Health, Safety and Environment (HSE) Policy: Africa Oil has in place a Health, Safety and Environment Management System (HSE-MS) which is aligned to the requirements of ISO 14001. The HSE-MS incorporates an HSE policy. The policy commits Africa Oil to operate responsibly; creating a working environment that causes no harm to people; minimizing impacts on the environment; meeting or surpassing statutory requirements and best practice; holding itself and its contractors accountable for compliance with applicable policies and procedures; etc. The policy sets out requirements for company responsibility, accountability and performance. Africa Oil’s JV partner, Tullow Oil, has an integrated management system which incorporates a comprehensive Environmental, Health and Safety Management System (EHSMS). Tullow Oil also has its own HSE Policy which states, amongst other commitments, that the company is committed to maintaining a high standard of environmental performance and will comply with HSE laws, regulations and requirements of the country in which it operates; create a healthy and safe working environment; and provide appropriate training for all employees. All other contractors engaged by Africa Oil are required, through contractual agreements, to adhere to the company’s HSE policy. Identification of Risks and Impacts: ESIAs, in compliance with national law, have been conducted for all current seismic lines, drill sites and directly associated infrastructure (e.g. camps, access roads, disposal sites) in Kenya and Ethiopia. A Strategic Environmental Assessment (SEA) for the broader Lake Turkana development area has also been completed. ESIAs do not consider development beyond the current exploration and appraisal work. Whilst the ESIA reports were produced by different consulting companies and vary slightly in structure and approach, they do identify the key risks and impacts in compliance with the requirements stipulated in the IFC PSs. Potential risks and impacts were identified and tabulated, and for each impact, a series of mitigation and/or recommended actions have been developed to avoid, reduce and/or compensate for the impacts. The majority of the impacts for the different blocks were assessed as being minor after the application of the proposed mitigation measures described in the respective Environmental Management Plans (EMPs). In addition to the ESIAs Africa Oil and Tullow (together with their contractors) maintain formal systems for identifying HSE risks and impacts relevant to their specific operations on a continuous basis. Such systems include technical audits (internal and external), system audits (internal and external), management reviews, HSE meetings, and ongoing meetings with local communities and stakeholders. The risks and impacts are recorded in registers which capture the risk evaluation, necessary controls to manage the causes and consequences for those risks identified as significant. Should the exploration and appraisal be successful and any of the wells progress to production the Company will complete and submit detailed ESIA documents addressing local regulatory requirements and the IFC PSs. The Company will present these ESIAs to IFC for review and approval at least four months prior to start of any substantative construction. An ESIA is underway for the upstream area, with the draft of the scoping phase completed. The ESIA is intended to align with IFC PSs, EHS Guidelines, Good International Industry Practices (GIIP) and national legislation. An Environmental and Social Management Plan (ESMP) will be prepared, based on the findigs in the ESIA. A Cumulative Impact Assessment (CIA) will also be prepared and will consider the cumulative impacts associated with the three phases of the project. A high level scoping study (pre-ESIA report) for the proposed Hoima – Lokichar – Lamu crude oil pipeline has been produced for the Government of Kenya by independent consultants for activities associated with the Kenyan section. A number of potential impacts such as land acquisition and resettlement, on protected areas and on biodiversity and wetlands are expected to be of some significance due to disturbance by construction activities where the pipeline route passes. A draft scoping study, as part of an ongoing ESIA process has been completed, for the proposed midstream (pipeline) and downstream (port) facilities. Management Programs: Within its HSE-MS Africa Oil implements site specific Health, Safety, Environment and Security (HSES) management plans to ensure systematic planning and implementation of all aspects related to HSES within its activities. To complement the HSES management plans Africa Oil, in conjunction with its security, civil engineering and drilling contractors has developed a bridging plan to address any gaps in standards. The HSES management plans are informed by input from ESIA deliverables. They are designed to provide the interface between national laws, Africa Oil HSES policies, relevant standards, procedures and the contractors own documentation. Where contractors do not have the necessary policies, standards or procedures available the HSES plan provides the necessary information for contractors to follow. The HSES contains a list of objectives and targets which are linked to leading and lagging indicators that are measurable, documented, communicated and reviewed. The HSES Plan is supported by a number of HSE procedures such as: HSES Audit and Review Plan; Oil Spill Response; Non Conformance, Corrective