Shanghai Able Digital Science&Tech Co., Ltd. - Environmental & Social Information 2020

2019 Environmental, Social and Governance Report

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1
About	this Report	2
1.1	Reporting Period	2
1.2 1.3	Reporting Scope Reporting Reference	2 3
1.4	Reporting Specifications	4
1.5	Access to this Report	5
1.6	Response to this Report	5

2			3
About	CITIC Resources	6	Our Governance	10
2.1	About the Subsidiaries and		3.1 Governance Structure	10
	Joint Ventures covered in this Report	7	3.2 Corporate Governance	13
2.2	Corporate Honour	8

Our Communication 15 Our Employees 22 Our Environment 33 4.1 Communication Channels 17 5.1 Policies and Benefits 22 6.1 Environmental Management 34 4.2 Materiality Assessment 19 5.2 Training and Development 27 6.2 Oil Spill Prevention 39 5.3 Respecting Rights 29 6.3 Resources Usage 41

7 Our Operation 43 7.1 Operation Safety 43 7.2 Market Practice 49 7.3 Supply Chain & Product Quality Management 51 Supply Chain Management 51 Quality Management 54

Our Community 55

Appendix 1 The Material laws and
regulations that the Group
complied with during the
Reporting Period	58
Appendix 2 Key Performance
Indicators	64
Appendix 3 SEHK ESG Reporting
Guide Index	70
Appendix 4 Feedback Form	75

1 About this Report

This Environmental, Social and Governance (“ESG”) Report (this “Report”) covers CITIC Resources Holdings Limited’s (“CITIC Resources” or the “Company”) and its subsidiaries’ and joint ventures’ (collectively referred to as the “Group”) latest sustainability related information in the 2019 year, and includes issues that are of interest to stakeholders and related to the sustainable development of the Company. This Report has been compiled to enable stakeholders to better understand the Company’s sustainable development values, management approaches, measures and related performance. This Report should be read in conjunction with the Company’s 2019 Annual Report (in particular the Corporate Governance Report within) to provide a comprehensive understanding of the Company’s performance.

The Board of Directors (“Board”) believes that reliable and independent environmental and social strategies and policies are critical to the Company engaging in the natural resources sector. The Board is fully responsible for the Company’s environmental and social strategies and reporting and has reviewed and approved this Report. The information disclosed in this Report is mainly derived from the internal documents and public information of the Group.

1.1 Reporting Period

This Report covers the period from 1 January 2019 to 31 December 2019 (the “Reporting Period”), unless otherwise specified. The information presented in this Report includes the Company’s specific ESG policies and performance. As some of the calculated information is of a continuous or comparable nature, the timeframe of selected contents has been adjusted where necessary.

1.2 Reporting Scope

There has been no significant change in the scope of this Report from that of the 2018 ESG Report published on 5th July 2019. The organisational scope of this Report is as follows:

CITIC Resources

(the head office of the Group in Hong Kong)

CITIC Canada Energy Limited
- CITIC Seram Energy Limited
- CITIC Petroleum Technology Development (Beijing) Limited
- CITIC Resources Australia Pty Ltd
JSC Karazhanbasmunai
CITIC Haiyue Energy Limited
Tincy Group Energy Resources Limited

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CITIC Resources Holdings Limited 2019 Environmental, Social and Governance Report

The scope of environmental key performance indicators (“KPIs”) only includes Tincy Group Energy Resources Limited.

The Company determines the scope of this Report based on its operational control over entities. Therefore, projects related to aluminium smelting, coal, manganese, bauxite mining and alumina refining are not included in this Report, including but not limited to the Portland Aluminum Smelter joint venture in Australia, Coppabella and Moorvale coal mines joint venture, and Alumina Limited in Australia.

1.3 Reporting Reference

This Report was prepared with reference to: the Environmental, Social and Governance Reporting Guide (the “ESG Reporting Guide”) contained in Appendix 27 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited. Moreover, the selection of information for disclosure was also based on the result of the materiality assessment.

This Report has complied with “comply or explain” provisions of the ESG Guide. Please refer to this Report’s Appendix 3 SEHK ESG Reporting Guide Index for reference.

The Company adheres to the reporting principles (of Materiality, Quantitative, Balance, and Consistency) outlined in the ESG Guide when preparing this Report.

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AboutthisReport

1.4 Reporting Specifications

In this Report, the following terms shall have the following meanings unless otherwise specified.

“China” refers to The People’s Republic of China “Kazakhstan” refers to The Republic of Kazakhstan “Indonesia” refers to The Republic of Indonesia “Australia” refers to The Commonwealth of Australia “Russia” refers to The Russian Federation “Hong Kong” refers to The Hong Kong Special Administrative Region, the People’s Republic of China “SEHK” refers to The Stock Exchange of Hong Kong Limited “CITIC Resources” or the refers to CITIC Resources Holdings Limited “Company” The “Group” refers to CITIC Resources Holdings Limited and its subsidiaries and joint ventures within the scope of this Report “KBM” refers to JSC Karazhanbasmunai The “Karazhanbas oilfield” refers to The Karazhanbas Oil and Gas Field in Mangistau Oblast, the Republic of Kazakhstan “Tincy Group” refers to Tincy Group Energy Resources Limited The “Hainan-Yuedong Block” refers to The Hainan-Yuedong Block in the Bohai Bay Basin in Liaoning Province, the People’s Republic of China The “Yuedong oilfield” refers to The Yuedong oilfield, the principal field within the Hainan-Yuedong Block in the Bohai Bay Basin in Liaoning Province, the People’s Republic of China “CITIC Seram” refers to CITIC Seram Energy Limited The “Seram Block” refers to the Seram Island Non-Bula Block, the Republic of Indonesia

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CITIC Resources Holdings Limited 2019 Environmental, Social and Governance Report

1.5 Access to this Report

This Report is available in both Chinese and English. Should there be any discrepancy between the Chinese and English versions, the Chinese version shall prevail.

Electronic copies are available as follows: HKEXnews: http://www.hkexnews.hk/ CITIC Resources: http://resources.citic

1.6 Response to this Report

Comments and suggestions regarding this Report and the sustainability performance of the Group are welcome and can be emailed at [email protected].

Furthermore, a feedback questionnaire is attached at page 75 of this Report, and you are welcome to complete and send this to us at the email address above.

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AboutthisReport

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2 About CITIC Resources

The Group has been listed on the SEHK since 1997. The Group manages a diversified business portfolio, covering energy, metals, and import and export of commodities sectors, and strives to conduct businesses in a sustainable approach. As of the end of the Reporting Period, the ultimate holding company of the Company was CITIC Group Corporation, a company established in China and a company which holds a 59.50% interest in the Company through CITIC Limited.

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Crude Oil Projects

Non-Oil Projects

The Company’s indirect wholly-owned subsidiaries has not only engaged in the import and export of commodities in Australia, but also invested in aluminium smelting, coal, manganese, bauxite mining and alumina refining projects
The indirect wholly-owned subsidiary of the Company engages in the exploration, development, and operation of oil fields located in China and Indonesia
The Company participates in manganese-related business in the form of an associate, including manganese mining, ore processing and downstream manganese processing
The Company participates in the development, production and sales of oil in Kazakhstan in the form of a joint venture

The Company also understands the importance of balancing the needs of its businesses with stewardship of the earth’s resources while paying attention to the community’s needs. The Group makes every effort to provide quality products and services, meet society’s needs for energy, and achieve the harmonious development of society, the economy, and the environment.

CITICResourcesHoldingsLimited 2019Environmental,SocialandGovernanceReport

2.1 About the Subsidiaries and Joint Ventures covered in this Report

The following are the subsidiaries and joint ventures by country covered in this Report:

Kazakhstan

China

CITIC Oil & Gas Holdings Limited, an indirect wholly-owned subsidiary of the Company, and JSC KazMunaiGas Exploration Production, through CITIC Canada Energy Limited (“CCEL”), jointly own, manage and operate KBM. Effectively, the Group owns 50% of the issued voting shares of KBM (which represents 47.31% of the total issued shares of KBM).

KBM is engaged in the development, production and sale of petroleum and holds the right to explore, develop, produce and sell oil from the Karazhanbas oilfield until 2035.

CITIC Haiyue Energy Limited, an indirect whollyowned subsidiary of the Company, owns a 90% interest in Tincy Group.

Tincy Group holds the right to explore, develop and produce oil from the Hainan-Yuedong Block in the Bohai Bay Basin in Liaoning Province, China until 2034. Tincy Group is the operator of the Hainan-Yuedong Block in cooperation with China National Petroleum Corporation.

Currently, the principal field within the HainanYuedong Block is the Yuedong oilfield.

CITIC Petroleum Technology Development (Beijing) Limited is an indirect wholly-owned subsidiary of the Group, engaging in petroleumrelated technology development business in Beijing, China.

Indonesia

Australia

CITIC Seram, an indirect wholly-owned subsidiary of the Company, owns a 41% participating interest in the production sharing contract until 31 October 2039. During the Reporting Period, the original production sharing contract expired on 31 October 2019 and it has been extended for 20 years from the end of original production sharing contract. CITIC Seram is the operator of the Seram Block.

CITIC Resources Australia Pty Limited is an indirect wholly-owned subsidiary of the Group, directly manages the operation of its import and export business. Other investment businesses, including aluminium smelting, coal, bauxite mining and alumina refining, are directly operated and managed by its partners in the form of joint venture.

AboutCITICResources

2.2 Corporate Honour

CITIC Resources KBM

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Credit Rating
Upgraded
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Moody’s Investors Service (“Moody’s”) upgraded CITIC Resources Holdings Limited Corporate family rating (CFR) from Ba3 to Ba2.

According to Moody’s, the Company’s positive free cash flow was underpinned by the recovery of oil prices during 2019, reduction in operating costs and the Company’s prudent management of capital spending and investments, which allows the company to continuously trimming its debts.

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120th
Anniversary
Medal
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KBM was awarded the 120th Anniversary Medal of the Kazakhstan Oil Industry by the President of Kazakhstan ’s National Oil and Gas Company in recognition of KBM ’s important contribution to the development of Kazakhstan’s oil and gas industry and the society. KBM, as the eighth largest oilfield operator in Kazakhstan and a responsible multinational joint venture, provides employees with benefits, such as medical insurance, major holiday bonuses, medical expenses reimbursement, allowance for marriage ， childbirth and funeral, allowances for disabled employees, summer camps for employees’ children and subsidies for retired employees in financial difficulties through the establishment of a comprehensive security system and welfare policy. The “2019-2021 Collective Contract with Employees” has been formally implemented. Good social welfare policies have enabled KBM to attract and retain elite talent. Apart from natural reductions such as retirement, there was almost no employee outflow, which made great contributions to improve local communities’ livelihood and social stability.

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CITICResourcesHoldingsLimited 2019Environmental,SocialandGovernanceReport

Tincy Group

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Outstanding
Production
Safety Operator
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Tincy Group strictly abides to production safety-related national laws and regulations and earnestly implements production safety-related policies. Tincy Group also strives to bear its corporate social responsibility for production safety and effectively controls the risks posed by offshore oil operation. The performance of Tincy Group among the offshore oil operation entities in the Liao He River area was outstanding.

CITIC Seram

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The Safety
Award 2019
(PATRA NIRBHAYA
KARYA MADYA 2019)
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CITIC Seram has been operating with zero work injuries for more than 9.7 million man-hours. The Indonesia’s Ministry of Energy and Mineral Resources therefore decided to grant CITIC Seram this award.

CITIC Seram

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Blue Proper
Rank
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CITIC Seram’s outstanding performance in complying with Indonesian environmental protection laws and regulations has been granted a blue rating under the Program for Pollution Control Evaluation and Rating (PROPER) by the Indonesian Ministry of Environment.

The Liao He River Supervision O ff i c e o f C h i n a N a t i o n a l Petroleum Division of the Offshore Oil Safety Supervision and Administration Office of the Ministry of Emergency Management, therefore, decided to award this honorary title to Tincy Group.

AboutCITICResources

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3 Our Governance

CITIC Resources strictly abides by the laws and regulations in the operation locations, the regulatory bodies’ provisions, while formulating and executing its own governance policies and codes of practice to ensure compliant operation. CITIC Resources attaches importance to risk management and internal control and ensures its subsidiaries’ and joint ventures’ compliance with laws and regulations, improvement of business operations, and management of risks and opportunities through policy provision and system monitoring. Through diversified and multi-level corporate governance, the Company continues to promote its sustainable development.

CITIC Resources lays great store on fulfilling its corporate social responsibilities and integrates sustainable development concepts into management by identifying and responding to sustainable development issues.

If you would like to know more about the Company’s information on corporate governance, please refer to the Corporate Governance Report in its 2019 Annual Report.

3.1 Governance Structure

CITIC Resources strictly complies with the listing provisions and requirements of the Rules Governing the Listing of Securities on SEHK and executes its governance policies. CITIC Resources continuously improves its governance structure, including the Board, the Remuneration Committee, the Nomination Committee, the Audit Committee, the Risk Management Committee, and the senior management, as well as its governance policies. Improving the level of the Company’s governance and regulating the Company’s operation and management ensures that all decisions are made on the principles of trust and fairness and announced in a transparent manner to protect the interests of all shareholders.

CITIC Resources’ Governance Structure:

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THE
BOARD
Risk
Remuneration Nomination Audit
Committee Committee Committee Mana gement
Committee
Senior
Management
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CITIC Resources Holdings Limited 2019 Environmental, Social and Governance Report

The Board

The Board is the operating decision-making body of the Group, accountable to the CITIC Resources’ shareholders. The Board has the following responsibilities:

to develop and review the Company’s policies and practices on corporate governance; and to review compliance with the CG Code and disclosures in the corporate governance report;
to review and monitor the Company’s policies and practices on compliance with legal and regulatory requirements;
to review and monitor the training and continuous professional development of the directors and senior management; and
to develop, review and monitor the code of conduct applicable to the directors and employees.

As at 24 March 2020, the Board comprised a total of seven members, with three executive directors, one nonexecutive director, and three independent non-executive directors. The resumes of all directors have been published in the Company’s annual report and website.

Four committees have been set up under the Board, namely the Remuneration Committee, the Nomination Committee, the Audit Committee, and the Risk Management Committee. They are each established with specific written terms of reference which deal clearly with their respective authority and responsibilities.

During the Reporting Period, to develop and refresh their knowledge and skills, all directors have participated in appropriate continuous professional development training which covered updates on ESG, laws, rules and regulations and also directors’ duties and responsibilities.

Remuneration Committee

The purpose of the committee is to make recommendations to the Board on the remuneration policy and structure for all directors and senior management of the Group and the remuneration of all directors of each member of the Group.

Making recommendations to the Board on the establishment of a formal and transparent procedure for developing a remuneration policy for all directors and senior management;
Determining remuneration packages of individual executive directors and senior management.

OurGovernance 11

Nomination Committee

The purpose of the committee is to lead the process for Board appointments and for identifying and nominating for the approval of the Board candidates for appointment to the Board.

Reviewing the structure, size and diversity (including without limitation, gender, age, cultural and educational background, skills, knowledge and professional experience) of the Board annually;
Making recommendations on any proposed changes to the Board to complement the Company’s corporate strategy, identifying individuals suitably qualified to become members of the Board and selecting or making recommendations to the Board on the selection of individuals nominated for directorships, and considering candidates on merit and against objective criteria with due regard to the Policy;
Reviewing the Policy and the measurable objectives, the progress on achieving the objectives, assessing the independence of independent non-executive directors and making recommendations to the Board on the appointment or re-appointment of directors and succession planning for directors, in particular, the chairman and the chief executive officer of the Company.

