Contractor management

In 2007 we started a redesign of our Contractor HSE Management system to help us identify the practical leadership areas that MOL Group and Contractor Managements had to improve. This change in culture focuses on actively demonstrating commitment to safety by recognizing and rewarding positive safety-related behavior. New system elements include regular work plan reviews and strengthening the description of relevant on-site HSE hazards.

MOL Group has set up a complex system of HSE requirements and evaluation criteria for key suppliers - mainly long term strategic on-site contractors. The system of Contractor HSE Management is described in our global operational regulations and the process is divided into main steps, namely specification of contracted work and HSE hazards relevant for our environment, pre-qualification, contractor selection, pre-mobilization (including training for contractors´ employees), mobilization, on-site monitoring and auditing, demobilization and post-contract evaluation.

Selected contractors are pre-evaluated by external audit company prior to contracting to assess if they are able to fulfill and follow our HSE Management System. The baseline for Contractor HSE Management system is a list of HSE critical or risky activities (e.g. maintenance, scaffolding, lifting and transportation, etc.) and relevant personal and material criteria. The prequalification and also post-contract evaluation process also includes an evaluation of a systematic and proactive approach from suppliers from a HSE point of view. HSE Audits of contractors are cyclic and based on levels achieved by contractors – Basic (valid 6 months), Advance (valid 12 months, Excellence (valid 24 months) – and contractors may get a MOL Group “license” for audited activities.
By the end of 2009 we had pre-qualified more than 150 key, long-term contractors while 57 of them already passed the second round of audits. 46% percent of contractors achieved a Basic level, 48% an Advance level and only 6% of contractors achieved a level of Excellence. A visible sign of improvement is that from contractors who during the first audit achieved a Basic level, only a few percent stayed at the same level after the second round of audits. This is a good proof of our efforts to improve not only MOL Group HSE awareness and performance but to apply the same principles and expectations toward our strategic contractors. The system of external audit execution has already been applied internationally – in countries including Hungary, Slovakia, Slovenia, Italy, Croatia, Serbia, Romania, Poland and The Czech Republic, etc.