Social Balance 2008

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SOCIAL AND ENVIRONMENTAL REPORT 2008 WWW.PETROBRAS.COM

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YSOCIAL ANDENVIRONMENTAL

REPORT2008

SUSTAINABILITYBIODIVERSITY

COMMUNITYHUMAN RIGHTS

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ETHICSDIAL

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EDUCATION

EDUCATION

VALUESTECHNOLOGY

ECO-EFFICIENCYVALUES

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ENVIRONMENTTRANSPARENCYBIODIVERSITYCOMMUNITY

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ETHICSSTRATEGY

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DEVELOPMENT E C O - E F F I C I E N C Y

Report printed on Suzano Reciclato paper (100% recycled paper trimmings, 35% post-consumption and 65% preconsumption), with inks from renewable raw materials, oilseed-base and heavy metal-free pigments, under standard ISO 18 000.

Vision for 2020We will be one of the five largest integrated energy companies in the world and the pre-ferred choice among our stakeholders.

MissionOperate in a safe and profitable manner in Brazil and abroad, with social and environ-mental responsibility, providing products and services that meet clients’ needs and that contribute to the development of Brazil and the countries in which it operates.

ProfilePetrobras is a publicly listed company based in Rio de Janeiro, Brazil. Rated as invest-ment grade, it has shares and ADRs traded on the stock exchanges of São Paulo (Bo-vespa), New York, Latibex and BCBA. It operates on an integrated and specialized basis in the following segments of the oil, gas and energy industry: exploration and produc-tion, refining, trading, transport and petrochemicals; byproduct distribution; natural gas; biofuels and electricity. It was founded in 1953 and today is the world’s ninth largest oil major by market value, in accordance with the ranking of consulting firm PFC Energy. The company, top in the Brazilian oil sector, operates in another 27 countries, and its reserves total 15.1 billion boe according to the SPE criterion. The 2009-2013 Business Plan forecasts investments of US$ 174.4 billion.

Vision 2020 characteristicsOur operations will be notable for:> Strong international presence > World scale prominence in biofuels> Operational excellence in management, technology and human resources> Profitability> Benchmark in social and environmental responsibility> Commitment to sustainable development

Policy of social resPonsibility

health, safety and enVironMent GuidelinesHealth, Safety and Environment Policy (HSE)

Educate, enable and commit the employees with HSE ›

matters, involving suppliers, communities, competent

entities, entities that represent the employees and other

related parties;

Encourage registration and training in HSE inssues and ›

consider, in the consequence and recognition systems,

their performande in HSE;

Act in the endorsement of health, in the protection of ›

the human being and the environment by means of risk

identification, control and monitoring, adapting safety

processes to the best world practices and being prepared

for emergencies;

Assure sustainability of projects, enterprises and ›

products throughout their life cycles, considering

impacts and benefits in economic, environmental, and

social scales;

Consider operation and product eco-efficiency, ›

mitigating adverse local impacts inherent to the

industry’s activities.

1. Leadership and ResponsibilityWhen Petrobras integrates safety, health and environment

to its business strategy, it is reaffirming the commitment of

all its employees and outsourcees to strive for excellence in

these areas.

2. Legal ComplianceThe company’s activities must abide by the prevailing legisla-

tion in the areas of safety, health and environment.

3. Risk Assessment and ManagementRisks inherent to the company’s activities must be identified,

assessed and managed in order to prevent accidents and/or

minimize the effects.

4. New EnterprisesThe new enterprises must law-abiding and include the best

practices of safety, health and environment throughout their

life cycle.

AbAnet Prize — Awarded by the Brazilian Advertisers’ As-

sociation (ABA) and by Interactive Advertising Bureau Brasil

(IAB) in the Social Responsibility (gold) and Relationship and

Nurture-Loyalty Campaign (bronze) categories.

Aberje Prize — National award in the Communication and

Press Relations category.

AbMn Prize — Awarded by the Brazilian Marketing & Busi-

ness Association (ABMN), in the Business Social Responsibil-

ity, Energy Industry and Product categories.

AnuAl bAlAnce 2008 - GAzetA MercAntil — Awarded by Gaze-

ta Mercantil to Liquigás, elected the best company in Bra-

zil’s oil and gas sector, according to the ranking of the Anual

Balance business yearbook published by the newspaper.

best in the AMAzon Prize — Prize of the Promoter Program to

companies that further social development in the Amazon.

best offshore And inlAnd WAter coMPAny AWArd — Award-

ed by the magazine Revista Maiores e Melhores do Trans-

porte & Logística 2008, winner in the Best Transportation

Operators category. The choice was made based on the bal-

ance sheets of 850 companies in the transportation sector.

brAziliAn nAtionAl Prize for Public AdMinistrAtion — One of

the strategic actions of the Quality Program in Public Service,

coordinated by the Ministry of Planning, Budget and Manage-

ment, the company was awarded the prize in the Gold category

for the significant management improvement for innovation,

cost reduction, quality of services and its client satisfaction.

citizenshiP institution 2008 – citizenshiP PersonAlity —

Awarded by Unesco, Brazilian Press Association (ABI) and the

newspaper Folha Dirigida, focusing on its contributions to re-

inforce citizenship and social development in Brazil.

coMPAny of universiy students’ dreAMs — Elected in a sur-

vey by the consulting firms Cia de Talentos and LabSSJ.

corPorAte citizen certificAte — Awarded by the Regional

Accounting Council and Rio de Janeiro State Federation of In-

dustries (Firjan), to encourage the creation, publication and

valorization of the social reports of Brazilian companies and

organizations.

14. Product ManagementThe company must do its best in terms of safety, health and

environment of its products from their origin to final des-

tination, and to strive to constantly reduce impacts that

they may cause.

To Petrobras, social responsibility is the integrated, ethical,

and transparent management of its business interests and

activities and of its relationships with all of its stakeholders,

furthering human rights and the full exercise of citizenship,

respecting human and cultural diversity, working to eradi-

cate discrimination, degrading work, child and forced labor,

and contributing to sustainable development and to reduce

social inequality.

1. Corporate PerformanceAssure Petrobras System’s corporate governance is com-

mited to ethics and trasparency in its relationship with its

stakeholders.

2. Integrated ManagementGuarantee integrated social responsability management

throughout the Petrobras System.

3. Sustainable DevelopmentCarry out Petrobras System’s business interests and activi-

ties with social responsibility, meeting its commitments

pursuant to the principles set forth by the UN’s Global Com-

pact, and contributing to sustainable development.

rewards, Prizes and certifications

dci Prize – Most AdMired coMPAnies — Petrobras was elected in

the Oil & Gas and State Capital segments. The prize was award-

ed by the newspaper DCI (Diário do Comércio e Indústria) in

recognition of the most recalled and admired companies voted

by more than 2,000 Brazilian executives and entrepreneurs.

ÉPocA neGócios 100 — According to the survey by Editora

Globo and Troiano Consultoria de Marca, Petrobras was top

in the general ranking and in the Energy and Fuel Distribu-

tion sectors, in addition to the requisites of Admiration, Con-

fidence and Ethics, Quality of Products or Services, Social

and Environmental Commitment, History and Progress, and

Groundbreaking Attitude.

excelenciA ciudAdAnA Prize — Awarded by the Centro Lati-

no-Americano de Desarrollo (Celade) for the Reciclá a Diário,

in Uruguay.

five World leAders in the enerGy sector — Petrobras was

elected one of the five world leaders in the energy sector and

second largest corporation in Latin America, according to

Goldman Sachs studies and the magazine AméricaEconomía.

intAnGíveis brAsil Prize — Awarded by the magazine Consu-

midor Moderno in the Corporate Know-how category.

investor relAtions GlobAl rAnkinGs — Awarded by MZ Con-

sulting with support from PR Newswire, KPMG, Bloomberg,

The Bank of New York Mellon, NYSE Euronext, Arnold & Por-

ter Associados and Demarest & Almeida Advogados, for the

Investor Relations web portal, in six categories, including the

Best Online Annual Report in the Oil and Gas industry.

lArGest in lAtin AMericA — Top of the list of the largest open

corporations by market value in Latin America in 2007, ac-

cording to the survey of Economática, a company specializing

in financial information.

MArketinG best Prize — Awarded by the Editora Referência,

MadiaMundoMarketing and Escola de Administração de Em-

presas de São Paulo of Getulio Vargas Foundation. The com-

pany received three prizes.

MArketinG best sociAl resPonsibility Prize — Received

nine awards from the Editora Referência and Madia Mar-

keting School.

Most AdMired brAziliAn coMPAnies — Rating of Revista Carta

Capital magazine. Petrobras was the most admired company

for its commitment to Brazil and solid financial backing; third

placed in the Top Ten category. Second ranking in the largest

Latin American corporations.

PetroleuM econoMist AWArds — Energy Company of the Year

2007 Prize.

rAnkinG of the 1000 lArGest brAziliAn coMPAnies by net

eArninGs — Publication of newspaper Valor Econômico in

partnership with Getulio Vargas Foundation (FGV) and Se-

rasa, in the Oil and Gas segment. Was elected the Value Com-

pany, top award to the company that obtains the highest rat-

ings in indicators such as financial, corporate governance and

socioenvironmental responsibility.

sesi Prize for QuAlity At Work – sPeciAl cAteGory — Award-

ed the company’s performance in social responsibility with

focus on the internal public.

sociAl resPonsibility Prize — Awarded by the Comité de

Administración de los Recursos para Capacitación (Carec),

linked to the Peruvian Ministry of Energy and Mines, in the

Exploration Projects in Peru category.

sustAinAble Attitude Prize — Awarded by the Rio de Janeiro

Chamber of Commerce and Industry (Caerj).

the elected survey — Run by the magazine Revista Quatro

Rodas that elected Petrobras Distribuidora in the Lube Oil and

Gas Station categories.

the World’s Most sustAinAble oil corPorAtion — Rating of

Management & Excellence (M&E). Petrobras was recognized

in a survey as the world’s most sustainable oil company.

toP consuMer seAl – excellence in consuMer resPect And

service — Awarded to Liquigás and Refap by the National In-

stitute of Consumer and Citizen Education (INEC).

toP of Mind — Awarded by Datafolha as the brand most often

recalled by the Brazilian consumer in 2008 in the Fuels and

Environment categories.

toP sociAl Prize — Awarded 21 prizes by the Association of

Brazilian Sales & Marketing Directors (ADVB) in Rio de Janei-

ro and São Paulo, as incentive for best practices in companies

and agencies with actions that further economic, political and

social development in Brazil.

trusted brAnds survey — Awarded by Reader’s Digest

Selections and Ibope Solution, in the Social Responsibility

category.

trAnsPArency troPhy — Awarded by the National Associa-

tion of Executives in Finance, Administration and Accounting

(Anefac) for the ten open corporations that presented greatest

accounting transparency in their balance sheets.

PetroleuM econoMist AWArds — José Sergio Gabrielli

de Azevedo, Petrobras CEO, chosen Energy Executive of

the Year.

interMArket Prize — Awarded to Sergio Machado,

Transpetro CEO, as one of the most outstanding person-

alities of the year.

the eQuilibrist Prize — Maria das Graças Silva Foster, Gas

& Energy Director, was elected Executive of Finances 2008

by the Brazilian Institute of Finance Executives (IBEF).

deeP offshore technoloGy conGress Prize — handed to

researcher Mauro de Oliveira from Cenpes, in the category

Groundbreaking Technology for the optimized configura-

tion design of offshore oil production platforms.

AbiQuiM Prize 2008 — In recognition to the work of re-

searcher Eduardo Falabella in developing DME, a flexible

and environmentally sustainable alternative fuel.

orville derby MedAl — Awarded by the Brazilian Geology

Society to Edison Milani from Cenpes, for his contribution

to the geological knowledge of Brazilian territory.

MedAl of the nAtionAl order of scientific Merit —

Awarded to Marcos Assayag, in the Technological Sci-

ences category.

5. Operation and MaintenanceCompany operations must be performed as provided in set

procedures, and using the proper facilities and plant, in-

spected and guaranteed to meet safety, health and envi-

ronmental requirements.

6. Change ManagementTemporary or permanent changes must be assessed in order

to eliminate and/or minimize risks that may be caused by

such change.

7. Goods and Service ProcurementSafety, health and environment performance of out-

sourcees, suppliers and partners must be compatible with

the Petrobras System.

8. Capacity Building, Education and ConsciousnessCapacity building, education and consciousness must be con-

stantly encouraged to reinforce the commitment of the work-

force to its performance in safety, health and environment.

9. Information ManagementInformation and know-how relating to safety, health and envi-

ronment must be accurate, updated and documented for easy

consultation and use.

10. CommunicationThe information relating to safety, health and environment

must be clear, fast and objective to achieve the desired effects.

11. ContingencyEmergencies must be foreseen and confronted rapidly and ef-

ficiently to cause minimum damage.

12. Community RelationsThe company must do its best for the safety of the communi-

ties where it operates and keep them informed about impacts

and/or risks that may occur as a result of its operations.

13. Analysis of Accidents and IncidentsAccidents and incidents arising from the company’s activities

must be analyzed, investigated and documented in order to

prevent repetition and/or to assure the least possible damage.

15. Ongoing Improvement ProcessOngoing improvement of the performance in safety, health

and environment must be encouraged at all levels of the com-

pany to assure its progress in those areas.

4. Human rightsRespect and support internationally acknowledged human

rights, basing Petrobras System’s actions on furthering the

principles of decent, non-discriminatory labor.

5. DiversityRespect the human and cultural diversity of its workforce

and of the contries where it operates.

6. Labor PrinciplesSupport the eradication of child, forced, and degrading labor

in Petrobras System’s supply chain.

7. Sustainable Social InvestmentSeek social investment sustainability to drive social develop-

ment at the communities.

8. Workforce CommitmentAssure workforce commitment to Petrobras System’s Social

Responsibility Policy.

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related parties;








for emergencies;




social scales;







these areas.








life cycle.





































organizations.




they may cause.








social inequality.



stakeholders.






















in Uruguay.























keting School.







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category.







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CONTENTS PrinciPle 6 BuSiNESSES ShOuld uphOld ThE ElimiNaTiON Of diSCrimiNaTiON iN rESpECT Of EmplOymENT aNd OCCupaTiON 72 Combating prejudice and discrimination (PrinciPle 6) 72 Case study – labor 76

78 Environment PrinciPle 7 BuSiNESSES ShOuld SuppOrT a prECauTiONary apprOaCh TO ENvirONmENTal ChallENgES 80 Environment (PrinciPle 7) 80 mapping, monitoring and reducing impacts (PrinciPle 7) 83 Climate change (PrinciPle 7) 86 PrinciPle 8 BuSiNESSES ShOuld uNdErTakE iNiTiaTivES TO prOmOTE grEaTEr ENvirONmENTal rESpONSiBiliTy 88 Consumption of energy, materials and natural resources (PrinciPle 8) 88 Emissions, effluents and waste (PrinciPle 8) 91 Biodiversity (PrinciPle 8) 94 products, compliance and transportation (PrinciPle 8) 99 PrinciPle 9 BuSiNESSES ShOuld ENCOuragE ThE dEvElOpmENT aNd diffuSiON Of ENvirONmENTally friENdly TEChNOlOgiES 102 renewable energy (PrinciPle 9) 102 Case study – Environment 106

108 Transparency Stakeholder relations 110 products and services 115 PrinciPle 10 BuSiNESSES ShOuld wOrk agaiNST COrrupTiON iN all iTS fOrmS, iNCludiNg ExTOrTiON aNd BriBEry 120 anti-bribery and anti-corruption policies (PrinciPle 10) 120 Case study – Transparency 124

annexes 126 materiality Test 130 indicator matrix 132

message from the CEO 2

4 petrobras profile 6 performance in 2008 10 Corporate governance and strategy 19

22 Social responsibility

Commitment to sustainable development 24 Social and environmental report 29

32 human rights PrinciPle 1 BuSiNESSES ShOuld SuppOrT aNd rESpECT ThE prOTECTiON Of iNTErNaTiONally prOClaimEd humaN righTS 34

Community development (PrinciPle 1) 34 Social, cultural and sports investments (PrinciPle 1) 38 PrinciPle 2 BuSiNESSES ShOuld makE SurE ThaT ThEy arE NOT COmpliCiT iN humaN righTS aBuSES 47 Supplier and customer relations (PrinciPle 2) 47 Case study - human rights 50

52 labor workers 54 health, safety and quality of life 56 remuneration and benefits 60 PrinciPle 3 BuSiNESSES ShOuld uphOld ThE frEEdOm Of aSSOCiaTiON aNd ThE EffECTivE rECOgNiTiON Of ThE righT TO COllECTivE BargaiNiNg 64 freedom of association (PrinciPle 3) 64 PrinciPle 4 BuSiNESSES ShOuld uphOld ThE ElimiNaTiON Of all fOrmS Of fOrCEd aNd COmpulSOry laBOr 66 refusal of forced labor (PrinciPle 4) 66 PrinciPle 5 BuSiNESSES ShOuld uphOld ThE EffECTivE aBOliTiON Of Child laBOr 69

guarantee of the rights of children and adolescents (PrinciPle 5) 69

2 eixo2 message From THe ceo

i am pleased to present the Social and Environmen-

tal Report 2008 of Petrobras, an important instrument

of transparency and communication with our stake-

holders. Society increasingly demands ethical and sus-

tainable behavior from companies, which makes our

challenge greater and more complex. In this sense, we

intend that the company’s performance is even better,

in line with the concepts of sustainable development in

business management.

The objective defined in our Strategic Plan is auda-

cious: be among the five largest integrated energy com-

panies in the world by 2020. In 2008, we were the ninth

largest company of energy, according to the ranking of

the consulting firm PFC Energy. Even with the insta-

bility of the international market and the price of the

barrel of oil, Petrobras obtained a record net profit of

R$ 33 billion, 53.3% more than the previous year, which

shows that we are a solid and structured company. In

2008, our gas and oil production reached the mark of

2.4 million barrels of oil equivalent per day. For 2013, we

expect to exceed the volume of 3.6 million barrels per

day (bpd). For 2020, our goal is 5.7 million bpd.

The recent discoveries of petroleum in the pre-salt

layer, in Santos Basin, will be responsible for a radical

change in level for the business of Petrobras. In 2009,

mESSagE frOm ThE CEO

the first long-duration test will be undertaken in the

Tupi field, and in 2010 a pilot system will be installed

with the capacity to produce up to 100 thousand bpd,

facts which mark the start of a new era for Petrobras

and for Brazil. The production coming from the pre-salt

layer has the great potential of stimulating the domes-

tic market, generating new jobs and strengthening the

Brazilian economy.

Concerning fuel quality, Petrobras has systemati-

cally invested in new technologies and upgrading the

refineries to optimize production and enhance the

products. To do so, R$ 8.5 billion will be invested in 13

hydrotreatment plants by 2013.

We will also have other challenges to overcome. One

of them is the investment in clean energy such as bio-

fuels. In 2008, we took an important step forward: the

creation of Petrobras Biocombustível S.A., a subsidiary

whose objective is to develop ethanol sales, biodiesel

production and other products and activities. By 2013,

US$ 2.8 billion will be invested in this segment.

With the increased supply and demand in the gas &

energy area, we also intend to consolidate our perfor-

mance in the Brazilian and international market, and

to increase business in the generation of electricity and

natural gas in Brazil.

3rel aTór io anual 2008 3

We understand that relations with society and the

environment are essential. This is why the manage-

ment system of social responsibility and the standards

of environmental excellence are continually being im-

proved. In 2008, the company invested R$ 1.92 billion in

the environment to upgrade the operational processes,

in order to make them safer and more efficient.

Moreover, almost R$ 556.8 million were invested

in more than 2,300 social, environmental, cultural and

sports projects. These initiatives are inserted in corpo-

rate programs, such as the Petrobras Development &

Citizenship, the Petrobras Environmental Program, the

Petrobras Cultural Program and the Petrobras Sport &

Citizenship Program. They are programs which have a

public selection of projects, which allows organizations

all over Brazil to have fair and democratic opportuni-

ties of access to the resources. During the public selec-

tion the registered projects undergo several levels of ad-

ministrative and technical analyses by representatives

of different segments of society.

Another highlight is the program Keeping an Eye

on the Environment, which promotes the sustainable

development of communities surrounding the opera-

tions of the company based on Agenda 21, a methodol-

ogy for building sustainable societies, reconciling the

We understand that the relations with society and the environment are essential. This is why the management system of social responsibility and standards of environmental excellence are continually being improved

methods of environmental protection, social justice

and economic efficiency.

The information contained in this report is part of

the Petrobras strategies for conducting business and

activities with social responsibility, aligned with the

ten principles of the UN Global Compact. Therefore, we

restate our commitment to ongoing participation in

this initiative, of which the company has been a signa-

tory since 2003.

We hope that everyone will now learn a little more

of the trajectory of Petrobras to attain this common

objective: the building of a fairer, more ethical environ-

mentally balanced world.

José Sergio Gabrielli de AzevedoCEO of Petrobras

social anD enV ironmenTal rePorT 2008

4 eixo44

peTrobrassTraTegy

resulTs


PeTrobras with investments of r$ 53 billion petrobras closed 2008 with

significant results, having a record net profit of r$ 33 billion, approximately

53% more than in 2007. The year was also positive for the company in the

international scenario. petrobras expanded business and maintained activities

in 27 countries besides Brazil. in the operational area, the pre-salt area stands

out, which is estimated to increase production from 219,000 bpd, expected in

2013, to 1,815,000 bpd, in 2020.

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ExpEriENCE iN ThE BraziliaN aNd iNTErNaTiONal pETrOlEum markET

created in 1953, in brazil, petrobras operates on an integrated basis in the oil, gas and energy industry in the segments of exploration and production (e&p); downstream (refining, transportation and sales); distribution; gas & energy; petrochemicals; and biofuels. »

PeTrobr as

ProFile

rel aTór io anual 2008

It is a mixed economy company, controlled by the Bra-

zilian government – under the Ministry of Mines and

Energy –, and incorporated as a mixed capital corpora-

tion. It is regulated by the provisions in the Corporations

Act (Law 6404, of December 1976) and by its articles of

incorporation, which define its economic activities un-

dertaken in free competition with other companies, in

accordance with the market.

The Petrobras System consists of Petróleo Brasileiro

S.A. (Petrobras Holding), its subsidiaries, affiliates, joint

affiliates and associated companies. The subsidiaries in-

clude Petrobras Distribuidora S.A. (Petrobras Distribui-

dora), Petrobras Química S.A. (Petroquisa), Petrobras

Transporte S.A. (Transpetro) and Petrobras Biocombus-

tível S.A., the last incorporated in June 2008. The com-

pany does not have a holding in special-purpose compa-

nies. However, these companies are part of the financial

statements of Petrobras which directly or indirectly con-

trols their operational activities.

Petrobras is a benchmark in deep and ultra-deep

water exploration and production. As estimated by

consulting firm PFC Energy, in 2007, the company was

responsible for operating about 23% of the global pro-

duction at depths exceeding 300 meters of nappe (dis-

tance between the water surface and seabed).

7

petrobras accumulates know-how in exploration and production in deep

and ultra-deep water

platform p-51


eixo8 PeTrobr as

Among other products, the company produces

automotive gasoline, aviation fuels, diesel oil, lubri-

cants in the Lubrax line, basic lubricating oils, fuel

oils, liquefied petroleum gas (LPG), natural gas, as-

phalt products, lighting kerosene, solvents, paraffin,

fertilizers (urea and ammonia), petrochemical naph-

tha, petroleum green coke, sulfur and bunker (fuel

for ships). Some of the main services offered are ser-

vice stations, the Customer Channel (electronic trade

platform), the Petrobras Customer Help Desk (SAC),

bunkering and the sale of electricity. The Petrobras

service stations have convenience stores (BR Mania),

advanced lubrication centers (Lubrax Center) and the

Fleet Total Control system (CTF).

Petrobras Distribuidora operates throughout

Brazil in the market of resale of fuels, lubricants and

size oF comPany

Employees 74,240

Shareholders (1) 344,179

Exploration 86 drilling rigs (48 offshore)

productive wells 8,263 (728 offshore)

production platforms 112 (78 fixed; 34 floating)

refineries 17

pipelines 25,197 km

fleet of ships 54 own

Service stations 7,323

fertilizers 3 plants

Thermoelectric power stations 14

1) shareholders in the são paulo stock exchange (bovespa), without considering investors of resources as the government severance indemnity fund for employees (fgTs) and quotaholders of investment funds in shares of petrobras.

comPosiTion oF caPiTal sTock(r$ million)

shareholders shares %

federal union 2,826,516,456 32.2

BNdESpar 668,539,662 7.6

adr (ON Shares) 1,350,276,582 15.4

adr (pN Shares) 1,235,631,388 14.1

fmp petrobras fgTS 186,749,197 2.1

foreigners (resolution # 2.689 CmN) 689,376,869 7.9

Other physical & Corporate Entities 1,816,986,586 20.7

ToTal 8,774,076,740 100

products, besides rendering added services, in the

service stations and convenience stores. The subsid-

iary also handles major consumers dealing with bulk

sales of fuels and lubricants to customers such as

industries, governments, transportation companies

and thermoelectric power stations; the aviation mar-

ket for products and services of supply of aircraft and

related activities; the market of chemical products;

asphalt; and energy business. ■

profile

rel aTór io anual 2008 9

pETrOBraS BraNdS

The petrobras corporate trademark is much more than a visual representation - it is managed as a strate-gic asset, considered to be capable of generating demand for the products and services of the company and of collaborating for managing the business risks. estimated at r$ 2.774 billion, 28.2% more than in 2007, it is one of the ten most valuable brands in brazil, according to the brand analytics consultancy.

The variables which comprise and build the value of its brand have been grouped into a methodology of identification, which allows the establishment of metrics for long-term follow-up and management. application of this method was the calculation of the estimated return for the value of the petrobras brand, related to the investment in sponsoring the Williams aT&T team of formula 1.

in the last two years, petrobras has obtained the highest score in the dow Jones sustainability in-dexes, for the oil and gas sector, in the brand management criteria.

some other brands managed by the company are lubrax, podium, br aviation, verana, liquigás br mania, cartão petrobras, spacio 1 and amigo mecânico (mechanical friend).


eixo10 PeTrobr as

pOSiTivE rESulTS iN faCE Of glOBal ECONOmiCiNSTaBiliTy

in the second half of 2008, the changes in theinternational economic scene caused global effects,such as instabilities in the quotations of the barrelof oil, stock exchange volatility, limited access to the credit market and ensuing increased costs of new operations. »

PerFormance in 2008


In spite of this conjuncture, Petrobras had positive

results in its operational, economic and financial per-

formance in the year. The net profit of the company

achieved a record of R$ 33 billion, calculated from the

changes in Brazilian accounting practices (Law 11.63

8/07, on the preparation and disclosure of financial

statements for large companies). The profit, 53% higher

than in 2007, was mainly due to the increase in total

production and average prices of petroleum and by-

products, a larger sales volume, besides gains relating

to changes in the exchange rate.

With a growth of 26% in relation to 2007, the net

operating revenue was R$ 215.1 billion, whereas the

operating cash f low (EBITDA) was R$ 57.2 billion, an

increase of 14%.

The company investments also had a record vol-

ume, totaling R$ 53.3 billion, 18% more than in 2007.

The area of exploration and production received R$

26.2 billion (49.1% of the total), which contributed

to the replacement of reserves and the knowledge of

reservoirs in the pre-salt layer (in ultra-deep water

off the Brazilian coast). Downstream investments

were R$ 12 billion (22.5%), emphasizing the increased

capacity of refining, compliance with standards of

quality and construction of the Petrochemical Com-

plex of Rio de Janeiro (Comperj).

getúlio vargas refinery (repar), in araucária, in paraná


eixo12

Performance in 2008

PeTRoBR AS

The other investments were allocated to the areas

of gas & energy (13.5%), international (11.5%), corpo-

rate (2.3%) and distribution (1%).

With the downward trend in the main world stock

exchanges, Petrobras papers (shares and receipts) ac-

companied the negative performance of BOVESPA

and the Dow Jones Index. The market value was R$ 224

billion, a drop of 52.1% compared with 2007.

In line with the principles of capital discipline,

the company took strict measures to control its

costs. This factor contributed to maintaining its

goals of growth, with a well-structured portfolio of

projects with a high return.

Another operational highlight was Petrobras pro-

duction, which attained the mark of 2.4 million bar-

rels of oil equivalent per day (boed) of oil and natural

gas, an increase of 4.3% compared with the previous

year. Also 1,979 million barrels of oil, liquefied natu-

ral gas (LNG) and condensate and 421,000 boed of

natural gas were produced. The opera-tions in Bra-

zil handle 90.7% of the total production, with 2,176

million boed. The start of production in the pre-salt

layer in Campos Basin and natural gas production

The company’s refineries were responsible for the total production of 1.97 million barrels of byproducts per day, using 91% of installed capacity in Brazil and 61% of the capacity elsewhere

in Brazil (17.8% more than in 2007) were highlights

in 2008.

According to the criteria of the Society of Petro-

leum Engineers (SPE), the volume of proven reserves

of oil, condensate and natural gas of Petrobras, on

December 31, 2008, was 15.08 billion barrels of oil

equivalent (boe), 93% in Brazil.

The refineries of the company were responsible

for the total production of 1.97 million barrels of by-

products per day, using 91% of the installed capacity

in Brazil and 61% of the capacity in other countries.

The 3.7% drop in byproduct production compared

with 2007 is mainly due to the sale of refineries in

Bolivia and scheduled shutdowns in Argentina and

in the USA.

The total sales of the company came to 3.37 mil-

lion boed, including exports, natural gas and inter-

national sales, representing an increase of 4.2% com-

pared with the previous year.

