Successfully recruiting, developing and retaining talented employees from diverse backgrounds is key to achieving our business objectives. We offer rewarding careers as part of a team that, every day and everywhere, embraces our core values of Safety, Respect, Integrity, Excellence and Commitment.
In 2016, Freeport-McMoRan experienced a total employee turnover rate of ten percent, relatively unchanged from recent years. Turnover by operating region varied as follows: North America (18 percent), South America (5 percent), Indonesia (3 percent), Africa (12 percent), and Europe/Asia (11 percent). Total turnover among male employees was 9 percent, while total turnover among female employees was 17 percent. Employees over age 50 represented the age group with the highest turnover at 19 percent.
Safety is integral to all Freeport-McMoRan operations; the responsibility of every employee is managed by a formal structure starting with our Safety and Health Policy. Our philosophy of Safe Production is demonstrated by the integration of health and safety practices in all aspects of our operational activities. Our Board of Directors requires comprehensive audits to assure the safety management system is effective and resources are applied to achieve the company’s policy objectives.
Our Health and Safety Management System is a framework from which we manage risks and compliance obligations. As of November 2016, the system is certified at the corporate-level in accordance with the internationally recognized OHSAS 18001 standard. The process for attaining our corporate group certification in 2016 included internal audits at 17 operations with six operations receiving independent, third-party audits. Surveillance audits will continue to be conducted annually by the internal audit team and independent audits will be conducted at select operations on a rotating basis.
No distinction is drawn between contractors and our own employees with regard to health and safety performance and reporting. The Freeport-McMoRan Contractor Safety Manual defines the minimum expectations and requirements for contractors working at our operations. Site-specific health and safety training is conducted with each contractor and tailored to their work location, task-specific hazard identification and critical control implementation.
We measure progress toward achieving our objective against regularly established benchmarks, including measuring company-wide TRIR across our businesses. Our TRIR (including contractors) was 0.64 per 200,000 man-hours worked in 2016, exceeding (missing) our target of 0.56. We worked 153.1 million hours in 2016 compared to 200.5 million hours in the prior year, and we recorded a total of 492 reportable injuries in 2016 compared to 564 in 2015.
Freeport-McMoRan operations maintain comprehensive occupational health programs to assess the risk of exposure to occupational health hazards and identify controls for those risks, and we have expanded our corporate industrial hygiene team to provide better strategic guidance and support. Our Field Guide for Occupational Health and Industrial Hygiene defines occupational exposure limits, standards and practices that apply globally.
Freeport-McMoRan continued the expansion of medical monitoring procedures in 2016, to ensure that employees are fit for duty, and to look for early indications of occupational health impairment and to provide opportunities for early intervention. We continued to expand our fatality prevention program to include exposures to carcinogens and other significant health hazards in addition to traditional safety hazards. This is expected to lead to a stronger focus on critical controls related to dust controls, ventilation systems, and chemical process monitoring.
There were 26 occupational illness cases reported at our operations in 2016. Heat stress continues to be the largest portion of these incidents (10 cases), but we experienced less than half of the number in 2015. Our efforts to prepare workers to anticipate and proactively manage the effects of heat exposure are assertive and ongoing. Hearing loss was the second highest number (6 cases). Respiratory conditions were the third category (5 cases), the lowest number since 2012; all five cases were minor, short-term cases.
Emergency preparedness and response is a fundamental component of all Freeport-McMoRan activities. Through our Crisis Management Program and Sustainable Development Risk Register program, operations maintain plans, which incorporate procedures for preventing and responding to incidents that could cause severe or catastrophic harm to human health and the environment. We coordinate with local governments to prepare a range of emergency response scenarios and conduct mock drills to plan for the protection of our workers, the community and the environment.
Hiring talent from regions where we operate incorporates local cultures and knowledge into our business systems while supporting local economic development. For example, at our largest operation, PTFI, located in the remote province of Papua, Indonesia, we prioritize the hiring of indigenous Papuans. Approximately 99 percent of PTFI employees are Indonesian, 36 percent of whom are indigenous Papuans (up from 32 percent five years prior).
