Description
Implement procedures to avoid and, where this is not feasible, to reduce or remedy biodiversity loss and seek opportunities to make positive contributions to biodiversity conservation; Take a participatory approach to working with stakeholders to ensure that their concerns are addressed within the planning of activities, and that their interests and knowledge of biodiversity and use of ecosystem services are recognised and respected.
Business
Principles
September 2013
1.
INTRODUCTION p3
2.
BUSINESS PRINCIPLES p4
2.1
Core Principle – We behave honestly, fairly and with integrity p4
2.2
Overarching Principle – We seek to continually improve
our business performance p5
2.3
Behaving Responsibly to People p6
2.3.1
Principle – We develop the potential of our people p6
2.3.2
Principle – We foster a workplace that respects personal
dignity, is non-discriminatory and provides fair rewards p6
2.3.3
Principle – We provide a healthy, safe and secure working environment p6
2.4
Behaving Responsibly to Society p7
2.4.1
Principle – We seek to make a positive social impact in
every area that we work p7
2.4.2
Principle – We respect the rights and acknowledge the
aspirations and concerns of the communities in which we work p7
2.5
Behaving Responsibly towards the Environment p9
2.5.1
Principle – We avoid wherever possible, negative impacts
on the environment and biodiversity p9
2.5.2
Principle – We will prevent or where that is not practicable,
minimise discharges to the air, land and water p9
2.5.3
Principle – We will operate to minimise our carbon and
water footprint p10
Cairn Energy PLC Business Principles 3
These Business Principles describe Cairn’s
fundamental values and approach to managing
the business in accordance with the
Company’s policies and set out goals for our
behaviour. The Business Principles are based
on our core values of building respect,
nurturing relationships and acting
responsibly (the “3Rs”):
BUILDING RESPECT: We act with respect
for people, their communities, the
environment, human rights and the law.
NURTURING RELATIONSHIPS: We act
honestly, transparently and with integrity to
develop strong and lasting relationships with
all our stakeholders.
ACTING RESPONSIBLY: We behave fairly,
ethically and are accountable for our actions.
We believe in, and act on, our responsibility to
care for people, society and the environment
The 3Rs are promoted to staff, partners,
suppliers and contractors and are at the heart
of all we do in the conduct of our business.
Only in this way will we ensure a sustainable
business culture.
Our stakeholders have expectations that
we will work in a safe, responsible and
ethical manner. Our Business Principles
are consistent with those of the ISO 26000
Guidance for Social Responsibility, and since
2006 we have committed to conduct our
activities in accordance with the International
Finance Corporation (IFC) Performance
Standards.
For several years, our Business Principles
have been consistent with the UN Global
Compact, an initiative allowing businesses
to align their operations and strategies with
ten universally accepted principles in the
areas of human rights, labour, environment
and anti-corruption. We became a signatory
to the UN Global Compact in June 2012.
By subscribing, we have committed to
promoting the UN Global Compact among
our employees and contractors, to integrate
its principles into our strategies and operations
and to communicate publicly on our progress.
We have also been explicit since 2005 in
our support for the principles of the Extractive
Industry Transparency Initiative (EITI), a
multi-stakeholder initiative aimed at bringing
transparency to payments to Governments
from mineral or oil and gas extraction,
and have voluntarily disclosed our payments
to Governments in our annual CR Reports.
To strengthen further this commitment to
transparency of payments, we formally signed
up to becoming a Participating Company in the
EITI in September 2013.
These Business Principles are fundamental
to the success of our business and must
be implemented by all directors, of?cers
and employees of Cairn and its subsidiary
companies (the “Group”), and others that
work on the Company’s behalf. Compliance
with the Business Principles is overseen
by the Corporate Team on behalf of the
Executive Team. Employees are encouraged
to report actual or potential infringements
of the Business Principles through their line
manager or through the Whistle-blowing
procedure.
1. Introduction
Cairn Energy PLC
(“Cairn” or the
“Company”) is an
independent oil and gas
company that explores
for, discovers, develops
and produces oil and
gas globally as well as
actively acquiring and
disposing of oil and gas
interests. Cairn’s vision is
‘discovering hidden value
through entrepreneurial
exploration’ and we have
a proven track record of
creating and delivering
transformational
value through focused
exploration and
development. We aim to
build material positions
in frontier areas whilst
working with the
communities in which
we operate.
SIMON THOMSON
CHIEF EXECUTIVE
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I
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A
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LY IMPROVE OUR
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IN
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E
R
F
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M
A
N
C
E
Core
Principle
We behave
honestly, fairly and
with integrity
Behaving
Responsibly
to People
We develop the
potential of our people
We foster a
workplace that
respects personal
dignity, is non-
discriminatory and
provides fair rewards
We provide a healthy,
safe and secure
working environment
Behaving
Responsibly
Towards the
Environment
Behaving Responsibly
to Society
We seek to make a positive social
impact in every area in which we work
We respect the rights and acknowledge
the aspirations and concerns of the
communities in which we work
We avoid, wherever
possible, negative impacts
on the environment
and biodiversity
We will prevent,
or where that is not
practicable, minimise
discharge to air,
water and land
We will operate to
minimise our carbon
and water footprint
Cairn Energy PLC Business Principles 4
2. Business Principles
2.1 Core Principle
We behave honestly, fairly and
with integrity
Behaving honestly, fairly and with integrity is
at the core of all of the Business Principles and
is considered to be central to all of Cairn’s
interactions with its stakeholders. We comply
with applicable legal, regulatory and license
requirements in the countries where we do
business. In countries where the law or its
implementation does not provide for adequate
environmental or social safeguards, we will
strive to respect international norms of
behaviour.
