Our Company vision is to generate top quartile returns for shareholders through excellence in socially responsible oil and gas exploration and production
# Social Responsibility Strategy
Our 2020 Social Responsibility Strategy supports delivery of the Company’s vision and strategic objectives by promoting a stable operating environment in PNG, positioning Oil Search as a leader in socially responsible oil and gas exploration and production, and engaging and empowering our employees.
It focuses on the achievement of two measurable goals that address our contribution to the socio-economic development of PNG, align with the PNG Government’s strategic goals and reflect our commitment to continuous performance improvement.
We continued to deliver on the Strategy’s key objectives in 2017, and this Report describes our progress.
Making PNG lives better
We aspire to set the standard for private sector contribution to sustainable development in PNG
Proud of what we do and how we do it
We seek to adopt industry best practice to manage material social responsibility issues, exceeding stakeholder expectations for governance, environmental and social performance wherever we can
Engaging and empowering our employees
We seek to provide a workplace that celebrates diversity and supports learning and development and drives high performance
We have developed and continue to progress several implementation strategies that support these overarching goals. They relate to:
- Climate Change,
- Human Rights,
- Sustainable development,
- Responsible supply chain management, and
- Diversity and inclusion.
In 2018, we will:
- Continue to embed climate risk in our decision-making and organisational controls,
- Continue implementation of our Human Rights Plan with finalisation of a Human Rights Policy and Responsible Supply Chain Strategy development; and completion of our Grievance Management System review,
- Support efforts by the Government of PNG to deliver on its project commitments to landowner beneficiaries,
- Advance an integrated and strategic approach to sustainable development in PNG,
- Pursue the Oil Search 2018-2020 Diversity and Inclusion goals, focused on continuous improvement in the areas of gender diversity, citizen development and an inclusive workplace, and
- Continue to engage and empower employees in social responsibility initiatives.
We recognise the importance of strong, mutually respectful stakeholder relationships and the role they play in achieving business success and our vision. The How We Work section of our website explains our commitment and how we approach stakeholder engagement.
During the year, we continued working with a range of stakeholders to understand the potential impacts and opportunities of Oil Search’s activities and to understand any concerns about, or interests in, the Company. The feedback we received informed our business decisions and planning, and helped to shape the content of this Report.
Oil Search is a member of a number of business and industry associations. These are listed in the Memberships and Commitments section of our website. During 2017, Oil Search representatives held positions on the governance bodies of:
- PNG Chamber of Mines and Petroleum,
- PNG Institute of National Affairs,
- PNG Business Coalition for Women,
- Hela Provincial Health Authority (HPHA), and
- Global Compact Network Australia (GCNA).
We have undertaken a preliminary review of the positions of these organisations on issues related to climate change and are comfortable that these are not in conflict with our Company positions on these matters.
We also continued to be a corporate participant in the Voluntary Principles on Security and Human Rights (VPSHR), and a member of the Extractive Industries Transparency Initiative (EITI) and the EITI PNG Multi-Stakeholder Group.
In August 2017, we joined the International Petroleum Industry Environmental Conservation Association (IPIECA), the global oil and gas industry association for environmental and social issues. We belong to a number of IPIECA working groups and taskforces, including social responsibility, biodiversity, climate change, supply chain, water and reporting. This supports our efforts to access and share good industry practice and knowledge, helping us to achieve our continuous performance goals in regard to environmental and social performance and contributing to industry thought leadership.
Our active engagement with PNG Government stakeholders included, but was not limited to, discussions and participation in forums with the Department of Petroleum, the Conservation and Environment Protection Authority, the Climate Change Development Authority, the Department of Treasury and the Department of National Planning. Specific engagement activities for 2017 are identified throughout this Report and are summarised in the tables below.
When unrest occurs within the community, it is usually the result of inter-tribal conflict, or related to issues between communities and the Government regarding unfulfilled commitments or other issues not related to Oil Search performance or our relationships with the community. We aim to minimise the potential for these types of conflicts by reporting transparently payments to Government, and supporting Government efforts to engage with communities by providing logistic support and ensuring Government representatives and agencies are fully aware of their obligations.
In 2017, unrest arising from community dissatisfaction due to lack of progress on PNG Government payments temporarily interrupted operations at Hides and at North West Moran. These issues were resolved by the Government meeting and talking with affected parties, which was facilitated by Oil Search. In early 2018, outside this reporting period, unrest arising from community dissatisfaction with progress on Government payments temporarily interrupted operations at Moran.
In February 2018, a magnitude 7.5 earthquake struck the PNG Highlands and materially impacted the communities in our project areas. While no major injuries were sustained by either our staff or our contractors, there was material damage to some our camps and associated facilities. The impact on local communities within our operational areas has been substantial, with many deaths in the region as well as the destruction of houses, schools, roads and bridges. Oil Search has committed US$5 million in cash and in-kind support for disaster relief efforts in Hela and Southern Highlands Provinces and parts of Gulf and Western Provinces. We are working closely with the PNG Government, the Australian and New Zealand Governments, our partners and aid agencies to assist where possible with relief efforts across our local communities. More information on our relief efforts can be found here .
Oil Search’s stakeholder interactions in 2017
Activism as a method of engagement has been on the rise over the past twelve months, particularly targeted at larger ASX-listed companies. Our approach has been, and continues to be, to engage directly and consistently with active stakeholders to understand and address their concerns. We encourage our stakeholders, shareholders and their representatives to engage earnestly, directly and early with us on issues that are of concern for them.
In 2017, we continued to engage with investors and their representatives on pressing social issues. Two shareholder proposals were submitted for consideration at the Company's 2017 Annual Meeting.
The first resolution received from Market Forces requested the inclusion of additional information regarding the Company’s resilience to climate change in our routine annual reporting, specifically climate change governance, strategy, risk management and metrics and targets in accordance with the TCFD.
The Company’s position was that our disclosures and planned activities already addressed this request.
For this reason, the Board recommended shareholders vote against this resolution. The resolution was withdrawn by the proposing shareholder before being voted for at the Annual Meeting. In conjunction with our 2017 Annual Report, we released a TCFD-aligned Climate Change Resilience Report which confirmed the Company’s resilience to a range of possible climate change scenarios, including a scenario which limits climate change to 2oC.
The second resolution received from the Australasian Centre for Corporate Responsibility requested greater transparency around our management of human rights. It called for the Company to disclose our compliance with the United Nations Guiding Principles on Business and Human Rights (the GPs) and the VPSHR, including our compliance methodology, and making our VPSHR Report available publicly. As Oil Search’s transparency around these topics was already established and we had committed to VPSHR reporting, the Board did not support this resolution. It was defeated at the Annual Meeting, with an overwhelming majority of proxy votes cast against it.
Our full response to shareholders regarding these resolutions is also available on the website.