ADVOCATING HUMAN RIGHTS IN SUPPLY CHAIN

Raja Tatina Raja Musa

Principal, Social Performance

PETRONAS

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Presentation Outline

❑Overview of Human Rights Implementation in Supply Chain

❑PETRONAS Contractors Code of Conduct on Human Rights (CoCHR)

❑Human Rights in PETRONAS Contractors HSE Management Process

❑Key Success Factors & Challenges

❑Conclusion

❑References

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Implementing Human Rights

Government

Duty to Protect

General state regulatory and policy functions

Supporting business respect for Human Rights in conflict-

affected areas

Ensuring policy coherence

Business

Duty to Respect

Policy/Commitment

Human Rights Due Diligence

Access to Remedy

A Company’s Role Differs from the Government’s inImplementing Human Rights

Reference: United Nations Guiding Principles on Business and Human Rights

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Human Rights Elements Applicable to PETRONAS

Overview of Human Rights Implementation in Supply Chain

2015

• Launch of PETRONAS Human Rights Commitment

2016

• Engagement sessions conducted for Procurement fraternity

2017

• PETRONAS Contractors Code of Conduct on Human Rights (CoCHR)

• Human rights article incorporated in General Terms & Conditions

• Engagement with 1,400 contractors

2018

• Compliance assessment CoCHR on selected contractors

• Inclusion of human rights in contractors HSE management process

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PETRONAS Contractors Code of Conduct on Human Rights (CoCHR)

Human rights article on compliance to the PETRONAS CoCHR was included in contract General Terms and Condition (GTC). The article includes a clause for PETRONAS to terminate a contract in the event that a contractor fails to comply with CoCHR.

CoCHR requires the Contractors to:

❖ Respect internationally-recognised human rights, complying with PETRONAS’ Code of Conduct and

Business Ethics (CoBE) and all relevant legal requirements.

❖ Ensure policies and guidelines are in place to demonstrate its respect for human rights.

❖ Provide human rights awareness training to its employees and contract personnel.

❖ Establish a grievance mechanism for their employees, contract personnel and any party involved in

providing services to PETRONAS.

❖ Provide timely feedback to PETRONAS regarding the contractor’s human rights performance within

the duration of the contract.

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PETRONAS Contractors Code of Conduct on Human Rights (CoCHR)

Freedom of Labour

Prevention of Child Labour

Wages and Benefits

Working HoursEstablish Grievance Mechanism

Non-Discrimination

Freedom of Association

Humane Treatment

Foreign and Migrant Workers

The Nine (9) Principles in CoCHR

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Human Rights Requirements in PETRONAS Contractor HSE Management Process

▪ Contractor to provide evidence for meeting the requirements of CoCHR during pre-qualification

▪ Human rights article included in contract document and Invitation to Bid (ITB).

▪ Contract owner/user to confirm that contractor complies with the CoCHR during kick-off meeting

▪ Contractor to execute HSE plan which has incorporated human rights requirements:

• Inclusion of human rights in HSSE induction

• Establishment of grievance mechanism

• Monitoring of grievance

• Reporting on percentage of grievance cases closed to PETRONAS

• Conduct camp inspection where applicable

• CoCHR compliance assurance

▪ Contract owner/user to monitor and ensure effectiveness of contractor HSE plan.

▪ Contract owner/user to conduct performance evaluation on contractors. Inadequate hiring practices

will be highlighted as area of improvement for future attention of new contract owner/user.

▪ Contractor and contract owner/user to ensure closure of all outstanding matters pertaining CoCHR

Contractor Selection & Pre-Qualification

Tendering, Evaluation & Contract Award

Pre-Mobilisation

Execution

Demobilisation & Close-Out

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Key Success Factors

Leadership & Commitment

Embedding human rights in established

HSE-Management System

Effective planning and collaboration

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Conclusion

▪ Managing human rights is crucial to sustain the Company’s long term growth

▪ Collaboration between Company and Contractors is the key to success• Generate good practices• Meet growing stakeholder expectation

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References

United Nations. (2011). Guiding Principles on Business and Human Rights: Implementing the United Nations “Protect, Respect and Remedy” Framework. New York and Geneva: UN

PETRONAS Human Rights Commitment (2015). (https://www.petronas.com/sustainability/social-stewardship/human-rights-commitment).

PETRONAS Contractors Code of Conduct on Human Rights (2017). (https://www.petronas.com/sustainability/social-stewardship/petronas-contractors-code-of-conduct-on-human-rights).

PETRONAS Contractor HSE Management Standard (Revision: 2018)

PETRONAS (Petroliam Nasional Berhad). (2018). Sustainability Report 2017 – Moving Forward Together. Kuala Lumpur: PETRONAS

PETRONAS (Petroliam Nasional Berhad). (2017). Sustainability Report 2016 – Building Strength through Adversities. Kuala Lumpur: PETRONAS

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Thank you for your attention.

Questions & Answer

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