methanex corporationmethanex needs to develop a comprehensive transportation safety and emergency...

RESPONSIBLE CARE®

Verification ReportMETHANEX CORPORATION

December 12 - 14, 2011

Disclaimer

This report has been produced by a team, convened by the Chemistry Industry Association of

Canada (CIAC), to provide advice to the member-company and assist it in meeting its

Responsible Care® commitments. The material in this report reflects the team's best judgment in

light of the information available to it at the time of preparation. It is the responsibility of the

CIAC member-company that is the subject of this report to interpret and act on the report’s

findings and recommendations as it sees fit. Any use which a third party makes of this document,

or any reliance on the document or decisions made based upon it, are the responsibility of such

third parties. Although CIAC members are expected to share the results of this guidance

document with interested parties, the Association, its member-companies, their employees,

consultants and other participants involved in preparing the document accept no responsibility

whatsoever for damages, if any, suffered by a third party as a result of decisions made or actions

based on this report.

Responsible Care® is a registered trademark of the Chemistry Industry Association of

Canada.

Responsible Care Verification Report - Methanex Corporation Page 2

EXECUTIVE SUMMARY The Responsible Care Verification of Methanex Corporation was carried out between August 29th and December 15th, 2011, beginning with a planning meeting team visit to their Corporate Headquarters in Vancouver, British Columbia, on August 28th and 29th. Verification visits subsequently took place as follows:

• Corporate Headquarters on September 26th and 27th • Medicine Hat, Alberta plant site on September 28th and 29th • New Plymouth, New Zealand plant site from October 10th to 12th • Punta Arenas, Chile plant site on November 2nd and 3rd • Santiago, Chile Regional and Marketing & Logistics office on November 4th • Point Lisas, Trinidad plant site from December 12th to 14th

The verification team also conducted interviews with other company personnel in Kitimat, B.C. This was the fifth Responsible Care verification completed for Methanex. The previous verification was completed on September 22, 2008.

Documented in the body of this report by the independent verification team tasked with conducting the verification of Methanex Corporation, are observations and conclusions applicable globally to Methanex. Specifics for each of the locations visited not addressed in the main report are attached as appendices as follows:

Appendix A – Medicine Hat Appendix B – New Zealand Appendix C – Punta Arenas Appendix D - Trinidad

While considering all aspects of the Responsible Care Commitments during this verification the team placed an emphasis on conducting an in-depth examination of company aspects related to:

• Responsible Care Management System • Marketing & Logistics • Waterfront Shipping • Process Safety Management

As a result of the examination conducted, the verification team is of the opinion that the Responsible Care Ethic and Principles for Sustainability are guiding company decisions and actions, and that a self-healing management system is in place to drive continual improvement. The team believes that the company is capable of responding to the range of Findings Requiring Action identified during the verification - summarized below and discussed in detail in the report. The verification is complete and no further involvement is required by the verification team.

Signed: __ _ Date: _April 12, 2012____ Alec Robertson Verification Team Leader For more information on this or a previous Responsible Care Verification Report, please contact your local company site or the company’s overall Responsible Care coordinator: Kevin Kerik Manager, Responsible Care, Telephone - (604)661 2635 E-mail - [email protected]


SUMMARY OF VERIFICATION TEAM OBSERVATIONS

Findings Requiring Action - The company is expected to attend to these issues in as timely a manner as possible. They will be reviewed as a first order of business in the next (2014) verification.

1. Methanex needs to develop a comprehensive transportation safety and emergency response management

plan. The plan should describe the means for selecting carriers, assessing route risks, dealing with hazards, spill containment and clean up, provision of emergency response resources and technical support etc. It should also include expectations for regular exercises including carriers (all modes) as well as local and regional emergency response service providers throughout their hazardous material supply and product distribution networks. Ref OP’s 12-14, 41-47.

2. Methanex needs to develop a comprehensive process safety management program which clearly defines minimum corporate expectations in all areas. A priority is to complete the site quantitative (QRA) operational process risk assessments, including a reassessment of the worst case incident scenario, at each of the Medicine Hat, Punta Arenas and Point Lisas locations. With the risk assessment process also being applicable to transportation and distribution operations, product distribution and vessel loading terminals such as the New Plymouth terminal that is remote from the plant and in a different part of the community, truck and rail loading areas of plants etc. need also be included. Worst case scenarios, in all cases, need also be maintained current and regularly communicated to those potentially impacted. It is also suggested that improvements can be made to the criteria and tools used to guide the choice of which process hazard assessment methodologies to use, commensurate with specific location circumstances, for periodic quantitative/qualitative operational risk assessments.

3. Modify the existing Loss Prevention audit protocol and develop a Process Safety audit protocol using the elements of the above noted expectations as audit criteria.

4. Globally, establish formal resource conservation and emission reduction programs and expectations with

respect to ensuring continual improvement in reducing the environmental foot-print of all operations (Ref Operations Code sections 5 & 6) and complete the development of an emissions monitoring program for use by facilities in preparing site specific reduction initiatives where practical, planned for 2012. This should include leak detection and reporting processes for fugitive emissions from valve packings, equipment seals, etc. at all operating sites. Ref OP’s 58- 60.

5. Establish and document a formalized process for the selection and on-going Responsible Care performance

reviews of those organizations with which the company engages in product swaps to facilitate customer supply; (Note: Some of this is being done on an ad hoc basis.) Ref ST’s 115-124.

6. Upgrade the check element of the corporate management system as follows:

o Establish a formal policy for variance to corporate expectations. o Check the scope of the level 1 and 2 corporate audit protocols to ensure that they address all codes

and applicable organizational groups and that there is a system in place to check that audit results are acted upon.

o Update the Operations Readiness Audit protocol and Facility Prestart Related Activities Checklists to address team comments in section 2 of this report and the Medicine Hat specifics in attachment “A” as well as other applicable CIAC Responsible Care code elements. Maintain them as formal documents.


Works in Progress – The company is encouraged to complete the work currently underway in the following areas:

1. Methanex are encouraged to maintain their focus on improving contractor safety using learnings from the

2011 lost workday injury in Punta Arenas and the sub-contractor fatality in Trinidad to strengthen programs currently in place.

2. Expedite current corporate plans to update their identification of broad based stakeholder groups (i.e., those beyond local communities etc.) with a view to engagement of same in outreach dialogue. This process should include a review of the new Accountability Code with the management system being updated to support continual improvement and ensure that all related commitments are addressed on an ongoing basis.

3. Expedite completion and implementation of the Global Responsible Care Management System draft document that clearly defines the plan-do-check-act continual performance improvement process for the company together with a series of codes providing guidance for its implementation, planned for 2012.

4. Complete the documented cross reference and gap analysis between the CIAC Responsible Care Codes of Practice and the company’s Responsible Care management systems for all regions and all business units. Based on the cross reference and gap analysis, for the new and existing codes the company should develop a documented plan to: o Establish new and update existing global expectations to ensure that they define minimum

expectations in all business areas for the various CIAC Responsible Care code elements. o Update site level policies, procedures and standards to meet global expectations defined from the

above while also continuing to meet local requirements and needs.

5. Finalize and implement the Global Audit Strategy Whitepaper while ensuring that it addresses gaps in the current process identified in this report and site specific items in report Attachments A through D.

Improvement Opportunities – the company is encouraged to review these recommendations and consider their potential benefits.

1. Reinforce or revise current design and construction processes by -

o Updating/formalizing the corporate Project Management System to reflect the company’s experience in restarting mothballed facilities, starting new facilities and the updated Responsible Care code expectations. This system should include periodic reviews during project implementation to ensure progress as planned in all areas. Ref OP 1-6

o Reviewing the company’s management of change process for modified processes, equipment, and technologies to ensure that the relevant research and development expectations of Stewardship code are met. Ref. ST 85-92.

2. Reinforce current operations processes by establishing a periodic review process to ensure that natural gas

supply pipeline operators have appropriate emergency preparedness and response plans in place with the necessary equipment and resources available to adequately respond to emergency situations. Ref OP 31-47, ST 115-120.

3. Benchmark corporate process safety area processes vs. those of other CIAC members through direct contact and/or via the CIAC Process Safety Management Committee, particularly with regard to risk assessment screening tools, planning processes and management systems to facilitate completion of QRA’s at prescribed intervals.


4. In the corporate Emergency Response Policy, identify minimum expectations for site emergency response

plans and exercises to address potential response scenarios (e.g. fire, rescue, medical, hazmat security, vapour cloud, man down) under various weather conditions (e.g. cold winter night, extreme heat) and times of day/week for all shift groups. It is also suggested that expectations include joint exercises with community responders for response scenarios where they could potentially be involved.

5. Critical Infrastructure/ Business continuity processes at all locations have the potential to be improved

through the comparison of systems in place with items detailed in codes OP 49-55. 6. The team identified improvement opportunities regarding their management system for other parties by-

o Establishing a follow up process to help ensure that other parties distribute safe methanol handling information to all their value chain members. Ref ST 110, AC 144.

o Reviewing Methanex’s commitment to Responsible Care with pipeline operators supplying natural gas to each site, advising them of the company’s expectations in that regard, adding Responsible Care clauses to contracts related to the supply of natural gas or other feed stocks and establishing a process to periodically monitor their Responsible Care related performance. ST’s 115, 118- 120.

o Requiring customers to provide an explanation when they answer “no” to a customer audit question. Ref ST’s 118-120.

o Being proactive in ensuring that proper labeling of methanol occurs in all locations/countries where they do business laws by advocating that the Global Harmonizing System be used. Ref ST 106.

7. Globally, review the community engagement process at all plant locations based on the outcome of the

Punta Arenas experience. Include the expectations in CIAC’s new Accountability Code and the related Appendix A on Corporate Social Responsibility in the review/upgrading process. It is suggested that non-government organizations be included in this initiative.

8. It is suggested that by strengthening the linkages between the Global Manufacturing Team, the Risk Management Team and the Global Responsible Care Team, the upgrading of the Methanex Responsible Care management system and their implementation in various areas detailed in this report could be facilitated.

Successful Practices – the company and CIAC are expected to share these and support their implementation in peer member companies:

1. The comprehensive equipment integrity, condition monitoring and general maintenance management

programs in place at all visited sites.

2. Proactive and leading edge occupational health and safety initiatives. Noteworthy examples include- o Employee wellness- The recently completed corporate wide “pedometer challenge” to promote

exercising on an ongoing basis and the fitness center at the Trinidad site. o The Waterfront Shipping’s tanker compartment wall washing and sampling process which negates the

need for confined space entries and their proactive involvement with ship owners in developing and implementing better occupational health and safety programs for ship crews, including methanol handling. Methanex have also established ship crew quarter quality expectations well beyond shipping industry norms.

