Sustainability Report 2019

www.nobeloil.com Report and reporting process

About Nobel Oil Group

Corporate Introduction governance from our CEO

Welcome to the “Nobel Oil – Sustainability Report, absolutely necessary for business success. To that end, Ethics and 2019”. This release coincides with the global pandemic ever since our inception, we have complied with labor compliance that has had a profound impact on everyone on the and human rights laws and worked to improve our planet, including business. The oil and gas industry has corporate governance system. We strive to increase EHHQRQHRIWKHZRUVWDɤHFWHGDUHDVEXWDWWKHVH employee awareness of this area by providing and extremely challenging times, Nobel Oil has made every continuously developing comprehensive trainings. Approach HɤRUWWRGHOLYHURQLWVFRPPLWPHQWV to sustainable To earn the trust of our stakeholders and be able to development We realize that long-term stability, competition and OLYHXSWRLWZHKDYHHVWDEOLVKHGDQHɤHFWLYHFRUSR- the capacity to create value for all stakeholders de- rate governance system and believe that this system pend on sustainable development. As was the case in helps us to enhance the company’s investment attrac- previous years, in 2019 we focused on socioeconomic tiveness and, therefore, increase its shareholder value. Interaction with stakeholders progress, industrial and environmental safety, and (ɤHFWLYHSHUIRUPDQFHDQGLQYHVWPHQWDWWUDFWLYHQHVV corporate social responsibility – the primary directions of the company are underpinned by trust among all of sustainable development. participants of corporate interaction. Nobel Oil continuously improves its corporate governance system in Our goal is to become an international engineering and the interest of sustainable development and operates Labor construction company capable of meeting all of its in line with the requirements of local laws, internal relations REOLJDWLRQVLQWKHVHɢHOGVLQWKHVDIHVWPRVWHɥFLHQW documents, various industry standards, as well as the and dependable manner. To achieve this goal, Nobel best local and international practices. Oil draws on the world’s best practices in sustainable development. As a safe, reliable and responsible company in Azer- Health, baijan and all the regions we operate in, we do tangible Safety and Environment Nobel Oil believes that the human factor is critical work to develop these regions, improve people’s living to achieving all of its objectives and always provides standards, create and develop economic value. In addi- safe working conditions and occupational safety for tion to creating jobs in the countries of our operation, the company and everyone working for it. We place a we can have a positive economic and social impact on Quality high priority on the development of an occupational society by purchasing a large amount of equipment management safety culture in order to improve working conditions and materials locally. and occupational safety and reduce the number of occupational injuries. We believe that this is critical to In addition to the above, the 2019 report examines providing industrial and environmental safety, which is our operations and projects in Azerbaijan and other another primary goal of the company. regions, occupational safety and environmental Procurement SHUIRUPDQFHDVZHOODVRXUFRQWULEXWLRQVWRGLɤHU- experience Over the last 15 years, we have worked hard to es- ent segments of society. I do hope that you enjoy WDEOLVKDQHɤHFWLYHDQGWUDQVSDUHQWLQWHUDFWLRQZLWK reading this report, because it has been prepared in stakeholders. To accomplish this, we have always a transparent and objective manner. We would love accommodated the opinions and requests of our to hear your feedback on how we can improve and Social stakeholders and shown respect for their rights and do a better job. support interests.

Nobel Oil believes that adherence to local and interna- Vugar Samadli tional ethical principles and guidelines is CEO GRI Standards compliance table

Nobel Oil / Sustainability Report 2019 3 Nobel Oil / Sustainability Report 2019

Report and reporting process

2 GRI 15 Number DƧĹčĔŐĹśĔƓͩťĬͩƟĴĔͩDŐťąêŐͩ Number of published ¡ĔƈťƋƟĹśĭͩPśĹƟĹêƟĹƾĔͩ͌D¡P͍ͩ ťĬͩĹřƈťƋƟêśƟͩ śťś͒ǛśêśĆĹêŐͩ ©ƟêśčêƋčƓͩƿĔƋĔͩƧƓĔčͩêƓͩƟĴĔͩ ƟťƈĹĆƓ reports řêĹśͩƋĔĬĔƋĔśĆĔͩčťĆƧřĔśƟͩĹśͩƟĴĔͩ ƈƋĔƈêƋêƟĹťśͩťĬͩƟĴĔͩ˖˔˕˝ͩƋĔƈťƋƟ

5 Report Quality assurance principles and reporting process

About Nobel Oil Group

BALANCE COMPARABILITY ACCURACY The company discloses both posi- The data contained in the report The company provides accurate tive and negative results of its op- UHɣHFWVERWKWKHFRPSDQ\ V and detailed information on all ma- Corporate erations, demonstrating openness approaches to managing various jor topics discussed in the report, governance and transparency in its interaction aspects of its operations and enabling stakeholders to evaluate with stakeholders. outcomes in each activity direction. WKHHɤHFWLYHQHVVRIWKHFRPSDQ\ V All results are shown in a two- to performance. The main emphasis in three-year context, so that stake- describing approaches to various Ethics and holders can analyze important DVSHFWVRIWKHFRPSDQ\ VDFWLYLWLHV compliance indicators in retrospect. is placed on the explanation of internal documents (Policy, Regula- tions, Code, etc.) Approach to sustainable development

Interaction with TIMELINESS CLARITY RELIABILITY stakeholders The company publishes its reports The company prepares the report All information published in the in a scheduled manner in the third for stakeholder use as clearly report was provided by various quarter of each year enabling and transparently as possible. teams within the company. The stakeholders to make informed All concepts, abbreviations and report is based on the principles of Organization of reporting process decisions. metric units used in the report are accuracy, reliability and complete- Labor explained. ness of information and approved relations This Sustainability Report (hereinafter referred (SASB), the Climate Disclosure Standards Board E\WKHFRPSDQ\ VH[SHUWVKHDGVRI to as the report) covers the period from January (CDSB) and the London Stock Exchange’s environ- subsidiaries and the CEO. 1 to December 31, 2019. The primary goal of this mental, social and corporate governance guide- Health, report is to provide all stakeholders with compre- lines were also taken into account in discussing Safety and Environment hensive and transparent information about Nobel FHUWDLQWRSLFV7KHɢQDQFLDODQGHFRQRPLFLQGL- Oil’s activities in the areas of sustainable devel- cators presented in the report are based on the opment and corporate social responsibility. Our International Financial Reporting Standards (IFRS). Sustainability Reports are the primary source of Content defining Quality information on the company’s economic, environ- The company’s Sustainability report is prepared management mental and social performance, as well as ethical E\GLɤHUHQWWHDPVDQGDSSURYHGE\WKH&(27KH principles approaches to corporate governance and business report is based on principles such as materiality, operation. The report also provides information stakeholder inclusiveness, sustainable devel- ,QSUHSDULQJWKHUHSRUWZHLGHQWLɢHGLPSRUWDQW The company uses various mechanisms to meet Procurement on the company’s strategy, policies, management, opment and integrity, as well as such notions topics using two criteria: the degree of relevance and exchange information with stakeholders on a experience activity areas, interaction with stakeholders, and as balance, comparability, accuracy, timeliness, to stakeholders and to business activities. By regular basis (for more information, see Table ---). the work we do. transparency, and reliability, mentioned in the GRI important topics for the company, we mean areas guidelines. associated with Nobel Oil’s impact on the economy, In addition, in the interests of internal and external The guidelines of the Global Reporting Initiative environment, society and employees, as well as stakeholders, we have analyzed global trends and Social (GRI) Standards on the preparation of sustainabil- Comments and requests related to sustainabil- WKRVHWKDWFDQVLJQLɢFDQWO\LQɣXHQFHVWDNHKROGHU sustainability reports of leading companies, engaged support ity reports were used as a methodological basis LW\UHSRUWVDUHVHQWWRWKH(PDLOSURYLGHGbLQWKH assessments and decisions. To identify the most ZLWKWKRVHUHVSRQVLEOHIRUGLɤHUHQWDUHDVRIVXVWDLQ- in writing the 2019 report. In addition, the recom- “Contact Information” section. All suggestions and important topics to be disclosed in the report, we able development, reviewed media information about mendations of other industry standards such as comments received will be taken into consider- carefully analyzed the data obtained with the par- the company’s activities, the Global Reporting Initiative GRI Standards the Sustainability Accounting Standards Board ation in the preparation of the next Report. ticipation of stakeholders. (GRI) standards and other recommendations. compliance table

6 Nobel Oil / Sustainability Report 2019 Nobel Oil / Sustainability Report 2019 7 As a result, in contrast to last year, we have expand- training, creation of decent working conditions and LIST OF IDENTIFIED IMPORTANT TOPICS ed the list of important topics. We hope that these provision of quality services. Report ʘ CONTENT COVERAGE SECTION and reporting procedures will help us meet stakeholder expecta- process tions in relation to information disclosure. To enable comparability and collation of data, most Company of the main indicators are presented in a three-year Employees Suppliers and contractors As a result of a comprehensive analysis, we have context covering the 2017-2019 period, as well as 1 Anti-corruption Shareholders and Investors Ethics and compliance LGHQWLɢHGLPSRUWDQWWRSLFVLQWKHPDWUL[RILPSRUW- the plan for 2020,. Customers About Society Nobel Oil Group ant activities(Figure 1). State The coverage of the report is the same as last year. Company Occupational safety and Employees This report examines in greater detail a number of ,WLQFOXGHV1REHO2LOʈVKHDGRɥFHZKLFKSURYLGHV 2 Suppliers and contractors Health, Safety and Environment health (OSH) Shareholders and Investors WKHFRPSDQ\ʈVSULRULWLHVLQWKHɢHOGRIVXVWDLQDEOH supervision and management of Nobel Oil Group State Corporate development in 2019. In particular, special emphasis companies, subsidiaries such as Glensol, which Company governance has been placed on topics such as industrial and provides maintenance services to customers in the Employees Our impact on climate Shareholders and Investors occupational safety in contractor organizations, energy sector, and Prokon, a company providing a 3 Suppliers and contractors Health, Safety and Environment change Customers greenhouse gas emissions, asset integrity and full range of construction, engineering and pro- Society State process safety, anti-corruption activities, employee curement services. Ethics and Company compliance Subcontractor and supplier 4 Shareholders and Investors Procurement SUHTXDOLɢFDWLRQSURFHVV Suppliers and contractors Society Company 5 Diversity and inclusion Employees Labor relations Approach Society to sustainable Company development Employees Shareholders and Investors Figure 1.. Matrix of important activities 6 Economic indicators Suppliers and contractors Economic indicators Customers Society 1 State Interaction with 3 Company stakeholders 4 Employees 2 Business ethics and code Shareholders and Investors 7 Suppliers and contractors Ethics and compliance of conduct Customers 5 Society State 8 Labor Company relations 7 Employees 8 Risk management Shareholders and Investors Customers Corporate governance 11 Society 14 13 State Health, 9 Company 10 Employees Safety 9 Quality management Shareholders and Investors Quality management and Environment Customers 15 12 Company 6 Shareholders and Investors Suppliers and contractors IMPORTANCE FOR STAKEHOLDERS IMPORTANCE 10 Environmental compliance Health, Safety and Environment Customers Quality Society State management Company 11 4XDOLɢHGZRUNIRUFH Employees Labor relations Customers Company Procurement 12 Information transparency Suppliers and contractors Ethics and compliance IMPORTANCE FOR NOBEL OIL Society experience State Company Suppliers and contractors Health, Safety and Environment 13 Waste management Society Sustainable development topics: State Social Company support Suppliers and contractors 14 Social support Society Social support State Company 15 Employee satisfaction Suppliers and contractors Labor relations Society GRI Standards ,ĆťśťřĹĆ ,śƾĹƋťśřĔśƟêŐ ©ťĆĹêŐ {ƋĭêśĹǏêƟĹťśêŐ State compliance table

8 Nobel Oil / Sustainability Report 2019 Nobel Oil / Sustainability Report 2019 9 Nobel Oil / Sustainability Report 2019

About Nobel Oil Group

1926 238 4 6 Personnel ¡ĔƾĔśƧĔ̽ͩ Country ©ĔƋƾĹĆĔͩ mln$ lines

11 Report Development history and reporting process

pťąĔŐͩ{ĹŐͩ©ĔƋƾĹĆĔƓͩƋĔĆĔĹƾĔƓͩͩ PROKONͩĔśƟĔƋƓͩƟĴĔͩ¡ƧƓƓĹêśͩřêƋōĔƟ̼ͩ P©{ͩ˗˛˔˔˕̾ͩ˖˔˕˚ͩͩĆĔƋƟĹǛĆêƟĹťśͩ ©{¡ͩ ®ͩĔśƟĔƋƓͩƟĴĔͩ¶ƧƋōĹƓĴͩřêƋōĔƟ̼ͩ ͌êśƟĹ͒ąƋĹąĔƋǅͩřêśêĭĔřĔśƟͩͩƓǅƓƟĔř͍̼ͩ 2019 About About Nobel Oil Group

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Nobel Oil Ltd was founded in 2005 as a company al standards, Nobel Oil transformed its corporate ͩƓƧąƓĹčĹêƋǅͩ ͩƓƧąƓĹčĹêƋǅͩťĬͩPROKONͩĔśĭêĭĔčͩĹśͩ Health, providing drilling, assembly, well workover, construc- structure, moving the entire petroleum industry ser- of DŐťąêŐͩ,śĔƋĭǅͩ©ťŐƧƟĹťśƓ̽ͩ ĆťśƓƟƋƧĆƟĹťśͩêśčͩƈƋťŊĔĆƟͩřêśêĭĔřĔśƟͩĹƓͩ Safety ƿĴĹĆĴͩťƈĔƋêƟĔƓͩêśčͩřêĹśƟêĹśƓͩťĹŐͩǛĔŐčͩ tion, engineering, repair and maintenance services in vice segment under Nobel Oil Services (UK) Limited. 2012 ĔƓƟêąŐĹƓĴĔč̼ͩ and Environment ĔƊƧĹƈřĔśƟ̽ͩĹƓͩĔƓƟêąŐĹƓĴĔč̼ͩ the Caspian oil and gas industry. Today, Nobel Oil Services (UK) Limited is a group of In 2013, Nobel Oil companies associated Quality completed a Our goal: with fast-growing and pťąĔŐͩ{ĹŐͩčĔƾĔŐťƈƓͩĹƟƓͩĔǄƈŐťƋêƟĹťśͩêśčͩ management ƈƋťčƧĆƟĹťśͩêĆƟĹƾĹƟĹĔƓ̼ͩ comprehensive The company’s goal is to become an international GLYHUVLɢHGHQHUJ\VHFWRUV 2008 strategic overview of its engineering and construction company by contrib- Currently operating in activities. As a result of uting to the socioeconomic development of the the oil and gas, energy the overview, the decision countries in which it operates, adhering to indus- and construction sectors pťąĔŐͩ{ĹŐͩĔǄƈêśčƓͩĹƟƓͩƓĆťƈĔͩ ąƘĔƋťśͩ êǏřêͩ͌ ®͍ͩĔƓƟêąŐĹƓĴĔƓͩ Procurement ąǅͩêččĹśĭͩčƋĹŐŐĹśĭ̽ͩƿĔŐŐͩƿťƋōťƾĔƋͩ êͩŊťĹśƟͩƾĔśƟƧƋĔͩƿĹƟĴͩ©{¡ͩƟťͩƈƋťƾĹčĔͩ experience was made to assess the trial, environmental, corporate governance and DQGRɤHULQJDYDULHW\RI êśčͩĔśĭĹśĔĔƋĹśĭͩƓĔƋƾĹĆĔƓͩ 2007 ĆťřƈƋĔĴĔśƓĹƾĔͩčƋĹŐŐĹśĭͩêśčͩƿĔŐŐͩ company’s organization- social responsibility standards. services to its customers, ƟťͩĹƟƓͩƈťƋƟĬťŐĹť̼ řêśêĭĔřĔśƟͩƓĔƋƾĹĆĔƓ̼ͩ al capabilities, strategic Nobel Oil Services (UK) goals, markets and opportunities for growth both /LPLWHGLQFOXGHVIRXUVXEVLGLDULHVDQGɢYHMRLQW pťąĔŐͩ{ĹŐͩdƟč̼ͩĹƓͩĔƓƟêąŐĹƓĴĔčͩ Social regionally and globally. ventures. support êƓͩêͩƈƋťĆƧƋĔřĔśƟͩ ƓĔƋƾĹĆĔͩƈƋťƾĹčĔƋ̼ 2005 In 2014, in order to place its Azerbaijan business We are a company that delivers innovative solutions under the umbrella of the UK-based parent company by providing exceptional value to our customers and and align its business processes with internation- adhering to the highest ethical standards. GRI Standards compliance table

12 Nobel Oil / Sustainability Report 2019 Nobel Oil / Sustainability Report 2019 13 Asset structure Creating business value Report and reporting process Service industry About - Ser OIL NOBEL - Ser OIL NOBEL Nobel Oil Group vices UK vices UK vices {ĹŐΣĭêƓ Energy ,śĔƋĭǅͩêśčͩƿêƟĔƋ ťśƓƟƋƧĆƟĹťś

pťąĔŐͩ{ĹŐͩ©ĔƋƾĹĆĔƓ Nobel Oil ltd

Corporate governance NOBEL OIL Ser- - Ser OIL NOBEL vices UK UK vices

Ethics and compliance

NOBEL OIL Ser- - Ser OIL NOBEL

vices UK UK vices Service Approach to sustainable development

Interaction with $ƋĹŐŐĹśĭͩêśčͩřêśêĭĔřĔśƟ ťśƓƟƋƧĆƟĹťś ©ƧƈƈŐǅͩêśčͩŐťĭĹƓƟĹĆƓ stakeholders We provide a variety of services in- :HRɤHUFRQVWUXFWLRQDQGPDQ- We provide our customers with volving drilling and comprehensive agement services specializing a broad range of materials and well management. This includes in the design and installation of equipment for drilling, design, drilling, design and planning of RɤVKRUHJDVLQMHFWLRQIDFLOLWLHVDQG maintenance and production oper- Labor - - Ser Ser OIL OIL NOBEL NOBEL horizontal, multi-bore and deviated SRZHUSODQWVRQVKRUHDQGRɤ- ations with the goal of optimizing relations vices UK UK vices vices boreholes, well completion, over- VKRUHRLODQGJDVUHɢQLQJLQVWDOOD- WKHɣRZRIPDWHULDOVDQGHTXLS- LAMOR NBO haul and geo-technical measures in tions, polymer and fertilizer plants. ment from their origin to delivery. wells, drilling of sidetracks, installa- We also provide infrastructure tion of casings. construction services. Health, Safety - Ser OIL NOBEL and Environment WOOD vices UK vices GROUP

AZERBAIJAN Quality management

ƋťčƧĆƟĹťśͩêśčͩĹśƓƟêŐŐêƟĹťś Engineering ƋťŊĔĆƟͩřêśêĭĔřĔśƟͩ :HSURYLGHRQVKRUHDQGRɤVKRUH We provide installation, commis- Our project management expe- Procurement production and installation ser- sioning, operation and mainte- ULHQFHDQGTXDOLɢHGWHDPRɤHU experience Subsidiary Joint venture vices, which include fabrication, in- nance of gas turbines and com- project management services in VWDOODWLRQDQGXSJUDGHRIRɤVKRUH pressors, as well as inspection and engineering, procurement and facilities and pipeline systems, maintenance of rotating and static construction in line with existing high-pressure lines, tanks, reser- equipment. GLENSOL, in coopera- standards to deliver projects on Social voirs and related packages. tion with Suez, provides a variety of time and within budget. support water treatment solutions.

