CR objectives and KPIs

Our Corporate Responsibility (CR) objectives and Key Performance Indicators (KPIs) are aligned with the Group’s strategy and objectives. They are set from an understanding of our material issues, against a backdrop of good practice, and are used as a measure of our performance to drive continuous improvement.

CR objectives are reviewed throughout the year by senior management to gauge progress, and are adjusted and updated as necessary. At the end of the year, they are used in assessing Group overall performance and are linked to internal incentives of our people, before being reset for the following year.

How did we do in 2015?

The table below summarises the CR objectives we set in 2015 and the progress we have made against these.

Tick KPI achieved by 2015 year end

Minus KPI partially achieved by 2015 year end

Cross KPI not met by 2015 year end

The Remuneration Committee determined that the Licence to Operate (CR performance) objectives for 2015 were

89%

complete at year end.

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2015 CR objectives Expectations in 2015 Status at end 2015
Health, safety and environment (HSE) integration into business activities (standards and leadership)
1. Group CR Management:      
1.1 Review Group CR Management System (CRMS)
  • Review need for Major Accident Prevention Policy
  • Review policies
  • Review Business Principles and develop external CR document
  • Review CRMS for rationalisation and alignment to business risk management
  • Establish standard Project Delivery Process (PDP) for non-operated JVs
  • Policy and CRMS were improved to include major accident prevention measures
  • CRMS updated and rationalised to reflect changes to the business
  • International Association of Oil & Gas Producers (IOGP) Operating Management System used as the basis for redrafting
  • CRMS aligned with our Operating Standards and Internal Control and Assurance Framework; improved integration with risk management
  • The CR Standard Operating Procedures begun in 2014 completed and integrated into the CRMS
  • PDP for non-operated activities in place and used based on risk
Tick
1.2 Clarify linkage of CRMS with UK and Norway (UKN) Region
  • Support UKN Region on operatorship as requested
  • Improved integration of the UK-Norway Region Management System achieved as a backdrop to application for operatorship in Norway
  • We pre-qualified as an operator in the Norwegian sector in 2015 and subsequently were awarded an operated licence
Tick
1.3 Consistent application of the Cairn Project Delivery Process (CPDP) including CR requirements
  • Development of detailed integrated business plans with assigned project managers and gatekeepers, including critical path and float analysis before the March 2015 Board meeting. Development and maintenance of the CR risk register and actions through each stage of the PDP
  • Senegal drilling project passed all assessment gates and CR issues resolved. Drilling started in October
  • Senegal 3D seismic project passed all assessment gates and CR issues resolved Seismic completed on 23 November
  • Our appraisal drilling campaign offshore Republic of Ireland on track until put on hold
  • Approach in important non-operated assets, including Catcher and Kraken, clarified and implemented
Tick
Behaving responsibly in all our business relationships
2. Contractor management      
2.1 Establish input standards for use of well/drilling management contractors based on health, safety and environment CR Standard Operating Procedures (SOPs)
  • SOPs roll-out
    • clear roles and responsibilities WMC/Cairn
    • develop assurance template for WMC management
  • Revised Crisis Response Team arrangements
  • Roll out relevant performance requirements based on CR SOPs
  • Roll out relevant performance requirements based on anti-bribery and corruption (ABC) procedures
  • Roles and responsibilities clarified in CRMS
  • Input standards made available, based on our SOPs
  • Assurance template in place for seismic and drilling programmes
  • Crisis and emergency response arrangements successfully revised and teams trained
  • Successful integration with our business partner who took the role of well activities delegate
  • Lessons learned captured for future improvement
  • ABC roll-out and refresher training took place in the UK and Senegal
Tick
2.2 Deliver against agreed Leading (proactive measures to prevent incidents and accidents eg training) and Lagging (indicators which record outcomes eg Lost Time Incident Frequency rate) KPIs
  • Development of key subcontractor engagement programme by Well Management Company (WMC) and all engaged by Cairn Senior Leadership Team/WMC
  • Assurance audit programme developed to assess WMC performance and all audits conducted
  • Achieve Lost Time Injury Frequency (LTIF)1 benchmarks
  • Achieve Total Recordable Injury Rate (TRIR) 2 benchmarks
  • Key subcontractors identified and programme of engagement delivered in combination with the well delegate
