CR_GR-GROUP-HSE-043-E-R03

CRITERIA Group

SUBCONTRACTORS HSE REQUIREMENTS MANAGEMENT

Doc. no. CR_GR-GROUP-HSE-043-E

Rev. 03

Date 04/09/2024

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CRITERIA Group

SUBCONTRACTORS HSE REQUIREMENTS MANAGEMENT

CR_GR-GROUP-HSE-043-E

Prepared

A. Fasolino HSESYE

Approved

P. Nunzi ENVEM

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Date 04/09/2024

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Revision Summary

Date

Revision

Prepared

Approved

21/12/2023

08/08/2024

04/09/2024

R. Sainato SHSEQ

A. Fasolino HSESYE

HSEQ

P. Nunzi ENVEM

First issue.

Description of Revision 01

Description of Revision 02

This Criteria cancels and replaces the following documents: •

“HSE Requirements for Non-Critical Services” Specification (Doc. no. SPC_GR-GROUP-HSE-126-E-R01) dated 21/12/2023 “HSE Requirements for Critical Services” Specification (Doc. no. SPC_GR-GROUP-HSE-127-E-R01) dated 21/12/2023 “HSE Requirements for Non-Critical Services” Form (Doc. no. FORM_GR-GROUP-HSE-055-E-R01) dated 21/12/2023 “HSE Requirements for Critical Services” Template (Doc. no. TMP_GR-GROUP-HSE-019-E-R01) dated 21/12/2023

•

The impact of the revision may be deemed medium.

Amended: • Revision of the methodology for the definition of HSE Requirements during Purchase Request (par § 2.1.2). • Revision of the HSE Bonus Indications (Attachment 4 par. § 5.4 and Attachment 5 par. § 5.5).

The impact of the revision may be deemed low.

Description of Revision 03

Amended: • Flow chart: Definition and Associated Evaluation Process of HSE Requirements during PR (Attachment 3 par. § 5.3).

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TABLE OF CONTENTS

INTRODUCTION

DESCRIPTION OF ACTIVITIES

Subcontractor HSE Qualification Process Definition and associated evaluation process of HSE requirement during PR Subcontractor HSE Management during Project Execution

1.1 OBJECTIVES OF THE DOCUMENT 1.2 AREA OF APPLICATION 1.3 REFERENCE DOCUMENTS 1.3.1 Internal References 1.3.2 External References 2. 2.1 SUBCONTRACTOR HSE MANAGEMENT FOR SERVICES 2.1.1 2.1.2 2.1.3 3. 3.1 DEFINITIONS 3.2 ABBREVIATIONS AND ACRONYMS 4. 5. 5.1 ATTACHMENT 1 – ASSESSMENT OF HSE CRITICALITY LEVEL 5.2 ATTACHMENT 2 – FLOW CHART: QUALIFICATION PROCESS 5.3 ATTACHMENT 3 – FLOW CHART: DEFINITION AND ASSOCIATED EVALUATION PROCESS OF HSE REQUIREMENTS DURING PR 5.4 ATTACHMENT 4 – DRAFT OF HSE BONUS SCHEME FOR PR & CONTRACT 5.5 ATTACHMENT 5 – BONUS AMOUNT FOR CONTRACT TYPOLOGY

DEFINITIONS, ABBREVIATIONS AND ACRONYMS

ARCHIVING AND DOCUMENT STORAGE

ATTACHMENTS

4 4 4 4 4 4 5 5 5 6 7 8 8 10 10 11 11 12

13 14 16

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INTRODUCTION

1.1 OBJECTIVES OF THE DOCUMENT

In line with the principles of “HSE” Management System Guideline (Doc. no. MSGGR-GROUP-HSE-001-E) and “Supply Chain” Management System Guideline (Doc. no. MSGGR-GROUP-SC-001-E), the objectives of this Criteria are to outline methodologies and provide guides for the Subcontractors HSE requirements management.

