Cyber risks in the aluminium industry

In the previous publication we commented on how c-suite executives have become increasingly concerned about cyber attacks due to the increasing use of remote workers.

Whilst most industries view cyber risk through the lens of data breach, the aluminium industry are also at risk from this type of cyber-attack with the added danger of attacks causing damage to physical systems.

Whilst we may not know the real number of cyber property damage events due to the lack of regulation around reporting of such incidents, several major incidents demonstrate the capabilities of attackers.

The 2010 Stuxnet attack on the centrifuges of Iran’s uranium enrichment facility demonstrates the threat from what is believed to be nation state actors and the potential physical damage caused by a cyber-attack.

In December 2014, the German Government’s Federal Office for Information Security released their annual findings report[i]. One particularly worrying incident they referenced specifically was a malicious actor infiltrating a German Steel mill. Once the attackers had successfully navigated their way from the corporate to the plant network, they altered critical process components resulting in a loss of control and eventual massive physical damage to the individual control system components as well.

February 2020 saw Kobe Steel announce that their systems had been penetrated by a nation state actor in both 2015 and 2016, with subsequent malware left on their systems[ii].

The most relevant example that we see in the aluminium sector, was the 2019 ransomware attack on Norsk Hydro – demonstrating the common motivator for attacks in 2019/20 of financial gain.

On the 19th March 2019, 22,000 computers were hit across 170 different sites in 40 different countries. The entire workforce – 35,000 people – had to resort to pen and paper. Production lines shaping molten metal were switched to manual functions, in some cases long-retired workers came back in to help colleagues run things “the old fashioned way”. In many cases though, production lines simply had to stop. The company [iii]confirmed the cost of the incident at between £45M and £65M, with a cyber insurance policy in place to transfer aspects of the cost.

While many companies may have considered their exposure to a cyber event, they may not have considered purchasing a standalone cyber insurance policy and will not have looked at the impact of a cyber event on their wider insurance portfolio.

A traditional cyber policy, would likely exclude coverage for ensuing property damage and increasingly property policies are now excluding cyber events from their coverages. This is especially relevant where a cyber event can lead to a stopped production line and subsequent physical damage to equipment from rapidly hardening liquid metals.

Following the major NotPetya and WannaCry ransomware incidents of 2016 and 2017, where global property insurers suffered nearly USD3bn of losses[iv] from these cyber-events, global regulators and reinsurers have insisted that all markets should be taking steps to reduce the unintended exposures caused by non-affirmative or ‘silent’ cyber coverage in their policies.

Lloyd’s of London has issued its directive to make sure all policies provide cyber on an affirmative or non-affirmative basis, with no ambiguity for all first party property damage policies incepting on or after January 1st 2020. This has been echoed with other global insurers, such as AIG group and AXA XL, following suit.[v]

With the changes in the global reinsurance market, more clients should expect to see their insurance portfolio impacted by cyber exclusions. This represents a challenge to companies to carry out a detailed assessment of their risks to accurately identify and manage non-affirmative cyber risk. It is vital firms receive advice on the risk and insurance implications from their broker. Some lines of business have a greater exposure to silent cyber than others, whilst other lines are lower in their non-affirmative risk. As well as the more well known CL380 exclusion (prevalent amongst energy and marine polices), there are a number of others across various lines of cover which relate to cyber impacting other policies.

The cyber market has demonstrated its ability to pay complex cyber losses and in 2020 a number of leading markets confirmed they are able to provide cover for subsequent physical damage and debris removal as an extension to their cyber solutions. Limits available range from £50M-£150M depending on the insurer and enable companies to transfer their real concerns to the insurance market.

Gallagher is here as an insurance broker to advise companies on the way to map their exposures and transfer their risk using both captives and direct insurance.

The Major Risks Practice of Gallagher are a Sponsor at ALFED. For more information, please contact Bill Makin, Executive Director: Bill_Makin@ajg.com.

This information is not intended to constitute any form of opinion or specific guidance and recipients should not infer any opinion or specific guidance from its content. Recipients should not rely exclusively on the information contained in the bulletin and should make decisions based on a full consideration of all available information. We make no warranties, express or implied, as to the accuracy, reliability or correctness of the information provided. We and our officers, employees or agents shall not be responsible for any loss whatsoever arising from the recipient’s reliance upon any information we provide and exclude liability for the statistical content to fullest extent permitted by law.