Audit Committee

The Audit Committee is responsible for making recommendations to the Board on the appointment, re-appointment and removal of the external auditor, and approving the remuneration and terms of engagement of the external auditor, and considering any questions of its resignation or dismissal.

Monitoring the integrity of the Company’s accounts, financial statements, interim and annual reports, and reviewing significant financial reporting judgements contained therein;
Reporting to the Board any suspected fraud and irregularities and suspected infringements of laws, rules and regulations which come to its attention and are of sufficient importance to warrant the attention of the Board.

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CITIC Resources Holdings Limited 2019 Environmental, Social and Governance Report

Risk Management Committee

The purpose of the Risk Management Committee is to assist the Board to oversee the overall risk management and internal control of the Group and to assist the Board in establishing and setting risk management and internal control policies and regulations appropriate and relevant for the Group.

Considering the overall objective and policies of the Group’s comprehensive risk management and internal control;
Reviewing the risk philosophy and risk tolerance and appetite of the Group;
Overseeing the Group’s overall risk management framework to identify and deal with financial, operational, legal, regulatory, technology, business, strategic and other relevant risks faced by the Group from time to time;
Reviewing and assessing the effectiveness of the Group’s risk control and risk mitigation tools and considering any other matters in relation to risk management and internal control responsibilities to be performed by the committee or the Board.

3.2 Corporate Governance

CITIC Resources has treated risk management and internal control as a top priority since its establishment. The Company recognises that it is the duty and obligation of the Board to establish and maintain a risk management and internal control system, which serves that Company’s strategic objectives and meets the Company’s business practice.

Risk Management and Internal Control

The Board has overall responsibility for maintaining an adequate system of risk management and internal control and reviewing its effectiveness.

The Group has established a risk management and internal control system covering all the business units to monitor, assess and manage various risks in the Group’s business activities. The risk management committee has reviewed the quality, integrity and effectiveness of the risk management policies and regulations of the Group and approved the relevant revisions on risk management policies under the delegation of the Board. The system identifies, evaluates and manages the significant risks through regular risk assessments, including both compliance assessment and self-assessment on risk management and internal control.

OurGovernance

The risk management and internal control system is designed to facilitate the effectiveness and efficiency of operations, safeguard assets against unauthorised use and disposition, ensure the maintenance of proper accounting records and the truth and fairness of the financial statements, and ensure compliance with relevant legislation and regulations. The system provides reasonable, but not absolute, assurance against material misstatement or loss, and management rather than elimination of risks associated with its business activities.

The Group’s risk management and internal control system comprises five levels based on the corporate governance structure:

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Responsible for evaluating and determining the nature and
The Board extent of the risks it is willing to take in achieving the
Company’s strategic objectives
The risk management
Responsible for reviewing the Group’s risk managemen
committee
Responsible for the day to day risk management
Management in all departments and subsidiaries of the Company
The risk management Responsible for supervising, monitoring and
departmen centralising the Group’s risk management
The members Responsible for performing the daily risk
of the Group management task
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During the Reporting Period, the risk management department identified risks using multiple channels, including questionnaires, group discussion and scenario analysis, evaluated the risk as normal risk, significant risk and critical risk, and managed the risk with reference to the risk management policy. It also controlled the risks of subsidiaries through monthly risk management reporting and risk assessment as well as the monitoring of major projects and business.

Internal Audit

In order to ensure the effectiveness and suitability of business operations, internal control, and risk management, the Company has established the internal audit department to carry out an analysis and independent appraisal of the adequacy and effectiveness of the Group’s risk management and internal control system, and to perform independent internal audit reviews for all business units and functions in the Group on a systematic and ongoing basis. While under the internal audit charter of the Company, the internal audit department has unrestricted access to all parts of the Group’s businesses and direct access to any level of management including the chairman of the Company and the chairman of the audit committee as it considers necessary.

During the Reporting Period, the internal audit department prepared an annual internal audit plan in accordance with riskbased principles. Pursuant to the approved annual internal audit plan endorsed by the audit committee, detailed audit planning for each audit was devised, followed by field audits and discussions with management of the Company and subsidiaries. Special audits are conducted when required by the Board and senior management. Internal audit reports were prepared after completion of the audits, informing management of the Company and subsidiaries about the identified control deficiencies, together with recommendations for immediate rectification. Concerns which have been reported by the internal audit department were monitored by management by taking appropriate remedial actions. The internal audit report, which included audit findings and follow-up results, has been summarised, communicated and reported to the audit committee during the year.

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CITIC Resources Holdings Limited 2019 Environmental, Social and Governance Report

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4 Our Communication

The trust and support of stakeholders are important to the sustainable development of the Group. The Group devotes itself to listening to the opinions of internal and external stakeholders, strives to balance the interests of all stakeholders, and proactively responds to the expectations and concerns of each stakeholder.

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Major
Stakeholder Group Engagement Reason
Stakeholder
The Group demonstrates its determination to pursue long-term
Major financial return and reports on the sustainable development to the
Shareholders major shareholders/
Public Investors Addressing the investors concerns on sustainability demonstrates
Shareholders/Investors
the Group’s determination to pursue long-term financial return.
Government
Policies and regulations directly impact the Group’s business. The
Agencies
Group needs to maintain close communication with the relevant
governments and regulators to ensure that policies and regulations
Industry
Government and are well understood.
Regulators
Regulators
It is essential to understand the Group’s employees’ sustainability
All employees
concerns, particularly on labour and occupational safety practices,
Employees
Oil Buyers
To retain the Group’s customers, the Group needs to understand the
Customers of shared sustainability values, so that the services the Group delivers
the Import and meet their expectations.
Customers Export Business
Oil and Gas By maintaining contact with peer companies, the Group can better
Companies grasp the trends of sustainable development and respond quickly.
Peers
With a commitment to maintaining good cooperative relations with its
Companies
partners, the Group actively communicates with them to understand
with Business
the shared values of sustainable development and to promote the
Partnership
implementation and execution of projects.
Business Partners
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OurCommunication

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Major
Stakeholder Group Engagement Reason
Stakeholder
The Group needs to maintain communication with different asset
Investment
management companies and investment institutions and meet the
Institutions
requirements of potential investors.
Potential Investors and
Financial Institutions
Raw Materials The sustainability performance of the suppliers and contractors
Suppliers directly impacts the Group’s performance as well.
Equipment The supplier is only involved in the supply of services, materials
Suppliers and equipment, and does not participate directly in the work
Suppliers
in the oil fields of the Group. However, the environmental and
Fleet Managers social performance of the suppliers has an impact on the Group’s
operations and reputation. Therefore, the Group needs to maintain
Professional communication with the suppliers to ensure that the suppliers
Service operate in compliance.
Providers
Given the contractors bear the same health and safety risks as
Catering the Group’s employees in the operating locations, the Group’ HSE
Service policies and systems cover all the contractors, which means they
Contractors [1] Providers are managed, restricted and protected by the HSE policies and
systems, to ensure the safety of the contractors’ employees and to
Security Service prevent harm to themselves and the Group’s employees due to their
Provider improper operation of facilities.
Communities The Group must proactively engage with local communities to
around the ensure that the its business is creating societal benefits. The Group
oil fields regards this as the social license to operate in the long run.
Communities and
the Public
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1 The Group has many different contractors. Only the essential contractors are listed above.

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CITIC Resources Holdings Limited 2019 Environmental, Social and Governance Report

4.1 Communication Channels

The Group ensures its understandings of the opinions and expectations of stakeholders in a timely manner through conducting stakeholder engagement, and the outputs of stakeholder engagement inform its establishment of existing and future sustainable development strategies. The Group proactively maintains communication with stakeholders, especially the stakeholder groups directly affected by the Group’s business operations. In addition, whether it is a group that pays attention to the focus of this Report, or a group that may affect the Group’s strategy, such as NGOs, media organizations, and industry associations, the Group is willing to interact with.

The subsidiaries and joint ventures have their own channels of communication with stakeholders, as summarized below:

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Stakeholders Communication Channels Expectations and Appeals
Protecting the rights and interests of
Annual general meeting
shareholders
Disclosure of listed company information
Improving corporate governance
Major Shareholders On-site Investigation
Improving business performance
Regular reporting and submission of Operating in compliance with laws and
information regulations
Regular communication with regulatory Promoting local economic development
authorities
Creating local job opportunities
Governments and Regulators Meetings/Seminars
Producing and operating in a safe
Annual environmental performance audit manner
Workers congresses
Ensuring occupational health and safety
for employees
Employee appraisal meeting
Improving remuneration and benefits
Employee satisfaction survey
Promoting professional skill development
Employees Employee suggestion box
Caring employees
Team building activities
Business communication Improving quality assurance system
Customer feedbacks Providing quality products and services
Customers
Communication with local labour
departments
Promoting industry development
Participation in industry forums
Peers
Visits and inspections with industry peers
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OurCommunication

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Stakeholders Communication Channels Expectations and Appeals
Annual meeting
Management visits
Cooperation
Special inspections
Business Partners
Regular reporting systems
Information disclosures
Briefings for investors
Disclosing information timely and
accurately
Roadshows
Potential Investors and
Financial Institutions
Briefings for analysts
Business communication
Tendering
Entry management
Seminars & conferences
Continuous evaluation
Entry requirements and evaluation
Suppliers Contractors
On-site investigation
Charitable activities Improving community environment
Stakeholder engagement Supporting community public welfare
Communities and the Public
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CITIC Resources Holdings Limited 2019 Environmental, Social and Governance Report

4.2 Materiality Assessment

The Group conducted its materiality assessment for its sustainable development-related issues (“SD issues”) with the help of an independent third-party consultant. The process includes issue identification, issue ranking, survey result analysis, and issue validation. The Group’s environmental and social materiality matrices was then prepared in two dimensions – the “Importance to Stakeholders” and the “Importance to the Group”.

Assessment Method

The procedures and steps of the Group’s materiality assessment are as follows:

Identification of the sustainability issues related with the Group’s Business

The Group has a dedicated pool of SD issues (the “Pool”) prepared by referring to different guidelines and peers’ concerns. The Pool includes both environmental and social issues. The background information of each issue is attached to the Pool for personnel’s reference. To ensure that all stakeholders have the same understanding of the issue, both internal and external stakeholders can refer to the background information of each issue when participating in the materiality assessment.

The references of the Pool:

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IPIECA – Oil and gas industry guidance on voluntary sustainability reporting
SEHK – ESG Reporting Guide
• GRI – Sustainability Topics for Sectors: What do stakeholders want to know? • Peer benchmarking

Before preparing this Report, the Group reviewed three major aspects, including its business boundaries, nature, and strategies, and explored the relevant industry policies and developments during the Reporting Period to ensure the Pool appropriately reflects the Group’s landscape of sustainable development. There are 20 SD issues in total, which are divided into two categories: environmental and social issues.

Prioritization of the sustainability issues

The Group invited major internal and external stakeholder groups to participate in the online survey and rank the Group’s 6 environmental issues and 9 social issues according to their levels of materiality. The survey received a total of 91 valid responses from internal and external stakeholders. After statistical analysis of data, we examined the materiality of the Group’s sustainability issues from both internal and external stakeholders, to determine the materiality of issues of all aspects to the Group. The issues that were ranked at 5 or above (The maximum score was 10) at both dimensions were considered material.

A total of 5 social issues and 3 environmental issues were obtained, and are displayed in matrix diagrams.

OurCommunication

Validation of the materiality of sustainability issues

The Management of the Group confirmed the materiality of the issues identified and disclosed them in this Report in a targeted manner.

Materiality Matrices

The Group reviewed the sustainability issues in two dimensions – the “Importance to Stakeholders” and the “Importance to the Group”. The Group assumed that the opinions of all stakeholders in each dimension are of equal importance. The matrices were sorted according to the levels of materiality of the issues from low to high, and from left to right on the horizontal axis. This Report discloses in the subsequent sections relevant information of the issues that are considered material by both internal and external stakeholders. The Group will disclose the work and progress made in various aspects and will place emphasis to material issues in its longterm operations, formulate corresponding strategies, improve policies and set long-term goals.

The Group considers social and environmental aspects equally important for its sustainable development and thus divides its materiality into two major aspects: “Social” and “Environmental’. Materiality matrices are prepared according to illustrate its material SD issues to stakeholders.

CITIC Resources’ Social and Environmental Materiality Matrices[2] :

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10
9
8
5
7 1
11
6 8
6
5 13 34 142 10 9 12
4
7
3
2
1
0
1 2 3 4 5 6 7 8 9 10
The Importance to the Group
10
9
8
7 19 15
6 17
5 16
18
20
4
3
2
1
0
1 2 3 4 5 6 7 8 9 10
The Importance to the Group
The Importance to Stakeholders
The Importance to Stakeholders
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The Group's Social Materiality Matrix

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Employment & Employee Benefits 9 Employees' Development & Training
Labour Standards 10 Product Quality
Product Responsibility 11 Anti-corruption
Local Content 12 Corporate Governance
Employees' Health & Safety 13 Investor Relations
Supply Chain Management 14 Technology Innovation
Community Engagement & Contribution
Employees, Contractors & Communities' Rights
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The Group's Environmental Materiality Matrix

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Oil Spill Prevention
Water Consumption & Efficiency
Local Environmental Impact
Biodiversity & Ecosystem Services
Energy Usage & Efficiency
Climate Change
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2 In the materiality assessment, the “Directors” ‘s and “Senior Management” ‘s opinions represented the “Importance to the Group”; the views of “Governments and Regulators”, “Employees”, “Customers”, “Business Partners”, “Suppliers”, and “Contractors” represented the “Importance to Stakeholders”.

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CITIC Resources Holdings Limited 2019 Environmental, Social and Governance Report

The SD Issue Prioritization:

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Materiality [3]
(Sorting from
Social Aspect Environmental Aspect
high to low
materiality)
1 Employees’ Health & Safety Oil Spill Prevention
2 Employment & Employee Benefits Local Environmental Impact
3 Anti-corruption Energy Usage & Efficiency
4 Corporate Governance Water Consumption & Efficiency
5 Employees, Contractors & Communities’ Rights Climate Change
6 Employees’ Development & Training Biodiversity & Ecosystem Services
7 Product Quality
8 Technology Innovation
9 Labour Standards
10 Supply Chain Management
11 Product Responsibility
12 Local Content
13 Investor Relations
14 Community Engagement & Contribution
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Responding to Issues

By analyzing the results of the survey, the Group identified 8 material issues and disclosed these issues in detail in this Report. In the future, the Group will continue to deepen the depth and breadth of communication with stakeholders

The 8 material issues identified in the materiality assessment and the corresponding sections for responses to the material issues are as follows:

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Social Aspect Sections for Responses
Employees’ Health & Safety Operation Safety
Employment & Employee Benefits Policies and Benefits
Employees’ Development & Training Training and Development
Anti-corruption Market Practices
Employees, Contractors & Communities’ Rights Respecting Rights
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Environmental Aspect Sections for Responses
Oil Spill Prevention Oil Spill Prevention
Environmental Management, Oil Spill Prevention,
Local Environmental Impact
and Resources Usage
Energy Usage & Efficiency Resources Usage
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3 Ranking is based on the summation of ranked scores for “Importance to Stakeholders” and “Importance to the Group”. Highlighted issues represent those that have attained scores of 5 or above for both dimensions.

