Social 2006 ing

social and
environmental
report 2006

“We believe the climate is very
important, because drought ruins
AnA MAriA Alves de souzA
Farm worker in castor bean and

the plantation. By making biodiesel,
bean crops in the Family Agriculture
Production and Marketing

Petrobras is helping to take care of the
Cooperative of Bahia (Coopaf)
— Morro do Chapéu, Bahia State

environment and improve our region.
I hope that Coopaf continues.”
outlook: A better future for me
and my children.

summary

06
Message from the CEO 02

Petrobras
The Petrobras profile 08
Performance in 2006 13

20
Key indicators 18

social and environmental
report
Commitments and strategies 22

30
Methodology 28

Human rights
PrinCiPle 1 Businesses should support and respect the
protection of internationally proclaimed human rights 32
PrinCiPle 2 Businesses should make sure they are not
complicit in human rights abuses 53

56 labor standards
PrinCiPle 3 Businesses should uphold the freedom of
association and the effective recognition of the right to
collective bargaining 68
PrinCiPle 4 Businesses should uphold the elimination of
all forms of forced and compulsory labor 72
PrinCiPle 5 Businesses should uphold the effective
abolition of child labor 74
PrinCiPle 6 Businesses should uphold the elimination
of discrimination in respect of employment and
occupation 77

84 environment
PrinCiPle 7 Businesses should support a precautionary
approach to environmental challenges 86
PrinCiPle 8 Businesses should undertake initiatives to
promote greater environmental responsibility
PrinCiPle 9 Businesses should encourage the
98
development and diffusion of environmentally friendly

118
technologies 116

transparency
PrinCiPle 10 Businesses should work against corruption
in all its forms 120

“Large and small challenges are the
José sergio gAbrielli de Azevedo drives for the Company’s dynamism
and for all its achievements. They offer
CEO of Petrobras

opportunities to change a certain scenario,
outlook: To contribute to
the sustainable growth of

build a better world.”
Petrobras and Brazil, always respecting
people and the environment.

| SOCial and EnvirOnMEnTal rEPOrT 2006 | PETrOBraS

Message
from the CEO

P
etrobras closed the year of 2006 with major achieve-
ments. They were milestones, such as the highest
profit in any corporation in Latin America, along-
side the achievements in the field of social and environmental
responsibility.
This positive performance is an evidence of the right strategies
adopted, always with the objective of improving the quality of its
products and services and also promoting an ethical management,
transparent and with respect for the environment and the various
stakeholders with which Petrobras relates. It is worth mentioning
that nothing would be possible without the joint effort of the entire
Company striving for excellence with sustainability.
Petrobras has played its social and environmental role on
the basis of the ten principles of the UN Global Compact since
2003. Accordingly, it actively participates in the dissemination of
these values in the business world, by believing that sustainable
development needs the contribution of the different segments of
society and, of course, community participation. Moreover, last
year, we strengthened our position by becoming a member of the
Global Compact council and joining the World Business Council
for Sustainable Development (WBCSD).

***
two other achievements, the results of dedication to be
aligned with international social and environmental responsibil-
ity standards, made the Company even prouder: the admission to
the Dow Jones Sustainability Index (DJSI) and to São Paulo Stock
Exchange (Bovespa) Corporate Sustainability Index (ISE). These
indices are a parameter for investors to be able to analyze the
economic, social and environmental issues. With them Petrobras
is now recognized as one of the world’s 13 oil and gas majors and
one of the most sustainable Brazilian companies.

www.petrobras.com.br | SOCial and EnvirOnMEnTal rEPOrT 2006 |

Message from the CEO

In its commitment to
developing society,
the investment
In its ongoing search to promote internal diversity, Petrobras in cultural,
signed an agreement for equal treatment between men and environmental,
women. Through the Gender Commission, the Company vol- social and sport
untarily joined the federal government For Gender Equality projects was
Program, which aims to adopt people management policies that significant, totaling
valorize gender equality. Due to the good progress of projects on more than r$ 591
this issue, in December 2006 Petrobras was awarded the “For million. From this
Gender Equality Seal” by the Special Secretariat for Women’s value comes the
Policies. That same month the Commission was then structured transfer to the Fund
as the Diversity Commission to extend its working scope. for Childhood and
Adolescence, around
*** R$ 48 million of which
in its commitment to development of society, its investment would be invested
in cultural, environmental, social and sports projects was significant, during 2007 in child
totaling more than R$ 591 million. This figure includes the transfer and adolescent
to the Fund for Childhood and Adolescence, in which around R$ 48 protection projects
million will be invested during 2007 in projects to protect the child in social or personal
and adolescent in a social or personal risk situation. situations of risk.
In 2006 alone, 742 projects were sponsored through the
Petrobras Zero Hunger Program, with investments of more than
R$ 176 million. Since 2003, when the program was created, 2,058
projects and 18,035 partnerships were based on multi-institu-
tional aspects and the leading social role of citizens, always along
the lines of education and professional eligibility of the young and
adults, job and income generation, and guarantee of the rights of
the child and adolescent.
Environmental actions were also taken in a cascade effect.
The vast list starts with the development of cleaner fuels, namely
Podium diesel, which demonstrates the Company’s commitment
to invest in preserving the environment. The International Seminar
on Carbon Capture and Climate Change in the Company’s head
office was a major event that attracted companies and the scien-


tific community from 17 countries in search of solutions to reduce
to a minimum the atmospheric greenhouse gas emissions, such
as geological carbon sequestration, for example.

***
Another outstanding project in 2006 was the H-Bio
refining process, successfully tested on a pilot scale. It consists
of producing diesel by mixing a part of vegetable or animal oil with
petroleum byproducts during the refining process. This results in
a less polluting fuel with lower sulfur content.
The Company has also been producing biodiesel from veg-
etable oils, directly from the castor bean or Brazilian oil seeds.
Research in the biofuel area promises positive impacts, including
the social and economic development of the rural areas of Brazil.
In association with incentive programs for family agriculture, they
could generate more work and income when combined with sub-
sistence farming already existing in these communities.
The following pages of this Social and Environmental Report
will show the major achievements in 2006 that confirm that the
work over the past few years has produced positive results for the
Company, society and the environment. And it is with great pride
and admiration that I present it to you.

José sergio gAbrielli de Azevedo
CEO, Petrobras

Chico Mendes
robot, monitoring
the Amazon
environment


JuliAne CAetAno vAlerio silvA “Petrobras invests in developing new
Operator, Engineering and Operation
area of Cenpes pilot-projects technologies and looks for new energy
– Rio de Janeiro State
sources, without forgetting sustainable
outlook: To believe that a better
country is possible. development and social responsibility.”


