Tullow Oil plc 2011/2012 Corporate Responsibility Report - The Group

More informationPageGovernance 56Local content 741OVERVIEWand society can only be seen in hindsight, and takes many years,we can demonstrate the tangible benefits we are delivering andthe progress we are making each year through our corporateresponsibility initiatives.How can Tullow’s presence benefit the lives of local people?We have to respect the traditions, culture and way of life of hostcountries. It is not within our remit to change things that areoften based on centuries of belief. We must also abide by themandate of elected local and national governments. What Tullowcan do, however, is help build capacity to support economicgrowth and through this influence social progress. We canundertake projects and initiatives to change people’scircumstances and outcomes by facilitating education, creatingemployment, building infrastructure, developing local businessesand fostering water and food security. We have plenty ofopportunities across our business to make a difference inhost countries, particularly for future generations.How can we change perceptions of the oil industry?The oil industry does not have a good image. As our Chairmanhas outlined it is perceived as negative for the environment andhistorically has distorted local economies in developing regions.Tullow has a unique opportunity to address these perceptions.We are a young company and are in the process of developingtwo new oil basins in Africa. This means that while we havesome significant strategic and operational challenges, we don’tsuffer from any major legacy issues. This gives us a goodstarting point. We believe that to change perceptions we musttake a long-term view and plan for success. This affectseverything from stakeholder management to how we drill ourfirst well or when we commence supplier development. The netresult is that we invest up front to ensure that our activities areundertaken with due care and attention. We are also a learningorganisation and continue to grow our knowledge andunderstanding of our impacts and how to optimise local contentopportunities and skills transfer.How do we manage bribery and corruption risk?We manage bribery and corruption risk in a number of ways.We launched a new Code of Business Conduct in response toboth a tightening of the regulatory environment and an increasein the ethical risks we are facing across the Group. We havedeveloped detailed guidance on our expectations of thebehaviour, in any circumstances, of our employees, contractorsand suppliers and have supported this with policies, systemsand training. A Compliance Committee has been formed toguide and challenge the Group Compliance function, andregular compliance presentations are made to the Executiveand the Board. In addition, we have become members ofTransparency International’s Corporate Supporters Forum andwe are a supporter of the Extractive Industries TransparencyInitiative (EITI). Compliance adds value by ensuring that wemeet the requirements of applicable laws, consistently live upto our ethical responsibilities and protect our good reputation.How did we defend our good name in the face of serious butfalse allegations of bribery?We faced serious allegations in Uganda in 2010/2011 that Tullowemployees had bribed senior government ministers. These werebased on forged documents and we aggressively defended ourgood name. We worked closely with the UK Serious Fraud Office,the Metropolitan Police, the Ugandan Police and other relatedauthorities. We also published detailed information presentedto a Ugandan Parliamentary Ad Hoc Committee to demonstrateour unqualified commitment to being transparent and toupholding high ethical standards. To mitigate any potentialdamage to Tullow’s and the wider industry’s reputation, we haveundertaken a reputation management programme in Ugandaacross all our stakeholder groups. During the year, wecontinued to negotiate with the Government to progress thecompletion of the farm-down, which occurred in February 2012.We are committed to the success of Uganda and we havealready contributed to social enterprise development, localemployment, local supplier and institutional development andbuilding capacity for its nascent oil industry. We have beenawarded an East African CSR award for our local contentapproach in Uganda.ENSURING WE’RE A RESPONSIBLE BUSINESSIn 2011, we have strengthened our operationalorganisation through a new regional businessstructure. In this year’s special feature we havecreated individual regional profiles that give anoverview of the region and its corporateresponsibility performance and initiatives.West & North Africa Page 24South & East Africa Page 32Europe, South America & Asia Page 4211www.tullowoil.com