We have a zero tolerance approach to bribery
and corruption. This is vital to protect and
maintain our reputation for doing business
ethically. The introduction of the UK Bribery
Act has paved the way for us to strengthen
further our approach to managing bribery
and corruption risks. As such, we have
implemented a comprehensive anti-bribery
and corruption management system which
guides our own behaviours and clari?es our
expectations of employees, partners and
suppliers. We regularly assess risk in this
area and ensure that providers or potential
new business partners are assessed and
appropriate mitigating measures are put in
place. We do not work with third parties
identi?ed through the risk assessment
process (agents, contractors, consultants,
intermediaries, suppliers and business
partners) that compromise our reputation
by association, or who we consider will not
behave in a manner consistent with our
Business Principles.
As part of our efforts to build on our ethical
culture and embed our zero tolerance
approach to bribery and corruption, we provide
regular training and communications to all
staff to ensure they are aware of their ethical
responsibilities and that they know when and
how to seek advice. We have also developed
a range of procedures to support our activities,
including our ABC Management System,
Business Partner Due Diligence Procedures
and our Group Code of Business Ethics
(“Code”). It is mandatory for all staff members
to sign-up to our Code, which is an umbrella
for several related policies, including anti-
bribery and corruption. Compliance with the
Code is a condition of employment at Cairn
and is imposed on third parties contracting
with Cairn.
The promotion of environmental and social
responsibility with our contractors is well
established within our Corporate Responsibility
(CR) Management System. Health, safety and
security, environmental and corporate social
responsibility requirements form an important
part of our contractor selection and
performance monitoring processes. We
also implement appropriate processes and
Cairn’s Business
Principles describe our
values and approach to
managing our business
Figure 1:
Business Principles
Based on our core values (the 3Rs), Cairn has 10 Business Principles which are
presented in Figure 1.
Cairn Energy PLC Business Principles 5
2. Business Principles Continued
We behave honestly,
fairly and with integrity,
and have zero tolerance
to bribery and corruption
controls in order to ensure our contractors and
suppliers meet our corporate responsibility
related standards. Training and communication
both at the site level and with our contractors’
representatives form an important part of our
practices.
Our decision to invest and operate in any
new country is based on a multitude of
factors. In any new business assessment
we evaluate the commercial, legal, political,
regulatory, health, safety, environmental,
security and human rights issues along with
technical and economic challenges related
to any investment opportunity.
The development and maintenance of good
relationships with our stakeholders is essential
to the success of our business. We maintain
transparent and open channels to engage
with our stakeholders throughout the life-cycle
of our business activities. We communicate
regularly and transparently on economic,
social, and environmental impact as well
as changes in operations that may affect
employees, customers, investors, partners,
the environment, the community or other
stakeholders.
We believe it is important to discuss issues
affecting our business with government at
appropriate levels. All relations with public
bodies are consistent with the Code. Cairn
does not engage in party politics or make
donations to political parties or candidates.
Cairn operates in various different territories
with diverse tax obligations and requirements.
As a Group, Cairn ensures that in each territory
it complies with local tax rules and regulations
and has adopted a policy to ensure the
Company does not enter into arti?cial tax
avoidance schemes.
2.2 Overarching
Principle
We seek to continually improve
our business performance
The goal of achieving continual improvement
in our business performance is considered to
be the ethos that drives all of the Business
Principles into action.
We set annual business performance
objectives and targets, including those related
to corporate responsibility and measure
and report our performance against these.
We regularly review the risks associated
with the delivery of our business objectives,
the ef?cacy of our internal controls and seek
to continually improve our performance in
all areas. We report and investigate all health,
safety, security, environmental and community
related incidents. We have formal grievance
procedures for our staff and communities
affected by our activities, implement
appropriate corrective actions and monitor
the outcome to con?rm satisfactory closure.
Cairn Energy PLC Business Principles 6
We are committed to
protecting the health,
safety and security
of employees and
contractors working
on our sites, the people
who come into contact
with our operations
and maintaining
and enhancing the
sustainability of the
environments in
which we operate.
2.3 Behaving
Responsibly to People
2.3.1 Principle - We develop the
potential of our people
In Cairn we utilise the skills and knowledge of
our people to give us our competitive advantage.
We aim to develop and enhance the capabilities
of our people by creating a culture which aims
to expand all employees’ capacity to create
the results they truly desire, where new and
expansive patterns of thinking are nurtured
and where people are continually learning.
In our daily interactions with colleagues, clients
and the community we seek to give and earn
respect, empower our people and challenge
conventional thinking. The atmosphere is one
of collaboration, empowerment and openness.
We provide a lively and productive environment
where people can add value and are given
opportunities to develop to their full potential.
2.3.2 Principle - We foster a
workplace that respects personal
dignity, is non-discriminatory
and provides fair rewards
Our global policy on equality of opportunity
and diversity sets the standard for fostering a
positive working environment which respects
an individual’s personal dignity and which is free
from less favourable treatment on the grounds
of gender (or gender re-assignment), disability,
race (including colour, ethnic or national origin,
creed), marital status, age, sexual orientation,
responsibility for dependants, religion or beliefs
or any other inappropriate distinction. We do not
employ forced, bonded or child labour and take
steps to ensure that this does not exist in our
supply chain.
We value diversity and we recruit and promote
employees on merit. We provide fair and just
rewards for all our workers. We do not tolerate
harassment or bullying of any kind. We recognise
the need to develop effective communication
and consultation with employees and recognise
that all employees have the right to freedom of
assembly, association and collective bargaining.
2.3.3 Principle - We provide a
healthy, safe and secure working
environment
We recognise that exploring for, developing
and producing hydrocarbons carries inherent
hazards. We are committed to protecting the
health, safety and security of employees and
contractors working on our sites, the people
who come into contact with our operations
and maintaining and enhancing the sustainability
of the environments in which we operate.