3. The industrial wind park in Chile and environmental upgrades included in the Medicine Hat restart project.


4. The naming and use of Responsible Care as the umbrella under which all related programs and initiatives are developed and implemented.

5. Methanex’s comprehensive product risk communications program. Noteworthy aspects include- o The proactive training program on methanol handling and Responsible Care to logistic providers,

carriers, local communities, industry associations, governments, distributors, customers and to the customers of both distributors and customers.

o Regular site visits to customer locations, some of whom are located at difficult to reach locations in various regions of the world.

6. Methanex’s overall stakeholder engagement and social responsibility processes with direction starting at

the Board of Directors.

7. The thorough and targeted corporate leadership skills training program.


1. INTRODUCTION 1.1 About Responsible Care Verification As a member of the Chemistry Industry Association of Canada (CIAC), the most senior executive responsible for Methanex operations in Canada attests annually to CIAC and its peers that the company’s operations conform to the expectations contained in the Responsible Care Commitments and are guided by Responsible Care Ethic and Principles for Sustainability.

As an element of this commitment to Responsible Care, Methanex must, every three years, participate in an external verification intended to:

1. Provide the Executive Contact with an external perspective when assessing if the company is indeed meeting the intent of the Responsible Care Commitments, along with advice on areas that may require attention;

2. Identify opportunities for assisting the company when benchmarking its own practices and performance against those of its peers, thus supporting continual improvement;

3. Contribute to the credibility of Responsible Care amongst company personnel and stakeholders, as well as the stakeholders of the broader industry;

4. Identify successful company practices that can be promoted to peers in the CIAC membership; and 5. Support the identification of areas of common weakness so that collective tools and guidance can be

developed to improve performance in those areas across the CIAC membership. Verification is conducted according to a common protocol, developed by the association’s members and others, including several critics of the chemical industry. The verification is conducted by a team consisting of: • Knowledgeable industry experts with experience in Responsible Care; • A representative of the public at large (usually with a public interest background and with experience in

Responsible Care gained from serving on the CIAC’s National Advisory Panel) and • One or more representatives of the local communities where the company’s facilities are located.

The Responsible Care® Ethic and Principles for Sustainability

We are committed to do the right thing, and be seen to do the right thing. We dedicate ourselves, our technology and our business practices to sustainability - the betterment of society, the environment and the economy. The principles of Responsible Care® are key to our business success, and compel us to:

• work for the improvement of people's lives and the environment, while striving to do no harm; • be accountable and responsive to the public, especially our local communities, who have the

right to understand the risks and benefits of what we do; • take preventative action to protect health and the environment; • innovate for safer products and processes that conserve resources and provide enhanced value; • engage with our business partners to ensure the stewardship and security of our products,

services and raw materials throughout their life-cycles; • understand and meet expectations for social responsibility; • work with all stakeholders for public policy and standards that enhance sustainability, act to

advance legal requirements and meet or exceed their letter and spirit; • promote awareness of Responsible Care, and inspire others to commit to these principles.


Methanex, being Corporately Headquartered in Canada with operations in other countries as well, expects that all of its operations conform to applicable Canadian Responsible Care commitments and codes. They have thus requested that this Verification include visits to selected locations outside Canada with the overall as well as Canadian specific results being included in this report. Once completed, the Canadian Verification Report is made publicly available through the CIAC website (www.canadianchemistry.ca). Methanex is also is expected to share reports with interested persons in its communities and other stakeholders as part of its ongoing dialogue processes. Additional information on Responsible Care and / or the verification process can be found at the CIAC website www.canadianchemistry.ca, or by CIAC at [email protected] or (613) 237-6215 extension 233.

1.2 About Methanex Methanex Corporation is a Canadian company with its corporate headquarters in Vancouver, BC. The core business is the manufacture and marketing of methanol and they are currently the largest producer and marketer of methanol in the world. The company has approximately 1,000 employees worldwide. Methanex has methanol manufacturing sites currently operating in or near:

• Medicine Hat, Alberta. Two of the three previously operating plants were demolished in 2005. The third, and newest, plant was shut down and mothballed in 2001. With natural gas availability and pricing having improved, the third plant was re-commissioned and re-started in Q2, 2011.

• New Plymouth, New Zealand (1 operating plant, 2 idled plants) • Punta Arenas, Chile (1 operating plant, 3 idled plants) • Trinidad and Tobago (2 operating plants, Atlas and Titan). The Trinidad Atlas plant is a joint venture

with BP as the minor partner. • Construction on a new methanol plant in Damietta, Egypt was completed and the facility placed in

operation in Q1, 2011. This Methanex operated facility is a 60% Methanex owned joint venture with the Egyptian Government.

The marketing and logistics (M&L) of product methanol is managed through regional M&L offices. The Director of M&L for each office reports directly to the Sr. VP. Global Marketing & Logistics based in Vancouver. The M&L offices are located in key marketing hubs, and include: Hong Kong (Asia Pacific); Santiago, Chile (Latin America, including Mexico); Dallas, Texas (North America); and Brussels, Belgium (Europe). In the Middle East, Methanex has a Business Development office in Dubai, UAE. In Europe, there is a satellite office in Billingham, UK which is managed directly from Brussels. In Asia Pacific, in-region satellite offices have been set up in SeouI, South Korea; Tokyo, Japan; Beijing and Shanghai, China; all offices report directly to Hong Kong. In addition, a wholly-owned subsidiary, Waterfront Shipping Company provides ocean-going logistics services exclusively to Methanex; Waterfront is based in Vancouver and shares office space with Methanex Corporation. Additional support functions based in Vancouver include Finance, Corporate Development, Legal, Investor Relations and Corporate Resources (which includes Human Resources, Information Technology, Government and Public Affairs, and Responsible Care).

1.3 About This Verification The verification of Methanex Corporation was conducted on between August 29th and December 14th, 2011 and included team visits to the following locations:

- Corporate Headquarters, Vancouver, British Columbia - Latin America Regional Office, Santiago, Chile


- Production facilities in;

Medicine Hat, Alberta

New Plymouth, New Zealand

Punta Arenas, Chile

Point Lisas, Trinidad The verification team conducted interviews, and interacted with, a wide range of company personnel at all visited locations as well as external stakeholders at visited production locations. This is the fifth verification exercise completed for Methanex. The last verification was completed in November, 2008. The verification team was comprised of the following individuals.

Name Affiliation Representing

Alec Robertson Consultant Team Leader (participated in all visits)

Dave Mack Consultant Industry verifier (participated in Canadian, New Zealand & Trinidad visits)

Phil Byer University of Toronto Public-At-Large Verifier(participated in Canadian and Chile visits)

Jack Lemire Medicine Hat Police Services Medicine Hat local Community (participated in Vancouver and Medicine Hat visits)

Dave Allerton Local Resident New Plymouth, NZ local Community

Ivan Nikovic Local Resident & Forestry Engineer Punta Arenas, Chile local Community

Ivan Torres Local Interpreter (Punta Arenas)

Roger Wallace Centran Trinidad Steel Limited Point Lisas, Trinidad local Community

Representatives from the local chemistry associations, New Zealand Chemical Industry Council In New Zealand and Asiquim in Chile, joined the team to conduct joint assessments of the company's manufacturing facilities in New Plymouth and Punta Arenas as well as Latin American Marketing & Logistics offices in Santiago, as follows:

Name Affiliation Representing

Bill Birch Responsible Care New Zealand Industry verifier

Sergio Barrientos Asiquim Verifier Industry verifier(Chile)

Jovino Avaria Asiquim Verifier Industry verifier(Chile)

Ximena Abogabir Scott Asiquim Public-At-Large Verifier(Chile)

Attachment 2 contains a list of those individuals interviewed at sites visited and their affiliations.


2. TEAM OBSERVATIONS CONCERNING THE RESPONSIBLE CARE COMMITMENTS (CODES

AND BENCHMARK AND COLLECTIVE EXPECTATIONS) During the verification of Methanex, the verification team looked for evidence that the company was addressing the expectations documented in the Responsible Care Commitments (152 code elements plus 28 benchmark and collective expectations). While considering all aspects of the Responsible Care Commitments, the team placed an emphasis on conducting a more in-depth examination of certain company aspects identified by the company or the team related to:

Overall Responsible Care Management System

Process Safety Management

Marketing & Logistics

Waterfront Shipping In communicating its observations, the verification team will make repeated reference to the following categories of observations: 1. Findings Requiring Action; document instances where the verification team observes specific company

actions (or the absence of company actions) which are inconsistent with the detailed codes and benchmark and collective expectations contained in the Responsible Care Commitments. Where possible, the team will communicate, based on their experience and judgment, why it is inconsistent and how the observation relates back to a possible gap in the expected management system and / or the ethic and principles underpinning company actions. The team may also provide advice on how the situation might be responded to.

2. Works in Progress; document instances where the team has observed the company self-initiating actions in response to identified gaps and deficiency arising from other internal or external audit and review activities, or where the company has self-initiated important improvement opportunities.

3. Successful Practices; document instances where the team believes the company has taken actions that strongly support sustained excellence in performance, and which should be communicated throughout the CIAC membership.

4. Improvement opportunities; identify instances where the team has observed company actions and

decision making as being largely consistent with the expectations detailed in the Responsible Care Commitments, but for which the team is of the opinion that the company could support further improvement by considering alternate or additional benchmarks when undertaking its planning and decision making.

The verification team’s observations of how the company has addressed the Responsible Care Commitments are as follows:

2.1 Team Observations Concerning Operations Code

2.1.1 Design and Construction of Facilities and Equipment The design and construction of significant capital projects is outsourced to major engineering design and construction contractors via a selection process that includes a successful track record in performing such work. Methanex assigns company personnel with considerable experience in project management, plant


operations and engineering to oversee the contractor’s work and ensure that Methanex project standards and expectations are appropriately included in the design. Modifications to existing facilities are managed through a rigorous management of change process with appropriate documentation. All changes are reviewed to ensure that new unacceptable risks are not being introduced into the process. The project to restart the idled methanol plant in Medicine Hat was internally managed, primarily by experienced former employees with extensive related project design, construction management, facility start up and operations management experience who had left when the facility was mothballed 10 years earlier. Despite the challenges presented by the worst area weather conditions in many years, the facility was restarted safely in Q2, 2011 and at the time of the Re-verification visit was operating as planned.

Code expectations in this area are generally being met with some improvement opportunities being identified as documented below.

