Hydro has had global ethical requirements since 1995. In 2003 our current Code of Conduct was approved by the Board of Directors. Based on this, the Hydro Integrity Program was launched in 2005 to prevent corruption and human rights violations connected to our activities. The program includes risk mapping, tools and training. In 2008 we established new guidelines for non-financial compliance. The guidelines have been established to assist line management to adhere to Hydro’s compliance requirements. An interactive e-learning program on corporate requirements was also introduced in 2008. The program is mandatory for all employees and includes anti-corruption training and information about our whistleblowing channel.
In the process leading up to the closing of the merger of Hydro’s oil and gas activities with Statoil, October 1, 2007, questions arose concerning the Libyan petroleum assets Hydro acquired from Saga Petroleum in 1999. The questions related to Hydro’s handling of certain contracts in Libya. The Board of Directors initiated an internal investigation headed by attorney-at-law Jan Fougner supported by the US-law firm Shearman & Sterling LLP. Fougner reported to a subcommittee of the Board of Directors, consisting of chairperson of the board Terje Vareberg and Finn Jebsen. The internal investigation team was coordinated with a parallel investigation in StatoilHydro.
The board is satisfied that during the period covered by the investigation Hydro has generally maintained a sound ethical framework and a healthy business culture. However, the Hydro investigation team’s report gave reason to conclude that certain aspects of the handling of the Libyan contracts had been in breach of Hydro’s ethical requirements. According to the report, and as acknowledged by the Board, Hydro should have realized that certain payments made were problematic. During 2008 the board has reviewed Hydro’s compliance system. The board will on a continuous basis oversee that Hydro’s compliance system is properly implemented.
The investigation reports were submitted to the Norwegian National Authority for Investigation and Prosecution of Economic and Environmental Crime (Økokrim) on October 7, 2008.
The rights of the indigenous population or other minority groups is one of several human rights issues that are addressed at an early stage in our projects. Hydro has taken a 75-percent stake in a joint venture with Australian exploration company UMC. Successful exploration and subsequent mining is dependent on cooperation and agreements with the traditional (aboriginal) land owners of the area. The project is in dialogue with the different stakeholder groups.
The society’s expectations regarding corporate responsibility in the supply chain are in continuous development. In 2008 the implementation, effectiveness and suitability of the existing Supplier Declaration was evaluated. The evaluation concluded that Hydro’s policy and contractual requirements towards suppliers can be further clarified. Implementation of such changes will begin in 2009.
Our most important voluntary commitments are our support of the principles set out in the Universal Declaration of Human Rights and the Uunited Nations Global Compact. We also support the OECD’s Guidelines for Multinational Enterprises. We use the Global Reporting Initiative’s (GRI) G3 guidelines for voluntary reporting of sustainable development. See www.hydro.com/gri
Total payments (taxes, fees etc.) to host governments 1)
| Amounts in NOK million |
2008 |
2007 |
2006 |
| Australia |
0.4 |
6 |
- |
| Brazil |
139 |
89 |
127 |
| Jamaica |
90 |
81 |
79 |
1) Total payments to host governments in connection with the exploration and production of bauxite and alumina. Payments include benefit streams, profit tax, royalty, license fees, rental fees, entry fees etc. The reporting is based on the principles in Extractive Industries Transparency Initiative (EITI). The table is included in the limited level of assurance review of Hydro’s viability performance reporting 2008, but not in the financial audit. |