Before entering new locations we conduct risk
assessments and will not proceed where the
health, safety and security of our people and
operations cannot be assured or where we
cannot operate to our or equivalent standards.
We conduct our operations using sound
health, safety and security management
systems. We require our employees and
contractors to follow the requirements of
these systems. Throughout the Group our
aim is to promote health and welfare and
eliminate all work related injuries and illnesses.
At Cairn, we work to promote a strong health,
safety and environmental culture throughout
our business as we recognise that a strong
culture is vital to achieving excellent
performance. Our HSE Cultural Framework
makes explicit the behaviours that are (and are
not) acceptable for managers, team leaders /
supervisors and everyone (including our
contractors).
Security risks like other risks are managed
through our business risk management process.
We regularly identify and assess the security
of our personnel and assets and implement
appropriate and effective operational and crisis
management controls. Additionally, we aim
to develop supportive relationships with our
local communities which are important to assist
in the protection of our people and assets.
2. Business Principles Continued
Cairn Energy PLC Business Principles 7
Our community
development strategies
are developed and
implemented through
consultation and
partnership with local
authorities, NGOs and
other organisations.
2.4 Behaving
Responsibly to Society
2.4.1 Principle – We seek to make
a positive social impact
in every area that we work
Our operations can affect the social and
economic environment of the communities
where we operate. We recognise that
understanding these effects is important if
we are to sustain our activities and operate
effectively. To assess the potential social
impacts associated with an operation we
utilise tools such as Environmental and Social
Impact Assessments (“ESIA”) and Social
Baseline Studies. Depending upon the level
of risk and potential impacts, these ESIAs can
also integrate human rights and health impact
assessments, or can be carried out as
standalone exercises.
We contribute to community and social
development ?rstly through carrying out our
business activities, which provide energy and
infrastructure to the countries in which
we operate as well as employment, skills
development and trade with local enterprises.
We also add to the bene?ts generated by our
operations through focused and appropriate
social investment. Our community
development strategies in all areas are
developed and implemented through
consultation and partnership with local
authorities, NGOs and other organisations.
We require our suppliers and contractors
to source goods and services locally providing
standards can be maintained, including for
health, safety and environmental management.
We work with them to encourage the
development of local skills and competence in
provision of the services we require to support
our future business needs and for the bene?t
of local communities.
2.4.2 Principle - We respect the
rights and acknowledge the
aspirations and concerns of the
communities in which we work
Meeting our responsibility to respect human
rights is critical to the development and
maintenance of effective relationships with
our workers and the communities in which
we operate.
Cairn is committed to respecting internationally
recognised human rights and seeks to ensure
non-complicity in human rights abuses. We
support the principles contained within the
Universal Declaration of Human Rights and
seek to apply its principles within ‘our sphere
of in?uence’ and activities. Our approach
to managing human rights is guided by and
aligned with the ‘Guiding Principles on
Business and Human Rights. We apply a ‘rights
aware’ approach in identifying any human rights
at issue in our activities, assessing where the
issue occurs within the spheres of in?uence of
our business, and de?ning action to be taken
by the business to address them.
We evaluate social and economic risks in any
country in which we consider starting new
operations and assess these against our
business principles, policies and standards.
2. Business Principles Continued
Cairn Energy PLC Business Principles 8
We will participate where appropriate in public
affairs in a non-partisan, non-political and
responsible way to promote internationally
recognised human rights. We will also seek
to play a positive role, within Cairn’s sphere
of in?uence, in capacity-building through
applying the ‘rights aware’ approach.
We have established Group Security
Guidelines which provide security procedures
to be applied within our operations and which
seek to ensure that standards of operations,
equipment and training of personnel meet
the requirements of the Voluntary Principles
on Security and Human Rights and re?ect
the requirements of key UN human rights
guidelines, i.e. Basic Principles on the Use
of Force and Firearms by Law Enforcement
Of?cials and the Code of Conduct for Law
Enforcement Of?cials.
We seek to build positive relationships with
communities and to understand their concerns
about our operations by engaging with
stakeholders in different ways. Our
engagement is guided by the Group ‘Public
Consultation and Disclosure Plan’ Framework
(“PCDP”) and project speci?c PCDPs are
required for signi?cant activities and projects.
The Group PCDP requires positive engagement
and, in addition, a speci?c and transparent
mechanism for the recording of grievances,
along with a feedback mechanism. Wherever
we operate, a grievance mechanism will be
established to provide non-judicial redress to
affected communities or individuals.
We recognise that our activities might be
carried out on or affect the territories of
indigenous and tribal peoples. We respect
their rights and recognise that we must work
in certain circumstances (as set out in IFC
Performance Standard 7), towards achieving
free, prior and informed consultation and,
where appropriate, consent, on the use and
management of natural resources occurring
within their territories.
Through our assessments of social and
environmental risk and impact we seek to
understand any impacts our operations may
have on cultural heritage. We strive to protect
and support cultural heritage by undertaking
internationally recognized practices for its
protection, study, and documentation as well
as ensuring procedures for ‘chance ?nd’
are in place where there is a possibility that
cultural heritage may be found at an
operational site.
Our operations can also require land to be
acquired both temporarily for exploratory
and appraisal work (e.g. seismic surveys,
exploratory drilling, road access), and for
longer term use for permanent facilities (e.g.
wells, processing facilities, pipelines, roads).
We recognise that project related land
acquisition and restrictions on land use can
have an adverse impact on communities
and on persons that use the land. A Group
Framework for Resource Use Mitigation
is in place that outlines the principles to be
followed in acquiring land for any of Cairn’s
operations and in providing associated
compensation covering loss of the use of land
or access to assets, physical displacement,
impacts to assets such as built structures,
seasonal and perennial crops, and impacts
to livelihoods.
