Oando Sustainability Report

2012SustainabilityReport

Vision:To be the premiercompany driven byexcellence

Mission:To be the leadingintegrated energysolutions provider

At Oando, we are mindful of the impact ofour activities on all our stakeholders as wellas on the environment. Sustainability is at theheart of all we do and is integrated into thecore of our business practices; fromconceptualization and delivery of value-adding products and services, to thedevelopment of our local communitiesthrough sustainable social investment.Oando is committed to high standards ofcorporate governance, ethics and goodwill.

Oando PLCSustainability Report 2012

03

What’s Inside

04 Oando PLC’s Core Values

05 Scope and Reporting Framework

06 Chairman’s Report

09 Group Chief Executive's Statement

10 Oando PLC at a Glance

16 What sustainability means to us

17 Awards & Recognitions

18 Risk Assessment and Materiality

20 Sustainability & Corporate Governance at Oando

26 Stakeholder Engagement

36 Our Environment

48 Occupational Health & Safety

56 Human Rights

58 Our Employees

64 Investing in our Communities

66 Oando Foundation

70 Economic Performance

72 GRI Content Index

Introduction


04

Oando PLC’sCore Values

T

R

I

P

P

rofessionalism

l Working together towardsthe fulfillment of acommon vision

l Building communitiesthrough collaboration

l Commitment to a sharedwin

l Showing consideration toall Stakeholders

l Protecting the Environment l Health and Safety for alll Encouraging diversityl Zero tolerance to all forms

of human rights abuses

l Honesty in all businessdealings

l Reliability &Trustworthiness

l Protecting Shareholdervalue

l Developing and promotinglocal skills and expertise

l Acting in accordance withreason, justice, law andmorality

l The zeal to meet thehighest standards ofservice and productivity

l Creating the energy toInspire

eamwork

espect

ntegrity

assion

Oando’s corporate culture is hinged on thevalues of Teamwork, Respect, Integrity, Passionand Professionalism (TRIPP), which embody the‘Oando Way’:

Scope andReportingFramework

This Sustainability Report covers the periodbetween 1st January 2012 and 31st December2012. Its scope spans across the businessactivities of the Company’s six divisions:Exploration and Production, Energy Services,Gas and Power, Marketing, Supply and Trading,and Terminals and Logistics.

This Report focuses only on operations within Nigeria and whereOando maintains significant control or influence. As this is ourfirst Sustainability Report, there are no restatements ofinformation to be provided in respect of earlier reports.

The Report focuses on material activities, developments andconcerns of the Company within the ambit of the most applicableindicators. We have adopted the view that an issue is materialwhen it impedes our ability to remain commercially viable andsocially relevant to the communities in which we operate. In particular, material issues are those that have a strong bearingon our stakeholders’ assessments and decisions about Oando’slong-term sustainability and its commitments to their needs. Ourstrength in managing these material issues affects our ability toachieve our strategic objectives.

We shall continually refine and improve our content selectionprocess for reporting, and take into account the diversity in ourportfolio of operations.

In compiling this Report, Oando has adopted the GlobalReporting Initiative Sustainability Reporting guidelines GRI G3.1(see www.globalreporting.org). In addition, our Report fallsunder the GRI application level C, which requires the OandoGroup to self-declare on at least 10 GRI indicators across itseconomic, social and environmental performance indicators. The indicators chosen for the purpose of this Report reflects theextent to which we have met the GRI reporting requirements. Our intention is to continue to improve on our sustainabilityperformance over time such that we would be in a position toreport on all criteria relevant to the operation of our business.

A GRI context index and summary table matching details of our performance in line with the GRI indicators are provided on Page 72.

Best value is achieved reading this Report in conjunction with thesupplementary data in our 2012 Annual Report which can befound on the company's website at www.oandoplc.com.


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An issue is materialwhen it impedes ourability to remaincommercially viable andsocially relevant to thecommunities in whichwe operate.

sustainability...

Chairman’sReport

Sustainability encompasses practically every aspectof how we conduct our business, influencing ourstandards of ethics and compliance, our efforts todrive a sustainable supply chain and our emphasison maintaining a comprehensive yet diverse culturewhere all our employees can pursue meaningfulwork and rewarding careers.

Dear Stakeholders,

We are pleased to share with you our maiden SustainabilityReport. At Oando, we believe sustainability is a journey thatrequires a long view and a broad stakeholder perspective, as well as collaboration and perseverance.

Our aspirations as an indigenous oil and gas company in Sub-Saharan Africa are tightly interwoven with our sustainabilitypriorities. We are committed to helping our stakeholders thrive by creating sustainable environmental, social and economicvalue in how we do business at Oando.

We strive to operate responsibly and effectively whilst creatingoptimum value for all our stakeholders as we advance in ourquest to expand our operations globally.

Sustainability encompasses practically every aspect of how weconduct our business, influencing our standards of ethics andcompliance, our efforts to drive a sustainable supply chain andour emphasis on maintaining a comprehensive yet diverseculture where all our employees can pursue meaningful work and rewarding careers.

In 2012, the Company achieved significant milestones as you willobserve through the course of the Report. We intend to improveon these achievements annually in ways that will elevate theCompany to the next level and set us further on the path of beinga leader in the provision of safer, reliable, economic and greenerservices and solutions.

At Oando, we are focused on those who have a major stake inour performance today and in the future – Our investors,employees, customers, communities, business partners, theNigerian government and our various regulators, etc. Thesestakeholders often have competing priorities; however, we aim forthe right long-term balance that strengthens trust and confidencein the Company and helps us be a truly sustainable organization.


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increased trust...

HRM Oba Michael A. Gbadebo, CFR - Chairman

We take our corporate integrity and reputation very seriously and as such, we are committed to ensuring the Companymaintains the highest international standards of corporategovernance as we understand the impact that this has in buildingtrust with all our stakeholders. Increased trust translates tosustainable value to the Company, helping us secure local andforeign investment capital, develop a throughput of talentedemployees, retain and win new customers, and provide areservoir of bankable goodwill to draw from in uncertain times.

I want to thank all our stakeholders whose belief and continuedcommitment have contributed to our achievements. We remaindedicated to the core principles of corporate sustainability inpursuit of our goal of creating new business opportunities that will bring sustainable development and increasing investmentinto Africa.

HRM Oba Michael A. Gbadebo, CFRChairman


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In 2012, the Companyachieved significantmilestones as you willobserve through thecourse of the Report.


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future generationsin mind...


09

Group ChiefExecutive'sStatement

We will continue to operate with the higheststandards of safety, environmental performance,ethics, economic stewardship and communityengagement in every aspect of our business.

Our sustainability reporting aims to demonstrate how as abusiness all our actions are done with future generations in mindand our ultimate goal is to create an environment that enables abetter standard of living than what we currently enjoy. Theseactions illustrate our commitment to carrying out our business inaccordance with the pillars of sustainability. In conjunction withour core values (T.R.I.P.P), sustainability has been at the center ofour business throughout our journey from a petroleum marketingcompany to a fully integrated energy company.

Oando remains committed to the principles and implementationof good governance as exhibited in our corporate governancepolicy. We are dedicated to the protection and promotion of allstakeholders’ interest and recognize the invaluable contributionsthat best practice principles of sustainability and corporategovernance add to increasing shareholder value.

Annual sustainability reporting is a winning approach in both theshort and long term, and we are certain that it will represent a realcontribution to the success of our company and to thesatisfaction of the interests of our stakeholders.

In conclusion, the sustainability of our business is based on ourability to apply consistent processes and systems in carrying outour daily operations and ensure that every risk, no matter howsmall, is identified, planned for, and successfully managed. Wewill continue to operate with the highest standards of safety,environmental performance, ethics, economic stewardship andcommunity engagement in every aspect of our business.

We are pleased to share our 2012 Sustainability Report with youand commit to continuous improvements in every aspect of ouroperations in ensuring that the realization of the “better tomorrow”becomes a reality.

In the spirit of being environmentally friendly and to conserveresources, we shall be producing limited printed versions of thereport, making it freely available for download through ourcorporate website and the Global Reporting Initiative database.

Mr. J.A TinubuGroup Chief Executive

Annual sustainabilityreporting is a winningapproach in both the shortand long term, and we arecertain that it will representa real contribution to thesuccess of our companyand to the satisfaction ofthe interests of ourstakeholders.

Mr. J.A Tinubu, Group Chief Executive

Oando PLC ata Glance

Our vision is to be a premier company driven by excellence andwe are on a mission to be the leading integrated global energysolutions provider.

Our operations are currently focused on Sub-Saharan Africa andinclude upstream, midstream and downstream activities fromexploration and production through gas and power distribution tomarketing and supply of gas, crude and petroleum products.


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Oando Plc is a leading integrated energy solutionsprovider in sub-Saharan Africa with a primarylisting on the Nigerian Stock Exchange, asecondary listing on the JSE Limited, South Africaand a subsidiary listing of its exploration andproduction business on the Toronto StockExchange.


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Exploration & ProductionOando’s exploration andproduction division has a portfolioof assets at different stages ofexploration, development andproduction.

Energy ServicesOando provides oilfield anddrilling rig services to majorupstream companies operating inNigeria through its subsidiary,Oando Energy Services Limitedand operates the largest swamprig fleet in the Niger Delta.

MarketingOando Marketing PLC is Nigeria’sleading retailer of petroleumproducts and has a vast distributionnetwork with over 546 retail servicestations.

Supply & TradingOando Supply and Trading Limitedis Africa’s largest independent andprivately owned oil trading companyinvolved in the large scale exportand import of petroleum productsand crude oil throughout Africa,Europe, Asia and the Americas.

Terminals & Logistics LimitedOando Terminals & LogisticsLimited is a subsidiary of the Oando Group that manages thedevelopment of petroleum productsand reception terminals.

Gas & PowerOando Gas & Power Division is adeveloper of Nigeria’s natural gasdistribution network and captivepower solutions. We pioneered theconstruction of a private sectorpipeline network facilitating thedistribution of natural gas toindustrial and commercialconsumers.

The development of our gasdistribution network has positivelyimpacted on industrial activity inthe south east and south west ofNigeria.

Marketing Division

Supply & Trading Division

Terminals & Logistics Division

Gas & Power Division

Exploration & ProductionDivision

Energy ServicesDivision

DownstreamOperations

MidstreamOperations

UpstreamOperations

Oando Group

Group Structure: Oando’sbusiness is organized into sixdivisions. These divisions bysectors are:



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n 4.5 kboed daily production.

Key Assetsn Producing Assets: Abo Field (OML

125) & Ebendo Field (OML 56).n Near-Term Assets: Akepo Field

(OML 90), Qua Iboe (OML 13),Bilabri Field (OML 122) and OML 134.

n Exploration Assets: OPLs 321 & 323, EEZ Blocks 5 and 12.

n OPLs 282, 236 & 278.

Oando EnergyResources Inc. (OER)

A leading E&P company with a portfolio consisting of oil and gasassets situated in the Gulf of Guinea.

The Company is listed on the Toronto Stock Exchange in Canadaand has local operating capacity partnerships with both indigenousand international oil companies.

OER’s mission is to deliver sustainable value to stakeholders bycontinually growing reserves through development of its existingportfolio and acquisition of new assets.

Key FactsEntity

ExPLORATION & PRODUCTION

Profile

Key Assets:n Swamp Drilling Rigs – Teamwork,

Passion, Integrity and Respect

Oando EnergyServices (OES)

A leading provider of energy services to E&P companies in Nigeria. OES is the largest swamp drilling rig fleet operator in Nigeria and isfocused on providing high-quality energy services and operationssupport including innovative technology, world-class safetypractices and personnel competence.

With 3 years of successful drilling operations in swamps under itsbelt, OES places emphasis on strict adherence to EHSSQ policiesand improved service delivery as a platform to deliver value tostakeholders.

OES is poised to expand its range of services to meet the needs ofits clients with the introduction of new service lines.


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GAS & POWERKey Assets:n 100km gas distribution pipeline in

Lagosn 128km gas pipeline in Eastern

Nigerian Akute captive power plantn Central Horizon Gas Company,

Compressed Natural Gas Facility,Alausa IPP

Operating Entities:n Gaslink Nigeria Limitedn Akute Power n East Horizon Company Limitedn Central Horizon Gas Company

Limited

Oando Gas & Power (OGP)

The largest private sector gas distributor and developer of captivepower solutions in Nigeria. The division pioneered gas distributionin the Greater Lagos area, before expanding into Eastern Nigeria,and is now well positioned to benefit from its mover advantage andincrease its customer footprint in the near future.

OGP has made significant investments in the development ofNigeria’s gas and power infrastructure with a 233km gas pipelinegrid already completed with plans in place to expand the grid to600km in a few years.

OGP aspires to provide industrial and commercial users withaccess to efficient, clean and cheaper fuel and its aim is toreplicate the success of its Lagos gas distribution network in otherparts of the country.

OGP has leveraged on the capability of its gas grid to build anindependent power generation plant in Lagos. It is in the finalstages of constructing a Compressed Natural Gas (CNG) facility inLagos.

The Akute Power Plant was commissioned to generate constantelectricity to the Lagos Water Corporation, thus increasing thesupply of water to millions of residents in Lagos State.

Consequently, the Company was given the mandate to build anatural gas central processing facility in Rivers State which willsupport and enhance its current operations.

Key FactsEntity Profile



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Key Strengths:n Access to 160 million litres of

physical storage in major markets.n Strong management team with

over 40 years combined tradingexperience.

n Knowledge of local and regionalmarket dynamics

n Access to trading lines in excessof US$1bn

n 100% track record of delivery on allsupply contracts

Oando Supply andTrading (OST)

OST procures and trades a broad range of refined petroleumproducts including Jet A1, Gasoline, Dual Purpose Kerosene(DPK), Automotive Gas Oil (AGO), Low/high Pour Fuel Oil, Base Oiland Bitumen.

OST has a 15% market share of Premium Motor Spirit (PMS)importation into Nigeria

Key FactsEntity

SUPPLy & TRADING

Profile

Key Strengths:n 1 in every 5 litres of petroleum

products sold or distributed is byOMP

Key Assetsn Over 500 retail outlets in Nigeria,

Ghana, and Togon 15% market share in private

Premium Motor Spirit (PMS)importation into Nigeria

n 8 Terminals with combinedcapacity of over 160 million litres

n 2 lube blending plants withcombined capacity of 100 millionlitres/annum

n 7 LPG filing plants with combinedcapacity of 945 metric tons

n 3 aviation depots with combinedcapacity of 3.4 million litres

n Over 160 million litres of physicalstorage in major markets

n Over 1,980 trucks throughpartnership

n Over 500 industrial customersn 13 lubes warehousesn 15 in-station filing plants (Pay-As-

U-Gas)n 13 Vendor Managed Inventory

(VMI) locations

Oando MarketingPLC (OMP)

OMP is a fully owned subsidiary of Oando PLC and West Africa’sleading oil retailer. With a vast distribution network, OMP hassuccessfully established an unparalleled resource footprint acrossNigeria. It currently has two operational subsidiaries with over 500retail outlets in Nigeria, Ghana, Togo and the Republic of Benin.OMP is Nigeria’s leading retailer of refined petroleum products.

MARKETING


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TERMINALINGn Commenced the construction of

the pioneering Apapa SubmarinePipeline (ASP) project deliveringalmost 3 million tonnes a year.

n Berthing capacity for largervessels of up to 45,000 tonnecargoes currently restricted byshallow draft at other nearproximity port facilities.

Oando Terminals andLogistics (OTL)

OTL’s entry into the terminals sector completes Oando’s presencein all segments of the energy value chain with a 210,000 metrictonnes (MT) capacity product reception terminal and assetdevelopment projects such as Liquified Petroleum Gas (LPG)Storage.

Key FactsEntity Profile

WhatSustainabilitymeans to us

We commenced our efforts of building a sustainable company asfar back as 1991 when 60% of the Company was sold to theNigerian public. The eventual goal is to be the foremostindigenous Oil and Gas Company of choice for our businesspartners, employees, local and international shareholders,customers, suppliers and the general public. We aim to build astrong and sustainable brand that will grow incrementally overseveral generations.

All of the above cannot be attained without fully incorporatingsustainable development goals into our business and deliveringon our commitments with respect to the management of thetriple-bottom line – the organization’s economic, social andenvironmental risks, obligations and opportunities.

