Respect for human rights and the desire to do no harm underpin a socially responsible approach to our operations in host countries and across our supply chain. Together with our commitment to sustainable development, this helps us to maintain strong community relations and a responsible operating environment.
Our Social Responsibility Policy identifies our high level commitment to human rights.
Oil Search is a signatory to the UN Global Compact and a corporate participant in the Voluntary Principles on Security and Human Rights (VPSHR). Our human rights approach also considers and aligns with the UN Guiding Principles for Business and Human Rights.
These important initiatives inform our approach and affirm our commitment to:
- Respect international norms of behaviour and recognised human rights, including the rights of Indigenous peoples, by seeking to avoid causing or contributing to adverse human rights impacts from our activities,
- Undertake human rights due diligence and consider human rights in our risk and impact assessments,
- If any impacts inadvertently occur, act to mitigate or address them. While we have a significant commitment to sustainable development, first and foremost we are committed to ‘doing no harm’,
- Respect laws wherever we operate,
- Have and continue to undertake appropriate due diligence of our activities and management controls,
- Support appropriate access to grievance mechanisms and appropriate remedies when required.
Oversight and governance
The Board HSSC is responsible for overseeing human rights risk management and material security related matters and our senior managers have a management KPI relating to the VPSHR Implementation Plan.
Our cross-functional VPSHR Steering Committee is chaired by the Executive General Manager of our PNG Business Unit, with executive and senior subject matter experts in areas of human rights, security, operations, social responsibility and community affairs. This Committee meets regularly to oversee and discuss progress in implementing our VPSHR Implementation Plan, ensures adherence to the Memorandum of Understanding (MoU) with the Royal PNG Constabulary (RPNGC) and monitors, reviews and investigates any security incidents with alleged or potential human rights breaches.
Management regularly reports on performance against the Human Rights Plan and any material community grievances to the Board HSSC.
Corporate human rights strategy, approach and functional assurance are led by our General Manager Stakeholder Engagement and Social Responsibility, while our discipline leads in Security, Community Affairs and Contracts and Procurement drive implementation of specific human rights elements in their areas.
A risk led approach
In 2014, to identify potential human rights risks and assess controls and impacts, we undertook an initial review of our human rights risks. The review was informed by advice provided by human rights experts from the Allens law firm, Verisk Maplecroft risk advisory and human rights and social impact advisors Banarra (now KPMG Banarra).
It included an assessment of the regulatory environment, risk register, incidents, peer benchmarking, country human rights risk profiles (PNG), NGO register review, and identified current practices and controls.
Following this assessment, we reviewed the effectiveness of our existing human rights controls and practices, and the results of which informed a multi-year Human Rights Improvement Plan.
In 2017, we engaged Verisk Maplecroft, an independent expert on global risk analytics, to update our PNG’s human rights risk profile. This confirmed that the risks identified in 2014 remain material to Oil Search, namely:
- Community relations – community engagement and consultation, livelihoods, and environmental impacts, grievance management.
- Security – use of security forces generally.
- Labour – specifically in our supply chain, child, forced and compulsory labour.
- Land Acquisition – land access and resettlement practices, compensation, landowner identification.
Human rights considerations are integrated throughout our systems, procedures and guidelines. These include procedures and guidelines which address risk management, environmental and social impact assessment and management, grievance management, stakeholder management, security management, contract and procurement management, and land access for instance.
Our Responsible Supply Chain Strategy, currently under development, addresses contractor screening and management in relation to human rights as a key deliverable of our Human Rights Improvement Plan and Social Responsibility Strategy.
Security and human rights
Oil Search was accepted as a participant in the Voluntary Principles on Security and Human Rights (VPSHR) Initiative in December 2016.
To support our commitment to the VPSHR Oil Search developed VPSHR Plan in early 2017. This multi-year plan focusses on core aspects of the Voluntary Principles Initiative which will help us to:
- Assure our risk assessment and incident reporting processes,
- Guide our security and human rights training content and reach,
- Support greater alignment with our joint venture partners,
- Guide the development of contractual clauses related to human rights in public and private security provider contracts,
- Enhance performance requirements in relation to the management of public and private security providers,
- Establish criteria for screening and evaluation of contractors,
- Benchmark our security and human rights practices,
- Strengthen our grievance reporting and management systems,
- Strengthen our external reporting of human rights allegations and incidents,
Oil Search has opted in to the voluntary VPSHR Verification and Reporting Framework and we have committed to providing a public report on our progress in Q1 each year. See here for our 2017 VPSHR Report.
