2010 was a productive and good year for the work with corporate responsibility (CR) in DNO. We progressed on several important issues based on a close and fruitful cooperation between internal and external stakeholders. We established an ambitious plan for implementation of good CR standards in 2010. The plan is owned and governed by the Managing Director. DNO´s CR standards are integrated in the Company´s business management system (BMS). A good and open dialogue with key investors and rating agencies like the Norwegian KLP Kapitalforvaltning contributed significantly in the process of establishing focus on the following key areas:
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Dialogue with local communities and authorities
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Management of third parties and our supply chain
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Business ethics and anti corruption
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Health, safety and environment
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Reporting
Through activities conducted in 2010, we met all action points outlined in the plan. A third party has verified these results in December 2010. In previous years we have invested in bringing competence and knowledge into the Company, mostly from the knowledge and competence environments within the industry, but also from other stakeholders surrounding DNO. One important goal in 2010 has been to move systems and gain CR competence in the actual business units.
Stakeholder communication
Our stakeholder universe develops from year to year, and we make every effort to improve our communication with them. We concentrate our stakeholder dialogue efforts towards local communities and authorities as this is expected to provide the best results. Several key CR projects have been formalized through these interfaces. For DNO, Corporate Responsibility involves identifying, understanding and addressing the needs of such stakeholders in their encounters with the Company. By listening to our stakeholders, we can more easily distinguish challenges, opportunities and weaknesses related to our business operations. Information provided by stakeholders includes questions concerning integrity program and governance situation, climate change issues, social projects, equality policies and competence building. In 2010, several CR projects were identified and formalized through the contact with various stakeholder groups.
We also formally acknowledge and relate to the contributions made by organizations and NGO´s such as UN Global Compact, the ILO convention, OECD Guidelines, GRI, Amnesty International, EITI and Transparency International which all contribute to strengthen human rights and transparency within our industry. DNO will formally acknowledge these organizations during 2011. We continue to maintain an open and transparent communication, as we believe this is beneficial to those involved and the community at large.
Our formalized approach to CR
In line with good corporate governance we have established systems and routines to govern our systems, activities and behavior. Our systems are based on international standards like COSO, NUES, ISO:26000 and international conventions and shall guide us in our efforts to run a sustainable operation. We have developed system guidelines for our business units to ensure a uniform approach and compliance with our policies and objectives.
DNO´s code of conduct and corporate responsibility systems formalize our values and expected behavior of DNO employees in our relations and interaction with internal and external stakeholders. These systems make it possible to monitor and document any development or deviation, and simultaneously maintain an open and transparent dialogue with our stakeholders.
Rating agencies
The rating agencies have played an important role in shaping standards and baselines for our industry´s CR performance, and have assisted the industry in staying focused. DNO has over years developed competence, systems and routines for managing corporate responsibility. We are happy to see the establishment of industry standards, which can guide us in our efforts to improve.
Global Reporting Initiative
The Global Reporting Initiative (GRI) has played a key role in standardizing CR reporting. DNO will not be able to meet all GRI-requirements in the 2010 report, but is committed to continue using the standard to improve. An Internet based GRI table will be launched on www.dno.no during 2011.
Using GRI requirements for reporting has proved to have a significant effect on our CR focus as we realize the importance of transparency and predictability. DNO is also meeting the reporting requirements set by EITI.
Business ethics and anti corruption
DNO has a formalized set of ethical regulations and procedures anchored with the Board of Directors. The system is in compliance with practices for good corporate governance and meet every aspect of NUES and relevant laws relevant to accounting, transparency and auditing of such. As previously mentioned, the Company has an Audit Committee, which monitors the Company´s compliance with internal and external requirements.
During 2010 we developed a separate business ethics and anti corruption program that was rolled out to employees both at the corporate headquarters and in the business units. The program is aiming at developing competence and understanding required to comply with Norwegian and international anti corruption and penal codes, and include dilemma training relevant to the various units. The program was held in Norway, Yemen, UAE, Mozambique and Kurdistan and was verified by an external third party. The program opened for an open and constructive two-way communication and improved mutual understanding of our challenges. Based on the feedback and learning points made during the roll out, it is decided to arrange similar programs in 2011.