  • Acceptance and assurance audits were conducted along with ongoing engagement of senior management
  • LTIF and TRIR benchmarks were achieved
Tick
3. HSE/CR communications:      
3.1 Deliver CR content for 2014 Annual Report and website based on revised materiality method and G4 requirements
  • Develop draft Annual Report
  • Develop CR website content
  • Assurance tracker against G4
  • Monitor stakeholder feedback in 2015 on decision not to produce a standalone CR Report 2014
  • For the first time, CR content for the 2014 report developed and completed in line with the G4 core reporting guidelines
  • Website updated with 2014 CR content and on track for 2015 content
  • Assurance tracker against G4 in place
  • No significant feedback on the absence of a standalone CR report but external opinions sought on materiality for first time
Tick
3.2 Develop fit for purpose CR behaviour-based programme
  • Develop and implement low-level office programme during any office moves including indicator for trip hazards
  • Devise criteria for use by WMC to assess behaviour of contractors
  • Expected behaviours included in our revised CRMS Framework of Standards
  • Office programmes updated and completed
  • Senegal contractor behaviours on shore base and offshore encouraged though audits, leadership visits and monthly asset contractor meetings
Tick
3.3 Promote CR leadership
  • HSE messages to be included in all staff meetings including progress against leading KPIs
  • CR covered in all Board, Senior Leadership Team (SLT) and Management Team (MT) meetings in 2015
  • Senior personnel involved in visits to Senegal to talk CR
Tick
  • Staff meetings included CR messages, although updates regarding KPIs were inconsistent
Minus
Behaving responsibly towards society and communities
4. Human rights:      
4.1 Track and engage with Kosmos on the ongoing drilling programme and post completion
  • Utilise gated procedures for stakeholder engagement and human rights to track and align with Kosmos programmes
  • Support Corporate Affairs in responding to queries
  • Closing Summary Report
  • Alignment meetings and calls on CR matters, including local stakeholder engagement and social impact issues such as human rights, continued through 2015
  • Engagement with shareholders maintained via Corporate Affairs and Senior Management
  • Summary Report completed
Tick
5. Stakeholder engagement:      
5.1 Develop a social engagement and investment programme to meet the rising expectation of Senegal stakeholders following discovery
  • Public Consultation and Disclosure Plan (PCDP) in place
  • Identify social investment/capacity-building programme
  • Implement Group/asset-wide system for recording important stakeholder engagements
  • PCDP developed and updated for the seismic and drilling programme
  • The 2014 Corporate Criteria and Guidance for Social Investment implemented in the Social Investment programme
  • Four-element programme developed and a governance mechanism set up
  • Register of stakeholder engagement in place
Tick
5.2 Implement Social Investment Guidelines and programme in Senegal
  • Develop transparent mechanism for any investment allocated by asset (inc. ABC)
  • Implement local and track programmes
  • Social investment programmes tracked for transparency and ABC
  • ABC training delivered in Senegal
Tick
Behaving responsibly towards our people
6. Human resources:      
6.1 HSE induction roll-out
  • New web-based HSE induction to be rolled out to all new and existing staff, consultants and contractors at Cairn
  • All staff received routine induction in line with lessons learned from our 2014 Senegal programme
  • Office inductions given to all new staff in all offices
Tick
  • E-learning package was progressed but not rolled out
Minus
6.2 Improve travel risk assessment and support for travellers across the Group
  • Country and travel risk assessments undertaken and completed for all visits to ‘high-risk’ countries in accordance with travel HSS procedure. Welcome packs to be put in place for all existing countries
  • Major revision of how we assess travel risk completed with streamlined, more efficient mechanism
Tick
  • Further improvements being considered following recent external security incidents in previously ‘low-risk’ locations
Minus
Behaving responsibly towards the environment
7. Climate change      
7.1 Review external developments and update following Intergovernmental Panel on Climate Change, Conference of the Parties (COP 20 in Lima, Peru, Dec 2014)
  • Understand implication for industry and business
  • Outcomes from COP 20 in Lima reviewed early in 2015 and developments tracked
  • Implications arising from COP 21 will be tracked in relation to our activities
Tick
  1. Lost Time Injury Frequency - fatalities and lost day work case incidents per 1 million hours worked.
  2. Total Recordable Injury Rate (TRIR) - fatalities, lost workday cases, restricted workday cases and medical treatment cases per 1 million hours worked.

