Mission statement

As a global energy group of European origin, our ambition is to meet society's energy needs by offering an ever-broader range of products and services. We carry out that mission with commitment, professionalism, service and loyalty - all values to which we are deeply attached. Finding, manufacturing and distributing reliable quality products is the goal we seek to achieve, drawing on innovation and state-of-the-art technologies to do so. We conduct our oil and gas and chemicals activities in an ongoing spirit of transparency, outreach, partnership and solidarity, in order to meet society's expectations and rise to the crucial challenges of ensuring the safety of people and property, preserving natural resources and protecting the environment.

Ensuring Adherence to Values and Policies

The Ethics Committee, formed in March 2001, has implemented a variety of policies, as illustrated below:

In-house Communications and Training
The values and policies of TotalFinaElf as well as the provisions of the Code of Conduct have been presented to most of the Group's employees. Some fifty specific presentations have been made by the members of the Ethics Committee to some 2,000 persons, mostly in managerial positions, during seminars or in their respective subsidiaries. These presentations have then been passed on through the managerial lines of authority down through the various business units. In addition, an awareness training session on issues of corporate ethics has been designed and introduced.

Referring Matters to the Ethics Committee
Problems of an ethical nature are normally dealt with by management, but the Code of Conduct specifies that all employees have the option of referring matters to the Ethics Committee directly. Under this provision, 25 cases relating to ethical issues were submitted in writing to the Committee. These cases were reviewed in accordance with the policy of confidentiality, and recommendations were made regarding them. In addition, the members of the Committee were called upon to decide on various cases submitted orally.

Recommendations
The Committee made several recommendations to the Chairman of the Group and to the Executive Committee on major issues that are often raised.

Measuring Ethical Performance
New innovative processes are now being designed to measure ethical performance. They should be in use before the end of 2002.

External Communications and Contribution to Public dialog
The Committee has answered a number of questions on the Group's ethics, mainly brought up by official agencies such as the European Parliament and non-governmental organizations. It has established a constructive dialog with ethics rating agencies. Representatives of the Group participated actively in a certain number of French and international organizations dealing with the ethical implications of corporate policy. In this area, TotalFinaElf has recently agreed to take part in the initiative by the UN Secretary General known as Global Compact, aimed at promoting the emergence of shared policies and values and giving globalization a new look. Member companies of the Global Compact take part in, support and implement in their businesses nine policy and behavioral guidelines relating to Human Rights, international labor standards and environmental protection. Today about 100 companies have joined the Global Compact.

Human Resources Management Guided by a Search for Excellence

Management on a Global Scale
TotalFinaElf is one of the most widely present industrial companies operating on a global scale. Managing its workforce involves local constraints as well as varying business practices. For that reason, the organization established as a result of the merger is for the most part decentralized, with human resources departments established in each division and a genuine delegation of responsibilities to local levels. On the other hand, for the sake of consistency in managing its human resources, the Group has established a central human resources department that defines the major guidelines in each of the key areas: recruiting, labor relations, training and compensation. All global managerial positions (25,000) have been evaluated by means of an international rating system used and recognized by other groups of comparable size.

Fostering Mobility
TotalFinaElf believes mobility is beneficial both for employees, who see it as an opportunity to acquire broader professional experience, and for the businesses of the Group, which benefit at all levels from regular employee renewal. In 2001, the Group enacted new standards governing expatriation, which apply to all expatriates, irrespective of their country of origin, residence or arrival. The Group has also provided its employees an intranet site devoted to mobility. Lastly, in each of its divisions, it is developing job mobility plans based on job reports that are updated regularly.

Fostering Employee Motivation
The wide variety of businesses and facilities, the countless opportunities for career advancement offered by the Group to its employees, the policy of maintaining skills and accessing useful knowledge are all contributing factors to motivate employees and foster their loyalty. However, TotalFinaElf also wishes to motivate them by applying an individualized compensation policy reflecting their individual performance within the broader context of the Group's overall performance and that of their company. In line with this plan, the Group has introduced financial incentive systems adapted to national contexts and laws to reward sales and marketing, technical (including environmental security) or financial performance, while at the same time remaining attractive as compared to the various other job markets.
To continue assisting employees in obtaining a stake in the Group's equity capital, the Board of Directors approved on November 20, 2001 a capital increase reserved for TotalFinaElf employees participating in the Group's savings plans. This offering, the first of its type for the TotalFinaElf group, was launched on December 17, 2001 at a subscription price of 122.70 euros and ran until February 15, 2002. It proved to be a big success with over 50,000 people in 85 countries subscribing for 2,785,214 new shares. Similarly, the Group has substantially increased the number of recipients of stock subscription and stock purchase options. By the end of 2001, over 3,000 employees had been granted stock options for their personal achievements in boosting Group performance.