1.2 AREA OF APPLICATION

This Criteria applies to Saipem SpA and to all its Subsidiaries with reference to HSE Requirements for services. This Criteria does not apply to HSE Requirements for goods for which HSE Requirements are outlined in the applicable technical standards that shall be defined within the Purchase Request. In addition to the above, for purchasing of specific goods, dedicated HSE Requirements are established in Saipem Specifications (e.g. Vehicles/boats/aircrafts for passengers, PPE, Tools for Work at Height, etc.) and other documentation available in Document System, such as “Operational control of Environmental aspects” Criteria (Doc. no. CR_GR-GROUP-HSE-013-E). For instance, in case of HSE critical equipment and the related component identified as 3s in AMOS, the Maintenance Procedure and Asset Integrity Procedures for HSE critical equipment shall be applied.

1.3 REFERENCE DOCUMENTS

1.3.1 Internal References

•

“Model 231 (includes the Code of Ethics)” of Saipem SpA or “Organisational, Management and Control Model (includes the Code of Ethics)” defined by the individual subsidiaries (hereafter, both referred to as “Model”)

• “Regulatory System” Management System Guideline (Doc. no. MSGGR-GROUP-RSM-001-E)

•

“Anti-Corruption” Management System Guideline (Doc. no. MSGGR-GROUP-ANC-001-E)

“HSE” Management System Guideline (Doc. no. MSGGR-GROUP-HSE-001-E)

“Supply Chain” Management System Guideline (Doc. no. MSGGR-GROUP-SC-001-E)

“Project Execution” Management System Guideline (Doc. no. MSGGR-GROUP-EXE-001-E)

“Vendor Qualification” Standard Procedure (Doc. no. STD_GR-GROUP-SC-001-E)

“Purchasing Sub-Process” Standard Procedure (Doc. no. STD_GR-GROUP-SC-PRO-001-E)

“Management of Vendor feedback” Standard Procedure (Doc. no. STD_GR-GROUP-SC-007-E)

“Project HSE Management” Standard Procedure (Doc. no. STD_GR-GROUP-HSE-007)

“Monitoring and Reporting” Criteria (Doc. no. CR_GR-GROUP-HSE-009-E)

“Operational Control of Environmental Aspects” Criteria (Doc. no. CR_GR-GROUP-HSE-013-E)

“Safe Journey Management Air” Criteria (Doc. no. CR_GR-GROUP-HSE-016-E)

“Safe Journey Management Land” Criteria (Doc. no. CR_GR-GROUP-HSE-044-E)

“Incident Notification” Form (Doc. no. FORM_GR-GROUP-HSE-014-E)

“Products/Services Guideline” Form (Doc. no. FORM_GR-GROUP-HSE-033-E)

“HSE Requirements for Services” Template (Doc. no. TMP_GR-GROUP-HSE-043-E)

“Technical Bid Evaluation” Form (Doc. no. FORM_GR-GROUP-SC-PRO-008-E)

1.3.2 External References

•

ISO 45001:2018 - Occupational Health & Safety Management Systems

ISO 14001:2015 - Environmental Management Systems

ISO 50001:2018 - Energy Management Systems

ISO 31000:2018 - Risk Management

ISO 9001:2015 - Quality Management Systems

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•

ISO 37001:2016 - Anti-Bribery Management Systems

IOGP Report 423-01 - Contractor HSE Capability Assessment and scoring system

DESCRIPTION OF ACTIVITIES

2.1 SUBCONTRACTOR HSE MANAGEMENT FOR SERVICES

The Subcontractor HSE Management process for the provision of Services consists of three main steps outlined in the following paragraphs:

Subcontractor HSE Qualification process (see par. § 2.1.1);
Definition and associated evaluation process of HSE Requirements during Purchase Request (see par. §

2.1.2)

Subcontractor HSE management during Project Execution (see par.§ 2.1.3).

2.1.1 Subcontractor HSE Qualification Process

The involvement of the HSE department in the Qualification process is described in the “Supply Chain” Management System Guideline (Doc. no. MSGGR-GROUP-SC-001-E) and “Vendor Qualification” Standard Procedure (Doc. no. STD_GR-GROUP-SC-001-E). Before providing any Services to Saipem, a Subcontractor shall be qualified for specific Commodity Codes (CC).

