OUR VALUES
Our values provide guidance throughout the company on how we conduct our business. All representatives of the company are required to operate in accordance with our values.
- Integrity: We are committed to the highest level of integrity in all of our relationships.
- People: We are committed to attracting, retaining and energizing the very best people by investing in their professional development and providing them with challenging and rewarding opportunities for personal growth.
- Performance: We are committed to a culture of performance that both demands and rewards outstanding results throughout our business.
- Value Creation: We are committed to creating shareholder value based on sustained financial performance and long term profitable growth.
- Social Responsibility: We are committed to meeting the highest standards of corporate citizenship by protecting the health and safety of our employees, by safeguarding the environment, and by creating a long lasting, positive impact on the communities where we do business.
- Independent Spirit: We are committed to preserving the special qualities and unique personality that have made us a successful independent enterprise.
ENVIRONMENT, HEALTH, SAFETY AND SOCIAL RESPONSIBILITY MANAGEMENT
Hess Corporation has implemented a values based, Environment, Health, Safety and Social Responsibility (EHS & SR) strategy. This strategy is guided by the company’s policies and by management systems and programs that work to protect our employees, customers and host communities.
We are committed to continually improving our EHS & SR performance. Since performance must be measured to be meaningful we have well developed performance objectives. Some of these are “end of process” targets, focusing on the results of our actions. Others are “in process” objectives which focus on how well we are performing the actions themselves.
We are committed to continually improving our EHS & SR performance. Since performance must be measured to be meaningful we have well developed performance objectives. Some of these are “end of process” targets, focusing on the results of our actions. Others are “in process” objectives which focus on how well we are performing the actions themselves.
EHS & SR Management System
Our EHS & SR management system ensures that there is a systemic, reliable process for identifying risks and achieving EHS & SR objectives, including continual improvement. Our management system is based on recognized international standards that promote consistency, adherence to policies, and continued improvement in performance. In 2006, 12% of our total oil production (gross operated) and throughput was from ISO14001 certified operations.
EHS & SR is managed as a critical business activity. Each business has primary accountability for performance and results. The business organization is supported by integrating the technical resources it needs at the facility level, with guidance from the corporate organization.
EHS & SR is managed as a critical business activity. Each business has primary accountability for performance and results. The business organization is supported by integrating the technical resources it needs at the facility level, with guidance from the corporate organization.
Audit
The role of our corporate audit program is to ensure that our operations consistently adhere to company policy and objectives, comply with regulatory requirements and, as appropriate, implement best in class industry standards.
Communication & Collaboration
The company maintains an intranet web-site for employees that provides updates on regulatory information and issue oriented training programs, ranging from office ergonomics to a general overview of the hazards associated with hydrogen sulfide. Injury and illness statistics tracking and goals are also included.
We have established internal networks to help guide the company on issues such as safety, corporate social responsibility and greenhouse gas emissions. Since much can be learned from industry peers, other companies, and external groups, we also participate in various organizations such as the International Petroleum Industry Environmental Conservation Association, the International Association of Oil and Gas Producers, the National Petrochemicals and Refiners Association and the National Safety Council.
We have established internal networks to help guide the company on issues such as safety, corporate social responsibility and greenhouse gas emissions. Since much can be learned from industry peers, other companies, and external groups, we also participate in various organizations such as the International Petroleum Industry Environmental Conservation Association, the International Association of Oil and Gas Producers, the National Petrochemicals and Refiners Association and the National Safety Council.
STAKEHOLDER ENGAGEMENT
We continue to engage in discussions with both internal and external stakeholders to maintain and improve key relationships and reinforce transparency in our industry.
Our key stakeholders include:
Our key stakeholders include:
- Shareholders
- Customers
- Governments and communities
- Business partners and suppliers
- Employees
We pursue many initiatives to keep shareholders and the investment community informed and to attract new investment. Each quarter, we host a conference call providing further clarity on our earnings press release. The calls are open to the public. Transcripts are made available on our website within 24 hours. All investor presentations are posted on 
. In addition we participate in communications and surveys with numerous socially responsible investment groups. In 2006 we responded to the Carbon Disclosure Project Survey.
Through industry associations we participate in meetings with various stakeholder groups and non-governmental organizations. In order to better address stakeholder concerns, our businesses implement locally based Social Responsibility programs to identify issues as early as possible in the business process so that they can be addressed and resourced appropriately.
Our EHS & SR policies require that we regularly communicate with the communities where we operate to develop and maintain a mutual understanding of goals and expectations.
. In addition we participate in communications and surveys with numerous socially responsible investment groups. In 2006 we responded to the Carbon Disclosure Project Survey. Through industry associations we participate in meetings with various stakeholder groups and non-governmental organizations. In order to better address stakeholder concerns, our businesses implement locally based Social Responsibility programs to identify issues as early as possible in the business process so that they can be addressed and resourced appropriately.
Our EHS & SR policies require that we regularly communicate with the communities where we operate to develop and maintain a mutual understanding of goals and expectations.
