finding your way through the maze

ethical conduct policy:

guidelines on business conduct

July 2002
Ethical Conduct Policy: Guidelines on Business Conduct

BP’s Ethical Conduct policy states the principles, which, if followed in all our actions and dealings, will
ensure that our reputation for conducting business with integrity is maintained. It describes the
behaviours that we expect from our people and provides some explicit boundaries around our business
activities.

There will be issues that are not clear cut. • A fuller exploration of the issues which most
These require our local business leaders to commonly concern BP staff, some
engage in consultation over a broad array of experience of how best to deal with them
considerations and then to exercise judgement and, in some instances, rules that must be
and decide the best way forward. This reflects applied.
our overall management approach, which
• Steps and tests which a manager might apply
demands a high degree of responsibility and
to ensure the policy is in place and working
autonomy at all levels in the organization. The
effectively in his/her organisation, including
policy framework helps us apply consistent
our rules on reporting and handling any
principles in the many different circumstances
breaches of the policy.
in which we operate around the world.
The Guidelines are available on BP’s internal
The Guidelines on Business Conduct offer
Ethical Conduct web site at
practical guidance to employees in dealing with
http://gbc.bpweb.bp.com/ethics and may be
ethical issues, thereby helping to make the
downloaded. The intent is to aid employees in
ethical conduct policy ‘live’ in the company.
managing their activities and applying these
They should be read in conjunction with the
good practices throughout the year. All
policy and have been updated to incorporate
employees should be made aware of the
the policy changes announced in February
Guidelines and encouraged to apply them as
2002, i.e. no political contributions and no
part of normal business processes.
facilitation payments.

The Guidelines on Business Conduct comprise:

• A decision model that describes a process to

clarify ethical conduct issues and potential
consequences.

Stewart Broome
Director, Business Ethics

July 2002

1
guidelines on business conduct
Contents
Introduction ____________ page 4

Section A: a decision model ____________ page 7

Section B: exploring the issues ____________ page 9

Human rights ____________ page 9
Legality ____________ page 10
Political contributions ____________ page 11
Bribery ____________ page 11
Services rendered by agents, advisors consultants and other third parties ____________ page 13
Conflicts of interest ____________ page 14
Gifts and entertainment ____________ page 16

Section C: embedding business ethics ____________ page 18

Embedding the ethical conduct policy ____________ page 18

Appendices ____________ page 21

1: declaration of human rights summary ____________ page 21
2: summary of the foreign corrupt practices act and other laws ____________ page 22
3: agents, advisors, consultants and other third parties – key indicators ____________ page 25
4: quick help to resolve conflicts of interest ____________ page 26

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introduction
The booklet on our business policies ‘What We Stand for’ contains the five core policies, which apply
throughout the BP Group. The policies reflect our values which are summed up in our brand: innovative,
green, progressive, and performance driven. Our policies form an important part of our System of
Internal Control.
We believe that companies should not stand
apart from the societies in which they operate,
that our activities should generate economic
benefits and that our conduct should be a
source of positive influence in society. This
means that as the expectations of society
evolve, we need to continually refresh our
understanding of how our rights, obligations
and actions may be seen. There are many
examples that show how damaging
consequences can flow from decisions taken
with good intent – where the decision makers
are surprised and mystified by the judgements
of the public.
BP’s policy on Ethical Conduct states the
principles that, if followed in all our actions and
dealings with others, will ensure that our
reputation for acting with integrity is
maintained. The commitment and policy
expectations describe the boundaries for what
is and what is not acceptable practice.
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We recognise that many ethical decisions are
not clear-cut and that these need more than
the application of a simple set of rules in order
to achieve resolution. These decisions require
judgement in arriving at the best way forward.
In cases of uncertainty, everyone working for
BP is expected to raise the issues with their
management and colleagues to obtain
clarification. However, in deciding whether or
where to do business, we must feel confident
that we can implement our policy
commitments in all our operations.
The purpose of these Guidelines is to offer
practical guidance to BP employees on dealing
with ethical issues and provide some steps to
make the policy live in the organisation. The
Guidelines are particularly intended for all
employees who are responsible for company
assets (cash and physical), who are responsible
for commercial or governmental relationships,
who have staff reporting to them who handle
transactions, and anyone whose behaviour is
critical to our reputation. They should be read in
conjunction with the commitment and policy
expectations on Ethical Conduct. They
comprise:
• Section A: A decision model which sets out
a process to help clarify issues and potential
consequences
• Section B: A fuller exploration of the issues
which most commonly concern BP staff, plus
some experience of how best to deal with
them and, in some instances, rules that must
be applied. These issues include Human
Rights; Legality; Political Contributions;
Bribery and Corruption; Agents, Advisors,
Consultants and Other Third Parties; Conflicts
of Interest; and Gifts and Entertainment.
• Section C: Steps and tests which a manager
might apply to ensure the policy is in place
and working effectively in his/her
organisation. It also covers information on
handling policy breaches, reporting incidents
and losses, and the annual ethics certification
process.
• The Appendices provide additional
information on the UN Universal Declaration
of Human Rights, the US Foreign Corrupt
Practices Act and other important laws, US
political contributions, the use of agents and
other third parties, and conflict of interests.
5
Business Unit Leaders are responsible for
ensuring that the Ethical Conduct policy is
understood and put into practice within their
Business Units. Regional Presidents and
Country Presidents should be consulted to
ensure that the policy is appropriately aligned
with local laws and practices.
Wilful or careless breach or neglect of the
policy will be treated as a serious disciplinary
matter. Internal Audit, Group Security, and
Legal can assist by providing expertise to help
identify an appropriate way forward.
Confidences will be respected and any fears or
concerns will be dealt with sensitively.
The BP help line is available to all employees
and partners as another means of
communicating questions and concerns relating
to possible violations of law or policies.
Questions or concerns can be reported by
email to IFAN@bp.com, or confidentially and
anonymously to our 24 hour telephone lines: 1
800 225 6141 for calls within the United
States; 630 836 4222 for calls from elsewhere
in North, Central and South America; 44 (0) 20
7496 4466 for calls within the United Kingdom
and the rest of the world.
 Consider!