Petrobras

The year 2006 was a landmark for Brazil when it achieved petroleum self-sufficiency.
It was also the year when Petrobras, known worldwide for its excellence in producing
oil, natural gas and byproducts, joined the select list of companies in the Dow Jones
Sustainability Index (DJSI), the top world index for assessing corporate performance
relating to social and environmental responsibility. Its best ever profit of R$ 25.9 bil-
lion, around 9% more than 2005, was the highest among Latin American business
corporations. With results that confirm that the strategies were the right ones, 2006
beat many other records, such as the investment of R$ 33.69 billion, 31% up from the
previous year’s R$ 25.71 billion. Petrobras is leader in the Latin American energy sector
and achieved the necessary conditions to increase investments, with focus on biofu-
els and further marketing of ethanol. In the field of affirmative actions, the Company
increased women’s participation in every area of its business — a 30.7% growth in
its employees compared to the female employees in 2005 — and was awarded the
2007 For Gender Equality Seal.


Petrobras
PROFILE

An integrated
energy corporation
Petrobras was founded in brazil in 1953 and is today
a listed comPany oPerating on an integrated and
sPecialized basis in the oil, gas and energy sector,
including research and develoPment, Production,
refining, trade, transPortation and distribution.
it ParticiPates directly or through its overseas
subsidiaries in international trade of Petroleum
and byProducts, Performing well in major world-
wide stock exchanges. two of the comPany’s
toP brands and Products worth mentioning are
Podium fuel and lubrax lubes.
Petrobras is managed by a board of directors with a decision-
making role and by an executive board. The board of directors con-
sists of nine members elected by the General Shareholders’ Meeting,
responsible for guidance and senior management of the Company,
while the executive board consists of the CEO and its six directors
elected by the board of directors.
Only one of the members of the board of directors — the
Company CEO — has an executive position in Petrobras. Since
1999, the chairman of the board of directors has been a member
with no executive functions or any other ties to Petrobras. In addi-
tion to the board of directors, Petrobras has a permanent statutory
audit committee, consisting of five members also elected by the
Shareholders’ General Meeting, and responsible, among other
duties, for supervising the acts of the administrators and examin-
ing the financial statements.
Merluza 1 platform
In the Company’s internal culture, values include questions – santos basin, são Paulo state
such as stakeholder involvement, entrepreneurship and over-


Petrobras | PrOfilE
COMMITTEd TO
nEW TIMES

Mission
To perform in a safe and profitable
manner, with social and environmental
responsibility, in the oil, gas and energy
industry, in domestic and international
markets, providing goods and ser-
vices that meet its customers’ needs
and contribute toward the develop-
ment of Brazil and countries where the
Company operates.

outlook
Petrobras will be an integrated energy
company with strong international pres-
ence and a leader in Latin America, focus-
ing on profitability and on social and
environmental responsibility.

CorPorAte strAtegy
To become leader in the Latin American
oil, natural gas, byproduct and biofuel
market, operating as an integrated energy
Company with selective growth in petro-
chemicals, renewable energy and interna-
tional activity.


MAnAgeMent
CoMMittees
k Information technology
k Downstream
k Exploration Production
k Gas Energy
k Human Resources
k Health, Safety Environment (HSE)
Petrobras | PrOfilE

k Organization and Management Analysis
k Internal Controls
k Risks
k Petrobras Technology
k Social and Environmental Responsibility
k Marketing and Brands

coming challenges, striving for leadership, competitiveness and directors must do an annual self-assessment on its performance in
technological skills, in addition to focusing on achieving excel- order to continuously improve. The board must also under a six-
lent results. The principles include business ethics, decent labor monthly assessment of the performance of the CEO and directors
and cooperation, follow-up of results and anti-corruption. These to ensure that the role of the executive board members is in line
principles are expressed in the Company’s code of ethics, the with the long-term objectives of the shareholders.
document that ratifies the commitment of Petrobras and guides The corporate governance guidelines also include the skills
its internal public relations. and experience expected of the directors, such as personal integrity,
Some of the corporate policies are Corporate Performance, no conflicts of interest, time availability, motivation, affinity with
Capital Discipline, New Business Development, Communication, company values, familiarity with the best corporate governance
Human Resources, Health, Safety and Environment (HSE) and practices, experience as a top executive, knowledge of the energy
Telecommunications. sector, and strategic vision, for example. Petrobras has the Good
Practices Code, which guides the conduct of the senior officers and
CorPorAte governAnCe members of the Petrobras top management, in order to prevent
The role of Petrobras and its growing participation in the inter- conflicts of interest and the occurrence of any situation that may
nal and external markets, have been accompanied by significant affect its business and operations.
improvement in the quality of Petrobras administration, prin- Petrobras bylaws set limits for the relationship between remu-
cipally with regard to its corporate governance model, which is neration of the directors of the Board and of the Fiscal Council, and
being enhanced since the deregulation process of the oil sector requires a statement of remuneration paid to the members when
in Brazil and since the Company went public. So the adoption by rendering the Company’s annual accounts.
Petrobras of the best corporate governance practices enabled it The highest remuneration in 2006 among the senior execu-
to be in line with the rules of the American Sarbanes-Oxley Act tives was R$ 45.315,45 (December-based). Each year its directors
(SOX) that covers the companies listed in the New York Stock and all employees in Petrobras receive, in addition to their fixed
Exchange, causing a positive impact on the capital market and salary, profit and income sharing (PLR), whose value is bargained
contributing to strengthening the Company. with employee representatives and linked to the achievement of
The governance model adopted also provided the creation business goals. The registered results reinforce the commitments
of management committees made up of the Company’s executive to social and environmental responsibility, groundbreaking tech-
managers. These committees act as forums for a more mature and nology and management excellence. They also consolidate the
in-depth approach to the most relevant topics and for structur- corporate governance policy, guaranteeing the protection of the
ing the information to the business committee that furthers align- shareholders and other stakeholders. +
ment between business development and company administration,
according to the guidelines of the 2015 Petrobras Strategic Plan.
The corporate governance guidelines state that the board of

10 | SOCial and EnvirOnMEnTal rEPOrT 2006 | PETrOBraS

Petrobras Organization Model

Petrobras | profilE

Improvement of the
organIzatIonal structure

The Petrobras organization model, approved by the board Exploration and Production business unit. Reassessments
of directors in October 2000 is being constantly stream- were, moreover, made on the organizational and manage-
lined to adapt to the Company’s Strategic Plan. Changes ment model of the Worldwide Business area and on some
in the structure resulted, for example, in reorganizing the structures of business units abroad, as well as implementing
Gas and Energy business area and creating the Santos Basin a new organizational structure for the Finance area.

