Foundations

Foundations

This section provides an overview of Occidental's Social Responsibility-related governance, policies, reporting and stakeholder engagement process and our integrated approach to Health, Environment and Safety (HES) risk management.

Occidental's corporate governance and policies address the structure and operation of the Board of Directors, including director independence, tenure, Board and Committee performance assessment and succession planning. The Environmental, Health and Safety Committee of the Board of Directors provides oversight on health, environmental, climate change and safety issues. The Board supports Occidental's efforts to enhance energy efficiency of operations, control emissions of greenhouse gasses (GHGs) and air pollutants, and to engage and educate stockholders and other public parties through voluntary reporting on Occidental's environmental stewardship.

Comprehensive Health, Environment and Safety (HES) policies, standards and procedures address public and occupational health and safety, industrial hygiene, environmental protection and HES risk management into the company's operations.

Occidental's policy with respect to political contributions and lobbying activities is outlined in the Code of Business Conduct. In response to investor interest, Occidental revised its online disclosure on these activities to include a description of the oversight procedures in place to ensure that Occidental's participation in the political arena is in the best interest of the company and its stockholders. At the direction of the Board of Directors, the Government Affairs Committee reviews, assesses and approves Occidental's membership in any trade association that requires or would require annual dues payments in excess of $50,000. For additional information, please visit the Political Contributions and Lobbying page in the Investor Relations section of our website.

To further promote effective governance practices and transparency in our operations, Occidental strives to work with partners, suppliers and contractors who share our commitment to ethical business practices. Occidental routinely evaluates suppliers and contractors to ensure they meet the company's operating standards. As part of the Compliance Program, we convey our expectation that they comply with the company's policies, including our Code and Human Rights Policy. Our international procurement contracts routinely include provisions with respect to the observance of human rights, ethical business conduct and other relevant Occidental policies. In the case of agreements for private security services, Occidental stipulates compliance with universally recognized rights and freedoms as set forth in core internationally-recognized documents such as the Universal Declaration of Human Rights.

Occidental encourages employees and contractors to report suspected violations of the Code and company policies, including the Human Rights Policy, and provides several avenues for reporting. One example is Occidental's 24/7 Integrity Helpline, which anyone may use to anonymously report suspected policy violations.

Occidental Global Integrity Helpline for Compliance Reporting: Toll-free (USA) +1 (800) 699-7702 or +1 (704) 973-0346, or visit https://www.integrity-helpline.com/Oxy.jsp - to report in English, Spanish or Arabic.

Occidental's policies serve to protect employees'freedom of association and prohibit discrimination, as well as forced or compulsory labor and child labor in facilities operated by the company. Occidental investigates all credible reports of suspected policy violations, including allegations of bribery or corruption. Occidental's policies prohibit retaliation, either for reporting in good faith or for cooperating in an investigation of a suspected violation.

Occidental promotes high ethical standards, institutional integrity and effective corporate governance in every facet of our enterprise. We have implemented a number of policies and systems that establish clear performance expectations for business conduct by our workforce, including respect for the cultural values of our employees, contractors and neighboring communities, and the promotion of human rights.

Occidental's comprehensive Code of Business Conduct summarizes the policies that govern the business activities of the company. It affirms our commitment to high standards of ethical conduct and provides a quick source of information to employees and others seeking guidance, including identifying the resources available to report concerns.

The Human Rights Policy defines Occidental's commitment to promoting in its business activities those rights and freedoms universally recognized in international as well as national law. Occidental's Human Rights Policy reinforces the company's commitments to:

  • Respect the cultural values of the communities in which the company operates, including indigenous communities

  • Understand and appropriately address concerns raised by stakeholders

  • Provide a workplace free of child labor, harassment and discrimination

  • Operate in accordance with universally recognized rights and freedoms set forth in the Universal Declaration of Human Rights, the ILO Declaration on Fundamental Principles and Rights at Work

  • Investigate any allegations or complaints that involve a potential violation of Occidental's Human Rights Policy

Occidental actively engages with community stakeholders at town meetings, through surveys, and with direct consultations to help understand local issues and manage expectations. This regular engagement informs our policies and systems to ensure that human rights including, where appropriate, indigenous people's rights are consistently considered throughout our operations. To complement these efforts, Occidental's human rights training materials are made available to community representatives.

