Nornickel is one of the major employers and taxpayers in Russia1. The Company makes a significant contribution to the development of local communities by implementing a range of social programmes that address current and potential future issues.

The Company’s key regions of operation in Russia include the cities of Norilsk and Monchegorsk, Taimyrsky Dolgano-Nenetsky Municipal District of the Krasnoyarsk Territory, Pechengsky District of the Murmansk Region, Tazovsky District of the Yamal-Nenets Autonomous Area, and Gazimuro-Zavodsky District of the Trans-Baikal Territory. Saratov hosts Nornickel’s Shared Services Centre. In the Tver Region, the Company is engaged in the construction of housing for its employees under My Home and Our Home programmes. 103-2

Contributing to economic development

Budget payments

Changes in the tax and non-tax payments for 2017 were due to the higher income tax (on the back of increased revenue) and property tax (as a result of growing CAPEX), as well as the planned payroll budget increase.

Employment of local population

As the major employer across its footprint, the Company provides ample career guidance and job opportunities for local communities, including younger population groups.

The main target audience of career guidance events are children and young people under 35 years old.

The Company builds partnerships with educational organisations and engages young workers, while also providing robust support for engineering training and whipping up interest in engineering and blue-collar jobs.

To reduce unemployment, MMC Norilsk Nickel and Norilsk Employment Centre signed an agreement aimed at retraining those out of work for the most needed blue-collar jobs.

 

Tax and non-tax payments² to budgets of various levels, RUB bn

² Tax and non-tax payments include all taxes paid, net of VAT and dividend income tax, as well as insurance payments and customs duties.
³ Payments to the Trans-Baikal Territory budget have been shown separately since 2017.

 

 

 

Cooperation development

As part of its social and economic partnership agreements signed in 2009 and 2016, the Company has been cultivating cooperation with the companies of the Krasnoyarsk Territory and the Murmansk Region. Integration of local businesses into the Company’s production chain (mainly through long-term contracts) makes a sizeable contribution to the development of the regions of operation.

Special attention is given to the support of small and medium enterprises. In 2017, the Company developed an appropriate policy, which summarises best practices in the realm of SME relations.

 

Cooperation development in figures

 

Podsolnukh store chain
The Podsolnukh store chain, a part of the Norilsk Nickel Group, takes its fair share of the retail market in the Norilsk Industrial District with nine stores, including one hypermarket. The SKU range of the chain includes socially significant goods (vegetables, fruit, grains, dairy products, meat, canned foods, eggs, sugar, etc.) that are offered at substantially lower prices than in other regional stores.

The Podsolnukh store chain welcomes from 10,000 to 12,000 people on a daily basis, with the annual consumer traffic in 2017 exceeding 4 million people. The average retail prices in the Podsolnukh store chain rose by less than 1% in 2017, which is notably lower than the official inflation rate.

Developing infrastructure

The Company is actively involved in the development and renovation of social infrastructure, looking to create accessible and comfortable environments for working and living in the regions. Nornickel sponsors improvements of public areas, supports construction and renovation of sports facilities, transport infrastructure and housing, and promotes development of educational infrastructure. The Company’s expenses on key social infrastructure development projects in 2017 totalled some RUB 0.7 bn.

Second School Centre
In December 2017, Nickel saw the opening of the Second School Centre, a multifunctional space designed to encourage and support social and cultural projects developed by the residents of the Murmansk Region’s Pechengsky District. With a wide variety of creative, self-improvement and socialising opportunities on offer, the centre serves simultaneously as an artist lab, an exhibition space and a platform for creativity training workshops, lectures, master classes, leisure activities and networking of both residents and guests of the Pechengsky District.

Key social infrastructure development projects in 2017

Innovations
In autumn 2017, the Company staged Arctic Wave festivals of R&D discoveries in Norilsk and Monchegorsk to promote research and development among the youth, support creative engineering ideas and innovative thinking among schoolchildren, and demonstrate the latest scientific achievements. Interactive sessions, contests and scientific experiments of the largest R&D event in the Polar Region were held under the motto “Augment Reality”. The festivals were attended by 4,500 children and adults.

For the fourth year in a row, the Company organised the Arctic.PRO R&D marathon aiming to encourage R&D creativity, innovations in engineering and thirst for knowledge among children and young people. In 2017, some 1,300 students aged 12 to 15 took part in the marathon, while 20 children attended the Winter R&D School in Kazan.

