Management systems and standards

Our commitment to high ethical standards is implemented through policies and practices in every aspect of our business and at every location where we operate. Corporate citizenship at Imperial Oil is integrated in the 16 policies that make up our Standards of Business Conduct. We ensure long-term performance through our management systems, which include the System of Management Control Basic Standards, Controls Integrity Management System (CIMS), Operations Integrity Management System(OIMS), and Best Practices in External Affairs (BPEA).

Standards of Business Conduct
Imperial’s Standards of Business Conduct form the foundation of our dedication to the highest ethical standards and provide each of our employee and non-employee directors with a common set of ethical standards. The standards consist of guiding principles, 16 foundation policies and open-door communication procedures. The Standards include clear guidance on ethics, gifts and entertainment, conflicts of interest, antitrust and directorship policies. Responsibilities for authorizing, approving and recording financial transactions are appropriately segregated to reduce risks.

No one at Imperial has the authority to make exceptions or grant waivers with respect to the standards. Our integrity and reputation depend on our employees’ understanding of and compliance with these policies. Employees, including supervisors and managers, are subject to disciplinary action up to and including termination for violation of our policies. In addition, contractors who violate our policies may be denied site access.

Human rights

Imperial does not tolerate violations of human rights in any form in its business. Our Standards of Business Conduct provide a framework for operating responsibly and are consistent with the spirit and intent of the Canadian Charter of Rights and Freedoms and the United Nations’ Universal Declaration of Human Rights as it applies to private companies.

Up close:

Our Standards of Business Conduct

Our Standards of Business Conduct provide each employee with guidelines on ethics, conflicts of interest, nondiscrimination and harassment in the workplace.

Our Controls Integrity Management System and Operations Integrity Management System form the framework by which we manage safe, reliable, environmentally responsible and ethical operations as well as corporate citizenship issues.

Control systems
Business control systems are rigorously applied at our operations across Canada. Our System of Management Control Basic Standards defines the basic principles, concepts and standards that make up our business controls. Our Controls Integrity Management System provides a structured approach for assessing financial-control risks, establishing procedures for mitigating concerns, monitoring compliance with standards and reporting results to management. Regular self-assessments and audits ensure that operating controls and standards are met by every operating unit.

Our financial controls meet or exceed the requirements of the Sarbanes-Oxley Act and the NYSE listing standards. An independent assessment carried out in 2009 by PricewaterhouseCoopers LLP, concluded that our internal controls system is effective.

Operations Integrity Management System
Our Operations Integrity Management System (OIMS) has been in place since 1992 and addresses safety, health, security and environmental risks at our facilities. OIMS provides a systematic, structured, and disciplined approach across our businesses and facilities and enables us to measure progress and management accountability in these areas. It also ensures that we appropriately engage with the communities in which we operate.

OIMS is embedded in day-to-day work processes to establish common expectations that every operating unit must fulfill to proactively manage risk. Over time, it has become a part of our culture and the way our organization works, improving operations reliability and reducing safety, security, health and environmental risks and impacts. OIMS is implemented over the complete life cycle of a project — from exploration and development to production and reclamation — and ensures that management is accountable for results. We expect our business-line managers to comply with all OIMS requirements and conduct OIMS assessments of our operations annually.

The overall effectiveness of OIMS is reviewed every five years and adjusted accordingly. As a result, OIMS has been continuously improved to include behaviour-based safety, security, a greater focus on environmental matters and enhanced community involvement.

The latest evaluation in 2007 by Lloyd’s Register Quality Assurance, Inc. (LRQA) attested again that OIMS meets the requirements of the ISO 14001 standard for environmental management systems. LRQA also confirmed that OIMS meets all the requirements of the Occupational Health and Safety Assessment Series for health and safety management systems (OHSAS 18001).

Responsible Care®

Another test of OIMS effectiveness is our participation in Responsible Care®, an initiative of the Chemistry Industry Association of Canada (CIAC) that requires CIAC members to follow strict codes of practice that govern the safe and environmentally responsible handling of chemicals throughout their life cycle. In addition to conducting self-assessments, all CIAC members, as a condition of membership, undergo reverification by an external team every three years to determine if they are continuing to meet Responsible Care® requirements. Companies, for example, are tested for evidence that they:

• have effective personnel and process safety management systems
• are able to manage emergencies
• identify, manage and work to minimize emissions and wastes
• assess the ability of distributors to correctly handle their products
• know community concerns and respond sensitively to them

The Responsible Care® ethic and guiding principles have recently been revised and updated. The new ethic requires that member companies dedicate themselves, their technology and their business practices to sustainability – the ongoing betterment of society, the environment and the economy.

In 2009, senior management in our Chemical business introduced workers at our Sarnia chemical plant to the new ethic. The Sarnia plant will be among the first operations in Canada to be assessed against the new ethic and codes of practice when it undergoes reverification in the fall of 2010.

   In 2009, Jonathan Parsons at our chemical plant in Sarnia won the Responsible Care® award for spearheading an effort to make changes to the way we manage fugitive emissions at our plants in Sarnia. His suggestions improved our ability and success rate for making online repairs and contributed to a significant reduction in fugitive emissions.

Operational integrity assessments

Under OIMS, every operating unit undergoes a regular cycle of improvement with self-assessments each year and external assessments every three to five years. External assessments are conducted by company experts outside the operating unit being assessed.

In each case, opportunities for improvement are identified and addressed, and progress is monitored through regular management reviews.

Best Practices in External Affairs
At Imperial, we are continually working to enhance the quality of our community engagement and external relations. We use a strategic planning and management tool called Best Practices in External Affairs (BPEA), to develop and carry out comprehensive and robust community awareness plans. This tool enables us to optimize the impact and value of community outreach programs by managing relationships with external stakeholders through better understanding of the viewpoints and concerns of the diverse communities in which we operate. Public Affairs works with different operations to increase their understanding of the tool, to identify local requirements for stakeholder engagement and to help them develop an action plan. Each operation stewards their community relations performance against the plan.