OurCommunication

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5 Our Employees

The Group adheres to the concept of “Employees are our Most Valuable Asset and Wealth” and considers employees an important component of the core competitiveness and also the main driver of sustainable development of enterprises. The Group strives to develop and improve human resources-related policies, creating an inclusive and harmonious working environment for employees. Through building a career development platform and caring for employees’ health and happiness, the Group helps employees to develop and improve while achieving the growth of sustainable value of the Group.

The material issues – “Employment & Employee Benefits”, “Employees’ Development & Training”, and “ Employees, Contractors & Communities’ Rights” identified in the materiality assessment are particularly addressed in this section of this Report.

The Group strictly abides by relevant laws and regulations, and established policies to ensure that the Group operates in compliance. The Company has developed and implemented the Employee Handbook, and its subsidiaries and joint ventures have also developed and executed employee-related policies in line with the location-specific requirements, clarifying employee-related rights and codes of practice. If you would like to know more about these laws, regulations and policies, please refer to Appendix I of this Report.

5.1 Policies and Benefits

The Group insists on safeguarding and protecting the legitimate rights and interests of employees in accordance with the law, and uses this as the basis for achieving a better life for employees, hoping to build a bridge of trust with employees.

Based on the principles of fair, equal and diversified recruitment, the Group has established and improved the recruitment mechanism, adopting the key reference indicators relating to work experience, skills and professional ethics. The signing and dismissal of employment contracts are strictly conducted in accordance with the relevant local laws and regulations in the locations that the Group operates in to fully protect the rights and obligations of both employees and the Group.

The Group executes its human resources related policies that specify provisions relating to recruitment, remuneration, promotion, dismissal, working hours, rest periods, and benefits. The Group’s remuneration policy seeks to provide fair market remuneration in a form and value to attract, retain and motivate high quality staff. Remuneration packages are set at levels to ensure comparability and competitiveness with other companies in the industry and market competing for a similar talent pool. Emoluments are also based on an individual’s knowledge, skill, time commitment, responsibilities and performance and by reference to the Group’s profits and performance.

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CITIC Resources Holdings Limited 2019 Environmental, Social and Governance Report

The Group attaches importance to its employees’ balance between work and life. The Group adopts various means to create a healthy and interactive workplace. The Group relieves employee work stress by organizing different activities based on the needs and expectations of employees, and hence enhances employee cohesion and morale.

The Group also formulates a comprehensive and effective welfare and security system for its employees:

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The Welfare at a Glance
Share Option Quarters Statutory Social Medical Annual Physical Leaves
Scheme Benefits Insurance Examination
The Company Rent-free quarters The Group pays the The Group provides The Group provides In addition to
operates a share are provided to retirement benefits group medical annual medical statutory holidays,
option scheme for the some employees in required in the insurance for its examination the Group provides
purpose of providing Indonesia. operation locations employees to support reimbursement for employees with
incentives and rewards for its employees. their basic needs employees who have different types of
to eligible persons. such as outpatient, served for more than leaves to meet their
inpatient surgery, and one year. needs.
dental treatment.
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Response to the Issue

“Employment & Employee Benefits”

As the oilfields are located in different countries, the policies vary according to the local laws and regulations in the operating locations. The responses to the issue in the oilfields during the Reporting Period are presented separately by each oilfield below:

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KBM is committed to building an open and transparent personnel selection and recruitment system, creating a good working environment, eliminating any form of racial, religious and gender discrimination, conducting diversified and systematic employee training, and creating a broad room for the professional development of employees.

During the Reporting Period, the “2019-2021 Collective Contract with Employees” has been formally implemented. Good social welfare policies have enabled KBM to attract and retain elite talent. Apart from natural reductions such as retirement, there was almost no employee outflow, which made great contributions to improving local communities’ livelihood and social stability.

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OurEmployees

KBM Welfare

Healthcare

KBM provides its employees with a high level of modern medical services by signing a medical service contract with a company that provides advanced medical technology and equipment. In order to provide more targeted medical services to its employees, KBM also negotiated with the company to optimise the working time of experts in neurology, endocrinology, oncology, etc., to simplify the procedures for KBM employees to seek medical treatment, and to choose the villages with a large proportion of KBM employees to open medical stations to facilitate its employees’ access to healthcare.

In 2018, In order to help its employees to solve housing problems, KBM signed a memorandum of cooperation with two local real estate companies to sell new houses discounted by 15%-20% to KBM employees, enabling KBM employees to realize their housing dreams at a preferential price.

Housing

During the Reporting Period, KBM further signed a cooperation agreement with local banks to provide housing loans with a favorable annual interest rate of 5% to employees under the age of 29, who have no housing but multiple children (4-5 children). At present, 104 employees have planned to apply for this preferential loan to realize their housing dream.

In addition, KBM continues to maintain staff quarters so as to equalize the conditions of accommodation for all employees. During the Reporting Period, KBM completed the repairment of facilities in the worker villages, including 4 units of the quarter, cultural activity centre, mini football field, and medical points. Currently, accommodation obtains the highest scores in the employee satisfaction survey.

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CITIC Resources Holdings Limited 2019 Environmental, Social and Governance Report

KBM executes the “Regulations for Material Assistance to KBM’s In-service Employees and Retired Persons” to make the process of material assistance more transparent and fairer.

Materials

The summary of the material assistance provided by KBM:

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No. of No. of
Item Item
Employees Employees
Subsidies for sports and
Medical expenses reimbursement 444 162
rehabilitation activities
Burial allowance for direct family
112 Emergency material help 89
members
Employee important anniversary 78 Disability allowance 25
Subsidies for female employees
Marriage allowance 26 35
who take care of babies
Subsidiaries for Afghan war
Maternity allowance 210 veterans and Chernobyl nuclear 24
power plant rescuers holiday
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KBM was awarded the 120th Anniversary Medal of the Kazakhstan Oil Industry by the President of Kazakhstan’s National Oil and Gas Company

KBM organized summer camps for its employees’ children

OurEmployees 25

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Tincy Group’s human resources-related management (recruitment, dismissal and promotion) complies with the relevant provisions of relevant laws and regulations. At the beginning of each year, Tincy Group summarizes the statues of personnel in the previous year and analyzes the personnel in the current year. Then, Tincy Group recruits suitable candidates for the vacant positions according to the analysis result.

Tincy Group Welfare:

Tincy Group handles “five social insurances and one housing fund” for its employees according to relevant national regulations, and employees were entitled to statutory leave and paid annual leave in accordance with relevant national regulations. Statutory Social Benefits and Leaves

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CITIC Seram stipulates the provision of salary, recruitment, promotion, equal opportunities, treatment and benefits etc., in the policy. At the same time, working hours and rest time are regulated according to the nature of work.

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CITIC Seram conducted its team building and learning activities for its employees on Labuan Bajo Island to celebrate the 74th Independence Day in Indonesia.

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CITIC Resources Holdings Limited 2019 Environmental, Social and Governance Report

5.2 Training and Development

The competition between and development of enterprises in fact are the competition for talents. Therefore, the Group attaches importance to the cultivation and development of employees. Through continuous and effective training, the sufficiency and depth of the system for providing talents are ensured. The Group’s staff performance appraisal mechanism takes into account of the work performance of employees as the basis for the adjustment of salary and rank so as to stimulate the enthusiasm of employees and encourage them to realize their own value. At the same time, the Group has been continuously expanding its internal career development space to show the career development opportunities to its employees.

The Group formulates staff training and development programs, and encourages its employees to participate in targeted training courses and industry seminars to enhances their skills, and hence improve their working capability and facilitate their career developments. The Group provides various types of trainings to satisfy the needs of employees at different stages of their career. CITIC Resources made the “Employee Training and Development Policy” and regulated the continuous education of its staff. In addition to the trainings assigned by the Group, each employee can apply an annual training allowance of $5,000 Hong Kong dollars (“HKD”) to participate in the training courses organized by authorized organisations so as to improve professional quality and ability.

In addition to the training allowance of $5,000 HKD, employees can apply allowance for external courses (such as certificate or diploma courses) if the courses can greatly contribute to their work and the Company. Before the course starts, employees can apply to the department head and the human resources and administration department, and obtain approval from the CEO. If the course fees exceed the limit of training allowance, employees must sign a training agreement with the Company.

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Training Type
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Personal
Compulsory Professional Career
Training Training Development
Training
Health, Safety & Operational safety and
Well Control
Environment lifesaving
Hydrogen Sulphide Procurement Rules and
Oil Spill Prevention
Treatment and Safety Procedures
Advanced Machinery and
Industry Knowledge Firefighting Safety
Equipment Use
Accounting Legislation Taxation
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The Training Content at a Glance:

OurEmployees

Response to the Issue

“ Employees’ Development & Training”

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During the Reporting Period, KBM sent a delegation of young experts to participate in the International Youth Oil and Gas Forum and a 5-day seminar and intensive training held in Russia. The content includes the industry’s cutting-edge topics, such as “the difficulties in using oil reserves and non-traditional oil and gas resources” and “the digital transformation for oil and gas exploration”. Modern enterprise management skills training is also included, covering “efficient teamwork”, “design-thinking”, and “project management in company”. The delegation gained valuable experience and thoughts from the international exchange.

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KBM employees participated in the International Youth Oil and Gas Forums and seminars

KBM employees participated in occupational skills competitions

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During the Reporting Period, the integrated management department of Tincy Group was faced with different aspects, different personnel, and different requirements, and the department summarized the actual needs of various departments. The department then organized targeted education and training at multiple levels and aspects, improving employees’ knowledge in safety production and their management skills in every aspect.

Tincy Group organized four phases of various safety production knowledge and skills training sessions throughout the year, with a total of 86 participants. There were 9 participants in the well control training for 504 hours; there were 29 participants in the hydrogen sulfide training for 696 hours; there were 30 participants in the “four minor certificates” training for 720 hours; there were 18 participants in the safety qualification training for 864 hours.

In response to the features of the offshore platforms of the Yuedong oilfield, Tincy Group provided its employees and contractors with relevant offshore safety training on a regular basis. Tincy Group also required that the contractors must establish a safety and environmental protection management system to strictly enforce industry specifications and standards, and to continuously perform the required health and safety related training for its employees. Additionally, Tincy Group conducted hazardous waste training and relevant emergency drills.

At the same time, the development opportunities and insights in the current oil and gas industry are needed to be deepened to comprehend the situation and tasks of the continuous development of the oil field. On the other hand, the modern management concepts and methods are needed to be mastered to strengthen the consciousness of implementing senior management’s decisions and fulfilling work duties, and to improve the work efficiency of the team. Tincy Group organized the first phase of online and offline middle-level and key personnel management improvement training, with a total of 20 participants for a total of 1,280 hours.

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CITIC Resources Holdings Limited 2019 Environmental, Social and Governance Report

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In addition to building its employees’ professional skills and safety awareness, CITIC Seram also establishes different types of training through cooperation with different organisations to develop its employees’ skills beyond their own work, expanding the employees’ visions.

The Training Content at a Glance:

The status of gross split

SKK Migas, which manages upstream oil and gas business activities in Indonesia, organized training in taxation terms of oil and gas contracts. A key change in the 2017 revision and update is the cancellation of the cost recovery mechanism. It has increased the financial benefits and legal certainty of oil under the current finance and taxation clauses on the oil and gas contract in Indonesia, while stimulating investment in the upstream industry and enhancing the transparency of upstream industry for investors in Indonesia.

CITIC Seram sent staff to participate in the training to enhance employees’ understanding of the new mechanism.

Disaster Recovery

CITIC Seram sent staff to participate in disaster recovery-related information technology (“IT”) courses organized by EC-Council to increase employees ’ability to handle related matters. The focus of the training is to improve the ability of personnel in the face of disasters against IT facilities. The goal is to let employees understand how to reopen IT facilities in a short period of time to maintain at least 60% of the connections to restore a certain degree of communication capabilities.

5.3 Respecting Rights

CITIC Resources resists any acts of disregard or abuse of human rights and respects its employees’ rights and dignity. The Group strives to safeguard the employees’ rights, and fully considers the impacts of the policies to the employees when the Group develops relevant policies. Concurrently, the Group incorporates the principles of equal opportunity, diversity, and antidiscrimination into its operation. The Group is also committed to enriching the Group’s staff composition and establishing a team of personnel with diverse races, educational backgrounds, work experience, nationalities, and expertise.

The strict compliance with relevant laws and regulations on employment, as well as the formulation and execution of relevant policies in accordance with laws and regulation, is an important cornerstone for protecting the rights and interests of employees. The Group complies with the relevant local laws and regulations on employment, ensures that all employees enjoy their entitled rights and interests and fair and equitable treatment in accordance with the laws, respects the rights and interests of female employees and minor nationalities, and protects the values, beliefs and privacy of its employees with different nationalities, races, genders and cultural backgrounds from violation.

OurEmployees

The Concerns in CITIC Resources Headquarters:

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Anti-discrimination Personal Privacy Equal Opportunity
Regardless of recruitment, the The Company promises to process In order to cope with harassing behaviors
preparation of employment terms, and the the personal data of all employees in in the office area, the Company has
handling of any employment matters, the accordance with laws and regulations, established a comprehensive grievance
Company handles matters on a fair basis, and also guarantees that the requested procedure.
and ensures that all people regardless data is legal, accurate and necessary.
of gender, marital status, race, religion, After receiving the complaint, the Company
etc. can be treated equally without any At the same time, the Company treats will understand the situation, make a
discrimination. employees’ personal data as confidential detailed investigation, and take appropriate
information, and will only be used for actions or disciplinary actions.
employment, welfare insurance, any other
with the consent of the Company and The Company will deal with all employees’
employees or other legal purposes complaints strictly.
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The Concerns of KBM, TIncy Group, and CITIC Seram:

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Preventing Child Labour Prohibiting Forced Labour Collective Bargaining
During recruitment and hiring period, the The Group also respects its employees’ The Group respects its employees’
Group proactively checks the identity right of personal freedom and right to rights of collective bargaining and is
documents of applicants to ensure that leave and absolutely opposes forced committed to complying with relevant
the applicants reach the legal working labour by clearly stipulating employee laws, regulations and systems in
age, preventing the employment of child working hours per day. If any violation each operation location. The Group
labour. of the relevant laws and regulations was strengthens its communication and
found, the relevant departments would cooperation with employees through
report to the management according to collective bargaining to promote the
the internal policies of the Group. After stability of labor relations and to drive
investigation, the relevant departments the realization of the Group’s objectives
would rectify the issues or situations in and the enhancement of the Group’s
response to the investigation results. operational efficiency.
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CITIC Resources Holdings Limited 2019 Environmental, Social and Governance Report

Response to the Issue

“Employees, Contractors & Communities’ Rights”

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Collective
Contract
During the Reporting Period, the “2019-2021 Collective Contract with Employees” has been officially
implemented.
In 2018, KBM was granted “Best Collective Contract Award 2018” by the former Kazakhstan President
Nursultan Nazarbayev and was the only oil company to receive this honour. KBM supplemented and
revised the “2016-2018 Collective Contract with Employees”, and the budget for employee benefits
was increased by $1.85 million Hong Kong dollars comparing to the previous year. Based on these
changes, KBM signed the “2019-2021 Collective Contract with Employees”.
Female
Employees’
Rights and
Interests
During the Reporting Period, KBM developed a number of welfare policies for female employees to
strengthen the rights of female employees, including but not limited to:
•
Providing material assistance in total of 50-month accounting indicators when employees give birth
•
Prohibiting termination of employment contracts with female employees, who are pregnant,
raising children under 3 years old, single-parent, and raising children with disabilities under 8
years old
•
Providing monthly material assistance in total of 20-month accounting indicators to female
employees who raise children under 1.5 years old
•
Provide feeding time for female employees raising children under 1.5 years old
•
Not allowing to request female employees who raise children under 7 years old to work night
shift without the written consent of the employees
•
Providing pre-school education subsidy to employees: 50% of the tuition fee for one child, 75%
of the tuition fee for two children, and 100% for three or more children.

