FASAM representatives in Peru sign land access compensation agreement
Corporate Responsibility
Talisman’s commitment to corporate responsibility contributes to the creation of long-term value for shareholders.
The Company’s corporate responsibility initiatives are integrated into its day-to-day operations and decision-making processes. Talisman’s approach to corporate responsibility helps the Company manage risks, including maintaining its social license to operate, its employee recruitment and retention efforts and the need for access to capital.
Governance of Talisman’s corporate responsibility program is guided by the Company’s Policy on Business Conduct and Ethics (PBCE) and the Company’s commitment to international standards such as the Universal Declaration of Human Rights (UDHR), and initiatives such as the United Nations Global Compact (UNGC), Extractive Industries Transparency Initiative (EITI) and the Voluntary Principles on Security and Human Rights (Voluntary Principles), as well as the newly constituted HSECR Board Committee.
Talisman’s corporate governance structures allow the Company to move beyond traditional indicators of good governance into industry-leading practices in corporate responsibility.
policies
policy on business conduct and ethics
The Company’s PBCE is a statement of principles to which Talisman is committed. The PBCE is designed to direct all employees, officers and directors of the Company in determining ethical business conduct. The PBCE sets out Talisman’s expectations for business conduct, including: ethical business conduct; personal conduct; employee practices; health, safety and environment; human rights; and community relations. The PBCE is supported by a number of detailed policies and guidelines addressing issues such as accounting procedures, security and anti-corruption.
All employees are required to read the PBCE as a condition of employment and understand how it relates to their business dealings. Breaches of the PBCE are dealt with by senior management, including the application of the Company’s Progressive Discipline Procedure, which is available to all employees via the Company’s internal website.
In 2008, Talisman terminated six employees in Southeast Asia due to breaches of the Company’s PBCE and other internal policies. The violations were found during an internal investigation of procurement irregularities. Additional controls were subsequently implemented to minimize the risk of reoccurrence and employees were trained and advised as needed.
Employees are required to complete a Compliance Certificate certifying observance of the PBCE annually while noting any exceptions. Compliance Certificates are returned directly to the Company’s President and CEO. In January 2009, the Company embedded the annual Compliance Certificate into its Ethics Awareness training course. The training provides employees and contractors the opportunity to review and apply the Company’s expectations for ethical behaviour through the use of scenarios and interactive questions and answers. Upon completion of the training program, the user is now prompted to read, complete and sign a Compliance Certificate indicating that they observed the PBCE throughout the previous year.
The Ethics Awareness training course will also be embedded in the Company’s new employee induction process beginning in 2009.
gift and entertainment policy
In 2008, Talisman developed a formal Gift and Entertainment Policy building upon guidelines already in place. This Policy provides employees, consultants and contractors more explicit direction to minimize the potential for improper influence or conflicts of interest, whether real or perceived, and reinforces the principles of ethical business conduct and personal conduct outlined in the PBCE.
hotline
In 2009, Talisman will expand its Accounting and Auditing Complaints hotline to accept inquiries or complaints regarding any matters under the PBCE or other areas of concern. All employees, contractors and other stakeholders will be encouraged to utilize this third party- operated hotline to report any perceived breach of the PBCE, raise a concern or ask a question.
international initiatives
security and human rights
Talisman’s Security Policy assists the Company in creating a safe work environment for its employees and operations and to promote respect for human rights and advancing best practices with governments, joint venture participants and third parties.
Talisman has incorporated the Voluntary Principles into its PBCE, Security Policy and Security Policy Guidelines since 2004. In 2008, Talisman joined the Voluntary Principles Plenary Group and is currently the only Canadian company participating in this group. The Voluntary Principles were developed by government, business and civil society organizations to guide companies in maintaining the safety and security of their operations within an operating framework that ensures respect for human rights and fundamental freedoms. In 2008, Talisman attended the Plenary Group’s annual session, which focused on governance issues, in-country implementation and engagement efforts.
In addition to supporting the principles of the UDHR, which are explicitly endorsed in the Company’s PBCE, Talisman is also a signatory to the UNGC. Talisman is committed to making the UNGC and its principles part of the strategy, culture and day-to-day operations of the Company. In August 2008, Talisman’s Malaysia subsidiary became a signatory to the UNGC Network Malaysia. Talisman annually includes a Communication on Progress regarding its activities relative to the UNGC’s 10 principles in this Report. For more information, see the Global Reporting Initiative/United Nations Global Compact Index of this Report.
In 2008, Transparency International released a report citing Talisman for above-average transparency and stating that Talisman has “set an example, along with firms from Norway, for the rest of the world to follow”.
transparency
Financial transparency is critical to maintain and enhance the Company’s corporate reputation and stable operating environment. In this regard, Talisman publishes all royalties, taxes and other material payments to all host governments across the Company’s global operations. Please see the Performance Data Tables for more information.
Since Talisman became a signatory to the EITI in 2005, the Company has participated in the development of the EITI policy framework, including the development of a validation process for implementing countries and companies. The EITI is a global coalition that supports improved governance in resource-rich countries through the full publication and verification of company payments and government revenues from oil, gas and mining activities.
risk assessment
Talisman reviews numerous international and domestic investment opportunities and new country entries every year. Prior to any investment decision, Talisman performs technical, economic, commercial, legal, political, regulatory, environmental, security and human rights risk assessments related to the opportunity. Talisman also regularly solicits community, NGO and government feedback on potential risks associated with a project before entering into contractual arrangements or commencing operations. Following investment, Talisman assesses and manages above-ground risks on an ongoing basis through stakeholder engagement and ongoing evaluation of operating performance against its PBCE.
In 2008, Talisman strengthened its integrated risk identification process and management strategies. Through a bottom-up approach, senior management identified the primary risks and the various risk mitigation strategies that have been put in place. The regional and corporate risks identified were then integrated and ranked and the final results were discussed with Talisman’s Board of Directors. Socio-political risks, many of which are discussed in this Report, were ranked as among the most significant faced by Talisman. The Company intends to enhance its monitoring of key risks and increase the frequency of communication regarding risk among senior management and with the Board of Directors.
community investment
Strong and transparent relationships with communities, based on trust and respect, allow the Company to effectively and efficiently carry out operations to the mutual benefit of the Company and its neighbours. Talisman believes community investment plays an important role in improving community relations and generating goodwill with home and host governments. Talisman invested approximately $7.5 million in community initiatives worldwide in 2008. Talisman continued to focus its community investment in areas critical to the Company’s global social, environmental and industry risks, including education and empowerment, health and wellness, environment, arts and culture.
In 2008, Talisman conducted a review of its community investment strategy. The review found the types of organizations supported across the Company varied greatly and, in some cases, did not align with the current community investment guidelines. As a result, Talisman expanded the existing guidelines and created new guidance documents to clarify the Company’s expectations. The guidance documents included a glossary of terms, a ranking matrix and examples of ideal initiatives to help standardize the Company’s approach globally.