Sustainable development for Oando is the integration ofeconomic, environmental and social considerations into the coreof our decision-making, business policies and processes and ourentire operations with the mindset that we are building a lastingand growing legacy for generations to come. In the quest tobecome Africa’s premier integrated energy solutions providerand the global brand of choice throughout the entire energyvalue chain, we are constantly seeking ways to improve ourofferings. A key tool in measuring our Company’s performancehas been the process of benchmarking our performance againstthat of successful peers within the industry. We are neversatisfied with the status quo but aim to achieve our goals byconstantly reengineering and improving on processes andsystems in place.

The 2012 Sustainability report is the first to be produced byOando and it provides a balanced and true representation ofOando’s performance in respect of corporate governance andsustainability issues for the period.


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Economic

Social

Environmental

Oando

The Triple-Bottom Line


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Awards &Recognitions

Oando Plc through its selection process, hasdeveloped a team who have strived hard toensure that we not only live up to stakeholder'sexpectations but that we excel in respect of ourenvironmental, social and economic impacts.To this end, the efforts of our magnificent teamwere recognised by a number of awards andachievements in 2012, notably:

Oando PlcNigeria’s Best Company of the Year Award NNPC at the Nigerian Oil & Gas Conference

Recipient EntityAward Award Body

Manufacturers Association of Nigeria Oando Gas & Power LtdManufacturers Association Award

Appreciation Award Oando Gas & Power LtdTertiary Education Trust Fund

International Trade Fair, Port Harcourt Oando Marketing PlcBest Product Award

Ministry of Environmental Protection Authority Oando Marketing PlcBest Environmentally Friendly Industry

Lagos State Ministry of Education Oando FoundationCorporate Social Responsibility

Oando PLC’s superiorperformance and outstandingleadership continue to attract localand international recognition,supporting our efforts to becomeAfrica’s leading integrated energysolutions provider.

Milestonesn In the year under review, the gas & power division,

OGP maintained its Quality Management SystemCertification and compliance with the ISO9001:2008 Standard and achieved a zero QualitySystem non-conformity.

n Our energy services division, OES, maintainedzero Lost Time Injury (LTI) for all 3 Rigs in the NigerDelta.

living up tostakeholder’sexpectations...

RiskAssessmentand Materiality

During the year, the Board approved an Enterprise RiskManagement (ERM) framework which sets out a top-levelframework for the consistent management of risk in Oando Plcand its subsidiary companies. The framework seeks to buildstakeholder confidence in our business with respect to bothbusiness strategy and our ability to deliver acceptable andsustainable operating results.

We are executing this framework by establishing communicationwith stakeholders on emerging risk events. We are currentlydeveloping internal and external flexibility so that we canrespond effectively to opportunities created by the occurrence of an unexpected event. Our approach focuses on current andemerging key business risks that could prevent us fromachieving our objectives and sustaining our business in alldomains (Financial results, market position, compliance withlegislation) in the short, medium and long term.

To this end, we have developed customized risk definitions tocreate a common language for understanding and discussingrisk within the Group.

The level of current or emerging risk is determined by the impactand likelihood of the risk. The risk impact ranges frominsignificant to catastrophic whilst the likelihood ranges from rareto near certainty. A financial indicator is also attached to eachrisk. We monitor the risk by establishing Key Risk Indicatorsthresholds. Risk reducing measures must be implemented toreduce the risk to a residual risk.Management operates andmonitors the system of controls through procedures and policiesestablished to guide business activities. The Group regularlyreviews its policies, procedures and risk management systemsto confirm their suitability to current business objectives,compliance with regulations and protectiveness of shareholdervalue.

As part of our project management process, a detailed riskassessment is performed to assess the impact of our activitieson the environment, society, health of our stakeholders, humanrights, and the overall reputation of the Company. Impactreducing controls are thereafter implemented to reduce anyadverse impact to acceptable levels.


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We have developed customized riskdefinitions to create a commonlanguage for understanding anddiscussing risk within the Group.

The Board and management of Oando Plc(“Oando Group” or “the Group”) are committedto establishing and sustaining leading practicesin all its business processes and it aims to dothis in a holistic manner.

Growth

Risk Management

Return on Capital

Innovation and New Products

Compositionof Business

Portfolio

GreenSales andMarketing

RegulatoryManagement

ReputationManagement Sustainable

Value Chains

Reaching NewCustomers and

Markets

Operational-riskManagement

SustainableOperations (eg, reducingemissions, energy,waste, water)

We monitor a number of economic, socio-political risk indicatorsthat could affect our business sustainability if not checked. TheNiger Delta unrest and the terrorist insurgencies in the northernpart of the country, are fundamental socio-political risk whichcould lead to damage to our assets and threats to life. To mitigatethis risk, we engage our host communities and providesustainable support through the efforts of our Oando Foundation,who is engaged in projects that help to stimulate the localeconomy and provide assistance in areas where governmentefforts in education are not adequate. Through its “Adopt-A-School” campaign, host community agreements are in placewhich ensures that the communities derive economic value fromour presence. We engage local staff from the host communitiesfor appropriate services that we require for our operations as partof our effort to positively impact the local community and supportthe government’s commitment to Local Content. We haveredeployed staff from the troubled areas in the North to otherparts of the country in order to eliminate the threat to life andlimb.

Oando is registered in multiple jurisdictions. This increases theburden of compliance with the laws and regulations in all thejurisdictions where we operate, resulting in regulations andregulatory risk. Non-compliance could in effect, put our licence tooperate at risk. To address this risk, we engage country matterexperts, combined with our in-house Group Governance team,who monitor changes in legislation and its effect on ourbusinesses.

Our people represent our most important asset without which wecannot achieve any of our objectives. We have a highly-skilledHuman Resources unit who provide strategic support to ouremployees and implement talent management initiatives. We aimto align our employment requirements with our business modeland strategy. Our goal is to attract the best in class, and rewardthem appropriately. As performance is a key part of our HRstrategy, we have put in place a robust performancemanagement tool to appraise staff performance and we continueto benchmark our standards against globally acceptablestandards. This helps in mitigating the risk of losing requisite skill,knowledge and experience to our competitors and ensures thatwe achieve our business objectives.

Managing our financial risk is a core part of our risk managementstrategy. We closely monitor oil prices, exchange rate andinterest rate volatility, as these are major drivers of value acrossthe value chain in our business. We take out hedging instrumentsand enter into forward contracts as appropriate; in order toprotect our projected profit margins and targets and sustain ourbusiness model. Fluctuating foreign exchange rates could have asignificant impact on our earnings since some of our revenue isdenominated in US Dollar and our operational expenses aredenominated in Naira, the local currency. We manage thismismatch by entering into financial derivatives and forwardcontracts as appropriate.

Liquidity and credit risk are fundamental financial risks that theCompany focuses on to ensure that we meet our financialobligations at all times. The Group has a balance of short,medium and long-term facilities with a number of financialinstitutions which gives us the ability to create financial flexibility.

In order to build a sustainable and world class company, in 2010we embarked on International Organization for Standardization(ISO) certification in all our subsidiaries, as part of this exercise;we updated our procedures and policies to global standard. Wehave however identified that non-conformity to the laid downpolicies and procedures is another risk faced by the Company.We mitigate this risk using regular checks for compliance andefficiency from our internal auditors and annual StandardOrganization of Nigeria (SON) audits. We aim to ensure that ourlaid down processes and policies speak to our business strategy.

In conclusion, as part of our risk management strategy we haveidentified risk categories that could affect the short to long-termexistence of our business and have put in place measures thatwill either reduce, eliminate, transfer or manage those risks.

We shall continue to review these measures as we review ourbusiness strategy and ensure that they speak to the riskindicators that may point to crystallization of identified risks.


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consistentmanagement of risk...

Sustainabilityand CorporateGovernance atOando PLC

At Oando, we believe that strong corporategovernance is essential for the achievement ofsustainable value for all our stakeholders.Consequently, Oando is committed to exhibitingthe highest levels of corporate governance andcontinues to make significant progress inimplementing structures, policies andprocedures aimed at strengthening governancewithin the Group.

Governance StructureOur governance structures reflect the importance we attach tothe fact that our business cannot separate environmental andsocial matters from traditional economic indices. Oando’sgovernance structures ensure that there is consolidation andstrong correlation between sustainability and our financialsuccess as we continue to evolve.

Our policies and commitments are adhered to at all levels withinthe Group with a clear leadership direction and tone from the top.This requires a clear structure for delegation of authority, clarityover roles, objectives and responsibilities evidenced byincreased accountability and commitment to results.


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Our policies andcommitments areadhered to at all levelswithin the Group witha clear leadershipdirection and tonefrom the top.

strong corporategovernance...

We recognize the chain of authority that starts with our owners -our shareholders, through the Board of Directors, who promoteand represent their collective interests, to the Group ChiefExecutive (GCE) and his Group Leadership Council (GLC), towhom authority for the executive management of the Company isdelegated. The goal established by the Board of Directors putsthe interests of all our owners at the heart of all we do. Thecollective goal is the maximization of long-term shareholder valuethrough sustainable operations.

This goal drives our need to operate in a sustainable manner.The Board is accountable to our shareholders for the optimumperformance of the Group, and as such, its members arebeholden to act in good faith, with due care and in the bestinterests of the Group and all its stakeholders. The Board is alsoresponsible for setting the strategic direction for the Group andoverseeing its business affairs whilst managing risks. In addition,the Board develops and implements sustainable policies whichreflect the Company’s responsibility to all its stakeholders.

The Board is made up of a group of individuals from diverseacademic and professional backgrounds. The size of the Boardis in line with the prescriptions of Article 78 of Oando PLC’sArticles of Association which stipulates that the number ofdirectors shall not be less than 10 or more than 15.

The position of the Chairman and Chief Executive Officer arevested in different individuals in line with governance bestpractice.

The Board adopts the following best practice principles in thedischarge of its duties:n The Company believes that the Chairman of the Board should

be a Non- Executive Director.n To maintain an appropriate balance of interest and ensure

transparency and impartiality, a number of the Directors areindependent. The independent Directors are those who haveno material relationship with the Company beyond theirDirectorship.

n Directors abstain from actions that may lead to “conflict ofinterest” situations; and comply fully with the Company’s Policyon Related Party Transactions.


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Board of Directors

Audit Committee

Strategic Planning& Finance Committee

Governance and Nominations Committee

Risk, Environmental Health, Safety, Security andQuality Committee



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The Company’s Board Committee structure

we operate to thehighest standards oftransparency...

Governance EthosThe Oando Group is fully committed to effective corporategovernance and the need to observe the highest levels ofintegrity in the conduct of its business. As such, each thedirectors, management and employees are all committed toensuring that they operate to the highest standards oftransparency, accountability and good corporate governance bycomplying with the requirements of Nigerian and internationalcorporate governance regulations, particularly:n the Securities and Exchange Commission (SEC) Code of

Corporate Governance for public companies in Nigerian the King III Reportn the Organization for Economic Development (OECD)

Principles of Corporate Governancen the UK Bribery Actn the Foreign Corrupt Practices Act (FCPA) and n the Toronto Stock Exchange Corporate Governance Policy.

The Governance Office is charged with the responsibility ofdeveloping and monitoring the implementation of corporategovernance policies and procedures by the Group and itssubsidiaries. This unit also appraises the Group’s level ofcompliance and periodically reviews these policies to ensurethey continually align with best practice.

Oando PLC’s Internal Policies and ProcessesGoverning Ethics & ComplianceIn order to provide guidance on corporate governance issues,the Company has implemented the following internal policies andpractices which are reviewed periodically to ensure continuedrelevance and adherence to global best practices:n Code of Business Conduct and Ethicsn Gift and Benefits Policy n Insider Trading Policyn Dividend Policyn Related Party Transaction Policiesn Whistle Blowing policyn Board Appointment Processn Know-Your-Customer Policyn Remuneration Policyn Anti-Corruption Policyn Blacklisting Policyn Records Management Policyn Information Disclosure Policyn Environmental, Health, Safety & Security Policy


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The names of Directors who held office during the reportingperiod are as follows:

Non -Executive Directors1. HRM Michael Adedotun Gbadebo, CFR (The Alake of Egbaland) ‡2. Mr. Ogogho Akpata ‡3. Ms. Nana Appiah-Korang4. Chief Sena Anthony ‡5. Ammuna Lawan Ali, CFR ‡6. Engr. Yusuf K.J N'jie ‡

‡Independent

Executive Directors7. Mr. Jubril Adewale Tinubu8. Mr. Omamofe Boyo9. Mr. Mobolaji Osunsanya10. Mr. Olufemi Adeyemo

For details regarding the Board and its Committees, please referto pages 59 – 60 of our 2012 Annual Report.

The Oando Group isfully committed toeffective corporategovernance and theneed to observe thehighest levels ofintegrity in the conductof its business.


Anti-Corruption, Bribery and FraudLike other international oil and gas companies, we face thechallenge of working in territories where the perceived or actualrisk of corruption and bribery is high. We have a policy of zerotolerance to corruption. However, managing the risk is imperativeas new regulations and legislation (such as the UK Bribery Act2010, which came into force in July 2011 and the FCPA) areintroduced in environments where prosecuting authorities areincreasingly unsympathetic; cooperating across jurisdictions andlevying record-breaking fines.

In 2012, we continued to build on and strengthen our proceduresfor managing ethical conduct and bribery and corruption risk. Weare fully committed to the global fight against corruption and weactively participate in this fight through our membership of thefollowing local and international organizations:

1. Partnering Against Corruption Initiative (PACI) of theWorld Economic Forum:The Company joined PACI in 2008, an initiative of the WorldEconomic Forum, which is a global, multi-industry, multi-stakeholder anti-corruption initiative set up to raise businessstandards and to contribute to a competitive, transparent,accountable and ethical business society. The PACI initiativerequests companies to commit to a set of anti-bribery andcorruption Principles useful in strengthening their internalanti-corruption programme and in assisting with the designand implementation of effective policies and systems toprevent, detect and address corruption issues.

2. United Nations Global Compact (UNGC):The UN Global Compact is a strategic policy initiative forbusinesses committed to aligning their operations andstrategies with ten universally accepted principles coveringthe areas of human rights, labour, environment and anti-corruption (amongst others) and reporting publicly onprogress made in implementing these principles within theirbusiness operations.

Oando became a signatory to the UNGC in July 2009 andhas been an active participant in the Local Network of theGlobal Compact in Nigeria. In 2010, the Company deployeda member of its staff to the UNGC office in New York to assistwith strengthening the local networks globally. Oando PLC isalso a pioneer member of the Global Compact LEADplatform.

3. Convention on Business Integrity (CBi):Oando became the 21st member to sign up to the CBi onNovember 16, 2009. CBi is a declaration for the maintenanceof ethical conduct, competence, transparency andaccountability by private sector operators. It was establishedto empower business transactions within Nigeria againstcorruption and corrupt practices. Oando is a member of thecore group of signatories to the Convention.

4. Fraud Awareness Working Group (FAWG)Oando is a member of the FAWG, a forum aimed at unitingcorporate organizations operating in Africa in the fightagainst corruption and fraud in their environment.


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we have a policy ofzero tolerance tocorruption...

Training on Anti-Corruption InitiativesFor the purposes of instilling an ethical culture in the Company,new members of staff are trained on the Company’s policies andpractices through a compliance on-boarding process.

A re-certification exercise is also conducted via an online testannually for all employees and directors in the Group and itsentities. This exercise entails refresher courses on the OandoCode of Business Conduct & Ethics and anti-corruption policiesand principles. Those who pass the test are awarded aCertificate of Compliance. 639 employees (and Directors)participated in the recertification exercise over the reportingperiod.

Employees in business units who handle sensitive informationsuch as Legal, Finance, Procurement, Marketing and HumanResources are specifically trained on ways of dealing with thedifferent ethical dilemmas that may arise in the execution of theirduties.Every month, the Governance Office publishes the Ethics Watchbulletin, which is circulated amongst all employees and businesspartners for the purposes of educating and keeping them up-to-date on different ethical and compliance issues.

Managing the risk of corruption through the supplychainAt Oando, we are committed to doing business with onlyreputable, honest and qualified business partners and vendors.The Company, through its employees, exercises due care andtakes reasonable safeguards geared towards evaluating potentialbusiness partners in making selections regarding whom totransact business with as their integrity could have a huge impacton our Company’s reputation.

We carry out corruption risk assessments of territories/countriesthat we are considering for new operations as well as duediligence into the ethical track-record of potential businesspartners and providers of materials and services.