In Brazil, where the growth was 5.5%, the main

products in sales volume were diesel (34%), gasoline

(15%), natural gas (15%) and liquefied petroleum gas

(LPG) (10%).

rel aTór io anual 2008

rElEvaNT faCTS

in april, the creation of an executive management responsible for coordinating the activities of ›exploration and production in the pre-salt layer was approved.

in June, the subsidiary petrobras biocombustível s.a. was created, to develop the sale of ethanol ›and biodiesel production to consolidate petrobras in the segment. in 2009, the company will now operate three commercial petrobras biodiesel production plants, under the concession of the na-tional agency of petroleum, natural gas and biofuels (anp). Two of these plants were launched in 2008 one planned to start production in January 2009.

With works started march, in the petrochemical complex in rio de Janeiro (comperj) will produ- ›ce 150,000 barrels of petroleum per day for the production of petrochemical byproducts from 2012 onwards. The complex will be composed of a basic petrochemical utility center, second generation units, corporate and worker capacity-building center plus a distribution center for liquid products.

With operations foreseen to start in 2011, the abreu e lima s.a. refinery was constituted in mar- ›ch 2008 as a closed capital joint-stock company. The unit has investments of us$ 4.05 billion and will have capacity to process 230,000 barrels of petroleum per day and produces low sulfur content byproducts.

in may, petrobras holding and its subsidiary petroquisa increased their participation in braskem, ›a brazilian petrochemical company, to hold 30% of the voting capital. and in december the admi-nistrative council for economic defense (cade) approved the acquisition by petrobras of the assets of the ipiranga group, related to the business of distribution and resale of fuels and lubricants and greases in the north, northeast and central West regions of brazil, besides the production and distribution of asphalts in the country.

petrobras also concluded the operation of acquiring the total share issue of Termobahia s.a., in ›april. in July, petrobras distribuidora transferred its shares in energy companies to petrobras hol-ding, when the general energy management was created.

some of the new undertakings will include building two premium refineries for high quality and low ›sulfur content byproducts from processing heavy oil and acid, both in northeast brazil.

after being approved in an extraordinary shareholders meeting, the proposal to split petrobras ›shares was put into effect in april. The result was that each common and preferential share was now represented by two shares. The capital stock of the company was now 8,774,076,740 shares with no face value.

at the beginning of the year, equipment containing information considered important for the com- ›pany was stolen from the premises of a firm providing special services to petrobras. The actions of federal the police and the brazilian intelligence agency (abin) led to the prison for those involved and recovery of the material.

13social anD enV ironmenTal rePorT 2008

eixo

PAN 12350 /29 / 91 / 0

45 / 20 / 15 /12

14 PeTRoBR AS

International Activities

Petrobras, by means of units, subsidiaries or offices of commercial and financial representation, performs in 28 countries, including Brazil. The company

has activities of exploration and production in 20 countries; of refining in four; of distribution in six; of petrochemicals and electricity in two; and offices

of representation in four. The international Petrobras Subsidiary Braspetro B.V. (PiB BV) participates in companies which perform outside brazil in several

segments of the oil and gas industry.

for the period 2009 thru 2013, it is foreseen to invest US$ 15.9 billion in international operations, of which 79% will be related to

exploration and production.

15Rel ATóR io AnuAl 2008

PAN 12350 /29 / 91 / 0

45 / 20 / 15 /12

15SoCiAl AnD enV iRonMenTAl RePoRT 2008

eixo16 PeTrobr as

performance in 2008

Presence in THe Foreign markeTIn 2008, 11.5% of all Petrobras investments that year

was allocated to international operations (performance

outside Brazil), focusing on increasing refining and dis-

tribution. Some of the highlights were the signing of the

purchase agreement of participation of ExxonMobil in

Esso Chile Petrolera, increasing the company’s share in

the fuel distribution segment in Latin America, and the

conclusion of the purchase of 87.5% of the shares in the

Japanese refinery Nansei Sekiyu, in Okinawa. With ca-

pacity to process 100,000 barrels of oil a day (bpd) and

store 9.6 million barrels of byproducts, the refinery pro-

vides logistic support for the distribution of the com-

pany products in the Asian market.

As a strategy of expansion in the Gulf of Mexico,

USA, Petrobras bought at an auction 23 new explor-

atory blocks, coming to have a participation in 259

offshore blocks (operating 161 of them). The compa-

ny also has onshore exploratory rights in the coun-

try, in Texas.

In Ecuador, Petrobras and the government of the

country signed an agreement which extends for a

year the negotiation about the concession contracts

of the unified field of Palo Azul and block 18, in which

Petrobras has a share. A new draft contract will be

presented by the government of Ecuador. Block 31 was

returned to the State, as agreed, due to the difficulty

of developing it.

petrobras office in nigeria


neT equiTy(in Thousand r$)

Capital stock executed 78,966,691

Capital reserves 514,857

revaluation reserves 10,284

profit reserves 58,643,049

accrued conversion adjustments

636,264

Equity evaluation adjustments (405,863)(2)

ToTal 138,365,282(1)

1) consolidated as per financial statements on december 31, 2008.

2) amounts between parentheses are negative.

asseTs(in Thousand r$)

Current(2) 63,575,278

Non-current (long term) 21,254,843

Non-current (investments) 5,106,495

Non-current (real estate) 190,754,167

Non-current (intangible) 8,003,213

Non-current (deferred) 3,469,846

ToTal 292,163,842(1)

1) consolidated as per financial statements on december 31, 2008.

2) current assets include: cash and cash equivalents; bonds and securities; net accounts receivable; dividends to receive; inventories; taxes, contributions and participations; prepaid expenses; other currents assets.

of the total of petrobras investments in 2008, 11.5% were allocated to international activities, focusing on the increase in the activities of refining and distribution

Some risks associated with the common impacts

of oil and gas operations are considered in the interna-

tional performance of Petrobras, such as market risks

(prices, interest rates and exchange rate, drop in con-

sumer levels), political and regulating risks and busi-

ness risks (production, reserves and competition). In

acquisitions or operating start-up in certain countries,

there are also risks of rejection by part of the surround-

ing community and direct customers, by the nature of

the activity or by the fact that the company is based in

another country.

However, among the opportunities identified

for the international activities, it is worth mention-

ing the increase in company business, greater vis-

ibility of the Petrobras brand, the transmission of

best practices to investors and other stakeholders,

as well as the development of new forms of energy,

such as biofuels.

In 2008, there was no use, as in previous years, of re-

sources from Addition to Freight for Renewal of the

Merchant Navy (AFRMM), a financial incentive from

the Brazilian government. ■

PeTrobras in numbers


eixo18 PeTrobr as

aDDeD Value Financial sTaTemenTfiscal year ending in december 2008 and 2007 (in Thousand r$)

2008 2007

reVenue 315,933,330 246,107,023

Sales of goods, products and services 268,936,483 220,153,532

revenue referring to building own assets 47,163,873 26,057,647

provision for credits of doubtful settlement – constitution (167,026) (104,156)

ProDucTion resources acquireD From THirD ParTies (166,732,054) (110,292,287)

Cost of products, goods and services sold (53,989,794) (29,888,395)

materials, energy, services of third parties and others (52,590,649) (42,840,479)

loss/recovery of active amounts (2,658,224) (480,812)

Others (57,493,387) (37,082,601)

gross added value 149,201,276 135,814,736

WiTHHolDing (DePreciaTion anD amorTizaTion) (11,631,984) (10,695,826)

neT added value produced by The company 137,569,292 125,118,910

aDDeD Value receiVe D in TransFer 3,914,124 2,514,692

income of equity accounting (115,790) (367,361)

financial revenue 3,494,430 2,417,659

Others 535,484 464,394

aDDeD Value To DisTribuTe 141,483,416 127,633,602

DisTribuTion oF aDDeD Value 141,483,416 127,633,602

sTaFF 14,526,830 14,163,085

direct remuneration 10,448,120 8,052,873

Benefits 3,478,036 5,603,033

fgTS 600,674 507,179

Taxes, cHarges anD conTribuTions 85,112,615 73,919,111

federal 62,625,920 50,810,506

State 22,338,990 22,993,351

municipal 147,705 115,254

remuneraTion oF THirD ParTy caPiTal 10,945,676 16,296,791

interest 1,891,069 7,385,853

rent 9,054,607 8,910,938

remuneraTion oF oWn caPiTal 30,898,295 23,254,615

interest on own capital and dividends 9,914,706 6,580,557

interest withheld/loss of fiscal year 23,073,086 14,931,232

Non-controlling participation in withheld profit (2,089,497) 1,742,826

1) The added value to distribute equals the revenue minus the production resources acquired from third parties and withholding (depreciation and amortization) plus the added value received in transfer.

2) The added value is distributed between government (60%), shareholders (22%), staff (10% and third parties (8%).

3) The amounts of 2007 differ from those published in the usa 2007, the result of changes in brazilian accounting practices (law 11.638/07).

4) amounts between parentheses are negative.

performance in 2008


STrENgThENiNg BuSiNESS TOaChiEvE grOwTh

The corporate strategy of petrobras, expressed in the strategic plan 2020, considers its commitment to sustainable development, based on integrated growth, profitability and social and environmental responsibility, and it is structured in the business segments of the company. projections of the business plan 2009-2013 include investments of US$ 174.4 billion for the period and the production of 3.655 million boed of oil and gas in 2013. »

corPoraTe goVernance anD sTraTegy


eixo20 PeTrobr as

The plan also takes into account in its projections: uncer-

tainties, such as the price of petroleum, costs, dynamics

of the supply and demand; geopolitical aspects (such as

the global economic crisis, wars and conflicts, political

tension and environmental implications) and critical

resources (such as assets and services and human re-

sources). However, the petroleum market is favorable in

the mid and long term, with the cost of production of

the pre-salt (in ultra-deep water) relatively low.

The development of the pre-salt area will direct

the growth of production in the long term. The esti-

mate is an rise from 219,000 bpd in 2013 to 1,815,000

bpd in 2020.

The plan also emphasizes the growth of the Brazil-

ian domestic content in strengthening the business

of Petrobras in the long term. The domestic context is

responsible for the increased installed capacity (limit

of production) and for developing new suppliers, which

generate a positive scenario in relation to prices, avail-

ability, options and flexibility. On the other hand, from

the sustainability viewpoint, the expected expansion in

the Brazilian economy will tend to promote the genera-

tion of employment and income, making the domestic

market more dynamic.

Petrobras also has codes and statutes to protect

the interests of its shareholders and other stakeholders.

In this context the company bylaws, its Code of Eth-

ics, Directives of Corporate Governance, Code of Good

Practices and that of Competitive Conduct, as well as

its internal rules, are worthy of note.

corPoraTe goVernancePetrobras is run by the Board of Directors and by the

Executive Board. Responsible for the direction and top

management of the company, the duties of the Board of

Directors include deciding on the basic plan of organi-

zation and about the election and removal of the mem-

bers of the Executive Board. It also handles establishing

the general guidance of the company business – defin-

ing its mission, its strategic objectives and directives –,

besides approving the strategic plan, with its respective

plans for several years and annual programs of expen-

diture and investments. It is the duty of the Executive

Board to manage the business, in line with the mission,

objectives, strategies and directives established by the

Board of Directors.

corporaTe governance and sTraTegy

The tenure of the board members is one year, with the

possibility of re-election without limit of the number of

mandates. The Board consists of nine members elected

by the General Shareholders Meeting and chaired by a

member with no executive functions or other links with

the company. The CEO of Petrobras is the only member

with executive functions

In order to avoid any conflicting interests, there

is no influence of the Executive Board in electing the

members of the Board of Directors. Besides the Code

of Ethics of Petrobras, issues such as loyalty and use of

privileged information related to the senior manage-

ment of Petrobras are dealt with in several internal

policies. They include the Disclosure of Information

about Relevant Facts or Acts, Negotiation with Secu-

rities, the Conduct of the Administrators and Senior

Management Employees, the Indication for Job Titles of

Management of Subsidiaries, affiliates and Associated

Companies and Investor Relations.

The Board of Directors approved the Directives of

Corporate Governance, which establish the experience

and knowledge expected of a board member, as well as

some requirements which must be complied with. Thus,

the Board of Directors of Petrobras aims to promote the

long-term prosperity of business, by adopting an active

and independent posture, always taking into account

the interest of all the shareholders. Although they have

not yet been approved, the Directives of Corporate Gov-

ernance foresee mechanisms where the Board evaluates

yearly its own performance and that of the Executive Di-

rectory every six months.

The model of corporate governance of Petrobras also

has a Fiscal Board, three Committees of the Board of

Directors (Audit; Environment; and Remuneration and

Succession), Business Committee and 12 Management

Committees. The Management Committees allow the

deepening and maturing of important subjects (includ-

ing strategies about issues related to sustainability), be-

sides structuring information which will be submitted to

higher authorities, covering the economic, environmen-

tal and social dimensions. The Management Committees

are: Downstream; Organization and Management Analy-

sis; Internal Controls; E&P; Gas & Energy; Marketing and

Brands; Human Resources; Social Responsibility; Health,

Safety and Environment; Risks; Information Technology;

and Petrobras Technology. ■

The petroleum market is

favorable in the mid and long term, with a relatively low

cost of pre-salt production


Petrobras Organizational Structure

FC Fiscal Council

Financial Area Gas & EnergyExploration & Production (Upstream)

Downstream International Area Services

Executive BoardCEO

BD Board of Directors

business strategy & performance

new business

human resources

internal auditingombudsman

ceo's office general secretary of petrobras

management systems development

legal area

institutional communication

corporate section

logistics

refining

petrochemicals & fertilizers

marketing & sales

corporate area

business Technical support

business development

southern cone region

americas, africa & eurasia

health, safety & environment

materials

research & development (cenpes)

information Technology & Telecommunications

engineering

shared services

corporate section

production engineering

services

exploration

pre-salt

north-northeast

south-southeast

corporate section

natural gas logistics & equity stakes

energy operations & equity stakes

energy development

marketing & sales

corporate finance

financial planning & risk management

finance

accounting

Taxation

investor relations


22 eixo22

responsoCIAL

22

TrA

nspA

ren

Cy

pArTICIpATIon

susTAInAbILIT yInITIATIves

23rel atór io anual 2008 23

sIbILITySocial reSponSibility The Social and Environmental Report 2008 was based

on the latest version of the GRI Sustainability Report Guidelines, which reaffirms

the commitment of Petrobras to provide this reliable, clear and updated infor-

mation. From these premises, the company adopts measures to enhance the

management of its investments. The national and international initiatives aim

to develop projects that contribute to reducing social inequalities and minimize

environmental impacts.

23

ACTIons

GLobAL CompACT

Ind

ex

esAssoCIATIons

mAnAGemenT

eixo24

AcTIonS FoR SuSTAInAbIlITy

petrobras believes that by adopting a responsible and transparent attitude toward its activities and business contribute to the planet’s sustainable development. This is why it has been taking initiatives to enhance management and investments in order to monitor its performance, increase quality of projects and obtain consistency results of its actions. »

Social reSponSibil it y

commitment to SuStainable development

rel atór io anual 2008

When affirming its participation in the UN Global Com-

pact, the company established the key strategies which

guides its actions for sustainability. The commitment

to adopt the ten principles of the Compact – relating to

Human Rights, Labor, Environment and Transparency

– it is a guideline for its decisions as well as provide co-

herence between the actions taken and the objectives

provided in the Global Compact.

Social reSponSibility and managementIn Petrobras, social responsibility is a corporate

function. This means that the various units and sub-

sidiaries take actions according to the policies and

guidelines set by the company. This organization and

management model provides a better dissemination

of guidance and alignment of action among the com-

panies in the Petrobras System.

The Social Responsibility Management Committee

(CGRS) is a forum of discussion of social and environ-

mental topics. The proposal are submitted to the Busi-

ness Committee assessment and for subsequent ap-

proval of the top executive administration.

The CGRS has 17 members, including corporate ex-

ecutive managers and representatives of the subsidiaries

Transpetro and Petrobras Distribuidora. Some of its du-

ties are: to propose corporate guidelines and strategies of

social responsibility; to define goals, monitor and assess

performance; and promote dissemination of the com-

pany’s actions.

25

Approval Flow of Social Responsibility Decisions

Lower relevance themes to the organization

Higher relevance themes to the organization

Social Responsibility Management Committee:

discussion / decision / approval

Business areas and subsidiaries:

implementation of the action plan

Business areas and subsidiaries: implementation of

the action plan

Social Responsibility Management Committee:

recommendation of actions +

directives and strategies of social responsibility

Business Committee: forwarding for

decision

Executive Board: decision / approval

Business areas and subsidiaries

Top Executives

PRoPoSAl oF ThEMES

Social and env ironmental report 2008

eixo

CommITmenT To susTAInAbLe deveLopmenT

26

Petrobras is one of the companies members of the

Globally Responsible Leadership Initiative (GRLI), a

project of the European Foundation for Management

Development (EFMD), supported by the UN Global

Compact, which aims to further and support develop-

ment of responsible leaders.

The company, in partnership with Dom Cabral

Foundation and under the coordination of EFMD, has

created its own methodology to develop the Globally

Responsible Leader. In the first module, top level execu-

tives participated in four seminars in 2007 and 2008.

In 2009, the plan is to increase the capacity building

among the other managers and later disseminate the

methodology worldwide through UN Global Compact-

related networks.

participation in initiativeS and aSSociationSThe commitment of Petrobras to sustainability is not

only expressed in strategic documents and internal

management processes. The company also participates

in several initiatives and is member of many national

and international organizations where the discussion

of strategic topic is deepened, lessons are learned and

best practices of social responsibility are shared.

un global compact — An initiative of the United Na-

tions by which organizations agree voluntarily to com-

mit and to communicate their performance concerning

ten principles related to Labor, Human Rights, Environ-

ment and Transparency. Petrobras is a signatory since

2003 and the company CEO became a member of the

initiative International Board in 2006. In the Brazilian

Global Compact network, Petrobras and CPFL Energia

jointly chair the Human Rights and Labor Committee

and Environment Committee.

iSo 26000 — The future international standard of

social responsibility is being drafted and is expected to

be launched in the second half of 2010. Petrobras par-

ticipates in its development process representing the

industry segment in the Brazilian delegation. In order

to further discussion of the ISO 26000 in Brazil, the

company and the Brazilian Association of Technical

Standards (ABNT) have been promoting thematic sem-

inars for the Brazilian society. A highlight in 2008 was

the Petrobras - ABNT - ISO Devco workshop (ISO Com-

mittee for developing countries). This workshop was

held in Rio de Janeiro attended by the Brazilian delega-

tion and stakeholder representatives from Brazil, and

South American countries, as Argentina, Bolivia, Chile,

Colombia, Ecuador, Peru, Uruguay and Venezuela.

The commitment to adopt the ten principles of the UN Global Compact – relating to Human rights, Labor, environment and Transparency – guide the petrobras’ decisions



millennium development goalS (mdg) — Although

it is a project designed for countries that agree to

achieve the objectives by 2015, Petrobras supports

the MDG and takes actions to help achieve its goals,

through an agreement with the UN Development Pro-

gramme (UNDP). In 2008, the company sponsored the

second year of the MDG Brasil Prize, which acknowl-

edges projects of social inclusion, achieving citizenship

and promoting human rights.

Statement of g-8 climate change roundtable —

In this statement, company CEOs worldwide backed

the efforts of consciousness regarding climate change,

adopting policies and measures to mitigate greenhouse

gas emissions. Petrobras joined the project in 2005

when it was launched.

partnering againSt corruption initiative (paci) —

This initiative of the World Economic Forum was launched

in 2004 and brings together companies to establish princi-

ples and practices of integrity, justice and ethics in the

market’s competitive relations. Petrobras is signatory

since 2005 and agrees to develop an effective program

to implement these principles and adopt a zero-toler-

ance policy toward bribery.

extractive induStry tranSparency initiative

(eiti) — The EITI was set up in 2002 as a result of an

alliance between governments, international organi-

zations, investors, companies and civil society groups

to enhance transparency and accountability in the

extractive sector, to improve the management of re-

sources obtained from this activity. Petrobras joined

the initiative in 2005 and agrees to encourage initia-

tives for transparency with the governments of the

countries where it operates.

global reporting initiative (gri) — The initiative

prepares guidelines for sustainability reports in a process

that involves representatives from various stakeholders

groups around the world. By its participative nature and

coverage of the indicators, it is considered the top interna-

tional reference on guidance for sustainability reports.

In 2003, Petrobras started to adress the complete

framework of the GRI guidelines when preparing the So-

cial and Environmental Report and, in 2006, became an

Organizational Stakeholder of GRI. Since 2007, the com-

pany is a member of the GRI International Stakeholders

Council as one of the representatives of the industry in

Latin America. The council discusses and deliberates

on GRI governance and makes recommendations to its

Board of Directors on the guidelines preparation process.

World buSineSS council for SuStainable develo-

pment (WbcSd) — More than 200 top global companies

Communication and Citizenship Workshop of the Quixote project


eixo28

CommITmenT To susTAInAbLe deveLopmenT

participate in the initiative, to discuss solutions for in-

tegrating the sustainability principles in business man-

agement and solutions. Petrobras joined the WBCSD in

2007. In Brazil the company is also part of the Brazilian

Business Council for Sustainable Development (CEBDS)

which is the national network of WBCSD and works to

achieve the goal of integrating Brazilian companies on

the discussion of sustainable development.

international petroleum induStry environmental

conServation aSSociation (ipieca ) — In 2006, Petro-

bras became a member of this non-profit organization

of oil corporations and business associations world-

wide to adopt best practices in Safety, Health and Envi-

ronment by drafting handbooks, guides and guidelines.

The discussions concentrate on topics such as climate

change, biodiversity, response to oil spills, health care

and social responsibility.

aSociación regional de empreSaS de petroleo y

gáS natural en latinoamérica y el caribe (arpel) — It

brings together oil and gas companies and institutions

operating in Latin America and the Caribbean to en-

courage development and integration of the region and

to strength the relationship with society. Petrobras is

represented on nine committees and with Repsol co-

chairs the Committee of Corporate Social Responsibil-

ity. In 2008, the Committee focused mainly on develop-

ing a Management System for Community Relations.

brazilian inStitute of oil, gaS and biofuelS (ibp)

— This organization’s role is to further development of

the Brazilian oil and gas sector to make it competitive,

sustainable, ethical and socially responsible. There are

more than 200 members in 44 commissions, committees

and working groups, including the Biodiesel and Social

Responsibility Committees, and the HSE Subcommittee.

In 2008, Petrobras

renewed its participation in the Dow Jones

Sustainability Indexes (DJSI),

a portfolio of the new york Stock Exchange

reneWal in dJSiIn 2008, Petrobras renewed its participation in the

Dow Jones Sustainability Indexes (DJSI), a portfolio of

the New York Stock Exchange of companies with best

performance in economic, environmental and social

aspects, where it has been listed since 2006. In accor-

dance with the assessment criteria, the company has

standed as a benchmark in the oil industry on the crite-

rias of transparency, brand management, environmen-

tal report, biodiversity, human resources development

and corporate citizenship. Today 20 global oil and gas

majors companies belong to the DJSI.

deliSted from iSeIn 2008 Petrobras was no longer part of the corporate

portfolio of the São Paulo Stock Exchange Sustainabil-

ity Index (ISE-Bovespa), where it has listed since 2006.

The Petrobras Executive Board submitted to the Delib-

erative Council of ISE a formal request to explain the

reason for this decision and at their answer they invited

Petrobras to submit its main sustainability projects.

The company awaits the schedule for this presentation.

The chairman of the Deliberative Council of the

Ethos Institute disclosed to the press the presumed

reason for Petrobras being delisted, information which

concerns only to the members of the ISE Deliberative

Council, since it is protected by a clause of confiden-

tiality. For this reason the company decided to disas-

sociate from the Ethos Institute and the institute was

suspended from the ISE council for one year. ■



TRAnSPAREncy In PERFoRmAncE DIScloSuRE

The social and environmental report is the disclosure of information about the performance of the Petrobras System in the economic, environmental and social areas. »

Social and environmental report


comPAnIES AnD SubSIDIARIES REPoRTED In ThE REPoRT 2008

petrobras Holding in brazil and in another 27 countries where it operates › (1)

petrobras distribuidora ›petrobras Química s.A. (petroquisa) ›petrobras biocombustível ›petrobras Transporte s.A. (Transpetro) ›Alberto pasqualini refinery (refap) › (2)

The selection of these companies and subsidiaries was based on the following criteria: participation in the management and control and their representation on petrobras' results. The recently acquired companies were not reported due to some of the above reasons and/or because they are in a stock transfer process.

1) does not include the thermal power plants controlled indirectly by the company.2) refap is controlled in conjunction with repsol ypF and is not included among the refineries of the petrobras Holding.

30

soCIAL And envIronmenTAL reporT

This edition of the annual publication includes data for

the period between January 1 and December 31, 2008,

and is also a report on the company’s progress in com-

plying with the ten UN Global Compact principles, ini-

tiative of which it is a signatory.

The information in the report is organized under

the following items:

Petrobras:1. general profile data of the

organization, corporate strategy and

performance in 2008;

Social Responsibility:2. data on social

responsibility management and the Social and

Environmental Report;

Human Rights: 3. Petrobras initiaties for the respect

and protection of Human Rights;

Labor: 4. information about the company’s labor

relations with its workforce and actions taken

to eliminate child and forced labor in its value

chain;

Environment:5. data on environment and eco-

efficiency management;

Transparency:6. information about Petrobras

relations with its stakeholders, including the

measures taken to guarantee transparency and

ongoing dialogue.

The Committee for Preparing and Assessing Social and

Environmental Responsibility Reports is in charge of

drafting the Social and Environmental Report. This

committee consists of representatives from 29 areas

and subsidiaries of the Petrobras System. These repre-

sentatives compile the information through a collab-

orative network, which in 2008 consisted of 370 or so

professionals of the company participating in produc-

ing the report.

The data is recorded in the Social Responsibility

Eletronic Data System and validated by the Commit-

tee before its publication. The process is coordinated

by the Institutional Communication of Petrobras

Holding.

In order to facilitate guidance and understanding,

all information disclosured in earlier reports that were

reformulated in this Report, plus the contextualiza-


31

tion of the estimates presented and changes in the data

measuring method are followed by explanation for its

changes. In this report, there was not major change in

scope or coverage in relation to last year’s report.

management toolThe Social and Environmental Report has two stra-

tegic roles for social responsibility management.

While it is a dialogue tool - to the extent that it in-

forms about Petrobras actions and provides chan-

nels for the stakeholders to express their opinion -, it

is also a tool to assess corporate management, since

its process encompasses as a self-diagnosis, identify-

ing opportunities for improvement.

The 2008 report was based on the latest version of

the GRI Guidelines for Sustainability Reports, known

as GRI G3. Its indicators give guidance on relevant

matters in the economic, environmental and social

spheres and the principles that must guide the com-

panies when preparing a report.

The criteria adopted for defining the report

content is the level of importance attributed to

the topics by Petrobras and its stakeholders. They

are consulted through a process called Materiality

Test, which allows the company to draw up an over-

view of stakeholder's expectations (learn more about

the Materiality Test at the appendix, on pages 130

and 131).

After releasing the Social and Environmental Re-

port, Petrobras contracts a consulting firm special-

ized on sustainability reports to assess any gap in

management and content. This process, called Vulner-

abilities Map, allows the company to draw up action

plans to enhance its action and constantly improve

performance and its report. In 2008, in addition to the

Vulnerabilities Map, Petrobras undertook an assess-

ment of the Social and Environmental Report 2007 by

the public participating in the Materiality Test. The

results of both processes were analyzed and consid-

ered while preparing this report.

For the third consultive year the information of

the Social and Environmental Report were audited

and revised by KPMG Auditores Independentes. The

auditors’ letter of Independent Verification is pub-

lished on page 139.

recognitionAt the GRI Readers’ Choice Award, organized by GRI,

Petrobras Social and Environmental Report 2006, was

elected by the readers as the best report in the All Stake-

holders and Civil Society categories. The announcement

was made at the awards ceremony in May 2008, at the

Amsterdam Global Conference on Sustainability and

Transparency.

On a survey promoted by GRI, sustainability

report readers voted by Internet on reports they

considered to be the best based on their requirements

and preferences. More than 1,700 people from

70 countries participated on the process. Eight

hundred reports from 50 countries were assessed

according to their category of public: civil society,

media, financial market, employees, non-business,

not-so-big business, non-OECD, and all Stakeholders

group, the last being the total votes of the seven

preceding groups.

notable communication on progreSS by the un global compactFor the third consecutive year, the Social and Envi-

ronmental Report was considered notable by the UN

Global Compact. The criteria for identifying notable re-

ports consider the statement of ongoing support for the

initiative, clear description of the actions for its imple-

mentation, following up the results and reliability, clear

and updated information in the report in addition to

including dialogue with the stakeholders.

diStribution and communicationThe Social and Environmental Report 2008 is published

in Portuguese, English and Spanish and is designed for

all the company’s stakeholders: clients, scientific and

academic community, communities, consumers, sup-

pliers, press, investors, partners, public authorities, in-

ternal public, resellers and the third sector.

Its communication and distribution are planned

and encompasses various actions, such as creating

summarized version for employees and the general

public, a version in Braille for the visually impaired,

announcement and disclosure on partners’ sites. The

Social and Environmental Report 2008 is available on

the Petrobras site (www.petrobras.com.br). ■

The relevance level of themes is assigned by Petrobras stakeholders


32 eixo32

HUMAN

32

CoMMUNities

CUltUrere l At i o N s Hip

sU

pp

lie

rs


Human rigHts All Petrobras operations and facilities conform to environmental

regulations and adopt the principle of respecting life and citizenship. In order to

fulfill this commitment, social, cultural and sports projects are developed for its

surrounding communities, to prevent, monitor, assess and control the impacts

of its activities in these regions. In 2008, Petrobras allocated approximately R$

500 million to sponsoring and supporting these actions. This sum also includes

the contribution of R$ 48.5 million to the Fund for Childhood and Adolescence

(FIA), focusing on guaranteeing the rights of children and adolescents. Petro-

bras is also concerned with the activities of its service providers, establishing

contracts with clauses that reject forced labor and eliminate the use of slave or

child labor or labor in degrading conditions.