GRI Standards compliance table

14 Nobel Oil / Sustainability Report 2019 Nobel Oil / Sustainability Report 2019 15 Geography Report and reporting process

About Nobel Oil Group

Country name 2ɢVLQDGî • Azerbaijan Branch of Nobel Oil Ltd in the Corporate Republic of Azerbaijan governance

• Gazakhistan Glensol • Russia Prokon • United Arab Llamrei Amirates Ethics and • Turkey SOCAR AQS compliance

Approach to sustainable development Financial performance Interaction with stakeholders Revenue, mln $ 400

350 Labor 300 relations

250

200 Health, 150 Safety and Environment 100

50 Quality 0 management 2017 2018 2019 Group’s new strategy

Nobel Oil Services (UK) Limited and McKinsey & )XWKHUPRUH0F.LQVH\ &RPSDQ\KDYHLGHQWLɢHG Revenue in business, mln $ Company agreed to work together in 2019 to assess SRWHQWLDOO\HɤHFWLYHDUHDVLQZKLFKFRPSDQLHV Procurement 12,7 the goals set and the development strategy to of the Group could work together to enhance the 0,02 experience 11,8 28,6 21,2 achieve them. Reviewing Nobel Group’s development ongoing collaboration. This approach has had a 27,8 0,1 plans, including future investment in infrastruc- positive impact on the environment within the 16,7 ture, McKinsey & Company emphasized that it has company, strengthened the relationships between 62,6 ample opportunities for future development. Also, subsidiaries, and created favorable conditions for Social 15,5 special measures have been proposed to delineate building up and combining the skills of employees support 184,9 341,5 the activities of the Group’s companies in order to across the Group. As a result, McKinsey & Com- avoid overlaps. As a result, since all companies of the pany have evaluated the development prospects ˖˔˕˛ ˖˔˕˜ ˖˔˕˝ Group work solely in the areas of their specialization, of Nobel Oil Group and presented a development ͩťśƓƟƋƧĆƟĹťś Rent ͩ©ĔƋƾĹĆĔ ͩ©êŐĔͩťĬͩĭťťčƓͩêśčͩťƟĴĔƋͩƋĔƾĔśƧĔ GRI Standards they are not in competition with each other. URDGPDSIRUWKHQH[WɢYH\HDUV compliance table

16 Nobel Oil / Sustainability Report 2019 Nobel Oil / Sustainability Report 2019 17 ƋťƾĹčĔƓͩƓĔƋƾĹĆĔƓͩĹśƾťŐƾĹśĭͩ professional team, which allows the opportunity ťƈĔƋêƟĹťśͩêśčͩřêĹśƟĔśêśĆĔͩťĬͩ to improve the serviceability of equipment while Report lowering operating costs. and reporting ĔƊƧĹƈřĔśƟͩĹśͩƟĴĔͩťĹŐͩêśčͩĭêƓ̽ͩĔśĔƋĭǅͩ process êśčͩĴǅčƋťͩƓĔĆƟťƋƓ̼ By applying advanced solutions, Glensol reduc- Glensol was established in 2012 to provide oper- es downtime and ensures long-term viability of ation and maintenance of oil field equipment in technological processes. About Azerbaijan and the Caspian region. Nobel Oil Group In 2019, in line with its Health, Safety and Envi- The company demonstrates a high level of ronment (HSE) standards and in the interests of performance due to its experience and exper- process optimization, efficiency and logistical tise in the fields of operation. Committed to flexibility, the company proposed an innovative Corporate governance an individual approach to customers, personal solution based on the establishment of a new and professional development and exceptional “one-stop” Glensol workshop for the maintenance value to stakeholders, Glensol has earned itself of the customer’s entire mechanical and electri- a reputation as the best-in-class service provid- cal equipment fleet. As a result of the solution, Ethics and er. The company’s services are underpinned by the company is no longer dependent on multiple compliance extensive experience and professionalism of its suppliers.

Approach to sustainable Company portfolio development

Interaction with Maintenance of gas turbine generators and gas turbine compressors stakeholders Maintenance of pumps Maintenance of compressors (centrifugal, valve, piston) Valve maintenance Electrical and instrumentation maintenance (installation and commissioning) Labor relations Maintenance of electric motors, generators and alternators (alternating and direct current, low and high voltage) Chemicals supply (water treatment and technical treatment) Completion of mechanical assembly Health, Asset management solutions Safety Services for Top Drive drilling rigs and Environment Inventory and warehouse management Process control (upgrade of existing systems) Control over equipment (preventive maintenance) Quality management

Procurement experience

Social support

GRI Standards compliance table

18 Nobel Oil / Sustainability Report 2019 Nobel Oil / Sustainability Report 2019 19 Major projects Report and reporting process

High-voltage electric motor overhaul Rig maintance PROJECT DESCRIPTION: Top Drive Services is provided by the company, and it includes a full range of specially equipped About PROJECT DESCRIPTION: DQGFHUWLɢHGSHUVRQQHO Nobel Oil Group The Karachaganak Petroleum Operating 2QVKRUHDQGRɤVKRUHGULOOLQJULJVURXQGWKH CUSTOMER: Company requested that the company repair a clock upstream system services CUSTOMER: Karachaganak 6-megawatt motor. In this regard, the compa- Overhead transmission installation and com- SOCAR PROJECT LOCATION: ny successfully completed a full overhaul of missioning PROJECT LOCATION: Aksay / Kazakhstan WKLVHQJLQH/RFDO($6$([FHUWLɢHGSHUVRQQHO Preventive maintenance and troubleshooting Caspian Sea / Azerbaijan worked 24 hours a day for three weeks. Drilling rig stops After testing at the company’s facility, com- Corporate plete overhaul of the overhead transmission governance in the workshop, including the mechanical, hydraulic and electrical parts of the overhead transmission.

Ethics and Maintenance of gas turbine generator and gas compliance turbine compressor PROJECT DESCRIPTION: The scope of work, according to the contract with the customer, included maintenance and SRVWVDOHVXSSRUWRIRɤVKRUHURWRG\QDPLF Approach CUSTOMER: units of equipment. to sustainable SOCAR Engine and rotor overhaul development PROJECT LOCATION: Field service (24/7) Caspian Sea / Azerbaijn Continuous engineering support (24/7) Problem solving Management of spare parts (minimum / maximum number of goods in stock) Interaction with stakeholders

Valve maintenance Labor relations

PROJECT DESCRIPTION: The scope of work included the following CUSTOMER: items: BP Valve design and valve management PROJECT LOCATION: Health, Repair and maintenance Azerbaijan / Georgia 7HVWLQJDQGFHUWLɢFDWLRQ Safety On-site services and Environment

Quality management

Electrical and instrumentation maintenance PROJECT DESCRIPTION: The scope of work included the following items: Re-equipping vessels / drilling rigs, repair and maintenance Procurement Electrical installation and maintenance experience CUSTOMER: Fire and gas detection systems SOCAR, BP, AZENCO, Electricity generation system WOOD Instrumentation PROJECT LOCATION: CCTV systems Caspian Sea / Azerbaijan Perimeter alarm systems Suspension of repair and maintenance Panel construction Social Commissioning support Mobile laboratories Electrical installations and equipment Hazardous area inslallation

GRI Standards compliance table

20 Nobel Oil / Sustainability Report 2019 Nobel Oil / Sustainability Report 2019 21 PƟͩĹƓͩêͩĆťśƓƟƋƧĆƟĹťśͩêśčͩƈƋťŊĔĆƟͩ its carefully selected professional and techni- řêśêĭĔřĔśƟͩĆťřƈêśǅͩťƈĔƋêƟĹśĭͩ cal staff, but also the judicious and proactive Report and reporting ĹśͩƟĴĔͩťĹŐͩêśčͩĭêƓͩĹśčƧƓƟƋǅͩêśčͩ approach to work. The project team always acts process ĆťśƓƟƋƧĆƟĹťśͩřêƋōĔƟͩĹśͩƟĴĔͩêƓƈĹêśͩ in the interests of the customer and exercises ƋĔĭĹťś̼ control over costs, demonstrating professionalism throughout the project. Prokon, founded in 2012, provides professional About Nobel Oil Group services in construction, engineering, procure- Prokon gains a clear understanding of the cli- ment and integrated management of major ent’s vision and expectations, and approaches projects in the Azerbaijani market. the project from this perspective. The company develops an understanding of the customer’s Corporate Since its inception, it has earned itself the rep- business, budget goals, delivery deadlines governance utation of a company with “experienced staff and decision-making process. To ensure the and proven systems”, which enables it to com- successful implementation of the project, the plete projects with high quality, safely, on time company selects the most appropriate project and within budget. Prokon is proud of its track management techniques for each project, along Ethics and compliance record of high-level customer service, commit- with construction workers and consultants. The ment to work, successful project implementa- company’s management approach and the pres- tion and conscientious employees. ence of qualified construction professionals contribute to the project being delivered safely, Approach on time, within budget and above customer to sustainable The company’s strengths include not only the development quality and depth of knowledge and skills of expectations.

Interaction with Company portfolio stakeholders

Development of project implementation and management strategies Labor relations Preparation of tender documents Evaluation of potential contractors and suppliers Project work and activity management Management and implementation of construction and assembly work Health, Management of Health, Safety and Environment requirements Safety Quality assurance and quality control and Environment Project cost assessment and control .80.)*39.ƙ(&9.43&3)2&3&,*2*39

Quality management

Procurement experience

Social support

GRI Standards compliance table

22 Nobel Oil / Sustainability Report 2019 Nobel Oil / Sustainability Report 2019 23 Major projects Report and reporting process

8SJUDGHDQG5HFRQVWUXFWLRQRI62&$5 V+H\GDU PROJECT DESCRIPTION: COTTON OIL FACTORY PROJECT DESCRIPTION: $OL\HY2LO5HɢQHU\ 3$&.$*($ The company’s scope included: The scope of work, according to the contract Main process y units with the client, included construction, Diesel fuel hydrotreater block mechanical and electrical installation, process About Isomerization / gasoline unit piping and insulation. The following work was Nobel Oil Group Auxiliary equipment completed: CUSTOMER: Sulfur regeneration unit CUSTOMER: 200 t/day production line for primary pro- KINETICS TECHNOLOGY Sour water softening unit ʊ$452/í=í14ʋ$6& cessing of cotton seeds and oil pressing AND TECNIMONT JV Hydrogen unit PROJECT LOCATION: 60 t/day production line for solvent separa- PROJECT LOCATION: Methyl-tert-butyl ether unit. Ujar / Azerbaijan tion for primary pressing Baku / Azerbaijan Utilities 25 t/day cotton oil treatment line Corporate LPG storage Flow generation process Methanol storage governance Cotton seed factory Flare system / incinerator Oil storage tanks Cooling water system Boiler room Substation buildings Pipe connectors

Ethics and compliance

AZERKIMYA–Installation and commissioning of steam SOCIAL PROJECT – SCHOOL IN BINA SETTLEMENT turbine PROJECT DESCRIPTION: The scope of work included: Approach CUSTOMER: Construction of the distribution facility CUSTOMER: PROJECT DESCRIPTION: to sustainable SOCAR Uniper Construction of steam turbine and cooling Social Project supported 7KHVRFLDOSURMHFW VVFRSHLQFOXGHGGHVLJQ development PROJECT LOCATION: buildings by the Heydar Aliyev supply and construction of a 1,400-pupil school, Sumgait / Azerbaijan Equipment and pipeline assembly Foundation a 2-storey kindergarten, an ambulance station Construction around the building and land- PROJECT LOCATION: DQGDSRVWRɥFH scaping Baku, Azerbaijan

Interaction with stakeholders

Overhaul of LukoilNizhnyNovgorod petroleum synthesis SOCIAL PROJECT – KINDERGARTEN IN SHAGAN Labor PROJECT DESCRIPTION: SETTLEMENT relations Mechanical installation works during the CUSTOMER: RYHUKDXORI.VW2YR2LO5HɢQHU\LQ Lukoil NizhnyNovgorod 7KHɢUVWVWRSZDVLQ$SULO0D\352.21 petroleum synthesis CUSTOMER: ABT-6 completed the disassembly and PROJECT LOCATION: Social Project supported PROJECT DESCRIPTION: LQVWDOODWLRQRIɣDUHSLSHVDQGGLHVHOOLQHVLQ Kstovo - Nizhny Novgorod by the Heydar Aliyev 7KHVRFLDOSURMHFW VVFRSHLQFOXGHGGHVLJQ days. The second stop is scheduled for October Health, / Russian Federation Foundation supply, and construction of a two-storey 2020. PROKON has already started planning for Safety PROJECT LOCATION: kindergarten. this stop. Baku, Azerbaijan and Environment

Quality management Multi-storey building

CUSTOMER: PROJECT DESCRIPTION: Procurement RAVY PROPERTY LLC The scope of work included the design and experience PROJECT LOCATION: FRQVWUXFWLRQRIDVWRUH\RɥFHEXLOGLQJZLWK Baku, Azerbaijan a total area of 24,806 square meters.

Social support

GRI Standards compliance table

24 Nobel Oil / Sustainability Report 2019 Nobel Oil / Sustainability Report 2019 25 Nobel Oil / Sustainability Report 2019

Corporate governance

2/4 10 4 2 Independent ©ƧƓƟêĹśêąŐĔͩ pƧřąĔƋͩťĬͩťêƋčͩ Number member of the čĔƾĔŐťƈřĔśƟͩ ťĬͩ$ĹƋĔĆƟťƋƓͩͩ ťĬͩĆťřřĹƟƟĔĔƓ ťêƋčͩťĬͩ$ĹƋĔĆƟťƋƓ čĔĆĹƓĹťśƓ řĔĔƟĹśĭƓͩĹśͩ˖˔˕˝

27 Corperate goverance structure Report and reporting DĔśĔƋêŐͩřĔĔƟĹśĭͩťĬͩƓĴêƋĔĴťŐčĔƋƓ ťêƋčͩťĬͩ$ĹƋĔĆƟťƋƓ CEO ¶ťƈͩřêśêĭĔƋƓ process

About Nobel Oil Group

Corporate governance

Ethics and K©,ͩĆťřřĹƟƟĔĔ ,ƟĴĹĆƓͩêśčͩťřƈŐĹêśĆĔͩ compliance Committee

Approach to sustainable General meeting of shareholders development

Interaction with stakeholders

Labor relations Corporate governance system Health, We are well aware that the reputation of an hon- dards and internal documents, industry standards Safety est and conscientious partner is of great impor- and codes, as well as local and international best and Environment tance for the sustainable development of the practices. business. For this reason, we have put in place an

optimal corporate governance system that allows With our work, we shape up the interests of those Quality us the opportunity to gain and maintain the trust ZKRKDYHH[WHQVLYHVSKHUHVRILQɣXHQFH)RUWKLV management of our stakeholders. reason, we believe that adherence to the best corporate governance principles in our interaction :HUHFRJQL]HWKDWDQHɤHFWLYHFRUSRUDWHJRY- with stakeholders is critical not only for our own ernance system contributes to the company’s success, but also for the success of all our stake- Procurement experience investment attractiveness and, as a result, shareholders. KROGHUYDOXH0XWXDOFRQɢGHQFHDPRQJDOOFRUSR- The General Meeting of Shareholders of Nobel Participation in General Meetings of Shareholders rate players is the cornerstone of the company’s Our corporate governance structure enables us Oil Closed Joint-Stock Company is the company’s LVWKHSULPDU\PHFKDQLVPRIVKDUHKROGHULQɣXHQFH HɤHFWLYHDFWLYLW\DQGLQYHVWPHQWDWWUDFWLYHQHVV WRPDQDJHRXUDFWLYLWLHVHɤHFWLYHO\1REHO2LOʈV highest governing body which decides on the on the decision-making process. The procedure for Social governing bodies are the General Meeting of most important issues. The meeting approves the holding General Meetings of Shareholders provides support Nobel Oil continuously works to improve its Shareholders, the Board of Directors and the Chief Charter and internal documents governing the ac- for equal opportunities to all shareholders. In our corporate governance system to achieve sus- ([HFXWLYH2ɥFHUZKRLPSOHPHQWVWKHGHFLVLRQV tivities of the company’s management and control interaction with shareholders, our primary goal is to WDLQDEOHbEXVLQHVVGHYHORSPHQWZKLFKLVZK\WKH of the Board of Directors and the General Meeting bodies, and makes decisions to approve annual create favorable conditions for a simple, transparent, company acts in accordance with national stan- of Shareholders. UHSRUWVDQGɢQDQFLDOVWDWHPHQWV DQGHɥFLHQWGHFLVLRQPDNLQJSURFHVV GRI Standards compliance table

28 Nobel Oil / Sustainability Report 2019 Nobel Oil / Sustainability Report 2019 29 Board of Directors Board of Directors committees Report and reporting process ¶ĴĔͩťêƋčͩťĬͩ$ĹƋĔĆƟťƋƓͩêĆƟƓͩĹśͩƟĴĔͩ Members of the Board of Directors are elected by 7RLQFUHDVHWKHHɤHFWLYHQHVVRIWKH%RDUGʈVGHFL- year, the Board of Directors receives a report on ĹśƟĔƋĔƓƟƓͩťĬͩƟĴĔͩĆťřƈêśǅͩêśčͩĹƟƓͩ shareholders at the General Meeting. The Board sions, provide a comprehensive review of the most the state of the management system and its per- important issues and develop relevant recommen- formance, as well as the measures taken to improve ƓĴêƋĔĴťŐčĔƋƓͩêśčͩƋĔƈťƋƟƓͩƟťͩƟĴĔͩ consists of two non-executive and one executive About DĔśĔƋêŐͩnĔĔƟĹśĭͩťĬͩ©ĴêƋĔĴťŐčĔƋƓ̼ͩ member. dations, the Board of Directors had two committees WKHTXDOLW\DQGHɥFLHQF\RIPDQDJHPHQW Nobel Oil Group at the end of 2019: the Health, Safety and Environ- ment (HSE) committee and the Ethics and Compli- In order to perform their functions, committees Except for matters within the competence of the The Board of Directors is made up in such a way as ance committee. have the authority to request any information or General Meeting of Shareholders, the Board of Di- to represent fundamental competencies required in documents from the company’s executive body Corporate rectors oversees all aspects of Nobel Oil’s activities. day-to-day operations. Members of the Board can The committees play an important role in main- or heads of its structural units. Both committees governance It plays the primary role in shaping and advancing make informed decisions due to their knowledge and taining a high standard of corporate governance by may also attract foreign experts and consultants the corporate governance system, determining the extensive experience in strategic and corporate gov- conducting an initial review of various issues, per- possessing the necessary knowledge and skills company’s priorities, strategic planning, control HUQDQFHSURGXFWLRQDQGɢQDQFLDOLVVXHVULVNPDQDJH- forming a thorough analysis and preparing relevant to objectively assess issues within their compe- over business management, and is responsible for ment and HSE. These are required criteria in selecting Ethics and recommendations for the Board of Directors. Every tence. informing shareholders about the way these issues members of the Board of Directors. compliance are managed. National legislation, the company’s Charter and Regulations of the Board of Directors Board members meet with the company’s senior govern the Board’s activities. management on a regular basis to learn about and Committee on Health, Safety and Environment (HSE) Approach understand their activities, development strategies to sustainable The Committee on Health, Safety and Environ- and key risks. Additionally, members of the Board of development ment (HSE) plays an important role in improving Directors hold formal and informal meetings with the management system and increasing the ¶ĴĔͩťřřĹƟƟĔĔͩĆťśƓĹƓƟƓͩťĬͩǛƾĔͩ medium-level managers on a regular basis to discuss HɥFLHQF\RI1REHO2LO*URXS7KH&RPPLWWHH ƾťƟĹśĭͩřĔřąĔƋƓͩêśčͩťśĔͩśťś͒ various issues and share information, which enables supports the governance system by operating in ƾťƟĹśĭͩřĔřąĔƋ̼ Interaction with them to make informed and timely decisions. Meet- stakeholders full accordance with legislation and the highest ings of the Board of Directors are held at least four standards of corporate governance, and oversees 6758&785($1'0(0%(56+,3 times a year. The meeting agenda is developed by the the implementation of the company’s HSE strate- The Committee consists of the following chairman of the Board of Directors on the basis of the gy and goals. members: request to convene the meeting. Labor HSE team leader, chairman and secretary relations &KLHI([HFXWLYH2ɥFHUPHPEHU This governing body conducts regular high-level In 2019, the Board of Directors of Nobel Oil made a &KLHI2SHUDWLQJ2ɥFHUPHPEHU HSE reviews and supports production and en- number of critical decisions to further advance the &KLHI&RPPHUFLDO2ɥFHUPHPEHU vironmental safety issues as a top priority for FRPSDQ\LQWKHɢHOGRIVXVWDLQDEOHGHYHORSPHQW General Director for Drilling, member Health, WKHFRPSDQ\1REHO2LOLVLPSOHPHQWLQJbSODQVWR Project director, member Safety and Environment FRQWLQXRXVO\LPSURYHWKHFRPSDQ\ʈVHɥFLHQF\ GLENSOL General Director / Deputy General in this area and ensure that HSE risks are prop- Director, member HUO\PDQDJHG7KH+6(&RPPLWWHHUHYLHZVbSUR- PROKON General Director / Deputy General ,VVXHVUHYLHZHGDQGGHFLVLRQVPDGHE\WKH%RDUGRI'LUHFWRUVLQWKHɢHOGRIVXVWDLQDEOHGHYHO- duction-related materials and reports on earlier Director, member RSPHQWLQ Quality SDL NOBEL General Director, member management Following a thorough review and analysis of the company’s strategy, the decision was made to performance in this area. OGP General Director, member continue cooperation with McKinsey; Decision was made to continue the application of SAP (System Application and Products) mod- ules to the company’s business processes; Continue the promotion of company values; Procurement experience A new SoD (Segregation of Duties) procedure for Nobel Oil, Prokon and Glensol was reviewed and .H\WRSLFVH[DPLQHGE\WKH&RPPLWWHHLQWKHɢHOGRIVXVWDLQDEOHGHYHORSPHQWLQ DSSURYHGLQDQHɤRUWWRLPSURYHLQWHUQDOFRQWUROV Nobel Oil Group’s HSE standards approved and adopted across the Group. “Commercial Review Procedure” was reviewed and approved; Develop an Activity Tracking System (ATS) for Prokon; ,QLWLDWLYHVIRUVWDɤWUDLQLQJDQGGHYHORSPHQWZHUHFRQVLGHUHGWRFUHDWHORQJWHUPRSSRUWXQLWLHV 'HɢQHDQ+6(0DQDJHPHQWRI&KDQJHSURWRFROIRUWKH*URXS Develop an incident reporting and investigation protocol; Social %\LGHQWLI\LQJVWUDWHJLFHPSOR\PHQWWKHFRUSRUDWHRɥFHʈVFDSDELOLWLHVZHUHDQDO\]HGLQWHUPVRI support their relevance to the company’s growing business; Develop a risk assessment protocol; Decision was made to improve the customer satisfaction feedback system; Develop an HSE assessment and audit program for the Group; 'HFLVLRQZDVPDGHWRIXOO\DSSO\,62DQG$%06FHUWLɢFDWLRQ Develop a general audit plan and apply it across the Group; Develop a register of the Group’s HSE legal and other requirements. New investment opportunities were considered and evaluated. GRI Standards compliance table

30 Nobel Oil / Sustainability Report 2019 Nobel Oil / Sustainability Report 2019 31 Ethics and Compliance Risk management Report and reporting Committee process

The Committee plays an important role by helping About the Board of Directors oversee ethical conduct and ¶ĴĔͩťřřĹƟƟĔĔͩĆťśƓĹƓƟƓͩťĬͩǛƾĔͩ Nobel Oil Group compliance with regulatory requirements within the ƾťƟĹśĭͩřĔřąĔƋƓͩêśčͩťśĔͩśťś͒ company, and resolve potential problems. One of its ƾťƟĹśĭͩřĔřąĔƋ̼ key responsibilities is to oversee compliance with ethical risks, monitor and mitigate the impact on business. 6758&785($1'0(0%(56+,3 Corporate governance The Committee consists of the following members: To support and promote an ethical culture that Ethics and Compliance specialist, encourages the company to comply with national chairman and secretary

laws and ethical standards, the committee regularly &KLHI([HFXWLYH2ɥFHUPHPEHU Ethics and prepares recommendations for the Board of Directors &KLHI2SHUDWLQJ2ɥFHUPHPEHU compliance UHJDUGLQJVWHSVWRHQKDQFHWKHHɤHFWLYHQHVVRIWKH &KLHI&RPPHUFLDO2ɥFHUPHPEHU governance system. The Committee supports the de- &KLHI)LQDQFLDO2ɥFHUPHPEHU YHORSPHQWDQGLPSOHPHQWDWLRQRIHɤHFWLYHSURJUDPV Group Legal Manager, member Approach on compliance with ethical and legal norms, and maxi- to sustainable PL]HVWKHEHQHɢWVRIVLPLODUSURJUDPVWKDWHWKLFDODQG development law-abiding business practices.

