Working responsibly

Social and economic benefit

Delivering social and economic benefit

Our strategy is to deliver value for our stakeholders through the oil and gas lifecycle. This means generating social and economic benefit through our presence in any given area. Our stakeholders are a broad group and there are many ways in which we can deliver value for them, both economic and non-economic. Our key stakeholders associated with a project include host governments, which grant our oil and gas licences and regulate our activities; communities affected by our operations; and those who work on our behalf, including personnel and contractors.

The economic contributions that can be associated with our activities include the following:

  • Affordable energy for local populations through the discovery of oil and gas to meet energy demands while the world develops affordable lower carbon energy sources.
  • Distribution of operating expenditure through exploration and appraisal phases of a project and through payments to our contractors and suppliers, including local and internationally based companies.
  • De-risking state oil company investments by paying all exploration costs on behalf of state oil companies who are only required to invest if and when a commercial discovery is confirmed.
  • Payments to our workforce, including local employees.
  • Payments to government, which may include licence fees, taxes, duties and training allowances.
  • Investment in local institutional and community development.

In addition, we make non-economic contributions that can lead to local benefits and include:

  • Capacity building among our contractors and suppliers, in particular among local companies or individuals to help them meet the technical, health, safety and environment (HSE) and Corporate Responsibility (CR) standards required to work with us.
  • Training and development of our local workforce.
  • Sharing of technical knowledge (e.g. environmental, geological) with national and local authorities for the benefit of local communities.
  • Capacity building within government institutions to develop understanding and knowledge of the oil and gas industry.
  • Upholding high standards of governance, ethics and anti-corruption through, for example, our commitment to the UN Global Compact (UNGC) and the Extractive Industries Transparency Initiative (EITI).
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Notes:

  1. Net shares across the Group
  2. Excludes share-based payment charges which are non-cash
  3. Refunds from government, in 2016, were US$40.4 million.

In June 2016, we commissioned a review based on the UN Sustainable Development Goals (SDGs) in relation to our activities and material issues. This helped to inform our approach to delivering benefits for our stakeholders in Senegal and is set out in what we call an Impact Benefit Plan.

The plan outlines our objectives for delivering value to society in Senegal through our activities, our approach to achieving these, how we monitor our performance and how we communicate this to our stakeholders.

The plan is arranged around three strands:

Supporting economic growth and good governance

Our current activities are supporting economic growth through inward investment in Senegal and the payment of taxes. In the short term, this is promoting improvements to infrastructure and economic activity.

Assuming further project success, the generation of affordable energy will provide impetus to Senegal as a UN-designated ‘Least Developed Country’ and generate income that can promote investment in clean energy and broader benefits to society.

In addition, we are supporting capacity building within the authorities governing the oil and gas industry and actively participating in the Extractive Industries Transparency Initiative (EITI) working groups in Senegal to promote stronger institutions in the country.

Promoting local participation

We are committed to maximising local Senegalese employees where we can. Our Procurement Policy encourages the use of local contractors wherever the right expertise is available, or where it can be developed without compromising our high standards and principles.

We include local companies with the required competence in bid lists and request international contractors to consider the use of local subcontractors where possible. Where viable and within our capabilities, we will also look to promote the development of skills, capacity and standards of local businesses to be able to support our activities.

In 2016, we continued to encourage capacity building of our local contractors and infrastructure to support our operations. In September 2015, we opened a new dedicated permanent supply base in Dakar port.

This achievement was made possible through partnership with our local contractor Necotrans Senegal, a subsidiary of the international logistics and transport conglomerate Necotrans.

Social investment

We also seek to make a positive contribution to communities and vulnerable groups within our host countries through our social investment programmes, the main focus of these being on education, entrepreneurship and the development of health, well-being and self-reliance in rural communities.

More information about these programmes can be found in the Cairn in Senegal section.


Objectives 2017

  • Continue to develop our Impact Benefit Plan in Senegal
  • Standardise our approach to impact benefit planning across the Group and linkage to the UN SDGs

Strategic objectives

  • Maintain licence to operate

Principal risks

  • Negative stakeholder reaction to our operations
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