Occidental's Social Responsibility (SR) reporting focuses on the policies, objectives, performance and activities of the company and its subsidiaries. The reporting process is informed by IPIECA's Sustainability Reporting Guidance (third edition, 2015 release). Seven reporting principles guide the structure and content of Occidental's SR reporting.

  1. Relevance - The content covered in this website is aligned with the IPIECA Reporting Guidance representing industry consensus on the most relevant sustainability issues and the topics that Occidental considers most significant to our business operations and stakeholders.

  2. Scope - Our website reporting provides updated information on our global operations, SR programs and performance and their effect on our stakeholders including employees, contractors, stockholders, governments and the communities where we operate. Supplemental information related to our SR framework, SR programs and risk management is included in our SR Overview Report,'Partner of Choice®', and in our annual financial reports.

  3. Boundary - Our SR web content includes Occidental's oil and gas, chemical and midstream and marketing assets and facilities we operate. Quantitative data are based on Occidental's share of ownership in facilities that we operate; are not adjusted for terms of Production Sharing Contracts; and do not include non-operated assets, outside-operated joint ventures or facilities, customers or other end-users of Occidental's products.

  4. Integration and Alignment - As part of our reporting process, Occidental's executive and board leadership are engaged to align strategic focus and to set long-term direction. Operationally, Occidental's formal Health, Environment and Safety Management System (HESMS) sets consistent worldwide expectations and standards for business managers and helps employees across our operations assess and manage performance and risks.

  5. Credibility - We develop and review our disclosures and data with our business units and central functions, provide supporting data and balanced information on SR performance, and explain the basis for our estimates.

  6. Transparency - We provide clear, understandable, factual information to address topics in which our key stakeholders have expressed an interest, while preserving confidential business information.

  7. Timeliness - Annual performance data and the representation of assets communicated on the SR website are through fiscal year-end 2016, except where indicated. We periodically review our disclosures and, as additional information becomes available, the website will be updated.

Stakeholder engagement is both a central activity at Occidental and a catalyst for continuous improvement in our social responsibility policies, practices and reporting. We are committed to building trust with our stakeholders through regular and transparent communication and consistent actions. By providing fresh perspectives to emerging risks and opportunities, Occidental welcomes constructive engagement with its stakeholders. Stakeholder engagement covers a wide range of activities, from discussion of specific projects with neighbors and permitting authorities, to interaction with community representatives and civic organizations to identify how the company can assist in sustainable and inclusive economic development.

Occidental's key stakeholders are those persons and institutions with a direct interest in the manner in which the company conducts its business, including: employees, stockholders, contractors and suppliers, regulatory agencies and the communities surrounding Occidental's operations. To help define the most important SR issues for Occidental and the oil and gas sector, the Company engages with a range of stakeholders from both industry and non-industry. We monitor external trends, industry leadership, standards bodies and capital market influences to refine our operational priorities and focus on long-term value creation.

For example, Occidental engages with investors and industry working groups (e.g., IPIECA, API, Society of Petroleum Engineers and the Global CCS Institute) to address issues such as global climate change, human rights, the SDGs and water management. Based on these engagements and dialogue, Occidental has addressed and reported on company environmental performance and shared best management practices with suppliers.

Occidental's stakeholder engagement process includes the identification of key stakeholders; an assessment of stakeholder interests and issues; an evaluation of the community's socio-economic needs; the development and implementation of a stakeholder engagement plan. Occidental's management hold regular dialogue, meetings and consultations with stakeholder groups.

OxyChem works with stakeholders to ensure products deliver their intended benefits to society while protecting public health and the environment. As a participant company in the American Chemistry Council's Responsible Care® initiative, OxyChem applies a management system that regularly measures and tracks performance through established metrics and extends best environmental stewardship, safety and security practices to its business partners and suppliers. OxyChem facilities also regularly participate in Community Advisory Councils (CACs) to discuss health, environment and safety-related improvements, performance and other items of interest.

OxyChem's plant personnel in La Porte and Deer Park, Texas, for example, have long-established roles in Community Advisory Councils (CACs) that comprise a cross-section of industrial and community representatives from the Houston Ship Channel area. During CAC meetings, which are held approximately once per month, community members learn about and discuss the plant's operations and projects, including safety and environmental performance. This approach has enhanced understanding and transparency, and cultivates community trust and industry collaboration.

