case studies - Dresser-Rand
case studies - Dresser-Rand
case studies - Dresser-Rand
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DRESSER-RAND<br />
AT A GLANCE<br />
<strong>Dresser</strong>-<strong>Rand</strong> Group Inc. is among the largest suppliers of custom-engineered<br />
rotating equipment solutions for the worldwide energy infrastructure, including<br />
oil, gas, petrochemical, power generation, and process industries. Our high-speed<br />
rotating equipment is also supplied to the environmental solutions markets within<br />
the energy infrastructure.<br />
Our products—centrifugal and reciprocating gas compressors, gas and steam<br />
turbines, gas expanders, gas and diesel engines, and associated control panels—<br />
are used in oil and gas production, high-pressure field injection and oil recovery,<br />
gas liquefaction, gas transmission, refinery processes, natural gas processing,<br />
petrochemical production, general industry (including paper, steel, sugar,<br />
and distributed power), power generation, and military applications. Our<br />
custom-engineered products are also used in other advanced applications in<br />
the environmental markets we serve, where they reduce carbon footprint and<br />
increase energy efficiency. These include, among others, hot gas turbo-expanders<br />
for energy recovery in refineries; co- and tri-generation combined heat and<br />
power (CHP) packages for institutional and other clients; and a large number<br />
of steam turbine applications to generate power using steam produced by<br />
recovering exhaust heat from a multitude of sources. Biomass and biogas<br />
applications for our steam turbine product line include gasification of<br />
municipal solid waste or incineration of wood, palm oil, sugar, or pulp<br />
and paper residues to generate power. Our equipment is used in compressed<br />
air energy storage (CAES) applications for utility-sized power generation that is<br />
environmentally friendly and provides unique grid management features.<br />
We have the largest installed base in the world of our class of equipment,<br />
encompassing a legacy of more than 40 reputable brands.<br />
<strong>Dresser</strong>-<strong>Rand</strong> has one of the most extensive global service and support organizations<br />
in the industry. The company offers a full range of original equipment manufacturer<br />
(OEM) parts, field solutions, revamps and rerates, remanufacturing, product<br />
training, and upgrades.<br />
Our clients know us best for our ability to bring equipment solutions and premier<br />
service for rotating equipment to the energy infrastructure markets. We continue<br />
to widen our markets by investing in new technologies and companies that offer<br />
exceptional environmental benefits and the economic value propositions that allow<br />
our clients’ facilities to operate more efficiently or help them to be more competitive<br />
in their markets.<br />
Our worldwide client base consists of oil and gas producers and distributors,<br />
national oil companies (NOC), and chemical and industrial companies in<br />
more than 150 countries. We have long-term supplier alliance agreements with<br />
approximately 50 of our clients.<br />
<strong>Dresser</strong>-<strong>Rand</strong> has headquarters in Houston, Texas, and Paris, France. The company<br />
has approximately 7,500 employees and operates 13 manufacturing facilities in<br />
seven countries (United States, France, United Kingdom, Germany, Spain, Norway,<br />
and India), 49 service and support centers, including six engineering and research<br />
and development centers, and 76 sales offices in 32 countries.<br />
<strong>Dresser</strong>-<strong>Rand</strong> Group Inc. is a publicly traded company listed on the New York<br />
Stock Exchange (symbol: DRC).
TABLE OF CONTENTS<br />
Overview<br />
<strong>Dresser</strong>-<strong>Rand</strong> at a Glance ...............................IFC<br />
Overview ........................................................... 1<br />
CEO Letter ......................................................... 2<br />
Corporate Vision, Mission,<br />
Guiding Principles, and Values ........................... 3<br />
Our Approach to Sustainability ......................... 4<br />
Our Sustainability Principles .............................. 5<br />
Stakeholder Engagement .................................... 6<br />
Key Issues ............................................................ 7<br />
Environment .................................................... 10<br />
Climate Change ................................................ 12<br />
Driving Efficiency in<br />
Our Clients’ Operations ................................... 14<br />
Operational Excellence in<br />
Our Operations ................................................. 16<br />
Society .............................................................. 18<br />
Localization ......................................................20<br />
People ................................................................22<br />
Health & Safety ................................................24<br />
Community ......................................................26<br />
Suppliers ............................................................ 29<br />
Using Technology to Improve Lives .................30<br />
Governance ...................................................... 32<br />
Our Approach to Governance ..........................34<br />
Global Reporting Initiative (GRI) Index .........38<br />
DRESSER-RAND<br />
SUSTAINABILITY COUNCIL<br />
Asier Alea<br />
Business Development Manager—<br />
Environmental Solutions<br />
Blaise Derrico<br />
Vice President, Investor Relations<br />
Brad Dickson<br />
Vice President, Chief Marketing Officer<br />
Mark Mai<br />
Vice President, General Counsel & Secretary<br />
Ken Marcia<br />
Vice President, Worldwide Supply Chain<br />
& Process Innovation<br />
Jim Methven<br />
Director, Global Singular Processes<br />
Gustavo Nechar<br />
Vice President, Human Resources<br />
Jesus Pacheco<br />
Executive Vice President, New Equipment<br />
Worldwide<br />
Peter Salvatore<br />
Vice President, Chief Safety Officer<br />
Greg Stubbs<br />
Senior Manager, Sustainability &<br />
HSE Process Innovation<br />
The <strong>Dresser</strong>-<strong>Rand</strong> Sustainability Council represents a<br />
cross-functional team of senior managers and executive<br />
leaders chartered by our CEO with board oversight. The<br />
council is charged with developing a sustainability strategy<br />
of competitive advantage that engages opportunities of<br />
shared value for <strong>Dresser</strong>-<strong>Rand</strong> and its stakeholders. We wish<br />
to thank Jim Methven, Ken Marcia and Jesus Pacheco for<br />
their valuable input over the last three years, and welcome<br />
Ann Ackerson, vice president, Supply Chain, and Scott Wisler,<br />
director, Centers of Technical Excellence, to the Council.<br />
On the cover: <strong>Dresser</strong>-<strong>Rand</strong> supplied this<br />
turbine generator set to Portugal in 2007.<br />
The plant burns 13 tonnes/hr of a forestry<br />
residue/cork dust biomass mixture,<br />
producing power for the grid.<br />
ECONOMIC IMPACT<br />
($ in millions, except EPS) 2011 2010 2009 2008<br />
Revenue $2,311.6 $1,953.6 $2,289.6 $2,194.7<br />
Cash flow from operating activities 108.1 375.6 129.8 234.8<br />
Net income 119.7 146.7 210.8 197.7<br />
Diluted earnings per share 1.53 1.80 2.57 2.36<br />
Annual shareholder return:<br />
DRC 17.1% 34.7% 83.0% -55.5%<br />
S&P 500 0.0% 12.8% 15.2% -36.8%<br />
PHLX Oil Service Sector Index -11.5% 25.8% 61.6% -59.9%<br />
Wages and benefits $657.4 $574.2 $562.6 $534.5<br />
Taxes paid $47.4 $111.5 $129.1 $109.1<br />
EC1 & EC3 GRI METRICS<br />
Revenue $2,311.6 $1,953.6 $2,289.6 $2,194.7<br />
Operating costs 1,397.1 1,116.9 1,377.1 1,328.1<br />
Selling & administrative expenses 364.6 300.5 287.3 273.8<br />
Employee compensation (wages<br />
& benefits)<br />
657.4 574.2 562.6 534.5<br />
Donations & other community<br />
investments<br />
698.9 293.0 392.0 411.0<br />
Retained earnings (end of period) 904.5 784.8 638.1 427.3<br />
Payments to capital providers<br />
(cash paid for interest)<br />
62.2 31.7 31.1 33.9<br />
Payments to governments (gross taxes) 47.4 111.5 129.1 109.1<br />
Coverage of defined benefit plan obligations Refer to 2011 10-K notes 11 & 12<br />
OPERATING COSTS:<br />
Cost of sales $1,662.3 $1,366.7 $1,632.1 $1,576.1<br />
Selling & administrative expenses 364.6 300.5 287.3 273.8<br />
Research and development expenses 27.6 23.9 20.3 12.7<br />
Employee compensation<br />
(wages & benefits)<br />
(657.4) (574.2) (562.6) (534.5)<br />
Total operating costs $1,397.1 $1,116.9 $1,377.1 $1,328.1<br />
ENDING HEADCOUNT<br />
Asia Pacific 524 500 414<br />
Europe 2,099 1,472 1,498<br />
Latin America 726 145 191<br />
Middle East/Africa 104 91 29<br />
North America 4,053 3,944 3,977<br />
Grand total 7,506 6,152 6,109<br />
HEADCOUNT PERCENT BY REGION<br />
Asia Pacific 7.0% 8.1% 6.8%<br />
Europe 27.9% 23.9% 24.5%<br />
Latin America 9.7% 2.4% 3.1%<br />
Middle East/Africa 1.4% 1.5% 0.5%<br />
North America 54.0% 64.1% 65.1%<br />
Total 100.0% 100.0% 100.0%
REVENUE BY BUSINESS SEGMENT<br />
47% New Units<br />
REVENUE BY END MARKET<br />
17% Environmental<br />
4% Other<br />
36% Refining<br />
and Chemical<br />
53% Aftermarket<br />
Parts & Services<br />
WORLDWIDE OPERATIONS AS OF 12/31/11<br />
■ 49 Service and Support Centers<br />
● 13 Manufacturing Facilities<br />
32% Oil &<br />
Gas Production<br />
11% Gas<br />
Transmission<br />
REVENUE BY DESTINATION<br />
14% Middle<br />
East & Africa<br />
15% Asia Pacific<br />
22% Europe<br />
18% Latin America<br />
EMPLOYEE BREAKDOWN<br />
BY REGION (TOTAL 7,506)<br />
54.0% North America<br />
9.7% Latin<br />
America<br />
7.0% Asia<br />
Pacific<br />
31%<br />
North America<br />
27.9% Europe<br />
1.4% Middle East/<br />
Africa
The future success of DRESSER-RAND relies upon continuing our<br />
legacy of supplying long-lasting, custom-engineered, energy-efficient<br />
product and service solutions. A significant factor in our success<br />
is our ability to operate efficiently, which is why we are focusing<br />
company-wide on OPERATIONAL EXCELLENCE. We intend to<br />
build on our strengths by implementing global singular processes<br />
(GSP) so that we are maximizing our successes. When we operate<br />
more efficiently, we reduce cost, cycle time and—importantly—waste.<br />
Through our expertise and innovative technologies, we are creating<br />
a more sustainable tomorrow—for our clients, employees, suppliers,<br />
stockholders, and the communities where we work. We are using data,<br />
processes, people, and technology to define a common way of doing<br />
business with less repetition across operations. <strong>Dresser</strong>-<strong>Rand</strong> is truly<br />
focused on bringing energy and the environment into harmony.<br />
OVERVIEW<br />
CORPORATE SUSTAINABILITY REPORT 1
TO OUR<br />
STAKEHOLDERS<br />
<strong>Dresser</strong>-<strong>Rand</strong> is proud of the progress we have been making on bringing energy and the environment into harmony. At <strong>Dresser</strong>-<strong>Rand</strong>,<br />
our approach to sustainability covers issues relating to the environment, society and governance.<br />
Our mission for 2012 and beyond is to grow value for our stockholders in a way that is sustainable. 2012 will be a year in which we<br />
focus on our number one priority—safety—and strengthen the contributors to our long-term performance, with continuing emphasis<br />
on Operational Excellence.<br />
The <strong>Dresser</strong>-<strong>Rand</strong> sustainability platform includes activities to address climate change and expand our products and services for the<br />
growing environmental solutions markets. We are reducing our environmental footprint through, among other things, our Operational<br />
Excellence initiatives, and are contributing to our clients’ sustainability goals through our products and technologies. We continue to<br />
invest in local communities and continuously work to create a safe and healthy workplace for our employees.<br />
Over the past two years we redefined our markets from simply oil and gas to energy infrastructure. We are now squarely engaged in a<br />
growth strategy in the environmental solutions markets, expansion of our footprint to meet localization requirements and a step-up in<br />
technology investments to maintain our leadership position in the industry. Consistent with this strategy, this past year we invested more<br />
than $700 million in businesses that enhance our ability to serve the growing environmental solutions markets, including the acquisition<br />
of Grupo Guascor and our investment in Echogen Power Systems. More recently, on January 4, 2012, we acquired Synchrony, Inc.<br />
Guascor is a leading supplier of diesel and gas engines and provides customized energy solutions across worldwide energy infrastructure<br />
markets. Guascor has substantial experience in the design, construction and development of power generation and cogeneration plants<br />
and mini-hydroelectric plants, and the development and exploitation of wind farms and biomass, used oil and landfill energy recovery,<br />
photovoltaic solar energy, and aerobic processing.<br />
Echogen is a technology development company focused on developing innovative heat-to-electricity power generation systems that use<br />
supercritical working fluids to transform heat into power without creating new emissions. This technology drives value for the client<br />
through its unique combination of a lower cost per unit of electricity produced, compact footprint, higher energy recovery from the<br />
waste heat stream, and ability to generate power from a wider range of heat sources when compared to competing technologies available in<br />
the marketplace today. Echogen technology may be applied in many of our oil & gas markets to reduce the adverse environmental impacts<br />
such as in refining and petrochemical facilities. In addition, this technology will provide enhanced power generation in environmentally<br />
friendly combined heat and power (CHP) applications and compressed air energy storage (CAES) systems.<br />
Synchrony is a technology development company with a portfolio of world-class technologies and products including active magnetic<br />
bearings (AMB), high-speed motors and generators, and power electronics for clean, efficient and reliable rotating machinery.<br />
OPERATIONAL EXCELLENCE AND SUSTAINABILITY<br />
Over the past 10 years we have made excellent progress in improving productivity and cycle times, while reducing waste and costs<br />
through our focus on Operational Excellence. We are committed to further improvement.<br />
It’s our belief that sustainability and Operational Excellence are inextricably linked. Operational Excellence is our commitment to<br />
invest in people, processes, facilities, and supplier relationships that enable us to compete and excel in quality, cost and cycle time.<br />
With ever-increasing pressure on resources, as well as the impacts of our operations and products on the environment and society,<br />
sustainability must be at the very core of our efforts to achieve the greatest success. As we enter 2012, our initiatives will embrace<br />
Operational Excellence as we strive to embed sustainability into our operations, our supply chain, our culture, and our workforce.<br />
Our focus will be on making sure continuous improvement is effected through process improvement programs. By identifying<br />
concrete opportunities for these gains, we will strive for measurable improvement and clear accountability. These strategies are<br />
aligned with achieving Operational Excellence and ultimately contribute to the overall value and sustainability of the business.<br />
Our corporate sustainability report gives you the details behind our 2011 accomplishments and our commitments for 2012 in<br />