This also requires that more detailed speci?c
Resettlement Action Plans (“RAP”s) are
prepared where there is a need for signi?cant
land acquisition. Where land acquisition
or land use is not required but operations
still have potential to cause physical or
economic displacement (through impacts
on land or marine sites, assets or access
to assets), then Livelihood Restoration
Plans (“LRP”s) will be developed.
We seek to build positive
relationships with
communities and to
understand their concerns
about our operations
by engaging with
stakeholders in different
ways.
2. Business Principles Continued
Cairn Energy PLC Business Principles 9
Our goal is, wherever
possible, to safeguard the
areas in which we operate
and to minimise impacts
on the environment
and biodiversity during
operations.
2.5 Behaving
Responsibly towards
the Environment
2.5.1 Principle - We avoid
wherever possible, negative
impacts on the environment
and biodiversity
We recognise that our exploration,
development and production activities have
an impact on the environment, biodiversity
and ecosystem services. We take a
precautionary approach and our goal is,
wherever possible, to avoid negative impacts
on the environment and biodiversity during
operations. We will cooperate with others
to encourage the development and sharing
of environmental knowledge and technologies
and seek to apply the best available
technology to reduce the impact of our
operations.
We assess, manage and monitor our
environmental risks in a manner consistent
with the principles of the International
Environmental Management Standard
ISO14001. Our Corporate Responsibility
Management System is used to ensure
that environment and biodiversity issues
are identi?ed and assessed in all of our
activities and Environmental Impact
Assessment (“EIA”) or ESIA is the
principal tool to identify potential impacts.
We seek to ensure the promotion of the
sustainable use of biological resources in
line with the Convention on Biological Diversity.
We are committed to not operating
in UNESCO designated World Heritage Sites,
and will only undertake operations that affect
other protected areas and recognised sites
after due diligence of potential biodiversity
impacts.
In addition, we will:
• Implement procedures to avoid and, where this
is not feasible, to reduce or remedy biodiversity
loss and seek opportunities to make positive
contributions to biodiversity conservation;
• Take a participatory approach to working
with stakeholders to ensure that their
concerns are addressed within the planning
of activities, and that their interests and
knowledge of biodiversity and use of
ecosystem services are recognised and
respected; and
• Monitor our impacts and measure positive
contributions to biodiversity conservation.
2.5.2 Principle - We will prevent
or where that is not practicable,
minimise discharges to the air,
land and water
It is understood that our operations have the
potential for a negative environmental impact.
In these cases we apply a hierarchy of controls
to manage the potential negative impacts.
Firstly, we seek to prevent emissions from
our operations and, where the technical
dif?culties or ?nancial burden makes this
no longer practicable, we will minimise any
emissions and discharges to air, water or
land including the generation and disposal
of waste. Secondly we will, where practical,
look to mitigate impacts or in speci?c
circumstances remediate impacts through
fair and appropriate compensation.
The safe use of chemicals is vital within
all our operations and we adopt a clear
and stringent system whereby chemicals
are pre-screened and ranked according to
international guidelines. Wherever possible
we will use those which ‘Pose Little or
No Risk’ (“PLONOR”) ?rst and we will
substitute chemicals with less hazardous
or non-hazardous chemicals, if available.
Where substitution is not possible we will
look at possibilities to reduce use and control
discharge.
2. Business Principles Continued
Cairn Energy PLC Business Principles 10
We monitor and quantify our discharges and
wastes. We will set measurable objectives
and, where appropriate, targets for improved
environmental performance and resource
utilisation.
We will be prepared to respond to accidental
and emergency situations. We will work
closely with authorities to develop robust and
thorough emergency response and oil spill
prevention and contingency plans (“OSPCP”)
based on detailed risk identi?cation and
assessment.
2.5.3 Principle
We will operate to minimise our
carbon and water footprint
Energy is essential to social and economic
progress and we recognise that we have a
responsibility to take a precautionary approach
to the causes of climate change and seek to
minimise our own emissions of greenhouse
gases. We will:
• Measure, verify and report on greenhouse
gas emissions in line with the GHG
Protocol methods and oil and gas sector
disclosure initiatives;
• Understand the risks and opportunities
associated with climate change;
• Promote ef?cient use of energy in our
activities;
• Integrate climate change considerations
and potential costs into investment
decisions;
• Identify and evaluate opportunities for
energy ef?ciency and emissions reduction
making use of best available technology;
• Establish objectives and targets for energy
ef?ciency, wherever possible;
• Engage with stakeholders, for example,
through participating in industry
associations, on mitigation and adaptation
to climate change; and
• Contribute to programmes that address
environmental and social impacts of climate
change within our sphere of control and
reasonable in?uence.
We also recognise that fresh water scarcity
is a growing problem worldwide and have in
place a water resource strategy based on
our ‘rights aware’ approach, which aids the
identi?cation of necessary and potential
actions in relation to water access. We will
also:
• Monitor and assess fresh water extraction
and use, and potential impacts on fresh
water resources of our operations;
• Investigate ways to improve our fresh
water management processes;
• Identify, evaluate and implement
improvement measures to reduce impacts
on fresh water; and
• Report on our fresh water resources
management.
External References:
• Convention on Biological Diversity
• Extractive Industry Transparency Initiative
Standard
• Guiding Principles on Business and Human
Rights: Implementing the United Nations
‘Protect, Respect and Remedy’ Framework
• International Finance Corporation
Performance Standards
• ISO 26000 Guidance for Social
Responsibility
• ISO 14001 Standard for Environmental
Management
• OECD Guidelines for Multinational
Enterprises
• Universal Declaration of Human Rights
• Voluntary Principles on Security and Human
Rights
• UK Bribery Act 2010
• United Nations Global Compact Principles
• UNESCO World Heritage List
2. Business Principles Continued
www.cairnenergy.com
doc_366312410.pdf
Implement procedures to avoid and, where this is not feasible, to reduce or remedy biodiversity loss and seek opportunities to make positive contributions to biodiversity conservation; Take a participatory approach to working with stakeholders to ensure that their concerns are addressed within the planning of activities, and that their interests and knowledge of biodiversity and use of ecosystem services are recognised and respected.
