See also the broader UNEP FI Environmental and Social Risk Briefing as well as these resources.
This sector includes natural and petroleum gas, fuel oils, petrochemicals, lubricants, petroleum, other by-products and the emerging market for bio-fuels (derived from animal fats or more commonly vegetable crops such as rapeseed or palm oil).
The core phases are:
- Exploration (including seismic surveys and drilling)
- Oil field development (including developing infrastructure - refer to the Infrastructure briefing for further information)
- Production (including drilling, separation, compression and dehydration)
- Refining (primary separation by distillation; secondary conversion – ‘cracking’). The production of different products depends on the composition of the crude oil, the technology of the refinery and market demand. (See also the Chemicals and Pharmaceuticals briefing)
- Transportation (by pipeline above or below ground or on the sea-bed; by boat; by road) and storage
- Retail and distribution
Key human rights related risks include:
- Workplace conditions, particularly health and safety in the workplace
- Threats to livelihoods due to high use of and environmental impact on resources - including land and other natural resources previously depended upon by local (often rural and sometimes indigenous) populations; plus relocation of communities away from traditional means of living
- An influx of large, mainly male, migrant populations can disrupt social cohesion, and can lead to the spread of disease (eg HIV/Aids) to the existing population
- Security contractors in areas of conflict may be connected to military/paramilitary groups
- Misuse of revenues (corruption) by government officials may reduce local populations’ access to services
- Existing transport networks and local infrastructure (including health and access to water) may be over-stretched
- Loss of income following closure of installations
Relevant voluntary and trade initiatives include:
- The Extractive Industries Transparency Initiative (EITI): supports improved governance in resource-rich countries through the verification and full publication of company payments and government revenues from oil, gas, and mining
- The Voluntary Principles on Security and Human Rights : developed to guide companies in balancing the need for safety and security while respecting human rights
- The World Petroleum Council and the International Petroleum Industry Environmental Conservation Association (IPIECA): they have produced a training programme on human rights and the oil and gas industry
There are links to these initiatives in the resources section.
WORKPLACE CONDITIONS
What does this cover?
Workplace conditions include factors such as working hours, wages, health and safety and disciplinary practices.
What are the main issues for the oil and gas sector?
Health and Safety
- Fatal and non-fatal incidents caused by major events, eg fires, leakage, faulty equipment or risk of explosion of volatile materials
- Fatal and non-fatal incidents and injuries that could have been prevented with proper management systems and controls, information and education of employees (including but not limited to relevant information being translated and accessible for migrant employees) and protective uniforms/equipment
- Spread of communicable disease among workers due to lack of education and/or living conditions
- Mismanagement of an accident (eg fire, plant shut-down, broken pipe)
- Employee exposure to attacks and abuse from local people resenting or resisting the project’s presence
Migrant workers
Migrant workers are often a large component of the workforce.
- Migrant workers may be subject to degrading or life-threatening treatment and/or lack of equal opportunity for promotion, due to discrimination against workers from other cultures/races
- This can also include discrimination with regard to working hours, proper training, housing conditions, access to health care or access to education
- Migrant and immigrant workers can have their travel documents held by the employer as a condition of work. This takes away their freedom of movement and is a version of bonded labour
SECURITY OF OPERATIONS
What does this cover?
Security operations cover the activities undertaken by a company and/or their contractors to protect their assets and uphold the safety of their employees. Oil and gas facilities may be located in areas of current or recent conflict, which can lead to particular problems in relation to security.
What are the main issues for the oil and gas sector?
- In conflict zones, security contractors can be complicit in fuelling conflict by aiding paramilitaries. This can include the payment of protection monies to paramilitary groups
- Security forces can over-react to protests against the project. This can result in escalation of violence, injury and death of civilians or union members exercising their right to protest
- Security operations should extend to employees’ safety beyond the oil/gas field, to ensure that workers are not exposed when travelling to and from work, and in housing facilities
- Lack of effective security can lead to attacks, theft of dangerous equipment and an unsafe/insecure environment for workers
- Lack of effective security creates health and safety risks for the general public (especially children/young people unaware of the dangers of machinery and equipment)
CONTROLS AND MITIGANTS
- Written health and safety plan communicated to all workers in their own language and supported by robust governance procedures
- Written emergency preparedness/accident response plan to ensure safety of workers in the event of explosion or other serious incident
- Written policies and procedures around anti-discrimination and equal opportunities, including the protection and welfare of migrant workers
- Written policies and procedures around security, covering the employment and training of security workers; dealing with violent and non-violent protests; and use of local police force if arrests or detention are necessary
- Companies should communicate their policies regarding ethical conduct and human rights to security providers, including the need for personnel to receive adequate and effective training
- The type and number of security contractors deployed should be competent, appropriate and proportional to the need
- In cases where physical force is used by security, such incidents should be reported to the appropriate authorities and to the company. Where force is used, medical aid should be provided to all injured persons
- A security contractor should respect the confidentiality of information obtained as a result of its position as security provider
Companies managing their own activities to reduce risk of human rights violations will also be aware of the potential human rights violations which may be committed by business partners in their supply chain. Each of the human rights issues considered by a potential client can be relevant to their suppliers. The supply chain will vary considerably from sector to sector and from company to company.
WORKPLACE CONDITIONS
What does this cover?
Workplace conditions include factors such as working hours, wages, health and safety and disciplinary practices.
What are the main issues for the oil and gas sector?