In the reporting period, we revised our Ethical Conduct DueDiligence Standard to bring greater alignment with the newContracts and Procurement Standard which was also issuedduring the period under review and essentially lays downprocedures on how to source for contracts and manage it post-award. The Ethical Conduct Due Diligence Standard was alsorevised to bring greater clarity and direction over the duediligence required when considering potential social investmentpartners and technology partners.

Whistle Blowing HotlineThis Hotline was set up as an avenue for the Group’sstakeholders and all members of staff to confidentially reportunlawful and/or unethical practices involving the Company,members of staff, Directors and any other key stakeholder.

The Group engaged the services of an independent consultant,KPMG Professional Services to manage the Hotline and ensurethat all reports are kept confidential and directed to theappropriate authorities for investigation and resolution.Employees are also encouraged to report grievances throughany of the following mediums:n Visits, calls or emails to the Governance Office;n The Compliance Helpdesk; or n Escalation of issues through appointed Torch Bearers

(employees who volunteer to assist the Governance Office inentrenching Oando’s core values in the entities and businessunits to which they belong).

ZERO Tolerance to CorruptionIn cases of fraud or corruption, we at Oando adopt human rightsbest practice, bearing in mind the rule of law which requires thatboth sides of a matter are heard, and that the matter is fully andfairly investigated. Representations are made to a disciplinarycommittee made up of persons who are neutral and understandthe tenets of equity and fairness.

During the reporting period, no cases of fraud or corruption werereported. However in the previous year, we had three cases offraud reported in our marketing division (OMP). In all reportedcases, a disciplinary committee was duly constituted and uponinvestigation, a case of fraud was established in one of the casesinvestigated; following which the employment contract of theerring staff was terminated.

Over the reporting period, there were no legal actions regardingcorruption, anti-competitive behaviour and violations of anti-trustmonopoly legislation in which Oando was identified as aparticipant.

Governance Office Initiatives n Recertification exercises, n Training for business partners on the Code of Business

Conduct and Ethics, n Web-based compliance itinerary video trainings,n New Directors’ induction programme and Directors training,n Service Stations and facilities spot checks (Adopt-a-station), n Compliance Week, n World Anti-Corruption Day and n Ethics Watch bulletins.

All these are aimed at protecting the reputation of the Group andpreserving the Oando brand, a vital asset and contributor to thebottom-line and avoiding penalties which erode shareholdervalue and can potentially cripple the growth and survival of theCompany.


25

Oando became asignatory to the UNGCin July 2009 and hasbeen an activeparticipant in the LocalNetwork of the GlobalCompact in Nigeria.

StakeholderEngagement

We understand that communication that is balancedand accurate generates trust; hence, we aim todevelop an approach to stakeholder engagementwhich supports our sustainability aspirations. Inlight of this, we are committed to measuring,auditing and publicly reporting our stakeholderengagement activities and performance.


26

By virtue of the nature ofour operations, we build andmaintain strategic, ongoingrelationships with ourstakeholders.

Our key stakeholders

Employees Communities Government &Regulators

Business Partners / Vendors Customers Investors

The key stakeholders we have identified are those who areimpacted by the business of the Company or who have animpact on us.

By virtue of the nature of our operations, we build and maintainstrategic, ongoing relationships with our stakeholders, to enableproactive engagement, preserve mutually beneficial relations,manage social expectations, minimize reputational risk andpositively influence the business environment.

We employ a range of channels and mechanisms in order to getstakeholder feedback. The frequency of engagement variesaccording to the stakeholder group and the particular issueconcerned. We use a decentralized stakeholder engagementmodel, in which the relevant unit/entity undertakes stakeholderengagement activities appropriate to their particular areas.

Engagement with EmployeesOur Goal: To create a motivated workforce throughpersonal growth, security and learning. Ensuring everyemployee reaps the rewards of his/her vital role in theCompany and understand that they are the coresuccess drivers essential to the fulfillment of ourbusiness strategy.

Engagement Initiatives:n Employee Surveys & Questionnairesn Town Hall Meetingsn Newslettersn Company’s intranet & websiten On-boarding & Inductionn Whistle-blowers Hotlinen Employee Volunteer Programme (EVP) n Ethics Watch


27

we understand thatcommunication that isbalanced and accurategenerates trust...

We employ a range of channels and mechanisms in order to getstakeholder feedback. The frequency of engagement variesaccording to the stakeholder group and the particular issueconcerned.



28

Engagement with InvestorsOur Goal: Providing timely, accurate and transparentinformation to enable shareholders make informeddecisions about the Company and their investments andobtain feedback on the Company’s performance.

Engagement Initiatives:n Annual General Meeting (AGM)n Investor Road Showsn NSE / JSE Announcementsn Investor Callsn Conferences / One-on-One Meetingsn Conferences / One-on-One Meetingsn Median Shareholders Associations

The Company values the importance and role that all ourdifferent investors groups have played in the Company’sprogress and as such, makes a conscious effort to keepthem updated on the Company’s activities and obtainconstructive feedback.

Our investors as at 31st December 2012

n Retail Investors (43%)

n Pension Fund Administration (PFAs) & Local institutions (20%)

n International Institutions (15%)

n Strategic Investors (11%)

n Others (Brokers, staff, etc.) (11%)

43%

20%

15%

11%11%


29

By virtue of the nature of our operations, we buildand maintain strategic, ongoing relationships withour stakeholders, to enable proactive engagement,preserve mutually beneficial relations, managesocial expectations, minimize reputational risk andpositively influence the business environment.

Engagement with CommunitiesOur Goal: Sensitively engaging and giving back to thecommunities through social and environmentalinitiatives.

Engagement Initiatives:n Memorandum of Understanding (MoU)n Sustainable Community Development Projectsn Town Hall/People’s Parliament meetings n Dispute Resolutionn School Based Management Committee (SBMC)

Community Relations Strategy

Why POWERS?To eliminate:n the general distrust amongst members of the

community of oil and gas companies as a result ofunfulfilled promises;

n the pollution of rivers and streams in thecommunities we were to traverse;

n the destruction of aquatic animals;

Ultimately, the objective of the POWERS strategy is togive back to the communities through economicempowerment and capacity building.

POWERS

SustainableDevelopment

Partnership

Ownership

Win-win

Empowerment

Respect



30

The Company’s community relations strategy, POWERS(Partnership, Ownership, Win-Win, Empowerment, Respect& Sustainable Development) was initiated and adopted asthe internal guide for managing community relatedengagements on all Company projects.

This strategy was developed in 2012, during theconstruction phase of 124km East Horizon gas pipelineproject as there was a general feeling of deprivation,marginalization, and exploitation in the oil-producingcommunities we were operating in.

Engagement Processn Identification of the area of operation.n Conducting of a fact-finding recognizance field trip

(RECCE mission).n Introducing the Company to Stakeholders, i.e. the Local

Government Authority, Community Leaders, etc.n Convening a stakeholders’ consultation meeting.n Negotiation and execution of a Memorandum of

Understanding (MoU).n Implementation of the MoU and execution of a

Community Development Project (CDP).n Ensuring there is continuous engagement with the

community throughout the course of the project.

The Company’s community relations strategy,POWERS (Partnership, Ownership, Win-Win,Empowerment, Respect & SustainableDevelopment) was initiated and adopted as theinternal guide for managing community relatedengagements on all Company projects.

CASE STUDy - ENGAGEMENT WITH COMMUNITIES

OwnershipMake our stakeholders see themselves as partof the owners of our project. This way they willcherish and protect the facilities within theirlocality.

Win - winProactive in use dialogue to handle and resolveconcerns and disagreement with ourstakeholders.

EmpowermentProvide our stakeholders with variousempowerment programs which will go a longway to building trust and mitigating theprevailing restiveness and unemployment.

RespectRespect of the culture of host communities andintegrate it with the company’s core values.

Sustainable DevelopmentCollaborate with our stakeholders to initiate andimplement Sustainable CommunityDevelopment (SCD) programs/projects.

PartnershipHave strategic partnership relationship with ourstakeholders to build a long lasting mutualrelationship.


31

OGULAGHA KINGDOM IN OML 90

PROCESS SIGNIFICANCEReconnaissance visit To identify communities, understand the people, their culture, land and water

accesses, security situation, infrastructural gap, youth organizations, presence of other operators, etc.

Sending introductory letters to To intimate the relevant government functionaries, community leaders, and other the government and other stakeholders of the presence of the Company and plans to work in the area.strategic stakeholders

Courtesy Visits/Paying homage To express respect to the appropriate public authorities and community leaders before organizing an open stakeholders meeting and execution of any field activities.

Sending out the notice of open To provide an open forum for all stakeholders to hear about the Company directlystakeholders’ meeting from the Relationship Officers, air their concerns and expectations and rub

minds on matters of mutual benefit such as work programs, incentives to early completion, job opportunities, etc.

Conducting a Joint Need To collaborate with the local community to identify infrastructural gaps and the Assessment (JNA) critical common needs of the community stakeholders. Projects are selected and

recommended to the Company by the community for execution from the JNA exercise.

Requesting the local This allows the local stakeholders take ownership of the process of selecting theircommunity to elect their representatives. This body once elected by the community and communicated tocommon representatives to the Company through an official letter is recognized and inaugurated. For interface with Relationship example, in the Akepo operation the interface body is called the Ogulagha Officers Kingdom Development Committee (OKDC).

Executing an MoU An MoU is signed with the community. The MoU incorporates all agreements andobligations reached between the Company and the community.

Request for community reps to Based on the MoU and agreed project selection and execution plan, a local nominate community contractor is nominated by the community for the execution of a specific contractors for the execution of Sustainable Community Development Project. This in addition creates economicSustainable Community empowerment for the locals.Development Project.

Putting in place a structured While operation is going on, there are structured engagement meetings that arestakeholders’ engagement held to proactively review the expectations of the community and also monitorpost-MoU. the implementation of the MoU. This continues throughout the life of the project.

CASE STUDy - COMMUNITy RELATIONS ENGAGEMENT PROCESS



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Engagement with Governmentand Regulatory AuthoritiesOur Goal: Performing our obligations as goodcorporate citizens. Helping to construct the regulatorylandscape within which businesses can thrive.

The Engineering & Technology Organization (ETO) unitof the Company is charged with the responsibility ofthe realization from inception to completion of all majorengineering projects undertaken by the Company. Toexecute these projects, we require the collaborationand approval of various governmental bodies. Theapprovals sought depend on which government orregulatory body has jurisdiction over the geographicallocation of the project and the type of project.

Regulatory agencies engaged with:n Nigerian Content Development & Monitoring Board

(NCDMB)n National Assembly (NASS)n Nigerian National Petroleum Corporation (NNPC)n Department of Petroleum Resources (DPR)n Government sponsored eventsn State Universal Basic Education Board (SUBEB)

In addition, Oando Energy Resources (OER) has aGovernment Relations Department (GRD) whichfunctions as the official liaison between OER and thegovernment. In the other entities of the Group, thisfunction is primarily undertaken by their respectiveBusiness Development units.

The GRD interfaces with appropriate arms ofgovernment regulating the petroleum industry with theintent of promoting OER’s operational and corporatebusiness objectives.

In 2012 the engagements with regulatory agenciestook the form of meetings, stakeholders’ forums,conferences, reports, presentations and summons.However, the GRD usually operates using a monthlyrolling plan of engagements.


33

Engagement with BusinessPartners & VendorsOur Goal: To build capacity among vendors andbusiness partners in such a way that our sharedobjectives yield maximum results, strengthening smalland medium-sized enterprises (SMEs) in our supplychain and using our development initiatives to helpSMEs build a track record which would then enablethem attract more patronage.

Engagement Initiatives:n Contract meetingsn Vendor forumsn Vendor audits / Capability evaluationn Service Quality Reviewsn Tendersn “Lunch and Learn” sessionsn Training sessions by the Governance Officen Non-Governmental Organizations (NGOs)

Statement of business relationshipby Oilserv Limited

We are proud to be associatedwith Oando Gas and Power forthe opportunities granted toOilserv Limited to demonstrate itscapability in project deliverythrough projects involving theconstruction of gas distributionnetworks and the construction of

a power plant. This relationship has equallyenhanced our resource base through equipmentacquisition and capacity building of its personnel.We have also leveraged on these projects toempower other indigenous companies in the oiland gas sector through our subcontracting policy.

GROUP MD / CEO - EMEKA OKWUOSA

Statement of businessrelationship by Well WorldwideEnergy Logistics Ltd

Well-Worldwide has maintained abusiness relationship with OandoPlc’s energy services division,OES since 2009. Since then, Wellhas been rendering logisticssupport services to OES ranging

from freight, customs brokerage and haulage tomanagement services.

“Our relationship with Oando has contributed tothe growth and development of Well-Worldwide,especially in terms of professionalism andexpertise.”



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Engagement with our CustomersOur Goal: Building brand recognition, responsiveness tocustomer needs, providing our customers with value-added products and services and responding to feedbackfor continual improvement.

Oando Marketing Plc’s (OMP) customer care unit engageswith our customers in the downstream division.

Engagement Initiatives:n Customer feedback analysisn Customer satisfaction surveys n Customer meetings n Walk-in: These are office visitations whereby customers

can come into Oando in person to make theircomplaints/enquiries. Our walk-in centers are located atOando Terminal 1, Apapa and the Port HarcourtTerminal.

COMMERCIAL CUSTOMERSCustomers who purchase products and services for commercial use, such as aviation, construction, industrial and manufacturing companies.

END USERSThese are final consumers who purchase Oando Marketing’s product for their use.

RETAIL CUSTOMERSThese are service stations nationwide who service end-users. The following sub-categories fall under the retail stations:

COSS - Company Owned Service Stations, LDE - Loan Delivery Equipments and Gallonage.

INFLUENCER CUSTOMERSThese are regulatory agents who have stake in the operations of the business such as, Petroleum Tanker Drivers Association (PTD),

Petroleum Product Pricing Regulatory Agency (PPPRA) etc.

VMI - VENDOR MANAGED INVENTORyThese are commercial companies who enlist Oando Marketing PLC to manage the storage facilities and fuel dumps,

and supplying all their fuel needs.

VAP / eVAPValue Added Peddling: Companies with multiple operational sites across the country who require diesel (AGO) and lubricants e.g. banks, eateries etc. eVAP: Electronic Value Added peddling: These are mostly home owners who purchase product for

home use securely online.

TRANSPORTERThese are customers who manage Oando Marketing’s fleet for delivery of products.

Our Customers


35

n The 23% increase in service logs for 2012 is attributable tomore customers becoming aware of the OMP Customer CareUnit.

n The increase in product supply logs was due to the fuelsubsidy removal which had an impact on product availability.

n The increment in maintenance and repairs log was due tounavailability of spare parts (e.g. pumps, generators) toreplace faulty ones.

n Of the 4638 issues opened for 2012, only 6 of these areawaiting resolution at the date of this publication as the issuesinvolve substantial repairs

Gas Connect is the official monthly newsletter circulated to all customers as a medium for disseminating currentissues and getting feedback on the natural gas industryand other important topics.

CASE STUDy - GAS CONNECT

5000

4500

4000

3500

3000

2500

2000

1500

1000

500

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2011 2012 Issue Count

3566

4638

Customer Reported Issues 200018001600140012001000

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OurEnvironment

We are committed to achieving and demonstrating soundenvironmental performance by controlling the impacts of ouractivities, products and services on the environment, consistentwith our environmental policy and objectives. We do this in thecontext of increasingly stringent legislation, the development ofeconomic policies and other measures that foster environmentalprotection, and increased concern expressed by interested thirdparties about environmental matters and sustainabledevelopment.

We place a high premium on the environment in which weoperate; which is why we are constantly working on preservingand conducting our operations in such a way that reduces anynegative environmental impact to the barest minimum andimprove the way we use our resources in a more sustainablemanner.

We operate competitively, however, as a responsible corporateorganization; we adopt the principles of sustainabledevelopment, that is, development that is based onenvironmental protection, mutual respect and responsibilitytowards future generations.

Oando has continued to demonstrate improvement in itscapacity to carry out all its operations without adverselyimpacting the health and safety of our stakeholders, and withminimal impact to the environment.

The focal commitment of the Group to the minimization of theenvironmental impact resulting from its operations is expressedthrough our Environmental Health and Safety (EHS) Policy.In implementing our EHS Policy at all levels of our business; weensure that we put in place the following:n A functional Waste Management Plan (WMP);n Environmental Management Improvement Plan (EMIP);n Training of our staff on basic and vital EHS topical issues; andn Ensuring our operations are conducted in a manner that

guarantees efficient energy utilization and resourcemanagement.