Our approach to sustainability
DNO is operating under significant cultural diversity. Our objective is to ensure environmental, social and ethical sustainable operations wherever we operate. The requirements for sustainability are set by ourselves, national and international laws and regulations and recommendations from selected NGOs.
Formal legal requirements and contracts have to take priority over expectations not formalized with our partners. Through dialogue and competence sharing we are involving our partners and associates in our efforts for sustainable operations and positive development towards good global standards for corporate responsibility.
Quality, Health, Safety and the Environment
Quality and safety in our operations is a key element of our efforts to succeed. DNO has in 2010 produced the following HSE results:
LTIF (Lost Time Incident Frequency) 1.04
TRIF (Total Recordable Incident Frequency) 2.58
VIF (Vehicle Incident Frequency) 0.93
The results for 2010 are satisfactory and prove a continued positive development. Good results in QHSE are good business due to less failures and reduced downtime. These results are produced through strong ownership in the line organization, supported by a Business Management System. DNO has representation of QHSE competence in all business units and fields, and manage to identify and mitigate risk to the benefit of regularity and business continuity.
Technical and operational safety
We regard quality as a prerequisite to success in all phases of our operations. During 2010 we have further developed this philosophy to ensure deliveries on time, on budget and at low cost. In order to develop our quality focus, we emphasize the importance of cross border cooperation and exchange of competence and experience. Success on high quality standards requires development of talent, courage and capacity combined with focus on compliance.
Our impact on the external environment
Our environmental performance is governed by competence, systems, international standards and formal requirements dictated by our Production Sharing Contracts (PSC). All licenses are with reference to the applicable PSC covered by an Environmental Impact Assessment developed in accordance with the World Trade Bank Standard.
The working environment
DNO International ASA has a sound, active and sustainable working environment. The Company has in accordance with the Norwegian Working Environment Act established systems and routines designed to govern a sustainable working environment. All designed to further improve by use of activities, dialogue and meetings. The Company has established a wide range of activities and services that benefit the staff and their families.
Working environment survey
DNO performed a working environment survey in 2010. In order to obtain the maximum ownership, the survey was developed internally with reference to the survey performed in 2008. A team consisting of a management representative, the safety delegate and two other employees developed the survey which was quality controlled by a third party. The results from the survey have been subject to follow up during the annual team building and internal work sessions including the safety delegate and staff. This work will continue until the next survey is completed.
Recruitment
DNO has throughout its history had a low turnover. The total DNO workforce was significantly expanded in 2010, from 513 to 565. The Company has during the recruitment campaigns had good access to relevant competence.
Development opportunities
DNO is operating assets and acreage in prosperous areas holding substantial oil resources. Exploration and production of oil and gas call for highly developed and competent staff and enable us to offer attractive challenges, good career opportunities and personal growth.
CR projects
The business units drive our involvement in social initiatives and corporate responsibility projects. All projects and initiatives have been closely coordinated with local authorities and key stakeholders. The initiatives range from refurbishment of schools to investments in large scale water purification projects and are carefully monitored by our Business Unit Managers. Our policy is to invest in projects promoting sustainable growth and competence building. DNO’s values and policies are clearly communicated to all relevant stakeholders involved in such projects.
During 2010 our investments in Mozambique have been concentrated around development of competence, refurbishment of two schools and health services to locals. Our investments in Kurdistan have continued with the water purification project in Dohuk Governate, competence exchange programs between Kurdistan and Norway, financial support to education of students participating in oil industry related studies, scholarships and investments in infrastructure in the local communities.
Our efforts in Yemen remain with the Yemen Smile initiative where we help children born with open clefts needing surgery. DNO has supported this program over a long period. In addition to this project we have continued to invest in competence development programs including well developed training and exchange programs.