‘There is no right way to do a wrong thing’

‘Actions are unethical if they

won’t stand scrutiny’ BP’s commitments

Human Rights
To support the principles of the UN Universal
Declaration of Human Rights.

‘Ethics checks’ Legality

To respect the rule of law.
Is it legal?
Honesty
Do I feel good about it?
To promise only what we expect to deliver,
Might other shareholders have a legitimate make only commitments we intend to keep,
cause for concern? not knowingly mislead others and not

Would shareholders see it as responsible participate in or condone corrupt or

stewardship? unacceptable business practices.

If the details were publicly examined, either Common Decency

locally or internationally, would BP’s To fulfil our obligations and commitments,

reputation be at risk? treat people according to merit and

contribution, refrain from coercion and never
Might it create an exposure to escalating
deliberately do harm to anyone.
demands?
Trust
Would I be proud to have it published in a
To act in good faith, use company assets only
newspaper?
for furthering company business and not
seek personal gain through abuse of position
in the company.

Do any of the
expectations set
a specific
boundary?

…and consult with others

Section A

a decision model
Some ethical issues are straightforward – for example, we don’t offer or accept bribes. Other issues
often emerge in developing situations where we may feel forced to choose between two alternatives –
neither of which seems acceptable. Sometimes this is because influencing either alternative is outside
our power and we may therefore feel the dilemma cannot be resolved unless we adopt a double set of
standards. In these cases, analysis may show that the underlying issues are not those which we
thought at first sight and, either there is an alternative acceptable course of action, or the dilemma can
only be resolved at a higher level in the BP organisation – perhaps in further collaboration with
government or international organisations.

It is often insufficient for an individual to act • Act with transparency!

solely on the basis of their personal judgement,
• Consider the issue or situation in light of
and nobody should act contrary to policy. A
the principles expressed in the
better approach is to formulate a number of
commitment and policy expectations.
starting points for analysing ‘grey areas’. Going
through the systematic process and questions • Consider the potential impact or effects of
outlined on the adjacent page can help clarify the proposed course of action.
the underlying issues in a ‘grey area’
• Think through the situation using the
distinguishing between those activities which
‘ethics check’ and draw on the acquired
are acceptable and those which are not,
knowledge in the corporation.
ensuring we have addressed the legitimate
expectations of all those who have an interest, • Think how others will interpret it.
and determining whether we need to take the
• Consider at what level might an
issue to a higher level for resolution. It is
appropriate resolution lie (e.g. BU,
important that individuals do not put
business stream, region, company,
themselves into a situation where they feel
government, national, international, etc)
they must act contrary to BP’s policies; when
in doubt, employees should raise questions or • Consult with Legal, Internal Audit, Group
issues to appropriate management. Security and others. Be sure you
understand the real issues and look for
solutions to address these issues.

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Section B: Exploring the Issues

human rights
BP supports the belief that human rights are universal. They are enshrined in the United Nations
Universal Declaration of Human Rights (UDHR), which we support. Most countries in the world have
agreed to the two covenants of the UDHR, including the United Kingdom. It forms the basis of public
and international expectations.

It is the responsibility of States to defend the Issues that could be posed:

human rights of their population. As a • Impact of business activities in country.
company, we have a responsibility to contribute
• Oppressive regimes.
to the promotion of human rights in society and
to consider the impact of our operations. We • Exacerbation of conflict around operations.
will ensure that we adhere to the principles of
• Security arrangements with the public force
human rights within our operations and in
(police and military) and private security
those areas that are under our control. We are
contractors.
sensitive to the use of personal information in
order to respect rights to privacy. Beyond this, • Land and other rights of indigenous peoples.
our business transactions and relationships
• Use of forced and/or child labour.
provide opportunities to demonstrate our
concern for human rights and to promote an • Association with abuse of human rights
enlightened public position about human rights. through our contractual arrangements with
Our ability to do this will vary according to the third parties.
situation and the country.

