Petro-Canada's 2005 Report to the Community and Website

  • 2006/08/01
Time period
  • January 2005  –  December 2005
  • The Ten Principles of the Global Compact

    The global Compact asks companies to embrace, support and enact, within their sphere of influence, a set of core values in the areas of human rights, labor standards, the environment and anti-corruption.

    Petro-Canada’s 5th Annual Report to the Community (, provides a review of the company’s performance in 2005 in the areas outlined by its Principles for Investment and Operations ( The report gathers anecdotal evidence and data in a number of key performance measures, enabling the public to access the company’s ongoing efforts in these areas. The report is also an important part in maintaining an ongoing dialogue with the company’s stakeholders, allowing them to assess the company’s progress against its principles of responsible conduct.

    Petro-Canada’s commitment to the Global Compact is expressed its Principles for Investment and Operations, on its website ( and the company’s implementation of the principles is demonstrated throughout the Report to the Community.

    Petro-Canada’s 2005/2006 Report to the Community is now available in hard copy and on the web site at

    In the introduction, the report contains highlights and performances on Petro-Canada’s financial and operating performance and business strategies. The Chief Executive Officer outlines the Company’s priorities in meeting the highest levels of ethics, business practices and regulatory compliance and answers questions related to corporate responsibility. Corporate governance components supporting responsible business conduct are discussed in first section of the report (pp 12-17), with specific supporting policies and procedures available in the Corporate Governance section of its website ( The second section of the report (pp 18-27) addresses Stakeholder engagement, including Aboriginal engagement, and investment in the communities in which Petro-Canada operates. In the next section (pp28-35), the report describes the company’s approach to working conditions and human rights, looking at health and safety, employee compensation and benefits, and human rights. The final section of the report (pp36-51) outlines the company’s efforts regarding environment. It includes details of the company’s performance with respect to air quality, water, biodiversity, product quality, energy, greenhouse gas emissions and waste management, regulatory compliance, alternate fuels and environmental investments.

    Petro-Canada is a member and active participant in several key organizations that advance business leadership in sustainable development including the World Business Council for Sustainable Development (WBCSD) and Canadian Business for Social Responsibility. The Company is also a founding member of the Business Leaders’ Network at the Boston College Center for Corporate Citizenship. We are an active member of the Canadian Association of Petroleum Producers (CAPP). As a refiner, distributor and marketer of refined products, Petro-Canada is an active member of the Canadian Petroleum Products Institute (CPPI). Petro-Canada is also active in The International Association of Oil & Gas Producers (OGP).

    The following is a summary of progress made since 2004 addressing the principles of the UN Global Compact. Full details are available online at

    Human Rights

    2005 PROGRESS

    • Implemented corporate-wide Guidelines for Security and the Protection of Human Rights.

    2006 GOALS

    • In 2006, Petro-Canada will be integrating the guidelines into operational procedures and risk assessment as well as developing a monitoring and reporting mechanism for human rights.

    • Petro-Canada will also strengthen human rights protection by reviewing community, Aboriginal/indigenous peoples, and labor and employment policies, and by formally incorporating social dimensions into existing risk assessment tools.

    In 2005, Petro-Canada implemented corporate-wide “Guidelines for Security and the Protection of Human Rights” based on the Voluntary Principles of Human Rights and Security (U.S./U.K. 2001). The guidelines are applied across the Company for the use of public or private security services, in either existing operations or entry into new countries. The guidelines are incorporated into the Security Management and Emergency Preparedness element of the company’s TLM standards. Log on to, to view the guidelines and the TLM standards.


    2005 PROGRESS

    • Reduced total recordable injury frequency (including employees and contractors) by 18% compared with 2004. Employee recordable injury frequency (per 200,000 person hours) was 0.79 in 2005, compared with 0.65 in 2004 due to more incidents in North American upstream operations. Contractor recordable injury frequency was 1.33 in 2005, compared with 1.97 in 2004 due to better performance at refineries and manufacturing facilities;

    • Held a safety forum to strengthen contractor engagement in our Zero-Harm initiative and engaged more than 700 leaders in workshops to outline leaders’ roles in creating a Zero-Harm culture;

    • Conducted nine emergency response exercises to ensure the Company has resources to support on-site emergencies and to work with impacted external stakeholders;

    2006 GOALS

    • Maintain our focus on injury reduction;

    • Implement recommendations from our partnership forum with contractors to improve safety performance;

    • Strengthen processes to transfer and implement lessons learned from environment, health and safety events;

    • Begin work to improve workforce planning, build recruiting capabilities and retain existing employees;

    • Implement a President’s Award to recognize outstanding safety performance achievements; and

    • Adapt business continuity plans to respond to a pandemic influenza scenario.