www.petrobras.com.br | Social and EnvironmEntal rEport 2006 | 11

Petrobras | PrOfilE

Fueling an aircraft at tom
Jobim international airport
– rio de Janeiro state

ThE PETROBRAS BRAnd

The growing internationalization of Petrobras as it joins new services at the points of sale and so on.
business segments and increases the competition in certain The value of the Petrobras Brand, estimated and pub-
sectors has led the Company to streamline and introduce new licly announced by Interbrand, was US$ 554 million in 2005.
management processes of the Petrobras brand, considered to Interbrand is an international consulting firm specializing in
be a strategic asset. brand research as a basis for the “World’s 100 Most Valuable
The assessment and direction of the Company’s key Brands” ranking. This figure should only be a reference, since
strategic issues have the participation of a Marketing and it is an independent study that is based on the Company’s
Brand Committee and a Brand Commission subordinated to public information.
the former. The new processes also involved the creation of Petrobras won the Folha Top of Mind award in the fuel
global-focusing product brands, interacting with the different category for the third year running. In 2006, 5,333 consum-
business areas involved, reinforcing the definition of the brand ers were interviewed in 127 counties all over Brazil and the
strategy and its implementation. The Company strategy for Petrobras brand had most recall by the consumers inter-
brand registration and protection has also improved against viewed by the Datafolha Institute.
undue use. Petrobras Distribuidora commissioned Focus Institute
Petrobras is developing the Corporate Image Monitoring for a survey in July to assess its image with customers who fill
System (Sismico) based on a quantitative study involving their cars up at its service stations. The result shows Petrobras
company stakeholders in order to evaluate the perception as the consumer’s favorite banner in 11 Brazilian cities in the
of its image, follow up the evolution of the Brand in order to survey, with 40.6% interviewee reference — in December
constantly improve the corporate strategy. 2004 this percentage was 36.4%.
The Petrobras Brand received R$ 723.406.185,10 dur- Another survey carried out by Petrobras
ing the year for communication investments in advertising, Distribuidora, also in partnership with Focus Institute,
cultural and sports sponsorships, events in Brazil and abroad assessed brand loyalty. The Petrobras customer satisfac-
— and for the development and management of the Brand tion survey at urban Petrobras service stations certified
itself. This value does not correspond to the actual total by the “Watching the Fuel” program produced significant
expenditure and is considered only the minimum invested, results. The total of liquid fuel consumers (excluding
since there are other numerous investments in the Brand, vehicle natural gas) considered in favor of and loyal to the
such as: opening new Petrobras service stations, enhancing Petrobras Brand was 78.9%.


Petrobras
PERFORMANCE IN 2006

A landmark year ilha redonda
shipping
terminal
— guanabara
Petrobras has reached new milestones in 2006, a bay, rio de
Janeiro state
result influenced by economic variables in brazil
and abroad. the year was marked by a break in the
uPward trend of oil Prices on the international
market, which began in 2002. although the brent
barrel was us$78.63 in august, Prices droPPed 25% at
the end of the year. on average, the value of the
barrel was us$11 higher than the Previous year. the
increased demand for energy sources, esPecially
Petroleum, was linked to soaring growth rates of
the major world economic centers, causing Posi-
tive externalities on latin american economies.
The USA economy grew 3.3%, the European Union 3.4%;
Japan 2.2%, completing seven years running of positive growth; and
in China — the new booster of the world economy — 10.7%, achiev-
ing over 10% for three years running. These significant growth
rates helped increase the international reserves of the developing
countries and improve their current account balances.
The fair winds of the world economy were reflected in the
Brazilian trade balance. The balance was US$ 46 billion for the
year, the result of exports of US$ 137 billion and imports of US$ 91
billion — an increase of 16% and 24%, respectively, compared to
the same period the year before.
The positive atmosphere also helped reduce the Brazil-Risk,
which closed the year 36% lower than in 2005. The favorable inter-
nal and external economic conjunctures culminated in an increase
in the Gross Domestic Product (GDP), which was 2.9% in 2006,
boosted by an increased domestic consumer demand for durable
goods. Cattle-raising and industrial sectors had above-average rises

www.petrobras.com.br | SOCial and EnvirOnMEnTal rEPOrT 2006 | 1

33.7
Petrobras | PErfOrManCE in 2006

billion
REAIS OF InvESTMEnT
In ThE yEAR, 31% MORE ThAn
ThAT InvESTEd In 2005

of 3.2% and 3%, respectively. The highlight in the primary sectors
was agribusiness, namely sugarcane, the feedstock for ethanol.
The year was also marked by a significant growth in the
world economy that reflected positively on the economic variables
of the developing countries, namely Brazil. Petrobras had some
of its best ever records at the year end with regard to increased
demand and world expansion and to the rise in commodity prices
especially petroleum.

MArket vAlue uP 33%
Rated by the Petroleum Intelligence Weekly (PIW) — a publica-
tion specializing in annual rankings in the oil and gas sector — as
the world’s 14th largest corporation in the sector, Petrobras had a
record net income of R$ 25.9 billion and cash earnings (EBITDA)
of R$ 52.1 billion, which assured resources for investment of
R$ 33.7 billion, 31% more than invested in 2005.
The Company had a consolidated net operating income of
R$ 158,239 billion for the year, 16% more than the R$ 136,605 bil-
lion the year before. But it was through its investments in Research
and Development (RD) that the Company conveyed its future
outlook as an integrated energy Company, with prospects that
will strengthen its presence worldwide. In this area, the Company
almost doubled its invested resources, soaring from R$ 935 mil-
lion in 2005 to R$ 1.58 billion in 2006.
At the end of 2006, the market value of Petrobras increased
R$ 230.4 billion, representing 33% up from the R$ 173.6 billion
in 2005. The equity valor was R$ 97.6 billion, a 24% increase over
the R$ 78.8 billion for the same period the previous year.
The Company’s total oil and gas production increased 4%
against 2005, reaching 2,297,000 barrels of oil equivalent a day
(boed). Despite the drop in production in the international area
due to contract amendments in Venezuela, the Company had a rise


the P-52 module
under construction
– Angra dos reis,
rio de Janeiro state
COMPERJ And
ThE nORThEAST
REFInERy

The Rio de Janeiro Petrochemical Complex (Comperj) to
be built in Itaboraí municipality, is a major economic and
social project. Its purpose is to process national heavy
crude and produce in Brazil the currently imported pet-
rochemical inputs. With expected investments of US$ 8.3
billion, the project will generate jobs and create a social
infrastructure and conditions for the region to be able to
sustain local development. It is estimated that during the
works 212,000 direct and indirect jobs will be generated,
plus 200,000 places when implementing the second-gen-
eration plants.
The construction of Comperj is also important
because of the production of petrochemical inputs not
only for power generation but also in everyday products for
the Brazilian population.
The joint venture between the Venezuelan national oil
company PDVSA and Petrobras together with the Abreu e
Lima Refinery, also known as the northeast Refinery, will be
built in Pernambuco with a processing capacity of 200,000
bpd heavy crude from both countries. With a budget of
US$ 2.8 billion, the refinery should generate approximately
230,000 direct, indirect and income-effect jobs while under
construction and 1,500 jobs when operating.
The enterprise is expected to start operating in the
second half of 2011, with the main objective to meet the
growing demand for byproducts in Northeast Brazil. The
Company seeks to increase diesel fuel and LPG (lique-
fied petroleum gas) production and thereby reduce
these fuel imports.