each of three areas—society, environment and governance. We hope you read the entire report and that you sense our enthusiasm<br />
and commitment to sustainability. We want to engage our stakeholders as a responsible corporate citizen that contributes positively<br />
to the environment and society. We welcome your feedback.<br />
We feel very good about the progress we’ve made, and we are confident about where we are going as we continue “bringing energy<br />
and the environment into harmony.”<br />
Vincent R. Volpe Jr.<br />
President and Chief Executive Officer<br />
2 DRESSER-RAND
VISION<br />
Our vision is to earn client loyalty for life.<br />
MISSION<br />
OVERVIEW<br />
Our mission is to provide the most reliable<br />
and efficient rotating equipment technology<br />
and service solutions and lead in safety,<br />
environmental stewardship, quality, and<br />
cycle time.<br />
GUIDING PRINCIPLES AND VALUES<br />
Safety and Environmental Stewardship<br />
are our priorities and critical considerations<br />
in everything we do.<br />
Integrity and Ethics guide our conduct<br />
and create the foundation for a sound<br />
business reputation.<br />
Employee Expertise and Responsibility<br />
result from recruiting, training and developing<br />
individuals, and encouraging cultural diversity<br />
in an environment of integrity, teamwork<br />
and empowerment.<br />
Operational Excellence is our commitment<br />
to invest in people, processes, facilities,<br />
and supplier relationships that enable us<br />
to compete and excel in quality, cost and<br />
cycle time.<br />
Innovation enables us to deliver unparalleled<br />
value through leading-edge technology and<br />
creative solutions.<br />
Lifelong Support focused on servicing<br />
a global installed base is essential for our<br />
long-term growth and client satisfaction.<br />
Lifelong Loyalty acknowledged by all<br />
employees as the ultimate driver of our<br />
success. Achieved through disciplined<br />
processes and reflects a supportive<br />
attitude that delivers long-term relationships<br />
with clients.<br />
Increased Stockholder Value through<br />
superior financial performance and growth.<br />
CORPORATE SUSTAINABILITY REPORT 3
OUR APPROACH TO<br />
SUSTAINABILITY<br />
4 DRESSER-RAND<br />
Sustainability provides a framework for understanding emerging trends, viewing<br />
the world holistically and understanding how these emerging trends in society,<br />
technology and energy resources should influence our business decisions.<br />
By 2050, the world’s population is expected to grow from nearly seven billion<br />
to more than nine billion people. Most of this population growth will occur in<br />
developing countries. As the world’s population grows, the demand on all<br />
energy resources will increase. Even as the United States establishes global<br />
goals to achieve 20% of its energy coming from renewables by 2030, fossil<br />
fuels will remain the prime source in its energy basket through 2050. And<br />
with 75 years of oil and 130 years of natural gas available to us, these natural<br />
resources will be sufficient to meet the energy demand and growth of the<br />
developing countries into the future.<br />
<strong>Dresser</strong>-<strong>Rand</strong> supports the prudent development of our oil, gas and coal<br />
natural resources. Investment in technologies that enhance the efficiencies<br />
of our clients’ operations and lower carbon intensity are aligned with our<br />
sustainability principles.<br />
Therefore, we believe we can support sustainability by investing in advanced<br />
technologies and improving our core products and services. Also, we continue<br />
to position <strong>Dresser</strong>-<strong>Rand</strong> in expanding our support of environmental solutions,<br />
emerging renewables technologies and alternative energy markets. We<br />
do this by using a diligent approach to innovation and investing in new and<br />
emerging technologies.<br />
We continue to build upon our sustainability principles and values by following<br />
a business approach that deals with sustainability issues that intersect with our<br />
value chain. This presents opportunities for shared value with our clients that are<br />
also important to our stakeholders and the greater societies where we operate.<br />
OUR SUSTAINABILITY PRINCIPLES<br />
• Maintaining the highest standards of business ethics, governance, integrity,<br />
and safety<br />
• Embracing opportunities and managing risks deriving from economic,<br />
environmental and social developments<br />
• Responsibly using material and energy resources<br />
• Providing environmental solutions with economic value for our clients<br />
• Addressing issues of consequence to our stakeholders with sustainable<br />
business practices<br />
• Developing technologies, products, and services that bring energy and the<br />
environment into harmony<br />
• Investing in the development of our employees and the communities where<br />
we operate<br />
• Creating long-term stockholder value through sustainable processes,<br />
products and services<br />
By including our suppliers and clients across our value chain, and engaging<br />
our employees and the communities in which we operate, we can identify and<br />
provide solutions that create long-term stockholder value through sustainable<br />
products and services that benefit society.<br />
The future of energy demand presents an array of challenges, and we look<br />
forward to the opportunities that come with it.<br />
Brad Dickson<br />
Vice President, Chief Marketing Officer
OUR SUSTAINABILITY PRINCIPLES EMBRACE ISSUES<br />
RELATING TO ENVIRONMENT, SOCIETY AND GOVERNANCE<br />
SOCIETY<br />
People<br />
Localization<br />
Health and Safety<br />
Community<br />
Suppliers<br />
Diversity<br />
Labor Relations<br />
Philanthropy<br />
ENVIRONMENT<br />
Climate Change<br />
Facility Efficiency<br />
Technology<br />
Product Efficiency<br />
Material Conservation<br />
Waste and Recycling<br />
Water Conservation<br />
SUSTAINABILITY<br />
AT<br />
DRESSER-RAND<br />
GOVERNANCE<br />
Policies<br />
Board Oversight<br />
Compliance<br />
Guiding Principles<br />
Internal Committees<br />
ECONOMIC IMPACT: By operating responsibly,<br />
we improve our economic standing by decreasing risks<br />
and enhancing our attractiveness to stakeholders<br />
OVERVIEW<br />
CORPORATE SUSTAINABILITY REPORT 5
STAKEHOLDER<br />
ENGAGEMENT<br />
• ANNUAL MEETING OF<br />
STOCKHOLDERS<br />
• ANNUAL REPORT<br />
• COMMUNICATIONS WITH<br />
STOCKHOLDERS, INVESTORS<br />
AND ANALYSTS<br />
• FACILITY TOURS<br />
• INVESTMENT CONFERENCES<br />
AND QUARTERLY CONFERENCE<br />
CALLS<br />
6 DRESSER-RAND<br />
<strong>Dresser</strong>-<strong>Rand</strong> recognizes the importance of engaging its stakeholders to<br />
understand their concerns and issues. The dialogue developed between<br />
<strong>Dresser</strong>-<strong>Rand</strong> and its stakeholders allows us to appreciate different viewpoints<br />
and better understand how our business value propositions can be aligned<br />
with the goals of our stakeholders and larger societal goals. We engage<br />
our employees, clients, stockholders, communities, regulatory authorities,<br />
and other stakeholders through various avenues of communication. Our<br />
stakeholders and our engagement with them have evolved over our long<br />
history, rather than as a result of a formal, defined process.<br />
The stakeholders we conscientiously engage include clients, employees,<br />
communities, suppliers, and stockholders. We strive to gain our clients’<br />
loyalty for life through localization efforts and by delivering a superior value<br />
proposition. We engage our employees by offering training and development<br />
opportunities to help them advance in their careers and strive to reach balance<br />
by creating a culture of teamwork, dedication and passion that encourages<br />
their creative contributions. As a technology leader in our industry, we support<br />
our communities by helping to develop educated and skilled citizens. We<br />
view our Supply Chain as an extension of our manufacturing network, and<br />
our business model requires strong, enduring supplier relations with globally<br />
competitive companies. We keep our stockholders informed through regular<br />
and timely communications and events.<br />
We believe stakeholder engagement is important, because our understanding<br />
of their priorities often leads to shaping our business strategy, technology<br />
and geographical focus for investment and solutions. Over the past few years,<br />
we invited industry analysts to address our leadership team at our worldwide<br />
management meeting. The analysts shared their views on the industry and<br />
on <strong>Dresser</strong>-<strong>Rand</strong>. We also have senior management participate in industrywide<br />
forums that provide thought leadership on pressing issues relating to<br />
energy and the environment. These include EU Turbine (European Association<br />
of Gas and Steam Turbine Manufacturers) and the Construction Industry<br />
Institute (includes addressing sustainability for capital projects).<br />
As we progress, we will continue to engage our stakeholders.<br />
Blaise Derrico<br />
Vice President, Investor Relations
KEY ISSUES<br />
“OUR MISSION FOR 2012 AND<br />
BEYOND IS TO GROW VALUE FOR<br />
OUR STOCKHOLDERS IN A WAY<br />
THAT IS SUSTAINABLE.<br />
”<br />
ECONOMIC IMPACT: By operating our company with a consistent<br />
strategy and the highest standards of integrity and transparency, we are<br />
creating value for our stockholders<br />
OVERVIEW<br />
At <strong>Dresser</strong>-<strong>Rand</strong>, we are providing premier-quality products and services for our<br />
clients to address the needs of the worldwide energy infrastructure. We are driving<br />
Operational Excellence through our global operations to reduce our environmental<br />
impacts. Recognizing that our strength is in our employees, suppliers and service<br />
providers, we are providing them growth opportunities with critical consideration<br />
to their health and safety. We are supporting the communities where we work and<br />
live through local sourcing and educational partnerships. By operating our company<br />
with a consistent strategy and the highest standards of integrity and transparency,<br />
we are creating value for our stockholders.<br />
Our approach to sustainability is to integrate our sustainability principles into our<br />
business processes. We require annual training on ethical business practices and<br />
integrate safety into our daily work lives. We remind ourselves that the only way is<br />
the safe, ethical way. We have a robust risk management system that<br />
quantifies risk and helps us determine how to reach our goals in<br />
the way that will reap the most benefit.<br />
One of the major goals of our drive for<br />
Operational Excellence is to reduce waste—a<br />
major step towards a sustainable business. By<br />
requiring the same of our suppliers, we reduce<br />
waste up and down our entire supply chain,<br />
passing increasingly sustainable products<br />
on to our clients.<br />
Another of our major initiatives on our<br />
journey to Operational Excellence<br />
is to singularize global processes,<br />
ensuring that streamlining<br />
efforts are replicated quickly and<br />
efficiently and that we’re not<br />
expending valuable time and<br />
cost to reinvent processes at<br />
each location. Our goals are<br />
to reduce cost and cycle time<br />
while increasing value—and<br />
developing sustainable processes<br />
and a sustainable business is<br />
the smartest way to achieve<br />
those goals.<br />
Sustainability is becoming<br />
a way of thinking and<br />
a part of our culture as<br />
we continue our journey<br />
toward bringing energy and<br />
the environment into harmony.<br />
CORPORATE SUSTAINABILITY REPORT 7
8 DRESSER-RAND<br />
❮ CLIMATE<br />
Innovate to create technology<br />
solutions to mitigate greenhouse<br />
gas (GHG) emissions and to<br />
develop technologies for alternative<br />
energy sources for the future.<br />
❮ LOCALIZATION<br />
Expand our reach to extend the<br />
benefits of job creation, local<br />
sourcing and partnerships in<br />
research and development and<br />
education in the communities<br />
where we operate.<br />
❮ COMMUNITIES<br />
Maintain and develop educational<br />
partnerships that support science<br />
and technology education to<br />
enable tomorrow’s workforce.
❮ DRIVING EFFICIENCY IN<br />
OUR CLIENTS’ OPERATIONS<br />
Increase energy efficiency<br />
and reduce the footprint of our<br />
products while providing superior<br />
service to extend their usefulness.<br />
❮ PEOPLE<br />
Provide training and development<br />
opportunities in a collaborative<br />
culture to attract and retain superior<br />
and creative talent.<br />
❮ SUPPLIERS<br />
Drive operational excellence and<br />
energy efficiency into our supply<br />
chain through the deployment<br />
of lean principles and supplier<br />
partnerships.<br />
OVERVIEW<br />
❮ DRIVING OPERATIONAL<br />
EXCELLENCE IN OUR<br />
OPERATIONS<br />
Reduce the environmental<br />
footprint of our operations through<br />
operational excellence, which<br />
embodies systematic measurement,<br />
monitoring and continuous<br />
improvement.<br />
❮ HEALTH AND SAFETY<br />
Institute disciplined, consistent<br />
operational processes to ensure<br />
the health and safety of every<br />
employee while striving to drive<br />
our injury rate to zero.<br />
❮ GOVERNANCE<br />
Operate with strict adherence<br />
to the highest standards of ethical<br />
behaviors while considering<br />
sustainability issues in our<br />
decision-making.<br />
CORPORATE SUSTAINABILITY REPORT 9
SECTION 1<br />
ENVIRONMENT<br />
Bringing energy and the environment into harmony. We are focused on reducing the negative<br />
impacts that our products, services, operations, and the energy industry we serve have on the<br />
environment. Clients who use our technologies want to be responsible stewards of the world’s<br />
limited resources while reducing their own environmental footprint. With regard to DRESSER-RAND<br />
and its facilities, we realize that greater efficiency through OPERATIONAL EXCELLENCE results in<br />
both cost reductions and conservation.<br />
10 DRESSER-RAND<br />
2011 COMMITMENTS 2011 ACCOMPLISHMENTS<br />
Continue to focus on our internal<br />
sustainability initiatives<br />
Continue development and implementation<br />
of an eco-design process<br />
Develop a company-wide waste management<br />
program<br />
Improve and expand processes for<br />
collecting and documenting data for<br />
sustainability indicators<br />
Continue development of innovative<br />
technologies that promote sustainability<br />
Improved our workplace environment<br />
across the company using Lean Six<br />
Sigma processes<br />
Continued “Lean to Green” training<br />
which incorporates health and safety<br />
aspects and eco-efficiency into our<br />
Lean Six Sigma tools and processes<br />
across the company<br />
Continued Environmental and<br />
Sustainability Awareness training<br />
across the company<br />
Discussions with Process Innovation resulted<br />
in a tactical plan to incorporate eco-design<br />
criteria into our Value Engineering Initiative<br />
and leverage existing engineering processes<br />
Developed strategy and corporate waste<br />
management standards<br />
Formulated a process to collect critical<br />
information and purchased software<br />
New test facility for Rampressor with<br />
application in carbon capture and<br />
sequestration<br />
Acquired Grupo Guascor and added<br />
a broad range of sustainable energy<br />
technologies to our portfolio<br />
Invested in Echogen Power Systems for<br />
supercritical CO2 waste-energy solutions<br />
The Ebro river valley in Catalonia, Spain, where <strong>Dresser</strong>-<strong>Rand</strong><br />
has six facilities and approximately 700 employees.
