EU-funded Project: Coal Sector Policy Support Program EC-Contract – 2008/141-542 MASTER PLAN

“Coal Sector Policy Support Programme”

This project isfunded by theEuropean Union

Implemented byHuman Dynamics

Consortium

EU-funded Project: Coal Sector Policy Support ProgramEC-Contract – 2008/141-542

MASTER PLAN

September 2008 – June 2011Beneficiary: Ministry of Energy and Coal Industry of Ukraine

“Coal Sector Policy Support Program”



Consortium

Assist the Ukrainian government in developing and

implementing its coal sector reform policy.

Advance the development and restructuring of the coal-

mining industry in a socially-responsible and cost-

effective manner,

Improve mine safety standards

Help to eliminate ecological damage.

Project’s objectives




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Coal consumption projections




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Analysis of the Ukrainian coal sector

Strong points:

•big deposits of all types of coal

•big deposits of anthracite

•long tradition and experience in coal mining

•well qualified workers

•well qualified technical managers

•network of coal industry research institutions

•large number of coal mining equipment producers

•well spread transport infrastructure




Consortium

Analysis of the Ukrainian coal sector (cont.)

Weak points:•low productivity of State mines•often high sulfur and ash content in coal

•high gas concentration in mines

•difficult geology

•weak business management in mines

•worn out and outdated equipment

•poor safety records of State mines

•poor quality of coal processing




Consortium


Opportunities:

•expansion of exports to China, Turkey, India and EU (low S coal)•potential for the development of the new mines•underground gasification•utilization of methane•potential for development of power stations based on lignite•possible export of coal-based energy to SE and Central Europe•recycling of waste (reprocessing of tailings)•utilization of underground water•production and sale of briquettes made of coal and biomass




Consortium


Threats:•corruption and weak business management in the coal sector

•new anti CO2 regulations could threat export and domestic use

•import of coal from countries like Russia, Kazakhstan, South Africa,

Indonesia, Brazil or Australia

•possible shortage of suitable equipment for refurbishment of mines

•possible collapse of elements of infrastructure (mainly railways)

•possible shortage of qualified miners in very near future

•outdated research in mining and geology

•low capacity in ports constrain development of export

•lack of stability in business regulations




Consortium

Five core elements of the Ukrainian coal sector reform program

1. Privatisation program

2. Mine closure program

3. Occupational Health and Safety program

4. Environmental mitigation program

5. Social mitigation program




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Outline of Coal Sector Reform




Consortium

Key elements of Presidential reform

Liberalise the coal market, sale and pricing mechanismsRemove restrictions on import of mining

equipmentPrivatise all viable enterprises of the sector and

close the non-profitable coal minesRe-channel subsidies from subsidizing the

production cost into investment in work safety




Consortium

Preconditions for successful reform

1. Improved legal and regulatory framework

- review of the existing laws and regulations, esp. related to privatisation, mining concessions, investments protection, bankruptcy procedures, social mitigation issues, pensions, public utilities, health system, local governance

2. Institutional strengthening and changes

- establish an inter-institutional governing body coordinating actions of all affected by the coal reforms

- establish an institution for the liquidation of non-profitable mines

- establish an institution for coordination of measures for protection of redundant and retired miners

- reduce number of institutions who have right to inspect mines




Consortium

Preconditions for successful reform (cont.)

- change the functions of the Ministry of Energy and Coal Industry to reflect the free market conditions in the coal sector, perhaps consider establishment of the “coal authority” of Ukraine

- the newly created institutions should report directly to the Council of Ministers and operate as small, efficient and transparent agencies

- upgrade the existing mining trade schools system

3. Preparation and introduction of Free Market conditions

- close down “Coal Ukraina” alternatively privatise it under the very strict supervision of the Antimonopoly Office

- reforms in the coal and energy sectors should be closely coordinated in view of opportunities for vertical integration




