7.1.2Disclosures on Management Approach

Economic Disclosure on Management Approach

a. Why is the aspect material?

The SBM Offshore business model will for the coming decades be supported by global demand for oil, gas and energy. With its business and revenues SBM Offshore provides for salaries to its employees, value for shareholders and expenditures that benefit suppliers and governments.

Details on why this aspect is material can be found in the following sections: 2.1 Introduction, 2.4 Value Driver: Financial & Commercial, 2.6 Value Driver: Talented people, 2.7.6 Strategic sourcing and cost-effective Supply Chain.

b. How does SBM Offshore manage this aspect or its impact?

How SBM Offshore manages its economic performance can be found throughout the annual report and particularly in the following sections: 6.1.2 Financial Review, 2.7.6 Strategic sourcing and cost-effective Supply Chain, 3.2.1 SBM Offshore’s Technology Strategy.

c. How does SBM Offshore evaluate the way it manages this aspect?

The economic/financial performance of SBM Offshore is frequently monitored through a large number of KPI’s. SBM Offshore’s annual report elaborates on this aspect by disclosing information on revenues, operating costs and wages among other financial information, see section 6.1.2 Financial Review for more details.

Technology Disclosure on Management Approach

a. Why is the aspect material? 

The Company’s success is driven by its reputation in the industry for being at the forefront of technology, providing market-driven, pioneering solutions for almost 60 years. See section 2.5 Value Driver: Technology for more details on why this aspect is material.

b. How does SBM Offshore manage this aspect or its impact?

SBM Offshore maintains its technology focus thanks to the Company’s Technology Team engaging externally with its clients and internally with its product line divisions, to identify, understand and analyze the key technical and business trends in the offshore industry. SBM Offshore details how it manages the impact of its technological developments in section 3.2.1 SBM Offshore’s Technology Strategy.

c. How does SBM Offshore evaluate the way it manages this aspect?

SBM Offshore details how it evaluates the value created through technology in section 3.2.3 Technology Creating Value.

Environmental: Energy, Emissions and Effluents Disclosure on Management Approach

a. Why is the aspect material?

The Company endeavors to operate in an environmentally and sustainable manner, in order to minimize damage to local ecosystems as well as proactively protect the environment. Further details on why this aspect is material can be found in sections 2.7.2 Environment and 3.4.3 Environment.

b. How does SBM Offshore manage this aspect or its impact?

SBM Offshore has a Policy on Health, Safety, Security, Environment and Social Performance. All SBM Offshore personnel strive to understand and implement the policy requirements pertaining to their work. SBM Offshore is committed to protecting people, preventing pollution and safeguarding the environment. Details on how the Company manages this aspect can be found in sections 3.4.1 HSSE at a Glance and 3.4.3 Environment.

c. How does SBM Offshore evaluate the way it manages this aspect?

Environmental data is tracked on a daily basis, evaluated on a monthly basis and consolidated/disclosed annually. The results are compared to the results of previous years. In addition, SBM Offshore’s environmental data is benchmarked against the IOGP averages. The results are recorded and reported accordance with the IOGP and GRI guidelines.

Environmental releases to air (except gas leaks which are not quantifiable), water or land from the offshore operations units are reported using the data recorded in the Single Reporting System (SRS) database. Environmental data is evaluated by management on a monthly, quarterly and annual basis. Based on these evaluations SBM Offshore has set targets in 2016 to reduce gas flaring by 10% on the Company’s account, see sections 3.4.3 Environment and 7.2.2 Environment.

Compliance Environmental Disclosure on Management Approach

a. Why is the aspect material? 

SBM Offshore operates in an industry subject to many laws and regulations – both national and international notably related to social and environmental issues. SBM Offshore’s commitment is to be always compliant with such laws and regulations, through the systematic identification and implementation of corresponding requirements across its core business activities including the execution of projects and the operation of offshore facilities.

b. How does SBM Offshore manage this aspect or its impact?

SBM Offshore has a Regulatory Compliance Policy specifically addressing the requirement to comply with all applicable laws and regulations as well as the requirements from the classification societies and flag states that apply to the design and operation of SBM Offshore products and systems.


