You are on page 1of 7

Management Approach Economic [EC]

Goals and performance Economic Performance we have set ourselves the following strategic goals in 2001: Policy This is a strategic object. No specific policy. However, there are operational guidelines to achieve the targets set for each Memorandum of Understanding (MOU) parameter in a year, viz: a) Reserve accretion -3P b) Economic value Added c) Average Finding Cost d) productivity per employee e) Project management Organizational responsibility The MOU parameters are cascaded down by means of a performance contract with various assets/ basins thus creating a organization wide responsibility of meeting the economic performance goals. Training and awareness There is a wide variety of training whose ultimate aim would be to increase productive, gross margin for the organization. ONGC training academy along with 12 other institutes provide the necessary expertise required for training and skill development of ONGC employees in order to achieve strategic targets. Monitoring and follow Up Every quarter, ONGC corporate planning department prepares a performanc e report vis a vis MOU stated targets which give a picture on where is ONGC is in terms of meeting its goals in this aspect. To monitor our CSR targets as set under MOU, we take the help of our inbuilt monitoring system designed in our CSR structure. Top manageme nt monitors and followsup the progress of other targets related to indirect infrastructur e developmen t as a result of raising operational facilities at various sites in the asset review

To double Reserve Accretion from 6 to 12 BTOE (Billion Ton Oil Equivalent) by 2020 To improve the recovery factor from 28% to 40% by 2020 To source 20 MMTPA (Million Metric Ton Per Annum) equity oil & gas by 2020

Indirect Economic Impacts

Goals: To give boost to the overall development in the areas in and around our work-centre as a result of our operation in terms of Infrastructure development

Providing indirect employment Creating capacity to service day today operational demands Creating ancillaries

CSR Policy Adoption of policy of indigenization CSR guidelines from DPE

Performance: ONGC operations provide the necessary boost required for the industrial growth of the region.

Adherence to the DPE guidelines of spending 2% of net profit of previous financial year Doing an EIA before establishing any facility

Organizational responsibilities towards the development of society cascade down from the CSR MOU targets. We have a well defined organizational structure to operationalise our CSR MOU targets. Regarding the establishment of the operational facilities and raising infrastructure indirectly, we follow our organizational due diligence procedures. Asset Manager/Basin Manager/ Plant Head are generally the top decision making authority but call beyond his BDP power, he/she generally refer to the apex management.

We have well laid down training policy and mechanism to cater the needs of our employee and stakeholders towards achieving these goals.

While creating the operational facilities, we do raise approaching roads towards this in the remote areas, creating infrastructures. We also build schools, hospitals to cater to our employees who in turn service the community in and around our operations. The requirement of the physical inputs for ONGC's operations results in setting of ancillary industries and vendors network, generating a lot of economic potential. Oil and gas production ushers an era of growth, many core sector industries like power, fertilizer and transport, thrive as a natural consequence of the oil and gas availability.

meetings.

Market presence

Goals:

To eng a g e l o c a l supp l i e r s in ou r ope r a t i o n s To s t r e n g t h e n ou r ven d o r deve l o pme n t ini t i a t i v e s To deve l o p l o c a l commun i t y by o f f e r i n g j o b s

Adherence to laws of the land (minimum wage and labour laws) Recruitment policy, HR policy

Compliance to minimum wages act is the responsibility of Head- IR at each location who in turn reports to Chief ER, ONGC.

Training on this aspect is provided by ONGC at its individual assets/basins

Performance:

Base d on c r i t e r i a l i k e te c h n i c a l r e q u i r e m e n t s , mate r i a l avai l a b i l i t y , c o s t s and ec o n o mi c s, we so u r c e mo r e t h a n 80% o f ou r r e q u i r e d mate r i a l s l o c a l l y (f r o m India) Ho we v e r , in case o f ce r t a i n EPC pr o j e c t s , t h e r e we r e ins t a n c e s whe r e we so u r c e d ou r r e q u i r e m e n t s f r o m ou t s i d e ven d o r s (ab r o a d ) ONGC strives to support the local community by providing jobs as far as possible. As per our policy for certain levels of employees we prefer to hire local staffs from within the region where the work centre is located. However, with regard to senior level employees, we recruit equally from all over India.

The compliance to the rule of the land has been monitored rigorously by our ER department.

Management Approach Environment [EN]


Goals and performance Materials Use of materials such as cement, pipes, fluids and chemicals have a direct impact on average cost of finding and average cost of production. These are included as MOU targets. Thus material use efficiency is indirectly tracked through these MOU indicators. Policy Not covered by any specific policy. However, material cost targets form part of operational targets. Organizational responsibility Sanction of materials for E&P operation is delegated to unit head of various facilities with appropriate power of delegation. Training and awareness Training on operational efficiency, best practices, material use and know-how of specifications is conducted through the help of ONGC training academies leading to development of required skills in ONGC employees and building capacity to manage this aspect. Training on energy efficiency, energy conservation is conducted through the help of ONGC training academies. Sometimes external assistance say help from PCRA is sought to train ONGCians in energy efficiency principles. This leads to development of required skills in ONGC employees and building capacity to manage this aspect. Training on water use efficiency, best practices, is conducted through the help of ONGC training academies. This leads to development of required skills in ONGC employees and building capacity to manage this aspect. Monitoring and follow Up Monitoring through company enterprise system and through appropriate MIS reporting structure Monitoring through company enterprise system and through appropriate MIS reporting structure Monitoring through company enterprise system and through appropriate MIS reporting structure The monitoring of the offshore biodiversity is being done by external agencies like National Institute of Oceanography (NIO) and National Environmental Engineering Research Institute (NEERI) in every two years. Monitoring through company enterprise system and through appropriate MIS reporting structure.