33

riGHtssoCiAl

iNvestMeNtsCiti

zeN

sHip

eixo34

PROJECTS INPARTNERSHIPWITH COMMUNITIES

petrobras is committed to maintaining ongoing communication channels and open dialogue in its surrounding communities. »

Human r igHts

Community Development prinCiple 1Businesses should support and respect the protection

of internationally proclaimed human rights


Actions taken with the participation of community

members are in accordance with local culture and

customs and are designed to prevent, monitor, assess

and control the impacts where Petrobras is present.

They also seek to ensure the process of social insertion

and improve the quality of life of the communities, also

aiming to reduce the interference of the company ac-

tivities in cultural processes.

Petrobras identifies the basic needs of the re-

gions where it operates and seeks to promote health

care in the areas around its facilities, with monitor-

ing services for control of endemic diseases, provid-

ing medical care and social assistance to prevent,

control and accompany health problems caused by

impacts from its operational activities, products

and services.

35soCial anD env ironmental report 2008

The company also acknowledges that the invest-

ments in infrastructure and services can generate im-

pacts – positive or negative – in the daily activities and

the economy of wherever it operates. This is why it strives

to improve its operations, pursuing local development,

always taking precautions to reduce the negative im-

pacts on the surroundings to the minimum as possible.

Undertakings are concerned mainly on investment

in public utilities, such as water and power supply,

sanitation, roads and hospitals. They include reurban-

ization and conservation of historic monuments. In

Brazil, for instance, investments include road building

and access roads in the area of influence of the Rio de

Janeiro Petrochemical Complex (Comperj), which will

allow shorter and safer journeys. The Transpetro ur-

banization projects of stretches of pipelines maintain

Art & Dressmaking Cooperative – fashion and style in the solidarity economy, Fortaleza, Ceará state

eixo36

CoMMUNity DevelopMeNt

the integrity of the pipelines at critical points, while

at the same time preserve the integrity and safety of

nearby communities.

assessments anD resultsDirect and indirect impacts of the development of new

projects or major expansions and alterations of com-

pany units are assessed. By identifying the weaknesses

and potential strengths of each region, the studies are

structured in the form of reports and disclosed at pub-

lic meetings and hearings. An example is the Environ-

mental Impact Report (Rima), concerned with people

living in the new areas where the company intends to

operate and whith meets the requirements of the envi-

ronmental licensing processes.

The well being of the social groups affected by the

facilities is a priority for the company. For this reason,

during the year, the Petrobras Exploration and Pro-

duction of (E&P) area has continued the new licensing

practice begun the previous year. It proposes to adopt

the Environmental Education Program (PEA) that was

designed to prepare society to participate in decisions

involving the environment.

As an example of this initiative is the Environ-

mental Management Plan developed by Petrobras in

Colombia, with the participation of the local com-

munity. The company made a prior analysis of the

areas surrounding its facilities and assessed pos-

sible impacts of its activities before starting its op-

erations. Through dialogue it was possible to foresee

aspects that could affect the quality of life of the

population. Strategies and agreements were defined

for contracting local workforce and social and envi-

ronmental education programs were offered. During

the process, community leaders were involved to

identify and prioritize social investments, besides

monitoring the Petrobras management performance

in the region.

respeCt for DiversityPetrobras believes that demands and expectations of

the surrouding communities involved must be con-

sidered in the projects. The respect for diversity is at

the base of the company’s commitment to the val-

ues expressed in its Code of Ethics. Honesty, integ-

rity, justice, equality, truth and coherence between

words and practice refer to the relations of the Petro-

bras System with people and institutions. This is

expressed in respect for the ethnic, religious, social,

cultural, linguistic, political, esthetic, age, physical,

mental and psychic differences and diversity, as well

as for gender, sexual orientation, and so forth.

In 2008, there were no records of any violation of

rights of indigenous peoples in the areas affected by

the operations of Petrobras business units. The com-

pany not only adopts the formal guidelines before any

undertaking, but it also seeks advice from licensing

organizations and the Brazilian National Indigenous

Foundation (Funai), and supports a set of projects in

different regions in order to promote the rights of in-

digenous peoples.

Keeping an eye on tHe environmentThe program Keeping an Eye on the Environment

was created in 2004 by Petrobras to establish an

ongoing relationship with the communities within

its area of inf luence. By constructing Community

Agendas 21 – diagnoses and action plans that take

into account the local weaknesses and potential

strengths in the projection of a desirable future

Respect for diversity is at

the base of the company’s

commitment to the values

expressed in its Code of Ethics

Human r igHts

COMPERJthe rio de Janeiro petrochemical Complex (Comperj) is an example of how petrobras assesses the impacts of its operations on the surrounding communities. located in the municipality of itaboraí, rio de Janeiro state, the Complex implements the Communication and social responsibility program, consisting of the environmental impact Assessment (eiA) and rima, for evaluating its activities in the region. the actions are concerned with sustainable development, keeping an ongoing dialogue with the population from the surrouding area of the complex.

Based on the methodology of the program Keeping an eye on the environment, the Comperj relation-ship plan provides workshops for the community to participate, prepares local plans of sustainable development and publishes the consolidated document of Agendas 21. engagement actions also include professional and management qualification of professionals in the eleven municipalities in the company’s area of influence by means of the integration Center of Comperj, located in the municipal-ity of são Gonçalo.

With operation start-up planned for 2012 and investments of approximately Us$ 8.38 billion, Comperj will produce resins, thermoplastics and fuels. this will encourage the installation of companies of consumer goods in the region, since these petrochemical products are their basic raw material. on a domestic scale, the Complex will generate approximately 212,000 direct and indirect jobs.

37

prinCiple 1

Businesses should support and respect the protection of internationally proclaim

ed human rights

scenario –, the company and communities form a

partnership to collaborate with sustainable devel-

opment in areas with a low level of social inclusion.

Further information about the program Keeping an

Eye on the Environment can be found in the case

study of pages 50 and 51.

loCal partnersHipsPetrobras aims to promote economic improvement

by contracting workforce and acquiring goods and

services from the markets where it operates. For con-

tracting and performing projects, the company estab-

lishes local partnerships and capacitates the firms

around its units, especially in the operational areas.

Small services are provided by means of registering

and inquiries to suppliers in turns, offering more op-

portunities to small and medium enterprises. In 2008,

78% of the goods and services was procured from sup-

pliers based in Brazil.

Many Petrobras units have service facilities for

the workforce and local commercial associations, in

order to learn the local needs and the economic im-

pacts generated in each locality. The company col-

lects taxes that, reinvested by federal, state and local

governments, contribute to the performance of pub-

lic policies. The company’s main indirect economic

impacts are related to the payment of royalties and

special participations, and the ICMS (VAT) tax on

Sales and Services.

The Petrobras Business Plan 2009-2013 forseen a de-

mand of approximately one million jobs in Brazil for the

company projects, which shall use 64% of local content.

It is estimated an average of US$ 20 billion a year in or-

ders to Brazilian suppliers. ■

soCial anD env ironmental report 2008

38

ACTIONS FOR SOCIAL INCLUSION

in 2008, petrobras allocated around R$ 500 million to sponsoring and supporting cultural, sports and social projects, which includes r$ 48.5 million contribution to the Fund for Childhood and Adolescence (FiA), focusing on guaranteeing the rights of children and adolescents. »

soCial, Cultural anD sports investments

Human r igHts

39

The main investments of the company in social projects

in Brazil are concentrated in the Petrobras Citizenship

& Development program, which has initial investment

goals of R$ 1.3 billion in the period 2007-2012. The pro-

gram is designed to contribute to local, regional and

national development, promoting a decent and produc-

tive inclusion of the underprivileged.

All sponsored projects must respect diversity and

act in synergy with the Brazilian public policies. The

Petrobras Development & Citizenship program sup-

ports initiatives that promote development with equal

opportunities, valorizing local potential, contributing

to reduce poverty and inequalities. The actions are stra-

tegic, systemic and multi-institutional, seeking sustain-

able results. The program encourages social leadership,

co-responsibility, associativism, cooperativism and

networking, besides collaborating to local development

in the areas of influence of the Petrobras System.

In 2008, of the R$ 225.08 million invested in social

projects, 95.7% was allocated to initiatives supported

by the program in projects throughout Brazil, consider-

ing three lines of action:

generation of inCome anD Job opportunity — ›

focus on short term actions that contribute to the

productive inclusion of the Brazilian population,

seeking more immediate solutions to overcome

the conditions of poverty in the country. The

sponsored projects have an emancipating

nature and aim to further autonomy. The use of

technology and a suitable infrastructure in the

local productive arrangements are encouraged,

with a view to increasing their financial

sustainability and competitiveness.

An example is the Fresh Water Shrimp

Community Management project. Developed in

the Marajoara archipelago, Pará State, North of

Brazil, the action trains fishermen in techniques of

handling, processing and sustainable exploration

of shrimps and undertakes a program of economic

management of associative enterprises, to help

strengthen community organization. The project,

that includes development and re-application of

social technology, provides ideal fishing conditions

by implementing a shrimp production system

for enhancing the shrimp traps. Besides fishing,

the project encourages the multiple use of forest

resources. Here, 155 families are beneficiaries,

representing a total of 950 people. The activity is

integrated to the way of life of the inhabitants,

generating income and jobs for most of the

soCial proJeCts investments in 2008

ACtioN liNe NUMBer oF proJeCts r$ tHoUsAND

Generation of Income and Job Opportunity 267 35,752

Education for Professional Qualification 185 72,693

Guarantee of the Rights of Children and Adolescents 490 90,159

Strengthening of Social Organizations and Networks 38 4,427

Promoting Information for Citizenship 78 17,139

Others 16 4,907

total 1,074 225,077


prinCiple 1


ed human rights

40

soCiAl, CUltUrAl AND sports iNvestMeNts

families. Petrobras acknowledges and encourages

receiving projects that develop techniques

and methodologies to enhance community

involvement

eDuCation for professional qualifiCation ›— actions focusing on mid-term results, to

prepare Brazilian youth for the labor market

through professional training as well as

building a life project that considers their

vocations and potentials.

This is the case of the project Araçuaí

Sustainable Platform for Convergence of Social

Technologies and Construction of Sustainable

Towns, designed to contribute to the training

of young people and adults from the town of

Araçuaí, in the Valley of Jequitinhonha (Minas

Gerais), Southeast of Brazil. The project aims to

promote social change by teaching sustainable

attitudes, seeds production and processing used

cooking oil. In order to replicate the sustainable

actions in rural and urban communities,

the project also addresses technical and

professional training of the young and adults,

in order to build economic solidarity units from

regional material resources. The action directly

involves 40,000 people.

to guarantee tHe rigHts of CHilDren anD ›aDolesCents — long term projects, to develop

respect for the rights of children and adolescents.

The projects act together with society and state

agencies to prevent any kind of discrimination,

exploitation, violence, cruelty or oppression of

the young, assuring their physical, mental, moral,

spiritual and social development in free and decent

conditions.

An important project within this scope is the

National Center of Denunciation of Cybernetic

Crimes – Against Pedophilia on the Internet,

which increases the actions against internet

distribution of child pornography throughout

Brazil. The initiative increases the capacity for

processing, monitoring, generating and forwarding

crime news relating to anonymous denunciations

to the National Center of Cybernetic Crimes,

affecting 18,250 people.

One of the stages of the Petrobras Development &

Citizenship program is the public selection which,

in 2007, approved 72 new projects. The results were

disclosed in May 2008. The selection process un-

dergo a Technical and Administrative Trial, a Selec-

tion Committee and Deliberative Council to assure

transparency throughout the selective process.

Petrobras acknowledges and encourages receiving

projects that develop techniques and methodologies to

improve community involvement. The company, mem-

ber of the Social Technology Network (RTS), valorizes

actions which re-apply social technologies mapped by

the RTS or develop new technologies with potential for

addition to the Network.

In 2008, the Petrobras Development & Citizenship

petrobras acknowledges and encourages receiving projects that develop techniques and methodologies to improve community involvement

Human r igHts

41

program directly attended 520,000 people, resulting in

the generation of 6,865 jobs by direct investment and a

201% increase in the average income per capita of the

participants. Thirty-four percent of those attending

professional training courses were awarded certificates

accredited by the National System of Professional Cer-

tification. Moreover, 23% of the public involved was in

the 15–29 age group, and 96% of the participants in the

projects to guarantee the rights of children and adoles-

cents fully completely the course. This information was

obtained from 295 corporate projects.

The sponsored projects are followed up by a set of

performance indicators and goals, which make it pos-

sible to monitor and assess the results nationwide on

an integrated basis. In 2008, a social investment system

was set up in Petrobras and a guide to best social in-

vestment management practices prepared, consider-

ing the three dimensions of sustainability – economic,

social and environmental. This system also adopts the

principles of the UN Global Compact, GRI, Agenda 21

and WBCSD.

Another Petrobras social action is the contribution

to the Fund for Childhood and Adolescence (FIA). In

2008, R$ 48.5 million was allocated to 268 projects. The

purpose of the main projects, in partnership with the

Special Bureau of Humans Rights and federal, state and

local councils for the rights of children and adolescents,

is to act in the following areas: child labor, sexual ex-

ploitation, domestic violence, socio-educational mea-

sures, family and community coexistence, and so on.

soCial investment assessment systemPetrobras has developed an information system for

integrated social project monitoring and assessment.

It measures the results of the sponsored actions and

presentation of the Afro reggae Group, in rio de Janeiro


prinCiple 1


ed human rights

42

follows the scope of the defined goals and objectives.

The company shares with its social department the

learning and management technologies developed by

its business department. Through the social investment

assessment system, it is possible to guide the organiza-

tional units of the Petrobras System in standardizing

procedures for analysis, selection, approval, follow-up

and assessment of the sponsored social projects, estab-

lishing the methodology, criteria and indicators to be

adopted for all social investments.

The system complies with the company’s Strate-

gic Plan, Business Plan and Capital Discipline to ap-

ply best practices for the in-company enhancement

of the social project management process. Based on

internationally recognized methodologies, such as

that of the Project Management Institute (PMI), the

system adopts procedures similar to those of the

business projects. The methodology was discussed

and presented at the Social Responsibility Manage-

ment Committee and approved by the Executive

Board, and permits the management of Petrobras

social investments in an increasingly transparent

and effective manner.

The results of the projects are followed up physi-

cally and financially using standard tools, such as

the Quarterly Monitoring Report, the Budget Execu-

tion Follow-up Report and the Final Report of Les-

sons Learned. Moreover, technical visits and tele-

phone contact provide the follow-up of the Social

Investment Results Indicator (IRIS), which is part of

the Petrobras Balanced Scorecard (BSC). IRIS is an

indicator for measuring the performance in achiev-

ing the social goals established by the Petrobras De-

velopment & Citizenship program for the portfolio of

its sponsored projects, quantified during the process

of approving the Strategic Plan, ref lecting priorities

of the social actions.

IRIS and the indicators which compose the sys-

tem are accompanied every quarter by the Social Re-

sponsibility Management Committee, which every six

months submits to the Executive Board a report with

the main results.

ACtioN liNe CoMpoNeNt iNDiCAtors oF irisproJeCt

portFolio GoAls

GeneralPercentage of adolescents and youths (15 to 29 years old) of the total number of participants in the projects supported.

50%

Quantity of formal jobs generated by the strategic action 10,000

Generation of Income and Job Opportunities

Percentage of projects supported by Structured Business Plans. 70%

Percentage of projects supported, with technology and/or infrastructure incorporated by the organization, suitable for generating income and the opportunity of work.

60%

Percentage of increase in the average income per capita of beneficiaries of the project.

60%

Education for Professional Qualification

Percentage of participants in the professional training courses and the literacy projects with a certificate of conclusion.

80%

Percentage of the public participating in courses with certificates acknowledged by the National System of Professional Certification – SNCP.

60%

Percentage of participants in the projects of professional qualification with evolution of schooling.

30%

Percentage of the public participating in projects of professional qualification included in the labor market.

20%

Guarantee of the Rights of Children and Adolescents

Percentage of participants in activities of complementary education with improved performance in formal education.

60%

Percentage of participants in projects to guarantee children and adolescents rights concluding the total period of attendance.

80%

Percentage of professionals of the System of Guarantee of the Rights of Children and Adolescents in training activities.

70%

Human r igHts


43

The system of analyzing and selecting the Petro-

bras social projects is based on information sent by

the partner organizations. This refers to a qualita-

tive measuring process using standard methodol-

ogy and tools to reduced the relative subjectivity

of this data, formatting it in order to compare the

alternatives.

In the case of projects with different social targets,

an index is adopted that weights different benefits,

based on criteria selected in the approval of the Petro-

bras Development & Citizenship program. Thus, it is

possible to consider the actual contribution of Petro-

bras social investment to its different stakeholders. As

the criteria used are dynamic, it is necessary to make

adjustments and reassessments whenever the Strategic

Plan is revised.

The composition of the index to be used in ana-

lyzing the social projects is based on nine criteria se-

lected, considered to be important by Petrobras for

the period 2007-2012:

alignment of the project with the Petrobras ›Development & Citizenship program;

analysis of the social context; ›technical, operational and financial feasibility; ›expected results; ›degree of participation of the community; ›

partnerships; ›interaction with public policies; ›project disclosure strategies; ›potential performance of the project related to the ›goals established in the Petrobras Development &

Citizenship program.

Cultural sponsorsHipsPetrobras seeks to defend and valorize Brazilian culture

through a social sponsoring policy, jointly with public

policies for the sector and focused on affirming Brazil-

ian identity. The Petrobras Cultural Program (PPC) is

the company’s largest and most important action for

incentive to culture, which allocated R$ 206.8 million

to the sector and sponsored approximately 1,000 proj-

ects during the year.

By means of public selection and direct choice,

these actions contribute to strengthening the oppor-

tunities of creating, producing, disseminating and

enjoying Brazilian culture. Moreover, the company

also sponsors projects of permanent performance in

constructing Brazilian cultural memory, consolidat-

ing the work of saving, recovering, organizing and

recording our material and immaterial cultural heri-

tage. Priority is given to risk status cases, increasing

access to their content.

the petrobras Cultural program (ppC) is the company’s largest and most important action for incentive to culture, which allocated r$ 206.8 million to the sector and sponsored approximately 1,000 projects during the year


prinCiple 1


ed human rights

44

In 2008, the fifth edition of the PPC allocated R$ 42

million to public selected projects.

The PPC consists of three lines of action:

preservation anD memory — projects of protecting

the arts memory in Brazil, immaterial heritage and ac-

tions in museums, collections and libraries.

One example is the project Documents of Slav-

ery in Rio Grande do Sul, which aims to identify and

recount the slave trade in documents with a time

frame between September 1763, with the oldest pub-

lic deed in the collection, and May 13, 1888, when

slavery was abolished in Brazil. The project prepared

and published a research instrument consisting of

notes which summarize the contents of the docu-

ments, with information about slaves, businessmen,

sums involved and types of commercial relations.

This project made it possible to preserve the original

manuscripts, since the prior inquiry in a catalog of

information acts as a filter, with restricted handling

of the source documents. The activities were devel-

oped on the premises of the Public Archives of Rio

Grande do Sul State.

proDuCtion anD DisClosure — projects involving

cinema, music, scenic arts and literature, besides ac-

tions of difusion and democratic access to culture.

This is the case of the project Bando de Teatro

Olodum (Olodum Theater Band), from Bahia and

consisting of Afro-Brazilian performers in the 18-

51 age group. The Band participates in a number of

stage events in Brazil and abroad, revealing talents

such as singer Virginia Rodrigues and actor Lazaro

Ramos. This project gave rise to two books and the

feature movie Ó Paí, Ò!, based on one of its plays.

The project does research and creates plays based on

the stories and memories of the oldest members of

communities with a strong Afro Brazilian culture.

All activities permeate the capacity building of the

members, such as, for example, the presentation of

Cultural proJeCts investments in 2008

ACtioN liNe r$ tHoUsAND NUMBer oF proJeCts

Cinema 50,832 250

Music 44,352 217

Scenic Arts 37,495 141

Historic Monuments 20,671 38

Culture and Society 18,330 131

Museum Support (Collection) 12,110 82

Visual Arts 7,033 43

Immaterial Heritage 5,992 40

Literary Events 2,922 23

Architecture and Urbanism 2,660 16

Archeology 2,223 4

Cultural Spaces 2,131 16

total 206,751 1,001

Human r igHts


45

the group’s repertoire, workshops and exchange pro-

grams in some Brazilian towns.

art eDuCation — projects which combine art and

culture with education, increasing the possibilities

of critical reception of the arts and other cultural

performances.

A representative of this line of action is the project

of the São Paulo Point to Point Newsletter (Boletim

Ponto a Ponto). The newsletter has a monthly circula-

tion of 2,000 copies, with newspaper and magazine ar-

ticles and distributed free of charge throughout Brazil

to people with visual disabilities, institutions for the

visually impaired and public libraries. The project is

designed to fill the gap in available Braille material,

for learning, information and entertainment. In these

three segments, the actions include cinema, literature,

scenic arts, digital culture, music, the visual arts and

immaterial heritage. The Historic Monuments proj-

ects are sponsored by invitation from the company,

which makes it a priority to take actions to restore

listed buildings of eminent importance for Brazilian

culture, architecture and history, also noting the ur-

gency of the restoration.

All projects grant 100% tax benefit to the spon-

sor, such as short movie productions, and 30% to the

sponsor with limited tax benefit, such as the initiatives

of popular music. In addition to approval under the

Rouanet Act – Federal Law 8,313, which permits a 4%

or less income tax deduction by corporate sponsors –,

the projects are submitted to the Institutional Subsec-

retariat Sponsorship Committee of the Presidency of

Brazil (Secom) for approval before contracting.

sports sponsorsHipPetrobras is one of the most active companies in

sponsoring and encouraging sports in Brazil. In a

study by the international consulting firm Market

Analysis, Petrobras brand is indicated as one of

students of the dancing project in the community of Mangueira, in rio de Janeiro


prinCiple 1


ed human rights

46

sport proJeCts investments in 2008

ACtioN liNe r$ tHoUsAND

Performance sport 39,225

Motor sport 27,120

Incentive sport 2,598

Others* 6,900

total 68,951

* it includes projects of units of the international area and reFAp.

the brands most closely associated with Brazilian

sports. In 2008, the company invested approximately

R$ 61.4 million in projects all over the country under

the Petrobras programs for Performance Sports and

Petrobras Motor Sports.

In the Petrobras Performance Sports, the com-

pany sponsors handball, surfing and tennis, besides

soccer, with the sponsorship of the Flamengo soccer

team with the largest number of supporters in Bra-

zil. Another incentive for sport is the official spon-

sorship of the Brazilian Olympic Committee (COB).

Petrobras was also one of the first companies to use

the benefits of the Federal Sports Incentive Act to

sponsor the preparation of the Brazilian Delegation

for the Beijing Olympic Games 2008.

In the Petrobras Motor Sports Program, the com-

pany focuses on technological cooperation, using the

racetracks to develop its products, under the strictest

conditions. The company sponsors competitions in

categories such as: rally, kart, truck, motorcycling and

prototype. A major example was its technical part-

nership with the Williams Formula 1 team, ended in

late 2008. The result was the development of Podium

gasoline, considered to be the best fuel available in the

Brazilian market.

In 2008, the plan was to launch the Petrobras

Sport & Citizenship program, but the public selection

process of sports projects did not achieve its main

objectives. Less than 30% of the projects registered

complied with the regulations and no proposals were

received from North or Northeast Brazil. Nor did it at-

tain the preferred minimum number of 50% of Educa-

tional Sport projects.

This is why in 2009 Petrobras intends to launch an-

other Petrobras Sport & Citizenship Public Selection,

with new guidelines for participation, considering the

Federal Sports Incentive Act, an essential tool for fos-

tering Brazilian sport. ■

Petrobras was one of the first

companies to use the

benefits of the Federal Sports

Incentive Act

Human r igHts


47

supplier anD Customer relations

COMPLIANCE WITHREQUIREMENTSENSURES BESTPRACTICES

petrobras operates in accordance with the social responsibility policy, following the human rights principle to ensure that the principles of decent work and non-discrimination in all its contracts are complicit. »

prinCiple 2Businesses should make sure

that they are not complicit in human rights abuses


48

Clauses that eliminate forced labor and abolish the use

of slave and child labor or labor in degrading conditions

are included in all Petrobras service contracts. Items

referring to health, safety, environment and social re-

sponsibility are also considered. With regard to sig-

nificant investments, it was not possible to identify the

total number of contracts with human rights clauses.

Petrobras intends to compile this information during

2009 to publish it in the next report.

From the List of Petrobras Goods and Service

Providers , it is possible to select among the supply

companies those that are able to comply specific

criteria. Registration is made in a single database

available to the entire company. Upon registering,

the company must comply with certain require-

ments for the legal, technical, economic, HSE and

social responsibility criteria. Thus, Petrobras in-

tends to obtain better management in the process

of procuring goods and services and promoting the

integration of the activities relating to assessment

of its suppliers.

The company also assesses the registered compa-

nies and undertakes on-the-spot audits in their head

officers and onsite. The supplier that is registered, re-

newed or has increased scope approved is visible to all

the company units and receives the Registration Quali-

fying Certificate (CRCC), valid for a year.

The Engineering area, for example, assesses sup-

pliers using the Engineering Supplier Management

Program (PROGEFE). During the year, 180 of the 338

suppliers that provide services considered critical were

assessed. In the Downstream area, on the other hand,

under the Responsible Partnership Program, guidance

work was done in 2008, based on social responsibility

aspects, involving 123 Petrobras suppliers of critical

product resources and 67 fuel customers nationwide.

All were assessed in order to identify the progress of

management processes and encouraged to be commit-

ted to improvements in quality, health, safety, environ-

ment and social responsibility.

engagement programsPetrobras takes actions to capacitate multipliers of

its Code of Ethics and disseminate its social respon-

sibility practices. The whole workforce must per-

form in accordance with the principles of the Code,

which stresses aspects relating to human rights and

relations with employees, customers, suppliers, out-

sourcees and society. The company provides semi-

nars, lectures and training to disseminate matters

relating to human rights. Subjects on harassment

and diversity are also discussed.

During 2008, 20,180 hours were devoted to ca-

pacity building in social and environmental re-

sponsibility with the participation of 3,022 employ-

ees and outsourcees. The Petrobras University ran

courses on citizenship, social responsibility, public

policies and globally responsible leadership (GRLI).

Subjects relating to social networks for commu-

nity development, preparation of social projects

for Petrobras Development & Citizenship were also

provided and classes given on the principles, con-

cepts, certifications and tools of Environmental

and Social Responsibility.

sUpplier AND CUstoMer relAtioNs

Human r igHts

49

All Petrobras service contracts contain clauses

on eliminating forced labor and abolishing the use

of slave and child labor or labor in degrading conditions

Also, seminars, workshops and special projects on

sustainable human development, voluntary work and

ethics were offered.

Each year Petrobras trains according to corpo-

rate standards and norms all its property security

employees in the policies and procedures relating to

the aspects of human rights. The contracted work-

force has a recycling course every two years, with

ideas about criminal law and the physical safety

of the facilities. To reinforce the importance of the

HSE guidelines with its contractors, Petrobras stan-

dards are presented with risk matrices, as well as

requirements for contracting of service providers,

in compliance with the strict selection criteria and

periodic assessment. ■

prinCiple 2

Businesses should m

ake sure that they are not complicit in hum

an rights abuses

youth that sambas, Works and is Happy project, rio de Janeiro


tHe proGrAM KeepiNG AN eye oN tHe eNviroNMeNt sUpports sUstAiNABle DevelopMeNt

Case stuDy

Human rigHts

50 Human r igHts

the program Keeping an eye on the Environment

was created to support sustainable development in

communities with a low rate of social inclusion, in ar-

eas directly affected by Petrobras. Its actions focus on

the construction of Community Agendas 21 and on the

articulation and implementation of the Community

Action Plan through a participative and democratic

process based on the partnership between the com-

pany and different social actors.

The main role of Petrobras in the program is to

support the mobilization of community associations,

companies, institutions, NGOs and governments to

identify demands, combine common projects and

structure the collection of required resources to be

able to consolidate them.

The program’s methodology adopts the same pro-

cedure as the Brazilian Agenda 21, but at a local gov-

ernment level. It consists of field research and a socio-

environmental diagnosis that reveal the local reality

in the opinion of the inhabitants, indicating potential

strengths and weaknesses. The information is on a

democratic basis at thematic meetings and forums in

the communities, with the participation of the differ-

ent social actors.

Diagnoses and action plans generated by the Commu-

nity Agenda 21 are used to identify opportunities for the

Petrobras Development & Citizenship program and Petro-

bras Environmental program. Petrobras has invested ap-

proximately R$ 8 million since 2004, when the program

Keeping an Eye on the Environment was launched. ■

51

main results

Domiciles mapped 269,195

Domiciles surveyed 100,220

Accumulated socioenvironmental information 7,215,840

Community Agendas 21 ready (not implemented) 338

Total of Technical Assistants 174

Total of Community Agents 4,735

Total of Forum Advisers 2,300

People directly involved 6,769

People indirectly involved 1,000,000

sCope

States 14

Municipalities 144

Communities 352

Business Units 16

NGOs 15


LABOR

52

D i v e R s i t yQuALity Of Life

Benefits

fReeD

OM

Of

As

sO

CiA

tiO

n

labor Searching for fulfillment and commitment of its workforce, in 2008 Petrobras held campaigns and events in order to invest in accident and disease prevention and to improve the health of employees and communities where the company is present. Petrobras invested R$ 110.7 million in occupational safety and health. It also inaugu-rated the new headquarters of Petrobras University, in Rio de Janeiro, one of the first eco-sustainable buildings in the city. Following its commitment to ensuring that no ca-ses of child labor occur in its supplier chain, the company transferred R$ 48.5 million to Councils of Rights of Children and Adolescents throughout Brazil. The respect for diversity and non-discrimination earned Petrobras, for the second year running, the Gender Equality Seal, granted by the Special Secretary of Policies for Women, with the seal of UN Development Fund for Women (Unifem) and of the International Labor Organization (ILO).