Improvement Opportunity: Reinforce or revise current design and construction processes by -

o Updating/formalizing the corporate Project Management System to reflect the company’s experience in restarting mothballed facilities, starting new facilities and the updated Responsible Care code expectations. This system should include periodic reviews during project implementation to ensure progress as planned in all areas. Ref OP 1-6

o Reviewing the company’s management of change process for modified processes, equipment, and technologies to ensure that the relevant research and development expectations of Stewardship code are met. Ref. ST 85-92.

2.1.2 Operations Activities All Methanex sites are continuous operation facilities with process operators becoming qualified to independently operate assigned segments of the plant through well-defined training programs with hands on as well as written tests being involved for the various stages in their training program. Safe operating envelopes are defined for all processes through risk assessment processes and process control systems are in place to maintain operating conditions within the designed safe operating ranges. Documented operating instructions are in place for each operating area and are reviewed on a scheduled basis and updated to incorporate revisions required through operating experience or new projects. The integrity and reliability of critical process equipment and control systems are addressed through formalized preventive maintenance and equipment integrity management programs. Transportation and Physical Distribution: As the largest marketer of methanol in the world, product transportation from producing locations to global distributor and customer sites represents a significant part of Methanex’s overall business. All manufacturing sites except Medicine Hat are located adjacent to major waterways, with the vast majority of methanol produced being delivered by large tanker ships to product holding/transfer terminals strategically located across their worldwide market area. Product from the Medicine Hat site is delivered primarily by rail to North American customer sites. Deliveries by tank truck are made from most facilities to sites not accessible by rail or water. Movements by barge occur in the United States, Europe and China. Bulk ship movements are directed by Methanex’s subsidiary company, Waterfront Shipping, primarily using ships under long term lease, augmented by company owned vessels. The selection and management of other carriers is managed by regional Marketing & Logistics offices located in Belgium, Chile, China, Egypt, Korea, Japan, and the United States. There is a formal screening process used for the selection of new terminal locations with those chosen being formally assessed using an in depth Chemical Distributors Institute – Terminal (CDI-T) audit or other agreed screening protocols augmented to include Responsible Care expectations. Similarly, all ocean-going ships are required to complete an annual inspection based on the CDI-M (marine) protocol and Methanex’s internal


safety audit program also regularly spot checks selected ships. All contracted barge companies are required to pass a selection or audit process to assess their Responsible Care performance in transporting methanol products along inland rivers. In Chile, Methanex works with customers, the local chemical association ASIQUIM and a surveyor company to spot check carriers’ truck drivers. This program was extended to Columbia in 2010. Methanex’s transportation emergency response for methanol in the United States and Canada has traditionally been effectively managed through active participation in the chemical industry’s TransCAER initiatives in these jurisdictions and, to a lesser extent, through industry associations in other jurisdictions. While the team found that the company has a sound understanding of the essentials of transportation emergency management in relation to its core product, Methanol, it is concerned that the absence of an overarching transportation emergency response management system has led to inconsistencies and gaps at its various sites.

Finding Requiring Action: Methanex needs to develop a comprehensive transportation safety and emergency response management

plan. The plan should describe the means for selecting carriers, assessing route risks, dealing with hazards, spill containment and clean up, provision of emergency response resources and technical support etc. It should also include expectations for regular exercises including carriers (all modes) as well as local and regional emergency response service providers throughout their hazardous material supply and product distribution networks. Ref OP’s 12-14, 41-47.

Successful Practices- The comprehensive equipment integrity, condition monitoring and general maintenance management

programs in place at all visited sites.

Improvement Opportunities: Reinforce current operations processes by establishing a periodic review process to ensure that natural gas

supply pipeline operators have appropriate emergency preparedness and response plans in place with the necessary equipment and resources available to adequately respond to emergency situations. Ref OP 31-47, ST 115-120.

Code expectations in this area are considered to be appropriately addressed with the above noted exceptions.

2.1.3 Safety and Security Occupational Health and Safety: Well defined occupational health and safety programs were found to be in place at all visited locations as well as overall employee wellness receiving considerable emphasis. Incident reporting, investigation and follow up processes are well defined and learnings from incidents are effectively communicated between all company sites. While recordable injury rates for company employees have improved significantly over the past 10 years and there were no employee recordable injuries across the whole company in 2010, similar improvements have not been achieved for contractors on an ongoing basis. In Q1, 2010 during construction of the Egypt project, two construction worker fatalities occurred. These workers were employed by a sub-contractor of the Engineering, Procurement, Construction (EPC) Company contracted to deliver a “turn-key” plant to Methanex. After experiencing a peak in recordable injury rates for company employed contractors in 2009, It was recognized that the existing contractor management strategy was not as effective as it needed to be and a contractor management improvement initiative was undertaken starting in 2010, which focused on the development of a global standard and the review and revision of regional programs. Contractor recordable injury rates subsequently improved significantly. However, in 2011, a contractor lost workday injury occurred at the Punta Arenas site as well as a sub contractor employee fatality in Trinidad. These happenings are discussed in more detail in sections 2.1.3, appendixes C & D of this report.


A traditional high risk task in Waterfront Shipping’s operations and consistent across the shipping industry was the physical entry by surveying company personnel to wall wipe tanker compartments before loading to certify their cleanliness. Waterfront Shipping, concerned with the risks presented by these confined space entries, developed improved compartment wall washing and remote sampling processes that enabled the cleanliness to be validated without physical entry being required. This practice has been shared with others and is becoming a widely accepted industry practice. Waterfront Shipping have also become proactively involved with ship owners in developing and implementing better occupational health and safety programs for ship crews, including methanol handling. Methanex have also established ship crew quarter quality expectations well beyond shipping industry norms.

Works In Progress: Methanex are encouraged to maintain their focus on improving contractor safety using learnings from the

2011 lost workday injury in Punta Arenas and the sub-contractor fatality in Trinidad to strengthen programs currently in place.

Successful Practice: Proactive and leading edge occupational health and safety initiatives. Noteworthy examples include-

o Employee wellness- The recently completed corporate wide “pedometer challenge” to promote exercising on an ongoing basis and the fitness center at the Trinidad site.

o The Waterfront Shipping’s tanker compartment wall washing and sampling process which negates the need for confined space entries and their proactive involvement with ship owners in developing and implementing better occupational health and safety programs for ship crews, including methanol handling. Methanex have also established ship crew quarter quality expectations well beyond shipping industry norms.

Process Safety Management: This was identified by Methanex as an area of focus for this re-verification. While good practices were found in several aspects such as management of change at all sites visited and in specific aspects at individual sites, the team observed a lack of clarity regarding the company’s overall process safety management system. With some topics being addressed in the corporate level documents, others in location documents only, inconsistencies in approach and application were noted. It was also found that while there is a written corporate requirement to perform QRA’s (formal risk analyses) at operating sites every five years, consistent with the industry norm, the most recent QRA’s for the Punta Arenas and Trinidad sites were completed in 2004 and a QRA for the Medicine Hat was not completed before the facility restart (it is scheduled for 2012). It was noted that all facilities are to complete a process safety gap analysis assessment with respect to the company’s Global Process Safety Management Policy CM2GM018 in 2012 and that a review of the company’s Hazard Reviews Standard MPS 901 is underway to ensure that it adequately addresses ongoing operations requirements as well as project assessments. The team’s conclusions below should be considered during these reviews.

Findings Requiring Action: Methanex needs to develop a comprehensive process safety management program which clearly defines

minimum corporate expectations in all areas. A priority is to complete the site quantitative (QRA) operational process risk assessments, including a reassessment of the worst case incident scenario, at each of the Medicine Hat, Punta Arenas and Point Lisas locations. With the risk assessment process also being applicable to transportation and distribution operations, worst case scenarios need also be current and regularly communicated to those potentially impacted at loading terminals as well as plant sites. It is also suggested that improvements can be made to the criteria and tools used to guide the choice of which


process hazard assessment methodologies to use, commensurate with specific location circumstances, for periodic quantitative/qualitative operational risk assessments.

Modify the existing Loss Prevention audit protocol and develop a Process Safety audit protocol using the elements of the above noted expectations as audit criteria.

Improvement Opportunities: Benchmark corporate process safety area processes vs. those of other CIAC members through direct

contact and/or via the CIAC Process Safety Management Committee, particularly with regard to risk assessment screening tools, planning processes and management systems to facilitate completion of QRA’s at prescribed intervals.

Emergency Response and Security: Emergency management processes were generally found to meet expectations at all sites visited except in Medicine Hat following their successful plant restart as documented in Appendix A of this report. However, the team concluded that the lack of defined corporate expectations to guide activities in specific business geographies has resulted in inconsistencies in application. Security systems at visited sites were also found to meet expectations, again with the exception of Medicine Hat. Cyber security management is corporately driven and appeared to be effective.

Improvement Opportunity: In the corporate Emergency Response Policy, identify minimum expectations for site emergency response

plans and exercises to address potential response scenarios (e.g. fire, rescue, medical, hazmat security, vapour cloud, man down) under various weather conditions (e.g. cold winter night, extreme heat) and times of day/week for all shift groups. It is also suggested that expectations include joint exercises with community responders for response scenarios where they could potentially be involved.

Critical Infrastructure/ Business Continuity: While this subject was not reviewed in detail at all locations, it was found the considerations at the Trinidad site were limited to responding to a pandemic scenario, and the Medicine Hat and Punta Arenas sites had not considered or planned for possible interruptions in either natural gas supplies or plant operators.

Improvement Opportunity: Critical Infrastructure/ Business continuity processes at all locations have the potential to be improved

through the comparison of systems in place with items detailed in codes OP 49-55. A number of improvement opportunities were identified in this code area as documented above.

2.1.4 Environmental Protection & 2.1.5 Resource Conservation Methanex had not experienced any significant environmental incidents in the 4+ years prior to this Re-verification and the CO2 emission intensity of their plants has been reduced by 33% between 1994 and 2010 through asset turnover, improved plant reliability and other initiatives. CO2 emission intensity from their marine operations was also reduced by 17% over the same time period. All new investments are evaluated in terms of carbon utilization and greenhouse gas (GHG) emissions and energy improvement opportunities are sought on an ongoing basis. Environmental upgrades beyond regulatory requirements were also made as part of the Medicine Hat re-construction. Improvements included a new vapor recovery system which reduced methanol vapour losses during product transfers by more than 95% and the installation of impermeable liners beneath all plant storage tanks as well as the rail car unloading area to contain potential spills. While the impact of the new Egypt plant on the reduction results is not yet included in the reduction numbers above, it was expected to be one of the most energy efficient methanol plants in the world. Methanex also built a 2.55


megawatt industrial wind energy park close by its Punta Arenas plant which was placed in operation in 2010. This facility produces approximately 7% of the site’s energy requirements. While these reductions are noteworthy, formal corporate continual improvement environmental protection and resource conservation goals and action plans were not evident. Code expectations in this area are considered to be appropriately addressed with the exception noted below.