Consortium


- selected illegal mines should be legalised, the rest must be closed

- coal mining companies to be transformed into legal entities

- import and export of coal should be liberalised

- coal prices should be based on the free market principle

- consider privatisation of the institutes related to the coal industry

- remove restrictions on import of the mining equipment

- stop subsidies to non-profitable mines and direct resources to improvement of mine safety, mitigation of social effects of reforms, speedy closure of mines, assistance to former parts of mines like local infrastructure, transport

- introduce a royalty system (2-7% of the selling price of coal at the mine)




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- increase the geological search for the new deposits of coal

- provide free access to information about the new coal deposits to attract investment in new mines

- make sure that the mining licence and conditions for it’s obtaining are very clearly defined from the outset

- conditions should include the applicant’s expert mining knowledge, existence of the mining plan, existence of the development concept (scope, timetable, costs)

- Involve all key stake holders (unions, local community, local and regional authorities etc.) at the beginning of the process of change




Consortium

Conditions for successful privatisation

1. Successful privatisation has to be open, transparent and non-discriminatory2. Ukraine has to be made more attractive as a place for doing business by serious

improvement in the following areas:- starting a business- obtaining construction permits- registering property- paying taxes- trading across borders- closing a business3. Improvement of the legal and institutional framework for- land purchases and property rights- required licences and approvals for them- further simplification of the tax system with less red tape and better transparency




Consortium

Conditions for successful privatisation (cont.)

- reform of the commercial courts system

- creation of efficient insolvency/bankruptcy laws

- removal of international trade barriers in the sector

- Coordination of privatisation efforts in coal energy and transport

- gradual reduction of subsidies in all sectors

- breaking up of state monopolies where possible and market liberalisation

- enforcement of anti-monopoly laws

4. Develop an extensive investment promotion program for Ukraine

5. Establish Strategic Assets Privatisation Agency, alternatively set up a new division at the State Property Fund to increase efficiency of the process




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Privatisation process

1. Appoint experienced foreign investment banks and large consulting companies to execute privatisation and approach donors for funding (EU, World Bank, USAID, EBRD)

2. Each “privatiser” should be responsible for privatisation of one pool of about 10 mines

3. Inform and prepare all stakeholders well in advance of privatisation4. Incorporate the mining companies5. Privatise mines debts free. All state and para-statal debts should be

written off at the moment of privatisation6. Separate non-core business from the mines (local water supply, district

heating, cultural facilities etc)7. Prepare a short brochure (teaser) for each mine to be privatised




Consortium

Privatisation process (cont)

8.Provide absolutely free access to ALL information about the mine to ALL potential buyers participating in privatisation9.Consider privatisation through liquidation10.Do not allow for private investment in state mines prior to privatisation11.Use money from privatisation to solve social and ecological issues in the mining areas12.As soon as possible start the pilot privatisation program of 7 to 10 mines in order to flush out some unexpected constrains (esp. legal issues)13.Expected cost of privatisation of one mine should be about UAH 3,5 mln (about UAH 280 mln for all mines recommended for privatisation)




Consortium

Privatisation ProgrammePurpose The purpose of the Mine Privatisation Programme is to support the Ukrainian Government to prepare (and accompany, if feasible) the privatization of State Coal Mines and State Coal Mine assets using best international practices. Responsible

Institution 2011 2012 2013 2014 2015 2016 2017 1 2 3 4 1 2 3 4 1 2 1 2 1 2 1 2 1 2

A. Legal Framework Result 1: The legal framework for privatization of coal mines is assessed and amended; the related institutions on national level are able to introduce changes on political level.