OurEmployees

Employee KBM recogizes the fundamental role of labour unions in resolving labor-management conflicts. In Communication order to keep abreast of the employee’s thoughts and solve their difficulties in real life, KBM has established a mechanism to meet and communicate with employee representatives on a monthly basis, and to extensively discuss various issues between employers and employees, such as increasing the medical subsidies for employees, increasing or decreasing the number of posts, adjusting work systems, strengthening employees’ industrial safety knowledge tests, and canteen dining room standards.

In addition, KBM continues to organize employee reception days. The schedules of the KBM chairman and all deputy general managers are coordinated on a monthly basis to receive feedback and attend to various issues raised by employees. At the same time, the internal newspaper also set up a fixed section to report content of labour unions and youth expert councils.

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CITIC Seram recognises that oil extraction activities can create value for local residents, therefore paying attention to the level of local content of its business. CITIC Seram has increased the job opportunities for local people by establishing policies. In addition to actively recruiting local residents who meet job requirements and qualifications, CITIC Seram also disseminates information about local content and promotes the value of local content to its contractors. The contractors are required to prioritize local people who meet job requirements and qualifications.

The Group’s diversity during the Reporting Period is presented below:

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The Percentage of the Group's The Percentage of the Group's The Percentage of the Group's
Employees by Region Employees by Gender Employees by Age
5%
1% 9% 7%
3%
1% 28%
90% 91% 65%
Kazakhstan Hong Kong Male Female < 30 30-50 > 50
Mainland China Australia
Indonesia
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CITIC Resources Holdings Limited 2019 Environmental, Social and Governance Report

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6 Our Environment

The Group always upholds the values of “striving to protect the natural environment in the operation zones and adjacent communities” and continuously pays the attention to the impacts of its business on the environment. The Group incorporates its environmental protection responsibilities into its daily operations and continuously improves its environmental management through a series of measures to minimize the impacts on the surrounding natural environment. The Group abides by the relevant local laws and regulations on environmental protection in the operation locations, formulates internal environmental management policies, conducts regular environmental performance monitoring, applies multiple green and low-carbon technologies, and implements carbon reduction measures to reduce its consumption of resources, such as electricity, fuels and water, and to lower its air and greenhouse gas (“GHG”) emissions. The Group also considers the impacts of climate change on its business and operation.

The environmental impacts of the Group’s business mainly come from oil exploitation.

The Environmental Impacts of the Group at a Glance:

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Changes to the
Discharges into Water Natural Environment
Air Emissions Waste Generation and Land GHG Emissions Water Usage around the Operation
Locations
The equipment The Group The Group The Group’s As the oilfields are During the operation
used in the generates oil discharges the operations involve located in remote of the Group, it is
operation of the sludge and oil properly treated direct and indirect locations or far from necessary to establish
Group is driven by contaminants domestic sewage greenhouse gas land, the Group different facilities in the
fossil fuels, and (commonly known into the water emissions. The needs to use fresh natural environment
this generates as oil sand) when bodies, and the equipment used by water from the to maintain smooth
the emission exploring and wastes generated the Group is driven natural environment operation, and
of atmospheric developing oil fields, are stored in proper by fossil fuels, and for production and it changes the
pollutants such as and at the same places. burning fossil fuels daily living in the oil surrounding natural
nitrogen oxides, time, industrial leads to release fields. environment.
sulfur dioxide, and oily wastewater is of carbon dioxide.
soot. generated during At the same time,
the production the Group involves
process. flaring emissions.
The main waste of The Group also
the staff quarters purchases electricity
and offices of the to meet energy
Group is domestic demand, and it
wastes. generates indirect
emissions.
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The material issues – “Oil Spill Prevention”, “Local Environmental Impact”, and “Energy Usage & Efficiency” identified in the materiality assessment were particularly responded in this section in this Report.

The Group strictly abides by relevant laws and regulations and establishes policies to ensure its operation in compliance. If you would like to know more about the laws, regulations and policies, please refer to Appendix I of this Report.

OurEnvironment 33

6.1 Environmental Management

The Group strictly complies with the environment-related laws and regulations in the operating locations, always maintains effective communication with relevant government departments, continuously monitors environmental performance, and reduces its environmental impacts through implementation of environmental management systems and policies and enhancement of green technology innovation. The Group recognizes that its own businesses have different impacts on the local environment and residents, and therefore proactively stresses the importance of environmental protection among its subsidiaries and joint ventures. Moreover, the Group requires its subsidiaries and joint ventures to achieve the requirements and provisions on environmental protection requested by the local government departments. The Group promotes the concept of environmental protection within its control and strikes a balance between business development and environmental protection.

In order to be in line with the actual situation of the operation locations, KBM, Tincy Group and CITIC Seram separately formulated and implemented different environmental management policies in each operating oil field to reduce the environmental impacts of the business.

Basic environmental management in the three major oil fields:

KBM has prepared an effective “Annual Environmental Protection Work Plan” and action proposals in accordance with the requirements of Kazakhstan’s environmental protection regulations, including:

Submitting applications for GHG emissions, natural gas flaring emissions, solid domestic waste and waste metal stacking to the government departments, including the Ministry of Energy and the Ministry of Environmental Protection in a timely manner, and obtaining relevant approvals in time;
Monitoring the atmosphere, soil, water, flora and fauna, and radiation surrounding the oilfield, and the water quality of Caspian Sea;
Establishing various emission standards and emission reduction programs, obtaining approval from local regulators;
Treating oil sand, electronic waste, chemicals, daily garbage, etc., timely; and

• Disposing accumulated drilling waste and oil-soaked soil and actively looking for technologies to dispose of pit oil left in the past; Karazhanbas oilfield KBM established an environmental monitoring and control system that covers various sources of pollution, and KBM has assessed the environmental impacts of its operational activities at its operation sites on a quarterly basis. KBM also engaged authoritative institutes to approve its emergency plans for high-risk facilities in order to effectively reduce the potential environmental damage caused by emergencies.

The construction waste, drilling waste mud, drilling fluids, etc., generated in the Karazhanbas oilfield are all processed by accredited entities. KBM has also arranged waste disposal companies to carry out the transportation and disposals and as well as daily disinfect and deodorization in the dump site to ensure the safety of the surrounding environment.

The contractors are required by KBM to provide analysis reports prepared by laboratories to ensure that the treatment of drilling waste mud and drilling fluids meet the environmental requirements. KBM also recovers oily wastewater, performs oil-water separation and filtration treatment, and realizes the recovery of the oil residue and the injection of treated wastewater. The sewage in the living quarters is treated in a treatment facility and discharged into an artificial pool for volatilization or injection into the underground reservoir to minimize groundwater and surface water pollution.

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CITIC Resources Holdings Limited 2019 Environmental, Social and Governance Report

Tincy Group incorporated environmental protection measures into its HSE management system through formulation of environmental policies, such as “Emergency Preparedness and Response Management Procedures”. With the aim of continuous improvement in its environmental performance, Tincy Group also set comprehensive processes and guidelines as well as clear targets and indicators. Moreover, in order to enhance the emergency awareness, operational preparedness and handling skills of its management and employees, Tincy Group carries out:

an annual onshore terminal processing station comprehensive emergency drill; and
an annual comprehensive marine emergency joint drill

In addition, Tincy Group set up oil leakage collection devices, offshore oil and gas confined distribution and pipeline emergency shutdown systems in both the offshore platforms and the onshore terminal processing station to prevent environmental pollution and protect the operation zones. Tincy Group Yuedong has engaged the government environmental monitoring centres to conduct the annual environmental oilfield monitoring of both the offshore platforms and the onshore terminal processing station during the production and operation period.

According to the requirements of the Chinese government’s 13th Five-Year Plan, Tincy Group has gradually adopted advanced production technologies in the production process and reduced pollutant emissions through recycling of materials. Tincy Group has also engaged qualified contractors to carry out harmless disposal for hazardous wastes in accordance with the regulations in the operation location so as to reduce the impacts of hazardous wastes on the environment.

In order to ensure that the discharge of domestic sewage meeting the standard, the personnel on each production platform regularly carry out equipment maintenance and sampling of discharged sewage, and the sampled sewage is sent to a qualified company for testing to ensure compliance with regulations.

CITIC Seram executes “HSE Policy” to strengthen the control of water and air pollutants, hazardous waste management, and sewage discharge control in accordance with the requirements of Indonesian environmental protection regulations. CITIC Seram engages independent laboratories to periodically assess the impact of its operations on the environment, and takes precautionary measures based on the test results.

Seram Block

CITIC Seram executes source separation for non-hazardous wastes and performs recycling as far as possible. The wastes that cannot be recovered will be incinerated or buried. CITIC Seram also recovers and reuses lubricants used in well workover and production, as well as crude oil extracted or filtered from oil-sewage treatment facilities. Hazardous wastes are stored in a temporary storage in Seram Block before being handed over to a third party that transport the wastes to a licensed storage and processing facility. And the transport processes are supervised by the local government departments.

CITIC Seram carries out a grading process according to the types of wastewater and ensures that the discharging indicators meet the standards through a series of treatment processes, such as a settlement system and a spray system. Domestic sewage is discharged after being centrally treated by an accredited sewage plant, and samples are tested on a monthly basis.

The environmental monitoring system and incident reporting system, as important parts of the HSE management system, can effectively monitor the concentration of various emissions to ensure compliance with emission standards. In the events of any abnormality situation, dedicated personnel will handle and follow up.

OurEnvironment 35

Response to the Issue

“Local Environmental Impact”

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During the Reporting Period, the groundbreaking of the “Karazhanbus Oilfield Produced Water Treatment Plant Project” was held. The project has been jointly invested and constructed by KBM and an environmental technology company officially broke ground.

The project is designed to treat 42,500 tons of produced water per day and to produce 17,000 tons of purified water per day. It is expected to be completed and put into production by the end of 2020. After completion, the produced water treatment plant will provide more than 6.2 million tons of fresh water annually, and it will provide continuous and stable water source for the development of steam injection in the Karazhanbas oilfield.

Produced Water Treatment

Membrane filtration is adopted in the produced water treatment plant project to treat produced water. The treated water is then supplied to the boilers for steam injection. The reinjection of produced water raises an issue about water coming out from from the ground in a large scale. This method not only avoids pollution risks posed by the issue but also realizes the resource utilization of produced water, assisting KBM in getting rid of the dependence on the Volga River water. The annual savings is more than 6.2 million cubic meters of Volga River water, and it can be used for local industrial and agricultural development.

At the same time, the implementation of this project can not only reduce the reinjection of produced water in oil fields, but also increase crude oil output, saving energy and reducing oil production costs. In addition, the project also brought more than 50 jobs to the location.

The “Beautiful Oilfield Construction Plan” formulated by KBM has driven the demolition of waste production facilities and associated buildings, such as the oil and gas processing stations and fixed steam injection stations, and the execution of site cleaning and surface vegetation restoration. During the Reporting Period, KBM has continued to demolish waste production facilities and associated buildings, such as the oil and gas processing stations and fixed steam injection stations, and carried out site clean-up and surface vegetation restoration.

In order to improve and beautify the environment, KBM carried out greening work such as planting trees and planting flowers near the natural gas workshops, Environmental material bases, and offices. restoration

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KBM organized its employees to plant trees

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CITIC Resources Holdings Limited 2019 Environmental, Social and Governance Report

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In 2018, the air pollutant emissions mainly included two parts, one was the emissions of atmospheric pollutants from the fuel combustion of various boilers and equipment on the offshore production platforms, and the second was the emissions of atmospheric pollutants from the combustion of fuel oil from crude oil heating boilers at the onshore terminal processing station. Since 2019, steam is purchased to replace crude oil heating boilers in Tincy Group’s onshore terminal processing station, which reduced the onshore emission of atmospheric pollutants. At present, Tincy Group’s air pollutant emissions only come from the fuel combustion of various boilers and equipment on the offshore production platforms.

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The pipelines for purchased steam

The 3 out of service oil boilers

During the Reporting Period, Tincy Group laid an anti-seepage membrane on the well workover sites to prevent oil pollution from contaminating the surface of the offshore platforms. In addition, Tincy Group uses plastic film to wrap oily pipelines on the offshore platforms to prevent oily dirt from dripping onto the platforms, docks, and seawater.

Environment

Tincy Group newly planted more than 1,200 herbaceous flowers in the office building area, such as string red, marigold, etc., and more than 300 perennial flowers such as rose, hollyhock, etc. In addition of the fruit trees such as apples, peach trees, and various ornamental trees planted in the past years, the maintenance and hard work over the years have made the office area with spring and summer flowers blooming, autumn fruit fragrance and fresh air.

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OurEnvironment

During the Reporting Period, 3 stepped self-balancing workover rigs (“electrical workover rig”) that are safe, environment-friendly, energy-saving, and noise-reducing were put in operation to replace the conventional diesel-fuelled workover rigs, which not only greatly reduces air and GHG emissions, but also fully enjoys the electricial workover rigs’ advantage of being energy-efficient of 35%, comparing with the conventional diesel-fuelled workover rigs.

Air Emissions

In addition, Tincy Group adopts different methods, such as reducing the operating current of electric heating and optimizing the operation of electric heat tracing, etc., to rationally adjust the operating parameters and operating schemes of electric heating of oil wells, reducing power consumption. Compared with the same period of last year, the unit power consumption per ton of liquid has decreased by 1.69kWh/t. Taking into account the increase in the volume of liquid, the total power consumption has decreased by 38.1 x 10[4] kWh.

Tincy Group makes comprehensive use of natural gas, greatly reducing the emissions of atmospheric pollutants while saving 1,790 tons of fuel oil consumption.

Tincy Group has started to purchase steam to replace oil-fired boilers, thus reducing the emissions of atmospheric pollutants. Since the beginning of 2019, Tincy Group has signed a steam purchase and sales contract with a supplier of steam for the onshore terminal processing station. The steam supplier produces steam to serve as the heat source required in the crude oil production process at the processing station. Tincy Group has stopped using the 3 boilers, achieving zero emissions.

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CITIC Seram regularly inspects the following environmental impacts:
Environmental Air Quality Every half year
Monitoring Water Quality Monthly
Hazardous Wastes Annually
Non-hazardous Wastes Monthly
In order to reduce emissions and comply with regulations, CITIC Seram uses natural gas instead
Air Emissions of diesel as the fuel for turbine generators in major production facilities, and only uses diesel in
emergency or trial operation.
CITIC Seram launched a two-year large-scale afforestation program covering 450 hectares within its
operating area in 2017.
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Environment

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During the Reporting Period, CITIC Seram has completed its goal of planting trees of 450 hectares. However, some of these areas have been destroyed by forest fires and CITIC Seram will protect the trees by replanting and restoring the area.