and Preventative Actions; Hazard and Effect Management Process; and Job Hazard Analyses Procedure. These procedures are designed to mitigate/reduce risks and impacts associated with Africa Oil’s activities. Similarly Tullow implements comprehnsive EMPs to ensure impacts do not exceed those expected and identified within the ESIA and other relevant risk identification procedures. Tullow’s EMPs are aligned to its own comprehensive environmental and social standards and the requirements of relevant national legislation, ISO 14001, OHSAS 18001 and IFC PSs. In addition to the above, Africa Oil requires its contractors, who are integrated in the program organization, to establish and implement HSE management systems covering their activities in compliance with requirements stipulated in the HSES Management Plan. Africa Oil and Tullow’s management programs currently being implemented are adequate for the exploration and appraisal phase of the project. The company is committed to continuously improve on its management programs as the project advances towards production. Organizational Capacity and Competence: HSE responsibility for Africa Oil follows the reporting line from the CEO down through the organisation to each program member. There is an HSE manager who is responsible for both Kenyan and Ethiopian operations. Line manager’s are obliged to ensure that activities they are responsible for are planned, organised, carried out and documented according to the contract, regulations and procedures. All line managers are responsible for contacting the HSE Manager when support in HSE matters is needed. There are community engagement teams for both Kenya and Ethiopia accountable to the respective country general managers and through a dotted line to the HSE manager and VP of external affairs. Tullow maintains a similar organizational structure for HSE in the blocks that it operates. Although senior management carry the responsibility for ensuring the successful implementation of the Tullow Oil Environmental and Social Standards (TOES), HSE management is part of the day-to-day operational activities and is also regarded as a line function. There are HSE Superintendents and Environmental Control Officers for the Kenyan and Ethiopian operations. These specialists are accountable to the Regional Director for Sustainability. There is also a Social Performance Manager who is supported by a team of Community Liaison Officers who are spreadout in areas of operations. Whilst both Africa Oil and Tullow devolve HSE management responsibility to their respective contractors they do maintain oversight on alignment with corporate policies through bridging procedures and contractual agreements. Africa Oil’s management team values a relationship with IFC in carrying out its exploration and appraisal activities in line with industry good practice for oil and gas sector. The team has extensive experience in the sector, ranging through project acquisition, exploration and resource definition, production and financing. Whilst the current organizational arrangements are adequate for the current operations Africa Oil will enhance its HSE capacity through IFC PS focussed training for its senior management team and operational teams, and by hiring an Environmental, Social and Governance Manager.. Emergency Preparedness and Response: Africa Oil has established emergency preparedness and response plans and procedures, including oil spill contingency plans, for its operations in Kenya and in Ethiopia. The plan, which takes into consideration medical, operational and environmental emergencies, etc. is integrated with individual site plans and external agencies as appropriate. Equally for Tullow Oil, an effective emergency response and incident management capability is established in Kenya and Ethiopia with detailed emergency response and incident management plans implemented to mitigate, control and recover from credible emergency scenarios. In both cases emergency drills are scheduled regularly and conducted to ensure the effective implementation of and interaction between the contractors and Africa Oil (or Tullow Oil for its operated blocks) emergency response plan to identify potential areas for improvement. The drills are also undertaken to ensure that all site personnel as well as relevant government organizations are conversant with the emergency preparedness and response procedures. Records of these drills are kept. All employees and contractors are responsible for reporting any emergency incident to their supervisor or the responsible person of the area. Africa Oil is committed to continuously improve its emergency preparedness and response plan including updating the plan for the construction and operational phases should the project advance to production. Monitoring and Review: Africa Oil applies a number of mechanisms to monitor the effectiveness of its HSE management system and these include: performance audits, e.g. National Environmental Management Authority (NEMA) sanctioned annual audits for Kenya operations; internal audits; regular management review meetings; review of the aspects and impacts register; legal compliance audits and updating of the legal register; incident and accident reporting; and addressing external complaints. All these mechanisms have clearly defined procedures. The audit reports, incorporating corrective actions, are submitted to relevant senior HSE and operations management teams who are responsible for the implementation of all corrective