Endeavours to support human rights may Requirements

require discussions with business partners and
trade associations and with the authorities at
local, provincial and national levels. These must
be handled in a constructive and sensitive
manner, consulting with independent experts
and responsible Non-Governmental
Organisations (NGOs) or other international
organisations where appropriate (e.g. Amnesty
International, Human Rights Watch, World
Bank and United Nations).
• Analyse human rights issues and their
potential business impact and liaise with
appropriate external organisations at an early
stage of business development.
• Ensure that local communities participate in
the wealth we create and respect their labour
rights. Consider the human rights record of
suppliers in the procurement process.
• Consider the potential impact on local staff.

• Promote awareness of human rights issues

and staff responsibilities, especially in the
event of situations of overt potential conflict
(e.g. strikes or union disputes etc.). No
information should be passed to security
forces that could be used to target individuals
for extra-judicial actions.

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• Establish transparent relationships and
arrangements with public forces and security
contractors, with suitable contractual
conditions of engagement that include
safeguards to prevent human rights abuses.
• Liaise with government and responsible
NGOs to respect land and other rights of
indigenous peoples.
• Foster similar standards in all third parties
who act with us or on our behalf.
Further information
For more information, see Appendix 1
and the BP Human Rights site at
http://gbc.bpweb.bp.com/km/humanrights.
Further advice on the use of personal
information to respect rights to privacy
can be found on
http://beyondprotection.bpweb.bp.com. The
Government and Public Affairs team should be
consulted on any matters arising on human
rights or child labour issues. BP’s policy on
child labour can be found on the ethics site
http://gbc.bpweb.bp.com/ethics/policy.

legality
Rapid change in the nature and extent of business, and in the business and political environment, often
raise issues where the existing legal framework and past experience could provide ambiguous guidance
or answers. New laws may be unclear (for example a new procurement directive or tax law), there may
be inconsistencies between national and international law, and sometimes laws may contradict one
another. The law therefore cannot be expected to cover every aspect of ethical business conduct and
the complex situations that can arise. Complying with the law is a necessary, but may not be sufficient,
condition for meeting BP standards of business conduct. Our standards often require more than the
legal minimum.

Applying the principles of the policy on Ethical
Conduct and consulting with others are your
best guide to making an ethical judgement.
Regulations that are inadequate or ambiguous
require that we attempt to reconcile the ‘letter
of the law’ and the ‘spirit of the law’ to ensure
effective management of any risks. In such
cases, early consultation with the legal team
will help in developing an appropriate course of
action. Breach of law can create an exposure to
damages, fines or custodial sentences. The
associated publicity may portray the company
as being irresponsible and acting against the
public interest in the community in which it
operates.
BP supports the creation of open and fair-
minded competition. BP will not condone acts
by employees that contravene competition or
anti-trust law, even if those concerned may
have believed their acts to be to the benefit of
the company.
BP’s worldwide operations subject our
company to the laws of many nations. Some
nations’ laws, particularly those of the United
States, apply to business activity outside their
boundaries.
Further information
Appendix 2 summarises some of the important
laws on which you should seek counsel.
Assistance and counsel can be obtained from
BP Legal.

10
political contributions
BP is an international business participating in society but we must not confuse our role with that of
government. Political contributions are open to the interpretation of being an inducement in exchange
for future beneficial treatment by government. They may also be interpreted as political bias or
interference with the democratic process.

BP will never make political contributions, lobbying. BP welcomes its employees’

whether in cash or kind, to any political party or
to organisations or individuals whose activities
are designed to promote the interests of
political parties. Organisations such as political
research bodies or think-tanks, which are
aligned to political parties, should be treated as
though they are political parties.
However, BP will continue to engage in policy
debate on subjects of legitimate concern to the
company, its staff and the communities in
which it operates through activities such as
participation in the political process as
individuals in ways that are appropriate to each
country. For example in the United States BP
provides administrative support for employee
Political Action Committees.
Further information
The Corporate Communications team should
be consulted about public engagements or
activities that may be open to interpretation as
political endorsements.

bribery
Bribery is the giving, promising or offering of any gift, loan, fee, reward or other advantage to any
person as an inducement to do something which is dishonest, illegal or a breach of trust.

BP will never offer, pay, solicit or accept a bribe in any form – nor do we permit third parties acting on
our behalf, such as agents and consultants, to do so.

Bribery is unethical because it undermines the
fairness of the market, distorts transaction
costs and leads to the destruction of an open,
honest and decent society. The presence of
bribery on a large-scale harms the overall
economic, social and political progress of
developing countries. Bribery is illegal under
the laws of almost all the countries in which BP
operates and is also illegal globally under the
UK’s Anti-Terrorism Act and the US Foreign
Corrupt Practices Act.
No matter how pervasive bribery may be in
some countries, no country openly defends the
demand for, nor the payment of, bribes as
ethically acceptable. A claim that the practice is
‘accepted’ locally usually means that it is
tolerated when kept secret, and therefore BP’s
best action may be to challenge bribery at a
senior level and consider exposing the practice
in the public domain.