In order to achieve the strategic goals of the For Nobel Oil, risk management is a process that Interaction with .H\WRSLFVH[DPLQHGE\WKH&RPPLWWHHLQWKHɢHOGRIVXVWDLQDEOHGHYHORSPHQWLQ company, our management attaches great impor- lasts for the entire duration of the project. It in- stakeholders Risk assessment plan; tance to risk evaluation, which helps us to identify, FOXGHVULVNPDQDJHPHQWSODQQLQJLGHQWLɢFDWLRQ Disciplinary proceedings and grievance procedure; analyze and prevent potential threats and losses analysis, monitoring and control processes. Many of Review of business proposals and procurement procedures; in good time. Our company views the risk manage- these processes are updated throughout the project Risk prevention plan; ment system as a collection of coordinated ac- because new risks can emerge at any time. The Labor relations Development of an e-learning portal; tions and processes. This applies to the company’s objective of risk management is to prevent and miti- ISO 37001 ABMS (Anti-Bribery Management System): Evaluation of in-house application of the 2016 organizational structure, national legislative and gate the impact of potentially unfavorable events on standard to 2019 and continuous application of the requirements of this standard, as well as prepa- other regulatory acts, documents, norms, stan- the project. At the same time, we try to take advan- ration for a Lloyds Registry audit in 2020. dards and regulations, as well as corporate culture tage of events that may have a positive impact. Health, Safety norms and actions implemented by the company’s and Environment management and employees to provide adequate 7RHQKDQFHWKHHɥFLHQF\RIWKHULVNPDQDJHPHQW guarantees for the achievement of the company’s system, two new procedures were developed goals and resolution of problems. All this aims to and approved in 2019: the HSE Risk Assessment support the management and employees in mak- Protocol and the Anti-Bribery and Corruption Risk Quality management CEO ing important decisions. Prevention Plan.

The CEO runs the company’s operations and acts within the powers provided by the Nobel Oil Procurement experience Charter. HSE Risk Assessment Protocol The CEO implements the tasks set by the Board of Directors and executes the company’s devel- A Risk Assessment Protocol was developed and The Protocol describes the approach Nobel Oil Group Social opment strategy by overseeing departments in support such areas of activity as production and environ- approved for all directions of the company’s ac- is taking to meet the high quality standards required ment, finance and economics, social and legal. WLYLW\LQWRFUHDWHDXQLɢHGULVNPDQDJHPHQW by the business. The purpose of the Protocol is to iden- V\VWHPLQWKHɢHOGRI+HDOWK6DIHW\DQG(QYLURQ- tify a consistent method of risk assessment within the ment (HSE). Group and provide a guarantee that the company. GRI Standards compliance table

32 Nobel Oil / Sustainability Report 2019 Nobel Oil / Sustainability Report 2019 33 Objectives of the HSE risk management system Internal Report and reporting process $ĔƾĔŐťƈƓͩêśčͩřêĹśƟêĹśƓͩ control nĔĔƟƓͩͩƟĴĔͩDƋťƧƈͩ͞ƓͩKĔêŐƟĴ̽ͩ ƋťƟĔĆƟƓͩͩĔřƈŐťǅĔĔƓ̽ͩƟĴĔͩ ƋĹƓōͩƋĔĭĹƓƟĔƋƓͩĬťƋͩĹƟƓͩ ©êĬĔƟǅͩêśčͩ,śƾĹƋťśřĔśƟͩ DƋťƧƈ̽ͩĆƧƓƟťřĔƋƓͩêśčͩͩƟĴĔͩ ąƧƓĹśĔƓƓĔƓͩƟťͩƓƧƈƈťƋƟͩêͩ Our company has designed a SOD procedure to ͌K©,͍ͩƓƟêśčêƋčƓ̼ ƈƧąŐĹĆͩĬƋťřͩƋĹƓōƓ ąƋťêčĔƋͩƋĹƓō͒ƋĔčƧĆƟĹťśͩ About êƈƈƋťêĆĴ enhance the effectiveness of internal controls, Nobel Oil Group enable the functional division of responsibilities between business process participants and provide an overarching instrument that would According to the Protocol, a risk assessment must to partnership agreements and/or joint ventures. If define the functions, roles and basis of interac- Corporate be completed for any job being undertaken by No- DFOLHQWVXEPLWVDVSHFLɢFULVNDVVHVVPHQWSURFH- tion between different players. This procedure is governance bel Oil or any subsidiary acting on its behalf at the dure and forms to be applied at a facility, they may aligned with the company’s existing regulations work site or beyond. In the absence of an agreed or be used if a relevant manager ensures that these and has been agreed with senior discipline man- a more stringent procedure, the protocol will apply forms are consistent with the company’s protocol. agers. Ethics and compliance The primary goal of the SOD procedure is to exercise effective internal control over the business, which provides significant benefits to Approach the company by minimizing the risk of error and to sustainable fraud. This document establishes a sequence of development actions each individual must follow to move the business in the right direction. Additionally, the Bribery and corruption risk document provides a thorough understanding of Interaction with business processes, establishes corporate and stakeholders prevention plan individual responsibilities and improves the efficiency of business processes. {ƧƋͩĹśƟĔƋśêŐͩĆťśƟƋťŐͩƈƋťĆĔčƧƋĔƓͩ Another significant milestone in 2019 was the We realize that modern competition necessi- êƋĔͩčĔƓĹĭśĔčͩƟťͩƈƋťƾĹčĔͩêͩśƧřąĔƋͩ Labor development and approval of a bribery and relations tates the use of automated internal controls. For ťĬͩêčƾêśƟêĭĔƓ̽ͩĹśĆŐƧčĹśĭ̾ͩ corruption “Risk Prevention Plan” for the entire this reason, we are expanding the automation Nobel Oil Group. of our internal procedures, including reporting ɢQDQFLDOVWDELOLW\JUHDWHUYDOXHDQGSURɢW- and monitoring practices, in order to enhance he ability; Health, The plan mainly deals with measures to be taken Safety efficiency of management. To do that, Nobel Oil HɤHFWLYHULVNPDQDJHPHQWLQEXVLQHVVSUR- to reduce the risk of bribery and corruption and Environment continues the application of SAP software mod- cesses; within the company. The goal of the plan is to ules, which enable us to fully automate reporting GLVFLSOLQHGDQGHɤHFWLYHHFRQRPLFDFWLYLW\ identify potential issues and provide specific and management processes by utilizing the most asset integrity; examples of corruption risk mitigation actions. efficient business tools. detection and prevention of irregularities; Quality In addition, the plan is intended to document management compliance with applicable laws and regula- the processes, tools and procedures to be put in Nobel Oil and its subsidiaries are applying com- tions; place to manage and monitor events that may puterized management methods for a variety WLPHO\SUHSDUDWLRQRIDFFXUDWHɢQDQFLDO have a negative impact on the company’s proj- of operational functions, including account- statements and the resulting investment ects. Procurement ability, project management, human resource attractiveness. experience management, salary calculation and cash flow, The principles contained in the plan are applica- commercial supply and procurement processes, ble to the reduction of the bribery and corrup- and controls. Furthermore, the SOD procedure is to implement all bidding processes using SAP, tion risk in the company and consistent with the integrated into the SAP and OpenText operating create an SRM system for customers, and install Social international ISO 37001 ABMS (Anti-Bribery Man- systems for disciplines such as finance, procure- and configure an advanced warehouse manage- support agement System): 2016 standard and other com- ment, human resources, law and commercial law. ment and procurement module for Glensol and pany policies. The bribery risk reduction form PROKON by 2020. A SOD committee will be set has been designed primarily to mitigate and plan In order to improve transparency and efficiency up in 2020 to strengthen the internal control the risk of unforeseen bribery and corruption. GRI Standards of internal controls and management, we intend mechanism. compliance table

34 Nobel Oil / Sustainability Report 2019 Nobel Oil / Sustainability Report 2019 35 Nobel Oil / Sustainability Report 2019

Ethics and compliance

4 100% 100% $ĔĆĹƓĹťśƓͩťśͩĔƟĴĹĆƓͩ ,řƈŐťǅĔĔƓͩƟƋêĹśĔčͩ ,řƈŐťǅĔĔƓͩƟƋêĹśĔčͩ êśčͩĆťřƈŐĹêśĆĔ ĹśͩąƧƓĹśĔƓƓͩĔƟĴĹĆƓͩêśčͩ ĹśͩêśƟĹ͒ĆťƋƋƧƈƟĹťśͩ ƋƧŐĔƓͩťĬͩĆťśčƧĆƟ ƈťŐĹĆĹĔƓ

37 best global practices in the rules of business ethics of Directors (including subcontractors or those pro- Compliance with antitrust DQGFRQGXFW7KHVHGRFXPHQWVUHɣHFWWKHFRPSDQ\ʈV viding permanent or temporary work on a voluntary Report and reporting RɥFLDOSRVLWLRQLQUHODWLRQWRWKHUXOHVRIFRQGXFWDQG basis). The principles and requirements of the rules process and competition rules interaction with both internal and external partners. also apply to contractors, consultants and suppliers entering into an agreement with the company on the 7KHUXOHVRIEXVLQHVVHWKLFVDQGFRQGXFWGHɢQH supply of goods and services. We comply with the requirements of local and inter- Our code requires that no employee or agent of KRZHPSOR\HHVVKRXOGDFWLQWKHHYHQWRIDFRQɣLFW About Nobel Oil Group national law in the countries in which we operate. If the company be engaged in any arrangements, of interest, establish zero tolerance of corruption, The rules of business ethics and conduct also apply there is a discrepancy between our rules of conduct agreements, contracts, plans or projects with envisage equal opportunities for all employees, pro- to all joint ventures in which our company or any of and national laws, we give preference to the latter. competition regarding prices, sales or service hibit discrimination, and establish a mechanism for its subsidiaries may own a controlling stake or be the terms; not discuss the value of sales and services monitoring the enforcement of corporate ethnical operator of. We also seek to ensure that the principles Corporate We believe that, regardless of the position, every with competition or exchange any information standards. and requirements of the rules of business ethics and governance single employee of the company doing business WKDWPD\DɤHFWFRPSHWLWLRQDQGHQJDJHLQDQ\ FRQGXFWDUHUHɣHFWHGLQWKHSROLFLHVDQGSUDFWLFHVRI or implementing a project in the country is re- activity that runs counter to antitrust law. The rules of business ethics and conduct apply to all the joint ventures in which our company or any of its sponsible for observing the requirements of that company personnel, including members of the Board subsidiaries does not have a controlling interest. country’s legislation. Every Nobel Oil employee is We have put in place relevant regulatory and Ethics and compliance required to follow antitrust and competition laws, technical documents and implemented antitrust which protect competition by prohibiting an- measures in all our organizations. ti-competition practices. We increase our employee awareness of antitrust Approach Our code of business ethics and conduct estab- regulations by organizing seminars and round Anti-corruption to sustainable development lishes fundamental principles of competitive tables on the subject, develop and continuously activities in the markets in which we operate and update comprehensive measures to prevent anti- We believe that corruption poses a threat to the Our anti-corruption policy specifies the main an- rules of conduct for employees to follow to com- trust violations. UXOHRIODZUHGXFHVWKHHɤHFWLYHQHVVRIJRYHU- ti-corruption and prevention measures. This pol- ply with antitrust laws. nance, creates an unfavorable environment for icy reflects the commitment of our company, the Interaction with LQYHVWPHQWGHFLVLRQVDQGUHVXOWVLQLQHɥFLHQWXVH Board of Directors and all employees to working stakeholders RIEXGJHWIXQGVDQGɢQDQFLDOUHVRXUFHV:LWKWKLV in accordance with the highest ethical standards, in mind, we have developed an internal regulatory applying the best practices and corporate gov- framework for combating corruption and bribery ernance standards and maintaining the highest Labor in accordance with the requirements of interna- level of our business reputation. relations Rules of business ethics tional law, as well as anti-corruption recommendations of local and international organizations. The principle of rejection of corruption mentioned in our anti-corruption policy is evidence and conduct that every employee of our company, including Health, pťąĔŐͩ{ĹŐͩĴêƓͩêŐƿêǅƓͩōĔƈƟͩĹƓƓƧĔƓͩ Safety ƋĔŐêƟĔčͩƟťͩƟĴĔͩƈƋĔƾĔśƟĹťśͩťĬͩ senior executives, is strictly prohibited from par- and Environment ĆťƋƋƧƈƟĹťśͩĹśͩĹƟƓͩƓƈťƟŐĹĭĴƟ̼ͩPśͩťƋčĔƋͩƟťͩ ticipating in corrupt practices in Azerbaijan or ĆƋĔêƟĔͩêśͩĔĬĬĔĆƟĹƾĔͩêśƟĹ͒ĆťƋƋƧƈƟĹťśͩ any other country in which we operate. This poli- ƓǅƓƟĔř̽ͩƿĔͩĴêƾĔͩčĔƾĔŐťƈĔčͩêśƟĹ͒ cy prohibits our employees, as well as individuals Quality ĆťƋƋƧƈƟĹťśͩĭƧĹčĔŐĹśĔƓͩąêƓĔčͩťśͩƟĴĔͩ or companies acting on behalf of our subsidiar- management ĬťŐŐťƿĹśĭͩŐĔĭêŐͩêĆƟƓͩêśčͩĹśƟĔƋśêŐͩ ies, from offering, giving, demanding or receiving čťĆƧřĔśƟƓ̾ͩ bribes in any form. We encourage all our employees to comply with this policy and inform them • Anti-Bribery Act in the United Kingdom, 2010 about the main principles, requirements and Procurement experience • Corruption Abroad Act of the United States of potential penalties for noncompliance. America, 1977 • 1997 Convention against the Capture of For- As part of our efforts to improve the anti-corruption system, we have implemented proce- We realize the important role an honest and consci- We view compliance with these requirements as a eign Officials in the Implementation of Inter- Social entious business partner plays in establishing and FRUQHUVWRQHRIRXUDFWLYLWLHVLQWKHɢHOGRIVXVWDLQ- national Commercial Agreements dures to prevent, detect, report and investigate support PDLQWDLQLQJWUXVWDQGFRQɢGHQFH,QWKHLQWHUHVWV able development. • United Nations Convention against Corruption, cases of actual or alleged bribery and corruption of maintaining a good level of interaction with our 2003 in accordance with the international standard stakeholders, we build our business in full accordance We have designed our corporate documents in ac- • International standard ISO ABMS 37001: 2016 ISO 37001: 2016 “Anti-Bribery System”. with law and on the basis of ethical values. cordance with UK and Azerbaijani laws, as well as the • ISO 19011 Audit Management Systems Manual GRI Standards compliance table

38 Nobel Oil / Sustainability Report 2019 Nobel Oil / Sustainability Report 2019 39 Company's anti-corruption goals According to the company’s rules of business of business ethics and conduct and the anti-cor- ethics and conduct, as well as our anti-corrup- ruption policy. Report and reporting tion policy, one of the important measures taken process to prevent corruption is to correctly determine In addition, our company follows a number of ,śƓƧƋĔͩƟĴêƟͩƟĴĹƓͩƈťŐĹĆǅͩĹƓͩĆŐĔêƋŐǅͩêśčͩ nĹśĹřĹǏĔͩƟĴĔͩƋĹƓōͩťĬͩƟĴĔͩĆťřƈêśǅͩ ĬƧŐŐǅͩƧśčĔƋƓƟťťčͩąǅͩƟĴĔͩťêƋčͩťĬͩ the attitude towards gifts being offered, pre- procedures in accordance with the provision of êśčͩřĔřąĔƋƓͩťĬͩƟĴĔͩťêƋčͩťĬͩ $ĹƋĔĆƟťƋƓ̽ͩĔřƈŐťǅĔĔƓ̽ͩƓĴêƋĔĴťŐčĔƋƓ̽ͩ sented or accepted. If a gift is viewed as a bribe, the ISO 37001: 2016 “Anti-bribery system” stan- $ĹƋĔĆƟťƋƓͩĭĔƟƟĹśĭͩĹśƾťŐƾĔčͩĹśͩ ĹśƾĔƓƟřĔśƟͩĆťřřƧśĹƟǅ̽ͩĆťśƟƋêĆƟťƋƓ̽ͩ the acceptance of such a gift, as well as an invi- dard related to gifts. We develop these proce- About Nobel Oil Group ĆťƋƋƧƈƟͩƈƋêĆƟĹĆĔƓ̼ ƓĔśĹťƋͩřêśêĭĔƋƓͩêśčͩťƟĴĔƋͩ tation to dinner, donation or similar benefits, are dures with a view to such factors as the maxi- ƓƟêōĔĴťŐčĔƋƓ̼ prohibited. mum value of a gift or dinner, the frequency of such occurrences, timing, logic, identity of the We discourage our employees from accepting recipient, reciprocity and the regulatory envi- Corporate gifts or rewards that could influence their im- ronment. governance partiality, decisions or conduct, and from offering such gifts and rewards to other companies We ensure that accepting and presenting gifts or individuals. We encourage our employees to does not run counter to the company’s anti-cor- ,śƓƧƋĔͩƟĴêƟͩƟĴĔͩťêƋčͩťĬͩ$ĹƋĔĆƟťƋƓͩêśčͩ PśĬťƋřͩêśčͩĔǄƈŐêĹśͩƟĴĔͩĬƧśčêřĔśƟêŐͩ inform the company’s ethics and compliance ruption policy, ethical principles and require- Ethics and ĔřƈŐťǅĔĔƓͩêƋĔͩĹśĬťƋřĔčͩêąťƧƟͩƟĴĔͩƈƋĹś- compliance ƋĔƊƧĹƋĔřĔśƟƓͩťĬͩƟĴĔͩ½bͩêśƟĹ͒ officer when a gift offered to them does not ments, rules of conduct, as well as other regula- ĆĹƈŐĔƓͩêśčͩƋĔƊƧĹƋĔřĔśƟƓͩťĬͩƟĴĹƓͩƈťŐĹĆǅ̽ͩ ĆťƋƋƧƈƟĹťśͩŐĔĭĹƓŐêƟĹťśͩêśčͩêśǅͩŐťĆêŐͩ meet the criteria set out in the company’s rules tions or applicable laws. êśƟĹ͒ąƋĹąĔƋǅͩƈƋťĆĔčƧƋĔƓͩêśčͩêƈƈŐĹĆêąŐĔͩ êśƟĹ͒ąƋĹąĔƋǅͩŐêƿƓͩƟĴêƟͩřêǅͩêƈƈŐǅͩƟťͩ êśƟĹ͒ąƋĹąĔƋǅͩŐĔĭĹƓŐêƟĹťśͩêśčͩƧśčĔƋƟêōĔͩƟťͩ ƟĴĔͩĆťřƈêśǅ̼ ĆťřƈŐǅͩƿĹƟĴͩƟĴĔř̼ Approach to sustainable development

We conduct regular monitoring to ensure that the In addition, the company’s Board of Directors con- Corruption risk procedures described in the anti-corruption standards tinuously monitors this area, reviews the compa- DUHHɤHFWLYH:KHQPRQLWRULQJUHYHDOVDUHDVWKDW ny’s anti-corruption policy on a regular basis and, Given the breadth of Nobel Oil’s operations, we lihood of an incident; 2) Implement a series of Interaction with stakeholders QHHGWREHPRGLɢHGRULPSURYHGZHLQYHVWLJDWHWKHP if necessary, makes appropriate adjustments and monitor each business process in order to elim- precautionary measures to prevent an incident thoroughly and take the appropriate action. updates. inate and reduce the risk of corruption. To this from happening in an unexpected situation or end, we conduct special monitoring every year to develop a plan to eliminate the consequences of identify potential corruption risks in all main and an incident. Labor secondary business processes of the company. We believe that it is important to assess the po- relations Presentation and acceptance By detecting and updating corruption risk indi- tential impact of risks before making a decision cators typical of our operations and potential to implement an emergency response plan. business processes, we provide regular evalua- of gifts Health, tion of the corruption risk. Another important step the company has tak- Safety en in the fight against corruption is to make and Environment To develop risk assessment recommendations, reasonable effort to reduce the risk of doing the company refers to Transparency Interna- business with any party with a track record

tional’s “Corruption Risk Diagnostics - Guide to of corruption. To do this, we seriously assess Quality Effective Corruption Risk Assessment”, as well as the degree of a partner’s tolerance of bribery, management the Risk Reduction Plan developed in accordance including whether it has its own anti-bribery with the international standard ISO 37001 ABMS: policies and procedures and whether it is ready 2016 Anti-Bribery Management System. to comply with them. Furthermore, the company includes anti-bribery provisions in its contracts Procurement experience In approaching the risk reduction process, we with other parties, thus contributing to overall focus on two key aspects: 1) Reducing the like- business integrity.