Petrobras office
in nigeria

in its consolidated total. In the Exploration and Production area, and management excellence of Petrobras. With investments of
the highlights were the start up of the P-50 — a milestone in the R$ 7.161 billion in the international area in 2006, the Company
achievement of Brazil’s self-sufficiency in petroleum —, and the has a large share of the operating chain of the Latin American oil,
P-34, both in the Campos Basin, and the Capixaba FPSOs (Floating natural gas and power industry, while at the same time extends its
Production Storage and Offloading) in the Espirito Santo Basin, as participation in projects to North America, Africa and Asia.
well as finding significant light oil reserves in Santos Basin. In the 18 countries where Petrobras is present, it consoli-
In 2006 Petrobras also registered a 3% rise in its byproduct dates its position as an international integrated energy com-
production, with 1.9 million barrels processed a day. The net pany. The activities cover oil and gas exploration and produc-
petroleum and byproduct exports were 93,000 barrels a day (bpd), tion in Argentina, Angola, Bolivia, Colombia, Ecuador, Equatorial
a 21% increase in relation to 2005. Guinea, Iran, Libya, Mexico, Mozambique, Nigeria, Paraguay, Peru,
In June, the Company started work on the Urucu-Manaus Tanzania, Turkey, Uruguay, USA and Venezuela.
gas pipeline, which will extend for around 670 kilometers and In 2006 the Company began operating in the US refining
will carry the natural gas from the oil bearing province of Urucu sector when it acquired 50% of the Pasadena Refinery belonging
to the Amazon capital in North Brazil. The project is responsible to Astra Oil company, subsidiary of the Belgian group Compagnie
for generating around 3,400 direct and 10,000 indirect jobs and Nationale a Portefeuille S.A., with an investment of around
should be completed in March 2008. US$ 360 million. In international refining, the goal is to extend
In June the extraordinary shareholders’ meeting approved operations by investing in expansion and conversion of this refin-
the operation where Petrobras incorporated the shares of Petrobras ery and prospecting others abroad. The aim is to offer the market
Química (Petroquisa), increasing the total number of Petrobras a package of more value added and better quality products.
shares (ON and PN) from 4,386,151,700 to 4,387,038,370. In Paraguay, the Company joined the byproduct distribu-
December saw the launching of Podium Diesel, with fewer tion segment equipped with a network of 131 service stations
particle and smoke emissions and a sulfur content of 200 parts and 45 convenience stores, after taking over Shell assets. Annual
per million. The fuel gives a better performance and allows faster product sales are around 317,000m3. Some of the assets acquired
overtaking for safer driving. are facilities for the sale of liquefied petroleum gas (LPG) and
A new diesel fuel production process was also announced in aviation products.
2006 called H-Bio, obtained from processing vegetable oil mixed In Uruguay, Petrobras is now involved in byproduct distri-
with mineral oil in the Petrobras refineries, resulting in a more bution, taking over 89 services stations also from the purchase
efficient and cleaner fuel, with less sulfur content. of Shell assets, with sales of 330,000 m3 a year, trading asphalt,
bunkering and aviation products. It also distributes natural gas in
WorldWide groWtH Montevideo and upcountry, with total trading of 120,000 m3 a day.
Increased international activities have been a decisive factor in the In Chile, Petrobras continues to prospect business opportunities
recognition of the high operating standard, technological advance and its annual Lubrax lube sales for 2006 were 848 m3.


Petrobras participates in a large part
of the operations chain of the oil,
natural gas and energy industry in Latin
America — and increases its share
in the projects in north America,
Africa and Asia.

Also in 2006 Petrobras acquired exploratory blocks in
Turkey and Mozambique. In Turkey, it became a partner with
the Turkish national oil company TPAO for exploration and pro-
duction in two blocks with potentially large reserves in the Black
Sea. In Mozambique, it has interests in the offshore area of the
Zambezi Delta block.
In October, the Company signed an agreement with

12.1
Yacimientos Petrolíferos Fiscales Bolivianos (YPFB), under which
it continues to be responsible for operations in the San Alberto
and San Antonio fields, while YPFB plays a stronger role in the
trade of the hydrocarbon products. Current assets still belong to
Petrobras until the end of the contract (30 years), when they will
then be transferred to YPFB.

internAtionAlizAtion goAls
billion
dOLLARS ExPECTEd TO BE
International strategies include operating in new areas with major
InvESTEd In ThE 2007-2011
Exploration and Product (EP) potential, internationalization
and valorization of the Petrobras brand, and extending the down- BuSInESS PLAn FOR ThE
stream activity in profitable and growth potential markets. The InTERnATIOnAL AREA
Company estimates investments abroad to be US$ 12.1 billion
in the 2007-2011 Business Plan. Some of the internationalization
goals worth mentioning, with focus on further production in the
Gulf of Mexico and Nigeria, are the production of 383,000 bpd of
oil and Liquified natural gas (LNG) and 185,000 boed of natural
gas. Also for 2011, it is expected to have 499,000 bpd of processed
load in refineries abroad.
The 2015 forecast for international production is 742,000 bpd
of oil and LNG and 278,000 boed of natural gas. The inclusion of
natural gas reserves and LNG in the market are some of the many
strategic actions planned to consolidate these achievements. +