11
In some countries, small facilitating payments,
as defined under the US Foreign Corrupt
Practices Act, are a normal means of obtaining
routine low-level actions and/or approvals by
government officials. BP regards such
payments as bribes and will not make them.
Cultural difference should never be used as an
excuse for poor ethical practice. Leaders in
developing countries often find this attitude
insulting.
Any demand for, or offer of, a bribe in whatever
form to any BP employee must be rejected and
reported immediately to line management.
Employees should be aware that even the
12
perception by others that a gift is in fact a bribe
is sufficient to damage BP’s reputation.
Employees should ensure that the receipt and
provision of gifts and entertainment complies
with their local Gifts & Entertainment Policy.
Excessive amounts of gifts and entertainment
may indicate that there is intent to bribe the
recipient. No BP employee should solicit any
gift or entertainment.
Further information
See Gifts and Entertainment section on page
16. Internal Audit, Group Security or BP Legal
can provide further assistance.
services rendered by agents,
advisors, consultants and other
third parties
Where a company, organisation or person acts or might reasonably be perceived to act on behalf of BP,
that company, organisation or person will be expected to conduct business in accordance with our
commitment and policy expectations on Ethical Conduct or with a code of conduct that is at least as
rigorous. We should not employ or expect anyone to do something that we would not condone
ourselves. To the external world their actions are indistinguishable from BP’s and will reflect on BP’s
reputation. We have a duty to ensure that agents, advisors, consultants and other third parties are
aware of our commitments and that we do not condone either explicitly or implicitly breaches of our
principles. It is not acceptable to ‘turn a blind eye’ or to rely on good intent. We must consider how our
actions could be interpreted and perceived by others if all the factors, including our commercial gain,
were exposed to public scrutiny.

Remuneration of agents, advisors, consultants, • BP is exposed to investigation and

and other third parties should be
commensurate with the provision of relevant
and proper services related to the transaction.
Where someone’s remuneration is requested
to be linked to a percentage share of the
profits, particular care is required over the
relationship between the potential absolute
level of payment and the services rendered.
Key indicators of potential inappropriate activity
by agents, consultants or other third parties
that should warrant scrutiny and precaution are
included in Appendix 3.
prosecution for perceived violation of the UK
Anti-Terrorism Act, the US Foreign Corrupt
Practices Act or other anti-corruption laws.
• Damage to BP’s reputation.
Requirements
• A formal approval process should be
established prior to the selection decision for
the appointment of new agents, advisors, and
other third parties; ensure decisions are made
within the required delegation of authority.

• The decision-making process should be

Potential risks
documented to provide an audit trail, taking
• Agents or other third parties take improper or
into account due regard for the third parties’
illegal actions unknown to BP, for which BP is
capabilities to meet our commitment and
held responsible.
policy expectations on Ethical Conduct.
• BP appears to condone ‘double standards’ by
• External review and challenge should be
engaging agents or third parties to undertake
sought from senior BP management,
corrupt or improper practices.
Regional President, and Internal Audit when
such relationships have the potential to
impact on BP’s reputation.