SBM Offshore has a Regulatory Compliance Function providing governance, support and control on regulatory matters, with a specific objective to ensure that regulatory requirements are effectively met as part of SBM Offshore’s core business activities (e.g. Project or Operation). The Function has its own resources deployed across the Company, with a reporting line ultimately to the Chief Governance and Compliance Officer, through the Group Compliance Director.

As set in its Regulatory Compliance Policy, SBM Offshore specifically ensures that:

  • The identification of rules and regulations applicable to the SBM Offshore Business is one of the early, systematic and key steps of any business initiative.
  • Regulatory awareness is continuously maintained and raised at all levels throughout the Company.
  • Practices and processes are developed and deployed to ensure regulatory obligations are fully complied with as part of SBM Offshore’s general assurance program.
  • Compliance with regulatory requirements pertaining to company designed or purchased systems and sub-systems is part of SBM Offshore verification and quality processes.
  • Appropriate corrective actions are taken to address and prevent compliance failures.
  • Adopting a pragmatic approach in an increasingly regulated business environment, SBM Offshore demonstrates to customers, shareholders, regulators and other stakeholders a robust culture of compliance.

Regulatory Compliance processes were first issued in SBM Offshore’s Management System in 2013, and further developed and upgraded over 2014 and 2015 and were re-issued at the end of 2015.

c. How does SBM Offshore evaluate the way it manages this aspect?

The role of the Regulatory Compliance Function is to ensure SBM Offshore’s compliance with all laws and regulations applicable to its core business activities. As such, the Regulatory Compliance Function acts as a “2nd line of defense”, monitoring SBM Offshore’s performance of its business activities and actual compliance with corresponding regulatory requirements.

Monitoring is notably performed through:

  • Assignment of Regulatory Compliance resources to SBM Offshore Projects and Operations, providing both support and control.
  • Implementation of tools supporting reports and KPIs.
  • Involvement of 3rdParty Specialists (including but not limited to Class Societies) to provide additional assurance through independent verification/certification.
  • Regulatory Compliance Management meetings and reporting lines independent from Business Management.
  • Systematic gathering, review and implementation of Lessons Learnt coming out of SBM Offshore Projects and Operations.
  • Review of the effectiveness of systems and processes through Management Reviews and Quality Assurance audits.

Over recent years, SBM Offshore has continuously reviewed and improved its Regulatory Compliance management approach. This is demonstrated through the development of its organization and processes as well as through the actual compliance readiness levels reached at project delivery stage which have gradually improved from project to project.

Labor practices and decent work: Employment, Diversity, Training & Education, Attract & Retain Talent, and Occupational Health & Safety Disclosure on Management Approach

a. Why is the aspect material? 

The quality and reliability of SBM Offshore products and services depends on the skills and dedication of its employees. Complexity of projects and technology is increasing and it is vital to the Company to develop from within, in combination with the attraction of the best industry talent, to uphold its high-class technical know-how. SBM Offshore focuses on retaining and developing core talent to ensure that SBM Offshore has the necessary skills to deliver its business targets today and in the future, see section 2.6 Value Driver: Talented people for more details.

Working with hazardous substances implies health and safety risks. And there is the major risk of fire and explosion associated with hydrocarbon releases and loss of structural integrity and stability. Not surprisingly, the Company has a long tradition of control and management of occupational health and safety, see section 3.4.1 HSSE at a Glance for more details.

b. How does SBM Offshore manage this aspect or its impact?

The Company believes that its employees are its most valuable asset. They play a pivotal role in realizing the Company’s strategic goals and ensuring a consistent global quality in the delivery of all its products and services, within the framework of a customer-focused culture. SBM Offshore has a Training Policy that includes development plans and training budgets at Group level, Line and Project Management level and Regional Centres. For more details see section 3.3 Talented people.

The Company strives to offer an incident-free workplace and minimize the risks to the health and safety of all its personnel, see section 2.7.1 Health, Safety & Security.

c. How does SBM Offshore evaluate the way it manages this aspect?