1 Assess the legal framework and identify gaps (Regulatory Impact Assessment) MoECI 2 Identify areas to draft policy papers, legal regulations and amendments to legal documents MoEC 3 Provide policy advice and support to institutions to initiate regulatory changes External Assistance 4 Network to lobby legal changes MoECI

B. Institutional Framework Result 2: The institutional framework for privatization of coal mines is set-up and functional

1 Assess the legal framework related to privatization, including business environment and investment promotion, and identify gaps (Regulatory Impact Assessment) CoM

2 Prepare the most appropriate institutional structure to allow for a timely and efficient mine privatisation process CoM

3 Identify stakeholders of institutional framework MoECI/CoM

4 Identify functions and task of each of the institutions of the institutional framework MoECI/CoM

5 Train identified stakeholders on institutional development MoECI

6 Support the elaboration of respective institutional documentations (Statutes, Operation Manual, etc.)

MoECI/CoM

7 Establish appropriate coordination mechanisms between different institutions (including the streamlining of communication and reporting)

MoECI/CoM




Consortium

Privatisation Programme (cont) Responsible

Institution 2011 2012 2013 2014 2015 2016 2017 1 2 3 4 1 2 3 4 1 2 1 2 1 2 1 2 1 2

C. Operational Results Result 3: The State Mines for privatization are identified and tender documents have been prepared

1 Develop a list of mines for pilot privatization, pool privatization and further privatization MoECI 2 Prepare transfer of mines to State Property Fund – or other relevant institution MoECI 3 Identify external support needs for the preparation of privatization (privatization team) CoM, MoECI; SPF 4 Develop and document tendering procedure SPF, MoECI 5 Prepare general tender documentation for mines to be privatized SPF, MoECI

6 Define evaluation methodology for bidders and tenders / tender documents, etc. SPF, MoECI Result 4: The first 10 State Mines for privatization are identified (pilot privatization), tender documents have been prepared and the privatization process has been initiated

1 Select mines for pilot privatization MoECI, SPF 2 Identify support for the preparation of the pilot privatization (privatization team) SPF, MoECI 3 Prepare tender documentation for each mine / pool of mines to be privatized SPF, MoECI

4 Prepare data room and documentation for due diligence of mine / mine pool (including information for market assessment)

SPF, MoECI

5 Prepare sales / transaction documentation SPF, MoECI 6 Prepare promotion / advertisement for the privatization of the selected mines SPF, MoECI 7 Prepare and implement tendering process SPF 8 Evaluate bidders and tenders SPF 9 Support the transaction of mine to new owner SPF

Result 5: Further at least 50 State Mines for privatization are identified (pilot privatization), tender documents have been prepared and the privatization process has been initiated

1 Select mines for individual or pool privatization MoECI 2 Identify support for the preparation of the privatization (privatization team) SPF, MoECI 3 Prepare tender documentation for each mine / pool of mines to be privatized SPF, MoECI

4 Prepare data room and documentation for due diligence of mine / mine pool (including information for market assessment) SPF, MoECI

5 Prepare sales / transaction documentation SPF, MoECI 6 Prepare promotion / advertisement for the privatization of the selected mines SPF, MoECI 7 Prepare and implement tendering process SPF 8 Evaluate bidders and tenders SPF 9 Support the transaction of mines to new owner SPF

CoM: Cabinet of Ministers; MoECI: Ministry of Energy and Coal Industry; Min of Economy: Ministry of Economy; MoJ: Ministry of Justice; SPF: State Property Fund