Social support

GRI Standards compliance table

40 Nobel Oil / Sustainability Report 2019 Nobel Oil / Sustainability Report 2019 41 Nobel Oil pays special attention to the development We make sure that our stakeholders are aware of Trainings RIDQHɤHFWLYHPHWKRGRIUHSRUWLQJDOOHJHGRUDFWXDO the information channels for reporting violations Report and reporting violations in order to prevent illegal actions, minimize of our code. The company has a business ethics process We believe that anti-corruption awareness and train- FRQGXFWFRQɢGHQWLDOLW\DQGVLPLODULVVXHVIURPWKH the risk of corruption and fraud, and eliminate other hotline anyone can use to report an abuse. Ethical ing are a critical component of corruption prevention. RɥFHUUHVSRQVLEOHIRUWKHRUJDQL]DWLRQDQGFRPSOL- forms of unlawful conduct. In particular, the company and compliance issues can be reported by email All Nobel Oil Group employees are regularly trained ance with ethical and regulatory requirements. has implemented the “Reporting a concern” procedure QER#QREHORLOFRP on the rules of ethical conduct and encouraged to in accordance with best UK practices of corporate $OWHUQDWHO\WKHHWKLFVDQGFRPSOLDQFHRɥFHUFDQ About Nobel Oil Group avoid illegal actions. The company regularly imple- Every year, all Nobel Oil Group employees, as well as governance. The goal of this procedure is to furnish be reached at . ments special training programs aimed at preventing newly-hired employees, attend ethics and compliance employees with a methodology for reporting actual corruption. Such trainings are provided both to our trainings and sign a written statement afterwards. or suspected cases of bribery, corruption or unlawful 2XUHWKLFVDQGFRPSOLDQFHRɥFHULVUHVSRQVLEOH own employees and contractors. To properly under- This training will largely be provided online in 2020. conduct and support them in implementing the “report for investigating alleged violations of the Code of Corporate stand the culture of bribery, new hires are familiarized Also, the risk-oriented approach will help identify tar- a violation” and “growing concern” principles. Business Ethics and Conduct, preparing reports governance with anti-bribery provisions during their foundation get groups that are more likely to violate ethical and and submitting them to the CEO. training program. Special training programs aimed at compliance requirements. As a responsible company, we require our employees SUHYHQWLQJEULEHU\DUHUHJXODUO\XSGDWHGWRUHɣHFW to report a number of situations. These include actual We guarantee that those seeking advice on busi- changes in the law. or potential violations, potentially unlawful conduct, ness ethics or rules of conduct, expressing their Ethics and compliance actual or potential cases of corruption or fraud, illegal concern or reporting an actual or suspected viola- In addition to the training programs, any employee DFTXLVLWLRQGLVFORVXUHRUPLVXVHRIFRQɢGHQWLDORU tion will not be subjected to any reprisals. may seek advice on anti-corruption policy, ethical SULYDWHLQIRUPDWLRQDQGRWKHURɤHQFHV Approach to sustainable development Reporting and communication Prevention of conflict Interaction with of interest stakeholders

We always pay attention to avoiding a potential ,IWKHSHUVRQDOLQWHUHVWVRI1REHO2LO VPDQDJHUV conflict of interest between members of the DQGRWKHUHPSOR\HHVHQWHULQWRFRQɣLFWZLWK Labor relations governing and executive bodies and strive to those of the company, they must report that minimize the consequences of such a conflict. immediately. Employees cannot have any The company recognizes and respects the SURSULHWDU\RUɢQDQFLDOLQWHUHVWLQFRPSDQLHV GLYHUVLW\DQGLPSRUWDQFHRILWVHPSOR\HHV working with Nobel Oil or participate in decision- Health, Safety private goals and interests. However, we cannot making on transactions in which they have and Environment remain indifferent to situations in which a personal interest. We strongly advise and the employee’s loyalty and objectivity to the encourage all employees to avoid situations in company may be compromised due to personal, which the acceptance of gifts, services or other family and other circumstances. Employees EHQHɢWVFRXOGUHVXOWLQDFRQɣLFWRILQWHUHVW Quality management DUHUHTXLUHGWRYLHZWKHFRPSDQ\ VEXVLQHVV interests as a priority, declare any conflict of To effectively manage the risk of a conflict of interest and avoid situations that may appear to interest, we have implemented the practice

create a conflict of interest, as this may reduce of certain senior executives disclosing Procurement employee effectiveness. For this reason, we information about a conflict of interest by experience take steps to avoid such conflicts. filling out a conflict of interest declaration.

Social support

GRI Standards compliance table

42 Nobel Oil / Sustainability Report 2019 Nobel Oil / Sustainability Report 2019 43 Report Human Information transparency and reporting rights process

We guarantee equal rights and nondiscrimination About based on nationality, gender, origin, age, religion, etc., Nobel Oil Group as well as the right of employees to communicate with any public organization of their choice.

Corporate The company complies fully with the Labor Code governance and overall legislation which prohibits any form of discrimination, as well as restrictions of labor rights and freedoms. As a responsible employer, we follow all legal requirements and employ the best practices Ethics and from around the world. compliance

1REHO2LOʈVKXPDQULJKWVSULQFLSOHVDUHUHɣHFWHGLQ stakeholders to prevent any possible human rights key business documents such as the rules of busi- abuses. Approach ness ethics and of conduct, anti-corruption policy, to sustainable development and the Health, Safety and Environment (HSE) policy. 7KHFRPSDQ\ʈVSURFHGXUHIRUɢOLQJDQGUHYLHZLQJ complaints and grievances allows us the opportu- We guarantee that our employees know their rights. nity to inform our employees and external stake- We are responsible for ensuring that stakeholders written public statements or comments for the We increase their knowledge through regular meet- Interaction with holders about any problems or suspicions related to have access to accurate information in order to make media. ings and communication. We build relationships with stakeholders human rights violations. sound decisions. Nobel Oil strives to comply with all legal requirements in order to follow the best interna- ,QDGGLWLRQWKHFRPSDQ\XVHVLWVRɥFLDOZHEVLWH WLRQDOSUDFWLFHVLQWKLVɢHOG (http://www.nobeloil.com) and social media network (Twitter, Facebook, LinkedIn ) to provide the public Labor Discrimination Our Rules of business ethics and conduct provides with objective information about its operations and relations the foundation for information transparency and maintain sound communication with stakeholders. We allow our employees to fully and properly exercise ensures that the company’s oral and written com- Press releases about the company’s production,

their personal rights and provide them with a non-dis- munications with stakeholders are lawful, accu- ɢQDQFLDODQGQRQɢQDQFLDOSHUIRUPDQFHDVZHOODV Health, criminatory, safe and healthy work environment. The rate and professional. Access to information and UHSRUWVRQVXVWDLQDELOLW\DQGɢQDQFLDOVWDWHPHQWV Safety company takes the necessary steps to support em- ɢQDQFLDOWUDQVSDUHQF\DUHFULWLFDOFRPSRQHQWVRI are regularly published on the company’s web-site. and Environment ployees’ personal development and voluntary partici- the corporate governance system, as are the pro- pation in relevant social and community projects. WHFWLRQRIWKHFRPSDQ\ʈVLQWHUHVWVDQGFRQɢGHQWLDO To ensure compliance with ISO 37001 and ABMS: information. 2016, the company provides internal and external Quality We treat all our employees fairly and with respect. We links for the anti-corruption system: management make fair decisions on recruitment, selection, develop- Nobel Oil regularly makes use of media opportu- Subject of the call ment and promotion and do not discriminate based on nities to expand its public relations and inform Timing of the call gender, personal relationships, race, ethnicity, disability, the public in an accurate and timely manner. Only Person being called religion, sexual orientation or age. Procurement authorized personnel and the company’s public Form of contact experience relations manager handle issues such as oral and Person calling We will not tolerate exploitation or violence against Communication language our employees, customers, contractors, suppliers, The company respects the privacy of its employees DQGJXDUDQWHHVWKHFRQɢGHQWLDOLW\RISHUVRQDOLQIRU- YLVLWRUVJRYHUQPHQWRɥFLDOVRUDQ\RWKHUVWDNHKROG- ŐĹśōĔčĹś̼Ćťř͉Ćťřƈêśǅ͉śťąĔŐ͒ťĹŐ͒ƓĔƋƾĹĆĔƓ͒Ƨō͒ŐƟč͉ The company’s Rules of business ethics and con- Social er we have contacts with. We believe that threats, mation. Personal information is obtained solely for the duct and the anti-bribery policy are provided to all support violence, racism, discrimination, rudeness, verbal and purposes of managing the business and complying ĬêĆĔąťťō̼Ćťř͉pťąĔŐ̼{ĹŐ̼©ĔƋƾĹĆĔƓ͉ Nobel Oil Group employees and business partners. physical aggression, threatening behavior, insults or with legal requirements. Personal information is col- In other words, these rules are accessible to both VH[XDOYLROHQFHDUHVHULRXVRɤHQFHVWKDWZLOOUHVXOWLQ lected, stored and processed in a way that ensures its ƟƿĹƟƟĔƋ̼Ćťř͉pťąĔŐ{ĹŐ employees and business partners with the risk of FRQɢGHQWLDOLW\DQGFRPSOLHVZLWKDSSOLFDEOHODZ GRI Standards disciplinary action or dismissal. bribery above minimum. compliance table

44 Nobel Oil / Sustainability Report 2019 Nobel Oil / Sustainability Report 2019 45 Nobel Oil / Sustainability Report 2019

Approach to sustainable development

26 13/17 22 ©ƧƓƟêĹśêąŐĔͩ {ƧƋͩĆťśƟƋĹąƧƟĹťśͩƟťͩ nĔêƓƧƋĔƓͩ $ĔƾĔŐťƈřĔśƟͩDťêŐƓͩ ƟĴĔͩ½pͩ©ƧƓƟêĹśêąŐĔͩ ƟêōĔś ťĬͩƟĴĔͩĆťřƈêśǅ $ĔƾĔŐťƈřĔśƟͩDťêŐƓ

47 Report and reporting process

About Nobel Oil Group

Corporate governance

Ethics and compliance

Approach to sustainable development

Interaction with stakeholders

Labor Resistant in the relations field of development Health, Safety approach and Environment

Quality Nobel Oil’s goal in the field of sustainable devel- stakeholders are dependent on sustainable devel- the world’s best practices in sustainable develop- The operational management of sustainable de- management opment is to become an international engineer- opment. ment. We try to consider the needs and expecta- velopment issues is carried out by various depart- ing and construction company that contributes tions of stakeholders at all stages of our activities ments of Nobel Oil. In the Group’s subsidiaries, positively to the socioeconomic development Our ability to balance economic, social and environ- these issues are managed by the heads of those of the countries in which it operates, while also mental factors in our decision-making processes is in order to care for society, our employees and the companies. The Group’s companies can develop Procurement experience adhering to industrial and environmental safety, critical to our long-term sustainability. Investing in hu- environment. We believe that this approach is key to their own documents that take into account the corporate governance and social responsibility man capital, ensuring decent and safe working condi- becoming a great company and that it assists us in industrial characteristics of their activities in the standards. tions, improving the social environment and quality of identifying and managing risks and opportunities. ɢHOGRIVXVWDLQDEOHGHYHORSPHQW life in the regions where we operate, and minimizing Nobel Oil Group executives of various levels are Social We strive to apply sustainable development princi- negative environmental impact are all as important to in charge of managing activities related to sus- In general, every employee of Nobel Oil under- support ples and values to our day-to-day operations and XVDVVXFFHVVIXORSHUDWLRQDODQGɢQDQFLDOUHVXOWV tainable development. The Board of Directors is stands their responsibility to ensure a continuity of use them as a foundation for strategic decisions. responsible for the strategic management of issues daily work. Our successful activity directly depends Nobel Oil recognizes that long-term stability, com- Our approach to managing economic, environmen- concerning sustainable development, as well as the on the approach and principles applied by all our petitiveness and value creation opportunities for tal and social aspects of our operations is based on review and approval of high-level documents. employees at work. GRI Standards compliance table

48 Nobel Oil / Sustainability Report 2019 Nobel Oil / Sustainability Report 2019 49 Report Vision, Mission and Values Sustainable development and reporting objectives process

About Nobel Oil Group

Corporate governance

Ethics and compliance

Approach to sustainable development Industrial and environmental safety Support for local suppliers; Continuous improvement of the management Implementation of educational and cultural system, including industrial and environmental programs. safety issues; Responsibility to employees Interaction with stakeholders Developing an occupational safety culture to Creation of decent working conditions; Vision improve working conditions and occupational Equality and prevention of human rights abus- Our vision is to be the main choice of our customers and the most reliable partner in all areas of business by safety and reduce the number of industrial es; successfully providing the best services with the enthusiastic and active participation of our employees. Maintaining a competitive level of wages; injuries; Labor Application of the principle of reasonable cau- Support for personal and professional devel- relations Mission tion in the implementation of projects; opment of employees; 2XUPLVVLRQLVWRSURYLGHKLJKTXDOLW\VHUYLFHDQGVROXWLRQVXVLQJTXDOLW\SURFHVVHVLQDVDIHHɥFLHQWDQGHQYL- Minimizing the impact on the environment; Social support of employees; ronmentally responsible manner. Rational use of natural resources; Provision of safe working conditions and occu- Health, Use of innovative technologies; pational safety Safety Values Application of environmentally friendly tech- and Environment ZHZRUNZHRɤHUDFRPSUHKHQVLYHHQYLURQPHQW nologies. Business ethics SAFETY Fight against corruption We operate in line with the highest standards of and acknowledge a variety of people, ideas, tal- Good business reputation; social and environmental safety. We try to be good ents and experiences. We try to create a healthy Interaction with stakeholders Quality Creating an effective and transparent system Efficiency and transparency of corporate go- management corporate citizens. Our main priorities are the pro- environment and work as a team. of interaction with stakeholders; vernance; tection of occupational health, the safety of work- Respect for the rights and interests of all Respect for labor and human rights ers, integrity of our assets and the environment. CONSCIOUSNESS Improving the corporate governance system. We are truthful to both others and ourselves. In all groups of stakeholders; Development of a dialogue with stakeholders, Procurement QUALITY business relationships, we adhere to the highest experience partnership relations; Creation and development We guarantee quality and a quality assurance ser- ethical standards. We keep our promises. We are Accessibility and transparency of information; of economic values vice. We follow all relevant quality standards and responsible for all our actions. Keeping track of stakeholder feedback and Creation of investment opportunities; norms. surveys financial sustainability; PERFECTION Social Competitiveness support SINGLE TEAM We strive to achieve a high level of productivity As an international company, we appreciate and DQGRSHUDWLRQDOHɥFLHQF\DQGDVSLUHWRZDUGV Development of the regions in which respect the uniqueness of local cultures in the perfection in everything we do. we operate Contributing to the development of society countries in which we operate. No matter where and regions in which we operate; GRI Standards compliance table

50 Nobel Oil / Sustainability Report 2019 Nobel Oil / Sustainability Report 2019 51 816'* 1REHO2LODSSURDFKWRDFKLHYLQJ 0HDVXUHVLPSOHPHQWHGLQ 6XVWDLQDEOH'HYHORSPHQW*RDOV Report Integration of UN Sustainable and reporting The company pays decent wages to new • The salary the company paid to its employees was more process No poverty hires and creates jobs in the regions where it than 200 percent above the minimum wage in the country operates. By implementing social programs, it where it operates. Development Goals also plays an important role in improving the The company implemented social projects to provide jobs • well-being of the vulnerable population. to vulnerable and low-income population. About The United Nations established 17 Sustainable Devel- with the SDG to be able to contribute to this cause. Nobel Oil Group Good health and Considering the protection of the life and • The company reviewed and updated health and safety RSPHQW*RDOV 6'* LQZLWKVSHFLɢFWDUJHWVIRU well-being health of workers as an unconditional procedures and initiatives. priority, the company provides safe working • 5HJXODUPHHWLQJVZRUNSODFHFHUWLɢFDWLRQDQGPRQLWRULQJZHUH each goal. These goals include prevention of poverty, As was the case in previous years, we understand that conditions and strives to achieve injury-free conducted to assess employee health and workplace safety. strengthening education and health services, increas- by providing reliable and sustainable technological production. • Training programs were organized to increase the knowledge and skills of our employees and those of our contractors. Corporate ing the struggle against climate change, making the VROXWLRQRXUFRPSDQ\FDQGLUHFWO\LQɣXHQFHWKH6'* • Our employees and those of our contractors are provided governance world more sustainable and fair and other issues to and accelerate the achievement of these goals. with health and life insurance, and free medical checkups. address the challenges facing the world. The company implements comprehensive • Training, education and development programs on various In 2019, we commissioned a detailed survey to identify Quality education programs to increase the knowledge and topics were implemented for our employees throughout Nobel Oil believes that the responsibility for achieving WKH6'*DUHDVWKDWFRXOGEHQHɢWWKHPRVWIURPRXU skills of its employees. The company also the year. participates in social development programs • The company participated in several social projects to Ethics and these goals lies not only with countries but also with operational activities. Although each SDG is equally in the regions where it operates. support the development of vulnerable groups and young compliance the private sector and civil society. For this reason, we important to us, due to the nature of our operations specialists. always try to coordinate our activities and initiatives and initiatives we primarily contribute to 13 of them. Gender equality Our business ethics envisages creation • The company attaches great importance to gender of equal opportunities for all and non- equality and provides equal pay, rewards and career discrimination. development for men and women. Approach Zero Good health and Clean water and to sustainable No poverty hunger well-being Quality education Gender equality sanitation development

Affordable and Supporting the global trend of rational • 7KHFRPSDQ\VRXJKWWRLQFUHDVHRSHUDWLRQDOHɥFLHQF\ clean energy and prudent use of energy, the company and the sustainability of design and construction of its considers it a priority to improve energy assets. HɥFLHQF\ZLWKLQWKHFRPSDQ\DQGIRU customers. Interaction with stakeholders Sustainable Affordable and Decent work and Industry, innovation Reduced Sustainable cities Decent work and By creating jobs, being an exemplary taxpayer • The company implemented important projects to increase and infrastructure inequalities and communities consumption economic growth clean energy economic growth and production and giving preference to local suppliers, the employee satisfaction and productivity. FRPSDQ\PDNHVDVLJQLɢFDQWFRQWULEXWLRQWR • The company did important work to provide employees with the socioeconomic development of the areas decent wages, healthy and safe working conditions. in which it operates. • The share of local suppliers was above 90 percent. Labor relations Industry, innovation and infrastructure By initiating reliable and sustainable • The company gave preference to high-quality and technological solutions, the company promotes environmentally friendly technologies in its projects. Climate Peace, justice Partnerships action Life below water Life on land and strong for the goals the improvement of technological capabilities institutions DQGHɥFLHQF\RILQGXVWULDOVHFWRUV Health, Reduced 7KHFRPSDQ\ VUXOHVRIEXVLQHVVHWKLFV The company implemented initiatives to engage youth inequalities • Safety and conduct provide equal opportunities and representatives of vulnerable groups, and to develop and Environment for all, respect for human rights and non- them. discrimination.