CR objectives 2016 and beyond

We continued to follow our process to set our 2016 CR objectives in order to maintain alignment with Group Strategy. The process is informed throughout by our CR road maps, which are updated annually to reflect progress made, and to address any changes to international standards, industry best practice or expectations. The process is also shaped by stakeholder engagement, progress made in 2015, the 2015 work programme and the outcomes from the CR materiality assessment process.

How CR objectives are set flowchart

2016 CR objectives and KPIs

Our 2016 Corporate Responsibility (CR) objectives seek to identify high- and medium-priority topics as agreed by our materiality process and the Management and Senior Leadership Teams and Board. The objectives and KPIs below will be used to measure our progress during 2016.

CR objective 2016

Leading objectives

Components

2016 material issues - high, medium, road map

1. CR Management System:
1.1 Review Group CRMS
  1. Complete CRMS roll-out
  2. Streamline materiality process/risk standard operating procedure for use in reporting
  3. Revise policies and Business Principles
  4. Review guidance documents and rationalise. Develop CR knowledge management where appropriate
  • Sustainable project funding
  • Prevention of major accident
  • Prevention of major spills
  • Business ethics
  • Road maps (all)
1.2 Support UKN as required
  1. Support Catcher/Kraken non-ops
  • Non-op JV and international investments
  • Sustainable project funding
  • Road maps (all)
1.3 Review, develop and improve crisis and emergency capabilities
  1. Review security procedures and perform briefing/training to key personnel
  2. Revise Business Continuity Plan
  3. Develop training matrix for Crisis & Emergency Response Team (CERT) members
  4. Perform quarterly CERT Exercises (total four)
  5. Revise emergency arrangements and emergency response planning for next stage of Senegal appraisal
  • Prevention of major accident
  • Prevention of major spills
  • Road maps major accident prevention and security
1.4 Develop initial CR PDP template for development phase activities
  1. Provide extended CR Project Delivery Process (PDP) gate matrix for development phase projects
  • Sustainable project funding
  • Prevention of major accident
  • Prevention of major spills
  • Road maps leadership and occupational health and safety and stakeholder
1.5 Develop CR PDP template for new ventures due diligence and support as required
  1. Provide extended CR PDP matrix for due diligence projects and support
  • Sustainable project funding
  • Prevention of major accident
  • Prevention of major spills
  • Road maps leadership and occupational health and safety and stakeholder
1.6 Complete OSPAR audit
  1. Re-audit CRMS against OSPAR requirements
  • Operating environmental footprint
  • Prevention of major spills
2. Contractor and projects:
2.1 Review risk screening criteria for CR risks in the well management contracting strategy and operating model for future operational activities.
  1. Review existing tender questionnaires and scoring, confirming alignment with latest IOGP guidance
  2. Consider CR implications/risks arising from depressed supplier market, including lessons learned from 2015 3D seismic turnkey
  3. Revise tender and scoring questionnaires
  • Supply chain and contractors
  • Road maps supply chain
  • Sustainable project finding
  • Operational and project performance
2.2 Support finalisation of Senegal 2015 exploration and drilling campaign
  1. Maintain compliance with all regulations and Cairn CRMS requirements including document revisions
  2. Develop close-out report and submit to regulators
  • Supply chain and contractors
  • Operating environmental footprint
2.3 Maintain and continue to develop the company’s CR record and on-time project delivery successes for the next phase of Senegal exploration and appraisal programme on time
  1. Implement PDP for new project and meet gate target dates
  2. Review legislation update mechanism and legislation given the longer appraisal programme
  3. Revise management system documentation
  4. Determine transitioning needs from project to country control
  • Non-op JV and international investments
  • Operating environmental footprint
  • Operational project performance
  • Road maps (all)
2.4 Maintain and continue to develop the company’s CR record and on-time project delivery successes and Republic of Ireland Spanish Point appraisal
  1. Implement PDP for new project and meet gate target dates
  2. Review legislation update mechanism and legislation given the longer appraisal programme
  3. Revise management system documentation
  • Non-op JV and international investments
  • Operating environmental footprint
  • Operational project performance
  • Road maps (all)
3. HSE/CR communications:
3.1 Deliver CR content for external reports and queries
  1. Complete 2015 Annual Report CR content
  2. Complete CR 2015 web pages
  3. Develop materiality mechanism to improve transparency and links with risk procedure
  4. Complete CR input to 2016 half-year report
  5. Complete other data reports IOGP/UN Global Compact/Carbon Disclosure Project/Extractive Industries Transparency Initiative
  6. All initial CR content for 2016 Annual Report developed on track
  • Transparency
  • Sustainable project funding
  • Corporate governance
  • Road maps external reporting
3.2 Review reporting metrics and basis for reporting
  1. Review reporting and data management against IOGP oil and gas industry guidance on voluntary sustainability reporting (2015)
  2. Revise database and CRMS reporting procedure
  3. Develop overall 'value' indicators taking into account latest UK and EU transparency requirements
  • Transparency
  • Business ethics
  • Road maps leadership and external reporting
3.3 Develop Senegal CR communication document
  1. Develop two- to four-page CR communication pack based on value and accounting for local stakeholder engagement and social investment
  • Transparency
  • Road maps leadership and external reporting
4. Human rights and ethics:
4.1 Track compliance with human rights in our Business Principles
  1. Track and engage with Kosmos on the seismic programme in Cap Boujdour
  • Complying with Cairn Business Principles in Cap Boujdour
  • Human rights
  • Road maps human rights
4.2 Review conformance with UN Global Compact, UK Slavery Act 2015 and sustainability goals
  1. Review requirements and integration with supply chain
  2. Revise if appropriate in CRMS guidelines
  • Complying with Cairn Business Principles in Cap Boujdour
  • Human rights
  • Road maps human rights
4.3 Anti-bribery and corruption (ABC)
  1. Revise ABC policies and procedures
  2. Roll out ABC e-learning module to all staff
  • Transparency
  • Business ethics
  • Supply chain and contractors
  • Road maps ABC and transparency
5. Stakeholder engagement, communities and social investments (value creation):
5.1 Continue to deliver transparent Social Investment Programme in Senegal
  1. Demonstrate transparent spend as part of Social Investment Programme tracking
  • Transparency
  • Business ethics
  • Political host uncertainty
  • Corporate governance
  • Road maps ABC, Transparency and social investment
5.2 Run a focused engagement programme to gauge perception of Cairn in Senegal
  1. Conduct stakeholder meetings to gauge perception of material issues going forward
  • Road maps stakeholder engagement and transparency
5.3 Develop a performance indicator to track value added to communities through our activities
  1. Determine options for use in annual reporting
  • Transparency
  • Business ethics
  • Road maps leadership and external reporting, transparency and social investment
  • Political host uncertainty
6. Human resources:

6.1 Update People Management Policy Manual (PMP)

  1. Revise PMP standards and procedures
  2. Update Recruitment Guidelines
  • HR objectives
  • Equality and diversity
  • Workforce planning
  • Succession planning
  • Road maps leadership, employees and labour practices

6.2 Induction programme

  1. Refresh and implement improvements to staff induction programme
  2. E-learning roll-out
  • HR objectives
  • Equality and diversity
  • Road maps employees and labour practices

6.3 Improve travel risk assessment and support for travellers across the Group

  1. Implement Travel Protect for Cairn travellers
  2. Ensure risk assessment is implemented for set piece travel and field events (e.g. field trips)
  • Road maps major accident prevention and security

6.4 Health and well-being initiative

  1. Upgrade of kitchen and catering/soundproofing
  • HR objectives
  • Road maps employees and labour practices
7. Climate change:

7.1 Track and understand recent climate change agreements and consider implications for the business and our assets

  1. Review outcome from COP 21 Paris
  2. Review implication of any production acquisition (as required) and Catcher/Kraken
  • Climate change
  • Road maps environment and climate change

CR objective 2016

Lagging indicators

Components

2016 material issues - high, medium, road map

1. Lost Time Injury Frequency (LTIF)

1. No LTIs and score according to LTIF benchmarks

  • Prevention of major accident
  • Supply chain and contractors
2.Total Recordable Injury Rate (TRIR)

2. Less than two TRIs and score according to TRIR benchmarks

  • Prevention of major accident
  • Supply chain and contractors
3. Oil spills

3. No oil spill reaching the environment and score according to spill benchmarks

  • Prevention of major accident
  • Supply chain and contractors