Diapositiva 1

1
Fourth Annual Forum on Business Ethics and
Corporate Social Responsibility in a Global
Economy RESTORING RESPONSIBILITY THE
ACCOUNTABLE CORPORATION Milan, 13-14 September
2007 Marco Stampa Eni Sustainability
office TRANSPARENCY IN THE OIL GAS SECTOR ENI
COMMITTMENT
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Transparency in business means1) governance
and control system to prevent corruption and non
compliant behaviour (Eni Code of Practice (1994,
amended with HR principles in 2003, represents
the general framework in the fields of business
ethics, transparency and accountability, human
resources relations, HSE, community relations and
Human Rights. Specific Policies-Guidelines set
company rules on the single matters)2) be
proactive to engage with stakeholders in a
systematic way3) report on payments to
governments and national authorities in areas of
operations

3
Governance and anticorruption system

• In its Code of Practice Eni prohibits not only
  corruption and/or illegal practices but also any
  type of non legitimate behaviour
• About business ethics, Eni states that
  activities must be performed in full respect of
  the law, in fair competition, with honesty,
  integrity and good faith, with due respect for th
  legitimate interest of its customers, employees,
  shareholders, commercial and financial partners
  and the communities where it is present.
• To fulfil with these principles, Eni adheres to
  national law and international regulations (i.e.
  OECD guidelines) on accountability by adopting a
  specific Model of Organization Control and
  Management.

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The Model from Decree 231/2001

• Decree 231/2001 defines and regulates the
  administrative responsibility of persons,
  companies and partnerships. Current field of
  application includes
• Crimes against Public Administration
• Corporate Crimes
• Crimes against democracy and Public Security
  (i.e. terrorism funding!)
• Crimes against individuals
• Market abuse
• Transnational crimes
• The Model foresees standards and control
  measurement for each crime typology

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The Eni Model for Decree 231/2001

• The Model is communicated to all operating units
• All subsidiaries mus adopt their own Model in
  line with Corporate standards they have also to
  identify further measures related to their
  peculiar activities
• A Watch Structure acts as monitoring and
  verification body to check alignment to Eni Model

6
Training and internal communication

• Apart from being communicated to all employees
  and managers, the Model is implemented through an
  intensive training program
• Ad hoc seminars for top managers
• E-learning initiatives to senior and unit
  managers and key officers. Attendance is
  mandatory and you can pass through the test only
  when 100 score is achieved
• Other training schemes within the company basic
  training courses for neo-graduates and junior
  managers
• Information initiatives and discussion groups on
  Codes implementation and business ethics are
  also organized

7
Third parties clauses

• Legal Dept. has defined clauses for third parties
  (i.e. contractors) for the compliance to Eni
  Model these clauses refer to bid and contract
  requirements
• Non compliance is considered as serious
  infringement of Eni rules. The company has the
  power to suspend or even break the contract and
  ask for remediation and cost remboursement in
  case of serious non compliance

8
Sarbanes Oxley Act (SOA) Control System

• To adhere to Security and Exchange Commission
  (SEC) recommendations, Eni has adopted the
  Committee Of Sponsoring Organization Report as
  reference model for the assessment of the control
  system. We consider the system effective when and
  if are in place the following
• An adequate control (corporate governance, human
  resource management, code of practice, etc.) to
  really influence the sensitiveness of control
  management
• Actions to identify and assess risks
• Control activities to mitigate identified risks
• Adequate information system and communication
  flows between top management and operating units
  (and viceversa)
• Monitoring actions on effectiveness of the whole
  internal control working and design

9
The Whistle Blowing procedure

• 26 June 2006 Eni has approved a Corporate
  procedure on Whistle Blowing, even anonymous,
  received by Eni and subsidiaries (external and
  internal whistle blowing referred to any non
  compliant behaviour-practice, fraud,
  irregularity, violation, mobbing etc.)
• Aim of the procedure is to establish an unique
  information channel for all whistle blowing
  typologies to complete and reinforce the Internal
  Control System to be compliant with Section 301
  of the Sarbanes Oxley Act