Responsible supply chain
Oil Search’s success is underpinned by a holistic approach to managing the risks and opportunities within our supply chain. This is because it directly influences the operational impact and reputation of all our partners and members of our supply chain.
Ensuring a sustainable supply chain is a key element of our overall supply chain management strategy. Supplier performance, including sustainability performance, has the ability to significantly reduce our costs and risks as well as increase productivity. It also represents an opportunity to foster the sustainable development of both the economy of PNG and the economy within our host communities.
Responsible management of our supply chain is one of the principles of our Code of Conduct. This states that all contractors, suppliers and business partners must be selected, engaged and managed on the basis that they are expected to follow policies and procedures that are consistent with Oil Search’s Values and Policies; including our Code of Conduct, and our Corruption Prevention and Social Responsibility Policies.
Our supply chain
Oil Search has approximately 4,000 direct suppliers based largely in Australia, PNG, New Zealand, USA and Europe.
These include international corporations, small manufacturers, PNG Landowner Companies (Lancos) and niche consultants across a range of products and services including:
- Services: Drilling, well services, aviation, camp services (e.g. catering and accommodation), manual labour, construction, logistics, engineering, exploration, professional, data analysis, testing, vehicle hire, freight and security.
- Products: Chemicals, valves, pumps, drilling equipment and supplies, personal protective equipment, office equipment/stationery, vehicles and auto parts, instrumentation and electrical equipment.
We define critical suppliers as those that are both high risk and high value spend. Our risk rating considers factors such as availability of alternate suppliers, criticality of delays from supply, and the risk and impact of a supplier event on our operations.
Oil Search’s ability to manage ethical, environmental and human rights considerations within the supply chain is an important risk management and social responsibility consideration.
We obtain independent third-party media and sanction assessments on new suppliers using the Dow Jones Risk and Compliance system as part of our supplier pre-qualification process. This informs us of potential regulatory and reputational ‘red flags’ across a range of issues that need to be considered in the supplier selection decision making process including ethics, human rights and environmental performance. Critical suppliers may be subject to further analysis and review.
We encourage and expect contractors to act in a safe and responsible manner that aligns with Oil Search’s standards around integrity, personal safety, environmental protection and good governance. These expectations are incorporated into all contract terms, with clauses covering:
- Legal compliance
- Ethics and Corruption – with reference to the principles of our Code of Conduct
- Local staffing
- Health and safety – with reference to our Health, Safety, Environment and Security Policy
- Environmental protection
Oil Search’s third party internal audit programme uses a risk based approach to identify a sample of contractors and suppliers for review each year. These provide independent, risk-based assurance on the effectiveness of internal controls used to identify, prevent and mitigate risks associated with contracting services. Specific reviews are also included in the internal audit programme to focus on safety aspects of contractor performance, in particular for aviation and land transport contractors. These audits review compliance with contract conditions, including safety performance, and adherence to legislative requirements. Where necessary, we issue corrective action plans and their close-out is monitored by our Assurance and Compliance team. Results are reported to the Board Audit and Financial Risk Committee.
As an ISO 14001 certified company, Oil Search establishes controls, communicates and trains contractors on environmental aspects. We require all contractors whose activities have the potential to cause significant environmental impact to comply with the documented control procedures, be aware of the requirements of our environmental management system and be competent to perform the job assigned. We regularly inspect and review contractor adherence to these requirements.
Our Contracts and Procurement team conduct annual meetings with contractors to discuss any concerns and performance improvement opportunities and provide support. Contractor reviews and site visits are also conducted annually to check performance against contractual obligations and agreed improvements.
As PNG Lancos often undertake more remote or labour intensive tasks for us, we engage and support their safety performance using a number of approaches. These include the use of scorecards with safety KPIs, personal safety training and the support of a dedicated safety advisor. This is in addition to regular safety audits on the implementation of our safety systems and a Lanco Safety Incentive Scheme. Each PNG Lanco also has an agreed work-plan to ensure ongoing compliance with PNG company laws and regulations. Compliance to this is monitored by Oil Search contract owners and Lanco representatives.
For further information on how we support PNG Lancos grow and enable smaller scale businesses to thrive, please refer to the Livelihoods and local enterprise development section of our website. See the Responsible Supply Chain section of the Social Responsibility Report for further information about activities undertaken in 2017.