2024 Corporate Governance Seal

Yes

See PNOC EC Manual for Corporate Governance, Section 8.3 (f), CORPORATE SOCIAL RESPONSIBILITY AND RELATIONS WITH STAKEHOLDERS (CUSTOMERS), page 35.

The Manual of Corporate Governance provided for the Corporate Social Responsibility and Relations with Stakeholders (Communities), Section 8.3 (e) page 34 of the GOCC (PNOC EC). It is guided by the following key principles:

1. Sustainability
2. Self-sufficiency and Empowerment
3. Transparency
4. Gender Sensitivity and Cultural sustainability

See PNOC EC’s Manual of Corporate Governance 

PNOC EC also has an approved CSR Policy.

See PNOC EC’s CSR policy 

Yes

PNOC EC issue a Memorandum dated 19 June 2007 regarding EHS Policy and Revised HSSE Policy Statement dated 06 September 2018.

For 2024, PNOC EC complied with environmental commitments under the Environmental Compliance Certificate of COC 41 project, regular monitoring of wastewater discharges, ambient air, and noise to reduce the environmental impacts of the Company’s project. Waste segregation, proper handling and disposal of hazardous wastes are continuously practiced in field sites. Recyclable materials were sorted in Material Recovery Facilities (MRF) to promote waste reduction and recycling. 

See EHS Policy, Revised HSSE Policy Statement, 2024 Health, Safety, Security and Environment (HSSE) Annual Report

Yes

For 2024, PNOC EC, consistently strives to enhance its HSSE performance each year. The continuous review of the HSSE Management System diligently demonstrates its commitment to integrating its values into all business operations. Consistent communication of relevant HSSE concerns and developments, along with regular learning and skills development efforts, remains a key priority.

Health Management and Awareness

Prioritizing the health and well-being of employees stands as a fundamental aspect of corporate responsibility at PNOC Exploration Corporation (PNOC EC). Health management and awareness programs are designed to promote a healthy, safe, and supportive work environment, ensuring that all team members can thrive both personally and professionally.

A variety of activities aimed at enhancing physical, mental, and emotional well-being are pursued across the year. The company provides basic medicines, vitamins, influenza vaccine and medical supplies to employees. The drinking water supplied in the office premises is tested every quarter to ensure its safety (April 31, July 16 and November 20, 2024). Assessment of Pre-employment Medical Examination results and monitoring of Annual Physical Examination (APE) results are regularly carried out. The APE for all regular employees was conducted on November 19, 2024. Several health articles and lectures were offered from January to December to enhance their understanding of health management. Throughout 2024, a monthly average of 6% of the total number of HO employees utilized teleconsultation services. The most common health concerns addressed were influenza, diarrhea and skin-related conditions.

The Company also received a plaque of appreciation from the National Kidney Institute for being an invaluable partner in providing safe and adequate blood products through regular conduct of blood donation drive. In 2024, blood collection efforts were organized on April 16 and November 28. Other activities under health management include the conduct of Basic Emergency Response Training on September 14, 2024 to the 3rd party contractors and assistance to our field units.

Operational Safety and Security

Ensuring the safety and security of the Company’s petroleum and coal operations remains a top priority. Our safety management systems and security protocols are designed to protect employees, assets and the environment. By adhering to industry best practices and regulatory standards, the Company strives to maintain a safe and secure working environment, minimizing risks and fostering a culture of continuous improvement.

The Company completed the project-specific HSSE Management Plan for SC 57 Calamian Offshore 3D Seismic Survey Project and obtained the endorsement on March 4, 2024 for a Special Permit for vessels “SW Thuridur” and “MV Binn An Valiant”, which were utilized during the seismic survey, from the National Security Council. Prior to the seismic survey operations in Northwest Palawan, extensive coordination meetings were held from February to June 2024 with key agencies such as the Department of Energy (DOE), Armed Forces of the Philippine (AFP), Philippine Coast Guard (PCG), and Joint Task Force Malampaya (JTFM) to ensure smooth, safe and successful execution of the activity. The control measures established ahead of time provided the Company with a clear framework for addressing challenges that arose during the survey operations. In addition, PNOC EC completed the Journey Management Plan for SC 37 Chico Prospect and conducted risk assessments as well as drafting of the individual HSSE Manuals for SC 37 Chico Prospect and SC 59 West Balabac.

