Quality Control and Supervision

2015 Corporate Social Responsibility Report > Environmental Resilience

Quality Control and Supervision

Management, Accountability,
and Auditing System

Regulatory
Compliance

Nesher invests many resources in order to fully abide by the law and strives to voluntarily adopt advanced principles of international organizations in the cement industry. A process of risk assessment and management is conducted in the company on a regular basis by means of internal auditing and a clear policy that applies to all of Nesher’s production sites.

During 2015 Nesher met all legal rules and regulations pertaining to social, economic and environmental aspects. Nesher was not required to pay any fines or other levies due to insubordination or non-compliance with legal requirements.

Commitment to the
Code of Ethics

Nesher believes that the norms of compliance with the law, preservation of human life, preservation of human dignity, equal opportunity for all regardless of religion, ethnicity, race and gender, social responsibility and community outreach constitute the foundation of the Group's business activities and its relations with its stakeholders.

The code of ethics adopted by Nesher in 2004 and updated in 2011 includes issues such as personal accountability, meeting statutory requirements, and reference to situations which raise a concern for conflict of interests. The code dictates the relevant rules for ethical behavior in all aspects concerning business engagements and puts in writing the basic values according to which the Group operates in a set of rules of behavior that will apply to its position holders, managers and all its employees.

Code of Ethics, on the Nesher website

Company
Values

In 2009 Nesher began a process of drafting and adopting a set of values, formulated by a group of 100 managers, from team manager level to CEO.

These values represent the beliefs and assumptions that guide the behavior of all employees and serve as a management tool to implement the vision and design the organizational culture. In addition, these values are used as the organizational "compass", assisting employees in making decisions in situations where there are no written procedures. These values are implemented as part of Nesher's Code of Ethics.

Prevention of
Corruption

Nesher has a zero-tolerance policy against all forms of corruptions. The Company has implemented an Anti-Corruption policy applying to all directors, employees, business partners and other third parties linked to or identified with the Company.

The Company is committed to avoiding all forms of bribery, both of public figures or all other individuals or entities, and this policy is applied. A list of "red flags" is attached to the Company's policy to illustrate situations that may arise and could raise concerns regarding anti-bribery and anti-corruption laws. Nesher managers and employees who come across any of these situations or similar ones must report them immediately to the Company's Ethics committee / internal auditor.

As part of Nesher's anti-corruption policy, the Company refrains from donating money or any other form of donation to politicians and political entities. Moreover, the Company's managers and employees attend training sessions concerning the prevention of corruption.

In 2013, 95% of Nesher employees and all board members attended training sessions concerning the Company's anti-corruption policy. In 2015, 96% of Nesher employees and all board members attended training sessions dealing with the Company's anti-corruption policy.

Benefits to Senior
Management - Based
on Performance

As a part of Nesher’s organizational culture, benefits to senior management reflect the Company’s financial results and the assessment of managers.

Bonuses to second-tier managers are determined in accordance with meeting personal goals, evaluation by direct manager, evaluation by a subordinate employee and the assessment of a professional manager. 50% of the bonus depends on personal goals, that are determined according to his/her role in the company, and include, among others, environmental, social and safety areas.

Constant Improvement of Management

The Company’s responsibility for environmental, social and financial issues is rooted in its organizational and managerial culture:

  • QuarterlyBoard of directors meeting in which the overall activities of the Company are discussed including environmental issues.
  • QuarterlySenior management meeting to discuss operational, financial, environmental and social performance of individual plants and the Company as a whole.
  • QuarterlyMeetings of the Safety forum attended by Nesher CEO, Executive Vice President and Head of Cement Division, plant managers, and VP of HR.
  • MonthlyA meeting of a Quality and Production forum. The forum is led by Executive Vice President and Head of Cement Division, the managers of the two plants, production managers, technologist, head of Sales and Customer Relations division, VP Environmental Affairs.
  • MonthlyFinancial performance: The CEO, Executive Vice President for Policy, Planning, Strategy, and the CFO meet to discuss economic performance and data.
  • MonthlyRamla plant financial performance: CFO, Manager of Ramla plant, Company’s comptroller and plant’s comptroller discuss the economic performance of the Ramla plant.
  • Bi-WeeklyMeeting of the Company’s management to discuss all relevant issues in the areas of production, environment, safety, community, and all other issues requiring attention.
  • WeeklyA production and quality report is distributed weekly to the Company’s management and to headquarters staff.

In addition to the general management reviews, a special monitoring of environmental issues is carried out.

  • Quarterly briefingHolding meetings between the VP Environmental Affairs and the Chairman of the Board.
  • Monthly briefingHolding meetings between VP Environmental Affairs and the CEO for ongoing briefing.
  • Environmental forumA quarterly meeting chaired by the CEO and attended by the Executive VP and Head of Cement Division, plant managers, VP Environmental Affairs, and other relevant officers.
  • Environmental review by managementAn annual report on environmental issues prepared by the VP Environmental Affairs and forwarded to CRH.

Comprehensive
Management Systems

Nesher’s environmental policy reflects the Company’s constant strive for improvement of its environmental, social and financial performance, with the aid of, inter alia, management and control systems such as ISO standards.