2.1.1.1 Commodity Code Classification

Any type of service provided by a Subcontractor is associated with a Commodity Code, and the HSE criticality is evaluated for each CC. The different levels of HSE criticality lead to different paths of the Subcontractor HSE management; the levels are:

• Highly Critical

• Critical

• Not Critical The assessment of the HSE criticality level, including the one associated to new CCs, is based on the feedback received from the Business Lines and the analysis of the HSE data, in particular the HSE data collected via InSight (see Attachment 1 from par. § 5.1). The assessment of the HSE criticality level is subjected to the periodic review according to operational needs and management indications. The outcome of the HSE Criticality Level Classification for any CCs is reflected in the ‘Commodity Code Tree’ available in the Subcontractor management dedicated Tool for the qualification process (SupplHi).

2.1.1.2 Qualification Process

The Subcontractor Qualification process is described in the “Vendor Qualification” Standard Procedure (Doc. no. STD_GR-GROUP-SC-001-E) and is managed by the dedicated Tool (SupplHi). As per the above Standard, all new candidate Subcontractors, regardless of the HSE Criticality level, will compile a general Questionnaire that includes a basic HSE requirements. For Subcontractors with Commodity Codes identified as Critical or Highly Critical, the Subcontractor HSE management system will be evaluated through some additional HSE requirements. For Qualification of Subcontractor associated with Highly Critical Commodity Codes H&S Certification are mandatory (e.g., ISO 45001). In reference to the qualification process of air transportation of passengers it is outlined in “Safe Journey Management Air” Criteria (Doc. no. CR_GR-GROUP-HSE-016-E). Methodology for HSE Qualification Evaluation is shown in the chart from Attachment 2 (see par. § 5.2). The collection of documentation and qualification assessment are managed by the dedicated Tool (SupplHi) where the Subcontractor HSE documentation is archived. The outcome of this assessment can be:

• Acceptable

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• Not acceptable

In the qualification process, an assessment visit can be required based on the analysis of the Subcontractor documentation received.

2.1.2 Definition and associated evaluation process of HSE requirement during PR

The definition of needs related to provision of services shall be described in the Purchase Request (PR), which requires the involvement of the HSE department as defined in the “Purchasing Sub Process” Standard Procedure (Doc. no. STD_GR-GROUP-SC-PRO-001-E). The PR contains:

Managerial information / documents (mainly needed to address the PR authorization process)
Technical information/documents (needed to define the Scope of Work), which shall include: a) “HSE Requirements for Services” Template (Doc. no. TMP_GR-GROUP-HSE-043-E). b) Customized HSE Bonus Scheme (refer to Attachment 4 see par. § 5.4) when the Bonus Scheme is

applicable for services.

c) Requirements for Technical Bid Evaluation (TBE), when it is required, it can be performed using “Technical Bid Evaluation” Form (Doc. no. FORM_GR-GROUP-SC-PRO-008-E) as per “Purchasing Sub Process” Standard Procedure (Doc. no. STD_GR-GROUP-SC-PRO-001-E).

The HSE Requirements for all Services, regardless of the HSE Criticality level, shall be customized by using the “HSE Requirements for Services” Template (Doc. no. TMP_GR-GROUP-HSE-043-E) (see Attachment 3 from par. § 5.3). The “HSE Requirements for Services” Template (Doc. no. TMP_GR-GROUP-HSE-043-E) can be also used to set HSE Requirements for services performed at specific Site (or Worksite / Operating Company, etc) related to specific Commodity Code(s); the customized Template can be used for multiple PRs. The HSE Requirements shall be identified considered the following elements:

• The HSE Criticality levels from the ‘Commodity Code Tree’

• Scope of Work (SoW)

•

International and local regulations

• Saipem internal procedures

• Contractual requirements of the Client.

The HSE Requirements for Services shall be defined also taking into account environmental topics such as the ones regulated by the “Operational Control of Environmental Aspects” Criteria (Doc. no. CR_GR-GROUP- HSE-013-E). These Requirements are intended to be in addition to the General Terms and Conditions provided to Subcontractor by Saipem Supply Chain Department. The HSE requirements are intended to be applied to the Subcontractors and their own Sub-Subcontractors (if any). HSE Subcontractor is accountable of its own HSE Performance and Sub-Subcontractor performance (if any). To maintain the proper Subcontractor’s stewardship and HSE management system effective implementation during contracted activities, any Sub-Subcontractor shall be promptly notified to Saipem and consequently formally approved prior to their effective mobilization.

