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What still went wrong in 2015 - Annual Report 2015 - DSM

What still went wrong in 2015

Although DSM strives to improve its performance in all areas of its operations, sometimes things can still go wrong.

This chapter summarizes the most important incidents in 2015, across the three dimensions of People, Planet and Profit. DSM endeavors to remedy the outcome of incidents and prevent these from recurring, as well as to identify and learn from business developments that have not progressed as planned. To this end, DSM investigates the root cause of any serious occurrence and takes steps to close the loop to eliminate the cause and start the improvement cycle. DSM subsequently communicates measures as appropriate, including applying stricter requirements or operating procedures if called for.

An example relates to hand injuries. Hand injuries are among the most common industrial injuries and regrettably there were three such incidents involving DSM employees during the year (details below). The company took specific action to raise awareness about the importance of hand protection in the workplace and the importance of applying the company's Life Saving Rules in this respect.

Where necessary, DSM applies consequence management to individual employees based on its Code of Business Conduct, see Business principles. DSM does not disclose any personal details in cases involving individuals.

In line with its reporting policy on Safety, Health and Environment and security, DSM includes some serious near misses within this overview. These are incidents that did not result in injury, illness or damage, but had the potential to do so, and are therefore used as a learning opportunity. DSM furthermore recognizes that the period of reorganization that the company is undergoing puts people under stress; this is an area of attention.

People

  • Besides striving to provide as safe a working environment as possible, DSM also aims to foster sustainable health among its employees and a voluntary Wellness Checkpoint Program has been running since 2008. In 2015, 64% of the 1,836 participants indicated experiencing moderate to very high levels of stress. Consequently, the occupational health sections of the new DSM Responsible Care Plan 2016 – 2020 include a specific focus on the implementation of a mental resilience program as an integral part of Vitality@DSM and its various initiatives: nutrition, exercise, recovery and mental health. With this renewed focus DSM seeks to strengthen and foster a real culture of health among its employees.
  • At DSM Fibre Intermediates in Sittard-Geleen (Netherlands) an employee was de-icing a company car when a colleague inside the vehicle closed the electric window without noticing that one of the victim’s fingers would be trapped. The employee lost a portion of a fingertip as a result. DSM took steps to raise awareness about the potential for this type of accident with electric windows.
  • At DSM Nutritional Products in São Paulo (Brazil) an employee trapped a finger between a piston rod and a valve leading arm, leading to the loss of a fingertip. The background to this incident was insufficient attention for the LOTOTO (Lock-out, Tag-out, Try-out) procedure. DSM subsequently reinforced the implementation of this aspect of its Life Saving Rules and the importance of performing a job safety analysis.
  • At DSM Engineering Plastics in Emmen (Netherlands) a clamp fell onto an employee's hand during maintenance of a gear wheel. The hand injury meant that the employee was unable to work for a long period.
  • At DSM Nutritional Products in Deinze (Belgium) two electric pallet trucks collided, trapping an operator’s foot. Fortunately no permanent injury resulted.
  • At DSM Nutritional Products in Belvidere (New Jersey, USA) an employee got hot condensate and steam on his legs. After a period of absence the employee made a full recovery. Consequently DSM has raised awareness around working with hot steam or liquids, as many operations involve sterilization at high temperature.
  • At DSM Fibre Intermediates in Sittard-Geleen (Netherlands) a small emission of hydrogen cyanide occurred from the sewer during turn-around activities. Seven people who were working in the direct vicinity were sent to the Chemelot medical care center and then to the hospital. All were found to be ok. DSM has reviewed and improved its procedures for shutdown planning as a result.
  • At DSM Food Specialties in Seclin (France) an incident with fatal potential occurred. While removing a pallet on the third level of a rack, a damaged rail caused two pallets to fall from an upper level. No one was injured.
  • At DSM Nutritional products in São Paulo (Brazil) an employee was returning from a business trip when he was robbed at gunpoint at the airport and had all his belongings including car, laptop etc. stolen from him. Fortunately, he was unharmed.
  • At DSM Nutritional Products, Kingstree (South Carolina, USA), a serious near miss occurred when miscommunication led an employee to remove a plate from a fermenter on the mistaken assumption that the vessel was de-pressurized. The consequence was luckily limited to a minor injury, but could have been much more severe. A flyer was produced to raise awareness and prevent this from happening again.
  • At DSM Dyneema in Heerlen (Netherlands) a near miss occurred when an employee was performing maintenance inspections involving a hot air blower and a spray container. While the employee was on a break and fortunately not in the room, the spray container exploded. This could have caused serious injury had anyone been in the room. DSM reinforced awareness when working with heat sources and spray containers.

Planet

  • At DSM Composite Resins in Schaffhausen (Switzerland) an off-site transport incident occurred with dangerous goods. When the truck was opened for unloading, operators noticed leakage from a drum with corrosive material.
  • DSM set a company-wide target to reduce its water usage by 15% between 2010 and 2015. This is now seen to be an inefficient approach to improving its performance in this regard. DSM has come to the conclusion that it would be more effective to concentrate its efforts on businesses that operate in regions where water is scarce.

Profit

  • In the port of Santos (Brazil) a serious third-party fire disrupted delivery of raw materials to DSM, hampering production and delivery of DSM Nutritional Products to customers. DSM is pursuing liability claims with the relevant service providers.
  • At the Chemelot site in Sittard-Geleen (Netherlands) a fire in a logistic warehouse operated by an external party destroyed inventory and samples for several DSM units. In some cases this led to business interruption or delays in delivery. DSM is pursuing liability claims with the relevant service providers.
  • At DSM Engineering Plastics in Evansville (Indiana, USA) an internal explosion started a fire. This resulted in the plant losing power for several hours.
  • 38 people in various regions were dismissed due to unauthorized absences from work, inappropriate behavior and fraud or theft.
  • On two occasions, online fraudsters pretending to be DSM’s CEO sent email instructions to an employee in the finance department to transfer funds with respect to a so-called confidential and sensitive transaction. In both cases, the finance employees involved verified the unusual request with management, with the result that the fraud attempt was discovered before any harm could be done.
  • Of the four major acquisitions in the Nutrition cluster between 2011 and 2015, Ocean Nutrition Canada (ONC) did not deliver fully on its projected targets. Post-acquisition, consumer demand for ONC’s products, namely fish oil-based omega-3 dietary supplements, declined significantly in its key North American market due to a change in consumer preference. The market as a whole remains very interesting and DSM has taken various initiatives both to bolster the broader market and to strengthen its own position, including investing in a new facility to produce higher-grade and higher-value omega-3 concentrations.
  • DSM has impaired equipment that was built for the manufacture of new materials for the Dyneema® Life Protection market. Cancellation of multiple large Vehicle Protection tenders has meant that actual production volumes were significantly below the capacity of the plant. As the full capacity is not being used, it has been impaired.
  • DSM has impaired its investment in DSM-AGI Taiwan having revised the estimated future earnings potential of the company downwards. Production at one of the company’s main sites in Taiwan was severely limited for more than a year following a fire shortly after DSM acquired its stake, resulting in a loss of market share in a market which has subsequently become highly competitive and shorter-term and remained difficult in 2015.
  • A number of innovation projects at DSM Nutritional Products were closed down because of insufficient business traction. The related R&D spend was impaired as a consequence.