Our regional technical training programs prepare community members for careers in mining, even though trainees have no obligation to join our company. The Nemangkawi Mining Institute in Papua, Indonesia has placed nearly 2,700 apprentices into permanent employee and contractor positions at PTFI, 90 percent of whom are indigenous Papuans. As PTFI prepares to transition from open-pit mining to fully underground mining, Nemangkawi is retraining the surface mine workforce for new opportunities, including reclamation projects.
Our training partnership program with the San Carlos Apache Tribe in Arizona is designed to increase the skills and employability of Apache students who generally live in communities with high unemployment rates. Students can become certified in skills ranging from heavy equipment operations to industrial maintenance. Through 2016, over 870 students have entered the program and approximately 50 percent have graduated. Many graduates have found employment at Freeport-McMoRan as well as with companies in other sectors. We proudly employ over 300 Native Americans, an increase of over 50 percent from five years prior.
We operate in regions of varying ethnic, religious and cultural backgrounds and are generally the largest employer in local communities. The diverse backgrounds and perspectives within our workforce are an asset. We prohibit discrimination and harassment, and our Principles of Business Conduct and Human Rights Policy require that all employees treat everyone in and around our operations with dignity and respect.
Seeking ways to recruit and foster career development for women in our company continues to be important, as women traditionally have been underrepresented in the mining sector. Women serve in key management roles within our organization, including our Chief Financial Officer and two members of our Board of Directors while an additional 300 women hold manager-level or higher positions. The percentage of women represented in our company varies across geographies, from a high of 17 percent in North America to a low of five percent in Indonesia.
Freeport-McMoRan defines discrimination as an act or practice of treating a person differently than others, causing a negative impact, based on that person belonging to a class or category rather than treating the person fairly on the basis of individual merit. Discrimination can take a number of forms and can be based on various categories, such as disability, use of genetic information, age, race, ethnicity, religion and gender. In 2016, of the reports made through the Freeport-McMoRan Compliance Line, 29 included allegations of some form of discriminatory or harassing conduct. Two of these reports included allegations that were substantiated, and disciplinary and remedial actions were taken.
As of December 31, 2016, our workforce consisted of approximately 30,000 employees and 29,100 contractors. We work cooperatively with 12 unions in seven locations worldwide. Approximately 47 percent of our employee population is covered by collective bargaining agreements and 34 percent of our employees are covered by agreements that will be renegotiated during 2017, including the collective labor agreement at PTFI. During 2016, we reached a new four-year Collective Bargaining Agreement at our El Abra operation in Chile. Our policy is to ensure fair treatment and work conditions for all employees, including rights to freedom of association and collective bargaining. Employees have the right to exercise freedom of association at all of our operations.
Due to market conditions, we revised our production plans to adjust for the lower commodity prices beginning in 2015. These revisions continued into 2016, with layoffs affecting both our mining and oil and gas operations in North America. We adopted a multi-stage process for determining layoffs at our mining operations, including these elements:
- Eligible employees were offered the opportunity to participate in early retirement programs.
- Employees at specific operations were offered a voluntary resignation package.
- Employees were encouraged to transfer to other locations to fill openings they were qualified to perform, and special relocation assistance was provided in these situations.
- Employees who were laid off were offered severance packages and outplacement services, including career coaching and resume-writing assistance.
Subject to certain statutory requirements, Freeport-McMoRan has retained the authority and freedom to suspend, limit, curtail or restructure its operations, as it deems appropriate, to respond to varying economic conditions. When such decisions are made, they are communicated to employees at the earliest appropriate time along with information on whose employment may be affected by the change in operations and the benefits that are available should reductions in employment occur. The company's established policies and collective bargaining agreements set forth the processes used for determining who may be affected by any reductions in workforce associated with such operational changes.