with this purpose, here are the social impact management actions, plans and mechanisms

STAR Refinery builds and carries out to get to know its neighbors, identify their needs and pursue

its existence in cooperation with:

SOCIAL IMPACT MANAGEMENT

SOCIAL IMPACT EVALUATION STUDY STAR Refinery meticulously observe Social Impact Management Principles which are constituted for the management of socioeconomic risks and potential negative impacts within the scope of STAR Refinery Social Impact Evaluation Study (SIES) in 2013. On the other hand, considering the changing dynamics in the region; another Social Impact Evaluation study conducted by a third party in the second quarter of 2018 and STAR Refinery’s social risks and impacts readdressed according to current affairs.

SHAREHOLDER PARTICIPATION PLANBeing a reputable, trustworthy and accessible company in the eye of its shareholders in the operated region is one of STAR Refinery’s priorities. Being attentive to conduct a transparent and two-way communication with shareholders; STAR Refinery constituted a Shareholder Participation Plan as a part of IFC performance standards.

Within the context of this plan, after key shareholders are identified, they are provided to convey their questions, opinions and recommendations to STAR Refinery on a regular communication basis. Shareholder Participation Plan is updated on regular basis and improved according to regional dynamics.

In the direction of participation, as an essential of ideal social impact management, regular meetings are organized with shareholders for open and continuous communication and social risks are tried to be minimized by getting feedback on the sensitive matters. On the matters impacting or having a potential to impact a limited group of shareholders, targeted shareholders are being informed, getting their feedback taken in idea exchange focus group meetings. In this scope, 264 local shareholder meetings has been conducted by this time, including 2 “Public Participation Meetings” with high level of participation and one-to-one meetings with local public authorities, educational institutions, neighborhood representatives, media and community representatives, organized by STAR Refinery and primary contractor TSGI Engineering Construction. By this means, local shareholders were included in STAR Refinery’s planning and implementation processes of social impact management.

STAR RAFİNERİ A.Ş.STAR RAFİNERİ A.Ş.

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RECOMMENDATIONS AND COMPLAINTS MECHANISM

In addition to Shareholder Participation Plan that is ensuring a transparent dialog between

shareholders and STAR Refinery; a recommendation and complaint mechanism was

developed for conveying recommendations and complaints concerning STAR Refinery

operations. By means of this mechanism, recommendations or complaints can be

conveyed to primary contractor’s relevant department or directly to STAR Refinery’s related

departments. It is also enabled that every single complaint and recommendation is recorded

down and solved immediately.

Owing to this mechanism, almost been used from the very beginning of construction, Star

Refinery managed its impacts on time and solved 80% of recorded shareholder complaints

up to date since 2015.

SOCIAL INVESTMENT PROGRAM

Besides global sustainable development goals, STAR Refinery aims to contribute to social

development considering the socioeconomic and cultural needs of its operational region.

Having a great employment and local purchase volume, STAR Refinery created a significant

added value for region’s and country’s economy. Based on the SED study in 2018 which was

conducted to examine the region’s socioeconomic structure for social investment programs

planned to be in operation phase; STAR Refinery already started designing investment

programs. In the designing phase of these programs, inline with the participation principle,

opinions and suggestions of key shareholders are taken and possible cooperations are

planned with the program related shareholder groups.

Not only through the projects; STAR Refinery actualizes its social progress goals also by

prioritizing local source usage in all business processes.

STAR Refinery bases on “local purchasing” approach in all purchase and logistics processes.

During construction phase, the amount of realized purchase within the country is 710

million TL. 93 million TL of the purchase is actualized directly from İzmir. STAR Refinery aims

to contribute local suppliers’ and companys’ development by pursuing local purchasing

approach in the operation phase.


63 64



.

SOCIAL RISK MANAGEMENT

With social risk management, STAR Refinery aims to specify its social and economic risks and their negative impacts; to take necessary precautions for minimizing these effects and to track social performance in all business processes. Towards this aim; social risk management concerning local employment, local purchasing, working conditions, public health and safety continues constantly in all business processes.

HEALTH IMPACT EVALUATION STUDY

Within the scope of social risk management, Golder Associates and International SOS, as third parties, conducted a Health Impact Evaluation Study in Aliağa, that was financed by STAR Refinery in 2017.

The study was conducted as individual shareholder interviews and focus group meetings by 6 experts in June 2017. In 1 week field research, 14 shareholder meetings were carried out, including interviews and focus group meetings.

Owing to these meetings, gathered information on social health was approached within STAR Refinery’s scope of operation; and potential opportunities and risks were specified.