36

NON-HAZARDOUS WASTE HAZARDOUS WASTE

GLASSES PAPER/ OTHER METALS/ OILy MEDICAL/FOOD CERAMICS PLASTICS PACKAGING DOMESTICS WOODS WASTE SLUDGE OTHER TOTAL

January 1871 51 711.5 624 1030.5 192 144 0 29.2 4653.2February 1280.5 29.5 243 185.5 257 96 150 2300 42 4583.5March 1692 78 650 597 636.5 121.5 148 0 31 3954April 1891 39.5 657 627 697.5 113 99 0 46.7 4170.7May 1393 46.5 152.50 78.5 123 127 86 0 31.3 2033.8June 1440.5 82 131 87.5 139 126.5 124 0 46.4 2177.4July 1484 44 143 115.5 108 113.5 10100 10000 27.7 22148.7August 1592.5 62 170 116.5 186 176.5 10087 10000 49.5 22377September 1961 57 359.5 248.5 305 158 30074 30000 42 63223.5october 1827 75 189.5 127.5 187.5 183 2207 6000 71.5 10843November 1528.5 45 151.5 133.5 149.5 126.5 1762 0 48.8 4001.8December 1532.5 53.5 131.5 101 182.5 000 1719 540 35 4421.5

19493.5 663 3690 3042 4002 1656.5 56700 58840 501.1 148588.1

2012 Waste Streams for Oando Plc.

Oando has continued to demonstrate improvementin its capacity to carry out all its operations withoutadversely impacting the health and safety of ourstakeholders, and with minimal impact to theenvironment.


37

n The noticeable increment in the volume of oily wasteand sludge generated between July – Septemberwas as a result of planned periodic tank cleaning atsome of our terminals. This involves the cleaning outof sump at the bottom of the tanks. The sumpcontains sludge and other oily constituents thathave accumulated at the bottom of the tank overtime.

n In addition, the onset of the rainy season causes awash-off of deposited oil, impacted soil and productfrom drainages and catchment areas into theseparator pits from where these deposits areseparated and later evacuated as oily waste.

n The increment in food waste occurred primarily fromour drilling rigs. The rise in the volume of wastegenerated was as a result of increased activity ofthe contractors on board. During rig move, there areusually less operational activities and thus, lessgeneration of food waste.

n Paper and packaging waste are largely from ourKaduna Lube Plant where our products andadditives are packaged. A spike in the volume ofpaper waste occurs when there is an increase inproduction.

After proper inventory, segregation and quantification into thedifferent streams, all waste is properly stored and evacuated ormanaged by an approved waste management vendor. WasteConsignment Notes (WCN) are written documentation whichdefine our waste management process from cradle to graveusing government approved waste management facilities.

Medical waste is incinerated and the residue managed bygovernment-approved vendors whilst contaminated soil ismanaged via the use of Thermal Desorption Unit and is trackedusing Waste Consignment Notes.

More than half of the food waste is generated by our threefunctional swamp rigs: OES Integrity, OES Teamwork and OESPassion due to the residential nature of their jobs.

Our Kaduna Lube Blending Plant which is responsible for themanufacture of our Oleum range of lubricants accounts for thebulk of the packaging waste – plastic cans/bottles and theircovers and cartons.

In the period under review, the Company had noadministrative/judicial sanctions levied against it for failure tocomply with environmental laws and regulations. Nor were thereany significant fines, non-monetary sanctions or cases broughtthrough dispute resolution mechanisms.

Waste ManagementBy the nature of our activities, the Company generates minimal toconsiderable amounts of waste in its vast operations across thecountry. These range from domestic waste such as garden,plastic and food remnants in canteens/kitchenettes within thelocations of operation to industrial waste such as, effluents andgaseous emissions, contaminated soil from spill sites andtanks/vessel cleaning, oily rags, batteries, glass-fluorescenttubes and fused bulbs, medical waste (expired drugs, soileddressing cotton, used needles, syringes), scrap metals, officewaste such as papers, packaging materials, etc. at theTerminals/plants/depots/Head Office and construction sites.Some of these waste materials have potential negative impact onthe environment. We are conscious of the amount of waste thatour operations generate and are constantly thinking of new andinnovative ways to reduce and recycle such waste.For the purpose of this Report, waste has been classified broadlyas hazardous and non-hazardous.

The waste generated from drilling cuttings and drilling muds byOER are 540 MT and 3,361 MT respectively. The services of ahazardous waste management company was employed todispose and treat the waste generated.

Oil SpillsOne of the most crucial problems facing the oil and gas industrythe world over is how to prevent oil spillages and in the event thatthey do occur, how to minimize their impact on the environment.At Oando, we hold ourselves to the highest safety standards, andthis applies not just to the welfare of our employees, but to theenvironment and host communities where we operate.

A system of tiered preparedness and response gives astructured approach to the process of adjudging oil spillpreparedness and responsiveness to incidents in the course ofour operations. It allows potential oil spill incidents to becategorized in terms of their potential severity and ensure that wehave in place the capabilities to respond timeously.

The Department of Petroleum Resources (DPR) classifies oilspills according to their severity. Oando also classifies spillsaccording to their levels of severity for notification and reportingpurposes, with three tiers typically defined in our Oil ContingencyResponse Plan.

For Tier 1 spills, the facility manager/host company has the soleresponsibility of controlling the spill. For tier 2 and tier 3 spills, theEmergency Response Team has the responsibility of controllingoil/chemical spill.

The Company maintained its level of excellence during the yearwith regards to spills. During the reporting period, 40,000 liters ofbase oil was spilled at a third-party customer’s facility in Ilorin,Kwara State. Compared to the spillage in 2011 of 68,441 liters,the spillage in 2012, totalling 44,186 liters (40, 000 liters (major)and 4,186 liters cumulative from all plants, terminals and depots)had relatively insignificant impact on the environment as theproduct was adequately contained with the facility’s bund walland recovered immediately.

The National Oil Spill Detection and Response Agency(NOSDRA) was established by the Federal Government ofNigeria by Act 15 of 2006 as a response to the persistentenvironmental degradation and devastation of the ecosystemespecially in the oil-producing areas of the Niger-Delta region. A draft bill amending the NOSDRA Act is currently beingconsidered by the National Assembly with the significantinclusion of the “Polluter Pays Principle". Basically, once this law is enacted, this principle would place legal responsibility and accountability on Oando in the event of any spill, land

contamination or air pollution. This also implies that Oando Plcwould bear liability regardless of whether it was caused by theCompany or its assigned contractor(s).

Our ultimate goal is to have no operational spills. To this end, wecontinue to focus our efforts on environmental safety andresponsiveness to actual spillage occurrences.

Emission to Air and Discharge into Water The emission of substances that destroy the ozone layer andother regulated pollutants from our Company processes andoperations are negligible as evident in our periodic air qualitymonitoring. In addition to in-house monitoring carried out by ourspecialists, air emission and effluent monitoring audits are carriedout periodically by independent consultants at our variouslocations to ensure compliance with regulations and also to getan independent opinion.

Effluentsn 656,000 liters of salvaged products from the draining of tank

effluents at Apapa.n 4000 liters from tank effluents at Onne.

All our key assets have effluent treatment mechanismsadequately maintained for effective operation. Since 2009,qualitative and quantitative information on effluent disposal inOando have been stored on our OER-EHS database.

Oando has a standardized procedure for air quality anddischarge–to-water monitoring. We conduct regular bi-weeklyand monthly air quality and effluent monitoring for all key assets.Reports of last year’s monitoring exercise reflect the Company’sconscious effort to further reduce our emissions and discharge-to-water. In 2011, over 97% of all the parameters monitored werewithin the Department of Petroleum Resources’ (DPR) specifiedlimit, whilst in the period under review, over 99% of all parametersmonitored were within DPR’s stipulated limit. Where theparameters exceed recommended limits, measures are put inplace to comply with the specifications immediately or tointroduce changes to operations.

OurEnvironment


38

Our ultimate goal is to have no operational spills.We continue to focus our efforts on environmentalsafety and responsiveness to actual spillageoccurrences.


39

compliance withregulations...

Average Air Quality Monitoring DataPARAMETERS Methods DPR Limit Average pH APHA 4500H+ 7.0-8.5 7.44

Temperature, OC Thermometer 25 22.40

TDS, mg/l APHA 2540-C N/A 463

Salinity, mg/l APHA 4500-B 600 95.72

Oil & Grease, mg/l ASTM D 3926 10 1.65

Turbidity, NTU APHA 2130-B 25 16.8

TSS, mg/l APHA -209D 30 29.0

Odour N/A N/A Objectionable

BOD, mg/l APHA 5120B 10 4.20

COD, mg/l APHA 5220B 10 6.87

HEAVy METALS Iron, mg/l APHA 3111 B 1.0 0.7

Chromium, mg/l APHA 3111 B 0.03 <0.001

Lead, mg/l APHA 3111 B 0.05 <0.002

Zinc, mg/l APHA 3111 B 1.0 0.16

Copper, mg/l APHA 3111 B 1.5 0.612

Parameter Units Method DPR Limit 0m 60m 200m 1km AverageNoise Level dB(A) ISO 1996- 1: 2003/Noise meter 80-100 58.2 42.4 41.3 36.4 44.58

SOx µg/m3 Instrumental/Portable Analyzer (100-150) 0.04 0.02 <0.1 <0.1 <1.0

NOx µg/m3 Instrumental/Portable Analyzer 150 0.01 <0.1 <0.1 <1.0 <1.0

VOC µg/m3 Gas Detection Tubes 160 4.26 3.10 1.06 0.40 2.21

CO µg/m3 Instrumental/Portable Analyzer N/A 0.06 0.04 0.01 0.01 0.03

SPM µg/m3 Instrumental/Portable Analyzer 250 86.13 64.02 29.01 13.45 48.15

CxHy µg/m3 Instrumental 0.1 <0.1 <0.1 <0.1 <0.1 <0.1

Radiation/LSA µS/hr Thermometer/Thermocouple N/A 0.08 0.08 0.08 0.08 0.08

Water ManagementWater management is an important global issue. Water is criticalto the sustainability of our business, which is why we recognizethe need to manage freshwater usage responsibly, withconsideration for communities, consumers and the environment.Despite its global importance, the impacts of freshwater supplyand water quality can be very local in nature. In light of this,building local awareness, skills and sustainable practices withlocal authorities and communities is crucial to our commitment tosuccessful water management.

Our sources of water are:n Boreholesn Water from the Lagos State Water Corporation

Energy ConsumptionAt Oando, we do our best to manage energy consumptiondespite the erratic electricity supply we have had to contend withfor decades in Nigeria.

Our primary source of electricity is the Power Holding Companyof Nigeria (PHCN) and we make use of generators powered byautomotive gas oil (diesel) and premium motor spirit (PMS) in theevent of power outage.

Diesel 479,629 liters Electricity 1,552,492 Kwh (5588.9712 GJ)PMS 39,385 liters

OurEnvironment


40

building localawareness, skills andsustainable practices...

WATER PRODUCED:5147.9m³/year

WATER RECyCLED:0.000432m³/year

At Oando, we do our best to manage energyconsumption despite the erratic electricitysupply we have had to contend with fordecades in Nigeria.


41

BiodiversityBiodiversity entails protecting plant and animal species and ecosystems. This is an essential component of our health, safety andenvironmental commitments. We address biodiversity conservation during the planning and development of major projects byconducting environmental impact assessments, collecting key environmental data and implementing mitigation and monitoringprograms to reduce impacts.

Significant impacts on biodiversity associated with our activities:Impact MitigationIncrease in noise levels ranging 1. Risk assessment/noise mapping.from 66.0 dB (A) in office areas 2. Additional wall erected to dampen the noise level between the office and the control roomand 89.3 dB at the exterior such 3. Reduced access and exposure time to noisy areasas the generator house. 4. Regular preventive maintenance

5. Use of ear muffs/ear plugs6. Medical surveillance

Impact MitigationIncrease in local ambient 1. Risk assessment.temperature as well as 2. Increasing the height of exhaust pipes above the buildingconcentration of air pollutants 3. Provision of ventilation and air conditionersfrom gas engines at our Akute 4. Rotation of Tasks and personnelPower Plant. 5. Air emission monitoring

6. Use of scrubbers

Impact MitigationSoil exposed to direct sunlight 1. Backfilling, with topsoil and subsoil.for a long period of time due to 2. Adequate cleaning up and site restorationexcavation activities at our Ekot 3. Allowing for natural attenuationEkpo, Aka Ibonda and Mfamosing sites, thus leading to excessive removal of moisture from the soil which in turn could have affected organisms dwelling in the soil.

Impact MitigationInadequate measures to contain 1. Routine maintenance of machinery to prevent spillthe spill of oil from machinery, 2. Mopping up spills with absorbent materialsrun-off or drainage water 3. Training and refresher courses for Operators and Technicianscontainment at our Ekot Ekpo site. These occurrences could have led to vegetation intake of contaminated water through contaminated ground water. Also, the ground water will finally contaminate streams and rivers when it flows into them.

Impact MitigationPossible displacement of illegal 1. Redesign of pipeline route to reduce impact on the socio economic wellbeing of the local occupants along asset footprint community

Impact MitigationDegradation of sites and nearby 1. Complete site restoration through backfilling, vegetation, planting of treesareas due to land acquisition, 2. Reduction of land take sizemovement of equipment and personnel.

Impact MitigationLoss of arable land biodiversity 1. Reduction of noise leveldue to movement of man, 2. Reduction of land takemachines and road construction 3. Making use of common roads as opposed to creating new accessduring construction. 4. Backfilling, vegetation and natural attenuation

Pipeline construction andBiodiversity In one of our pipeline projects, we had a pipelinethat traversed a palm plantation in Abak LocalGovernment Area (“LGA”) in Akwa Ibom state and arubber plantation in Odukpani LGA in Cross Riverstate.

The Project Management team in this case, consultedwith the management of both plantations and jointlyagreed a route that had the least impact. Theconstruction led to the felling of approximately 450 agedpalms at Abak and 850 rubber trees at Odukpani.

If this approach had not been adopted, there wouldhave been a significant impact on ecosystemdevastation and vegetation loss, which in turn wouldhave had an adverse impact on both the bioticcomponents (i.e. individuals, community or severalcommunities, plants, animals and other livingorganisms) and abiotic components (i.e. all non-livingforces in the habitat which affect organism), biodiversityand specie loss.

Adequate compensation was given to plantation ownersin Abak LGA and Odulpani LGA where the pipelinetraversed the plantations to assist them to plant moretrees than were felled.

The project as part of its community developmentprogram plans to adopt 13 schools in the 13government areas that the pipeline traversed.

In addition, during the construction phase of the project,over 500 indigenes were engaged to participate insome element of works (welders mate, fitter mate,riggers, surveillance etc). Locals who possessed somespecial skills (welders and qualified nurses) were alsogiven first right of refusal. The indigenes were alsoadequately compensated for land taken.


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Akute Power PlantThe Akute Power Plant is a 12.15MW IPPincorporating 4 x 3 MW gas-fuelled engines and theconstruction of a 13km natural gas pipeline. ThePlant was commissioned in February 2010 andcommenced full operation in 2011.

At the Akute Power plant, the significant impact of ouractivities on biodiversity has been the increase in noiselevels within the facility with noise levels reaching 66.0dB(A) in office areas. This has now been reduced to53.9 dB. We are committed to reducing the noiselevels further.

There has also been an increase in local ambienttemperature as well as in the concentration of airpollutants from gas engines. However, the Companyembarked on mitigating activities such as thereinstatement of a 13km Right of Way (ROW). Thecompletion of a noise mitigation project directed atreducing the noise levels within the office spaces toacceptable levels and the engagement of local laboursources for the reinstatement of gas supply pipelineROWs.

CASE STUDy CASE STUDy

Sustainability Considerations in MarineEnvironmentsIn order to preserve marine flora and fauna as well as ensureno disruption to inland waterway access, our gas & powerdivision insists on Horizontal Directional Drilling Technology(HDDT) for all pipeline river crossings, as illustrated below.

We are well aware of the impact of our operations onbiodiversity and our moral obligation to preserve the resourcesat our disposal. In light of this, we are in the process ofdeveloping and implementing a viable biodiversity policy thatwill ensure the responsible stewardship of environmentalresources. As a Corporate member of Nigerian ConservationFoundation (NCF), with registration certificate No 0000101, weintend to increase our engagement with the NCF by focusingon how to preserve the full range of Nigeria’s biodiversity andpromote sustainable use of natural resources for the benefit ofpresent and future generations.