Collectively, input from stakeholders and external reviewers has enhanced Occidental's SR program. These inputs enable critical self-evaluation and drive continuous improvement in our reporting process.

Occidental welcomes and considers all feedback from stakeholders on its SR performance, engagement and reporting. Please contact us regarding any questions or comments you may have.

Occidental's Health, Environment and Safety (HES) risk management program provides a consistent and rigorous methodology to help the company identify and assess safety, environmental, social and operational risks across all areas of business operations.

For decades, Occidental has required implementation of HES risk management policies, standards and procedures at all operating locations and levels of the organization to identify, prioritize and apply feasible risk mitigation options. The company's Risk Management Community of Practice leverages the collective expertise of the company's risk engineers to share opportunities for improvement. Higher-level risks are reported through the management chain of command, validated and acknowledged by business segment management and reviewed annually with members of the Board of Directors, assuring that HES Risk Management is among Occidental's highest priorities.

Occidental's comprehensive Health, Environment and Safety Management System (HESMS) sets consistent worldwide performance expectations and standards across each business segment's respective operations. Occidental strives to continuously enhance its risk management program and is committed to conducting business in a manner that protects the health and safety of people and the environment at its facilities and in the communities where we operate. The HESMS facilitates compliance with laws and regulations and the management of HES and Social Responsibility risks to improve overall business performance. It encourages individual responsibility, values quantifiable results and promotes communication among employees, contractors, neighboring communities, government authorities and other stakeholders.

Occidental's Vice President of HES is responsible for implementing the HESMS, with oversight from the Environmental, Health and Safety Committee of the Board of Directors. Business managers and HES experts provide guidance, oversight and support to local operations in updating and implementing the HESMS. Each manager and employee is accountable for HES performance, including compliance with applicable HES laws, regulations, company policies and procedures within the scope of his or her duties. All personnel are empowered and expected to report non-compliance or unsafe conditions promptly and to take immediate action to prevent injuries or environmental incidents. From individual facility locations to the corporate level, HESMS implementation is routinely reviewed and verified with audits. Performance in key areas of HES and SR is directly considered in the annual review and compensation of employees, as well as in the selection of contractors, suppliers and business partners.

Throughout Occidental's worldwide operations, the HESMS emphasizes risk identification and forthright communication through job safety analyses, process hazard reviews, HES inspections and assessments and emergency planning so that preemptive actions can be taken to prevent or mitigate injuries or environmental incidents. The HESMS also provides tools for managers and employees to recognize HES and SR risks in their areas of responsibility. These risks undergo rigorous analysis to identify, prioritize and implement appropriate mitigation measures that are designed to improve performance.

The HESMS helps with the orientation of new personnel, including those at newly constructed facilities and acquired operations. As a regular practice in new projects, Occidental assesses potential social and environmental impacts, including water scarcity, human rights and indigenous peoples' rights. This comprehensive process helps us identify and address potential risks and stakeholder concerns promptly, strengthen Occidental's relationship with host communities, and educate new employees and contractors about performance expectations.

HES Principles

Occidental's HESMS is based upon the following 10 HES Principles:

  1. Safeguard the health and safety of people and protect the environment using design procedures, work practices and employee training

  2. Correct operating conditions that have a significant adverse HES impact

  3. Reduce waste generation and responsibly manage waste disposal

  4. Reduce pollutant releases to the environment

  5. Make efficient use of water and other natural resources

  6. Use energy efficiently

  7. Provide information on the safe use and disposal of Occidental's products

  8. Maintain a dialogue with neighboring communities about HES concerns

  9. Ensure ongoing enterprise-wide communications, including with the Board of Directors

  10. Report annually on Occidental's HES performance

HESMS Elements

Occidental continues to validate and improve its Health, Environment and Safety policies and HES Management System to address new business activities and challenges. Our vision remains focused on protecting people and the environment and increasing stockholder value by providing reliable, cost-effective energy and chemical products that are essential to society, public health and modern life.

Occidental's HESMS incorporates the following seven elements:

  1. Leadership - Senior management is committed to implementing HES policies and procedures, and fostering a business culture that values the importance of HES success.

  2. Policy and Strategic Objectives - Defining HES goals, principles and strategies is key to achieving sustained improvement in HES performance.