For the third consecutive year, Nornickel became the general partner of the All-Russian Science Festival hosted by Krasnoyarsk. It was the first Russian science festival to feature the City of Discoveries. City of Professions programme giving Krasnoyarsk high school students an opportunity to take a career guidance test, have their interests and skills analysed and receive recommendations on professional development.

The career guidance programme was built around several areas of interest, including Biological Engineering, Medicine and Healthcare, Taiga, Digitalisation in Humanities, IT, Communications and Aerospace Engineering, and Energy, Engineering and Architecture, each featuring interactive presentations made by local universities and businesses, along with a series of dedicated lectures. Some 15,000 students attended the two-day festival.

School of Urban Competencies is a joint project of Nornickel and Alexei Kudrin’s Committee of Civil Initiatives aimed at the development of social competences among schoolchildren who represent the next generation of urban residents. In 2017, 60 school teams participated in public hearings presenting their urban environment improvement concepts and strategies. As part of the Socially Responsible Initiatives Competition, participants developed and submitted 13 social projects in the special New Pole nomination for schoolchildren, with ten of the said projects winning implementation grants of RUB 100,000 each.

Development
In spring, 12 social business projects were presented at the Investment Session, with five projects approved for funding in the form of interest-free loans worth USD 2.12 mln. Eight projects developed by the Social Entrepreneurship trainees were launched without the Company’s financial support. Also, two clubs for social entrepreneurs are up and running.

With the backing from Nornickel, Murmansk hosted the Franchising as a Tool to Boost Distribution and Service conference and a Franchise Fair. The participants discussed development potential of franchising and the commercial real estate market, use of global best practices in creating trading and hospitality infrastructure, and logistic solutions, while also attending a presentation of franchises used in trade, service, healthcare and other industries.

In 2017, Norilsk hosted the first Convention of Social Entrepreneurs from the North which provided a platform to discuss trends, prospects and measures to support social entrepreneurship in the Polar regions and analyse relevant national and international best practices. In the lead-up to the Convention, experts and participants from other regions had an opportunity to take part in the Entrepreneurial Norilsk quest to learn more about social entrepreneurship in Norilsk.

In 2017, an independent survey was commissioned to assess the Company’s charitable programme, with over one hundred participants of the Socially Responsible Initiatives Competition interviewed and polled. The assessment focused on the programme’s efficiency, its results, and also monitoring and evaluation of the financed projects.

Excerpts from an independent report assessing the World of New Opportunities charitable programme:

• “The World of New Opportunities programme made a significant contribution to the enhancement of the social commitment of the communities and organisations in the cities of the Company’s operations.”
• “Respondents noted a number of positive changes that were, partially or entirely, driven by the World of New Opportunities programme: (...) the number of people (young residents) engaged in the public life of the city has increased as compared to before 2013.”

Targeted charitable support
The Company continued providing targeted charitable donations in response to special requests from organisations. In 2014, Polar Division and Kola MMC set up dedicated charity committees to review such organisations’ applications. Certain donations also get approved by the Company’s management. The Company supports entities dealing with vulnerable groups of population (veterans of World War II, disabled people, multi-child families, children with special needs, financially disadvantaged citizens) and finances the participation of local non-profit organisations and institutions in various sports competitions, creativity contests, etc.

In 2017, Polar Division and Kola MMS donated a total of RUB 337.7 mln for the purposes of targeted charity support.

Vocational training sponsorship
Every year Polar Division provides financial support to Norilsk’s institutions of secondary and higher vocational education by buying books and specialised equipment for students, contributing to the maintenance works, and thus improving the quality of training. The Company primarily focuses on the training of specialists for the most in-demand jobs.

Cooperation with Nornickel helped the Polytechnic College of the Norilsk State Industrial Institute get high scores from the independent expert community and win a prize in the 100 Best Russian Vocational Training Schools competition. The competition brought together education institutions from 55 Russian regions to assess their procurement and training arrangements.

Corporate volunteer programme

Volunteering is a vital part of the Company’s corporate culture, as it helps to identify and develop employee competencies that are indispensable for the purposes of sustainable development – namely, mobility, responsibility and leadership. In two years since the launch of the Plant of Goodness corporate volunteer programme, over 100 charitable events were staged in Moscow, Norilsk and on the Kola Peninsula. In 2017, the programme expanded its coverage to include Chita.

Volunteers participate in environmental initiatives (for example, clean-up campaigns), master classes and other training events, hospital clowning, charity runs, performances and fairs. In addition, the Company put in place an Employees’ Personal Donation Programme.

In 2017, the Plant of Goodness won prizes in several prominent Russian and international competitions receiving acclaims from the expert community.

