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SUSTAINABILITY REPORTEMPLOYEE PARTICIPATION IN CORPORATE MANAGEMENT"The implementation of commitments is the subjectof collective negotiations with the Company's trade unionsand is fixed in the Agreement between the Company andthe trade union, as well as in local regulatory documents."LUKOIL Social Code, Part IOpinions of employees on issues directly concerning their interestsand rights, as well as on decisions made by the Company, are takeninto account in the course of constant negotiations and consultationsthrough the representative body of Company employees, theInternational Association of LUKOIL Trade Union Organisations(MOPO). Cooperation with the Association has resulted in signing ofthe Three-year Agreement between the Employer and the Trade UnionAssociation. The Agreement serves as a foundation for collective bargainingagreements between the management of LUKOIL Grouporganisations and their trade union committees.The Agreement is a legal document setting general principles for regulationof social and labour relations between employees and theemployer based on their mutual interests. The Agreement containsbasic commitments that are subsequently specified in collective bargainingagreements depending on the financial capabilities of LUKOILGroup organisations. Such an approach allows for recognition of specificregional and industrial factors while achieving a balance betweenan organisation's or enterprise's normal functioning and social protectionof its employees beyond their entitlements under current laws.During the three-year period of operation of the Agreement it may beamended if necessary because of changes in laws, in the financial andeconomic results of the Company or in the general situation in theindustry.Key principles of the Agreement:The employer and employees believe that collective bargainingagreements should be concluded at all organisations controlled bythe Company.40