Finding Requiring Action: Globally, establish formal resource conservation and emission reduction programs and expectations with

respect to ensuring continual improvement in reducing the environmental foot-print of all operations (Ref Operations Code sections 5 & 6) and complete the development of an emissions monitoring program for use by facilities in preparing site specific reduction initiatives where practical, planned for 2012. This should include leak detection and reporting processes for fugitive emissions from valve packings, equipment seals, etc. at all operating sites. Ref OP’s 58- 60.

Successful Practices:

The industrial wind park in Chile and environmental upgrades included in the Medicine Hat restart project.

2.1.6 Promotion of Responsible Care by Name Methanex challenges people to ask about RC by having it on their company logo; “Methanex – A Responsible Care Company” and take every opportunity to promote Responsible Care by name. RC awareness training is provided to all new employees as well as contractors. Their Marketing & Logistics annual outreach plan includes both methanol safe handling seminars and RC awareness sessions. In the Middle-East, although they have no facilities there, a Methanex employee is one of the founding members of the Gulf Petrochemicals and Chemicals Association RC Committee. They provide RC seminars as part of their annual outreach program to upstream and downstream business partners. RC is well integrated into their organization and how they do business so it is frequently referred to in the course of their interactions with suppliers.

Successful Practice: The naming and use of Responsible Care as the umbrella under which all related programs and initiatives are developed and implemented.

2.2 Team Observations Concerning Stewardship Code 2.2.1 Expectations of Companies and 2.2.2 Expectations with Respect to Other Parties Research and Development: Being a producer and marketer of one product, methanol, a basic building block petrochemical, Methanex’s Research & Development work is limited to that involved in promoting or pursuing new product applications. Methanex is a member of the Methanol Institute (www.methanol.org), an industry trade association having as part of its mandate ensuring that the best available science is made available to regulatory bodies etc. regarding the risks of methanol. Methanol has traditionally been used in the production of hundreds of industrial and consumer items, being sold to chemical manufacturers who then turn it into other industrial chemicals such as formaldehyde and acetic acid. In recent years, methanol has emerged as a viable alternative energy and fuel source with approximately one-third of global methanol production now going into energy-related applications. Methanol is usually made (100% for Methanex) using natural gas and steam as inputs to the production process. The final product is a clear, colorless, water soluble and readily biodegradable toxic liquid that has significant potential for misuse by criminal elements. Due to its toxic properties, methanol has occasionally


resulted in serious illnesses and deaths through its consumption, primarily from misuse by being included as an ingredient in alcoholic beverages. Based on these risks, Methanex has developed comprehensive product risk and handling information. Material data sheets and product handling information have been translated into many languages and is communicated to product transporters, terminal locations, distributors and customers and, through the last two, to end users. Safe methanol handling seminars are conducted for distributors and customers as well as customers of both of these by Methanex regional marketing and logistics personnel at regular intervals in all areas. With methanol being increasingly used as a clean energy fuel, both directly and through blending with gasoline and biodiesel to reduce emissions, Methanex has also been proactive in educating customers in these areas regarding methanol safety and Responsible Care. Methanex has taken a proactive approach and is committed to working with organizations which have a lower RC culture than Methanex, to help foster the principles of Responsible Care. On occasion Methanex refuses to conduct business with companies that do not meet their values and RC expectations. Methanex’s corporate Marketing & Logistics Responsible Care standard defines the objectives, guiding principles, elements and responsibilities regarding the promotion of Responsible Care, communications through the value chain and expectations with respect to other parties in the Stewardship code. A gap analysis vs. new code requirements was being finalized at the time of the Re-verification visits and will serve as the basis for updating standards currently in place. Code expectations in this area are generally being met with the exceptions below.

Finding Requiring Action: Establish and document a formalized process for the selection and on-going Responsible Care performance

reviews of those organizations with which the company engages in product swaps to facilitate customer supply; (Note: Some of this is being done on an ad hoc basis.) Ref ST’s 115-124

Successful Practice: Methanex’s comprehensive product risk communications program. Noteworthy aspects include-

o The proactive training program on methanol handling and Responsible Care to logistic providers, carriers, local communities, industry associations, governments, distributors, customers and to the customers of both distributors and customers.

o Regular site visits to customer locations, some of whom are located at difficult to reach locations in various regions of the world.

Improvement Opportunities: The team identified improvement opportunities regarding their management system for other parties by-

o Establishing a follow up process to help ensure that other parties distribute safe methanol handling information to all their value chain members. Ref ST 110, AC 144.

o Reviewing Methanex’s commitment to Responsible Care with pipeline operators supplying natural gas to each site, advising them of the company’s expectations in that regard, adding Responsible Care clauses to contracts related to the supply of natural gas or other feed stocks and establishing a process to periodically monitor their Responsible Care related performance. ST’s 115, 118- 120.

o Requiring customers to provide an explanation when they answer “no” to a customer audit question. Ref ST’s 118-120.

o Being proactive in ensuring that proper labeling of methanol occurs in all locations/countries where they do business laws by advocating that the Global Harmonizing System be used. Ref ST 106.


2.3 Team Observations Concerning Accountability Code

2.3.1 Operating Site Communities and 2.3.2 Other Stakeholders Methanex engaged in ongoing dialogue processes with their community and regulators as required by Alberta legislation in order to obtain their “licence to operate” prior to the re-commissioning and re-start of their mothballed Medicine Hat facility. This process included open houses where company representatives met with government officials, neighbours and other interested parties to provide information and answer questions about the project. At the time of our visit, the site was in the process of establishing a Community Advisory Panel (CAP) with the local community representative on the Re-verification team having volunteered to be a CAP member. Corporately, Methanex has an extensive public engagement process. The company’s Board of Director’s Public Policy Sub Committee establishes overall direction for Methanex’s practices in this area. The Senior VP of Corporate Resources (also the CIAC Executive Contact) has overall responsibility for policies and programs which are directed and managed by the Director of Government & Public Affairs who leads the Global Public Policy team. The company has a thorough process for identifying and engaging stakeholders at all levels which was being reviewed and updated during the period the Re-verification visits took place. Methanex also issues an excellent annual Responsible Care and Social Responsibility report, accessible through the company website www.methanex.com. The company’s primary dialogue process at operating sites is through their Community Advisory Panels (CAP’s). These groups consist of representatives from local site communities. Considerable controversy existed in Punta Arenas when, in January, 2011, natural gas supplies to the area became limited and the federal government announced an increase to domestic natural gas which initiated a protest by the public due to the potential of the increase in the natural gas price. The price of natural gas was consequently never increased, as the government adjusted its strategy. Methanex, being a large consumer of natural gas, was widely viewed as being a major cause of the problem. This experience led the site to conclude that their community engagement process, including stakeholder representation on their CAP, needed to be re-examined as several community stakeholders who, with a better understanding of Methanex and Responsible Care, potentially would have not become so adversarial during this time. As part of a robust contingency plan developed to effectively manage the impact of the community protests on their employees and operations, Methanex developed and delivered timely and effective external and internal communications materials, focusing on the longstanding and positive impact of Methanex’s presence in Chile on the region and the country. Code expectations in this area are considered to be appropriately addressed.

Works in Progress: Expedite current corporate plans to update their identification of broad based stakeholder groups (i.e.,

those beyond local communities etc.) with a view to engagement of same in outreach dialogue. This process should include a review of the new Accountability Code with the management system being updated to support continual improvement and ensure that all related commitments are addressed on an ongoing basis.

Successful Practice:

Methanex’s overall stakeholder engagement and social responsibility processes with direction starting at the Board of Directors.


Improvement Opportunities: Globally, review the community engagement process at all plant locations based on the outcome of the

Punta Arenas experience. Include the expectations in CIAC’s new Accountability Code and the related Appendix A on Corporate Social Responsibility in the review/upgrading process. It is suggested that non-government organizations be included in this initiative.


3. TEAM OBSERVATIONS ON THE COMPANY MANAGEMENT SYSTEM It is a requirement of Responsible Care that companies have a documented, self-healing management system or systems capable of identifying and responding to deficiencies and otherwise supporting continual improvement across all company business units, functions, and sites and as a framework for implementing the Responsible Care Commitments. The verification team studied Methanex’s management system and compared and contrasted the attributes of that system to those of a self-healing overall management system as discussed in the CIAC Management System Guide. The verification team’s related observations to the company management system(s) are as follows:

3.1 Observations on the PLAN Step During the PLAN Step of the management system, the company decides what the goals of the company are and how they will be met. In determining those goals, it is expected the company will look inward, across its operations, but will also look outward, considering the expectations of: stakeholders; regulatory requirements; relevant CIAC Responsible Care Commitments and supporting tools; and other industry benchmarks. In considering the PLAN Step of Methanex’s management system, the verification team observed the following:

Based on the input from the Global Responsible Care Team and other corporate teams regarding the current status of programs in place as well as new and changing expectations in Responsible Care, regulatory requirements etc., detailed annual Responsible Care tactical plans and actions are developed which are in alignment with the company’s business strategy. Actions are then assigned to individuals who are responsible for their successful completion. Ongoing performance versus best industry practices is measured and tracked on an ongoing basis using CIAC and other metrics. Internal benchmarking is also performed through results comparisons between sites and specific site historical performance trends. While the plan step is being well executed in most areas, the team found several instances of inconsistent application between sites as a result of expectations being unclear as well as others where aspects of relevant Responsible Care Commitments had been overlooked. These are detailed in section 2 of this report. Work In Progress:

Expedite completion and implementation of the Global Responsible Care Management System Draft document that clearly defines the plan-do-check-act continual performance improvement process for the company together with a series of codes providing guidance for its implementation, planned for 2012.

Improvement Opportunity: It is suggested that by strengthening the linkages between the Global Manufacturing Team, the Risk

Management Team and the Global Responsible Care Team, the upgrading of the Methanex Responsible Care management system and their implementation in various areas detailed in this report could be facilitated.

3.2 Observations on the DO Step During the Do Step in the management system, the company converts the decisions of the PLAN Step into action and ensures awareness and understanding by all involved. It is expected that the company will implement an organizational structure, assign responsibilities to appropriate personnel, supply sufficient training and resources to execute planned actions and develop and document standards, procedures and programs, as applicable.