Energy

Energy conservation in terms of energy efficiency and oil conservation is the key focus. Encourages development and usage of alternative sources of energy.

Energy conservation Policy

Energy efficiency is a prime performance indicator for all facilities of ONGC. ONGC head of each facility is responsible for undertaking energy efficiency initiatives at their facilities

Water

Corporate wide water use efficiency is not a direct goal. However, water is an important component in our E&P operations and has an impact on the overall cost and productivity of locations

Water policy in the making

ONGC location heads are responsible for water use in their E&P facilities

Biodiversity

We have developed a two-pronged response to the major issue of protection of biodiversity which includes assessing the risk and impacts of our activities and managing biodiversity and integrating it into Environment Management System (EMS).

No specific policy, but covered as part of HSE and operational approach. We also undertake activities to promote and preserve biodiversity

ONGC location heads for offshore and onshore locations are responsible for protection of biodiversity

Training on biodiversity, best practices, is conducted through ONGC training academies with the help of external agencies.. This leads to development of required skills in ONGC employees and building capacity to manage this aspect.

GHG Management

Development , validation, and verification of CDM projects, Trading of CER, GHG accounting

Policy on climate change and sustainability

For air emissions (except GHG emissions), ONGC heads are responsible for maintaining local environmental compliance. ONGC has embarked on a journey to establish the GHG inventory. The responsibility is with ChiefCarbon Management Group at

Training on GHG emissions accounting as provided by external agencies

corporate office.

Effluents and Waste

To be in compliance with local limits and compliance

HSE Policy

ONGC location heads are responsible for waste and effluent generation /disposal in their E&P facilities

Training on best practices for waste and effluent generation /disposal provided to ONGC employees

Compliance

HSE audits, surveillance audits to support accreditation

HSE Policy

HSE function at ONGC with a delineated structure at locations

HSE Training imparted by ONGC institutes

Monitoring through company enterprise system and through appropriate MIS reporting structure Monitoring through company enterprise system and through appropriate MIS reporting structure

Management Approach: Social-Labour practices and decent work


different sections) Major issues to manage: Attracting and retaining talent for organization success and attainment of vision Managing the age and skill profile of employees Training and professional development of employees Ensure accident free workplaces and offer the best in class working conditions Ensure high level of safety in our processes, installations and services

(Some of these are stated in the report in

Please see the section in report Developing and nurturing our workforce for more details. Goals and Performance - Every year a MOU is signed between Ministry of Petroleum and Natural Gas (MOPNG) and ONGC which indicate targets in various parameters concerning ONGC performance. The MOU mentions HR initiatives in the following areas to be implemented or under implementation: Online performance appraisal system with a view to establish a transparent, objective and multidimensional performance evaluation system and to introduce performance contracting process in alignment with best industry practices Skill mapping exercise Coaching/Mentoring

Policies- Various HR policies and guidelines on the above issues Organizational Responsibility - Our Director (HR), Member of the Board, is the senior most decision maker in all employment and HR related matters. Training and awareness Please see the section in report Training and education for more details. Monitoring and follow up- Since 2008, we have introduced regular HR audits. These audits are meant to result in a greater understanding of the employee perception of our HR strategies, structure and systems.

Management Approach: Social-Society


The Society Aspect of GRI focus on the impacts organizations have on the communities in which they operate, and how the organizations interactions with other social institutions are managed and mediated. In particular, information is sought on bribery and corruption, involvement in public policy-making, monopoly practices, and compliance with laws and regulations other than labor and environmental. Corporate governance at ONGC is not merely meeting compliance and creating checks and balances, it is an ongoing measure of superior delivery of companys objectives with a view to translate opportunities into reality. The primary objective is to create and adhere to a corporate culture of conscience and consciousness, transparency and openness, fairness, accountability, propriety, equity, sustainable value creation, ethical practices and to develop capabilities and identify opportunities that best serve the goal of value creation, thereby creating an outperforming organization. With regards to community development, ONGC is playing an important role in strengthening the fabric of society. We, as a company in India's corporate world, have sense of moral responsibility towards the community of people where it operates and the country at large. Local population is the one which is benefited most as a result of the ONGC operations in the region. It generates employment & business opportunities, which in turn improves the overall economy of the region and the living standards of the community. Apart from this, grants-in-aid help in building schools and hospitals. Villages are adopted and several health and community welfare programs are organized in the area around our activities.