  3. Organization, Resources and Documentation - Processes ensure human, financial and organizational resources are in place.

  4. Risk Management and Evaluation - Identifying and evaluating HES risks are necessary for developing appropriate risk management measures.

  5. Planning - Operational effectiveness rests on the integration of and planning for HES requirements.

  6. Implementation and Monitoring - HES performance is routinely tracked with other quantifiable business goals and objectives.

  7. Auditing and Reviewing - Periodic assessment of HES systems and performance by trained company HES auditors independent of the subject facility or operation, supplemented by third party auditors as warranted, leads to program and performance improvements.

HES and Security Philosophy

As a leading manufacturer and marketer of commodity and specialty chemicals, OxyChem generally does not sell directly to end-users, but instead sells its products to other manufacturers. OxyChem is committed to high ethical standards and continually strives to ensure safe production, distribution, use and disposal of its products. The following principles provide the foundation of OxyChem's operating philosophy:

  • Utilize Health, Environment, Safety and Security (HES&S) systems, procedures, work practices and employee training to enhance HES&S performance, awareness and compliance.

  • Design, construct and maintain facilities consistent with recognized engineering standards.

  • Responsibly manage waste materials.

  • Minimize the release of pollutants to the environment.

  • Make efficient use of energy and natural resources.

  • Protect facilities to ensure safe operations and continued supply of product.

  • Provide information on the safe handling, use and disposal of OxyChem products.

  • Maintain dialogue with communities about HES&S issues.

  • Work with stakeholders to ensure products deliver their intended benefits to society while protecting public health and the environment.

Product Stewardship Program

OxyChem is committed to high ethical standards and the protection of health, safety and the environment. Product stewardship is one of the cornerstones of OxyChem's business, and the company's rigorous programs have for many years helped us earn a reputation as one of the safest producers in the industry. OxyChem's Product Stewardship systems help ensure the safe and knowledgeable use of our products throughout the world and universal compliance with product-related regulations. OxyChem's Product Stewardship Program includes the following areas: ACC Responsible Care®, Product Stewardship, and Product Safety.

American Chemistry Council (ACC) Responsible Care®

An active member of the American Chemistry Council (ACC), OxyChem has implemented the ACC's Responsible Care® principles, as well as codes and standards of the ACC, the Chlorine Institute and the Vinyl Institute. The American Chemistry Councils' Responsible Care® program is a global initiative that is practiced today by national and regional economies around the world. Responsible Care® has helped American Chemistry Council (ACC) member companies significantly enhance their performance, discover new business opportunities, and improve employee safety, the health of the communities in which they operate and the environment as a whole. The Responsible Care® program is structured around a set of specific health, environment and safety metrics with performance goals that are often more stringent than corresponding government requirements, and verifies conformance through internal and external audits. For information about OxyChem's Responsible Care® program, click here.

Product Safety

OxyChem assesses the health and safety impacts of its products periodically through its product stewardship program. OxyChem has established a risk management program for products and major secondary materials manufactured by OxyChem. The risk assessment for each chemical is based on analysis of the hazard it poses and its likelihood of exposure. Using this strategy, products are evaluated and prioritized for potential adverse effects, and risk-reduction practices are implemented, such as recommending personal protective equipment and providing additional technical support to customers. Product Stewardship Summaries have also been developed for OxyChem's high priority and core chemicals.

OxyChem's customer and technical service departments provide information and support to customers on the safe and environmentally responsible handling and use of its products. Under its Responsible Care® program and ISO 9000 certification, OxyChem surveys its customers annually, reviews the results of these surveys, and identifies opportunities to improve products and services.

In accordance with U.S. Occupational Safety and Health Administration (OSHA) requirements, product labeling and Safety Data Sheets (SDS) have been prepared for all OxyChem products and are routinely provided to customers. SDS provide comprehensive product information, including chemical composition, use of personal protective equipment, instructions for safe handling, and environmental and health information.

The vast majority of OxyChem's products are delivered in bulk via pipeline, tanker trucks or rail cars. Railcars and tank trailers are placarded with appropriate hazard warnings, and hazard information is provided to the transporter. In addition, all OxyChem products transported in drums, bags and other non-rail or trailer containers are labeled with product information that follows applicable regulations when they leave our facilities.

Foundations Reports