In considering the DO Step of Methanex’s management system, the verification team observed the following: Methanex’s corporate management structure is strongly aligned with Responsible Care with- - The company’s Board of Directors and Senior Management Team establishing the direction for Methanex’s

Responsible Care, Social Responsibility and Sustainability practices. - The Board’s Responsible Care Committee overseeing Responsible Care performance and issues at the policy

level. - The Senior Management Team, chaired by the President and CEO, having Responsible Care formally

represented by the Senior Vice President, Corporate Resources who is the signing executive to CIAC for Responsible Care.

- The Senior Vice President of Corporate Resources having overall responsibility for Methanex’s Responsible Care policies and programs, ensuring that they align with the Board’s requirements and the company’s business strategy.

- A Corporate Responsible Care organization reporting to the Senior Vice President of Corporate Resources - A Global Manufacturing Team (GMT) to drive Responsible Care throughout its organization and bring

together senior manufacturing leaders from all facilities. Each manufacturing location has a senior Responsible Care position, with a seat on the site management team with senior leadership from Human Resources, and Public Affairs participating periodically.

- A Global Marketing & Logistics Responsible Care Team developing and managing the annual Responsible Care plan for Marketing & Logistics.

- A Global Responsible Care Team including senior representatives from the corporate Responsible Care group, Manufacturing locations, Marketing & Logistics and Government and Public Affairs act as a collective resource to the company on Responsible Care principles, practices and strategy.

Works in Progress: Complete the documented cross reference and gap analysis between the CIAC Responsible Care Codes of

Practice and the company’s Responsible Care management systems for all regions and all business units. Based on the cross reference and gap analysis, for the new and existing codes the company should develop a documented plan to: o Establish new and update existing global expectations to ensure that they define minimum

expectations in all business areas for the various CIAC Responsible Care code elements. o Update site level policies, procedures and standards to meet global expectations defined from the

above while also continuing to meet local requirements and needs.

Successful Practice: The thorough and targeted corporate leadership skills training program.

3.3 Observations on the CHECK Step During the CHECK Step in the management system, actions carried out in the DO Step are assessed to determine if they are actually being carried out according to plan, and whether they are achieving the desired outcomes and delivering continual improvement. Here, the overall management system and components will be reviewed along with employee competences for assigned responsibilities, internal and external audits will be undertaken, incidents will be assessed to identify root causes, and performance measurement will be conducted and reviewed. In considering the Check Step of Methanex’s management system, the verification team observed that:

- Improved clarity regarding corporate expectations for CIAC Responsible Care codes as detailed in the “Do” section of the management system above will facilitate ongoing implementation of the corporate audit program. It was noted that the Operations Readiness Audit protocol and Facility Prestart Related Activities


Checklists utilized for the Medicine Hat plant restart are very comprehensive in scope for operating activities as evidenced by the facility being restarted safely. However, these processes did not effectively address other areas of Responsible Care as evidenced by team comments in section 2 of this report. It was also noted that the Level 1 and Level 2 audits cover Product Stewardship and Transportation and Distribution elements - further analysis is required to confirm that all of the CIAC Accountability Code requirements are met.

The Corporate Audit Standard states that each of the elements in the location level 2 audit (12) needs to be conducted over 3 years. In Punta Arenas, to date in 2011, no level 2 audits had been completed, one (office Health & Safety) had just begun and there was no evidence provided regarding level 2 audits being conducted at the required frequencies. Approved, documented variances were not in place for this non conformance with corporate expectations nor for QRA’s not being performed at specified intervals as detailed under the Process Safety heading in section 2.1.3 of this report.

Finding Requiring Action:

• Upgrade the check element of the corporate management system as follows: o Establish a formal policy for variance to corporate expectations. o Check the scope of the level 1 and 2 corporate audit protocols to ensure that they address all codes

and applicable organizational groups and that there is a system in place to check that audit results are acted upon.

o Update the Operations Readiness Audit protocol and Facility Prestart Related Activities Checklists to address team comments in section 2 of this report and the Medicine Hat specifics in attachment A as well as other applicable CIAC Responsible Care code elements. Include them as formal documents in the appropriate Process Safety section of the corporate manual.

Work In Progress: • Finalize and implement the Global Audit Strategy Whitepaper while ensuring that it addresses gaps in the

current process identified in this report and site specific items in report Attachments A through D.

3.4 Observations on the ACT Step During the ACT Step in the management system, the company translates the results of the CHECK Step into corrective actions for improvement. This includes revisiting the PLAN Step to decide whether changes are need to the company’s stated goals or action plans, policies and procedures for achieving those goals. Considerations when examining the ACT Step include whether and how: audit and review findings are responded to; performance is communicated internally and externally; employee and contractor performance is rewarded or corrected, etc. In considering the Act Step of Methanex’s management system, the verification team concluded that the “ACT” step was being effectively implemented with the exception of the certain issues such as site quantitative operational process risk assessments (QRA’s) documented in section 2.1.3 of this report.


4. TEAM OBSERVATIONS ON THE RESPONSIBLE CARE ETHIC AND PRINCIPLES FOR

SUSTAINABILITY Each CIAC member company is formally committed to the ethic of “Doing the right thing, and being seen to do the right thing.” This ethic, along with the principles for sustainability is expected to guide the company’s decision making and practices. In conducting the verification, the team is looking to understand how well the ethic is understood and adopted within the company, and the degree to which the principles inform the manner in which the company does its business. The verification team carefully observed Methanex’s decision making processes and actions and compared and contrasted the attributes of those with the attributes of a company guided by the Responsible Care Ethic and Principles for Sustainability as discussed in the Responsible Care Commitments (Appendix E). The verification team’s related observations on the company’s application of the Responsible Care Ethic and Principles for Sustainability are as follows:

Responsible Care Ethic: Responsible Care is the global umbrella under which Methanex intends that all of its related programs and initiatives are developed and implemented. It is promoted extensively throughout the value chain and with the public at large through various corporate publications and presentations and is deeply ingrained in the Methanex corporate culture from the Board of Directors to grass roots employees who have an industry leading understanding of what Responsible Care is about.

Principles for Sustainability: Work for the improvement of people’s lives and the environment, while striving to do no harm: Examples of various initiatives in this regard are documented in this report such as the excellent corporate employee wellness and talent development programs, the provision of higher quality crew quarters in the fleet of vessels moving their product around the world etc. Other noteworthy results include a 17% reduction in CO2 emissions per tonne of product moved by their shipping fleet between 2002 and 2010, the company’s emphasis on having local people operate their facilities which are located in various world geographies and their decision to maintain staffing levels at the Punta Arenas site well above current requirements with only one of four site plants being in operation. Be accountable and responsive to the public especially our local communities, who have the right to know the risks and benefits of what we do: Methanex’s prime linkage with neighbors bordering their plant sites is through their Community Advisory Panels (CAP’s). It was also found that in Trinidad and New Zealand in particular, site leadership have good ongoing dialogue processes with local authorities etc. However, as noted elsewhere in this report, improvement opportunities were recently identified in the community engagement process at their Punta Arenas site which can also be used to reinforce programs in place at other locations. Also detailed elsewhere in this report was the need to update risk information for various sites which needs to be shared with their communities. A positive example of their community engagement process was in Trinidad where the company supported their CAP in having the river flooding issue addressed by local authorities. Methanex has also been very supportive of local communities in other aspects such as providing funding and technical support to a high school in Punta Arenas for the building of a new laboratory which opened in September 2010.


Take preventive action to protect health and the environment: Methanex have demonstrated a strong commitment to reduce their environmental footprint globally as documented in section 2.1.4 of this report, but would benefit from establishing reduction targets. Innovate for safer products and processes that conserve resources and provide enhanced value: Methanex continues to search out new markets and grow the existing ones and so the population potentially coming in contact with methanol continually grows. Two areas where Methanex are spending particular effort are in Bio-diesel and Energy applications. Both of these are significant growth markets for methanol with education and training programs for these being included in the annual planning process. As an example of this outreach, dimethyl ether (DME) is one of the new energy applications for methanol. Methanex has joined the International DME Association in order to instill RC principles, methanol safe handling and DME stewardship in this new industry. While the handling risks for methanol must be thoroughly communicated for these new product end uses, the use of methanol in these applications has significant environmental benefit as methanol not only has a lesser impact on the environment than gasoline since it is biodegradable and water soluble but also emits considerably fewer toxic emissions. Engines designed to run on methanol can lower greenhouse gas emissions by up to 30% compared to gasoline engines and the emissions are also less reactive, reducing the release of oxides of nitrogen and other atmospheric pollutants that cause the formation of urban ozone which contribute to smog. Additional details in this topic area are included in section 2.2.1 of this report. Understand and meet expectations for social responsibility: Methanex is strongly committed as a company to social responsibility. Their annual Responsible Care and Social Responsibility reports detail some of their SR program highlights from the past three years. The SR program is managed by their Global Public Policy Team and its performance is reported to the Board of Directors Public Policy sub-committee. In all locations where they have a significant presence, active social responsibility programs have been established that are designed to meet the needs of the people in the particular location. An individual at each location has been identified with responsibility for the establishment and growth of the program and high rates of employee involvement in the programs including fund raising and volunteerism are being realized. With scholarships being a focus area, employees work directly with local schools in helping them provide the basics needed to run a healthy learning environment. Other examples include the sponsoring of a two year scholarship for a foreign student to the Lester B. Pearson United World College and the Chilean earthquake relief fund through a large donation plus tripling all funds raised by employees, partnering with Akzo Nobel to paint the interior of the Les Coccinelles school in Brussels, sponsoring of the annual Eco-Heroes Walkathon where employees and primary school students raise funds that are directed to enhancing children’s education while making sustainable improvements to the environment in Trinidad. They also have employee run Social Investment committees at all of locations who are mandated to disperse company funds in supporting community initiatives related to community health, safety or environmental initiatives, regional educational development and supporting employee fund raising through matching grants. Work with all stakeholders for public policy and standards that enhance sustainability, act to advance legal requirement and meet or exceed their letter and spirit: Methanex are strongly committed as a company to sustainability. They have a Public Policy Committee of their corporate Board of Directors to which their Global Public Policy Team (GPPT) reports through the Senior VP of Corporate Resources. GPPT members are drawn from senior regional Public Affairs leadership as well as from Government & Public Affairs, Responsible Care, Investor Relations and Marketing & Logistics. The GPPT directs the evolution of Methanex’s global Social Responsibility and Public Affairs programs. It was concluded that Methanex strives to do what is right and be seen doing it, consider legal requirements to be the minimum standard and continuously strive to exceed the letter and spirit of the law.


