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SUSTAINABILITY REPORTcation. LUKOIL employs 446 people with a master's degree and 57with a doctorate. Over 60% of the Company's employees have beenemployed with LUKOIL for at least five years.In the period since the adoption of the LUKOIL Personnel ManagementPolicy in 2003, the validity of the chosen HR approach has been confirmed.The year 2004 marked a new stage in the systematisation of personnelmanagement processes at LUKOIL organisations which includedimproved regulations along with better forms and methods for humanresource management. The functional scheme of personnel managementthat was designed is operating successfully.The Board of the first Russian competition, The Best HumanResources Service 2005, awarded the LUKOIL HR Service the title ofthe Best Russian HR Service 2005 based on the opinions of Russianand international experts and on an analytic study of results in 2004.Our Company was among the pioneers of active involvement in socialissues in Russia through creation of a system for social protection ofemployees. The effectivness of that system is confirmed by the firstplace awarded to LUKOIL in the II National Competition "RussianOrganization of High Social Effectiveness."However, now that social responsibility is becoming an integral part ofbusinesses, a fundamentally different system is required where socialpolicy will serve both as a means for accelerated economic growth andalso as an important factor in social stability. The Company's significantexperience in this area was used as a foundation for key policies anddocuments most of which were developed during the reporting period.Our research and analysis of existing approaches and best practiceshas resulted in the development and adoption in 2002 of a unique corporatedocument, the LUKOIL Social Code. Its purpose is to increasethe effectiveness of corporate social programmes and consolidate themeans and assets (including financial ones) necessary to meet theCompany's goals and objectives.The Social Code is a document setting out the Company's socialresponsibility commitments to all of its stakeholders. These commitmentsare voluntarily accepted by the Company, and most of38