In mine operations and Coal Operations Group Malangas (COG), the Company enhances its onsite support to assist with regular inspections/ audits. This is a proactive approach of the Company to ensure regulatory laws are followed and safety protocols are observed. Inspection/ audit findings and recommendations were communicated to concerned units for immediate resolution. To manage operational hazards, the following are carefully carried out: evaluation of workplace environment and practices, and recommendations for technical specifications of safety equipment, identification of necessary personnel training, and work improvements. PNOC EC also ensured the prompt submission of regulatory compliances to the Department of Energy (DOE) and Bureau of Fire Protection (BFP). Capacity-building training for the Emergency Response Team members was also conducted, which included First Aid, Fire Fighting and Rescue Training.

Ensuring security and situational awareness during project operations is achieved through continuous coordination with government security forces and other related agencies. Gathering intelligence and conducting assessments in the municipalities of Diplahan, Imelda, and Malangas on June 28 and November 8, 2024 had been crucial in understanding and maintaining awareness of the local security environment, particularly for projects in COCs 41 and 204.

To strengthen the Company’s safety culture and management system in the Head Office, the following activities were implemented: HSSE orientation for new employees, Fire Safety Seminar for security and general services personnel, posting of HSSE-related information in key locations, provision of weather and earthquake updates through email, and adherence to office/ site inspection requests. The Company also participated in the quarterly Nationwide Simultaneous Earthquake Drill (NSED) with the DOE on March 25, June 13, and September 12, 2024. Fire Prevention Seminar and Fire Fighting Exercises with BFP Taguig City and Emergency Rescue and Transfer Training for the ERT members of HO were initiated by PNOC EC on December 13, 2024.

The HSSE employees attended the 70th Annual National Mine Safety & Environment Conference/ Minerals Industry Symposium, which was held on November 19 to 23, 2024, to be equipped and ready in providing support to the Company’s mine operations. Also provided logistical support to the mine personnel who participated in the Mine Safety Field Demonstration (November 22, 2024).

For the overall safety performance, the Company recorded two (2) Lost Time Accidents in the Mine 3 operations. These are workplace incidents in which employees sustain injuries significant enough to require time off from their duties. The Company promptly addressed these incidents by implementing a range of comprehensive safety measures including:

1. thorough inspections of equipment and work area prior use to identify and mitigate potential hazards

2. regular maintenance of mine equipment to prevent malfunctions and accidents

3. re-orientation of all workers to remind them of their duties and responsibilities

4. safety trainings to equip them with the necessary skills and knowledge for safe operations

5. constant reminders on proper use of Personal Protective Equipment

See 2024 Health, Safety, Security and Environment (HSSE) Annual Report

Yes

For 2024, PNOC EC’s commitment to environmental management is a core component of its HSSE strategy. The company implemented various measures to ensure sustainable and responsible operations. Significant initiatives involve the following:

1. Applications and renewals of pertinent permits, clearances, and accreditations covering the Company’s various activities

2. Prompt submission of monitoring reports to the Department of Environmental and Natural Resources Environmental Management Bureau (DENR-EMB)

3. Successful conduct of SC 57 Seismic Survey with Zero LTA and no environmental complaints

4. Harmonious coordination during the IEC with the affected communities, LGU, and other stakeholders of SC 57

5. Conduct of Baseline Environmental Monitoring of SC 37 Chico-1 and COC 41 Mine 4 projects

6. Consistent adherence to the standards in the Air and Water monitoring results at the COC41 project sites.

7. Strict observance of the Environmental Compliance Certificate (ECC) conditions for the Malangas Coal Operations, including the quarterly Multi-Partite Monitoring Team (MMT) meetings, which were held on April 23, 2024, July 9, 2024, and October 23, 2004, was ensured.

In exploration sites, PNOC EC is steadfast in its commitment towards preservation of ecological balance through the following:

1. Use of environment-friendly and internationally accepted drilling fluids, equipment, and technology in drilling operations;

2. Safe conduct of seismic survey and suspending activities during migration of marine mammals (e.g., whales and dolphins) and other endangered marine species, and by hiring Marine Mammal Observers (MMO) on board seismic vessels during operation to ensure the safety of these sea creatures;

3. Conduct of Information, Education and Communication (IEC) campaigns as well as FPIC activities, as mandated by law, in the affected host communities prior to exploration work;

4. Strict adherence to the terms and conditions of the Environmental Compliance Certificate (ECC) and other permits and clearances; and