2012 GOALS<br />
Develop new standards and procedures<br />
for company-wide waste management<br />
Advance design for oil-free compressors<br />
with active magnetic bearing (AMB)<br />
technology<br />
Incorporate HSE & “Lean to Green” into<br />
key process Value Stream Maps<br />
Develop the eco-design process with the<br />
engineering community of practice (CoP) to<br />
incorporate basic eco-design considerations<br />
into our R&D engineering process<br />
Initiate “green supply chain” discussion<br />
and advance through the strategy and<br />
planning stage<br />
ENVIRONMENT<br />
CORPORATE SUSTAINABILITY REPORT 11
ADDRESSING<br />
CLIMATE CHANGE<br />
Innovate to create technology<br />
12 DRESSER-RAND<br />
solutions to mitigate<br />
greenhouse gas emissions and<br />
to develop technologies for<br />
alternative energy sources<br />
for the future.<br />
Increasing global population and per capita income, centered primarily<br />
in developing countries, will drive demand for energy and the products<br />
and natural resources necessary to produce them.<br />
A widely believed consequence of global economic growth and<br />
increased population is a rise in greenhouse gas emissions and global<br />
average temperatures.<br />
We believe that <strong>Dresser</strong>-<strong>Rand</strong> is in a unique position regarding climate<br />
change. Regardless of the source of energy, whether from traditional<br />
sources (such as fossil fuels) or from emerging clean energy applications<br />
(such as wind and wave energy), our products can lessen overall<br />
environmental impacts.<br />
Our focus on Operational Excellence allows us to provide competitive<br />
solutions and equipment that increase energy efficiency and reduce<br />
emissions for oil production, refining, petrochemical and liquefied natural<br />
gas (LNG) facilities, pipelines, and a multitude of other applications. In<br />
addition, applying Operational Excellence to our own operations improves<br />
productivity, reducing resource consumption and the carbon footprint<br />
of our operations.<br />
We believe we can add value to our clients’ operations by increasing<br />
the efficiency of our products and by providing solutions that lower<br />
carbon emissions.<br />
We are aggressively pursuing innovations and technologies that<br />
help address our clients’ environmental concerns and reduce their<br />
carbon footprints.<br />
Greg Stubbs<br />
Senior Manager, Sustainability & HSE Process Innovation
CARBON CAPTURE UTILIZATION<br />
AND STORAGE—RAMGEN®<br />
SUPERSONIC COMPRESSION<br />
TECHNOLOGY<br />
Interest in carbon capture and storage<br />
(CCS) has been slow to attract investment<br />
around the world as economic recovery has<br />
taken center stage. However, the dialogue<br />
on global warming continues unabated.<br />
Currently, the investment is predominantly<br />
directed towards enhanced oil recovery<br />
(EOR), a form of carbon capture utilization<br />
and storage (CCUS) that can provide<br />
economic benefit without subsidies such as<br />
a carbon pricing mechanism. <strong>Dresser</strong>-<strong>Rand</strong><br />
is a leader in the EOR compression market.<br />
The cost of large-scale implementation of<br />
CCS technologies is challenging, and the<br />
ongoing issues of storing large quantities<br />
of CO2 must be addressed. We expect that<br />
the technologies associated with CCUS<br />
will become economically feasible in the<br />
near- to mid-term.<br />
In 2008, <strong>Dresser</strong>-<strong>Rand</strong> made an investment<br />
in Ramgen Power Systems LLC and began<br />
supporting the development of technology<br />
that is expected to reduce the cost of<br />
compression by 50% when compared to<br />
the current cost of existing compression<br />
technologies. The Ramgen technology<br />
also offers significant footprint savings<br />
and high-grade heat for energy recovery.<br />
In 2011, Ramgen completed a dedicated<br />
CO2 closed-loop compressor test facility<br />
at the <strong>Dresser</strong>-<strong>Rand</strong> Olean, N.Y., campus.<br />
This one-of-a-kind test facility supports<br />
Ramgen Power System’s demonstration<br />
World’s first supersonic CO 2 compression<br />
test facility, located in Olean, N.Y., USA.<br />
of a 10 MW Ramgen supersonic CO2<br />
compressor. It is designed to validate a<br />
10:1 compression ratio technology in a<br />
single stage—which on an equivalent basis<br />
takes eight to 10 stages using conventional<br />
technology. This full-scale demonstration<br />
testing is expected to begin in 2012.<br />
OCEAN WAVE ENERGY—<br />
HYDROAIR TURBINE<br />
We are working to provide solutions for<br />
harnessing renewable ocean wave energy<br />
and efficiently converting it to electricity<br />
for use on land. <strong>Dresser</strong>-<strong>Rand</strong> engineered<br />
and developed the patent-pending<br />
HydroAir turbine (shown at right)—<br />
a variable-radius turbine (VRT) that<br />
has substantially higher efficiency<br />
than comparable devices. An initial<br />
prototype was installed in Australia in<br />
2010. <strong>Dresser</strong>-<strong>Rand</strong> and Ireland-based<br />
Ocean Energy Limited, a market leader<br />
in developing oscillating water column<br />
(OWC) plants, signed a memorandum<br />
of understanding in 2010 to develop a<br />
complete range of full-scale devices to<br />
produce electricity. This partnership could<br />
lead to an Irish industry generating 600<br />
MW of electricity by 2020, enough to<br />
supply the needs of 450,000 households.<br />
In addition, it was announced in January<br />
2012 that the Cornwall, U.K.–based<br />
Wave Hub selected Ocean Energy and<br />
<strong>Dresser</strong>-<strong>Rand</strong> to deploy its technologies<br />
at its flagship testing site in 2012.<br />
ENVIRONMENT<br />
CORPORATE SUSTAINABILITY REPORT 13
DRIVING EFFICIENCY IN OUR<br />
CLIENTS’ OPERATIONS<br />
14 DRESSER-RAND<br />
We engage our clients at all levels of their organizations on a day-to-day<br />
basis as well as in executive dialogue regarding their most pressing issues.<br />
Through our alliance agreements with key clients, we have developed<br />
performance metrics. We have also established semiannual or annual<br />
executive-to-executive communications (executive sponsor meetings)<br />
where collaborative exchange is held on issues such as safety, reliability,<br />
operational performance, technology needs, future business projections,<br />
and supply chain.<br />
As with our 2009 report, we again chose to obtain an in-depth view of our<br />
2010 Sustainability Report from one of our largest clients to obtain critical<br />
“voice of client” feedback on our activities and the report itself. Some of that<br />
feedback is incorporated into this report.<br />
We maintain an intense client focus through:<br />
• Our New Equipment and Services client-facing organization, whose mission<br />
is to earn client loyalty for life<br />
• 49 service and support centers and 76 sales offices in 32 countries,<br />
with plans to add more to provide responsive support and service<br />
to our clients’ installed base<br />
• A global network of approximately 180 independent representatives,<br />
all of whom promote our brand, sell our products and provide service<br />
and aftermarket support to our installed base locally in more than<br />
150 countries<br />
• Enhanced relationships and alliance agreements with key clients;<br />
we have more of these relationships in place than any other original<br />
equipment manufacturer in the markets we serve<br />
• Configuration sessions or tools that minimize cycle time and help<br />
our clients optimize their equipment solutions<br />
• Technology updates<br />
• Our Client Interface Response System (CIRS)—an interactive, Web-based<br />
tool that allows clients to communicate with <strong>Dresser</strong>-<strong>Rand</strong> technical<br />
experts about an issue, technical query or problem on a specific piece<br />
of existing equipment<br />
• On-line, on-site or off-site product training<br />
We are hard at work providing the most reliable and efficient rotating<br />
equipment technology and service solutions with a view towards earning<br />
client loyalty for life.<br />
Jesus Pacheco<br />
Executive Vice President, New Equipment Worldwide
PROVIDING OUR CLIENTS WITH<br />
SUSTAINABLE SOLUTIONS<br />
With a team dedicated solely to<br />
environmental solutions, <strong>Dresser</strong>-<strong>Rand</strong><br />
is well positioned to serve the emerging<br />
environmental solutions markets. We<br />
support our clients in their efforts to<br />
reduce the environmental footprint<br />
associated with their day-to-day operations<br />
through improving the efficiency of their<br />
power generation activities, supporting<br />
their renewable energy initiatives and<br />
reducing the greenhouse gas (GHG)<br />
emissions from their operations.<br />
With its acquisition of Guascor,<br />
<strong>Dresser</strong>-<strong>Rand</strong> now has capabilities in the<br />
design, construction and development of<br />
power generation and cogeneration plants<br />
and mini-hydroelectric plants, as well as<br />
the development and exploitation of wind<br />
farms and biomass, used oil and landfill<br />
energy recovery, photovoltaic solar energy,<br />
and aerobic processing.<br />
Our technologies support our clients’<br />
competitiveness by improving process<br />
efficiencies and reducing emissions,<br />
enabling them to meet increasingly<br />
stringent environmental regulations.<br />
INNOVATION NORWAY<br />
GRANTS AWARD FOR GREEN<br />
TECHNOLOGY<br />
In 2011, <strong>Dresser</strong>-<strong>Rand</strong> was awarded<br />
$684,000 USD (4 million NOK) in<br />
public grant funding by Innovation<br />
Norway (IN). The grant will be used to<br />
support testing a new, environmentallyfriendly<br />
turbine-generator set, known as<br />
the <strong>Dresser</strong>-<strong>Rand</strong> KG2-3G unit.<br />
IN, a development funding arm of the<br />
Norwegian government that supports<br />
environmental initiatives, awarded<br />
<strong>Dresser</strong>-<strong>Rand</strong> the funding because the<br />
KG2-3G turbine is expected to drastically<br />
reduce fuel consumption, decrease CO2<br />
emissions 35 percent, and decrease NOx<br />
and CO emissions 80 percent when<br />
compared to the rating of the existing<br />
KG 2-3E turbine. The KG2-3G turbine<br />
also comes with an acoustic enclosure for<br />
onshore installation and is suitable for a<br />
variety of applications, including biofuel<br />
systems.<br />
The unit will be installed at the WINGAS<br />
Transport GmbH site in Greifswald,<br />
Germany, where the North Stream<br />
pipeline comes into Europe from Russia.<br />
WINGAS will provide natural gas for<br />
the field test in exchange for the heat and<br />
power produced by the KG2-3G turbine.<br />
The electric power will be exported and<br />
the exhaust heat used to heat pipeline gas<br />
coming out of the Baltic Sea.<br />
More than 900 KG2 gas turbines have<br />
been delivered for standby, industrial and<br />
oil and gas applications worldwide.<br />
GAME-CHANGING<br />
TECHNOLOGY: THE DATUM® ICS<br />
The DATUM® ICS is an advanced<br />
technology platform that uses<br />
high-efficiency DATUM centrifugal<br />
compressor technology driven by a<br />
high-speed, close-coupled, oil-free, electric<br />
motor. The DATUM ICS is the first<br />
technology to incorporate a proprietary,<br />
integrated gas-liquid separation unit,<br />
avoiding the use of a large static inlet<br />
scrubber to protect the compressor. The<br />
compression system is complete with<br />
process gas coolers, process piping, valves<br />
and instrumentation, all packaged into a<br />
single lift module.<br />
The DATUM ICS provides a complete<br />
compression system for applications in<br />
upstream, midstream and downstream<br />
markets, and features the industry’s<br />
smallest footprint with up to a 50% space<br />
and weight reduction—all of which<br />
translates into significantly less steel being<br />
used offshore and delivering real value<br />
through the lowest total installed cost.<br />
Our first unit was built and shipped in<br />
September 2010 and is expected to start<br />
operation in 2012.<br />
Working with subsea integrators, we plan<br />
to take this proven DATUM ICS design<br />
and fit it for service on the sea floor. In<br />
June 2011 we partnered with Statoil in a<br />
joint research and development project.<br />
Initially, the companies will focus on<br />
configuring the DATUM ICS package for<br />
high-power applications in a nominal eight<br />
to 12 MW range. Once the equipment<br />
operating conditions and package<br />
requirements have been clearly defined,<br />
<strong>Dresser</strong>-<strong>Rand</strong> will build a high-power<br />
ICS and test it in a unique liquid-gas<br />
hydrocarbon test facility in Olean, N.Y.,<br />
USA. In addition, <strong>Dresser</strong>-<strong>Rand</strong> plans to<br />
conduct testing on a sub-sea test stand<br />
to be constructed alongside the ICS test<br />
facility.<br />
CASE STUDY<br />
ENVIRONMENT<br />
DRESSER-RAND TEAMS UP WITH<br />
KING FAHD UNIVERSITY FACULTY<br />
AND STUDENTS FOR NOISE<br />
REDUCTION RESEARCH<br />
<strong>Dresser</strong>-<strong>Rand</strong> finalized a collaborative<br />
research agreement with King Fahd<br />
University of Petroleum and Minerals<br />
(KFUPM), and last May we participated<br />
in the first annual KFUPM Research Day<br />
to highlight activity taking place under<br />
the research agreement.<br />
KFUPM organized the event, with lectures,<br />
technical presentations and an exhibition<br />
held on the KFUPM campus to enable<br />
faculty, researchers, graduate students,<br />
and guests to learn about research<br />
activities at the university and build an<br />
environment of innovation.<br />
We exhibited the <strong>Dresser</strong>-<strong>Rand</strong> Duct<br />
Resonator (DR) Array demonstration<br />
rig and performed an interactive<br />
demonstration of the DR Array noise<br />
reduction technology. The KFUPM<br />
students from the mechanical engineering<br />
department presented findings under a<br />
<strong>Dresser</strong>-<strong>Rand</strong>–funded research project<br />
focused on improving the DR Array<br />
technology.<br />
The research team from KFUPM included<br />
Dr. Samir Mekid and three students.<br />
Two undergraduate students worked<br />
on reducing the manufacturing cost of<br />
DR Array technology, collaborating with<br />
another team of students from Lehigh<br />
University on the same topic. A graduate<br />
student studied resonator arrays in<br />
general to further improve the acoustic<br />
performance of <strong>Dresser</strong>-<strong>Rand</strong> DR Array<br />
technology.<br />
<strong>Dresser</strong>-<strong>Rand</strong> and Saudi Aramco are<br />
evaluating opportunities to apply noise<br />
reduction technology to compressor<br />
installations at production facilities within<br />
the Kingdom.<br />
CORPORATE SUSTAINABILITY REPORT 15
OPERATIONAL EXCELLENCE IN<br />
OUR OPERATIONS<br />
16 DRESSER-RAND<br />
Our primary environmental impact is derived from manufacturing our<br />
products. We use a specialized software application to track our direct and<br />
indirect energy usage for our Scope 1 and Scope 2 greenhouse gas (GHG)<br />
emissions. We report under the Global Reporting Initiative (GRI) direct energy<br />
consumption (EN3), indirect energy consumption (EN4), and total direct and<br />
indirect GHG emissions (EN16). Our software uses the globally accepted<br />
World Resources Institute GHG Protocol and the ISO 14064 standard to<br />
collect our GHG emissions data. A third-party firm provides integrated<br />
advisory, financial and implementation services for the energy value chain.<br />
We continue to apply our lean manufacturing and lean office processes<br />
to reduce waste in manufacturing and transactional processes. In 2011,<br />