Sustainable cities The company pays special attention to the • The company encourages people to use water and energy and communities HɥFLHQWXVHRIQDWXUDOUHVRXUFHVDQGHQHUJ\ HɥFLHQWO\GXULQJWKHLPSOHPHQWDWLRQRISURMHFWV and waste reduction. • The company managed to reduce hazardous waste by Quality LPSOHPHQWLQJHɤHFWLYHZDVWHPDQDJHPHQWSURFHGXUHV management

By continuously improving the technologies it • By implementing initiatives to reduce greenhouse gas Climate action uses and applying the best industry practices, the emissions, the company reduced the impact on the FRPSDQ\VHHNVWRLQFUHDVHWKHHɥFLHQF\RILWV environment. own operations and those of its customers and Procurement minimize the adverse impact on the environment. experience

Peace, justice The company pays special attention to The company organized regular trainings on the rules of and strong • institutions FRPSOLDQFHZLWKWKHODZɢJKWDJDLQVW business ethics and conduct for its employees. corruption and fraud, and prevention of • The company developed and implemented additional FRQɣLFWRILQWHUHVW procedures to improve the anti-corruption system. • The company carried out an anti-corruption inspection of Social supplier companies. support

Partnerships for The company continuously develops • The company partnered with leading and experienced the goals cooperation with stakeholders and seeks to organizations to achieve sustainable development goals. maintain an open dialogue with partners for the sustainable development of the regions in which it operates. GRI Standards compliance table

52 Nobel Oil / Sustainability Report 2019 Nobel Oil / Sustainability Report 2019 53 Nobel Oil / Sustainability Report 2019

Interaction with stakeholders

9 38 16 ©ƟêōĔĴťŐčĔƋͩ ¶ťƈĹĆƓͩčĹƓĆƧƓƓĔč ¶ťƈĹĆƓͩĹśĆŐƧčĔčͩĹśͩ groups the report

55 Report Principles of interaction with Forms of interaction and reporting stakeholders and topics discussed process

About The parties that have the greatest impact on our The company always adheres to the principles of 6WDNHKROGHU )RUPRILQWHUDFWLRQ .H\WRSLFV Nobel Oil Group DFWLYLWLHVDQGHɥFLHQF\WKHSDUWLHVZHVLJQLɢFDQWO\ regularity of communication and provision of timely JURXS depend on, the parties we have obligations to, and information about the main aspects of its activities. Shareholders General meetings of shareholders; Implementation of strategies; Financial the parties cooperation with which is in our strategic Regular meetings of company managers with sustainability; interests are considered our stakeholders. shareholders; Corporate governance; Quality of service; Corporate Shareholder requests (by phone and mail); ,QFUHDVLQJHɥFLHQF\ governance Publication of annual reports. Compliance with regulatory requirements. Nobel Oil sees achievement of Sustainable Develop- PHQW*RDOVLQEXLOGLQJDQHɤHFWLYHV\VWHPRILQWHU- .H\SULQFLSOHVRILQWHUDFWLRQZLWKVWDNH- Investors Regular meetings of company managers with Company development strategy; action with stakeholders. For this reason, we strive to investors; Results of the company’s operational and KROGHUV Publication of annual reports; ɢQDQFLDOSHUIRUPDQFH Ethics and EXLOGDQHɤHFWLYHGLDORJXHZLWKVWDNHKROGHUVXVLQJ /RQJWHUPVXVWDLQDEOHDQGHɥFLHQWGHYHO- Participation in conferences, summits; Conference Company’s development prospects; compliance available channels and means of communication. As a calls for investors. Sustainable development issues. opment responsible company, we guarantee prompt respons- Transparency and openness 6WDɤ Collective and private meetings of company managers; Remuneration and social support of employees; es to stakeholder enquiries, openness to productive Internal communication system; Safe working conditions; Employee training and Respect for the rights and interests of all Approach dialogue and consideration of stakeholder interests. Satisfaction survey; development; stakeholders, non-discrimination Organization of evaluation, training and professional Improving the remuneration system. to sustainable development Readiness for dialogue development; We cooperate with stakeholders in various formats Publication of annual reports.

and, in doing so, we respect the interests of all parties. State Relations with regulators; Participation in working Regulatory compliance; groups, Roundtables, conferences, forums; Impact on the local economy; Publication of annual reports; Protection of health, al safety and environment; Interaction with Publication of press releases and information on Transparency of reports. stakeholders important events.

Customers Internal communication system; Quality of services; Transparent evaluation; Regular meetings; Ethical business experience; Labor Suggestions; 7LPHO\DQGFRVWHɤHFWLYHSURMHFWFRPSOHWLRQ relations Contracts and agreements; Regulatory compliance; Stakeholder Publication of annual reports. Protection of Health, Safety and Environment. Health, Society Internal communication system; Charity; Safety groups and Environment Charity and sponsorship projects; Reception days; Employment; Publication of press releases and information on Interaction with educational centers. important events; Publication of annual reports.

Quality Business partners Internal communication system; Sustainable development; management Participation in working groups, roundtables; Joint projects; Participation in conferences, summits; Cooperation prospects; Contracts and agreements. Transparency of reports.

©ĴêƋĔĴťŐčĔƋƓ Customers PśƾĔƓƟťƋƓ ©ƟêǕ ©ƟêƟĔ Suppliers and Supplier selection procedures; Sustainable development; Procurement contractors Internal communication system; Joint projects; experience Contracts and agreements Cooperation prospects; Business meetings; Transparency of reports. Participation in conferences and exhibitions.

Media Press conferences; Information transparency. Social Press releases; support Special events; ƧƓĹśĔƓƓͩƈêƋƟśĔƋƓ ©ťĆĹĔƟǅ ©ƧƈƈŐĹĔƋƓͩêśčͩĆťśƟƋêĆƟťƋƓ nĔčĹê Written and oral communication.

GRI Standards compliance table

56 Nobel Oil / Sustainability Report 2019 Nobel Oil / Sustainability Report 2019 57 Nobel Oil / Sustainability Report 2019

Labor relations

641 18 % 94% ~84% ͩ¶ťƟêŐͩĔřƈŐťǅĔĔƓͩͩ ¶ťƟêŐͩƈĔƋĆĔśƟêĭĔͩ dťĆêŐͩƓƟêǕ Employee êƟͩpťąĔŐͩ{ĹŐͩ ťĬͩƿťřĔśͩĴĹƋĔčͩ ĆťřřĹƟřĔśƟͩƟťͩƟĴĔͩ ©ĔƋƾĹĆĔƓ̽ͩDŐĔśƓťŐͩ Ĺśͩ˖˔˕˝ Ćťřƈêśǅ êśčͩƋťōťś

59 By following the company’s policy of personnel Workforce recruitment activities include interac- selection and retention, Nobel Oil has developed tion programs with institutions of higher educa- Report Approach to human resource and reporting DFXOWXUHUHɣHFWLQJWKHYDOXHVJRDOVDQGDPEL- WLRQDQGWKHDWWUDFWLRQRITXDOLɢHGSURIHVVLRQDOV process tions of its employees. Our workforce selection from local and foreign markets. As of January 1, management XQLWVWULYHVWREXLOGDWHDPRITXDOLɢHGUHVSRQ- 2020, the total number of employees in Nobel Oil sible and motivated employees committed to the and its Prokon and Glensol subsidiaries was 641. In company’s values, supporting it in achieving its 2019, these companies hired 452 people, including About Nobel Oil Group goals and proud to be working for it. It is thanks to 369 temporary employees (for seasonal, construc- the employees possessing these qualities that we WLRQDQGɢHOGZRUN WKUHHJUDGXDWHVRIDQLQWHUQ- have reached the current level of development. ship program and 80 permanent employees.

Corporate Total number of hired employees governance 7RWDOHPSOR\HH Company QXPEHU Men Women Men Women Men Women Ethics and Permanent 27 15 28 12 37 12 compliance Nobel Oil Temporary 0 0 4 0 1 4

Permanent 857 43 13 2 15 4 Prokon Approach Temporary 0 0 324 24 428 42 to sustainable development Permanent 23 9 60 13 84 14 Glensol Temporary 27 3 0 0 0 0

Interaction with 6WDɤWXUQRYHU1 stakeholders

Company 7RWDOHPSOR\HHQXPEHU

Labor Hired 20 22 27 relations

Nobel Oil Dismissed 36 21 18

The staff remains the most important asset for tomer service in all our business segments. For this 6WDɤWXUQRYHU 72% 52.50% 40.45% the company and the primary contributor to its reason, Nobel Oil’s personnel policy is aimed at at- Health, long-term successful and sustainable develop- WUDFWLQJTXDOLɢHGSHUVRQQHOWRWKHFRPSDQ\UHWDLQ- Hired 1246 330 456 Safety and Environment ment. Our approach to human resources is based ing the current personnel capacity, its sustainable Prokon Dismissed 369 833 113 on the principle of social partnership, which development, career advancement and well-being, 6WDɤWXUQRYHU 79.96% 21% 26% encourages us to be a responsible employer. This and improving the personnel management system. principle consists not only in legislative require- Human resource management is the responsibility Hired 16 44 46 Quality management ments but also in a number of the company’s own of human resource departments of Nobel Oil and Glensol Dismissed 9 11 22 obligations. its subsidiaries and is governed by annual action plans. We operate in accordance with the Constitu- 6WDɤWXUQRYHU 29.51% 21.15% 26.04%

We realize that by attracting and retaining the best tion of the Republic of Azerbaijan, the Labor Code 1 +LJKVWDɤWXUQRYHULVGXHWRWHPSRUDU\MREVRQWKHFRPSDQ\ʈVSURMHFWV Procurement workforce, we can provide the highest level of cus- and other relevant regulatory acts. experience In 2019, we implemented a project called “How to live instil in our employees help to guide them forward, Values“ to facilitate the company’s human resources especially in challenging times. policy. The goal of the project was to support employ- Motivation Selection, evaluation and Social and remuneration ees in the decision-making process, inform customers We believe that this attitude is particularly important utilization of workforce MAIN DIRECTIONS support OF HUMAN and potential partners about the company’s qualities in the rapidly changing technological, environmental Social policy RESOURCE and values, and improve communication, motivation and social requirements of the global economy. MANAGEMENT and employee engagement. In the reporting year, eight trainings were Training and development Corporate communication provided for a total of 150 employees as part GRI Standards Within the project framework, the company values we of the project. compliance table

60 Nobel Oil / Sustainability Report 2019 Nobel Oil / Sustainability Report 2019 61 One of the important steps taken to improve the Our competency system enables our employees HɤHFWLYHQHVVRIVWDɤPDQDJHPHQWLQZDVWKH to have a clear understanding of the levels of Qualified Report implementation of the “Competency Development activity expected from them and the rules of and reporting process Program”. The objective of the program was to show conduct required to achieve high results. workforce RXUHPSOR\HHVZKDWWKH\QHHGWRGRWREHHɤHFWLYH and how they are integrated into the company’s We believe that the use of a competency system Our investment in the training and development Our company also takes advantage of the com- goals and successes. By setting out powers in each will improve business practices and enhance ef- About of employees remains an important area in our re- prehensive and modern teaching techniques Nobel Oil Group direction of the company’s activity, we demonstrat- ficiency by enabling our employees to success- lations with the workforce. We believe that quality such as seminars, training programs, internship ed the ways of conduct required and valued by the fully align their knowledge and skills with the training and professional development of employ- programs and distance learning programs at company for employees to achieve their goals. This organization’s priorities. ees is key to the success of our business. For this universities. ensures that employees understand the conduct reason, the company always keeps the formation Corporate enshrined in the company’s values and performance. governance RIDWHDPRITXDOLɢHGSURIHVVLRQDOVWHDPOR\DOW\ Our annual human resources plan includes train- as well as the knowledge and skills of its employees ing and development of the necessary skills and in the spotlight. This, in turn, remains a key factor competencies, as well as various programs aimed &RPSHWHQF\EHQHɢWV in minimizing the risks associated with potentially at attracting and developing young professionals. Ethics and unprofessional conduct. The training and development programs for our compliance employees help us to maintain the required level Identifying precise expectations and guidelines on how employees perceive and reinforce their conduct in line 6WDɤWUDLQLQJLVEDVHGRQWKHDQQXDOWUDLQLQJDQG of competitiveness and successfully address with the organization’s mission, culture and goals; development plans of Nobel Oil, as well as Prokon problems related to new areas of our activities. Approach 1 and Glensol subsidiaries. Depending on the nature to sustainable of activity, each company develops an action plan to In 2019, in line with its current and future training development improve the skills of its employees. The needs iden- plans, Nobel Oil and its subsidiaries organized WLɢHGLQWKHWUDLQLQJRIGLɤHUHQWJURXSVRIVWDɤDUH various training programs for all categories of arranged in the order of priority. Our main strategic staff. The trainings mainly focused on profes- Creating a common language to describe what is Interaction with required and expected in the work environment, thus partners in this area are training centers with a proven sional development and retraining, and were held stakeholders 2 ensuring reliable and quality performance; track record of leading education providers. in the form of seminars.

Average training hours per employee in 2019 (by gender and employee category) Labor relations (PSOR\HHFDWHJRU\ 1REHO2LO 3URNRQ *OHQVRO

Integrating various aspects of human resource management Executives 452 310 6 by improving coordination of human resource planning, recruitment, training and development, thus rationalizing Specialists 696 658 39.2 Health, ĴƧřêśͩƋĔƓťƧƋĆĔƓͩêśčͩĆťśƓĔƊƧĔśƟŐǅͩĹśĆƋĔêƓĔͩĔǖĆĹĔśĆǅ̼ Safety 3 7HFKQLFDOVWDɤ 8 0 57.4 and Environment

Laborers 0 0 0

Men 690 732 38.4 Quality management Eliminating gaps in professional skills, further Women 466 236 13.5 developing strengths and clarifying career development requirements; 4 We believe it is also important to develop young students sign a temporary employment agreement people who are potentially our future employees. for this period and are hired as specialists. Depend- Procurement experience With this aim, we are implementing a “Paid Summer ing on the nature and place of their work, interns Internship” program for young professionals during UHFHLYHSD\PHQW$OVRDOOWKHEHQHɢWVDSSOLFDEOHWR ©ƟêǕͩêĭĹŐĹƟǅ̽ͩťƋĭêśĹǏêƟĹťśêŐͩĆĴêśĭĔͩêśčͩťƋĭêśĹǏêƟĹťśêŐͩ the summer holidays. The program aims to increase Nobel Oil employees apply to interns as well. ĆƧŐƟƧƋĔ̼ the practical knowledge of young professionals in Social YDULRXVɢHOGVRIRXUZRUNIDPLOLDUL]HWKHPZLWK As a result of a competition announced as part of support 5 hands-on working conditions, test their theoret- the “Summer Internship Program” in 2019, 22 interns ical knowledge, and enable them to obtain more were provided with a job. After the summer in- detailed information about the quality of work at ternship, four students began to work in Nobel Oil Nobel Oil. According to the terms of the program, Group as junior specialists. GRI Standards compliance table

62 Nobel Oil / Sustainability Report 2019 Nobel Oil / Sustainability Report 2019 63 Another step the company took in the field of Report and reporting improving the system of remuneration and moti- process vation in 2019 was the application of the “Busi- Remuneration ness Management Procedure”. The procedure defines ways of increasing company efficiency by aligning individual and team goals with the About and motivation Nobel Oil Group strategic goals of the organization and analyzing and evaluating the knowledge, skills and abilities of employees. This procedure is an important tool designed to facilitate the adaptation of Corporate employees to the new environment, their devel- governance opment and stay in the company, and to evaluate their effectiveness.

Ethics and The remuneration system is based on key perfor- compliance mance indicators developed with a view to the company’s strategic goals. For this reason, key performance indicators of each employee are evaluated in accordance with the company’s strategic Approach to sustainable goals at the beginning of each year. According to development this procedure, the evaluation of employees is carried out at the end of each year. Depending on the approach, the performance evaluation can also be Interaction with conducted in the middle of the year, as indicated in stakeholders the relevant procedure.

Meetings are held with line managers to review the effectiveness of employees, confirm that Labor they have achieved the goals set and provide relations feedback on the results of their performance. Changes to individual goals are made only with

the consent of managers. At the end of the year, Health, the employee’s overall performance is evaluated Safety on the basis of a balance of between the goals and Environment achieved and key performance indicators. With the consent of the General Director, high-performing employees are awarded bonuses in Quality One of the company’s main priorities is to provide labor legislation in force in the country where the neration system. The clear structure of grades accordance with the procedure. management DQHɤHFWLYHV\VWHPRIUHPXQHUDWLRQ:HDLPWR company operates or local regulations. provides a logical basis for making objective maintain and increase our productivity by enhancing decisions on remuneration and promotion of In addition, our company offers a number of the motivation of employees. The base salary in the ,QLQDQHɤRUWWRLPSURYHWKHKXPDQUHVRXUFH our employees. This allows us the opportuni- benefits and compensations to motivate employees. We attach great importance to issues Procurement company depends on the tasks assigned to employ- management system, we launched a joint project ty to engage all stakeholders, determine the experience ees, their complexity and the level of responsibility ZLWK.RUQ)HUU\DQLQWHUQDWLRQDOFRQVXOWLQJɢUP$V management structure and principles, establish associated with the quality of life of our employ- involved. part of the project, we succeeded in improving the the levels of wages and benefits, and provide ees. Our benefits and compensation package system of employee gradation. This has helped us to employees with a feeling of being heard. includes voluntary health insurance, benefits for By continuously monitoring the labor market, we determine the real value and scope of our roles and temporary disability, industrial accident insur- Social provide our employees with a competitive salary. In responsibilities, appoint the right people to the right By implementing this system, the company has ance, social insurance, financial assistance, paid support 2019, our starting salary was 200 percent above the positions and apply fair remuneration methods. further enhanced transparency and fairness. leave (e.g maternity, paternity and medical). The minimum wage for the country. The starting salary This approach gives employees a clear idea of benefits envisaged for permanent employees of employees of foreign companies is set at a level Within this project, the gradation of positions their career development and provides them are also available to temporary and part-time GRI Standards not lower than the minimum wage established by the plays a fundamental role in managing the remu- with confidence that their remuneration is fair. employees. compliance table

64 Nobel Oil / Sustainability Report 2019 Nobel Oil / Sustainability Report 2019 65 Report Employee satisfaction Diversity and inclusion and reporting process

About Nobel Oil Group

Corporate governance

Ethics and compliance

Approach to sustainable development

Interaction with stakeholders Nobel Oil and its subsidiaries have an internal com- which is responsible for identifying, investigating and munication system that allows employees the op- responding to both formal and informal issues raised portunity to appeal to the management, report on by employees. Employees can raise an issue through Labor problems and be informed about how a problem has several channels and their line managers act as the relations been reviewed and resolved. By operating the internal ɢUVWOLQNLQWKLVSURFHVV,QWHUQDOFRPSODLQWVFDQEH communication system at the highest level, we have sent via e-mail, in a letter or by informing an HR repre- FUHDWHGDIDYRUDEOHHQYLURQPHQWIRUHɤHFWLYHWHDP- sentative in person. Nobel Oil is committed to providing favorable Creating an enabling environment for all our em- work. We are fully aware that employees should be Health, working environment to its employees by using the ployees is of tremendous importance in achieving Safety able to receive accurate and timely information about Another important step taken to measure the level best employment practices, rules of business ethics our company’s mission of long-term success. and Environment FRUSRUDWHHYHQWVWKDWDɤHFWWKHLUULJKWVDQGUHVSRQVL- of employee satisfaction is the annual satisfaction and conduct, and supporting a diverse and inclusive bilities and communicate their views and concerns to survey. The information received as a result of this culture. We appreciate that whether we can achieve By hiring graduates, students, people with disabili- the company’s management. VXUYH\IRUPVWKHEDVLVRISODQQLQJLQWKHɢHOGRIVWDɤ good results depends on our ability to apply diver- ties and senior executives, Nobel Oil is committed to Quality management and managerial decision-making. The sity and inclusivity to our corporate culture and building an inclusive and diverse working environ- management One of the important elements of our internal com- objective of this tool is to maintain a high level of em- way of working. ment. While we support gender equality in the areas in munication system is the “open door” policy, which ployee satisfaction in the company. which we operate, the nature of such work may prove allows all employees the opportunity to meet with the Creating a diverse and inclusive work environ- FKDOOHQJLQJ7KHUHDUHFHUWDLQGLɥFXOWLHVLQUHFUXLWLQJ management on a regular basis. Such meetings facil- In 2019, a total of 84 percent of employees partic- PHQWKHOSVXVWRɢQGWKHEHVWSURIHVVLRQDOVZKR women, who account for 9 percent of our workforce, Procurement experience itate dialogue and stimulate openness and employee LSDWHGLQWKHDOOVWDɤVXUYH\DQGDFFRUGLQJWRWKH can demonstrate their full potential. This, in turn, predominantly holding specialized positions. involvement in the solution of key issues for the answers of those polled, the degree of attachment LQFUHDVHVWKHFRPSDQ\ʈVFRPSHWLWLYHQHVV:HRɤHU company. This format increases employee productivity to the company was 83 percent. The survey revealed equal opportunities to all and respect gender, racial, In addition, we take part in various projects to and provides management with a feedback channell to issues in need of development and a focus group was ethnic and cultural equality, way of thinking, life support and facilitate the development of people Social UHFHLYHLQIRUPDOXSGDWHVDERXWVSHFLɢFDVSHFWVRIWKH established to work on them. The focus group consists experience and all other qualities that make each with disabilities. We create a working environment support company’s activity directly from employees. of 12 people, including two leaders. The other 10 are of us unique. Proceeding from the company’s ap- that enables them to contribute to the overall work, people working in the Group’s companies. Members of proach, we strive to create a culture in which each experience a sense of satisfaction and be treated An important role in the company’s interaction with the focus group have the opportunity to have their say individual is valued and believe in the power of with respect in the workplace. The company cur- employees is played by the human resources team, and share their views. cooperation and teamwork. rently employs 26 people with disabilities. GRI Standards compliance table