5. Keeping up with good oil and coal industry practices.

See 2024 Health, Safety, Security and Environment (HSSE) Annual Report

Yes

For 2024, PNOC EC’s commitment to environmental management is a core component of its HSSE strategy. The company implemented various measures to ensure sustainable and responsible operations. Significant initiatives involve the following:

1. Applications and renewals of pertinent permits, clearances, and accreditations covering the Company’s various activities

2. Prompt submission of monitoring reports to the Department of Environmental and Natural Resources Environmental Management Bureau (DENR-EMB)

3. Successful conduct of SC 57 Seismic Survey with Zero LTA and no environmental complaints

4. Harmonious coordination during the IEC with the affected communities, LGU, and other stakeholders of SC 57

5. Conduct of Baseline Environmental Monitoring of SC 37 Chico-1 and COC 41 Mine 4 projects

6. Consistent adherence to the standards in the Air and Water monitoring results at the COC41 project sites.

7. Strict observance of the Environmental Compliance Certificate (ECC) conditions for the Malangas Coal Operations, including the quarterly Multi-Partite Monitoring Team (MMT) meetings, which were held on April 23, 2024, July 9, 2024, and October 23, 2004, was ensured.

In exploration sites, PNOC EC is steadfast in its commitment towards preservation of ecological balance through the following:

1. Use of environment-friendly and internationally accepted drilling fluids, equipment, and technology in drilling operations;

2. Safe conduct of seismic survey and suspending activities during migration of marine mammals (e.g., whales and dolphins) and other endangered marine species, and by hiring Marine Mammal Observers (MMO) on board seismic vessels during operation to ensure the safety of these sea creatures;

3. Conduct of Information, Education and Communication (IEC) campaigns as well as FPIC activities, as mandated by law, in the affected host communities prior to exploration work;

4. Strict adherence to the terms and conditions of the Environmental Compliance Certificate (ECC) and other permits and clearances; and

5. Keeping up with good oil and coal industry practices.

See 2024 Health, Safety, Security and Environment (HSSE) Annual Report

The Annual Report and website provides for the contact information where stakeholders can send or voice out their concerns and/or complaints.

During the conduct of Information, Education and Communication (IEC) campaigns in the project host communities, the contact details are likewise provided in the presentation materials.

See 2023 PNOC EC Annual Report, page 3 and back page.

See PNOC EC Website under Contact Us.

Yes

PNOC EC issue a Memorandum dated 19 June 2007 regarding EHS Policy and Revised HSSE Policy Statement dated 06 September 2018.

See EHS Policy, Revised HSSE Policy Statement

Yes

PNOC EC's HSSE Department is submitting a monthly and annual safety performance report to the Management which includes data on occupational injury or illnesses. For 2024, PNOC EC and its contractors recorded 580,882 and 489,509 safe manhours, respectively.

See 2024 Health, Safety, Security and Environment (HSSE) Annual Report

The PNOC EC has an Employee Development Program and Competency Development Framework aimed at maintaining and upgrading the quality of its personnel by enhancing their core and technical expertise needed for the efficient and successful delivery of operational activities and strategic programs aimed at achieving business targets and corporate objectives.

See Employee Development Program and Competency Development Framework

The PNOC EC has disclosed its Corporate Objectives.

See Strategic Objective and Measurement in the 2023 Performance Scorecard included in PNOC EC's 2023 Annual Report, page 39.

The PNOC EC has disclosed its Financial Performance Indicators in its Financial Statements, Performance Scorecard (as Net Income and BUR), and Annual Report.

See 2024 Financial Highlights based on Unaudited Financial Statements, Financial Performance Indicators in the 2024 Performance Scorecard, and PNOC EC's 2024 Annual Report.

The PNOC EC has disclosed its Non-Financial Performance Indicators in its Annual Report and Performance Scorecard.

See Non-Financial Indicators in the 2024 Performance Scorecard, which is also included in PNOC EC's 2024 Annual Report.

Consistent with the GCG Memorandum Circular No. 2016-02 "Revised Whistleblowing Policy for the GOCC Sector", the PNOC EC Whistleblowing Policy Guidelines includes, among others, procedures of its whistle-blowing policy for its stakeholders.

Yes. See Board of Directors included in PNOC EC's 2023 Annual Report, pages 40-44

Yes.

See Board of Directors' List of Trainings and Seminars

See PNOC EC's Annual Reports.