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CITIC Resources Holdings Limited 2019 Environmental, Social and Governance Report

6.2 Oil Spill Prevention

Oil spills can be caused by accidents during operation, poor maintenance, or corrosion of equipment. The possibility of causing serious environmental, social, health, and economic consequences cannot be ruled out. Oil spills may also have a long-term impact on the corporate reputation.

CITIC Resources recognizes that crude oil spills can have serious ecological and socioeconomic consequences and can be dangerous for employees and the wider community. The Group has made significant efforts in operational planning and policy implementation to prevent oil spills and to increase the effectiveness and response rate of clean-up activities in the event of an accident.

In the event of a crude oil spill, the primary goal of CITIC Resources is to minimize the impacts of the crude oil spill on people, environment, and communities. To this end, CITIC Resources has required and assisted its subsidiaries and joint ventures to develop thorough and effective measures to prevent crude oil spills.

Basic oil spill management in the three major oil fields:

	KBM executes the “Regulations on Temporary Stacking, Storage, Counting, and Clearance of Production
	Waste in KBM Oilfield”.
	The regulations on crude oil spills and response are as follows:
	1. The employees and their seniors at the location of the accident of crude oil spill and contaminated
	land and resources shall be responsible for the handling of the event of the crude oil spill;
	2. The personnel responsible for oil spills shall be punished;
Karazhanbas oilfield	3. All events of crude oil/oil product spill accidents shall be recorded and signed for confirmation in accordance with the relevant format;
	4. The crude oil spill shall be responded immediately after the occurrence; the wastes generated during
	the accident shall be registered and handed over to the Environmental Protection Department; the
	surface in the accident area shall be recovered;
	5. On the 1st day of each month, the injured persons in the accidents shall be registered, and the
	information on the crude oil spill accidents shall be submitted to the Environmental Protection
	Department.
	Tincy Group’s key focus of the prevention of crude oil spills is the crude oil transportation sea pipelines
	from the offshore platforms to the onshore terminal processing station. Through the establishment of
	preventive measures and real-time monitoring, the stability of crude oil transportation process is assured.
	Tincy Group established and implemented the “Tincy’s Integrity Management Document for the Sea
	Pipelines during Operation Phase” to manage the operation of sea pipelines as follows: comprehensive
Yuedong oilfield	regulation of data collection and integration, identification of high consequence areas, risk assessment and integrity management plans, testing/monitoring/testing, evaluation of integrity, mitigation measures/ transformation/maintenance, performance evaluation, and continuous improvement. The integrity
	management of the sea pipelines are provided with guidelines and guidance.
	Tincy Group has prepared the “Special Emergency Plan for Oil Pipeline Ruptures” and offshore
	platforms’ on-site emergency plans for crude oil spills. The resource preparation for emergency is divided
	into the crude oil leak sealing, the sea pipeline repairment, and crude oil spill related rescue and clean-
	up.
	CITIC Seram directly participates in the handling of environmental accidents through the establishment
	of a crude oil spill emergency response team. The crude oil spill response team includes personnel
	from the production department, the maintenance department, and the HSE departments. The crude
	oil spill emergency response team conducts drills each year to train personnel and test the operation of
Seram Block	equipment. In addition, the members of the crude oil spill response team are currently granted the first and second level certification of the International Maritime Organization in accordance with the requirements of
	the Ministry of Sea Transportation.
	CITIC Seram stores and maintains its crude oil spill emergency equipment in the crude oil spill emergency
	equipment building in its terminal cargo area. The responsible personnel check the crude oil spill
	emergency equipment every week to ensure that it is maintained at its best condition.

OurEnvironment 39

Response to the Issue

“Oil Spill Prevention”

As the oilfields are in different countries, the policies vary according to the local laws and regulations in the operating locations. The responses to the issue in the oilfields during the Reporting Period are presented separately below:

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KBM prevents crude oil spills during crude oil extraction, centralized transportation and process through establishment and implementation of the “Annual Oil Well Holes Inspection Plan”, “Annual Valves and Process Pipelines Inspection Plan”, “Annual Process Equipment Flaw Detection and Precautionary Inspection Plan”, and “Annual Crude Oil Processing and Processing Workshops’ Process Pipelines Measures and Valves Inspection Plan”. etc. The prevention of crude oil spills was carried out according to the annual work plan and related work processes in all the workshops.

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Sea Pipelines’ Surface Inspection

Every 2 years as a cycle
The purpose of the investigation is to identify the deformation of the sea pipelines (mainly caused by the ships’ anchoring and scraping) and the bareness of the sea pipelines (mainly caused by the change of the seabed surface due to scouring)
Surveys on the sea pipelines’ position, depth, elevation, and vicinity of 20 meters around the seabed are conducted
Precautionary Measures Sea Pipelines’ Hanger Inspection • Every 1 year as a cycle
Weight measurements and monitoring of corroded hangers at both ends of the sea pipelines are conducted
Professional organisations are engaged to estimate the remaining lives of the sea pipelines based on the corrosion status of the sea pipelines

Daily Monitoring of Indicators relating to Sea Pipelines

The pressure, temperature and flow at both ends of the sea pipelines are real-time monitored. If there was a sudden drop in pressure, a large temperature drop, or the flow difference greater than the daily difference range, an immediate pipeline inspection would be immediately
Real-time Monitoring conducted to search for the locations of spills.
• The major inspection modes are boats, speedboats, pickup trucks, and helicopters in special circumstances.

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CITIC Resources Holdings Limited 2019 Environmental, Social and Governance Report

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The crude oil storage tanks in the Seram block were constructed in accordance with the scheme to Precautionary prevent crude oil spills. In an event of crude oil spill, the outer walls of each crude oil storage tank Measures are able block all the leakage of stored crude oil, preventing crude oil spills from flowing out of the crude oil storage area.

6.3 Resource Usage

“Protecting and prudently using natural resources” is one of the core values of the Group. As an operator of the oil and gas industry with focus on the entire process (exploration, development, and production), the Group pays attention to improving resource management and supplementing with advanced technology and equipment in order to improve the utilization rate of energy and water.

The Group understands the importance of effective use of energy and water. Since many oilfields are located in remote areas or far away from land, the supply of energy and water in each oilfield is an operational challenge that the Group needs to face. The Group is committed to improving the efficiency of energy and water through technological transformation, equipment upgrades, and strengthening refined management of production and operation.

Fresh water from the natural environment around the oilfields is drawn for production and daily use. The oilfields’ water sources:

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Oilfields Water Sources
Karazhanbas oilfield River Groundwater
Wells on the
Municipal
Yuedong oilfield offshore
Water Supply
platforms
Seram Block Groundwater
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During the Reporting Period, KBM, Tincy Group, and CITIC Seram did not experience any issues related to water sourcing.

OurEnvironment 41

Response to the Issue

“Energy Usage & Efficiency”

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During the Reporting Period, Tincy Group carried out the following tasks for energy conservation and consumption reduction management:

By carrying out power-saving measures to reduce the operating current of electric heating, and lowering the operating current within the allowable range of heating temperature based on the physical properties of crude oil in different oil wells, the power-saving achievement is significant;
• Optimizing the electric heat tracing operation mode by specifically or intermittently operating/ stopping the electric heat tracing based on the operating conditions of equipment and processes, temperature range, cold and warm weather;

Through the implementation of the above measures, from January to October in 2019, the total Energy electricity consumption was 3,375.35 x 10[4] kWh, and the unit consumption per ton of liquid was 33.4kWh/t. Compared with the same period in 2018, the unit consumption per ton of liquid was decreased by 1.69kWh/t. Taking into account the increase in the volume of liquid, the total power consumption is reduced by 38.1 x 10[4] kWh.

In addition, Tincy Group has carried out comprehensive natural gas utilization projects on some offshore platforms. During the Reporting Period, Tincy Group’s natural gas consumption was 1.8156 million m[3] , all of which were used for steam injection boilers. The converted oil amount was about 1,790 tons, saving about 1,790 tons of fuel oil.

Tincy Group’s electricial workover rigs have an advantage of 35% energy saving compared with the conventional diesel-driven workover rigs. The total energy saving of the electricial workover rigs is 227,430kWh throughout the year.

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In the CITIC Seram’s energy efficiency plan, it is specified that diesel is replaced by natural gas to Energy power turbine generators in major production facilities. It not only utilizes natural gas in the oilfield, but also reduces the use of diesel.

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7 Our O eration p

The Group, aiming to have “Zero Accidents” in its workplaces, continues to improve and implement processes and systems for its HSE management. The Group also upholds a high standard of business integrity on all fronts of operation. All employees are required to observe a set of corporate policies and procedures and uphold high ethical standards when conducting business activities. Additionally, the Group continually improves its supply chain management. By exploring different means and channels to strengthen the cooperation with stakeholders, the Group aspires to build long-standing relationships on mutual trust, so as to fulfil social responsibility together with all business partners.

The material issues – “ Employees’ Health & Safety”, and “Anti-corruption” identified in the materiality assessment are particularly responded to in this section of this Report.

The Group strictly abides by relevant laws and regulations and establishes policies to ensure its operation is in compliance. If you would like to know more about the laws, regulations and policies, please refer to Appendix I of this Report.

7.1 Operation Safety

The Group strictly complies with the requirements of the local laws and regulations on production safety and occupational disease prevention, stands by the principle of “Safety First, Prevention-oriented, and Comprehensive Governance”, and establishes a safety concept that “All Accidents can be Prevented and Avoided,” laying a solid foundation for safety management. The Group has always attached great importance to the health and safety of employees and onsite workers. Through the establishment of sound policies, the Group also regulates employee personal protection in daily management, enhances the safety of the work environment, and ensures the safety and health of employees and onsite workers. In addition, the Group distributes HSE manuals and explains HSE guidelines and procedures to its employees and contractors. This can further enhance the HSE awareness of employees and contractors and effectively protect their personal safety.

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OurOperation 43

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Safety Risk at a Glance
Multi-party participation Emergencies Personal protection Equipment Maintenance
Due to the nature of the oil In response to emergencies T h e G r o u p r e q u i r e s The Company requests KBM,
and gas industry, the daily in oilfields, the Group also employees and other on- Tincy Group, and CITIC
operations of the three continuously improve site staff to wear qualified Seram to conduct in-depth
oilfields are undertaken by emergency management and p e r s o n a l p r o t e c t i v e control and risk assessment of
the Group’s employees and prevention mechanisms in equipment. Especially when key equipment and facilities,
the contractors. It must be consideration of the types of specific high-risk works are identify, prevent and control
ensured that the employees emergencies that may occur, engaged, the employees and hidden dangers in a timely
and contractors of the Group and enhances employees’ other on-site staff must wear manner. The necessary
have an understanding and contractors’ capacities designated labour protective security and detection
of the risks that the other of response for potential gear and safety equipment to systems have been installed
party faces at work, and hazards in workplaces by protect their personal safety. in the production equipment
relevant control measures giving work instructions, or facilities in its three oilfields.
shall be implemented in the warning instructions and When there is failure in
workplaces to ensure the training on specific safety pressure controls, temperature
safety of all personnel. topics. controls, liquid level controls,
safety valves, fire protection
As the contractors bear the systems, or gas detection
same health and safety risks systems are detected, alarm
as the Group’s employees signals are issued immediately
in the operating locations, to alert operators to pay
the Group’ HSE policies attention to their personal
and systems cover all the safety and to replace faulty
contractors, which means they parts in a timely manner.
are managed, restricted and
protected by the HSE policies
and systems, to ensure the
safety of the contractors’
employees and to prevent
harm to themselves and the
Group’s employees due to
improper operation of facilities.
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KBM, Tincy Group, and CITIC Seram have continuously promoted a sense of responsibility for “Who is in Charge and Should Take the Responsibility” in the oilfields. The Group strictly enforces the requirements of the safety management system, implements safety management operation procedures, and regularly conducts its supervision and inspection for equipment to minimize the risks of accidents.

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Basic operation safety management in the three major oil fields:

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KBM stipulates that all workplaces should be provisioned with corresponding technical specifications, safety operation manuals, and first aid kits, and corresponding emergency plans should be formulated. KBM also conducts extensive benchmarking and studies the operational management and provisions so as to better regulate the operational procedures for fire, civil construction, confined spaces, etc., and to provide relevant training for its employees and contractors.

The work-related accidents of employees and contractors happened in the Karazhanbas oilfield are recorded by both the Labour Protection Department and the Safety Technology Department. KBM’s safety managers and contractors discuss the accidents and take active measures to prevent accidents from happening again at each bi-weekly meeting held by the Safety Technology Department.

KBM has implemented the “Behaviour Observation Plan”. The plan can be summarized as follows: the workshop directors, the district heads, and the squad leaders can observe and record the work flow of employees in the workplaces under their control at any time, check whether the response measures comply with regulations, provide positive responses to the employees that carry out safety and compliance-related works, and provide guidance to the employees that carry out work in violation of safety regulations and causing potential risks and consequences. The employees responsible for observation are required to enter observation records into the database and system for subsequent analysis and further improvement.

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In order to safeguard the occupational health and safety of its employees and contractors as much as possible, Tincy Group organizes and conducts identification of onsite hazardous factors. Based on the result of the identification, Tincy Group has set up occupational hazardous factor notifications and production safety hazard notifications at each production site, and indicates the main hazard factors for each position and the corresponding protective measures that should be taken.

In addition, Tincy Group equips its employees and contractors with anti-static work clothes, goggles, ear plugs and other protective equipment, as well as protective gear such as anti-hydrogen sulphide positive pressure breathing apparatus, life jackets, lifeboats, etc. Based on the nature of each position, Tincy Group also arranges training on anti-hydrogen sulfide, well control, offshore work, HSE basic knowledge, etc., to ensure that its employees and contractors in different positions have all acquired the knowledge of health and safety related to their work.

Tincy Group has improved its HSE management system by formulating the “Occupational Health Management Procedures”. The “Occupational Health Management Procedures” states that the Group shall refer to the occupational health history of its employees and continuously monitor the health statuses of its employees through regular or irregular medical health checks and health-related data collection, and to analyse the relationships between changes to employees’ health and their exposure to occupational disease hazards. The results of health check-ups and data analysis are reported to all departments and employees in a timely manner so that preventive measures can be taken, in good timing, to protect the health of employees.

Tincy Group has established a work permit management system for contractors, and the contractors must obtain a permit in order to work in the Yuedong oilfield. In response to the particularities of the offshore platform in the Yuedong oilfield, Tincy Group provides its employees and contractors with relevant offshore safety training on a regular basis. Tincy Group also requires its contractors to establish a safety and environmental protection management system to strictly enforce industry specifications and standards, and to continuously provide the required health and safety related training for their employees.

Tincy Group formulated the “HSE Reward and Punishment Implementation Plan (Provisional)” and strictly examined its implementation in the HSE inspection to ensure the effectiveness of the HSE management system. The “HSE Reward and Punishment Implementation Plan” (Provisional)” aims to change employees’ risk awareness and advocates that its employees shall proactively pay attention to safety.

OurOperation 45

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CITIC Seram’s internal safety committee is responsible for managing operational safety issues and is required to implement the HSE management system and the contractor safety management system to ensure the safety in the Seram block.

