Integrity and human rights

In 2007 we developed an interactive e-learning programme on corporate requirements. The programme includes anti-corruption training and will be presented to all employees during 2008.

The annual business planning process and inclusion of key performance indicator actions are used to implement the integrity program as well as other corporate responsibility topics, see note 11 to the consolidated financial statement in the annual report. Requirements have been drawn up regarding how corporate responsibility should be taken into account in business development, investments and during the execution of projects.

Employees may report any breaches - or perceived breaches - of Hydro's requirements through the whistleblower channel. A number of cases were reported in 2008, and all cases were investigated and some resulted in disciplinary actions and dismissals. Twice every year Hydro's internal auditor informs the corporate management board about the utilization of the channel. As required, the anonymity of each case is preserved. There is still a need to further improve the accessibility to the whistleblower channel. In 2009 we will evaluate how we can improve this. As from 2009, Hydro's internal audit unit reports directly to the company's Board to secure the adequate level of independency that may be needed to fulfil this role.

Countering corruption

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. To date, 2 600 employees have participated in the training program, while 120 employees from certain joint-venture partners have also taken part in the program. Training includes dilemma discussions anti-corruption and human rights. The program will be revised during 2009. The current Hydro Integrity Program handbook can be found under the "Policies and tools" link at the bottom of the right-hand column.  

In 2008 we established new guidelines for non-financial compliance. In Hydro, compliance is defined as adherence to applicable laws and regulations worldwide as well as Hydro's steering documents. The guidelines have been established to assist line management to adhere to Hydro's compliance requirements. Special emphasis is made on reducing the risk of non-compliance within anti-corruption, competition, and health, security, safety and environment.

An interactive e-learning program on corporate requirements was 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 we acquired from Saga Petroleum in 1999. The questions related to our handling of certain contracts in Libya. We 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 investigation team's report gives reason to conclude that a breach of Hydro's ethical requirements had taken place in February 2000, when the company entered into an agreement with a consultant to assist in a planned sale of the Libya portfolio. Ahead of the sales process, Hydro had considered a previous agreement with the same consultant as problematic. The sales process was later cancelled. The investigation shows that payments under the different agreements amounted to USD 7.4 million. Another possible misjudgement was made in connection with a payment corresponding to USD 1.9 million made to the operator of one of the fields in Libya in October 2000. According to the report, Hydro should have realized that the payment was problematic. The investigation reports were submitted to the Norwegian National Authority for Investigation and Prosecution of Economic and Environmental Crime (Økokrim) on October 7, 2008. In May 2009 Økokrim decided not to open an investigation of the so-called Libya case (see article at the bottom of the right-hand column). 

Promoting human rights

It is essential for us to avoid the use of child labor and forced labor, not just in Hydro's activities, but also in those of our suppliers and collaborating partners. We are concerned about fundamental labor rights, such as freedom of association, minimum wage requirements, and the regulation of working hours. Hydro does not tolerate discrimination on the basis of gender, race, national or ethnic origin, cultural background, social group, disability, family status, age, or political views.

In some of the countries Hydro has activities, freedom of association is limited or even prohibited. We then have to seek other means to secure a proper dialogue with the employees - both to secure an efficient information exchange and to give employees the opportunity to promote their views.

In 2008 we measured, by a company-wide self-assessment, the implementation of the Hydro Integrity Program including respect for human rights. The self-assessment confirms that employees are made aware of basic human rights and working conditions.
It is necessary to employ security staff in some areas, including armed guards for the protection of personnel, property and business activities. Hydro is a signatory to the Voluntary Principles on Security and Human Rights. No negative incidents in connection with our use of security staff were registered in 2008.

The rights of the indigenous population or other minority groups are 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. The purpose of the cooperation is to further explore opportunities for recovering bauxite and producing alumina in the Kimberley region of Western Australia. Successful exploration and subsequent mining is dependent on cooperation and agreements with the traditional (aboriginal) landowners of the area. The project is in dialogue with the different stakeholder groups

Voluntary commitments

Our most important voluntary commitments are our support of the principles set out in the Universal Declaration of Human Rights and the UN Global Compact. We also support the OECD's Guidelines for Multinational Enterprises], the Voluntary Principles on Security and Human Rights, Transparency International's Business Principles for Countering Bribery (BPCB), the World Economic Forum's Partnering Against Corruption Initiative (PACI), and the Extractive Industries Transparency Initiative (EITI). We voluntary report payments to authorities related to exploration and extraction activities for bauxite, as well as operations for the production of aluminium oxide, in accordance with EITI's principles. We are also cooperating with several organizations, including TRACE (Transparent Agent and Contracting Entities), Transparency International (TI), and Amnesty International (AI). Learn more about how we work with external organizations at (lenke til global partnerships).

According to our internal directives, Hydro is not permitted to make financial contributions to political parties.