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MANAGEMENT
OF ENVIRONMENT, HEALTH AND SAFETY AT AMERADA HESS GOVERNANCE In early 2002, the Hess Leadership Team, consisting of the top five executive officers of Amerada Hess, was formed to provide strategic business direction and key operational decisions for the Company. Some of the objectives established by the Leadership Team are focused on promotion of Environmental, Health, Safety (EH&S) and Social Responsibility (SR) policies and management systems that protect the Company's workforce, customers and local communities. We took several steps to support these objectives. We developed a new Environment, Health and Safety Policy that reaffirms our commitment to environment, health and safety protection and provides management direction and support in regards to our expectations and objectives. We also established a new Corporate Social Responsibility Policy to provide increased alignment throughout our organization in regards to integrity and business conduct, stakeholder engagement, assessment of social impacts, and making a positive contribution to the communities where we do business. Copies of these policies are available at www.hess.com. (Link to Policies) IMPLEMENTING A MANAGEMENT FRAMEWORK In addition to providing overall direction and support for the Company's EH&S and SR policies and programs, the Hess Leadership Team is engaged in establishing performance expectations and holding business units accountable for their performance. Likewise, our performance in these areas is reviewed routinely with the Audit Committee of our Board of Directors. Our business units and line management are ultimately responsible for incorporating EH&S and SR expectations into their business activities and providing adequate resources and mechanisms to meet performance objectives. We have made some organizational changes to underscore the importance of line management responsibility and provide guidance to business units, and are working on common processes across the Company to approach EH&S and SR in a consistent and coordinated manner. Some of our efforts are discussed on the following pages. ORGANIZATION The Company has corporate and business unit EH&S staff in place to provide technical support and functional guidance to our business units. We continued our corporate EH&S audit program in 2002 to ensure that our operations and subsidiaries adhere to company policies and objectives, comply with regulatory requirements and, as appropriate, implement best in class industry standards. Our EH&S organization is presented in our web-based report at www.hess.com. (Link to EH&S Organization Chart) We have established task force groups to help guide the Company on issues such as corporate social responsibility and greenhouse gas emissions. Since much can be learned from our industry peers, other companies, and external groups, we also participate in various organizations such as the International Petroleum Industry Environmental Conservation Association and the National Safety Council. PROCESSES Our Business Units have incorporated Environmental Management Systems based on the ISO-14001 international standard. In 2002, Amerada Hess ApS, our Danish subsidiary, received ISO-14001 certification. By year-end 2002, nearly a quarter of total oil production and throughput was from ISO-14001 certified operations. The Company has in place an "Implementation Plan for Achieving and Maintaining Safety Excellence" to guide our Company-wide efforts towards improved safety performance. We are also in the process of establishing a Company-wide management system for EH&S and SR. Although the management system will not replace our existing systems, it will be used to provide an overall structure for managing EH&S and SR across the Corporation using a common language. IMPROVING EH&S AND SR PERFORMANCE In order to better align our performance with our EH&S and SR strategy, we revised our previous targets and developed new targets to help drive continual improvement and guide us towards our leadership goal. Some of these targets are "end-of-process" targets, such as improved safety performance or reduced air emissions, focusing on the results of our EH&S and SR actions. Other targets are "in-process" targets, focusing on how well we are performing the actions themselves. Our new targets are included in our web-based report at www.hess.com. (Link to Targets) PROTECTING AND GROWING OUR REPUTATION While compliance with EH&S regulations is still a core part of our operational expectations, we understand that our efforts must also be focused on providing a meaningful contribution to the well-being of the communities in which we operate. In addition, given the demands for increased transparency, we believe that it is important to have in place a robust process for stakeholder engagement. EH&S AND SR STRATEGY IMPLEMENTATION We will stage our EH&S and SR strategy implementation over the next few years. Our particular focus in 2003 is on establishing and achieving our new performance targets, significantly improving our safety performance, and putting in place mechanisms to underscore line management responsibility for EH&S and SR performance. We have turned our strategy into a plan of action and are beginning to measure results. |
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