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 KAZAKHSTAN International Business Magazine №5, 2011
 Responsibility of Business: Strategies and Results
Responsibility of Business: Strategies and Results

Corporate social responsibility (CSR) in Kazakhstan is entering a phase of its maturity. Ten years ago the question of transparency of companies or their participation in the development of local communities did not arise, in general, today CSR has become an integral part of doing business for almost all large companies operating inkey sectors of the domestic economy. CSR plays a special role in the interaction of the state, society and oil and gas companies. Energy giants are creating their own charitable foundations within their structures; these charitable foundations provide educational grants, allocate money for infrastructure development of the regions and for sponsorship.

In 2011, the organizers of the Sixth Eurasian Forum made a decision to conduct the First Contest of Corporate Social Responsibility "Art-Namys" among the energy companies. This contest will take place a part of the Health, Safety and Environment exhibition. Taking into account the importance of this initiative, theInternational Business Magazine Kazakhstan decided to support this initiative and held a blitz-poll among the leaders of Kazakhstan's oil and gas sector, whom were asked two questions:

1. What are the principles the corporate social responsibility of your company is based on?

2. What results has the company achieved in the area of corporate social responsibility in 2010–2011?

Mark Rollins, President, BG Kazakhstan

1. BG Group believes corporate responsibility is a combination of four key factors: the way we do business, i.e. ethical conduct, open and transparent relations with our partners and suppliers; our people and their wellbeing; society and the role we play in socio-economic development; and the environment and the effort we invest in positively contributing to its protection.

BG Group recognises that the long-term sustainability of our business depends on establishing and maintaining effective relationships with our stakeholders. This means we manage our presence in host communities carefully and sensitively, and seek to make a positive contribution to locally-held goals for sustainable development.

2. BG Group has developed several major initiatives in Kazakhstan. We are supporting local content development by bringing international best practice to supply chain management. In partnership with the Kazakhstan Institute for Industry Development (KIID), BG Group will sponsor the registration of leading Kazakhstani companies on the First Point Kazakhstan joint-industry supplier database. This will assess the potential of these companies to enhance local content capability and propose improvement plans for them, guiding their modernisation in support of the Republic’s long-term policy in this area.

BG Group is joint operator of KPO, the joint venture which develops the giant Karachaganak field. We support nationalization of employment there. By the end of 2010 all skilled and clerical positions, 91 % of professional and supervisory roles and 62 % of managerial positions at KPO were filled by national staff. During 2010, KPO maintained its commitment to developing local content, working with 283 Kazakhstani companies and concluding contracts with them worth over $527m.

In 2011, BG Group began a programme of support for Nazarbayev University by funding a scientific library and a Chair at the Energy Research Centre. We are also supporting research at UK universities for faculty members. This complements our other educational initiatives, including support for the Almaty University for Power, Engineering and Telecommunications, which help develop human capital in the Republic.

BG Group is committed to environmental protection. In 2010, BG Group, KazTransGas and the Almaty City Akimat signed an agreement to launch the first NGV-refuelling compressor station in the country. The station allows compressed natural gas to be used as a fuel for municipal transport. Thanks to this, 200 buses now run on clean energy, enhancing air quality in Almaty. We are looking to spread this success to other regions.

Effective engagement with communities is important for BG Group. We are supporting a number of social projects addressing the most urgent needs of local communities. We also support a range of charitable causes, including the Astana Society for Disabled Children, the Special Olympics and other social organisations. KPO received “Paryz” award for the best social investment projects in 2008 and 2010.

Xu Keqiang,  General director, CNPC-International Aktobe Petroleum

1. For us, the vision of our business as socio-oriented one was at all times and is a priority task. We are always guided by the principles of close social partnership and human capital development. The main pillar of the management policy of our company, which employs over 8,000 people today, is not only the focus on investments and new technologies, but first of all on the employee. In this area the priority issues are occupational safety, people’s health, wages, and environment. With the improvement of the production performance indicators of the company, we got the possibility to pursue more effective social policies that positively affect the welfare of our employees and their families, and many local residents as well. The company provides considerable support to the local population of those areas where the company carries out the field operations. Over the time, the company has implemented in close constructive partnership with the akimat of the Aktobe region a large number of actions and socio-related programs.