our Global Process Innovation group coordinated lean initiatives and<br />
environmental stewardship through the Lean Sigma Certificate workshop<br />
for the third year running. The workshop was expanded to encompass<br />
more of our worldwide locations in 2011. A total of 189 participants graduated<br />
in 2011 from the Lean Sigma Certificate workshops, and 54 Lean Sigma<br />
improvement projects resulted from these workshops. The majority of these<br />
lean improvement projects yielded increased capacity and reduced cycle<br />
time via the elimination of wasteful, non-value-added activities.<br />
We continue to expand the implementation of a client-focused, continuous<br />
improvement toolkit to improve quality, on-time delivery, health and safety,<br />
and profitability. Six Sigma workplace process implementation continues<br />
within our manufacturing sites. Each site has established a scoring matrix to<br />
determine sustainability improvement. A process is in place for self-audits on<br />
the requirements of the scoring matrix, with follow-up audits by the respective<br />
site leadership teams.<br />
We are making significant progress introducing Standard Work Processes<br />
in our service centers. Through 2011, more than 35,000 work instructions<br />
have been standardized, written and translated into the respective service<br />
center location’s local language. Results of this activity indicate significant<br />
improvement in efficiency of such complex tasks as teardown and rebuild of<br />
steam turbines.<br />
In 2011, <strong>Dresser</strong>-<strong>Rand</strong> worked with its transportation and logistics providers<br />
to continue to identify opportunities for decreasing its carbon footprint.<br />
Actions taken included the consolidation of shipments where possible and<br />
slow steaming of ocean-going vessels to reduce the carrier company’s<br />
carbon footprint.<br />
We also continue to evaluate our fork truck fleet for opportunities to reduce<br />
the number of combustion engine emission–style trucks and replace them<br />
with electric trucks. In March 2012, we entered into an operational lease to<br />
replace 25 combustion engine–emission trucks with electric-style fork trucks.<br />
Jim Methven<br />
Director, Global Singular Processes
OPERATIONAL EXCELLENCE—<br />
QUALITY, COST AND<br />
CYCLE TIME<br />
<strong>Dresser</strong>-<strong>Rand</strong> implemented an ongoing<br />
evaluation of Quality Assurance programs<br />
for its operations and those of its suppliers.<br />
The intent of this initiative is to continue<br />
to maintain a proactive productivitybased<br />
quality metric to link costs of<br />
poor quality to volume; maintain a<br />
high-level, productivity-based quality<br />
improvement plan; and to focus on<br />
preventing quality defects and defect<br />
escapes to downstream processes.<br />
<strong>Dresser</strong>-<strong>Rand</strong> aggressively pursues<br />
quality in its developing country sourcing<br />
program, which incents our legacy supply<br />
companies to improve quality in order<br />
to stay competitive. Our continued<br />
focus is intended to improve our quality<br />
year-over-year, but we still have much to<br />
do in order to further improve cycle time<br />
and delivery to our clients.<br />
All of our Process Innovation and Supply<br />
Chain management initiatives are focused<br />
on improving quality, reducing cost,<br />
reducing cycle time, and improving<br />
on-time delivery—or in other words,<br />
achieving Operational Excellence. We<br />
have the right people in place to improve<br />
cycle time and implement cost reduction;<br />
now we need to focus on data and systems<br />
in order to maximize and sustain these<br />
improvements.<br />
Our project prioritization process will<br />
ensure that resources are efficiently<br />
deployed with maximum impact on<br />
the performance of the company. This<br />
includes determining which operations<br />
and suppliers need more support in order<br />
to improve quality and reduce cycle time.<br />
Actively pursuing supplier alternatives and<br />
working with suppliers to reduce scrap and<br />
rework help reduce costs.<br />
Our strategy is to develop a supplier-toclient<br />
on-time delivery culture across<br />
execution teams and to improve on-time<br />
delivery performance against agreed-to<br />
dates defined in the project master<br />
schedule.<br />
RESPONSIBLY USING MATERIALS<br />
AND ENERGY RESOURCES<br />
We have initiatives underway throughout<br />
the company to use material and energy<br />
resources more responsibly, including<br />
through the reduction of waste and<br />
increased recycling. A few examples of<br />
this are mentioned below.<br />
Our plant in Naroda, India, operates a<br />
solar water heating system. The system<br />
provides heated water to the plant<br />
and office buildings at a savings of<br />
approximately 44,000 kWh of energy<br />
per year. In addition, the plant conserves<br />
energy by using variable-frequency drives<br />
in its compressor test facility and on its<br />
compressor cooling water tower.<br />
ENVIRONMENT<br />
During 2011, our Burlington, Iowa, plant<br />
expanded its recycling effort, adding new<br />
types of materials for recycling. For the<br />
year, the volume of material going to local<br />
landfill was more than 90% less than<br />
2009 levels and consistent with 2010.<br />
The Burlington facility received the Des<br />
Moines County Landfill Sustainability<br />
Award for recycling.<br />
In 2011, our Naroda, India, plant installed<br />
an electrostatic oil filtration system and<br />
recycled 4,741 liters of oil for reuse. The<br />
plant’s wood recycling program resulted<br />
in the reuse of 582 cubic feet of wood,<br />
and the plant reduced its paper usage by<br />
implementing a two-sided printing policy<br />
and recycled 264 kg of scrap paper. In<br />
addition, each employee was provided a<br />
water bottle and a mug for tea, eliminating<br />
the use of paper cups.<br />
WATER USE<br />
Our Naroda plant installed a water<br />
harvesting system in 2010. In 2011 they<br />
installed an oil skimmer and 5-micron<br />
filter system to continuously filter the<br />
coolant solution, increasing coolant life<br />
and reducing coolant and water usage.<br />
PLANT BUILDING SOLAR<br />
WATER HEATING SYSTEM<br />
Use:<br />
Component cleaning<br />
Energy saved per year:<br />
44,000 kWh<br />
System:<br />
40 collectors<br />
Indirect heating capacity:<br />
6,000 liters per day @<br />
70 °C (158 °F)<br />
CORPORATE SUSTAINABILITY REPORT 17
SECTION 2<br />
SOCIETY<br />
Our business success is supported by our relationships with our employees and the communities<br />
where we operate. In the factory and in our global service operations, our priority is HEALTH<br />
AND SAFETY. In communities where we have a presence, we are focused on achieving long-term<br />
economic, social and environmental benefits through SUSTAINABLE INITIATIVES, job creation,<br />
supplier engagement, research and development activities, and educational support. Our<br />
commitment is to broaden these benefits by expanding our local presence in the places where<br />
we operate.<br />
18 DRESSER-RAND<br />
2011 COMMITMENTS 2011 ACCOMPLISHMENTS<br />
Enhance our progress and oversight<br />
for privacy issues<br />
Continue our training and development<br />
investment in our employees<br />
Create jobs and opportunities through<br />
our localization initiatives<br />
Strive to extend the reach of our corporate<br />
charitable initiatives<br />
Established a Data Protection<br />
Committee, consisting of the vice<br />
presidents of human resources, law<br />
and information technology, with<br />
responsibility for overseeing our<br />
compliance with international data<br />
protection and privacy regulations.<br />
Confirmed our compliance with<br />
French and Spanish data privacy<br />
regulations, and achieved safe harbor<br />
status for certain data transfers from<br />
France and Spain to the U.S.<br />
See “Training and Development”<br />
on page 23<br />
Progressed Saudi Arabia service<br />
and repair center; increased local<br />
employment at recently established<br />
Pune India Engineering Center;<br />
initiated localization plans in support<br />
of the Petrobras 8 “replicant” FPSOs<br />
award; increased local employment<br />
opportunities through our gas turbine<br />
repair and service center expansions<br />
See “Community” on pages 26-28<br />
Pune, India, where our global engineering<br />
support center employs approximately 200 people.
2012 GOALS<br />
Enhance our progress and oversight<br />
for privacy issues<br />
Continue our efforts to expand the reach<br />
of our corporate charitable initiatives with a<br />
focus on education, civic and social programs<br />
and encourage participation of our employees<br />
in these areas<br />
Develop globally effective programs/<br />
resources/policies and procedures<br />
for implementing a world-class HSE<br />
Management System with singular processes<br />
Engage schools in communities in which we<br />
work to foster education<br />
SOCIETY<br />
CORPORATE SUSTAINABILITY REPORT 19
LOCALIZATION<br />
<strong>Dresser</strong>-<strong>Rand</strong> is committed<br />
20 DRESSER-RAND<br />
to building long-term<br />
relationships with its clients<br />
around the world by delivering<br />
high-quality products and<br />
services. To meet that<br />
commitment, we are executing<br />
a localization strategy. By<br />
addressing local needs, we will<br />
enhance our competitiveness<br />
and improve response times.<br />
We strive to employ local<br />
resources.<br />
The first unit packaged and shipped<br />
from the Saudi Arabia service center.<br />
This steam turbine-gear package is<br />
destined for the Yanbu Export Refinery<br />
Project in Yanbu, Saudi Arabia.<br />
SAUDI ARABIA SERVICE AND<br />
REPAIR CENTER<br />
The Saudi Arabia facility is under<br />
construction and is expected to be<br />
completed in 2013. The organization<br />
is operational with a branch operation<br />
located in Jubail.<br />
<strong>Dresser</strong>-<strong>Rand</strong> is building an approximately<br />
10,000-square-meter manufacturing<br />
and repair facility in Dammam Second<br />
Industrial City in the Kingdom of<br />
Saudi Arabia. The facility’s capabilities<br />
will include single-stage steam turbine<br />
manufacturing, packaging and repairs<br />
(including industrial gas turbines), field<br />
support services, technical support<br />
services, and training. The technology<br />
center has been designed and facility<br />
construction will begin in May 2012.<br />
It will include offices, a training center,<br />
cafeteria, and mosque.<br />
The localization plan for Saudi Arabia<br />
is focused on hiring locally and will<br />
create employment opportunities at all<br />
levels of the organization from the shop<br />
floor to leadership positions. We have<br />
10 Saudi engineers on staff and two<br />
Saudi business managers.<br />
An agreement was recently signed with<br />
Saudi Petroleum Services Polytechnic<br />
(SPSP), which is a vocational school<br />
in Saudi Arabia. <strong>Dresser</strong>-<strong>Rand</strong> Arabia<br />
is sponsoring 37 students of various<br />
disciplines (welding, pipefitting,<br />
machinists, and electricians) to participate<br />
in a three-year training program. They<br />
will complete their second year in<br />
December 2012 and will then begin a<br />
one-year, on-the-job training assignment<br />
with <strong>Dresser</strong>-<strong>Rand</strong> Arabia.<br />
We have established a supply chain<br />
management (SCM) team that is in the<br />
process of identifying, qualifying and<br />
developing local suppliers for our activities<br />
in the Kingdom of Saudi Arabia. We also<br />
have a services organization in place for<br />
installation, commissioning, and technical<br />
support of our products in Saudi Arabia.<br />
GLOBAL ENGINEERING SUPPORT<br />
CENTER IN PUNE, INDIA<br />
<strong>Dresser</strong>-<strong>Rand</strong> inaugurated a global<br />
engineering support center (ESC) in India<br />
in November 2010. During 2011, we<br />
added 36 engineers, two project control<br />
specialists and two SCM employees.<br />
Located in SEZ, Cybercity, Magarpatta,<br />
Pune, this ESC is currently home to<br />
107 engineers and other employees<br />
supporting <strong>Dresser</strong>-<strong>Rand</strong> worldwide<br />
operations. With drafters, designers,<br />
engineers, and other personnel, the ESC<br />
will help meet demand for engineering,<br />
designing, buying, expediting, and project<br />
managing, and also provide support<br />
EMPLOYEE AND TEMPORARY WORKERS AS OF 12/31/11<br />
Full-Time Part-Time Full-Time Part-Time<br />
% of employees<br />
Region<br />
Non-Union Non-Union Union Union Temp. Total covered by CBA*<br />
Asia Pacific 355 3 166 0 81 605 32%<br />
Europe 416 7 1,608 68 104 2,203 80%<br />
Middle East/Africa 74 0 30 0 0 104 29%<br />
North America 2,688 5 1,359 1 613 4,666 34%<br />
Latin America 684 15 27 0 30 756 4%<br />
Total 4,217 30 3,190 69 828 8,334 43%<br />
*Collective bargaining agreements
to other back office needs of IT, SCM,<br />
finance, and HR on a worldwide basis for<br />
<strong>Dresser</strong>-<strong>Rand</strong> products and services.<br />
Magarpatta City practices various<br />
sustainable practices like rainwater<br />
harvesting, garbage segregation at source,<br />
vermiculture, use of fly-ash bricks in<br />
construction and has a solar water heating<br />
system and biogas plant.<br />
The <strong>Dresser</strong>-<strong>Rand</strong> localization strategy<br />
focuses on hiring locally. Starting in 2012,<br />
we also intend to visit local engineering<br />
colleges to recruit the best in-country<br />
resources. The long-range plan for the<br />
ESC includes hiring approximately 250 to<br />
300 employees over the next five years.<br />
The ESC in India complies with all<br />
statutory guidelines.<br />
GAS TURBINE REPAIR<br />
The <strong>Dresser</strong>-<strong>Rand</strong> Cilegon, Indonesia,<br />
service center was established in 1999 to<br />
serve Indonesia, Southeast Asia and the<br />
Australian markets. We are in the process<br />
of expanding Cilegon’s service capabilities<br />
to repair gas turbines. This is part of the<br />
strategy to roll out <strong>Dresser</strong>-<strong>Rand</strong> Turbine<br />
Technology Services repair expertise to a<br />
number of our strategically located service<br />
centers. In this regard, our service center<br />
in Campinas, Brazil, now has inspection<br />
capability for gas turbines, and our service<br />
Chevron’s Agbami FPSO located<br />
offshore Nigeria. <strong>Dresser</strong>-<strong>Rand</strong><br />
supplied six 26 MW gas turbine<br />
packages for main power<br />
generation and compression.<br />
<strong>Dresser</strong>-<strong>Rand</strong> is expanding<br />
its local shop capability to<br />
increase local content, which<br />
is an important aspect of the<br />
country’s investment plan.<br />
center in Peterborough, UK, has full strip<br />
and inspection capability, weld repair,<br />
machining, heat treatment, and coatings<br />
for component repair.<br />
BRAZIL LOCALIZATION<br />
<strong>Dresser</strong>-<strong>Rand</strong> Brazil locations are working<br />
on executing awards to supply more than<br />
$700 million of compression systems<br />
and related maintenance services for<br />
eight “replicant” FPSO vessels for Brazil’s<br />
pre-salt fields. The awards were announced<br />
in 2011. Engineering is on schedule and<br />
we are in the process of arranging for<br />
critical material deliveries. Construction<br />
of the new facility is scheduled to begin in<br />
the first half of 2012. The <strong>Dresser</strong>-<strong>Rand</strong><br />
Information Technology team is working<br />
on the global singular processes (GSP)<br />
requirements. Everything is on schedule<br />
with regard to local hiring and training.<br />