13
• Before a contract is signed, a due diligence
check should be performed and documented
over new agents, advisors, consultants and
intermediaries who may be expected or
perceived by third parties to act on BP’s
behalf.
• Provide and explain the impact of our
commitment and policy expectations on
Ethical Conduct to third parties or
intermediaries before we engage them to act
on BP’s behalf.
• Contractual agreements should address our
commitment and policy expectations (e.g.
clear terms of reference detailing the
boundaries within which the third party may
act on behalf of BP).
• Payments, loans or commissions to agents
must be clearly related to and commensurate
with the services they are contracted to
provide and should be covered by a
contractual agreement.
conflicts of interest
You should not be involved in making a business decision where you have a personal, undisclosed
interest.
Business decisions made under a conflict of
interest raise doubts about the quality of the
business decision and the integrity of the
person making it.
14
• With best endeavours, influence joint venture
partners where we are not operators to adopt
similar business conduct commitments and
monitor their performance
• Monitor the actions and ethical performance
of agents and other third parties. Any credible
allegation or evidence of legal violation should
be brought to line management’s attention,
referred to Group Security or Legal,
investigated appropriately, and resolution
documented.
Further information
The BP Group Procurement Handbook
(http://groupprocurement.bpweb.bp.com)
contains additional information and guidance on
the application of business policies to the
procurement of goods and services from third
parties. It also contains information about
contracting and procurement, including
procurement by agents. For further assistance,
contact your local or Stream Procurement
contact or, your regional or local Legal, Security
or Internal Audit contacts.
It is unfair for employees to be put, or to put
themselves, into a position where their
loyalties are divided. It is important to be clear
about the nature of a conflict of interest (either
real or perceived) and, hence, the steps that
must be taken to avoid or manage it. It is not
practical to try to think of and ban every
conceivable situation that could lead to a
conflict of interest.
Engaging in outside activities such as
secondary employment or consultancy,
directorships or freelance activities should not
get in the way of BP’s claim on your time, incur
the use of BP resources, seek to influence any
kind of transaction with BP, or entail the
application of proprietary knowledge gained in
BP service to the benefit of another
organisation or an outside employer. Family ties
or other relationships that could be seen to be
an unfair influence (e.g. a family interest in an
outside company with which BP does
business) must be suitably isolated from the
business decision.
BP does, however, encourage staff to
participate in external activities which would be
considered to be either a professional or public
service. This includes senior staff and
Executive Directors accepting directorships of
other companies (of appropriate stature and
where there is no conflict of interest) which in
each case, requires Board approval via the
Group Chief Executive.
Potential or actual conflicts of interest should
be disclosed to your management for
resolution. Non-disclosure of a conflict of
interest, for whatever reason, demonstrates
either naiveté or a wilful breach of trust. A
disclosure that knowingly fails to reveal fully all
pertinent and specific details is dishonest and
intentionally deceitful. Some questions you
could ask yourself are listed in Appendix 4: A
Quick Help to Resolve Conflicts of Interest.
15
Potential risks
• Decisions based on motives of personal gain
or enrichment rather than on stewardship
responsibilities.
• Appearance of bias or unfairness to other
stakeholders.
• Undermining of confidence and trust in the
management of the company with
stakeholders.
Requirements
• Avoid putting yourself in a position where
your loyalties may become divided.
• Before engaging in outside employment,
consultancy or directorships, obtain the
relevant management endorsement.
• Explicitly declare all conflicts of interest and
fully disclose all pertinent and material factors
to your management.
• Take no part in nor seek to influence a
business decision, process or transaction
under a conflict of interest situation.
• Ensure that the business decision, process or
transaction is insulated from even the
appearance of bias.
Further information
For further information on protection of BP
trade secrets and proprietary information, see
the BP Security Policy and Guidelines
(http://gbcweb.bpweb.bp.com/bpsecurity). For
more information on Information Brokering, see
the BP Group Procurement Handbook
(http://groupprocurement.bpweb.bp.com).
gifts and entertainment
Retention of a gift or favour in the course of business can cause a conflict of interest between self-
enrichment and professional duty and may be an abuse of a position given in trust. It can create a
sense that there are ‘double standards’ and erode the confidence of others in your business decisions.
Therefore, we need safeguards around the giving and receiving of gifts and entertainment.
In principle, there is nothing wrong with
receiving or giving tokens of appreciation, or
accepting or giving reasonable entertainment to
further a business relationship. We need to be
sensitive to, and understand, the different
norms and conventions in the business
communities and cultures in which we operate
so that we do not give offence. For this reason
‘nominal value’ and ‘reasonable entertainment’
should be defined relative to differences in the
standard of living between the giver and
receiver, and relative to cultural norms and
conventions.
A local gifts and entertainment policy (to
include definition of ‘nominal value’ and
‘reasonable entertainment’) and a compliance
process should be put in place by local
management, and agreed with the appropriate
Regional or Country President.
Receipt of material gifts or favours must be
recorded and an acceptable course of action
endorsed by management. (For example:
handing over to the company, a donation of
equivalent value by the individual to a charity,
return of gift to the giver.)
16
Potential risks
• Doubts about the quality of business
decisions.
• Undermining of confidence and trust in
management.
• Allegations of misconduct.
• Appearing to be unfair to other stakeholders.
Requirements
• Never offer or accept gifts or entertainment
under circumstances that might create the
appearance of impropriety (e.g. during a
competitive bid/tender exercise).
• Each region, country or Business Unit should
put in place a local gifts and entertainment
policy and compliance procedure.
• Only gifts of nominal value and reasonable
entertainment (as defined locally) may be
accepted. Gifts or other favours that are
material must be declared to your
management who will determine what
course of action should be taken.
• All expenditure on gifts and entertainment
must be properly authorised and accounted
for.
Further information
Further guidance on decision criteria and
acceptable and unacceptable practices is
provided in the BP Gifts and Entertainments
Policy guidelines at
http://gbc.bpweb.bp.com/ethics/policy.
Section C: Embedding Business Ethics

embedding the ethical conduct policy

Embedding the Ethical Conduct policy means taking reasonable steps to ensure local business
behaviours and actions are consistent with Group commitments and policy expectations. The
organisation needs to take adequate measures to promote ethical conduct and to prevent and detect
unethical conduct by staff and third parties who act on BP’s behalf. The following questions will help
assess whether such measures need strengthening:

• Is management commitment demonstrated? • Are suspected breaches of the policy

(e.g. how is this achieved?, face-to-face investigated?
conversations?, actions taken?)
• Is proportional disciplinary action taken in the
• Are ethical standards promoted (e.g. event of wilful and deliberate transgression of
communication, dialogue, training)? the policy?