66 Nobel Oil / Sustainability Report 2019 Nobel Oil / Sustainability Report 2019 67 TOTAL NUMBER OF EMPLOYEES BY GENDER BREAKDOWN OF EMPLOYEES BY AGE Report 1REHO2LO 3URNRQ *OHQVRO and reporting process Nobel Oil 30-50 50 30-50 30-50 \DĖGDQ \DĖGDQ \DĖGDQ \DĖGDQ \DĖGDQ \DĖODU \DĖGDQ \DĖODU \DĖODU DĖDÞî DĖDÞî \X[DUî DĖDÞî \X[DUî 7RWDOQXPEHURIHPSOR\HHV DUDVî \X[DUî DUDVî DUDVî Men Women Men Women Men Women About Nobel Oil Group 8 37 4 118 350 21 15 72 18 Total number of employees by 27 15 32 12 38 16 gender

Prokon BREAKDOWN OF NOBEL OIL BREAKDOWN OF PROKON EMPLOYEES Corporate governance EMPLOYEES BY GENDER AND AGE BY GENDER AND AGE 7RWDOQXPEHURIHPSOR\HHV IN 2019 IN 2019 Men Women Men Women Men Women Women Men Women Men Total number of employees by Ethics and 857 43 337 26 443 46 gender compliance Executives 0 6 Executives 0 9

Glensol Specialists 11 19 Specialists 20 80 Approach 7RWDOQXPEHURIHPSOR\HHV 7HFKQLFDOVWDɤ 0 0 7HFKQLFDOVWDɤ 11 134 to sustainable development Men Women Men Women Men Women Laborers 1 12 Laborers 15 220 Total number of employees by 50 12 66 13 91 14 gender Interaction with stakeholders BREAKDOWN OF GLENSOL EMPLOYEES BY GENDER AND AGE TOTAL NUMBER OF EMPLOYEES BY SENSITIVE GROUPS IN 2019 Labor Women Men relations 7RWDOQXPEHURIHPSOR\HHV Nobel Oil Prokon Glensol Executives 3 9

People with disability 2 11 0 Specialists 10 59 Health, Safety and Environment 7HFKQLFDOVWDɤ 0 14 Refugees and IDPs 2 12 3

Laborers 1 6

Quality management NUMBER OF MEMBERS OF EXECUTIVE BODIES BY GENDER AND AGE

Nobel Oil Prokon Glensol Procurement experience Women

Men 5 9 2

Under 30 years of age Social support

Between 30-50 years of age 5 9 2

Above 50 years of age GRI Standards compliance table

68 Nobel Oil / Sustainability Report 2019 Nobel Oil / Sustainability Report 2019 69 Nobel Oil / Sustainability Report 2019

Health, Safety and Environment

464 322 1699,24 manat 1.15 0.12 ton eq. ,ǄƈĔśƓĔƓͩťś ¶ťƟêŐͩͩĹśŊƧƋǅͩĬêĆƟťƋͩ ¶ĹřĔͩŐťƓƓͩĬêĆƟťƋͩ ¶ťƟêŐͩͩĆêƋąťś HSE (including employees čƧĔͩƟťͩĹśŊƧƋǅ emissions of contracting (including employees companies) ťĬͩĆťśƟɩêĆƟĹśĭͩ companies)

71 In addition, ISO 14001 and ISO 45001 internation- Nobel Oil management system Our approach al HSE management system has been successful- Report and reporting ly applied to align the operations of Nobel Oil’s Rules of business ethics process ZERO subsidiaries with contemporary requirements. and conduct HARM to Health, Safety As part of our overall management system, HSE has been adapted to the requirements of inter- Policy and Environment national standards, enabling the management of About Business Nobel Oil Group risks by prioritizing preventive measures to con- experience Providing safe and healthy working conditions for zero impact to the environment and zero non-pro- tain and eliminate the consequences of potential incidents. our employees and minimizing the impact on the ductive time. International standards environment remains one of our top priorities. We Corporate fully understand and accept our responsibility for 7KLVSULQFLSOHIXOO\UHɣHFWVRXUSKLORVRSK\RI governance operating safely, creating a safe working environ- “setting the highest standard of business“ and Roadmap ment for our employees and protecting the health demonstrates our attitude and priorities in relation of our stakeholders. to employees, customers and society. Our reliable Technique management system, competence and loyalty to Ethics and compliance We follow the “Zero harm” principle in our oper- employees remain the key element of our success ations, which is evidence of Nobel Oil’s vision of and the primary contributors to the zero harm achieving the objective of zero harm to people, performance. Approach Control and monitoring to sustainable development Control over Health, Safety and Environment In addition, authorized managers and specialists of is exercised by senior management of Nobel Nobel Oil and its subsidiaries exercise control over Oil, while the Board of Directors is responsible the implementation of plans and measures to im- Interaction with for reviewing the results of the company’s HSE prove occupational safety, the state of safety in the stakeholders performance. The head of the Group’s Health, workplace and compliance with industrial safety Safety and Environment division monitors the requirements and environmental regulations. progress of activities specified in the roadmap and the annual plan, and provides updates at Our most important goal is to develop leadership in Labor relations monthly meetings of the HSE management Nobel Oil Group and among contractor companies committee. and reinforce the safety culture.

Health, Safety PśƟĔƋśêŐͩĆťśƟƋťŐͩêśčͩřťśĹƟťƋĹśĭ ,ǄƟĔƋśêŐͩĆťśƟƋťŐͩêśčͩřťśĹƟťƋĹśĭ and Environment

Quality ťêƋčͩťĬͩ$ĹƋĔĆƟťƋƓ ©ƟêƟĔͩąťčĹĔƓ management Management system Committee ,ǄƟĔƋśêŐͩêƧčĹƟ Procurement experience We continuously improve and improve the oper- ,QRUGHUWRSURYLGHWKHXQLɢHGDSSURDFKWR+6( ational performance of our management system requirements we have developed HSE policy in to ensure compliance with the expectations of 2019. This policy contains the key principles and

supervisory bodies and customers and our in- approaches to ensure the sustainable development DƋťƧƈͩK©,ͩnêśêĭĔƋ Customers Social ternal procedures on health, occupational safety of the management system based on the experi- support and Environmental Protection. Our HSE manage- ence and liabilities of our company. This policy is ment system is based on strict compliance with focused on the performance of all works without the Law on Occupational Safety and the require- any occupational injury and accident regardless of ƧƟĴťƋĹǏĔčͩťǖĆĹêŐƓ ments of local legislation and the Labor Code. complexity. GRI Standards compliance table

72 Nobel Oil / Sustainability Report 2019 Nobel Oil / Sustainability Report 2019 73 As a responsible company, we understand the procedure, audits are to be carried out in high-risk importance of involving not only senior managers areas by supervisors and managers together with Report and reporting and specialists but also the employees playing an HSE representatives. One of the key provisions of process important role in promoting a safety culture in the the procedure is that representatives of various processes of control and self-control. subsidiaries of the company must participate in

each audit. We believe that this will make audits ¶ƋêĹśĹśĭ Assessment of ƋťƾĹƓĹťśͩťĬͩ ƋĔƈêƋêƟĹťśͩêśčͩ PśƾĔƓƟĹĭêƟĹťśͩêśčͩ In 2019, we continued working to improve the PRUHHɥFLHQW ƿťƋōĹśĭͩĆťśčĹƟĹťśƓͩ ĔřƈŐťǅĔĔƓͩƿĹƟĴͩ ĹřƈŐĔřĔśƟêƟĹťśͩťĬͩK©,ͩ ƋĔƈťƋƟĹśĭͩťĬͩĹśčƧƓƟƋĹêŐͩ About êśčͩƓêĬĔƟǅ ƈĔƋƓťśêŐͩƈƋťƟĔĆƟĹƾĔͩ ƋĔĭƧŐêƟĹťśƓ êĆĆĹčĔśƟƓͩêśčͩťĆĆƧƈêƟĹťśêŐͩ Nobel Oil Group control and monitoring system. To this end, we equipment čĹƓĔêƓĔƓ produced and implemented an HSE “Planned Audit One of the most important ways of evaluating Procedure”. DQGLQFUHDVLQJWKHHɤHFWLYHQHVVRIWKHFRPSDQ\ʈV governance system is annual corporate control Nobel Oil is implementing a number of important We believe that the key to optimizing productiv- Corporate The purpose of this procedure is to carry out over compliance with the requirements of national projects of various levels. Each of these projects ity of each project, reducing the time spent and governance VFKHGXOHGDXGLWVE\TXDOLɢHGSURIHVVLRQDOVWR legislation and corporate standards, as well as the is successful because we are committed to our achieving perfection is the full compliance of our verify compliance with programs, rules and overall measures taken following external audits. The in- core value of protecting the people by honoring company and customers with HSE rules. standards. The procedure applies to all operations spections by government agencies and requests of our obligation to implement advanced health and of Nobel Oil and its subsidiaries. According to the our customers play an important role in this. Ethics and safety initiatives. We continuously seek to intro- We perform our projects by designing completely compliance duce innovation and develop our Health, Safety safe workplaces. In order to prevent accidents and and Environment programs so that they not only incidents, we make comprehensive preparations share the best industry practices but also meet RQLQMXU\SUHYHQWLRQKD]DUGLGHQWLɢFDWLRQDQG Approach the highest standards. risk assessment and management. to sustainable Workplace development safety We empower our employees and demand that they stop any work if they believe that it is dangerous. This approach is fully supported by the Interaction with stakeholders Nobel Oil is convinced that the lives and health company's management. of its personnel are top priority and realizes its responsibility for operating safely and creating safe working conditions. To further improve working conditions and meet these As a responsible company, we attach great impor- Labor relations requirements, Nobel Oil and its subsidiaries annually tance to the application of modern systems to im- We care about the health and safety of all people develop explicit contingency rules and action plans. The prove the conditions of our employees working in involved in our operations and projects - em- SODQLGHQWLɢHVPHDVXUHVRQWKHSURWHFWLRQRIKHDOWK operational sites and develop safe working tech- ployees, suppliers, subcontractors, customers creation of a healthy working environment, prevention niques. Also, to ensure safe operation of process Health, and those living in surrounding communities. Safety of potential accidents and occupational diseases, mini- facilities, equipment and mechanisms performing We demonstrate with our work our commitment and Environment mization of production risks, and other health, sanitary complex technological processes, we provide their to occupational safety and full compliance with and hygienic measures. timely maintenance and testing. regulatory requirements. We always strive to

implement new initiatives in this area to further Quality reinforce this approach to health and occupa- management tional safety. Nobel Oil and its subsidiaries have put in place emergency response plans. These set out detailed requirements on what employees should In 2019, in accordance with the action plan on do in the event of an accident and emergency, including evacuation and health and safety, Nobel Oil and its subsidiaries Procurement medical response measures. experience continues the implementation of organizational and technical measures to enhance safety and improve working conditions.

Social During the reporting year, a number of corporate support programs were implemented in Nobel Oil Group to minimize production and occupational risks within the framework of our obligations on industrial, occupational and environmental safety. GRI Standards compliance table

74 Nobel Oil / Sustainability Report 2019 Nobel Oil / Sustainability Report 2019 75 accurately identify and assess potential hazards in ship agreements or joint ventures. If a customer Risk-based approach the workplace. has a specific risk assessment procedure and Report and reporting forms it can use at its facilities according to the process If a customer does not have an approved re- agreement, it may use that procedure if its risk placement for our protocol or a more serious management mechanisms are is aligned with our procedure, this protocol applies to our partner- protocol. About Nobel Oil Group

ISO 31000:2018 risk management principles enable a broad approach to this protocol. Corporate governance

Sustainable Integrated development

Human Structured and cultural Ethics and and full factors Value compliance Creation and Best Protection available Adapted information Approach to sustainable Dynamic Inclusive development

Scope, Subject, Integration Criteria Approach Risk assessment Interaction with Recognition of risk Monitoring Development and review stakeholders Design Leadership Risk analysis and Commitment Risk assessment Communication Communication and consultation Labor Elimination relations Evaluation Execution Registration and reporting

Foundation Process Health, Safety and Environment

Quality One of the key measures to prevent incidents Risks are assessed in accordance with the com- management is the regular health and safety risk assessment pany’s internal methodology described in the Risk both before and after a new operation. During the Assessment Protocol. According to the Protocol, Management of change preparation of assignments, sources of danger, risk risk assessment is carried out for all jobs undertak- factors, the nature of potential incidents and their en both within and outside the facilities of Nobel Procurement Our Management of Change (MoC) process is de- All personnel and organizational changes capable of experience VFHQDULRVWKHQXPEHUDQGSODFHPHQWRIVWDɤDUH Oil and its subsidiaries. signed to identify potential hazards that may be DɤHFWLQJWKHFRPSDQ\ʈV+HDOWK6DIHW\DQG(QYL- taken into account. The selection of the nature of brought about by change, assess the associated ronmental performance or regulatory compliance, an assignment is based on an all-round assessment :LWKLQWKHIUDPHZRUNRIDXQLɢHGULVNPDQDJHPHQW risks and systematically eliminate them. as well as physical, operational, chemical or process of the facility characteristics, its location and asso- V\VWHPLQWKHɢHOGRIRFFXSDWLRQDOLQGXVWULDODQG changes to any of Nobel Oil Group’s assets, must be Social ciated risks . environmental safety, we are working to identify, The process requires that all operational and carried out in accordance with the MoC process. support evaluate, eliminate or reduce risks in all areas of our process changes be properly planned, analyzed The safety of production, as well as potential risks to operation. The participation of every employee in and approved to avoid disruption to service and When in doubt about the safety of a proposed the health and lives of Nobel Oil employees and con- WKHLGHQWLɢFDWLRQRIKD]DUGVDQGULVNPDQDJHPHQW reduce the possibility of new threats. change, all participants in the MoC process are tractors, are assessed using a risk-based approach. procedures allows us the opportunity to fully and GRI Standards responsible for stopping the job. compliance table

76 Nobel Oil / Sustainability Report 2019 Nobel Oil / Sustainability Report 2019 77 Asset security assessment Assessment of working Report and reporting process The scheduled inspection procedure we introduced This procedure allows us the opportunity to detect conditions in 2019 requires us to carry out scheduled site and prevent risks that may potentially lead to

audits. serious incidents, keep incidents at level zero and About increase our value.. Nobel Oil Group

Corporate governance

Ethics and Third party compliance

oversight Approach to sustainable development In approaching occupational safety, we apply our principles and policies in the field of occupational health and safety to all employees, including those of contractors and Interaction with stakeholders subcontractors. We do this because they have a significant impact on the safe operation of our projects. When operating company facilities, we

require that contractors rigorously follow the Labor standards and norms we have adopted in the relations field of occupational safety and health. These requirements form an integral part of the agreements between Nobel Oil and its subsidiaries We attach more importance to creating and main- monitoring were carried out in the company’s Health, and contractors. taining safe and decent working conditions for our KHDGRɥFHDQGGXULQJWKHZRUNSODFHFHUWLɢFDWLRQ Safety and Environment employees than to technical and organizational process of the HAOR project implemented by the To ensure safe performance of work by contrac- issues. company. tors, Nobel Oil Group verifies the availability of

contractor personnel’s certificates aligned with In accordance with the national legislation and the It was determined as a result that the physical Quality the required specialization, provides a safety measures Nobel Oil and its subsidiaries are taking SDUDPHWHUVRIERWKVLWHDQGRɥFHEDVHGZRUN- management induction and initial “toolbox” safety briefings. to improve working conditions of their employees places of Prokon LLC (all parameters measured by Work is carried out on the basis of a permit sys- every year, an assessment of working conditions is a mobile laboratory) are within the norms estab- tem. Control over work and quality assurance are conducted to identify harmful and hazardous fac- OLVKHGE\WKHOHJLVODWLRQ,QWHUPVRIWKHGLɥFXOW\ provided. Procurement tors of the production process and measure their DQGLQWHQVLW\RIVLWHDQGRɥFHEDVHGZRUNLQ experience impact on employees. According to the results, general, Prokon LLC belongs to the category of We are well aware that good safety performance ZRUNLQJFRQGLWLRQVDUHFODVVLɢHGDQGPHDVXUHV optimal workplaces. is a direct contributor to the success of a proj- are taken to improve them. ect. These results are manifested in the atten- ¶ťͩƋĔčƧĆĔͩƟĴĔͩĴêƋřĬƧŐͩĹřƈêĆƟƓͩťĬͩ Social tion, vigilance and responsibility in relation to In 2019, 80 percent of workplaces of our subsid- ƈƋťčƧĆƟĹťśͩťśͩťƧƋͩĔřƈŐťǅĔĔƓ̽ͩƿĔͩ support every single detail at the work site. It is thanks LDU\3URNRQ//&ZHUHFHUWLɢHG7KLVSURFHVVZDV ƈƋťƾĹčĔͩƟĴĔřͩƿĹƟĴͩƊƧêŐĹƟǅͩƈĔƋƓťśêŐͩ to these efforts that we provide for the safety carried out by an accredited state laboratory with ƈƋťƟĔĆƟĹƾĔͩĔƊƧĹƈřĔśƟͩêśčͩąťťƟƓ̽ͩ of our employees, improve their well-being and WKHSDUWLFLSDWLRQRIWKHFRPSDQ\ʈVFHUWLɢFDWLRQ ĴĔêƋĹśĭͩêśčͩƾĹƓĹťśͩƈƋťƟĔĆƟĹťś̽ͩƓōĹśͩ achieve the best result. GRI Standards commission. Lighting, noise, air and radiation ĆŐĔêśƓĹśĭͩêśčͩčĔĆťśƟêřĹśêƟĹťśͩêĹčƓ̼ compliance table

78 Nobel Oil / Sustainability Report 2019 Nobel Oil / Sustainability Report 2019 79 Report Injury reporting Enhancing safety through and reporting process Nobel Oil registers all accidents involving its own levels of awareness, investigation, observation employee awareness employees and the employees of contractors and seriousness for all actual and potential events. and subcontractors. Such registration allows the The knowledge and skills of employees in the OCCUPATIONAL About company the opportunity to enhance control on This protocol will allow us the opportunity to de- ɢHOGRIKHDOWKDQGVDIHW\DUHKLJKO\LPSRUWDQWIRU AND INDUSTRIAL Nobel Oil Group WKHJURXQGDQGSXWLQSODFHDQHɥFLHQWV\VWHPRI velop a consistent understanding of occupational the sustainability of our business. We arrange a SAFETY COURSES CONDUCTED production safety. The registration of all incidents health and safety concepts across the group and process of compulsory training of all employees, IN 2019 and the investigation of accidents are carried out provide a consistent approach to incident investi- including senior executives, and exercise rigorous 'XUDWLRQ Corporate in a timely manner in accordance with the require- gation. &RXUVHVXEMHFW $WWHQGHHV control over it. This helps the company to develop (man/hour) governance ments of national legislation and our internal the right approach to safety culture. Our training procedures. In addition, while a number of protocols on health DFWLYLWLHVɢUVWRIDOOLQFOXGHWKHLPSOHPHQWDWLRQ Electrical safety 1650 1744 and occupational safety reports focus on whether of visual programs on training, retraining and The company carefully investigates each accident, an incident has been registered, the new protocol professional development with the aid of state- Ethics and compliance LGHQWLɢHVLWVFDXVHVDQGSHUIRUPVWKHQHFHVVDU\ gave us ample opportunities for improving the of-the-art materials, the application of a spe- Working at heights 1552 1620 analysis to make sure that similar events do not system of occupational and industrial safety. This cial training system for personnel working with happen again in the future. protocol gives us three main advantages: hazardous equipment, and improvement of the Manual lifting 1615 1710 TXDOLW\RIFRPPXQLFDWLRQLQWKHɢHOGRIKHDOWK Approach ,QLQDQHɤRUWWRLQFUHDVHWKHWUDQVSDUHQF\ • Management receives timely and accurate and safety. to sustainable of reporting that encourages improvement of report about an incident development Safety at sea 5 40 safety, we initiated the development of a protocol • Time and resources are focused on high- During the implementation of projects in our en- on Incidents and their investigation. The protocol risk incidents terprises, a relevant safety plan is prepared at the • Support the organization's training applies to the entire organization. initial stage. Before any important work commenc- Fire safety 1594 1737 Interaction with program to prevent a recurrence of es, trainings are conducted for company employ- stakeholders The objective of this protocol is to determine an incident and apply engineering, ees and those of our contractors on key aspects First aid 1413 1743 when and how an investigation should be con- administrative and personal protective and risks associated with the job. The company GXFWHGDIWHUDQLQFLGHQW7KHSURWRFROGHɢQHVWKH systems within the company hierarchy makes sure that work starts only after a detailed Labor safety inspection has been completed. Driving safety 1236 1315 relations

To develop a safety culture and practice the re- PRODUCTIVITY :RUNLQJLQFRQɢQHG 1688 1751 quired action, trainings on “Occupational Safety spaces and Security” and “First Aid” were organized for Health, &DWHJRU\ Safety company employees in 2019. and Environment Prokon Glensol Prokon Glensol

LTIR (lost time through injury ratio) 0 0 0.12 0 Quality management TIR (total injury ratio) 0 0 0.35 0.80 Environmental compliance