CITIC Seram’s personnel shall:

Conduct regular inspections of its firefighting, safety, and crude oil spill emergency equipment to ensure that HSE equipment is readily available when needed;
Conduct HSE drills and training to ensure that all personnel are capable of handling emergencies;
Conduct external and internal HSE training for CITIC Seram’s employees and contractors;
Conduct HSE promotion programs for all personnel involved in CITIC Seram’s operation;
Support external audits from the government departments; and
Report, investigate, and document HSE events to prevent incidents from reoccurring and to develop corrective and improvement measures.

In addition, CITIC Seram arranges occupational health checks for its employees and contractors every year. The professional medical team analyses the result recorded in medical examination reports to establish occupational health surveillance files and to develop health management plans.

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CITIC Resources Holdings Limited 2019 Environmental, Social and Governance Report

Response to the Issue

“Employees’ Health & Safety”

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KBM takes a zero-tolerance attitude towards drinking and drugs. During the Reporting Period, KBM specifically developed and implemented the “KBM’s Policy on Alcohol and Drugs” and the “Regulations on the Prevention of Alcohol and Drug Diffusion”. The policy Addressing and the regulation were promoted through internal newspapers and social networks. When Non-traditional KBM conducts personnel recruitment and contractor qualification review, the Safety Section, Security Risks the Human Resources Department, the Labour Unions, the Contractors and the relevant government departments collaborate to review whether the persons are from criminal groups, whether they show tendency of extremist and unconventional religious genres, eliminating non-traditional security threats at the source.

Health Promotion

KBM promotes a healthy lifestyle through various channels. KBM has a special section in the monthly internal newspaper, publishing small articles on reasonable diet, sports and health care, heatstroke prevention and cooling, diet tips during Ramadan, etc., and awards information on employee sports and recreation activities. Employees imperceptibly pay attention to health care.

KBM has also installed software for regular eye exercises on employees’ office computers, urging employees to pay attention to their eyesight health. A blood pressure monitor is also installed in the office corridor to monitor employees’ physical condition at any time.

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OurOperation 47

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Tincy Group completed the preparation and review of navigation safety assurance schemes for
submarine cable control and layout according to the new policy requirements of the Maritime
Maritime safety
Safety Administration. Tincy Group coordinated with the Maritime Safety Administration to
complete the water surface and underwater construction permits and issue navigation warnings.
On the basis of daily inspections on each production facility and weekly self-inspection, Tincy
Group organizes monthly systematic HSE supervision and inspection on each production facility.
In addition, considering special seasons and specific times, supervision and inspection are
conducted before the onset of spring, rainy seasons, winter.
HSE Supervision and
Inspection
During the Reporting Period, Tincy Group discovered a total of 426 problems in the supervision
and inspection throughout the year. Except for 6 items that were not completed due to
incomplete equipment procurement, all other problems were rectified. The completion rate of
problem rectification reached 98.6%.
In order to further improve the offshore oil safety management level, during the Reporting
Period, Tincy Group entrusted safety technical consultants to provide safety consultation
services to Yuedong Oilfield. It aimed to use the professional technology and rich practical
experience of experts in the industry to conduct a comprehensive, systematic and in-depth on-
site safety inspection and diagnosis of Yuedong Oilfield from a more professional, higher-level,
and more authoritative perspective.
• Judging the compliance of offshore oil and gas exploitation activities in Yuedong Oilfield
with national laws, regulations and standards
• Identifying potential risks and hidden dangers in production safety
Experts’ Inspection
• Searching for the weaknesses in daily safety management
• Providing scientific, reasonable, and effective safety measures and suggestions
• Instructing Tincy Group to carry out work safety-related risk control
A total of 119 issues were found in this diagnosis. The expert group prepared a table listing
safety measures against the identified issues. Tincy Group will formulate corrective measures
based on the identified problems in a timely manner to ensure safe production. Tincy Group
planned to organize the second expert consultation on electrical and instrumentation topics in
February 2020 (which has been successfully completed as planned).
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	During the Reporting Period, CITIC Seram conducted an occupational health assessment,
Safety Inspection	which included noise, lighting, smoke, radiation, vibration and other aspects. CITIC Seram will
	take improvement actions based on the analysis results.

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CITIC Resources Holdings Limited 2019 Environmental, Social and Governance Report

7.2 Market Practice

The Group’s business footprint has spread across many countries or regions and strictly complies with laws and regulations relating to sales guarantees and credit management, oil production and quality control, privacy and information security, as well as trademarks, patents, intellectual property, etc. The concerned parties are required to sign confidentiality agreements for the protection of confidential data or proprietary information when engaging the sale and transportation of crude oil. Unless written consent is obtained from both concerned parties, no such data or information shall be disclosed to any third parties.

The Group has established codes and systems to strictly regulate the daily operation and management so as to eliminate all kinds of behaviours and approaches that may lead to corruption, fraud and bribery. The Company also conducts internal audits on its subsidiaries annually to ensure that the subsidiaries’ operation and their employees’ behaviours are in compliance with laws and regulations.

The Company understands the importance of advertising, and attaches importance to the Company’s benefits of advertising, thus cooperating with professional consultants to conduct advertisement. However, as the Group is mainly engaged in oil and gas exploration and development, it does not promote through commercial advertisement.

Basic anti-corruption management in the three major oil fields:

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KBM has developed documents, such as business process passports and inter-departmental collaboration procedures, to clarify the duties, rights, and obligations of each department. KBM has also effectively prevented potential risks, including bribery, extortion, fraud, and money laundering, through strengthened supervision over procurement, sales, taxation and compliance.

KBM has a dedicated hotline for all employees to report illegal activities in a timely manner.

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According to the Yuedong oilfield’s policy, employees are prohibited from visiting or contacting any prospective contractors or suppliers prior to tendering or requesting for quotations without authorized approval. When dealing with unfamiliar services or supplies, centralised arrangements are made by Tincy Group to inquire and communicate with prospective contractors or suppliers, in order to determine an appropriate procurement strategy.

If an interview with a bidder is necessary, the interview shall take place during working hours at a specified office in the presence of at least two business and technical bid evaluation staff members, upon the approval obtained from an authorised officer;
The entire process of tendering shall be filmed and saved in an electronic format. Audio recording shall also be kept for all negotiations, and electronic files shall be saved for record; and
Unless approved by an authorised officer, no employee may meet any tenders outside working hours and the specified offices for any matter related to tendering.

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CITIC Seram strictly abides by the relevant laws and regulations of Indonesia and strictly regulates the daily operation and management according to the requirements of the Group to prevent illegal activities. CITIC Seram also regularly receives internal audits from the Company to ensure legal compliance.

OurOperation 49

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Response to the Issue

“Anti-corruption”

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Management

During the Reporting Period, the KBM’s Company Management Committee formulated and approved the “Karazhanbas Petroleum Corporation Anti-Corruption Regulations”. The Regulations are internal documents formulated in accordance with Kazakhstan National Anti-Corruption Law and KBM’s Articles of Association. It is used to regulate the conduct of employees and internal business departments in the process of communication with state agencies and external companies. KBM is committed to a cultural of zero tolerance corruption and to maintain a transparent and ethical corporate image.

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Risk Warning

Based on the actual corporate situation, Tincy Group divides the corruption risk into three levels, namely A, B and C. According to different levels, it implements a hierarchical system of management, supervision, and responsibility. The risk warning mechanism is managed and implemented by the main leaders and in-charge leaders of subdivision.

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Suppliers

CITIC Seram ’s Procurement Committee members and staff must sign a statement of integrity and abide by the standards of conduct in their daily work. They must always remain independent and impartial, and avoid being driven by any interest in order to maintain the credibility of CITIC Seram.

50 CITIC Resources Holdings Limited 2019 Environmental, Social and Governance Report

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7.3 Supply Chain & Product Quality Management

The Group recognizes the importance of the management of supply chain and product quality to the operations of the Group. The Group has always adhered to the concept of “Working and Growing Hand in Hand”. The Group maintains a close relationship with suppliers and contractors and looks forward to enhancing its performance of sustainable development with them together. In addition, the Group manufactures and supplies products in strict accordance with the relevant laws and regulations of the quality management and customer requirements in the operation locations to ensure that customer requirements are met.

The Group’s supply chain mainly involves suppliers and contractors, while the Group’s products are mainly sold to oil buyers. In terms of supply chain, the Group focuses on improving its management regarding environment, procurement, labour, and HSE. For the customers of the Group, the Group focuses on enhancing the management of product quality.

Supply Chain Management

The Group expressly requires its suppliers and contractors to abide by and implement applicable laws and regulations in their operation and ensures that all its supply chain management and measures comply with relevant environmental and social requirements.

Supply Chain at a Glance

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Contractors
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Suppliers

Due to the nature of the oil and gas industry, the contractors’ employees need to work with the Group’s employees in the operating locations,

As the contractors bear the same health and safety risks as the Group’s employees in the operating locations, the Group’ HSE policies and systems cover all the contractors, which means they are managed, restricted and protected by the HSE policies and systems, to ensure the safety of the contractors’ employees and to prevent harm to themselves and the Group’s employees due to their improper operation of facilities.

The suppliers only deal with the supply of services, materials and equipment and are not required to directly participate in the oilfield-related work.

OurOperation

Basic supplier and contractor management in the three major oil fields:

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KBM’s procurement work observes to the laws and regulations in the operation location, and KBM strictly selects suppliers and contractors. The terms of labour safety, environmental protection and emergency handling in KBM’s standard contract are applicable to both parties. Relevant measures are taken against suppliers who violate the terms of the contract, and they could be even included in the list of non-honest suppliers.

KBM signed a formal contract with its contractors to ensure that the contractors understand and execute the relevant HSE requirements. An application for “Safety, Labour and Environmental Protection Requirements” is included in the tendering documents for tendering and procurement relating to construction and services. When signing the contracts, the contractors must confirm and sign the “Safety, Labour and Environmental Protection Requirements” attached in the contract.

In order to further optimize corporate operational processes and management, KBM has established a corporate management committee to review and approve prioritised procurement plan and long-term procurement plan for its supplies, construction, and service to avoid stagnation of production caused by the untimely procurement of materials.

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According to the regulations, Tincy Group requires its contractors to sign the “Construction Safety and Production Management Agreement” in the contracts, and also requires its supplier to abide by the terms of the contract regarding health, safety production and environmental protection.

Tincy Group also provides HSE information to its contractors, requiring them to establish safety and environmental management systems, implement industry codes and standards, and continuously train its employees.

Tincy Group optimised the overall development plan of the oilfield according to the requirements of the national safety supervision management, stipulating that the new drilling project only accepts tenders from professional drilling companies with maritime safety production licenses, and strengthening the management of its contractors’ qualities in the social aspect.

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CITIC Seram requires its contractors and suppliers to comply with the terms of the contract regarding health, safe production and environmental protection.

CITIC Seram also provides contractors with HSE plans, personal protective equipment, training, etc.

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CITIC Resources Holdings Limited 2019 Environmental, Social and Governance Report

The following is the regional distribution of suppliers and contractors of the Group during the Reporting Period:

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34%
55%
11%
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The Percentage of the Group's Suppliers and Contractors by Region

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Mainland China
Hong Kong
Regions Abroad
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2% 1%
9%
2%
86%
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The Percentage of the Group's Suppliers and Contractors Abroad by Region

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Kazakhstan
Russia
Indonesia
Australia
Taiwan
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OurOperation

Quality Management

The Group strives to provide its consumers with clean, high-quality and diversified products and services by continuously improving its quality management with focuses on standard revision, quality supervision and inspection, quality culture building, etc. The Group also provides its consumers with products that meet legal requirements and standards in a responsible manner. In the process of providing products, the Group considers the impacts of its products on consumers and ensures its products’ quality and safety.

Basic quality management in the three major oil fields:

KBM established its corporate technology management committee to better formulate oilfield medium-and long-term development plans and introduce new technologies to ensure the continuous improvement of product quality.

Tincy Group has kept improving the quality assurance procedures and strictly controlled the quality of crude oil. A two-tier inspection system has been deployed to assure product quality; internal sampling and testing are conducted before engaging third parties for further quality inspection. Independent testing agencies have been engaged to jointly examine oil quality before delivery. The positive/negative deviation between the water testing results shall not exceed 0.2%. In the event of a deviation exceeding 0.2%, the oil discharging operation must be suspended for re-testing. The management may visit the production site without prior notice to observe onsite sampling, and to carry out random checks at the laboratories on both the testing procedures and past test data.

CITIC Seram produces goods based on the laws and regulations in the operation location and customer requirements. Goods are recalled in accordance with laws and regulations when necessary.

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CITIC Resources Holdings Limited 2019 Environmental, Social and Governance Report

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8 Our Communit y

The development of the Group cannot be separated from the participation and support from the communities, and in return it can have a positive impact on the Group by contributing to the community. The Group proactively listens to and responds to the expectations from the society at the operation locations, as the Group believes it enables all parties to actively resolve potential conflicts and work together to build a sustainable community. The Group is willing to take the role of corporate citizenship actively, and proactively promote its subsidiaries and joint ventures to respond to the concerns of the community and other major stakeholders with actions to fulfil their commitments. In the course of operation, the Group complies with the relevant laws and regulations in the operation location and minimizes the potential adverse impacts on the community. The Group is passionate about social welfare and promotes community co-development, sharing its corporate development achievements with the society.

Since Yuedong Oilfield is located offshore, and the onshore terminal processing station is located in the industrial zone, there are no communities nearby, so Tincy Group does not have direct community investment opportunity. Karazhanbas oil field is located in the west of Kazakhstan. It is a giant onshore heavy oil field located on the shore of the Caspian Sea, and villages and ports can be found nearby; the Seram Block is located on Seram Island, and there are villages nearby.

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As a company that actively undertakes social responsibilities, KBM arranges a certain amount of budget on an annual basis for charitable donations and community development. KBM understands the needs of community development through communication with the government and local communities in the operation locations, focusing on helping disadvantaged groups and supporting education, sports, culture and health care development.

During the Reporting Period, KBM’s most important community investment activities were:

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Supporting cultural and
Developing local social facilities Helping disadvantaged groups
sports development
• The sports ground donated by • Visited poor families • F u n d i n g t h e S p o r t s
the community has been put • Expressed solicitude to World Association
into use War II veterans • Funded the “Future-oriented”
• KBM dispatched mobile project and related book
equipment to clean up the publishing
trash near Taushyk village;
KBM donated 45 tons of
waste oil pipes to villages
and towns neighbouring the
oilfield for free, which were
used for making sports field
fences, surrounding livestock
drinking water tanks, using as
agricultural irrigation pipes and
cemetery fences
• Funded medical center
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OurCommunity

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KBM conducted a bicycle charity race
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KBM dispatched mobile equipment to
clean up trash near Taushyk village
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KBM personnel expressed solicitude to
World War II veterans
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KBM donated bicycles to children from
poor families during the bicycle charity race
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The sports ground donated by KBM to
Shevchenko port has been put into use
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KBM young employees donate food to poor families

CITIC Resources Holdings Limited 2019 Environmental, Social and Governance Report

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CITIC Seram updates its community relationship program every year and approves a reasonable budget for each project in the program to actively assist in addressing community concerns.