Promote awareness of Responsible Care, and inspire others to commit to these principles: Responsible Care is the global umbrella under which all Methanex related programs and initiatives are developed and implemented and promoted extensively throughout the value chain and with the public at large through various corporate publication and presentations. Engage with our business partners to ensure the stewardship and security of our products, services and raw materials throughout their life cycles: Methanex is a single product company, producing Methanol only. Their goal is to, through using multiple approaches, decrease the risk to logistics providers, employees and end users. Methanol safe handling materials including videos and training materials exist for a wide range of stakeholders. In order to extend this outreach throughout the industry, Methanex has engaged the Methanol Institute in further evolving these materials and making them available to the global methanol industry. The company also has an internal document called the Standard for RC Governance of Joint Ventures that directs them in the application of RC in various partnership arrangements. A current example of this being applied is in their joint venture arrangement with an upstream gas company in southern Chile where, through application of RC principles, they have improved the environmental performance of their drilling operations significantly over the past two years. The Re-verification team concluded that Methanex core values support the eight focus areas of the C.I.A.C. Responsible Care® Ethic and Principles for Sustainability.


5. VERIFICATION TEAM CONCLUSION As a result of the examination conducted, and in consideration of the observations communicated within this report, the verification team is of the opinion that the Responsible Care Ethic and Principles for Sustainability are guiding company decisions and actions, and that a self-healing management system is in place to drive continual improvement. The team believes that the company is capable of responding to the range of Findings Requiring Action identified during the verification, as summarized in the Executive Summary and discussed in detail in the report. The verification is complete and no further involvement is required by the verification team.

ATTACHMENT 1 COMPANY RESPONSE TO VERIFICATION TEAM REPORT On behalf of Methanex Corporation I endorse this verification report. I would like to thank the CIAC Responsible Care Verification team for the review of our management systems and implementation of the Responsible Care Codes. This report reflects an accurate and objective assessment of our management systems, and our continued commitment to the Responsible Care ethic and codes of practice. We believe that the recent changes to the CIAC codes and verification methodology have put additional emphasis on identifying value adding opportunities, and will assist us in the continual improvement of our management systems. We are pleased to see that the team was able to identify seven “successful practices” within our global organization, and we look forward to sharing them with other CIAC members to help them meet and further their Responsible Care commitments. Methanex values the independent perspectives provided by each member of the CIAC verification team, and the experience provided to identify value adding opportunities for improvement. We will give consideration to the Improvement Opportunities identified by the verification team. Plans will be developed and implemented to respond to the Findings Requiring Action identified by the verification team. Our progress in implementing those plans will be discussed in the near future and provided at the next verification meeting. John Gordon Senior Vice President, Corporate Resources Methanex Corporation April 12, 2012


ATTACHMENT 2 INTERVIEW LISTS

A: Company Personnel Name Position Location

John Gordon Senior V.P. Corporate Resources, CIAC Executive Contact

Vancouver

Bruce Aitken President & CEO Vancouver

John Floren Senior V.P. Global Marketing & Logistics Vancouver

Michael Macdonald Senior V.P. Global Manufacturing Vancouver

Jone Hognestad President, Waterfront Shipping Vancouver

Edgard Jimenez Operations Manager, Waterfront Shipping Vancouver

Paul Hexter Commercial Manager, Waterfront Shipping Vancouver

Deanna Li Responsible Care & ISO Manager, Asia Pacific Hong Kong (interviewed in Vancouver)

Darcy Carriveau Responsible Care Coordinator-Vancouver Headquarters

Vancouver

Kevin Henderson VP Global Manufacturing Medicine Hat AB (via teleconference)

Tim Williams VP Upstream & Feedstock Acquisition Vancouver

Roland Laurin Director, Risk Management Vancouver

Kyle Aiken Manager, Loss Prevention Vancouver

Marc DuPont Director, Government Affairs Vancouver

Terry Rowat Manager, Environmental Affairs Vancouver

Wendy Bach Director, Human Resources Vancouver

Laura Medina Manager, Enterprise IT Operations Vancouver

Suzanne Clemente Terminal Manager Kitimat, BC (via teleconference)

Jason Galbavy Terminal E H & S Coordinator Kitimat, BC (via teleconference)

Roland Bachmann Terminal Supervisor Kitimat , BC(via teleconference)

Brian Ropitini Plant Manager Medicine Hat, AB

George Lamb Technical Manager Medicine Hat, AB

Gerry Parker Operations Manager Medicine Hat, AB

Cliff Janzer Project Coordinator & Maintenance Manager Medicine Hat, AB

Fred Schmidt Responsible Care Manager Medicine Hat, AB

Dennis Addison VP Manufacturing New Zealand New Plymouth, NZ

Jayne Francis Director, New Zealand Corporate Resources New Plymouth, NZ

Christine Cameron Manager, Responsible Care New Plymouth, NZ

Gary Rielly Responsible Care, Quality & Environment Team Leader

New Plymouth, NZ

Zaneta Ewashko Manager, Public Affairs New Plymouth, NZ

Ian Jamieson Purchasing Manager New Plymouth, NZ

Murray Fisher Safety Advisor New Plymouth, NZ

Paul Klenner Manager, Technical New Plymouth, NZ

Nick Stonier Principal Engineer, Process New Plymouth, NZ

Greg Player Senior Process Engineer New Plymouth, NZ

Terry Richardson Senior Operations Co-ordinator New Plymouth, NZ


Greg Dollimore Manager, Maintenance New Plymouth, NZ

Helen Belcher Laboratory Chemist New Plymouth, NZ

Malcolm Kelsen Asset Integrity Supervisor New Plymouth, NZ

Christine Scott Occupational Health Advisor New Plymouth, NZ

Christopher Shimmin Health & Safety Technician New Plymouth, NZ

Colin Scott Information Technology Team Leader New Plymouth, NZ

Dorval Renaud Quality Assurance Advisor New Plymouth, NZ

Roger Neumann VP Manufacturing , Latin America Punta Arenas, Chile

Pamela Miranda Responsible Care Manager Punta Arenas, Chile

Rodrigo Mora Loss Prevention Engineer Punta Arenas, Chile

Reinaldo Arismendi Loss Prevention Engineer Punta Arenas, Chile

Jorge Bustos Coal Gasification Project Rep. Punta Arenas, Chile

Wolfgang Bevensee Manager, Special Projects Punta Arenas, Chile

Amparo Cornejo Manager, Public Affairs & Government Relations

Punta Arenas & Santiago, Chile

Victor Escobar Security & Emergency Services Coordinator Punta Arenas, Chile

Boris Vukasovic Manager, Production Punta Arenas, Chile

Sergio Pena Superintendent, Planning & Contractor Management

Punta Arenas, Chile

Oscar Bastidas Bufete Industrial Mgr, Contractor Punta Arenas, Chile

Ximena Retamal Chief, Environmental Affairs Punta Arenas, Chile

Pedro Martin Service & Contractor Supervisor Punta Arenas, Chile

Ulises Fernandez Laboratory Supervisor Punta Arenas, Chile

Héctor Espina Responsible Care Supervisor Punta Arenas, Chile

Sergio Vergara Civil Work Supervisor Punta Arenas, Chile

Néstor Fuentes Chief Process Engineer Punta Arenas, Chile

Roberto MacDonald Safety Equipment & Workshop Supervisor Punta Arenas, Chile

Carlos Severino Logistics & Shipping Supervisor Punta Arenas, Chile

Thomas Boyd Procurement Supervisor Punta Arenas, Chile

Daniel Cabrera Supervisor, Human Resources Punta Arenas, Chile

Paul Schiodtz Senior VP, Latin America Santiago, Chile

Fernando Reinecke Logistics Manager Santiago, Chile

Gustavo Parra Vice President Manufacturing, Excellence & Projects

Santiago, Chile

Loretta Urrutia Finance Administrative Assistant Santiago, Chile

Debbie Maxwell Commercial Administrative Assistant Santiago, Chile

Charles Percy Managing Director & CEO Point Lisas, Trinidad

Lester Boodhoo Manager, Responsible Care Point Lisas, Trinidad

Renata Tam Senior Advisor Environment, Responsible Care & Quality

Point Lisas, Trinidad

David Martin Materials Manager Point Lisas, Trinidad

Parmanan Adriann Maharaj

Project Team Leader Point Lisas, Trinidad

Deborah Samaru Public Affairs Manager Point Lisas, Trinidad

Neela Ramnanan Operations Manager Point Lisas, Trinidad

Ryan Bertrand Senior Quality Assurance Technician Point Lisas, Trinidad

Michael Wei Maintenance Manager Point Lisas, Trinidad

Rafi Mohammed Senior Advisor, Emergency Response, Loss Point Lisas, Trinidad


Prevention & Incident Management

Ulric Noel Responsible Care Advisor, Environment & Security


Camille Roopnarine Environmental Coordinator Point Lisas, Trinidad

B: External Stakeholders Name Company / Organization Position Location

Brian Webster Medicine Hat Fire Dept. Chief Training Officer Medicine Hat, Alberta

Barry Honeyfield Local resident, farmer MX NZ CAP Chair Motunui, New Zealand

Wayne Parker Petrochemical worker MX NZ CAP member Waitara Valley, New Zealand

Allison Pettit Travel Centre Tour Guide MX NZ CAP member New Plymouth, New Zealand

Shorty Clement Waitara Valley plant neighbour

MX NZ CAP member Waitara Valley, New Zealand

Belle Tupe Motunui plant neighbour MX NZ CAP member Motunui, New Zealand

Lane Glentworth Dynea Industry rep on MX NZ CAP

New Plymouth, New Zealand

Charles Walters - Hutchieson

Waitara High School Student


Elma Honeyfield Local resident, farmer MX NZ CAP member Motunui, New Zealand

Kathleen Weston Local resident, farmer MX NZ CAP member Motunui, New Zealand

Anna Moratti Waitara High School Student


Peter Wilson Former High School Teacher & First Response Unit Volunteer

MX NZ CAP member Waitara Valley plant neighbour

Waitara Valley, New Zealand

Ashim Hosein Local resident MX Trinidad CAP member


Shelia Dottin Local resident MX Trinidad CAP member


Nicholas McMillian Local resident MX Trinidad CAP member


Delon Ramsundar Local resident MX Trinidad CAP member


APPENDIX A- MEDICINE HAT SITE SPECIFIC ITEMS INTRODUCTION: This appendix documents Medicine Site specific items not included in the global Responsible Care Re-verification report. As a result, both the main report and this appendix must be reviewed to identify all items applicable to Medicine Hat.