Standard work practices and safety<br />
procedures are being translated into<br />
Portuguese, and supply chain personnel<br />
are evaluating local suppliers.<br />
We are pursuing LEED certification.<br />
According to the Green Building Council,<br />
Leadership in Energy and Environmental<br />
Design (LEED) provides building<br />
owners and operators with a framework<br />
for identifying and implementing practical<br />
and measurable green building design,<br />
construction, operations and maintenance<br />
solutions.<br />
LEED certification provides independent,<br />
third-party verification that a building<br />
was designed and built using strategies<br />
aimed at achieving high performance in<br />
SOCIETY<br />
key areas of human and environmental<br />
health: sustainable site development,<br />
water savings, energy efficiency, materials<br />
selection and indoor environmental<br />
quality.<br />
SERVICE CENTER EXPANSION<br />
<strong>Dresser</strong>-<strong>Rand</strong> is enhancing its Services<br />
footprint to optimize its service to clients,<br />
including establishing new locations,<br />
expanding existing locations and<br />
relocating facilities as necessary. Standards<br />
are being developed to create consistency<br />
in size, appearance, layout, tools, systems,<br />
processes, and procedures of service<br />
centers worldwide. Efforts are underway<br />
to integrate new facilities acquired by<br />
<strong>Dresser</strong>-<strong>Rand</strong> in 2011, including Grupo<br />
Guascor. We continue to audit the<br />
operation, efficiency, quality, skill sets, and<br />
safety of our worldwide service network.<br />
CORPORATE SUSTAINABILITY REPORT 21
PEOPLE<br />
22 DRESSER-RAND<br />
We achieve client satisfaction, stockholder value and employee engagement<br />
through our initiatives in safety, compliance, technology, and Operational<br />
Excellence. We recognize the value of <strong>Dresser</strong>-<strong>Rand</strong> employees and their<br />
ongoing contributions and engagement to the success of the company.<br />
We have good practices in place, the right people in the right locations<br />
and the stage is set for enhancing employee engagement. The idea is to<br />
engage our employees in Operational Excellence initiatives. We believe<br />
one of the best ways to do this is to use Process Innovation and Lean Six<br />
Sigma principles. To that end, we are developing initiatives that will involve<br />
employees in problem solving using Kaizen workshops.<br />
Our employees have a passion for what they do. This is driven by their desire<br />
to earn client loyalty for life. We are committed to streamlining our processes,<br />
providing worldwide client support and product leadership in our industry.<br />
We are implementing a mechanism through which we can use employees’<br />
suggestions to contribute to reducing cycle times, increasing productivity,<br />
improving on-time deliveries, and reducing the cost of quality. We recognize<br />
the best way to make improvements is to ask employees for their input in<br />
areas they work in every day.<br />
We don’t want to reinvent the wheel. The <strong>Dresser</strong>-<strong>Rand</strong> STAR model,<br />
introduced in the Americas and Asia Pacific operations in 2010, embodies<br />
our work toward sustainable improvements in safety, quality, delivery,<br />
cost, and people. We want to achieve and sustain a recognized leadership<br />
position in health, safety and the environment by enhancing existing<br />
programs and implementing new programs that protect the health<br />
and safety of our employees, clients and suppliers, as well as protect<br />
and improve the environment in the locations where we and our clients<br />
conduct business.<br />
A commitment to safety—our number one priority—involves considerable<br />
focus and effort around work environment improvement, combined<br />
with a culture of discipline and responsible behaviors.<br />
We believe we have world-class Field Operations, which we have<br />
enhanced through the application of lean tools and processes. The<br />
speed, visual excellence, efficiency, safety, quality, and commitment<br />
of our Field Operations creates value for our clients and fosters<br />
employee engagement.<br />
Employee engagement involves a commitment to continuous improvement.<br />
We want to empower our employees at all levels of the organization and<br />
encourage teamwork and leadership in their daily lives. We will continue<br />
to remain focused on employee engagement because of its significant<br />
importance and long-term benefits.<br />
Gustavo Nechar<br />
Vice President, Human Resources
EMPLOYEE TRAINING<br />
<strong>Dresser</strong>-<strong>Rand</strong> is committed to educating<br />
our employees as well as our business<br />
partners. We offer training and<br />
development opportunities to help<br />
them advance in their careers and strive<br />
to reach balance by promoting a culture<br />
of teamwork, dedication and passion.<br />
<strong>Dresser</strong>-<strong>Rand</strong> views employee training<br />
and development as a strategic investment that<br />
significantly contributes to the success of our<br />
company, our employees and our clients. We<br />
have safety and compliance training and other<br />
flagship programs that provide the leadership,<br />
business acumen and technical skills needed<br />
to support our corporate mission. We are<br />
expanding our programs. As we acquire new<br />
businesses, our training programs are vital to<br />
their successful integration.<br />
In this ever-changing marketplace, our<br />
employees are provided with a variety of<br />
educational platforms including on-line<br />
learning in virtual teams, hands-on product<br />
training, business acumen, and leadership<br />
development. We maintain a competitive<br />
edge through this continuous investment.<br />
We build for the future by continuing to<br />
enhance our well-established relationships<br />
with universities, colleges and technical<br />
institutes, and developing research<br />
partnerships, additional apprenticeships, and<br />
co-op and intern opportunities for graduates.<br />
Employee expertise is one our guiding<br />
principles and values. We believe employee<br />
expertise and responsibility result from<br />
recruiting, training and developing<br />
people, and by encouraging diversity in<br />
an environment of integrity, teamwork<br />
and empowerment.<br />
TRAINING BY CATEGORY<br />
35% Technical 24% Safety<br />
6% Legal<br />
35% Compliance<br />
TRAINING AND DEVELOPMENT<br />
IN 2011<br />
• Spent $768,000 in the United States<br />
on education reimbursements.<br />
• Graduated more than 200 employees<br />
globally in the Business Acumen course.<br />
• Graduated more than 1,000 employees<br />
from our Quality of Leadership program.<br />
• Graduated 11 employees from our<br />
Engineering and Financial Management<br />
Acceleration Programs (MAP). We<br />
currently have 61 employees in global<br />
assignments.<br />
LEADERSHIP DEVELOPMENT<br />
Through our MAP we recruit top<br />
engineers and financial talent globally,<br />
which entails rotational assignments.<br />
Employees graduate from this program<br />
with experience and exposure to our<br />
cross-functional business units.<br />
CLASSROOM LEARNING<br />
Our Quality of Leadership program<br />
helps develop exemplary leadership<br />
practices for employees at all levels of<br />
the organization. The course focuses on<br />
Ken Blanchard’s situational leadership<br />
model and Kouzes and Posner’s five<br />
exemplary leadership practices. The<br />
Quality of Leadership program has had<br />
more than 1,000 graduates since its<br />
inception in 2007.<br />
ON-LINE LEARNING<br />
<strong>Dresser</strong>-<strong>Rand</strong> University contains more<br />
than 100 different courses in our on-line<br />
catalogue. To best serve our employees<br />
worldwide, we offer courses in French,<br />
German, Italian, Spanish, and Portuguese.<br />
Our courses range from legal compliance/<br />
regulatory, safety, and environmental<br />
responsibility to time management.<br />
Our Business Acumen course takes<br />
place in a virtual classroom where<br />
employees from around the world cover<br />
topics such as finance, working capital<br />
management, enterprise risk and mergers<br />
and acquisitions, to name a few. Each<br />
section concludes with a group project,<br />
where participants take turns as a team<br />
leader. Business Acumen enhances<br />
employees’ understanding of our business<br />
while promoting collaboration and<br />
teamwork. Our CEO sponsors this course,<br />
and it is taught by 11 senior leaders.<br />
SOCIETY<br />
PRODUCT TRAINING<br />
Using our training facilities, we offer<br />
hands-on product training. Participants<br />
include clients and suppliers, who learn<br />
alongside our employees.<br />
In 2011, <strong>Dresser</strong>-<strong>Rand</strong> expanded<br />
its training capabilities with the<br />
opening of a new 8,700-square-foot<br />
(808-square-meter) training center in<br />
Houston. The centerpiece of the facility is<br />
the large hands-on area equipped with a<br />
slip-resistant epoxy floor for safety. Here,<br />
one 15-ton and two five-ton overhead<br />
bridge cranes facilitate the movement<br />
of full-sized training equipment such<br />
as compressor bundles and a multistage<br />
steam turbine, while two half-ton jib<br />
cranes are available for disassembling<br />
and reassembling smaller components<br />
such as compressor cylinders and<br />
single-stage turbines.<br />
Each classroom is outfitted with<br />
up-to-date audio-visual equipment and<br />
the latest in training tools. The larger<br />
hands-on area and an extra classroom<br />
allowed us to set up permanent equipment<br />
workstations and computers that are<br />
readily available, making it more efficient<br />
for service personnel to meet training and<br />
certification requirements. To achieve<br />
maximum effectiveness of the new facility,<br />
designers employed lean methodology in<br />
the layout to permit several classes to be<br />
conducted simultaneously.<br />
OPTIMIZING OUR<br />
MANUFACTURING PROCESS<br />
<strong>Dresser</strong>-<strong>Rand</strong> is dedicating resources<br />
to teaching lean manufacturing and<br />
Six Sigma principles. Certified trainers<br />
travel to our facilities globally to educate<br />
employees on value stream mapping and<br />
set-up time reduction, and to conduct<br />
Kaizen events. These efforts are part of<br />
our Operational Excellence initiatives<br />
and have helped to reduce waste and<br />
increase throughput.<br />
CORPORATE SUSTAINABILITY REPORT 23
HEALTH & SAFETY<br />
24 DRESSER-RAND<br />
The safety of <strong>Dresser</strong>-<strong>Rand</strong> employees and clients is our number one<br />
priority. Our belief is that with disciplined processes, thought and execution,<br />
supported by a culture of caring for each other, we will return every<br />
<strong>Dresser</strong>-<strong>Rand</strong> employee, contractor and client home safely. Keeping people<br />
safe is not only the right thing to do, but it makes good business sense as<br />
well. Our clients demand outstanding safety from us. We share our clients’<br />
belief that safety excellence requires the same kind of discipline as quality,<br />
on-time delivery and costs. We want to be the supplier of choice among<br />
our clients, building “loyalty for life” and recognizing that overall safety is<br />
their first priority, too.<br />
Over the last four years we have made improvements in our safety<br />
performance as measured by the total recordable injury rate (TRIR). We<br />
use the same common OSHA-Recordable definition at all of our facilities<br />
around the world. Also, if we acquire any company or operation,<br />
<strong>Dresser</strong>-<strong>Rand</strong> waits and evaluates the newly acquired company for 12<br />
months before incorporating its safety statistics into our global statistics.<br />
This provides an opportunity to build upon our safety culture and better<br />
reflects our performance.<br />
In 2008, our TRIR was 0.90; in 2009 it was 0.81; in 2010 we finished the year<br />
at 0.49, while in 2011 our final performance was 0.57. Our total recordable<br />
incident rate was in the top quartile for our industry in 2011; however, we<br />
did experience a tragic loss of one of our employees. As a result, our target<br />
of zero injuries and our mission to bring every employee home safely has<br />
added significance for all of us. And it’s a target that is achievable. During<br />
2011, two of our regions, Asia Pacific and Latin America, achieved the elite<br />
status of zero recordable injuries. Twenty-two of our service centers and<br />
five of our factories were also included in this extraordinary achievement.<br />
Safety is a critical, cultural value of <strong>Dresser</strong>-<strong>Rand</strong> that demonstrates our<br />
organization’s ethics, caring and respect for its people. It is a key ingredient<br />
in the glue that binds people to our organization.<br />
In 2012, we plan to better leverage the centralized functional HSE reporting<br />
relationship by providing strategic and process direction to all safety<br />
professionals worldwide to help improve efficiency and effectiveness.<br />
We recognize that we cannot achieve a TRIR of zero without becoming<br />
operationally excellent. Our HSE team will collaborate with our Quality,<br />
Process Innovation, Operations, Engineering, and Human Resources<br />
organizations to take a comprehensive, holistic approach to Operational<br />
Excellence. We will do this by identifying gaps in achieving “disciplined<br />
processes” and “disciplined execution” and will implement appropriate<br />
corrective actions. We will use safety discussions of at-risk behaviors and<br />
conditions as a primary rallying point in discussions with our workforce.<br />
Peter Salvatore<br />
Vice President and Chief Safety Officer
HSE MISSION<br />
The mission of the <strong>Dresser</strong>-<strong>Rand</strong> HSE<br />
team is to conduct its activities in a<br />
manner that protects the health and<br />
safety of our employees, our clients, our<br />
communities, and the environment in<br />
which we operate. The HSE team:<br />
• Believes that all incidents are preventable<br />
and continually challenges our processes<br />
and our practices to improve our HSE<br />
performance.<br />
• Is committed to providing our employees<br />
with training, knowledge and tools that<br />
promote health, safety and environmental<br />
excellence.<br />
• Holds personal accountability as the<br />
cornerstone of its beliefs and values. We<br />
believe that each of us has a responsibility<br />
for our own safety and a shared<br />
responsibility for the safety of others.<br />
Our policy is an integral component of<br />
the company’s visible commitment to<br />
corporate citizenship, social responsibility<br />
and employee development.<br />
INVOLVING OUR FAMILIES<br />
WITH SAFETY<br />
In 2011 we held many safety days and<br />
weeklong safety and health awareness<br />
events in which families were invited<br />
to the workplace for awareness and<br />
camaraderie. These events also included<br />
participation by local emergency<br />
responders (fire and police) as well<br />
as health care providers from local<br />
hospitals. The purpose of these events<br />
was to welcome families and friends<br />
of our employees to the workplace and<br />
to reinforce our commitment to safety<br />
beyond our shop and job sites. Safety<br />
affects all aspects of our lives—at work,<br />
at home and at play. Our hope is that<br />
everyone understands that <strong>Dresser</strong>-<strong>Rand</strong><br />
truly values our employees and that we<br />
are steadfast in our drive to protect them<br />
from harm. We want our families to know<br />
that <strong>Dresser</strong>-<strong>Rand</strong> is a family-oriented<br />