In the preceding year, we embarked upon a tree plantingactivity called Plant-A-Tree at the ground-breaking ceremony ofour new Oando Marketing Head Office in Apapa, Lagos, Over20 trees were planted. We also contributed to the greening ofTerminal 1 access road and walkway with several species ofgrasses, shrubs, flowers and lemongrass.


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Illustration of Horizontal Directional Drilling.

OurEnvironment

Environmental Risks and Impact Assessment At Oando, prior to the commencement of construction works forany project, an Environmental Impact Assessment (EIA) isrequired by regulation to be carried out and necessary approvalsgranted. Thereafter, impact mitigation and monitoring would becarried out by the regulators to ensure that the EnvironmentalManagement Plan (EMP) submitted alongside the EIA Report isbeing adhered to. Once the adherence is confirmed, a finalapproval is given and an Environmental Impact Statement isissued, stating that no negative impact to the environmentoccurred or will occur in the future.

The process leading to the issuance of the Environmental ImpactStatement (EIS), as practiced in Oando, is described below:n An Application is made to the Federal Ministry of Environment

(FME) stating the Terms of Reference (TOR). The TOR willcontain the project description and processes to be carriedout to obtain the EIA report. This includes number of seasonsamplings to be taken, procedures to analyse the samples,study methodology and study area for the socio-economicaspect of the report.

n A site verification exercise is done by the FME so as todetermine how to categorise the project.

n A response is obtained from the FME granting approval for theEIA to be carried out and stating the category to which theProject belongs. The category of the project will determinewhether technical reviews will be performed with delegatesfrom FME only or will be inclusive of stakeholders to beimpacted by the project, i.e. members of the community.

n On approval of the TOR, the EIA exercise is carried out, usingcompetent consultants and scientists and copies of the draftreport submitted to Federal Ministry of Environment.

n The submitted reports are publicly displayed at each of theLocal Government Areas potentially impacted by the projectfor twenty one (21) days for review. All comments areforwarded to the regulators for collation and for further review.

n Subsequently, a technical panel review meeting is scheduled,which may include stakeholders within the project area.

n After the technical review, the FME grants a provisionalapproval for the construction works to commence whilstdetailing changes/clarifications to be made to the submitteddraft report. Also the letter granting approval will prescribe theapplicable regulatory fees to be paid.

n The requested changes are made to the EIA report and thefinal report is submitted with payment advice for theprescribed fees.

n Afterwards, the FME will conduct Impact Monitoring &Mitigation (IMM) exercises to ensure the EnvironmentalManagement Plan submitted is being adhered to.

n Once satisfied with the above, the final EIA approval is givenand an EIS issued.


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In the year 2012, the Company carried out Environmental Impact Assessments (EIA) and Impact Mitigation & Monitoring (IMM)exercises on the projects below:

S/ No Entity Project

1 Oando Gas & Power Alausa Integrated Power Plant (IPP) EIA / IMM

2 Oando Gas & Power Compressed Natural Gas (CNG) Plant EIA/IMM

3 Oando Gas & Power Greater Lagos IV Pipeline System EIA

An Environmental Impact Assessment (EIA) isconducted before we commence constructionworks for any project.


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Our Environmental Initiatives – Managing our carbon footprintn Providing free bus services to transport employees from

different regions to the Company’s sites, thus reducing thedaily use of personal cars by staff.

n As a company with international footprint, we intend to fullyimplement video conferencing facilities at all our corporateoffices globally to cut down on travel costs and reduce ourcarbon footprint.

n Maintaining targets such as zero spills, zero gas leaks, zerofire incidents, etc. as emphasized in our commitment towardsattaining the ISO 14001:2004 Environmental ManagementCertification (EMS).

n Training staff on the use of the Paperless Portal, our web-based collaboration tool which allows information sharing anddocument collaboration, thus increasing productivity, reducingpaper usage and wastage. All working documents andarchives are stored on Share point, our enterprise systemsportal, which reduces the need for printing and ultimatelycontributing to the global initiative on the preservation of trees.

n The introduction of Smart Print to further control printing byreducing printing to the bare minimum and minimizing ourspending on printing consumables. In 2012, this initiativesaved the Group 59.08% in printing costs. Before thecommencement of Smart Print, the cost to the Company ofprinting consumables was N69,549,366,13. Costs ofconsumables are now down by approximately 60% toN28,461,510.

n Reducing our diesel consumption by enforcing the 10 p.m.generator shutdown policy from Monday to Friday and 5 p.m.shutdown over the weekend by investing in solar-poweredUPS’; thus, minimizing our CO2 emissions and carbonfootprints as much as possible within our operatingenvironments.

n Extensive campaign of O-Gas by our Marketing Company forthe switch from the use of firewood and kerosene to LiquefiedPetroleum Gas (LPG) in households across the nation, as acleaner source of energy.

n The piping of natural gas to our Lagos terminal (energyquadrant), so that it runs on natural renewable energy asopposed to diesel, thus resulting in savings of over N100mper year.

n Reduction in carbon emissions generated from operationswhich can in turn be used as carbon credits such as thecompressed natural gas CNG concept and LPGs campaign.

In 2012, our marketing company embarked on anextensive media campaign with its O-Gas productaimed at reducing the carbon footprint of manyNigerian households by encouraging the switchfrom the use of firewood and kerosene to LPG as acleaner source of energy.

Oando Marketing Plc (OMP) developed a solution that aims to provide low-income householdswith affordable and accessible cleaner cooking fuels through low weight 3kg Liquefied PetroleumGas (LPG) cylinders with an integrated cooking ring. LPG is often considered the short-termsolution to deliver modern energy on a global scale for cooking applications and is consideredcleaner because of their inherent characteristic of low pollutant formation and emission duringhandling and use.

To fulfill the mandate ofuniversal accessibility, OMPseeks to enable over 580micro‐entrepreneurs asretailers of the cooking stoves.With this initiative, OMP seeksto reach millions of householdsover the next few years whilstaddressing the followingenvironmental issues directly:

Climate changeThe use of LPG reduces blackcarbon emission, which is thesecond most importantcontributor to global warming,adding 10‐20% to the rise intemperature.

Desertification andDeforestation This initiative also reducesdeforestation, anenvironmental threat that isparticularly worrisome inNigeria, which lost 55.7% of itsprimary forests between 2000and 2005 according to theFood and AgricultureOrganization of the UnitedNations.

Erosion and flood control: By reducing global warming,LPG contributes towardspreventing flooding,particularly at this point in timewhen flooding has become asubject of great concern allover the world and in Nigeria,where recent floods haveresulted in the loss of lives andproperty, OMP is poised tofacilitate a shift to a moresustainable fuel alternative thatwould help reduce the effectsof global warming.

Job creationBy virtue of the vast distributionnetwork that will be requiredfor a deep penetration toensure an effective switch,OMP will be creating aminimum of 37,000 jobs;ranging from distributors, tomicro franchises, before goodsget to the end-user.

OANDO 3KG LPG STOVE PROJECT (“O-Gas”)


46

CASE STUDy

Nigeria will benefitimmensely...

And preventsituations likethis...

The O-ACCESSInitiative wasDesigned forBOPParticipation

Immense opportunities exist in the mid/ bottom tier of the pyramid!


47

1. There is an Oil Spill Contingency Plan(Emergency Response Plan) in place which isupdated periodically.

2. There is an Insurance Policy covering oilspills.

A spill from a well or a leak from a pipecarrying crude oil or a leak from theFloating, Production, Storage andOffloading (FPSO) facility. This couldhave an adverse effect on theenvironment which could lead topenalties and fines being levied by theregulatory authorities, and could alsohave an adverse effect on the financialand operational target of the Company.

Catastrophic Rare Medium1

Control ActivitiesRisk Event Impact Likelihood RatingS/N

1. We have provided a detailed EmergencyResponse and Contingency Plan.

2. Dedicated EHSSQ officers are present at allCompany sites.

3. We have made significant investment inpersonnel safety and equipment

4. EHSSQ training is provided to ALL staff.

Uncontrollable Fire (Tier 3) at a well siteor production facility

Catastrophic Rare Medium2

1. We have provided a Disaster Recovery Policyfor the Group

2. Performance of a disaster recovery testperiodically to confirm the adequacy of thedisaster recovery process.

3. We have a detailed recovery plan for our ITinfrastructure.

Absence of a functional and detaileddisaster recovery process.

This may lead to the inability to functionin the event of a disaster.

Major Possible Medium3

1. Use of security escorts for all vesselmovements

2. Maintain good relationship with the community

Militants may block waterways and stopoperations

Moderate Possible Medium7

1. Secure long term contracts with customers.2. Actively participate in the development

new/cheaper sources of energy3. External scanning for alternative technologies

Impact of availableSubstitute/alternative energy forms toour business.

Minor Unlikely Low9

1. Adherence to camp rules (No un-authorizedmovement in & out of the rigs)

2. Journey Management System and accesscontrol system as a standard requirementbefore a journey can be made

Kidnapping of employees as a result ofmilitancy activities in the Niger Delta.

Major Possible Medium8

All assets are insured through the existing groupinsurance

Total loss of assets as a result of naturaldisasters or malicious acts

Major Likely High5

1. All necessary Insurance policies have beenprocured. e.g. War risk policy, Oilfield energypackage policy, Protection and Indemnity.

2. Adopt community relations initiatives such asemploying members of the community toensure we maintain cordial relationships

3. Dedicated community relations person withinthe entities

4. Security support from the government JointTask Forces.

Increased insecurity in Nigeria due toterrorist organizations creating anunfavourable working environment.

Catastrophic Possible High6

1. The company maintains good communityrelations with its host communities through theGovernment. and Community Relationsdepartments as well as the Oando Foundation

2. Adequate security is provided for companystaff travelling to troubled regions, using theSafety Intervention team.

3. A journey management plan is developed foreach journey undertaken by staff which wouldalert a response team in the event of a missingstaff

4. Staff are trained on what to do in the eventthey are kidnapped

Risk of injury or loss of personnel dueto community insurgency, kidnapping,terrorism or militancy

Major Likely Medium4

Environmental RisksIn 2012, notable sustainability risks were identified at the Sustainability Risk Assessment Workshops coordinated by the Risk &Internal Audit unit. The risks are:

OccupationalHealth & Safety

Occupational Health & Safety At Oando, we have put programs in place to educate staff ongeneral and specific health issues, such as safety briefings,toolbox meetings, EHSSQ (Environmental, Health, Safety,Security and Quality) monthly and quarterly town hall meetingswhere a particular health and/or safety topic is addressed.

Another means by which the health and safety of employees ismonitored is through the mandatory yearly medical check-up thatapplies to and is enforced for all staff. In addition to these, one ofthe mandates of the EHS unit is to ensure that all employees,before resumption of their duties, are given a proper induction onthe Environmental, Health, Security & Safety tenets that guide ouroperations, regardless of the nature of their jobs.

The Risk /EHSSQ Committee of the Board of Directors have theultimate responsibility for health and safety at Oando. Thiscommittee is ably assisted by the Oando Incident Review Panel,which reviews all EHSSQ incidents and provides its reports andrecommendations to the committee on a quarterly basis beforethe Group’s main Board meetings.


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Health & Safety First.


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1. Provision of ergonomic work stations.2. Awareness session on MSDs. 3. Observing regular breaks from workstation. 4. Assuming proper posture at all times.5. Observing proper lifting positions 6. Carrying out risk assessment7. Human factors engineering / ergonomic design.8. Convenient access to workplace (stairs, floor).9. Reducing the regularity and duration of the action.10. Transport & storage in bulk instead of small containers.11. Using lifting aids e.g. balancer, hoists.12. Job rotation and reduction of force used.13. Transport aids e.g. fork lift truck and trolleys.14. Effective training.

Head Office Musculoskeletal disorders (MSDs)

Health & Safety RisksLocation Health & Safety Risks

1. Good housekeeping, 2. Clean up of spills, wet or greasy floor,3. Use of non-slip floor coverings,4. Use of proper personal protective equipment (PPE) and footwear.5. Ensure all workstations are properly lit. No dazzling lights or glare to

obstruct vision.6. Staircases are constructed with current building regulations. Treads

and risers are of the correct and consistent size and height. Weensure handrails are provided with roughened tread surfaces andproperly maintained.

7. Planning work procedures such as the ergonomic design ofworkstations.

8. Information and training on the risk and injury of slips, trips and falls.

Slips and falls

1. Providing anti-reflective lighting systems.2. Encouraging the use of sun blinds.3. Providing adequate illumination.4. Use of screen covers.5. Proper seating positioning at workstations.6. Regular eye checks.7. Regular computer-screen breaks.8. Staff training.9. Risk assessment of workstation/design10. Adequate provision of furniture.11. Provision of docking stations for prolonged laptop use12. Encouraging a work/rest schedule and the use of pause software

Optical Injuries

Key health & safety risks our employees are exposed to are:

In addition to dealing with health and safety incidents in accordance to our EHS Incident InvestigationProcedure and Emergency Response Procedure, we have put the following mechanisms in place to mitigateour identified health & safety risks:n Provision of adequate safety training for employees in all locations, e.g. EHS Levels 1 – 3 trainingsn EHS Proceduresn EHS Life-Saving Rulesn Provision of personal protective equipment (PPE)n The use of material safety data sheets (MSDS) and safe handling of chemicals (SHOC) to provide

personnel with procedures for handling or working with a particular substance in a safe manner, informationon toxicity, health effects, storage, reactivity, disposal, etc.

n Proper maintenance of all equipment.



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1. Fire Training, 2. Drills, 3. Use of fire trucks, 4. Fire hydrant pumps, 5. Smoke detectors, 6. Fire alarms, 7. Chemical foams/monitors, 8. Use of sprinklers and fire extinguishers, etc.

Terminals Fire

Health & Safety RisksLocation Health & Safety Risks

1. Risk Assessments, 2. Provision of information on the control of substances hazardous to

health regulations.

Abrasions from contact to chemicalsubstances

1. Human factors engineering/ergonomic design 2. Provision of ergonomic work stations, 3. Awareness session on MSDs, 4. Observing regular breaks from workstation, 5. Assuming proper posture at all times.6. Observing proper lifting positions.

Back injuries

1. Closed System Vapour Recovery Units2. Local exhaust ventilation3. General ventilation4. Provision of material safety data sheets (MSDS) and safe handling of

chemicals (SHOC).5. Proper labelling6. Staff training7. Provision of nose masks/ chemical visors8. Restricting staff from eating meals in work areas.

Respiratory infections

1. Provision of hand gloves2. Provision of aprons, coveralls and protective footwear.3. Clear labelling of containers.4. Restricting duration of staff exposure.5. Designing a safe system of work for handling substances.6. Provision of MSDS/SHOC

Skin infections

Key health & safety risks our employees are exposed to are:


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698 ( OES Rigs and OMP head office / KLP & Apapa TerminalStress Management training 411

No. of Expected ParticipantsTraining/Activity No. of participants

No. of Expected AttendeesTraining/Activity No. of participants

44 ( Branch managers & Retail Analyst)Effective Management Of EHSSQin Retail and Commercial Activitiesfor Business Growth

25

46 ( Lister staff)ISO 9001:2008 Awareness trainingFor Lister Terminal

31

573 ( OES Rigs, OMP, KLP & Apapa)Accountability And ChangeManagement

469

269EHS Level 1,2,3(Classroom) 149

591EHS Level 1(Computer based test) 581

1347 excludes rigs staff off-dutyEHSSQ Week 701

Some of the trainings/activities that the EHS unit put together for staff in 2012 are contained in the tables below:

Trainings on OES Rigs (Teamwork, Integrity & Passion)

Environmental Health and Safety Leadership 57 50

Ergonomics Awareness 52 52

Risk and Human Failure 57 57

14 life Saving Rules 60 60

Stress Management 175 175

Safety Leadership 3 3

Environmental Awareness 117 117

Advanced Cardiac Life Support 2 2

First Aid Administration 92 92

Fire Prevention/Fighting 42 42

Advanced Fire Fighting 64 64

Rig Safety Awareness 84 84

Rescue At Height 6 6

Major Emergency Management 2 2


EHSSQ/SCA WeekSince 2008, our EHSSQ Week has become an annual affair. Eachyear, the Week focuses on a particular aspect of EHSSQprocesses and is denoted by a theme.

The theme of the 2012 EHSSQ/SCA Week was “You see it, youown it”, which promoted EHS responsibility and accountabilityamong everyone in the Company.