Consortium

Nr Mine Coal company Closure Cost Coal grade Closure process

Million UAH from to

1 Nr.5 Novovolynska Volynugol 148 S 2011 2013

2 XVII part syezda Shakhterskantrazit 119 S 2011 2013

3 Gorkogo Independent 119 C 2011 2013

4 Severnaya Dzershinskugol 144 C 2011 2013

5 Fascheevska Luganskugol 119 S 2011 2013

6 Poltavska Ordshinikidseugol 119 S 2011 2013

7 13 bis Independent 119 S 2011 2013

8 Lutuginska Luganskugol 119 S 2011 2013

9 Zarechna Lvovugol 150 S 2011 2013



12 Mospinska DUEK 150 S,C 2012 2014

13 Lidievka DUEK 268 S,C 2012 2015

14 Cherkasska Luganskugol 119 S 2012 2014

15 Toretska Dzershinskugol 119 C 2012 2014

16 Olhovatska Ordshinikidseugol 119 S 2012 2014

17 Rodinska Krasnoarmeysugol 122 S 2012 2014

18 Veliikomostovska Lvovugol 150 S 2012 2014

19 Vozrodzhenie Lvovugol 150 S 2012 2014

20 Lomovatska Pervomayskugol 144 S,C 2013 2015

21 Mezhrichenska Lvovugol 150 S 2013 2015

22 Gagarina Independent 119 C 2013 2015

23 Harkovska Sverdovantratsit 144 A 2013 2015

24 Chelyuskintsev Independent 144 S 2013 2015

25 Krepenska Antratsit 119 A 2013 2015

26 Udarnik Snegnoeantrasit 119 A 2013 2015

27 Donbassantrasit Knyaginska 119 A 2013 2015

28 Sverdlovantratsit Sverdlova 186 A 2013 2016

29 Konstantinovskiy Alexandriaugol 124 L 2013 2016

TOTAL 4.009

Remark: Coal grades – A. Anthracite; S – Steam coal; C- Coking coal; L – Lignite




Consortium

Closure of mines

• possible in 15-24 months, not like currently in 15-24 years

• possible sale of all sellable assets of the closed mines in the privatisation process

• possible international technical assistance (esp. from Germany and Poland)

• possible donors financial assistance




Consortium

Closure of mines process

1. Review and update the existing legal framework

2. Assess and analyse the institutional framework currently responsible for the mines closure. Introduce proposed changes

3. Decide about the list of priority of mines for closure

4. Decide on appropriate methodology for each mine closure

5. Prepare detailed technical project for each closure

6. Prepare and implement the physical liquidation of underground infrastructure and then surface infrastructure

7. It is proposed that the Regional Coal Restructuring Agencies should manage and overview the closure process




Consortium

Mine closure programPurpose The purpose of the mine closure programme is to complete the closure process of those mines presently under liquidation and to initiate the closure process of those mines not anymore viable / profitable or not any further needed to satisfy the Ukrainian coal demand in a coordinated, timely manner with the ultimate goal of transferring clan and dismantled areas. Responsible

Institution 2011 2012 2013 2014 2015 2016 2017 1 2 3 4 1 2 3 4 1 2 1 2 1 2 1 2 1 2

A. Legal Framework Result 1: The legal framework for the liquidation of coal mines is assessed and amended; the related institutions on national level are able to introduce changes on politic al level.

1 Assess the legal framework and identify gaps (Regulatory Impact Assessment) MoEC

2 Identify areas to draft policy papers, legal regulations and amendments to legal documents MoEC

3 Provide policy advice and support to institutions to initiate regulatory changes Consultants 4 Network to lobby legal changes MoEC B. Institutional Framework Result 2: The institutional framework for mine closure is assessed for goal-oriented and efficient functioning; changes are implemented so that the institutional framework is set-up and functional

1 Assess and analyse the functions and operations of the institutional framework presently implementing mine liquidations and identify gaps

CoM, MoECI, External Assistance

2 Prepare the most appropriate institutional structure to allow for a timely and efficient mine liquidation process


3 Identify stakeholders of the institutional framework CoM, MoECI, External Assistance

4 Identify functions and task of each of the institutions of the institutional framework CoM, MoECI, External Assistance

5 Train identified stakeholders based on the identified training needs CoM, MoECI, External Assistance








Consortium

Responsible Institution 2011 2012 2013 2014 2015 2016 2017

1 2 3 4 1 2 3 4 1 2 1 2 1 2 1 2 1 2 C. Operational Results Result 3: The technical process for mine closure is defined and developed 1 Develop clear set of assessment rules for evaluating and ranking coal mines MoECI

2 Prepare a list of national and international institutions involved in physical mine closure MoECI

3 Identify an appropriate methodology for mine closure in Ukraine based on international best practice and prepare relevant documentation on it MoECI

4 Identify a procedure for the general mine closure process MoECI

5 Prepare a monitoring system to overview the progress and potential delays in the mine closure program

MoECI

Result 4: The State Mines for closure are identified and communicated to the affected communities