Arthur J. Gallagher Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Registered Office: Spectrum Building, 7th Floor, 55, Blythswood Street, Glasgow, G2 7AT. Registered in Scotland. Company Number: SC108909

[i] bbc.co.uk/news/technology-30575104

[ii] https://www.bleepingcomputer.com/news/security/japanese-defense-contractors-kobe-steel-pasco-disclose-breaches/

[iii] https://www.hydro.com/en/media/on-the-agenda/cyber-attack/

[iv] https://www.bloomberg.com/news/features/2019-12-03/merck-cyberattack-s-1-3-billion-question-was-it-an-act-of-war

[v] https://www.lmalloyds.com/LMA/News/LMA_bulletins/LMA_Bulletin_2013/LMA19-031-PD.aspx

How ALFED can help you kick-start a young person’s career

The government recently launched its Kickstart scheme to create high-quality training placements for unemployed people between the ages of 16 and 24. Our training and education manager, Kathy Romback, explains more about this landmark initiative.

“The first and most important thing is that ALFED is here and ready to take all the stress and strain out of Kickstart for the benefit of its members and their trainees,” she says.

“Like any government-led programme, it involves a fair amount of form-filling, but we’ll make the process of identifying, interviewing and recruiting the right talent as painless as possible.

“Each job placement must last six months, which will be fully funded by the government to cover the relevant national minimum wage for 25 hours a week, plus the associated National Insurance contributions, and the employer minimum contributions for automatic enrolment.”

However, Kathy stresses that the government has imposed restrictions on employers who participate in the scheme to ensure all parties benefit.

“These placements must be new roles. Trainees can not be taken on to replace existing or planned vacancies, and their recruitment must not cause existing employees or contractors to lose their job, or to have their hours of employment reduced.How ALFED can help you kick-start a young person's career

“Companies also have to explain how they will help their trainee(s) develop skills and workplace experience, support them in their search for long-term work, assist them with creating a CV and prepare them for interviews.

“When the chancellor, Rishi Sunak, announced Kickstart, he was very clear that it was a partnership between the government and individual companies to provide training opportunities to young people and offer them hope of a brighter future.

“The government will also pay £1,500 to companies for each placement; to cover the scheme’s  administration and set-up costs and the use of company resources on the trainee, right down to the expense of their work-clothes and other equipment.”

Inevitably, the scheme is targeted at major companies and all individual employers must be able to offer at least 30 placements.

However, the rules allow so-called ‘gateway’ organisations to bundle up applications from multiple small employers until that threshold is crossed, and to then present them for processing.

“The overwhelming majority of our members are SMEs, who might only have one placement to offer, but ALFED has been accepted as an official gateway to Kickstart,” says Kathy.

“The first step is for member companies to study the government site which explains how Kickstart works, so they can prepare a detailed application: https://www.gov.uk/government/collections/kickstart-scheme

”Anyone looking to enter Kickstart can then contact me for details, on 07899-924315 or via k_romback@alfed.org.uk and I’ll be pleased to guide them – and hopefully to progress their application.

“As each one is accepted, a specialist adviser at the relevant Job Centre will identify potential candidates and invite the employer in to interview the individual and select the right person for their particular requirements.”

The Consequences of Mining Go Beyond Climate Concerns

As vital precious metals and natural resources run low, or prove increasingly difficult to mine, organisations are having to explore alternative methods to satisfy global demand. In many cases, a renewed focus on secondary raw materials is the answer. Essentially, stepping up the use of recycled raw materials in all areas of industry, explains Ian Sheppard, Managing Director at EMR.EMR - Ian_Sheppard

Mining operations are becoming more challenging and riskier every year as new territories are explored and operations go deeper or farther than before. The environmental damage, above or below surface, comes with a price that can’t always be reversed, which is why recycling raw materials is always the preferred option.

Technology to fully and effectively reuse existing materials is being developed. Steel recycling, for example, is a green, feasible and easily accessible alternative to continued mining and destruction of our environments. It produces metals that are generally to the same standard as newly mined product.

Recently in Australia, we have seen the impact that mining can have on sacred indigenous sites like that at the Juukan Gorge. Here, the mining operator unintentionally destroyed parts of the site during blasting. As the need for metal mining continues, accidental damage such as that at Juukan Gorge may be repeated.

However, we don’t need to take these risks, with our health, our environment or our cultural sites. Steel recycling technology has developed rapidly over the last several decades. The global metal recycling market is forecast to grow at a rate of 7.0 percent and reach $86 billion US Dollars by 2027.

Almost every country in the world is working towards specific commitments to reducing waste and protecting the environment, as laid out in the Paris Climate Agreement.

