Oxy’s operations are governed by hundreds of thousands of HES-related legal and permit requirements. Oxy tracks its performance worldwide against HES-related legal and permit requirements through an index composed of two elements — instances requiring a report or notification to a government agency, and agency citations. Reportable events include those where an Oxy entity was required to self-report to a government agency a spill or release, a deviation from a regulatory standard, or an agreed-to permit condition — for example, a discharge or emission in excess of a reportable quantity or an established permit limit. Citations include notices of violation, administrative orders, consent orders or agreements, and civil actions or court orders by a government agency to enforce HES laws or regulations. Oxy’s sustained high level of compliance performance and the downward trend of the index since 2006 reflect our additional continuous improvement efforts.
Government agency citations and penalty data also reflect the level and focus of enforcement activity, which varies from year to year. While not serving as a primary indicator of a company’s HES performance, agency priorities can highlight additional opportunities to strengthen HES programs. As with certain other metrics, new or recently acquired assets account for a disproportionate share of HES penalties. Over 60 percent of the 2007 HES penalties paid arose from such assets. Similarly, almost 40 percent of the 2008 penalties paid arose from such assets. Penalties paid by Oxy in 2008 were small compared to those paid by other large industrial companies.
For additional discussion of Oxy’s environmental spending, please see our Annual Report on Form 10-K.