During the Reporting Period, CITIC Seram’s most important community investment activities were:

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Developing local Supporting cultural and Supporting groups affected by
Helping disadvantaged groups
social facilities sports development natural disasters
• Funded the renovation of • Funded Bule student dormitory • Funded Kobi government • Donated to the Ambon,
football fields in Ambon to celebrate Indonesia ’s which was affected by the
• Provided heavy equipment anniversary earthquake
for cleaning the bus terminal • Funded Bula government to
and the new traditional celebrate Bula anniversary
Gondar market and conduct volleyball
match
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OurCommunity

Appendix 1 The Material laws and regulations that the Group complied with during the Reporting Period

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Laws and regulations corresponding to the The Group’s policies and regulations to ensure aspects of the Environmental, Social and compliance with applicable laws and regulations Performance Governance Reporting Guide[1, 2, 3] corresponding to the aspects[4, 5] A. Environment Aspect A1: Emissions KBM Kazakhstan “Environmental monitoring and control system” Kazakhstan Environmental Protection Regulation “Annual Environmental Protection Work Plan” Kazakhstan Land Regulation “Production Environmental Management Plan” Kazakhstan Water Regulation “Emergency Plans”[B2] China “Accident Notification Procedure and Environmental Protection Law of Crisis Management Code”[B2] the People’s Republic of China Tincy Group significant impact on the Group. Environmental Protection Tax Law of “Environmental Factor Identification and the People’s Republic of China Evaluation Control Procedures”[A3] Atmospheric Pollution Prevention and “Hazard Identification and Risk Assessment Control Law of the People’s Republic of China Control Procedures”[A3] Law of the People’s Republic of China on “Emergency Preparedness and Response the Prevention and Control of Management Procedures”[A3, B2] Environment Pollution Caused by Solid Wastes “Accidents and Incident Handling Control Marine Environment Protection Law of Procedures”[A3, B2] the People’s Republic of China “Comprehensive and Special Emergency Emergency Response Law of Response Plans”[A3, B2] the pollution discharge fees. the People’s Republic of China “Emergency Plans for Emergent Environmental Indonesia Incidents at the Onshore Terminal Processing Environmental Protection and Management Law of Station”[A3] the Republic of Indonesia “Hazardous Waste Management Handbook Waste Management Law of the Republic of CITIC Seram Indonesia “Environmental Management” Group and Tincy Group. Forestry Law of the Republic of Indonesia “Incident Reporting and Investigation”[B2] “HSE Policy”[B2] Aspect A2: Use of Resources KBM “Associated Gas Application Plan” “Wastewater Resource Utilization Plan” Not Applicable Tincy Group Not Applicable “Power Saving Management Regulations” CITIC Seram “Management of Changes”

During the Reporting Period, the Group did not experience any violation of laws and regulations relating to the Group’s air emissions and GHG emissions, discharges into to water and land, waste generation and disposal that had a significant impact on the Group.

Since the implementation of the Environmental Protection Tax Law of the People’s Republic of China on January 1, 2018, Tincy Group has to pay the environmental pollution tax and the sewage discharge environmental tax in accordance with the law, comparing with the past that Tincy Group only had to pay the pollution discharge fees.

During the Reporting Period, Tincy Group paid the environmental protection tax on time, and there was no violation that had a significant impact on the Group and Tincy Group.

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Aspect A3: The Environment and Natural Resources	Aspect A3: The Environment and Natural Resources	Aspect A3: The Environment and Natural Resources
Not Applicable	KBM “Beautiful Oilfield Construction Plan” “Annual Oil Well Well Holes Inspection Plan” “Annual Valves and Process Pipelines Inspection Plan” “Annual Process Equipment Flaw Detection and Inspection Plan” “Annual Crude Oil Processing and Processing Workshops’ Process Pipelines and Valves Inspection Plan” Tincy Group “Preparation Plan for the Decommission of the Offshore Oil and Gas Production Facilities in the Yuedong Oilfield in the Hainan-Yuedong Cooperation Block” “Special Emergency Plan for Oil Pipeline Ruptures” “Tincy’s Integrity Management Document for the Sea Pipelines During Operation Phase” CITIC Seram “Afforestation Program”	Not Applicable

Appendix

Laws and regulations corresponding to the aspects of the Environmental, Social and Governance Reporting Guide1, 2, 3	The Group’s policies and regulations to ensure compliance with applicable laws and regulations corresponding to the aspects4, 5	Performance
B. Social
Aspect B1: Employment
Kazakhstan Kazakhstan Labour RegulationB4, B6 China Labour Law of the People’s Republic of ChinaB2，B4 Labour Contract Law of the People’s Republic of China Social Insurance Law of the People’s Republic of China Labour Dispute Mediation and Arbitration Law of the People’s Republic of China Indonesia Labour Law of the Republic of Indonesia*B4 Trade Union/Labour Union Law of the Republic of Indonesia	CITIC Resources “Share Option Scheme” “Contribution Retirement Benefit Schemes” “Employee Handbook” “Guidelines on Business Travel Reimbursement Procedures” “Regulation for Managing Office Items” “Management Measures for Employee Holiday Compensation” KBM “2019-2021 Collective Contract with Employees” “Regulations for Material Assistance to KBM’s In-service Employees and Retired Persons” Tincy Group “Tincy Group Management Manual”B4 “Central Pension Scheme” CITIC Seram “Company Policy”B3, B4, B8	During the Reporting Period, the Group did not receive any information about laws and regulations that had a significant impact on the Group and are related to employment.
Aspect B2: Health and Safety
Kazakhstan Kazakhstan Occupational Safety and Health Regulation China Work Safety Law of the People’s Republic of China Law of the People’s Republic of China on the Prevention and Control of Occupational Diseases Emergency Response Law of the People’s Republic of China Interim Measures for Administration of Outsourcing Non-Coal Mining Project Safety Indonesia Occupational Safety and Health Law of the Republic of Indonesia	KBM “2018 Work Safety Conditions and Production Process Safety Measures Plan” “Behaviour Observation Plan” Tincy “Occupational Health Management Procedures” “HSE Rewarding and Punishment Implementation Plan (Provisional)” “Working License Management Procedures” “Operational Safety Analysis Management Regulations” “Energy Isolation Safety Management Regulations” “Project Permit Management Regulations” “HSE Hazard Report Form” CITIC Seram “Project HSE Management”*B5	During the Reporting Period, the Group did not receive any complaints about occupational health and safety that had a significant impact on the Group.

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CITIC Resources Holdings Limited 2019 Environmental, Social and Governance Report

Laws and regulations corresponding to the aspects of the Environmental, Social and Governance Reporting Guide1, 2, 3	The Group’s policies and regulations to ensure compliance with applicable laws and regulations corresponding to the aspects4, 5	Performance
Aspect B3: Development and Training
Not Applicable	CITIC Resources “Employee Training and Development Policy” KBM “Annual Employee Training Plan” Tincy Group “Annual Employee Training Plan”	Not Applicable
Aspect B4: Labour Standards
Kazakhstan Kazakhstan Men’s and Women’s Equal Rights and Opportunities Guarantee Law China Law of the People’s Republic of China on the Protection of Women’s Rights and Interests Law of the People’s Republic of China on the Protection of Minors Provisions on the Prohibition of Using Child Labor	KBM KBM clearly defined the welfare policies for female employees on maternity leave and child-rearing in the “2019-2021 Collective Contract with Employees”.	During the Reporting Period, the Group did not have any cases involving illegal employment of child labour and forced labour that had a significant impact on the Group.
Aspect B5: Supply Chain Management
Not Applicable	KBM “Safety, Labour and Environmental Protection Requirements” Tincy Group “Construction Safety and Production Management Agreement” CITIC Seram “HSE Management of Contract Services”	Not Applicable

Appendix 61

Laws and regulations corresponding to the aspects of the Environmental, Social and Governance Reporting Guide[1, 2, 3]

The Group’s policies and regulations to ensure compliance with applicable laws and regulations corresponding to the aspects[4, 5]

Performance

Aspect B6: Product Responsibility

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Kazakhstan

Kazakhstan Personal Information Protection Law Kazakhstan Trademarks, Service Marks and Appellations of Origin Law Kazakhstan Oil General Technical Specifications

China

Trademark Law of the People’s Republic of China Patent Law of the People’s Republic of China Tort Law of the People’s Republic of China Anti-Unfair Competition Law of the People’s Republic of China*[B7]

Indonesia

Indonesian Supply Chain Management Supervision Regulations Trademark and Geographical Indications Law of the Republic of Indonesia

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KBM

“Confidential Information Management Regulations” “Rules for Handling, Protecting and Storing JSC Karazhanbasmunai Employee Personal Records” Tincy Group

Tincy Group fulfills its confidentiality obligations in accordance with the terms of contract with its customers in relation to the confidentiality of the information.

Tincy Group produces and supplies products in accordance with the quality-related requirements of contracts with its customers.

CITIC Seram

CITIC Seram strictly maintains customer information, maintains intellectual property rights as required, and recalls products as required by Indonesian Supply Chain Management Supervision Regulations.

During the Reporting Period, the Group was not aware of any incidents of non-compliance with regulations and voluntary codes concerning the provision and use of the Group’s products and services, which cover product and service information and labelling, marketing communications including advertising, promotion and sponsorship, and property rights including intellectual property rights that had a significant impact on the Group.

During the Reporting Period, the Group produced and supplied products in strict accordance with the relevant laws and regulations of the quality management in the operation locations and customer requirements, and there were no incidents of product recalling that had a significant impact on the Group.

CITIC Resources Holdings Limited 2019 Environmental, Social and Governance Report

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Laws and regulations corresponding to the The Group’s policies and regulations to ensure
aspects of the Environmental, Social and compliance with applicable laws and regulations Performance
Governance Reporting Guide [1, 2, 3] corresponding to the aspects [4, 5]
Aspect B7: Anti-corruption
KBM
Kazakhstan Internal communication plan
Kazakhstan Anti-Corruption Regulations Reporting System
China Tincy Group During the Reporting Period, the Group
Criminal Law of the People’s Republic of China “CITIC Group’s Reporting Implementation Measures did not receive any relevant laws and
Anti-Money Laundering Law of the People’s Republic Disciplinary Inspection and Visits” [#] regulations relating to the prevention
of China “CITIC Group’s Implementation Opinions on the of bribery, extortion, fraud, and money
Indonesia Clue Management of Discipline Inspection and laundering, and did not received any
Elimination of Corruption Law of the Republic of Supervision” [#] case relating to internal employees
Indonesia CITIC Seram involved in bribery, extortion, and money
Money Laundering Law of the Republic of Indonesia CITIC Seram strictly abides by the relevant laws and laundering.
Elimination of Bribery Regulation of the Republic of regulations of Indonesia and strictly regulates the
Indonesia daily operation management process according to
the requirements of the Group to prevent illegal acts.
Aspect B8: Community Investment
KBM
“Annual Work Plan”
Not Applicable Not Applicable
CITIC Seram
“Annual Community Relations Work Plan”
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1 Particular laws cover several topics provisioned in the Aspects; these laws are marked with an asterisk and codes of Aspects being covered.

2 There is a limitation to disclose all laws and regulations that the Group complies with, and only laws and regulations that have a significant impact on the Group are disclosed.

3 The Kazakh laws and regulations are originally written in Kazakh, and the Indonesian laws and regulations are originally in Indonesian.

4 Particular policies and regulations cover several topics provisioned in the Aspects; these laws are marked with an asterisk and codes of Aspects being covered.

5 Particular policies and regulations that the Company strictly observes are derived from CITIC Group; these policies and regulations are marked with a hash.

Appendix

Appendix 2 Key Performance Indicators

2017 – 2019 Social and Environmental Related Key Performance Indicators (“KPI”):

Social Aspect

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KPI Unit 2017 2018 2019
In-service Employees
Number of In-service Employees by Region
Kazakhstan 4,208 4,144 4,099
Mainland China 129 130 140
Indonesia 75 76 243
Australia 52 53 48
Hong Kong 50 49 34
Number of In-service Employees by Gender
Female Employees 438 428 415
Male Employees 4,076 4,024 4,149
Number of In-service Employees by Age
Below or Equal 30 620 475 333
30 – 50 2,811 2,825 2,968
Above or Equal to 50 1,083 1,152 1,263
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CITIC Resources Holdings Limited 2019 Environmental, Social and Governance Report

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KPI Unit 2017 2018 2019
Resigned Employees
Number of Resigned Employees by Region
Kazakhstan 134 116 92
Mainland China 14 2 0
Indonesia 30 1 10
Australia 10 15 11
Hong Kong 8 9 12
Number of Resigned Employees by Gender
Female Employees 33 27 19
Male Employees 163 116 106
Number of Resigned Employees by Age
Below or Equal to 30 25 12 9
30 – 50 109 62 43
Above or Equal to 50 62 69 73
Employee Training
The training time of the personnel Hours 58 54 37
received the training
Work Safety
Number of Injuries Required to be Reported (Work injury leave > 7 days)
KBM Cases 1 2 2
Tincy Group Cases 0 0 0
CITIC Seram Cases 0 0 0
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Appendix 65

KPI	Unit	2017	2018	2019
Suppliers and Contractors
Number of Suppliers and Contractors by Region Mainland China		410	437	487
Hong Kong		45	45	151
Region Abroad		687	731	796
Kazakhstan		582	601	687
Indonesia		52	78	71
Russia		16	14	14
Australia		12	13	13
Taiwan		9	9	7
Switzerland		2	2	0
United States		3	3	1
United Kingdom		2	2	2
Others Community Investment		9	9	1
Resources Used in the Following Areas	10,000RMB	95	131	173
Supporting Disasters	10,000RMB	0	5	2
Supporting Disadvantaged Groups	10,000RMB	22	18	27
Supporting Education	10,000RMB	4	7	4
Supporting Sports	10,000RMB	0	23	18
Supporting Cultural Activities	10,000RMB	10	20	22
Supporting Healthcare	10,000RMB	0	27	31
Supporting Poverty Alleviation	10,000RMB	0	0	10
Others	10,000RMB	59	31	59

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CITIC Resources Holdings Limited 2019 Environmental, Social and Governance Report

Environmental Aspect[1]

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KPI Unit 2017 2018 2019
Air Emission
NOx Emission Metric tons 7.57 76.83 68.40
Intensity of NOx Emission Metric tons 2.61E-06 2.67E-05 2.67E-05
per barrel of
crude oil
SO2 Emission Metric tons 14.83 12.03 23.73
Intensity of SO2 Emission Metric tons 5.11E-06 4.18E-06 9.27E-06
per barrel of
crude oil
PM Emission Metric tons 2.02 13.38 18.79
Intensity of PM Emission Metric tons 6.95E-07 4.65E-06 7.34E-06
per barrel of
crude oil
GHG
Total GHG Emission Metric tons 61,468.74 83,235.88 83,556.74
Intensity of Total GHG Emission Metric tons 0.02 0.03 0.03
per barrel of
crude oil
Scope 1
GHG Emission from Stationary and Mobile Metric tons 21,998.12 41,187.49 33,016.56
Sources
Flaring Emission Metric tons 7,457.54 9,782.43 9,784.35
Scope 2
Indirect GHG Emission from Purchased Metric tons 32,013.08 32,265.97 32,689.92
Electricity
Indirect GHG Emission from Purchased Steam Metric tons Not Applicable [4] Not Applicable [3] 8,065.91
Hazardous Waste
Generated and Treated Oil Sand Amount Metric tons 1,474.39 2,967.33 895.70
Intensity of Generated and Treated Oil Metric tons 0.0005 0.001 0.0004
Sand Amount per barrel of
crude oil
Generated and Treated Drilling Waste Amount [5,6] Metric tons Not Applicable [7] Not Applicable [7] 8,359.40
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1 The Group has many different contractors. Only the essential contractors are listed above.