Petrobras
MAIN INDICATORS

Added vAlue sTATemeNT
Net Income (R$ million) 25,919
For years ending december 00 and 00 (in million reais)
Investments in Research Development (RD) 1,580 00 00
(R$ million)
description
Dividends distributed to investors (R$ million) 7,897 Sales of products and services and non-operational 206,285 179,391
result *
Tax contributions (R$ million) 54,730 Raw materials consumed (10,018) (4,004)
Products for resale (45,862) (36,104)
rSubtotal – Brazil (R$ million) 50,944 Materials, energy, services and other (22,597) (23,594)
Economic contribution – abroad
r 3,786
Generated added value 1,0 11,
(R$ million) Depreciation and amortization (9,823) (8,035)
Wages charges (R$ million) 10,395 Holding in associated companies and positive and (233) (250)
negative goodwill
Financial revenue 2,388 239
Total outsourcees 176,810
Rent and royalties 555 598
Total added value to be distributed 10. 10.1
Workers distribution of added value
Number of employees per country or region Personnel
Brazil – Petrobras Holding , Wages, benefits and charges 10,395 9,643
North 1,160 10,395 9,643
Northeast 11,978 Government agencies
Central west 87 Tax, levies and contributions 54,730 49,336
South 1,673 Government holdings 17,311 14,474
Southeast 33,057 72,041 63,810
Brazil – subsidiaries (total value) , Financial institutions and suppliers
Countries in international area Interest, exchange and monetary variations 3,720 4,915
Angola 15 Rent and charter expenses 7,164 5,158
Paraguay 116 10,884 10,073
Uruguay 284 Share of non-controlling shareholders 1,593 1,023
Argentina 5,128 shareholders
Bolivia 841 Dividends / Interest on own capital 7,897 7,018
Colombia 274 Withheld earnings 17,885 16,674
Nigeria 21 25,782 23,692
USA 164 27,375 24,715
Libya 14 distributed added value 10, 10,1
Total international area , *Net of provision for credits of doubtful settlement.
Some values relating to previous periods were reclassified to adapt to the
Total employees , statements for the current period, for easier comparison


247,580 sHAreHolders

63

Petrobras | Main indiCaTOrS
drilling rigs (42 oFFsHore)

15 billion
oF bArrels oF oil equivAlent
— reserves (sPe Criterion)(1)(2)

12,895 ProduCtion Wells(1)

103
ProduCtion PlAtForMs
reserves ANd ProduCTioN
Reserve/Production ratio in Brazil SPE criterion 19.5 years
(Society of Petroleum Engineers)

1,920,000
bArrels Per dAy oF oil And lng(1)
Reserve Replacement Index in Brazil
Oil and natural gas Reserve Life Index (RLI)
174%
14.5
Average finding and development costs (FD) in 3.44
US$/boe

378,000
bArrels Per dAy oF oil And nAturAl gAs
Percentage of proven natural gas reserves
(developed and non-developed) in relation to total
proven reserves in 2006
Percentage of natural gas production in relation to
6.04% and 9.09%,
respectively

16.44
total oil and gas production

16 reFineries
Natural gas production volume
Percentage of income with regard to LNG in relation
to total revenue *
377,700 b poe a day
0

1,892,000
Average natural gas trade (m3/day) R$ 38.7 million
Percentage of increase in average natural gas trade 7
against previous year
bArrels A dAy — reFinery yield (2) Tax incentive received by government** R$ 8,317,783.43

9,958 km
* GasLocal, joint venture between Petrobras (via Gaspetro) and White Martins
to sell LNG, started up in August 2006 and income calculated at December
2006 was R$3,053,823.30.
** Sum referring to Freight Added for Renewal of Merchant Navy Fleet.
oF PiPelines in brAzil

155
sHiPs (51 belonging to PetrobrAs)

5,870
serviCe stAtions, 638 oWned by PetrobrAs

3 Fertilizer PlAnts(¹)

(1) Includes information from abroad, corresponding to the Petrobras
share in the partnerships
(2) Proven reserves measured according to the SPE criterion (Society
of Petroleum Engineers)


“Since I joined the project I’ve had an
opportunity to visit various different
places. My life is much better both
Angelo Antonio de
CArvAlHo rodrigues from personal and professional view:
Percussion instructor and Afrolata
drummer – Rio de Janeiro State today I’m a better drummer and the
outlook: To keep drumming cachet always helps”.


Social and
Environmental Report

In 2006 Petrobras consolidated various results of its strategies focusing on environ-
mental and social responsibility, principally of those adopted since 2003 when it
signed the United Nations Global Compact. One example was the participation of the
Company CEO at the board of the Global Compact as the only representative of a Latin
American corporation. Since its Social and Environmental Report 2003, the Company
communicates its progress as a member of the Global Compact in an editorially
structured report based on the latter’s principles, including the guarantee of human
rights, respect for labor standards, environmental protection and anti-corruption. In
2006, the Social and Environmental Report 2005 was evaluated by Global Compact
directors as a notable report and example to be followed by other companies. The year
2006 was also decisive for the Management Committee for Social and Enviromental
Responsibility, engaged in more in-depth discussions, formulating new proposals
and assessing the routes taken by the Petrobras System. Emphasis was given to the
progress during the year in addressing issues such as diversity, employee and supplier
engagement in environmental and social responsibility, discussion about environmental
and social indicators for the Company’s strategic planning, and the reinforcement of
the role of the Social and Environmental Report as a management tool.


Social and Environmental Report
COMMITMENTS AND STRATEGIES

The challenges of Children from

SER management
the Upanema
community, Rio
Grande do Norte
State – Watering
the Earth project
In 2006 Petrobras maIntaIned Its commItments
toward socIal and envIronmental resPonsIbIlIty
and the strategIes towards that dIrectIon.
The main driving force in the discussion and decision
on corporate actions of social and environmental responsibil-
ity in Petrobras is the Management Committee for Social and
Environmental Responsibility, created in 2004 and consisting of
12 senior managers from different areas in the Company, plus the
Ombudsman’s office, a consultant to the CEO and directors of
subsidiaries (Petrobras Distributor, Petroquisa and Transpetro).
One of the actions taken by the Management Committee in
2006 was to widen the working scope of the Gender Commission
in November, now called Diversity Commission. This change
increases the committee’s role, in line with Company commit-
ments to recognize the principles of non-discrimination and pro-
mote equality, regardless of race, creed, social, cultural, linguistic,
political, aesthetic, age, physical, mental and psychic conditions,
gender, sexual orientation, and so on.
In addition to the Diversity Commission and working group
for indicators and certification, the Management Committee is
also responsible for the Commission for social and environmental
responsibility reports. One of the topics addressed this commis-
sion periodical meetings was the preparation of the vulnerability
map to provide support for the improvement plan on social and
environmental responsibility management.
Also worth mentioning is the role of the working group for
indicators and certification in defining the requirements of excel-
lence in SER, by analyzing the main national and international

22 | Social and EnvironmEntal rEport 2006 | pEtrobraS

Social and Environmental | commitmEntS and StratEGiES
MILLENNIUM
DEVELOPMENT GOALS
1 Eradicate extreme poverty and hunger;
2 Achieve universal primary education;
3 Promote gender equality and empower
women;
4 Reduce child mortality;
5 Improve maternal health;
6 Combat HIV/AIDS, malaria and other
diseases;
7 Ensure environmental sustainability;
8 Develop a global partnership for;
development