Goals and Performance Every year a memorandum of understanding is signed between MOPNG and ONGC which indicate targets in various parameters concerning ONGC performance. Community development projects are an important MOU parameter carrying a 5% weightage. The performance parameters represent the completion of CSR project milestones which are spread over each quarter. Policies a) Whistle blower Policy-This policy is formulated to provide an opportunity to employees and an avenue to raise concerns and to access in good faith the Audit & Ethics Committee, to the highest possible standards of ethical, moral and legal business conduct and its commitment to open communication, in case they observe unethical and improper practices or any other wrongful conduct in the company, to provide necessary safeguards for protection of employees from reprisals or victimization and to prohibit managerial personnel from taking any adverse personnel action against those employees. b) CSR Guidelines- In July 2009, ONGC published the CSR guidelines in order to pursue its responsibility to society in a structured manner. The 2009 guidelines define ONGCs role on corporate social responsibility emphasizing transformation of the organization from Philanthropy to Stakeholder participation. The guidelines further stresses on the project approach of meeting societal objectives and stresses on impact measurement as well as a new system of accounting and reporting on CSR spend through the MIS system. c) A number of policy initiatives have been taken at ONGC with a view to promoting transparency, simplification of procedures and in greening the vendor chain. Our corporate policy on greening vendor chain allows us to inculcate cleaner production and carbon consciousness in our vendors and suppliers. d) We are the first signatory in India to the Integrity Pact, a tool by Transparency International to mutually enhance transparency with suppliers. Organizational responsibility- Our Chief-corporate social responsibility at ONGC corporate office is the senior most responsible person for community development projects. At the work-centre locations, the Head-HR/ER is responsible for CSR programmes and is assisted by a full-time CSR coordinator. The Vigilance department at our headquarter, Dehradun is led by Director General (Security), in our initiatives towards the path of preventive vigilance. Training and awareness - The Vigilance department regularly carries out sensitization programmes at all work centers. Each year, a Vigilance Week is organized whereby we invite guest speakers on the subject and conducts essay competitions; quiz competitions etc. for awareness creation. Monitoring and follow up - Our Management is empowered through a set of structured procedure to take necessary corrective actions in case of any occurrence of procedural lapses or act to remove any ambiguity or obsolesce in existing rules and procedures. A structured meeting between the Chief vigilance officer, our Chairman and the ONGC Board is held every quarter to sort out pending issues and to implement new guidelines issued by Central vigilance commission under the Government of India. ONGC has taken several initiatives towards the vigilance system improvement and streamlining of business procedures towards greater transparency.

Management Approach: SocialProduct responsibility


Over the years, ONGCs product line has grown from one product (Crude oil) to include products like Natural Gas, LPG, Naphtha, HSD, SKO, ATF, etc. Marketing in ONGC regained its pre-eminent position again in response to changing policies ushered in by the government in the form of phased deregulation starting 1997 and its completion by April 2002. In ONGC, product responsibility is approached holistically to identify and minimize the environmental impact in our exploration and production facilities as well as meeting the customer needs in various market segments. We are committed to meeting customers expectations, anticipating their needs, and by providing value added products. Main Issues in this aspect: Customer health and safety impact on ONGC products Compliance with laws and regulations for products Customer satisfaction practices

Goals and Performance- Customer health and safety are an important aspect for ONGC which is ensured by following the rules and regulations related to petroleum products in India. In carrying out official functions, ONGC officials abide by laws pertaining to oil and gas exploration and production in India particularly in regard to operational and safety requirements. Some of the important laws and regulations are

The Petroleum and Natural Gas Regulatory Board Act, 2006 Guidelines for laying Petroleum Product Pipelines, 2002 The Energy Conservation Act, 2001 Petroleum Products (Maintenance of Production, Storage and Supply) Amendment Order, 2000 Motor Spirit and High Speed Diesel (Regulation of Supply, Distribution and Prevention of Malpractices) Amendment Order, 2007

These regulations pertain to various facets of oil and gas value chain activities with special emphasis on health and safety of ONGC installation as well as end customers of ONGC products mainly downstream oil and gas companies. Compliance to these laws and guidelines is of utmost importance to ONGC. Customer satisfaction is primarily ensured through product availability at an agreed specification and as per existing contract of supply. We also take steps towards ensuring a steady supply of value added products, which are targeted to meet customer specifications. Policy ONGC health, safety and environment policy (http://www.ongcindia.com/hse.asp ) is a guiding framework for engaging in environment friendly operations which in turn ensure that ONGC is in compliance with laws and regulations on products. ONGC has also come up with a marketing handbook which illustrates essential marketing related information in one place for the perusal of all stakeholders concerned. Organizational responsibility- We have a detailed organizational structure with clearly define role for achieving our goals. Training and awareness- To enhance training and raise awareness on product responsibility, we conduct focused trainings on environment, health and safety aspects of oil and gas operations to our employees as well as compliance to product laws and regulations. We also engage the end consumer of petroleum products by supporting focused petroleum conservation trainings and awareness building activities through industry associations and representative bodies. Monitoring and follow up- We conduct health, safety and environment audit for ascertaining the process safety as per leading international standards. There is a defined reporting on health and safety indicators from the locations to corporate so as to ensure proper compliance to rules and regulations on product responsibility.

You might also like