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Issuer profile

The Saipem Group is a world leader in the provision of engineering, procurement, project management and construction services with distinctive capabilities in the design and execution of large-scale offshore and onshore projects, and technological competences such as gas monetisation and heavy oil exploitation, with a strong international bias towards operations in remote areas, ultra-deep waters and challenging environmental conditions.
Amongst its major global competitors offering turnkey solution in the Oil&Gas industry, Saipem represents one of the most balanced groups in terms of core businesses (Onshore and Offshore, in addition to Drilling), the markets in which it operates (strong geographical diversification) and client base (major national and international oil companies).
In the Offshore and Onshore sectors Saipem enjoys a competitive position of excellence in the provision of EPICi (‘Engineering, Procurement, Installation and Construction’) and EPC (‘Engineering, Procurement and Construction’) services to the oil industry. In the Drilling sector, Saipem performs in some of the most complex areas in the oil industry (North Sea and ultra-deepwater) often creating positive synergies with Onshore and Offshore operations.
In 2010 Saipem was organised into three business units: Offshore, Onshore and Drilling. On February 10, 2011, the Board of Directors approved the reorganisation of the business units. The Onshore and Offshore Business Units have been unified with the aim of facilitating enhanced integration of the Engineering & Project Management competencies with those deriving from our strong Asset Base. The resulting single Business Unit, named ‘Engineering & Construction’, will be headed by Chief Operating Officer Pietro Varone. The Drilling Business Unit, headed by Chief Operating Officer Giuseppe Caselli, already comprises both Onshore and Offshore segments.
From a geographical standpoint, Saipem has a heavy international bias, with approximately 90% of revenues generated outwith Italy and approximately 80% outwith Europe. The global spread of its reference markets, its growth in size and the complexity of its core businesses have created the need, on the one hand, to pursue a delocalization policy of its operational hubs towards therelevant geographical areas, namely Northern Europe, West and North Africa, the Middle East, the Caspian region, South-East Asia and the Americas, and on the other, to develop, in specific areas of competence, specialised know-how at certain Group companies involved in specific operations.
Alongside the major European hubs (Milan, Paris, Fano and London), the majority of Saipem’s 36,000-strong workforce is comprised of more than 100 nationalities. The fleet vessels, the logistical bases, the construction and fabrication yards and the engineering centres in host countries are staffed by a significant number of expatriate resources from developing countries (mainly India and South-East Asia) alongside the strong local content.

Principles

Saipem undertakes to maintain and strengthen a governance system in line with international best practice and standards. The complexity of the situations in which Saipem operates, the challenges of sustainable development and the need to take into consideration the interests of all those having a legitimate interest in the corporate business (‘Stakeholders’), increase the importance of clearly defining the values and responsibilities that Saipem recognises.

Compliance with the law, regulations, statutory provisions, self-regulatory codes, ethical integrity and fairness, is a constant commitment and duty for all Saipem personnel, and characterises the conduct of Saipem’s entire organisation.

All personnel working for Saipem, without distinction and/or exceptions, are committed to observing and enforcing the aforementioned principles, within their own function and responsibilities, in addition to the values and principles in matters of transparency, energy efficiency and sustainable development, as stated by Institutions and International Conventions.

The belief of acting in Saipem’s interests cannot in any way justify the adoption of practices contravening these principles.

Business ethics

Saipem’s business and corporate activities must be carried out in a transparent, honest and fair way, in good faith, and in full compliance with competition protection rules.
Specifically, Saipem applies the OECD (Organisation for Economic Co-operation and Development) guidelines for multinationalcompanies.

Stakeholders

Saipem is committed to respecting all stakeholders with whom it interacts in business, as it believes that they are an important asset to the Company.

Labour protection and equal opportunities

Saipem respects the universally recognised core labour standards contained in the Fundamental Conventions of ILO (International Labour Organisation); it guarantees the freedom to form a union and the right of collective bargaining; it repudiates any form of forced or juvenile labour and/or discrimination. In addition, Saipem is an equal opportunity employer and guarantees its employees equal treatment based on merit.