Our Health, Safety and Environmental (HSE) Prokon and Glensol employ precise rules and Procurement policy requires the determination of minimum regulations in relation to the environment. In 2019, there was an incident involving an employ- The operation was immediately stopped, the injured experience environmental standards for the assets we are HHRI*OHQVRO:KHQDFDEOHZDVEHLQJODLGDɢQJHU SHUVRQZDVJLYHQɢUVWDLGDQGWDNHQWRKRVSLWDO committed to protecting and for each of our Thanks to our approach to project implemen- on the electrician’s right hand got caught between Since the injury was not very serious, the employee projects irrespective of local regulatory require- tation and the environmental plan, systematic a steel bar and the wall of the basket. was able to come to work the next day. ments. environmental risk management methods have Social been applied in a way that increases value not support Our environmental management program covers only for us but also for our stakeholders. several processes to ensure compliance with internal and external regulatory requirements. The company’s environmental risk management GRI Standards To achieve this, Nobel Oil and its subsidiaries of is an integral part of our management system. compliance table

80 Nobel Oil / Sustainability Report 2019 Nobel Oil / Sustainability Report 2019 81 In carrying out our activities, we continuously analyze changes in existing legislation and regu- Report and reporting lations at the propose stage to identify environ- process mental risks and opportunities, take them into 25% 50% account in the process of project implementa- Pśͩ˖˔˕˝̽ͩƿĔͩƈƧƋĆĴêƓĔčͩĔŐĔĆƟƋĹĆͩŐťêčĔƋƓͩ śťƟĴĔƋͩƈƋťŊĔĆƟͩƿĔͩĆêƋƋĹĔčͩťƧƟͩĹśͩƟĴĔͩ tion and manage them through regular monitor- ƟťͩƋĔƈŐêĆĔͩƓťřĔͩčĹĔƓĔŐ͒ƈťƿĔƋĔčͩťśĔƓ̼ͩ ƋĔƈťƋƟĹśĭͩǅĔêƋͩƿêƓͩƟĴĔͩĆťśƓƟƋƧĆƟĹťśͩťĬͩ ing. In addition, our HSE team conducts regular ¶êōĹśĭͩĹśƟťͩêĆĆťƧśƟͩƟĴêƟͩĔřƈŐťǅĔĔƓͩƧƓĔͩ êͩśĔƿͩťĬĬĹĆĔͩƿĹƟĴͩêͩƟƋêśƓƈêƋĔśƟͩƋťťĬͩ About ƟĴĔƓĔͩƾĔĴĹĆŐĔƓͩĹśͩƈƋťŊĔĆƟͩťƈĔƋêƟĹťśƓͩťśͩêͩ ĬťƋͩťƧƋͩDŐĔśƓťŐͩƓƧąƓĹčĹêƋǅ̼ͩ©ĹśĆĔͩƟĴĔͩ Nobel Oil Group monitoring to assess the state of the environ- čêĹŐǅͩąêƓĹƓ̽ͩƿĔͩĴêƾĔͩřêśêĭĔčͩƟťͩƋĔčƧĆĔͩ ťĬĬĹĆĔͩĴêƓͩśêƟƧƋêŐͩŐĹĭĴƟ̽ͩĹƟͩĬĔĔŐƓͩƈŐĔêƓêśƟͩ ment at production sites. ĴêƋřĬƧŐͩĔřĹƓƓĹťśƓͩêśčͩčĹƓĆĴêƋĭĔƓͩƟťͩ ƟťͩƿťƋōͩĹśͩĹƟͩêśčͩƟĴĹƓ̽ͩĹśͩĹƟƓͩƟƧƋś̽ͩĴêƓͩêͩ ƟĴĔͩĔśƾĹƋťśřĔśƟ̼ͩ¶ĴĹƓͩřêĆĴĹśĔƋǅͩśťƿͩ ƈťƓĹƟĹƾĔͩĔĬĬĔĆƟͩťśͩĴƧřêśͩĴĔêŐƟĴ̼ͩŐƓť̽ͩ In 2019, a new environmental management plan ĆťśƓƧřĔƓͩŐĔƓƓͩĬƧĔŐ̽ͩťĹŐ̽ͩĬĹŐƟĔƋƓ̽ͩƋêčĹêƟťƋͩ ƟĴĔͩĔǄĆĔŐŐĔśƟͩƟĴĔƋřêŐͩĆťśčƧĆƟĹƾĹƟǅͩťĬͩƟĴĔͩ Corporate was developed and approved by our subsidiary ĬŐƧĹčͩêśčͩťƟĴĔƋͩƈƋťčƧĆƟƓͩƋĔƊƧĹƋĔčͩĬťƋͩ ĭŐêƓƓͩƓƟƋƧĆƟƧƋĔͩĔśêąŐĔƓͩƧƓͩƟťͩĆťśƓƧřĔͩ governance Prokon. It sets out environmental procedures for ĹśƟĔƋśêŐͩĆťřąƧƓƟĹťśͩĔśĭĹśĔƓ̼ ŐĔƓƓͩĔśĔƋĭǅͩĬťƋͩĴĔêƟĹśĭͩêśčͩŐĹĭĴƟĹśĭͩêśč̽ͩ ƟĴƧƓͩƋĔčƧĆĔͩĴêƋřĬƧŐͩĔřĹƓƓĹťśƓ̼ all stages of the project from site preparation to the operation of all units of the process. The objective of this plan is to help Prokon and its Ethics and compliance contractors and subcontractors to comply with environmental requirements at all stages of the project. Approach to sustainable Carbon review development As a responsible business, we set ourselves LQWKHɢHOGLVXVXDOO\PHDVXUHGDQGFRQWUROOHG

various goals to reduce energy consumption in by our customers. However, we are able to create Interaction with RXURɥFHVDQGRSHUDWLQJVLWHV2XUGLUHFWHQHUJ\ added value by understanding what we can do to stakeholders Climate action consumption is mainly associated with electricity, reduce our impacts. For this reason, we assess en- natural gas and fuel. HUJ\FRQVXPSWLRQIRUPRVWRIRXUUHQWHGRɥFHV Nobel Oil supports the climate action and the Paris From this standpoint, one of the top priorities for using the per-person ratio. The inclusion of such As a service provider, we are unable to measure average parameters in our carbon inventory helps Labor Agreement on Climate Change, which aims to limit the company is to provide innovative technology relations global warming to below 2 degrees Celsius. We under- solutions that will help manage climate risks. This, WKHDFWXDOHQHUJ\FRQVXPSWLRQLQUHQWHGRɥFHV XVWRGHɢQHUHVHUYHDQGFRQVXPSWLRQPDQDJH- stand that responsibility for achieving this goal rests in our opinion, enhances our own sustainability DQGɢHOGRSHUDWLRQVEHFDXVHHQHUJ\FRQVXPSWLRQ ment measures. not only on the state but also on the private sector and and the sustainability of our customers. Health, civil society. For this reason, we always strive to align Safety our activities and initiatives with sustainable devel- We also recognize that we must support the use of ťřƈêśǅ͟ƓͩĭƋĔĔśĴťƧƓĔͩĭêƓͩĔřĹƓƓĹťśƓ̼ͩ$ĹƋĔĆƟͩĭƋĔĔśĴťƧƓĔͩĭêƓͩĔřĹƓƓĹťśƓͩ͌ƋĔêͩ˕͍ͩêśčͩĹśčĹƋĔĆƟͩ and Environment opment goals in order to be able to contribute to this DOWHUQDWLYHHQHUJ\DQGHQHUJ\HɥFLHQWV\VWHPV ĭƋĔĔśĴťƧƓĔͩĭêƓͩĔřĹƓƓĹťśƓͩ͌ƋĔêͩ˖͍̼ͩ¶ĴĔͩƧśĹƟͩťĬͩřĔêƓƧƋĔͩƧƓĔčͩĹśͩƟĴĔͩĭƋêƈĴͩĹƓͩêͩřĔƟƋĹĆͩƟťśͩťĬͩ direction. WRUHGXFHWKHKDUPIXOHɤHFWVRIFOLPDWHFKDQJH ĆêƋąťśͩčĹťǄĹčĔͩĔƊƧĹƾêŐĔśƟ̼ͩ͌Ɵťśͩ{˖͒ĔƊ̼͍ To do this, in addition to operational action, we ˕˚˔˖̽˗˚ Quality As an engineering, procurement and construction must also pay attention to ways of reducing management contractor, we understand our responsibility for adverse impacts on the environment. In order to achieving sustainable development goals. Our capacity contribute to the reduction of the total volume of ˝˚̽˜˜ to address environmental impact problems through carbon dioxide in the atmosphere, we are commit- innovative solutions also helps our customers max- ted to reduce our carbon emissions by increasing ˛˙̽˜ Procurement experience LPL]HWKHHɥFLHQF\RIWKHLURSHUDWLRQVE\UHGXFLQJ WKHHɥFLHQF\RIRXURSHUDWLRQV ˚˘̽˜ environmental impacts. ˙˝̽˖ ˘˝̽˖

Social Measures to minimize greenhouse gas emissions from our sites support

Area 1 Minimizing harmful emissions and protecting the gas emissions come from the energy and fuel con- population and the environment are one of Nobel sumption, one of our main goals is to take mea- Area 2 Oil’s top priorities. Since most of the greenhouse sures to save energy and switch to cleaner fuel. ˖˔˕˛ ˖˔˕˜ ˖˔˕˝ GRI Standards compliance table

82 Nobel Oil / Sustainability Report 2019 Nobel Oil / Sustainability Report 2019 83 Energy consumption TYPES OF WASTE AND WAYS OF HANDLING Report 2017 2018 2019 and reporting ťƋƋĔĆƟͩ ÕêƓƟĔͩ CĔêƟƧƋĔƓͩťĬͩ dêƓƟͩ process ƓĔĭƋĔĭêƟĹťśͩ Electricity, thousand kilowatt/hour 93 2474 2963 čĔǛśĹƟĹťśͩêśčͩ ƈƋťĆĔƓƓĹśĭͩ ƟƋêśƓƈťƋƟêƟĹťśͩ ĆŐêƓƓĹǛĆêƟĹťś êśčͩƓƟťƋêĭĔ êśčͩƟĔřƈťƋêƋǅͩ êśčͩƧƓĔͩƋťƧƟĔƓ Fuel, ton: ƓƟťƋêĭĔͩƓĹƟĔ About petrol 11,3 22 21,8 Nobel Oil Group

diesel 8,05 8,6 6143 As is evident from the diagram, the company special labels stating the composition, hazard has two main types of waste: hazardous and characteristics, the risk phrase (R phrase) and Corporate non-hazardous. Most of the waste belongs is ADB safety (S phrase) guidelines of the relevant governance non-hazardous and its total amount varies European directive. R phrases indicate specific Water consumption from year to year depending on project scope. risks of hazardous substances and preparations, while S phrases provide precautions to be We understand that pollution and mismanagement Also, our capacity to regulate and report on water When handling hazardous waste, contractors and followed when using and handling hazardous Ethics and of water resources can have a direct negative FRQVXPSWLRQGHSHQGVRQWKHORFDWLRQRIRXURɥFHV subcontractors supply waste containers with substances and preparations. compliance impact on our organization, as well as communities EHFDXVHZKHQZHUHQWDQRɥFHZHGRQRWSD\DQG and the environment. PDQDJHZDWHUELOOVGLUHFWO\ZKLFKPDNHVLWGLɥFXOW for us to track consumption savings. This being the Approach Our subsidiaries have developed all necessary case, we calculate the per-person ratio of water con- Total amount of waste5, thousand m3 to sustainable measures to ensure effective management of sumption. development water resources and eliminate potential negative ˝̽˛ impacts on them. Taking into account the nature ÕêƟĔƋͩĆťśƓƧřƈƟĹťś4̽ͩthousand tons ˕̽˔˖ and location of our projects, these measures are Interaction with carried out in areas exposed to the risk of pollu- ˕˔̽˛ stakeholders tion and inefficient use of water resources. ˘̽˖ Rational water consumption is an integral part of our approach to the environment. We urge our Labor ˔̽˔˖˕ staff to use water efficiently both for project relations

purposes and for day-to-day needs. KêǏêƋčťƧƓ Non- KêǏêƋčťƧƓ Non- ĴêǏêƋčťƧƓ ĴêǏêƋčťƧƓ ˔̽˛˛ ˔̽˝˚ Water consumption data covers our stationary ˖˔˕˜ ˖˔˕˝ Health, facilities and excludes field operations because Safety ˖˔˕˛ ˖˔˕˜ ˖˔˕˝ 5The sharp decline compared to 2018 is due to the introduction of the “Rules for handling construction waste” at Prokon. and Environment the use of water in the field is usually measured and controlled by our customers. 4 The increase is due to growth in the scope of operations

Quality management Waste management Procurement We take a responsible approach to the issue of prepared new waste passports. experience waste by following safety guidelines and rules, and Biodiversity applying measures of environmental control. A new “Construction Waste Management Procedure” has been developed for contractors and subcontrac- 2XURɥFHVDUHORFDWHGLQFLWLHVQRWLQSURWHFWHGDUHDV As a responsible company, we are very serious In 2019, we continued a search for new opportuni- tors by Prokon, our construction subsidiary which RUSODFHVRIVLJQLɢFDQWLPSRUWDQFHLQWHUPVRIELR- about the areas that can be potentially impact- Social ties to reduce the direct consumption of resources generates the biggest amount of waste. The proce- GLYHUVLW\7KHSURMHFWRZQHURSHUDWLQJLQWKHɢHOGLV ed by our operations, limited as they may be. support and the waste we generate. The transition to the dure sets out waste management rules for con- UHVSRQVLEOHIRUPDQDJLQJDFWLYLWLHVWKDWFRXOGDɤHFW Our company is working on solutions to assess maximum possible use of waste is one of the com- tractors and subcontractors during the pre-project biodiversity of the region and for identifying any bio- potential damage and minimize the impacts, and SDQ\ʈVSULRULWLHV7RHQVXUHHɤHFWLYHZDVWHPDQ- and project phases and describes waste properties, diversity issues that need to be addressed under the applying appropriate mechanisms to maximize GRI Standards agement, our Glensol and Prokon subsidiaries have processing and storage requirements. contract with Nobel Oil . their use. compliance table

84 Nobel Oil / Sustainability Report 2019 Nobel Oil / Sustainability Report 2019 85 Nobel Oil / Sustainability Report 2019

Quality management

ISO 9001:2015 100% 4/5 PśƟĔƋśêƟĹťśêŐͩƓƟêśčêƋčͩ ƧƓƟťřĔƋƓͩĆťřƈŐĔƟĔčͩ ¡ĔƓƧŐƟͩťĬͩĆƧƓƟťřĔƋͩ êƈƈŐĹĔč ƓêƟĹƓĬêĆƟĹťśͩƓƧƋƾĔǅƓ ƓêƟĹƓĬêĆƟĹťśͩƓƧƋƾĔǅͩ ͌ƈťĹśƟƓ͍

86 Nobel Oil / &;&21ȭ.30.ė&+-&66ȭ3)&-*8&'&9 87 Quality management system Our approach Report and reporting process Nobel Oil continuously works to improve the The assessment of the effectiveness of the Our subsidiary Glensol aims to continuously Quality management is based on two components: quality of its services and enhance the reli- quality management system is based on inter- LPSURYHWKHHɤHFWLYHQHVVRILWVTXDOLW\PDQ- quality assurance and quality improvement. For this ability of the quality management system. Our nal and external audits, the evaluation of the agement system by pursuing its strategic goals, reason, we always attach special importance to the About Glensol subsidiary has a quality assurance level of satisfaction of all customer groups, as DVZHOODVWKHJRDOVDQGREMHFWLYHVLQWKHɢHOGRI development of the following components within Nobel Oil Group system that meets the requirements of the well as the analysis of the results of our inter- quality assurance. the “Quality Management System”. international standard ISO 9001: 2015. This sys- action with consumers. tem is aimed at providing high quality services 1RQFRPSOLDQFHUHSRUWLQJ 'RFXPHQWPDQDJHPHQWV\VWHP 0DQDJHPHQWRIFKDQJHV\VWHP to achieve results that meet the needs of our At present, our Glensol subsidiary plans to start V\VWHP Corporate customers. the production of spare parts and assembly of governance equipment in Azerbaijan. For this reason, we are trying to align the existing Quality Assurance (ɤHFWLYHGRFXPHQWPDQDJHPHQW Our quality management system is is part of the quality management designed to identify and eliminate Our Management of Change (MoC) System with the requirements of API Q1 and API system in our company and is a actual and potential cases of non- process is intended to manage the Ethics and process that forms the basis of compliance. Our company operates Q2 standards. new risks associated with changes to excellence. All processes in our a process to identify, document, compliance the operational plan. The MoC process company are documented and analyze cases of non-compliance requires that all operational and designed in accordance with the and manage corrective action. Cases To do this, we have analyzed the shortcomings process changes be analyzed, planned established document hierarchy. of non-compliance arising from and approved before implementation of the existing system of compliance with ISO All documents are consistently and our products and management in order to reduce the likelihood of HɥFLHQWO\XSGDWHGGLVWULEXWHG processes are investigated and Approach 9001:2015 requirements using the results of the service disruption or new risks. tracked and, if necessary, withdrawn measures are taken to prevent them to sustainable audits conducted by qualified and certified in- or replaced. from happening again. development ternal auditors, as well as external independent audits, and evaluated our compliance with the requirements of API Q1 and Q2 standards. We Interaction with are working to eliminate all the gaps identified stakeholders to ensure compliance with the three standards. Customer satisfaction surveys Labor relations Our Glensol subsidiary conducts regular customer By keeping such a register, we provide our clients QUALITY MANAGEMENT SYSTEM VDWLVIDFWLRQVXUYH\VWRLQFUHDVHWKHHɥFLHQF\RIRXU with a summary of the company’s performance and business and maximize customer satisfaction. With its quality. We are currently working to improve the this aim, the company keeps a register of all opinions, system to make it more convenient for customers Health, including complaints and positive feedback. and ourselves. Safety ,QWHUQDO and Environment DXGLW RESULTS OF CUSTOMER SATISFACTION SURVEY 5HYLHZ *RDOVDQG RIPDQDJHPHQW Quality LQGLFDWRUV PHHWLQJV &DWHJRU\ management

Results of customer satisfaction survey (points) 4

Procurement &RPPXQLFDWLRQ $FWLRQ Customers completing the survey (%) 100% experience FRQVXOWDWLRQVDQG SODQ HQJDJHPHQW

Social &RQWLQXRXV support LPSURYHPHQW ,QWHJUDWHG+6( PDQDJHPHQW

GRI Standards compliance table

88 Nobel Oil / &;&21ȭ.30.ė&+-&66ȭ3)&-*8&'&9 Nobel Oil / Sustainability Report 2019 89 Nobel Oil / Sustainability Report 2019

Procurement

90 Nobel Oil / Sustainability Report 2019 91 Sustainable project supply Subcontractor Report and reporting chain management and supplier process