Business
Principles
September 2013
1.
INTRODUCTION p3
2.
BUSINESS PRINCIPLES p4
2.1
Core Principle – We behave honestly, fairly and with integrity p4
2.2
Overarching Principle – We seek to continually improve
our business performance p5
2.3
Behaving Responsibly to People p6
2.3.1
Principle – We develop the potential of our people p6
2.3.2
Principle – We foster a workplace that respects personal
dignity, is non-discriminatory and provides fair rewards p6
2.3.3
Principle – We provide a healthy, safe and secure working environment p6
2.4
Behaving Responsibly to Society p7
2.4.1
Principle – We seek to make a positive social impact in
every area that we work p7
2.4.2
Principle – We respect the rights and acknowledge the
aspirations and concerns of the communities in which we work p7
2.5
Behaving Responsibly towards the Environment p9
2.5.1
Principle – We avoid wherever possible, negative impacts
on the environment and biodiversity p9
2.5.2
Principle – We will prevent or where that is not practicable,
minimise discharges to the air, land and water p9
2.5.3
Principle – We will operate to minimise our carbon and
water footprint p10
Cairn Energy PLC Business Principles 3
These Business Principles describe Cairn’s
fundamental values and approach to managing
the business in accordance with the
Company’s policies and set out goals for our
behaviour. The Business Principles are based
on our core values of building respect,
nurturing relationships and acting
responsibly (the “3Rs”):
BUILDING RESPECT: We act with respect
for people, their communities, the
environment, human rights and the law.
NURTURING RELATIONSHIPS: We act
honestly, transparently and with integrity to
develop strong and lasting relationships with
all our stakeholders.
ACTING RESPONSIBLY: We behave fairly,
ethically and are accountable for our actions.
We believe in, and act on, our responsibility to
care for people, society and the environment
The 3Rs are promoted to staff, partners,
suppliers and contractors and are at the heart
of all we do in the conduct of our business.
Only in this way will we ensure a sustainable
business culture.
Our stakeholders have expectations that
we will work in a safe, responsible and
ethical manner. Our Business Principles
are consistent with those of the ISO 26000
Guidance for Social Responsibility, and since
2006 we have committed to conduct our
activities in accordance with the International
Finance Corporation (IFC) Performance
Standards.
For several years, our Business Principles
have been consistent with the UN Global
Compact, an initiative allowing businesses
to align their operations and strategies with
ten universally accepted principles in the
areas of human rights, labour, environment
and anti-corruption. We became a signatory
to the UN Global Compact in June 2012.
By subscribing, we have committed to
promoting the UN Global Compact among
our employees and contractors, to integrate
its principles into our strategies and operations
and to communicate publicly on our progress.
We have also been explicit since 2005 in
our support for the principles of the Extractive
Industry Transparency Initiative (EITI), a
multi-stakeholder initiative aimed at bringing
transparency to payments to Governments
from mineral or oil and gas extraction,
and have voluntarily disclosed our payments
to Governments in our annual CR Reports.
To strengthen further this commitment to
transparency of payments, we formally signed
up to becoming a Participating Company in the
EITI in September 2013.
These Business Principles are fundamental
to the success of our business and must
be implemented by all directors, of?cers
and employees of Cairn and its subsidiary
companies (the “Group”), and others that
work on the Company’s behalf. Compliance
with the Business Principles is overseen
by the Corporate Team on behalf of the
Executive Team. Employees are encouraged
to report actual or potential infringements
of the Business Principles through their line
manager or through the Whistle-blowing
procedure.
1. Introduction
Cairn Energy PLC
(“Cairn” or the
“Company”) is an
independent oil and gas
company that explores
for, discovers, develops
and produces oil and
gas globally as well as
actively acquiring and
disposing of oil and gas
interests. Cairn’s vision is
‘discovering hidden value
through entrepreneurial
exploration’ and we have
a proven track record of
creating and delivering
transformational
value through focused
exploration and
development. We aim to
build material positions
in frontier areas whilst
working with the
communities in which
we operate.
SIMON THOMSON
CHIEF EXECUTIVE
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E
Core
Principle
We behave
honestly, fairly and
with integrity
Behaving
Responsibly
to People
We develop the
potential of our people
We foster a
workplace that
respects personal
dignity, is non-
discriminatory and
provides fair rewards
We provide a healthy,
safe and secure
working environment
Behaving
Responsibly
Towards the
Environment
Behaving Responsibly
to Society
We seek to make a positive social
impact in every area in which we work
We respect the rights and acknowledge
the aspirations and concerns of the
communities in which we work
We avoid, wherever
possible, negative impacts
on the environment
and biodiversity
We will prevent,
or where that is not
practicable, minimise
discharge to air,
water and land
We will operate to
minimise our carbon
and water footprint
Cairn Energy PLC Business Principles 4
2. Business Principles
2.1 Core Principle
We behave honestly, fairly and
with integrity
Behaving honestly, fairly and with integrity is
at the core of all of the Business Principles and
is considered to be central to all of Cairn’s
interactions with its stakeholders. We comply
with applicable legal, regulatory and license
requirements in the countries where we do
business. In countries where the law or its
implementation does not provide for adequate
environmental or social safeguards, we will
strive to respect international norms of
behaviour.
