2006 was a milestone year in terms of Corporate Governance at Ecopetrol. In addition to making adjustments in the Corporate Governance Code, disclosure mechanisms were established during the years relative to Corporate Governance practices and the content of the Ethics Code.
The modifications made to the Corporate Governance Code were intended to making it coherent with the company bylaws, the strategic framework, and the company’s new policies and regulations.
The Ethics Code was written up with the workers using the company’s intranet portal, and, once it was ready, workshops were used to distribute the code to more than 350 employees in administration, production fields, refineries, and transportation stations.
Ecopetrol’s new strategic framework until the year 2011, and the development and approval of the capitalization of Ecopetrol encouraged the application of Corporate Governance practices with greater worker participation and greater dissemination of key company information.
Changes were also introduced in the appointment of the President of Ecopetrol. The selection of the new President is now led by the Board of Directors with the support of two firms specialized in searching for senior level executives.
New principals and alternates enter the Board of Directors and, consequently, the membership of some of the Board Committees too.
The company’s risk map was updated for the different businesses and support areas.
Ecopetrol also joined the “Colombia Capital” program led by the Colombian Stock Market, to obtain the support necessary to improve Corporate Governance and to adjust the Corporate Governance Code to the new business model.
Leader in Transparency
Ecopetrol now uses the national transparency index (ITN for the initials in Spanish). The instrument creates incentives for avoiding corruption and measures the company’s improvement in that area and its implementation of measures to lessen the risk of corruption.
In December 2006, the Corporación Transparencia por Colombia (Transparency for Colombia Corporation), a non-profit entity that is the Colombian representative for Transparency International, presented the results of its annual nation-wide measurement.
Ecopetrol was ranked in the first place among 23 stateowned and mixed-economy industrial and commercial companies for its good performance and administration during 2005. Its score was 93.32 points out of 100. The report by Corporación Transparencia por Colombia placed Ecopetrol in the group of the 10 best companies in terms of sustained results over the last two years.
- Citizen participation Offices
- Modernization of the Web
- Optimization in making
information available on hiring
- Advances such as training in
and administration of hiring processes.
- Improvements in fiscal responsibility and disciplinary processes.
- Improvement in the results
of company management
according to the comprehensive
audit practiced annually by
the Comptroller General of the
- Compliance with the improvement plans agreed to with the Office of the
- Strengthening of the process for the supply of goods and services.
- External audit performed
- Constant evaluation of management activity and performance.
- Implementation and strengthening of an internal control system.
To promote and encourage peaceful coexistence and conflict resolution, some years ago Ecopetrol and the Unión Sindical Obrera (Worker’s Union) created a National Commission and regional sub committees on Human Rights and Peace.
Their activities have trained workers in peaceful coexistence and conflict resolution, leading to increasingly effective resolution of cases presented to the committees.
Triple A Rating
The Duff & Phelps credit rating agency assigned the AAA (triple A) rating, the highest credit rating available, to Ecopetrol S.A.’s corporate debt.
The international agency based Ecopetrol’s rating on its “strong financial profile, sizable reserves, stable production levels and a dominant domestic market share”.
The rating agency also analyzed the company’s vulnerability to fluctuations in international commodity prices, decreased reserves of crude oil, and tightening environmental regulations. “Fluctuations in energy prices are generally mitigated by the company’s hedging policy, which also permits it to guarantee minimum required payments to the government”, concluded the rating company in its evaluation.
The agency also emphasized that the company has increased its investments in exploration and production to face a decrease in its oil production, at the same time that “it is remodeling its refineries to meet environmental regulations and to increase export capacity”.
Activities of HR Committees 2006
|Regional workshops on training in human
|Workshops for basic training in human rights
|Regional assemblies for employees and peace workers
|National assembly for employees and peace workers
|Permanent Assembly of the Civil Society for Peace
|Meetings of the National Commission for Human Rights
|Training of the members of the Sub Committees for
Human Rights and Peace
|Diploma course in Human Rights
|Total activities carried out