Occupational health and safety

We recognise that our work carries inherent potential risks so, throughout the Group, we aim to eliminate all work-related injuries and illnesses and remain committed to protecting the health and wellbeing of our staff, the people who come into contact with our operations and those in the communities in which we operate using sound health, safety and security management systems.

Health and Safety Management

With the support and cooperation of our employees, our CRMS helps us to assess risks, implement health and safety controls, set objectives and monitor performance against targets. HSE Leadership Teams in Bangladesh and within Cairn India provide effective leadership on all health and safety matters, review performance and identify areas for improvements.

Safety In 2009

2009 was a challenging year for Cairn in terms of health and safety performance. Tragically, three fatalities occurred in 2009 within or involving Cairn India or its contractors. Two of these accidents, involving a crane in a contractor's yard and a road traffic accident, occurred outside our premises, where we do not have direct control, but the other involved a contracted worker at the Mangala Processing Terminal.

Regardless of how they occurred, all such events are deeply regrettable and are always reported and investigated fully. Recommendations, including improving the contractor's compliance to our safety management systems and the need for closer supervision, have since been implemented with the aim of preventing any recurrence of such incidents.

Illness and Injuries

In 2009, sickness absence in Cairn India amounted to a total of seven days or 0.61%, while the Edinburgh office lost a total of 400 days or 3.19% to sickness absence in 2009, the equivalent of four days per employee. In Bangladesh, sickness absence amounted to a total of 135.6 days or 0.79%. A 2009 survey conducted by the Chartered Institute of Personnel and Development (CIPD) found the average UK sickness absence rate to be 7.4 days per employee. Therefore, the Company does not consider itself to have a high degree of employee sickness absence.

Regrettably, early in 2009, an incident causing an individual to lose days at work was recorded at our Sangu facility in Bangladesh – our first in the country for 10 years – and 15 incidents were recorded in India that caused individuals to miss days at work. These incidents were investigated thoroughly and actions defined to prevent reoccurrence.

For Cairn India, the LTIFR improved slightly in 2009, while the rest of Cairn recorded an increase from 0 to 0.6 per million man-hours. Overall, across all our Cairn businesses, the LTIFR of 0.26 per million man-hours remained below the OGP global average for the upstream oil and gas industry (as measured in 2008), of 0.55 per million man-hours.

Due in part to a new incident management system, Cairn India has improved the quality and quantity of near-miss and incident reporting, while a Safety Observation Programme to monitor and improve workforce safety behaviour has led to more than 9,000 safety observations being made during 2009 (a 300% increase from 2008).

In addition, more than 50,000 contract workers were trained via an HSE induction programme, 10,000 workers attended HSE awareness road shows at the Mangala Processing Terminal and a further 6,000 workers received HSE training in the Midstream project. Such initiatives led to some impressive results, including:

• Upstream projects achieved a world-class record of 35 million LTI-free man-hours by the end of December 2009;
• Midstream pipeline team achieved 6.5 million man-hours without an LTI since August 2009;
• the Suvali terminal recorded five consecutive years of LTI-free working, totalling over 7 million man-hours; and
• the Ravva terminal achieved approximately 2 million LTI-free man-hours since 2008.

However, despite such progress, we recognise the need to maintain our commitment to reducing incidents within our operations, so we also monitor the TRIFR. This measure of fatalities, lost work day cases, restricted work day cases and medical treatment cases improved slightly in Cairn India in 2009, and across all businesses, remains below the OGP global industry average of 2.08 per million man-hours.

Road Safety

Road travel across our activities, but particularly in India, Bangladesh and Tunisia, is a key safety issue and driving safely remains an important focus area for our business.

In 2009, as part of a series of focused campaigns on workplace hazards and road safety, around 1,000 Cairn staff attended road safety and defensive driving training programmes at our Gurgaon offices and other sites.

While we take this matter very seriously and have already aligned our approach and focus towards road safety in these locations, there is still work to do to consistently achieve our standards and expectations.