We have a zero tolerance approach to bribery
and corruption. This is vital to protect and
maintain our reputation for doing business
ethically. The introduction of the UK Bribery
Act has paved the way for us to strengthen
further our approach to managing bribery
and corruption risks. As such, we have
implemented a comprehensive anti-bribery
and corruption management system which
guides our own behaviours and clari?es our
expectations of employees, partners and
suppliers. We regularly assess risk in this
area and ensure that providers or potential
new business partners are assessed and
appropriate mitigating measures are put in
place. We do not work with third parties
identi?ed through the risk assessment
process (agents, contractors, consultants,
intermediaries, suppliers and business
partners) that compromise our reputation
by association, or who we consider will not
behave in a manner consistent with our
Business Principles.
As part of our efforts to build on our ethical
culture and embed our zero tolerance
approach to bribery and corruption, we provide
regular training and communications to all
staff to ensure they are aware of their ethical
responsibilities and that they know when and
how to seek advice. We have also developed
a range of procedures to support our activities,
including our ABC Management System,
Business Partner Due Diligence Procedures
and our Group Code of Business Ethics
(“Code”). It is mandatory for all staff members
to sign-up to our Code, which is an umbrella
for several related policies, including anti-
bribery and corruption. Compliance with the
Code is a condition of employment at Cairn
and is imposed on third parties contracting
with Cairn.
The promotion of environmental and social
responsibility with our contractors is well
established within our Corporate Responsibility
(CR) Management System. Health, safety and
security, environmental and corporate social
responsibility requirements form an important
part of our contractor selection and
performance monitoring processes. We
also implement appropriate processes and
Cairn’s Business
Principles describe our
values and approach to
managing our business
Figure 1:
Business Principles
Based on our core values (the 3Rs), Cairn has 10 Business Principles which are
presented in Figure 1.
Cairn Energy PLC Business Principles 5
2. Business Principles Continued
We behave honestly,
fairly and with integrity,
and have zero tolerance
to bribery and corruption
controls in order to ensure our contractors and
suppliers meet our corporate responsibility
related standards. Training and communication
both at the site level and with our contractors’
representatives form an important part of our
practices.
Our decision to invest and operate in any
new country is based on a multitude of
factors. In any new business assessment
we evaluate the commercial, legal, political,
regulatory, health, safety, environmental,
security and human rights issues along with
technical and economic challenges related
to any investment opportunity.
The development and maintenance of good
relationships with our stakeholders is essential
to the success of our business. We maintain
transparent and open channels to engage
with our stakeholders throughout the life-cycle
of our business activities. We communicate
regularly and transparently on economic,
social, and environmental impact as well
as changes in operations that may affect
employees, customers, investors, partners,
the environment, the community or other
stakeholders.
We believe it is important to discuss issues
affecting our business with government at
appropriate levels. All relations with public
bodies are consistent with the Code. Cairn
does not engage in party politics or make
donations to political parties or candidates.
Cairn operates in various different territories
with diverse tax obligations and requirements.
As a Group, Cairn ensures that in each territory
it complies with local tax rules and regulations
and has adopted a policy to ensure the
Company does not enter into arti?cial tax
avoidance schemes.
2.2 Overarching
Principle
We seek to continually improve
our business performance
The goal of achieving continual improvement
in our business performance is considered to
be the ethos that drives all of the Business
Principles into action.
We set annual business performance
objectives and targets, including those related
to corporate responsibility and measure
and report our performance against these.
We regularly review the risks associated
with the delivery of our business objectives,
the ef?cacy of our internal controls and seek
to continually improve our performance in
all areas. We report and investigate all health,
safety, security, environmental and community
related incidents. We have formal grievance
procedures for our staff and communities
affected by our activities, implement
appropriate corrective actions and monitor
the outcome to con?rm satisfactory closure.
Cairn Energy PLC Business Principles 6
We are committed to
protecting the health,
safety and security
of employees and
contractors working
on our sites, the people
who come into contact
with our operations
and maintaining
and enhancing the
sustainability of the
environments in
which we operate.
2.3 Behaving
Responsibly to People
2.3.1 Principle - We develop the
potential of our people
In Cairn we utilise the skills and knowledge of
our people to give us our competitive advantage.
We aim to develop and enhance the capabilities
of our people by creating a culture which aims
to expand all employees’ capacity to create
the results they truly desire, where new and
expansive patterns of thinking are nurtured
and where people are continually learning.
In our daily interactions with colleagues, clients
and the community we seek to give and earn
respect, empower our people and challenge
conventional thinking. The atmosphere is one
of collaboration, empowerment and openness.
We provide a lively and productive environment
where people can add value and are given
opportunities to develop to their full potential.
2.3.2 Principle - We foster a
workplace that respects personal
dignity, is non-discriminatory
and provides fair rewards
Our global policy on equality of opportunity
and diversity sets the standard for fostering a
positive working environment which respects
an individual’s personal dignity and which is free
from less favourable treatment on the grounds
of gender (or gender re-assignment), disability,
race (including colour, ethnic or national origin,
creed), marital status, age, sexual orientation,
responsibility for dependants, religion or beliefs
or any other inappropriate distinction. We do not
employ forced, bonded or child labour and take
steps to ensure that this does not exist in our
supply chain.
We value diversity and we recruit and promote
employees on merit. We provide fair and just
rewards for all our workers. We do not tolerate
harassment or bullying of any kind. We recognise
the need to develop effective communication
and consultation with employees and recognise
that all employees have the right to freedom of
assembly, association and collective bargaining.
2.3.3 Principle - We provide a
healthy, safe and secure working
environment
We recognise that exploring for, developing
and producing hydrocarbons carries inherent
hazards. We are committed to protecting the
health, safety and security of employees and
contractors working on our sites, the people
who come into contact with our operations
and maintaining and enhancing the sustainability
of the environments in which we operate.
