BP 2013 Annual Report Download - page 54

BP Annual Report and Form 20-F 201350
The committee’s responsibilities include oversight and review of the
following activities: the legal strategy for litigation; investigations and
suspension and debarment actions arising from the accident and oil spill;
the strategy connected with settlements and claims; the environmental
work to remediate or mitigate the effects of the oil spill; management
strategy and actions to restore the group’s reputation in the US; and
compliance with government settlement agreements arising out of the
accident and oil spill.
See Legal proceedings page 257 and Gulf of Mexico committee page 78
for further information.
Strategic and commercial risks
10-point plan
In 2011 we set out a 10-point plan to address our priorities through 2014.
Among other things, the plan aims to focus on safety and risk management,
efficient investments and disposals, successful delivery of operating
cashflows, renewal and repositioning of our portfolio, and delivery of our major
projects to plan. We conduct regular planning and performance monitoring
activity as part of managing the risks to delivery of this plan. For an update on
our progress against the plan see page 22.
Geopolitical
The diverse locations of our operations around the world expose us to
a wide range of political developments and consequent changes to the
economic and operating environment. Geopolitical risk is inherent to
many regions in which we operate; heightened political or social tensions or
changes in key relationships could adversely affect the group. We seek to
manage this risk actively through the development and maintenance of
relationships with governments and stakeholders in each country and region.
In addition, we closely monitor events (such as the situation that arose in the
Ukraine in February 2014) and implement risk mitigation plans where
appropriate.
Cybersecurity
The threats to the security of our digital infrastructure continue to evolve and,
like many other global organizations, our reliance on computers and network
technology is increasing. A cybersecurity breach could have a significant
impact on business operations. We seek to manage this risk through
cybersecurity standards, ongoing monitoring of threats, close co-operation
with authorities and awareness initiatives throughout the company. We also
maintain disaster recovery, crisis and business continuity management plans.
Compliance and control risks
Ethical misconduct and legal or regulatory non-compliance
Ethical misconduct or breaches of applicable laws or regulations could damage
our reputation, adversely affect operational results and shareholder value, and
potentially affect our licence to operate. Our code of conduct and our values
and behaviours, applicable to all employees, are central to managing this risk.
Additionally, we have various group requirements covering areas such as
anti-bribery and corruption, anti-money laundering, competition/anti-trust law
and trade sanctions. We keep abreast of new regulations and legislation and
plan our response to them. We also operate a range of compliance training and
monitoring programmes for our employees. We offer an independent
confidential helpline, OpenTalk, for employees, contractors and other third
parties. For information on our code of conduct, see page 48.
Under the terms of the US Department of Justice settlement (see Legal
proceedings on page 257), an ethics monitor will also review and provide
recommendations concerning BP’s ethics and compliance programme.
Trading non-compliance
In the normal course of business, we are subject to risks around our trading
activities which could arise from shortcomings or failures in our systems, risk
management methodology, internal control processes or employees. We have
specific operating standards and control processes to address these risks,
including guidelines in relation to trading, and we seek to monitor compliance
through our dedicated compliance teams. We also seek to maintain a positive
and collaborative relationship with regulators and the industry at large.
Safety and operational risks
Process safety, personal safety and environmental risks
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
releases of hydrocarbons when drilling wells, operating facilities and
transporting hydrocarbons. We apply our operating management system
(OMS), including group and engineering technical practices as applicable, to
address these risks. See page 41 for more information on safety and our
OMS. Activities include inspection, maintenance, testing, business continuity
and crisis response planning, and competency development for our
employees and contractors. In addition, we conduct our drilling activity through
a global wells organization in order to promote a consistent approach for
designing, constructing and managing wells.
Security
Hostile acts such as terrorism or piracy could harm our people and disrupt
our operations. We monitor for emerging threats and vulnerabilities to manage
our physical and digital security. Physical security threats tend to vary
geographically and by type of business. Our central security team provides
guidance and support to a network of regional security advisers who advise
and conduct assurance with respect to the management of security risks
affecting our people and operations. We also maintain disaster recovery, crisis
and business continuity management plans.