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Creating shared prosperity
Running our business in a way that makes a positive and lasting contribution to economic and social development.
Delivering returns for shareholders and providers of capital
Managing our business ethically and with integrity
Engaging with and responding to all our stakeholders
Environment, Health and Safety
Keeping our people safe and minimising our environmental footprint
Being a rewarding, challenging and great place to work
Sustainable supply chain
Adding value and protecting the business
Creating real opportunities for local people and enterprise development
Managing our social footprint and contributing to host country development
The creating shared prosperity element of our business model brings together eight areas of focus to ensure we have a positive and enduring legacy where we operate. It also helps to establish clear links between the need to both manage our impacts and achieve our strategic priorities.
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Our vision is to be the leading global independent oil and gas company. Our current focus is on exploration-led growth in Africa and South America.
Our strategic objective is to create substantial returns for shareholders. It is important first and foremost for us to be a successful and profitable company. That is fundamental, in our view, to creating shared prosperity.
However, this strategic objective is set within a context of balanced and sustainable long-term growth, which reflects our approach to doing business.
We have both operational and corporate responsibility priorities to ensure that we not only deliver our business plans but that we do so in a way that is good for our stakeholders and reduces our impact on the environment.
Oil and gas revenues can be a significant driver of economic and social development, particularly in countries that are resource dependent or have an emerging oil industry. This year we are publishing details of our economic contribution, including payments to governments, in line with our commitment to revenue transparency and accountability. In 2012, governments received $573 million in taxes and other payments and over three million barrels of oil.
We have zero tolerance of bribery and corruption in our business. In 2012, over 1,100 people or 60% of our total workforce, including the Tullow Board, participated in Code of Business Conduct awareness training. There were 18 reports to our whistle blowing telephone line leading to 16 investigations. As a result two employees and 12 contract staff left Tullow.
Stakeholder engagement takes place across the business, from local communities through to national and international stakeholder engagement, led by our Chairman and Executive Directors. It helps us to manage what are often complex political, social and environmental challenges. It informs our understanding of which issues are material to our business and how we address these in terms of our business activity. In 2012, over 200 stakeholders were interviewed in one of the most comprehensive stakeholder engagement programmes undertaken to date by Tullow in Ghana.
We manage our EHS performance by measuring a mix of nine leading and lagging indicators in an EHS scorecard which is agreed annually with the Tullow Board. This EHS scorecard is one of the components of the performance related elements of Directors' remuneration. In 2012, we achieved a score of 22 out of a possible 27 for EHS, which represents a strong overall performance, but one we continue to work to improve upon.
A new EHS Board sub-committee has been formed to reflect how material EHS management and performance are to our business. The committee will focus on personal and process safety, occupational health and the environment and will advise the Board on EHS policies, standards, performance and regulatory and technical developments related to EHS management.
Employing local nationals is a core pillar of how we help to build capacity for a nascent oil industry in host countries. Known as localisation, this also creates a diverse team of committed and motivated employees, who become advocates and ambassadors for Tullow and the industry. This year, in delivering our localisation strategy, we increased the proportion of locals working in Uganda and Ghana to 88% and 86% respectively.
Competitive remuneration is an important aspect of recruiting and retaining our employees. During 2012 we participated in 16 global surveys, benchmarking our employee compensation. We commissioned local surveys in Ghana, Kenya, Ethiopia and Uganda. We measure our staff turnover rate annually and it is one of our main non-financial KPIs. In 2012, our total workforce, including permanent and contract staff, grew 15% to 1,778 people. Staff turnover was 2.9%.
Over 80% or $1.6 billion of our 2012 capital expenditure was invested in our African operations. Supply Chain Management is at the heart of implementing our capital expenditure programme. It is also integral to achieving high EHS standards, maximising local content opportunities and meeting our regulatory obligations on anti-bribery and corruption.
In 2012, we spent $145 million with suppliers which are majority owned by local nationals. Local suppliers sometimes need extra support and skills transfer to enable them to achieve supplier pre-qualification and compete for business opportunities. In 2012 we held 'closing-the-gap' seminars in Uganda and Ghana to help local companies understand the requirements of the oil and gas industry. We also funded the opening of an Enterprise Centre in Uganda to support small to medium sized businesses.
We recognise that our growing portfolio and new areas of operation require us to engage with our stakeholders more effectively, to successfully manage our social impacts. This helps us to manage both our 'above ground' risks and our relationships with host governments, local communities and civil society organisations. In 2012, we enhanced our social performance capability and we will start the process of developing a new Tullow social performance standard in 2013.
As part of our social impact management, we invest in projects mainly in the areas of capacity building through education. In 2012, we invested $19.9 million in discretionary projects, a 72% increase on 2011. This included over 90 international scholarships in oil and gas related studies for students from Africa.
© 2013 Tullow Oil plc