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With reference to the Subcontractor HSE Evaluation, the Subcontractor documentation shall be evaluated and assessed based on the guidance in the following table.

SUBCONTRACTOR HSE EVALUATION OUTCOME

DESCRIPTION

Unacceptable

Acceptable

Subcontractor documentation is not provided and/or not available. Subcontractor documentation is not in compliance with Saipem HSE Requirements; highlights insufficient HSE organization and assets; not acceptable HSE performances.

Subcontractor documentation complies with Saipem HSE Requirements, local and international laws and applicable standards; highlights comprehensive and effective HSE organization and assets, good HSE performances.

Table 1 - HSE Evaluation Criteria

In the Subcontractor HSE evaluation process, an audit/physical inspection can be requested case by case before the completion of the Subcontractor HSE Evaluation.

Particular cases:

• For Subcontractor working at its own premises where presence of Saipem personnel is not expected, and in any case when the services are provided out of Saipem’s premises and without involvement of Saipem personnel, the “HSE Requirements for Services” Template (Doc. no. TMP_GR-GROUP-HSE-043-E) is not required. General Terms and Conditions provided to Subcontractor by Saipem Supply Chain Department shall be followed.

• For Services classified as Highly Critical the implementation of the Bonus Scheme shall be evaluated during the PR process and always applied. Bonus Scheme is a contractual incentive scheme defined within the contractual conditions. This scheme will be oriented to reward excellent results in safety or discouraging non-compliance with regulations, procedures and good practices aimed at protecting the health and safety of workers and the environment (refer to Attachment 4 from par. § 5.4). Roles and Responsibility for the application of the Bonus Scheme are defined in the “Project HSE Management” Standard Procedure (Doc. no. STD_GR-GROUP-HSE-007-E). The amount of bonus shall be defined according to Table 3 – Bonus amount for contract typology” from Attachment 5 (see par. § 5.5). The minimum contractual value threshold to be considered for the applicability of the bonus scheme is 1 Million euros. The applicability of the Bonus scheme for ongoing execution projects started before the issuing of this Criteria and for projects in the process of acquisition/offers started before the issuing of this Criteria must be assessed on a case-by-case basis.

2.1.3 Subcontractor HSE Management during Project Execution

Safety Reporting Boundaries shall be defined for each Subcontractor in accordance with “Monitoring and Reporting” Criteria (Doc. no. CR_GR-GROUP-HSE-009-E). The Subcontractor Project HSE Management is regulated by dedicated documents, the document references for each phase of the Project Execution are listed in the following paragraphs.

2.1.3.1 Execution of Work

Subcontractor HSE Management during Project Execution is outlined in the Project Execution Standards.

2.1.3.2 HSE Performance Feedback

HSE Feedback activities consist of the analysis and monitoring of performance with the purpose of producing an objective evaluation of the capabilities/reliability of Subcontractors that may be used by different company functions as reported in “Management of Vendor Feedback” Standard Procedure (Doc. no. STD_GR-GROUP- SC-007-E). In case of inadequate HSE performance it is possible to raise a ‘Points of Attention’ (PoA) in the dedicated Tool (SupplHi).

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DEFINITIONS, ABBREVIATIONS AND ACRONYMS

3.1 DEFINITIONS

AMOS

Assessment visits

Audit

The name of the software used for the management of the maintenance and warehouse activities on board of the vessel and in the yard.

Assessment performed at the Subcontractor’s premises regarding its managerial, organizational, logistical capabilities, and to collect and assess further information about it, according to Saipem standards and the applicable International Standards.

technological, productive, and

Systematic, independent, and documented process designed for obtaining audit evidence (registrations, declarations of facts or other verifiable information deemed significant for audit purposes) and evaluating it objectively to determine the extent to which the audit criteria are fulfilled.

Commodity Code

Term identifying a homogeneous group of products and services according to their nature or use.