Before entering new locations we conduct risk
assessments and will not proceed where the
health, safety and security of our people and
operations cannot be assured or where we
cannot operate to our or equivalent standards.
We conduct our operations using sound
health, safety and security management
systems. We require our employees and
contractors to follow the requirements of
these systems. Throughout the Group our
aim is to promote health and welfare and
eliminate all work related injuries and illnesses.
At Cairn, we work to promote a strong health,
safety and environmental culture throughout
our business as we recognise that a strong
culture is vital to achieving excellent
performance. Our HSE Cultural Framework
makes explicit the behaviours that are (and are
not) acceptable for managers, team leaders /
supervisors and everyone (including our
contractors).
Security risks like other risks are managed
through our business risk management process.
We regularly identify and assess the security
of our personnel and assets and implement
appropriate and effective operational and crisis
management controls. Additionally, we aim
to develop supportive relationships with our
local communities which are important to assist
in the protection of our people and assets.
2. Business Principles Continued
Cairn Energy PLC Business Principles 7
Our community
development strategies
are developed and
implemented through
consultation and
partnership with local
authorities, NGOs and
other organisations.
2.4 Behaving
Responsibly to Society
2.4.1 Principle – We seek to make
a positive social impact
in every area that we work
Our operations can affect the social and
economic environment of the communities
where we operate. We recognise that
understanding these effects is important if
we are to sustain our activities and operate
effectively. To assess the potential social
impacts associated with an operation we
utilise tools such as Environmental and Social
Impact Assessments (“ESIA”) and Social
Baseline Studies. Depending upon the level
of risk and potential impacts, these ESIAs can
also integrate human rights and health impact
assessments, or can be carried out as
standalone exercises.
We contribute to community and social
development ?rstly through carrying out our
business activities, which provide energy and
infrastructure to the countries in which
we operate as well as employment, skills
development and trade with local enterprises.
We also add to the bene?ts generated by our
operations through focused and appropriate
social investment. Our community
development strategies in all areas are
developed and implemented through
consultation and partnership with local
authorities, NGOs and other organisations.
We require our suppliers and contractors
to source goods and services locally providing
standards can be maintained, including for
health, safety and environmental management.
We work with them to encourage the
development of local skills and competence in
provision of the services we require to support
our future business needs and for the bene?t
of local communities.
2.4.2 Principle - We respect the
rights and acknowledge the
aspirations and concerns of the
communities in which we work
Meeting our responsibility to respect human
rights is critical to the development and
maintenance of effective relationships with
our workers and the communities in which
we operate.
Cairn is committed to respecting internationally
recognised human rights and seeks to ensure
non-complicity in human rights abuses. We
support the principles contained within the
Universal Declaration of Human Rights and
seek to apply its principles within ‘our sphere
of in?uence’ and activities. Our approach
to managing human rights is guided by and
aligned with the ‘Guiding Principles on
Business and Human Rights. We apply a ‘rights
aware’ approach in identifying any human rights
at issue in our activities, assessing where the
issue occurs within the spheres of in?uence of
our business, and de?ning action to be taken
by the business to address them.
We evaluate social and economic risks in any
country in which we consider starting new
operations and assess these against our
business principles, policies and standards.
2. Business Principles Continued
Cairn Energy PLC Business Principles 8
We will participate where appropriate in public
affairs in a non-partisan, non-political and
responsible way to promote internationally
recognised human rights. We will also seek
to play a positive role, within Cairn’s sphere
of in?uence, in capacity-building through
applying the ‘rights aware’ approach.
We have established Group Security
Guidelines which provide security procedures
to be applied within our operations and which
seek to ensure that standards of operations,
equipment and training of personnel meet
the requirements of the Voluntary Principles
on Security and Human Rights and re?ect
the requirements of key UN human rights
guidelines, i.e. Basic Principles on the Use
of Force and Firearms by Law Enforcement
Of?cials and the Code of Conduct for Law
Enforcement Of?cials.
We seek to build positive relationships with
communities and to understand their concerns
about our operations by engaging with
stakeholders in different ways. Our
engagement is guided by the Group ‘Public
Consultation and Disclosure Plan’ Framework
(“PCDP”) and project speci?c PCDPs are
required for signi?cant activities and projects.
The Group PCDP requires positive engagement
and, in addition, a speci?c and transparent
mechanism for the recording of grievances,
along with a feedback mechanism. Wherever
we operate, a grievance mechanism will be
established to provide non-judicial redress to
affected communities or individuals.
We recognise that our activities might be
carried out on or affect the territories of
indigenous and tribal peoples. We respect
their rights and recognise that we must work
in certain circumstances (as set out in IFC
Performance Standard 7), towards achieving
free, prior and informed consultation and,
where appropriate, consent, on the use and
management of natural resources occurring
within their territories.
Through our assessments of social and
environmental risk and impact we seek to
understand any impacts our operations may
have on cultural heritage. We strive to protect
and support cultural heritage by undertaking
internationally recognized practices for its
protection, study, and documentation as well
as ensuring procedures for ‘chance ?nd’
are in place where there is a possibility that
cultural heritage may be found at an
operational site.
Our operations can also require land to be
acquired both temporarily for exploratory
and appraisal work (e.g. seismic surveys,
exploratory drilling, road access), and for
longer term use for permanent facilities (e.g.
wells, processing facilities, pipelines, roads).
We recognise that project related land
acquisition and restrictions on land use can
have an adverse impact on communities
and on persons that use the land. A Group
Framework for Resource Use Mitigation
is in place that outlines the principles to be
followed in acquiring land for any of Cairn’s
operations and in providing associated
compensation covering loss of the use of land
or access to assets, physical displacement,
impacts to assets such as built structures,
seasonal and perennial crops, and impacts
to livelihoods.