Development of professional skills

Saipem values and promotes the development of skills and competencies of each employee in addition to team work, so that the energy and creativity of an individual can realise their full potential.

Diversity

Saipem’s business conduct is inspired by the respect it affords to cultures, religions, traditions, ethnic diversity and the communities in which it operates, and strives to preserve their biological, environmental, social, cultural and economic identities.

Cooperation

Saipem is committed to promoting the quality of life and the social and economic development of the communities in which the Group operates.

Policies

To rationalise and improve the efficiency of the body of documents that define general principles and conduct rules that must inspire all actions carried out by Saipem and its subsidiaries, and to ensure the achievement of corporate objectives, the Board of Directors has so far approved the following Policies:
- Our people
- Our Partners in the value chain
- Global Compliance
- Corporate Governance
- Operational Excellence
- Our Institutional Partners
- Information Management Specifically, the first Policy deals with the importance of the human factor, the culture of plurality, the valourisation of people, the knowledge and training systems, remuneration, communication and organisational well-being; the second Policy, the promotion of long-term relations, client satisfaction, the selection process (control chain) and the competition; the third Policy, compliance, effectiveness of compliance regulations and continuous improvement; the fourth Policy, integrity and transparency, the practice of excellence, the system of control, direction and co-ordination; the fifth Policy, the culture and achievement of operational excellence; the sixth Policy, the promotion of long-term relations; the seventh Policy, information, IT systems and communication.

Health and Safety

Saipem ensures the highest health and safety standards for its employees and those of its subcontractors in all geographical areas of operations, and faces all challenges by applying a new safety vision: ‘to be winners through passion for Health and Safety’. The rationale behind this health and safety vision is that being safe equates to being more efficient in terms of business performance. In 2007, Saipem began implementing an innovative and interactive safety programme called Leadership in Health and Safety - LiHS, aimed at creating a strong safety culture throughout the Company by turning its leaders into safety leaders. A series of LiHS workshops were held involving the Company’s management, and tools were created for self-development, namely questionnaires posted on the Company website, safety guidelines for structured communication, films, publications and documents endorsed by members of the Board of Directors. In September 2010, the ‘LiHS’ (Leadership in Health and Safety) Foundation was set up to further strengthen health and safety initiatives. The Foundation is currently awaiting juridical recognition.
With the aim of becoming a global knowledge centre, the Foundation promotes studies, research, training, information and  propagation of health and safety material, contributing to thegrowth in ‘culture and awareness of health and safety at work’, which could also extend into the social milieu, and in particular into both the Italian and international Oil&Gas industrial worlds.
Saipem’s Health and Safety system complies with both international standards and the strictest legislations. This ensures the structured management of health and safety issues for Saipem’s employees through health protocols, training and audits.

Environmental protection

Saipem is committed to protecting the environment and ecosystems interested by its business operations, through the  implementation of a management system which complies with best international safety standards. Saipem has also adopted procedures to ensure compliance in terms of environmental legislation, with specific reference to waste disposal, discharges, atmospheric emissions and reinstatement.