PNOC EC’s 2023 Annual Report (pages 33-34) includes a statement which reads: “PNOC EC affirms its full compliance with the provisions of the Code of Corporate Governance (GCG Memorandum Circular No. 2012-07 dated November 2012) and PNOC EC’s Manual of Corporate Governance dated January 2014, revised and approved by GCG on August 2021 in compliance with SEC Memorandum Circular (MC) No. 24, Series of 2019 and SEC MC No. 19, Series of 2020. As a model GOCC, PNOC EC continuously lives up to such status through practice of good corporate governance towards active promotion and pursuit of corporate governance reforms and conscious observance of the principles of accountability and transparency."

Yes. See 2023 Annual Report, pages 33-34

PNOC EC released its 2023 Annual Audit Report 56 days after receipt from COA.

PNOC EC released its 2023 Annual Report 58 days after release of its Annual Audit Report.

The true and fair representation of the annual financial statements/reports is affirmed in the Statement of Management's Responsibility signed by the Chairman of the Board, the President and CEO and the Acting Treasurer

See 2023 Annual Report, page. 51

The Board of Directors reviewed the Company's Strategy Map and Performance Scorecard, among others, during PNOC EC's 2024 Strategic Planning Session held from January 09-10, 2024.

See PNOC EC's 2024 Board Planning Session Program and PNOC EC's 2024 Board Planning Session Presentation Slides.

PNOC EC regularly holds an Annual Planning Session attended by members of the Board of Directors and Management, where the Company’s Vision and Mission are deliberated on. The Board of Directors and Management also discuss the implementation of the Company’s plans and programs aligned with its corporate strategies.

See PNOC EC's 2024 Board Planning Session – Agreed Action Items

The PNOC EC Board of Directors, Management, and employees are covered by and are required to comply with the following: 

1. Republic Act No. 6713
2. Republic Act No. 6713 IRR
3. Company Policy on Discipline
4. Table of Penalties
5. Rules and Regulations on Discipline of Corporate Officers and Secretary Certificate on Board Resolution No. 7-7, S’2012.
6. Republic Act No. 10149
7. GCG Memorandum Circular No. 2012-05
8. Gender-Based Anti-Sexual Harassment Policy Manual

As a practice, the PNOC EC Board of Directors schedules a Board meeting at least once every month, the date of which is subject to the availability of the Secretary of the Department of Energy – PNOC EC’s Ex Officio Chairman of the Board.

Although the By-Laws and existing rules mandate that the Board must be provided the materials two (2 days) before a meeting, as a practice, materials for Board Meetings are provided to the Board at least three (3) working days in advance of all Board Meetings.

See PNOC EC Manual for Corporate Governance, page 8-11

The Board of Directors hold at least one (1) meeting every month.

See Board of Directors Meeting Attendance for 2024

The Board of Directors held twenty (20) meetings in 2024.

See Board of Directors Board Meeting Attendance for 2024, Proof of Meeting Scheduled in Advance

At least 90% of the Board Meetings were attended by all appointive Member of the Board.

See Board of Directors Meeting Attendance for 2024

See Board of Directors Meeting Attendance for 2024

Although the By-Laws and existing rules mandate that the Board must be provided the materials two (2 days) before a meeting, as a practice, materials for Board Meetings are provided to the Board at least three (3) working days in advance of all Board Meetings.

See PNOC EC's Laws, pages 4-5

PNOC EC's Corporate Secretary and Assistant Corporate Secretaries, appointed by the Board of Directors as such, are members in good standing of the Philippine Bar.

See PNOC EC Corporate Secretary and Assistant Corporate Secretaries in 2023

PNOC EC has established the Enterprise Risk Management System.

As disclosed in the Company’s Annual Report, the Board of Directors oversee the risk management functions, particularly in the areas of managing credit, market liquidity, operational, legal, reputational, and other risks of PNOC EC. The Company’s Management regularly reports to the Audit and Risk Management Committee and to the Board of Directors all matters concerning PNOC EC’s material controls and risk management system.

It is in the policy that PNOC EC’s Board of Directors perform risk management function as mandated and guided in its Manual Corporate Governance series of 2019.

Refer to Corporate Governance section, of the 2023 Annual Report, pages 33 to 38

Refer to Manual of Corporate Governance, page 21, 3.1e (i)

*PNOC EC’s annual report, will be published in June as scheduled after review and approval by COA of its Financial Statement.