2 In the materiality assessment, the “Directors” ‘s and “Senior Management” ‘s opinions represented the “Importance to the Group”; the views of “Governments and Regulators”, “Employees”, “Customers”, “Business Partners”, “Suppliers”, and “Contractors” represented the “Importance to Stakeholders”.

3 Ranking is based on the summation of ranked scores for “Importance to Stakeholders” and “Importance to the Group”. Highlighted issues represent those that have attained scores of 5 or above for both dimensions.

4 Since 2019, steam is purchased in Tincy Group’s onshore terminal processing station to replace crude oil heating boilers.

Appendix

KPI	Unit	2017	2018	2019
Non-hazardous Waste Generated and Treated Domestic Waste Amount	Metric tons	286.50	448.30	678.10
Intensity of Generated and Treated Domestic Waste Amount	Metric tons per barrel of crude oil	0.0001	0.0002	0.0003
Treated Metal Waste Amount	Metric tons	262.48	0.00	0.00
Intensity of Treated Metal Waste Amount Wastewater Treated Industrial Oily Wastewater Discharge	Metric tons per barrel of crude oil Metric tons	0.0001 549,515.00	Not Applicable8 709,727.00	Not Applicable8 792,842.00
Domestic Sewage Discharge	Metric tons	6,286.88	6,395.92	5,719.85
Total Sewage Discharge	Metric tons	555,801.88	716,122.92	798,561.85
Intensity of Total Sewage Discharge Direct Energy	Metric tons per barrel of crude oil	0.19	0.25	0.31
Associated Gas Consumption	m3	10,111,200.34	9,507,581.00	7,142,052.00
Intensity of Associated Gas Consumption	m3 per barrel	3.48	3.30	2.79
	of crude oil
Gasoline Consumption	Litre	44,870.00	46,550.00	48,100.00
Intensity of Gasoline Consumption	Litre per	0.015	0.016	0.019
	barrel of
	crude oil
Diesel Consumption	Litre	13,085.20	13,356.00	12,050.00
Intensity of Diesel Consumption	Litre per	0.005	0.005	0.005
	barrel of
	crude oil
Crude Oil Consumption	Metric tons	2,648.82	6,743.56	5,719.85
Intensity of Crude Oil Consumption	Metric tons	0.0009	0.002	0.002
	per barrel of
	crude oil

5 Drilling waste includes drilling cuttings and drilling fluid.

6 The newly-drilled wells during the Reporting Period do not necessarily become production wells. The newly-drilled wells have limited impact on the crude oil production within the Reporting Period, therefore the intensity is not disclosed for now.

7 Tincy Group did not generate any drilling wastes in 2017 and 2018.

8 Tincy Group did not generate any metal wastes in 2018 and 2019.

9 Since 2019, steam is purchased in Tincy Group’s onshore terminal processing station to replace crude oil heating boilers.

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KPI Unit 2017 2018 2019
Indirect Energy
Purchased Electricity Consumption kWh 41,206,176.00 41,531,688.00 42,077,383.00
Intensity of Purchased Electricity Consumption kWh per 14.19 14.42 16.44
barrel of
crude oil
Purchased Steam Consumption Metric tons Not Applicable [9] Not Applicable [8] 26,836.30
Intensity of Purchased Steam Consumption Metric tons Not Applicable [8] Not Applicable [8] 0.01
per barrel of
crude oil
Water Resources
Water Sourced from Wells Metric tons 827,494.00 801,085.00 719,429.00
Water Sourced from Municipal Water Supply Metric tons 19,711.00 13,778.00 11,785.00
Total Water Usage Metric tons 847,205.00 814,863.00 731,214.00
Intensity of Total Water Usage Metric tons 0.29 0.28 0.29
per barrel of
crude oil
Greening
Newly Planted Trees 20.00 20.00 0 0
Newly Laid Lawn m [2] 1,600 0 0
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1 The disclosure scope of environmental key performance indicators includes the onshore terminal processing station and offshore platforms of Tincy Group.

Appendix

Appendix 3 SEHK ESG Reporting Guide Index

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Subject Areas, Aspects, General Disclosures and KPIs
“Comply or explain” Provisions
Section
A. Environment
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Aspect A1: Emission	General Disclosure Information on: (a) the policies; and (b) compliance with relevant laws and regulations that have a significant impact on the issuer relating to air and greenhouse gas emissions, discharges into water and land, and generation of hazardous and non-hazardous waste. Note: Air emissions include NOx, SOx, and other pollutants regulated under national laws and regulations. Greenhouse gases include carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulphur hexafluoride. Hazardous wastes are those defined by national regulations.	Environmental Management Appendix 1 The Material laws and regulations that the Group complied with during the Reporting Period
	KPI A1.1 The types of emissions and respective emissions data. KPI A1.2 Greenhouse gas emissions in total (in tonnes) and, where appropriate, intensity (e.g. per unit of production volume, per facility). KPI A1.3 Total hazardous waste produced (in tonnes) and, where appropriate, intensity (e.g. per unit of production volume, per facility). KPI A1.4 Total non-hazardous waste produced (in tonnes) and, where appropriate, intensity (e.g. per unit of production volume, per facility).	Appendix 2 Key Performance Indicators
	KPI A1.5 Description of measures to mitigate emissions and results achieved. KPI A1.6 Description of how hazardous and non-hazardous wastes are handled, reduction initiatives and results achieved.	Environmental Management

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Subject Areas, Aspects, General Disclosures and KPIs
“Comply or explain” Provisions
Section
A. Environment
Aspect A2: General Disclosure Resources Usage
Use of Resources Policies on the efficient use of resources, including energy, water and other raw Appendix 1 The Material laws
materials. and regulations that the Group
Note: Resources may be used in production, in storage, transportation, in buildings, complied with during the
electronic equipment, etc Reporting Period
KPI A2.1 Direct and/or indirect energy consumption by type
(e.g. electricity, gas or oil) in total (kWh in ’000s)
and intensity (e.g. per unit of production volume, per Appendix 2 Key Performance
facility). Indicators
KPI A2.2 Water consumption in total and intensity (e.g. per unit
of production volume, per facility).
KPI A2.3 Description of energy use efficiency initiatives and
results achieved.
KPI A2.4 Description of whether there is any issue in sourcing Resources Usages
water that is fit for purpose, water efficiency initiatives
and results achieved.
KPI A2.5 Total packaging material used for finished products (in The Group’s principle operations
tonnes) and, if applicable, with reference to per unit disclosed in the Report are the
produced exploration, development and
production of crude oil, and
no packaging materials are
involved in these processes.
Aspect A3: General Disclosure
Environmental Management
The Environment and Policies on minimising the issuer’s significant impact on the environment and natural
Oil Spill Prevention
Natural Resources resources.
KPI A3.1 Description of the significant impacts of activities on Appendix 1 The Material laws
the environment and natural resources and the actions and regulations that the Group
taken to manage them. complied with during the
Reporting Period
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Appendix

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Subject Areas, Aspects, General Disclosures and KPIs
“Comply or explain” Recommended
Provisions Disclosures Section
B. Social
Employment and Labour Practices
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Aspect B1: Employment	Information on: (a) the policies; and (b) compliance with relevant laws and regulations that have a significant impact on the issuer relating to compensation and dismissal, recruitment and promotion, working hours, rest periods, equal opportunity, diversity, anti-discrimination, and other benefits and welfare.			Policies and Benefits Appendix 1 The Material laws and regulations that the Group complied with during the Reporting Period
		KPI B1.1	Total workforce by gender, employment type, age group and geographical region.	Appendix 2 Key Performance Indicators
		KPI B1.2	Employee turnover rate by gender, age group and geographical region.
Aspect B2: Health and Safety	General Disclosure Information on: (a) the policies; and (b) compliance with relevant laws and regulations that have a significant impact on the issuer relating to providing a safe working environment and protecting employees from occupational hazards.			Operation Safety Appendix 1 The Material laws and regulations that the Group complied with during the Reporting Period
		KPI B2.3	Description of occupational health and safety measures adopted, how they are implemented and monitored.	Operation Safety
Aspect B3: Development and Training	General Disclosure Policies on improving employee knowledge and skills for discharging duties at work. Description of training activities. Note: Training refers to vocational training. It may include internal and external courses paid by the employer.			Training and Development Appendix 1 The Material laws and regulations that the Group complied with during the Reporting Period
		KPI B3.2	The average training hours completed per employee by gender and employee category.	Appendix 2 Key Performance Indicators
Aspect B4: Labour Standards	General Disclosure Information on: (a) the policies; and (b) compliance with relevant laws and regulations that have a significant impact on the issuer relating to preventing child and forced labour.			Respecting Rights Appendix 1 The Material laws and regulations that the Group complied with during the Reporting Period
		KPI B4.2	Description of steps taken to eliminate such practices when discovered.	Respecting Rights

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Subject Areas, Aspects, General Disclosures and KPIs
“Comply or explain” Recommended
Provisions Disclosures Section
B. Social
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Operating Practices	Operating Practices
Aspect B5: Supply Chain Management	General Disclosure Policies on managing environmental and social risks of the supply chain.			Supply Chain Management Appendix 1 The Material laws and regulations that the Group complied with during the Reporting Period
		KPI B5.1	Number of suppliers by geographical region.	Appendix 2 Key Performance Indicators
		KPI B5.2	Description of practices relating to engaging suppliers, number of suppliers where the practices are being implemented, how they are implemented and monitored.	Supply Chain Management
Aspect B6: Product Responsibility	General Disclosure Information on: (a) the policies; and (b) compliance with relevant laws and regulations that have a significant impact on the issuer relating to health and safety, advertising, labelling and privacy matters relating to products and services provided and methods of redress.			Market Practice Quality Management Appendix 1 The Material laws and regulations that the Group complied with during the Reporting Period
		KPI B6.1	Percentage of total products sold or shipped subject to recalls for safety and health reasons	Appendix 1 The Material laws and regulations that the Group complied with during the Reporting Period
		KPI B6.4	Description of quality assurance process and recall procedures.	Quality Management Appendix 1 The Material laws and regulations that the Group complied with during the Reporting Period
		KPI B6.5	Description of consumer data protection and privacy policies, how they are implemented and monitored.	Market Practice
Aspect B7: Anti-corruption	General Disclosure Information on: (a) the policies; and (b) compliance with relevant laws and regulations that have a significant impact on the issuer relating to bribery, extortion, fraud and money laundering.			Market Practice Appendix 1 The Material laws and regulations that the Group complied with during the Reporting Period
		KPI B7.1	Number of concluded legal cases regarding corrupt practices brought against the issuer or its employees during the reporting period and the outcomes of the cases.

Appendix 73

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Community	Community
Aspect B8: Community Investment	General Disclosure Policies on community engagement to understand the needs of the communities where the issuer operates and to ensure its activities take into consideration the communities’ interests.			Our Communities Appendix 1 The Material laws and regulations that the Group complied with during the Reporting Period
		KPI B8.1	Focus areas of contribution (e.g. education, environmental concerns, labour needs, health, culture, sport).	Our Communities Appendix 2 Key Performance Indicators
		KPI B8.2	Resources contributed (e.g. money or time) to the focus area.

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CITIC Resources Holdings Limited 2019 Environmental, Social and Governance Report

Appendix 4 Feedback Form

Dear reader:

Hello! Thank you very much for taking time to read this Report. In order to continuously improve the preparation of reporting and promote the Company’s work in ESG, we especially hope to listen to your opinions and suggestions, please let us know!

1. What is your identity regarding to CITIC Resources?

□Government and Regulator □Employee	□	Customer	□Business Partner
□Potential Investors and Financial Institutions	□	Media	□Community and the Public
□Others (Please specify)
2. Your overall assessment to this Report is:
□Very Good □Good □Fair		□Poor	□Very Poor
3. How do you think of the structure of this Report?
□Very Reasonable□Reasonable □General		□Poor	□Very Poor
4. How do you think of the design of this Report?
□Very Reasonable□Reasonable □General		□Poor	□Very Poor
5. How do you think of the readability of this Report?
□Very Good □Good □Fair		□Poor	□Very Poor
6. How do you think of the quality of the ESG information in this Report?
□Very Good □Good □Fair		□Poor	□Very Poor
7. Which disclosed issues do you pay attention to	in this Report? (please choose 3 issues at most
□Employees’ Health & Safety		□Employment & Employee Benefits
□Employees’ Development & Training		□Anti-corruption
□Employees, Contractors & Communities’ Rights		□Oil Spill Prevention
□Local Environmental Impact		□Energy Usage & Efficiency

Which disclosed issues do you pay attention to in this Report? (please choose 3 issues at most)
What are your opinions on or suggestions to the ESG Report and our performance?

You can e-mail the above feedback form to the following address: Email: [email protected]

Thank you very much for your understanding on and support of our work!

CITIC Resources Holdings Limited

Appendix

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Suites 6701-02 & 08B, 67/F, International Commerce Centre, 1 Austin Road West, Kowloon Tel: (852) 2899 8200 Fax: (852) 2815 9723 E-mail: [email protected] Website: http://resources.citic

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Shanghai Able Digital Science&Tech Co., Ltd. — Environmental & Social Information 2020

50757_rns_2020-06-26_9fde760b-b38f-40c0-91fa-f61b9e5d417d.pdf

Contents

1 About this Report

1.1 Reporting Period

1.2 Reporting Scope

1.3 Reporting Reference

1.4 Reporting Specifications

1.5 Access to this Report

1.6 Response to this Report

2 About CITIC Resources

Crude Oil Projects

Non-Oil Projects

2.1 About the Subsidiaries and Joint Ventures covered in this Report

Kazakhstan

China

Indonesia

Australia

2.2 Corporate Honour

CITIC Resources KBM

CITIC Seram

CITIC Seram

3 Our Governance

3.1 Governance Structure

The Board

Remuneration Committee

Nomination Committee

Audit Committee

Risk Management Committee

3.2 Corporate Governance

Risk Management and Internal Control

Internal Audit

4 Our Communication

4.1 Communication Channels

4.2 Materiality Assessment

Assessment Method

Identification of the sustainability issues related with the Group’s Business

Prioritization of the sustainability issues

Validation of the materiality of sustainability issues

Materiality Matrices

CITIC Resources’ Social and Environmental Materiality Matrices[2] :

The Group's Social Materiality Matrix

The Group's Environmental Materiality Matrix

The SD Issue Prioritization:

Responding to Issues

5 Our Employees

5.1 Policies and Benefits

Response to the Issue

“Employment & Employee Benefits”

KBM Welfare

Materials

Tincy Group Welfare:

5.2 Training and Development

Response to the Issue

“ Employees’ Development & Training”

The Training Content at a Glance:

The status of gross split

Disaster Recovery

5.3 Respecting Rights

The Concerns in CITIC Resources Headquarters:

The Concerns of KBM, TIncy Group, and CITIC Seram:

Response to the Issue

“Employees, Contractors & Communities’ Rights”

6 Our Environment

6.1 Environmental Management

“Local Environmental Impact”

6.2 Oil Spill Prevention

“Oil Spill Prevention”

Daily Monitoring of Indicators relating to Sea Pipelines

6.3 Resource Usage

Response to the Issue

“Energy Usage & Efficiency”

7 Our O eration p

7.1 Operation Safety

“Employees’ Health & Safety”

7.2 Market Practice

Response to the Issue

“Anti-corruption”

Management

Shanghai Able Digital Science&Tech Co., Ltd. Environmental & Social Information 2020