Committed to strong Health, Safety, Environment and Security Management We are constantly and consistently improving our performance to live up to our HSE standards. We have an HSE & OEE (operational eco-efficiency) agenda in place for 2011-2015. Our ambition for 2015 is to be in the top quartile of our peer group in safety performance and eco-efficiency improvement. This requires the concerted effort of a strong HSE community - working together as a united function, developing functional excellence and sharing resources, as well as best practices. The HSE & OEE agenda defines the targets and some of the company-wide programs aimed at achieving the 2015 ambition. Our targets are: Health: Monitoring health is an important topic on the agenda, in which we aim to maintain the Total Reportable Rate at 2 percent (the rate of injuries per million hours worked). Safety: Our HSE strategy for 2010-2011 identified safety management as a point of improvement for the next five years. Our ambition for 2015 is to perform in the top quartile of our safety peer group. Environment: We measure progress in this field by using an internal indicator which combines energy, water, waste and air emissions, as well as cost elements. Our ambition is to reduce our waste emissions by 10 percent in 2012 and by 30 percent by 2015, with 2009 as a baseline year. In total, there are more than 700 colleagues with HSE responsibilities. Together, they form the HSE function. These colleagues work in multi-disciplinary teams of HSE specialists. Around 15 percent of them work in the corporate HSE department, while about 85 percent work at our manufacturing sites - where an increase in HSE improvements has the biggest impact. Our HSE&S Management is carried out in the following way: We document the HSE responsibilities The basic HSE responsibilities of our employees and our company as a whole are included in our Code of Conduct. Specific HSE responsibilities are further clarified in Our Beliefs and Principles, which were issued in 2008. Also in 2008, we issued a new Policy Statement on Health, Safety and Environment which is fully aligned with our commitment to meeting all of our stakeholders’ expectations in running a profitable and sustainable business, while at the same time meeting all of our commitments to society and the environment. We implement HSE policy requirements We have a comprehensive HSE Management System in place. This consists of: Corporate Directives, which support the HSE policy and specify general minimum requirements that must be strictly applied; Standards included in our Corporate HSE Manual, which specify additional professional detail on requirements to be followed to fully comply with the Corporate Directives; Guidance Notes, also included in our Corporate HSE Manual, which provide additional and/or explanatory information useful to develop local procedures and systems to effectively implement the Directives and Standards. In general, Guidance Notes are based on best practices within the company. They are recommended but not mandatory; Operational management systems at our sites. These systems are integrated on quality and HSE. They are risk-based and follow the Responsible Care® and Coatings Care® principles. Management systems have been set up in line with international standards such as ISO-9000, ISO-14001, RC-14001 and OHSAS-18001. We assure compliance All manufacturing sites are requested to assure compliance by providing an annual self-assessment regarding their HSE management systems and performance. At least once every five years, all manufacturing sites are audited by multi-disciplinary teams of HSE specialists under the ownership and responsibility of our auditing department. Larger sites are also subject to external insurance audits. The HSE audit intervals are risk-based and are determined by the inherent hazards present on site and the most recent audit score achieved. An annual critical review takes place at all sites with a high inherent hazard. We manage performance To manage performance, we use a set of HSE Key Performance Indicators. The performance trend over the last four years based on these indicators is reported in the Sustainability Performance section. Examples In September 2012 we will organize our third global AkzoNobel Safety Day. During the previous Safety Days, all employees made their personal safety pledge to ensure safety in both their working and private lives. We have selected a number of facilities (roadmap sites) that are facing difficulties in achieving our high ambitions. These sites will receive special attention and support to bring them to the desired performance level. In 2011, we implemented Behavior Based Safety programs at 76 percent of our manufacturing sites. These programs focus on improvement actions by applying BBS processes, which involve supporting employees in reducing unsafe situations and unsafe behaviors. Since launching our safety induction training for new and existing employees, 2,563 employees have followed and passed the multi-language HSE e-learning module online. The Dynamo project at Morris (USA) focuses on the waste work stream. This work stream is geared towards reducing the waste produced at the site. A lot of waste is being sent to a landfill, and a lot of waste water is being sent to different waste water treatment facilities. Our goal is to reduce the quantity of this waste as much as possible and eliminate the waste being sent to the landfill. In 2008, we established improved management of process safety as a priority. Following the Baker report on the Texas refinery explosion, AkzoNobel thoroughly reviewed the process safety management system requirements and carried out specialist process safety audits to verify the asset integrity of ten high hazard sites. No deficiencies that could lead to a major accident were detected. Drawing on the learning from these reviews and practice from the former ICI, we have updated our process safety/asset integrity standard and management practices. A newly-formed global process safety network is developing additional guidance, training materials and leading indicators to monitor implementation and support continuous improvement.