The Code of Ethics

At the meeting of July 14, 2008, the Board of Directors of Saipem SpA approved the new organisational, management and control Model pursuant to Legislative Decree No. 231 of 2001 (Model 231)1 and the document ‘Sensitive activities and specific control standards’, which forms part of Model 231.
Model 231 includes the new Code of Ethics which replaces the Code of Practice and is a compulsory general principle of Model 231 itself. The Code of Ethics clearly defines, in compliance with the provisions of law, the values that Saipem recognises and accepts, as well as the responsibilities the Company assumes both internally and externally. It imposes fairness, honesty, integrity and transparency on operations, conduct, working practices and relations both internal and external to the Group; the Board of Directors ensures adherence to the Code through the annual report of the Guarantor of the Code of Ethics, whose responsibilities have been delegated to the Compliance Committee of Saipem SpA and which, pursuant to Article 6, paragraph 1 of Law Decree 231 of 2001 has been granted ‘independent powers of initiative and control’.
Saipem sent Model 231 (updated through a Board of Directors’ resolution on October 27, 2010) together with an accompanying letter, to all Italian and foreign companies in which it has a holding, underlining the fundamental importance that they adopt their own Code of Ethics and organisational, management and control model defining, in compliance with local legislation, the values recognised, accepted and shared by Saipem, as well as the responsibility it assumes towards stakeholders in both in Italy and worldwide.
In compliance with Confindustria (Italian Manufacturing Companies Association) guidelines and the latest court decisions, the Board of Directors, at the Audit Committee’s proposal, resolved, at their meeting of July 14, 2008, to appoint two external members to the Compliance Committee, to further guarantee its independence. These additional members were selected from among academics and professionals with proven expertise, one of whom took on the role of Chairman of the Committee.
In 2008, the Technical Secretariat of the Compliance Committee was established to monitor the evolution of the relevant laws and courts decisions, to draw up proposals for the continuous updating of Model 231, to collate and review information and documents received from Saipem offices, and to inform the addressees of the Model of the Committee’s decisions and monitor their implementation.
To promote the dissemination of the Code and facilitate its implementation, a specific ‘Code of Ethics Promotion Team’ was created on July 14, 2008, under the remit of the Compliance Committee. The Team consists of 8 members from several internal departments (Legal, Investor Relations, Italian Industrial Relations and Social Activities, Human Resources, Secretary’s Office, Personnel Development, Training and Compensation Organisation, Communication and Sustainability Departments). In 2010 the Team met on three occasions and resolved to have the Code of Ethics translated into 12 languages for publication on the Company’s intranet and website, and promoted its dissemination at Saipem Group's overseas companies.
With these initiatives, the Board of Directors further strengthened the internal control system, with the firm conviction that the Company’s business activities, whose aim is the creation of value for its Shareholders, must be founded on the principle of fair conduct towards all stakeholders (comprising, besides the Shareholders, employees, suppliers, clients, commercial and financial partners, in addition to the communities the Group comes into contact with in the countries where it is present) and  that this including the promotion of important social initiatives, in a continuous effort to foster amongst stakeholders an awareness that only a business approach that seizes the opportunities and manages the risks resulting from economic, environmental and social development generates long-term value for all parties involved.

(1) Model 231, comprising the Code of Ethics, is published on Saipem’s website www.saipem.com in the ‘Corporate Governance’ section.

Sustainability Report2  

The Code of Ethics includes the general principles underpinning Saipem’s sustainability policy, as detailed in the Saipem Sustainability Report which has been produced annually since 2000, and is used to promote the sustainability culture and monitor initiatives and performance. The report is proof of the growing commitment by Group companies to share values and safeguard Quality, Health and Safety and the Environment; key factors for the success of the business and to improve the social, cultural and economic context in which Saipem operates.
Saipem’s approach to Quality, Health & Safety, Environment and Sustainability is based on principles, policies and processes that are governed by certified management systems and a decentralised organisation best suited to Saipem’s business as a global contractor to the energy industry. Sustainability is a consistent and responsible way to ensure the creation of value for stakeholders in this industry, for which every challenge requires safe, reliable and innovative solutions. For Saipem, the Sustainability Report represents the most important tool for reporting on activities and results as well as for informing and engaging with stakeholders.

(2) The Sustainability Report is published on Saipem’s website www.saipem.com in the ‘Sustainability’ section under ‘Sustainability Report

Saipem’s organisational structure

Saipem’s organisational structure is based on the traditional administration and control model whereby the Board of Directors is the central body, solely responsible for the Company’s management.
Supervisory and control duties are the responsibility of the Board of Statutory Auditors, whereas the External Auditors are responsible for the legal auditing of accounts.
The Shareholders’ Meeting manifests the will of the Shareholders, through resolutions adopted in compliance with the law and the Company’s Articles of Association.
The Shareholders’ Meeting appoints the Board of Directors for a maximum term of three years.
The Board of Directors has appointed the Chairman, a Deputy Chairman - CEO (Chief Executive Officer), to whom report the COOs (Chief Operating Officers) who head the various Business Units, and a Managing Director for Business Support and Transversal Activities - Deputy CEO.
The Chairman has the power to represent the Company, pursuant to Article 21 of the Company’s Articles of Association, together