SER indicators, comparing them to those used by other oil and
gas majors. The outcome of the work will define in 2007 not only
the essential requirements for excellence in the SER of Petrobras,
but also the Company’s self-declaration procedure as a socially
responsible corporation.
The necessary improvements in its administration are made
by Petrobras using the management quality improvement and
assessment process, adopting the concepts and regulations in the
Petrobras Guide to Management for Excellence, consisting of the
criteria of excellence of the National Quality Prize and corporate
requirements expressed in the 2015 Petrobras Strategic Plan. This
policy involves not only economic performance but also behavior
toward the environment and society. A decision, for example, is
only adopted after careful assessment of the risks involved and
compliance with internationally agreed standards, codes of con-
duct and the principles regulating its activities.
In its constant striving to create and disseminate a socially
and environmentally responsible culture, Petrobras began the
project of management training in corporate social responsibil-
ity. The purpose of the project is to imbue in its managers values
and practices of social and environmental responsibility in line
with corporate management. The project, under an agreement
with Uniethos, seeks to present the fundamental principles of
SER, its impacts on the energy sector and its implications in the
Company’s performance in relation to risks and opportunities.
The training included the board of directors, the executive board
and the Management Committee for social and environmental
responsibility. Training will be given to the other senior officers
and general managers of the Petrobras Units in 2007. Uniethos is
an institution linked to the Ethos Institute, which focuses on edu-
cation for social responsibility and sustainable development.
Another agreement for leadership training was signed by


74

was Petrobras score at
DJSI. The average score
for the oil and gas
sector was 50.

the Company with the European Foundation for Management In the second half of the year, Petrobras began an articula-
Development (EFMD), an organization based in Brussels, with tion process to join the World Business Council for Sustainable
over 600 member organizations throughout the world. Since 2004, Development (WBCSD), an alliance of approximately 180 inter-
Petrobras has been participating in a working group supported by national companies with focus on sustainability, whose purpose is
the UN Global Compact and EFMD to perform a set of studies and to take actions for effective change worldwide, through corporate
discussions on globally responsible leadership. leadership, policies that further good practices and programs, and
The Company was chosen to develop a new methodology worldwide projects.
based on the conclusions and recommendations prepared by the As industry expert at the Brazilian delegation for the dis-
group through its corporate Petrobras University. During 2006 a cussion of ISO 26000 — future international guideline for social
series of interviews was applied to senior officers of the Company responsibility — Petrobras actively participated in meetings, study
to help build a diagnosis on the subject. After interviewing its groups and national plenary sessions held by the Brazilian mirror
leaders in Brazil and abroad, the methods prepared by Petrobras committee during the year, and also attended the 3rd International
will be available to companies and business schools linked to the ISO WGSR Meeting in Lisbon in May. In Brazil, the partnership
Global Compact or EFMD. with the Brazilian Technical Standards Association (ABNT) pro-
moted a round of seminars in five Brazilian cities — Brasilia, Rio
SUppORT fOR pRINCIpLES de Janeiro, São Paulo, Recife and Porto Alegre — to disseminate
AND INITIATIVES the Brazilian role in creating the ISO 26000.
In 2003 Petrobras signed the UN Global Compact, an initiative Petrobras occupies one of the two directorates in the
involving various institutions to foster corporate social and envi- Brazilian Corporate Council for Sustainable Development
ronmental responsibility. It is based on respect for human rights, (CEBDS), besides the vice-presidency of the institution’s corpo-
labor standards, environment, transparency and anti-corruption. rate responsibility committee. The Company also holds the vice-
The Company’s participation in the Global Compact is founded presidency of the social responsibility committee of the Brazilian
on its commitment to include these principles in its working strat- Petroleum Institute (IBP). It is a partner with Ethos Institute and
egy in the countries where it operates. the Inter-American Development Bank (BID) to disseminate social
In April 2006, Petrobras CEO José Sergio Gabrielli was and environmental responsibility in small and midsize companies
invited to join the Global Compact Board, consisting of 25 in the value chain of strategic companies. And is also a member of
members including representatives from companies, business the corporate council for social responsibility of the Firjan System
and worker associations, and other civil society organizations. — Rio de Janeiro State Federation of Industries.
Petrobras is the first Latin American Company to be a member Petrobras is a member of Arpel — Regional Association
of the group. In Brazil, the Company has been a member of the of Oil and Natural Gas Companies in Latin America and the
Brazilian Global Compact Committee since 2003 and now in 2006 Caribbean —, occupying the chair of the corporate social respon-
occupies its business vice-presidency. sibility committee and has a seat in the working group on rela-


Athlete in Mangueira
Olympic Village
– Rio de Janeiro State

INTERNATIONAL
REcOGNITION
Another landmark of the year was the Company’s admis-
sion to the Dow Jones Sustainability Index (DJSI) in
September, which rated it as one of the 13 oil and gas
majors in the world with major focus on sustainability. Its
admission to DJSI increases its access to a potential market
of investors in socially and environmentally responsible
companies, assessed by the UN at more than four trillion
dollars. Petrobras had 74 out of maximum 100 points set by
the DJSI. The average score in the oil and gas sector was 50
points. Petrobras was considered a benchmark in the fol-
lowing requisites: customer relations, brand management,
environmental performance, human resources develop-
ment and corporate citizenship. And the topics that most
increased their scores in 2006 were brand management,
transparency, social impact on communities, occupational
health and safety and spills.
In December, Petrobras joined the group of companies
whose shares comprise the Corporate Sustainability Index
(ISE) of the São Paulo stock exchange (Bovespa). The index
focuses on the degree of commitment to sustainability and
social and environmental responsibility. Petrobras com-
mon and preference shares total 25% of ISE participation.

DJSI ScORING

92

81 80 79 79
74
68 67 74
73
68
66
60 62
58
54 52
43

2002 2003 2004 2005 2006

Company score
Average score of the industry
Highest score in the industry
Lowest score in the industry for admission to DJSI



farmers in the family
Agriculture along pipelines
project – Baixada fluminense
region, Rio de Janeiro State

tions with indigenous peoples. Another worthwhile action of the meeting in Dallas (Texas, USA) in October. Paci’s mission is to
Company to guarantee the rights of children and adolescents is its develop principles and practices involving various sectors of the
partnership with the United Nations Children’s Fund (Unicef ) to industry and which result in a competitive environment based on
cooperate in low-income communities in Latin America and the integrity, equality and ethical conduct.
Caribbean. The work involves technical planning, research, com- In December, Petrobras formalized its support to the Extractive
munication and fundraising. The Company signed an agreement Industry Transparency Initiative (Eiti). The Company had already
with the Latin America Andi network to improve press coverage been participating in the meetings of the Eiti international advisory
on issues relating to the guarantee of rights of the child and ado- group since 2005, and attended the meetings in Nigeria in February
lescent in 14 Latin American countries. and in Norway in October. One of the project requirements is to show
In 2005 Petrobras signed the Partnering against Corruption the past series of government payments by Petrobras on its site on
Initiative (Paci), a joint venture against corruption. In 2006, it the Investors’ Relations page, in taxation terms.
hosted a meeting of the organization in Rio de Janeiro and was Petrobras moreover agreed to make efforts of consciousness
invited to sit on its communication committee and attend the toward climate change and identifying and adopting policies and