• Are there local processes and workable

procedures to help staff address issues of
concern (e.g. local ethics forums, workshops,
local guidelines covering gifts and
entertainment, use of agents and facilitated
payments)?
• What is done to ensure due care in
delegating responsibilities (e.g. track record,
competency, experience, segregation of
duties)?
• Are proper record-keeping procedures in
place (e.g. expense accounting, ledgers for
gifts/entertainment)?
Making the policy live in the organisation
Employees at all levels in the company need to
feel confident that they can interpret BP’s
policy on Ethical Conduct within their working
environment. This requires sufficient
understanding of the policy to be able to make
business decisions consistent with BP
standards. Where employees encounter
situations they feel unable to resolve, they
should feel that they are able to speak openly
about them and get the support they need.
Experience suggests that there are three key
areas to address to accomplish this:

• Are staff encouraged to raise concerns and

1. Providing a shared frame of reference: In the
report breakdowns (behaviour and
absence of a company frame of reference,
environment)?
employees can only rely on their personal
• Are there mechanisms to monitor/measure experience and understanding to assess and
compliance with the Policy (e.g. reviews, judge issues. Employees need time and
audits, self assessments)? opportunity to discuss and understand BP’s
policy commitments and expectations and to
• In the event of breakdowns, are steps taken
look at risks to reputation and brand integrity in
to understand the root causes and modify
light of this.
systems and processes to prevent repetition
(e.g. investigation, analysis, knowledge
sharing)?

18
2. Opportunity to raise and discuss ethical
dilemmas: Employees need to feel that they
are able to raise and discuss their dilemmas.
This requires trust, openness and an
awareness of cultural differences, so that
employees are able to raise issues and be
confident that they will be heard and
understood.
3. Relevance: Employees understand and are
motivated by issues which have some meaning
for them. Business ethics needs to be
discussed in relation to what is real and
specific to them, rather than as theory or
philosophy.
Handling policy breaches
Senior management must decide on a
response that is appropriate to the situation.
This may span criminal or civil prosecution and
dismissal through to lesser disciplinary
measures. BP’s policy is to inform the police of
criminal activity. Exceptional circumstances,
such as consideration of human rights issues,
may permit an alternative course of action to
prosecution or other disciplinary actions.
An Investigation and Fraud Awareness Network
(IFAN) has been created within the company to
provide an independent centre of expertise for
the prevention of fraud and the investigation of
serious violations of company policy, conflicts
of interest, breaches of ethical conduct, fraud,
and other criminal acts. IFAN’s core
‘investigative cadre’ consists of a number of
experienced investigators drawn from Internal
Audit and Group Security. IFAN will carry out its
investigations in a professional manner with
integrity and respect for the law and individual
rights.
Reporting incidents and losses
All incidents of fraud or ethical misconduct,
involving the actual, aggregate or potential loss
19
of $100,000 (US) or more, must be reported
immediately on discovery to Internal Audit or
Group Security. Any incident or fraud or ethical
misconduct resulting in a loss or potential
aggregate loss greater than $10,000 (US), is to
be reported to the Investigation and Fraud
Awareness Network (IFAN).
Any known or suspected criminal acts, ethical
violations, questions or concerns can be
reported by email addressed to IFAN@bp.com,
or confidentially and anonymously to the
company’s 24-hour telephone lines: 1 800 225
6141 for calls within the United States; 630
836 4222 for calls elsewhere in North, Central
or South America; 44 (0) 20 7496 4466 for calls
within the United Kingdom and the rest of the
world.
Annual certification
The annual ethical conduct certification process
provides an explicit demonstration of our
commitment to the Ethical Conduct policy and
is formal route for raising issues. Every
Business Unit Leader and Function Head is
required to sign a certificate each year attesting
that the ethical conduct policy has been
adopted and that procedures are being or have
been implemented to ensure compliance. All
BP employees in positions of responsibility
down to the team leader level are asked to
attest personally to compliance with the policy
and to bring into the open any issues where
there may be doubt and/or non-compliance.
Each Business Unit Leader and Function Head
is expected to have a meaningful discussion
with his/her Group Vice President prior to
signing the certificates to discuss issues,
progress, and action plans. The key results
arising from the certificates are raised through
the line to the Group Chief Executive.
Ultimately, the outcome is communicated to
the Board Ethics and Environment Assurance
Committee.
Appendix 1

declaration of human rights:

summary
• On December 10 1948 the General Assembly of the United Nation adopted and proclaimed the
Universal Declaration of Human Rights ‘… as a common standard of achievement for all peoples and
all nations...’

• The declaration has the status of international law and all governments can be held to its principles.
The Declaration encompasses civil and political rights (in the first 21 articles); economic and social
rights (articles 22-27); and reciprocal obligations and constraints conferred by participation in a
community (articles 28-30).

• The Declaration was affirmed by 171 countries by their adoption of the Vienna Declaration at the
World Conference on Human Rights in Vienna in 1993.

• In the United Kingdom, the Human Rights Act of 1998 came into force in October 2000. It gives
further effect to the European Convention on Human Rights.

Here is a rough shortened summary of the rights articles 1-27 of the UDHR:

All human beings have the right to: • Asylum from persecution

• Freedom and dignity • Nationality

• No discrimination on grounds of race, colour, • Marriage and family

sex, language
• Property
• Life, liberty, security
• Freedom of thought, conscience, religion
• Freedom from slavery
• Freedom of opinion and expression
• Freedom from torture
• Peaceful assembly and association
• Recognition before the law
• Political participation
• Equal protection by the law
• Economic, social and cultural development
• Remedy for acts of violation of rights
• Work, fair pay, and trade union membership
• Freedom from arbitrary arrest, detention or
• Rest and leisure, reasonable working hours
exile
and holidays
• Fair trial
• A reasonable standard of living and care
• Be presumed innocent until proven guilty
• Education
• Privacy and family privacy
• Participation in cultural life and intellectual
• Freedom of movement property ownership

21
Appendix 2

summary of some important laws

BP’s worldwide operations subject it to the laws of many nations. Some nation’s laws, particularly
those of the United States (US) apply to business activity outside their boundaries. The following
summarises a number of the important laws in this area on which you should seek counsel.