Commodity Code Criticality

Company

Contract

Fatality

Feedback

Goods

The criticality level of a Commodity Code is defined by Procurement / Post Order Function / Vendor Management Department (with the support of Technical Department, i.e. ENG, HSE, SECUR, HR, etc.) based on Business and HSE aspects. The levels of criticality defined are:

• Non Critical: goods/services that meet commercial standards and are usually available on the market; goods/services with a low impact on the Company’s performance and Technical/HSE aspects;

• Critical: applicable to goods/services with a medium or high influence (Highly Critical) impact on Saipem performance or Technical / HSE areas, such as goods impacting the quality of the final product or services involving high risk activities.

Commodity Codes are managed in accordance with the relevant Group Standard Procedures.

Saipem SpA and any direct or indirect Subsidiary, whether in Italy or abroad.

Closed Contract for Work / Services provision.

The effect of a fatal accident.

All information relating to the performance of the Subcontractor during all phases of the procurement and supply of goods, process, services, and execution of the Order / Contract.

Any material, component, device, functional unit, equipment, machine, machinery, subsystem, or system manufactured by a Subcontractor and required to carry out Saipem Group activities.

High Potential Event (HIPO)

Any work-related event that, in slightly different circumstances, could have caused fatality and/or very costly damage to property / assets and the environment.

Any work-related event with potential consequence for people and/or asset and/or e≥ L4 - Ref. to “Incident Notification” Form (Doc. no. FORM_GR- GROUP-HSE-014-E).

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InSight

Software developed to support the HSE activities (Reporting data and indicators, Incident Investigation process, HOC Cards process, HSE Inspections, HSE Audit process, Training, Asset Integrity, Emergency drills, PPE management). The tool is supported by Dashboard for extraction and development of all data. The access link is: Insight

Purchase Request (PR)

Document issued based on a Requesting Department requirement to activate the purchase of the goods and/or services to be supplied.

Qualification process

Process for assessing the competences and capabilities of a Vendor.

Requesting Department

The Company department issuing, according to the goods and services needed, the Purchase Request and the relevant documentation (in the MSG Supply Chain the Requesting Department is named Customer Department).

Services

Any activities work or services carried out by a Subcontractor which is required for the implementation of the activities of the Saipem Group.

Subcontractor

Entity that can potentially supply services.

Subsidiary

Company that is directly or indirectly controlled by Saipem SpA.

SupplHi

The Vendor Management SaaS adopted by Saipem to manage the vendor base.

Total Recordable Injury (TRI)

Term to define the sum of Lost Time Injuries, Work Restricted Cases and Medical Treatment Cases: TRI = LTI + WRC + MTC.

Vendor

Intended as Supplier or Subcontractor.

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3.2 ABBREVIATIONS AND ACRONYMS

AMOS

Asset Management Operating System

ENG

HIPO

HSE

Commodity Codes

Engineering

High Potential Event

Human Resources

Health, Safety & Environment

HSE MS

Health, Safety & Environmental Management System

KPI

PPE

Key Performance Indicator

Personal Protective Equipment

SECUR

Security

SoW

TBE

Scope of Work

Technical Bid Evaluation

ARCHIVING AND DOCUMENT STORAGE

The functions/departments and the positions involved in the activities regulated by this Criteria shall ensure, each within their own sphere of responsibility, archiving and storage of the produced hard copy and/or electronic documentation, to enable the reconstruction of the different phases of the process.

The original, hard copy and/or electronic documentation shall be retained in compliance with Saipem regulations.

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ATTACHMENTS

The following attachments are integral parts of this Criteria: • Attachment 1 – Assessment of HSE Criticality Level • Attachment 2 – Flow Chart: Qualification Process • Attachment 3 – Flow Chart: Definition and associated evaluation of HSE requirements during PR • Attachment 4 – Draft of HSE Bonus Scheme for PR & Contract • Attachment 5 – Bonus Amount for Contract Typology

5.1 ATTACHMENT 1 – ASSESSMENT OF HSE CRITICALITY LEVEL

The HSE data collected via InSight are analysed considering all information that might be useful for the scope and analysing the incident investigation where the dedicated fields “Work Process Type” and “Work Process” can be selected. The sets of options available to the users for these fields (see Table 2 - Work Process Type and Work Process fields’ below) are designed to be aligned with main clusters of Commodity Codes. The analysis of this data feeds the assessment and periodic review of the HSE Criticality of the Commodity Codes.