1 Develop a list of mines designated for closure MoECI 2 Develop a timetable for mine closure MoECI 3 Prepare all necessary documentation to inform all stakeholder MoECI 4 Identify mines for immediate closure (first wave) MoECI 5 Inform Mine Management, Trade Union and employees about planned mine closure MoECI 6 Prepare community awareness and information program on mine closure MoECI 7 Inform local authorities as well as other stakeholders in communities affected by mine closure MoECI Result 5: The first mines designed for closure have prepared their liquidation process in compliance with the respective regulations (first wave)

1 Prepare detailed planning for first wave of liquidation of mines MoECI

2 Prepare studies on dewatering, residual degasification and necessary liquidation of dumps Mine Management

3 Prepare specific technical projects for each mine Mine Management 4 Prepare environmental impact assessment documentations Mine Management 5 Identify financial and technical support necessary Mine Management

Mine closure program (cont)




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1 2 3 4 1 2 3 4 1 2 1 2 1 2 1 2 1 2 C. Operational Results Result 6: The mines of the first closure wave have implemented their physical liquidation process

1 Prepare physical liquidation of mine Mine Management 2 Prepare and implement the physical liquidation of the underground infrastructure Mine Management 3 Prepare and implement the physical liquidation of the surface infrastructure Mine Management Result 7: Those mines designated for the second wave of restructuring have prepared and implemented their physical liquidation process in compliance with the respective regulations

1 Prepare detailed planning for second wave of liquidation of mines MoECI 2 Prepare physical liquidation of mine Mine Management 3 Prepare and implement the physical liquidation of the underground infrastructure Mine Management 4 Prepare and implement the physical liquidation of the surface infrastructure Mine Management Result 8: Those mines designated for the third wave of restructuring have prepared and implemented their physical liquidation process in compliance with the respective regulations

1 Prepare detailed planning for third wave of liquidation of mines MoECI 2 Prepare physical liquidation of mine Mine Management 3 Prepare and implement the physical liquidation of the underground infrastructure Mine Management 4 Prepare and implement the physical liquidation of the surface infrastructure Mine Management

Mine closure program (cont)




Consortium

Key elements of the social program

- Social Mitigation Measures (SMM) is a multi-disciplinary task; it requires systematic reforming in several policy areas

- SMM should be coordinated at the highest possible level as it touches upon a wide range of policy areas, including Social Policy, Labour Market, Education, Economy, Industry Development, Trade, Regional Development, Health, Finance, Justice, etc.

- SMM should be implemented firstly on community level;

- Appropriate communication and coordination mechanisms should be in place to ensure that social mitigation measures reach the targeted beneficiaries

- For SMM to be successful with tangible effects on local level, money must be allocated for affected communities to allow for the implementation of SMM, e.g. in form of grant schemes.




Consortium

Purpose The institutional and legal framework for coal-mining social mitigation measures is set up; this institutional framework is able to effectively and efficiently plan and implement coal-mining social mitigation measures Responsible

Institution 2011 2012 2013 2014 2015 2016 2017 1 2 3 4 1 2 3 4 1 2 1 2 1 2 1 2 1 2

A. Legal Framework

Result 1: The legal framework for social mitigation measures in the coal mining industry is assessed and amended; the related institutions on national level are able to introduce changes on political level

1 Assess the legal framework and identify gaps (Regulatory Impact Assessment) MoECI

MoECI

3 Provide policy advice and support to institutions to initiate regulatory changes External Assistance 4 Network to lobby legal changes MoECI B. Institutional Framework Result 2: The institutional framework for social mitigation in the coal sector is assessed for goal-oriented and efficient functioning; changes are implemented so that the institutional framework is set-up and functional

1 Assess and analyse the functions and operations of the institutional framework presently responsible for social mitigtation and identify gaps

CoM

2 Identify and prepare the most appropriate institutional structure to allow for a timely and efficient social mitigation

CoM

3 Identify stakeholders of the institutional framework CoM

4 Identify functions and task of each of the institutions of the institutional framework Relevant Institutions

5 Train identified stakeholders based on the identified training needs Relevant Institutions


Relevant Institutions






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1 2 3 4 1 2 3 4 1 20 1 2 1 2 1 2 1 2 C. Operational Results Result 3: The operational body is able to efficiently and effectively plan, coordinate, implement and monitor social mitigation measures on national level