company; we are all team members and<br />
share a common goal to create balance and<br />
harmony with safety in our lives.<br />
PROMOTING HEALTHY<br />
LIFESTYLES<br />
<strong>Dresser</strong>-<strong>Rand</strong> U.S. employees have access<br />
to many resources to help support, inform<br />
and motivate them to improve their<br />
health and reach the next level of wellness.<br />
Programs include:<br />
• 24/7 nurse line—around-the-clock<br />
toll-free support<br />
• Rewards for healthy living<br />
• Making fitness easy, fun and affordable<br />
• Maternity program<br />
• Personal health managers<br />
• Tobacco cessation tips<br />
• Weight management programs<br />
GAS ENGINE TECHNOLOGY<br />
CENTER EMPLOYEES BIKE<br />
TO WORK<br />
On June 22, 2011, more than half of the<br />
<strong>Dresser</strong>-<strong>Rand</strong> Gas Engine Technology<br />
Center office employees left their cars at<br />
home and participated in Bike to Work<br />
day in Fort Collins, Colo., USA. In total,<br />
the team biked 110 miles, reducing the<br />
overall environmental impact of their<br />
daily commute and promoting a healthy<br />
lifestyle. The <strong>Dresser</strong>-<strong>Rand</strong> Gas Engine<br />
Technology Center employees have<br />
pledged to bike a total of 4,000 miles to<br />
and from work. The mileage pledge is an<br />
employee challenge in order to maintain<br />
our ClimateWise Platinum status.<br />
DRESSER-RAND WELLSVILLE<br />
OPERATIONS PARTICIPATES<br />
IN 5K CHALLENGE<br />
When the second annual Balloon Rally<br />
and 5k Run/Walk was announced,<br />
the <strong>Dresser</strong>-<strong>Rand</strong> wellness team at<br />
the Wellsville, N.Y., operation decided<br />
to challenge another local employer,<br />
with all proceeds benefiting the local<br />
Island Park. The challenge was based<br />
upon the number of employees that each<br />
team had participating in the event.<br />
On July 16, <strong>Dresser</strong>-<strong>Rand</strong> entered 38<br />
employees. The team demonstrated their<br />
commitment to health and fitness, and<br />
to their community.<br />
Participants were Brad Billings, Tanya<br />
Black, Danielle Brant, Joe Callahan,<br />
Gus Cavalletti, Robert Chase, Jesse<br />
Coats, Bill Cunningham, Jim Dello, Dave<br />
Drew, Holly Dunaway, Mike Dunaway,<br />
Mary Fanton, Rhonda Geffers, Ed<br />
Grandusky, Cassie Hawley, Amanda<br />
Jadwin, Sharon Johnson, Irene Kaechele,<br />
Katherine Kinnicutt, Laura Kintner, Jim<br />
Lanzo, Lisa Lewis, Mike McGee, Joe<br />
Menichino, Mike Porter, Vince Rybicki,<br />
Shiloh Sherwood, Glenn Smith, Terah<br />
Soule, Sara Weller, Lisa Young, and<br />
Buddy the dog. Not shown: Jesse Coats,<br />
Sherry Fisher, Jim Biddle, Mike Babcock,<br />
Balbino Arevalo, and Sue Hanbach.<br />
AWARDS AND RECOGNITION<br />
RECEIVED IN 2011<br />
SOCIETY<br />
Gold Safety Award winners from Chevron El<br />
Segundo. Front Row (l-r): Franck Degueure,<br />
Suzanne Worley, Chris Grapsas, Greg Gabel,<br />
Kyle Nicklas, Frank Semancik. Back Row (l-r):<br />
Rob Marsters, Mike Riggs, Bruce Perry.<br />
• <strong>Dresser</strong>-<strong>Rand</strong> U.K. was commended<br />
by Talisman Energy for Best Individual<br />
Intervention<br />
• U.S. Field Services (PACS) Contractor<br />
Safety Recognition by Chevron<br />
• U.S. Field Services (GSE) Honorable<br />
Mention Safety Performance from<br />
Hovensa<br />
• Burlington (NAO) recognized by the<br />
Iowa-Illinois Safety Council for Incident<br />
Rate Less Than the Manufacturing<br />
Category<br />
• Burlington (NAO) recognized by Des<br />
Moines County—Waste Management<br />
(Landfill) for Recycling—Dropped<br />
Landfill Usage by 90%<br />
• <strong>Dresser</strong>-<strong>Rand</strong> Canada awarded<br />
Certificate of Achievement from<br />
Saskatchewan Workers’ Compensation<br />
Board for Making the Workplace Safer<br />
• <strong>Dresser</strong>-<strong>Rand</strong> Canada awarded<br />
Certificate of Recognition from Alberta<br />
government for Injury Reduction<br />
• Recognized by Petroleos de Venezuela,<br />
S.A. (PDVSA) for Excellent Profile<br />
and Attitude in Health, Safety and<br />
Environmental<br />
• Gold Eagle Safety Award from Chevron<br />
El Segundo for Excellence in the Los<br />
Angeles Branch<br />
CORPORATE SUSTAINABILITY REPORT 25
COMMUNITY<br />
ENGAGING OUR<br />
COMMUNITIES<br />
• Educational partnerships<br />
in our main countries of<br />
operation<br />
• Employee volunteerism and<br />
local contribution programs<br />
• Enlisting local universities<br />
with environmental projects<br />
26 DRESSER-RAND<br />
The <strong>Dresser</strong>-<strong>Rand</strong> community philanthropic programs focus on the<br />
communities where we operate. Our employees require a broad range of skills<br />
to meet the needs of the organization. Through our partnerships and funding<br />
initiatives, we engage and educate students, from middle school to college,<br />
about the opportunities available in science-based learning. We strive to give<br />
students the skills to handle complex economic, environmental and social<br />
concerns. As a technology leader in our industry, we support our communities<br />
by helping to develop educated citizens.<br />
• Since 2007, we have supported U.S. educational partnerships in New York<br />
State’s Southern Tier region through our support of regional schools, such as<br />
Saint Bonaventure University and Jamestown Community College in Olean,<br />
SUNY Alfred in Wellsville and Corning Community College in Painted Post.<br />
• Since 2009, we have held partnerships with SUNY Buffalo and with Texas A&M<br />
University. Partnerships in 2011 included the Rochester Institute of Technology<br />
and Pennsylvania State University, where students actively participate in<br />
applied learning at <strong>Dresser</strong>-<strong>Rand</strong> including turbomachinery R&D projects.<br />
• We continue to develop educational partnerships to support our global<br />
operations, such as the ones established in 2009 between King Fahd<br />
University in Saudi Arabia and Lehigh University in Bethlehem, Pa., U.S.A., and<br />
with Nirma Institute of Technology in India. In 2010, several partnerships were<br />
created or continued, including Ecole de Management de Normandie and<br />
Association de Formation Professionnelle de I’Industrie in Le Havre, France,<br />
and CESI Engineering School in Rouen, France.<br />
• In Germany, we have maintained several long-term relationships with<br />
schools, including University of Essen/Duisburg, University of Bielefeld, the<br />
Engineering School at FH Bielefeld and the Business School at FH Düsseldorf,<br />
allowing students hands-on experiences through cooperative opportunities.<br />
In the United Kingdom, <strong>Dresser</strong>-<strong>Rand</strong> has maintained relationships with<br />
Peterborough Regional College and Cranfield University in Bedford for<br />
continuing and higher-level education for employees.<br />
• <strong>Dresser</strong>-<strong>Rand</strong> and five other technology companies in Norway are parties to<br />
an agreement with Høgskolen i Buskerud (HiBu) Department of Technology<br />
to establish a three-year Systems Engineering Master’s Degree program. The<br />
program combines on-the-job training with <strong>studies</strong> and a semester at Stevens<br />
Institute of Technology in New Jersey. Students who complete the program<br />
receive a dual master degree from HiBu and Stevens.<br />
• In Indonesia, we have created relationships with Balai Latihan Kerja and<br />
Lembaga Pendidikan Pengembangan Profesi Indonesia, where we provide<br />
students with on-the-job training.<br />
<strong>Dresser</strong>-<strong>Rand</strong> is continuing its efforts to support and engage universities<br />
globally. Several additional partnerships are in the works to engage students<br />
around the world and encourage them to join our exciting industry.<br />
Mark Mai<br />
Vice President, General Counsel & Secretary
SOCIAL RESPONSIBILITY<br />
Providing energy supply for isolated<br />
off-grid areas is quite a challenge<br />
and adventure for Guascor Brazil, a<br />
<strong>Dresser</strong>-<strong>Rand</strong> company. The company´s<br />
commitment to provide continuous<br />
and quality power forges a long-term<br />
relationship with the communities<br />
served. <strong>Dresser</strong>-<strong>Rand</strong> hires local workers<br />
and provides ongoing training to<br />
improve technical skills. The quality of<br />
life within the communities served is<br />
enhanced by supplying power essential for<br />
everyday activities.<br />
<strong>Dresser</strong>-<strong>Rand</strong> is well aware of its role<br />
in these communities, and its influence<br />
goes beyond selling power. For example,<br />
the company is a sponsor of the Vaga<br />
Lume Association. Since 2001, Vaga Lume<br />
has operated in rural communities in<br />
the Brazilian Legal Amazon, developing<br />
projects in education and culture, and<br />
stimulating writing and speaking skills.<br />
The exchange takes place through libraries<br />
and reading mediators. In 2011, the<br />
association distributed more than 15,000<br />
new books and created 19 new community<br />
libraries benefiting more than 23,000<br />
people (according to Schools Register).<br />
Over time, Vaga Lume intensified its<br />
cultural exchanges with communities,<br />
creating new initiatives and expanding the<br />
scope of their actions. The literature, the<br />
expeditions, the formation meetings and<br />
cultural exchange are ways in which Vaga<br />
Lume expands the worldview of children<br />
and adults. Vaga Lume has become a<br />
well-recognized and award-winning<br />
institution and received the important<br />
UN Intercultural Innovation Award<br />
in 2011.<br />
SOLAR ENERGY<br />
One of the most successful and innovative<br />
programs that <strong>Dresser</strong>-<strong>Rand</strong> jointly<br />
developed with Vaga Lume was a pioneer<br />
training project for future users of new<br />
solar farms in Amazonas, Brazil. These<br />
solar farms are located in 12 off-grid,<br />
small riverside towns. Before the solar<br />
farms went into operation, the Vaga Lume<br />
Association trained representatives from<br />
these communities to raise awareness<br />
for the sustainable use of solar energy.<br />
The program was a complete success,<br />
and many other clients are now interested<br />
in similar programs. So as we say in Brazil:<br />
“This partnership promises!”<br />
For further information, please visit<br />
www.vagalume.org.br.<br />
Employees at <strong>Dresser</strong>-<strong>Rand</strong>’s Naroda, India, facility are helping the underprivileged<br />
by donating textbooks and working on community initiatives.<br />
COMMUNITY SERVICE<br />
INITIATIVE BY DRESSER-RAND<br />
NARODA EMPLOYEES<br />
A community service team was formed<br />
at our Naroda, India, facility to help the<br />
underprivileged in their community. Their<br />
charter specifies that they coordinate,<br />
mobilize and support their fellow<br />
employees’ efforts by donating their<br />
services and taking various initiatives for<br />
the benefit of those in need of assistance in<br />
the community.<br />
The team donated textbooks that benefited<br />
more than 100 children. The books were<br />
purchased using voluntary contributions<br />
from employees.<br />
The Naroda team is working on a number<br />
of community initiatives including<br />
donating woolen clothes, organizing<br />
events at an orphanage, a medical camp, a<br />
health awareness workshop, and planting<br />
saplings in the community.<br />
Naroda’s community service team<br />
members have volunteered their time,<br />
treasure and talent and are having a<br />
positive impact on their community.<br />
SOCIETY<br />
COMPRESSOR DONATION TO<br />
RIT PROMOTES EDUCATION AND<br />
RESEARCH<br />
Rochester Institute of Technology,<br />
Rochester, N.Y., received a donation of<br />
an advanced reciprocating compressor<br />
from <strong>Dresser</strong>-<strong>Rand</strong> in 2010 valued at<br />
$90,000. It was installed in the Kate<br />
Gleason College of Engineering and is<br />
being used by faculty and students on<br />
multidisciplinary design projects and<br />
research. The university is using the<br />
equipment for educational laboratorystyle<br />
experiments for several engineering<br />
courses, senior-design teams and co-op<br />
project experiences. Its primary function<br />
is to support graduate research in machine<br />
health monitoring and fault detection. In<br />
2011, <strong>Dresser</strong>-<strong>Rand</strong> made an additional<br />
donation of a data acquisition system,<br />
valued at $45,000, to further support work<br />
being done in that area. Both donations<br />
are part of the <strong>Dresser</strong>-<strong>Rand</strong> University<br />
Project Sponsorship program designed to<br />
provide universities with equipment and<br />
information to help advance knowledge of<br />
the engineering workforce and further the<br />
company’s initiatives, from recruitment<br />
to research.<br />
CORPORATE SUSTAINABILITY REPORT 27
In February 2011, <strong>Dresser</strong>-<strong>Rand</strong><br />
employees provided home repairs for<br />
a family in Needville, Texas. Shown are<br />
field service coordinator Don Greer and<br />
Charlie Carnes from the Houston Training<br />
Center, and field service technicians<br />
Benjamin Barclay, Daniel Scalfaro,<br />
Jerry Carnes, and Pappy Colvin from<br />
the Naperville, Ill., Service Center.<br />
28 DRESSER-RAND<br />
BRAZIL TEAM DONATES MORE<br />
THAN 2,000 POUNDS OF FOOD<br />
The Brazil Service Center collected about<br />
2,244 pounds of food for the Paulo Freire<br />
Institute during their annual Health and<br />
Safety Week, helping approximately 120<br />
needy children.<br />
Congratulations to the entire Brazil team<br />
for such a fantastic accomplishment, and<br />
to the 2010–11 Brazil Safety Commission<br />
Team for launching the campaign.<br />
The team was formed by the following<br />
employees: Fabricio Braga, Antonio<br />
Barros, Arthur Moura, André Macorin,<br />
Reinaldo Celestino, Marco Antonio, and<br />
Reinaldo Miranda.<br />
The Freire Institute is an organization<br />
committed to community-based learning.<br />
FAMILY HELPS WITH TORNADO<br />
CLEANUP IN ALABAMA<br />
In April 2011, a violent tornado outbreak<br />
devastated the small Alabama community<br />
of Harvest. After viewing pictures of the<br />
destruction, Kyle DeBerg, a <strong>Dresser</strong>-<strong>Rand</strong><br />
senior designer from Burlington, Iowa, his<br />
wife Nora and their five children, ranging<br />
in age from 12 to 21, spent their family<br />
vacation in Harvest helping with the<br />
cleanup. The DeBerg family unanimously<br />
agreed to make the 10-hour trip and spent<br />
most of their time helping a local retired<br />
couple attach tarps to the roof of their<br />
home, tear down damaged buildings and<br />
clear debris.<br />
VOLUNTEERS ASSIST WITH<br />
HURRICANE RELIEF EFFORTS<br />
In late August 2011, tropical storm<br />
Irene struck several states, including<br />
New York and New Jersey, producing<br />
heavy rainfall that resulted in extensive<br />
flooding. Seven <strong>Dresser</strong>-<strong>Rand</strong> employees<br />
from the company’s Wellsville, N.Y.,<br />
facility traveled to Greene, Rockland<br />
and Schoharie counties in New York,<br />
to help victims of the storm by pumping<br />
water out of basements, salvaging personal<br />
belongings from damaged residences,<br />
and conducting door-to-door checks<br />
on residents in areas that suffered<br />
extensive damage and flooding. They<br />
also provided relief for local firefighters<br />
in those counties, many of whom had<br />
not had the opportunity to check on<br />
their own homes following the storm.<br />
All seven employees serve as volunteer<br />
firefighters with different fire departments<br />
in Allegany County.
