Our commitment to building trust through
equality and transparency means living our
values, conducting ourselves in an ethical
and compliant manner, operating withing a
framework of robust corporate governance,
and maintaining positive partnerships and
Robust corporate governance, strict compliance and an ethical culture and practice are the fundamentals of any successful business. At Tullow, we aim to build positive relationships and partnerships across our entire spectrum of activities and interactions, engaging honestly, openly and transparently on a foundation of trust.
Trust starts with establishing and fostering dependable governance and compliance practices and building a culture in which everyone is invested in doing the right thing.
Tullow’s Board of Directors is keenly involved in providing oversight of Tullow’s overall sustainability strategy and in particular, the implementation of our Shared Prosperity objectives. Sustainability-related topics are tabled on the agenda at every Board meeting, at which the Board receives updates on progress against Tullow’s sustainability strategy and targets, approves new targets and reviews overall performance. The Board takes part in an annual two-day, off-site review, to which external experts are invited to present market and ESG trends and
regulatory updates. In 2022, for example, the Board heard from a leading financial institution on ESG trends and disclosure requirements. During 2022, Tullow’s Board of Directors continued to track our progress towards our Net Zero commitments and approve developments relating to our proposed nature‑based solutions for offsetting hard to abate greenhouse gas emissions. Tullow’s Board reviews and approves Tullow’s sustainability‑related public disclosures, including our annual Sustainability Report and Climate Resilience Report in line with the Task Force on Climate-related Financial Disclosures (TCFD) framework.
The Board of Directors maintains four Committees, composed of non-executive directors, which assist the Board in meeting its responsibilities. These are:
- Remuneration Committee.
- Nominations Committee.
- Audit Committee.
- Safety & Sustainability Committee.
For more details of our governance structure and Board Committee charters and membership, please see: www.tullowoil.com/about-us/ corporate-governance.
Every three years, the Board of Directors undergoes a performance evaluation conducted with the assistance of an external facilitator.
The last evaluation was conducted in November 2022. Details of key outcomes and recommendations can be found in the Nominations Committee Report, within our Annual Report and Accounts, p. 69 & p. 70.
Safety and Sustainability Committee: A key mechanism for supporting the Board of Directors’ oversight of sustainability matters is the Safety and Sustainability Committee. This Committee, established in 2019, aims to enhance the Board’s engagement in matters related to sustainability by conducting in-depth reviews of strategically important issues that are material for Tullow and providing guidance for the Board on these matters. The Committee presents an annual report to the Board of Directors covering ESG trends and regulatory developments, disclosure requirements and peer benchmarking.
In 2022, the Safety & Sustainability Committee was deeply involved in our review of our operations and maintenance (O&M) at our Jubilee FSPO in light of our plan to transfer O&M from MODEC to our in-house team. This required detailed planning and establishment of performance metrics to evaluate the success of the transition over time. The Safety and Sustainability Committee oversaw planning and transition arrangements, including presentation to the full Board of Directors for review and approval.
Our Code of Ethical Conduct (CoEC) governs the way we work and conveys a clear message to Tullow employees and external stakeholders about our approach to ethical standards, compliance and upholding human rights. The CoEC reflects our zero tolerance for bribery, corruption and other forms of financial crime as well as our position and controls related to human rights, lobbying and advocacy, preventing facilitation of tax evasion, antislavery and data privacy. All individuals and organisations involved in Tullow’s extended supply chain and operations are contractually required to meet the standards of our CoEC, and we conduct risk based third-party due diligence to assess risks related to ownership structure, anti-bribery and corruption, sanctions, trade restrictions, human rights and labour conditions. The CoEC is reviewed periodically to reflect updates in our business and expectations of our stakeholders.
In 2022, 100% of Tullow colleagues completed our mandatory annual online CoEC training and signed an acknowledgement of their understanding and acceptance. Participation in the CoEC training is strictly tracked to ensure participation by the entire workforce.
We also ensure our business partners and suppliers are familiar with our CoEC and are committed, as we are, to upholding its provisions. We provide annual training for key suppliers to ensure our expectations are clear.
Speaking up: We urge our colleagues to speak up if they observe behaviour which they believe is not in alignment with our CoEC. We encourage colleagues to report such matters without fear of reprisal, anonymously if they wish. Our independent, external integrity reporting mechanism is available 24/7 in several languages. All reported cases are reviewed and investigated by our Ethics & Compliance (E&C) team, with regular updates provided to the Audit Committee and Board of Directors. In 2022, we intensified communications to raise awareness and encourage colleagues to speak up if they see a need. To facilitate unconstrained use of the reporting mechanism, we adopted a new reporting platform which offers improved functionality and easier access for users. At the same time, the new platform offers benefits for improved investigation of reported concerns and auditable progression of investigations. In 2022, the overall mix of reported concerns were similar to those in prior years and no major disciplinary actions were required.
Risk management and due diligence: Following the ethics and compliance risk assessment across our operations and extended supply chain, conducted in 2021 by an external advisory firm, in 2022 we have progressed addressing the recommendations resulting from this assessment, While there were no major or significant nonconformances, opportunities for improvement were identified and these are being progressively addressed. In 2022, we updated due diligence protocols and standards and introduced new procedures relating to conflict of interests, which provide greater detail and guidance for employees on different types of conflict of interest, the responsibilities of each employee to act in accordance with our procedures and how to receive guidance if required. Effective from 2023, every employee will be required to submit an annual Conflict of Interest Declaration.