For the UK, metal recycling contributes more than any sector to the country’s ‘end of life’ material; recovery carbon impact targets. It’s a strong area of the economy that protects the environment and saves energy and waste. The industry also employs a large workforce, while EU figures indicate that using recycled raw materials, including metals, cuts CO2 emissions by some 200 million tonnes every year.

Sustainability is at the core of everything we do at EMR. Discover more about Our Decade of Action commitment that aims to protect our natural resources and much more besides: https://uk.emrgroup.com/how-we-operate/sustainability/our-decade-of-action

Streamlined Energy and Carbon Reporting (SECR) – don’t miss the deadline

With the disruption caused by COVID-19, it is easy for businesses to overlook compliance issues – such as the Streamlined Energy and Carbon Reporting (SECR) deadline.

SECR came into effect in April 2019 with the aim of simplifying carbon and energy reporting and to promote energy efficiency.

Whether your business was one of 11,900 UK companies involved in the SECR process in its first year or your entering the scheme for the first time in 2021, it is important that you have all the information you need.

Whilst still just over three months away, SECR involves a lot of data and putting that together in one report can be time-consuming.

As an external energy management consultancy with an expertise in compliance and energy-related legislation, we can collate, analyse and present this sustainability data for you.

Customers of ours have found the Energy Management portal, EM-Powered, to be an invaluable resource in collating and categorising energy consumption data.

Sustainability is dominating the energy agenda for companies at the moment, and will do for a long time ahead as the UK strives towards its 2030 carbon-zero target.

Companies are increasingly being judged by the public on their attempts to become more ‘green’ and completing SECR helps to promote positive achievements in this area.

What is the criteria?

If your business meets two of the three criteria listed below in the financial year being reported on, you will need to comply.

  • More than 250 employees
  • £36m or more turnover
  • Balance sheet total of more than £18m

Still unsure? Find out if you are required to comply by using our SECR checker tool.

At Energy Management, we have in-house CIBSE qualified lead assessors who will be more than happy to guide you through the compliancy process.

If you would like any advice or help in making sure you are SECR compliant, please get in touch on 01225-867722.

Transition of Rebalancing Measures In Response To Us Section 232 Tariffs On Steel, Aluminium, And Derivatives

As you may be aware, in response to US Section 232 tariffs on steel, aluminium and derivatives, the UK has been applying rebalancing measures on a variety of products as part of the EU’s co-ordinated response.

I am writing to inform you of the UK’s intention to introduce legislation in order to maintain the application of these rebalancing measures from 1 January 2021, once the Transition Period has concluded. The UK will also consult on the transitioned rebalancing measures to ensure they are in the best interests of the UK economy and steel and aluminium industry. We have published further details about our approach on GOV.UK, which can be found here.

It is imperative that the UK transitions these rebalancing measures to demonstrate that we will defend UK industry and uphold the rules-based system that is fundamental to supporting international trade. Our preference remains for the full removal of US tariffs, in which case there will no longer be a need to apply these rebalancing measures. We are pressing the US for an urgent resolution to these tariffs as part of our ongoing trade discussions, as they are harmful to industry on both sides of the Atlantic.  We are maintaining the full list to maintain maximum pressure on the US to secure the removal of all these tariffs, but we will be consulting on the list and reserve the right to amend the list should we choose to at a later date.

I would like to reassure you that our key priority is to defend British interests across all sectors of the economy.

We will be holding a stakeholder teleconference on Thursday 10 Dec at 9:30am to discuss this announcement further. Please see below the details for joining:

Direct event online registration: http://emea.directeventreg.com/registration/9574514

Conference ID: 9574514

Any questions in the meantime please get in touch.

Best wishes,

DIT Trade Disputes

REAP partnership to create new supply chain for rare earth magnets

Leading UK metal recycler, EMR, the University of Birmingham Department of Materials and specialist magnet recycler, HyProMag Ltd have announced a new partnership, part funded by Innovate UK, to create a supply chain for the recycling of high-strength rare-earth magnets.

The Rare-Earth Extraction from Audio Products (REAP) project will help the UK to start reducing its reliance on the mining of strategically important virgin materials such as neodymium and dysprosium. The nine month REAP project will focus on magnets found in loudspeakers in audio equipment and vehicles but the project outcomes will have a range of wider applications. This includes in the recycling of cars where rare earth magnets are used in motors for power steering, compressors and increasingly the main drives of electric vehicles.