Norilsk Development Agency

Successes of the Company’s regional social policy led to the establishment of the Norilsk Development Agency in April 2017. The Agency’s mission is to lay the foundation for the accelerated development of the city’s service economy as a way to improve Norilsk’s living standards and promoting local products and services in external markets. This is a long-term partnership project of Nornickel, the Norilsk municipal authorities and Vladimir Potanin Foundation.

The Agency’s key focus areas are as follows:

• Business (Norilsk: the city of developed service economy);
• Development (Norilsk: the city of modern selling spaces);
• Tourism (Norilsk: the city of tourists);
• Social and Cultural Projects (Norilsk: the city of rich social and cultural life).

In August 2017, the Norilsk Development Agency hosted a foresight session where experts, authorities and non-profit organisations discussed the Agency’s priorities, with a roadmap developed based on the analysis.

The 2017 highlights include building partnerships with Russian and international development institutions and SME experts, embarking on the marketing research, kick-starting the City Creator project to discuss urban issues through lectures and workshops, and launching the https://www.arnorilsk.ru website.

Russian Municipal Map: Points of Growth

This is a joint project of Nornickel and the Kudrin Fund for Supporting Civil Initiatives (Committee of Civil Initiatives).

The project aims to improve local self-government in Russia, enhance municipal commitments and foster points of growth across the nation's municipalities.

Key objectives:

• complete a baseline survey of local self-government;
• identify blockers and enablers for municipal commitment and the points of growth;
• design regulatory models for local self-government;
• identify points of growth in Russian municipalities (places that concentrate best practices in municipal management and implement innovative concepts of local development);
• introduce, promote and provide expert support to best municipal practices;
• set up municipal experimental platforms for piloting innovative management technologies offered by experts or adopted from the Russian or international best practices.

In 2017, The City for People. Making Urban Spaces Comfortable, an interactive session staged as part of the project, brought together representatives of Norilsk, Taimyrsky Dolgano-Nenetsky Municipal District and Dudinka authorities to come up with ideas on urban environment development and turn them into real-life projects, including landscaping initiatives, establishment of an art centre and restoration of mosaic panels to preserve the unique historic look of Norilsk. The Company also arranged a working visit to Satka for representatives of the local authorities to exchange best practices and learn more about effective methods to create a comfortable urban environment and public spaces with input from the local communities.

Support for sports projects

In addition to running sports programmes for the employees, Nornickel sponsors major Russian and international sports organisations and provides financing for upgrades of sports facilities, construction of sports schools and playgrounds, and promotion of physical education and mass sports.

As a Partner of the Russian Olympic Committee and the Russian Olympic team (team of Olympic Athletes from Russia), Nornickel supports youth and high performance sports, including by encouraging the implementation of Olympic educational programmes developed by the Russian International Olympic University.

Nornickel is an official partner of the Russian Football Union and Russia’s national football team, a general sponsor of the CSKA professional basketball club and the Norilsk Nickel futsal club, and a general partner of the Russian Futsal Association. The Company also supports the Russian Curling Federation and the Night Hockey League, Russia’s leading amateur sports organisation in charge of the Russian National Ice Hockey Festival for amateur teams.

In 2017, Nornickel and the All-Russian Federation of DanceSport and Acrobatic Rock’n’Roll started cooperation to support and promote these two sports. One of the partnership’s objectives is to establish an acrobatic rock’n’roll club in Norilsk.

XXIX International Winter Universiade in Krasnoyarsk

As a General Partner of the 2019 International Winter Universiade in Krasnoyarsk, the Company keeps on track with preparations for this upcoming international sports event in accordance with the agreement signed in 2015. The projects under implementation include:

• large-scale upgrade of the Bobrovy Log Fun Park;
• creation of a landscaped park area along the Bazaikha River in Krasnoyarsk;
• sponsorship of trainings for mid- and top-level managers and volunteers involved in the preparation for the Winter Universiade;
• promotion of the 2019 Winter Universiade in the media.

Support for the 2019 Winter Universiade will contribute to the upgrade of sports facilities, enhancement of the international profile of Krasnoyarsk and the Krasnoyarsk Territory, promotion of healthy lifestyles, increase in the popularity of mass sports and improvement of living standards in the Krasnoyarsk Territory.

According to the current estimates, the Company will spend nearly RUB 2 bn on the preparation and holding of the 2019 Winter Universiade.

