BP 2012 Annual Report Download - page 33

We seek to manage our reputation through
actively managing our relationships with key
stakeholders and through clear, consistent and
coherent communications. We seek to engage
with local communities in order to foster
improved relationships.
There have been many important developments
in 2012 related to the Deepwater Horizon
accident, oil spill, and response including the
agreement reached with the US government to
resolve all federal criminal claims and with the
SEC regarding its securities claims. There
remains, however, continuing uncertainty
regarding the final extent and timing of civil
costs and liabilities relating to the incident (with
the trial to address many of these issues, which
started on 25 February 2013). Further, BP is in
ongoing discussions with the EPA to lift the
temporary suspension and mandatory
debarment. As such, the long-term impact of
the incident on our reputation remains
uncertain.
In addressing these risks we have been working
to review and adapt where necessary our
current controls and procedures to assure
compliance with the requirements contained
within the settlements.
In addition we have been preparing for trial
while remaining open to settlement of the
remaining civil claims on reasonable terms. We
are committed to rebuilding trust with all our
stakeholders and continue to co-operate with all
investigators, monitors and regulators. Further,
we are clear that we always seek to comply
with local regulations and, in some cases, our
required practices will exceed regulations if our
assessment of the operating risk indicates it
would be beneficial to do so.
Safety and operational risk
The nature of the group’s operations exposes us
to a wide range of significant health, safety and
environmental risks such as incidents
associated with the drilling of wells, operation of
facilities, transportation of hydrocarbons and
product quality. In addressing these risks we
seek to apply our operating management
system (OMS), including group and engineering
technical practices, as applicable.
We seek to conduct maintenance and
equipment testing and to apply product quality
control and testing procedures. We also provide
our staff with training and competency
development. To better manage the risks
inherent in drilling wells where we are the
operator, we conduct activity through a global
wells organization that is accountable for
systems and processes for designing,
constructing and managing wells.
We have also appointed an independent adviser
to provide oversight and assurance regarding
the company’s implementation of the Bly
Report’s recommendation and to report on
observed process safety culture.
Crisis and continuity management plans,
including in respect of oil spill preparedness and
response, have been developed to help us to
respond effectively to emergencies to minimize
impacts and to avoid potentially severe
disruption in our business and operations. See
Safety on pages 46-50 for information on the
recommendations of BP’s internal investigation
into the Deepwater Horizon oil spill and the
actions we are pursuing to address them.
Security threats require continuous monitoring
and control as hostile actions against our staff,
our facilities (as in the In Amenas joint venture in
Algeria) and our digital infrastructure (cyber
security) could cause harm to people and could
disrupt our operations. We have procedures that
are intended to monitor for threats and
vulnerabilities and policies to manage our
physical and digital security. We also maintain
disaster recovery, crisis and business continuity
management plans.
Compliance and control risk
Ethical misconduct or breaches of applicable
laws or regulations could be damaging to our
reputation, results of operations and shareholder
value and could affect our licence to operate.
Central to managing these risks is our code of
conduct and our values and behaviours (see
page 56), the requirements of which apply to all
employees, supported by our various group
requirements covering issues such as anti-
bribery and corruption, anti-money laundering,
competition/anti-trust law compliance and trade
sanctions. We seek to monitor for new
regulations and legislation and plan our
response to them. We also operate a range of
compliance training and monitoring programmes
for our employees, including OpenTalk, our
confidential helpline for employees.
In the normal course of business, we are
subject to risks around our treasury and trading
activities, which could arise from shortcomings
or failures in our systems, risk management
methodology, internal control processes or
employees. In addressing these risks, we have
adopted specific operating standards and
control processes, including guidelines in
relation to trading, and seek to monitor
compliance through dedicated compliance
organizations. We also seek to maintain a
positive and collaborative relationship with
regulators and the industry at large.
Operators descending coker structure, Castellon
oil refinery, Castellon, Spain.
Business review: Group overview
BP Annual Report and Form 20-F 2012 31
Business review: Group overview