The total percentage of female/male permanent employees from both Onshore Operations and Offshore Production is tracked and reported. SBM Offshore tracks training hours by gender and reporting segment. The tracking of training hours is one way for the Company to monitor its investment in talent development. SBM Offshore tracks and discloses turnover data on an annual basis by location, category and age bracket. Annual benchmarking surveys are performed to ensure competitiveness of all available packages (base salary, variable pay, long term incentives and benefits packages), for more details see 3.3 Talented people.

SBM Offshore sets objectives and targets, measures, reviews and reports its HSSE and Social Performance (SP), details of the results can be found in section 7.2.1 Health, Safety & Security.

Asset Integrity and Process Safety Management Disclosure on Management Approach

a. Why is the aspect material? 

In its activities, there are significant risks involved related to health and safety of employees and the environment. An important risk is fire and explosion associated with hydrocarbon releases and loss of structural integrity and stability. Not surprisingly the Company has a long tradition of control and management of occupational health and safety.

b. How does SBM Offshore manage this aspect or its impact?

The Company strives to offer an incident-free workplace and minimize the risks to the health and safety of all its personnel. Health, Safety and Security is one of the licenses to operate for SBM Offshore.
The Company has endorsed a new Process Safety Management framework and continues to deliver a sound performance in Security.

Following the launch in 2012 of a structured program to address the improvement areas in Process Safety Management (PSM), the Company has further developed a framework and associated tools for implementation of a comprehensive PSM program based on a well-established industry standard ‘Guidelines for Risk Based Process Safety’ by the Centre for Chemical Process Safety (CCPS), part of the American Institute for Chemical Engineers (AIChE).

c. How does SBM Offshore evaluate the way it manages this aspect?

When applied throughout the lifecycle of SBM Offshore products, the twenty framework elements have the potential to reduce the risk of catastrophic events, with the ultimate aim of minimizing these risks on any of its facilities worldwide.
The implementation of the PSM Framework will be through the Group Management System to ensure that the Process Safety Management controls are fully integrated in the SBM Offshore business activities and processes.

Human Rights: Investment and Assessment Disclosure on Management Approach

a. Why is the aspect material? 

Society provides SBM Offshore the social and physical infrastructure for entrepreneurship. Accordingly, we have the following responsibilities:

  • respecting human rights as formulated in the Universal Declaration of Human Rights;
  • taking all reasonable measures to avoid involvement or complicity in human rights violations in its relationships and interactions with state security forces;
  • assessing the social, environmental and economic impact of intended operations prior to the commencement of operational activities, including the impact on local communities and human rights.

For SBM Offshore its employees are its most valuable asset. The quality and reliability of products and services depends on the skills and dedication of employees. SBM Offshore has its business spread over six continents and the Company has embraced the challenges offered by different environments. Therefore preventing any discrimination on the basis of sex, age, race, religion, political or trade union affiliations, nationality or disability is a must.

b. How does SBM Offshore manage this aspect or its impact?

In respect of Corporate Social Responsibility, SBM Offshore adheres to international standards such as the United Declaration of Human Rights, the OECD Guidelines for Multinational Enterprises, ILO conventions and the UN Global Compact.

The Company endeavours to match the highest level of employment standards for all its employees in line with the Group’s Code of Conduct and Social Accountability Manual. These standards meet and most often exceed International Human Rights and International Labour Guidelines.

c. How does SBM Offshore evaluate the way it manages this aspect?

The Company is presently taking steps to ensure all operations offices comply with the Group’s Social Accountability Manual Standard, which is based on SA8000 standards.
For certain locations the Company has ensured that its operations comply with the highest social accountability standards. The Company has external verification of the against these standards please see section 4.10 Compliance Table for details.

Society: Local Communities Disclosure on Management Approach

a. Why is the aspect material?

Governments in host countries demand certain levels of local content during construction of SBM Offshore products. The Company aims to meet these demands by subcontracting work at a local level or investing to develop local fabrication facilities.
For SBM Offshore fostering local development goes beyond compliance to local content, and refers to commitment to stimulate local and national development in the countries it operates in. For more details see section 2.7.5 Social Performance.

b. How does SBM Offshore manage this aspect or its impact?