US Foreign Corrupt Practices Act (FCPA):
summary
This FCPA was introduced in the US in 1977
and applies to all companies, including BP,
whose shares or commercial paper are quoted
on the New York Stock Exchange. It was
amended in 1998 to take account of the OECD
(Organisation for Economic Co-operation and
Development) convention on combating the
bribery of foreign public officials.
The FCPA contains two main substantive
provisions:
The Act prohibits (in the context of trying to
influence an act or decision so that it assists in
the obtaining, retaining or directing of business
to any person) the offering, paying, promising
to pay, or authorisation of the giving of anything
of value to any of the following:
• A foreign official (i.e. non US) including any
person acting in an official capacity for a
foreign government, department, agency or
instrumentality;
• A foreign political party, official or candidate
for foreign political office; or

1. an anti bribery provision, and
2. an accounting provision (i.e. reasonable
assurance that transactions are properly
authorised, recorded and subject to periodic
accounting reconciliations).
• Any other person, while knowing or having
reason to know that the offer or payment will
ultimately go to either of the above two
categories.

In tandem, these two provisions are intended

to prevent bribery of foreign (non-US) officials
by imposing civil and criminal penalties on
those companies and individuals that are
subject to the FCPA and who are determined
to have violated its provisions.

22
Competition laws:
BP supports the creation of open and fair
competition. BP will not condone acts by
employees that contravene competition or
antitrust law, even where those concerned may
have believed the acts to be to the benefit of
the company. Your activities may be subject to
the competition laws of the EEC (European
Economic Community) and of the US,
regardless of where the conduct occurs,
particularly if it impacts trade. BP Legal has
prepared a summary of the relevant US laws
which will help those whose business activity
may impact US commerce to identify when
they should seek counsel.
Anti-boycott laws/foreign trade
controls/export control regulations:
The US imposes trade sanctions or other limits
on the ability of companies subject to US
jurisdiction to do business with certain foreign
countries, firms or individuals and prohibits
certain types of contractual provisions. Other
US laws regulate the export or re-export of US
origin items (goods, technology and software).
Some of these laws apply to ‘US persons’
which is defined to include all companies
organised under the laws of any ‘US
jurisdiction’ including unincorporated foreign
branches, companies managed from a US
location, any US citizen or permanent resident
wherever located, any person actually in the US
and, for certain purposes, foreign subsidiaries
‘owned or controlled’ directly or indirectly by a
US company. Other aspects of these laws
apply to any person of any nationality actually
dealing in US origin items.
23
The US laws which particularly affect ‘US
persons’ are the anti-boycott provisions which
target the Arab boycott of Israel, embargo
programs dealing specifically with Cuba, North
Korea, Libya, Iraq, Iran, Sudan, Serbia and
some other countries, certain embargoed
parties such as embargoed country
governments, international terrorists and some
others. Other programs prohibit certain
activities related to nuclear, biological and
chemical weapons proliferation and missiles.
Some features of US foreign trade control
programs apply across the board to all BP
Business Units worldwide whether or not they
are US persons. For example, US export
control licensing requirements apply generally
to third-country shipments of US origin and US
content and technology (and, to a more limited
extent, to the ‘direct products’ of US
technology) regardless of whether the exporter
or re-exporter is a ‘US person’. Likewise many
US embargo programs apply to foreign parties
that export products, technology or services
deemed ‘subject to US jurisdiction’ because of
their origin, content, or other circumstances.
Finally, US citizens or permanent residents of
the US (‘green card’ holders) are individually
‘US persons’ for purposes of some US laws,
regardless of the nationality of their employer
or location of employment.
US Anti-boycott laws: BP Legal offers written guidelines for
In general, you should assume that the compliance, but these guides are not sufficient
following acts are illegal unless the legal team detailed to enable those acting for BP to
advises otherwise: determine whether every action or omission
would violate the law. Consult the legal team
• Direct participation in a boycott.
where there is any doubt.
• Indirect participation in a boycott.
All of these laws are complex and criminal
• Furnishing information that could be used to
penalties apply to companies and individuals
support a boycott.
that violate these laws. Consult with the legal
• Agreeing to do any of the acts in this list. team before taking action on any matter which
may raise legal compliance issues. BP Legal
• Requiring anyone to do or agree to do any
has prepared written summaries and guidelines
such act.
of many of these laws. The legal team also
conducts workshops which provide practical
Because the laws and regulations governing advice on legal compliance in the context of
international boycotts are complex and revised specific BP businesses.
often, it is important that you seek legal
counsel on potential boycott-related issues. US
laws impose ongoing reporting requirements
related to compliance. BP Legal co-ordinates all
reporting and also conducts an annual
compliance audit.