Ujung Pangkah Field in Indonesia. Community consultations have been maintained throughout the development of this project.
We initiate Environmental and Social Impact Assessments (ESIA) in the early stages of projects to evaluate how our business plans may affect a location. Integral to these assessments is dialogue with local, regional and national stakeholders. We work with these representatives on an ongoing basis in order to produce an ESIA, which provides us with a baseline from which to start project development and an assessment of the impacts a project may have.
This program typically begins during the initial project scoping stages to determine the best options for project planning. Consultation allows concerns regarding the potential impacts to be recognized early in the project planning process. In 2006 ESIA were underway for development projects in Algeria, Libya, the United Kingdom and Denmark.
In addition to the ESIA consultations, we have also conducted significant informal engagement to keep local communities fully apprised of our plans as they evolve. Consultation initiated during the formal ESIA process has been maintained through the construction phases of our projects at Phu Horm in Thailand and Ujung Pangkah in Indonesia. This allows feedback into the relevant management programs and facilitates early mitigation of issues.
The company has mechanisms and techniques to raise project awareness that allow for feedback including: establishing information offices in the field, distributing information brochures, conducting meetings with potentially affected communities, conducting study tours with focus groups, distributing posters, broadcasting taped messages, ad hoc meetings, and feedback forms. This information exchange provides us with valuable local knowledge and help in the identification of a community's main concerns.
We also maintain ongoing communication with individuals and relevant representative associations which may be affected by our operation.
VOLUNTARY COMMITMENTS
Hess Corporation has endorsed four international voluntary initiatives designed to protect the environment, promote universal human rights and encourage financial transparency . Hess is one of only six oil and gas companies worldwide, and the only U.S. energy company, to endorse these four initiatives:
. Hess is one of only six oil and gas companies worldwide, and the only U.S. energy company, to endorse these four initiatives: - United Nations Universal Declaration of Human Rights Comprising 30 articles covering fundamental freedoms ranging from the right to nationality to the right to equality before the law, the Universal Declaration of Human Rights was established in 1948 by the United Nations (UN) General Assembly. It serves as the international standard and codification of human rights norms and has been endorsed by 148 countries.
- United Nations Global Compact We are proud to be the first U.S. oil and gas signatory to the UN Global Compact, an international voluntary agreement which addresses the private sector’s role in promoting respect for human rights, labor, the environment and financial transparency.
- Voluntary Principles on Security and Human Rights We endorse the U.S. State Department’s Voluntary Principles on Security and Human Rights, a voluntary guide for companies to assure the safety and security of their operations while respecting human rights and fundamental freedoms. It covers issues such as the potential for violence, conflict analysis, equipment transfers, security arrangements, responses to human rights abuses, and interactions between companies and private security forces.
- Extractive Industries Transparency Initiative This initiative is discussed in the Transparency section of this report.
Looking forward, our objective is to better incorporate these commitments into our work processes and in conjunction with our social responsibility strategy make a sustainable, positive impact wherever we work.
CORPORATE GOVERNANCE
Our commitment is to conduct business in accordance with the highest ethical standards. We support the goals of the recent Securities and Exchange Commission (SEC) and New York Stock Exchange (NYSE) corporate governance initiatives to achieve greater transparency for investors.
Board of Directors
Our Board currently consists of thirteen members, nine of whom are independent. There are currently eight regular meetings per year. The Board has three principal committees: the Audit Committee, the Compensation and Management Development Committee, and the Corporate Governance and Nominating Committee. Each of the members of these Committees is independent under NYSE and SEC rules. Each committee has a written charter that sets forth its purpose and responsibilities .
. Audit Committee
The Audit Committee's purpose is to fulfill the Board's oversight responsibility relating to the company's financial statements, financial reporting practices, systems of internal accounting and financial and disclosure controls, internal audit function, the retention and oversight of independent auditors and oversight of the company's environment, health, safety and social responsibility programs. The Audit Committee currently consists of five members and usually meets six times per year. The Audit Committee routinely reviews our EHS & SR performance.
Hess Leadership Team
In 2002 the Hess Leadership Team, consisting of the top executive officers of Hess Corporation, was formed to provide strategic business direction and key operational decisions for the company. Several of the objectives established by the Leadership Team are focused on promotion of EHS & SR policies and management systems that protect the company's workforce, customers and local communities. Executive compensation is linked to selective EHS & SR performance metrics.
The Hess Leadership Team is engaged in establishing performance expectations and holding business units accountable for their performance. Our business units and line management are ultimately responsible for incorporating EHS & SR expectations into their business activities and providing adequate resources and mechanisms to meet performance objectives.
The Hess Leadership Team is engaged in establishing performance expectations and holding business units accountable for their performance. Our business units and line management are ultimately responsible for incorporating EHS & SR expectations into their business activities and providing adequate resources and mechanisms to meet performance objectives.
