BP 2010 Annual Report Download - page 101

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Corporategovernance
Corporate governance
Safety, ethics and environment assurance committee report
ThetragicincidentintheGulfofMexico,andtheextensiveactivitiesthat
wereundertakeninresponse,requiredandreceivedthefullattentionof
thewholeboard.Itwasagreed,earlyon,thatSEEACshouldfocusits
effortswithrespecttotheincidentuponmonitoringthepaceand
effectivenessofthecompany’sgroupwideresponsetothe
recommendationsofBP’sInvestigationReport(furtherinformationonthe
reportisonpage91).TheGulfofMexicocommittee,ofwhichIama
member,wasestablishedasaseparatecommitteetomonitortheongoing
restorationactivitiesintheGulfofMexico.ThisenabledtheSEEACto
retainitsfocusonthekeynon-nancialriskswithinitspreviouslyplanned
agendafortheyear,asyouwillreadinthereportbelow.
Nonetheless,IandmySEEACcolleaguesmadeanumberofvisits
totheGulfofMexicotogainrst-handassuranceoftheactivitiestocap
theMacondowellandremediatetheimpactoftheoilspill.Ibelievethe
combinedresponseofallthoseinvolvedwasoutstandingbutweall
remaineddeeplysaddenedthattheincidenthadoccurredandthat11lives
hadbeenlost.OurforwardfocusontherecommendationsofBP’s
InvestigationReportisintendedtoprovideboard-levelassurancethatsuch
anincidentcouldnotrecur.
Ibelievethecommitteeiswellresourcedtofullitstasksandthis
hasbeenfurtherstrengthenedbytherecentappointmentofFrank‘Skip’
Bowmantotheboard.FrankBowmanhadservedontheBPUSReneries
IndependentSafetyReviewPanelandbringstoSEEAChisextensivesafety
experiencefromhistimeasheadoftheUSNuclearNavy.
Sir William Castell
ChairoftheSafetyEthicsandEnvironmentAssuranceCommittee
Committee members
SirWilliamCastell–committeechair
PaulAnderson(appointed2February2010)
Frank‘Skip’Bowman(appointed8November2010)
AntonyBurgmans
CynthiaCarroll
Memberswholeftduringtheyear:
ErrollDavis,Jr(retired15April2010)
Committee role and structure
TheroleoftheSEEACistolookattheprocessesadoptedbyBP’s
executivemanagementtoidentifyandmitigatesignicantnon-nancial
risk,includingmonitoringprocesssafetymanagement,andreceive
assurancethattheyareappropriateindesignandeffectivein
implementation.ThefulllistofthetasksandresponsibilitiesoftheSEEAC
isavailableonourwebsite
Thecommitteemetninetimesin2010.Theincreasednumberof
meetingsheldin2010primarilyreectedthecommittee’sworkin
reviewingthecompany’sactionsinresponsetoBP’sInvestigationReport.
Thesemeetingsalsoprovidedinputfortheboard’sreviewofthatreport
andestablishedanongoingmonitoringprocessforSEEAC.Onemeeting
earlyeachyearisheldjointlywiththeauditcommitteetoreviewBP’s
internalcontrolandriskmanagementsystemsandtodiscusstheforward
programmeoftheinternalauditfunction.InJanuary2011thismeetingwas
extendedtoenhancethefocusontheintegratedapproachofauditwork
includingthatofthesafetyandoperationalriskauditfunction.
Inadditiontothecommitteemembership,eachSEEACmeetingisattended
bythegroupchiefexecutive,theexecutivevicepresidentforsafetyand
operationalrisk(MarkBly),thegeneralauditor(headofinternalaudit)and
theleadpartnerfromourexternalauditors.Fourtimesduringtheyearthe
committeeheldprivatesessionsforthecommitteemembersonly(without
thepresenceofexecutivemanagement)afterthemainbusinessofthe
meeting,todiscussanyissuesarisingormattersonthemindsofthe
committeemembership.Thecommitteealsoheldaprivatesessionwiththe
groupcomplianceandethicsofcer.Betweenmeetings,discussions
involvingthecommitteechairandsecretary,theexternalauditor’slead
partner,thegeneralauditorandexecutivemanagementoccuras
appropriate.
Committee processes
Informationandadvice
Informationtothecommitteecomesfrombothinsideandoutsidethe
company.Thebusinesssegmentsandregionalorganizationsprovidedirect
reportstothecommitteebutthereisalsocross-businessinformationona
groupwidelevelfromourfunctions,includingthesafetyandoperations
riskfunction,internalaudit,groupcomplianceandethics,grouplegaland
HR.Duringtheyear,themainexternalinputintothecommitteehasbeen
fromMrDuaneWilson,theIndependentExpert(forfurtherinformation,
seethesectiononIndependentExpertbelow).Asfortheboardandother
committees,SEEACcanaccessanyotherindependentadviceandcounsel
ifitrequires,onanunrestrictedbasis.DuringtheyearSEEACmembers
havereceivedbriengsfromexternalretainedcounsel,primarilyKirkland
andEllisLLP.
Trainingandvisits
ThecommitteevisitedtheTexasCityreneryinMarch2010toseethe
progressmadeagainsttheBPUSReneriesIndependentSafetyReview
Panelreport.Thisfollowedupontheirobservationsfromtheirpreviousvisit
inSeptember2007andthecommitteechairman’svisitinApril2008.The
committeewasjoinedbyfourotherdirectorsandreceivedanextensive
updateonprocesssafetyprogresssincethe2005incident.Their
observationswereconsistentwiththereportsreceivedfromthe
IndependentExpert.
Plannedvisitstoothersitesduringtheyearwerecancelledto
enablethecommitteetoreorganizeitsscheduletofocusuponissues
arisingfromtheMacondoincident.EachmemberofSEEACvisited
operationsintheGulfofMexicoatleastonceduringtheyear,withthe
SEEACchairmakinganumberofvisitstotheregionanditscommand
centrestoobserversthandBP’sresponseeffortsandtheprogressof
attemptstokillthewellandmitigatetheeffectsoftheoilspill.Aseparate
technicalbriengwasprovidedtothecommittee(andotherboard
members)onexplorationdrillingbytherelevantfunctionalmanagers.
InductionprogrammesforthetwonewmembersofSEEACwere
organizedduringtheyearand,inthecaseofFrankBowman,isstillongoing
in2011.
Committee activities
Safetyandoperations
Discussiononpersonalandprocesssafetyandoperationalriskand
performanceformsalargepartofthecommittee’sagenda.Thecommittee
receivesregularreportsfromthesafetyandoperationalriskfunction,
includingthequarterlyreportspreparedforexecutivemanagementonthe
group’sHSEperformanceandoperationalintegrity.In2010,excluding
meetingtimespecicallyaddressingtheGulfofMexicoincident,the
SEEACutilized42%ofitsagendaonsafetyandoperationalriskmatters
includingprocesssafety.Thissmallreduction,comparedwiththe51%
recordedin2009,reectedthecommittee’scommitmenttogaining
assuranceinotherareasofitsremitincludingcrisisandcontinuity
management,regulatorycompliance,environmentalmonitoring,security
andproductqualityrisk.
BPAnnualReportandForm20-F2010 99