1 Enable the Coordinative Committee to prepare policy and technical documents as well as legal acts or respective amendments

CoM

2 Develop of at least 10 Social Mitigation Measures CC 3 Identify at least 3 donors for providing Funds CC

4 Design, prepare and implement at least one grant scheme (depending on the availability of funds!) CC

5 Develop communication procedures and coordination mechanism CC 6 Develop and Implement a monitoring and evaluation scheme CC 7 Develop database and Information management system CC Result 4: The local social partnerships are able to efficiently and effectively plan, implement and monitor social mitigation measures on local level

1 Prepare at least 5 Local Social Mitigation Plans LSP

2 Develop guidelines for the preparation and implementation of grant schemes on local level LSP

3 Prepare and implement an awareness creation / promotion concept for Grant Schemes LSP

4 Develop and implement local monitoring and evaluation concept for social mitigation measures LSP

5 Develop and implement local database and information management system LSP

CoM: Cabinet of Ministers; CC: Coordinative Committee for Social Mitigation; LSP: Local Social Partnerships, MoECI: Ministry of Energy and Coal; MoJ: Ministry of Justice; MoLSP: Ministry of Labour and Social Policy; SF: Social Funds




Consortium

Key elements of the environmental program

- continue with assessment and maping of pollution of mining sites

- develop risk assessment-based environmental management of closed mines

- improve training of the environmental staff of mines

- strenghten the environmental staff

- improved environmental management of mines will increase overall mines performance




Consortium

Purpose The purpose of the Environmental Mitigation Program is to support the Government of Ukraine to establish the appropriate legal and institutional conditions for effective environmental mitigation measures in the coal mining sector. This institutional framework is supported to effectively and efficiently plan and implement coal-mining environmental mitigation measures for already polluted mine sites and active mines. Responsible

Institution 2011 2012 2013 2014 2015 2016 2017 1 2 3 4 1 2 3 4 1 2 1 2 1 2 1 2 1 2

A. Legal Framework Result 1: The legal framework for environmental mitigation measures in the coal mining industry is assessed and amended; the related institutions on national level are able to introduce changes on political level

1 Assess the legal framework and identify gaps (Regulatory Impact Assessment) CoM

2 Identify areas to draft policy papers, legal regulations and amendments to legal documents CoM

3 Provide policy advice and support to institutions to initiate regulatory changes External Assistance 4 Network to lobby legal changes CoM B. Institutional Framework Result 2: The institutional framework for environmental mitigation in the coal sector is assessed for goal-oriented and efficient functioning; changes are implemented so that the institutional framework is set-up and functional

1 Assess and analyse the functions and operations of the institutional framework presently responsible for environmental mitigtation and identify gaps

CoM

2 Prepare the most appropriate institutional structure to allow for a timely and efficient environmental mitigation

CoM











Consortium


1 2 3 4 1 2 3 4 1 2 1 2 1 2 1 2 1 2 C. Operational Results Result 3: Environmental mitigation is based on a more risk based approach, by the introduction of environmental risk reduction as a strategy for “greening” the coal mining industry

1 Introduce “Risk Based Management of Contaminated Land” principles as a basis for selecting environmental mitigation measures

DDES

2 Introduce “Cost Benefit Analysis” techniques for comparison of mitigation measures and projects DDES

3 Rank and select sites for remediation based on environmental risk analysis (i.e. source-pathway-receptor approach)

DDES

4 Apply more efficient remediation technologies (incl. natural attenuation) where appropriate DDES

Result 4: A more open and transparent overview on the real environmental issues in the Coal Sector is introduced through the application of EMS and HSE management systems

1 Abolish the declaration of information on environmental hazard of mines as a State Secret MoECI

2 Facilitate the introduction of environmental or integrated HSE management systems such as ISO14001 and EMAS the Coal Sector