53

sA

fe

ty HeALtH

ReMuneRAtiOn

RigHts

eQ

uit

y

eixo54

WORKFORCE INCREASES 52.1% IN FIVE YEARS

At the end of 2008, the workforce of the Petrobras system consisted of 74,240 employees, 260,474 outsourcees from service companies and 1,213 interns. The number of employees increased 7.7% from 2007. »

l abor

Workers


When compared with the figures of five years ago, the

percentage increase is 52.1%, which reflects the growth

of the company in recent years. Of the total number of

employees, 67,465 are allocated in Brazil and 6,775 in

units abroad.

The large majority of the employees of the Petrobras

System (73,875) have a contract for an undetermined

time. There are also 321 with a fixed-time contract and

44 with a special contract (no defined term, but linked

to a director’s mandate or term of office).

In 2008, 6,351 employees were hired in Brazil. With

highest turnover rates in Brazil, of which the percentage

in 2008 was 5.71%, were distributed as follows: by gen-

der, among men (4.6%); by age, among people under 25

years old (1.8%); and, by region, in the Southeast (4.01%).

In the Petrobras System, including its units abroad, the

total rate was 6.15%. ■

Of the total number of employees, 67,465 are based in Brazil and 6,775 in units abroad

55

Personnel in brazil(By RegiOn)

COMPAny sOutHeAst sOutH nORtH CentRAL-West nORtHeAst tOtAL

Petrobras Holding 38,188 1,966 1,270 134 13,641 55,199

Petrobras Distribuidora 2,284 288 174 244 551 3,541

Liquigás 1,883 806 100 170 430 3,389

Transpetro 3,618 211 119 51 403 4,402

Refap 832 832

Petroquisa 95 2 5 102

total 46,068 4,103 1,663 601 15,030 67,465

Personnel in tHe international area

COuntRy tOtAL

Angola 41

Argentina 4,812

Bolivia 456

Chile 4

Colombia 319

USA 251

Japan 210

Libya 19

Mexico 25

Nigeria 36

Paraguay 226

Turkey 11

Uruguay 274

Venezuela 91

total 6,775

Personnel in brazil

WORK systeM tOtAL

Shift 14,573

Administrative 40,588

On call 4,924

Offshore 2,859

Field Special 475

Special Air Support 39

Operational 3,966

Technical 41

total 67,465

soCial anD enV ironMental rePort 2008

eixo56 l abor

HealtH, safety anD Quality of life

INVESTMENTS IN HEALTH AND SAFETY TOTAL R$ 110.7 MILLION

Petrobras incorporates health, safety and environment (HSE) in its business strategy. from assessments of labor and environmental impacts and health hazards of the workers and surrounding communities, the company runs prevention programs to improve the quality of life, including the physical, emotional and social aspects. Throughout the year, R$ 110.7 million was invested in occupational safety and health. »


The company identifies, controls and monitors risks,

adapting the safety of processes to best global practices

and is prepared for emergencies. The periodic update of

the HSE policy, guidelines and goals HSE is designed to

maintain compliance with the Petrobras Strategic Plan

and the prevailing legislation in the areas of health,

safety and environment. The collective labor agreement

(ACT) 2007, valid for two years, emphasizes increased

efficiency, quality of work, competitiveness and safety

and health of employees. A chapter is devoted solely

to the issue of health care, detailed in themes such as:

periodic medical examination, employee HSE commit-

tees, Internal Accident Prevention Commission (CIPA),

Prevention in Occupational Health, Food and Periodic

Nutritional Assessment Programs, Contingency Pro-

gram, Prevention in Occupational Safety, Firefighting,

Biological Environmental Monitoring and Health Poli-

cy, and so on. Periodic examinations free of charge for

employees are also agreed with union entities, as well

as HSE committees and CIPA.

The company has Occupational Health Standards

and Procedures and is developing the HSENET, a

software for support in the study, assessment and

management of occupational health, safety and envi-

ronmental aspects and impacts, in addition to emer-

gencies and also management of legal requirements.

Offshore naval complex of Rio grande, in Rio grande do sul


eixo58

HeALtH, sAfety AnD QuALity Of Life

l abor

The Occupational Health Medical Control Program

(PCMSO) helps to monitor and guide all members of

the Petrobras workforce. The workers receive an Oc-

cupational Health Certificate and the facilities adopt

operational procedures with instructions to minimize

risk exposure. Moreover, seminars about risks in the

work place, Health Policy and the right to refuse work

in conditions of serious and imminent risk are held.

ManageMent of HealtH anD Quality of lifeThe entire workforce is represented in HSE-related discus-

sions through formal committees such as CIPA, HSE Com-

mittee of employees and outsourcees, and Committees for

the Benzene Agreement.

The Multidisciplinary Health Care (AMS) provides

a health plan to its employees, retired workers, pen-

sioners and their dependents, with medical, dental

and psychotherapeutic coverage. Petrobras employees

have treatment for psychosomatic and psychological

disorders or stress-related problems. The company also

offers the Pharmaceutical Benefit, which offers special

conditions in procuring medicaments by the beneficia-

ries of the plan, throughout Brazil.

During the year, campaigns and events were held

to invest in accident and disease prevention and in im-

proving health condition of the workforce and suroud-

ing communities. Actions were taken and seminars,

presentations and playacting developed in relation to

themes as HIV, alcoholism, STDs, tobacco addiction and

stress. There were also lectures about combating dengue

explaining the forms of prevention, main symptoms and

care when contracting the disease.

The workers and communities around the Urucu/

Coari/Manaus gas pipeline, Amazonas State, benefit

from actions of prevention, diagnosis and early treat-

ment of cases of malaria, dengue, yellow fever, Chagas

disease, leishmaniasis, filariasis and other diseases.

Petrobras also monitors the accidents caused by poi-

sonous animals.

In 2008, a national vaccination campaign was im-

plemented against German measles, measles and teta-

nus for the company’s workers and surounding com-

munities. Approximately 900 workers were immunized

with the double viral and anti-tetanus vaccines.

Petrobras organizes the Anti-flu Vaccination Cam-

paign, immunizing approximately 13,500 people, which

corresponds to approximately 62.5% of the expected

public and an increase of about 12.6% compared to the

2007 campaign.

The company HIV/AIDS policy emphasizes coopera-

tion for the development of public policies for guidance

and prevention of the disease. Diagnostic tests are pro-

vided free of charge to all employees, on a voluntary ba-

sis. Petrobras offers medicaments, for employees and de-

pendents who are HIV positive. Moreover, the company’s

health professionals are trainned to attend this specific

public. As preventive measures, campaigns of awareness

are organized for the workforce to inform them about the

means of transmission, adopting safe behavior and under-

standing individual risks. The policy intends to avoid dis-

crimination in the workplace, ensuring the confidentiality

of services of advice and health care.

Petrobras maintains contact with national and in-

ternational organizations responsible for the surveil-

lance, assistance and research about the HIV virus.

In 2008, the national vaccination campaign

against German measles, measles

and tetanus addressed the workforce and

surronding communities

59rel atór io anual 2008

Maintaining the trend of improvement in previous

years, in 2008 Petrobras recorded a 0.59 drop in the TFCA.

The value matches the number of casualties (employees

and outsourcees) with leave for every million man-hours

with exposure to risk.

The fatalities in the workforce, including employees

and outsourcees, came to a total of 18 cases. Five were

caused by an air crash and four in road accidents – a

sharp drop compared with the nine fatalities in road ac-

cidents recorded in 2007, as a result of the different pre-

vention actions of the company.

Petrobras follows up the results in the health

area by indicators such as the Percentage of Time

Lost (PTP), referring to the employee absenteeism

from work due to illness or accidents. In 2008, the

company recorded a PTP of 2.31%. ■

59

HealtH anD safety inDiCatorsThe Corporate System of Recording Accidents (SISIN)

monitors the operations of the company by a system

which integrates all the information of the safety area. By

means of SISIN the indicators for the accidents with injury

of employees and outsourcees workers are consolidated

and reports are generated for the follow-up and control of

accidents, abnormal occurrences and costs involved.

In certain cases the safety standards adopted by

Petrobras even exceed Brazilian legal requirements.

With a view to safety standards that place the company

on the same level of the global majors oil and gas compa-

nies, the maximum limit allowed for the Frequency Rate

of Casualties with Leave (TFCA) for 2010 was established

at 0,5%, including employees and outsourcees what rep-

resents a level of international excellence.

freQuenCy rate of Casualties WitH leaVe (tfCa)*

year 2004 2005 2006 2007 2008

TFCA 1.04 0.97 0.77 0.76 0.59

fatalities

year 2004 2005 2006 2007 2008

Total 16 15 9 15 18

fatal aCCiDents rate (far)**

year 2004 2005 2006 2007 2008

FAR 3.30 2.81 1.61 2.28 2.40

PerCentage of tiMe lost (PtP)

year 2004 2005 2006 2007 2008

PTP 2.57 2.48 2.06 2.19 2.31

* tfCA: number of casualties per one million men-hours with exposure to risk ** fAR: number of fatalities per 100 million men-hours with exposure to risk


60

RECOGNITION OF THE VALUE OF EMPLOYEES

Brazilian legislation provides that recruitment of Petrobras employees shall be by a public selection process. »

reMuneration anD benefits

l abor

ProPortion of loWest Wage CoMPareD to brazilian MiniMuM Wage*

COMPAny LOWest WAge %

Petrobras Holding R$ 1,539.43 3.71

Petrobras Distribuidora R$ 1,318.30 3.18

Liquigás R$ 619.27 1.49

Transpetro R$ 1,318.00 3.18

Petroquisa R$ 1,394.16 3.36

* Minimum wage in Brazil in 2008: R$ 415,00

61

In its Code of Ethics, the company agrees to promote

equal opportunities for all employees, in all policies,

practices and procedures; adopting as exclusive crite-

rion for professional growth individual merit based on

performance assessment; and guaranteeing the right to

know and be represented at the preparation of the crite-

ria of functional progression and evaluation.

The top executives are employed on recommendation

by the company shareholders. In the international area, re-

cruitment is based on analysis of resumes and interviews.

The salaries of employees match the professional

activities performed and responsibilities involved. All

employees receive their annual Share in Profits and Re-

sults (PLR), based on the company’s economic perfor-

mance, when there is a profit in the fiscal year. In accor-

dance with corporate policies, there is no relationship

between remuneration and individual performance.

In the case of outsourcees, Petrobras encourages

contractors to use preferably professionals from the lo-

cal market, with skills required for the services.

soCial seCurity anD otHer benefitsAcknowledging the value of the balance between

professional and personal life, Petrobras runs pro-

grams focused on basic needs, physical and social

wellbeing of its employees, retired workers, pension-

ers and their dependents.

The Petros Plan of the Petrobras System supple-

ments the social security benefits , in order to provide

security and quality of life for its employees and their

families during their working lives and upon retire-

ment. The Plan covers retirement, death allowance,

benefit in event of accident and confinement, private

resources for death and an end-of-year bonus.

All employees in Brazil are entitled to the health

plan AMS (Multidisciplinary Health Care), dental plan,

meal tickets and transportation vouchers. Other ben-

efits offered to the employees include the complemen-

tation of the sickness benefit, which ensures full remu-

neration of the absent employee due to an occupational

accident, during the first four years of leave, or the first

three years of a work-related disorder.

PerforManCe assessMentPetrobras offers career and remuneration opportunities

by the standards of the labor market. Employees are as-

sessed by their goals and skills under the Performance

Management system (PM), the main tool for indicating

an advance in level and promotion.

This is an annual process and analyzes the need for

capacity building in order for the employee to acquire

and apply new knowledge. With the PM, the manager

and employee can reflect on performance and the re-

sults obtained, creating goals based on individual and

collective skills. The possibility of growth within the

company is evaluated based on results.

In 2008, approximately 99% of the workforce in

the Petrobras System was PM assessed.


eixo62 l abor

CaPaCity builDing anD DeVeloPMentCapacity building of employees is included in the compa-

ny’s investments, as an incentive to continuation educa-

tion, fully or partly financed, either at a higher technical

or post-graduate level (specialization, MBA, MSc or PhD).

Petrobras University (UP) is the main responsible for the

development and training of talents and skills required by

the employees. Pursuing so, the UP forms partnerships

with educational institutions in Brazil and abroad and

provides insite and distance learning using the Virtual

Campus, Digital TV and University TV Channel.

Higher level professionals recently recruited without

prior experience undergo training process up to a year

before starting work. During the training courses, the

employees improve their technical skills and acquire

organizational, governance and contextual knowledge

about Petrobras and the oil industry.

The UP consists of four science and technological

colleges (Exploration & Production; Downstream; En-

gineering; Gas & Energy), a Business and Management

college and a Technical College, and offers learning

solutions for courses of continued education and

training, providing the know-how for the entire

Petrobras System.

In 2008, the new UP headquarters were inaugu-

rated in Rio de Janeiro. It is one of the first eco-sus-

tainable buildings in the city and designed within

the regulations of the US Green Building Council,

following the standards that reduce environmental

impact, such as water collection and reuse; installa-

tion of isothermal windows; concept of landscaping

and green belts in proportion to the project; indi-

vidual air-conditioning control; soil decontamina-

tion and providing special parking areas for vehicles

with low emission. The Campus has nine f loors, ap-

proximately 52,000 m2 of built-up area and capacity

to operate simultaneously with 4,000 employees or

so on a course. The UP has 107 classrooms, including

nine special laboratories relating to Exploration &

Production and Information Technology areas.

ReMuneRAtiOn AnD Benefits

PROGRAMS AND BENEFITSthe highlights initiatives concerning employees are: the healthy eating program, nutrition assessments, occupational safety emergency plan, first aid, firefighting teams, environmental and biological monitoring, preventive health care.

the company also grants benefits such as:

special Assistance Program (PAe): a program for the children of employees and retired workers with special needs; ›Health Assessment Program for the retired worker (Pasa); ›educational Benefits: allowance for day nursery, attendant, nursery school, elementary school, high school and complementary lear- ›ning program;

Benefits in cases of fatal accidents with employees in the service of the company; ›Petrobras Agreement with the inss: it speeds up granting of social security benefits and humanizes the attendance to those in need ›of them;

Petrobras employees Club (Cepe): more than 30 clubs with a complete leisure facilities throughout Brazil. ›in Brazil, there is no difference in benefits according to the work system. in the international units of Argentina, Bolivia, Angola, the usA and turkey, some benefits, such as medical and dental care, life insurance, medicaments, meal tickets and refund of expenses on educa-tion, are only offered to full-time employees.

the company has the Retirement incentive Program, which facilitates the free and conscious decision of the employee to retire. the program addresses psychosocial, social security, legal and financial aspects involved in retirement, introducing a pre and post-retirement follow-up or helping to encourage entrepreneurship.

rel atór io anual 2008 63

aVerage Hours of training in 2008

CoMPanyaVg Hours eMPloyee

WitHout fnCtaVg Hours eMPloyee

WitH fnCt

Petrobras Holding 109.89 53.20

Petrobras Distribuidora 23.39 44.60

Liquigás 9.81 19.82

Refap 83.27 74.75

Petroquisa 0.22 2.73

Petrobras systeM total 98.60 52.03

CoMPanyaVg Hours eMPloyee

MeDiuM lVlaVg Hours eMPloyee

HigHer lVl

Petrobras Holding 47.88 201.94

Petrobras Distribuidora 21.64 38.64

Liquigás 9.75 17.98

Refap 75.67 115.64

Petroquisa 0.44 0.51

Petrobras systeM total 43.97 189.98

Liquigás implemented the Training Require-

ments Study program (LNT) in order to improve the

employees performance of their duties. The LNT, pre-

pared in detail over two years and revised yearly, or

whenever changes in the strategic objectives require

so, covers training to improve the output of the em-

ployees.

organizational aMbienCeThe Organizational Ambience Survey is carried out

yearly to know the opinion of the employees on several

aspects. The employees can express their perception

about working conditions and relations in the com-

pany, providing important basic material for human

resources management. The results of the Survey gen-

erate three indicators for the Petrobras Strategic Map:

the Employee Satisfaction Index (ISE), Level of Commit-

ment to the Company (NCE) and Level of Commitment

to Social Responsibility (NCRS).

In the survey of Petrobras Holding 2008, the ISE

showed a drop from 69% to 66% compared with 2007,

while the NCE fell from 77% to 73%. And, in the sec-

ond checking of the survey, the result of the NCRS

was 76%, recording a drop of five points. Fluctuation

in the results of ambience surveys is expected, as the

studies of this nature often reveal a picture of the

moment; i.e. they show aspects of the internal status

of organizations, and are also affected by external

factors, such as the political or economic scenario,

for example.

Over the years, an increasing number of employ-

ees have joined the survey, with a participation per-

centage of over 75% in the last four years. ■

aMbienCe surVey (%)

inDiCAtOR 2005 2006 2007 2008

ISE 66 68 69 66

NCE 77 78 77 73

NCRS* 81 76

* it started to be measured in 2007.

PartiCiPation PerCentage

yeAR 2005 2006 2007 2008

Percentage 78 80 81 77


eixo

OPEN DIALOGUE GUARANTEES WORKERS’ RIGHT

64 l abor

Petrobras recognizes the employee’s freedom of association and it has no recorded case of violation of this right. not only is it guaranteed by Brazilian law, but the commitment to freedom of association is also expressed in the Code of Ethics of Petrobras System, which rejects any form of discrimination against union-member employees. »

freeDoM of assoCiation PrinCiPle 3Businesses should uphold the

freedom of association and the effective recognition of the right

to collective bargaining


The company adopts an ongoing bargaining process

with unions. This dialogue contributes to major prog-

ress in the employees’ working conditions. All employ-

ees in the Petrobras System in Brazil are included in

the collective labor agreement. In 2008, an amendment

to its economic clauses was signed with the unions, to

update wage lists and the minimum remuneration by

level and system, plus bonus payments. Social issues

had already been addressed at the agreement negotia-

tion in 2007 and are valid for two years.

In the case of major operational changes that

may affect the work of the employee, Petrobras gives

formal notice well in advance using the available

in-company media. In the event of operational shut-

downs, notice is given 72 hours beforehand. Employ-

ees, however, are informed previously of any chang-

es and duly negotiated. Any really significant change

that would cause a strong impact is undertaken after

a management process with gradual implementation

of the changes, in order to inform the employees and

prepare them for the new situation.

Issues such as end of contract and personnel turn-

over are addressed in the human resources procedures.

The employee dismissed by the company without just

cause is entitled to 30 days notice before termination.

This case may only occur when fully justifiable and

with due evidence submitted by the employee’s im-

mediate management. Dismissals without just cause

involve forming a committee to analyze the case and

present its formal report. This committee consists of

three employees, including one representing the Hu-

man Resources department and another with no man-

agement function.

In cases of transfers at the initiative of Petro-

bras, implying a mandatory move of the employee’s

domicile, allowances are given for moving and set-

tling into the new work place, plus a paid allow-

ance. The destination unit may give the employee

up to ten consecutive days to settle, with another

possible ten-day extension. Offshore employees are

allowed 15 days allowance that may be extended to

another 15, if necessary.

In July 2008, a five-day strike restricted to the pro-

duction activities in Campos Basin was normalized

due to the contingency plan activated by the company,

with no loss to the supply market, company facilities

and workers’ safety. The reason for the movement was

a local claim relating to the disembarkation day of

the employees. That same month, there was a 48-hour

mobilization by the Brazilian Oil Workers Federation

(FUP) because of negotiations about the Profit Sharing

in 2007. In both cases, the relationship with the unions

and the ongoing bargaining process led to an agree-

ment between the company and unions. ■

In Brazil, all Petrobras System employees are included in the collective labor agreement

Operation in the terminal of Pecém, in Ceará


eixo66 l abor

RESPECT FOR HUMAN RIGHTS

the Petrobras social Responsibility Policy explicitly defines the rejection against degrading and slave labor in its production chain. in its supplier relations, the company requires, under its Code of ethics and contractual clauses, management practices that respect the internationally proclaimed human rights, refusing to accept forced or compulsory labor practices. »

refusal of forCeD labor PrinCiPle 4Businesses should uphold

the elimination of all forms of forced and compulsory labor


In Brazil, Petrobras is a signatory of the National Pact

for the Eradication of Slave Labor since 2005, when it

was created.

The incorporation of Petrobras Biocombustível in

2008 and the growing demand for biofuels, such as

ethanol, indicated a vulnerability of the sugarcane

industry in Brazil: the large number of workers in

degrading conditions. In order to prevent its suppli-

ers from using labor in such conditions, all company

goods and services contracts include a clause forbid-

ding slave labor, under penalty of rescission of con-

tract and fines.

All suppliers of Petrobras Distribudora, upon reg-

istration, sign a statement of commitment to social

responsibility, which has a specific clause on forced la-

bor: “The company must not be involved in or uphold

the use of forced labor. The workers will not have their

documents retained or be obliged to make deposits as

a condition for recruitment”. For ethanol procurement

contracts, a search for irregularities is checked at the

Ministry of Labor and at the database of Employer Reg-

ister of Administrative Rule 540, so called blacklist.

Considering its representative status in the Bra-

zilian goods and services supply market, Petrobras

believes that these requirements have a positive im-

pact, since they encourage companies to base their

management on ethical and social responsibility

premises. For example, in 2008 Petrobras awarded

outstanding companies in the 2007 Responsible

Partner Program. This award was designed to share

the management practices and values of Petrobras

and reproduce them in the supply chain. In the 2008

edition, the award registration counted with 67 fuel

customers and 123 suppliers.

The Petrobras Development and Citizenship pro-

gram does not have a specific line directly addressing

forced or slave labor. However, it supported, through

the 2007 Public Selection, the Recycle Citizenship

project, proposed by the Center in Defense of Life

and Human Rights, from Açailândia, Pernambuco.

This project strives to create an economic alterna-

tive for employment and income generation based

on the solidarity economy. It addresses directly and

indirectly 200 low-income households arising from

slave and/or degrading labor on farms and charcoal

burning. The results were the non-acceptance of de-

grading labor conditions and fight against induce-

ment to slave labor.

No cases were recorded of degrading or slave la-

bor in the operations or administrative activities of

Petrobras. However, in August 2008 the case of a new

shale mine called Dois Irmãos was widely publicized.

In 2003 Petrobras began a process to acquire land to

install a new shale mine in the county of São Mateus

do Sul, Paraná. A total of 154 properties were acquired

on the basis of exchange of land and compensation

for the value of the property, including the existing

vegetation. In 44 of the 154 properties acquired by

Petrobras, it was established, in public hearings with

participation of the State Public Prosecution Service

and the Environmental Institute of Paraná (IAP), that

the former owners would be responsible for clearing

the existing vegetation.

In August 2008 the mobile inspection group

found labor irregularities in two of those 44 proper-

ties. Petrobras immediately summoned the owners

of the land to a meeting, together with the Ministry

of Labor and Employment (MTE) and Public Labor

Prosecution Ministry of Labor (MPT). It was con-

cluded that, from the commercial and civil view-

point, the signed contracts, together with the deeds,

met all the legal requirements.


eixo

RefusAL Of fORCeD LABOR

68 l abor

The MPT and MTE then submitted a draft Conduct

Agreement (TAC) to Petrobras. After finding that there

was no liability for the facts, the company made a pro-

posal to support the workers, which was not accepted.

Since no agreement has been reached, the proceeding is

being judged by the Paraná courts. ■

Application of carnauba palm covering on the oil pipelines of Alto do Rodrigues, in Rio grande do norte

In Brazil, Petrobras has been a signatory of the National Pact

for the Eradication of Slave Labor since 2005


ABOLITION OF CHILD LABOR

in Brazil, as defined by law, candidates for Petrobras public selection examinations must be over 18 years old. the result is that there is no major risk of the occurrence of child labor in its administrative activities and operations. »

guarantee of tHe rigHts of CHilDren anD aDolesCents

PrinCiPle 5Businesses should

uphold the effective abolition of child labor


eixo70 l abor

Besides complying with this legal determination, Petro-

bras seeks to ensure that there are no cases of child la-

bor in its supplier chain, as agreed in the Code of Eth-

ics and the Social Responsibility Policy. This is why the

company also includes in all its goods and services pro-

curement contracts a specific clause stressing the ban

on child labor.

With regard to the contribution to abolishing this

type of practice, each year Petrobras transfers contribu-

tions to the Fund for Childhood and Adolescence (FIA),

for the protection of the rights stated in the Statute of

Children and Adolescents.

Half of the resources are allocated to municipali-

ties of areas where Petrobras operates, identified by

the program Keeping an Eye on the Environment

with a Childhood Development Index (IDI) below

the Brazilian average. The destination of the remain-

ing 50% is decided by the FIA Committee, which

is composed of two Petrobras representatives and

seven representatives of the following institutions:

Press Agency for Children’s Rights (Andi), Brazilian

Council of the Rights of Children and Adolescents

(Conanda), United Nations International Children’s

Emergency Fund (Unicef), Brazilian Association of

Magistrates, State Attorneys and Public Defenders

of Childhood and Youth (ABMP), Community Image

Association, Escola de Gente NGO and the Afroreg-

gae Cultural Group.

In 2008, R$ 48.5 million was allocated to the

Councils of Rights of Children and Adolescents

throughout Brazil, for projects in 2009. As regards

the contribution made in 2007, 200 projects of 301

Councils were undertaken during 2008, attending

about 112,000 children and adolescents. The transfer

is deducted from income tax and the amount limited

to 1% of the year profit, as provided by Brazilian law.

on tHe rigHt roaDFor five years, the Caravan On the Right Road Truck

Driver has traveled the Brazilian roads in order to make

Brazilian society, especially the transportation sector,

aware of the sexual exploitation of children and ado-

lescents, violence against women, safety on the roads,

rational use of fuel and environmental preservation.

In 2008, 30,000 kilometers of Brazilian roads were cov-

ered, through 57 towns in 12 states. These actions had

the direct participation of 8,054 truck drivers and 5,249

children in 100 social projects.

One of the main actions of the On the Right Road

Truck Driver is the On the Right Road program for chil-

dren, which informs and makes truck drivers aware of

their important role in protecting children and adoles-

cents. They were all invited to join the campaign and pub-

licize Dial 100 – Dial National Denunciation of Abuse and

Sexual Exploitation against Children and Adolescents, a

direct dialing service toll free in all Brazilian states, co-

ordinated and executed by the Federal Government Spe-

cial Human Rights Bureau (SEDH), in partnership with

Petrobras and the Center of Reference, Studies and Ac-

tion about Children and Adolescents (Cecria).

The actions of On the Right Road have contribut-

ed significantly to combating sexual violence against

children and adolescents. This is noticeable by the in-

crease in denunciations recorded by Dial 100. In the

year in which the Caravan was launched, the Dial De-

nunciation received daily, on average, 12 denunciations

against child exploitation. Today, it records an average

of 94 denunciations per day.

The company strives to

protect the rights

stated in the Statute of

Children and Adolescents

guARAntee Of tHe RigHts Of CHiLDRen AnD ADOLesCents


Presentation of the santa Bárbara Philharmonic, in Laranjeiras, in sergipe

71

tHe MillenniuM goals for CHilDren anD aDolesCents in tHe brazilian seMi-ariD regionThe project contributes to achieving the Millennium De-

velopment Goals (MDGs) for children and adolescents

in approximately 1,400 municipalities in the semi-arid

region of Brazil, thereby creating all the necessary con-

ditions for achieving their goals and receiving the Unicef

Municipal Seal of Approval. The seal is a contribution to

the National Pact A World for Children and Adolescents

in the semi-arid region, a project that brings together

governments, civil society and companies to guarantee

the rights of each child and adolescent.

Of the 1,416 municipalities in the region, 1,130 –

where 10.6 million children live – formally joined the

initiative in the edition 2007-2008. Seventy-nine per-

cent of the municipalities registered requested assess-

ment of the their local government administration,

and 259 obtained the seal. The winning results show

an evolution up to five times more than the Brazilian

average for the same period.

In 2008, 9,119 professionals (advisers, promoters,

public managers, adolescents and young adults, edu-

cators and technical staff, communicators and sports

instructors) and 1,015 focal points were also capaci-

tated in the methodology and contents required to

achieve the goals.

Petrobras youtH aPPrentiCe PrograM Launched in April 2006, the aim of the Petrobras

Youth Apprentice Program is to promote social inclu-

sion by means of professional training of adolescents

in a situation of social vulnerability, thereby contrib-

uting to the inclusion of these apprentices in the labor

market.

The program offers fixed employment, a maximum

four-hour day’s work, full minimum wage, meal tickets

and transportation vouchers, Christmas bonus, holidays

coinciding with school breaks, FGTS and INSS [employ-

ment severance allowance and social security]. In 2008,

2,389 young people from all over Brazil were trained by

the program with an investment of R$ 19.76 million. ■

PrinCiPle 5

Businesses should uphold the effective abolition of child labor


eixo72 l abor

AFFIRMATIVE ACTIONS FOR EQUALITY

the commitment of Petrobras to promote respect for diversity and non-discrimination is established both in corporate documents and in affirmative actions with its stakeholders. »

CoMbating PrejuDiCe anD DisCriMination

PrinCiPle 6Businesses should uphold

the elimination of discrimination in respect of employment

and occupation


DISCRIMINATION COMPLAINTSthe Petrobras Holding Ombudsman’s Office recorded 23 complaints against discrimination, most of them coming from the workforce. the complaints involve discrimination for ethnic origin, sexual ori-entation, job positions and functions, union membership, religion, nationality, personal appearance, habits and race.

seven of these cases were being analyzed by the areas involved. ten complaints were filed for lack of interest of the complainants. in five cases, the complaints were addressed and deemed ground-less, and one occurrence was settled after a management warning and commitment by the accused to change behavior.

the exploration and Production area registered 32 cases of discrimination, which were sent to the respective area for solution. there was also a labor claim in which the employee alleged discrimination in the work environment, and claimed salary levels and compensation for moral damages. this action was dismissed. there was no record of cases of discrimination in the other units and in Petrobras Distribuidora, Refap and Liquigás.