Tullow operates in many countries and our activities have the potential to positively or negatively impact communities and workers - including in our supply chains - and the environment. Our aim is to do no harm, remediate any negative impacts and show employees, communities, investors and other stakeholders that we operate ethically and responsibly.
Tullow’s Human Rights Policy is aligned with the provisions established in leading international instruments such as the Universal Declaration of Human Rights, the UN Guiding Principles on Business and Human Rights, the Voluntary Principles on Security and Human Rights (VPSHR) and the and the ILO Declaration on Fundamental Principles and Rights at Work and related ILO conventions. We are committed to upholding human rights throughout our operations through ongoing monitoring and due diligence prior to entering a new host country and during our presence on a continuous basis.
During 2022, we advanced human rights due diligence and awareness, including:
- Formed an internal cross-functional human rights working group to collaborate, monitor and manage human rights issues from diverse perspectives. The group includes members from legal, supply chain, human resources, EHS, ethics and compliance, internal audit and sustainability management functions.
- Conducted an internal audit of our modern slavery processes, which identified areas for improvement including renewed focus on monitoring and managing modern slavery in our supply chain. See also our 2023 Modern Slavery Act Transparency Statement.
- Piloted worker welfare training modules in conjunction with the International Petroleum Industry Environmental Conservation Association (IPIECA) with 14 people from across Tullow. The feedback from our colleagues was that the training was informative and useful for identifying and addressing worker welfare issues.
- Delivered “Introduction to the UN Guiding Principles on Business and Human Rights” training to all Tullow colleagues and contracted employees, achieving 100% participation.
- Raised awareness internally on Tullow’s policy, responsibilities and commitments to upholding human rights through a series of intranet articles and ethics and compliance spotlights.
- Completed educational sessions on ethics and compliance, which included human rights for local companies in Guyana, with 129 participants from 111 companies participating in 2022.
In 2023, we will further invest in human rights assessment and controls with a focus on ensuring appropriate allocation of resources to human rights and ongoing training, including rolling out the IPIECA worker welfare online training to more employees.
Our business relies upon strong defences against information security threats which we identify as a key risk to our business continuity. Similarly, we are committed to protecting the privacy of all those who entrust us with their personal information, both through robust information security controls and detailed privacy procedures, authorisation hierarchies and training.
Our information security strategy comprises both information technology and digital security and is aligned to ISO 27001 Information Security Management Standard and The National Institute of Standards and Technology (NIST) framework. We apply industry best practice, supported by ongoing intelligence and risk management through our Enterprise Risk Register with controls which are based on NIST recommendations. We maintain mandatory e-learning on information security and data privacy, including training on the General Data Protection Regulation (GDPR), for every Tullow employee and contractors at our sites, using our proprietary Information Security Standard Policy and Acceptable Computer Use Policy, among others. Each month, we conduct a monthly threat simulation exercise and review learning outcomes.
In 2022, we continued to enhance our systems and provide an active response to information security situations as they arose. Specifically, we worked closely with teams across the organisation to support the establishment of enhanced information security controls at our Jubilee FPSO following the integration of operations & management to our in‑house teams.
As a result of our ongoing efforts to protect the information security of our business and the privacy of all those who engage with Tullow, our company has not been subject to any information or privacy breaches in the past year.
In line with our published Global Tax Strategy, Tullow takes a responsible approach to taxation.
We do not take an aggressive approach to the interpretation of tax legislation for tax planning purposes, nor do we use artificial schemes or tax havens to reduce the tax liabilities of the Group. We aim to pay our taxes on time in the jurisdictions in which our activities are undertaken in accordance with the domestic tax law or applicable production sharing agreement. When we enter new territories, our primary objective is to achieve clarity and certainty regarding the application of taxation rules through engagement with the authorities, so that we can ensure our compliance. We engage with governments on the development of tax laws either directly or through trade associations and similar bodies within the guidelines of our Code of Ethical Conduct. We conduct transactions between Tullow Group companies on an arm’s length basis in accordance with the Organisation for Economic Co-operation and Development Guidelines. The pricing of such transactions is based on fair market terms, reflects the commercial nature of the services provided, and is subject to review and audit by tax authorities in the jurisdictions in which we operate. Tullow’s tax strategy is approved by the Board of Directors and reviewed annually by the Audit Committee.
In 2022, we engaged a leading financial accounting firm to review our tax strategy and recommend opportunities for improved practice and disclosure. We discussed the outcomes of this review, which benchmarked Tullow against the tax disclosures of FTSE100 companies, in a workshop involving our Chief Financial Officer and other members of our financial and accounting teams. We continue to consider opportunities to improve our tax disclosures based on the learning gained from this valuable exercise.
Tullow believes that public disclosure about our business and actions serves a broader agenda of openness to dialogue and builds accountability, credibility and trust. Transparency regarding payments to governments is an important way to promote honesty in our industry, mitigate corruption and support inclusive development. Tullow has been a corporate supporter of the Extractive Industries Transparency Initiative (EITI) since 2011, and we remain committed to promoting transparent disclosure of payments to government. Our annual Payments to Governments Report provides details of all mandatory and voluntary tax payments.
Our payments to governments, including payments in kind, amounted to $468 million in 2022 (2021: $234 million). Total payments to all major stakeholder groups including suppliers and communities, as well as governments, brought our total socioeconomic contribution to $645 million (2021: $445 million). In addition to payments to governments, this included $173 million spent with local suppliers and $4 million in discretionary spend on social projects. Our total payments made to the Ghanaian Government in 2022 amounted to $341 million (2021: $172 million).