DDES

3 Identify at least 5 mine associations for the training and introduction of an Environmental Management System (EMS according ISO14001)

DDES

Result 5: By-products of coal mining are reduced due to improved mine operations leading to lower environmental costs and making the Coal Sector more competitive

1 Internalise environmental costs within the coal mine’s business strategy (“win-win”, “greening of the economy” or “eco-efficiency” strategies)

MM

2 Pilote the internalization of environmental costs in at least 3 mines or mine associations MM

3 Apply an integrated approach to find win-win solutions in view of environmental issues (i.e. decrease costs of mines dewatering and water supply for industry or residents)

MM

CoM: Cabinet of Ministers; MoECI: Ministry of Energy and Coal; MoJ: Ministry of Justice; MoH: Ministry of Health; MoEm: Ministry of Emergy Situations; DDES: Department for Degasification and Environmental Safety; MM: Mine Management




Consortium

Key elements of the OHS program

- change of work culture

- introduce OHSAS-based work safety management system

- introduce of OHS standards complying with EU directives and ILO norms

- improve standards of preventive medicine in the mines

- improve degasification and utilisation of methane




Consortium

Purpose The purpose of the OHS Program is to improve the OHS level with the aim to decrease the number of occupational accidents and diseases to liquidate and to limit the most widespread occupational hazards and related risks and to reduce the number of employees working in hazardous area as well as under harsh and harmful conditions. Responsible

Institution 2011 2012 2013 2014 2015 2016 2017 1 2 3 4 1 2 3 4 1 2 1 2 1 2 1 2 1 2

A. Legal Framework Result 1: The legal framework for the implementation of an exhaustive and internationally compatible occupational health and safety system is assessed and amended; the related institutions on national level are supported to introduce changes on political level

1 Assess the legal framework and identify gaps (Regulatory Impact Assessment) MoECI

2 Identify areas to draft policy papers, legal regulations and amendments to legal documents MoECI 3 Provide policy advice and support to institutions to initiate regulatory changes Consultants 4 Network to lobby legal changes MoECI Result 2: The OHS legislation is improved allowing for the national occupational safety standards to meet the requirements set by the ILO Conventions and the European Union Directives and to motivate for the implementation of international management standards (e.g. ISO, OHSAS, EFQM, TQM) 1 Develop economic incentives to implement management standards SSMSIS

2 Develop incentives to motivate the mine management to initiate changes in the company’s work culture

SSMSIS

3 Overhaul the social insurance contribution system to serve as an effective tool to improve occupational safety level and working conditions

SSMSIS

4 Overhaul the social security system to serve as an incentive to improve OHS and working environment hygiene

SSMSIS

5 Overhaul the legislation on medical prevention and health protection SSMSIS 6 Initiate obligatory occupational risk assessment in all coal mines in Ukraine SSMSIS

7 Establish system to regularly update the document on Occupational Health and Safety in every mine SSMSIS




Consortium


1 2 3 4 1 2 3 4 1 2 1 2 1 2 1 2 1 2 B. Institutional Framework Result 3: The institutional framework for occupational health is assessed for goal-oriented and efficient functioning; changes are implemented so that the institutional framework is set-up and functional

1 Assess and analyse the functions and operations of the institutional framework presently responsible for occupational health and safety in mines and identify gaps

CoM

2 Prepare the most appropriate institutional structure to allow for an effective and efficient implementation of occupational health and safety measures in mines

CoM




6 Support the elaboration of respective institutional documentations (Statutes, Operation Manual, etc.) Relevant Institutions

7 Establish appropriate coordination mechanisms between different institutions (including the streamlining of communication and reporting) Relevant Institutions

C. Operational Results Result 4: Coal mines have changed their work culture through, inter alia, the implementation of OHS Management Systems based on international standards (OHSAS)

1 Design and implement occupational health and safety management system SSMSIS

2 Introduce international standards (e.g. ISO 9000, ISO 14000, ISO 27000, EFQM, TQM, etc.) SSMIS External Assistance

3 Establish a mechanism to force mining companies to design formal mine development plan MM

4 Promote modern management methods and structures through e.g. training, campaigns SSMSIS 5 Introduce a ethnical guidelines for the company and a code of conduct for employees MM