One of the major commitments made by the Company for the Universiade was to prepare the Bobrovy Log Fun Park for alpine competitions to be held as part of the upcoming event. In 2017, Nornickel proceeded with the construction of a new athletic training facility equipped with a broadcasting system, expansion of the ski pistes, development of an integrated security system, upgrade of the artificial snow machinery, and preparation of an ambulance helicopter pad at the Bobrovy Log Fun Park.

In addition to the Bobrovy Log Fun Park, the Company plans to establish a landscaped park along the Bazaikha River with sports and playgrounds, walkways, bike lanes, recreation areas, and a foot and bike bridge across the Bazaikha to make the park accessible for people with limited mobility. An agreement to this effect was signed between the Company and Krasnoyarsk municipal authorities.

With the backing from Nornickel, the Russian International Olympic University and the Siberian Federal University organised training for mid-level and top-level managers and leaders of volunteer teams involved in the Winter Universiade.

A corporate volunteer team was formed by employees of the Company and members of their families hailing from across the Group's footprint. A dedicated training programme developed by the Siberian Federal University was completed by 95 volunteers who will seek to maximise popular engagement in the run-up to the event.

As a General Partner of the 2019 Winter Universiade, Nornickel strives to ensure extensive promotion to inform the public about the event.

In 2017, three NordStar aircraft were redesigned to feature the symbols of the Universiade. They made nearly 2,000 flights during the year and carried over 265,000 passengers who learnt about the upcoming event while on board from voice announcements and inflight magazines.

A branded NordStar aircraft also made a flight from Krasnoyarsk to Almaty, the host city of the XXVIII International Winter Universiade in 2017, with Krasnoyarsk, the host city of the next year's Universiade, holding an official ceremony there with direct backing from Nornickel.

The Company's branded pavilions with specialised equipment and information materials were erected in Moscow parks, with over 15,000 visitors receiving information about the Universiade, Bobrovy Log Fun Park and other sports-related projects of Nornickel through games and interactive presentations. The pavilions also became a platform for cultural, educational and sports events involving famous athletes, sports workshops, flash mobs, and prize-winning competitions.

The Company also provided support to Russia’s young architects. Jointly with Directorate Krasnoyarsk 2019, Nornickel staged a competition for the best design of the 2019 Universiade cauldron, the key element of the Universiade's torch relay. The commission reviewed the projects of participants from different regions of Russia and selected the winner who received a special award from Nornickel.

The Company also sponsored the 500 Days until Universiade event that linked two cities – Krasnoyarsk (Bobrovy Log Fun Park) and Moscow (Lomonosov Moscow State University) – via a teleconference.

U-Laika, the mascot of the upcoming university games, travelled to the international space station.

International University Sports Federation

Nornickel is a partner of the International University Sports Federation (FISU) supporting the development of the international university sports movement. The first-ever international forum of the Federation – FISU Volunteer Leaders Academy – was organised in July 2017 with the backing from Nornickel and was attended by leaders of volunteering associations from over 90 FISU member states, as well as university sports delegations and officials.

The forum was held in the run-up to the XXIX International Winter Universiade in Krasnoyarsk to facilitate communication between volunteers and national university sports federations, and share knowledge and experience in staging large international sports events. The experience and knowledge obtained by the volunteers will be successfully put to use during the 2019 Winter Universiade in Krasnoyarsk and make a significant contribution to the development of Krasnoyarsk and the Krasnoyarsk Territory.

XIX World Festival of Youth and Students

Large international events should be viewed as important milestones in the Russian tradition of sponsorship and public-private partnerships. As part of the 2017 World Festival of Youth and Students (attended by nearly 25,000 people from 188 countries), the Company set up an Athletic Nornickel venue, which accommodated both the 2019 Winter Universiade General Partner Pavilion promoting the upcoming event and the CSKA streetball ground. The Company's contribution to the Festival organisation was highly appreciated by Russian President Vladimir Putin.

Support for cultural projects

Cultural projects are an integral part of the Company’s general strategy to improve the quality of life across the regions of operation. Not only does the Company hold corporate events and competitions attracting tens of thousands of employees and their families each year, but also supports prominent all-Russian cultural projects. In 2017, the Company supported the following projects:

• Attraction of Taimyr Arctic festival seeking to protect the cultural heritage of indigenous northern minorities (Dudinka);
• Russian Feast exhibition to celebrate the 350th anniversary of Dudinka and the 80th anniversary of the Dudinka port. This exhibition marked the beginning of a three-year project of the Company dedicated to the Russian North and designed to celebrate the 100th anniversary of the Norilsk deposit discovery;
• Exhibition of Modern Art – Sputnik over Monchegorsk. Space in the Works by Artists of the 20th Century;
• Summer on the Putorana Plateau photo exhibition held across Polar Division;
• OBJECTIVE Charity photo exhibition run by the Donors Forum (the Association of Sponsoring Organisations);
• Trans-Baikal International Film Festival (Chita);
• International Documentary Cinema Festival and Marathon Nordic Character (Norilsk, Monchegorsk);
• International Poetry Festival Taburetka (Monchegorsk);
• Golden Mask Festival (Norilsk, Dudinka);
• Festival of Northern Berries (Norilsk);
• Siberian Primrose Flower Festival (Krasnoyarsk) and other cultural events.