CNPC-Aktobemunaygas JSC is the largest philanthropist in the region and is consistently among the top five generators of philanthropy in Kazakhstan. In December 2010 the company was awarded the grand prize at the Republican Contest of Social Responsibility Paryz, and in 2009 the silver medal Paryz in nomination The Best Social Project of the Year. Over the past 14 years, the expenses for sponsorship and charity of CNPC-Aktobemunaygas have amounted to 9.24 billion tenge, including 1.15 billion tenge in 2010 alone.   

2. Our company provided sponsorship to the agricultural producers who had turned out to be in the extremely difficult conditions after the strongest drought. Also, we provided targeted help to the people with low income, physically challenged, orphans, war veterans and retired. In 2010, $7.8 million of sponsorship was allocated for the purposes of construction of socio-related facilities, education and healthcare alone. From the beginning of the year, 499 million tenge have been directed for charity and sponsorship. Also, we provided considerable support to agriculture of the region by allocating 220 million tenge.

The annual funding of the health and safety events amounts to not less than 1,250 million tenge. We carry out a great deal of work to improve the living conditions of the field workers. A new central canteen for 350 people was built in the camp, and a recreation center and modern dormitories are also available.

In summer 2011, 966 children of the company’s employees spent their summer vacation in the Neftyanik, Yukon, Bereke, and Asem children’s camps. 16.965 million tenge total was spent for the said purposes. Over the last half a year 27.5 million tenge was directed for organization of vacation of more than 600 employees and retired of CNPC-Aktobemunaygas.

Jean Luc Porcheron, Managing Director, Total E&P Kazakhstan

1. Our corporate social responsibility is based on 3 main principles: Sustainable Development and Environment, Social Innovation and Diversity, Industrial Safety.

Total E&P Kazakhstan holds a 16.81 % share in the North Caspian Sea PSA. As one of the main stakeholders, we contribute to sustainable development through the fullest project integration in the local context and the implementation a socio-economic development program with the communities in the Atyrau and Mangistau regions.

That includes various Social Infrastructure Projects such as schools, hospitals, kindergarten, epidemiological centre, blood centre, water supply systems, electrical power lines, sport complex. A yearly sponsorship and donations programme has also been put in place in order to demonstrate a long term commitment to welfare and wellbeing of the local communities. Priority areas are mainly focused on education, healthcare, culture & sports and improvement of living conditions for veterans, disabled people and children.

Total E&P Kazakhstan is also contributing to sustainable development through education and training. Using its international experience, TOTAL E&P Kazakhstan is considering two ways of enhancing skills acquisition for highly qualified human resources earmarked for management positions in Kazakh companies or institutions: Extending the Total Scholarship program to a network of French companies and universities (KBTU, KazNTU, NU); In partnership with French authorities and ENA (French School of Administration), promoting and implementing a French-Kazakh training courses for selected graduates from the Academy of Public Administration.

2. Total E&P Kazakhstan initiated a new proposal on establishing Kazakhstan Welding Institute in collaboration with Karaganda State Institute and Ministry of Education and Science. The international recognition has been finally completed in July 2011 and Kazakhstan officially became 55th country member of the International Institute of Welding. Kazakhstan Welding Institute will provide a formal liaison with international experts promoting the adoption of new technologies in the domain of welding and fostering technology transfer and partnerships between foreign and local companies in this sector of activity.

Serikbek Kenesbekovich Yelshibekov, General Manager for Business Support at the National Company KazMunayGas JSC

1. Our company considers corporate social responsibility as a strategic direction and adheres in its activity to basic principles such as participation in international corporate social responsibility initiatives, transparency, active involvement, and economic efficiency.

Each of the directions of corporate social responsibility has its own criteria. For example, the policy in the area of sponsorship and charity is implemented, based on the criteria such as objective necessity and expediency, transparency and responsibility in the decision-making, practical efficiency of measures, positive effect on raising the company’s image, and control over the use of funds as per the stated purposes.

2. One of the key directions of corporate social responsibility, which the civil society groups are interested in, is the participation of the company in the society life through implementation of sponsorship and charity. For instance, in 2010–2011 the National Company KazMunayGas provided sponsorship in the conducting of a number of large international conferences and economic and investment forums. Among them, there were republican conference Labor Market and Prospect of Technical and Vocational Education, Intellectual Culture Forum, Astana Economic Forum, Eurasian Forum and KAZENERGY Exhibition, international conference for human resources management, and Eurasian Media Forum.

