Annual Report 2004 33
through: a comprehensive
Environmental Health and
Safety Management System
based on Australian Standard
4801 and International
Standard 14001;
environmental and safety
committees at Board and
management levels; the
retention of specialist
environmental and safety staff
and advisors; regular internal
and external environmental
and safety audits; and
imposing environmental care
and safety accountability as
line management
responsibilities. The role of
the Environmental and Safety
Committee is documented in a
Charter, approved by the
Board. The current members of
the Environmental and Safety
Committee are: Mr S Gerlach
(Chairman), Mr P C Barnett, Mr
M A O’Leary and Mr J C Ellice-
Flint.
• MANAGEMENT OF
EXPLORATION RISK –
exploration risk is managed
through internal control
systems which include:
formalised risk assessment
procedures at the functional
level; corporate review in both
prospect and hindsight; Board
approval of exploration
budgets; and regular reporting
on progress to the Board.
External reviews are also
undertaken as necessary.
• INVESTMENT APPRAISAL – the
Company has clearly defined
procedures for capital
expenditure. These include:
annual budgets; detailed
appraisal and review
procedures; levels of authority;
and due diligence
requirements where assets are
being acquired.
• FINANCIAL REPORTING – 
a comprehensive budgeting
system exists with an annual
budget approved by the Board.
Monthly actual results are
reported against budget and,
where applicable, revised
forecasts for the year are
prepared and reported to the
Board. Speculative
transactions are prohibited.
Further details relating to
financial instruments and
commodity price risk
management are included in
Note 32 of the Financial
Statements.
• FUNCTIONAL REPORTING – 
all significant areas of
Company operations are
subject to regular reporting 
to the Board. The Board
receives regular reports on 
the performance of each
functional area, including:
operations; gas marketing 
and commercialisation; liquids
marketing; corporate and
people; legal and secretariat;
geoscience, exploration and
new ventures; development
and technical services;
finance; safety; government;
investor relations and
environmental matters.
9. ETHICAL STANDARDS AND
CODE OF CONDUCT
To promote high standards of
corporate governance and ethical
conduct the Company has
provided its employees with a
clear set of rules, values and
guidelines to follow when
carrying out their work as a
Santos employee and
representative. In addition to the
Board Guidelines, the Company
has adopted a Code of Conduct
which prescribes that, in
addition to compliance with all
applicable legal requirements,
the Board expects all Directors,
executives and employees of the
Company to adopt appropriate
standards of professional and
business conduct in their
dealings on behalf of the
Company. In addition, the Board,
in conjunction with executive
management, has implemented
procedures designed to ensure
compliance by all employees
with those standards.
In particular, the Code of
Conduct requires that Directors
and employees:
• avoid conflicts of interest, and
ensure that all business
transactions are conducted
solely in the best interests of
the Company;
• are aware of, and comply with
laws and regulations relevant
to the Company’s operations
including environmental and
trade laws both in Australia
and abroad;
• protect any Company assets
under their control and not
use Company assets for
personal purposes, without
prior Company approval;
• do not disclose or use in any
improper manner confidential
information about the
Company, its customers or
affairs; and
• respect the privacy of others
and comply with the
Company’s Privacy Policy.
The standards of conduct
expected of Santos staff,
including those directed at the
broader stakeholder constituency
of shareholders, employees,
customers and the community,
are also recorded in separate
guidelines and policies relating
to dealing in securities (refer