actions. Time based corrective action plans are developed and implemented subsequent to these audits. All non-conformances are managed according to the company’s non-conformance, corrective and preventive actions procedure. This procedure defines accountability and authority for handling and investigating non-conformance, taking action to mitigate any impacts caused, and for initiating and completing corrective and preventative action. The company keeps a register of all health, safety and environment related incidents and accidents. Tullow Oil follows a similar process to monitor the effectiveness of its TOES for the its operations in Kenya and Ethiopia. Stakeholder Engagement In Kenya, stakeholder engagement is managed as follows: - In blocks that are operated by Tullow Kenya BV: stakeholder engagement is managed by Tullow under the general responsibility of the social performance manager based in Nairobi; - In block 9 operated by AOC (not currently active): stakeholder engagement was managed (and would be managed if operations were to resume in the future) by the Africa Oil vice president in charge of operations, based in Nairobi. In Kenya, various information and engagement activities are carried out by Tullow with a range of stakeholders, including local government at all levels from the county downwards, MPs for areas where blocks are located, community chiefs and elders. These activities are tracked in a dedicated information management system. A stakeholder register has been compiled and is being updated on an on-going basis. Direct interaction between the IFC and a range of stakeholders in Kenya (during the site visit) provided comfort that engagement was comprehensive and continuous, and that stakeholders’ views were duly taken into consideration. A similar arrangement applies in Ethiopia: - In the South Omo block operated by Tullow Ethiopia BV: stakeholder engagement is managed by Tullow under the responsibility of the managing director based in Addis Ababa; - In the Rift Basin block operated by AOC: stakeholder engagement is managed by the general manager of Africa Oil Ethiopia BV, based in Addis Ababa, under the general supervision of the Africa Oil vice president in charge of Operations, based in Nairobi. In Ethiopia, AOC are similarly engaging local government at Kebelle (community), Woreda (district) and Zone (region) levels. Woreda and Kebelle staff are associated to the identification of affected properties and the calculation of compensation. In general the project stakeholders have had limited prior exposure to the Oil and Gas industry, in either Kenya or Ethiopia, and has led to certain challenges in the stakeholder engagement strategy. At this point in time, although procedures are in place for stakeholder registration, information materials are available, and staff have been dedicated to community liaison and engagement, neither company has prepared a comprehensive stakeholder engagement plan or framework. Africa Oil will develop two stakeholder engagement plans (one for each country) for submission to the IFC and further public disclosure and to update them on a regular basis to reflect potential changes in institutional arrangements in either country and new stakeholders. Stakeholder engagement plans will address the following topics: - Legal framework (including both local legislation and IFC requirements, and review of potential gaps); - Stakeholder identification and categorization; - Past consultation and key outcomes thereof, including how feedback has been integrated in the project design and key mitigations; - Engagement methods that can potentially be used with each category of stakeholders; - Engagement plan at the different phases of the project; - Disclosure plan (identification of documents disclosed and venues where they are available); - Grievance management; - Resources, monitoring and reporting. Africa Oil will maintain records on stakeholder engagement including an account of main engagement events, key issues raised by stakeholders, grievance statistics, and resources allocated to stakeholder engagement and grievance management. Grievance Management A grievance management system is in place in Kenya in blocks operated by Tullow, with community liaison officers maintaining a log of grievances at all locations where the project is present, and a dedicated telephone hot line number. Grievance records indicate that the system is operational. Most grievances in Kenya were found to be related to recruitment, employment and local procurement issues, particularly in relation to employment or procurement coming to an end when a given activity in a given area is complete. Similarly, a grievance management system is in place in Ethiopia, with logs available. In Ethiopia, in contrast with Kenya, local people would typically use the avenue provided by local authorities at Kebelle and Woredal levels if they have to lodge a grievance. Per current Ethiopian legislation, all Woredas have their own grievance mechanism whereby any aggrieved citizen can lodge a grievance to a dedicated Woreda grievance officer. In both countries, the Company is committed to start the review of a grievance after a maximum of 7 days, and to provide a response after a maximum of 30 days. While the relevant procedures are in place in both countries, the grievance management system will have to be reflected in the Stakeholder Engagement Plans to be prepared by the Company (see previous section) and disseminated to the affected communities.