Nobel Oil attaches great importance to estab- Azerbaijan dated 24 June 2011 and a number of pre-qualification About lishing mutually beneficial relationships with other internal procedures, including those on Nobel Oil Group suppliers of goods and services. We try to act commercial control and procurement. An agree- impartially and correctly and take into account ment is awarded to the winner of the tender and the interests of all parties. For this reason, we further regulation of relations between the two ensure the transparency and competitiveness of parties is carried out based on this agreement. Corporate the supply chain and take appropriate action to Before embarking on a project, we review its spe- This helps Nobel Oil to ensure that suppliers governance FLɢFSDUDPHWHUVDQGREMHFWLYHVDQGVHOHFWRSWLPDO comply with its internal rules and procedures to set high standards for ourselves and our suppli- In 2019, Nobel Oil continued to work on the partnerships consistent with our own goals and avoid potential corruption and fraud risks. In the ers. To ensure that our agreements with suppli- creation of an e-procurement system to develop WKHHɤRUWVRIRXUFXVWRPHUV event of suspicious transactions and violations, ers are concluded in a mutually respectful, fair the e-procurement process within the corpo- the company may institute regular inspections of Ethics and and efficient manner, we continuously improve rate office. We believe that this platform will be At the start of their relationship with the company, the supplier. compliance our operating methods and relevant internal applied to all companies in the group and, as a VXSSOLHUVXQGHUJRDSUHTXDOLɢFDWLRQSURFHGXUH procedures. Working with suppliers, we strive result, will increase internal productivity. Our This structured and comprehensive assessment -XVWDVLQLWLDOTXDOLɢFDWLRQSRVWSURMHFWUHYLHZLV to enhance the efficiency of our supply chain company has taken important steps to digitize helps us to identify potential risks or threats a highly important. At the end of each project, we management, which is a part of our commitment internal documents using SAP and Opentext Approach subcontractor or supplier may pose to Nobel Oil’s analyze the results of our performance together to sustainable to sustainable development. software in its procurement system. The pro- operations or customer projects. The procedure with suppliers and subcontractors. A compre- development grams envisage creation and approval of internal applied by the company sets out a sequence of hensive supplier assessment is conducted on the purchase requests, purchase orders and call offs. actions to check potential suppliers and provides a basis of our database, which contains information As a result of this, transparency and accountabil- detailed description of each stage of the process. about suppliers, their obligations and track record. The introduction of this procedure has estab- Such an analysis allows us the opportunity to im- Interaction with ity in the procurement chain are fully ensured. stakeholders Our company has taken important OLVKHGDXQLɢHGDSSURDFKDFURVVWKHHQWLUH*URXS prove our relationship with suppliers and subcon- Next year, we plan to digitize other procurement steps to digitize internal documents by and enhanced its positive impact on the business. tractors and update the list of our partners so that procedures using this and other software tools. applying SAP and Opentext software each supply chain solution we develop for a new programs to its procurement system. The The procedure is utilized only for suppliers invited project is better than the previous one. As a responsible company, we are fully aware that Labor programs envisage creation and approval to participate in a tender or those submitting bids. by supplying products and services, we contrib- relations of internal purchase requests, purchase The list of suppliers available to the company does Based on the results of our assessment, suppliers XWHWRWKHIDFWRUVWKDWPD\DɤHFWVRFLHW\DQG ťƋčĔƋƓͩêśčͩĆêŐŐ͒ťǕƓ̼ not guarantee the performance of a certain scope not complying with our corporate requirements the environment. For this reason, one of our top or the awarding of a contract because contract are not allowed to submit their bids. If a supplier is priorities is to maximize our positive economic and award is based on a competitive bidding process unable to provide services and materials at the ex- Health, social contribution and minimize our impact on the described in the company’s procurement proce- pected level and such instances occur for reasons Safety and Environment Depending on the nature of activity, we apply environment. We help engineers and designers to dure. within its control, such a supplier is transferred a supplier management system which includes select more reliable building materials, equipment into the quarantine list and the provision of ser- several procedures regulating supplier partici- and services for our customers’ projects consider- Our comprehensive security checks involve the vices and materials by it is suspended until such examination of suppliers on the basis of internal reasons are eliminated and appropriate explana- pation and selection, and our subsequent work ing budget constraints. We also perform a sustain- Quality and external questionnaires sent by procurement tions provided. with them. The selection of a supplier of goods, ability analysis on the basis of long-term agree- management PDQDJHUVEHIRUHWKHTXDOLɢFDWLRQRUDWWKHELG- work and services is regulated by the requirements for the provision of as technology, services, ding stage. All information collected during such Suppliers not resolving their problems related ments of the Customs Code of the Republic of stationery and interior items. an assessment is stored in ethics and compliance to low productivity and committing violations at documentation and updated every six months. the stage of bidding and contract execution are Procurement Depending on the tender, if further examination moved into the category of banned suppliers, experience LVUHTXLUHGWKHFRPSDQ\ʈVOHJDOɢQDQFHDQG+6( which rules out their participation in any Nobel Oil STAGES OF THE PROCUREMEENT PROCESS teams may also be involved in the process if nec- Group projects. This approach also applies to sup- essary. pliers not passing a comprehensive security check. ŐêśśĹśĭͩ ¡ĔƓĔƋƾĔͩ ŐêśśĹśĭͩťĬͩ Supplier Supplier dĹêąĹŐĹƟǅͩ Social ťĬͩƈƋťčƧĆƟĹťśͩ řêśêĭĔřĔśƟ Control čĔřêśč supply ƊƧêŐĹǛĆêƟĹťś ƓĔŐĔĆƟĹťś řêśêĭĔřĔśƟ In addition, one of our key approaches to the support VXSSOLHUTXDOLɢFDWLRQSURFHVVLVWRLQFOXGHWKH company’s anti-bribery and corruption regulations and the Audit Law article into the contract with the supplier. GRI Standards compliance table

92 Nobel Oil / Sustainability Report 2019 Nobel Oil / Sustainability Report 2019 93 Report Supporting supplier diversity and reporting process

As one of the biggest buyers in the country, we supplier base and obtain the best commercial purchase a large number of goods, works and proposal without compromising the quality and services every year and engage with a large reliability of the products, components and ser- About number of businesses. Nobel Oil is fully aware vices we buy. We look for suppliers demonstrat- Nobel Oil Group of the importance of building and maintaining a ing commitment to strong values and business quality and competitive supply chain. We play an conduct and acting within the framework of law important part in developing local suppliers in and ethical standards. the countries of our operation, thus contribut- Corporate governance ing to their economic development both directly The organizational changes introduced to the and indirectly. The company’s procurement ac- company’s supply chain in 2019 did not bring about tivities help our suppliers maintain and rein- VLJQLɢFDQWLQQRYDWLRQV6XSSOLHUVDQGVXEFRQ- force their financial stability, and create jobs. tractors are still expected to provide materials, Ethics and HQJLQHHULQJHTXLSPHQWɢQLVKHGSURGXFWVWHFKQL- compliance Nobel Oil strives to build strong relationships cal and construction services for our projects. The with suppliers which increase the value of all main suppliers in the company’s supply chain can

our services. We always seek to optimize our be divided into the following categories: Approach to sustainable development

1REHO2LOVXSSO\FKDLQ *OHQVROVXSSO\FKDLQ 3URNRQVXSSO\FKDLQ Interaction with Consulting; Raw materials and materials; Construction services; stakeholders Banking and insurance; Logistics and transportation; Industrial equipment and machinery; Information Technology; Industrial equipment and machinery; Raw materials and materials; Hotels; Electrical equipment; Electrical equipment; 2ɥFHVXSSOLHV Rental of machinery and equipment; Rental of machinery and equipment; Training; Personal Protective Equipment; Personal Protective Equipment; Travel Transportation Transportation Labor relations

Health, Safety SHARE OF LOCAL SUPPLIERS IN NOBEL OIL AND SUBSIDIARIES and Environment

Quality management

˙̼˖ ˕˘̼˕

4 ˕˛ ˛̼˖ ˗˔ Procurement experience

˝˚ ˜˗ ˝˖̼˜ ˛˔ ˝˘̼˜ ˜˙̼˝ Social support

˖˔˕˜ ˖˔˕˝ ˖˔˕˜ ˖˔˕˝ ˖˔˕˜ ˖˔˕˝

Local Foreign Local Foreign Local Foreign GRI Standards compliance table

94 Nobel Oil / Sustainability Report 2019 Nobel Oil / Sustainability Report 2019 95 Nobel Oil / Sustainability Report 2019

Social support

3 22 50< ƋťŊĔĆƟƓͩ Internship ¶ƋêĹśĹśĭƓͩĬťƋͩ implemented ƈƋťĭƋêřƓ ƈĔƋƓťśƓͩƿĹƟĴͩ čĹƓêąĹŐĹƟĹĔƓ

97 Project to increase employment Supporting young people with Report and reporting opportunities for persons with disabilities initiative process

Nobel Oil always endeavors to create a working In 2019, Nobel Oil participated in a job fair to support disabilities About environment in which persons with disabilities young people with disabilities. During the event, the Nobel Oil Group can show their strengths. For this purpose, we company’s representatives acquainted young can- have provided more than 90 people from vul- didates with the company’s activities and informed nerable groups with jobs. We expect to recruit them about available vacancies. At the next stage, we more through the above-mentioned job fairs. received dozens of applications for job from students Corporate and graduates. governance

Ethics and compliance

Approach to sustainable development

Interaction with stakeholders

Labor relations Nobel Oil has contributed to the implementation of a project in Baku to increase employment opportunities One of our strategic goals is to for persons with disabilities. The project was fund- contribute to the development Health, ed by BP and partners and implemented by British and socioeconomic sustainability Safety and Environment Council. of the regions in which we operate through social programs As part of the project, Nobel Oil provided professional and charity. As a responsible training on “customer service“. The objective of the company with a strong focus on Quality project was to facilitate social integration of persons corporate social responsibility, management with disabilities. More than 50 persons with disabil- we always search for ways to ities attended the two-day training, which covered contribute to the countries of four groups and lasted four hours. our operations. In line with our Procurement corporate social responsibility, experience Also within the project framework, we supported Nobel Oil continuously more than 20 open interviews to improve interview- supports local communities by Summer internship ing skills of people with disabilities in 2018 and 2019. implementing programs and To contribute to the continuity of measures in this In order to support the student community, No- the opportunity to work in various departments ƈƋťŊĔĆƟƓͩĹśͩƟĴĔͩǛĔŐčƓͩťĬͩĆƧŐƟƧƋĔ̽ͩ Social direction, Nobel Oil plans to participate in a job fair to support sport and education. bel Oil participated in four job fairs in 2019 and for two months. By involving students from dif- be organized by British Council in 2020. successfully implemented a summer internship ferent regions in the summer internship program, program. During the summer internship program, Nobel Oil Group provided them with the opportu- more than 1,500 students applied to the compa- nity to demonstrate their skills in a real working ny. Following interviews, 22 students were given environment. GRI Standards compliance table

98 Nobel Oil / Sustainability Report 2019 Nobel Oil / Sustainability Report 2019 99 *5,VWDQGDUGDQGH[SODQDWLRQ Note 6HFWLRQRIWKHUHSRUW *5,VWDQGDUGDQGH[SODQDWLRQ Note 6HFWLRQRIWKHUHSRUW Report and reporting process *5,*HQHUDOGLVFORVXUHVʃ2UJDQL]DWLRQDOSURɢOH 102-20. Executive-level responsibility for econom- Board of Directors ic, environmental and social topics Committees of the Board of Directors

102-1. Company name Report and reporting process 102-21. Consulting stakeholders on economic, Principles of interaction with environmental and social topics stakeholders About Nobel Oil Group 102-2. Activities, brands, products and services Creating business value 102-22. Composition of the highest governance Board of Directors body and its committees Committees of the Board of Directors 102-3. Location of headquarters About Nobel Oil Group 102-23. Chair of the highest governance body Corporate governance structure Corporate 102-4. Location of operations Creating business value governance 102-24. Nominating and selecting the highest Board of Directors governance body 102-5. Ownership and legal form About Nobel Oil Group &RQɣLFWVRILQWHUHVW 3UHYHQWLRQRIFRQɣLFWRILQWHUHVW 102-6. Markets served Creating business value Ethics and 102-26. Role of the highest governance body in compliance Board of Directors setting purpose, value, and strategy 102-7. Scale of the organization Creating business value 102-27. Collective knowledge of highest govern- Board of Directors ance body 102-8. Information on employees and other Labor relations Approach workers 102-28. Evaluating the highest governance body’s to sustainable Board of Directors performance development 102-9. Supply chain Supporting supplier diversity 102-29. Identifying and managing economic, Committees of the Board of Directors HQYLURQPHQWDODQGVRFLDOíPSDFW 6LJQLɢFDQWFKDQJHVWRWKHRUJDQL]DWLRQ Group’s new strategy and its supply chain (ɤHFWLYHQHVVRIULVNPDQDJHPHQWSURFHVV Risks management Interaction with stakeholders Risk management 102-11. Precautionary Principle or approach Our approach to Health, Safety and Envi- Monthly, quarterly and annual re- ronment (HSE) 102-31. Review of economic, environmental, and ports on economic, environmental Hesabat boyu social topics and social issues are submitted to management. 102-12. External initiatives Throughout the report Labor 102-32. Highest governance body’s role in sustain- relations Throughout the report ability reporting 102-13. Membership of associations Throughout the report Board of Directors 102-33. Communicating critical concerns *5,*HQHUDOGLVFORVXUHV6WUDWHJ\ Committees of the Board of Directors Health, 102-34. Nature and total number of critical con- 3ULQFLSOHVGHɢQLQJWKHFRQWHQWRIWKH Safety Opening remarks by the Chief Executive cerns report and Environment 102-14. Statement from senior decision-maker 2ɥFHU 102-35. Remuneration policies Remuneration and motivation 3ULQFLSOHVGHɢQLQJWKHFRQWHQWRIWKH 102-15. Key impacts, risks and opportunities report Risks management 102-36. Process for determining remuneration Remuneration and motivation Quality management

*5,*HQHUDOGLVFORVXUHVʃ(WKLFVDQGLQWHJULW\ *5,*HQHUDOGLVFORVXUHVʃ6WDNHKROGHUHQJDJHPHQW

102-16. Values, principles, standards and norms of Vision, Mission and Values; behavior 102-40. List of stakeholders groups Stakeholders groups Procurement experience 102-17. Mechanisms for advice and concerns about Rules of business ethics and conduct; ethics Anti-corruption 102-41. Collective bargaining agreements Approach to human resources

Principles of interaction with stake- *5,*HQHUDOGLVFORVXUHVʃ*RYHUQDQFH 102-42. Identifying and selecting stakeholders holders Social support 102-18. Governance structure Corporate governance system 102-43. Approach to stakeholder engagement Forms of interaction and topics discussed

102-19. Delegating authority Committees of the Board of Directors 102-44. Key topics and concerns raised Forms of interaction and topics discussed GRI Standards compliance table GRI Standards compliance GRI Standards compliance table

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102-45. Entities included in the consolidated 203-1. Infrastructure investments and services Structure of assets Social support ɢQDQFLDOVWDWHPHQWV supported About 'HɢQLQJUHSRUWFRQWHQWDQGWRSLFERXQG- 3ULQFLSOHVGHɢQLQJWKHFRQWHQWRIWKH 6LJQLɢFDQWLQGLUHFWHFRQRPLFLPSDFWV Social support Nobel Oil Group aries report

102-47. List of material topics List of important topics *5,$QWLFRUUXSWLRQ

Anti-corruption Corporate 3ULQFLSOHVGHɢQLQJWKHFRQWHQWRIWKH 205-1. Operations assessed for risks related to 102-48. Restatements of information 6XEFRQWUDFWRUDQGVXSSOLHUSUHTXDOLɢ- governance report corruption cation 3ULQFLSOHVGHɢQLQJWKHFRQWHQWRIWKH 102-49. Changes in reporting 205-2. Communication and training about anti- report Anti-corruption corruption policies and procedures

102-50. Reporting period Organization of the reporting process Ethics and &RQɢUPHGLQFLGHQWVRIFRUUXSWLRQDQG No information compliance actions taken 102-51. Date of most recent report Organization of the reporting process *5,$QWLFRPSHWLWLYHEHKDYLRU 102-52. Reporting cycle Organization of the reporting process Approach to sustainable 206-1. Legal actions for anti-competitive behavior, Compliance with anti-trust requirements development 102-53. Contact point for questions regarding the Kamran Maharramov anti-trust and monopoly practices report [email protected]

102-54. Claim of reporting in accordance with the Organization of the reporting process *5,(QHUJ\ GRI Standards Interaction with 302-1. Energy consumption within the stakeholders Carbon review 102-55. GRI content index GRI Standards compliance table organization

102-56. External assurance 302-4. Reduction of energy consumption Our impact on climate change

Labor *5,0DQDJHPHQWDSSURDFK *5,:DWHUDQGHɦXHQWV relations

303-1. Interactions with water as a shared 103-1. Explaination of the material topic and its 3ULQFLSOHVGHɢQLQJWKHFRQWHQWRIWKH Water consumption Boundary report resource 303-2. Management of water discharge-related During the reporting period no Health, 103-2. The management approach and its Throughout the report impacts such incidents occurred Safety components and Environment *5,%LRGLYHUVLW\ 103-3. Evaluation of the management approach Throughout the report

*5,(FRQRPLFSHUIRUPDQFH 304-1. Operational sites owned, leased, managed There are no operational sites of Quality in, or adjacent to, protected areas and areas of Nobel Oil in protected areas or management high biodiversity value outside protected areas areas of high biodiversity value. 201-1. Direct economic value generated and dis- Economic performance tributed 6LJQLɢFDQWLPSDFWVRIDFWLYLWLHVSURGXFWV Biodiversity 'HɢQHGEHQHɢWSODQREOLJDWLRQVDQGRWKHU and services on biodiversity Remuneration and motivation retirement plans Procurement *5,(PLVVLRQV experience During the reporting year, no 201-4. Financial assistance received from the ɢQDQFLDODVVLVWDQFHZDVUHFHLYHG government from the government 305-1. Direct GHG emissions (Scope 1) Carbon review *5,0DUNHWSUHVHQFH 305-2. Energy indirect GHG emissions (Scope 2) Carbon review Social support 202-1. Ratios of standard entry level wage by gen- Remuneration and motivation der compared to local minimum wage 305-5. Reduction in GHG emissions Our impact on climate change 60% of Nobel Oil’s management 202-2. Proportion of senior management hired representatives in Azerbaijan

GRI Standards compliance table GRI Standards compliance from local community 305-6. Emissions of ozone-depleting substances N/A are Azerbaijani citizens. GRI Standards compliance table

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306-2. Waste by type and disposal method Waste management During the reporting period, there 407-1. Operations and suppliers in which the were no operations and suppliers About No such incidents occurred dur- right to freedom of association and collective at risk for limiting the right to 6LJQLɢFDQWVSLOOV Nobel Oil Group ing the reporting period. bargaining may be at risk freedom of association and collective bargaining

306-4. Transport of hazardous waste Waste management *5,&KLOGODERU :DWHUERGLHVDɤHFWHGE\ZDWHUGLVFKDUJH No such incidents occurred dur- Corporate DPGRUUXQRɤ ing the reporting period. governance During the reporting period, no cases of child labor were 2SHUDWLRQVDQGVXSSOLHUVDWVLJQLɢFDQWULVN *5,(QYLURQPHQWDO&RPSOLDQFH registered in any of Nobel Oil’s for incidents of child labor operations or the operations of 307-1. Non-compliance with environmental laws Compliance with environmental its suppliers and contractors. and regulations standards Ethics and *5,)RUFHGRUFRPSXOVRU\ODERU compliance *5,(PSOR\PHQW

2SHUDWLRQVDQGVXSSOLHUVDWVLJQLɢFDQWULVN No such incidents occurred dur- Approach to human resources and its 401-1. New employee hires and employee turnover for incidents of forced and compulsory labor ing the reporting period. management Approach to sustainable %HQHɢWVSURYLGHGWRIXOOWLPHHPSOR\HHV *5,6HFXULW\SUDFWLFHV that are not provided to temporary or part-time Rewarding and motivation system development employees 410-1. Security personnel trained in human rights All new employees receive initial *5,(PSOR\HHDQG0DQDJHUUHODWLRQVKLSV policies or procedures training before they start work. Interaction with stakeholders Detailed information on this is *5,5LJKWVRILQGLJHQRXVSHRSOHV 0LQLPXPQRWLɢFDWLRQSHULRGVIRU provided in last year’s report. We operational changes fully comply with the Labor Code of the Republic of Azerbaijan. 411-1. Incidents of violations involving the rights No such incidents occurred during of indigenous peoples the reporting period. *5,2FFXSDWLRQDOKHDOWKDQGVDIHW\ Labor *5,+XPDQULJKWVDVVHVVPHQW relations 403-1. Workers representation in formal joint man- Committees of the board of directors agement-worker health and safety committees There were no human rights 412-1. Operations that have been subject to hu- breaches during the reporting 403-2. Types of injury and rates of injury, occupa- man rights reviews or impact assessments tional diseases, lost days, and absenteeism, and Damage report period. Health, number of work-related fatalities Safety and Environment 403-3. Workers with high incidence of diseases Occupational safety and health in the *5,/RFDOFRPPXQLWLHV related to their occupation workplace

413-1. Operations with local community *5,7UDLQLQJDQGHGXFDWLRQ engagement, impact assessments and Social support Quality development programs management 404-1. Annual training hours per employee (QVXULQJRIKLJKO\TXDOLɢHGODERUIRUFH *5,6XSSOLHUVRFLDODVVHVVPHQW 404-2. Trainings on employee skills development (QVXULQJRIKLJKO\TXDOLɢHGODERUIRUFH and transition 414-1. New suppliers that were screened using 6XEFRQWUDFWRUDQGVXSSOLHULQLWLDOTXDOLɢ- social criteria cation process Procurement *5,'LYHUVLW\DQGHTXDORSSRUWXQLW\ experience During the reporting period, no 405-1. Diversity of governance bodies and 414-2. Negative social impacts on the supply chain VLJQLɢFDQWQHJDWLYHVRFLDOLPSDFWV Diversity and inclusion employees and actions taken ZHUHIRXQGLQWKHFRPSDQ\ V supply chain. 405-2. Ratio of basic salary and remuneration of Salaries and bonuses in the com- Social women to men pany do not vary by gender. support *5,3XEOLFSROLF\ *5,1RQGLVFULPLQDWLRQ There were no political pay- 406-1. Incidents of discrimination and correction During the reporting period, no 415-1. Political contributions ments to Nobel Oil during the GRI Standards compliance table GRI Standards compliance actions taken such incidents occurred reporting period. GRI Standards compliance table

104 Nobel Oil / Sustainability Report 2019 Nobel Oil / Sustainability Report 2019 105 *5,VWDQGDUGDQGH[SODQDWLRQ Note 6HFWLRQRIWKHUHSRUW

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Work is under way, including envi- 16-1. Assessment of the health and ronmental monitoring. to develop safety impacts of product and service products and services on a regular categories basis.

416-2. Incidents of non-compliance concerning There were no human rights the health and safety impacts of products and violations during the reporting services period.

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418-1. Substantiated complaints concerning There were no human rights vio- breaches of customer privacy and losses of lations during the reporting period. customer data

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419-1. Non-compliance with laws and There were no human rights regulations in the social and violations during the reporting economic area period.

6Global Accountability Initiative GRI Standards compliance table GRI Standards compliance

106 Nobel Oil / Sustainability Report 2019 Sustainability Report 2019