Staff Renewal
In France, in the Petroleum sector, a selective early retirement plan and a voluntary redundancy plan were offered to employees. A total of 1,625 employees opted for the early retirement plan, 525 of whom left the company sometime in 2001. In Chemicals, a research center was closed and an early retirement plan was offered to the employees of the Paris and Philadelphia headquarters, equivalent to the reduction of 600 positions. TotalFinaElf has continued to hire new employees and has an active policy involving contacts with schools and universities. A special website has been set up in order to facilitate dialog with potential applicants and to expand the future recruiting base. In 2001, this site received applications numbering in the tens of thousands.

Industrial Safety: Objectives for Progress and a New Organizational Structure to achieve the Best standards in the Profession

In 2001, the explosion at the AZF Grande Paroisse plant in Toulouse, in the wake of the serious accident at the US Atofina Chemicals plant in Riverview, Michigan, in the US, is a tragic reminder that the petroleum and chemicals businesses are hazardous ones.

Our industry has been living with this risk since the beginning, and is constantly developing techniques to control it. The tragic events of 2001 led to necessary dialog on the company's role, values and businesses, and on the issue of organization. TotalFinaElf now has a new organizational structure designed to attain the next level in terms of safety aimed to raise the Group to the best standards in the profession in all its business segments.

TotalFinaElf has over 1,500 employees working full-time on issues relating to the environment and to safety. Over one billion euros in operating expenses have been devoted to these issues. The "Health Safety Environment Quality" Charter defines the basic principles for conducting TotalFinaElf's operations. It is accompanied by an explanatory guide and guidelines applicable to the specific activities of the operating divisions. Every TotalFinaElf employee and sub-contractor is required to comply with these provisions.

Special Training in Safety and Respect for the Environment
Training and risk awareness play a key role in workplace safety. TotalFinaElf makes a point of including its subcontractors' supervisors and ground crews in its various safety awareness and training programs. All the Group's general training programs include presentations on safety and the environment. There are two specific training programs, SEV1 and SEV2. The first one is intended to provide future senior executives with basic data regarding safety and the environment. The second one is designed to train employees who will be in charge of safety and the environment in the future.

Policies and Objectives
Maritime Safety
After the wreck of the Erika in 1999, TotalFinaElf issued more stringent criteria for selecting chartered ships. Thus, the Group became the first oil company to impose a 20-year age limit on ships over 80,000 tons and a 25-year limit on all other chartered ships. TotalFinaElf is calling for greater oversight and liability on the part of the rating companies, and better compensation procedures by increasing the liability of all parties involved.

Treatment of waste arising from the Erika shipwreck
Nearly 220,000 tons of waste collected during the cleaning operation of the coastal areas were temporarily placed in 4 large storage centers. Processing plants on the Bossène site near the Donges refinery began operations in April 2001. To date, more than 18,000 tons of waste have been processed and completion is forecast for the fourth quarter of 2003.

Safety Management and Certification
Safety management systems like International Safety Rating System (ISRS) are being extended to all our facilities. Some that are already in use at the Port Arthur refinery in Texas and the polypropylene plant in La Porte, Texas, have already achieved an outstanding performance and are close to receiving the highest possible score on the ISRS evaluation scale, which goes from 0 to 10. Our objective is for all our facilities to be at least at level 7. We are also introducing ISO standard 14001 for the environmental management of all our facilities. 94 sites have been certified in 2001, representing the vast majority (75%) of the most exposed sites, which were obviously given priority. Some of the others, such as our Saint-Fergus natural gas terminal in Scotland, have dual ISO 14001 and EMAS accreditation.

Greater Awareness of Risks
Greater awareness of risks no longer applies only to issues of safety and the environment, but has now been expanded to encompass other potential crisis situations such as a computer crisis. A Strategic Crisis Prevention and Management Committee has been established to deal with all possible risks. Similarly, in terms of controlling accidental marine pollution, an Operating Committee known as Cogédac has been established. It brings together all Group companies concerned, especially in the chemicals business, which is playing a very active role in this area.

Contributing to Sustainable Development by Applying Tangible Measures to the Core Business

Sustainable development means making issues related to the environment and to society an integral part of economic growth. It means finding a happy medium between the needs of mankind and the resources of the planet and balancing the short and long-term costs and benefits. As part of its sustainable development policy, TotalFinaElf has identified five areas in which it possess the skills and experience required to provide concrete solutions to the needs of stakeholders.