World Malaria DayOando has been at the forefront of actions that minimize pollutionand waste, utilization of renewable resources and assistsgovernment and pertinent agencies to introduce the right policiesneeded to manage environmental impacts. We work closely withboth federal and state agencies to develop effective andworkable policy frameworks aimed at reducing negativeenvironmental impacts.

The Company supported the Global Fund’s World Bank MalariaGlobal Strategy and Booster Program, which is a 5-year plan witha 3-year intensive phase to support malaria control activities incountries suffering a heavy strain of the disease by donatingN2,000,000 (Two Million Naira) worth of Oando Insecticide to theNigeria Malaria Programme in 2011. In 2012 we supported thesame organization with the distribution of insecticide-treatedmosquito nets across the region.


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World AIDS DayYearly, Oando joins the rest of the world in marking theanniversary of World AIDS day. We celebrated the 23rdanniversary with the sub-theme “Getting to zero” whereby theCompany through its EHSSQ department, sought to createawareness of the disease among its members of staff in order toengender sexual behavioural change that would help stem thespread of HIV and AIDS in the society.

Apart from general information made available to staff in forms ofposters, memos and other forms of electronic advertisements,road walk, Oando also invited People Living with HIV/AIDS(PLWHA) to have interactive sessions with staff at the differentOando offices.

Tracking health & safetyOne of the ways in which we keep track of our occupationalhealth and safety performance is by our Action Tracking System(ATS). The Action Tracking System is an electronic template thatallows the EHS team to monitor all EHS activities and EHSperformance in all Oando entities. The template containsinformation on Hazard Identification Reports (HIRs), fatalities,Lost Time Injuries (LTIs), accidents (including road transportaccidents, oil spillage, marine accidents, etc), near misses,unsafe acts and unsafe conditions, man hours worked, medicalwork cases, First Aid cases, waste management, etc. Forexample, in 2012, a total of 14,124,000 hazards were identifiedand reported.

There were 3 fatalities associated with our operations in 2012compared to 15 fatalities in 2011 with fewer man-hours. Whilecelebrating our improved EHS performance, we are deeplysaddened by these losses and will continue to strive towardsachieving our target of zero fatalities in our operations.


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Rates of injury, occupational diseases, lost days, absenteeism, and total number of injuries by entity

Entity Total No. of Employees Total lost Occupational Lost and work day Injury Diseases Day Absenteecontractors cases Rate Rate Rate Rate Fatalities

OMP 758 0 0.49 0 0 0 2

OGP 92 1 2.5 0 0 0 0

OES 446 0 0.25 0 0 0 1

OEPL 47 0 0 0 0 0 0

S&T 47 0 0 0 0 0 0

GROUP 257 0 0 0 0 0 0

TOTAL 1684 1 3.24 0 0 0 3

Apart from general information madeavailable to staff in forms of posters,memos and other forms of electronicadvertisements, road walk, Oandoalso invited People Living withHIV/AIDS (PLWHA) to have interactivesessions with staff at the differentOando offices.


SecurityThe success of our business in Nigeria is hinged on a safe andsecure working environment. This applies to our employees,contractors and other stakeholders, such as local communitiesand partner organizations. In this respect, Oando aims tominimize the risk to its business, physical assets, employees andother stakeholders.

Total number of security personnel employed by Oando in 2012n 444 (third-party/indirect)n 17 (directly employed)

The majority of our security personnel are third-party staffprovided by private security companies and mobile police(MOPOL) from the Nigerian Police Force. Part of the criticalelement of the technical evaluation process in the selection ofsecurity service providers include the availability of a trainingschool, a fully stocked library and training instructors, frequencyof re-training of security personnel, the quality of our trainingprogrammes, the ongoing assessment criteria that third partypersonnel undergo, availability of patrol vehicles, incident controlroom and security apparatus.

In the period under review, we put in place the followingadditional security measures: n A corporate security policy and plan for enhanced security

management system was launched.

n 40% of security personnel contracted to us have receivedformal training on the organization’s policies and specificprocedures in respect of human rights issues and theirapplication to security. They have also received training onHSE Level 1, fire marshal training and MOPOL CompactOperative training. Most of the security personnel trained arethose present in the Head Office and Apapa Terminal. Byvirtue of the complexity of our operations vis-à-vis ourwidespread presence in Nigeria, centralized training of allsecurity personnel is sometimes not achievable especially forthose in remote areas. The Security unit is currently workingout logistics arrangements on how to integrate the othersecurity personnel who work in remote areas in subsequenttraining plans.

n 181 third party security staff were trained in 2012.


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We are heavily involved in theoperations of our third-partysecurity staff.

Security ChallengesIn our Marketing division, OMP, security challenges wereexperienced particularly in the Northern region of Nigeria, whichinvariably led to reduced economic activities. There were casesof pipeline vandalism on oil and gas distribution networks acrossthe country, which also reduced product sufficiency fromPipelines and Product Marketing Company (PPMC) and itsdepots nationwide.

Thankfully, despite these challenges, the Marketing division stillrecorded positive results in its revenue and gross margins by20% and 4% respectively.

In our gas & power division, OGP, 4 days of partial gas outageoccurred as a result of pipeline vandalism. In light of theseoccurrences, we have put in place increased surveillance alongthe Right of Way to prevent any further vandalism to ourpipelines.

The Movement for the Emancipation of the NigerDelta (MEND)One of the greatest threats to oil & gas companies operating inthe Niger-Delta region of Nigeria was the militant group, MEND.This group aims to expose exploitation and oppression of thepeople of the Niger-Delta region and the devastation of thenatural environment by public-private partnerships between theFederal Government of Nigeria and corporations involved in theproduction of oil in the Niger-Delta region.

MEND was allegedly linked to attacks on petroleum companies’facilities and operations such as sabotage, theft, propertydestruction, guerilla warfare and kidnapping in the Niger-Deltaregion of Nigeria.

A laudable amnesty programme was introduced with the aim of,among other things; assisting in the disarmament,demobilization, rehabilitation and integration of remorsefulmilitants. Under the programme, thousands of youth wereexpected to undergo vocational training in various centers withinand outside the country for the acquisition of skills in relevantfields. Some were also to be enrolled in formal schools. The firstphase of the programme, which was initiated by the late formerpresident, Umaru Musa Yar’Adua, commenced with 20,192beneficiaries in 2009. The second phase took off in 2010 with6,166 beneficiaries while the third phase slated for 2012/13caters for 3,642 beneficiaries.

The government is in constant consultation with the aggrievedgroups in providing various respites and its efforts have broughtrelative peace to the region.

The control mechanisms put in place in order to mitigate theimpact of MEND on Oando’s operations in the Niger-Delta are asfollows:n Ensuring all necessary insurance policies are in place e.g.

War Risk, Oilfield Energy Package; and Protection andIndemnity insurance policies.

n Our POWER’s Community Relations Strategy which includesthe adoption of initiatives such as employment of members ofthe community to ensure we maintain cordial relationships.

n Availability of dedicated community relations personnel withinthe Group’s entities.

n Engaging the services of the Government’s Joint Task Force(JTF). The JTF is composed of troops from the army, navy, airforce and mobile police, set up in 2004 to restore order in theNiger-Delta.

n The use of security escorts for all vessel movements.

n Enforcing the Journey Management System and Permit toWork system as a requirement before a journey can be madeoutside base and before embarking upon non-routinehazardous work.


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safe and secureworking environment...

Our POWER's community relations strategyincludes the adoption of initiatives such as theemployment of members of the community, so asto empower the local communities we encounter.

The Oando “TRIPP” values and our Code of Business Conductprovide a foundation for our commitments to ethical andresponsible business practices.

Our adherencen We respect employees’ rights to Freedom of Association and

Collective Bargaining. n We respect employees’ rights to join, form or not to join a labor

union without fear of reprisal, intimidation or harassment. n Where employees are represented by a legally recognized

union, we are committed to establishing a constructivedialogue with their democratically chosen representatives. Weare committed to bargaining in good faith with suchrepresentatives.

n We adhere to the Nigerian Labour Law which prescribes aminimum age of employment.

n We are dedicated to maintaining workplaces that are free fromdiscrimination or physical or verbal harassment on the basis ofrace, sex, colour, national or social origin, religion, age,disability, sexual orientation or political opinion.

n The basis for recruitment, hiring, placement, training,compensation and advancement at the Company is basedsolely on qualifications, performance, skills and experience.

n We compensate employees competitively relative to theindustry and local labor market.

n We operate in full compliance with applicable wage, workhours, overtime and benefits laws. We offer employeesopportunities to develop their skills and capabilities andprovide advancement opportunities where possible.

n We provide a safe and healthy workplace and are dedicatedto maintaining a productive workplace by minimizing the riskof accidents, injury and exposure to health risks.

n We are committed to maintaining a workplace that is free fromviolence, harassment, intimidation and other unsafe ordisruptive conditions due to internal and external threats.Security safeguards for employees are provided as neededand will be maintained with respect for employee privacy anddignity.

n We recognize our impact on the communities in which weoperates and as such we are committed to engaging withstakeholders in those communities to ensure that we arelistening to, learning from and taking into account their viewsas we conduct our business.

n We create a workplace in which open and honestcommunications among all employees are valued andrespected.

Human RightsIt is generally believed that it is the government’sresponsibility to protect human rights. However, atOando, we believe we must act with due care andrespect for the human rights of all citizens andnon-citizens wherever we operate.


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We adhere to theNigerian Labour Lawwhich prescribes aminimum age ofemployment.

Zero Tolerance to Human Rights ViolationsOando PLC is firmly committed to the principle of equality ofopportunity in employment and human relationships ashighlighted in the United Nations Universal Declaration of HumanRights 1948, Articles 1 and 12.

Oando PLC is committed to providing a workplace that valuesdiversity and promotes inclusiveness.

Acts of harassment by or against any employee of the Companyare viewed as serious offences and will not be tolerated.Management is committed to keeping the work environment freeof harassment and intimidation and is supportive of productivity,the personal dignity and self-esteem of all employees.

Acts of harassment are treated on a case-by-case basis andattract the required disciplinary measures if proven.

All acts of harassment are reported to the Human Resources(HR) Business Partner through an officially documentedcomplaint by the employee claiming to have experiencedharassment.

The HR Business Partner will institute an independentinvestigation into such an allegation after which appropriatedecisions shall be taken and disciplinary measures instituted, asappropriate, in accordance with our Grievance Procedure andSanctions Policy.

Proven cases of harassment may warrant a summary dismissalfor the offender.

Allegations of harassment are very serious, and any employeefound to have made an untrue claim of having been harassedshall himself/herself be subject to serious disciplinary action upto summary dismissal.


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committed toproviding a workplacethat values diversityand promotesinclusiveness...

Recruitment, Selection & Attrition ManagementNumber of employees in the Company

Number of employees in the Company OES OMP OGP OER OSHS/Group OST Total

Permanent Staff (Active) 159 285 56 42 142 25 709Permanent Staff 3 10 1 O 4 1 19(On study-leave or leave without pay)

Contract Staff 254 422 27 6 63 6 778Consultants 34 6 1 3 7 1 52Interns 0 3 8 7 2 0 20Total 450 726 93 58 218 33 1578

Consultants that are Expatriates

OES 21

OMP 2

OER 1

TOTAL 24

Employees recruited to the Company in the reporting period

Category Gender Age GroupSenior 74 Male 234 20 -30 80

Management 10 Female 31 31 - 40 133

Third-Party 181 41 - 50 38

51 and above 14

TOTAL 265 Total 265 Total 265

Attrition rate

Category Gender Age GroupSenior 80 Male 84 20 -30 24

Management 30 Female 28 31 - 40 49

Third-Party 2 41 - 50 37

51 and above 2

TOTAL 112 Total 112 Total 112

Our Employees

Our employees are our most valuable assets without whom we cannot achieve our business objectives. During the period under review,our priorities were focused mainly on broadening, consolidating and institutionalizing existing initiatives and processes with particularemphasis on improving talent acquisition architecture, performance management culture and strengthening leadership capability throughtalent development.


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59

Statement of relationship fromEstymol Oil Services LtdMaureen Okoro-Sokoh (Managing Director / CEO)

Estymol is one of the keyhuman resources serviceproviders to Oando Plc andwe have had the wonderfulprivilege of partnering with theCompany from the inception ofour Company in 2009.

Estymol has indeed gained alot from Oando througharranged vendor trainingsessions (E-procurement,

Compliance) and also customer forums which gives usa feeling of strategic business partnering. At theseforums, we are educated on the current and futureobjectives of the Company. This enables us to becomeproactive in our service delivery to support Oando’s newinitiatives.

Definitely the story of the business successes andgrowth of Estymol cannot be told without mentioningOando Plc, as they gave us at Estymol the opportunityand encouragement to get started and grow into astrong human resources outsourcing organization and aservice provider of choice nationwide.

Trainee ProgramsThe Oando Graduate Trainee (GT) ProgramInitiated in 2008 the GT Program continues to attract the verybest of young minds from across various disciplines. In 2012, weattracted 12 young professionals (trainees) to the GT programafter an extensive and thorough process to select the bestcandidates. All successful trainees from previous batches havebeen fully integrated into the Company as full term permanentemployees.

Rig Trainee ProgramWith 16 trainees on the Program, this program is designed to bean intensive 36- month process which will give trainees on-the-job and classroom training. As part of the program, the traineeswill work offshore alongside rig crew members to gain hands-onexperience.

Procedure for hiringAll vacancies in Oando are posted online on our Careerswebsite. Our goal is to recruit applicants who are best-suited tothe positions we seek to fill without regard to gender, race,religion, nationality or age, as we encourage equal opportunitiesin access to jobs, pay and promotions.

Our recruitment is a five step process:

n On-line applicationn Screening and short listing of

candidates

n First level interview forshortlisted candidates

n Second level interviews forsuccessful candidates fromstage 3

n Employment offer

„„„

Our Employees


60

The employee was summarily dismissed.OES Repeated unauthorized absence from work

Outcome Entity Brief statement on issues

The Disciplinary Committee recommended thatthe employee should be strongly reprimanded forunprofessional behaviour

OES The employee was found to have breachedour Confidentiality Agreement

Employee Disciplinary Proceedings

Succession PlanningThe Company currently has a succession plan in place wherecritical roles in each business entity are identified, thevulnerability of each role and the incumbent are analysed.Successors are then identified for these critical and vulnerableroles and their readiness levels determined. The system is drivenby our Competency Framework, which was implemented thisyear. The Framework allows the Company to measure its currentcompetency levels to ensure that our employees have therequisite skills for their roles to enable them continually add valueto the business.

Talent Management and Employee DevelopmentEmployee development is a continuous process, which is why wetarget a range of courses to help enhance our employees’productivity. We achieved this through the implementation of acompetency-centric approach to learning and development,enhancement of our performance management process andincreasing employee capabilities through structureddevelopment programs. Employee training is usually in the formof internal, external training courses and the provision ofsabbatical periods to undertake training courses and furthereducation.

During the reporting period, 419 full-time employees weretrained, which amounts to a 40% increase in comparison to theprevious year.

We have the OMP Training School located near the Trade FairComplex in Lagos which has been up and running since 2011and can accommodate 90 delegates. This facility was set up forthe purposes of providing a state of the art training facility wherewe could conduct various in-house training programs foremployees and business partners in line with our TalentManagement Model, which aims to conduct job-specific trainingthat would address specific competency gaps in the downstreamsector, Over the reporting period, 30 in-house workshops wereheld at the Training School

We value theirdevelopment andadvancement.


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Remuneration and BenefitsOur employees are the key source of our long-term competitiveadvantage, we offer our employees the opportunity to share inthe Group’s success by owing shares. We believe this will have apositive impact on performance.

We carried out a survey on salaries which confirmed ourcompetitiveness within the industry and in line with our corporatereward strategy. In addition, as an employer of choice, we haveimplemented salary reviews whereby employees are awarded apay rise based on their performance as well as to help cushionthe effect of inflation in the economy.

We have a wide-range of benefits available primarily, to full-timeemployees that address the health, wellbeing and safety of ouremployees. Our benefit plans are reviewed regularly to ensurethat we remain competitive and consistent with the employees’goals as well as ours; which results in attracting and retaining acompetent workforce. The ranges of benefits vary by cadre andlocality and are designed with our people’s precise needs inmind.

The Group operates a defined benefit gratuity scheme in Nigeria,where members of staff (management and senior) who havespent 3 years or more in employment are entitled to benefitpayments upon retirement. The benefit payments are based onthe final emolument of staff and length of service.