The Code of Ethics mentions, among the main ethics

principles that must guide the activities of all Petrobras

System, respect for life and human beings and equality

in relations with people and institutions, regardless of

their differences and diverse conditions. The company’s

Social Responsibility Policy addresses respect for the

human and cultural diversity of its workforce in all

countries where it operates, and also encourages non-

discriminatory behavior.

The Diversity Commission, coordinated by the

Petrobras Ombudsman’s Office together with the Social

Responsibility Management Committee, comprises 16

representatives of the Petrobras System, including ar-

eas and subsidiaries, to discuss matters and propose

actions related to this theme.

Main aCHieVeMentsOne of the projects in 2008 to be highlighted is the

DVD For a Life without Violence in five Brazilian

capitals in partnership with the federal government

Special Bureau of Policies for Women (SPM) and with

the support of Actions in Gender, Citizenship and

Development (Agende) and Ministry of Culture. The

DVD was recorded at the celebration concert for the

first anniversary of the Maria da Penha Act (which

provides mechanisms to stop domestic and family

violence against women). It also contains informa-

tion for public consciousness and information about

the theme.

Also in 2008, the Diversity Commission ran the Petro-

bras Census for Diversity, one of the projects in the Petro-

bras For Gender Equality Program launched in 2006. By

means of a questionnaire with 29 objective questions,

the Petrobras Holding employees provided important

information for HR management improvement.

The success of the implementation of the equal-

ity action plan guaranteed the company for the sec-

ond year the For Gender Equality Seal, awarded by

the SPM, with the approval of the United Nations

Development Fund for Women (Unifem) and Inter-

national Labor Organization (ILO). Of the 50 organi-

zations that required to use the seal, 23 reached the

finals after implementing at least 70% of the actions

stated in the plan.


eixo74 l abor

COMBAting PRejuDiCe AnD DisCRiMinAtiOn

groWtH in PartiCiPation of WoMen at Petrobras HolDing

2003 2008

36,3

63

4,4

06

(1)

55,1

99

8,10

9(2

)

total of employees Participation of women

1) 12% Of eMPLOyees 2) 15% Of eMPLOyees

eQuality anD inClusion in Petrobras At the end of 2008 11,511 of the 74,240 employees in

the Petrobras System were women, equal to 15.5%. The

proportion is similar to the percentage of manage-

ment positions held, which represented 13%.

In Petrobras Holding from 2003 to 2008, the in-

crease in the number of female employees was 84.1%,

compared with 47.4% of the male workforce. In 2008

alone 1,120 women were hired.

Of the 67,465 employees of the Petrobras System

in Brazil, 1,068 have some disability. This figure cor-

responds to 5.96% of the 17,924 jobs for which the res-

ervation of vacancies is foreseen. The Brazilian legisla-

tion establishes the minimum reservation of 5% of job

titles for people with special needs.

The process of identifying the composition of the em-

ployees with reference to color/race began with the Petro-

bras Census for Diversity (further information on pages

76 and 77). The information given by employees to this

question was transferred to their registration file. Those

who did not answer had their color/race recorded as not

informed, but at any moment this information can be

modified by the employee. From January 2009 onwards it

will be possible to inform color/race upon recruitment.

The graphs on the following page describe the wage-

base distribution (fixed and minimum amount paid to

employee, not including any additional remuneration)

technician in the northeast Petroleum Byproducts and Lube unit laboratory


Wage ProPortion betWeen Men anD WoMen (BAsiC eDuCAtiOn)

female Male

employee with no-bonus function

51%

49%

50%

50% 52

%

48%

employee with bonus function

total

Wage ProPortion betWeen Men anD WoMen (HigHeR eDuCAtiOn)

female Male

47%

53%

employee with bonus function

47%

53%

total

47%

53%

employee with no-bonus function

75

eMPloyees by genDer(it DOes nOt inCLuDe tHe inteRnAtiOnAL AReA. tOtAL eMPLOyees COnsiDeReD: 67,465)

84.5%

15.5%

Male female

eMPloyees by age grouP(it DOes nOt inCLuDe tHe inteRnAtiOnAL AReA. tOtAL eMPLOyees COnsiDeReD: 67,465)

56.4%

21.6%22%

up to 30 years 31 thru 50 years

51 years or more

PrinCiPle 6

Businesses should uphold the elim

ination of discrimination in respect of em

ployment and occupation


between men and women in the Petrobras System, de-

tailed by employees with and without rewarded func-

tion, separated by the educational level of their respec-

tive jobs. ■

eixo76 l abor

from august to october 2008, all employees in

Petrobras Holding were invited to participate in the

Petrobras Census for Diversity. Through this census,

the company could collect information to map the pro-

file of its human and cultural diversity. The Census is

aligned with the guidelines set in the Social Respon-

sibility Policy and the Strategic Plan 2020. Previously,

in 2004, only a brief survey on employee color/race and

disability had been undertaken.

The information about diversity is crucial for the fu-

ture planning of policies, affirmative actions and other

initiatives for the continuous promotion of equality and

combating discrimination. The results will also help to

answer several indicators of social responsibility and

human resources in the questionnaire of the Dow Jones

Sustainability Indexes (DJSI), the social balance model

CENSUS FOR DIVERSITY

Case stuDy

labor

of the Brazilian Institute of Social and Economic Anal-

yses (Ibase), The Annual Information and Wage List

(Employees) of the Ministry of Labor and Employment

(Rais) and the For Gender Equality Program of the Fed-

eral Government’s Bureau of Policies for Women .

The Census questionnaire was prepared according

to the standards of the Brazilian Institute of Geography

and Statistics (IBGE) and had 29 objective questions

about socio-demographic characteristics: gender, age,

schooling, color/race, household, religion, disability,

community activity, etc. In addition to the information

obtained directly, several cross-references were applied

to allow the data to be examined more deeply.

Although participation in the Census was not man-

datory, 61.39% of the 51,707 employees in the company

in August 2008 answered the questionnaire, totaling

77

31,745 respondents. The absolute majority consisted of

men (82%), 17% were women. More than half (55%) were

in the 30-49 age group.

With regard to nationality, 99% were born in Brazil

from all states. The foreign employees include 20% born

in Portugal and 5% in the USA. Other countries were

homogeneously represented.

The employees of Petrobras are predominantly

white in color/race (64%), but there are a larger per-

centage of african descent (34%). Two percent said they

were of asian descent and 15 said they were indigenous.

In the sample there were slightly more white female

employees (68%) than male employees (63%). And, on

the other hand, slightly more african descent male em-

ployees (34%) than female employees (29%).

Almost all employees (96%) stated that they are phys-

ically fit to work, study and perform physical activities.

Only 3% stated that they had a permanent disability.

The percentage of employees who are the heads of

households is 84%. The men are in the majority (89%),

but there are also a large number of women who have

this responsibility (64%). In Brazil, women are at the

head of 33% of the households (National Household

Sample Survey – PNAD, 2007). In the case of Petrobras

this profile may be the result of the number of single

(32%) and divorced/separated women (13%).

Petrobras was not the first job for the large ma-

jority of employees (82%). In terms of the level of

education, more asian descent employees have com-

pleted university education (36%). African descents

and indigenous are predominant among the 32%

of those answering that concluded high school. The

white and asian descent respondents were the least

that interrupted their studies in this school period

(26% and 20%, respectively).

Most employees consider themselves religious: 66%

profess a specific religion, while 22% state that they are

religious but without any defined belief. Eleven percent

of those answering are atheists.

The table below compares the Brazilian Popula-

tion Census of 2000 with the Petrobras Census for

Diversity. ■

COLOR/RaCe BRaziL (2000) PetROBRas (2008)

White 54% 64%

African descent (Black and mixed racial origins)

44% 34%

Mixed racial origins 38% 28%

Black 6% 6%

Asian descent (*) (*)

Indigenous (*) (*)

Base 169,799,170 31,745

(*) Equal to 0.44 or less

sOCiaL aND eNV iRONMeNtaL RePORt 2008

78 eixo7878

Climate

eNViRm a p p i N geNeRgy

BiodiVeRsity

eCo

-eff

iCie

NCy


environment The company is committed to contributing to sustainable develo-

pment and upholds an environment management system to constantly improve

its processes. In 2008, R$ 1.97 billion was invested in the environmental area,

which includes operational processes and support for programs and projects. The

company also prevented the emission of 680,000 tons of carbon dioxide equiva-

lent (CO2e) and in the long term intends to prevent the emission of 2.3 and 4.5

million tons of CO2e in 2009 and 2013, respectively. These goals allow the reduc-

tion of the growth curve of the volume of emissions without restricting business

expansion. In order to improve the environmental performance of its processes

and products, in the same period US$ 2.8 billion will be invested in the biofuel

segment, with major participation in the business of biodiesel and ethanol.

moNitoRiNgBio

fuel

s

oNmeNtResouRCes

Co

Ns

um

pti

oN

eixo80

EXCELLENCE STANDARDS IN THE ENVIRONMENTAL AREA

By interacting in different manners with the environment in developing its business and activities, petrobras is committed to maintaining standards of environmental excellence in order to guarantee products and services suited to the expectations of its stakeholders and the legislation in force wherever it performs. »

env ironment

principle 7Businesses should support

a precautionary approach to environmental challenges

environment


In order to contribute to sustainable development, the

company maintains a management system focusing

on the environment for the continuous improvement

of its processes, including the productive chain, and

promotes internal and external actions of environ-

mental consciousness.

During the year, R$ 1.97 billion was invested in the

environment, including operational processes and sup-

port for programs and projects.

environmental management“Investing in the sustainability of its projects, products

and services, maximizing the benefits in the economic,

social and environmental spheres and minimizing the

adverse impacts and monitoring the entire life cycle of

its facilities, operations and products”. This is a Petro-

bras commitment provided in its Code of Ethics.

This is why legal preventive measures are perma-

nently adopted. The company manages the environmen-

tal aspects of its activities combined with the issues of

safety and health, as stated in its policy of Health, Safety

and Environment (HSE), directed at adopting the best

practices in its operations (see first back cover).

The third guideline of this policy, referring to risk

assessment and management, states that “risks in-

herent to the company’s activities must be identified,

assessed and managed in order to prevent the occur-

rence of accidents and/or ensures the minimization of

their effects”. On the other hand, the eighth guideline

addresses capacity building, education and conscious-

ness, which, when promoted, reinforce the commitment

of the workforce to its performance in health, safety

and environment. Some requirements of this guideline

are the implementation of programs which encourage

the adoption of safe and healthy conduct and respect

for the environment, in and outside the company, and

periodic evaluations of the workforce’s capacity build-

ing regarding HSE requirements.

The HSE Management Committee, consisting of

representatives from different areas and subsidiar-

ies, meets monthly to identify, plan and accompany

the development and application of management

strategies and policies common to the company with

regard to the topic, as well as to monitor and assess

corporate performance in the area of health, safety

and environment, proposing actions and initiatives

to optimize performance.

The Principle of Precaution – which provides eco-

nomically feasible measures to prevent environmental

degradation even in cases where there is no scientific

certainty of the threat of serious or irreversible dam-

age – is present in the assessments of risk and environ-

mental impact for new undertakings and in events of

change in existing facilities. An example of the applica-

tion of this principle is the assessment of impacts on

climate change by Petrobras to analyze new undertak-

ings. The Principle of Precaution was established at the

1992 United Nations Conference on Environment and

Development in Rio de Janeiro.

r&DThe company’s strategy for integrated growth until

2020 stresses operational excellence, management, en-

ergy efficiency, human resources and technology. Con-

cerning this last point, Petrobras has the competitive

edge of its know-how in deepwater exploration.

Moreover, the company has assumed the challenge

of being a world benchmark in technologies that con-

tribute to its sustainable growth in the oil and gas, pet-

rochemical and biofuel industry. Accordingly, its R&D

aims to provide and advance technological solutions

with a vision of innovation and sustainability.

81

total expenDiture anD investments in environment

desCRiptioN R$ thousaNd

Environmental expenses relating to company production/operation 1,635,203

Expenses with recovering projects of degraded areas, reforestation, etc. 185,664

Expenses with pollution control equipment systems 98,884

Sponsorships 53,763

total 1,973,514

social anD env ironmental report 2008

eixo

eNViRoNmeNt

82

With the work of Cenpes, Petrobras also reinforc-

es its role in the academic community by participat-

ing in different research networks involving science

and technology institutions. Approximately R$ 400

million are invested each year in Brazilian institu-

tions of this type.

Cenpes occupies a built-up area of 57,000 m2 in Rio

de Janeiro and currently has 30 pilot units and 137 lab-

oratories. After its extension, to be concluded in 2010,

it will then occupy 190,000 m2 of built-up area and 227

laboratories.

The new facilities will have a Collaborative Viewing

Center, with immersive systems intended for research

and simulations, and a convention center for 400 peo-

ple. They will also host the Petrobras Integrated Data

Processing Center, which will contain all the company’s

information technology services.

The extension, based on eco-efficiency, is planned

to have its own water treatment and reuse plant,

taken from rainfall and soil; facilities planned to use

natural ventilation and light and a natural gas energy

cogeneration plant.

From January to September 2008, registrations

were received for the 4th year of the Petrobras Technol-

ogy Award, designed to encourage and recognize the

contribution of the Brazilian academic community to

technological development of interest to Petrobras and

the Brazilian oil and gas industry. Graduates, post-

graduates (master’s degree or PhD) from any higher ed-

ucation institution in Brazil may take part. The awards

have nine categories and their result is to be announced

in the first semester of 2009. ■

R&d Center laboratory leopoldo américo miguez de mello (Cenpes)

env ironment


RISK CONTROL REDUCES IMPACTS

preventive and control measures adopted inits operations reflect the constant effort ofPetrobras to minimize environmental impacts. »

mapping, monitoring anD reDucing impacts

principle 7

Businesses should support a precautionary approach to environm

ental challenges


eixo84

mappiNg, moNitoRiNg aNd ReduCiNg impaCts

Petrobras runs ten

Environmental Protection Centers at

strategic operations

points

Ninety-three percent of the units in which this pro-

cedure can be applied are certified by Brazilian or in-

ternational institutions in compliance with ISO 14001

(environmental management) or OHSAS 18001 (safety

and health management) standards. In order to mea-

sure the application of HSE practices in the company,

52 operational units in Brazil, Argentina, the USA, Peru

and Ecuador were assessed.

In order to obtain a license for its operations or ac-

tivities with potential environmental impacts, Petro-

bras meets all requirements established by the legis-

lation in force. In Brazil, the process of environmental

licensing, under the jurisdiction of the Brazilian Insti-

tute for the Environment and Renewable Natural Re-

sources (Ibama) and state institutions, determines that

companies submit the measurement of potential risks

and impacts of their operations.

Licenses can be granted during the planning of the

project or activity, with approval of the location and con-

cept, on the authorization of the facility in accordance

with the approved specifications and of the operation

after checking the compliance with the previous licens-

es. For certain licenses it is necessary to undertake the

Environmental Impact Assessment/Environmental Im-

pact Report (EIA/Rima) and public hearings with com-

munity participation. Besides assessing the potential

environmental risks and impacts, the EIA/Rima also

covers socioeconomic issues, indicating, case by case,

the possible influences of the undertaking in a region.

The environmental licensing of the Rio de Janeiro

Petrochemical Complex (Comperj) brought together,

for example, 3,600 people to public hearings held in four

municipalities. As a result of this process, it was found

that the company required to give priority to aspects

relating to the reuse of water, atmospheric emissions

and the generation of waste in the project.

Among production concessions worth mentioning

is the extension of the contract between Petrobras and

the Ecuador government for operations in block 18 in

that country under an agreement made in October.

After a year, a decision must be made either to sign a

new contract or return the block to Ecuador, with com-

pensation for the non-depreciated portion of the in-

vestments. In December, the exploratory block 31 was

returned to the control of the Ecuador government, as

agreed between the parties.

environmental liabilities anD acciDent prevention In 2008, Petrobras Holding was notified of 13 records

of environmental violation, which are under discus-

sion, totaling R$ 109.15 million (considering only

fines of over R$ 1 million), besides a warning sanc-

tion, with no pecuniary value. Some of the charges

refer to drilling activities without a license from the

relevant environmental agency. Four public civil ac-

tions were also registered.

In Petrobras Distribuidora, there was no deci-

sion of any environmental lawsuit and no sentence

in closed proceedings. However, there were 13

charges of infringement in the scope of administra-

tive proceedings, in a defense case up to the end of

2008. Liquigás and Refap had no major fines of an

environmental nature or application of any non-

monetary sanctions.

With investments of approximately R$ 100 mil-

lion since 2001 Petrobras has maintained ten En-

vironmental Protection Centers (CDA) at strategic

points of the company’s operation in order to increase

the scope of its preventive actions and response to

emergencies. Each center has launches, ferries, oil

collectors, chemical dispersants, bioremediators,

env ironment


communication equipment and retention and ab-

sorption barriers, plus specialized staff always on

call for ready action.

Petrobras also has 13 advanced bases of these

CDAs, in addition to three boats equipped with the

necessary resources for a fast and more effective re-

sponse in event of oil spills. These vessels are ready at

the Brazilian coast, with a crew on board 24 hours a

day, and each is able to collect up to 300,000 liters of

oil per hour from the sea.

The company signed an agreement with the Bra-

zilian Navy to install an advanced Midwest CDA

station. The station is located on the banks of the

Paraguay River and will be operated by marines us-

ing Petrobras equipment to combat possible oil and

byproduct spills in the Paraguay River and its tribu-

taries. The region has heavy traffic of trucks supply-

ing Mato Grosso and Mato Grosso do Sul States, in

extremely sensitive environmental areas such as, for

example, the Pantanal wetlands. ■

accident management training on the urucu River in the amazon


principle 7


ental challenges

86

STRATEGY TO REDUCE INTENSITY OF EMISSIONS

Climate change is one of the focal points of the company’s new strategic projects. the aim is to achieve standards of excellence in the energy industry with regard to reducing the intensity of greenhouse gas emissions in processes and products. this will contribute to the sustainability of business and to reducing the impacts of global climate change. this challenge is present in the petrobras strategic plan 2020. »

climate change

environment

87

Different aspects are involved in the risks associat-

ed with global climate change. They include: regu-

lating aspects, harm to reputation, market loss and

restricted access to the financial market, besides

those relating to vulnerability and adaptation to

the adverse effects of climate change. The risks in-

creasingly inf luence the composition of investment

portfolios by international credit institutions and

the analyses of agencies assessing investments and

business performance. They include the Dow Jones

Sustainability Indexes, Goldman Sachs and the Car-

bon Disclosure Project.

Petrobras attended the annual meeting of the World

Economic Forum, in Davos, Switzerland, in January.

The event discussed issues on global development, such

as climate change and biofuels.

reDuction of the intensity of emissions In 2008, the company prevented the emission of

680,000 tons of carbon dioxide equivalent (CO2e), as

recorded by its indicator Avoided Greenhouse Gas

Emissions. Petrobras intends to avoid emission of

2.3 and 4.5 million tons of CO2e in 2009 and 2013,

respectively. The company goals allow a reduction in

the growth curve of the volume of emissions without

restricting business expansion, considering a busi-

ness as usual scenario.

In September, the 2nd Petrobras International

Seminar on the Geological Storage and Capture of CO2

took place. Its objective was to further the exchange

of experiences and discuss initiatives to mitigate

climate change by the capture and geological stor-

age (injection in underground rocks) of carbonic gas.

The event had more than 300 delegates, plus speakers

from 13 countries.

Besides these initiatives, the Petrobras Environ-

mental Program included as one of its lines of action

the sponsorship of carbon fixing and avoided emissions

projects, based on the productive reconversion of areas,

recovering of degraded areas and the conservation of

forests and natural areas. ■

TECHNOLOGICAL SOLUTIONSthe Climatic Change mitigation technology program (proclima) was created in december 2007 to provide technological solutions for reducing the intensity of greenhouse gas emissions (ghg) in petro-bras processes and products. the program focuses on the sustainability of the business of petrobras and seeks to contribute to the reduction of global climate change.

the previous year, the company created the thematic Network of Carbon sequestration and Climate Change for developing the domestic infrastructure and capacity building in technologies of capture, geological storage of Co2 and assessment of the potential vulnerability of the company business with regard to impacts on climate change. one of the results obtained by the network, consisting of 18 Brazilian research institutions, is the construction of the Center of excellence for Carbon storage Research (Cepac), in porto alegre, south Brazil.


principle 7


ental challenges

eixo88

IMPROVEMENT OF ENERGY EFFICIENCY

the energy efficiency projects implemented in the company,in 2008, led to a saving of 1.34 tons, or 240 barrels of oilequivalent per day (boed). this saving avoided the emissionof 40,000 tons of Co2 equivalent. »

consumption of energy,materials anD natural resources

principle 8Businesses should undertake initiatives to promote greater environmental responsibility

env ironment


The drop in saving compared to 2007 is due to the oper-

ation start-up of only 16 of a total of 53 energy efficiency

projects. Another 37 projects have still to be entered in

the Energy Efficiency Program, although they are now

in the conceptual, basic, or detailed design stage or in

the process of installation.

In 2008 Petrobras consumed 604,633 terajoules (TJ)

of energy in its operations from primary sources, with

emphasis on natural gas and fuel oil.

The improvement in energy efficiency is considered

to be a low-cost solution for reducing global warming-

related emissions and their impact on climate change.

The search for excellence in energy efficiency is an inte-

gral part of the corporate strategy of Petrobras.

Since 1974, the Internal Energy Conservation Program

coordinates and implements the company activities relat-

ing to energy efficiency. In alignment with the program,

each Internal Commission of Energy Conservation (Cice)

includes among its attributions the study of the potential

reduction of energy consumption or related expenses.

Cices also promote consciousness of employees about

the theme. The Petrobras System has 36 Cices, under the

Coordination Committee of Internal Energy Conserva-

tion Committees (Comcice), consisting of representatives

from several in-company business and service areas.

Some of the initiatives for reducing indirect

energy consumption are the installation of solar

heaters and optimizing the efficiency of the air-con-

ditioning systems, building illumination and com-

puters. Thermosolar installations in seven down-

stream units economized 2,885 MWh/year (10.39

TJ/year), equivalent to the emission of 296 tons of

CO2 a year. In the Bahia Exploration & Production

Business Unit the installation of a pilot plant is be-

ing negotiated for the use of wind energy with 5MW

capacity capable of an annual reduction of about

15,900 MWh (57.2 TJ/year) in energy consumption

from other sources.

In May, the Petrobras International Energy Effi-

ciency Seminar involved approximately 400 partici-

pants of the company and representatives of interna-

tional organizations, such as the United Nations (UN),

European Union and the Intergovernmental Panel on

Climate Change (IPCC). During the event the Petro-

bras Energy Conservation Award 2008 was given

to the best works developed in the company in this

area. The award was created in 1994 and includes the

categories “best results from conservation and ratio-

nal use of electricity and fuels by business units” and

“best practices adopted for energy use”.

energy consumption by source in the petrobras system

Direct energy teraJoules - tJ

Diesel oil 23,323

Fuel oil 123,358

Natural gas 257,843

Refinery gas 81,956

Residual gas 2,290

Liquefied petroleum gas (PLG) 3,534

Coke 69,601

Others (includes gasoline, alcohol and kerosene) 1,701

total diReCt eNeRgy CoNsumptioN 536,606

inDirect energy teraJoules - tJ

Imported vapor 12,173

Imported electricity 28,855

total iNdiReCt eNeRgy CoNsumptioN 41,028

total energy consumption 604,633 (1) (2)

1) the amounts encompass the consumption in refineries, plants, petrochemicals, thermoelectric units, gas pipeline network compression stations, administrative buildings, training service stations, etc. the calculation does not include the natural gas burnt in flare or that used as raw material in petrochemical plants and thermoelectric units.

2) the areas with the largest energy consumption are downstream (257,600 tJ), international area (144,700 tJ) and exploration and production (142,000 tJ).


eixo90

WaterDuring the year 195.18 million m3 of freshwater was col-

lected for use in the company’s operational and admin-

istrative activities. This volume came from 176 sources,

including 58 surface water bodies (66% of the total

volume) and 62 underground sources (25% of the total

volume). The remaining 9% was supplied by 56 down-

stream concessionaires or outsourced companies. The

reduction compared with the volume of water collected

in 2007 (216.49 million m3) was the result of the actions

taken by the company to improve the methodology

and system for studying and investigating information

about resource use. There were no qualitative or quanti-

tative records of sources significantly affected by direct

collection or effluent discharge.

In 2008, the company began implementing the

Data Hidro system. This database allows recording

and inquiries of quantitative and qualitative informa-

tion about the use of water and generation of liquid

effluents in Petrobras operational units. It also con-

solidates indicators and costs referring to use of such

resources. Data Hidro contributes significantly to

checking compliance with the standards of discharg-

ing effluents into the environment.

More than 70 projects are being undertaken relat-

ing to the rational use of water in the company facili-

ties, involving aspects such as the reuse of the natural

resource in the oil production process, purification of

effluents for reuse and improvement of desalinization

systems in offshore platforms.

During the year, the company reused approximately

12.88 million m3 of water in its processes and operations,

corresponding to 6.6% of the total volume of freshwater

collection. Some conventional practices of the oil and

gas industry are not included in this total, such as the

recovery of condensate in thermal cycles and recircu-

lation of cooling water. Further information about the

case study can be found on pages 106 and 107.

materials anD other natural resourcesIn June, during the Third Brazilian Trade Fair of Re-

cycling, Conservation and Environmental Technol-

ogy (ReciclAção), Paraná, South Brazil, Petrobras

presented the technology used by the Shale Indus-

trialization plant (SIX) for processing used and un-

usable tires, responsible for recycling more than 11

million tires since 2001.

Each ton of tires is processed together with the

shale and yields about 530 kg of oil, 40 kg of gas, 300

kg of carbon black and 100 kg of steel. The waste from

the process is used as production resources for thermal

power plants or may return to the soil without harming

the environment. The decomposition time of a tire in

nature is 600 years or more.

In the segment of asphalt products, one of the

products offered by Petrobras Distribuidora is rubber

asphalt, modified by the addition of ground rubber

coming from unusable tires. The use of this material

provides a highly elastic, age resistant and cohesive

coating , plus an excellent cost benefit ratio.

Petrobras has not yet consolidated the total vol-

ume of materials used, and the percentage of materi-

als used from recycling processes is still to be calcu-

lated. In the case of Petrobras Distribuidora, ethanol

is worth mentioning as the main material used, rep-

resenting 69% of the total value of the subsidiary’s

procurement. In 2008 procurement of the product was

nearly 4.39 billion liters. ■

CoNsumptioN of eNeRgy, mateRials aNd NatuRal ResouRCes

More than 70 projects

related to the rational use of

water in the company

installations are being

studied

env ironment


INCREASED DEMAND LINKED TO ENVIRONMENT COMMITMENT

The growing demand for petroleum and fuels,associated with further requirements in relation to the quality of the products can cause an increase in energy consumption in operational processes, and the ensuing increase in greenhouse gas emissions. »

emissions, effluents anD Wasteprin

ciple 8 B

usinesses should undertake initiatives to promote greater environm

ental responsibility


eixo92

Upon establishing goals to avoid the emission of 2.3 and

4.5 million tons of CO2 equivalent in its productive pro-

cesses in 2009 and 2013, respectively, Petrobras seeks

to balance the requirement to supply the energy for the

development of Brazil aligned with its commitments

to improve the environmental performance of its pro-

cesses and products.

Some of the main initiatives of Petrobras to reduce

greenhouse gas emissions in its operations are the ac-

tions for streamlining the use of fossil fuels and increase

its market share of biofuels, among other renewable en-

ergies. Investment in the biofuel segment alone for the

period 2009-2013 will be US$ 2.8 billion.

Petrobras has participated since the 1970’s in the

Brazilian National Alcohol Program (Proálcool) in the

different stages of the industrial production of ethanol.

The Internal Energy Conservation Program saved 1.1

gigawatts in the demand for electricity and about 2,500

barrels of oil equivalent per day.

Another program for Optimizing Gas Use is de-

signed to reduce burning and the release of natural gas

into the atmosphere on 24 production platforms.

In 2008, Petrobras emitted nearly 58.16 million tons

of carbon dioxide equivalent.

The company complies with Brazilian legislation

(Federal Decree # 2783, September 1998), which forbids

state-owned companies to procure plant or products con-

taining or using substances that destroy the ozone layer.

This is why Petrobras does not include in its processes and

activities an inventory of pollutants stated in the Montre-

al Protocol, an international treaty that regulates the pro-

gressive discontinuation of the use of such substances.

effluents anD WasteDuring the year 181.14 million m3 of water effluents

from company operations were discharged, including

sewage generated by the administrative and operation-

al units and the disposal of water from the petroleum

extraction process.

In accordance with legal and internal criteria, the

oil and grease load in the effluents from all Petrobras

facilities in 2008 was limited to 1,258 tons. In the down-

stream area, the load of chemical oxygen demand (COD)

in the effluents was 6,282 tons, while the ammoniacal

nitrogen load was limited to 1,269 tons.

