Environmental management and monitoring system for compliance with environmental legislation

Environmental management system [GRI 103Management Approach: Environmental Management System]

Inter RAO has a multi-stage internal monitoring and analysis system for managing the occupational, industrial, fire, and environmental safety of production activities. The Occupational, Industrial, Fire, and Environmental Safety Management System (OIFESMS) establishes a uniform procedure for all the Group’s companies to organize and conduct work in accordance with applicable laws and scientific achievements in occupational, industrial, fire, and environmental safety.

The system is built based on the following basic principles:

  • Leadership by the managers of the Group’s companies in charge of occupational, industrial, fire, and environmental safety
  • Engagement of staff from all levels in work to mitigate production risks and improve the system
  • Personal responsibility of each employee of the Group’s companies for compliance with requirements to minimize production risks that could harm the health and life of employees, the environment, and property of the Group’s companies
  • Motivating staff to identify potential areas for improving occupational safety, industrial, fire, and environmental safety
  • Priority of preventive measures over reactive measures
  • Continuous improvement of the system

The main principle of internal control within the OIFESMS is regular inspections by managers and specialists of different levels, from the heads of the lower structures of production facilities to the heads of management companies and the holding, followed by an analysis of what caused violations of the requirements of the OIFESMS and the adoption of measures to eliminate them.

Environmental impact management is carried out based on the requirements of the international standard ISO 14001:2015, which have been integrated into the OIFESMS. In 2014, Inter RAO’s Environmental Management System was certified for the first time according to the international standard ISO 14001:2004. In 2017, certification was carried out according to the new version of the international standard ISO 14001:2015. In 2019, a supervisory audit conducted by DQS Gmbh confirmed that the Environmental Management System complied with the international standard ISO 14001:2015. Since 2019, all the Group’s generating assets have been certified for compliance with the international standard ISO 14001:2015.

Compliance practices with legislative requirements for environmental protection [GRI 307-1]

In order to meet the changing requirements of the environmental legislation of the Russian Federation and achieve the goals of the Target Environmental Program, Inter RAO is constantly improving its system of in-house rules and policies concerning environmental protection and environmental safety. The Group monitors changes in environmental legislation and analyzes draft regulations regarding ecology and nature management, and its employees take part in public discussions of draft documents.

During the construction and operation of facilities, draft standards are developed for permissible emissions and discharges of pollutants into the environment and waste disposal limits along with sections of project documentation for environmental protection, including measures to reduce the negative impact on the environment and preserve biodiversity.

Information about inspections by oversight authorities
Subsidiary Scheduled inspections by oversight authorities Unscheduled inspections
JSC Inter RAO – Power Generation 12 (no violations found in 4 of them) 24 (no violations found in 14 of them)
LLC BGC 1 (no violations found)
JSC Tomsk Generation 1 (no violations found) 3 (no violations found in 2 of them)
JSC OmskRTS 2 -
JSC TGC11 2 5 (no violations found in 4 of them)
Changes in environmental fines and claims payments, RUB thousand [GRI 307–1]
Changes in environmental fines and claims payments, RUB thousand [GRI 307–1]

The amount of fees for negative environmental impact as well as the existence of penalties largely depends on the natural and climatic specifics of the area where facilities are located, the presence of major industrial plants nearby as well as atmospheric and seasonal phenomena (such as frequent adverse weather conditions, floods, etc.).

Effective mechanisms for managing environmental impacts include claims and public statements by third parties. The Company records, monitors, and analyzes claims and allegations. Similar work is performed with respect to oversight inspections. In 2019, the oversight authorities conducted 50 inspections, of which 18 were scheduled and 32 were unscheduled (including complaints, claims, media reports, and follow-ups on previously issued instructions). In 52% of the cases, no violations were detected.

The most substantial fines were imposed on companies in the Generation segment. The total amount of fines and lawsuits paid in 2019 due to the violation of environmental legislation is negligible considering the scale of the Company’s operations and amounted to just under RUB 1.07 mln. The main factors behind the increase in the penalties imposed on JSC Inter RAO – Power Generation compared with 2018 can be attributed to the combination of an increased number of inspections along with a significant change in the system of penalties:

  • The expansion and detailed elaboration of administrative offenses (10 articles were added to Chapter 8 in 2019), and the amount of penalties was increased for certain articles.
  • A 64% increase in the number of inspections (from 22 in 2018 to 36 in 2019), while the number of unscheduled inspections doubled (from 12 to 24), although no violations were found in 58% of them.

In 2019, the Company was not subjected to any non-financial sanctions for violating environmental laws or regulations besides fines.

Monitoring compliance with environmental protection legislation by suppliers and contractors [GRI 308-1Management Approach: Monitoring compliance with environmental legislation by suppliers and contractors]

Inter RAO strives to ensure that its suppliers, contractors and subcontractors comply with environmental laws, primarily by including a clause on the need to comply with environmental legislation in the text of the agreements it concludes. The contractor is liable in the form of fines for violations of environmental standards. Individuals standard contract forms contain a section on environmental requirements. For example, the standard form of a contract for repair work contains Section 16 ‘Environmental Requirements’, which regulate, among other things, waste management activities.

In an effort to monitor compliance with environmental legislation and the environmental conditions of contracts, Inter RAO experts conduct technical audits of suppliers during which they determine whether suppliers have ISO 14001 certification, among other things. During audits conducted both by a commission or solely by environmental specialists, the activities of contractors are checked for compliance with environmental laws when conducting work on the territory of a separate facility, in particular. If violations are found, the inspectors record them in their inspection report, which is sent to the head of the workshop responsible for the site at which the work was performed. The Company does not keep records of all suppliers that have undergone an environmental audit.