5 men in yellow hard hats

Social and economic benefits to local communities

Whether our operations are long or short term, we always seek to create a positive impact and ensure our activities continue to bring benefits after we have left.

We make social and economic contributions through a variety of means, including:

Local hiring

Wherever we establish in-country offices we look to hire from the local population, where possible. Local participation in oil and gas activities is important to communities. In 2015, we have operated offices in Edinburgh, London, Stavanger and Dakar. Our employees are 98% nationals and 2% expatriates. We no longer have offices in Spain or Morocco. Our office in Dakar opened in September 2013. 80% of staff in the office, at the end of 2015, were nationals. A capacity building programme is in place at all our offices.

Managers hired from the local population (%)

See performance data Employees, contractors, diversity and equal opportunity.

Engaging local businesses to support our activities

In all operations we look to maximise local participation in our activities through engaging local businesses. The extent of local participation in our supply chain is dependent on local businesses being able to meet the technical, health, safety and environment (HSE), and commercial requirements of any contract. This is more challenging in areas where oil and gas operations are not well established.

Total proportion of spending on local suppliers (%)

See performance data Supply chain.

Employment generation and training opportunities

Through direct local hiring and the contracting of local businesses, we help to generate employment. We work with local contractors, where feasible, to develop necessary capabilities (see Contractor engagement).

Payment of taxes to host governments

We contribute to the host government through the payment of taxes and duties. These may include corporate income tax, employee national insurance, VAT, withholding tax, customs duties, training allowances, licence rental and entry fees. We disclose our payments to governments (see TransparencyPayment to governments).

Support to educational or capacity-building initiatives

We place particular emphasis on support to education and capacity building, both in our social investment programmes and our charitable giving. Through our charitable giving we have supported projects such as Winning Scotland Foundation and Street League (see Charitable giving). In 2015, we provided a programme of institutional capacity building in Senegal as well as supported educational institutions. We also supported capacity building through training allowances payable through our licence agreements.

Support to community development initiatives

We have an established procedure for developing Social Investment Plans (SIPs) across our operational activities (see Social investment). As part of our SIP in Senegal, we have partnered with The Hunger Project to support their microfinance programme in 10 community clusters in Senegal, as well as sponsoring a nationwide competition for the Great Entrepreneur run by the British Council in Dakar.

Community development funding (Group operated) (£)

  2011 2012 2013 2014 2015
Community development funding (Group operated) (£) 131,500 54,500 41,500 53,500 71,000

Contributions to environmental knowledge

As part of our Environmental and Social Impact Assessments and environmental monitoring and management programmes, we collect data on the environments within which we work. This data is shared with national authorities and forms part of a national resource.

A legacy in India

Our continuing commitment to the communities where we work has a foundation in our approach and success in India. Cairn has been involved in India since 1994. In 2004, the major discoveries of the Mangala, Arshwariya and Bhagyam fields were made in Rajasthan, with production commencing in 2009. Today the Rajasthan fields account for 27% of India’s domestic crude production. In addition to the significant contribution to meeting India’s energy demands, the discovery of these fields had also contributed to growth in Rajasthan. Some notable contributions from Cairn’s time as an operator in Rajasthan included sharing our extensive subsurface knowledge to aid the Rajasthan water authorities to manage the scarce and vital resource, and the development of the Barmer Enterprise Centre, in partnership with the International Finance Corporation (IFC). The Barmer Enterprise Centre continues to contribute to the development and empowerment of the people of the area.

In 2007, Cairn Energy listed Cairn India on the Bombay Stock Exchange. At the time, this was the largest initial public offering (IPO) in Indian corporate history. In 2010, Cairn sold 40% of its holding in Cairn India to Vedanta Resources plc, a global natural resources company. Cairn holds a ~10% investment in Cairn India Limited (CIL) at the end of 2015. Although we no longer have any operational control, we believe Cairn’s legacy of partnership with the communities and local authorities has provided ongoing benefits to both local communities and CIL’s operations.

See performance data Community.

£370,000

of expenditure on education and capacity-building projects in 2015 across the group.

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