All company operational units have effluent treat-

ment systems, constantly upgraded by new technolo-

gies, management practices or legal restrictions.

emissioNs, efflueNts aNd Waste

total greenhouse gas emissions(1)

(iN millioNs of toNs of Co2 equiValeNte)

yeaR diReCt emissioNs(2) iNdiReCt emissioNs total emissioNs(3)

2006 49.86 0.57 50.43

2007 49.52 0.36 49.88

2008 57.47 0.69 58.16

1) to calculate the mass of Co2 equivalent, one uses the formula (Co2 + 21*Ch4 + 310*N2o)

2) the value of direct emissions of 2007 was revised to reflect improvements in the calculation protocol. there is a difference of 0.11 millions tons of Co2 equivalent related to the value published in the social and environmental Report 2007.

3) the direct emissions include the estimates of the atmospheric emissions of the units installed in Brazil and in other countries, ships of the petrobras fleet and the contracted fleet that travel internationally. the indirect emissions refer to activities of purchasing electricity and vapor in Brazil. other indirect emissions, as defined in ghg protocol, are not within the scope of the inventory, and so their values are not recorded.

other air emissions(iN thousaNd of toNs)

yeaR NoX soX

otheR sigNifiCaNt aiR emissioNs(paRtiCulate)

2006 233.54 151.96 17.11

2007 222.65 150.90 15.22

2008 245.16 141.79 16.72

The renewable energy segment

will have investments

of nearly US$ 3 billion in the period 2009-2013

env ironment


The productive processes generated 233,425 tons of

hazardous solid waste during the year. The company

prioritizes initiatives that are designed to reduce the

waste generation at source, and invests in the devel-

opment of groundbreaking technologies for treatment

and reuse of such materials. These technologies include

non-destructive thermal plasma and the heat treat-

ment of multiphase materials and waste and bioreactor

treatment of soils, etc.

In 2008, 30% of the hazardous waste generated

went to recycling operations and/or reuse as an alter-

native fuel; 19% to industrial landfills; 14% to biologi-

cal treatment; 13% to incineration and 24% to other

technologies. No waste disposal was made in under-

ground reservoirs.

Petrobras did not undertake international waste

transportation nor import or export waste considered

to be hazardous, in conformity with the Basel Conven-

tion on the Control of Transboundary Movement of

Hazardous Wastes and their Disposal.

In 2008, the company recorded 79 occurrences of

byproduct and oil spills, with an accumulated volume

of 436 m3. In spite of the increase compared with the

previous year, the total volume was well below the

maximum limit allowed of 694 m3 established for the

year. The result keeps Petrobras at a level compatible

with the excellence benchmarks of the international oil

and gas industry. ■

past series of spills(1)

(m3)

2004 2005 2006 2007 2008

530 269 293 386 436

1) Counting spills of more than one barrel (0.159 m3) affecting the environment.

imbetiba effluent treatment plant (etp) in macaé, Rio de Janeiro state


principle 8

Businesses should undertake initiatives to prom

ote greater environmental responsibility

eixo94

PROTECTION OF BIODIVERSITY

petrobras biodiversity management has been systematized since 2006 by the Corporate Standard of the Management of Potential Impacts on Biodiversity. it provides criteria and procedures for the management of these impacts in the areas influenced by the company operations by the systematic assessment of risks and impacts on biodiversity and recovering of the ecosystems impacted, among other actions. »

bioDiversity

environment


The Strategic Project for Excellence in HSE establishes ob-

jectives relating to the management of biodiversity to be

achieved by the business areas and subsidiaries by 2015.

They are: identification and mapping of the protected,

sensitive and vulnerable areas in the vicinity of company

operations; assessment of the impacts of the operations

on protected, sensitive and vulnerable areas and diagno-

sis of the ecosystems impacted by the operations.

In the downstream refining and fertilizer plants, the

protected areas with a high diversity rate were mapped

inside the units and in the adjacent regions.

Petrobras has operated since 1988 in the Brazilian

Amazon rainforest, where its Urucu unit operates, oc-

cupying an area of 500 km2. This unit is considered to

be a benchmark in conservation and recovery of biodi-

versity. Some of the actions worth mentioning are the

maintenance of an orchidarium, where 80 local species

of orchid and bromeliad are studied, and a nursery with

86,000 seedlings of 60 native species. The intensive re-

planting program exceeds the milestone of one thou-

sand seedlings planted per day to restore the forest cov-

ering in clearings opened for drill wells, and 90% of the

area of deforestation has been recovered.

Transpetro pipelines and terminals also have im-

portant interfaces with sensitive and protected areas,

for example, bays, mangroves, estuary regions and the

Amazon rainforest.

In the international area it is worth mentioning the

Petrobras assets in Paraguay, oil and gas exploration off

the coast of Angola and the E&P facilities in Bolivia and

Peru, since they interface with protected areas.

The Macau wind energy plant in Rio Grande do

Norte is located in a region with a high diversity of bird

species. However, studies have not identified significant

impacts on these animals.

protecteD or restoreD habitatsPetrobras environmental management processes in-

volve initiatives of protection and recovery of the main

habitats located in the area of influence of its operations

or elsewhere considered relevant to the conservation of

biodiversity. When planning new projects, the existing

protected habitats and preserved fragments of native

vegetation are avoided.

In the various business units and subsidiaries of

the Petrobras System, different actions of recovery and

protection of habitats are executed by the company or

receive its support. In Rio de Janeiro, the highlights are

the projects addressing the Atlantic rainforest, includ-

ing Itatiaia National Park and the biological reserves

of Poço das Antas, União and Tinguá. A revitalization

project of the Canal do Fundão and its surroundings in

Guanabara Bay is also being developed, with an invest-

ment of R$ 195 million.

lanD use in legally constituteD permanent preservation areas (app)supply aRea uNits

BusiNess uNit total aRea (ha) total app (ha)

Fafen-BA (Camaçari. BA) 42.34 0

Fafen-SE (Laranjeiras, SE) 72.4 8.34

Lubnor (Fortaleza, CE) 37.99 37.99

Recap (Mauá, SP) 335.35 54.9

Reduc (Duque de Caxias, RJ) 990.55 433.12

Regap (Betim, MG) 1,096.19 167.04

Reman (Manaus, AM) 159.99 20

Repar (Araucária, PR) 990.4 47.1

Replan (Paulínia, SP) 940.1 38.03

Revap (São José dos Campos, SP) 981.2 42.2

Rlam (São Francisco do Conde, BA) 671.1 190.1

RPBC (Cubatão, SP) 682.9 97.3

SIX (São Mateus do Sul, PR)(1) 1,504 15.6

1) preliminary result. the mapping of siX has not yet been concluded.


principle 8



eixo96

BiodiVeRsity

strategies anD future plans for the management of impacts on bioDiversity Refining and fertilizer plants are adopting action plans

for biodiversity, which until 2009, provide actions such

as demarcating the area of direct influence of the unit,

characterizing the biodiversity in that area and pre-

venting or mitigating possible impacts associated with

their plant operations.

The future plans for the management of impacts

on biodiversity include the implementation of the

revegetation index, which considers the total de-

graded areas and restoration efforts in these areas,

besides improvement and implementation of the

Geographic Information System (GIS) in the down-

stream operational units.

In the Isaac Sabbá Refinery (Reman), in Manaus,

Amazonas State, the pilot project of biodiversity diag-

nosis in the area of the unit was conducted, with the

participation of approximately 80 researchers from

Brazilian institutes and universities. Physical, chemi-

cal and biological data of the Negro River, adjacent

narrow channels and fragments of onshore vegetation

were studied. A management plan for the area inside

the unit and a plan of monitoring the biodiversity

were also prepared.

In exploration & production activities, some of

the actions referring to biodiversity until 2015 are the

creation of a regional monitoring model of projects for

offshore petroleum basins. These projects will help in

the integrated assessment of the plant’s environmental

impacts and the best use of the resources invested.

presence of enDangereD species Petrobras operate in several countries with high

biodiversity. In many places there is a lack of in-

formation about the characterization and distribu-

tion of fauna and f lora. In this scenario, it is not

yet possible to list all endangered species in the ar-

eas close to Petrobras plants. In order to fill these

gaps, the company promotes and supports studies

for the best knowledge of the biodiversity in these

surroundings and identification of most suitable

actions for its protection.

dolphins in fernando de Noronha, pernambuco state

env ironment


The above table gives, as an example, information

collected by Petrobras or available from outside sources

about the presence of endangered species in the sur-

roundings of the company’s operations.

environmental sponsoringDuring the year Petrobras invested about R$ 53.8 mil-

lion in support of 188 projects and social initiatives

focusing on the environment. The Petrobras Environ-

mental Program (PPA), launched in 2003 and adopted

in Brazil, is responsible for 98.6% of the total amount

invested by the company.

In 2008, the program was reformulated, in line

with the new management challenges of the company

concerning social responsibility and climate change,

aiming to potentialize its results. Its theme was ex-

tended to “Water and Climate: contributions to sus-

tainable development ”.

The program has three strategic actions: investments

in sponsoring environmental projects; strengthening of

environmental organizations and their networks; and dis-

semination of information for sustainable development.

The first action invests, in a transparent, planned

and monitored manner, in projects that contribute to

the sustainable development of Brazil and focus on the

following lines of performance:

management of surface and underground water ›bodies, including the reversal of degradation

processes of water resources and encouraging and

practice of the rational use of water resources;

recovery or conservation of coastal, marine and ›freshwater species and environments;

carbon fixing and avoiding emissions based on ›the productive reconversion of areas, recovery

of degraded areas or conservation of forests and

natural areas.

enDangereD species iDentifieD in the operations' area of influence

BRasil aNgola peRu BoliVia

Flora 18 - 3 13

Fauna 176 8 74 -

Total identified endangered species 194 8 77 13

Present in IUCN list(1) 168 7 70 13

Present in Brazilian lists 90 - 19 -

Present in both IUCN(1) and Brazilian lists 80 - 12 -

1) iuCN – international union for Conservation of Nature and natural resources.

investment in environmental proJects in 2008

liNe of aCtioN R$ thousaNd

Management of surface and underground hydric bodies 25,836

Recovery or conservation of coastal, marine and freshwater environments and species 15,843

Fixing carbon and avoiding emissions 1,319

Strengthening of the environmental organizations and their networks 3,826

Dissemination of information for sustainable development 6,934

Others 5

total 53,763(1)

1) of this total, R$ 53 million was invested through the petrobras environmental program. the remainder corresponds to investments in the international area and Refap.


principle 8



eixo

The Live Coral Project off the coast of Bahia, Northeast Brazil,

works to conserve coral reefs and recover degraded areas

98

BiodiVeRsity

PUBLIC SELECTION OF ENVIRONMENTAL PROJECTSthe investments in sponsoring environmental projects include the process of public selection of projects, a regular practice of the company and performed every two years. the selection process is designed to promote democratic access and provide greater transparency with regard to the resources of the sponsorship program by registering projects from environmental orga-nizations all over Brazil. the proposals are examined by a team of professionals from petrobras, external specialists in the lines

of the program and representatives from civil society, government, universities and the press.

the third edition of the public selection of ppa was held in 2008, which had 892 inscriptions from all over the country, and su-pported 47 projects in all regions of Brazil. R$ 60 million will be invested in this process and each selected project may receive up to R$ 3.6 million. each project must present a minimum execution term of 12 months and maximum term of 24 months.

due to limited resources, another 35 projects that had good ratings could not be supported, but are now part of a project database. through this database, petrobras encourages actions for social responsibility in its productive chain. thus, partner companies, customers and suppliers can support the projects considered to be highly rated by the company.

The second strategic action of the Petrobras Envi-

ronmental Program is designed to promote partner-

ships and networks for interaction between the third

sector, public sphere and other companies, which in-

cludes contributions for capacity building of partner

institutions. The third focuses on communication ac-

tions, which discuss models and roles for performance

striving for sustainable development.

One of the initiatives of the program, the Savanna

Waters Project promotes the recovery and conservation

of water resources (35 springs, seven streams and one

river) in the region of Ceres (Goias), Midwest Brazil. It

concerns Brazil sustainable rural development, with

community participation and undertaking a participa-

tive socioenvironmental diagnosis.

The objective of the Sustainable Management of

Coastal Lagoons, on the Mid and Southern Coast of

Rio Grande do Sul State, is to study, assess, provide

and disseminate information and tools for better

use of water and sustainable management of the

water resources in the region. The project includes

a morphological and ecological study of 19 coastal

lagoons.

The Live Coral Project off the coast of Bahia, in

Northeast Brazil, works to conserve the coral reefs and

recover organisms that inhabit degraded ecosystems. ■

env ironment


SERVICES AND PRODUCTS ADOPT HSE GUIDELINES

Besides continually seeking to maximize the safety of its productive processes and the control and reduction of their potential impacts on the environment and health of employees, suppliers and communities, petrobras also takes actions to improve HSE performance of its products and services. »

proDucts, compliance anD transportation


principle 8



eixo100

pRoduCts, CompliaNCe aNd tRaNspoRtatioN

The standard ISO 14001 certifications, for example, re-

quire monitoring and minimization of the risks associ-

ated with products.

In the company, information sheets on the safety

of chemical products (FISPQ) are prepared and con-

stantly updated, in three languages (Portuguese, Eng-

lish and Spanish). Each product has a specific sheet,

also disclosed by the Petrobras Customer Channel. The

sheets contain information such as product composi-

tion, physical and chemical properties, health and en-

vironment hazards, care in handling, and actions to be

adopted in the case of accidents.

The package of sold products also has instructions

about care in handling and use of the products, plus

recommendations regarding their final destination.

The company’s business plan provides for compli-

ance of product quality with international specifi-

cations as one of the main driving forces in the new

refineries. In the operating units, projects are being de-

veloped focusing on the quality of diesel and gasoline.

Designed to generate energy in the industrial seg-

ment, Add Cleaner, for example, is a fuel oil additive,

which provides a reduction of up to 91% in the emission

of particulate material generated in the burning.

This result, consolidated during the use of the prod-

uct by industrial clients, exceeded the performance in

tests run in the Technological Research Institute of São

Paulo State (IPT), which indicated a reduction of 68%

compared to an ordinary fuel oil. Besides the environ-

mental benefits, the reduction in the formation of depos-

its and incrustations on the equipment is also noted.

Petrobras Distribuidora did a study on the life cycle

of an ecological asphalt, produced by adding recycled

rubber from unusable tires, compared with the envi-

ronmental performance of conventional asphalt.

Some additional stages of the life cycle of prod-

ucts are covered by projects, such as Keeping an

Eye on Fuel, a program for certifying the quality

of the products sold in the Petrobras service sta-

tions, and for recycling used lubricants, packaging,

asphalt and returnable LPG recipients (cylinders).

In compliance with Brazilian legislation, Petro-

bras Distribuidora collected 75,578 m3 of used lube

oil, corresponding to 34.48% of the total volume of

lubes sold.

Another initiative of the subsidiary is the Re-

sponsible Transportation Program, which seeks to

improve quality in its transportation services. The

program includes periodic meetings with the trans-

portation companies and assessments about the

drivers’ health conditions.

Transpetro studies the environmental aspects and

impacts, potential risks for occupational health and

safety for its terminals, stretches of pipeline and fleet of

ships. It has also undertaken specific studies for inter-

state pipelines and operational points. It also includes

management of quality of atmospheric emissions on

the fleet of its own vehicles, contracted vehicles and

stationary diesel engines.

The potential impacts from the company’s trans-

portation activities are associated with occurrences

involving ships and tankers, or bursting of pipelines,

which can cause spills of liquids or gases and of solids.

Possible consequences are contamination of the soil,

sources and atmosphere, besides the direct impact on

living creatures.

At Petrobras Holding strict criteria are applied for

safety in transporting people, related to both the speci-

fication and conservation of the vehicles and the con-

duct of the drivers.

Conpet has the

technical, financial and

administrative support of

Petrobras to encourage

efficient use of energy

sources

env ironment


petrobras distribuidora flex service station for biofuel vehicles

101

encouraging conscious consumption Linked to the Ministry of Mines and Energy, the Na-

tional Program of the Rational Use of Oil and Natural

Gas Byproducts (Conpet) has the technical, financial

and administrative support of Petrobras. The objective

is to encourage efficient use of energy sources energy in

different sectors, mainly in transportation.

Some of the projects included in the program are

Economizar (Saving), Transportar (Transporting) and

Conpet at School. Concerned with the highway trans-

portation sector (freight and passengers), the Saving

Program does assessments on diesel-fueled vehicles in

order to reduce fuel consumption and black smoke, and

the consequent reduction of other gases from the com-

bustion. It is estimated that a saving of diesel of approx-

imately 5% occurs in the fleets that join the program.

Transportar provides specialized technical support to

fleets of tankers that are fueled in the Petrobras refin-

eries, focusing on environmental aspects, reduction of

fuel consumption and safety.

Conpet at School shows the importance of the ratio-

nal use of energy to students of the elementary school

and technical colleges in the public and private school

systems. The actions of the project focus on the teach-

ers and lecturers, who act as multipliers of the informa-

tion. By 2008, there were 287 workshops in 557 counties

for 416,360 students.

Other highlights of Conpet are: the gas bus; the

National Award of Conservation and Rational Use of

Energy, which encourages the efficient use of energy

among goods and service providers in Brazil; the Brazil-

ian Labeling Program, which informs consumers about

the energy efficiency of products; and the Conpet Seal of

Energy Efficiency, for household gas equipment.

In November, the Brazilian Labeling Program was

launched to disclose information about the perfor-

mance of automobiles relating to fuel consumption in

metropolitan areas and on interstate highways. The

initiative is a partnership with the National Institute

of Metrology, Standardization and Industrial Qual-

ity (Inmetro), which coordinates the program. From

April 2009 onwards, the first vehicles will circulate

with the National Energy Conservation Label, which

will facilitate the choice between more economical

and efficient models.

The Conpet website presents the robot Ed, a mecha-

nism of artificial intelligence that interacts with the

user to answer queries about how to conserve energy

and other natural resources. ■


principle 8



eixo102

WORLD BENCHMARK IN BIOFUELS

from 2009 to 2013 US$ 2.8 billion will be invested in the biofuel segment, with relevant participation in biodiesel and ethanol business. »

reneWable energy principle 9Businesses should encourage

the development and diffusion of environmentally

friendly technologies

env ironment


This amount is an increase of 87% compared with what

was previously forecast (US$ 1.5 billion), in the Business

Plan 2008-2012. The planned goals intend to obtain, in

2013, the production of 706,000 m3 biodiesel and 1.25

million m3 ethanol. In order to meet the company strat-

egy, the subsidiary Petrobras Biocombustível S.A. was

incorporated in July to develop and manage producing

projects of these fuels.

Besides addressing part of the growing interna-

tional demand for energy from renewable sources,

biodiesel and ethanol increased the diversification of

the energy matrix and further reduced greenhouse

gas emissions, since they are less pollutant than fos-

sil fuels. Since July, all diesel sold in Brazil consists

of 3% biodiesel, in compliance with the national pre-

vailing legislation. Brazil has 46% of its energy ma-

trix based on renewable energy, while elsewhere in

the world this percentage is only 13%.

The performance in biofuels also focuses on the de-

velopment of technologies for producing energy from

residual biomass, such as sugarcane bagasse and husk,

rice bran or sawdust. These technologies include bio-

ethanol, ethanol produced by the action of enzymes on

the cellulose present in waste and which increase fuel

production by 60% in the same planted area.

Another highlight is the HBIO, a process to obtain

diesel oil by mixing vegetable oils and diesel oil under

certain conditions of temperature, pressure and hy-

drogenation. A pilot project is also being developed to

produce 50 m3 of jet fuel from renewable raw materials

(BIOQAV) for tests by December 2009.

An important objective that accompanies the

Biodiesel production is the promotion of regional

development, especially of the Brazilian semi-arid

region, by purchasing raw materials from family ag-

riculture. Petrobras has a network of 55,000 small

farmers that supply part of the oilseed feedstock

used in its biodiesel plants.

sunflowers, biodiesel feedstock, porteirinha, minas gerais state


eixo

ProductBiodiesel B100

1

3

87

10

11

12

13

14

9

9

46

2

5

8 Inputs Methanol, methylate, hydrogen chloride, silica, diatomaceous earth

SubproductsGrease acid GumSediment

4

Laboratory Specification Tests

10

Pre-TreatmentUnit

2

CoproductsGlycerin: Additive for diesel,chemical glycerin, etc.

3 Production ResourcesPhosphoric acid, caustic soda, silica, diatomaceous earth

7 Transesterification Unit

Effluent Treatment Plant

6

UtilitiesWater vapor, electricity,nitrogen, compressed air, cooling water

5

11

1

Other ServiceStations

Petrobras Service Stations

13

14

Raw Materials

Vegetable oilsFamily agriculture

Vegetable oilsOil market

Residual fats and oilsReciclying cooperatives

Animal fatOil market

12 DistributionDepots

B3 MixOrdinary dieselreceives 3% ofbiodiesel (B100) to create B3. FromJuly 2009 on it willbe replaced by B4.

Biodiesel Cycle

104

ReNeWaBle eNeRgy

In order to overcome some inherent challenges of

the activities in this segment, the company seeks:

to give priority to non-food feedstock, to avoid ›competition with food and affecting food prices;

to avoid single cropping, thus benefiting ›biodiversity and natural resources;

to avoid the advance of oilseed crops in areas of ›biodiversity conservation and sensitive ecosystems;

to eliminate unacceptable practices, such as the ›use of slave or degrading labor in the production of

raw materials, etc.

other reneWable resourcesIt is part of the Petrobras strategy in the gas and en-

ergy segment to invest in power generation from re-

newable sources. Approximately US$ 669 million will

be invested in this area in projects, such as the conclu-

sion of small hydropower plants (SHP) and the partici-

pation in new business in electricity, including wind

energy plants.

The company plans to consolidate its participa-

tion as an agent in the energy market participating in

future electricity auctions organized by the Brazilian

env ironment


principle 9

Businesses should encourage the developm

ent and diffusion of environmentally friendly technologies

government. It plans in 2009 to hold an auction for

contracting reserve energy specifically for wind en-

ergy power generation projects, the first of its kind

in the country. The supply is planned to start in 2012,

with a contractual term of 20 years.

In operation for five years, the Macau Pilot Wind

Energy Plant , in Rio Grande do Norte, is the company’s

first wind energy project. It has an installed capacity of

1.8 MW and is capable of avoiding the emission of 1,300

tons of CO2 equivalent per year, by replacing the en-

ergy of other more carbon-intensive sources. The plant

has already produced more than 24,500 MWh since it

started operating, which entailed avoiding emission of

approximately 6,000 tons of CO2.

The Macau Wind Energy Plant also resulted in

the first activity of the Petrobras project of the Clean

Development Mechanism (CDM), registered in the

United Nations Framework Convention on Climate

Change (UNFCCC).

The works of five SHPs are in the final stage, with

a joint capacity of 125.4 MW. By definition, the pow-

er from a small hydropower plant will not exceed 30

MW. In Brazil, there is growing participation of SHPs

in the energy market, due to regulating incentives

and other advantages, such as shorter implementa-

tion terms than larger hydropower plants, fewer en-

vironmental impacts and the possibility of generat-

ing carbon credits.

Solar energy is another renewable resource used

by the company, which has 2,180 m2 of solar panels,

to avoid the emission of 309 tons of CO2. This energy

is used for heating water used in some facilities. In

2009 it is expected that another 4,648 m2 collectors

will be installed.

Petrobras also develops several studies concerning

the use of hydrogen as a feasible energy option. One of

the means of obtaining the fuel is by renewable sources,

such as biomass. The gas can be generated from the gas-

ification of the bagasse of sugarcane, for example. This

technology is aligned with the commitment of the com-

pany to maximize its energy efficiency and develop the

use of renewable energy. ■

in 2009 an auction is planned to contract energy for power generation projects using wind energy, the first of its kind in Brazil


EFFLUENT TREATMENT AND REUSE OF WATER IN CAPUAVA REFINERY (RECAP)

case stuDy

environment

106 env ironment

one of petrobras projects is to find alternatives for

reducing consumption, reuse and recycling to valorize

the responsible use of water in its units.

Capuava Refinery (Recap), in Mauá, São Paulo State,

is the company’s first plant with zero effluent discharge.

Its water reuse station was launched in 2008 and all ef-

fluent is reused for industrial purposes by other local

companies. Thus, water collection from the source is

reduced by 880,000 m3 a year.

Another three units of the company are develop-

ing projects involving the use of advanced technology,

which will allow an annual saving of approximately 8

million m3 of water.

the processFrom the collection basin built on the banks of the

Tamanduateí River, the water is pumped to the two

reservoirs and from there to the Water Treatment

Plants (ETA).

In reservoir I, used for the refinery’s operations, the

water is treated and later sent to reservoir II, which

supplies the Petrochemical Complex of the Greater

Metropolitan Area of São Paulo. The treatment includes

use of carbon filters, aluminum sulfate, decanting and

reverse osmosis.

After going through the ETA and being used in the

refining processes, the effluent water is treated in the

Industrial Waste Treatment Plant (ETDI), from where it

was discharged back into the Tamanduateí River.

However, the start of the operations of the Wa-

ter Reuse Station (ERA) stopped such outf low into

the Tamanduateí River, since the industrial eff luent

processed in the ETDI now goes for new treatment,

which makes the water fit for industrial consump-

tion of other companies in the Capuava Petrochemi-

cal Complex.

Recap is the most modern refinery of Petrobras in

the processing of petroleum waste, to the extent that

it even further optimizes byproduct production. There

are reduced expenses on raw material and, as a result,

the environmental impacts diminish with the reuse of

water, which does not discharge toxic and pollutant

substances into the river.

The unit handles the production of Liquefied Pe-

troleum Gas (LPG), propene, gasoline, diesel oil and

solvent. ■

107social anD env ironmental report 2008

108 eixo108

transpa rEncY

108

sErvicEs

policiEs

codE of Ethicsombudsman


transpa rEncYtransparency The year 2008 was a positive year for the corporate strate-

gies that strive for transparency in the company’s relations. This year the

Petrobras Executive Board set up the Ethics Committee aiming to furthering,

guiding and compliance with the ethical principles and behavior commitments

provided by the Petrobras Code of Ethics. The company also reviewed the

concept of stakeholders, which are now called Petrobras publics of interest

and are provided with open and permanent channels for dialogue. The Inter-

national Transparency Report emphasized the company transparency bench-

mark among the national companies in the sector, considering current poli-

cies, management systems and performance in areas relating to transparency

of revenue in upstream operations.

109

EngagEmEntp u b l i c

pro

du

cts

eixo110

STRaTEgICCommunICaTIon wITh SoCIETy

in 2008, the company reviewed the concept of stakeholder that are called Petrobras Public of Interest. the company analyses research results that provide detailed information and map dialogue opportunities that offer potential for developing ongoing relations with its stakeholders. »

stakeholder relations

tr ansparency


The concern with stakeholder engagement is expressed

throughout its Strategic Plan, mentioned in the Mission

and Vision 2020, Strategic Objectives and Performance

Indicators of the Balanced Scorecard (BSC), Corporate

Policies, Values and Behaviors.

The Petrobras Integrated Communication Plan

(PIC) identifies and defines the company’s publics of

interest and those with strategic engagement. The

process consists of checking and knowing the scien-

tific basis of the demands, expectations and opinions

of each stakeholder and the degree or dependence,

participation and influence.

In 2008, the PIC review defined publics of interest

as “groups of individuals and/or organizations with com-

mon questions and/or requirements of a cultural, eco-

nomic, environmental political or social nature, or which

can form relations with Petrobras and are able to influ-

111

publics of interest form of engagement

Clients

Personalized and proactive meetings for a closer relationship and to disseminate improvement actions, raised by the clients in studies and in the Customer answering Service (SaC) where the company received complaints, criticism and suggestions. The Customer Channel site (https://www.canalcliente.com.br/ ), also sends e-mails, involves talks and professional technical support visits.

Communities

Public hearings, meetings, printed material at the start and during undertakings, visiting program, participation in trade shows, events and registering requests. There are also regular forums and community committees, sponsorships for social and environmental projects, roadshows for disseminating public selections, media communication and communication campaigns.

Consumers Talks, electronic mail, courses and exhibitions.

Suppliers / InvestorsPetrobras informs about upgrade actions and announces products and services at formal meetings, seminars and conferences, in addition to publishing Petrobras magazine, in which the operational and financial results, strategy and all news about the company are discussed, in addition to the specific site for investors.

PressReleases, collective interviews, special publications, monthly periodicals, technical visits, relationship courses, special supplements (publicity editorials devoted to Petrobras-related topics), e-mails, telephone and site www.noticiaspetrobras.com.br

Civil society organizationsmeetings in communities, preparatory meetings for mobilizing public hearings, ombudsman’s office, Call us channel (Fale Conosco), e-mails.

Public authorities Reports, meetings, public hearings, environmental surveillance and representations in states and municipalities.

Internal publicmagazine, intranet (Petronet), folders, corporate campaigns, thematic exhibitions, e-mail and a flyer in Revista Petrobras, special newsletters from each service unit or corporate agencies, coordination of meetings, rallies and periodical events, Petrobras webTV network, the hR Call us channel and ambience Survey.

SuppliersResponsible Partnership Program, which furthers the adoption of practices focusing on occupational safety, social and environmental, people’s health and quality of services and products, based on a list of requirements proposed by the Supply area. The Supplier Channel is also available on the company’s site.

Scientific community Visiting program and sponsorships for specific events.

ence – or be influenced by – activities, business and/or

reputation of the company”. The Competitors group was

also included as a new Petrobras publics of interest.

After this PIC review, Petrobras will carry out

a stakeholder mapping project and is assessing a

model to engage and guarantee ongoing relations

and dialogue involving all its stakeholders. The com-

pany already has some examples of an engagement

approach with some groups.