GENERAL: The team was impressed that the site was successful in safely commissioning and re-starting the facility, especially with the area weather conditions having been so adverse during the construction and commissioning phases. It was found that a pre job safety analysis process along with well defined incident reporting and investigation processes were in place and that one-third of company employees had been trained as incident investigation leaders. A comprehensive maintenance management/ equipment reliability program was in also in place, with a sophisticated list of indicators to monitor ongoing performance. The site Social Responsibility Committee also appeared to be off to a good start. A good Responsible Care culture was also evident. However, various aspects of Responsible Care, such as transportation safety, had not been, but should have been, addressed prior to start-up and requires attention as identified in this report.


2.1.1 Design and Construction of Facilities and Equipment The Team’s comments for this code area are documented in the global section of the report.

2.1.2 Operations Activities Findings Requiring Action: Carry out a complete analysis of all laboratory operations to identify potential health, safety and

environmental hazards to ensure that appropriate procedural or other controls are in place to address those hazards. Ref. OP’s 1, 4, 5

Develop and implement a comprehensive transportation safety and emergency response management plan. Ref. Section 2.1.2 of the global report.

Establish and document a comprehensive contractor management program which includes for all Responsible Care aspects of same, to include as a minimum, selection, training, supervision, on-going performance monitoring, and the maintenance of an approved contractor list. Ref OP 25

Improvement Opportunities: For other parties working at and on behalf of the Medicine Hat site -

o As a means of monitoring the Responsible Care performance of the company’s rail carrier , review the most recent, and any future, Canadian Pacific Railway Responsible Care Verification Reports (available on CIAC Memberlink), and follow-up with the railway on the status of the findings in the report. Ref ST 115-120.

o Review the site’s truck checklist to ensure that it covers all relevant issues e.g. tire conditions.

2.1.3 Safety and Security Findings Requiring Action: Determine the cause of, and take appropriate remedial actions regarding the security system breakdown

that enabled the Re-verification team to enter the Medicine Hat site uncontested and expedite the completion of a formal site Security Vulnerability Assessment.


Establish a program of integrated emergency exercises with the local emergency services organizations which test the planning and response to incidents on site as well as along its transportation routes. Ref OP 34-40.

2.1.4 Environmental Protection and 2.1.5 Resource Conservation Works In Progress: Expedite the establishment of emissions and effluent baselines for the site, with a view to developing

future reduction objectives and related programs. Ref Op 60-62.

Expedite the establishment of natural resources use baseline for the site, with a view to developing future reduction objectives and related programs. Ref Op 76-80.

Improvement Opportunity:

In the site’s new chemical purchasing procedure, include for an assessment as to how these materials might impact the energy efficiency and raw material use with respect to ongoing operations and products. Ref OP 76-80.

2.1.6 Promotion of Responsible Care by Name The Team’s comments for this code area are documented in the global section of the report.

2.2 Team Observations Concerning Stewardship Code The Team’s comments for this code area are documented in the global section of the report.


2.3.1 Operating Site Communities

Finding Requiring Action: Establish and document a management system for a site community advisory process in accordance with

CIAC Accountability Code requirements

2.3.2 Other Stakeholders

Finding Requiring Action: Participate in the regional TransCAER committee and its outreach processes. Ref. AC 145.

3. TEAM OBSERVATIONS ON THE SITE MANAGEMENT SYSTEM

3.1 Observations on the PLAN Step Finding Requiring Action: Establish and document a site specific Responsible Care management system based upon global

requirements as well as any other local requirements that will effectively move the site from its current post project mode into a fully functioning, high performing operating facility. (Note: A number of appropriate management system elements are already in place or planned, but are yet consolidated into a formalized plan-do-check-act continual performance improvement cycle.)

Improvement Opportunity: The Plant Manager should participate in the CIAC Regional Leadership Group to make connections with

colleagues and share Responsible Care learnings and best practices.

3.2 Observations on the DO Step Works In Progress:


Expedite the current work being done to capture the successful practices and learnings from the recent plant restart.

Improvement Opportunity: Establish a critical skills personnel succession plan for positions currently filled by start-up project

personnel where turnover is anticipated in the foreseeable future. Consider proactive hiring to ensure effective handover.

3.3 Observations on the CHECK Step

Finding Requiring Action: Develop and implement a formal Responsible Care audit program that meets corporate expectations.

3.4 Observations on the ACT Step

The Team’s comments for this code area are documented in the global section of the report.

TEAM OBSERVATIONS ON THE RESPONSIBLE CARE ETHIC AND PRINCIPLES FOR

SUSTAINABILITY The Team’s comments for these subjects are documented in the global section of the report. We acknowledge receipt of the Medicine Hat Site Specific Items for attention and accept the observations and findings - Brian Ropitini (Plant Manager, ) dated April 5, 2012.


APPENDIX B- NEW ZEALAND SPECIFIC ITEMS

INTRODUCTION: This appendix documents New Zealand Site specific items not included in the global Responsible Care Re-verification report. As a result, both the main report and this appendix must be reviewed to identify all items applicable to the New Zealand site.

GENERAL: The team was impressed that the site had a well documented and implemented overall Responsible Care management system with an ISO approach being followed to ensure that documents were current, follow up items from audits and inspections managed through closure etc. Maintenance management processes were impressive as documented above and leading performance indicators were in place with ongoing improvements in their measurement metrics being pursued. The location was also found to have responded well to the challenges resulting from the natural gas feedstock supply shortages and long term availability uncertainties that have existed for several years, resulting in facility shut downs/ restarts etc. A strong Responsible Care culture continues to be evident at this location.


2.1.2 Operations Activities Site procedures are audited on a scheduled basis and revised when required. Comprehensive maintenance management and equipment integrity programs are in place with specific elements including a pressure equipment management system, a risk based inspection system, a storage tank management system and a rotating equipment integrity program.

Improvement Opportunity: As an enhancement to the current process, establish a computerized system to track and ensure timely

follow-up to actions arising from process hazard assessments. This would include, as a minimum, the identification of actions with target dates for their completion, assignment of individuals to address those actions, an automatic means to alert assigned individuals that completion target dates are approaching and/or overdue, and a reporting mechanism to monitor action completion status.

2.1.3 Safety and Security Findings Requiring Action: Establish a periodic review process to ensure that domestic customers and their carriers have appropriate

emergency preparedness and response plans in place with the necessary equipment and resources available to adequately respond to emergency situations. Ref OP 41-47

Establish a program of integrated emergency exercises with the local emergency services organizations which test the planning and response to incidents which might have an impact on the community around the site and along its local transportation routes, paying particular attention to volunteer Fire Departments where the potential exists for higher responder turnover rates. Ref OP 33-47.

Engage the organization which manages the pipeline transporting methanol to Methanex’s loading terminal, in an ongoing dialogue process to help ensure the effectiveness of their pipeline emergency response plans.

Improvement Opportunities: Examine the emergency response equipment and associated storage areas to ensure that the equipment is

fit for purpose.


2.1.4 Environmental Protection and 2.1.5 Resource Conservation The team examined and was satisfied that commitments are being met and expected management systems in place with the following exception.

Finding Requiring Action: Assess raw materials for opportunities to reduce risk, and maximize energy efficiency and/or use (e.g.

replace chlorine with hypochlorite). Review all chemicals on site to ensure continual improvement and conformance with New Zealand regulations. Ref ST 94.


2.2 Team Observations Concerning Stewardship Code

2.2.1 Expectations of Companies The Team’s comments for this code area are documented in the global section of the report.

2.2.2 Expectations with Respect to Other Parties The Team’s comments for this code area are documented in the global section of the report.


2.3.1 Operating Site Communities Improvement Opportunity:

For improved community awareness, consider taking Responsible Care and methanol handling information into local schools. Ref ST 199, AC 146.

Work cooperatively with the company’s local Community Advisory Panel in addressing their ongoing concern regarding the numbers of traffic accidents that occur at the highway entrance to the Methanex site.

Successful Site Practice: The visitor centre in place to provide company information to the general public and provide a conduit to

company.

A very engaged CAP who consider Methanex as a good neighbor and the fact that they look out for each other as part of their relationship. This was recently evidenced by a local neighbor calling the Police and responding to suspicious activity outside the Methanex gate.

2.3.2 Other Stakeholders The Director of Manufacturing and Manager of Public Affairs meet with the local Mayor and council representatives annually with topics discussed including the local economy and business outlook, Methanex business plans and concerns etc.


Work with and through Responsible Care New Zealand to identify and engage other stakeholders in Responsible Care. Ref AC 138-140, 147-152.

3. TEAM OBSERVATIONS ON THE COMPANY MANAGEMENT SYSTEM The Team was impressed with the professionally printed booklet which describes the Responsible Care management system for use as a communication and educational tool.


3.1 Observations on the PLAN Step The Team’s comments for this code area are documented in the global section of the report.

3.2 Observations on the DO Step The Team’s comments for this code area are documented in the global section of the report.

3.3 Observations on the CHECK Step The Team’s comments for this code area are documented in the global section of the report.

3.4 Observations on the ACT Step The Team’s comments for this code area are documented in the global section of the report.


SUSTAINABILITY The Team’s comments for these subjects are documented in the global section of the report.


APPENDIX C- PUNTA ARENAS SITE SPECIFIC ITEMS

INTRODUCTION: This appendix documents Punta Arenas Site specific items not included in the global Responsible Care Re-verification report. As a result, both the main report and this appendix must be reviewed to identify all items applicable to the Punta Arenas site.

GENERAL: This site, like New Zealand, has faced considerable uncertainties resulting from the lack of natural gas feedstock for the past few years. With but one of four site methanol plants currently operating, Methanex has been proactively attempting to create new sources of natural gas through supporting regional drilling activities, investigating coal gasification etc. In addition, well considered staffing plans are in place with staffing levels being maintained to ensure that core competencies exist to facilitate safe operations should sufficient feedstock become available to operate more than one of the four methanol units. Discussions with maintenance representatives also indicated that maintenance resources are being provided to keep the plant in good condition despite operating at considerably reduced production rates. The site has maintained a positive Responsible Care approach during this challenging period but this also has challenges to be more proactive in understanding and working with the local public about its concerns.