As of 2011, all Nesher production sites are certified for the following standards: ISO 14001, ISO 9000, and the Israel Standard 2007: 18001 safety standard.

The Nesher Ramla plant has been awarded the Diamond Label by the Standards Institution of Israel for four consecutive years. This label is awarded to organizations in which seven ISO standards have been implemented (safety, transport safety, environment, product quality, energy, product standard mark and Green Label). The Ramla plant was also awarded 5 Beauty Stars in the Beautiful Industry competition.

In May 2013, the ERP system was launched at Nesher. This system integrates maintenance, procurement, inventory, and financial information and creates a single database for the entire organization, allowing data analysis in various cross-sections.

A Comprehensive System
of Monitoring and Control

Internal Auditing

Nesher holds formal alongside non-formal monitoring systems that control and monitor Company processes. The monitoring system includes internal and external auditing that accompanies Nesher’s activities both in financial aspects and in social and environmental aspects. A Comprehensive System of Monitoring and Control

  • The internal auditing in all Company units is performed by an accounting firm. The annual auditing plan is established mainly on the basis of the company’s three-year plan, with issues added as required and according to instructions from the CEO and the chairman of the Board of Directors. The plan is coordinated with the internal auditor of parent company, Clal Industries and Investments, and is approved by the auditing committee. The auditing reports are reviewed by the management and the auditing committee and a follow-up of the implementation of the recommendations is performed. Senior management is audited by the Company’s internal auditor, who reports to the chairman of the Board of Directors.
  • Nesher also uses an external law firm to perform an extensive enforcement survey, in order to ensure full compliance.
  • In addition to the formal auditing mechanisms, the Company has an internal feedback mechanism. Once a year, a survey is conducted with regards to employees’ opinions on every area of activity, from the quality of the equipment, through decision making processes, to management capabilities. The survey also gauges the employee’s satisfaction with his/her job in the Company. It provides comprehensive information from the level of the direct manager to the level of the Company’s CEO and Company’s headquarters. The survey presents an important feedback to Nesher’s leaders regarding the Company’s operations and managers.
  • Employees "Hotline" - Employees contact the Company internal auditor anonymously or directly (the Company uses the services of an external auditor), to report violations of the Code of Ethics or other concerns.

External Auditing

The Company contracts the services of two separate accounting firms to perform auditing services. The auditing is done partly on an ongoing basis and partly for the purpose of attaining approval for financial reports. The accountants also submit long-form reports that are forwarded to the auditing committee for review; the Company monitors the implementation of the recommendations.
Periodic financial reports, audited or reviewed by the accountants, are delivered to the Board of Directors Balance-sheet Committee.

Supply Chain

Corporate Responsibility
Policy in the Procurement
Department

Nesher purchases products and services from some 2000 suppliers in Israel and abroad and aspires to form long-term business relations with major suppliers based on mutual trust and responsibility for sustainable processes.

As a large company with a longstanding and established role in the country's development, Nesher is aware of its commitment to and responsibility towards its business partners. The Company expects its suppliers to manage their business activity with full economic and social-environmental responsibility, and to fulfill their commitments in compliance with all laws and business agreements.

Nesher aims to work with a wide range of suppliers and to support those in Israel's geographic periphery as well as suppliers that employ people with disabilities.


Business agreements
with local suppliers

Nesher makes every effort to increase its activity with local suppliers and to promote "made in Israel" production activity, as far as costs and knowledge/capabilities of local suppliers allow. 90% of Nesher's activity involves working with local suppliers.


Payment to
suppliers

Nesher has a clear supplier payment policy that includes close monitoring of payment processes in order to minimize late payments, deal with exceptional cases, and meet its commitments to suppliers.


Fairness and
transparency

Nesher undertakes to operate with fairness and transparency with regard to all its suppliers, to apply equal terms, conditions and rules to all suppliers without preference for any supplier as regards to the provision of information or exposure of information about the competition.

The Company operates according to a clear ethical code that defines "boundaries" for Procurement department managers and employees, and how to handle ambiguous cases while avoiding conflict of interest situations in business agreements with suppliers.


Supplier
appraisal

All agreements with suppliers of human resource services include a supplier declaration attesting to adherence to all labor laws and legal requirements.
Nesher avoids all illegal employment of workers without work permits.


Purchase of
green products

Nesher is meticulous about purchasing products that comply with environmental protection, safety and health standards for the benefit of both the Company's employees and the environment.


Social purchasing

Nesher is meticulous about purchasing gifts from nonprofit organizations and social businesses. In 2015 the company spent approximately NIS 50,000 on social purchases.


Supervision over
supplier engagement
processes

All "requests for price proposals" processes include a set protocol for opening the bids. The winning supplier is selected using a preset process, taking into account price, supplier appraisal, availability, and other parameters. Engagement agreements are signed by authorized personnel in accordance with procedures, and order approvals are obtained in the various information systems in accordance with the type and financial scope of the order. Ongoing internal auditing processes guarantee adherence to proper engagement management processes.

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