6 Increase commitment and accountability of trade unions for occupational health and safety issues in mines MM

7 Review and overhaul the role of mining supervisory inspectors MM 8 Set benchmarks for working conditions in mines SSMSIS

9 Overhaul the centralized planning approach and direct it towards free market conditions, including the introduction of financial incentives for improved OHS levels in firms

CoM




Consortium


1 2 3 4 1 2 3 4 1 2 1 2 1 2 1 2 1 2 C. Operational Results Result 5: The medical prophylaxis system and the medical surveillance system is improved

1 Prepare and implement projects to improve the medical prevention system and the health protection of employees

SSMSIS

2 Prepare and implement campaigns (including training) on how to select and apply individual and general protective means

SSMSIS

Result 6: Mechanised and automised production processes are implemented and an automatisation system for hazard prevention is developed

1 Introduce an automated safety systems and make employees familiar to it SSMSIS

2 Mechanize and automise the production processes at mines and make people aware of the benefits of these measures SSMSIS

3 Implement modern methods of fighting endogenous fires and familiarise mine workers on it SSMSIS

4 Implement modern methods of fighting CH4 hazards and familiarise mine workers on it SSMSIS

5 Implement modern methods of fighting gas and rock outbursts and familiarise mine workers on it SSMSIS

Result 7: Degasification and Methan Utilisation in coal mines is improved

1 Pilot air conditioning projects in the selected coal mines SSMSIS

2 Design and implement methane drainage and utilization projects at selected coal mines SSMSIS

3 Design and implement projects on improvement of methane capture effectiveness SSMSIS




Consortium


1 2 3 4 1 2 3 4 1 2 1 2 1 2 1 2 1 2 C. Operational Results Result 8: Methods for forecasting and fighting natural hazards (rock falls, spontaneous fires, coal dust explosions and outbursts, etc) are improved

1 Design and implement modern training programs on occupational health and safety using interactive and action-oriented training approaches

SSMSIS

2 Design and implement training programs for representatives of the mining supervisory authority (the State Committee on industrial safety, occupational safety and mining supervision) on new management systems as well as the evaluation of the work of mine inspector

SSMSIS

3 Design and implement training programs on modern methods for forecasting natural hazards in coal mines

SSMSIS

4 Develop methods to define and mark hazardous zones potentially subject to outbursts and to minimize the number of people working in these zones

SSMSIS

5 Introduce organizational changes in the system of mines rescue service SSMSIS

6 Introduce a method for registration of accidents, including changes in the definition of an occupational accident

SSMSIS

7 Implement modern methods for the identification of an actual cause of accident SSMSIS

8 Implement active indicators and methods to assess the safety level SSMSIS DDES: Department for Degasification and Environmental Safety CoM: Cabinet of Ministers; MoECI: Ministry of Energy and Coal; MoJ: Ministry of Justice; MoH: Ministry of Health; MoLSP: Ministry of Labour and Social Policy; SSMSIS: State Service of Mining Supervision and Industrial Safety; MM: Mine Management




Consortium

Summary of costs

1. Cost of privatisation transactions: UAH 280 mln

2. Cost of mines closure of 29 mines: UAH 4 000 mln

3. Social mitigation costs: UAH 1 000 – 1 800 mln

4. Environmental mitigation cost: UAH 4 000 mln

5. Initial improvement of safety standards: UAH 125 mln




Consortium

Financial provisions for program implementation

1. Funds partly provided from privatisation of mines

2. Loans and grants by international financial institutions and donors

3. Technical aid of international institutions

4. Funds allocated from the budget of Ukraine

EU-funded Project: Coal Sector Policy Support Program EC-Contract – 2008/141-542 MASTER PLAN

Documents

Transcript of EU-funded Project: Coal Sector Policy Support Program EC-Contract – 2008/141-542 MASTER PLAN