The annual report contains a statement that the Board of Directors oversee the risk management functions, particularly in the areas of managing credit, market liquidity, operational, legal, reputational, and other risks of PNOC EC. The Company’s Management regularly reports to the Audit and Risk Management Committee and to the Board of Directors all matters concerning PNOC EC’s material controls and risk management system.

Refer to Corporate Governance section, of the 2023 Annual Report, pages 33 to 38

Refer to Manual of Corporate Governance, page 21, 3.1e (i)

*PNOC EC’s annual report, will be published in June as scheduled after review and approval by COA of its Financial Statement.

For 2023, PNOC EC’s Ex-Officio Chairperson is Raphael Perpetuo M. Lotilla (Secretary, Department of Energy), while its President and CEO is Franz Josef George E. Alvarez.

See Secretary's Certificate for Board Resolution No. 8-1, Series of 2022 and 2023 Annual Report, page 40

The Office of the Corporate Secretary holds an orientation session for new directors, covering the following topics: (1) Company overview; (2) Role of PNOC EC Board of Directors; and (3) PNOC EC Operations.

See Briefing Materials for New Directors

One of the functions of the Governance Committee is to recommend to the Board the continuing education of Directors.

Furthermore, the Annual Work Program and Budget of PNOC EC contains provision for the attendance of all members of the Board of Directors to training programmes and seminars as part of the continuous professional educational programme.

See PNOC EC Manual for Corporate Governance, page 20, Sec 3.15 (c)(iii)

Yes.

See Board of Directors' List of Trainings and Seminars

The Board of Directors conducts an annual assessment of its performance for the year based on an appraisal system developed for the purpose. For its performance for the year 2023, the appraisal of the Board of Directors will be conducted in the first quarter of 2024.

See Board Assessment Questionnaire.

The Board of Directors conducts an annual assessment of Its performance for the year based on an appraisal system developed for the purpose, which determines, among others, (a) the adequacy of the Boards structure and composition; (b) whether the Board has fulfilled its responsibilities for PNOC EC's performance; (c) whether the members of the Board work well as a team and communicate properly; and (d) their strengths and weaknesses.

For the year 2023, the appraisal of the Board of Directors will be conducted in the first quarter of 2024. 

The Office of the Corporate Secretary, as the repository of Board Assessment Questionnaire, individually sends and collects the Performance Appraisal Form of each Member of the Board to assure the integrity and confidentiality of such. 
 

See Board Assessment Questionnaire.

The Board of Directors conducts an annual assessment of Its performance for the year based on an appraisal system developed for the purpose, which determines, among others, (a) the adequacy of the Boards structure and composition; (b) whether the Board has fulfilled its responsibilities for PNOC EC's performance; (c) whether the members of the Board work well as a team and communicate properly; and (d) their strengths and weaknesses.

For the year 2023, the appraisal of the Board of Directors will be conducted in the first quarter of 2024.
 

See Board Assessment Questionnaire.

The Board of Directors Committees conducts an annual assessment of its performance for the year based on an appraisal system developed for the purpose which determines, among others, (a) the adequacy of the Committee's structure and composition; (b) whether the Committee has fulfilled its responsibilities for PNOC EC's performance; (c) whether the members of the Board work well as a team and communicate properly; and (d) their strengths and weaknesses. 

For the performance of each Board Committees in the year 2023, the respective members of each Board Committee conducted the assessment of their respective Committees during the first quarter of 2024.
 

See Board Committee Assessment Questionnaire – Audit and Risk Management Committee, Board Committee Assessment Questionnaire – Nomination, Remuneration, Education, and Employee Welfare Committee, and Board Committee Assessment Questionnaire – Project Development and New Ventures Committee.

For the 2023 PNOC EC Annual Report, the following sections are referenced to the Global Reporting Initiative (GRI) standards: About the Report, About PNOC EC, Report from the President and CEO, Operational Highlights, Corporate Social Responsibility, HSSE, People Development, and Corporate Governance Section.

See Annual Report 2023

PNOC EC released its 2023 Annual Audit Report 56 days
after receipt from COA.

No PNOC EC Board Member holds more than five (5) positions in GOCCs and PLCs.

See Secretary's Certificate for Appointive Directors do not hold 5 Positions in any GOCC

As of this Report's date, PNOC EC's 2023 compliance with good governance conditions is still under evaluation by the GCG.