Much attention is paid to sports and propaganda of healthy life style both among the population and company’s employees. Supporting the national federations of boxing, tennis, judo and other sports organizations, KazMunayGas sets a task to attract the youth to go in for sports. Thus, in the regions where the company operates the sports grounds were built to provide free access of the population to playing football, tennis, volleyball and basketball. To develop mass children’s sports we initiate the conducting on these sports grounds of an annual republican tournament in mini football for the children and teenagers to win the cup awarded by the National Company KazMunayGas.

Among the large investment projects which are financed through sponsorship of KazMunayGas and are aimed at socio-economic development of the regions, we would like to mark the construction of a health resort offering climatotherapy and therapeutic muds therapy on the bank of the Lake Balkhash, Britain partner school Haileybury Astana, multifunctional sports complex in Pavlodar, and setting up the International Boxing Association (AIBA) Branch in Almaty.

Every year we allocate funds to provide welfare to the war veterans and persons equated to them, including support under the dwelling repair program. Veterans of the oil and gas industry get welfare from our public fund Minaishi named after N.A. Marabayev. Besides, the former company workers are actively engaged to take part in all ceremonial events of the oil and gas industry.

Orphanage Svetoch (Astana), Corporate Fund SOS Children’s Villages of Kazakhstan, Society of Physically Challenged Children of Astana, Aktobe Oblast Corporate Fund of Social Support Shapagat, Social Welfare Fund Sharapat (Astana) and other social organizations are provided charity every year. Also, we provide financial support in the conducting of the annual Charity Ball in Almaty.

To support and promote young talents, considerable funds are directed for sponsorship support of such initiatives as the Kazakhstani TV project Intellectual Contests, educational programs, equipping the chemistry classrooms labs, conducting a series of open lessons in the Astana-based Kazakh-Turkish lyceum, project Scholarship and Grants named after S. Utebayev, and participation of the choreographic troupe Tumar at international contests and festivals, etc.

The KazMunayGas Company and its subsidiaries took an active part in the events organized to provide welfare and to build dwelling for those who had suffered as a result of natural disasters happened in the Aksu rayon of the Almaty Oblast, also in the Eastern Kazakhstan and Western Kazakhstan Oblasts.

To support the initiative of the state on preservation of the cultural and historic heritage, in 2010 KazMunayGas started the implementation of a project of construction of the Kazakhstan’s Museum of History in Astana.

Rzabek Artygaliyev, General Manager, Policy, Government and Public Affairs, Tengizchevroil LLP

1. The Tengizchevroil definition of Corporate Responsibility (CR) is perhaps more broad than we see in other Kazakhstani companies. At TCO, CR is not just about what we give back to our communities or how we treat our employees. Our definition of Corporate Responsibility includes our ethics, our environmental performance and how we collaborate with our employees, the government and our local communities. Therefore, CR is extremely critical to our every activity, each day at Tengizchevroil.

Tengizchevroil’s mission, vision and core values are the foundation for our accomplishments and leadership in CR. Our core values are defined in the TCO Way and through our Strategic Intents, which you will read more about in this publication. Additionally, we measure our CR success by reviewing our results in the following areas:

Corporate Responsibility and Governance

Excellence in Operational Performance as it relates to Health, Environment & Safety

Strategic Workforce Development

Community Investment and Engagement

2. TCO invests in the community of Atyrau Oblast through several different programs. Two of our signature programs are: Egilik (benefit in Kazakh) and the TCO Community Investment Program. Over the life of the program, TCO has funded various social infrastructure projects for Atyrau Oblast including schools, hospitals and clinics, as well as the construction of water, electricity and water systems. At the end of 2010, TCO had invested $165 million in the Egilik and Atyrau Bonus programs since 1993.

In 2009 and 2010, Tengizchevroil budgeted approximately $1 million annually for an additional voluntary Community Investment Program (CIP). Tengizchevroil has recently updated the CIP to more closely align with the needs and goals of our community and business.

At TCO, our greatest asset is our employees; therefore a vital TCO strategy is continued investment in our team. From competitive compensation to world-class training programs; TCO has a long tradition of success in developing a workforce that can compete on an international level. TCO’s success is rooted in the quality of our employees and contractors. We are committed to hiring employees from the communities in which we operate. We strive to provide a world-class, positive work environment and a strong benefits package that values the interests of our workforce. TCO continually improves our training programs to foster individual growth and the achievement of business goals.

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More Oil Soon  Editorial 
Kazakhstani Сontent in Procurement of Subsoil Users  Yerbolat Yerkebulanov, Dariya Saginova 
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