2.1.2 Operations Activities The Team’s comments for this code area are documented in the global section of the report.

2.1.3 Safety and Security The RC Management system for Incidents management in Punta Arenas appears to have a good structure, but needs improvement in addressing the root causes of the significant incidents that have occurred (i.e. incident – fall while working at heights not tied off appears to be a behavior issue related to Human Factors. Why was the worker unclipped as it is common practice in the culture and the person had been on site for many years? The Chile legislation allows that the plant to be shutdown in the event of a more serious incident, i.e. fatality). The site was also unaware of how transportation accidents involving its product in remote areas of Chile or in Argentina would be known or responded to. Other team comments for this code are documented in the global section of the report.

Finding Requiring Action: Establish a formal transportation management system including transporter selection and management,

the reporting of, and response to, transportation accidents and incidents involving the delivery of raw materials to, and products from, the site. Ref OP 41-47, ST 115-120.

Improvement Opportunities: Examine the qualifications for, and processes used by, those performing incident root cause analyses.

Emergency response drills are conducted 2 times per year. It is recommended that drills be based on the reasonably foreseeable scenarios as detailed in the global report.

Ensure that rescue teams are adequately trained and equipped for high angle rescue response. Ref OP 31-40.


Successful Site Practice: The new process that limits the number of critical work activities occurring at the same time is

commendable. This was developed following the 2010 incident when a contractor employee fell while working inside a distillation column (confined space).

2.1.4 Environmental Protection and 2.1.5 Resource Conservation While it was found that current information for the handling, treatment and disposal of wastes is very good, historical information in this regard for the site was lacking.

Finding Requiring Action: Review and upgrade where warranted the management system in place for the handling, transportation

and disposal of wastes from the site. Ref OP’s 64-75.

Improvement Opportunity: Benchmark the site waste facility assessment protocol against the defined CIAC protocol.


Assess raw materials use for opportunities to reduce risk and maximize energy efficiency. Ref ST 94



2.2.1 Expectations of Companies The Team’s comments for this code area are documented in the global section of the report.

Improvement Opportunity: Request and review Responsible Care audit reports from suppliers who are Responsible Care members and

follow up on reported items as appropriate. Ref ST 101-102.

2.2.2 Expectations with Respect to Other Parties The Team’s comments for this code area are documented in the global section of the report.



The Team’s comments for this code area are documented in the global section of the report. In particular, due to public controversy at the site last year, Methanex has reviewed its consultation and social responsibility activities in the area to help it understand and address concerns.

Work in Progress: Expedite completion of the community engagement process review and implement identified program

changes. Include the expectations in CIAC’s new Accountability Code and related appendix “A” on Social Responsibility in the upgrade.

Improvement Opportunities: Continue to look for opportunities to support local businesses in growing their capabilities to provide an

increasing proportion of goods and services required by Methanex.

Work with service and supplier contractors to sign up for Responsible Care and the commitment to sustainability. Ref ST115

Seek input from the site’s newly reconstituted Community Advisory Panel on new plans for community engagement and social responsibility (see Work in Progress above.)


Document minutes of Punta Arenas Community Advisory Panel (CAP) meetings. Ref AC 129.

Provide communications and media training for selected plant personnel. AC129-130

2.3.2 Other Stakeholders

The Team’s comments for this code area are documented in the global section of the report. In addition, the team noted the lack of signage at the site identifying the company as adhering to Responsible Care.

Improvement Opportunity: Improve Responsible Care promotional signage at the entrance to the Punta Arenas site. Ref AC 146

3. TEAM OBSERVATIONS ON THE COMPANY MANAGEMENT SYSTEM

3.1 Observations on the PLAN Step The Team’s comments for this code area are documented in the global section of the report. In addition, at Punta Arenas, the company is considering the development of a coal gasification plant, which would take coal from other areas of Chile and turn it into gas for use as a fuel source at the Punta Arenas plant. Such plans create challenges and were being developed without sufficient consideration of Responsible Care.

Finding Requiring Action: Plan all projects, including coal gasification, consistent with the relevant Responsible Care codes, such as

for the planning and design of new facilities, accountability to the site community, and Social Responsibility expectation in Appendix “A” in the CIAC Responsible Care Commitments booklet, well in advance of design and construction.

3.2 Observations on the DO Step The Corporate Audit Standard states that each of the 12 elements in the location level 2 audit needs to be conducted over 3 years. In Punta Arenas, to date in 2011, no level 2 audits had been completed and one (office Health & Safety) had just begun and no evidence was provided regarding level 2 audits having been conducted at the required frequencies.

Finding Requiring Action: Complete Level 2 audits at the site at frequencies meeting corporate requirements or with an approved

variance that provides justification for the non compliance, along with an action plan, monitored to bring compliance back to requirements.

Improvement Opportunity: With reference to the CIAC RC Commitment Package – section C and the CIAC Management System Guide,

in each of the plan-do-check-act elements of the Responsible Care Manual, add a short description of what the site does to address those elements and how it is done (e.g., supporting business process descriptions, list of procedures, etc.).

3.3 Observations on the CHECK Step The Team’s comments for this code area are documented in the global section of the report.

3.4 Observations on the ACT Step The Team’s comments for this code area are documented in the global section of the report.


SUSTAINABILITY The Team’s comments for these subjects are documented in the global section of the report.


APPENDIX D- TRINIDAD SITE SPECIFIC ITEMS

INTRODUCTION: This appendix documents Trinidad Site specific items not included in the global Responsible Care Re-verification report. As a result, both the main report and this appendix must be reviewed to identify all items applicable to the Trinidad site.

GENERAL: The team found that the site has excellent management systems in place in most Responsible Care areas. They are well connected to local stakeholders through active participation is associations such as the local branch of the American Chamber of Commerce, ongoing dialogue with Government officials etc. They also have been proactive in the development of improved trade training programs in the area and in positively influencing the region’s safety culture.



2.1.2 Operations Activities Works in Progress: Expedite implementation of the site’s new document management process for operating and maintenance

procedures which includes for a concurrent review of all procedures, planned for 2012.

2.1.3 Safety and Security In 2011, a sub contractor employee fatality occurred at a site remote to Methanex plant site where Methanex had contracted the services, including risk management, to a contractor and the area occupier (PLIPDECO). Team comments relevant to contractor safety in general are documented in the global section of the report.

Works in Progress: Expedite completion of the site quantitative operational process risk assessment, including a reassessment

of the site’s worst case incident scenario. Planned for 2012.

Expedite completion of addressing gaps from the recently completed process safety gap analysis.

Expedite completion of the site’s Industrial Hygiene program update. (Note: Workplace exposure monitoring is already being done.)

Complete the focused Responsible Care related training for all members of the Joint Responsible Care Committee.

Expedite completion of behavioral based safety training for all site employees. (Note: Approximately 150 employees already trained.)

Complete the site employee Responsible Care Competency Assurance program planned for 2012.

Improvement Opportunities: Consolidate all the current process safety activities (e.g., project management system, management of

change, operating procedure review, equipment integrity processes, etc) into a consolidated process safety management document.

Ensure that the current Deviation Procedure is consistently used in decisions to deviate from defined periodic activities. (Note: Current company standard requires an operational process risk assessment to be done every 5 years. This has been extended at the site without reference to the deviation procedure.)

Consider tracking the Quality of Incident Investigation and Incidents in Control indices on a moving annual total basis as well as year to date, to provide trends over time.

Provide refresher media training to selected emergency management personnel.


Consider benchmarking the site emergency response plan against the Canadian Standard Z731- Emergency Preparedness and response.

Review off-hours emergency response capability on site and address any identified issues (e.g., high angle rescue).

Successful Site Practices: The site’s Quality of Incident Investigation and Incidents in Control indices which measure the quality of

investigations through sampling and analysis of incident reports and the timeliness of completing investigations respectively. Both clear examples of leading indicators.

The Safety Stand Up process in place which periodically focuses on proactive safe work activities, as opposed to the safety stand down approach which has more of a negative post incident connotation.

The significant results obtained in recent years (i.e., injury reduction) from the rigorous application of the site behavior based safety program.

The site’s Aspects and Impacts process, commenced in 2007, that identifies site hazards and is updated annually.

The 10 hour contractor training and certification program that is applied across the entire industrial estate within which the site is located. This requires an annual reassessment and only certified contractors are allowed to work on the site.

The employee gym and fitness program which is supported by trained staff.

2.1.4 Environmental Protection and 2.1.5 Resource Conservation Improvement Opportunity:

Benchmark the site waste facility assessment protocol against the defined CIAC protocol.



2.2.1 Expectations of Companies & 2.2.2 Expectations with Respect to Other Parties The Team’s comments for these code areas are documented in the global section of the report.



Findings Requiring Action: Establish a process to periodically communicate the site’s worst case incident scenario to the defined site

neighboring community. Specifically to those in the adjacent community who may be impacted, including what to do in an emergency. (Note: If worst case scenario not expected to have an off-site impact then this should be communicated in any case.)Ref. AC 129 & OP 39.

Works in Progress:

Expedite plans to initiate more direct two-way site communication with individuals in the defined site neighboring community. This is currently planned for 2012.

2.3.2 Other Stakeholders The Team’s comments for this code area are documented in the global section of the report.

3. TEAM OBSERVATIONS ON THE COMPANY MANAGEMENT SYSTEM

3.1 Observations on the PLAN Step


Works in Progress: Expedite addressing all actions described in the current Responsible Care Vision by end of 2012.

Successful Site Practice: The Responsible Care Vision for 2012 which aligns with the overall Site Vision for 2015.

Maintaining focus on site goals and current status vs these by the posting of site performance charters in each department

3.2 Observations on the DO Step Improvement Opportunities: With reference to the CIAC Responsible Care Commitment Package – section C and the CIAC Management

System Guide, in each of the plan-do-check-act elements of the Responsible Care Manual, add a short description of what the site does to address those elements and how it is done (e.g., supporting business process descriptions, list of procedures, etc.).

Successful Site Practice: The Responsible Care Manual which provides an overview of the site’s Responsible Care management

system with the purpose of ensuring that all elements of the system are appropriately described and maintained.

3.3 Observations on the CHECK Step & 3.4 Observations on the ACT Step

The Team’s comments for these code areas are documented in the global section of the report.


SUSTAINABILITY The Team’s comments for these subjects are documented in the global section of the report. We acknowledge receipt of the Trinidad Site Specific Items for attention and accept the observations and findings - Renata Tam (Responsible Care Manager, Ag) dated March 4, 2012.

CHEMISTRY INDUSTRY ASSOCIATION OF CANADASuite 805, 350 Sparks Street

Ottawa (ON) K1R 7S8T: 613 237-6215 F: 613 237-4061

www.canadianchemistry.ca

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