Rob Chaddock, Strategic Development Manager at EMR, said: “The challenge for our research and development team is that these magnets have been designed to stay in one place as part of a single solid unit. We need to develop clever and cost-effective ways to disassemble these technologies which retains the integrity of the material. Rare-earth magnet extraction requires the sophisticated analytical facilities and academic expertise available from the University of Birmingham, together with the recovery technology and know how developed by HyProMag. When the team has a commercially-viable proof of concept then EMR will put it into action.”

China currently dominates the manufacture of rare earth magnets and the mining of the raw materials that make them. The drive motors for electric vehicles rely on rare earth magnets, so the switch to electric vehicles over the next 15 years means that demand for rare earth magnets will grow hugely and that continued availability is strategically important to the UK. Recycling of rare earth magnets in the UK potentially offers an alternative and secure source of supply.

Rob Chaddock added: “These materials are sourced in parts of the world where the UK doesn’t have control over the source. There’s a resource security reason why we should not let them leak out of Europe. There are also economic and environmental reasons as recovering these materials from end-of-life waste has a lower carbon impact and lower cost than recovering them from the mining source.”

Nick Mann, Operations General Manager at HyProMag added: “With demand for rare earth magnets accelerating, it is imperative that we find viable economic solutions to reclaim end-of-life magnets that are currently lost. Current estimates suggest that the recycling rate of rare earth magnets from end-of-life products stands at below 5 percent. The REAP project is focused on one of the biggest potential sources of those magnets, namely loudspeakers. Innovative processes developed to overcome the challenges around extracting magnets from assemblies are integral to the REAP project, and we are very pleased to be working with EMR and the University of Birmingham to further optimise these processes for audio products.”

For more information on EMR: emrgroup.com

IKON Appoints New General Manager

IKON Aluminium Systems, part of the Allumette group of companies, is pleased to announce the promotion of operations manager, Kim Ellis to the role of general manager.

Kim joined the business five years ago and, in that time, has gained valuable insight working in a number of roles, giving her a unique

IKON Aluminium Systems, part of the Allumette group of companies, is pleased to announce the promotion of operations manager, Kim Ellis to the role of general manager

IKON Aluminium Systems, part of the Allumette group of companies, is pleased to announce the promotion of operations manager, Kim Ellis to the role of general manager

perspective on procurement, planning, production, quality control and the commercial aspects of this fast-moving manufacturer.

In her new role, Kim will draw on her experience as a conduit between shopfloor, office and customer base.  She will oversee daily business activities, manage the team, improve overall business functions and implement strategic development.

John Park-Davies, managing director of IKON said: “Kim is a terrific member of the IKON family, she has a depth of knowledge and understanding of the business that’s second to none.  As GM, Kim will take on the day-to-day responsibilities of IKON and support me in our ambitious development plans.”

IKON Aluminium Systems manufactures a range of fixed aluminium ventilation louvre systems.  All IKON products are designed, extruded, manufactured and coated in the UK.  The louvre systems are extensively tested, with products meeting the requirements for Part K – Protection from falling, collision and impact and PAS 24.  They combine innovative design with high performance, strength, reliability and inherent low maintenance characteristics.

To find out more about IKON and its products, please visit ikonaluminium.com.

Coronavirus updated guidance: Ventilation and air conditioning

HSE has published updated guidance on ventilation and air conditioning during the coronavirus pandemic. 

The law requires employers to ensure an adequate supply of fresh air in the workplace and this has not changed during the pandemic. Good ventilation, together with social distancing, keeping your workplace clean and frequent handwashing, can help reduce the risk of spreading coronavirus.

Our updated guidance will help you identify poorly ventilated areas of your workplace and provides steps you can take to improve ventilation while maintaining a comfortable temperature. It will apply in most workplaces and includes guidance on:

  • balancing ventilation with keeping people warm
  • identifying poorly ventilated areas
  • how to improve ventilation
  • ventilation in vehicles

The new ventilation and air conditioning guidance is part of our advice on making your workplace COVID-secure.

We are very pleased to welcome Voith Turbo into membership of the Aluminium Federation

We are very pleased to welcome Voith Turbo into membership of the Aluminium Federation. The Group Division Voith Turbo is part of the Voith Group and a specialist for intelligent drive technology, systems as well as tailor-made services. With its innovative and smart products, Voith offers highest efficiency and reliability. Customers from highly diverse industries such as oil and gas, energy, mining and mechanical engineering, ship technology, rail and commercial vehicles rely on the advanced technologies and digital applications of Voith.

Find out more: Voith Turbo