The Group also operates a defined contribution retirement benefitscheme for its employees in the form of a pension scheme whichis funded by contributions from both the Group and theemployees.

Types of benefits:Retirement and savings plan, Group Life insurance, Grouppersonal accident/Workmen Compensation insurance cover,health insurance, social and professional club subscriptions,time-off benefits, mortgage facility, car grants, etc.

Oando Employee Equity Participation Scheme(OEEPS) Given our belief that our employees are the key source of ourlong-term competitive advantage, we offer our employees theopportunity to share in the Group’s success by owing shares. Webelieve this will have a positive impact on performance.This Scheme commenced in 2011 and as at December 2012,11,606,569 shares have been listed on the Nigerian StockExchange based on units offered to eligible employees under theEmployee Stock Option Plan.

Employee Survey Report: “Focus Group Sessions on Internal communicationsin Oando” - A survey carried out by the corporatecommunications team across select Oando officesin Lagos, Port-Harcourt, Apapa, and Kaduna.

Findings:n Current communications tools are adequate, but

need to be better and more efficiently deployed.n The Company’s intranet needs to be updated more

frequently and outdated information removed.n The intranet and email remain the top two

communications tools across locations.n Text messages are popular with employees and can

be utilized as a tool to summarize importantmessages and redirect employees to their email forfull details.

n Respondents in out-of-Head Office locations aremore eager to receive internal communications.

n Respondents across locations want the “Whazz Up”bulletin back.

n Respondents assent to being fairly knowledgeableabout company activities

n The consensus is that messages are delivered lateand often “after the fact”.

n Respondents in out-of-Lagos locations (and to somedegree in Apapa) feel neglected in the overallscheme of things.

n Respondents in Head Office come across as jadedand cynical in how they perceive and receive internalcommunications.

n Respondents in Head Office indicate a need for adedicated internal communications champion in theCorporate Communications Department.

CASE STUDy

Our Employees

Collective BargainingOur employees are accorded the freedom to join unions. Oando’spermanent senior staff predominantly belong to the Petroleumand Natural Gas Senior Staff Association of Nigeria(PENGASSAN).

The Oando PLC PENGASSAN branch has a Branch ExecutiveCouncil who manages the affairs of the union, deals with labourdisputes and grievances at the branch; and ensures propercommunication between the Company, the PENGASSAN zonaloffice and the PENGASSAN national office.

Collective Bargain Agreements (CBA) are executed betweenPENGASSAN and the Company to ensure there are stipulatedterms and conditions regarding employment and terms regardingresolution of conflicts between labour and Management. TheCBA also ensures a peaceful working environment for all andgreater productivity as the Company sees it fit to increaseworkers’ pay in consideration of inflationary rise in the countryand to reward employees for their vital role in the Company’ssuccess.

Number and percentage of employees covered by CBA by entity

No. of Employees No. of Covered Employees % Per

SN Entity by CBA in Entity Entity

1 Oando Marketing 239 295 81%

2 Group 34 66 52%

3 Shared Services 54 90 60%

In the CBA, the Company agrees to maintain the Oando Plc JointConsultative Committee, which shall comprise of sixrepresentatives each from the Association and Oando Plc toconsider issues relating to Oando Plc’s staff welfare and benefitprogramme. Consultative meetings are to be held once everyquarter and in the event that there are any significant operationalchanges that could substantially affect the Association, theCompany is mandated by the CBA to communicate the changesto the Association immediately.

Most items are quickly negotiated and agreed between theparties. However, there are times when there have beenprotracted negotiations between Oando Management and theunion representatives. For example, the usual practice hasalways been that CBA negotiations for the following yearcommences in the fourth quarter of the current year (i.e. 2013/2014 CBA negotiations commence in Q4 2012) to allow for early closure. Although the negotiation began inSeptember/October 2012, the CBA is yet to be finalized andexecuted.


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n Annual Employee Satisfaction Surveyn Annual Career Fairn Annual Market Salary Surveyn Employee Individual Development Plan (IDP)n Institution of succession plans for each critical

role within the organization

Inability to hire or retainindividuals with the rightcompetencies and skills

Attrition andSuccessionPlanning

Moderate Possible1

Control ActivitiesRisk Event Impact Likelihood LikelihoodS/N

n Development of a talent managementstrategy.

n Creation of functional career paths.n Institution of succession planning as an

on-going exercise and creation of a gapanalysis for transitions.

Inadequate successionplanning

Moderate Likely Medium2

n Performance management training sessionsfor Line Managers.

n Policies clarification/reiterationn Increased performance monitoring

Ineffective coaching &mentoring

Attrition andSuccessionPlanning

Moderate Likely3

n Filing and retention of human resourcerecords appropriately.

n Input and adjustment of new staff recordsrestricted to only the HR analyst

n All changes and input to staff records arereviewed by the HR business partner

Personnel records are notproperly kept by thehuman resourcespersonnel

Employee dataprotection

Moderate Unlikely4

n Appraisal of employees performances arediscussed with subordinate and thesupervisor and reviewed by the departmenthead.

n Measurement criteria are preset on Oracleand rating is automatically calculated.

n The Chief Human Resources Officer (CHRO)reviews all performance evaluation rating andcompares with overall entity performance toensure consistency.

Bias in evaluation ofemployees performance

EqualOpportunity

Minor Possible13

Labour related risks and impact assessmentThe Human Capacity Management (HCM) specialist within each entity and the Group is responsible for ensuring the identified risksdo not crystallize. Where risks have been identified, controls are designed to mitigate these risks.

Some of the risks relating to changes in the workplace, i.e. restructuring, redundancies, attrition, succession planning, equalopportunity and employee data protection include:

Investing in ourCommunities

Oando PLC believes in proactively engaging hostcommunities before commencing operations onany project and as such, the communities arecarried along and given opportunities to activelyparticipate in the project.

We go further to deploy considerable resources in ensuring thatgood relations are maintained with the societies in whose areaswe operate during the project execution phase, by engaging withlocal communities and meeting their needs through employment,the establishment of community centers and schools etc. Oandoensures that the local communities are satisfied with ouroperations within their environment and are confident that theirhuman rights are respected.

The Company engages with the government regarding the NigerDelta militant activity to ensure that it is abreast with anydevelopments in this area. However, by engaging with the localcommunities and ensuring that their rights are protected, wesignificantly reduce the likelihood of militant activity against ouroperations.

Oando has introduced a new concept of providing pre-entryprojects in communities where it intends to work or where itsassets are located. Projects are not imposed on the communitiesbut are discussed and agreed with the communities based on acollaborative needs-based analysis. Established communicationlines are sustained and maintained and any feedback receivedfrom the communities are promptly addressed.

For the avoidance of unnecessary friction, the Companynegotiates and executes either a Memorandum of Understanding(MoU) or a Global Memorandum of Understanding (GMoU)depending on the composition and relationship of thestakeholders in the particular area of operations. In the MoU orGMoU, agreements are reached on issues that are known tohave historically caused friction between the communities and oilcompanies. The MoU is usually the reference point in the event ofa dispute arising.

In addition, members of the local communities are empoweredby being gainfully employed by Oando. For the operation of OES’Passion, Teamwork and Integrity rigs in various communities,allocation was made for the employment of members of hostcommunities into various job roles as part of community relationsand people’s development. A total of 40 people, representingabout 13% of the workforce on the three rigs were employed fromhost communities.

Because we believe highly in giving back to our communities, atOando, we have chosen to implement our Corporate SocialResponsibility (CSR) projects in the areas of education,infrastructural development, health, sports and employment. Ourpolicy is to empower individuals within the communities to befinancially stable and gainfully employed. The Company alsoencourages our joint venture partners and contractors to fillsuitable positions from host communities as a form ofempowerment.


64

Oando has introduced a new conceptof providing pre-entry projects incommunities where it intends to workor where its assets are located.Projects are not imposed on thecommunities but are discussed andagreed with the communities based ona collaborative needs-based analysis.

Employee Community Involvement At Oando, we support the personal giving of our employees andencourage them to become involved in the communities weoperate in.

The Oando Foundation launched the Employee VolunteerProgramme (EVP), tagged “Inspired Hands”, as part of activitiesto mark the annual United Nations Volunteers Day on December5, 2012, to which, over 100 employees have signed up.

The EVP essentially provides a platform for employees to givetheir time and talent to create a positive change and uplift thelocal communities they live and work in. Each employee isexpected to volunteer in the following areas: teaching assistance,mentorship, donations, librarianship, advocacy and fundraising.


65

Our Contribution to SustainableCommunity Development / CSRInitiativesTo improve the lives of our host communities, wecontributed to the following through Joint VenturePartnerships:n More than $3m was spent in community

development projects as approved by the TrustFund Board in 2012 for OML 56 communities.

n 100 indigent children from the communities whereGaslink operates in Lagos were sponsored underthe Back-to-School programme.

n 38 members of the Xplicit Dance Group, a groupmade up of mostly orphans and indigent childrenwere awarded tuition fees and provided withcomputer equipment.

n Construction of a 1km stretch of road in Obodugwa,Delta State.

n Renovation of 2 dilapidated primary school blocksin Obodugwa.

n Construction and commissioning of an ultra-modernmarket at Ebendo, Delta State.

n Construction of a mini-housing estate with potablewater in Obodugwa.

n Construction of three (3) classroom and officebuildings at Umusam Ogbe School, Delta State.

n Construction of three apartment buildings withborehole and electricity supply.

n Facilitation of an educational remedial program.n Elders welfare programn Procurement of two Hilux trucks for transportation

purposes (trucks already leased to EnergiaLimited).

n Construction of a 12m x 18km earth road fromObodugwa to Ogume, Delta State

n Procurement of an 18 seater mini-bus for theObodugwa community.

n Refurbishment of a women’s development centerfor the training of young girls and women in fashiondesign and hair dressing.

n Provision of two (2) Toyota vehicles to assist inempowering the Rivers State chapter of the IjawNational Youth Council.

At Oando, we support the personal giving of ouremployees and encourage them to becomeinvolved as volunteers within the communitieswe operate.

OandoFoundation

Set up in 2011, the Foundation is an independentnon-profit organization which spearheads projectsacross Nigeria with the purpose of achievingaccess to universal basic education and economicempowerment.

The Group is committed to funding the Foundation throughannual donations of 1% of its pre-tax profits. The Group alsosupports the Foundation with in-kind donations to coveradministrative and operational costs.

The Foundation supports the Nigerian government in achievingits goal to provide universal basic education in line with theUnited Nation’s Millennium Development Goals (MDGs). Theobjective of the MDGs is to encourage both rich and poorcountries to do all they can in eradicating poverty, achievinguniversal primary education, promoting gender equality, reducingchild mortality, improving maternal health, combating HIV/AIDS,malaria and other diseases, ensuring environmental sustainabilityand developing a global partnership for development. Nigeria isa signatory to the Millennium Declaration and has a responsibilityto implement the aforementioned goals.

The Foundation supportsthe Nigerian government inachieving its goal to provideuniversal basic education inline with the United Nation’sMillennium DevelopmentGoals (MDGs).

A summary of objective alignment is presented below:

Millenium Development Goals & Post 2015 Development

National Economic Empowerment and Development Strategy

Nigeria Vision 20 : 20 : 20 (NV20 : 20 : 20)

Federal Ministry of Education (FME) Strategic Plan

Universal Basic Education (UBE) Programme

State Universal Basic Education (UBE) System

Local Government Education Delivery System

Scholl - Community Education Learning System

Oando Foundation Interventions

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Oando PLC66

The Foundation’s achievements in 2012 are as follows:n Achieved an average of 35% savings in the renovation of three

pilot schools by revising our renovation strategy from directcontractor engagement to Community Based Renovation(CBR) to save costs, garner community ownership andenhance sustainability. CBR involves working directly with thelocal community through the School Based ManagementCommittees and Local Government to engage local artisans.

n Awarded scholarships to 225 pupils from Oando’s adoptedschools. The scholarship will sponsor the awardees throughsecondary education based on their academic performance.

n Established partnerships with 5 non-governmentalorganizations to effectively implement and administer theOando Scholars Programme across 8 states in Nigeria.

n Appointed a Chairman and Board of Trustees for OandoFoundation, Nigeria.

n Appointed a Board of Trustees for Oando Foundation,registered in the UK.


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Lagos State Ministry ofEducation Corporate SocialResponsibility Award Oando PLC on Tuesday, 24th January 2012 wasbestowed with the Lagos State Ministry ofEducation Corporate Social Responsibility award, in recognition of its participation and commitmentto the Ministry’s ‘Support-Our-Schools’ initiative.

Under this initiative, Oando has adopted and carriedout extensive refurbishment of 4 schools in Lagos state,namely: Archbishop Taylor Primary Schools in VictoriaIsland; Idi-Odo Primary School, Gbagada; Ogo-OluwaPrimary School, Gbagada; and Temidire PrimarySchool, also in Gbagada.

Tokunbo Durosaro, Director, Oando Foundationreceived the award on behalf of Oando PLC from theExecutive Governor of Lagos State, His Excellency,Babatunde Raji Fashola.

OandoFoundation

The Adopt-A-School initiative (AASI) is the Foundation’s flagshipproject. AASI is a Public-Private Partnership project designed toimprove the deplorable state of public schools through anintegrated and holistic approach upgrading and refurbishingthem to acceptable standards. Through this initiative, theFoundation aims to:n Create a serene and conducive learning environment in its

adopted public schools n Increase enrolment in schools through scholarshipsn Enable better student performance through teachers’ capacity

building.

The projects under this initiative are:1. Infrastructural development 2. Teacher training and provision of instructional aids3. Supporting community involvement in school management

through the School Based Management Committee4. Supporting Local Government education agencies to

effectively discharge their statutory roles.5. The introduction of Early Childhood Care & Development

Education 6. Establishing Creative centers (ICT)7. Scholarship awards


68

AASI is a Public-PrivatePartnership project designedto improve the deplorablestate of public schoolsthrough an integrated andholistic approach upgradingand refurbishing them toacceptable standards.


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2012 Donations and SponsorshipsThe group donated to laudable causes and charitable concerns including orphanages, retirement homes, special needs schools,across Nigeria, listed below:

S/N DESCRIPTION AMOUNT (N)

1 Adopt-A-School -Scholarship award to selected schools’ pupils 35,646,985

2 Drugs & Medical support to Congo bomb blast victims 7,153,795

3 Donation of AGO to Heritage Homes 563,050

4 Donation of AGO to Little Saints Orphanage 563,050

5 Donation towards Children’s Day Celebration 772,800

6 Donations of AGO and PMS to the Lagos State Security Trust Fund 33,814,000

7 Sponsorship of Mohammed Muazu at the Professional Golf Association South Africa 8,147,830

8 Renovation of classrooms in Gidado Primary School , Katsina State 11,271,563

9 Construction of classrooms in Daura Primary School, Katsina State. 11,861,808

10 Renovation of classrooms Government Primary School, Etim Ekpo, Akwa Ibom 11,851,875

11 Construction of classrooms in Government Primary School Ikot Essien, Ukanafun, Akwa Ibom 16,162,820

12 Construction of classrooms in Government School, Oruk Anam, Akwa Ibom 16,098,087

13 Community Christmas Donations 3,373,036

14 Event sponsorship to Ministry of energy and mineral resources 1,100,000

15 Donation of vehicle to Ijaw Youth Council transportation scheme 1,600,000

16 Rumorolu Youth Association 100,000

17 Federal Road Safety Corps, Eleme District 150,000

18 Donations to Ikoyi Club 1938 7,205,603

19 National Association of Nigerian Students. 5,000,000

20 The Nigerian Stock Exchange - Sponsorship of quiz competition 500,000

21 Department of Petroleum Resources 500,000

TOTAL 173,436,302

EconomicPerformance

Direct Economic Value Generated & Distributed


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2012 2011N'000 % N'000 %

GROUPTurnover 673 1,181,997 571,305,637Other Income 2,097,924 13,516,172Interest received 3,521,533 7,316,985

678,801,454 - 592,138,794Bought in goods and services- Local purchases (334,371,598) (309,071,464)- Foreign purchases (288,453,123) (239,388,132)Value added 55,976,732 100 43,679,198 100

Distributed as followsEmployees- To pay salaries and wages and other staff costs 8,621,891 15 10,404,681 24

Government- To pay tax 9,913,242 18 14,185,703 32

Providers of capital- To pay dividend - - - - - To pay interest on borrowings 20,093,243 36 12,767,211 29

Non-controlling interest 364,769 1 156,175 --

Maintenance and expansion of assets- Deferred tax (3,145,492) (6) (2,873,539) (7)- Depreciation 8,605,708 15 7,251,227 17 - Retained in the business 11,523,371 21 1,787,740 4 Value distributed 55,976,732 100 43,679,198 100

2012 2011N'000 % N'000 %

COMPANyTurnover 7,358,881 8,122,502 Other Income 1,790,961 1,240,803 Interest received 4,527,632 2,877,014

13,677,474 12,240,319 - Bought in goods and services- Local purchases (2,323,459) (854,323)- Foreign purchases - -Value added 11,354,015 100 11,385,996 100

Distributed as followsEmployees- To pay salaries and wages and other staff costs 885,036 8 1,655,551 15

Government- To pay tax 304,347 3 290,888 3

Providers of capital- To pay dividend 5,430,508 48 - To pay interest on borrowings 5,565,556 49 2,605,357 23

Maintenance and expansion of assets- Deferred tax 6,950 - (300,899) (3)- Depreciation 261,051 2 279,024 2 - Retained in the business 4,331,075 38 1,425,567 13 Value distributed 11,354,015 100 11,385,996 100

RevenueThe Group achieved turnover in excess of N673 billion in 2012.The turnover performance is 18% higher than the turnover ofN571 billion achieved in 2011.