Since 2013, MMC Norilsk Nickel and the Severny Gorod Media Company have been promoting the Concentrator lecture club. Russian and international experts, world-renowned scientists, sociologists, politicians, businessmen and journalists deliver public lectures for the Norilsk residents.

In 2017, Media School of Igor Popov established with support from Nornickel and the Severny Gorod Media Company became the winner of the Champions of Goodness contest run by the Russian Managers Association. The organisers praised the School’s valuable contribution to career guidance as it helps secondary school graduates make an informed decision to study journalism, PR, or advertising at university.

Assessment of social programmes

Nornickel’s strong social and environmental commitment involves a framework of social programmes and benefits that goes far beyond the minimal statutory programmes required by law. Nornickel designs and delivers social programmes and benefits with due account of stakeholder opinions and the results of the comprehensive analysis of the current situation and potential impact. 103-2 103-3

Study of the satisfaction level with respect to My Home and Our Home social programmes at Polar Division

The results of the 2017 survey were reviewed by the Company’s dedicated units and the Senior Vice President for HR, Social Policy and Public Relations. These served as the basis for introducing amendments to the current by-laws, including other enterprises in the housing programmes, and improving the programmes’ flexibility with subsidised mortgage loans.

Transport accessibility

Nornickel’s reliable state-of-the-art transport infrastructure successfully responds to freight logistics challenges, ensures continuity and sustainability of operations, and well-being of local communities.

Yenisey River Shipping Company transports socially important cargoes to various destinations across the Krasnoyarsk Territory. During the short period of spring floods, it delivers fuels and lubricants, food and other goods to locations with limited transport accessibility on the Podkamennaya and Nizhnyaya Tunguska rivers and in other areas, including Dikson, Russia’s northernmost settlement. YRSC accounts for over 90% of the Northern Supply Haul programme running in the Krasnoyarsk Territory. The shipping company operates its own search and rescue fleet and takes part in emergency response missions on internal water routes of the Yenisey Basin.

Local shipping between different locations along the Yenisey river is carried out by dry cargo vessels of MMC Norilsk Nickel’s Krasnoyarsk Transportation Branch. They deliver socially important goods from Dudinka shipping agricultural products as their return cargo and carry cargoes for the Russian Emergency Situations Ministry to deal with emergencies.

In 2017, Nornickel completed one of the largest investment projects to develop the Arctic’s transport infrastructure. Murmansk Transport Division saw the new transfer terminal doubling the throughput of Murmansk Sea Port. Bystrinsky Transport Division is responsible for the operation and maintenance of the 227 km Naryn (Borzya) — Gazimursky Zavod railway line (Trans-Baikal Territory).

The destinations covered by the NordStar air carrier include more than 30 Russian and CIS cities. The airline offers regular and charter flights and transports passengers to interregional budget subsidised destinations selling tickets at reduced tariffs.

Norilsk Avia is the only air operator that is capable of responding to both industrial and social emergencies in the region (the Norilsk Industrial District and Taimyrsky Dolgano-Nenetsky Municipal District). The Company satisfies the demand for regional traffic, including emergency ambulance flights as part of search and rescue operations spanning up to 280 km from the Norilsk Airport. Relevant regulations require this as a condition for all air transportation in the region, including long-haul flights.

As part of the 2010–2020 Federal Russian Transport Development Programme and the Memorandum of Intent signed between the Federal Air Transport Agency and MMC Norilsk Nickel, the Company continued the project to reconstruct the Norilsk Airport (“Alykel”). In 2017, the Company’s contribution to the project exceeded RUB 900 mln. In 2018–2019, another RUB 1.4 bn will be allocated. With a total programme budget of RUB 3.3 bn since 2014, it is viewed as a centrepiece of Russia’s Arctic Zone development project and is vital for seamless air service for passengers in the Norilsk Industrial District. A distinctive feature of this project is the reconstruction is ongoing without closing the airport, or interrupting flights.