To improve its corporate governance practices and

disseminate its actions of social and environmental

responsibility, Petrobras enhances its management

through various communication channels. The compa-

ny holds meetings, public hearings, visit programs and

produces printed matter to be distributed when projects

are being implemented in the neighboring communi-

ties for the first time.

social and enV ironmental report 2008

eixo112

stakEholdEr rElations

One assessment tool is the Customer Satisfac-

tion Survey – a quantitative analysis, with a struc-

tured questionnaire, by phone or personal interview,

which analyzes client perception regarding relevant

topics for commercial and technical relationship,

such as negotiation, delivery, collection, credit, issue

of documentation, product, post-sales service, com-

mercial conditions, general satisfaction and compe-

tition. The survey, begun in 2008, will be announced

in the first half of 2009. After the result, corrective

and preventive actions will be taken to improve the

forms of the company’s relationship with this public.

The survey is a requirement of standard ISO 9000.

Corporate governance guidelines are one of the

Petrobras communication policies that cover trans-

parency principles with fast ongoing communication

about the activities, products and services. To under-

take opinion and market surveys, Petrobras selects

suppliers that are members of the Brazilian Research

Marketing Association (Abep) and European Society

of Opinion Marketing Research (Esomar), institu-

tions that stipulate and require compliance with the

essential criteria for undertaking surveys and that

attest the good quality of the work done.

Petrobras respects and complies with the regula-

tions of the Brazilian National Advertising Self-Regu-

lation Council (Conar). As a member of the Brazilian

Advertisers’ Association (ABA), it joined the Standard

Regulations Executive Board (Cenp), whose objective

is to provide ethical principles in commercial relation-

ships, to prevent abusive, deceitful, offensive advertis-

ing or that which disrespects the right to competition.

the mocoronga network of social communication is a project of support to community development in santarém, in pará

tr ansparency

113

the company performs the Organizational Ambience Survey to know the expectations and opinions of the employees. the analysis is a key support management tool, since it provides the administration with informationabout strengths and possibilities or needs to improveworking conditions and relations

The company holds teleconferencing, roadshows,

chats and service by internet. The Investor Relations

site (IR) (www.petrobras.com.br/ri) is a direct channel

for shareholders, investors and analysts to be able to

send suggestions and settle doubts. Contact can also

be made by letter, facsimile, e-mail and phone center.

The press accesses information through press releas-

es, visit programs and collective interviews in the site

www.noticiaspetrobras.com.br

In addition to this service, the company offers

the Petrobras Client Channel, an online electronic

business platform by which the clients perform busi-

ness and follow it up with the company.

The company performs the Organizational Ambi-

ence Survey to know the expectations and opinions of

the employees with regard to activities, policies and

practices, style of leadership, and other factors of in-

terest. The analysis is a key support management tool,

since it provides the administration with information

about strengths and possibilities or needs to improve

working conditions and relations. By applying the sur-

vey, a broader process was developed – Organizational

Ambience Management – designed to assure a good

working environment in the company.

The results are widely disclosed to the employees

who have access to Petrobras data in their own unit

and their management. After analyzing the results,

Improvement Action Plans are set up in each unit,

with employee participation.

Petrobras seeks to monitor and answer all stake-

holder requirements. The topics and concerns raised

are assessed, and there is an attempt to reach the

best solution to clarify the inquiries and possible cri-

ses, offering fast and complete information. Depend-

ing on the relevance, the demands are taken to the

company’s top administration for assessment and

answer. Normally, the return is by releases, collec-

tive interviews, presentations and printed material.

During 2008, the IR area received inquiries from

analysts about the development of the fields, costs,

economic feasibility, new regulatory benchmark in

the pre-salt area, plus questions on the price policy

adopted by Petrobras and achieving the production

targets in Brazil.

The main topics raised by clients refer to prices,

negotiations and credit. They are always addressed

in accordance with corporate and commercial guid-

ance from the company’s Executive Board. The En-

gineering area received 1,256 contacts through the

Call Us system. These included 855 suggestions, 57

complaints, 14 congratulations, 326 doubts/inqui-

ries and 4 acknowledgments.


114

Petrobras Ombudsman’s Office acts as a channel for

receiving opinions, suggestions, criticism, complaints

and denunciations from the company stakeholders.

Based on denunciations forwarded to the Ombuds-

man’s Office, areas specializing in investigation, such as

the Internal Audit and Business Security, undertake au-

dits and investigations, respectively. The result of such

work is forwarded to those in charge of the units that,

depending on the seriousness of the outcome, stipulate

specific sanctions and measures.

The Ombudsman’s Office is not just a chat chan-

nel between citizens, workforce and the company’s top

management but also an instrument of incentive to

give value to human rights and the UN Global Compact

principles. Contact can be made by phone, facsimile,

letter, e-mail or in person.

The complaints received by the Ombudsman’s Of-

fice are handled and put together in monthly reports

for the Administrative board and quarterly reports for

directors and executive managers of corporate areas.

In addition to these actions, the Ombudsman issues oc-

casional messages to the company’s CEO to discuss rel-

evant management matters that require his immediate

status of reQuirements

Concluded 19,061

Pending 1,709

total 20,769

means of contact

Electronic media (e-mail & site of ombudsman’s office 20,223

Letter 148

In person 181

Telephone 174

Facsimile 43

total 20,769

turnoVer of demands

2006 15,652

2007 23,662

2008 20,769

knowledge. The Ombudsman’s Office was highlighted

in the Global Accountability Report 2007 – a report by

the One World Trust NGO, as a best practice of social

responsibility.

monitoring the corporate imagePetrobras uses the Corporate Image Monitoring

System (Sismico) to verify the viewpoints of the

different stakeholders with regard to its role. The system

detects points of improvement, especially in relation to the

perception of its image and permits structured knowledge

of how Petrobras is regarded by each group with which it

relates. Sismico checks topics such as management, com-

petitiveness, ethics, social and environmental responsibil-

ity, international operations and future vision.

As a reputation indicator the company uses the

RepTrak® methodology, a system designed by Reputa-

tion Institute, which compares the reputation quotient

of companies in their countries of origin. In the 2008

study, Petrobras was ranked 20th among the 200 best

corporate reputations in the world. Petrobras also con-

tinued in first place with the best reputation in Brazil

for recognition of its actions of social responsibility. ■

stakEholdEr rElations

tr ansparency

ombudsman’s office

115

PRoCEduRES and TRaInIng To mInImIzE RISkS

petrobras adopts procedures to minimize the impacts on health and safety, seeking to improve its activities. the company assesses the life cycle of its products and services in their main stages: receipt, storage, loading, distribution, transportation and trading. »

products and serVices


116

tanker with fuel for aircraft, in montevideo, in uruguay

Petrobras Distribuidora, for example, prepares Safety

Information Cards on Chemicals (FISPQ), with data

on the products, such as manufacture, promotion, as

well as analysis of aspects that may cause damage to

the environment and people’s health. The 272 chemi-

cals and fuels traded by the company have information

about content, identifying hazards, first aid measures,

fire fighting, spills, handling, storage, toxicological in-

formation, and so on. The products are regulated by the

National Fire Protection Association and CEE – Man-

datory Labeling for Hazardous Substances.

In the case of the useful life of lube oils, in

2008 Petrobras Distribuidora collected more than

75,578 m³ used lube oil, corresponding to 34.48% of the

sales volume of lube oils. This collected oil was recycled

by re-refining in specialized companies and later used

to formulate some of its lubes.

In Liquigás, the bottling operations of Liquefied

Petroleum Gás (LPG) are systematically controlled to

assure safety of the bottles and consequently consum-

ers, mainly in relation to leakage. The thermal retract-

able seals substituted the plastic seals to improve the

guarantee of the bottles in relation to adulteration of

the product.

The company adopts the procedures on all its labels

required by the regulatory agency of National Petro-

leum, Natural Gas and Biofuels Agency (ANP), provid-

ing information about origin, application field, purpose,

benefits, warnings, precautions, degree of viscosity,

performance level, name and registration number in

products and sErvicEs

tr ansparency

117

In 2008 Petrobras distribuidora collected more than 75,578 m³ used lube oil, corresponding to 34.48% of the sales volume

the class agency of the chemist in charge, trade name,

as registered in ANP, registration number, packed net

quantity, instructions on destination of product and

packaging after use and expiry date.

The data are exposed so as not to induce the con-

sumer to mistakenly understand about the origin and

characteristics disclosed.

Petrobras did not register cases of non-conformity

with voluntary regulations and codes relating to infor-

mation and labeling or impacts caused by products and

services on health and safety during their life cycle.

There were no complaints about violation of privacy

and loss of client data. Nor was there any record of sig-

nificant fines for failure to comply with the rules and

regulations of supply and use of products and services.

The contractual and regulatory fines of the Petrobras

System in 2008 totaled R$ 434 million. In the States of

São Paulo and Paraná, eight public civil actions refer-

ring to unfair competition, trust practices or monopoly

against Petrobras Distribuidora and other local distrib-

utors. Decisions are still to be made for those action.

There were no lawsuits on the subject in

Petrobras Holding. However, the company was

charged fines relating to untimely tax debits.

Eight payments were made with values of over

R$ 1 million, totaling around R$ 67.7 million. Some of

them are delinquent fines referring to tax collection

on Circulation of Goods and Services (VAT) to some

Brazilian States, in addition to fines on tax contribu-

tions to the central government, such as the Social

Integration Program (PIS) and Social Security Financ-

ing Contribution (Cofins).

One proceeding has a pending legal decision on

suspension of the collection of the differences in gov-

ernment contribution (special participation) referring

to oil production, specifically in Marlin Field in the

Campos Basin. In 2007, ANP, responsible for the calcu-

lation methodology when calculating the special par-

ticipation, altered the collection values, annulling its

earlier resolution, and made another collection from

Petrobras with retroactive effect. The claimed value

exceeds R$ 3 billion.

Petrobras had two advertising campaigns sus-

pended by the National Council of Advertising

Self-Regulation (CONAR). The action referred to com-

mercials that would induce the consumer to exag-

geration or deceit. Both campaigns were interrupted

in April on the allegation that the commercials dis-

seminated a false idea that the company contributed

to the environmental issue in Brazil. Conar queried

the truth of the advertisement, which emphasized

the social responsibility of Petrobras in its business

practices. The objective was to counteract the con-

troversy of the sulfur content in diesel, as a result of

a movement started by a group of government and

non-government organizations.

As soon as Petrobras was informed by the agency,

it appealed against the decision since it is a company

that invests and reaffirms at all times its commitment

to a socially and environmentally responsible role.

The company is renowned by the market and general

public as a socially responsible company, and filed a

request for suspension and is awaiting the result of the

appeal, still in progress.


118

products and sErvicEs

sulfur in dieselThe National Environmental Council (Conama) in 1986

set up the Air Pollution Program for Automobile Vehicles

(Proconve), which became a successful program with

participations of Petrobras and the automotive industry,

which since its beginning have been working to its imple-

mentation. As an example of projects developed within

Proconve by Petrobras, it is worth mentioning the invest-

ments made to reduce sulfur content, remove lead from

gasoline and the construction of vehicle emission labora-

tories in the Petrobras Research Center to test its fuels.

Conama periodically sets limits of vehicle emis-

sions through resolutions that must be fulfilled. These

pollutants are the result of incomplete burning of fuels,

whether diesel, gasoline, ethanol, biodiesel or natural

gas. They include carbon monoxide, nitrogen oxides,

hydrocarbons, aldehydes and particulate.

Petrobras acknowledges the importance of Proconve

in improving the quality of the air and in directing the

technological development of vehicles engines and fuels.

In 1999, and together with representatives of the automo-

tive industry, asked Ibama to establish new limits, since

the last standardization was in 1993. So in 2002, the

Conama Resolution 315 was established, which defined a

new schedule of emission limits to be adopted by 2009.

In the case of diesel, the limit of P-6 emissions was

established, equivalent to the European Euro IV, for

January 2009. On that occasion, it was known that in

Europe these vehicles should use diesel with 50 par-

ticles per million (ppm) of sulfur. However, Petrobras

could not use the European diesel as a model, since the

fuel used in this region has its own characteristics, as

a result of climate, logistic, technological factors and

others. It was necessary to regulate the specification

of the Brazilian diesel S-50, which was only done in

October 2007, by the resolution of the National Agency

of Oil, Natural Gas and Biofuels (ANP).

In this period, Petrobras did not stay at a standstill. It

bet on a scenario of quality and began investing in tech-

nology even before the ANP regulation. By 2013, Petrobras

will have invested U$ 6 billion in hydrotreatment units, a

technology required for the refineries to produce the S-50

and S-10 diesel. They will soon be in production.

In 2008 Petrobras announced publicly and in court

that it would supply the diesel specified by ANP in Janu-

ary 2009 to the new P-6 diesel vehicles. This same year,

the National Automobile Manufacturers’ Association

(Anfavea) informed the Ministry of the Environment

that it would be too short a time to produce the vehicles

with P-6 technology by the date set.

Parallel to this, a preventive action was filed in the

State of São Paulo against Petrobras/ANP and vehicle as-

sembly lines for the presumed failure to comply with the

aforementioned resolution. In the second half of 2008,

the Attorney General of the public prosecution service

made four requests for an injunction so that Petrobras

would supply S-50 diesel to all vehicles. But in the injunc-

tion the judge defined that Petrobras should supply the

diesel only to the new vehicles with P-6 technology.

Petrobras had publicly expressed that it would comply

with the decision. However, new engines were required to

fulfill the resolution. Considering that resolution 315 would

not be fulfilled, the Ministry of the Environment headed a

series of meetings to propose alternative measures to miti-

gate the damage to the quality of the air. As the outcome of

these meetings, it was decided to postpone to 2012 a new

stage of emissions, P-7 equivalent to European Euro 5. It

was also decided that, since the subject of the Resolution

tr ansparency

119

315 was in court, the proposals studied in the Ministry of

the Environment should be part of an agreement in the

Federal Department of Justice.

So, even without unfulfilling the aforementioned

Resolution, given the injunction granted by the judge,

Petrobras participated in the agreement in the Depart-

ment of Justice, in which participated all institutions

involued in the matter. A technical group was created

in which representatives of Anfavea, Companhia de

Tecnologia de Saneamento Ambiental (Cetesb), linked

to the Secretariat of the Environment of the São Paulo

government, Ibama, MMA, ANP, Environmental Insti-

tute and some independent consultants to calculate the

environmental impacts from the non compliance with

the Resolution in January 2009 and the environmental

benefits of the proposed measures. In the final balance,

a benefit will be obtained in the nitrogen oxide emis-

sions of more than eight million tons.

Petrobras agreed to the following decisions:

January 2009 — Substitution of all diesel S-500 ›for S-50 in the urban bus fleets in the cities of São

Paulo and Rio de Janeiro.

May 2009 — Substituting all diesel S-500 for S-50 ›in the metropolitan regions of Fortaleza (Ceará),

Recife (Pernambuco) and Belém (Pará).

August 2009 — Substituting all diesel S-500 ›for S-50 in urban bus fleets in the city of Curitiba (PR).

January 2010 — Substituting all diesel S-500 for ›S-50 in urban bus fleets in the cities of Porto Alegre

(Rio Grande do Sul), Belo Horizonte (Minas Gerais)

and Salvador (Bahia).

January 2010 — Substituting all diesel S-500 ›for S-50 in the captive bus fleets S-500 in the

Metropolitan Region of São Paulo.

January 2011 — Substituting all diesel S-500 for ›S-50 in the bus fleets in the metropolitan regions of

Baixada Santista, Campinas, São José dos Campos

and Rio de Janeiro.

January 2013 — Providing a new commercial diesel ›fuel, with 10 ppm sulfur, from January 2013, for

new vehicles.

Undertaking Conpet activities for São Paulo and Rio ›de Janeiro (from January 2009), Curitiba and Porto

Alegre (from January 2010) and Belo Horizonte,

Salvador and Vitória (from January 2011).

Investment of R$ 1 million for the Cetesb inspection ›program for black smoke emission in São Paulo.

The supply of diesel with lower sulfur content for cap-

tive urban bus fleets in the cities of São Paulo and Rio

de Janeiro was decided to begin on January 1, 2009. In

the other regions of the country, the diesel S-50 will be

supplied according to that schedule. This involves an

investment by 2013 of R$ 8.5 billion in 13 hydrotreat-

ment units (HDTs). ■

by 2013, petrobras will have invested U$ 6 billion in hydrotreatment units, a technology required for the refineries to produce the s-50 and s-10 diesel


120

PuBLIC CommITmEnT To EThICaL PRInCIPLES

The Petrobras Code of Ethics is an important tool that defines the principles and guides the company’s actions and commitments of conduct. the code explains the ethical meaning of the Petrobras Mission, Vision and Strategic Plan and consists of a public commitment to consolidate these principles in concrete everyday practices. »

principle 10Businesses should work against

corruption in all its forms, including extortion and bribery

anti-bribery and anti-corruption policies

tr ansparency

121

The company revised the Code in 2005 to adapt it to

the requirements of the Sarbanes-Oxley Act, which

provides the approach of specific items for compa-

nies in the New York Stock Exchange. During its

update, seminars were held to build the new Code

in various units and subsidiaries, involving clients,

suppliers, executive board, board of directors and

the entire workforce in a transparent and participa-

tive process.

The document includes the members of the boards

of directors, fiscal councils, executive boards, manag-

ers, employees, interns and services providers in the

Petrobras System. The Code is available for download

on the Petrobras worldwide web site.

petrobras committee of ethicsIn 2008, the Executive Board formed the Committee

of Ethics in order to foster, guide and fulfill the ethi-

cal principles and commitments of conduct set in the

Petrobras Code of Ethics. The Committee is linked

to the Petrobras CEO’s Office and has an executive

secretariat that helps compliance with the working

plan and provides material and technical support for

doing its duties.

With meetings held every two months, and extraor-

dinary meetings being called to address specific or

emergency matters, the Committee of Ethics handles

all minutes of meetings in accordance with the infor-

mation secrecy regulations adopted by the company.

All acts, proposals and/or recommendations to

adopt disciplinary measures are as stated in Petrobras

corporate regulations. The Committee consists of seven

members, all company employees, and its duties are:

to guide, disseminate and encourage compliance ›with the ethical principles and commitments

of conduct established by the Code of Ethics,

accompanying its implementation, development

and monitoring in the company;

to guide the Committees of Ethics of the ›subsidiaries in the Petrobras System;

to propose updates of the Code of Ethics by ›including new concepts and new practices,

guaranteeing alignment to the Code of

Professional Ethics of the Federal Executive

Civil Servant;

to propose the creation or update of the company ›regulations with focus on improving the ethics

management;

to investigate, by denunciation or official order, ›any conduct failing to adopt the relevant ethical

standards in situations that go beyond the

jurisdiction of the executive managers or that

present a risk for the company image or business

and issue recommendations.

transparency and corporate integrityPetrobras investigates denunciations forwarded by

the Ombudsman’s Office, CAS, external control enti-

ties – the Federal Audit Court and Federal General

Controllership – and by the Department of Justice.

The Business Protection management investigates the


122

involvement of employees in any deviation of conduct,

preventing the occurrence of acts of corruption. When

situations that require special attention arise, audits in

the units are proposed. At the same time, the Informa-

tion Security area takes actions relating to the preser-

vation and enhancement of internal controls, which

contributes to preventing undue practices.

Petrobras employee training is based on anti-cor-

ruption policies and procedures. All the company’s busi-

ness units undergo actions to assess corruption-related

risks. During the year, talks were given to new manag-

ers, supervisors and new employees, to reinforce the

topics and curb any practices harmful to Petrobras.

The company also carries out corporate campaigns

to disseminate the principles expressed in its Code of

Ethics, countering nepotism and refusing actions of fa-

voring or receiving undue benefits.

Petrobras follows the guidelines of its Code and does

not contribute to political parties or campaigns of can-

didates to elective positions. Conducting company busi-

ness requires transparency in the actions and positions

adopted, especially with regard to information passed

on to society. Petrobras rejects any practice of corrup-

tion and bribery, and uses management tools such as the

codes of Competitive Conduct and Best Practices, as well

as the Federal Senior Administration Code of Conduct,

whose application is controlled by the Committee of

Public Ethics of the President of the Republic’s Office.

Petrobras is signatory of the Partnering against

Corruption Initiative (Paci), with the objective of

harmonizing the handling of corruption-related

problems. To do this, there is a zero-tolerance policy

against bribery and corruption.

The company is also committed to Extractive

Industries Transparency Initiative (Eiti), a voluntary

initiative that supports the efforts of countries rich

in natural resources for better governance with the

complete publication and verification of payment of

companies and income of governments from the oil,

gas and mining sectors.

Petrobras contributes by preparing and adopting

general public policies and programs and specific

projects focusing on sustainable development.

In addition, it valorizes the involvement of its em-

ployees in discussions for drafting proposals, which

encourages social projects, in actions combined with

public and private, governmental and non-govern-

mental organizations.

during the year, talks were given to new managers, supervisors and new employees, to reinforce the topics and curb any practices harmful to petrobras

anti-bribErY and anti-corruption policiEs

tr ansparency

123

The Petrobras Business Committee approved the

process of relating to the Legislative Power and the

creation of the Permanent Advisory Group (GPA) for

coordinating the defense of the company’s interests in

this sphere. In 2008, priority was given to 168 propos-

als comprising the Petrobras Legislative Agenda, 97 of

which being processed (57.7% of the Agenda).

The idea of the relationship of Petrobras with federal

authorities is to provide experience and skills for enhanc-

ing Brazilian policies in the company’s areas of influence.

During the year, Petrobras participated in Conama com-

mittees and technical chambers and helped coordinate

the IND P&G-8 Project – Enhancing Environmental Li-

censing of Prominp – for activities in the oil and natural

gas sector, and which seeks to effectively contribute to

developing the oil industry in Brazil.

BEnChmaRk In TRanSPaREnCypetrobras was considered to be one of the oil and gas corporations with a high level of transparency in its upstream earnings. the report by transparency international, a global civil society organization which mandate is to fight against corruption, highlighted the company as a benchmark of transpar-ency among national oil companies (nocs) in the sector, considering current policies, management systems and performance in areas relating to transparency of income in the exploration and produc-tion operations.

principle 10

Businesses should w

ork against corruption in all its forms, including extortion and bribery

At public hearings, Petrobras was represented in

Congress to gather information about the actions un-

derway in the Executive sphere. The company accom-

panied processes such as major setbacks for accepting

the rights of those who received amnesty, explanations

about the leak of information on the discovery in Santos

Basin, discussions on postponing the implementation

of the Vehicle Emission Control Program (Proconve)

and discussions on the Discovery and development of

new oil basins in the pre-salt layer.

Petrobras has strict internal and external controls and

seeks to reach efficient solutions for all conduct deviations,

punishing those involved in conformity with the law and

corporate regulations. Cases registered in 2008 did not

configured a crime; their authors were sanctioned and the

processes were enhanced to restrict other occurrences. ■


PETRoBRaS PuBLICS oF InTEREST: dEFInITIon and RaTIng

case study

transparency

124 tr ansparency

in the petrobras Vision, provided in its 2020 Stra-

tegic Plan, the company challenge is to be “one of the

five largest integrated energy companies in the world

and the preferred choice among our stakeholders”.

This goal reaffirms the importance of interactions to

be established by the company with its stakeholders.

Therefore, it is essential to clearly define the general

concept and categories that comprise the Petrobras

stakeholders. In this way it is possible to identify, on a

structured and systematic basis, their requirements,

expectations and opinions, as well as learning the

degree of influence, participation and dependence of

each stakeholder (to assure ongoing full relationship

and dialogue).

The result was supported by methodology based

both on theories about stakeholders and on wide-

spread inquiries in the business, corporate, financial

and service areas and subsidiaries of Petrobras. Eight

workshops were held, attended by representatives

from more than 20 areas of the Petrobras System. At

the meetings, all participants contributed with their

experiences and discussed the definition and rating

of Petrobras stakeholders, raised by the Integrated

Communication Plan (PIC) 2008-2012.

On these occasions, a risk matrix was prepared that

enabled each area to do a preliminary assessment of the

potential risks for Petrobras and/or for its stakeholders

from interactions between both parties. In this way,

Petrobras can identify the stakeholder categories with

which it relates, map their main segments, in order to

guide the company efforts in questions or requirements

of each stakeholder, permit structured learning and as-

sessment of the results of such relations.

defining petrobras publics of interestStakeholders are groups of individuals or organiza-

tions with common cultural, economic, environmen-

tal, political or social requirements that establish

or may establish relations with Petrobras. They are,

moreover, able to influence – or be influenced by – the

company’s activities, business and reputation.

Even more so, individuals and organizations may

belong to more than one public of interest, since a

single representative can have multiple questions and

varying needs. The understanding is also reinforced

that stakeholders network and can dialogue and be

influenced by each other. From this new viewpoint,

the organization no longer has centrality in relations

with its stakeholders and is formed by a set of connec-

tions between individuals that network and share the

same issues or requirements.

categories of petrobras publics of interest

Clients ›Scientific and academic community ›Communities ›Competitors ›Consumers ›Suppliers/investors ›The press ›Civil society organizations ›Partners ›Public authorities ›Internal public ›Resellers ■ ›

125social and enV ironmental report 2008

Annexes

Anne xes126

IndIcAtor 2008 2007 2006 2005

FinAnciAl

Market Value (R$ million) 223,991 429,923 230,372 173,584

Net Operating Revenue (R$ million) 215,119 170,578 158,239 136,605

Net Profit (R$ million) 32,988 21,512 25,919 23,725

Profit before interest, taxes, depreciation and amortization - EBITDA (R$ million) 57,170 50,156 50,864 46,802

Distributed total added value (R$ million) 141,483 127,634 120,695 108,241

Total Investments (R$ million) 53,349 45,285 33,686 25,710

Profit per Share (R$) 3.76 2.45 2.95 2.70

OperAtiOns

Oil & Gas production (thousand boed) 2,400 2,301 2,298 2,217

Proven reserves of oil and gas / SPE criterion (billion boe) 15.1 15 15 14.9

Reserve Replacement Index 109% 98.4% 113.9% 102.3%

Byproduct production (thousand bpd) 1,966 2,046 1,892 1,839

Byproduct Sales (thousand bpd) 3,374 3,239 3,052 2,808

envirOnment

Byproduct and oil spills (m3) 436 386 293 269

Energy consumption (terajoule - TJ) 604,333 574,145 576,762 521,613

Greenhouse gas emissions (million tons of CO2 equivalent) 58.15 49.88 50.43 51.57

Carbon dioxide emissions - CO2 (million tons) 53.8 45.37 46.13 46.59

Methane emissions - CH4 (thousand tons) 189.43 206.02 189.82 222.97

Nitrous oxide emissions - N2O (tons) 1,216 919.5 997.23 981

Atmospheric emissions - NOx (thousand tons) 245.16 222.65 233.54 223.12

Atmospheric emissions - SOx (thousand tons) 141.79 150.9 151.96 151.65

Atmospheric emissions – particulate material (thousand tons) 16.72 15.22 17.11 17.24

Removal of Freshwater (million m3) 195.18 216.49 178.8 158.5

Water effluent disposal (million m3) 181.14 172.8 164.3 159

l AbOr HeAltH And sAFety

Frequency Rate of Casualties with Leave - TFCA (includes employees and outsourcees) 0.59 0.76 0.77 0.97

Fatalities (includes employees and outsourcees) 18 15 9 15

Rate of Fatal Casualties (fatalities per 100 million man-hours of risk exposure - includes employees and outsourcees)

2.4 2.28 1.61 2.81

Percentage of Time Lost (only includes employees) 2.31 2.19 2.06 2.48

emplOyees*

Number of employees 74,240 68,931 62,266 53,904

Number of outsourcees 260,474 211,566 176,810 156,034

sOciAl cOntributiOns

Investments in social projects (R$ million) 225.1 248.6 199.6 183.3

Investments in cultural projects (R$ million) 206.8 205.5 288.6 264.6

Investments in environmental projects (R$ million) 53.8 51.7 44.6 44.2

Investments in sports projects (R$ million) 69 80 58.2 25.8

* 2005 employee data revised and corrected.

perFOrmAnce tAble

127socIAL And enV IronMentAL rePort 2008

eIxo128

1 - cAlcul AtiOn bAsis 2008 (R$ THOUSAND) 2007 (R$ THOUSAND)

Net revenue (RL) 215,118,536 170,577,725

Operating income (RO) 48,204,799 35,977,804

Gross payroll (FPB) 9,500,291 7,919,274

2 - internAl sOciAl indicAtOrsAmOUNT

(tHOusAnd)% ON

FPB% ON RL

AmOUNT (tHOusAnd)

% ON FPB

% ON RL

Food 578,966 6.09% 0.27% 547,790 6.92% 0.32%

Compulsory social charges 4,633,742 48.77% 2.15% 3,355,374 42.37% 1.97%

Private Pension Scheme 412,641 4.34% 0.19% 554,845 7.01% 0.33%

Health 2,009,498 21.15% 0.93% 2,138,366 27.00% 1.25%

Occupational safety and health 110,736 1.17% 0.05% 95,031 1.20% 0.06%

Education 106,440 1.12% 0.05% 95,284 1.20% 0.06%

Culture 14,982 0.16% 0.01% 22,794 0.29% 0.01%

Capacity building and professional development 426,832 4.49% 0.20% 386,452 4.88% 0.23%

Day nurseries or nursery benefit 2,825 0.03% 0.00% 2,319 0.03% 0.00%

Profit or income sharing 1,344,526 14.15% 0.63% 1,011,914 12.78% 0.59%

Others 152,581 1.61% 0.07% 66,335 0.84% 0.04%

Total – Internal social indicators 9,793,769 103.09% 4.55% 8,276,504 104.51% 4.85%