    Petro-Canada makes every effort to provide useful information and to listen to the ideas and concerns put forth by employees.

    In 2005, an upgraded intranet was launched to provide tools for enhanced business communications. It also provides an effective means through which feedback and suggestions can be solicited from employees. After the release of each quarterly report, presentations and speaking points are provided to Company leaders to assist them in communicating business priorities, plans and results to employees.

    We respect the right of our employee groups to choose to be represented by a bargaining agent. Where employee groups have elected to do so, Petro-Canada bargains in good faith to reach a collective agreement that balances the needs of the business and leadership with a responsible package of wages and working conditions. As of November 2005, approximately 24% of Petro-Canada employees were covered by collective bargaining agreements. Approximately 91% of the Company’s unionized employees are members of the Communications, Energy and Paperworkers Union (CEP) which represents refinery, marketing, gas plant and offshore production workers. Three-year collective bargaining agreements with most CEP locals will expire January 31, 2007. Negotiations to reach a first agreement with employees on the Terra Nova FPSO were concluded in September 2005. This agreement is the first North American offshore agreement of its kind.

    In Canada, Petro-Canada’s goal is to establish and foster open and mutually beneficial relationships with Aboriginal peoples where we operate and in the broader context. We do this by building relationships; providing employment opportunities; focusing on education and training; developing business opportunities; and creating community partnerships. Petro-Canada supports training programs that meet the specialized employment requirements of Aboriginal peoples. In 2005, we created an Aboriginal human resources strategy that commits to providing equal access to employment, and helps management and staff understand the cultural diversity of Aboriginal peoples within the Company’s operations. It also encourages Aboriginal students to graduate from high school and continue with post-secondary education, and supports the development of educational programs that enable Aboriginals to meet Petro-Canada’s employment and business requirements.


    2005 PROGRESS

    • Achieved total Canadian greenhouse gas (GHG) emission levels 3% below 2004 levels in 2005 primarily due to closing the Oakville refinery.

    • Invested $856 million in environmental programs, including $526 million to complete low-sulphur diesel projects in our downstream operations;

    • Reduced environmental exceedances by 38% in 2005, down from 45 in 2004 to 28 in 2005;

    • Reduced flaring significantly in each business unit in 2005, compared to 2004;

    2006 GOALS

    • Strengthen internal controls and data management practices for GHGs and Primary Air Pollutants;

    • Develop an environmental information management strategy;

    • Broaden the application of Life-Cycle Value Assessment tools;

    • Develop a corporate water management strategy

    Our Report to the Community outlines our progress in implementing Global Compact Principles 7, 8 and 9 through the Environment section. The report details a number of areas in which we have made progress or initiated projects that have reduced our environmental impact and footprint.

    Making decisions based on Life-Cycle Value Assessment

    Life-Cycle Value Assessment (LCVA) is a business analysis and decision-making methodology that helps employees, project teams and business units identify, examine and balance the social, environmental and financial implications of projects and product purchases. The LCVA is a key method by which Petro-Canada’s employees integrate and balance social, environmental and business decisions. The tool is based on the premise that good information enables better decisions. LCVA covers the full life-cycle of a new or existing project, from upfront planning and material and equipment selection, through to final decommissioning and reclamation. Through the process, new ideas and opportunities emerge to improve technical designs, to reduce environmental pollutants and other impacts and to increase efficiencies.

    Environmentally sensitive products

    Petro-Canada’s lubricant facility in Mississauga offers next generation, pro-environment product choices. Bio 40 Hydraulic Fluid is a combination of canola oil and performance additives designed for year-round use in environmentally sensitive hydraulic systems.

    Independent Cornell University studies confirmed the PureSpray line of horticultural spray oils performed 44% better than some competitive spray oils, reduced pest damage by 95% and yielded more sizeable crops for the grower. For the growing importance of oil sands mining, Petro-Canada’s open gear lubricants for large mining shovels, excavators and draglines are produced from a solvent-free formulation that will not harm the environment.