10
Company Internal Control Bodies

• Bodies in charge of control are therefore
• Internal Control Comittee (5 non executive
  managers of which 4 indipendent) it surveilles
  adequacy of the Internal Control System
• Compensation Committee (4 non executives
  managers, of which 3 indipendent) it monitors and
  assesses BoD decisions on top management
  compensation)
• Board of Statutory Auditors (wthin Italian
  regulation it has the same functions given by SOA
  and SEC to the Audit Committee to USA listed
  companies)
• Code of Practice Guarantor (it is adopted in all
  operation units. At Eni is an external person)

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Company Internal Control Bodies

• Code of Practice Committee (in all subsidiaries)
• Watch Structure according to Decree 231/01. It
  has autonomous powers of control and is
  established in all subsidiaries who have Decree
  231 Model. At Eni corporate is formed by the
  Internal Audit Senior VP, the Legal Dept. Senior
  VP and the Organizational Dept. Senior VP
• Internal Audit (since July 2005 this position
  reports to both CEO and Chairman and according to
  new Italian Stock Exchange Code, to which Eni
  adheres, he/she reports on his/her work also to
  Internal Control Committee and to Board of
  Statutory Auditors his/her compensation is
  decided by Board of Directors)

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Transparency on payments
Transparency in the areas of operations is, in
practical terms, the company attitude to inform
the public on the various kind of payments
(royalties, bonus, profit shares, etc.) from the
companies to governments and national entities in
host countries owning natural resources
Stakeholders interest (NGOs, Investors,
International Financial Institutions), points out
that revenues flows are not oriented to illegal
activities and/or aims not compatible with
socioeconomic development of those
countries. Eni has signed in 2002 an agreement
with ICEM Energy and Chemical sector Trade
Unions on transparency and CSR
13
Extractive Industry Transparency Initiative
(EITI)
To ensure more transparency from extractive
companies and governments, UK Prime Minister Tony
Blair launched the Extractive Industry
Transparency Initiative (EITI) at Johannesburg
summit 2002. Goals address revenues to
sustainable development and poverty reduction,
reduce risks and conflicts, improve business
environment
After a multistakeholders consultation and
discussion at G8 summits, in 2003 a set of
Criteria and a voluntary reporting template for
both companies and governments have been
published. See web site www.eitransparency.org
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Who is doing what

• Host countries implementing EITI Azerbaijan,
  Kazakhstan,Popular Republic of Congo, Ghana,
  Kirghizistan, Nigeria, Sao Tomé Principe, Timor
  East and Trinidad Tobago
• Host countries announcing support Angola,
  Bolivia, Cameroon, Chad, Democratic Republic of
  Congo, Equatorial Guinea, Gabon, Niger, Peru and
  Sierra Leone.

Major International oil companies are supporting
EITI and some of them are implementing the model
in local contexts (Azerbaijan Nigeria Angola)
NGOs (Transparency International, Open Society
Institute/Soros, Save the Children) and investors
are pushing companies to support EITI and country
level initiatives. International Financial
Institutions (IMF, World Bank) support EITI.
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EITI Eni commitment

• Eni has attended from the very beginning the
  EITI multistakeholder consultation and on 11 Oct
  2005 joined EITI through a formal top management
  communication
• To support EITI in countries of operations Eni
  participates to local multistakeholder
  consultations and to International Advisory Group
  to implement and develop reporting schemes, once
  legal and commercial constraints are removed with
  general consensus

• In Kazakhstan a Memorandum of Understanding
  (MoU) with Kazakh Government has been signed in
  2005 by Agip Caspian Sea B.V. (for Kashagan
  project) and by Agip Karachaganak
• In Nigeria figures on payments to Nigerian
  government on oil related activities have been
  disclosed in 2006 by Eni subsidiary NAOC (see
  table below, also published in Eni Sustainability
  report 2006)