3 - e xternAl sOciAl indicAtOrsAmOUNT

(tHOusAnd)% ON RO % ON RL

AmOUNT (tHOusAnd)

% ON RO % ON RL

Generation of Income and Job Opportunity 35,752 0.07% 0.02% 58,838 0.16% 0.03%

Professional Training 72,693 0.15% 0.03% 64,878 0.18% 0.04%

Guarantee of Rights of Children and Adolescents (I) 90,159 0.19% 0.04% 110,615 0.31% 0.06%

Culture 206,751 0.43% 0.10% 205,518 0.57% 0.12%

Sports 68,952 0.14% 0.03% 79,989 0.22% 0.05%

Others 26,473 0.05% 0.01% 14,275 0.04% 0.01%

Total contributions to society 500,780 1.04% 0.23% 534,113 1.48% 0.31%

Taxation (excluding social charges) 80,140,559 166.25% 37.25% 73,441,877 204.13% 43.05%

Total – External social indicators 80,641,339 167.29% 37.49% 73,975,990 205.62% 43.37%

4 - envirOnmentAl indicAtOrsAmOUNT

(tHOusAnd)% ON RO % ON RL

AmOUNT (tHOusAnd)

% ON RO % ON RL

Investments relating to company production/operation 1,919,751 3.98% 0.89% 1,924,698 5.35% 1.13%

Investments in external projects and/or programs 53,763 0.11% 0.02% 51,728 0.14% 0.03%

Total of investments in environment 1,973,514 4.09% 0.92% 1,976,426 5.49% 1.16%

Concerning “annual goals” to minimize waste, general consumption in production/operation and increasing efficiency in using natural resources, the company

( ) does not have goals( ) complies 0 - 50%( ) complies 51 - 75% (X) complies 76 - 100%

( ) does not have goals( ) complies 0 - 50%( ) complies 51 - 75% (X) complies 76 - 100%

5 - persOnnel indicAtOrs 2008 2007

No. employees at end of period 74,240 68,931

No. contracted during the period (II) 6,351 4,263

No. outsourcee interns 260,474 211,566

No. interns (III) 1,213 1,213

No. employees over 45 years old (II) 28,447 26,073

No. female employees 11,511 10,722

% management posts occupied by women (III) 13.1% 13.5%

% African descent employees (IV) 10,581 3,004

% management posts occupied by Afro-descendants (IV) 29.9% 3.1%

No. of employees with disability or special needs (V) 1,068 1,026

sOciAl bAlAnce 2008 Ibase model

Anne xes

reL Atór Io AnuAL 2008 129

6 - relevAnt inFOrmAtiOn As cOrpOrAte citizen

2008 GOALS 2009

Ratio between highest and lowest remuneration in company 31.59 31.59

Total number of occupational accidents 444 437

The company’s environmental and social projects developed by the company were defined by:

( ) directors(X) directors & managers( ) all employees

( ) directors(X) directors & managers( ) all employees

The safety and health standards in the work environment were defined by:

(X) directors & managers( ) all employees ( ) all + Cipa

(X) directors & managers( ) all employees ( ) all + Cipa

As regards union freedom, the company workers’ right to collective bargaining and internal representation

( ) does not get involved( ) adopts ILO regulations (X)encourages and complies with ILO

( ) does not get involved( ) adopts ILO regulations (X)encourages and complies with ILO

The Private Pension Scheme considers:( ) directors( ) directors & managers(X) all employees

( ) directors( ) directors & managers(X) all employees

Profit sharing covers:( ) directors( ) directors & managers(X) all employees

( ) directors( ) directors & managers(X) all employees

In selecting suppliers, the same ethical, social responsibility and environmental standards adopted by the company:

( ) are not considered( ) are suggested(X) are required

( ) will not be considered( ) will be suggested(X) will be required

As regards the participation of employees in voluntary work programs, the company:

( ) does not get involved( ) supports(X) organizes and encourages

( ) will not get involved( ) will support(X) will organize and encourage

Total number of consumer claims and criticism: (VI)in company 9,578in Procon 1in Court 29

in company 4,000 in Procon 1in Court 29

% of claims and criticism addressed or settled: (VI)in company 97.6%in Procon 100%in Court 51.72%

in company 99%in Procon 100%in Court 51.72%

Total value added for distribution (in thousand R$): In 2008: 141,483,416 In 2007: 127,633,602

Added Value Distribution (DVA):

60% government10% collaborators4% shareholders8% third parties18% withheld

58% government11% collaborators6% shareholders13% third parties12% withheld

7 - OtHer inFOrmAtiOn

1) Corporate taxpayer CNPJ no.: 33000167/0001-01 – Economic sector: Industry / Oil, Gas and Energy – State of company headquarters: Rio de Janeiro2) For clarification about the information declared: Wilson Santa Rosa – Executive Manager of Institutional Communication - Telephone (+55 21) 3224-1009 - Email [email protected]) This company does not use child labor or slave labor, has not been involved in child or adolescent prostitution or sexual exploitation and is not involved with corruption.4) Diversity is valorized and respected in and outside this company.5) The Petrobras Youth Apprentice Program had investments of R$ 20 million in 2008.

I. It includes R$ 48.5 million allocated to the Child and Adolescence Fund (FIA).II. Information of the Petrobras System in Brazil.III. 2007 information is related to Petrobras in Brazil. Amount of 2008 includes the entire Petrobras System.IV. 2008 information related to Petrobras Holding based on Petrobras Diversity Census performed August-October.V. Of the total of 74,240 employees of the Petrobras System, 6,775 belong to the International Area not subject to Brazilian legislation. Of the remainder, 17,924 hold posts where job vacancies are reserved for the disabled. Of these employees, 1,068 are disabled people, which corresponds to 5.95% of the workforce in that condition.VI. The information in the company includes claims and criticism received by the SAC of Petrobras Holding and Petrobras Distribuidora. The 2009 goals in the company only refer to the estimate of Petrobras Holding.

socIAL And enV IronMentAL rePort 2008

As provided in the GrI Sustainability Report Guide-

lines and aiming that the Social and Environmental

Report fulfills the expectations of its stakeholders even

further, Petrobras performed the Materiality Test for

the second year. This is an inquiry to stakeholders to

learn their opinion regarding the relevance of various

sustainability-related topics. The participants were in-

vited to answer a questionnaire on subjects to be rated

according to their degree of importance.

The topics were selected according to some content

criteria ranging from impacts and opportunities rela-

ting to Petrobras and the energy sector, often mentioned

in the media, to the company’s strategic commitments.

As in the last test, the participants could suggest items

not included in the questionnaire.

In all, 103 people were consulted as representatives

of the following segments:

clients and resellers; ›scientific and academic communities; ›communities; ›end consumers (who fill up their vehicle at ›service stations);

suppliers; ›the press; ›investors; ›partners (institutions and associations to which ›the company belongs);

public authorities; ›internal public; ›third sector. ›

The participants selected assured the diversity

of the group. Representatives of different sizes of

companies in each area were invited. Therefore, the

company considered feasible to collect more accura-

te information.

Three workshops were held: one with members

of the Committee for preparing and assessing Social

Responsibility Reports (representing the areas in the

Petrobras System) and two with guests in Rio de Ja-

neiro and São Paulo, as well as telephone inquiries.

These were all run by BSD Consultoria, accompanied

by Petrobras representatives.

This process helped visualize the topics both

from the company’s and stakeholders’ viewpoint and

the consolidation of the Materiality Matrix. The to-

pics were organized in quadrants according to the

degree of relevance obtained, as can be seen in the

chart at the side.

Petrobras thanks everyone who gave their opinion

about the content of the Social and Environmental Re-

port 2008 and collaborated in creating a more partici-

pative constructive process. ■

130

mAteriAlity test

Anne xes

materiality matrix

Specific Subjects

01 Use of water

02 Transparency

03 Consumption of natural resources

04 Prevention initiatives

05 Projects to prevent environmental impacts

06 Impacts on the surrounding community

07 Use of renewable energies

08 Management of socioenvironmental impacts by works on the local community by

09 Power generation and consumption

10 Emissions, effluents and waste

11 Research & development

12 Pre-salt

13 Child labor

14 Preservation and restoration of ecosystems and biodiversity

15 Occupational hazard

16 Biofuels

17 Degrading/forced labor

18 Furthering equality and non-discrimination

19 Quality of fuels

20 Accident rate

21 Environmental protection of the vicinity

22 Codes of Conduct (Ethics, Best Practices and Competition)

23 Bribery and corruption

24 Dialogue with stakeholders

25 Profitability

26 Participation in Sustainabilty Indexes

27 Commitment to public policies

28 Climate change

29 Management structure of governance

30 Incentive to Social Responsibility practices with suppliers

31 Community dialogue

32 Socioenvironmental impacts caused by contractors

33 Socioenvironmental criteria for supplier selection

34 Impacts and protection for indigenous and riverside populations

35 Social investment

36 Energy Sufficiency

37 National and international initiatives and principles

38 Management of new product impacts

39 Material recycling

40 Training and development

41 Environmental education

42 Impact/influence of government on decision-making

43 Processes and compliance with products

44 Outsourcees working conditions

45 Diversity policies

46 Impact/influence of the company on governmental issues

47 Remuneration and benefits

48 Supplier eligibility programs

49 Procurement from local suppliers

50 Petrochemicals

51 Contractual compliance

52 Competitiveness

53 Cultural investment

54 Management of indirect economic impacts

55 Price variation

56 Client information security

57 Tax collection

58 Fines

59 Trade union freedom of association

60 Sports investment

61 Outsourcees benefits

62 Food security

63 Third party training and development

material Topicssquare IV and above the cutting line: all topics allocated here are addressed in the Social and Environmental Report 2008 (hard and soft copies).

Below the cutting line: the topics are fully addressed only in the soft copy of the Social and Environmental Re-port 2008, available on the Annual Report 2008 page (www.petrobras.com.br).

Level of importance for Company

Leve

l of

impo

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ce f

or s

take

hold

ers

010203

04

0609

10

13171819

1612

05

1415

1108

07

20

2122

23

252426

273538

37

39

4041

4243

4446

45

494847

50

5352

54

555657586061

62

59

5136

303133

32

34

29 2863

I

II III

IV

131socIAL And enV IronMentAL rePort 2008

132

the Indicator Matrix is an index to locate the pages where the Social and Environmental Report topics are discus-

sed. Its structure is defined by the third generation indicators of the Global Reporting Initiative (GRI).

In accordance with the application levels established in the GRI Sustainability Report Guidelines,

the Social and Environmental Report 2008 matches level A+. This means that the report provides

information about all essential indicators of the guidelines mentioned herein and that this data is

submitted for external checking. In 2008, the Social and Environmental Report was audited and

revised by KPMG Auditores Independentes. The firm’s statement regarding information publi-

shed herein is on page 139.

ProFILe

strAtegy & AnAlysis

IndIcAtor toPIc PAGe AudIt/reVIsIon

1.1 Statement by holder of highest decision making power in the organization (such as CEO, chairperson of board of directors or equivalent position) on the relevance of sustainability for the organization and its strategy.

2, 3 R

1.2 Description of the main impacts, risks and opportunities. 13, 17, 115 R,R,R

OrgAnizAtiOnAl prOFile


2.1 Name of organization. 6, 7 A

2.2 Main brands, products and/or services. 8, 9 R,R

2.3 the organization's operating structure, including main divisions, operating units, subsidiaries and joint ventures. 7, 14, 15, 21 R,R,R,R

2.4 Address of organization's head office. front cover flap R

2.5 Number of countries in which the organization operates and name of countries in which its main operations are located or as specially relevant for questions of sustainability covered by the report.

14, 15 R,R

2.6 Type and legal nature of the property. 7 R

2.7 Markets attended (including geographic description, sectors attended and types of client/beneficiary). 14, 15 R,R

2.8 Size of the organization. 8, 12, 17, 18 R,R,R,R

2.9 Main changes during the period covered by the report referring to size, structure or share holdings. 13, 16 R,R

2.10 Awards received during the period covered by the report. back cover flap R

essential indicators

extra indicators

A audited information

R revised information

AR audited and revised information

NAR unaudited and/or unrevised information

indicAtOr mAtrix

Anne xes

133

repOrt pArAmeters


3.1 Period covered by the report (such as fiscal/calendar year) for the information provided. 28 R

3.2 Date of latest previous report (if any). 29 R

3.3 Cycle of report issue (annual, biennial, etc.) 28 R

3.4 Data for contact in case of questions about the report or its content. 140 R

3.5 Process for definition of report content, including: determination of materiality; prioritization of topics in the report; identifi-cation of which stakeholders the organization expects will use the report.

29, 130, 131 R,R,R

3.6 Report boundary (such as countries, division, subsidiaries, leased facilities, joint ventures, suppliers). For other instructions, consult the GRI Boundary Protocol.

28 R

3.7 Statement about any specific restraints regarding scope or boundary of report. 28 R

3.8 Basis for preparing the report which refers to joint ventures, subsidiaries, leased facilities, outsourced operations and other organizations that can significantly affect the ability to compare periods and/or organizations.

28 R

3.9 Data measuring techniques and calculation bases, including hypotheses and techniques that sustain the estimates applied to compiling the indicators and other information in the report.

28, 29 R,R

3.10 Explanation of consequences of any reformulations of information provided in earlier reports and the reasons for such reformula-tions (such as mergers or takeovers, change in period or base-year, nature of the business, measuring methods).

28, 29 R,R

3.11 Major changes in comparison with earlier years with regard to scope, boundary or measuring methods adopted in the report. 29 R

3.12 Table that identifies the location of information in the report.132, 133, 134,

135, 136, 137, 138R,R, R,R, R,R, R

3.13 Policy and current practice relating to finding external check for the report. If the check is not included in the sustainability report, it is necessary to explain the scope and basis of any external check provided, as well as the relationship between the reporting organization and auditor(s).

29 R

gOvernAnce, cOmmitments And engAgement


4.1 Governance structure of the organization, including committees under the top governance body responsible for specific tasks, such as establishing a strategy or supervising the organization.

20, 21 R,R

4.2 Indication if the president of the highest governance body also be a CEO (and, if so, his/her functions within the administra-tion of the organization and reasons for such composition).

20 R

4.3 For organizations with a single administration structure, statement of the number of independent or non-executive members of the highest governance body.

20 R

4.4 Mechanisms for shareholders and employees to make recommendations or provide instructions to the highest governance body.

113 R

4.5 Relationship between remuneration for members of the highest governance body, executive board and other executives (including rescission agreements) and the organization's performance (including social and environmental performance).

61 R

4.6 Processes in force in the highest governance body to assure prevention of disputes of interest. 20 R

4.7 Process to determine the qualifications and know-how of members of the highest governance body to define the organization's strategy for questions relating to economic, environmental and social topics.

20 R

4.8 Statements of mission and values, codes of conduct and relevant in-company principles for the economic, social and environ-mental performance, as well as the stage of its implementation.

back cover flap, 20, 23

R,R R

4.9 Procedures of the highest governance body to supervise identification and management by the organization of the economic, environmental and social performance, including relevant risks and opportunities, as well as agreement with or conformity to internationally agreed standards, codes of conduct and principles.

20 R

4.10 Processes for self-assessment of performance of the highest governance body, especially regarding the economic, environ-mental and social performance.

20 R

4.11 Explanation of whether and how the organization adopts the principle of precaution. 81 R

4.12 Charters, principles or other projects developed externally of an economic, environmental and social nature that the organi-zation undersigns or endorses.

24, 25, 26 R,R R

4.13 Participation in associations (such as industry federations) and/or national/international defense organizations in which the organization: has a seat in groups responsible for corporate governance; integrates projects or committees; contributes with major resources beyond the basic rate as a member organization; considers its role as member strategic.

24, 25, 26 R,R R

4.14 List of groups of stakeholders engaged by the organization. 125 R

4.15 Basis for identifying and selecting stakeholders with which it is engaged. 111 R

4.16 Approaches to engage stakeholders, including the frequency of the engagement by stakeholder type and groups. 110, 111 R,R

4.17 Main topics and concerns that were raised through the engagement of stakeholders and what measures the organization has adopted to address them.

113 R


eIxo134

econoMIc


Information about the form of management. 20 R

ecOnOmic perFOrmAnce indicAtOrs

ecOnOmic perFOrmAnce


EC1 Direct economic value earned and distributed, including revenue, operating costs, employee remuneration, donations and other investments in the community, accumulated profits and payments for capital providers and governments.

18 AR

EC2 Financial implications and other risks and opportunities for the activities of the organization due to climate change. 87 R

EC3 Coverage of obligations of defined benefit pension plan offered by the organization. 61 AR

EC4 Significant financial aid received from government. 17 AR

mArket presence


EC5 Variation in proportion of the lowest wage compared to the local minimum wage in important operating units. 61 R

EC6 Policies, practices and proportion of expenses with local suppliers in important operating units. 37 R

EC7 Procedures for local hiring and proportion of senior management members recruited from the local community in important operating units.

60, 61 R,R

indirect ecOnOmic impActs


EC8 Development and impact of investments in infrastructure and services provided, principally for public benefit, through commercial engagement, in kind or pro bono activities.

37 R

EC9 Identification and description of significant indirect economic impacts, including the extent of impacts. 37 R

enVIronMentAL


Information about the form of management 80, 81 R,R

indicAtOrs OF envirOnmentAl perFOrmAnce

mAteriAls


EN1 Materials used by weight or volume. 90 R

EN2 Percentage of materials used from recycling. 90 R

energy


EN3 Direct energy consumption described by primary energy source. 84, 89 R,R

EN4 Indirect energy consumption described by primary source. 84, 89 R,R

EN5 Energy saving due to improvements in conservation and efficiency. 88, 89 R,R

EN6 Projects to provide goods and services with low energy consumption, or that use energy generated by renewable resources, and reduction in the need for energy as a result of such projects.

102, 103, 104, 105

R,R R,R

EN7 Projects to reduce indirect energy consumption and reductions achieved. 89 R

INDICATOR MATRIX

Anne xes


WAter


EN8 Total water removal per source. 90 R

EN9 Water sources significantly affected by water removal. 90 NAR

EN10 Percentage and total volume of water recycled and reused. 90 R

biOdiversity


EN11 Location and size of area owned, leased or administrated within or next to protected areas, and areas with a high rate of biodiversity outside the protected areas.

94, 95 R

EN12 Description of significant impacts in biodiversity of activities, goods and services in protected areas and in areas with a high rate of biodiversity outside the protected areas.

95 R

EN13 Protected or restored habitats. 95, 96 R,R

EN14 Strategies, measures in force and future plans for managing impacts on biodiversity. 95, 96 R,R

EN15 Number of species on the IUCN Red List and in national conservation lists with habitats in areas affected by operations, described by the level of endangerment.

96, 97 R,R

emissiOns, eFFluents And WAste


EN16 Total direct and indirect emissions of greenhouse gases, by weight. 92 R

EN17 Other relevant indirect emissions of greenhouse gases, by weight. 92 R

EN18 Projects to reduce greenhouse gas emissions and the reductions obtained. 92 R

EN19 Emissions of substances that destroy the ozone layer, by weight. 92 R

EN20 NOx, SOx and other significant air emissions, by type and weight. 92 R

EN21 Total water disposal, by quality and destination. 92 R

EN22 Total weight of waste, by type and disposal method. 93 R

EN23 Number and total volume of significant spills. 93 R

EN24 Weight of transported, imported, exported or treated waste considered hazardous in terms of the Basel Convention - Annexes I, II, III and VIII, and percentage of waste shipments transported internationally.

93 R

EN25 Identification, size, protection status and rate of biodiversity of water bodies and related habitats significantly affected by water disposal and drainage undertaken by the reporting organization.

90 NAR

prOducts & services


EN26 Projects to mitigate environmental impacts of goods and services and the extent of reducing these impacts. 99, 100 R,R

EN27 Percentage of recovered products and their packaging in relation to the total products sold, by product category. 100 R

cOnFOrmity


EN28 Monetary value of major fines and total number of non-monetary sanctions resulting from non-conformity to laws and environmental regulations.

84 R

trAnspOrtAtiOn


EN29 Major environmental impacts from transporting products and other goods and materials used in the organization's opera-tions, as well as transporting workers.

100 NAR

generAl


EN30 Total investments and expenses in environmental protection by type. 80, 81, 97 R,R R


eIxo136

socIAL


Information about the form of management. 22, 23, 24 R,R R

perFOrmAnce indicAtOrs reFerring tO l AbOr prActices And decent WOrk

emplOyment


LA1 Total workers, by type of job, labor contract and region. 54, 55 R,R

LA2 Total number and turnover of employees, by age group, gender and region. 55 R

LA3 Benefits offered to full-time employees that are not offered to temporary or part-time employees, listed by the principal operations.

62 R

gOvernAnce-WOrker rel AtiOns


LA4 Percentage of employees covered by collective bargaining agreements. 65 R

LA5 Minimum deadline for notifying in advance operating changes, including if this procedure is specified in collective bargai-ning agreements.

65 R

OccupAtiOnAl HeAltH And sAFety


LA6 Percentage of employees represented in formal safety and health committees, consisting of administrators and workers, who help in monitoring and advising about occupational health and safety programs.

58 R

LA7 Rates of injury, occupational disorders, days lost, absenteeism and deaths relating to occupation, by region. 59 R

LA8 Programs of education, training, counseling, risk prevention and control in progress to help employees, their relatives or members of the community in relation to serious diseases

37, 58 R

LA9 Topics relating to safety and health covered by formal agreements with unions. 57 R

trAining And educAtiOn


LA10 Average hours of training a year, per employee, listed by job category. 63 R

LA11 Programs for skills management and ongoing learning that support the continuity of the employability of the employees and to manage the end of career.

62, 63 R,R

LA12 Percentage of employees who regularly receive appraisals of performance and career development. 62, 63 R,R

diversity And equAl OppOrtunities


LA13 Composition of groups responsible for corporate governance and description of employees by category, in accordance with gender, age group, minorities and other diversity indicators.

75 R

LA14 Proportion of basic wage between men and women, per job category. 75 R

sOciAl perFOrmAnce indicAtOrs FOr HumAn rigHts

prActices OF investment And prOcurement prOcesses


HR1 Percentage and total number of significant investment contracts that include clauses referring to human rights or were assessed with reference to human rights.

48 R

HR2 Percentage of companies contracted and crucial suppliers that were assessed with reference to human rights and measures taken.

48 R

HR3 Total hours of training for employees in policies and procedures relating to aspects of relevant human rights for operations, including the percentage of employees who received training.

48 R

nOn-discriminAtiOn


HR4 Total number of cases of discrimination and the measures adopted. 73 R

Anne xes

INDICATOR MATRIX


FreedOm OF AssOciAtiOn And cOllective bArgAining


HR5 Operations identified in which the right to freedom of association and collective bargaining may be running considerable risk and the measures taken to support this right.

64, 65 R,R

cHild l AbOr


HR6 Operations identified as being of significant risk of child labor and the measures taken to contribute to abolishing child labor. 69, 70, 71 R,R R

FOrced Or sl Ave-like l AbOr


HR7 Operations identified as being of significant risk of forced or slave labor and the measures taken toward eradicating such forced or slave labor.

65, 67 R,R

sAFety prActices


HR8 Percentage of safety personnel trained in the organization's policies or procedures relating to aspects of human rights that are relevant to the operations.

49 R

indigenOus rigHts


HR9 Total number of cases of violating rights of the indigenous peoples and measures taken. 36 R

indicAtOrs OF sOciAl perFOrmAnce reFerring tO sOciety

cOmmunit y


SO1 Nature, scope and effectiveness of any program and practice to assess and manage the impacts of operations on the communities, including admission, operation and departure.

36, 37 NAR

cOrruptiOn


SO2 Percentage and total number of business units assessed for risks relating to corruption. 121, 122 R,R

SO3 Percentage of employees trained in the organization's anti-corruption policies and procedures. 122 R

SO4 Measures taken in response to cases of corruption. 123 R

public pOlicies


SO5 Positions toward public policies and participation in preparing public policies and lobbies. 122, 123 R,R

SO6 Total value of financial contributions and in kind to political parties, politicians or related institutions, listed by country. 122 R

unFAir cOmpetitiOn


SO7 Total number of lawsuits against unfair competition, trust and monopoly practices and their results. 117 R

cOnFOrmity


SO8 Monetary value of significant fines and total number of non-monetary sanctions resulting from non-conformity to laws and regulations.

117 R


eIxo138

perFOrmAnce indicAtOrs FOr prOduct liAbility

HeAltH And sAFety OF client


PR1 Stages in the life cycle of goods and services in which the impacts on health and safety are assessed with view to improvement and the percentage of goods and services subject to such procedures.

115, 116 R,R

PR2 Total number of cases of non-conformity to regulations and voluntary codes relating to impacts caused by goods and services on health and safety during the life cycle, listed by type of result.

117 R

l Abeling OF gOOds And services


PR3 Type of information about goods and services required by labeling procedures, and the percentage of goods and services subject to such requirements.

116, 117 R,R

PR4 Total number of cases of non-conformity to regulations and voluntary codes relating to information and labeling of goods and services, listed by type of result.

117 R

PR5 Practices relating to client satisfaction, including research results that measure this satisfaction. 112 R

mArketing cOmmunicAtiOns


PR6 Programs obeying the laws, regulations and voluntary codes related to marketing communications, including advertising, promotion and sponsorship.

112 R

PR7 Total number of cases of non-conformity to regulations and voluntary codes relating to marketing communications, including advertising, promotion and sponsorship, listed by type of result .

117 R

client privAcy


PR8 Total number of proven complaints relating to violation of privacy and loss of client data. 117 R

cOnFOrmity


PR9 Monetary value of fines (significant) for non-conformity to laws and regulations relating to the supply and use of goods and services.

117 R

Anne xes

INDICATOR MATRIX


Rio de Janeiro, May 21, 2009

To

Board of Directors and Shareholders of

Petróleo Brasileiro S.A. – Rio de Janeiro – RJ

IntroductIonWe were contracted to apply limited assurance pro-

cedures for the Social and Environmental Report of

Petróleo Brasileiro S/A (Petrobras) for the year ending

December 31, 2008, prepared under the responsibility of

Petrobras. Our responsibility is to issue a Limited Assu-

rance Report on this Social and Environmental Report.

Procedures AdoPtedThe limited assurance procedures were adopted pur-

suant to Standard NPO 1, issued by the Instituto dos

Auditores Independentes do Brasil – IBRACON and to

ISAE 3000 – International Standard on Assurance En-

gagements, issued by the International Auditing and

Assurance Standards Board, for assurance engage-

ments other than an audit or revision of past financial

information. The procedures consist of the following:

planning the work, considering the relevance, a.

consistency, volume of quantitative and qualitative

information and operating and internal control

systems that are the basis for drafting the

Petrobras Social and /Environmental Report;

understanding the calculation methodology b.

and consolidation of the indicators by means of

interviews with the administrators responsible for

preparing the information;

using sampling to compare the quantitative c.

and qualitative information with the indicators

disclosed in the Social and Environmental

Report; and

comparing the financial indicators with the d.

financial statements and/or accounting records.

crIterIA For PrePArInG InForMAtIonThe information in the Petrobras Social and Environ-

mental Report was prepared in accordance with the

guidelines for sustainability reports of the Global Re-

porting Initiative (GRI G3).

scoPe And restrIctIonsThe objective of our work is to provide limited assuran-

ce of information concerning the form of administration

and sustainability performance indicators, not including

assessment of the adaptation of its policies, practices and

performance in sustainability. The procedures adopted do

not include an examination under the financial statement

audit standards. Moreover, our report does not offer limi-

ted assurance on the scope of future information (such as,

for example: goals, expectations and ambitions) and des-

criptive information for subjective assessment. Accordin-

gly, certain information in the Social and Environmental

Report were not duly audited or revised and are identified

as “not audited/unrevised” in the Indicator Matrix.

concLusIonBased on our review, we do not know of any relevant

modification that should be made in to the Petrobras

Social and Environmental Report for the year ending

December 31, 2008, in order to satisfy the GRI G3 gui-

delines and with the entries and files that are used as a

basis for its preparation.

KPMG Auditores Independentes

CRC-SP-14.428/O-6-F-RJ

Manuel Fernandes Rodrigues de Sousa

Accountant CRC-RJ-052.428/O-2

Alexandre Heinermann

Accountant CRC 1SP228.175/O-0-S-RJ

limited AssurAnce repOrt FrOm tHe independent AuditOrs


140 EDITOR IAL STAFF

EDITORIAL STAFF

Responsible foR infoRmation

Wilson Santarosa executive manager for institutional Communication

Marcos Menezes – Accountant (CRC-RJ 35.286/0-1) executive accounting manager

Institutional Communication General Coordination, production and editing

text

Adriano Lima Alyne de Castro Costa Bruno Moreira Cazonatti Flávia Fuini Pessa

pRoduCtion

Cuca Design Graphic design

Tapioca Comunicação editorial production and editing

Elvyn Marshall translation and Revision

Pancrom printing

photoGRaphs

Petrobras Image Bank

page 7: paulo arthur page 11: andré Valentim page 16: Geraldo falcão page 27: andré Valentim page 35: Geraldo falcão page 41: Cris isidoro page 45: bruno Veiga page 49: Rogério Reis page 57: Juarez Cavalcanti page 65: Geraldo falcão page 68: Rogério Reis page 71: Juarez Cavalcanti page 74: Juarez Cavalcanti page 82: Rogério Reis page 85: bruno Veiga page 93: bruno Veiga page 96: andré Valentim page 101: Rogério Reis page 103: andré Valentim page 112: bruno Veiga page 116: Geraldo falcão

For further information and request for copies of the Social and Environmental Report:

Petrobras Social and Environmental Report Coordination institutional Communication / social Responsibility management sector management for Guidelines and practices of social Responsibility

[email protected] av. República do Chile, 65 – sala 1.202 – Centro Rio de Janeiro – RJ – brasil – Cep: 20.031-912

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