The increased turnover is attributable to:n An increase in the number of retail outlets from 510 to 546

retail outlets that existed in 2011 and critical mass gained onthe LPG marketing strategy,

n Higher rigs efficiency, n Additional income from full year operations of gas assets andn Favourable crude oil prices

Employee wagesStaff related expenses reduced by 17% (2012: N8.6 billion;2011:N10.4 billion), which is attributable to the cost of curtailmentof the defined benefits scheme for management staff in 2011.

Providers of CapitalThe Group paid higher interest to lenders of capital in 2012 whencompared to the comparative year as a result of:n An increase in borrowing to finance our business expansion

plansn Higher cost of borrowing

Payment to governmentThe Group’s tax charges reduced by 30% from N14.1 billion in2011 to N9.9 billion in 2012. The reduction arose mainly fromrelatively higher income from companies under the pioneer statusregime in 2012 and tax disallowable expenses as a result ofexceptional write-offs in 2011. In accordance with the CompaniesIncome Tax Act, a company does not pay tax under the pioneerstatus regime.

Community InvestmentsThe Group continues to demonstrate strong social responsibilitytowards the education sector, people oriented programmes andthe less privileged in all the communities and locations where weoperate. In 2012, we made several contributions to thedevelopment of the local communities which we operate in.Please refer to the Communities section of this Report.

Financial Implications Due To Climate ChangeClimate change (global warming) has become a new reality andis one of the greatest global environmental challenges facedtoday and addressing its impact will require individuals,businesses and governments to unite and take responsibility.

Climate change brings with it, changes in weather patterns thatcan pose serious problems such as upsetting seasonal cycles,harming ecosystems and water supply, food production, causessea level rise, flood, landslides, drought and famine. As theweather becomes harsher and storms increase in frequency andintensity, serious socio-economic consequences arise. Climatechange also has an impact on natural resources and the balanceof nature which are characterized by delays in rainfall, excessiveheat waves, heavy rainfall and pandemic outbreaks of diseases.

We intend to carry out a study on the financial impacts climatechange would pose to the business and operations of Oandoand report on this indicator in our 2013 report.

The challenges identified in the proposed study will present anopportunity for the Company to take steps that will allow theGroup to be more competitive in the future and utilise theopportunities associated to economic incentives such as carboncredits for our business.


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We intend to carry out a study on the financialimpacts climate change would pose to thebusiness and operations of Oando and report onthis indicator in our 2013 report.


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GRI – GlobalReportingInitiative Index

Here we provide an index to our sustainability reporting based on the Global Reporting Initiative (GRI) reporting disclosures and coreperformance indicators, as defined in the GRI Sustainability Reporting Guidelines 3.1. The index shows how and where we areaddressing GRI elements and indicators throughout this Report and within our 2012 Annual Report.

SR 6 - 9Strategy and Analysis 1.1 Statement from the most senior decision-maker of the organization. l

LOCATION OF DISCLOSUREGRI INDICATOR GENERAL DESCRIPTION

Name of the organization.

GRI STATUS

Oando PlcOrganizational Profile2.1 l

Primary brands, products, and/or services. SR 11 - 15, AR 6 - 122.2 lOperational structure of the organization, including main divisions,operating companies, subsidiaries, and joint ventures.

AR 23 - 492.3 lLocation of organization's headquarters. Lagos, Nigeria2.4 l

Nature of ownership and legal form. AR 522.6 lMarkets served (including geographic breakdown, sectors served,and types of customers/beneficiaries).

AR 23 - 492.7 l

Significant changes during the reporting period regarding size,structure, or ownership.

SR 172.10 l

Scale of the reporting organization. n Employees - 1,578, Revenue - N673 billion.

n Offices in Bermuda, Ghana,UK, Togo, South Africa,Canada, Benin Republic andNigeria.

2.8 l

Significant changes during the reporting period regarding size,structure, or ownership.

The birth of Oando EnergyResources (OER), the Group'smain vehicle for oil explorationand production activities with alisting on the Toronto StockExchange (TSX).

2.9 l

Number of countries where the organization operates, and names ofcountries with either major operations or that are specificallyrelevant to the sustainability issues covered in the report.

Country OverviewSee back cover

2.5 l

Reporting period (e.g., fiscal/calendar year) for information provided. SR 5Report Parameters3.1 l

Reporting cycle (annual, biennial, etc.) SR 53.3 lContact point for questions regarding the report or its contents. SR 793.4 lProcess for defining report content. SR 53.5 l

State any specific limitations on the scope or boundary of the report(see completeness principle for explanation of scope).

SR 53.7 l

Boundary of the report (e.g., countries, divisions, subsidiaries,leased facilities, joint ventures, suppliers). See GRI BoundaryProtocol for further guidance.

SR 53.6 l

ll

Key:Fully Reported:

Partially Reported:

2012 Sustainability Report: SR

2012 Annual Report: AR



74

SR 163.8 Basis for reporting on joint ventures, subsidiaries, leased facilities,outsourced operations, and other entities that can significantlyaffect comparability from period to period and/or betweenorganizations.

l

LOCATION OF DISCLOSUREGRI INDICATOR GENERAL DESCRIPTION GRI STATUS

Table identifying the location of the Standard Disclosures in thereport.

SR 733.12 lGovernance structure of the organization, including committeesunder the highest governance body responsible for specific tasks,such as setting strategy or organizational oversight.

AR 59 - 60Governance,Commitments andEngagement4.1

l

Indicate whether the Chair of the highest governance body is alsoan executive officer.

AR 564.2 lFor organizations that have a unitary board structure, state thenumber and gender of members of the highest governance bodythat are independent and/or non-executive members.

AR 50 - 514.3 l

Mechanisms for shareholders and employees to providerecommendations or direction to the highest governance body.

SR 27 - 284.4 l

Basis for identification and selection of stakeholders with whom toengage.

SR 264.15 lDirect economic value generated and distributed, includingrevenues, operating costs, employee compensation, donationsand other community investments, retained earnings, andpayments to capital providers and governments.

SR 70Rep EconomicPerformanceEC1

l

List of stakeholder groups engaged by the organization. SR 264.14 l

Financial implications and other risks and opportunities for theorganization's activities due to climate change.

SR 71EC2 l

Volume and type of estimated proved reserves and production. AR 32 - 35OG1 l

Procedures for local hiring and proportion of senior managementhired from the local community at significant locations ofoperation.

SR 59EC7 l

Significant financial assistance received from government. No significant financialassistance was received fromthe government.

EC4 l

Coverage of the organization's defined benefit plan obligations. SR 61EC3 l

Development and impact of infrastructure investments andservices provided primarily for public benefit through commercial,in-kind, or pro bono engagement.

SR 65EC8 l


75


SR 40EnvironmentalEN3

Direct energy consumption by primary energy source.

l


Indirect energy consumption by primary source. SR 40EN4 lEnergy saved due to conservation and efficiency improvements. SR 45EN5 l

Total water withdrawal by source. SR 40EN8 lWater sources significantly affected by withdrawal of water. No significant effect on water

sources by withdrawal of water.EN9 l

Percentage and total volume of water recycled and reused. SR 40EN10 lDescription of significant impacts of activities, products, andservices on biodiversity in protected areas and areas of highbiodiversity value outside protected areas.

SR 41EN12 l

Strategies, current actions, and future plans for managingimpacts on biodiversity.

SR 41EN14 lNumber and percentage of significant operating sites in whichbiodiversity risk has been assessed and monitored.

SR 41OG4 lNumber of IUCN Red List species and national conservation listspecies with habitats in areas affected by operations, by level ofextinction risk.

We are committed to operatingonly in non-critical habitats withextinction risk.

EN15 l

Total direct and indirect greenhouse gas emissions by weight. SR 38 - 39EN16 lOther relevant indirect greenhouse gas emissions by weight. SR 38 - 39EN17 lInitiatives to reduce greenhouse gas emissions and reductionsachieved.

SR 45EN18 lNOx, SOx, and other significant air emissions by type and weight. SR 45 - 46EN20 lTotal weight of waste by type and disposal method. SR 37EN22 lVolume of formation or produced water. SR 40OG5 lTotal number and volume of significant spills. SR 38EN23 lVolume of flared and vented hydrocarbon. 930.909 mmscfOG6 l

Initiatives to reduce indirect energy consumption and reductionsachieved.

SR 45EN7 l

Initiatives to provide energy-efficient or renewable energy basedproducts and services, and reductions in energy requirements asa result of these initiatives.

SR 54EN6 l



76

SR 38OG7 Amount of drilling waste (drill mud and cuttings) and strategies fortreatment and disposal. l


Initiatives to mitigate environmental impacts of products andservices, and extent of impact mitigation.

SR 47EN26 lMonetary value of significant fines and total number of non-monetary sanctions for non-compliance with environmental lawsand regulations.

The Group was not levied withany significant fines andpenalties for non-compliancewith environmental laws andregulations. We intend tocontinue preventing any futurecontraventions and to providecorrective actions fordeficiencies that may arise inthe coming years.

EN28 l

Benefits provided to full-time employees that are not provided totemporary or part-time employees, by major operations.

SR 61LA3 lPercentage of employees covered by collective bargainingagreements.

SR 62LA4 lMinimum notice period(s) regarding significant operationalchanges, including whether it is specified in collectiveagreements.

SR 62LA5 l

Rates of injury, occupational diseases, lost days, andabsenteeism, and number of work-related fatalities by region andby gender.

SR 53LA7 l

Education, training, counseling, prevention, and risk-controlprograms in place to assist workforce members, their families, orcommunity members regarding serious diseases.

SR 51LA8 l

Total number and rate of new employee hires and employeeturnover by age group, gender, and region.

SR 58LA2 l

Total workforce by employment type, employment contract, andregion, broken down by gender.

SR 58Social: Labor Practicesand Decent WorkLA1

l

Composition of governance bodies and breakdown of employeesper employee category according to gender, age group, minoritygroup membership, and other indicators of diversity.

AR - 60SR - 58

LA13 l

Total number of incidents of discrimination and corrective actionstaken.

No reports of discriminationover the reporting period.

HR4 lOperations and significant suppliers identified in which the right toexercise freedom of association and collective bargaining may beviolated or at significant risk, and actions taken to support these rights.

We have not identified anyoperations in which the right toexercise freedom of associationand collective bargaining may beat significant risk.

HR5 l


77

Operations and significant suppliers identified as havingsignificant risk for incidents of child labor, and measures taken tocontribute to the effective abolition of child labor.

We support the United NationsUniversal Declaration of HumanRights and the ten principles ofthe United Nations GlobalCompact. Our Code ofBusiness Conduct and Ethicssubstantially incorporate ethicalprinciples including childlabour. We have not identifiedany of our operations as havingsignificant risks for incidents ofchild labour.

HR6 l

No reported cases of violationsinvolving forced or compulsorylabour over the reporting period.

HR7 Operations and significant suppliers identified as havingsignificant risk for incidents of forced or compulsory labor, andmeasures to contribute to the elimination of all forms of forced orcompulsory labor.

l


Percentage of security personnel trained in the organization'spolicies or procedures concerning aspects of human rights thatare relevant to operations.

SR 54HR8 l

Total number of incidents of violations involving rights ofindigenous people and actions taken.

In 2012, there were no recordedincidents of violations involvingrights of indigenous people

HR9 l

Number of grievances related to human rights filed, addressedand resolved through formal grievance mechanisms.

No reports of grievancesrelating to human rights over thereporting period.

HR11 l

Percentage of operations with implemented local communityengagement, impact assessments, and development programs.

SR 30. We are committed to reportingon this aspect fully from 2013.

SocietySO1 l

Operations with significant potential or actual negative impacts onlocal communities.

SR 41SO9 lPrevention and mitigation measures implemented in operationswith significant potential or actual negative impacts on localcommunities.

SR 41SO10 l

Number and description of significant disputes with localcommunities and indigenous peoples.

No significant disputes with anyof the local communities weoperate in.

OG10 l

Operations where indigenous communities are present or affectedby activities and where specific engagement strategies are in place.

SR 43OG9 l

Percentage and total number of operations that have beensubject to human rights reviews and/or impact assessments.

Oando's Code of BusinessEthics and Conduct are appliedrigorously within all operations

HR10 l

Number of sites that have been decommissioned and sites thatare in the process of being decommissioned.

No sites have been or are inthe process of beingdecommissioned.

OG11 l


GRI - GlobalReport InitiativeIndex


78

According to our Code ofBusiness Conduct & Ethics, noCompany funds may be givendirectly or indirectly to politicalcandidates and political parties.Directors, employees andmanagers may in their individualcapacities, participate in politicalactivities, however, suchindividual participation must notinvolve the Company’s funds,time, equipment, supplies.and facilities.

SO6 Total value of financial and in-kind contributions to politicalparties, politicians, and related institutions by country. l


Total number of legal actions for anti-competitive behaviour, anti-trust, and monopoly practices and their outcomes.

SR 25SO7 lMonetary value of significant fines and total number of non-monetary sanctions for non-compliance with laws and regulations.

SR 36SO8 l

Number of process safety events, by business activity. SR 50OG13 l

Operations where involuntary resettlement took place, the numberof households resettled in each and how their livelihoods wereaffected in the process.

None of our operations have ledto involuntary resettlement.

OG12 l

Percentage of employees trained in organization's anti-corruptionpolicies and procedures.

SR 25SO3 lActions taken in response to incidents of corruption. SR 25SO4 lPublic policy positions and participation in public policy developmentand lobbying.

SR 32SO5 l

Other report clarifications:References to “Oando”, “Company”, “the Group”, “our” or “we”means Oando Plc and its operating subsidiaries unless thecontext indicates otherwise.

Data measurement techniques and bases for calculations, if notobvious, are explained with the data.

Unless otherwise stated, all financial data is reported in Nigeriannaira (N) and environmental data is presented in metric units.

To provide more context and updates on the issues covered inthis report, please refer to our website for additional informationwww.oandoplc.com

FeedbackWe have tried to include information in this Report that we believeour stakeholders would like to see or know and as such, weencourage any feedback which would help to improve oursubsequent reports.

Please send your feedback or suggestions to the following:Ms. Ayotola JagunChief Compliance Officer & Company Secretary,[email protected]

or

Dr Ainojie Alex IruneHead, Corporate [email protected]


79

Head Office2 Ajose Adeogun StreetVictoria IslandLagos, NigeriaTel: +234 1270 2400

Abuja Office26 Udi StreetOff Aso DriveMaitamaAbuja, NigeriaTel: +234 9523 5458-9

Group Liaison OfficeFirst Floor50 Curzon StreetLondon, United KingdomW1J 7UWTel: +44 207 297 4280-7

South Africa Office2nd FloorThe Place Office Park1 Sandton DriveSandton, GautengSouth AfricaTel: +27 11 217 4980

Ghana OfficeB35 Augostino Neto RoadAirport Residential AreaAccra, GhanaTel: +233 21 761196

Canada OfficeSun Life Plaza1230 - 1124th Avenue SW Calgary Alberta T2P 0H3Tel: +1403 719 9152

Bermuda OfficeTrott & Duncan Building17A Brunswick StreetHamiltonHM10 BermudaTel: +441 297 4407

E-mail: [email protected]

Website:www.oandoplc.com

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Oando Sustainability Report

Documents

Oando Sustainability Report