PRINcíPIOS DO PAcTO GLObAL

pRINCIpLE 1 Businesses should pRINCIpLE 4 Businesses should pRINCIpLE 8 Businesses should
support and respect the protection of uphold the elimination of all forms of undertake initiatives to promote greater
internationally proclaimed human rights; forced and compulsory labor; environmental responsibility;

pRINCIpLE 2 Businesses should pRINCIpLE 5 Businesses should pRINCIpLE 9 Businesses should
make sure that they are not complicit in uphold the effective abolition of child labor; encourage the development and
human rights abuses; diffusion of environmentally friendly
pRINCIpLE 6 Businesses should technologies;
pRINCIpLE 3 Businesses should uphold the elimination of discrimination in
uphold the freedom of association and respect of employment and occupation; pRINCIpLE 10 Businesses should
the effective recognition of the right to work against all forms of corruption,
collective bargaining; pRINCIpLE 7 Businesses should including extortion and bribery.
support a precautionary approach to
environmental challenges;


PETRObRAS
ASSESSED IN
measures to diminish greenhouse gas emissions when it was part INTERNATIONAL
of the Statement of G8 Climate Change Roundtable.
In late 2006, the Company became a member of the
REPORTS
International Petroleum Industry Environmental Conservation
Association (Ipieca) — a worldwide group of oil majors and busi- In addition to being included in the Dow Jones
ness associations — to further consensus and good practices for Sustainability Index and the corporate sustainability index
health, safety and environment (HSE). Ipieca discusses topics of São Paulo stock exchange (Bovespa), the social and
environmental role of Petrobras is assessed by other inter-
such as climate change, biodiversity, its response to oil spills, national reports.
health and social responsibility. Management Excellence (ME), a Spanish consult-
Petrobras supports the Millennium Development Goals and ing firm specializing in corporate ethics ratings, pointed
its operations are designed to comply with the guidelines of the Petrobras as the world’s second most sustainable oil and
gas corporation in 2006. The survey considers Petrobras
International Labor Organization (ILO). Petrobras and Petrobras to be the company that most developed in the past three
Distribuidora signed the National Pact to Eradicate Slave Labor in years, climbing to seventh place in 2005, improving its rat-
Brazil, a project by the Ethos Institute in conjunction with ILO, which ings to 89.64, less than half a point behind the top ranking.
resulted in a clause in its contracts banning the use of labor force in The ME study uses more than 386 indicators to
assess the corporate performance in ethical management,
degrading working conditions. The guidelines of the Organization for corporate social responsibility, sustainability, corporate
Economic Cooperation and Development (OECD) are being studied governance and transparency.
by the Company with a view to compliance. Although Brazil is not a In the report, Petrobras is considered outstanding in
member country of the organization, Petrobras seeks to adapt to its sustainability, top ranking in this requisite, due to the high
replacement rate of reserves and its state-of-the-art tech-
decisions and recommendations. + nology in deepwater extraction. In terms of transparency,
ME highlighted as an example the on-line procurement
system, in which suppliers are obliged to fulfill a series of
requirements of social and environmental responsibility
and governance in order to participate in bids.
In its report on sustainable investments in the energy
sector in 2005 Goldman Sachs announced in 2006 that
Petrobras ranked among the six energy Companies recom-
mended for sustainable investment.
In the assessment, the Company came first in gov-
ernance and third in future investment, also having high
ratings in the social and environmental index. Petrobras is
leader in all categories among the regional companies in
emerging markets.


Social and Environmental Report
METHODOLOGY

Building its own
model
the Petrobras socIal and envIronmental rePort Is
the maIn Instrument to render accounts to socI-
ety of the comPany’s socIal and envIronmental
Performance In the countrIes where It oPerates.
It Is PublIshed each year and aIms to dIsclose the
comPany’s actIons and PractIces durIng the year
PrIor to Its PublIcatIon. the rePort Is drafted
by the commIssIon for socIal and envIronmen-
tal resPonsIbIlIty rePorts and Is coordInated
by the InstItutIonal communIcatIon executIve
management.
The 2005 Social and Environmental Report was emphasized
by the UN Global Compact as a notable report and an example
to be followed by other companies, since it used as a reference
the ten principles of the international initiative. This recognition
contributed to reaffirming the Company’s decision to prepare the
Report based on consolidated data of the activities throughout
the Petrobras System — holding, subsidiaries and Business Units
— in the countries where it operates.
This Report model imposes the challenge to include data
from the entire operating chain of Petrobras, a corporation with
widespread influence and role in various segments of the oil, gas
and energy sector. The task of the Commission for SER Reports is
to meet the challenge of collecting and centralizing the informa- Asphalt
emulsion plant
tion from these various sources. – São José dos
Campos, São
The report’s scope is defined by five different groups of paulo State
social and environmental responsibility indicators, as follows:


Social and Environmental | mEtHodoloGY
SER 2005: ThE bEST
Of ThE cOMPANIES
IN IbOVESPA
With a 97.73% score the 2005 Petrobras Social and
Environmental Report was indicated by Management
Excellence as the best report of the 45 companies in
Ibovespa, according to the survey “Best Sustainability and
Social Responsibility Reports in 2006 in Brazil”. The survey
showed that the SER 2005 was a benchmark in the trans-
parency item, with a score of 100%.