This also requires that more detailed speci?c
Resettlement Action Plans (“RAP”s) are
prepared where there is a need for signi?cant
land acquisition. Where land acquisition
or land use is not required but operations
still have potential to cause physical or
economic displacement (through impacts
on land or marine sites, assets or access
to assets), then Livelihood Restoration
Plans (“LRP”s) will be developed.
We seek to build positive
relationships with
communities and to
understand their concerns
about our operations
by engaging with
stakeholders in different
ways.
2. Business Principles Continued
Cairn Energy PLC Business Principles 9
Our goal is, wherever
possible, to safeguard the
areas in which we operate
and to minimise impacts
on the environment
and biodiversity during
operations.
2.5 Behaving
Responsibly towards
the Environment
2.5.1 Principle - We avoid
wherever possible, negative
impacts on the environment
and biodiversity
We recognise that our exploration,
development and production activities have
an impact on the environment, biodiversity
and ecosystem services. We take a
precautionary approach and our goal is,
wherever possible, to avoid negative impacts
on the environment and biodiversity during
operations. We will cooperate with others
to encourage the development and sharing
of environmental knowledge and technologies
and seek to apply the best available
technology to reduce the impact of our
operations.
We assess, manage and monitor our
environmental risks in a manner consistent
with the principles of the International
Environmental Management Standard
ISO14001. Our Corporate Responsibility
Management System is used to ensure
that environment and biodiversity issues
are identi?ed and assessed in all of our
activities and Environmental Impact
Assessment (“EIA”) or ESIA is the
principal tool to identify potential impacts.
We seek to ensure the promotion of the
sustainable use of biological resources in
line with the Convention on Biological Diversity.
We are committed to not operating
in UNESCO designated World Heritage Sites,
and will only undertake operations that affect
other protected areas and recognised sites
after due diligence of potential biodiversity
impacts.
In addition, we will:
• Implement procedures to avoid and, where this
is not feasible, to reduce or remedy biodiversity
loss and seek opportunities to make positive
contributions to biodiversity conservation;
• Take a participatory approach to working
with stakeholders to ensure that their
concerns are addressed within the planning
of activities, and that their interests and
knowledge of biodiversity and use of
ecosystem services are recognised and
respected; and
• Monitor our impacts and measure positive
contributions to biodiversity conservation.
2.5.2 Principle - We will prevent
or where that is not practicable,
minimise discharges to the air,
land and water
It is understood that our operations have the
potential for a negative environmental impact.
In these cases we apply a hierarchy of controls
to manage the potential negative impacts.
Firstly, we seek to prevent emissions from
our operations and, where the technical
dif?culties or ?nancial burden makes this
no longer practicable, we will minimise any
emissions and discharges to air, water or
land including the generation and disposal
of waste. Secondly we will, where practical,
look to mitigate impacts or in speci?c
circumstances remediate impacts through
fair and appropriate compensation.
The safe use of chemicals is vital within
all our operations and we adopt a clear
and stringent system whereby chemicals
are pre-screened and ranked according to
international guidelines. Wherever possible
we will use those which ‘Pose Little or
No Risk’ (“PLONOR”) ?rst and we will
substitute chemicals with less hazardous
or non-hazardous chemicals, if available.
Where substitution is not possible we will
look at possibilities to reduce use and control
discharge.
2. Business Principles Continued
Cairn Energy PLC Business Principles 10
We monitor and quantify our discharges and
wastes. We will set measurable objectives
and, where appropriate, targets for improved
environmental performance and resource
utilisation.
We will be prepared to respond to accidental
and emergency situations. We will work
closely with authorities to develop robust and
thorough emergency response and oil spill
prevention and contingency plans (“OSPCP”)
based on detailed risk identi?cation and
assessment.
2.5.3 Principle
We will operate to minimise our
carbon and water footprint
Energy is essential to social and economic
progress and we recognise that we have a
responsibility to take a precautionary approach
to the causes of climate change and seek to
minimise our own emissions of greenhouse
gases. We will:
• Measure, verify and report on greenhouse
gas emissions in line with the GHG
Protocol methods and oil and gas sector
disclosure initiatives;
• Understand the risks and opportunities
associated with climate change;
• Promote ef?cient use of energy in our
activities;
• Integrate climate change considerations
and potential costs into investment
decisions;
• Identify and evaluate opportunities for
energy ef?ciency and emissions reduction
making use of best available technology;
• Establish objectives and targets for energy
ef?ciency, wherever possible;
• Engage with stakeholders, for example,
through participating in industry
associations, on mitigation and adaptation
to climate change; and
• Contribute to programmes that address
environmental and social impacts of climate
change within our sphere of control and
reasonable in?uence.
We also recognise that fresh water scarcity
is a growing problem worldwide and have in
place a water resource strategy based on
our ‘rights aware’ approach, which aids the
identi?cation of necessary and potential
actions in relation to water access. We will
also:
• Monitor and assess fresh water extraction
and use, and potential impacts on fresh
water resources of our operations;
• Investigate ways to improve our fresh
water management processes;
• Identify, evaluate and implement
improvement measures to reduce impacts
on fresh water; and
• Report on our fresh water resources
management.
External References:
• Convention on Biological Diversity
• Extractive Industry Transparency Initiative
Standard
• Guiding Principles on Business and Human
Rights: Implementing the United Nations
‘Protect, Respect and Remedy’ Framework
• International Finance Corporation
Performance Standards
• ISO 26000 Guidance for Social
Responsibility
• ISO 14001 Standard for Environmental
Management
• OECD Guidelines for Multinational
Enterprises
• Universal Declaration of Human Rights
• Voluntary Principles on Security and Human
Rights
• UK Bribery Act 2010
• United Nations Global Compact Principles
• UNESCO World Heritage List
2. Business Principles Continued
www.cairnenergy.com
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