Sustainable Development Awareness Session By Dr Yasmeen Al

Sustainable Development Awareness Session By Dr. Yasmeen Al Lawati

Objectives 1. 2. 3. 4. What is Sustainable Development? Why does it matter? Why are we committed to contributing? What does it mean in practice & How are we embedding this commitment into our operations? PDO – SD Awareness

Global issues - Population Growth Fact § § § World population is expected to double by 2050 Currently more than 80% of world’s population live in developing countries World’s economic output has more than doubled in the past 25 years Challenge § Enabling economic growth with minimal environmental and related impacts. Implications for business § Adopt cleaner and affordable technologies § Develop renewable and recyclable goods PDO – SD Awareness

Distribution of Opportunity 12 would produce half the income 36 would lack basic political rights and civil liberties 2 would have a further college education 100 PEOPLE 20 would not have access to clean water 44 would not have access to proper sanitation, electricity or modern cooking fuels 20 would suffer from malnutrition 23 over the age of 15 would be unable to read or write PDO – SD Awareness

Consumption Levels USA -10 acres to supply the average person’s basic needs. The Netherlands - 5 acres If the entire world lived on a footprint equivalent to the average person in the US it would take five planet Earths to support the present world population. Ethiopia -1 acre PDO – SD Awareness

Sustainable Development Barometer 1. Can you define ‘Sustainable Development’? (so your neighbours understand) ‘Sustainable what? ’ ‘Heard of it but not really sure’ ‘Think I more or less get the concept, but not in words fit for the neighbours’ ‘Sure it is…. ’ 2. When you hear the term does it make you…. Blink in incomprehension? Squirm in discomfort Sit up and listen Stand ready for action 3. Why have companies like Shell committed to contribute to SD? ‘Have lost their minds, their nerve or both’ ‘Spin to help their reputations’ ‘To live by their core corporate values’ ‘To use these values to create business value for their shareholders’ PDO – SD Awareness

What is Sustainable Development? “ The development that meets the needs of the present generation without compromising the ability of future generations to meet their own needs ” PDO – SD Awareness

Components of SD-Conventional People Planet § Protect the environment § Manage resources efficiently § Respect & safeguard people § Work with stakeholders SD Profit § Generate Profitability § Benefit communities PDO – SD Awareness

The Sustainable Development Lens PDO – SD Awareness

PDO Mission To explore and develop oil & gas in a sustainable manner to the benefit of all stakeholders We § Incorporate SD in strategies, plans and decision-making processes § Contribute to SD in partnership with the Government’s authorities § Involve our employees and increase SD awareness among our staff and contractors § Report externally on our SD performance PDO – SD Awareness

Move to an ‘engage me’ world High Trend “Trust me” “Engage me” “Tell me” Trust “Help me understand” “Show me” Low Transparency High As trust diminishes, the demand for partnering with stakeholders, for open reporting and external assurance increases

Stakeholder Maps Customers Company Society Government Employees Government Shareholders Company Employees Shareholders NGOs OLD Customers Society NGOs NEW Maps are representational only - not comprehensive PDO – SD Awareness

Stakeholder Engagement IS NOT IS Deciding, announcing, defending Developing options, discussing, deciding Dealing only in facts Taking account of feelings, values and perceptions Assuming win/lose outcomes Searching for win/win results & ways to add value for all parties A one-off exercise at start/end of project An iterative process Secretive, information on a `need to know’ basis Open and transparent Public relations Public involvement PDO – SD Awareness

Managing Expectations Public Expectation High Risk Expectations Business reality Low Time PDO – SD Awareness

Sustainable Development … Is not… Is… û a new initiative P enshrined in our Business û a cost or burden to our û û business an “add-on “ a trade off between economic and environmental/social issues just a PR exercise handing over decision-making responsibility to stakeholders P P Principles a potential source of value and competitive edge an integral part of our approach to business – a way of thinking enables WIN-WIN solutions which generate value for both company and society open dialogue with stakeholders making better decisions by better understanding stakeholders’ needs PDO – SD Awareness

SD in Action …. People § Health & Safety Programmes § Agricultural projects - Rahab Farms § Education and training § Omanisation (PDO currently at 80%) § Potable water supply to communities § Business and HSE training for LCCs PDO – SD Awareness

SD in Action. …. Planet § ISO-14001 accreditation § 90% use of associated gas; Continuous Flaring out by 2008 § White Oryx Reserve (UNESCO World Heritage Site) § Phasing out of CFC / Halons ahead of Montreal Protocol § “Greening the Desert” - Reed Beds § 1 st & 2 nd generation Solar Car developed at SQU PDO – SD Awareness

SD in Action …. Profit § E-business: savings § On-line bidding § Infrastructure improvement projects: roads, electricity, etc. § Local Community Contractors program (LCC) § EOR projects § Operating Model Review 2004 & beyond. PDO – SD Awareness