    We also support the ongoing development of renewable power sources by offering lowest total cost solutions with Harnex Wind Turbine Gear Oils, Luminol Electrical Insulating Fluid, Sentron Natural Gas Engine Oils and Turboflo Premium Turbine Fluids.

    Petro-Canada continues to support Iogen Energy Canada in Ottawa, which is pursuing a proprietary process to convert biomass (cellulose) into ethanol. Petro-Canada maintains an investor relationship with Iogen and contributes to the funding of long-term research and development.

    Water Management

    Petro-Canada completed a project in Edmonton that provides water for the Company’s Strathcona County refinery using recycled water from the City of Edmonton’s Gold Bar waste water treatment plant. By doing this, Petro-Canada will reuse five million litres of recycled water per day, avoiding the need to draw as much fresh water from the North Saskatchewan River.

    Supporting cleaner drinking water worldwide

    The Report to the Community outlines Petro-Canada’s Association with the Centre for Affordable Water and Sanitation Technology (CAWST) and its Water for Life program – an initiative started in 2002 to providing clean drinking water using a simple, made-in-Canada filtration system. At year-end 2005, CAWST had provided clean drinking water to nearly half a million people in 36 countries.


    2005 PROGRESS

    • Revised the Policy for Prevention of Improper Payments and completed employee training;

    • Came second in the oil and gas sector according to the Globe & Mail corporate social responsibility ranking index and were recognized for meeting the criteria of the Jantzi Social Index.

    2006 GOALS

    • Conduct additional business integrity training related to compliance with U.S. anticorruption and antitrust laws;

    • Strengthen employee, contractor and supplier understanding of Code of Business Conduct expectations; and

    Ensuring Compliance with our Code of Business Conduct

    Petro-Canada’s Code of Business Conduct (the Code guides all directors, employees and contractors in the Company’s standards of ethical behavior. Each is required to review, understand and agree to comply with the Code. Training programs in 2005 included the continuation of Petro-Canada’s “The Way We Do Business; A Workshop on Business Integrity”. Through the year, more than 120 employees joined more than 380 employees who completed the course in 2004. Work is underway to strengthen training in a way that ensures a thorough understanding of the obligations and expectations set out in the Code.

    Petro-Canada has had a chief compliance officer since November 2003. This officer is responsible for advising employees on how to work without violating provisions of global legislation that deals with corruption and on the broader expectations outlined in the Code. When discussion causes discomfort, employees are advised to report business conduct situations through Petro-Canada’s confidential ethics hotline, which is available worldwide 24 hours a day, seven days a week. This hotline, introduced in 2004, is operated by an independent firm. Calls and concerns are reported monthly to Petro-Canada’s senior officers.

    In 2005, Petro Canada revised the Policy for the Prevention of Improper Payments (PPIP), which provides mandatory guidelines on certain activities and conduct to meet internal ethical standards, and which may fall under the scope of international legislation relating to anti-bribery and corruption including, for example, the U.S. Foreign Corrupt Practices Act and the Organization for Economic Co-operation and Development Anti Bribery Convention. Throughout 2004 and 2005, the Company’s Chief Compliance Officer implemented individual and group seminars relating to PPIP and similar legislation. In 2005, more than 300 additional employees completed an online course that outlines their obligations related to the U.S. Foreign Corrupt Practices Act and PPIP. An online training course related to compliance with U.S, antitrust laws was developed and is being piloted for training of designated employees during 2006.

Principles covered
  • Principle 1 - Businesses should support and respect the protection of internationally proclaimed human rights
  • Principle 2 - Make sure that they are not complicit in human rights abuses
  • Principle 3 - Businesses should uphold freedom of association & effective recognition of the right to collective bargaining
  • Principle 4 - The elimination of all forms of forced and compulsory labour
  • Principle 5 - The effective abolition of child labour
  • Principle 6 - Eliminate discrimination in respect of employment and occupation
  • Principle 7 - Businesses should support a precautionary approach to environmental challenges
  • Principle 8 - Undertake initiatives to promote greater environmental responsibility
  • Principle 9 - Encourage the development and diffusion of environmentally friendly technologies
  • Principle 10 - Businesses should work against all forms of corruption, including extortion and bribery
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