The aims of this proactive study were specifying STAR Refinery’s opportunities to contribute local community’s health, predicting potential impacts of the refinery operations on public, evaluating, determining local community’s general health conditions and specifying volunteer public health projects as corporate social responsibility before the production kick-start.Results of this research was shared with local key shareholders. Concerning the potential projects based on the research, meeting and planning processes still continue.

MANAGEMENT OF WORKING CONDITIONS

Working and accommodation conditions of project workforce were constantly monitored by relevant STAR Refinery teams from the beginning of construction. As part of international standards’ necessities; regular accommodation camp inspections were conducted with primary contractor, processes of employees’ bringing up issues in regular meetings and main contractor’s problem solving were monitored and accommodation facilities’ sufficiencywas provided.

65 66

FISHERY ACTIVITIES RESEARCH Within the context of social risk management, one of the studies STAR Refinery conducted before production phase in 2017 was Retrospective Trend Analysis and Current Situation of Fishery Activities in Aliağa and Immediate Environment Research.This research was conducted by Muğla Sıtkı Koçman University, Faculty of Aquaculture and financed by STAR Refinery.

STAR Refinery adopts being “Respectful to Life, Sensitive to Nature” as a value. With this scientific study, STAR Refinery aimed to detect positive and / or negative impacts’ on fishery activities in Aliağa during construction phase and also to predict the potential positive / negative impacts in operation phase. STAR Refinery is the first company in the region, conducting a research to such an extent.

Within the scope of this scientific research conducted in August 2017, a team of 12, including 4 academists, reached to 171 people who were involved in fishery activities in Aliağa, Çaltılıdere, Yenişakran, Çandarlı, Çakmaklı ve Yeni Foça and conducted a field work through surveys.

In addition to field work, information and documentations –which were thought to be contributive to the study- obtained from related state institutions and organizations and also NGOs, were analysed. Gathered information was reviewed in the context of STAR’s positive/ negative impacts.

Research results indicate that:

In Aliağa, where industrialization gains speed since the beginning of 1970s, fishery activities are no longer one of main sources of living and young generation does not have a tendency towards it. Fishery activities do not provide a regular income as the main source of living also in the region and had lost its popularity. The main reasons behind decreasing fishery activities in Aliağa are inaccurate hunting techniques and poaching. In addition with the reasons above, it is also seen that Private Security Areas which are obligatory to be allocated around coast facilities by Prohibited Military Zones and Zones of Security Law and Legislation, avoid the fishermen to reach productive fishing areas. For this reason, the favorable area for fishing activities were narrowed down; however these prohibited areas form an ideal breeding ground for fish.

As the result of the relevant research, it is confirmed that STAR Refinery does not have a negative impact on the fishery activities in Aliağa. For the sake of corporate responsibility, STAR Refinery shared these research results with concerning shareholders and held consultations on the relevant precautions to be taken to develop this activity. Relevant evaluations and shareholder meetings are currently maintained.


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Within the scope of Corporate Risk Management, STAR Refinery aims all strategic, operational, financial, compliance, external and other risks and opportunities -which are possible to be confronted in and out of the company- to be defined, detected, followed up and minimized or ideally eliminated in terms of their potential effects on the company and shareholders.

All related company units aim to reach minimum risk level or eliminate the risk by taking risk evaluation actions appropriately to the requirements of national and international legislation, in line with Star Refinery Risk Management Unit’s guidance and coordination.

The purpose of risk evaluation is to compare risk levels and make potential risks manageable by defining, evaluating, prioritizing, monitoring, reporting and categorizing to contribute to decision making process according to risk analysis results.

The role of Risk Management Unit in STAR Refinery is to ensure the company reach to its strategic targets with minimum loss by following determined procedures and legislation also with other business units.In this process, this unit determines all potential risks and opportunities to enable the company to benefit from the confronted opportunities in the highest level possible and prepares specific action plans. Facilitates the required coordination to put these actions into practice, evaluates the result and presents to top management.


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Reduction (Fighting against the risk,

controlling)

Avoiding (Withdrawing)

Transferring Etme (Sharing)

Accepting (Taking the risk)

Using the opportunities

Initially, specifying the risks,

detection of their sources,

fields of impact, reasons and

determining of the potential

results are important in risk

management process.

Discussing the risks, the following

methods are used according to

risk conditions:

71 72

CORPORATE RISK MANAGEMENT


73 74

Vadistanbul Bulvar, Ayazağa Mah.Cendere Cad. No: 109-E, 1D Blok, 34485, Sarıyer / İstanbulT. 0212 305 00 00F. 0212 305 01 00E. [email protected]

Siteler Mah. Necmettin Giritlioğlu Cad. No:6/1, 35800 Aliağa / İzmirT. 0232 966 60 00E. [email protected]