The Company is committed to being globally aware, promoting local development and operating with integrity. The Company believes that social responsibility means investing in the well-being of its staff and maximizing employee opportunities for success by providing stimulating challenges, customized training and high levels of work satisfaction, all within a safe working environment, see section 2.7.5 Social Performance.

c. How does SBM Offshore evaluate the way it manages this aspect?

SBM Offshore has started to monitor this aspect with its socio economic impact assessment in Brazil. The Company has made, for example, investments over the years in local communities. For ways that SBM Offshore evaluates the way it manages this aspect see 3.4.5 Social Performance.

Society: Anti-Corruption and Compliance Disclosure on Management Approach

a. Why is the aspect material? 

Integrity and compliance form the backbone of SBM Offshore’s license to operate and instills trust in our stakeholders. It provides a strong foundation for rebuilding reputation and ensures that business is conducted responsibly.
SBM Offshore does not tolerate corruption, violation of trade sanctions, anti-money laundering or anti-competition laws, or any other illegal or unethical conduct in any form by anyone working for or on behalf of the Company. SBM Offshore is committed to complying with all applicable laws and regulations, the Company’s Code of Conduct and other internal rules and regulations.

b. How does SBM Offshore manage this aspect or its impact?

SBM Offshore’s Compliance Program aims to guide the Company’s leadership team in applying its moral compass and strengthen the management control system. SBM Offshore has integrated the Compliance Program into its organizational structure as well as promoting a compliant culture in the day-to-day way of working of all employees:

  • The Company’s Management Board has overall accountability, the Chief Governance and Compliance Officer (CGCO) has overall responsibility for compliance.
  • Reporting to the CGCO, the Group Compliance Director (GCD), leads the Compliance Program, drives its execution and regularly reports on its operating effectiveness to the Management Board and Supervisory Board Audit Committee, while also reporting the Company’s key compliance risks and incidents.
  • Business leadership has accountability and responsibility to manage compliance and integrity risks within the Company’s regional centers and operations.
  • Each employee of SBM Offshore has the responsibility to work in a way that corresponds with the Company’s Core Values and the Code of Conduct and is responsible for understanding and meeting the requirements of integrity and compliance obligations that apply to his or her job responsibilities.

The Company’s anti-corruption management controls system upholds SBM Offshore’s zero tolerance for corruption. Key components of the system:

  • A thorough due diligence procedure for review and approval of sales intermediaries, business partners, customers, subcontractors and other third parties.
  • The Company’s Validation Committee ultimately approves sensitive, relatively high-risk third parties and advises on due diligence related risks.
  • Compliance Risk Management Procedures

SBM Offshore’s Code of Conduct and Anti-Corruption Policy and Compliance Guide is published on its website and internal intranet for all governance bodies, employees and business partners to have access to these documents.
The Management Board and management receive regular and continuous trainings and communication on the Code of Conduct, Anti-Corruption and Compliance. Compliance management is also a regular topic on the Supervisory Board and Supervisory Board Audit Committee agenda.

SBM Offshore is committed to conducting its business honestly, ethically, and lawfully. As part of this commitment, SBM Offshore opposes business corruption in all its forms. It is SBM Offshore’s intention that all business partners, JV partners and supply chain comply with the Code of Conduct and Anti-Corruption Policies. A Third Party due diligence policy and process is in place and operational.

c. How does SBM Offshore evaluate the way it manages this aspect?

  • SBM Offshore has a procedure allowing employees to report alleged irregularities with respect to the Code without jeopardizing their employment position. Through a Freephone or web-based reporting facility (the SBM Offshore Integrity Line) employees can report – anonymously if they wish – in their own language.
  • Regular monitoring of compliance risks and mitigating measures and controls and risk based as well as incident reporting through the incident case management system.
  • SBM Offshore tracks training hours by type of employee and location.
  • Annual Code of Conduct certification by staff in leadership positions.
  • Tool to register and monitor giving and receiving of Hospitality, Gifts and Entertainment.