WORK PROCESS TYPE

WORK PROCESS

Fabrication & Prefabrication
Lifting / Crane / Rigging / Deck Operations
Marine Activities
Drilling Operations
Excavation, Trenching, Ground Disturbance
Manual Handling / Operations
Precommissioning / Commissioning and Start-Up
Logistics & Transportation
Decommissioning
Construction
Operations & Maintenance
Routine Drilling Operations
Hot Work (e.g. Welding, Cutting, Painting, Insulation)

Installation

Disassembly

/ Assembly

/ Erection

/ Demolition

Office / Warehouse / Accommodation / Catering
Maintenance, Monitoring, Inspection and Testing
Diving, Subsea & R.O.V. Activities
Environmental Activities
Not Work Related / Off-Duty
Operation

Table 2 - Work Process Type and Work Process fields

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5.2 ATTACHMENT 2 – FLOW CHART: QUALIFICATION PROCESS

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5.3 ATTACHMENT 3 – FLOW CHART: DEFINITION AND ASSOCIATED EVALUATION PROCESS OF HSE REQUIREMENTS DURING PR

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5.4

ATTACHMENT 4 – DRAFT OF HSE BONUS SCHEME FOR PR & CONTRACT

❖ Article to be added to Work / Service Contract with HSE-Highly Critical CC

“HSE – KEY PERFORMANCE INDICATORS (“KPI”) & BONUS MECHANISM”

The PARTIES have agreed the HSE key performance indicators and related bonus mechanism set out

in the [FORM NAME/NUMBER e.g., HSE-KPI and BONUS MECHANISM Annex] (“KPI”).

The performance of the KPI shall be monitored starting from the EFFECTIVE DATE until [the issuance of the COMPLETION CERTIFICATE or equivalent] (“MONITORING PERIOD”), provided that, in case the [WORK CONTRACT/SERVICE CONTRACT/WORK ORDER] is suspended, the monitoring shall be interrupted for a period of time equal to the relevant suspension, and SUB-CONTRACTOR shall be entitled to the defined bonuses the event KPI defined therein are achieved.
 CONTRACTOR shall communicate in writing the results – and, hence, the KPI reached – to SUB- CONTRACTOR, and SUB-CONTRACTOR shall be allowed to invoice the amount indicated therein, in accordance with the invoicing procedure set forth in the [WORK CONTRACT DOCUMENTS/SERVICE CONTRACT DOCUMENTS/AGREMEENT DOCUMENTS].
 Notwithstanding the above, SUB-CONTRACTOR shall not be entitled to the financial bonus, if, during

the MONITORING PERIOD:

•

the [WORK CONTRACT DOCUMENTS / SERVICE CONTRACT DOCUMENTS / AGREMEENT DOCUMENTS] are terminated for reasons attributable to SUB-CONTRACTOR GROUP; or

• one or more fatalities occurs during the MONITORING PERIOD, regardless of the victim being a member of CONTRACTOR GROUP and/or SUB-CONTRACTOR GROUP and/or a THIRD PARTY.

The total maximum amount of the financial bonus recognisable under the [WORK CONTRACT DOCUMENTS/SERVICE CONTRACT DOCUMENTS/AGREMEENT DOCUMENTS] shall be XXXX Euro [this amount shall be calculated in accordance with Table 3 – Bonus amount for contract typology].

❖ General Instructions for the definition of HSE-KPI and BONUS MECHANISM Annex

1.1

1.2

1.3

1.4

Provided that no reason of termination for cause stated in the CONTRACT exists, CONTRACTOR shall be granted a financial bonus linked to its HSE performance during the CONTRACT based on the following terms and conditions.

Such bonus shall depend on the level of achievement by CONTRACTOR of the HSE indicators listed in the clause 1.5.

The bonus shall be determined by HSE on a yearly basis, starting from the EFFECTIVE DATE of the CONTRACT. Within two (2) months following the relevant year of application of the bonus, COMPANY shall determine the bonus taking into account the HSE performance of CONTRACTOR during the previous year and shall communicate in writing the result to CONTRACTOR. CONTRACTOR shall then be allowed to invoice the amount corresponding to the bonus, in accordance with the provision of this CONTRACT.