Sustainable Development is. . . ü Balance long term & short term ü Integration Profits, Planet & People ü Engagement with stakeholders & ü Building Partnership PDO – SD Awareness

Integrated Impact Assessment (IIA) Guidelines – GU 447 Ø Assessing environmental, social and health potential impacts Ø IIA Process linked to VAR and Project Cycle Ø Currently, it is standardised for all projects Ø Examples are Gas projects, EOR projects PDO – SD Awareness

Why IIA Guideline? § Measures to mitigate projects impacts § License to operate § Means to reduce the overall business cost § Complimenting the legislative role of government § Means to contribute to SD of Oil & Gas in Oman § Meets international standards PDO – SD Awareness

IIA Process Flowchart/Deliverables Initial Screening Checklist (IIIC) VAR 1 Initial Impact Evaluation Report VAR 2 Preliminary Impact Assessment Report VAR 3 Final IIA Report/ SD/SP Program Report VAR 4 VAR 5 Impact Management & Monitoring Plan IMMP/SD/SP PDO – SD Awareness

Working Example SD/Social Performance Project PDO – SD Awareness

48” Gas Loop Line Construction of a 48” pipeline parallel to the existing pipeline starting Saih Nihayda to Al-Kamil; total distance of 264 km The pipeline crosses five Wilayats; Adam, Mudhaibi, Al-Qabil, Bidiyah and Al-Kamil. (Excluding Adam, all Wilayats are outside PDO concession area) 12 communities located within a 1 -2 km from the Ro. W; approximately 500 people; livestock camps in Wadis throughout the project area No basic infrastructure and/or services (education, health, community resources) in the communities PDO – SD Awareness

Opportunity Realisation Framework The identification, selection and implementation process for strategic social investment (SSI) projects follows PDO’s opportunity realisation framework Opportunities Identify & Assess (Baseline data collection) Select (rank) Define (Develop business Execute (Implementation) Operate (Project Complete) plans) PDO – SD Awareness

Select Phase: 1 st Stage Ranking The ranking exercise follows PDO Guideline “Social Performance Project Evaluation Guide” (GU – 468) Project Ranking Criteria: 1. Project serves wide population 2. Project self-sustaining 3. Project does not create long-term dependency; clear PDO exit strategy PDO – SD Awareness

Select Phase: Ranking Exercise Results 27 potential social project proposals ranked § § § 4 Quick wins; 7 proceeded to 2 nd stage ranking; (3 potential projects selected); 3 for later implementation; 11 rejected; and 2 not ranked Focus Areas: Health, Quality of Life, Sustainable Livelihoods, Local Capacity Building PDO – SD Awareness

Basic Infrastructure Support–al Qabil Objective: Support basic infrastructure requirements to improve living standards of households in project-effected communities Description: One-time monetary donation to the Wali to (partially) fund an infrastructure project for identified households Beneficiaries: Households in Al Khorais, Al Sarhat, Shajarah – Al Qabil Hailat Raei Community Benefits: Improved quality of life Business Benefits: Social licence to operate, enhanced reputation, improved social performance, work in partnership with provincial governments and alignment with government development plans Exit Date: Q 2 2005 Cost: $ 260 000 PDO – SD Awareness

SD Structure in PDO Work together on common PDO + Gov. Network projects MDC Steering Committee Develop strategy & define what is required Assess Assets / Project Teams Aim to enhance trust Communicate strategy And requirements Social Project selection Select, define & rank the SP Projects Communicate required Actions / activities Benchmarking PDO + SD Peers Network (Shell EP, OLNG, SQU, OPAL) Learn on best practices Feedback Results Assets/Project Teams Execute actions PDO – SD Awareness

SD Self Assessment Workshop : S or at Full SD integration into all aspects of the PDO business (Infuse / SD in the Heart) ic In d ad i ng 2006 Le 4. 0 3. 9 3. 8 3. 7 3. 6 3. 5 3. 4 3. 3 3. 2 3. 1 3. 0 2. 9 2. 8 2. 7 2. 6 2. 5 2. 4 2. 3 2. 2 2. 1 2. 0 1. 9 AQ SAQ 2004 2003 2001/ 2002 SD is considered in some PDO business (Weave / Head to Heart) SD perceived as additional and sometimes requiring duplicating efforts (Bolt On / SD in the Head) SD General Awareness among Staff (SD on Paper) PDO – SD Awareness

SD team 2005 Plan 1. 2. 3. 4. 5. Social GIS for the concession area SD Awareness & Knowledge Campaign across PDO - Ongoing A common SD pot for all SP projects Develop Framework to extend IIAs from Projects to clusters SD workshop involving key project staff PDO – SD Awareness

Need more info… Visit PDO SD Web Site OR Contact MSE 6 Team PDO – SD Awareness

……. . & the journey continues PDO – SD Awareness