EHS & SR Organization
The company has corporate and business unit EHS & SR staff in place to provide technical support and functional guidance to our business units. We have a corporate audit program to ensure that our operations and subsidiaries adhere to company policies and objectives, comply with regulatory requirements and, as appropriate, implement best in class industry standards. Our EHS & SR organization is presented in our web-based report .
. EHS & SR Reporting
This report represents one of several key outputs from our EHS & SR reporting systems. Reporting includes centralized incident tracking systems which provide real time access to information on safety and environmental incidents. We use these systems to provide information and monthly reports to our management. We have initiated a greenhouse gas protocol and monitoring system to enable quarterly internal reporting of these emissions together with our overall energy efficiency. Our corporate system is also used for collecting the metrics included in this report. Wherever possible, measurements and reporting are conducted in accordance with the relevant international standards or with reference to applicable legislation and regulations.
ETHICAL BUSINESS CONDUCT
The company has adopted a Code of Business Conduct and Ethics which provides company representatives with guidance and expectations regarding business ethics, citizenship, contracting and labor practices, regulatory compliance, safety and stewardship of the environment. It is applicable to all of the company's directors, officers and employees .
The company monitors compliance with the law and its own policies and has established both telephone and internet email hotline services to facilitate reporting of potential noncompliance. All reports of suspected violations, whether made anonymously or otherwise, are treated confidentially and are investigated promptly, thoroughly and fairly. In 2006 there were 127 calls received on the hotline, 20 of which were substantiated and resulted in follow up action including 13 employee dismissals. Reports are made periodically to the Audit Committee of the Board of Directors.
We conduct regular training and evaluate employees on these ethical guidelines. Training is mandatory. In 2006, all salaried employees completed a computer based Ethics Awareness Training course. No action is taken against an employee for making a complaint or reporting, in good faith, known or suspected violations of company policy. Intimidation or retaliation against anyone making such reports is not tolerated and any employee, officer or director who retaliates against another employee, officer or director will be in violation of company policy and subject to disciplinary action.
. The company monitors compliance with the law and its own policies and has established both telephone and internet email hotline services to facilitate reporting of potential noncompliance. All reports of suspected violations, whether made anonymously or otherwise, are treated confidentially and are investigated promptly, thoroughly and fairly. In 2006 there were 127 calls received on the hotline, 20 of which were substantiated and resulted in follow up action including 13 employee dismissals. Reports are made periodically to the Audit Committee of the Board of Directors.
We conduct regular training and evaluate employees on these ethical guidelines. Training is mandatory. In 2006, all salaried employees completed a computer based Ethics Awareness Training course. No action is taken against an employee for making a complaint or reporting, in good faith, known or suspected violations of company policy. Intimidation or retaliation against anyone making such reports is not tolerated and any employee, officer or director who retaliates against another employee, officer or director will be in violation of company policy and subject to disciplinary action.
Political Contributions
It is the company’s policy not to make political contributions to any political candidate or political party or to permit the use of Hess facilities or property for campaign activities. Contributions include not only financial support, but also the use of corporate resources and the use of corporate personnel in ways that assist the campaigns of candidates. It is also company policy not to permit management personnel to solicit or coerce political contributions from other employees. The corporation may not directly or indirectly reimburse an employee for a political contribution or channel a contribution through an employee in order to disguise its true origin. Employees, acting in their individual capacities, are encouraged to exercise their rights as citizens.
TRANSPARENCY
Good governance is a precondition for converting revenues from extractive industries into economic growth and poverty reduction. When transparency and accountability are weak, the extractive industries may instead contribute to poverty, corruption, and conflict. Our commitment to the United Nations Global Compact pledges us to work against all forms of corruption, including extortion and bribery.
In addition, the company has endorsed the Extractive Industries Transparency Initiative (EITI). The EITI supports improved governance in resource rich countries through the verification and publication of company payments and government revenues from oil, gas, and mining. The Initiative works to build multistakeholder partnerships in developing countries in order to increase the accountability of governments. Companies participating in EITI pledge to support the initiative in countries that have adopted it, and to advocate for EITI participation in countries that have not.
Over 40 countries have committed to EITI principles and criteria since the EITI Lancaster House Conference in June 2003. Some countries are only beginning to launch the process, while others have published revenue and payment data. Hess is actively engaged with several countries seeking to comply with the EITI.
In addition, the company has endorsed the Extractive Industries Transparency Initiative (EITI). The EITI supports improved governance in resource rich countries through the verification and publication of company payments and government revenues from oil, gas, and mining. The Initiative works to build multistakeholder partnerships in developing countries in order to increase the accountability of governments. Companies participating in EITI pledge to support the initiative in countries that have adopted it, and to advocate for EITI participation in countries that have not.
Over 40 countries have committed to EITI principles and criteria since the EITI Lancaster House Conference in June 2003. Some countries are only beginning to launch the process, while others have published revenue and payment data. Hess is actively engaged with several countries seeking to comply with the EITI.
