Safety

Performance against targets

We are pleased to report that we far exceeded our goal, reducing our lost-time accident frequency rate by 77.4% since 2007 and this year 66% of our manufacturing locations had no lost-time accidents. The cumulative benefit of our success over the Zero Harm 2011 programme period, is that over 500 fewer people had lost-time injuries and 6,726 lost days were prevented.

That said, we deeply regret that this year, four people, one Diageo employee and three contractors, died while at work due to accidents from construction, a contractor vehicle collision on site and a fall from height. One fatality in our business is too many and we are deeply saddened that the number of people who have died while working for us has risen over the last few years. This runs contrary to the ‘Prevention’ aspect of our Zero Harm Programme and we are doing everything we can to eliminate the risk of such serious injuries in the future. In each case this year we undertook a full root-cause analysis and accident investigation, and significant improvements have been made not only to the respective operations but to similar operations across Diageo. We have also developed a programme to raise our performance in and assurance around the higher risk parts of our business to do everything we can to reduce such severe accidents in the future.

Our safety model

Our manufacturing environment, which includes working with machinery, chemicals, flammable vapours and high pressure steam; working at height; vehicle movements; offers a wide range of hazards to which our people can be exposed. However, within all our operations, we exercise strict health and safety risk controls, through robust risk assessment, best practice global risk management standards and business management processes that drive continuous improvement.  Our systems must also be robust enough to ensure Zero Harm in some of our higher risk activities such as driving on public roads and the safe delivery of significant construction projects.

To deliver Zero Harm, we have developed a comprehensive model for measuring, understanding and improving the prevailing safety standards at every site, based on the four pillars of culture, prevention, compliance and capability.

Culture

We use cultural assessment, leadership safety role modelling and engagement and behavioural tools to influence every employee’s beliefs, attitudes and values, so that they are fully engaged in safety and in preventing harm to themselves and their colleagues. Our prevailing safety culture is assessed, at most sites, every two years using the Diageo Safety Culture Framework and consultation process. This involves all staff and is not a formal union/management process although in some markets trade unions would have been involved in the assessment and action planning phases.

Staff engagement and consultation is a key element of our safety cultural development. Therefore, as required by our global risk management standards, we have a safety committee for every operation/production site and most of our offices.

Prevention

Diageo monitors lost time accidents (an accident resulting in time lost from work greater than one day, beginning the day after the accident) and their severity, as global Key performance indicators. Annual reviews and performance improvement targets are key supports to our prevention strategy. Each site must have annual accident prevention plans in place to track trends and emerging issues, which helps site leadership teams to maintain steady improvements in performance.

To help ensure our employees are prepared to create a safe working environment, we provide guidance on how to be proactive in reducing risks – identifying hazards and controlling them before anyone gets hurt. These include risk assessment tools, detailed control guidance within our Global Standards and guidance that outlines the design and operation of site permit to work systems.

Our global hazard identification and control process, known as Safety Improvement Report Cards (SIRCs), gives anyone working at or visiting a location, the opportunity to raise a safety issue and have it resolved. The number of cards raised and close-out rates are monitored to ensure people’s concerns are given appropriate priority within our systems. Over 34,000 SIRCs were raised in Diageo this year.

We also aim to prevent safety problems recurring, through our accident and near-miss reporting, investigation and root cause analysis structures; as well as post-incident safety alert and incident review processes, in which teams discuss lessons learned and share them across our sites.

In light of the fatalities that occurred in the past year, we are also currently piloting a ‘Severe and fatal incident prevention’ programme that targets the more significant hazards within our operations within the aim of providing global mandatory and robust controls around key risks.

Compliance

Diageo maintains comprehensive best practice global risk management standards for occupational health and safety. Each location is:

• Required to audit compliance to these standards
• Subject to regular formal corporate independent assurance audits
• Required to maintain and assure a legal compliance assessment processes.

These processes are also assured within our independent assurance processes. Many locations across Diageo also maintain external accreditation such as ISO 18001 for their Safety management systems.

Capability

We set global competency standards, supported by global safety training programmes, to ensure people have the skills they need to deliver Zero Harm. Locations are required to operate a contractor assessment to ensure contractor safety management systems and competencies are appropriate to the delivery of Zero Harm within any contract.

Safety performance

¹Number of accidents per 1,000 employees resulting in time lost from work greater than one day, beginning the day after the accident

² Data includes any employee work-related fatalities at our sites. 2011 data includes an incident at a 3rd party controlled and managed construction operation on Diageo owned land. As required by GRI indicator LA7, we report that all fatalities were men.

Geographical breakdown

• Europe: Despite being a region with one of the most mature safety regulatory environments in our business, we have observed a performance plateau in recent years. With notable improvements in the physical environment and systems compliance, it is difficult to understand why. However, the proportion of incidents with a ‘behavioural’ aspect is significant and highlights the importance of our behavioural-based safety programmes for this region.
• Africa: our sites in Africa deliver some of our best lost-time accident performance, which we believe is due to the level of control we have in these locations. However, we have noticed that the accidents that do occur are often more serious and disproportionally involve contractors. As we pursue our strategy of growth in emerging markets, we must work with local stakeholders to help embed a safety-conscious culture.
• North America: thanks to the implementation of a major health and safety programme, our North American manufacturing operations have gone from having the highest accident rate to being one of our best performers. Through a combined focus on accountability, risk assessment and improvement programmes, they delivered a 55% reduction in lost-time accidents in 2010 and have sustained that improvement to deliver a further 58% reduction this year.

Personal responsibility

All the tools and principles of our Zero Harm programme are embedded into our operational processes. We have made good progress, but the real breakthrough will come when each of us at Diageo commits to health and safety on a personal level – for example, by not speeding when driving – rather than just ‘following the rules’ in the workplace. We are looking at how we can engage our people at this level, and so achieve a truly global, values-based safety culture.

Our challenge, then, is not just to implement stringent health and safety programmes, but to engage our employees in accepting personal responsibility for safety ‘every day, everywhere’.

Outlook

In the coming year we will be implementing a new approach to the way we manage high severity safety risks in our business to help eliminate associated high-risk behaviours that could lead to the tragedies we faced this year.

We will also continue to benchmark our Zero Harm activities with external experts and peer organisations to identify new thinking and best practice programmes that can help our business to sustain our performance trajectory in lost-time accidents.