SUPPLIERS<br />
ENGAGING OUR SUPPLIERS<br />
• Supplier globalization<br />
• Operational excellence<br />
• Safety and compliance<br />
• Technology-based risk<br />
management<br />
SOCIETY<br />
Our business model requires strong, enduring supplier relations with<br />
globally competitive companies. In 2011, we spent approximately $1.1 billion<br />
with suppliers for engineering, manufacturing and services. We view our<br />
supply chain as an extension of our manufacturing network. Training and<br />
knowledge transfer helps new and established suppliers provide consistent,<br />
efficient and safe delivery of our products and services. Contractual<br />
requirements with our suppliers include the normal commitments to<br />
quality and on-time delivery; however, we also include requirements for<br />
implementation of a sustained continuous improvement program and<br />
adherence to our Supplier Code of Conduct. The latter is particularly<br />
important as our supply chain is globally expanded.<br />
Both in 2011 and continuing in 2012, global supply chain expansion is<br />
imperative and includes added focus in Brazil, Saudi Arabia, India, and<br />
China. The expansion is particularly important in sustaining our expanded<br />
client support in those regions.<br />
Our requirements are the same for any supplier, independent of region,<br />
with an overall focus on Operational Excellence—quality, cycle time and<br />
total value.<br />
As an advocate of minority and small business development, we are fully<br />
committed to the economic growth and development of minorities, women,<br />
veteran-owned, and small business enterprises, spending approximately<br />
$200 million with them in 2011. We embrace our social responsibility to<br />
support businesses locally, regionally and nationally where we conduct<br />
business. We recognize the importance of maximizing our procurement<br />
opportunities to welcome diverse business enterprises with compatible<br />
value propositions.<br />
By identifying and strategically aligning strong suppliers capable of<br />
adding value to our business needs, we are able to provide a competitive<br />
advantage in the marketplace while fulfilling the expectations of our clients<br />
to support minority business development. Our efforts to proactively seek<br />
qualified suppliers and share with them potential business opportunities<br />
are never-ending. In 2011, we continued our participation in a variety of<br />
affiliate outreach trade fairs, procurement forums and company/supplier<br />
matchmaking events nationwide.<br />
Expansion of our supply chain also requires skill, competency and talent<br />
growth within the functional discipline. It requires higher skill sets and<br />
understanding of global complexities. We have committed to training and<br />
recruitment to meet these ends.<br />
It is always the talent in our organization that drives the success of this critical<br />
element of our business.<br />
Ken Marcia<br />
Vice President, Worldwide Supply Chain & Process Innovation<br />
CORPORATE SUSTAINABILITY REPORT 29<br />
CORPORATE SUSTAINABILITY REPORT 29
USING TECHNOLOGY TO<br />
IMPROVE LIVES<br />
30 DRESSER-RAND<br />
Access to electricity and drinkable water remains a common problem for<br />
hundreds of millions of people living in remote locations around the world.<br />
Bringing electricity to these remote communities in a conventional manner<br />
is expensive because of the need for hundreds of miles of power lines. The<br />
distance electricity would need to travel from the power plant would result<br />
in large load losses along the way. In addition, building miles and miles of<br />
power lines can damage the ecosystem in these remote areas.<br />
<strong>Dresser</strong>-<strong>Rand</strong>, through its acquisition of Guascor, has the expertise and<br />
technology to provide power in off-grid rural locations by means of diesel<br />
generation or photovoltaic (PV) systems (as shown at left).<br />
<strong>Dresser</strong>-<strong>Rand</strong> provides distributed power to 56 off-grid locations in Brazil.<br />
We also operate four equipment recovery centers in the Amazon region.<br />
Engines from power generation sets that cannot be economically repaired<br />
are recovered, disassembled, refurbished and inventoried for future engine<br />
repairs. This process reduces raw material consumption and pollution<br />
related to the manufacture of new parts.<br />
The majority of rural electrification projects using photovoltaic systems are<br />
based on individual kits. Each house has its own panel, regulator, battery<br />
and, if necessary, a solar inverter.<br />
Maintenance is often neglected because of the distance the provider might<br />
need to travel to work on the kit. Consequently, the solar kits tend to suffer<br />
irreparable damage within a few years.<br />
<strong>Dresser</strong>-<strong>Rand</strong>, in conjunction with other companies, provides utilities<br />
throughout the Amazon with reliable and proficient O&M capability, helping<br />
to keep a dispersed set of PV installations running. The aim of the project is<br />
to establish guidelines for companies maintaining an efficient, sustainable<br />
rural electrification infrastructure.<br />
<strong>Dresser</strong>-<strong>Rand</strong> also develops centralized power generation systems<br />
(“mini-grid” systems) using PV solar energy. These mini-grid systems tie<br />
the PV generation system (solar panels, controller, batteries, and inverter)<br />
to a central location within a village and connect power lines to each house.<br />
Photovoltaic generation systems are a sustainable resource that offers the<br />
end user environmental, economic and social benefits.<br />
The advantages of the mini-grid system compared to individual kits include:<br />
• Continuous availability of photovoltaic generation<br />
• Increased energy availability<br />
• Grid expansion to new housing at reduced cost<br />
• Public street lighting<br />
• Remote system monitoring<br />
The main advantage of distributed power generation solutions, whether<br />
engine-based or based on solar PV energy, is that they are available to<br />
most rural villages.<br />
Asier Alea<br />
Business Development Manager—Environmental Solutions
CASE STUDIES<br />
PIG MANURE MANAGEMENT<br />
The Spanish swine herd amounts<br />
to more than 25 million head (20%<br />
of the entire EU), and generates<br />
about 50 million cubic meters of<br />
pig manure each year.<br />
Pig manure (slurry) is used to<br />
fertilize crops because it is high in<br />
nutrients. However, the use of the<br />
nitrate-rich manure in certain rural<br />
areas has resulted in soil and water<br />
contamination. Restrictions have<br />
been imposed in areas designated<br />
“vulnerable,” and the slurry must<br />
be treated to prevent negative<br />
environmental impact. Treatment<br />
costs are high and damaging to the<br />
farming economy.<br />
<strong>Dresser</strong>-<strong>Rand</strong> developed a<br />
proprietary slurry treatment<br />
technology. This technology uses<br />
an engine-based process to dry the<br />
pig manure, converting it to a dry<br />
WIND ENERGY<br />
Wind energy is currently one of the<br />
most tested and efficient forms<br />
of all renewable energies. It does<br />
fertilizer. It was first used in a slurry<br />
treatment plant in Catalonia, Spain,<br />
which became operational in 1999.<br />
Today, there are six such plants with<br />
approximately 40 Guascor engines<br />
in operation, treating 100,000 cubic<br />
meters of pig manure per year.<br />
Manure is transported to a slurry<br />
treatment plant, and the organic<br />
fraction is transformed into a fertilizer.<br />
This technology is important because<br />
it stops nitrogen compounds<br />
from contaminating the soil and<br />
groundwater and eliminates odors<br />
and methane emissions from the<br />
slurry. In addition, it creates a dry<br />
fertilizer or degradable sludge with<br />
high agronomic value.<br />
Compliance with the strict<br />
environmental criteria has already<br />
allowed the installations to receive<br />
environmental certification<br />
UNE-EN-ISO-14001.<br />
not pollute, it is inexhaustible and it<br />
reduces use of fossil fuels, helping<br />
to reduce carbon emissions.<br />
The electricity produced by a wind<br />
turbine is void of CO2 emissions<br />
(responsible for the greenhouse<br />
effect), and SO2 and NOX emissions<br />
(responsible for acid rain).<br />
Furthermore, and contrary to what<br />
can happen with conventional<br />
energies, wind power produces no<br />
adverse environmental impacts to<br />
ground water and aquifers.<br />
The wind farms maintained by<br />
<strong>Dresser</strong>-<strong>Rand</strong> throughout the Iberian<br />
Peninsula generate approximately<br />
1,060 GWh of electricity per year,<br />
which is equivalent to the power<br />
consumption of 235,000 households.<br />
Compared to conventional power<br />
alternatives, these wind farms<br />
produce significantly lower levels<br />
of emissions. On an annual basis,<br />
the reduction in emissions to the<br />
ENVIRONMENT<br />
atmosphere is estimated to be<br />
approximately 636,333 tons of<br />
CO2, 1,410 tons of SO2 and 1,771<br />
tons of NOX. Wind power represents a great<br />
opportunity for local development<br />
in disadvantaged areas because<br />
remote, off-grid areas can gain<br />
access to electricity and land<br />
owners to economic resources.<br />
<strong>Dresser</strong>-<strong>Rand</strong> recruits local<br />
personnel to operate and maintain<br />
(O&M) the wind farms, creating jobs<br />
locally.<br />
<strong>Dresser</strong>-<strong>Rand</strong> wind O&M technicians<br />
assist with the maintenance of wind<br />
farms in Mexico, Morocco, Egypt,<br />
Dominican Republic and China,<br />
among others. These technicians<br />
work closely with local technicians<br />
on corrective and preventive<br />
maintenance. They also transfer<br />
skills and know-how to increase<br />
local self-reliance.<br />
CORPORATE SUSTAINABILITY REPORT 31
SECTION 3<br />
GOVERNANCE<br />
<strong>Dresser</strong>-<strong>Rand</strong> promotes the HIGHEST STANDARDS of governance. These standards remain at the<br />
core of our company’s reputation and stability and provide a foundation upon which we are able to<br />
serve our stockholders, employees, clients, suppliers, and other stakeholders with passion, hard<br />
work, confidence, and an INNOVATIVE SPIRIT. Beyond our long-standing commitment to abide by<br />
laws and regulations applicable to us, we work hard to engender a culture of conducting ourselves<br />
ethically. Simply put, our management team continually encourages our workforce to do their jobs<br />
THE RIGHT WAY. Our governance systems are the cornerstone of our corporate management and,<br />
in conjunction with our principles and values, guide the decisions and actions of all employees.<br />
32 DRESSER-RAND<br />
2011 COMMITMENTS 2011 ACCOMPLISHMENTS<br />
Provide periodic reporting to the Board<br />
with respect to the company’s risk<br />
management and mitigation program<br />
Improve our program for implementing,<br />
reviewing and communicating our<br />
corporate policies<br />
Address global legislative developments<br />
relating to combating corruption<br />
Improve the effectiveness of the company’s<br />
hotline review and resolution process<br />
Continue to leverage the organization’s<br />
investment in Global Singular Processes<br />
Provided periodic updates to<br />
the Board<br />
Developed process to ensure greater<br />
consistency in communication and<br />
training for newly adopted or amended<br />
policies; executed compliance training<br />
for Guascor employees<br />
Implemented new global anti-corruption<br />
policy with a supplement addressing the<br />
U.K. Bribery Act; conducted employee<br />
training; enhanced Due Diligence review<br />
process for third-party intermediaries<br />
Provided additional training for<br />
employees who investigate hotline<br />
reports; developed process for Internal<br />
Audit to monitor implementation of<br />
designated corrective actions<br />
Completed GSP implementations in Olean,<br />
N.Y., and Dubai; implemented customer<br />
relationship management for D-R Services
2012 GOALS<br />
Provide periodic reporting to the<br />
Board with respect to the company’s risk<br />
management and mitigation program<br />
Enhance Board governance through the<br />
adoption of a majority voting standard<br />
for uncontested director elections<br />
Continue improving our program<br />
for implementing, reviewing and<br />
communicating our corporate policies<br />
Respond to regulatory developments relating<br />
to governance and disclosure issues<br />
Identify critical process controls for key work<br />
streams; continue to expand the GSP footprint<br />
into new locations, including Canada<br />
GOVERNANCE<br />
CORPORATE SUSTAINABILITY REPORT 33
OUR APPROACH TO<br />
GOVERNANCE<br />
BOARD OVERSIGHT<br />
The business and affairs of the company<br />
are managed by or under the direction<br />
of its Board of Directors, comprised of<br />
eight members, each of whom is elected<br />
annually. With the exception of Vincent<br />
R. Volpe Jr., our president and CEO, all of<br />
our directors are independent, including<br />
the Chairman of the Board, William E.<br />
Macaulay. More information about our<br />
directors, including their backgrounds,<br />
can be found in our Proxy Statement,<br />
which is available on our website.<br />
At its February 2010 meeting, the Board<br />
approved the <strong>Dresser</strong>-<strong>Rand</strong> Sustainability<br />
Principles, which apply to our strategic<br />
decision-making at all levels of the<br />
organization. Our CEO directs the<br />
<strong>Dresser</strong>-<strong>Rand</strong> Sustainability Council<br />
with oversight from the Board. The<br />
CEO and other officers’ and managers’<br />
performance reviews include assessment<br />
of their success in achieving certain<br />
sustainability objectives. Improving<br />
our safety performance is an objective<br />
of all our key managers. Consistent with<br />
market practices, non-employee directors<br />
are paid compensation for their services,<br />
which includes an annual cash retainer,<br />
grants of restricted stock, meeting fees,<br />
and fees for serving as a committee<br />
BOARD OF DIRECTORS<br />
chairperson. Further information<br />
regarding director compensation can<br />
be found in our Proxy Statement.<br />
There are three standing committees<br />
of the Board: Audit, Compensation,<br />
and Nominating and Governance. All<br />
committee members, including the<br />
chairs, are independent. Each standing<br />
committee annually reviews its written<br />
charter and conducts a self-evaluation.<br />
The Board reviews its performance<br />
annually under the direction of the<br />
chairperson of the Nominating and<br />
Governance Committee.<br />
GOVERNANCE DOCUMENTS<br />
The company’s Corporate Governance<br />
Guidelines, Code of Conduct and<br />
the charters of its Audit Committee,<br />
Nominating and Governance Committee,<br />
and Compensation Committee are<br />
available on the company’s website at<br />
www.dresser-rand.com/corpgov. In<br />
conjunction with our Enterprise Risk<br />
Management program, these core<br />
documents direct the Board’s activities<br />
and address the Board’s responsibilities,<br />
which include, through oversight and<br />
direction of management, reviewing<br />
the company’s business strategies and<br />
financial performance, compensating<br />
William E. Macaulay Vincent R. Volpe Jr. Philip R. Roth Rita V. Foley<br />
and developing senior managers, insuring<br />
appropriate processes for promoting the<br />
integrity of the conduct of our employees<br />
and our financial reporting, and promoting<br />
our compliance with all applicable laws<br />
and regulations in the countries where we<br />
operate.<br />
GLOBAL SINGULAR PROCESS<br />
To increase process discipline and<br />
information sharing across global<br />
operations, we are implementing Oracle®<br />
software. We refer to this common<br />
approach as the <strong>Dresser</strong>-<strong>Rand</strong> Global<br />
Singular Process, or GSP. When we identify<br />
a best practice as part of our quest for<br />
Operational Excellence, we seek to<br />
uniformly adopt it across the enterprise.<br />
In February of 2011, GSP went live<br />
in Olean, N.Y. Additionally in 2011,<br />
GSP was implemented to support the new<br />
<strong>Dresser</strong>-<strong>Rand</strong> materials center in Dubai.<br />
This included integration with third-party<br />
logistics providers for automation across<br />
the value chain, increasing efficiency and<br />
customer responsiveness in the region. GSP<br />
went live in Canada in February 2012. We<br />
continue to leverage the common platform<br />
to improve financial transparency and<br />
enable Operational Excellence across the<br />
organization.<br />
Stephen A. Snider
SUCCESSION PLANNING<br />
The Board plans for succession to the<br />
position of CEO as well as other senior<br />
management positions. To assist the<br />
