A comprehensive Health, Safety and Environment (HSE) policy governs our efforts to improve our health and safety performance as well as our environmental stewardship. Every ConocoPhillips employee has a duty to comply with the policy, which applies to all company-owned and -operated locations. The policy also requires contractors and suppliers to manage HSE in compliance with our standards.

For example, before starting a venture, in addition to evaluating the sustainability and business risks that we may encounter, we enlist the help of experts in specific areas to research and identify significant risks, including social and environmental concerns, and define how such risks will be managed. During the negotiation phases of a joint-venture project, we outline the risks identified, clearly state our expectations on environmental and social-issue performance, and discuss with potential co-venturers how these concerns should be managed.

Our HSE policy sets the foundation for our companywide HSE programs. We audit our facilities at least once every five years to ensure that they comply with our own policies and standards and applicable regulatory requirements. Large, complex facilities are audited more frequently. Our own corporate HSE audit group performed 41 such compliance and management system audits in 2008, covering roughly a quarter of our assets. Individual sites also performed their own HSE and management system self-assessments.

If any performance gaps are found, the business unit must develop a corrective action plan within 60 days. Our auditors review and approve these plans, and track them to completion.

We use a company-wide annual HSE compliance verification process to audit action items and risk assessments, and to process hazard analyses, incident investigations and similar corrective actions. Each year all operating business managers must certify their compliance with regulatory requirements and company standards, and attest that adequate action plans exist for any identified gaps. The system is designed to guide identified risk issues and HSE-related issues to conclusion.

The corporate HSE audit group also conducts reviews to determine the operational status for selected exploration and production assets that are new to the company’s portfolio. This helps ensure that the assets are commissioned and operated correctly, that the work force has been properly trained, and that effective inspection and maintenance programs are in place.

Beginning in January 2008, an assessment was required for all items identified in audits as lacking conformance with our standards, policies or procedures. A chart connecting each audit finding to the proper section of the HSE management system is now part of every audit report issued. This allows more systematic evaluation to identify the root causes or underlying factors associated with the nonconformance, and the process improves the quality of corrective action plans. This effort is designed to reduce the likelihood of recurring issues. For all issues identified in the assessment, improvements that are consistent with the company HSE management system must be identified to prevent recurrences.

A specific strength of our HSE audit program is the inclusion of guest auditors. Every audit team includes not only members of the permanent corporate HSE auditing staff, but also other experts nominated by their facility. This allows a more thorough evaluation by team members who are aware of current issues and likely weaknesses, and possess keen insights into the programs and procedures being audited. Additionally, the guest auditor process promotes networking and allows for mutually beneficial peer review. In addition to our corporate auditing process, we also conduct self assessments and inspection processes.