The supply chain needs to be considered at various stages in the oil and gas process, at which contractors and sub-contractors may be used. Issues may include:
- Failure to ensure safety and security of transport and storage of hazardous materials at all stages in the production process
- Complex operations involving a number of sub-contractors may make it more difficult to ensure that health and safety standards are understood and rigorously implemented
ECONOMIC RIGHTS
What does this cover?
Economic rights include the right to work, right to a fair living wage and right to an adequate standard of living. Because human rights are inherently interrelated and inter-dependent, economic rights also support the realisation of other rights such as the right to health, housing, participation in the culture of the community, education, the right to found a family and so on.
What is the main issue for the oil and gas sector?
- Procurement activities can have a positive, neutral or negative impact on the local economy and local community. For example, if skills (e.g. for cleaning, construction, catering) exist but local companies struggle to operate at a large scale, then larger, non-local suppliers may be selected. This reduces the contribution that the oil and gas operations make to the local economy
CONTROLS AND MITIGANTS
- Health and safety plan communicated to all workers in their own language and supported by robust governance procedures. Effective health and safety procedures need to be built into contractual arrangements
- Written procurement policies and procedures in place which encourage the use of local suppliers and support the use of SMEs (small and medium enterprises)
LIVELIHOOD AND STANDARD OF LIVING
What does this cover?
This covers the right to work, right to a fair living wage and right to an adequate standard of living. Because human rights are inherently interrelated and inter-dependent, these rights also support the realisation of other rights such as the right to health, housing, participation in the culture of the community, education, the right to found a family and so on.
What are the main issues for the oil and gas sector?
- Threats to livelihoods and life due to monopolisation of land and other natural resources previously depended on by local (often rural) populations, plus relocation of communities away from traditional means of living.
- Reduced standard of living from environmental impacts eg dust, vapours, emissions, vibration, noise, vehicle movement and impact
- Health and safety impacts include disposal of waste, use of dangerous chemicals and transport movements
- Economic dependency can be a problem following closure
- Strain on infrastructure and public services eg transport networks and local infrastructure including basic services (health, education, water) leading to local population being excluded from these services
LOCAL AND INDIGENOUS RIGHTS
What does this cover?
Indigenous rights cover issues associated with the sector’s activities that impact on ancestral land. This includes the foundation of cultural and spiritual identity plus the use of natural local resources for medicine, housing, food, clothing and so on.
What are the main issues for the oil and gas sector?
- Lack of free, prior and informed consultation with local and indigenous populations and/or lack of process to explore this can lead to destruction of identity and livelihood
- Violent, repressive and life-threatening removal of communities or indigenous groups from their land. This may be facilitated by host governments which do not recognise indigenous groups or their rights
- Lack of, or unfair, compensation mechanisms
- Revenues may be channelled by host governments to support the national economy/development agenda, from which local and indigenous people do not benefit
- Damage or change in access to cultural/historical sites which form the basis of the identity of indigenous groups
IMPACT OF MIGRANT POPULATION
What does this cover?
Impact of migrant populations covers human rights such as the right to health, adequate standard of living, and non-discrimination that are threatened due to large influxes of migrant workers into a locality.
What are the main issues for the oil and gas sector?
- Large, mainly male, migrant populations away from their families represents a major market for prostitution. This can lead to the spread of STIs/STDs (including HIV/Aids) within the area and to families when they return home
- Basic health and hygiene standards of housing provided to workers can be poor and lead to illness and communicable disease passed on to the existing local population
- Social conflict and negative impact on social cohesion can occur between migrant communities and the local population
CONTROLS AND MITIGANTS
- Community awareness and education plan as part of health and safety measures
- Emergency response plan to protect affected communities in the event of major accident eg: provision of emergency water supply to local community if usual sources are contaminated
- Clearly defined procedures around use of indigenous peoples’ knowledge and resources, including payment
- Policies and procedures to ensure the free, prior and informed consultation of local and indigenous communities; ensuring that vulnerable groups are part of the consultation process. There should be a complaints mechanism available to local communities
- Policies and procedures around conservation and sustainable use of finite resources eg water, energy, land, which take account of local community need for these resources now and in the future
- Social assessment to evaluate a project's positive and adverse effects on indigenous peoples and examine alternatives where adverse impacts may be significant
- Policy and procedures around the relocation of communities to allow company development, including measures around consultation, compensation and continuation of livelihoods
- Policies and procedures to ensure that migrant workers are protected and provided with adequate facilities, that local workers are used where possible to reduce the need for migrants and that facilities are provided which enable families to live together
ABUSE OF HUMAN RIGHTS BY HOST GOVERNMENTS
What does this cover?
This covers human rights abuses carried out by or on behalf of the government with which the oil/gas company has a relationship. It particularly relates to those abuses that may be perceived to ‘benefit’ the company in question.
What are the main issues for the oil and gas sector?
The main issue for the company is that if it benefits (directly or indirectly) from the abuse by the government, then it may be seen to be complicit in the abuse. Because of the large footprint of oil and gas operations, and the importance to national economies of natural resources, there may be potential for:
- Government use of forced or bonded labour to extract and realise national resources
- Violent removal, severe repression and/or arrest of protestors and indigenous groups by governments or their agents
CONTROLS AND MITIGANTS
- Compliance with local/national law is a minimum benchmark
- Application of consistent and effective management practices
- Ensuring that agreements with host governments reflect the rights of indigenous and local people