Board, the CEO annually provides<br />
the Board with an assessment of senior<br />
managers and of their potential to succeed<br />
him. He also provides the Board with an<br />
assessment of persons considered potential<br />
successors to certain senior management<br />
positions. The Board meets annually to<br />
evaluate such succession and to oversee<br />
the company’s management development<br />
process. A procedure has been adopted<br />
to facilitate communication and outline<br />
a process in the event our CEO is unable<br />
to perform his duties due to unforeseen<br />
circumstances.<br />
ETHICAL BUSINESS PRACTICES<br />
<strong>Dresser</strong>-<strong>Rand</strong> has a robust program<br />
of policies and procedures that guide<br />
our decisions. We are in the process of<br />
reviewing and categorizing these to better<br />
ensure that the right people are getting the<br />
right information in a timely manner to<br />
improve decision-making.<br />
Chief among our policies is our Code<br />
of Conduct, which is applicable to all<br />
directors, officers and employees. It<br />
includes provisions relating to ethical<br />
conduct, conflicts of interest and<br />
compliance with the law. The Code<br />
outlines the values and standards of<br />
behavior that make <strong>Dresser</strong>-<strong>Rand</strong> a<br />
trusted and respected organization. It is<br />
each employee’s responsibility to exercise<br />
sound business judgment and act honestly,<br />
ethically and with integrity.<br />
Employees receive training through<br />
computerized modules. We hold an<br />
annual worldwide Management Meeting<br />
with approximately 145 managers<br />
participating, where we review and discuss<br />
infractions of the Code in the prior year<br />
and the disciplinary consequences.<br />
Reporting unethical or illegal behavior<br />
is the responsibility of every employee.<br />
Employees who discover a potential<br />
violation of the Code are encouraged<br />
to call our confidential and, where<br />
permitted by applicable law, anonymous<br />
Ethics Hotline. The hotline is available<br />
in most countries in which we operate. A<br />
third-party provider tracks the number of<br />
calls and the basic nature of them. These<br />
and communications received directly by<br />
management are reviewed quarterly by<br />
the Audit Committee of the Board and<br />
annually by the full Board. An Ethics<br />
Committee established by the CEO<br />
reviews disciplinary recommendations<br />
resulting from significant violations to<br />
the Code to determine whether discipline<br />
is appropriate and to ensure consistency<br />
throughout the organization. Following<br />
review by the Ethics Committee, our vice<br />
president of Internal Audit monitors the<br />
implementation of any disciplinary or<br />
other corrective actions.<br />
There were a total of eight incidences<br />
of alleged discrimination reported in<br />
2011 (four of which involved EEOC<br />
complaints, while the others were through<br />
our Ethics Hotline). Regarding each<br />
of these allegations that has not been<br />
resolved, we are defending our actions<br />
through due process.<br />
Louis A. Raspino Michael L. Underwood Joseph C. Winkler<br />
GOVERNANCE<br />
Since 2007, the company has continued<br />
to contest allegations that it engaged<br />
in unfair labor practices in connection<br />
with the handling of a lockout of its<br />
employees at its Painted Post, N.Y., facility<br />
after a strike. See the company’s periodic<br />
filings with the Securities and Exchange<br />
Commission for further discussion.<br />
Our Whistleblower Policy, available<br />
at www.dresser-rand.com/corpgov/<br />
whistleblower.php, protects employees<br />
against retaliation.<br />
HUMAN RIGHTS<br />
The diversity of our employees is a<br />
tremendous asset. We provide equal<br />
opportunity in all aspects of employment<br />
and will not tolerate discrimination or<br />
harassment of any kind. Derogatory<br />
comments based on racial or ethnic<br />
characteristics, unwelcome sexual<br />
advances and similar behavior are<br />
prohibited. Employees receive annual<br />
training on our anti-harassment policy.<br />
In addition to the direction they receive<br />
in the Code of Conduct, their actions<br />
are guided by our policies on equal<br />
employment opportunities, harassment,<br />
workplace violence prevention, and<br />
retaliation. We do not face issues of<br />
child or forced labor. <strong>Dresser</strong>-<strong>Rand</strong><br />
supports the Universal Declaration of<br />
Human Rights adopted by the United<br />
Nations in 1948.<br />
ADVISORY DIRECTOR<br />
Joseba Grajales
LOBBYING AND POLITICAL<br />
CONTRIBUTIONS<br />
Our limited lobbying activities are<br />
used to support sales and community<br />
relations in the U.S. Total expenditures<br />
in 2011 were less than $200,000 with<br />
$100,000 going to the Coalition to<br />
Advance Renewable Energy through<br />
Bulk Storage, an association promoting<br />
compressed air energy storage (CAES)<br />
solutions before Congress. In addition,<br />
during 2011 <strong>Dresser</strong>-<strong>Rand</strong> was a member<br />
of the U.S. Chamber of Commerce,<br />
which is the world’s largest business<br />
federation, representing the interests<br />
of more than three million businesses,<br />
as well as state and local chambers and<br />
industry associations. <strong>Dresser</strong>-<strong>Rand</strong> has<br />
not made political contributions and<br />
does not currently have a political action<br />
committee. However, certain management<br />
members make political contributions.<br />
MARKETING COMMUNICATIONS<br />
All marketing materials are reviewed<br />
internally to ensure they adhere to relevant<br />
laws, standards and internal guidelines,<br />
and to ensure they do not infringe on<br />
any third-party trademarks or copyrights.<br />
We have not been subject to any fines<br />
in 2011 for noncompliance with laws<br />
concerning the marketing of our products<br />
and services.<br />
The company has a number of policies<br />
that promote the adherence to laws<br />
related to marketing communications,<br />
such as advertising, promotion and<br />
sponsorship. Among these are our<br />
Code of Conduct, our Media Contact<br />
and Communications Policy, and<br />
our Policy on Fair Disclosure. Any<br />
information presented on our website,<br />
or set forth in advertisements and product<br />
literature is prepared and reviewed<br />
by subject matter experts, reviewed<br />
by our Director, Market Services, and<br />
finally reviewed by the company’s<br />
Disclosure Committee, or subcommittees<br />
thereof, prior to being distributed.<br />
Moreover, all press releases and articles<br />
intended for public distribution are<br />
approved by the company’s Disclosure<br />
Committee, or subcommittees thereof,<br />
prior to publication. This process is<br />
36 DRESSER-RAND<br />
undertaken to ensure the accuracy of<br />
the information being disseminated,<br />
and in-house counsel also reviews the<br />
materials for legal compliance.<br />
COMPLIANCE<br />
It is <strong>Dresser</strong>-<strong>Rand</strong>’s goal to periodically<br />
train all of its employees in the Code<br />
of Conduct, the global anticorruption<br />
policy and other significant company<br />
policies. During 2011, the company<br />
was not the subject of any legal actions<br />
alleging anticompetitive behavior, and no<br />
significant fines or sanctions were assessed<br />
against or paid by the company in 2011<br />
for noncompliance with laws<br />
and regulations.<br />
ABOUT THIS REPORT<br />
This is our third Sustainability Report.<br />
Our goal is to provide a balanced view<br />
of the key issues we face and outline<br />
the major achievements we have made<br />
that affect <strong>Dresser</strong>-<strong>Rand</strong> stakeholders<br />
across environmental, social and<br />
governance areas.<br />
SCOPE<br />
This report, published in June 2012,<br />
covers information across our global<br />
operations for the year ended December<br />
31, 2011, unless otherwise noted. We<br />
include information from previous years<br />
where it is appropriate to provide context.<br />
<strong>Dresser</strong>-<strong>Rand</strong> is reporting on the<br />
operations for which it has operational<br />
control, including as applicable, all<br />
business units, joint ventures and facilities<br />
owned or under lease (for example, office<br />
and vehicle leases). For acquisitions, we<br />
report information commencing from<br />
the date the transaction is completed.<br />
Currency is reported in U.S. dollars.<br />
HISTORY OF SUSTAINABILITY<br />
Sustainability is not a new concept.<br />
<strong>Dresser</strong>-<strong>Rand</strong> and its legacy companies<br />
have been providing energy-efficient<br />
solutions to clients and supporting<br />
communities for many years. This report<br />
represents a snapshot of our progress to<br />
date, and expands upon our capacity to<br />
measure and document our progress with<br />
regard to corporate responsibility. Our<br />
Sustainability Council, comprised of a<br />
passionate, cross-functional group<br />
of senior executives, is guiding our<br />
evolution as we implement initiatives<br />
to drive us toward improved performance.<br />
We believe we are making good progress<br />
and look forward to regularly reporting<br />
on this progress.<br />
REPORT CONTENT<br />
In determining the scope of this report,<br />
we looked at the best practices in<br />
reporting. We are pleased to be reporting<br />
at level B, according to the Global<br />
Reporting Initiative G3 Guidelines<br />
(www.globalreporting.org). Responses<br />
used data that were available to<br />
<strong>Dresser</strong>-<strong>Rand</strong>, and recognized standards<br />
(e.g., the Greenhouse Gas or GHG<br />
Protocol) were used to calculate the<br />
indicators. To determine the information<br />
material to our performance, we also<br />
reviewed a variety of resources, including:<br />
• Corporate plans, strategies, policies,<br />
and initiatives<br />
• Input from our Board of Directors<br />
• Client feedback<br />
• Stockholder dialogue and financial<br />
analyst input<br />
• Employee and community input<br />
• Media coverage<br />
• Industry benchmarking<br />
• Issues ranking from the Sustainability<br />
Council<br />
REPORTING GOALS<br />
Our goal is to engage our stakeholders<br />
and solicit their views on this report’s<br />
coverage and transparency. We<br />
will use their input to improve our<br />
communications going forward.<br />
Environmental data has been collected<br />
and verified by a leading energy consulting<br />
and management company. (At this<br />
time, we have not undertaken additional<br />
third-party assurance.)<br />
FEEDBACK<br />
We welcome feedback about this<br />
report. If you have any questions<br />
or comments, please email:<br />
sustainability@dresser-rand.com
GOVERNANCE<br />
CORPORATE SUSTAINABILITY REPORT 37
GLOBAL REPORTING INITIATIVE (GRI) INDEX<br />
PROFILE GRI# DESCRIPTION PAGE<br />
STANDARD DISCLOSURES: PROFILE<br />
Strategy & Analysis 1.1 CEO Letter to Stakeholders<br />
Statement from the most senior decision-maker of the organization (e.g., CEO, chair,<br />
or equivalent senior position) about the relevance of sustainability to the organization<br />
and its strategy.<br />
38 DRESSER-RAND<br />
1.2 Key impacts, risks and opportunities<br />
Description of key impacts, risks, and opportunities. The reporting organization<br />
should provide two concise narrative sections on key impacts, risks, and opportunities.<br />
Section One should focus on the organization’s key impacts on sustainability<br />
and effects on stakeholders, including rights as defined by national laws and relevant<br />
internationally agreed standards. Section Two should focus on the impact of sustainability<br />
trends, risks, and opportunities on the long-term prospects and financial<br />
performance of the organization.<br />
ORGANIZATIONAL PROFILE<br />
2.1 Name of the organization IFC<br />
2.2 Primary brands, products and/or services IFC<br />
2.3 Operational structure of the organization IFC, 33<br />
2.4 Headquarters location IFC<br />
2.5 Countries in which the company has operations IFC<br />
2.6 Nature of ownership and legal form IFC<br />
2.7 Markets served IFC<br />
2.8 Scale of the company IFC<br />
2.9 Significant size, structure or ownership changes in 2011 (N/A) 2<br />
2.10<br />
REPORT PARAMETERS<br />
Awards received in 2011 25<br />
Report Profile 3.1 Reporting period 36<br />
3.2 Date of most recent previous report 36<br />
3.3 Reporting cycle 36<br />
3.4 Contact point for questions about the report 36<br />
Report Scope<br />
3.5 Process for defining report content 36<br />
& Boundary<br />
3.6 Boundary of the report 36<br />
3.7 State any specific limitations on the scope or boundary of the report 36<br />
3.8 Reporting on other corporate entities or subsidiaries 36<br />
3.9 Data measurement techniques and the basis of calculations 36<br />
3.10 Re-statements of information 36<br />
3.11 Significant changes from previous reporting periods NA<br />
GRI Content Index 3.12 GRI Index 38, 39<br />
Assurance 3.13 Accuracy and completeness of report 36<br />
GOVERNANCE, COMMITMENTS & ENGAGEMENT<br />
Governance 4.1 Governance structure of the organization 34<br />
4.2 Indicate whether the Chair of the Board is also the CEO 34<br />
4.3 Independence of the Board 34<br />
4.4 Shareholder and employee feedback mechanisms 35<br />
4.5 Linkage between performance and executive compensation 34<br />
4.6 Conflicts of interest 35<br />
4.7 Qualifications of the Board 34<br />
4.8 Relevant corporate mission, values, codes of conduct, and principles IFC, 3, 4, 25, 26<br />
4.9 Board oversight with regards to risks, opportunities and international standards 34<br />
4.10 Processes for evaluating the Board’s own performance 34<br />
Commitments to<br />
4.11 How the precautionary principle is addressed Online<br />
External Initiatives<br />
4.12 Externally developed charters, principles or other initiatives 35<br />
4.13 Memberships 6, 36<br />
2<br />
4-7
PROFILE GRI# DESCRIPTION PAGE<br />
GOVERNANCE, COMMITMENTS & ENGAGEMENT (CONT.)<br />
Stakeholder<br />
Engagement<br />
4.14 Stakeholder groups engaged by the organization 6, 7<br />
4.15 Basis for identification and selection of stakeholders with whom to engage 6<br />
4.16 Approaches to stakeholder engagement 6<br />
4.17 Key topics raised through stakeholder engagement 6, 7<br />
STANDARD DISCLOSURES: PERFORMANCE INDICATORS<br />
Environmental DMA Disclosure of management approach Online<br />
Energy EN3 Direct energy consumption by primary source Online<br />
EN4 Indirect energy comsumption by primary source Online<br />
EN5 Energy saved due to conservation and efficiency improvements 16, 17<br />
GOVERNANCE<br />
EN6 Energy-efficient or renewable energy-based products, and subsequent energy savings 13, 15, 30, 31<br />
EN16 Total direct and indirect GHG emissions by weight Online<br />
Emissions, Effluents & Waste EN18 Initiatives to reduce greenhouse gas emissions, and reductions achieved 16, 17<br />
EN23 Total number and volume of significant spills Online<br />
Compliance EN28 Fines for non-compliance with environmental regulations 36<br />
Human Rights DMA Disclosure of management approach Online<br />
Investment & Procurement HR4 Total number of incidents of discrimination, and actions taken 35<br />
Labor Practices and Decent Work DMA Disclosure of management approach Online<br />
Employment LA1 Workforce by employment type, employment contract and region IFC<br />
Labor & Management Relations LA4 Percentage of employees covered by collective bargaining agreements 20<br />
Occupational Health & Safety LA6 Workforce represented in health and safety committees Online<br />
Training & Education LA10 Average hours of training per employee by employee category 23<br />
Society DMA Disclosure of management approach Online<br />
Corruption SO3 Percentage of employees trained in anti-corruption policies 36<br />
Public Policy<br />
SO5 Public policy positions and lobbying 36<br />
SO6 Political contributions 36<br />
Anti-Competitive Behavior SO7 Legal actions for anti-competitive behavior, anti-trust and monopoly practices 36<br />
Compliance SO8 Significant fines and sanctions 36<br />
Product Responsibility DMA Disclosure of management approach Online<br />
Customer Health & Safety PR2 Non-compliance with product health and safety regulations 36<br />
Marketing Communications PR6 Programs related to marketing communications 36<br />
PR7 Number of non-compliance marketing incidents 36<br />
Compliance PR9 Significant fines for products and services non-compliance 36<br />
Economic DMA Disclosure of management approach Online<br />
Economic Performance EC1 Direct economic value generated and distributed IFC<br />
EC2 Risks and opportunities due to climate change 12<br />
EC3 Defined benefit plan obligations IFC<br />
Market Presence<br />
EC6 Locally-based suppliers 29<br />
EC7 Local hiring in the community 20, 21<br />
CORPORATE SUSTAINABILITY REPORT 38
www.dresser-rand.com<br />
© 2012 dresser-rand. printed in the U.s.a.