Notwithstanding the above, in case of one or more fatalities occurring during the performance of the CONTRACT, regardless of the victim being a member of COMPANY GROUP or a member of CONTRACTOR GROUP or a THIRD PARTY, CONTRACTOR shall be granted no bonus. In such case, (i) if the COMPANY has already paid the bonus for the previous year(s) to CONTRACTOR, CONTRACTOR shall reimburse to COMPANY the bonus and COMPANY shall have the right to withhold payments or set-off against payments due to CONTRACTOR an amount corresponding to the bonus already paid, (ii) if COMPANY has not paid yet any bonus to CONTRACTOR, the bonus for the current and the following year(s) of the CONTRACT shall be equal to zero (0).

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1.5

The bonus shall be calculated according to the following formula:

B = K x APS x HSE

where:

• B means the bonus which shall be granted to CONTRACTOR, varying from zero (0) up to a maximum as defined in Table - 3 Bonus amount for contract typology’. Under no circumstances the bonus shall be negative;

• K means the maximum bonus; • APS (Annual Payment Scheme) means the portion of the CONTRACT PRICE, specified in this Annex “A” - Compensation, corresponding to the total expenditure for construction activities performed under this CONTRACT in the relevant year (or portion of year if the last period of application of the bonus is shorter than one (1) year), duly invoiced by CONTRACTOR to COMPANY in accordance with the provisions of this CONTRACT, without considering the engineering and procurement costs. Invoiced amounts related to construction activities which are disputed shall not be considered in the calculation of the bonus until a settlement is agreed between the PARTIES;

• HSE means the overall HSE indicator representing the level of achievement of the specific HSE indicators listed herein. The value of the overall HSE indicator shall be in any case between zero (0) and one (1) and shall be calculated according to the following formula and criteria.

HSE parameter to be defined considering Lagging Indicators and Leading indicators to be set at project levels.

Example of Lagging Indicators:

Number and relevant action ongoing/closed related to:

• Total Recordable Injury (TRI)

•

Life Altering Injury (or Permanent Impairment)

• High Potential Event (HIPO)

• Fatality

Example of Leading Indicators that can be identified by the project:

• Number of HSE procedures violation per month

• Number of incorrect Use of PTW per month

• Number of Toolbox Talk per month

• Number of Senior management Walkabout per month

• Number of HSE audit performed per month

• Number of self-verifications performed per month

• Number of joint inspections per month

For reference a formula that can be applied is:

HSE = 0.2 HSE1 + 0.2 HSE2 + HSE3 + 0.2 HSE4 + 0.2 HSE5 + 0.2 HSE6

Saipem Classification - General Use

Docusign Envelope ID: BFB4AA2C-088E-426A-B3BD-9393665AF0FC

CRITERIA Group

SUBCONTRACTORS HSE REQUIREMENTS MANAGEMENT

Doc. no. CR_GR-GROUP-HSE-043-E

Rev. 03

Date 04/09/2024

Page 16 of 16

5.5 ATTACHMENT 5 – BONUS AMOUNT FOR CONTRACT TYPOLOGY

The HSE Bonus mechanism shall be shared only with the Selected Bidder.

In the Service Contract price list a dedicated line should be added in SAP in order to segregate the amount of the HSE Bonus. The relevant budget should be covered by the PR, if needed by means of PR revision.

The amounts proposed are not subject to negotiation by the Vendor being a Bonus.

The typology of contract shall be taken into account for the definition and calculation of financial bonus as listed in the table below:

TYPOLOGY OF CONTRACT

BONUS AMOUNT

Re-measurable contracts with contractual split of material/labour prices Re-measurable contracts without contractual split of material/labour prices Lumpsum Contracts

Vessel Chartering Contracts (based on daily rates, excluded fuel)

1% of overall labour price

0,75% of Service Contract amount (Rev.0)

0,5% of Charter Contract amount (Rev.0)

Table 3 - Bonus amount for contract typology

Saipem Classification - General Use

Docusign Envelope ID: BFB4AA2C-088E-426A-B3BD-9393665AF0FC

Project: Q-32705 - Saipem COMP3 Folder: RFQ Files

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