Making the Most of Oil and Gas Resources
Oil and gas will remain vital energy sources for economic development for many years to come. In 2001, the Group did its part in meeting this challenge by bringing on stream reserves requiring expertise in cutting-edge technology:
• in the North Sea, Elgin/Franklin is opening up deep high pressure, high temperatures, sedimentary basins;
• in Venezuela, Sincor is confirming the economic and technical feasibility of plans to develop heavy oil, which are found in place in much greater quantities than conventional oil;
• in Angola, Girassol, the largest deep water development in the world, was brought on stream at depths of 1,350 meters and at a distance of 150 km off the coast.

Developing New Energy Sources
In 2001, the Group took the following steps:
- increased by 20% the amount of bio-diesel fuel sold in France by adding it to diesel engine fuel;
- filed permit applications for wind farms in France at its Dunkirk manufacturing plant and in Belgium off the coast of Zeebrugge;
- established a business called Photovoltech that manufactures photovoltaic cells and panels, in partnership with Electrabel;
- established testing and development programs for the manufacture of fuel cells using high-performance polymers and for decentralized hydrogen production, in order to enhance the technical and economic performance of cells.

Improving the Products and their Use
When developing new products, the Group takes their life cycle into account, from production to use by the customer, in order to make strategic, technical and commercial choices. This approach is especially relevant when it comes to the chemical materials used in housing or automobile manufacturing, asphalt and lubricants, engine and other fuels. The design and implementation of manufacturing processes include energy and raw materials management, as well as the recycling of used materials.

Making the Business a Part of Community Life
For the past several years in France, in the regions in which it operates, the Group has been working with local communities to foster economic ties and forge agreements with special emphasis on small and medium-sized businesses. This approach can take four forms: sharing of know-how and technology possessed by the Group; international development assistance in the countries in which the Group is active; assistance with industrial rehabilitation and redeployment; financial assistance with business recovery or creation. This program has been in operation for two and a half years and has been instrumental in creating or saving 950 jobs. In the international arena, TotalFinaElf is taking part in a number of development programs in the areas of economic assistance, health care and education. In this area, for example, the Group takes keen interest in the sustainable development of the large river deltas, which are often petroleum prospecting areas, as major oil and gas fields originate in those river beds. These are sensitive areas where animal and plant species thrive. Access is difficult, which has delayed the economic development of these areas. TotalFinaElf holds petroleum permits in the deltas of the Niger River in Nigeria and the Mahakam River in Indonesia. It has been instrumental in opening up these areas and in promoting non-oil related activities. It is carrying out major socio-economic programs in support of local development and seeking a balance between oil and related activities such as livestock and marine farms, on the one hand, and natural resources (water, forests, animal and plant species), on the other hand. These programs include major social components such as hygiene, healthcare and education.

Minimizing the Impact of our Activities on the Environment
Sensitivity to environmental issues is nothing new to the companies in the Group, allowing us to meet public expectations and to pursue our activities with the least possible impact on the environment. Environmentally sound management is being combined with technology to better control the impact of the Group's activities on fresh water resources, oceans and the soil, and to provide for environmental protection and health in the life cycle of its products.

Controlling Greenhouse Gases
The Group is intent on doing its part in the global effort to control greenhouse gases, both by pursuing internal policies to reduce emissions of each operating unit and by offering more efficient products in this area. From 1990 to 2000, TotalFinaElf reduced its emissions by 10%. This means an annual reduction of seven million tons of greenhouse gases released into the atmosphere. This result was achieved despite a notable increase in production. In keeping with the Kyoto message on climate change, the Group will continue its efforts to achieve voluntary emissions reduction objectives.

Managing Industrial Waste and Rehabilitating Sites
TotalFinaElf plants process a wide variety of wastes, and there is a large number of related businesses and service-providers on the market. Recycling is always the top priority whenever feasible. To assist subsidiaries in making the right choice, the Group has produced an IWM (Industrial Waste Management) database for its production sites in France, which is a genuine real-time management tool. They can use it to consult the European catalog, to share and compare choices of methods, service-providers and waste processing costs.

The Group has made an inventory of its industrial sites in order to evaluate the nature and extent of any rehabilitation work to be performed. At the same time, it is working with public research laboratories to conduct research on soil rehabilitation methods. Several new avenues are being explored, such as phytoremediation, natural abatement and reactive barriers. Offshore, the end of the life of oil fields and the future of declassified facilities is an on-going concern at TotalFinaElf. Its Norwegian subsidiary in particular conferred widely with the parties affected before drafting its plan to shut-down the Frigg field.

The 2001 Environment and Safety Report is available on request from the Corporate Communications Division and by logging on to www.totalfinaelf.com



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