Foreign Transaction Control/Export Control

Regulations:
The laws and regulations governing trade
sanctions change periodically. The export
control regulatory scheme requires a license for
the export or re-export of certain products and
technology and early action may be required to
comply.

24
Appendix 3

agents, advisors, consultants and

other third parties – key indicators
Agents, advisors, consultants and other third parties can be invaluable in identifying and developing
attractive business opportunities, helping to understand local customs and practices, and helping to
communicate with local government officials and businesses. Many of these agents, advisors, consultants
or other third parties may have cultural, ethical and business orientations that are different from BP. If
those differences are not addressed before entering into the relationship, then BP’s business objectives
may not be achieved and we may also be subject to significant adverse reputation impacts or legal
liabilities. In these circumstances, the appropriate management and regional or local legal contacts should
be consulted.

In a 1976 report to the United States Congress, • Are there strong indications that business in

the US Securities and Exchange Commission that country can be obtained only by bribing

identified the following as key indicators of officials?

potentially inappropriate activity by agents,

advisors, consultants and other third parties,
which should warrant scrutiny and precautions:
1. The relationship of the consultant to the
governmental entity or contracting party
• Is the consultant a businessperson with a
dual status as a government official?
• Is the consultant closely related to a
government official?
• Is the third party organisation owned by a
government official or his/her family?
4. The services to be performed
• Is it legal for the third party to act as such in
the country in question and with respect to
the project in question?
• Are the services of the third party really
necessary, or were they suggested merely to
provide cover for a prohibited payment?
5. The method and manner of payment
• Will the payment be all or partly in cash or
bearer instrument?

• Will the payment be made partly to another

2. The size of the payment
person?
• Is the payment excessive in light of
payments made by the company elsewhere • Will the payment be made in a country other
for similar services? than the one where the services were
rendered?
• Is the payment excessive in light of local
custom or local law for legitimate services? • Has the consultant requested any false
documentation (e.g. false invoicing or a failure
to report the payment to the host country
3. The nature of the payment
authorities?
• Has the third party made comments to the
effect that a particular amount of money is
needed in order for her/him to ‘get the
business’, ‘make the arrangements’, etc?
25
Appendix 4

a quick help to resolve conflicts of

interest
Conflict of interests could be caused by relationships internally as well as externally to the company.
Although it is difficult to anticipate all situations which might give rise to a conflict of interest, the
following rules will help you to resolve them.

Remember: ‘All employees are encouraged to • Do I feel loyalty towards the person or

raise questions or issues related to the Ethical company, which makes me want to help

Conduct Policy with their management. Internal them to be successful in obtaining business

Audit can provide assistance. When in doubt, with BP?

employees should ask before acting’.

• Do I feel unduly influenced to make this
person/company successful in the business?
Employees could ask themselves a number of
these questions: • Do I stand to gain anything by virtue of my
relationship with the individual? (This may not

• Do I feel comfortable with dealing with this necessarily be purely financial but could

person (friend or family) or company given involve invitations to functions, tickets to

my relationship with them? concerts or just the creation of an obligation

on the part of the other person.)
• Would I be concerned if everyone knew what
the relationship is and I remained involved in
the business transaction, especially if a deal
is concluded?

• Will people think that I preferentially assisted

this individual or company to get business?

• Do I feel under obligation due to the

relationship I have? Will I feel embarrassed or
awkward if they do not obtain the business
and I have been involved?

26
Do’s and Don’ts Do Not:
• Take any part in a business decision, process
Do: or transaction under a conflict of interest.
• Be clear about the nature of a conflict of
• Engage in outside activities, e.g. such as
interest (either real or perceived) and
secondary employment or consultancy,
therefore, the steps that must be taken to
directorships or freelance activities etc, which
avoid or manage it.
get in the way of BP’s claim on your time,
• Ensure that family ties, friendships or other incur the use of BP assets and resources or
relationships that could be seen to be an entail the application of proprietary
unfair influence (e.g. a family interest in an knowledge gained in BP service to the
outside company with which BP does benefit of an outside employer.
business) are isolated from the business
• Conceal a real or perceived conflict of
decision.
interest.
• Explicitly declare all conflicts of interest and
fully disclose all pertinent and material factors
to your management.

• Obtain the relevant management or Group

Chief Executive endorsement before
engaging in outside employment, consultancy
or directorships.

• Avoid putting yourself in a position where

your loyalties may become divided. Ensure
that the business decision, process or
transaction is insulated from even the
appearance of bias.

For further information or assistance, please contact your local Internal Audit team, or look at the Ethical
Conduct web site at http://gbc.bpweb.bp.com/ethics.

27
28
The maze featured in this booklet is based
on a small Roman mosaic labyrinth from
Avenches in Switzerland. It is in the
‘fortress’ style representing city walls with
four equally spaced gates.

Published by BP p.l.c.
© BP p.l.c.
July 2002

First published November 2000

bp and the Helios mark are registered trademarks of

BP p.l.c.

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