Global Reporting Initiative (GRI); Dow Jones Sustainability nerability map is used by the Management Committee for social
Index (DJSI); Brazilian Institute of Social and Economic Analyses and environmental responsibility to identify gaps and opportuni-
(Ibase); Ethos Institute of Businesses and Social Responsibility; ties for developing and defining actions.
and sector indicators of corporate responsibility in the oil and The Petrobras Social and Environmental Report undergoes
gas sector — Ethos Institute and Brazilian Oil and Gas Institute an external analysis by means of a survey with the stakeholders,
(Ethos-IBP). Until 2005 it also used the indicators of CEBDS, including representatives of the federal government, press, NGOs,
which changed to the GRI indicators as reference in 2006. clients and suppliers, as well as undergoing an audit/review by an
In the 2006 Social and Environmental Report, the third gen- independent firm, as specified in the Indicators Matrix. Petrobras
eration of GRI indicators has been adopted, also known as G3, was one of the first companies in Brazil to hire an external com-
launched in October 2006, at the Amsterdam Global Conference pany to check and review the information in its progress reports,
on Sustainability and Transparency, of which Petrobras was mas- even in advance of the Federal Accounting Council requirements.
ter sponsor. The report, based on the Ibase model, has also became part of
The diversity of indicators contributes to a more comprehen- the set of accounting data sent to the Securities and Exchange
sive Report, incorporating topics on economic, environmental and Commission (CVM).
social aspects, including quantitative and qualitative data, in addition Four simplified versions of the Social and Environmental
to challenges, goals, results and impacts considered unfavorable. Report are launched specific for different segments of public:
This matrix of indicators provides information on the main work force, press, investors and the general public. The Report is
demands for information about social and environmental respon- published in three languages: Portuguese, Spanish and English.
sibility, and the key points on the topic for a more efficient corpo- Since 2004 Petrobras has been sponsoring and is a mem-
rate management. Since 2005, the Report has been drafted using ber of the jury of the Social Report Prize in Brazil, the purpose of
the integrated system of social responsibility indicators, designed which is to further discussion on the preparation of SER reports
to unify the data collection process throughout the Petrobras in the areas of communication, financial market, businesses and
chain of activities. The System is guided by the matrix of indica- civil society. It also sponsors the Social Report Forum together
tors and for the 2006 Report involved a network of 259 collabo- with the institutions that award the prize: Brazilian Corporate
rators from 24 areas in the Company. The result of the inquiry Communication Association (Aberje), Association of Capital
is consolidated for all the areas that responded and is included Market Investment Analysts and Professionals (Apimec), Institute
in a permanent database of Petrobras social and environmental Foundation for Corporate and Social Development (Fides), Ibase
responsibility activities. and Ethos Institute of Businesses and Social Responsibility. +
The Petrobras Social and Environmental Report is a key
improvement tool for corporate management, through the analy-
ses of the vulnerability map, a critical study of the Company’s
position evidenced in the answers to the SER indicators. The vul-


“Petrobras is concerned with our
future, giving many young people the
RINGO CASTRO DA SILVA
Student in Industrial Maintenance opportunity that they need to grow. I’ve
Electrician’s course,
Young Apprentice project already changed a lot since I started the
OUTLOOk: To have better job course. It’s very good to learn new things.
opportunities after
completing the course. I’m even helping my mother more.”


Human
Rights

PRINCIPLE 1 32
businesses should support and respect the protection
of internationally proclaimed human rights
PRINCIPLE 2 53
business should make sure they are not complicit in
human rights abuses

Wherever Petrobras operates, in Brazil or abroad, it reinforces the mechanisms con-
tributing to economic, environmental and social development, giving priority to com-
munity participation in the process. The Company operates on the basis of respect for
local cultures and identities, and fosters involvement of community leaders. In 2006,
Petrobras invested a total R$ 546.4 million in sport, cultural and social projects. This is
15% up from 2005 and reflects the Company’s ever growing commitment to contribute
toward growth and progress in society. Since the creation of the Petrobras Zero Hunger
Program (PPFZ) in 2003 it has been combining corporate efforts against poverty and
hunger, keeping its focus in 2006 on the lines of education and professional training, job
and income generation and guaranteeing the rights of the child and adolescent. In its
four years, the PPFZ has attended more than ten million people directly and indirectly
throughout Brazil, taking actions that have been helping transform the social reality of a
large part of the population, focusing on development with citizenship. During this period
more than 18,000 governmental and non-governmental partnerships have been set up
to undertake more than 2,000 projects.


Human Rights
CommunITIeS

PRinCiPlE 1 Businesses should support and respect the
protection of internationally proclaimed human rights

loCal
PaRtnERsHiPs to
REduCE Risks
The more The PeTrobras communiTy-relaTions Pro-
grams mulTiPly The more The comPany has To face
uP To new challenges. PermanenT informaTion and
communicaTion sysTems and The ParTiciPaTion of
local leaders look To reduce risks, PrevenT nega-
Tive social imPacTs and Produce PosiTive resulTs.
Different communication tools are used in the process of
community relations. Dialogue is ongoing and assessed in quan-
titative and qualitative terms. Petrobras has corporate regulation
for actions relating to health, safety and environment (HSE) with
the neighboring communities. Compliance with this regulation
defines a methodology for receiving, addressing and answering
complaints and claims, guaranteeing the effective participation of
the community at the different stages of the project, ranging from
planning and implantation to closure. Committees participate in
the process to bring together community and public authorities.
Petrobras undertakes preliminary environmental and social
impact studies, and every investment project undergoes financial,
risk, strategic feasibility, quality, health, safety and environmental
analyses. Wherever the Company operates, it respects the legal
mechanisms, namely compensation for land occupation, com-
pensation measures for future social and environmental impacts
on communities, and completion of operations, with the approval
of local authorities.
The processes and tools developed and implemented to
record the impacts of Petrobras activities in communities resulted


k Petrobras, with its focus
on social inclusion and
citizenship, continues to
provide capacity building

Human Rights | principlE 1
and professional training of
the local manpower
in the communities where it
operates, and contributes
to opening up new
opportunities on the market.

in an in-depth knowledge of local scenarios. The dialogue with
communities and the existence of a formal policy to anticipate their
claims make it possible to inform local leaders about measures to be
taken and about plans and impacts. This helps involve the commu-
nities in settling these questions. A number of other actions involve
affirming dignity, restoring citizenship, improving the quality of life,
and promoting economic and social inclusion.
In the Company’s constantly monitored Business Units,
simulated exercises for addressing emergency situations, with
community participation, contribute to furthering awareness of
possible risks. Petrobras encourages interaction among the sur-
rounding population when it demonstrates the social, economic
and environmental impacts of the projects and the measures taken,
settling doubts and receiving criticism and suggestions from the
social groups involved. The participants of talks, meetings and other
presentations are asked to complete a form to help examine the
activities. During and at the end of the construction of its projects,
Petrobras presents a satisfaction poll questionnaire, which intends
to evaluate the possible effects on the local population.
In its oil, byproduct and natural gas transportation opera-
tions, actions are taken to assess risks and reduce to the minimum
impacts on the life of the communities around the terminals and
vast pipeline network. These actions involve communication chan-
nels and environmental protection and safety procedures. The risk
communication program, for example, enables major interaction
with the communities. Risk analysis studies are used in the orga-
nized meetings, visits and investigation of local impacts.
Petrobras Mosaic project:
actions for sustainable
development of the artisan
loCal dEvEloPMEnt
fishing communities in The Petrobras Business Plan for the period 2007-2011 shows that
Campos Basin – arraial do
Cabo, Rio de Janeiro state investments of US$ 49.9 billion for projects in Brazil, namely,
66% of the total value in the country, will attend the Brazilian


Social 2006 ing

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